Saes Getters

Annual Report • Apr 8, 2016

Consolidated Financial Statements 2015

SAES Getters S.p.A.

Capital Stock of 12,220,000 fully paid-in

Corporate Headquarters: Viale Italia, 77 – 20020 Lainate (Milan), Italy

Registered with the Milan Court Companies Register no. 00774910152

Board of Directors

President	Massimo della Porta
Vice President and Managing Director	Giulio Canale
Directors	Alessandra della Porta (1) Luigi Lorenzo della Porta (1) Andrea Dogliotti (1) Roberto Orecchia (1) (2) (5) (6) (7) Luciana Rovelli (1) (2) (4) (6) (8) PietroAlberico Mazzola (1) Adriano De Maio (1) (3) (4) Stefano Proverbio (1) (2) (5) (6) (8) Gaudiana Giusti (1) (2) (4) (5) (6) (8)

Board of Statutory Auditors

President	Pier Francesco Sportoletti
Statutory Auditors	Vincenzo Donnamaria (8) Sara Anita Speranza
Alternate Statutory Auditors	Angelo Rivolta Anna Fossati
Audit Firm	Deloitte & Touche S.p.A. (9)
Representative of holders of savings shares	Massimiliano Perletti (10) (e-mail: massimilano.perletti@roedl.it)

(1) Non-executive Director

(2) Independent Director, pursuant to the criteria of the Code of Conduct of the Italian Stock Exchange

(3) Independent Director, pursuant to the combined provisions of article 147-ter, paragraph 4, and article 148, paragraph 3, of Legislative Decree 58/1998

(4) Member of the Remuneration and Appointment Committee

• (5) Member of the Audit and Risk Committee
• (6) Member of the Committee for Transactions with Related Parties
• (7) Lead Independent Director
• (8) Member of the Supervisory Body

(9) Appointed for the years 2013-2021 by the Shareholders' Meeting held on April 23, 2013

(10) Appointed for the years 2014-2016 by the Special Meeting of Holders of Savings Shares held on April 29, 2014

The mandate of the Board of Directors and of the Board of Statutory Auditors, elected on April 28, 2015, will expire on the same date of the Shareholders' Meeting in which the financial statements for the year ended December 31, 2017 are approved.

Powers

Pursuant to article 20 of the Articles of Association, the President and the Vice President and Managing Director are each of them separately entrusted with the legal representation of the Company, for the execution of Board of Directors' resolutions, within the limits of and for the exercise of the powers attributed to them by the Board itself.

Following the resolution adopted on April 28, 2015, the Board of Directors granted the President and the Vice President and Managing Director the powers of ordinary and extraordinary administration, with the exception of the powers strictly reserved to the competence of the Board or of those powers reserved by law to the Shareholders' Meeting.

The President Massimo della Porta is also Group Chief Executive Officer. The Vice President and Managing Director Giulio Canale is also Deputy Group Chief Executive Officer and Group Chief Financial Officer.

INDEX

Letter to Shareholders	11
Group financial highlights	13
Report on operations of SAES Group	17
Consolidated financial statements for the year ended December 31, 2015	53
Consolidated statement of profit or loss	55
Consolidated statement of other comprehensive income	55
Consolidated statement of financial position	56
Consolidated cash flow statement	57
Consolidated statement of changes in equity	58
Explanatory notes	59
Certification of the consolidated financial statements	129
pursuant to article 81-ter of the Consob Regulation
Board of Statutory Auditors' report to the Shareholders' Meeting	133
Independent Auditors' report on the consolidated financial statements	147
Report on operations of SAES Getters S.p.A.	151
Separate financial statements of SAES Getters S.p.A. for the year ended December 31, 2015	173
Statement of profit or loss	175
Statement of other comprehensive income	175
Statement of financial position	176
Cash flow statement	178
Statement of changes in equity	179
Summary of the main data from subsidiaries' financial statements	181
Certification of the financial statements of SAES Getters S.p.A	185
pursuant to article 81-ter of the Consob Regulation

Reports of the Board of Directors on the agenda of the Ordinary Shareholders' Meeting

Report on corporate governance and ownership

pursuant to article 123-bis of the Consolidated Finance Act and article 89-bis of the Consob Issuers Regulation

LETTER TO SHAREHOLDERS

Dear Shareholders,

There is an overall satisfaction for 2015, in which the Group met all its objectives. In particular, sales strongly increased, total revenues¹ recorded their top historical level and all the economic and financial indicators significantly improved. The most innovative components of the activity, in particular the shape memory alloys for medical and industrial applications, recorded the best results in terms of revenue growth and profitability.

All these results confirm the validity of the strategic choices made in the last recent years, matured in a very difficult economic environment, but in which we have always believed, defending them and keeping firmly the course we have undertaken.

The decision to develop new materials, in addition to the historical getters and purification media, has enabled the Group to enter new markets, while that of going downstream in the value chain, by developing and selling more complex devices, has led to a rapid increase in revenues and to exploit the core competencies and the competitive advantages of our materials at the best.

The Group, with the clear objective to grow, in the coming years will continue to develop this new business model, which is giving great satisfaction.

It is also important to point out that it was possible to achieve these results also thanks to the contribution of the more traditional segments, getters and gas purification systems, whose remarkable trend was favored by the recovery in some markets that had shown a slowdown in the past and by the favorable euro/dollar exchange rate.

The beginning of 2016 confirms the great success of the shape memory alloys, as well as the strong recovery of some historical areas of the Company.

In 2016 we will be strongly committed in the commercial and industrial development of the joint venture Actuator Solutions, which produces sophisticated electromechanical devices using shape memory alloys as engines for the movement and that is increasingly becoming a player in the huge market of components for mobile phones. In addition, we will be active in the development of the business of functional polymers that use nano-structured and micro-structured getters as functional elements, for applications in the field of active food packaging.

The continuous growth in revenues and the further improvement in profitability are the main objectives of the Group and all the management is oriented to achieve them.

I thank our Shareholders for believing in our company and I thank all the employees and partners that daily help us to maintain the level of prestige that has always distinguished our Company.

Dr Ing. Massimo della Porta President

¹ Total revenues of the Group are calculated by incorporating the 50% joint venture Actuator Solutions with the proportional method.

Group financial highlights

GROUP FINANCIAL HIGHLIGHTS

(thousands of euro)

Income statement figures		2015	2014	Difference	Difference %
NET SALES
- Industrial Applications		101,109	85,842	15,267	17.8%
- Shape Memory Alloys		63,680	44,460	19,220	43.2%
- Business Development		1,223	1,399	(176)	-12.6%
Total		166,012	131,701	34,311	26.1%
GROSS PROFIT (1)
- Industrial Applications		47,496	41,856	5,640	13.5%
- Shape Memory Alloys		24,230	14,322	9,908	69.2%
- Business Development & Corporate Costs (2)		261	493	(232)	-47.1%
Total		71,987	56,671	15,316	27.0%
	% on sales	43.4%	43.0%
EBITDA (3)		29,375	21,648	7,727	35.7%
	% on sales	17.7%	16.4%
OPERATING INCOME (LOSS)		20,499	13,012	7,487	57.5%
	% on sales	12.3%	9.9%
Group NET INCOME (LOSS) from continued operations		8,820	3,424	5,396	157.6%
	% on sales	5.3%	2.6%
Group NET INCOME (LOSS) (4)		8,820	4,836	3,984	82.4%
	% on sales	5.3%	3.7%

Balance sheet and financial figures	December 31, 2015	December 31, 2014	Difference	Difference %
Tangible fixed assets	50,383	50,684	(301)	-0.6%
Group shareholders' equity	126,485	112,685	13,800	12.2%
Net financial position	(17,280)	(26,945)	9,665	35.9%
Other information	2015	2014	Difference	Difference %
Cash flow from operating activities	22,851	13,958	8,893	63.7%
Research and development expenses	14,620	14,375	245	1.7%
Number of employees as at December 31 (5)	1,004	964	40	4.1%
Personnel cost (6)	62,262	51,599	10,663	20.7%
Disbursement for acquisition of tangible assets	5,017	4,310	707	16.4%

(1) This item is calculated as the difference between the net turnover and the industrial costs directly and indirectly attributable to the products sold.

(2) This item includes costs that cannot be directly attributed or allocated in a reasonable way to the Business Units, but which refer to the Group as a whole.

(3) EBITDA is not deemed as an accounting measure under International Financial Reporting Standards (IFRS); however, we believe that EBITDA is an important parameter for measuring the Group's performance and therefore it is presented as an alternative indicator. Since its calculation is not regulated by applicable accounting standards, the method applied by the Group may not be homogeneous with the ones adopted by other Groups. EBITDA is calculated as "Earnings before interests, taxes, depreciation and amortization".

(thousands of euro)
	2015	2014
Operating income	20,499	13,012
Depreciation and amortization	8,511	8,556
Write-down of assets	311	0
Bad debt provision accrual (release)	54	80
EBITDA	29,375	21,648
% on sales	17.7%	16.4%

(4) In 2014 it includes a net income from assets held for sale and discontinued operations equal to 1,412 thousand euro.

(5) As at December 31, 2015 this item includes:

• employees for 962 units (913 units as at December 31, 2014);

• personnel employed with contract types other than employment agreements, equal to 42 units (51 units as at December 31, 2014).

This figure does not include the personnel (employees and temporary workers) of the joint ventures amounting, according to the percentage of ownership held by the Group, to 50 units as at December 31, 2015 (36 units at the end of the previous year, always according to the percentage of ownership held by the Group).

(6) As at December 31, 2015 the severance costs included in the personnel costs are equal to 137 thousand euro; the use of the social security provisions in the Italian Group's companies has led to a reduction in the personnel costs equal to 2,173 thousand euro.

In the year 2014 the costs for staff reduction amounted to 210 thousand euro, while the use of the social security provisions led to a reduction in the personnel costs equal to 2,139 thousand euro.

Report on operations of SAES Group

REPORT ON OPERATIONS

A pioneer in the development of getter technology, the Company SAES Getters S.p.A., together with its subsidiaries, (hereinafter "SAES® Group") is the world leader in a variety of scientific and industrial applications where stringent vacuum conditions or ultra-pure gases are required. In more than 70 years of activity, the Group's getter solutions have been supporting innovation in the information display and lamp industries, in sophisticated high vacuum systems and in vacuum thermal insulation, in technologies spanning from large vacuum power tubes to miniaturized silicon-based microelectronic and micromechanical devices. The Group also holds a leading position in ultra-pure gas refinement for the semiconductor and other hightech markets.

Starting in 2004, by leveraging the core competencies in special metallurgy and in the materials science, the SAES Group has expanded its business into the advanced material markets, in particular the market of shape memory alloys, a family of materials characterized by super elasticity and by the property of assuming predefined forms when subjected to heat treatment. These special alloys, which today are mainly applied in the biomedical sector, are also perfectly suited to the realization of actuator devices for the industrial sector (domotics, white goods industry, consumer electronics and automotive sector).

More recently, SAES has expanded its business by developing components whose getter functions, traditionally obtained from the exploitation of the special features of some metals, are instead generated by chemical processes. Thanks to these new developments, SAES is evolving, adding to its competencies in the field of special metallurgy also those of organic chemicals.

A total production capacity distributed in eleven facilities, a worldwide-based sales & service network, about 1,000 employees allow the Group to combine multicultural skills and expertise to form a truly global enterprise.

SAES Group is headquartered in the Milan area (Italy).

SAES Getters S.p.A. is listed on the Italian Stock Exchange Market, STAR segment, since 1986. The Parent Company is controlled by S.G.G. Holding S.p.A., which does not exercise any management and coordination activity in accordance with article 2497 of the Civil Code, for the reasons explained later in the Report on corporate governance and ownership.

The Group's business structure identifies two Business Units: Industrial Applications and Shape Memory Alloys. The corporate costs (those expenses that cannot be directly attributed or allocated in a reasonable way to the business units, but which refer to the Group as a whole) and the costs related to the basic research projects or undertaken to achieve the diversification into innovative businesses (Business Development Unit) are shown separately from the two Business Units.

Industrial Applications Business Unit
Electronic & Photonic Devices	Getters and metal dispensers for electronic vacuum devices
Sensors & Detectors	Getters for microelectronic and micromechanical systems (MEMS)
Light Sources	Getters and metal dispensers used in discharge lamps and fluorescent lamps
Vacuum Systems	Pumps for vacuum systems
Thermal Insulation	Products for thermal insulation
Pure Gas Handling	Gas purifier systems for semiconductor industry and other industries
Shape Memory Alloys (SMA) Business Unit
SMA Medical applications	Nitinol shape memory alloys for the biomedical sector

The following table illustrates the Group's Business organizational structure:

SMA Industrial applications	SMA actuator devices for the industrial sector (domotics, white goods industry,
	consumer electronics and automotive sector)
Business Development Unit
Functional Polymer Composites	Innovative technologies that integrate getter materials in polymer matrices

Industrial Applications Business Unit

Electronic & Photonic Devices

SAES Group provides advanced technological solutions to the electronic devices of a wide range of markets, including the aeronautical, medical, industrial, security and defence sectors, as well as basic research. The portfolio of products includes, among others, getters of different types and formats, alkaline metal dispensers, cathodes and materials for thermal management. The offered products are able to satisfy the most stringent application requirements and are employed in various devices such as X-ray tubes, microwave tubes, solid state lasers, electron sources, photomultipliers and radiofrequency amplification systems.

Sensors & Detectors

SAES Group provides advanced technological solutions to the electronic devices of a wide range of markets, including the aeronautical, industrial, security and defence sectors, as well as consumer electronics.

The portfolio of products includes mainly getters of different types and formats. The offered products are able to satisfy the most stringent application requirements in terms of the high quality of the guaranteed vacuum and are employed in various devices such as night vision devices based on infrared sensors, gyroscopes for navigation systems, pressure sensors and, more recently, MEMS devices of variuos nature. In particular, for the MEMS market, SAES has developed a thin getter film that can be deposited directly on silicon slices used for the manufacturing of sensors; this allows the getter technology to be easily integrated in miniaturized systems of last generation.

Light Sources

SAES Group is the world leader in the supply of getters and metal dispensers for lamps. Its innovative and high-quality products work by preserving the vacuum and the purity of the refill gases, thereby maintaining optimum lamp operation conditions over time. SAES has also been involved for years in the development of mercury dispensers with a low environmental impact, in line with the stricter international legislation in force in this field.

Vacuum Systems

The skills acquired in the vacuum technology are the basis of the development of pumps based on nonevaporable getter materials (NEG), which can be applied in both industrial and scientific fields (as an example, in analytical instrumentation, in vacuum systems for research activities and in particle accelerators). The family of high vacuum pumps NEXTorr® , welcomed in the already mentioned application markets, integrates in a single device, extremely compact and powerful, both the getter technology and the ionic one. This product line has most recently been joined by that of CapaciTorr® HV, high vacuum pumps that use an innovative alloy with a greater capacity to absorb gases and which have contributed to further strengthening the Group's position in its target markets.

Thermal Insulation

SAES solutions for vacuum thermal insulation include NEG products for cryogenic applications, for solar collectors both for home applications and operating at high temperatures and for thermos. In addition, SAES is particularly active in the development of innovative getter solutions (SMARTCOMBO® ) for vacuum insulating panels for the white goods industry.

Pure Gas Handling

In the microelectronics market, SAES mission is to develop and sell advanced gas purification systems for the semiconductors industry and for other industries which use pure gases in their processes. Through the subsidiary SAES Pure Gas, Inc., the Group offers a full range of purifiers for bulk gases and special gases. The range of SAES purifiers, which covers the full spectrum of flows required and all gases normally used in the production processes, represents the market standard as regards the technology used, the totality of impurities removed and the lifespan of the purifiers.

Shape Memory Alloys (SMA) Business Unit

The SAES Group produces semi-finished products, components and devices in shape memory alloy, a special alloy made of nickel-titanium (Nitinol) characterized by super-elasticity (a property that allows the material to withstand even large deformations, returning then to its original form) and by the property of assuming predefined forms when subjected to heat treatment. The production process of SAES is vertically integrated (from the melting of the Nitinol alloy to the production of components) and allows a complete flexibility in the supply of products, together with a total quality control.

SMA Medical Applications

Nitinol is used in a wide range of medical devices, in particular in the cardiovascular field. In fact, its superelastic properties are ideal for the manufacturing of the devices used in the growing field of non-invasive surgery, such as self-expanding devices (aortic and peripheral stents or heart valves) and catheters to navigate within the cardiovascular system. SAES, through its subsidiaries Memry Corporation and Memry GmbH, offers to the end manufacturers of the medical device a full range of sophisticated Nitinol-based solutions.

SMA Industrial Applications

The shape memory alloy, in addition to being characterized by super-elasticity, has the property of assuming predefined forms when subjected to heat treatment and, by virtue of this characteristic, it is used in the production of a variety of devices (valves, proportional valves, actuators, release systems, mini-actuators) that exploit its distinctive characteristics (noiseless, compact, light, low power consumption, proportional control). The use of SMA devices in the industrial field goes across the board of many application areas such as domotics, the white goods industry, consumer electronics and the automotive business.

Business Development Unit – Functional Polymer Composites

The SAES Group has developed a new technology platform that integrates getter materials in polymer matrices, today mainly used in the field of OLED (Organic Light Emitting Diodes) displays and lamps. More recently, SAES has started to offer a new range of specific materials for flexible OLED applications that should represent the new development trend in the display field.

These functional polymer composites, initially developed for the OLED business, begin to find application also in other areas: that of implantable medical devices and diagnostic for the new solid-state images, in addition to food packaging, which should allow a further expansion of the current perimeter of use of this technology.

The functional polymer composites are proposed by SAES Group also in the field of electrochemical devices of new generation for energy storage, such as super-capacitors and lithium batteries, primarily intended for the market of hybrid and electric engines. In particular, SAES offers polymer solutions with getter functionalities to control the generation of gas inside these devices and to improve their safety and performance.

Relevant events occurred in 2015

The year 2015 was characterized by a sharp increase in revenues compared to the previous year, even excluding the positive effect generated by the strengthening of the dollar, and by the improvement of the economic and financial indicators.

In particular, the consolidated net revenues was equal to 166 million euro, up by 26.1% compared to 131.7 million euro achieved in 2014.

The organic growth, equal to +9.1%, was mainly driven by the shape memory alloys Business Unit (organic growth equal to +23.0%), confirming the success of the already made and ongoing investments. The success of the shape memory alloys (SMA) both for medical and industrial applications came along with the organic growth in the more traditional and established businesses of gas purification and of vacuum systems, which enabled the Industrial Applications Business Unit to end the year with an organic growth equal to 2.4%.

In the Shape Memory Alloys Business Unit both segments recorded a significant growth: the medical SMA segment (Nitinol raw materials and components) showed an organic growth of 17.9%, driven by the introduction of new and more sophisticated Nitinol-based medical devices in the market by some large customers who are leaders in this industry; also the industrial SMA segment recorded a significant growth and it almost doubled (organic growth equal to 69.5% or 3 million euro) thanks to the increase in sales of SMA springs and trained wires for automotive and consumer applications, as well as to the entry into the luxury goods market. This organic growth, in absolute terms, was even higher (3.9 million euro) consolidating, on a pro-forma basis, the revenues of the joint venture Actuator Solutions, achieved entirely with the sales of SMA devices for industrial applications.

In the Industrial Applications Business Unit the growth, driven by the positive exchange rate effect (+15.4%) and by higher volumes in the gas purification business (+10.0%) and in that of vacuum pumps (+15.6%), more than offset the organic decrease in the lamps segment (-22.0%), penalized by the competitive pressure of LEDs, as well as that in the segment of products for thermal insulation (-12.1%), due to a weaker demand in the oil drilling business and in the refrigeration market.

Total revenues of the Group, achieved by incorporating the 50% joint venture Actuator Solutions with the proportional method instead of the equity method, were equal to 174.1 million euro up by 25.3% compared to 138.9 million euro in 2014, thanks both to the strong increase in consolidated revenues (+26.1%) and to the revenues' growth of the joint venture (+13.0%).

All the consolidated economic indicators showed a growth, driven by the increase in revenues. Namely, there has been a strong increase in the consolidated net income, almost doubled if compared to the previous fiscal year, together with the marked improvement in the EBITDA %, increased from 16.4% to 17.7%, mainly driven by the shape memory alloys sector.

Finally, please note the continuous improvement in the net financial position during the fiscal year 2015, related to the good operating performance. In addition, the rebalancing of the structure of the Group's financial debt has continued in 2015, with a progressive increase in the incidence of medium-long term loans compared to the short-term bank debt.

Here below the other significant events occurred in 2015.

At the end of 2014 Memry Corporation had officially signed an agreement with the State of Connecticut to obtain a soft financing in several tranches, for a total amount of 2.8 million USD. The loan has duration of ten years with an annual subsidized interest rate of 2% and is used to purchase new machinery and equipment necessary to expand the production plant in Bethel.

50% of the financing (1.4 million USD) might be converted into a non-refundable grant provided that, by November 2017, Memry Corporation has reached pre-defined employment objectives.

The first tranche of the soft financing, equal to 2 million USD, was paid by the State of Connecticut to the US subsidiary on February 20, 2015.

On January 23, 2015, the third and final tranche of the fixed consideration for the acquisition of the hydrogen purifiers business was paid to Power & Energy, Inc. (1.8 million USD).

On May 12, 2015 the process to reduce the share capital of the Chinese subsidiary SAES Getters (Nanjing) Co., Ltd. from 13.6 million USD to 6.6 million USD was finalized, following the reduced required capitalization after the transformation of its activity from production into a commercial one, completed in 2014. This transaction generated a non-recurring exchange rate gain into the income statement (previously already included in the consolidated shareholders' equity in the item "Translation reserve") of 1.9 million euro.

On May 27, 2015, following the decrease of the stake of S.G.G. Holding S.p.A. in SAES Getters S.p.A. below the threshold of 50%, the prerequisite to keep the tax consolidation program with S.G.G. Holding S.p.A. as consolidating company ended, as envisaged by the combined provisions of articles 117 and 120 of the Income Tax Code ("TUIR").

On September 30, 2015, the option to join a new tax consolidation program between SAES Getters S.p.A., SAES Advanced Technologies S.p.A., E.T.C. S.r.l. and SAES Nitinol S.r.l., with the Parent Company as consolidator, was exercised, together with the submission of the tax return of the Parent Company SAES Getters S.p.A. This new tax consolidation program has been valid starting from January 1, 2015.

On May 31, 2015 the final tranche of the bank loan held by the US controlled company SAES Smart Materials, Inc., equal to 1.7 million USD, was reimbursed.

On June 10, 2015 SAES announced the signature of a loan with EIB (European Investment Bank) worth 10 million euro to support R&D projects in the field of vacuum technologies, shape memory alloys (SMAs) and Organic Light Emitting Transistor (OLET) solutions. The transaction is supported by the new generation of financial instruments of "InnovFin - EU Finance for Innovators", dedicated to innovative and growing companies that make use of the financial support of the European Union under the project "Horizon 2020" (the European outline program for Research and Innovation, 2014-2020).

The medium-term loan consists of two tranches of the same amount, one secured by SACE, has a five-year term and is used to cover part of a research program for a total value of 45 million euro to be carried out in Italy, started in 2014 and that will end in 2017.

The loan provides for the compliance with the standard financial covenants for this type of transactions, calculated every six months on the consolidated economic and financial figures.

On July 24, 2015 SAES Getters S.p.A. signed a new multi-tranche loan for a total value of 11 million euro. The contract provides for an amortizing type tranche, amounting to 8 million euro and with a duration of five years, the repayment of which is established in semiannual fixed principal amounts and interests indexed to the six months Euribor, plus a spread of 2.25%. The second tranche, worth 3 million euro, is a revolving one, with duration of three years and its use based on the operational needs of the SAES Group. Please note that the last revolving tranche was not used during the fiscal year 2015.

On September 25, 2015, SAES Getters S.p.A. signed an IRS (Interest Rate Swap) contract on the first amortizing tranche with a notional value of 3.6 million euro expiring on July 31, 2020, that provides for the exchange of the six months Euribor with a fixed rate of 0.285%.

The loan provides for the activation of financial covenants that are standard for this type of transactions, calculated annually on consolidated economic and financial figures.

On October 15, 2015 SAES Nitinol S.r.l. made a capital contribution in favor of the joint venture Actuator Solutions GmbH equal to 0.5 million euro, in addition to the same payment made on July 15, 2015. The 50% joint partner Alfmeier, through the company SMA Holding GmbH, paid the same amounts.

On December 15, 2015 each of the two partners of the joint venture (SAES Nitinol S.r.l and SMA Holding GmbH) made a further 2 million euro capital contribution in favor of the joint venture; in the same date, Actuator Solutions GmbH provided the repayment of 1.5 million euro to each of the two shareholders, as anticipated reimbursement of the interest-bearing loan with an equal amount, granted in February 2014 and expiring on December 31, 2016.

In November 2015 the share capital of the Korean subsidiary SAES Getters Korea Corporation was officially reduced from 10,497,900 thousand KRW to 524,895 thousand KRW, by reducing the nominal share value from KRW 10,000 to KRW 500 (for a total number of 1,049,790 shares).

Such operation has generated a non-recurring exchange rate gain in the income statement equal to 30 thousand euro (previously included in the consolidated shareholders' equity under the item "Translation reserve").

With reference to the loan subscribed by Memry Corporation in January 2009 and divided into two residual lines ('amortizing loan' and 'bullet loan') for a total value of 11 million USD, which had to be totally reimbursed within July 2017, on December 22, 2015 the US subsidiary signed an agreement with the financing institution, effective from December 31, 2015, in order to reschedule such repayment; in particular, the residual amount of the two lines was converted into an amortizing loan of the same amount (11 million USD) with a duration of 5 years, with a repayment plan consisting in six-month fixed tranches (starting from June 30, 2016 until December 31, 2020) equal to 1.1 million USD each. Interests will be paid every six months and benchmarked to the Libor rate, plus a spread equal to 2.70% (such spread will be reduced to 2.20% in case the ratio between the net financial position and the EBITDA of Memry Corporation is lower than 1.50).

A new set of covenants has also been defined, still to be calculated every six months, based not on consolidated figures, but on the economic and financial figures of Memry Corporation only.

On December 23, 2015 SAES Getters S.p.A. signed an agreement with the company Rodofil s.n.c., based in the province of Parma (Italy), for the commitment by the Parent Company to the acquisition, within the end of January 2016, of 49% of the company SAES RIAL Vacuum S.r.l. SAES RIAL Vacuum S.r.l. was established through the transfer by Rodofil of the 'Rial Vacuum' business (assets, trademark and customers list, as well as inventory and employed personnel), specialized in the design and manufacture of vacuum chambers for accelerators, synchrotrons and colliders, used in the major research laboratories worldwide.

On December 23, 2015 SAES Getters S.p.A. acquired the first tranche equal to 10% of the newco SAES RIAL Vacuum S.r.l., while the finalization of the acquisition of the further 39% was realized on January 19, 2016.

The total price of the 49% of the share capital is equal to approximately 1.6 million euro, of which 0.3 million euro paid in cash in 2015 and 1.3 million euro paid in January 2016.

The signed contract includes some shareholders' agreements that govern the relationship between the parties enabling to qualify SAES RIAL Vacuum S.r.l. as a joint venture. They also include a put and call option among the shareholders, according to an agreed schedule. In particular, Rodofil will have the right to exercise a put option, by selling to SAES a minimum of 2% up to a maximum of 51% of its shares of SAES RIAL Vacuum S.r.l., through a one-off operation between May 1, 2020 and May 31, 2020, at a predetermined price related to the performance of the new company at the date of the sale; if Rodofil does not exercise its put option, SAES will have the right to exercise a call option through a one-off operation between June 1, 2020 and June 30, 2020, for a percentage equal to 30% of the share capital, at a price calculated with similar method.

The aim of the agreement is the creation of an Italian technological and manufacturing hub of the highest level, for the design and production of integrated vacuum components and systems for accelerators, for the research, as well as for industrial systems and devices. The joint venture will combine at the highest level the competences of SAES in the field of materials, vacuum applications and innovation, with the experience of Rial and Rodofil in the design, assembling and fine mechanical productions, with the aim of offering absolutely excellent quality products and successfully competing in the international markets.

The use of social security provisions in the Italian subsidiary SAES Advanced Technologies S.p.A. continued in 2015.

Sales and economical results for the fiscal year 2015

In the fiscal year 2015 consolidated net revenues were equal to 166,012 thousand euro, up by 26.1% compared to 131,701 thousand euro achieved in 2014.

The exchange rate effect was positive and equal to +17.0%, almost exclusively due to the strengthening of the US dollar against the euro, while the organic growth amounted to +9.1%, mainly driven by the shape memory alloys (SMA) businesses both for medical and industrial applications, by the businesses of gas purification and of vacuum systems.

Total revenues of the Group, achieved by incorporating the 50% joint venture Actuator Solutions with the proportional method instead of the equity method, were equal to 174,087 thousand euro, up by 25.3% compared to 138,921 thousand euro in 2014, thanks both to the marked increase in consolidated revenues (+26.1%) and to the strong revenues' growth of the joint venture (+13.0%).

	2015	2014	Difference	Difference
				%
Consolidated net sales	166,012	131,701	34,311	26.1%
50% Actuator Solutions' sales	8,638	7,646	992	13.0%
Eliminations	(636)	(458)	(178)	-38.9%
Other adjustments	73	32	41	128.1%
Total revenues of the Group	174,087	138,921	35,166	25.3%

(thousands of euro)

The following chart shows the increase of consolidated net sales during the year 2015, highlighting the effect of exchange rates and the variation due to the changes in selling prices and sales volumes.

Compared to the previous year, the significant sales' growth in both segments of the SMA Business Unit (+43.2% overall, compared to 2014), resulted in the increase of the percentage weight of this operating segment (from 33.8% to 38.4%), compared to that of the Industrial Applications Business Unit (down from 65.2% to 60.9%), the latter operating in more traditional business sectors.

The following table contains the breakdown of the consolidated net sales by business segment in 2015 and in 2014, along with the percent change at current and comparable exchange rates.

Business	2015	2014	Difference	Difference %	Exchange rate effect %	Organic change %
Electronic & Photonic Devices	13,455	12,105	1,350	11.2%	13.4%	-2.2%
Sensors & Detectors	10,253	8,814	1,439	16.3%	11.4%	4.9%
Light Sources	9,234	10,989	(1,755)	-16.0%	6.0%	-22.0%
Vacuum Systems	8,593	7,015	1,578	22.5%	6.9%	15.6%
Thermal Insulation	6,382	6,456	(74)	-1.1%	11.0%	-12.1%
Pure Gas Handling	53,192	40,463	12,729	31.5%	21.5%	10.0%
Industrial Applications	101,109	85,842	15,267	17.8%	15.4%	2.4%
SMA Medical Applications	55,956	40,076	15,880	39.6%	21.7%	17.9%
SMA Industrial Applications	7,724	4,384	3,340	76.2%	6.7%	69.5%
Shape Memory Alloys	63,680	44,460	19,220	43.2%	20.2%	23.0%
Business Development	1,223	1,399	(176)	-12.6%	10.3%	-22.9%
Total net sales	166,012	131,701	34,311	26.1%	17.0%	9.1%

(thousands of euro)

Consolidated revenues of the Industrial Applications Business Unit amounted to 101,109 thousand euro, up by 17.8% compared to 85,842 thousand euro in the previuos year. The currency trend recorded a positive exchange rate effect equal to +15.4%, net of which revenues would have organically increased by 2.4%.

The businesses showing a strong organic growth were the Pure Gas Handling Business (+10.0%), whose positive performance was linked to the increased investments in silicon foundries and in memories, as well as to the recovery of the display segment, and the Vacuum Systems Business (+15.6%), thanks to the increasing volumes of the traditional NEG pumps both for industrial applications and for the research field, as well as to the more and more increasing penetration of the recently introduced NEXTorr vacuum pumps. In the Sensors and Detectors Business the organic growth (+4.9%) was related to the increased sales of getter solutions for consumer and industrial applications in the surveillance and security sector.

In the Electronic & Photonic Devices Business it is worth noting the substantial stability of volumes (-2.2%), together with the positive exchange rate effect, allowing a +11.2% increase in revenues.

On the other hand, despite the favorable euro/dollar exchange rate effect, the following segments decreased: the Light Sources Business (with an organic decrease of -22.0%), penalized by the technological competition of the Solid State Lighting (LEDs) towards fluorescent lamps; the Thermal Insulation Business (-12.1%), in which the growth in the sales of the vacuum bottles business did not completely offset the weak demand of getter solutions for oil extraction (penalized by the decrease of the crude oil price), as well as the contraction of the sales in the refrigeration market (subjected to a more and more increasing competitive pressure).

Sales of the Electronic & Photonic Devices Business were equal to 13,455 thousand euro in 2015, compared to 12,105 thousand euro in 2014 (+11.2%). Excluding the positive exchange rate effect (+13.4%), the price/quantity effect was equal to -2.2%.

Sales of the Sensors & Detectors Business were equal to 10,253 thousand euro in 2015, up by 16.3% compared to 8,814 thousand euro in 2014. Excluding the positive exchange rate effect (+11.4%), the overall organic growth amounted to +4.9%.

Sales of the Light Sources Business amounted to 9,234 thousand euro, down by 16.0% compared to 10,989 thousand euro in 2014. Excluding the positive exchange rate effect (+6.0%), the lamps business showed an organic decrease of 22.0% compared to the previous year.

Sales of the Vacuum Systems Business were equal to 8,593 thousand euro in 2015, up by 22.5% compared to 7,015 thousand euro in 2014. Excluding the positive exchange rate effect (+6.9%), the overall organic growth was equal to +15.6%.

Sales of the Thermal Insulation Business were equal to 6,382 thousand euro in 2015, compared to 6,456 thousand euro in 2014 (-1.1%). The currency effect was positive and equal to +11.0%, while the overall organic decline amounted to -12.1%.

Sales of the purification sector (Pure Gas Handling Business) were equal to 53,192 thousand euro in 2015, compared to 40,463 thousand euro in 2014 (+31.5%). Excluding the positive exchange rate effect (+21.5%), the overall organic growth was equal to +10.0%.

Consolidated revenues of the Shape Memory Alloys Business Unit were equal to 63,680 thousand euro, showing a significant increase (+43.2%) compared to 44,460 thousand euro in the previous year. The exchange rate effect was positive and equal to +20.2%, net of which the organic growth was equal to +23.0%. Both segments of this Business Unit recorded a strong growth.

The medical SMA segment (Nitinol raw materials and components) recorded an organic growth of 17.9%, driven by the introduction of new and more sophisticated Nitinol-based medical devices in the market, made by some important customers, leaders in this field. Also the industrial SMA segment recorded a strong organic growth (+69.5%), thanks to the increased sales of SMA springs and trained wires, across all the sectors in which the Group operates (automotive, consumer applications, luxury goods).

Sales of the SMA Medical applications Business were equal to 55,956 thousand euro, up by 39.6% compared to 40,076 thousand euro in 2014. Excluding the positive exchange rate effect (+21.7%), the overall organic growth was equal to +17.9%.

Sales of the SMA Industrial applications Business were equal to 7,724 thousand euro in 2015, up by 76.2% compared to 4,384 thousand euro in 2014. The exchange effect was positive and equal to +6.7%, while the price/quantity effect was equal to +69.5%.

The Business Development Unit, that includes projects of basic research or under development aimed at diversifying into innovative businesses, closed the year 2015 with revenues equal to 1,223 thousand euro (1,399 thousand euro in 2014), made almost exclusively of sales of functional polymers for OLED passivematrix displays and for implantable medical devices. The exchange rate effect was positive and equal to +10.3%, net of which the organic decrease would have been equal to -22.9%.

The following chart shows the quarterly trend of revenues in 2015 and in 2014, with evidence of the breakdown by Business Unit.

The quarterly trend of consolidated revenues in 2015 showed for the Shape Memory Alloys Business Unit a progressive increase in the first three quarters, followed by a slight decrease (-6.3% was the decrease in the fourth quarter, compared to the third one) in the last part of the year; this decline was physiological, after the excellent performance of the previous quarter.

Within the Industrial Applications Business Unit, the slight sales' decrease in the 2015 central quarters was due to the weakness of the gas purification business, penalized by the postponement of some deliveries and by the typical cyclicality of this sector.

In the Business Development Unit the revenues of the second semester (481 thousand euro) recorded a slowdown compared to the first half of the year (742 thousand euro) because, despite the increase in sales of functional polymers for passive matrix OLED screens, those in the field of implantable medical devices have been penalized by the postponement of some purchase orders.

The following table contains the quarterly net sales trend in 2015 with evidence of the breakdown by Business.

(thousands of euro)
Business	1st Quarter 2015	2nd Quarter 2015	3rd Quarter 2015	4th Quarter 2015
Electronic & Photonic Devices	3,177	3,386	3,423	3,469
Sensors & Detectors	2,481	2,563	2,527	2,682
Light Sources	2,499	2,521	2,141	2,073
Vacuum Systems	1,917	2,173	2,079	2,424
Thermal Insulation	1,534	1,615	1,404	1,829
Pure Gas Handling	15,029	12,601	11,395	14,167
Industrial Applications	26,637	24,859	22,969	26,644
SMA Medical Applications	12,492	13,450	15,406	14,608
SMA Industrial Applications	1,458	1,850	2,367	2,049
Shape Memory Alloys	13,950	15,300	17,773	16,657
Business Development	442	300	210	271
Total net sales	41,029	40,459	40,952	43,572

A breakdown of revenues by geographical location of customers is provided below.

Geographical area	2015	%	2014	%	Difference	Difference %
Italy	1,924	1.2%	2,073	1.6%	(149)	-7.2%
Europe	32,200	19.4%	26,934	20.5%	5,266	19.6%
North America	74,687	45.0%	61,451	46.7%	13,236	21.5%
Japan	5,815	3.5%	6,197	4.7%	(382)	-6.2%
South Korea	11,883	7.2%	5,525	4.2%	6,358	115.1%
China	16,832	10.1%	14,524	11.0%	2,308	15.9%
Other Asian countries	19,475	11.7%	12,347	9.4%	7,128	57.7%
Others	3,196	1.9%	2,650	1.9%	546	20.6%
Total net sales	166,012	100.0%	131,701	100.0%	34,311	26.1%

(thousands of euro)

The main changes related to the geographical distribution of revenues refer to the gas purification sector, whose sales grew in the Asian market (in particular, South Korea, Taiwan, Singapore and China), while they decreased in the US market.

The revenues' growth in China (+15.9%) was also supported by the higher sales of getter solutions for civil and industrial applications in the surveillance field and in that of security (Sensors & Detectors Business).

Sales in North America increased (+21.5%), despite the decrease in revenues in the Pure Gas Handling Business, thanks to the aforementioned growth in the SMA medical segment.

To the latter, as well as to the increased sales both of SMA springs and trained wires for industrial applications and of vacuum systems, was due the increase in the revenues of the "Europe" geographical area.

Consolidated gross profit amounted to 71,987 thousand euro in the fiscal year 2015, compared to 56,671 thousand euro in 2014. The marked growth (+27.0%), also favored by the positive effect of the revaluation of the dollar against the euro, was mainly due to the increased revenues and to the slight increase in gross margin² (from 43.0% in the previous year to 43.4% in 2015), allowed by the higher margins in the Shape Memory Alloys Business Unit, which more than offset the lower margins of the gas purification business. For further details, please refer to the Business Unit analysis.

The following table shows the 2015 consolidated gross profit by Business Unit, compared to the previous year.

2 Calculated as the ratio between gross profit and consolidated revenues.

(thousands of euro) Business Unit	2015	2014	Difference	Difference %
Industrial Applications	47,496	41,856	5,640	13.5%
% on Business Unit net sales	47.0%	48.8%
Shape Memory Alloys	24,230	14,322	9,908	69.2%
% on Business Unit net sales	38.0%	32.2%
Business Development & Corporate Costs	261	493	(232)	-47.1%
% on Business Unit net sales	21.3%	35.2%
Gross profit	71,987	56,671	15,316	27.0%
% on net sales	43.4%	43.0%

Gross profit of the Industrial Applications Business Unit was equal to 47,496 thousand euro in 2015, increased by 13.5% if compared to 41,856 thousand euro in 2014: the increase in sales more than offset the decrease in profitability. Namely, the gross margin (47.0% compared to 48.8% in 2014) was penalized mainly by the increasing competitive pressure within the gas purification business in the Asian markets. Also the marginality of the vacuum pumps segment slightly decreased, penalized by a product mix with a higher absorption of raw materials, as well as that of the lamps business, suffering from the price pressure.

In the Shape Memory Alloys Business Unit, the increase in revenues allowed the significant growth in both the gross profit (+69.2%, from 14,322 thousand euro in 2014 to 24,230 thousand euro in 2015) and the gross margin (from 32.2% in 2014 to 38.0% in 2015). In particular, the gross margin improved in both the medical and industrial segments, as a result of greater economies of scale and of the increased efficiency of the new productions.

Gross profit of the Business Development Unit & Corporate Costs was equal to 261 thousand euro (21.3% of consolidated sales), compared to a gross profit equal to 496 thousand euro in the previous year (35.2% of consolidated sales). The decrease was mainly attributable to the lower sales, which in turn led to a higher incidence of manufacturing fixed costs.

The following chart shows the quarterly trend of both the consolidated gross profit and gross margin.

The continuous improvement both in the gross profit and in the gross margin during 2015, supported by the continued growth of the Shape Memory Alloys Business Unit, stopped only in the third quarter, in which the gas purification sector suffered from the postponement of some deliveries and from a higher pressure on prices, and then it has resumed in the last quarter of the year.

Consolidated operating income amounted to 20,499 thousand euro in 2015, with a strong increase (+7,487 thousand euro) compared to an operating income equal to 13,012 thousand euro in the previous year. In percentage terms, the operating margin was equal to 12.3%, compared to 9.9% in 2014.

The increase in revenues and in gross margin, together with the reduction of the operating expenses in percentage terms (from 34.4% to 31.1%), enabled the improvement in the operating indicators compared to the previous year.

The following table shows the operating result of the fiscal year 2015 by Business Unit, compared with the previous year.

(thousands of euro)
Business Unit	2015	2014	Difference	Difference %
Industrial Applications	27,460	24,829	2,631	10.6%
Shape Memory Alloys	13,561	5,603	7,958	142.0%
Business Development & Corporate Costs	(20,522)	(17,420)	(3,102)	-17.8%
Operating income (loss)	20,499	13,012	7,487	57.5%
% on net sales	12.3%	9.9%

Operating income of the Industrial Applications Business Unit was equal to 27,460 thousand euro in 2015, up by 10.6% compared to 24,829 thousand euro in 2014: the increase in revenues and the subsequent increase in the gross profit more than offset the reduction of the royalties income on the licensing of the getter technology for MEMS (for further details please refer to the specific section below) and the increase in the operating expenses, in particular those items mostly related with the increased sales volumes, like commissions to agents and transport costs.

Operating income of the Shape Memory Alloys Business Unit amounted to 13,561 thousand euro, more than doubled (+142.0%) compared to the same figure recorded in the previous year equal to 5,603 thousand euro. The strong increase in sales and in the gross margin, together with the lower incidence of operating expenses (from 19.7% to 16.9%), favored the significant improvement in the operating margin, which rose from 12.6% to 21.3%.

The operating result of the Business Development & Corporate Costs was negative and equal to -20,522 thousand euro and it included both the result of the Business Development Unit and the costs that cannot be directly attributed or reasonably allocated to any business sector but refer to the Group as whole; this figure compares to an operating loss of -17,420 thousand euro in 2014. The worsening was mainly due to higher corporate general and administrative expenses (higher costs for fixed and variable remuneration to employees and to Executive Directors and higher consultant fees).

Consolidated operating expenses were equal to 51,552 thousand euro, compared to in 45,319 thousand euro in the previous year and showed a growth (+13.8%), partly physiological and related to the increase in sales and to inflation, partly due to the appreciation of the dollar against the euro.

Excluding the currency effect, the increase mainly regarded the general and administrative expenses, in particular increased costs for the fixed and variable remuneration of the employees and of the Executive Directors, as well as higher consultant fees. Always net of the currency effect, selling expenses and R&D expenses were substantially in line with those of the previous year.

The following chart shows the trend of consolidated operating expenses in the fiscal year 2015.

In 2015 the total labor cost was equal to 62,262 thousand euro, compared to 51,599 thousand euro in 2014: excluding the exchange rate effect that led to an increase in labor costs of around 5.8 million euro, the growth was due both to the increase in the average number of the Group's employees concentrated in the gas purification business and in that of shape memory alloys and to wage increases aimed at the recovery of inflation, as well as to higher accruals for the variable components of salaries, estimated to grow in line with the trend of the economic performance.

The result of the year includes depreciation and amortization equal to 8,511 thousand euro, substantially in line with the previous year (8,556 thousand euro).

During 2015 the item benefited from a reduction (about 419 thousand euro) following the review, based on the appraisal of an independent third party, of the remaining useful life of the production plant and machinery, as well as of the tools and instruments used in the research department of the Parent Company. This reduction in amortization was offset by the upward variation in the US Group's Companies, attributable to the currency effect.

Consolidated EBITDA was equal to 29,375 thousand euro in 2015 (17.7% of consolidated revenues), up by 35.7% compared to 21,648 thousand euro in 2014 (16.4% of revenues). As shown in the following table, excluding the provision against legal risks, equal to 689 thousand euro, made by the Parent Company in 2015 (for further details please refer to the Note no. 31), the adjusted EBITDA would have been equal to 30,064 thousand euro in 2015, or 18.1% of consolidated revenues.

The following table shows an EBITDA detail for 2015, compared with the previous year.

(thousands of euro)
	2015	2014	Difference	Difference %
Operating income	20,499	13,012	7,487	57.5%
Depreciation and amortization	8,511	8,556	(45)	-0.5%
Write-down of assets	311	0	311	n.s.
Bad debt provision accrual (release)	54	80	(26)	-32.5%
EBITDA	29,375	21,648	7,727	35.7%
% on sales	17.7%	16.4%
Provision against legal risks	689	0	689	n.s.
Adjusted EBITDA	30,064	21,648	8,416	38.9%
% on sales	18.1%	16.4%

The royalties accrued for the licensing of the thin film getter technology for MEMS of new generation amounted to 902 thousand euro in 2015, compared to 1,843 thousand euro in 2014: the decrease (-51.1%) is due both to lower commissions for the year (due to the price erosion that is affecting the gyroscopes market, as well as to the decrease in volumes) and to lower lump-sums resulting from the signature of new licensing agreements. In relation to the last two signed agreements, please note that the technology transfer has not yet been finalized and therefore, as at December 31, 2015, such contracts have not matured any commission yet.

The balance of other net income (expenses) was negative and equal to 838 thousand euro, compared with a negative balance of -183 thousand euro in 2014: the decrease was mainly due to the already mentioned provision against legal claims, equal to 689 thousand euro, booked by the Parent Company in 2015.

The net balance of financial income and expenses was negative and equal to -1,528 thousand euro (compared to a negative figure of -1,620 thousand euro in 2014) and it mainly included interest expenses on loans, both short and long term ones, held by the Parent Company and by the US subsidiaries, as well as the bank fees related to the credit lines held by SAES Getters S.p.A.

Compared to the previous year, following the change in the financial indebtedness, with a higher percentage of medium-long term loans compared to short term bank debt, the increase in interests related to the signing of new long-term loans by the Parent Company was offset by lower costs on loans in the form of "hot money" and on the use of bank credit lines.

The loss deriving from the evaluation with the equity method of the joint venture Actuator Solutions amounted to -1,843 thousand euro, compared to a loss equal to -1,286 thousand euro in the previous year. For more details on the composition of such loss, please refer to the Note no. 9 and the Note no. 17.

The sum of the exchange rate differences recorded a positive balance for 694 thousand euro in 2015, compared to a slightly positive balance of 147 thousand euro in 2014. The positive balance of 2015 was mainly due to foreign exchange gains (1,907 thousand euro) following the partial release into the income statement of the translation reserve generated by the consolidation of SAES Getters (Nanjing) Co., Ltd. and of SAES Getters Korea Corporation, following the partial reduction of the share capital of the two Asian subsidiaries. These exchange rate gains were partially offset by the losses realized on forward contracts entered to hedge commercial transactions in dollars and yen (-986 thousand euro), in addition to foreign exchange losses (around -0.5 million euro) generated in the last part of the fiscal year from the conversion of the financial credit denominated in euro of the Korean subsidiary versus the Parent Company, only partially hedged by forward contracts³ . Please note that such financial credit was strongly reduced in November 2015, following the already mentioned reduction of the share capital of SAES Getters Korea Corporation.

Consolidated income before taxes amounted to 17,822 thousand euro, or 10.7% of consolidated revenues, showing a significant increase (+73.8%) compared to an income before taxes of 10,253 thousand euro in the previous year (7.8% of consolidated revenues).

Income taxes amounted to 9,002 thousand euro in 2015 and the Group tax rate was equal to 50.5% The taxes included a negative adjustment equal to 1,692 thousand euro, as a consequence of the redetermination of deferred tax assets and liabilities of the Group's Italian companies by applying the new IRES⁴ tax rate, equal to 24%, which will come into force starting from 2017; net of such adjustment, the Group's tax rate would have been equal to 41.0%, strongly improved compared to 66.6% of the previous year, as a result of lower tax losses realized in the current year by the Group's Italian companies, on which deferred tax assets were

³ In view of the reduction of the share capital of SAES Getters Korea Corporation through the partial use of the financial credit in euro that the Korean subsidiary has towards the Parent Company, at beginning of 2015 the Group, in order to limit the currency risk arising from the fluctuations of the Korean won on the balance of this financial credit, signed two different forward sales contracts, with different maturities. The first contract, with a notional value of 7 million euro, expired on September 30, 2015, while the second one, with a notional value of 1.5 million euro, expired on December 28, 2015.

⁴ Article 1, paragraph 61-64, of the 2016 Italian Stability Law modified the corporate tax rate (IRES) of the Italian companies, providing for a reduction. Namely, paragraph 61 provides for a reduction of the IRES tax rate from the current 27.5% to 24%, effective from January 1, 2017.

prudentially not recognized, as well as of some positive effects related to the calculation of the taxes regarding the US subsidiaries.

It is finally worth mentioning that in 2014 income taxes were penalized by a provision against tax risk equal to 500 thousand euro, made by the Parent Company and related to the assessment on the 2005 Company's tax return; net of such provision, the tax rate would have been reduced to 61.7% in 2014.

Consolidated net income amounted to 8,820 thousand euro in 2015 (5.3% of consolidated revenues), almost doubled (+82.4%) compared to a 4,836 thousand euro in the previous year. Please note that the 2014 result included an income from assets held for sale and

discontinued operations equal to 1,412 thousand euro, represented by the residual proceeds deriving from the sale of the plant of SAES Getters (Nanjing) Co., Ltd. and by the final exit of the Group from the CRT business (268 thousand euro), as well by the net capital gain on the sale of the land use right and the building of the Chinese subsidiary (1,144 thousand euro).

Excluding this amount, the net income from continuing operations more than doubled (+157.6%), from 3,424 thousand euro in 2014 to 8,820 thousand euro in the current year.

Net financial position – Investments – Other information

A breakdown of the items making up the consolidated net financial position is provided below.

	December 31,	June 30,	December 31,
	2015	2015	2014
Cash on hands	23	21	19
Cash equivalents	24,021	19,315	25,583
Cash and cash equivalents	24,044	19,336	25,602
Related parties current financial assets	555	480	2,762
Other current financial assets	0	323	189
Current financial assets	555	803	2,951
Bank overdraft	(5,012)	(14,831)	(30,722)
Current portion of long term debt	(7,136)	(6,452)	(6,690)
Other current financial liabilities	(1,957)	(966)	(2,069)
Current financial liabilities	(14,105)	(22,249)	(39,481)
Current net financial position	10,494	(2,110)	(10,928)
Related parties non current financial assets	600	2,300	0
Long term debt, net of current portion	(27,019)	(23,310)	(14,689)
Other non current financial liabilities	(1,355)	(1,381)	(1,328)
Non current liabilities	(28,374)	(24,691)	(16,017)
Non current net financial position	(27,774)	(22,391)	(16,017)
Net financial position	(17,280)	(24,501)	(26,945)

(thousands of euro)

The consolidated net financial position as at December 31, 2015 was negative and equal to 17,280 thousand euro (cash equal to +24,044 thousand euro and net financial liabilities of -41,324 thousand euro), compared to a negative net financial position equal to 26,945 thousand euro as at December 31, 2014 (cash equal to +25,602 thousand euro and net financial liabilities of -52,547 thousand euro).

The strong improvement (+9,665 thousand euro in absolute value , equal to +35.9% compared to the net indebtedness as at December 31, 2014) was attributable to the cash-inflows generated by the operating activities and related to the increase in both revenues and economic results. The capital expenditure for tangible and intangible assets, net of disposals, was equal to - 4,903 thousand euro. The acquisition of 10% of SAES RIAL Vacuum S.r.l., with the commitment to acquiring a further 39% of the same company (-1,614 thousand euro), as well as the capital injection made in 2015 in favor of the joint venture Actuator Solutions GmbH (for a total amount of 2,900 thousand euro) must be also considered as an investing activity. The cash-out for the payment of dividends amounted to €3.5 million (financing activity).

The exchange rate effect on the net financial position was slightly positive (+0.5 million euro): the negative effect generated by the revaluation of the US dollar on the debt denominated in dollars was more than offset by the positive effect on the cash denominated in that currency and held by the US subsidiaries.

Please note that the structure of the Group's financial indebtedness has changed during 2015 to gain a correct balancing, with a higher percentage of medium-long term loans compared to short-term bank debt.

The chart below shows the quarterly amount of the net financial position during the year 2015.

Please note the continuous improvement in the net financial position during 2015, thanks to the quarterly selffinancing, on which also the changes in the working capital have played a key role and that has more than offset the quarterly disbursements for investments. Finally, please note that also the dividends were paid during the second quarter.

The cash flow from operating activities was positive and amounted to 22,851 thousand euro (13.8% of consolidated revenues), showing a significant increase (+63.7%) compared to 13,958 thousand euro in 2014 (10.6% of revenues): the 2015 cash flows are almost entirely attributable to the selffinancing, while in the previous year the selffinancing was partially offset by the negative change in the net working capital, which was penalized by the increase in the business volumes of the Pure Gas Handling Business and of the SMA one.

In 2015 the disbursements for investments in tangible fixed assets amounted to 5,017 thousand euro, compared with 4,310 thousand euro in the previous year. Instead, the investments in intangible assets were not significant (42 thousand euro, compared to 57 thousand euro in 2014). For more details on the capital expenditure of the year, please see the Notes no. 15 and no. 16.

Within the investment activities, please also note the disbursement of 1,884 thousand euro for the payment of the last tranche of the fixed amount and of the commissions related to the technological upgrade of the purification business carried out during 2013 but for which the payment has been deferred (cash-out equal to 1,813 thousand euro in the previous year). Finally, please note the acquisition of 10% of SAES RIAL Vacuum S.r.l.⁵ , for a consideration of 330 thousand euro, as well as the capital contributions made during the year in favor of the joint venture Actuator Solutions GmbH, for a total amount of 2,900 thousand euro. As at December 31, 2014 the cash-out for investment activities was partially offset by the proceeds deriving from the sale of the use land right, the building and related appurtenances of the subsidiary SAES Getters (Nanjing) Co., Ltd. (+3,239 thousand euro), as well as from the disposal of other assets (+331 thousand euro) mainly belonging to the same Chinese factory.

The composition of net sales and costs (cost of sales and operating expenses) by currency in 2015 is provided below.

The official price trend for ordinary and savings shares during the year 2015 and the first months of 2016 is given below.

⁵ The commitment to acquire a further 39% of SAES RIAL Vacuum S.r.l. by the end of January 2016 for an amount of 1,284 thousand euro led to the recognition of a current financial debt of the same amount by the Parent Company, resulting in a reduction of the consolidated net financial position, but without any effect on the Group's cash and cash equivalents, since the payment is deferred to 2016.

The value of ordinary shares, listed on the STAR segment of Mercato Telematico Azionario of Borsa Italiana, has more than doubled (+110.9%) in 2015, while the saving shares recorded an increase in their value of +92.3%, compared with an increase of +12.0% and +38.2% recorded on the FTSE MIB and FTSE Italia Star indices respectively.

The following table shows the main ratios.

Ratios		2015	2014	2013 adjusted (**)	2013
Operating income/Total net sales	%	12.3	9.9	5.8	4.3
Income before taxes/Total net sales	%	10.7	7.8	4.2	2.7
Net income from continued operations/Total net sales	%	5.3	2.6	1.9	0.6
Net income from continued operations/Average shareholders' equity (ROAE)	%	7.8	3.3	2.5	0.8
Research expenses/Total net sales	%	8.8	10.9	11.5	11.6
Depreciation of tangible assets/Total net sales	%	4.3	5.4	6.0	6.0
Cash flows from operating activities/Total net sales	%	13.8	10.6	3.9	3.9
Taxes/Income before taxes	%	50.5	66.6	53.2	75.9
Total net sales/Average number of employees (*)	k euro	177	147	133	133
Accumulated depreciation/Tangible assets	%	71.1	69.8	70.0	70.0

(*) Calculated without considering the employees of the joint ventures, evaluated using the equity method.

(**) Net of non-recurring costs and other costs considered by the management as not meaningful to the current operating performance.

Performance of SAES Getters S.p.A.'s subsidiaries in 2015

SAES ADVANCED TECHNOLOGIES S.p.A., Avezzano, AQ (Italy)

In 2015 the company achieved revenues equal to 33,676 thousand euro, up by +2.7% compared to 32,787 thousand euro in the previous year: the increase of revenues in the business of getter pumps for particle accelerators and the higher intercompany sales of getter alloys for purification systems to the subsidiary SAES Pure Gas, Inc. have more than offset the decrease of sales in the lamps business, penalized by the increasing competitive pressure of the LED lamps on the fluorescent ones.

The net income for the year amounted to 5,961 thousand euro, in line with that of the previous year (5,903 thousand euro): the increase in revenues, also favoured by the appreciation of the US dollar, and the shift in the sales mix towards products with a higher gross margin have more than offset the losses on forward contracts entered to hedge the volatility in exchange rates.

The use of defensive job-security agreements led to a reduction in personnel costs equal to -2,172 thousand euro in the 2015 (in 2014, the use of the social security provisions had allowed a reduction equal to 1,974 thousand euro).

Finally, please note that, in September 2015, the company, together with SAES Getters S.p.A., SAES Nitinol S.r.l. and E.T.C. S.r.l., has created a new tax consolidation with the Parent Company as consolidating company, with effect from January 1, 2015.

SAES GETTERS USA, Inc., Colorado Springs, CO (USA)

The company reported consolidated revenues equal to 79,515 thousand USD in 2015 (71,667 thousand euro at the average exchange rate of 2015), compared to 75,349 thousand USD (56,717 thousand euro) and a consolidated net income of 7,130 thousand USD (6,426 thousand euro), compared to a consolidated net income of 7,492 thousand USD in 2014 (5,639 thousand euro).

Further notes are provided below.

The US parent company SAES Getters USA, Inc. (which operates primarily in the Industrial Applications Business Unit) reported sales of 13,831 thousand USD, compared to 15,660 thousand USD recorded in the previous year: the decrease is concentrated in the business of getter components for fluorescent lamps, caused by a discount policy resulting from the increasing technological competition of LEDs on fluorescent lamps. The company ended the year with a net income of 7,130 thousand USD, slightly down compared to a net income of 7,492 thousand USD in 2014: the decrease of sales and of the gross margin, penalized by the price pressure, came along with a lower income deriving from the evaluation of the shareholding in the subsidiary SAES Pure Gas, Inc., that ended the current year with a net income lower than that of the previous year. These reductions were partially offset by some positive effects related to the final calculation of the taxes of the previous year (about 540 thousand USD), that allowed to reduce the tax rate of the US subsidiary from 32.3% to 29.3%.

The subsidiary SAES Pure Gas, Inc. based in San Luis Obispo, CA (USA) (active in the Pure Gas Handling Business) achieved sales of 58,582 thousand USD, up by 10.2% compared to 53,139 thousand USD in the previous year; the net income equal to 4,699 thousand USD compared with a net income of 5,426 thousand USD in 2014. Despite the growth in sales (favored by increased investments in the factories of microprocessors, as well as by the recovery of the investments in the display segment), the lower gross margin, penalized by the increasing competitive pressure in the Asian market, and the increased operating expenses (in particular, higher personnel costs), led to the decline in the net income compared to 2014. Finally, please note that on January 23, 2015, as envisaged by the contract, the third and final tranche of the fixed consideration for the acquisition of the hydrogen purifiers business has been paid to Power & Energy, Inc. (1.8 million USD).

The subsidiary Spectra-Mat, Inc., Watsonville, CA (USA), operating in the Electronic & Photonic Devices Business, achieved revenues of 7,101 thousand USD in 2015, compared to 6,550 thousand USD in the previous year, and a net income of 365 thousand USD, compared to a loss of 60 thousand USD in 2014. The recovery of the US military spending, together with the strong demand for industrial goods, helped to boost (+8.4%) the sales of the year 2015; the increase in sales, together with a product mix with a lower absorption of direct and indirect labor, allowed to close the year with a positive result.

SAES GETTERS EXPORT, Corp., Wilmington, DE (USA)

The company, which is owned directly by SAES Getters S.p.A., operates with the object of managing the exports of all US Group's companies. In particular, starting from 2015, SAES Getters Export, Corp. began to operate also on behalf of Memry Corporation and SAES Smart Materials, Inc. while in the past it had only managed the export activities of SAES Getters USA, Inc. and its subsidiaries.

In 2015 it achieved a net income of 12,567 thousand USD (11,327 thousand euro), up by 50.0% compared to 8,380 thousand USD (equal to 6,308 thousand euro) in the previous year, due to the higher commission income⁶ collected, following the above-mentioned extension of its services to Memry Corporation and SAES Smart Materials, Inc.

SAES GETTERS (NANJING) Co., Ltd., Nanjing & Shanghai (P.R. of China)

The company ceased its production activity during the second half of 2013 and it currently manages the commercial activities of the Group in the Republic of China.

In 2015, the share capital of the Chinese subsidiary SAES Getters (Nanjing) Co., Ltd. was reduced from 13.6 million USD to 6.6 million USD, following the lower capitalization required after the transformation of its activity from production into a commercial one.

SAES Getters (Nanjing) Co., Ltd. ended the year 2015 with a turnover of 30,035 thousand RMB (4,307 thousand euro), substantially in line with 30,162 thousands RMB (3,685 thousand euro) of the previous year: the higher sales in the Chinese market of getter solutions for civil and industrial applications in the surveillance and security sectors have offset the decrease in sales of getters for vacuum insulated panels for the refrigeration sector and of components for light sources. The company ended the year with a net income of 190 thousand RMB (27 thousand euro), compared to 15,564 thousand RMB (1,901 thousand euro) as at December 31, 2014: the decrease in the net income, despite the reduction in manufacturing fixed costs, was due to the lower dividends received by SAES Getters International Luxembourg SA (in which SAES Getters (Nanjing) Co., Ltd. owns a stake of 10%) and to the lower interest income earned on the cash and cash equivalents, decreased as a result of the partial repayment of the share capital to the Parent Company; in addition, the result of the previous year included the net gain⁷ deriving from the sale of the land use right and the manufacturing plant equal to 12,040 thousand RMB.

MEMRY GmbH, Weil am Rhein (Germany)

The company, which manufactures and markets in the European market shape memory alloy components for both medical and industrial applications, in 2015 achieved sales equal to 7,573 thousand euro, with a strong growth (+68.8%) compared to 4,487 thousand euro in the previous year. The increase in sales of both Nitinol super-elastic wire for new consumer applications and semi-finished products SMA for medical applications, together with the shift in the sales mix towards products with a lower absorption of raw material allowed to increase the gross margin and, consequently, the net income, that more than doubled (+157.2%) compared to 2014 (1,386 thousand euro in 2015 compared to 539 thousand euro in the previous year).

SAES NITINOL S.r.l., Lainate, MI (Italy)

The company, 100% owned by SAES Getters S.p.A., has as its business purpose the design, the production and the sale of shape memory alloy instruments and actuators, getters and any other equipment for the creation of high vacuum, either directly or by means of interests and investments in other companies. In order to achieve its corporate purpose, on July 5, 2011, the company established the joint venture Actuator Solutions GmbH, together with the German group Alfmeier Präzision (for further details on the joint venture, please refer to the next paragraph and to the Notes no. 9 and no. 17 of the Consolidated financial statements). SAES Nitinol S.r.l. ended the current year with a loss equal to 73 thousand euro (in 2014 the loss was equal to 107 thousand euro), primarily consisting in the cash pooling interest expenses charged by the parent company SAES Getters S.p.A., partially offset by the interest income on interest-bearing loans granted in 2014 to the joint venture Actuator Solutions GmbH (for further details on these loans please refer to the Note no. 20). Please note that, on October 15, 2015 SAES Nitinol S.r.l. made a capital contribution in favor of the joint venture Actuator Solutions GmbH equal to 0.5 million euro, in addition to the same payment made on July 15, 2015. A further capital contribution equal to 2 million euro was made on December 15, 2015 and, in the same date, Actuator Solutions GmbH provided the anticipated reimbursement of the interest-bearing loan of 1.5 million euro granted in February 2014 and expiring on December 31, 2016.

⁶ Being intercompany commissions, their increase has no relevance on the consolidated operating income.

⁷ That means excluding the sale expenses.

Finally, please note that, in September 2015, the company, together with SAES Getters S.p.A., SAES Advanced Technologies S.p.A and E.T.C. S.r.l., has created a new tax consolidation with the Parent Company as consolidating company, with effect from January 1, 2015.

E.T.C. S.r.l., Bologna, BO (Italy)

The company, founded as a spin-off supported by the National Research Council (CNR), is located in Bologna and has as its purpose the development of functional materials for applications in the Organic Electronics and in the Organic Photonics, as well as the development of integrated organic photonic devices for niche applications.

The company, 96% owned by the Parent Company, operates exclusively as a research center for the above mentioned developments and ended the year 2015 with a loss of 1,586 thousand euro⁸ , down by 20.6% compared to that of the previous year (equal to -1.998 thousand euro) thanks to higher grants on research projects in progress and lower consultant fees (the latter incurred directly and by the Parent Company and recharged to E.T.C. S.r.l.).

Please note that, on March 11, 2015, SAES Getters S.p.A. approved a capital contribution of 109 thousand euro in favor of E.T.C. S.r.l., equal to the difference between the loss made by the company in the fiscal year 2014 and that estimated for the same period at the beginning of the year and already covered by the Parent Company on March 13, 2014. Simultaneously, the Parent Company approved an additional capital contribution of 1,450 thousand euro aimed at covering the losses expected in the fiscal year 2015. The percentage of ownership of SAES Getters S.p.A. (96% of the share capital, as specified above) remained unchanged compared to December 31, 2014⁹ .

Finally, please note that, in September 2015, the company, together with SAES Getters S.p.A., SAES Advanced Technologies S.p.A and SAES Nitinol S.r.l., has created a new tax consolidation with the Parent Company as consolidating company, with effect from January 1, 2015.

SAES GETTERS INTERNATIONAL LUXEMBOURG S.A., Luxembourg (Luxembourg )

The company's main objectives are the management and the acquisition of investments, the optimal cash management, the grant of intra-group loans and the coordination of the Group services.

In 2015, the company recorded a positive net income of 371 thousand euro, mainly including the foreign exchange gains deriving from the reduction of the share capital of the Korean subsidiary SAES Getters Korea Corporation, excluding the net loss realized on the two euro forward sale contracts, signed by the Parent Company and subsequently recharged to SAES Getters International Luxembourg S.A., to hedge the currency risk on the financial credit in euro of the Korean subsidiary (for further details please refer to the Note no.39). The previous year ended with a net income equal to 582 thousand euro.

Some notes on the performance of the subsidiaries of SAES Getters International Luxembourg S.A. are provided below.

SAES Getters Korea Corporation, Seoul (South Korea), is 62.52% owned by SAES Getters International Luxembourg S.A., whereas the remainder of the capital stock is held directly by the Parent Company SAES Getters S.p.A. In 2011 the company ceased the production activities and now operates only as a distributor of products made by other Group's companies in the Korean market.

In November 2015 the share capital of the company was officially reduced from 10,497,900 thousand KRW, to 524,895 thousand KRW, by reducing the nominal share value from 10,000 KRW to 500 KRW (for a total number of 1,049,790 shares). Therefore, the percentages owned by SAES Getters S.p.A and SAES Getters International Luxembourg S.A. remained unchanged.

In 2015 SAES Getters Korea Corporation recorded revenues equal to 1,190 million KRW (947 thousand euro), down compared to 1,959 million KRW (1,401 thousand euro) following the lower sales in the field of thermal insulation products and in that of lamp devices, which mostly suffered from the increase in the

⁸ Result of the reporting prepared for the consolidation purposes according to the International Accounting Standards.

⁹ SAES Getters S.p.A. covered the losses also on behalf of the minority shareholder, maintaining unchanged its percentage of ownership.

competitive pressure. The 2015 ended with a net loss of 771 million KRW (-613 thousand euro), compared to a loss of 1,029 million KRW (-736 thousand euro) in 2014: despite the decrease in revenues, the lower foreign exchange losses deriving from the conversion of the financial receivable in euro that the Korean subsidiary holds in respect of the Parent Company, allowed to improve the result of the year (the related hedging contracts, instead of being held by the Korean subsidiary, has been entered into by the Parent Company SAES Getters S.p.A. and then recharged to SAES Getters International Luxembourg S.A.). Finally, please note that such intra-group financial credit was significantly lower at the end of the year, following the aforementioned reduction of the share capital of SAES Getters Korea Corporation.

The company SAES Smart Materials, Inc., based in New Hartford, NY (USA), active in the development, production and sale of shape memory alloy semi-finished products, recorded revenues equal to 17,506 thousand USD (15,778 thousand euro) in 2015, up by +5.4% when compared to 16,605 thousand USD (12,499 thousand euro) in 2014. The increase in sales and the shift in the sales mix towards products with a lower absorption of raw material allowed to end the year with a net income of 3,726 thousand USD (3,358 thousand euro), up by 37.5% compared to 2,709 thousand USD (2,039 thousand euro) in the previous year. Finally, please note that on May 31, 2015 SAES Smart Materials, Inc. repaid the last installment (equal to 1.7 million USD) of the long-term loan obtained in 2008.

Memry Corporation, Bethel, CT (USA), is a technological leader in the new generation medical devices with high engineering value sector, made of Nitinol shape memory alloy.

The company ended the year 2015 with sales equal to 47,345 thousand USD (42,672 thousand euro) with a strong increase (+20.1%) compared to 39,429 thousand USD (29,680 thousand euro) in 2014, thanks to the contribution of both new products and new customers.

In 2015 the net income amounted to 2,654 thousand USD (2,392 thousand euro), also showing a strong increase (+38.9%) compared to a net income of 1,910 thousand USD (1,438 thousand euro) in 2014, thanks to the growth of sales, the associated reduction of the incidence of structural fixed costs and the shift in the sales mix towards products with a lower absorption of raw material, which allowed the improvement in the gross margin compared to the previous year.

Finally, please note that, on February 20, 2015, the State of Connecticut paid to Memry Corporation the first tranche, equal to 2 million USD, of the soft financing finalized to purchase new machinery and equipment necessary to expand the production plant in Bethel (for further details please refer to the section "Relevant events occurred in 2015" and to the Note no. 28).

Performance of the joint venture companies in 2015

ACTUATOR SOLUTIONS GmbH, Gunzenhausen (Germany)

Actuator Solutions GmbH, established in the second half of 2011, is headquartered in Gunzenhausen (Germany) and it is 50% jointly controlled by SAES and Alfmeier Präzision, a German group operating in the fields of electronics and advanced plastic materials.

The joint venture is focused on the development, production and distribution of actuators based on the SMA technology and its mission is to become a world leader in the field of actuators using shape memory alloys.

Actuator Solutions GmbH, which consolidates its wholly owned subsidiary Actuator Solutions Taiwan Co., Ltd. (established on June 14, 2013), recorded net revenues equal to 17,275 thousand euro in 2015; these revenues, totally generated by the sales of valves used in lumbar control systems of the seats of a wide range of cars, increased by 13.0% compared to 15,291 thousand euro in 2014: the lumbar control system based on the SMA technology is recording a strong growth in volumes, notwithstanding falling unit prices.

Despite the increase in the revenues of the seat comfort business, the net result of the period was negative and equal to -3,687 thousand euro (-2,572 thousand euro in the previous year), due to the research, development and prototyping expenses in the various industrial sectors in which the company will be present with its SMA actuators, as well as to structure fixed costs. In particular, Actuator Solutions GmbH, with the support of the laboratories in Lainate, is focused on the development of SMA actuators for the vending industry, the automotive sector, the white goods sector and the medical one, some of which have already generated the first orders; instead, the Taiwanese subsidiary is focused on the development of devices for the mobile communication market, such as, in particular, actuators for the autofocus (AF systems) and the image stabilization (OIS systems) in mobile phones. The first AF device was introduced into the market in November 2015 and the tests made both for the device itself, as well as for the actuator mounted in a camera and in a mobile phone, have given positive results. We are confident that the first commercial order may be placed in the first months of 2016.

(thousands of euro)
Actuator Solutions	2015	2014
	100%	100%
Total net sales	17,275	15,291
Cost of sales	(17,728)	(15,205)
Gross profit	(453)	86
% on sales	-2.6%	0.6%
Total operating expenses	(4,237)	(3,589)
Other income (expenses), net	125	575
Operating income (loss)	(4,565)	(2,928)
% on sales	-26.4%	-19.1%
Interest and other financial income, net	(327)	(129)
Foreign exchange gains (losses), net	64	9
Income taxes	1,141	476
Net income (loss)	(3,687)	(2,572)

The share of the SAES Group in the result of the joint venture in 2015 amounted to -1,843 thousand euro (- 1,286 thousand euro in the previous year).

The following table shows the Total Group's statement of profit or loss, achieved by incorporating the 50% joint venture Actuator Solutions with the proportional method instead of the equity method:

			2015
(thousands of euro)	Consolidated statement of profit or loss	50% Actuator Solutions	Intercompany eliminations	Other adjustments	Investment elimination	Total Group's statement of profit or loss
Total net sales	166,012	8,638	(636)	73		174,087
Cost of sales	(94,025)	(8,864)	636	(73)		(102,326)
Gross profit	71,987	(226)	0	0	0	71,761
% on sales	43.4%					41.2%
Total operating expenses	(51,552)	(2,119)				(53,671)
Royalties	902	0				902
Other income (expenses), net	(838)	63				(775)
Operating income (loss)	20,499	(2,282)	0	0	0	18,217
% on sales	12.3%					10.5%
Interest and other financial income, net	(1,528)	(164)				(1,692)
Income (loss) from equity method evalueted companies	(1,843)	0			1,843	0
Foreign exchange gains (losses), net	694	32				726
Income (loss) before taxes	17,822	(2,414)	0	0	1,843	17,251
Income taxes	(9,002)	571				(8,431)
Net income (loss) from continued operations	8,820	(1,843)	0	0	1,843	8,820
Income (loss) from assets held for sale and
discontinued operations	0	0				0
Net income (loss) before minority interest	8,820	(1,843)	0	0	1,843	8,820
Net income (loss) pertaining to minority interest	0					0
Net income (loss) pertaining to the Group	8,820	(1,843)	0	0	1,843	8,820

SAES RIAL VACUUM S.r.l., Parma, PR (Italy)

On December 23, 2015 the SAES Group signed an agreement with the company Rodofil s.n.c., based in the province of Parma, with the commitment of the Parent Company to acquire the 49% of the company SAES RIAL Vacuum S.r.l. within the end of January 2016. SAES RIAL Vacuum S.r.l. was established through the transfer by Rodofil of the 'Rial Vacuum' business (assets, trademark and customers list, as well as inventory and employed personnel), specialized in the design and manufacture of vacuum chambers for accelerators, synchrotrons and colliders, used in the major worldwide research laboratories.

In particular, on December 23, 2015 SAES Getters S.p.A. acquired the first tranche equal to 10% of the newco SAES RIAL Vacuum S.r.l., while the finalization of the acquisition of the further 39% was realized on January 19, 2016.

The total price of the 49% of the share capital was equal to approximately 1.6 million euro, of which 0.3 million euro paid in cash during 2015 and 1.3 million euro paid in January 2016 and recorded as current financial liability as at December 31, 2015.

For the detail of the acquired net assets please refer to the Note no. 17.

The aim of the agreement is the creation of an Italian technological and manufacturing hub of the highest level for the design and production of integrated vacuum components and systems for accelerators, for the research, as well as for industrial systems and devices. SAES RIAL Vacuum S.r.l. will combine at the highest level the competences of SAES in the field of materials, vacuum applications and innovation, with the experience of Rial and Rodofil in the design, assembling and fine mechanical productions, with the aim of offering absolutely excellent quality products and successfully competing in the international markets.

The new company SAES RIAL Vacuum S.r.l. will be managed by a Board of Directors consisting of three members, of which two appointed by the Shareholder Rodofil s.n.c. and one appointed by SAES. Alessandro Zanichelli, current shareholder and chief executive officer of Rodofil, will cover the role of the new company's CEO.

The shareholders' agreement governing the relationship between the shareholders provide that the resolutions of the Board of Directors are adopted with the favorable vote of the majority of its members, except for some "confidential matters" for which the favorable vote of the minority shareholder SAES is required. Based on this agreement that governs the relationship between the shareholders, SAES RIAL Vacuum S.r.l. has been qualified as a joint venture and, therefore, is consolidated using the equity method.

In addition, the shareholders' agreement includes a put and call option between the shareholders, according to a predefined schedule, which, if exercised by SAES, would enable the Group to increase its stake in SAES RIAL Vacuum S.r.l. from 49% to 79% in 2020; for the option's details, please see the Note no. 17.

Please note that, being the acquisition just finalized as at December 31, 2015, the Management did not have enough assessment elements and therefore this option was not valued.

Please note that as at December 31, 2015 the company SAES RIAL Vacuum S.r.l. was not yet operative.

Certification pursuant to article 2.6.2, sub-paragraph 12, of the Regulations of Markets organized and managed by Borsa Italiana S.p.A.

In relation to article 36 of the Consob Market Regulations no. 16191 dated 10/29/2007, regarding the conditions for the listing of shares of companies with control over companies established or regulated under the law of non-EU countries and significant for the purposes of the consolidated financial statements, please note that (i) the Group's companies listed below fall within this regulatory provision, (ii) appropriate procedures have been adopted to ensure the full compliance with the above-mentioned regulations and (iii) the conditions laid down in the said article 36 exist.

The following companies are considered important as, with reference to December 31, 2015, they exceed the individual significance parameters provided for in article 151 of the Issuer Regulation:

• SAES Getters USA, Inc. Colorado Springs, CO (USA);
• SAES Pure Gas, Inc. San Luis Obispo, CA (USA);
• Spectra-Mat, Inc. Watsonville, CA (USA);
• SAES Smart Materials, Inc. New Hartford, NY (USA);

• Memry Corporation Bethel, CT (USA);

• SAES Getters Export, Corp. – Wilmington, DE (USA);

• SAES Getters (Nanjing) Co., Ltd. – Nanjing & Shanghai (P.R. of China).

Research, Development and Innovation activities

In 2015 research and development expenses amounted to 14,620 thousand euro (8.8% of consolidated net revenues) and were substantially aligned, in absolute term, to those of 2014 amounting to 14,375 thousand euro (10.9% of consolidated net sales).

In 2015 the R&D laboratories were strongly committed in the scouting of new applications for the platform of Functional Polymer Composites (FPC); in particular, the activity was focused on the freezing definition of the specifications of the first product of the SAES Group for food packaging applications. With this regard, some preliminary collaborations have been started, that should lead to the development of new active packaging solutions with the aim of controlling the internal atmosphere of the package to extend the shelf life of the food inside it. A special working group was created, by combining the resources of the laboratories with those of other departments, to run a positioning study in the production chain of the active packaging. This study has highlighted two alternative business models for the SAES Group: the first one is to provide precursor materials, that means lacquers for the deposition of active films on the plastic materials (film coating) or compounds to be mixed with the plastic materials during their processing (extrusion or other processes); the second one is to produce functionalized plastic materials.

The second business model, in line with the Group's new strategy to go downstream in the value chain, might be possible through a partnership with an already consolidated manufacturer. In this direction, a collaboration with an Italian company leader in the sector has been started, the results of which are expected in the first half of 2016.

Always in the field of Functional Polymer Composites it is worth noting the launch of a test of a solution for the control of the evolution of carbon dioxide (CO2) in lithium batteries at the world's leading manufacturer of Li-Ion batteries for auto-traction, whose first results should be available within the first months of 2016. A positive result in such tests would pose SAES in a privileged position to design with the customer the optimal solution to the problems of security and stability of this type of batteries, with extremely interesting business prospects for the Group.

In the field of organic chemistry, the development activities of OLET displays continued, in collaboration with the National Research Center (CNR) and a US company leader in the development of organic precursors. In particular, the first OLET monochrome demonstrator panel was realized.

Intense were also the activities of the Vacuum Systems development laboratory that, in the wake of the great success arisen by the presentation to the market of the new High Vacuum pump at the end of 2014, continued the development of the first two models already on sale in the market. Also thanks to the support of this laboratory, it was possible to finalize a supply contract for an important particle accelerator of over 100 different models of NEXTorr pumps.

The activities of the Getters & Dispensers development laboratory have focused in particular on the development of solutions both of gettering and dispensing within the LEDs of new generation.

The central laboratory has continued, with success, the activities of basic research in the field of Shape Memory Alloys (SMA) regarding new formulations of alloys and the improvement of existing production processes, to support applications in both the medical and the industrial segments. During 2015, thanks to the excellent work done by this laboratory, it was possible to introduce a new range of clean melt materials in the market that, thanks to a major review of the transformation process and a strict control of the production process parameters, ensures doubled shelf lives compared to standard materials. The new SMA wires had a major commercial success and have been qualified by a major customer operating in the mobile phone business. The research activities also focused on the development of new formulations that will allow raising the transformation temperature of the alloys up to about 200°C. A material able to operate at temperatures significantly higher than the current ones (the current limit is around 100°C) would open the way to new applications in the automotive field. The first results of this very important project should be visible in the first half of 2016 and the introduction of this new material would place SAES in a technological and commercial strength position of absolute importance.

The joint venture Actuator Solutions has continued its activities related to the development, prototyping and production of SMA actuators for different applications, and the activities for the development of autofocus (AF) systems for mobile phones have been particularly intense. The first AF model was introduced in the market in November 2015 and has been successfully tested by a manufacturer of mobile phone cameras. These tests have verified the functionality and reliability of the device, both in its own right, and when assembled in a working camera; then the tests continued in the phone and also in this case have given positive results. The tests will be repeated in early 2016, and in case of success, the first commercial negotiations will start. In parallel an infrared filter has been developed, a mini lens driven by a SMA engine, able to transform a normal camera in an infrared camera. This type of photo cameras enables the recognition of the iris through the phone, a function necessary to perform banking transactions safely. Finally, the development of devices for automotive and white good applications has continued.

Please note that all basic research expenses incurred by the Group are charged directly into the income statement in the year in which they occurred as they do not qualify for capitalization.

Group's main risks and uncertainties

In accordance with the requirements of Legislative Decree no. 32/2007, the following is a brief account of the primary risks and uncertainties to which the Group is exposed and the primary mitigating actions implemented in order to deal with said risks and uncertainties.

Risks associated with the market context

Sensitivity to the market context

Some of the SAES Group's businesses are more sensitive to the performance of some macroeconomic indicators (GDP trend, consumer confidence level, availability of liquidity, etc.) than others. In particular, some businesses, such as the lighting one and the applications for the defence market, were affected, also in 2015, by the evolution of some political choices regarding public investments. The effect on the Group's performance was a decline in the demand of getters for fluorescent lamps, while the sales of getters for military applications showed a slight increase compared to the previous year.

Also the Pure Gas Handling Business is particularly exposed to the cyclical nature of some of the markets in which the "Gas Purification" technology is used, first of all the semiconductors industry.

The SAES Group has reacted by seeking to diversify and evolve into markets less dependent on the economic cycle, in particular the medical industry, and at the same time by rebalancing and rationalizing its fixed costs structure, however maintaining those functions (engineering, applied research, etc.) necessary to ensure a rapid reaction of the production structures when the suffering areas show some signs of recovery.

With particular reference to the recalled example of the semiconductors industry, in recent years the Group has seen a decrease in the weight of that industry in the end markets, making the fluctuation of revenues less obvious than in the past, thanks to the widening of the product range and to the characteristics of excellence of the proposed solutions.

Another external factor that cannot be influenced by the Group is the evolution of the legislation in the countries in which the Group sells its products or in those countries that represent the end markets for SAES' customers: the rules and the resulting operating practices are of particular importance in the industrial lamps business, where the market is often influenced by environmental requirements, or with respect to the applications for the medical business: let's think, for example, at the indirect impact on the customers that buy these applications originated by the laws on welfare, or to the frequent need for qualification by some institutional bodies of those products of the customers in which the technologies of the Group, or the products themselves as components, are applied. Please consider also the eventuality in which the qualifications mentioned above are actually achieved, but later than expected, with the effect of delaying the payback of the Group's investments made to support the development and industrialization of new products.

The Group seeks to mitigate the risks associated with changes in the regulations by monitoring the legislative trends where possible with the aim of anticipating the effects of any news and keeping the focus on the product development activities, in order to be able to innovate the product range when needed; as mentioned above, the attention is also on responding rapidly and adapting the production structure through the engineering functions.

Competition

The Group is active in the upstream segment of the value chain and the production process of the industrial sectors in which it operates (B2B, i.e. Business-to-Business), often as tier 2 or 3, and thus it does not sell to end consumers.

This decreases the SAES Group's capacity to anticipate and steer the evolution of the end demand for its products, which depends more on the success and ability of its customers.

Aggressive competitors have emerged in recent years and these competitors target those customers and industries that are most price-sensitive and most mature, with the consequent risks of decreased margins.

The SAES Group has adopted various response strategies to deal with this risk. In particular, where possible and in accordance with the current regulations, long-term supply agreements are signed, through the development of new solutions and services, new products of higher quality have been offered and there has been a focus on the repositioning of the product range along several phases of the value chain.

In addition, as mentioned above, the Group aims at diversifying its target markets in order to reduce its dependency on markets characterized by a rising level of competition.

In parallel, the Group has continued with market researches aimed at anticipating the evolution of the demand, also through alliances and agreements with leading specialized centers of study.

Finally, also with the development of the activity of the joint ventures Actuator Solutions and SAES RIAL Vacuum S.r.l., the Group intends to pursue the goal of changing its position in the value chain, moving from the production of simple components to the production of more complex devices, real systems that can be sold directly to their end users, with the possibility, thanks to the greater closeness to the customers, to better face the competition.

Technological obsolescence of the products

A typical risk of companies that operate in the consumer electronic industry is the accelerated technological obsolescence of applications and technologies in the market. It may also happen, as mentioned above, that the replacement of one technology or particular peculiarity by another is also driven by changes in the law in target countries. In particular, during the year, the market of fluorescent lamps, in which the getter solutions of the Group are used, has been under stress, penalized by the technological competition of the LED lamps.

This risk is mitigated through constant market analyses and the screening of emerging technologies both to identify new development opportunities and to seek to avoid being caught unprepared by the phenomenon of technological obsolescence.

In addition, as mentioned above, the Group seeks to reduce its dependence on a single industry/application by diversifying the markets in which it operates.

Operational risks

Uncertainty concerning the success of research and development projects

The SAES Group, both on its own initiative or in cooperation with its customers and partners, works with the aim of developing innovative products and solutions, which are often on the cutting edge and intended to generate returns in the long term.

The risk of failure does not depend solely on our ability to provide the requested products in terms of form, schedule and cost. SAES has the control neither over its customers' ability to succeed in implementing the content of their business plans nor over the timing for the new technologies to take root in the market.

Examples include, but are not limited to, the emergence of competitive technologies that do not require the use of the Group's products and know-how, or the development timeframe may be so long as to make it no longer profitable to continue the project, or in any case the time-to-market is delayed, with a negative effect on the return of the investment.

This risk is mitigated through periodic and structured revisions of the project portfolio managed by the Innovation Committee.

Wherever and whenever possible, the Group seeks access to public funding, obviously only if they are intended to achieve goals that are perfectly consistent with the development project in question. The Group makes increasingly frequent use of "open" forms of cooperation with external centers of excellence in order to reduce the development timeframe.

A further cause of failure of the research and development projects can be found in the difficulty to transfer their results in the industrialization stage and this may limit the ability to switch to the mass production.

To mitigate this risk, the Group's organization has promoted the contiguity of the R&D and engineering functions, in order to encourage a greater interaction in managing the projects and to limit the timing dilution in switching to mass production.

Protection of intellectual property

The SAES Group has always sought to develop an original knowledge and, where possible, to protect this knowledge using patents. Please note that the Group is facing an increasing difficulty in defending its patents, also due to the uncertainties relating to the legal systems of some countries in which the Group operates. The risks in question are the loss of market shares and margins due to fake products, in addition to incurring enormous expenses for lawsuits.

The Group reacts to these risks by seeking to increase the quality and completeness of its patents, as well as by reducing the number of its published patents and closely monitoring the commercial initiatives of other industrial and commercial operators, in order to promptly identify potential prejudices to the value of these patents.

Risks related to the production capacity

The rationalization of the Group's manufacturing and marketing structures, implemented during the last years, has lead to an increasing polarization, between Italy, and in particular the Avezzano facility, being the sole manufacturing center for traditional getter metal alloys, and the USA, with some sub-specialized facilities, as the base of production addressed to the pure gas handling materials, the Nitinol raw material and the medical SMA devices (stents). Instead, the training process of the SMA wires for their use in industrial applications is carried out exclusively in the factory of the Parent Company in Lainate.

The primary risks are associated with the greater distance from some customers, with possible consequences in the service level, in addition to the increase in transportation and insurance costs.

The Group has reacted by seeking to maintain the service level high and a direct customer relationship, also through an improved inventory management, with the aim of enhancing efficiency in delivering orders.

Moreover, following the mentioned exposure of the Group to the external context, the risk of a shortage in the production capacity may occur for specific markets/product lines, in case of particularly positive unforeseen changes in demand, to which the Group's factories may not be able to respond with the necessary promptness.

In order to limit the potential effects of such risk, the Group has tried to increase the integration between its sales departments and the operations one, in order to anticipate as much as possible the evolution of demand; in addition, the main factories have sought to maximize the flexibility of its structures, with particular regards to indirect activity centers.

Risks related to dealings with suppliers

This risk refers to the possibility that limited sources of energy and other key resources and/or difficulty in accessing such resources could jeopardize the ability to manufacture quality products at competitive prices and in a timely manner.

We believe that the Group's exposure to this risk is limited. The risk associated with the procurement of the major raw materials used by the Group is low, even in periods of growing demand.

Nevertheless, the Group always seeks to diversify its sources and, when possible, to enter into agreements with prices fixed over the medium/long-term, in order to mitigate the volatility of purchase prices.

Risks related to customers concentration

This risk refers to the possibility that revenues are concentrated in a small number of customers in some businesses, with the result that the Group's results are too much dependent on the financial performance of these customers or on their strategic decisions: for example, please consider the possibility that one or more customers decide to integrate vertically, inside their factories, the production of semi-finished goods or components that they currently buy from the Group.

The Group seeks to mitigate the potential consequences of this risk as much as possible by widening the customer base, both through new prospects and diversifying the range of products offered to individual customers. In addition, the Group aims at strengthening the partnership with its major customers, also sharing, where appropriate, the specific technical skills, within the constraints arising from the defense of intellectual property and trying to obtain and renew medium and long-term contracts that ensure less volatility in invoiced volumes and unit prices.

Risks related to the location of production

This risk refers to the fact that the Parent Company from 2009 to 2013¹⁰ has recognized deferred tax assets on its tax losses.

The maintenance of such deferred tax assets is motivated by the expected growth in the production activities of the Italian plants of the Group, together with any implementing decisions to rationalize the organizational structure, consistent with the assumptions of the business plan. However, it is possible that future strategic decisions or some business opportunities, or even the evolution of the markets in which the Group operates, may lead to a geographical distribution of the production, and consequently a composition of the financial results, different from the one expected, or that there may be some delays compared to what was planned, with the result that the recoverability of the tax losses carried forward may fail by the Parent Company.

The Group periodically checks the tenability of the assumptions underlying the recognition of deferred tax assets on unused tax losses: more specifically, the estimates related to the achievement of a positive taxable income in the future years and the related assumptions are an integral part of the planning process and are subject to the specific approval by the Board of Directors.

Financial risks

The SAES Group is also exposed to some risks having a financial nature, and in particular:

¹⁰ Please note that in 2014 and 2015 it has been prudently decided to suspend the recognition of deferred tax assets on the tax losses realized by the Parent Company.

• Interest-rate risk, associated with the volatility of interest rates, which may influence the cost of the use of debt financing or the return on temporary investments of cash;
• Exchange-rate risk, associated with the volatility of exchange rates, which may influence the related value of the Group's costs and revenues according to the currency of denomination of accounting transactions and may thus have an impact on the Group's net result; the value of the exchange rates also affects the amount of financial receivables/payables denominated in currencies other than the euro, with a potential effect both on the net income and on the net financial position as well;
• Risk of changes in prices of raw materials, which may affect the Group's product margins if these changes are not charged to the price agreed upon with customers;
• Credit risk, associated with the solvency of customers and the ability to collect receivables;
• Liquidity risk, associated with the Group's ability to raise funds to finance its operating activities, or with the capacity of the sources of funding if the Group were to adopt strategic decisions involving some extraordinary expenditure (such as merger & acquisition transactions or organizational rationalization and restructuring activities).

With reference to financial risks, the Board of Directors periodically re-examines and sets the related riskmanagement policies, as described in detail in the Note no. 39, to which the reader may also refer for the associated sensitivity analysis.

Subsequent events

On January 4, 2016 a new contract for forward sale of euros was entered into, in order to limit the currency risk resulting from the effect of the oscillation of the Korean won on the balance of the financial credit in euro that SAES Getters Korea Corporation held towards the Parent Company.

Such contract has a notional value of 550 thousand euro, will expire on December 27, 2016 and provides for a forward exchange rate equal to 1,304.00 against the euro.

On January 12, 2016 SAES Getters S.p.A. granted a 49 thousand euro loan to the joint venture SAES RIAL Vacuum S.r.l., in order to financially support the newly established Company's operations. Such loan, which did not involve any predefined expiration date, but, according to the contract, allows for a flexible reimbursement upon formal request of SAES Getters S.p.A., will earn an interest indexed to the three months Euribor rate, plus a spread of 2.50%, to be paid by the joint venture on an annual basis.

On January 15, 2016 SAES Nitinol S.r.l. made a further capital injection in favor of the joint venture Actuator Solutions GmbH equal to 1 million euro to support its investments. The same amount was paid by the 50% joint partner Alfmeier, through the company SMA Holding GmbH.

In order to protect the results and the profitability from the fluctuation of the exchange rates, on January 18, 2016 and soon thereafter on February 29, 2016, some contracts for the forward sale of Japanese yen were entered into, for a total notional value of 340 million JPY; such contracts provide for an average forward exchange rate equal to 126.5850 against the euro and will be in force for the entire 2016. Similar contracts, for a notional value of 12,500 thousand USD, were entered into on February 18, 2016, with an average forward exchange rate equal to 1.1198 against the euro. Also these contracts will be in force for the entire 2016.

On January 19, 2016, as envisaged by the contract signed on December 23, 2015 between SAES Getters S.p.A. and Rodofil s.n.c., the Parent Company acquired a further 39% of the joint venture SAES RIAL Vacuum S.r.l., for a pre-determined price equal to 1.3 million euro. The total investment of SAES Getters S.p.A. in the joint venture is currently equal to 49% of its share capital.

On February 26, 2016 SAES Getters S.p.A. acquired the remaining 4% of the share capital of E.T.C. S.r.l. from the minority shareholder, for a consideration of 249 thousand euro.

Following such acquisition, SAES Getters S.p.A. is now the sole shareholder of E.T.C. S.r.l.

On March 3, 2016 the Extraordinary Shareholders' Meeting of SAES Getters S.p.A. approved the amendment to article 11 of the By-Laws, with the introduction of the increase of the voting right and the assignment of two votes for each ordinary share of the Company held for a period of at least 24 months on a continuous basis, according to law no. 116, dated August 11, 2014, and to article 127-quinquies of the TUF.

This increase is not extended to the holders of savings shares, as they do not have any voting right, or the right to attend the shareholders' meetings.

The introduction of the increase of the voting right will help to support the Company's growth by encouraging the medium-long term investment in the share capital of the Company and thus the stability of the shareholding structure, which has always been a strength and it is in line with the mid-long term interests of the Group.

On March 14, 2016 SAES Getters S.p.A. approved a capital contribution of 130 thousand euro in favor of E.T.C. S.r.l., equal to the difference between the loss made by the Company in 2015 (-1,580 thousand euro¹¹) and that estimated for the same period at the beginning of the year and already covered by the Parent Company on March 11, 2015 (-1,450 thousand euro).

Simultaneously, the Parent Company approved a further capital contribution in favor of E.T.C. S.r.l., equal to 1,420 thousand euro, to cover the expected losses of 2016.

On March 14, 2016 SAES Getters S.p.A. approved a capital contribution equal to 30 thousand euro in favor of SAES Nitinol S.r.l. to cover the loss made by the Company in 2015 and to reconstitute its integrally eroded share capital.

Simultaneously, the Parent Company approved a further capital contribution in favor of SAES Nitinol S.r.l., equal to 140 thousand, to cover the Company's possible future losses.

Business outlook

In the first two months of 2016, consolidated net revenues were equal to 27,832 thousand euro, up by 23.8% compared to 22,474 thousand euro in the corresponding period of the previous year. The exchange rate effect was positive and equal to +4.5%, net of which the organic growth was equal to +19.3%.

Business	Feb-16	Feb-15	Difference	Difference %	Organic change %	Exchange rate effect %
Electronic & Photonic Devices	2,242	1,997	245	12.3%	8.3%	4.0%
Sensors & Detectors	2,500	1,544	956	61.9%	58.7%	3.2%
Light Sources	1,291	1,619	(328)	-20.3%	-21.8%	1.5%
Vacuum Systems	1,356	1,203	153	12.7%	10.0%	2.7%
Thermal Insulation	911	1,122	(211)	-18.8%	-21.8%	3.0%
Pure Gas Handling	7,951	5,621	2,330	41.5%	35.3%	6.2%
Industrial Applications	16,251	13,106	3,145	24.0%	19.7%	4.3%
SMA Medical Applications	9,813	8,175	1,638	20.0%	14.9%	5.1%
SMA Industrial Applications	1,581	933	648	69.5%	67.6%	1.9%
Shape Memory Alloys	11,394	9,108	2,286	25.1%	20.4%	4.7%
Business Development	187	260	(73)	-28.1%	-30.6%	2.5%
Total net sales	27,832	22,474	5,358	23.8%	19.3%	4.5%

(thousands of euro)

The Shape Memory Alloys Business Unit ended the first two months of 2016 with revenues equal to 11,394 thousand euro (9,108 thousand euro in the first two months of 2015), showing a significant organic growth both in the medical segment (+14.9%) and in the industrial one (+67.6%).

¹¹ Resulting from the financial statements prepared according to the National Accounting Principles.

Consolidated revenues of the Industrial Applications Business Unit were equal to 16,251 thousand euro, compared to 13,106 thousand euro in the corresponding period of 2015. The increase (+24.0%), also due to the exchange rate effect (+4.3%), was concentrated in the gas purification business and favored by the recovery in the security and defense sectors (Sensors & Detectors Business).

Total revenues of the Group were equal to 29,202 thousand euro in the first two months of 2016, up by 23.1% compared to 23,723 thousand euro in the corresponding period of 2015. The revenues of the joint venture Actuator Solutions increased by 8.2%, while the consolidated revenues increased by 23.8%, as previously mentioned.

We expect a very solid first semester, that allows us to be optimistic for the full year 2016.

***

Please note that, following the completion of the transfer activity of the PageWafer® technology under the last contract signed at the end of fiscal year 2014, the technology licensing can be considered as a 'core business' of the Group; therefore, starting from January 1, 2016, the royalties accrued for the licensing of the thin film getter technology for MEMS of new generation were classified within the consolidated sales. The figures related to 2015¹² were reclassified accordingly, for a homogeneous comparison.

Going concern

The financial statements have been prepared on an ongoing concern basis because, despite a difficult economic and financial environment, we believe that there aren't any significant uncertainties (as defined in paragraph no. 25 of IAS 1 - Presentation of Financial Statements) surrounding the business continuity. This context, as previously highlighted in the paragraphs related to the risks to which the Group is subject, can be only partially influenced by the Management of the Company, being it mainly the result of external variables. Based on the best estimates available to date, the Company has approved a three-years business plan that includes the strategies envisaged by the Company's Management in order to succeed in achieving the defined business goals in this difficult economic environment. These strategies, that include also an increase in the production activities undertaken in Italy, will allow the full recovery of the corporate assets and, in particular, of the deferred tax assets recognized in the balance sheet.

Related party transactions

With regard to the Group's related party transactions, please note that they fall within the ordinary operations and are settled at market or standard conditions.

Complete disclosure on related party transactions incurred during the year is provided in the Note no. 41 of the consolidated financial statements.

Consob regulatory simplification process

Please note that, on November 13, 2012, the Board of Directors approved, pursuant to article no. 3 of Consob resolution no. 18079/2012, to adhere to the opt-out provisions as envisaged by article no. 70, paragraph 8, and no. 71, paragraph 1-bis, of the Consob Regulation related to Issuer Companies, and it therefore avails itself of the right of making exceptions to the obligations to publish information documents required in connection with significant mergers, spin-offs and capital increases by contributions in kind, acquisitions and disposals.

¹² In the first two months of 2015 the royalties amounted to 44 thousand euro and must be compared to 286 thousand euro as at February 29, 2016 (of which 180 thousand euro deriving from lump-sums related to the technology transfer).

Consolidated Financial Statements for the year ended December 31, 2015

(thousands of euro) Notes 2015 2014 Total net sales 3 166,012 131,701 Cost of sales 4 (94,025) (75,030) Gross profit 71,987 Research & development expenses 5 (14,620) (14,375) Selling expenses 5 (13,214) (11,862) General & administrative expenses 5 (23,718) (19,082) Total operating expenses (51,552) (45,319) Royalties 6 902 1,843 Other income (expenses), net 7 (838) (183) Operating income (loss) 20,499	Consolidated statement of profit or loss
			56,671
			13,012
Interest and other financial income 8 293			486
Interest and other financial expenses 8 (1,821)			(2,106)
Share of result of investments accounted for using the equity method 9 (1,843)			(1,286)
Foreign exchange gains (losses), net 10 694			147
Income (loss) before taxes 17,822			10,253
Income taxes 11 (9,002)			(6,829)
Net income (loss) from continued operations 8,820			3,424
Net income (loss) from assets held for sale and discontinued operations 12 0			1,412
Net income (loss) for the period 8,820			4,836
Minority interests in consolidated subsidiaries 0			0
Group net income (loss) for the period 8,820			4,836
Net income (loss) per ordinary share 13 0.3944			0.2137
Net income (loss) per savings share 13 0.4111			0.2305

Consolidated statement of other comprehensive income
(thousands of euro)	Notes	2015	2014
Net income (loss) for the period		8,820	4,836
Exchange differences on translation of foreign operations	27	10,458	11,150
Exchange differences on equity method evaluated companies	27	(51)	(42)
Total exchange differences		10,407	11,108
Total components that will be reclassified to the profit (loss) in the future		10,407	11,108
Actuarial gain (loss) on defined benefit plans	27	(21)	(183)
Income taxes	27	(22)	50
Actuarial gain (loss) on defined benefit plans, net of taxes		(43)	(133)
Total components that will not be reclassified to the profit (loss) in the future		(43)	(133)
Reversal of currency conversion reserve after the reduction of the share capital of the subsidiaries	27	(1,907)	0
Total components that have been reclassified to the profit (loss)		(1,907)	0
Other comprehensive income (loss), net of taxes		8,457	10,975
Total comprehensive income (loss), net of taxes		17,277	15,811
attributable to:
- Equity holders of the Parent Company		17,277	15,811
- Minority interests		0	0

	Consolidated statement of financial position
(thousands of euro)	Notes	December 31, 2015	December 31, 2014
ASSETS
Non current assets
Property, plant and equipment, net	15	50,383	50,684
Intangible assets, net	16	52,322	48,705
Investments accounted for using the equity method	17	3,990	1,370
Deferred tax assets	18	14,064	15,725
Tax consolidation receivables from Controlling Company	19	272	571
Financial receivables from related parties	20	600	0
Other long term assets	21	456	917
Total non current assets		122,087	117,972
Current assets
Inventory	22	32,534	29,719
Trade receivables	23	23,366	20,010
Prepaid expenses, accrued income and other	24	10,593	9,697
Derivative financial instruments evaluated at fair value	35	0	38
Cash and cash equivalents	25	24,044	25,602
Financial receivables from related parties	20	555	2,762
Other financial receivables from third parties	26	0	151
Total current assets		91,092	87,979
Total assets		213,179	205,951
EQUITY AND LIABILITIES
Capital stock Share issue premium		12,220 41,120	12,220 41,120
Legal reserve		2,444	2,444
Other reserves and retained earnings		42,826	41,510
Other components of equity		19,055	10,555
Net income (loss) of the period		8,820	4,836
Group shareholders' equity	27	126,485	112,685
Other reserves and retained eanings of third parties		3	3
Minority interests in consolidated subsidiaries		3	3
Total equity		126,488	112,688
Non current liabilities
Financial debts	28	27,019	14,689
Other non current financial debts towards third parties	29	1,355	1,328
Deferred tax liabilities	18	6,526	6,190
Staff leaving indemnities and other employee benefits	30	7,856	7,425
Provisions	31	814	871
Total non current liabilities		43,570	30,503
Current liabilities
Trade payables	32	13,675	11,047
Other payables	33	9,203	7,703
Accrued income taxes	34	1,060	387
Provisions	31	3,530	1,861
Derivative financial instruments evaluated at fair value	35	22	0
Current portion of medium/long term financial debts	28	7,136	6,690
Other current financial debts towards third parties	29	1,935	2,068
Bank overdraft	36	5,012	30,722
Accrued liabilities	37	1,548	2,282
Total current liabilities		43,121	62,760
Total equity and liabilities		213,179	205,951

Consolidated cash flow statement
(thousands of euro)	2015	2014
Cash flows from operating activities
Net income (loss) from continued operations	8,820	3,424
Net income (loss) from discontinued operations	0	1,412
Current income taxes	7,244	5,383
Changes in deferred income taxes	1,758	1,446
Depreciation	7,147	7,163
Write-down (revaluation) of property, plant and equipment	123	0
Amortization	1,364	1,393
Write-down (revaluation) of intangible assets	188	0
Net loss (gain) on disposal of fixed assets	(95)	(1,372)
Interest and other financial (income) expenses, net	3,371	2,907
Other non-monetary costs (revenues)	(1,869)	(38)
Accrual for termination indeminities and similar obligations	1,037	656
Changes in provisions	1,390	456
	30,478	22,830
Working capital adjustments
Cash increase (decrease)
Account receivables and other receivables	(3,156)	(7,245)
Inventory	(46)	1,758
Account payables	2,628	1,788
Other current payables	357	102
	(217)	(3,597)
Payment of termination indemnities and similar obligations	(74)	(411)
Interests and other financial payments	(414)	(477)
Interests and other financial receipts	139	148
Taxes paid	(7,061)	(4,535)
Net cash flows from operating activities	22,851	13,958
Cash flows from investing activities
Disbursements for acquisition of tangible assets	(5,017)	(4,310)
Proceeds from sale of tangible and intangible assets	156	3,570
Disbursements for acquisition of intangible assets	(42)	(57)
Cash paid for acquisition of third parties businesses	(1,884)	(1,813)
Consideration for the acquisition of investments in joint ventures	(330)	0
Capital injection into joint ventures Net cash flows from investing activities	(2,900) (10,017)	0 (2,610)
Cash flows from financing activities
Proceeds from long term financial liabilities, current portion included	19,282	6,965
Dividends payment	(3,477)	(3,430)
Repayment of financial liabilities	(33,303)	(9,246)
Interests and other costs paid on financial liabilities	(1,185)	(1,324)
Financial receivables repaid (granted) from related parties	1,700	(2,700)
Interests receipts on financial receivables from related parties	62	0
Other financial payables	0	(245)
Other financial receivables	159	(151)
Payment of finance lease laibilities	(18)	(15)
Net cash flows from financing activities	(16,780)	(10,146)
Net foreign exchange differences	2,916	3,536
Net (decrease) increase in cash and cash equivalents	(1,030)	4,738
Cash and cash equivalents at the beginning of the period	25,071	20,333
Cash and cash equivalents at the end of the period	24,041	25,071

	Consolidated statement of changes in equity as at December 31, 2015
(thousands of euro)	Capital stock	Share issue premium	Treasury shares	Legal reserve	Currency conversion reserve	Other components of equity Currency conversion reserve from discontinued operations	Other reserves and retained earnings	Net income (loss)	Group shareholders' equity	Minority interests	Total equity
December 31, 2014	12,220	41,120	0	2,444	10,555	0	41,510	4,836	112,685	3	112,688
Distribution of 2014 result							4,836	(4,836)	0		0
Dividends paid							(3,477)		(3,477)		(3,477)
Net income (loss)								8,820	8,820	0	8,820
Reversal of currency conversion reserve after the reduction of the share capital of the subsidiaries					(1,907)				(1,907)		(1,907)
Other comprehensive income (loss)					10,407		(43)		10,364		10,364
Total comprehensive income (loss)					8,500		(43)	8,820	17,277	0	17,277
December 31, 2015	12,220	41,120	0	2,444	19,055	0	42,826	8,820	126,485	3	126,488

Consolidated statement of changes in equity as at December 31, 2014
(thousands of euro)	Capital stock	Share issue premium	Treasury shares	Legal reserve	of equity Currency conversion reserve	Other components Currency conversion reserve from discontinued operations	Other reserves and retained earnings	Net income (loss)	Group shareholders' equity	Minority interests	Total equity
December 31, 2013	12,220	41,120	0	2,444	(553)	0	45,635	(562)	100,304	3	100,307
Distribution of 2013 result							(562)	562	0		0
Dividends paid							(3,430)		(3,430)		(3,430)
Net income (loss)								4,836	4,836	0	4,836
Other comprehensive income (loss)					11,108		(133)		10,975		10,975
Total comprehensive income (loss)					11,108		(133)	4,836	15,811	0	15,811
December 31, 2014	12,220	41,120	0	2,444	10,555	0	41,510	4,836	112,685	3	112,688

1. BASES OF PREPARATION AND ACCOUNTING POLICIES

Bases of preparation

SAES Getters S.p.A., the Parent Company, and its subsidiaries (hereinafter "SAES Group") operate both in Italy and abroad in the development, manufacturing and marketing of getters and other components for applications where stringent vacuum conditions or ultra-pure gases are required (electronic devices, industrial lamps, vacuum systems and thermal insulation solutions), as well as in the gas purification industry. The Group also operates in the field of advanced materials, particularly in the business of shape memory alloys for both medical and industrial applications.

The preparation of the financial statements is in compliance with the historical cost criterion, except when specifically required by the applicable standards, as well as on the going concern assumption; in spite of a difficult economic and financial environment, it is not considered to exist significant uncertainties (as defined in paragraph no. 25 of IAS 1 - Presentation of Financial Statements) on the business continuity.

The Parent Company SAES Getters S.p.A., based in Lainate (Italy), is controlled by S.G.G. Holding S.p.A.¹³, which does not exercise management and coordination activity. The Board of Directors approved and authorized the publication of the 2015 consolidated financial statements in a resolution passed on March 14, 2016.

The consolidated financial statements of the SAES Group are presented in euro (rounded to the nearest thousand), which is the Group's functional currency.

Foreign subsidiaries are included in the consolidated financial statements according to the standards described in the Note no. 2 "Main accounting principles".

The consolidated financial statements for the year ended December 31, 2015 have been prepared in accordance with the IFRSs issued by the International Accounting Standards Board ("IASB") and approved by the European Union ("IFRS"), Consob resolutions no. 15519 and no. 15520 of July 27, 2006, Consob communication no. DEM/6064293 of July 28, 2006 and article 149-duodecies of the Issuers Regulation. The abbreviation "IFRS" includes also all revised international accounting standards ("IAS") and all interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"), included those previously issued by the Standing Interpretations Committee ("SIC").

In the interest of comparability, the comparative figures for 2014 have also been presented in application of the requirements of IAS 1 - Presentation of Financial Statements.

Accounting schemes

The presentation adopted is compliant with the provisions of IAS 1-revised, that provides the consolidated statement of profit (loss) and of other comprehensive income (the Group elected to present two different statements) and a statement of consolidated financial position that includes only the details of operations on the Group's shareholders' equity, while changes in the minority interests are presented in a separate line.

Moreover we report that:

• the consolidated statement of financial position has been prepared by classifying assets and liabilities as "current" or "non-current" and by stating "Assets held for sale" and "Liabilities held for sale" in two separate items, as required by IFRS 5;

¹³ Based in Milan at Via Vittor Pisani, 27.

• the consolidated statement of profit or loss has been prepared by classifying operating expenses by allocation, inasmuch this form of disclosure is considered more suitable to represent the Group's specific business, it is compliant with internal reporting procedures and in line with standard industry practice;

• the consolidated cash flow statement has been prepared by stating cash flows provided by operating activities according to the "indirect method" as permitted by IAS 7.

In addition, as required by Consob resolution no. 15519 of July 27, 2006, in the consolidated statement of profit or loss by allocation, income and expenses arising from non-recurring transactions or from events that do not recur frequently during the normal conduct of operations are specifically identified and their effects are stated separately at the main interim result levels.

Non-recurring events and transactions are identified primarily on the basis of the nature of the transactions. In particular, non-recurring income/expenses include cases that by their nature do not occur consistently in the course of normal operating activities. In further detail:

• income/expenses arising from the sale of real property;

• income/expenses arising from the sale of business divisions and equity investments included among non-current assets;

• income/expenses arising from reorganization processes associated with extraordinary corporate actions (mergers, de-mergers, acquisitions and other corporate actions);

• income/expenses arising from discontinued businesses.

During the year 2015 the Group did not carry out any unusual or non-recurring transaction having a significant impact on the economic situation and the financial position.

On the basis of the aforementioned Consob resolution, the amounts of positions or transactions with related parties have been highlighted separately from the related items in the explanatory notes.

Segment information

The Group's financial reporting is broken down into the following business segments:

• Industrial Applications;
• Shape Memory Alloys.

Seasonality of operations

Based on historical trends, the revenues of the different businesses are not characterized by significant seasonal circumstances.

Scope of consolidation

The following table shows the companies included in the scope of consolidation according to the full consolidation method as at December 31, 2015.

Company	Currency	Capital		% of Ownership
		Stock	Direct	Indirect
Directly-controlled subsidiaries:
SAES Advanced Technologies S.p.A.
Avezzano, AQ (Italy)	EUR	2,600,000	100.00	-
SAES Getters USA, Inc.
Colorado Springs, CO (USA)	USD	9,250,000	100.00	-
SAES Getters (Nanjing) Co., Ltd.
Nanjing & Shanghai (P.R. of China)	USD	6,570,000***	100.00	-
SAES Getters International Luxembourg S.A.
Luxembourg (Luxembourg)	EUR	34,791,813	89.97	10.03*
SAES Getters Export, Corp.
Wilmington, DE (USA)	USD	2,500	100.00	-
Memry GmbH

Weil am Rhein (Germany)	EUR	330,000	100.00	-
E.T.C. S.r.l.
Bologna, BO (Italy)	EUR	75,000	96.00**	-
SAES Nitinol S.r.l.
Lainate, MI (Italy)	EUR	10,000	100.00	-
Indirectly-controlled subsidiaries:
Through SAES Getters USA, Inc.:
SAES Pure Gas, Inc.
San Luis Obispo, CA (USA)	USD	7,612,661	-	100.00
Spectra-Mat, Inc.
Watsonville, CA (USA)	USD	204,308	-	100.00
Through SAES Getters International Luxembourg S.A.:
SAES Getters Korea Corporation
Seoul (South Korea)	KRW	524,895,000****	37.48	62.52
SAES Smart Materials, Inc.
New Hartford, NY (USA)	USD	17,500,000	-	100.00
Memry Corporation
Bethel, CT (USA)	USD	30,000,000	-	100.00

* % of indirect ownership held by SAES Advanced Technologies S.p.A. (0.03%) and by SAES Getters (Nanjing) Co., Ltd. (10.00%). ** 4% held by third parties. However, the company is fully consolidated at 100% without attribution of minority interests since SAES Getters S.p.A. has committed to cover any loss, also on behalf of the minority shareholder if the latter is unwilling or unable to proceed to cover them, maintaining unchanged its percentage of ownership.

*** In May 2015, after having obtained the proper authorization from the local Chinese authorities, the capital stock of the Chinese subsidiary SAES Getters (Nanjing) Co., Ltd. was reduced from 13,570 thousand USD to 6,570 thousand USD.

**** In November 2015 the share capital of the Korean subsidiary SAES Getters Korea Corporation was reduced from 10,497,900 thousand KRW to 524,895 thousand KRW, by reducing the nominal share value from 10,000 KRW to 500 KRW (for a total number of 1,049,790 shares).

The following table shows the companies included in the scope of consolidation according to the equity method as at December 31, 2015.

Company	Currency	Capital Stock	Direct	% of Ownership Indirect
Actuator Solutions GmbH Gunzenhausen (Germany) Actuator Solutions Taiwan Co., Ltd. Taoyuan (Taiwan) SAES RIAL Vacuum S.r.l.	EUR TWD	2,000,000 5,850,000	- -	50.00 50.00*
Parma, PR (Italy)	EUR	200,000	49.00***	-

* % of indirect ownership held by SAES Nitinol S.r.l.

** % of indirect ownership held by the joint venture Actuator Solutions GmbH (which holds a 100% interest in Actuator Solutions Taiwan Co., Ltd.).

*** This percentage, which has been used for consolidation purposes, is the substantial interpretation of the acquisition agreement signed on December 23, 2015. Please refer to the Note no. 17 for further details.

The changes occurred in the consolidation area compared to December 31, 2014 are listed below:

• in November 2015 the office of SAES Getters (Nanjing) Co., Ltd. in Shanghai was converted into a branch of the same company;

• on December 23, 2015 SAES Getters S.p.A. signed an agreement with the company Rodofil s.n.c. for the acquisition, within the end of January 2016, of 49% of the company SAES RIAL Vacuum S.r.l., established through the transfer by Rodofil of the 'Rial Vacuum' business (assets, trademark and customers list, as well as inventory and employed personnel), specialized in the design and manufacture of vacuum chambers for accelerators, synchrotrons and colliders, used in the major research laboratories worldwide. In particular, on December 23, 2015 SAES acquired 10% of the newco SAES RIAL Vacuum S.r.l., being committed to increase its shares in SAES RIAL Vacuum S.r.l. up to 49% by acquiring a further 39% within the end of January 2016.

Finally, the signed contract includes some shareholders' agreements that govern the relationship between the parties enabling to qualify SAES RIAL Vacuum S.r.l. as a joint venture (please refer to the Note no. 17). They also include a put and call option among the shareholders, according to an agreed schedule (for further details, please refer to the paragraph "Relevant events occurred in 2015" in the Consolidated report on operation).

2. MAIN ACCOUNTING PRINCIPLES

Consolidation principles

The consolidated financial statements include the financial statements of SAES Getters S.p.A. and the financial statements of all the subsidiaries, effective from the date on which their control is assumed and until such control ceases to exist.

Control exists when the Group is exposed or has rights to variable returns from its involvement with the investee and, at the same time, has the ability to affect those returns through its power over the investee.

Specifically, the Group controls a subsidiary if it simultaneously has the following:

• the decision power, that means the ability to manage the relevant activities of the subsidiary, in particular those activities that have a significant influence on the results of the subsidiary itself;

• the right to the (positive or negative) variable results deriving from the investment in the entity;

• the possibility to use its own decision power to determine the "relevant activities" in the subsidiary.

When the Group holds less than the majority of the voting rights (or similar rights) it has to consider all the relevant facts and circumstances to determine whether it controls the entity object of investment, including:

• contractual agreements with other holders of voting rights;

• rights deriving from contractual agreements;

• voting rights and potential voting rights of the Group.

In preparing the consolidated financial statements, the assets, liabilities as well as costs and revenues of the consolidated companies are added up line by line in their total amount, attributing to minority-interest shareholders their portion of net equity and net income or loss for the period in specific items in the statement of financial position and in the statement of profit or loss.

The carrying value of the equity investment in each of the subsidiaries is eliminated towards the corresponding share of net equity, including any adjustment to the fair value on the date of acquisition; any resulting positive difference is recognized among intangible assets as goodwill, as illustrated below, whereas any negative difference is charged into the statement of profit or loss.

In preparing the consolidated financial statements, all balance sheet, income statement and cash flow balances among the Group companies have been eliminated, as well as unrealized gains and losses on infra-group transactions.

Associates are defined as those companies in which the Group is able to exercise a significant influence. A significant influence is the power to participate in determining the financial and operating policies of the associate without holding its control or joint control.

A joint venture is instead a joint agreement on an entity whereby the parties that have the joint control have rights to the net assets of that entity. Joint control is the sharing, established by an agreement, of the control of an economic activity, that exists only when the unanimous consent of all parties sharing control is required for decisions on those activities.

Joint ventures are different from joint operations that are instead agreements that give the parties of the agreement, which have joint control of the entity, rights over the individual assets and obligations for the liabilities relating to the agreement.

Investments in associates and joint ventures are accounted for using the equity method. In the case of joint operations, assets and liabilities, costs and revenues related to the agreement are recognized based on the relevant accounting standards.

The consolidated financial statements are presented in euro, which is the functional currency of the Group.

Each company of Group defines the functional currency for its financial statements. Transactions in foreign currencies are initially recorded at the exchange rate (related to the functional currency) at the date of the transaction.

All of the assets and liabilities of foreign companies in currencies other than the euro that fall within the scope of consolidation are converted by using the exchange rates in force as of the balance sheet data (current exchange rate method), whereas the associated revenues and costs are converted at the average exchange rates for the year. Translation differences resulting from the application of this method are classified as a shareholders' equity item until the equity investment is sold. In preparing the consolidated cash flow statement, the cash flows of consolidated foreign companies expressed in currencies other than the euro are converted by using the average exchange rates for the year.

Non-current items measured at historical cost in a foreign currency (including goodwill and adjustments to the fair value generated during the purchase price allocation of a foreign company) are converted at the exchange rates at the date of their initial recording. At a later stage, these figures are converted at the exchange rate at year end.

The following table shows the exchange rates used for the conversion of the foreign financial statements.

	December 31, 2015		December 31, 2014
Currency	Average	Final	Average	Final
	rate	rate	rate	rate
US dollar	1.1095	1.0887	1.3285	1.2141
Japanese yen	134.3100	131.0700	140.3060	145.2300
South Korean won	1,256.5000	1,280.8000	1,398.1400	1,324.8000
Renminbi (P.R. of China)	6.9733	7.0608	8.1857	7.5358
Taiwan dollar	35.2501	35.7908	40.2499	38.4133

expressed in foreign currency (per 1 euro)

During the first-time adoption of IFRSs, the cumulative translation differences generated by the consolidation of foreign companies operating outside of the euro area were reduced to zero, as permitted by IFRS 1 (First-time adoption of International Financial Reporting Standards). Consequently, only translation differences accumulated and recognized after January 1, 2004 are considered in determining any capital gains or losses arising from the sale thereof.

Business combinations and Goodwill

Business combinations are recognized according to the purchase method. According to this method, the identifiable assets (including previously unrecognized intangible assets), liabilities and contingent liabilities (excluding future restructuring) acquired are recognized at their current values (fair values) at the date of acquisition. The positive difference between the purchase cost and the Group's interest in the fair value of such assets and liabilities is classified as goodwill and recognized among intangible assets. Any negative difference (badwill) is charged to the statement of profit or loss upon acquisition.

Any consideration subject to specific conditions in the business combination contract is measured at fair value at the acquisition date and included in the value of the consideration transferred in the business combination for the purposes of calculating the goodwill. Any subsequent changes in the fair value, which can be classified as adjustments arising during the measurement period, are included in the goodwill retrospectively. The changes in the fair value classified as adjustments in the measurement period are those resulting from additional information about facts and circumstances that existed at the acquisition date, obtained during the measurement period (which cannot exceed the period of one year from the business combination).

If the purchase cost and/or the value of the assets and liabilities acquired may only be determined on a provisional basis, the Group recognizes the business combination using the provisional values, that will be definitively determined within 12 months from the date of the acquisition. Any use of this accounting method, if used, will be mentioned in the explanatory notes.

The costs related to the acquisition are recognized in the statement of profit or loss when they are incurred.

Goodwill is not amortized, but rather tested for impairment on an annual basis, or more frequently if specific events or particular circumstances indicate that impairment may have occurred, according to IAS 36 – Impairment of assets. After its initial recognition, goodwill is measured at cost, less any impairment recognized. Goodwill, once impaired, may not be recovered.

For the purposes of congruity analysis, the goodwill acquired in a business combination is allocated, at the date of acquisition, to the Group's individual cash-generating units (CGUs) or to groups of cash-generating units that should benefit from the synergies of the combination, regardless of whether other Group's assets and liabilities have been allocated to such units or groups of units. Each CGU or group of CGUs to which goodwill is allocated, represents the lowest Group's level at which goodwill is monitored for internal management purposes.

When goodwill represents a part of a CGU and a part of the assets internal to the unit is sold, the goodwill associated with the assets sold is included in the carrying value of the assets in order to determine the gain or loss on the sale. The goodwill transferred in such circumstances is measured on the basis of the figures for the transferred assets and the portion of the unit retained.

When all or part of a previously acquired company, the acquisition of which had generated goodwill, is disposed of, the residual share of goodwill is considered when calculating the effects of the sale. The difference between the price of sale and net assets, plus any accumulated translation differences and goodwill is recognized into the statement of profit or loss. Retained earnings or losses entered directly in the shareholders' equity are transferred to the statement of profit or loss at the time of the sale.

Where options do not grant effective access to the results associated with the ownership of minority interests, the shares or units referring to these options are recognized at the date of the acquisition of the control as "minority interests"; the share of the net income and losses (and other changes in equity) of the entity acquired are attributed to the minority interests after the business combination is completed. The minority-interest share is eliminated as of each balance sheet date and classified as a financial liability at its fair value (equal to the current value of the strike price of the option), as if the acquisition had occurred on that date. The Group has opted to recognize the difference between the financial liability at fair value and the minority-interest share eliminated as of the balance sheet date as goodwill (Parent entity extension method).

Intangible assets

Development expenses

Internally incurred costs for the development of new products and services constitute, depending on the circumstances, internally produced intangible or tangible assets and are recognized as assets solely if the costs can be reliably measured and the technical feasibility of the product, the expected volumes and prices indicate that the costs incurred in the development phase will generate future economic benefits.

Capitalized development costs consist solely of effectively incurred expenses that may be directly allocated to the development process.

Capitalized development costs are systematically amortized starting from the year of production throughout the estimated useful life of the product/service.

Other intangible assets with finite useful life

Other purchased or internally produced intangible assets with finite useful lives are recognized as assets, in accordance with the provisions of IAS 38 – Intangible assets, when it is likely that the use of the assets will generate future economic benefits and that the determination of their cost is reliable.

Such assets are recognized at the cost of purchasing or producing them and are amortized on a straight-line basis over their estimated useful lives. Intangible assets with finite useful life are also assessed for impairment annually, or whenever there is an indication that the assets may have become impaired.

Amortization is calculated on a straight-line basis over the estimated useful lives of the assets; amortization rates are revised annually and are amended if the current estimated useful life differs from the previous estimate. The effects of such changes are recognized prospectively in the statement of profit or loss.

Intangible assets are amortized according to their estimated useful lives, where finite, as follows:

Industrial and other patent rights	3/15 years/duration of the contract
Concessions, licenses, trademarks and similar rights	3/25 years/duration of the contract
Other	5/15 years/duration of the contract

Property, plant and equipment

Owned property, plant and equipment are recognized at the cost of purchase or production, or, where such assets were carried as of January 1, 2004, at deemed cost, which, for some assets, is represented by revalued cost. Costs incurred subsequent to the purchase are capitalized only if they increase the future economic benefits deriving from the asset to which they refer. All other costs are charged into the statement of profit or loss when they are incurred. The cost of the assets also includes the projected costs of dismantling the asset and restoring the site, where there is a legal or implicit obligation to do so. The corresponding liability is recognized at its net present value during the period in which the obligation arises as a provision among the liabilities within the provisions for risks and contingencies. The capitalized expense is recognized into the statement of profit or loss over the useful life of the associated property, plant and equipment through the depreciation process.

Depreciation is calculated at constant rates over the estimated useful life of the assets.

Land, including that annexed to buildings, is not depreciated.

Depreciation rates are revised annually and are amended if the current estimated useful life differs from the previous estimate. The effects of such changes are recognized prospectively into the statement of profit or loss. The minimum and maximum depreciation rates are listed below:

Buildings	2.5% - 20%
Plant and machinery	6% - 33%
Industrial and commercial equipment	3% - 25%
Other assets	3% - 25%

Leasing contracts that substantially transfer to the Group all the risks and benefits of the leased item are considered as financial leases.

The leased assets are capitalized at the beginning of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments and they are depreciated over the estimated useful life of the asset.

The liability due to the lessor is classified as a financial liability in the statement of financial position. Lease payments are apportioned between principal and interest in order to obtain the application of a constant interest rate on the remaining balance of the liability. Interests are recognized in the financial costs of the statement of profit or loss.

Leasing contracts in which the lessor does not transfer all the risks and benefits related to the ownership are considered as operating leases. The operating lease payments are charged into the statement of profit or loss on a straight-line basis over the term of the contract.

Impairment

At the end of each reporting period, the Group assesses whether there is any indication that the intangible assets and property, plant and equipment might have suffered an impairment.

Goodwill and intangible assets with an indefinite useful life are subjected to an impairment test at least once a year, or more frequently whenever there is an indication that the asset may have suffered an impairment.

Goodwill

Goodwill is assessed for impairment at the balance sheet date or during the fiscal year if there are indicators of criticality. The goodwill acquired and allocated during the year is assessed for impairment before the end of the year in which it was acquired and allocated.

For the purposes of impairment testing, goodwill is allocated, as of the date of acquisition, to each cash-generating unit or group of cash generating units that benefit from the acquisition, regardless of whether other Group's assets and liabilities have been allocated to such units.

If the carrying value of the cash-generating unit (or group of units) exceeds its recoverable value, the difference is recognized into the statement of profit or loss as an impairment loss.

The impairment loss is charged into the statement of profit or loss, initially by decreasing the carrying value of the goodwill allocated to the unit (or group of units), and only then is charged to the unit's other assets in proportion to their carrying value, up to a maximum of the recoverable value of assets with finite useful lives. The recoverable value of a cash-generating unit or group of cash-generating units to which the goodwill is allocated is the greater of the fair value, less selling costs, and the value in use of the unit itself.

The value in use of an asset consists of the current value of expected cash flows, calculated by applying a discount rate that reflects current market valuations of the value of money over time and the specific risks of the asset. Future explicit cash flows normally cover a period of three years and they are projected along a defined period between 5 and 12 years, except for projections that require longer periods, such as in the case of initiatives in the start-up phase. The long-term growth rate used to estimate the terminal value of the unit (or group of units) cannot exceed the average long-term growth rate for the industry, country or market in which the unit (or group of units) operates.

The value in use of cash-generating units in foreign currencies is estimated in the local currency discounting such cash flows at a rate appropriate to the currency itself. The current value obtained through this process is translated into euro at the spot exchange rate as of the date of the impairment test (which, in our case, is the balance sheet date).

Future cash flows are estimated by referring to the cash-generating unit's current conditions and consequently do not contemplate either the benefits of future restructuring operations to which the entity is not yet committed or future investments to improve or optimize the unit.

For impairment testing purposes, the carrying value of a cash-generating unit is determined in accordance with the criteria according to which the cash-generating unit's recoverable value is determined, excluding surplus assets (i.e. financial assets, deferred tax assets, and net non-current assets held for sale).

After having conducted an impairment test on the cash-generating unit (or group of units) to which the goodwill is allocated, a second level impairment test is conducted that includes also centralized assets with auxiliary functions (corporate assets) that do not generate positive cash flows and cannot be allocated to the individual units according to a reasonable and consistent criterion. At this second level, the recoverable value of all units (or groups of units) is compared with the carrying value of all units (or groups of units), including those units to which no goodwill has been allocated and corporate assets.

Where the conditions that had previously required the recognition of impairment cease to apply, the original value of the goodwill is not restored, according to IAS 36 - Impairment of assets.

Tangible and intangible assets with finite useful life

During the year, the Group verifies whether there are indications that tangible and intangible assets with finite useful lives may have become impaired. Both internal and external sources of information are considered in this process. These internal sources include: the obsolescence or physical deterioration of the asset, any significant changes in the use of the asset and the economic performance of the asset with respect to projections. The external sources include: the trend in the market prices of assets, any discontinuities of technology, market, or legislation, the trend in market interest rates and the cost of capital used to assess investments, and, lastly, whether the carrying value of the Group's net assets exceeds its market capitalization.

If there are indications that tangible or intangible assets with finite useful lives have become impaired, the carrying value of the assets is reduced to their recoverable value. The recoverable value of an asset is defined as the greater of its fair value, net of selling costs, and its value in use. The value in use of an asset consists of the current value of expected cash flows, calculated by applying a discount rate that reflects current market valuations of the value of money over time and the specific risks of the asset. When it is not possible to determine the recoverable amount of an individual asset, the Group estimates the recoverable value of the asset's cash-generating unit. Impairment is charged into the statement of profit or loss.

If the reasons that led to impairment subsequently cease to apply, the carrying value of the asset or cash-generating unit is increased up to the new estimate of the recoverable value, which, however, may not exceed the value that would have resulted if no impairment had been recognized. Reversals are recognized into the statement of profit or loss.

Investments in associates and joint ventures

Investments in associates and joint ventures are evaluated using the equity method. According to this method, the investment is initially recognized at cost and then it is adjusted to recognize the Group's share of its net equity changes. The share of net result deriving from the application of this consolidation method is recognized into the statement of profit or loss, under the item "Share of result of investments accounted for using the equity method".

Losses of associates in excess of the Group's share are not recognized, unless the Group has assumed any obligation to cover them.

The positive difference between the purchase price and the Group's interest in the fair value of the assets, liabilities and contingent liabilities of the associate at the date of acquisition represents the goodwill and it is included in the carrying value of the investment.

Any negative difference between the purchase price and the Group's interest in the fair value of assets, liabilities and contingent liabilities of the associate is charged into the statement of profit or loss once the acquisition method process is completed (within and no later than twelve months from the date of the acquisition).

When there has been a change recognized directly in the equity of the associate or of the joint venture and in its statement of comprehensive income, the Group recognizes, if applicable, its share of any changes and discloses this in the statement of changes in equity and in the consolidated statement of comprehensive income.

The consolidated net income is adjusted to delete the positive and negative economic effects arising from intercompany transactions with the associate or the joint venture and not yet realized with third parties at year end.

Annually the Group verifies whether there are indications of impairment, by comparing the value of the investment according to the equity method and its recoverable value. Any impairment loss is allocated to the investment and charged into the statement of profit or loss.

Following the loss of a significant influence over an associate or of the joint control of a joint venture, the Group measures and recognizes the residual interest at fair value. The difference between the carrying value of the investment at the date of the loss of the significant influence or of the joint control and the fair value of the residual interest and of the compensations received is recognized into the income statement

Receivables

Receivables generated by the company are initially recognized at their nominal value and subsequently measured at their estimated realizable value.

Receivables with maturities over one year, which do not bear interest or bear interest at belowmarket rate, are discounted using market rates.

Cash and cash equivalents

Cash and cash equivalents are recognized, according to their nature, at their nominal value. Cash equivalents consist of highly liquid short-term investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of change in value.

Financial liabilities

Financial liabilities include financial payables and other financial liabilities, including derivative instruments. Under IAS 39, they also include trade and other nature payables.

Non-derivative financial liabilities are initially recognized at fair value, less transaction costs, and are subsequently measured at amortized cost, i.e. the amount initially recognized less any repayments of principal, plus or minus the cumulative amortization, calculated using the effective interest method, of any difference between the initial value and the value at maturity.

Financial liabilities hedged by derivative instruments aimed at covering the risk of changes in the value of the liability (fair value hedge derivatives) are measured at their fair value according to the hedge accounting methods set out in IAS 39: gains and losses arising from subsequent adjustments to fair value, limited to the hedged component, are recognized into the statement of profit or loss and offset by the portion of the loss or gain arising from subsequent measurements of the hedging instrument at fair value.

Derivative financial instruments

The derivatives transactions undertaken by the SAES Group are aimed at hedging its exposure to exchange-rate and interest-rate risks and diversifying debt parameters in order to reduce the cost and volatility of debt within pre-determined management limits.

According to the requirements of IAS 39, hedging instruments are accounted according to the hedge accounting methods only when:

a) at inception, they are formally designated as a hedge and the hedge relationship is documented;

b) the hedge is expected to be highly effective;

c) the effectiveness of the hedge can be reliably measured;

d) the hedge is highly effective in each designated accounting period.

All derivative instruments are measured at their fair value according to IAS 39.

Where derivatives satisfy the requirements for their treatment under hedge accounting rules, the following accounting standards are applied:

• Fair value hedges - If a derivative financial instrument is designated as a hedge of the exposure to the changes in the fair value of an asset or liability attributable to a particular risk, the gain or loss resulting from subsequent changes in the fair value of the hedging instrument is recognized into the statement of profit or loss. The portion of the gain or loss arising from the fair value adjustment of the hedged item attributable to the hedged risk is recognized as an adjustment to the carrying value of the item itself and entered in the statement of profit or loss.

• Cash flow hedges - If a derivative financial instrument is designated as a hedge of the exposure to the changes in the cash flows of an asset or liability carried on the balance sheet or of a highly probable planned transaction, the effective portion of the gains or losses arising from the fair value adjustment of the derivative instrument is recognized in a specific shareholders' equity reserve (cash flow hedge reserve). The cumulative gain or loss is reversed from the shareholders' equity reserve and recognized in the statement of profit or loss during the same years in which the effects of the hedged transaction are recognized in the statement of profit or loss.

The gain or loss associated with the ineffective portion of the hedge is immediately recognized in the statement of profit or loss. If the hedged transaction is no longer deemed highly probable, the unrealized gains or losses recognized in the shareholders' equity reserve are immediately entered in the statement of profit or loss.

Gains and losses arising from the fair-value measurement of derivatives not designated as hedges are directly recognized in the statement of profit or loss.

Inventory

Inventory, which consists of raw materials, purchased products, semi-finished, work in progress and finished products, is measured at the lesser of the cost of purchase and production and the estimated realizable value. Costs are determined according to the FIFO method. The measurement of inventory also includes direct material and labor costs and indirect production costs (both variable and fixed).

In addition, provisions for impairment are allocated for materials, finished products, spare parts and other articles deemed obsolete or with a slow rotation, on the basis of their expected future use and estimated realizable value.

Assets held for sale/Discontinued operations

Ceased assets, Assets held for sale and Discontinued operations refer to lines of business and assets (or groups of assets) that have been sold or are in the process of being sold, the carrying value of which have been, or will be, recovered primarily through their sale rather than their continuing use.

These conditions are met when the sale or discontinuity of the group of assets held for sale are highly probable and the assets and liabilities are immediately available for sale at their current state.

Assets held for sale are measured at the lesser of their net carrying value and fair value, net of selling costs.

Where such assets have originated in recent business combinations, they are measured at their current value, net of disposal costs.

In accordance with IFRSs, the figures for discontinued operations and/or assets held for sale are presented as follows:

• in two specific items of the balance sheet: Assets held for sale and Liabilities held for sale;
• in a specific item of the statement of profit or loss: Net income (loss) from assets held for sale.

Staff leaving indemnity and other employee benefits

Staff leaving indemnity

The staff leaving indemnity, which is compulsory for Italian companies according to article 2120 of the Civil Code, is a deferred benefit and is correlated to the length of each employee's term of employment and the compensation received during the period of service.

In application of IAS 19, the staff leaving indemnity calculated as indicated above is a "Definedbenefit plan" and the associated obligation to be recognized (Staff leaving indemnity debt) is determined through an actuarial calculation by using the Projected Unit Credit Method. As required by the revised version of IAS 19, gains and losses arising from the actuarial calculation are fully recognized in the comprehensive income in the period in which they occur. These actuarial differences are entered immediately on the retained earnings and are not classified in the statement of profit or loss in the following periods.

The costs associated with the increase in the current value of the staff leaving indemnity obligation arising from the proximity of the moment in which benefits are to be paid are included among "Personnel costs".

Effective from January 1, 2007, the 2007 Finance Law and related implementation decrees have introduced significant changes to staff leaving indemnity rules, including the employees' right to choose whether to allocate the not accrued portion of their leaving indemnity to complementary pension funds or the "Treasury Fund" managed by INPS.

It follows that the obligation to INPS, as well as contributions to complementary pension schemes, acquire the status of "Defined-contribution plans" in accordance with IAS 19, whereas the amounts recognized in the Staff leaving indemnity debt continue to be considered "Defined-benefit plans". The amendments to the law enacted in 2007 have consequently entailed the redetermination of actuarial assumptions and the ensuing calculations employed to determine the staff leaving indemnity.

Other long term benefits

Anniversary or other seniority bonuses and long-term incentive plans are discounted back in order to determine the present value of the defined-benefit liability and the cost relating to the current employment services. As required by the revised version of IAS 19, gains and losses arising from the actuarial calculation are fully recognized in the comprehensive income in the period in which they occur. These actuarial differences are entered immediately on the retained earnings and are not classified in the statement of profit or loss in the following periods.

Provisions for contingencies and obligations

Group companies recognize provisions for contingencies and obligations when there is a current (legal or implicit) obligation to a third party as the result of a past event and it is likely that the Group will be required to spend resources in order to fulfill this obligation and the amount of the obligation may be reliably estimated.

Changes in estimates are reflected in the statement of profit or loss for the year in which they occur.

Treasury shares

Treasury shares are deducted from the shareholders' equity.

Transactions in foreign currencies

Transactions in foreign currencies are entered at the exchange rate in force on the transaction date. Monetary assets and liabilities denominated in foreign currencies are converted at the exchange rate in effect at the balance sheet date. Exchange differences resulting from the discharge of monetary items or the conversion of such items at rates differing from those at which they were initially recognized during the year or at those of the end of the previous year are recognized in the statement of profit or loss.

Non-current items measured at historical cost in a foreign currency (including goodwill and fair value adjustments generated in the allocation of the acquisition cost of a foreign company) are converted at the exchange rates at the date of their initial recording. At a later stage, these figures are converted at the exchange rate at year end.

Revenue recognition

Revenues are recognized to the extent that it is probable that the Group will receive the economic benefits and the amount of such benefits may be reliably determined. Revenues are represented net of discounts, allowances and returns.

Revenues from the sale of goods are recognized when the risks and benefits related to the ownership of the goods are transferred to the buyer.

Cost of sales

The cost of sales includes the cost of production or purchase of the products and goods that have been sold. It includes all the costs of materials, the manufacturing ones and the general expenses directly associated with the production, including the depreciation of the assets used for their production and the write-downs of inventory.

Research and development costs and promotion expenses

Research and promotion expenses are charged directly to the statement of profit or loss during the year in which they are incurred. Development expenses are capitalized if the conditions set out in IAS 38 are met, as already described in the paragraph on intangible assets. If the requirements for the mandatory capitalization of development expenses are not met, the expenses are charged to the statement of profit or loss for the year in which they are incurred.

Government grants

Government grants are recognized in the financial statements in accordance with IAS 20, that means when there is a reasonable certainty that the Company will comply with all the required conditions to receive such grants and that the grants will be received. Grants are recognized in the statement of profit or loss over the period in which the costs related to them are recognized.

Income taxes

Income taxes include all taxes calculated on the taxable income of the Group's companies.

Income taxes are recognized into the statement of profit or loss, with the exception of taxes pertaining to items directly charged or entered in a shareholders' equity reserve, in which case the associated tax effect is recognized directly in the respective shareholders' equity reserves.

Accruals for taxes that could be generated by the transfer of the undistributed earnings of subsidiaries are made solely where there is an effective intention to transfer such earnings.

Deferred tax liabilities/assets are recognized according to the balance sheet liability method. They are calculated on all temporary differences that arise between the taxable base of the assets and liabilities and the carrying values of these assets/liabilities in the consolidated financial statements, with the exception of goodwill that is not tax-deductible.

Deferred tax assets on tax-losses carried forwards are recognized to the extent that there is likely to be a future taxable income against which they may be recovered.

Current and deferred tax assets and liabilities are offset where the income taxes are applied by the same tax authority and there is a legal right to offset them.

Deferred tax assets and liabilities are determined by applying the tax rates expected to be applied under the tax codes of the various countries in which Group companies operate during the years in which the temporary differences will be eliminated.

Earnings per share

Basic earnings per ordinary share is calculated by dividing the Group's net income for the year attributable to ordinary shares by the weighted average number of ordinary shares outstanding during the year (excluding treasury shares). In a like manner, basic earning per savings share is calculated by dividing the Group's net income for the year attributable to savings shares by the weighted average number of savings shares outstanding during the year.

Use of estimates and subjective assessments

In order to prepare the consolidated financial statements and the related notes in accordance with IFRSs, the management is required to make estimates and assumptions that have an effect on assets and liabilities as well as on the information about contingent assets and liabilities at the balance sheet date. In the future, should such estimates and assumptions, based on the best currently available assessment, differ from the actual circumstances, they will be amended accordingly when the circumstances change.

Estimates and subjective assessments are employed to determine the recoverable value of noncurrent assets (including goodwill), revenues, accruals to provisions for receivables, obsolete and slow-rotation inventory, depreciation and amortization, employees' benefits, taxes, restructuring provisions and other accruals and provisions. Estimates and assumptions are reviewed periodically and the effects of all changes are immediately reflected in the statement of profit or loss.

In the absence of a standard or interpretation specifically applicable to a transaction, the Group's management decides, through subjective assessments, which accounting methods to adopt in order to provide relevant and reliable information so that the financial statements:

• are a faithful representation of the Group's financial position, net result and cash flows;
• reflect the economic substance of transactions;
• are neutral;
• are drafted on a prudential basis;
• are complete in all significant aspects.

The balance sheet items that require more than others a subjective judgment on the part of the directors in the preparation of the estimates and for which a change in the underlying assumptions could have a significant impact on the financial statements are the following ones: goodwill, impairment of fixed assets, depreciation of assets, deferred tax assets, bad debt provisions, inventory write-downs, risk provisions, pension plans and other post-employment benefits.

With regard to the main assumptions and sources used in making such estimates, please refer to the relevant sections of the notes to the financial statements.

Standards, interpretations and amendments effective from January 1, 2015

Accounting standards used to prepare the consolidated financial statements as at December 31, 2015 are consistent with those applied in the consolidated financial statements as at December 31, 2014, except for the adoption of new standards and interpretations applicable starting from January 1, 2015. The following accounting standards, amendments and interpretations are applicable for the first time from January 1, 2015.

IFRIC 21 - Levies

On May 20, 2013 it was published the interpretation IFRIC 21 - Levies, that provides a clarification about the time to recognize a liability related to taxes (other than income taxes) imposed by a government agency. The standard addresses both the liabilities for taxes that fall within the scope of IAS 37 - Provisions, contingent liabilities and contingent assets and the taxes whose amount and timing are certain.

The interpretation is effective retrospectively for annual periods beginning on or after June 17, 2014.

The adoption of this new interpretation had no impact on the Group's consolidated financial statements.

Annual improvements to IFRSs: 2011-2013 cycle

On December 12, 2013, the IASB published the document "Annual improvements to IFRSs: 2011- 2013 cycle" which incorporates the changes to the standards as part of the annual process to improve them. The main changes include the following ones:

o IFRS 3 - Business combinations - scope exception for joint ventures. The amendment clarifies that are excluded from the scope of application of IFRS 3 the establishment of all types of joint arrangements, as defined by IFRS 11.

o IFRS 13 - Fair value measurement - scope of portfolio exception. The amendment clarifies that the portfolio exception applies to all contracts included within the scope of IAS 39 regardless of whether they meet the definition of financial assets and liabilities provided by IAS 32.

o IAS 40 - Investment properties - interrelationship between IFRS 3 and IAS 40. The amendment clarifies that IFRS 3 and IAS 40 are not mutually exclusive and that, in order to determine whether the purchase of a real property falls within IFRS 3 or IAS 40, it is necessary to refer respectively to the specific indications provided by IFRS 3 o IAS 40.

The amendments are effective for annual periods beginning on or after January 1, 2015.

The adoption of these amendments had no impact on the Group's consolidated financial statements.

Accounting standards, amendments and interpretations of IFRS and IFRIC already validated by the European Union, but not yet applicable if not in advance

The following standards and amendments are approved by the European Union, but not yet mandatorily applicable and not yet adopted by the Group in advance as at December 31, 2015.

Annual improvements to IFRSs: 2010-2012 cycle

On December 12, 2013 the IASB published the document "Annual improvements to IFRSs: 2010- 2012 cycle" which incorporates the changes to some standards as part of the annual process to improve them. The main changes include the following ones:

o IFRS 2 - Share-based payments - definition of vesting conditions. Some changes have been made to the definitions of "vesting condition" and "market condition" and the definitions of "performance condition" and "service condition" have been added (previously included in the definition of "vesting condition").

o IFRS 3 - Business combination - accounting for contingent consideration. The amendment clarifies that a contingent consideration in a business combination classified as a financial asset or liability (differently from what envisaged for that classified as an equity instrument) shall be remeasured at fair value at each balance sheet closing date and the changes in the fair value are recognized in the income statement or among the items of the other comprehensive income based on the requirements of IAS 39 (or IFRS 9).

o IFRS 8 - Operating segments - aggregation of operating segments. The amendments require an entity to provide disclosures about the assessments made by the management in applying the criteria of aggregation of operating segments, including a description of the aggregated operating segments and of the economic indicators that have been taken into account to decide whether such operating segments have similar economic characteristics as such to allow their aggregation.

o IFRS 8 - Operating segments - reconciliation of total of the reportable segments' assets to the entity's assets. The amendments clarify that the reconciliation between the total assets of the operating segments and the total assets as a whole of the entity must be submitted only if the total assets of the operating segments are regularly reviewed by the chief operating decision makers.

o IFRS 13 - Fair value measurement - short-term receivables and payables. The basis for conclusions of this principle have been changed in order to clarify that with the issuance of IFRS 13, and the consequential amendments to IAS 39 and IFRS 9, the option of accounting current trade receivables and payables without detecting the effects of their discounting, where such effects are not significant, remains valid.

o IAS 16 - Property, plant and equipment and IAS 38 - Intangible assets - revaluation method: proportionate restatement of accumulated depreciation/amortization. The changes have eliminated the inconsistencies in the recognition of depreciation when a tangible or intangible asset is revalued. The new requirements clarify that the gross carrying value is appropriate consistently with the revaluation of the carrying value of the asset and that the accumulated depreciation is equal to the difference between the gross carrying value and the carrying value net of any recognized impairment.

o IAS 24 - Related parties disclosures - key management personnel. It is clarified that in case the services of key management personnel are provided by an entity (and not by a person), that entity has to be considered as a related party.

The amendments are effective for annual periods beginning on or after February 1, 2015.

The adoption of these changes is not expected to have a significant effect on the Group's consolidated financial statements.

IAS 19 - Defined benefit plans: employee contributions (amendment)

On November 21, 2013 the IASB issued an amendment to IAS 19 - Defined benefit plans: employee contributions, which aims at presenting the contributions (relating only to the service provided by the employee during the year) made by employees or third parties to defined benefit plans as a reduction of the service cost for the year in which the contribution is paid. The need for this proposal arose with the introduction of the new IAS 19 (2011), according to which such contributions are to be interpreted as part of a post-employment benefit, rather than a short-term benefit and, therefore, that this contribution should be spread over the years of service of the employee.

The changes apply at the latest for periods beginning on or after February 1, 2015.

The adoption of this amendment is not expected to have a significant effect on the Group's consolidated financial statements.

IFRS 11 - Joint arrangements - accounting for acquisitions of interests in joint operations (amendment)

On May 6, 2014 the IASB issued some amendments to IFRS 11 - Joint arrangements - accounting for acquisitions of interests in joint operations related to the accounting of the purchase of interests in a joint operation whose activity constitutes a business in accordance with what envisaged by IFRS 3. The changes require that in these cases the principles set out in IFRS 3 relating to the effects of a business combination shall be applied.

The amendments are applicable starting from January 1, 2016, but an earlier application is allowed. It is not expected to have a significant effect on the consolidated financial statements from the adoption of these amendments.

IAS 16 - Property, plant and equipment and IAS 38 - Intangibles assets - clarification of acceptable methods of depreciation and amortisation (amendments)

On May 12, 2014 the IASB issued some amendments to IAS 16 - Property, plant and equipment and to IAS 38 - Intangibles assets - clarification of acceptable methods of depreciation and amortisation.

The amendments to IAS 16 - Property, plant and equipment establish that the depreciation method based on revenues is not appropriate. The amendment clarifies that the revenues generated by an activity that includes the use of an asset subject to depreciation generally reflect several factors that differ from the solely consumption of the economic benefits of that asset, a condition that is instead required for the depreciation.

The amendments to IAS 38 - Intangibles assets introduce a relative assumption that a depreciation method based on revenues is inappropriate for the same reasons stated by the amendments made to IAS 16 - Property, plant and equipment. In the case of intangible assets, this assumption can be rebutted only in limited and specific circumstances.

The amendments are applicable starting from January 1, 2016, but an earlier application is allowed. It is not expected to have a significant effect on the consolidated financial statements from the adoption of these amendments.

Annual improvements to IFRSs: 2012-2014 cycle

On September 25, 2014 the IASB published the document "Annual improvements to IFRSs: 2012- 2014 cycle". The changes introduced by the document must be applied for periods beginning on or after January 1, 2016.

The document introduces changes to the following standards:

o IFRS 5 - Non-current assets held for sale and discontinued operations. The amendment introduces specific guidance when an entity reclassifies an asset (or disposal group) from held for sale to held for distribution (or vice versa), or when the requirements for the classification of an asset as held-for-distribution cease to exist. The amendments state that: (i) for such reclassifications should be considered valid the same classification and evaluation criteria; (ii) assets that no longer meet the criteria for held for distribution should be treated in the same way as assets that cease to be classified as held for sale.

o IFRS 7 - Financial instruments: disclosure. The amendments provide additional guidance to clarify whether a servicing contract represents a residual involvement in a transferred asset for the purposes of the disclosure required in relation to transferred assets. In addition, it is clarified that the disclosure on the compensation of financial assets and liabilities is not explicitly requested for interim financial statements, except in the case this represents a significant information.

o IAS 19 - Employee benefits. The document introduces some changes to IAS 19 in order to clarify that the high quality corporate bonds used to estimate the discount rate for post-employment benefits should be issued in the same currency as the benefits to be paid. These amendments specify that the breadth of the market for high quality corporate bonds to be considered is the one related to the involved currency.

o IAS 34 - Interim financial reporting. The document introduces some amendments to clarify the requirements to respect when the required information is presented within the interim financial report but outside the interim financial statements. The amendment specifies that such information has to be incorporated by way of a cross-reference from the interim financial statements to the other parts of the interim financial report and that such document must be available to the readers of the financial statements with the same terms and same timing as the interim financial statements. The adoption of these changes is not expected to have a significant impact on the Group's consolidated financial statements.

IAS 1 - Disclosure initiative (amendment)

On December 18, 2014 the IASB issued an amendment to IAS 1 - Disclosure initiative. The objective of the amendments is to provide some clarifications regarding some elements of disclosure that may be perceived as impediments to a clear and understandable preparation of the financial statements. The changes are the following ones:

o Materiality and aggregation: it clarifies that a company should not obscure information by aggregating or disaggregating it and that materiality considerations apply to the primary financial statements, notes and any specific disclosure requirement of IFRSs. The disclosures specifically required by IFRSs need to be provided only if the information is material.

o Statement of financial position and statement of profit or loss and other comprehensive income: it clarifies that the list items specified by IAS 1 for these statements can be disaggregated and aggregated on a case by case basis. It is also included an additional guidance on the presentation of subtotals in these statements.

o Presentation of the elements of Other Comprehensive Income ("OCI"): it clarifies that the share of OCI of associates and joint ventures consolidated with the equity method should be presented in aggregate as a single line item, with the latter divided in components respectively subject or not subject to reclassifications in the income statement.

o Explanatory notes: it clarifies that entities have flexibility when designing the structure of the notes and it provides a guidance on how to determine a systematic order of the notes themselves, for example:

giving priority to those that are most relevant to the understanding of financial position (for example, gathering information on particular activities);

grouping elements measured with the same criteria (for example, assets measured at fair value);

following the order of the items presented in the tables.

The changes introduced by the document must be applied for periods beginning on or after January 1, 2016.

The adoption of this changes is not expected to have a significant impact on the Group's consolidated financial statements.

IAS 27 - Equity method in separate financial statements (amendment)

On August 12, 2014 the IASB issued the amendment to IAS 27 - Equity method in separate financial statements.

The document introduces the option of using, in the separate financial statements of an entity, the equity method for the evaluation of investments in subsidiaries, in jointly controlled entities and in associates. Consequently, following the introduction of the amendment, an entity can record these investments in the separated financial statements either:

• o at cost;
• o as required by IFRS 9 (or by IAS 39);
• o using the equity method.

The changes will apply starting from January 1, 2016 but an earlier application is allowed. The possible impacts of these changes on the separated financial statements of SAES Getters S.p.A. are currently being assessed.

IFRS accounting standards, amendments and interpretations not yet validated by the European Union

At the date of these consolidated financial statements, the competent bodies of the European Union have not yet completed the endorsement process necessary for the adoption of the amendments and the principles described below.

IFRS 14 - Regulatory deferral accounts

On January 30, 2014 the IASB issued IFRS 14 - Regulatory Deferral Accounts that allows continuing to recognize the amounts related to the rate regulation activities in accordance with the previous adopted accounting policies only to those who adopt IFRSs for the first time. Not being the Group a first-time adopter, this standard is not applicable.

IFRS 15 - Revenue from contracts with customers

On May 28, 2014 the IASB issued IFRS 15 - Revenue from contracts with customers that replaces IAS 18 - Revenues and IAS 11 - Construction contracts, as well as the interpretations IFRIC 13 - Customer loyalty programmes, IFRIC 15 - Agreements for the construction of real estate, IFRIC 18 - Transfers of assets from customers and SIC 31 - Revenues - barter transactions involving advertising services. The new model of revenue recognition established by the new standard will apply to all contracts with customers except those that fall within the scope of other IAS/IFRSs such as leases, insurance contracts and financial instruments. The basic steps for the recognition of revenues under the new model are the following ones:

• o the identification of a contract with the customer;
• o the identification of the performance obligations of the contract;
• o the determination of the price;
• o the allocation of the price to the performance obligations of the contract;
• o the criteria of recognition of the revenue when the entity satisfies each performance obligation.

The standard is applicable starting from January 1, 2018, but an earlier application is allowed.

The possible impacts of these changes on the Group's consolidated financial statements are currently being assessed.

IFRS 9 - Financial instruments

On July 24, 2014 the IASB published the final version of IFRS 9 - Financial instruments.

The document includes the results of the phases relating to Classification and measurement, Impairment and Hedge accounting, of the IASB project aimed at replacing IAS 39. The new standard, which replaces the previous versions of IFRS 9, must be applied to financial statements beginning on or after January 1, 2018.

The standard introduces new requirements for the classification and measurement of financial assets and liabilities. In particular, for financial assets, the new standard uses a single approach based on the management of financial instruments and the contractual cash flow characteristics of the financial assets themselves in order to determine the evaluation criterion, replacing the many different rules envisaged by IAS 39. Instead, for financial liabilities, the main change regards the accounting treatment of the changes in the fair value of a financial liability designated as a financial liability evaluated at fair value in the income statement, if these changes are due to changes in the creditworthiness of the issuer of the liability itself. Under the new standard, these changes must be recognized in the other comprehensive income and not in the income statement.

With reference to the impairment model, the new standard requires that the estimate of credit losses is made on the basis of the expected losses model (and not of the incurred losses model used by IAS 39) using concrete information, available without unreasonable effort or expenses, which include historical, current and future data. The standard requires that this impairment model applies to all financial instruments, namely to financial assets measured at amortized cost, to those measured at fair value through other comprehensive income, to receivables deriving from lease contracts and to trade receivables.

Finally, the standard introduces a new hedge accounting model in order to adapt the requirements of the current IAS 39 that sometimes were considered too stringent and unsuitable to reflect the risk management policies of the company. The main novelties of the document include the following ones:

o increase in the types of transactions eligible for hedge accounting, including also the risks of non-financial assets/liabilities eligible to be managed in hedge accounting;

o change in the accounting method for forward contracts and options when included in a hedge accounting relation in order to reduce the volatility of the income statement;

o changes in the effectiveness test by replacing the current model based on the 80-125% parameter with the principle of the "economic relationship" between the hedged item and the hedging instrument; moreover, a retrospective evaluation of the effectiveness of the hedging relationship will be no longer requested.

The greater flexibility of the new accounting rules is offset by additional requests of information on the risk management activities of the company.

The possible impacts of the introduction of IFRS 9 on the Group's consolidated financial statements are currently being assessed.

IFRS 10 and IAS 28 - Sales or contribution of assets between an investor and its associate or joint venture (amendment)

On September 11, 2014 the IASB published an amendment to IFRS 10 and IAS 28 - Sales or contribution of assets between an investor and its associate or joint venture. The document was published in order to solve the current conflict between IAS 28 and IFRS 10.

According to IAS 28, the gain or loss resulting from the sale or transfer of a non-monetary asset to a joint venture or associate in exchange of a share in the share capital of the latter is limited to the stake held in the joint venture or associate by the other investors not involved in the transaction. In contrast, IFRS 10 requires the recording of the entire gain or loss in the event of loss of the control of a subsidiary, even if the entity continues to hold a non-controlling stake in it, including in this case also the sale or transfer of a subsidiary to a joint venture or to an associate. The introduced changes provide that in case of a sale/transfer of an asset or a subsidiary to a joint venture or an associate, the measure of the gain or loss to be recognized in the balance sheet of the assignor/transferor depends on the fact that the sold/transferred assets or subsidiary constitute or not a business, as envisaged by IFRS 3. In the event that the sold/transferred activities or subsidiary represent a business, the entity shall recognize the gain or loss on the entire investment previously held; while, in the opposite case, the portion of gain or loss related to the share still held by the entity should be eliminated.

At the moment, the IASB has suspended the application of this amendment.

The adoption of these changes is not expected to have a significant impact on the Group's consolidated financial statements.

Investment entities: applying the consolidation exception (amendments to IFRS 10, IFRS 12 and IAS 28)

On December 18, 2014 the IASB published the document "Investment entities: applying the consolidation exception (amendments to IFRS 10, IFRS 12 and IAS 28)", containing amendments related to issues raised as a result of the application of the consolidation exception granted to investment entities. The changes introduced by the document must be applied for periods beginning on or after January 1, 2016; however, an earlier application is allowed.

The adoption of these changes is not expected to have a significant impact on the Group's consolidated financial statements, since the company does not meet the definition of investment company.

IFRS 16 - Leases

On January 13, 2016 the IASB issued IFRS 16 – Leases, which is intended to replace IAS 17 - Leases, and the interpretations IFRIC 4 - Determining whether an arrangement contains a lease, SIC 15 - Operating leases incentives and SIC 27 - Evaluating the substance of transactions involving the legal form of a lease.

The new standard provides for a new definition of lease and introduces a criterion based on control (right of use) of an asset to distinguish the lease contracts from the contracts for services, by identifying the following discriminating factors: the identification of the asset, the right to replace it, the right to substantially obtain all the economic benefits arising from the use of the asset and the right to direct the use of the underlying asset of the contract.

The standard establishes a single model of recognition and measurement of the lease agreements for the lessee which provides for the record of the lease asset, including an operating lease, among the assets with a financial debt as counterpart, while providing also the possibility not to recognize as leases those contracts which refer to "low-value assets" and those leases with a duration of the contract equal to or less than 12 months. In contrast, the standard does not include significant changes for the lessors.

The principle applies starting from January 1, 2019 but an early application is allowed, only for those companies that have chosen an early adoption of IFRS 15 - Revenue from contracts with customers.

It is expected that the application of IFRS 16 may have a significant impact on the accounting treatment of leases and the related disclosure reported in the Group's consolidated financial statements. However, it is not possible to provide a reasonable estimate of its effect until the Group has completed a detailed analysis of the related contracts.

3. NET SALES

In 2015 consolidated net sales were equal to 166,012 thousand euro, recorded a strong increase (+26.1%) compared to 131,701 thousand euro achieved in 2014. Excluding the positive exchange rate effect (+17.0%, resulting from the strengthening of US dollar against the euro), the organic growth was equal to +9.1% compared to the previuos year.

The following table shows a breakdown of revenues by Business.

Business	2015	2014	Difference	Difference	Exchange rate effect	Organic change
				%	%	%
Electronic & Photonic Devices	13,455	12,105	1,350	11.2%	13.4%	-2.2%
Sensors & Detectors	10,253	8,814	1,439	16.3%	11.4%	4.9%
Light Sources	9,234	10,989	(1,755)	-16.0%	6.0%	-22.0%
Vacuum Systems	8,593	7,015	1,578	22.5%	6.9%	15.6%
Thermal Insulation	6,382	6,456	(74)	-1.1%	11.0%	-12.1%
Pure Gas Handling	53,192	40,463	12,729	31.5%	21.5%	10.0%
Industrial Applications	101,109	85,842	15,267	17.8%	15.4%	2.4%
SMA Medical Applications	55,956	40,076	15,880	39.6%	21.7%	17.9%
SMA Industrial Applications	7,724	4,384	3,340	76.2%	6.7%	69.5%
Shape Memory Alloys	63,680	44,460	19,220	43.2%	20.2%	23.0%
Business Development	1,223	1,399	(176)	-12.6%	10.3%	-22.9%
Total net sales	166,012	131,701	34,311	26.1%	17.0%	9.1%

Please refer to the Report on operations for further details and comments.

4. COST OF SALES

The cost of sales amounted to 94,025 thousand euro in 2015, compared to 75,030 thousand euro in the previous year.

A breakdown of the cost of sales by category is provided below, compared with the actual figure of the previous year.

(thousands of euro)

Cost of sales	2015	2014	Difference
Raw materials	40,791	27,058	13,733
Direct labour	19,146	14,562	4,584
Manufacturing overhead	36,437	30,170	6,267
Increase (decrease) in work in progress and finished goods	(2,349)	3,240	(5,589)
Total cost of sales	94,025	75,030	18,995

Excluding the exchange rate effect which generated an increase in the cost of sales equal to around 11.8 million euro, the percentage change in the cost of raw materials (+8.2% also including the change in work in progress and finished goods) and of manufacturing overhead (+7.4%) is in line with the organic sales' change (+9.1%).

Instead, the direct labor costs increased more than proportionally compared to revenues (+16.8% excluding the exchange rate effect) as a result of the shift of the sales mix towards more technologically sophisticated products, characterized by a greater absorption of qualified direct labor, as well as of wage increases mainly aimed at the recovery of inflation.

5. OPERATING EXPENSES

Operating expenses were equal to 51,552 thousand euro in 2015, compared to 45,319 thousand euro in the previous year.

A breakdown by function of operating expenses, compared with the previous year, is given below.

(thousands of euro)
---------------------	--

Operating expenses	2015	2014	Difference
Research & development expenses	14,620	14,375	245
Selling expenses	13,214	11,862	1,352
General & administrative expenses	23,718	19,082	4,636
Total operating expenses	51,552	45,319	6,233

Excluding the currency effect, mainly due to the appreciation of the US dollar on the euro that has caused an increase in operating expenses of approximately 3.3 million euro, the latter recorded an organic growth of 6.4%, concentrated in the general and administrative expenses (in particular, higher costs for both fixed and variable compensation to employees and to the Executive Directors, as well as higher consulting fees for special projects). Always excluding the exchange rate effect, the selling expenses were substantially in line with those of last year, while the research and development expenses were slightly down as a consequence of the lower depreciation related to the extension of the remaining useful life of the laboratory equipment of the Parent Company (please refer to the Note no. 15) and of the reduced use of external consultants for the OLET (Organic Light Emitting Transistor) research project.

A breakdown by nature of the total expenses included in the cost of sales and operating expenses, compared with the previous year, is given below.

(thousands of euro)

Total costs by nature	2015	2014	Difference
Raw materials	40,791	27,058	13,733
Personnel cost	62,262	51,599	10,663
Corporate bodies	3,218	1,754	1,464
Travel expenses	1,676	1,559	117
Maintenance and repairs	2,886	2,695	191
Various materials	8,175	6,216	1,959
Transports	1,868	1,497	371
Commissions	1,040	771	269
Licenses and patents	1,366	1,284	82
Consultant fees and legal expenses	4,585	4,723	(138)
Audit fees (*)	470	514	(44)
Rent and operating leases	2,127	1,792	335
Insurances	1,108	1,021	87
Promotion and advertising	427	415	12
Utilities	2,957	2,768	189
Telephones and faxes	412	408	4
General services (canteen, cleaning, vigilance, etc.)	1,314	1,202	112
Training	178	115	63
Depreciation	7,147	7,163	(16)
Amortization	1,364	1,393	(29)
Write-down of non current assets	311	0	311
Provision (release) for bad debts	54	80	(26)
Other	2,190	1,082	1,108
Total costs by nature	147,926	117,109	30,817
Increase (decrease) in work in progress and finished goods	(2,349)	3,240	(5,589)
Total cost of sales and operating expenses	145,577	120,349	25,228

(*) Of which 86 thousand euro as out of pocket expenses incurred in 2015 and -16 thousand euro as balance on out of pocket expenses related to the previous year (in 2014, the out of pocket expenses were 99 thousand euro and the recovery of out of pocket expenses related to the previuos year was 27 thousand euro).

The items "Raw materials", "Various materials", "Transports" and "Commissions", which are strictly connected to the production cycle, increased both for the exchange rate effect and for the increase in sales, mainly in the shape memory alloys business and in the purification sector.

The increase in "Personnel cost" was due, in addition to the currency effect, both to the growth in the average number of the Group's employees and to salary increases linked to meritocratic policies and to regulatory constraints, as well as to the higher accruals for the variable compensation of the employees, estimated to be growing in line with the trend of the economic results.

The item "Corporate bodies" included the remuneration of the members of the Board of Directors, both executive and non-executive, and of the Board of Statutory Auditors of the Parent Company. Please note that, starting from the end of April 2015, this remuneration was calculated according to the new standards defined with the three-year renewal of the corporate bodies. For the details on the 2015 remunerations and the comparison with the previous year, please refer to the Note no. 41 and to the Report on the remuneration.

The increase in "Rent and operating leases" and "General services" was linked to the expansion of the production facility of the subsidiary Memry Corporation located in Bethel (CT - USA).

The write-down of non-current assets was mainly related to the closure of a medical SMA production line, whose final device, disappeared from the market because technologically obsolete, has been replaced by a new and more sophisticated product. This item also included the devaluation of the know-how related to a specific getter for lamps, that is suffering a growing competitive pressure.

The item "Consultant fees and legal expenses", net of the exchange rate effect, decreased of 468 thousand euro following the above mentioned lower use of external consultants for the OLET (Organic Light Emitting Transistor) research project.

In 2015 the item "Depreciation" benefited from a reduction (about 419 thousand euro) following the review, based on an independent third party appraisal, of the remaining useful life of the production plant and machinery, as well as of the laboratory equipment and instruments used by the Parent Company in its research activities. This reduction in the depreciation was offset by an upward variation in the US companies of the Group attributable to the currency effect.

The increase of the item "Other" was mainly related to the higher costs for external manufacturing services linked to the new industrial SMAs productions.

6. ROYALTIES

The item "Royalties" was exclusively composed of the lump-sums and the royalties accrued for the licensing of the thin film getter technology for MEMS of new generation.

The balance for the year 2015 amounted to 902 thousand euro and compared with 1,843 thousand euro in 2014: the decrease is due both to lower commissions accrued in 2015 (-413 thousand euro due to the price erosion that is affecting the gyroscopes market, as well as to the decrease in volumes) and to lower lump-sums (-528 thousand euro) resulting from the signature of new licensing agreements.

In relation to the last two signed agreements, please note that the technology transfer has not yet been finalized and therefore, as at December 31, 2015, such contracts have not matured any commission yet.

7. OTHER INCOME (EXPENSES)

This item recorded a net loss of -838 thousand euro as at December 31, 2015, compared with -183 thousand euro in the previous year.

The breakdown is provided below.

(thousands of euro)
	2015	2014	Difference
Other income	370	424	(54)
Other expenses	(1,208)	(607)	(601)
Total other income (expenses)	(838)	(183)	(655)

The item "Other income" includes all those revenues that do not fall within the ordinary operations of the Group, such as, for example, the proceeds from the sale of scrap materials, and it is in line with the previous year.

The item "Other expenses" is mainly composed by the property taxes and other taxes, other than income taxes, paid by the Italian Group's companies.

In the current year the item also includes the provision against legal claims, equal to 689 thousand euro, accounted by the Parent Company (for further details please refer to the Note no. 31) and to which is primarily due the increase compared to 2014.

8. FINANCIAL INCOME (EXPENSES)

The following table shows the financial income breakdown in the fiscal year 2015, compared to the previous year.

(thousands of euro)
Financial income	2015	2014	Difference
Bank interest income	101	145	(44)
Other financial income	192	92	100
Realized gains on IRS	0	0	0
Gains from IRS evaluation at fair value	0	249	(249)
Total financial income	293	486	(193)

The reduction of "Bank interest income" was due to the lower interest income accrued on the cash and cash equivalents of SAES Getters (Nanjing) Co., Ltd., decreased as a result of the partial repayment of the share capital of the Chinese subsidiary to the Parent Company.

The increase of the item "Other financial income" was due to the higher interest income matured on the interest-bearing loans granted by the subsidiary SAES Nitinol S.r.l. to the joint venture Actuator Solutions GmbH (for further details please refer to the Note no. 20).

The following table shows the breakdown of the financial expenses in the fiscal year 2015, compared to the previous year.

(thousands of euro)
Financial expenses	2015	2014	Difference
Bank interests and other bank expenses	1,618	1,730	(112)
Other financial expenses	181	120	61
Realized losses on IRS	0	256	(256)
Losses from IRS evaluation at fair value	22	0	22
Total financial expenses	1,821	2,106	(285)

The item "Bank interests and other bank expenses" includes the interest expenses on loans, both short and long term ones, held by the Parent Company and by the US subsidiaries, as well as the bank fees related to the credit lines held by SAES Getters S.p.A.

Compared to 2014, following the different breakdown of the financial debt, with a progressive increase of the incidence of medium to long term loans, compared to the short-term bank debt, the increase in interests following the signature of new long term financing by the Parent Company was offset by lower costs for loans such as "hot money" and for the use of bank credit lines.

The item "Other financial expenses" is mainly composed by the effect into the income statement of the adjustment of the time horizon used in the calculation of the present value of the financial debt deriving from the acquisition of the business "hydrogen purifiers" from Power & Energy, Inc. (for further details please refer to the Note no. 29). In the previous year this adjustment was positive and equal to +26 thousand euro and it was included in the item "Other financial income" (please see the table above).

Instead, in the previous year the item "Other financial expenses" included the fee for the waiver to recall the loans held by the US subsidiaries by the issuing bank as a result of the non-compliance with some covenants.

The item "Losses from IRS evaluation at fair value" is the effect on the income statement of the fair value measurement of the interest rate swap (IRS) contract entered into on September 25, 2015 by the Parent Company to partially hedge the medium-long term bank loan received in the second half of 2015 (for further details on the loan agreement, please see the Note no. 28, while for the details on the IRS, please see the Note no. 35).

As at December 31, 2014, the item "Gains from IRS evaluation at fair value" represented the effect on the income statement of the resetting of the fair value of the interest rate swap (IRS) agreement held by the US subsidiary Memry Corporation, expired on December 31, 2014, while the item "Realized losses on IRS" included the interest differences actually paid to the bank on this hedging contract during the year.

9. SHARE OF RESULT OF INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

This item includes the Group's share in the result of the joint venture Actuator Solutions GmbH, evaluated with the equity method. Please note that Actuator Solutions GmbH consolidates its wholly owned subsidiary Actuator Solutions Taiwan Co., Ltd.

In 2015 the loss deriving from the evaluation with the equity method amounted to -1,843 thousand euro, higher than the one recorded in the previous year (-1,286 thousand euro) despite the higher revenues in the seat comfort area (+13.0%), due to the increase of the development and prototyping expenses related to the systems for the image focus of smartphone; these actuators, based on the SMA technology, have successfully passed the functional and reliability tests and the first commercial order is expected to arrive in the first months of 2016.

For further details on the composition of this loss, please refer to the Note no. 17.

Please note that as at December 31, 2015 the joint venture SAES RIAL Vacuum S.r.l. was not yet operative and therefore it did not contribute to the result of the SAES Group.

10. FOREIGN EXCHANGE GAINS (LOSSES)

In 2015 the exchange rates management recorded an overall positive net balance equal to 694 thousand euro, compared to a balance closed to zero (positive for 147 thousand euro) in the previous year.

The breakdown of foreign exchange gains and losses as at December 31, 2015 compared to the previous year is given below.

(thousands of euro)
Foreign exchange gains and losses	2015	2014	Difference
Foreign exchange gains	3,164	1,346	1,818
Foreign exchange losses	(1,311)	(1,884)	573
Foreign exchange gains (losses), net	1,853	(538)	2,391
Realized exchange gains on forward contracts	35	656	(621)
Realized exchange losses on forward contracts	(1,156)	(8)	(1,148)
Gains (losses) from forward contracts evaluation at fair value	(38)	37	(75)
Gains (losses) on forward contracts	(1,159)	685	(1,844)
Total foreign exchange gains (losses), net	694	147	547

The item "Foreign exchange gains (losses), net" recorded a positive balance of +1,853 thousand euro, to be compared with a negative balance of -538 thousand euro in the previous year. The improvement compared to 2014 was due to the foreign exchange gains (1,907 thousand euro) resulting in the current year from the release into the income statement of part of the translation reserve generated by the consolidation of SAES Getters (Nanjing) Co., Ltd., and SAES Getters Korea Corporation following the partial reduction of the share capital of the two Asian commercial subsidiaries.

This item also included, in both years, the exchange losses deriving from the conversion of the financial credit in euro held by the Korean subsidiary towards the Parent Company, as a result of the appreciation of the Korean won against the euro (-462 thousand euro in 2015, compared to -729 thousand euro in 2014), only partially offset by the exchange gains related to the conversion of commercial items in dollars and yen.

The item "Gains (losses) on forward contracts" recorded a negative balance of 1,159 thousand euro, compared to a positive balance of 685 thousand euro as at December 31, 2014. This balance included both the gains or losses realised when forward contracts on transactions in dollars and yen are unwound, as well as the impact of their fair value evaluation in the income statement.

In both years this item also includes the realized gains or losses (-136 thousand euro in 2015 against +625 thousand euro in 2014) related to the forward sales contracts of euro entered into by the Group with the objective of limiting the currency risk on the balance of the aforementioned financial credit in euro of the Korean subsidiary (included in the item "Foreign exchange gains (losses), net").

With reference to the exchange rate differences deriving from the translation of the financial credit of SAES Getters Korea Corporation, please note that, in anticipation of the reduction of the share capital of the Korean subsidiary through the partial use of this financial credit, at the beginning of 2015 the Group signed two different forward sales contracts, with different maturities. The first contract, with a notional value of 7 million euro, expired on September 30, 2015, while the second one, with a notional value of 1.5 million euro, expired on December 28, 2015. Therefore, the exchange rate losses accrued from October to the date of the repayment of the share capital (November 2015) were only partially hedged by the contract expiring at the end of the year.

11. INCOME TAXES

In 2015 income taxes amounted to 9,002 thousand euro, with an increase of 2,173 thousand euro compared to the previous year.

The related breakdown is given below.

(thousands of euro)
	2015	2014	Difference
Current taxes	7,244	5,383	1,861
Deferred taxes	1,758	1,446	312
Total	9,002	6,829	2,173

The increase in the tax expenses, compared to the previous year, is in line with the increase in the income before taxes.

The following table shows the reconciliation of the theoretical tax charges, on the basis of the tax rates in force in Italy (IRES), and the effective tax charges according to the consolidated financial statements.

(thousands of euro)

	2015			2014
Income before taxes		17,822		10,253
Theorical tax rate and tax charges	27.50%	4,901	27.50%	2,820
Effect of different tax rates	12.14%	2,163	19.03%	1,951
Non deductible costs/non taxable income	-19.14%	(3,412)	-21.48%	(2,202)
Taxes on subsidiaries' accumulated profits	11.68%	2,081	9.88%	1,013
Unrecognition (recognition) of deferred tax assets on fiscal losses	9.85%	1,755	21.84%	2,239
Unrecognition (recognition) of deferred tax assets on temporary differences	0.70%	124	-0.15%	(15)
R&D credits and other tax credits	-3.11%	(554)	-5.69%	(583)
Redetermination of deferred tax assets and liabilities following the tax rate variation	9.49%	1,692	0.00%	0
Other permanent differences	-1.77%	(316)	8.97%	920
IRAP and other local taxes	3.19%	568	6.69%	686
Effective tax rate and tax charges	50.51%	9,002	66.60%	6,829

As already happened in the previous year, the Group's companies did not recognize deferred tax assets on the fiscal losses realized in 2015. These total fiscal losses were equal to 6,425 thousand euro, compared to tax losses equal to 9,086 thousand euro as at December 31, 2014: the decrease (- 29.3%) of the fiscal losses on which deferred tax assets were not recognized allowed the improvement in the Group's tax rate, that decreased from 66.6% to 50.5%.

Instead, an opposite effect came from the negative adjustment equal to 1,692 thousand euro, as a consequence of the redetermination of deferred tax assets and liabilities of the Group's Italian companies, by applying the new IRES¹⁴ tax rate equal to 24%, which will come into force starting from 2017.

Finally, please note that, in 2014, the taxes had been penalized by a provision for fiscal risks, amounting to 500 thousand euro, recorded by the Parent Company in connection with the investigation on the 2015 income tax return.

12. NET INCOME (LOSS) FROM ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

As at December 31, 2015 there were no revenues or costs arising from assets held for sale or discontinued operations; instead, in the previous year the income from assets held for sale and discontinued operations was equal to 1,412 thousand euro and it was composed by revenues and costs related to the CRT (Cathode Ray Tubes) business, classified in the result arising from discontinued operations following the shut-down of the manufacturing plant of the Chinese subsidiary SAES Getters (Nanjing) Co., Ltd., the last production unit of the Group dedicated to the production of getters for cathode ray tubes. In the year 2014, this result also included the net capital

¹⁴ Article 1, paragraphs 61-64, of the 2016 Italian Stability Law modified the corporate tax rate (IRES) of the Italian companies, providing for a reduction. Namely, paragraph 61 provides for a reduction of the IRES tax rate from the current 27.5% to 24%, effective from January 1, 2017.

gain¹⁵ on the sale of the land use right and the building of the Chinese subsidiary (1,144 thousand euro), finalized at the end of October 2014, following the approval by the Chinese authorities. For further details on the composition of this income please refer to the consolidated financial statements of the previous year.

13. EARNING (LOSS) PER SHARE

As indicated in the Note no. 27, SAES Getters S.p.A.'s capital stock is represented by two different types of shares (ordinary shares and savings shares) which bear different rights with regards to the distribution of dividends.

The pro-quota earning attributable to each type of shares is determined on the basis of the respective rights to receive dividends. Therefore, in order to calculate the earning per share, the value of the preferred dividends contractually assigned to savings shares has been deducted from the net income of the period, assuming the theoretical distribution of the latter. The value obtained is divided by the average number of outstanding shares in the relevant time-period.

If the period ended with a loss, the latter would be instead allocated equally to each type of shares.

The following table shows the earning (loss) per share in the fiscal year 2015, compared with the corresponding figure in 2014.

Earning (loss) per share		2015			2014
	Ordinary	Savings	Total	Ordinary	Savings	Total
	shares	shares		shares	shares
Profit (loss) attribuitable to shareholders (thousands of euro)			8,820			4,836
Theoretical preference dividends (thousands of euro)		1,022	1,022		1,022	1,022
Profit (loss) attributable to the different categories of shares (thousands of euro)	5,787	2,011	7,798	3,135	679	3,814
Total profit (loss) attributable to the different categories of shares (thousands of euro)	5,787	3,033	8,820	3,135	1,701	4,836
Average number of oustanding shares	14,671,350	7,378,619	22,049,969	14,671,350	7,378,619	22,049,969
Basic earning (loss) per share (euro)	0.3944	0.4111		0.2137	0.2305
- from continued operations (euro)	0.3944	0.4111		0.1497	0.1664	(*)
- from discontinued operations (euro)	0.0000	0.0000		0.0266	0.1385
Diluted earning (loss) per share (euro)	0.3944	0.4111		0.2137	0.2305
- from continued operations (euro)	0.3944	0.4111		0.1497	0.1664	(*)
- from discontinued operations (euro)	0.0000	0.0000		0.0266	0.1385

(*) The sum of the earning per share from continued operations and that from discontinued operations differs from the basic earning per share because the net income from continued operations and the income from discontinued operations have been attributed considering both the preference dividend to savings shares and the higher dividend due to the latter (in accordance with article no. 26 of the By-laws).

14. SEGMENT INFORMATION

For management purposes, the Group is organized into two Business Units according on the type of products and services provided. As at December 31, 2015 the Group's operations were divided into two primary operating segments:

• Industrial Applications getters and dispensers used in a wide range of industrial applications (lamps, electronic devices, MEMS, vacuum systems, vacuum thermal insulation solutions, semiconductors and other industries that use pure gases in their processes);
• Shape Memory Alloys shape memory alloy raw materials, semi-finished products, components and devices for both medical and industrial applications.

The Top Management monitors the results of the two Business Units separately in order to make decisions concerning the allocation of resources and investments and to determine the Group's performance. Each sector is evaluated according to its operating result; financial income and

¹⁵ Net of the disposal expenses.

expenses, foreign exchange performance and income taxes are measured at the overall Group level and thus they are not allocated to operating segments.

Internal reports are prepared in accordance with IFRSs and no reconciliation with the carrying amounts is therefore necessary.

The columns "Not allocated" include corporate income statement and financial position amounts that cannot be directly attributed or allocated to the business units on a reasonable basis, but which refer to the Group as a whole, and the amounts related to the basic research projects or undertaken to achieve the diversification into innovative businesses (Business Development Unit).

The following table shows the breakdown of the main income statement figures by operating segment.

(thousands of euro)
	Industrial Applications		Shape Memory Alloys			Not allocated	Total
Consolidated statement of profit or loss	2015	2014	2015	2014	2015	2014	2015	2014
Total net sales Gross profit % on net sales	101,109 47,496 47.0%	85,842 41,856 48.8%	63,680 24,230 38.0%	44,460 14,322 32.2%	1,223 261 21.3%	1,399 493 35.2%	166,012 71,987 43.4%	131,701 56,671 43.0%
Total operating expenses Royalties Other income (expenses), net	(21,021) 902 83	(18,872) 1,843 2	(10,764) 0 95	(8,753) 0 34	(19,767) 0 (1,016)	(17,694) 0 (219)	(51,552) 902 (838)	(45,319) 1,843 (183)
Operating income (loss) % on net sales	27,460 27.2%	24,829 28.9%	13,561 21.3%	5,603 12.6%	(20,522) n.s.	(17,420) n.s.	20,499 12.3%	13,012 9.9%
Interest and other financial income (expenses), net Share of result of investments accounted for using the equity method Foreign exchange gains (losses), net							(1,528) (1,843) 694	(1,620) (1,286) 147
Income (loss) before taxes							17,822	10,253
Income taxes							(9,002)	(6,829)
Net income (loss) from continued operations							8,820	3,424
Net income (loss) from discontinued operations							0	1,412
Net income (loss)							8,820	4,836
Minority interests in consolidated subsidiaries							0	0
Group net income (loss)							8,820	4,836

The following table shows the breakdown of the main balance sheet figures by operating segment.

(thousands of euro)
				Continued operations						Total
		Industrial Applications		Shape Memory Alloys		Not allocated		Discontinued operations
			Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014
Assets and liabilities
Non current assets	36,888	36,242	60,814	54,914	24,385	26,816	0	0	122,087	117,972
Current assets	42,182	38,053	17,353	14,752	31,557	35,174	0	0	91,092	87,979
Total assets	79,070	74,295	78,167	69,666	55,942	61,990	0	0	213,179	205,951
Non current liabilities	6,407	6,117	756	833	36,407	23,553	0	0	43,570	30,503
Current liabilities	14,540	16,275	6,749	3,182	21,832	43,303	0	0	43,121	62,760
Total liabilities	20,947	22,392	7,505	4,015	58,239	66,856	0	0	86,691	93,263
Other segment information
Capital expenditure	1,217	1,073	3,091	1,640	751	1,654	0	0	5,059	4,367
Depreciation & amortization	3,400	3,602	3,305	3,081	1,806	1,873	0	0	8,511	8,556
Other non cash expenses	212	73	124	7	29	0	0	0	365	80

Information on geographical areas

The following table provides the non-current assets by geographical area.

(thousands of euro)
	Italy	Europe	United States	Asia	Total non current assets (*)
2015	34,985	3,050	69,216	172	107,423
2014	36,141	2,653	63,299	154	102,247

(*) It includes: tangible fixed assets, intangible fixed assets, investments in joint ventures, other long term assets and the non current part of the tax consolidation receivables from the Controlling Company.

Please refer to the table shown in the Report on operations for the breakdown of consolidated net sales by customer's location.

15. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net of accumulated depreciation, amounted to 50,383 thousand euro as at December 31, 2015, with an increase of 301 thousand euro compared to December 31, 2014.

The following tables show the changes occurred during the current and the previous year.

(thousands of euro)
Tangible fixed assets	Land	Building	Plant and machinery	Assets under construction and advances	Total
December 31, 2014	3,758	21,418	22,623	2,885	50,684
Additions	0	379	2,464	2,174	5,017
Disposals	(49)	0	(12)	0	(61)
Reclassifications	0	313	2,699	(3,012)	0
Reclassifications to assets held for sale	0	0	0	0	0
Depreciation	0	(1,389)	(5,758)	0	(7,147)
Write-downs	0	0	(102)	(21)	(123)
Revaluations	0	0	0	0	0
Translation differences	360	471	1,087	95	2,013
December 31, 2015	4,069	21,192	23,001	2,121	50,383
December 31, 2014
Historical cost	3,758	41,474	119,627	3,041	167,900
Accumulated depreciation and write-downs	0	(20,056)	(97,004)	(156)	(117,216)
Net book value	3,758	21,418	22,623	2,885	50,684
December 31, 2015
Historical cost	4,069	43,318	124,726	2,298	174,411
Accumulated depreciation and write-downs	0	(22,126)	(101,725)	(177)	(124,028)
Net book value	4,069	21,192	23,001	2,121	50,383

(thousands of euro)

Tangible fixed assets	Land	Building	Plant and machinery	Assets under construction and advances	Total
December 31, 2013	3,384	22,222	21,367	4,500	51,473
Additions	0	43	2,087	2,180	4,310
Disposals	0	(1)	(39)	0	(40)
Reclassifications	0	44	3,869	(3,913)	0
Reclassifications to assets held for sale	0	0	(23)	0	(23)
Depreciation	0	(1,382)	(5,781)	0	(7,163)
Write-downs	0	0	0	0	0
Revaluations	0	0	0	0	0
Translation differences	374	492	1,143	118	2,127
December 31, 2014	3,758	21,418	22,623	2,885	50,684
December 31, 2013
Historical cost	3,384	40,559	122,770	4,656	171,369
Accumulated depreciation and write-downs	0	(18,337)	(101,403)	(156)	(119,896)
Net book value	3,384	22,222	21,367	4,500	51,473
December 31, 2014
Historical cost	3,758	41,474	119,627	3,041	167,900
Accumulated depreciation and write-downs	0	(20,056)	(97,004)	(156)	(117,216)
Net book value	3,758	21,418	22,623	2,885	50,684

As at December 31, 2015 land and buildings were not burdened by mortgages or other guarantees.

In 2015 investments in tangible assets amounted to 5,017 thousand euro and they included the purchases made by the Parent Company of equipment for the improvement of the industrial SMA (Shape Memory Alloys) production lines, of laboratory equipment to be used in the OLET (Organic Light Emitting Transistor) research project, as well as the improvements to the water refrigeration systems of the production departments. Please also note the investments in the SMA area made by the subsidiaries Memry Corporation, SAES Smart Materials, Inc. and Memry GmbH, aimed both at increasing the production capacity of the existing lines and at creating new production departments both in the medical segment and in the industrial one. Finally, the investments included the improvements to the general equipment used by all the production departments and the purchase of new machinery for the expansion of the production line of vacuum pumps by the subsidiary SAES Advanced Technologies S.p.A.

The disposals (61 thousand euro in 2015) were mainly related to the sale of a part of an available land owned by SAES Advanced Technologies S.p.A.

The item "Depreciation", equal to 7,147 thousand euro, benefited from a reduction of approximately 419 thousand euro, as a result of the review of the remaining useful life of some plant and machinery, as well as of tools and instruments used in the laboratories of the Parent Company.

In particular, with the support of an independent third party appraisal, the state of the art of the technology, the state of maintenance and efficiency and the degree of the expected use of these assets have been subject to an audit; as a result of this appraisal, it was decided to lengthen the remaining useful life of the plant owned by SAES Getters S.p.A. of about 12 years on average and that of the remaining assets being evaluated of about 8 years.

The write-downs, equal to 123 thousand euro, were mainly related to the write-off of the residual value of some equipment and machinery owned by the US subsidiary Memry Corporation for the production of a product out of the market because replaced by a more innovative and sophisticated device.

The translation differences (+2,013 thousand euro) were related to assets of the US companies and linked to the revaluation of the US dollar as at December 31, 2015 compared to the exchange rate of December 31, 2014.

The following table shows the composition of tangible fixed assets based on their related ownership rights.

(thousands of euro)

		December 31, 2015		December 31, 2014
		Finance leased			Finance leased
	Owned assets	assets	Total	Owned assets	assets	Total
Land and building	25,261	0	25,261	25,176	0	25,176
Plant and machinery	22,994	7	23,001	22,601	22	22,623
Assets under construction and advances	2,121	0	2,121	2,885	0	2,885
Total	50,376	7	50,383	50,662	22	50,684

For further details on finance lease contracts, please refer to the Note no. 29.

16. INTANGIBLE ASSETS, NET

Intangible assets, net of accumulated amortization, were equal to 52,322 thousand euro as at December 31, 2015, and they recorded an increase of 3,617 thousand euro compared to the previous year.

The following tables show the changes occurred during the current and the previous year.

(thousands of euro)

Intangible fixed assets	Goodwill	Research and development expenses	Industrial and other patent rights	Concessions, licenses, trademarks and similar rights	Other intangible assets	Assets under construction and advances	Total
December 31, 2014	40,124	0	2,895	1,007	4,650	29	48,705
Additions	0	0	0	0	2	40	42
Disposals	0	0	0	0	0	0	0
Reclassifications	0	0	23	17	0	(40)	0
Reclassifications to assets held for sale	0	0	0	0	0	0	0
Amortization	0	0	(403)	(436)	(525)	0	(1,364)
Write-downs	0	0	0	0	(160)	(28)	(188)
Revaluations	0	0	0	0	0	0	0
Translation differences	4,290	0	319	13	505	0	5,127
December 31, 2015	44,414	0	2,834	601	4,472	1	52,322
December 31, 2014 Historical cost	45,401	183	6,544	8,437	20,660	740	81,965
Accumulated amortization and write-downs	(5,277)	(183)	(3,649)	(7,430)	(16,010)	(711)	(33,260)
Net book value	40,124	0	2,895	1,007	4,650	29	48,705
December 31, 2015
Historical cost	49,691	183	7,091	10,133	24,653	740	92,491
Accumulated amortization and write-downs	(5,277)	(183)	(4,257)	(9,532)	(20,181)	(739)	(40,169)
Net book value	44,414	0	2,834	601	4,472	1	52,322

(thousands of euro)

Intangible fixed assets	Goodwill	Research and development expenses	Industrial and other patent rights	Concessions, licenses, trademarks and similar rights	Other intangible assets	Assets under construction and advances	Total
December 31, 2013	35,669	0	2,935	1,290	4,677	150	44,721
Additions	0	0	0	11	42	4	57
Disposals	0	0	(35)	0	(28)	0	(63)
Reclassifications	0	0	6	92	28	(126)	0
Reclassifications to assets held for sale	0	0	0	0	0	0	0
Amortization	0	0	(365)	(402)	(626)	0	(1,393)
Write-downs	0	0	0	0	0	0	0
Revaluations	0	0	0	0	0	0	0
Translation differences	4,455	0	354	16	557	1	5,383
December 31, 2014	40,124	0	2,895	1,007	4,650	29	48,705
December 31, 2013 Historical cost	40,946	183	6,290	8,233	18,931	861	75,444
Accumulated amortization and write-downs	(5,277)	(183)	(3,355)	(6,943)	(14,254)	(711)	(30,723)
Net book value	35,669	0	2,935	1,290	4,677	150	44,721
December 31, 2014
Historical cost	45,401	183	6,544	8,437	20,660	740	81,965
Accumulated amortization and write-downs	(5,277)	(183)	(3,649)	(7,430)	(16,010)	(711)	(33,260)
Net book value	40,124	0	2,895	1,007	4,650	29	48,705

The yearly increase was almost exclusively due to the translation differences (+5,127 thousand euro) related to the intangible assets of the US companies of the Group partially offset by the amortization of the period (-1,364 thousand euro).

The write-downs, equal to 188 thousand euro, were mainly related to the know-how of a specific model of getter for lamps, subject to a growing competitive pressure.

With regards to the changes of the item "Goodwill", please see the section below.

All intangible assets, except for goodwill, are considered to have finite useful lives and are systematically amortized every period to account for their expected residual use.

Goodwill is not amortized; instead, its recoverable value is periodically reviewed on the basis of the expected cash flows of the related Cash Generating Unit - CGU (impairment test).

Goodwill

The following table shows the changes in the item "Goodwill" and specifies the Cash Generating Unit to which the goodwill has been allocated.

(thousands of euro)

Business Unit	December 31, 2014	Additions	Write-downs	Other movements	Translation differences	December 31, 2015
Industrial Applications	5,308	0	0	0	503	5,811
Shape Memory Alloys	34,816	0	0	0	3,787	38,603
Not allocated	0	0	0	0	0	0
Total goodwill	40,124	0	0	0	4,290	44,414

The increase of the year was entirely due to the exchange rate effect on the goodwill amounts denominated in currencies other than euro.

The following table shows the gross book values of goodwill and their accumulated write-downs for impairment from January 1, 2004 to December 31, 2015 and to December 31, 2014.

(thousands of euro)

		December 31, 2015		December 31, 2014
Business Unit	Gross value	Write-downs	Net book value	Gross value	Write-downs	Net book value
Industrial Applications (*)	5,874	(63)	5,811	5,371	(63)	5,308
Shape Memory Alloys (*)	42,003	(3,400)	38,603	38,216	(3,400)	34,816
Not allocated	358	(358)	0	358	(358)	0
Total goodwill	48,235	(3,821)	44,414	43,945	(3,821)	40,124

(*) The difference between the gross value as at December 31, 2015 and the gross value as at December 31, 2014 is due to the translation differences on goodwill amounts denominated in currencies other than euro.

Impairment test

Pursuant to IAS 36, goodwill is not amortized, but is rather assessed for impairment annually or more frequently where specific events or circumstances indicate that it may have become impaired. For the purposes of impairment testing, goodwill is allocated to Cash Generating Units (CGUs) or groups of units, which may be no larger than the segments identified for management reporting purposes pursuant to IFRS 8. In particular, the CGUs identified by the SAES Group for the impairment test coincide with the operating segments as indicated in the Note no. 14.

Impairment testing consists in estimating the recoverable amount of each Cash Generating Unit (CGU) and comparing it with the net carrying amount of the associated assets, including goodwill.

The recoverable amount is estimated by determining the value in use, which corresponds to the present value of the future cash flows that are expected from each Cash Generating Unit according to the most recent three-years 2016-2018 plan, developed by the top management and approved by the Board of Directors on February 18, 2016.

In making these projections, the management made many assumptions, including an estimate of future sales volumes, price trends, gross margin, operating expenses, changes in working capital and investments.

The expected sales growth is based on the management's projections, while the margins and operating expenses of the various businesses were estimated on the basis of historical data, adjusted to account for the expected results and the projected market price trends.

The value of investments and working capital was determined taking into account various factors, such as the expected future growth rates and the products development plan.

The discount rate applied in discounting cash flows represents the estimate of the expected rate of return of each Cash Generating Unit in the market. In order to select an appropriate discount rate to be applied to future cash flows, the indicative interest rates that would be applied to the Group in case of a subscription of a new medium-long term loan, the long-term government bond yield curve and the perspective Group's equity/debt structure were taken into consideration. The weighted average cost of capital (WACC) applied to future cash flows was estimated to be 6.9%, and it is deemed to be representative of all of the Group's CGUs. The WACC used is net of taxes, in accordance with the involved cash flows.

The model used to discount future cash flows considers a terminal value, which reflects the residual value that each Cash Generating Unit is expected to generate beyond the three-year period covered by the plans. This value was estimated by conservatively assuming a growth rate equal to zero and a timeframe deemed representative of the estimated duration of the various businesses, as reported in the table below.

	Industrial Applications	Shape Memory Alloys
Estimated years after the three years plan	9 (*)	12

(*) Calculated as the average of:

• 12 years, assumed for Pure Gas Handling Business and Vacuum Systems Business;

• 10 years, assumed for Electronic & Photonic Devices Business and Sensors & Detectors

• 6 years, assumed for Thermal Insulation Business;

• 5 years, assumed for Light Sources Business.

This first grade testing didn't show any potential impairment. In addition, a sensitivity analysis of up to 1 percentage point of the WACC value employed by the Group didn't show any criticality with reference to the net assets reported in the balance sheet as of December 31, 2015.

A second level of verification was then carried out, including also the costs related to corporate offices in the recoverable amount, as well as those economic values that cannot be allocated univocally or through reliable drivers to the major sectors, among which basic research expenses incurred by the Group to identify innovative technical solutions are of great importance. Also this second grade of testing did not show any potential impairment of the assets.

The estimation of the recoverable amounts of the various Cash Generating Units required the management to use its discretion and to prepare estimates. Accordingly, the Group cannot guarantee that impairment losses will not be incurred in future periods. In fact, several factors, including those associated with the future development of the current market scenario and of the demand, could require asset values to be re-determined in future periods. The Group will constantly monitor the circumstances and events that could require further testing of impairment losses.

17. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

As at December 31, 2015 this item included the share of the net assets attributable to the Group in the joint venture Actuator Solutions GmbH¹⁶ and in the joint venture SAES RIAL Vacuum S.r.l.

The following table shows the changes in this item during the current year.

(thousands of euro)
Investments accounted for using the equity method	December 31, 2014	Additions	Capital payments	Share of the net result	Share of other comprehensive income (loss)	Dividends paid	Disposals	Other	December 31, 2015
Actuator Solutions	1,370	0	2,900	(1,843)	(51)	0	0	0	2,376
SAES RIAL Vacuum S.r.l.	0	1,614	0	0	0	0	0	0	1,614
Total	1,370	1,614	2,900	(1,843)	(51)	0	0	0	3,990

Actuator Solutions

The item "Capital payments" refers to the capital contributions made during the year by SAES Nitinol S.r.l. in favour of the joint venture Actuator Solutions GmbH, as detailed below.

¹⁶ Please note that Actuator Solutions GmbH consolidates its wholly owned subsidiary Actuator Solutions Taiwan Co., Ltd.

Date	Currency	Value (thousands of euro)
July 2015	EUR	450
October 2015	EUR	450
December 2015	EUR	2,000
Total		2,900

Please note that the same amounts were paid by the 50% joint partner Alfmeier, through the company SMA Holding GmbH.

The item "Share of the net result" (negative for 1,843 thousand euro) relates to the adjustment, in connection with the percentage of ownership, of the value of the investment held by the Group in relation to the results achieved by the joint venture in 2015.

The item "Share of other comprehensive income (loss)" (-51 thousand euro) refers to the share of the Group in the currency translation difference reserve arising from the conversion of the financial statements of the subsidiary Actuator Solutions Taiwan Co., Ltd. for consolidation purposes.

The table below shows the SAES Group interest in Actuator Solutions' assets, liabilities, revenues and costs.

(thousands of euro) Actuator Solutions	December 31, 2015	December 31, 2014
Statement of financial position	50%	50%
Non current assets	4,130	3,614
Current assets	2,448	1,887
Total assets	6,578	5,501
Non current liabilities	740	2,435
Current liabilities	3,462	1,696
Total liabilities	4,202	4,131
Captal stock, reserves and retained earnings	4,270	2,698
Net income (loss) for the period	(1,843)	(1,286)
Other comprehensive income (loss) for the period	(51)	(42)
Total equity	2,376	1,370

(thousands of euro)

Actuator Solutions	2015	2014
Statement of profit or loss and of other comprehensive income	50%	50%
Net sales	8,638	7,646
Cost of sales	(8,864)	(7,603)
Gross profit	(226)	43
Total operating expenses	(2,119)	(1,795)
Other income (expenses), net	63	288
Operating income (loss)	(2,282)	(1,464)
Interest and other financial income, net	(164)	(65)
Foreign exchange gains (losses), net	32	5
Income taxes	571	238
Net income (loss)	(1,843)	(1,286)
Exchange differences	(51)	(42)
Total comprehensive income (loss)	(1,894)	(1,328)

Overall Actuator Solutions recorded net revenues equal to 17,275 thousand euro in 2015 to be compared with 15,291 thousand euro in the corresponding period of the previous year; these revenues, totally generated by the sale of valves used in lumbar control systems of the seats of a wide range of cars, increased because the lumbar control system based on the SMA technology is recording a strong growth in volumes.

The net income of the period was negative and equal to -3,687 thousand euro compared with -2,572 thousand euro as at December 31, 2014: the increase of the loss compared to the previous year (- 1,115 thousand euro), despite the increase in the revenues of the seat comfort business (+13.0%), was due to the increase of development and prototyping costs related to the systems for the image focus of the micro-cameras of the smartphones. For further details on the developments in Actuator Solutions, please see the paragraph dedicated to the joint venture in the Report on operations of Group.

Please note that the research expenses are charged directly in the income statement in the year in which they occurred.

As already mentioned before, the share of the SAES Group (equal to 50%) in the result of the joint venture amounted to -1,843 thousand euro in the 2015, to which also the other components of the comprehensive income must be added, also negative for to -51 thousand euro, represented by the conversion differences arising from the consolidation of Actuator Solutions Taiwan Co., Ltd. in Actuator Solutions GmbH.

The value of the investment in Actuator Solutions GmbH was subjected to the impairment test. To this end, the value in use was determined with the Free Operating Cash Flow method, on the basis of the most recent plans prepared by the management and approved by the Supervisory Committee of the Company, and by using a WACC of 4.9%, which considers the structure of the capital/debt of the joint venture and the long-term German government bond yields curve.

The analysis did not show any potential impairment of the asset.

A sensitivity analysis was also performed by increasing the discount rate to bring it in line with that used by the Group for impairment test purposes (6.9%); also in this case there wasn't any criticality.

The following table provides the number of employees of the joint venture Actuator Solutions as at December 31 split by category, based on the percentage of ownership held by the Group (equal to 50%).

Actuator Solutions	December 31, 2015	December 31, 2014
	50%	50%
Managers	5	4
Employees and middle management	26	23
Workers	9	6
Total	40	33

The staff employed with contract types other than employment agreements was equal to 6 units (based on the percentage of ownership held by the Group) as at December 31, 2015 (3 units as at December 31, 2014).

SAES RIAL Vacuum S.r.l.

On December 23, 2015, SAES Group, through the Parent Company, acquired by the company Rodofil s.n.c. 10% of the company SAES RIAL Vacuum S.r.l., established on December 14, 2015 through the transfer by Rodofil of the 'Rial Vacuum' business (assets, trademark and customers list, as well as inventory and employed personnel), specialized in the design and manufacture of vacuum chambers for accelerators, synchrotrons and colliders, used in the major research laboratories worldwide. On December 23, 2015, the parties also committed to increase the share of SAES Getters S.p.A. up to 49% by acquiring a further 39% within the end of January 2016.

The Group's equity investment is accounted for using the equity method since the operation consists of a joint control agreement and, specifically, a joint venture. With this regard, please note that a key factor in qualifying the agreement is the subscription of shareholders' agreements that provide that the decisions on some significant activities are taken with the unanimous consent of the parties, irrespective of their ownership percentage in the share capital.

The aim of the joint venture is the creation of an Italian technological and manufacturing hub of the highest level, for the design and production of integrated vacuum components and systems for accelerators, for the research, as well as for industrial systems and devices. SAES RIAL Vacuum S.r.l. will combine at the highest level the competences of SAES in the field of materials, vacuum applications and innovation, with the experience of Rial and Rodofil in the design, assembling and fine mechanical productions, with the aim of offering absolutely excellent quality products and successfully competing in the international markets.

As at December 31, 2015 the value of the joint venture (1,614 thousand euro) was the total price for the acquisition of 49% of the share capital of SAES RIAL Vacuum S.r.l., inclusive of both the consideration paid in cash for the first 10% (330 thousand euro) and the financial debt incurred for the commitment for the acquisition of the remaining 39% (equal to 1,284 thousand euro). For further details on the latter, please refer to the Note no. 29.

(thousands of euro)		December 23, 2015
SAES RIAL Vacuum S.r.l.	Book value	Book value
	100%	49%
Tangible fixed assets	96	47
Inventory	476	233
Other current assets	12	6
Total assets	584	286
Payables to employee	120	59
Other current liabilities	12	6
Equity	452	221
Total equity and liabilities	584	286
Goodwill arising on acquisition		1,393
Purchase consideration		1,614

The following table shows the historical net book value of the assets acquired.

The difference between the total consideration of the acquisition (1,614 thousand euro, including the commitment to purchase the remaining 39%) and the net value of the assets acquired on the basis of historical values at the acquisition date (221 thousand euro) represents the goodwill that is included in the carrying value of the investment. The allocation of this difference as goodwill has to be considered provisional and will be finalized within one year from the acquisition date.

Please note that as at December 31, 2015 the company SAES RIAL Vacuum S.r.l. was not yet operative and therefore it was not necessary to adjust the value of the investment for the share pertaining to the SAES Group in the 2015 income.

In addition, being the acquisition just finalized as at December 31, 2015 and since there weren't any objective indications of impairment, no impairment test was performed on the investment.

The contract signed in December 23, 2015 includes a put and call option among the shareholders, according to an agreed schedule. In particular, Rodofil will have the right to exercise, through a one-off operation, a put option, by selling to SAES Getters S.p.A. a minimum of 2% up to a maximum of 51% of its shares of SAES RIAL Vacuum S.r.l., again through a one-off operation between May 1, 2020 and May 31, 2020, at a predetermined price related to the performance of the new company at the date of the sale; if Rodofil does not exercise its put option, SAES Getters S.p.A. will have the right to exercise a call option through a one-off operation between June 1, 2020 and June 30, 2020, for a percentage equal to 30% of the share capital, at a price calculated with a similar method.

Please note that as at December 31, 2015 the Management did not have enough information in order to perform an accurate assessment of the fair value of the above options that, therefore, have not been valued as at December 31, 2015.

The following table provides the number of employees of the joint venture SAES RIAL Vacuum S.r.l. as at December 31, 2015 split by category, based on the percentage of ownership held by the SAES Group (49%).

SAES RIAL Vacuum S.r.l.	December 31, 2015
	49%
Managers	0
Employees and middle management	0
Workers	3
Total	3

18. DEFERRED TAX ASSETS AND LIABILITIES

As at December 31, 2015 the net balance of deferred tax assets and deferred tax liabilities was positive and equal to 7,538 thousand euro, with a decrease of 1,997 thousand euro compared to December 31, 2014.

The related details are provided below.

(thousands of euro)
Deferred taxes	December 31, 2015	December 31, 2014	Difference
Deferred tax assets	14,064	15,725	(1,661)
Deferred tax liabilities	(6,526)	(6,190)	(336)
Total	7,538	9,535	(1,997)

Since deferred tax assets and liabilities have been recognized in the consolidated financial statements by setting off the figures attributable to the various legal entities against one another when appropriate, the following table shows deferred tax assets and liabilities before the offsetting process.

(thousands of euro)
Deferred taxes	December 31, 2015	December 31, 2014	Difference
Deferred tax assets	18,667	20,348	(1,681)
Deferred tax liabilities	(11,129)	(10,813)	(316)
Total	7,538	9,535	(1,997)

The following tables provide a breakdown of the temporary differences that comprise deferred tax assets and liabilities by their nature, compared with the figures of the previous year.

(thousands of euro)

	December 31, 2015		December 31, 2014
Deferred tax assets	Temporary differences	Fiscal effect	Temporary differences	Fiscal effect
Intercompany profit eliminations	1,625	591	1,160	416
Differences on depreciation/amortization and write-downs	6,467	1,758	7,120	2,357
Bad debts	480	182	486	186
Inventory write-down	6,043	2,149	5,006	1,831
Provisions	4,051	1,378	3,014	1,145
Cash deductable expenses	6,367	1,823	4,418	1,375
Deferred taxes on recoverable losses	44,818	10,756	46,649	12,947
Exchange differences and other	114	30	132	91
Total		18,667		20,348

The decrease of deferred tax assets compared to the previous year (-1,681 thousand euro) was mainly due to the tax losses carried forward (on which deferred tax assets had been accrued) used by the US subsidiary SAES Getters USA, Inc. and to the redetermination of deferred tax assets recognized by the Parent Company on the tax losses carried forward, by applying the new IRES tax rate, equal to 24%, which will come into force starting from 2017.

The Group had 117,653 thousand euro in tax losses eligible to be carried forward as at December 31, 2015, most of which were attributable to the subsidiary SAES Getters International Luxembourg S.A. and to the Parent Company (tax losses eligible to be carried forward amounted to 109,356 thousand euro as at December 31, 2014).

The tax losses eligible to be carried forward that were taken into account when determining deferred tax assets were equal to 44,818 thousand euro.

(thousands of euro)

	December 31, 2015		December 31, 2014
Deferred tax liabilities	Temporary		Temporary
	differences	Fiscal effect	differences	Fiscal effect
Tax due on distribution of earnings accumulated by the subsidiaries	(55,928)	(3,044)	(43,067)	(2,172)
Differences on depreciation/amortization and fair value revaluations	(23,128)	(7,933)	(23,311)	(8,509)
IAS 19 effect	(431)	(103)	(249)	(68)
Other	(66)	(49)	(233)	(64)
Total		(11,129)		(10,813)

The deferred tax liabilities recorded in the consolidated financial statements as at December 31, 2015 included not only the fiscal provision on the temporary differences on the plus-values identified during the purchase price allocation of the US companies acquired in the past years, but also taxes due in the event of distribution of the net income and of the reserves of the subsidiaries for which a distribution is expected in a foreseeable future.

The increase of the latter was the main reason for the increase in the deferred tax liabilities compared to December 31, 2014 (+316 thousand euro).

Please note that, applying the article 1, paragraph 61, of the 2016 Italian Stability Law that provides for a reduction of the IRES tax rate of the Italian Companies from the current 27.5% to 24%, effective from January 1, 2017, the Group's Italian companies restated the deferred tax assets and liabilities applying the new IRES tax rate to all temporary differences that will be brought forward after December 31, 2016. This restatement resulted in a negative adjustment on the deferred tax assets and liabilities recognized in the income statement equal to 1,692 thousand euro.

19. TAX CONSOLIDATION RECEIVABLES/PAYABLES FROM/TO THE CONTROLLING COMPANY

The Italian companies¹⁷ of the Group, until December 31 2014, had joined the national tax consolidation program with S.G.G. Holding S.p.A. as consolidating company and the associated tax balance accrued up to that date but not yet paid was included in the item "Tax consolidation receivables from the Controlling Company". This receivable collectable after the end of the year has been classified among non-current assets.

The reduction of this receivable compared to December 31, 2014 (-299 thousand euro) was mainly due to the transfer of the IRES tax surplus resulting from the CNM 2015 statement (related to the fiscal year 2014) by the consolidating company S.G.G. Holding S.p.A. to SAES Getters S.p.A.; the latter used the credit received in compensation of the debts towards the Treasury due for other taxes and social security contributions, in accordance with Article 17 of the Legislative Decree no. 241 dated July 9, 1997.

On May 27, 2015, following the decrease of the stake of S.G.G. Holding S.p.A. in SAES Getters S.p.A. below the threshold of 50%, the prerequisite to access to the tax consolidation program with S.G.G. Holding S.p.A. as consolidating company ended, as envisaged by the combined provisions of articles 117 and 120 of the Income Tax Code ("TUIR"). The option to join a new tax consolidation program between the Italian companies of the Group with the Parent Company as consolidator has been exercised on September 30, 2015. This new tax consolidation will be valid starting from January 1, 2015. Since this new tax consolidation showed a tax loss as at December 31, 2015, SAES Getters S.p.A., SAES Nitinol S.r.l. and E.T.C. S.r.l. recognized as income the taxes on income (IRES) corresponding only to the taxable income generated by SAES Advanced Technologies S.p.A. and recoverable with the consolidation mechanism, while, prudently, the deferred taxes on the fiscal losses exceeding this amount have not been recognized. Following this, the new tax consolidation showed a net balance equal to zero, since receivables and payables were offset.

20. FINANCIAL RECEIVABLES FROM RELATED PARTIES

The item "Financial receivables from related parties" amounted to 1,155 thousand euro as at December 31, 2015 and included the two interest-bearing loans granted during the previous year by the subsidiary SAES Nitinol S.r.l. to Actuator Solutions GmbH.

The share whose repayment by the joint venture is expected within one year was included in the current assets, while the remaining portion was classified as non-current asset.

The related details are provided in the table below.

Description	Currency	Principal (thousands of euro)	Timing of capital reimbursement	Interest rate	Accrued interests during the year 2015 (thousands of euro)	Value as at December 31, 2015 (*) (thousands of euro)	Value as at December 31, 2014 (*) (thousands of euro)
Loan granted in February 2014	EUR	1,500	flexible, with maturity date December 2016 (***)	6% annual	86	86	1,551
Loan granted in October 2014	EUR	1,200	flexible, with maturity date April 2018 (**)	fixed rate	69	1,069	1,211
Total		2,700			155	1,155	2,762

(*) Interests included. (**) Extendable on an annual basis.

(***) Repaid in advance of the contractual due date in December 2015.

The loan granted in February 2014 was fully repaid in December 2015, in advance of the contractual due date. The related interest costs accrued during the 2015, will be paid by the joint venture in the first quarter of 2016, and, therefore, were classified as current assets.

¹⁷ SAES Getters S.p.A., SAES Advanced Technologies S.p.A., SAES Nitinol S.r.l. and E.T.C. S.r.l.

Instead, the loan granted in October 2014 was still be partially opened as at December 31, 2015. Since the repayment is monthly for fixed principal amounts equal to 33 thousand euro, 400 thousand euro were classified as current assets, while the remaining 600 thousand euro were recorded as non-current. Again, the interests relating to 2015 will be paid within the first quarter of 2016 and fall within the current portion of the financial receivable in question.

21. OTHER LONG TERM ASSETS

The item "Other long term assets" amounted to 456 thousand euro as at December 31, 2015, compared to 917 thousand euro as at December 31, 2014 and includes the caution money given by the companies of the Group for their operating activities.

Please note that, as at December 31, 2014, the item also included the advance payment in dollars of the Parent Company towards Cambridge Mechatronics Limited (CML), amounting to 491 thousand euro; this receivable, which was considered no longer recoverable, has been written-off during the first semester 2015 and the decrease of this item compared to December 31, 2014 was mainly attributable to this transaction.

22. INVENTORY

Inventory amounted to 32,534 thousand euro as at December 31, 2015, with a increase of 2,815 thousand euro compared to December 31, 2014.

The following table shows the breakdown of inventory as at December 31, 2015 and December 31, 2014.

(thousands of euro)
Inventory	December 31, 2015	December 31, 2014	Difference
Raw materials, auxiliary materials and spare parts	13,856	14,585	(729)
Work in progress and semi-finished goods	14,682	11,318	3,364
Finished products and goods	3,996	3,816	180
Total	32,534	29,719	2,815

Excluding the positive exchange rate effect (equal to +2,769 thousand euro) mainly related to the US dollar revaluation, the inventory was substantially in line with the previous year (increase equal to 46 thousand euro): the decrease in the raw materials stock, due to an improved timing in the management of the Group's supplies, particularly at the subsidiary SAES Advanced Technologies S.p.A., was offset by the growth of the work in progress volumes in the pure gas handling business and in that of shape memory alloys, that were necessary to meet the increasing orders of products with delivery planned in the first months of 2016.

Inventory is stated net of any provision for depreciation, which, during the 2015, recorded the changes shown in the table below.

(thousands of euro)
---------------------	--	--

Inventory provision
	December 31, 2014	3,929
Accrual		1,460
Release into income statement		(237)
Utilization		(584)
Translation differences		293
	December 31, 2015	4,861

The accrual (+1,460 thousand euro) was mainly related to the write-down of the SMA semifinished products/devices and of the raw materials/work in progress products to be used in the lamps business, characterized by slow-moving or no longer used in the production process.

The utilization (-584 thousand euro) was a consequence of the scrapping of some items already written-down in the previous years, in particular by the subsidiary SAES Advanced Technologies S.p.A.

23. TRADE RECEIVABLES

Trade receivables, net of bad debt provision, were equal to 23,366 thousand euro as at December 31, 2015 and were up by 3,356 thousand euro compared to the previous year.

The increase was mainly due to the exchange rate effect (about 2.1 million euro) as well as the growth recorded by the turnover in the last part of the year 2015, compared to the last months of the previous year, especially in the business of purification and in that of shape memory alloys.

The breakdown of the item is shown in the following table.

(thousands of euro)
Trade receivables	December 31, 2015	December 31, 2014	Difference
Gross value	23,695	20,307	3,388
Bad debt provision	(329)	(297)	(32)
Net book value	23,366	20,010	3,356

Trade receivables do not bear interests and generally are due after 30-90 days.

The bad debt provision showed the following changes during the year.

Bad debt provision	December 31, 2015	December 31, 2014
Opening balance	297	219
Accrual	54	80
Release into income statement	0	0
Utilization	(51)	(35)
Translation differences	29	33
Closing balance	329	297

(thousands of euro)

The accrual (+54 thousand euro) was mainly related to the write-down of some trade receivables of the Chinese subsidiary SAES Getters (Nanjing) Co., Ltd., estimated as not recoverable by the management.

The following table provides a breakdown of the trade receivables by those not yet due and past due as at December 31, 2015 compared with the previous year.

(thousands of euro)
Ageing	Total	Not yet due			Due not written down			Due written
			< 30 days	30 - 60 days	60 - 90 days	90 - 180 days	> 180 days	down
December 31, 2015	23,695	18,236	3,325	748	603	366	88	329
December 31, 2014	20,307	16,066	2,886	761	147	129	21	297

Receivables past due more than 30 days and not written down, as deemed to be recoverable, represent an insignificant percentage when compared to the total trade receivables and they are constantly monitored. The increase of this percentage compared to the previous year (from 5% to 8%) was mainly due to some specific receivables of the subsidiary SAES Pure Gas, Inc., the collection of which was finalized in early 2016.

Please refer to the Note no. 39 for the credit risk on trade receivables, in order to understand how the Group detects and manages the credit quality, in case the related trade receivables are neither past due nor written down.

24. PREPAID EXPENSES, ACCRUED INCOME AND OTHER

This item, which includes current non-trade receivables from third parties, along with prepaid expenses and accrued income, showed a balance of 10,593 thousand euro as at December 31, 2015, compared to 9,697 thousand euro as at December 31, 2014.

A breakdown of this item is provided below.

(thousands of euro)
Prepaid expenses, accrued income and other	December 31, 2015	December 31, 2014	Difference
Income tax and other tax receivables	1,661	1,050	611
VAT receivables	5,816	5,694	122
Social security receivables	398	437	(39)
Personnel receivables	109	105	4
Receivables for public grants	714	640	74
Other receivables	153	142	11
Total other receivables	8,851	8,068	783
Accrued income	24	5	19
Prepaid expenses	1,718	1,624	94
Total prepaid expenses and accrued income	1,742	1,629	113
Total prepaid expenses, accrued income and other	10,593	9,697	896

The item "Income tax and other tax receivables" includes the receivables for advance corporation taxes and other tax credits of the Group's companies with local authorities. The increase compared to the previous year was mainly due to some tax credits claimed by the US subsidiaries and arose from the restatement of the previous year taxes made in 2015.

The slight increase in "VAT receivables" is due to the fact that the credit generated during the 2015, due to the excess of passive taxable transactions compared to active ones, was greater than the credit generated in previous years has been repaid or used to offset other taxes and contributions. With this regard, please note that, on October 29, 2015, the Parent Company has obtained a refund of the VAT credit for the year 2012 equal to 1,667 thousand euro.

The decrease in "Social security receivables" compared to December 31, 2014 was due to the lower use of social security provisions by the subsidiary SAES Advanced Technologies S.p.A. in the last quarter of the current year compared to the last part of the previous year.

Please note that the item "Receivables for public grants" is mainly composed of credits matured by the Parent Company and by the subsidiary E.T.C. S.r.l. as of December 31, 2015 as a result of contributions for outstanding research projects.

In 2015, income from government grants amounted to 300 thousand euro (409 thousand euro in the previous year).

The increase in the item "Prepaid expenses" compared to December 31, 2014 was mainly due to all the cost items (particularly, maintenance costs and assurance costs) which are paid in advance in the current year, but which refer to the following year.

Please note that there are no receivables due after more than five years.

25. CASH AND CASH EQUIVALENTS

The following table shows a breakdown of this item as at December 31, 2015 and December 31, 2014.

(thousands of euro)
Cash and cash equivalents	December 31, 2015	December 31, 2014	Difference
Bank accounts	24,021	25,583	(1,562)
Petty cash	23	19	4
Total	24,044	25,602	(1,558)

The item "Bank accounts" consists of short-term deposits with some leading financial institutions, denominated primarily in US dollars and euro.

The item includes the liquid funds mainly held by the US subsidiaries and by the Parent Company for the cash flow management necessary for their operating activities.

For the analysis of the changes occurred in cash and cash equivalents during the year please refer to the comments on the Cash flow statement (Note no. 38).

As of December 31, 2015, the Group has unused credit lines equal to 40.0 million euro compared to 26.9 million euro as of December 31, 2014.

The increase was mainly the result of the reduced use by the Parent Company of short-term debt in the form of "hot money", whose lines of credit are still available, following the signing of new medium-long term loans during the year.

26. OTHER FINANCIAL RECEIVABLES FROM THIRD PARTIES

The item "Other financial receivables from third parties" was equal to 151 thousand euro as at December 31, 2014 and it referred to the fixed deposit, for a period of 12 months, held by the subsidiary SAES Getters Korea Corporation and expired in April 2015. Please note that as at December 31, 2015 the Group has no time deposits with initial maturity longer than three months.

27. SHAREHOLDERS' EQUITY

The Group shareholders' equity amounted to 126,485 thousand euro as at December 31, 2015, with an increase of 13,800 thousand euro compared to December 31, 2014, mainly due to the net income realized in the year (+8,820 thousand euro) and to the exchange rate differences arising from the translation of the financial statements in foreign currencies (+8,500 thousand euro), partially offset by the dividends distribution (3,477 thousand euro). A summary of the changes occurred is provided in the Statement of changes in the shareholders' equity.

Please note that the result of the year included a foreign exchange gain (equal to 1,907 thousand euro) following the release into the income statement of part of the translation reserve generated by the consolidation of SAES Getters (Nanjing) Co., Ltd. and SAES Getters Korea Corporation, following the partial reduction of the share capital of the two Asian subsidiaries.

Capital stock

As at December 31, 2015 the capital stock, fully subscribed and paid-up, amounted to 12,220 thousand euro and consisted of no. 14,671,350 ordinary shares and no. 7,378,619 savings shares, for a total of no. 22,049,969 shares.

The composition of the capital stock was unchanged compared to December 31, 2014.

The implicit book value per share was 0.554196 euro as at December 31, 2015, unchanged from December 31, 2014.

Please refer to the Report on corporate governance and ownership structure for all of the information required by article 123-bis of the Consolidated Finance Act (TUF).

All the Parent Company's securities are listed on the segment of the Mercato Telematico Azionario known as "STAR" (Securities with High Requirements), dedicated to small and medium caps that meet specific requirements with regard to reporting transparency, liquidity and corporate governance.

Share issue premium reserve

This item includes amounts paid by the shareholders in excess of the par value for new shares of the Parent Company subscribed in capital issues.

This item was unchanged compared to December 31, 2014.

Legal reserve

This item corresponds to the Parent Company's legal reserve of 2,444 thousand euro as at December 31, 2015 and it was unchanged compared to December 31, 2014, since the reserve had reached its legal limit.

Other reserves and retained earnings

This item includes:

• the reserves (totalling 2,615 thousand euro) represented by the positive monetary revaluation balances resulting from the application of Law no. 72 of March 19, 1983 (1,039 thousand euro) and Law no. 342 of November 21, 2000 (1,576 thousand euro) by the Italian companies of the Group. Pursuant to Law no. 342 of 2000, the revaluation reserve has been stated net of the related lieu tax of 370 thousand euro;

• the other reserves of subsidiaries, the retained earnings, and other shareholders' equity items of the companies of the Group which were not eliminated during the consolidation process.

The change in the item "Other reserves and retained earnings" includes the distribution to the shareholders of the 2014 dividends, approved by the Parent Company's Shareholders' Meeting (3,477 thousand euro), the carry forward of the 2014 consolidated income equal to 4,836 thousand euro and the actuarial gains and losses on defined benefit plans arising from the application of the revised version of IAS 19, net of the related fiscal effect (-43 thousand euro).

As reported in the Report on corporate governance and ownership enclosed to the Consolidated financial statements, each share is entitled to a proportional part of the net income that it is decided to distribute, except the rights attached to savings shares.

More specifically, as described in article no. 26 of the By-laws, savings shares are entitled to a preferred dividend equal to 25% of their implied book value; if, in one financial year, a dividend of less than 25% of the implied book value has been allocated to savings shares, the difference will be made up by increasing the preferred dividend in the following two years. The remaining income that the Shareholders' Meeting has resolved to distribute will be allocated among all shares in such a way to ensure that savings shares are entitled to a total dividend that is 3% of the implied book value higher than that of ordinary shares. In case of distribution of reserves, shares have the same rights irrespective of the category to which they belong.

Other components of the shareholders' equity

This item includes the exchange rate differences arising from the translation of financial statements in foreign currencies. The translation reserve had a positive balance of 19,055 thousand euro as at December 31, 2015, compared to a positive balance of 10,555 thousand euro as at December 31, 2014. The increase of 8,500 thousand euro was due both to the overall impact on the consolidated shareholders' equity of the conversion into euro of the financial statements of foreign subsidiaries expressed in currencies other than the euro and the respective consolidation adjustments (10,458 thousand euro), and to the share of the Group in the currency translation reserve arising from the consolidation of Actuator Solutions Taiwan Co., Ltd. into Actuator Solutions GmbH, both accounted for using the equity method (-51 thousand euro). Finally, please note the release into the income statement of part of the translation reserve generated by the consolidation of SAES Getters (Nanjing) Co., Ltd. (-1,877 thousand euro) and of part of the translation reserve generated by the consolidation of SAES Getters Korea Corporation (-30 thousand euro), following the partial reduction of the share capital of the two Asian subsidiaries.

Please note that the Group exercised the exemption allowed under IFRS 1 - First-time adoption of International Financial Reporting Standards, regarding the possibility of writing-off the accumulated translation gains or losses generated by the consolidation of foreign subsidiaries as of January 1, 2004. Consequently, the translation reserve includes only the translation gains or losses generated after the date of transition to IASs/IFRSs.

The reconciliation between the net income and the shareholders' equity of SAES Getters S.p.A. and the consolidated net income and the consolidated shareholders' equity as at December 31, 2015 and December 31, 2014 is set out below.

		December 31, 2015	December 31, 2014
(thousands of euro)	Net income	Shareholders' equity	Net income	Shareholders' equity
SAES Getters S.p.A. - Parent Company	5,859	69,716	1,477	67,799
Shareholders' equity and net result of consolidated subsidiaries, net
of dividends distribution and write-downs of investments in share	6,167	167,184	4,953	164,305
capital
Book value of investments in share capital		(100,857)		(112,700)
Consolidation adjustments:
Elimination of profit arising from intercompany transaltions, net of the related tax effect	(485)	(1,157)	197	(1,092)
Accrual of deferred taxes on equity distributable of consolidated	(872)	(3,044)	(184)	(2,172)
subsidiaries
Equity evaluation of joint venture	(1,843)	(5,024)	(1,286)	(3,130)
Other adjustments	(6)	(333)	(321)	(325)
Consolidated financial statements	8,820	126,485	4,836	112,685

28. FINANCIAL DEBTS

As at December 31, 2015, the financial debts amounted to 34,155 thousand euro, with an increase of 12,776 thousand euro compared to December 31, 2014.

This increase was due to the new medium-long term financings signed during the year by the Parent Company and by the subsidiary Memry Corporation (for a total amount equal to about 19.3 million euro), in order to have a correct balance of the financial indebtedness, with a higher percentage of medium-long term loans, compared to short-term bank debt. To the subscription of the new loans, it must be added the fluctuations of the exchange rates which, as at December 31, 2015, generated an increase in the Group's financial debt equal to 1.6 million euro: almost 35% of the Group's financial debt is represented by loans denominated in US dollars, held by the subsidiary Memry Corporation, whose equivalent amount in euro has increased following the revaluation of the US dollar as at December 31, 2015 compared with the end of the previous year. These increases were partially offset by the repayments of the principal amounts made during the year and equal to about 8.3 million euro.

The following table shows the breakdown of the financial debt by contractual maturity.

Please note that the debt with a maturity of less than one year is included under current liabilities among the "Current portion of medium/long term financial debts".

Financial debt	December 31, 2015	December 31, 2014	Difference
Less than 1 year	7,136	6,690	446
Current portion of financial
debt	7,136	6,690	446
Between 1 and 2 years	7,151	7,330	(179)
Between 2 and 3 years	7,111	4,594	2,517
Between 3 and 4 years	7,152	1,400	5,752
Between 4 and 5 years	4,793	1,365	3,428
Over 5 years	812	0	812
Non current financial debt	27,019	14,689	12,330
Total	34,155	21,379	12,776

(thousands of euro)

The following table shows the details of the loans which were already signed as at December 31, 2014.

Description	Currency	Principal	Timing of capital reimbursement	Timing of covenants calculation	Interest rate	Effective interest rate	Value as at December 31, 2015 (thousands of euro)
Memry Corporation Amortising Loan	USD	11.0 (millions of USD)	half-yearly with maturity date December 31, 2020	Half -yearly	six-months USD Libor plus 2.70% spread (*)	3.53%	10,105
SAES Getters S.p.A.	EUR	7.0 (millions of euro)	quarterly with maturiry date December 31, 2019	Half-yearly	three-months Euribor plus 2.25% spread	2.57%	5,578

(*) The spread will be reduced to 2.20% in case the ratio between the net financial position and the EBITDA of Memry Corporation is lower than 1.50.

Please note that the loan held by Memry Corporation has been the subject to an agreement between the US company and the financing institution with the aim of revising it repayment plan.

In particular, with reference to the loan subscribed by Memry Corporation in January 2009 and divided into two lines ('amortizing loan' and 'bullet loan') for a total value of 11 million USD, which had to be totally reimbursed within July 2017, on December 22, 2015 the US subsidiary signed an agreement with the financing institution, effective from December 31, 2015, in order to reschedule such repayment; in particular, the residual amount of both lines was converted into a loan of the same amount (11 million USD) with a duration of 5 years, with a repayment plan consisting in six-month fixed tranches (starting from June 30, 2016 until December 31, 2020) equal to 1.1 million USD each. Interests will be paid every six months and benchmarked to the Libor rate, plus a spread equal to 2.70% (such spread will be reduced to 2.20% in case the ratio between the net financial position and the EBITDA of Memry Corporation is lower than 1.50). A new set of covenants has also been defined, still to be calculated every six months, based not on consolidated figures, but on the economic and financial figures of Memry Corporation only.

On May 31, 2015 the last instalment of the loan (equal to 1,373 thousand euro as at December 31, 2014) held by SAES Smart Materials, Inc., was repaid, according to the repayment plan.

The details of the new loans signed in 2015 are described below.

On February 20, 2015 the first tranche, equal to 2 million USD, of the soft financing granted by the State of Connecticut, for a total amount equal to 2.8 million USD, was paid to Memry Corporation. This loan, which has a duration of ten years and an annual subsidized fixed interest rate of 2%, will be used to purchase new machinery and equipment in order to expand the production plant in Bethel. The agreement provides for a monthly repayment, according to a French amortization schedule with increasing principal amounts. 50% of the financing might be converted into a nonrefundable grant provided that, by November 2017, Memry Corporation increases its staff of at least 76 employees in Bethel and has kept the created jobs for at least one year, in addition, the employees in Bethel will have to earn an average annual salary of not less than a specific threshold established by the agreement. If the labour force increased of a number of units between 38 and 76 by the due date, the grant would be halved. Currently there is no basis for the recognition of this income, since the achievement of the above objectives is not certain.

Description	Currency	Principal	Timing of capital reimbursement	Timing of covenants calculation	Interest rate	Effective interest rate	Value as at December 31, 2015 (thousands of euro)
Memry Corporation Soft financing granted by the State of Connecticut	USD	2.0	monthly with maturity date March 1, 2025	n.a.	2%	2%	1,684

On May 29, 2015 the Parent Company received from EIB (European Investment Bank) a 10 million euro loan to support R&D projects in the field of vacuum technologies, shape memory alloys (SMAs) and Organic Light Emitting Transistor (OLET) solutions. The medium-term loan consists of two tranches of the same amount, one secured by SACE, it has a five-year term and it is part of the Horizon 2020 Program, aimed at supporting research and technology development projects, with the financial backing of the European Union. The loan will be used to cover part of a research program for a total value of 45 million euro to be carried out in Italy, started in 2014 and that will end in 2017.

The agreement provides for the reimbursement of the principal in half-yearly installments and, simultaneously, the payment of interests. The latter are calculated based on the six-month Euribor plus a year-based 2.997 basis points for the first tranche; on the second tranche, secured by SACE, the Parent Company will pay an interest indexed to the six-month Euribor to EIB, plus a 3% running remuneration to SACE. The effective interest rate as at December 31, 2015 was equal to 4.67% and 4.75%, respectively for the first and the second tranche. The upfront fee and the transaction costs included in the calculation of the effective interest rate totaled 399 thousand euro. The loan provides for the compliance with some financial covenants standard for transactions of this kind, calculated semi-annually on Group's economic and financial figures.

Description	Currency	Principal	Timing of capital reimbursement	Timing of covenants calculation	Interest rate	Effective interest rate	Value as at December 31, 2015 (thousands of euro)
SAES Getters S.p.A. EIB - Tranche A	EUR	5.0	half-yearly		Six-months Euribor	4.67%	4,359
EIB - Tranche B (secured by SACE)	EUR	5.0	with maturity date May 29, 2020	Half-yearly	plus 2.997% spread Six-months Euribor plus 3% running remuneration to SACE	4.75%	4,347

Finally, as already mentioned, on July 24, 2015 the Parent Company signed with Intesa Sanpaolo S.p.A. a new multitranche loan for a total value of 11 million euro. This loan is composed by two tranches with different characteristics with regards to the amount, the timing, the capital reimbursement and the spreads applied:

• an "amortizing" tranche, amounting to 8 million euro, the repayment of which is established in semi-annual fixed principal amounts with the final maturity date on July 31, 2020; the interest rate applied is indexed to the six months Euribor, plus a spread of 2.25%;

• a "revolving" tranche, worth 3 million euro and maturity date on July 24, 2018, with withdraws and repayments for periods of 1,2 and 3 months based on the operational needs of the Parent Company; the interest rate applied is indexed to the six months Euribor, plus a spread of 2%.

The loan provides for the activation of financial covenants, calculated on consolidated figures and verified every year.

Description	Currency	Principal	Timing of capital reimbursement	Timing of covenants calculation	Interest rate	Effective interest rate	Value as at December 31, 2015 (thousands of euro)
SAES Getters S.p.A. Tranche Amortising	EUR	8.0	half-yearly with maturity date July 31, 2020		Six-months Euribor plus 2.25% spread	2.74%	8,002
Tranche Revolving	EUR	3.0	used according to the operational needs with maturity date July 24, 2018	yearly	Six-months Euribor plus 2% spread (or 0.7% if not used)	0.7% because not used	0

Please note that on September 25, 2015, SAES Getters S.p.A. signed an IRS (Interest Rate Swap) contract on the first amortising tranche with a notional value of 3.6 million euro expiring on July 31, 2020, that provides for the exchange of the six months Euribor with a fixed rate of 0.285%. For the IRS enhancement as at December 31, 2015 please refer to the Note no. 35.

Covenant

All the loans held by the Parent Company are subject to the compliance with covenants calculated on some Group's economic and financial figures and verified every semester (on June 30 and December 31 of each year) or annually (on December 31).

As showed in the table below, as at December 31, 2015, all the covenants were met.

			loan with a notional value of 7 million euro (*)	loan EIB with a notional value of 10 million euro (**)	tranche amortizing with a notional value of 8 million euro (***)
		Covenants	Value as at December 31, 2015	Value as at December 31, 2015	Value as at December 31, 2015
Net equity	k euro	> 94,000	126,485	126,485	n.a.
Net financial position Net equity	%	< 1.0	0.15	0.15	0.14
Net financial position EBITDA	%	< 2.5	0.61	0.63	0.57
Total financial debt of the subsidiaries	k euro	< 25,000	n.a.	13,869	n.a.
EBITDA Financial expenses	%	> 5	n.a.	n.a.	16.51

(*) Net financial position calculated excluding financial receivables from related parties and receivables (payables) for derivative financial instruments evaluated at fair value; adjusted EBITDA, net of non recurring items.

(**) Calculated excluding financial receivables from related parties and receivables (payables) for derivative financial instruments evaluated at fair value.

(***) Net financial position calculated excluding receivables (payables) for derivative financial instruments evaluated at fair value; adjusted EBITDA, net of non recurring items.

Instead, with regard to the loans held by Memry Corporation, please note that the soft financing granted by the State of Connecticut is not subject to the compliance with any covenant, while the amortizing loan financing provide for the compliance with the warranty provisions calculated on some economic and financial figures of the US company (instead of consolidated ones) and verified every semester (on June 30 and December 31 of each year).

The following table shows that all covenants were met at the reporting date.

		Covenants	Value as at December 31, 2015
Net financial position (°) Net equity	%	< 1.0	0.12
Net financial position (°) EBITDA	%	< 2.25	0.66

(°) Net financial position calculated excluding financial receivables from other Group's companies.

On the basis of the future plans, the Group is expected to be able to comply with the covenants reported above also in the next years.

29. OTHER FINANCIAL DEBTS TOWARDS THIRD PARTIES

As at December 31, 2015, the item "Other financial debts towards third parties" was equal to 3,290 thousand euro, compared to 3,396 thousand euro as at December 31, 2014, and it was split in a long-term portion (1,355 thousand euro, to be compared with 1,328 thousand euro) and a shortterm portion (1,935 thousand euro, to be compared with 2,068 thousand euro).

The decrease compared to December 31, 2014 (-106 thousand euro) was mainly due to the reduction of the financial debt towards the US company Power & Energy, Inc. related to the amount still to be paid for the acquisition completed in the hydrogen purification business, following the payments made as envisaged by the contract (1,884 thousand euro¹⁸).

Please note that, following the revaluation of the dollar as at December 31, 2015 compared to December 31, 2014, the residual debt towards Power & Energy, Inc. has increased by 345 thousand euro; the adjustment made by applying the amortized cost in the calculation of the present value of the payments still to be paid has instead generated an increase of that debt of 129 thousand euro.

¹⁸ This amount includes the payment of both the third and final tranche of the fixed fee (1,622 thousand euro) and the earn-out for the year 2015 (262 thousand euro).

The aforementioned decrease was partially offset by the inclusion of the financial debt (amounting to 1,284 thousand euro) related to the commitment of the Parent Company to acquire the remaining 39% of the share capital of the joint venture SAES RIAL Vacuum S.r.l. within January 2016; for more information on the acquisition, please refer to the Note no. 17.

The item "Other financial debts towards third parties" included also 57 thousand euro of a residual debt resulting from the acquisition, finalized in 2008, of the subsidiary Memry Corporation. In 2008 the price for the acquisition of the company was paid to a financial broker. During 2011 the brokerage mandate came to maturity and the consideration related to the shares not collected was paid to the state of Delaware (USA). In 2012 the latter paid back part of the amount to the US subsidiary, because it didn't fall within its jurisdiction. Memry Corporation must pay this amount to other US states, according to the residence of the previous holders of the shares.

Finally, this item includes the financial debt, equal to 51 thousand euro, related to the costs for the repayment plan revision of the loan held by the US subsidiary Memry Corporation (for further details please refer to the Note no. 28), as well as the debts related to the finance lease contracts signed during the previous years by Memry Corporation (8 thousand euro as at December 31, 2015).

The table below shows the future minimum payments related to these finance lease contracts.

(thousands of euro)
		December 31, 2015 December 31, 2014
Less than 1 year	8	16
Between 1 and 5 years	0	7
Over 5 years	0	0
Total	8	23

30. STAFF LEAVING INDEMNITIES AND OTHER EMPLOYEE BENEFITS

Please note that this item includes liabilities to employees under both defined-contribution and defined-benefit plans existing in the companies of the Group in accordance with the contractual and legal obligations in place in the various countries.

The following table shows a breakdown of this item and the related changes occurred during the period.

Staff leaving indemnities and other employee benefits	Staff leaving indemnities	Other employee benefits	Total
December 31, 2014	4,705	2,720	7,425
Accrual (release)	82	955	1,037
Indemnities paid	(51)	(23)	(74)
Other changes	62	(713)	(651)
Translation differences	0	119	119
December 31, 2015	4,798	3,058	7,856

(thousands of euro)

The amounts recognized in the income statement may be broken down as follows.

(thousands of euro)	2015	2014
Financial expenses	122	188
Current service cost	952	468
Release into the statement of profit (loss)	0	0
Expected return on plan assets	0	0
Recognized past service costs	(37)	0
Total cost	1,037	656

Starting from January 1, 2015 the tax on the revaluation of the staff indemnity leave has been increased from 11% to 17%, and this change has generated a positive past service cost on the income statement equal to 37 thousand euro in 2015.

The split between the obligations under defined-contribution and defined-benefit plans and the related changes occurred during the year 2015 are shown below.

(thousands of euro)
	December 31, 2014	Financial expenses	Current service cost	Benefits paid	Actuarial gains (losses)	Other changes	Recognized past service costs	Exchange differences	December 31, 2015
Present value of defined benefit obligations	6,591	122	883	(74)	21	(672)	(37)	22	6,856
Fair value of plan assets	0	0	0	0	0	0	0	0	0
Costs non yet recognized deriving from past obligations	0	0	0	0	0	0	0	0	0
Defined benefit obligations	6,591	122	883	(74)	21	(672)	(37)	22	6,856
Defined contribution obligations	834	0	69	0	0	0	0	97	1,000
Staff leaving indemnities and similar obligations	7,425	122	952	(74)	21	(672)	(37)	119	7,856

The item "Actuarial gains (losses)" refers to the differences on the amounts due for defined benefit plans resulting from the actuarial calculation, which are immediately recognized in the shareholders' equity among the retained earnings.

The item "Other changes" refers to the share of the long term monetary incentive plans which will be paid during the first half of 2016 and whose amount was, therefore, reclassified into the item "Other payables" to employees. For further details on this item, please refer to the following paragraphs.

Please note that, when referred to the Group's Italian companies, the staff leaving indemnity consists of the obligation, estimated according to actuarial techniques, related to the sum to be paid to the employees of the Italian companies when employment is terminated.

Following the entry into force of the 2007 Budget Act and associated implementation decrees, the liability associated with past years staff leaving indemnity continues to be considered a definedbenefit plan and is consequently measured according to actuarial assumptions. The portion paid to pension funds is instead considered a defined-contribution plan and therefore it is not discounted.

The obligations under defined-benefit plans are measured by independent actuarial consultants annually according to the projected unit credit method, applied to each plan separately.

The following table shows the main assumptions employed in the actuarial assessments of the defined-benefit plans as at December 31, 2015 and December 31, 2014, respectively.

		Italy
		December 31, 2015		December 31, 2014
Average duration of the employees subject to actuarial evaluation	> 10 years	7-10 years	1-3 years	> 10 years
Discount rate	2.00%	1.35%	0.24%	2.00%
Inflation rate	1.50%			1.50%
Expected annual salary increase rate (*)	3.50%			3.50%

(*) Factor not considered in the actuarial appraisal of the staff leaving indemnity of SAES Getters S.p.A. and SAES Advanced Technologies S.p.A., both companies with more than 50 employees.

Please note that, regarding the choice of the discount rate, the reference index used is the one for the Eurozone Iboxx Corporate AA, with a term consistent with the average financial duration of the collective being evaluated at the end of 2015.

With reference to the demographic assumptions, the ISTAT 2004 mortality tables and the INPS disability/invalidity tables were used.

With regards to the probability of employees leaving for reasons other than death, we have used employee turn-over probabilities consistent with previous assessments and identified in the companies being evaluated over a representative period of observation. In particular, an average turnover rate equal to 2% was used.

The item "Other employee benefits" includes the provision for long-term incentive plans, signed by the Executive Directors and by some employees of the Group identified as particularly important for the achievement of the medium to long term corporate objectives. The three-year plans provide for the recognition of monetary incentives proportional to the achievement of specific personal and Group's objectives.

The aim of these plans is to further strengthen the alignment over time of individual interests to corporate interests and, consequently, to the shareholders' interests. The final payment of the longterm incentive is always subject to the creation of value in a medium to long-term period, rewarding the achievement of performance objectives over time. The performance review is based on multi-year indicators and the payment is always subject, in addition to maintaining the employer-employee relationship with the company for the duration of the plan, also to the presence of a positive consolidated income before taxes at the expiry date of the plan.

Such plans fall into the category of defined-benefit obligations and therefore were discounted. The discount rates used, reflecting the rates of return of government bonds, taking into account the different duration of the plans, are shown below.

Year		Discount rate
	Italy	USA
2017	0.02%	1.30%
2018	0.09%	-

The following table shows the breakdown of actuarial differences related to the year 2015.

(thousands of euro)	Staff leaving indemnities	Other defined benefit obligations Italy	Long term incentive plan	Total
Actuarial differences:
Changes in financial assumptions	66	26	0	92
Changes in other assumptions (demographic assumptions, remuneration assumptions, etc.)	0	0	0	0
Other	(8)	(63)	0	(70)
Actuarial gains (losses)	58	(37)	0	21

With regards to defined-benefit plans, the following table shows the effect of an increase or a decrease of half a percentage point in the discount rate on the obligation, as calculated by the independent actuarial consultant.

(thousands of euro)		Discount rate
	+0.5%	-0.5%
Effect on the defined benefit obligation	(173)	183

The following table shows the Group's employees split by category.

Group's employees		December 31, 2015 December 31, 2014	Average 2015	Average 2014
Managers	77	78	78	81
Employees and middle management	370	364	365	361
Workers	515	471	494	453
Total (*)	962	913	937	895

(*) This item does not include the employees of the joint ventures Actuator Solutions and SAES RIAL Vacuum S.r.l., for which please refer to the Note no. 17.

The workforce amounted to 962 units (of which 541 were employed outside of Italy) as at December 31, 2015, and recorded an increase of 49 units compared to December 31, 2014, mainly related to the increase in the workforce engaged in production activities related to the SMA business (in particular, increase in the workforce in Memry Corporation and Memry GmbH) and to the gas purification business.

This figure does not include the personnel employed at the Group companies with contract types other than employment agreements, equal to 42 units (51 units as at December 31, 2014).

31. PROVISIONS

Provisions amounted to 4,344 thousand euro as at December 31, 2015.

The following table shows the composition of and the changes in these provisions compared to the previous year.

(thousands of euro)

Provisions	December 31, 2014	Increase	Utilization	Release into	income statement Reclassifications	Translation differences	December 31, 2015
Warranty provisions on product sold	435	198	(272)	0	24	46	431
Bonus	1,354	2,348	(1,531)	0	(6)	111	2,276
Other provisions	943	690	(43)	0	0	47	1,637
Total	2,732	3,236	(1,846)	0	18	204	4,344

The item "Bonus" includes the accrual of bonuses to the Group's employees related to the year 2015. The change compared to December 31, 2014 was due to both the accrual of bonuses matured during the period and the payment of the bonuses of the previous year, settled during the first half of 2015. The increase compared to December 31, 2014, equal to 922 thousand euro, is aligned with the improvement in the consolidated results.

The increase of the item "Other provisions" was almost exclusively due the accrual (689 thousand euro) by the Parent Company for a litigation for an environmental damage in the US. In particular, following a legal proceeding opened by the State of New York and concerning the compensation for environmental damages and costs for the decontamination of water and the cleaning of the sediments below the Onondaga Lake, located in the US city of Syracuse, the SAES Group, through its subsidiary SAES Getters USA, Inc. (successor in legal matters of SAES Getters America, Inc., formerly owner of a factory in the area of the lake), could be sued for contributing to the compensation for such costs. The amount set aside is the best estimate of the expenditure required to settle the existing obligation at the balance sheet date. This provision has not been discounted since a resolution of the dispute is expected in the short term.

The item "Other provisions" includes 500 thousand euro related to the potential risk estimated in relation to the assessment on the 2005 income tax return of SAES Getters S.p.A.

Particularly, in 2008 the 2005 income tax return of SAES Getters S.p.A. was assessed by the Italian Revenue Agency, as a result of which notices of assessment for IRAP (on July 16, 2010) and IRES (on November 22, 2010) purposes were notified to the Company. The additional assessed corporate taxes amounted to 41 thousand euro (IRAP) and 290 thousand euro (IRES), plus penalties and interests. The Provincial Tax Commission of Milan, to which the Company had appealed, at the end of 2014 confirmed almost entirely (regarding IRES) and partially (regarding IRAP) the findings contained in the notice of inspection while both appeals (IRAP and IRES) against the judgments of the CTP of Milan, discussed by the Regional Tax Commission ("RTC") respectively on October 29, 2015 and on February 22, 2016, were accepted by the RTC with favourable judgements issued on January 20, 2016 (IRAP) and on February 29, 2016 (IRES). However, since the litigation started by the Company has not resulted in definitive judgments, although the course has been in favour of SAES so far, the risk provision of 500 thousand euro was unchanged from the previous year.

The item "Other provisions" also includes the implicit obligations of Spectra-Mat, Inc. in connection with the expenses to be incurred to monitor pollution levels at the site in which it operates (444 thousand euro). The value of this liability has been calculated on the basis of the agreements reached with the local authorities.

A breakdown of provisions by current and non-current portion is provided below.

(thousands of euro)

Provisions	Current provisions	Non current provisions	December 31, 2015	Current provisions	Non current provisions	December 31, 2014
Warranty provisions on product sold	65	366	431	7	428	435
Bonus	2,276	0	2,276	1,354	0	1,354
Other provisions	1,189	448	1,637	500	443	943
Total	3,530	814	4,344	1,861	871	2,732

32. TRADE PAYABLES

Trade payables were equal to 13,675 thousand euro as at December 31, 2015, with an increase equal to 2,628 thousand euro compared to December 31, 2014.

This increase was mainly due to the effect of the appreciation of the US dollar against the euro (about 0.9 million euro), as well as the increase in the purchases made in the last period of the current year, mainly in the shape memory alloys business, in order to meet both the increase in sales in the last quarter of 2015 and the raw material needs for orders to be delivered in the first part of 2016.

Trade payables do not bear interests and are due within twelve months. There are no trade payables in the form of debt securities.

The following table provides a breakdown of trade payables by those not yet due and past due as at December 31, 2015, compared with the previous year.

(thousands of euro)

					Due
Ageing	Total	Not yet due	< 30 days	30 - 60 days	60 - 90 days	90 - 180 days	> 180 days
December 31, 2015	13,675	8,248	2,691	2,046	529	73	88
December 31, 2014	11,047	4,371	4,013	1,443	1,096	104	20

33. OTHER PAYABLES

The item "Other payables" includes amounts that are not classified as trade payables and amounted to 9,203 thousand euro as at December 31, 2015, compared to 7,703 thousand euro as at December 31, 2014.

The table below shows the detail of the other payables, compared with the previous year.

(thousands of euro)
Other payables	December 31, 2015	December 31, 2014	Difference
Employees payables (vacation, wages, staff leaving indemnity, etc.)	4,364	3,887	477
Social security payables	1,476	1,399	77
Tax payables (excluding income taxes)	1,134	1,014	120
Other	2,229	1,403	826
Total	9,203	7,703	1,500

The item "Employees payables" is mainly made up of the provision for holidays accrued but not taken during the year and of the salaries for the month of December 2015.

The increase compared to December 31, 2014 was mainly due to the increase in the staff employed in production activities related to the SMA business, in addition to higher payables related to longterm incentive plans which expired at the end of the year but paid in the first half of 2016.

The item "Social security payables" includes the payables owed by the Group's Italian companies to the INPS (Italy's social-security agency) for contributions to be paid on wages. It also includes payables to the treasury fund operated by the INPS and to the pension funds under the reformed staff leaving indemnity legislation.

The item "Tax payables" primarily consists of the payables owed by the Italian companies to the Treasury in connection with the withholding taxes on the wages of employees and consultants. The increase was aligned with the increase in the employees payables commented previously.

Finally, the item "Other" mainly includes payables of the Parent Company for both fixed and variable Directors' compensations (1,077 thousand euro), for commissions to agents of the purification business (449 thousand euro) and for the down payment on public grants received for research activities (251 thousand euro).

The increase compared to the previous year was mainly due to higher payables for commissions to agents (mainly related to the purification business, following the increase of sales made in the Asian market) and to Executive Directors for variable component of the remuneration for the year.

Please note that there are no payables due after more than five years.

34. ACCRUED INCOME TAXES

This item consists of payables for taxes associated with the Group's foreign subsidiaries and only the IRAP debt of the Italian companies. With reference to the IRES tax, the Italian companies have elected to participate in the national tax consolidation program with the Parent Company as consolidator but, since the latter shows a tax loss, the net debts towards the Treasury was equal to zero as at December 31, 2015, since the negative taxable income was offset by positive ones (please refer to the Note no. 19 for further information).

Accrued income taxes amounted to 1,060 thousand euro as at December 31, 2015 and included the tax obligations accrued in the year, net of advance payments.

The increase compared with December 31, 2014 (673 thousand euro) was mainly due to the higher taxable income of the year.

35. DERIVATIVE FINANCIAL INSTRUMENTS EVALUATED AT FAIR VALUE

As at December 31, 2015 the item "Derivate financial instruments evaluated at fair value" was negative for 22 thousand euro and it represents the fair value of the Interest Rate Swap contract, signed by Parent Company during the year in order to fix the interest rate on the amortising tranche of the loan signed on July 2015.

The IRS, signed on September 25, 2015 with a notional amount of 3.6 million euro, matures on July 31, 2020 and provides for the exchange of the six-month Euribor with a fixed rate of 0.285%.

The following table provides a summary of the contract and its fair value as at December 31, 2015.

	Subscription date	Currency	Notional amount (thousands of euro)	Maturity	Interest rate	Timing	Fair value December 31, 2015 (thousands of euro)
Interest Rate Swap (IRS) September 25, 2015		EUR	3,600	July 31, 2020	Fixed rate paid: 0.285% Variable rate received: six-month Euribor	Half-yearly	22
Total							22

The fair value calculation, carried out by an independent third party, consists of discounting the future cash flows, both sure and estimated ones, using the zero-coupon rates derived from the market base curve. The pricing thus obtained was then corrected, in accordance with IFRS 13, using a component of Credit Value Adjustment (CVA, which is the correction related to the risk of the counterparty default) and of Debt Value Adjustment (DVA, that is the cost of the protection from the risk of default of the Company by the counterparty), calculated using the "Provision Model" method. In particular, for the purpose of determining the counterparty risk component in the fair value, for the calculation of the CVA, the rating issued by the rating agency Standard & Poor's issuer on the issuing financial institution (that is BBB) has been used. In order to determine the DVA, given the impossibility of assigning a rating to the SAES Group, the same rating of the financial institution has been applied.

With regards to such contract, the formal requirements to apply the hedge accounting method are not met, therefore it is evaluated at fair value and the profit or losses deriving from its evaluation are directly charged into the income statement.

No interest rate swap contract was in place as at December 31, 2014.

As can be seen from the table below, as at December 31, 2015 the Group did not have any hedging contract against the exposure to the variability of future cash flows arising from commercial and financial transactions denominated in currencies other than the euro.

		December 31, 2015	December 31, 2014
Currency	Notional	Fair value	Notional	Fair value
	(local currency)	(thousands of euro)	(local currency)	(thousands of euro)
thousands of JPY	0	0	300,000	38
	Total	0	Total	38

Please see the Consolidated financial statements of the prior year for the detail of the forward sale contracts on the Japanese yen as at December 31, 2014.

The Group enters into derivative contracts with various counterparties, primarily leading financial institutions and it uses the following hierarchy to determine and document the fair value of its financial instruments:

Level 1 – (unadjusted) prices listed on an active market for identical assets or liabilities;

Level 2 – other techniques for which all inputs with a significant effect on the fair value reported may be observed, either directly or indirectly;

Level 3 – techniques that use inputs with a significant effect on the fair value reported that are not based on observable market data.

As at December 31, 2015 the only derivative instrument held by the Group belonged to Level 2: in fact, the fair value was calculated by an independent third party on the basis of market data, such as interest rate curves and exchange rates curves.

No instruments were transferred from one level to another during the year.

36. BANK OVERDRAFT

As at December 31, 2015 the bank overdraft amounted to 5,012 thousand euro and primarily consisted of short-term debts owed by the Parent Company in the form of "hot money" debt (5,009 thousand euro as at December 31, 2015 compared to 30,191 thousand euro as at December 31, 2014), whose average interest rate, spread included, was around 1.8%.

The difference consisted in the overdrafts on current bank accounts (3 thousand euro as at December 31, 2015, compared to 531 thousand euro at the end of the year 2014).

The decrease in the short-term bank debt (-25,710 thousand euro) was the result of the activity performed during the year aimed at obtaining a correct balance of the financial indebtedness, with a higher percentage of medium-long term loans, compared to short-term bank debt (for further details please refer to the Note no. 28) as wall as of the net cash flows generated during the year, with the consequent improvement in the consolidated net financial position.

37. ACCRUED LIABILITIES

Accrued expenses and deferred income were equal to 1,548 thousand euro as at December 31, 2015.

This item may be broken down as follows.

Accrued liabilities		December 31, 2015 December 31, 2014	Difference
Accrued expenses	369	289	80
Deferred income	1,179	1,993	(814)
Total	1,548	2,282	(734)

(thousands of euro)

The decrease compared to December 31, 2014 (-734 thousand euro) is mainly explained by lower commercial sales pertaining to future accounting periods received by customers during the current year compared to the previous year.

Please note that there are no accrued liabilities due after more than five years.

38. CASH FLOW STATEMENT

Cash flow from operating activities was positive and equal to 22,851 thousand euro with a strong growth (+63.7%) compared to 13,958 thousand euro in the previous year: the cash-in flows of the 2015 are almost entirely attributable to the self-financing, differently from what happened in the previous year when the self-financing was partially offset by the negative change in the net working capital, influenced by the increase in the volume of activities in the Pure Gas Handling Business and in the SMAs one.

Investing activities used liquidity for 10,017 thousand euro while 2,610 thousand euro was the cash absorption in the 2014.

In the 2015, the disbursements, net of the disposals, for purchases of tangible and intangible assets amounted to 4,903 thousand euro (797 thousand euro¹⁹ as at December 31, 2014). Within the investment activities please note also the disbursement of 1,884 thousand euro for the payment of the last tranche of the fixed amount and of the fees matured during the year related to the investments carried out during 2013 and aimed at the technological strengthening of the Pure Gas Handling business, but for which the payment has been deferred (in 2014 this deferred payment had been equal to 1,813 thousand euro²⁰), as well as the acquisition of the 10% of SAES RIAL Vacuum S.r.l. (consideration paid equal to 330 thousand euro) and the capital contributions made during the year in favor of the joint venture Actuator Solutions GmbH (for a total amount of 2,900 thousand euro).

The balance of financing activities was negative and equal to 16,780 thousand euro against a balance, always negative, of 10,146 thousand euro in the previous year.

The financial management of the period was characterized by the financial disbursements for the payment of dividends (equal to 3,477 thousand euro), by the repayments of both short-term and long-term loans and by the payment of the related interests. These cash-out were partially offset by the cash-in generated by the new long-term loans signed by the Parent Company and by the US subsidiary Memry Corporation (for further details please refer to the Note no. 28) and by the expiration of the time deposit with maturity equal to a period of 12 months, held by SAES Getters Korea Corporation (Note no. 26). Finally, please note the cash-in related to the repayment²¹ of the loan granted to the joint venture Actuator Solutions GmbH as well as the collection of the previous year interests (for further details please refer to the Note no. 20).

The following is a reconciliation of the net cash and cash equivalents shown in the statement of financial position and in the cash flow statement.

(thousands of euro)
	2015	2014
Cash and cash equivalents	24,044	25,602
Bank overdraft	(5,012)	(30,722)
Cash and cash equivalents, net - statement of financial position	19,032	(5,120)
Short term debt	5,009	30,191
Cash and cash equivalents, net - cash flow statement	24,041	25,071

¹⁹ In 2014, the disbursements for purchases of tangible and intangible assets (4,367 thousand euro) were almost completely offset by the proceeds (3,570 thousand euro) deriving from the sale of the plant of SAES Getters (Nanjing) Co., Ltd., including the sale of the land use right and the building, completed at the end of October 2014.

²⁰ This amount included the payment, according to the original contractual maturities, of the second tranche of the fixed consideration and the fees to Power & Energy, Inc. (1,599 thousand euro) and the payment of the final tranche due to Johnson Matthey Inc. (214 thousand euro), both related to the investments aimed at the technological strengthening of the Pure Gas Handling business.

²¹ Total repayment of the loan granted by SAES Nitinol S.r.l. to Actuator Solutions GmbH in February 2014 and partial repayment of the principal amount of the one granted in October 2014.

39. FINANCIAL RISK MANAGEMENT

The Group's main financial liabilities, other than derivatives, include bank loans, both short and long term ones, and trade payables, as well as financial liabilities towards third parties related to the amount still to be paid for the acquisitions made during the 2013 with the aim of strengthening the hydrogen purification business and the commitment for the acquisition a further 39% of the share capital of SAES RIAL Vacuum S.r.l. (of which SAES Getters S.p.A. already owned 10% as at December 31, 2015; for further details please refer to the Note no. 29). The main objective of this liability is to finance the operating activities of the Group and to support future growth (both the organic one and that achieved through external acquisitions).

The Group also holds cash and cash equivalents and short-term deposits immediately convertible into cash as well as trade receivables deriving directly from its operating activities and financial receivables deriving from loans granted to related parties.

The derivative instruments used by the Group were primarily forward foreign currency contracts and Interest Rate Swaps (IRS). The purpose of these instruments is to manage the exchange-rate risk and the interest-rate risk arising from the Group's commercial and financing transactions.

The Group does not deal in financial instruments.

The Board of Directors periodically reviews and sets the policies for managing such risks, as summarized below.

Interest-rate risk

The Group's financial debts, both short and long-term ones, are mainly structured on a variable interest rate basis, therefore they are subject to the risk of interest rate fluctuations.

With regards to long-term financial debts, the exposure to interest rate variations is handled by way of entering into Interest Rate Swap (IRS) agreements, with a view to guarantee a level of financial expenditures which are sustainable by the SAES Group's financial structure.

Please note that, as detailed in the Note no. 35, in order to fix the interest rate on the amortising tranche of the loan signed in late July by SAES Getters S.p.A., an IRS agreement has been signed on a part of such loan on September 25, 2015. The Group also constantly controls the interest rate trend for the possible signing of an Interest Rate Swap to hedge the risk linked to the interest rate fluctuations on the loans on which no hedging contract has been signed.

The funding for the working capital is managed through short-term financing transactions and, as a consequence, the Group does not hedge itself against the interest-rate risk.

Interest-rate sensitivity analysis

The following table provides a sensitivity analysis of the financial assets (cash and cash equivalents, bank deposits and financial receivables towards related parties) related to the impact of changes in interest rates on the income before taxes and the Group's shareholders' equity, assuming that all the other variables remain unchanged.

		(%)	(thousands of euro)	(thousands of euro)
		Increase / Decrease	Effect on result before taxes	Effect on net result and net equity
	euro	+/- 1	+/- 50	+/- 41
2015	other currencies	+/- 1	+/- 193	+/- 145
	euro	+/- 1	+/- 23	+/- 19
2014	other currencies	+/- 1	+/- 175	+/- 138

The following table provides a sensitivity analysis of financial liabilities (both short and long term debts) related to the impact of changes in interest rates on the income before taxes and the Group's shareholders' equity, assuming that all the other variables remain unchanged.

		(%)	(thousands of euro)	(thousands of euro)
		Increase / Decrease	Effect on result before taxes	Effect on net result and net equity
	Euribor	+/- 1	-/+ 333	-/+ 278
2015	Libor	+/- 1	-/+ 131	-/+ 80
	Euribor	+/- 1	-/+ 361	-/+ 311
2014	Libor	+/- 1	-/+ 162	-/+ 99

With regards to Interest Rate Swaps, the table below provides a breakdown of the sensitivity of the income before taxes assuming the stability of all the other variables, following the shift of one percentage point of the spot rate curve (and, consequently, the variation of the forward rate curve associated with the spot rates).

			(euro)	(euro)	(euro)	(euro)
Description	Fair Value Dec 31, 2015 (euro)	fixed rate (%)	Estimated FV +1%	Difference in FV +1%	Estimated FV -1%	Difference in FV -1%
IRS with maturity date July 31, 2020 and notional value equal to 3.6 million euro	(21,767)	0.285%	69,405	91,172	(116,406)	(94,639)
Total	(21,767)		69,405	91,172	(116,406)	(94,639)

Exchange-rate risk

The Group is exposed to the exchange rate risk on foreign commercial transactions.

Such exposure is mainly generated by sales in currencies other than the reference currency: in 2015 around 83.9% of the Group's sales and only around 64.4% of the Group's operating costs were denominated in a currency other than the euro.

In order to manage the economic impact generated by the fluctuations in exchange rates versus the euro, primarily of the US dollar and of the Japanese yen, the Group has in place hedging contracts, whose values are periodically determined by the Board of Directors according to the net currency cash flows expected to be generated by SAES Getters S.p.A. and SAES Advanced Technologies S.p.A. The maturities of the hedging derivatives tend to coincide with the scheduled date of collection of the hedged transactions.

Moreover, the Group can occasionally hedge specific transactions in a currency other than the reference currency, to mitigate the effect of the exchange rate volatility on the profit and loss account, with reference to financial receivables/payables, including intercompany ones, denominated in a currency different from the one used in the financial statements, included those related to the cash pooling (held by the foreign subsidiaries but denominated in euro).

In order to hedge against the risk of exchange rate fluctuations on trade receivables denominated in foreign currencies for the year 2015, the Group signed:

• at the beginning of the year (January 2015) forward contracts on the US dollars for a total notional value of 14.9 million dollars (average forward exchange rate USD/EUR equal to 1.1801);

• at the end of 2014 (October 2014), but to hedging the 2015 trade receivables in yen, forward contracts on the Japanese yen for a total notional value of 300 million JPY (average forward exchange rate YEN/EUR equal to 142.5674);

These contracts were all expired as at December 31, 2015.

Finally, on January 7, 2015 the Group signed two forward sale contracts in euro (for a notional value equal to 8.5 million euro and an average forward exchange rate KRW/EUR equal to 1,307.35) in order to mitigate the exchange rate risk deriving from the fluctuation of the Korean won on the balance of the financial credit in euro that the Korean subsidiary SAES Getters Korea Corporation has with the Parent Company. Also these contracts were expired as at December 31, 2015.

For the hedging contracts on trade receivables in US dollars and yen for the year 2016, signed in January 2016, please refer the section "Subsequent events" of the Group report on operations. Please refer to the same document also for the forward contract signed in January 2016 in order to mitigate the exchange rate risk on the balance of the intercompany financial credit of SAES Getters Korea Corporation.

Exchange-rate sensitivity analysis

Exchange-rate risk – Sensitivity analysis – Trade receivables and payables

The following table provides a sensitivity analysis for the trade receivables and payables outstanding at year-end in terms of the impact of changes in the EUR/USD and EUR/JPY exchange rates on the consolidated income before taxes and Group's shareholders' equity, assuming that all the other variables remain unchanged.

	(%)	(thousands of euro)	(thousands of euro)
US dollar	Increase / Decrease	Effect on result before taxes	Effect on net result and net equity
2015	+ 5% - 5%	(84) 93	(53) 58
2014	+ 5% - 5%	(105) 116	(71) 79
	(%)	(thousands of euro)	(thousands of euro)
Japanese YEN	Increase / Decrease	Effect on result before taxes	Effect on net result and net equity
2015	+ 5% - 5%	(32) 35	(23) 25

Exchange-rate risk – Sensitivity analysis – Cash, cash equivalents and cash pooling account receivables / payables

The following tables provide a sensitivity analysis of cash and cash equivalents and intercompany financial receivables /payables, including cash-pooling, outstanding at year-end, in terms of the impact of changes in exchange rates between the US dollar and euro and other currencies on the Group's income before taxes and Group's shareholders' equity, assuming that all the other variables remain unchanged. This analysis has been conducted as the subsidiaries have both cash and cash equivalents and receivables/payables from/to the Parent Company in euro, whose conversion may result in exchange rate gains or losses.

	(%)	(thousands of euro)	(thousands of euro)
Euro	Increase / Decrease	Effect on result before taxes	Effect on net result and net equity
	+ 5%	31	34
2015	- 5%	(31)	(34)
	+ 5%	414	414
2014	- 5%	(414)	(414)

	(%)	(thousands of euro)	(thousands of euro)
US dollar	Increase / Decrease	Effect on result before taxes	Effect on net result and net equity
	+ 5%	(49)	(46)
2015	- 5%	54	51
	+ 5%	(26)	(24)
2014	- 5%	29	26

Given that all forward contracts were expired as at December 31, 2015, a sensitivity analysis is not provided; with regard to the analysis of the previous year, please refer to the 2014 financial statements.

With reference to the Net Financial Position (NFP), a depreciation of the US dollar by 5% would have had a negative impact of approximately 130 thousand euro on the net financial position as at December 31, 2015, whereas an appreciation of the same currency, always equal to 5%, would have had a positive impact of approximately 144 thousand euro.

	(%)	(thousands of euro)
	Increase /	Effect on Net
	Decrease	Financial
	USD	Position
	+5%	(130)
December 31, 2015	- 5%	144
	+5%	72
December 31, 2014	- 5%	(80 )

Commodity price risk

The Group's exposure to the commodity price risk is usually moderate. The procurement procedure requires the Group to have more than one supplier for each commodity deemed to be critical. In order to reduce its exposure to the risk of price variations, it enters into specific supply agreements aimed at controlling the commodity price volatility. The Group monitors the trends of the main commodities subject to the greatest price volatility and does not exclude the possibility of undertaking hedging transactions using derivative instruments with the aim of neutralizing the price volatility of its commodities.

Credit risk

The Group deals predominantly with well-known and reliable customers: the Sales and Marketing Department assesses new customers' solvency and periodically verifies that credit limit conditions are met.

The balance of receivables is constantly monitored in order to minimize the risk of potential losses, particularly given the current difficult macroeconomic situation.

The credit risk associated with other financial assets, including cash and cash equivalents, is not significant due to the nature of the counterparties: the Group places such assets exclusively in bank deposits held with leading Italian and international financial institutions.

Liquidity risk

This risk can arise from the incapacity to obtain the necessary financial resources to grant the continuity of the Group's operations.

In order to minimize such risk, the Administration Finance and Control Division acts as follows:

• constantly monitors the Group's financial requirements in order to obtain credit lines necessary to meet such requirements;

• optimizes the liquidity management through a centralized management system of available liquidity (cash pooling) in euro which involves nearly all the Group's companies;

• manages the correct balance between short-term financing and medium/long-term financing depending on the expected generation of operating cash flows.

For further information about the Group's financial debts as at December 31, 2015 and about the maturity date of these debts please refer to the Note no.28.

As at December 31, 2015 the Group was not significantly exposed to a liquidity risk, also considering the unused credit lines to which it has access.

Equity management

The objective pursued by the Group's equity management is to maintain a solid credit rating and adequate capital ratios in order to support operations and maximize the value for shareholders. No changes were made to equity management objectives or policies during the year 2015. The Group periodically monitors some performance indicators, such as the debt-to-equity ratio, with the aim of keeping them at low levels in accordance with the agreements undertaken with its lenders.

40. POTENTIAL ASSETS/LIABILITIES AND COMMITMENTS

The guarantees that the Group has granted to third parties are the following ones.

(thousands of euro)
Guarantees	December 31, 2015	December 31, 2014	Difference
Guarantees	20,119	23,275	(3,156)

The decrease compared to the previous year was mainly explained by the partial expiration of some guarantees provided by the Parent Company to secure the loans undertaken by some foreign subsidiaries, consistent with the repayment of the principal amounts during the year, only partially offset by the new guarantees signed in favour of the joint venture Actuator Solutions (for the related amount, please refer to the Note no. 41).

The maturities of operating lease obligations outstanding as at December 31, 2015 are shown below.

(thousands of euro)

	Less than 1 year	1-5 years	Over 5 years	Total
Operating lease obligations	1,744	3,509	1,954	7,207

41. RELATED PARTY TRANSACTIONS

Related Parties are identified in accordance with IAS 24 revised.

Related Parties include the following ones:

• S.G.G. Holding S.p.A., the controlling company, which is debtor of SAES Advanced Technologies S.p.A. in relation to receivables for taxes transferred by the latter in relation to the national tax consolidation program in place until December 31, 2014²² .

In addition, please note that S.G.G. Holding S.p.A. receives dividends from SAES Getters S.p.A.

• Actuator Solutions GmbH, a joint venture, 50% jointly owned by SAES and Alfmeier Präzision Groups, focused on the development, manufacturing and marketing of actuators based on the SMA technology.

• Actuator Solutions Taiwan Co., Ltd., a Taiwan-based company entirely controlled by the joint venture Actuator Solutions GmbH, for the development and commercialization of SMA devices for the image focus and stabilization in tablet and smart-phone cameras.

With regards to Actuator Solutions GmbH and its subsidiary Actuator Solutions Taiwan Co., Ltd., the SAES Group has a commercial relationship (sale of raw materials and semi-finished products) and performs various services (in particular, commercial activities, development services and legal services) that are recharged on the basis of a service contract. Finally, as already mentioned before, please note that, during the year 2015, SAES Nitinol S.r.l. made three capital contributions in favour of the joint venture Actuator Solutions GmbH for a total amounting to 2,900 thousand euro. In December 2015, in the same date of the last payment, the joint venture has executed the anticipated reimbursement to the SAES Group of the interest-bearing loan amounting to 1,500 thousand euro and granted at the beginning of the year 2014. Instead, the second interest-bearing loan, granted in October 2014, was still in place as at December 31, 2015 and it is reimbursed monthly on a straight-line basis over the originally agreed repayment plan (for further details please refer to the Note no. 20).

• SAES RIAL Vacuum S.r.l., a joint venture between SAES Getters S.p.A. and Rodofil s.n.c., established at the end of 2015, with the aim of the creation of an Italian technological and manufacturing hub of the highest level, for the design and production of integrated vacuum components and systems for accelerators, for the research, as well as for industrial systems and devices, combining at the highest level the competences of SAES in the field of materials, vacuum applications and innovation, with the experience in the design, assembling and fine mechanical productions of Rodofil.

• Dr. Michele Muccini, partner of SAES Getters S.p.A. in E.T.C. S.r.l., with a percentage of the share capital equal to 4%. In particular, please note that SAES Getters S.p.A., until December 31, 2015, has covered all the losses of E.T.C. S.r.l., also on behalf of Dr. Muccini, maintaining his percentage of ownership unchanged.

On March 11, 2015, the capital contribution made by the Parent Company on behalf of Dr. Muccini was equal to about 62 thousand euro.

• Managers with Strategic Responsibilities, these include the members of the Board of Directors, including non-executive directors, and the members of the Board of Statutory Auditors.

Moreover, the Corporate Human Resources Manager, the Corporate Operations Manager and the Group Administration, Finance and Control Manager are considered managers with strategic responsibilities²³ .

Their close relatives are also considered related parties.

²² Please note that, on May 27, 2015, the tax consolidation program between SAES Getters S.p.A., SAES Advanced Technologies S.p.A., SAES Nitinol S.r.l., E.T.C. S.r.l. and S.G.G. Holding S.p.A., with the latter company as consolidating company, was interrupted starting from January 1, 2015, following the decrease of the stake of S.G.G. Holding S.p.A. in SAES Getters S.p.A. below the threshold of 50% which determined the loss of control under the rules of the national fiscal consolidation program.

²³ Please note that, with effect from February 2014 and until January 17, 2016, the role of Group Legal General Counsel was assumed ad interim by Dr Giulio Canale.

The following table shows the total values of the related party transactions undertaken in 2015 and 2014.

(thousands of euro)
						December 31, 2015
	Total net sales	Research & development expenses	Selling expenses	General & administrative expenses	Other income (expenses)	Other financial income (expenses)	Trade receivables	Trade payables	Tax consolidation receivables from Controlling Company	Tax consolidation payables to Controlling Company	Financial receivables from related parties
S.G.G. Holding S.p.A.									272	0
Actuator Solutions GmbH	1,202	152 (*)	172 (*)	28 (*)	0	155	111	0			1,155
Actuator Solutions Taiwan Co., Ltd.	0	0	0	(7)	0	0	0	0			0
Total	1,202	152	172	21	0	155	111	0	272	0	1,155
(*) Costs recovery.

	(thousands of euro)

		December 31, 2014
	Total net sales	Research & development expenses	Selling expenses	General & administrative expenses	Other income (expenses)	Other financial income (expenses)	Trade receivables	Trade payables	Tax consolidation receivables from Controlling Company	Tax consolidation payables to Controlling Company	Financial receivables from related parties
S.G.G. Holding S.p.A. Actuator Solutions GmbH	883	323 (*)	127 (*)	28 (*)	0	62	138	0	2,907	(2,336)	2,762
Actuator Solutions Taiwan Co., Ltd. Total	0 883	0 323	0 127	(12) 16	0 0	0 62	0 138	(12) (12)	2,907	(2,336)	0 2,762

The following table shows the guarantees that the Group has granted to third parties (and, therefore, included in the detail reported in the Note no. 40) in favour of the joint venture Actuator Solutions.

(thousands of euro)

Guarantees	December 31, 2015	December 31, 2014	Difference
Guarantees in favour of the joint venture Actuator Solutions	2,984	1,234	1,750

The following table shows the remunerations to managers with strategic responsibilities as identified above.

(thousands of euro)
Total remunerations to key management	2015	2014
Short term employee benefits	3,137	2,438
Post employment benefits	0	0
Other long term benefits	490	156
Termination benefits	503	23
Total	4,130	2,617

As at December 31, 2015 payables to Managers with Strategic Responsibilities, as defined above, were equal to 3,120 thousand euro, to be compared with payables of 2,017 thousand euro as at December 31, 2014.

The increase, both in the income statement and in payables, was mainly due to the higher remuneration of the Executive Directors calculated, starting from the end of April 2015, on the basis of new contracts signed as a result of the three-year renewal of the corporate bodies (in particular, higher annual incentive and accrual for the three-year long-term incentive, in addition to the provision for the remuneration related to the end of their mandate that the Directors had given up in the previous year).

Pursuant to the Consob communications of February 20, 1997 and February 28, 1998, as well as to IAS 24 revised, we report that also in 2015 all related-party transactions fell within ordinary operations and were settled at economic and financial standard market conditions.

42. FEES PAID TO INDEPENDENT AUDITORS AND THEIR RELATED COMPANIES

Pursuant to article 149-duodecies of the Issuer Regulations ("Disclosure of Compensation"), which was introduced by the Consob resolution no. 15915 of May 3, 2007, the following table shows the remunerations of the independent auditors and of the entities belonging to the independent auditors' network for auditing engagements and for other services, broken down by type or category.

(thousands of euro)
Business services	Supplier	Customer	Fees
Audit	Parent Company auditor	SAES Getters S.p.A.	83
Tax and legal advices	Parent Company auditor	SAES Getters S.p.A.	0
Other	Parent Company auditor	SAES Getters S.p.A.	0
Audit	Network of Parent Company auditor	SAES Getters S.p.A.	0
Tax and legal advices	Network of Parent Company auditor	SAES Getters S.p.A.	28
Other	Network of Parent Company auditor	SAES Getters S.p.A.	0
Audit	Parent Company auditor	Subsidiaries	150
Tax and legal advices	Parent Company auditor	Subsidiaries	0
Other	Parent Company auditor	Subsidiaries	0
Audit	Network of Parent Company auditor	Subsidiaries	167
Tax and legal advices	Network of Parent Company auditor	Subsidiaries	6
Other	Network of Parent Company auditor	Subsidiaries	0

Lainate (MI), March 14, 2016

On behalf of the Board of Directors Dr Eng. Massimo della Porta President

Certification of the consolidated financial statements

Certification of the consolidated financial statements pursuant to article no. 81-ter of CONSOB Regulation no. 11971 of May 14, 1999, as subsequently amended

1. The undersigned, Giulio Canale, in his capacity as Vice President and Managing Director, and Michele Di Marco, in his capacity as Officer responsible for the preparation of the corporate financial reports of SAES Getters S.p.A., hereby certify, pursuant to the provisions of article 154-bis, paragraphs 3 and 4, of the Legislative Decree no. 58 of February 24, 1998:

2. the adequacy for the characteristics of the firm and

3. the effective application

of the administrative and accounting procedures for the preparation of the consolidated financial statements during the period from January 1 to December 31, 2015.

1. The following remarks apply to this situation:

2.1 The Administrative and Accounting Control Model of the SAES Group

• On December 20, 2012, the Board of Directors of SAES Getters S.p.A. approved the update of the Administrative and Accounting Control Model, issued on May 14, 2007, the adoption of which is aimed at ensuring that SAES complies with the provisions of Law no. 262 of December 28, 2005 (hereinafter the "Savings Law"), implemented in December 2006 through the approval of the Legislative Decree no. 303/06, and, specifically, the obligations pertaining to the preparation of corporate accounting documents, as well as all documents and communications with a financial nature issued into the market.
• The Control Model, with reference to the organizational structure of SAES Group:

o sets the roles and responsibilities of the entities involved in various capacities in the process of forming and/or controlling the financial information of the SAES Group and introduces the role of the Officer responsible for the preparation of the corporate financial reports (hereinafter the "Officer Responsible");

o describes the elements that comprise the administrative and accounting control system, citing the general control environment underlying the Internal Control System of the SAES Group, in addition to specific components pertaining to administrative and accounting information;

o regarding the latter in particular, it calls for the integration of the Group Accounting Principles and IAS Operating Procedures with a system of matrices of administrative and accounting controls which describe the control activities implemented in each process;

o establishes the conditions and frequency of the administrative and accounting risk assessment process in order to identify the processes of greatest relevance to the accounting and financial information.

2.2 Implementation of the Administrative and Accounting Control Model within SAES Getters S.p.A. and the results of the internal certification process

For further information on this issue, please refer to paragraphs 2.2, 2.3 and 2.4 of the Certification of the separate financial statements of SAES Getters S.p.A., which are of particular relevance in this regards in relation to the consolidation process.

2.3. Internal administrative and accounting control system of the subsidiaries of the SAES Group

• Following the administrative and accounting risk assessment conducted on the basis of the 2014 consolidated financial statements - the most significant administrative and accounting processes were selected, on the basis of their materiality, for each of the Group companies.
• In order to certify the consolidated financial statements, the Officer Responsible requested to each of the companies subject to controls and affected by significant processes the dispatch of a representation letter prepared in the format attached to the Administrative and Accounting Model of the SAES Group and signed by the General Managers/Financial Controllers, certifying the application and adequacy of procedures ensuring the accuracy of company accounting and financial information and the correspondence of financial reports with company transactions and accounting records.

2.4. Results of the certification process by the subsidiaries of the SAES Group

As of today, the Officer Responsible, with the support of the Group Reporting and Consolidation Manager, has received all the thirteen representation letters requested, signed by the General Managers/Financial Controllers of the subsidiaries affected by the processes deemed relevant after a risk assessment.

The result of the process was positive and no anomalies were reported.

1. Furthermore, we certify that:

3.1. The consolidated financial statements for the year ended December 31, 2015:

a) have been prepared in accordance with applicable international accounting standards recognized within the European Union pursuant to Regulation (EC) 1606/2002 of the European Parliament and the Council of July 19, 2002;

b) correspond to the results of accounting records and books;

c) are suitable to providing a truthful, accurate representation of the earnings and financial position of the issuer and the companies included in the consolidation perimeter.

3.2. The report on operations includes a reliable analysis of operating performance and results, as well as the situation of the issuer and the companies included in the scope of consolidation, along with a description of the primary risks and uncertainties to which they are exposed.

Lainate (MI), March 29, 2016

Vice President Officer responsible for the preparation and Managing Director of the corporate financial reports Dr Giulio Canale Dr Michele Di Marco

Board of Statutory Auditors' report to the Shareholders' Meeting

To the Shareholders' Meeting of SAES Getters S.p.A.

Dear Shareholders,

The Board of Statutory Auditors, in its current composition, has been duly appointed by the Company's Shareholders' Meeting on April 28, 2015, also in compliance with article 22 of the By-laws, and it will end its mandate with the Meeting for the approval of the financial statements as at December 31, 2017.

During the year ended on December 31, 2015, the supervisory of the Board of Statutory Auditors was conducted in accordance with the regulation of the "Consolidated Law on financial intermediation" enacted by the Legislative Decree 58/1998 and with the applicable provisions of the Italian Civil Code, taking into account also the Principles of Conduct recommended by the National Board of Chartered Accountants and Auditors in the version approved with the resolution of April 15, 2015, as well as Consob communications concerning the corporate governance and the activities of the Board of Statutory Auditors and, in particular, the communication no. DEM/1025564 dated April 6, 2001 and its subsequent amendments.

In addition, the Board of Statutory Auditors, in his role pursuant to article 19 of the Legislative Decree no. 39/2010, has carried out, during the year, the verification activities assigned to it by law.

Having acknowledged the foregoing, we report on the supervisory activities required by law and that we have carried out during the year ended on December 31, 2015 and, in particular:

• we ensure that we have verified the compliance with the law and the Company By-laws and the respect of the principles of proper administration, holding no. 6 meetings of the Board of Statutory Auditors during the year (of which, two meetings held by the previous Board in office until the date of April 28, 2015), without considering other informal meetings;
• in these meetings, in the Board of Directors' meetings and, in any case, at least quarterly, we obtained information from the Directors and from the governing bodies of the Company on the general corporate management and its foreseeable outlook, as well as on the most significant transactions, because of their size or nature, carried out by the Company also in relation to its subsidiaries;
• in the calendar year 2015, the Statutory Auditors who have succeeded each other took part to no. 1 Shareholders' Meeting and to no. 14 meetings of the Board of Directors, held in accordance with the statutory rules and laws that regulate their operation and for which we can reasonably assure that the actions approved in these meetings were compliant with the law and the By-laws and were always in the corporate interest, including intra-group transactions, that were not manifestly imprudent, hazardous, atypical or unusual, or in potential conflict of interest or as such to compromise the integrity of the company's net assets. At these meetings it was possible to freely express considerations, views and opinions;
• we assessed and verified the adequacy of the organizational, administrative and accounting system and the reliability of said system in correctly representing the operating activities, by obtaining information from the department managers and through the analysis of corporate documents. In this respect, we have no particular remarks to report. Furthermore, having followed the work done by the Internal Audit Department, and by the Audit and Risk Committee, we can confirm that the internal control system adopted by the Company is fully adequate;
• we supervised, pursuant to article 19, paragraph 1, of the Legislative Decree no. 39/2010, the financial reporting process; the effectiveness of the internal control system, of the internal audit system and of the risk management one; the audit of the annual accounts and consolidated accounts; the independence of the legal independent audit firm, in particular as regards the provision of nonauditing services to the Company;

• we also verified the adequacy of the instructions provided to subsidiaries in accordance with article 114, paragraph 2, of the Legislative Decree 58/1998;

• we read and obtained information on the organizational and procedural activities carried out pursuant to the Legislative Decree 231/2001 and subsequent additions, on the administrative responsibility of the entities for the offences envisaged by this regulation. The report of the Supervisory Body on the activities carried out during 2015 and the meetings of this Committee with the Board of Statutory Auditors did not point out any significant critical situation to be reported herein.

With reference to the provisions set forth in article 36 of the Market Regulation, issued by Consob, concerning relevant controlled companies, established and governed by the law of non-EU Countries, please note that the companies at issue were identified and their related administrative and accounting system is suitable for submitting on a regular basis all the economic and financial data required for the preparation of the consolidated financial statements to the Company and to the independent auditors.

Having acknowledged the foregoing, we would like to draw the attention of the Shareholders' Meeting to the following paragraphs.

Performance of the year

As illustrated by the Directors in the Annual Report, 2015 results, as well as the forecast for 2016, continue to show the strong growth of the Group; the 2015 results show a strong increase in revenues and the improvement of all economic and financial indicators, thanks also to the positive trend recorded by the exchange rate euro/US dollar.

The most innovative components of the activity, with particular reference to the shape memory alloys for applications in the medical and industrial fields, have shown the best results as regards both the volume of sales and economic marginality.

In a strategic point of view, the choice to develop new materials and new applications arising from research and innovation enabled the Group to successfully develop new end markets.

Below the summary of the percentage changes on the main indicators taken from the 2015 consolidated figures compared to the corresponding figures of the previous year.

Net sales – total difference	+26.1%
Net sales – organic difference1	+9.1%
EBITDA	+1.3%, with reference to % on sales
Operating income	+2.4%, with reference to % on sales
Net income	+1.6%, with reference to % on sales
Cash flow from operating activities	+63.7%, with reference to % on sales
Net financial position	+35.9%

With reference to the net financial position, we highlight the effects of the balancing of the structure of the Group's financial indebtedness, which progressively show the increase of the percentage of medium-long term loans compared to short-term bank debt.

Most significant transactions undertaken during the year

Between the major transactions pointed out in the Report on operations, we highlight the following:

• Following the agreement signed in 2014 by Memry Corporation with the State of Connecticut to obtain a soft financing in several tranches, for a total amount of 2.8 million USD, to purchase new machinery and equipment necessary to expand the production plant in Bethel, in February 2015 the first tranche of this soft loan, amounting to 2 million USD, was collected.
• In January 2015 the third and final tranche of the fixed consideration for the acquisition of the hydrogen purifiers business was paid to Power & Energy, Inc. (1.8 million USD).
• On March 1, 2015 SAES Getters S.p.A. acquired by the subsidiary SAES Getters USA, Inc. the business dedicated to the production and to the development of the vacuum pumps "Inficon" and "MAP", for a consideration of 450 thousand USD.

¹ Excluding the exchange rate effect.

• On May 12, 2015 the process to reduce the share capital of the Chinese subsidiary SAES Getters (Nanjing) Co., Ltd. from 13.6 million USD to 6.6 million USD was finalized, following the reduced required capitalization after the transformation of its activity from production into a commercial one, completed in 2014. This transaction generated a non-recurring exchange rate gain into the income statement (previously already included in the consolidated shareholders' equity in the item "Translation reserve") of 1.9 million euro.
• In May 2015, following the decrease of the stake of S.G.G. Holding S.p.A. in SAES Getters S.p.A. below the threshold of 50%, the prerequisite to keep the tax consolidation program with S.G.G. Holding S.p.A. as consolidating company ended, as envisaged by the combined provisions of articles 117 and 120 of the Income Tax Code ("TUIR"). In September 2015 the option to join a new tax consolidation program between SAES Getters S.p.A., SAES Advanced Technologies S.p.A., E.T.C. S.r.l. and SAES Nitinol S.r.l., with the Parent Company as consolidator, was exercised, together with the submission of the tax return of the Parent Company. This new tax consolidation program has been valid starting from January 1, 2015.
• In May 2015 the final tranche of the bank loan held by the US controlled company SAES Smart Materials, Inc., equal to 1.7 million USD, was reimbursed.
• On June 10, 2015 SAES announced the signature of a loan with EIB (European Investment Bank) worth 10 million euro, to support R&D projects in the field of vacuum technologies, shape memory alloys (SMAs) and Organic Light Emitting Transistor (OLET) solutions. The transaction is supported by the new generation of financial instruments of "InnovFin - EU Finance for Innovators", dedicated to innovative and growing companies that make use of the financial support of the European Union under the project "Horizon 2020" (the European outline program for Research and Innovation, 2014-2020). The medium-term loan consists of two tranches of the same amount, one secured by SACE, has a five-year term and is used to cover part of a research program for a total value of 45 million euro to be carried out in Italy, started in 2014 and that will end in 2017. The loan provides for the compliance with standard financial covenants for this type of transactions, calculated every six months on the consolidated economic and financial figures.
• In July 2015 SAES Getters S.p.A. signed a new multi-tranche loan for a total value of 11 million euro. The contract provides for an amortizing type tranche, amounting to 8 million euro and with a duration of five years, the repayment of which is established in semiannual fixed principal amounts and interests indexed to the six months Euribor, plus a spread of 2.25%. The second tranche, worth 3 million euro, is a revolving one, with duration of three years and its use based on the operational needs of SAES Group. Please note that the last revolving tranche was not used during the fiscal year 2015. On September 25, 2015, SAES Getters S.p.A. signed an IRS (Interest Rate Swap) contract on the first amortizing tranche with a notional value of 3.6 million euro expiring on July 31, 2020, that provides for the exchange of the six months Euribor with a fixed rate of 0.285%. The loan provides for the activation of financial covenants that are standard for this type of transactions, calculated annually on consolidated economic and financial figures.
• On October 15, 2015 SAES Nitinol S.r.l. made a capital contribution in favor of the joint venture Actuator Solutions GmbH equal to 0.5 million euro, in addition to the same payment made on July 15, 2015. The 50% joint partner Alfmeier, through the company SMA Holding GmbH, paid the same amounts. On December 15, 2015 each of the two partners of the joint venture (SAES Nitinol S.r.l and SMA Holding GmbH) made a further 2 million euro capital contribution; in the same date, Actuator Solutions GmbH provided the repayment of 1.5 million euro to each of the two shareholders, as anticipated reimbursement of the interest-bearing loan with an equal amount, granted in February 2014 and expiring on December 31, 2016.
• In November 2015 the share capital of the Korean subsidiary SAES Getters Korea Corporation was officially reduced from 10,497,900 thousand KRW to 524,895 thousand KRW, by reducing the nominal share value from KRW 10,000 to KRW 500 (for a total number of 1,049,790 shares). Such operation has generated a non-recurring exchange rate gain in the income statement equal to 30

thousand euro (previously included in the consolidated shareholders' equity under the item "Translation reserve").

• With reference to the loan subscribed by Memry Corporation in January 2009 and divided into two residual lines ('amortizing loan' and 'bullet loan') for a total value of 11 million USD, which had to be totally reimbursed within July 2017, on December 22, 2015 the US subsidiary signed an agreement with the financing institution, effective from December 31, 2015, in order to reschedule such repayment; in particular, the residual amount of the two lines was converted into an amortizing loan of the same amount (11 million USD) with a duration of 5 years, with a repayment plan consisting in six-month fixed tranches (starting from June 30, 2016 until December 31, 2020) equal to 1.1 million USD each. Interests will be paid every six months and benchmarked to the Libor rate, plus a spread equal to 2.70% (such spread will be reduced to 2.20% in case the ratio between the net financial position and the EBITDA of Memry Corporation is lower than 1.50). A new set of covenants has also been defined, still to be calculated every six months, based not on consolidated figures, but on the economic and financial figures of Memry Corporation only.
• On December 23, 2015 SAES Getters S.p.A. signed an agreement with the company Rodofil s.n.c., based in the province of Parma (Italy), for the commitment by the Parent Company to the acquisition, within the end of January 2016, of 49% of the company SAES RIAL Vacuum S.r.l. SAES RIAL Vacuum S.r.l. was established through the transfer by Rodofil of the 'Rial Vacuum' business (assets, trademark and customers list, as well as inventory and employed personnel), specialized in the design and manufacture of vacuum chambers for accelerators, synchrotrons and colliders, used in the major research laboratories worldwide. On December 23, 2015 SAES Getters S.p.A. acquired the first tranche equal to 10% of the newco SAES RIAL Vacuum S.r.l., while the finalization of the acquisition of the further 39% was realized on January 19, 2016. The total price of the 49% of the share capital was equal to approximately 1.6 million euro, of which 0.3 million euro paid in cash in 2015 and 1.3 million euro paid in January 2016
• The use of social security provisions in the Italian subsidiary SAES Advanced Technologies S.p.A. continued during the year 2015.

The Board of Statutory Auditors, after being properly and promptly informed by the Directors, assessed the compliance of the foregoing transactions with the law, the Company's By-laws and the principles of proper administration, ensuring that said transactions were not manifestly imprudent, hazardous, or in conflict with the resolutions passed by the Shareholders' Meeting, or such as to compromise the integrity of the Company's net assets.

Atypical and/or unusual transactions, including infra-group and related-party transactions

There weren't any atypical or unusual transactions to report; the transactions with the Group's companies were part of the Company's ordinary operations.

Related-party transactions generally consist of intra-group transactions with subsidiaries, mainly of a commercial nature. In particular, these include the purchase and sale of raw materials, semi-finished products, finished products, tangible assets and various types of services. Cash-pooling and interestbearing financing agreements are in force with some companies of the Group. Also some agreements for the provision of commercial, technical, information technology, administrative, legal and financial services and for the development of specific projects are in force with some subsidiaries. All these agreements were entered at arm's length economic and financial conditions.

With reference to the transactions with related parties other than subsidiaries, the Directors indicated in their Report:

• the relations with S.G.G. Holding S.p.A., the controlling company, which holds 6,943,047 ordinary shares as at December 31, 2015, representing 47.324% of the ordinary share capital with voting rights. With that company, in addition to the relationships arising from the distribution of dividends, must be added those arising from the agreement concerning the participation in the national tax consolidation program, in place until December 31, 2014 and discontinued with effect from January 1, 2015 following the decrease of the stake of S.G.G. Holding S.p.A. in SAES Getters S.p.A.
• the relations with Actuator Solutions GmbH, (joint venture 50% jointly controlled by the Groups SAES and Alfmeier Präzision, aiming at the development, production and distribution of actuators

based on the SMA technology) and the relations with Actuator Solutions Taiwan Co., Ltd. (Taiwanbased company, wholly owned by the joint venture Actuator Solutions GmbH, active in the development and distribution of SMA devices for the image focus and stabilization of the cameras of tablets and smartphones). The economic relationship includes proceeds from the sale of raw material and semi-finished products and various services (in particular, commercial activities, development services and legal services) that are recharged on the basis of a service contract. Finally, please note that, during the year 2015, SAES Nitinol S.r.l. made three capital contributions in favour of the joint venture Actuator Solutions GmbH for a total amounting to 2,900 thousand euro. In December 2015, in the same date of the last payment, the joint venture has executed the anticipated reimbursement to the SAES Group of the interest-bearing loan amounting to 1,500 thousand euro and granted at the beginning of the year 2014. Instead, the second interest-bearing loan, granted in October 2014, was still in place as at December 31, 2015 and it is reimbursed monthly on a straight-line basis over the originally agreed repayment plan.

• SAES RIAL Vacuum S.r.l., a joint venture between SAES Getters S.p.A. and Rodofil s.n.c., established at the end of 2015 with the aim of the creation of an Italian technological and manufacturing hub for the design and production of integrated vacuum components and systems for accelerators, for the research, as well as for industrial systems and devices, combining at the highest level the competences of SAES in the field of materials, vacuum applications and innovation, with the experience in the design, assembling and fine mechanical productions of Rodofil.
• Dr Michele Muccini, partner of SAES Getters S.p.A. in E.T.C. S.r.l., with a percentage of the share capital equal to 4%. In particular, please note that SAES Getters S.p.A., until December 31, 2015, has covered all the losses of E.T.C. S.r.l., also on behalf of Dr Muccini, maintaining his percentage of ownership unchanged. On March 11, 2015 the capital contribution made by the Parent Company on behalf of Dr Muccini was equal to about 62 thousand euro.

The Directors also identified the following additional related parties, among Executives and Managers with strategic responsibilities:

• the members of the Board of Directors, including non-executive directors and their close family members;
• the members of the Board of Statutory Auditors and their close family members;
• the Corporate Human Resources Manager, the Corporate Operations Manager, the Group Legal General Counsel² , the Corporate Research Manager³ and the Group Administration, Finance and Control Manager and their close family members.

The above remarks on the transactions with related parties comply with the provisions of article 2391 bis of the Civil Code and with the Consob Notices dated February 20, 1997 and February 28, 1998, as well as with the revised IAS 24. In addition, as required by the Consob resolution no. 15519 dated July 27, 2006, the explanatory notes to the financial statements bear information on the amounts of positions or transactions with related parties, highlighting them separately from the related items.

The information disclosed by the Directors in their Report on the financial statements for the year ended on December 31, 2015 and in the related notes is complete and adequate with respect to the transactions undertaken with all the companies of the Group and with its related parties as well.

In this regard, the Board of Statutory Auditors acknowledges that, as appropriately indicated in the corporate governance report, the Company adopted the procedures for related-party transactions, in compliance with article 2391-bis of the Civil Code, as implemented by the Consob Regulation no. 17221 dated March 12, 2010, and with the Consob Regulation dated September 24, 2010, as well as article 9.C.I of the Code of Conduct for Listed Companies, aimed at ensuring the transparency and the substantial and procedural correctness of related-parties transactions, identified in accordance with the revised IAS 24.

The same report on the corporate governance, to which reference should be made, illustrates in detail

² Please note that, with effect from February 2014 and until January 17, 2016, the role of Group Legal General Counsel was assumed ad interim by Dr Giulio Canale.

³ With effect from June 10, 2013, in the view of containing costs and optimizing organizational processes, the role of Corporate Research Manager was removed and its related responsibilities were transferred to the Chief Technology Innovation Officer, in the person of Dr Eng. Massimo della Porta.

the composition of the corporate officers, directors, members of committees other than the executive ones, Supervisory Board, in addition to the function of the Manager responsible for the preparation of the corporate accounting documents and the manager for the Internal Audit, following the new corporate appointments that took place during the of Shareholders' Meeting of April 28, 2015.

Independent audit firm

Deloitte & Touche S.p.A., the independent audit company, issued the audit reports on March 29, 2016, in which they expressed a judgment containing no remarks on either the consolidated or the Parent Company accounts for 2015.

We held meetings, including informal ones, with the representatives of Deloitte & Touche S.p.A., the audit firm in charge of reviewing the consolidated and SAES Getters S.p.A. financial statements, as well as the audit of the accounts pursuant to article 150, paragraph 3, of Italian Legislative Decree 58/1998. At these meeting there weren't any data or information that should be highlighted in this report.

The Board of Statutory Auditors acknowledges that it has received, pursuant to article 19, paragraph 3, of the Legislative Decree no. 39/2010, the report of the independent audit firm explaining the basic issues emerged during the audit and any significant deficiency recorded in the internal audit system in relation to the financial reporting process, on which no specific deficiencies were identified.

The Board also acknowledges that it has received from the audit firm, pursuant to article 17, paragraph 9 letter a), of the Legislative Decree no. 39/2010, the confirmation of its independence, the indication of the services other than the audit provided to the Company by any of the entities belonging to its network and, finally, that it has discussed with the legal audit firm the risks related to its independence as well as the measures taken to limit such risks, pursuant to the mentioned article 17, paragraph 9, letter b).

Indication of the assignment of additional mandates to the audit firm and/or parties bearing long-term relationships with the former

With regards to any additional mandates assigned to the audit firm and/or parties bearing long-term relationships with the former, please refer to the information provided by the Company in the notes to the consolidated financial statements, pursuant to article 149-duodecies of the Issuers Regulations regarding the disclosure of compensations.

Indication of the existence of opinions issued in accordance with the law during the year In 2015, the Board of Statutory Auditors was not asked to provide any opinion in accordance with the law, in addition to those mentioned in this report.

Filing of complaints pursuant to article 2408 of the Civil Code and of petitions

The Board of Statutory Auditors did not receive any complaints pursuant to article 2408 of the Italian Civil Code nor any kind of petition.

Proper administration - Organizational structure

The Company is competently administered in accordance with the law and the Company's By-laws. We attended the Shareholders' Meetings and the meetings of the Board of Directors as well as those meetings of the other Committees in which our presence is required. These meetings were held in accordance with the Company's By-laws and the regulations governing their operation.

The delegations and powers conferred were appropriate to the Company's needs and adequate for the evolution of the corporate management.

The Board of Statutory Auditors believes that the Company's overall organizational structure is appropriate to the Group's size.

Finally, the Statutory Auditors, in the periodic reviews made during the year, were able to observe the accuracy and timeliness of all the fulfillment of obligations and communications to Borsa Italiana and Consob, related to the listing of the Parent Company on the STAR segment of the Italian Stock Exchange.

Internal control and risk management system-Administrative and accounting system

The system of internal control and corporate risk management ("SCIGR"), which is the set of rules, procedures and organizational structures aimed at the identification, measurement, management and monitoring of the main risks in order to ensure the protection of the company's net assets, is managed and monitored by the Board of Directors, by the Director in charge of the internal control and risk management system, by the Audit and Risk Committee, by the Internal Audit Department, by the Supervisory Board and by the Board of Statutory Auditors, each one with specific tasks within the scope of its role and related responsibilities.

The SIGCR system adopted by the Company is in line with the components of the "CoSO Framework" model, internationally recognized as a benchmark best practice for the representation and evaluation of the internal control system. In addition, please note that the Chairman of the Board of Statutory Auditors joins the meetings of the Audit and Risk Committee, a non executive organ that, also in 2015, has promoted and supported, with regards to the decisions taken by the Board of Directors, the adoption of Risk Management instruments and methods aimed at identifying, analyzing and understanding the level of mitigation of the corporate risk within the Company and the Group. In addition to the aforementioned entities, also the Manager responsible for the preparation of the corporate accounting documents pursuant to the Legislative Decree no. 262/2005, the independent auditors and other internal control corporate functions are involved in this process.

During the year, the Board of Statutory Auditors, as part of its monitoring activity on the effectiveness of the system and the compliance with the law, also as a result of its regular meetings with the abovementioned individuals, didn't find any particular issues or anomalies that require to be mentioned in this report.

Moreover, please note that the Board of Directors, gathered on March 14, 2016, following the proposal of the Audit and Risk Committee, after consulting the Board of Statutory Auditors, considered appropriate the internal control and risk management system adopted by the Company.

We had the knowledge and supervised the adequacy of both the Company's organizational structure and of its administrative and accounting system, as well as the reliability of the latter to accurately represent operating events, by obtaining the information from the heads of the respective offices, reviewing the corporate documents, through direct controls and exchanging information with the audit firm Deloitte & Touche S.p.A., in accordance with article 150 of the Legislative Decree 58/1998. We do not have any particular remarks to report in this regard.

The Company has adopted appropriate procedures to govern and monitor the disclosure to the market of data and transactions pertaining to the companies of the Group. In this regard, please note that the Company has a complex administrative and accounting control model, approved by the Board of Directors on May 14, 2007, adopted also following the obligations introduced by the Savings Law concerning the drafting of corporate accounting documents and of all the financial documents and communications intended for the market. This model, that puts into a legal form the system of corporate rules and procedures adopted by the Group, in order to identify and manage the principal risks associated with the preparation and dissemination of the financial information and thereby to achieve the Company's objectives of truthfulness and accuracy of such information, was subjected to an update process that led to the issue of a new release approved by the Board of Directors on December 20, 2012.

Subsidiaries

As required by the internal control model adopted by the Company, the Responsible Officer ensures the dissemination and the update of the rules for the control of the subsidiaries, ensuring their alignment with the principles of the Group. On this issue, the Board of Statutory Auditors refers to the details provided in the specific paragraph of the Report on corporate governance and ownership, approved by the Board of Directors on March 14, 2016 and available on the Company's website.

Code of Conduct for listed Companies

The Corporate Governance system of the Company incorporates, in its essentials, the principles and recommendations contained in the "Code of Conduct for the corporate governance of listed companies", to which the Board of Directors has decided to adhere on February 23, 2012. The Board of Directors also approved, on March 14, 2016, the annual Report on corporate governance and ownership structure for the year 2015. The full text of this report, which can be consulted for a detailed information, is available to the public in the ways provided for by the current laws and regulations.

Report on remuneration pursuant to article 123-ter of the Consolidated Finance Act and article 84 quarter of the Issuers Regulation and monetary incentive systems of strategic resources

The Board of Statutory Auditors states that it has previously examined and expressed its favorable opinion, together with the Remuneration and Appointment Committee, also in accordance with the provisions set forth in article 2389, paragraph 3, of the Civil Code, on the policies and general guidelines for the remuneration of the administrative bodies and managers with strategic responsibilities of the Company and, in particular, on the Report on remuneration, drawn up pursuant to article 123-ter of the Consolidated Finance Act and 89-quarter of the Issuers Regulation, as well as with reference to the annual and three-year instruments of monetary incentive targeted to the strategic resources of the Company and of the SAES Group.

Independence

The Board of Statutory Auditors states that it has verified the accuracy of the criteria adopted by the Board of Directors in assessing the independence of its members, taking note of the statements granted by the Directors.

The Board of Statutory Auditors also supervises the conditions of independence and autonomy of its own members and notifies the Board of Directors in time for the drafting of the corporate governance report. In particular, with regards to 2015, the Board of Statutory Auditors verified the continuing satisfaction of the independence requirements on April 28, 2015.

Finally, each member of the Board of Statutory Auditors fulfilled the requirements to notify Consob, pursuant to article 144-quaterdecies of the Issuers Regulation, with regard to the regulation on the plurality of assignments.

Consolidated and SAES Getters S.p.A. financial statements for the year ended on December 31, 2015

As we are not responsible for an analytical review of the contents of the financial statements, we certify that we have verified the general setting adopted for both the Consolidated and SAES Getters S.p.A. financial statements and its general compliance with the law in terms of form and structure. We further certify that the information contained therein corresponds to the facts and information in our possession. As in previous years, we report that both the consolidated financial statements, following the entry into force of the European Regulation no. 1606/2002, and the financial statements of the Parent Company were drafted in accordance with the IAS/IFRS, which have been applied since January 1, 2005. Having acknowledged the foregoing, the financial statements of the Parent Company and the consolidated ones consist of the statement of financial position, the statement of profit or loss, the statement of other comprehensive income, the cash flow statement, the statement of changes in the shareholders' equity and the explanatory notes. The reporting formats adopted are compliant with the provisions of the IAS 1-revised.

The statement of financial position was prepared by distinguishing between current and non-current assets and liabilities, according to whether the assets and liabilities are likely to be realized within or beyond twelve months from the reporting date and stating under two separate items the "Assets held for sale" and the "Liabilities held for sale" as required by the IFRS 5.

In the statement of profit or loss, operating expenses are disclosed on the basis of their destination.

The cash flow statement has been prepared according to the indirect method, as allowed under the IAS 7.

In addition, as required by the Consob resolution no. 15519 dated July 27, 2006, in the statement of profit or loss by destination, revenues and costs derived from non-recurring transactions or events that do not occur frequently in the ordinary course of business have been specifically identified.

Always in accordance with this resolution, the amounts of positions or transactions with related parties have been presented separately from the applicable items in the explanatory notes.

With regards to the financial statements submitted for your review, we point out the following:

(thousands of euro)

Statement of profit or loss	Separate financial statements	Consolidated financial statements
Net revenues	8,488	166,012
Operating income (loss)	(17,043)	20,499
Other income and expenses	22,869	(2,677)
Income before taxes	5,826	17,822
Net income (loss)	5,859	8,820
Total comprehensive income (loss)	5,394	17,277
	=====	=====
Statement of financial position
Non-current assets	94,411	122,087
Current assets	28,067	91,092
Total assets	122,478	213,179
Non-current liabilities	21,939	43,570
Current liabilities	30,823	43,121
Shareholders' equity	69,716	126,488
Total liabilities and Shareholders' equity	122,478	213,179
	=====	=====

As at December 31, 2015, the Parent Company's cash flow statement showed net cash and cash equivalents of 3,400 thousand euro; at the same date, the consolidated cash flow statement showed net cash and cash equivalents of 24,041 thousand euro.

Intangible assets with finite useful lives, acquired or produced internally, have been classified among the assets in accordance with the IAS 38 when it is likely that some future economic benefits will derive from their use, and they are amortized on the basis of their estimated useful lives. Goodwill is not amortized, but it is subjected to impairment test at least annually in order to identify any devaluation.

Long-term equity investments, equal to 68,016 thousand euro at the end of the year, are valued at cost and adjusted as necessary to account for any impairment in the Parent Company's financial statements. In the consolidated financial statements, all the subsidiaries have been included in the scope of consolidation with the line-by-line method, with the exception of the joint ventures Actuator Solutions GmbH (and its wholly owned subsidiary Actuator Solutions Taiwan Co., Ltd.) and SAES RIAL Vacuum S.r.l. to which the equity method has been applied.

The dividends collected by the Parent Company in 2015 amounted to 24,295 thousand euro, compared to 18,041 thousand euro in 2014.

Financial debts amounted to 37,181 thousand euro in the Parent Company's financial statements as at December 31, 2015 compared to 49,854 thousand euro in 2014.

Share Capital

As at December 31, 2015 the share capital, fully subscribed and paid, amounted to 12,220 thousand euro and consisted, as in the previous year, of no. 14,671,350 ordinary shares and no. 7,378,619 savings shares, for a total of no. 22,049,969 shares.

The shareholders' equity of the Parent Company, equal to 69,716 thousand euro, included, inter alia, the reserve of positive currency revaluation balances, following the application of the Laws no. 72/1983 and no. 342/2000 for a total amount of 1,727 thousand euro, the retained earnings reserve of 2,561 thousand euro, the IAS conversion reserve of 2,712 thousand euro, the reserve for capital gains on the sale of treasury shares in portfolio (negative for 589 thousand euro), the reserve representing the capital gain on the sale of the three business units to SAES Advanced Technologies S.p.A., equal to 2,426 thousand euro, entered as an increase of the shareholders' equity according to the OPI1 principle issued by the Italian Association of Chartered Accountants, and the reserve representing the difference between the appraised value and the book value of the assets transferred to the Company by the subsidiaries SAES Advanced Technologies S.p.A. and SAES Getters USA, Inc., negative respectively for 344 thousand euro and 420 thousand euro, recorded as a reduction of the shareholders' equity in accordance with the same principle OPI1 issued by the Italian Association of Chartered Accountants.

Research, development and innovation expenses were equal to 8,097 thousand euro in the Parent Company's financial statements and equal to 14,620 thousand euro in the consolidated financial statements. These expenses were charged into the income statement because they did not meet the requirements as envisaged by the IAS 38 for their compulsory capitalization.

Current and deferred income taxes were entered with a positive balance of 33 thousand euro for the Parent Company, consisting of 1,275 thousand euro in current taxes and 1,242 thousand euro as expenses for deferred taxes.

Current and deferred income taxes recorded a negative balance equal to 9,002 thousand euro in the consolidated financial statements.

For more information concerning the recognition of deferred tax assets and liabilities, please refer to the remarks made by the Directors in the explanatory notes and to the statements of temporary differences and associated tax effects.

The information on the performance of the subsidiaries, on the research, development and innovation activities, on the significant events occurred after the end of the year and on the business outlook, can be found in the Report on operations of the SAES Group.

However, it is important for the Board of Statutory Auditors to recall the resolution passed in the Extraordinary Shareholders' Meeting of March 3, 2016, regularly convened in order to deliberate on the following proposal, examined the Explanatory Report of February 1, 2016 prepared by the Board of Directors and written pursuant to articles 125 ter of the Legislative Decree no. 58 and no. 72 dated February 24, 1998 of the Regulation adopted with the Consob resolution no. 11971 dated May 14, 1999 and subsequent amendments and additions:

"Change of the article no. 11 of the By-laws with the introduction of the increase of the voting right pursuant to article 127 quinques of the TUF. Related and consequent resolutions".

Following the regular course of the Meeting, in which we participated, the majority of the Shareholders present, as required by article no. 13 of the By-laws, resolved to amend the article no. 11 of the current By-laws as indicated in the Report of Board of Directors, allowed the President and the Managing Director, each of them separately, to take the necessary actions to implement the resolution adopted.

The Board of Statutory Auditors takes note of the proposal of the Board of Directors to entirely distribute the net income of the year, given the absence for 2015 of unrealized exchange rate gains pursuant to article 2426, paragraph 8-bis, of the Italian Civil Code, and therefore attributing a dividend of 0.276799 euro per savings share, including the preferred dividend of 0.138549 euro for the year 2015, as well as a dividend of 0.260173 euro per ordinary share, giving notice that in this way the rule of the minimum increase of 3% of the implied book value to which savings shares are entitled to compared to ordinary shares has been respected. The Board of Directors also proposed to distribute a portion of the available reserve "Retained earnings" equal to 2,642,181.64 euro, in equal measure to the ordinary shares and savings shares, giving a dividend of 0.119827 euro per savings share and per ordinary share. In summary, the proposal of dividend distribution is as follows:

0.396626 euro per no. 7,378,619 savings shares	2,926,552.14 euro
0.380000 euro per no. 14,671,350 ordinary shares	5,575,113.00 euro
TOTAL	8,501,665.14 euro

On the basis of the foregoing, and in consideration of the results of our activity, we propose that the Shareholders' Meeting approve the consolidated financial statements and the financial statements of the Parent Company for the year ended on December 31, 2015, as prepared by the Directors.

March 29, 2016

Pier Francesco SPORTOLETTI

Vincenzo DONNAMARIA

Sara Anita SPERANZA

Independent Auditors' report on the consolidated financial statements

Report on operations of SAES Getters S.p.A.

FINANCIAL HIGHLIGHTS OF SAES GETTERS S.p.A.

(thousands of euro)
---------------------	--

Income statement data	2015	2014	Difference	Difference %
NET SALES
- Industrial Applications	3.722	3.707	15	0,4%
- Shape Memory Alloys	4.162	2.742	1.420	51,8%
- Advanced Materials & Corporate Costs	604	492	112	22,8%
Total	8.488	6.941	1.547	22,3%
GROSS PROFIT (1)
- Industrial Applications	1.484	1.131	353	31,2%
- Shape Memory Alloys	1.210	645	565	87,5%
- Business Development & Corporate Costs (2)	(352)	(355)	3	0,8%
Totale	2.342	1.421	921	64,8%
% on sales	27,6%	20,5%
EBITDA (3)	(14.512)	(11.742)	(2.770)	-23,6%
% on sales	-171,0%	-169,2%
OPERATING LOSS	(17.043)	(14.475)	(2.568)	-17,7%
% on sales	-200,8%	-208,5%
NET INCOME	5.859	1.477	4.382	296,7%
% on sales	69,0%	21,3%
Balance Sheet and Financial data	2015	2014	Difference	Difference %
	14.343	15.122	(779)	-5,2%
Property, plant and equipment, net	69.716	67.799	1.917	2,8%
Shareholders'equity Net financial position	(26.324)	(39.498)	13.174	33,4%
Other information	2015	2014	Difference	Difference %
Cash flow from operating activities	(11.224)	(13.166)	1.942	14,8%
Research & development expenses (3)	8.097	8.771	(674)	-7,7%
Number of employees as at 31 December (4)	213	210	3	1,4%
Personnel cost (5)	15.703	14.719	984	6,7%
Purchase of property, plant and equipment	1.334	1.519	(185)	-12,2%

(1) This parameter is calculated as the difference between net revenues and industrial costs directly and indirectly attributable to the products sold.

(2) It includes costs that cannot be directly attributed or reasonably allocated to any business sector, but that refer to the Company as a whole.

(3) EBITDA is not deemed as an accounting measure under International Financial Reporting Standards (IFRS); however, we believe that EBITDA is an important parameter for measuring the Group's performance and therefore it is presented as an alternative indicator. Since its calculation is not regulated by applicable accounting standards, the method applied by the Group may not be homogeneous with the ones adopted by other Groups. EBITDA is calculated as "Earnings before interests, taxes, depreciation and amortization". Here below we show EBITDA calculation, starting from the Operating Profit

(thousands of euro)
	2015	2014
Operating income	(17.043)	(14.475)
Depreciation and amortisation	2.479	2.732
Write down of assets	52	0
Bad debt provision accrual	0	0
EBITDA	(14.512)	(11.742)
% on sales	-171,0%	-169,2%

(4) It includes staff employed with contracts different from employment and personnel of SAES Getters S.p.A. – Taiwan Branch and SAES Getters S.p.A. – Japan Branch.

(5) In 2014, non-recurring severance costs included in the personnel costs were equal to 50 thousand euro whereas the use of the redundancy fund (Cassa Integrazione Guadagni) brought to a benefit to the personnel costs equal to 165 thousand euro.

Report on operations

The organizational structure of SAES Getters S.p.A., as Parent Company (also called hereinafter as the "Company"), identifies two Business Units: Industrial Applications and Shape Memory Alloys (SMA). Corporate costs (expenses that cannot be directly attributed or allocated in a reasonable way to any business unit, but which refer to the Group as a whole) and costs related to research and development, undertaken to achieve the diversification in innovative business (Business Development Unit), are shown separately from the two Business Units

Industrial Applications Business Unit
Electronic & Photonic Devices	Getters and metal dispensers for electronic vacuum devices
Sensors & Detectors	Getters for microelectronic and micromechanical systems (MEMS)
Light Sources	Getters and metal dispensers used in discharge lamps and fluorescent lamps
Vacuum Systems	Pumps for vacuum systems
Thermal Insulation	Products for thermal insulation
Pure Gas Handling	Gas purifier systems for semiconductor industry and other industries
Shape Memory Alloys (SMA) Business Unit
SMA Medical applications	Nitinol shape memory alloys for the biomedical sector
SMA Industrial applications	SMA actuator devices for the industrial sector (domotics, white goods industry, consumer electronics and automotive sector)
Business Development Unit
Business Development	Research projects undertaken to achieve the diversification into innovative businesses

The following table illustrates the Group's Business organizational structure:

Net sales in fiscal year 2015 were of 8,488 thousand euro, increasing (+22,3%, net of the positive exchange rate effect +16,8%) mainly due to the significant sales growth in Shape Memory Alloys (SMA) Business Unit, particularly in industrial applications sector.

The ability to achieve economies of scale in this industry, besides the improvement of the product mix within the Industrial Applications Business Unit, resulted in an increase of the gross profit (amounting to 2,342 thousand euro in 2015 compared to 1,421 thousand euro in the previous fiscal year), as well as of the total gross margin (increased from 20,5% to 27,6% during the fiscal year).

In spite of the gross profit improvement, operating profit has been negatively affected by the increase of operating expenses, by the significant decline of revenues for royalties deriving from third parties and by a provision for legal disputes risks, amounting to 689 thousand euro (further details can be found at Note nr. 26).

In 2015, the Company has reported an operating loss of -17,043 thousand euro (compared to -14,475 thousand euro of the previous fiscal year)

The EBITDA of the fiscal year has been negative for -14,512 thousand euro, compared to a negative value of -11,742 thousand euro of 2014.

Excluding the above mentioned provision for legal disputes risks, in 2015 EBITDA adjusted would amount to -13,823 thousand euro.

Dividends, net financial income, net foreign exchange gains and write-downs of investments in subsidiaries were equal to 22,869 thousand euro in 2015, up from 14,975 thousand euro in the previous year, mainly due to higher dividends received by the subsidiaries (equal to 24,295 thousand euro in 2015 compared to 18,041 thousand euro in 2014).

Fiscal year 2015 closed with an income before taxes of 5,826 thousand euro, compared with 500 thousand euro of the previous fiscal year.

Income taxes registered a total positive balance (revenue) equal to 33 thousand euro in 2015 that includes a negative adjustment of 1,563 thousand euro, due to the recalculation of the deferred tax assets and liabilities of the Company, by applying the new IRES tax rate, equal to 24%, which will come into force starting from 2017; Further details can be found at Note nr. 11.

The net income for 2015 was 5,859 thousand euro, compared to a net income of 1,477 thousand euro in 2014.

Net financial position as of December 31, 2015 stood at net debt of -26,324 thousand euro, significantly improved if compared to net debt of -39,498 thousand euro as of December 31, 2014. Besides a better operating management, positive variance is due to higher dividends received from the controlled subsidiaries and to the financial revenues deriving from the capital reduction of some Asiatic controlled companies (further details can be found at the 2015 significant events section)

Here below the other significant events occurred in 2015.

On March 1, 2015 the Company bought from SAES Getters USA Inc. subsidiary the branch dedicated to the production and the development of "Inficon" and "MAP" vacuum pump, for an amount of 450,000 US Dollars.

On May 12, 2015 the process to reduce the share capital of the Chinese subsidiary SAES Getters (Nanjing) Co., Ltd. from 13.6 million USD to 6.6 million USD was finalized, resulting from the reduced required capitalization after the transformation of its activity from productive into a commercial one, completed in 2014. This transaction generated a non-recurring foreign exchange rate gain into the income statement of 1.9 million euro.

On May 27, 2015, as a consequence of the decrease below the threshold of 50% of the stake of S.G.G. Holding S.p.A. in SAES Getters S.p.A., the condition to maintain the tax consolidation program with S.G.G. Holding S.p.A. as consolidating company stopped to exist, as provided by the combined provisions of articles 117 and 120 of the Income Tax Code ("TUIR").

On September 30, 2015, the option to join a new tax consolidation program between SAES Getters S.p.A., SAES Advanced Technologies S.p.A., E.T.C. S.r.l. and SAES Nitinol S.r.l., with the Company as consolidator, was exercised, together with the submission of the tax return of Company. This new tax consolidation came into force starting from January 1, 2015.

On April 1, 2015 the Company signed a loan with EIB (European Investment Bank) worth 10 million euro to support R&D projects in the field of vacuum technologies, shape memory alloys (SMAs) and Organic Light Emitting Transistor (OLET) solutions. The transaction is supported by the new generation of financial instruments of "InnovFin - EU Finance for Innovators", dedicated to innovative and growing companies that make use of the financial support of the European Union under the project "Horizon 2020" (the European outline program for Research and Innovation, 2014-2020). The medium-term loan consists of two tranches of the same amount, one secured by SACE, has a five-year term and will be used to cover part of a research program for a total value of 45 million euro to be carried out in Italy, started in 2014 and that will end in 2017.

The loan provides for compliance with the standard financial covenants for this type of transactions, calculated every six months on the consolidated economic and financial figures.

On July 24, 2015 SAES Getters S.p.A. signed a new multi-tranche loan for a total value of 11 million euro. The contract provides for an amortizing type tranche, amounting to 8 million euro and with a duration of five years, the repayment of which is established in semiannual fixed principal amounts and interests indexed to the six months Euribor, plus a spread of 2.25%. The second tranche, worth 3 million euro, is a revolving one, with a duration of three years and its use based on the operational needs of the SAES Group. On September 25, 2015, SAES Getters S.p.A. signed an IRS (Interest Rate Swap) contract on the first tranche amortizing

with a notional value of 3.6 million euro expiring on July 31, 2020, that provides for the exchange of the six months Euribor with a fixed rate of 0.285%.

The loan provides for the activation of financial covenants that are standard for this type of transactions, calculated annually on consolidated economic and financial figures.

In November 2015 the share capital of the Korean subsidiary SAES Getters Korea Corporation was officially reduced from 10,497,900 thousand KRW, to 524,895 thousand KRW, by reducing the nominal share value from KRW 10,000 to KRW 500 (for a total number of 1,049,790 shares).

Such operation has generated a non-recurring foreign exchange rate gain in the income statement equal to 0,5 million euro.

On December 23, 2015 SAES Getters S.p.A. signed an agreement with the company Rodofil s.n.c., based in the province of Parma (Italy), that provided for the commitment by theCompany to buy, within the end of January 2016, the 49% of the company SAES RIAL Vacuum S.r.l. It established through the transfer by Rodofil of the 'Rial Vacuum' business (assets, trademark and customers list, as well as inventory and employed personnel), specialized in the design and manufacture of vacuum chambers for accelerators, synchrotrons and colliders, used in the major research laboratories worldwide.

On December 23, 2015 SAES Getters S.p.A. acquired the first tranche equal to 10% of the newco SAES RIAL Vacuum S.r.l., while the finalization of the acquisition of the further 39% was realized on January 19, 2016.

The total price of the 49% of the share capital is equal to approximately 1.6 million euro of which 0.3 million euro paid in cash during 2015 and 1.3 million euro paid in January 2016.

The signed contract includes some shareholders' agreements that govern the relationship between the parties enabling to qualify SAES RIAL Vacuum S.r.l. as a joint venture. They also include a put and call option among the shareholders, according to an agreed schedule. In particular, Rodofil will have the right to exercise a put option, by selling to SAES a minimum of 2% up to a maximum of 51% of its shares of SAES RIAL Vacuum S.r.l., through a one-off operation between May 1, 2020 and May 31, 2020, at a predetermined price related to the performance of the new company at the date of the sale; if Rodofil does not exercise its put option, SAES will have the right to exercise a call option through a one-off operation between June 1, 2020 and June 30, 2020, for a percentage equal to 30% of the share capital, at a price calculated with similar method.

The aim of the agreement is the creation of an Italian technological and manufacturing hub of the highest level, for the design and production of integrated vacuum components and systems for accelerators, for the research, as well as for industrial systems and devices. The joint venture will combine at the highest level the competences of SAES in the field of materials, vacuum applications and innovation, with the experience of Rial and Rodofil in the design, assembling and fine mechanical productions, with the aim of offering absolutely excellent quality products and successfully competing in the international markets.

Research, Development and Innovation activities

In 2015 research and development expenses amounted to 8,097 thousand euro, in decrease if compared to the previous fiscal year (-7.7%), as a result of an increased focus on projects portfolio, as long as a slight increase of cost sharing charges to the subsidiaries: strategic role of research is confirmed for SAES Getters SpA.

In 2015 the R&D laboratories were strongly committed in the scouting of new applications for the platform of Functional Polymer Composites (FPC); in particular, the activity was focused on the freezing definition of the specifications of the first product of the SAES Group for food packaging applications. At this purpose, some preliminary collaborations have been started, that should lead to the development of new active packaging solutions with the aim of controlling the internal atmosphere of the package to extend the shelf life of the food inside it. A special working group was created, by combining the resources of the laboratories with those of other departments, to run a positioning study in the production chain of the active packaging. This study has highlighted two alternative business models for the Company: the first one is to provide precursors materials, that means lacquers for the deposition of active films on the plastic materials (film coating) or compounds to be mixed with the plastic materials during their processing (extrusion or other processes); the second is to produce functionalized plastic materials.

The second business model, in line with the Group's new strategy to go downstream in the value chain, might be possible through a partnership with an already consolidated manufacturer. In this direction, a collaboration with an Italian company leader in the sector has been started, the results of which are expected in the first half of 2016.

Always in the field of Functional Polymer Composites it is worth noting the launch of a test of a solution for the control of the evolution of carbon dioxide (CO2) in lithium batteries at the world's leading manufacturer of Li-Ion batteries for auto-traction, whose first results should be available within the first months of 2016. A positive result in such tests would pose SAES in a privileged position to design with the customer the optimal solution to the problems of security and stability of this type of batteries, with extremely interesting business prospects

Intense were also the activities of the Vacuum Systems development laboratory that, in the wake of the great success arisen by the presentation to the market of the new High Vacuum pump at the end of 2014, continued the development of the first two models already on sale in the market. Also thanks to the support of this laboratory, it was possible to finalize a supply contract for an important particle accelerator of over 100 different models of NEXTorr® pumps.

The activities of the Getters & Dispensers development laboratory have focused in particular on the development of solutions both of gettering and dispensing within the new LED generation.

The laboratory of the Company has continued, with success, the activities of basic research in the field of Shape Memory Alloys regarding new formulations of alloys and the improvement of existing production processes, to support applications in both the medical and the industrial segments.

During 2015, thanks to the excellent work done by the laboratory, it was possible to introduce a new range of clean melt materials in the market that, thanks to a major review of the transformation process and a strict control of the production process parameters, ensures doubled shelf lives compared to standard materials. The new SMA wires had a major commercial success and have been qualified by a major customer operating in the mobile phone business. The research activities also focused on the development of new formulations that allow to raise the transformation temperature of the alloys up to about 200°C. A material able to operate at temperatures significantly higher than the current ones (the current limit is around 100°C) would open the way to new applications in the automotive field. The first results of this very important project should be visible in the first half of 2016 and the introduction of this new material would place SAES in a technological and commercial strength position of absolute importance.

Please note that all basic research expenses incurred by the Company are charged directly into the income statement in the year in which they occurred as they do not qualify for capitalization.

Sales and Net Income 2015

In 2015 Net Sales were of 8.488 thousand euro, increasing (+22,3%) from 6,941 thousand euro reported in 2014. Excluding exchange rate effect, positive for +5,5% and almost completely due to the US dollar appreciation against euro, the organic growth has been of +16,8%, mainly determined by the significant improvement of sales in shape memory alloys (SMA) field for industrial applications

The following table contains a breakdown of net sales in 2015 and 2014 by business segment, along with the percent variance at current and comparable exchange rates: (thousands of euro)

Business Unit and Business	2015	2014	Difference	Difference %	Exchange rate effect	Price / quantity effect
Electronic & Photonic devices	48	44	4	9,1%	6,3%	2,8%
Sensors & Detectors	2.943	2.164	779	36,0%	9,3%	26,7%
Light Sources	0	4	(4)	-100,0%	0,0%	-100,0%
Vacuum Systems	375	754	(379)	-50,3%	4,9%	-55,2%
Thermal Insulation	83	134	(51)	-38,1%	4,8%	-42,9%
Pure gas Handling	273	607	(334)	-55,0%	0,0%	-55,0%
Subtotale Industrial Applications	3.722	3.707	15	0,4%	8,0%	-7,6%
SMA Medical Applications	6	0	6	600,0%		600,0%
SMA Industrial Applications	4.155	2.742	1.413	51,5%	2,1%	49,4%
Subtotale Shape Memory Alloys	4.161	2.742	1.419	51,8%	2,1%	49,6%
Business Development	605	492	113	23,0%	16,5%	6,5%
Total Net Sales	8.488	6.941	1.547	22,3%	5,5%	16,8%

Revenues of the Industrial Applications Business Unit were of 3,722 thousand euro, aligned (+0,4%) to the previous year. Exchange rate effect has been positive and equal to +8%. Positive trend of Sensors & Detectors business, whose organic growth (+26.7%) is mainly due to the increased sales of a thin getter film that can be deposited directly on silicon slices used for the production of sensors for MEMS Market (PageWafer® technology) has balanced the reduction recorded in the other sectors, mainly in Vacuum Systems business and in the support after-sale services linked to the Pure Gas Handling technologies.

Revenues of the Shape Memory Alloys Business Unit were equal to 4,161 thousand euro, significantly increased (+51,8%, positive exchange rate effect +2.1% included) compared to the previous year. The increase is mainly due both to the higher revenues in respect of the joint venture Actuator Solutions GmbH and the growth of sales volume of Lainate plant.

Revenues of the Business Development Business Unit amounted to 605 thousand euro, up by 492 thousand euro compared to the previous year. Sales increase is almost fully due to OLED technology products – anyway still continuing at start up level due to the delay in the commercial development of OLED based TV technology.

The following table shows the percentage of sales by Business Unit: strong increase in sales of Shape Memory Alloys Business Unit has determined that the incidence rate of this segment has exceeded the one of the Industrial Applications Business Unit

A breakdown of revenues by geographical location of customers is provided below:

(thousands of euro)
Geographical Area	2015	%	2014	%	Difference	Difference %
Italy	262	3,1%	441	6,4%	(179)	-40,6%
Other EU and Europe	5.005	59,0%	3.770	54,3%	1.235	32,8%
North America	1.619	19,1%	1.431	20,6%	188	13,1%
Japan	87	1,0%	127	1,8%	(40)	-31,5%
P. R. of China	72	0,8%	66	1,0%	6	9,1%
South Korea	131	1,5%	63	0,9%	68	107,9%
Taiwan	1.053	12,4%	490	7,1%	563	114,9%
Other Asian	255	3,0%	549	7,9%	(294)	-53,6%
Other	4	0,0%	4	0,1%	0	0,0%
Total Net Sales	8.488	100,0%	6.941	100,0%	1.547	22,3%

The following table shows the gross profit by Business Unit in 2015 and 2014:

(thousands of euro)

Business Unit	2015	2014	Difference	Difference %
Industrial Applications	1.484	1.131	353	31,2%
Shape Memory Alloys	1.210	645	565	87,5%
Business Development & Corporate Costs	(352)	(355)	3	0,8%
Gross profit	2.342	1.421	921	64,8%

Gross profit was positive and equal to 2,342 thousand euro in 2015 compared to 1,421 thousand euro in 2014, thanks both to the positive impact of currency trends and to the improvement in the product mix. We highlight how the industrial gross margin has increased from 20.5% to 27.6% during 2015

In the Industrial Applications Business Unit, the greater relative weight of the Sensors & Detectors business, characterized by products which are more profitable than other sectors of the Business Unit, has led to an increase in average margins (39.9% vs. 30.5%).

In the Shape Memory Alloys Business Unit, the significant sales growth has allowed the realization of positive economies of scale , with a gross profit almost doubled ( 1,210 thousand euro, compared to 645 in 2014) and gross margin increased from 23.5% to 29.1%.

The result of the Business Development Business Unit remained almost stable, recording a gross operating loss of -352 thousand euro: this data is consistent with the activities of this business, characterized by development projects and pilot production lines, with frequent interaction with research

The following table shows the operating income by Business Unit in 2015 and 2014:

(thousands of euro)
Business Unit	2015	2014	Difference	Difference %
Industrial Applications	(2.703)	(2.260)	(443)	-19,6%
Shape Memory Alloys	(438)	(924)	486	52,6%
Business Development & Corporate Costs	(13.902)	(11.291)	(2.611)	-23,1%
Operating Income (Loss)	(17.043)	(14.475)	(2.568)	-17,7%

The operating loss for 2015 was equal to -17,043 thousand euro, recording a decrease versus -14 475 thousand euro in 2014.

Despite the aforementioned improvement in gross profit, operating income was negatively impacted by higher operating expenses, by the significant reduction of royalty income from third parties, and finally by a provision for risks lawsuits (689 thousand euro) , made during the year 2015 (and for which further details please refer to Note no. 26).

The research and development expenses amounted in 2015 to 8,097 thousand euro, decreasing compared to the previous year (-7.7 %) as a result of a greater focus on the projects portfolio, as well as a slight increase in charge-backs to subsidiaries.

Both selling and marketing expenses and, to a greater extent, general and administrative expenses showed an increase, particularly concerning personnel cost - mainly as a result of wage increases aimed at the recovery of inflation - and the cost of the administrative bodies. Both items are relevantly impacted by higher accruals for the variable components of salaries and fees, estimated in growth, in line with the trend of economic performance.

Dividends, net financial income, net foreign exchange gains and write-downs of investments in subsidiaries totally amounted to 22,869 thousand euro in 2015, showing an increase compared to 14,975 thousand euro in the previous year, mainly due to higher dividends collected by the subsidiaries (equal to 24,295 thousand euro in 2015 compared with 18,041 thousand euro in 2014).

The year 2015 closes therefore with a pre -tax profit of 5,826 thousand euro, compared with 500 thousand euro last year.

The taxes for the year of 2015 recorded a total surplus of 33 thousand euro, which compares with a total positive balance of 977 thousand euro in 2014.

The figure for 2015 includes a negative adjustment of 1,563 thousand euro, related to the restatement of deferred tax assets accrued by the Italian companies of the SAES Group, using the new corporate income tax IRES) rate of 24%, that will come into effect from 2017.

It is finally worth mentioning that income taxes were penalized by a provision against tax risk equal to 500 thousand euro in 2014, made by the Parent Company and related to the assessment on the 2005 Company's tax return.

We lastly highlight that the Company, according to the current Group organizational structure, has prudentially decided to suspend, as well as other Italian subsidiaries participating to the National Tax Group Consolidation, the recognition of deferred tax assets on tax losses recorded in 2015, in line with what already happened in 2014. Please refer to Note no. 11 for more details.

Net Income (loss) is shown in the following chart:

Net Income for year 2015 was equal to 5,859 thousands of euro, compared to 1,477 thousands of euro in 2014. This increase is mainly due to higher dividends received from the subsidiaries compared with the previous year, more than compensating the variance in operating loss.

Net Financial Position – Investments – Other information

A breakdown of the items making up the Company net financial position is provided below:

(thousands of euro)

	December 31	December 31	Difference
	2015	2014
Cash on hand	8	5	3
Cash equivalents	3.392	315	3.077
Total cash and cash equivalents	3.400	320	3.080
Current financial assets*	8.771	10.063	(1.292)
Bank overdraft	(5.009)	(30.719)	25.710
Current portion of long term debt	(4.944)	(1.404)	(3.540)
Other current financial liabilities*	(9.908)	(12.165)	2.257
Other financial debt	(1.293)	(28)	(1.265)
Total current liabilities	(21.154)	(44.316)	23.162
Current net financial positions	(8.983)	(33.933)	24.950
Long term debt, net of current portion	(17.341)	(5.565)	(11.776)
Total non current liabilities	(17.341)	(5.565)	(11.776)
Net financial position	(26.324)	(39.498)	13.174

* current financial payables to and receivables from Group companies (including Actuator Solutions GmbH)

Net Financial position showed a negative amount of -26,324 thousand euro, as a result of cash and cash equivalents of 3,400 thousand euro and net financial liabilities of -29,724 thousand euro as of December 31, 2015 compared to net debt of -39.498 thousand euro as of December 31, 2014. The improvement compared to last year, beside the contribution of the operational management, is due to the increase in dividends received from the subsidiaries as well as financial income deriving from the share capital reduction of some subsidiaries (please, refer to the previous paragraph "Report on operations" for further details)

In 2015 increases in property, plant and equipment came to 1,334 thousand euro, in line with the total amount of 2014 of 1.519 thousand euro

The composition of net sales and costs (cost of sales and operating expenses) by currency is provided here below:

Transactions with Group Companies

Transactions with Group companies are identified on the basis of IAS 24 revised and article 2359 of the Italian Civil Code. Transactions with subsidiaries continued in 2014. Transactions were undertaken with such counterparties as part of the Company's ordinary operations. They were predominantly commercial in nature and involved the purchase and sale of raw materials, semi-finished goods, finished goods, machinery, tangible assets and services of various kind and were undertaken under at arm's-length financial conditions. Interest-bearing cash pooling agreements and loan agreements are in force with several Group companies. All agreements were entered into at arm's length conditions.

The main transactions with the subsidiaries, associates or joint ventures of the SAES Group were the following:

SAES ADVANCED TECHNOLOGIES S.p.A., Avezzano, AQ (Italy)

Revenue from royalties related to the sale of getters for industrial applications; charge-back related to the use of software licenses centrally purchased; charge-back of centrally managed insurance costs; revenue for charge-back of centralized group services; purchase of finished products for resale; purchases of raw materials. In addition, an interest-bearing cash pooling agreement has been entered into with SAES Advanced Technologies S.p.A

We highlight that on September 30, 2015, the option to join a new tax consolidation program between SAES Getters S.p.A., SAES Advanced Technologies S.p.A., E.T.C. S.r.l. and SAES Nitinol S.r.l., with the Parent Company as consolidator, was exercised. This new tax consolidation has been valid starting from January 1, 2015.

SAES GETTERS USA, Inc., Colorado Springs, CO (USA)

Getter sales; purchases of finished products; charge-back of centrally managed insurance costs; revenue for charge-back of centralized group services and revenue for the use of SAES brand and royalties for the licensing of the PageLid® and PageWafer® technology. In addition, an interest-bearing cash-pooling agreement is existing.

SAES PURE GAS, Inc., San Luis Obispo, CA (USA)

Revenues on licensing rights for purifier sales; charge-back of centrally managed insurance costs; revenues on charge-back of centralized group services, including Audit costs and patent management.

SAES SMART MATERIALS, Inc., New York, NY (USA)

Revenues deriving from charge-back of centrally managed insurance costs; revenues on charge-back of centralized group services, including patent management.

SPECTRA-MAT. INC., Watsonville, CA (USA)

Revenues on charge-back of centralized group services; charge-back of centrally managed insurance and audit costs.

MEMRY CORPORATION, Bethel, CT (USA)

Purchase of raw materials; revenues on charge-back of centralized group services; charge-back of centrally managed insurance costs.

SAES GETTERS KOREA Corporation – Seoul (South Korea)

Revenues arising from the charge-back of centrally managed insurance costs; revenues on charge-back of centralized group services; commission expenses related to commercial transactions. In addition, an interestbearing financing through borrowing is in place

SAES GETTERS (NANJING) CO., LTD. – Nanjing (P.R. of China)

Revenues on charge-back of centralized group services; charge-back of centrally managed insurance costs.

MEMRY GmbH, Weil am Rhein (Germany) (former Dr.-Ing Mertmann Memory-Metalle GmbH) Purchases of raw materials; charge-back of centralized group services. In addition, an interest-bearing financing through borrowing is in place.

SAES GETTERS INTERNATIONAL LUXEMBOURG S.A., Luxembourg (Luxembourg)

An interest-bearing loan agreement is existing. During 2015, the Company has been renewed the mandate conferred for the management of derivative transactions for hedging on the Korean Won currency.

E.T.C. S.r.l., Bologna (Italy)

Revenues on charge-back of general and administrative services, including management of patents. In addition, an interest-bearing cash-pooling agreement is in place. The Company has leased to the subsidiary some specific equipment for research and development projects. We highlight that on September 30, 2015, the option to join a new tax consolidation program between SAES Getters S.p.A., SAES Advanced Technologies S.p.A., E.T.C. S.r.l. and SAES Nitinol S.r.l., with the Parent Company as consolidator, was exercised. This new tax consolidation has been valid starting from January 1, 2015.

SAES Nitinol S.r.l. – Lainate (Italy)

An interest-bearing cash-pooling agreement is existing with the Company. We highlight that on September 30, 2015, the option to join a new tax consolidation program between SAES Getters S.p.A., SAES Advanced Technologies S.p.A., E.T.C. S.r.l. and SAES Nitinol S.r.l., with the Parent Company as consolidator, was exercised. This new tax consolidation has been valid starting from January 1, 2015.

SAES GETTERS EXPORT CORP. – Wilmington, DE (USA) No transactions.

To clarify what above, it should be noted that the Company has entered into agreements for the provision of commercial, technical, information technology, legal, and financial services and the study of specific projects with the following subsidiaries: SAES Advanced Technologies S.p.A., E.T.C. S.r.l., MEMRY GmbH, SAES Getters USA, Inc., Inc., SAES Pure Gas, Inc., SAES Getters Korea Corporation, SAES Getters (Nanjing) Co., Ltd., Spectra-Mat, Inc., SAES Smart Materials, Inc., Memry Corporation.

The Company manages and coordinates SAES Advanced Technologies S.p.A., E.T.C. S.r.l. and SAES Nitinol S.r.l., pursuant to Article 2497 et seq. of the Italian Civil Code.

The Company provides bank guarantees to its subsidiaries, as described in the note concerning contingent liabilities and commitments.

Comments on the most significant transactions carried out during 2015 are given in the Explanatory Notes, as part of the analysis on the composition of the individual items of the Financial Statements.

(thousands of euro)
Company	Receivables	Payables	Revenues	Expenses	Memorandum
					accounts
	2015	2015	2015	2015	2015 *
SAES Advanced Technologies S.p.A.	1.723	144	3.607	426	0
SAES Getters USA, Inc.	413	28	1.735	189	4.000
SAES Getters America, Inc.	0	0	0	0	0
SAES Pure Gas, Inc.	932	16	1.092	133	0
SAES Smart Materials, Inc.	58	95	68	324	0
Spectra-Mat, Inc.	59	0	63	0	0
Memry Corporation	16	56	72	649	10.104
SAES Getters Korea Corporation	22	0	143	187	0
SAES Getters (Nanjing) Co.Ltd.	47	0	102	2	0
Memry GmbH	0	0	192	0	0
SAES Getters International S.A.	0	0	171	71	0
E.T.C. S.r.l.	1.593	0	1.308	1	7
SAES Nitinol S.r.l.	0	0	228	0	0
Actuator Solutions GmbH	233	0	0	0	2.531
Total	5.096	339	8.781	1.982	16.642

Financial transactions with the subsidiaries, associates or joint ventures of the SAES Getters Group are summarized below:

*includes guarantees issued by SAES Getters S.p.A.

With reference to IAS 24 (revised), the following Related Parties other than subsidiaries, associates or joint ventures are identified:

• S.G.G. Holding S.p.A., the controlling company. It is the Company's majority shareholder. As of the reporting date, it helds 6,943,047 ordinary shares, representing 47.324% of ordinary capital with voting rights.

As regards the majority interest held by S.G.G. Holding S.p.A., we highlight that said company does not manage or coordinate SAES Getters S.p.A. pursuant to Article 2497 of the Italian Civil Code. On the basis of the assessments conducted by the Board of Directors, it was determined that S.G.G. Holding S.p.A. does not play any role in defining the annual budget, long-term strategic plans or investment choices, does not approve specific significant transactions undertaken by the Company and its subsidiaries (acquisitions, disposals, investments, etc.) and does not coordinate business initiatives and actions in the sectors in which the Company and its subsidiaries act. Furthermore, SAES Getters S.p.A. is entirely independent in its organization and decision-making and acts in an independent negotiating capacity in its dealings with customers and suppliers.

It should further be noted that, pursuant to article 2428, paragraphs 3 and 4, of the Italian Civil Code, the Company does not own shares of the controlling company, either directly or through trusts or intermediaries. During 2015, no transactions were undertaken involving the purchase or sale of shares of the controlling company.

On May 27, 2015, following the decrease of the stake of S.G.G. Holding S.p.A. in SAES Getters S.p.A. below the threshold of 50%, the prerequisite to access to the tax consolidation program with S.G.G. Holding S.p.A. as consolidating company ended, as envisaged by the combined provisions of articles 117 and 120 of the Income Tax Code ("TUIR").

Debit/credit positions to S.G.G. Holding S.p.A. coming from the national fiscal consolidation have been completely settled during 2015.

• Actuator Solutions GmbH: a joint venture 50% owned by the two groups SAES and Alfmeier Präzision respectively, aimed at the development, production and distribution of actuators based on the SMA technology.

- Actuator Solutions Taiwan Co., Ltd., a company based in Taiwan, wholly owned by the joint venture Actuator Solutions GmbH, aimed at the development and marketing of SMA devices for image focus and stabilization of tablet and smartphone cameras. The economics and financial transactions include income from the sale of semi-finished goods; an agreement for charge-back of commercial services, research, development and administrative costs is in place.

• SAES RIAL Vacuum S.r.l., a joint venture between SAES Getters S.p.A. and Rodofil snc, established at the end of 2015 with the aim of creating an Italian technological and manufacturing center of absolute level in the design and production of components and integrated vacuum systems for accelerators, in the research and industrial systems and devices, combining at the maximum level SAES expertise in the field of materials, of vacuum and innovation with Rodofil experience in designing, assembly and thin machining.

• Dr. Michele Muccini, shareholder of SAES Getters S.p.A. in E.T.C. S.r.l., with a percentage of share capital of 4%. In particular, we highlight that, until December 31, 2015, SAES Getters S.p.A. has fully repaid E.T.C. S.r.l. losses also on behalf of Dr. Muccini, maintaining unchanged his percentage of ownership. The capital contribution made by the Parent company on behalf of Dr. Muccini on March 11, 2015 was equal to about 62 thousand euro .

• Managers with Strategic Responsibilities: these include the members of the Board of Directors, including non-executive directors and the members of the Board of Statutory Auditors.

Moreover, the Corporate Human Resources Manager, the Corporate Operations Manager, the Group Legal General Counsel, the Corporate Research Manager1 and the Group Administration, Finance and Control Manager are considered managers with strategic responsibilities. Their close relatives are also considered Related Parties.

The following table shows total values of transactions occurred with related parties during 2015 and 2014:

(thousands of euro)
December 31, 2015	Net sales	Research and development expenses (*)	Selling expenses (*)	General and administrative expenses (*)	General and administrative expenses	Financial Income (expenses)	Trade receivables	Trade payable	Tax consolidation receivables from Controlling Company	Tax consolidation payables from Controlling Company
S.G.G. Holding S.p.A.
Actuator Solutions GmbH	1.275	153	172	28			233
Actuator Solutions Taiwan Co., Ltd.					3			3
Total	1.275	153	172	28	3		233	3

(*) costs recovery

(thousands of euro)
December 31, 2014	Net sales	Research and development expenses (*)	Selling expenses (*)	General and administrative expenses (*)	General and administrative expenses	Financial Income (expenses)	Trade receivables	Trade payable	Tax consolidation receivables from Controlling Company	Tax consolidation payables from Controlling Company
S.G.G. Holding S.p.A.									2.284
Actuator Solutions GmbH	915	323	127	28			187
Actuator Solutions Taiwan Co., Ltd.					(12)			(12)
Total	915	323	127	28	(12)		187	(12)	2.284

The following table shows the compensation provided to key management personnel as identified above:

(thousands of euro)	2015	2014
Short term employee benefits	3.102	2.403
Post employment benefits	0	0
Other long term benefits	490	156
Termination benefits	503	23
Payments in shares	0	0
Other benefits	0	0
Total remuneration provided to managers with strategic responsibilities	4.095	2.582

On December 31, 2015 the amounts payable to Managers with strategic responsibilities as defined above displayed in the financial statement, was of 3,085 thousand euro, to be compared to a payable of 1,982 thousand euro as at December 31, 2014.

According to Consob notices of February 20, 1997 and February 28, 1998 and IAS 24 revised, we highlight that also in 2015 all related party transactions were performed within the Company's ordinary operations and at arm's-length conditions

¹ With effect from 10 June 2013, with a view to containing costs and optimizing organizational processes, the role of Corporate Research Manager was abolished and the responsibilities of the latter were transferred to the Chief Technology Innovation Officer, in the person of Massimo della Porta.

Other Information related to the Company

For information related to the performance of subsidiaries, reference is made to the Consolidated Financial Statement and to the "Summary of main data of subsidiaries' Financial Statements".

The Company has two branch offices, one in Taoyuan City (Taiwan) and one in Tokyo (Japan).

The disclosures concerning ownership structure required under paragraph 1 of article 123-bis of Italian Legislative Decree No. 58/98 (Consolidated Finance Act) are provided in the Company's Corporate Governance Report, which is included in the financial statement package and has been published in the Corporate Documentation area of the Investor Relations section of the Company's website, www.saesgroup.com.

Going concern

The financial statements have been prepared on an ongoing concern basis because, despite a difficult economic and financial environment, we believe that there aren't any significant uncertainties (as defined in paragraph no. 25 of IAS 1 - Presentation of Financial Statements) surrounding the business continuity. This context, as previously highlighted in the paragraphs related to the risks to which the Company is subject, can be only partially influenced by the Management of the Company, being it mainly the result of external variables.

Based on the best estimates available to date, the Company has approved a three-years business plan that includes the strategies envisaged by the Company's Management in order to succeed in achieving the defined business goals in this difficult economic environment. These strategies, that include also an increase in the production activities undertaken in Italy, will allow the full recovery of the corporate activities and, in particular, of the deferred tax assets recognized in the balance sheet.

Subsequent events

On January 4, 2016 a new contract for forward sale of euros was entered into, in order to limit the currency risk resulting from the effect of the oscillation of the Korean won on the balance of the financial credit in euro that SAES Getters Korea Corporation held towards the Company.

Such contract has a notional value of 550 thousand euro, will expire on January 27, 2016 and provides for a forward exchange rate equal to 1,304.00 against the euro.

On January 12, 2016 the Company granted a 49 thousand euro loan to the joint venture SAES RIAL Vacuum S.r.l., in order to financially support the newly established Company's operations. Such loan, which did not involve any predefined expiration date, but, according to the contract, allows for a flexible reimbursement upon formal request of the Company, will earn an interest indexed to the three months Euribor rate, plus a spread of 2.50%, to be paid by the joint venture on an annual basis.

In order to protect the results and the profitability from the fluctuation of the exchange rates, on January 18, 2016 and soon thereafter, on February 29, 2016, some contracts for the forward sale of Japanese yen were entered into, for a total notional value of 340 million JPY; such contracts provide for an average forward exchange rate equal to JPY 126.5850 against the euro and will be in force for the entire 2016. Similar contracts, for a notional value of 12.5 million USD, were entered into on February 18, 2016, with an average forward exchange rate equal to 1.1198 against the euro. Also these contracts will be in force for the entire 2016.

On January 19, 2016, as envisaged by the contract signed on December 23, 2015 with Rodofil s.n.c., the Company acquired a further 39% of the joint venture SAES RIAL Vacuum S.r.l., for a pre-determined price equal to 1.3 million euro. The total investment of the Company in the joint venture is currently equal to 49% of its share capital.

On February 26, 2016 the Company acquired the remaining 4% of the share capital of E.T.C. S.r.l. from the minority shareholder, for a consideration of 249 thousand euro. Following such acquisition, SAES Getters S.p.A. is now the sole shareholder of E.T.C. S.r.l.

On March 3, 2016 the Extraordinary Shareholders' Meeting of the Company approved the amendment to art. 11 of the Company's By-laws, with the introduction of the increase of the voting right and the assignment of two votes for each ordinary share of the Company held for a period of at least 24 months on a continuous basis, according to law no. 116, dated August 11, 2014, and of art. 127-quinquies of the TUF. This increase is not extended to the holders of savings shares, as they do not have any voting right, or the right to attend the shareholders' meetings.

The introduction of the increase of the voting right will help to support the Company's growth by encouraging the medium-long term investment in the share capital of the Company and thus the stability of the shareholding structure, which has always been a strength and it is in line with the mid-long term interests of SAES Group.

On March 14, 2016 the Company approved a contribution of 130 thousand euro in favor of E.T.C. S.r.l., equal to the difference between the loss incurred in 2015 (-1,580 thousand euro2 ) and the estimated one for the same period at the beginning of the year and already covered by the Company on March 11, 2015 (-1,450 thousand euro). Simultaneously, the Company approved a further capital contribution in favor of E.T.C. S.r.l., equal to 1,420 thousand euro, to cover the expected losses of 2016.

On March 14, 2016 the Company approved a contribution equal to 30 thousand euro in favor of SAES Nitinol S.r.l. to cover the loss incurred by it in 2015 and to reconstitute its integrally eroded share capital. Simultaneously, the Company approved a further capital contribution in favor of SAES Nitinol S.r.l., equal to 140 thousand, to cover its possible future losses.

Proposal of approval of the Financial Statements and of dividend distribution

Dear Shareholders,

We hereby submit the following proposed resolution for your approval:

"The Ordinary Shareholders' Meeting,

- having examined the figures of the Financial Statements of SAES Getters S.p.A. at December 31 2015, together with the Management Report of the Board of Directors, the Report of the Board of Statutory Auditors, the Report of the Auditing Firm as well as the other documents required by law;

- having noticed that the legal reserve has reached 20% of the share capital;

- having taken note of the results of the year ended on December 31, 2015, given the high capital base of the Company;

Resolves the following:

- to approve the Financial Statements of SAES Getters S.p.A. at December 31, 2015, which report a net income of 5,859,493.93 euro;

- to entirely distribute the net income of the year, for a total amount of 5,859,493.93 euro, subject to rounding, and therefore attributing to the satisfaction of the rights of the savings shares and of the

² Resulting from the Financial Statements prepared according to the National Accounting Principles.

ordinary shares, pursuant to Article 26 of the By-laws: (i) a dividend of 0.276799 euro per savings share, that includes the preferred dividend of 0.138549 euro for the year 2015, and (ii) a dividend of 0.260173 euro per ordinary share, giving notice that in this way the rule of the minimum increase of 3% of the implied book value to which savings shares are entitled to compared to ordinary shares has been respected;

- to distribute a portion of the available reserve "Retained earnings" equal to 2,642,181.64 euro, in equal measure to the ordinary shares and savings shares, giving a dividend of 0.119827 euro per savings share and per ordinary share;

				euro
Net income for the period				5.859.493,93
			(Net exchange gains - unrealised and undistributable)	0,00
Distributable Net income				5.859.493,93
From distributable Net income:
			To savings shares only, pursuant to art. 26 of the By-laws
- euro			0,276799 (including the increase of euro 0,016626 and of euro 0,138549 as
			full recognition of preferred dividend for the year 2015) for each
	n.	7.378.619	savings shares	2.042.394,36
			To ordinary shares only pursuant to art. 26 of the By-laws
- euro			0,260173 for each
	n.	14.671.350	ordinary shares	3.817.089,14
- euro			roundings	10,43
				5.859.493,93
From Retained earnings:
			in equal measure to ordinary shares and savings shares
- euro			0,119827 for each
	n.	7.378.619	savings shares	884.157,78
- euro			0,119827 for each
	n.	14.671.350	ordinary shares	1.758.023,86
				2.642.181,64
For a total dividend of:
- euro			0,396626 for each
	n.	7.378.619	savings shares	2.926.552,14
- euro			0,380000 for each
	n.	14.671.350	ordinary shares	5.575.113,00
		For a total maximum distribution of euro:		8.501.665,14

- to pay such amounts in favor of the entitled ordinary shares and savings shares that will be outstanding at the date of May 3, 2016 (Record date) with effect from May 4, 2016, with the detachment of the coupon no. 32; the share will trade ex-dividend starting from May 2, 2016;

- to allocate any rounding in the payment to the Retained earnings reserve;

- to grant the Chairman, the Vice Chairman and the Chief Executive Officer separately, all the powers necessary for the implementation of this resolution".

Lainate (MI), March 14, 2016

per the Board of Directors

Dr Eng. Massimo della Porta Chairman

Separate financial statements of the SAES Getters S.p.A. for the year ended December 31, 2015

Statement of Profit and Loss

	Notes	2015	2014
(euro)
Third party net sales Intercompany net sales		6.905.654 1.582.585	5.942.404 999.067
Total net sales	4	8.488.239	6.941.471
Third party cost of sales		(4.733.379)	(4.263.710)
Intercompany cost of sales		(1.413.344)	(1.256.276)
Total cost of sales	5	(6.146.723)	(5.519.986)
Gross profit		2.341.516	1.421.485
Research & development expenses	6	(8.097.034)	(8.770.991)
Selling expenses	6	(4.658.574)	(4.308.292)
General & administrative expenses	6	(12.757.644)	(10.169.277)
Total operating expenses		(25.513.252)	(23.248.560)
Royalties third party		902.330	1.842.736
Royalties Intercompany		1.565.193	1.382.193
Other third party income (expenses), net		(885.822)	(46.791)
Other intercompany income (expenses), net		4.547.183	4.174.399
Total other income (expenses), net	7	6.128.884	7.352.537
Operating income (loss)		(17.042.852)	(14.474.538)
Dividends	8	24.295.297	18.040.529
Third party financial income		33.529	1.121
Intercompany financial income		299.446	376.571
Total financial income	8	332.975	377.692
Third party financial expenses Intercompany financial expenses		(1.124.219) (222.787)	(1.251.215) (267.296)
Total financial expenses	8	(1.347.006)	(1.518.511)
Foreign exchange gains (losses), net	9	1.173.001	73.215
Write down of intercompany investments	10	(1.585.233)	(1.998.128)
Income before taxes		5.826.182	500.259
Income taxes	11	33.312	976.986
Current taxes		1.274.936	1.025.031
Deferred taxes		(1.241.624)	(48.045)
Net income (loss) from continuing operations		5.859.494	1.477.245
Net income (loss) from discontinuing operations		0	0
Net income (loss)		5.859.494	1.477.245

Statement of comprehensive income

	Notes	2015	2014
(euro)
Net income (loss) for the period		5.859.494	1.477.245
Income (loss) from transactions with Group Companies	23	(419.933)	0
Actuarial gain (loss) on defined benefit plans	25	(31.425)	(65.850)
Income tax		(14.450)	18.109
Actuarial gain (loss) on defined benefit plans, net of taxes		(45.875)	(47.741)
Total components that will not be reclassified to the profit (loss) in subsequent periods		(465.808)	(47.741)
Other comprehensive income (loss), net of taxes		(465.808)	(47.741)
Total comprehensive income (loss), net of taxes		5.393.686	1.429.504

Statement of financial position

		December 31	December 31
(euro)	Notes	2015	2014
ASSETS
Non Current Assets
Property, plant and equipment, net	12	14.342.745	15.122.451
Intangible assets, net	13	555.012	958.107
Investments and other financial activities	14	68.015.584	74.241.997
Non current tax consolidation receivables	20	0	287.765
Deferred tax assets	15	11.448.464	12.704.538
Other long term assets	16	49.247	540.491
Total Non Current Assets		94.411.052	103.855.349
Current Assets
Inventory	17	1.006.761	695.458
Third party trade receivables		1.378.519	1.509.157
Intercompany trade receivables		4.863.054	4.447.743
Trade receivables	18	6.241.573	5.956.900
Derivative instruments evalutated at fair value	31	0	1.890
Intercompany financial credits	19	8.770.851	10.063.378
Tax consolidation receivables	20	2.585.056	1.996.408
Prepaid expenses, accrued income and other	21	6.063.398	6.077.788
Cash and cash equivalents	22	3.399.569	319.662
Total Current Assets		28.067.208	25.111.484
Total Assets		122.478.260	128.966.833

		December 31	December 31
	Notes	2015	2014
(euro) SHAREHOLDERS' EQUITY AND LIABILITIES
Capital stock		12.220.000	12.220.000
Share issue premium		41.119.940	41.119.940
Tresury shares		0	0
Legal reserve		2.444.000	2.444.000
Sundry reserves and retained earnings		8.072.920	10.538.156
Net income (loss) for the period		5.859.494	1.477.245
Shareholders' Equity	23	69.716.354	67.799.341
Non Current Liabilities
Non current financial liabilities	24	17.341.343	5.564.600
Staff leaving indemnity and other employee benefits	25	4.597.422	4.216.166
Total Non Current Liabilities		21.938.765	9.780.766
Current Liabilities
Third party trade payables		2.912.540	2.225.611
Intercompany trade payables		338.238	388.097
Trade payables	27	3.250.778	2.613.708
Derivative instruments evalutated at fair value	31	21.767
Intercompany financial payables	28	9.886.462	12.167.203
Other payables	30	4.058.138	3.481.000
Payables for income taxes	32	418.724
Current provisions	26	1.941.546	973.552
Bank overdraft	33	5.008.897	30.718.798
Current portion of long term debt	24	4.944.312	1.403.879
Other Financial Debts	29	1.292.517	28.586
Total Current Liabilities		30.823.141	51.386.726
Total Liabilities and Shareholders' Equity		122.478.260	128.966.833

Cash Flow Statement

	2015	2014
(euro)
Cash flows provided from operating activities
Net income from continuing operations	5.859.494	1.477.245
Net income from discontinuing operations	0	0
Current income taxes	(1.274.936)	(1.025.031)
Change in deferred income taxes	1.241.624	48.045
Depreciation of property, plant and equipment	2.064.915	2.340.387
Amortization of intangible assets	414.168	392.089
Capital gains (losses) on sales of intangible assets	(34.691)	5.235
Write down of assets	52.226	0
Income (Cost) from investments	(22.710.064)	(16.042.401)
Financial revenues (expenses), net	(158.970)	1.067.604
Accrual for termination indemnities	693.726	390.219
Accrual (utilization) for risk and contingencies, net	941.471	260.836
	(12.911.037)	(11.085.772)
Change in operating assets and liabilities
Cash increase (decrease) in :
Account receivables and other receivables	220.961	(2.202.883)
Inventory	(311.303)	(70.364)
Trade account payables	637.070	(259.293)
Other current payables	954.161	(231.977)
	1.500.889	(2.764.517)
Payments of termination indemnities and similar obligations	(30.748)	(63.268)
Payments of debit interest and other financial expenses	(825.700)	(974.642)
Interest and other financial receipts	47	613
Income taxes received (paid)	1.042.955	1.830.151
Cash flows from operating activities	(11.223.594)	(13.057.435)
Cash flows used by investing activities
Purchase of property, plant and equipment	(1.334.000)	(1.519.447)
Proceeds from sales of property, plant and equipment	37.399	1.604
Dividends received net of witholding tax	23.400.532	17.587.349
Purchase of intangible assets	(459.473)	(4.000)
Capital contributions to subisdiaries	6.033.871	(2.422.511)
Decrease (increase) of current financial assets	23.657	(1.890)
Cash flows from investing activities	27.701.986	13.641.105
Cash flows used by financing activities
Proceeds from / (repayments of) short term financial debts	(23.715.673)	(2.823.900)
Proceeds from long term financial debts	17.513.472	7.000.000
Proceeds from short term financial debts	(2.400.000)
Proceeds from / (repayments of) Intercompany financial debts	(988.214)	(1.694.595)
Interest paid on loans	(311.000)
Dividends paid	(3.476.674)	(3.430.172)
Purchase of treasury shares	0	0
Repayments of financial debts Cash flow from financing activities	(20.396) (13.398.485)	(8.195) (956.862)
Exchange gains (losses) from balances conversion into foreign currencies	0	0
Increase (decrease) in cash equivalents, net	3.079.907	(373.192)
Cash and equivalents at the beginning of the period	319.662	692.854
Cash and cash equivalent, net, at the end of the period	3.399.569	319.662

Statement of changes in the shareholders' equity as at December 31, 2015

(thousands of euro)
					Sundry reserves and retained earnings
	apital stock Ω	Share issue premium	ы ۰ 凊 죿 ÷ ⊢	Northern Ī	E Š $\bar{\mathbb{E}}$ Reservel shares	reserve Cash flow hedge r	ieserve Revaluation	a	ne Po	÷ income (loss) for point ž	ghareholders'equity š
Balance at December 31, 2014	12.220	41.120	$\bf{0}$	2.444	$\bf{0}$	$\bf{0}$	1.727	8.811	10.538	1.477	67.799
Appropriation of 2013 result								1477	1477	(1.477)	$\mathbf{0}$
Dividends paid								(3.476)	(3.476)		(3.476)
Revocation of treasury shares									$\mathbf{0}$		$\mathbf{0}$
Income (loss) from transactions with Group companies								(420)	(420)		(420)
Net income for the period									$\mathbf 0$	5.859	5.859
Other comprehensive income (loss)								(46)	(46)		(46)
Balance at December 31, 2015	12.220	41.120	$\bf{0}$	2.444	$\bf{0}$	$\bf{0}$	1.727	6.346	8.073	5.859	69.716

Statement of changes in the shareholders' equity as at December 31, 2014

(thousands of euro)
						Sundry reserves and retained earnings
	apital stock O)	Share issue premium	h. ä 盲 豪 ۰. a. ⊢	egal reserve	as ur ٠ ۰ ē Reservel shares	reserve Cash flow hedge i	TARSAID Revaluation	a Bi	Total L	Net income (loss) for the period	shareholders'equity š
Balance at December 31, 2013	12.220	41.120	$\bf{0}$	2.444	$\bf{0}$	$\bf{0}$	1.727	6.958	8.685	5.331	69.800
Appropriation of 2013 result								5.331	5331	(5.331)	$\mathbf 0$
Dividends paid								(3.430)	(3.430)		(3.430)
Revocation of treasury shares									$\mathbf 0$		$\mathbf{0}$
Income (loss) from transactions with Group companies									$\mathbf 0$		$\mathbf{0}$
Net income for the period									$\mathbf 0$	1.477	1477
Other comprehensive income (loss)								(48)	(48)		(48)
Balance at December 31, 2014	12.220	41.120	$\bf{0}$	2.444	$\bf{0}$	$\bf{0}$	1.727	8.811	10.538	1.477	67.799

Summary of main data of subsidiaries' Financial Statements as of December 31,2015

	Subsidiaries
	SAES	SAES Getters	SAES Getters	SAES Getters
	Advanced	USA, Inc.	Korea	International
	Technologies		Corporation	Luxembourg
	S.p.A.			S.A.
	(Thousands of	(U.S. Dollars)	(Thousands of	(Thousands of
	Euro)		Won)	Euro)
Property, plant and equipment, net	15.803	1.290.953	4.973	0
Intangible assets, net	0	16.078	0	0
Other non current assets	648	63.105.057	175.523	31.824
Current assets	12.275	11.499.091	3.045.514	5.559
Total Assets	28.726	75.911.179	3.226.010	37.383
Shareholders' equity	18.783	28.107.120	2.991.372	37.362
Non current liabilities	2.130	1.688.085	0	0
Current liabilities	7.814	46.115.974	234.638	21
Total Liabilities and Shareholders' Equity	28.726	75.911.179	3.226.010	37.383

	Subsidiaries
	SAES	SAES Getters	SAES Getters	SAES Getters
	Advanced	USA, Inc.	Korea	International
	Technologies		Corporation	Luxembourg
	S.p.A.			S.A.
	(Thousands of	(U.S. Dollars)	(Thousands of	(Thousands of
	Euro)		Won)	Euro)
Total net sales	33.676	13.831.248	1.189.829	0
Cost of sales	(16.959)	(8.585.342)	(911.424)	0
Gross profit	16.717	5.245.907	278.405	0
Research & development expenses	(600)	(92.628)	0	0
Selling expenses	(710)	(1.799.897)	(190.056)	0
General &administrative expenses	(2.480)	(448.238)	(515.293)	(56)
Total operating expenses	(3.790)	(2.340.763)	(705.349)	(56)
Other income (expenses), net	(3.312)	144.054	(18.998)	0
Royalties	0	0	0	0
Operating income (loss)	9.614	3.049.198	(445.942)	(56)
Interest and other financial income (expenses), net	(71)	7.009.595	261.260	35
Foreing exchange gain (loss), net	(520)	22.063	(585.940)	405
Income before taxes	9.023	10.080.855	(770.622)	384
Income taxes	(3.062)	(2.951.260)	0	(13)
Net income (loss) from continuing operations	5.961	7.129.595	(770.622)	371
Net income (loss) from discontinuing operations	0	0	0	0
Net income (loss)	5.961	7.129.595	(770.622)	371

Subsidiaries
SAES Getters (Nanjing) Co., Ltd.	SAES Getters Export, Corp.	Memry GmbH	E.T.C. S.r.l.	SAES Nitinol S.r.l.
(Chinese Renminbi)	(U.S. Dollars)	(Thousands of Euro)	(Thousands of Euro)	(Thousands of Euro)
216.421 0	0 0	1.090 10	0 0	0 0
31.823.931	0	15	3	8.039
26.842.426 58.882.778	22.519.906 22.519.906	2.733 3.848	2.040 2.043	574 8.613
53.999.193	11.380.874	2.724	(59)	(20)
0	0	91	47	0
4.883.585	11.139.032	1.033	2.055	8.633
58.882.778	22.519.906	3.848	2.043	8.613

Subsidiaries
SAES Getters (Nanjing) Co., Ltd.	SAES Getters Export, Corp.	Memry GmbH	E.T.C. S.r.l.	SAES Nitinol S.r.l.
(Renminbi Cinesi)	(U.S. Dollars)	(Thousands of Euro)	(Thousands of Euro)	(Thousands of Euro)
30.034.628 (20.390.598)	0 0	7.573 (3.916)	0 0	0 0
9.644.030	0	3.657	0	0
0 (6.224.821)	0 9.491.547	(268) (440)	(655) (0)	0 0
(3.622.818)	0	(805)	(70)	(8)
(9.847.639)	9.491.547	(1.512)	(726)	(8)
(826.270) 0	3.091.959 0	(173) 0	(1.179) 0	(0) 0
(1.029.879)	12.583.506	1.972	(1.905)	(9)
1.146.035 70.405	(16.194) 0	(18) 6	(1) (0)	(73) 0
186.561	12.567.312	1.960	(1.907)	(82)
3.447	0	(574)	321	9
190.008	12.567.312	1.386	(1.586)	(73)
0 190.008	0 12.567.312	0 1.386	0 (1.586)	0 (73)

Certification of the Financial Statements of the Parent Company

CERTIFICATION OF THE FINANCIAL STATEMENTS OF THE PARENT COMPANY pursuant to article no. 81-ter of CONSOB Regulation no. 11971 of May 14, 1999, as amended

1. The undersigned, Giulio Canale, in his capacity as Vice President and Managing Director, and Michele Di Marco, in his capacity as Officer Responsible for the preparation of the corporate financial reports of SAES Getters S.p.A., hereby certify, pursuant to the provisions of article 154-bis, paragraphs 3 and 4, of Legislative Decree no. 58 of February 24, 1998:

2. the adequacy for the characteristics of the enterprise and

3. the effective application

of the administrative and accounting procedures for the formation of the Company Financial Statements during the period from January 1 to December 31, 2015.

1. The following remarks apply to this situation:

2.1 The Administrative and Accounting Control Model of the SAES Group

• On December 20, 2012, the Board of Directors of SAES Getters S.p.A. approved the update of the Administrative and Accounting Control Model, issued on May 14, 2007, the adoption of which is aimed at ensuring that SAES Getters complies with the provisions of Law no. 262 of December 28, 2005 (hereinafter the "Savings Law"), implemented in December 2006 through the approval of Legislative Decree no. 303/06, and, specifically, obligations pertaining to the preparation of corporate accounting documents and all documents and communications of a financial nature disseminated to the market.
• The Control Model, which refers to the organizational structure of the SAES Group:
• o sets the roles and responsibilities of the entities involved in various capacities in the process of forming and/or controlling the financial information of the SAES Group and introduces the role of manager in charge of the preparation of corporate accounting documents (hereinafter the "Officer Responsible");
• o describes the elements that comprise the administrative and accounting control system, citing the general control environment underlying the Internal Control System of the SAES Group, in addition to specific components pertaining to administrative and accounting information;
• o regarding this latter aspect in particular, calls for the integration of the Group Accounting Principles and IAS Operating Procedures with a system of administrative and accounting procedures and the related control matrices, which describes the controlling activities implemented in each process;
• o establishes the conditions and frequency of the administrative and accounting risk assessment process in order to identify the processes of greatest relevance to accounting and financial information.

2.2. Matrices of administrative and accounting controls of SAES Getters S.p.A.

• On December 20, 2012, 9 Matrices of administrative and accounting controls were issued, related to the most significant processes of SAES Getters S.p.A., selected after the risk assessment conducted on the basis of the 2011 financial statements.
• The controls described in these matrices were shared with the process owners according to the current organization chart - of the audited processes, and a process of continuous monitoring and alignment of these matrices to the effective operations has been established, requiring each owner to verify the implementation of the controls and to confirm their adequacy and effectiveness, and to report non-operating controls, or inadequate ones, or controls made obsolete by the evolution of the internal organization. This process was implemented in 2015, with reference to the results of the monitoring activities related to the 2014 financial statements and to the abbreviated consolidated

financial statements at June 30 2015, and led to the review of the controls whose description was not consistent with the operating activities.

2.3. Results of the internal certification process of SAES Getters S.p.A.

• The process owners have signed and submitted to Officer Responsible its own "internal certification letters" in which they confirmed that they had verified the activities /processes forming the object of the controls for which they were responsible and deemed them suitable and operationally effective to ensuring the reliability of the corresponding information flows and the processing of the associated data in accordance with the administrative and accounting procedures adopted by SAES Getters S.p.A.
• As of today, the Officer Responsible, with the support of SAES Getters S.p.A. Administration Department manager, has received all the 12 letters of internal declaration required to the process owners of SAES Getters S.p.A.;
• The results of the process were positive and no anomalies were reported.

2.4. Results of the review by the Internal Audit Department of SAES Getters S.p.A.

• The Officer Responsible requested the support of the Internal Audit Department for verification of part of the controls included in administrative and accounting procedures by a department independent from the offices responsible for the controls.
• With regards to this review, the Internal Audit Department, through its own assessment of critical situations, selected n. 3 administrative and accounting processes and it verified with its related managers the proper operation of controls within the processes themselves, collecting the supporting documentation where necessary.

The results of the reviews were positive according to the report prepared by the Head of Internal Audit Department.

3. Furthermore, we certify that:

• 3.1. the Financial Statements of the Parent Company for the year ended December 31, 2015:
• a) have been prepared in accordance with applicable international accounting standards recognized within the European Union pursuant to Regulation (EC) 1602/2002 of the European Parliament and the Council;
• b) correspond to the results of accounting records and books;
• c) are suitable to providing a truthful, accurate representation of the issuer's earnings and financial position.

3.2. the Report on Operations includes a reliable analysis of operating performance and income, as well as the issuer's situation, along with a description of the primary risks and uncertainties to which it is exposed.

Lainate, (MI) Italy, March 14, 2016

Vice President Officer Responsible for the preparation and Managing Director of the corporate financial reports Dr Giulio Canale Dr Michele Di Marco

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The complete list of trademarks owned by SAES Group is available at the following address: www.saesgetters.com/research-innovation/intellectual-property.

SAES Getters S.p.A. Viale Italia, 77 - 20020 Lainate (MI), Italy - Tel. + 39 02 931 78 1 - Fax + 39 02 931 78 250 www.saesgetters.com