IRCE

Quarterly Report • May 18, 2016

INTERIM REPORT ON OPERATIONS AT 31st MARCH 2016

TABLE OF CONTENTS

INTERIM REPORT ON OPERATIONS AT 31st MARCH 2016

Corporate Bodies

Report on operations for First Quarter 2016

Consolidated Financial Statements of the IRCE Group as of 31 st March 2016

Consolidated statement of financial position Consolidated income statement Consolidated statement of comprehensive income Consolidated cash flow statement

Notes to the consolidated interim report

Certification pursuant to Article 154-bis of Italian Legislative Decree 58/1998

CORPORATE BODIES

BOARD OF DIRECTORS

CHAIRMAN	MR	FILIPPO CASADIO
EXECUTIVE DIRECTOR	MR	FRANCESCO GANDOLFI COLLEONI
NON-EXECUTIVE DIRECTOR	MR	GIANFRANCO SEPRIANO (a) (b)
INDEPENDENT DIRECTOR	MS	FRANCESCA PISCHEDDA (b)
INDEPENDENT DIRECTOR	MR	ORFEO DALLAGO (a) (b)
INDEPENDENT DIRECTOR	MS	GIGLIOLA DI CHIARA (a)

BOARD OF STATUTORY AUDITORS

CHAIRMAN	MR	FABIO SENESE
STANDING STATUTORY AUDITOR	MR	ADALBERTO COSTANTINI
STANDING STATUTORY AUDITOR	MS	DONATELLA VITANZA
SUBSTITUTE STATUTORY AUDITOR	MR	GIANFRANCO ZAPPI
SUBSTITUTE STATUTORY AUDITOR	MS	CLAUDIA MARESCA

INDEPENDENT AUDITORS

PricewaterhouseCoopers S.p.A. INTERNAL CONTROL MANAGER

MR WILMER NERI

SUPERVISORY BODY

MS PAOLA PRETI MS FRANCESCA PISCHEDDA MR GIANLUCA PIFFANELLI

(a) Member of internal control Committee (b) Member of remuneration Committee

INTERIM REPORT ON OPERATIONS AT 31 MARCH 2015

IRCE Group (hereinafter the "Group") 2016 first quarter results recorded lower results if compared with the same period of 2015.

The winding wire sales registered a decline in volumes in Europe and in Brazil, if compared with the 1st quarter of 2015, but remained in line with the fourth quarter of last year. Sales volumes in the cable sector slowed a slowdown and are, on a quarterly basis, lower than the 1st quarter and 4th quarter 2015.

Consolidated revenues amounted to € 77.83 million compared to the € 92.80 million of the 1st quarter 2015; a 16% decrease, which is also due to the copper price reduction.

In this context, the consolidated turnover without metal¹ decreased by 8.5%, in particular the winding wires sector decreased by 9.7% (taking into account the sharp depreciation of the Brazilian currency since the beginning of 2015) and the cables by 2.6%.

In detail:

Consolidated turnover without metal (€/million)	2016 st quarter 1		2015 st quarter 1		Change
	Value	%	Value	%	%
Winding wires	15.8	81.0%	17.5	82.2%	-9.7%
Cables	3.7	19.0%	3.8	17.8%	-2.6%
Total	19.5	100.0%	21.3	100.0%	-8.5%

The following table reports the results of the first quarter of 2016, compared with those of the first three months of 2015, including the adjusted values of EBITDA and EBIT.

Consolidated income statement data (€/million)	st quarter 2016 1	st quarter 2015 1	Change
Turnover2	77.83	92.80	(14.97)
EBITDA3	2.45	3.24	(0.79)
EBIT	0.92	1.35	(0.43)
Profit before taxes	1.17	3.84	(2.67)
Net result	0.51	2.46	(1.95)
Adjusted EBITDA4 Adjusted EBIT4	2.58 1.05	4.49 2.60	(1.91) (1.55)

¹ Turnover without metal corresponds to overall turnover after deducting the metal component.

² The item "Turnover" represents the "Revenues" reported in the income statement.

³ EBITDA is a performance indicator used by the Management of the Group in order to assess the operating performance of the company and is not identified as an accounting item within IFRS; it is calculated by IRCE S.p.A. by adding amortisation/depreciation, allocations and write-downs to EBIT.

⁴Adjusted EBITDA and EBIT are respectively calculated as the sum of EBITDA and EBIT and the income/charges from operations on copper derivatives transactions (€ +0.13 million in the first quarter 2016 and € +1.25 million in the first quarter 2015). These indicators are used by the Management of the Group in order to monitor and assess the operational performance of the Group and are not identified as accounting items within IFRS. Given that the composition of these measures is not regulated by the reference accounting standards, the criterion used by the Group could potentially not be consistent with that adopted by others and therefore not be comparable.

Consolidated net financial debt, at the end of March 2016, was € 42.38 million, down from € 46.23 million at the end of 2015, this reduction benefitted from the cash flow generated by operating activities and the decrease of the net working capital.

Consolidated statement of financial position data (€/million)	As of 31.03.2016	As of 31.12.2015	Change
Net capital employed	174.23	177.07	(2.84)
Shareholders' equity	131.85	130.84	1.01
Net financial debt5	42.38	46.23	(3.85)

The Group's investments in 1st quarter 2016 were € 0.51 million, mostly made by IRCE S.p.A. in the winding wire sector.

The first quarter of this year has recorded sales volumes substantially in line with the last quarter of 2015, even though lower than expected for 2016, with the cable sector in greater difficulty than the winding wire. Nevertheless, the expectations remain the same as those expressed in our 2015 Annual Report with regard to the price stabilization and the sales volume.

Imola, 13th May 2016

⁵Net financial debt is measured as the sum of short-term and long-term financial liabilities minus cash and financial assets, note no. 14. It should be noted that the methods for measuring net financial debt comply with the methods for measuring the Net Financial Position defined by Consob Resolution no. 6064293 of 28 July 2006 and CESR recommendation of 10 February 2005.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS	Notes	31.03.2016	31.12.2015
NON- CURRENT ASSETS
Goodwill and intangibles assets	1	2,366,287	2,378,476
Property, plant and equipment	2	49,822,530	50,706,211
Equipment and other tangible assets	2	1,146,781	1,236,816
Fixed assets under construction and advance	2	3,355,037	2,957,721
Non-current financial assets and receivables		115,782	120,874
Non-current tax receivables	3	1,355,598	1,330,996
Deferred tax assets	4	2,358,113	2,504,948
TOTAL NON -CURRENT ASSETS		60,520,128	61,236,042
CURRENT ASSETS
Inventory	5	79,490,896	79,967,782
Trade receivables	6	69,076,764	65,108,753
Tax receivables	7	2,525,552	2,935,873
Receivables due from other	8	2,357,691	1,987,463
Current financial assets	9	11,321	314,482
Cash and cash equivalents	10	5,232,155	5,401,842
TOTAL CURRENT ASSETS		158,694,379	155,716,195
TOTAL ASSETS		219,214,507	216,952,237

SHAREHOLDERS EQUITY AND LIABILITIES	Notes	31.03.2016	31.12.2015
SHAREHOLDERS' EQUITY
SHARE CAPITAL	11	14,626,560	14,626,560
RESERVES	11	116,445,722	112,993,474
PROFIT OF THE PERIOD		510,230	2,948,503
TOTAL GROUP SHAREHOLDERS' EQUITY OF THE GROUP		131,582,512	130,568,537
SHAREHOLDERS' EQUITY ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		267,807	265,886
TOTAL SHAREHOLDERS' EQUITY		131,850,319	130,834,423
NON -CURRENT LIABILITIES
Non-current financial liabilities	12	20,347,920	22,461,891
Deferred tax liabilitieS	4	670,603	991,376
Provisions for risks and charges	13	2,075,469	2,035,769
Employee benefits' provisions		5,762,412	5,735,559
TOTAL NON- CURRENT LIABILITIES		28,856,404	31,224,595
CURRENT LIABILITIES
Current financial liabilities	14	27,307,193	29,183,770
Trade payables	15	19,963,049	14,917,943
Tax payables	16	2,927,795	2,347,197
Social security contributions		1,505,084	2,007,135
Other current liabilities	17	6,804,663	6,437,174
TOTAL CURRENT LIABILITIES		58,507,784	54,893,219
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		219,214,507	216,952,237

CONSOLIDATED INCOME STATEMENT

	Notes	31.03.2016	31.03.2015
Revenues	18	77,830,748	92,794,728
Other revenues and incomes		168,787	112,474
TOTAL REVENUES		77,999,535	92,907,202
Cost of raw material and consumable	19	(60,161,631)	(73,321,711)
Change in inventories of work in progress and finished good		750,223	443,150
Cost for services		(7,939,732)	(8,396,698)
Personnel cost	20	(7,818,505)	(8,014,814)
Amortisation/Depreciations	21	(1,371,790)	(1,584,442)
Allocations and write-downs		(151,837)	(310,181)
Other operating costs		(382,437)	(374,347)
EBIT		923,826	1,348,159
Financial incomes / (charges)	22	242,742	2,493,471
PROFIT BEFORE TAXES		1,166,568	3,841,630
Income Taxes	23	(654,416)	(1,380,601)
PROFIT BEFORE NON-CONTROLLING INTERESTS		512,152	2,461,029
Non-controlling interest		(1,922)	(1,499)
PROFIT / (LOSS) FOR THE PERIOD		510,230	2,459,530

Earnings (loss) per share (EPS) - basic EPS of the year ascribable to ordinary shareholders of the parent company 24 0,019 0,092 - diluted EPS of the year ascribable to ordinary shareholders of the parent company 24 0,019 0,092

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	31.03.2016	31.03.2015
€/000 PROFIT / (LOSS) BEFORE NON-CONTROLLING INTEREST	512	2,461
Foreign currency translation difference	561	(1,596)
Total other profit / (loss); net of tax which may be subsequently reclassified to profit / (loss) for the period	561	(1,596)
Total profit / (loss) from statement of comprehensive income, net of taxes	561	(1,596)
Total comprehensive profit / (loss), net of taxes	1, 073	865
Ascribable to: Sharelders of the parent company Minority Shareholders	1,071 2	863 2

CONSOLIDATED STATEMENT OF CASH FLOWS	Note	31/03/2016	31/03/2015
€/000
OPERATING ACTIVITIES
Profit for the year		510	2,460
Adjustmenrts for:
Amortization/depreciation	21	1,372	1,584
Net change in (assets) provision for (advance) deferred taxes	4	(174)	(15)
(gains)/losses from sell-off of fixed assets			(7)
(gains)/losses on unrealized translation differences		7	228
Taxes	23	806	1,479
Financial income/(charge)	22	(292)	(1,064)
Operating profit/(loss) before change in working capital		2,230	4,665
Paid taxes			(48)
Decrease (increase) in inventory	5	477	(1,041)
(Increase) decrease in current assets and liabilities		661	(6,291)
(increase) decrease in non-current assets and liabilities		65	(124)
Exchange difference on translation of financial statement in foreign currency		(387)	(559)
CASH FLOW GENERATED BY OPERATING ACTIVITIES		3,046	(3,399)
INVESTING ACTIVITIES
Investments in intangible assets	1	(12)	(48)
Investments in tangible assets	2	(499)	(814)
Amount collected fromsale of tangible and intangible assets		17	10
CASH FLOW USED IN INVESTMENTS		(494)	(852)
FINANCIAL ACTIVITIES
Borrowing refunds	12	(2,114)	7,000
Increase in funding	14	(1,877)	(6,188)
Exchange difference on translation of financial statement in foreign currency		875	(9)
Change in current financial assets	9	303	1,077
Payment og interest		(288)	(870)
Receipt of interest		580	1,935
Change in minority shareholders' capital		2	2
Own shares (sales-purchase)		(5)	1,013
CASH FLOW GENERATED FROM FINANCIAL TRANSACTION		(2,524)	3,960
NER CASH FLOW FOR THE PERIOD		29	(289)
CASH BALANCE AT START OF YEAR	10	5,402	6,567
TOTAL NET CASH FLOW FOR THE PERIOD		29	(289)
EXCHANGE DIFFERENCE		(199)	21
CASH BALANCE AT THE END OF YEAR	10	5,232	6,299

NOTES TO THE CONSOLIDATED INTERIM REPORT AT 31 MARCH 2016

GENERAL INFORMATION

The consolidated interim report as of March 31st, 2016 were authorised for publication by the Board of Directors of IRCE S.p.A. (henceforth also referred to as the "Company") on May 13th, 2016. The IRCE Group owns nine manufacturing plants and is one of the major industrial players in Europe in winding wires, as well as in electrical cables in Italy.

Its plants in Italy are located in Imola (Bologna), Guglionesi (Campobasso), Umbertide (Perugia) and Miradolo Terme (Pavia); foreign locations include Nijmegen (NL) - the registered office of Smit Draad Nijmegen BV -, Blackburn (UK) - the registered office of FD Sims Ltd -, Joinville (SC – Brazil) - the registered office of IRCE Ltda -, Kochi (Kerala – India) - the registered office of Stable Magnet Wire P.Ltd. and Kierspe (D) - the registered office of Isodra GmbH.

Distribution activities are carried out through agents and the following commercial subsidiaries: Isomet AG in Switzerland, DMG GmbH in Germany, Isolveco S.r.l. in Italy, IRCE S.L. in Spain, IRCE Kablo Ve Tel Ltd in Turkey and IRCE SP.ZO.O in Poland.

GENERAL DRAFTING CRITERIA

The First Quarter Report at March 31st, 2016 have been drawn up in compliance with the IAS 34 "Intermediate Balance Sheet" and with article 154 ter of TUF. This balance sheet consolidated not includes all information requested by annual balance sheet and must been read together with December 31st 2015 Financial Statement.

The diagrams used for compiling the consolidated balance sheet of the Group have been prepared in compliance with the IAS 1 principle, in particular;

• The shareholders' equity has been introduced by separately presenting current and non-current assets and liabilities.
• The profit-and-loss account has been prepared by classifying the item "by nature".

The following notes have been indicated in thousand euro.

This First Quarter Report has not been reviewed by Auditors, because not subjected to this obligation.

Evaluation usage

The compilation of consolidated shortened balance sheet according to IFRS requires the evaluation and the value assuming which affect the assets and the liabilities and the advises related to potential assets and liabilities up to reference date. The collected results could be different from the evaluations. The evaluations are used to point out allowances due to credit risks, amortizations, asset depreciation and taxes.

CONSOLIDATION AREA

The table below lists the companies included in the consolidation area at March 31st, 2016:

Company	% of investment	Registered office		Share capital	Consolidation
Isomet AG Smit Draad Nijmegen BV FD Sims Ltd Isolveco Srl DMG GmbH IRCE SL IRCE Ltda ISODRA GmbH Stable Magnet Wire P.Ltd. IRCE Kablo Ve Tel Ltd	100% 100% 100% 75.0% 100% 100% 100% 100% 100% 100%	Switzerland Netherlands UK Italy Germany Spain Brazil Germany India Turkey	CHF € £ € € € BRL € INR TRY	1,000,000 1,165,761 15,000,000 46,440 255,646 150,000 152,235,223 25,000 165,189,860 1,700,000	line by line line by line line by line line by line line by line line by line line by line line by line line by line line by line
IRCE SP.ZO.O	100%	Poland	PLN	200,000	line by line

There are not changes in the consolidation area compared to Consolidated Balance Sheet as of December 31st, 2015.

DERIVATIVE INSTRUMENTS

The Group uses the following types of derivative instruments:

• Derivative instruments related to copper forward transactions with maturity after 31 March 2016. The Group entered into sale contracts to hedge against price decreases relating to the availability of raw materials, and purchase contracts to prevent price increases relating to sale commitments with fixed copper values. The fair value of copper forward contracts outstanding at the reporting date is determined on the basis of forward prices of copper with reference to the maturity dates of contracts outstanding at the reporting date. These transactions do not satisfy the conditions required for recognising these instruments as hedging instruments for the purposes of hedge accounting.

A summary of derivative contracts related to commodities (copper) for forward sales, in force on March 31st, 2016, is shown below:

Measurement unit of the notional value	Notional value with maturity within one year (tons)	Notional value with maturity after one year	Result with fair value measurement as of 31/03/2016 €/000
Tons	250	0	(31)

• Derivative instruments related to obligations for USD forward purchases with maturity after March 31st, 2016. These transactions do not satisfy the conditions required for recognising these instruments as hedging instruments for the purposes of cash flow hedge accounting.

Below is shown a summary of derivative contracts related to USD forward sales and purchases, in force on March 31st, 2016:

Measurement unit of the notional value	Notional value with maturity within one year (€/000)	Notional value with maturity after one year	Result with fair value measurement as of 31/03/2016 €/000
USD	1,000	0	(5)

The fair value of forward contracts for currency purchases, in force as of March 31st, 2016, is determined on the basis of forward prices of currencies with reference to the maturity dates of contracts in force at the reporting date.

FAIR VALUE

A comparison between the carrying amount of financial instruments held by the Group and their fair value did not yield significant differences in value.

IFRS 7 defines the following three levels of fair value for measuring the financial instruments recognised in the statement of financial position:

• Level 1: quoted prices in active markets.
• Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs not based on observable market data.

The following table highlight the assets and liabilities that are measured at fair value as March 31st, 2015 in terms of hierarchical level of fair value measurement (€/000):

March 31st, 2016	Level 1	Level 2	Level 3	Total
Assets:
Derivative financial	-		-
instruments
AFS		62		62
Total assets	-
Liabilities:
Derivative financial	-	(36)	-	(36)
instruments
Total liabilities	-	(36)	-	(36)

During the year, there were no transfers between the three fair value levels specified in IFRS 7.

COMMENT ON THE MAIN ITEMS OF THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

1. GOODWILL AND OTHER INTANGIBLE ASSETS

This balance sheet item concerns the intangible assets from which economic benefits are expected in the future. The variations in intangible assets are detailed below:

€/000	Patent and intellectual property rights	Licenses, trademarks, similar rights and other multi-year charges	Fixed assets under construction	Goodwill	Total
Net carrying amount as of 31/12/2015	86	72	189	2,031	2,378
Movements of the period
. Investments	12	-	-	-	12
. Effect of exchange rates	(2)	(1)	-	-	(3)
. Reclassifications	-	-	-	-	-
. Amortisation	(10)	(11)	-	-	(21)
Total changes	-	(12)	-	-	(12)
Net carrying amount as of
31/03/2016	86	60	189	2,031	2,366

A description of intangible assets with a finite lifetime and the utilised method of amortisation is shown in the following table.

Asset	Expected useful life	Depreciation method	Internally developed or purchased	Impairment tests for assessing losses in value
Patent rights and intellectual property	Definite	50%	Purchased	Review of depreciation method at each year-end, and impairment test if there are
Permits and licenses	Definite	20%		indicators of loss in value Review of depreciation method at each year-end, and impairment test if there are
Trademarks and similar rights	Definite	5.56%	Purchased	indicators of loss in value Review of depreciation method at each year-end, and impairment test if there are indicators of loss in value
Goodwill Smit Draad Nijmegen BV	Indefinite	n/a	Purchased	Subject to impairment test

The depreciation rates that concern other intangible assets are worked out depending on the extent to which they can be utilized; therefore they are examined at the financial year-end.

The goodwill shown in the balance sheet relates to the Cash Generating Unit Smit Draad Nijmegen BV. This value has been subject to verification of the presence of impairment (impairment test) at the closing of the annual financial statements 2015. At 31 March 2016, the directors have not revealed the existence of indicators, external or internal, of impairment losses; therefore did not consider it necessary to proceed to a new impairment test.

2. TANGIBLE ASSETS

			Plant and	Industrial and commercial	Other	Assets under construction
€/000	Land	Buildings	equipment	equipment	assets	and advances	Total
Net carrying amount as of
31/12/2015	11,843	17,871	20,991	815	422	2,958	54,901
Movements of the period
. Investments	-	3	63	7	25	401	499
. Effect of exchange rates	(54)	(112)	443	1	1	(4)	275
. Reclassifications	-	-	-	(5)	5	-	-
. Divestments	-	-	-	-	(28)	-	(28)
. Depreciation relative to
disposals	-	-	-	-	27	-	27
. Depreciation of the period	-	(299)	(928)	(83)	(40)	-	(1,350)
Total changes	(54)	(408)	(422)	(80)	(10)	397	(577)
Net carrying amount as of
31/03/2016	11,789	17,463	20,569	736	412	3,355	54,324

These Group's investments in the first quarter of 2016 were € 0.50 million, mostly made in the winding wire sector of IRCE SpA.

3. NON-CURRENT TAX RECEIVABLES

This item refers by €/000 812, to the tax credit relative to the reimbursement claim for 2007-2011 IRES (corporate income tax), in compliance with Article 2, paragraph 1-quater, of Italian Law Decree No. 201/2011, of the parent company IRCE S.p.A., and by €/000 544 to the tax credit on the added value to the Brazilian subsidiary IRCE Ltda. Based on future expected cash flows, the recoverability of these amounts is believed to be likely.

4. DEFERRED TAX ASSETS AND LIABILITIES

A breakdown of deferred tax assets and liabilities is shown below:

€/000	31/03/2016	31/12/2015
- Deferred tax assets	2,358	2,505
- Deferred tax liabilities	(671)	(991)
Total deferred tax assets (net)	1,687	1,514

5. INVENTORIES

Inventories are detailed as follows:

€/000	31/03/2016	31/12/2015
- Raw materials, ancillary and consumables	26,794	27,860
- Work in progress and semi-finished goods	13,202	8,916
- Finished products and goods	43,005	46,614
- Provisions for write-down of raw materials	(2,006)	(2,006)
- Provisions for write-down of finished products and goods	(1,504)	(1,416)
Total	79,491	79,968

Recognized inventories are not pledged nor used as collateral.

The provision for write-downs correspond to the amount that is deemed necessary to hedge existing inventory obsolescence risks calculated by writing down slow moving packages and finished products.

The table below shows the changes in provisions for write-down of inventories during the first three months of 2016:

€/000	31/12/2015	Allocations	Uses	31/03/2016
Provisions for write-down of raw materials Provisions for write-down of finished products and goods	2,006 1,416	- 88	- -	2,006 1,504
Total	3,422	88	-	3,510

6. TRADE RECEIVABLES

€/000	31/03/2016	31/12/2015
- Customers/bills receivable - Bad debt provision	70,617 (1,540)	66,674 (1,565)
Total	69,077	65,109

The balance of receivables due from customers is entirely composed of receivables due within the next 12 months

7. CURRENT TAX RECEIVABLES

The item was broken down as follows:

€/000	31/03/2016	31/12/2015
- Receivables for income taxes	165	310
- VAT receivables	185	425
- VAT receivables and taxes for IRCE Ltda	1,257	1,408
- Other receivables due from taxation authorities	919	793
Total	2,526	2,936

8. RECEIVABLES DUE FROM OTHERS

The item was broken down as follows:

€/000	31/03/2016	31/12/2015
- Advances to suppliers	-	224
- Accrued income and prepaid expenses	330	168
- Receivables due from social security institutions	103	120
- Other receivables	1,925	1,475
Total	2,358	1,987

The item "other receivables" is mainly linked to a bonus to be received on energy consumption for the years 2014 and 2015, assigned by the Authority for electricity with the authorization from the Ministry for Economic Development. Please note that a European Commission audit is in progress to check compatibility of facilitations with European laws on State help. In view of the Authority decision of 28/12/2015, the Company feels there are currently no presuppositions for devaluing the credit.

9. CURRENT FINANCIAL ASSETS

€/000	31/03/2016	31/12/2015
- Mark to Market copper forward transactions	-	303
- Mark to Market USD forward transactions	-	-
- Fixed deposit for LME transactions	11	11
Total	11	314

The item "Fixed deposit for LME transactions" refers to the margin calls lodged with brokers for copper forward transactions on the LME (London Metal Exchange).

10. CASH AND CASH EQUIVALENTS

This item includes bank deposits, cash in hand and valuables.

€/000	31/03/2016	31/12/2015
- Bank deposits	5,210	5,387
- Cash on hand and valuables	22	15
Total	5,232	5,402

The bank and postal deposits are not subject to liens or restrictions.

11. SHAREHOLDERS' EQUITY

Share capital

The share capital is composed of 28,128,000 ordinary shares for an equivalent of € 14,626,560 without nominal value. The shares are fully subscribed and paid up and bear no rights, privileges or restrictions as far as dividend distribution and capital distribution, if any, are concerned.

Own shares as of 31st March, 2016 amounted to 1,406,774 and correspond to 5% of the share capital.

Reserves are detailed below:

€/000	31/03/2016	31/12/2015
- Own shares (deducted from share capital)	(732)	(716)
- Share premium reserve	40,539	40,539
- Own shares (share premium)	264	306
- Other capital reserves	45,924	45,924
- Foreign currency translation reserve	(18,689)	(19,250)
- Legal reserve	2,925	2,925
- Extraordinary reserve	30,885	30,885
- IAS 19 reserve	(1,125)	(1,125)
- Undivided profit	13,729	13,505
- Retained profit	2,726	-
Total	116,446	112,993

12. NON-CURRENT FINANCIAL LIABILITIES

€/000	Curren	Rates	Company	31/03/2016	31/12/2015	Due
Banco Popolare CARISBO Banca di Imola S.p.A NAB Total	EUR EUR EUR CHF	Variable Variable Variable Variable	IRCE SPA IRCE SPA IRCE SPA Isomet AG	3,525 9,000 4,383 3,440 20,348	3,964 10,000 5,000 3,498 22,462	2019 2019 2019 2017

13. PROVISIONS FOR RISKS AND CHARGES

Provisions for risks and charges are detailed below:

€/000	31/12/2015	Allocations	Uses	31/03/2016
Provisions for risks and disputes Provision for severance payments to agents	1,748 288	163 10	(134) -	1,777 298
Total	2,036	173	(134)	2,075

Provisions for risks and disputes refer to allocations for various disputes.

Provision for severance payments to agents refers to allocations made for severance payments relating to outstanding agency contracts.

14. CURRENT FINANCIAL LIABILITIES

The current financial liabilities are detailed below:

€/000	31/03/2016	31/12/2015
- Payables due to banks - Payables due for derivative contracts	27,269 38	29,184 -
Total	27,307	29,184

Item "Payables due for derivative contracts" refers to the USD forward purchases, open as at 31st March, 2016, of IRCE SPA.

With reference to the financial liabilities, the Group's net financial position, drawn up in accordance with the Consob Communication 6064293 dated 28th July 2006 and the CESR guidelines dated 10th February 2005, is as follows:

€/000	31/03/2016	31/12/2015
Cash Other current financial assets	5,232 11	5,402 11*
Liquid assets	5,243	5,413
Current financial liabilities	(27,276)*	(29,184)
Net current financial indebtedness	(22,033)	(23,771)
Non-current financial liabilities	(20,348)	(22,462)
Non-current financial indebtedness	(20,348)	(22,462)
Net financial indebtedness	(42,381)	(46,233)

* These items differ from the corresponding items of the statement of financial position, since the fair value of copper forward contracts is not included.

15. TRADE PAYABLES

Trade payables are all due in the next 12 months. As of 31/03/2016 they totaled €/000 € 19,963, compared to €/000 14,918 as of 31/12/2015.

16. TAX PAYABLES

The item was broken down as follows:

€/000	31/03/2016	31/12/2015
- VAT payables	974	650
- Payables due for income taxes	1,570	1,079
- Employee IRPEF (personal income tax) payables	294	481
- Other payables	90	136
Total	2,928	2,347

17. OTHER CURRENT LIABILITIES

Other payables were broken down as follows:

€/000	31/03/2016	31/12/2015
- Payables due to employees	3,720	3,414
- Deposits received from customers	1,683	1,925
- Accrued liabilities and deferred income	239	236
- Other payables	1,163	862
Total	6,805	6,437

COMMENT ON THE MAIN ITEMS OF THE CONSOLIDATED INCOME STATEMENT

18. REVENUES

These items refer to revenues for the sales of goods after returns and discount. The revenues at 31st March 2016 for €/000 77,831 decrease of 16% in respect to the same period of the previous year (€/000 92,795).

19. COSTS OF RAW MATERIALS AND CONSUMABLES

This item includes the costs borne for purchasing raw materials - such as copper, insulating materials, packaging materials and consumable items (for maintenance work), net of changes to inventories (€/000 1,256).

20. PERSONNEL COST

Here below is the breakdown of personnel cost:

€/000	31/03/2016	31/03/2015	change
- Salaries and wages	5,341	5,520	(179)
- Social security charges	1,389	1,475	(86)
- Retirement costs for defined contribution plans	319	322	(3)
- Other costs	770	698	72
Total	7,819	8,015	(196)

21. AMORTISATION/DEPRECIATION

Amortisation/depreciation is detailed as follows:

€/000	31/03/2016	31/03/2015	Change
- Amortisation of intangible assets	22	32	(10)
- Depreciation of tangible assets	1,350	1,552	(202)
Total amortisation/depreciation	1,372	1,584	(212)

22. FINANCIAL INCOME AND CHARGES

Financial income and charges are detailed as follows:

€/000	31/03/2016	31/03/2015	Change
- Other financial income	580	1,935	(1,355)
- Interest and other financial charges	(288)	(870)	582
- Foreign exchange gains/(losses)	(49)	1,428	(1,477)
Total	243	2,493	(2,250)

of which:

€/000	31/03/2016	31/03/2015	Change
- Profit on LME derivatives	129	1,249	(1,120)
Total	129	1,249	(1,120)

23. INCOME TAX

€/000	31/03/2016	31/03/2015
- Current taxes - Deferred tax assets/(liabilities)	(806) 152	(1,479) 98
Total	(654)	(1,381)

24. EARNINGS PER SHARE

As required by IAS 33, here below are the disclosures on the data used to calculate basic and diluted earnings per share.

For the purposes of calculating the basic earnings per share, the profit or loss for the period less the portion attributable to non-controlling interests was used as the numerator. In addition, it should be noted that there were no preference dividends, settlements of preference shares, and other similar effects to be deducted from the profit or loss attributable to the ordinary equity holders. The weighted average number of ordinary shares outstanding was used as the denominator; this figure was calculated by deducting the average number of own shares held during the period from the overall number of shares composing the share capital.

Basic and diluted earnings per share were equal, as there are no ordinary shares that could have dilutive effects and no shares or warrants that could have dilutive effects will be exercised.

	31/03/2016	31/03/2015
Net profit/(loss) for the period	510,230	2,459,530
Average weighted number of ordinary shares outstanding	26,721,226	26,757,676
Basic earnings/(loss) per Share	0.019	0.092
Diluted earnings/(loss) per Share	0.019	0.092

25. RELATED PARTY DISCLOSURES

In compliance with the requirements of IAS 24, the quarterly compensation for the members of the Board of Directors is shown below:

€/000	Compensation for office held	Compensation for other tasks	Total
Directors	55	81	136

This table shows the compensation paid for any reason and under any form, including social security contributions.

In addition, as of , the Group parent company IRCE SPA had a payable of €/000 488 with respect to its parent company Aequafin SPA for the payment of tax advances due to the application of the national tax consolidation regime.

26. EVENTS FOLLOWING THE REPORTING PERIOD

No significant events occurred between the reporting date and the current drafting date.

27. CERTIFICATION PURSUANT TO ARTICLE 154-BIS OF ITALIAN LEGISLATIVE DECREE 58/1998

The Executive Manager assigned to draw up the company books, Ms. Elena Casadio, declares that the information contained in this quarterly report is an accurate representation of the documents, accounting books and records.