Zignago Vetro — AGM Information 2016

Mar 18, 2016

Proposal for the appointment of the Independent Audit Firm for the 2016-2024 period

The Board of Statutory Auditors

Mr. Carlo Pesce

Mr. Stefano Meneghini

Ms. Carmen Pezzuto

Proposal for the appointment of the Independent Audit Firm for the 2016-2024 period

Dear Shareholders,

with the approval of the 2015 Annual Accounts, the appointment concludes of the audit firm Reconta Ernst & Young S.p.A. conferred by the Shareholders' Meeting of Zignago Vetro S.p.A. of April 21, 2004 for the 2004-2006 period, subsequently extended by the Shareholders' Meeting of February 16, 2007 for the 2007-2015 period, as per Article 159 of Legislative Decree 58/98, as amended by Article 3, paragraph 16 of Legislative Decree No. 303 of December 29, 2006, which established a maximum duration of nine years for the audit appointment.

This appointment may therefore not be extended further as 2015 marks the conclusion of the maximum nine year duration established by Article 17 of Legislative Decree 39/2010.

In accordance with Article 13 of Legislative Decree 39/2010, the Shareholders' Meeting, "...on the proposal of the Board of Statutory Auditors confers the audit of accounts appointment and establishes the relative remuneration... of the independent audit firm for the entire duration of the appointment and any amending criteria for such remuneration during the appointment.".

Therefore, the Board of Statutory Auditors, together with the competent company functions, has carried out all necessary and preliminary activities for the drawing up of the proposal to be submitted to the Shareholders' Meeting called for the approval of the 2015 Annual Accounts.

Guiding criteria for the selection of the Independent Audit Firm

Considering Articles 10 and 17 of the above-stated Decree No. 39/2010, which requires the independence and objectivity of the Independent Audit Firm and, in particular, Article 10 which establishes that the remuneration for the appointment may not be based on any specific condition and should be established in a manner which guarantees the quality and reliability of work carried out, the Board of Statutory Auditors:

• has communicated to the competent company functions an assessment model based on technical and financial parameters, for the consideration of offers;
• has agreed with the company the sending to the main audit firms (KPMG S.p.A., PricewaterhouseCoopers S.p.A. and Deloitte & Touche S.p.A.), identified on the basis of the requirements of the appointment, requests for proposals;
• the offer request placed particular attention on facilitating comparability and therefore a more systematic and objective review of offers;
• received from the above-stated Independent Audit Firms declarations of availability to accept the appointment for the audit of accounts, within indication of the remit of the appointment, an estimate of timeframes and remuneration and of the amending criteria.

The offers received were thereafter subject, in an initial phase, to analysis by the competent company functions according to the criteria indicated by the Board of Statutory Auditors.

Preliminarily, with regard to all of the above-stated independent audit firms, their independence is confirmed, also as per Article 10 of Legislative Decree No. 39 of January 27, 2010.

Definition of the selection criteria

The Board of Statutory Auditors, in defining the selection criteria, sought to enable assessment of the qualitative and quantitative aspects outlined below; they were allocated appropriate weighting coefficients, based on a total coefficient of 100%; each aspect was allocated a score of between 6 and 10.

	weighting %
Qualitative aspects
Knowledge of the company Zignago Vetro S.p.A. and of	10
the sector in which it operates
The professionalism and the experience of the proposed	25
team
Methodological approach to audit/innovation and pro	20
activity
Impact on the structure of Zignago Vetro S.p.A.	15
Quantitative aspects
Adequacy of the hours dedicated to audit	10
Audit costs for the year and the entire nine-year period	10
Amending criteria for remuneration over the nine-year	10
period
Total	100%

The identified aspects, with indication of the weighting attributed, were as follows:

The Board also took account of compliance with the Consob indications concerning the composition of the audit team and other figures, in order to guarantee an appropriate presence of experienced individuals to cover a broad range of audit activities. In addition, during the meetings with each of the audit firms, the governance structure and co-ordination mechanisms of the national audit structures of the audit firms with their international network, in particular in Europe, was communicated to the Board of Statutory Auditors.

Assessment and proposal of the Independent Audit Firm to be submitted to the Shareholders' Meeting

The offers of the audit firms were assessed at meetings held with the audit firms on the following dates:

• February 8, 2016 Deloitte & Touche S.p.A.
• February 8, 2016 Pricewaterhouse Coopers S.p.A.
• February 9, 2016 KMPG S.p.A.

The analysis and outcomes of the meetings confirmed the existence of appreciable differences both at a qualitative level of the offers drawn up by the three Audit Firms, and with regards the quantitative aspects.

A review of the qualitative and quantitative parameters indicated above which, as previously stated, were allocated scores, resulting in the proposal of "KPMG S.p.A." achieving the highest score among the proposals.

On conclusion of these activities, the Board of Directors undertook a period of reflection before choosing the Audit Firm.

Following this, the Board, on completion of a final detailed comparison considering which offer would be most preferable and in line with the needs of Zignago Vetro S.p.A., chose that of KPMG S.p.A..

The choice of KPMG S.p.A., a company enrolled in Consob's special register, for the awarding of the audit of accounts for the 2016-2024 period, was fundamentally based on the following reasons:

• KPMG S.p.A. has significant experience in Italy in the sector in which Zignago Vetro S.p.A. operates and belongs to an international network capable of providing an adequate service also to the overseas subsidiaries of the Company, and can rely on an organisation and an appropriate technical-professional capacity in view of the extent and complexity of the appointment;
• KPMG S.p.A. over many years of audit experience has developed significant knowledge upon Zignago Vetro S.p.A. and its internal control system; this should have a positive impact on the organisational structure of Zignago Vetro S.p.A.;
• KPMG S.p.A. is considered independent according to applicable regulations and currently no situations of incompatibility exist;
• the proposed team comprises highly experienced and professional individuals and is supported by specialist experts.

The annual remuneration requested by KPMG S.p.A., with no significant differences between the various proposals received, appears suitable and adequate to guarantee the quality and reliability of work, and is detailed as follows:

Zignago Vetro S.p.A.	Hours	Fees Euro
Complete audit as per Articles 14 and 16 of Legislative Decree 39/2010 (statutory and consolidated financial statements).	882	60,500
Limited audit of the half-year report	250	19,000
Total Zignago Vetro S.p.A.	1,132	79,500

The above fees shall be adjusted annually to take into account the percentage change of the general ISTAT consumer price index for families of employed individuals. The adjustment will be made from the second year of the appointment (financial year 2017).

The expenses incurred for office shall be charged in the amount of 5% of the fees, in addition to VAT. The supervisory contribution to Consob under Article 40 of Law No. 724 of December 23, 1994 and subsequent amendments and supplements shall be requested separately in the amount corresponding to that paid to Consob.

As established by Consob regulation and the proposal "In the course of the period considered by offer, the "scope" of audit services may change only on the basis of a change to the consolidation scope of the Group and/or due to changes in the size of the companies themselves, such as to require a differing number of hours and/or a differing commitment to that initially envisaged. In such cases, the audit plan, in addition to the fees, may be amended during the period following agreement among the parties".

The partner in charge of the appointment was identified by KPMG S.p.A. as Mr. Gianluca Zaniboni, who shall therefore act as the Officer overseeing direction and supervision of the Zignago Vetro S.p.A. audit team and will also be the signing partner of the financial statements. He will maintain contact with the Management of Zignago Vetro S.p.A. and with the Governance Bodies.

The Board of Statutory Auditors, in conclusion, given that the fees requested by KPMG S.p.A. appear appropriate in relation to the quantity and the quality of work to be carried out and the professional standard of personnel, in addition to aligning with market prices, proposes to the Shareholders' Meeting of Zignago Vetro S.p.A., as per that stated above, to appoint KPMG S.p.A. as the audit firm for the 2016-2024 period, and therefore until approval of the 2024 Annual Accounts, for the:

• I. Complete audit as per Articles 14 and 16 of Legislative Decree 39/2010 (statutory and consolidated financial statements);
• II. Limited audit of the half-year report;

for a total annual fee of Euro 79,500.00, with this fee considered net of ISTAT increases, expenses, the supervisory contribution due to Consob and VAT and may be updated upon the occurrence of exceptional or currently unforeseeable circumstances.

Fossalta di Portogruaro (VE), March 11, 2016

The Board of Statutory Auditors

Mr. Carlo Pesce	Chairman
Mr. Stefano Meneghini	Statutory Auditor
Ms. Carmen Pezzuto	Statutory Auditor