Zignago Vetro — Annual Report 2016

Mar 31, 2017

2016 Consolidated Financial Statements

Zignago Vetro SpA Registered office: Fossalta di Portogruaro (VE), Via Ita Marzotto 8 Share Capital: Euro 8,800,000 fully paid-in Tax and Venice Company Register No.: 00717800247

www.gruppozignagovetro.com

Contents

Zignago Vetro Group Structure	pag.	3
Company bodies	pag.	5
Directors' Report on the Consolidated & Separate Financial Statements:
- The Zignago Vetro Group	pag.	8
- Significant events after 31 December 2016	pag.	32
- Outlook	pag.	32
- The Company	pag.	33
- The Consolidated Subsidiaries	pag.	38
Consolidated Financial Statements:
Statement of Financial Position	pag.	60
- Income Statement	pag.	61
- Statement of Comprehensive Income	pag.	62
- Statement of Cash Flows	pag.	63
- Statement of Changes in Equity	pag.	64
Notes to the Consolidated Financial Statements	pag.	66
Proposals to the Shareholders' Meeting	pag.	135
Shareholders' Meeting Call	pag.	136
Summary of the Shareholders' Meeting resolutions	pag.	139
Statement of the Con. Fin. Statements. as per Art. 154- bis of Leg. Decree 58/98	pag.	142
Independent Auditors' Report	pag.	144
Corporate Governance and Ownership Structure Report of Zignago Vetro SpA	pag.	148

ZIGNAGO VETRO GROUP STRUCTURE

AT 15 MARCH 2017

ACTIVITIES AND SHAREHOLDINGS

COMPANY BODIES

in office for the three-year period 2016 - 2018 in office for the three-year period 2016 - 2018

chairman statutory auditors

Nicolò Marzotto

chief executive officer Cesare Conti Paolo Giacobbo Chiara Bedei

directors Alessia Antonelli Ferdinando Businaro Giorgina Gallo Franco Grisan Daniela Manzoni Supervisory Board Gaetano Marzotto __________________________________ Franco Moscetti Nicola Campana Manuela Romei

Control and Risks Committee for the period 2016 - 2024

Alessia Antonelli Luca Marzotto Giorgina Gallo

Remuneration Committee Ovidio Dri

Franco Moscetti chief financial officer Daniela Manzoni Roberto Celot

Committee for Transactions Biagio Costantini with Related Parties Stefano Bortoli

_____________________________

Manuela Romei Ferdinando Businaro Alessia Antonelli

Lead Independent Director

Franco Moscetti

Board of Directors Board of Statutory Auditors

Paolo Giacobbo Alberta Gervasio - chairman Carlo Pesce vice chairman Stefano Meneghini

alternate auditors

Luca Marzotto Alessandro Bentsik - chairman Stefano Marzotto Massimiliano Agnetti

Independent Auditors

KPMG SpA

Management

industrial director & deputy general manager

Stefano Marzotto and investor relations manager

commercial management

Directors' Report

on the

2016 Consolidated & Separate Financial Statements

THE ZIGNAGO VETRO GROUP

The Zignago Vetro Group operates in the production and marketing of high quality hollow glass containers prevalently for the Food and Beverage, Cosmetics and Perfumery and "Specialty Glass" sectors (highly customised glass containers in small batches, typically used for wine, liquors and oils).

The Group operates in the market with a business-to-business model, supplying containers to its clients, which are then used in their respective industrial activities. Specifically, in the Italian market, the Group is one of the leading producers and distributors of glass containers for the food and beverage sector, while at international level it has a strong market share in the cosmetics and perfumery and specialty glass sectors.

In accordance with Article 70, paragraph 8 and Article 71, paragraph 1-bis of the Consob Issuers' Regulation, Zignago Vetro SpA announced that it would employ the exemption from publication of the required disclosure documents concerning significant merger, spin-off, and share capital increase operations through conferment of assets in kind, acquisitions and sales.

* * * * *

The Consolidated Financial Statements at 31 December 2016 are prepared in accordance with International Financial Reporting Standards (IFRS) endorsed by the European Union at the date of the preparation of the this document.

We recall that IFRS 11 - Joint arrangements, applicable for the Group from 1 January 2014, replaces IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers, and identifies, on the basis of the rights and obligations of the participants, two types of agreements - joint operations and joint ventures - and governs the consequent accounting treatment to be adopted for recognition in the financial statements, removing the option to consolidate jointly controlled companies proportionally and requiring jointly controlled companies defined as joint ventures to be recognised using the equity method. For the Annual Financial Statements at 31 December 2016 and the comparative Financial Statements at 31 December 2015, the investments in Vetri Speciali and Vetreco, which are defined as joint ventures, have been recognised by the Group using the equity method, rather than the proportional consolidation criteria.

However, in the Directors' Report the figures (and the subsequent comments) are based on the "management view of the Group business", which provides for the proportional consolidation of joint ventures, in continuity with the accounting policies adopted until 31 December 2013. These figures however must not be considered as an alternative to those provided for by IFRS, but rather exclusively for supplementary disclosure and reflective of management's view of the business. For this purpose, a reconciliation of the Statement of financial position and of the Income Statement, prepared according to IFRS in force from 1 January 2014 and those in force at 31 December 2013, is provided in the Directors' Report.

The Notes include all the disclosures required by current regulations and accounting standards, appropriately reported with reference to the financial statements.

In accordance with the provisions of Legislative Decree No. 32 of 2 February 2007, which enacted European Directive EU/2003/51 into Italian legislation, the Company avails of the option to prepare the Directors' Report of the Parent Zignago Vetro SpA and the Directors' Report of the Group in one single document, included within the Consolidated Financial Statements. Therefore, the present Directors' Report of the Group also contains the disclosures pursuant to Article 2428 of the Civil Code, with reference to the Separate Financial Statements of Zignago Vetro SpA.

Pursuant to CONSOB communication DEM 6064293 of 28 July 2006 and ESMA/2015/1415 recommendations on alternative performance indicators utilised by the Parent - which although not specifically defined by IAS/IFRS are considered particularly useful to monitor the business performance - we provide the following information:

• net financial debt is defined by the Company as the sum of current loans and borrowings and non-current loans and borrowings, net of cash and cash equivalents and current financial assets. This net figure is the same as the net financial position as per CONSOB communication No. DEM/6064293 of 28 July 2006;
• value of production: the Company defines this as the arithmetical sum of revenues, the change in finished products, semi-finished products, and work-in-progress and the internal work capitalised;

• value added: the Company defines this as the difference between value of production and raw materials consumed (purchase costs plus or minus the change in raw materials and service costs);

• EBITDA: the Company defines this as a difference between value added and personnel expense (including those of temporary workers), plus the effect of the measurement of joint ventures using the equity method. EBITDA is a measure utilised by the issuer to monitor and measure operating performance although it is not an accounting measure under IFRS. The measurement criteria of this indicator may not be in line with that utilised by other entities and therefore it may not be entirely comparable.

Within this context, the issuer utilised a calculation model in line with its core business which included the effects deriving from the application of IFRS 11. The Company considers the results deriving from its equity investments in joint ventures as operating items and nonfinancial items of the Group's business, related to a clearly defined investment strategy and as such classified within the Groups operating results;

• EBIT: the Company defines this as the difference between EBITDA and depreciation & amortisation of property, plant and equipment and intangible assets and accruals to the provision for impairment;
• Operating profit: this performance measure is also contained in IFRS and is defined as the difference between EBIT and the net balance of non-recurring operating costs and income. We point out that this latter item includes incidental income and costs, capital gains and losses on sales of assets, insurance compensation, grants, and other minor positive and negative items;
• Free cash flow: the Company defines this as the sum of the cash flows from operating activities and cash flows from investing activities.

The figures reported in the Directors' Report and in the tables of the Notes are shown in thousands of Euro for greater clarity, except where specified otherwise. The comments in the Report are however expressed in millions of Euro.

* * * * *

The Zignago Vetro Group, according to management's view, operates through six Business Units, each being a separate legal entity. Given this, information concerning the operating performance of the various operating and geographical segments (segment reporting under IFRS 8) is included in the illustration of the financial reporting data for each company and is an integral part of this Directors' Report.

Segment reporting which coincides with the various legal entities is provided below, independently of the respective consolidation criteria applied.

Disclosure by geographical segments is not considered appropriate for the Group.

The operating segments ("Business Units") are identified as follows:

• Zignago Vetro SpA: this Business Unit carries out the production of glass containers for food and beverages and for cosmetics and perfumery;
• Zignago Glass USA Inc.: this Business Unit carries out the sales promotion of glass containers for food and beverages and for cosmetics and perfumery in North America;
• Verreries Brosse SAS: this Business Unit carries out the production of glass containers for perfumes;
• Vetri Speciali SpA: this Business Unit includes the production of specialty containers, principally for wine, vinegar and olive oil;
• Huta Szkla Czechy SA: this Business Unit undertakes the production of a wide range of customised products for cosmetic and perfumery containers and also for food and beverage niche markets worldwide;
• Vetreco Srl: this Business Unit is engaged in the processing of raw glass into the finished material ready for use by glassmakers.

The consolidation scope of the Zignago Vetro Group at 31 December 2016 and 2015 was as follows:

• Zignago Vetro SpA (parent)

The companies consolidated using the line-by-line method are as follows:

• Verreries Brosse SAS
• Huta Szkła "Czechy" S.A. (HSC)
• Zignago Glass USA Inc.

The companies measured using the equity method are the following:

• Vetri Speciali SpA
• Vetreco Srl

The consolidation scope of the Zignago Vetro Group at 31 December 2016 has not changed compared to 31 December 2015.

The basis of consolidation and measurement criteria, including the equity investments held by Zignago Vetro S.p.A. are outlined in the paragraph "accounting policies and measurement criteria" in the notes to the consolidated financial statements.

In the Directors' Report, as previously stated, the figures are based on the "management view of the Group business", which provides for the proportional consolidation of joint ventures, in continuity with the accounting policies adopted until 31 December 2013.

Legally-required audit

The appointment for the legally-required audit of the Separate Financial Statements of Zignago Vetro S.p.A. was awarded to KPMG SpA. for the 2016-2024 period, pursuant to Articles 14 and 16 of Legislative Decree No 39 of 27 January 2010.

Significant events in 2016

Distribution of dividends

The Shareholders' Meeting of Zignago Vetro SpA of 28 April 2016 approved the distribution of a dividend of Euro 0.235 per share, totalling Euro 20.3 million, with payment date of 11 May 2016.

Treasury shares

On 28 April 2016, the Shareholders' Meeting of Zignago Vetro SpA revoked, for the part not executed, the resolution granted in favour of the Board of Directors to purchase and sell treasury shares, as approved by the Shareholders' Meeting of 28 April 2015 and authorised the Board of Directors to purchase and sell treasury shares for a maximum number not exceeding the total nominal amount, including any shares held by subsidiaries, corresponding to one-fifth of the share capital. The new authorisation is proposed for a period of 18 months, commencing from 28 April 2016. The minimum purchase price shall not be less than 20%, and the maximum price not more than 20%, of the share price registered on the trading day prior to each transaction; the sale price shall not be 20% higher or lower than the share price registered on the trading day prior to each transaction. These price limits will not be applied where the sale of shares is to employees, including management, executive directors and consultants of Zignago Vetro and its subsidiaries in relation to incentive stock option plans.

Within the share buy-back programme reported above, at 31 December 2016, 1,421,390 treasury shares, taking account, in respect of the number of treasury shares held and of the effect from the Scrip issue approved on 23 April 2012, had been acquired, corresponding to 1.615% of the share capital, for a payment of Euro 5 million. In 2016, no treasury shares were sold or acquired.

Operating performance

In 2016, Beverage and Food glass container demand in Italy and Europe continued to develop, supported by apparently improving consumption levels, in particular on segments driven by finished product export demand.

Overall, the Perfumery markets expanded further, with divergent performances across the various regions. The Luxury segment of the Perfumery market featured strong demand, although focussed on long-standing products with very few new launches and within a marketplace impacted by excess supply. The skincare segment continued to grow.

Within this environment, Zignago Vetro Group consolidated revenues in 2016 were Euro 322.9 million, up 1.4% on 2015 (Euro 318.5 million).

Materials and external services in 2016, including changes in inventories and internal production, amounted to Euro 167.3 million, compared to Euro 171.4 million in the previous year (-2.4%). These costs on revenues reduced from 53.8% to 51.8%.

The increase of 3.6% in personnel expense in 2016 is related to increased business volumes. These costs amount to Euro 74.7 million, compared to Euro 72.1 million in 2015, and account for 23.1% of revenues (22.6% in 2015). Personnel expense include the actuarial valuation of postemployment benefits, excluding actuarial gains/losses, in addition to temporary staff.

EBITDA in 2016 amounted to Euro 80.9 million, compared to Euro 75.1 million in 2015 (+7.8%), corresponding to 25.1% and 23.6% of revenues respectively.

EBIT in 2016 was Euro 47.4 million, compared to Euro 42 million in the previous year (+12.8%). The margin rose to 14.7% from 13.2% in 2015.

The operating profit in 2016 of Euro 48.2 million was 5.8% higher than the previous year (Euro 45.6 million). The margin was 15% compared to 14.3%.

The Group share of consolidated net profit for the year was Euro 31.2 million, up 7.4% on Euro 29 million in 2015. The margin increased to 9.7% from 9.1%. The tax rate increased from 30.2% to 30.3%.

The cash flow generated from profit and depreciation/amortisation increased in 2016 to Euro 64.4 million (Euro 61.1 million in 2015), representing 20% of revenues (19.2% in 2015).

The key data of the Zignago Vetro Group reclassified consolidated income statement for 2016 and 2015, according to management's view as described previously, are shown below:

	2016		2015		Change
	Euro thou.	%	Euro thou.	%	%
Revenues	322,866	100.0%	318,511	100.0%	1.4%
Changes in finished and semi-finished
products and work in progress	5,165	1.6%	6,399	2.0%	(19.3%)
Internal production of fixed assets	3,230	1.0%	1,468	0.5%	n.s.
Value of production	331,261	102.6%	326,378	102.5%	1.5%
Cost of goods and services	(175,671)	(54.4%)	(179,253)	(56.3%)	(2.0%)
Value added	155,590	48.2%	147,125	46.2%	5.8%
Personnel expense	(74,671)	(23.1%)	(72,063)	(22.6%)	3.6%
EBITDA	80,919	25.1%	75,062	23.6%	7.8%
Amortisation & Depreciation	(33,232)	(10.3%)	(32,062)	(10.1%)	3.6%
Accruals to provisions	(328)	(0.1%)	(1,005)	(0.3%)	(67.4%)
EBIT	47,359	14.7%	41,995	13.2%	12.8%
Net recurring non-operating income	852	0.3%	3,593	1.1%	(76.3%)
O perating Profit	48,211	15.0%	45,588	14.3%	5.8%
Net financial expense	(3,301)	(1.0%)	(4,042)	(1.3%)	(18.3%)
Net exchange gains/(losses)	(171)	(0.1%)	9 4	0.1%	n.s.
Profit before taxes	44,739	13.9%	41,640	13.1%	7.4%
Income taxes (Tax-rate 2016: 30.3%) (tax-rate 2015: 30.2%)	(13,548)	(4.2%)	(12,594)	(4.0%)	7.6%
Profit for the year	31,191	9.7%	29,046	9.1%	7.4%

Consolidated revenues for 2016 and 2015 were as follows:

(Euro thousands)	2016	2015	Change %
Zignago Vetro SpA	183,223	175,551	4.4%
Verreries Brosse SAS	51,435	54,018	(4.8%)
Vetri Speciali SpA (*)	68,864	70,826	(2.8%)
HSC SA	23,222	22,350	3.9%
Zignago Glass USA Inc.	325	162	n.a.
Vetreco (*)	4,093	3,353	n.a.
Total aggregate	331,162	326,260	1.5%
Elimination of intergroup sales & adjustments	(8,296)	(7,749)	7.1%
Total consolidated	322,866	318,511	1.4%

* For group share

Group revenues outside Italy amounted to Euro 124.3 million (Euro 126.1 million in 2015; - 1.4%) and account for 38.5% of total revenues (2015: 39.6%). In detail:

(Euro thousands)	2016	2015	Change %
Zignago Vetro SpA	39,938	41,494	(3.7%)
Verreries Brosse SAS	50,635	50,422	0.4%
Zignago Glass USA Inc.	229	148	n.a.
Vetri Speciali SpA (*)	16,999	19,183	(11.4%)
HSC SA	16,486	14,850	11.0%
Total	124,287	126,097	(1.4%)
% of total revenues	38.5%	39.6%

* For group share

Breakdown of foreign sales:

(Euro thousands)	2016	2015	Change %
E.U.	103,563	103,492	0.1%
Other countries	20,724	22,605	(8.3%)
Total	124,287	126,097	(1.4%)

The contribution to the profit for 2016 and 2015 was as follows:

(Euro thousands)	2016	2015	Change %
Zignago Vetro SpA	27,229	23,543	15.7%
Verreries Brosse SAS	(1,610)	210	(866.7%)
Vetri Speciali SpA (*)	13,062	12,923	1.1%
HSC SA	1,913	1,210	58.1%
Zignago Glass USA Inc.	(222)	(98)	n.a.
Vetreco Srl (*)	(82)	(371)	n.a.
Total aggregate	40,290	37,417	7.7%
Consolidation adjustments	(9,099)	(8,371)	8.7%
Profit for the year	31,191	29,046	7.4%

* For group share

The key data of the reclassified consolidated IFRS income statement of the Zignago Vetro Group in 2016 and 2015, applying IFRS 11, are illustrated below.

	2016			2015	Change
	Euro thou.	%	Euro thou.	%	%
Revenues	252,085	100.0%	246,366	100.0%	2.3%
Changes in finished and semi-finished products and work in progress	1,875	0.7%	5,442	2.2%	(65.5%)
Internal production of fixed assets	3,230	1.3%	1,468	0.6%	n.a.
Value of production	257,190	102.0%	253,276	102.8%	1.5%
Cost of goods and services	(140,396)	(55.7%)	(143,145)	(58.1%)	(1.9%)
Value added	116,794	46.3%	110,131	44.7%	6.1%
Personnel expense	(58,445)	(23.2%)	(57,598)	(23.4%)	1.5%
Effect of measurement of JV using Equity method	12,945	5.1%	12,565	5.1%	3.0%
EBITDA	71,294	28.3%	65,098	26.4%	9.5%
Amortisation & Depreciation	(28,616)	(11.4%)	(27,580)	(11.2%)	3.8%
Accruals to provisions	(224)	(0.1%)	(815)	(0.3%)	(72.5%)
EBIT	42,454	16.8%	36,703	14.9%	15.7%
Net recurring non-operating income	(47)	---	2,833	1.1%	n.a.
O perating profit	42,407	16.8%	39,536	16.0%	7.3%
Net financial expense	(2,740)	(1.1%)	(3,371)	(1.4%)	(18.7%)
Net exchange gains/(losses)	(173)	(0.1%)	6 8	---	n.a.
Profit before taxes	39,494	15.7%	36,233	14.7%	9.0%
Income taxes	(8,303)	(3.3%)	(7,187)	(2.9%)	15.5%
(Tax-rate 2016: 21%) (Tax-rate 2015: 19.8%)
Profit for the year	31,191	12.4%	29,046	11.8%	7.4%

For a better understanding of the performances for 2016, stated in accordance with management's view, a reconciliation is provided below of the reclassified income from joint ventures measured using the equity method and that utilising the proportional consolidation criteria, as adopted by the Zignago Vetro Group until 31 December 2013.

							Proportional consolidation
	2016 IFRS	Vetri Speciali SpA		Vetreco Srl Adjustment to Parent policies	Neutralisation JV using the equity criteria	2016 pre IFRS 11 (management view)
	Euro thou.	Euro thou.	Euro thou.	Euro thou.	Euro thou.	Euro thou.
Revenues	252,085	68,864	4,093	(1,255)	(921)	322,866
Changes in finished and semi-finished products and work in progress Internal production of	1,875	2,185	(117)	1,222	---	5,165
fixed assets	3,230	---	---	---	---	3,230
Value of production	257,190	71,049	3,976	(33)	(921)	331,261
Cost of goods and services	(140,396)	(33,049)	(3,147)	---	921	(175,671)
Value added	116,794	38,000	829	(33)	---	155,590
Personnel expense	(58,445)	(15,817)	(409)	---	---	(74,671)
Effect of measurement of JV using Equity method	12,945	---	---	---	(12,945)	---
EBITDA	71,294	22,183	420	(33)	(12,945)	80,919
Amort. & Deprec.	(28,616)	(4,306)	(310)			(33,232)
Accruals to provisions	(224)	(102)	(2)	---	---	(328)
EBIT	42,454	17,775	108	(33)	(12,945)	47,359
Net recurring non
operating income	(47)	915	---	(16)	---	852
O perating Profit	42,407	18,690	108	(49)	(12,945)	48,211
Net financial expense	(2,740)	(412)	(149)	---	---	(3,301)
Net exchange gains/(losses)	(173)	2	---	---	---	(171)
Profit/(loss) before
taxes	39,494	18,280	(41)	(49)	(12,945)	44,739
Income taxes	(8,303)	(5,218)	(41)	1 4	---	(13,548)
Consolidated profit/(loss) before tax	31,191	13,062	(82)	(35)	(12,945)	31,191
Profit/(loss) for the year	31,191	13,062	(82)	(35)	(12,945)	31,191

Statement of financial position

The reclassified statement of financial position of the Zignago Vetro Group, prepared according to management's view as described previously, at 31 December 2016 and 31 December 2015 are summarised below:

		31.12.2016		31.12.2015	Change
	Euro thou.		% Euro thou.	%	Euro thou.
Trade receivables	67,331		66,674		657
Other receivables	19,293		14,870		4,423
Inventories	82,458		77,222		5,236
Current non-financial payables	(70,004)		(70,934)		930
Payables on fixed assets	(18,996)		(7,975)		(11,021)
A) Working capital	80,082	25.7%	79,857	29.1%	225
Net tangible and intangible assets	202,249		163,977		38,272
Goodwill	40,784		40,808		(24)
Other eq. investments & non-current assets	6,395		8,133		(1,738)
Non-current provisions and non-financial payables	(17,581)		(18,186)		605
B) Net fixed capital	231,847	74.3%	194,732	70.9%	37,115
A+B= Net capital employed	311,929	100.0%	274,589	100.0%	37,340
Financed by:
Current loans and borrowings	108,176		103,989		4,187
Cash and cash equivalents	(67,505)		(103,542)		36,037
Current net debt	40,671	13.0%	447	0.2%	40,224
Non-current loans and borrowings	115,757	37.1%	128,513	46.8%	(12,756)
C) Net financial debt	156,428	50.1%	128,960	47.0%	27,468
Opening Group equity	145,629		133,766
Dividends paid in the year	(20,346)		(17,316)
Other equity changes	(973)		133
Group Profit for the year	31,191		29,046
D) Closing equity	155,501	49.9%	145,629	53.0%	9,872
C+D = Total financial debt and equity	311,929	100.0%	274,589	100.0%	37,340

Working capital increased overall by Euro 0.2 million on 31 December 2015. Trade receivables increased Euro 0.7 million, other receivables increased Euro 4.4 million, inventories increased Euro 5.2 million, current non-financial payables decreased Euro 0.9 million and payables to fixed asset suppliers increased Euro 11 million for capital expenditure in the year.

Net fixed capital increased from Euro 194.7 million at 31 December 2015 to Euro 231.8 million at 31 December 2016 (Euro 37,1 million; +19.1%). In particular, net property, plant and equipment and intangible assets increased Euro 38.3 million, following new investments exceeding amortisation and depreciation.

Capital expenditures of the companies of the Zignago Vetro Group in 2016 amounted to Euro 77.1 million (Euro 50.6 million in 2015; +52.6%). This principally concern:

• Zignago Vetro SpA, for Euro 16.6 million (Euro 37.9 million in 2015), principally for the renewal of plant, machinery and equipment and the purchase of moulds and pallets;
• Verreries Brosse SAS for Euro 3 million (Euro 3.8 million in 2015), principally for the renewal of industrial equipment, including moulds;
• Vetri Speciali SpA (for its share) for Euro 25.1 million (Euro 3.7 million in 2015), principally for the start-up of the new facilities at Gardola and the renewal of production plant and new moulds;
• Huta Szkła "Czechy" S.A., for Euro 32.3 million (Euro 5.1 million in 2015), principally for the refurbishment of the furnace, and the renewal of production plant and moulds;

-Vetreco S.r.l., (for its share) for Euro 0.1 million (Euro 0.1 million in 2015), for the completion of the new production facilities.

Consolidated equity amounted to Euro 155.5 million (at 31 December 2015: Euro 145.6 million; +6.8%). The increase of Euro 9.9 million concerns the consolidated profit (Euro 31.2 million), exceeding the dividend distributed (Euro 20.3 million) and other net decreases, principally relating to the employee benefit and translation reserves.

The net financial debt at 31 December 2016, following the changes illustrated above, was Euro 156.4 million - increasing Euro 27.5 million (+21.3%) on 31 December 2015.

The reclassified statement of financial position of the Zignago Vetro Group at 31 December 2016 according to IFRS in force, including the effects of applying IFRS 11, compared to 31 December 2015 is shown below:

	31.12.2016		31.12.2015	Change
	Euro thou.		% Euro thou.	%	Euro thou.
Trade receivables	54,905		53,476		1,429
Other receivables	13,989		11,879		2,110
Inventories	69,600		66,487		3,113
Current non-financial payables	(54,125)		(55,554)		1,429
Payables on fixed assets	(13,250)		(7,320)		(5,930)
A) Working capital	71,119	25.4%	68,968	26.9%	2,151
Net tangible and intangible assets	152,724		133,967		18,757
Goodwill	698		722		(24)
Equity investments measured using the equity
method	64,210		60,292		3,918
Other eq. investments and non-current assets	5,806		7,564		(1,758)
Non-current provisions and non-financial payables	(14,549)		(15,137)		588
B) Net fixed capital	208,889	74.6%	187,408	73.1%	21,481
A+B= Net capital employed	280,008	100.0%	256,376	100.0%	23,632
Financed by:
Current loans and borrowings	96,271		92,475		3,796
Cash and cash equivalents	(59,361)		(100,063)		40,702
Current net debt	36,910	13.2%	(7,588)	(3.0%)	44,498
Non-current loans and borrowings	87,579	31.3%	118,335	46.2%	(30,756)
C) Net financial debt	124,489	44.5%	110,747	43.2%	13,742
Opening Group equity	145,676		133,766
Dividends paid in the year	(20,346)		(17,316)
Other equity changes	(1,002)		133
Group Profit for the year	31,191		29,046
D) Closing equity	155,519	55.5%	145,629	56.8%	9,890
C+D = Total financial debt and equity	280,008	100.0%	256,376	100.0%	23,632

For a better understanding of the statement of financial position at 31 December 2016, stated in accordance with management's view, a reconciliation is provided below of the financial position with joint ventures measured using the equity method and that utilising the proportional consolidation criteria, as adopted by the Group until 31 December 2013.

			Proportional consolidation
	31.12.2016 IFRS	Vetri Speciali SpA	Vetreco Srl	Adjustment to Parent policies	Neutralis. JV under the equity criteria	2016 pre-IFRS 11 (management view)
	Euro thou.	Euro thou.	Euro thou.	Euro thou.	Euro thou.	Euro thou.
Trade receivables	54,905	11,616	902	---	(92)	67,331
Other receivables	13,989	4,332	972	---	---	19,293
Inventories	69,600	13,114	315	(571)	---	82,458
Current non-financial payables	(54,125)	(14,733)	(1,238)	---	9 2	(70,004)
Payables on fixed assets	(13,250)	(5,713)	(33)	---	---	(18,996)
A) Working capital	71,119	8,616	918	(571)	---	80,082
Net tangible and intangible assets	152,724	44,945	4,580	---	---	202,249
Goodwill	698	40,086	---	---	---	40,784
Equity investments measured using the equity method	64,210	---	---	---	(64,210)	---
Other eq. investments and non current assets Non-current provisions and non	5,806	423	6	160	---	6,395
financial payables	(14,549)	(3,015)	(17)	---	---	(17,581)
B) Net fixed capital	208,889	82,439	4,569	160	(64,210)	231,847
A+B= Net capital employed	280,008	91,055	5,487	(411)	(64,210)	311,929
Financed by:
Current loans and borrowings	96,271	10,896	1,009	---	---	108,176
Cash and cash equivalents	(59,361)	(8,093)	(51)	---	---	(67,505)
Current net debt	36,910	2,803	958	---	---	40,671
Non-current loans and borrowings	87,579	23,845	4,333	---		115,757
C) Net financial debt	124,489	26,648	5,291	---	---	156,428
D) Non-controlling interest equity		---	---	---	---	---
Opening equity	145,676	60,501	149	(376)	(60,321)	145,629
Dividends	(20,346)	(9,056)	---	---	9,056	(20,346)
Other changes in equity	(1,002)	(100)	129	---	---	(973)
Profit/(loss) for the year	31,191	13,062	(82)	(35)	(12,945)	31,191
D) Closing equity	155,519	64,407	196	(411)	(64,210)	155,501
C+D+E = Total financial debt and
equity	280,008	91,055	5,487	(411)	(64,210)	311,929

The cash flow movements in the consolidated net financial debt of the Zignago Vetro Group at 31 December 2016 and 31 December 2015, stated in accordance with management's view, were as follows:

(Euro thousands)	31.12.2016	31.12.2015
Net financial debt at 1 January	(128,960)	(107,749)
Self-financing:
- profit for the year	31,191	29,046
- amortisation & depreciation	33,232	32,062
- net change in provisions	(605)	707
- Net gains (losses) on sale of property, plant & equipment	(333)	212
	63,485	62,027
(Increase)/decrease in working capital	(225)	(19,404)
Investments in property, plant and equipment	(76,974)	(50,360)
Investments in intangible assets	(214)	(223)
Decrease (increase) of other medium/long term assets	1,738	(410)
Realisable value of property, plant and equipment sold	5,570	4,532
	(70,105)	(65,865)
Free cash flow	(6,620)	(3,838)
Distribution of dividends	(20,346)	(17,316)
Effect on equity of translation of foreign
currency financial statements & other changes	(502)	(57)
	(20,848)	(17,373)
Increase of net financial debt	(27,468)	(21,211)
Net financial debt at 31 December	(156,428)	(128,960)

The principal equity and financial indicators taken from the Consolidated Financial Statements of the Zignago Vetro Group for the years ended 31 December 2016 and 2015, stated in accordance with management's view, are summarised in the table below:

Performance and financial indicators	FY 2016	FY 2015
RO E
Profit for the year/Average Consolidated Equity for the year	20.70%	20.80%
RO I
Operating margin (Ebit)/Average capital employed for the year	16.10%	16.30%
RO S
Operating margin (Ebit)/Revenues	14.70%	13.20%
Rotation of Capital Employed
Revenues/Average capital employed for the year	1.10	1.23
(Euro thousands)
Net financial charges	(3,301)	(4,042)
Gross Operating Margin (EBITDA)	80,919	75,062
Financial charges/EBITDA	4.1%	5.4%
Net financial debt	156,428	128,960
Net financial debt/EBITDA	1.93	1.72
Free cash flow	(6.6)	(3.8)

The Zignago Vetro Group workforce at 31 December 2016 numbered 2,167 compared to 1,975 at 31 December 2015. The employees of Vetri Speciali SpA and Vetreco Srl have been fully integrated.

The breakdown of the Group workforce at 31 December 2016 is shown below:

Composition	Executives	Managers	White-collars	Blue-collars
Workforce	2 7	9 8	373	1,669
Average age	5 3	4 7	4 2	4 2
Years of service in Group Companies	1 2	1 8	1 6	1 4
Open ended contracts	2 4	9 5	349	1,505
Term contracts	3	3	2 4	164

Related party transactions

The Zignago Vetro Group has undertaken commercial and service transactions with related parties during the year, as detailed in the Notes, to which reference should be made.

Research, development and advertising costs

The companies of the Zignago Vetro Group undertook research and development focused on process and product innovation which resulted in, among other developments, the use of new materials, the introduction of new products and the application of new technical-production solutions for the "food and beverages", "cosmetics and perfumery" and "special containers" sectors.

Zignago Vetro SpA also carried out research and development for the design and introduction of new information management systems, including improvements to the process IT set up, in order to create more efficient and effective operating instruments.

Therefore, Zignago Vetro SpA can avail of the tax credit under Law 190/2014, establishing this amount according to the methodologies communicated in the Tax Agency Circular.

Environmental information

In 2016, the commitment of the Zignago Vetro Group continued in the protection of the environment with the continual improvement of the policies of territorial protection and management of environmental issues with actions aimed to reduce atmospheric emissions and energy consumption in the utilisation of natural resources and the optimisation of the production cycle, while remaining continually attentive to new and future technology developed internationally.

Risks related to personnel, safety and management

The Companies of the Zignago Vetro Group implement plant management policies to minimise the risk of accidents ensuring high levels of security in line with best industrial practices, utilising insurance to guarantee an extensive degree of protection for company structures, third party risks and interruptions in production activity. The company trains and motivates the workforce to guarantee efficiency and normal operational continuity.

Personal data security and protection

Pursuant to rule 26 of Attachment B of Legislative Decree No. 196 of 30 June 2003 (Employee data protection code), the Companies of the Zignago Vetro Group adopted new security measures required by the above-mentioned decree and updated the "Security Planning Document".

Financial instruments: Group objectives & policies and description of risks

With regard to point No. 6 bis, paragraph 3 of Article 2428 of the Civil Code and Article 40, paragraph 2, lett. d) bis of Legs. Decree 127/1991, the main financial instruments used by Zignago Vetro SpA, the Parent, and the Zignago Vetro Group companies consist of trade receivables and payables, cash & cash equivalents, bank loans and borrowings, leasing contracts and interest rate swaps.

As regards the Zignago Vetro Group's financial management, the cash flow from operating activities are considered to be consistent with objectives for repayment of existing debt and such as to assure appropriate financial balance and adequate return on equity via dividend flows.

The Zignago Vetro Group undertook six interest rate swaps in order to hedge the interest rate risk on current loans.

The characteristics of the derivative contracts, their notional value and the market value at 31 December 31 2016 are as follows:

Company	Bank	Underlying	Date of signing	Notional amount at reference date	Expiry	Market value at 31.12.2016
Zignago
Vetro SpA	Unicredit	Loan	21/01/2015	17,142,857	31/12/2020	(253,964)
Zignago
Vetro SpA	Unicredit	Loan	31/03/2015	22,857,143	31/12/2020	(338,618)
Zignago
Vetro SpA	Mediobanca	Loan	21/01/2015	12,857,143	31/12/2020	(192,156)
Zignago Vetro SpA	Mediobanca	Loan	31/03/2015	17,142,857	31/12/2020	(256,208)
Zignago
Vetro SpA	Banco Brescia	Loan	18/12/2014	11,327,102	18/12/2019	(132,671)
Zignago
Vetro SpA	BNL	Loan	22/12/2014	27,000,000	22/06/2021	(428,032)
Total				108,327,102		(1,601,649)

The above-mentioned transactions were undertaken for hedging purposes, and provide for the payment of a fixed interest rate against the receipt of a variable interest rate. However, these transactions do not comply with all the requirements of IFRS to qualify for hedge accounting. Therefore, the Zignago Vetro Group does not use the so-called hedge accounting method and records the economic effects of hedging directly to profit or loss.

We consider that the Zignago Vetro Group is not exposed to credit risk any higher than the industry average, given that most receivables relate to customers of well-established commercial reliability and also that most are insured. Allowance for impairment debts has in any case been made to cover against any residual credit risks. We specify that such allowance was made in the period and in previous periods against specific positions involved in procedures or with longer past-due status than the Group companies' average collection times. General allowances for impairment have also been made for potential bad debts.

The currency risk is currently not considered significant, as transactions are almost exclusively carried out in Euro.

In relation to the currency risk, the Group did not subscribe to any currency hedging instruments and, in accordance with the Group policy to date, derivative financial instruments are not taken out for trading purposes. Therefore, the Zignago Vetro Group remains exposed to the currency risk on the assets and liabilities in foreign currencies at reporting date, which is not considered significant. A number of subsidiaries of the Zignago Vetro Group are located in countries not within the Eurozone: the United States and Poland. As the Zignago Vetro Group's functional currency is the Euro, the income statements of these companies are translated into Euro at the average exchange rate and, on like-for-like basis for revenues and profit in the local currency, changes in the exchange rate may impact the value in Euro of revenues, costs and profit (loss) for the year.

The Parent Zignago Vetro SpA is exposed to fluctuations in some commodity prices, in particular those relating to energy factors, such as fuel, utilised in the production process. Where considered appropriate, in order to neutralise the price effect, the Company undertook hedging transactions through the use of derivative financial instruments.

At 31 December 2016, Zignago Vetro SpA did not have any commodity swap contracts to hedge against fluctuations in energy factors.

The markets of the companies of the Zignago Vetro Group are not located in areas requiring country-risk management. Trade transactions substantially take place in western countries, primarily in the Euro and USD areas.

Pursuant to the Bank of Italy/ Consob /Isvap document No. 2 of 6 February 2009 and IAS 1.25-26, it is considered, based on the Group`s strong profitability, solid financial position and in spite of the current economic environment, that there are no uncertainties or risks on the going concern of the business.

It is considered that the information provided, together with the information illustrated below and relating to the performance of the individual companies, represents a true, balanced and exhaustive analysis of the situation of the Zignago Vetro Group and of the results of operations, overall and in the various sectors, in accordance with the size and complexity of the Group's business operations.

Reconciliation between the Group and Zignago Vetro SpA profit for the year and equity

The reconciliation of the equity and profit of Zignago Vetro SpA and the consolidated accounts at 31 December 2016 and 2015 are disclosed below as per Consob communication No. DEM/6064293 of 28 July 2006.

Reconciliation at 31 December 2016.

(Euro thousands)	2016
	Profit 2016	Equity 31.12.2016
Financial statements of the Parent	27,229	102,765
Consolidation adjustments:
- interests in joint ventures measured using equity method	12,945	37,831
- reversal of inter-group dividends	(9,056)	---
- reversal of inter-company Profit	(8)	(35)
- goodwill on acquisition of HSC SA and adjustment to period-end
exchange rate		698
	3,881	38,494
Carrying amount of equity investments:
Verreries Brosse SAS	---	(4,000)
Zignago Glass USA Inc.	---	(189)
HSC SA	---	(10,327)
	---	(14,516)
Profit/(loss) and equity of the subsidiaries:
Verreries Brosse SAS	(1,610)	12,500
Zignago Glass USA Inc.	(222)	(147)
HSC SA	1,913	16,405
	8 1	28,758
Consolidated Financial Statements	31,191	155,501

Reconciliation at 31 December 2015.

(Euro thousands)	2015
	Profit 2015	Equity 31/12/2015
Financial statements of the Parent	23,543	96,205
Consolidation adjustments:
- interests in joint ventures measured using equity method	12,565	34,041
- reversal of inter-group dividends	(8,402)	---
- reversal of inter-company Profit	18	(27)
- reversal of "Fond de Commerce" in Verreries Brosse SAS - deferred taxes on pension and profit participation fund in Verreries	---	(100)
Brosse SAS	82	501
- goodwill on acquisition of HSC SA and adjustment to year-end exchange rate
- other consolidation adjustments	--- (243)	722 639
	4,020	35,776
Carrying amount of consolidated companies:
Verreries Brosse SAS	---	(4,000)
Zignago Glass USA Inc.	---	(189)
HSC SA	---	(10,327)
	---	(14,516)
Profit/(loss) and equity of the subsidiaries:
Verreries Brosse SAS	371	13,071
Zignago Glass USA Inc.	(98)	83
HSC SA	1,210	15,010
	1,483	28,164
Consolidated Financial Statements	29,046	145,629

* * * * *

Significant events after 31 December 2016 Outlook

SIGNIFICANT EVENTS AFTER 31 DECEMBER 2016

There were no significant events after 31 December 2016.

OUTLOOK

Based on the information available, demand in the sectors in which the Group operates is overall expected to remain at a good level.

* * * * *

In the following pages, we review and comment upon the results of the Zignago Vetro SpA and of the individual subsidiaries.

For greater clarity, the operating results and statement of financial position of Zignago Vetro SpA and its subsidiaries are presented according to the contribution of each to the consolidated financial statements, in accordance with management's view. They are presented according to normal reporting practices. The figures concern 100% of the joint subsidiary Vetreco Srl.

THE COMPANY

Zignago Vetro SpA

Beverage and Food glass container demand in Europe continued to grow, led by the recovery in consumption, in particular, on the Italian market for segments mainly driven by finished product export.

The global Perfumery market again performed well, supported by emerging economy and North American sales, while Europe reported weak sales.

The skincare segment continued to grow, but with divergent growth levels across markets.

The reclassified income statement of Zignago Vetro SpA in 2016 is shown below:

	2016		2015		Change
	Euro thou.	%	Euro thou.	%	%
Revenues	183,223	100.0%	175,551	100.0%	4.4%
Changes in finished and semi-finished products and work in progress	2,834	1.5%	6,028	3.4%	n.a.
Internal production of fixed assets	2,593	1.4%	841	0.5%	n.a.
Value of production	188,650	103.0%	182,420	103.9%	3.4%
Cost of goods and services	(105,136)	(57.4%)	(106,822)	(60.8%)	(1.6%)
Value added	83,514	45.6%	75,598	43.1%	10.5%
Personnel expense	(34,914)	(19.1%)	(33,702)	(19.2%)	3.6%
EBITDA	48,600	26.5%	41,896	23.9%	16.0%
Amortisation & Depreciation	(20,111)	(11.0%)	(18,879)	(10.8%)	6.5%
Accruals to provisions	(167)	(0.1%)	(765)	(0.4%)	(78.2%)
EBIT	28,322	15.5%	22,252	12.7%	27.3%
Net recurring non-operating income	9	---	2,642	1.5%	n.a.
O perating Profit	28,331	15.5%	24,894	14.2%	13.8%
Investment income	9,056	4.9%	8,402	4.8%	7.8%
Net financial expense	(2,259)	(1.2%)	(2,770)	(1.6%)	(18.4%)
Net exchange gains/(losses)	(67)	---	(3)	---	n.a.
Profit before taxes	35,061	19.1%	30,523	17.4%	14.9%
Income taxes (Tax-rate 2016: 22.3%) (tax-rate 2015: 22.9%)	(7,832)	(4.3%)	(6,980)	(4.0%)	12.2%
Profit for the year	27,229	14.9%	23,543	13.4%	15.7%

Revenues amounted to Euro 183.2 million, up 4.4% on the previous year (Euro 175.6 million). Sales of glass containers and accessories (the latter referring to Zignago Vetro SpA's services on the market) amounted to Euro 168.9 million, up 4.7% on Euro 161.3 million in 2015.

Exports in 2016 decreased 5.4% on 2015, accounting for 22.5% of renvenue from containers and accessories revenues (24.9% in 2015).

(Euro thousands)	2016	2015	Change %
Italy	130,992	121,220	8.1%
E.U. (excluding Italy)	29,675	33,236	(10.7%)
Other segments	8,266	6,878	20.2%
Total	168,933	161,334	4.7%
of which export	37,941	40,114	(5.4%)
%	22.5%	24.9%

Revenues by geographical segment, excluding sundry materials and services

Materials and external services, net of changes in inventories and internal production, decreased from Euro 100 million in 2015 to Euro 99.7 million in 2016 (-0.2%) and on revenues from 56.9% to 54.5%.

Personnel expense increased 3.6%, principally due to higher volumes. They include the actuarial measurement of post-employment benefits, excluding actuarial gains/losses, in addition to temporary staff. These costs accounted for 19.1% of revenues in 2016 compared to 19.2% in 2015.

EBITDA in 2016 was Euro 48.6 million compared to Euro 41.9 million in 2015 (+16%). The EBITDA margin was 26.5% in 2016 (23.9% in 2015).

EBIT in 2016 was up 27.3% on the previous year (Euro 28.3 million compared to Euro 22.3 million). The margin was 15.5% in 2016 (12.7% in 2015).

Investment income amounted to Euro 9.1 million (Euro 8.4 million in 2015) and solely concerned dividends from Vetri Speciali SpA.

Net financial charges of Euro 2.2 million (Euro 2.8 million in 2015) related to the increase in the net financial debt.

The profit for 2016 was Euro 27.2 million (Euro 23.5 million in 2015: +15.7%), after income taxes of Euro 7.8 million (Euro 7 million in 2015). The tax rate was 22.3% in 2016 compared to 22.9% in 2015.

The cash flow generated from profit and depreciation/amortisation amounted to Euro 47.3 million in 2016 compared to Euro 42.4 million in 2015 (+11.6%) and represents 25.8% of revenues (24.2% in 2015).

The reclassified statement of financial position of Zignago Vetro SpA at 31 December 2016 and 2015 was as follows:

		31.12.2016		31.12.2015	Change
	Euro thou.	%	Euro thou.	%	Euro thou.
Trade receivables	43,730		39,664		4,066
Other receivables	9,855		8,931		924
Inventories	46,362		43,168		3,194
Current non-financial payables	(41,263)		(42,472)		1,209
Payables on fixed assets	(4,173)		(5,613)		1,440
A) Working capital	54,511	31.2%	43,678	25.3%	10,833
Net tangible and intangible assets	87,448		95,034		(7,586)
Equity investments	40,895		40,766		129
Other eq. investments and non-current assets	3,975		5,867		(1,892)
Non-current provisions and non-financial
payables	(11,928)		(12,400)		472
B) Net fixed capital	120,390	68.8%	129,267	74.7%	(8,877)
A+B= Net capital employed	174,901	100.0%	172,945	100.0%	1,956
Financed by:
Current loans and borrowings	74,613		73,478		1,135
Cash and cash equivalents	(84,592)		(104,362)		19,770
Current net debt	(9,979)	(5.7%)	(30,884)	(17.9%)	20,905
Non-current loans and borrowings	82,115	46.9%	107,624	62.2%	(25,509)
C) Net financial debt	72,136	41.2%	76,740	44.4%	(4,604)
Opening equity	96,205		89,867
Dividends paid in the year	(20,346)		(17,316)
Profit for the year	27,229		23,543
Other changes	(323)		111
D) Closing equity	102,765	58.8%	96,205	55.6%	6,560
C+D = Total financial debt and
equity	174,901	100.0%	172,945	100.0%	1,956

Working capital at 31 December 2016 increased Euro 10.8 million on 31 December 2015, mainly due to the impact of the increase in trade receivables (+Euro 4.1 million), inventories (+Euro 3.2 million) and the decrease in payables to suppliers of fixed assets (-Euro - 1.4 million) and current non-financial payables (-1.2).

Net fixed capital at 31 December 2016 decreased Euro 8.9 million on December 31, 2015: the decrease is due to lower investments in tangible and intangible fixed assets than amortisation and depreciation in the year. "Other non-current assets" includes a tax asset of Euro 2.3 million following investments in the second half of 2014 and the first half of 2015, which enabled use of the tax relief under Law Decree no. 91/2014.

Capital expenditure in the year amounted to Euro 16.6 million (Euro 37.9 million in 2015), mainly due to the replacement of plant, machinery and equipment, including moulds and pallets.

The increase in equity at 31 December 2016 of Euro 6.6 million results from the profit for the year (Euro 27.2 million) being higher than the dividends distributed in the year (Euro 20.3 million) and the change in other reserves (Euro 0.3 million).

The net financial debt at 31 December 2016, following the movements in net capital employed and equity described above, was Euro 72.1 million - a decrease of Euro 4.6 million (-6%) on 31 December 2015. Cash and cash equivalents were Euro 84.6 million compared to Euro 104.3 million at 31 December 2015.

Employees of the Company at 31 December 2016 numbered 601, broken down as follows: 11 executives, 116 white-collars and 449 blue-collars. There were 33 fixed-term employees. At 31 December 2015, employees numbered 585: 9 executives, 108 white-collars and 443 blue-collars. There were 27 fixed-term employees.

The table below shows the composition of the Zignago Vetro SpA workforce at 31 December 2016.

Composition	Executives	Managers	White-collars	Blue-collars
Workforce	1 1	2 5	116	449
Average age	5 7	4 8	4 5	4 3
Years of service in the Company	1 2	1 4	1 7	1 4
Open ended contracts	8	2 4	112	424
Term contracts	3	1	4	2 5

Current year operating performance.

Market conditions at the beginning of 2017 were substantially in line with those throughout 2016, although amid divergences across product categories and regions. Based on information available, it would appear reasonable to forecast overall results reflective of this trend in the coming months of the year.

THE CONSOLIDATED SUBSIDIARIES

Verreries Brosse SAS

Registered office: Vieux-Rouen-sur-Bresle (France) Business sector: glass bottles for luxury fragrances

Chairman Paolo Giacobbo

"Board of Directors" Maurizio Guseo - General Manager Roberto Celot Ovidio Dri Alberto Faggion Franco Grisan Nicolò Marzotto Michele Pezza

In 2016, the global luxury Perfumery market saw a contained improvement, with sales increasing in the emerging economies and North America, and a slight decrease in Europe. The market featured strong demand, although focussed on long-standing products with very few new launches.

The container market for quality spirits is stable.

The results in the first half of the year were impacted by a number of factors – also of an external nature (and particularly the repeated strikes called in France in response to the Government's labour market reform) - which were overcome during the second half of the year, with improving results.

The reclassified consolidated income statement compared to the previous year is shown below:

		2016		2015	Change
	Euro thou.	%	Euro thou.	%	%
Revenues	51,435	100.0%	54,018	100.0%	(4.8%)
Changes in finished and semi finished products and works-in
progress	(40)	(0.1%)	1,394	2.6%	n.a.
Value of production	51,395	99.9%	55,412	102.6%	(7.2%)
Cost of goods and services	(29,355)	(57.1%)	(30,462)	(56.4%)	(3.6%)
Value added	22,040	42.9%	24,950	46.2%	(11.7%)
Personnel expense	(17,202)	(33.4%)	(18,237)	(33.8%)	(5.7%)
EBITDA	4,838	9.4%	6,713	12.4%	(27.9%)
Amortisation & Depreciation	(6,033)	(11.7%)	(6,415)	(11.9%)	(6.0%)
Accruals to provisions	(5)	(0.0%)	---	---	n.a.
EBIT	(1,200)	(2.3%)	298	0.6%	(502.7%)
Net recurring non-operating income
(charges)	(33)	(0.1%)	194	0.4%	(117.0%)
O perating Profit/(loss)	(1,233)	(2.4%)	492	0.9%	(350.6%)
Net financial expense	(391)	(0.8%)	(519)	(1.0%)	(24.7%)
Net exchange gains/(losses)	8	0.0%	120	0.2%	(93.3%)
Profit/(loss) before taxes	(1,616)	(3.1%)	9 3	0.2%	n.a.
Income taxes	6	0.0%	117	0.2%	(94.9%)
Profit/(loss) for the year	(1,610)	(3.1%)	210	0.4%	(866.7%)

Revenues in 2016 amounted to Euro 51.4 million, a decrease of 4.8% on 2015 (Euro 54 million). Revenues of glass containers amounted to Euro 50.3 million (Euro 52.1 million in 2015)

(Euro thousands)	2016	2015	Change %
Europe	48,416	50,465	(4.1%)
North America	2,611	2,897	(9.9%)
Other countries	408	656	n.a.
Total	51,435	54,018	(4.8%)

Revenue by geographical segment

Material costs and external services, including changes in inventories, amounted to Euro 29.4 million compared to Euro 29.1 million in 2015 (+ 1.1%). The margin was 57.2% compared to 53.8%.

Personnel expense decreased from Euro 18.2 million to Euro 17.2 million (-5.7%), principally due to movements in the workforce and salaries. As a percentage of revenues, these costs decreased from 33.8% in 2015 to 33.4% in 2016.

EBITDA amounted to Euro 4.8 million, compared to Euro 6.7 million in the previous year (- 27.9%), with a 9.4% margin (12.4% in 2015).

Amortisation and depreciation decreased 6% in the year and was 11.7% of revenues compared to 11.9% in 2015.

Net financial expenses in the year reduced 24.7% on 2015.

The loss in 2016 was Euro 1.6 million (profit of Euro 210 thousand in 2015), after recognition of a deferred tax asset of Euro 6 thousand (Euro 117 thousand in 2015).

The cash flow generated from profit and amortisation and depreciation in 2016 was Euro 4.4 million, down 33.2% on 2015 (Euro 6.6 million), amounting to 8.6% of revenues (12.3% in 2015).

The reclassified consolidated statement of financial position at 31December 2016 and 2015 was as follows.

	31.12.2016		31.12.2015		Change
	Euro thou.	%	Euro thou.	%	Euro thou.
Trade receivables	8,728		11,897		(3,169)
Other receivables	2,664		2,129		535
Inventories	17,747		18,119		(372)
Current non-financial payables	(10,240)		(11,228)		988
Payables on fixed assets	(797)		(1,063)		266
A) Working capital	18,102	45.8%	19,854	45.0%	(1,752)
Net tangible and intangible assets	21,639		24,684		(3,045)
Non fully consolidated eq. investments & other medium/long term assets	1,146		1,184		(38)
Non-current provisions and non-financial payables	(1,361)		(1,585)		224
B) Net fixed capital	21,424	54.2%	24,283	55.0%	(2,859)
A+B= Net capital employed	39,526	100.0%	44,137	100.0%	(4,611)
Financed by:
Current loans and borrowings	27,495		26,846		649
Cash and cash equivalents	(7,567)		(6,391)		(1,176)
Current net debt	19,928	50.4%	20,455	46.3%	(527)
Non-current loans and borrowings	7,098	18.0%	9,572	21.7%	(2,474)
C) Net financial debt	27,026	68.4%	30,027	68.0%	(3,001)
Opening equity	14,110		13,900
Other equity changes	---
Profit (loss) for the year	(1,610)		210
D) Closing equity	12,500	31.6%	14,110	32.0%	(1,610)
C+D = Total financial debt
and Equity	39,526	100.0%	44,137	100.0%	(4,611)

Working capital at 31 December 2016 decreased Euro 1.8 million on the end of 2015, principally due to trade receivables which decreased Euro 3.2 million (-26.7%) on 31 December 2015.

Equity at 31 December 2016 amounted to Euro 10.2 million compared to Euro 11.2 million at 31 December 2015. Payables to suppliers for fixed assets totalled Euro 0.8 million, compared to Euro 1.1 million at 31 December 2015 (-Euro 0.3 million).

Net capital employed at 31 December 2016 decreased compared to the end of the previous year (- Euro 4,6 million), as capital expenditure the year (Euro 3 million) were lower than depreciation of Euro 6 million.

Net financial debt was Euro 27 million compared to Euro 30 million at 31 December 2015.

Equity at reporting date amounted to Euro 12.5 million, compared to Euro 14.1 million at 31 December 2015, following the loss for the year of Euro 1.6 million.

Capital expenditure in the year was as follows:

(Euro thousands)	2016	2015
Capital expenditure in the year:
Plant and machinery	1,426	1,230
Equipment (moulds)	1,371	2,400
Others	220	201
Intangible assets	1 4	5
Total	3,031	3,836

At 31 December 2016, employees numbered 311 (at 31 December 2015: 338 employees). The breakdown of Verreries Brosse workforce at 31 December 2016 is shown in the table below.

Composition	Executives	Managers	White-collars	Blue-collars
Workforce	6	2 4	5 3	228
Average age	4 8	4 6	4 1	4 4
Years of service in the Company	1 3	1 1	1 3	1 7
Open ended contracts	6	2 4	5 3	225
Term contracts	---	---	---	3

Current year operating performance

The company expects to continue the recovery of profitability as in the second half of 2016.

Huta Szkła "Czechy" S.A. (HSC SA)

Registered office: Trabkj (Poland) Business sector: glass containers

Chairman: Paolo Giacobbo

"Management Board": Roberto Cardini – General Manager Roberto Celot Alberto Faggion Franco Grisan Nicolò Marzotto Stefano Marzotto

"Supervisory Board": Paolo Nicolai - chairman Stefano Perosa Carlo Pesce

The European hollow glass market for Beverages and Food reported good container demand amid a generally buoyant consumer market.

The global Perfumery market again performed well, supported by emerging economy and North American sales and a degree of stability in Europe. The skincare segment continued to grow.

The reclassified income statement is shown below:

		FY 2016		FY 2015	Change
	Euro thou.	%	Euro thou.	%	%
Revenues Change in finished and semi finished products and work in	23,222	100.0%	22,350	100.0%	3.9%
progress	303	1.3%	(678)	(3.0%)	n.a.
Internal production of fixed assets	637	2.7%	627	2.8%	1.6%
Value of production	24,162	104.0%	22,299	99.8%	8.4%
Cost of goods and services	(13,139)	(56.6%)	(12,842)	(57.5%)	2.3%
Value added	11,023	47.5%	9,457	42.3%	16.6%
Personnel expense	(5,882)	(25.3%)	(5,462)	(24.4%)	7.7%
EBITDA	5,141	22.1%	3,995	17.9%	28.7%
Amortisation & Depreciation	(2,472)	(10.6%)	(2,286)	(10.2%)	8.1%
Accruals to provisions	(52)	(0.2%)	(50)	(0.2%)	4.0%
EBIT	2,617	11.3%	1,659	7.4%	57.7%
Net recurring non-operating income (charges)	(23)	(0.1%)	(3)	(0.0%)	n.a.
Operating Profit	2,594	11.2%	1,656	7.4%	56.6%
Net financial expense	(89)	(0.4%)	(82)	(0.4%)	8.5%
Net exchange gains/(losses)	(114)	(0.5%)	(49)	(0.2%)	132.7%
Profit before taxes	2,391	10.3%	1,525	6.8%	56.8%
Income taxes	(478)	(2.1%)	(315)	(1.4%)	51.7%
Profit for the year	1,913	8.2%	1,210	5.4%	58.1%

Revenues in 2016 amounted to Euro 23.2 million (in 2015: Euro 22.4 million; +3.9%). Revenues from glass containers amounted to Euro 19.8 million (in 2015: Euro 18.9 million; +4.9%).

Revenues include, in addition to glass containers, also product decoration services.

Revenues breakdown

(Euro thousands)	2016	2015	Change %
Glass containers	19,820	18,901	4.9%
Other materials and services	3,402	3,449	(1.4%)
Total	23,222	22,350	3.9%

Revenue by geographic segment

(Euro thousands)	2016	2015	Change %
Europe	20,409	18,929	7.8%
North America	280	854	(67.2%)
Other countries	2,533	2,567	(1.3%)
Total	23,222	22,350	3.9%

Materials and external services, including changes in inventories and internal work capitalized, amounted to Euro 12.2 million compared to Euro 12.9 million in 2015 (+5.4%). They accounted for 52.5% of revenues, compared to 57.7%.

The increase in personnel expense from Euro 5.5 million in 2015 to Euro 5.9 million in 2016 (+7.7%) is due to the expanded workforce, related to finishing activity, as well as normal salary increases.

EBITDA amounted Euro 5.1 million (22.1% margin), compared to Euro 4 million in the previous year (17.9% margin; +28.7%).

Amortisation and depreciation amounted to Euro 2.5 million (in 2015: Euro 2.3 million; + 8.1%).

Net financial expenses amounted to Euro 89 thousand, related to the net financial debt of the Company.

Net exchange differences principally concern the translation into Euro at reporting date of trade receivables and payables in foreign currencies.

The tax rate was 20% in 2016 compared to 20.7% in 2015.

The profit for 2016 was Euro 1.9 million (8.2% margin), compared to Euro 1.2 million in 2015 (5.4% margin) - an increase of 58.1%.

The cash flow generated from profit and amortisation and depreciation amounted to Euro 4.4 million (18.9% of revenues) compared to Euro 3.5 million in the previous year (15.6% of revenues, + 25.4%).

The reclassified statement of financial position at 31 December 2016 and 2015 was as follows.

		31.12.2016		31.12.2015	Change
	Euro thou.	%	Euro thou.	%	Euro thou.
Trade receivables	3,907		3,100		807
Other receivables	1,467		819		648
Inventories	5,540		5,239		301
Current non-financial payables	(4,026)		(3,063)		(963)
Payables on fixed assets	(8,280)		(644)		(7,636)
A) Working capital	(1,392)	(3.3%)	5,451	28.6%	(6,843)
Net tangible and intangible assets	43,637		14,249		29,388
Non fully consolidated eq. investments & other medium/long term assets	653		501		152
Non-current provisions and non-financial payables	(1,260)		(1,152)		(108)
B) Net fixed capital	43,030	103.3%	13,598	71.4%	29,432
A+B= Net capital employed	41,638	100.0%	19,049	100.0%	22,589
Financed by:
Current loans and borrowings	3,155		5,451		(2,296)
Cash and cash equivalents	(3,888)		(2,551)		(1,337)
Current net debt	(733)	(1.8%)	2,900	15.2%	(3,633)
Non-current loans and borrowings	25,966	62.4%	1,139	6.0%	24,827
C) Net financial debt	25,233	60.6%	4,039	21.2%	21,194
Opening equity	15,010		13,789
Other equity changes	(518)		11
Profit for the year	1,913		1,210
D) Closing equity	16,405	39.4%	15,010	78.8%	1,395
C+D = Total financial debt and equity	41,638	100.0%	19,049	100.0%	22,589

Working capital at 31 December 2016 decreased Euro 6.8 million on the end of the previous year, principally due to:

• trade receivables of Euro 3.9 million, increasing Euro 0.8 million compared to 2015 (+26%);

• inventories, in particular finished product inventories, increasing Euro 0.3 million;

• payables for capital expenditure, increasing Euro 7.6 million, related to new capital expenditure being implemented at reporting date;
• other receivables, increasing Euro 0.6 million (VAT and other income taxes).

Net financial debt at 31 December 2016 was Euro 25.2 million compared to Euro 4 million at 31 December 2015: + Euro 21.2 million.

Equity at year end amounted to Euro 16.4 million, compared to Euro 15 million at 31 December 2015 (+9.3%), after profit for the year (Euro 1.9 million) and exchange rate losses in 2016 recognised in the translation reserve (-Euro 0.5 million).

At 31 December 2016, employees numbered 476 (at 31 December 2015: 418). The table below shows the composition of the HSC SA workforce at 31 December 2016.

Composition	Executives	Managers	White-collars	Blue-collars
Workforce	2	3 2	5 4	388
Average age	5 0	4 6	3 7	4 0
Years of service in the Company	2 4	2 5	2 5	2 1
Open ended contracts	2	3 1	3 9	287
Term contracts	---	1	1 5	101

Current year operating performance

The good performance by the company in 2016, amid similar general market conditions in the current year, should see further growth in revenues, sustained also by the expanded production capacity.

Vetri Speciali SpA

Registered office: Trento – Via Manci, 5 Business sector: specialty glass containers

Chairman: Vitaliano Torno

Vice Chairman: Stefano Marzotto Chief Executive Officer: Giorgio Mazzer Directors: Luca Marzotto

Massimo Noviello

Statutory Auditors: Carlo Pesce - chairman Lorenzo Buraggi Stefano Meneghini

In 2016, special container demand remained at strong levels across all market segments and in particular for export driven consumer segments.

The reclassified income statement for 2016 and 2015 of Vetri Speciali SpA, for the share pertaining to Zignago Vetro SpA (50%), was as follows:

		2016		2015	Change
	Euro thou.		% Euro thou.	%	%
Revenues	68,864	100.0%	70,826	100.0%	(2.8%)
Changes in finished and semi-finished products and work in progress	2,185	3.2%	(449)	(0.6%)	n.a.
Value of production	71,049	103.2%	70,377	99.4%	1.0%
Cost of goods and services	(33,049)	(48.0%)	(33,783)	(47.7%)	(2.2%)
Value added	38,000	55.2%	36,594	51.7%	3.8%
Personnel expense	(15,817)	(23.0%)	(14,035)	(19.8%)	12.7%
EBITDA	22,183	32.2%	22,559	31.9%	(1.7%)
Amortisation & Depreciation	(4,306)	(6.3%)	(4,179)	(5.9%)	3.0%
Accruals to provisions	(102)	(0.1%)	(190)	(0.3%)	(46.3%)
EBIT	17,775	25.8%	18,190	25.7%	(2.3%)
Net recurring non-operating income	915	1.3%	761	1.1%	20.2%
O perating Profit	18,690	27.1%	18,951	26.8%	(1.4%)
Net financial expense	(412)	(0.6%)	(517)	(0.7%)	(20.3%)
Net exchange gains/(losses)	2	---	2 6	---	n.a.
Profit before taxes	18,280	26.5%	18,460	26.1%	(1.0%)
Income taxes (Tax-rate 2016: 28.6%) (tax-rate 2015: 30%)	(5,218)	(7.6%)	(5,537)	(7.8%)	(5.8%)
Profit for the year	13,062	19.0%	12,923	18.2%	1.1%

Revenues in 2016 amounted to Euro 68.9 million compared to Euro 70.8 million in the previous year (-2.8%).

The portion of exports in the year were 24.7% of revenues in 2016 (27.1% in 2015) and amounted to Euro 17 million (Euro 19.2 million in 2015; -11.4%).

Revenue by geographical segment (for the relevant portion):

(Euro thousands)	2016	2015	%
Italy	51,866	51,644	0.4%
European Union	10,391	10,448	(0.5%)
Other segments	6,607	8,734	(24.4%)
Total	68,864	70,826	(2.8%)
of which export	16,998	19,182	(11.4%)
%	24.7%	27.1%

Material costs and external services in 2016, including the changes in inventories, represent 44.8% of revenues compared to 48.3% in 2015.

The portion of personnel expense increased in the year by 12.7% and increased as a portion of revenues, from 19.8% in 2015 to 23% in 2016.

The portion of EBITDA amounts to Euro 22.2 million in 2016, down on Euro 22.6 million in the previous year (-1.7%). The margin was 32.2% (in 2015: 31.9%).

The portion of EBIT in 2016 amounted to Euro 17.8 million compared to Euro 18.2 million in 2015 (-2.3%), with a margin of 25.8%.

The portion of net financial expenses in the year reduced 20.3% on 2015. These costs accounted for 0.6% of revenues in 2016 compared to 0.7% in 2015.

The tax-rate was 28.6% in 2016 compared to 30% in the previous year.

The relevant portion of profit was Euro 13.1 million compared to Euro 12.9 million in the previous year (+1.1%), equal to 19% and 18.2% of revenues respectively.

The portion of cash flow generated from profit and depreciation/amortisation amounted to Euro 17.4 million in 2016 compared to Euro 17.1 million in 2015 (-1.6%) and represents 25.2% of revenues (24.1% in 2015).

The reclassified statement of financial position of Vetri Speciali SpA at 31 December 2016 and 2015, for the share pertaining to Zignago Vetro SpA (50%), was as follows:

		31.12.2016		31.12.2015	Change
	Euro thou.	%	Euro thou.	%	Euro thou.
Trade receivables	11,616		12,567		(951)
Other receivables	4,332		1,865		2,467
Inventories	13,114		10,877		2,237
Current non-financial payables	(14,733)		(13,738)		(995)
Payables on fixed assets	(5,713)		(652)		(5,061)
A) Working capital	8,616	9.5%	10,919	14.8%	(2,303)
	44,945		25,204		19,741
Net tangible and intangible assets
Goodwill	40,086		40,086		---
Other eq. investments & non-current assets	423		399		2 4
Non-current provisions
and non-financial payables	(3,015)		(3,034)		1 9
B) Net fixed capital	82,439	90.5%	62,655	85.2%	19,784
A+B= Net capital employed	91,055	100.0%	73,574	100.0%	17,481
Financed by:
Current loans and borrowings	10,896		6,374		4,522
Cash and cash equivalents	(8,093)		(3,479)		(4,614)
Current net debt	2,803	3.1%	2,895	3.9%	(92)
Non-current loans and borrowings	23,845	26.2%	10,178	13.8%	13,667
C) Net financial debt	26,648	29.3%	13,073	17.8%	13,575
Opening equity	60,501		55,962
Dividends paid in the year	(9,056)		(8,402)
Other equity changes	(100)		1 8
Profit for the year	13,062		12,923
D) Closing equity	64,407	70.7%	60,501	82.2%	3,906
C+D = Total financial debt and equity	91,055	100.0%	73,574	100.0%	17,481

The reduction in the portion of working capital compared to 31 December 2015 (- Euro 2.3 million: -21%) is principally due to the increase in payables to suppliers of fixed assets.

The portion of net fixed capital assets is higher than the end of 2015 by Euro 19.8 million due to higher net investments in tangible and intangible fixed assets than depreciation and amortisation (net capital expenditure Euro 24 million, amortisation and depreciation Euro 4.3 million).

The portion of equity at 31 December 2016, including the profit for the year and after the distribution of dividends, increased Euro 3.9 million (+6.5%), amounting to Euro 64.4 million (Euro 60.5 million at 31 December 2015).

The portion of net financial debt increased from Euro 13.1 million at 31 December 2015 to Euro 26.6 million at 31 December 2016 (+Euro 13.6 million; + 103.8%), taking into account of the liquidity needs to meet the scheduled investment programme.

At 31 December 2016, the workforce numbered 753, as follows: 8 executives, 146 white-collars office, commercial and technical staff and 584 blue-collars. At 31 December 2015, employees numbered 617, of which: 7 executives, 135 white-collars and 475 blue-collars. The above data refers to 100% of the workforce.

Current year operating performance.

Results for the year are expected to be in line with 2016, again supported by strong demand levels.

For completeness of information, the reclassified income statement and statement of financial position of Vetri Speciali SpA (100% of the data) are shown below.

The reclassified income statement of Vetri Speciali SpA for the year and the previous year is shown below:

		2016		2015	Change
	Euro thou.		% Euro thou.	%	%
Revenues	137,728	100.0%	141,652	100.0%	(2.8%)
Changes in finished and semi-finished products and work in progress	4,370	3.2%	(898)	(0.6%)	n.a.
Value of production	142,098	103.2%	140,754	99.4%	1.0%
Cost of goods and services	(66,097)	(48.0%)	(67,565)	(47.7%)	(2.2%)
Value added	76,001	55.2%	73,189	51.7%	3.8%
Personnel expense	(31,634)	(23.0%)	(28,070)	(19.8%)	12.7%
EBITDA	44,367	32.2%	45,119	31.9%	(1.7%)
Amortisation & Depreciation	(8,612)	(6.3%)	(8,357)	(5.9%)	3.1%
Accruals to provisions	(204)	(0.1%)	(380)	(0.3%)	(46.3%)
EBIT	35,551	25.8%	36,382	25.7%	(2.3%)
Net recurring non-operating income (charges)	1,830	1.3%	1,522	1.1%	20.2%
O perating Profit	37,381	27.1%	37,904	26.8%	(1.4%)
Net financial expense	(823)	(0.6%)	(1,033)	(0.7%)	(20.3%)
Net exchange gains/(losses)	3	---	5 2	---	n.a.
Profit before taxes	36,561	26.5%	36,923	26.1%	(1.0%)
Income taxes	(10,438)	(7.6%)	(11,076)	(7.8%)	(5.8%)
(Tax-rate 2016: 28.6%) (tax-rate 2015: 30%)
Profit for the year	26,123	19.0%	25,847	18.2%	1.1%

The reclassified statement of financial position of Vetri Speciali SpA at 31 December 2016 compared to 31 December 2015 is summarised below:

		31.12.2016		31.12.2015	Change
	Euro thou.	%	Euro thou.	%	Euro thou.
					(1,902)
Trade receivables	23,231		25,133
Other receivables	8,663		3,730		4,933
Inventories	26,227		21,754		4,473
Current non-financial payables	(29,466)		(27,475)		(1,991)
Payables on fixed assets	(11,425)		(1,304)		(10,121)
A) Working capital	17,230	9.5%	21,838	14.8%	(4,608)
Net tangible and intangible assets	89,889		50,407		39,482
Goodwill	80,171		80,171		---
Other equity investments and non-current assets	845		798		4 7
Non-current provisions	(6,025)		---		(6,025)
and non-financial payables	---		(6,067)		6,067
B) Net fixed capital	164,880	90.5%	125,309	85.2%	39,571
A+B= Net capital employed	182,110	100.0%	147,147	100.0%	34,963
Financed by:
Current loans and borrowings	21,792		12,748		9,044
Cash and cash equivalents	(16,185)		(6,957)		(9,228)
Current net debt	5,607	3.1%	5,791	3.9%	(184)
Non-current loans and borrowings	47,690	26.2%	20,355	13.8%	27,335
C) Net financial debt	53,297	29.3%	26,146	17.8%	27,151
Opening equity	121,001		111,924
Dividends paid in the year	(18,112)		(16,805)
Other equity changes	(199)		3 5
Profit for the year	26,123		25,847
D) Closing equity	128,813	70.7%	121,001	82.2%	7,812
C+D = Total financial debt and equity	182,110	100.0%	147,147	100.0%	34,963

Vetreco Srl (*)

Registered office: Supino (FR) – Via Morolense km. 5,500 Business sector: treatment and sale of recycled glass

Chairperson: Germana Signa Vice Chairman: Roberto Celot Directors: Rocco Furia Dario Lorenzon John Gerard Sadlier Maria Gabriella Spinelli Statutory Auditors: Alberto Faggion - chairman Riccardo Bolla Augusto Valchera

(*) The amounts reported in the comments represent 100% of the Company data.

Key events in 2016

In the second half of 2016, the company significantly improved production performances and plant and organisational fine tuning, achieving very strong results. The company remains highly focused on continual technical and organisational improvements in order to drive results further. The availability and quality of raw scrap acquired was another key element of success in terms of control and operations.

The reclassified income statement of Vetreco Srl in 2016 compared to the previous year is shown below:

		2016		2015	Change
	Euro thou.		% Euro thou.	%	%
Revenues	13,643	100.0%	11,175	100.0%	22.1%
Changes in finished and semi-finished products and work in progress	(390)	(2.9%)	346	3.1%	(212.7%)
Value of production	13,253	97.1%	11,521	103.1%	15.0%
Cost of goods and services	(10,491)	(76.9%)	(10,257)	(91.8%)	2.3%
Value added	2,762	20.2%	1,264	11.3%	118.5%
Personnel expense	(1,363)	(10.0%)	(1,433)	(12.8%)	(4.9%)
EBITDA	1,399	10.3%	(169)	(1.5%)	n.a.
Amortisation & Depreciation	(1,033)	(7.6%)	(1,011)	(9.0%)	2.2%
Accruals to provisions	(5)	---	---	---	n.a.
EBIT	361	2.6%	(1,180)	(10.6%)	n.a.
Net recurring non-operating income (charges)	---	---	---	---	n.a.
O perating profit/(loss)	361	2.6%	(1,180)	(10.6%)	n.a.
Net financial expense	(498)	(3.7%)	(512)	(4.6%)	(2.7%)
Loss before taxes	(137)	(1.0%)	(1,692)	(15.1%)	(91.9%)
Income taxes (Tax-rate 2016: 98.5%) (tax-rate 2015: -26.9 %)	(135)	(1.0%)	455	4.1%	(129.7%)
Loss for the year	(272)	(2.0%)	(1,237)	(11.1%)	(78.0%)

Revenues derive almost exclusively from the processing of raw glass for furnaces and glass treatment services on behalf of third parties.

The principal cost items are raw materials and external services, labour costs and amortisation and depreciation.

The company reports a loss for the year of Euro 0.3 million (loss of Euro 1.2 million in 2015), which was particularly impacted by non-optimised production levels in the first half of the year, against a significant recovery and good results in the second half of the year.

The reclassified statement of financial position of Vetreco Srl at December 31, 2016 and 2015 was as follows:

		31.12.2016		31.12.2015	Change
	Euro thou.	%	Euro thou.	%	Euro thou.
Trade receivables	3,005		2,416		589
Other receivables	3,241		3,754		(513)
Inventories	1,050		1,266		(216)
Current non-financial payables	(4,128)		(5,787)		1,659
Payables on fixed assets	(110)		(11)		(99)
A) Working capital	3,058	16.7%	1,638	9.3%	1,420
Net tangible and intangible assets	15,266		16,019		(753)
Other eq. investments & non-cur. assets	20		20		0
Non-current provisions and non-financial
payables	(53)		(47)		(6)
B) Net fixed capital	15,233	83.3%	15,992	90.7%	(759)
A+B= Net capital employed	18,291	100.0%	17,630	100.0%	661
Financed by:
Current loans and borrowings	3,362		17,133		(13,771)
Cash and cash equivalents	(169)		---		(169)
Current net debt	3,193		17,133		(13,940)
Non-current loans and borrowings	14,443		---		14,443
C) Net financial debt	17,636	96.4%	17,133	97.2%	503
Opening equity	497		634
Capital injection			1,100
Other equity changes	430		---
Profit/(loss) for the year	(272)		(1,237)
D) Closing equity	655	3.6%	497	2.8%	158
C+D = Total financial debt and equity	18,291	100.0%	17,630	100.0%	661

Working capital at 31 December 2016 increased on 31 December 2015 by Euro 1.4 million, principally due to the increase in current non-financial payables.

57

Net fixed capital at 31 December 2016 of Euro 15.2 million decreased on 2015 due to amortisation and depreciation.

Equity amounted to Euro 655 thousand, increasing Euro 158 thousand on 2015, due on the one hand to the loss in the year and on the other the increase in capital reserves approved by the Shareholders' Meeting in 2016.

Net financial debt at 31 December 2016 amounted to Euro 17.6 million, increasing Euro 503 thousand on 31 December 2015.

At 31 December 2016, the Company workforce numbered 26, plus 12 contract workers.

Current year operating performance.

It is expected that the company will continue to report good results, in line with those reported in the second half of 2016, although this will depend on procurement costs for raw scrap and its quality and availability.

Consolidated Financial Statements

Consolidated Statement of Financial Position

		Of which		Of which
		related		related
(Euro thousands)	31.12.2016	parties	31.12.2015	parties Note
ASSETS
Non-current assets
Property, plant and equipment	152,553		133,865	(1)
Goodwill	698		722	(2)
Intangible assets	171		102	(3)
Equity-accounted Joint Ventures	64,210		60,291	(4)
Equity investments	387		386	(5)
Other non-current assets	2,536		4,247	(6)
Deferred tax assets	2,883		2,931	(7)
Total non-current assets	223,438		202,544
Current assets
Inventories	69,600		66,487	(8)
Trade receivables	54,905	951	53,476	1,055 (9)
Other current assets	11,402		9,220	(10)
Tax Assets	2,587	1,235	2,659	1,235 (11)
Cash and cash equivalents	59,361		100,063	(12)
Total current assets	197,855		231,905
TO TAL ASSETS	421,293		434,449
EQUITY & LIABILITIES
EQ UITY
Share capital	8,800		8,800
Reserves	35,521		35,521
Treasury shares	(5,027)		(5,027)
Retained earnings and profit for the year	118,851		108,006
Other equity items	(2,626)		(1,671)
TO TAL EQ . ATT. TO O WNERS O F THE PARENT	155,519		145,629
EQ UITY ATT. TO NO N-CO N. INT.	---		---
TO TAL EQ UITY	155,519		145,629	(13)
LIABILITIES
Non-current liabilities
Provisions for risks and charges	3,541		3,867	(14)
Post-employment benefits	5,164		4,838	(15)
Non-current loans and borrowings	87,579		118,335	(16)
Other non-current liabilities	3,528		4,063	(17)
Deferred tax liabilities	2,316		2,369	(18)
Total non-current liabilities	102,128		133,472
Current liabilities
Bank loans and borrowings
- current portion	96,271		92,475	(19)
Trade and other payables	50,033	728	44,412	795 (20)
Other current liabilities Current income taxes	16,606 736	533	16,583 1,878	(21) 1,878 (22)
Total current liabilities	163,646		155,348
TO TAL LIABILITIES TO TAL EQ UITY AND LIABILITIES	265,774 421,293		288,820 434,449

Consolidated Financial Statements

Consolidated Income Statement

		Of which		Of which
		related		related
(Euro thousands)	2016	parties	2015	parties	Note
Revenues	252,085	6,395	246,366	7,291	(23)
Raw material, ancillaries,
consumables and goods	(66,901)	(427)	(58,720)	(427)	(24)
Service costs	(69,281)	(7,847)	(76,461)	(7,876)	(25)
Personnel expense	(57,897)		(57,115)		(26)
Amortisation & Depreciation	(28,616)		(27,580)		(27)
Other operating costs	(2,846)		(4,435)		(28)
Other operating income	2,918		4,916		(29)
Effect of measurement of Joint Ventures using
equity method	12,945		12,565		(30)
O perating Profit	42,407		39,536
Financial income	209		798		(31)
Financial expense	(2,949)		(4,169)		(32)
Net exchange gains/(losses)	(173)		6 8		(33)
Profit before taxes	39,494		36,233
Income taxes	(8,303)		(7,187)		(34)
Profit for the year	31,191		29,046
Non-controlling interests profit (loss)	---		---
O wners of the parent net result	31,191		29,046
Attributable to:
Owners of the parent	31,191		29,046
Non-controlling interests	---		---
	31,191		29,046
Earnings per share:
Basic earnings (and diluted) per share	0.360		0.335

Consolidated Financial Statements

Consolidated Statement of Comprehensive Income

(Euro thousands)		2016	2015
Profit for the year		31,191	29,046
Items that will subsequently be reclassified to profit or loss
Translation difference for foreign operations		(531)	5
Tax effect		---	---
Total items that will subsequently be reclassified to profit or loss	A)	(531)	5
Items that will not subsequently be reclassified to profit or loss
Actuarial gains/(losses) on defined benefit plans		(558)	176
Tax effect		134	(48)
Total items that will not subsequently be reclassified to profit or loss for the year	B)
		(424)	128
Other comprehensive income (expense) for the year, net of taxes	A+B)	(955)	133
Total comprehensive income for the year		30,236	29,179
Attributable to:
Owners of the parent		30,236	29,179
Non-controlling interests		---	---
		30,236	29,179

Consolidated Statement of Cash Flows

(Euro thousands)		2016	2015
CASH FLO W FRO M O PERATING ACTIVITIES:
Profit before taxes		39,494	36,233
Adjustments to reconcile net profit with
cash flow generated from operating activities:
Amortisation & Depreciation		28,616	27,580
Gains/(losses) on sale of property, plant & equipment		(333)	212
Accrual to allowance for impairment		4 0	7 8
Net changes to post-employment benefits		1,164	(112)
Net changes in other provisions		(1,588)	691
Financial income and exchange gains		(209)	(866)
Financial expenses and exchange losses		3,122	4,169
Income taxes paid in the year		(9,378)	(5,077)
Measurement of joint ventures at equity		(12,945)	(12,565)
Dividends distributed by equity-accounted joint ventures		9,056	8,402
Changes in operating assets and liabilities:
Decrease/(increase) in trade receivables		(1,469)	(5,457)
Decrease/(increase) in other current assets		(2,182)	(2,514)
Decrease/(increase) in inventories		(3,113)	(8,453)
Increase/(decrease) in trade & other payables		(310)	3,699
Increase/(decrease) in other current liabilities		5 4	1,374
Change in other non-current assets and liabilities		1,176	466
Total adjustments and changes		11,701	11,627
Net Cash Flows from operating activities	(A)	51,195	47,860
CASH FLO W FRO M INVESTING ACTIVITIES:
Investments in intangible assets		(192)	(86)
Investments in property, plant and equipment		(51,794)	(46,676)
Increase/(decrease) in payables for purchases of non-current assets Proceeds from sale of property, plant and equipment		5,929 4,499	(12,944) 4,351
Net cash flow used in
investing activities	(B)	(41,558)	(55,355)
CASH FLO WS FRO M FINANCING ACTIVITIES:
Interest paid in the year		(3,153)	(4,175)
Interest received in the year		209	866
Net change in current loans and borrowings		(7,255)	1,428
Net change in non-current loans and borrowings		---	49,616
Repayments of non-current loans and borrowings		(19,705)	(12,244)
Dividends distributed		(20,346)	(17,316)
Net cash flow used in financing activities	(C)	(50,250)	18,175
Change in assets and liabilities items due to translation effect	(D)	(89)	(396)
Net change in cash and cash equivalents	(A+B+C+D)	(40,702)	10,284
Cash & cash equivalents at beginning of year		100,063	89,779

Consolidated Financial Statements

Statement of changes in Consolidated Equity

(Euro thousands)

	Share capital	Legal reserve	reserve Revaluation	Other reserves	Capital paid-in	Treasury shares	Translation reserve	plans on defined benefit Actuarial gains/(losses)	Retained earnings	Profit for the year	Equity Total Owners of parent	interest Equity Total Non-controlling
B a la n c e a t 3 1 De c e mb e r 2 0 14	8 , 8 0 0	1, 7 6 0	2 7 , 3 3 4	6 , 2 7 0	15 7	(5 , 0 2 7 )	(1, 10 1)	(7 0 3 )	7 2 , 4 3 8	2 3 , 8 3 8	13 3 , 7 6 6	---
Consolidate d profit	---	---	---	---	---	---	---	---	---	29,046	29,046	---
Othe r c omp. inc ome , ne t of tax	---	---	---	---	---	---	5	128	---	---	133	---
Tota l c ompre he nsive profit (loss)	---	---	---	---	---	---	5	128	---	29,046	29,179	---
Othe r a lloc a tions of the re sult	---	---	---	---	---	---	---	---	23,838	(23,838)	---	---
Distribution of divide nds	---	---	---	---	---	---	---	---	(17,316)	---	(17,316)	---
B a la n c e a t 3 1 De c e mb e r 2 0 15	8 , 8 0 0	1, 7 6 0	2 7 , 3 3 4	6 , 2 7 0	15 7	(5 , 0 2 7 )	(1, 0 9 6 )	(5 7 5 )	7 8 , 9 6 0	2 9 , 0 4 6	14 5 , 6 2 9	---
Consolidate d profit	---	---	---	---	---	---	---	---	---	31,191	31,191	---
Othe r c omp. inc ome , ne t of tax	---	---	---	---	---	---	(531)	(424)	---	---	(955)	---
Tota l c ompre he nsive profit (loss)	---	---	---	---	---	---	(531)	(424)	---	31,191	30,236	---
Othe r a lloc a tions of the re sult	---	---	---	---	---	---	---	---	29,046	(29,046)	---	---
Distribution of divide nds	---	---	---	---	---	---	---	---	(20,346)	---	(20,346)	---
B a la n c e a t 3 1 De c e mb e r 2 0 16	8 , 8 0 0	1, 7 6 0	2 7 , 3 3 4	6 , 2 7 0	15 7	(5 , 0 2 7 )	(1, 6 2 7 )	(9 9 9 )	8 7 , 6 6 0	3 1, 19 1	15 5 , 5 19	---

GENERAL INFORMATION

Zignago Vetro SpA is an Italian joint stock company limited by shares domiciled at Fossalta di Portogruaro, via Ita Marzotto 8. Together with the subsidiaries, the Zignago Vetro Group operates in the production and marketing of high quality hollow glass containers prevalently for the Food and Beverage, Cosmetics and Perfumery and "Specialty Glass" sectors (highly customised glass containers in small batches, typically used for wine, liquors and oils).

The Group operates in the market with a business-to-business model, supplying containers to its clients, which are then used in their respective industrial activities. Specifically, in the Italian market, the Group is one of the leading producers and distributors of glass containers for the food and beverage sector, while at international level it has a strong market share in the cosmetics and perfumery and specialty glass sectors.

The publication of the consolidated financial statements of Zignago Vetro SpA was approved by the Board of Directors on 15 March 2017.

ACCOUNTING POLICIES AND MEASUREMENT CRITERIA

Accounting policies

The consolidated Financial Statements as at and for the year ended 31 December 2016 of Zignago Vetro SpA were prepared in accordance with International Financial Reporting Standards (IFRS) endorsed by the European Union in force at the date of the preparation of the this document.

They consist of the Statement of Financial Position, the Income Statement, the Statement of Comprehensive Income, the Statement of Cash Flows, the Statement of changes in Equity and these Notes.

The Consolidated Financial Statements include the separate financial statements of the Parent Zignago Vetro S.p.A. and of the Italian and foreign subsidiaries upon which Zignago Vetro has the right to exercise control, directly or indirectly.

The Notes include all the disclosures required by current regulations and accounting policies, appropriately presented with reference to the format of the financial statements used.

The Company, under the various options allowed by IAS 1, has chosen to present separately in the statement of financial position current and non-current assets and liabilities based on their realisation or settlement within the normal operating cycle, not after 12 months subsequent to the reporting date and in the income statement costs based on their nature. The statement of cash flows is prepared applying the indirect method.

The Consolidated Financial Statements, as the Directors' Report, presents, for greater clarity, the statement of financial position and the income statement and the relative notes thereto, in thousands of Euro, unless otherwise indicated.

The consolidation scope of the Zignago Vetro Group at 31 December 2016 was unchanged compared to 31 December 2015. The consolidation criteria at 31 December 2016 (and for comparative purposes at 31 December 2015) are as follows:

Consolidation at 31 December 2016 and 2015

• Zignago Vetro SpA (parent)
• under the line-by-line method:
• Verreries Brosse SAS;
• Huta Szkła "Czechy" SA (HSC SA);
• Zignago Glass USA Inc.
• with joint ventures measured using the equity method:
• Vetri Speciali SpA (50%)
• Vetreco Srl (30%)

Statement of conformity with IFRS

The consolidated financial statements information as at and for the year ended 31 December 2016 were prepared in accordance with IFRS issued by the International Accounting policies Board ("IASB), endorsed by the European Union and in force at the reporting date.

IFRS include all the revised international accounting policies (IAS), and all of the interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

New accounting policies and interpretations adopted by the Group as from 1 January 2016

The accounting policies adopted for the preparation of the financial statements at 31 December 2016 are the same as those utilised for the consolidated financial statements of the Zignago Vetro Group at 31 December 2015, except for the adoption of new standards and interpretations approved by the IASB and endorsed in Europe, application of which is obligatory for accounting periods beginning 1 January 2016 - as follows:

- Amendments to IAS 27 (2011) (Equity method in the separate financial statements)

This document introduces the possibility to utilise the equity method also in the

Separate Financial Statements for the investments in subsidiaries, joint ventures and associates. These amendments, which also resulted in amendments to IFRS 1 and IAS 28 "Investments in associates and joint ventures", contains references to IFRS 9 "Financial instruments" which currently may not be applied as this latter standard has not yet been endorsed by the European

Union. Therefore, any reference to IFRS 9 must be read as a reference to IAS 39 "Financial instruments: recognition and measurement".

- Amendments to IAS 1 (Disclosure Initiative)

These amendments clarify some aspects with reference to the presentation of financial statements underlying the significance of the disclosures in the financial statements, clarifying that there is no longer a specific order for the presentation of the Notes and permitting aggregation/disaggregation of financial statement accounts for clearer disclosure so that the accounts considered as a minimum disclosure in IAS 1 may be aggregated if considered not significant. In these evaluations, professional judgement must be utilised.

• Improvements to IFRS (2012-2014 cycle)

The amendments are within the ordinary improvement cycle to remove any inconsistencies and provide clarifications on terminology. Specifically the amendments concern:

• IAS 19 "Employee Benefits": the IASB clarified that the discounting rate of an obligation for defined benefit plans should be established according to "high-quality corporate bonds or governments bonds" identified in the same currency used to pay the benefits;

• IFRS 7 – "Financial instruments: additional disclosures": the IASB clarified that an entity which has transferred financial assets and has entirely derecognised them from their statement of financial position is required to provide supplementary information with regards to its "continuing involvement", where applicable. In addition, the disclosures in accordance with IFRS 7 concerning the "offsetting" of financial assets and liabilities is obligatory only in relation to the annual financial statements and will be included, in the interim financial statements, only if considered necessary;

• IAS 34: IASB clarified that the additional disclosures required by this standard may be included in the Notes for the interim financial statements or may be included in other documents (for example the report on risks), through reference inserted in the interim financial statements, provided that that the readers of the interim financial statements have access there to under the same conditions and terms as to interim financial statements.

• IFRS 5 "Non-current assets held for sale and discontinued operations"

-Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure on investments in other entities and IAS 28 Investments in associates and joint ventures: this introduces the prohibition for investment companies to fully consolidate subsidiaries, except with specific and limited exceptions, and requires the investments in these subsidiaries to be measured at fair value through P&L.

With the amendment to IAS 16 "Property, plant and equipment" and IAS 38 "Intangible assets", the IASB clarified that the depreciation process based on revenues may not be applied with reference to property, plant and equipment, in that this method is based on factors, for example volumes and sales prices, which do not represent the effective consumption of the economic benefits of the underlying asset.

The amendments to IFRS 11 "Accounting for Acquisitions of Interests in Joint Operations" clarify the accounting treatment for the acquisition of an interest in a joint operation which represents a business.

The amendments to IAS 16 "Property, plant and equipment" and IAS 41 "Agriculture", relate to the accounting treatment of bearer plants.

The adoption of the above-mentioned standards, amendments and interpretations did not have any significant impact on the Group condensed interim consolidated financial statements.

Below we report the IFRS, interpretations and amendments to existing accounting policies and interpretations, or specific provisions within the standards and interpretations approved by the IASB, which have not yet been endors for adoption in Europe at the approval date of these consolidated financial statements.

Document title	Date of issue by the IASB	Effective entry date of the IASB document
Standards
IFRS 15 - Revenues from contracts with customers	May 2014	1 January 2018
IFRS 9 – Financial instruments	July 2014	1 January 2018
IFRS 14 Regulatory Deferral Accounts	January 2014	(Note 1)
IFRS 16 Leases	January 2016	1 January 2019
Interpretations
IFRIC Interpretation 22 - Foreign Currency
Transactions and Advance Consideration	December 2016	1 January 2018
Amendments
		Deferred until the
Amendments to IFRS 10 and IAS 28: Sale or		completion of the IASB
Contribution of Assets between an Investor and its		project on the equity
Associate or Joint Venture	September 2014	method
Amendments to IAS 12: Recognition of Deferred Tax
Assets for Unrealised Losses	January 2016	1 January 2017
Amendments to IAS 7: Disclosure Initiative	January 2016	1 January 2017
Clarifications to IFRS 15 Revenue from Contracts
with Customers	April 2016	1 January 2018
Amendments to IFRS 2: Classification and
Measurement of Share-based Payment Transactions	June 2016	1 January 2018
Amendments to IFRS 4: Applying IFRS 9 Financial
Instruments with IFRS 4 Insurance Contracts	September 2016	1 January 2018
Annual Improvements to IFRS Standards (2014-2016		1 January 2017
Cycle)	December 2016	1 January 2018
Transfers of Investment Property (Amendments to
IAS 40)	December 2016	1 January 2018

(Note 1) IFRS 14 is applicable from 1 January 2016, but the European Commission has decided to suspend the endorsement process while awaiting the new IFRS on "rate-regulated activities".

These concern amendments to standards and/or interpretations which do not have any impact on the consolidated financial statements at 31 December 2016.

The Parent is analysing the content and will adopt the standards and improvements upon entry into force, even if a material impact on the consolidated financial statements is not expected.

Consolidation scope and basis of consolidation

The main consolidation criteria adopted were as follows:

• the elimination of the carrying amount of equity investments against recognition of the relevant assets and liabilities of the subsidiaries using the line-by-line method;
• the recognition of non-controlling interests in equity and profit for the period attributable to non/controlling interests, if any;
• the elimination of all intragroup transactions, consisting of payables and receivables, sales and purchases, and unrealised profits and losses;
• the financial statements of the investees utilised for the preparation of the consolidated financial statements are those approved by the respective Board of Directors which will be presented to their respective shareholders' meetings for approval. The reporting date of the consolidated companies is the same that of as the parent. The financial statements of the consolidated companies are adjusted, where necessary, in line with the accounting policies utilised by the Parent, which are in accordance with the IFRS endorsed by the European Union.

The assets and liabilities, expenses and income of the companies consolidated using the line-byline method are fully included in the consolidated financial statements; the carrying amount of the investments is eliminated against the corresponding portion of equity of the investees.

Group investments in joint ventures are measured using the equity method.

The Companies included in the Consolidated Financial Statements at 31 December 2016 are shown in the following table:

Consolidated Companies (Euro)	Registered office	Share capital (in local currency)	Percentage of investment of the Group
Zignago Vetro SpA (Parent)	Fossalta di Portogruaro (VE)	8,800,000	---
Companies consolidated using the line by-line method:
Verreries Brosse SAS	Vieux-Rouen-sur-Bresle (France)	4,000,000	100%
Huta Szkła "Czecky" SA (HSC SA)	Trabkj (Poland)	PNL 3,594,000 USD	100%
Zignago Glass USA Inc.	New York (U.S.A.)	200,000	100%
Equity-accounted investees:
Vetri Speciali SpA	Trento (TN)	10,062,400	50%
Vetreco Srl	Supino (FR)	400,000	30%

Translation of financial statements in currencies other than the Euro

The functional and presentation currency adopted by the Zignago Vetro Group is the Euro. The rules for the translation of financial statements of Companies which operate in a currency other than the Euro are the following:

• the assets and the liabilities are translated using the exchange rate at the reporting date;
• the costs and revenues, and income and expenses, are translated using the average exchange rate for the year;
• the "Translation reserve" includes both the exchange rate differences generated from the translation of foreign currency profit and loss items and at a rate different from the closing rate, and also those generated from the translation of opening equity at an exchange rate which is different from the closing exchange;
• goodwill related to the acquisition of a foreign entity is treated as assets and liabilities of the foreign entity and translated at the closing date.

The exchange rates applied are reported in the following table and correspond to those published by the Italian Exchange Office:

	2016 Exchange Rates			2015 Exchange Rates
Currency	at 31 December	year average	at 31 December	year average
USD	1.0541	1.1070	1.0887	1.1095
PLN	4.4103	4.3630	4.2639	4.1841

Accounting policies

The Consolidated Financial Statements of the Zignago Vetro Group at 31 December 2016 were prepared using the historical cost method, except for investments in financial assets and in derivative instruments, which are recorded at fair value.

The Consolidated Financial Statements were prepared on a going concern basis, which is considered to have been largely satisfied. For further information, reference should be made to the Directors' Report.

Property, plant and equipment

Property, plant & equipment are recognised at historical cost, including directly allocated accessory costs and those necessary for bringing the asset to the condition for which it was acquired. Land, both constructible and relating to civil and industrial buildings, is generally accounted for separately and is not depreciated in that it has an indefinite useful life. Maintenance and repair expenses, which do not increase the value and/or extend the residual useful life of the asset are expensed in the year in which they are incurred; where they increase the value and/or extend the residual life of the assets, they are capitalised.

Property, plant and equipment are recorded net of the relative accumulated depreciation and impairment losses. Depreciation of property, plant and equipment is calculated on a straight-line basis over the useful life of the asset, net of the estimated realisable value. Depreciation is generally recorded in profit or loss. The depreciation methods, the useful lives and the residual carrying amounts are assessed at the reporting date and adjusted where necessary.

The principal depreciation rates applied are as follows:

Category	Depreciation rate
Industrial buildings	1% -5.5%
General plant and machinery	4%-10%
Specific plant and machinery	8%-15%
Equipment (moulds)	25% - 100%
Kilns and related equipment	10% - 22%
Office furniture and fittings	12%
Electronic office machinery	20%
Commercial equipment and furnishings	15%

Internal communication systems	25%
Transport vehicles	25%

At each reporting date, the company tests property, plant and equipment for impairment. Where, based on this test, an impairment loss arises, the company estimates their recoverable amount.

The recoverable amount of an asset is the higher between the fair value less costs to sell and its value in use. Where the carrying amount of an asset exceeds the recoverable amount an impairment loss is recorded. Impairment losses are recorded in profit or loss. The impairment losses recorded in prior years are restated up to the carrying amount which would have been recorded (net of depreciation) where the impairment was never recorded.

Leased assets

The assets acquired through finance lease contracts, which transfer the majority of the risks and benefits related to the ownership of an asset to the Group, are capitalised among property, plant and equipment at the commencement of the lease at the fair value of the leased assets or, if lower, at the present value of the minimum lease payments. A payable is recorded under liabilities for a similar amount, which is progressively reduced based on the repayment of the capital portion included in the contractual instalments.

Lease instalments are allocated to principal and interest to obtain application of a constant interest rate on the balance of the debt (principal). Financial expenses are charged profit or loss.

The depreciation of these assets is calculated based on the economic useful life similar to the property, plant and equipment.

Leases in which the lessor substantially retains all of the typical risks and rewards of ownership are classified as operative.

The initial costs incurred on operating leasing contracts are considered increases in the cost of the asset leased and are recorded over the duration of the lease contract against the revenues generated from the lease.

Operative lease instalments are expensed over the duration of the lease contract.

Business combinations and goodwill

Business combinations are recognised using the purchase method. At the control acquisition date, the equity of the investees is established attributing to the relevant assets and liabilities their present value. Any positive difference between the acquisition cost and the fair value of the net assets acquired is recognized in "Goodwill"; if negative, it is recognised in profit and loss.

In the case of full control not being acquired the equity attributable to non-controlling interest is established based on the portion of the present value attributable to the assets and liabilities at the date of acquisition of control, excluding any attributable goodwill (so-called partial goodwill method). Alternatively, in the case of full control not being acquired, the entire amount of goodwill generated by the acquisition is recorded considering therefore also the percentage of investment of non-controlling interests (full goodwill method); they are expressed at their overall fair value including therefore the portion of goodwill.

The goodwill calculation method is chosen on a case by case basis for each business combination.

In the case of business combinations undertaken in a series of phases, the previous holding is remeasured at fair value at the acquisition date and any gain or loss is recorded in profit or loss. It is therefore considered in the determination of goodwill.

Any potential payment to be recognised is recorded by the acquirer at fair value at the acquisition date. The change in the fair value of the potential payment classified as an asset or liability, as a financial instrument which is subject to IAS 39 financial instruments: recognition and measurement, must be recognised in the income statement and in the other items of the comprehensive income statement. Where the potential payment is not within the scope of IAS 39, the amount is measured in accordance with the appropriate IFRS. If the potential payment is classified in equity, the amount is not remeasured and its subsequent settlement is recorded in equity.

With regard to equity investments acquired subsequent to the acquisition of control (noncontrolling interest acquisitions), any positive difference between the acquisition cost and the corresponding portion of equity acquired is recognised in equity; similarly, the effects from the sale of the non-controlling share without loss of control are recognised in equity.

Goodwill deriving from the acquisition of investees is initially recorded at cost, and represents the surplus of acquisition cost compared to the purchaser's share of net fair value with respect to identifiable amounts of the assets and liabilities acquired, current and potential. After initial recognition, goodwill is not amortised and is reduced for impairment loss. This is determined following an impairment test, as described below.

If the goodwill is allocated to a cash-generating unit and the entity sells part of the activities of this unit, the goodwill associated with the activity sold is included in the carrying amount of the activity when determining the gain or loss deriving from the sale. The goodwill associated to assets sold is calculated based on the relative carrying amount of the asset sold and the part maintained by the cash generating unit.

On the first-time adoption of IFRS, the Group has chosen not to apply IFRS 3 - Business Combinations in retrospective manner for the acquisition of companies prior to 1 January 2004 consequently, the possible goodwill generated on the acquisitions prior to the transition date to IFRS was maintained at the previous value determined in accordance with Italian GAAP, with the prior impairment testing and recording of any impairment loss.

Intangible assets

Intangible assets with definite lives are subject to impairment testing when events or changes occur indicating that the carrying amount can no longer be recovered.

Intangible assets acquired separately are recorded under assets at purchase price including incidental costs directly attributable to the asset.

After their initial recognition, intangible assets with finite useful lives are recognised net of the relative accumulated amortisation and any impairment loss, determined in the same manner as that for property, plant and equipment.

The useful life is reviewed on an annual basis and any changes, where necessary, are made in accordance with future estimates.

The amortisation rates of intangible fixed assets with definite useful life were as follows:

Category	Rate
Concessions, licences and trademarks	8.33% -20% - 33.33%

The Group does not hold intangible assets with indefinite useful lives.

The gains and losses deriving from the disposal of intangible assets are determined as the difference between the disposal amount and the carrying amount of the asset and are recorded in profit or loss at the moment of the disposal.

Research and development costs

Research costs are recognised profit or loss in the year in which they are incurred.

The development costs incurred in relation to a specific project are capitalised only when the following are demonstrated: i) the technical possibility to complete the intangible asset in order to make it available for use or sale, ii) the intention of the company to complete this asset for use or sale, iii) the manner in which it will generate probable future economic benefits, iv) the availability of technical and financial resources in order to complete the development and v) the capacity to evaluate in a reliable manner the cost attributable to the activity during its development and the existence of a market for the products and services deriving from the activities or their use for internal purposes.

After initial recognition, the development activities are measued at cost, reduced for amortisation or accumulated impairment losses . Amortisation begins when the development is completed and the asset is available for use. Development activities are amortised over the period of expected benefits. During the development, period the asset is subject to an annual impairment test.

Impairment of goodwill and intangible assets and property, plant and equipment

At each reporting date, the Group assesses for the existence of indicators of impairment of goodwill, intangible assets with definite useful lives, any development costs capitalised and property, plant and equipment (including under finance leases). Where such indicators arise, an impairment test is made.

Goodwill is subject to an impairment test, independently of the existence of any indicators of impairment.

In both cases, an annual verification of the carrying amount of the goodwill and of the intangible assets with indefinite useful life is carried out, or of the property, plant and equipment and intangible assets with finite useful life; in the presence of indicators of impairment, the Group makes an estimate of the recoverable amount. The recoverable amount is the higher between the fair value of an asset or a cash generating unit less costs to sell and its value in use and is determined for each asset, except when the asset does not generate cash flows which are sufficiently independent from those generated from other assets or groups of assets, in which case the Group estimates the recoverable amount of the unit generating the cash flows of the asset to which it belongs. In particular, as goodwill does not generate cash flows independent from other assets or group of assets, the impairment test relates to the unit or the group of units to which the goodwill was allocated.

In the determination of the value in use, the estimated future cash flows are discounted by the Group at a pre-tax rate that reflects the market assessment of the time value of money and the risks specific to the asset.

For the purposes of the estimate of the value in use of the future cash flows, the business plans approved by Management are used, which constitute the best estimate made by the Group on the expected economic conditions in the period of the plan. The projections of the plan normally cover a period of three years; the long-term growth rate utilised for the purposes of the estimate of the terminal value of the asset or of the unit is normally lower than the average long term growth rate of the sector, of the country or of the market and, if appropriate, may amount to zero or may even be negative. Future cash flows are estimated taking account of current conditions: the estimates therefore do not consider the benefits deriving from future restructurings for which the Company has not committed or future investments or optimisation of the assets or of the unit.

When the carrying amount of an asset or cash-generating unit is higher than its recoverable amount, this asset has incurred an impairment loss and is consequently written down to the recoverable amount.

Impairment losses incurred by operating assets are recorded profit or loss in the category of costs relating to those assets. At each reporting date, the Group evaluates, in addition, the existence of indicators of impairment previously recorded and, where these indicators exist, makes a new estimate of the recoverable amount. The carrying amount of an asset previously impaired, except for goodwill, may be restated only if there have been changes in the estimates used to determine the recoverable amount of the asset after the last recording of an impairment loss. In this case, the carrying amount of the asset is recorded at the recoverable amount, while the restated amount must not exceed the carrying amount which would have been determined, after amortisation or depreciation, if no impairment loss had been recognised in previous years. Each revaluation is recorded as income in the profit or loss; after the recording of the amount restated, the amortization or depreciation of the asset is adjusted in future years, in order to record the adjusted carrying amount, net of any residual value, over the useful life of the asset.

Investements in joint ventures

The Group holds investments in two joint ventures classified as jointly controlled operations.

A joint venture is a joint control agreement, in which the parties who jointly hold control maintain rights on the net assets of the agreement. Joint control concerns the sharing, on the basis of a contract, of control, which exists only where the decisions regarding significant activities requires unanimity by all parties sharing control.

Group investments in associates are measured using the equity method. Under this method, the investment is initially recognised at cost. The carrying amount of the investment is increased or decreased to recognise the investees share of the profit or loss after the date of acquisition. Goodwill pertaining to joint ventures was included in the carrying amount of the investment and is not subject to an individual impairment test.

The profit or loss reflects the Group's share of the joint venture's result for the year, net of income taxes, within the operating result. The company, in line with the management of its core business, considers the results deriving from its investments in joint ventures as operating items and nonfinancial items of the Group's business, related to a clearly defined investment strategy and as such classified within the Groups operating result.

Any change to the components of other comprehensive profit or loss items concerning this investment are presented within the Group comprehensive profit or loss. In addition, if a joint venture records a change directly to equity, the Group records its share (where applicable) in the statement of changes in equity. Unrealised gains and losses from transactions between the Group and a joint venture are eliminated in proportion to the portion of the investment in the joint ventures.

The financial statements of associates and joint ventures are prepared at the same reporting date as the Group financial statements. Where necessary, the financial statements are adjusted in line with those utilised by the Group.

Subsequent to the application of the equity method, the Group assesses whether it is necessary to recognise an impairment loss in joint ventures. The Group at each reporting date assesses whether these investments have incurred an impairment loss. In this case, the Group calculates the amount of the loss as the difference between the recoverable amount of the joint venture and the carrying amount in the financial statements, recognising this difference in profit or loss, to the account "equity-accounted investees".

On the loss of joint control of a joint venture, the Group recognises the residual investment at fair value. The difference between the carrying amount of the investment at the date joint control no longer exists and the fair value of the residual investment and the amount received is recognised in profit or loss.

As per IFRS 11, the Group consolidates its investment in joint ventures using the equity method. The joint ventures prepare their financial statements on the basis of the same financial year as the Parent and apply uniform accounting policies.

The portion of unrealised gains and losses relating to transactions between the Group and the joint ventures were eliminated from the Group consolidated financial statements. The consolidation at equity of the joint-venture is interrupted when the Group ceases to have joint control.

Once joint control is lost the Group assesses and records its residual investment at fair value. Any difference between the carrying amount of the former jointly controlled enterprise and the fair value of the residual investment and the gains deriving from the sale are recorded in the profit or loss. When the residual investment comprises an enterprise with significant influence it is recognised as an associate.

Equity investments in associates companies and other equity investments

An associates is a Company in which the Group exercises significant influence. Significant influence is the power to participate in the financial and operating policy decisions of an investee, however not exercising control or joint control. Significant influence is presumed when the holding is between 20% and 50%.

The investments in associates are measured using the equity method, as described previously for joint ventures.

The other investments, which concern long-term investments recognised as financial assets, are determined based on the purchase or subscription price or the value attributed to assets conferred, including possible accessory charges.

Investments are tested for impairment each year, or if necessary more frequently. Where there is an indication that these investments have incurred an impairment loss, the impairment is recognised in profit or loss as a impairment loss; the original carrying amount is written back in subsequent years if the reasons for the impairment loss no longer exist.

Inventories

Inventories are stated at the lower of purchase and/or production cost, determined by the weighted average cost method annually and the net realisable value or substitution cost. The net realisable value is determined based on the estimated selling price in normal market conditions, net of direct sales costs.

Obsolete and/or slow-moving inventories are written down in relation to their presumed utilisation or future realisable value. The write-downs made are restored in future years should the reason for the write-down no longer exist.

Financial assets

IAS 39 establishes the following types of financial assets:

• Financial assets measured at fair value with changes recognised through profit or loss;
• Held-to-maturity investments;
• Loans and receivables;
• Available-for-sale financial assets.

Initially all the financial assets are recorded at cost, that is the fair value of the amount given in exchange (increased, in the case of assets other than those valued at fair value, for the accessory costs). They are recorded to the financial statements based on the trading date, taking account of when the Company has the contractual obligations of the instrument.

The company determines the classification of its financial assets on initial recognition and, where appropriate and permitted, reviews this classification at the end of each year.

The financial assets currently held by the company refer to loans and receivables.

Loans and receivables

Loans and receivables are non-derivative financial instruments with fixed or determinable payments, which are not listed on an active market. This category also includes trade and other receivables.

After initial recognition, these instruments are measured in accordance with the amortised cost criteria, using the effective discount rate method net of all allowance for impairments.

The gains and losses are recognised in profit or loss when the loans and receivables are eliminated or if there is a loss in value, also through the amortisation process.

Impairment losses from impairments are recognised in profit or loss as financial expenses if concerning loans, while allocated to other operating expenses where concerning trade and other receivables.

Impairment of financial assets

The Company annually assesses whether a financial asset or group of financial assets has incurred an impairment.

A financial asset or group of financial assets is written-down only if there is an objective indication of an impairment as a result of one or more events occurring after the initial booking of the asset or the group of assets and which has had an impact, reliably estimated, on the future cash flows generated by the asset or the group of assets. In particular, the impairments on trade receivables represented by the accruals to the provision, reflect the evidence that the Company will not be able to collect the receivable for the original value and considering the general sector conditions.

Cash and cash equivalents

This includes the balances and those values which are available on demand at short notice, certain in nature and with no payment expenses and not subject to significant risks related to changes in value.

Cash and cash equivalents are measured at fair value which coincides with their nominal amount.

Non-current bank loans and borrowings

The non-current loans and borrowings are initially recognised at fair value, net of transaction costs. After initial recognition, the financial liabilities are measured at amortised cost using the original effective interest rate, which is the rate that renders equal, on the initial recognition, the present cash flows and the amount initially recognised.

Derivative financial instruments

The Group may hold financial derivatives in order to cover its exposure to interest rate risk regarding specific liabilities.

In line with the strategy chosen, the Group does not carry out operations and derivatives for speculative purposes. However, in the case where these operations may not be accounted for as hedging operations, they are recorded as speculative operations.

The derivatives are classified as hedging instruments when the relation between the derivative and the hedged item is formally documented and the effectiveness of the hedge, periodically verified, is high. When the hedged derivatives cover the risk of change of the fair value of the instruments hedged (fair value hedge; e.g. hedge in the variability of the fair value of asset/liabilities at fixed rate), these are recorded at fair value through profit or loss; therefore, the hedging instruments are adjusted to reflect the changes in fair value associated to the risk covered. When the derivatives hedge the risk of changes in the cash flows of the hedge instrument (cash flow hedge; e.g. coverage of changes in cash flow of asset/liabilities at variable interest rate due to changes in the interest rates), the changes in the fair value are initially recognised under equity and subsequently through the income statement in line with the economic effects produced from the operation hedged.

The changes in the fair value of the derivatives compared to their initial value, which do not satisfy the conditions for hedge accounting, are recorded through profit or loss.

Derecognition of financial assets and liabilities

Financial assets (or, where applicable, part of a financial asset or part of a group of similar financial assets) are derecognised from the financial statements when:

• the right to receive the cash flows from the asset terminate;
• the company retains the right to receive cash flows from the asset, but has a contractual obligation to pay them fully and without delay to a third party;
• the company has transferred its right to receive the cash flows from the asset and (i) has transferred substantially all of the risks and rewards of ownership of the financial asset or (ii) has not transferred or retained substantially all of the risks and rewards of the asset, but has transferred control.

Where the Company has transferred all the rights to receive the cash flows of an asset and has not substantially transferred or withheld all of the risks and rewards or has not lost control, the asset is recorded in the financial statements of the Company up to the amount of its residual holding in the asset.

A financial liability is derecognised from the financial statements when the underlying liability is settled or cancelled.

If an existing financial liability is replaced by another by the same lender but under substantially different conditions, or if the conditions of an existing financial liability are substantially changed, such a swap or change is treated as an elimination of the original liability and the opening of a new liability, with any differences in accounting values recorded in profit or loss.

Treasury shares

Treasury shares are recorded as a reduction of equity based on the relative acquisition cost. No profit or loss is recorded in profit or loss on the acquisition, sale or cancellation of treasury shares. Any difference between the carrying amount and the amount paid is recorded in other capital reserves.

Provisions for risks and charges

The provisions for risks and charges are recorded when a current legal or constructive obligation exists that derives from a past event and a payment of resources is probable to satisfy the obligation and the amount of this payment can be reliably estimated. Provisions are recorded at the amount representing the best estimate that the Company would pay to discharge the obligation or to transfer it to a third party at the reporting date. If the effect of discounting is significant, the provisions are calculated by discounting the expected future cash flows at a pre-tax discount rate which reflects the current market assessment of the time value of money. Where discounting is applied, the increase in the provision due to the passage of time is recognised as an financial expense.

Gas emissions

The Group receives free gas emission rights in Italy under the European Emission Trading Schemes. The rights are conferred annually and in exchange the Group must offset the emissions made. The Group has adopted a policy which provides for the recording of the assets/liabilities relating to the emission rights granted. Therefore, a provision is recorded only when the effective emissions exceed the emission rights granted and still available. The costs related to the emissions are recorded under other operating costs. When the emission rights are acquired from other parties, they are recorded at cost and treated as repayment rights and therefore recorded as emission liabilities.

Post-employment benefits

The benefits guaranteed to employees paid on the conclusion of employment (post-employment benefits) or other long-term benefits are recognised in the period the right matures.

The amounts due from Italian companies of the Group concerning benefits due on termination of employment are categorised by type:

• defined contribution plans, concerning amounts matured since 1 January 2007;

• defined benefit plans, concerning the post-employment benefit provision matured until December 31, 2006.

For the defined contribution plans, the legal or constructive obligation of an enterprise is limited to the amount of contributions to be paid: consequently, the actuarial risk and the investment risk is borne by the employee. For the defined benefit plans, the obligation of the company concerns the granting and assurance of the agreed employee plans: consequently, the actuarial risk and the investment risk is borne by the company.

The liability for defined benefit plans, net of any plan assets, is calculated on the basis of actuarial assumptions and is recorded using the accrual method consistent with the years of employment necessary to obtain such benefits. The liability is calculated by independent actuaries utilising the projected unit credit method, on the basis of demographic assumptions in relation to mortality rates and population rotation, and financial assumptions concerning the discount rate which reflects the value of money over time and the inflation rate.

The cost to be recognised in profit or loss is based on:

• current service cost, recognised to personnel costs;
• the cost of interest, recognised to borrowing costs;
• the expected return on plan assets, if existing, recognised to financial items.

Actuarial gains and losses deriving from the revaluation of net liabilities for defined benefit plans are recognised immediately in the statement of comprehensive income.

Trade payables

The trade payables, which mature within the normal commercial terms, are not discounted and are recognised at amortised cost (identified by their nominal amount).

This account includes certain liabilities both in their amount and due date.

Other current liabilities

The other current liabilities are recorded at their nominal amount.

Revenues and costs

Revenues and costs are accounted for on an accrual basis. Revenues and incomes are recorded at fair value, net of returns, discounts, premiums and indirect taxes. Revenues from the sale of products are recognised at the moment of the transfer of ownership which generally coincides with the shipment of the goods and which transfers all the risks and benefits connected to the products sold.

Costs are recorded when relating to goods and services sold or consumed in the year or when there is no future utility.

Personnel costs include the amount of remuneration paid, pension fund provisions, provisions for vacation days matured and social security charges due according to existing contracts and applicable legislation.

Grants

Grants are recorded at fair value when there is a reasonable certainty that they will be received and that the conditions required to obtain them will be satisfied.

When the grants refer to specific components of operating costs (excluding depreciation) they are recorded directly as a reduction of these costs.

In particular:

• i) the tariff subsidies received as an industrial enterprise consuming large amounts of energy (so-called energy consuming enterprise) are recognised on the basis of consumption recorded and as a reduction of energy costs;
• ii) the energy efficiency securities (TEE, or also white certificates) against energy efficiency projects authorised by the GSE (electric service operator) are recorded on the basis of production volumes and the consequent energy absorbed and as a reduction of energy costs;
• iii) the tariff incentives related to the self-production of energy with photovoltaic plant are recognised based on the self-produced volumes and also recorded as a reduction of energy costs;
• iv) the tax credit for new investments in machinery under Legislative Decree No. 91 of 24 June 2014 was recognised to other non-current assets of the statement of financial position and will be used according to the means established by the applicable regulation. Recognition in profit or loss is carried out on a straight-line basis according to the depreciation of the fixed assets to which it refers, with consequent recognition to other current and non-current liabilities of the statement of financial position of the portion of the grant not yet matured.

Financial income and expenses

Financial income and expenses are recorded on an accruals basis on the interest matured on the net value of the relative financial assets and liabilities and utilising the effective interest rate.

Dividends

The dividends are recorded when the right of the shareholders to receive the payment arises.

Income taxes

Income taxes for the year are calculated based on the fiscal charge in accordance with current fiscal legislation. The provisions for current income taxes are recorded in the statement of financial position net of payments on account and withholding taxes. Deferred tax assets and liabilities are calculated on temporary differences between the amounts recorded in the financial statements and the corresponding amounts recognised for fiscal purposes, except goodwill deriving from business combinations. Deferred tax assets are recorded only when their future recovery is probable - that it to say that is expected that sufficient tax profits will be attained by them to allow their recovery - while the deferred tax liabilities are not recorded where the relative payable is improbable. Deferred tax assets and liabilities are determined with the tax rates that are expected to be applied, in accordance with the regulations of the countries in which the Group operates, in the years in which the temporary differences will be realised or settled. In accordance with IAS 12, the Group records deferred tax liabilities on the suspended taxes in an equity reserve, only where these reserves are not considered by Management to be permanently acquired by the Group and when it is not probable that the realisation will result in a tax liability.

Deferred taxes concerning items recognised outside of the income statement are also recognised outside of the income statement and therefore to equity or to the comprehensive income statement, in line with the item to which they refer.

Foreign currency transactions

The functional and presentation currency adopted by the Zignago Vetro Group is the Euro. The transactions in currencies other than the functional currency of the individual companies are recognised, initially, at the exchange rate at the date of the transaction. The monetary assets and liabilities in foreign currencies other than the functional currency are translated to the operating currency at the exchange rate at the statement of financial position date. The exchange rate differences realised or based on the conversion of monetary items are booked to profit or loss.

The non-monetary accounts measured at historical cost in foreign currencies are translated using the exchange rate at the date of initial recognition of the transaction. The non-monetary accounts in foreign currencies recorded at fair value are translated using the exchange rate at the date the value was determined.

Earnings per share

The basic earnings per share is calculated by dividing the consolidated profit for the year attributable to the Company's shareholders by the weighted average number of ordinary shares outstanding during the year, net of treasury shares.

In order to calculate the diluted earnings per share, the average weighted number of shares outstanding is adjusted assuming the conversion of all shares with potential dilutive effect. The Group's profit for the year is also adjusted to account of the effects of the conversion of potential shares, net of taxes.

Use of estimates

The preparation of the financial statements and the relative notes in application of IFRS require that Management make estimates and assumptions on the values of the assets, liabilities, expenses and revenues in the financial statements and on the disclosures relating to the contingent assets and liabilities at the reporting date. The uncertainty concerning these assumptions and estimates could result in significant changes in the carrying amount of these assets and/or liabilities in the future. The estimates are used to determine the accruals to the allowance for impairment, provision for inventory write-down, depreciation and amortisation, impairment losses on assets, employee benefits, income taxes, other provisions and funds. The amounts of the individual categories and

The estimates and assumptions are reviewed periodically and the effects of any changes are recorded immediately in profit or loss in the period of the revision of the estimate, if the revision has effect only on that period, or also in subsequent periods if the revision has effect on the current year and on future years.

the method for their determination are reported in the notes to the financial statements.

IFRS 13 requires that the financial instruments measured at fair value are classified based on three fair value hierarchy levels which reflect the significance of the input utilised in the determination of fair value. Based on the standard, the three fair value levels are as follows:

• Level 1 of fair value: the measurement input of the instruments are listed prices for identical instruments in active markets with access at the measurement date;
• Level 2 of fair value: the measurement inputs of the instruments are different than the prices listed at the previous point, which are directly or indirectly observable on the market;
• Level 3 of fair value: the measurement inputs of the instruments are not based on observable market data.

As indicated by the regulation, the hierarchy of the approaches adopted for the determination of all financial instruments (shares, units, bonds and derivatives), attributes priority to official prices available on active market for the assets and liabilities to be measured and, in their absence, to the measurement of assets and liabilities based on significant quotations, where they refer to similar assets and liabilities. On a residual basis, measurement techniques may be utilised based on nonobservable inputs, and, therefore, more discretional.

Assets and liabilities measured at fair value on a recurring basis: breakdown by fair value level. The following table shows the assets and liabilities measured at fair value at 31 December 2016 by fair value hierarchy level.

	Carrying Amount		Fair Value Level
		1	2	3	Total
Financial assets not measured at Fair Value
Cash and cash equivalents (*)	59,361	---	---	59,361	59,361
Trade receivables (*)	54,905	---	---	54,905	54,905
Financial assets measured at Fair Value Hedges	---	---	---	---	---
Financial liabilities not measured at Fair Value
Medium/long term loans (*)	87,579	---	---	87,579	87,579
Bank loans & borrowings and current portion
of non-current loans & borrowings	96,271	---	1,602	94,669	96,271
Other non-current payables (*)	3,528	---	---	3,528	3,528
Trade and other payables (*)	50,033	---	---	50,033	50,033

(*) The amounts refer to financial assets and liabilities whose carrying amount reasonably approximates fair value, which consequently has not been stated.

NOTES TO THE MAIN STATEMENT OF FINANCIAL POSITION ITEMS

NON-CURRENT ASSETS	(Euro thousands)	31.12.2016 223,438	31.12.2015 202,544
		31.12.2016	31.12.2015
1 – Property, plant and equipment	(Euro thousands)	152,553	133,865

The table below shows the historical cost, accumulated depreciation and carrying amount of property, plant and equipment in the two years:

(Euro thousands)	Balance at 31.12.2016				Balance at 31.12.2015
	Historic	Accumulated	Net	Historic	Accumulated	Net
	Cost	Depreciation	Value	Cost	Depreciation	value
Land and buildings	54,602	(31,418)	23,184	51,781	(30,350)	21,431
Plant and machinery	263,775	(182,708)	81,067	260,958	(167,066)	93,892
Commercial and
industrial equipment	71,870	(62,484)	9,386	69,009	(57,951)	11,058
Other assets	7,628	(5,158)	2,470	5,858	(4,523)	1,335
Assets in progress	36,446	---	36,446	6,149	---	6,149
Total	434,321	(281,768)	152,553	393,755	(259,890)	133,865

The table below shows the movements in property, plant and equipment in 2016:

(Euro thousands)	Balance at 01.01.2016	Acquisitions & capital isations	Decreases	Depreciation	Exchange diff.	Balance at 31.12.2016
Land and buildings	21,431	3,437	(24)	(1,559)	(101)	23,184
Plant & machinery Industrial & commercial	93,892	4,880	(13)	(17,395)	(297)	81,067
equipment	11,058	12,588	(5,457)	(8,785)	(18)	9,386
Other assets Assets in progress and	1,335	529	1,370	(755)	(9)	2,470
advances	6,149	31,593	(1,275)	---	(21)	36,446
Total	133,865	53,027	(5,399)	(28,494)	(446)	152,553

(Euro thousands)	Balance at 01.01.2015	Acquisitions & capital isations	Decreases	Depreciation	Exchange diff.	Balance at 31.12.2015
Land and buildings	18,659	4,873	(605)	(1,505)	9	21,431
Plant & machinery	81,231	29,770	(9)	(17,145)	4 5	93,892
Industrial & commercial equipment	10,191	13,008	(3,945)	(8,207)	1 1	11,058
Other assets Assets in progress and	1,342	612	(4)	(617)	2	1,335
advances	7,735	1,775	(3,364)		3	6,149
Total	119,158	50,038	(7,927)	(27,474)	7 0	133,865

The table below shows the movements in property, plant and equipment in 2015:

Land and buildings

The following table reports the value of land and buildings owned for 2016:

(Euro thousands)	Balance at 01.01.2016	Increases	Decreases & reclass.	Depreciation	Exchange differences	Balance at 31.12.2016
Value of rental contract	---	---	---	---	---	---
Leasehold improvements	---	---	---	---	---	---
Total buildings leased	---	---	---	---	---	---
Total buildings owned	21,431	3,437	(24)	(1,559)	(101)	23,184
Total land and buildings	21,431	3,437	(24)	(1,559)	(101)	23,184

The balance at 31 December 2016 was Euro 23,184 thousand compared to Euro 21,431 thousand at 31 December 2015.

Depreciation in the year amounted to Euro 1,559 thousand and to Euro 1,505 thousand in 2015.

Plant and machinery

The balance at 31 December 2016 was Euro 81,067 thousand, compared to Euro 93,892 thousand at 31 December 2015.

The increases in 2016 of Euro 4,880 thousand mainly relate to the scheduled renewal of plant. Depreciation amounted to Euro 17,395 thousand in 2016, compared to Euro 17,145 thousand in 2015.

Industrial and commercial equipment

The balance at 31 December 2016 was Euro 9,386 thousand compared to Euro 11,058 thousand at 31 December 2015.

The increases in 2016, amounting to Euro 12,588 thousand, refers to the renewal of equipment, in particular moulds and pallets.

The decreases in 2016 amounted to Euro 5,457 thousand and relate principally to the sale of moulds and pallets no longer utilised.

Other assets

The balance at 31 December 2016 was Euro 2,470 thousand compared to Euro 1,335 thousand at 31 December 2015.

Property, plant and equipment in progress and advances

The balance at 31 December 2016 was Euro 36,446 thousand compared to Euro 6,149 thousand at 31 December 2015.

The amount mainly relates to the reconstruction of the furnace of the subsidiary Huta Szkła "Czechy" S.A. (HSC).

		31.12.2016	31.12.2015
2 - Goodwill	(Euro thousands)	698	722

The goodwill refers to the higher value paid on the acquisition of HSC SA of Euro 698 thousand in 2011.

The increase in the year relates to the adjustments for exchange differences concerning the goodwill relating to assets in currencies other than the Euro.

The value of goodwill was subject to an impairment test on the basis of expected cash flows attributable to the "HSC SA" Cash Generating Unit.

In particular, for the goodwill of HSC SA, the following assumptions were utilised in the impairment test:

• the goodwill was allocated to the Cash Generating Units represented by the investee company, as an intangible asset not independently producing future economic benefits;
• financial data is taken from the 2014-2018 business plans prepared by HSC SA and approved by the Board of Directors;
• in order to identify the revenue streams, Ebitda was considered net of investments and changes in net working capital.

In particular, the cash flow of 2018, utilised as a constant value to obtain the "terminal value", was obtained assuming that the value of the investments were equal to the value of depreciation;

The cash flows were discounted utilising the WACC (average weighed cost of capital), with reference to the Capital Asset Pricing Model, based on indicators and parameters observable on the market, at the present value of money and specific risks related to the business valued at the reference date of the estimate.

The impairment test did not indicate the necessity to record an impairment loss on goodwill.

In consideration of the results of the impairment test it was not considered necessary to provide information on the sensitivity analysis of the parameters utilised for the determination of the recoverable amount.

	31.12.2016	31.12.2015
3 - Intangible assets	(Euro thousands)171	102

The following tables show the movements in intangible assets in the years considered:

(Euro thousands)		Balance at 31.12.2016			Balance at 31.12.2015
	Historic		Accumulated	Net	Historic	Accumulated	Net
	Cost		Amortisation	Value	Cost	Amortisation	value
Con, licenses, trademarks & similar rights	998		(827)	171	1,171	(1,069)	102
(Euro thousands)		Balance at 01.01.2016	Acquisitions	Decreases	Amortisation	Balance at 31.12.2016
Concessions, licenses, trademarks & similar rights		102	191		---	(122) 171

The account principally refers to costs incurred for the purchase of long-term application software, used for operational management.

		31.12.2016	31.12.2015
4 - Investments in companies
valued at equity	(Euro thousands)	64,210	60,291

The Group holds two investments in jointly-controlled companies:

• Vetri Speciali SpA;

• Vetreco Srl.

Vetri Speciali SpA derives from a corporate restructuring operation undertaken in 2004 and is involved in the production and sale of specialty glass containers. The company's registered offices are at via Manci 5, Trento. Production is carried out at the Pergine Valsugana (TN), Ormelle (TV) and San Vito al Tagliamento (PN) facilities.

The JV is a strategic investment for the Group, undertaken as part of the production diversification pursued by the Parent.

The Zignago Group holds 50% of ordinary company shares; all shares guarantee equal rights. In 2016, the Company distributed dividends totalling Euro 18.1 million to shareholders.

Vetreco Srl is an Italian private limited company domiciled in Supino (FR), incorporated in July 2010 as a joint venture, involved in the processing of raw glass and the supply of cullet ready for re-use in production.

The investment percentage of Zignago Vetro SpA is 30%.

As previously stated, in accordance with IAS 31 Interests in joint ventures (before adoption of IFRS 11), the portion of assets, liabilities, revenues and costs of the Group in both companies were consolidated proportionally until 31 December 2013. Since the adoption of IFRS 11 they have been measured at equity.

The valuation of both joint ventures at equity and the movements in the year are summarised below:

(Euro thousands)	31.12.2016	31.12.2015
Value of Vetri Speciali SpA investment in Zignago Vetro	25,320	25,320
Vetri Speciali Eq. at 100%	128,813	121,001
Vetri Speciali Eq. at 50%	64,406	60,501
Difference between value of investment and share of Eq. of the
subsidiary	39,087	35,181
Valuation using the equity method of Vetri Speciali investment
Share of equity	64,406	60,501
Uniform accounting principles	(393)	(358)
Total valuation using the equity method	64,013	60,143
Increase/(decrease) of carrying amount of investment compared to valuation using the equity method	38,693	34,823
Movement in valuation using the equity method
Valuation using the equity method at beginning of year	60,143	55,591
Profit: pro quota	13,062	12,923
Other statement of comprehensive income items in year:
IAS 19 effect	(100)	1 7
Dividends	(9,056)	(8,402)
Uniform accounting principles	(34)	13
Valuation using the equity method at end of year	64,015	60,142
P&L effect of valuation using the equity method of the investment
	13,028	12,936

(Euro thousands)	31.12.2016	31.12.2015
Value of Vetreco Srl investment in Zignago Vetro	1,059	930
Vetreco Eq. at 100%	655	497
Vetreco Eq. at 30%	196	149
Difference between value of investment and share of Equity of the subsidiary	(863)	(781)
Valuation using the equity method of Vetreco Srl investment
Share of equity	196	149
Uniform accounting principles	---	---
Total valuation using the equity method	196	149
Increase/(decrease) of carrying amount of investment compared to valuation using the equity method	(863)	(781)
Movement in valuation using the equity method
Valuation using the equity method at beginning of year	149	191
Profit: pro quota	(82)	(371)
Other statement of comprehensive income items in year: IAS 19 effect		---
Increase of share capital portion	129	330
Uniform accounting principles	---	---
Valuation using the equity method at end of year	196	150
P&L effect of valuation using the equity method of the
investment	(82)	(371)

The key financial and performance indicators of the jointly-controlled companies recognised to the consolidated financial statements and measured at equity are also reported.

These figures relate also to the Parent reporting date and incorporate the totality of investments held. All investments operate on a going concern basis. The figures do not take account of the effects, although contained, from the harmonisation of the accounting policies adopted by the individual investees with the Parent.

The statement of financial position and income statement of Vetri Speciali SpA (100%) are summarised below:

(Euro thousands)	31.12.2016	31.12.2015
Goodwill	80,171	80,171
Other non-current assets	90,734	51,205
Non-current assets	170,905	131,376
Cash and cash equivalents	16,185	6,957
Other current assets	58,121	50,617
Current assets	74,306	57,574
TOTAL ASSETS	245,211	188,950
Capital and Reserves	128,813	121,001
Equity	128,813	121,001
Medium/long-term loans	47,690	20,355
Other non-current liabilities	6,025	6,067
Non-current liabilities	53,715	26,422
Bank loans & borrowings and current portion of medium/long
term loans	21,792	12,748
Other current liabilities	40,891	28,779
Current liabilities	62,683	41,527
TOTAL LIABILITIES	245,211	188,950

(Euro thousands)	2016	2015
Revenues	135,448	138,832
Costs of production	(89,455)	(92,571)
Amortisation & Depreciation	(8,612)	(8,357)
Operating Profit	37,381	37,904
Financial Income	8	4
Financial Charges	(831)	(1,037)
Exchange gains/(losses)	3	52
Profit before taxes	36,561	36,923
Income taxes	(10,438)	(11,076)
Profit for the year	26,123	25,847
Ot her posit ive (negat ive) component s of statement of comprehensive state. of income		3 4
Total comprehensive income	26,123	25,881

The statement of financial position and income statement of Vetreco Srl (100%) are summarised below:

(Euro thousands)	31.12.2016	31.12.2015
Other non-current assets	15,286	16,039
Non-current assets	15,286	16,039
Cash and cash equivalents	169	---
Other current assets	7,296	7,436
Current assets	7,465	7,436
TOTAL ASSETS	22,751	23,475
Capital and Reserves	655	497
Equity	655	497
Other non-current liabilities	14,496	47
Non-current liabilities	14,496	47
Bank loans & borrowings and current portion of
medium/long-term loans	3,362	17,134
Other current liabilities	4,238	5,797
Current liabilities	7,600	22,931
TOTAL LIABILITIES	22,751	23,475
(Euro thousands)	2016	2015
Revenues	13,643	11,175
Costs of production	(12,249)	(11,344)
Amortisation & Depreciation	(1,033)	(1,011)
Operating Profit/(loss)	361	(1,180)
Financial Charges	(498)	(512)
Profit/(loss) before taxes	(137)	(1,692)
Income taxes	(135)	455
Profit/(loss) for the year	(272)	(1,237)
Ot her posit ive (negat ive) component s of statement of comprehensive state. of income	---	---
Total comprehensive income/(expense)	(272)	(1,237)

Neither joint venture is quoted and a fair value deriving from a quoted market price is not available.

Relating to the goodwill which constitutes part of the carrying amount allocated to the Vetri Speciali joint venture, following the application of the equity method, this was not subject separately to an impairment test, but is included within any impairment test undertaken on the investment. In relation to this there was no indication of an impairment loss on the joint venture.

		31.12.2016	31.12.2015
5 - Equity Investments	(Euro thousands)	387	386

The table below shows the composition, unchanged in the year, of the investments in other companies at 31 December 2016:

(Euro thousands)	Balance at 31.12.2016	Balance at 31.12.2015
La Vecchia Scarl	349	349
Consorzio Nazionale Imballaggi (CONAI)	1 0	1 0
Energetico (A.I.C.E.)	1 0	1 0
Vega - Parco Tecnologico	9	9
Consorzio Recupero Vetro (CO.RE.VE.)	6	6
Other	3	2
Total	387	386

La Vecchia Scarl undertakes the preliminary treatment of primary water and management of the wastewater purification plant, for the industrial facilities at Fossalta di Portogruaro.

The following information concerning La Vecchia Scarl, associates, is reported below.

Company &	Parent		Total assets	Share		Equity		Profit for the year	Carrying
registered office (Euro thou.)	share	Total amt.	Pro quota amt.	capital	Total amt.	Pro quota amt.	Total amt.	Pro quota amt.	amount at 31.12.2016
Investments recorded under financial assets
Associates La Vecchia Scarl via Ita Marzotto, 8 Fossalta di Portogruaro (Ve)	25%	1,862	466	100	1,566	392	3 2	8	349

		31.12.2016	31.12.2015
6 - Other non-current assets	(Euro thousands)	2,536	4,247

The account principally includes the tax asset related to Article 18 of Legs. Decree 91/2014 and receivables for guarantee deposits provided to suppliers and for lease companies, the duration of which correlates to that of the contract, normally between one and five years.

In particular, the Parent recognised a tax asset of Euro 2,327 thousand, equal to 15% of investment expenditure, of a unitary amount above Euro 10 thousand, until June 30 2015 in excess of the average investment in core assets in the five preceding tax years, excluding from the calculation the period in which the investment was higher. The receivable may be used as an offset over three equal annual instalments from the second tax period subsequent to which the investment was made.

	31.12.2016	31.12.2015
7 - Deferred tax assets	(Euro thousands)2,883	2,931

The table below shows the composition of the deferred tax assets:

(Euro thousands)	Balance at 31.12.2016			Balance at 31.12.2015
	Amount	Tax	Amount	Tax
	o f	effect	o f	effect
	temporary		temporary
	differences		differences
Doubtful debt provision not deductible	2,571	617	2,571	617
Tax losses carried forward	1,946	649	1,871	624
Pension fund	2,217	623	2,069	600
Depreciation deductible in future years	866	164	579	110
Provision for industrial risks	804	224	783	246
Costs deductible in future years	668	136	850	201
Agents' supplementary indemnity	204	5 7	307	8 8
Inventory provision	446	8 5	549	104
Provision for contractual risks	285	6 8	306	8 4
Provision for emission trading	536	150	417	131
Intercompany profit on inventories	7	2	2 2	7
Others	859	108	570	119
Total		2,883		2,931

The companies of the Group recorded the deferred tax assets relating to temporary differences between the value of the assets and liabilities for statutory purposes and the corresponding tax value considering that the future assessable amounts will absorb all the temporary differences. The deferred tax assets principally refer to deductible temporary differences on risk provisions, the allowance provisions, the pension indemnity provision, costs deductible in future years, in addition to tax losses carried forward (in particular Verreries Brosse SAS for Euro 1,125 thousand).

In measuring the deferred tax assets, for the Parent, reference is made to the IRES and IRAP rates in force at 31 December 2015 (respectively 27.50% and 3.90%), applying however the IRES rate to be applied (24%) in the cases in which the deductible temporary differences are expected to be used from 1 January 2017.

(Euro thousands)
Balance at 31 December 2014			2,934
Utilisations		(406)
Increases		403	(3)
Balance at 31 December 2015			2,931
Utilisations		(505)
Increases		457	(48)
Balance at 31 December 2016			2,883
		31.12.2016	31.12.2015
CURRENT ASSETS	(Euro thousands)	197,855	231,905
		31.12.2016	31.12.2015
( 8 – Inventories	(Euro thousands) Euro	tha69,600	66,487
The table below shows the composition of inventories:
(Euro thousands)		Balance at	Balance at
		31.12.2016	31.12.2015
Raw material, ancillaries and consumables		11,088	11,049
Work-in-progress and semi-finished products		6,813	7,968
Finished products		53,438	50,701
Inventory provision		(1,739)	(3,231)
Total		69,600	66,487

Movements during the years of deferred tax assets are as follows:

The increase in inventories (+4.7%), principally relating to finished products, is also due to the business development plans.

The movement during the year in the provision for inventory is as follows:

(Euro thousands)
Balance at 31 December 2014		2,814
Utilisations	---
Provisions	417	417
Balance at 31 December 2015		3,231
Utilisations	(1,492)	(1,492)
Balance at 31 December 2016		1,739

	31.12.2016	31.12.2015
9 - Trade receivables	(Euro thousands)54,905	53,476

The table below illustrates the trade receivables and the relative allowance for impairmen:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Trade receivables - Italy	35,565	26,300
Trade receivables - foreign	17,124	20,615
Trade Receivables from holding companies	201	---
Bills	5,350	9,987
Doubtful debt provision	(3,335)	(3,426)
Total	54,905	53,476

Trade receivables increased on the previous year (+2.6%), principally due to the increase in revenues.

The table below shows the breakdown of trade receivables by geographical segment:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Italy	37,987	33,164
E.U.	13,795	17,870
Other countries	3,123	2,442
Total	54,905	53,476

The movement during the year in the allowance for impairment was as follows:

(Euro thousands)	Written-down	Written-down	Total
	individually	collectively
At 31 December 2014	1,958	1,498	3,456
Provisions	1 3	6 5	7 8
Utilisations	(108)	---	(108)
At 31 December 2015	1,863	1,563	3,426
Provisions	2 4	1 5	3 9
Utilisations	(118)	(12)	(130)
At 31 December 2016	1,769	1,566	3,335

At 31 December 2016 and 2015 the overdue trade receivables, but not individually impaired were as follows:

(Euro thousands)	Not overdue	< 30 days	30 - 60	60 - 90	other	Total
			days	days
2016	46,407	5,047	1,924	1,220	1,873	56,471
2015	43,372	9,743	1,516	304	104	55,039

The largest part of the receivables of Zignago Vetro SpA, representing 79.6% of the Group receivables, is covered by insurance policies.

The trade receivables are non-interest bearing and are payable within 60 days.

	31.12.2016	31.12.2015
10 - Other current assets	(Euro thousands)11,402	9,220

The table below shows the composition of "Other current assets":

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
VAT receivables	4,084	4,820
Advances to social security institutions and receivables
from employees and agents	6 1	5 6
Tax receivables as per Law 91/14	1,793	1,259
Other receivables	4,985	2,585
sub)	10,923	8,720
Accrued income for:
- interest on bank deposits	3	3 1
- services	---	---
Prepayments:
- insurance premiums	403	374
- rent expenses and leases	4 1	5 3
- services	3 2	4 2
Total	11,402	9,220

The tax assets relates to the current portion of the receivable matured in 2014 and 2015 and related to Article 18 of Legislative Decree 91/2014, utilisable from 1 January 2016.

The account "Other Receivables" includes the receivable from the Energy Market for energy efficiency securities matured following a number of projects completed in previous years.

	31.12.2016	31.12.2015
11 – Tax assets	(Euro thousands)2,587	2,659

The table below shows the breakdown of current income tax receivables:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Parent for IRES reimburse. on IRAP deduction	1,235	1,235
Income taxes	1,352	1,017
IRAP	---	407
Total	2,587	2,659

The account "Parent for IRES reimbursement on IRAP deduction" of Euro 1,235 thousand concerns the requested IRES repayment based on the deductibility of IRAP on the cost of labour for the years from 2007 to 2011 inclused.

The income tax receivable refers to payments on account made in the year and above the actual amount due at the reporting date.

	31.12.2016	31.12.2015
12 - Cash and cash equivalents (Euro thousands)	59,361	100,063

The table below shows the composition of cash and cash equivalents:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Time deposits	8,905	21,947
Bank and postal accounts	50,435	78,098
Cash in hand and similar	2 1	1 8
Total	59,361	100,063

Cash and cash equivalents at 31 December 2016 amount to Euro 59,361 thousand compared to Euro 100,063 thousand at 31 December 2015, a decrease of Euro 40,702 thousand, due to the capital expenditure programme of the Group. They are not subject to restrictions which may significantly impact their value. Reference is made to the statement of cash flows in relation to liquidity.

		31.12.2016	31.12.2015
CONSOLIDATED' EQUITY	(Euro thousands)	155,519	145,629
		31.12.2016	31.12.2015
13 - Group Equity	(Euro thousands)	155,519	145,629

The increase in Group equity at 31 December 2016 compared to 31 December 2015 of Euro 9,890 thousand is attributable principally to the Group profit for the year (+ Euro 31,191 thousand), the distribution of dividends (- Euro 20,346 thousand), the change in the translation reserve (-Euro 531 thousand) and the actuarial gains on defined benefit plans (+ Euro 424 thousand).

With reference to the "Statement of changes in Consolidated Equity" the following information is provided.

Share capital

The share capital of Zignago Vetro SpA, the Parent, at 31 December 2016, of Euro 8,800 thousand, which is fully subscribed and paid-in, comprises 88,000,000 ordinary shares with a nominal amount of Euro 0.10 each.

Legal reserve

The legal reserve of Zignago Vetro SpA at 31 December 2016 had reached one-fifth of the share capital.

Revaluation reserve

The revaluation reserve derives essentially from the application of the following laws:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Reserve as per law 342/2000, on suspension of taxes	24,823	24,823
Reserve as per law 72/1983, on suspension of taxes	932	932
Reserve as per law 413/1991	1,579	1,579
Total	27,334	27,334

The "reserve as per law No. 342/2000" is shown net of the substitute tax (19%).

Translation reserve

The "Translation reserve", a negative Euro 1,627 thousand at 31 December 2016, compared to a negative Euro 1,096 thousand at 31 December 2015, mainly reflects the differences from the translation of the foreign currency financial statement of HSC SA.

Other reserves

The "Other reserves" of Euro 6,270 thousand, unchanged from the previous year, includes the "extraordinary reserve" of Euro 103 thousand and the "reserve as per article 55 of Presidential Decree nos. 597/1973 and 917/1986" for Euro 6,167 thousand.

The composition of the reserves taxable on distribution is shown below:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Reserve as per law 72/1983	932	932
Reserve as per law 342/2000	24,823	24,823
Contributions as per art. 55 DPR 917/1986	6,044	6,044
Contributions as per art. 55 DPR 598/1973	123	123
Total	31,922	31,922

On the first-time adoption, the Group considered it prudent to record the deferred tax liabilities on the suspension of taxes for grants reserve as per Article 55 of Presidential Decree 917/1986, amounting to Euro 6,044 thousand.

On the remaining suspension of taxes reserves, no deferred tax liability was recorded as no distribution is expected.

The account "Acquisition of treasury shares" of Euro 5,027 thousand comprises the acquisitions made at 31 December 2015.

The table below shows the reconciliation of the number of shares issued and those outstanding at the beginning of the acquisition operations until 31 December 2016:

Period	Description	Number	Treasury	Shares in	Unitary	Total
		shares	shares	circulation	value
FY 2007	Opening bal.	80,000,000	---	80,000,000	0.10	8,000,000
	Acquisition	---	(40,000)	79,960,000	0.10	7,996,000
FY 2008	Acquisition	---	(1,014,900)	78,945,100	0.10	7,894,510
FY 2009 FY 2012	Acquisition	---	(237,240)	78,707,860	0.10	7,870,786
	Scrip issue	8,000,000	---	---	---	---
	Allocation from scrip
	issue	---	(129,250)	86,578,610	0.10	8,657,861
FY 2013		---	---	---	---	---
FY 2014		---	---	---	---	---
FY 2015		---	---	---	---	---
FY 2016		---	---	---	---	---
31 December 2016		88,000,000	(1,421,390)	86,578,610	0.10	8,657,861

		31.12.2016	31.12.2015
NON-CURRENT LIABILITIES	(Euro thousands)	102,128	133,472
		31.12.2016	31.12.2015
14 - Provisions for risk and charges	(Euro thousands)	2,279	3,867

The table below shows the composition of the provisions for risks and charges:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Post-employment benefits provision	1,262	1,447
Provision for industrial risks	1,253	1,215
Agents' supplementary indemnity provision	204	481
Provision for contractual risks	285	306
Provision for emission trading risks	537	418
Total	3,541	3,867

Post-employment benefits

The "Post-employment benefit", recorded by Verreries Brosse SAS, refers to the liability estimated against employees who terminate their employment with their company only due to pension, net of the amounts paid to a separate insurance fund.

The table below shows the movements in the provision in the year:

(Euro thousand)	Balance at	Balance at
	31.12.2016	31.12.2015
Balance at 1 January	1,447	1,175
Provisions	2 5	272
Utilisations	(210)	---
Balance at 31 December	1,262	1,447

Provision for industrial risks

The "Provision for industrial risk" is made against claims by clients for defects in production to be determined and potential losses on packaging material for which the commitment to repurchase is agreed.

The table below shows the movements in the provision in the year:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Balance at 1 January	1,215	1,132
Provisions	9 5	204
Utilisations	(57)	(121)
Balance at 31 December	1,253	1,215

Agents' indemnity provision

The "Agents' indemnity provision" is made on the basis of legislative provisions and collective agreements relating to the termination of agents' mandates.

The table below shows the movements in the provision in the year:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Balance at 1 January	481	446
Provisions	1 3	3 5
Utilisations	(290)	---
Balance at 31 December	204	481

Provision for contractual risks

The Provisions for contractual risks is made based on legal disputes principally in relation to employees.

The table below shows the movements in the provision in the year:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Balance at 1 January	306	233
Provisions	---	7 3
Utilisations	(21)	---
Balance at 31 December	285	306

Provision for emission trading risks

The "Provision for emission trading risks" was made against higher CO2 emissions compared to those assigned by the Ministry, according to the net liability approach, for Zignago Vetro SpA. The table below shows the movements in the provision in the year:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Balance at 1 January	418	190
Provisions	536	418
Utilisations	(417)	(190)
Balance at 31 December	537	418

	31.12.2016	31.12.2015
15 - Post-employment benefits
(Euro thousands)	6,426	4,838

Post-employment benefits entirely refers to the employee leaving entitlement whose changes at 31 December 2016 and 2015 were as follows:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Provision at 1 January	4,838	5,015
Interest	182	235
Costs for services prior years	---	(37)
Actuarial profit (loss)	424	(116)
Of which change in assumptions	291	3 6
Of which experience adjustments	133	(152)
Liquidations	(280)	(259)
Provision at 31 December	5,164	4,838

Following the amendments to post-employment benefits introduced by Law No. 296 of 27 December 2006 (Finance Law 2007) and subsequent Decrees and Regulations issued in the first months of 2007, the Post-Employment Benefit of the Group companies matured from 1 January 2007, or from the option date chosen by the employee, is included under defined contribution plans, both in the case of supplementary pension options and in the case of allocation to the INPS Treasury Fund. The accounting treatment of this Post-Employment Benefit is therefore the same as other contribution payments, not including therefore any annual cost for the service provided. Instead, an actuarial calculation was made on the post-employment benefit matured until 31 December 2015 by an independent expert in accordance with IAS 19, actuarial method, which allows for an estimate of the present value of the obligation based on a series of demographic and financial assumptions.

	31.12.2016	31.12.2015
Actual mortality rate:	ISTAT 2004	ISTAT 2004
Actual invalidity rate	INPS inability/ invalidity	INPS inability/ invalidity
	tables	tables
Advanced rate of employee	constant annual average	constant annual average
early termination (dismissals	frequency of 3.9%	frequency of 3.9%
and resignations):
Rate of post-employment	constant annual average rate	constant annual average rate
benefit advances	of 2.5%	of 2.5%
	- average amount equal to	- average amount equal to
	70% of accumulated Post	70% of accumulated Post
	Employment Benefit Employment Benefit
Annual technical discounting	1.30% was assumed based on 2% was assumed based on the
rate	the bond yields with duration bond yields with duration
	comparable to those subject to	comparable to those subject to
	measurement	valuation
Future annual inflation rate	1.5%	1.5%
Date of pension	in line with the applicable	in line with the applicable
	regulation	regulations
Annual increase in post	a fixed rate of 2.63% plus the	a fixed rate of 2.63% plus the
employment benefits	75% of the inflation rate	75% of the inflation rate
	recorded by ISTAT compared	recorded by ISTAT compared
	December of the previous	December of the previous
	year.	year.

The principal assumptions adopted for the actuarial recalculation of the provision at 31 December 2016, compared with those used at the previous reporting date, are summarised below:

	31.12.2016	31.12.2015
16 - Non current bank loans and borrowings (Euro thousands)	87,579	118,335

The table below shows the composition of non current bank loans and borrowings:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
(A) Unsecured loan, nominal value Euro 30 million, BNL, Euribor 3 months variable rate, maturity June 22, 2021, repayment by
quarterly instalments in arrears	26,844	29,810
(B) Unsecured loan, nominal value Euro 70 million, Unicredit / Mediobanca, Euribor 3 months variable rate, maturity
December 31, 2020, repayment by half-yearly instalments (C)	69,498	69,372
Unsecured loan, nominal value Euro 15 million, Banco di Brescia, Euribor 3 months variable rate, maturity December
18, 2019, repayment by half-yearly instalments in arrears (D)	11,282	14,940
Unicredit SpA loan, repayable by 2016, at a variable rate	---	1,160
(E) French banking system loan to Verreries Brosse SAS	1,006	1,716
(F) Bank Pekao Loan HSC SA	1,490	2,234
(G) HSC SA finance leases	3 1	5 9
(H) BNP Paribas Loan	799	934
(I) BPI France Loan	1,000	1,000
(J) BNL Loan	4,462	5,000
(K) Societè Generale Loan	787	922
(L) Casse D'Epargne Loan	738	881
(M) CRCA Loan	798	933
Total medium/long-term loans	118,735	128,961
Less current portion	(31,156)	(10,626)
Medium-long term portion	87,579	118,335

At 31 December 2016 and 2015, the future capital repayments of the non current bank loans and borrowings were as follows:

(Euro thousands)		Balance at	Balance at
		31.12.2016	31.12.2015
Year	2016	---	10,626
Year	2017	31,156	29,139
Year	2018	31,262	89,196
Beyond	2018	56,317	---
Total		118,735	128,961

The increase in the total amount of non current bank loans and borrowings from Euro 90,435 thousand to Euro 128,961 thousand follows the payment of instalments due in 2015 of existing loans of Euro 12,244 thousand and the undertaking of new non current loans, as described above, of Euro 49,616 thousand.

The non current bank loans and borrowings loans existing at 31 December 2016 and 31 December 2015 were as follows:

• (A) The BNL Loan, undertaken by Zignago Vetro SpA, of a nominal Euro 30,000 thousand, is repayable over 20 quarterly instalments in arrears of Euro 1,500 thousand each, beginning from 23 June 2016. In order to hedge interest rate movements, the Group put in place with BNL an Interest rate swap (IRS) for a total notional amount of Euro 30,000 thousand, in addition to a repayment plan, which presents at 31 December 2015 a negative mark to market of Euro 379 thousand;
• (B) The Syndicated loan undertaken with Unicredit (as a lending and the agent bank) and Mediobanca (as a lending bank) of a nominal Euro 70,000 thousand, was utilised by December 31, 2014 for an amount of Euro 30,000 thousand and for an amount of Euro 40,000 by 31 March 2015. Repayment is through 7 half-yearly instalments from 30 June 2017, each corresponding to 11.40% of the total and a final instalment on 31 December 2020 of 20.20% of the total. In order to hedge interest rate risk, the company has put in place with Unicredit and Mediobanca two Interest rate swaps (IRS) for a total notional amount of Euro 70,000 thousand, in addition to a payment plan. At 31 December 2015, these transactions reported an overall negative mark to market of Euro 791 thousand;

• (C) The Banco di Brescia Loan, undertaken by Zignago Vetro SpA, of a nominal 15,000 thousand, is repayable over 8 half-yearly instalments in arrears from 18 1une 2016. In order to hedge interest rate movements, the Group put in place with Banco di Brescia an Interest rate swap (IRS) for a total notional amount of Euro 15,000 thousand, in addition to a repayment plan, which presents at 31 December 2015 a negative mark to market of Euro 154 thousand.

• (D) Unsecured loan signed in 2011 by Zignago Vetro SpA with Unicredit Banca SpA for an initial Euro 10,000 thousand, with a residual Euro 1,160 thousand at 31 December 2015, and repayment in 18 quarterly repayments in arrears from 29 February 2012, and final payment on 31 May 2016. In order to hedge the variable rate movements, the Group undertook an Interest Rate Swap (IRS);

• (F) Unsecured loan undertaken in 2013 by HSC SA with Bank Pekao, of 55 months duration, maturity on 31/12/2017 and repayment through quarterly instalments;
• (G) Finance leases of HSC SA of Euro 59 thousand;
• (H) Loan signed by Verreries Brosse with BNP Paribas, with maturity in 2022 for Euro 934 thousand;
• (I) Loan signed by Verreries Brosse with BPI France, with maturity in 2022 for Euro 1,000 thousand;
• (J) Loan signed by Verreries Brosse with BNL, with maturity in 2020 for Euro 5,000 thousand;
• (K) Loan signed by Verreries Brosse with Societè Generale, with maturity in 2022 for Euro 922 thousand;
• (L) Loan signed by Verreries Brosse with Casse d'Epargne, with maturity in 2022 for Euro 881 thousand;
• (M) Loan signed by Verreries Brosse with CRCA, with maturity in 2022 for Euro 933 thousand;

Loan covenants

Against the loans reported in the table at letters (A) and (D), the Company is bound by a set of financial covenants to be calculated on the consolidated financial statements, for the duration of the loan:

• (i) maintain a ratio between net financial debt and own fund below 1% on the Unicredit contract (letter D) and BNL (letter A);
• (ii) maintain a ratio between net financial debt and EBITDA below 2 on both contracts.

Against the loan reported in the table at letter (B), the Company is bound by a set of financial covenant ratios to be calculated on the consolidated financial statements, as follows:

• (i) ratio between net financial debt and equity not above 1.5 for the period between 31 December 2014 and 31 December 2017 and 1.0 between 1 January 2018 until final maturity;
• (ii) ratio between net financial debt and EBITDA not above 2.5 for the period between 31 December 2014 and 31 December 2017 and 2.0 between 1 January 2018 until final maturity.

Against the loan reported in the table at letter (C), the Parent is bound by a set of financial covenant ratios to be calculated on the separate financial statements, for the duration of the loan:

• (i) maintain a ratio between net financial debt and equity not greater than 1.25;
• (ii) maintain a ratio between net financial debt and EBITDA not greater than 3.

These covenants had been comfortably complied with at 31 December 2016.

Net financial position debt

In accordance with Consob Communication No. DEM/6064293 of 28 July 2006, the net financial position is determined in accordance with CESR recommendation of 10 February 2005 "Recommendations for the uniform implementation of the European Commission regulations on information prospectus".

	(Euro thousands)		31.12.2016	31.12.2015
A.	Cash		2 1	1 8
B.	Other cash equivalents		59,340	100,045
C.	Securities held-for-trading		---	---
D.	Liquidity	(A) + (B) + (C)	59,361	100,063
E.	Current financial assets		---	---
F.	Current bank loans and borrowings		63,514	80,516
G.	Current portion of non-current debt		31,156	10,626
H.	Other current fin. payables (derivatives)		1,601	1,333
I.	Current financial debt	(F) + (G) + (H)	96,271	92,475
J	Net current financial position	(I) - (E) - (D)	36,910	(7,588)
K.	Medium/long-term loans		87,579	118,335
L	Bonds issued		---	---
	M. Other non-current payables		---	---
N.	Non-current financial debt	(K) + (L) + (M)	87,579	118,335
O	Net financial debt	(J) + (N)	124,489	110,747

Financial instrument classes and hierarchical levels of fair value measurement

The following table outlines the classes of financial instruments held by the Company:

(Euro thousands)				31.12.2016
	Loans and receivables	Financial ass. Derivative at fair value through P&L	instr.	Investments held t o maturity	Financial available	assets for sale	Total	Note
Financial assets as per accounts
Non-current financial assets	2,536			---		---	2,536	(6)
Trade receivables and others Other current	62,888	3,353		---		---		66,241 (9) & (10)
assets	6 6			---		---	6 6	(10)
Cash and cash equivalents	59,361			---		---	59,361	(12)
Total	124,851	3,353	---	---		---	128,204
(Euro thousands)				31.12.2016
		Other liabilities at amortised cost	Financial liabilities at fair value statement	to income	Derivative instruments		Total	Note
Financial liab. as per accounts
Provs. for risks & charges				537			537	(14)
Bank payables and loans		182,249			1,601		183,850	(16) & (19)
Trade payables and other		66,604					66,604	(20) & (21)
Other liabilities		3 5					3 5	(21)
Total		248,888		537	1,601		251,026
The company only measures energy efficiency securities and derivative contracts at fair value. The carrying amount of bank and other lenders loans and borrowings, recorded at amortised cost and variable interest rate contracts, are not significantly different compared to fair value. All financial instruments recorded at fair value are classifiable in the three following categories: Level 1: market listing. Level 2: technical valuations (based on observable market data). Level 3: technical valuations (not based on observable market data).

(Euro thousands)	31.12.2016
	Other liabilities at amortised cost	Financial liabilities at fair value to income statement	Derivative instruments	Total	Note
Financial liab. as per accounts
Provs. for risks & charges		537		537	(14)
Bank payables and loans	182,249		1,601	183,850	(16) & (19)
Trade payables and other	66,604			66,604	(20) & (21)
Other liabilities	3 5			3 5	(21)
Total	248,888	537	1,601	251,026

All assets and liabilities measured at fair value at 31 December 2016 are classifiable at Level 2. During the year, no transfers occurred from Level 1 to Level 2 or Level 3 or vice-versa.

		31.12.2016	31.12.2015
17 – Other non-current liabilities	(Euro thousands)	3,528	4,063

This account comprises capital grants on the investments reported in the following table:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Contributions for plant as per Law 91/2014	3,528	4,063

The account includes at 31 December 2016 the deferred income recognised against the tax receivable for investments in new machinery under Legislative Decree 91/2014 matured in 2014 and 2015, which will be recognised in profit or loss on the basis of the depreciation calculated on those assets.

		31.12.2016	31.12.2015
18 - Deferred tax liabilities	(Euro thousands)	2,316	2,369

The table below shows the composition of the deferred tax liabilities:

(Euro thousands)	Balance at 31.12.2016		Balance at 31.12.2015
	Amount	Tax	Amount	Tax
	of	effect	of	effect
	temporary		temporary
	differences		differences
Adjustment suspension of taxes reserve	6,044	1,686	6,044	1,686
Adjustment to inventories at average cost	1,180	329	1,245	348
Excess and accelerated depreciation	140	4 7	293	9 6
Valuation of post-employ. as per IAS 19	319	8 8	319	8 8
Accounting of leases as per IAS 17	168	3 3	182	3 5
Allocation of higher fixed asset values	291	5 5	300	5 7
Substitute tax effect on accel. depreciation	4 4	2	6 0	2
Other	295	7 6	189	5 7
Total		2,316		2,369

The Deferred tax liabilities include the temporary differences relating to depreciation calculated by the Companies based on previous Italian fiscal regulations (accelerated depreciation and excess depreciation), the temporary differences originating from the value of inventories calculated under the LIFO method, utilised for tax purposes, and those calculated under the average weighted cost method and the tax effects from the measurement of leases using the finance method.

Deferred tax liabilities were also recorded for Euro 1,686 thousand relating to the reserves taxable on distribution amounting to Euro 6,044 thousand and relating to the capital grant reserves (Reserves as per article 55, DPR 597/1973 and 917/1986).

The following table shows the movements in the deferred tax liabilities:

(Euro thousands)
Balance at 31 December 2014		2,879
Utilisations	(545)
Increases	3 5	(510)
Balance at 31 December 2015		2,369
Utilisations	(76)
Increases	2 3	(53)
Balance at 31 December 2016		2,316

		31.12.2016	31.12.2015
CURRENT LIABILITIES	(Euro thousands)	163,646	155,348
		31.12.2016	31.12.2015
19 - Bank payables and current portion
of medium/long-term loans	(Euro thousands)	96,271	92,475

The table below shows the composition of of bank loans and borrowings and of current portion non-current loans and borrowings:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Current accounts	3	0
Loan advances	44,508	54,500
Short-term loans	16,000	16,029
Current portion of medium/long-term loans	31,156	10,626
Advances on bank drafts	3,003	9,987
Bank loans and borrowings for mark to market	1,601	1,333
Total	96,271	92,475
For the non current bank loans and borrowings and leases, the current portion of which is included
in this account for a value of Euro 31,156 thousand at 31 December 2016 and Euro 10,626

thousand at 31 December 2015, reference should be made to the paragraph "Non current bank loans and borrowings".

	31.12.2016	31.12.2015
20- Trade and other payables	(Euro thousands)50,033	44,412

The table below shows the breakdown of trade and other payables by geographical segment at 31 December 2016 and 2015:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Italy	33,809	32,769
E.U.	13,911	11,572
Other countries	2,313	7 1
Total	50,033	44,412

Trade and other payables at 31 December 2016 increased on 31 December 2015; this mainly relates to payables for Group capital expenditures which at 31 December 2016 amounted to Euro 13,250 thousand (December 31, 2015: Euro 7,320 thousand).

		31.12.2016	31.12.2015
21 – Other non-current liabilities	(Euro thousands)	16,606	16,583

The table below shows the breakdown of "other current liabilities" at 31 December 2016 and 2015:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Employee payables	9,650	8,803
Social security institutions	3,483	3,781
Employees and consultants withholding taxes	1,355	1,485
VAT payables	432	400
Current portion of tax credit on Law 91/2014 investments	556	618
Contribution payables	3 4	8 8
Other payables	134	458
Accrued liabilities and deferred income:
- employees	927	884
- interest	3 5	6 6
Total	16,606	16,583

Payables to employees

The table below shows the breakdown of payables to employees at 31 December 2016 and 2015:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Vacation days, month due &
premiums matured	7,629	7,036
December salaries and wages	2,021	1,767
Total	9,650	8,803

Payables to employees refer to vacation days matured but not taken at reporting date and productivity premiums and managerial bonuses matured and to be paid in the following year.

Payables to social security institutions

The payables to social security institutions principally refer to payables for contributions on December salaries and wages and agents' commissions and consultants' fees accrued in the year and paid in the following year.

Current portion of tax credit on Law 91/2014 investments

The account at 31 December 2016 includes the portion maturing within 12 months of the tax credit for investments in new machinery under Legislative Decree No. 91/2014.

		31.12.2016	31.12.2015
22- Current tax liabilities	(Euro thousands)	736	1.878

The account is broken down in the following table.

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Income taxes for the year	736	1,878
Foreign subsidiary taxes	---	---
Total	736	1,878

NOTES TO THE MAIN INCOME STATEMENT ITEMS

		2016	2015
23- Revenue	(Euro thousands)	252,085	246,366

The following table shows the breakdown of revenues by product line:

(Euro thousands)	2016	2015
Core business products	235,818	228,523
Various materials	10,271	10,698
Service revenue	1,648	1,736
Others	4,348	5,409
Total	252,085	246,366

The following table shows the breakdown of revenues by geographic region:

(Euro thousands)	2016	2015
Italy	148,198	142,845
E.U.	89,771	89,651
Other countries	14,116	13,870
Total	252,085	246,366

Total revenues increased on the previous year 2.3%. For further information, reference should be made to the Directors' Report.

		2016	2015
24- Raw materials, ancillaries, consumables
and goods	(Euro thousands)	66,901	58,720

The table below shows the costs for raw materials, ancillaries, consumables and goods:

(Euro thousands)	2016	2015
Purchases	70,577	67,121
Changes in inventories of raw materials, ancilliaries, consumables and finished goods	(206)	(1,657)
Changes in inventory of work-in-progress, semi-finished and finished	(3,470)	(6,744)
Total	66,901	58,720

These costs increased 13.9%, due in particular to the increased production volumes and an altered mix, in addition to the purchase of materials for cosmetic and perfumery container finishing.

		2016	2015
25 - Service costs	(Euro thousands)	69,281	76,461

The following table shows service costs:

(Euro thousands)	2016	2015
Energy and industrial services	47,668	55,253
Transport and other trading costs	13,213	12,492
Conai contribution	3,028	3,162
Other costs	5,372	5,554
Total	69,281	76,461

The decrease in these costs (-9.4%) relates in particular to lower energy costs in the year. Transport costs and other commercial costs increased due to higher sales revenue.

		2016	2015
26 - Personnel expense	(Euro thousands)	57,897	57,115

The following table reports personnel expense:

(Euro thousands)	2016	2015
Wages and salaries	43,088	41,086
Social security charges	13,833	14,427
Defined contribution plans	976	1,602
Total	57,897	57,115

These costs increased 1.4% on 2015, principally due to the higher business activity.

The movement of Group employees in 2016, divided by category, is reported below:

				Average
1 7	2	---	1 9	18.0
295	1 8	(9)	304	299.5
1,029	5 4	(18)	1,065	1,047.0
1,341	7 4	(27)	1,388	1,364.5
	31.12.2015	Hires	Departures	31.12.2016

		2016	2015
27 - Amortisation & Depreciation	(Euro thousands)	28,616	27,580

The following table reports amortisation & depreciation:

(Euro thousands)	2016	2015
Depreciation of fixed assets	28,494	27,474
Amortisation of intangible assets	122	106
Total	28,616	27,580

Further details are reported in the "Intangible and tangible fixed assets" section.

		2016	2015
28 - Other operating expenses	(Euro thousands)	2,846	4,435

The following table reports the other operating expenses:

(Euro thousands)		2016	2015
Provision for emission trading		119	417
Provision for contractual risks		---	7 3
Provision of industrial risk fund		5 4	204
Agents' supplementary indemnity provision		1 3	3 5
Total provision for risks	sub)	186	729
Doubtful debt provision	sub)	4 0	7 8
Various taxes		1,598	1,793
Membership fees		275	278
Prior year charges		296	742
Losses on asset disposals		276	667
Other		175	148
Total other charges	sub)	2,620	3,628
Total		2,846	4,435

	2016	2015
29 - Other operating income	(Euro thousands) 2,918	4,916

The following table reports other operating income:

(Euro thousands)	2016	2015
Prior year income	382	2,786
Gain on asset disposals	608	456
Release of provisions	---	166
Insurance claim reimbursements	1,320	873
Others	608	635
Total	2,918	4,916

The gains on fixed asset disposals relates to sales and in particular of Zignago Vetro SpA. Other operating income principally concerns insurance compensation on accidental damages.

		2016	2015
30 - Investments in JV's
measured using equity method	(Euro thousands)	12,945	12,565

Reference should be made to note No. 4 "Equity – accounted investees", which indicates - both for the investments held in Vetri Speciali SpA and in Vetreco Srl - the effect on the 2016 and 2015 income statement from the measurement of these investments using the equity method.

	2016	2015
31 – Financial income	(Euro thousands) 209	798

The following table reports financial income:

(Euro thousands)	2016	2015
Bank interest	166	726
Other	4 3	7 2
Total	209	798

		2016	2015
32- Financial expenses	(Euro thousands)	2,949	4,169

The following table shows the financial expenses:

(Euro thousands)	2016	2015
Interest on current accounts	225	547
Loan interest	1,485	1,817
Financial charges on interest rate hedges	753	558
Derivative fair value measurement effect	300	846
Discounts and other financial charges	172	303
Other	1 4	9 8
Total	2,949	4,169

The financial expenses include the effect of the fair value measurement of IRS derivatives signed in order to fix the interest rate on part of the financial debt. Overall, the reduction in interest rates in the 2016 tax year and the re-establishment of the short and medium/long-term interest rate curve resulted in increased financial expenses, according to the group's accounting policies, of Euro 300 thousand.

In 2016, the account "Discounts and other financial expenses" included financial expenses relating to the actuarial measurement of Post-Employment Benefits as per IAS 19 of Euro 182 thousand (Euro 235 thousand in 2015).

		2016	2015
33 - Net exchange rate gains/(losses)	(Euro thousands)	(173)	(68)

The account in 2016 relates to exchange losses.

		2016	2015
34 - Income taxes	(Euro thousands)	8,303	7,187

The table below shows the composition of the income taxes between deferred and/or current taxes:

(Euro thousands)	2016	2015
Current income tax	8,381	7,792
Deferred tax (income)/charge	(78)	(605)
Total	8,303	7,187

The income tax charge, estimated in accordance with current tax legislation, amounted to Euro 8,303 thousand (Euro 7,187 thousand in the previous year).

The tax-rate in 2016 was 21% compared to 19.8% in 2015.

The IRES income tax and IRAP regional tax rates reflect the effective tax charge payable by the Group. The table below shows the reconciliation between the theoretical fiscal charge and the effective charge for the years under consideration:

(Euro thousands)	2016	Tax charge	2015	Tax charge
Profit before taxes Ordinary rate applied	39,494 27.50%		36,233 27.50%
Theoretical tax charge	10,861		9,964
Other permanent differences	(3,620)		(3,746)
IRES rate change effect	(113)		(157)
Current IRAP	1,175		1,126
Total tax charges	8,303	21.0%	7,187	19.8%

OTHER INFORMATION

Earnings per share

Basic and diluted earnings per share

The share capital of Zignago Vetro SpA at 31 December 2016 and 2015, consists of 88,000,000 ordinary shares with a par value of Euro 0.10 each, fully subscribed and paid-in.

The earnings per share for 2016 and 2015 is calculated based on the result attributable to the Parent in the respective periods, taking account of the average weighted number of shares in circulation, excluding treasury shares. No calculation of the diluted earnings per share was made as in both periods financial instruments with dilutive effects on the earnings concerning the shares in circulation were not in place.

The average weighted number of shares and the profit attributable is reported below:

	Values at	Values at
	31.12.2016	31.12.2015
Profit attrib. to shareholders of the parent (Euro '000)	31,191	29,046
Average weighted number of ordinary shares, including treasury shares, for earnings per share	88,000,000	88,000,000
Weighted average number of treasury shares	(1,421,390)	(1,421,390)
Average weighted number of ordinary shares, excluding treasury shares, for earnings per share	86,578,610	86,578,610
Earnings per share (in Euro)	0.360	0.335

Segment reporting

Segment reporting which coincides with the various legal entities is provided below.

Disclosure by geographical segments is not considered appropriate for the Group.

The operating segments ("Business Units") are identified as follows:

• Zignago Vetro SpA: this Business Unit carries out the production of glass containers for food and beverages and for cosmetics and perfumery;
• Verreries Brosse SAS: this Business Unit carries out the production of glass containers for perfumes;
• HSC SA: this Business Unit undertakes the production of a wide range of customised products for cosmetic and perfumery containers and also for food and beverage niche markets worldwide.

The criteria applied for the identification of the reporting segments were based on, among other issues, the manner in which management directs the Group and attributes managerial responsibility. The joint ventures in Vetri Speciali SpA (production of specialty containers, principally for wine, vinegar and olive oil) and Vetreco Srl: (processing of raw glass into the finished material ready for use by glassmakers) are considered by management as independent business units, which under IFRS 11 may only be measured at equity. Consequently, the portion of profit of the two joint ventures previously consolidated proportionally, in the subsequent tables are identified within the operating result under consolidation adjustments.

(Euro thousands)				2016
	Zignago	Verreries	HSC SA	Zignago Glass		Consolidated
		Vetro SpA Brosse SAS		USA Inc.	Consolidation adjustments
Revenues	183,223	51,435	23,222	325	(6,120)	252,085
Amort. & Deprec.	(20,111)	(6,033)	(2,472)	---	---	(28,616)
Operating Result	28,331	(1,233)	2,594	(220)	12,935	42,407
Net Result	27,229	(1,610)	1,913	(222)	3,881	31,191
Assets	316,857	59,491	59,092	6 3	(14,210)	421,293
Liabilities	214,092	46,991	42,687	210	(38,206)	265,774
Investments in:
Intangible assets	141	2 3	7	---	698	869
Property, plant & equipment	87,307	21,616	43,630	---	---	152,553

The segment disclosure is provided below:

(Euro thousands)				2015
	Zignago	Verreries	HSC SA	Zignago Glass	Consolidation	Consolidated
		Vetro SpA Brosse SAS		USA Inc.	adjustments
Revenues	175,551	54,018	22,350	162	(5,715)	246,366
Amort. & Deprec.	(18,879)	(6,415)	(2,286)	---	---	(27,580)
Operating Result	24,894	492	1,656	(98)	12,592	39,536
Net Result	23,543	210	1,210	(98)	4,181	29,046
Assets	337,792	64,404	26,459	8 9	5,705	434,449
Liabilities	241,587	50,294	11,449	6	(14,516)	288,820
Investments in:
Intangible assets	6 1	3 2	9	---	722	824
Property, plant & equipment	94,973	24,652	14,240	---	---	133,865

Related party transactions

The table below shows the composition of the receivables, principally trade receivables, of Group companies with related party companies at the reporting date:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Zignago Holding SpA	1,235	1,235
Santa Margherita SpA and its subsidiaries	951	674
New High Glass Inc.	---	381
Total receivables from related companies	2,186	2,290

The receivables from Zignago Holding SpA, the Parent, of Euro 1,235 thousand, principally reflect the IRES related to the IRAP repayment request presented by Zignago Vetro SpA and current IRES.

The revenues from Santa Margherita SpA and from New High Glass Inc. derive from trading transactions.

At 31 December 2016, New High Glass Inc. is no longer considered a related party as the parent Zignago Holding SpA completed the sale on 23 November 2016.

The table below shows the composition of the payables of Group companies to related companies at the reporting date:

(Euro thousands)	Balance at	Balance at
	31.12.2016	31.12.2015
Zignago Power Srl	470	552
Zignago Servizi Srl	8	6
Santa Margherita SpA and its subsidiaries	211	180
Zignago Holding SpA	534	1,879
La Vecchia Scarl	3 8	4 3
New High Glass Inc.	---	1 0
Zignago Immobiliare Srl	---	1
Multitecno Srl	---	2
Total payables to related companies	1,261	2,673

The table below shows the composition of Group company revenues from related companies in the year:

(Euro thousands)	2016	2015
Santa Margherita SpA and its subsidiaries	6,390	6,088
New High Glass Inc.	---	1,197
La Vecchia Scarl	1	1
Zignago Power Srl	1	5
Zignago Servizi Srl	3	---
Total revenues from related parties	6,395	7,291

The table below shows the composition of Group company costs from related companies in the year:

(Euro thousands)	2016	2015
Zignago Power Srl	4,972	5,235
Zignago Servizi Srl	1,735	1,532
Zignago Holding SpA	540	556
La Vecchia Scarl	444	425
Santa Margherita SpA and its subsidiaries	402	423
Zignago Immobiliare Srl	156	128
Multitecno Srl	2 5	4
Total costs from related companies	8,274	8,303

Management of capital

The share capital includes the shares and the equity attributable to owners of the parent.

The primary capital management objective of the Group is to guarantee the maintenance of a strong credit rating in order to support operations and to maximise value for shareholders.

In order to achieve this objective, the management of Group capital aims, among other matters, to ensure compliance with covenants, related to interest bearing loans, based on financial performance indicators. Breaches in the covenants would permit the banks to request immediate repayment of the loans. There were no breaches of the covenants in the current year in relation to interest bearing loans for any of the Group companies.

The Zignago Vetro Group has payables to financial intermediaries and has a financial debt position related to the business development plan. The high generation of cash flows from operating activities enables Group Companies not only to repay existing loans, but also to guarantee an adequate dividend to Shareholders and pursue a growth strategy.

In this context, the Group, in order to maintain or amend the capital structure, may pay dividends to Shareholders, acquire treasury shares on the market or issue new shares.

No substantial amendments were made to these objectives, to policies or to processes in 2016 or 2015.

Risk management policies

The Group will continue to prudently manage risks in all departments with careful monitoring in order to identify, reduce and eliminate such risk, therefore extensively protecting shareholder interests.

Currency risk

The currency risk is the risk that the fair value or the future cash flows of a financial instrument are altered following changes in exchange rates.

The exposure of the Group to changes in exchange rates principally concerns the operating activities of the Group (when revenues and costs are denominated in a currency other than the presentation currency of the Group). Where these transactions are significant, the Group Companies assess the possibility of undertaking currency hedges in order to mitigate these fluctuations. During the years presented the Group has not undertaken exchange currency hedges, as such transactions undertaken by the companies of the Group are not considered significant.

Credit and country risks

The credit risk represents the exposure of the Group to potential losses deriving from noncompliance with obligations by trading partners; this activity is subject to ongoing monitoring within the normal management of business operations, in order to minimise the exposure to "counterparty" credit risk, also utilising appropriate insurance instruments to protect the solvency of the client or of the country risk in which this latter operates.

The Group Companies constantly assess political, social and economic risks in the areas in which they operate. No significant cases of non-fulfilment by trading partners have occurred and no significant credit risk by individual segment and/or client exists.

The Group in fact only deals with established and reliable clients. Customers that request extensions of payment are subject to a credit rating check. Moreover, the collection of receivables is monitored during the year so that the exposure to losses is not substantial. Finally, in the case of new clients operating in non-EU countries, the Group companies obtain letters of credit and advance payments.

Interest rate risk

The interest rate risk is a risk that the fair value for the future cash flows of a financial instrument alters due to changes in market interest rates. The Companies of the Group are exposed to the risk of fluctuations in interest rates principally in relation to the non current bank loans and borrowings, negotiated at floating interest rates, and amount to Euro 108 million. Where these risks are considered significant, the Companies of the Group undertake interest rate swaps in order to convert the floating rate of the non current loans into fixed rates, which reduces the impact of the fluctuations in interest rates

Therefore, the Parent undertook interest rate swaps whose notional amount decreases in line with the loan in order to hedge the interest rate risk on non current loans and borrowings for a notional amount of Euro 108 million.

The characteristics of the derivative contracts, their notional amount and the market value at 31 December 2016 are as follows:

Company	Bank	Underlying	Date	Notional	Expiry	Market
			o f	at the		value
			Signing	reference date		31.12.2016
Zignago
Vetro SpA	Unicredit	Loan	21/01/2015	17,142,857	31/12/2020	(253,964)
Zignago
Vetro SpA	Unicredit	Loan	31/03/2015	22,857,143	31/12/2020	(338,618)
Zignago
Vetro SpA	Mediobanca	Loan	21/01/2015	12,857,143	31/12/2020	(192,156)
Zignago
Vetro SpA	Mediobanca	Loan	31/03/2015	17,142,857	31/12/2020	(256,208)
Zignago
Vetro SpA	Banco Brescia	Loan	18/12/2014	11,327,102	18/12/2019	(132,671)
Zignago
Vetro SpA	BNL	Loan	22/12/2014	27,000,000	22/06/2021	(428,032)
Total				108,327,102		(1,601,649)

Liquidity risk

The Group monitors the risk of a deficiency in liquidity utilising liquidity planning instruments. The Group objective is to maintain a balance between continuity of available funds, flexibility of utilisation through utilisation of instruments such as bank overdrafts, bank loans and borrowings, finance leases and adequate remuneration of its liquidity, temporarily investing exclusively with banking counterparties.

In particular, the profile of the financial liabilities at 31 December 2016 on the basis of the non-discounted contractual payments, including trade payables and other current liabilities, is summarised as follows:

(Euro thousands)			2016
	Less than 3	3 to 12	1 to 5	Beyond	Total
31 December 2016	months	months	years
Medium/long-term loans	---	---	75,972	11,607	87,579
Other non-current liabilities	---	---	3,528	---	3,528
Bank payables and current portion of medium/long-term loans	39,212	55,458	1,601	---	96,271
Trade and other payables	50,033	---	---	---	50,033
Other current liabilities	16,606	---	---	---	16,606
Current income taxes	---	736	---		736
Total	105,851	56,194	81,101	11,607	254,753

Against payables due within three months, the Group may avail of liquidity of Euro 59.4 million and payables to banks due within 12 months may be extended with the current lenders. The Group therefore assessed the risk concentration, with reference to the debt refinancing, and concluded that the risk was low.

The same profile at 31 December 2015 was as follows, with cash and cash equivalents amounting to Euro 100.1 million:

(Euro thousands)			2015
	Less than 3	3 to 12	1 to 5	Beyond	Total
31 December 2015	months	months	years
Medium/long-term loans	---	---	114,216	4,119	118,335
Other non-current liabilities	---	---	4,063	---	4,063
Bank payables and current portion of medium/long-term loans	80,519	10,623	1,333	---	92,475
Trade and other payables	44,412	---	---	---	44,412
Other current liabilities	16,583	---	---	---	16,583
Current income taxes	---	1,878	---		1,878
Total	141,514	12,501	119,612	4,119	277,746

The terms and conditions of financial liabilities are listed below:

• There is no interest on trade payables and they are normally paid at 60 days;
• Other payables are normally paid within the month following recognition.

Risks related to the fluctuation in energy prices

The Group is exposed to fluctuations in energy purchase costs, a significant cost component in the glass sector. Where this risk is considered significant, hedges may be undertaken in order to convert the variable cost into a fixed cost, which reduces the impact of fluctuations.

From 2012, the supply of energy at Fossalta di Portogruaro facilities of the Parent Zignago Vetro SpA has been guaranteed by Zignago Power Srl, a company wholly-owned by the parent Zignago Holding SpA., which started up a natural biomass energy production plant. The risk concerning energy cost fluctuation is therefore greatly reduced.

In 2016, the Parent also agreed supply contracts at fixed prices, in line with its production programmes. The exposure of the Group to the risk of fluctuations in energy prices is therefore considered marginal.

Disclosure pursuant to Article 149 of the Consob Issuers' Regulation

The following table, prepared pursuant to Article 149 of Consob Issuer's Regulations, reports the payments made in 2016 for audit and other services carried out by the audit company and entities associated with the audit company.

(Euro thousands)
Type of service	Company providing the service	Company	Fees 2016
	Legally-required audit Auditor of the Parent	Parent	8 0
Other services	Parent audit firm network	Parent	---
		sub)	8 0
	Legally-required audit i) Auditor of the Parent	Subsidiaries	---
	ii) Parent audit firm network	Subsidiaries	6 1
	Legally-required audit i) Third Party Auditor	Joint Venture	3 7
	ii) Parent audit firm network	Joint Venture	---
Other services	i) Auditor of the Parent	Subsidiaries	---
	ii) Parent audit firm network	Subsidiaries	2 2
		sub)	120
		Total	200

Proposals to the Shareholders' Meeting

PROPOSALS TO THE SHAREHOLDERS' MEETING

The proposals to be presented to the Shareholders' Meeting approved by the Board meeting of 15 March 2017 of Zignago Vetro S.p.A., the parent, are outlined below.

Dear Shareholders,

We trust that you will be in agreement with the criteria for the preparation of the financial statements as at and for the year ended 31 December 2016 and invite you to approve them.

As the Legal Reserve has reached one-fifth of the share capital, We propose also the allocation of the profit of Euro 27,229,719, as follows:

- to dividends the amount of	Euro	21,817,810
as Euro 0.252 for each of the 86,578,610
ordinary shares
- to "Retained earnings" the residual amount of with this reserve therefore amounting to Euro 42,508,886	Euro	5,411,909
	Euro	27,229,719

Fossalta di Portogruaro, 15 March 2017

For the BOARD OF DIRECTORS The Chairman Mr. Paolo Giacobbo

SHAREHOLDERS' MEETING CALL

Those with the right to attend and vote are called to the Ordinary Shareholders' Meeting at the registered office of the company in Fossalta di Portogruaro (VE), Via Ita Marzotto, 8 on 27 April 2017 at 11 AM in first call and on 28 April 2017 at the same time and place in second call, to discuss and vote upon the following

AGENDA

• 1) Annual Financial Statements for the year ended 31 December 2016, Directors' Report, Board of Statutory Auditors' Report and Independent Auditors' Report.
• 1.1 Review and approval of Annual Financial Statements for the year ended 31 December 2016, Directors' Report, Board of Statutory Auditors' Report and Independent Auditors' Report.

1.2 Allocation of the profit

• 2) 2016 Remuneration Report motions concerning the First Section, in accordance with Article 123-ter of Legislative Decree 58/1998 and Article 84-quater of Consob Regulation 11971/1999.
• 3) Authorisation for the purchase and utilisation of treasury shares, with prior revocation, where not utilised, of the previous Shareholders' Meeting motion of 28 April 2016.

INFORMATION ON THE SHARE CAPITAL

The share capital subscribed and paid-in amounts to Euro 8,800,000.00, comprising 88,000,000.00 ordinary shares, each with a nominal value of Euro 0.10. At the date of the present call notice, the Company holds 1,421,390 treasury shares in portfolio, comprising 1.615% of the share capital, for which the voting right is suspended. Therefore 86,578,610 votes are exercisable at the Shareholders' Meeting called. Any change in treasury shares will be communicated at the Shareholders' Meeting.

The ownership structure is available on the company website www.gruppozignagovetro.com, in the Investors - Shareholders' Meetings section.

RIGHT TO ATTEND AND VOTE AT THE SHAREHOLDERS' MEETING

In accordance with Article 83-sexies and Legislative Decree 58/98 (the "CFA") those who have sent to the Company the relative communication through an authorised intermediary based on the accounting records on the seventh trading day before the Shareholders' Meeting, therefore 18 April 2017, have the right to attend and vote at the Shareholders' Meeting. Those who hold shares only after 18 April 2017 will not have the right to attend or vote at the Shareholders' Meeting. The Communication of the intermediary must be received by the Company by the end of the third trading day before the Shareholders' Meeting is held in first call (therefore by 24 April 2017). The right to attend and vote at the Shareholders' Meeting remains valid if the communication of the above-stated intermediary is sent to the Company outside the stated time period, although by the beginning of the relative Shareholders' Meeting.

PROXY REPRESENTATION AND VOTING

Each shareholder who has the right to attend the Shareholders' Meeting can be represented by written proxy in accordance with current regulations. For this purpose, a proxy form is available at the registered office of the company, on the company internet site www.gruppozignagovetro.com, Investors - Shareholders' Meeting section, and through authorised intermediaries. The form may be sent to the registered office of the company at Via Ita Marzotto, 8, Fossalta di Portogruaro (VE) for the attention of Mr. Roberto Celot (Investor Relations Manager) or through fax to 0421/246401. Prior notice does not exempt the proxy granted the right to attend the shareholders' meeting from the obligation to declare, in good faith, conformity with the original notified copy and to identify the principal. In accordance with applicable regulations, the proxy must maintain the original proxy form and any voting instructions received for one year from the conclusion of the shareholders' meeting. Proxy may also be conferred, in accordance with law, electronically through a document signed in electronic form in accordance with Article 21, paragraph 2, of Legislative Decree No 82 of 7 March 2005.

In accordance with the Company By-Laws, a designated agent has not been appointed for the Shareholders' Meeting in accordance with Article 135-undecies of Legislative Decree No. 58 of 24 February 1998.

Voting may not take place through correspondence or electronic means.

SUPPLEMENTS TO THE AGENDA AND PRESENTATION OF NEW PROPOSALS

In accordance with Article 126-bis of Legislative Decree 58/98 shareholders who, also jointly, represent at least one-fortieth of the share capital, may apply to supplement the Shareholders' Meeting Agenda within 10 days of publication of the present notice, therefore by 6 April 2017, indicating the further matters proposed or by presenting proposals concerning matters already on the Agenda. The request must be sent in writing to the registered office of the company at Via Ita Marzotto, 8, Fossalta di Portogruaro (VE) for the attention of Mr. Roberto Celot (Investor Relations Manager) or through fax to 0421/246401. Within the above-stated timeframe certification confirming ownership of the holding, approved by an intermediary who holds the accounts where the shares of the requesting party are registered, must be sent together with a report containing the reasons for resolutions on new matters to be added to the agenda by the applicant, or the reasoning for the further proposals on matters already on the agenda. Supplementation is not permitted for matters on which the Shareholders' Meeting will vote, in accordance with law, on proposals of the directors or concerning projects or reports other than those prepared in accordance with Art.125 ter paragraph 1 of the CFA. The above-stated report, supplemented by any evaluations by the Board of Directors, will be made available to the public at least 15 days before the Shareholders' Meeting using the same means as for the publication of the present notice and the other Shareholders' Meeting documentation, together with the publication of the agenda supplementation notice or the presentation of further proposals on matters already on the Agenda.

RIGHT TO SUBMIT QUESTIONS REGARDING MATTERS ON THE AGENDA

In accordance with Article 127-ter of Legislative Decree No. 58/98, those with the right to vote may submit questions regarding the matters on the agenda, also before the Shareholders' Meeting, through registered email to assembleezignagovetro@legalmail.it within three days prior to the Shareholders' Meeting in first call (therefore by 24 April 2017). In order to exercise this right, certification by the intermediary confirming the right to vote must be sent to the Company. For questions submitted, responses will be made at the latest during the meeting itself. Responses may be provided in written form at the Shareholders' Meeting and made available to all those with voting rights at the beginning of the Shareholders' Meeting.

DOCUMENTATION

Documentation relating to the Shareholders' Meeting, including the reports of the Board of Directors and the proposals regarding the matters of the Agenda, will be made available to the public under the terms and conditions and in the manners established by the applicable regulations, with shareholders and those with voting rights permitted to obtain a copy.

This documentation will be available at the registered office of the company, on the website www.gruppozignagovetro.com, in the Investor - Shareholders' Meetings section, as well as at the storage mechanism at and specifically:

• on 27 March 2017: authorisation for the purchase and utilisation of treasury shares;

• by 31 March 2017, the Annual Financial Report, together with the Corporate Governance and Ownership Structure Report prepared in accordance with Article 123-bis of Legislative Decree 58/1998, the Board of Statutory Auditors' Report, the Auditors' Report and the Remuneration Report prepared in accordance with Article 123-ter of Legislative Decree 58/1998 and the other documentation required by Article 154-ter of Legislative Decree No. 58/98.

ORGANISATIONAL ASPECTS

The shareholders are kindly requested to register at least one hour before the commencement of the Shareholders' Meeting.

Fossalta di Portogruaro, 15 March 2017

For the Board of Directors Mr. Paolo Giacobbo

Summary of Shareholders' Meeting resolutions

SUMMARY OF THE SHAREHOLDERS' MEETING RESOLUTIONS

the revocation for the outstanding period, which will conclude on 28 October 2017, and for the

Summary of Shareholders' Meeting resolutions

Statement on the Consolidated Financial Statements

(art. 81-ter Consob Regulation No. 11971/1999 and subsequent amendments and additions)

Statement of the Consolidated Financial Statements

Statement on the Consolidated Financial Statements as per Article 81-ter of Consob Regulation No. 11971 of 14 May 1999 and subsequent amendments

• 1. The undersigned Paolo Giacobbo, CEO, and Roberto Celot, Executive Officer for Financial Reporting of Zignago Vetro SpA, also in consideration of Article 154-bis, paragraphs 3 and 4, of Legislative Decree No. 58 of 24 February 1998 state:
• the accuracy of the information on company operations and
• the effective application of the administrative and accounting procedures for the consolidated financial statements as at and for the period from 1 January 2016 to 31 December 2016.
• 1. No significant aspect emerged concerning the above.
• 1. We also state that:
• 3.1. the consolidated financial statements:
  • a) are drawn up in conformity with the applicable IFRS endorsed by the European Union in conformity with EU Regulation No. 1606/2002 of the European Parliament and the Commission of 19 July 2002;
  • b) correspond to the underlying accounting documents and records;
  • c) provides a true and fair view of the financial position, financial performance and cash flow of the issuer and of the other companies in the consolidation scope.
• 3.2. The Directors' Report on operations includes a reliable analysis on the performance and operating result, as well as the situation of the issuer, together with a description of the principal risks and uncertainties to which it is exposed.

Fossalta di Portogruaro, 15 March 2017

Zignago Vetro SpA

Mr. Paolo Giacobbo, Mr. Roberto Celot Chief Executive Officer Executive Officer for Financial Reporting

Independent Auditors' Report

(Arts. 14 and 16 of Legislative Decree No. 39 of 27/1/2010)

The attached auditors' report and the related consolidated financial statements are in accordance with the original version in the Italian language filed at the registered office of Zignago Vetro SpA and published in accordance with law and, subsequent to this date, KPMG SpA has not undertaken any further audit work.

Corporate Governance and Ownership Structure Report

pursuant to article 123 of the Consolidated Finance Act

(traditional administration and control model)

Issuer: Zignago Vetro SpA Website: www.gruppozignagovetro.com Financial period of Report: year ended December 31, 2016 Date of approval of Report: March 15, 2017

147

CONTENTS

	Glossary 149
1.	Profile of the Issuer150
2.	Disclosures on shareholders (Article 123, paragraph 1 of the CFA)153
3.	Compliance 159
4.	Board of Directors 159
4.1	Appointment and replacement (as per Art. 123-bis, par. 1, letter l), CFA)	159
4.2	Composition (as per Article 123-bis, paragraph 2, letter d), CFA) 162
4.3	Role of the Board of Directors (as per Art. 123-bis, par. 2, letter d) CFA)165
4.4	Executive bodies167
4.5	Other executive directors172
4.6	Independent directors172
4.7	Lead independent director 173
5.	Handling of corporate information 173
6.	Internal committees to the Board (as per Art. 123-bis, par. 2, letter d) CFA)174
7.	Appointments committee175
8.	Remuneration committee175
9.	Remuneration of directors 176
10.	Control and risks committee 176
11.	Internal control and risk management system 177
11.1	Director in charge of the internal control and risk management system182
11.2	Internal audit manager 182
11.3	Organisation model pursuant to legislative decree 231/2001 183
11.4	Independent audit firm185
11.5	Executive officer for financial reporting185
11.6	Coordination of parties involved in the internal control and risk management
	system 185
12.	Related party transactions186
13.	Appointment of Statutory Auditors 187
14.	Composition and operation of Board of Statutory Auditors (as per Article 123-bis,
	paragraph 2, letter d) CFA)189
15.	Relations with shareholders192
16.	Shareholder Meetings (as per Article 123-bis, paragraph 2, letter c), CFA)192
17.	Changes subsequent to year-end194

Corporate governance and ownership structure report

GLOSSARY

Italian Stock Exchange: Borsa Italiana S.p.A.

Code/Self-Governance Code: the Self-Governance Code of listed companies approved in March 2011 by the Corporate Governance Committee and promoted by Borsa Italiana S.p.A., ABI, Ania, Assogestioni, Assonime and Confindustria, available to the public on the Borsa Italiana website www.borsaitaliana.it.

Civil code: the civil code.

Board of Statutory Auditors: the Board of Statutory Auditors of the Issuer.

Board: the Board of Directors of the Issuer.

Issuer or ZV or the Company: Zignago Vetro S.p.A.

Year: Financial year 2016, to which the Report refers, therefore the year ending December 31, 2016.

Regulation Instructions: the Instructions to the Regulations for Markets organised and managed by Borsa Italiana S.p.A..

Stock Exchange Regulation: the Regulation for Markets organised and managed by Borsa Italiana S.p.A..

Issuers` Regulation: the Issuers' Regulation issued by Consob resolution No. 11971 of 1999 (as subsequently amended), concerning the governance of the issuer.

Market Regulations: the Market Regulations issued by Consob resolution No. 16191 of 2007 (as subsequently amended), concerning the governance of the markets.

Report: the corporate governance and ownership structure report which the company must prepare as per Art. 123-bis CFA.

By-Laws: the By-Laws of the Company in force at the date of the Report.

CFA: Legislative Decree of February 24, 1998, No. 58 and subsequent amendments and additions.

1. PROFILE OF THE ISSUER

The present Report, (hereafter the "Report"), prepared in compliance with the obligations for listed companies on the Mercato Telematico Azionario, organised and managed by Borsa Italiana S.p.A. (hereafter "Borsa Italiana"), illustrates the corporate governance system of Zignago Vetro S.p.A (hereafter "Zignago Vetro" or the "Company" or the "Issuer"), whose general guidelines are the subject of the present Section 1.

The corporate governance structure of Zignago Vetro is a traditional system comprising of a Board of Directors and a Board of Statutory Auditors; an audit is undertaken by an independent audit company in accordance with law. The Company, as much as possible in line with the recent regulations introduced and with the principles contained in the Self-Governance Code, has adopted the following governance structure:

• The Shareholders' Meeting;
• Board of Directors;
• Control and Risks Committee;
• Remuneration Committee;
• Committee for Transactions with Related Parties
• Lead Independent Director;
• Board of Statutory Auditors;
• Independent Auditors;
• Supervisory Board;
• Executive Officer for financial reporting;
• Internal Audit Manager;
• Director in charge of the Internal Control and Risk Management System.

Shareholders' Meetings

The Shareholders' Meeting represents all of the shareholders and is called in accordance with the provisions of law and regulations for companies with listed shares to pass motions reserved for them by law or by the Company By-Laws.

Board of Directors

The central role in planning the strategy of the Company is attributed to the Board of Directors which, in accordance with article 15 of the By-Laws is composed of between 5 and 15 members. The Shareholders' Meeting decides the number of members on the Board of Directors, their appointments within the above-mentioned limits and the duration of office, which cannot be more than 3 years. The offices held by the directors appointed conclude on the date of the Shareholders' Meeting called for the approval of the financial statements of the final year of office and they may be re-elected.

The appointment of the Board of Directors must occur through the voting of slates, which allows the minority shareholders to elect at least one director. The minimum shareholding required for the presentation of the slate of candidates is 2.5% of the ordinary shares, or where otherwise established by Consob with regulations taking into consideration the capitalisation of the share float and of the share ownership of listed companies. Each slate must indicate at least one independent candidate in possession of the necessary legal requisites, or 2 in the case of a Board of Directors which is composed of more than 7 members.

The Board of Directors, in accordance with Article 17 of the By-Laws, on March 22, 2007, has set up a Control and Risks Committee (previously called the Internal Control Committee) and a Remuneration Committee.

Control and Risks Committee

The Control and Risks Committee is composed of three non-executive directors, with sufficient accounting, financial and risk management experience, of which two are independent and have the duty, among others, to identify and evaluate the business issues and risks and carry out the consultative and prepositional functions required by the Self-Governance Code.

Remuneration Committee

The Remuneration Committee is composed on three non-executive Directors, with an adequate knowledge and experience of finance and remuneration policies, of which two independent and has the duty to formulate proposals with regard to the remuneration of Chief Executive Officers and those who hold particular offices.

Lead Independent Director

As per Article 2 of the Self-Governance Code, the Company has designated a lead independent director. The other non-executive directors, and in particular the independent directors, report to the lead independent director, for a better contribution to the activities and the functioning of the Board of Directors.

Board of Statutory Auditors

The Board of the Statutory Auditors verifies, among other issues (i) compliance with law and the By-Laws, (ii) respect of the principles of correct administration and in particular on the adequacy of the organisational structure of the Company, of the internal control system as well as the administration and accounting structure and its ability to correctly represent the operational events and (iii) the method for establishing corporate governance regulations which the company declares it is in observance of.

The functions in accordance with law are reserved to the Statutory Auditors. In accordance with article 20 of the By-Laws, the Board of Statutory Auditors consists of three Statutory Auditors and two alternate auditors, shareholders or non-shareholders. Each of the members of the Board of

Statutory Auditors must possess the honourability and professionalism requisites and be independent in accordance with law.

The appointment of a Statutory Auditor and an Alternate Auditor, in accordance with the By-laws (Article 20), is reserved for the minority slate of Shareholders with a minimum holding of at least 2.5% of ordinary shares or an alternative amount established by Consob, taking account of the capitalisation and Shareholder structure of listed companies. The statutory auditor elected by the minority slate is elected the Chairman of the Board of Statutory Auditors.

Legal-required audit

The legally-required audit is carried out by an independent audit firm in accordance with applicable regulations, appointed by the Shareholders` Meeting on the reasoned proposal of the Board of Statutory Auditors. The independent auditors who carry out the audit of Zignago Vetro also carry out the audit of the subsidiary companies.

Supervisory Board

The Supervisory Board, appointed by the Board of Directors, has the responsibility to ensure the Organisational, Management and Control Model pursuant to Legislative Decree 231/2001 is adequate and efficient, effective and updated.

Executive Officer for Financial Reporting

The executive officer for the financial reporting, among other matters, has the responsibility to implement adequate administrative and accounting procedures for the preparation of the parent company accounts, the consolidated financial statements and all other financial documents, certifying, together with the appointed boards, the adequacy and application of these procedures and that the accounting information including interim reports correspond to the underlying accounting documents, records and accounting entries.

Internal Audit Manager.

The Internal Audit Manager is charged with, among other issues, establishing that the Internal Control and Risk Management System is functional and adequate, in addition to verifying the functionality and appropriateness of the Internal Control and Risk Management System.

Director in charge of the Internal Control and Risk Management System (previously called the Executive responsible to oversee the Internal Control System).

The Director in charge of the Internal Control and Risk Management System ensures the correct functioning of the internal control system, and among other matters, proposes to the Board of Directors the appointment and revocation of the Internal Audit Manager position, identifying the principal company risks and implementing the guidelines outlined by the Board of Directors.

He/she may also request the Internal Audit Manager to carry out verifications on the specific operating areas and on compliance with the internal rules and procedures and reports promptly to the Control and Risks Committee (or the Board of Directors) in relation to problem issues emerging in the course of their activities or which they have however become aware of in carrying out their duties.

The present Report and all related documents may be downloaded from the Company website at www.gruppozignagovetro.com, "Investors" section.

2. DISCLOSURES ON SHAREHOLDERS (ARTICLE 123, PARAGRAPH 1 OF THE CONSOLIDATED FINANCE ACT)

The present Section 2 is also prepared in accordance with article 123-bis of the Finance Act. We report that: (a) the disclosures required by Article 123-bis paragraph 1, letter i) of the CFA are illustrated in the section of the Report concerning Directors' remuneration (section 9); (b) the disclosures required by Article 123-bis paragraph 1, letter l) of the CFA are illustrated in the section concerning the Board of Directors (section 4.1); (c) the disclosure required by the above provision and not reported upon in the present Section 2 are not applicable to the Company.

a) Shareholders (as per Article 123-bis, paragraph 1, letter a), CFA)

The share capital is Euro 8,800,000, entirely subscribed and paid in, and is composed of 88,000,000 ordinary shares having a nominal value of 0.10 Euro each.

As illustrated in the following table, at the Reporting date no special classes of share had been issued, such as shares without voting rights or limited voting rights, nor other financial instruments which attribute the right to undertake newly issued shares.

SHARE CAPITAL STRUCTURE
	No. of shares	% of share capital	Listed	Rights and obligations
Ordinary shares	88.000.000	100%	35% MTA market - STAR	-
Shares with multiple votes	-	-	-	-
Shares with limited voting rights	-	-	-	-
Shares with privileged voting rights	-	-	-	-
Other	-	-	-	-

No financial instruments allocating the right to subscribe to newly issued shares, such as convertible bonds and/or warrants have been issued.

b) Restriction on the transfer of shares (as per article 123-bis, paragraph 1, letter b), CFA)

At the date of the present Report, the shares of the Company are freely transferable by a deed between individuals or by succession following death and are subject to the rules for shares issued by listed companies in Italy.

c) Significant holdings (as per article 123-bis, paragraph 1, letter c), CFA)

At the date of the present Report, and based on the results of the Shareholders' Register and communications received in accordance with article 120 of the Finance Act, the following parties hold at least 3% of the share capital, directly or indirectly:

Shareholder	Direct shareholder	Number of ordinary shares held	% of share capital	% of voting capital
Zignago Holding SpA;	Zignago Holding SpA;	57,200,000	65.0%	65.0%
PFC Srl	PFC Srl	2,963,374	3.3675	3.3675

d) Shares which confer special rights (as per article 123-bis, paragraph 1, letter d), CFA)

At the date of the present Report, all of the Company's shares are nominative, freely transferable and indivisible and each - except where indicated below - has a right to one vote at the ordinary and extraordinary Shareholders' Meeting of the Company, as well as other equity and other administrative rights, in accordance with law and the applicable By-Laws.

On April 28, 2015, the Shareholders' Meeting of Zignago Vetro amended Article 7 of the Company's By-Laws in order to provide for shares with increased voting rights (loyalty shares), as established and governed by Article 20, first paragraph of Legislative Decree No. 91 of June 24, 2014, converted into Law No. 116 of August 11, 2014), whereby against enrolment of the shareholder in the register kept by the Company in relation to a certain number of shares, and following the conclusion of the maintenance of these shares for a period of 24 months, the shareholder has double voting rights for all such shares.

In the subsequent meeting of July 30, 2015, the Board of Directors approved the Regulation concerning shares with increased voting rights, which governs, among other matters, the manner of requesting enrolment in the special list established under Article 127-quinquies, paragraph 2 of the CFA. Further details are available on the Company website www.gruppozignagovetro.it/ Investors section/Increased Voting Rights.

At the Reporting date, there were 88,000,000 Zignago Vetro shares, corresponding therefore to 88,000,000 voting rights at Ordinary and Extraordinary Shareholders' Meetings of the Company.

In addition to that indicated above in relation to majority voting, the Company has also not issued shares with special rights, privileges or restrictions at the date of the present report and has not issued securities which confer special control rights.

e) Voting mechanism (as per Article 123-bis, paragraph 1, letter f), CFA)

At the date of the present Report, there are no shareholding agreements with employees in relation to the share capital of the company.

f) Voting restrictions (as per article 123-bis, paragraph 1, letter f), CFA)

At the date of the present report, there are no restrictions on voting rights.

g) Shareholder agreements (as per article 123-bis, paragraph 1, letter g), CFA)

At the date of the present Report, the share capital of Zignago Vetro is held 65% by Zignago Holding S.p.A. (hereafter "Zignago Holding"), with the current shareholders of Zignago Holding having signed a shareholder Agreement (the "Agreement").

The parties subject to the Agreement are the shareholders of Zignago Holding: GA.MA. S.r.l. ("GA.MA."), MARVIT S.r.l. ("MARVIT"), LIBRA S.r.l. ("LIBRA"), LUMAR S.r.l. ("LUMAR") and Koris Italia S.r.l. ("Koris") (jointly the "Zignago Holding shareholders"), in addition to Gaetano Marzotto, Stefano Marzotto, Nicolò Marzotto and Luca Marzotto (hereafter, together with the shareholders of Zignago Holding, the "Parties").

Shareholder
	Zignago
	Holding share
GA.MA (1)	19. 484%
MARVIT (2)	23.512%
LUMAR (3)	24.569%
LIBRA (4)	23.765%
Koris (5)	8.670%
TOTAL	100.00%

The financial instruments of Zignago Holding held by shareholders of Zignago Holding are as follows:

(1) The share capital of GA.MA. S.r.l. of Euro 10,383.36 is 49% held by Gaetano Marzotto and for the remaining 51%, jointly and in equal co-ownership, by Lavinia Marzotto, Matilde Marzotto and Giacomo Marzotto.

(2) The share capital of MARVIT S.r.l. of Euro 98,641.92 is held 25% by Stefano Marzotto and for the remaining 75% by Vittorio Emanuele Marzotto, Alessandro Marzotto and Sebastiano Marzotto, jointly and in equal shares.

(3) The share capital of LUMAR S.r.l. of Euro 10,400.00 is held for a nominal amount of Euro 10,296.00 by Luca Marzotto and for a nominal amount of Euro 104.00 by Nicolò Marzotto. (4) The share capital of LIBRA S.r.l. of Euro 11,000.00 is held for a nominal amount of Euro 10,890.00 by Nicolò Marzotto and for a nominal amount of Euro 110.00 by Luca Marzotto. (5) The share capital of Koris Italia S.r.l. of Euro 93,600.00 is held for a nominal Euro 31,200.00 by Cristina Marzotto, for a nominal Euro 31,200.00 by Margherita Marzotto and for a nominal Euro 31,200.00 by Maria Rosaria Marzotto.

The Agreement, originally signed on July 11, 2006 and subsequently amended on December 19, 2008 and renewed tacitly on July 11, 2009, July 11, 2012 and latterly renewed on July 11, 2015, was undertaken between, among others, FIMIZ S.r.l. ("FIMIZ") and the shareholders of FIMIZ and concerned, among other issues, the conduct rules and regulations which govern the transactions between the shareholders of FIMIZ, as well as the Corporate Governance regulations of FIMIZ, and through this company of Zignago Holding (whose share capital, at the date of first signing, was entirely held by FIMIZ).

On December 17, 2009, the reverse merger deed (the "Merger"), under which FIMIZ was incorporated into Zignago Holding, with effectiveness from December 31, 2009, whose share capital before the Merger was entirely held by FIMIZ (and which post Merger was held by the former shareholders of FIMIZ based on the shareholdings indicated in the table above).

Therefore on December 21, 2009, the shareholders of FIMIZ signed a private contract establishing that the shareholder agreements contained in the Agreement relating to the corporate governance of FIMIZ must concur with the corporate governance of Zignago Holding (due to the discontinuation of FIMIZ as a result of the Merger), for the entire duration of the Agreement. Except for that relating to the Merger, the Agreement remains in force and fully effective without amendment of any of the conditions contained therein.

The Agreement became effective on July 11, 2006 with an original duration of three years. Upon expiry, the Agreement renews automatically for three years with the exception of the case in which one of the Parties revokes the renewal through sending a written communication to the other Parties at least six months before the expiry of the relative term. On first expiry on July 11, 2009, the agreement was tacitly renewed for a period of three years; this period was then tacitly extended on July 11, 2012 for a further period of three years and latterly on July 11, 2015 for a further 3 years.

h) Change of control clause (as per article 123-bis, paragraph 1, letter h), CFA)

The Company or its subsidiaries have not stipulated significant agreements that are effective or would be modified or discharged in the case of a change in control of the Issuer.

i) Power to increase the share capital and authorisation to purchase treasury shares (as per Article 123-bis, paragraph 1, letter a), CFA)

The Company By-Laws do not permit the Board of Directors to increase the share capital in accordance with Article 2443 of the civil code.

The Shareholders' Meeting of April 28, 2016 authorised, following revocation of the motion passed by the Meeting of April 28, 2015 for the part not executed, the Board of Directors of the Issuer, and on its behalf the Chairman including proxies nominated by him, pursuant to Article 2357 of the Civil Code, to acquire treasury shares of the Company, for the amount, price and terms and conditions as illustrated below:

• the purchases may be made on one or more occasions, within 18 months from the date of the shareholders' meeting resolution and within the limits of the available reserves and distributable profits from the last approved financial statements and will be accounted in accordance with the provisions of law and applicable accounting principles;
• the purchase price of each share may not be 20% above or below the share price recorded on the Stock Exchange in the trading day prior to each operation;
• the maximum number of shares purchased cannot have a nominal value, including any shares held by Subsidiary companies, exceeding one-tenth of the share capital;
• the purchase of shares must be made in compliance with the current regulations for listed companies and thus in accordance with article 144 - bis of Issuers' Regulation, article 132 of the CFA and the Stock Exchange Regulations and any other regulation applicable including those of the EU Directive 2003/6 of January 28, 2003 and relative European Union and National legislation and EU Regulation No. 2273/2003 of December 22, 2003,

The same Shareholders' Meeting of Zignago Vetro, in ordinary session, also decided, among other matters, to:

a) authorise the Board of Directors, in accordance with article 2357-ter, first paragraph of the Civil Code, to utilise all or part, without time limits, of the shares acquired also before exhausting the purchases; the shares may be transferred in one or more tranches, including through a public offer and/or to the shareholders, on regulated markets and/or non-regulated markets, or outside of the stock exchange, also through a public offer and/or an offer to shareholders, on regulated and/or unregulated markets, or outside the stock exchange, on regulated and/or unregulated markets, institutional placement, placement of warrants, or as payment for acquisition or of public exchange offer, at a price not higher than 20% above the share price recorded on the trading day preceding each operation; however these price limits will not be applied where the sale of the shares is to employees, including management, executive directors, and consultants of Zignago Vetro and its subsidiaries in relation to Incentive Stock Option plans;

• b) authorise the Board of Directors, in accordance with article 2357-ter, third paragraph of the Civil Code, to carry out all accounting registrations considered necessary or appropriate, in relation to the treasury shares operations, in accordance with that required by law and the applicable accounting principles; in addition to
• c) confer to the Board of Directors, and on its behalf to the Chairman, all powers necessary to undertake the purchases and in any case to implement the above motions, including through attorneys where necessarily appointed, complying with any requests by the relevant authorities.

In accordance with article 144-bis of the Issuers' regulation, the Company, on April 28, 2016, communicated to the public the details of its buy-back programme.

At December 31, 2016, the Company held in portfolio 1,421,354 treasury shares for a total investment of Euro 5,027 thousand.

The Board of Directors, in the meeting of March 15, 2017, decided to propose to the Shareholders' Meeting the renewal of the authorisation to purchase and utilise the treasury shares at the same terms and conditions as that decided by the previous Shareholders' Meeting.

l) Direction and co-ordination activities (as per Article 2497 of the Civil Code)

Zignago Vetro is not subject to direction or control by Zignago Holding and operates autonomously and with entrepreneurial independence of its holding company Zignago Holding. Zignago Vetro avails of some services supplied by Zignago Holding and of its subsidiary companies, at market conditions and for reasons of technical, economic and commercial benefit.

* * *

The information required by Article 123-bis, first paragraph, letter i) of the CFA (indemnities of directors in the case of dismissal and termination of employment following a public purchase offer) are set out in the section of the report concerning director's remuneration.

The information required by article 123-bis, first paragraph, letter l) of the CFA (appointment and replacement of directors and amendments to the by-laws) is illustrated in the section of the Report dedicated to the Board of Directors.

3. COMPLIANCE

The Company adopts the Self-Governance Code in substantial compliance with the applicable regulations.

The sections below disclose procedures implemented by the Company or the amendments which the Company is currently implementing in relation to the Organisational Model outlined in the Self-Governance Code, accessible on the website www.borsaitaliana.it, or the reasons for which the Company has adopted differing solutions.

The present Report and all related documents may be downloaded from the Company website at www.gruppozignagovetro.com "Investors" section.

The Issuer and it strategic subsidiaries are not subject to laws in force outside Italy which affect the corporate governance structures of the Issuer.

4. BOARD OF DIRECTORS

4.1. APPOINTMENT AND REPLACEMENT (as per article 123-bis, paragraph 1, letter l), CFA)

The Board of Directors, in accordance with Article 15 of the By-Laws is composed of between 5 and 15 members, including the Chairman, with the number of members of the under-represented gender matching at least the regulatory required minimum in force.

The Shareholders' Meeting decides the number of members on the Board of Directors, their appointments within the above-mentioned limits and the duration of office which cannot be more than 3 years. The offices held by the directors appointed conclude on the date of the Shareholders' Meeting called for the approval of the financial statements of the final year of office and they may be re-elected. The Shareholders' Meeting can change the number of directors during the course of its mandate, within the limits set out above and in the manner that is described as follows; the mandate of these directors ceases with that of the other directors previously appointed.

Article 15 of the By-Laws of the Issuer, in relation to the appointment and replacement of the Board, and/or its members, establishes that the election of members takes place on the basis of slates of candidates in the manner outlined below, in order to ensure that minority shareholders may elect at least one Director and in compliance with the applicable regulations in relation to gender balance. Shareholders who represent at least 2.5% of the paid-in and subscribed share capital at the date of the presentation of the slate can present a slate of candidates with no more candidates than those to be elected, progressively numbered. This quota is in line with that established by Article 144 quarter of the Issuer Regulations. The call notice will indicate the holding required to present slates.

Each shareholder may present or be a candidate on only one slate; in case of breach, they are excluded from all slates. Shareholders belonging to the same shareholder agreement as per Article 122 of the CFA and subsequent modifications and additions, the parent company, subsidiary companies and those subject to the common control, also in the case in which they act through nominees or trust companies, may present and vote on only one slate. The votes in breach of this are not attributed to any slate. Each candidate can be presented only on one slate at the risk of being declared ineligible.

The slates shall be filed at the Company's registered office at least 25 (twenty five) days prior to the date established for the Shareholders' Meeting in first call or within a differing minimum timeframe established by applicable regulation. The call notice will indicate at least one means of distance communication of the filing of slates which enables the identification of those presenting or involved in the presentation of slates. Ownership of the minimum shareholding necessary to present a slate must be declared in the manner and under the terms and conditions established by the existing law and regulations.

Together with each slate, within the terms indicated above, the following must be filed (i) information relating to the identity of the shareholders presenting the slate and their shareholding; (ii) declarations that the individual candidates accept their candidature and attest to the inexistence of causes of ineligibility and of incompatibility and the existence of the requisites required by regulations in force for the assumption of office, including any possible declarations of independence required in accordance with the Self-Governance Code and regulations in force, and (iii) the curriculum vitae of each candidate, with indication of offices held.

Each slate must contain and expressly indicate the candidature of at least one party, or two in the case of a Board of Directors composed of more than seven members, being independent in accordance with article 148, paragraph 3, of the Finance Act and with article 147-ter, paragraph 4, of the Finance Act (hereafter "Independent Directors ex article 147-ter").

Each slate presenting a number of candidates equal to or above three must present a number of candidates from the underrepresented gender which ensures, within the slate itself, compliance with the regulatory gender quota in force.

The candidates elected shall be those on the two slates that have obtained the higher number of votes, with the following criteria:

• a) From the slate which obtained the highest number of votes (hereafter the "Majority Slate") all of the members of the Board of Directors are elected except one, as established by the Shareholders' Meeting; the candidates are elected, up to the number required from the slate;
• b) From the slate which obtained the second highest number of votes and not connected in any way, even indirectly, with the shareholders who presented or voted on the majority slate (hereafter the "Minority Slate"), one director is elected, who is the candidate indicated in the first position on the same slate; however, when from the Majority Slate

one or two Independent Directors in accordance with article 147-ter cannot be elected, the first person on the Minority Slate, (or the first two, in the case of a Board of Directors composed of more than seven members) is elected as an Independent Director in accordance with article 147-ter indicated in the Minority Slate.

The candidate listed in first position on the Majority Slate is elected as Chairman of Board of Directors.

When two slates obtain an equal amount of votes, a new vote is taken by the Shareholders' Meeting, considering only the leading two slates. The same rule will apply in the case of parity between the slates with the second highest number of votes.

If under the above procedure the composition of the Board of Directors does not permit compliance with the gender balance regulation, the quota of votes to be attributed to each candidate which would result in election on the various slates, divided by the number of votes, must be calculated.

Obtained from each slate for the ordering of each of the above stated candidates. The results thus attained are listed in decreasing order. The candidate of the over-represented gender with the lowest quota among the candidates which will be elected is replaced by the first unelected candidate, belonging to the under-represented gender indicated on the same slate of the replaced candidate, in compliance with the minimum number of Independent Directors. In the case in which candidates from other slates have obtained the same quota, the candidate of the slate with the highest number of Directors is replaced. If the replacement of the candidate of the overrepresented gender with the lower number of votes on the slate does not allow the reaching of the minimum threshold established by the Gender Balance Regulation, the replacement operation indicated above is carried out also in relation to the candidate of the over-represented gender with the penultimate number of votes and thereafter proceeding, where necessary, to the candidate above. In all cases in which the above-stated procedure is not applicable, the replacement is carried out by the Shareholders' Meeting based on statutory majority.

Should only one slate be presented, the Shareholders' Meeting shall vote on it and should this slate obtain the statutory majority, the candidates listed in progressive order up to the number fixed by the Shareholders' Meeting shall be elected as Directors, and however in compliance with the applicable regulation concerning gender balance and the required number of Independent Directors. The candidate listed in the first position is elected as the Chairman of the Board of Directors.

For the inclusion of the Directors to be elected, consideration is not taken of the slates which have not obtained at least half of the votes required by the By-Laws for the presentation of the slates.

In the case of no slates being presented, the Shareholders' Meeting appoints the Board of Directors by statutory majority.

The Independent Directors in accordance with article 147-ter of the CFA who, after their appointment, are no longer independent, immediately must communicate such to the Board of Directors and, in every case, relinquish office.

In the case of the termination of office, for any reason, of one or more Directors, the replacement is made in accordance with law, without the necessity to appoint a Director from the slate of the Director that resigned from the majority slate or from the minority slate, ensuring the presence on the Board of Directors of the required number of members considered independent in accordance with the applicable regulations, in addition to compliance with that established and in force in relation to gender balance, considering that if the majority of the members of the Board of Directors for any reason is not in place, the entire Board is considered lapsed, the Shareholders' Meeting must be called without delay by the remaining Directors in office to reincorporate the Board.

The Board of Directors, in consideration of the structure and the size of the Group, has not adopted retirement plans for Executive Directors, considering the methods for replacement adapted appropriate to ensure continuity and certainty in operational management.

Currently, the Company has not set up an Appointment Committee as the Board of Directors considers that such committee is substantially not necessary for considering the Company's profile. The Board of Directors periodically reviews this choice.

The table attached to the present Report sub 1 indicates the Independent directors in accordance with article 147-ter of the CFA and those also considered independent in accordance with article 3 of the Self-Governance Code.

4.2. COMPOSITION (as per article 123-bis, paragraph 2, letter h), CFA)

Article 15 of the By-Laws establishes that the Company is governed by a Board of Directors composed of a minimum of 5 and a maximum of 15 members, including the Chairman, with members of the under-represented gender holding at least the minimum number required by applicable law and regulations. At least one of the members of the Board of Directors, or two if the Board of Directors comprises of more than seven members, must be considered independent in accordance with Article 148, paragraph 3 of the CFA.

The Shareholders' Meeting of April 28, 2016 appointed the Board of Directors, establishing the number of members at 12, who will remain in office until the approval of the financial statements at December 31, 2018. All of the members were elected from the only slate presented by the majority shareholder Zignago Holding S.p.A..

This slate included the following candidates:

• Paolo Giacobbo, born in Vicenza on April 21, 1949;

• Gaetano Marzotto, born in Valdagno (VI) on 21 December 1952;

• Stefano Marzotto, born in Valdagno (VI) on April 24, 1955;

• Nicolò Marzotto, born in Rome on September 28, 1968;
• Luca Marzotto, born in Rome on January 9, 1971;
• Ferdinando Businaro, born in Padova on February 26, 1965;
• Alessia Antonelli, born in Rome on May 22, 1971;
• Giorgia Gallo, born in Turin on April 2, 1960;
• Daniela Manzoni, born in Udine on February 8, 1969;
• Manuela Romei, born in Ancona on February 15, 1943;
• Franco Grisan, born in Pola on June 24, 1942;
• Franco Moscetti, born in Tarquinia on October 9, 1951.

All of the candidates on the only slate presented were elected by a majority of those present. In particular, the candidates were elected with 61,689,504 favourable votes, comprising 99.79% of votes cast, with 131,494 opposing shares, comprising 0.21% of votes cast. The share capital present with voting rights totaled 71.97% of the entire share capital.

Of the 42 directors appointed, 5 are independent. The Board evaluates annually the independence of the Directors, based on the information provided by the parties. The presence of five independent directors has the objective of achieving the greatest possible "best governance" through debate and dialogue between all of the Directors. The contribution of the independent directors in addition permits the Board of Directors to verify whether adequate independent opinion exists in cases of potential conflicts of interest of the Company with the controlling shareholder.

The composition of the Board of Directors and of the Committees is reported in Table 1, along with the number of meetings and attendances, while Attachment 1 contains the profile of each director. The offices held by each Director at December 31, 2016 on Boards of Directors or Boards of Statutory Auditors of listed and non listed companies are reported in Attachment 2.

The Board of Directors has not defined the general criteria relating to the maximum number of offices of administration and control in other companies that may be considered compatible with the proper carrying out of their duties as directors of the Issuer as no circumstances have arisen which necessitates such a requirement.

In order to remain fully briefed on the sector in which the company operates, the Board periodically receives information and updates from the Issuer, on the principles of correct management of the risks and on sector regulations also through material prepared by the company. In the meetings of the Board of Directors the directors have undertaken detailed discussions on significant matters, such as performances on the various markets in which the Company and Group operates, including through meetings with the participation of some senior management.

Following the Shareholders' Meeting appointments resolution of April 28, 2016 for the appointment of the new Board of Directors in replacement of the Board concluding their mandate with the approval of the 2015 Annual Accounts, during the year Mr. Lino Benassi, Mr. Alberto Corporate governance and ownership structure report

Faggion, Ms. Chiara Mio, Mr. Maurizio Sobrero and Mr. Giovanni Tamburi ceased to be directors of the company on the expiry of their mandate.

The composition of the Board of Directors of the Company has not changed since year-end.

4.3. ROLE OF THE BOARD OF DIRECTORS (as per article 123-bis, paragraph 2, letter d), CFA)

Article 16 of the By-Laws provides that the Board of Directors is convened in the place indicated on the convocation notice, even if a place differing from the registered office, but in Italy or in another European Union country, whenever the Chairman or the Vice-Chairman if nominated, or the Chief Executive Officer if nominated, considers it necessary or when it is requested in written form by at least three of its members. The Board of Directors can be convened by the Board of Statutory Auditors, also individually, in accordance with article 151 of the Finance Act.

In accordance with the same article, the convocation of the meetings can be through telegram, telefax, or electronic message sent to each member of the Board of Directors and each member of the Board of Statutory Auditors at least three calendar days before the meeting. In cases of urgency, the By-Laws establish that the convening can be carried out, in the same manner, with notice of at least one day. In any case, also if the above-stated formalities are not observed, the Board of Directors is considered validly constituted when all of the Directors and all of the Statutory Auditors are present.

The third paragraph of the same article provides moreover for the possibility that the meetings of the Board of Directors are held by teleconference or video-conference and is permitted on condition that all of the participants can be identified and that they can follow the discussions and intervene in real time in relation to the subject matters under discussion.

A meeting of the Board of Directors shall be validly constituted when the majority of its members in office are present. Resolutions shall be adopted by a majority of Directors present; in case of a tie, the vote of the person chairing the meeting shall be decisive.

The meetings are chaired by the Chairman or, in his absence or impediment, by the Vice Chairman if appointed. In the case of absence or impediment of the Vice Chairman, the meetings are chaired by the most senior director or by seniority established by age.

The minutes of the Board meetings are prepared by the secretary of the Board of Directors and signed by the Chairman of the meeting and by the secretary.

The Board of Directors must be convened at least four times during the year on the occasion of the preparation of the accounting results for the period. In 2016, the Board of Directors held 8 meetings with a duration of between twenty minutes and five hours and twenty minutes.

Five meetings are scheduled for the current year.

In relation to the board meetings, the Chairman organises the duties of the Board of Directors. For this reason, the Board of Directors and Board of Statutory Auditors, in a timely and adequate manner, are provided the documentation and the information necessary to ensure a correct and full

evaluation of the facts to be examined by the Board, to enable them to express with full disclosure and knowledge, opinions on the matters provided for their examination upon which decisions are made and ensures that the matters on the Agenda are allocated the time necessary for a constructive debate. For these reasons, the necessary information, as well as that relating to the principal regulatory and legislative developments and updates regarding the Company and the corporate boards, are issued to the directors in a timely manner before the meeting, except in the case where other requirements limit the information provided (in particular urgent cases and for reasons of extreme confidentiality). During the year, information was provided in relation to all of the significant matters on the Agendas of the board meetings.

It is underlined that the Chief Executive Officer, in accordance with the consolidated practices of the Company, report extensively to the Board of Directors on the principal operations having a significant economic, equity and financial impact.

Parties other than board members may attend Board of Director meetings if invited. In particular, management of the Issuer and of the Group participate, whose presence assists greater understanding of the matters on the Agenda. A number of executives of the Issuer attended the meetings held in 2016.

In relation to the role of the Board of Directors, the powers of the Board of Directors, in accordance with article 17 of the By-Laws and with that established by the Self-Governance Code, relate to the ordinary and extraordinary management of the Company, extending to all acts which the Board considers necessary for the reaching of the corporate objectives, excluding only that which is reserved by law to the Shareholders' Meeting.

The matters at point 1.C.1 of the Self-Governance Code, not having been delegated to the CEO, are reserved for consideration by the Board of Directors. In particular, in accordance with the Self-Governance Code, the examination and approval of the strategic, industrial and financial plans of the Issuer and of the Group, the nature and levels of risk compatible with the strategic objectives of the Group, the Corporate Governance System of the Issuer, the adequacy of the organisational structure of the Company and of the structure of the Group which the Issuer heads, are reserved to the Board of Directors.

In accordance with Article 17, the Board of Directors is attributed the powers to: (i) deliberate on mergers in accordance with Articles 2505 and 2505 bis of the Civil Code; (ii) the establishment and closing of secondary offices; (iii) the reduction of share capital in the case of a decrease in the number of shareholders; (iv) the amendment of the by-laws in accordance with regulations; (v) attributing the right of representation of the Company to directors; (vi) the appointment of executives responsible for the preparation of the corporate accounting documents; (vii) the transfer of the registered office within the national territory.

Wherever reasons of urgency exist in relation to transactions with related parties not within the ambit of the shareholders' meetings or which must not be authorised by the meeting, the Board of Directors may approve these transactions with related parties, which may be carried out also

through subsidiary companies, in place of the normal procedures established in the internal procedure for transactions with related parties adopted by the company, although in compliance with and under the terms and conditions established by the same procedure.

The following areas are also reserved for the exclusive competence of the Board of Directors: (i) the appointment and revocation of office of the executive responsible for the preparation of the corporate accounting documents; and (ii) the verification that the executive responsible for the preparation of the corporate accounting documents may avail of sufficient powers and means for the exercise of duties attributed by law, as well as full conformity with the administrative and accounting procedures.

The Board of Directors, after examining the proposals by the relevant committee and the Board of Statutory Auditors, set the remuneration of the Chief Executive Officer.

In addition, the Board of Directors assesses the adequacy of the organisational, administration and general accounting system of the Issuer and of the subsidiaries with strategic relevance, prepared by the Chief Executive Officers, with particular reference to the internal control and risk management system and the management of conflicts of interest. In relation to the management of conflict of interests, the CEO, at least quarterly reports to the Board of Directors on operations in which the directors are found to be in a situation of potential conflict of interest.

In accordance with Article 1 and the relative Self-Governance Code criteria, the Board of Directors approved the governance system of the Company, resulting in, in particular, the delegation of powers and functions, including the establishment of internal and related committees to the Board, in addition to the internal procedural regulations relating to operations with related parties and in which a director has an interest.

The Board of Directors monitors the general performance of operations, taking into account, in particular, the information received from the executive directors, as well as periodically comparing the results with the budgets.

During the year no operations having significant strategic, economic and equity importance for the Issuer or its subsidiaries were undertaken.

The Board of Directors did not consider it necessary, in light of the structure of the Company and the internal boards, to consider the size, composition and functioning of the Board and its committees.

The directors are subject to the curtailment under Article 2390 of the civil code, except in the case where they are exonerated by the Shareholders' Meeting. At the date of the present report, the Shareholders' Meeting has not authorised exceptions to the competition prohibition.

4.4. EXECUTIVE BODIES

In accordance with Article 18 of the By-Laws, the representation of the Company in relation to judicial or administrative authorities and with third parties, as well as the corporate signature, lies with the Chairman of the Board of Directors as well as the Vice Chairman, and in a residual manner, to the Directors and the legal representatives to which the Board of Directors has delegated powers, within the limits of those delegations.

The Vice-Chairman Nicolò Marzotto exercises the function of Chairman in the case of the absence or impediment of this latter (appointed in the person of Paolo Giacobbo).

In accordance with article 17 of this By-Law, the Board of Directors' can delegate part of its responsibilities and powers, with the right of sub-delegation, including signature powers, to one or more of its members, determining the responsibilities and remuneration. The office of Chairman and Chief Executive Officer may be unified. The Board of Directors may also (i) institute an Executive Committee composed of members chosen from the Board including the Chairman, (ii) incorporate committees, comprised of members of the Board, of a consultative and/or propositional nature, (iii) appoint general directors, agents, attorneys and proxies in general for certain deeds or category of deeds chosen from among the employees of the Company or third parties.

As set out above, the By-Laws provide that the Board of Directors can establish committees, from members of the same Board, of a consultative and/or proposing nature, determining the number of members of these committees and the functions attributed to them, in accordance with regulations in force in relation to companies with shares listed on the regular markets.

The Board of Directors has set up a Control and Risks Committee, a Remuneration Committee and a Committee for Transactions with Related Parties.

The Board of Directors' meeting of April 28, 2016 conferred to the Chairman Mr. Paolo Giacobbo the following duties and responsibilities:

• to call the meetings of the Board of Directors and ensure that the members are provided, within a reasonable period in advance of the meeting (except in the cases of necessity and urgency), the necessary documentation and information to discuss the matters submitted for examination and approval;
• to co-ordinate the activities of the Board of Directors and direct the meetings of the board;
• express to the Board of Directors his opinion in relation to the objectives, policies and strategic organisational decisions (key roles and positions) of the Companies of the Group;

• within the strategies approved, to implement and supervise the introduction of new development initiatives of the Group, utilising for these purposes the organisational structures of the Company and external organisations within an approved budget;

• to represent the Company, where this power has not been conferred by the Board of Directors, at the Industry Confederation, with the Industrial Unions and the Chambers of Commerce and with local interest groups and organisations, participating at meetings and with the power to sign agreements;

• to oversee the implementation of the resolutions approved by the Board of Directors;
• to co-ordinate the financial communication activities of the Company;

The same Board of Directors' meeting of April 28, 2016 conferred to Mr. Paolo Griacobbo, as Chief Executive Officer, the following duties and responsibilities:

• to report to the Board of Directors on the management, operations and development of the Company and of the Group. Specifically, he is responsible for the results based on the objectives, strategies and policies approved;
• to ensure the timely and valid drawing up, for the purposes of the decisions of the Board of Directors, of strategic objectives (of portfolio, business etc.) and policies (human resources, financial resources etc.) for the management, operations and development of the Group;

The Chief Executive Officer, Mr. Paolo Giacobbo, was also allocated the following powers:

• purchase of raw materials, services and stock, agreeing prices and purchase conditions;
• sell company products, establishing the prices and sales conditions;
• purchase, sell or exchange, utilising the annual budget, by individual investment, approved by the Board of Directors, machinery and other mobile vehicles in general, purchase and sell vehicles establishing the conditions and the prices as well as pay the amounts for a value not above Euro 500 thousand;
• purchase, sell or exchange, machinery and other mobile vehicles in general, purchase and sell vehicles establishing the conditions and the prices, in necessary cases and with subsequent ratification by the Board of Directors, for a maximum non-authorised amount of Euro 700 thousand, approved on a case by case basis by the board;
• sign agreements, settle accounts and invoices, also as final settlement;
• sign with all appropriate clauses, including arbitration clauses, amend or settle contracts for the rental, transport, tender, granting of a loan, administration, or operation and concerning the presentation of services in general, mediation, commission, sending, agency and concession of sale and filing with the State administration, with public and private entities and in particular with the Railway Administration;
• undertake the necessary deeds for trade patents such as, for example purposes, the corrections, amendments, extension of confidentiality, divisions, proposed or resisted by opposing administrations, interferences, appeals and to complete any other necessary deed useful to seek, obtain or maintain trademarks, sign all necessary deeds for fulfilling that conferred above, appoint trade patent agents in Italy and abroad, conferring their relative powers;

• complete with the public administration, entities and public offices, all of the deeds and necessary operations to obtain concessions, licences and authorisations in general, signing, and settling as far as possible based on the applicable regulations, conventions, deeds and any other preliminary deeds of the above-mentioned provisions;

• fulfil obligations, including those related to production and consumption taxes and revenue and monopoly duties;

• deposit and withdraw amounts from banks, credit issuing institutions, also through third party cheques for liquidity and related needs and utilisation of credit lines granted to the Company, acquire or sell currencies relating to significant import or export operations, with total value not above Euro 500 thousand for each operation or a set of similar operations;
• represent, with power to sub-delegate, the Company at the Shareholders' Meetings of the investee Vetri Speciali SpA, including the exercise of all relative rights, powers or faculties of the Company, informing the Board of Directors of such at the first possible meeting;
• represent, with power to sub-delegate, the Company at the Shareholders' Meetings of the investee Vetreco SpA, including the exercise of all relative rights, powers or faculties of the Company, informing the Board of Directors of such at the first possible meeting;
• represent, with power to sub-delegate, the Company in the Shareholders' Meetings of companies in which a holding exists, with power to exercise all the Company's rights and faculties, with prior approval of the Board of Directors;
• sign and transfer amounts, receipts and transfers to banks for deposit in current accounts of the Company;
• sign all documentation relating to import and export operations;
• make any types of deposits and withdrawals from post offices, banks, credit institutions, Regional Tax Offices, at the central and local offices of the Cassa Depositi e Prestiti, customs, State and Private Rail Companies, transport and shipping companies etc.;
• receive from post, telegraph, custom, rail, transport and shipping companies, and in general any public office, or any company or factory, money orders, packages, letters, including registered, and insured with declarations of value, goods, money, etc., issuing acknowledgments for that received;
• pay or receive sums, receivables, interests, dividends, cheques and payment mandates from whoever issues them in favour of the Company;
• acquire, sale or exchange shares, holdings, bonds as well as holdings in Consortiums in companies and/or non commercial entities, with exclusion of holdings in subsidiary or associated companies, including fixed assets, in cases in which a resolution of the relevant Corporate Boards has been acquired, for amounts not above Euro 500 thousand;
• represent the Company at civil authorities or entities, administrative or legal of any level, as well as at the Revenue Office and every other Tax Office and in front of the Tax and Administrative Commissions of any type or level, presenting petitions, records, proceedings, declarations; propose and accept transactions (however within a limit of Euro 500 thousand per individual transaction), initiate proceedings, convene or appeal, proposing all of the deeds deemed necessary and represent the Company at creditor meetings, make proposals or approve debts in bankruptcies, approve agreements and request relative amounts, settle any amount or claim (although within a limit of Euro 500 thousand for single transaction or claim), agree arbitrary settlements, (although within a limit of Euro 500 thousand for single arbitrary agreement), including amicable settlements, including non-appealable, ensure the execution of judgements, defer, refer,

accept decisions, request enforcement and seizures or other deeds to ensure their execution, nominate attorneys for litigation, lawyers and experts, and revoke them, substitute them, and make election of domicile;

• represent the Company at the Regional Tax Offices and the central and local offices of the Cassa Depositi e Prestiti;
• disburse and accept bills of exchange, in Euro or in foreign currency to suppliers for payment of raw materials, machinery, inventories and auxiliary materials in general to satisfy company requirements;
• receive any types of grants from Ministries, Regions, Provinces and other national public bodies and European Union bodies;
• administrate the property of the Company signing and settling rental contracts;
• sign and settle contracts concerning the rental of property, within the operational requirements of the Company;
• authorise persons to use vehicles owned by the company in Italy and abroad and in any European State, in compliance also with applicable laws;
• employ, within the budget, staff under fixed term contracts with a maximum duration of 12 months, managers and white-collar and blue-collar staff;
• agree, within the budget, outsourcing contracts;
• agree, within the budget, one-off contracts or projects for a maximum value of Euro 100,000;
• sign, within the budget, trade union agreements with the trade union representatives and the workers' unions, as well as agreements with trade union management;
• confer and revoke by single act or category including those above, procure from third parties also from non-employees of the company.

The Chief Executive Officer Mr. Paolo Giacobbo also has the following powers, to be exercised with joint signature:

• purchase, sell or exchange, utilising the annual budget, by individual investment, approved by the Board of Directors, machinery and other mobile vehicles in general, purchase and sell vehicles establishing the conditions and the prices as well as pay the amounts for a value not above Euro 500 thousand, with joint signature of the Vice General Manager Mr. Ovidio Dri;
• request from banking institutes and sign loans of any type, also bills exchanged, within the current requirements of the Company with joint signature of the Chief Financial Officer Mr. Roberto Celot or the Legal Representative Mr. Alberto Faggion;
• deposit and withdraw amounts from banks, credit issuing institutions, also through third party cheques for liquidity and related needs and utilisation of credit lines granted to the Company, acquire or sell currencies relating to significant import or export operations, with total value above Euro 500 thousand for each operation or a set of similar operations, with joint signature of the Chief Financial Officer Mr. Roberto Celot or the Legal Representative Mr. Alberto Faggion;

• sign sureties in favour of third parties in the case in which the concession of the surety guarantee is previously approved by the relevant Company Boards, with joint signature of the Chief Financial Officer Mr. Robert Celot or the Legal Representative Mr. Alberto Faggion;

• cancel judicial and/or voluntary mortgages registered or to be registered in favour of the Company, against creditor positions of the same Company and subsequently settled, exonerating the Agreement of Property Registries from every responsibility in relation to the cancelation, with joint signature of the Chief Financial Officer Mr. Roberto Celot or the Legal Representative Mr. Alberto Faggion;

• sign and settle insurance contracts of any type, signing the relative policies with power also to settle and request, in the case of a claim, the relative indemnity, issuing acknowledgments to the competent authorities, settling any other indemnity due to third parties for any type of claim, with joint signature of the Chief Financial Officer Mr. Roberto Celot or the Legal Representative Mr. Alberto Faggion;
• purchase, sell or exchange shares, quotas, bonds and financial instruments in general, not comprising fixed assets, with joint signature of the Chief Financial Officer Mr. Roberto Celot and with the Legal Representative Mr. Alberto Faggion;
• purchase, sell or exchange shares, quotas, bonds as well as holdings in Consortium companies and/or non commercial Entities, with the exclusion of shareholdings in subsidiary and associated companies, including fixed assets, in the case in which prior approval is given by the Corporate Boards, for values above Euro 250 thousand, with joint signature with the Chief Financial Officer Mr. Roberto Celot or the Legal Representative Mr. Alberto Faggion;
• employ or dismiss, within the budget or approved programmes by the Board of Directors, executives with fixed term or long-term contracts, managers, white and blue collar workers, with long-term contracts or extending beyond 12 months, with joint signature of the Chief Financial Officer Mr. Roberto Celot or Mr. Michele Pezza;
• agree, within the budget, one-off contracts or projects for a maximum value of Euro 100,000, with joint signature of the Chief Financial Officer Mr. Roberto Celot or Mr. Michele Pezza.

The Chief Executive Officer Mr. Paolo Giacobbo may, in exercising the above stated powers, utilise qualified partners, whom however he must oversee.

Considering the powers delegated by the Board of Directors, the Chief Executive Officer, Mr. Paolo Giacobbo, qualifies as the person in charge of Company operations. Mr. Paolo Giacobbo is not subjected to any interlocking situations.

The Board has also delegated to the Chairman and Chief Executive Officer the functions of:

• manage, address and organise security aspects and workplace health, in all of the productive units and in the other work areas of the Company, and to attribute him the position of employer in accordance with Legislative Decree 81/2008 and subsequent amendments and additions, with mandate to put in place every act and function necessary to comply with applicable regulations;
• manage, address and organise all aspects in relation to environmental protection, with mandate to carry out every necessary act for the compliance with applicable regulations;
• manage, address and organise all aspects in relation to the protection of personal data held by the Company, with mandate to carry out every necessary act for the compliance with applicable regulations.

Corporate governance and ownership structure report

Disclosure to the Board of Statutory Auditors

The directors report to the Board of Statutory Auditors in a timely manner, and at least quarterly at the meetings of the Board of Directors, or also through written communication to the Chairman of the Board of Statutory Auditors on the activities carried out and on the most significant economic, financial and balance sheet operations carried out by the Company and by the subsidiary companies, in order to enable the Board of Statutory Auditors to evaluate if the operations decided upon and implemented conform with law and the By-Laws and are not broadly imprudent or in conflict with the motions undertaken by the Shareholders' Meeting or such as to compromise the value of the company. In particular, the Directors report on operations in which they have an interest, either on their own behalf or on behalf of third parties, or that are affected by any individual who directs and coordinates the operation.

At the date of the present Report, the Company has not set up an Executive Committee.

4.5. OTHER EXECUTIVE DIRECTORS

On April 28, 2016, the Board of Directors conferred to Mr. Stefano Marzotto the power to represent, with faculty to sub-delegate, the Company at the shareholders' meeting of the subsidiary Vetri Speciali S.p.A., including all related powers exercised by the Company, with prior approval of the Board of Directors.

4.6. INDEPENDENT DIRECTORS

The Board of Directors in the meeting of April 28, 2016 and subsequently on March 15, 2017 considered, based on the available information and taking account of the parameters established by the Self-Governance Code and the Stock Exchange Regulation Instructions, the Directors Lino Benassi, Ferdinando Businaro, Daniela Manzoni Suppiej, Chiara Mio, Manuela Romei, Alessia Antonelli, Giorgina Gallo and Franco Moscetti as independent. The number of independent Directors in comparison with the total number of Board members is in line with that established by the CFA and the Stock Market Regulation Instructions (Article 1.A.2.10.6). The review of independent standing was promptly announced in the press release of April 28, 2016 and March 15, 2017.

The Board of Statutory Auditors also verified the correct application of the assessment criteria and procedures adopted by the Board to evaluate the independence of its members.

During the year the independent directors held one meeting in the absence of the other directors. As far as the Issuer is aware, the Independent Directors, which within the slates for their appointment to the Board of Directors indicated their independence, are committed to maintain such independence throughout the Board mandate.

Corporate governance and ownership structure report

4.7. LEAD INDEPENDENT DIRECTOR

As per Article 2 of the Self-Governance Code, the Board of Directors appointed Mr. Franco Moscetti on April 28, 2016 as the Lead Independent Director, who is a non-executive director, and in particular one of the independent directors, which allows a greater contribution to the activities and the functioning of the Board of Directors.

The Board of Directors considered it beneficial to maintain the role of Lead Independent Director also on the renewal on the Corporate Boards (which occurred with approval of the 2015 Annual Accounts), in line therefore with that recommended by the Self-Governance Code. The Self-Governance Code recommends in fact the appointment of this role in order to ensure balance on the Board of Directors: The Lead Independent Director works with the Chairman in order to guarantee that the Directors be fully and immediately informed upon relevant matters. The Lead Independent Director consults with the Non-Executive Directors, and particularly the Independent Directors for a better contribution to the activities and the functioning of the Board.

The Lead Independent Director provides a point of reference and coordination for the petitions and contributions of non-executive Directors, improving the functioning of the Board of Directors, working together with the Chairman of the Board of Directors in order to ensure that Directors receive complete and timely information and has the power to call meetings of the independent Directors to discuss issues considered of interest in relation to the functioning of the Board and the management of the company.

During the year the Lead Independent Director, Mr. Franco Moscetti, coordinated where necessary and also opportune, the requests and the contributions of the non executive directors and in particular the independent directors.

5. HANDLING OF CORPORATE INFORMATION

In accordance with the principles contained in the Self-Governance Code, the Board of Directors of the Company adopted regulations for the handling of corporate information and the setting up of the relative register (so-called Insider Register), which regulates internal management procedures and the manner for the communication externally of documents and disclosure relating to the Company and its subsidiaries, with particular regard to confidential information. This regulation concerns: (i) preserve the secrecy of the confidential information, ensuring at the same time that the information provided to the market of the corporate data is correct, complete, adequate, timely and non selective; and (ii) regulate, in conformity with the combination proposed by article 115-bis of the Finance Act and 152-bis of the Issuers' Regulations, a procedure for the management of the register or information reported to anyone who, for working or professional

reasons or in the ambit of the functions carried out by the Company, regularly or occasionally accesses confidential information.

The Board of Directors on December 22, 2006 appointed Mr. Roberto Celot as the person responsible for the above-mentioned register. With regards to this, the person responsible reports to the Chairman of the Board of Directors with regard to the updating of the register and the criteria adopted for the management and research of the data which it contains.

In accordance with that contained in the Self-Governance Code, the Board of Directors of the Company adopted a regulation (Internal Dealing Code), which governs the information to be made public relating to the operations undertaken and the financial instruments issued by the Company by relevant parties and parties to them in accordance with Article 152 and subsequent of the Issuers' Regulations. This regulation provides for the so-called "black out period". This amendment was necessary in order to comply with one of the new clauses introduced by the Stock Exchange Regulation, from March 26, 2007 and immediately applicable and in order to satisfy one of the new requirements to maintain STAR segment qualification.

We report that, in accordance with the provisions of Executive Regulation (EU) 2016/347 of the Commission of March 10, 2016, which enacted (EU) Regulation 596/2014 of the European Parliament and Council of April 16, 2014 relating to market abuse, the company enacted the provisions introduced by the above-mentioned regulation, with prior illustration to the Board of the principal provisions introduced, while awaiting the definitive issue of the above-mentioned regulation in order to formalise the procedures.

During the year the company published 6 press releases in relation to internal dealing, and available on the company's website www.gruppozignagovetro.com, section "Investors", having received such communications in accordance with due procedure on the significant operations pursuant to Article 152-sexies and thereafter of the Issuers' Regulation.

6. INTERNAL COMMITTEES TO THE BOARD (as per Article 123-bis, paragraph 2, letter d) CFA)

The Board of Directors, in accordance with Article 17 of the By-Laws, on March 22, 2007, incorporated a Control and Risks Committee (previously the Internal Control Committee), which has the duty, among others, to identify and evaluate the business issues and risks and carry out the consultative and proposal functions required by the Self-Governance Code, and a Remuneration Committee, with the duty to formulate proposals regarding the remuneration of executive directors and those holding certain positions.

For further information in relation to the Remuneration Committee and the Control and Risks Committee, reference is made to the subsequent sections 159 and 10.

The Board of Directors of the Company, in the meeting of November 26, 2010, created a Committee for Transactions with Related Parties, with a significant role in the evaluation of the Transactions with Related Parties and in compliance with the above-stated procedure. This Committee has the duty to guarantee substantial correctness of the transactions with related parties, through the issue of an opinion on the interest of the company served through the specific transaction as well as the suitability and correctness of the conditions. For further information on the Committee for Transactions with Related Parties, reference should be made to section 12.

No further committees were constituted or committees which carry out the functions of 2 or more committees.

7. APPOINTMENTS COMMITTEE

The Company did not consider it necessary to set up an appointments committee within the Board, considering the present mechanisms for establishing the professional characteristics of the candidates for the Board of Directors currently utilised and implemented by the Board as adequate.

8. REMUNERATION COMMITTEE

It should be noted that the disclosures in the present section relating to the functions of the Remuneration Committee are made in Section 1, paragraph "Remuneration Committee" of the Remuneration Report published in accordance with Article 123-ter of the Finance Act.

The Remuneration Committee was appointed with Board motion of March 22, 2007. The Board of Directors' meeting of April 28, 2016 re-elected the members of the Remuneration Committee, whose mandate expired, in the persons of Franco Modcetti (Non-Executive and Independent Director), Stefano Marzotto (Non-Executive Director) and Daniela Manzoni (Non-Executive and Independent Director). The Remuneration Committee appointed Mr. Franco Moscetti as the Chairman of the Committee. The Board of Directors, at the time of appointments, evaluated and considered adequate the financial and accounting qualifications of the members of the Committee, in addition to their knowledge and experience in terms of remuneration policies.

The Remuneration Committee has the duty, in particular, to formulate proposals regarding the remuneration of the Chief Executive Officers and those who hold particular offices.

The Directors abstained from participating at the Committee meetings where the proposals to the Board relative to their remuneration are drawn up.

The Remuneration Committee periodically evaluates the criteria adopted for the remuneration of the executives with strategic responsibilities, supervises their application on the basis of the information provided by the Chief Executive Officers and formulates general recommendations on the matter to the Board of Directors.

During the year, the Remuneration Committee met three times. The average duration of meetings was approximately one hour.

In table 2 attached to the present Report at Attachment 2 the number of meetings of the Committee in 2016 is reported along with the relative attendances.

Considering the type of activities carried out by the Remuneration Committee, the Company did not consider it necessary to provide the above stated Committee with a pre-established budget, establishing periodically the funding requirements necessary.

At least three Remuneration Committee meetings are scheduled for 2017 and at the date of the present Report the Committee has met once. The Chairman of the Remuneration Committee informed the next Board of Directors' Meeting held.

The Directors abstained from participating at the Committee meetings where the proposals to the Board of Directors relative to their remuneration are formulated. No parties attended the Committee meetings who are not members.

9. REMUNERATION OF DIRECTORS

It should be noted that the disclosures in the present section relating to the general remuneration policy, the share-based incentive plans, the remuneration of executive directors, of the executives with strategic responsibilities and non executive directors, are reported through reference to Section I of the Remuneration Report issued in accordance with Article 123-ter of the Finance Act.

No agreements have been signed between the Parent Company and the directors which provide indemnity in the case of resignation or dismissal/revocation of office without just cause or termination of employment following a public purchase offer.

10. CONTROL AND RISKS COMMITTEE

The Control and Risks Committee was appointed with Board of Directors' Resolution of March 22, 2007 and confirmed subsequently with Board of Directors' Resolution which provides for the change in name and duties attributable, in line with the amendments to the Self-Governance Code. At the date of the present Report, the Control and Risks Committee is composed of Ms. Giorgina Gallo (independent director), Luca Marzotto (non- executive director pursuant to Article 2 of the Self-Governance Code) and Alessia Antonelli (independent director). These directors, all non executive and two of which independent, were conferred the task to identify and evaluate the problems and risks concerning company operations. At the date of the present Report the director Alessia Antonelli is also the Chairman of the Committee.

The Control and Risks Committee, in compliance with the Self-Governance Code, in relation to identification and evaluation of risks substantially carries out a role of a consultative and proposing nature for the Board of Directors, working together with the existing Committees. The

proposal duties which the Committee is required to discharge concern certain matters identified by the Self-Governance Code, although not considered compulsory.

The Board of Directors, at the time of the appointment, evaluated and considered adequate the financial, accounting and risk management expertise of the members of the Control and Risks Committee.

The Control and Risks Committee meets at least quarterly and outlines its activities at least halfyearly.

In 2016, the Control and Risks Committee met on six occasions. Minutes are kept of the Committee meetings. The Chairman of the Control and Risks Committee informed the next Board of Directors' Meeting held. The average duration of meetings was approximately one hour and thirty minutes.

At least four Control and Risks Committee meetings are scheduled for 2017 and at the date of the present Report the Committee has met once.

The Chairman of the Statutory Auditors or another standing statutory auditor designated by him/her attends the meetings.

In table 1 attached to the present Report at Attachment 1 the number of meetings of the Committee in 2016 is reported along with the relative attendances.

The Control and Risks Committee has the consultative and proposal functions listed in Article 7 of the Self-Governance Code.

In the undertaking of their functions, the Control and Risks Committee may access all information and departments necessary for the undertaking of their duties, as well as utilising external consultants, within the terms established by the Board of Directors.

Considering the type of activities carried out by the Control and Risks Committee, the Company did not consider it necessary to provide the above stated Committee with a pre-established budget, establishing periodically the funding requirements necessary.

11. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

The internal control and risk management system concerns the set of rules, procedures and organisational structures which enable the identification, measurement, management and monitoring of the principal risks.

Zignago Vetro S.p.A. has adopted an Internal Control and Risk Management System (hereafter "ICRMS") which ensures an adequate management of the companies risk exposure, not just ensuring correct management of the business, but also the achievement of the strategic objectives identified.

In particular the "ICRMS", integrated into the more general organisational and corporate governance structures adopted by the Company, oversees the propriety of corporate operations, promoting efficiency and efficacy of processes, the reliability of financial information, compliance with law and regulations, in addition to the by-laws and the internal procedures, and guarantees and safeguards the capital base and the value generated by operations.

On the basis of these principles, the Board of Directors, also to incorporate the amendments introduced by the 2011 Self-Governance Code and to update its model to changing operating conditions and to the altered external environment, approved, with the support of the Control and Risks Committee and the Director in charge of the internal control and risk management system, the "ICRMS" Guidelines.

In relation to the various actors involved in the controls mechanism, the "ICRMS" guidelines describe in detail the respective duties and responsibilities. In particular, the set of skills and relative functions is based on the profiling of the following bodies/parties:

• The Board of Directors, which directs and assesses of the System's adequacy;
• The Director in charge of the Internal Control and Risk Management System, who oversees the functioning and adequacy of the System, identifies and manages the principal corporate risks and taking account of the characteristics of the activities carried out by the Company implements guidelines drawn up by the Board of Directors, overseeing the design, implementation and management of the SCI and verifying its adequacy and efficacy on an ongoing basis;
• The Control and Risks Committee, with the duty to support the assessments and the decisions of the Board of Directors concerning the Internal Control and Risk Management System;
• The Internal Audit Manager, appointed to verify that the Internal Control and Risk Management System is adequate and operational;
• the Board of Statutory Auditors, which oversees the efficacy of the Internal Control and Risk Management System;
• The Supervisory Board, which guarantees the adequacy of the Organisation and Management Model as per Legislative Decree 231/2001, oversees its observance, promotes initiatives for the formation and circulation of the model and periodically informs the Control and Risks Committee and the Board of Directors upon any issues encountered, identifying the corrective actions to be undertaken.

In relation to the involvement of the boards and employees in the organisation of the "ICRMS", duties and responsibilities are segregated among the separate organisational units or within them, with a distinct separation between the roles of risk management, allocated to the Risk Owners of the various departmental units, and those of risk controllers. In particular, the monitoring of the

correct and effective functioning of the internal control system and the follow up actions required is based on three levels of control:

-	first level controls:	directed to ensure the correct management of corporate processes.
		In this regard, the operating units identify and evaluate risks and
		define specific mitigation actions;
-	second-level controls:	directed to verify that the first level controls are operative and
		appropriate to prevent risks. In relation to these categories, the
		functions proposed for the control of risks define methods and
		instruments for the management of risks (recording, assessment
		and monitoring of risks);
-	third-level controls:	comprises verifications carried out on the design and functioning
		of the internal control and risk management system and on the
		monitoring of the execution of the improvement plans drawn up by
		management. This category of controls was undertaken by an

The "ICRMS" structure defined through these guidelines is structured on the major international models, in particular those established in accordance with Enterprise Risk Management (ERM) and according to a structured analysis and prioritisation of principal risks in the areas of greatest exposure, identified as the strategic, operative, financial and regulatory compliance level and seeks to ensure a unified approach and in line with the operating strategies.

independent corporate department.

This approach, which further identifies and evaluates risks, the control measures and the relative action plans, was undertaken on the basis of the professional experience developed over the years by individuals involved in corporate risk management and however considering the following aspects:

• the nature and level of risk compatible with the strategic objectives of the Company;
• the organisational structure in place;
• the mapping of the risk areas as per Legislative Decree 231/2001;
• The analysis of significant processes in relation to control risks and objectives related to administrative-financial disclosure in accordance with Law 262/2005.

In relation to the method to identify and measure risks, the process was developed considering the organisational structure and the businesses of the company and classifying the risks relating to each, thereafter assessing them through combining the parameters concerning frequency/probability and the gravity of consequences.

The risk evaluation analysis and the relative measurement was preliminarily focused on the potential exposure to risk in the absence of any mitigation action and subsequently focused on the level of "residual" risk, considering the existing controls to subsequently draw up any improvement actions.

The principal elements upon which the internal control system of the Company is based are as follows:

The Ethics Code – in February 2008, the Company adopted an Ethics Code, in line with best international practice, which sets out the principles and founding ethical values of the company, as well as the conduct regulations and legislation. The Ethics Code, which is an integral part of the organisational, management and control model as per Legislative Decree 231/01, is binding for the conduct of directors, employees and all collaborators of the company. A specific procedure for the recording of potential violations of the Ethics Code and Model 231 was set up.

Organisational structure – The general organisational structure and the appointment of senior managers and of their principal operating roles was drawn up by the Chief Executive Officer. The Board of Directors is systematically informed in relation to principal organisational amendments.

Powers and delegations – the Board of Directors on April 28, 2016 (and through subsequent amendments and additions) attribute the powers of management.

The principal conditions adopted for achieving the strategic and operational objectives, as well as the monitoring of the efficacy and efficiency of the activities and the safeguarding of the company's assets, are as follows:

Drawing up of objectives, budgets, reporting and management control – the Company operates a structured system for the definition of corporate objectives (strategic and operational), for the development of annual budgets, of their interim review, of the monitoring and analysis of the variance between objectives and performance, through a structured system of management control and reporting.

Internal communication – A system of internal communication which is structured to facilitate and promote the communication of significant information to specific parties within the Company and the Group is operational.

System of operational procedures – For the correct application of corporate directives and the reduction of risks related to the reaching of corporate objectives, the Company has put in place an ISO procedure which regulates internal processes, governing both the activities carried out within departments and relations with other entities.

Information Systems – Almost all of the corporate information processes, both operational and accounting and financial, are facilitated by an IT system, based on highly integrated software packages.

The use of the systems is governed by internal procedures which guarantee security, privacy and correct utilisation by users.

The availability of data when required is guaranteed by an abundant hardware and software infrastructure.

Confidentiality of data and information is guaranteed principally through a system of segregation, principally based on user authorisation profile.

Security is guaranteed by a hardware and software infrastructure designed with the necessary remit in mind and subject to constant maintenance and undergoing periodic tests.

The platforms and the applications utilised are integrated in order to minimise the introduction of multiple data sets and to render automatic the process flows. The services are supplied by outsourcers.

The principal guides for the achievement of conformity with law and applicable regulations (compliance) and for correct and transparent disclosure to the market are the following:

Organisational model as per legislative decree 231/01 – in March 2008 the Company approved the Organisational model in accordance with legislative decree 231/01, in order to avoid the possibility of the commission of significant offences under the decree and consequently by the administrative of the Company. The Model adopted provides for an organisational structure, a system of procedures and delegations, general principles, rules of conduct, instruments of control and organisational procedure, as well as training activity and information and a disciplinary system, drawn up in order to ensure the prevention of the commission of offences. The Board of Directors appointed a Supervisory Board, which was entrusted with the duties of monitoring the correct functioning of the Model and its development and reports to the Board of Directors and Board of Statutory Auditors on a half-yearly basis.

The model is continually updated, with the most recent version 5.0 of April 29, 2013 approved by the Board of Directors on April 29, 2013. For further information, reference should be made to section 165.

Model of accounting control as per law 262/2005 in relation to financial disclosure – In compliance with the above-stated law on the protection of savings, the Company adopted a model for the management of administrative and accounting procedures, for the drawing up of financial and accounting control communications, as well as management regulations, periodic verification and the declaration of adequacy of the model, attributing the responsibility within the organisation in particular to the Executive Responsible for the preparation of the corporate accounting documents. In particular, the model seeks to provide the reasonable certainty that accounting disclosure is provided to users with a true and correct representation of the facts, and corresponding to the documented results, the books and accounting entries and communications of the company provided to the market.

Security, environment and quality – the Company has adopted a system of organisational structures and procedures dedicated to the management of security of data (which also fulfils the Privacy regulation), the protection of the environment, security of plant and personnel and the quality of service provided. The Evaluation Document of Risks is constantly monitored and updated.

Confidential information – The Company has adopted a procedural system for internal management and external communication of confidential information, in conformity with the requirements introduced by the EU directive in relation to market abuse. For further information, reference should be made to section8.

Considering the activities carried out by the Control and Risks Committee, by the Supervisory Board, the contribution of the Board of Statutory Auditors, management, the Executive Director appointed to oversee the internal control system, the Internal Audit Manager and the Executive appointed for the preparation of the accounting and corporate documents, the Board of Directors considers the system of internal control adequate and effective.

11.1. DIRECTOR IN CHARGE OF THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

In order to create an organised and coherent system of internal control, the Board of Directors on March 14, 2008, appointed the Director Mr. Alberto Faggion as the executive responsible for the internal control system. The Board of Directors, subsequent to the amendments in line with the Self-Governance Code, confirmed this role, appointing the Director Mr. Alberto Faggion as Director in charge of the Internal Control and Risk Management System, attributing the functions indicated by the Self-Governance Code.

On April 28, 2016, the Board of Directors" meeting held after the Shareholders' Meeting appointed the new director in charge of the internal control and management system Mr. Luca Marzotto.

On March 15, 2017, the Board of Directors appointed Paolo Giacobbo as the new Director in charge of the internal control and risk management system, as replacement of Luca Marzotto, who resigned due to the numerous offices and professional commitments already held..

The Director in charge of the Internal Control and Risk Management System: (a) identifies the principal corporate risks, considering the principal features of the activities carried out by the Issuer and its subsidiary, and periodically submit them for the review of the Board of Directors; (b) implements the guidelines established by the Board of Directors, designing, implementing and managing the internal control and risk management system and verifying its adequacy and efficacy on an ongoing basis; (c) adopts the system to operating conditions and the legislative and regulatory framework; (d) may request the internal audit department to carry out checks on specific operating areas and compliance with the internal rules and the procedures in the execution of company operations, contemporaneously communicating to the Chairman of the Board of Directors, the Chairman of the Control and Risks Committee and the Chairman of the Board of Statutory Auditors; (e) reports in a timely manner to the Control and Risks Committee (or to the Board of Directors) in relation to problems and issues which have emerged during the course of their activity or of which they have become aware, so that the Committee (or the Board) can take necessary action.

11.2.INTERNAL AUDIT MANAGER

Since December 2014, the Internal Audit Department has outsourced to Mr. Alessandro Bentsik, previously Chairman of the Supervisory Board, the verification, on an ongoing basis and in relation to the specific requirements, the operational viability and suitability of the internal control and risk management system, through an audit plan, approved by the Board of Directors, with the prior approval of the Control and Risks Committee and the Board of Statutory Auditors.

The audit plan constitutes a defined operating instrument, although not of a rigid nature, verifying that the internal control and risk management system of the Company is functional and adequate, in accordance with application criteria 7.C.5 of the Self-Governance Code. Its flexibility guarantees the appropriateness of the Plan to quickly incorporate any amendments considered necessary during the year.

The appointment was made on the proposal of the Director in charge of the internal control and risk management system, with the prior approval of the Control and Risks Committee and the Board of Statutory Auditors.

The Internal Audit Manager reports to the Control and Risks Committee, to the Board of Statutory Auditors and to the Director in charge of the internal control and risk management system. He is not responsible for any operational area of the Issuer. In carrying out his/her duties, he/she has direct access to all useful information for the discharge of office and reports exclusively to the Control and Risks Committee.

In 2016, the previously appointed Internal Audit Department Manager reported periodically on activities to the Control and Risks Committee, to the Chairman of the Board of Statutory Auditors, to the Chairman of the Board of Directors and to the Director in charge of the internal control and risk management system.

During the year, the Internal Audit Manager supported the activities of the Control and Risks Committee.

11.3.ORGANISATION MODEL PURSUANT TO LEGISLATIVE DECREE 231/2001

The Board of Directors of the Company, in the meeting of March 14, 2008, in relation to Legislative Decree No. 231 of June 8, 2001 (and successive modifications and integrations), which introduced a specific code of responsibility for companies for any type of offence established by the regulations of Borsa Italiana for listing on the STAR segment, adopted the "Model of organisation, management and control in accordance with Legislative Decree 231/2001", addressing the requirements of the same Legislative Decree and prepared in accordance with the guidelines issued by Confindustria. At the reporting date, the Board of Directors have not considered the allocation of supervisory board duties to the Board of Statutory Auditors.

The adoption and efficient implementation of the organisational, management and control model is appropriate to prevent offences under the Legislative Decree; the Company may be exonerated from the responsibility consequent of offences made by "applicable" parties and by persons subject to their supervision and direction.

The Model provides for a series of regulations on conduct, procedures and control activities, as well as a system of powers and delegations, in order to prevent the above responsibility arising. Moreover a disciplinary system was introduced which is applied in the cases in which the above model is not complied with.

To implement the model set out by Legs. Decree 231/2001, a Supervisory Board ("SB"), appointed by the Board of Directors, was created, which has the responsibility to ensure the Organisational, Management and Control Model pursuant to Legislative Decree 231/2001 is adequate and efficient, effective and updated.

As of the date of this Report.

Office	Name
Chairman of the Supervisory Board	Alessandro Bentsik
Member	Massimiliano Agnetti
Member	Nicola Campana

For the carrying out of the duties, the Supervisory Board is allocated its own budget.

Also at the meeting of March 14, 2008, the Board of Directors approved the By-Laws of the Supervisory Board, establishing the method for its appointment and composition, as well as its functions and powers.

The Supervisory Board (SB) in the year carried out monitoring of the functioning, efficacy and compliance with the model as well as the recording of significant updates of the model and of the corporate procedures and protocols. In this remit, the SB coordinated with the Control and Risks Committee, reporting on the results of the verification and the modifications to the model following changes in the internal organisation, in the corporate activities and in the relevant regulatory provisions, particularly in relation to the updates to Legislative Decree 231/201, with the addition of new types of offences.

The Supervisory Board, through the Control and Risks Committee, communicates to the Board of Directors, half-yearly, a written report on the Organisational, Management and Control Model.

The implementation of the detailed aspects of the activities contained in the Model has been substantially completed. The Model has been communicated to all personnel and third party consultants, clients, suppliers and partners, where deemed suitable and necessary.

Also in relation to the activities carried out and implemented by the Organisational and Management Model in accordance with Legislative Decree 231/2001, the Board of Directors on March 14, 2008 adopted the Ethics Code of the Company. In fact, as evidenced in the Guidelines for the construction of the models in accordance with Legislative Decree 231/2001, issued by Confindustria, the adoption of the relative ethics principles in order to prevent offences constitute an essential element of the preventative control system. In particular, the Ethics Code identifies the corporate values, together with the rights and the responsibilities of its subject, and applies sanctions in the case of breaches of the principles expressed in the same Code.

In 2016, the Supervisory Board met ten times.

11.4.INDEPENDENT AUDIT COMPANY

The legally-required audit is carried out by an independent audit company in accordance with applicable regulations. The Independent Audit Firm is appointed by the Shareholders' Meeting, with prior consultation of the Board of Statutory Auditors.

The auditor of the consolidated and separate financial statements of Zignago Vetro for the years 2016-2024, of the limited audit of the half-year consolidated reports for the same period, as well as the verification and control of the accounting and the correct recording of the operational events in the accounting records of the above-mentioned years was conferred, in accordance with Article 159 of the Finance Act, to KPMG SpA by the ordinary Shareholders' Meeting of April 28, 2016, in accordance with the modifications introduced by Legislative Decree 303/2006 published in the Official Gazette on January 10, 2007.

The independent auditors who carry out the audit of Zignago Vetro also carry out the audit of the subsidiary companies.

11.5.EXECUTIVE OFFICER FOR FINANCIAL REPORTING

The executive officer for financial reporting has the responsibility to implement adequate administrative and accounting procedures for the preparation of the parent company accounts, the consolidated financial statements and all other financial documents, certifying their application, and that accounting information including interim reports correspond to the underlying accounting documents, records and accounting entries.

In accordance with article 23 of the By-Laws and in conformity with the regulations currently in force, the Board of Directors, in the meeting of July 30, 2007, appointed Mr. Roberto Celot, Administration, Finance and Control Director of the Issuer, as executive responsible for the preparation of the corporate accounting documents in accordance with article 154 bis of the Finance Act, considering satisfactory his appointment criteria and in particular his proven accounting and financial experience.

11.6. COORDINATION OF THE PARTIES INVOLVED IN THE INTERNAL CONTROL AND RISKS MANAGEMENT SYSTEM

In accordance with Principle 7.P.3 of the Self-Governance Code and in order to ensure a responsive system, the guidelines established, in addition, the means for the coordination and collaboration between parties involved in the "ICRMS".

In order to ensure an efficient Corporate Governance structure, the re-consideration of the functional and operating connections between the various parties involved in the "ICRMS" allows,

on the one hand, informational synergies and on the other ensures these risk areas are appropriately overseen and that there is no duplication of controls in the activities of the various control bodies.

In particular, communication flows and processes are provided for, in addition to periodic meetings, to be held jointly, between the various bodies involved in internal control and risk management (Control and Risks Committee, the Board of Statutory Auditors, the Supervisory Board and the Internal Audit department). In particular:

• The meetings of the Control and Risks Committee are attended also by the Director in charge of the "ICRMS", by the Chairman of the Board of Statutory Auditors and, upon their unavailability, by a statutory auditor nominated by this latter, while the other statutory auditors may also attend, in addition to the Internal Audit Manager in order to ensure they are fully informed.
• The appointed Director and the Internal Audit Manager meet on a monthly basis to review their respective activities in progress and to establish any lesser significant actions, in relation to which it is not considered appropriate to inform the Board of Directors upon.
• The appointed Director and the Internal Audit Manager compare, before approval by the Board of Directors, their annual activity plans in order that inappropriate overlapping does not occur between the development and assessment actions.

It is in addition established that the Internal Audit Manager must communicate periodically prepared reports or respond to specific requests of the Chairman of the Board of Statutory Auditors, of the Control and Risks Committee and of the Board of Directors, in addition to the Director in charge of the Internal Control and Risk Management System and, where required in relation to events subject to review, also the Supervisory Board.

Finally it is established that at least annually the Independent Audit Company meets jointly with the Control and Risks Committee, the Board of Statutory Auditors and the Executive Responsible for the preparation of corporate accounting documents in order to, among other issues, assess the correct use of the accounting policies and their consistency in the preparation of the consolidated financial statements.

12. TRANSACTIONS WITH RELATED PARTIES

In accordance with the Self-Governance Code, in addition to the new regulation issued by Consob through resolution No.17221 of March 12, 2010 and subsequent interpretations, the Board of Directors of the Company in the meeting of November 26, 2010 approved a new procedure for transactions with related parties, in compliance with the new regulatory provisions introduced by the Commission with the above-stated Consob regulation and in line with the recommendations of the Commission in relation to Interpretative Communications.

The most significant aspects of the new procedure include:

• (i) "transactions with related parties" are classified as transactions of significant value (concerning transactions exceeding thresholds established by Consob), of insignificant value (those of a value which prima facia do not pose significant risk for investor interests and therefore excluded from the application of the new procedure) and those of intermediate value (a residual category comprising transactions with related parties not covered by the first two categories);
• (ii) the transparency and market communication regulations are more stringent in relation to transactions of significant value, requiring publication of a disclosure document;
• (iii) the procedural regulations which establish the involvement of the Committee for Transactions with Related Parties for the transaction approval procedure.

The Board of Directors of the Company, in the meeting of November 26, 2010, created a Committee for Transactions with Related Parties, with a significant role in the evaluation of the Transactions with Related Parties and in compliance with the above-stated procedure. This Committee in fact has the duty to guarantee substantial correctness of the transactions with related parties, through the issue of an opinion on the interest of the company served through the specific transaction as well as the suitability and correctness of the conditions.

The Committee comprises non-executive directors, two of which considered independent, in accordance with the Self-Governance Code.

As established by Consob regulation No.17221 of March 12, 2010 and subsequent interpretations, the Committee for Transactions with Related Parties preliminarily approved the new procedure for transactions with related parties, establishing compliance with the regulatory provisions.

At the date of the present Report, the Committee is composed of three independent directors in the persons of Ms. Manuela Romei (independent director), Mr. Ferdinando Businaro (non-executive director) and Ms. Alessia Antonelli (independent director).

Considering that from adoption of the procedure which governs transactions with related parties, no significant events or changes to the shareholder structure took place and that the procedure has been demonstrated as effective, no changes have been made by the Company to the procedure.

13. APPOINTMENT OF STATUTORY AUDITORS

The appointment of the Statutory Auditors is carried out based on slates presented to the shareholders according to the procedure set out by article 20 of the By-Laws, reported below, in order to ensure that the minority slate appoints a Statutory Auditor holding the position of the Chairman and an alternate Auditor.

In relation to this, slates are presented in which the candidates are listed by progressive numbering. The slates comprise two sections: one for candidates for the office of Standing Auditor and the other for candidates for the office of Alternate Auditor.

Only shareholders who together or with others represent at least 2.5% of the subscribed and paidin share capital at the moment of presentation of the slate or another limit established by Consob with regulations taking account of the floating capital and the ownership of the listed companies have the right to present slates. The call notice indicates the holding required to present slates.

Each shareholder may present only one slate; in case of breach, they are excluded from all slates. Shareholders belonging to the same shareholder agreement as per Article 122 of the CFA and subsequent modifications and additions, the parent company, the subsidiary companies and those subject to the common control, may present and vote on only one slate. The votes in breach of this are not attributed to any slate.

The slates shall be filed at the Company's registered office at least 25 (twenty five) days prior to the date established for the Shareholders' Meeting in first call or within a differing minimum time frame established by applicable laws or regulations. The call notice will indicate at least one means of distance communication of the filing of slates which enables the identification of those presenting or involved in the presentation of slates. Each slate presenting a number of candidates equal to or above three must present a number of candidates from the underrepresented gender which ensures, within the slate itself, compliance with the regulatory gender quota in force. Ownership of the minimum shareholding necessary to present a slate must be declared in the manner and under the terms and conditions established by the existing law and regulations. In the case where only one slate is filed at the expiry date of the term for presentation of the slates, or slates are only presented by related shareholders pursuant to the applicable directives, slates can be presented up to the third day subsequent to such date. In this case, the threshold established for the presentation of the slate is reduced by half.

Together with each slate, within the terms indicated above, the following must be filed (i) information relating to the identity of the shareholders presenting the slate and their shareholding; (ii) declarations that the individual candidates accept their candidature and declare to the inexistence of causes of ineligibility and of incompatibility and the existence of the requisites required by regulations in force for the assumption of office, (iii) the curriculum vitae of each candidate, with indication of offices held. In addition to that established by the previous points, in the case of the presentation of a slate by shareholders other than those who hold, also jointly, a controlling or majority holding of the share capital of the Company, such slates must be accompanied by a declaration of the shareholders presenting, declaring the absence of association with one or more of the main shareholders, as defined by existing regulations.

Slates presented that do not comply with all of the above formalities are considered as not presented.

All those entitled to vote shall vote for only one slate. The election of the statutory auditors is as follows: a) from the slate that has obtained the higher number of votes, based on the progressive order with which they are shown on the slate, two statutory auditors and an alternate auditor (hereafter the "Majority slate") are elected; (b) from the slate that has obtained the second highest number of votes and that is not associated, even indirectly, with the shareholders who have

presented or voted on the Majority slate, based on the progressive order with which they are shown on the slate, the remaining statutory auditor and other alternate auditor are elected (the "Minority slate").

When the first two slates obtain an equal amount of votes, a new vote is taken by the Shareholders' Meeting, putting only the first two slates concerned to the meeting. The same rule will apply in the case of parity between the slates with the second highest number of votes.

The Chairman of the Board of Statutory Auditors shall be the first candidate on the Minority Slate. In the case in which the minimum established requirement for the underrepresented gender of Standing or Alternate Auditors is not elected, within the slate which attracted the highest number of votes the necessary substitutions of candidates elected to the roles of Standing or Alternate Auditor is made, according to the progressive order in which the candidates were elected. In the absence of candidates from the underrepresented gender within the relevant section of the majority slate of a sufficient number to proceed with replacement, the Shareholders' Meeting appoints the Standing or Alternate Members required through statutory majority, ensuring compliance with the requirements.

Where his/her legal requisites no longer exist, the statutory auditor must leave office.

In the case of the substitution of a Statutory Auditor until the next Shareholders' Meeting, the Alternate Auditor is taken from the same list as the auditor vacating office. If the replacement as indicated above does not allow compliance with the applicable Gender Balance Regulation, the Shareholders' Meetings must be called at the earliest opportunity to ensure compliance with the regulation.

When a Statutory Auditor vacates office, including the chairman of the Board of Statutory Auditors, the chair is assumed until the next Shareholders' Meeting by the alternate member of the same slate from which the Chairman was elected.

If the alternate auditor cannot complete the Board of Statutory Auditors, a Shareholders' Meeting is convened to elect the Statutory Auditors and chose, where the statutory auditors may still be elected, from among the candidates on the slate from which the vacating statutory auditor was a member. In all of the cases in which it is not possible to form the Board of Statutory Auditors by that set out above, the provisions of law are applied.

In the case in which only one slate is presented or in the case in which no slate is presented, the Shareholders' Meeting votes by statutory majority and in compliance with the regulation concerning gender balance.

14. COMPOSITION AND OPERATION OF THE BOARD OF STATUTORY AUDITORS (as per Article 123-bis, paragraph 2, letter d) CFA)

The Board of the Statutory Auditors verifies compliance with law and the By-Laws, in respect of the principles of correct administration and in particular the adequacy of the internal control system, as well as of the organisation, administration and accounting structure and its functioning, in addition to the method for establishing corporate governance regulations which the company declares it is in observance of.

In accordance with Article 20 of the By-laws, the Board of Statutory Auditors is composed of three Standing Members and two Ultimate Members, Shareholders and Non-Shareholders, with the underrepresented gender complying with the applicable regulation, and appointed by the Shareholders' Meeting, which determines their annual remuneration and the duration of office.

The attributes, duties and duration of the Board of Statutory Auditors are based on that required by law. In accordance with law, the outgoing statutory auditors may be re-elected.

Each of the members of the Board of Statutory Auditors must possess the honourability requisites and be independent in accordance with law.

The Board of Statutory Auditors was appointed by the Shareholders' Meeting of April 28, 2016 and will remain in office until the approval of the 2018 Annual Accounts.

Name	Office
Alberta Gervasio	Chairman
Stefano Meneghini	Statutory Auditor
Carlo Pesce	Statutory Auditor
Chiara Bedei	Alternate Auditor
Cesare Conti	Alternate Auditor

The Chairman of the Board of Statutory Auditors, and an alternative auditor, were elected by a slate presented by the minority shareholders Anima SGR S.p.A., Arca SGR S.p.A., Eurizon Capital SGR S.p.A., Fideuram Investimenti SGR S.p.A:, Fideuram Asset Management (Ireland), Interfund Sicav, Medolanum Gestione Fondi SGRPA and Mediolanum Gestion Fondi SGRPA. All of the members were elected from the slate presented by the majority shareholder Zignago Holding S.p.A..

The slate presented by the majority shareholder included the following candidates:

Statutory auditors:

• Carlo Pesce, born in San Martin (Argentina) on March 8, 1951;
• Stefano Meneghini, born in Vicenza on June 2, 1966;
• Carmen Pezzuto, born in Sacile (PN) on November 22, 1967;

Alternate auditors:

• Chiara Bedei, born in Paua on February 8, 1969;
• Alessandro Bentsik, born in Venice on February 13, 1962.

The slate presented by the minority shareholder included the following candidates:

Statutory auditors:

– Alberta Gervasio, born in Udine on September 13, 1965;

Alternate auditors:

– Cesare Conti, born at Bergamo on March 16, 1963.

The candidates of the slate presented by the majority shareholder were elected with the favourable votes of 57,212,046, while the candidates of the slate presented jointly by the minority shareholders were elected by the favourable vote of 6,125,610 shares. With reference to the slates proposed a total of 756 votes were contrary. The share capital present with voting rights totaled 71.98% of the entire share capital.

In table 2 attached to the present report sub 2 the number of meetings of the Board of Statutory Auditors during the year is reported along with the relative attendances.

In Attachment 2 a brief description of the personal profiles and professional characteristics of each of the members of the Board of Statutory Auditors is provided, while the offices held at December 31, 2015 by each statutory auditor are reported as an attachment to the Report in accordance with Article 148-bis of the CFA.

Following the Shareholders' Meeting resolution of April 28, 2016 for the appointment of the new Board of Statutory Auditors in replacement of the Board concluding their mandate with the approval of the 2015 Annual Accounts, during the year Ms Carmen Pezzuto and Mr. Alessandro Bentsik ceased to be statutory auditors of the company on the expiry of their mandate.

The composition of the Board of Statutory Auditors has not changed since the beginning of the year.

During the year the Statutory Auditors met at least quarterly for a total of seven meetings, whose average duration was approx. 4 hours. The Board of Statutory Auditors also attended regularly the meetings of the Control and Risks Committee.

In order to remain fully briefed on the sector in which the company operates, the Board periodically receives information and updates from the Issuer, on the principles of correct management of the risks and on sector regulations also through material prepared by the company.

Five meetings are scheduled for the current year.

The Board of Statutory Auditors assessed during the year and in any case in the first occasion possible after their nomination the continuance of the independence of their members. In the assessment of these requirements all the criteria established by the Self-Governance Code were applied with reference to their independence and the results of this verification were communicated to the Board of Directors.

The statutory auditor who, on his/her own behalf or that of third parties, has an interest in a determined transaction of the issuer informs the other statutory auditors and the chairman of the Board, in a timely and comprehensive manner, regarding the nature, terms, origin and extent of his/her interest.

The Board of Statutory Auditors reviewed the independence of the independent audit firm, ensuring compliance with regulatory provisions, and the nature and extent of the various services provided to the Company and its subsidiaries by the independent audit firm and its network of firms.

The remuneration of the statutory auditors takes account of the commitment required, the importance of the role, in addition to the size and business sector.

The Board of Statutory Auditors, in discharging its duties, coordinated with the Control and Risks Committee, the Supervisory Board and the Internal Audit department.

15. RELATIONS WITH SHAREHOLDERS

In order to maintain a constant dialogue with the shareholders and the financial world in general, the Company has created an "Investors" function.

On December 22, 2006, the Board of Directors appointed an Investor Relator, in the person of Mr. Roberto Celot, responsible for the relations with the institutional investors and others shareholders; the Investor Relator also maintains the Insider register.

In 2008, the Company regularly held meetings with the financial community, some of which were open to all operators within the sector, and the financial press.

For the publication of information to the public, the Company adheres to the principles contained in the "Market Information Guide" and the Regulations and Communications of Consob.

Particular attention is paid to the Company Internet site (www.gruppozignagovetro.com), in which in the "Investors" section, it is possible to view the corporate accounting documents (financial statements, half-yearly statements and quarterly reports etc.), in both Italian and English, as well as other corporate documents addressed to the market (presentations, press releases, financial notices etc.).

16. SHAREHOLDER MEETINGS (as per Article 123-bis, paragraph 2, letter c), CFA)

The Shareholders' Meeting represents all of the shareholders and is called in accordance with the provisions of law and regulations for companies with listed shares to pass motions reserved for them by law or by the Company By-Laws.

The Shareholders' Meetings' provide periodic opportunities to meet and communicate with the shareholders. The Ordinary and Extraordinary Shareholders' Meetings are validly constituted through statutory majority.

In the case in which the Shareholders' Meeting is called to approve matters in accordance with law, or to authorise in accordance with the By-Law, a transaction with related parties qualifying as significant in accordance with the internal procedure for transactions with related parties adopted by the Company and the committee for transactions with related parties has expressed a negative opinion in relation to the proposal submitted for approval to the Shareholders' Meeting, the Shareholders' Meeting may approve or authorise this transaction resolving, in addition to the statutory majority required by law, also the favourable vote of the majority of non-related shareholders attending the Shareholders' Meeting, if at the time of the vote such shareholders represent at least 10% of the share capital with voting rights of the Company. Where the nonrelated shareholders present at the Shareholders' Meeting do not represent the voting capital percentage required, for the approval of the transaction, the reaching of statutory majority will be sufficient. A relevant motion by the Company in accordance with the preceding provisions will also be necessary in the case of significant transactions with related parties approved by the Shareholders' Meeting in relation to which the Committee for Transactions with Related Parties has expressed a negative opinion.

In accordance with law and Article 11 of the By-Laws, the Shareholders' Meetings, both Ordinary and Extraordinary, of the Company are called by the Board of Directors, and may be called in a place other than the registered office although in Italy or in another member state of the European Union, through a notice to be published on the internet site of the Company as well as through the other means established by law and applicable regulations.

The Shareholders' Meeting can be called by the Board of Directors on the request of shareholders holding at least one-twentieth of the share capital, within that provided by Article 2367, final paragraph, of the civil code, or by the Board of Statutory Auditors or by at least 2 of its members. The shareholders which, including jointly, represent at least one-fortieth of the share capital may request supplementation of the matters on the Agenda, or present proposals on matters already on the Agenda, within the limits and manner established by law. The addition of the matters to the Agenda is not permitted for those matters on which the Shareholders' Meeting passes motions, as prescribed by law, on proposals of the Board of Directors or in relation to a project or report prepared by the Board, other than the Report on the Agenda as per Article 125-ter, paragraph 1 of the CFA. The call notice must indicate the day, hour and place for the meeting, the agenda of the meeting and any other information required by current legislation and regulations.

Article 13 of the by-laws states: all those with voting rights may attend the Shareholders' Meeting, on the provision that such right is declared according to the manner and within the time periods established by the legislation and regulations in force. Each shareholder who has the right to attend the Shareholders' AGM may be represented by others, through written proxy, in accordance with law. Proxy may be granted through a computer generated document signed in electronic form in accordance with Article 21, paragraph 2 of Legislative Decree No. 82 of March 7, 2005. Electronic notification of proxy to the company may be carried out through e-mail to the certified e-mail address of the company indicated in the call notice. The Company does not appoint an agent for the conferment of proxy by the shareholders. The Chairman of the meeting shall verify the propriety of the proxies and announce the results of the voting.

Those with voting rights may draw up questions on the matters on the agenda, in accordance with the law. The Company has not adopted a shareholders' meeting regulation as it is considered that the statutory powers attributed to the Chairman of the Shareholders' Meeting, who oversees the workings of the meeting, including the determination of the agenda and the voting system, allows them to undertake a correct functioning of the shareholders' meeting, avoiding therefore the risks and the inconvenience which could derive from non compliance, by the Shareholders' Meeting, of the regulatory provisions.

The Board of Directors reported to the Shareholders' Meeting on the activities carried out and planned at the Shareholders' Meetings and endeavour to ensure shareholders had all necessary information so that they could take, with sufficient knowledge, the decisions within the authority of a Shareholders' Meeting. All directors and statutory auditors attended the Shareholders' Meeting of April 28, 2016, with the exception of the directors Chiara Mio and Giovanni Tamburi, who were justifiably absent.

During the year, the majority Shareholder did not submit to the Shareholders' Meeting any further matters than those proposed by the Board of Directors.

In the year there were no significant changes in the market capitalisation of the shares of Zignago Vetro or in the composition of its shareholders, and therefore the Board does not consider it necessary to evaluate the possibility to propose to the Shareholders' Meeting changes to the bylaws in relation to the percentages established for the exercise of the shares and of the protection of minority shareholders.

17. CHANGES SUBSEQUENT TO THE YEAR-END

There were no further changes to the corporate governance structure subsequent to year-end.

TABLE 1: STRUCTURE OF THE BOARD OF DIRECTORS AND COMMITTEES

														Control and Risks Committee		Remuneration Committee		Related Parties Committee
Office	Members	Date of birth	In office from	In office until	Date of first appointment	Slate (M/m) (A)	Exec.	Non Exec.	Ind. Code	Ind CFA	% (B)	Other offices (C)	(D)	(B)	(D)	(B)	(D)	(B)
Chairman & CEO	Paolo Giacobbo	1949	28/04/2016	Approv. 2018 Accounts	29/04/2010	M	X				100%	2 of which: 2
Vice Chairman	Nicolò Marzotto	1968	28/04/2016	Approv. 2018 Accounts	30/09/2005	M	X				100%	4 of which: 4
Director	Alessia Antonelli	1971	28/04/2016	Approv. 2018 Accounts	28/04/2016	M		X	X	X	100%		X	100%			X
Director	Ferdinando Businaro	1965	28/04/2016	Approv. 2018 Accounts	22/03/2007	M		X			100%	2 of which: 2	X	100%			X
Director	Giorgina Gallo	1960	28/04/2016	Approv. 2018 Accounts	28/04/2016	M		X	X	X	100%	3	X	60%
Director	Franco Grisan	1942	28/04/2016	Approv. 2018 Accounts	08/03/1993	M		X			87.5%	2 of which: 2
Director	Daniela Manzoni	1969	28/04/2016	Approv. 2018 Accounts	29/04/2013	M		X	X	X	100%				X	100%	X
Director	Gaetano Marzotto	1952	28/04/2016	Approv. 2018 Accounts	22/03/2007	M		X			100%	4 of which: 2
Director	Luca Marzotto	1971	28/04/2016	Approv. 2018 Accounts	22/03/2007	M		X			100%	6 of which: 4	X	100%
Director	Stefano Marzotto	1955	28/04/2016	Approv. 2018 Accounts	22/03/2007	M	X				100%	5 of which: 5			X	100%
Director	Manuela Romei	1943	28/04/2016	Approv. 2018 Accounts	29/04/2013	M		X	X	X	100%	1					X
Director Lead Independent Director	Franco Moscetti	1951	28/04/2016	Approv. 2018 Accounts	28/04/206	M		X	X	X	80%	4			X	100%

Corporate governance and ownership structure report

														Control and Risks Committee		Remuneration Committee		Related Parties Committee
Office	Members	Date of birth	In office from	In office until	Date of first appointment	Slate (M/m) (A)	Exec.	Non Exec.	Ind. Code	Ind CFA	% (B)	Other offices (C)	(D)	(B)	(D)	(B)	(D)	(B)
Director Lead Independent Director	Lino Benassi	1943	29/04/2013	Approv. 2015 Accounts	22/03/2007	M		X	X	X	33.34%	1*			X	100%
Director	Alberto Faggion	1944	29/04/2013	Approv. 2015 Accounts	05/03/2004	M	X				100%	6 of which: 4
Director	Chiara Mio	1964	29/04/2013	Approv. 2015 Accounts	29/04/2013	M		X	X	X	66.67%	2
Director	Maurizio Sobrero	1967	29/04/2013	Approv. 2015 Accounts	22/03/2007	M		X	X	X	100%		X	100%			X
Director	Giovanni Tamburi	1954	29/04/2013	Approv. 2015 Accounts	22/03/2007	M		X	X	X	66.67%	4			X	100%
					Quorum required for the presentation of slates for last appointment: 2.5%
	Number of meetings held in the year:								BOD: 8			CRC: 6		RC: 3	CPC: [●]

DIRECTORS RESIGNING DURING THE YEAR

NOTE

• (A) In this column M/m is indicated according to whether the director was elected by the majority (M) or minority (m) slate.
• (B) This column indicates the attendance of Directors respectively at Board of Directors and Committee meetings (no. of attendances/no. of meetings held during the effective term of office).
• (C) This column indicates the number of offices a Director or Statutory Auditor holds in other companies listed on regulated markets, including foreign markets, in holding, banking or insurance companies or large enterprises, indicating whether the company in which the office is held is part of a Group containing the Issuer (also as Parent Company). This is stated after "of which:".
• (D) This column indicates with an "X" whether the member of the BoD is a member of the Committee.

TABLE 2: STRUCTURE OF THE BOARD OF STATUTORY AUDITORS

	BOARD OF STATUTORY AUDITORS
Office	Date of birth	Date of first appointment	Members	In office from	In office until	Slate (M/m) *	Ind. Code	% (**)	Other offices (***)
Chair. Board of Statutory Auditors	1965	28/04/2016	Alberta Gervasio	28/04/2016	Approv. 2018 Accounts	m	X	100%	1
Statutory Auditor	1951	22/03/2007	Carlo Pesce	28/04/2016	Approv. 2018 Accounts	M	X	100%	1
Statutory Auditor	1966	08/05/2012	Stefano Meneghini	28/04/2016	Approv. 2018 Accounts	M	X	100%	1
Alternate Auditor	1969	29/04/2013	Chiara Bedei	28/04/2016	Approv. 2018 Accounts	M	X
Alternate Auditor	1963	28/04/2016	Cesare Conti	28/04/2016	Approv. 2018 Accounts	m	X		1
			STATUTORY AUDITORS RESIGNING DURING THE YEAR
Statutory Auditor	1967	29/04/2013	Carmen Pezzuto	29/04/2013	Approv. 2015 Accounts	M	x	100%	1
Alternate Auditor	1962	29/04/2013	Alessandro Bentsik	29/04/2013	Approv. 2015 Accounts	M	X
			Quorum required for the presentation of slates for last appointment: 2.5%
			Number of meetings held during the year: 7

NOTE

• * In this column M/m is indicated according to whether the director was elected by the majority (M) or minority (m) slate.
• ** In this column the attendance percentage of the statutory auditors at the meetings of the Board is indicated (No. of attendances/No. of meetings carried out during the effective period of office of the statutory auditor).
• *** This column indicates the number of offices of director or statutory auditor in accordance with article 148-bis of the CFA. The complete list of offices held is published by Consob on its website pursuant to Article 144- quinquiesdecies of the Consob Issuers' Regulations.

Corporate governance and ownership structure report

Attachment 1 - Summary of the curriculum vitae of the members of the Board of Directors

A brief curriculum vitae of the members of the Board of Directors is provided:

Paolo Giacobbo. He graduated in Engineering from the University of Padua in 1972, completing his military service as an officer in the Alpine division and began working in the hollow glass industry in 1974 (Vetrerie Italiane) as a production engineer. Subsequently he became a production manager and factory director, and as part of the St. Gobain Group carried out roles in general management, direction, coordination and company restructuring in various countries. His last role with this company was as Senior Corporate Executive VP for investment, production, quality, technology, engineering and R&D. Between June 2009 and June 2014 he was president of the European Glass Industry Confederation, Glass Alliance Europe, in Brussels, of which he is still a Director. He is also the Chairman of Verreries Brosse SAS and Huta Szkla Czechy SA.

Nicolò Marzotto. Graduated in Economics and Commerce and gained experience in the following sectors: commercial policies and structures, asset management and trading on currencies and securities, valuation of credit risk, financial and tax product studies, financial consultancy and economic-financial analysis of businesses and groups in specific sectors and marketing techniques. Since 2000, he has been a member of the Board of Directors of various companies controlled by the Marzotto family. He is a member of the Board of Directors of Huta Szkła "Czechy" S.A. He is directly involved in entrepreneurial initiatives in the area of distribution.

Alessia Antonelli. Graduated in Law at the Bologna University in 1995.

In 1998 passed the bar exams at the Ancona Appeals Court. In the following year she was appointed Senior Associate in the law firm Grimaldi & Clifford Chance in Milan, initially in the Project Financing sector and subsequently in M&A.

Since 2000 she has gained significant experience in corporate governance and corporate law at Tod's S.p.A., company listed on the Milan Stock Exchange, where she is currently the head of the Corporate Affairs and Governance Office. In this role she covers the assessment of the legal and regulatory aspects relating to the decisional, coordination and assistance processes of the Corporate boards in relation to legal issues and compliance. She is also responsible for the management of institutional relations with the Supervisory Authority, preparation of the documentation for extraordinary operations, preparation of the Group policies, as well as preparation and maintenance of inter-company contracts.

Between 1995 and 2000 she collaborated in Commercial and Civil Law, firstly as the Chair of Civil Rights at the Bologna University, and subsequently as the Chair of Private Law at the State University and at the Bocconi University in Milan.

Ferdinando Businaro. Graduated in Political Science, following which he completed a Masters in International Economics and Management from the SDA Bocconi of Milan. He has worked in major Italian and foreign businesses, principally in the area of management and market development. He is member of the Board of Directors of various companies including Zignago Holding SpA, Zignago Immobiliare Srl, Santa Margherita SpA, Santex Rimar Group Srl, Santex Rimar A.G. CH, M31 SpA, M31 Srl, Centervue SpA and Chairman of Rocca di Monselice Srl and of Smit Srl, Sole Director of Koris Italia Srl and CEO of Associazione Progetto Marzotto and Fondazione Progetto Marzotto.

Giorgina Gallo. Graduated in Company Administration at Turin University, and completed her managerial training at Cedep de l'Insead at Fontainebleau (Paris).

She pursued her career in the multinational company L'Oréal where she covered increasingly important managerial roles until becoming CEO and General Director of L'Oréal Saipo in 2001, head of two of the largest business units and of the production facilities.

From 2008 to 2013 she was appointed Chairman and CEO of L'Oréal Italia, sector leader in Italy, which covered all the activities in the country (approx. 2,000 employees and Euro 1 billion revenues).

She has held numerous positions in various associations, among which: Vice Chairman of Cosmetica Italia, Vice Chairman of CentroMarca, member of the Council and Board of: Federchimica, Assolombarda, Unione Industriale Torino, GS1-ECR, Upa, Auditel. She has received important institutional recognition for her achievements obtaining, in 2015, the title of "Grande Officiale della Repubblicia Itaaliana" and in 2006 "Chevalier de l'Ordre National du Mérite della Repubblica Francese" and in 2012, the "Premio Bellisario".

Since 2014 she undertakes strategic consultancy for businesses and retail. Also since 2014 she has been an independent director of Telecom Italia and Autogrill and since 2016 of Intesa – S. Paolo.

Franco Grisan. Graduated in Mechanical Engineering, and after working in the commercial and technical sectors with a major Italian oil group, in 1979 joined the Holding company of the Zignago Group as Director of Development Activities. He joined Zignago Vetro SpA in 1984 as the Commercial Director. In 1992, he was appointed the General Manager. He was Chief Executive Officer between 2000 and 2011 and Chairman from 2003 to 2016. Currently he is a Director of Zignago Vetro S.p.A., of Huta Szkła "Czechy" S.A. and of Verreries Brosse SAS, Chairman of Co.Re.Ve., Vice Chairman of CONAI and member of the Board of Confindustria Venezia.

Daniela Manzoni Suppiej She graduated in Corporate Economics from the Cà Foscari University in 1995.

Between 1995 and 1996 she carried out her Accountancy and Corporate Consultancy apprenticeship at the Michelutti firm of Udine.

In 1996 she completed a specialisation entitled "Internationalisation of small and medium-sized enterprises" at the IAL FVG of Pordenone.

In 1996 she carried out an Internship at Pittini Group SpA.

Between 1997 and 1999 she was a Store Manager of Coin S.p.A..

Between 2000 and 2005 she was Buyer for Coin S.p.A. for the Accessories, Children's Apparel and Make Up goods section.

Between 2005 and 2012 she was a Product Manager for Gruppo Coin S.p.A., coordinating Fragrances and Cosmetics purchasing and positioning.

In March 2012, she co-founded a consultancy company PDSolutions Srl.

Which carries out marketing and development consultancy for companies within the cosmetics and accessories sector.

Gaetano Marzotto. Graduated in Business Economics from the Bocconi University of Milan and carried out professional duties in various companies (Deloitte, Olivetti and Necchi), developing a great deal of experience in the sectors of business finance, management and control. In 1980, he joined the Mazotto Group, where he remained until becoming Vice-Chairman. Between 2000 and the current date he has been Vice Chairman of J.Hirsch & Co Management & Consulting Srl, Chairman of Pitti Immagine, Chairman of Gruppo Vini Santa Margherita and a Director of Zignago Holding SpA, Hugo Boss AG., Alpitour SpA, Tipo SpA and GGDB Holding SpA. From 2016 he is Chairman of Style Capital Sgr SpA.

Luca Marzotto. Graduated in Law, from 1995 he has worked in companies belonging to the Marzotto family. Since 1997, he has developed a notable degree of experience in the textile and clothing market, and in particular in the production, management control and marketing sectors. From 2000 concentrated his activities on the Asian markets and the development of the Valentino Fashion Group SpA in Asia. In 2003, he was appointed Director of the Marlboro Classics Division, the sportswear division of Valentino Fashion Group SpA. On September 30, 2005 appointed Vice Chairman of Santa Margherita SpA, and on May 10, 2007 was nominated Chief Executive Officer of Zignago Holding SpA. He is Vice Chairman of New High Glass Inc. He is also a director of Vetri Speciali SpA, Multitecno Srl and Cà del Bosco Srl – an agricultural company. Since 2005 he has been Chairman of S.M. Tenimenti Pile e Lamole e Vistarenni e San Disdagio – Società Agricola Srl and from 2008 Chairman of Zignago Power Srl and since 2013 of Villanova Energia Srl. Since April 16, 2014, he has held the office of Director of Telecom Italia SpA. Since 2015 he (CHECK) has been a Director with Golden Goose Srl and GDDB SpA.

He is a Director and member of the working Committee of Hugo Brosse AG. He also holds other offices in Italian companies.

Stefano Marzotto. Graduated in Business Economics at the Ca' Foscari University of Venice and has held many professional positions or management roles with Italian businesses. Since 1980 he has been Responsible for Marketing at Gresicotto SpA, a company operating in the construction sector; from 1984 to 1991, he was the Purchasing Office Manager and Director of the Hotel Supply Centre of Jolly Hotel SpA. He was the Chief Executive Officer of Margraf Industria Marmi Vicentini SpA between 1992 and 1996. Since 1988, he has held, and holds, the office of Director in some of the companies belonging to the Marzotto family, among which: Marzotto SpA, Gresicotto SpA, Zignago Vetro SpA, Santa Margherita SpA, Cà del Bosco Srl –agriculture company, S.M. Tenimenti Pile e Lamole e Vistarenni e San Disdagio Srl – Società Agricola, Zignago Power Srl and Villanova Servizi Srl. Since 2005 he has been the Chairman of Zignago Holding SpA and of Zignago Immobiliare Srl. Since March 30, 2011 he has been Chairman of Vetri Speciali SpA, following the position of Vice Chairman from April 7, 2008. He is currently Chairman of Tenute Santa Margherita Srl – Società Agricola.

Franco Moscetti. Born in Tarquinia (VT) in 1951, he began his career at the Air Liquide Group in 1973. After various experiences, in 1989 he was appointed General Director of Vitalaire Italia, a company specialised in home assistance services, with head office in Rome. In 1992 he transferred to Milan and in 1995 was appointed General Director and CEO of Air Liquide Sanità, sub-holding which covers all the health activities of the Group in Italy. In 1999, he was appointed CEO of the parent company Air Liquide Italia. While maintaining his responsibilities in Italy, in 2001 he transferred to Paris where he was head of the Hospital Division at international level and simultaneously, Président-Directeur Général of Air Liquide Santé France, which is the most important subsidiary of the AL Group in the sector. He is a member of the Board of Directors of the most important international branches of the Group. His institutional appointments include member of the Board of Assolombarda, Vice Chairman and member of the directive commission of Assogastecnici, Chairman of the Telemedicina Group and Telematica Sanitaria di Assobiomedica, member of the Federchimica Directive Board, member of the Multinational Business Committee and of the Health Commission of Confindustria. He received the "Oscar di Bilancio" (non-listed business category) in December 2000 by the then Treasury Minister Vincenzo Visco. In 2002, he was also honoured with the "Stella al merito del Lavoro" and the title "Maestro del lavoro" by the President of the Italian Republic Azeglio Ciampi. In June 2003, he received the "Ambrogino d'Oro" by the Mayor of Milan Gabriele Albertini and on December 5, 2013 with Presidential Decree of the French Republic was appointed "Officier de l'Ordre National du Mérite".

From December 2004 until October 2015 he was General Director and CEO of the Amplifon Group, listed on the Milan Stock Exchange and global leader in the "personal hearing solutions" sector. He is currently the Sole Director of Axel Glocal Business S.r.l., company which he founded, CEO of the 24ORE Group and of Ampliare S.r.l.; he is also a member of the Board of Directors of Fideuram Investimenti SGR (Intesa San Paolo Group), Diasorin S.p.A. and GPI S.p.A. and he is a member of the Presidential Committee of the Italian Federation of Editors Journal.

Manuela Romei Pasetti she Graduated in Jurisprudence from the University of Padova in 1965.

Between 1965 and 1969 she worked as a lawyer in relation to arbitration, tenders and public works; between 1970 and 1978 she was a Magistrate in Bassano del Grappa and between 1978 and 1987 she was a Magistrate in Venice.

She sat on the Court of Appeal of Venice until 1990, handling many processes, a number of which with important consequences in relation to the issues of drugs and kidnapping.

Between 1990 and 1998 she was the Vice General Prosecutor of Venice, handling preventative measures for the seizure of assets and collaborating – as a member of the commission of Prof. Gallo – on the Law Reform Bill.

Between 1998 and 2002 she acted as a member of the High Court, subsequently from 2002 to 2008 as a General Lawyer of the Milan Prosecutors Office.

Between March 2008 and February 2012 she was the first woman to act as the Chair of the Venice Court of Appeal.

On February 2, 2012, she was appointed as Head of the Department of Juvenile Justice of the Ministry of Justice, with the duty to re-organise the Department, a role which she held until March 31, 2012.

In June 2009 she was awarded the Marisa Bellisario Award "Women for Real Justice";

Between April 1, 2012 and February 25, 2013 (resignation) she was a member of the Supervisory Board of Finmeccanica.

Since October 1, 2012 she has been a member of Board of Directors of Banca Nuova. She resigned on December 2, 2016.

Attachment 2 – List of offices held by each director in other listed companies including overseas, in financial, banking and insurance companies or of significant size.

In the table below, the offices held on Board of Directors' or Board of Statutory Auditors' in quoted or non-quoted companies by members of the Board of Directors of the Company at December 31, 2015 are reported:

Name	Company		Office
Paolo Giacobbo	Verreries Brosse SAS	*	Chairman	**
	Huta Szkla Czechy S.A.	*	Chairman	**
Nicolò Marzotto	Zignago Holding SpA	*	Director	**
	Santa Margherita SpA	*	Director	**
	Verreries Brosse SAS	*	Director	**
	Huta Szkła Czechy S.A.	*	Director	**
	Retail Group		Director
	Retail Sport		Director
	Retail Fashion		Chairman & CEO
	Retail Shop		Chairman & CEO
Alessia Antonelli
Ferdinando Businaro	Santex Rimar Group Srl		Chairman
	Santex Rimar A.G. CH		Director
	Zignago Holding SpA	*	Director	**
	M31 SpA		Director
	Centervue SpA		Director
	Rocca di Monselice Srl		Chairman
	Koris Italia Srl		Sole Director
	Santa Margherita SpA	*	Director	**
	Zignago Immobiliare Srl	*	Director
	Adant Srl		Director
	M31 Italia Srl		Director
	Associazione Progetto Marzotto		Executive Director
	Fondazione Progetto Marzotto		Executive Director
	Smit Srl		Chairman
	Isotex Engeneering Srl		Director
Giorgina Gallo	Telecom Italia SpA		Director	**
	Autogruill SpA		Director	**
	Intesa S. Paolo SpA		Director	**
	Giga 14 Sas		Sole Director
Franco Grisan	Huta Szkła "Czechy" S.A.	*	Director	**
	Verreries Brosse SAS	*	Director	**
	Co.Re.Ve		Chairman
	CONAI		Vice chairman
	Confindustria Venezia		Member of Board

Daniela Manzoni

Gaetano Marzotto	J. Hirsch & Co. Management		Vice chairman
	& Consulting Srl
	Pitti Immagine Srl		Chairman
	Zignago Holding SpA	*	Director	**
	Santa Margherita SpA	*	Chairman	**
	Hugo Boss AG		Director on Supervisory Board	**
	Clouditalia Communications SpA		Director
	Alpitour SpA		Director	**
	Tipo SpA		Director
	GGDB Holding SpA		Director
	Style Capital sgr SpA		Chairman	**
Luca Marzotto	Zignago Holding SpA	*	CEO	**
	Santa Margherita SpA	*	Vice chairman	**
	Ca' del Bosco Srl - Società Agricola *		Director	**
	S.M. Tenimenti Pile e Lamole	*	Chairman
	e Vistarenni e San Disdagio Srl -
	Società Agricola
	Vetri Speciali SpA	*	Director	**
	Zignago Power Srl	*	Chairman
	Zignago Servizi Srl	*	Sole Director
	Multitecno Srl	*	Director
	Villanova Servizi Srl	*	Chairman
	Villanova Energia Srl		Chairman
	Hugo Boss AG		Director and member Working	**
			Personnel Committee
	Sindacato "A" Federvini		Chairman
	Centervue SpA		Director
	Telecom Italia SpA		Director	**
	Golden Goose Srl		Director
	GGDB Holding SpA		Director
Stefano Marzotto	Zignago Holding SpA	*	Chairman	**
	Santa Margherita SpA	*	Director	**
	Ca' del Bosco Srl. - Società Agricola *		Director	**
	S.M. Tenimenti Pile e Lamole	*	Vice Chairman
	e Vistarenni e San Disdagio Srl –
	Agriculture Company
	Vetri Speciali SpA	*	Vice Chairman	**
	Huta Szkła Czechy S.A.	*	Director	**
	Zignago Power Srl	*	Director
	Zignago Immobiliare Srl	*	Chairman
	Multitecno Srl	*	Chairman
	Villanova Servizi Srl	*	Director
	Tenute Santa Margherita Srl –	*	Chairman
	Agriculture Company

Corporate governance and ownership structure report

Franco Moscetti	Ampliare Srl	CEO
	Axel Glocal Business Srl	Sole Director
	Diasorin SpA	Director	**
	Fideuram Investimenti Sgr	Director	**
	GPI SpA	Director	**
	Il Sole 24 Ore SpA	CEO	**
Romei Manuela	Banca Nuova	Director

* related company

** Disclosure pursuant to Article 144 of the Consob Issuer's Regulation Issuers' Regulation (SAIVIC regulation)

Corporate governance and ownership structure report

Attachment 3 – curriculum vitae of the members of the Board of Statutory Auditors

Alberta Gervasio. She graduated in Economic Sciences and Banking at Udine University and received an Executive Master for Board of Directors and Statutory Auditors of public and private companies at the Business School Il Sole24Ore. Enrolled is in the Auditors' Register since 1999.

After a decade of experience in the auditing sector within the Group Ernst & Young she was appointed Administration and Finance Director of Snaidero Rino Spa.

In 2012, she joined the Bluenergy Group Spa where she is the General Director.

She is the Chairman of the Board of Statutory Auditors of Zignago Vetro Spa since April 28, 2016.

Carlo Pesce. Graduated in Economics and Commerce from the University of Studies of Venice "Ca' Foscari". He is a member of the Accountants' Register of Venice and of the Auditors' Register. He is involved in tax, corporate and financial statements consultancy with businesses.

He is a founding partner of Studio Grimani & Pesce, Certified Accountants, with head offices in Venice Mestre.

He is a member of the Board of Statutory Auditors of various Italian companies, Chairman of the Board of Statutory Auditors of the co-operative credit institution, a member of the Supervisory Board of foreign companies and member of the Credit Union Audit Board. He is an expert in business and corporate evaluations.

He has been a statutory auditor with Zignago Vetro SpA since March 22, 2007.

Stefano Meneghini. Graduated in Economics and Commerce from the University of Studies of Venice "Ca' Foscari". He is a member of the Accountants' Register and of the Auditors' Register and since 1994 has provided tax and corporate consultancy services to companies. Since 2007, he has been a partner with Giacobbo e Associati of Venice. He has been a statutory auditor with Zignago Vetro SpA since May 2012.

Chiara Bedei. Graduated in Economics and Commerce from the University of Studies of Venice "Ca' Foscari" in 1994. Member of the Accountants Register of Padova since 1998 and of the Auditors Register since 1999. In 1996 she became a Professional Consultant at the Studio Associato di Consulenza Tributaria of Padova, becoming an Associate in 2007.

He has been a Partner of the firm since January 2012.

He has been an alternate auditor with Zignago Vetro SpA since April 29, 2013.

Cesare Conti. He is an Associate Professor of Business Finance in the Finance Department of the Bocconi University in Milan, where he teaches "Business Finance", "Financial Management & Markets" and "Financial Risk Management in Companies", for undergraduate, graduate and Master courses in Italian and in English. He is author of numerous publications in: 1) company finance and business valuations; 2) management of business risk and financial risks; 3) governance, management, reporting, valuations and reporting in financial statements of derivative products.

He is an independent consultant on business evaluations, company finance and financial risk management, with particular reference to operations of new funding, refinancing, debt restructuring and settlement/restructuring, closure of derivative products.

He has been an alternate auditor with Zignago Vetro SpA since April 28, 2016.

ZIGNAGO VETRO S.p.A. Registered office: Fossalta di Portogruaro (VE), Via Ita Marzotto n. 8