Zignago Vetro — Annual Report 2020

Mar 30, 2021

PR

Separate Financial Statements 2020

Separate Financial Statements 2020

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.zignagovetro.com

1

Contents

Structure of the Zignago Vetro Group	pag.	3
Company Bodies	pag.	5
Introduction	pag.	6
Separate Financial Statements:
- Statement of Financial Position	pag.	8
- Income Statement	pag.	9
- Statement of Comprehensive Income	pag.	10
- Statement of Cash Flows	pag.	11
- Statement of changes in Equity	pag.	12
- Notes to the Financial Statements	pag.	14
Significant events after 31 December 2020	pag.	79
Outlook	pag.	79
Proposals to the Shareholders' Meeting	pag.	80
Statement of the Financial Statements as per Art. 154 - ter of Legs. Decree 58/98	pag.	82
Shareholders' Meeting Call	pag.	83
Summary of the Shareholders' Meeting resolutions	pag.	87
Board of Statutory Auditors' Report	pag.	92
Independent Auditors' Report	pag.	102

ZIGNAGO VETRO GROUP STRUCTURE

AT 12 MARCH 2021

ACTIVITIES AND SHAREHOLDINGS

CORPORATE BOARDS

in office for the three-year period 2019 - 2021 in office for the three-year period 2019 - 2021

chairman statutory auditors

vice chairman Andrea Manetti Nicolò Marzotto

chief executive officer Cesare Conti Roberto Cardini Chiara Bedei

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

Control and Risks Committee for the period 2016 - 2024

Alessia Antonelli Luca Marzotto Giorgina Gallo

Remuneration Committee Roberto Celot

Daniela Manzoni commercial management Franco Moscetti Stefano Bortoli

Committee for Transactions with Related Parties

_____________________________

Ferdinando Businaro Barbara Ravera Manuela Romei

Lead Independent Director

Franco Moscetti

Board of Directors Board of Statutory Auditors

Paolo Giacobbo Alberta Gervasio - chairman Carlo Pesce

alternate auditors

Luca Marzotto Alessandro Bentsik - chairman Stefano Marzotto Massimiliano Agnetti

Independent Auditors

KPMG SpA

Management

chief financial officer and investor relations manager

Stefano Marzotto Biagio Costantini

INTRODUCTION

These financial statements for the year ended 31 December 2020 consist of the Statement of Financial Position, Income Statement, Statement of Comprehensive Income, Statement of Cash Flows, Statement of changes in Equity and the Notes 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 on Operations of Zignago Vetro SpA and the Consolidated Directors' Report in one single document, included within the consolidated Financial Statements.

Therefore, the consolidated Directors' Report also contains the disclosures pursuant to article 2428 of the Civil Code, with reference to the separate Financial Statements of Zignago Vetro SpA.

The financial statements are presented in Euro while the notes and the relative comments are presented in Euro thousands, where not otherwise indicated, for greater clarity.

* * *

In 2020, all Beverage and Food market segments in which Zignago Vetro operates were impacted by the COVID-19 pandemic and the restrictions put in place to safeguard public health. This had a negative impact - particularly for Ho.Re.Ca. channel centred customers - while benefitting those with a greater focus on the large-scale retail channel and on online commerce. We indicate in particular the continuance of the strong food container performance seen in the first nine months. The diversification of the product/customer portfolio however allowed Zignago Vetro to post strong results despite the ongoing pandemic.

The impact of the pandemic was even sharper on the global Cosmetics and Perfumery markets, with a steep drop in consumption and in sales for most segments and almost all distribution channels. The Perfumery segment was impacted most by the pandemic, due to the significant drop in retail sales - and especially High-End Perfumery, shaped by the continued closure of Travel Retail. Cosmetics however held up well in the Haircare segment, with Skincare in line with the previous year, while Color Cosmetics saw a decline. The Nail Varnish market reports e-commerce growth, while experiencing declines on the traditional retail channels.

Separate Financial Statements

7

Statement of financial position

		Of which
(Euro thousands)	31.12.2020	related parties	31.12.2019	related parties Notes
ASSETS
Non-current assets
Property, plant and equipment	155,222,983		163,338,524		(1)
Intangible assets	2,378,843		2,299,618		(2)
Investments	44,811,631		44,811,631		(3)
Other non-current assets	45,232,921	44,757,000	37,208,937	36,997,000	(4)
Deferred tax assets	3,135,732		2,265,670		(5)
Total non-current assets	250,782,110		249,924,380
Current assets
Inventories	66,953,907		59,889,571		(6)
Trade receivables	62,939,017	2,441,023	63,436,272	1,930,038	(7)
Other current assets	6,346,588		9,949,241		(8)
Tax Assets	4,370,330	3,331,267	4,518,415	3,546,601	(9)
Other current financial assets from related parties	8,259,690	8,259,690	20,725,000	20,725,000	(10)
Cash and cash equivalents	35,851,654		25,657,122		(11)
Total current assets	184,721,186		184,175,621
TOTAL ASSETS	435,503,296		434,100,001
EQUITY & LIABILITIES
EQUITY
Share capital	8,800,000		8,800,000
Reserves	40,658,327		40,658,327
Acquisition of treasury shares	(1,092,817)		(1,092,817)
Retained earnings	47,123,818		46,055,350
Group profit	41,177,252		37,010,000
TOTAL EQUITY	136,666,580		131,430,860		(12)
LIABILITIES
Non-current liabilities
Provisions for risks and charges	1,444,635		1,926,799		(13)
Post-employment benefit provision	3,530,297		3,820,621		(14)
Non-current loans and borrowings	138,873,074		115,521,295		(15)
Other non-current liabilities	1,624,448		1,876,077		(16)
Deferred tax liabilities	1,957,694		1,967,308		(17)
Total non-current liabilities	147,430,148		125,112,100
Current liabilities
Bank loans and borrowings
current portion	85,216,080		112,362,068		(18)
Trade and other payables	51,631,276	6,825,650	50,899,180	5,559,921	(19)
Other current liabilities	14,559,212		14,295,793		(20)
Current tax payables	---		---		(21)
Total current liabilities	151,406,568		177,557,041
TOTAL LIABILITIES	298,836,716		302,669,141
TOTAL EQUITY AND LIABILITIES	435,503,296		434,100,001

Income Statement

(Euro thousands)	2020	Of which related parties	2019	Of which related parties	Notes
Revenues	238,634,803	10,825,195	230,090,693	11,067,693	(22)
Raw materials, ancillaries,
consumables and goods	(56,322,401)	(21,256,923)	(50,586,146)	(13,414,654)	(23)
Service costs	(83,710,186)	(15,629,448)	(76,582,083)	(13,427,197)	(24)
Personnel expense	(41,663,129)		(41,857,796)		(25)
Amortisation & depreciation	(30,158,348)		(28,015,129)		(26)
Other operating costs	(2,412,366)		(1,765,410)		(27)
Other operating income	3,085,500		2,928,987		(28)
Operating Profit	27,453,873		34,213,116
Investment income	12,376,752	12,376,752	10,213,336	10,213,336	(29)
Financial income	1,296,599	958,495	1,595,853	955,502	(30)
Financial expense	(2,354,086)		(2,232,005)		(31)
Net exchange rate gains/(losses)	(105,203)		(3,910)		(32)
Profit before taxes	38,667,935		43,786,390
Income taxes	2,509,317		(6,776,390)		(33)
Profit for the year	41,177,252		37,010,000

Separate Financial Statements

Statement of Comprehensive Income

(Euro thousands)		2020	2019
Profit for the year		41,177,252	37,010,000
Items that will be subsequently reclassified to profit or loss
Translation difference for foreign operations Tax effect		--- ---	--- ---
Total items that will be subsequently reclassified to profit or loss	A)	---	---
Items that will not be subsequently reclassified to profit or loss
Actuarial gains/(losses) on defined benefit plans Tax effect		(19,526) 4,687	226,069 (54,257)
Total items that will not be subsequently reclassified to profit or loss	B)	(14,839)	171,812
Other comprehensive income (expense) for the year, net of taxes	A+B)	(14,839)	171,812
Total comprehensive income for the year		41,162,413	37,181,812

Statement of Cash Flows

Statement of Cash Flows

(in Euro)		2020	2019
CASH FLOW FROM OPERATING ACTIVITIES:
Profit before taxes		41,177,252	37,010,000
Adjustment to reconcile net profit with
cash flow generated from operating activities:
Amortisation & Depreciation		30,158,348	28,015,129
Gain/(losses) on sale of property, plant & equipment		10,828	(66,230)
Provision adjustments		(1,273,836)	(249,068)
Financial income		(1,296,599)	(1,595,853)
Financial charges		2,354,086	(2,232,005)
Net exchange rate gains/(losses)		105,203	3,910
Income taxes paid in the year		(731,591)	(5,265,544)
Dividends		(12,376,752)	(10,213,336)
Changes in operating assets and liabilities:
Decrease/(increase) in trade receivables		998,603	(12,573,004)
Decrease/(increase) in other current assets		3,602,653	3,601,622
Decrease/(increase) in inventories		(7,064,336)	(10,552,416)
Increase/(decrease) in trade & other payables		(139,904)	10,178,780
Increase/(decrease) in other current liabilities		263,419	(232,824)
Change in other non-current assets and liabilities		5,253,779	(1,873,387)
Total adjustments and changes		19,863,901	(3,054,226)
Net Cash Flows from operating activities	(A)	61,041,153	33,955,774
CASH FLOW FROM INVESTING ACTIVITIES:
Investments in tangible assets		(897,860)	(2,868,361)
Investments in property, plant and equipment		(21,256,000)	(33,702,626)
Change in payables on fixed assets		872,000	(19,002,000)
Investments in financial assets		---	(500,000)
Sales price of securities		---	---
Sales prices of property, plant and equipment		31,000	66,320
Net cash flow used in investing activities	(B)	(21,250,860)	(56,006,667)
CASH FLOW FROM FINANCING ACTIVITIES:
Interest paid in the year		(1,487,086)	(2,186,772)
Interest received in the year		1,047,599	1,096,684
Dividends received in the year		12,376,752	10,213,336
Increase in bank payables		26,671,030	80,833,507
Decrease in bank payables		(31,253,119)	(27,520,863)
Dividends distributed		(37,005,613)	(31,568,769)
Net cash flow used in financing activities	(C)	(29,650,437)	30,867,123
Change in assets and liabilities items due to translation effect	(D)	54,676	3,492
Net change in cash and cash equivalents	(A+B+C+D)	10,194,532	8,819,722
Cash & cash equivalents at beginning of year		25,657,122	16,837,400
Cash & cash equivalents at end of year		35,851,654	25,657,122

Statement of changes in Equity

(in Euro) Balance at 31 December 2018 restated	Share capital	Legal reserve	Revaluation reserve	Other reserve	Treasury shares 8,800,000 1,760,000 27,333,795 11,564,531 (1,092,817) (636,968)	Actuarial gains/(loss) on defined benefit plans	Retained earnings 44,105,195	Profit for the year	Total Equity 34,035,293 125,869,029
Profit for the year Other profits/(loss), gross	---	---	---	---	---	---	---	37010000	37,010,000
of tax effect Total comprehensive income	---	---	---	---	---	(171,812)	---	---	(171,812)
(expense)	---	---	---	---	---	(171,812)	---	37,010,000	36,838,188
Other allocations of the result Sale of treasury shares	--- ---	--- ---	--- ---	--- ---	--- ---	--- ---	37,010,000 ---	(37,010,000) ---	--- ---
IFRS 2	---	---	---	292,412	---	---	---	---	292,412
Other Distribution of dividends Balance at 31 December 2019	--- ---	--- ---	--- ---	--- ---	--- --- 8,800,000 1,760,000 27,333,795 11,856,943 (1,092,817) (808,780)	--- ---	--- (31,568,769) 49,546,426	--- ---	--- (31,568,769) 37,010,000 131,430,860
Profit for the year Other profits/(loss), gross of tax effect Total comprehensive income (expense)	--- --- ---	--- --- ---	--- --- ---	--- --- ---	--- --- ---	--- 14,839 14,839	--- --- ---	41,177,252 --- 41,177,252	41,177,252 14,839 41,192,091
Other allocations of the result Sale of treasury shares	--- ---	--- ---	--- ---	--- ---	--- ---	--- ---	41,177,252 ---	(41,177,252) ---	--- ---
IFRS 2 Other Distribution of dividends Balance at 31 December 2020	--- --- ---	--- --- ---	--- --- ---	1,049,242 --- ---	--- --- --- 8,800,000 1,760,000 27,333,795 12,906,185 (1,092,817) (793,941)	--- --- ---	--- --- (37,005,613) 53,718,065	--- --- --- 41,177,252 136,666,580	1,049,242 --- (37,005,613)

FORM AND CONTENT OF THE FINANCIAL STATEMENTS

Zignago Vetro SpA is an Italian joint stock company and is domiciled at Fossalta di Portogruaro via Ita Marzotto.

The publication of the financial statements of Zignago Vetro SpA for 2020 was approved by the Board of Directors on 12 March 2021.

Accounting standards

The Financial Statements for the year ended 31 December 2020 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 present document.

These financial statements consist of the Statement of Financial Position, Income Statement, Statement of Comprehensive Income, Statement of Cash Flows, Statement of changes in Equity and the Notes to the financial statements.

The Notes include all the disclosures required by current regulations and accounting standards, appropriately presented in the financial statements.

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

The Company, under the various options allowed by IAS 1, presents separately in the statement of financial position the current and non-current assets and liabilities based on their realisation or settlement within the normal operating cycle and provides in the income statement a cost analysis by type.

The statement of cash flows is prepared applying the indirect method.

Zignago Vetro SpA, as a listed Parent, also prepared the consolidated financial statements of the Zignago Vetro Group at 31 December 2020.

Statement of conformity with IFRS international accounting standards

The consolidated financial statements information for the year ended 31 December 2020 were prepared in accordance with IFRS issued by the International Accounting Standards Board ("IASB), endorsed by the European Union and in force at the reporting date.

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

New accounting standards and interpretations adopted by the Company from 1 January 2020

The accounting policies adopted for the preparation of the financial statements at 31 December 2020 are the same as those utilised for the consolidated financial statements of the Zignago Vetro Group at 31 December 2019, 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 2020 - as listed in the following table:

Document title	Issue date	Effective date	EU Regulation and publication date
Amendment to references to the Conceptual Framework in IFRS	March 2018	1 January 2020 (*)	29 November 2019 (EC) 2019/2075 - 6 December 2019
Definition of material (Amendments to IAS 1 and IAS 8)	October 2018	1 January 2020	29 November 2019 (EC) 2019/2104 - 10 December 2019
Reform of reference indices for the determination of interest rates (Amendments to IFRS 9, IAS 39 and IFRS 7)	September 2019	1 January 2020	15 January 2020 (EC) 2020/34 - 16 December 2020
Definition of a business (Amendments to IFRS 3)	October 2018	1 January 2020	21 April 2020 (EC) 2020/551 - 22 April 2020
Concessions on rents related to COVID-19 (Amendment to IFRS 16)	May 2020	1 June 2020 (**)	9 October 2020 (EC) 2020/1434 - 12 October 2020

• (*) The new Conceptual Framework for Financial Reporting was published on 23 March 2018 and became effective immediately for IASB members developing the new standards. For reporting entities, however, it became effective on 1 January 2020.
• (**) IASB Board: entry into force as from financial years starting on or after 1 June 2020; early application is also permitted for financial statements not authorised for publication by 28 May 2020 (date of publication of the amendments to IFRS 16) EU: The provisions of the publication regulation have retroactive effect and, therefore, the amendments to IFRS 16 must be applied at the latest as of 1 June 2020 for fiscal years beginning on or after 1 January 2020.

The Conceptual Framework describes the concepts underlying financial reporting prepared in accordance with IFRS and assists the IASB in the development of new accounting standards, the preparers of financial statements to define an accounting standard in the absence of a specific IFRS provision and all those who need to understand and interpret IFRS. The main innovations introduced in the new Conceptual Framework are:

• description of new concepts, which were not present in the previous version of the document:
  • "measurement", with an indication of the factors to be taken into account for the selection of the measurement criteria
  • supplementary "presentation" and "disclosures" with an indication of the circumstances in which income and expenses are to be recognised to other comprehensive income
  • "derecognition"
• updating and clarifying some concepts existing in the previous version:
  • definition of assets and liabilities
  • criteria for the recognition of assets and liabilities in the financial statements
  • "prudence"
  • "measurement uncertainty"
  • "substance over form"
  • "stewardship".

The entry into force of the new Conceptual Framework has been differentiated according to the user:

• for IASB members, the new Conceptual Framework became effective immediately upon its publication on 23 March 2018
• for IFRS preparers, on the other hand, entry into force has been postponed to the financial statements for financial years beginning on or after 1 January 2020, allowing for early application.

The document that was however subject to endorsement by the European Union is the document published at the same time as the new Conceptual Framework with which the IASB updated the references to the new Conceptual Framework published in 2018 in the various accounting standards (IAS/IFRS) and interpretations (SIC/IFRIC), with the following two exemptions:

• in IFRS 3 Business Combinations, for the definitions of assets and liabilities, the IASB decided to maintain the reference to the version of the Framework published in 2001, as the analyses on the potential impacts of the new definitions included in the March 2018 version are still ongoing
• in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, the IASB indicated that the preparers of IFRS financial statements, which are required to define an accounting policy to be applied to regulatory account balances related to rate-regulated activities, should continue to refer to the version of the Framework published in 2001, pending completion of the ongoing project that will lead to the publication of a new accounting policy applicable to such transactions.

The amendments to the references to the new Conceptual Framework, published in March 2018, are applicable retrospectively to financial statements for financial years beginning on or after 1 January 2020. They may be applied in advance.

As part of the broader "Better Communication in Financial Reporting" project, by which the IASB seeks to improve the way financial information is communicated to users of financial statements, the definition of "material" has been amended.

The following table presents the old and new definition of "material":

Old definition	New definition
Material: Omissions or incorrect measurements of accounts are material if, individually or overall, they may impact the economic decisions of the readers of the financial statements.	Material: Information is material if it is reasonable to assume that its omission, misrepresentation or concealment could influence the decisions that the main users of financial statements prepared for general purposes make on the basis of those financial statements, which provide financial information about the specific reporting entity. […] The information is concealed if it is disclosed
	in such a way as to have, for the main users of
	the financial statements, a similar effect to the
	omission or misstatement of the same
	information.

Regulation (EC) No. 2020/34 of 15 January 2020, published in the Official Journal of the European Union on 16 January 2020, adopted the document issued by the IASB on "Interest Rate Benchmark Reform (amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures)".

Benchmarks, such as Interbank Offered Rates (IBOR), play a very important role in global financial markets. Following a number of incidents of manipulation and the significant reduction in trade on the interbank market, in February 2013, the G20 asked the Financial Stability Forum (FSB) to promote a process to review the main financial benchmarks.

In July 2014, the FSB published the following recommendations:

• strengthen the calculation of IBOR's so that they are linked to actual transactions concluded on the market and improve the controls on the inputs used to determine them
• identify risk-free interest rates as an alternative to the IBOR's.

This reform, still ongoing globally, has created uncertainties about the timing and amount of future cash flows associated with certain financial instruments, with the consequent risk of having to terminate hedging relationships designated in accordance with IAS 39 or IFRS 9. According to the IASB, discontinuing hedging relationships because of these uncertainties does not provide useful information to users of financial statements; therefore, the document has made specific amendments to IAS 39, IFRS 9 and IFRS 7, introducing derogations during the period of uncertainty.

With this first phase of the project, the IASB amended IFRS 9, IAS 39 and IFRS 7 to allow entities not to discontinue hedging transactions until the reform of interest rate benchmarks has been completed.

In particular, temporary derogations have been introduced from the application of the specific hedge accounting provisions of IFRS 9 and IAS 39, to be applied obligatorily to all hedging transactions directly impacted by the interest rate benchmark reform.

With Regulation (EC) No. 2020/551 of 21 April 2020, published in the Official Journal of the European Union on 22 April 2020, the IASB document "Definition of a business (Amendments to IFRS 3 - Business Combinations)" was adopted.

With this document, the IASB amended the definition of business under IFRS 3 in order to clarify some interpretative doubts that had emerged during the Post Implementation Review of this accounting standard carried out from 2013 to 2015.

The amendments to IFRS 3 are applicable prospectively for years beginning on or after 1 January 2020. Earlier application is permitted by providing information in the notes to the financial statements.

The definition of business plays a very important role in the preparation of the financial statements. The accounting treatment to be applied to transactions whereby an entity acquires control of a group of assets and liabilities (and any liabilities) from a third-party changes where that group of assets and liabilities is considered a business or an acquisition of a group of assets.

As a result of the amendments, paragraph B7 of IFRS 3 states that a business is "comprises inputs and processes applied to those factors that are capable of contributing to the creation of production ("outputs").

Paragraph B8 of IFRS 3 also clarifies that an integrated set of activities and assets is a business where it includes at least one substantial input and process that together contribute significantly to the ability to create an output.

These concern amendments to standards and/or interpretations which do not have any impacts on the consolidated financial statements at 31 December 2020.

The IAS/IFRS endorsed by the EU applicable to financial statements for periods beginning from 1 January 2021 are reported below.

Document title	Issue date	Effective date	EU Regulation and publication date
Extension of the temporary extension from the application of IFRS 9 (Amendments to IFRS 4)	June 2020	1 January 2021	15 December 2020 (EC) 2020/2097 - 16 December 2020
Reform of Interest Rate Benchmarks - Phase 2 - Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)	August 2020	1 January 2021	13 January 2021 (EC) 2021/25 - 14 Jan 2021

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 endorsed for adoption in Europe at the approval date of these consolidated financial statements.

Document title	Issue date	Effective date	EU Regulation and publication date
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)	May 2020	1 January 2022	TBD
Onerous Contracts—Cost of Fulfilling a Contract (amendments to IAS 37)	May 2020	1 January 2022	TBD
Annual Improvements to IFRS® Standards 2018–2020	May 2020	1 January 2022	TBD
Reference to the Conceptual Framework (Amendments to IFRS 3)	May 2020	1 January 2022	TBD
IFRS 17 – Insurance contracts + Amendment to IFRS 17	May 2017 June 2020	1 January 2023 (*)	TBD
Classification of Liabilities as Current or Non-current (amendments to IAS 1) + Deferral effective date	January 2020 July 2020	1 January 2023 (**)	TBD
Disclosure of Accounting policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2)	February 2021	1 January 2023	TBD
Definition of Accounting Estimates (Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors)	February 2021	1 January 2023	TBD

^(*) In March 2020, the IASB postponed the date of entry into force of IFRS 17 to 1 January 2023.

(**) On 4 May 2020, the IASB published an ED to postpone the date of entry into force to 1 January 2023.

The Company will adopt these new standards and amendments, according to the scheduled application date and will evaluate the potential impacts on the consolidated financial statements, where they have been approved by the European Union.

Translation of financial statements in currencies other than the Euro

The functional and presentation currency adopted by the Company 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 period;
• 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 – those published by the Italian Exchange Office:

	2020 Exchange Rates		2019 Exchange Rates
Curr.	at 31 December	year average	at 31 December	year average
USD	1.2271	1.1422	1.1234	1.1195
PLN	4.5597	4.4430	4.2568	4.2978

Accounting policies

The Financial Statements of Zignago Vetro at 31 December 2020 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 the 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 unlimited 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 the profit and loss account. The depreciation methods, the useful lives and the residual values 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%
EDP	20%
Commercial equipment and furnishings	15%
Internal communication systems	25%
Transport vehicles	25%
Motor vehicles	20%
Right-of-use	Duration of contract

At each reporting date, the company verifies whether there has been any impairment in the carrying amount of property, plant and equipment.

Where, based on this verification, 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 and 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

On 13 January 2016 the IASB published IFRS 16 Leasing, which replaces IAS 17. This document was adopted by the European Union through publication on 9 November 2017. The standard eliminates the difference in the recognition of operating and finance leases, while also presenting elements which simplify application and introduces the concept of control within the definition of leasing. In particular, in order to determine whether a contract represents leasing, IFRS 16 requires to verify whether the lessee has the right to control the use of a determined asset for a determined period of time.

At the commencement date of the lease, the Company records the right of use asset and the lease liability. The right-of-use asset is initially valued at cost, including the amount of the initial valuation of the leased liability, adjusted for payments due for leases undertaken at the commencement date or before, plus initial direct costs incurred and an estimate of the costs which the lessee is expected to incur for the dismantling or removal of the underlying asset or for the refurbishment of the underlying asset or of the site at which it is located, net of the leasing incentives received.

The asset for the right-of-use is subsequently depreciated on a straight-line basis from the effective date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company at the end of the lease term. In this case, the asset for the right-of-use will be depreciated over the useful life of the underlying asset, determined on the same basis as that of property and equipment. In addition, the asset for the right-of-use is regularly reduced by any impairment losses and adjusted to reflect any changes arising from subsequent valuations of the lease liability.

The Company assesses the lease liabilities at the present value of payments due for lease charges not settled at the commencement date, discounting them according to the implied lease interest rate. The payments due for the lease included in the valuation of the lease liability include:

• fixed payments (including substantially fixed payments);

• lease payments that depend on an index or rate, initially measured using an index or rate at the effective date;

• the amounts expected to be paid as security for the residual value; and

• payments due for the lease during an optional renewal period if the Company has reasonable assurance that it will exercise the renewal option, and penalties for early termination of the lease, unless the Company has reasonable assurance that it will not terminate the lease early.

The lease liability is measured at amortised cost using the effective interest method and is remeasured in the event of a change in the future lease payments resulting from a change in the index or rate, in the event of a change in the amount that the Company expects to have to pay as a guarantee on the residual value or when the Company changes its valuation with reference to the exercise or not of an option to purchase, extend or terminate, or in the event of a revision of the payments due for the lease which are fixed in substance.

Where the lease liabilities are remeasured, the lessee correspondingly alters the right-of-use asset. If the carrying amount of the right-of-use asset is reduced to zero, the lessee recognises the change in profit or loss.

In the statement of financial position, the Company presents assets for the right-of-use that do not meet the definition of investment property under "Property, plant and equipment" and lease liabilities under "Financial payables".

The Company recognises payments due relating to prior leases as costs on a straight-line basis over the lease duration.

For contracts signed before 1 January 2019, the Company established whether the agreement was or contained a lease and whether:

• performance of the agreement depended on the use of one or more specific assets; and

• the agreement transferred the right to use the asset.

Other leased assets were classified as operating leases and were not recognised in the Company's statement of financial position. Payments under operating leases were recognised as an expense on a straight-line basis over the lease term, while incentives granted to the lessee were recognised as an integral part of the total lease cost over the lease term.

Share-based payments

The fair value at the grant date of the incentives recognised in equity-settled share-based payments granted to employees is usually recognised as a cost, with a corresponding increase in equity, over the period during which employees obtain the right to the incentives. The amount recognised as an expense is adjusted to reflect the actual number of incentives for which the conditions for remaining in service have matured and consequentially non-market results, so that the final amount recognised as an expense is based on the number of incentives that meet the above conditions on the vesting date. In the case of incentives recognised in share-based payments whose conditions are not to be considered as vesting, the fair value at the grant date of the share-based payment is measured to reflect these conditions. With reference to the non-vesting conditions, any differences between the assumptions at the grant date and the effective date will not produce any impact in the financial statements.

The fair value of the amount to be paid to employees in respect to the share revaluation rights, settled in cash, is recognised as an expense with a corresponding increase in liabilities over the period during which employees mature the unconditional right to receive the payment. The liability is measured at each reporting date and at the settlement date based on the fair value of the revaluation rights of the shares. Any changes in the fair value of the liability are recognised to profit or loss for the year.

Currently an incentive plan called the "2019-2021 Stock Option Plan" is in place. This is available to the Company's Chairman and Chief Executive Officer and senior executives of the Company's internal executive committee, as approved by the Shareholders' Meeting. The Plan stipulates the free assignment to beneficiaries of options for the paid subscription and/or purchase of a maximum 1,320,000 ordinary shares of the Company, in the ratio of one share per option, according to the terms and conditions of the Plan. These options may be exercised by the Beneficiaries on condition that, in the period between October 1 and December 31, 2021, the average official closing price of the ordinary shares of the company is equal to or above Euro 9.70. The vesting period, during which the assigned options may not be exercised, is fixed between the allocation date and the maturation date of the options. The Plan duration is until 31 December 2024. As regards the effects from the conclusion of the administration and/or employee relationship of the beneficiaries of the 2019-2021 Stock Option Plan and for further information, reference should be made to the disclosure document prepared as per Article 84-bis and Scheme 7 of Annex 3A of the Issuers' Regulation, available on the company website at www.gruppozignagovetro.com, Corporate Governance section.

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 non-controlling interest equity is established based on the share 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 assuming non-total control,

the entire amount of goodwill generated by the acquisition is recorded considering, therefore, also the shareholding of minority interests (full goodwill method); minority interests are recorded at their overall fair value including therefore the share 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 to the income statement. It is therefore considered in the determination of goodwill.

Any contingent 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 consideration classified to assets or liabilities, such as financial, are recognised and measured as per IFRS 9.

With regard to equity investments acquired subsequent to the acquisition of control (non-controlling interest acquisitions), any positive difference between the acquisition cost and the corresponding portion of equity acquired is recognised to equity; similarly, the effects from the sale of the noncontrolling share without loss of control are recognised to 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 book value 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 values of the asset sold and the part maintained by the cashgenerating unit.

On the first-time adoption of IFRS, the Company 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 verification of any loss in value 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 definite 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, licenses and trademarks	8.33% -20% - 33.33%

The Company 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 the income statement 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 measured 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.

Impairments of goodwill and intangible and property, plant and equipment

At each reporting date, the Company 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 definite useful life; in the presence of indicators of impairment, the Company makes an estimate of the recoverable amount. The recoverable value 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 Company estimates the recoverable value 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 verification for the reduction in value relates to the unit or the group of units to which the goodwill was allocated.

When determining value in use, the estimated future cash flows are discounted by the Company 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 revenue streams, the business plans approved by Management are used, which constitute the best estimate made by the Company 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 to 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 in the income statement in the category of costs relating to those assets. At the reporting date, the Company also assesses any indicators of a reduction in the loss of value previously recorded and, where these indicators exist, performs a new estimate of the recoverable value. The value of an asset previously written down, except for goodwill, may be restate

d 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 value, while the restated value must not exceed the carrying amount which would have been determined, after amortization or depreciation, if no loss in value had been recognized in previous years. Each revaluation is recorded as income in the income statement; after the recording of the amount restated, the depreciation of the asset is adjusted in future years, in order to record the adjusted book value, net of any residual value, over the useful life of the asset.

Equity investments in associates and other investments

An associated company is a Company in which a significant influence is exercised. 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 associated companies 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.

The investments are subject to a verification of any loss in value each year, or if necessary more frequently. Where there is an indication that these investments have incurred an impairment loss, the loss is recognised in the income statement as a write-down; the original value is written back in subsequent years if the reasons for the write-down 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

With IFRS 9, the receivables and loans recognised to financial assets are classified to the following three categories on the basis of the characteristics of the cash flows of these assets (verified through SPPI Test) and the business model by which they are managed:

• assets valued at amortised cost;
• assets measured at fair value with recognition to other comprehensive income items ('FVOCI' - fair value through other comprehensive income);
• assets measured at fair value recognised to the income statement ('FVTPL' fair value through profit or loss).

The above categories established by IFRS 9 replace the previous categories of IAS 39, i.e. helduntil-maturity, loans and receivables, assets available-for-sale and assets valued at FVTPL.

In particular, a financial asset shall be measured at amortised cost where not designated to FVTPL and where both the following conditions are satisfied:

• the financial asset is held within a business model whose objective is the holding of financial assets for the collection of the contractual cash flows; and
• the contractual terms of the financial assets establish, at certain dates, cash flows represented entirely by the payment of capital and of interest on the amount of capital to be repaid.

A financial asset should be measured at FVOCI where not designated to FVTPL and both the following conditions are satisfied:

• the financial asset is held within a business model whose objective is achieved both through the collection of contractual cash flows and the sale of the financial assets; and
• the contractual terms of the financial assets establish, at certain dates, cash flows represented entirely by the payment of capital and of interest on the amount of capital to be repaid.

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 provisions for impairments.

The gains and losses are recognised to the income statement when the loans and receivables are eliminated or if there is an impairment, also through the amortisation process.

Write-downs from impairments are recognised to the income statement as financial expenses if concerning loans, while allocated to other operating expenses where concerning trade and other receivables.

Impairments 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 value, net of any deteriorations in the expected value.

Non-current bank loans and borrowings

The medium/long term loans are initially recognised at fair value, net of the transaction costs sustained. 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 flow value and the initial recognition value.

Derivative financial instruments

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

In line with the strategy chosen, the Company 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 the income statement; 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 the income statement.

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 financial flows of 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 financial 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 the income statement.

Treasury shares

Treasury shares are recorded as a reduction of equity based on the relative acquisition cost. No profit or loss is recorded to the income statement on the acquisition, sale or cancellation of treasury shares. Any difference between the book value 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 legal or implicit current 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 value representing the best estimate of the amount that the Company would pay to discharge the obligation or to transfer it to a third party at the balance sheet 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 interest expense.

Gas emissions

The Company receives free gas emission rights in Italy under the European Emission Trading Schemes. The rights are conferred annually and in exchange the company must offset the emissions made. The Company has adopted a policy which provides for the recording of the net assets and 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.

If the rights acquired exceed the actual emissions, an asset is recorded under fixed assets.

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 the Company concerning benefits due on conclusion of employment are categorised by type:

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

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

For defined contribution plans, the legal or implied obligation of an entity is limited to the amount of contributions to be paid: consequently, the actuarial risk and the investment risk is borne by the employee. For defined benefit plans, the obligation of the entity concerns the granting and assurance of the agreed employee plans: consequently, the actuarial and 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 to the income statement 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 value). This account includes certain liabilities both in their amount and due date.

Other current liabilities

The other current liabilities are recorded at their nominal value.

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 (socalled 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; The Company values the TEE's available at 31 December at fair value according to the latest available prices. Those matured but not yet assigned are considered receivables from the Authority and are valued at expected realisable value, taking account of the timeline for their assignment and the outlook for prices in the subsequent year. Any changes between the recognition price and the effective realisable value are considered as financial income and charges when not settled within a reasonable timeframe;
• 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 balance sheet and will be used according to the means established by the applicable regulation. Recognition to the income statement 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 balance sheet 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 values recorded in the financial statements and the corresponding values 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 Company operates, in the years in which the temporary differences will be realised or settled. In accordance with IAS 12, the Company 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 Company and when it is not probable that the realisation will result in a fiscal liability.

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

Foreign currency transactions

The operating and reporting currency of the Company 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 balance sheet 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.

Discretional valuations and 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 book value 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, goodwill, the valuation of joint ventures and the valuation of energy efficiency securities (TEE). The amounts of the individual categories and the method for their determination are reported in the notes to the financial statements.

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.

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 inputs 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 valued 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 2020 by fair value hierarchy level.

	Book		Fair Value Level
	Value	1	2	3	Total
Financial assets not measured at Fair Value
Cash and cash equivalents (*)	35,852	---	---	35,852	35,852
Trade receivables (*)	62,939	---	---	62,939	62,939
Financial assets measured at Fair Value Other receivables for TEE (white certificates) Hedges	---	---	---	---	---
	---	---	---	---	---
Financial liabilities not measured at Fair Value Non-current loans and
borrowings(*) Effect of financial payables for	138,873	---	---	138,873	138,873
leasing Bank loans & borrowings and current portion of non-current	8,081	---	---	8,081	8,081
loans & borrowings	83,844	---	1,372	85,216	85,216
Other non-current payables (*)	1,624	---	---	1,624	1,624
Trade and other payables (*)	51,631	---	---	51,631	51,631

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

INFORMATION ON DIRECTION AND CO-ORDINATION ACTIVITY

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

NOTES TO THE MAIN STATEMENT OF FINANCIAL POSITION ITEMS

			31.12.2020	31.12.2019
	NON-CURRENT ASSETS	(Euro thousands)	250,782	249,924
			31.12.2020	31.12.2019
	1 – PROPERTY, PLANT AND EQUIPMENT	(Euro
thousands)				155,22
3	163,339

The table below shows the historical cost, depreciation provisions and net values of property, plant and equipment in the two years:

(Euro thousands)	Balance at 31.12.2020			Balance at 31.12.2019
	Historical	Accumulated	Net	Historical	Accumulated	Net
	cost	Depreciation	value	cost	Depreciation	value
Land and buildings	79,113	(30,617)	48,496	76,378	(26,579)	49,799
Right-of-use IFRS 16	9,955	(1,911)	8,044	4,220	(834)	3,386
Plant & machinery	266,715	(179,867)	86,848	259,611	(162,419)	97,192
Industrial & commercial equipment	71,060	(64,367)	6,693	68,078	(60,239)	7,839
Other assets	7,572	(5,461)	2,111	6,974	(4,855)	2,119
Assets in progress	3,031	---	3,031	3,004	---	3,004
Total	437,446	(282,223)	155,223	418,265	(254,926)	163,339

The movements in property, plant and equipment in 2019 were as follows:

(Euro thousands)	Balance 01.01.2019	Acquisitions & capitalisations	Decreases & reclass.	Depreciation	Balance 31.12.2019
Land and buildings	17,608	34,427	---	(2,236)	49,799
Right-of-use IFRS 16	4,220	---	---	(834)	3,386
Plant & machinery	54,188	61,174	---	(18,170)	97,192
Industrial & commercial equipment	6,529	6,864	(18)	(5,536)	7,839
Other assets	1,166	1,595	---	(642)	2,119
Assets in progress and advances	74,177	3,004	(74,177)	---	3,004
Total	157,888	107,064	(74,195)	(27,418)	163,339

(Euro thousands)	Balance 01.01.2020	Acquisitions & capitalisations	Decreases & reclass.	Depreciation	Balance 31.12.2020
Land and buildings	49,799	1,397	(22)	(2,679)	48,495
Right-of-use IFRS 16	3,386	5,735	---	(1,077)	8,044
Plant & machinery	97,192	8,571	---	(18,915)	86,848
Industrial & commercial equipment	7,839	4,852	(12)	(5,985)	6,694
Other assets	2,119	676	---	(684)	2,111
Assets in progress and
advances	3,004	3,031	(3,004)	---	3,031
Total	163,339	24,262	(3,038)	(29,340)	155,223

The movements in property, plant and equipment in 2020 were as follows:

Property, plant and equipment at 31 December 2020 amount to Euro 155,223 thousand (Euro 163,338 thousand at 31 December 2019), after depreciation of Euro 29,340 thousand (Euro 27,418 thousand in 2019), capital investments, including the change to assets in progress, of Euro 21,258 thousand (Euro 36,570 thousand in the previous year) and decreases of Euro 34 thousand (Euro 18 thousand in 2019).

Property, plant and equipment, following the adoption of the new IFRS 16, as described in the specific section of these notes, includes the right-of-use assets identified. The company therefore recognised to non-current assets an amount of Euro 8,044 thousand which corresponds to the rightof-use of certain properties underlying the duration of the lease contract signed for their availability.

Land and buildings

This account includes owned property.

The increases in 2020 mainly refer to the acquisition of land at the Empoli offices. Other investments refer to the completion of portions of buildings at the production facilities.

Plant and machinery

The increases in 2020 primarily relate to the routine renewal of plant and machinery. These increases also include the reclassification from the item "Assets in progress" when the plant commenced operations.

Industrial and commercial equipment

The increases in 2020 refer to the renewal of equipment, in particular moulds.

Property, plant and equipment in progress and advances

The balance at 31 December 2020 refers to normal production investments.

Impairment

During the two years analysed, no indicators emerged to require Zignago Vetro SpA to carry out an impairment test.

		31.12.2020	31.12.2019
2 - Intangible assets	(Euro thousands)	2,379	2,300

The table below shows the historical cost and the accumulated amortisation in the years considered:

(Euro thousands)		Balance at 31.12.2020		Balance at 31.12.2019
	Historical cost	Accumulated Amortisation	Net value	Historical cost	Accumulated Amortisation	Net value
Concessions, licenses, trademarks & similar rights	4,115	(1,736)	2,379	3,217	(917)	2,300

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

(Euro thousands)	Balance 01.01.2020	Acquisitions	Amortisation	Balance 31.12.2020
Concessions, licenses,
trademarks & similar rights	2,300	898	(819)	2,379
(Euro thousands)	Balance 01.01.2019	Acquisitions	Amortisation	Balance 31.12.2019
Concessions, licenses, trademarks & similar rights	2 8	2,869	(597)	2,300

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

		31.12.2019	31.12.2019
3 - Equity Investments	(Euro thousands)	44,812	44,812

The table below shows the movements of investments for the year ended 31 December 2020:

(Euro thousands)	Balance	Increases	Decreases	Balance
	01.01.2020			31.12.2020
Vetri Speciali SpA	25,320	---	---	25,320
Zignago Vetro Polska S.A.	10,327	---	---	10,327
Zignago Vetro Brosse SAS	4,000	---	---	4,000
Vetro Revet Srl	3,030	---	---	3,030
Vetreco Srl	1,059	---	---	1,059
Zignago Glass USA	189	---	---	189
Julia Vitrum SpA	500	---	---	500
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.)	7	---	---	7
Other	2	---	---	2
Total	44,812	---	---	44,812

The investment in Vetri Speciali SpA concerns a corporate restructuring in 2004. The company is involved in the production and distribution of specialty glass containers and operates from its registered office of via Manci 5, Trento. Production is carried out at the Pergine Valsugana (TN), Ormelle (TV) and San Vito al Tagliamento (PN) facilities.

Zignago Vetro holds 50% of ordinary company shares; all shares guarantee equal rights.

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

In 2020, the Company distributed dividends totalling Euro 37 million to shareholders.

Vetro Revet Srl is an Italian limited company, domiciled in Empoli (FI), involved in the collection, processing, enhancement and sale of raw glass for reuse in production. The acquisition involved the undertaking of a 51% stake in the company and is consolidated only at statement of financial position level from the date of acquisition of control (i.e. the contract signing date of 20 December 2017). The acquisition reflects the Group policy to tap into potential opportunities and synergies between Vetro Revet Srl operations and those of the Group. Any difference between the carrying amount of the investment and the corresponding share of equity is considered an impairment, also in view of expected Group development plans.

Vetreco Srl is an Italian 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.

Zignago Vetro SpA's holding is 30%, with Ardagh Group Italy holding 30% and Saint Gobain Vetri 40%. The operation was approved by the Anti-trust Authority. The company began operations in November 2013. The company is not yet fully operational, which therefore impacted upon the result. On 2 December 2015, the Shareholders' Meeting approved a share capital increase for the coverage of losses. The difference between the book value of the investment and the corresponding share of net equity is not considered as long-term, also in view of the development plan approved by the Board of Directors of the Company and the expected increase in earnings and related cash flows.

Zignago Glass USA was incorporated in 2015 and is entirely held by Zignago Vetro. The company's registered office is in New York (USA) and it acts as a commercial agency on behalf of a number of Zignago Vetro Group companies. The difference between the carrying amount of the investment and the corresponding share of equity is not considered as long-term, as the company is in a startup phase and also in view of the development plans approved by the Board of Directors of the Company and the expected increase in earnings and related cash flows.

Julia Vitrum SpA is an Italian company domiciled in San Vito al Tagliamento (PN), incorporated in April 2019 as a joint venture, involved in the processing of raw glass and the supply of cullet ready for re-use in production.

Zignago Vetro SpA's holding is 40%, reducing from the previous 50% due to the entry of a new institutional shareholder.

(Euro thousands)		Share		Equity		Profit/(loss)	Share	Carrying	Financial
Name and registered office		capital	Total	Pro-quota		Total Pro-quota	held by Parent	amount	statements at 31.12.2020
Equity investments under Financial assets
Direct holding:
ZIGNAGO VETRO BROSSE SAS Vieux Rouen sur Bresle - 34, rue Théodule Gérin		4,000	24,119	24,119	4,224	4,224	100%	4,000	4,000
Direct holding:
ZIGNAGO GLASS USA Inc. 350 Fifth Avenue 41st Floor New York, NY 10118	USD	189	(692)	(692)	(124)	(124)	100%	189	189
Direct holding:
ZIGNAGO VETRO POLSKA S.A.	PLN	3,594	26,145	26,145	4,102	4,102	100%	10,327	10,327
Joint subsidiaries:
VETRI SPECIALI SpA Trento – Via Manci, 5		10,062	163,747	81,873	35,875	17,938	50%	25,320	25,320
VETRO REVET SRL Via 8 Marzo, 9 - Empoli (FI)		402	612	312	(148)	(75)	51%	3,030	3,030
VETRECO SRL Via Morolense km 5,500 - Supino (FR)		400	677	203	543	164	30%	1,059	1,059
JULIA VITRUM SpA
Via Gemona,5 - San Vito al Tagliamento (PN)		1,000	970	485	(30)	(15)	40%	500	500
Total			215,578	132,445	44,442	26,213		44,425	44,425

The value at cost of the directly held subsidiaries and those jointly controlled and the share of equity and the share of the results for the year pertaining to the Issuer are reported as follows:

The equity and net result for the year of the direct subsidiary Zignago Glass USA Inc. were converted into Euro at the exchange rate reported in the initial part of the Notes. The same criteria was utilised for Zignago Vetro Polska SA.

The excess carrying amount over the share of equity concerning the investments in Vetreco Srl, Vetro Revet Srl and Zignago Glass USA Inc. is justified by the strong outlook for the subsidiaries and therefore the carrying amounts were not realigned with the corresponding share of equity at 31 December 2020.

		31.12.2020	31.12.2019
4 - Other non-current assets	(Euro thousands)	45,233	37,209

The item principally concerns the medium and long-term portion of the loan granted to the subsidiary Zignago Vetro Polska SA for Euro 33,007 thousand and to the subsidiary Zignago Vetro Brosse sas for Euro 11,750 thousand.

It also includes receivables for security deposits with suppliers of servicing equipment and electricity, and receivables for the excess purchase of carbon allowances (CO2) totalling Euro 277 thousand.

		31.12.2020	31.12.2019
5 - Deferred tax assets	(Euro thousands)	3,136	2,266

The composition of the deferred tax assets in the periods considered were as follows:

(Euro thousands)	Balance at 31.12.2020	Balance at 31.12.2019
	Temporary	Tax	Temporary	Tax
	difference	effect	difference	effect
	deductible		deductible
Doubtful debt provision not deductible	664	162	1,031	249
Provision for industrial risks	315	8 7	804	225
Agents' supplementary indemnity	245	6 0	237	6 0
Provision for contractual risks	885	212	885	212
Post-employment benefits	552	132	571	137
Inventory provision	6,374	1,778	2,415	674
Other costs deductible in future years	200	4 8	200	4 8
Amort. & deprec. deductible in subsequent
years	2,613	729	2,628	733
Provision for technical risks IAS	(257)	(72)	(257)	(72)
Other			---	---
Total		3,136		2,266
Zignago Vetro SpA 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. In measuring the deferred tax assets, reference is made to the IRES and IRAP rates in force at 31 December 2020 (respectively 24% and 3.90%). Deferred tax assets mainly refer to deductible timing differences on

the inventory obsolescence provision, the dispute risk provision, the doubtful debt provision and on other charges deductible for tax purposes in subsequent years, including depreciation in excess of the 50% tax rate for the first year of operation.

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

(Euro thousands)
31 December 2018			2,547
Utilisations		(1,782)
Increases		1,501	(281)
31 December 2019			2,266
Utilisations		(450)
Increases		1,320	870
31 December 2020			3,136
		31.12.2020	31.12.2019
CURRENT ASSETS	(Euro thousands)	184,721	184,176
		31.12.2020	31.12.2019
6 - Inventories	(Euro thousands)	66,954	59,890
The composition of inventories is as follows:
(Euro thousands)		Balance at	Balance at
		31.12.2020	31.12.2019
Raw materials, ancillaries and consumables		16,532	15,238
Work-in-progress and semi-finished products		---	---
Finished products		56,796	47,067
Inventory obsolescence provision		(6,374)	(2,415)
Total		66,954	59,890
The increase in the year, attributable to raw materials, ancillaries, consumables and goods were also impacted by the pandemic, which dampened a portion of sales.
The Inventory provision is calculated by the warehouse managers, together with the Finance Department and taking into consideration any product non-compliance, production by lots, the highly customised nature of certain products and slow-moving stock. The provision also takes into account the recoverable value of materials through production process recycling. The increase in the obsolescence provision is mainly due to the write-down of finished products whose inventory turnover has been assessed as excessively slow.
In accordance with the principle of prudence and with particular reference to the economic situation shaped by the ongoing pandemic, the Company decided to make substantial provisions for inventory write-downs during the year.

		31.12.2020	31.12.2019
7 - Trade receivables	(Euro thousands)	62,939	63,436

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

(Euro thousands)			Balance at		Balance at
			31.12.2020		31.12.2019
Trade receivables - Italy			33,648		38,920
	Trade receivables - Foreign		6,438		9,701
Bills			23,600		16,062
Doubtful debt provision			(747)		(1,247)
Total			62,939		63,436
credit management.	Trade receivables decreased slightly (-0.8%) compared with the previous year, indicating careful The table below shows the breakdown of trade receivables by geographical segment:
(Euro thousands)			Balance at 31.12.2020		Balance at
Italy				56,501	31.12.2019 53,736
E.U.				5,433	8,371
Other countries				1,005	1,329
Total				62,939	63,436
(Euro thousands)	At 31 December 2020 and 2019, trade receivables not individually written down were as follows:	Not overdue		Overdue but not individually written down 30 - 60	60 - 90
	Total		< 30 days	days	days
2020	62,939	53,727	7,501	1,456	255
2019	63,436	53,255	7,428	1,372	1,381

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Italy	56,501	53,736
E.U.	5,433	8,371
Other countries	1,005	1,329
Total	62,939	63,436

(Euro thousands)		Not		Overdue but not individually written down
		overdue		30 - 60	60 - 90
	Total		< 30 days	days	days
2020	62,939	53,727	7,501	1,456	255
2019	63,436	53,255	7,428	1,372	1,381

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Prov. at beginning of year	1,247	1,300
Provisions	8 7	8 7
Utilisations	(587)	(140)
Total	747	1,247

In particular:

(Euro thousands)	Receivables write-downs individually	Receivables write-downs collectively	Total
At 31 December 2018	129	1,171	1,300
Utilisations in the year Provisions in the year	(140) 8 7	--- ---	(140) 8 7
At 31 December 2019	7 6	1,171	1,247
Provisions in the year Utilisations in the year	--- (76)	8 7 (511)	8 7 (587)
At 31 December 2020	---	747	747

		31.12.2020	31.12.2019
8 - Other current assets	(Euro thousands)	6,347	9,949

The composition of "other current assets" is as follows:

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
VAT receivables	3,129	8,020
Receivables from sale of energy efficiency quotas	---	1,060
Receivables on Investments (Development Decree)	---	---
GSE receivable for energy contribution	---	7 1
Reimbur. from insurance entities to be settled		---
Advances to social security institutions
and other employee receivables	9	3 0
Other receivables	2,710	264
Bank interest accrued		---
Prepayments:
- insurance premiums	425	401
- rent expenses and leases	7 4	103
Total	6,347	9,949

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

Receivables for energy efficiency securities (TEE or also white certificates), obtained in connection with efficiency projects authorised by the GSE (energy service operator) have been fully factored as of 31 December 2020.

"Other receivables" includes advances to suppliers of Euro 2,486 thousand.

		31.12.2020	31.12.2019
9 - Tax assets	(Euro thousands)	4,370	4,518

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

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Parent for IRES reimbursement on IRAP ded.	---	1,266
Parent for IRES from fiscal consolidation	3,331	2,280
IRAP receivables	8 0	177
Tax credits for research and development and investments	959	795
Total	4,370	4,518

The receivable from the consolidating company, amounting to Euro 3,331 thousand, relates to IRES tax accrued and transferred to the consolidating company, partly as a result of the "Patent Box" tax relief.

	31.12.2020	31.12.2019
10 – Other current financial assets (Euro thousands)	8,260	20,725

The account includes short-term bank credit lines granted for Euro 1,000 thousand to Zignago Brosse S.A., for Euro 5,067 thousand to Zignago Vetro Polska S.A., a wholly-owned subsidiary, to satisfy cash flow needs and investments made, at market interest rates, renewable monthly and for Euro 693 thousand to Zignago Glass USA and for Euro 1,500 thousand and to Vetro Revet Srl.

	31.12.2020	31.12.2019
11 - Cash and cash equivalents (Euro thousands)	35,852	25,657

The cash and cash equivalents are as follows:

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Time deposits	7,000	7,000
Bank and postal accounts	28,848	18,651
Cash in hand and similar	4	6
Total	35,852	25,657

Cash and cash equivalents at 31 December 2020 amounted to Euro 35,852 thousand, compared to Euro 25,657 thousand at 31 December 2019. 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.

		31.12.2020	31.12.2019
EQUITY	(Euro thousands)	136,667	131,431

12 - Equity

Share capital

The share capital of Zignago Vetro SpA at 31 December 2020 of Euro 8,800 thousand, which is fully subscribed and paid-in, comprises 88,000,000 ordinary shares with a par value of Euro 0.10 each.

Reserves

The composition of the reserves at 31 December 2020 and 2019 is as follows:

(Euro thousands)		Balance at	Balance at
		31.12.2020	31.12.2019
Legal reserve		1,760	1,760
Revaluation reserve:
- as per law 72/1983, on suspension of taxes		932	932
- as per law 413/1991, deductible		1,579	1,579
- as per law 342/2000, on suspension of taxes		24,823	24,823
	sub)	27,334	27,334
Extraordinary Reserve		103	103
Grants as per article 55 DPR 917/1986		6,044	6,044
Grants as per article 55 DPR 697/1973		123	123
Total		35,364	35,364

The Legal Reserve of Euro 1,760 thousand at 31 December 2020 had reached one-fifth of the share capital.

The revaluation reserve is based upon monetary revaluations.

The "Reserve as per Law No. 342/2000", of monetary revaluations, is shown net of the substitute tax of 19%.

Deferred taxes liabilities are provisioned in the reserve "Article 55—DPR 917/1986 grants", amounting to Euro 6,044 thousand.

Period	Description	Number	Treasury	Shares in	Unitary	Total
		shares	shares	circulation	value	value
FY 2007	Opening bal.	80,000,000	---	80,000,000	0.10	8,000,000
	Acquired	---	(40,000)	79,960,000	0.10	7,996,000
FY 2008	Acquired	---	(1,014,900)	78,945,100	0.10	7,894,510
FY 2009	Acquired	---	(237,240)	78,707,860	0.10	7,870,786
FY 2012
	Scrip issue	8,000,000	---	---	---	---
	Allocation from scrip
	issue	---	(129,250)	86,578,610	0.10	8,657,861
FY 2014		---	---	---	---	---
FY 2015		---	---	---	---	---
FY 2016		---	---	---	---	---
FY 2017		---	361,664	361,664	0.10	36,166
FY 2018		---	750,751	750,751	0.10	75,075
FY 2019		---	---	---	0.10	---
FY 2020					0.10
Total at 31
December 2020		88,000,000	(308,975)	405,303,985	0.10	40,530,399

Acquisition of treasury shares The reconciliation of the number of shares in circulation is as follows:

At 31 December 2020, 308,975 treasury shares had been acquired, taking account of the number of treasury shares held corresponding to 0.35% of the share capital, for a payment of Euro 1,093 thousand.

Profits carried forward

The reserve increased in the year (+Euro 4 thousand), due to the allocation of previous year profits.

Other equity accounts

"Other reserves" include in addition the reserve from application of IAS 19 (Employee benefits) for Euro 794 thousand and the recognition of the IFRS 2 reserve of Euro 1,342 thousand deriving from the accounting treatment of the Stock Option Plans, or rather from recognition of the notional cost for the period for these plans.

The table below reports the description, the possibility of utilisation and distribution, as well as any utilisation in the previous years for each equity account at 31 December 2020.

					Utilisations
					in the
					three
				e	prev. years
8,800	---	---	---	(1)	---
24,823	A,B,C	24,823	24,823	(2)	---
					---
1,579	A,B,C	1,579	1,579	(4)	---
					---
					---
					---
1,760	B	---	---		---
103	A,B,C	103	103		---
51,870	A,B,C	51,870	49,966	(5)	---
1,342	---	---	---		---
					---
41,177	A,B,C	41,177	41,177		---
					---
	Amount 932 6,044 123 (1,093) (793) 136,667	Possibility o f utilisation A,B,C A,B,C A,B,C --- ---	Quota available 932 6,044 123 --- --- 126,651	Quota distrib. 932 6,044 123 --- --- 124,747	N o t (2) (3) (2)

Key:

A: for share capital increase

• B: to cover losses
• C: for distribution to shareholders

Notes:

• 1) The share capital includes Euro 3,868 thousand from the "Reserve as per law 342/2000", in suspension of taxes, net of the substitute tax of 19% following the Shareholders' Meeting resolution on 22 December 2006 and Euro 800 thousand from retained earnings for the scrip issue approved by the Shareholders' Meeting on 24 April 2012.
• 2) On these reserves, some net of substitute tax, no further deferred tax liability was recorded as no distribution is expected.
• 3) The related deferred taxes have been provided on this reserve.
• 4) The "Revaluation reserve as per Law 413/1991" is distributable.
• 5) The "Retained earnings" reserve may be distributed excluding the "Treasury shares" reserve and the "Actuarial losses on defined benefit plans".

NON-CURRENT LIABILITIES	(Euro thousands)	31.12.2020 147,430	31.12.2019 125,112
13 - Provisions for risks and charges	(Euro thousands)	31.12.2020 1,445	31.12.2019 1,927

The composition of the provisions for liabilities and charges is as follows:

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Industrial risks provision	315	804
Agents' supplementary indemnity provision	245	237
Provision for contractual risks	885	885
Total	1,445	1,927

Provision for industrial risks

The "Industrial risk provision" 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 movements during the year were as follows:

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Balance at 1 January	804	806
Provisions	---	---
Utilisations	(489)	(2)
Balance at 31 December	315	804

Utilisations refer to a reclassification of the provision for risks on packaging which were allocated to the provision for inventory write-downs.

Agents' supplementary indemnity provision

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

The movements during the year were as follows:

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Balance at 1 January	237	224
Provisions	8	1 3
Utilisations	---	---
Balance at 31 December	245	237

Provision for contractual risks

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

The movements during the year are as follows:

	31.12.2020	31.12.2019
Balance at 1 January	885	1,035
Provisions	---	---
Utilisations	---	(150)
Balance at 31 December	885	885

Provision for emission trading risks

		31.12.2020	31.12.2019
14 - Post-employment benefits
benefits	(Euro thousands)	3,530	3,821

31.12.2020
	31.12.2019
885	1,035
---	---
---	(150)
885	885
31.12.2020	31.12.2019
3,530	3,821
Post-employment benefits entirely refer to the employee leaving indemnity provision whose changes at 31 December 2020 and 31 December 2019 were as follows:
Balance at	Balance at
31.12.2020	31.12.2019
3,821	4,032
2 6	5 9
(19)	226
(9)	331
(11) (297)	(105) (496)
	The utilisation of the provision of Euro xxx thousand in 2020 refers to a specific position defined The provision is no longer utilised as it is directly recognised under service costs on the basis of the mark to market at period-end or at the purchase price paid, with counter-entry to invoices to be received or other non-current assets if the purchase exceeds actual requirements. (Euro thousands)

53

The principal assumptions adopted for the actuarial recalculation of the provision at 31 December 2020, compared with those used at the end of the previous year, are summarised below:

	31.12.2020	31.12.2019
Actual mortality rate:	ISTAT 2004	ISTAT 2004
Actual invalidity rate	INPS inability/ invalidity tables	INPS inability/ invalidity tables
Advanced rate of employee	constant annual average frequency	constant annual average frequency
departures (dismissal and	of 4.0%	of 4.0%
resignations)
Rate of post-employment benefit	- constant annual average rate of	- constant annual average rate of
advances	2.5%	2.5%
	- average amount of 70% of	- average amount of 70% of
	accumulated Post-employment	accumulated Post-employment
	Benefit	Benefit
Annual technical discounting rate	0.35% was assumed based on the	0.70% was assumed based on the
	bond yields with comparable	bond yields with comparable
	duration of those subject to	duration of those subject to
	valuation	valuation
Future annual inflation rate	1.0%	1.5%
Date of pension	in line with the applicable	in line with the applicable
	regulation	regulation
Annual increase in employee	a fixed rate of 2.50% plus the 75%	a fixed rate of 2.63% plus the 75%
leaving indemnity	of the inflation rate recorded by	of the inflation rate recorded by
	ISTAT in December of the	ISTAT in December of the
	previous year.	previous year.

	31.12.2020	31.12.2019
15 - Non current bank loans and borrowings (Euro thousands)	138,873	115,521

The composition of non-current bank loans and borrowings are as follows:

(Euro thousands) Balance at Balance at 31.12.2020 31.12.2019 (A) Unsecured loan, nominal value Euro 70 million, Unicredit / Mediobanca; Euribor 3 months variable rate, maturity 31 December 2020, repayment by half-yearly instalments --- 9,363 (B) Unsecured loan, nominal value Euro 30 million, Bnl, Euribor 3 months variable rate, maturity 22 June 2021, repayment by quarterly instalments in arrears 21,945 25,935 (C) Loan, nominal value Euro 60 million, Unicredit Spa, Euribor 3 months variable rate, maturity 20 December 2024, repayment by half-yearly instalments in arrears 53,856 59,820 (D) Loan, nominal value Euro 40 million, Banca Intesa SpA, Euribor 3 months variable rate, maturity 31 December 2022, repayment by half-yearly instalments 22,817 31,368 (E) Loan, nominal value Euro10 million, Banca Credit Agricole Friuladria Spa, Euribor 3 months variable rate, maturity 31 December 2023, repayment by half-yearly instalments 8,553 9,976 (F) Loan, nominal value Euro 7 million, Banco BPM SpA, Euribor 3 months variable rate, maturity 30 September 2024, repayment by half-yearly instalments 6,611 6,981 (G) Cassa Depositi e Prestiti subsidised loan, nominal value Euro 7,990 thousand, fixed subsidised rate, 10-year duration, repayment by half-yearly instalments ^{405 405} (H) BNL loan, nominal value Euro 2,283 thousand, Euribor 6 months variable rate, 10 year duration linked to point (I) above, repayment by half-yearly instalments ^{116 116} (I) BNL loan, nominal value Euro 10,000 thousand, Euribor ⁶ months variable rate, maturity 7 May 2025, repayment by half-yearly instalments 9,978 --- (J) BPER loan, nominal value Euro 10,000 thousand, Euribor ³ months variable rate, maturity 18 June 2025, repayment by half-yearly instalments 8,992 --- (K) INTESA loan, nominal value Euro 25,000 thousand, Euribor ³ months variable rate, maturity 5 August 2025, repayment by half-yearly instalments 24,925 --- (L) UBI loan, nominal value Euro 10,000 thousand, fixed subsidised rate, maturity ¹⁵ April 2023, repayment by half-yearly instalments 9,995 --- FTA IFRS 16 Effect 8,082 3,405 Total medium/long-term loans 168,193 143,964 Less current portion (37,402) (31,848) Medium/long-term portion 138,873 115,521

The non-current bank loans and borrowings loans existing at 31 December 2020 and 31 December 2019 were as follows:

(A) Syndicated loan originally undertaken by Zignago Vetro SpA with Unicredit (as lending and agent bank for Euro 40,000 thousand) and Mediobanca (as lending bank for Euro 30,000 thousand), of a nominal Euro 70,000 thousand. 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.

On 27 October 2017, Zignago Vetro SpA, Unicredit and Mediobanca signed an addendum to the original contract mentioned above, stipulating:

• i) the full repayment of the residual amount of the Unicredit loan, for an amount of Euro 35,469 thousand, including interest matured until repayment;
• ii) alteration of the margin;
• iii) alteration of the financial commitments.

At 31 December 31, 2019, this loan concerned only the counterparty Mediobanca. In order to hedge interest rate risk, the company has put in place with Mediobanca an Interest rate swap (IRS) for a total original notional amount of Euro 30,000 thousand, in addition to a payment plan. The loan was settled in 2020.

• (B) The BNL Loan, undertaken by Zignago Vetro SpA, of a nominal Euro 40,000 thousand, is repayable over 20 quarterly instalments in arrears of Euro 2,000 thousand each, beginning from 29 April 2018. 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 40,000 thousand, in addition to a repayment plan, which presents at 31 December 2020 a negative mark to market of Euro 244 thousand;
• (C) Loan signed by Zignago Vetro SpA on 20 December 2019 with Unicredit SpA for a nominal Euro 60,000 thousand, utilised also to repay in advance the loan at letter "A". Repayment is through 9 half-yearly instalments from 30 June 2020, in addition to the final maturity date instalment, corresponding to 10% of the total in 2020, 10% of the total in 2021, 20% of the total in 2022, 20% of the total in 2023 and 40% of the total in 2024 on maturity established for 20 December 2024. In order to hedge interest rate risk, the company has put in place with Unicredit an Interest rate swap (IRS) for a total notional amount of Euro 60,000 thousand, in addition to a payment plan. At 31 December 2020, this transaction reported an overall negative mark to market of Euro - 470 thousand;
• (D) Loans signed by Zignago Vetro SpA on 27 October 2017 with Banca Intesa for a nominal Euro 40,000 thousand. Payment is through 7 half-yearly equal instalments of Euro 4,286 thousand from 28 June 2019, in addition to an instalment of Euro 10,000 thousand on final maturity of 30 December 2022. In order to hedge interest rate risk, the company put in place on 13 February 2018 with Intesa two Interest rate swaps (IRS) for a total original notional amount of Euro 40,000 thousand, in addition to a payment plan. At 31 December 2020, this transaction reported an overall negative mark to market of Euro 272 thousand.
• (E) Loan signed by Zignago Vetro SpA on 12 November 2018 with Banca Credit Agricole Friuladria for a nominal Euro 10,000 thousand. Payment is through 7 half-yearly equal instalments of Euro 1,429 thousand from 31 December 2020, with final maturity of 31 December 2023. In order to hedge interest rate movements, the company put in place on 27 December 2018 with Credit Agricole Friuladria an Interest rate swap (IRS) for a total original notional amount of Euro 10,000 thousand, in addition to a repayment plan covering the loan duration. At 31 December 2020, this transaction reported an overall negative mark to market of Euro 117 thousand.
• (F) Loan signed by Zignago Vetro SpA on 29 July 2019 with Banco BPM Spa for a nominal Euro 7,000 thousand. Repayment is through 15 equal quarterly instalments of Euro 373 thousand from 31 December 2020, in addition to a final instalment of Euro 1,400 thousand, with final maturity of 30 September 2024. In order to hedge interest rate risk, the company put in place on 29 July 2019 with Banco BPM two Interest rate swaps (IRS) for a total original notional amount of Euro 7,000 thousand, in addition to a payment plan. At 31 December 2020, this transaction reported an overall negative mark to market of Euro -31 thousand.
• (G) Subsidised loan for the research and development project undertaken by Zignago Vetro SpA for the construction of the new production plant and agreed on 28 November 2017 with Cassa Depositi e Prestiti for a nominal Euro 7,990 thousand. Repayment is over a maximum duration of 8 years, through half-yearly instalments and a maximum grace period of 3 years; no repayments have yet been made on the loan, of which only a small portion had been disbursed at 31.12.2020.
• (H) Loan subscribed by Zignago Vetro SpA on 28 November 2017 with BNL in relation to the loan at point (G) above for a nominal Euro 2,283 thousand. Repayment is over a maximum duration of 6 years, through half-yearly instalments and a maximum grace period of 6 months; no repayments have yet been made on the loan, of which only a small portion had been disbursed at 31.12.2020.
• (I) Loan signed by Zignago Vetro SpA on 7 May 2020 with BNL for a nominal Euro 10,000 thousand. Payment is through 9 half-yearly equal instalments of Euro 1,111 thousand from 7 August 2021, with final maturity of 7 May 2025. In order to hedge interest rate risk, the company put in place on 7 May 2020 with BNL two Interest rate swaps (IRS) for a total original notional amount of Euro 10,000 thousand, in addition to a payment plan. At 31 December 2020, this transaction reported an overall negative mark to market of Euro -82 thousand.
• (J) Loan signed by Zignago Vetro SpA on 18 June 2020 with BPER for a nominal amount of Euro 10,000 thousand. Payment is through 10 half-yearly equal instalments of Euro 1,017 thousand from 18 December 2020, with final maturity of 18 June 2025. In order to hedge interest rate risk, the company put in place on 18 June 2020 with BPER two Interest rate swaps (IRS) for a total original notional amount of Euro 10,000 thousand, in addition to a payment plan. At 31 December 2020, this transaction reported an overall negative mark to market of Euro -53 thousand.
• (K) Loan signed by Zignago Vetro SpA on 6 August 2020 with Intesa SanPaolo for a nominal amount of Euro 25,000 thousand. Payment is through 10 half-yearly equal instalments of Euro 2,500 thousand from 5 February 2021, with final maturity of 5 August 2025. In order to hedge interest rate movements, the company put in place on 6 August 2020 with Intesa SanPaolo an Interest rate swap (IRS) for a total original notional amount of Euro 25,000 thousand, in addition to a repayment plan covering the loan duration. At 31 December 2020, this transaction reported an overall negative mark to market of Euro 103 thousand.
• (L) Loan signed by Zignago Vetro SpA on 15 April 2020 with UBI for a nominal amount of Euro 10,000 thousand. Payment is through 8 half-yearly equal instalments of Euro 1,250 thousand from 15 July 2021, with final maturity of 15 April 2023.

In the subsequent paragraph of the Notes concerning the "Management of financial risks", additional disclosure is provided on derivative contracts in place at 31 December 2020, in accordance with applicable regulations.

(Euro thousands)		Balance at	Balance at
		31.12.2020	31.12.2019
FY	2020		31,858
Beyond	2020		112,116
FY	2021	37,402	---
Beyond	2021	130,791	---
Total		168,193	143,974

At 31 December 2020 and 2019, the future capital repayments of the non-current bank loans and borrowings were as follows:

Loan covenants

Against the loan reported in the table at letter (B), the Parent is bound by a set of financial covenant ratios to be calculated on the consolidated financial statements, which at 31 December were:

• (i) ratio between net financial debt and equity of not greater than 1.35;
• (ii) ratio between net financial debt and EBITDA of not greater than 2.25.

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 consolidated financial statements, which at 31 December were:

• (i) ratio between net financial debt and equity of not greater than 1.5;
• (ii) ratio of net debt to EBITDA, not exceeding 3.5 until 31 December 2021 and not exceeding 3 from 1 January 2022 to the end of the loan.

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

• (i) ratio between net financial debt and equity of not greater than 1.5;
• (ii) ratio between net financial debt and EBITDA of not greater than 3.

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 consolidated financial statements, which at 31 December were:

• (i) ratio between net financial debt and equity of not greater than 1.35;
• (ii) ratio between net financial debt and EBITDA of not greater than 2.65.

These covenants had been complied with at 31 December 2020.

ESG and loan covenants

Against the loan reported in the table at letter (C), the Parent is bound by a set of ESG covenant ratios to be calculated on the consolidated financial statements, which at 31 December were:

• (i) percentage of renewable energy used at production sites greater than or equal to 45%;
• (ii) specific water consumption per ton of glass produced (to be calculated as a percentage change over 2019) greater than or equal to -17%.

It should be noted that the covenant relating to the specific consumption of water per tonne of glass produced at 31 December 2020 was fully complied with, while the covenant relating to the percentage of energy from renewable sources used in production sites at 31 December 2020 was not complied (44.3%). It should also be noted that, on the basis of the contract signed, this has no consequence other than a lack of reduction in the spread applied to the loan.

Reconciliation of financial liabilities deriving from loans

As required by IAS 7, the following table summarises the cash flows concerning financial and derivative liabilities arising in the year:

Item	31 Dec 19	Cash	Non cash changes		Dec 31, 20
		flow	Acquisition	Other
Bank borrowings - non-current	115,521	28,027	-	(4,675)	138,873
Other non-current financial liabilities	1,876	(252)	-	-	1,624
Non-current financial liabilities (A)	117,397	27,775	-	(4,675)	140,497
Bank borrowings - current	31,858	5,544	-	-	37,402
Bank overdrafts on borrowings for
anticipation effects	16,062	(3,119)	-	-	12,943
Other current financial liabilities	14,296	263	-	-	14,559
Current financial liabilities (B)	62,216	2,688	-	-	64,904
Financial liabilities (A) + (B)	179,613	30,463	-	(4,675)	205,401

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)		31.12.2020	31.12.2019
A. Cash		4	6
B. Other cash equivalents		35,848	25,651
C. Securities held for trading		---	---
D. Liquidity	(A) + (B) + (C)	35,852	25,657
E. Current financial assets		53,017	57,722
F. Current bank loans & borrowings		47,815	80,504
G. Current portion of non-current debt		37,402	31,858
H. Other current financial payables		---	---
I. Current financial debt	(F) + (G) + (H)	85,217	112,362
J Net current financial debt	(I) - (E) - (D)	(3,652)	28,983
K. Non-current loans and borrowings		138,873	115,521
L. Bonds issued		---	---
M. Other non-current payables		---	---
N. Non-current financial debt	(K) + (L) + (M)	138,873	115,521
O. Net financial debt	(J) + (N)	135,221	144,504

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)	31.12.2020
	Loans and receivables	Fin. Assets fair value through P&L	Derivative at instruments	Investments held to maturity	AFS financial assets	Total	Note
Financial assets as per accounts
Non-current financial assets	45,233	---	---	---	---	45,233	(4)
Trade and other receivables	69,286	---	---	---	---	69,286	(7) (8)
Other current assets Other current	4,370	---	---	---	---	4,370	(8)
financial assets	8,260	---	---	---	---	8,260	(10)
Cash and cash equivalents	35,852	---	---	---	---	35,852	(11)
Total	163,001	---	---	---	---	163,001

(Euro thousands)	31.12.2020
	Other liabilities	Financial liabilities	Derivative instruments	Total	Note
	at amortised	at fair value
	cost	through P&L
Financial liabilities as per accounts
Provisions for risks and charges	1,445	---	---	1,445	(13)
Bank loans & borrowings	222,717	---	1,372	224,089	(15) & (18)
Trade and other payables	51,631	---	---	51,631	(19) & (20)
Other liabilities	14,559	---	---	14,559	(20)
Total	290,352	---	1,372	291,724

The company only values energy efficiency securities and derivative contracts at 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)

All assets and liabilities measured at fair value at 31 December 2020 are classified at level 2 of the fair value measurement hierarchy, with the exception of the provision for emission trading, whose value is based on the market quotations of the relative rights. During the year, no transfers occurred from Level 1 to Level 2 or Level 3 or vice-versa.

		31.12.2020	31.12.2019
16 – Other non-current liabilities	(Euro thousands)	1,624	1,876

The account includes at 31 December 2019 the deferred income recognised against the tax receivable for investments in new machinery under Legislative Decree 91/2014 matured in 2015, which is recognised to the income statement on the basis of the depreciation calculated on the investments.

		31.12.2020	31.12.2019
17 - Deferred tax liabilities	(Euro thousands)	1,958	1,967

(Euro thousands)	Balance at 31.12.2020			Balance at 31.12.2019
	Amount of temporary differences	Tax effect	Amount of temporary differences	Tax effect
Suspension of taxes reserve	6,044	1,686	6,044	1,686
Adjustment to inventories at average cost	541	170	541	170
Valuation TFR IAS 19	415	100	455	109
Acc. depreciation subject to substitute tax	4 4	2	4 4	2
Total		1,958		1,967

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

The Deferred tax liabilities include the temporary differences relating to depreciation calculated by the companies based on previous Italian fiscal regulations, the temporary differences arising on the adoption of IAS originating from the value of inventories calculated under the LIFO method, utilised for tax purposes, and those calculated under the average weighted cost method.

Deferred tax liabilities were also recorded for Euro 1,686 thousand relating to the reserves in suspension of taxes 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)
31 December 2018			1,908
Utilisations			---
Provisions			5 9
31 December 2019			1,967
Utilisations Provisions			9 ---
31 December 2020
			1,976
		31.12.2020	31.12.2019
CURRENT LIABILITIES	(Euro thousands)	151,407	177,557
		31.12.2020	31.12.2019
18 - Current bank loans and borrowings
	(Euro thousands)	85,216	112,362
The table below shows the composition of bank payables and the current portion of non-current
loans and borrowings:
(Euro thousands)		Balance at	Balance at
		31.12.2020	31.12.2019
Loan advances		33,500	63,500
Advances on bank drafts		12,942	16,054
Current portion of medium/long term loans		37,402	31,858
Bank payables for derivative contracts		1,372	950
Total		85,216	112,362
The financial situation at 31 December 2020 and 2019 is reported in the CONSOB table, reported at note 15 – Medium/long-term loans
		31.12.2020	31.12.2019
19- Trade and other payables	(Euro thousands)	51,631	50,899
The table below shows the breakdown of trade and other payables by geographic segment at 31
December 2020 and 2019:
(Euro thousands)		Balance at	Balance at
		31.12.2020	31.12.2019
Italy	48,424		45,914
E.U.		3,190	4,947
Other countries		1 7	3 8
Total		51,631	50,899
Payables to suppliers for fixed assets at 31 December 2020 amounted to Euro 5,227 thousand,
compared to Euro 4,355 thousand at 31 December 2019, due to investments in kilns to be
constructed.

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Loan advances	33,500	63,500
Advances on bank drafts	12,942	16,054
Current portion of medium/long term loans	37,402	31,858
Bank payables for derivative contracts	1,372	950
Total	85,216	112,362

		31.12.2020	31.12.2019
19- Trade and other payables	(Euro thousands)	51,631	50,899

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Italy	48,424	45,914
E.U.	3,190	4,947
Other countries	1 7	3 8
Total	51,631	50,899

Trade payables do not generate interest. The terms and conditions applied to related parties do not differ from those of third party suppliers.

		31.12.2020	31.12.2019
20 – Other non-current liabilities	(Euro thousands)	14,559	14,296
(Euro thousands)		Balance at	Balance at
		31.12.2020	31.12.2019
Employee payables		11,009	10,293
Social security institutions		1,733	1,886
Employee and consultants withholding taxes		1,383	1,578
Current portion of tax credit on Law 91/2014 investments		434	539
Contribution payables
Accrued liabilities and deferred income:
- for financial charges			---
Total		14,559	14,296

The composition of "other current liabilities" at 31 December 2020 and 2019 was as follows:

Employee payables concern vacation days matured but not taken, extra month's salary and premiums and managerial bonuses matured and paid in the following year.

Payables social security institutions

The payables to social security institutions principally refer to payables for contributions on salaries in the month of December and agents' commissions and consultants' fees.

The "Current portion of tax credit on Law 91/2014 investments" at 31 December 2020 included the portion maturing within 12 months of the tax credit for investments in new machinery under Legislative Decree No. 91/2014.

		31.12.2020	31.12.2019
21- Current tax payables	(Euro thousands)	---	---

The account is broken down in the following table.

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Parent for IRES from consolidation	---	---
Income taxes	---	---
Total	---	---

Tax payables are zero as they are recorded net of the advances paid for the current year and net of the effect matured in the year to obtain the "Patent Box" tax break.

NOTES TO THE MAIN INCOME STATEMENT ACCOUNTS

		2020	2019
22- Revenues	(Euro thousands)	238,635	230,091

The following table shows the breakdown by revenues:

(Euro thousands)	2020	2019
Core business products	227,122	218,499
Various materials	1,319	1,248
Service revenue	3,886	4,394
Others (Conai)	6,308	5,950
Total	238,635	230,091

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

(Euro thousands)	2020	2019
Italy	189,960	179,912
E.U.	37,881	41,009
Other countries	10,794	9,170
Total	238,635	230,091

Sales on the Italian market in 2020 totalled Euro 189,960 thousand, compared to Euro 179,912 thousand in 2019 (+5.6%). EU revenues decreased 7.6%, while non-EU revenues rose 17.7%.

		2020	2019
23- Raw materials, ancillaries, consumables
and goods	(Euro thousands)	56,322	50,586

Raw materials, ancillaries, consumables and goods were broken down as follows:

(Euro thousands)	2020	2019
Purchases	63,386	61,139
Changes in inventory of raw materials, ancilliaries,
consumables and finished goods	(2,971)	(7,335)
Changes in inventory of work-in-progress,	(4,093)
semi-finished and finished		(3,218)
Total	56,322	50,586

		2020	2019
24 - Service costs	(Euro thousands)	83,710	76,582

The composition of services costs is as follows:

(Euro thousands)	2020	2019
Energy and industrial services	56,177	50,583
Transport and other trading costs	13,940	13,768
Conai contribution	5,066	4,307
Other costs	8,527	7,924
Total	83,710	76,582

Energy costs increased mainly as a result of higher production volumes and reduced energy incentives. The Conai contribution increased mainly as a result of the doubling of the consortium subscription.

		2020	2019
25 - Personnel expense	(Euro thousands)	41,663	41,858

The breakdown of personnel expense is as follows:

(Euro thousands)	2020	2019
Salaries and wages	30,161	30,092
Social security expenses	9,582	9,835
Provision defined contribution plans	1,920	1,931
Total	41,663	41,858

Personnel expense is substantially unchanged compared to the previous year due to consistent production volumes as a result of the limited impact of the pandemic on production activities. The cost for the Share-based incentive plan totalled Euro 643 thousand and concerns the stock option plan outlined in the specific paragraph.

The following table reports the workforce at 31 December 2020 and 2019.

	31.12.2020	31.12.2019
Executives	1 3	1 4
White-collars	145	148
Blue-collars	530	538
Total	688	700

		2020	2019
26 - Amortisation & depreciation	(Euro thousand)	38,158	28,015
Amortisation and depreciation comprise:
(Euro thousands)		2020	2019
Depreciation		29,340	27,418
Amortisation		818	597
Total		30,158	28,015
		2020	2019
27 - Other operating expenses	(Euro thousands)	2,412	1,765
The breakdown of the "other operating expenses" is as follows:
(Euro thousands)		2020	2019
Provision of funds for contractual risk		---	---
Agents' supplementary indemnity provision		1 2	1 4
Total provisions for contingencies		1 2	1 4
Doubtful debt provision		8 3	8 7
Various taxes		903	743
Membership fees		328	341
Prior year charges		106	425
Losses on asset disposals		3 1	1 8
Other		949	137
Total other charges		2,317	1,664
Total		2,412	1,765

Other operating expenses include the recognition of losses on prior year receivables, with counterentry in the income statement through the doubtful debt provision of Euro 583 thousand. They also include approx. Euro 251 thousand in donations made by the company to regional authorities and healthcare facilities in response to the current COVID-19 emergency.

		2020	2019
28 - Other operating income	(Euro thousands)	3,085	2,929

The breakdown of "other operating income" is as follows:

(Euro thousands)	2020	2019
Prior year income	335	767
Gain on asset disposals	2 1	8 4
Prior year income from release of provisions	1,077	293
Payments on claims	---	---
Contribution on investments	966	550
Other income	2 7	5 9
Internal works (increase for labour capitalisation)	659	1,176
Total	3,085	2,929

Internal works principally concern the capitalisation of the personnel expense concerning current and future investments of the company.

Prior year charges includes Euro 583 thousand relating to losses on prior year receivables.

		2020	2019
29 - Investment income	(Euro thousands)	12,377	10,213

The account entirely relates to dividends resolved and received by the subsidiary Vetri Speciali SpA., a joint subsidiary.

		2020	2019
30 – Financial income	(Euro thousands)	1,297	1,596

The following table reports "financial income":

(Euro thousands)	2020	2019
Bank interest income	3 1	3 6
Interest from subsidiaries	958	955
Others	308	605
Total	1,297	1,596

		2020	2019
31- Financial expense	(Euro thousands)	2,354	2,232

"Financial expenses" are composed of:

(Euro thousands)		2020	2019
Interest on current accounts		116	154
Derivative financial charges		611	1,153
Loan interest		681	483
Financial expense on actuarial reval. post-employ. ben.		2 6	5 9
Discounts and other financial expenses		920	383
Total		2,354	2,232
		2020	2019
32 – Exchange gains/(losses)	(Euro thousands)	(105)	(4)
(Euro thousands)		2020	2019
Exchange rate gains		7	3 7
Exchange rate losses		(112)	(41)
Total		(105)	(4)
		2020	2019
33 - Income taxes	(Euro thousands)	(2,509)	6,776
The table below shows the composition of the income taxes between deferred and current taxes:
(Euro thousands)		2020	2019
Current income tax		(1,624)	7,177
Deferred tax charge (income)		(885)	(401)

The table below shows the reconciliation between the theoretical fiscal charge and the effective charge for the years under consideration:

Total (2,509) 6,776

(Euro thousands)	2020	2019
Profit before taxes	38,668	43,786
Ordinary rate applied	24.00%	24.00%
Theoretical tax charge	9,280	10,509
Permanent differences	(11,886)	(5,229)
Current IRES	(2,606)	5,280
Current IRES %	-6.7%	12.1%
Other tax charges (including IRAP)	9 7	1,496
Total effective tax charge	(2,509)	6,776
Actual tax charge (tax-rate)	-6.5%	15.5%

The income tax charge, which takes account of the partial fiscal exemption of "Investment income – dividends", estimated based on the application of current laws, amounts to Euro 5,089 thousand compared to Euro 6,776 thousand in 2019 (respectively 13.2% and 15.5%). The decrease in the tax rate mainly reflects the exemption from taxes of the investments of Zignago Vetro SpA (Industry 4.0).

Income taxes however present a negative value (net tax income) due to the recognition of the "Patent Box" tax benefit.

The IRES income tax and IRAP regional tax rates reflect the effective tax charge payable by the Company.

OTHER INFORMATION

Segment information

IFRS 8 paragraph 4 requires that in the case where the financial statements of Zignago Vetro SpA and the consolidated financial statements are published together, the segment information must be presented only for the consolidated financial statements.

Consequently, this information is not reported in the present financial statements.

Related party transactions

In relation to Consob Resolution No. 15519 of 27 July 2006, the financial statements present transactions with related parties separately. For completeness, the following disclosure required by IAS 24 is provided below.

The Company undertakes transactions with direct and indirect subsidiaries and with the parent company. All transactions undertaken with these parties are carried out with full transparency and at market conditions.

The table below shows the composition of the receivables of Zignago Vetro SpA with related companies at the balance sheet date:

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Trade receivables	2,441	1,930
Zignago Vetro Polska S.A.	262	359
Zignago Vetro Brosse SAS	488	444
Zignago Glalss Usa Inc.	2	2
Vetro Revet Srl	1 8	1 9
Vetri Speciali SpA and its subsidiaries	525	---
Santa Margherita SpA and its subsidiaries	903	849
Zignago Power Srl	239	249
Zignago Servizi Srl	---	8
La Vecchia Scarl	1	---
Multitecno Srl	3	---
Current tax receivables	3,331	3,547
Zignago Holding SpA	3,331	3,547
Other non-current assets	44,757	36,997
Zignago Vetro Polska S.A.	33,007	36,997
Zignago Vetro Brosse SAS	11,750
Other current financial assets	8,260	20,725
Zignago Vetro Brosse SAS	1,000	13,000
Zignago Vetro Polska S.A.	5,067	5,469
Zignago Glass USA Inc.	693	756
Vetro Revet Srl	1,500	1,500
Total receivables from related companies	58,789	63,199

The table below shows the composition of the payables of Zignago Vetro SpA with related companies at the balance sheet date:

(Euro thousands)	Balance at	Balance at
	31.12.2020	31.12.2019
Trade payables	6,826	5,560
Zignago Vetro Polska S.A.	1,925	1,568
Zignago Vetro Brosse SAS	---	5
Vetreco Srl	432	149
Vetro Revet Srl	1,740	1,405
Zignago Glass USA Inc.	(32)	8
Vetri Speciali SpA and its subsidiaries	262	---
Zignago Power Srl	1,843	1,586
Zignago Servizi Srl	416	538
Santa Margherita SpA and its subsidiaries	3 6	4 8
La Vecchia Scarl	5 5	132
Zignago Immobiliare Srl	5 0	3 9
Multitecno Srl	9	---
Zignago Holding SpA	9 0	8 2
Total payables to related companies	6,826	5,560

The table below shows the composition of the revenues of Zignago Vetro SpA from related companies in the year:

(Euro thousands)	2020	2019
Revenues	10,825	11,068
Zignago Brosse SAS	1,796	3,575
Zignago Polska S.A.	1,397	1,914
Vertro Revet Srl	4 9	3 4
Vetri Speciali Spa	2,492	9 3
Zignago Glass Usa Inc.	9 2	---
Santa Margherita SpA and its subsidiaries	4,312	4,560
Zignago Holding	2 3	2 3
Zignago Servizi Srl	4 4	4 4
Multitecno Srl	3 4	3 4
La Vecchia Scarl	1	1
Zignago Power Srl	585	790
Financial income	958	956
Zignago Brosse SAS	181	136
Zignago Glass Usa Inc.	9	9
Zignago Polska S.A.	750	798
Vetro Revet Srl	1 8	1 3
Total revenues from related parties	11,783	12,024

The table below shows the composition of costs of Zignago Vetro SpA from related companies in the year:

(Euro thousands)	2020	2019
Raw materials, ancillaries, consumables and goods	21,257	13,414
Zignago Vetro Brosse SAS	---	1
Zignago Vetro Polska S.A.	9,657	7,286
Vetri Speciali Spa	398	8
Vetro Revet Srl	6,672	4,846
Vetreco Srl	4,256	989
Santa Margherita SpA and its subsidiaries	253	284
Zignago Immobiliare Srl	2 1	---
Services	15,629	13,428
Zignago Vetro Brosse SAS	2 8	5 1
Zignago Vetro Polska S.A.	2,152	2,135
Zignago Glass USA Inc.	222	129
Vetreco Srl	1 9	---
Zignago Holding SpA	543	474
Santa Margherita SpA and its subsidiaries	6	1 7
Zignago Power Srl	8,939	7,385
Zignago Immobiliare Srl	385	186
Zignago Servizi Srl	2,784	2,592
La Vecchia Scarl	464	459
Multitecno Srl	7	---
Julioa Viyrum Spa	8 0	---
Total costs from related companies	36,886	26,842

In particular, the costs outlined include those of Zignago Power concerning the supply of electricity to the Fossalta di Portogruaro production site.

Information as per Article 1, paragraph 125 of Law No. 124/2017

In application of Article 1, paragraph 125 of law 124/2017, the amounts collected in 2020 from the Public Sector are presented below.

GSE	Photovoltaic Grant	T05F17855607/T05F17386107	26,872.91	31/01/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	46,538.35	28/02/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	43,227.39	31/03/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	40,490.11	30/04/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	39,808.71	31/05/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	40,009.19	30/06/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	39,268.80	31/07/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	40,838.20	31/082020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	40,571.70	30/09/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	31,085.64	31/10/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	48,113.20	30/11/2020	2020
GSE	Photovoltaic Grant	T05F17855607/T05F17386107	155,147.98	31/12/2020	2020
GSE	TEE Certificates	00717800247	692,865.36	29/05/2019	2019
GSE	TEE Certificates	00717800247	402,950.10	29/05/2019	2019
GSE	TEE Certificates	00717800247	375,000.00	17/11/2020	2020
CSEA	Energivori Grant	00884050279	40,448.65	11/05/2020	2016
CSEA	Energivori Grant	00884050279	241,776.85	31/03/2020	2017
CSEA	Energivori Grant	00884050279	48,689.47	14/04/2020	2017
CSEA	Energivori Grant	00884050279	54,947.21	14/04/2020	2019

Further details are reported in the National Register of State Aid, to which reference should be made.

The company also obtained from the Ministry of Economic Development assistance from the Sustainable Growth Fund, for the direct expenditure contribution, and from the Revolving Enterprise Support Fund for investments in research, for the financing part.

The benefits were formally granted by Decree No. 0004053 of 11.10.2017 for the industrial research and experimental development project entitled "Smart Glass - Smart factory in Glass containers". This is a project linked to the technological development of the production process of glass containers whose objective is the definition of an innovative production cycle and the creation of an innovative ICT infrastructure that guarantees the continuous information flow of every single production node.

During the year the sum of Euro 401,152.25 was paid to the company as a direct contribution to costs incurred for Euro 4,011,522.49. At the same time as the grant, the sum of Euro 3,610,370.24 was also disbursed in the initial months of 2021 through subsidized financing calculated on a prorata basis on the progress of the project.

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 Company 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 Company 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.

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

In this context, the company, 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 2020 or 2019.

Company risk management

The company 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.

Financial risk management

Currency risk

During the years presented Zignago Vetro SpA has not undertaken exchange risk hedge operations as such transactions are not considered significant.

Credit and country risks

The credit risk represents the exposure of the Company to potential losses deriving from the noncompliance with obligations by trading partners; this activity is subject to ongoing monitoring within the normal management of business operations.

Zignago Vetro SpA only deals with well-known and reliable clients. Customers that request extensions of payment are subject to a credit rate 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 and some clients not operating within the EU, Zignago Vetro SpA obtains letters of credit and advance payment. The majority of receivables are covered by an insurance policy.

The company constantly evaluate 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 trading partner credit risks are minimised through insurance instruments to protect against client insolvency or risks concerning the economic system in which the client operates.

Interest rate risk

The risk related to fluctuations in interest rates essentially concerns long-term loans agreed at variable rates.

Zignago Vetro SpA has undertaken Interest rate swaps whose notional value decreases exactly in line with the related loans (IRS) to hedge against interest rate risk.

The characteristics of the derivative contracts, their notional value and the market value at 31 December 2020 in Euro are as follows:

Company	Bank	Underlying	Date o f	Notional at the	Expiry	Market value at
			signing	reference date		31.12.2019
Zignago Vetro SpA	Unicredit	Loan	20/12/2019	54,000,000	20/12/2024	(469,652)
Zignago Vetro SpA	BPER	Loan	18/06/2020	10,000,000	18/06/2025	(52,815)
Zignago Vetro SpA	BNL	Loan	29/01/2018	22,000,000	29/07/2023	(243,599)
Zignago Vetro SpA	BNL	Loan	06/05/2020	10,000,000	07/05/2025	(81,868)
Zignago Vetro SpA	Intesa SanPaolo	Loan	13/12/2018	22,857,143	30/12/2022	(272,403)
Zignago Vetro SpA	Intesa SanPaolo	Loan	06/08/2020	25,000,000	05/08/2025	(102,747)
Zignago Vetro SpA	Credit Agricole Friuladria	Loan	27/12/2018	10,000,000	29/12/2023	(117,284)
Zignago Vetro SpA	Banco BPM	Loan	29/07/2019	6,626,667	30/06/2024	(31,335)
Total				160,483,810		(1,371,703)

The derivative instruments are utilised only with the intention of hedging, in order to reduce the interest rate risk. In compliance with IAS 39, the derivative financial instruments can be recorded in accordance with the "hedge accounting" method only when at the beginning of the hedge, the formal designation and documentation relating to the hedge exists, it is presumed that the hedge is highly effective initially and over the accounting periods. In the absence of these requirements, if the hedge accounting cannot be applied, the profits or losses deriving from the fair value of the derivative financial instruments are immediately recognised in the income statement, as per IAS 39.

Liquidity risk

The Company monitors the risk of a deficiency in liquidity utilising liquidity planning instruments. The Company objective is to maintain the balance between continuity of available funds and flexibility of utilisation through the use of instruments such as funding advances, advances on bank overdrafts and medium/long-term loans. Funding is widely available thanks to the strong rating assigned to the Company and the group.

The table below summarises the financial liabilities at 31 December 2020 on the basis of the contractual payments not discounted.

(Euro thousands)	2020
	Less than	From 3 to 12	From 1 to 5	Over 5	Total
	three	months	years	years
31 December 2020	months
Non-current loans and borrowings	---	---	138,873	---	138,873
Bank loans & borrowings and current
portion of medium/long-term loans	32,513	51,331	1,372	---	85,216
Trade and other payables	51,631	---	---	---	51,631
Other current liabilities	14,559	---	---	---	14,559
Current tax payables	---	---	---	---	---
Total	98,703	51,331	140,245	---	290,279

Against payables due within three months, the Company may avail of liquidity of Euro 35.9 million and payables to banks due within 12 months may be extended with the current lenders.

The same profile at 31 December 2019 was as follows:

(Euro thousands)	2019
	Less than	From 3 to 12	From 1 to 5	Over 5	Total
	three	months	years	years
31 December 2019	months
Non-current loans and borrowings	---	---	115,521	---	115,521
Bank loans & borrowings and current
portion of medium/long-term loans	79,554	31,858	950	---	112,362
Trade and other payables	50,899	---	---	---	50,899
Other current liabilities	14,296	---	---	---	14,296
Current tax payables	---	---	---	---	---
Total	144,749	31,858	116,471	---	293,078

Risks concerning fluctuations in energy prices and in particular of methane gas

Zignago Vetro SpA is exposed to fluctuations in energy purchase costs, a significant cost component in the glass sector. Where this risk is considered as significant, hedging operations 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 electricity at the Fossalta di Portogruaro plant is guaranteed by Zignago Power Srl, a wholly-owned subsidiary of Zignago Holding SpA, which has constructed a natural biomass plant.

Zignago Vetro SpA in 2020 also agreed supply contracts at fixed prices, in line with the production programmes. The exposure of the Company 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 2020 for audit and any other services carried out by the audit firm and entities associated with the audit firm.

(Euro thousands)
Type of service	Company providing the service	Company	Fees 2020
Audit	Auditor of the Parent	Parent	8 7
Other services	Parent audit firm network	Parent	3 3
		sub)	120
Audit	i) Auditor of the Parent	Subsidiaries	9
	ii) Network of audit firm of parent	Subsidiaries	6 8
Audit	i) Third Party Auditor	Joint venture	3 8
	ii) Parent audit firm network	Jointly held companies	---
Other services	i) Auditor of the Parent	Subsidiaries	---
	ii) Network of audit firm of parent	Subsidiaries
		sub)	115
		Total	235

Significant events after 31 December 2016 and outlook

SIGNIFICANT EVENTS AFTER 31 DECEMBER 2020

There were no significant events after 31 December 2020.

OUTLOOK

Although the pandemic has not yet concluded and it continues to impact lifestyles, consumption and markets, it is expected that the situation will normalise during the year and that container demand consequently will also benefit.

Against this backdrop, it is expected that the Company will increase sales and margins and maintain a solid and balanced financial position.

The Company continues to address this unexpected situation with determination and courage, stringently following the directives of the individual States and taking all further appropriate measures to ensure the safety of all personnel, business continuity and to maintain operating results.

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 12 March 2021 of Zignago Vetro S.p.A., the parent company, are shown below.

«Dear Shareholders,

We trust that you will be in agreement with the criteria for the preparation of the financial statements for the year ended 31 December 2020 and we 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 41,177,251.74, as follows:

		Euro 41,177,251.74»
- to "Retained earnings" the residual amount of with this reserve amounting to Euro 56,589,704.12	Euro	9,608,482.74
ordinary shares
as Euro 0.36 for each of the 87,691,025
- to dividends the amount of	Euro	31,568,769.00

Fossalta di Portogruaro, 12 March 2021

For the BOARD OF DIRECTORS The Chairman Mr. Paolo Giacobbo

Statement of the Financial Statements

(Art. 81-ter Consob

Regulation No. 11971/1999 and

subsequent amendments and additions)

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

• 1. The undersigned Mr. Roberto Cardini, CEO, and Mr. 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:
  2. the accuracy of the information on company operations and
  3. the effective application

of the administrative and accounting procedures for the financial statements for the period from 1 January 2019 to 31 December 2019.

• 1. No significant aspect emerged concerning the above.
• 1. We also declare that:
• 3.1. the financial statements:
  • a) are drawn up in conformity with the applicable international accounting standards recognised by the European Union in conformity with Regulation (CE) 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.
• 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, 12 March 2021

Zignago Vetro SpA

Mr. Roberto Cardini Mr. Roberto Celot Chief Executive Officer Executive Officer for Financial Reporting

CALL NOTICE OF THE ORDINARY AND EXTRAORDINARY SHAREHOLDERS' MEETING

Those with the right to attend and vote are called to the Ordinary and Extraordinary Shareholders' Meeting at the registered office of the company in Fossalta di Portogruaro (VE), Via Ita Marzotto, 8 on 27 April 2021 at 11AM in first call and on 28 April 2021 at the same time and place in second call, to discuss and vote upon the following

AGENDA

Ordinary session

• 1) Annual Financial Statements for the year ended 31 December 2020, 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 2020, Directors' Report, Board of Statutory Auditors' Report and Independent Auditors' Report.
  • 1.2) Allocation of the profit
• 2) Remuneration policy and report:

2.1 approval of the "Remuneration Policy 2021" contained in Section I, pursuant to Article 123-ter, paragraph 3-bis of Legislative Decree No. 58/98;

2.2 consultative vote on the "Fees paid in 2020" reported in Section II, pursuant to Article 123-ter, paragraph 6 of Legislative Decree No. 58/98;

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 2020

Extraordinary session

1) Proposal to delegate to the Board of Directors the power to increase the share capital against payment in one or more tranches, pursuant to Article 2443 of the Civil Code, with the exclusion of pre-emption rights pursuant to Article 2441, [Paragraphs 5, 6 and 8] of the Civil Code, to be reserved for subscription by the beneficiaries of the 2019- 2021 Stock Option Plan. Consequent amendment of Article 5.1 (Share Capital) of the By-Laws;

SHARE CAPITAL AND VOTING RIGHTS

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 308,975 treasury shares in portfolio, comprising 0.3511% of the share capital, for which the voting right is suspended. Any change in treasury shares will be communicated at the Shareholders' Meeting.

Each ordinary share assigns the right to one vote at the Shareholders' Meeting (excluding ordinary treasury shares for which the voting right is suspended in accordance with law). However, the Shareholders' Meeting of 28 April 2015 amended Article 8 of the By-Laws, introducing the loyalty shares mechanism, as per Article 127-quinquies of the CFA. In particular, in accordance with the stated Article 7-bis, two votes are assigned to each ordinary Zignago Vetro share held by the same shareholder of the company for a continuous period of at least 24 months, from their registration in a special list, set up and maintained by the company at the registered office. For the list of Shareholders maturing voting and loyalty share voting rights, reference should be made to the website www.zignagovetro.com Investors - Governance - Loyalty Shares section.

RIGHT TO ATTEND AND VOTE AT THE SHAREHOLDERS' MEETING

Pursuant to Article 106 of Decree Law No. 18 of 17 March 2020 (converted by Law. No. 27/2020 (the so-called "Cura Italia" Decree), as latterly amended by Decree Law No. 183/2020 (converted with amendments with Law No. 21/2021), attendance at the Shareholders' Meeting by those who have the right to vote is allowed exclusively through the designated agent.

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 16 April 2021, have the right to attend and vote at the Shareholders' Meeting. Those who hold shares only after 16 April 2021 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 22 April 2021). 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.

PARTICIPATION AT THE SHAREHOLDERS' MEETING AND ASSIGNING OF PROXY TO THE DESIGNATED AGENT

Pursuant to Article 106 of Decree Law No. 18 of 17 March 2020 (converted by Law. No. 27/2020 (the so-called "Cura Italia" Decree), as latterly amended by Decree Law No. 183/2020 (converted with amendments with Law No. 21/2021), attendance at the Shareholders' Meeting by those who have the right to vote is allowed exclusively through the designated agent.

Consequently, the Company has appointed Computershare S.p.A. - with registered offices in Milan, via Lorenzo Mascheroni No. 19 - to represent the shareholders pursuant to Article 135-undecies of Legislative Decree No. 58/98 and the cited Decree Law (the "Designated Agent"). Those entitled to attend and vote who wish to attend the Shareholders' Meeting must therefore grant the Designated Agent a proxy - with voting instructions - on all or some of the proposed resolutions on the items on the Agenda using the specific proxy form, including electronically, prepared by the Designated Agent in agreement with the Company, available on the Company's website www.zignagovetro.com, Investors - Governance - Shareholders' Meeting section, which includes a link to send the procedure.

The proxy form with voting instructions must be submitted following the instructions on the form itself and on the Company's website by the end of the second market day open prior to the Shareholders' Meeting, i.e. by 23 April 2021 for the first call and by 26 May 2021 in second call, and within the same deadline the proxy may be revoked.

The proxy, thus conferred, shall take effect only for those proposals in relation to which voting instructions have been given.

Please also note that the Designated Agent may also be granted proxies or sub-delegations pursuant to Article 135-novies of the Consolidated Finance Act, as an exception to Article 135-undecies, paragraph 4 of Legislative Decree No. 58/98, by following the instructions indicated in the form available on the Company's website at the address www.zignagovetro.com, Investors - Governance - Shareholders' Meeting section. Taking into account the current emergency, proxies may be granted by 26 April 2021 for the first call or by 27 April 2021 in case of second call (it being understood that the proxy holder may accept the proxies and/or instructions also after the above-mentioned deadline and before the opening of the meeting). In the same way, those entitled may revoke, within the same deadline, the proxy/sub-delegation and the voting instructions given.

In view of the limitations that may arise due to health requirements, the participation in the Shareholders' Meeting of the persons entitled to attend (the members of the corporate boards, the Secretary in charge and the Designated Agent) may also take place by means of telecommunications exclusively in the manner individually communicated to them, in compliance with the applicable regulations for this eventuality.

The Designated Agent will be available for clarification or information at 0246776814 or at the following e-mail address ufficiomi@computershare.it.

Shareholders are informed that the Company reserves the right to supplement and/or amend the above instructions in light of intervening needs following the current epidemiological emergency situation from COVID-19 and its currently unforeseeable developments.

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, indicating the further matters proposed or by presenting proposals concerning matters already on the Agenda. The request must be sent by certified email to assembleezignagovetro@legalmail.it at the registered office of the company at Via Ita Marzotto, 8, Fossalta di Portogruaro (VE) for the attention of Mr. Roberto Celot (CFO and Investor Relations Manager), or to g.canciani@zignagovetro.com by means of a digitally signed document. 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.

OTHER RIGHTS OF THOSE ENTITLED TO VOTE

In relation to the fact that attendance at the Shareholders' Meeting is exclusively permitted through the Designated Agent, those with voting rights and who wish to draw up proposals to be discussed and voted upon regarding matters on the agenda should present them by 16 April 2021. These proposals shall be published by 19 April 2021, on the Company website www.zignagovetro.com, Investors - Governance - Shareholders' Meeting section, in order to allow those with voting rights to express their vote knowledgeably, also taking into account these new proposals and to permit the Designated Agent to collect any voting instructions on such. Within the aforementioned deadline, a communication must be received declaring the ownership of the holding issued by the intermediaries who hold the accounts on which the shares of the applicants are registered.

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 seven business days prior to the Shareholders' Meeting in first call (therefore by 16 April 2021). In order to exercise this right, certification by the intermediary confirming the right to vote must be sent to the Company. Questions received shall be answered no later than 22 April 2021 by publication on the Company's website, www.zignagovetro.com, Investors - Governance - Shareholders' Meetings section.

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 Investors - Governance - Shareholders' Meetings section https://zignagovetro.com/investitori-governance/ in the Investors section, as well as at the storage mechanism at

• on 26 March 2021: the report on the authorisation to purchase and dispose of treasury shares, as well as the explanatory report on the items on the ordinary and extraordinary agenda;

• by 30 March 2021, 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, the Non-Financial Report and the Remuneration Policy and Compensation Paid 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;

The Company thanks the shareholders for their cooperation in the exact execution of this notice and of the underlying laws (including special laws).

The Company reserves the right to communicate any changes or additions to the information contained in this notice in accordance with any legislative and/or regulatory provisions, or in any case in the interest of the Company and the Shareholders.

Fossalta di Portogruaro, 12 March 2021

For the Board of Directors

Mr. Paolo Giacobbo

SUMMARY OF THE SHAREHOLDERS' MEETING RESOLUTIONS

the annual financial statements for the year ended 31 December 2019 as proposed by the Board of Directors on 13 March 2020 and previously announced in a press release to the market on the same

the distribution of a dividend totalling Euro 31.6 million, as Euro 0.36 for each of the 87,691,025 outstanding ordinary shares, corresponding to a pay-out of approx. 70% of the consolidated profit: coupon No. 13, with ex-date of 13 May, record date of 14 May and payment date of 15 May 2019.

in accordance with Article 114-bis of Legislative Decree No. 58 of February 24, 1998, the "2019- 2021 Stock Option Plan" reserved for the chairperson and/or chief executive officer of the company,

The Plan stipulates the free assignment to Beneficiaries of options for the paid subscription and/or purchase of a maximum 1,320,000 ordinary shares of the Company, in the ratio of (1) share for each option, according to the terms and conditions of the Plan. In particular, the options may be exercised by the Beneficiaries on condition that, in the period between 1 October and 31 December 2021, the average official closing price of the ordinary shares of the company is equal to or above Euro 9.70. The vesting period, during which the assigned options may not be exercised, is fixed between the allocation date and

The Company have considered, in line with best market practice adopted by listed companies in Italy, with particular regard to the STAR segment, that share-based remuneration plans are an effective instrument to and create loyalty among those in key roles, in order to improve motivation, foster loyalty towards the company and the Group, key personnel for their efforts dedicated to the growth of the

The adoption of share-based remuneration plans is aligned with the recommendations of the Self-Governance Code, which at Article 6 these plans as a suitable tool to enable the alignment of the

interests of the executive directors and senior executives with those of shareholders, thus facilitating the

in addition to the senior executives on the internal executive committee.

the maturation date of the options. The Plan duration is until 31 December 2024.

over recent and aligning their interests with those of the shareholders.

pursuit of the priority objective of creating value over the medium-long term;

The Shareholders' Meeting of

2019-2021 Stock Option Plan

company and of the Gr

date;

2019 Annual Accounts and dividend

the conferment to the Board of Directors of all powers necessary and/or beneficial to completely and fully execute the "2019-2021 Stock Option Plan" -, as shares in service of exercising the options: () treasury shares in portfolio of the company or to be acquired on the market as per the applicable regulation; and/or (ii) newly issued shares from the share capital increase which the Extraordinary

the revocation for the outstanding period, which will conclude on 27 October 2019, and for the part not yet exercised, of the previous motion to acquire treasury shares of the Shareholders' Meeting of 27 April 2018, and simultaneously, as per the means set out in the relative regulation, the conferment of a new. The buy back, also in view of the Group's equity structure, may, among other creation objectives or remuneration plans for employees, executive directors and collaborators of SpA and its

a) validity for a period of 18 months from the Shareholders' Meeting (expiry: November 2, 2020); b) maximum number of shares which may be acquired not in excess of one-tenth of the nominal

c) price of each share acquired must not be 20% above or below the price of the ordinary share

With regard to the Board of Directors' mandate, the Shareholders' Meeting established the number of Directors of the new board as thirteen, who will remain in office for three years (and therefore until the approval of the 2021 Annual Accounts). On the basis of the slates presented by the majority shareholder

With the approval of 2018 Annual Accounts, the mandate of the Board of Statutory Auditors concludes. For the 2019-2021 three-year period, the Shareholders' Meeting, on the basis of the slates presented by

The Shareholders' Meeting approved the Remuneration Report in accordance with Article 123-ter,

***********************

In particular, Ravera Barbara was indicated on the slate presented by the minority shareholders.

Shareholders' Meeting of the company may be called to consider.

subsidiaries. The has the following features:

Appointment of the Board of Statutory Auditors

paragraph 6 of Legislative Decree 58/98, as amended.

share capital;

Appointment of Directors

the majority shareholder

Other Motions

Revocation and conferment of new for the Board to acquire treasury shares

recorded on the regulated market session before each transaction.

Board of Statutory Auditors Report

(Art. 153 – Legislative Decree No. 58 of 24 February 1998)

BOARD OF STATUTORY AUDITORS' REPORT

to the Shareholders' Meeting of ZIGNAGO VETRO SpA

on the year 2020

in accordance with Article 153 of Legislative Decree 58/1998 and Article 2429 of the Civil

Code

Dear Shareholders,

this report concerns the activities carried out by the Board of Statutory Auditors of Zignago Vetro Spa (hereafter the "Company" and together with its subsidiaries, the "Group") in the financial year ending 31 December 2020 (hereafter the "Financial Year").

As the reader will be aware, 2020 was characterised by great uncertainty brought about by the origin and progression of the COVID-19 pandemic. Government recommendations and measures issued beginning in March and continuing throughout the year, including the declaration of the state of emergency, called for particularly stringent measures to limit the spread of the pandemic throughout the country, such as the total or partial lockdowns.

The activities of the Company and the Group, which are considered essential, were not interrupted and continued "remotely" wherever possible. The activities of the Board of Statutory Auditors also continued in this way, through the acquisition of data and information in electronic format and the holding of its meetings via video/audio conference. Given the Company's reliability and timeliness in ensuring meetings could be properly held and information could be exchanged adequately, the Board of Statutory Auditors believes that working remotely in this way did not diminish or otherwise compromise the reliability of the information received or the efficacy of the work conducted.

1.- In carrying out its activities of supervision and control, the Board of Statutory Auditors communicates that it:

• oversaw compliance with law, the By-Laws and with the principles of correct administration, in compliance with the applicable regulation, taking account of the conduct principles issued by the Italian Accounting Profession (Consiglio nazionale dei Dottori Commercialisti ed Esperti Contabili);
• participated at the Shareholders' Meeting, the meetings of the Board of Directors, the Related Parties Committee, the Appointments and Remuneration Committee and the Control and Risks Committee and received from the Directors periodic information on the general operating performance, on the outlook, on the major transactions with economic, financial and equity impact approved and implemented during the financial year by the company and by the group companies, also in compliance with Article 150, paragraph 1 of Legislative Decree No. 58 of 24 February 1998 ("C.F.A.2"). This information is adequately presented in the Directors' Report, to which reference should be made.

The Board can reasonably assure that the actions deliberated and taken are in conformity with law and the By-Laws of the company and were not imprudent, risk related, in potential conflict of interest or contrary to the deliberations taken by the Shareholders' Meeting or such as to compromise the integrity of the company assets; The motions of the Board of Directors are executed by management and by the organisation while ensuring maximum compliance;

• verified the absence of atypical or unusual operations as defined by Consob communication DEM/6064293 of 28 July 2006, both with regards to the Group companies and the related parties or third parties, while not receiving indications in this regard from the Board of Directors, from the independent audit firm, in addition to the director in charge of the internal control and risk management system.
• noted that standard operating procedures currently implemented within the Group ensure that the transparency and substantial and procedural correctness are such as to ensure that the terms of all related party transactions respect current market conditions. With regards to inter-company and related party transactions, the notes to the financial statements provide adequate disclosure with regards to the features of the transactions and the relative financial statement effects. Their review did not highlight any critical issues concerning their appropriateness and responsiveness to the company and Group interest. In this regard, the Board of Statutory Auditors indicates that the company has adopted related party transaction procedures in compliance with Consob Regulation No. 17221 of 12 March 2010 and Consob Communication of 24 September 2010. The Board of Statutory Auditors verified compliance of the procedures adopted with the principles of the Regulation, in addition to their observance;
• acquired information and supervised, in relation to our duties, on the effectiveness of the company's organisational structure, the adherence to principles of best practice and on the organisational development of the Group through the collation of information from the managers of the relevant company departments and through meetings with the independent audit firm, also for the exchange of relevant information and data. These activities did not highlight any irregularities;
• oversaw and verified, to the extent of its responsibility, the adequacy of the administrativeaccounting system, in addition to its reliability to correctly represent operating events Based on the analyses carried out and the information obtained from various meetings with the Executive Director responsible for the internal control and risk management system, with the Internal Control Manager, with the Executive Responsible for Financial Reporting and with the Internal Audit Manager, and through attendance at the Control & Risks Committee and Supervisory Board meetings of Zignago Vetro SpA, the adequacy and reliability of the internal control and risk management system was established.
• met with the representatives of the independent audit firm appointed to execute the legallyrequired audit, for the exchange of significant data and information, to be informed on the main risks to which the company is exposed and upon the relative mitigation measures implemented, in addition to checks on the proper keeping of the accounting records and the recording of operating events. No significant observations emerged from the meetings, neither on their part or on our part;
• oversaw, according to the means for concrete implementation of that established in the Self-Governance Code of listed companies adopted by the company, according to the terms outlined in the corporate governance and ownership structure report, approved by the Board of Directors of 12 March 2021. During the year 2020, the Board of Statutory Auditors verified the correct application of the criteria and procedures for ascertaining the independence of the members of the Board of Directors, and likewise verified satisfaction of the independence requirements, sending the results to the Board of Directors. Moreover, it successfully carried out the self-assessment according to the "Rules of Conduct of the Board

of Statutory Auditors of listed companies" issued by the Italian Accounting Profession (Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili), as reported in the "Corporate Governance and Ownership Structure Report 2020"

• established that the company has implemented the necessary actions and measures to maintain and update the Organisational Model as per Legislative Decree No. 231 of 8/6/2001 in line with its functions and applicable law. The Supervisory Board reported to the Internal Control Committee and the Board of Directors upon its activities and did not communicate any significant matters
• verified the adequacy with which instructions were given by the parent to the principal subsidiary companies for the transmission of the necessary information to ensure compliance with law and the correct implementation of the financial disclosure process.

As the Internal Control and Audit Committee, in accordance with Article 19 of Legislative Decree No. 39 of 27 January 2010, as amended by Legislative Decree No. 135 of 17 July 2016, in implementation of directive 2014/56/EC, the Board of Statutory Auditors during the year:

• a) monitored the financial disclosure process, which was considered appropriate in terms of its integrity;
• b) monitored the legally-required audit of the statutory and consolidated financial statements and liaised with the independent audit company to assess the work plan prepared, its implementation and the results of the audit process;
• c) verified the proper compilation of the financial statements, of the consolidated financial statements and the directors' report as per Article 40, paragraph 2/bis of Legs. Decree No. 127/91 reported in a single document, in addition to their compliance with law, through direct verifications and the information obtained from the Independent Audit Firm;
• d) we oversaw compliance with the provisions of Legislative Decree 254/2016, verifying the existence of adequate rules and procedures to oversee the process for its collation, formation and presentation. The Board of Statutory Auditors expresses, therefore, an assessment upon the adequacy of the process for the drafting of the non-financial disclosure, on the basis of the socioenvironmental strategic objectives of the Group, and does not raise any issues to be submitted to the Shareholders' Meeting.
• e) executed the supervisory functions set out under Article 19 of Legislative Decree 39/2010 and informed the Board of Directors, as per Article 19, paragraph 1, of the above-mentioned decree, on the outcome of the legally-required audit;
• f) verified and monitored the independence of the Independent Audit Firm as required by statutory law and, in particular, with regards to the adequacy of their non-audit services, as per Article 5 of Regulation (EC) No. 537/2014.
• g) with reference to the Covid-19 health emergency, the Board of Statutory Auditors has examined the information provided by the Board in the Directors' Report on the introduction of safety measures and the economic impact of the Covid-19 pandemic on the Group and the industry. The Directors conclude by pointing out that there are no elements of uncertainty regarding the valuation of the Group's financial assets.

In 2020, the Board of Statutory Auditors met on 9 occasions, while attending also the meetings of the Board of Directors, the Control and Risks Committee, the Appointments and Remuneration Committee and the Related Parties Committee.

Taking account of the information acquired, the Board of Statutory Auditors considers that operations were carried out in accordance with the principles of correct administration and that the organisational structure, the internal controls system and the administrative-accounting system are overall adequate to company needs.

2.- With regards to relations with the Independent Audit Firm, KPMG Spa, the Board of Statutory Auditors, as Internal Control and Audit Committee reports:

• a) The reports of the Independent Audit Firm, KPMG SpA, issued on 29 March 2021, on the statutory and consolidated financial statements at 31 December 2020 of Zignago Vetro SpA, prepared in accordance with Article 14 of Legislative Decree No. 39/2010 and Article 10 of Regulation EC 537/2014 express an opinion without exceptions.
• b) the Independent Audit Firm, KPMG SpA, also on 29 March 2021 sent to the Board of Statutory Auditors, in its role of Internal Control and Audit Committee, the additional report as per Article 11, paragraph 1 of Regulation EC 537/2014. This report shall be sent to the Board of Directors as provided for in the applicable regulation
• c) the independent audit firm, KPMG SpA in addition issued on 29 March 2021, the report on the Consolidated Non-Financial Report at 31 December 2020, prepared in accordance with Legislative Decree No. 254/2016 and Article 5 of Consob Regulation No. 20267 of 18 January 2018, with which it states that elements have not come to its attention indicating that the Nonfinancial report of the Zignago Vetro Group, relating to the year ending 31 December 2020 has not been prepared, for all significant aspects, in compliance with Articles 3 and 4 of this Decree.
• d) the Independent Audit Firm, KPMG SpA, also issued on 29 March 2021 the statement regarding its independence, as required by Article 6 of Regulation (EC) 537/2014, indicating no situations which may compromise such independence. Finally, the Board notes that the Transparency report prepared by the independent audit firm and published on its website in accordance with Article 18 of Legislative Decree 39/2010.
• e) the Independent Audit Firm, KPMG SpA, and the companies belonging to the KMPG SpA network, in addition to the duties established by the regulation for listed companies, as indicated in the Notes to the consolidated financial statements, received additional assignments for other audit services, whose fees are reported as an annex to the financial statements, as required by Article 149-duodecies of the Issuers' Regulation. Services other than auditing are approved in advance by the Board of Statutory Auditors, which assesses their appropriateness and benefit in accordance with the criteria of Regulation EC 537/2014.

Noting the statement of independence issued by KPMG SpA and the transparency report produced, in addition to the appointments assigned other than the audit, the Board of Statutory Auditors considers that no critical aspects exist in terms of KPMG SpA's independence.

1. • The Board of Statutory Auditors is not aware of any events or notices which require reporting to the Shareholders' Meeting. In the course of the activities carried out and based on the information obtained, no omissions, matters, irregularities or circumstances that would require reporting to the Supervisory Authority or mention in the present report were noted.

4.- The Board of Directors communicated in a timely manner to the Board of Statutory Auditors the financial statements and the Directors' Report. To the extent of its remit, the Board of Statutory Auditors notes that the formats adopted are legally compliant, in line with the accounting standards adopted, described in the notes, are adequate in relation to the activities and transactions carried out by the company and report that the financial statements correspond to the events and information which the Board of Statutory Auditors has become aware during its attendance at the meetings of the corporate boards and in the course of its oversight activities.

5.- The Board of Statutory Auditors has expressed its favourable opinion on the proposals of the Appointments and Remuneration Committee regarding the determination of the remuneration of Senior Directors.

6.- The Board of Statutory Auditors indicates that Zignago Vetro SpA is controlled by Zignago Holding S.p.A., which holds 65% of the share capital. The corporate governance and ownership structure report illustrates the reasons for which Zignago Vetro SpA is considered not to be subject to the direction or management of Zignago Holding SpA.

The Board of Statutory Auditors, taking account of the results of the specific duties carried out by the independent audit firm with regards to accounting controls and the reliability of the statutory financial statements, in addition to the oversight activities carried out, expresses a favourable opinion on the approval of the statutory financial statements at 31 December 2020 and on the relative proposals drawn up by the Board of Directors.

Fossalta di Portogruaro, 30 March 2021

THE BOARD OF STATUTORY AUDITORS

Ms.	Alberta Gervasio	Chairperson
Mr.	Andrea Manetti	Statutory Auditor
Mr.	Carlo Pesce	Statutory Auditor

Attachment to the BOARD OF STATUTORY AUDITORS' REPORT TO THE SHAREHOLDERS' MEETING OF 27 APRIL 2021

In accordance with article 144.5 of the Issuers' Regulations (Consob Regulation enacted through Legislative Decree 58/98) the list of offices that each of the members of the Board of Statutory Auditors hold, at the date of publication of the supervisory activities report prepared in accordance with article 153, paragraph 1 of Legislative Decree No. 58/98, in companies under Book V, Chapter V, Heading V, VI and VII of the civil code, are listed.

Ms. Alberta Gervasio

List of offices held:

1. Chairperson of the Board of Statutory Auditors of Zignago Vetro SpA until approval of the financial statements at 31/12/2021;

Board of Directors Appointments:

• 1. Chief Executive Officer of Bluenergy Group Spa, until approval of the financial statements at 30/06/2022;
• 1. Sole Director of Bluenergy Home Service Srl with expiry on revocation;
• 1. Executive Director of Bluenergy Assistance Srl with expiry on revocation;
• 1. Chief Executive Officer of Rettagliata Tech Srl, until approval of the financial statements at 30/06/2022;
• 1. Executive Director of C.I.EL. Impianti Srl with expiry on revocation;
• 1. Director of Banca di Udine Credito Cooperativo Soc. Coop., part of the Bancario cooperativo Iccrea Group, until approval of the financial statements at 31/12/2022. She has been a member of its executive committee since December 2020.

No offices concluded in the last five-year period are reported nor those of alternate auditor.

• Number of offices held in Italian companies with shares listed on Italian regulated markets or of other European Union countries and with companies issuing financial instruments to the public in a significant degree in accordance with Article 116 of Legislative Decree No. 58/98: 1
• Total number of offices held: 8

Mr. Andrea Manetti

List of offices held:

• 1. Chairman of the Board of Statutory Auditors of SM Tenimenti Pile e Lamole e Vistarenni e San Disdagio Srl – Agricultural company until approval of the financial statements at 31/12/2020;
• 1. Statutory Auditor of Cà del Bosco Srl Agricultural Company until approval of the financial statements at 31/12/2021;
• 1. Statutory Auditor of Cà del Bosco Hospitality Srl until approval of the financial statements at 31/12/2021;
• 1. Statutory Auditor of lnvestinfood SpA until approval of the financial statements at 31/12/2022;
• 1. Statutory Auditor of Cantina Mesa Srl Agricultural Company until approval of the financial

statements at 31/12/2020;

• 1. Statutory Auditor of Vetro Revet Srl until approval of the financial statements at 31/12/2022;
• 1. Statutory Auditor of Julia Vitrum Srl until approval of the financial statements at 31/12/2021;
• 1. Statutory Auditor of Zignago Vetro SpA until approval of the financial statements at 31/12/2021;
• 1. Statutory Auditor of Santa Margherita SpA until approval of the financial statements at 31/12/2020;
• 1. Statutory Auditor of Ca' Maiol Srl Società Agricultural Company until approval of the financial statements at 31/12/2020;
• 1. Statutory Auditor of Zignago Holding SpA until approval of the financial statements at 31/12/2020;
• 1. Statutory Auditor of Vetri Speciali SpA until approval of the financial statements at 31/12/2022;

Board of Directors appointments:

• 1. Sole Director of IO Dicembre Srl with expiry on revocation;
• 1. Sole Director of REM Srl with expiry on revocation;
• 1. Sole Director of Italian Glass Moulds Srl with expiry on revocation;
• 1. Sole Director of Arche Srl with expiry on revocation;
• 1. Sole Director of Stellin Srl with expiry on revocation;
• 1. Sole Director of Svir & Partners Srl with expiry on revocation;
• 1. Sole Director of Stellin Srl with expiry on revocation;
• 1. Sole Director of Stellin Srl with expiry on revocation;

No offices concluded in the last five-year period are reported nor those of alternate auditor.

• Number of offices held in Italian companies with shares listed on Italian regulated markets or of other European Union countries and with companies issuing financial instruments to the public in a significant degree in accordance with Article 116 of Legislative Decree No. 58/98: 1
• Total number of offices held: 20

Mr. Carlo Pesce

List of offices held:

• 1. Chairman of the Board of Statutory Auditors of Zignago Holding SpA, until approval of the financial statements at 31/12/2020;
• 1. Statutory Auditor of Zignago Vetro SpA until approval of the financial statements at 31/12/2021;
• 1. Chairman of the Board of Statutory Auditors of Carraro SpA until approval of the financial statements at 31 December 2020;
• 1. Chairman of the Board of Statutory Auditors of Banca di Credito Cooperativo di Venezia Padova Rovigo – Banca Annia until approval of Financial Statements at 31/12/2022;
• 1. Chairman of the Board of Statutory Auditors of NICE Group SpA, until approval of the financial statements at 31/12/2020;
• 1. Statutory Auditor of the Board of Statutory Auditors of Santa Margherita e Kettmeir e Cantine Torreselle SpA until approval of the financial statements at 31/12/2020;
• 1. Chairman of the Board of Statutory Auditors of Vetri Speciali SpA until approval of the financial statements at 31/12/2022;
• 1. Statutory Auditor of CEU SpA until approval of the financial statements at 31/12/2022;
• 1. Statutory Auditor of Probest Service SpA until approval of the financial statements at 31/12/2022;
• 1. Statutory Auditor of S.M. Tenimenti Pile e Lamole e Vistarenni e San Disdagio Srl Agricultural company until approval of the financial statements at 31/12/2020;
• 1. Chairman of the Board of Statutory Auditors of Cantina Mesa S.r.l. Società Agricola until approval of the financial statements at 31/12/2020;
• 1. Statutory Auditor of Zignago Servizi Srl until approval of the financial statements at 31/12/2021;
• 1. Statutory Auditor of Ca' Maiol Srl Società Agricultural Company until approval of the financial statements at 31/12/2020;
• 1. Statutory Auditor of Pometon S.p.A. until approval of the financial statements at 31/12/2021;
• 1. Member of the Supervisory Board of Zignago Vetro Polska S.A.;

Board of Directors Appointments:

• 1. Chairman of the Board of Directors of BLM S.p.A. until approval of the financial statements at 31 December 2020;
• 1. Chairman of the Board of Directors of Adige S.p.A. until approval of the financial statements at 31 December 2020;
• 1. Chairman of the Board of Directors of Adige-Sys S.p.A. until approval of the financial statements at 31 December 2020;
• 1. Sole Director of Immobiliare Tre B Srl until revocation;
• 1. Director of ACB Group SpA, until approval of the financial statements at 31 December 2020.

No offices concluded in the last five-year period are reported nor those of alternate auditor.

• Number of offices held in Italian companies with shares listed on Italian regulated markets or of other European Union countries and with companies issuing financial instruments to the public in a significant degree in accordance with art 116 of Legislative Decree No. 58/98: 2.
• Total number of offices held: 20

Fossalta di Portogruaro, 30 March 2021

THE BOARD OF STATUTORY AUDITORS

Ms. Alberta Gervasio	Chairperson
Mr. Andrea Manetti	Statutory Auditor
Mr. Carlo Pesce	Statutory Auditor

Independent

Auditors' Report

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

The attached auditors' report and the related separate 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.

Key audit matter		Audit procedures addressing the key audit matter
The separate financial statements at 31 December 2020 include inventories of €67.0 million, net of the allowance for inventory. write-down of €6.4 million.		Our audit procedures included:
		- understanding the process for the measurement of inventories and the related IT environment and assessing the design and implementation of controls and procedures to assess the operating effectiveness of material controls;
Determining the allowance for finished product write-down is a complex accounting estimate, entailing a high level of judgement as it is affected by many factors, including:
	- the characteristics of the Company's business segment;	- checking any discrepancies between the previous years' forecast and actual
	the subjectivity inherent in a specific batch measurement method;	inventory write-downs and losses, in order to check the accuracy of the joint ventures' directors' estimation process;
	slow-moving issues;
	the products' strong customisation.	analysing the reasonableness of the assumptions used to measure the
For the above reasons, we believe that the measurement of inventories is a key audit matter.		allowance for inventory write-down through discussion with the relevant internal departments and checks of the supporting documentation; comparing the assumptions with historical figures and our knowledge of the Company and its operating environment;
		assessing the appropriateness of the disclosures provided in the notes about inventories.

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ZIGNAGO VETRO S.p.A. Registered office: Fossalta di Portogruaro (VE), Via Ita Marzotto 8