pavan group annual report 2012

Technology to feed a

growing world2012 ANNUAL REPORT

This document describes the process of economic, social and environmental reporting that Pavan has adopted in recent years.

Its publication stems from management’s desire to make the company’s activity transparent, by analysing not only the economic aspects, but also the social and environmental consequences.

All this is part of a corporate philosophy oriented towards sustainability and the integrated type of management system adopted: quality, safety, environment and social responsibility. This sixth edition contains data and information relating to the entire Pavan Group* updated to December 2012.

*Pavan s.r.l., Golfetto Sangati s.r.l., V.AL.IN. s.r.l., Pizeta s.r.l., Tecnel s.r.l.

Introduction

Pavan Group - Annual Report 2012

INDEX

Food Tech Master

Organisation chart

Installations

Financial results

Added value

42

44

10

46

48

Ipack-ima 2012 39

Open Day 2012 41

CEO’s message Case histories5 16

Key figures 8

Corporate profile 6

Technical innovation 13

Technological Innovation 14


Sustainability

54

Human resources 50

Corporate social responsibility

56

Study, sport, culture

52

Clean energy

Directors and auditors

60

62


A strategy based on three key factors and

results up by 15%

”

“

4


Dr. Andrea CavagnisChief Executive OfficerPavan Group

5

The Pavan Group posted sales of 136 million Euro in 2012, up by 11% with respect to the previous year. EBITDA climbed 15% to 22 million Euro and, for the first time, net profit exceeded 10 million Euro.

With its export-oriented approach, the Pavan Group aims to penetrate the fastest-growing markets featuring positive population growth trends and an expanding food-processing sector. Some 75% of the turnover was generated in non-EU markets, enabling the Group to grow by more than 50% over the past 5 years.

Such a marked internationalisation stems from balanced internal growth, well-pondered acquisitions and the Group's self-financing policies. This approach has reduced the Group's exposure to uncertainties which, in recent times, have rarely afforded opportunities for success. The future strategy focuses on three key areas: cost control, customer service and product innovation. Firstly, attention will be devoted to the operational management of manufacturing plants and the steady improvement of efficiency over time, a commitment reflected in the Group's internal organisation geared towards reducing all costs

that do not generate tangible value for customers. In tune with this approach, a photovoltaic system was installed in 2012 capable of making the Golfetto Sangati production facility in Quinto di Treviso energy-independent , with consequent financial savings combined with reduced CO2 emissions.

Proper maintenance coupled with regular upgrading ensure that plants installed by the Pavan Group are able to operate in a fully efficient manner for decades. This is why a timely and effective after-sales service is strategic for maintaining lasting relationships and loyalty of customers. Consequently, the Group continues to invest in this area, in terms of human resources, equipment and operating methods.

The food-processing sector is often regarded as highly traditional but, in actual fact, product innovations have revolutionised the appearance and nature of products found in shops nowadays, compared to 15 years ago. The evolution has involved food products as well as packaging technologies, a segment that grew by more than 20% in 2012.

Product innovation is also a driving force in the Snacks division, the turnover of which rose by 20%. This division tackles an industry with a high propensity for experimentation in the quest for new and healthy products. Golfetto Sangati, the latest addition to the Pavan Group, contributed to growth with an increase in turnover of almost 20%, deriving from the manufacture of important plants combining milling and pasta-production processes.

The forecasts indicate a medium-term growth, thus the Group looks forward with confidence to achieving its ambitious annual turnover target of 150 million Euro within the next two years.

Growth based on solid foundations

The Pavan Group is among the world leaders in the design and engineering of technologies and integrated product lines for cereal-based food.

Our strong and solid organisation operates in the food industry as a global supplier of industrial solutions, from the handling of raw materials to final packaging.

We operate in this business through eight prestigious brands: Golfetto Sangati, Pavan, Mapimpianti, Montoni, Toresani, Stiavelli, Dizma and Pizeta, all leading Italian brands in the food processing industry.

These brands have become part of the Group due to a far-sighted growth and development strategy, which seeks to broaden both the range of services offered and the product portfolio.

Today, these companies can operate either individually or jointly under an interlacing strategy covering all production processes.

The Group implements a full-service strategy that extends from research and the development of new products, to the design and engineering of manufacturing plants, after-sales training and client services.

Over the years, the Pavan Group has strengthened its positioning and brand image thanks to its outstanding quality standards and product performance.

Corporate profile


6


Dry Pasta PHP press. Production plant, Galliera Veneta (Italy).

7


Key figures

Turnover

EBITDA

Assets

Cash flow

Export quota

Training hours

Employees

mln€ 2009

83

11

30

9

95%

1831

563

107

17

36

15

95%

850

597

+ 10

+ 15

+ 23

+ 25

136123

2219

4940

2016

95%95%

31685315

609603

2010 % increase 20122011

8


BUSINESS UNITS

SALES BY DIVISION SALES BY CONTINENT

Grain processing

Packaging

Storage

Unloading systems, handling and cereal milling plants

Food processing Manufacturing plants for pasta, extruded products, convenience food

Packaging of food & non-food products

Storage systems for raw materials and finished products

Africa 18%

Grain processing 22%2. Europe 24%2.

5.

2

3

4

1

1

2

3

4

5

Food processing1. 58% America1. 46%

Oceania4. 2%Packaging systems3. 16%Storage systems4. 4%

Asia3. 10%

9

NO

RTH

PACIF

IC

OCEAN

I N D I A N O C E A N

SOUTH ATLANTIC OCEAN

SOUTH PACIFIC OCEAN

NORTH

PACIFIC OC

EA

N

AR

TIC OCEAN

ARTIC OCE

AN

NORTH ATLANTIC OCEAN


10

One year of major projects completed: great satisfaction and new potentiality for our customers, all over the world.

NO

RTH

PACIF

IC

OCEAN

I N D I A N O C E A N

SOUTH ATLANTIC OCEAN

SOUTH PACIFIC OCEAN

NORTH

PACIFIC OC

EA

N

AR

TIC OCEAN

ARTIC OCE

AN

NORTH ATLANTIC OCEAN

2012INSTALLATIONS

5-10>10 1-4


Flour Mills, Dry and Fresh Pasta lines, Snack Pellet lines, Handling and Packaging systems.


”

“Systems that simplify

sharing of information within the

team

12


13

The gradual implementation and adoption of the CAD 3D and PDM (Product Data Management) system in the technical area enabled applications to be extended to various functional areas during 2012.

Following the recent developments, the system now enables the designers to share all project data with the team responsible for programming the machine tools used in the production departments. 3D models for removing slugs and 2D profiles for drilling are already available and directly accessible from the system, without any need for further processing. In the spare parts and manuals sector, besides the presentational advantages offered by 3D imaging, the new links developed between the ERP, PDM and CAD 3D systems allow for rapidly and associatively obtaining exploded views, parts lists and other resources directly from the technical area database, thereby reducing response times and ensuring greater accuracy.

Dynamic balancing of rotating parts

The data provided by the 3D model was processed using the laws of dynamics to develop a balancing procedure for rotors used in the processing of food products. This technique allows for reducing the size of the balancing weights to be attached to finished parts, as well as the time required for the balancing process in the factory.

Finite elements and computational fluid dynamics for optimising airflow within dryers

The engineering team within the technical department uses professional software for effecting finite element calculations in the structural field, both from a thermal and fluid dynamics perspective. Intensive use of these tools allowed for engineering and optimising various applications, from the load-bearing structures of presses to the study of airflow within dryers. Thanks

to these analyses, it was possible to improve the quality and performance of the machines, while keeping costs under control.

Energy efficiency

Various analyses and field trials were carried out in order to map the energy consumption of the dried pasta lines. The collected data was used to start in-depth studies of the related thermo-dynamic processes geared towards reducing energy requirements and improving both the drying process and product technology. Research has also led to the development of innovative systems for energy recovery to be implemented on production lines.

Design and product management: evolving systems

TECHNICAL INNOVATION


14

Corn Flakes Tempering: a specific innovation involving the most traditional of breakfast cereals The Pavan plants for corn flakes production have always differed from the alternatives available on the market due to an exclusive pre-treatment process that steams the humidified product within the mixing tank before it passes through the extruder.

This significantly reduces the cooking phase during extrusion subject to heavy mechanical stress, thus improving the colour, taste and resistance of the corn flakes when immersed in milk.

In 2012, Pavan's R&D department completed the development of the so-called “Corn Flakes Tempering” technology, which marks a further step forward in the quest for

maximising the quality of the extruded product. The new process consists in subjecting the product to a second heat treatment process for about one hour after extrusion, under relatively high temperature and humidity conditions. This innovation has a direct impact on the finished product: the taste, colour, blistering and resistance to milk of the resulting flakes - are even closer to those of corn flakes obtained with the batch cooking process.

The industrialisation of the process was made possible thanks to Pavan Group's acquired experience in pasta drying under high temperature and humidity conditions. The Group's know-how and practical experience

with dryers was transferred and adapted to corn flakes; in particular, the application of panelling and air curtains both up- and down-stream of the machine allowed for obtaining high temperatures while also keeping the humidity level high.

In 2012, the research results materialised with the installation and start-up of the first corn flakes machine implementing the tempering technology, with a production capacity of 700 kg/h.

TECHNOLOGICAL INNOVATION

The market rewards the

innovation of those who can

guarantee reliable and competitive

machines

”

“

15


16

CASE HISTORY:GRANDI MOLINI ITALIANI


”

“

17

This facility located in the industrial port of Livorno (Italy) is

used for the storage of cereals received via sea and land.

Grains unloaded from ships are conveyed to the cleaning house at the rate of 600 tph.


Shipunloader operator on ship deck using wireless remote control.


18

Unloading chain elevator under operation on a ship hatch.


1919


20

View of the 600 tph mechanical unloader, cleaning house and 67.000 tons storage silos.


21

CASE HISTORY: 8,000 kg/h OF LONG-CUT DRY PASTA


Watch the video

22


This major multinational producer of pasta has commissioned to Pavan the project and installation of the long cut pasta section. The requirement of a very high capacity line which in the meantime can assure the full respect of stringent quality standards, suggested them to choose Pavan not only as machinery supplier, but also as

technical partner. Pavan installed here two automatic continuous presses (PHP 240/2/2500) with maximum capacity of 4 tons/hour each. The dough formation, obtained with low rotation speed and low temperature, is completely under vacuum. The drying stage is entrusted to two 3-stages dryers with TAS technology.

By the automation system developed by Pavan, the operators can supervise and manage the entire lines directly in the control room: from mixing to extrusion, from drying to final cutting. This results is a fully automated process, that assures one of the most appreciated industrial pasta in the world.

24


Mixing tank in stainless steel, having a structure made of steel plate and two shafts with paddles; vacuum-tight execution. Low rotation speed and low temperature. The high quality of the dough is assured by the elevated mixing time. In the background: the control room.

25


26

Dosing and pre-mixing: volumetric type flour doser with bucket-type rotary airlock (capsulism device) driven by gearmotor with speed variation by frequency converter; capsulism type device to feed the product coming from the scrap return system; vacuum-tight execution.

Distribution tank in stainless steel and vacuum-tight execution, complete with shaft and paddles in stainless steel.


Compression group composed of:- Two asynchronous three-phase motors with speed variation by frequency converter, coupled to parallel axis reducers complete with thrust bearing;- Two compression screws in chromium plated carbon steel, diameter 240 mm;- Two cylinders in carbon steel complete with stainless steel jacket.2500 mm rectangular headpiece with temperature regulation system and automatic drawer-type die changing device.

27


28

Predryer with 7 different areas with independent temperature and humidity control; Thermo Active System Dryer with 3 separate tiers and air treatment units.


Storage section: 8 + 11 overimposed tiers with independent drive; internal air circulation system; Storing capacity of 12 production hours.

TAS Dryer, internal view.

29


30


31

Stripping and cutting devices: 3 pair of rotary discs made of HSS tool steel, pasta pushing device, scraps regrinding units. Cutting capacity of 6,500 kg/h.


CASE HISTORY:

TRESS GMBH, EXTREME

CUSTOMIZATION FOR

TOP-QUALITY PASTA

Watch the video

32

Nest machine: tubes with compressed air blow for forming pasta nests.


33


Tress GmbH (Germany) was established in 1969, aiming since the very beginning to create a top quality dry pasta. They manufactured it as more similar as possible to the homemade pasta traditionally made by housewives.In 1979 the company was transferred to Münsingen and continued growing year after year. In 2005 the capacity was full, and the management decided to invest in new processing lines to start the production of nest-shaped and short-cut pasta. The two new lines were commissioned to Pavan.

“We wanted to have very flexible machines, able to quickly switch from one shape to the other easily adapting recipes and dies. We wanted our pasta to have the best taste, color and texture. We were willing to grow and invest, but we had to be sure to do it right: for a small company like we are, it is very important to do the right things since the beginning.So we decided to trust on a big market player. We chose Pavan to implement our 2 new lines because they engineered the best customized solution to install the machines in

our narrow space, keeping in mind all the requirements we asked. And they actually translated our expectations on our final product into state of the art equipment.Now we have the technology we need, and we produce the pasta we imagined!”

Markus Tress CEO, Tress GmbH

34

Press for extruding the nest pasta with 750 kg/h capacity: 2400 mm long rectangular head. The process occurs under vacuum from the dosing to the extrusion stage.


Pre-mixer and dough resting tank with dough level controlled by radar probe. The resting of the dough allows for improving product quality thanks to the reduced mechanical work.

Paddle shafts for extracting the dough from the resting tank to the compression screw. The system is removable to facilitate cleaning and ensure maximum sanitisation.

Nest Machine: to fill the rectangular containers a robot has been installed to insert the nests in two distinct sequential phases, just after the nests forming.


35

8-floor/2-zone upper dryer with TAS technology and heat exchange and energy recovery system. Inflatable seals for improved tightness and elimination of heat losses through the doors.


36

”

“The Nidomatic line is customized on the basis of the space available and of the

peculiar kind of packaging. Nests travel for all the drying process on bars, each one equipped with 8 rectangular containers

and pre-weighing system. The line utilizes energy coming from a cogeneration

system and recovers the thermic energy not utilized by the machinery.

Bar with 8 rectangular containers, width 2 m, leaving the cooler. The containers move directly to the automatic packing section where the product is packed in pre-weighed 250 g and 500 g trays.


37

”

“

38

Advanced solutions and integrated

technologies on a large display stand


39

Ipack-ima 2012

At the 2012 edition of IPACK IMA, held in Milan from 28 February to 3 March, the Pavan Group welcomed visitors to a stand encompassing all the main company sectors: namely the Dry Pasta, Fresh Pasta and Snack divisions, Packaging by Stiavelli and Dizma, milling technology from Golfetto Sangati- and storage, mixing and transport- solutions offered by Pizeta.

An integrated approach for highlighting the Group's new structure: advanced integrated technological solutions offering a complete range of installations covering the entire supply chain, from the unloading of raw materials from ships to finished products ready for retail sale.

Each division had its own area within the stand to showcase the latest upgrades to the Group's technology.IPACK IMA offered an important occasion to significantly refresh the Group's image.

The Pavan Group's mission is summarised in the pay-off accompanying the new logo: Technology to feed a growing world.

“Being one of the leading players in the global food-processing industry requires acknowledging the full implications of this role. It is not possible to pursue a sales policy exclusively geared towards generating positive margins and profit for the company and its stakeholders: the fact that the Group's companies support their clients daily as technological partners demands Pavan's active contribution to the overall growth, through increasingly efficient and rational solutions capable of expanding consumption of food products manufactured by our clients.”The words of Andrea Cavagnis, CEO of the Pavan Group, sum up the value of technology as a cornerstone of the Group's philosophy: “Technology to feed a growing world: technology as the combination of manufacturing know-how and experience in assessing the quality of the finished product. Technology stemming from the integration and cooperation of a Group of companies that work closely together in a synergic manner to cover the entire supply chain, from the unloading of raw materials to the packaged

product ready for retail sale. Technology that allows for tailoring the production systems on the specific needs of our client, through close cooperation. Technology that allows for feeding a constantly evolving world."

The flood of visitors and buyers, mostly from Europe, but also from the emerging countries, was a tangible response to the investment made for participating in IPACK-IMA.


40

Open Day 2012Fresh Pasta DivisionGalliera Veneta


41

An event open to all fresh pasta producers for presenting the new forming and heat-treatment lines. An opportunity for meeting and exchanging views promoted by the Group in December 2012, to discuss market trends and share the most interesting innovations in the sector.

Operators from all over Italy and Europe were able to get a close look at the new machines on display in the Group's showroom, and learn about their technological and mechanical innovations. The new generation designed and manufactured by Pavan's Fresh Pasta Division offers immediate and tangible advantages in terms of energy efficiency and simplified washing and sanitising operations.The opening conference covered key topics concerning microbiology and food safety (Luciano Mondardini, R&D Director), as well as the innovative differentiating characteristics of the machines on display (Fabio Bisarello and Simone Bertoncello, Technical Design Dept.). In the closing session, Paolo Carossa, Sales Manager of the

The items presented for the heat-treatment and cooking process were the 7-metre long immersion cooker, the immersion cooler, the 14-metre pasteuriser/cooker and the pre-dryer (6 metres, 3 tiers). The display was completed by the latest models of the main accessories, such as the system for automatic distribution of dough in modules, washable conveyors and the lobe pump for forming machines to dose fillings.

Fresh Pasta Division, illustrated the tangible savings obtainable from the adoption of the new lines, through a simulation of the actual operating conditions.

After the conference, Sandro Rasera, Technical Director, led the participants on a tour through the factory to the display area, where the guests were able to explore the machines by following an ideal production process, assisted by the Group's engineers and technicians. For the forming stage, the Group presented two automatic, double tank mixers (1,100 and 1,700 kg/h capacity), and the new completely washable kneader-sheeters: the single-sheet model SPW630 (sheet width 630 mm, capacity 700 kg/h) and double-sheet model SPT540 (production of 2 sheets with 540 mm width, capacity 1,000 kg/h). Fully washable forming machines for cappelletti and ravioli (150 strokes/min., 650 kg/h), for traditional tortellini, pinched pasta and double-sheet ravioli (170 strokes/min., 850kg/h).

Open Day 2012


Sharing knowledge

Constant research by Pavan is supported by several relationships with Universities and the academic world. Specific projects and research activities are carried out with:• University of Udine (Department of Food Science)• University of Calabria (Department of Modelling for Engineering)

• D.I.S.T.A.M. (Department of Food Science and Microbiology) of the University of Milan.• Experimental Institute for Grain Growth of Rome.• National Institute for Research of Food Products and nutrition of Rome.• University of Molise (DISTAAM - Department of Food Technology).

• TecnoAlimenti of which Pavan is co-founder.• U.C.M.A. (Union of Manufacturers for the Food Industry), within which Pavan has promoted the definition of ”European Standards” for the safety of systems for the production of fresh pasta.

FOOD TECH MASTER

ACADEMIC WORLD

42

The Pavan School of Technology successfully hosted at the headquarters in Galliera Veneta, three editions of its specialisation courses in 2012. Designed with the aim of sharing the most advanced food processing skills and technologies, each year the ”Food Tech Masters” train dozens of professionals from all over the world, by providing in-depth technological know-how on the production of snack pellets, dry pasta, fresh pasta and ready meals.

Pavan offered participants a unique training experience, comprising both theory and practical sessions

that tackled the proposed topics extensively and thoroughly. The theory lessons, held by academic experts and by Pavan Group's own process engineers, comprise practical exercises implemented on pilot plants and organoleptic and sensory assessment tests. This essential combination allows students to familiarise with the products and apply the theoretical knowledge gained during the lessons.The three editions of the 2012 “Snack Pellet Training Course”, “Fresh Pasta and Ready Meals Training Course” and “Dry Pasta Training Course” were attended by about 120 students from

Central and South America, Asia, Africa and Europe. The ability to involve students outside of the training activities is one of the strong points of the Food Tech Master, which acts as a hub for establishing relations and creating networks of contacts that enrich the school-based experience and benefit the future careers of all participants.


43


COMPANY SECRETARY’S OFFICE

CORPORATE MARKETING

MANAGEMENT CONTROL

FINANCE

ADMINISTRATION

PURCHASING

IT

QUALITY

PAVAN GROUPORGANISATION CHART

PAVANDry pasta

Sales area

Technical area

MONTONIDie cutting systems

Sales area

Technical area

DIZMA & STIAVELLIPackaging division

Sales area

Technical area

MAPIMPIANTI Extruded products

Sales area

Technical area

TORESANIFresh pasta

Sales area

Technical area

PAVAN GROUPHEADQUARTERS


44

PIZETAFood industry equipment

Sales area

Technical area

TECNELSystems for automation

Sales area

Technical area

Purchasing

Purchasing

V.AL.IN.Innovative food products

Sales area

Quality

Administration

Finance

Technical area

GOLFETTO SANGATI Flour milling & grain handling

Sales area

Technical area

Purchasing


45


Financial results

TOTAL SALES REVENUE

EBITDA (operating results before interest, taxes,depreciation and amortisation)

Net financial liquidity

Operating income

Shareholders’ equity

EBT (operating results before taxes)

Net profit

Cash flow

2011k€

2012k€

122,756136,111

19,46421,719

2,68019,653

12,65914,600

40,25049,492

12,28216,758

6,54810,107

15,90819,619

107,114

17,238

20,221

11,593

35,992

10,342

6,038

14,906

83,438

10,636

17,252

3,743

30,343

4,265

1,933

9,502

2010k€

2009k€

46


EBITDA up 15%:

solidity and prospects

”

“

47


Added value determination statement

The creation of added value

TOTAL OPERATING INCOME

Sales revenue

PRODUCTION COSTS

Change in inventories of finished products

Change in inventories of raw materials, supplies, consumables and goods

Purchases of raw materials, supplies, consumables and goods

Services

Internal work and other capitalised costs

Leases and rentals

Write-downs and depreciation

Other revenues and income

Provisions for risks

Other operating costs

GROSS ADDED VALUE

2011k€

125,618

122,756

(75,914)

1.463

1,560

(61,857)

(14,937)

49

(82)

(191)

1,350

(84)

(323)

49,704

2012k€

138,353

136,111

(85,043)

955

(798)

(65,378)

(17,742)

0

(140)

(395)

1,287

(154)

(436)

53,310

112,467

107,114

(68,628)

1.953

657

(51,781)

(16,058)

2.074

(98)

(901)

1,326

(164)

(283)

2010k€

43,839

84,822

83,438

(51,364)

(271)

(261)

(36,795)

(13,689)

747

(57)

(269)

908

0

(293)

2009k€

33,458

A

B

Overall net added value is a clear expression of the results generated by the Pavan Group, providing an appreciation of the resources distributed to all the stakeholders.

The added value distribution statement presented below describes in detail how this wealth has been distributed between the parties who have actively contributed to generating it.

48

Added value distribution statement2012

k€

HUMAN RESOURCES

Employment costs

Personnel training

Direct remuneration

SOCIAL SYSTEM (direct and indirect taxes)

Pension funds and health insurance

ENTERPRISE SYSTEM (changes in reserves and distribution of dividends)

OVERALL NET ADDED VALUE

Temporary employment contracts

Personnel services

31,289

43

21,761

6,651

8,664

10,107

48,047

510

311

2011k€

30,431

43

20,747

5,715

8,356

6,566

42,712

988

297

2010k€

27,502

30

18,765

4,201

7,543

6,141

37,844

932

233

2009k€

23,122

37

15,929

2,321

6,437

1,944

27,387

539

179

A

B

C

Non-recurring income

Non-recurring expense

OVERALL GROSS ADDED VALUE

Depreciation and amortisation

OVERALL NET ADDED VALUE

Net non-recurring income and expense

1,082

0

54,617

(6,570)

48,047

1,082

OTHER AND NON-RECURRING ITEMS

Net other income and expense

Other income

Other expense

225

755

(530)

C

2012k€

341

(92)

49,923

(7,211)

42,712

249

(30)

637

(667)

2011k€

182

(1)

43,886

(6,042)

37,844

181

(134)

273

(407)

2010k€

292

(277)

33,365

(5,978)

27,387

15

(108)

355

(463)

2009k€

49

Human resources

Pavan is committed to meeting the expectations of the people who animate the company, by creating a work environment able to attract, keep and exploit talent.

Several years ago Pavan started a policy of systematically listening to its employees via the constant exchange of information and suggestions. This is the way to achieve shared objectives. The value of Pavan is the value of its people, and the company is well-aware of this: the tools provided by the Personnel Recruitment and Training function results in the placement of qualified resources in each role, the spreading of a performance culture, the careful management of remuneration policies, and the ongoing development of leadership skills.

The process of change that has marked the recent history of Pavan is attributable, in part, to the coordination and effective contribution made by the Personnel Recruitment and Training function, which implements and maintains systems and procedures (selection and placement, assessment, growth, training, salary review and

succession planning) in line with company expectations to support the professional growth of all personnel.

The creation of a friendly, stimulating and challenging work environment is among the company’s primary objectives: each individual is at the centre of every Pavan Group resource management policy.

609EMPLOYEES


HOURS OF TRAINING PROVIDED

Sales and administration

Safety

Technical area

Number of persons attending training

3,168

227

1,558

1,383

267

TRAINING

50

41.2Average age

16.4Average seniority

59Employees with over thirty years

of company seniority

74Increases in level and recognitions


1

2

Fixed time Open-end

5.8%2.1. 94.2%

CONTRACT TYPE

1

2

MenWomen

85.2%2.1. 14.8%

DISTRIBUTION BY GENDER

4 1

23

35 < 45< 35

45 < 55> 55

29.7%2.1.

3.4.

14.2%

40%16.1%

DISTRIBUTION BY AGE

Development Project

The Development Project outlines the activities that the company has identified in order to improve procedures for selection and placement of Human Resources with high potential, destined to become the future management team. Cyclically, the selection process will consider new graduates and young people with diplomas from technical and engineering studies (mechanical,

electro-technical/electronics, chemistry, agricultural, etc.), who have obtained their educational qualifications with marks of at least 95/110 or 80/100. In addition to their specific skills, a careful assessment will be made of the growth potential expressed by them and any aspects of their personality that may affect their expected professional growth.In addition to the already proven selection activities, a psychological type assessment will also be carried

out by qualified experts linked to the company and appropriately documented. Once the selection and recruitment stages are completed, new employees will begin a targeted professional career path that will follow some newly set out fundamental criteria. At the end of a period of 4 or 5 years, the Resources that have attained an adequate level of professional competence and managerial skill, will be given responsibility for a function.

51


Corporate social responsibilityFor the Pavan Group, sustainability means offering innovative products and plants with maximum attention to all the effects of its activities on the surrounding environment, and on all stakeholders who gravitate around the Group, with the aim of consolidating a business model that creates value for all. We are aware that every activity carried out and every decision taken involves economic, but also social, consequences. No matter where in the world, we ensure transparent and fair behaviour towards our colleagues, customers and suppliers. For us, respect for people, shared social values and the commitments made, is a rule of conduct essential to developing sincere, lasting and profitable relationships.

In addition to projects aimed at fighting malnutrition and starting sustainable growth models, Pavan firmly believes in the potential of voluntary work and associations.

The sponsorship programme includes several social projects.

”Chernobyl Project”On the initiative of families and local associations, a number of children from Belarus who are affected by the radiation effects of the toxic cloud from Chernobyl are hosted every year during the summer period.Their stay in Italy allows them to receive health care and, at the same time, to enjoy happier environments and

situations. Pavan supports the initiative by contributing to the airfares of these children.

”Casa della Sussidiarietà” A three-year project providing for the construction of a centre for terminally ill young people at the “Opera Immacolata Concezione” of Padua has been financed.

”I Ragazzi del Sole” A project aimed at the integration, independence and socialisation of children with disabilities.

“Comunità di San Patrignano”The objective of this community is to take care of and cure marginalised people and drug addicts, without

any social, political or religious discrimination.

“Run For Children”A 12-hour run for the Guinness World Record. This event financed “Fondazione Istituto di Ricerca Pediatrica Città della Speranza”, a leading foundation in the research and treatment of infant leukaemia. Pavan was an active sponsor of the event and encouraged the participation of its employees by organising a company team.

“Seniores Italia”Non-profit association that promotes the cooperation between professionals and organizations involved in the development of local production system in the emerging market countries.

PAVAN’S SOCIAL COMMITMENT

Chernobyl Project 2012

52


RESPONSIBILITY TOWARDS HUMAN RESOURCES

Pavan makes an equipped gym available for all employees wishing to improve their physical and mental well-being, flanked by a dedicated personal trainer.

In the last sports season, pre-skiing, pilates, functional training, tonic energy and M.E.T. (metabolic exercise training) courses were organised with the participation of over one hundred employees. Activities also included cycling competitions such as the ”San Luca Trophy”.

RESPONSIBILITY TOWARDS CIVIL SOCIETY

Creating a network of knowledge, for the mutual growth of all parties involved. Pavan aims to include in the network the most authoritative active parties, providing them with culture and tools in order to contribute towards the sustainable development of local farm to food supply chains. With this objective, the company has established collaborations with non-profit humanitarian organisations, institutions and associations. Among the many projects already implemented,

particularly noteworthy is the long cooperation (over 25 years) with some of the most authoritative accredited international organisations: FAO (Food and Agriculture Organisation), UNDP (United Nation Development Programme), UNIDO (United Nations Industrial Development Organisation) and WFP (World Food Programme). The commitment alongside them is aimed specifically at starting projects and feasibility studies to increase the level of nutrition and improve the quality of life in developing countries.

Run For Children 2012 San Luca Trophy 2012

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PROMOTING KNOWLEDGE PROMOTING SPORT PROMOTING CULTURE

For the children of its employees, every year Pavan offers Study Scholarships for upper secondary school students and university students who stand out for excellence in technical and scientific subjects.

In 2012, two scholarships were granted for university students and three for high school students.

This commitment to the cultural field is based on the conviction that experience in this area encourages qualities and characteristics that are all-important in the field of work: creativity, intellectual interest, openness to new experiences and the ability to interact with the others.

In this perspective, the Pavan Group sponsors the concert activities of ”I Solisti Veneti” in the context of the ”Veneto Festival”.

Study, sport, culture

Team spirit is one of the values characterising the organisational structure of Pavan. Sport as a metaphor for cooperation and the importance of the role of each individual, leads Pavan to support regional initiatives of international importance. Pavan is a sponsor of the Petrarca Rugby team.The company’s sole objective, for non-profit purposes, is to promote sport, training and the preparation of athletes, not least from a civil and moral standpoint, as well as the management of rugby teams.

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55


Sustainability

2011

2012

8,742

8,450

2010 8,767

2009 7,959

10 2 3 4 5 6 7 8 9

WATER CONSUMPTION (in thousands of m3)

TURNOVER (in millions of €)

20 40 60 80 100 120 140 160

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Pavan shares a strong commitment to protect the environment and scarce resources, now and for future generations, improving efficiency in operations and involving all suppliers to continuously optimize the environmental performance of Pavan equipment along the entire value chain.This effort is oriented also towards internal processes: in 2012 an internal campaign has been activated to

limit the paper usage, especially by digitalizing archives and optimizing the utilization of each sheet. Furthermore, since 2008 all brochures and leaflets have been printed on certified FSC paper, a mark that identifies the products containing wood coming from forests managed in a correct and responsible way according to rigorous environmental friendly, social and economic standards.

In 2012, despite a very careful policy in terms of resources utilization, the production increase caused a rise in the consumption of energy and methane gas. On the other side, water and paper consumption have been significantly reduced. With the recent investment in the photovoltaic system installed at Golfetto Sangati, the target for coming years is a substantial decrease of CO2 emissions, sided by a growing utilization of clean sources.

20 40 60 80 100 120 140

2011

2012

2.94

3.3

2010 2.76

2009 2.82

0 1 2 3 4

ENERGY CONSUMPTION (in millions of kWh)

TURNOVER (in millions of €)


2011

2012

600

684

2010 450

2009 380

1000 200 300 400 500 600 700

METHANE GAS CONSUMPTION (in thousands of m3)

20 40 60 80 100 120 140TURNOVER (in millions of €)

57


2011

2012

8.8

8.6

2010 11.7

2009 12.2

20 4 6 8 10 12

PAPER CONSUMPTION (in tons)

40 80 100 120 140TURNOVER (in millions of €)

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Disposal of copper, bronze, brass

Disposal of wood and metal packing

Disposal of chips, dust, ferrous and non-ferrous material particulate

Disposal of aluminum

2012 2011

460 0

46,706 22,037

199,625 185,435

1,620 1,385

0

17,268

120,580

1,885

137

13,770

130,306

1,034

2010 2009

WASTE DISPOSAL (in kg)

The data covers the factories at Galliera Veneta, Quinto di Treviso and Manfredonia. The 2009-2011 data has been updated using this criterion


The target is a substantial decrease of CO2 emissions, sided by a growing utilization of clean

sources.

”

“

59


In line with the Pavan Group’s philosophy, Golfetto Sangati invests in clean energy today, confirming the attention given to the equilibrium of our planet as a necessary step to supporting sustainable growth.

The photovoltaic system installed on the roof of the production unit in Quinto di Treviso (Italy) was recently inaugurated. With an average energy production of 926,000 kWh/year obtained by means of 3,442 modules spread over an area of approximately 6,000 sqm, the investment ensures a significant reduction in the environmental impact of the Pavan Group.

During the sunniest months production activities can be sustained entirely by solar energy, without resorting to any polluting energy sources, while also feeding part of the energy generated into the grid. This means zero pollutant emissions for the production of electricity, avoiding the emission of nearly 400 tons of CO2 and 160 TOE (tons of oil equivalent) per year. The focus on environmental balance is applied to all activities carried out by Group companies, both in the development of technology and machinery able to optimise energy resources, and in the adoption of an environmentally sustainable organisational and production model.

As well as the use of clean energy sources and limiting the consumption of water and natural gas, the Group implements complete control over production processes in order to encourage the use of environmentally-friendly and recyclable construction and packing materials.

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Energy that powers the future


NEW PHOTOVOLTAIC

SYSTEM

61

PAVAN s.r.l.

Chairman: Angelo Ferro

Director: Giulio Castelli

Director: Fabio Santicioli

Director: Mauro Zanguio

CEO: Andrea Cavagnis

BOARD OF DIRECTORS

BOARD OF AUDITORS

Chairman: Roland Rabanser

Auditor: Maurizio Corvaja

Auditor: Maurizio Salom

PIZETA s.r.l.

Chairman: Andrea Cavagnis

Director: Claudio Zavatta

CEO: Pietro Zanetti

BOARD OF DIRECTORS

VALIN s.r.l.


Director: Mauro Criscuolo

Director: Pasqualino Cauzzo

CEO: Mauro Costa

BOARD OF DIRECTORS

Deloitte & Touche

GOLFETTO SANGATI s.r.l.

BOARD OF DIRECTORS

AUDITORS

Deloitte & Touche



CEO: Claudio Zavatta

DIRECTORS AND AUDITORS

TECNEL s.r.l.



Managing Director: Nicola Tiatto

BOARD OF DIRECTORS

AUDITORS

62

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pavan group annual report 2012

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