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SHARING OUR TRANSPARENCY WITH YOUR WORLDSustainability Report 2015

1INglass S.p.A.2015

2 Sustainability Report2015

3INglass S.p.A.PREFACE

products and its services. More and more industry leaders are currently deciding to visit our plants that allows them to gain an appreciation for the organisation, team spirit and passion that can be found in each of them.

Today, the new challenge is called Industry 4.0 which, along with the Internet of Things, is thrilling a growing number of OEMs and end customers. The digital world and high automation are nothing new for INglass. This has always been the DNA of INglass for technological solutions to enhance product quality and reduce human error. However, today more than ever, production and the digital world are meeting to search for complex, flexible, smart and increasingly faster solutions. In the next few years, Industry 4.0 will represent the Fourth Industrial Revolution with smart, interconnected plants operating 24/7 and able to promptly respond to their customers’ needs. Continuous improvement, excellence and flexibility are among our core values. Today, Industry 4.0 represents an additional tool to convert all these features into value: for our customers, our employees and our suppliers. Maurizio BazzoChairman

Global presence and Industry 4.0In 2015, INglass’s world-wide initiative process and global presence were given new momentum. The completion of the third manufacturing plant in Michigan and the recent opening of other technical and commercial subsidiaries in Japan, South Africa and India, marked a new chapter in our Group’s history. Europe, Asia and the Americas are now effectively covered, thus ensuring consistent quality and excellence wherever and whenever the customer requests them.

Our products and brands have become increasingly known, recognised and respected all over the world. Our current, growing Global Awareness is evidence that the choices we have made so far are right. Every day we communicate with our stakeholders and work hard to be transparent and responsive to their needs. Our network of Key Account Managers and collaborators with great industry and company-level experience is constantly expanding, making it possible for us today to also regularly take part in several national and international events. These opportunities are not only as attendees but more and more often as speakers, especially in technology and engineering environments, where our leadership is now widely acknowledged and valued. The long-time customers in our industry who possess a strong international presence are increasingly choosing INglass, its


How we compiled this reportThe aim of our Sustainability Report 2015 includes the entire Group of companies that report to the Italian HQ and that fall within the Groups Consolidated Results. All of the data therefore refers to the production plants in Italy, China, France and Poland (since the acquisition of Aurca Group last year) and the USA and the technical-sales branches around the world.

PERIMETER 1: as usual the Economical section, from Chapter 2.1 to 2.6 included, as well as turnover and global market data by area and by division, which report the data weighted on the possessed effective percentages, to guarantee a perfect alignment with the Consolidated Economic Financial Statement.

PERIMETER 2: all the other chapters will report the indica-tors referred to the entire company (production plants and technical sales branches), not weighted for the possessed percentage, as we believe that the statistical data relative to staff, customers and the environmental impact must be con-sidered as a whole. In our opinion, the Group must consider the entire impact of its activities, acting in effect as a single entity and not as the sum of the individual entities. Plus, we must also consider that, except for the SCC branch-es in Spain and SCCA in Portugal (both 50% held by INglass Spa) and the new production plant in Michigan, USA (51% held by Simest Spa), all the other sites are entirely held by the parent company INglass Spa (with a variable percentage held between 100% and 99%, as the case may be).

Data reported in this document refers to the consolidated years of 2013, 2014* and 2015.

* As itemised in the relative document, the data reported for 2014 does not

include the KPI relative to Aurca Group.


PERIMETER 1 OF THE REPORTEconomic sustainability 2015Weighted data for the held %

PERIMETER 2 OF THE REPORTSocial and environmental sustainability 2015Overall data

INglass SPA HRSflow Hot Runner

Systems NA Inc.Canada

INglass USA Inc. Usa

INglass Tooling & Hot Runner Manufacturing Co.,Ltd Cina

Cina

Sistemas De Canal Caliente Iberica S.L.

Spagna

HRSflow do Brasil comércio de sistemas de câmara quente

importação e exportação LTDABrasile

HRS GmbH Vertrieb Deutschland

Germania

HRS USA Inc.Usa

INglass HRS South Africa(Pty) Ltd. Sud Africa

SCC Assistencia Tecnica Unipessoal Lda.

Portogallo

INglass HRS MAKINE KALIP YEDEK PARÇA VE SERVIS SAN.

TIC. LTD.Turchia

HRS Hong Kong LimitedHong Kong

HRS JAPAN CO. LTD Giappone

HRS FLOW INDIA Private Limited

Pune, IndiaErmo, France

INglass SPA HRSflow Hot Runner

Systems NA Inc.Canada

INglass USA Inc. Usa


Cina

Sistemas De Canal Caliente Iberica S.L.

Spagna

HRSflow do Brasil comércio de sistemas de câmara quente

importação e exportação LTDABrasile


Germania

HRS USA Inc.Usa

INglass HRS South Africa(Pty) Ltd. Sud Africa


Portogallo

INglass HRS MAKINE KALIP YEDEK PARÇA VE SERVIS SAN.

TIC. LTD.Turchia

HRS Hong Kong LimitedHong Kong

HRS JAPAN CO. LTD Giappone


Pune, IndiaErmo, France


Index

9

39

1.1 Overview 1.2 Our mission 1.3 Our values 1.4 Who we are

1.4.1 History1.4.2 Corporate structure1.4.3 Company organization1.4.4 Markets

mould market hot runner market

1.4.5 Distribution system1.4.6 Products and services

1.5 Strategies e policies 1.6 Our stakeholders1.7 Main KPIs: overview table

INglass know-how opens to new marketsHow we compiled this report

2.1 Determination of added value 2.2 Breakdown of added value 2.3 Investments 2.4 Banks and credit institutions 2.5 Insurance companies2.6 Suppliers

10161819

343435

34

383941424244

Chapter 01. Corporate identity

Chapter 02. Economic sustainability

What is the Company's history, its structure, its products and its values, and who are its stakeholders?

What are its assets, how are they managed and what investments have been made in 2014?


49

73

3.1 Human Resources 3.1.1 Staff breakdown3.1.2 Turnover3.1.3 Organisation and group structure 3.1.4 Selection and recruitment3.1.5 Employment and retribution policy3.1.6 Industrial relations3.1.7 Protection of equal opportunities and respect for human rights3.1.8 Training3.1.9 Safety & accidents3.1.10 Disciplinary measures and disputes3.1.11 Internal communication3.1.12 Organisational climate and motivation

3.2 Customers3.2.1 Customer analysis and characteristics3.2.2 Customer service3.2.3 Customer satisfaction3.2.4 Research and development3.2.5 Business Intelligence the soul of the company 3.2.6 Kaizen and lean thinking project 3.2.7 Production system and lean production - value streaming3.2.8 Marketing and communication

3.3 Community 3.3.1 Trade associations3.3.2 Schools and universities3.3.3 Institutions3.3.4 Local community3.3.5 Press and media

4.1 Raw Materials 4.2 Energy Requirements4.3 Water Requirements and Wastewater4.4 Emissions, Noise and Hazardous Substances 4.5 Waste Production and Disposal

48

56

66

7576777778

Chapter 03. Social sustainability

Chapter 04. Environmental sustainability

How does the company relate to its employees, customers and the community?

What behaviours does the company adopt to limit the impact that its activities have on the environment?

9INglass S.p.A.CH 01

Chapter 01. Company Identity


1.1 / In Brief

INglass S.p.a.

San Polo di Piave

1987

Company type SPA – Public limited company

Registered capital 2.750.000,00 € fully paid up

Shareholders Deimos Srl 58.40 % 873740 Ontario INC 24% Ramandolo Immobiliare Srl 12.2% Mr. Boscariol Tiziano 3.8% Ms. Berto Daniela 1.6%

Directors Chairman of the Board, CEO: Sig. Bazzo MaurizioBoard Member and CEO: Sig. Boscariol TizianoBoard Member: Ms. Berto DanielaBoard Member: Mr. Carloni OsvaldoBoard Member: Mr. Ribes Pelegri JavierBoard Member: Mr. Morandini RuggeroBoard Member: Mr. Berz StephanBoard Member: Mr. Vidotto Ruben

Controlling authorities BOARD OF STATUTORY AUDITORSChairman of the Board of Statutory Auditors: Ms. Biscaro Antonietta, Standing Auditor: Ms. Petrin Francesca, Mr. Parolin ManfredAlternate Auditor: Mr. Canevese Dino, Ms. Filippin Laura

AUDITING COMPANYReconta Ernst & Young Spa

Corporate Purpose INglass, a company that has been operating in the injection sector of thermoplastic materials for almost 30 years, is the market leader in the automotive industry and provides not only moulds and hot runners, but also consulting engineering services to support customers from the early planning stages until mould testing as well as customer service throughout the life cycle of the product.

Registered trademarks

Registered in Italy, the European Union, the USA, Japan, South Korea and China

Registered in Italy, the European Union, the USA, Canada, Brazil and ChinaAll registered trademarks are the exclusive property of INglass Spa, INglass Tooling & HotRunner Manufacturing Co. Ltd and subsidiaries.

Registered in Italy and in the European Union


Certification UNI EN ISO 9001:2008

Total number of employees 1025

Range and product lines INglass Activities aim to provide engineering services for the production of plastic products. The INglass division specialises in the design and manufacture of moulds for head lamps and rear lights for the automotive sectors. The HRSFlow division designs and manufactures hot runner systems for the production of medium and large sized components for a wide range of applications, but in par-ticular for automotive industry components and for applications with high production volumes and quick cycle times. Ermo, a business acquired in 2014, produces high precision injection moulds for the cosmetic, medical and packaging sectors.

MOULDS:--- Multicolour: moulds for single-mould components manufacture of multi-colour parts--- Multicomponent: moulds for single-mould manufacture of multi-material parts--- Injection compression: moulds for large surfaces to replace glass

HOT RUNNER SYSTEMS:--- Hot runner systems for large applications, such as the automotive sector, white goods and gardening for example--- Hot runner systems for applications with high production volumes and quick cycle times such as cosmetic, medical, food, and personal care.

SLM INSERTS:--- Inserts applied to a mould to improve its cooling thanks to conformal water channels

CONTROL UNIT --- Control units that regulate and monitor the moulding process parameters

RHEOLOGICAL ANALYSIS--- Tests carried out to study the behaviour of the material to be injected by evaluating parameters such as pressure, strain and temperature

Turnover per single product

19%ERMO LIGHTING

13%ERMO TEC-PAC

70%HRSflow


INTERIOR

LIGHTINGBusiness Unit

MULTITECHBusiness Unit

NON AUTOMOTIVEAUTOMOTIVE TEC-PACBusiness Unit

TECHNICALAPPLICATIONS

BEAUTY &PERSONAL CARE

MEDICAL

BEVERAGE& HOME

THIN WALLPACKAGING

LIGHTING

GLAZING

HOUSEHOLD

TRANSPORTATION

MEDICALBEVERAGE& HOME

PACKAGINGBEAUTY & PERSONAL CARE

UNDERHOOD

LIGHTING

EXTERIOR

INglass is getting ready to launch the rebranding project

In 2014, INglass purchased Ermo, a publicly trading French company founded in 1979 and leader in manufacturing high-precision multi-cavity moulds.The Group's choice is rooted in the desire to integrate the historical know-how of INglass regarding production of moulds and systems with Ermo's specific technology dedicated to the cosmetic, medical, food and personal care sectors. The two companies will continue focusing on their core business, however, benefiting from the synergies deriving from operations.

Buying ERMO led INglass to further diversify its activities. This is why the company decided to re-arrange its company structure, to represent itself on the market in a simpler and more defined manner.Starting 01.01.2016 the group’s new structure will become:

• INglass, the company on an institutional level • ERMO, the mould division, for the automotive lighting

market as well as the historical markets of the acquired French company

• HRSflow, the hot runner system division, for all application sectors

This project, defined in June 2015 and lasting the course of the year, will require the company to change its entire coordinated image and share it globally, modifying and updating layouts according to the areas of definition, and launching it on the market after 1 January 2016.


INTERIOR

LIGHTINGBusiness Unit

MULTITECHBusiness Unit

NON AUTOMOTIVEAUTOMOTIVE TEC-PACBusiness Unit

TECHNICALAPPLICATIONS

BEAUTY &PERSONAL CARE

MEDICAL

BEVERAGE& HOME

THIN WALLPACKAGING

LIGHTING

GLAZING

HOUSEHOLD

TRANSPORTATION

MEDICALBEVERAGE& HOME

PACKAGINGBEAUTY & PERSONAL CARE

UNDERHOOD

LIGHTING

EXTERIOR


INglass S.p.a.worldwide

WINDSOR / CANADA

HRS Hot Runner Systems NA Inc.

2002

100% INglass S.p.a.

26 employees

BARCELLONA / SPAIN

Sistemas De Canal Caliente Iberica S.L.Lda.

2005

50% INglass S.p.a. 50% Xavier RibesS.L.

8 employees

ALBERGARIA-A-VELHA / PORTUGAL


2008

100% Sistema de Canal Caliente Iberica S.L.

19 employees

GREENVILLE SOUTH CAROLINA / USA

HRS USA Inc.

2010

100% HRS Hot Runner Systems Na Inc.

4 employees

JOHANNESBURG / SOUTH AFRICA

INglass HRS South Africa (Pty) Ltd.

2015

100% INglass S.p.a.

2 employees

SAN PAOLO / BRAZIL

HRSflow do Brasil comércio de sistemas de câmara quente importação e exportação LTDA

2004

99.98% INglass S.p.a. + 0.02% Maurizio Bazzo

22 employees

GRAND RAPIDS / USA

INglass USA Inc.

2014

51% INglass S.p.a. 49% Simest

42 employees


HEILSBRONN / GERMANY


2003

100% INglass S.p.a.

22 employees

BURSA / TURKEY

INglass HRS MAKINE KALIP YEDEK PARÇA VE SERVIS SAN. TIC. LTD.

2010

99% INglass S.p.a. 1% Ruggero Morandini

6 employees

DZIERZONIOW / POLAND

Ermo Polonia

1999

100% INglass S.p.a.

28 employees

PUNE / INDIA


2014

100% INglass S.p.a.

31 employees

NAGOYA / JAPAN

HRS JAPAN CO. LTD

2015

100% INglass S.p.a.

4 employees

HONG KONG

HRS Hong Kong Limited

2008

100% INglass S.p.a.

6 employees

ERMO / FRANCEErmo MARCILLE - Head OfficeErmo MAYENNEErmo VIREErmo ALENÇON

1979

100% INglass S.p.a.

138 employees

HANGZHOU / CHINA


2006

100% INglass S.p.a.

302 employees

SAN POLO DI PIAVE/ITALY

INglass S.p.a

1987


1.2 / Our Mission

INglass spa, with its INglass moulds division and HRSflow division for hot runners, operates in activities focused on supplying engineering and consultancy services to make plastic products. The company supports the customer from the initial design phases, supplying advanced mould solutions as a result of vast experience in the moulding sector for the lighting industry. HRSflow, with its HRS Multitech lines, designs and manufactures hot runners for all applicable sectors such as Automotive, Cosmetic, Medical, Food and Personal care, and all those applications that require rapid cycle times and high aesthetic performance.

• Support given to the customer starts from the initial phases of design, simulation and moulding the finished product, and continues with after-sales service. We offer support and solutions that meet the customer's requirements as a result of high mould processing skills carried out by a highly qualified team of experts and by the company's outlook that is committed to critically and scientifically analysing all possible solutions to problems.

• Significant resources are invested to streamline and automate processes in order to improve customer service. Our goal is to continue reducing response times and, for

this reason, implement automation systems that enable rapid sharing and updating of all information regarding our systems, enabling us to send automatic replies to the customer, anticipating his requests. The result is actual support of our business and our customers, who always need prompt replies.

• Our Research & Development department constantly studies and develops new solutions and technologies, anticipating market demands. Investments for development are used to test the product on new materials, technologies to optimise performance levels of our systems and guarantee excellent quality of the moulded piece, research for energy saving and waste reduction.

All company activities are aimed at reaching the goal of becoming the international leader, recognised for product quality and efficiency for before and after sales service. With this in mind, since 2010 the company has continued to implement the tools required, its organisational structure, and machinery and has continuously invested in time and resources to find innovative solutions, products and technologies.

INJECTION MOULDING

injection moulding is an industrial production process whereby the plastic mate-

rial is melted and injected at high pressure into a closed mould that is opened

once the piece has cooled.

MOULD

the mould is a complex mechanical device, injection filled with the melted

plasticmaterial, which takes on the shape formed by the 2 parts comprising the

mould(cavity and core).

HOT RUNNER

the hot runner ensures that the melted plastic material injected into the mould by

the press nozzle stays at the right temperature.

INJECTION MOULDING MACHINE

the plant (injection moulding machine) where injection moulding operations

take place consists of a nozzle (extruder) followed by a press for moulding. The

extruder melts the material and pushes it into the mould, while the press holds

the mould closed.

01. Mould02. Hot runner03. Moulded part (cap)

01

02

03


1. DEFINITION AND CONSTANT MONITORING OF KPIINglass constantly monitors its performance through a number of KPI that are able to measure the service and quality performance levels, collecting data from the market through its CRM platform, from internal data coming from the various functional units, to verify its position in relation to the main competitors, in real time.

2. IMPLEMENTING INDUSTRY 4.0 TOOLS Over time the company created and implemented a series of data-analytics and data mining tools required to collect, monitor and process information from around the world, systematically and according to a procedure, in real time. Another characteristic that has made INglass a strongly Industry 4.0-oriented company is the considerable use of a number of simulation tools for thermal, rheologic and load loss analyses. This allows the company to provide customers with a complete all-round product and service package.

3. DYNAMIC ORGANISATIONAL STRUCTURE INglass has changed its organisational structure to better manage the performance of its staff and define priorities. In order to optimise and create specific product, moulding process, material or new development competencies, the company often hired a matrix organisation to provide the various design areas with dedicated and highly specialised resources.

4. KPO OFFICE AND LEAN PRODUCTIONThe most important factors today for each company that wants to obtain market leadership are to reduce costs and to constantly improve customer service. In this context, the company has implemented the approach of Lean Production to optimise flows, reduce waste and implement consolidated methods. A Kaizen Promotion Office was also set-up, which has the main task of monitoring and improving data communication processes by using cloud tools developed with the principles of Industry 4.0 such as Help-desk, Web-quotas, Tools Standard, Troubleshooting, Material Wizard.

5. AUTOMATED PRODUCTION AND PROCESS INTEGRATIONINglass is among the most advanced in technological terms, availing itself of state-of-the-art technology and systems. The company has invested large amounts of resources in the automation of its production, increasing its production capacity, reliability and output stability. INglass invested a lot in the vertical integration of its operational processes, from the offer and product design phase to production and finally shipping the finished product. The development of the relative job order vertical management tools, effectively transversally covers all company departments and integrates resources and data among them in a streamlined manner.

6. STANDARDS SHARED ON A GLOBAL LEVELINglass tools, goals, processes and control procedures are the same worldwide. Each improvement is simultaneously implemented in the main headquarters and in all branches. In fact, INglass has also duplicated its technologies and production methods used in Italy in the Hangzhou and Grand Rapids plants. This decision is rooted from determination to guarantee the same quality results to our customers worldwide. Experience gained at HQ and subsidiaries has become an integral part of developed solutions, thus generating a constant flow of exchange of technical skills.

QS1 PROJECT - Quality and Service First

QS1 and INDUSTRY 4.0The main objective for us at INglass is to be the world leader for product quality and pre & after-sale service. This is our most ambitious project. We called it “QS1” Quality and Service first. This project is organised into six macro directions for which the company has implemented a number of underlying principles of Industry 4.0:

QS1INDUSTRY 4.0


1.3 / Guide Values

COMMON SENSE, our scopeWhen referring to common sense, INglass means assessing, deciding, and acting rationally on the basis of experience in order to obtain positive results, thus minimising negative effects. Each person is required to be responsible for their own choice, to listen to the reasoning of others and to find a meeting point in order to act with balance and wisdom.

IMPROVE, our commitmentFor INglass, constant improvement means developing on a daily basis, continuously and in a way so that the same mistakes are never repeated. We carry out our work with passion, dedication and professional pride, which are essential ingredients to develop and improve our company. The success of INglass is the result of the commitment of employees, who are actively involved in the project to actively support the end result, fully conscious of their work.

EXCELLENCE, our passionThe concept of excellence for INglass means taking care of doing something, doing it well, and improving it. Each person is asked to work professionally and skilfully, to care for detail, to study each action in depth, and have a critical sensibility to add perfection to the task being carried out. We also focus on searching for innovative solutions and development of specific skills, aimed at fulfilling future requests.

FLEXIBILITY, our strongpointFlexibility means meeting market demands for INglass. This is carried out professionally and efficiently by working independently and adapting to current situations whilst moving in the same direction for the same objectives. This is translated into the ability to listen to customers and fulfil specific requirements of each project through a positive and prompt approach.

1.

3.2.

4.

1.COMMON SENSE, OUR COMPASSThe price of greatness is responsibility W.Churchill

2.IMPROVE, OUR COMMITMENTThe best things are achieved only with the utmost passion, J.W.Goethe

3.EXCELLENCE, OUR PASSIONStrive for perfection in everything. Take the best that exists and make it better. If it doesn't exist, create it Henry Royce

4.FLEXIBILITY, OUR STRENGHTLogic will get you from A to B; imagination will get you everywhere, Albert Einstein


moulding process, also via remote control Meanwhile, we proceeded with establishing partnerships for commercial and technical support of the main markets where our customers are present.

In 2009 we decided to take on an enormous challenge in the Asian market and we launched the new production plant in Hangzhou near Shanghai. The new plant, which has an overall surface area of 12,200 sq.m, 9,600 of which is dedicated to the production area, ended its first financial year (2011) with a turnover of €9 million. The plant in China manufactures and designs hot runner systems by replicating the model, technology and quality standards of the Italian parent company. It is focused on the Asian market and supplies the product to new emerging markets with high development potential, from China, to India and Vietnam.

Nel 2010 we diversified our range of products further, introducing the Multitech line, a line dedicated to moulding smaller, high volume production components belonging to non-automotive sectors, mainly medical/packaging/closures, which now represent 60% of the international plastic market.

In 2011the company started using significant resources and energy to simplify processes to create automated tools that enable supervision and not only control design and production departments, but also purchases, assistance up to the sales department. This path was consolidated in 2012 by introducing CRM (Customer Relationship Management), a software platform able to manage and make information available in the world with strict controls thereof in real-time from headquarters. This two-year period marked a turning point in the company's history, which restructured the organisational approach for the purpose of improving the internal structure and service offered to customers.

In 2012 the company adopted the Lean Production system, which is based on optimising flows, waste reduction and the use of proven methods to decide what really matters to contribute to the efficiency and effectiveness of the result. The manufacturing process and product design were therefore managed in a comprehensive manner in order to minimise the complexity of production, optimising

1.4 / Who we are

1.4.1/HISTORY

>1987Founded as Incos (Moulds Industry Construction) 25 years ago in a garage on the outskirts of Treviso, we began designing and manufacturing moulds for the plastic industry. However, we soon focused on multi-coloured and multi-component rotary moulds for car lights (lights and headlights for cars), thus addressing a highly potential market niche, but highly selective and demanding.

In 2000 In 2000, we purchased A.S. (Attrezzature Speciali) [Special Equipment] in Milan, a company recognised in the hot runner manufacturing sector with over twenty years' experienceon the market. Upon purchasing A.S., the HRSflow division (Hot Runner Solution) was founded and dedicated to designing and manufacturing hot runner systems for plastic injection moulding. With over twenty year's experience of A.S. in hot runner systems and the know-how of INglass in manufacturing moulds enabled the manufacture of a line of hot runner systems able to meet all market automotive demands (not only lighting units). The strategic choice is rewarded by the excellent results in terms of turnover and international reputation.

From experience gained over the first 15 years, and from confirmation of the development opportunities in the field of plastic injection:

In 2004 INglass (Instead of Glass) was founded and dedicated to injection compression technology to manufacture large polycarbonate surfaces for the automotive sector (internationally recognised technology known as Plastic Glazing). This technology will be the turning point in production of vast transparent surfaces for the automotive sector, which is intended to replace glass with polycarbonate. Meanwhile, INglass, which was initially founded as a brand in the Glazing division, obtained such high visibility on the market that, in 2006, it changed its company name from Incos to INglass.

The complex technology and high criticality of production costs that characterise the moulding process later created the need for a high quality and reliable monitoring system. This thus founded the department dedicated to manufacturing control units able to monitor the entire


phases and resources used for any other purpose other than the creation of value for the customer.

Nel 2013 we launched a new product on to the market FLEXFlow, a patented electric drive device for precise position adjustment, acceleration, speed and end stroke mainly for automotive applications that require class 'A' surfaces.

BRANCH OFFICES FOR TECHNICAL, SALES AND AFTER-SALES ASSISTANCE

• HRS Hot Runner Systems NA Inc. / CANADA• HRSflow do Brasil comércio de sistemas de câmara

quente importação e exportação LTDA / BRAZIL• HRS Hong Kong Limited / HONG KONG• HRS GmbH Vertrieb Deutschland / GERMANY• Sistemas De Canal Caliente Iberica S.L. / SPAIN

• SCC Assistencia Tecnica Unipessoal Lda. / PORTUGAL• INglass HRS MAKINE KALIP YEDEK PARÇA VE SERVIS SAN. TIC. LTD. / TURKEY• HRS USA Inc. / USA• INglass HRS South Africa (Pty) Ltd. / SOUTH AFRICA• HRS Japan CO. LTD / JAPAN• HRS FLOW India Private Limited / INDIA

> INglass USA Inc. USA

> INglass Tooling & Hot Runner Manufacturing Co.,Ltd. CHINA

> INglass S.p.a.ITALY

> ErmoFRANCE

The year 2014 was marked by important challenges and strategic decisions for the company: on the one hand, we purchased the publicly trading French company ERMO to implement our presence in non-automotive markets, since this company has vast experience in high-precision multi-component moulding; on the other hand, we started constructing our third production branch in the Grand Rapids in Michigan, which will be ready to produce in the second semester of 2015. We have also started designing and manufacturing moulds for the Asian market from our production plant in Hangzhou.

In the first half of 2015 the company completed the construction of its third world production plant in the USA, dedicated to serving the North and South American market. In the second semester the company’s rebranding project was defined, requiring a considerable image and communication coordination effort on a global level, in view of the official launch on the market in January 2016.

PRODUCTION PLANTS


1.4.2/COMPANY ORGANISATION The Italian Headquarters is divisionally managed and divided by main product lines. Each division has its own manager, who is responsible for the management and technical matters and a supporting team that also coordinates peer roles in other plants, as well as sales and technical offices abroad at the second plant and the technical-sales branches in the world. The Hangzhou plant in China and the one in Grand Rapids, USA, report directly to the main Italian Headquarters.

CORPORATE ORGANIZATIONAL CHARTupdated to 31.12.15

CHAIRMAN CEOBazzo Maurizio

ADMINISTRATIONAND FINANCERuben Vidotto

PURCHASINGMarco De Piccoli

ERMOLIGHTING

Roberto Fagarazzi

KAMStephan Berz

HRS�owMULTITECHLuca Valeri

HRS�owAUTOMOTIVE

Simone Callegari

MOULDDESIGN

Gianmatteo Bernardello

HOT RUNNERPRODUCTION

Umberto Santin

MOULDPRODUCTION

Massimo Contò

HOT RUNNERDESIGN

Davide Bassetto

R&D ERMOand MOULD DIVISION

Tiziano Boscariol

QUALITYAdriano Zanon

SALES

MARKETINGChiara Montagner

ICT & KPOAlberto Antonini

BUSINESSDEVELOPMENT

Alessandra Bosco

CUSTOMERSERVICE

Fabio Mazzocco

HUMAN RESOURCESBarbara Russo

OPERATIONSUmberto Santin

R&DMassimo Rossi

22Sustainability Report2015

1.4.3/MARKETS The INglass group was primarily established to design and manufacture equipment for the automotive industry, such as plastic injection moulds and hot runners. From the moment it was established, the group has recorded constant growth, with the exception of a slight drop in 2009 due to the global recession. This opportunity led the company to diversify the hot runner product towards application sectors outside of the automotive industry. From the very beginning the company pursued an international expansion process, opening various technical-sales branches around the world, a production plant in Hangzhou (China) in 2009, and a recently inaugurated plant in Michigan (United States). The efforts made to increase our know-how in the plastics sector and organizational innovation supported by the introduction of new automation and ITC tools, have seen INglass develop its distribution network in a comprehensive manner and affirm its products in all major reference markets. This strategy led to quick company growth, where the hot runner HRSflow division alone recorded an average annual growth of 24% (CAGR) between 2014-15. In 2010 the HRSflow Multitech line business unit was created, dedicated to the multi-cavity sector starting up a growth strategy in the cosmetic, medical, food and personal care market segments. The hot runner product designed and manufactured to meet the demands of these applications soon penetrated major international converters and brand

owners, achieving the required production performance. As seen previously in the automotive lighting sector, also in this industry, the company decided to pursue the strong synergetic opportunities existing between the mould and hot runner divisions. This strategy obtained a definitive opportunity in the second half of 2014 with the acquisition of ERMO, a leading French high technology mould manufacturing company, in the same new market segments pursued by INglass. By doing so, the group is now able to relate with end customers as strategic partners able to offer the best integrated solutions to create a finished product and the relative technical support, no matter the location of the production site. The choice for internationalization by opening branches in strategic regions was a crucial decision that allowed the company to optimally satisfy the world’s main players with a “global” approach: namely by maintaining global standards and procedures through local premises and staff, thereby overcoming cultural and linguistic barriers. Today the company turnover is distributed globally, and is characterized for having a strong physiological concentration in the main standard-setting market, Europe, but with growing shares of the American and Asian markets thanks to the opening of production sites in China and Michigan which are taking the group’s growth to the next level.

automotive lighting medical caps & closures

houseware cosmetics consumer goods packaging/thin wall

electronics

storage

technical materials domestic appliances gardening


>> MOULD MARKETS In 2015 the company launched a strategic company rebranding project aimed at simplifying and rationalizing its coordinated image as a group. The INglass brand was chosen to represent the company on an institutional level, while the value of the ERMO and HRSflow brands were optimized to represent the two sales divisions: moulds and hot runners respectively. Today the entire mould division is represented under the ERMO brand, in its two reference business units:

• ERMO LIGHTING with headquarters in Italy and China for the manufacture of injection moulds for automotive head/tail lights and injection compression moulds for large polycarbonate surfaces (plastic glazing technology)

• ERMO TEC PAC with headquarters in France for high technology content mould manufacturing for applications requiring high production volumes in the beauty&personal care, medical, beverage&home and packaging sectors

The total volume of the moulding market to manufacture light units is estimated to be around €400 million, a large part of which is generated within the main industries of moulding, which are equipped with internal tooling in competition with external suppliers.The competitive context is, amongst other things, characterized by considerable fragmentation, with mould manufacturers typically smaller than INglass, especially in Europe. However, in Asia, which is also due to less automation, the presence of large corporations with less product specialization is possible. The phenomena of customers transferring orders to Asia, especially China, which has marked the market in the past years, has recently been subjected to slackening caused by the general increase in local labor costs and the overall increase in moulds, which require more local collaboration and assistance by the manufacturer during set-up and production of components.Reference market expectations are positive and estimate an increase in volume as a result of the increase in vehicles in circulation, shorter lifespan of models and the increasing differentiation requirements, for which the vehicle lighting is a key element of characterization. The increased use of LED technology in standard automotive head/tail lights has also been recorded in recent years, and this requires highly complex precision components that INglass is continuously studying and evolving. With regard to the glazing market,

the standards that set CO2 emission limits into the environment has made automotive companies implement drastic solutions to reduce the weight of the car and decrease external heat exchange. These factors contribute significantly when replacing glass with PC. In addition to this the Plastic Glazing technology also appears to support the growing sophistication of style and design that the major brand owners are developing more markedly.

In terms of moulds for applications requiring high production volumes in the beauty & personal care, medical, beverage & home and packaging sectors, the market value is harder to evaluate as it includes quite a vast variety of applications. The competitive market is dominated by large groups working in a globalized scenario where frequent mergers and acquisitions quickly modify the structure and presence of major players, for each area, as well as their strategy. The sectors distinguished by the strongest growth rate are beauty & personal care and medical (10% of annual growth), namely segments linked to increased standards in the quality of life, welfare and lifestyle, typical of western countries. This allows for new opportunities in those rapid development and emerging countries which are now proving to be more sensitive and receptive to these types of products. Geographically, the growth and strategy of the major players is heading increasingly towards these areas and it is therefore necessary for mold-makers and converters who are more active in these sectors to have a global structure to support their customers wherever they are located. In this regard, ERMO TEC PAC has a great competitive advantage as it can count on the global presence of the group that it belongs to. At the same time, in addition to the aforementioned sectors, the beverage and Thin-wall packaging sectors in the food industry are also recording quite significant growth rates, between 5 and 7% per annum.A particularly important driver in the aforementioned mould market is the know-how of mould-makers in the pre-engineering phase, in identifying the most suitable technical solutions for the development of the product concept. Major brand owners are increasingly displaying interest in the technical aspects of the finished product. In this regard, it is increasingly more common for them to choose to hire converters for their projects, namely mold-makers who prove to be the most skillful in managing design development starting from co-designing, simulation and in industrializing the initial concept. Also in this case ERMO TEC-PAC was able to exploit the “group’s” previous experience and take advantage of the advanced design tools and techniques already employed by the ERMO Lighting business unit.


Another characteristic market trend of the beauty & personal care, medical, beverage & home and packaging sector is the reduced time to market. This factor increasingly pushes brand owners to actively participate in supply chain management, relating directly with mold-makers in a more accurate and interested fashion. This leads to greater knowledge of the product and process, and pushes them to pursue a definitive difference and the competitive edge in terms of cost, in comparison to their competitors. Regardless of the different application sectors of the two business units, sharing and integrating the company know-how of each of these two different business units with the creation of work teams aimed at developing innovative technological solutions starting from the tools and organizational structure itself was crucial; an aptitude that has always distinguished INglass group.

ERMO LIGHTING The production of injection moulds in the lighting sector is traditionally dedicated to moulding industries that supply components for head/tail light units to the automotive industry. Within this market, the ERMO Lighting division is one of the recognized leaders in designing and manufacturing injection rotary moulds of multi-colored components, which means production of plastic parts obtained by injection in succession of components of different colors or materials. This category has, for example, almost all of the rear lenses and an increasing number of lenses for bicomponent polycarbonate headlights where the frame and fastening elements are incorporated into the headlamp itself. Also, with the development of the patented “FLEXflow” technology in the hot runners. This opportunity has allowed ERMO Lighting to reduce the thicknesses which,

>> ERMOlighting


in this particular market segment, is particularly interesting and unique in the market.Since 2004, the company has successfully accessed the market of glazing by taking advantage of the similar moulding process and materials used. This technology, patented by the group, is used to create large polycarbonate surfaces instead of using glass, such as panorama roofs, backlights and quarter windows. Today, as a result of a series of solutions entirely developed and patented in leading production countries, the company holds an important share in the global automotive market and benefits from consolidated customers in all continents.

ERMO TEC-PAC In the second half of 2014, INglass acquired ERMO, a leading French company in the production of high precision multi-cavity moulds, in the beauty & personal care, medical, beverage & home and packaging sectors.2015 was dedicated to consolidating the acquisition operation by reinforcing the technical experience in synergy with the advanced technologies developed at the parent company, particularly the SLM (Selective Laser Melting) technology, already exploited in the hot runner industry. Accordingly, ERMO was able to offer customers a better service by providing a complete product with special focus on the final result on the moulded piece. Today the company also internally manages, with a dedicated area, piece qualification, guaranteeing its customers a turnkey solution. The main technological solutions patented by ERMO TEC-PAC are:

• IMC (In-mold-closing – Multiphase mould closing)• MA (In-Mould-Assembly – Multi-component assembly

in the mould)• Tourniquet inserts (Mould inserts internal rotation)

Lastly, the company is working on other technological solutions that synthesize the technical knowledge of the two divisions for the aim of finding more opportunities for synergy and areas of improvement.

MOULD TURNOVER PER APPLICATION SECTOR

55%ERMO LIGHTING

43%ERMOTEC-PAC

ERMO PLASTIC GLAZING

2%

>> ERMOTec-pac


>> HOT RUNNER MARKET The hot runner system is the most critical injection mould component and is fully customizable based on specific plastic materials, the shape of the piece, aesthetic requirements and any colour changes. As product life cycles becomes shorter, frequent component redesign is required, which guarantees a hot runner production system growth rate which is higher than what is necessary for final production. The hot runner global market for 2015 is estimated at approximately € 1.94 billion with a growth rate of 8.3% compared to 2014. The estimated average growth rate for the three-year period 2016-2019 is equivalent to +6.9%. The geographic distribution of the market of hot runners is not strictly related to the production of parts and is concentrated on production areas of injection moulds. This forces companies and sellers to have a constantly updated global vision of the market. An analysis of the hot runners’ market's global distribution shows that the broader

market is located in the East, where more than 46.6% of sales are concentrated (26.6% of them in China). The European market represents 15% of total sales and is specializing in large volume moulds, while America accounts for 19.5% of the market. The remainder is made up of emerging markets such as India and the Middle East which, along with China, constitute the fastest growing markets, thanks to the increase in the local automotive market and the increasing complexity of the models marketed. In comparison to the market, the HRSFlow division has registered steady growth, faster than the competition, which in only a few years has led it to be the 6th player in the hot runner global market and by far the fastest growing company in the industry. HRSFlow holds the title of undisputed leader in its reference markets. The HRSFlow hot runners are widely used for various injection moulding applications in the automotive, cosmetic, medical, food, personal care, and any industry where a plastic component is injected.

>> AutomotiveHotRunnerSystems


APPLICATION SECTOR: HRSflow HOT RUNNER FOR MEDIUM/LARGE SIZED AUTOMOTIVE APPLICATIONS

Since each type of market requires experience and specific products, each industry refers to different competitors and the company needs to develop solutions targeted for that type of application. From the value of the market, the automotive industry is the most relevant and in 2016, following market predictions, it will be around 26% of the total market, which is approximately € 530 million. In the automotive market, the HRSFlow share increased from 11.6% in 2013 to 12.7% in 2014, confirming its position as the third largest player worldwide.

The automotive sector in particular is a growing segment of roughly 8-10% per year. The driving forces are the increase in new car models, the reduced life time of cars (faster model change) and weight reduction, meaning replacing metal with plastic. The automotive industry is strongly requesting global support. Over 80% of all new vehicles are built on global platforms. This means that cars are produced with identical applications and quality standards in every continent. To support this global requirement, TIER 1 mergers are on the rise. Big players are dominating the market in all segments: interior, exterior and under the hood.

The typical HRSFlow customer is the mould maker who buys hot runner systems to install them in their own production of moulds. The mould maker then resells the mould with the hot runner included to the custom moulder that is the person producing the plastic component. Then the TIER 1 assembles the finished component (head/tail lights, dashboard, door) and sells it to the vehicle manufacturer.This whole process would not be possible if there were no plastic polymer producers at the base of the supply chain which play a fundamental role in the moulding process. Press manufacturers are included in this chain, that is, companies that produce machines on which moulds and hot runners are mounted therefore, allowing the moulding of plastic components. HRSFlow often establishes partnerships with these entities to offer customers the complete package as a result of the synergy of three key suppliers.

HOT RUNNERSUPPLIER

MOULDMAKER

MOULDER (TIER 1)

CAR MANUFACTURER

FINAL CUSTOMER

TURNOVER PER SECTOR APPLICATION

94.3%AUTOMOTIVE

5.7%OTHER APPLICATIONSPACKAGING/CAPS/MEDICAL


>> MultitechHotRunnerSystems

APPLICATION SECTOR: HRS MULTITECH HOT RUNNER SYSTEMS FOR LIGHT WEIGHT APPLICATIONS

The car market has traditionally been the main application industry for HRSFlow, an INglass division of the group. The company has in recent years developed the Multitech line, to supply multi-impression systems for the moulding of plastic components in different markets other than the traditional HRSFlow, thus allowing the company to enter into new rapidly expanding sectors. This has been possible as a result of innovative technologies and global presence to support customers.In 2013, the hot runner market value in the electronics and packaging industry accounted for 30% of the total. It is a market dealing with different characteristics to the Automotive market, in terms of product type and customer-

supplier relationship. The production chain, however, is similar. The Multitech customer is the mould maker, that is the person producing the moulds who purchased the hot runner systems (to install them in the moulds that he produces or purchases), to then resell the "mould system" (consisting of the mould and hot runner) to those who produce the components, the custom moulder. The latter will then sell the finished moulded components (caps, tubes, trays...) to the end customer, who then will issue the product on to the market.Compared to the automotive industry, market innovations contribute to exponentially increasing the search for new production technologies, where collaboration between all partners involved in creating the finished product is strictly required in order to obtainan acceptable result in time-to-market. This is a key point on which INglass collaboration with strategic partners is based.


Production sites

Local o�ces

production plants. Hot runners and moulds are assembled at the suppliers’ facilities and then the same parts are produced in different countries. The quality standard for the TIER-1 end user, regardless of the producer’s site, is an important value that reduces the risks of different location-related skills. As a consequence, suppliers to the end user, like INglass, have had to follow them. This explains the widespread presence of INglass in major markets worldwide. Our sales force mainly has a technical background with long experience on the specific market and other similar ones. This is due to the fact that the product is extremely technical and requires close constant relations between the company and customers, from the products design stage. In 2015, in line with this strategy of close customer relations and providing fast qualified support, we expanded our global presence with branches in South Africa and Japan, and with a third production site in the USA.

1.4.4 /DISTRIBUTION SYSTEM Through our current network of sales branches and distributors we serve customers in over 50 countries. We are able to meet high market demand due to a global network that includes Europe, Asia, the Americas, Africa and Oceania with sales branches and highly specialised teams providing engineering studies, design and assistance. Our production plants in three continents help us to achieve the best lead times and to customise our product in a targeted way. Sharing know-how and organisation methods on a global scale, also due to an advanced web-based platform allow us to deliver the best support, regardless of the complexity of the project or its geographical location. The decision to have such a vast sales network is dictated by the conditions that have led our END USERS or OEMs (Original Equipment Manufacturers, that is the companies that sell the finished product, such as vehicles, furniture, furnishing and electronics, etc., manufacturers) to globalise their


AFTER-SALES SERVICESINglass-HRSflow, with a widespread global organisation of technicians and customer service centres able to support its customers from system installation through to after-sale maintenance. Prompt response is ensured by our HELPDESK web-based platform that manages the entire service history for each individual system during its entire cycle, guaranteeing integration of all our world branch service centres. This tool enables HRSflow to constantly monitor the needs of its customers, reliability of our product and the quality of services offered by our service network. It also supplies our service operators with a Troubleshooting instrument that enables worldwide use of the same type of approach to proper moulding troubleshooting. HRSflow guarantees Customer support through the following services:

• System installation• Process optimisation through try-out support• Full support for the entire operational life of the plants• Management of system changes and/or technical

upgrades on customer request• Scheduled maintenance programs• Customer training in maintenance and process fine

tuning• Customised strategies for spare parts supply to satisfy

all Customer requirements

Since September 2015 the troubleshooting investigation procedures and methods have been revised, so that they can be implemented by anyone, through a printed manual entitled “Plastic Injection Moulding Troubleshooting”. The manual has been translated into English and Chinese.

Our qualified technicians available in all service centres worldwide ensure widespread management of all service requests in the customer's language: Europe, the Americas, Asia, Oceania and some African Countries. Troubleshooting can occur through on-line support and through our on-site dedicated technicians available 24/7.HRSFlow systems are designed and produced to ensure required reliability and performance. Where required, HRSflow is able to reduce customers’ downtime due to strategically located spare parts inventory storage network and with work centres located in main productive centres, which hold 100% of inventory of main parts needed for repairs 24/7.

1.4.5/PRODUCTS AND SERVICES PRE-SALES SERVICESDuring the Research and Development phase, specific software to simulate thermal and fluid dynamics and the structural behaviour of the systems is used, to provide us with an accurate scientific analysis during the engineering phase. Through this type of analysis, consistency of the system temperature, energy consumption during the cycle, drops in pressure and balancing of weight for each individual moulded piece is also checked. A highly qualified in-house team of expert engineers carries out in-depth analyses and simulation of the flow of the plastic materials in order to correctly configure the hot runner system and solve any moulding problems before they occur.

In order to provide its customers with specific support, INglass-HRSFlow has divided the process experts according to their area of competence in critical applications such as colour change, sequential injection and the management of highly technical material. Thus the company is able to supply detailed, specific and efficient solutions.

The company is also able to provide customers with mould cooling analysis in order to choose the most effective cooling system solution, thus optimising cooling, which is a crucial phase for the appearance of the product piece and decrease in cycle times. This type of analysis often entails the use of special inserts produced by HRSflow using SLM technology or Selected Laser Melting technology. Which uses laser coating to create micro layers of metal powders to produce conformal channels that cannot be produced using traditional drilling machine techniques. Therefore, pre-design analysis is the only way to ascertain this need, thus preventing the customer from wasting time and money.

The presence of three different product lines (moulds, hot runners and control units) enable us to produce an end product resulting from a synergy of experience in these different fields. From this point of view, the company is unique in its kind on a global scale, both in its Italian production plant as well as those in China and the United States, it has a try-out division equipped with different tonnage presses available, where highly qualified technicians can test the product before it is sent to the customer. In addition, this department is also at the customer’s disposal to carry out tests on new materials or new cutting edge applications.


In addition, HRSflow also offers customised spare part packages to ensure that Customers always have the most commonly used components available on site. These solutions mainly consist of:

• Spare parts kit supplied with every system• Optimised stocks of spare parts based on the list of

installed systems in one plant or on the basis of main components

The establishment of spare parts to be supplied is communicated automatically through the web based platform entering the customer code, and if necessary a specific factory.

Search

Plastic Injection Molding Troubleshooting

Powered by HRS�ow

THE PRODUCT Following preliminary studies and accurate simulations carried out by in-house experts, the company offers the best technical solutions to reduce cycle times, to attain high structural properties and to optimise performance moulds and the hot runner system. Prototypes are tested on a vast range of plastic materials and subjected to simulations and tests to check their behaviour during the transformation process: thermal profile studies, mechanical testing and fluid dynamics. We were founded as a mould manufacturing company and, over the years, we have specialised in manufacturing multi-colour, multi-component injection moulds for Lighting (lights and car head/tail lights) and injection compression moulds for Plastic grazing applications. This technology has been a turning point in glass production for vehicles, which is destined to replace large transparent surfaces in plastic. As a result of purchasing ERMO, since 2014 INglass has acquired the French company's know-how regarding high-precision moulds for multi-component applications.

MOULDS DIVISION MILESTONES

Multicolour, multi-component moulds

1991 2004- Plastic glazing moulds- ICM Tecnology


Besides moulds, we also manufacture hot runner systems whose main purpose is to keep the plastic material hot, which needs to be injected from output of the press nozzle to entering the mould cavity. The hot runner is mainly composed of an arm, which transports the plastic material coming from the press nozzle, and injectors used to distribute the material into the mould to produce the plastic component. What distinguishes us in our field is our ability to combine the technical skill related to hot runner systems with years of experience in manufacturing moulds. SLM technology enables production of steel inserts through laser melting of layers of metal powders. These inserts can be designed with cooling runners with moulded paths according to the moulding surface. HRSflow promotes the use and benefits of SLM technology with plastic moulding. It is the production of inserts and accessories with injection moulding where the cooling process is the key factor to optimise production. SLM is also the most suitable alternative to highly conductive

materials, having poor mechanical properties and limited resistance to wear while maintaining high levels of hardness, common to steel moulds. This technology has direct benefits on overall costs of the moulding process for OEM and for mould manufacturers since it affects the reduction in cycle time and related costs. The entire injection process requires adjustment and monitoring of determined parameters like temperature, nozzle opening and closing, energy consumption, and possible faults. The company is equipped to supply the customer with a control unit that is essential for press operation and able to optimise hot runner performance. In fact, with regard to the multi-impression sector, the systems are usually controlled with external units, since the injection press does not often have enough number of zones to be able to cover the requested requirement due to the number of cavities present. Consequently, if the hot runner and mould are new, the supplied package will also have a control unit to make the mould/hot runner assembly independent.

HOT RUNNERS DIVISION MILESTONES

Supported systems

Diamond line

2001 2003 2003 20052006 2007 2010

20062012

Fail-Safe technology patent for dual heaters and dual thermocouples on nozzles andmanifolds

Prewired and Hot Half systems

Introduction of screwed-in systems

Creation of the new Diamond Line

SLM - Selective Laser Melting Technology to optimise mould cooling operations

HRS control units launched on the market

New MultiTech division for multi-cavity applications

2013FLEX�ow Servo-driven valve gate

Lateral cylinderwith no oil cooling required


In 2014 the company launched the FLEXflow project which, subject to constant development and constant improvement, is now HRSflow’s flagship product in the Automotive sector.

The technology involves the use of servo-controlled electric actuation of the valve pins, which guarantees precise position and speed control of each valve pin during the opening and closing phases. Thanks to these types of operation it is possible to guarantee precise and flexible control of the polymer pressures and flow rate during injection moulding. The electric motors are duly encased in a unit called “FLEXflow motor unit” which is usually installed in the base plate of the mould and duly connected to the standard Hot Runner system; the number and position of said units is defined by the design, based on the position of the injection points and the mould layout. The operation of each unit is controlled by a duly developed control unit dedicated to FLEXflow technology.

In the Automotive sector, the main applications of FLEXflow technology, especially injection moulding for exterior and interior parts with medium-large surfaces, such as bumpers, spoilers, dashboards, door panels, lenses and sunroofs, for example. These are applications that require high aesthetic quality and must not feature any surface flaws.

In terms of the process, thanks to a very broad moulding window, the FLEXflow technology makes it possible to adjust the press closing force, lowering it to the very minimum, and at the same time guarantees minimising any

>> Servo DrivenValve Gate

warping of the moulded piece. It is also possible to achieve significant improvements in terms of quality and reducing rejects through high stability and process repeatability.

After approximately 2 years from its launch on the market, it is used in more than 70 applications around the world, involving it in the front line of the most important OEMs and Tier1s in the Automotive sector, drawing the attention of the main actors of the plastic parts production chain.

The FLEXflow product has introduced a new standard into the injection moulding sector, in terms of technology, performance and reliability.

HOT RUNNERS DIVISION MILESTONES

Supported systems

Diamond line

2001 2003 2003 20052006 2007 2010

20062012

Fail-Safe technology patent for dual heaters and dual thermocouples on nozzles andmanifolds

Prewired and Hot Half systems

Introduction of screwed-in systems

Creation of the new Diamond Line

SLM - Selective Laser Melting Technology to optimise mould cooling operations

HRS control units launched on the market

New MultiTech division for multi-cavity applications

2013FLEX�ow Servo-driven valve gate

Lateral cylinderwith no oil cooling required


The long-term strategy of the Inglass Group is focused on the two following objectives:

1.5 / Strategies and policies

1. Increasing market shares outside Europe, in Asia and America;

2. Increasing the share held by the injection systems in the non-automotive sector, exploiting the technical synergies with Ermo tech;

3. Further implementing project QS1

1.6 / Our stakeholders

Identification of our main Stakeholders has always been the first step in preparation of our Report. Once our main stakeholders are identified, we tried to put ourselves in their place in order to understand which information could be of greatest interest. KPI's have been thus identified and described, set out in both a table and graph form to enable and improve immediate comprehension.

All INglass stakeholders are those who, in any way shape or form, influence and are influenced by the choices the company makes. Therefore, our Stakeholders have the right to be informed regarding our organisational operations and results. They are therefore the main, even if not sole, target of this document.

> FINANCIAL PARTNERS

> COMMUNITIES > CUSTOMERS

> THEENVIROMENT

> SHAREHOLDERS > HUMAN RESOURCES

> SUPPLIERS


1.7 / Main KPIs: overview table

KEY PERFORMANCE INDICATORS (KPI)

PERIMETER 1 *

Financial Sustainability Consolidated 2013 Consolidated 2014 Consolidated 2015

Turnover € 85.370.000 € € 100.347.000 € 119.321.000

Turnover variation compared to previous year + 6,76% +17,5% +18.9%

Total investments € 11.902.000 € 41.363.000 € 12.634.000

Added value created € 35.000.000 €42.709.000 € 55.210.000

PERIMETER 2 *

Social Sustainability Consolidated 2013 Consolidated 2014 Consolidated 2015

Employees 604 705 1.025

% permanent contracts 93% 86% 92%

% fixed term contracts 7% 14% 8%

Female employees 109 118 160

Male employees 495 587 865

Part-time employees 9 14 20

Interns and trainees hosted during the year 32 22 26

Total training hours for employees 8.169 23.457 30.232

Hours of in-house training for colleagues located abroad 2.896 5.784 4.968

Total number of accidents ** 5 11 25

Average no. days sick leave due to accidents 5,5 10,7 28.6

Environmental Sustainability Consolidated 2013 Consolidated 2014 Consolidated 2015

Natural gas consumption (m3) 110.721 m3 67.262 m3 155.995 m3

Electricity consumption (kwh) 5.099.186 kwh 6.182.236 kwh 11.582.785 kwh

Steam energy consumption (GJ) 7.098 GJ 4.963 GJ 8.332 GJ

Water consumption 20.973 m3 30.376 m3 32.281 m3

Fuel consumption for company vehicles (Lt) 82.000 Lt. 78.230 Lt. 245.446 Lt.

Total waste produced 620.566 kg. 616.729 kg. 776.150 kg.

% weight of hazardous waste/total waste produced and disposed of 17,2% 23% 22%

% weight of recyclable waste/total waste produced and disposed of 66,8% 64% 66%

* Definition pag. 6 e 7

* * Data regarding accidents at the Italian factory are certain and precise as they are sensitive data, to which the company devotes time and resources for their monitoring. The data that is reported for foreign locations is currently being monitored in a less structured manner and a more suitable procedure will soon be defined


Chapter 02. Economic Sustainability


DETERMINATION OF ADDED VALUE CONSOLIDATED 2013

CONSOLIDATED 2014

CONSOLIDATED 2015

Revenues from sales and services (net of revenue adjustments) 85.370.000 100.347.000 119.321.000

Changes in inventory of work in progress, semi-finished and finished goods -2.246.000 -770.000 4.155.000

Other revenues and income 1.047.000 1.792.000 3.690.000

Revenues from core business 84.171.000 101.369.000 127.166.000

Capitalisation of long-term costs 2.362.000 3.910.000 6.370.000

GLOBAL PRODUCTION VALUE 86.533.000 105.279.000 133.536.000

INTERMEDIATE PRODUCTION COSTS 45.764.000 53.987.000 66.513.000

GROSS ADDED VALUE FROM ORDINARY OPERATIONS 40.769.000 51.292.000 67.023.000

Ancillary revenues 271.000 954.000 155.000

Ancillary costs -996.000 240.000 746.000

Result from non-core activities -725.000 714.000 591.000

Non-recurring income 20.000 474.000 1.019.000

Non-recurring costs 43.000 52.000 239.000

Result from non-recurring items -23.000 422.000 780.000

GLOBAL GROSS ADDED VALUE 40.021.000 52.428.000 67.212.000

Depreciation and Amortisation 5.021.000 9.719.000 12.002.000

NET GLOBAL ADDED VALUE 35.000.000 42.709.000 55.210.000

regulations, and reclassifying the data in order to highlight the Global value and Intermediate costs of production, the difference between them represents the Value Added produced.

Hereunder is the layout of VA production in INglass Spa from 2013 to 2015.

2.1 / Determination of Added ValueThe Added Value (VA) represents the value created within the company with the resources (human, technical and financial) available. The reclassification of the income statement for the fiscal period analysed is sufficient to attain the Value Added of the company. Starting therefore with the Group's Consolidated Financial Statements, prepared in accordance with statutory

In 2015, the Added Value % on the Consolidated turnover exceeded 46%. However, while Turnover increased by 18.9% compared to 2014, the Net consolidated global Added Value increased by more than 29% in the previous year.

41,00%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

45,00%

50,00%

Consolidated2013

Consolidated 2014

42.6%

46.3%

Consolidated2015

39INglass S.p.A.CAP 02

2.2 / Distribution of Added Value

Finally, the year's operating result (profit, if any) may remunerate:

• Members/Shareholders with distribution of dividends;

• and/or the Company itself, when profit is held in the company for future investment and on-going company growth.

The Added Value is then analysed from the point of view of how it is distributed between the resources that have contributed to create it, specifically:

• Personnel, through remuneration of employees: • Public Administration (PA), through taxes paid to the

State; • Lenders, with the payment of interest for loans,

mortgages, leasing, etc.• Community, through donations and sponsorships in

support of social, cultural and sporting activities;

ADDED VALUE CREATED AS % OF REVENUE


Remuneration of Credit Capital (funders) and Risk Capital (shareholders) have, on the other hand, grown to 6.9% and 4.7% respectively. The remaining 5.3% of the value added has been allocated to reserves in the company, in order to continue and support growth and future investments.

BREAKDOWN OF ADDED VALUE CONSOLIDATED 2013

CONSOLIDATED 2014

CONSOLIDATED 2015

External staff: 1.144.000 1.261.000 1.412.000

Employees 20.982.000 28.934.000 41.866.000

> Direct Remuneration 17.575.000 25.169.000 34.835.000

> Indirect Remuneration 3.407.000 3.765.000 7.031.000

STAFF REMUNERATION 22.126.000 30.195.000 43.278.000

Direct taxes 3.870.000 3.455.000 2.513.000

Indirect taxes 60.000 65.000 53.000

REMUNERATION OF PUBLIC ADMINISTRATION 3.930.000 3.520.000 2.566.000

Charges for short-term capital 8.000 -20.000 1.510.000

Charges for long-term capital 2.322.000 2.352.000 2.304.000

REMUNERATION OF DEBT 2.330.000 2.332.000 3.814.000

Share of net income distributed to members/shareholders 2.310.000 1.017.500 2.599.000

REMUNERATION OF EQUITY 2.310.000 1.017.500 2.599.000

Share of profit allocated to reserves 4.302.000 5.639.500 2.953.000

REMUNERATION OF THE COMPANY 4.302.000 5.639.500 2.593.000

NET GLOBAL ADDED VALUE 35.000.000 42.709.000 55.210.000

BREAKDOWN OF CONSOLIDATED ADDED VALUE 2015

78.4%STAFF REMUNERATION

5.4%RETAINEDEARNINGS

4.7%REMUNERATIONOF DEBT

6.9%REMUNERATIONOF EQUITY

4.6%REMUNERATIONOF THE PUBLICADMINISTRATION

In the last financial year, the consolidated Value Added % intended for employee remuneration was 78% of the total Value Added (compared to 71% in the previous year). The remuneration of Public Administration through taxes paid to the State has dropped even more, to 4.6% in 2015.


2.3 / Investments

completion of the construction work on the new facility in Michigan (U.S.A.), to building the new production plant in Michigan (U.S.A.) and upgrading the technical equipment of the parent company (INglass S.p.a.).

On the other hand, Euro 7.7 million (38.06% of the total) were allocated to the purchase of intangible goods; the main expense entries referred to the purchase of software licences and sustaining costs (capitalised) for internal R&D and a new sales strategy - started on a group level in 2014 - aimed at achieving increased market penetration.

Over the course of 2015 INglass has achieved 20.4 mln Euro in investments, equal to 17.1% of the consolidated turnover. In comparison to 2014, in absolute value, the Group halved its investments, nonetheless, without considering the in-creases of 2014 due to the acquisition of Aurca group (22.7 mln), over the course of 2015, the INglass investments, for the improvement of its production and sales structure, increased respectively in comparison to the previous year of 1.8 mln.The investments in material assets come to approximately 12.6 mln Euro (61.94% of the total) and mainly refer to the

INVESTMENTS CONSOLIDATED 2013

CONSOLIDATED 2014

CONSOLIDATED 2015

INVESTMENTS IN MATERIAL ASSETS 8.843.000 18.560.000 12.634.000

Investments: material 8.843.000 12.630.000 12.634.000

Increments from Aucra Group acquisition 5.930.000

INVESTMENTS IN NON-MATERIAL ASSETS 3.059.000 22.803.000 7.764.000

Investments: non-material 3.059.000 6.020.000 7.764.000

Increments from Aucra Group acquisition -- 16.783.000 --

TOTAL 11.902.000 41.363.000 20.398.000

INVESTMENTS TYPE

€ 8.843.000

€ 18.560.000

€ 3.059.000

€22.803.000

€ -

€ 5.000.000

€ 10.000.000

€ 15.000.000

€ 20.000.000

€ 25.000.000

Consolidato 2014Consolidato 2013

Tangible

Intangible

€ 12.634.000

€7.764.000

Consolidato 2015


the same time opening a new loan with better economic conditions, with less operational and management restrictions.

With reference to total outstanding loans, at the consolidated level, we have organised ourselves to sustain medium term investments with medium term financial instruments, substantially rebalancing the weight between short and medium/long term debt. Over the course of 2014, we turned to non-bank financing instruments, specifically through the issue of a 7-year MINI BOND.

2.4 / Banks and creditinstitutionsThe relationship with Banks and various lending Institutions continue to play a key role in supporting the company and its investment and continuous improvement plans. Over the years our structure has continued to expand its international territorial extension and our preferences go to the Institutions that already have experience and international structures. Thanks to the contribution of Simest SPA, it was possible to complete the development project in North America, in the state of Michigan, where a new production plant started up with the opening of a new company, INGLASS USA INC. Also, over the course of 2015, the relationship with UNICREDIT grew stronger, leading to a renegotiation of the original loan in Pool obtained through the acquisition of Ermo Group, extinguishing it and at

liability, leasing, employee transfers and life insurance policies are among the risks for which additional coverage exists. An additional policy is active in China and the United States compared to the regulatory requirements for medical coverage and employee accidents.

2.5 / Insurance companiesInsurance policies are independently managed by individual countries. In 2015, audits have been carried out at our foreign branches through the Willis international insurance network. We have also turned to the international network of Willis, which our Italian brokers also belong to, to further develop coverage on the new plant in Michigan (USA). In the Italian, Chinese and French manufacturing plants, contracts and areas of protection are very wide, whereas they are more slender in the branches. Contracts provide for coverage required by law, as well as additional coverage to further protect people and the company's assets. Product


2.6 / Auditing CompanyINglass Group has collaborated with auditing company RECONTA ERNST & YOUNG for years, for the certification of INGLASS SPA’s annual financial statement as well as the Group’s consolidated financial statement. The collaboration with Ernst & Young has gradually grown over the years with the Group’s expansion, to also include certification of the statements of the foreign subsidiaries of major economic and strategic importance. The company’s growth, also in relation to the quality of the presented numbers, therefore extends beyond the national confines, beginning a global certification process, which includes an increasing number of companies pertaining to the Group, year after year.


2.7 / Suppliers

In INglass strategy for supply procurement aims at reducing costs while continuing to ensure quality and efficiency. The suppliers are a key business partner for the company and in most cases they have been working with the INglass for many years. The criteria for the identification and selection of a supplier is clear and transparent. It is essential that a supplier has the ability and flexibility required to adapt and to try to meet the rapidly changing needs of our company. The supplier's geographical location in comparison to the plant supplied is not decisive. On a consolidated level, the percentage of supplies coming from the same nation is reducing constantly and now stands at 81% of the total.

CONSOLIDATED 2013

CONSOLIDATED 2014

CONSOLIDATED 2015

% of purchas-es billed by domestic suppliers

86,2% 83% 81%

% of purchases billed by foreign suppliers

13,8% 17% 19%

The most important aspect that INglass focuses on when assessing relations with suppliers is their ability as an industrial business partner, more so than as a supplier of a product or service. In fact, the company asks suppliers to propose the best technical solution, to be able to discuss improvements and compare results and possible alternatives. In Italy, the main guidelines for suppliers have been set out in detail within the Quality manual and are periodically shared with employees.

INglass requires suppliers capable of producing special customised components from design projects, consequently the Purchasing, R&D and Quality departments work together to identify reliable and capable suppliers and to detect any defects in workmanship and request corrective actions to be carried out by the suppliers. A large number of the suppliers are regularly monitored and assessed. This assessment occurs based on a list of internal, qualitative and quantitative KPIs, which the company uses to monitor and ensure the quality of the procurement.

As a result, to date this has allowed INglass to select a very

wide range of reliable suppliers. In 2015, worldwide product suppliers numbered at more than 450 while the number of service providers was much higher. Each supplier accounts for no more than 2,3% of the total world supply expenditure, except for the main supplier at 3%.

5 MAJOR SUPPLIERS (INglass GROUP)

2015

Supplier Products supplied % of the total

Supplier A machined components 2.99%

Supplier B electrical components 2,28%

Supplier C machined components 1.98%

Supplier D electrical components 1.95%

Supplier E raw material 1,82%

Total - 5 major suppliers 11.02%

Total - Other 88.98%

Through an analysis of the total value of provision at a consolidated level, we can see a purchase percentage that is strictly related to the product as stable at 71% in comparison to 29% for the provision of Service.

CONSOLIDATED 2013

CONSOLIDATED 2014

CONSOLIDATED 2015

Product Suppliers

66% 70% 71%

Service Providers

34% 30% 29%

The Supply of Products (supply directly related to the final product), mainly refers to machined products, design details, electrical materials, raw materials and standardised screws. Mechanical processing is constantly decreasing even if it continues to represent the largest portion, with 39% of total product supply. Raw materials follow with 18% and electrical material with 15%. External design and standard parts / screws remain stable with % of the approximately 10% each.


CONSOLIDATED 2013

CONSOLIDATED 2014

CONSOLIDATED 2015

Mechanical machining and components made to customers' specifications 45,5% 41% 39%

Raw materials 15,7% 15% 18%

Electrical material 14,3% 18% 15%

Outsourced design activities 8,5% 11% 11%

Standard parts/screws 9,9% 12% 10%

Tools 4,0% 3% 5%

Heat treatments 2,0% 2% 2%

PRODUCTS SUPPLIED 2015

RAWMATERIALS

10%OUTSOURCEDDESIGNACTIVITIES

18%ELECTRICALMATERIAL

11%STANDARDPARTS/SCREWS

5%TOOLS

2%HEAT TREATMENTS

15%39%MECHANICALMACHINING ANDCOMPONENTSMADE TO

The Provision of Services refers primarily to operating, transport and custom costs, to external consulting and the purchase of hardware and software. In 2015 transport and customs represented the greatest % of costs, while consulting and training and hw&sw reduced their incidence, following the extraordinary activities of the previous year, they now represent, along with operating costs, approximately 15% each. Also, this year, the generic entry “other” was divided into machinery maintenance (which represents 14% alone) and other.

CONSOLIDATED 2013

CONSOLIDATED 2014

CONSOLIDATED 2015

Shipping & Customs 15,9% 17% 21%

External consulting and training services 14,1% 22% 16%

Hardware and Software 10,7% 21% 16%

Running costs 34,8% 12% 14%

Equipment maintenance NA NA 14%

Other 19,2% 22% 13%

Packaging - cleaning material 2,2% 3% 4%

Company vehicles 3,1% 2% 2%

SERVICES SUPPLIED 2015

14%RUNNING COSTSEQUIPMENT

MAINTENANCE

21%EXTERNAL CONSULTINGAND TRAINING SERVICES

14%SHIPPING & CUSTOMS

16%HARDWARE AND SOFTWARE

2%COMPANY VEHICLES

4%PACKAGING - CLEANING MATERIAL

16%


Chapter 03. Social Sustainability


>2

2/10

10<

Indirect staff (not directly engaged in productive activities and whose working hours are not specific to a production order) is basically constant and equal to 48%.

While the % of staff hired as Operators rises to 42%, in comparison to 58% Employees and Managers. Also in this case, the reason why the value differs greatly from 2014 is explained by the inclusion of Ermo in the count, as well as the new production plant in the USA.

3.1 / Human Resources

INglass has always considered people one of the most important resources in the pursuit of their corporate mission. High skills and industry know-how, ability to continuously innovate processes and strong product approach, a passion for challenges and continuous improvement, as well as, last but not least, strong interpersonal skills and shared values, are unique, distinctive elements that differentiate us in the market and give value to our work. Employment contracts which are applied to staff in all countries where the company operates, are subject to the respective regulations of that country.

3.1.1/STAFF BREAKDOWN As of 31.12.2015, INglass group employed 1025 people worldwide, of which 865 men and 160 women. The rise in comparison to 2014 is high and equal to + 45% as it also includes Ermo staff which was not counted on 31.12.2014. The average worldwide age of staff is 38.8 years and for management it is 43.9 years.

The average length of service is almost 5 years (4.8 years) on a worldwide level. The percentage of employees who have worked for more than 10 years grew considerably in 2015 thanks to the acquisition of the subsidiary Ermo, which boosted the value to 16% of the total.

AVERAGE AGE

consolidated 2013 36,0



AVERAGE LENGTH OF SERVICE




AVERAGE LENGTH OF SERVICEOF THE MANAGEMENT



consolidated 2015 7.04

OF WHICH LENGTH OF SERVICE UP TO 2 YEARS - (ROOKIE RATIO)

consolidated 2013 40%



OF WHICH LENGTH OF SERVICE FROM 2 TO 10 YEARS




OF WHICH LENGTH OF SERVICE OVER 10 YEARS




WORKERS




EMPLOYEES AND MANAGERS





3.1.3/ORGANISATION AND GROUP STRUCTURE The organisation of the work in the three production plants, in Italy, China and USA is very similar and reflects the organisational chart shown on page 21. The French company, on the other hand, divided into several production units within a radius of a few dozen kilometres, as an acquired company and with its own historical structure, has a partially different organisation, which we are currently standardising with the structure of the HQ and the entire group.

The branches do not include a production area and the team consists of a Branch General Manager, designers, sales representatives, technical service engineers and technical sales staff supporting the sales force (SSE), Service Assistants (internal sales support to sales representatives) and the recently introduced KAM (Key Account Managers). KAM is a new professional figure in the company, introduced during 2012, whose role is to deal with a small group of worldwide key customers in a dedicated manner; managing relationships with their HQ as well as branches and worldwide plants, in order to constantly keep a comprehensive and updated view of new projects and evolving opportunities. It is a wide ranging figure tied to HQ from a strategic point of view, and to the branches from an operational point of view.

The foreign branches and plants, while autonomous in their operational management, strategically depend on the Italian HQ, which is responsible for monitoring results. The Global Sales Meeting, which is held twice a year in rotation at one of the world branches of the group, continually represents the main opportunity to discuss objectives, strategies, results, prioritisation and the analysis of any problems that have remained unresolved. Since 2013 the same method of comparison and updating has been applied to the Service structure, through the organisation of a Global Service Meeting for the whole service team at the Italian Headquarters. From 2014, the Global Innovation Meeting was also added, which is a moment of sharing extremely important technology and product innovation to align the various offices and to promote new opportunities for deployment to share and work together

The % of staff holding degrees on the total number of staff has also changed and is now 23% on the world total.

3.1.2/TURNOVERThe overall turnover of staff (sum of recruits and those no longer with the company, divided by the average number of employees) varies drastically in various countries. Starting with the 2014 consolidation, it was decided to indicate the absolute value of recruitment and firing only, since the turnover calculation, which also has other various methods of calculation, is, in our opinion, misleading.

Overall new recruits exceeded resignations by 122 people during 2015.

∆

TOTAL TERMINATIONS

consolidated 2013 104



Δ




TOTAL NEW HIRES




GRADUATES





The school-work comparison is very useful for us and also creates an opportunity to identify new potential employees. Openings for interns, trainees and graduating students is more frequent in Italy, especially for structural and logistical reasons, but during 2015 Brazil, China and France also hosted students for training, for a total of 26 people worldwide.

3.1.5/EMPLOYMENT AND RETRIBUTION POLICYOver the last few years the Group’s remuneration policy has included variable remuneration tied to the achievement of both individual and team objectives. In fact we believe that increased participation in the establishment and pursuit of corporate objectives is fundamental. Thus variable remuneration emphasises this aspect. Each year Management identifies positions that are more extensively and directly involved in the achievement of important business objectives and agrees with them the criteria for the granting of annual bonuses (MBO - Management by Objectives) in proportion to the achievement of pre-established results.

As of 31.12.2015, there were 881 people involved in this sharing process around the world.

Salary increases are instead recognised on the basis of consolidated professional growth and the acquisition of specific skills within the assigned corporate position, while one-off bonuses are paid to staff whose contribution or results significantly exceed the companies expected objectives. Length of service or age has no prevalence whatsoever in determining career advancement or internal career development paths.

3.1.4/SELECTION AND RECRUITMENTThe search and selection of personnel is carried out by the human resources department within the Italian HQ. The Chinese plant, given the complexity and number of cases, manages its human resources independently, with the exception of managerial positions, while the branches, which do not have a dedicated function, are supported in their decisions by the Human Resources Department in Italy, mainly with regard to positions requiring experience. For each new position that needs to be filled, we define the job description and job profile in addition to the technical and transversal skills that the profile should include. This allows us to have a constantly updated organisational manual with a description of all of the positions in the company. When the profile has been defined, the selection process is structured through individual selection interviews and the use of psychometric and individual assessment tests. For the technical area, r&d, service and area operation, candidates are given technical tests that we have prepared internally.

Even in 2015, the applications sent in through our website were many, almost 800 in total. It is now in fact possible to view positions available at the Italian and overseas office on the company's website, and send an application. This tool was introduced in 2012 and has proved to be very effective.

We try to adopt uniform occupational policies for all employees in Italy and abroad, even though acknowledging the specificities of the different contexts in various countries. Recruitment of new university graduates and high school graduates, regardless of their future position, is carried out with fixed-term contracts of up to 12 months, with the prospect, if mutual expectations are met, of turning the temporary employment contract into a permanent one. For senior positions, the type of contract is assessed on a case by case basis and a trial period always applies. In 2015 the number of permanent work contracts have increased percentage-wise in comparison to permanent work contracts, and now represent 92% of the total. A side note regarding the Chinese labour market: by regulation all work contracts with a term of less than 10 years are considered as fixed-term. For the purposes of our group calculations however, these contracts are counted with the Italian permanent work contracts, as they are essentially treated as such.

PERMANENT CONTRACTS




FIXED-TERM CONTRACTS





3.1.6 INDUSTRIAL RELATIONSWe desire the relationship with unions and employees to be mutually beneficial and peaceful. Thus we encourage open and honest dialogue between employees and Top Management, in order to better address the company’s choices, whenever possible, to also meet individual needs. The company has always met regularly with main Trade Union Representatives to discuss and provide updates on business performance. The year-end speech, in which the Chairman illustrates the results achieved, emphasising new challenges and sharing future strategies, continues to be an essential opportunity for participation and sharing.

%

On a consolidated level, the number of people registered with trade unions has decreased slightly in both absolute and percentage values on the total number of employees. In INglass's case the number or unionised employees exclusively refers to the two production sites.This data should, in fact, be read depending on each individual country, as there are cultural and local diversities which are reflected in very different numbers in each country. In Italy, the number of unionised employees has in fact decreased both in absolute and percentage values over the total number of employees. In China on the other hand, the parallel increase in recruitment, both the percentage on total employees and the absolute value, have increased given that unionised employees are widespread and a well-established practice for all workers that have passed the trial period. On an overall group level the total number of workers registered with the union is now 30%, with a decrease of more than 7% in comparison to last year.

In 2014, a second level supplementary agreement was signed in Italy for a period of 3 years. It is an agreement aimed at awarding workers with performance awards calculated according to the company's productivity and profitability indicators. The estimated results for 2015 were achieved as well, and awards were granted to all workers at the Italian Headquarters.

We also use the skill mapping tool and evaluation of potential, which allows for the annual monitoring of professional evolution and development of each individual person. The comparison between expected and delivered results justifies one-off bonuses or the definition of corrective actions or additional training.

A fundamentally important tool for the company is the process of job rotation. Staff Rotation allows human resources, in a short period, to increase their experience in various functions and sectors and to perfect their skills thus increasing their career opportunities. Furthermore, it allows the organisation to further increase its flexibility, but more so to preserve and keep within the company skills that are considered strategic and fundamental.

Furthermore, we have also started a mobility project for SSE designers and technicians towards the branches, the objective being to know and better understand the local diversities in requests that arrive from customers, so that activities are managed and work is organised as well as improving communication and the relationship between colleagues at different locations. It is a growth path for internal resources, which furthermore allows the creation of a climate of inter-nationality, reducing difficulties and ''linguistic barriers'' and thus reducing the distance and incomprehensions that can occur between the branches and HQ. The project entails a period of foreign permanency of approximately 6 continuous months, during which human resources provide operational support to foreign colleagues and in the meantime have the possibility to extend their knowledge of the local language.

NO. OF PEOPLE WITH VARIABLE REMUNERATION



consolidated 2015 881% OF UNIONISED EMPLOYEES OUT OF TOTAL EMPLOYEES





In half of the company headquarters around the world, there are employees of foreign nationality, with the highest number of represented nationalities, namely 10, in Italy.

%

We recognise the value and respect existing national legislation concerning promotion and job placement of personnel belonging to legally protected classes. Today INglass employs a total of 28 people worldwide belonging to disadvantaged groups.

Child labour in Italy only concerns summer jobs involving senior high school students, who are employed strictly in accordance with applicable laws. In China and in the other branches no staff under 18 years of age is employed.

3.1.8/TRAININGTraining continues to play a very important role in the company. The reported figures, however are incomplete, as they do not take into account new recruits mentoring to people who change roles, as well as the numerous daily opportunities for training across individual functions and offices.

3.1.7/PROTECTION OF EQUAL OPPORTUNITIES AND RESPECT FOR HUMAN RIGHTSWe firmly oppose any form of discrimination and, we apply the same criteria when selecting the best employees in every country in which we operate, without any form of discrimination.

The presence of women globally reaches 160 employees, representing approximately 16% of the total.

Respecting employees means trying to find a balance between work and life that meets the needs of both parties without prejudicing expected results. Part-time work is increasingly requested and used, even in INglass, above all for women, considering the average age and the necessity to care for small children.

NO. OF FOREIGN NATIONALITIES IN THE SINGLE LOCATION

consolidated 2013 da 1 a 11



EMPLOYEES BELONGING TO PROTECTED CLASSES

consolidated 2013 7consolidated 2014 7consolidated 2015 28

NO OF PART-TIME CONTRACTS

consolidated 2013 9



OF WHICH WOMEN

consolidated 2013 7



WOMEN




MEN





TOTAL HOURS OF TRAINING CONSOLIDATED 2015

- % hours of apprentices' and new employees' training 28.51%

- % hours of training hours on dedicated software 22.28%

- % hours of management development training 18.62%

- % hours of language training 11.67%

- % hours of technical product training 11.62%

- % hours of training on safety 2.09%

- % hours of training in the administration and finance area 1.84%

- % hours of technical training on machineries and equipment 0.79%

Training and updates continue to have considerable weight at HQ for foreign branch colleagues which in turn spend an average of two weeks every year working at the parent com-pany. During 2015, this important technical and strategic alignment activity of the global network involved internal resources in a total of 621 days of training.

3.1.9/SAFETY & ACCIDENTS The company continues its pursuit towards the achieve-ment of the objective of maximum safety in the workplace. Multiple instruments are used: application of all possible precautions in the layout of machinery and tooling, timely adjustment to regulatory updates for increased safety, spe-cial training, assignment of safety devices to all those that require them and utmost severity against anyone who does not use them, constant awareness both towards internal personnel and external visitors.

To this end, we periodically update signs in the production departments including the visitor welcome slides on the monitor located in the HQ Hall, which shows the trend in the number of accidents.

Over the course of 2015, an overall number of 25 injuries occurred, 9 of which in Italy, 7 in the USA, 5 in France, 3 in China and 1 in Portugal. The company’s effort and commit-ment to safety training, which will be further increased in 2016, specific risk analysis, continuously improving work conditions and creating awareness on the theme of each company department, remains constant and continuous. In 2015 the “average duration of accident” data is high due a dangerous accident in itinere when a colleague in a foreign branch was travelling from home to the workplace, and who asked for a long leave from work.

People involved in at least one training program during the year totalled 529 globally, almost 52% of the total popula-tion.

In 2015, 28.5% of the total number of training hours was concentrated on training apprentices and newly recruited employees. Below we will see that almost 23% of hours were spent on training on production machines, also in relation to the new USA plant, 19% on safety training and 12% each for language training and software training.

TRAINING COST

consolidated 2013 € 123.439



PER-CAPITA COST

consolidated 2013 €204,37



TOTAL TRAINING HOURS




PEOPLE INVOLVED IN TRAINING





3.1.10/DISCIPLINARY MEASURES AND DISPUTESData la crescente complessità e numerosità aziendale anche i provvedimenti disciplinari vengono talvolta applicati, anche se costituiscono comunque la modalità non prioritaria di rapporto con i dipendenti. Rapportando il numero di provvedimenti al totale collaboratori, la media è pari al 2.3%. The main reasons for taking disciplinary actions during 2015 are still mainly related to non-compliance with safety regulations.

TOTALDISCIPLINARYMEASURES

Relationships with employees are managed in a transparent manner by parties and through direct interaction. Nevertheless, in recent years there have been some conflict situations at work that have resulted in legal proceedings by former employees. Most of these were resolved in INglass' favour, however some are still waiting resolution. Disputes that are still open and unresolved regard dated cases, which have still not been closed due to public administration times which are quite often very long.

3.1.11/INTERNAL COMMUNICATIONInternal communication is carried out using traditional tools, mainly electronic mail. Each employee in Italy and abroad, has a corporate email address and access to the corporate intranet connection, for the sharing of documents. In addition, each location has a video conferencing system, which we use daily in branch meetings. Where possible calls are made using Skype, while at each site the prevailing mode of communication is email and meetings. Organisational communication is also displayed on the notice board and if necessary they are repeated through periodically updated signs. A meeting is held on a monthly basis between Top Management and Management providing updates on strategies and the sharing of projects and issues to be tackled. Twice a year the meeting is also extended to foreign Branch Managers. Lastly, on a yearly basis the Chairman shares the results and planning for the following year with all the Italian staff and some representatives of foreign staff, (on rotational basis), as well as with the union representatives who wish to attend the meeting.

*Data regarding accidents at the Italian factory are certain and precise as they are sensitive data, to which the company devotes time and resources for their monitoring. The data that is reported for foreign locations is currently being monitored in a less structured manner and a more suitable procedure will soon be defined.




COSTS INCURRED FOR SAFETY

consolidated 2013 € 27.724,1



HOURS OF SAFETY TRAINING




TOTAL NO. OF ACCIDENTS *

consolidated 2013 5



AVERAGE LOST TIME PER INJURY (DAYS)





is that of the online survey through which it is possible to rapidly collect basic information to guide the subsequent feasibility study and any implementations.

Agreements were also renewed for two medical clinics, a gym, a local travel agency and an Accounting Firm for the preparation of the tax returns offering special reduced rates to employees, a Music school and English schools. Lastly, the internal Canteen service is still available to employees offering discount price, with reference to work transfers these are paid at more favourable rates than those set by National Collective Labour Agreement (CCNL).

3.1.12/ORGANISATIONAL CLIMATE AND MOTIVATIONWe believe that people’s motivation in carrying out their job is essential to ensuring high quality standards, both with reference to the product / services offered to customers and our employee's quality of life.

The organisational climate has been frequently analysed in the past in a structured way by external professionals and also during 2015 individual interview with some employees, to understand the degree of satisfaction based both on merit and duties as well as the organisational climate.Nevertheless, we believe that motivation and any issues present in the company can only be better understood and dealt with through proper interpersonal relationships between employees and management, an approach which we encourage and monitor on a daily basis.

We strongly believe that people’s motivation is not exclusively linked to extrinsic factors such as economic incentives (see Section on Occupational Policy), but also to many intrinsic aspects of company - employee relationships, which although they do not correspond in financial remuneration, nevertheless play an important role in choosing to work at INglass rather than for other companies. Let's for example think about flexibility acknowledged in the organisation of one's own work, promotion of important internal development paths (so much so that the majority of our managers have reached their position through internal career paths in the company), continuous learning, the company’s internationality and the opportunity for professional experience at the group's foreign branches, all aspects which have characterised the company for many years.

With this in mind, we continued the process with the Department of Social Services for the Veneto Region called ’family and work Audit’ throughout 2015 as well. It is a tool that allows an external structured assessment process to be started for personnel management policies in terms of reconciling family and work. This began in 2013 with the creation of a work group that "photographed" the company on specific aspects concerning the reconciliation of family and work and has drawn up a (three-year) implementation plan for further improvement activities. The goals we set for 2015 were all achieved, and we continue with the feasibility study and interest in the activities planned for the next two-year period. To gather the views of so many employees regarding personal and family issues, the more straightforward and effective tool that we have identified


The company serves a total of approximately 2038 customers worldwide, including producers of moulds, mould makers and OEMs around the world pertaining to the automotive, cosmetic, medical, food and personal care industries.The INglass division designs and produces the mould with the hot runner system HRSflow included, allowing users to optimise both the quality and the cost of the moulded part.HRSflow division customers can rely on a partner who provides technical support throughout the supply chain, from concept to production and through to the after-sales phase. HRSflow systems are the result of synergies from specific technical skills of hot runners and experience gained over many years of mould production.

3.2.1/CUSTOMER ANALYSIS AND CHARACTERISTICS

%

Turnover also continues to grow in 2015, with an increase of 18.9 % at the consolidated level.

The division of the turnover between the 4 market areas remains basically unchanged, with Europe and Africa reaching almost 40%, Asia and Australia at 24% followed by Italy (19%) and the Americas (17%).

With regard to the customer base we need to maintain a distinction between mould customers and injection system customers due to the considerable difference between the types of product, sales process and customers between the two divisions.

TURNOVER

consolidated 2013 € 85.370.000

consolidated 2014 € 100.347.000

consolidated 2015 €119.321.000

% GROWTH OVER PREVIOUS YEAR

consolidated 2013 6,76%


consolidated 2015 18.9%

EUROPE / AFRICA




AMERICAS




ITALY




ASIA / AUSTRALIA




3.2 / Customers


27%EUROPE & AFRICA

25%ITALY

29%ASIA & AUSTRALIA

18%AMERICAS

HRS�ow

TURNOVER 2015 PER AREA

15%EUROPE& AFRICA

10%ITALY

68%ASIA & AUSTRALIA

7%AMERICAS

ERMO Lighting

19%EUROPE & AFRICA

7%ITALY

74%

ASIA & AUSTRALIA

0%AMERICAS

ERMO Tec-Pac

WORLDWIDE CUSTOMERS INglass GROUP

1633

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2013

1780

2014

2038

2015

With regard to the customer base we need to maintain a distinction between mould customers and injection system customers due to the considerable difference between the types of product, sales process and customers between the two divisions.

HRSflow CONSOLIDATED 2013 CONSOLIDATED 2014 CONSOLIDATED 2015

% of revenue from top 10 customers 14,3% 13,75% 12.28%

% of revenue from loyal customers (amounts purchased in the last 2 years) 69,1% 59,74% 70.51%

Percentage increase in no. of customers from previous year 6,76% 10,2% 4.9%

ERMO LIGHTING CONSOLIDATED 2013 CONSOLIDATED 2014 CONSOLIDATED 2015

% of revenue from top 5 customers 33,6% 40,26% 46.7%

% of revenue from loyal customers (amounts purchased in the last 2 years) 72% 44,93% 83%

Percentage increase in no. of customers from previous year -6,4% -19,2% 0%

ERMO TEC-PAC CONSOLIDATED 2013 CONSOLIDATED2014 CONSOLIDATED 2015

% of revenue from top 10 customers NA NA 39.81%


3.2.2/CUSTOMER SERVICE INglass-HRSflow, with a widespread global organisation of technicians and customer service centres able to support its customers from system installation through to after-sale maintenance. Prompt response is ensured by our web-based HELPDESK platform that manages the entire service history for each individual system during its entire cycle, guaranteeing integration of all our world branch service centres. This tool enables HRSflow to constantly monitor the needs of its customers, reliability of our product and the quality of services offered by our service network. It also supplies our service operators with a Troubleshooting instrument that enables worldwide use of the same type of approach to proper moulding troubleshooting. HRSflow guarantees Customer support through the following services:

• System installation • Process optimisation through try-out support• Full support for the entire operational life of the plants • Management of system changes and/or technical

upgrades on customer request • Scheduled maintenance programs• Customer training in maintenance and process fine

tuning.• Customised strategies for spare parts supply to satisfy

all Customer requirements

Since September 2015 the troubleshooting investigation procedures and methods have been revised, so that they can be implemented by anyone, through a printed manual entitled “Plastic Injection Moulding Troubleshooting”. The manual has been translated into English and Chinese.

Our qualified technicians available in all service centres worldwide ensure widespread management of all service requests in the customer's language: Europe, the Americas, Asia, Oceania and some African Countries.Troubleshooting can occur through on-line support and through our on-site dedicated technicians available 24/7.HRSFlow systems are designed and produced to ensure required reliability and performance. Where required, HRSflow is able to reduce customers’ downtime due to strategically located spare parts inventory storage network and with work centres located in main productive centres, which hold 100% of inventory of main parts needed for repairs 24/7.In addition, HRSflow also offers customised spare part packages to ensure that Customers always have the most commonly used components available on site. These solutions mainly consist of:

• Spare parts kit supplied with every system• Optimised stocks of spare parts based on the list of

installed systems in one plant or on the basis of main components

The establishment of spare parts to be supplied is communicated automatically through the web based platform entering the customer code, and if necessary a specific factory.

3.2.3/RESEARCH AND DEVELOPMENT Research, Development and Product engineering have always been central in INglass and have allowed us to become one of the market leaders. Each product is the result of extensive analysis and repeated moulding trials. We believe that a company can achieve high results and continue to grow only by anticipating market needs and trying to stay constantly in tune with customer requirements. This commitment is wholly shared and distributed transversely across the company.

Today, the INglass Group employs approximately 205 people devoted to R&D, to Product engineering and improvement activities. The technicians perform analyses and tests, they develop and design new products, they improve the existing ones, they conduct fluid dynamic, thermal and structural analyses. Plus, great importance is placed on experimental tests, which are managed in a dedicated area of R&D. Another important aspect is the skill, also accrued in the field, that R&D has earned over the years, which allows the department to offer valid technical support to the sales staff and assistance staff around the

world. The heart of the Company's Research and Development is located at the HQ in Italy, while smaller R&D groups work in the Chinese and French plants. The R&D team includes highly skilled engineers, skilled injection press operators, assembly and process professionals, who ensure that every product is fully approved before being offered on the market. Research activities are aimed at a detailed analysis of the new component that is to be developed, crossing referencing it with experimental data that are obtained during laboratory tests. In this way it is possible to calibrate the mathematical models according to the real boundary conditions used. In many cases we offer ourselves to the end customer as a development partner, this allows us to have an all-round view of the product.

A new approval process has also been introduced, in order to optimise and reduce the release times for new products, since the market requires increasingly shorter release times.

In 2015, approximately € 2,400,000 were invested in R&D, which represent approximately 2% of the consolidated

59INglass S.p.A.CAP 03

turnover, and is perfectly in line with the previous year. Over 100 patent applications have been submitted to date to protect the results of the considerable investments made over the course of the years of R&D activities.

On 31.12.2015 we counted a total of 34 awarded patents and valid in at least one country, while an additional 19 patent applications are pending. *

75%HRS�ow

21%ERMOLIGHTING

4%ERMOTEC-PAC

0

2

4

6

8

10

12

14

16

18

2013 2014 2015

AREAS OF APPLICATION OF FILED PATENTS NUMBER OF FILED PATENT APPLICATIONS PER YEAR *

* the total number of patents that have also been registered and issued in past years has been updated with the inclusion of the INglass China and Ermo registrations.


AWARDED PATENTS AND VALID IN AT LEAST ONE COUNTRY ON 31.12.2015

Group product Number of patent application priority

document

Title Group product

27/04/2001 TO2001A000399 Nozzle for injection moulding of plastic materialsHRSflow Automotive -

Hot runners

11/10/2004 TO2004A000700Process for the production of plates made of transparent plastic material

with non-transparent areasERMO Lighting

11/10/2004 TO2004A000701Method for the production of plates made of plastic material with parts

overmoulded by injection-compressionERMO Lighting

11/10/2004 TO2004A000702Process for the production of plates made of transparent plastic material

with non-transparent overinjected partsERMO Lighting

11/10/2004 TO2004A000703Process for the production of plates made of plastic material with parts

overmoulded by injection-compressionERMO Lighting

22/07/2005 TO2005A000505Process and apparatus for the production of articles made of plastic

material with at least one overmoulded componentERMO Lighting

22/07/2005 TO2005A000506Process and apparatus for the production of articles made of plastic

material with at least one overmoulded componentERMO Lighting

22/07/2005 TO2005A000507Process and apparatus for the production of article made of plastic mate-

rial with at least one overmoulded componentERMO Lighting

27/01/2006 TO2006A000057 Injector for injection moulding equipment of plastic materialsHRSflow Automotive -

Hot runners

06/10/2006 TO2006A000716 Injector for injection-moulding of plastic materialsHRSflow Automotive -

Hot runners

28/12/2006 TV2006A000237Method for detecting abnormal operation in a plastic injection moulding

equipmentHRSflow Automotive -

Control units

26/09/2007 FR0706738 Closing system for moulded caps ERMO Tec-Pac

12/12/2008 FR0858518 Moulding and fitting system ERMO Tec-Pac

11/05/2009 FR0953082 Kit for a machine for injection-moulding moulded parts ERMO Tec-Pac

29/11/2010 FR1059846 Moulding and fitting-together system ERMO Tec-Pac

07/01/2011 TO2011A000178 Injector for equipment for injection moulding of plastic materials HRSflow Multicavity

01/03/2011 TO2011A000179 Injector for equipment for injection moulding of plastic materials HRSflow Multicavity

28/06/2012 TO2012A000578 Apparatus for injection-moulding of plastic materialsHRS Flow Automotive -

FlexFlow

16/10/2012 TV2012A000198 Valve pin bushing for the hot runner of an injection mold HRSflow Multicavity

09/10/2012 CN201220520236.4 Hot runner jet nozzle and special sleeve spannerHRSflow Automotive -

Hot runners

09/10/2012 CN201220520251.9 Protective casing of hot runner nozzleHRSflow Automotive -

Hot runners

09/10/2012 CN201220520253.8 Temperature controlled nozzleHRSflow Automotive -

Hot runners


The technical department constitutes an international network divided into two product areas: moulds and hot runner systems. Technicians present in each branch and all production plants design the product, prepare a Cam paths and provide support to sales representatives. Every local team designs and provides technical assistance to customers on site, but also supports, when necessary, other branches. Thanks to an advanced and integrated Planning and Design system, different scenarios can be simulated in order to understand where it is more convenient to design our systems in order to meet customers' needs.This fully aligned structure with procedures and know-how allows us to manage even very complex international projects, breaking them down into individual sections assigned to different local design units, allowing them to send the final draft to the customer with rapid turnaround times. Performances obtained are constantly monitored in

Group product Number of patent application priority

document

Title Group product

09/10/2012 CN201220520246.8 Heater strip bending toolHRSflow Automotive -

Hot runners

30/10/2012 CN201220574000.9 Nozzle with material isolation capHRSflow Automotive -

Hot runners

30/10/2012 CN201220573997.6 Sprue bushing component on nozzleHRSflow Automotive -

Hot runners

30/10/2012 CN201220573975.X Nozzle with multi-element coreHRSflow Automotive -

Hot runners

30/10/2012 CN201220573973.0 Valve needle drive device with heat radiating functionHRSflow Automotive -

Hot runners

24/12/2013 TO2013A001071 Device for injection molding of plastic materialsHRSflow Automotive -

FlexFlow

24/12/2013 TO2013A001073 Device for injection molding of plastic materialsHRSflow Automotive -

FlexFlow

18/06/2014 CN201420333163.7 Thermoelectric couple device of flow splitting plateHRSflow Automotive -

Hot runners

14/11/2014 CN201420683570.0 Cooling water insert.HRSflow Automotive -

Hot runners

07/04/2015 CN201520205114.X Anti-seize bushingHRSflow Automotive -

Hot runners

07/04/2015 CN201520205073.4 Two-piece spacerHRSflow Automotive -

Hot runners

12/10/2015 IT102015000060495Spray nozzle for plastic injection molding devices for the production of

transparent or semi-transparent aesthetic vehicle components, such as lenses for lighting and injection molding

HRSflow Automotive -Hot runners

terms of efficiency and effectiveness through appropriate KPIs (Key Performance Indicators), indicators which allow us to understand and measure the quality of the work carried out, pursuing business practice aimed at the constant improvement of our processes.R&D and Engineering technicians in Italy and abroad all use the same software and this ensures that the exchange of information and activities between the various work teams is even faster. Focus is given to computer simulation and virtual optimisation of projects with FEA (Finite Element Analysis) techniques. These methods are widely used for design validation, allowing "virtual" performance investigation of our systems from the design phase, evaluating different technical solutions and improving reliability.


3.2.5/BUSINESS INTELLIGENCE, THE SOUL OF THE COMPANY Innovation does not only mean product improvement: all company processes require the right amount of attention. Automation means introducing solutions into the company which enable it to oversee not only the design and production departments, but also the purchase department, assistance up to the sales department. For this purpose INglass, has always attempted to treat information in a transparent and organised way through BI systems (Business Intelligence) to facilitate certain operational decisions and to introduce measurement, result control and analysis systems and corporate performance. The term Business Intelligence refers mainly to software systems, which are designed to collect data in a logical manner, to gain information, assessment and estimates on the product and the target market. For this purpose, the company has implemented a CRM system (Customer Relationship Manager), a software platform able to manage and make information available in the world with strict controls thereof in real-time from headquarters. This platform allows the company to control all customer-related processes during the various stages of the products life and especially allows:

• to manage international programs by coordinating the resources in real time on a global scale;

• as a result of past record information, to know customer specifications and their requirements, providing the right solution based on past records and the type of application:

• in the after-sales activities, it is possible to monitor systems, which, due to customer production needs are moved to various production sites in different continents, allowing us, in the event that assistance is required, to intervene quickly and effectively;

• to offer spare parts kits, which are suitable to the customer's hot runner packages to optimise time and cost.

INglass-HRSflow, however, has bypassed the traditional concept of BI, translating this internal management into concrete services for the customer. Automatic management of flows linked to the order, enable us to anticipate customer requirements, for example notification is automatically sent regarding the exact delivery date of hot runner drawings and the expected date of delivery. The continuous implementation of new software and automation has enabled a drastic reduction in response times, greater transparency and information sharing, with significant internal and external benefits for our customers, partners and international colleagues.

3.2.6/KAIZEN AND LEAN THINKING PROJECT Today, the most important factor, for every company that wishes to attain market leadership is the reduction of costs and the improvement of the level of service provided to customers. This can only occur when the real value added for which the customer is willing to pay is understood.Thus a company must be willing to call its beliefs, rules and models into question in a continuous search for the reduction of any form of waste. In this context, the improvement group created in 2011 continues its activities applied to indirect processes and now extended to cover production processes. The continuous research to optimise production and management processes is starting to show results in terms of customer delivery times for the Soft and Hard part of our products. This improvement activity is applied to all the existing processes and even more so to new processes that are activated day by day. The doubling of the plant, the arrival of new equipment, the transfer of part of the HRSflow line, all these changes and improvements to the production process have been designed, developed and achieved as a part of Lean manufacturing.

3.2.7/PRODUCTION SYSTEM AND LEAN PRODUCTION – VALUE STREAMING INglass-HRSflow tooling is among the most advanced in technological terms in Europe, availing itself of state-of-the-art technology and systems. The company has invested significant resources for robots and automated lines that allow work 24/7, to ensure greater accuracy, reliability and stability of the production process. Process customisation allows the company significant manufacturing flexibility, while maintaining high efficiency levels and the ability to produce standard components that are thoroughly checked. The choice to replicate the Italian "formula" in Asia and America was a key and strategic aspect of the company. The production sites of Hangzhou (China) and Grand Rapids (USA) are perfect replicas of the Italian site. They were equipped with the same machinery used in Italy. The quality of the product and the same procedures were applied and followed. People have been trained to be able to work with the same methods and the same software used in the parent company.In keeping with previous years, the company continued with the implementation of Lean Production, which is a lean manufacturing system, based on the optimisation of flows, waste reduction and the use of proven methods to decide what really matters to contribute to the efficiency and effectiveness of the result. The manufacturing process and product design were therefore treated in a comprehensive manner in order to minimise the complexity


of production optimising phases and resources used for any other purpose other than the creation of value for the customer. With the opening of the Michigan plant and through the relative production synergies that it has with other production plants, more than before, 2015 in particular highlighted the challenges of globalising the service provided to customers. The company worked hard on optimising flows, also between plants, in relation to information flows and logistic flows.

3.2.8/MARKETING AND COMMUNICATION The main communication methods used by INglass-HRSflow to reach our acquired and potential customers is participation at events and industry trade fairs, sponsorship of some targeted conferences, editorial and advertising presence on major national and international magazines, the company Website and direct communication through customer mailing. Marketing also supports the sales force that interacts with the customer through the provision of all product documentation, including presentations, data sheets, manuals, product catalogues and important case study collections. The company's presence on sector specific magazines and company editorial material are handled internally on the basis of product lines to be advertised or countries to be targeted. Advertising on the press media is strategically established each year. In 2015, the company was present on a number of national and international magazines for

>> Lean Thinking

both technical products and solutions and institutional publications to mainly announce the two important accomplishments of the year, which concern acquisition of ERMO and opening the production branch in Michigan. Trade shows, especially those at international level, have become the main tool to present new products or penetrate new markets. Unlike other sectors where such events are affected by cost containment policies, in a technology-driven sector like ours they are and continue to be an essential global showcase and an excellent opportunity to exchange know-how and experience. However trade fairs are not the only method, in addition we have stepped up our presence at targeted events (Open House, Technical Days and Conferences), where we have the opportunity to reach a more homogeneous customer base, and to start business relations and partnership more easily. With reference to trade industry events, an important role is played by the strategic partnerships with manufacturers of injection moulding machines and customers thereof, where we are able to offer the market first-hand experience of the performance of our hot runner systems and the quality of the final moulded piece.


• VDI Annual Conference Injection Molding, Germany, Baden-Baden, 10-11 February

• Pharmapack, France, 11-12 February• Autodesk Automotive Innovation Forum, Germany,

Munich, 25-26 February• VDI Plastics in Automotive Engineering, Germany,

Mannheim, 18-19 March• Autodesk, India, 29 May• L’oreal Tech Day, France, Paris, 5 June• Plastic Closures Innovations, Germany, Berlin, 10-11

June• Engel Symposium, Austria, St. Valentin and Linz, 16-18

June• Autodesk, Italy, San Vigilio Pozzolengo, 16 June• Autodesk Moldflow Userday, France, Paris, 18 June• 19. Dresdner Leichtbau-Syposium, Germany, Dresden,

18-19 June

>fairs

>events

• FLEXflow Live Demo, Canada, Windsor, 18-19 June• FLEXflow Demo, Turkey, 22 June• Autodesk Moldflow Userday Germany/South, Germany,

Fürth, 22 June• FLEXflow Live Demo, Canada, Windsor, 24-25 June• Autodesk Moldflow Userday, The Netherlands,

Eindhoven, 26 June• Feal 2, France, Paris, 26 June• FLEXflow Live Demo, China, Huangzhou, 27-31 July• Plastic Caps & Closures, USA, Illinois, 15-17 September• Grand Opening, USA, Grand Rapids, 23 September• Kunststoffen, Germany, The Netherlands/ Veldhoven,

23-24 September• IIMC International Injection Molding Conference,

Germany, Aachen, 30 Settembre – 1 October• Plastic Closures Crain, France, 4-5 November

>Events


• Interplastica, Russia, Moscow, 27-30 January• Formatool, Slovenia, 21-14 March• NPE, USA, Orlando, 23-27 March• Feiplastic, San Paolo, Brazil, 4-8 May• Moulding Expo, Germany, Stuttgart, 5-8 May• Chinaplas, China, Guangzhou, 20-23 May• Plastpol, Poland, Kielce, 26-29 May• Fakuma, Germany, Friedrichafen, 13-17 October

>Trade FairsMaurizio Bazzo is The Entrepreneur of the Year 2015 - Industrial Products category

Last 19 November, at the headquarters of the Italian Stock Market in Milan, Maurizio Bazzo received the “Entrepreneur of the Year award” in the category of Industrial Products. The accolade, awarded by a Jury composed by well-known figures from the world of economy, business and communication institutions, acknowledged all the values related to solid business practices of INglass based on the central role played by research, development and engineering of the product. The President of INglass, appreciating the prestigious award received, highlighted how the team’s know-how, skills and passion are the fundamental resource for the company’s success.

>awards

>Awards


Transparency and fairness are key and essential concepts in relationships with the community.

Community for us means:

--- Trade associations --- Schools and Universities--- Institutions--- Local community--- Press and media

3.3.1/TRADE ASSOCIATIONS

ITALY

--- CONFINDUSTRIA. We have been partners with Confindustria for many years, the main association that represents manufacturing and service companies in Italy, which are more than 150,000 companies of all sizes. The local association that we refer to is Unindustria Treviso.

--- ASSOCOMAPLAST of Assago, Milan, today groups 165 companies that manufacture equipment for the processing of plastics and rubber. ASSOCOMAPLAST publishes the trade magazine Macplas, organising the Plast trade fair in Milan and provides training in collaboration with Cesap.

--- UCISAP of Cinisello Balsamo, Milan, Association of Italian Die and Mould Manufacturers, which brings together companies in the sector and is the Italian representative of the Istma Word International Association, International Special Tooling and Machining Association.

--- PROPLAST of Tortona, Alessandria, today groups together 202 companies and bodies and is a technological excellence centre in Europe, offering high quality R&D services and leading edge training in the processing of plastic materials, materials and product engineering.

3.3 / Community


BRAZIL

--- ABINFER, National Moulding association Brazil. Founded in 2011 in Joinville, Santa Catarina. The association represents the Brazilian moulding industry at the national and international institutions, also providing training, technological and managerial consultancy services.

CANADA

--- APMA, Automotive Parts Manufacturers’ Association. National Canadian Association founded in 1952. Represent OEM component, equipment, machinery and service producers for the global automotive industry. The main purpose of the association is to promote the industry supplying OEMs in the automotive industry, both domestic and foreign. Its carries out business promotion, representation, support and organises periodic global marketing activities. The association also maintains constant relations with equivalent associations in other countries.

--- CAMM, Canadian Association of Mould Makers. Canadian National Association founded in 1981. Represents mould manufacturers and promotes various activities (communication and field studies, innovation and new technologies and training) for the protection and development of local producer networks.

--- SPI, the Plastic Industry Association. Founded in 1937, it promotes growth in the U.S. plastics industry. Representing nearly 900,000 American workers in the third largest U.S. manufacturing industry, SPI delivers advocacy, market research, industry promotion, and the fostering of business relationships and zero waste strategies. SPI also owns and produces the international NPE trade show. All profits from NPE are reinvested into SPI’s industry services.


CHINA

--- CDMIA, China Die & Mould Industry Association. Established in 1984, CDMIA is the only national association for this sector in China. Mainly consisting of individual firms that are voluntary members, research centres, universities, colleges and social institutions related to the world of moulds and moulding. It currently brings together over 1,500 members and has 50 branches in the individual cities and major industrial centres. CDMIA is a founding member of FADMA as well as a member of Istma/Fadma. Over the years CDMIA has established excellent relationships with important moulding industry entities in various countries and regions.

GERMANY

--- VDWF, Verband Deutscher Werkzeug und Formenbauer. The German moulding company, which was founded in 1992, groups the leading moulding companies present in the area. It lobbies and raises awareness of the requirements in the sector, offers cross services to members and represents a network of constant comparison and sharing between the companies in the sector.

--- IKV, Association for the promotion of the plastic processing Institute. The association, based in Aachen, was founded in 1950 and now involves approximately 250 companies from the plastic sector, from all over the world. Its mission consists in protecting the competitiveness of the plastic industry in a growing global market. The members of IKV, through their cooperation with the institute, are able to benefit from new technological developments from the very first phases of applicability.

--- SKZ, Das Kunststoff Zentrum. SKZ has been a partner of the plastic industry for over 50 years. SKZ, one of the major accredited institutes for quality certification, supervision of more than 900 products for more than 400 companies. SKZ also performs its own research and development, it offers consultancy and training services for collaborators in the plastic sector. Its main headquarters are in Würzburg but it also controls many branches in other areas of Germany, in the UAE and China.


PORTUGAL

--- CEFAMOL, Portuguese Association of the Plastics Industry. Founded in 1969 by 7 companies in the plastics industry, it is now the largest national association and represents the interests of this part of the industry, in terms of relations with the Institutions and with other associations, both national and foreign.

USA

--- A.M.B.A - American Mold Builders Association. An association founded in 1973, it is involved solely in the part of the plastic industry dealing in mould manufacturers. Its members are companies that build moulds and dies for injection, blow, compression, thermoforming moulding and other moulding applications.


3.3.3/INSTITUTIONSWe have excellent relations with local and national institutions with regard to the exchange of documentation and requests as well as in the resolution of issues of misalignment in the daily conduct of bureaucratic activities. In regards to our factory in China, the Hangzhou Economic and Technological Development Zone (Management Committee and General Union) is the Body with whom we have main business relations. Our company pursues utmost transparency and fairness even with regard to our institutional interlocutor, providing clarifications and additional data whenever a justified request is submitted.

Relationships with Cei Piemonte (Foreign Centre for the Internationalisation), the first Italian regional body dedicated to internationalisation of the territory. Multiple Piedmont entities are associated with Cei (the Region, the Municipality, Turin's Polytechnic, Turin University and the Chamber of Commerce) and are a reference for local businesses who work or intend to work in foreign markets and for foreign interlocutors interested in learning about Piedmont's economic system. At Cei we have been selected in the "From Concept to Car" project. A prestigious project, which admits only the most innovative companies.

3.3.2/SCHOOLS AND UNIVERSITIES For many years now we promote and welcome visits to our company by students of all ages. We believe that interaction between the school and the company are important both for students not familiar with the production world and its peculiarities, who through visits, have the opportunity to gain further insight, and for the company, which, through these meetings, can communicate the needs of the labour market to teachers and future workers while acquiring a better understanding of first time job seekers’ perspective. Unfortunately, too often there is indeed a misalignment between two realities and only a widespread and continuous comparison can reduce the distance.

In Italy, during 2015, we welcomed the visit of:

--- students of the Gewerbliche Schule (Germany) – German vocational school whose students visit our company almost every year;

--- second and third year students from local middle high schools.

Again in Italy, in November 2015 we participated in an Open Engineering project at the Padua faculty of Engineering, which once again proved to be an excellent meeting between company and applicants.

Also in France, relationships with the local schools are on-going and productive. Some of the institutes that we cooperate with are: Haute Follis, CFA Flers Jean Guehenno, Centre de formation des industries technologiques Orne, St Aubin de la Salle and the closest INSA Rennes engineering training site.


Also in 2015, we also participated in the Financial State-ments Oscar, prize promoted and managed by FERPI – the Italian Public Relations Federation. The project rewards companies, dividing them by category, according to their capacity to prepare transparent and clear report able to provide stakeholder with clear and complete information on their work and their strategies, above and beyond the minimum requirements of the law.

3.3.4/LOCAL COMMUNITYEvery year we devote a small portion of our value added to the community in which we operate. Unfortunately, there are many needs and we cannot contribute to them all, even though we try to provide our support on a rotational basis to those that in our opinion seem to be the most deserving. We always welcome new partnerships and to support social projects not only through donations, but also by offering tangible mutual support, including through the involvement of our internal staff and their families. Indeed, we believe that promoting awareness in relation to important social issues is as important as providing financial support. Acting ethically and responsibly is not just limited to “doing charity work” but should be reflected in the choices and daily ac-tions of us all, paying constant attention to and respect for the needs of those who are less fortunate.

In 2015, we were also able to provide some support to some amateur level sport associations in the territory (soccer, bas-ketball, cycling and mountain biking) and a couple of local social initiatives. Each year requests for support submitted to our company, through the provided form, by 30 November, are evaluated in the early months of the following year and notified to all the Agencies and Associations which turned to us for support. Selection is carried out by the Top level Management according to transparent criteria and avoiding any conflict of interest between the parties.

3.3.5/PRESS AND MEDIA We also received press coverage during 2015 from a few national and local non-industry publications, often after in-depth interview with our Chairman or with top company management. Even though we do not actively seek media exposure it is with pride and satisfaction that we speak about our company and business experience. As with all our relations even those with the press are also marked by honesty and transparency, in keeping with our values and fairness that have always characterised our organisation.


Chapter 04. Environmental Sustainability


INPUT: RAW MATERIALSMETAL, STEEL, COPPER, BRASSENERGYWATER

PROCESSINGTURNINGMILLINGELECTRO-DISCHARGE MACHININGLASER SINTERINGPOLISHING

OUTPUT: FINISHED PRODUCTMOULDSINJECTION SYSTEMS

WASTEREFUSEWASTE WATERS

Our processes are not among the activities with high environmental impact as we do not use products with high chemical risk. We accept and comply with environmental legislation, aware that respect and environmental protection not only concern the individual but also productive entities. For this reason, in any situation in which a new company process is implemented with the same conditions, our choice falls on the one having less possible impact on the natural resources involved.

Raw materials (almost exclusively steel and copper), energy and water are at the base of our production process. Through the various stages of processing (internal and external) and surface treatments, we produce the finished product and production waste according to the diagram.

In brief, environmental impact concerns the consumption of energy, water and fuel, the storage and disposal of waste and packaging, and in a very limited way, due to the nature of our production, noise, air emissions and use of hazardous substances.

We are also fully committed to finding new technical solutions which offer energy savings, through:

• FLEXflow, a technology that allows customers to reduce the tonnage of their injection moulding machines with significant production energy savings;

• The use of insulating materials and geometric profiles optimised for hot runner systems aimed at avoiding heat loss;

• Particular technical solutions to shape bioplastics, renewable materials to reduce the consumption of traditional materials;

• new moulds and hot runner systems for the production of plastic parts with thinner walls, reducing the weight of the plastic parts and their disposal.


Packaging for our products consists of wooden crates, cardboard boxes and various materials used to insulate and protect the product inside the external box. A polyurethane-based foam is used to hold the part firm inside the box to prevent damage during transport. Where possible, it continues using larger quantities of eco-sustainable materials. The wooden and cardboard crates continue to represent 81% of the total value of packaging in 2015 as well.

4.1 / Raw materials

Only raw materials authorised by European regulations are utilised in the Italian factory's production process.

Steel is the main raw material resource used for the realisation of our product, is utilised in all our production plants and it is sourced in Europe (Germany, Italy, France, Slovenia and Sweden). Even though this sometimes results in an increased manufacturing cost, it ensures consistent final product quality standards.

The other raw materials are copper, which in 2015, featured an average incidence of 1%, brass 2% and tungsten 5%. The rest is made of various materials including aluminium and iron and special alloys.

STEEL




COPPER




OTHER (TITANIUM, VESPEL, BRASS PIPE, PTFE BAR)




WOODEN CRATES




CARDBOARD




OTHER (POLYURETHANE, POLYSTYRENE, BUBBLE, WRAP, CELLOPHANE)




Values shown in both tables refer to the value of the purchased product on total supply, not the quantity.

BRASS

consolidated 2013 na



TUNGSTEN





Company vehicles use fuel in traceable quantities as shown in the table:

In 2015, the inclusion of two new plants (USA and France) in the accounting perimeter is evident in all of the employed indicators, with the % of energy consumption growth even exceeding 100% in the case of methane gas and car fuel. This last piece of data is understandable in light of the great impulse given to sales and at meetings with the many global customers.

4.2 / Energy requirementsThe plant is fed mainly with Italian electricity drawn from the national grid (for office activities, machine operation and hot water heating) and with thermal power plants fuelled by natural gas, with overall capacity equal to 1,496 kWh (for space heating).

The Chinese plant instead uses electricity from the grid to operate the machinery and an innovative steam power service provided by local administration, which in our factory is used for the central air conditioning system and for the production of hot water.

The plants in USA and France mainly use Electrical Energy and Methane Gas (in a ratio of 3:1 in both cases).

The branches also prefer electricity and use the methane gas source in reduced quantities.

FUELS

u.m. Lt.




NATURAL GAS

u.m. m3




ELECTRICITY

u.m. Kwh

consolidated 2013 5.099.186



STEAM

u.m. GJ





In Italy waste water other than for domestic use is collected in special tanks, according to the ERC classification codes, differentiated according to the presence of oily emulsions and subsequently assigned to other companies authorised to dispose of them.

4.3 / Water requirements and wastewaterWater at the branches is only used for domestic purposes. However, in manufacturing plants, it is also used for some processes, fire safety, irrigation and cooling of factory buildings.

WATER CONSUMPTION

u.m. m3




4.4 / Emissions, noise and hazardous substancesThe main atmospheric emissions produced by plants are CO2 from natural gas fuelled boilers, gas refrigerants from air conditioning systems, emissions from the aspirations of the EDM, moulding, milling plants and the furnace. All work centres that require it are equipped with extraction systems complete with filters to prevent potentially polluting emissions and to reduce the spread of any emissions in the workplace. The level of CO2 emitted by the boilers is periodically monitored and controlled by specialised personnel. R22 and R410A refrigerant gas are used in air conditioning systems, whose emissions are periodically checked.

We have a program of periodic monitoring of emissions performed by an external consultant and maintenance of the heating plants is carried out by specialised external technical staff and reported, as required by law, in the plant handbook.

Our processes are not significantly noisy. With reference to internal noise, periodic environmental analyses are performed in accordance with local regulations for employee risk analysis. The major sources of noise come from some machinery and the extraction systems. Externally, as the company does not perform noisy processes, no additional analysis has been considered necessary.

With reference to more hazardous substances, following the chemical risk assessment performed in the company, special technical sheets have been prepared for the use and manipulation thereof.


4.5 / Waste production and disposalWaste produced in the production plants is carefully collected and disposed of. For the most part, our waste is non-hazardous, as a result of the type of processing we perform. To date, there have never been any accidents involving spillage or environmental contamination.

The data provided herein is collected from all of the production plants around the world except for the USA, where the data referring to the first 6 months or operation is not available. Identical monitoring has now also been implemented at Grand Rapids, accordingly the document for next year will include all plants.

Of the total waste produced at consolidated level in 2015 over 66% is recyclable (a slightly higher percentage in comparison to last year, +3%) while 22% is classified as hazardous waste according to the CER (Certified Emission Reductions) international classification, a slightly lower value than last year. The branches also collect sorted waste generated from office activities: mainly paper and finished toner cartridges. At the moment only South Africa does not perform any type of conscientious and responsible collection of the produced waste. In Italy, all companies to which we deliver our waste (for purposes of disposal), have special authorisation for the collection of waste and those which collect hazardous waste hold at least one certification such as ISO9001-ISO14000-OHSAS18001 - EMAS EN 000640.


CONSOLIDATED2013

CONSOLIDATED 2014

CONSOLIDATED 2015

EWC Code

Waste description Recyclable Kg Produced

Kg Delivered

Kg Produced

Kg Delivered

Kg Produced

Kg Delivered

150101 Paper and cardboard packaging YES 18.580 18.080 13.190 11.490 17,335 18,335

150102 Plastic packaging YES 980 950 1.340 1.220 1,410 1,440

070213 Plastic waste YES - - - - 600 600

120105 Plastic scrap and shavings YES 20.980 19.180 18.990 19.530 26,120 30,580

120103Non-ferrous metal shavings and filings (mainly brass, copper and aluminium)

YES 8.275 8.275 13.770 13.770 115,360 115,360

120101Ferrous metal shavings and filings (mainly Steel)

YES 349.470 341.120 339.191 346.541 326,440 318,870

120115 Machining sludge - graphite NO 7.179 7.179 4.332 4.332 4,647 4,647

150202 Filter materials NO 975 975 1.020 1.020 620 620

130208 Used oil NO 400 400 1.000 1.000 1,200 1,200

130105 Oil emulsion NO 35.430 35.430 68.820 68.820 80,260 80,260

150106 Mixed material packaging NO 86.840 85.480 74.920 73.700 84,600 86,780

150110Empty drums with traces of danger-ous substances

NO 2.677 2.677 1.370 1.370 1,918 1,918

120301 Aqueous washing liquids NO 33.750 28.750 71.100 70.100 61,090 60,090

160213Discarded equipment containing hazardous parts

NO - - 154 154 69 69

160214 Discarded equipment NO - - 942 942 788 788

200121Florescent lamps and other items containing mercury

NO - - - - 68 68

080317 Used toner cartridges * YES - - 20 20 10 10

110111Aqueous washing liquids containing dangerous substances

NO 14.580 17.580 - - 22,400 22,400

120109Emulsions and solutions for machin-ery free of halogens

NO 19.100 19.100 - - - -

150105 Composite material packaging NO - - - - - -

170411Cables other than those in category 170410

NO 930 930 750 750 1,620 1,620

170405 Iron and steel YES 16.400 16.400 5.820 5.820 11,410 11,410

160605Other batteries and accumulators

NO - - - - 161 161

120199 Waste not otherwise specified NO - - - - 373 373

080111 Waste painting and varnish YES 70 70 - - 10 10

120104 Dust and particulate non-iron mate-rial NO 3.950 3.950 - - -

150103 Wooden Crates YES - - - - 16,860 16,860

130502 Oily sludge NO - - - - 781 781

**The table illustrates the quantities collected in the two production plants. Waste from the branch offices is not weighed as the quantity produced was under-standably very small.

** Where delivered quantity exceeds produced quantity, it takes into account amounts produced and not disposed of in the previous year.

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