Sustainability - Inglass · 10 Sustainability Report 2013 1.1 / Overview INglass S.p.a. San Polo di...

INglass S.p.A.Via Piave, 4 - 31020 S.Polo di Piave (TV) ITel. +39 0422 750111 Fax. +39 0422 [email protected] [email protected] www.hrsflow.com

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1INglass S.p.A.2013

2 Sustainability Report2013

3INglass S.p.A.PREFACE

Excellence

Despite signs of recovery in some foreign leading markets, even 2013 was not an easy year. On one hand, price pressure especially in the mould sector, continues to be a strong barrier with many international customers. On the other hand mergers in progress in the hot runner sector represent a challenge for those who, like INglass, come from a small company with little vertical operating structure.

Despite this, growth was experienced in consolidated turnover by 6.76%, number of employees in the global network by 12.3% and worldwide customer base by 8.3%.

We believe this is the result of our persistence and firm conviction that a high quality product, the result of decades of experience and continuous investment in research and development, cannot but differentiate itself in the customer's eyes. INglass - HRSflow customers' are demanding, highly technical and willing to attribute the proper value to a quality product.

For this reason we continue to invest in R&D, Training, Lean production, Computerisation to the highest level of all repetitive processes and Quality, with the aim of pursuing Excellence, the only real plus which is marketable today.

Excellence, must however, be real Excellence: credible, verifiable and shared. The Sustainability Report fits into this context and is an essential tool for dialogue with our stakeholders, to open up to their requirements, to share our values and together, continue the growth process in the interests of all parties directly or indirectly involved.

Maurizio BazzoChairman


How we compiled this reportThe aim of our Sustainability Report corresponds to the Group of companies that report to the Italian HQ and that fall within the Groups Consolidated Results. Therefore our second production plant in China and the technical and commercial branches in Canada, France, Brazil, Hong Kong, Germany, Spain, Turkey, Portugal and USA are included.

Except for the SCC and SCCA branches in Spain and Portugal (both held by INglass Spa for 50%), the other subsidiaries are wholly owned by the parent company INglass Spa (owned 100% or 99% as the case maybe).

In the Economic Sustainability section the indicators shown were therefore weighted on percentages in order to

ensure perfect alignment with the Financial Statements. Conversely, in the Social and Environmental Sustainability sections, KPIs refer to the 100% complete figure, as we are of the opinion that the statistical data concerning personnel, customers and impact must be considered in their entirety. 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.

Datas inside the present document refer to year 2012 (both Italy and Group datas) and 2013 (only Group data). Starting from 2014 all will refer to consolidated datas information.

INGLASS SPA

HRS FRANCE S.r.l. Unipersonnelle

France

HRS Flow do Brasil comércio de sistemas de câmara quente importação e exportação LTDA

Brazil

HRS Hot Runner Systems NA Inc.

Canada

HRS GmbH Vertrieb Deutschland

Germany

INglass HRS MAKINE KALIP YEDEK PARÇA VE SERVIS SAN.

TIC. LTD.Turkey

HRS Hong Kong LimitedHong Kong

SCC Assistencia Tecnica Unipessoal Lda.

Portugal

Sistemas De Canal Caliente Iberica S.L.

Spain

HRS USA Inc.Usa

INglass Tooling & Hot Runner Manufacturing Co.,Ltd Cina

China

REPORT SCOPESustainability Report 2013


9

35

Index

1.1 Overview 1.2 Our mission 1.3 Guiding 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

ExcellenceHow 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 2.6 Suppliers

10151617

313233

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363739404041

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 2013?


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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 policy3.1.6 Industrial relations3.1.7 Protection of equal opportunities and respect for human rights3.1.8 Training3.1.9 Safety and accidents at work3.1.10 Disciplinary measures and disputes3.1.11 Internal communication3.1.12 Organisational climate and motivation

3.2 Customers3.2.1 Customers characteristics and breakdown3.2.2 Service support3.2.3 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 Waste Production and Disposal 4.5 Emissions, Noise and Hazardous Substances

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6970717173

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. Corporateidentity


1.1 / Overview

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 of Directors, CEO, Board Member: Mr. Maurizio BazzoCEO, Board Member: Mr. Tiziano BoscariolBoard Member: Ms. Daniela BertoSpecial Attorney: Mr. Ruben Vidotto

Controlling authorities BOARD OF STATUTORY AUDITORSChairman of the Board of Statutory Auditors: Ms. Antonietta BiscaroStanding Auditor : Mr. Manfred Parolin and Ms. Francesca PetrinAlternate Auditor: Mr. Dino Canevese and Ms. Laura Filippin

AUDITING COMPANYReconta Ernst & Young Spa

Corporate purpose INglass-HRSflow, company operating for more than 25 years in the injection moulding process of thermoplastic materials industry, market leader in the automotive industry, provides not only moulds and hot runner systems, but also consulting engineering services to support customers from the early planning stages until mould testing and customer service throughout the life cycle of the product.

Registered trademarks

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

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


Certification UNI EN ISO 9001:2008

Total number of employees 604

The product range 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 sys-tems for the production of medium to large sized components for a wide range of applications, but in particular for automotive industry components. HRS MultiTech is the line of hot rooms designed and manufactured for slim thicknesses and light weight high volume production applications.

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:--- HRSflow hot runner systems for large-scale applications such as in the automotive industry, white goods and gardening --- HRS Multitech hot runner systems for light weight high production volume and light weight applications such as medical field, caps and closures and packaging

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

68%HRSflow

29%MOLD

1.8%MULTITECH

1%CONTROL UNITS

0.2%SLM


INglass S.p.a. a livello mondialeINglass S.p.a. worldwide

SCC Assistencia Tecnica Unipessoal Lda.

Albergaria-a-Velha (Portugal)

2008

100% Sistema de Canal Caliente Iberica S.L.

12 employees

Sistemas De Canal Caliente Iberica S.L.Lda.

Barcelona (Spain)

2005

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

7 employees

HRS Flow do Brasil comércio de sistemas de câmara quente importação e exportação LTDA

Sao Paulo (Brazil)

2004

99.5% INglass S.p.a. + 0.5% Maurizio Bazzo

14 employees

HRS Hot Runner Systems NA Inc.

Windsor (Canada)

2002

100% INglass S.p.a.

23 employees* (USA+Canada)

HRS USA Inc.

Usa

2010

100% HRS Hot Runner Systems Na Inc.

23 employees* (USA+Canada)

{ * Subsidiaries that share personnel }


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

Bursa (Turkey)

2010

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

6 employees

HRS FRANCE S.r.l. Unipersonnelle

Biol Le Haut (France)

2002

100% INglass S.p.a.

4 employees

HRS GmbH Vertrieb Deutschland

Heilsbronn (Germany)

2003

100% INglass S.p.a.

18 employees

HRS Hong Kong Limited

Hong Kong

2008

100% INglass S.p.a.

215 employees* (China + Hong Kong)

INglass Tooling & Hot Runner Manufacturing Co.,Ltd China

Hangzhou (China)

2006

100% INglass S.p.a.

215 employees* (China + Hong Kong)

Registered in ChinaAll registered trademarks are the exclusive property of INglass Spa, INglass Tooling & Hot Runner Manufacturing Co. Ltd and subsidiaries.

UNI EN ISO 9001:2008

英格斯模具制造（中国）有限公司


Company divisions and product lines

Division manufacturing multicolour and multi-component moulds for automotive headlamps and rear lights and moulds for large transparent polycarbonate surfaces (Plastic Glazing).

02.large aesthetic surfaces

01.head lamps and rear lights

0201

Division manufacturing hot runner systems for the moulding of plastic parts for the automotive sector, white goods, homeware, construction industry, garden items, packaging

02.non automotive01.automotive

02

01 HRS�ow Division line manufacturing multi-cavity systems for moulding reduced weight parts and high production volumes for the packaging, caps and closures, medical, cosmetic, automotive and electronic sectors

02.high volumes and reduced weights

01.high repeatability

01

02

Passion for expertise


1.2 / Our mission

INglass Spa, with its HRSflow division for hot runner systems, provides engineering and consultancy services for the manufacture of plastic products with its INglass Spa HRSflow division for hot runner systems. We support our customers right from the initial design stages, providing advanced moulding solutions, thanks to many years of experience in making moulds for the lighting sector. The MultiTech line in the HRSflow division designs and manufacturers hot runner systems for all application sectors, such as automotive, medical, caps and closures, packaging and cosmetics, which demand fast cycle times and high aesthetic standards.

• We support our customers right from the initial design and simulation stages through to moulding of the end product, continuing support through to after-sales service. We deliver support and solutions that meet customers’ needs thanks to high levels of competence in the moulding process, made possible by a highly qualified team of experts and a company mind set committed to critical scientific analysis of any problems that arise.

• We invest heavily into streamlining and automation of processes in order to improve our client service. Our aim is to continually reduce response times and, to this end, we adopt automated systems that enable us to share and rapidly update all information relative to our systems, allowing us to communicate automatically with our customers, anticipating their requests. The result is real support for our business and that of our customers, who need increasingly more rapid answers. • Our R&D division constantly studies and develops new solutions and new technologies, staying ahead of the market. Investments into development are used for: product tests on new materials, technologies to optimise the performance of our systems and guarantee excellent quality of the moulded piece, studies into energy savings and reducing waste.

INJECTION MOULDINGinjection moulding is an industrial production process whereby the plastic material is melted and injected at high pressure into a closed mould that is opened once the piece has cooled.

MOULDthe mould is a complex mechanical device, injection filled with the melted plastic material, which takes on the shape formed by the 2 parts comprising the mould (cavity and core).

HOT RUNNERthe hot runner ensures that the melted plastic material injected into the mould by the press nozzle stays at the right temperature.

INJECTION MOULDING MACHINEthe plant (injection moulding machine) where injection moulding operations take place consists of a nozzle (ex-truder) 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


1.3 / Guiding values

COMMON SENSE, our compassCommon sense for INglass means assessing, deciding and acting rationally on the basis of experience in order to achieve a positive result while minimising any negative effects. Each person involved is required to be the author of his or her individual decisions; to listen to the opinions of others in order to find common shared understanding and then act with restraint and good judgement.

IMPROVEMENT, our commitmentContinual improvement for INglass means improving day after day, continuously to make sure that yesterday’s mistakes are not repeated today. We believe in the ability of all our co-workers and so we set achievable goals that are however no less challenging. Each of us is actively involved in the project, giving tangible support to meet the final result and therefore responsible for all our individual actions.

EXCELLENCE, our passionExcellence for INglass means worrying about performing a task, about doing it well and improving how it is done. Each of us is required to take care with details, to analyse every action and have the necessary spirit of self-criticism in order to add perfection to our every task.

FLEXIBILITY, our strengthFlexibility for INglass means offering people the chance to manage their own work, adapting it to the needs of the moment or the situation, while working in the same direction and towards the same goals. This, in turn, translates into the ability to listen to customers and to meet the specific needs of each project in a timely proactive manner.

1.

3.2.

4.

1.COMMON SENSE, OUR COMPASSWhy waste all this time to search, sort things out and mix when you could have prevented the problem from the beginning? (Philip B.Crosby)

2.IMPROVEMENT, OUR COMMITMENT Climbing the same mountain you’re not getting higher(Elisa)

3.EXCELLENCE, OUR PASSION The only way to do great work is to love what you do (Steve Jobs)

4.FLEXIBILITY, OUR STRENGHTThe ideas come in unexpected ways, just keep your eyes open (David Lynch)


monitoring the entire moulding process, even remotely. Meanwhile, we have continued to develop business relations in order to provide technical and sales support for customers on the main markets.

In 2009 we took up the challenge of the Asian market and inaugurated a new production plant in Hangzhou, close to Shanghai. This new plant, with a total surface area of 12,200 m², 9,600 of which set aside for production activities, posted a € 9 million turnover in 2011. The China plant designs and produces hot runner systems, reproducing the same designs, technology and quality standards as the Italian parent company. The China plant targets Asia and enables our company to supply products to new fast-growing markets from China to India and Vietnam.

In 2010, we further diversified our product range by introducing the MultiTech line, moulding parts with reduced weight and high volume productions. MultiTech targets fields other than the automotive industry, mainly the medical, packaging and closures sectors, which today represent 60% of the global plastics market.

In 2011, our company started heavy investment of resources and energy into the simplification of processes and automation of tools that enable monitoring and control not only of the design and manufacturing divisions, but also of purchases and assistance right through to the sales department.This path was consolidated in 2012 with the introduction of CRM (Customer Relationship Management), a software platform to manage and make available information worldwide, strictly controlled by headquarters in real time. These two years have marked a milestone in our company’s history, revolutionising our organisational approach with a view to improving in-house structure and the service we provide for our customers.

1.4 / Who we are

1.4.1/HISTORY

>1987Founded 25 years ago under the name Incos (Industria Costruzione Stampi – Mould Manufacturing Company) in a garage on the outskirts of Treviso, our company started with the design and production of moulds for the plastic materials sector. Soon however, our focus turned to the niche market segment of multicolour injection and multi-component rotational moulding for the automotive sector (head and tail lamps), offering great potential but also highly selective and very demanding.

In 2000, we acquired A.S. (Attrezzature Speciali – Special Equipment), a well-known Milan company with 20 years’ experience in the field of hot runner systems. This led to the creation of the H.R.S.flow division (Hot Runner Solution) specialising in the design and manufacture of hot runner systems for plastic injection moulding. Years of experience gained by A.S. in hot runner systems and INglass know-how in mould manufacture enable us to offer the market a range of hot runner systems capable of meeting all the needs of the automotive industry(not just lighting therefore). This strategic decision has been repaid many times over by the market in terms of international recognition and turnover.

In 2004 the experience gained during our first 15 years and potential development opportunities in the field of injection moulding led to the setting up of the INglass (Instead of Glass) division. It immediately specialised in injection compression moulding for the manufacture of large transparent polycarbonate surfaces for the automotive industry (a technology known internationally as Plastic Glazing). This marked a change of direction in the production of large transparent surfaces for automobiles with polycarbonate destined to replace glass. In the meantime, INglass (initially created as a brand in the Glazing division) achieved such high visibility on the market that the decision was made in 2006 to change the company name from Incos to INglass.

Subsequently, the technological complexity and high criticality of production costs involved in moulding was to highlight the need for highly reliable top-quality equipment for process monitoring and control. This led to the creation of the division dedicated to producing control units capable of


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

INglass currently heads an international group, with a controlling interest in the following companies:

PRODUCTION SITES

In 2012 the company adopted the Lean Production system which is based on the optimisation of flows, waste reduction and the use of proven methodologies 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 the production optimising phases and resources used for any other purpose other than the creation of value for the customer.

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

BRANCH OFFICES FOR TECHNICAL, SALES AND AFTER-SALES ASSISTANCE

• HRS Hot Runner Systems NA Inc. in CANADA• HRS FRANCE S.r.l. Unipersonnelle in FRANCE• HRS Flow do Brasil comércio de sistemas de câmara quente importação e exportação LTDA in BRAZIL• HRS Hong Kong Limited in HONG KONG• HRS GmbH Vertrieb Deutschland in GERMANY• Sistemas De Canal Caliente Iberica S.L. in SPAIN• INglass HRS MAKINE KALIP YEDEK PARÇA VE SERVIS SAN. TIC. LTD. in TURKEY• SCC Assistencia Tecnica Unipessoal Lda. in PORTUGAL• HRS USA Inc. in the USA

>OUR NETWORK OF SALES REPRESENTATIVES AND DISTRIBUTORS ENABLES US

TO SUPPORT A TOTAL OF 48 COUNTRIES WORLDWIDE.


1.4.2 CORPORATE STRUCTURECorporate ownership is divided between five shareholders, two natural persons and three legal persons.

SHAREHOLDERS

58%DEIMOS SRL

24%873740 ONTARIO INC

12%RAMANDOLO IMMOBILIARE SRL

4%BOSCARIOL TIZIANO

2%BERTO DANIELA

PartnerPartner and Mould Division Sales Manager

Turin-based company jointly owned by Ruggero Morandini and Maria Carmela Squillante.

Canadian company producing moulds and plastic applications for the automotive market. Competitor in the mould sector, acquired a stake in Inglass in 1999. Now it is also a customer of the HRSFlow division.

Company owned by the ChairmanMaurizio Bazzo.

1.4.3 COMPANY ORGANIZATIONThe 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, directly reports to the main Italian Headquarters. Each branch is organised in order to offer full customer support, from sales to after-sales assistance.

CHAIRMAN CEOBazzo Maurizio

KPOCallegari Simone

RSPPCallegari Simone

QUALITYPetenà Alessandro

ITGerometta Luca

ADMINISTRATION AND FINANCE

Vidotto Ruben

HUMAN RESOURCESRusso Barbara

MARKETING Montagner Chiara

BUSINESS DEVELOPMENTBosco Alessandra

HRS DIVISION Bazzo Maurizio

A.I.

MOULD DIVISIONBoscariol Tiziano

MULTITECH DIVISION Rossi Massimo

PLANT IN CHINACarloni Osvaldo

> ORGANIZATIONAL CHART updated to 31.12.2013


GENERAL MANAGER Carloni Osvaldo

SUBSIDIARY IN INDIASoligon Remo

DIRECTORTsang Flora

ITVazzoler Andrea

SALESChen Jason

PRODUCTIONTurbian Falvio

MOULD DIVISIONMarangoni Gianni

> ORGANIZATIONAL CHART updated to 31.12.13

QUALITYYi Huang

HUMAN RESOURCESChen Chris

GENERAL MANAGER BRANCH OFFICES

Bazzo Maurizio

updated to 31.12.13

HRS USA Kidd Todd

HRS CANADAKidd Todd

HRS FRANCE Bazzo Maurizio

(a.i.)

HRS TURKEY Pesce Gianluca

HRS SPAINRibes Xavier

INGLASS HRS CHINA

Osvaldo Carloni

HRS GERMANY Keller Klaus

HRS HONG KONG Tstang Flora

HRS BRAZIL Carvalho Luiz

HRS PORTUGAL

Ribes Xavier

> ORGANIZATIONAL CHART FOR TECHNICAL AND SALES BRANCH OFFICES

administration technical o�ce assistance sales

GENERAL MANAGER BRANCH OFFICE

> ORGANIZATIONAL CHART FOR TECHNICAL

updated to 31.12.13 AND SALES BRANCH OFFICES


1.4.4/MARKETSThe INglass group was primarily established to design and manufacture equipment for the automotive industry. Since 2003 it has grown steadily, recording only a slight inflection in 2009 which led the company to diversify hot runner systems now used in all application sectors and not just the automotive industry and to open a production plant in Hangzhou, China. The efforts made to increase our know-how in the plastics sector and organisational innovation supported by the introduction of new automation tools, have seen INglass develop its distribution network in a comprehensive manner and affirm its products in all reference markets. The HRSFlow division alone, as result of its hot runners systems, has recorded a CAGR of 30.12% during the 2010-13 period.Since 2001, the year the HRSflow hot runner division was established, the main market has been the automotive

lighting

cosmetics

technical materials

caps &closures

packaging/thin wall

gardening

automotive

houseware

electronics

storage

medical

consumer goods

domesticappliances

one. However, due to their technical and performance characteristics, our products have proven suitable for all medium/large scale applications, such as furniture, garden equipment and components for household appliances. With specific focus on these applications, in 2009 the HRS Multitech line was created, which began to erode market share belonging to our competitors who were traditionally recognised in the sector for light weight high volume production applications. To date, the company has confirmed its ability to manage even the most demanding applications, has achieved significant results in the sectors that call for very high technical and quality standards such as in the medical field, caps and closures sector proving to be equally adept at handling less demanding applications.

22Sustainability Report2013

INglass moulds

front lens

MOULD MARKET The main filed of mould application is the automotive industry. The most important applications in this industry are the lighting units (front and rear) and glazing, technology for the realisation of large polycarbonate surfaces rather than glass (sunroofs, windscreens, etc.). Thus it is difficult to determine the exact value of the automotive lighting mould market, core business for INglass, due to the unusual way in which this market is organised. Several automotive manufacturers have preferred to have their own in-house specific workshops, carrying out their own machining activities. Consequently we can only estimate the value at approximately 300 million Euro, of

Europe, a growing presence in the U.S. market and above all in Asia, where the start-up of the production plant has marked a turning point enabling the group to penetrate the fast-expanding local market.

The drive towards internationalisation, with the opening of branches in strategic locations, has been a fundamental choice that has allowed the company to survive even through periods of economic crisis. To date, the company's turnover is distributed globally with a stronger presence in

which, in broad terms, approximately 40% is in Europe. We are dealing with a rapidly growing market with huge development potential, due to the gradual phasing out of glass, in favour of cheaper plastic materials and the development of technologies that reduce the production of waste thereby lowering negative effects on the environment.The mould sector for lighting units is a highly concentrated market where approximately 10 world players vie for the entire sector. Future trends foresee further market concentration as car manufacturers will increasingly outsource only some niche production processes. In addition for some years INglass has also been investing


INglass moulds

front lens

€ 986.772 € 1.012.463€ 929.454

€ 1.181.284€ 1.349.099

€ 1.519.650€ 1.694.192

€ 1.883.164 € 2.086.328€ 2.277.352

€ 0

€ 500.000

€ 1.000.000

€ 1.500.000

€ 2.000.000

€ 2.500.000

2007 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f

CAGR 13e-16f

in Asia, in Hangzhou, where it is already present through its hot runner system production site for the HRSFlow division, to strengthen the presence of moulds in terms of local production. The launch of the mould workshop is planned for 2014, with instrumentation and equipment equal to those at the Italian head office.A further key aspect in the evolution of the front lighting unit market is the growing trend to produce front lens for cars with the frame included in the price. This translates into the need for suitable technology for this particular requirement that is rotational moulds that INglass produces as standard. The Company is in fact a recognised leader in automotive lighting and continues to invest both in updating and increasing its machinery to improve performance and consolidate the scope of business. In recent years there has also been an increase in the use of LED technology for front and rear lights in standard cars which require complex precision components which INglass already possess. New international regulations require a substantial reduction in CO2 emission which has created a substantial increase

in the demand for moulds with a high aesthetic value to injection-compression for the replacement of components previously in sheet metal and today in light resistant polymers as well as a reduction of the thicknesses in headlight units. INglass thus has responded to this market development with its unique market experience and precision.

MOULD TURNOVER PER APPLICATION SECTOR

92%MOULDS FORAUTOMOTIVE LIGHTING

8%PLASTIC GLAZING MOULDS

HOT RUNNER MARKETThe hot runner system is the most critical injection mould component and is fully customisable 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 2013 is estimated at about € 1.7 billion with a growth rate of 11.5% compared to 2012. The average growth rate in period 2013-2016 is foreseen more or less +10% (refer to the table).

HOT RUNNERS WORLDWIDE MARKET


HRS�ow

bumper

The geographical distribution of the hot runner market is not closely connected with the production of the parts, but concentrates on injection mould production. 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 40% of sales are concentrated (25.2% of them in China). The Central Europe market represents 15% of total sales and is specialising in large volume moulds, while Amer-ica accounts for 18% 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 reg-istered steady growth, faster than the competition, which in only a few years has led it to be the 6th player in the hot run-ner 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, storage, electronics, packaging, medical and any industry where a plastic component is injected.


HRS�ow

bumper

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 customised solutions for that type of application. From the value of the market, the automotive industry is the most relevant and in 2014, following market predictions, it will be around 27.3% of the total market, which is approxi-mately € 514 million. In the automotive market, the HRSFlow share increased from 11.8% in 2011 to 12.1% in 2012, con-firming its position as the third largest player worldwide.

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 pro-ducing the plastic component. Then the TIER 1 assembles the finished component (headlights, 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 compo-nents. HRSFlow often establishes partnerships with these entities to offer customers the complete package as a result of the synergy of three key suppliers.

PLASTIC MATERIAL SUPPLIER

HOT RUNNER SUPPLIER

MOULDMAKER

MOULDER(TIER 1)

CARMANUFACTURER


HRSmultitech

co�ee capsules

APPLICATION SECTOR: HRS MULTITECH HOT RUNNER SYSTEMS FOR LIGHT WEIGHT APPLICATIONSThe car market has traditionally been the main application industry for HRSFlow, an INglass division of the group, but 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, 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 2012, the hot runner market value in the electronics industry accounted for 16% and 16% for packaging.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 mould (caps, tubes, trays ...) to the end customer, who then will issue the product on to the market. In respect to the Automotive industry, there are however, much higher technological barriers and often co-development partnerships are created between hot runners system supply and press manufacturers.


HOT RUNNER SUPPLIER

MOULDMAKER

MOULDER

ENDCUSTOMER

TURNOVER PER FIELD OF APPLICATION

65.5%AUTO LIGHTING

26%AUTOMOTIVE

8.5%PACKAGING/CAPS/MEDICAL/OTHER

HRSmultitech

co�ee capsules

1.4.5. DISTRIBUTION SYSTEM

Through our current network of sales branches and distributors we serve customers in 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 two 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 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 or 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 2013, in line with this strategy of close customer relations and providing fast qualified support, we have expanded our presence in the Benelux.


1.4.6. 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. Furthermore, 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 alternate 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

Production sites

Sales engineering and technical support

Local o�ces

cooling system solution thus optimising cooling, which is a crucial phase for the appearance of the product piece. 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 Italian production plant has three different product lines (moulds, hot runners and control units) which permit us to produce a 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 the one in China it has a try-out division equipped with different tonnage presses available, where highly qualified technicians can test the product before it is sent on to the customer. In addition this department is also at the customer’s disposal to carry out tests on new materials or new leading edge applications.


AFTER-SALES SERVICES With its global customer service structure, HRSflow ensures support from system installation through to after-sales maintenance. Intervention time is a key factor of success in any field of application, from automotive to small applications such as those in the medical, caps and closures and packaging sectors. An immediate response is guaranteed by our web-based platform, which manages the entire history of each single system throughout its entire life cycle, ensuring that all HRSflow local after-sales centres are integrated and provide 24/7 customer technical assistance to reduce downtime all over the world. Thanks to this web platform, all hot runner system-related activities in the various plants around the world are made available to the entire service network, constantly monitored by our headquarters. This tool enables HRSflow to constantly check customer needs, product reliability and the quality of services provided by our assistance network. Our internal organisation, people and platforms that automate specific processes mean prompt, capillary, efficient, effective service, considering that, in this way, any technician anywhere in the world is informed about all the system’s background. The entire life of the system is recorded and can be traced by customer, end user or geographic location. The system is monitored in the event that it is moved from one plant to another. Furthermore, this database allows our company to carry out systematic analysis of any malfunction or defect. Malfunctions can therefore be constantly monitored to improve product reliability.

HRSflow delivers an all-round service for system installation and process optimisation though its try-out support and technical assistance for any ordinary or additional maintenance of the hot runner. Our organisation includes local centres in many countries and continents, having the necessary equipment and technical staff competent to provide immediate support and meet customers’ needs, in their own language.These centres also have spare part warehouses in order to guarantee complete support for customers within 24 hours all over the world. HRSflow can provide a customised package of spare parts, so that the customer can get an in-house supply of a minimum quantity of the most commonly used essential parts. These solutions are usually based either on the spare part kit supplied with each system, or on the customisation of spares according to the needs of the systems in a specific plant or to the optimum quantity for each item code. This detailed management of all customer assistance requests worldwide brings us closer to the customer and ensures our on-site presence, with the right

product, delivering a prompt, effective, efficient, complete service. Our main goal is to work together to improve system reliability, gathering problem data, identifying critical areas, taking corrective action and drawing up plans for improvement with a view to avoiding a repetition in the future.

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 started as mouldmakers and over the years we have specialised in the manufacture of injection, multicolour and multi-component moulds for lighting (automobile lights and headlamps) and injection and compression moulds for plastic glazing applications. This technology has marked a significant breakthrough in the production of automobile glazing, with glass destined to be phased out in favour of large transparent surfaces made from plastic material.

Multicolour, multi-component moulds

1991 2004- Plastic glazing moulds- ICM Tecnology

In addition to moulds, our company also produces hot runner systems. The main aim of these is to keep the plastic injection material hot from when it enters the system through the nozzle until it enters the mould cavity. The hot runner consists mainly of the manifold, which takes the plastic material from the press nozzle, and the nozzles that distribute the plastic material into the mould to produce the


During the entire injection process, certain parameters such as temperature, nozzle opening and closing operations, energy consumption and operating anomalies, need to be constantly adjusted and monitored. Our company is equipped to supply customers with control units that provide indispensable support for ensuring correct working of the press and capable of optimising hot runner system performance. Multi-cavity systems are normally managed by external control units, as injection presses often lack the number of zones needed to cover production requirements due to the high number of cavities involved. Therefore, if both hot runner and mould are new, a control unit is included in the supply agreement in order to make the integrated mould and hot runner systemfully autonomous.

plastic part. What sets us apart in our field is our ability to bring together both our technical expertise in hot runner systems and our know-how and experience gained from years of experience in mouldmaking.

SLM technology allows for the production of inserts in steel thanks to laser fusion of layers of metal powders. These inserts can be designed with cooling channels shaped to suit the mould surface.

HRSflow promotes the use, and the benefits, of SLM Technology in plastic material moulding. This is the manufacture of inserts and accessories in injection moulding where the cooling process is a key factor for production optimisation. SLM is also a more suitable alternative for highly conductive materials, with poor mechanical properties and limited wear resistance, while still maintaining the high hardness levels common to the steel of the mould. This technology directly benefits overall moulding process costs for OEMs, considering that it reduces cycle time, which means lower costs.

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


HOT RUNNER DIVISION1. Further strengthen the global sales force to increase

market share and increase the percentage of purchase orders;

2. Focus on new markets as a result of the MT line and the opening of new technical trade branches (for example in Russia and South Africa)

3. Reduce the average cost of production by at least 10%

4. Continue to invest in research and development of new products to improve and refine new production lines aimed at industries that are an alternative to the automotive sector

5. Open a manufacturing plant in the Americas

ENTIRE GROUP 1. Continue to improve brand recognition by customers and

coordinated communication of our products;

2. Further increase qualitative performance;

3. Further reduce product and drawings delivery times

The long-term strategy of the Inglass Group is still focused in two macro-objectives:

1. Increase the market share in the Asian regions as far as the automotive industry is concerned, becoming a leader in the automotive lighting sector;

2. Increase the market share in other markets (in sectors other than the automotive industry) and in fast-growing geographical areas;

Achieving these ambitious goals requires the pursuit of several "intermediate" goals in the short to medium term, including:

MOULD DIVISION1. Start up the production of moulds also at the Chinese

plant (by 2014);

2. Start the process of diversification from the automotive lighting sector;

1.5 / Strategies and Policies


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. Identification of our main Stakeholders has always been the first step in preparation of our Report. Once

1.6 / Our stakeholders

> FINANCIAL PARTNERS

> HUMAN RESOURCES

> COMMUNITIES

> SHAREHOLDERS

> CUSTOMERS

> SUPPLIERS > THE ENVIRONMENT


1.7 / Main KPIs: overview table

KEY PERFORMANCE INDICATORS (KPI)

Financial responsibility ITALY 2012 CONSOLIDATED 2012 CONSOLIDATED 2013

Turnover € 66.236.085,00 € 79.967.000,00 € 85.370.000,00

Turnover variation compared to previous year + 25,4 % -- + 6,76%

Total investments € 4.423.321,00 € 5.000.000,00 € 11.902.000,00

Added value created € 27.488.721,87 € 34.825.000,00 € 35.000.000,00

Social responsibility ITALY 2012 CONSOLIDATED 2012 CONSOLIDATED 2013

Employees 270 538 604

% permanent contracts 88,00% 98,00% 93,00%

% fixed term contracts 12,00% 2,00% 7,00%

Staff turnover 21% 34% 39%

Female employees 39 101 * 109

Male employees 231 437 * 495

Part-time employees 7 9 9

Employees with the same nationality as the country where the unit is located 252 515 573

Employees with foreign citizenship 18 23 31

Interns and trainees hosted during the year 24 26 32

Total training hours for employees 7.047 10.125 8.169

Hours of in-house training for colleagues located abroad 4.016 4.016 2.896

Total number of accidents** 4 4 5

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

Ratio no. of accidents/ No. of employees 1,5% 0,7% 0,01%

Environmental responsibility ITALY 2012 CONSOLIDATED 2012 CONSOLIDATED 2013

Natural gas consumption (m3) 81.557 m3 91.213 m3 110.721 m3

Electricity consumption (kwh) 3.626.051 kwh 5.145.691 kwh 5.099.186 kmh

Steam energy consumption (GJ) - 10.000 GJ 7.098 GJ

Water consumption 4.515 m3 21.136 m3 20.973 m3

Fuel consumption for company vehicles (Lt) 51.236,43 Lt. 70.569,43 Lt. 82.000 Lt.

Total waste produced 463.960 kg. 499.980 kg. 620.566 kg.

% weight of hazardous waste/total waste produced and disposed of 18,2% 19,1% 17,2%

% weight of recyclable waste/total waste produced and disposed of 64,9% 65,3% 66,8%

* Data updated due to an error during the revision of the previous document.** 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 VALUE ADDED ITALY 2012

CONSOLIDATED 2012

CONSOLIDATED 2013

Revenues from sales and services (net of revenue adjustments) 66.236.085,00 79.967.000,00 85.370.000,00

Changes in inventory of work in progress, semi-finished and finished goods -202.091,00 -202.000,00 -2.246.000,00

Other revenues and income 302.855,00 1.530.000,00 1.047.000,00

Revenues from core business 66.336.849,00 81.295.000,00 84.171.000,00

Capitalisation of long-term costs 1.353.502,00 1.353.000,00 2.362.000,00

GLOBAL PRODUCTION VALUE 67.690.351,00 82.648.000,00 86.533.000,00

INTERMEDIATE PRODUCTION COSTS 38.367.901,13 43.985.000,00 45.764.000,00

GROSS VALUE ADDED FROM ORDINARY OPERATIONS 29.322.449,87 38.663.000,00 40.769.000,00

Ancillary revenues 32.259,00 49.000,00 271.000,00

Ancillary costs 639.871,00 581.000,00 -996.000,00

Result from non-core activities -607.612,00 -532.000,00 -725.000,00

Non-recurring income 374.393,00 582.000,00 20.000,00

Non-recurring costs 65.337,00 155.000,00 43.000,00

Result from non-recurring items 309.056,00 427.000,00 -23.000,00

GLOBAL GROSS VALUE ADDED 29.023.893,87 38.558.000,00 40.021.000,00

Depreciation and Amortisation 1.535.172,00 3.733.000,00 5.021.000,00

NET GLOBAL VALUE ADDED 27.488.721,87 34.825.000,00 35.000.000,00

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.

Below is the layout of VA production in Inglass Spa, where, for 2013, it has been accompanied with the Italian 2012 and Consolidated 2012 data, the overall figure, derived from the Consolidated Financial Statements.

2.1 / Determination of Added ValueThe Value Added (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 Financial Statements (in our case, from the Group's Consolidated Financial Statements for 2012), prepared in accordance with statutory regulations,

In 2013, the Consolidated net global Value Added is, in absolute value, in line with the previous year. However, it is slightly lower when considered as % of the global turnover (41% in 2013 compared to 43.5% in 2012).

34,68%37,12%

41,50%43,55%

41,00%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

45,00%

50,00%

Italy 2010 Italy 2011 Italy 2012 Consolidated 2012

Consolidated 2013


2.2 / Breakdown of added Value

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

• Members/Shareholders with the distribution of dividends;

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

The Value Added 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 the collaborators: • 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


reserves in the company, in order to continue and support growth and future investments. Finally, a small percentage was allocated to donations and sponsorships.In addition, in 2013 we received a grant of € 15,992 from Fondimpresa for training courses run in 2012, as well as € 13,557 from Veneto Lavoro as reimbursement of contributions paid to the Disability Trust.

BREAKDOWN OF VALUE ADDED ITALY 2012

CONSOLIDATED 2012

CONSOLIDATED 2013

External staff: 4.302.628,00 1.684.000,00 1.144.000,00

Employees 13.022.174,00 19.068.000,00 20.982.000,00

> Direct Remuneration 10.178.988,00 15.933.000,00 17.575.000,00

> Indirect Remuneration 2.843.186,00 3.135.000,00 3.407.000,00

STAFF REMUNERATION 17.324.802,00 20.752.000,00 22.126.000,00

Direct taxes 3.300.001,00 3.944.000,00 3.870.000,00

Indirect taxes 45.000,63 59.000,00 60.000,00

REMUNERATION OF PUBLIC ADMINISTRATION 3.345.001,63 4.003.000,00 3.930.000,00

Charges for short-term capital 859.425,62 687.000,00 8.000,00

Charges for long-term capital 415.860,38 2.322.000,00 2.322.000,00

REMUNERATION OF DEBT 1.275.286,00 1.635.000,00 2.330.000,00

Share of net income distributed to members/shareholders 2.007.000,00 2.007.000,00 2.310.000,00

REMUNERATION OF EQUITY 2.007.000,00 2.007.000,00 2.310.000,00

Share of profit allocated to reserves 3.515.550,00 6.407.000,00 4.302.000,00

REMUNERATION OF THE COMPANY 3.515.550,00 6.407.000,00 4.302.000,00

DONATIONS AND SPONSORSHIPS 21.082,24 21.000,00 2.000,00

NET GLOBAL VALUE ADDED 27.488.721,87 34.825.000,00 35.000.000,00

BREAKDOWN OF CONSOLIDATED VALUE ADDED 2012

63%STAFF REMUNERATION

12%RETAINED EARNINGS

11%REMUNERATION OF THE PUBLIC ADMINISTRATION-

6.6%REMUNERATION OF DEBT

6.7%REMUNERATION OF EQUITY

In the last financial year 2013, the Consolidated Value Added % destined for collaborator remuneration has risen to 63.22% of the total (compared to the 60% of the last year). The Public Administration remuneration through fees paid to the State is stable and equal to 11.23%, while Debt Capital this year has cost the company approximately 2 percentage points more, for a total of 6.66%. Again in 2013 a part of the year's profit was distributed to shareholders, as remuneration of risk capital, for an amount equal to 6.60% of the total. The remaining 12.29 % of the value added has been allocated to


2.3 / Investments

manufacturing facility in Italy), of which an amount of approxi-mately 3.8 Mil Euro for revaluation of machinery as required by the Italian Stability Law 2014 (Law No. 147, 27.12.13). The remaining approximately 26% of the total invested was destined for the purchase of software licenses and capitalised costs for internal R&D.

During 2013, investments for the Group doubled in comparison to 2012: nearly 12 Mil Euro equal to 13.94% of consolidated turnover.

Of the total 12 Mil Euro invested, over 74% was invested in tangible goods (machinery and improvements to the

CAPITAL EXPENDITURE ITALY 2012

CONSOLIDATED 2012

CONSOLIDATED 2013

Capital Expenditure: tangible assets 1.635.407,00 3.410.000,00 8.843.000,00

Capital Expenditure: intangible assets 1.797.914,00 1.904.000,00 3.059.000,00

TOTAL 3.433.321,00 5.314.000,00 11.902.000,00

INVESTMENTS TYPE

59,35%61,92%

74,30%

40,65% 38,08%

25,70%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

Italy 2012 Consolidated 2012 Consolidated 2013

Tangible

Intangible


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.

2.4 / Banks and credit InstitutionsThe 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. Major commercial development and penetration projects into new markets (India, North and South America) have also been made possible through the partnerships with Sace (www.sace.it) and Simest (www.simest.it).

2.5 / Insurance

Insurance policies are independently managed by individual countries. In the Italian and Chinese manufacturing plants, contracts and areas of protection are very wide, they are however more slender in the branches. The contracts provide for the coverage required by law, as well as additional coverage to further protect people and the company's assets. Product liability, leasing, employee transfers and life insurance policies are among the risks for which additional coverage exists. In China an additional policy is active compared to the regulatory requirements for medical coverage and employee accidents.


2.6 / 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 has been further reduced and now stands at 86% of the total.

ITALY 2012

CONSOLIDATED 2012

CONSOLIDATED 2013

% of purchases billed by domestic suppliers 93,0% 91,3% 86,2%

% of purchases billed by foreign suppliers 7,0% 8,7% 13,8%

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. 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 2013 worldwide product suppliers numbered at more than 300 while the number of service providers was much higher. Each supplier accounts for no more than 2.5% of the total world supply expenditure, except for the main supplier at 4.7%.

5 MAJOR SUPPLIERS (INGLASS GROUP)

2013

Supplier Products supplied % of total

Supplier A machined components 4,7%

Supplier B machined components 2,5%

Supplier C machined components 2,3%

Supplier D machined components 2,3%

Supplier E moulds 2,1%

Total - 5 major suppliers 13,9%

Total - Other 86,1%

Total - 2013 Purchases 100,0%

Through an analysis of total supply purchases at a consolidated level, there is a progressive reduction in the purchase percentage which is strictly related to the product, in comparison to the supply of services.

ITALY 2012

CONSOLIDATED 2012

CONSOLIDATED 2013

Product Suppliers 78% 74% 66%

Service Providers 22% 26% 34%

The Supply of Products (supply directly related to the final product), mainly refers to machined products, design details, electrical materials, raw materials and this year standardised screws. Mechanical machining continues to account for approximately 50% of the total value of purchased products. The top 20 suppliers account for 80% of total supply. Steel is the main raw material for our product and it is sourced in Europe (Germany, Italy, France and Slovenia) for both the Italian and Chinese Plants. This choice, even though it is at times more expensive in comparison to extra-UE supply, derives from our desire to ensure adequate quality standards of our product, starting from raw materials.


ITALY 2012

CONSOLIDATED 2012

CONSOLIDATED 2013

Mechanical machining and components made to customers' specifications 51,5% 48,6% 45,5%

Electrical material 10,6% 12,2% 14,3%

Raw materials 12,3% 14,0% 15,7%

Outsourced design activities 15,2% 13,6% 8,5%

Standard parts/screws 5,2% 5,9% 9,9%

Tools 2,5% 3,3% 4,0%

Heat treatments 2,4% 2,1% 2,0%

TYPE OF PRODUCTS SUPPLIED 2013

9 %OUTSOURCED DESIGN ACTIVITIES

14%ELECTRICAL MATERIAL

10%STANDARD PARTS/SCREWS

4%TOOLS

2%HEAT TREATMENTS

16%RAW MATERIALS

45%MECHANICAL MACHINING AND COMPONENTS MADE TO CUSTOMERS' SPECIFICATIONS

The Provision of Services refers primarily to transport and custom costs, to external consultants and training, purchase of hardware and software and management costs. The impact of operating costs have significantly increased this year, whereas transportation and custom costs remain stable, while there has been a percentage reduction in external consultancies. Spending on computer equipment and company vehicles has also decreased.

ITALY 2012

CONSOLIDATED 2012

CONSOLIDATED 2013

Running costs 15,6% 23,2% 34,8%

Shipping & Customs 18,8% 16,9% 15,9%

External consulting and training services 19,6% 20,1% 14,1%

Hardware and Software 16,9% 14,0% 10,7%

Company vehicles 3,1% 5,9% 3,1%

Packaging - cleaning material 4,0% 3,9% 2,2%

Other 22,0% 16,0% 19,2%

TYPE OF SERVICES PROVIDED 2013

16%

19%

11% 3% 2%14%35%RUNNING COSTS EXTERNAL

CONSULTING AND TRAINING SERVICES

SHIPPING & CUSTOMS

HARDWARE AND SOFTWARE

COMPANY CARS

PACKAGING - CLEANING MATERIAL


In recent years we have endeavoured to pay great attention to analysing and improving the relationships between Inglass and suppliers. Even though much more remains to be done, much has already been achieved. In particular in 2013 we increased and improved supply contracts integrating worldwide support activities and agreeing service continuity even during sanctioned holiday periods.

The careful management of supply has also been possible thanks to the fully integrated management of warehouses worldwide. Inventory is monitored in real time and then shared between plants and subsidiaries. The introduction of automated warehouses in both production sites has also enabled improvements in the calculation of warehouse inventory and space management. Both production sites manage the availability of all types / families of parts mainly due to the short crossing time of production or supply. Inventory management is based on a crossed ABC analysis.

In practice, the branches only manage only spare parts from class A, suppliers, class B and C goods are directly supplied by the individual plants.

In the hot runner division, 45% of components are standard components while 55% are custom made to specifications and according to the just in time method. In the Moulds division only 10% is made up of standard parts while the remaining 90% of product is produced according to customised design for individual customer design drawings.


Chapter 03. Social Sustainability


length between 2 and 10 years progressively increases.

>2

2/10

10<

Indirect staff (not directly engaged in productive activities and whose working hours are not specific to a production order) has decreased by approximately 10% falling to 69%.

The percentage of Graduates on the total number of employees is stable and equal to 39% at a global level. Again

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 BREAKDOWNAs at 31.12.2013, The Inglass group employed 604 people worldwide, of which 495 men and 109 women. An increase of 12.3% in comparison to 2012. The average worldwide age of staff is 36 years and for management it is 42 years.

The average length of service is little more than 3 years on a worldwide level, this can be easily explained by the recent establishment of the Chinese factory and the most recent sales branches. The number of employees with service

AVERAGE AGE

italy 2012 35

consolidated 2012 37


AVERAGE LENGTH OF SERVICE

italy 2012 6

consolidated 2012 3,25


AVERAGE LENGTH OF SERVICEOF THE MANAGEMENT

italy 2012 4



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

italy 2012 33%

consolidated 2012 48%


OF WHICH LENGTH OF SERVICE FROM 2 TO 10 YEARS

italy 2012 50%



OF WHICH LENGTH OF SERVICE OVER 10 YEARS

italy 2012 17%



MANUAL WORKERS

italy 2012 35%



EMPLOYEES AND MANAGERS

italy 2012 65%




∆

3.1.3/ORGANISATION AND GROUP STRUCTURE The organisation of work in the two production plants, in Italy and China, are very similar and reflect the organisational charts shown on page 19/20. Conversely, 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 the Chinese plant, 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,

German excellence prevails where 100% of the employees hold a degree.

3.1.2/TURNOVERStaff turnover (sum of recruits and those no longer with the company, divided by the average number of employees) varies drastically in various countries. In Italy this figure remains constant at 22% while in China even if decreasing in comparison to 2012 due to the actual characteristics of their local labour market, turnover remains very high, at 74%. The average consolidated data is therefore 39%.

Overall new recruits exceeded resignations by 55 people during 2013.

TOTAL TERMINATIONS

italy 2012 12



Δ

italy 2012 33



TOTAL NEW HIRES

italy 2012 45



STAFF TURNOVER

italy 2012 21%



GRADUATES

italy 2012 25%




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 2013 Germany and Brazil also hosted some students in a training program. Of the total of 32 people hosted during the year, only 2 were subsequently recruited.

3.1.5/EMPLOYMENT 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

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.

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.

Even in 2013 the applications sent via our web site were many, approximately 400. It is now in fact possible to view positions available at the Italian office on the company web site and send an application. This tool was introduced in 2012 and has proved to be very effective. Use however will soon be extended to the foreign branches.

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 2013 contract based recruitment increased in comparison to permanent employment as the company continues to invest in young people through the recruitment of new university graduates and high school graduates. Such graduates, not having previous experience were recruited on contracts for a gradual introduction into the workforce and the company, with however excellent prospects for the future and the opportunity of becoming a member of Inglass' staff on contract expiry.

PERMANENT CONTRACTS

italy 2012 88%



FIXED-TERM CONTRACTS

italy 2012 12%



INTERNS AND TRAINEES FROM SCHOOLS AND UNIVERSITIES

italy 2012 24



OF WHICH HIRED AT THE END OF THE PROGRAM

italy 2012 5

consolidated 2012 5

consolidated 2013 2


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.

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.

The number of people registered with trade unions at a consolidated level is stable in percentage and has increased in absolute values. This is also data which needs to 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 Inglass's case the number or unionised employees exclusively refers to the two production sites. In Italy the number of unionised employees has decreased both in absolute and percentage values over the total number of employees. In China on the other hand, the parallel increase in recruitment and the percentage on total employees has slightly decreased while the absolute value has increased given that unionised employees are widespread and a well-established practice for all workers that have passed the trial period.

%

for the granting of annual bonuses (MBO - Management by Objectives) in proportion to the achievement of pre-established results. As at 31.12.2013 the number of people involved in this sharing process were 258 worldwide with peak participation at the Chinese plant, where the consolidated practice is to tie a part of the remuneration attained from the objectives to the end of year evaluation.

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.

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-

NO. OF PEOPLE WITH VARIABLE REMUNERATION

italy 2012 21



% OF UNIONISED EMPLOYEES OUT OF TOTAL EMPLOYEES

italy 2012 7,41%

consolidated 2012 33,27%


NO. OF UNIONISED EMPLOYEES

italy 2012 20




discrimination in companies, this is not the case in INglass. In both factories and in two branches, there are employees of foreign nationality, with the highest number of represented nationalities, equal to 11, in Italy. In total within the group there are 31 employees of different foreign nationality present in the company in which they were recruited equal to approximately 5.1% of the total.

%

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 7 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.

3.1.7/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 109 employee*, representing 18% of the total.

* Data updated in error during revision of the previous document

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.

Employee nationality, is sometimes also a reason for

NO. OF EMPLOYEES OF FOREIGN NATIONALITY (with respect to the place of work)

italy 2012 18



AS % OF TOTAL EMPLOYEES

italy 2012 6,67%



NO. OF FOREIGN NATIONALITIES IN THE SINGLE LOCATION

italy 2012 5

consolidated 2012 da 1 a 5

consolidated 2013 da 1 a 11

EMPLOYEES BELONGING TO PROTECTED CLASSES

italy 2012 6consolidated 2012 7consolidated 2013 7

NO OF PART-TIME CONTRACTS

italy 2012 7

consolidated 2012 9

consolidated 2013 9

OF WHICH WOMEN

italy 2012 6

consolidated 2012 7

consolidated 2013 7

WOMEN

italy 2012 36

consolidated 2012* 101


MEN

italy 2012 231

consolidated 2012* 437



TOTAL HOURS OF TRAINING CONSOLIDATED 2013

- % hours of apprentices' and new employees' training 36,64%

- % hours of language training 27,27%

- % hours of technical product training 10,97%

- % hours of training hours on dedicated software 7,89%

- % hours of management development training 7,31%

- % hours of training on safety 3,57%

- % hours of training in the administration and finance area 3,20%

- % hours of training on quality 1,58%

- % hours of human resources training 1,58%

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 company. During 2013 this important technical and strategic alignment activity of the global network has committed internal resources to 33 training courses, for a total of 362 days.

3.1.9/SAFETY & ACCIDENTS The company continues its pursuit towards the achievement 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, special 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.

We proudly believe that the positive trend also achieved in 2013 with reference to workplace accidents, reflects the great effort and commitment carried out in safety training, which will be further increased in 2014 through the continuous awareness on the issue and improvement of working conditions in every department. Even the average duration of accident days continues to highlight a positive decreasing trend of almost 50%.

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.

People who have been involved in at least one training program during the year totalled 292 globally at Inglass, almost 50% of the total population again this year. The weighting of training topics on a consolidated level has however changed in comparison to the previous year. In 2013 training focussed on the induction training of newly recruited employees, language training (which stably rep-resents 25/30% of the total) and technical product training. Dedicated software training hours and those for managerial development have, however, been reduced.

TRAINING COST

italy 2012 €51.853,60

consolidated 2012 €109.211,60

consolidated 2013 € 123.439,40

PER-CAPITA COST

italy 2012 €192,05

consolidated 2012 €203,00

consolidated 2013 €204,37

TOTAL TRAINING HOURS

italy 2012 7.047,0

consolidated 2012 10.125,0


PEOPLE INVOLVED IN TRAINING

italy 2012 67




2013 are still mainly related to non-compliance with safety regulations.

TOTAL DISCIPLINARY MEASURES, OF WHICH

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.

Particular attention was paid to the provision for the safety of new equipment installed in 2013 and in relayout activities.

* 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.

3.1.10/DISCIPLINARY MEASURES AND DISPUTESGiven the company’s increasing complexity and number of employees, disciplinary measures are sometimes applied, even if they are not the preferred method for managing employee issues. If we compare the number of measures taken to the total number of employees, the average is nearly 2.8%. Almost 2 percentage points less than last year, confirming the company's constant commitment to promote and apply, where applicable, dialogue and constructive discussion when resolving problems. The main reasons for taking disciplinary actions during

HOURS OF PENALITY

italy 2012 2


consolidated 2013 9

italy 2012 16



WRITTEN WARNINGS

italy 2012 8

consolidated 2012 9

consolidated 2013 3

SUSPENSIONS

italy 2012 0

consolidated 2012 0

consolidated 2013 1

FIRST NOTICE ONLY

italy 2012 6

consolidated 2012 6

consolidated 2013 4

COSTS INCURRED FOR SAFETY

italia 2012 € 27.605,00

consolidato 2012 € 27.605,00

consolidato 2013 € 27.724,1

HOURS OF SAFETY TRAINING

italy 2012 259



TOTAL NO. OF ACCIDENTS *

italy 2012 4

consolidated 2012 4

consolidated 2013 5

AVERAGE LOST TIME PER INJURY (DAYS)

italy 2012 10




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 have also embarked on a path with the Department of Social Services for the Veneto Region called ’family and work Audit’. 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. Certification is the establishment of the three-year plan, which will begin in 2014.

In addition to this, during 2013, agreements were 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. Lastly, the internal can-teen 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).

3.1.11/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.

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 2013 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


remains Europe, with evidence of strong growth in both the Americas (+2.3%) and the Asian market (+1.7%).

AREAS OF MARKET 2013

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.

The company serves a total of over 1630 customers, including producers of moulds, mould makers and OEMs around the world, belonging to the automotive, packaging, cosmetic, medical, caps and closures, home and electronics market. 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 the hot runners and experience gained over many years of mould production.

11541324

15081633

0

200

400

600

800

1000

1200

1400

1600

1800

2010 2011 2012 2013

3.2.1/CUSTOMERS CHARACTERISTICS AND BREAKDOWN

%

Turnover also continues to grow in 2013, with an increase of 6.76% at the consolidated level.

The main sales market at the consolidated level

TURNOVER

italy 2012 €66.236.085,00

consolidated 2012 €79.967.000,00

consolidated 2013 € 85.370.000,00

% GROWTH OVER PREVIOUS YEAR

italy 2012 25,40%

consolidated 2012 -


EUROPE / AFRICA

italy 2012 48,63%



AMERICAS

italy 2012 17,97%



ITALY

italy 2012 24,87%



ASIA / AUSTRALIA

italy 2012 8,53%



3.2 / Customers


MOULD SALES 2013 DIVIDED BY AREA

67%EUROPE & AFRICA

3%ITALY

8%ASIA & AUSTRALIA

22%AMERICAS

3.2.2/SERVICE SUPPORTINglass-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 CRM 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.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

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

INJECTION SYSTEMS

ITALY 2012

CONSOLIDATED 2012

CONSOLIDATED 2013

% of revenue from top 10 customers 21,70% 17,00% 14,3%

% of revenue from loyal custom-ers (amounts purchased in the last 2 years)

70,03% 63,00% 69,1%

% sales from new products 7,00% 6,00% 5,4%

Percentage increase in no. of customers from previous year

7% 6% 6,76%

TURNOVER HRSflow 2013 DIVIDED BY AREA

29%EUROPE & AFRICA

27%ITALY

24%ASIA & AUSTRALIA

20%AMERICAS

MOULDS ITALY 2012

CONSOLIDATED 2012

CONSOLIDATED 2013

% of revenue from top 5 customers

39,12% 39,12% 33,6%

% of revenue from loyal custom-ers (amounts purchased in the last 2 years)

65,40% 65,40% 72%

Percentage increase in no. of customers from previous year

18,75% 18,75% -6,4%


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/CUSTOMER SATISFACTIONSince the beginning of its business activity INglass has developed a strong bond with its customers, many of whom have been working with the company for a long time. Cus-tomers are contacted daily by our sales representatives and HQ, to carry out periodic customer satisfaction analyses. The last Customer Satisfaction Survey was carried out in 2012 and was particularly useful as it provided us with a better understanding and an update on what our customers want when they evaluate a purchase and the quality of a product. In addition ongoing surveys are carried out which are updated in real time based on feedback received from our customers.What customers mainly expect from suppliers when pur-chasing hot runner systems are: product quality and reliabil-ity, technical expertise of process experts both before and after sale, timely availability of spare parts and fast delivery times and prompt solutions to after-sale problems.Customers have also expressed a high level of satisfaction with exactly the same aspects that they consider most important, namely product quality and warranty, technical expertise provided by technicians after the sale, prompt-ness in solving problems and in addition, pre-sales support.As the Customer Satisfaction Survey is carried out Biannu-ally the next is planned for 2014 and will be managed jointly between Italy and China.

3.2.4/RESEARCH AND DEVELOPMENTResearch, 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 are convinced 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 require-ments. This commitment is wholly shared and distributed transversely across the company. Today, the Inglass Group employs approximately 150 people devoted to R&D, to Prod-uct engineering and improvement activities. The technicians perform analysis and tests, developing and designing new products, improving the existing ones, performing mould-flow analysis, verifying and analysing internal test results, and providing technical support to the vendors and service personnel in the world.

FILED PATENT APPLICATIONS

50%SYSTEMS

31%MOULDS

14%CONTROL UNITS

6%MULTITECH

The heart of the Company's Research and Development is located at the HQ in Italy, while a smaller R&D group works in the Chinese plant. The R&D team includes highly skilled engineers, skilled machine operators, assembly and process professionals, who ensure that every product is fully approved before being offered on the market. Re-search 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 mathemati-cal 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.

Approximately 1.9 Mil Euro was also invested in R&D in 2013, representing approximately 2.2% of consolidated sales. Numerous patent applications have been filed to date to protect the investment results achieved by R&D.

As of 31.12.2013 a total of 16 patents were granted in at least one country and are currently in force.

0

2

4

6

8

10

12

14

16

18

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

PATENTS GRANTED IN AT LEAST ONE COUNTRY AT 31.12.2013

Date of filing

Number of patent application in Italy

Title Group product

27/04/2001 TO2001A000399Nozzle for plastic injection moulds

Hot Runners

11/10/2004 TO2004A000700Process for the production of sheets of transparent plastics with

non-transparent areas Glazing Moulds

11/10/2004 TO2004A000701Process for the production of sheets of transparent plastics with overmoulded parts

through injection-compression moulding Glazing Moulds

11/10/2004 TO2004A000702Process for the production of sheets of transparent plastics with non-transparent

over-injected areas Glazing Moulds

11/10/2004 TO2004A000703Process for the production of sheets of transparent plastics with overmoulded parts

through injection-compression moulding Glazing Moulds

15/10/2004 TO2004A000716Process and equipment for the production of moulded plastic products especially by

injection-compression Glazing Moulds

19/11/2004 TO2004A000813Equipment and method for injection-compression moulding of bicomponent plastic

items Glazing Moulds

22/07/2005 TO2005A000505Process and equipment for the production of moulded plastic items with at least one

overmoulded component Glazing Moulds





27/01/2006 TO2006A000057Injection nozzle for plastic injection moulding equipment

Hot Runners

06/10/2006 TO2006A000716Injection nozzle for plastic injection moulding

Hot Runners

30/11/2009 TV2006A000237Method for detecting abnormal operation in a plastic injection moulding equipment

Control units

30/11/2009 TO2009A000939 Injection nozzle for plastic injection moulding Hot Runners





The technical office represents a global network divided into two divisions (moulds and hot runner systems). Technicians present in each branch and both 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 large 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 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-HRSflow, have 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. The company for

this purpose 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, customer specifications and their requirements are known, providing the right solution based on past records and the type of application;

--- in the after-sales activities, it is possible to monitor systems that 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;

--- spare parts kits which are suitable to the customer's hot runner packages are offered 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 allows for the anticipation of 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 PROJECTToday, 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 hunt for the reduction of any form of waste. In this context, the improvement group created in 2011 continues its activities applied to indirect


minimise the complexity of production optimising phases and resources used for any other purpose other than the creation of value for the customer.

3.2.8/MARKETING AND COMMUNICATION The main communication methods used by INglass-HRSflow to reach its customers is participation at events and industry trade fairs, sponsorship of some of these, editorial and advertising presence on major national and international magazines, the company Website and direct communication through customers 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.In August 2013 the HRSflow division website was completed and presented to customers through a newsletter. The website is easier to use and provides visitors with our marketing advertising material in digital form, from flyers to the case study, from 2D/3D to technician catalogues.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 2013 the company was present on a number of national and international magazines for both technical product and solution and institutional publications. During this year the new marketing campaign entitled Help Markus Kill Time was launched. Through the use of videos filmed within our company and publicised on the web the campaign explains the workflow of our projects and services that we provide our customers to give all-round support and assistance.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 where, thanks to the reduced size of these events, interchange is facilitated.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

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 HRS 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 STREAMINGInglass - 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 was a key and strategic aspect of the company. The production site in Hangzhou is a perfect copy of the Italian site. It has been equipped with the same machinery used in the Italian site, new equipment, but the same brand and model. 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 2013 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


performance of our hot runner systems and the quality of the final moulded piece. In 2013 such partnerships have enabled us to advertise our trademark and our product through dedicated Open House, Trade Fairs and Conferences in Italy, China and Belgium. In 2013 communication to our customers has been intensified and automated through Direct Email Marketing - DEM, for more information regarding our participation in trade fairs and events, and updates on our activities and new products.Among the strategic decisions, we again decided to propose the INglass mould division and the HRSFlow hot runners division independently as separate entities, thus making them easily distinguishable and identifiable by our customers. For this purpose, the two divisions were characterised by a well-defined and distinct image on all our communication and promotional material, including trade fairs and events. Below is a list of trade shows in which the company participated and events directly organised by HQ Italy:

> FAIRS--- Interplastica, Moscow, Russia, 29 January to 1

February--- Plastimagen, Mexico City, Mexico 12 to 15 March--- Plastpol, Kielce, Poland 7 to 10 March--- Chinaplas, Shanghai, China, 20 to 24 May--- Feiplastic, San Paolo, Brazil, 20 to 23 May--- Afrimold, Johannesburg, South Africa 4 to 6 June--- Medtec, Modena, Italy, 2 to 3 October --- K2013, Düsseldorf, German, 16 to 23 October

> EVENTS--- PC Glazing Symposium, Shanghai, China, 13 March--- Plastic Closure Innovations, Cologne, Germany, 23

to 25 April--- Seminario Heat & Cool, Rivalta Scivia, Italy, 26 June--- Plastic Caps & Closures, Chicago, USA, 16 to 18

September--- Plastic Caps & Closures, Francia, Nizza, 4-5

November--- Automotive Surfaces Conference, Berlin, Germany,

26 to 27 November--- FAW-VW Technical Seminar, Organised by INglass-

HRSflow, Hangzhou, China

> PRIZES--- Participation in Financial Statements Oscar,

category Non-listed Companies and Large Companies


MARKETING 2013

Website

Fairs

New advertising campaign

Passion for expertise

SNP 56/54 Nová Dubnica, 018 51 Slovakia.

Our Lean Process Organization

system lifecycle. Our customer Marcus

can rest easy! That’s why he chose

WATCH THE MOVIES!

#helpmarcuskilltime


--- PROPLAST of Tortona, Alessandria, today groups together 211 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.

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.

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

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 ASSOCIATIONSIn addition to the associations mentioned in 2012 for Italy and China, during 2013 we also became members of APMA in Canada.

ITALY--- ASSOCOMAPLAST of Assago, Milan, today groups

162 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 International Association, International Special Tooling and Machining Association.

3.3 / Community


--- 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.

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.

3.3.2/SCHOOLS AND UNIVERSITIESFor 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 20123, we welcomed the visit of:

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

--- students attending the 2nd year of middle high school

at Cimadolmo (Italy).

Again in Italy, in November 2014 we participated in an Open Engineering project at the Padua faculty of Engineer-ing, which once again proved to be an excellent meeting between company and applicants.

In addition, we have collaborated with a group of university students from the University of Ca' Foscari (Venice) for the realisation of a video/interview focussing on strategies adopted to face the market and some successful companies in the Veneto area.


Furthermore, in 2013 we also participated in the Financial Statements 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 pro-vide stakeholder with clear and complete information on their work and their strategies, above and beyond the minimum re-quirements of the law.

Patrizia RutiglianoPresidente Ferpi

Andrea SironiPresidente Giuria Oscar di Bilancio

INglass

SOCIETÁ E GRANDI IMPRESE NON QUOTATE

Attestato di Partecipazione

Oscar di Bilancio2013

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.

During 2013 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.


In 2013 we were also able to provide some support to some amateur level sport associations in the territory including soccer, basketball, cycling and mountain biking and a couple of local medical/social initiatives. Each year requests for support submitted to our company by 30 November through the form provided, are evaluated in the early months of the following year and communicated to all the entities 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.

3.3.4/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. However, 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 actions of us all, paying constant attention to and respect for the needs of those who are less fortunate.

3.3.5/PRESS AND MEDIA We also received press coverage during 2013 from a few national and local non industry publications, often after in-depth interview with the company's 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.

Il sole 24h. Wednesday 20 November 2013 N.319, pg. 32Areo. November 13, pg.58-59


Chapter 04. EnvironmentalSustainability


INPUT: RAW MATERIALSMETAL, STEEL, COPPER, BRASSENERGYWATER

PROCESSINGTURNINGMILLINGELECTRO-DISCHARGE MACHININGLASER SINTERINGPOLISHING

OUTPUT: FINISHED PRODUCTMOULDSINJECTION SYSTEMS

WASTEREFUSEWASTE WATERS

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..

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, every time a new corporate process is introduced, our choice, all else being equal, falls on the one with the least 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 below.


Packaging for our products consists of wooden crates, cardboard boxes and various materials used to insulate and protect the product inside the external box. “Polyurethane” foam is used to hold the part firm inside the box to prevent damage during transport. It is obvious that these wooden crates have the greatest percentage impact on the total value of purchases.

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 both our production plants and it is sourced in Europe (Germany, Italy, France and Slovenia). Even though this sometimes results in an increased manufacturing cost, it ensures consistent final product quality standards. Other raw materials used in the production process are copper which in 2013 was used in lower percentages, titanium, brass, aluminium and iron. In addition the consumption of special alloys (included in the items as "other") in order to increase the performance of hot runner systems.

STEEL

italy 2012 92,0%



COPPER

italy 2012 3,0%



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

italy 2012 5,0%



WOODEN CRATES

italy 2012 67,0%



CARDBOARD

italy 2012 5,0%



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

italy 2012 28,0%



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


The reduced energy needs of the technical commercial branches, offices and spare parts warehouse, are met by the local power grid and to a lesser extent by natural gas.

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

4.2 / Energy Requirements The 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.

FUELS

u.m. Lt.

italy 2012 51.236

consolidated 2012 70.569


NATURAL GAS

u.m. m3

italy 2012 81.557



ELECTRICITY

u.m. Kwh

italy 2012 3.626.051

consolidated 2012 5.145.691,00

consolidated 2013 5.099.186,00

STEAM

u.m. GJ

italy 2012 -




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. In the manufacturing plants, it is also used for some processes, fire safety, irrigation and cooling of factory buildings.

WATER CONSUMPTION

u.m. m3

italy 2012 4.515



4.4 / 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.


ITALY 2012

CONSOLIDATED2012

CONSOLIDATED2013

EWC Code

Waste description Recyclable Kg Produced

Kg Delivered

Kg Produced

Kg Delivered

Kg Produced

Kg Delivered

150101 Paper and cardboard packaging YES 15.310 15.810 15.310 15.810 18.580 18.080

150102 Plastic packaging YES 1.440 1.480 1.440 1.480 980 950

070213 Plastic waste YES - - - - - -

120105 Plastic scrap and shavings YES 22.920 23.620 22.920 23.620 20.980 19.180

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

YES - - 300 300 8.275 8.275

120101Ferrous metal shavings and filings (mainly Steel)

YES 257.450 256.650 282.450 281.650 349.470 341.120

120115 Machining sludge - graphite NO 3.399 3.399 3.399 3.399 7.179 7.179

150202 Filter materials NO 932 932 932 932 975 975

130208 Used oil NO - - 300 300 400 400

130105 Oil emulsion NO 11.840 11.840 21.840 21.840 35.430 35.430

150106 Mixed material packaging NO 61.700 60.100 61.700 60.100 86.840 85.480

150110Empty drums with traces of dangerous substances

NO 603 603 1.053 1.053 2.677 2.677

120301 Aqueous washing liquids NO 13.700 14.700 13.700 14.700 33.750 28.750

160213Discarded equipment containing hazardous parts

NO 345 345 345 345 - -

160214 Discarded equipment NO 4.276 4.276 4.276 4.276 - -

200121Florescent lamps and other items containing mercury

NO 14 14 14 14 - -

080317 Used toner cartridges * YES 26 26 26 26 - -

110111Aqueous washing liquids containing dangerous substances

NO 36.400 33.400 36.400 33.400 14.580 17.580

120109Emulsions and solutions for machinery free of halogens

NO 20.560 20.560 20.560 20.560 19.100 19.100

150105 Composite material packaging NO 7.850 7.850 7.850 7.850 - -

170411Cables other than those in category 170410

NO 740 740 740 740 930 930

170405 Iron and steel YES 3.800 3.800 3.800 3.800 16.400 16.400

160605Other batteries and accumulators

NO 93 93 93 93 - -

120199 Waste not otherwise specified NO 532 532 532 532 - -

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

120104 Dust and particulate non-iron material NO - - - - 3.950 3.950

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

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


authorities, have not yet imposed such laws, unlike in Italy and in Germany, and at the same time there is no cultural and social awareness at both private and productive utilities.

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.

Of the total waste produced at consolidated level in 2013 over 66% is recyclable (slightly increased on last year) and only 17% is classified as hazardous waste according to the CER (Certified Emission Reductions) international classifica-tion, 2% less than the previous year's value.

If we examine the branches in Germany, Canada and Spain, Portugal and Brazil, paper is collected according to type and exhausted printer cartridges are delivered to certified companies for proper recycling. Germany remains the most virtuous, where separate collection of waste is already widespread and correctly applied. On the other hand France, Turkey and India do not carry out separate collection of waste. Main reasons lie in the fact that individual local

4.5 / 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.

INglass S.p.A.Via Piave, 4 - 31020 S.Polo di Piave (TV) ITel. +39 0422 750111 Fax. +39 0422 [email protected] [email protected] www.hrsflow.com

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