DRIVE THE FUTURE. Consolidated Financial Statements INglass Group inancial Statements INglass S.p.A. 2016

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1 inancial Statements INglass S.p.A Consolidated Financial Statements INglass Group 2016 Via Piave, S.Polo di Piave (TV) I Tel Fax Financial.Statements.16.REV.00 INglass S.p.A. DRIVE THE FUTURE. Consolidated Financial Statements INglass Group 2016

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3 Indice 1. Consolidated Financial Statements as at 31 December 2016 INglass Group 1.1 Balance Sheet 1.2 Profit and Loss Account 1.3 Statement of Cash Flows 1.4 Explanatory notes 1.5 Annexes Report on operations 2015 INglass Group 2.1 Group s general situation 2.2 Other Information Board of Statutory Auditors Report 2015 INglass Group Report by Independent Auditors INglass Group 47 Company: INglass S.p.A. Registered Office: San Polo di Piave (TV) - Via Piave 4 Shareholders Capital: Euro ,00 i.v. Treviso and Belluno Register of Companies Reg. No.: Treviso Economic and Administrative Register (R.E.A.) Reg. No.: VAT No.:

4 2 Consolidated Financial Statements 2016 President of the Board of Directors, CEO, Board Member Mr Bazzo Maurizio CEO, Board Member Mr Boscariol Tiziano Board Member Mrs Berto Daniela Board of Directors Board Member Mr Berz Stephan Board Member Mr Carloni Osvaldo Board Member Mr Morandini Ruggero Board Member Mr Ribes Pelegri Javier Authorised Representative, Board Member Mr Vidotto Ruben President of the Board of Statutory Auditors Mrs Biscaro Antonietta Board of Statutory Auditors Active Auditor Mrs Petrin Francesca Mr Parolin Manfred Substitute Auditor Mrs Serafin Michela Mrs Filippin Laura Independent Auditors EY S.p.A. Viale Appiani 20/b Treviso

5 Balance sheet - INglass Group CH 013 Chapter 01. Consolidated Financial Statements as at INglass Group

6 4 Consolidated Financial Statements / Balance Sheet (in thousands of Euro) ASSETS A) RECEIVABLES FROM SHAREHOLDERS FOR CAPITAL CONTRIBUTIONS 0 0 B) FIXED ASSETS I) INTANGIBLE ASSETS ) Establishment and expansion costs ) Research, development and advertising costs ) Industrial patents and intellectual property rights ) Concessions, licenses, trademarks and similar rights bis) Difference from consolidation ) Fixed assets at present and advances ) Other intangible assets II) TANGIBLE ASSETS ) Land and buildings ) Plant and machinery ) Industrial and commercial equipment ) Other assets ) Tangible assets under way and advance payments III) FINANCIAL ASSETS ) Equity investments in: d-bis) Other companies ) Receivables d-bis) from other parties - within 12 months beyond 12 months ) Other securities - beyond 12 months ) Active derivative financial instruments 3 0 C) CURRENT ASSETS I) INVENTORY ) Raw, ancillary and consumable materials ) Work in progress and semi-finished products ) Finished products and goods ) Advances II) RECEIVABLES

7 Balance sheet - INglass Group CH ) From customers due within 12 months From customers due beyond 12 months ) From associated and affiliated companies due within 12 months bis) Tax receivables due within one year ter) Prepaid taxes within 12 months Prepaid taxes beyond 12 months quater) From others due within 12 months From others due beyond 12 months III) FINANCIAL ASSETS THAT ARE NOT FIXED ASSETS ) Other securities IV) CASH AND CASH EQUIVALENTS (AVAILABILITIES) ) Bank and post office deposits ) Cheques ) Cash and valuables on hand 14 6 D) PREPAYMENTS AND ACCRUED INCOME Miscellaneous TOTAL ASSETS A) TOTAL CONSOLIDATED SHAREHOLDERS EQUITY TOTAL GROUP SHAREHOLDERS EQUITY I) SHARE CAPITAL III) REVALUATION RESERVE IV) LEGAL RESERVE VI) OTHER RESERVES Other reserves Consolidation reserve Exchange rate reserve VII) HEDGING OPERATIONS RESERVE (86) (76) VIII) PROFIT (LOSS) CARRIED FORWARD IX) PROFIT (LOSS) FOR THE PERIOD FOR THE GROUP XI) THIRD PARTIES SHARE CAPITAL AND RESERVES Third parties share capital and reserves Third parties profit and loss (622) (131)

8 6 Consolidated Financial Statements B) PROVISIONS FOR RISKS AND CHARGES ) Provisions for retirement pensions and similar obligations ) Provisions for taxes, including deferred taxes ) Passive derivative financial instruments ) Other provisions C) EMPLOYEE SEVERANCE INDEMNITY PROVISIONS D) PAYABLES )Bonds due beyond 12 months ) Due to banks within 12 months Due to banks beyond 12 months ) Due to other lenders within 12 months Due to other lenders beyond 12 months ) Advance payments within 12 months ) Trade payables due within 12 months Trade payables due beyond 12 months ) Payables to subsidiaries due within 12 months ) Taxes payable due within 12 months ) Payables to social security inst. due within 12 months ) Other payables due within 12 months Other payables due 12 months E) ACCRUED LIABILITIES AND DEFERRED Miscellaneous

9 Profit and loss account - INglass Group CH / Income Statement (in thousands of Euro) A) VALUE OF PRODUCTION ) Revenue from sales and services ) Changes in inventories for WIP, semi-finished and finished products (554) 4) Increase in fixed assets for internal work ) Other revenue and income - Other revenue and income B) PRODUCTION COSTS ) Raw, ancillary, consumables and goods ) Services ) Use of third party assets ) Personnel a) Wages and salaries b) Social security contributions c) Employee severance indemnity e) Other costs ) Amortization and depreciation a) amortization intangible assets b) amortization tangible assets c) other fixed asset depreciations 67 0 d) write-down of receivables included in current assets ) Changes in inventories of raw and consumable materials and goods (1.206) (2.882) 12) Provisions for risks ) Other accruals ) Misc. operating expenses DIFF. BETWEEN VALUE OF PRODUCTION AND PRODUCTION COSTS C) FINANCIAL INCOME AND EXPENSES (3.659) (2.852) 16) Other financial income d) from others - other ) Interest and other financial expenses - others (3.409) (3.281) 17-bis) Profit and loss on exchange rates - Profit (loss) on exchange rates (405) 160

10 8 Consolidated Financial Statements D) VALUE ADJUSTMENTS TO FINANCIAL ASSETS (95) (25) 19) Write-downs a) equity investments (95) (25) PROFIT (LOSS) BEFORE TAXES ) Income tax for the period Current taxes Prepaid taxes (1.393) (486) Deferred taxes PROFIT (LOSS) FOR THE PERIOD ) Profit (loss) to third parties (622) (131) PROFIT (LOSS) FOR THE GROUP

11 Statement of cash flows- INglass Group CH / Statement of cash flows (indirect method art. 32 of the Italian Legislative Decree no. 127/1991) (in thousands of Euro) A) STATEMENT OF CASH FLOWS INDIRECT METHOD Profit (loss) for the year Income taxes Interests paid /(received) on income (Dividends) 0 0 (Surplus) / Capital loss from asset transfer (67) (352) 1) Adjustments for non-monetary elements without any counterpart in the Net Working Capital Provisions for funds Amortization of fixed assets Write down for lasting losses of value Value adjustments for financial profit and losses of derivatives that do not entail any monetary operations 0 0 Other increase / (decrease) adjustments for non-monetary elements Total adjustments for non-monetary elements without any counterpart in the Net Working Capital ) Adjustments for non-monetary elements without any counterpart in the Net Working Capital Decrease/(Increase) in stocks (2.744) (3.006) Decrease/(Increase) in receivables from customers 376 (14.323) Decrease/(Increase) in payables to suppliers Decrease/(Increase) in prepayments and accrued income (435) 502 Decrease/(Increase) in accrued liabilities and deferred income Other changes to the net working capital Total changes to the net working capital (6.901) 3) Cash flow after changes to the NWC Interests received (paid) (3.254) (3.012) (Taxes on income paid) (4.523) (2.153) Dividends received 0 0 (Use of provisions) (1.456) (838) Other revenues / (payments) 0 0 Total other changes (9.233) (6.003)

12 Consolidated Financial Statements OPERATING CASH FLOW (A) B) CASH FLOW DERIVING FROM INVESTMENTS Fixed assets (Investments) (7.892) (7.731) Disinvestments 0 0 Intangible assets (Investments) (12.634) (6.956) Disinvestments Financial assets (Investments) 0 (1.209) Disinvestments Short-term financial assets (Investments) 0 0 Disinvestments 0 0 (Acquisition of company branches net of cash) 0 0 Alienation of company branches net of cash 0 0 INVESTMENT CASH FLOW (B) (19.743) (14.187) C) FINANCING CASH FLOW Third party resources Increase (decrease) short term payables to banks (3.468) 587 New credit lines (Credit repayment) (27.131) (21.948) Own resources Increase of paying capital (Credit repayment) 0 0 Transfer (acquisition) of own shares 0 0 (Dividends and advances on dividends paid) (2.599) (2.585) FINANCING CASH FLOW (C) (1.714) INCREASE IN CASH AVAILABILITY (A +/- B +/- C) (651) 4.527

13 Statement of cash flows- INglass Group CH Impact of Exchange rates on cash 0 0 Bank and post deposits Cheques 0 0 Cash and cash equivalents 5 14 Total cash and cash equivalents at beginning of the financial year Of which not free for use 0 0 Bank and post deposits Cheques Cash and cash equivalents 14 6 Total cash and cash equivalents at end of the financial year Of which not free for use 0 0

14 Consolidated Financial Statements / Explanatory notes FOREWORD On 1 January 2016, the provisions of the Italian Legislative Decree 139/2015 entered into force, thus completing the procedure of transposition of Directive 34/2013/EU (new accounting directive). This decree has updated the Italian Civil Code with reference to the Financial Statements as well as the Legislative Decree 127/1991 about the Consolidated Financial Statements. The drawing and evaluation criteria as well as the compulsory models used to draw the draft the Financial Statements for the year ended on 31 December 2016 are those transposed by the Italian Legislative Decree 139/2015 and envisaged by the Italian Civil Code, while also taking into account the accounting principles laid down by the National Council of Tax Advisors and Expert Accountants as emended by the Italian Accounting Body (Organismo Italiano di Contabilità ( OIC ). The effects deriving from the adoption of the new National accounting principles did not imply any significant change for the Company in terms of evaluation criteria. As for the structure of the Financial Statements and the compulsory information to be provided in the Explanatory Notes, some reclassification work was necessary as well as some specific additions envisaged by the new rules. The detailed analyses of the effects of the application of the Leg. Decree 139/2015 and of the new OIC accounting principles to the national accounting principles applied before is clearly shown in the detailed comments contained in this Explanatory Notes. It is specifically underlined that the effects deriving from the eliminations of the extraordinary charges and income were applied retroactively with the purpose of reclassification (of last year data) with a total amount of within the item taxes for the previous years. The first application of the new accounting principles had a negative impact on the data as of 1 January 2016 for the Items under Net Assets; it was caused by the application of the negative reserve for hedging operations as of 31 December 2015 of the expected financial flows amounting to Euro 86.-, against the negative fair value after taxes of the derivative financial instruments used to hedge the fluctuations of the interest rates applied to the existing financing agreements LAYOUT AND CONTENTS OF THESE FINANCIAL STATEMENTS These consolidated Financial Statements for the INglass Group concern the year ended on 31 December The consolidated Financial Statements have been drawn up pursuant to the provisions of the Legislative Decree no. 127 of 9 April Such rules and regulations have been construed according to and integrated with the applicable accounting principles defined by Italy s National Board of Chartered Accountants (Consigli Nazionali dei Dottori Commercialisti e dei Ragionieri) and the Italian Accounting Body (Organismo Italiano di Contabilità (O.I.C.)). The consolidated Financial Statements have been drawn by the Company that has majority shares in the Group and in its capacity as parent company in compliance with articles 25 and ffl. of the Italian Legislative Decree 127/1991. The Financial Statements comprise the Consolidated Balance Sheet, the Consolidated Income Statement, the Consolidated Statement of Cash Flows and these Explanatory Notes, in addition to the Report on Operations providing an overview of the performance of INglass Group. The consolidated Financial Statements give an overview of the financial, equity and economic situation of the Group; in addition to an overview of any changes that occurred during the period in the consolidated shareholders equity and the consolidated cash flow statement. The values given in the explanatory notes and in the financial statements are in thousands of Euro FIELD OF ACTIVITIES INglass Group consists of companies operating in fields aiming at providing engineering services for the manufacturing of plastic items, the constructions of hot runners and equipment for the die casting of lenses for front and rear lights for multicolour details in the auto motive sector. Since 2014, after the acquisition of the French subsidiary Ermo it also operates in the field of design and manufacturing of multi-cavity injection moulds for the plastic industry producing items for cosmetics, pharmaceutical products and packaging SCOPE OF CONSOLIDATION The financial statements of the Italian and foreign companies pertaining to the consolidation area are taken with either the line-by-line or the proportional integration method according to their participation in the share capital, as detailed in Annex 1. The consolidation area has expanded during this financial year due to the setting up of a new Thai company, while it has decreased due to the transfer of the equity investment

15 Explanatory notes - INglass Group CH 0113 in the Polish company by the French subsidiary Ermo it is underlined that both changes do not affect the comparability of these consolidated Financial Statements with those of the previous year. The 2016 financial year has also seen the reverse merger between the two French companies Aurca (parent company) and Ermo (subsidiary). The reference date of the consolidated Financial Statements 31 December 2016, coincides with the date of closure of the Financial Statements of the parent company INglass S.p.A. and it includes the results of the companies already in the consolidation area on 31 December 2015, in addition to the Thai company that was set up during this financial year CONSOLIDATION CRITERIA These Consolidated Financial Statements are in compliance with article 25 and following of the Italian Legislative Decree no. 127/1991. The consolidation criteria applied to these consolidated financial statements are as follows: the value of shares in undertakings included in the consolidation was replaced by the assets and liabilities resulting from the corresponding financial statements and the corresponding portions of associated Shareholders equity in the same companies were written off starting from the date of acquisition; any accounting difference between the cost of acquisition and the shareholders equity of the subsidiaries, if positive, is ascribed where possible to the assets of the subsidiary. Any balance, if positive, is ascribed under an item of the assets called Consolidation adjustments. Should the balance be negative, then it is entered under an item of the liabilities called Consolidation fund for future risks and charges if ascribable to a forecast of possibly negative results, otherwise it is registered under the item Consolidation reserve ; accounts payable and receivable involving companies included in the consolidation, costs and revenue deriving from group transactions are eliminated, as are significant profit and loss entries resulting from intragroup transactions and included in the balance sheet and in the income statement; leasing transactions are represented according to the so called financial method; reversal of dividends paid and assessed (according to the accrual principle) by consolidated companies; elimination of effects resulting from extraordinary intragroup transactions (mergers, transfer, sale of business, etc..). the net Shareholders Equity owned by the minority shareholders were entered in a special separate item. In case the companies belonging to the consolidation area are governed by different laws, the most suitable financial statement formats to guarantee clarity, truthfulness and correctness are adopted THE CONVERSION INTO EURO OF FINANCIAL STATEMENTS IN FOREIGN CURRENCIES The conversion into Euro of foreign companies financial statements in foreign currencies was made by recording the results for the period using the exchange rate at year end, the Shareholders Equity items were translated at the historical rate and profit and loss items were recorded using the average exchange rate for the year. The exchange rate differences deriving from the application of this conversion method were entered in the consolidated income statement as Conversion Reserve The following exchange rates were used:

16 Consolidated Financial Statements CURRENCY EXCHANGE AT YEAR-END (*) FY 2015 FY 2016 AVERAGE EXCHANGE (*) EXCHANGE AT YEAR-END (*) AVERAGE EXCHANGE (*) Canadian Dollars 1,5116 1, ,4188 1,46588 Hong Kong Dollar 8,4376 8, ,1751 8, USA Dollar 1,0887 1, ,0541 1,1069 Brazilian Real 4,3117 3, ,4305 3,85614 Renminbi (Yuan) 7,0608 6, , ,35222 Turkish Lira 3,1765 3, ,7072 3,34325 Yen 131,07 134, ,40 120,197 Indian Rupee 72, , , ,3717 South African Rand 16, , ,457 16,2645 Thai Bath ,726 39,0428 (*) Source: Bank of Italy ASSESSMENT CRITERIA The evaluation criteria used for this report are the same as those employed for the Annual Report of the company in charge of preparing the Consolidated Financial Statements. Moreover, when drawing these Financial Statements no derogation was made to the drawing principles envisaged in art bis of the Italian Civil Code and in particular: the assessment of the items was made considering the continuation of activity; the item recording and presentation was made in the light of the operation or contract substance; the precautionary principle was applied while booking only profit made at the date of closure of the financial year, while considering the relevant risks and losses although they became known after the closure of the financial year; the revenues and charges for this financial year were taken into account irrespective of the date of collection or payment; the heterogeneous elements in the single items were assessed separately; the evaluation criteria are the same for all companies in the consolidation area. The criteria adopted to measure the consolidated balance sheet items comply with Article 2426 of Civil Code. No derogation was applied as envisaged in art. 29, par. 4 of the Italian Legislative Decree 127/91. In particular, the assessment criteria applied to the consolidated financial statements are as follows: 1.Intangible assets Intangible assets are stated at purchase or production cost, including directly associated ancillary expenses, and amortized on a straight-line basis over their estimated useful lives taking into account their residual useful lives in the financial year. Their residual useful life is shown here below: Start-up and expansion costs Development costs Industrial patent and intellectual property rights Know-how rights Trademarks Licence agreements for software applications Consolidation differences Land use right Others (including: improvement of thirdparty assets) 4 years 2 4 years 4 10 years 3 years 10 years 3 10 years (or the duration of the contract with the possibility of utilization if shorter) 10 years 50 years 5 years

17 Explanatory notes - INglass Group CH 0115 Start-up and expansion costs are costs with multiannual utility and are borne occasionally, especially during a phase of strengthening of the production capacity. They can be entered in the assets when their consistency can be demonstrated as well as the cost-benefit ratio between such costs and the benefit (future utility) that the parent company expects from them. Development costs are costs with multiannual utility. With the prior consent of the Board of Statutory Auditors, Research and Development costs incurred in connection with a specific project are handled as capital costs when their future recovery is considered reasonably certain. After initial recognition, these costs are taken into account to determine the operating results; amortization rates are calculated relative to the period in which expected revenues for the project will occur. According to the amortization schedule, costs will be amortized over a period of up to four financial years at the latest. Capitalized costs are directly incurred costs (employees wages and salaries, raw materials and consumables used, and external consultancy). Research and applied research costs are entered in the income statement when they are incurred. Know-how rights refer to clearly identifiable assets able to generate profits in the future. Direct costs for the creation of software applications for in-house use are capitalized when the company is reasonably certain the new software can be completed and used, and only if the programs created have a useful multi-year life within the company; amortization takes place in a period correlated to the expected use of the software, if it is reasonable to determine this, otherwise over three years calculated from that in which costs were incurred. With regard to applications not yet in use, costs have been suspended and included in advance payments for goods to be delivered. Industrial patent and intellectual property rights refer to clearly identifiable assets able to generate profits in the future. The item Concessions, licenses and trademarks refers to the costs for the in-house production or to the purchase cost from third parties and the to the legal protection of the Company s trademarks. The land use right is the cost for the authorisation to use land in China, where the industrial premises were built and it will last 50 years. The consolidation difference mainly refers to the acquisition of the group of French companies in In particular, the positive difference from the write-off amounting to Euro 15,193 thousands deriving from the acquisition of the AURCA Ermo Group on the acquisition date - so-called Purchase Price Allocation was allocated as follows: Goodwill totally amounting to Euro 11,693 thousand, Trademark Euro 2,600 thousand, Technology Euro 2,500 thousand; on these items, except for the Goodwill, a Reserve for Taxes Differed has been created amounting to 1,601 thousand. The Consolidation Difference describes the capacity of the AURCA/ERMO Group after the reverse merger now only Ermo - to produce more revenues in future financial years and can be partly considered equivalent to the intrinsic value of the relationships with the customers acquired through the acquisition itself; considering that the in average the useful life attributed to such relationships last more than 10 years, the Board of Directors have decided to amortise the consolidation difference within a period of ten years. The additional charges until the end of last financial year - incurred for obtaining financing are entered under the other fixed assets and are amortized over the duration of the financing itself. With reference to such charges, the Parent Company did not either perform any re statement nor apply the criterion of the amortized cost as allowed by the existing laws. Intangible assets are written down in the event of any long-lasting loss in value; should the reasons for write-down cease to exist in subsequent financial periods, the original value of the asset is restored. 2.Tangible assets Tangible assets are entered at purchase or construction cost, including any reasonably ascribable additional charges. They are systematically depreciated on a straight-line basis in each period according to economic and technical depreciation rates that take into account the asset s residual useful life; rates are halved in value for assets that became available for use during the period. The following are the depreciation rates applied:

18 Consolidated Financial Statements Buildings 3-5% Light constructions 10% Machinery 10-15,5% General systems 10% Equipment 20-25% Electronic office machines 20% Office furniture & equipment 12% Transport vehicles 10-20% Cars 25% Notwithstanding depreciation already calculated, tangible assets are written down when they suffer a long-lasting loss in value; should the reasons for the write-down cease to exist in the following financial periods, the original value of the asset would be restored. Ordinary maintenance costs are charged to the income statement. Costs for ameliorative maintenance are charged to the assets they refer to and amortised according to the residual useful life of the involved assets. Tangible assets under leasing agreements are stated in accordance with the financial method and entered in the assets side and depreciated based on allowances similar to those applied to similar tangible assets owned by the company. Payables to financing creditors are entered after deducting the fees already paid. The financial expense accrued in the year and amortisation allowances for acquired assets are entered in the income statement. 3.Financial assets Equity investments in associated companies and in other companies Equity investments in associated companies are valued applying the equity method. Equity investments in other companies are valued at acquisition price including any ancillary charges - or expected salvation price, whichever the smaller. Should the reasons for the write-downs cease to exist in the following accounting periods, the original value is restored. The assessment at cost is maintained, although it is higher than the evaluation corresponding to the share in the net shareholders equity of the associated company, only when the prospects of profit (or the surpluses comprised in the shares) allow forecasting the recovery of the greater value entered. Financial receivables The financial receivables were entered at their expected salvage value. Other Securities Securities are entered at purchase cost and kept in the company equity as stable investments. If such securities undergo long-lasting loss of value at the end of the accounting period, they are entered at the lesser value; should the reasons for the write-down cease to exist in the following financial periods, the original value of the asset would be restored. Derivative Financial Instruments The derivative financial instruments, even when being part of other financial instruments, are entered at their fair value. The fair value fluctuations are entered either in the income statement or directly into a positive or negative reserve of net assets, in case the instrument covers the risks of fluctuations of the expected financial flows of another financial instrument or of a planned operation. Such reserve is entered in the income statement according to the time and amount of the cash flows or of the changes to the hedged instrument or when the operation hedged by the instrument takes place. The elements hedged against the risks of fluctuations of the interest rates or the exchange rates are assessed symmetrically with reference to the derivative. The hedging is considered sufficient when there is a direct and proved link between the characteristics of the instrument or the hedged operation and those of the derivative right from the beginning. The fair value is measured with reference to the value resulting from evaluation models and techniques that are generally applied for the instruments for which an active market cannot be easily identified. Such evaluation models and techniques must guarantee a reasonable approximation to the market value. 4.Inventory Inventories are entered at the lesser of either purchase or manufacturing cost and their estimated salvage or replacement value. Each cost includes, in addition to the price shown on the invoice, the ancillary costs net of returned goods, discounts, allowances and bonuses. Raw, ancillary, consumable materials and goods are entered at the lesser of their purchase cost (calculated according to the average cost method) and their expected replacement value estimated on market trends at year s end; at the end of the accounting period depreciation provisions were made

19 Explanatory notes - INglass Group CH 0117 for slow-moving raw materials in order to reduce the value of the item directly. Contract work in progress expected to end always within less than 12 months was valued on the basis of the product costs incurred, obtained as a summation of direct production costs borne in the period and a percentage of other indirect production costs that can be reasonably ascribed thereto. Should this value, which also includes costs incurred to finish the goods, exceed the agreed contractual value, the latter is considered. 5.Receivables The receivables originating from revenues from sales of goods or services provided are recognised in the operating assets according to the principle of actual accrual, when the conditions for the recognition of the actual revenues are fulfilled. The receivables originating differently are entered if there is the right to them and therefore when they are an actual obligation for third parties towards the company. If they are of financial nature, they are entered in the financial fixed assets and the amount due within the following financial year is clearly stated. Receivables are entered according to the principle of amortized cost while considering the time factor and their expected salvage value - net of any prudential write-downs and considering any single event that has occurred or is expected to occur, based on certain and exact evidence, that may lead to a loss. The Company assumes that the effects deriving from the application of the amortized cost principle and of the reclassification when the receivables are due within 12 months will be negligible, also considering the contractual and substantial conditions when the receivable is recognised. The transaction costs and any difference between the original value and the nominal value at the expiry date are very limited. In case of repeated similar circumstances, the reclassification was done, the interests were calculated at their nominal rate and the transaction costs were entered in the deferrals and amortized in equal amounts during the entire duration of the credit with the adjustment of the nominal received interests. The Parent Company has transferred receivables that were entered in the financial statements as follows: receivables transferred without recourse, for which the transferee has received all risks and benefits deriving from the receivables, are removed from the financial statements and the benefit or loss is recognized as the difference between the value received and the value with which they had been entered in the financial statements; receivables transferred for which risks and benefits deriving from them remain with the transferor, are not removed from the balance sheet and the operation is considered as a financial advance. 6.Cash and cash equivalents Cash and cash equivalents consist of bank deposit and cash balances and are entered at the nominal value of the sums available for the company at the end of the accounting period. 7.Accruals and deferrals These items include expenses or revenue common to two or more accounting periods and are entered based on actual accrual during the period: expense or revenue items were matched to the periods in which they were incurred. 8.Provisions for risks and charges In application of prudence and accrual basis accounting principles, provisions for risks and charges include the provisions made to hedge losses or debts of a specific nature which are known to exist or are likely to arise, but in connection to which the amount or date of occurrence are still unknown at the end of the financial year. Provisions for risks and charges are made on the basis of the best possible estimate when these financial statements were drawn up, using all information available. Risks giving rise to potential liabilities of no reasonably assessable amount were listed in a Supplementary Note, but no specific provision was made for them. As for their classification, the provisions for risks and charges are first of all entered in the items of the income statement referring to their relevant classes (B, C or D) depending on their nature. When it is not possible to immediately classify some provisions under one of the classes above, the provisions for risks and charges are entered under items B12 and B13 of the income statement. 9.Employee severance indemnity Provisions for employee severance indemnity include all payables owed by the Parent Company as severance indemnity to its employees. The value of the item is

20 Consolidated Financial Statements determined in accordance with labour legislation and labour contracts in force and is subject to re-assessment on the basis of indices established by current legislation. As of 1 January 2007, following Italian Legislative Decree 252/2005 and its implementation decrees, the rules governing employee severance indemnity provisions have changed considerably. In particular, employees may now choose whether to have severance indemnity payments made into an independent pension scheme of their choice or whether to let the company run a scheme for them (in this case the company makes severance indemnity payments into a treasury account held by Italy s Social Security Institute INPS). ESI payables are entered at nominal value. 10.Payables Payables originating from purchase of goods are entered in the Balance Sheet when significant risks, charges and benefits linked to the ownership have already been substantially transferred. Payables originating from services are entered when the services have been performed. Financial payables originating from financing operations and payables originating from operations different from the purchase of goods or services are entered when the Company has an obligation towards third parties enshrined in the laws or in a contract. Advances include down payments from customers for the supply of goods or services still to come. Payable are assessed at their amortized cost also considering the time factor. The Company does not consider as relevant the effects of the application of the amortized cost and of the discount rate when payables are due within 12 months, also considering the legal obligation existing when recognising the payable; the transaction costs and any difference between the initial value and the nominal value at the expiry are taken into account when negligible. With reference to financial payables, the Group has chosen to apply the amortized cost method, as allowed by the reference accounting principles, only to payables that have originated after the financial year started on 1 January 2016; actually this principle was never applied because the effects of the value measured with the principle of the amortized cost were irrelevant with reference to the nominal value of the payable. 11.Acknowledgement of revenue Revenue is shown net of returned goods, discounts, allowances and bonuses as well as net of taxes directly related to the sale of goods and the provision of services. Typical revenue derives from the manufacturing of goods according to a specific contract to be performed within less than one year. Revenue from sales is stated at the time title is transferred, typically after completion and formal acceptance by the customer or delivery of the finished goods. Revenue from provision of services is acknowledged as of the date when services are delivered, or as of the date when payment for the services is collected. Financial revenues and those from regular lease fees are acknowledged on an accrual basis. 12.Book entry of costs and expenses Costs and expenses are recorded on an accrual basis. The costs for raw and ancillary materials, consumables and goods do not include the ancillary purchase costs such as transport, insurance, loading and unloading, etc. except when they are included in the purchase price by the supplier. Otherwise, they are entered separately in the costs for services according to the type of service provided. Costs are entered not only when they are supported by documents but also when they are not yet supported by any document but the goods ownership has already been transferred or the service has already been provided. 13.Contributions and tax incentives For contributions, also in the form of tax incentives, proportional to the purchasing and/or in-house construction of tangible or intangible assets, the recognised value will be suspended later and entered under the item Deferred income in order to ensure the correct correlations with depreciation or amortization values related to the assets for which contributions have been granted. 14.Income tax for the financial year Taxes are entered on the basis of an estimate of taxable income pursuant to the applicable legislation in force. They are stated net of advances paid, deductions for taxes withheld and tax credit and are charged either to the item Taxes payable or Tax receivables in the current assets, according to their nature. 15.Deferred and prepaid taxes Deferred or prepaid taxes are calculated on the basis of the

21 Explanatory notes - INglass Group CH 0119 temporary differences between the value of assets and liabilities entered in the statutory financial statements and their corresponding tax value according to the rates likely to be applied in the periods in which the temporary differences that have generated them will fall due in compliance with the OIC principle no. 25. In particular, for the evaluation of this effect current IRES (Corporate Income Tax) and IRAP (Italian Regional Tax on Production Activities) tax rates of 24% (from 2017) and 3.9%, the tax rate applied to India is 30.90%; to Brazil 34%; to China 15%; to France 33.33%; to Germany 30%; to Japan 23.90%; to Turkey 20%, and to USA 34%. For precautionary purposes, no adjustment to the new tax rate envisaged in Italy from the beginning of the financial year 2017 has been done to the provisions for deferred taxes entered in the consolidated Financial Statements and mainly referring to the temporary differences resulting from the reverse merger of the Aurca Ermo Group that is now known only as Ermo. Prepaid taxes, including tax concessions for fiscal losses carried over, are booked provided there was reasonable certainty about their future reimbursement and only if the amount involved was significant. Deferred taxes on reserves and provisions under the tax suspension scheme of the consolidated companies are recognised when it is foreseen that such reserves will be distributed or the use will be taxed. Liabilities for deferred taxes and receivables for prepaid taxes were entered under Provision for taxes and Receivables for prepaid taxes respectively. 16.Conversion criteria for items listed in foreign currencies Any receivables and payables originally stated in a foreign currency have been converted into euro at the exchange rate applicable on the date in which the associated operations were performed and updated to the exchange rate applicable at the end of the period. Any exchange rate differences arising from updates, accrued and not collected in the period, are entered in the income statement account between the financial revenues and the financial costs and any net income is appropriated to the deducted reserve that will not be distributed until collection. Exchange rate differences arising from receivables and payables in foreign currency are also entered in the income statement account between the financial revenues and the financial costs. 17. Out-of-Balance-Sheet Agreements No Out-of-balance-Sheet agreement were signed that must be recorded to assess the equity and financial situations of the group as well as the economic result of the Consolidated Financial Statements. 18.Commitments, guarantees and potential liabilities not deriving from the Balance Sheet The following table provides the relating information: Description (IN THOUSANDS OF EURO) Balance at Balance at Sureties and bank guarantees TOTAL The commitments deriving from sureties and guarantees issued to the benefit of third parties refer exclusively to personal guarantees to the benefit of the subsidiaries and of leasing companies for the production premises that are not owned by the company; they are both guarantees covering contractual commitments. The amount does not comprise the bank guarantees to the benefit of Company s customers to hedge the advances received for a total amount of Euro Information about the derivatives With the view of limiting the fluctuation of financial charges, the Parent Company has subscribed derivatives over the last few years as explained below: IRS derivative contracts directly linked to unsecured loans and/or to leasing operations that foresee that the Company shall receive payments at floating interest rates and pay at fixed interest rates. In compliance with art a of the Italian Civil Code, the table below shows not only the main elements of these contracts but also the Interest Rate Swap fair value as calculated by the issuing body.

22 Consolidated Financial Statements TYPE OF CONTRACT NOTIONAL VALUE ON DIFFERENCE WITH THE MARKET VALUE ON 31/12/2016 STARTING DATE EXPIRY DATE IRS /04/ /04/2017 IRS (16) 28/04/ /06/2020 IRS /02/ /12/2018 IRS 119 (3) 15/05/ /05/2019 IRS 514 (3) 29/10/ /11/2019 IRS (34) 24/03/ /06/2019 IRS (44) 12/06/ /06/2019 TOTAL (100) The changes to the fair value provisions for the net assets and the changes to the provisions during this financial year are shown in the table below: Description Provisions for hedging operations on expected financial flows (86) (76) COMMENTS TO THE MAIN ASSET ITEMS: ASSETS INTANGIBLE ASSETS The amount of intangible assets at year s end was Euro 24,555.- (Euro 24,342.- in the previous year). The table shows the changes to the assets for each single category:

23 Explanatory notes - INglass Group CH 0121 (IN THOUSANDS OF EURO) SET-UP AND EXPANSION COSTS DEVELOPMENT PATENTS CONCESSIONS, LICENCES, TRADE- MARKS CONSOLID. DIFFERENCES INTANGIBLE ASSETS UNDER WAY OTHER TOTAL FIXED ASSETS Cost Amortisation (1.427) (5.231) (1.380) (9.029) (2.400) 0 (1.570) (21.037) Stated value Increases due to acquisition Adjustments (2.600) 0 0 Alienations and transfers Amortisation (1.690) (1.828) (60) (2.484) (1.176) 0 (280) (7.519) Total changes (1.176) (2.600) (157) 176 Cost Amortisation (3.117) (7.059) (1.440) (11.474) (3.576) 0 (1.851) (28.517) Stated value The most significant increases refer to the items Set-up and expansion costs, Development costs and software. The Set-up and expansion costs have increased by Euro 2,455.- because of the costs for the new commercial strategy started by the Group in 2014 aiming at conquering new market shares and acquiring new supply contracts. The increase in the item Development costs equalling Euro 2,820.- is due to the costs borne by the Parent Company and Ermo for the capitalisation of the costs for the development of specific, well-identified projects. The item Concessions, licenses and trademarks has seen a total increase of Euro 4,503.- (of which Euro 2,093.- costs during the financial year and Euro 2,410.- costs carried forward from previous years) concerns the implementation of the new ERP, partly already used at Group level and that will be gradually adopted by all companies.

24 Consolidated Financial Statements TANGIBLE ASSETS The total net value of tangible assets at the end of the year was Euro 40,617.- (Euro 41,796.- in the previous year). The following overview summarises the changes to the main tangible asset items that occurred in 2016: (IN THOUSANDS OF EURO) LAND AND BUILDINGS PLANT AND MACHINERY INDUSTRIAL AND COMMERCIAL EQUIPMENT OTHER FIXED ASSETS ASSETS UNDER CONSTRUCTION TOTAL FIXED ASSETS Cost Amortisation (5.747) (36.112) (908) (4.329) 0 (47.097) Stated value Increases due to acquisition Decreases due to alienations and transfers (1.485) (1.968) (3) (710) (16) (4.183) Adjustments (78) (150) (78) Amortisation (526) (5.378) (168) (643) 0 (6.715) Total changes (1.211) (2.691) (55) (64) 3 (4.020) Cost Amortisation (5.193) (40.299) (1.073) (4.407) 0 (50.972) Stated value The increase in the item Land and Buildings is mainly due to the purchase of building land in Italy, next to the actual production premises. The increase in the item Equipment and Machinery is due to the upgrade of the technical equipment of the Parent Company and to the new production plant in USA. The other Fixed Assets show the increase in the office equipment. The decrease in the Tangible Assets refer to the sale of an industrial building by Ermo and the transfer by Ermo of its equity investment in the Polish company in terms of consolidation area this has caused the decrease of the assets owned by Ermo. With reference to art. 10 of Law no. 72/1983 it should be noticed that the Parent Com-pany has performed the write-up envisaged by Law 147 of 27 December 2013 for the write-up of all assets in the homogeneous category Machinery by adjusting the net accounting value initially amounting to Euro thousand to the market value of Eu-ro 4,304.- thousand. FINANCIAL ASSETS Equity investments in associated companies: This item amounts to Euro 76.- (Euro in the previous year) and refers to minority equity investments. The main change is due to the total write-down performed during this financial year by the Parent Company of the residual value of the shares held in Banca Popolare di Vicenza and in Veneto Banca for a total amount of Euro Long-term receivables from others: they totally amount to Euro 1,836.- (Euro in the previous year); this item mainly consists of Parent Company s receivables from an insurance company for directors severance indemnities for thousand; a time deposit to cover financing operations expiring in 2019 for Euro 300.-; of the receivables of the French subsidiary deriving from the transfer of an equity investment for Euro and the residual receivable linked to the non-interest-bearing loan amounting to Euro granted to the former associated company Key Automation S.r.l. that paid back Euro during this financial year. The total long-term receivables amount to Euro 1,619.-.

25 Explanatory notes - INglass Group CH 0123 Other securities amount to Euro 53.- (Euro in the previous year) and comprise bonds (fixed income zero coupon bonds) to guarantee bank loans to the Parent Company. The decrease in comparison with the previous year is linked to the repayment of some equities. WORKING CAPITAL 1.Inventory This item includes inventories of raw and ancillary materials, consumer goods, in addition to work in progress and semifinished product, finished products and goods for Euro 18,070.- (Euro 15,064.- in the previous year). They can be broken down as follows: (IN THOUSANDS OF EURO) Raw and ancillary materials, consumables Work in progress and semi-finished products Finished products Advance payments TOTAL The changes to the inventory for this financial year are mainly due to the item Raw and ancillary materials, consumables that increased to meet the evolution of revenue from sales and of the Advance payments that increased by more than Euro 1,000.- due to the advance payments made to the suppliers of the Asian subsidiaries. In order to consider the obsolete items and items evolving slowly during the previous financial year depreciation provisions were set up for the raw and consumable materials amounting to Euro (unchanged on 31/12/2016) and used to reduce the value of the inventory. 2.Receivables 1) Customer trade receivables: as at 31 December 2016, trade receivables, net of the associated Provision for bad debt, amounted to Euro 55,217.- (Euro 41,479.- in the previous year) and fall due in the upcoming financial year, except for Euro This item is net of the provision for bad debt for Euro 1,870.- for adjustments made by the Parent Company and the French, Brazilian and Chinese subsidiaries and is also net of the invoices issued by the Parent Company for advance payments from customers not yet collected at the end of the financial year and amounting to Euro 2, This item also includes receivables for invoices to be issued and relating to moulds that were completed at the end of the financial year and not yet delivered for a total amount of Euro 10,108.- for which the Company has obtained formal acceptance by the customer on the reference date. Receivables from customers (including the provision for bad debt amounting to Euro 1,870.-) totally amount to Euro 57,087.- thousand and can be broken down as follows: - Italy and EU customers Euro 16,505.-; - Non-E.U. customers Euro 40, These are the changes that occurred in the provisions for bad and doubtful accounts (bad debts): Opening balance as of 01/01/ Use during the period (309) Provisions for the period 539 BALANCE ON 31/12/ The Group has decided to allocate Euro thousand to the Provisions for bad and doubtful accounts after specifically assessing doubtful accounts receivable, taking into account the risk of insolvency and past experience with losses on receivables, as well as the current economic and financial situation. 3) From associated companies: this item amounts to Euro (Euro 58.- in the previous year). 5-bis) Tax receivables: Tax receivables amount to Euro 2,561.- (Euro 1,295.- in the previous year) and mainly refer to tax receivables of the Parent Company (Euro 765.-) and of the French subsidiary (Euro 1,632.-). 5-ter) Prepaid Taxes: Receivables for prepaid taxes amount to Euro 3,989.- (Euro 3,229.- in the previous year). The main temporary differences which gave rise to the booking of prepaid taxes are detailed below: