Private and Confidential. For X-Culture use only.
X-Culture Global Symposium, Macerata, Italy, 2018
Challenge Presented by: Eurosuole S.p.a., http://www.eurosuole.com/www/eng
COMPANY DESCRIPTION Eurosuole is the largest manufacturer of (shoe) soles in Italy and it is located in the largest footwear ‘industrial district’ in Italy. This region has the highest density of sole and shoe manufacturers, especially fashion sole shoes. They call it the ‘Silicon Valley’ of shoes soles. They operate two highly automated state of the art manufacturing facilities in Civitanova Marche, Italy. Eurosuole has been pursuing a ‘differentiation-based’ competitive strategy, leveraging its proximity to a leading industrial district and product specialization. Please see below a Eurosuole Integrated Document that provides detailed information about the company, its history, products, financials, and more.
THE CHALLENGE
The main strategic challenge facing the company is to decide which of the two options is the optimal strategy for the company:
1. Obtain additional capital in order to pursue ambitious economies of scale to compete in the global mass market against the largest manufacturers in the world
or
2. Pursue a niche strategy focused on a balance of cost leadership and product differentiation in a limited number of segments (for example, the very technical or luxury soles produced in the local industrial district) that are less exposed to international competition.
The students are asked to select one of these options and develop a long term competitive strategy for Eurosuole as per the chosen option.
Your presentation should address the following issues:
1. The rationale behind your recommended strategy. It may be a good idea to start with a thorough SWOT analysis before you decide on the best strategy for the company. 2. The markets that the company will be able to successfully function in under this strategy: Who are the clients the company will be serving (geography, types of clients, etc.)
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3. The marketing and promotion that best fit the recommended strategy, including a review of the best channels to reach and convince the potential customers to buy Eurosoule products. 4. The pricing strategy: What sort of pricing model will work best under the proposed strategy. 5. Other considerations: If applicable, recommended approach to HR, logistics, distribution channels, financials and other operating issues under the proposed strategy.
SUGGESTED SCHEDULE June 10: Initial brainstorming, exchange of ideas; all ideas are considered. June 20: Select the best ideas around which the team will be developing their strategy June 30: Decide on the team member roles (who works on what part) July 10: Share the initial work and input from each team member July 20: Have the complete first draft of the report that the presentation will be built upon (you will not need to submit the report, but you want to put everything on paper in a form of a single coherent document) July 25: Have the complete draft of the slides for the presentation and the one-page handout July 30: Have a finished set of slides and one-page handout for the presentation August 1: Initial rehearsal of the presentation, update the slides and one-page handout. August 2: Final rehearsal of the presentation, final update of the slides and one-page handout August 3: The Presentation: Presentation: 15 minutes + 5 min Q&A Handout: One page
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EUROSUOLE INTEGRATED REPORT 2016
INTEGRATED REPORT 2016
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Contents
010101 Company Presentation 444 INTERVIEW TO OUR CEO 5 OUR COMPANY PROFILE 6 OUR ETHICS 7 OUR MILESTONES 10 OUR STAKEHOLDERS 11 KEY DATA 13 OUR COMPANY STRUCTURE 15 OUR PRODUCTS 17 02 Management Report 191919 MATERIALITY ANALYSIS 20 OUR SUSTAINABLE GROWTH 22 RISK &OPPORTUNITY MANAGEMENT 27 030303 Financial Report 292929 FINANCIAL HIGHLIGHTS 30 RATIOS AND INDICATORS 31 STATEMENT OF FINANCIAL POSITION 32 INCOME STATEMENT 34 CASH FLOWS STATEMENT 36 DISTRIBUTION OF VALUE ADDED 37 INVESTMENTS 39 EXPLANATORY NOTES 41
00040444 Sustainability Report 6662 6222 LEADING BY EXAMPLE 63 EMPLOYEES 64 RESEARCH & DEVELOPMENT 77 SUPPLY CHAIN 83 ENVIRONMENT 91 SOCIETY 102
050505 Methodological Note 11105 1050505 060606 Outlook 11108 1080808 070707 GRI G4 Content Index 1111110 11 000
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010101
Company Presentation
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INTERVIEW TO Germano Ercoli, SOLE
ADMINISTRATOR STATEMENT [G4[G4[G4-[G4 ---1]1] [G4[G4----2]2]2]2]
Can you describe 2016 from Eurosuole point of view?
“2016 was the year of our 40 th anniversary, so a very important one. It has represented a prime example of a medium-size local company and a story of a great professionalism with a particular attention to society, environment and the local community. That community, in October, was deeply marked by two major earthquakes. Eurosuole offered its contribution as moral support and solidarity to the people involved, as most of them has to start from scratch.”
Which are the results you are most proud of?
“During the last years, Eurosuole made a great leap forward in terms of development. In 2014, we built a new building of 6500 m 2 where we moved the finishing department and the warehouse. Now, we are building another hall of 5400 m2 that will enlarge the production of rubber soles. That new hall, together with a brand new line of rubber blending and advanced molding presses, will make Eurosuole stand out as the first in Europe in the field of rubber soles for shoes. Another good result regards our two brands. The Wellfeet brand, for 2 years on the market, lead to a great enthusiasm. Many trendy products were developed for this line, much appreciated by the customers. The other brand in which we strongly believe is GLE. I wish it would conquer its slice of market thanks to its technical features that we protect with an international patent.”
Which are the company priorities for the future?
“We want to invest on the young talents and on the employee’s specific training so that our core business could be perfectly focused on its competitive advantages and the rubber soles production could reach a 20% more. In addition, we will keep prioritizing eco-friendly innovation technology, working in network with other companies. Finally, we will develop health protecting and welfare programs for our employees.”
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OUR COMPANY PROFILE [G4[G4[G4-[G4 ---56]56]56]56] [G4[G4[G4-[G4 ---DMA]DMA]
Eurosuole is one of the biggest Italian companies Our company and especially the management have producing shoe soles. It was born 40 years ago in shaped the industrial culture of the town by a 1976 in Civitanova Marche (Italy), a very favorable responsible approach to work and the philosophy of location for the production of shoe accessories and ongoing innovation through reinvestment of the especially soles. profits in R&D. This concept has become very popular nowadays but in our company, it has been The town is located in the heart of the Silicon Valley applied since the beginning of our business activity. for shoe soles (we call it “Soles Valley”) and has experienced a continuous and dynamic growth for The big success of our company was achieved the last thirty years. The people in the region are thanks to our workforce, fully dedicated to work hard-working and take their job seriously, which towards the company’s objectives. enables them to compete with other companies on Human relationships are the most important value a global level. for us. This implies respect and care for everyone
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who contributes to company’s success, the origin or creates a work environment where interpersonal the gender of our employees does not make any relations and even strong friendships flourish. difference. We treat everyone fairly and highly respect contracts and agreements. This naturally
OUR ETHICS [G4[G4[G4-[G4 ---56]56]56]56]
TO BE THTHEEEE SECTOR LEADER IN SHOE SOLES PRODPRODUCTIONUCTION WITH STATE OF THE AARTRT AND ENVIROENVIRONMENTALLYNMENTALLYNMENTALLY---- FRIENDLY TECHNOLOGIES
TO CREATE VALUE BY OFFERING HIGH
QUALITY, INNOVATIVE AND SUSTAINABLE PRODUCTSPRODUCTS,,,, TAILORED TO THE NEEDS OF OUR CLIENTS
3 AMBITIONS BY 2025
Becoming the most important sole manufacturer of Europe
Producing soles with high % of recycled material
Increasing of 20% our workforce7 INTEGRATED REPORT 2016
INTEGRITY To act with honesty, accountability and transparency
To meet the expectations of
PERFORMANCE our stakeholders
To work together in an open and fair ENGAGEMENT way and support each other FORWARD THINKING To constantly challenge and improve our business practices and processes SUSTAINABILITY To consider the economic, social and environmental impact of our actions COMMUNITY To support the development and the initiatives of our community SAFETY To assure protection of our employees, customers and environment
Our values are the foundation stones of our business model. Ethical business practices, wise management decisions, shareholder value, reinvestment of profits and active engagement in the community - these are the keywords to describe the way we do business. While we are trying to achieve growth and assure profits, we realize our responsibility to the environment and the society as a whole.
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1976
1996
2016
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OUR MILESTONEMILESTONESSSS
The p olyurethane Technical m odification soles production of the polyurethane TheTheThe rubber work process is consolidated; the soles startsstarts,, especially work process enables 1981 is consolidated; the soles for ski production starts production of 1977 also prodproductionuction of sandals soles shoe soles The company creates The rubber g um soles 1984 1976 1980 fffirstfirst rubberrubber---- production begins polyurethane product for the company Diadora
1987 New management strategy The p roduction of introduces focus on an Specialization in rubber soles in thermothermo---- 1992 environmentallyenvironmentally----friendlyfriendly 1995 soles for sport products way of doing business plastic begins TheTheThe thermo ---plastic attracts wellwell----knownknown BBBest environmental production ends for clients such as Nike, production ends for technologies are studied; 1990 strategic reasons 1993 Lotto, Puma, Adidas, a new sole cleaning Ellesse, Diadora, Reebok process on water basis is implemented
TheTheThe ISO 14001 certification A polyurethane for elimination of 2000 moldmoldinging department is 2001 organohalogen solvents is 2006 designed and realized awarded to our company OOOrganohalo gen solvents cleaning NNNew company practices The permanent work group processes are 2002 regarding prevention at 2004 L.I.T. is created completely work are introduced terminated
CoCoCo ---founder of the Study of new IIImplementation of a nnnetworknetwork initiative “Rete methods such as 2008 Trigeneration planplantttt Calzatura Italiana” for biodensity, TPU and begins 2010 niche product creation their combinations Raw materials are and process innovation 2009 Recognized,a mong 8 companies, 2007 reselected according to sustainable criteria by AsurAsur,, Inail and Confindustria for a safe work environment; 2011 Trigenerator is operational
FFFounder of the regional cluster “Marche First European Manufacturing” attached to 2015 404040 ththth Anniversary project named DesDes---- 2013 the national cluster of activity Mold is created Innovation continues, “Fab“Fabbbbbricarica Intelligente” Introduction of launch of a new Weelfeet brand, 2016 2012 European prprojectojectoject:: 2014 ecoecoeco-eco ---friendlyfriendly soles SmartPif
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OUR STAKEHOLDERS [G4[G4[G4-[G4 ---24]24] [G4[G4----25]25] [G4[G4----26]26]
A direct relationship with our stakeholder is PhD students from local and national Universities. fundamental to keep a continuous feedback from We believe that their help is fundamental. That the society. Moreover, it is important to identify involvement is functional also to create a bridge risks and opportunities for the company and the between the company and the academic world changing exigences of the society. That kind of that we believe is fruitful for both parties. communication let us understand the true expectations of the people involved in our Our way of working is driven by the responsibility activities and organize our strategy in a more for everyone who has a direct or an indirect interest in the impact of the company’s business efficient way. activities and strategies and therefore every Inside our projects, most of all the ones regarding person/institution with whom Eurosuole has a product and production innovation, we involve releationship.
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We give a fundamental importance to our The internet is another element in achieving this stakeholders and keep them always informed objective as well, as it gives us the opportunity to about the happenings in the company. For this provide the public with updates on our webpage purpose, we created a specific messaging system, in the section “News”. Moreover, our annual which enables us to communicate with the Integrated Report gives a profound overview internal ones. In addition, we use Lotus Mail to about our recent activities and achievements and reach everyone (external and internal supports the communication with the stakeholders). stakeholders.
Stakeholder Map [G4[G4[G4-[G4 ---24242424]]]] [G4[G4[G4-[G4 ---25]25]25]25]
EXTERNAL
INSTITUTIONAL PRIVATE INTERNAL Employees Suppliers Managers Banks/ Charity Organisations Shareholder Insurance agencies Local Entities Society State Associations Customers
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KEY DATA [[[G4[G4G4G4----4444]]]] [G4[G4[G4-[G4 ---5555]] [G4[G4[G4-[G4 ---6]6]6]6] [G4[G4[G4-[G4 ---13]13]13]13] [G4[G4[G4-[G4 ---9]9]9]9]
We kept the whole production in Italy. The company area is Civitanova Marche (MC) enlarging, due to the works we are making to build a new plant (works have started at the end of 2016).
NAME OF THE ORGANIZATION [G4[G4[G4 ---3] :Eurosuole S.p.a.
[G4[G4[G4-[G4 ---7]7]7]7] NATURE OF OWNERSHIP AND LEGAL FORM : Public NO. OF SOLES PRODUCED G4G4G4-G4 ---9]9]9]9] Limited Company 13,477,987 PRIMARY PRODUCTS [G4[G4[G4-[G4 ---4]4]4]4] : Polyurethane & rubber gum soles
BRANDS [[[G4G4G4-G4 ---4]4]4]4] No. EMPLOYEES ***
222402404040
SALES REVENUES 41,470,41,470,495495495495
NET INCOME 2,888,2,888,978978978978 SURFACE 54,000 m² EBITDA 4,973, 823823823 (((about(about 27,000 m² roofed)
*average
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Alessandri Agnese 3% [G4[G4[G4-[G4 ---34343434 ] OUR OWNERS Alessandri Elvidio 20% Alessandri Federica 3% Alessandri Francesco 3% Alessandri Lorenzo 3% Cattoglio Angela 1% Cattoglio Chiara 1% Cattoglio Claudia 1% Cattoglio Domenico 1% Cattoglio Francesco 1% Ercoli Germano 20% Ercoli Raffaella 4% Ercoli Silvia 4% Mozzoni Gabriella* 15% Pecorari Maria 3% Renzi Matteo 8% Renzi Paola 8%
* The share held by this shareholder is the sum of the registration of the property at the Chamber of Commerce with the nominal value of EUR 365,553 and the shareholding of 1/3 of the property with the total value of EUR 1,201,111. The residual 2/3 coincide with the shares owned by Renzi Paola and Renzi Matteo.
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OUR COMPANY STRUCTURE [G4[G4[G4-[G4 ---DMADMADMA]]]] [G4[G4[G4-[G4 ---34]34]34]34]
Stability and clearness are attributes that truly administrator represents a leader of a explain our company governance. Our journey fundamental importance for every decision. As reveals a great and long-lasting story and an you can see in the organization chart, our attitude of always looking ahead. All this is organizational structure corresponds with the reflected in the will to create a strong traditional hierarchic-functional form. At the top collaboration at the workplace in a way that of the functional areas, there are two technical satisfies and engage stakeholders actively in the managers. One is the organizational manager; he achievement of company’s objectives. The monitors and organizes the production at medium size of our company and the presence of machinery level. The other one is the product our department manager let the company manager as well as the head of human resources. communicate the decisions promptly to all the They both refer to the general manager. We have interested employees and ensure the consistency the following functional areas: procurement, of the policies. At structural level, our company production, marketing and sales, administration, saw a transformation since its foundation. IT, research and development. Our company has Initially, the administrative functions were in the a traditional corporate governance model, with hands of the sole administrator. This situation has shareholders assembly, sole administrator and changed over time due to the enlargement of the board of auditors. company. Some of the responsibilities were decentralized and entrusted to the competent On the following page, we would like to introduce employees and above all to people motivated to to you part of our team. work in line with our mission. Of course, the sole
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SOLE ADMINISTRATOR
Germano Ercoli
GENERAL MANAGER
Rosaria Ercoli
ORGANIZATIONAL MANAGER PRODUCT MANAGER/ HEAD OF HR
Marco Cognigni Giorgio Ruffini
PROCUREMENT & MARKETING & PRODUCTION ADMINISTRATION IT AND R&D ENVIRONMENT SALES
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MATERIAL ISSUES IN THIS CHAPTER
• PRODUCT QUALITY AND SAFETY
[G4[G4[G4-[G4 ---DMA]DMA] OUR PRODUCTS • INNOVATION
As European industry leaders, we are able to respond to current demands and new customer produce daily around 50,000 pairs of rubber and needs. The success of this business approach polyurethane sole for man and woman in our reflects in the incremental growth of our factory. production and sales. We strive to keep production capacity high Our customers can count on a product matching it with the high quality of the product. characterized by sustainability in all its aspects, We can claim to promote successfully the true from the production process to the business "made in Italy" in the world. philosophy that lays behind it, conscious of the We respond to standards, even very consequences on present and future generations. heterogeneous, in terms of expectation- The variety of our products has expanded and customer. This translates into our great diversified over time. We currently have the commitment to continuously and quickly renew following products in our portfolio [G4[G4[G4-[G4 ---4]4]4]4] : the samples. Thanks to this strategic policy, we are able to market products that can promptly
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POLYURETHANE SOLES SOLES IN RUBBER GUM/ POLYURETHANE We use a new generation of non-toxic These soles unify the polyurethane and rubber polyurethane, which can be expanded to the gum in one unique product: the sole consists of a required size through specific chemical-physical rubber tread and a polyurethane top. The soles processes. This ability allows the production of are suitable for highly technical footwear, which light, flexible and insulated soles. These kind of requires the lightness of a foam material such as soles are especially suitable for the production of polyurethane and at the same time the resistance sandals, slippers and summer shoes. of a high quality material such as rubber gum.
RUBBER GUGUMM SOLES PRODUCTION OF PU COMPOUNDS The rubber soles are produced from a non-toxic These products are made from a mixture of elastomer of a natural or synthetic origin. This polyurethane resins and isocyanate. material allows the production of high quality products, with high performance in terms of DOUBLE DENSITY POLYURETHANE SOLES abrasion resistance, grip and durability. These Density polyurethane soles can be bicolor. They soles are particularly suitable for footwear used combine the technical benefits of a product with for leisure, sports and as safety shoes. a greater grip with the possibility to satisfy higher stylistic needs .
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020202 Management Report
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MMMATERIALITYMATERIALITY ANALYSIS [G4[G4[G4-[G4 ---15]15] [G4[G4----18]18] [G4[G4----19]19] [G4[G4----20]20] [G4[G4----21]21] [G4[G4[G4-[G4 ---23232323]] [G4[G4[G4-[G4 ---DMA]DMA]
The year 2016 is the second in which we we focused on the impact of our business reference to the principle of materiality required activities on our stakeholders and our long-term by the Global Reporting Initiative (GRI) G4 business viability. We came up with 5 Material guidelines to elaborate our Integrated Report. We Topics. kept almost the same Material Topics and In the second step, the priorities among these therefore Material Aspects of the last year. Like topics were assigned. During this phase, we in the previous years, we did effort R&D for consulted the assignment of priorities with top sustainable new products and technologies. management and other key stakeholders. Indeed, we focused on skill development and health of our employees. Taking in account the results from these interviews and the strategic plan of the company, In accordance with the principle of materiality, we we were able to assign priority to the topics and performed a materiality analysis in order to created a materiality matrix. The matrix helped us identify the most relevant topics to the company to identify 131313 Material Aspects. We grouped in terms of economic, environmental and social those material aspects into the 5 material topics, impacts generated by the company, both inside to show the relation between the two issues. and outside the organization. During this process,
EUROSUOLE MATERIALITY MATRIX
TRANSPARENCY REUSING, RECYCLING OF THE PRODUCT
PRODUCT QUALITY, SAFETY AND INNOVATION EMISSIONS (VOC) RESPONSIBLE SOURCING OF RAW MAT.
WATER MANAGEMENT OCCUPATIONAL HEALTH &SAFETY COMMUNITY ENGAGEMENT SKILLS DEVELOPMENT FINANCIAL STRENGHT INFLUENCE ON STAKEHOLDER STAKEHOLDER ON STAKEHOLDER ON INFLUENCE INFLUENCE INFLUENCE ON STAKEHOLDER STAKEHOLDER ON STAKEHOLDER ON INFLUENCE INFLUENCE ASSESSMENTS AND DECISIONS DECISIONS AND AND ASSESSMENTS ASSESSMENTS ASSESSMENTS AND DECISIONS DECISIONS AND AND ASSESSMENTS ASSESSMENTS WORK-LIFE BALANCE
WASTE MANAGEMENT
ENERGY EFFICIENCY
SIGNIFICANCE FOR EUROSUOLE SUCCESS
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HUMAN RIGHTS OF EMPLOYEES WORK-LIFE BALANCE OCCUPATIONAL HEALTH & SAFETY
SKILLS DEVELOPMENT
CONSCIOUSNESS OF PRODUCT
RESPONSIBLE SOURCING OF RAW MATERIALS PRODUCT QUALITY, SAFETY AND INNOVATION REUSING, RECYCLING OF THE PRODUCT
ENVIRONMENT IMPACT
ENERGY EFFICIENCY WATER MANAGEMENT
EMISSIONS (VOC) WASTE MANAGEMENT
ACTIVE SOCIETY
COMMUNITY ENGAGEMENT
ECONOMIC GROWTH FINANCIAL STRENGTH TRANSPARENCY
The detail in which the various aspects are addressed in the report was determined basing on their importance to the stakeholders in relation to our objectives and strategies. The material aspects have impacts both within and outside the organization (boundaries).
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MATERIAL ISSUES IN THIS CHAPTER • PPPRODUCTPRODUCT QUALITY, SAFETY AND INNOVATION • OCCUPATIONAL HEALTH & SAFETY • WORK LIFE BALANCE OUR SUSTAINABLE
GROWTH [G4[G4[G4-[G4 ---2]2] [G4[G4----4]4] [G4[G4----13]13] [G4[G4[G4-[G4 ---DMA]DMA]
In 2016, our main business activities remained unchanged, with focus on polyurethane and rubber gum soles production (as well as their combinations), and the production of compounds and systems based on resin and synthetic polymers. We kept all our production activities in our only production site in Civitanova Marche (Italy). We do not control directly nor indirectly other companies that carry out complementary
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activities related to our core business. We regularly assess the risks, which might have a direct or indirect impact on our operations and take appropriate actions to avoid negative consequences on our business. We have created clear rules of governance that are regularly communicated to our stakeholders. Our business model is based on six capitals, all serving as resources and inputs to our business activities and value creation. We realize the interdependencies and trade-offs between the costs and benefits of the capitals and make regular reviews of our objectives and performance to improve the outcomes of our operations. Although we believe that all capitals are crucial for the success of our company, we put the biggest value on human, financial and natural capital. These capitals are of highest importance for our stakeholders and are necessary to protect our reputation and to meet the needs and expectations of our customers.
BUSINESS MODEL BASED ON 6 CAPITALS
Human capital Natural capital Intellectual capital Productive capital Financial capital Social & relationship capital
Here below you find a summary of the way we work:
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CONTINOUS DIALOGE subjects: its sustainability approach involves its suppliers, customers and lots of other external Communication is the keyword that deeply explain our business management. We daily collaborators. Finally, the company creates value speak about the development of each office’ for the society in which it lives. A value that activities and we help each other trying to solve reflects in richness for the territory, both the issues as soon as possible. In addition, we can economic and immaterial. count on the professionality of both our collaborators and employees, already well WE FRONT THE MARKET AIMING TO THE prepared to the full speed of an industrial ECONOMIC GROWTH ASSURING PROFITS company like Eurosuole. They daily commit FOR STAKEHOLSTAKEHOLDERSDERS AND DELIVERING themselves to obtain the best performances. SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
YEAR BY YEAR, WE INTEGRATED SUSTAINABILITY IN ANY ASPECTA SPECT OF OUR SUSTAINABILITY IN ANY A SPECT OF OUR WORKWORK----LIFELIFE BALANCE [G4[G4[G4-[G4 ---DMA]DMA] ACTIVITY During the last quarter of 2016, we welcomed a research together with a questionnaire, gave to all the employees, to understand the balance between work and private life detected by them. It represented an example of a constructive USE OF SUSTAINABLE RAW MATERIALS AND collaboration between academic and TECHNOLOGIES entrepreneurial worlds. You can find the details in the fourth chapter, among the initiatives. Our attitude is to update ourselves continuosly, trying to find the most sustainable solution for environment and for our human resources. We constantly monitor emissions, presence of hazardous substances in raw materials and our IN 2016 EUROSUOLE DID NOT FACE ANY waste, respecting the rules. We also assure that UNFAIR COMPETION OR ANTIANTI----TRUSTTRUST our suppliers do the same as we do. LEGAL ACT
ZERO CORRUPTIONCORRUPTION::::[G4[G4[G4 ---SO5 ]]]
QUALITY AND PRODUCT INNOVATION NO CASES OF CORRUPTION HAVE With determination, the company continues to OCCURED IN OUR COMPANY IN THE LAST 3 grow. During 2016, the Wellfeet brand continued YEARS OR BEFORE, NOR LEGAL on its path, while the lightweight soles appeared PROCEDURES AGAINST US for the first time on the market, showing GLE brand. This product is the result of the study and application of a technology and new materials CREATION OF ADDED VALUE conducted by Eurosuole technicians. That technology has thus obtained the industrial The company, thanks to its production activity privatization right that the company is protecting and its human resources, creates first of all value with an international patent (European Patent for itself. This value, is also shared with other
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Application No. 15425051.8). We are expecting We invest in training and skills development to considerable satisfaction from this product, even keep our employees always updated about the though we work prudently enough, not to commit new production technics and on the safety rules. In commercial or strategic mistakes. The extension that way, we try to reduce the accident risks to the of the tire manufacturing plant and the new minimum. Each new employee, as each employee that premises under construction will be a prelude to changes his/her tasks or start working with new this patent. materials or machines, must receive an adequate training before starting the new task. In the same way, the department managers must do a precise number of updating hours to train the employees of whom they are responsible. ENVIRONMENT SAFEGUARD [G4[G4[G4-[G4 ---DMA]DMA]
We write the “SOLVENT PLANNING”1 every four months, and we make an additional check of Volatile Organic Compounds 2 (VOC) emissions in atmosphere WE RESPECT THE D.LGS. 9 APRIL 2008, NO. at the end of every year. Our business is driven by the principle of negative externalities reduction on 81, THAT IS THE REFERENCE LAW ON THE environment. We try to promote the conservation of WORK SAFETY IN ITALY environment through a preventative approach.
During 2016, no damages to environment occurred, neither we suffered of sanctions or penalties for HUMAN RIGHTS OF EMPLOYEES [G4[G4[G4-[G4 ---DMA[DMA[ damages or environmental offenses. In 2004, we Employees are the key of company success. For received the environmental certificate ISO 14001. The that reason, we do our best to protect them and last reconfirm was in 2013. assure a safe and comfortable workplace. During the year, no deaths on work neither severe injures causing severe lesions to our workers employees have occurred; no absences has been registered do to occupational diseases of WE ARE CERTIFIED ISO 14001 SINCE 2004 employees or ex employees, nor do to mobbing episodes.
IN 2016 [G4[G4[G4 ---LA6]:
000 DEATHS ON WORK 0 SEVERE INJURIES 0 MOBBING EPISODES
IN 2016 INTERNATIONAL PATENT GLE
BRAND REGISTERED
SAFETY
1Il piano di gestione dei solventi è un documento integrativo che 2Composti chimici caratterizzati da una certa volatilità. Secondo la un’azienda è tenuta a elaborare in caso di svolgimento di specifiche legislazione italiana sono considerati COV quelli che alla attività che prevedano l’utilizzo di composti organici volatili. E’ temperatura di 20 °C hanno una pressione di vapore di 0,01 kPa o previsto dal Decreto Legislativo 3 aprile 2006, n. 152 "Norme in superiore. materia ambientale" che va a recepire diverse Direttive UE fra cui la 2001/42/CE.
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LONGLONG---- TERM RELATIONSHIPSRELATIONSHIPS:::: DELIVERING SUSTAINABLE VALUE WE BOAST 2525----YEARSYEARS CONTRACTS Delivering profitability and growth, developing WITH MANY OF OUR and introducing innovative and sustainable COLLABORATORS materials and technologies, contributing to development of the community, protecting environment and preserving health and safety of our employees, conducting our business operations with regard to human rights and transparency: this is how we sustainably create long-term value for our stakeholders.
INNOVATIVE AUTOMATION TECHNOLOGY
Twenty years ago, we started introducing robotics in our production process. At today, we have 30 anthropomorphic robots that extract soles from the mold, spray the release agent, rough and trim. Sophisticated and precise, those machines are able to improve our performances and enhance the productivity.
INCREASE OF PRODUCT SUSTAINABILITY: IN 2016 WE PATENT A PRODUCTION PROCESS AND THE RELATED PRODUCT OBTAINED BY THE POLYURETHANE WASTE
WE REGISTERED 1,448 HOURS OF IN 2016 WE REDUCEREDUCEDDDD THE QUANTITY OF TRAINING IN 2016 [G4[G4[G4-[G4 ---LA9]LA9] VOC IN ALMOST EVERY RAW MATERIAL
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RISK & OPPORTUNITY MANAGEMENMANAGEMENTTTT [G4[G4[G4-[G4 ---2]2]2]2] [G4[G4[G4-[G4 ---14]14]14]14]
In the following paragraph we provide for information regarding our precautionary approach. Therefore we show the use of financial instruments relevant for the assessment of the financial position of the company (in compliance with the regulation 2428, second paragraph, 6-bis, of the Commercial Code). In addition, we list some non-financial risks influencing the performance of the organization and the key opportunities we consider in our long-term strategy. Along with the financial strategy:
We did not enter into any purchase or sale transactions or financing with temporary cession. We did not issue financial instruments, nor did we use financial instruments for speculative or hedging purposes. We take preventive measures regarding market, credit and liquidity risk to be able to respond to any unexpected events without causing harm to the company or the shareholders.
CREDIT RISK The division of exposure among a large number of customers mitigates the credit risk. In addition, we implemented appropriate insurance policies covering the risk of insolvency. Our company has an excellent creditworthiness concerning bank deposits. LIQUIDITY RISK We have deposits in the credit institutions, more than adequate to meet our liquidity needs. MARKET RISK As already mentioned previously, we make products for the footwear industry. The market in this sector is mature and has been experiencing a crisis for several years. We are, therefore, committed to continue current research and development activities to create new, innovative and technological products, designed to meet the growing customer needs. Moreover, it allows us to enter new markets with products of high standards. COMPETITIVENESS RISK The competition in the footwear industry is high. Outsourcing in cheapest labor countries has been a strategic choice of many companies in the past. The success of each company strongly depends on its ability to respond to changing customer preferences regarding the product design, materials and characteristics. For these reasons, we regularly ask our customers for feedback to better understand their needs. We believe that this approach together with our experience and quality of products can convince the customers to choose Eurosuole over our competitors. SOCIOPOLITICAL AND MACROECONOMIC RISKS Compared to the previous year, 2016 saw a slight improvement in the economic situation. Domestic demand, net of inventories, contributed to higher growth compared to 2015. Household consumption slowed down, sustaining activity for the third consecutive year, and investment spending strengthened. Public Administration spending has returned to rise after five years of decline, while public investment has yet to come down. In the first quarter of 2016, Italy's GDP increased by 1% compared to the first quarter of 2015 3, while in the fourth quarter, increased of 1.1% compared to the same quarter of the previous year.
3 GDP of Euro countries increased of + 1.6%
27 INTEGRATED REPORT 2016
INFORMATIC RISKRISK---- CYBER SECURITY There are more and more hacking cases challenging Corporates security. Our I&T Manager informs employees about the protection of corporate IT assets. We assume, in fact, a prudent attitude in files saving, respecting sensitive information.
PARTNERSHIP OPPORTUNITY Working in network with other companies, in general with public and private entities, has become fundamental for our business success. Currently, we are part of 4 network projects. Those long-term contracts and their outcomes are the proof that collaboration brings advantages and enrichment for each part.
PERSONNEL OPPORTUNITY We do believe in capabilities and talent of our employees. We try to instill them our strategy, ethics and priorities and to keep them motivated. Indeed, employees’ feedback helps the whole company to grow and enhance. Moreover, we find that on-the-job learning together with regular training courses is the best effective method to make employees professionally grow. In addition, we offer career development opportunities even if we do not follow a structured promotion model. Our managers help employees to fully develop their potential.
MARKETPLACE OPPORTUNITY Our company works especially with the national market, but is always active in the searching of the right market ready to welcome its products. In 2016 we consolidated the relationship with various countries. You can find the details in the paragraph “DISTRIBUTION POLICY”.
PRODUCTION OPPORTUNITY Developing sustainable products and production processes has become one of our focuses in the last years. We worked to get soles made of a high percentage of recycled materials, and registered a national patent in this regard. In addition, our LIT laboratory, through a project supported by the regional program "Promotion of Research and Development in the Intelligent Specialization area", is implementing a process of solvent-free soles molding.
DEMAND OPPORTUNITY Our clients are by now well defined. We realize that new business relationships require patience, determination and personal approach. The customers who visited our company were impressed by our standards, skills and knowledge of our employees, as well as quality of our products. The research and development process is incessant and demands great investments into new machinery, automation and organization. When it comes to machinery, we strive for technological solutions combining innovative technologies with energy saving.
28 INTEGRATED REPORT 2016
030303 Financial RReporteport
29 INTEGRATED REPORT 2016
MATERIAL ISSUES IN THIS CHAPTER
• FINANCIAL STRENGTH FINANCIAL HIGHLIGHTS • TRANSPARENCY [G4[G4[G4 ---999]]]
Sales revenues have risen in 2015. Liquidity has EBITDA increased and debt ratio decreased. The financial statements for 2016 audited by external auditors are presented below.
SALES REVENUES EBITDA
7,847,145 7,847,145 7,847,145 7,847,145 41.148.117 41.148.117 41,696,881 41,696,881 41.148.117 41.148.117 41,696,881 41,696,881 6,245,409 6,245,409 6,245,409 6,245,409 5,767,047 5,767,047 5,767,047 5,767,047 39,314,796 39,314,796 39,314,796 39,314,796 2014 2015 2016 2014 2015 2016
EBT UTILE DELL'ESERCIZIO
5,162,006 5,162,006 5,162,006 5,162,006 3,830,655 3,830,655 3,830,655 3,830,655 2,888,978 2,888,978 2,888,978 2,888,978 3,859,567 3,859,567 3,859,567 3,859,567 4,006,835 4,006,835 4,006,835 4,006,835 2,565,775 2,565,775 2,565,775 2,565,775
2014 2015 2016 2014 2015 2016
30 INTEGRATED REPORT 2016
FINANCIAL RATIOS AND INDICATORS [G4[G4[G4 ---999]]]
FINANCIAL RATIO/ INDICATOR DIC. 31, 2016 DEC 31, 2015 DEC 31, 2014
PROFITABILITY 0.11 Net ROE 0.15 0.11
Gross ROE 0.14 0.21 0.17
ROI0.09 0.09 0.11 0.09
ROS 0.09 0.12 0.09
EBITDA 4.973.823 6,684,839 5,050,078
EBT 3.859.567 5,162,009 4,006,835
LIQUIDITY Primary liquidity 2.27 2.00 2.00
Secondary liquidity 2.61 2.32 2.30
FINANCIAL STRENGTH Debt ratio 0.44 0.51 0.58
Fixed assets coverage ratio 2.49 2.36 2.71
Fixed assets to equity capital margin 1,229,528 16,068,613 16,252,500
Fixed assets to equity capital ratio 2.39 2.25 2.57
Fixed assets to equity capital and medium-long term debt margin 18,761,383 17,723,005 17,971,156
Fixed assets to equity capital and medium-long term debt ratio 2.51 2.37 2.73
31 INTEGRATED REPORT 2016
STATEMENT OF FINANCIAL POSITION [G4[G4[G4 ---999]]] 1/21/21/2
ASSETS (in euro) DIC. 31, 2016 DEC 31, 2015 DEC 31, 2014
NON CURRENT ASSETS Intangible fixed assets Costs of intellectual property rights 106,924 114,244 118,232
Concessions, licenses, brands and similar rights 11,271 13,210 13,667
TOTAL INTANGIBLE FIXED ASSETS 118,118,195195195195 127,454 131,899
Tangible fixed assets Buildings and land 7,875,365 8,927,395 8,333,697
Plants and machinery 2,660,457 2,219,126 813,802
Industrial and commercial equipment 472,436 437,374 364,974
Assets under development and advances 620,086 421,000 255,660
Others 113,180 26,873 44,037
TOTAL TANGIBLE FIXED ASSETS 11,741,11,741,524524524524 12,031,768 9,812,170
Other fixed assets Participation in other companies 0 0 3,076
TOTAL OTHER FIXED ASSETS 000 000 3,076
TOTAL NON CURRENT ASSETS 11,859,11,859,719719719719 12,159,222 9,947,145
CURRENT ASSETS Inventories Raw materials 2,085,960 2,122,612 2,266,097
Semi-finished products and products in work progress 746,385 681,500 625,176
Finished products and goods 1,162,879 1,454,150 1,174,018
TOTAL INVENTORIES 3,995,224 4,258,262 4,065,291
Accounts receivable Trade receivables within 12 months 14,226,708 13,501,681 12,849,932
Tax receivables within 12 months 1,452,046 770,560 1,207,714
Tax receivables above 12 months 225,503 250,933 -
Deferred taxes above 12 months 333,930 480,939 429,405
Others within 12 months 497,582 336,593 697,323
TOTAL ACCOUNTS RECEIVABLE 16,735,16,735,769769769769 15,340,706 15,184,374
Cash and cash equivalents Bank and postal deposits 10,163,766 12,230,164 12,980,578
Cash 5,066 3,772 2,567
TOTAL CASH AND CASH EQUIVALENTS 10,168,10,168,832832832832 12,233,936 12,983,145
TOTAL CURRENT ASSETS 30,899,30,899,825825825825 31,832,904 32,232,810
ACCRUALS AND DEFERRALS Various 60,045 63,833 38,625
TOTAL ACCRUALS AND DEFERRALS 60,60,60,04560, 045045045 63,833 38,625
TOTAL ASSETS 42.819.589 44,055,959 42,218,580
32 INTEGRATED REPORT 2016
2/22/22/2
[G4[G4[G4 ---999]]]
EQUITY AND LIABILITIES (in euro) DEC 313131 , 2016 DEC 31, 2015 DEC 31, 2014
EQUITY Share capital 5,000,000 5,000,000 5,000,000
Revaluation reserve 399,225 399,225 399,225
Legal reserve 1,000,000 1,000,000 1,000,000
Extraordinary reserve 15,510,480 13,879,825 13,814,050
Rounding difference (3) 2 0
Reserve fund for tax suspension 2,336,107 2,850,000 2,850,000
Other reserves 2,513,893 2,000,000 1,000,000
Retained earnings 2,888,978 3,830,655 2,565,775
TOTAL EQUITY 29,648,29,648,680680680680 28,959,707 26,629,050
LIABILITIES Provisions for risks 268,043 254,024 240,358
Severance indemnities 1,263,812 1,400,368 1,478,298
Unearned income within 12 months 51 17,129 5,827
Supplier payables within 12 months 9,103,371 10,324,040 10,488,357
Tax payables within 12 months 309,383 709,615 974,428
Social security payables within 12 months 794,190 1,013,835 825,653
Others within 12 months 1,432,059 1,377,241 1,576,609
TOTAL LIABILITIES 11,639,11,639,054054054054 15,096,252 15,589,530
TOTAL EQUITY AND LIABILITIES 42,819,42,819,589589 45,055,959 42,218,580
33 INTEGRATED REPORT 2016
INCOME STATEMENT [G4[G4[G4 ---999]]] [G4[G4[G4 ---EC1] 1/21/21/2
PROFIT/ LOSS FOR THE PERIOD (in euro) DEC. 31, 2016 DEC 31, 2015 DEC 31, 2014
REVENUE ACCOUNTS Revenues Sales revenues 41,696,881 41,148,117 39,314,796
Inventory changes in finished, semi-finished and work in process products (226,386) 336,457 415,727
TOTAL REVENUES 41,923,267 41,484,574 39,730,523
Other Income Various 192,929 203,004 89,362
Revenue grants 1,042,157 415,205 431,026
Equipment grants 0 0 14,522
TOTAL OTHER INCOME 1,235,1,235,086086086086 618,209 534,910
TOTAL REVENUE ACCOUNTS 42,705,42,705,581581581581 42,102,783 40,265,433
PRODUCTION COSTS Operating costs Costs of raw materials, supplies and materials for consumption 16,867,991 (17,700,236) (18,121,634)
Costs of services 8,116,931 (7,030,459) (6,670,358)
Costs of use of third party assets 1,086 (2,227) (619)
Wages and salaries 7,288,925 (6,818,530) (6,647,894)
Social security costs 2,396,580 (2,204,032) (2,227,765)
Severance payments 399,437 (394,371) (374,878)
Other personnel costs 174,884 (137,020) (111,502)
Other operating charges 1,163,667 (171,695) (142,988)
Changes in inventories of raw materials, supplies and materials for consumption 36,652 (143,485) (188,056)
TOTAL OPERATING COSTS (((36.446.153(36.446.15336.446.153)))) (34,602,055) (34,485,694)
Amortization, depreciation and writewrite----downsdowns Amortization of intangible assets (66,776) (68,517) (72,334)
Depreciation of tangible assets (2,352,403) (2,266,680) (1,877,149)
Write-downs of account receivables included in the current assets and write-downs of cash (36,500) (184,013) (182,059)
TOTAL AMORTIZATION, DEPRECIATION AND WRITEWRITE----DOWNSDOWNS 2,455,679 (2,519,210) (2,131,542)
Provisions for risks (14,019) (13,667) (12,692)
TOTAL PRODUCTION COSTS 38,915,38,915,851851851851 (37,134,932) (36,629,928)
DIFFERENCE BETWEEN REVENUES AND PRODUCTION COSTS 3,789,3,789,730730730730 4,967,851 3,635,505
34 INTEGRATED REPORT 2016
2/22/22/2 [G4[G4[G4 ---999]]] [G4[G4[G4 ---EC1]
PROFIT/ LOSS FOR THE PERIOD (in euro) DEC. 31, 2016 DEC 31, 2015 DEC 31, 2014
FINANCIAL INCOME AND EXPENSES Other financial income 59,379 189,380 277,646
Other financial expenses 0 (3,439) (857)
Profits and losses from exchange 10,458 8,133 89,882
TOTAL FINANCIAL INCOME (EXPENSES) 69,69,69,83769, 837837837 194,074 366,671
EXTRAORDINARY FINANCIAL INCOME AND EXPENSES Other financial income 0 84 5,497
Other financial expenses 0 0 (838)
TOTAL EXTRAORDINARY FINANCIAL INCOME/ EXPENSES 000 848484 4,659
PROFIT BEFORE TAXES 3,859,3,859,567567567567 5,162,009 4,006,835
INCOME TAXES Current taxes 823,580 (1,382,887) (1,463,141)
Deferred taxes 147,009 51,533 22,081
TOTAL INCOME TAXES 970,970,589589589589 (1,331,354) (1,441,060)
PROFIT/LOSS FOR THE PERIOD 2,888,2,888,978978978978 3,830,655 2,565,775
35 INTEGRATED REPORT 2016
CASH FLOWFLOWSSSS STATEMENT [G4[G4[G4 ---999]]]
CASH FLOWS DDDEDEEEC.C. 31, 2016 DEC 31, 2015 A) CASH FLOWS FROM OPERATING INCOME (INDIRECT METHOD)METHOD) Profit/ (loss) for the period 2,888,978 3,830,655 Income taxes 970,589 1,331,354 Interests passive/(active) (59,379) (185,941) (Gains )/ losses from selling assets 901,723 (43,377) 1) Profit/ (loss) before income taxes, interest, dividends gains/ (losses) from sales 4,701,911 4,932,691 Adjustments of nonnon----cashcash items that had no counterpart in net working capitalcapital Allocation of provision 32,679 31,344 Amortization of fixed assets 2,419,179 2,335,198 Other adjustments regarding increase/ (decrease) in non-cash items 681,274 48,623 Total adjustments of non-cash items that had no counterpart in net working capital 3,133,132 2,415,165 2) Cash flows before the changes in net working capital 7,835,043 7,347,856 Changes of the net working capital 263,038 Decrease/ (increase) of inventories (192,971) Decrease/ (increase) of receivables from customers (725,027) (651,749) Increase/ (decrease) of trade payables (1,220,669) (164,317) Increase/ (decrease) of active accruals and deferrals 3,788 (25,208) Increase/ (decrease) of passive accruals and deferrals (1,399,182) Other decreases/ (other increase) of the net working capital (3,078,052) 844,461 Total changes of the net working capital 4,756,991 (189,784) 3) Cash flows after the changes in net working capital 263,038 7,158,072 Other adjustments 59,379 Interest received/ (paid) 185,941 (Income taxes paid) (1,954,859) (1,998,740) (Use of funds) (155,216) (95,608) Total other adjustments (2,050,696) (1,908,407) Cash generated from operations (A) 2,706,295 5,249,665
B) CASH FLOWS FROM INVESTING ACTIVITIES Tangible fixed assets (Investment flows) (3,030,997) (4,494,379) Disinvestments flows 67,115 59,577 Intangible fixed assets (Investment flows) (57,517) (64,072) Net cash used in investing activities (B) (3,021,399) (4,498,874) C) CASH FLOWS FROM FINANCING ACTIVITIES Own resources (1,750,000) Dividends paid (1,500,000) Net cash used in financing activities (C) (1,750,000) (1,500,000) NET INCREASE/ DECREASE IN CASH AND CASH EQUIVALENTS (A ± B ± C) (2,065,(2,065,104)104) (749,209)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 12,233,12,233,936936936936 12,983,145
CASH AND CASH EQUIVALENTS AT END OF PERIOD 10,168,10,168,832832832832 12,233,936
36 INTEGRATED REPORT 2016
DISTRIBUTION OF VALUE ADDED [G4[G4[G4 ---EC1EC1EC1 ]]] 1/21/21/2
2016 CREATION OF VALUE ADDED 2016 2015 2014
REVENUE ACCOUNTS Sales revenues 41,696,881 41,148,117 39,314,796
Inventory changes in finished, semi-finished and work in process products (226,386) 336,457 415,727
Other income 1,235,086 618,209 534,910
TOTAL VALUE OF REVENUE ACCOUNTS 42,705, 581581581 42,102,783 40,265,433
INTERMEDIATE PRODUCTION COSTS Costs of materials and services 25,021,574 24,826,275 24,947,364
Provisions for risks 14,019 13,667 12,692
TOTAL INTERMEDIATE PRODUCTION COSTS 25,035,25,035,593593593593 24,839,942 24,992,740
GROSS VALUE ADDED FROM ORDINARY OPERATIONS 17,669,17,669,988988988988 17,262,841 15,305,377
EXTRAORDINARY COMPONENTS Financial income 69,837 194,074 366,671
Extraordinary financial income/ expenses (955,344) 84 4,659
TOTAL EXTRAORDINARY COMPONENTS (885,(885,507)507) 194,158 371,330
TOTAL GROSS VALUE ADDED 16,784,16,784,481481481481 17,456,915 15,676,707
Amortization and depreciation 2,455,679 2,519,210 2,131,542
TOTAL NET VALUE ADDED 14,328,14,328,802802802802 14,937,789 13,545,165
37 INTEGRATED REPORT 2016
DISTRIBUTION OF VALUE ADDED [G4[G4[G4 ---EC1EC1EC1 ]]] [G4[G4[G4 ---SO1] 2/22/22/2
DISTRIBUTION OF VALUE ADDED 2016 2015 2014
Personnel 10,259,826 9,553,953 9,362,039
Public Administration 970,589 1,331,354 1,441,060
Company remuneration 2,888,978 3,830,655 2,565,775
COMMUNITY Membership contributions 21,926 20,157 18,533
Local taxes 77,088 71,448 64,798
Other contributions (*) 213,582 130,222 92,960
TOTAL VALUE OF COMMUNITY CONTRIBUTIONS 312,312,596596596596 221,827 176,291
TOTAL DISTRIBUTED NET VALUE ADDED 14,744,14,744,585585585585 14,937,789 13,545,165
(*) OTHER CONTRIBUTIONS 2016 Social associations 29.69%
Social associations 63,400 Sport associations 29.12% Sport associations 62,182
Cultural events 18,000 Cultural events 8.43% Nonprofit organizations 70,000
TOTAL DISTRIBUTED NET VALUE ADDED 213,213,582582582582 Nonprofit organizations 32.78%
VALUE ADDED
In 2016, the value added amounted for EUR 14,744,585. It slightly decreased compared to the previous year. Personnel 70% Public administration 7% We increased our spending for Company remuneration 20% community and personnel. We Community 3% actively support our community, this year especially nonprofit organizations.
38 INTEGRATED REPORT 2016
ASPETTI MATERIALI NEL CAPITOLO
QUALITÀ, SICUREZZA E INNOVAZIONE DEL PRODOTTO INVESTMENTS
During 2016 (and for the next reporting periods), the improvement of our plants to increase the we focused our investments mainly on research production efficiency. All our investments were and development of new, innovative and fully financed with our own means. sustainable materials and technologies. Part of In 2015, we invested in the following areas : the investments targeted the maintenance and
ASSETS
INVESTINVESTMENTSMENTS VALUE
Buildings and land 919,410
Plants and machinery 2,097,956
Equipment and molds 1,288,577
Other assets 23,095
Multi-year utility assets 64,072
Fixed assets under development and advances 421,000
RESEARCH & DEVELOPMENT In 2016, we forecast considerable investments aimed to R&D research and to add new technologies and new machinery to production. Here below two examples of expenses for two of the many project in which the company is involved. You can find the complete list of the projects in the fourth chapter.
39 INTEGRATED REPORT 2016
EXAMPLES OF INVESTMENTS IN PROJECTS (D(D(Details(D etails about the project objectives can be found in chapter 04 Sustainability Report/ Product and Supply chain)
1.1.1. MAP SHOES NETWORK
Study and desidesigngn of flexible systems based on anthropomorphic robotrobotssss with the goal of work automation in the footwear inindustry.dustry.
Facilities 18,500 Consulting 44,837.50
Materials 48,200.00 Personnel 267,914.82
General expenses 0 Facilities 379.452,32
2.2.2. SOLEution NETWORK
Innovative and green solutions for the sole production chain. The overall objective of the project is to make the production of soles in polymeric materials more efficientefficient and sustainable.
Facilities 251,669.23 Consulting 113,249.50 Materials 316,800.00
Personnel 417,729.66
General expenses 208,864.83 TOTAL 1,308,313.1,308,313.22222222
40 INTEGRATED REPORT 2016
EXPLANATORY NOTES
REPORTING BASIS [G4[G4[G4-[G4 ---15151515]]]]
The financial statements are consistent with the and liability accounts under “Rounding article 2423 and the following ones of the difference”. The financial statements are Commercial Code. The explanatory notes are prepared for our company, Eurosuole S.p.a., prepared according to the article 2427. The having a single production site located in financial statements are presented in euro. Any Civitanova Marche, Italy. [G4[G4[G4- [G4 ---17]17]17]17] The financial part rounding differences are reported in the equity of the report is externally verified. [G4[G4[G4-[G4 ---33]33]33]33]
EVALUATION CRITERIA (Reference article 2427, first paragraph, no. 1, of statement when they are earned. The expenses the Commercial Code and the accounting are matched with the related revenues and/ or standard OIC 12) are reported when the expense occurs, not when the cash is paid. The result of accrual accounting The criteria used for the financial statements is an income statement that better measures the between January 1, 2015 and December 31, 2015 profitability of a company during a specific time. do not differ from those used for the preparation of the statements in the previous years. The The evaluation criteria must stay consistent over balance sheet items were evaluated based on the time so that financial statements can be general criteria of prudence and competence. comparable. The evaluation method favors the substance over the form, allowing a faithful and Because of the application of the prudence realistic representation of economic and financial principle, each item of the assets and liabilities situation at the company. was evaluated individually. This principle further assures that the amount of recognized revenues EXCEPTIONS is not overestimated and the amount of expenses (Reference article 2423, fourth paragraph, of the is not underestimated. The amount of assets Commercial Code) should be conservative, and liabilities should not There were no exceptional circumstances that be underestimated. This prevents miscalculations would require a recourse according to the article in the computation such as unaccounted liabilities 2423. or non-existent activities. The resulting financial statements should be conservative. CORRECTION CRITERIA The accrual basis of accounting says that Sales revenues and acquisition costs of products revenues should be reported in the income and services are net of returns and discounts.
EXPLANATORY NOTES ABOUT THE ASSETS
41 INTEGRATED REPORT 2016
INTANGIBLE FIXED ASSETS
DESDESCRIPTIONCRIPTION DEC 31, 2012016666 DEC 31, 2012015555 CHANGE
Intangibile fixed assets 118,195 127,454 (4,445)
TOTAL 118,195 127,454 (4,445)
The intangible fixed assets are recorded at - Trademarks at the rate of one tenth of costs historical costs and are presented net of considering the estimated period of utility. amortization, which is attributed directly to the - The industrial patents as one-third of the original individual items over years. costs. The costs are correlated to the utility over several We used the technique of direct attribution of the years and are amortized in relation to their decreasing relative costs in all cases without residual value as follows: creating a special fund. No financial charges - The software as one-fifth of the original costs. regarding these items were made during the reporting period.
42 INTEGRATED REPORT 2016
MOVEMENTS OF INTANGIBLE FIXED ASSETS PATENT RIGHTS AND INDUSTRIAL CONCESSIONS, TOTAL INTANGIBLE (((SUMMARY(SUMMARYSUMMARY)))) PROPERTY RIGHTS LICENSES, FIXED ASSETS BRANDS AND SIMILAR RIGHTS
VALUE AT THE BEGINNING OF THE REPORTING PERIOD
Costs 114,244 13,210 127,127,454454454454
Balance sheet value 114,244 13,210 127,127,454454454454
CHANGES DURING THE REPORTING PERIOD
Increase due to acquisitions 57,517 57,57,57,51757, 517517517
Amortization of the reporting period 64,837 1,939 66,66,66,77666, 776776776
Change (7.320) (1,939) (9,(9,(9,259)(9, 259)
VALUE AT THE END OF THE REPORTING PERIOD/ BALANCE SHEET VALUE
Costs 106,924 11,271 118,118,195195195195
PPPREVIOUSPREVIOUS REVALUATIONS, AMORTIZATION AND WRITEWRITE----DOWNSDOWNS (Reference article 2427, first paragraph, no. 2, of the Commercial Code)
Intangible assets have never been subject to write-downs and/ or revaluations.
TANGIBLE FIXED ASSETS
DESCRIPTION DEC 31, 2016 DEC 31, 2015 CHANGE
Tangible fixed assets 11,741,524 12,031,768 (290,244)
TOTAL 11,741,11,741,524524524524 12,031,12,031,768768768768 (290(290,,,,244)244)
MOVEMENTS OF TANGIBLE FIXED ASSETS Buildings 3.00% The depreciation is calculated based on the Generic plants and chemical plants 7.50% length of useful life of the asset and its use in the Various small equipment 40.00% production. The depreciations in the income Trucks and internal transport vehicles 20.00% General equipment 12.50% statement were calculated based on the expected Molds 40.00% use, the destination and the technical-economic Furniture, furnishings and office equipment 12.00% life of assets. We considered the criteria of Specific polyurethane plant and equipment 12.50% possible remaining utility, which are the same Rubber equipment 15.00% criteria as in the previous reporting periods : Rubber plants 10.00% Electrical equipment and office electronics 20.00% TR equipment 15.00%
TR systems 10.00%
43 INTEGRATED REPORT 2016
For assets entering into service in 2013 and 2014, buildings were not depreciated, as these have an with the exception of buildings and plants, it was unlimited life and are not subject of depreciation. necessary to proceed with a further accrual The depreciations are consistent with our calculated with the same percentages. practices applied in the previous years, taking into account the remaining useful life of assets. In cases where the remaining values of assets were lower than the values obtained by applying Given the structural changes of fiscal rules about the above rates, the residual amount was calculation of the depreciation that came into expensed. effect in the reporting period after December 12, 2007, the depreciation calculated and charged to The operating assets of moderate values (not the income was lower than the limit allowed for higher than EUR 516.46) were expensed entirely tax purposes. This lower value represents a in the given year because of their almost constant decrease of IRES taxable income with the repetition over time. The land and the underlying corresponding generation of deferred tax assets.
44 INTEGRATED REPORT 2016
BUILDINGS PLANTS AND INDUSTRIAL OTHER TANGIBLE ASSETS UNDER TOTAL AND LAND MACHINERY AND FIXED ASSETS DEVELOPMENTS TANGIBLE COMMERCIAL AND ADVANCES FIXED EQUIPMENT ASSETS
VALUE AT THE BEGINNING OF THE REPORTING PERIOD Costs 12,808,627 19,509,055 16,300,782 1,710,527 421,000 421,000 Revaluation 221,243 976,562 1,866 1,293,812 1,329,290
Depreciation 4,102,475 - (depreciation fund) 18,266,491 15,865,274 1,777,795 40,012,035
Balance sheet value 8,927,395 2,219,126 437,374 26,873 421,000 12,031,768
CHANGES
Increase due to 181,686 1,313, 013 1,196, 090 141, 124 620, 086 3,451, 999 acquisitions
Reclassifications (of 955,345 - 13,495 - 421,000 the balance sheet value)
Decrease due to disposals and 871,682 1,147,533 54,817 2,352,403 278,371 - divestments (of the balance sheet value)
Devaluation of the (1,052,030) 441,331 35,062 86,307 199,086 (290,244) reporting period
Total changes 181,686 1,313, 013 1,196, 090 141, 124 620, 086 3,451, 999
VALUE AT THE END OF THE REPORTING PERIOD
Costs 10,942,014 20,534, 365 16,533, 330 1,790, 423 620, 086 50,420, 218
Revaluation 220,845 908, 483 1, 866 94, 141 - 1,225, 335
Depreciation 3,287,494 18,782,391 16,062,760 1,771,384 - 39,904,029 (depreciation fund)
BALANCE SHEET 7,875,7,875,365365365365 2,660,2,660,457457457457 472,472,436436436436 113,113,180180180180 620,620,086086086086 11,741,11,741,524524524524 VALUE
45 INTEGRATED REPORT 2016
TOTOTOTALTO TAL REVALUATION OF TANGIBLE FIXED ASSETS AT THE ENDEND OF THE YEAR (Reference article 2427, first paragraph, no. 2, of the Commercial Code)
Tangible fixed assets were revalued according to present you a list of tangible assets in the the legal requirements without undertaking any statement of financial position as of December discretionary or voluntary write-ups. No financial 31, 2016. The revaluations were made in charges were claimed to these assets. According derogation of statutory criteria of the to the article 10 of the regulation no. 72/1983, we assessment.
REVALUATION REVALUATION REVALUATION REVALUATION ACCORDING TO ACCORDING TO ACCORDING TO ACCORDING TO DESCRIPTION TOTAL REVALUATION REGULATION REGULATION REGULATION REGULATION 72/1983 413/1991 342/2000 350/2003
Buildings and land 110,775 110,070 - - 220,845 556, 267 Plants and machinery 70,753 - 281,463 908,483 - Industrial and commercial equipment 1,866 - - 1,866 48, 959 Other assets 11,932 - 33,250 94,141
TOTAL 195,195,326326326326 11110,110,10,10,070070070070 605, 226226226 314,314,713713713713 1,225,1,225,335335335335
In the second column of the table above is shown In the third, fourth and fifth column are the the revaluation made in the reporting period of revaluations of the years 1991, 2000 and 2003 in 1983, according to the regulation no. 72/1983. accordance with the respective regulations no. The presented values are the difference between 413/1991, 342/2000 and 350/2003. The values the revaluation of historical costs of assets and increase the historical costs of individual assets. the revaluation of funds related to depreciation.
FINANCIAL LEASING OPERATIONS (((TENANT(TENANTTENANT))))
Our company has not used the option of financial 2427, first paragraph, no. 22, of the Commercial leasing. From that reason, we cannot provide Code. additional information according to the article GUARANTEES, COMMITMENTS, THIRD PARTY ASSETS of the reporting period, none of our assets was AND RISKS [G4[G4[G4-[G4 ---14]14]14]14] subject to property constraints.
We have never granted warranties or guarantees The potential risks are included in the of any kind to third parties. Moreover, at the end memorandum accounts and in the risk funds. There is no account for remote risks.
46 INTEGRATED REPORT 2016
MEMORANDUM ITEMS (Reference article 2427, first paragraph, no. 9, of the Commercial Code)
THIRD PARTY ASSETS
DESCRIPTION DEC 31, 2012012016201 666 DEC 31, 2012012015201 555 CHANGE
Third party assets 4,857,128 4,977,205 (12,077)
TOTAL 4,857,4,857,128128128128 4,977,4,977,205205205205 (120,(120,077)077)
Third party goods refer almost exclusively to the sole stamps, which are the property of our clients and are loaned to us. Their evaluation followed the estimated costs stated by the owner based on their technical properties. It should be noted that the market price of these items is much lower due to fast depreciation.
CURRENT ASSETS --- INVENTORIES
Inventories of raw materials, semi-finished - The finished products were evaluated based on products and finished goods are stated as the the relative costs of production. lower costs between the costs of purchase or - Various materials and consumables were manufacturing cost and the value of the evaluated at the acquisition costs. realization based on the market conditions. We applied the following evaluation methods: Given the trend in relative prices, only a fraction of the raw materials was evaluated at market - Raw materials were evaluated according to the value at closing date of the reporting period, since weighted average cost of purchases during the our principle of "weighted average of purchases reporting period. during the reporting period" has been applied. - The products in work progress were evaluated This mode of operation is prescribed by based on the costs incurred during the reporting applicable civil law, and is compliant with the year. related fiscal standards .
INVENTORIES BEGINNING OF THE CHANGES END OF THE REPORTING PERIOD REPORTING PERIOD
Raw materials 2,122,612 (36,652) 2,085,960
Semi-finished products and products in work progress 681,500 64,885 746,385
Finished products and goods 1,454,15 (291,271) 1,162,879
TOTAL INVENTORIES 4,258,4,258,262262262262 (263,(263,038)038) 3,995,3,995,224224224224
47 INTEGRATED REPORT 2016
CURRENT ASSETS --- RECEIVABLES
The statements show the estimated realizable value of receivables, decreased by the nominal value of provisions made to meet expected losses.
DESCRIPTION DEC 31, 2016 DEC 31, 2015 CHANGE
Receivables 16,735,769 15,340,706 156,332
TOTAL 16,735,16,735,769769769769 15,340,15,340,706706706706 156,156,332332332332
CHANGES OF RECEIVABLES VALUE AT THE CHANGE VALUVALUE E AT THE RATE DUE AT THE RATE DUE AFTER INCLUDED IN THE CURRENT BEGINNING OF THE END OF THE BEGINNING OF THE THE REPORTING ASSETS REPORTING PERIOD REPORTING REOIRTING PERIOD PERIOD PERIOD
Receivables 13,501,681 725, 027 14,226, 708 14,226, 708 -
Tax receivables 1,021,493 656, 056 1,677, 549 1,452, 046 225,503
Deferred taxes 480,939 (147, 009) 333, 930 -
Other receivables 336,593 160, 989 497, 582 497, 582 -
TOTAL 15,340,15,340,706706706706 1,395,1,395,063063 16,735,16,735,769769769769 16,176,16,176,336336336336 225,225,503503503503
TAX RECEIVABLES WITHIN 12 ABOVE 12 MONTHS MONTHS
Tax authorities C/ VAT receivable 264,010 -
Tax authorities C/ IRES receivable 736,101
Region Marche/ reimbursements from IRAP 61,240
Tax authorities C/ reimbursements from IRAP 11,858 -
Tax authorities C/ credit in compliance with the regulation no. 190/2014 266,086 -
Tax authorities for other tax credit 112,751 225,503
TOTAL 1,452,1,452,046046046046 225,503
Deferred taxes are related to the temporarily deductible differences. The analysis of this item can be found in the according section of these notes.
OTHER RECEIVABLES WITHIN 12 ABOVE 12 MONTHS MONTHS
Marche Region C/ Contributions 206,006 -
MISE C/ Contributions 230,263 -
INAIL receivables balance 8,147 -
Security deposits 22,491 -
Supplier discount and/ or receivables 12,332 -
Advances for suppliers for services 11,177 -
48 INTEGRATED REPORT 2016
Others 7,166
Total 497,497,582582582582
BREAKDOWN OF RECEIVABLES INCLUDED IN THE CURRENT ASSETS BY GEOGRGEOGRAPHICALAPHICAL AREA (Reference article 2427, first paragraph, no. 6, of the Commercial Code)
The breakdown of receivables as of December 31, 2016 by geographic area is shown in the following table:
EUROPEAN COUNTRIES GEOGRAPHICAL AREA ITALY UNION OUTSIDE THE DEVALUATION TOTAL (EU) EUEUEU
Receivables 12,427,217 575,434 1,359,835 (135,778) 14,226,708
Tax receivables 1,667,549 - - - 1,677,549
Deferred taxes 333,930 - - - 333,930
Other receivables 497,582 - - - 497,582
TOTAL RECEIVABLES INCLUDED IN THE 141414,14 ,,,936,278936,278 575,434 1,359,835 (135,778) 16,735,769 CURRENT ASSETS
RECEIVABLES INCLUDED IN THE CURRENT ASSETS RELATED TO TRANSACTIONS WITH OBLIGATION OF RETROCESSION
None of the receivables included in the current The nominal value of receivables based on their assets are related to transactions with obligation estimated realizable value was obtained through of retrocession. a specific provision for devaluation.
DESCRIPTION DEVALUATION DEVALUADEVALUATTTTIONION ACCORDING TOTAL ACCORDING TO THE TO THE ARTICLE 106 DPR ARTICLE 2426 917/917/1919191986868686
Balance at Dec 31, 2015 239,876 34,013 237,889
Use during the reporting period (140,598) (34,013) (36,500)
Financial provision 34,013 184,013
BALANCE AT DEC 3131,, 2015 99,278 36,500 135,778
In statements from December 31, 2016, there are an insurance policy to hedge the insolvency risk. receivables provisions (net of devaluation) No provisions for credit risk were made on the totaling EUR 14,226,708. The majority is used as insured amounts.
49 INTEGRATED REPORT 2016
CURRENT ASSETS --- CASH AND CASH EQUIVALENTS
The balance represents the availability of cash and cash equivalents at the end of the reporting period.
CHANGES OF CASH AND CASH VALUE AT THE BEGINNING CHANGE VALUE AT THE END OF TTHHHHEEEE EQVIVALENTS OF THE REPORTING PERIOD REPORTING PERIOD
Bank and postal deposits 12,230,164 (2,066,398) 10,163,766
Cash 3,772 1,294 5,066
TOTAL 12,233,936 (((2,065,104(2,065,1042,065,104)))) 10,168,832
ACCRUALS AND DEFERRALS IN ASSETS
They are determined based on the accrual period. delayed with respect to their quantitative and/ or For the determination of those, spreading over documentary demonstration. They disregard the several years, we verified the original conditions. date of payment of related income and expenses. At the end of the reporting period, there were no Accruals and deferrals measure income and accruals or deferrals with duration over five years. expenses, whose competence is advanced or
ACCRUALS AND DEFERRALS IN VALUE AT THE BEGINNING OF CHANGE VALUE AT THE END OF TTHHHHEEEE ASSETS THE REPORTING PERIOD REPORTING PERIOD
Various 63,833 (3,778) 60,045
TOTAL 63,833 (3,788) 60,045
The breakdown of this item at the end of the reporting period is as follows: (Reference article 2427, first paragraph, no. 7, of the Commercial Code)
DESCRIPTION VALUE Software support fees 2,711
Insurance premium 815
Advertising costs 56,135
Rented office equipment 3,722
Others 248
TOTAL 636363,63 ,,,833833833833
50 INTEGRATED REPORT 2016
EXPLANATORY NOTES ABOUT THE EQUITY AND LIABILITIES [[[G4[G4G4G4----13]13]13]13] (Reference article 2427, first paragraph, no. 4, 7, 7-bis, of the Commercial Code)
EQUITY
DESCRIPTION DEC 31, 2012012016201 666 DEC 31, 2015 CHANGE
Equity 29,648,680 28,959,707 688,973
TOTAL 29,648,29,648,680680680680 28,959,707 688,688,973973973973
CHANGES IN VALUE AT DESTINATION OF THE RESULT OTHER CHANGES RESULT VALUE AT THE SHAREHOLDERS' THE FROM THE PREVIOUS MADE END OF THE EQUITY BEGINNING REPORTING PERIOD DURING THE REPORTING OF THE REPORTING PERIOD REPORTING ALLOCATION OTHER INCREASES DECREASES PERIOD PERIOD OF DESTINATION DIVIDENDS
Share capital 5,000,000 - - - - 5,000,000
Revaluation reserve 399,225 - - - - 399,225
Legal reserve 1,000,000 - - - - 1,000,000
Other reserves Extraordinary reserve 13,879,825 1,750, 000 (450, 000) 3,830,655 - 15,510,480
Other reserves 4,850,002 - - 4,849,997
TOTAL OTHER 18,729,827 1,750,000 (450,000) 3,830,655 20,360,477 RESERVES
Profit (loss) of the 3,830,655 2,888,978 3,830,655 2,888,978 2,888,978 reporting period
TOTAL EQUITY 28,959,28,959,707707707707 1,750,1,750,000000 (450,(450,000)000) 6,719, 633 3,830,3,830,655655655655 2,888,2,888,978978978978 29,648,680
DETAILS REGARDING OTHER RESERVES VALUE
Reserve fund for tax suspension 2,850,000
Rounding difference 2
Others 2,000,000
TOTAL 4,4,4,850,0024, 850,002
51 INTEGRATED REPORT 2016
In the following table, you can find the equity (Reference article 2427, first paragraph, no. 7-bis, items by origin, possibilities of their use and of the Commercial Code) distribution, as well as the use during the previous three years.
AVAILABILITY AND USE OF EQUITY VALUE POSSIBILITIES OF VALUE SUMMARY OF USE IN USE AVAILABLE THE PREVIOUS 3 YEARS
Share capital 5,000,000 B
Share premium reserve A, B
Revaluation reserve 399,225 A, B
Legal reserve 1,000,000
Other reserves Extraordinary reserve 15,510,480 A, B, C,D 15,510,480 3,100,000
Various other reserves 4,849,997 2,513,893 3,100,000
TOTAL OTHER RESERVES 202020,20 ,,,360,477360,477 18,024,373 3,100,000
Retained earnings
TOTAL 18,024,373 3,100,000
REMAINING VALUE FOR DISTRIBUTION 18,024,373 3,100,000
Possibilities of use: A:A:A: capital increase; B:B:B: loss coverage; CCC:C::: shareholders.
ORIGIN, POSSIBILITIES OF USE AND DISTRIBUTABILITY OF VARIOUS OTHER VALUE RESERVES
Reserve fund for tax suspension 2,336,107
Rounding difference (3)
Others 2,513,893
TOTAL 4,4,4,849,9974, 849,997
BREAKDBREAKDOWNOWN OF THE REVALUATION RESERVES: distribution (according to regulation no. 350/ The revaluation reserves with the value of EUR 2003). 399,225 form a part of taxable income in case of
52 INTEGRATED REPORT 2016
BREAKDOWN OF OTHER RESERVES RESERVES INCORPORATED IN THE SHARE CAPITAL
The value of EUR 2.513.893 is a part of earned Reserves or other funds, which independently profits from the years 2013 and 2014 (this reserve from the date of formation form a part of the is formed according to the regulation no. 78/ taxable income, increase the share capital in case 2010, article 42, second paragraph). When the of distribution. The use of these reserves depends related tax breaks are overdue, these reserves are on the decision made by shareholders during an normally a subject of taxation. In the case of use, extraordinary meeting. they are not a part of the taxable income.
RRRESERVESRESERVES DDDATEDATE OF VALUE RESOLUTION
Equalization monetary reserve according to regulation 72/1983 July 25, 1986 295,993
Revaluation reserve according to regulation 413/1991 Oct 13, 2001 92,793
Revaluation reserve according to regulation 342/2000 Oct 13, 2001 930,932
VAT deduction fund according to regulation 675/1977 Oct 13, 2001 2,670
VAT deduction fund according to regulation 526/1982 Oct 13, 2001 8,975
VAT deduction fund according to regulation 130/1983 Oct 13, 2001 24,913
Contribution reserve according to regulation 696/1983 Oct 13, 2001 21,949
Contribution reserve according to regulation 399/1987 Oct 13, 2001 30,664
TOTAL 111,1,,,408408408408,,,,889889889889
PROVISIONS FOR RISKS
PROVISIONS FOR RISKS FUND FOR TREATMENT OF PENSIONS TOTAL AND SIMILAR OBLIGATIONS
Value at the beginning of the reporting period 254,024 254,024
Changes: Provision made during the reporting 14,019 14,019 period Use during the reporting period
Other changes
TOTAL CHANGES 14,019 14,019
VALUE AT THE END OF THE REPORTING PERIOD 268,043 268,043
They are set aside to cover certain or probable Consequently, we did not created any provisions losses or liabilities whose amount could not be without economic justification of the risk. determined at the end of the reporting period. This item includes only the funds for customer We applied the general criteria of prudence and indemnities, based on the contracts. The increase competence in the evaluation of these items. relates to the amounts payable during the
53 INTEGRATED REPORT 2016
reporting period.
SEVERENCE INDEMNITIES FOR THE EMPLOYEES (Reference article 2427, first paragraph, no. 4, of the Commercial Code)
SEVERENCE INDEMNITIES FOR THE EMPLOYEES VALUE
Value at the beginning of the reporting period 1,400,368
Changes: Provision made during the reporting period 18,660
Use during the reporting period 155,216
TOTAL CHANGES (136(136,,,,556556556556))))
VALUE AT THE END OF THE REPORTING PERIOD 111,1,,,263263263263,,,,812812812812
Severance indemnities represent liabilities The amount corresponds with the total towards employees in compliance with the law indemnities accrued at the end of the reporting and the current employment contracts, period, net of advances paid and net of the value considering any form of remuneration with a allocated to fund for complementary securities continuous character. and INPS treasury fund. It is equal to the amount, which would have been paid to the employees in case of termination of employment on that date.
LIABILITIES AND CHANGES
The liabilities are valued at their nominal value, (Reference article 2427, first paragraph, no. 6, of modified in case of returns or invoice the Commercial Code) adjustments.
54 INTEGRATED REPORT 2016
LIABILITIES BEGINNING OF THE CHANGES END OF THE REPORTING VALUE DUE REPORTING PERIOD PERIOD AFTER THE REPORTING PERIOD
Unearned income 17,129 (17,078) 51 51
Supplier payables 10,324,040 (1,220,669) 9,103,371 9,103,371
Tax payables 709,615 (400,232) 309,383 309,383
Social security payables 1,013,835 (219,645) 794,190 794,190
Other liabilities 1,377,241 54,818 1,432,059 1,432,059
TOTAL 131313,13 ,,,441,860441,860 (1,802,806) 11,639,054 11,639,054
Unearned income includes advances from Supplier payables are calculated without customers for supplies, which still need to be commercial discounts. On the other hand, made. Tax payables include only liabilities for discounts made by our company are recognized certain taxes. They refer to the values of excise at the time of payment. The nominal value of tax, IRES and IRAP. The item “other liabilities” these payables was adjusted in case of returns or refers almost exclusively to the payables by rebates (invoice adjustments) to the extent employees, due in the following year. defined by the counterparty.
BREAKDOWN OF LIABILITIES BY GEOGRAPHICAL AREA (Reference article 2427, first paragraph, no. 6, of the Commercial Code)
GEOGRAPHICAL AREA ITALY EU COUNTRIES TOTAL COUNTRIES OUTSIDE EU
Unearned income 51 515151
Supplier payables 8,633,069 387,747 82,555 9,103,371
Tax payables 309,383 309,383
Social security payables 794,190 794,190
Other liabilities 1,432,059 1,432,059
LIABILITIES 111111,11 ,,,168168168168,,,,752752752752 416416416,416 ,,,658658658658 82,555 1111,639,05411,639,054
LIABILITIES BACKED BY THE GUARANTEE OF OUR None of the liabilities in the financial statements ASSETS (Reference article 2427, first paragraph, no. 6, is related to the obligation of retrocession. of the Commercial Code) COCOCOMCO MMMMITTMENTSMITTMENTS NOT INCLUDED IN THE STATEMENT None of the liabilities in the financial statements OF FINANCIAL POSITION AND THE MEMORANDUM is backed by the guarantee of our assets. ITEMS (Reference article 2427, first paragraph, no. 22- ter, of the Commercial Code) LIABILITIES RELATED TO THE OBLIGATION OF RETROCESSION
55 INTEGRATED REPORT 2016
We do not have any commitments that are not included in the statement of financial position and the memorandum items.
EEEXEXXXPLANATORYPLANATORY NOTES ABOUT THE INCOME STATEMENT
PRODUCTION VALUE DEC 31, 2016 DEC 31, 2015 CHANGE
Production value 42,705,581 42,102,867 602,714
TOTAL 42,705,581 42,102,42,102,867867867867 602,714
DESCRIPTION DEC 31, 2016 DEC 31, 2015 CHANGE
Sales revenues 41,696,881 41,148,117 548,764
Inventory changes (226,386) 336,457 (562,843)
Other income 1,235,086 618,209 616,793
TOTAL 42,705,581 42,102,783 602,714
REVENUE RECOGNITION
The revenues from sold goods are recognized at services are recognized following the temporal the moment of property transfer, which normally accrual. In the table below are presented the coincides with the shipping. Revenues of financial sales revenues by category. nature and those obtained from provision of CATEGORY 2012012016201 666
Sales of goods 321,510
Sales of products 41,375,371
TOTAL 414141,41 ,,,696696696696,,,,881881881881
GEOGRAPHIC AREA 2012012016201 666 Italy 32,215,862 European Union countries (excluding Italy) 3,312,433
Countries outside the European Union 6,168,586
TOTAL 414141,41 ,,,696696696696,,,,881881881881
The revenues partition by sector is irrelevant The grants included in the operating expenses since we produce and sell products that fall sheet are related mainly to research and almost exclusively in one category. The recorded development activities carried out during the variation is connected to our performance and to fiscal year. the factors presented in the management report.
56 INTEGRATED REPORT 2016
PRODUCTION COSTS
Details on production costs and respective changes compared to the previous year:
DESCRIPTION DEC 31, 2016 DEC 31, 2015 CHANGES Costs of raw materials, supplies and materials for consumption 16,867,991 17,700,236 (832,245) Costs of services 8,116,931 7,030,459 1,086,472 Costs of use of third party goods 1,086 2,227 (1,141) Wages and salaries 7,288,925 6,818,530 470,395 Social security costs 2,396,580 2,204,032 192,548 Severance payments 399,437 394,371 5,066 Other personnel costs 174,884 137,020 37,864 Amortization of intangible assets 66,776 68,517 (1,741)
Depreciation of tangible assets 2,352,403 2,266,680 85,723 Write-downs of account receivables included in the current 36,500 184,013 (147,513) assets and write-downs of cash Changes in inventories of raw materials, supplies and materials 36,652 143,485 (106,833) for consumption Provisions for risks 14,019 13,667 352 Other operating charges 1,163,667 171,695 991,972 TOTAL 38,915,38,915,851851851851 37,134,932 1.780.919
COSTS OF RAW MATERIALS, SUPPLIES AND MATERIALS PROVISIONS FOR RISKS FOR CONSUMPTION This item serves as a safety accrual for the The data is strictly correlated to the issues protection against customers’ insolvency. presented in the management report. AMMORTIZATION AND DEPRECIATION OF TANGIBLE COSTS OF USE OF THIRD PARTY GOODS AND INTANGIBLE ASSETS
This item corresponds mainly to car rental fees See the sections related to tangible and intangible and other equipment used in the production. assets.
PERSONNEL COSTS DEPRECIATION OF RECEIVABLES INCLUDED IN CURRENT ASSETS AND OF CASH AND CASH EQUIVALENTS Personnel costs include every expenditure ASSETS AND OF CASH AND CASH EQUIVALENTS related to our employees such as bonuses, cost of Account receivables (excluding those covered by untaken holidays, cost of living adjustments, the insurance) were given an estimated risk merit increases, legal provisions, collective coefficient of 0.50%, for a total of EUR 36,500. agreements and cost of temporary employment. Moreover, an additional sum equal to EUR OTHER OPERATING CHARGES 174,611 has been set aside to tackle expected This item represents a residual item of the losses. operating management report. Negative income Our management is confident that the safety results that do not fall into any specific category stock is sufficient to tackle insolvency issues. are placed here.
57 INTEGRATED REPORT 2016
FINANCIAL INCOME AND EXPENSES
FINANCIAL INCOME AND DEC 31, 2016 DEC 31, 2015 CHANGE EXPENSES
Financial income and expenses 69,837 194,074 (124.237)
TOTAL 69,837 194,074 (((124.237(124.237124.237))))
PARTITION OF INTERESTS AND OTHER FINANCIAL INCOME ANDAND EXPENSES BY TYPE (Reference article 2427, first paragraph, no. 12, of the Commercial Code)
INTERESTS AND PARENT SUBSIDIARIES AFFILIATED OTHERS TOTAL OTHER FINANCIAL COMPANIES COMPANIES EXPENSES
Bank interests 59,379 59,379
Other expenses from 59,379 59,379 financial transactions
TOTAL 59,379 59,379
FINANCIAL INCOME DEC 31, 2016 DEC 31, 2015 CHANGE
Other financial income (bank interests) 59,379 189,380 (130,001)
Other financial expenses 10,458 (3,439) 3,439
Profits and losses from exchange 69,837 8,133 2,325
TOTAL 69,69,69,83769, 837837837 194,194,074074074074 (124,(124,237)237)
OTHER PARENT SUBSIDIARIES AFFILIATED OTHERS TOTAL FINANCIAL COMPANIES COMPANIES INCOME
Bank interests 59,379 59,379
Others
TOTALI 59,379 59,379
58 INTEGRATED REPORT 2016
FOREIGN CURRENCY CONVERSION CRITERIA
In the financial statements there are two items No significant differences of exchange rates were originally expressed in foreign currency: a debt to observed in the period between the closure of the a foreign supplier and a bank account. fiscal year and the writing of the financial statements. Both items have been updated to the current exchange rates at the time of writing of the financial statements.
EXTRAORDINARY INCOME Nature AND EXPENSES
Extraordinary income and expenses 955,344 Industrial Demolition Minusvalue
TOTAL 955,955,344344344344
INCOME TAXES: CUCURRENT,RRENT, DEFERRED AND ANTICIPATED
The taxes are calculated following the accrual - The amount of taxes deferred or paid in principle and consist of: advance with respect to temporary differences arising or canceled during the - The amount of taxes paid or payable for the same fiscal year. year, determined in accordance with the rates and regulations in force.
TAXES DEC 31, 2016 DEC 31, 2015 CHANGE
Current taxes 823,580 1,382,887 1,382,887
IRES 611,618 1,109,685 1,109,685
IRAP 211,962 273,202 273,202
Defferred taxes (anticipated) 147,009 (51,533) (51,533)
IRES 147,009 (51,533) (51,533)
TOTAL 970,970,589589589589 1,331,1,331,354354354354 (360,(360,765)765)
59 INTEGRATED REPORT 2016
The decrease in the percentage of taxes over the 2016 (in compliance with the article no. 8 of previous year was mainly due to application of the the regulation 91/ 2004) . following rules, issued to encourage business - Benefits foreseen by the Stability Law 2016, investments: which allowed an increase of depreciation on - Benefits related to the purchases of certain new equipment acquired after October 15, types of new operating assets before June 30, 2016, for fiscal reasons.
DEFERREDDEFERRED//// ANTICIPATED TAXATION
Given that there is no deferred tax in compliance temporary differences are deductible). with the article 2427, first paragraph, no. 14, of - The main temporary differences that led to the Commercial Code, we would like to share with recognition of deferred taxes were the you the following information: provisions made over years solely for statutory - The anticipated taxes were calculated using purposes, for agents’ indemnities, for alleged the general allocation criteria, considering the credit losses and higher depreciation cumulative amount of all temporary (respecting the fiscally allowed items). differences and the IRES and IRAP tax rates - The sum of deferred taxes formed in 2016 (presumably in force in years, when these and the use of those formed in previous years differences will be deducted). was inserted in the income statement with the value of EUR 147,009. The balance at - The anticipated taxes have not been identified December 31, 2016 was recorded in the since it is reasonably certain that the taxable statement of financial position under the income will not be lower than the differences heading "Deferred taxes above 12 months. that will be deducted (in the years in which the
SIGNIFICANT EVENTS AFTER THE CLOSURE OF THE FIFISCALSCAL YEAR There are no important events to report. The year 2016, we finished the installation of two- turnover in the first three months of the year color presses for rubber gum. We also finished grew by about 10% compared to the reporting the construction of a new thermal power plant period. The increase results from the production and we put into use the first prototype of a of more expensive items. In the beginning of the robotic coating plant.
60 INTEGRATED REPORT 2016
ADDITIONAL INFORMATION
EMPLOYMENT [G4[G4[G4-[G4 ---9]9]9]9] [G4[G4[G4-[G4 ---11]11]11]11]
REMUNERATION OF DIRECTORS AND AUDITORS REMUNERATION OF DIRECTORS AND AUDITORS (Reference article 2427, first paragraph, no. 16, of the Commercial Code)
COMPENSATION FOR REVISION (Reference article 2427, first paragraph, no. 16-bis, of the Commercial Code)
The legal revision of the accounts is attributed to our board of statutory auditors.
CATEGORY OF SHARES ISSUED BY THE COMPANY [G4[G4[G4-[G4 ---13]13]13]13]
At the time of the writing of the report, the share capital amounted for 5,000,000 of ordinary shares with the nominal value of EUR 1. There have been no changes of this value during the reporting period.
MANAGEMENT AND COORDINATION ACTIVITIES OF THE COMPCOMPANYANY [G4[G4[G4-[G4 ---17]17]17]17]
We are not part of any group of companies and do not manage or coordinate any third parties.
INFORMATION RELATED TO AFFILIATED COMPANIES (Reference article 2427, first paragraph, no. 22-bis, of the Commercial Code) [G4[G4[G4-[G4 ---17]17]17]17]
We do not have any affiliated companies.
INFORMATION CONCERNING THE FINANCIAL INSTRUMENTS ISSUED BY THE COMPANY (Reference article 2427, first paragraph, no. 19, of the Commercial Code)
We did not issue financial instruments, nor did we use financial instruments for hedging or speculative purposes.
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040404
Sustainability Report
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LEADING BY EXAMPLE [G4[G4[G4-[G4 ---2]2]2]2] [G4[G4[G4-[G4 ---11112]2]2]2]
OUR SUSTAINABLE BUSINESS JOURNEY
This year we celebrate 12 years five main categories: employees, research and 11121222 since sustainability has become an development, environment, supply chain and important part of our business community. Responsible for monitoring of our model. As part of global supply chains, we realize socio-environmental issues and identification of the importance of responsible decisions projects and initiatives is Raffaella Gibellieri. She concerning environment, people and the whole reports directly to the sole administrator and the community. We conduct ongoing research and general manager. The latter acts as our supervisor try to implement more sustainable practices in of corporate social responsibility and ensures our sourcing and manufacturing processes. Our consistency over time. sustainability activities in 2016 can be divided into
ACHIEVEMENTS [G4[G4[G4 ---DMA ]]] Over forty years of Eurosuole’s existence, we have substantially improved our production processes in regard to the eco-friendliness and sustainability of -our practices. Among our major achievements obtained during years in the field of sustainability and safety there are:
- ISO 14001 Certification; - Recognition by Asur, Inail and Confindustria for a safe work environment; - Construction of a trigeneration plant contributing to energy efficiency; - Introduction of a sole cleaning process on water basis eliminating dangerous chemicals; RAFFAELLA GIBELLIERI [G4[G4[G4-[G4 ---34343434]]]] - Implementation of a policy assuring that each sole produced is free from carcinogenic, Chief Sustainability Officer mutagenic and teratogenic substances; - Various initiatives and activities supporting our She started to follow projects and initiatives employees and community. related to environmental issues in 2010. As the
company increased the interest in sustainable We are currently working on several projects with practices, Raffaella was named the Chief the objective to develop more sustainable soles Sustainability Officer. Since then, she attends such as soles from recycled materials. Moreover, we want to increase the consistency of our reporting courses to improve her competencies in the field. practices with international standards. From 2015, we prepare the integrated report in compliance with the GRI G4 guidelines.
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MATERIAL ISSUES IN THIS CHAPTER
• OCCUPATIONAL HEALTH & SAFETY • WORKWORK----LIFELIFE BALANCE [G4[G4[G4-[G4 ---DMA]DMA] [G4[G4[G4-[G4 ---LA12]LA12] EMPLOYEES • SKILLS DEVELOPMENT
We are aware that our activity efficacy closely links to the loyalty and trust that our employees feel for the company. Although our company is a medium size one, we were able to create a familiar atmosphere in which confront, mutual confidence and awareness of each worker’s competence to hold its task coexist. Many of our employees that have a management role, before holding that role, made the same job of their current submitted. Therefore, they exactly know what usually happen in that department, as they were in the same position in the past. When we hire through job agencies, we assure that standards used in their selection are the same we follow. We keep investing in our people to assure they enhance their capabilities and expend them for the company’ success. We realize that investment into development of skills and training are the key to success in the competitive environment of our sector. Regular training and information materials aim to improve skills of our employees and to gain state-of-the-art knowledge.
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Our employees, and to an important degree their families, are understandably the stakeholders who are interested in a good relationship with the company the most. Our strategy has therefore a strong focus on well-being of our people.People in leading positions contribute to an open and fair atmosphere where employees work together and support each other. Twenty years ago, we have adopted a second-level bargaining, which rewards people for coming to work and for their achievements of previously set objectives. Our incentive system provides additional stimuli, especially in times of the year demanding in terms of personal expenses (e.g. during the Christmas holidays) and gives the employees further support, not necessarily in economic terms. We take the well-being of our people seriously and did not cut any social services. We offer voluntarily certain complimentary services to enhance the work-life balance of our employees. Our system of incentives has been proved efficient so far. It encouraged employees to limit absenteeism and to direct their efforts towards the realization of the company mission. We try to create and maintain a friendly work environment in every department of our company. We support collaboration and cooperation among our employees because we are convinced that “strength is in numbers” and that sharing of ideas, reflection and constructive approach to criticism helps reach the goals with satisfaction for all.
WE KEEP A FRIENDLY AND PLEASANT WORKING ENVIRONMENT
The main initiatives for our employees took in 2016 were in the following areas:
WORWORKKKK----LIFELIFE BALANCE FAMILY SUPPORT
SAFETY SKILLS DEVELOPMENT
HEALTH CARE INTERNAL COMMUNICATION
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FIGURES [G4[G4[G4-[G4 ---9]9]9]9] [G4[G4[G4-[G4 ---10]10]10]10] [G4[G4[G4-[G4 ---LA1]LA1] [G4[G4[G4-[G4 ---LA3]LA3] [G4[G4[G4-[G4 ---LA9]LA9] [G4[G4[G4-[G4 ---LA12]LA12]
A summary of the data related to our employees can be seen in the table below. It cannot be claimed that a substantial part of the organization’s work is performed by workers who are legally recognized as self- employed.
EMPLOYEES (including temporary employees) 2016 2015 2014 AVERAGE Employees with a temporary contract 69 42 37 LENGTH OF Employees with a permanent contract (of these part-time) 186 181 174 (2) SERVICE TOTAL 255255255 223223223 211211211
Average age 41 43.41 43.28 11,42 YEARS Average time of employment in Eurosuole in years 11.42 13.56 14.17
Percentage of employees with disabilities 3.53% 4.04% 3.32% Average hours of training per year per employee 4.90 3.24 3.42
EMPLOYEES BY CONTRACT TYPE 2016 EMPLOYEES BY CONTRACT TYPE 2015
Temporary contract 27% Temporary contract Permanent contract 18.83% 73% Permanent contract 81.17%
In 2016, we increased the total number of As you can see in the table above, the average employees, including the temporary employees, time of employment in our company stayed high to 255*. Comparing to the previous year, the (11.42 years), even if it decreased, due to the number of employees with a temporary contract young workers hired. We consider long seniority increased. Nonetheless, the permanent ones keep an advantage, as it allows us to get to know the being more than double of the temporary ones. qualities of each employee, find the most suitable position and additional training for everyone and The average age of the employees went quietly create a familiar and personal work atmosphere. down to 41 years compared to the previous year. This is a consequence of the hiring of new employees under 25 years old. The percentage of employees in that age group more than doubled (16% corresponding to 41 employees) compared to 2015 (6.73).
*number of employees at 31 th December 2016
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EMPLOYEES BY AGE 2016
<25 16% 25-35 16% 36-45 28% 46-55 27% ≥56 13%
GENDER BALANCE [G4[G4[G4-[G4 ---10]10]10]10] [G4[G4[G4-[G4 ---LA1]LA1] [[[G4[G4G4G4----DMA]DMA] [G4[G4----LA12]LA12] EMPLOYEES BY GENDER 2016 (%) As we mentioned before, we are against any form of discrimination at the workplace and make our best to give everyone the same opportunities. 216216216 85%
In 2016, we employed 39 women and 216 men. 184184184 The percentage of female employees did not 393939 15% increase compared to the last year. The reason of that imbalance is linked to our activity: for the blue collar position, that covers the biggest part of our employees, we received more applications from men than from women. We think it is because our factory works 24h and EMPLOYEES BY GENDER AND LEVEL 2016 (%) therefore make nocturnal switch, while women prefers working on day hours, especially the ones with children. Production is the department where most of the new hires were made. 66.67% 72% 87% On the other hand, we increased the number of young employees in our team, as you can see in the graphics above. Thus, we gave chances 33.33% 28% to people with less professional experience and 13% consequently more difficulties to find a job. Management (3) White Collar (29) Blue Collar (223) We realize the need for equal opportunities between men and women and pay particular attention to ensure equal growth possibilities WE ASSURE EQUAL PAY FOR MEN AND and remuneration. WOMEN [G4G4G4-G4 ---LA13]LA13]
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DIVERSITY IN THE WORKPLACE [G4[G4[G4-[G4 ---DMA]DMA] [G4[G4[G4-[G4 ---10]10] [G4[G4[G4-[G4 ---LA12]LA12] IN 2016 100% OF MUMS CAME BACK TO WORK AFTER MATERNITY LEAVE [G4[G4[G4-[G4 ---LA3]LA3]
Particular attention concerning human resources is paid to valorize diversity. We treat all our employees with respect and support equal opportunities.
The question of integration and equal opportunities is a very current topic considering the migration situation in Europe. We are aware that the overall employment situation in Italy is difficult and the Italian citizens themselves have troubles finding a job. However, we also recognize the need to give everyone equal opportunities and chance for a life in dignity.
We have pursued a policy of non-discrimination since the beginning of our business activities. As you can see in the table below, our team is very international considering the size of our company. Thanks to the respectful behavior among the employees and the management, we have created a very friendly work environment where people feel almost like a family. EMPLOYEES BY COUNTRY OF 31 December 2012012016201 666 ORIGIN We believe that valorizing diversity, age, gender, Albania 1 culture and disability brings advantages for the
Argentina 3 overall work atmosphere and serves as a good example for other companies. Australia 1 Bangladesh 2 In comparison with 2015, staff (at 31 December Bosnia and Herzegovina 1 2016) increased of 32 people, and is composed in [[[G4G4G4-G4 ---9]9] [G4[G4[G4-[G4 ---11]11]11]11] Canada 1 the following way
Dominican Republic 1 India 11
Italy 180 LEVEL NUMNUMBERBERBERBER at 313131 ststst Kosovo 1 December Morocco 5 Directors 2 Moldovia 1 Managers 2 White collars 30 Nigeria 1 Blue collars 221 Pakistan 21 TOTAL 255255255 Poland 1
Romania 2
Senegal 22 TOTAL 255255255
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PEOPLE CARE [G4[G4[G4-[G4 ---LA2]LA2] [G4[G4----LA8]LA8]
We believe that attention, respect for and In addition to the national collective agreement support of our employees is crucial for the CCNL, we have a company agreement creating economic and social sustainability of our additional benefits for all the employees. (Note: company. We therefore promote initiatives all employees are covered by collective directed at work-life balance, health and family bargaining agreements on national level). [G4[G4[G4-[G4 ---11111111]]]] care. All our employees, without distinction about That second level bargaining agreement include type of contract, enjoy the same benefits. the following:
WORK ENGAGEMENT An internal communication process that involves employees in the main company issues.
The bonus is awarded according to the collective and individual productivity increase. It is divided into two components: the first is linked to sales and the second to the precision, for a total amount of euro 880. In the In the calculation of the annual working PERFORMANCE BONUS [G4[G4[G4-[G4 ---DMA]DMA] hours, the following are included: - Regular working hours; - Time spent for donating blood; - TimTimTimeTim e spent for donating bone marrowmarrow;;;; - Absence due to work accidents not caused by the negligence of employees (the commuting accidents are thus excluded); - Obligatory maternity; - Hours or days of absence for people with disabilities according to the regulation 104/ 1992; - Hours of absence due to union meetings.
TRAINING A permanent room for training all the employees.
WELFARE A company welfare program (please find the details in the paragraph “Health”).
The increase for workdworkdayay overtime is greater than thethe one foreseen by the sector labor agreement.
FLEXIBILITY Day and night shifts 7 days a week, in order to improve the efficiency of production processes, reduce discontinuity in plant utilization and ensure the carrying out of technological research and innovation and training programs. The increase for the night shift is at 30% instead of 28% as provided by the industry contract.
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WORWORKKKK----LIFELIFE BALANCE [G4[G4[G4-[G4 ---15]15]15]15]
Our workers bring with them a huge capital potential benefits, for both the workers and the representing knowledge, competences and skills organization, obtained thanks to the balancing from which depends a big part of the company’ between professional life and private life. success. Therefore, we are very attentive to the Questionnaires gave us the opportunity to reach, individual, psichological and social features. We in a minute way, each worker and their answers direct our work with sensibility to personal and let us to get an overview on our company’s reality. relational aspects and consequently, to the On the other hand, the collection of data was very impact of these elements on the organisation. useful for the academic world to better understand the topic. To this end, we supported a research which involved all our employees. That research has ANALISED SAMPLE : figures has been been executed by Daniele TramannoniTramannoni, graduand collected through the distribution of an in Job Psichology at University of Padua and pre- anonymous and individual questionnaire lauream intern by Eurosuole. composed by 136 items belonging to specific scales obtained from relevant scientific literature. OBJETIVE OF THE PROJECT : The goal of that The sample selected for the research was research is analyzing the work-family conflict 4 and composite and made in the following way: its dimensions, with the aim to discover the
GENDER : Man, 75 % ; Woman 25 %
AGEAGE: < 30 20 % ; 30-50 57% ; > 50 23%
CHILDRENCHILDREN: Yes 56 %; No 44 %
JOB POSITIONPOSITION: Administrative 4%
Production 88%
Marketing 8 %
In the project, the following variables has been taken into consideration:
• ORGANIZATIONAL CLIMATECLIMATE, explained through the following 5 dimensions:
- Cohesion;
- Clearness of tasks;
- Communication;
- Professional growth;
4 The work-family interface can be defined as a set of processes by quantitatively and qualitatively influenced by requests and which the functioning and behavior of individuals in a domain is resources coming from another domain.
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- Autonomy;
Don't know «Do you think Eurosuole take Few 6 % 1% No into big consideration the
6% company safety?
Yes- Enough 87%
•LOADLOAD divided in:
- job demand;
- cognitive load;
- emotional charge
•SUPPORTSUPPORT classified as: Agree Disagree - from superiors;
- from colleagues 20% «Am I willing to engage more than I need to contribute to the company's success?»
80% • WORKWORK----FAMILYFAMILY CULTURE
-tangibile aspect (i.e. use of protective helmets)
-intangibile aspect (i.e. informal or formal speaking) average= 4,28 on 6
•WORKWORK ENGAGMENT
•COMMITMENTCOMMITMENT (bond between worker and company)
-affective 5
5 It refers to a strong emotional attachment of the employee to the organization, and to the work that he does. The employee most likely identify with the organization's goals and values, and genuinely want to be there.
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-normative 6
- continuance 7 « I'm always ready to give a hand to
those around me» • ORGANISATIONAL CITIZENSHIP BEHAVIOUR (OCB) ::: M= 4.15 - Altruism; “I help the new colleagues to orient - Compliance even if not required by the company” M= 4.19
•SATISFACTION:SATISFACTION:
- with the job
- with private life
- with the balance between the two dimensions
CONCLUSIONS:
The research shows interesting results. Job demand and cognitive load are perceived as high, referring to a job needing high concentration, care and precision. Nonetheless, employees see their manager and colleagues very attentive to their familiar needs and feel they can count on them in case of family issues.
Regarding the balance between the two domains (family and work), employees feel they are able to face both familiar needs and job requirements.
In addition, the analyzed sample shows a very high work engagement and commitment. It means that there is a strong bond, both affective and normative, between them and the company. Finally, scores clearly confirms that altruism is high, and positive feelings prevails on the negative ones.
[G4-[G4 -DMA]DMA] [G4-[G4 -LA6]LA6] SAFETY [G4[G4 --DMA] [G4 --LA6]
Our corporate culture includes safety as a top security systems with sensors both lateral and on priority since the beginning. We are regularly top to avoid any crushing or entrapment. taking preventive measures to improve health Together with protecting our workers, customers, and safety on our workplaces. To give some environment and society, our security and safety example, the risk related to the contact with raw management ensures the compliance with materials not accepted in the rubber soles national and European regulations 8. production was eliminated 5 years ago, while during this year, we added on machineries Confindustria, Asur and Inail have recognized our commitment to safety and training. In 2010, those entities have presented Eurosuole as a best
6 It refers to a sense of obligation to the organization, even if the employee is unhappy in his role. He feels that he should stay with the organization, because it's the right thing to do. 7 It occurs when the employee feels to stay at the company, because the loss he would experience by leaving it is greater than the benefit he think he might gain in a new role. 8 The training for safety at the workplace is mandatory since 2012 due to D.lgs 81/2008 and “Accordo Stato Regioni” of 21/12/2011 and 07/07/2016.
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practice example in a video-documentary measures for dealing with that chemical—or a dedicated to safety in the workplace. product containing that chemical—in the event of an accident. The SDS are available electronically
CONFINDUSTRIA, ASUR AND INAIL HAVE to all the employees using those products RECOGNIZED OUR COMMITMENT TO through a specific corporate program. We SAFETY AND TRAINING IN 2010 promptly update each SDS as soon as suppliers provide us the specific product review. The very low number of work-related injuries and a low absence from work proves that Eurosuole TRAINING SESSIONS ON SAFETY IN THE has a very sensitive and careful approach to the WORKPLACE issues of safety. Informing is not enough to prevent injuries. Training, and therefore involving actively
NONONO OCCUPATIONAL DESEASES OCCURED IN employees is a step forward. This is why we find 40 YEARS courses on safety fundamental. Employees become aware of the safety rules and this let them minimize the risks of accidents or problems in the production, most of the time due to staff negligence.
The training courses covers various topics, for example how to suitably use the personal protective equipment (PPE), how to evacuate from a fire, how to move weights (manual SAFETY DATA SHEETS handling). In accordance with the Regulation 1272/2008/CE, No one accident requiring sick leave has occurred each substance/mixture we buy, classified as a in 2016. Securing the work environment has also “hazardous product” , must be enclosed to its contributed to the reduction of so-called Safety Data Sheet (SDS). It is a document formed “indirect” accidents and occupational diseases by 16 points which describes the properties of a (e.g. due to the continuous exposure to certain chemical substance as well as emergency harmful substances).
[G4-[G4 -LA6LA6]] ACCIDENTS AND ABSEENTEISM [G4[G4 --LA6LA6 ]] 2016 2015 2014
Number of accidents at work 0 0 0
Number of commuting accidents 0 3 1
Days of absence due to accidents at work 0 0 0
Days of absence due to commuting accidents 0 31 6
Frequency rate for accidents at work * 0 0 0
Frequency rate for commuting accidents * 0 6.91 2.43
Severity index for accidents at work ** 0 0 0
Severity index for commuting accidents ** 0 0.02 0.01
Work hours per employee 1,940 1,947 1,950
Total working hours per year 465,809 434,171 411,565
Average hours of illness per employee (white collar/ blue collar) 41.51/41.82 9.45/ 41.95 4.90/ 36.30
Absenteeism rate due to illness (white collar/ blue collar) in % 2.09/2.10 0.51/ 2.09 0.26/ 1.96
Average accident hours per employee (white collar/ blue collar) 0 0/ 130 0/ 0.23
Absenteeism rate due to accident (white collar/ blue collar) in % 0 0/ 0.06 0/ 0.01
* the number of accidents per million hours worked ** the number of conventional working days lost due to accident per thousand hours worked 73 INTEGRATED REPORT 2016
HEALTH CARE [G4[G4[G4-[G4 ---DMADMADMA]]]] [G4[G4[G4-[G4 ---LA8LA8LA8LA8]]]]
We consider our employees’ health care as crucial. In 2016 we have strengthen this aspect offering an annual medical exam to prevent senologic, prostatic, cardiovascular and pulmonary diseases. This is the result of an agreement between Eurosuole and Villa Pini-Santo Stefano medical group. In addition, we offer a dental visit and discounts for the employees’ families to benefit from the medical point’s services.
SKILLS DEVELOPMENT [G4[G4[G4-[G4 ---DMA]DMA] [G4[G4----LA9]LA9]
Training plays a fundamental role in ensuring growth of our company and safety of our employees. It further serves as a source of inspiration for the management and a place to improve the skills of our employees. Each of our employee must attend 16 hours of training on safety (4 h general and 12 h specific) and 6 hours every 5 years of update.
In addition to training on safety on the workplace, we regularly organize training about the environment and how to protect it. Department managers and Miss Gibellieri are in charge to update employees about many topics, i.e. waste management, normative on emissions, chemicals management, labelling of hazardous substances, warning symbols and so on. Most of the training courses have place inside our company, where we have a big room (see the picture) dedicated to education.
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These are some examples of lifelong learning programs implemented and provided to upgrade employee skills. G4G4G4-G4 ---LA10LA10
Meeting with Departmental Officers on Proper Environmental and Safety Emergency Management, Emergency Plan, principles of Environmental Policy and distribution of "Protection of Water and Sea" brochure; Training of personnel loading / unloading / packing goods in ADR. Handling of goods classified as dangerous under ADR regulations; Training, with practical testing, for raw material handling personnel (environmental emergencies), procedures and emergency devices to be used in the event of accidental spillage of chemicals; Specific training on safety hazards, fire and emergency measures depending on plant modifications. Simulation of the emergency procedure and evacuation test. Course for new lift-truck operators.
INTERNAL COMMUNICATION
Every year we elaborate and print a brochure showing awareness campaign about Health, Environment and Safety themes, every year a different theme. We deliver them to each employee, explaining the message we want to communicate and asking to sign the receiving, so that we are sure to have included everyone. In 2016, we focused on the safeguard of the water and the sea, informing our employees on the shortage of water in some areas of the world and on the the pollution of water in others, promoting a responsible use of the water. Another way to promote immediate and fast response and facilitates communication among employees is the phone: all the white collars, technicians and managers are equipped with a phone using internal network. Many of them have both fix and cordless telephone, so that they are reachable also when they are away from their desk. We developed various ways to strengthen the cooperation among our workforce. A well- established way of communication used in our company is the Lotus mail. Even if we always prefer to speak face to face, mail is functional for official communication and a good reminder way. Our employees, in occasion of their birthday and during work hours, bring sweets in office and meet each other to eat them together. During these pleasure and relax moments, a friendly atmosphere grow and new employees have the opportunity to know better
their colleagues.
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FAMILY SUPPORT
We realize the importance of balanced personal life and help our employees to optimize the time management regarding their family matters. Additional to the respectful working conditions and the monthly family bonus, we offer care for their children. Last year, as in the years before, we organized summer camps, in order to help our employees who are parents and might have difficulties with managing the time between children and work during the summer holidays. The summer camps offer a healthy program for children during the holidays, including recreational and educational activities.
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MATERIAL ISSUES IN THIS CHAPTER
RESPONSIBLE SOURCING OF RAW MATERIALS RESEARCH & PRODUCT QUALITY, SAFETY AND INNOVATION DEVELOPMENT REUSING, RECYCLING OF THE PRODUCT
Innovation in the production process is critical to our success and competitiveness. To innovate for real, we think it is necessary to adopt, first of all, a “look forward” mindset. Our intellectual capital, which is of paramount importance for our business model, is the beacon of this mentality, together with the relentless pursuit of the most sustainable and advanced solutions.
In every project we undertake, we follow the principles of efficiency, sustainability and innovativeness. Our projects are developed in cooperation with other companies and institutions. The synergies originating from those collaborations are long-lasting and fundamental to reach the expected results. Each project is implemented in three phases: planning, management and control.
We created a working group within the company called L.I.T. (Laboratory of Technological Innovation) to coordinate and carry out our projects. From time to time, and depending on the specific project, the group
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is integrated with internal and specialized technicians and personnel provided by cooperation initiatives with Universities and research centers.
In the following pages, you can find the information and details of the projects we worked on in 2016. In chapter 3, we reported financial details of two specific projects.
“INNOVATION” TO US MEANS ALSO DOING RESEARCH TO CREATECREATE MORE AND MORE ENVIRONMENTALLYENVIRONMENTALLY----FRIENDLYFRIENDLY PRODUCTS
PROJECTS DEVELOPED IN ITALIAN FOOTWEAR NETWORK
On 31 March 2011, the following companies from The distinctive characteristics of this the Marche region signed one of the first collaboration is the independence it leaves to the contracts in Italy establishing a network for companies but at the same time the responsibility cooperation (according to the regulation no. 122 it gives them, to carry out the assigned tasks and from July 30, 2012): functions. - Eurosuole S.p.a.; The success of the network is indicated also by - Calzaturficio London Di F. Marzetti & C. S.a.s.; the entry of new companies in 2013: - Elettromeccanica Pantanetti Franco & C. S.a.s. - Tacchificio Ares S.r.l.; The Italian Footwear Network was born from the - Josephine S.r.l.; will to have faith in the cooperation among - Formificio Enzo S.r.l.; companies along the supply chain within the - Infor Ma S.r.l.. same sector. We believe that together we can make substantial improvements and come up The undoubtable advantage of this network is the with innovations to optimize costs and collaboration among shoemakers, engineers and competitiveness of the products. IT experts. It allows the flow of technical- operative knowledge, leading to growth and a A clear sign of commitment and a strong belief better satisfaction of the customer needs. that every company contributes to this network is Creation of customized products and discoveries reflected in the duration of the cooperation, of new niches on the market are further goals of which was initially foreseen for 15 years. this network.
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1.1.1. JEG: Sustainable shoes for innovative people
Production of a shoe line with sustainable raw materials
EUROSUOLE (Lead Partner), GoldenPlast SpA and JOSEPHINE srl are the three companies that collaborate to develop the project “JEG”. All of them are also part of “Rete Calzature Italiana 9”. In detail, the JEG project aims to research and create a new shoe line, completely “made in Italy” and with a young and trendy design. Through this shoe line, the three companies want to satisfy the developed marketplaces’ needs concerning the materials used in the manufacturing process that have to be more and more sustainable.
The three companies have internal resources and a network of external consultants for project, design and prototype. Eurosuole coordinates the project activities assuring the respect of timing and rules provided for the project. All the features are tested and certified by an external laboratory accredited by Accredia Ente Unico Nazionale.
JEG has a positive effect on environment safe, considering the general allocation criteria , because it does not comprise the use of products containing the restricted substances according to the Regulation REACH 10 and act Prop. 65. The positive effect regards the reduction of pollution of land, aquifer and first of all, the direct contact with human skin. In 2016, Jeg received State Aid provided by the regional tender “Sostegno alla realizzazione e commercializzazione di collezioni innovative nei settori del Made in Italy”. The project, which started in 2016, will end within 2017.
2.2.2. MAP SHOES
Study and design of flexible systems based on anthropomorphic robots with the goal of the work automationautomation in the footwear industryindustry.
At 31 st December 2016, the project has reached its conclusion (13 th months of lasting).
Today, the three Operational Objectives (l’OR1, l’OR2 e l’OR3) are proceeding. The activities of Industrial Research have finished at 100%. We are proud to announce that we reached each expected result. We monitored those results both at the first milestone deadline, at the 6 th month, and at the second milestone, at the 12 th month.
At beginning of 2017, we started some Experimental Development activities within the three Operational Objectives, and we are already reaching out the first goals. By the end of 2017, we will complete those activities and begin other Experimental Development ones that will let us complete the achievements by the end of the project, scheduled by the first quarter of 2018.
9 A network program that includes companies of the shoe industry collaborating to share know-how and in the Research & Development activity to design, simulate and make innovative products. 10 Regulation REACH aims to improve the protection of human health and the environment through the better and earlier identification of the intrinsic properties of chemical substances.
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3.3.3. CLUSTER SUSTAINABLE MANUFACTURING
An aggregation of national companies and research centerscenters whose goal is the development of the Factory Area Network. The project is at its conclusion phase. Our role and objective in the Cluster is making safety shoes that help checking health and safety of the operators. In detail, Eurosuole, in collaboration with Itaca srl, studied and made the possibility to put in the sole a pressure sensor for localization and monitoring of physical parameters. That research has been conducted in our laboratories. We scheduled the delivering of this project by the end of 2017.
4.4.4. SOLEution
Innovative and green solutions for the sole production chain. The overall objective of the project is to make the production of soles in polymeric materials more efficientefficient and sustainabsustainable.le.
We identified two specific objectives:
• a radical innovation of the material in order to lower the environmental impact. • the overall innovation of the production processes in order to increase efficiency, safety, ergonomics, as well as environmental sustainability of this type of production material.
During 2016, works provided by the project progressed and have reached a satisfactory step regarding the research on eco-friendly materials and on a particular treatment of soles surface.
The project will continue along 2017, until September 2018. Next steps will be focused on the introduction of automatic weighing systems in the elaboration of rubber mixtures.
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OUR BRANDS [G4[G4[G4-[G4 ---4]4]4]4]
WELLFEET
The brand Wellfeet represents soles made from polymeric materials resistant against hydrolysis and different climatic conditions such as high humidity. Their technical and, at the same time, young and comfortable style characteristics let us satisfy our customers, even the most demanding ones. Wellfeet soles have been developed for the wealth of our feet, a part of the body strained every single day. The brand’ slogan “The walking pleasure” communicate the effect of a soft foot massage. Wellfeet soles are 100% Made in Italy.
In 2015, we apply to receive tax reliefs for the brand Wellfeet. That benefit is provided by Patent Box, the Ministerial Decree of 30 th July 2015 for tax reliefs on incomes obtained from intangible goods (brands, patents and other intellectual property rights). Therefore, we started the instance of access to the ruling procedure in accordance to art. 1, paragraph 37-45, L. 190/2014, and wait for the conclusion of the preventive agreement with the Revenue Agency.
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GLE ––– LIGHT RUBBER SOLES
Development of “Made in Italy” products using innovative rubber gugumm materials and techniques.
The project is directed to improve a molding method for expanded vulcanized rubber gum sole.
The vulcanized rubber has various constraints and limitations related to the dimensional control of the manufactured articles obtained by the molding process. In fact, the materials belonging to the family of vulcanized rubber together with the production technologies available on the market are not enough to get products with precise dimensions, since the production process is difficult to control.
The current process requires a correction of each article by removing the excessive material through grinding and/ or shearing until the desired shape is obtained. This process represents an important limit in terms of costs and exclude the possibility to create shapes of any type. Moreover, the current production processes do not allow getting very light soles.
For these reason, we launched the GLE – Light Rubber Soles brand.
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SUPPLY CHAIN [G4[G4[G4-[G4 ---12]12]12]12]
The choice of suppliers considerably effect on the environmental impact of our activities. For this reason, we maintain a continuous dialogue with the companies from whom we buy raw materials. They comply with the United Nations (UN) Harmonized Classification and Labeling System (GHS) in order to ensure a uniform classification and labeling of chemical products worldwide.
The substances we use are also registered according to REACH. We have implemented new, environmentally-friendly manufacturing processes with a long-term mindset that is attentive to the potential consequences on present and future generations. When we choose suppliers, we keep following the principle "Think global, act local".
WE DEFINE CLEAR RULES WITH OUR SUPPLIERS
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SUPPLIERS [G4[G4[G4 ---12]-12]12]12]
Similar to the previous year, the majority of our suppliers was located in Italy. In 2015, we had 88.18% suppliers from Italy and 11.82% from other countries. In 2016, 93.1% of suppliers were located in Italy. Indeed, no significant changes have occurred in the structure of our supply chain nor in the relationship with suppliers.
The distribution of Italian suppliers in the various regions, compared with 2015, shows fewer regions involved and an increase in the number of Marche (our region) and Piedmont suppliers. Compared to the previous year, in 2016 we added three new countries to our list of suppliers: Holland, France and Singapore. Among the international suppliers, the biggest amount of purchases (37.52%) come from Spain.
Most of our suppliers are intermediaries between our company and big corporations, linked through strict agreements or price cartels. That is why the price of the goods is the same among different distributors. Thanks to the clarity of the policies, we did not experience any problems with our suppliers.
Considering the geographical division of our suppliers, our strategy is to “think global, act local”. As you can see in the statistics presented below, we prefer, indeed, suppliers located close to our company site. It makes the coordination and exchange of information with our technical office easier. Moreover, we believe that acquiring goods and services from local businesses involves social and environmental benefits.
As regards the suppliers’ profile, our strategy is driven by finding the best deal in economic terms while ensuring quality, safety and compliance with sustainability requirements. We are committed to guarantee a fair procurement process and to implement formal procedures for supplier management. The selection is made according to pre-defined standards on a competitive basis.
Through our “Environmental Guidelines for suppliers and contractors operating at the site”, we defined clear and precise rules for our suppliers and contractors, applied directly on their laboratories. These rules include the dogma of eliminating solvents, reducing VOCs, promoting low- or no-emission catalysts, and replacing products containing surfactants. That clearness with our suppliers has the aim to prevent and protect our employees and customers. At the end of every year, we evaluate all suppliers during the management review. Based on the results, we decide if extending the contract or finding a new supplier for the respective product or service. We try to improve constantly our supplier management and our procurement practices sustainability.
In 2004, we obtained the ISO 14001 certification. It was a clear sign showing that our company gives importance to a supply chain characterized by principles of equality, respect for the environment and business ethics. The choice of raw materials has a strategic meaning for us, in order to maintain our position on the international level and to assure both worker safety and environmental protection.
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ITALIAN SUPPLIERS BY REGION AND AND VALUE IN 2016
Friuli 1.30 Emilia Romagna 7.80 % Lombardia 51% Marche 11.71%
Piemonte 9% Puglia 2.6% Veneto 1.30%
SUPPLIERS IN 2016 RAW MATERIAL SUPPLIERS IN 2016
Italia 93.1% Italia Estero Estero 6.9% 85% 15%
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CCCUSTOMERSCUSTOMERS
THE IDENTITY OF OUR CUSTOMER IS CLEAR AND STABLE: A SHOE FACTORY OF MEDIUM OROROR BIG SIZE, BOTH LOCAL AND FOREIGN, WHO SUPPLIES THE WHOLE WORLD WIWITTHH QUALITY SHOES FOR WOMAN AND MAN
In 2016, our QC department worked very hard to Eurosuole, as a supplier of an intermediate satisfy the requirements of our demanding product, operates as a business-to-business customers. Customers are the lifeblood of a industry. One of the typical characteristics of our company and a stimulus for constant market is the concentration. We have around 800 improvement. We put effort to keep a good clients, which is a much lower number compared relationship with current clients and are, at the to the business-to-customer (B2C) model. Even same time, always open to expand our horizons more significant is the fact that our five top clients and to welcome new customers. Maintaining a account for 30.98% of sales. Consequently, the high quality of products to represent proudly the relationship with our clients are much more “Made in Italy” brand is therefore extremely complex than in a B2C market and daily comprise important to us. production, logistics, research, development and administration. FIDELITY: Our attention to customers’ needs paid off so far. AROUND 30% OF OUR ITALIAN CUSTOMERS Around 30% of our clients purchase our soles for ARE CUSTOMERS SINCE MORE THAN 10 more than a decade. Our goal is to provide our YEARS clients with the best service possible, independently from the dimension. In 2010, we decided to apply the customer relationship management (CRM) approach to manage better
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the interactions with our clients. It helps us to decision. To keep our standards high, we perform coordinate new customers, build relationships quality tests at the end of the production process. with our existing customers, understand and In 2016, we received very positive feedback from monitor the purchasing behavior, as well as our clients. Customer satisfaction is among our segment our customer base more efficiently. top priorities. We try to ensure high flexibility Moreover, we can reduce the faults and risks of when it comes to customer requirements and the decision-making process. requests about new material research and development. A good relationship with our As you can see in the photo below, we have a CRM customers is the prerequisite for excellent results. program, which can be accessed from computers and mobile devices any time at any place. The remote access is secure and protects company data. Data and customer information can be updated in real time, visible automatically from all accounts. The main benefits identified over time are the following: leaner and faster processes, Our Customer Relationship Management program well-organized and easily accessible customer data, easier data transfer, sharing of information and reduction of operation costs.
Moreover, we keep our clients up-to-date through Product Sheets. They describe detailed information about the product offer and are intended to help the clients with the purchasing
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REVENUE DISTRIBUTION IN 2016 [G4-8]
23%
77%
ITALY FOREIGN
REVENUES ABROAD (in euro) 2016
Europe (excl. Italy) 3,332,739.28 Rest of the world (excl. Italy) 6,064,926.50 TOTAL 9,397,665.9,397,665.78787878
SHARE OF THE 6 BIGGEST CUSTOMERS BY VALUE IN 2016
38,8 BIGGEST CUSTOMERS OTHER CUSTOMERS 61,2
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EUROSUOLE IS A B2B INDUSTRY
In the graphic you can se e statistics from the year 2016 concerning our revenue distribution. Similar to the years before, the major part of sales came from Italy (77%). The majority of our international clients came from Europe and Asia.
REVENUES IN ITALY (in euro) 2012012016201 666
TOTAL 32,32,32,061,099.7132, 061,099.71
Similar to the previous year, the revenues from Italy in 2016 came mainly from Veneto, Marche, Lombardy and Tuscany. It can be attributed to the strong concentration of footwear industry in these regions [[[G4G4G4-G4 ---8]8]8]8] . Concerning about the Marche Region, and comparing figures with the last year, we notice an increase of revenues from Fermo and Macerata Provinces while a decrease from Ascoli Piceno and Ancona.
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DISTRIBUTION POLICY [G4[G4[G4-[G4 ---8]8]8]8]
Our choice about distribution channels vary and depend on the country and the quantity sold. We give importance to the establishment of a direct distribution channel with our major clients in order to maintain an open and regular communication. This allows us to follow carefully every step of the process, ensure customized offer and, at the same time, high quality of our products.
DISTRIBUTION POLICY BY 2016 CONTINENT Europe DIRECT/ INDIRECT
Asia DIRECT
America DIRECT
Africa INDIRECT
IN 2016, SALES TO POLISH CUSTOMERS HAVE CLEARCLEARLLLLYY RISEN. WE CONSOLIDATED THE RELATIONSHIP WITH SPAIN, ROMANY AND TURKEY. IN AADDITION,DDITION, BELARUS IS A BRAND NEW MARKET WHERE WE ENTERED IN, AND THAT WE HOPE TO SASATISFYTISFY AT BEST FROMFROM NOW AND THEN.
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MATERIAL ISSUES IN THIS CHAPTER
ENVIRONMENT • ENERGY EFFICIENCY • WATER MANAGEMENT • REUSING; RECYCLING OF THE PRODUCT • EMISSIONS • WASTE MANAGEMENT
OUR SUSTAINABILITY POLICY [G4[G4[G4-[G4 ---12]12]12]12] [G4[G4[G4-[G4 ---DMA]DMA]
While the shape of a company environmental strategy is lead to the European and National rules on sustainability, we believe that its operation depends the most on human and ideal reasons. It means that we put effort into a sustainable way of doing business not only to be in accordance with the rules but, first, because we care about the needs of the community and the future generations. We understood the importance of sustainable environmental practices already in the beginning of our existence. Our objective is to be an example of best practice in caring for the environment with a proactive role. As a part of a global supply chain, we realize the importance of a coordinated product lifecycle management that sees the product’s inception, service and disposal as an integrated process. We conduct ongoing research
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and try to implement more sustainable practices in our sourcing and manufacturing processes in order to contribute to the overall sustainability of final products and to reduce the negative impact on environment. In 2016, we did not record any damage to the environment and we did not receive any environmental sanctions or penalties. As in the previous year, the major investments for the environment in terms of value concerned the air protection. Our main environmental priorities of 2016 were reducing the emission of volatile organic compounds (VOC), eliminating toxic chemicals, optimizing production processes concerning energy efficiency, water management, waste management and offering products with a low environmental impact. MAMAMAINMA IN OUTCOMES AND INITIATIVES IN 2016 [G4[G4[G4-[G4 ---27]27] [G4[G4----DMA]DMA] Since years, we develop an “Environmental Aspects and Impacts Register”. That register is a document we update each time relevant changes affecting the environment occur. It shows our sustainability improvements year by year. Here below you can find the outcomes for 2016 divided by areas.
SUSTAINABLE PRODUCTS WASTE MANAGEMENT
The improvements regarding sustainability of products are the following: • Development of an eco-friendly products line; • Reduction of hazardous products used during specific phases and research of low-environmental- impact raw materials;
• Improvement in monitoring the storage quantity of hazardous products (substances and mixtures) through the management program. We choose the materials carefully and try to reduce to minimum the chemical substances dangerous for health contained in our products, with the aim to protect our customers. Each sole produced is free from any carcinogenic, mutagenic and teratogenic substances. Additionally, our employees, to protect their own health, handle with special care dangerous substances.
During 2016, we finalized our research and development project aiming at the reduction of production waste: we created a new product whose compound consists of 21.3% of modern carbon, thus a biomass. The attestation was conducted in 2015 by the Sapienza University of Rome. The product is therefore ready to be used and can be introduced in the production process. This product is the result of the BIOMAT project: a project made in network with other entities that aimed to create a “Made in Italy” product using innovative materials from sustainable sources.
Moreover, on 15 th of February 2016 (request No. 102016000015129 to Ministry of Economic Development), we registered the patent named “method of molding a polyurethane object, in particular a shoe obtained from polyurethane waste, and related mold object in polyurethane.” It consists of an innovative product using 80% of recycled material in the sole production. That patent is part of a project started in 2015 and aims to reuse the production waste as a valuable production material. The production of this type of soles would help us to save around ten tons of waste per year and bring the amount of production waste nearly to zero. [G4[G4[G4-[G4 ---EN27]EN27]
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EMISSIONS [G4[G4[G4-[G4 ---DMA]DMA]
Our improvements about emission are:
• Reduction of fugitive emissions in the workplaces; • Rubber handling from storage reduction and fugitive emissions reduction.
ENERGY EFFICIENCY [G4[G4[G4-[G4 ---DMA]DMA] In 2010, we decreased the emissions substantially by 653 toe 11 (tonne of oil equivalent). Of this amount, 450 toe were eliminated thanks to our trigeneration plant and the remaining 203 toe through the introduction of new presses in our production site. We transformed heating of the injection press from electric to thermic, by using the oil heated by a methane-fired power station. [G4[G4[G4-[G4 ---EN6]EN6]
The production of soles requires high-energy consumption. The trigeneration has proved to be an optimal solution for a year-round efficient source of electricity, heat and cold. All these efforts demonstrate that although we are a company with high-energy needs, we are able to follow environmental policies letting our business activities be more sustainable. Although our production site do not run with renewable sources, our trigeneration plant is considered as a substitute for these sources. In fact, it received a CAR certification issued by the Italian institution GSE.
In addition to a better protection of environment, the environmental initiatives have also brought considerable benefits in economic terms, mainly in two categories:
• Costs reduction:::: our environmental practices resulted in lower costs of compliance with environmental legislation, lower waste disposal costs, lower consumption of resources, lower costs related to environmental incidents and penalties, lower insurance premiums, more opportunities to obtain financial aid and benefits or simplifications in administrative procedures. • Competitive advantage:: our competitors are less TrigenTrigenerationeration plant in use since 2010 dynamic and do not support sustainable environmental practices, so it is easier for us to keep good relationship with our stakeholders such as public authorities, institutions and population of local community.
Our 2016 Environmental Aspects and Impacts Register report also:
• Development of an automated painting cell using a robot; • Technical analysis for the implementation of a power supply and closed-loop authomatic metering system in the Rubber Department.
In addition, the following improvement projects has started in 2016: • Launch of a project to upgrade the fire system; • Specific interventions to optimize the most environmentally intensive production phases (injection molding, compression molding) and reduction of waste and unwanted emissions.
11 27,339.804 GJ (gigajoules)
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AUDIT RESULTS OF 2016 SHOW WE HAVE AN ADECUATE TREND OF ENVENVIRONMENTALIRONMENTAL MANAGEMENT SYSTEM (EMS)
The environmental policy of Eurosuole is Management System. Our company was also disclosed both internally and externally. reviewed on a third occasion: for the ISO 14001: As far as internal disclosure is concerned, the text 2004 certification of the SGA, by TUV Rheinland of that policy is constantly hanging on the (July 2016). This verification was the renewal of dashboard of the hall and on each timekeeper. In certification, which is repeated at three-year addition, it is distributed to every new recruit by intervals (the latest in 2013). From this review, it RSPP/RPE during pre-employment training appears that the SGA is maintained and through the information leaflet "You too with us documented satisfactorily and in accordance with in the environmental certification project". As the standards. The review declares also that data foreseen by our training program, in June 2016, review and environmental monitoring activities the environmental policy was again distributed to are well documented, improvement projects are all the staff along with a water management implemented and planned and there is a good brochure. As far as external disclosure, on the waste management with the help of an ad hoc Eurosuole website, environmental policy is always management program. No inconsistencies were available in both Italian and English languages. detected but some observations aimed at Our environmental manager seeks to reach the improving the adequacy of the system were set environmental goals every year. added. The company welcomed all those results Environmental policy is examined in accordance and discussed them in a meeting with all with an Internal Inspection Program, which Department Officers (October 2016) during which includes two audits: one in June and one in joint action measures were decided for each of December. During 2016, at the first audit, the the various recommendations, postponing the operations of the production departments, verification of the effectiveness to the next audits program activities, records and system of the SGA. documents were evaluated and auditors conducted a check of the environmental laws and We also want to increase the consistency of our regulations as provided by UNI EN ISO 14001: practices with international standards. As proof of 2004. They also audited one of our suppliers, and this commitment, 2016 is the second year in the feedback was successful. The second audit, which we prepare the integrated report in conducted by internal auditors, was focused on accordance with GRI G4 guidelines, a practice not the entire Environmental Management System yet widespread among the companies in the (SGA), from operational / productive activities to industry we operate. planning and system activities, with the aim of On the following pages, you can find the data evaluating its efficiency and summarizing the regarding our environmental management in results. The results of the two audits showed a 2016. total improvement in the Environmental
FIGURES 121212
We monitor the consumption of energy (i.e. electricity and natural gas), water (i.e. wells, aqueducts) and other relevant environmental indicators on a monthly basis through data collection from accounting invoices and regular readings.
12 Figures on environmental performance internally
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CONSUMPTION OF ENERGY AND NATURAL RESOURCES [G4[G4[G4-[G4 ---DMA]DMA] [G4[G4[G4-[G4 ---EN5]EN5] [G4[G4----EN6]EN6]
As mentioned previously, although we have not well. To avoid gaps caused by the trigenerator properly used energy from renewable sources leading to insufficient heating of the production yet, we optimized our energy consumption by systems, we created a back-up line supplied with self-production of energy through a trigenerator. diathermic oil and an appropriate heat exchanger In 2016, we self-generated 49,57% and bought that comes in operation in times of need. 50,43% of the total consumed energy. [G4[G4[G4-[G4 ---EN3]EN3] All electrical and thermal carriers of the The relevant energy intensity ratio for our trigenerator are usually in use. If they are not company is the product intensity, using the sufficient to meet the demand of the production energy consumed within the organization. The plants, the power plants and the electricity from product intensity for 2016 is 9.9687708 GJ/1.000 market come automatically in use. pairs of soles produced [G4[G4[G4-[G4 ---EN5]EN5] The power stations minimize their use during the The thermal energy produced by our trigenerator weekends thanks to a management policy started is used for heating during the winter season as three years ago.
ENERGY CONSUMPTION OF NONNON----RENEWABLERENEWABLE SOURCES * [G4[G4[G4-[G4 ---EN3]EN3] 2016 2015 2014
Methane consumption in toe/ 1,000 pairs of soles produced ** 0.1622 0.1413 0.1138
Electricity consumption in toe/ 1,000 pairs of soles produced ** 0.0759 0.0675 0.0620
TOTAL TOE CONSUMPTION/ 1,000 PAIRS OF SOLES PRODUCED 0.0.0.23810. 2381 0.2088 0.1758
Total methane consumption in toe 2154 1,988 1,640
Total electricity consumption in toe 1008 949 893
TOTAL TOE CONSUMPTION 3162 2,937 2,533
Methane consumption in GJ/ 1,000 pairs of soles produced 6.7909896 5.9159484 4.7645784
Electricity consumption in GJ/ 1,000 pairs of soles produced 3.1777812 2.82609 2.595816
TOTAL GJ CONSUMPTION/ 1,000 PAIRS OF SOLES PRODUCED 9.9.9.96877089. 9687708 8.7420384 7.3603944
Total methane consumption in GJ 90,183.944 83,233.584 68,663.52
Total electricity consumption in GJ 42,202.944 39,732.732 37,388.124
TOTAL GJ CONSUMPTION 132,132,386,616386,616 122,966.316 106,051.644
WATER CONSUMPTION [G4[G4[G4-[G4 ---DMA]DMA] For several years now, we have adopted a closed trigeneration plant. The overall consumption in circle production system, constantly reusing the 2016 is lower than the one of the previous year water for cooling. That means that the well water and counted for 0.0004 cubic meters/ pair of is used exclusively as a refill of the closed circle soles produced. The water from the aqueduct is system and for watering company’s green areas. consumed exclusively by the toilets and is not Since 2010, the water is used also for the used for our production activity.
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WATER CONSUMPTION [G4[G4[G4-[G4 ---EN8]EN8] 2016 2015
Consumption of water from the well in CBM/ pair of soles produced * 0.0004 0.0005 Total water consumption from the well in CBM 5,760 6,400 Total water consumption from the aqueduct in CBM/pair of soles produced 0.00037 0.0004
Total water consumption from the aqueduct in CBM 4,932.36 5,670
TOTAL WATER CONSUMPTION 10,692.36 12,070
* internal acceptability level: < 0.0005
PRODUCTS ––– USE OF DANGEROUS SUBSTANCES [G4[G4[G4-[G4 ---DMADMADMA]]]] As mentioned previously, the choice of materials reduce the percentage of dangerous substances for our products is made with care and attention used in our production. There were no events of to avoid the use of chemical substances water or soil contamination at emergency levels. dangerous for health of our customers and employees. In 2016, we were able to slightly
* conversion base : 1 toe (tonne of oil equivalent) = 41.868 GJ (gigajoule); reference: International Energy Agency; methodological note: the conversion to toe unifies the measurement units of methane (cubic meter) and electricity (kW); reference: FIRE Energy Manager ** internal acceptability level: < 0.20
USE OF DANGEROUS SUBSTANCES * [G4[G4[G4-[G4 ---EN27]EN27] 2016 2015 2014
Use of dangerous substances in kg 3,326,678 3,269,389 3,197,053
Use of dangerous substances as percentage of total substances used in kg * 39.41% 39.62% 40.09%
Contamination of white waters due to emergency in number of emergency events 0 0 0
Soil contamination due to emergency in number of emergency events 0 0 0
* internal acceptability level: < 45%
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WASTE [G4[G4[G4-[G4 ---DMADMADMA]]]] [G4[G4[G4-[G4 ---EN23]EN23]
We changed the management of dirty cleaning increase of the rubber soles production. additives in 2013. Since 2014, we have distilled Production waste, especially the rubber one, is the additives internally, removing them from the delivered to a recycling center. The second is total waste output. In the same way, we reduced linked to the extraordinary maintenance and the waste coming from the washing machines. internal cleaning of the departments that have Figures of 2016 underline an increase of waste, been replaced and to the refurbishment activity. mostly driven by two facts. The first is the
WASTE [G4[G4[G4-[G4 ---EN25]EN25] 2016 2015 2014
Waste production in gr per pair of soles produced * 156.08 120.42 108.99
Production of dangerous waste in gr per pair of soles produced ** 27.54 26.09 25.2
Percentage of waste sent to external disposal *** 44.93% 37.84% 38.84%
* internal acceptability level: < 150 ** internal acceptability level: < 40 *** internal acceptability level: > 35
EMISSIONS [G4[G4[G4-[G4 ---DMA]DMA] [G4[G4----EN21]EN21]
Looking at the data concerning the emissions performed regular cleaning of chimneys and caused by our production activity, we can see that other relevant systems to reduce the negative all values are within the acceptability limits. We impact of production on the environment.
EMISSIONS 2016 2015 2014
Amount of solvents used in gr/ pairs of soles produced * 17.41 18.14 17.59
Amount of coatings used in gr/ pairs of soles coated ** 37.92 37.31 35.86
Percentage of coated soles in total soles produced 44.47 44.70 45.74
Percentage of soles coated internally 43.28 46.43 46.04
* internal acceptability level: < 20 ** internal acceptability level: < 40
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ENVIRONMENTAL ACACCCCCOUNTINGOUNTING
Environment costs 2016
ENVIRONMENT as a whole 2,5% TRAINING/ SAFETY 19,6% WATER 0,5%
AIR 77,4% AIR WATER ENVIRONMENT as a whole TRAINING/ SAFETY
The pie chart shows the costs faced for sustainability by the organization. The 20% of total expenses was spent for employees training about the safety on workplace.
The figures indicate that the investments into investment refers to the abatement and environmental protection increased in 2016, in conveying systems of emissions due to the particular in the AIR sector. The most relevant restructuring works of the production plant.
ENVIRONMENTAL ACCOUNTING INDICATORS (in euro) 2016 2015 2014
Total costs for environmental protection and security/ production value in % * 0.73% 0.27% 0.14%
Total costs for environmental protection and security/ pairs of soles produced in % 2.28% 0.80% 0.38%
* internal acceptability level: > 0.1%
RAW MATERIALS [G4[G4[G4-[G4 ---EN1]EN1] [G4[G4[G4-[G4 ---EN21]EN21] The data regarding the raw materials consumption shows the following values for 2016 and the previous year 2015 (all non-renewable):
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2016 2015 RAW MATERIALS IN KG QUANTITY VOC QUANTITY VOC
Additives 4,568 2,780.61 5,206.65 2,786.92
Colorants 548 74.56 525 67
Pigments 10,794 4,670.78 13,375.50 5,784.87
Resins 53,567 42,697.16 73,706 60,628.43
Solvents 155,875 155,875 147,827 147,827
Coatings 5,622 2,838.83 7,662.50 4,447.59
Release agents 29,718 22,280.08 44,497 33,637.65
Coatings sold to third parties 80,500 52,240.5 82,269 66,987.06
The first column shows the total quantities of the consumed raw materials during the production, while the second one (VOC) shows the volatile organic combustible. Comparing the VOC of 2016 with the ones of the year before, it is clear that we succeed to reduce the quantity of VOC in almost every raw material, complying with our aim to reduce emissions.
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DANGEROUS WASTE MANAGEMENT [G4[G4[G4-[G4 ---EN23]EN23]
* EWC: European Waste Catalogue
PHYSICAL EWC CODE * DESCRIPTION DANGER ORIGIN DESTINATION 131313 STATE
Emulsified water (non - 130105 * liquid HP14 molding GM D9 chlorinated emulsions) Water from washing (non - 070601 * liquid HP14 washing D9 chlorinated emulsions) Waste color paste 070308 * liquid HP14 molding PU D9 (reaction residuals) Dust from removal of rubber 070214 * gum(waste from additives powdery HP14 compound GM R12 with dangerous substances) Waste from coatings on water coatings for 080119 * liquid HP3 D9 basis finishing HP3 - Coating sludge (sludge muddy HP4- coatings for 140605 * D9 containing other solvents) shovelable HP5- finishing HP10 HP3 - Distillation sludge (sludge muddy HP4- 140605 * distillation D9 containing other solvents) shovelable HP5- HP10 Primer waste (other solvents HP3 - 140603 * liquid finishing R12 and solvent compounds) HP4 Solvent cleaning filters (other 140603 * solvents and solvent liquid HP14 molding PU D9 compounds) Solvent washing molds (other HP10- 140603 * solvents and solvent liquid molding PU D9 HP14 compounds) Paint waste and color paste (mud from the removal of solid not HP3- finishing molding 080117 * D9 paints and coatings and other powdery HP14 PU substances) Adhesive waste (waste HP3- 080409 * adhesives and sealants and liquid finishing D9 HP4 other dangerous substances) HP5 - solid not factory 160601 * Lead-acid batteries HP8- R13 powdery maintenance HP14 solid not 150110 * Hazardous packaging HP14 coatings D9 powdery solid not HP3 - 150111 * Empty spray cans various D9 powdery HP5 Chemical substances from the HP3 - 160506 * liquid PU formulation D9 laboratory HP6 Discarded equipment (other solid not 160213 * than the items 160209 and HP14 offices R12 powdery 160212) factory Waste oil (mineral oil waste HP5- maintenance and 130205 * for engines, non-chlorinated liquid R12 HP14 compounds gears) department
13 D9 = Landfill
R12/R13= Reuse/Recovery
The waste disposal method has been determinated by the waste services company according to the type of waste. [G4[G4[G4-[G4 ---EN23]EN23] .
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ISO Certificate awarded to Eurosuole S.p.a. in 2016
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MATERIAL ISSUES IN THIS CHAPTER
• COMMUNITY ENGAGEMENT SOCIETY
A CONTINUOUS SHARING OFOFOF VALUES BETWEEN OUR COMPANY AND THE SOCIETY
STRATEGY [G4[G4[G4 ---27]-27]27]27] [G4[G4[G4-[G4 ---DMA]DMA] [G4[G4[G4-[G4 ---SO1]SO1]
As the motto “strength is in numbers” says, we Our employees and their families are part of the believe that results can be reached only helping society: we want not only that our employees feel each other. Considering that our society has safe and motivated at work but also that they are shown itself sensible and opened to our satisfied with their lives outside the work reality. developments, we feel a sense of duty toward it. Consistent with the objectives of prosperity and We contribute to the development of the local growth, we realize our responsibility towards our community. We truly believe in the potential of stakeholders. Therefore, we developed our young people and are convinced that it is possible strategy according to their needs, including social, to build and keep a wealthy society. That is the cultural and educational initiatives to improve the reason why we go beyond the community living conditions of our people and to protect investments related to our core business and vulnerable groups. We believe that step by step, promote general community development even through small initiatives, we can create a through various projects. “culture of security and wealth”. We contribute mainly to social and sport In line with a society more and more attentive to associations, cultural events and nonprofit the environment where growing up its children, organizations (for exact figures see chapter our Research & Development activity is lead to an Financial Report, paragraph Distribution of Added eco-friendly production with a positive impact on Value). the future generation.
The main initiatives for our community taken in 2012016666 were in the following areas:
NONPROFIT ORGANIZATIONS PUBLICPUBLIC----PRIVATEPRIVATE NETWORKING
NATURAL CALAMITIES SPORT ASSOCIATIONS
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MAIN INITIATIVES [G4[G4[G4-[G4 ---16]16] [G4[G4[G4-[G4 ---27]27]27]27][G4[G4[G4[G4----DMA]DMA] [G4[G4----SO1]SO1]
NATURAL CALAMITIES
EARTEARTHHHHQUAKEQUAKE OF 330000ththth OCTOBER 2016
The happenings of the 30th of October 2016 at the In occasion of the celebrations of the 40 th boundary between Marche and Umbria regions anniversary of Eurosuole’s activity, in July 2016, have influenced the involved cities forever. We we donated an ambulance to the “Croce Verde” are talking about the earthquake with Magnitude of Civitanova Marche. This is the second one we 6.5 and epicenter close to the city of Norcia. donate to the Association. Eurosuole, considering its strong relationship with the local territory, has chosen to contribute PUBLICPUBLIC----PRIVATEPRIVATE NETWORKING to the rebuilding of Ussita, a city destroyed both physically and morally. The same employees of Eurosuole has proposed to cancel the company Christmas dinner and to devolve the amount of the expense to the earthquake victims. Therefore, we donated 50.000 euro to the Ussita Municipality. The Major will use the money for the construction of a building for public services.
CLUSTER MARCHE MANUFACTURINGMANUFACTURING---- FABBRICA INTELLIGENTE ––– SUSTAINABLE MANUFATURING The Cluster Marche Manufacturing is an aggregation of Universities, Research Institutes and local companies that joins to create an automated, sustainable and efficient production
process. The Cluster is an example of synergy between public and private entities letting Marche Region to be more competitive on the SOCIAL ASSOCIATIONS European marketplace. Year 2016 was the second CROCE VERDE year of activity of Cluster “Marche Manufacturing” with Eurosuole presidency. Marche Manufacturing is in turn founding partner of the Technological and National Cluster “Fabbrica Intelligente”.
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Eurosuole, in the occasion of the 40 th anniversary, has organized two day-event: the first was a meeting inside the company explaining the last two years dynamics and evolution of the Cluster’s project. The second, instead, was dedicated to celebrations: a mass, the giving of an ambulance to the “Green Cross”, a dinner and to conclude a music concert with the singer Malika Ayane.
SPORT ASSOCIATIONS
Our contributions to sport associations go to:
- Fiorentina Soccer Team , - Lube Volley , - Anthropos Association that organizes
activities for children with disabilities such as swimming lessons for children with
physical disabilities. The association also receives annual financial support for transport of children to the sport facilities.
NONPROFIT ORGANIZATIONS
PUBLICPUBLIC----PRIVATEPRIVATE NETWORKING As mentioned previously, we believe in the community and invest in the community. Our We are also among the top 50 Italian companies contributions go every year into sport, culture and that are members of a business network. In particular, we lead the Italian Footwear Network, nonprofit associations. which has achieved great results so far. The funds are allocated to the following nonprofit and Moreover, we are one of the members of social associations:
Confindustria MacerataMacerata, which unifies all - ANFFAS (National Association for Families with businesses in the region regardless the sector in Intellectual or Social Disabilities) , which they operate, to create common strategic - ANT (National Cancer Association) , policies. Our sole administrator Germano Ercoli - Green Cross based in Civitanova Marche, was president of Confindustria Macerata for two - Diocesi Caritas receives each year a considerable consecutive terms. amount of funds. These are used to run a canteen The training courses offered by Confindustria help for people in our community who have financial to understand the general dynamics of the difficulties and are not able to cover the basic economic situation in Italy and is a great source of expenses by themselves. In addition, we have information for a company like Eurosuole. contributed to a renovation project of the Caritas Membership in Confindustria is closely connected premises. to our forward-thinking and innovative business approach, which is one of our most important company values.
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05
Methodological Note
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METHODOLOGY [G4[G4[G4-[G4 ---15]15]15]15] [G4[G4[G4-[G4 ---18]18]18]18] [G4[G4[G4
We want this document to provide our The integrated report, which is drawn up every stakeholders with clear and complete calendar year, complies with Global Reporting information, and to truly reflect the everyday Initiative (GRI), G4 Guidelines. The social part is reality of our company. based on the data provided by I.Re.M (Imprese Responsabili nelle Marche), implemented as a To Eurosuole, the Integrated Report is the collaboration between the Marche region and the opportunity to analyze its impacts on society and consulting company KPMG. The figures on work- environment, to communicate the outcomes to life balance has been collected internally by an stakeholders and improve itself each year. It is external researcher of University of Padua. The also a chance to thank all those who during the financial data, reported in the 3 rd chapter of this year contributed to Eurosuole success. report, is consolidated according to the national The integrated reporting is still not a common OIC accounting principles, that have been practice among Italian small-medium companies recently revised by D.Lgs. 139/2015 which belonging to the shoe industry. Our decision to implemented the Directive 2013/34/UE. join it reflects our strong commitment to sustainable development, which was present in our company since its founding. SUSTAINABILITY IS INCLUDED IN OOURUR ANNUAL REPORT SINCE 12 YEARS
GLOBAL REPORTING INITIATIVE (GRI)
THE INTEGRATED REPORT 2012016666 HAS BEEN PREPARED ACCORDING TO THE G4 GUIDELINES DEVELOPED BY THE GLOBAL REPORTING INITIATIVE (GRI)”.
GLOBAL REPORTING INITIATIVE IS AN INTERNATIONAL INDEPENDENT STANDARDS ORGANIZATION, WHICH IS WIDELY RECOGNIZED AND FOLLOWED BY BUSINESSES ALL OVER THE WORLD. WE DRAW UP OUR REPORT ACCORDING TTOO THE GRI G4 GUIDELINES, AND OPTED FOR THE “IN ACCORDANCEACCORDANCE --- CORE” OPTION.
THE PROCESS OF DEFINING REPORT CONTENT WAS BASED ON THE PRINCIPLES OF SUSTAINABILITY CONTEXT, STAKEHOLDER INCLUSIVENESS AND ENGAGEMENT, MATERIALITY AND COMPLETENESS. THE QUALITY OF THE INFORMATION IN THE REPORT WAS ASSURED BY FOLLOWING THE PRINCIPLES OF BALANCE BETWEEN POSITIVE AND NEGATIVE ASPECTS, COMCOMPARABILITY,PARABILITY, ACCURACY, TIMELINESS,TIMELINESS, CLARITY AND RELIARELIABILITY.BILITY.
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REPORT PROFILE
REPORTING PERIOD: January 1, 2012016666 ––– December 31, 2012016666 [G4[G4[G4-[G4 ---28]28]28]28]
REPORTING CYCLE: Annual [G4[G4[G4-[G4 ---30]30]30]30]
PREVIOUS REPORT: Integrated Report 2012015555 [G4[G4[G4-[G4 ---29]29]29]29]
REPORTING PERIOD OF THE PREVIOUS REPORT: January 1, 2012015555 ––– December 31, 2012015555
CONTACT FOR QUESTIONS REGARDING THE REPORT OR ITS CONTENTS: [email protected]@[email protected]; [email protected] [G4[G4[G4-[G4 ---31]31]31]31]
EXTERNALLY DEVELOPED DOCUMENTS THAT WE ENDORSE: GRI G4G4,, Italian Commercial Code, I.Re.M (Responsible Companies in the Marche Region) [G4[G4[G4-[G4 ---15]15]15]15]
GRI G4 “IN ACCORDANCE REPORT”: The report is ‘in accordance’ with the GRI G4 GuideGuidelineslines ––– core optionoption.... [G4[G4[G4-[G4 ---32]32]32]32]
GRI CONTENT INDEX SERVICE: The report was submitted for the GRI Content Index Service, and GRI confirmed the accuracy of the GRI G4 Content IndexIndex....
EXTERNAL ASSURANCE: We have only external assurance of the financial papartrt of the report so farfar,, made by external auditors. This is the second year we write the report according to the GRI guidelines. The decdecisionision-ision --- makers in the organization have not yet decided if getting external assurance for the whole report or notnot.... [G4[G4[G4-[G4 ---33]33]33]33]
DECISION-MAKING ON ECONOMIC, ENVIRONMENTAL, SOCIAL IMPACT: General manager and sole administrator [G4[G4[G4-[G4 ---34343434
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060606 Outlook
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OUTLOOK [G4[G4[G4-[G4 ---1]1]1]1] [G4[G4[G4-[G4 ---2]2]2]2]
While we are presenting the 12th edition of our sustainability report, we are already thinking and looking further. The main challenge we feel we have to face is finding a balance between new technologies and the proper use of them. We do not consider machines able to take over the job made by humans. We rather think that new technologies could replace old and automatic tasks. We also think that the lack of innovation does not help employment’s growth. In the near future, we would successfully train workers capable to use the new machines so that a perfect mechanism in which the company optimizes the use of the available resources starts. With that aim in mind, we choose to keep investing in young graduates, in addition to R&D about innovative solutions for the soles. The measures of the Italian Government in favor of the “Industry 4.0” lead us to a path ingrained in our DNA. The challenge is, therefore, to analyze and elaborate the thousand data provided by the new technologies, as well as searching for the services not reachable by medium size- companies until yesterday (i.e. the preventive maintenance). We expect for machines able to give us feedback about wear, life and improper use of their own components. The objective is to improve workers’ safety and to have more guaranties about the use of resources. Our two brands Wellfeet and GLE, intended for specific niches, are successfully walking their path in a more and more competitive market, where quality is often bargained with price. We truly believe that design, architecture and “Made in Italy” products will find their place in that market, and will let us keep working in the name of the concept “think global, act local”.
Rosaria Ercoli, General ManManagerager of Eurosuole S.p.a
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070707 The GRI G4 Content Index
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GRI CONTENT INDEX
GENERAL STANDARD DISCLOSURES PAGE NUMBERNUMBER// EXTEXTEXT.EXT ... ASSURANCE RRR EEE MMM AAA RRR KKK STRATEGY AND ANALYSIS G4-1 Statement from the most senior decision-maker of 5, 109 X the organization
G4-2 Description of key impacts, risks and opportunities 5,22,27,63,109 X ORGANIZATIONAL PROFILE
G4-3 Name of the organization 13 X
G4-4 Primary brands, products, and services 13,17,22,81 X
G4-5 Location of the organization's headquarters 13 X
G4-6 Number and names of countries of operation 13 X
G4-7 Nature of ownership and legal form 13 X
G4-8 Markets served 88,89,90 X
G4-9 Scale of organization 13,30,31,32,33,34,35, X 36,61,66,68 G4-10 Total number of employees by employment 66,67,68 X
contract, gender and region G4-11 Percentage of total employees covered by 68, 69 X
collective bargaining agreements
G4-12 Description of the organization's supply chain 63,83,84,91 X G4-13 Significant changes during the reporting period 13,22,51,61 X regarding the organization’s size, structure, ownership,
or its supply chain G4-14 Whether and how the precautionary approach or 27,46 X
principle is addressed by the organization
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G4-15 Externally developed economic, environmental 20,41,70,106,107 X and social charters, principles, or other initiatives to
which the organization subscribes or which it endorses G4-16 Memberships in associations and national/ 103 X
international advocacy organizations IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES G4-17 All entities included in the organization’s 41, 61 X consolidated financial statements or equivalent
documents G4-18 Process for defining the report content and the 20,106 X Aspect Boundaries; and how the organization has implemented the Reporting Principles for Defining
Report Content G4-19 All the material aspects identified in the process 20 X
for defining report content G4-20 The aspect boundary for each material aspect 20 X within the organization and whether the aspect is
material for all entities within the organization G4-21 Whether the aspect boundary for each material 20 X
aspect is outside the organization G4-22 Effect of any restatements of information There are no X provided in previous reports, and the reasons for such restatements of
restatements information provided in the previous reports. G4-23 Significant changes from previous reporting 20 X
periods in the Scope and Aspect Boundaries
STAKEHOLDER ENGAGEMENT G4-24 List of stakeholder groups engaged by the 11,12 X
organization G4-25 Basis for identification and selection of stakeholders 11,12 X
with whom to engage G4-26 Organization’s approach to stakeholder 11 X
engagement G4-27 Key topics and concerns that have been raised 92,102,103 X through stakeholder engagement, and how the organization has responded to those key topics and
concerns REPORT PROFILE
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G4-28 Reporting period 107 X
G4-29 Date of most recent previous report 107 X
G4-30 Reporting cycle 107 X G4-31 Contact point for questions regarding the report or 107 X
its contents G4-32 GRI Index with “in accordance” option chosen and 107 X
references to External Assurance Reports G4-33 Organization’s policy and current practice with 41, 107 X
regard to seeking external assurance for the report GOVERNANCE G4-34 Governance structure of the organization, including 14,15,63,107 X committees of the highest governance body and those responsible for decision-making on economic,
environmental and social impacts ETHICS AND INTEGRITY G4-56 Describe the organization’s values, principles, 6,7 X standards and norms of behavior such as codes of conduct
and codes of ethics
SPECIFIC STANDARD DISCLOSURES (EXT. PAGE NUMBER/ IDENTIFIED REASONS EXPLANATION ASSURANCE: NONE) REMARKS OMISSION FOR FOR OMISSION OMISSION DMA AND INDICATORS CATEGORY: ECONOMIC MATERIAL ASPECT: ECONOMIC PERFORMANCE G4-DMA Generic Disclosures on Management 6,15
Approach G4-EC1 Direct economic value generated and 34,35,37,38
distributed CATEGORY: ENVIRONMENTAL MATERIAL ASPECT: MATERIALS G4-DMA Generic Disclosures on Management Approach 20,22,91 G4-EN1 Materials used by weight or volume 98 MATERIAL ASPECT: ENERGY G4-DMA Generic Disclosures on Management 93
Approach G4-EN3 Energy consumption within the 95
organization
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G4-EN5 Energy intensity 95 G4-EN6 Reduction of energy consumption 95,93 MATERIAL ASPECT: WATER G4-DMA Generic Disclosures on Management 96
Approach
G4-EN8 Total water withdrawal by source 96
MATERIAL ASPECT: EMISSIONS G4-DMA Generic Disclosures on Management Approach 25,92,93 G4-EN21 NOx, Sox and other significant air emissions 97,98 MATERIAL ASPECT: EFFLUENTS AND WASTE G4-DMA Generic Disclosures on Management Approach 92,97 G4-EN23 Total weight of waste by type and disposal 97,100 method G4-EN24 Total number and volume of No spills were significant spills reported in 2016. G4-EN25 Weight of transported, imported, exported, or 97 treated waste deemed hazardous under the terms of the Basel convention annex I, II, III, VIII, and percentage of transported waste shipped internationally CATEGORY: SOCIAL SUBSUB----CATEGORY:CATEGORY: LABOR PRACTICES AND DECENT WORK MATERIAL ASPECT: EMPLOYMENT G4-DMA Generic Disclosures on Management
Approach 24,25,64,102
G4-LA1 Total number and rates of new employee 66,67 hires and employee turnover by age group, gender
and region
G4-LA2 Benefits provided to full-time 69 employees that are not provided to temporary or part-time employees, by
significant locations of operation G4-LA3 Return to work and retention rates after 66,68 parental leave, by gender MATERIAL ASPECT: OCCUPATIONAL HEALTH AND SAFETY G4-DMA Generic Disclosures on Management 72,74
Approach
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G4-LA6 Type of injury and rates of injury, 25,72,73 occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by
region and by gender G4-LA8 Health and safety topics covered in formal 74 agreements with trade unions MATERIAL ASPECT: TRAINING AND EDUCATION G4-DMA Generic Disclosures on Management 74 Approach G4-LA9 Average hours of training per year per 26,66,74 employee by gender, and by employee category MATERIAL ASPECT: DIVERSITY AND EQUAL OPPORTUNITY G4-DMA Generic Disclosures on Management 68 Approach G4-LA12 Composition of governance bodies and breakdown of employees per employee category 64,66,67,68 according to gender, age group, minority group membership, and other indicators of diversity MATERIAL ASPECT: LABOR PRAPRACTICESCTICES GRIEVANCE MECHANISMS G4-DMA Generic Disclosures on Management No grievances have Approach been reported in 2016. G4-LA16 Number of grievances about labor No grievances have been practices filed, addressed, and resolved reported in 2016. through formal grievance mechanisms.
SUBSUB----CATEGORY:CATEGORY: SOCIETY MATERIAL ASPECT: LOCAL COMMUNITIES G4-DMA Generic Disclosures on Management 102,103
Approach G4-SO1 Percentage of operations with implemented 38,102,103 local community engagement, impact assessments,
and development programs SUBSUB----CATEGORY:CATEGORY: PRODUCT RESPONSIBILITY MATERIAL ASPECT: CUSTOMER HEALTH AND SAFETY G4-DMA Generic Disclosures on Management 72
Approach
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G4-PR2 Total number of incidents of non- There have been no incidents compliance with regulations and of non-compliance with voluntary codes concerning the health regulations and voluntary and safety impacts of products and codes concerning health and services during their life cycle, by type of safety impacts of our products in 2016. outcomes
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CONTACTS
DESIGN AND CONTENTS: GIORGIA GIUSTOZZI, PhD
FOR SUGGESTIONS AND INFORMATION: [email protected] [email protected]
EUROSUOLE S.p.a. VIA S.PERTINI, 8, INDUSTRIAL ZONE "A" CIVITANOVA MARCHE (MC), ITALY
WEBSITE: www.eurosuole.com
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