PSC - Sustainability Report by CB&C Lab

SUSTAINABILITY

R E P ORT

2017

LETTER TO STAKEHOLDERS The presentation of an Industrial Group having a complex and articulated structure, such as Prima Sole Components (PSC), cannot ignore, for its correct understanding the vision of the company itself along with its mission and its values; only by doing so, its market positioning and effectiveness along with the quality of its acting can be fully understood. PSC has been operating on the market for over 40 years in five different countries and on two different continents with more than 2500 employees wanting to become a global player in the automotive, motor vehicle and household appliances sector, able to serve its customers worldwide carrying out a long-term flexible and globalized partnership based exclusively on high levels of competitiveness, quality and service. The process of value creation and growth of PSC is closely-knit with the prosperity of the territory in which it operates, since the development of the Group must contribute to the improvement of the conditions of the local communities in which it operates in terms of

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improving the quality of life and of the surrounding environment. Consequently, those values w hich necessarily need to belong to those “belonging” to the PSC group, which are always called to act with honesty and moral integrity, respectful of safety and of the environment, oriented towards the growth of the organization, enhancing the meritocracy, in a context where curiosity and self-criticism must be a constant impulse of one’s daily work. Ultimately, the objective which cannot be renounced, remains the balanced growth of our Group having a logic in which the company interest is certainly prevalent above all those of all the individual members, within an organization frame where it is always possible to identify, in a simple and transparent way, who elaborates strategies and who is called to implement them with unquestionable spirit of cohesion and cooperation. Our reporting needs to be useful to monitor the consistency of our actions to the principles expressed, constantly assessing whether our performance related to “Sustainability” is compatible with the absolute respect of all our stakeholders, on the other hand it needs to be rigorous and intransigence with respect to the shared objectives to be achieved.

Maurizio Stirpe

Presidente di Prima Sole Components S.p.A.

WE WORK TO ACHIEVE HIGH LEVELS OF QUALITY AND COMPETITIVENESS WHILE RESPECTING

PEOPLE AND THE

ENVIRONMENT. PAG E 4

1. ABOUT US

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1.1

IDENTITY, VISION, MISSION AND VALUES

1.2

HISTORY

1.3

STRUCTURE AND ORGANIZATION

1.4

PRODUCTS AND MARKETS

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1.1 IDENTITY, VISION, MISSION AND VALUES Identity and vision Prima Sole Components (PSC - stock company) has been working in the field of plastic components for vehicles, motorcycles and household appliances since 1973. The Group designs, manufactures and promotes innovative, technologically advanced, durable and sustainable products. The main purpose of PSC is to meet customer’s needs by establishing flexible and long-term partnerships based on high levels of competitiveness, quality and service. For this reason, PSC employees are committed to their activities with motivation and competence every day. The goal is to become a global player in the field we work for, through an ongoing process, in order to meet our customer’s needs on the Italian, European and global market.

Mission and ethical vision PSC is committed to creating well-being that can also be extended where it operates. It is PSC’s intention to create and develop a relationship of trust with all stakeholders and to pursue the objectives by harmonizing all actors’ interests involved, in compliance with the provisions of law and the principles of impartiality, reliability, loyalty, fairness and transparency. Honesty is the cardinal principle of all PSC’s activities, an essential element in the business management that characterizes every aspect of its mission:

· · ·

Economic - The Group’s management intends to guarantee value for stakeholders, in compliance with the strictest parameters of economic and financial sustainability.

Productive - PSC designs, manufactures and promotes innovative and technologically advanced products that fully meet our customer’s needs.. and Market

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Social - The Group is directed to main social role awareness of the community, both internal and external side, whether local, national or international. For this reason, PSC launches innovative paths aimed at improving all stakeholders’ quality of life with utmost respect for the environment.

1.1 IDENTITY, VISION, MISSION AND VALUES The group operates in compliance with the following corporate values, by taking shape within PSC staff’s behavior, working both individually and collectively:

❑

Always act with honesty and moral integrity

❑

Being critical with yourself and questioning how to improve yourself

❑

Be respectful of the organization, enhancing meritocracy

❑

Focus on growth and its long-term sustainability

❑

Pay attention to safety and the environment

❑

Be respectful towards customers

The publication of this first Sustainability Report will contribute to spread the above-mentioned values. PSC working practices are structured by following the main and most up-to-date regulations, both national and international. For PSC, the single person is fundamental as well. As a consequence, the Ethical Code of the Group endorses support and respect for human rights, in accordance with the UN Universal Declaration. In addition, an organizational and management model pursuant to Legislative Decree 231, which will be completed starting from 2020, is being developed and formalized.

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1.2 HISTORY 1973

1980-86

1987

1989

1991

1993

1994

PRIMA (stock-company) starts furniture accessories production.

The production of foamed components for the automotive, aeronautic and railway sectors begins.

PRIMA (stock-company) becomes a FIAT supplier for plastic components designed for the outside of cars.

The first design and industrialization center of PRIMA (stock-company) and PRIMA I.Ver, a company for painting plastic materials, was established.

PRIMA CABLAGGI is founded, active in the wiring market for Automotive.

PRIMA Eastern was established in Torino of Sangro, meant to manufacture plastic products, mainly for the FVC SEVEL plant.

SAPCA company was established in Modugno.

1996

PRIMA (stock-company) takes over from Piaggio in the Metalplastic company. In the same year, after Tecnoproduct acquisition,TECNOPRIMA was established. With the sale of Cabling PRIMA and Sapca, PRIMA (stock-company) comes out of the wiring sector.

1999

PRIMA (stock-company) enters the field of appliances with the creation of the P.A.D. and the acquisition of Almec (stock-company), active in the Aluminium die-casting sector.

2000

PRIMA (stock-company) opens its first factory abroad, PRIMA France sas.

2001

2003

The Eripress companies of Cicerale and Shandrani Italy are acquired (with a new name (I.Ver.Plast.).

Prima (stock-company) inaugurates two production sites abroad: Prima Germany GmbH and Prima Poprad sro (Slovakia), first active in the household appliances sector as well as automotive afterwards.

2006

2007

2010

2014

2015

2016

2017

Prima (stock-company) acquires Collins & Aikman Italy Limited and its four production plants.

With the sale of Almec, Prima (stock-company) abandons the die-casting sector.

Prima (stock-company) acquires Plastal Italy, then Sole (stock-company), and holdings in Finalloy companies (aluminum sector), Optimares (aircraft seats).

The internal reorganization is completed with the integration of Prima and Sole (stock-companies) as operating structures. Prima Sole Components (stock-company) was established

PSMM Pernabuco was established as a joint venture with Magneti Marelli for the production of automotive plastic components based in Pernabuco (Brazil).

A new plant was inaugurated in Gricignano d'Aversa, in partnership with Magneti Marelli.

PSC, through TWICE PS, rents a company branch of SGI, a company with plants in Italy, Austria, England, Germany and Brazil, entering the thermosetting sector.

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PSC is a member of two important national trade associations: â&#x20AC;˘ Confindustria, the main representative organization of Italian manufacturing companies of which PSCâ&#x20AC;&#x2122;s President, Maurizio Stirpe, is National Vice-President, with responsibility for Labor and Industrial Relations. PSC is actively and constantly involved in some projects of this association. â&#x20AC;˘ Assonime, the association of Italian joint-stock companies that deals with issues, discussion and analysis, concerning the national economy interests and development.

1.3 STRUCTURE AND ORGANIZATION Prima Sole Components is a single shareholder stock-company, 100% owned by BS Holding, whose registered office is located in Italy, in the province of Frosinone. The governance structure provides a Board of Directors composed of five members remaining in office for three years. Main duties include the definition of business strategies and cover economic, environmental and social fields. The Chairman and Chief Executive Officer have single signature, along with ordinary and extraordinary administration powers. Research and Development

SHAREHOLDERS MEETING

RS Board of Directors

Board of Statutory Auditors

Auditing company

5 members

3 members

Waterhouse Price

Holder of management and responsibilities powers. It deﬁnes general strategic objectives and directions. It analyzes industrial and ﬁnancial strategic plans.

Legality check: - respect for the law and statute. - respect for the principles of correct administration, deﬁning the nomination of auditing company.

Accounting control and ﬁnancial statements report of the consolidated balance sheet.

President

President and CEO manage ordinary and extraordinary administration, along with separate signature power. There are no subjects, except those concerning the law, transferred to the board and / or members. It deﬁnes strategic guidelines in the economic, environmental and social ﬁelds. PAG E 1 1

CEO

resident and CEO manage ordinary and extraordinary administration, along with separate signature power. There are no subjects, except those concerning the law, transferred to the board and / or members.

Strategic Purchases AS Finance Administration Control AFC BU’s CEOs ADBU

SO Operating companies

MANAGEMENT It manages the activities, according to the objectives approved by the BoD and proposed by the AD

1.3 STRUCTURE AND ORGANIZATION All the companies covered by Sustainability Report, which can be consulted in the following picture, coincide with those that depend on Sole Components, Prima Components and Eldoprima Components holding companies. Prima France Sas is not present in this report as it has concluded its activities in the reporting year, as well as Zingali Acoustics, Optimares, Twice PS and Polplastic which, being excluded from the consolidated financial statements, are not subject to reporting.

Stirpe Patrizia

Stirpe Maurizio

Stirpe Curzio

BS Holding Prima Sole Components

PSMM

Sole Components

Prima Components

Eldoprima Components

PSC Gestione Partecipazione

PSMM Campania

Sole Suzzara

Prima France

Zingali Acoustics

PSMM Pernambuco

Sole Pontedera

Prima Automotive

Prima Poprad

Optimares

Twice PS

Polplastic

Sole Oderzo Sole Worth

Tecnoprima Prima Eastern S.P. Prima Prima Components Anagni Prima Components Ferentino

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1.3 STRUCTURE AND ORGANIZATION PSC plants are present in five countries (Italy, Germany, France, Slovakia and Brazil), distributed in two different continents.

Sole Oderzo Sole Suzzara

Sole Worth

Sole Pontedera

Prima Components Anagni Tecnoprima

Prima Eastern Prima Components Ferentino SP Prima Prima Sole Components

Germany 1

PSMM Campania

Prima Poprad

Italy 9

registered office in Torrice (FR) PAG E 1 3

Slovakia 1

PSMM Pernambuco

Brazil 1

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1.3 STRUCTURE AND ORGANIZATION PSC figures (data referring to 31/12/2017 and / or to financial year 2017)

2704

Employees

€ 651.058.754

124.742.481

Net turnover

Share Capital

Parts sold

€ 106.353.527 Net capital

€ 132.936.692 Loan capital

€ 239.290.219 Total capitalization

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1 Brazil

1 Germany 1 Slovakia 9 Italy

1.4 PRODUCTS AND MARKETS Prima Sole Components is active in the field of plastic components for vehicles, motorcycles and household appliances, aiming at becoming a landmark in the international market. Through the policy of market penetration and diversification, it pursues the objective of partnership implementation with the main OEMs (car manufacturers), along with production sites localization in the areas of customer’s plants. There are three sectors in which the market is diversified:

· Motor vehicles

· Motorcycles

· Household appliances

Automobile

Heavy commercial vehicles

Light commercial vehicles

In 2017, with the introduction of GSI companies, a new technology was acquired, including thermosetting materials molding, and new customers in the tractor sector, whose relationship will be consolidated by 2018. Characterizing PSC processes are:

Thermoplastic molding

surface coating

gluing

Foaming (sphuell)

Welding

Assembling

Installation

The main products for the automotive market are: Vehicles exterior: spoiler, radiator grilles, under-vent screens, under-door moldings, external uppercut Vehicles internal: central cabinets, front drawers, dashboard components, interior coverings, seat covers Engine repair Wheel arch linings

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1.4 PRODUCTS AND MARKETS sectors 65%

19%

Vehicles

Commercial vehicles

Heavy vehicles

Domestic appliances

Motorbike

Our products are present on the Italian, European and world market, with the main OEMs: FCA, CNH, BMW, Volkswagen, Daimler, Volvo. Markets

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49%

43%

Italy

Europe

World

2. MATERIALITY AND METHODOLOGY 2.1

REPORTING PRINCIPLES

2.2

MATERIALITY ASSESSMENT

2.3

STAKEHOLDER ENGAGEMENT

2.4

MATERIALITY MATRIX

2.5

MANAGEMENT APPROACH

2.6

INDEPENDENT EXTERNAL ASSURANCE

2.1 REPORTING PRINCIPLES With this first Sustainability Report, PSC aims to communicate policies, commitments and strategies to its stakeholders, meant to be followed in the area of sustainability. This Report complies with the Global Reporting Initiative (GRI) standards and is prepared in accordance with the “Core” option.

REPORTING PRINCIPLES

Reporting principles for deﬁning report content:

Stakeholder Inclusiveness Sustainability Context Materiality Completeness Reporting principles for deﬁning report quality:

Balance Comparability Accuracy Timeliness Clarity Reliability This Sustainability Report refers to all Prima Sole Components stock companies. Prima France Sas,which has completed its activities in the reporting year, and the participations Zingali Acoustics, Optimares, Twice PS and Polplastic which, being excluded from the 2017 consolidated financial statements do not fall within reporting boundaries, are not included in the present Report. The Sustainability Report refers to the 2017 solar year and will be drawn up annually in the future.

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2.2 MATERIALITY ASSESSMENT The main reference established by GRI Standards for defining Sustainability Report content is materiality, which is the principle that determines which relevant topics are sufficiently important that it is essential to report on them, because they influence decision making and performance of the Company and its stakeholder.

The process of material topics definition took shape for the first time in 2017 and was divided into three phases:

Priority topics identification for company and stakeholders. These topics will be reconsidered and possibly modified or integrated every year.

Allocation of specific relevance, based on a numerical index, to each selected topic. The reference scale starts at 0 (“No relevance”) and reaches up to 5 (“Very high relevance”).

Identification of topics which are at least of “medium relevance” , corresponding to a score of 3 on the reference scale. These identify with the material topics, on which PSC undertakes to implement concrete and coherent initiatives. The connection between the material topics of PSC and those of GRI Standards will be always highlighted and reported in the GRI Content Index (pp. 91-94)

The material topics identified and the relevant definitions are shown on the following pages. In order to make management easier and more effective, the material topics identified have been grouped into three macro-topics:

• Generated Value

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• Workers

• Natural resources and environment

2.2 MATERIALITY ASSESSMENT Macro-topic

Generated Value

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Material topics

Topic definition

Risk management

Operating according to risks and opportunities in the economic, social and environmental field, for Prima Sole Components (PSC) and its activities.

Research, development and technological innovation

Research and technological innovation as strategic factors to increase our products competitiveness, in line with sustainable development.

Relationships with business partners

Relationships with our business partners means acknowledge of cooperation value, synergies and social responsible behavior, in order to achieve higher levels of knowledge and quality.

Customer satisfaction and product quality

Customer care services and products development following high quality standards, as basic elements to establish a lasting relationship and mutual satisfaction.

Compliance

Guarantee of compliance with binding or voluntary regulations through the employees endorsement and thanks to appropriate organizational and management models.

Responsible management of the supply chain

Involvement of the supply chain by sharing the principles, policies and tools for sustainability and social responsibility.

Local communities

Attention and comparison with the local community expectations, through an open, transparent and constructive dialogue.

2.2 MATERIALITY ASSESSMENT Macro-topic

Workers

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Material topics

Topic definition

Employees well-being

Generate well-being for employees, through an organization and an environment thatfoster commitment for quality along with personal and professional satisfaction achievement.

Health and safety at work

Guarantee safety at work and health protection processes throughout all procurement and production stages.

Personnel training and development

Consider employees as a fundamental element of the company's value, who shall grow through customized training in order to develop individual skills.

Equal opportunities and diversity

Enhance personal and cultural diversities of partners, employees, suppliers and customers, avoiding discrimination and encouraging inclusion.

2.2 MATERIALITY ASSESSMENT Macro-topic

Natural resources and environment

Material topics

Topic definition

Energy consumption

Responsible use of energy resources achieved, when possible, by technologies and energy saving activities along with renewable resources option.

Emissions in the atmosphere

Carry out operations, by taking the opportunities to prevent and mitigate emissions in the atmosphere, by protecting air quality and contrasting climate change.

Sustainable production

Opt for management of models in line with best practicesand international standards, in order to achieve measurable and certifiable sustainability target.

Waste management

Apply, when possible, the best practicesfor reduction, through prevention, and waste recycling.

Water resource protection

Responsible use of water thanks to technologies and practicesaimed at reducing water withdrawn and at maintaining its original quality

Biodiversity

Consider biodiversity as a resource to be protected, as a common value, essential for the Company, territories and related communities.

This Sustainability Report reflects the materiality assessment conducted by PSC and in each chapter the aspects concerning the three macro-topics are described in details. This approach allows a more flexible consultation of information and well represents PSC approach to sustainability, according to a model moving from general to more detailed information.

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2.3 STAKEHOLDER ENGAGEMENT In order to define PSC material topics, stakeholders’ expectations and points of view were identified. This operation took shape throughthe stakeholder engagement, which was divided into two phases:

1. Identification of stakeholders: this process has followed vthe AA1000 Stakeholder Engagement Standard (AA1000SES) 2015 guidelines and has led to the identification of the categories listed in the table below, each accompanied by its related description.

Stakeholder

Definition

Worker

Employees working for or on behalf of PSC, including its representatives (e.g. trade unions)

Supplier

PSC products’ or services’ providers

Customer Investor Society and local communities Institutions ONG and Associations Media and press

Customers of PSC products PSC shareholders The social context in which PSC sites are located, that can influence its activities The set of institutions that can influence PSC activities (e.g. Region, Province or Municipality in which PSC sites are located) Non-profit associations and private organizations operating in areas that influence PSC activities (e.g. environmental associations or sector associations) International, national and local media (e.g. television, press, radio and web) which can communicate about PSC actions and initiatives

2. Definition of engaging methods and implementation: indirect engagement methods were chosen for the first year of reporting. For each category of stakeholder, therefore, the documentation needed to build up different opinions and requests on material topicswas selected and analyzed. This process has led to the identification of topics relevance for stakeholders. PAG E 2 5

2.4 MATERIALITY MATRIX

HIGH

Health and safety at work Research, development and technological innovation

Emissions in the atmosphere

Employees well-being Energy consumption MEDIUM

Biodiversity

Customer satisfaction and product quality

Personnel training and development

Compliance

Local communities Equal opportunities and diversity

Water resources protection

Relationships with business partners

LOW

Risk management

Waste management

Sustainable production

LOW

Relevance of topics for stakeholders

Thanks to materiality assessment and stakeholder engagement, the materiality matrix was developed. It graphically summarizes the relationship between the relevance of the material topics for PSC and its stakeholders.

MEDIUM

Responsible management of the supply chain

Generated Value Workers Natural resources and environment

HIGH

Relevance of the topics for PSC

PSC systematically manages the emerged requests with appropriate tools, including the practices established by the management systems adopted in the Company.

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2.5 THE MANAGEMENT APPROACH The Disclosure on Management Approach (DMA) describes the material topics identified and PSC tools to manage its economic, environmental and social impact. For this purpose, it was necessary to define:

1. Topics boundaries, that is to say to what extent positive or negative impact of PSC activityoccur, both internally and

externally to the Company.

2. Policies driving the organization 3. Declared commitments 4. Goals and targets for the reporting year 5. Responsibilities assigned to different levels within company organization 6. Financial, human and technological resources provided 7. Processes for collecting stakeholdersâ&#x20AC;&#x2122; requests 8. Specific actions

2.6 INDEPENDENT EXTERNAL ASSURANCE This Sustainability Report has been verified externally by Sai Global Italia (stock company), an independent body compared to Prima Sole Components, as reported in the Assurance statement on p. 95

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3. GENERATED VALUE 3.1 3.2 3.3 3.4 3.5 3.6 3.7

RESOURCES MANAGEMENT

RESEARCH, DEVELOPMENT AND TECHNOLOGICAL INNOVATION RELATIONSHIPS WITH BUSINESS PARTNERS

CUSTOMER SATISFACTION AND PRODUCT QUALITY COMPLIANCE

RESPONSIBLE MANAGEMENT OF THE SUPPLY CHAIN LOCAL COMMUNITIES

3.1 RISK MANAGEMENT PSC, the Group’s holding company, defines in the industrial plan the vision, the mission and the medium and long-term strategies. Once the guidelines have been set up, the operational plans, following business units and sites connected to them, are developed. It is PSC management to look into functional analyzes and evaluations towards operational planning draft, which is an activity carried out in an interdisciplinary manner thanks to the action of various companies’ contribution, but without underestimating relevant external actors, such as customers and suppliers. In the industrial PSC planning, the strategic guidelines are:

Competitiveness: the Group’s ability to supply competitive products and to stay in the market, facing competition.

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Technological innovation: it can be the first step for the improvement of existing products and processes, in order to increase the quality of products, its performance and flexibility, as well as to reduce production costs. However, it also means introducing new products, innovative production and distribution methods, continuously looking for superior quality.

Globalization: distribution of production on a local and global scale, according to customer’s needs.

3.1 RISK MANAGEMENT It is the business holding to identify activities in line with PSC strategic guidelines; afterwards, these are monitored by each production site, according to the logical process as follows: PSC analysis of the business plan: each business unit defines how to apply internal strategic guidelines established by the Group. Identification of the relevant factors thanks to the S.W.O.T. Analysis (Strengths Weaknesses Opportunities Threats): it is therefore possible to identify the strengths and weaknesses of the internal context, as well as the external risks and opportunities. These elements are then related to the interested parties. Identification assessment of significance factors: in particular the probability of occurrences and their impact on market share, competitive advantage and reputation are taken into consideration. Definition of operational planning, taking into account the related risks, in particular:

√ Avoid risk by deciding not to start or continue the activity that led to its appearance

√ Take or increase risk to pursue an opportunity

√ Remove the source of risk

√ Change the probability

√ Change the consequences

√ Share the risk with a partner (also through contractual formulas for financial risk control

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3.1 RISK MANAGEMENT Actions to face risks and exploit opportunities, also in reference to sustainability, are the inputs necessary to define the operational planning in line with the company strategy.

The Group has also stipulated policies with important companies in this field to cover the main business risks in industrial activities. The PSC insurance coverage is extensive and covers all material damages to buildings, plant, machinery and goods owned by the Group companies, whether they are present in the PSC plants or at third parties.

Limits and specific exemptions vary according to other factors such as weather events, third party malicious acts, structural collapse, liquid leakage and mechanical breakdowns. Any economic losses that may result from business interruptions or caused by factors such as those listed above are also covered by insurance. Finally, any damages to third parties were also insured, resulting from the claims subject to the policy (recourse to third parties and interruption and suspension of third party activities).

A policy consisting of three sections concerning the compensation obligations was signed by the Group companies. In detail: third-party liability, civil liability workers and civil liability products. Each of these covers operates with ceilings and limited deductibles.

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3.1 RISK MANAGEMENT Careful and proper management of business risks has succeeded in making PSC a group that generates value and wealth, by distributing a part of it to its stakeholders.

Economic value generated by PSC Revenues and other operating incomes

Amounts (€) € 651.058.754

Economic value distributed by PSC Operating costs, remuneration of employees, remuneration of lenders, remuneration of public administration and investments for the community

€ 602.909.920

Economic value retained by PSC Economic value generated Distributed Economic Value * Data from the consolidated financial statements

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€ 48.148.834

RISK MANAGEMENT

Generated economic value: Revenues and other operating incomes Distributed economic value: operating costs, employee compensation, remuneration of lenders, remuneration of the public administration and investments for the community Economic value retained: generated economic value distributed economic value

PSC SPA

Prima Components

€

320.000.719,00

299.895.114,00

78.401.706,00 387.772.480,00 57.013.084,00

€

320.579.158,00

282.738.253,00

79.851.036,00 360.687.409,00 55.785.913,00

€

-578.439,00

17.156.861,00

*Total value of production and total cost of production for each Company in the group

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PSMM

-1.449.330,00

Sole Components

27.085.071,00

Eldoprima Components

1.227.171,00

ECONOMIC VALUE FOR GEOGRAPHICAL REGION VALORE ECONOMICO PER REGIONE GEOGRAFICA* Generated economic value: Revenues and other operating incomes Distributed economic value: operating costs, remuneration of employees, remuneration of financiers, remuneration of public administration and investments for the community Retained economic value: generated economic value distributed economic value

ITALY

EUROPE

€

1.011.736.633,00

67.570.870,00

63.775.600,00

€

970.833.248,00

66.661.921,00

62.146.600,00

€

40.903.385,00

908.949,00

1.629.000,00

*Total value of production and total cost of production based on geographical location

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WORLD

3.2 RESEARCH, DEVELOPMENT AND TECHNOLOGICAL INNOVATION Always taking an interest in research and development, also in partnership with its customers, PSC has two dedicated centers in Oderzo (55 employees) and Turin (13 employees). After the reorganization carried out in 2012, a Director was appointed to coordinate the research and development area, coordinating the three-year activities, in collaboration with the Head of the Program Management:

Foreign customers

FCA Group

Appliances / Brazil

In order to identify and to share the most effective operations, useful to the whole Group, a cutting-edge business-intelligence platform has been developed.

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3.2 RESEARCH, DEVELOPMENT AND TECHNOLOGICAL INNOVATION New opportunities to develop innovative products and processes are also offered by the possibility of financing research projects by the European Community. This allows PSC to propose itself as a privileged interlocutor, especially in those critical sectors such as finishing. In 2017 some companies of PSC group located in Italy benefited from tax relief for a total of 2.146.621 euros, divided as follows:

Tax relief

32%

40%

Sole Components

Sole Oderzo

Sole Suzzara

Sole Pontedera

Prima Components Anagni

Prima Components Ferentino

SP Prima

The foreign plants have not received tax relief in the reporting year.

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3.2 RESEARCH, DEVELOPMENT AND TECHNOLOGICAL INNOVATION

Preferential ﬁnancing

Non-repayable grant

€ 100.260

€ 546.433 Projects

Law 46 DM 11.12.2007 Technological innovation programs presented from 18.03.2003 to 13.01.2003

In mold decoration applied to the production of car components with high aesthetic content

Sustainable-industry mobility procedure 2015

LIVE - Light veichles eco-compatible optimized for people transport

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Preferential ﬁnancing

€ 100.260

Non-repayable grant

€ 66.840

€ 479.603

3.3 RELATIONSHIPS WITH BUSINESS PARTNERS The partnerships that PSC build with its customers are traditionally very solid, so that some of the Groupâ&#x20AC;&#x2122;s production sites are located in the same areas that host the relevant environment.

Examples are Sole Suzzara, which is located in the IVECO plant district, as well as Sole Pontedera, which is located in the Piaggio district.

PSC has two joint ventures with Magneti Marelli: one (50%) in the Pernambuco plant in Brazil, the other (70%) for the Gricignano di Aversa plant. In both cases, the following years perspective is to acquire 100% of the company control.

In the new code of conduct definition, particular emphasis will be placed on transparency in relations (anti-competitive behavior) and on the correctness and integrity of company conduct (anti-trust and monopoly practice). In the reporting year, the company was not affected by legal actions in anti-competitive behavior, anti-trust or monopoly operations.

The PSC partnership relations with its suppliers are also characterized by solid bonds. The strategic purchasing department defines PSC framework agreements with large groups that produce, for example, raw materials and paints. In addition, it promotes the growth of suppliers in the areas they work for, by supporting them within their facility, in order to achieve the highest environmental and safety standards.

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3.4 CUSTOMER SATISFACTION AND PRODUCT QUALITY PSC is committed to providing quality of products and services, which can meet or even exceed customer’s expectations.

New plants subjected to constant maintenance, combined with state-of-the-art control systems, contribute to monitoring and repeatability processes, as well as quality of products. In case of unmanageable situations, they are monitored through statistical studies that affect the main variables, so to allow an immediate intervention and restoration.

Each site monitors customer satisfaction and the resulting reports are analyzed by both business units and the Group holding company. This process aims to ensure that attention is always focused on customer’s needs. In the development phase of each new product, its impact, according to the precautionary approach, is assessed through the Failure Mode and Effect Analysis (FMEA), a priority risk assessment index, based on three factors: severity, probability and detection.

The same process is used to assess possible functionality problems, aesthetics and / or related to the product’s assembling that may be relevant to the customer.

100% of the finished products supplied on the market are registered on IMDS (International Material Data System), whereas all the materials used for production are collected, updated, analyzed and archived. All substances and mixtures used in the production phase, are accompanied by Safety Data Sheet (SDS) with information on physic-chemical, toxicological and environmental hazard properties, necessary for a correct and safe handling.

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3.4 CUSTOMER SATISFACTION AND PRODUCT QUALITY Product safety and compliance with legal requirements are evaluated in FMEA, by adopting the most stringent parameters. During the reporting period, PSC had no cases of non-compliance with voluntary regulations and / or codes regarding health and safety impact on its products and services. The monitoring of customer satisfaction along with the supplied product is a constant process. This is due to the fact that, since most of our customers deal with the automotive sector, there are online platforms where reports, such as complaints and rejects, are given in real time. Moreover, monthly assessments are made by taking into account the quality of products and the service provided. Each production site is functionally responsible for the management of customerâ&#x20AC;&#x2122;s complaints. Monitoring and timing review assessments received by customers are the main subject of management committees, business units and our Group.

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3.5 COMPLIANCE The Group companies recognize that compliance with existing laws and regulations in all the countries we work for, is an essential principle.

Business units managing directors are responsible for compliance with the binding legislation also by means of its delegates (plant managers or external professionals) concerning all specific issues.

Many of our offices are ISO 9001, ISO 14001 certified, some OHSAS 18001 / ISO 45001, with the aim of standardizing the business activities and therefore ensuring high performance, by achieving predefined objectives and constant optimization. Furthermore, many of our offices are IATF 16949 certified, a quality management system for the automotive sector, developed by the International Automotive Task Force (IATF). Our PSMM plants in Campania, Sole Oderzo, Sole Pontedera and Sole Worth are currently involved in getting this certification.

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3.5 COMPLIANCE CERTIFICATIONS

ISO 9001

ISO 14001

OHSAS 18001/ISO 45001

IATF 16949

Prima Components Anagni Prima Components Ferentino Prima Eastern SP Prima Tecnoprima Prima Poprad PSMM Campania

Scheduled audit 29-30-31 / 10/2018

PSMM Pernabuco Sole Oderzo

Pending the issue of the certificate

Sole Suzzara Sole Pontedera Sole Worth

Performed stage1, planned stage2 WK51 Scheduled stage1 in November stage2 in December 2018

Finally, it is important to underline that in the reporting year, no cases of non-compliance with the regulations and standards were detected as for environmental, economic and social regulations. PSC attaches significant importance to penalties exceeding 50.000 euros. PAG E 4 3

3.6 RESPONSIBLE MANAGEMENT OF THE SUPPLY CHAIN The strategic guidelines and general criteria related to the supply of materials and services are established by PSC Board of Directors. Such materials and services, which can have an impact on the quality of the finished product, are considered strategically significant. In particular, materials are divided into four categories:

•

raw materials including thermoplastic resins, paints, glues and two-component resins

•

semi-finished products and components

•

products from external processes, such as molding, painting and assembly

• packaging

Type of Suppliers

Total Suppliers Suppliers in Italy

Suppliers Abroad

Partners Suppliers

Set Suppliers

Plastic raw materials

Paints

Purchase components

256

145

111

(paint-molding-assemblies)

Packaging

Total

440

259

178

114

External works

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3.6 RESPONSIBLE MANAGEMENT OF THE SUPPLY CHAIN Nei servizi strategici sono compresi: > selections

rework and repairing

tools calibration and laboratory tests

advanced warehouses

The selection of suppliers is entrusted to the strategic purchasing department which, in order to prevent any risk in terms of supply, performs an initial assessment where the following aspects are analyzed:

•

financial stability

•

suitability of available resources, including people and infrastructure

•

turnover in the automotive sector

•

logistic process

PAG E 4 5

3.6 RESPONSIBLE MANAGEMENT OF THE SUPPLY CHAIN Moreover, in line with sustainability principles, the purchasing department increasingly supports the consistent approach towards ethical standards. For this reason, PSC prefers suppliers who adopt ethics code that regulate subjects, such as respect for human rights and anti-corruption measures. The procurement management also requires suppliers with ISO 9001 quality management certification system. In the suppliersâ&#x20AC;&#x2122; selection, it is considered an asset having certifications such as health and safety management systems (OHSAS 18001 / ISO 45001), as well as environmental management (ISO 14001). Suppliers are then required to demonstrate implementation, by proving how those measures are able to improve the quality of products and / or processes, setting up of training courses for internal staff, along with accurate methods development in managing other suppliers. All suppliers of raw materials and components are required to enter definitive information on the basic composition of products, components and materials, directly on the International Material Data System (IMDS) system. In this way it is possible to comply with the European regulation on end-of-life vehicles (DIR 2000/53 / EC) and its amendments. If the customer has contractually defined a list of designated suppliers (the so-called â&#x20AC;&#x153;imposed suppliersâ&#x20AC;?), the oil product to be used for production is purchased from these companies. In any case, even this category of suppliers is subject to monitoring, unless otherwise specified in the agreement, which the customer shall define as a specific contract. Since 2017, PSC purchasing management has provided a business intelligence tool, aimed at promoting the utmost transparency and traceability of the purchasing process. In addition to this innovation, there were no substantial organizational changes during the reporting year in the supply chain.

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3.7 LOCAL COMMUNITIES For PSC it is crucial to build up relationships with the local communities where the plants are located, an aspect that is meant to be enhanced over the years ahead. As an example, it is reported that since 2015, PSC has collaborated with the Dialogue Community of Trivigliano, in the province of Frosinone, which is active in the recovery of people who had problems with addiction to drugs and alcohol. In particular, the Prima Components of Anagni plant is involved in a project that allowed six new human resources from the community to enter the staff. In the years ahead, there is an intention of gradually entering other resources in the factory, so to complete their recovery path in the community, following simultaneously an assessment of standardized requirements. The PSC reference shareholders are also involved in the activities of Frosinone Calcio. Since October 2017, this football club has had a sports facility at its disposal, named after the PSC group founder Benito Stirpe, an international leader in terms of aesthetics and construction standards. The structure hosts 16.310 spectators and along with the Cittadella dello Sport and future expansion projects for musical events, it is totally for the benefit of the community. In order to allow PSC personnel sites located near the plant to attend sports events of Frosinone Calcio, various forms of involvement have been arranged.

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4. WORKERS

PAG E 4 8

4.1

FACTS AND FIGURES

4.2

EMPLOYEES WELL-BEING

4.3

HEALTH AND SAFETY AT WORK

4.4

PERSONNEL TRAINING AND DEVELOPMENT

4.5

EQUAL OPPORTUNITIES AND DIVERSITY

PAG E 4 9

4.1 FACTS AND FIGURES For PSC human resources are a fundamental and central element of their work. It is therefore the primary objective of the Group to create and maintain relationships based on loyalty and mutual trust. As a result, the management of labor relations and collaboration is focused on respect of workers’ rights and on an all-round view of their contribution by defending their development and professional growth. There are 2,704 employees of consolidated companies at 31 December 2017, an increase over the previous year following the establishment of PSMM Campania. The workforce is divided into categories linked to cost centers and for which the following definitions can be taken as a reference: • Structure: responsible for the function of production sites, staff (purchasing, personnel, administration) and support bodies (commercial, R & D)

•

Direct: people directly involved in production (machine operators)

•

Indirect: people indirectly involved in production and not directly involved in the machines (shift leaders, forklift drivers, maintenance workers)

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4.1 FACTS AND FIGURES Workers Total number of workers 2436

Company

Total women 736

Total workers

Gender

Prima Components

947

116 831

Sole Components

1229

553 676

Eldoprima Components

261

67 194

sdasdsa asaS

PAG E 5 1

Total man 1701

4.1 FACTS AND FIGURES

Type of contract

Prima Sole Components

Prima Components

PSMM

Sole Components

Eldoprima Components

Permanent full-time

1 4

60 612

145 574

353 571

30 91

Permanent part-time

0 0

27 14

2 0

74 5

0 0

Temporary part-time

0 0

37 103

Temporary full-time

0 0

0 1

0 0

Direct

0 0

69 388

102 333

304 201

47 103

Indirect

0 0

2 177

27 189

53 254

2 87

Structure

1 4

14 63

17 53

70 122

10 12

Roles (employees)

In the reporting year, 493 employees worked for the premises of the group, with a supply contract of which 164 were females and 329 were males. All workers with a supply contract fall into a direct category.

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4.1 FACTS AND FIGURES The distribution of human resources can be consulted in the following table.

Prima Components

Italy Italia

Europe Europa

World Mondo

Permanent contract Temporary contract

713 0

0 0

Prima Components PSMM

Italia Italy

Europa Europe

Mondo World

Permanent contract Temporary contract

281 0

0 0

440 0

PrimaComponents Sole Components

Italia Italy

Europa Europe

Mondo World

Permanent contract Temporary contract

924 9

53 18

0 0

Prima Components Eldoprima Components

Italia Italy

Europa Europe

Mondo World

2 0

119 140

0 0

Italia Italy

Europa Europe

Mondo World

5 0

0 0

Permanent contract Temporary contract Prima Sole Components Components Permanent contract Temporary contract

PAG E 5 3

4.2 EMPLOYEES WELL-BEING PSC promotes respect for physical and cultural integrity of the person. This is why it guarantees, on top of the list, all working conditions that enhance individual dignity. It also operates to have safe working environments, which constantly adhere to accidents regulation, as well as protection of hygiene and health at work. RECRUITMENT AND TERMINATIONS In the following tables it is possible to check figures of recruitment and terminations for each company as a subject of this report. The data are also detailed with regard to specific parameters such as age, gender and nationality.

Prima Components 8

PSMM 395*

Sole Components 63

Eldoprima Components 201

under 30 years 30 â&#x20AC;&#x201C; 50 years Over 50 years

0 7 1

57 272 66

26 30 7

91 105 5

Male Female

7 1

334 61

40 19

141 60

Italy 8

Italy 277 Brazil 118

Italia 49 Moldavia 2 Romania 5 Equador 1 Germany 3 Iran 1 Croatia 1 India 1

1,1%

57,7%

6,3%

Recruitments

Country

Intake rate

*PSMM Campania was established in 2017 with the employment of 277 workers PAG E 5 4

Italy 1 Slovakia 199 Romania 1

77%

4.2 EMPLOYEES WELL-BEING Prima Components

PSMM

Sole Components

Eldoprima Components

Terminations

120

147

under 30 years 30 â&#x20AC;&#x201C; 50 years Over 50 years

1 2 0

59 60 1

2 21 3

59 83 5

Male Female

3 0

94 26

22 4

103 44

Contry

Italy 3

Brazil 120

Italy 18 Turkey 5 Romania 2 Germany 1

Slovakia 146 Romania 1

Negative turnover

0,4%

16,6%

2,6%

56,3%

Overall turnove

1,5%

71,4%

8,9%

133,3%

PAG E 5 5

4.2 EMPLOYEES WELL-BEING BENEFIT All collaborators of this organization enjoy some benefits, specified in the following table.

Prima Components

PSMM

Sole Components

Eldoprima Components

Life insurance Health care Invalidity and invalidity coverage Parental leave Retirement provision The definition used for "significant operational offices"

Production plants and other operational offices (of B.U. and R & D)

* Scheduled at PSMM Pernambuco ** Provided in Sole Components, Sole Suzzara, Sole Oderzo and PSMMP for executives, managers and employees *** Provided in Sole Components, Sole Suzzara, Sole Oderzo, Sole Worth and PSMMP for executives, managers and employees

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4.3 HEALTH AND SAFETY AT WORK PSC companies are committed so that employees and collaborators, both of their own and of contractors, respect the accident prevention regulations and the protection of hygiene and health at work. They also work to consolidate and spread a culture of safety, developing risk awareness and promoting responsible behavior by all employees and collaborators, in order to preserve their physical integrity. According to the law (article 35 of Legislative Decree 81/08) all Italian employees of PSC receive adequate training on health and safety. The non-Italian branches of the Group comply with the health and safety regulations of the country they belong to. All employees in Italy have contracts that adhere to the three different types of CCNL (National Collective Labor Agreements):

• Rubber and plastic

• Metal working

• CED

Employees are protected by national contracts also with regard to plants abroad. The union representatives are present in all the Group companies and involve all employees. The relations with PSC are characterized by a constant and open confrontation, achieved both through frequent meetings on specific issues and through institutional moments, as main subjects. Furthermore, it is in full compliance with the provisions of the various National Collective Labor Agreements we establish with trade unions, regarding health and safety, that we make contracts. In every Italian company there are representatives of workers for safety, in line with the provisions of the law 81/08. As provided by this regulation, at least a minimum representative number of workers for safety is present in each establishment*. They speak for the workers and communicate on a regular basis with company management during meetings regarding the subjects they are responsible for. In PSMM factory in Pernambuco, there are formal committees that deal with health and safety at work on behalf of the company’s employees, such as: CIPA - Internal Commission for accidents prevention at work COERGO - Ergonomics Committee that assesses ergonomic improvement needs for various sectors Both Pernambuco and Poprad plant work according to the WCM methodology (World Class Manufacturing) based on ten technical pillars including “safety”.

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4.3 HEALTH AND SAFETY AT WORK Distribution of accidents occurring in Group companies is shown in the following tables.

EMPLOYEES WORKERS Accident rate (IR) Rate of days lost due to injury Professional illness rate Absenteeism rate

Prima Components M F

PSMM M F

15,7 473,8

15,9 483,4

10,6 537,2

0 0

Sole Components M F 14,0 121,1

10,2 203,3

Eldoprima Components M F 36,9 695,8

14,2 898,7

Minor injuries are not considered in the calculation of rates * Accident rate (IR frequency index) = NUMBER OF INJURIES / HOURS WORKED * 1.000.000 ** Rate of days lost (LDR severity index) = TOTAL NUMBER OF LOST DAYS / HOURS WORKED * 1.000.000 Days lost were calculated on scheduled working days. The count of the lost days starts from the day after the accident *** Occupational disease rate (ODR) = TOTAL NUMBER OF CASES OF PROFESSIONAL DISEASE / WORKED HOURS * 1.000.000 **** Absenteeism rate (AR) = TOTAL NUMBER OF HOURS OF ABSENCE / HOURS WORKED * 100 Hours of absence due to illness and unpaid absences (strikes, delays) are considered The absenteeism figure for PSMM considers only Pernambuco, since the data is not available for PSMM Campania,

WORKSHOP WITH ADMINISTRATION CONTRACT Accident rate (IR)

Prima components 6,99

PSMM PSMM C:

There are no workers with a dosing contract

PSMM P:

Data not available

PAG E 5 8

Sole Components Eldoprima components 16,67

There are no workers with a dosing contract

4.4 PERSONNEL TRAINING AND DEVELOPMENT For PSC, staff training and development is a resource to maximize business competitiveness, as well as the motivation and gratification of human resources, through the acquisition of new knowledge and skills. In this view, in 2017, various courses were provided to employees based on a dynamic training and training program, thanks to the constant comparison between the skills acquired and those necessary for the development company’s needs and customers’ requests. •

Specialist and managerial training In order to maintain this plus, the company places its employees, in particular those belonging to key categories, in the conditions to face the new scenarios with the appropriate skills. Massive percentage of training hours were provided for World Class Manufacturing (WCM): a innovation program based on continuous improvement, but also an integrated Japanese derivation system, which helps to cut off waste and loss involving everybody in the application of strict methods and standards.

•

Linguistic training PSC has organized foreign language courses for its employees, designed to provide linguistic skills to cope with everyday work.

•

Specific training on safety at work and environmental issues In line with the provisions on health and safety in the workplace, training courses are compulsory for new employees and updating for all.

PAG E 5 9

4.4 PERSONNEL TRAINING AND DEVELOPMENT At certified production sites, employees are involved in training sessions on environmental issues.

Average training hours PSMM

Sole Components

Eldoprima Components

Male

Female

Struttura

Indiretti

Diretti

Total Average Gender

Employeesâ&#x20AC;&#x2122; Category

Prima Components

* Average training hours per employee = total number of training hours provided to employees / total number of employees ** Average hours of training for employees by gender = Total number of training hours provided to employees by gender/total number of employees by gender *** Average hours of training for employees by category = Total number of training hours provided to each employee category/total number of employees in the category

PAG E 6 0

4.4 PERSONNEL TRAINING AND DEVELOPMENT During 2017, PSC had an IT system that, following to ordinary administration of personnel, is able to manage human resources according to a specific pattern. This starts through the identification of the skills required for a role, which has then to be assessed, to be finally concluded through the definition of a plan for resource development. In 2017 the activity was started on the SP Prima pilot site: this allowed PSC to test the system and consider some possible implementations. Staff assessment systems will be extended to all the other PSC facilities in the coming years. In Italy there is a system of staff involvement that provides, in addition to fixed remuneration, the use of variable remuneration instruments (performance bonus). Currently, PSC does not have a structured Management By Objectives (MBO) system, based on individual and business objectives of profitability and productivity, aimed at encouraging a more direct involvement in the achievement of results.

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4.5 EQUAL OPPORTUNITIES AND DIVERSITY PSC is constantly committed to avoiding any form of discrimination based on age, sex, sexual orientation, health status, ethnicity, nationality, political opinions and religious beliefs. In the Groupâ&#x20AC;&#x2122;s code of ethics, which is currently being formalized, the importance of ethical and social responsibility is recognized in carrying out business activities. In this regard, PSC undertakes to respect the legitimate interests of its stakeholders. The Group companies operate in terms of diversity. This is what customers expect and it is of vital importance for business success. It is only by evaluating diversity and by engaging equal opportunities that PSC will be able to completely exploit available human and business resources. PSC is committed to providing equal opportunities in all its recruitment and employment activities. The following tables show details of human resources at the different company levels, broken down by gender and age.

PAG E 6 2

4.5 EQUAL OPPORTUNITIES AND DIVERSITY Percentage of individuals within the governing bodies of the organization in each of the following categories of diversity

Gender

CDA

Male

80%

Female

20%

Age range

CDA

Under 30

30 to 50

20%

Over 50

80%

Other indicators of diversity

Total

PAG E 6 3

4.5 EQUAL OPPORTUNITIES AND DIVERSITY Percentage of employees per role in each of the following diversity categories

Structure

Prima Sole Components

Prima Components

PSMM

Sole Components

Eldoprima Components

Gender Male

80%

82%

76%

64%

55%

Female

20%

18%

24%

36%

45%

Under 30

27%

30 to 50

60%

65%

70%

73%

55%

over 50

40%

35%

30%

20%

18%

Age range

Total

PAG E 6 4

192

4.5 EQUAL OPPORTUNITIES AND DIVERSITY

INDIRECT

Prima Components

PSMM

Sole Components

Eldoprima Components

Gender Male

99%

77%

83%

98%

Female

23%

17%

Under 30

33%

11%

18%

30 to 50

65%

55%

66%

Over 50

32%

12%

23%

16%

Age range

Total

PAG E 6 5

179

435

307

4.5 EQUAL OPPORTUNITIES AND DIVERSITY DIRECT

Prima Components

PSMM

Sole Components

Eldoprima Components

Gender Male

85%

87%

40%

69%

Female

15%

13%

60%

31%

Under 30

24%

11%

25%

30 - 50

65%

63%

68%

59%

Over 50

26%

13%

21%

16%

Age range

Total

457

DIRECT + INDIRECT

Prima Components

Other indicators of diversity

* Protected and disabled categories ** Data not available for PSMM Pernambuco

PAG E 6 6

216 PSMM 4%

505 Sole Components 4%

150 Eldoprima Components 4%

5. NATURAL RESOURCES AND ENVIRONMENT

PAG E 6 7

5.1

THE ENVIRONMENT

5.2

ENERGY CONSUMPTION

5.3

EMISSIONS IN THE ATMOSPHERE

5.4

SUSTAINABLE PRODUCTION

5.5

WASTE MANAGEMENT

5.6

WATER RESOURCES PROTECTION

5.7

BIODIVERSITY

PAG E 6 8

5.1 THE ENVIRONMENT Respect for the environment is a fundamental variable for PSC. This aspect is reserved for the same passion that drives the care of products and the same attention paid to customerâ&#x20AC;&#x2122;s requests. In this context, the commitment to introduce technological systems and practices that, in addition to fully meeting all legal obligations and limiting pollution, tend to constantly improve environmental efficiency. Despite the importance of environmental issues for PSC, the available data did not make possible a scientific risk assessment, one of the elements necessary for the application of the precautionary principle. Nevertheless, even if it has not been possible to apply this principle so far, PSC protects its resources and works in compliance with all applicable regulations. It is significant to underline that some business tools, such as risk analysis for the assessment and prevention of accidents at work and diseases are evolving: the present risk assessment is accompanied by the forecasting of possible risks, as shown in the following diagram.

Risk Analysis

RISK ASSESSMENT

RISK PREDICTION

Unsafe Conditions

Unsafe Acts

Companyâ&#x20AC;&#x2122;s responsability

Volontary activity

for legal compliance

PAG E 6 9

against Unsafe acts

This process could also be applied to environmental assessment.

5.2 ENERGY CONSUMPTION In the table, the types of fuel used by PSC, as well as energy consumption, are detailed.

PSMM

Sole Components

LPD

Natural gas

224,78

11751,83

179946,75

2760,65

Prima Components Fuel oil

Eldoprima Components

Unit of measurement

Natural gas

from non renewable sources

49391,91

Total electric consumption

132104,60

89998,64

147337,98

63088,82

Total electric consumption within the organization

181955,68

101750,47

327284,73

65849,47

Types of fuel used from non-renewable sources

Natural gas

Total consumption of fuel (separated for typology)

234,38

Source of emission factors used: Natural gas * Emission factors and LHV (PCI): Ecoinvent 3.3 “Heat, district or industrial, natural gas {Europe without Switzerland} | heat production, natural gas, at industrial low-NOx furnace> 100kw Alloc Rec. U “ • Density: GESTIS Substance Database Information system on hazardous substances of the German Social Accident Insurance (IFA, www.dguv.de) Fuel oil *Emission factors and LHV (PCI): Ecoinvent 3.3 “Heat, central or small-scale, other than natural gas (without Europe), heat production, light fuel oil, at 100kW, non-modulating boiler | Alloc Rec, U “ • Density: GESTIS Substance Database Information system on hazardous substances of the German Social Accident Insurance (IFA, www.dguv.de) Fuel oil *Emission factors: ISPRA, national inventory emission factors (http://.sinanet.isprambiente.it/it/sia-ispra/serie-storiche-emissioni) • Density and LHV (PCI): ENEA, Experimentation of an integrated fuel processor / polymer electrolyte fuel cell system powered by LPG for stationary power generation. Standards, methodologies, hypotheses and / or calculation tools used • for fuels: invoices • for electricity: invoices

PAG E 7 0

PSC wants to continuously improve its environmental performance and reduce energy consumption in its sites of production and offices, by implementing specific policies and projects. Specifically, among the initiatives launched, the followings are included: • Introduction of more efficient production machinery and equipment, in terms of energy consumption (e.g. inverter) • Installation of more energy-efficient lighting systems (e.g. LED) • Adoption of environmental management systems in line with the IS014001 standard 2017 is the first year in which the Sustainability Report was published and it is, therefore, considered the “zero point” for energy consumption reductions and calculation. In ISO 14001- certified factories the reduction values have been monitored for years. The reference value, on which energy consumption reductions and calculation will be based in the years to come, is calculated as follows:

Basic reference for energy consumption reductions and calculation.

Gj / hours worked machine, 2017 indicator reference value

Standards, methodologies, hypotheses and/or tools calculation used

PAG E 7 1

Prima Components

PSMM

Sole Components

1,4

0,7

1,4

Eldoprima Components 0,3

Change in consumption, compared to hours worked machine (GJ / h)

5.3 EMISSIONS IN THE ATMOSPHERE DIRECT EMISSIONS (SCOPE 1). The table below shows the use of fuels for plants and heating for offices, as well as emissions deriving from the refrigerant gas losses in refrigerators and air conditioners.

Prima Components Gross direct greenhouse gas emissions, equivalent CO2 tons

Total

3405,26

Fuels

3110,31

Refrigerating gas

Gas included in the calculation

294,95

CO2 HFC

Only for Tecnoprima

PSMM*

Sole Components

Eldoprima Components

1464,54

11312,28

171,99

PSMM P

11210,68

171,99

PSMM P:

101,60

CO2 HFC

No fuels are used

(No reintegration)

CO2 HFC

CO2 * Only PSMM C Base Year The data in this report concerns the base year, as 2017 is to be considered the first reporting year. Source of GWP factors. With regard to GWP metrics for all substances with an altering climate effect, Chapter 8 (Anthropogenic and Natural Radiative Forcing) of 2013 Climate Change report was used as a source: The Physical Science Basis. Contribution of Working Group | to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, published by Cambridge University Press. Consolidation approach to emissions. Operational control. Standards, methodologies, hypotheses and / or tools calculation used For fuels, invoices For the VHFC, the FGAS declaration pursuant to article 16 paragraph 1 of the D.P.R. n. 43 of 27 January 2012, concerning the quantities of refrigerant added in repairing activities.

PAG E 7 2

OTHER SIGNIFICANT EMISSIONS

Unit of measurement

Sole Components

Eldoprima Components

Prima Components

PSMM*

1,3370

0,3106

4,8099

NOx

1,2803

0,3008

4,6067

0,0707

SOx

0,0419

0,0072

0,1097

0,0017

Particulate (PM)

0,0056

0,0013

0,0467

0,0003

0,0093

0,0013

0,0467

0,0003

Significant emissions into atmosphere for each of the following compounds:

0,0730

Tons

* Only PSMM C to be considered, because PSMMP does not use fuels and has not had any reintegration in the reporting year Source of emission factors used Natural gas

• Emission factors and LHV (PCI): Ecoinvent 3.3 “Heat, district or industrial, natural gas (Europe without Switzerland) | heat production, natural gas

at industrial furnace low-NOx> 100k | Alloc Rec, U”

• Density: GESTIS Substance Database Information system on hazardous substances of the German Social Accident Insurance (IFA, www.dguv.de)

Diesel

• Emission factors and LHV (PCI): Ecoinvent 3.3 “Heat, central or small-scale, other than natural gas [Europe without Switzerlandl | heat production, light

fuel oil, 100kW at-boiler, non-modulating | Alloc Rec, U “

• Density: GESTIS Substance Database Information system on hazardous substances of the German Social Accident Insurance (IFA, www.dguv.de)

Fuel Oil

• Emission factors: ISPRA, national inventory emission factors (http://www.sinanet.isprambiente.it/it/sia-ispra/serie-storiche-emissioni)

• Density and LHV (PCI): ENEA, Experimentation of an integrated fuel processor / polymer electrolyte fuel cell system powered by LPG

for stationary power generation.

PAG E 7 3

For all the plants the amount of emissions, compared to the fuels used according to the following emission factors, has been reported.

FUELS Natural Gas Fuel oil LPG

PAG E 7 4

NOX 25,6 29,2 40,0

EMISSION FACTORS (g/Gj) SOX

0,61 49,8 0,22

0,11 7,98 10,0

PM < 2,5 0,11 0,53 0,20

The production process that has the greatest impact from VOC emissionsâ&#x20AC;&#x2122; point of view is painting. For this process, the total quantity of Volatile Organic Compounds (VOCs) emitted has been reported, which are conveyed into post-combustors, very high-efficiency equipment able to break down these substances, present in the outgoing stream of spray booths, from thousands of mg / Nmc to a few units. VOCs breakdown occurs by thermal oxidation (combustion) of the latter. The heat produced by VOCs combustion is recovered either in the same painting plant (heating of drying ovens and so on) or for different company needs. Production plants, where the painting process takes place: STABILIMENTI PRODUTTIVI IN CUI AVVIENE IL PROCESSO DI VERNICIATURA

Unit of measurement Volatile Organic Compounds (VOC): Emissions conveyed into the atmosphere Transformation (VOC) in Thermal Energy (heat)

Tons

PC Ferentino

Tecnoprima

Sole Oderzo

54,9

13,7

35,1

5,4

Assente -

1996,03

10862,09

3067,17

Absent Adaptation Solvents by Activated Carbon

The painting plant of PSMM Campania has not been operating in the reporting year Assumptions: * Total Assimilation (COV) with Acetone solvent currently present in painting materials * Inferior calorific power - 28,5 [Mj/Kg] * Neglecting emission diffusion Analyzed Sources 2017 Solvent Management Plan

For assembly processes such as welding, spalling, gluing and molding, emissions are not significant. PAG E 7 5

Sole Pontedera

5.4 SUSTAINABLE PRODUCTION The application of a management system promotes respect for the environment in every way and, at the same time, it is a fundamental factor for the organization growth. All PSC production sites use specific quality, environmental and safety management systems, which are mostly certified. Nine out of twelve production sites have the UNI EN ISO 14001 environmental management system certification.

ISO14001 Prima Components Anagni Prima Components Ferentino Prima Eastern SP Prima Tecnoprina Prima Poprad PSMM Campania PSMM Pernambuco Sole Oderzo Sole Suzzara Sole Pontedera Sole Worth PAG E 7 6

Policy guidelines for environmental quality and safety will be redefined at group level over the next few years.

5.5 WASTE MANAGEMENT The following tables show the quantity, characterization and destination of the waste produced by PSC.

Unit of measurement

Prima Components

PSMM

Sole Components

Eldoprima Components

hazardous

1095,43

336,00

950,101

108,853

non-hazardous

1934,58

1666,00

6354,27

531,53

hazardous

non-hazardous

864,00

250,70

hazardous

283,90

64,00

342,34

6,286

non-hazardous

1750,51

606,00

664,255

451,263

Total weight of hazardous and non-hazardous waste Recycling

Recovery, including energy recovery

Accumulation on site

Temporary storage

as a waste producer

hazardous

811,52

275,00

577,68

102,567

non-hazardous

184,07

138,00

5115,04

80,267

Rubbish dump

PAG E 7 7

How was the waste disposal method determined: Disposed directly from the organization

Prima Components YES

Sole Components

Eldoprima Components

Worth

YES

SĂ&#x152;

YES

You can find a list of used CER codes, with description of the type of waste, its characteristics, class of danger and destination.

You can find a list of used CER codes, with description of the type of waste, its characteristics, class of danger and destination, with the exclusion of Worth.

You can find a list of used CER codes, with description of the type of waste, its characteristics, class of danger and destination.

PSMM PSMM C

Disposal directly by the company

Disposal by Daimler

PSMM P Disposal by FCA

Information provided by the waste disposal company

Preliminary organizational schemes of the contractor for waste disposal

PAG E 7 8

YES You can find a list of used CER codes, with description of the type of waste, its characteristics, class of danger and destination.

5.6 WATER RESOURCE PROTECTION The environmental impact on water resources of PSC production sites is not harsh: in fact water, in the production processes, is used in closed circuit for cooling in molding and for powder reduction in painting. Residual consumption is due to civil uses. Outlets are comparable to those of domestic use, similar to the water recycling system.

Unit of measurement

Prima Components

PSMM

Sole Components

Eldoprima Components

Total volume of water withdrawn

46920,00

86574,89

253581,00

2171,00

Underground water

28037,00

70000,00

238242,00

0,00

Municipal water supply or other public or private water services

18883,00

16574,89

15339,00

2171,00

reading of meters

Standards, methodologies and hypotheses used

PAG E 7 9

For PSMM C estimate For PC Anagni and (meters installed in 2018) PC Ferentino: reading of the counters For Tecnoprima: For PSMM P statement of water well reading of meters + estimate For SP Prima: statement of water well + ACEA invoice For Prima Eastern: invoices the water suppl

Worth: estimate number of employees (50l / day per person water withdrawn)

and 220 working days

Prima Components Unit of measurement Total volume of planned and unplanned water discharges based on:

PC Anagni*

200664

PC Tecnoprima Ferentino

8880

600

PSMM

SP Prima

Surface water course Rio Santa Maria

ASI Conduct

Septic tank following surface water course

Water quality, including treatment method

Table IV, annex V, Legislative Decree 152/06, septic tank and filtration for water recycling system

Table S, ASI Consortium, septic tank and filtration for water recycling system

Table III, annex V, Legislative Decree 152/06, water courses table

Standards, methodologies and hypotheses used

Reading of meters (meters flow)

Estimated by From MUD drinking water consumption 20% physiological losses

Destination

CER200304 Waste Disposal -

Prima Eastern

CER200304 Waste Disposal

PSMM C

PSMM P

54000

N/A

External water All discharges treatment are treated plant by FCA

Water treatment plant with activated carbon

From MUD -

N/A

All discharges are treated by FCA

*For the volumes: it was considered the discharges from water treatment plant and recycling system

PAG E 8 0

Eldoprima Components

Sole Components Unit of measurement Total volume of planned and unplanned water discharges are based on: Destination

Sole Suzzara

1225

Public sewerage Â

Water quality, including treatment method

Standards, methodologies and hypotheses used

PAG E 8 1

There are no output measurement instruments

Sole Oderzo

94539

Sole Pontedera

5586

Sole Worth

625

Prima Poprad

3335

Sewerage and surface water (marsh tube)

Public sewerage

External water treatment plant managed by Daimler

Whirpool sewer and Veoliou purifier

Activated carbon filter for water painting plants

Discharges authorized according to the limits indicated in Tab 3, Annex V part III, Legislative Decree 152/2006

Assimilable domestic waste discharges

Assimilable to domestic waste discharges

Meters and meter flow

Reading of meters (meters flow)

Estimate number of employees (501 / day per person water withdrawn -20%) and 220 working days

Estimated on average consumption 50l / man per 230 working days

5.7 BIODIVERSITY PSC plants and sites arise in populated areas but do not directly cover protected areas or those having high biodiversity value.

PSC GOALS AND TARGETS

PAG E 8 3

PSC GOALS AND TARGETS TABLE Macro-theme

Long-term goals

Target 2018-2020

Generated Value

Create value for all stakeholders by designing, producing and marketing innovative and technologically advanced products, in compliance with regulations, collaborating actively with all the resources of the supply chain.

• Increase the number of certified plants with respect to the current situation with the long-term goal of bringing all Group plants to be certified for the ISO 14001 standards and at least one additional OHSAS 18001. • Develop an integrated Group policy for quality, environment and safety • Develop the Group ethical code by adopting an organizational model compliant with Legislative Decree 231/01.

Workers

Ensure well-being at work for all employees without any discrimination, guaranteeing training and resources to ensure professional development and appropriate working conditions.

• Get to zero injuries in all the plants • Enhance the modalities of direct involvement of the employees in the field of sustainability • Implement training and promotion tools (eg webinars, focus groups) of sustainability aspects • Start the "Academy" to spread and consolidate the values and the fundamental instruments of the Group • Extend the staff assessment systems, in the career development perspective, to all group plants

Natural resources and environment

PAG E 8 4

Develop innovative solutions to improve the quality of life and environment, protecting natural resources, reducing waste products and emissions into the atmosphere and pursuing processes sustainable production.

• Monitor and reduce energy consumption • Reduce the significance of the environmental aspect: emissions in the atmosphere • Reduce the ratio between hazardous and non-hazardous waste and increase the proportion of waste to recovery compared to those for disposal

DMA

DISCLOSURE ON MANAGEMENT APROACH

PAG E 8 5

Macro Topics Material Topics All the Macro topics

All the Material topics

Motivations and boundaries

Material topics from GRI Standard Disclosure

The material topics have been identified applying the principles for the definition of the Report contents and quality and through the processes of stakeholder engagement and materiality assessment described in detail in the second chapter of the Sustainability Report, "Materiality and methodology". For every PSC material topicthe perimeter, within which the potential impact can have an effect, has been identified: • Within company boundaries: in this case the impact mainly affects the internal stakeholders • Outside the company boundaries: in this case, the external stakeholders are mainly affected by the impact • Inside and outside the company boundaries: the impact affects all stakeholders. In the management of material topics, PSC considers both the possible impact that can be directly caused and the one that can indirectly derive from his work.

Management tools POLICIES The group is administered in the logic of recognition of the social role that the company has within the community, through the implementation of innovative solutions to improve the quality of life and the environment. PSC is developing a common policy for the whole Group regarding quality, environment and safety. In reference to these topics, the policies adopted by the Prima Components business unit are currently being used as a reference in compliance with the international standards ISO 9001, ISO 14001, OHSAS 18001. In the quality policy it is declared that: • The future of Prima Sole Components depends on the ability to establish and maintain stable and satisfactory relationships with customers. • The satisfaction of customers’ needs and the acquisition of new market areas are achieved through a continuous improvement of quality products, services and cost-effectiveness relationship. Prima Sole Components, the group's holding company, defines the vision, the mission and the medium and long-term strategies in the Group Industrial Plan. The operational plans of the business units and the sites connected to them are then developed on these lines. In the industrial plan, the strategic guidelines are: competitiveness, technological innovation and localization. At the Business Unit level and, with a trickle-down effect, for each production site, the activities in line with the strategic guidelines of the PSC are defined according to the following logical process: analysis of the business plan, S.W.O.T. analysis to determine strengths and weaknesses, as well as opportunities and risks, risk assessment and definition of the operational plan. • The Business Plan covers the corporate network of all the PSC Group plants. • The last revision date of the Business Plan was April 2018. PSC is also working on the drafting of organization, management and control model pursuant to Legislative Decree 231/2001, in which the company ethic code is contained. It defines clearly and transparently the set of values that the Group is inspired by in the relationship with all the stakeholders. COMMITMENTS letter of the CEO at the opening of the Report and are transmitted in all of the plants and at all company levels. The commitment to the respect of legitimate stakeholders’ interests and the community of all the PSC plants is set forth in the ethic code of the Group, in the process of formalization.

GOALS AND TARGETS The objectives and goals that PSC sets towards sustainability can be found in this Report and concern all the plants PSC. The objectives show an improvement with respect to national legislation and will be monitored annually. Other more specific goals are identified in the improvement plans of each company site, prepared in compliance with the quality, environment and security standards. RESOURCES Dislocating human and financial resources is under the responsibility of the business unit administrator who, along with the director of the plant, draws up an investment plan approved by the holding company. GRIEVANCE MECHANISMS In the PSC sites, certified ISO 9001, ISO 14001 and OHSAS 18001 / ISO 45001 complaint collection systems are part of the management systems. Currently PSC has not activated an organized system that allows to ask for information and make any complaints on the company website. Stakeholders can make requests and complaints at the contact point specified in this report. SPECIFIC ACTIONS PSC publishes its first sustainability report in compliance with the main international reporting standard of sustainability, the GRI-Standards. Prima Components also undertakes to keep the policies on quality, environment and safety up to date and implemented. Such policies are applicable to all the plants of the group, to pursue continuous improvement in all the areas. MANAGEMENT EVALUATION In order to monitor the actual adequacy of the management of the material issues, the results of the audits at first and third part performed on management systems will be used, when applicable. Furthermore, GRI Standards disclosures, reported in this Report and subsequent, will be used as evaluations on management

PAG E 8 6

Responsibilities The commitment to take a more sustainable approach is shared both by the President and the CEO and involves all the business units, the individual plants and all the functions and the company employees. The responsibility in the implementation of the policies, in the realization of the commitments and in achievement of the objectives is entrusted to the administrators of each business unit and managers of the individual production units. The achievement of the speciﬁc objectives, identiﬁed in the improvement plans, is delegated to responsible implementation management systems.

Macro Topics Material Topics

Risk management

Research, development and technological innovation

Relationships with business partners

GENERATED VALUE

Acting considering the risks and opportunities in the economic, social and environmental sphere for the operation and image of PSC. Any related impacts could have effects both within and outside the Group.

Research and technological innovation as strategic elements to increase the competitiveness of its products, in line with sustainable development. Any related impacts could have effects both within and outside the Group.. To relate with our business partners, recognizing value for cooperation, synergies and socially responsible behaviour, in order to achieve higher levels of knowledge and higher quality. Any related impacts may have effect both inside and outside the Group.

Customer and product quality

The care of customer services and the development of products with high quality standards, as basic elements to establish a lasting relationship and mutual satisfaction. Any related impacts could have effects both within and outside the Group.

Compliance

Ensure compliance with mandatory or voluntary standards through the empowerment of its employees and through appropriate models organization and management. Any related impacts could have an effect both within and outside the Group.

Responsible management for the supply chain

Local communities

PAG E 8 7

Motivations and boundaries

The involvement of the supply chain by sharing the principles, policies and tools for sustainability and social responsibility. Any related impacts may have effect both inside and outside the Group. Attention and comparison with the expectations of the local communities, through an open, transparent and constructive dialogue. Any related impacts could have effects outside the Group.

Material topics from GRI Standard

Disclosure

GRI 201: Economic Performance 2016

201-1 Direct economic value generated and distributed

GRI 102: General Disclosure 2016

102-15 Key impacts, risks, and opportunities

GRI 201: Economic Performance 2016

GRI 206: Anti-competitive behaviour 2016

GRI 416: Customer Health and Safety 2016

GRI 307: Environmental Compliance 2016 GRI 419: Socioeconomic Compliance 2016

GRI 308: Supplier Environmental Assessment 2016 GRI 414: Supplier Social Assessment 2016

GRI 413: Local Communities 2016

201-4 Financial assistance received from government No. of resources engaged in R & D activities

206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

416-1Assessment of the health and safety impacts of product and service categories

Management tools

POLICIES In the quality policy, whose principles are applicable to all the Group's plants, it is declared that the following topics are central: • The integration of the economic goals with the requests of the interested parties and the applicable requisites • Process improvement by implementing projects aimed at increasing performance • The efﬁciency of the plants and equipment used for production. The guiding principles are honesty, fairness, transparency and impartiality. They are applied in any relationship with suppliers, with the community and in any relationship with customers, to ensure the development of a responsible supply chain along with high levels of customer satisfaction and an open dialogue with communities. These principles have always animated PSC and are being formalized with the drafting of an ethic code. COMMITMENTS It is PSC’s commitment to scrupulously respect all those rules and laws applicable in the areas of quality, safety, respect for environment, aiming at continuous improvement. It is PSC’s commitment to carry out its activities in an ethical manner, respecting in every relation with stakeholders its guiding principles, which will be formalized in the ethic code.

416-2 Incidents of non-compliance concerning the health and safety impacts of products and services

GOALS AND TARGETS The goals and targets taken for the material topics of this macro-topic are developed following as described in the section "Processes common to all macro-topics".

307-1 Non-compliance with environmental laws and regulations

RESOURCES The personnel and ﬁnancial resources for the management of this macro-topic are given to all the Group's management, such management is coordinated and controlled by the president and CEO of PSC.

419-1 Non-compliance with laws and regulations in the social and economic area

308-1 New suppliers that were screened using environmental criteria 414-1 New suppliers that were screened using social criteria

413-1 Operations with local community engagement, impact assessments, and development programs

Responsibilities

GRIEVANCEMECHANISMS The mechanisms though which it is possible to place any complaints related to this macro topic are developed as described in the section "Processes common to all macro-topics". SPECIFIC ACTIONS The managing director of PSC and then the business unit administrators and subsequently the board of directors evaluate the economic performances of the single business unit and of PSC and analyse any risks and opportunities. EVALUATION ON THE MANAGEMENT Evaluation mechanisms on the management of material topics related to the "Generation of value" macro-topic are developed following what is described in the section" Processes common to all macro topics ".

The responsibilities for the management of the material topics referred to the "Generated Value" macro-topic are assigned according to what is described in the section “Processes to common to all macro-topics".

Macro Topics Material Topics

Employees well-being

Health and Safety at work

Motivations and boundaries

Generates well-being for employees through an organization and an environment which encourages commitment towards quality and the achievement of personal and professional satisfaction. Any related impacts could have effect within the Group.

The guarantee of safety throughout the process and the protection of workers' health during all phases of procurement and production. Any related impacts could have effect within the Group.

Material topics from GRI Standard

Disclosure

401-1 N° New employee hires and employee turnover GRI 401: Employement 2016

GRI 403: Occupational Health and Safety 2016

401-2 Beneﬁts provided to full-time employees that are not provided to temporary or part-time employees

POLICIES The principles set in the policies for quality, environment and safety, are applicable with a trickle-down effect to all plants of the group. In the policy for quality, among the central topics it is stated that «the active involvement of all the staff in the process of continuous improvement ". In the environmental policy, on the other hand, there is the commitment "to promote the responsibility and sensitivity of the employees, engaged at all levels in company activities, through appropriate information programs and training, in order to obtain the cooperation of all”. Finally, in the security policy it is stated that "in carrying out its activities, the Group considers human health, environmental protection and occupational safety an indispensable duty, a continuous duty and a constant component of our mission”.

COMMITMENTS In the security policy, the commitment of the entire organization is to: • Respect, in the contents and principles, the laws on industrial safety and hygiene applicable to the activities, products and services of the plant. 403-1 Workers representation in • Promote any initiative to reduce to zero, in all activities, the possibility of accidents that may compromise formal joint management–worker the safety of employees and surrounding communities. health and safety committees • Pursue continuous improvement in the management of site security, even through the identification of the risks associated with the activities carried out and the definition of new targets for their reduction. 403-2 Types of injury and rates of • Promote the involvement of all employees, including through their representatives, and establish a injury, occupational diseases, lost days, and absenteeism, and number transparent and collaborative relationship with public, private and local communities. of work-related fatalities The commitment of PSC in the development of human resources, to guarantee its rights and to promote its development and personal growth, will be formalized in the Group's ethic code. GOALS AND TARGETS The goals and targets identified for the material topics of this macro-topicare developed according to what is described in the section "Processes common to all macro-topics".

WORKERS

Personnel Training and Devolopment

Equal opportunities and diversity

PAG E 8 8

Management tools

Considering one's own employees as a fundamental element of the company's value, to be developed through adequate training in the development of individual skills. Any related impacts could have effect within the Group.

The enhancement of personal and cultural diversity of employees, suppliers and customers, avoiding unjustiﬁed discrimination and favouring inclusion. Any related impacts could have effect within the Group.

GRI 404: Training and Education 2016

GRI 405: Diversity and Equal Opportunity 2016

404-1 Average hours of training per year per employee 404-3 Percentage of employees receiving regular performance and career development reviews

405-1 Diversity of governance bodies and employees

RESOURCES The personnel and economic resources for the workers management are assigned to the individual business units through the deﬁnition and approval of the annual budget. GRIEVANCE MECHANISMS The mechanisms with which it is possible to place any complaints related to this macro-topic are developed following what is described in the section "Processes common to all macro-topics". SPECIFIC ACTIONS PSC has activated a management system that, thanks to an internal and external audit process and to the periodical reviews, provides for the control, monitoring and possibly the mitigation of negative impacts concerning the health and safety of workers. The Human Resources Department in collaboration with the individual business units and the directors of the production units or plants, manage professional and personal training programs for employees, newly hired and administered at the production sites. These programs are developed based on the business needs. The priorities for the individual worker are identiﬁed by the function managers and by the human resources department according to the needs of the task. At least once a year, the management systems are reviewed (ISO 9001 e OHSAS 18001/ISO45001), involving the administrators of the business units, the site managers and the managers of the different business functions. Following the review of the results of the audits, of non-compliance, of the corrective measures implemented, objectives and indicators, improvement initiatives can be implemented. EVALUATION ON THE MANAGEMENT The evaluation mechanisms on the management of the material topics related to the "Workers" macro-theme are developed as described in the section "Processes common to all macro-topics".

Responsibilities

The responsibilities for the management of the material topics referred to the "Workers" macro-topic are assigned following the procedure described in the section "Processes common to all macro-topics". The responsibility in terms of health and safety is entrusted to the individual administrators of the business units that act as employers towards employees. In each production unit and in each plant, the directors have a wide delegation regarding safety and environment. Each company of the Group has an RSPP that collaborates on the issues related to safety and workers elect one or more RLS (or RLSSA in companies with rubber and plastic contract).

Macro Topics Material Topics

Energy consumption

Emissions in atmosphere

Sustainable production

NATURAL RESOURCES AND ENVIRONMENT

Waste Management

Water resources protection

Biodiversity

PAG E 8 9

Motivations and boundaries The responsible use of energy resources achieved, when possible, with energy saving technologies and practices and the choice of renewable resources. Any related impacts could have effects both within and outside the Group.

Conducting its activities by seizing the opportunities to prevent and mitigate emissions into the atmosphere, protecting air quality and combating climate change. Any related impacts could have effects both within and outside the Group.

Material topics from GRI Standard

GRI 302: Energy 2016

GRI 305: Emissions 2016

The adoption of management models in line with best practices and international standards to achieve measurable and certiﬁable sustainability objectives. Any related impacts could have effects both within and outside the Group

The application, when possible, of the best reduction practices, through prevention, and waste recycling. Any related impacts could have effects both within and outside the Group.

Responsible use of water thanks to technologies and practices aimed at reducing the quantity withdrawn and maintaining its original quality. Any related impacts could have effects both within and outside the Group..

Consider biodiversity as a resource to be protected, as a common value that is essential for the company, the territories and the communities linked to it. Any related impacts could have effects both within and outside the Group.

Disclosure 302-1 Energy consumption within the organization 302-4 Reduction of energy consumption

305-1 Direct (Scope 1) GHG emissions 305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other signiﬁcant air emissions

IRIS OI1254

GRI 306: Efﬂuents and Waste 2016

Management tools POLICIES Among the central topics for Prima Components, declared in the environmental policy, there are: • Evaluation of the environmental impacts of new processes, new products and changes to existing plants. • Careful monitoring of environmental performance in order to identify and monitor the environmental indicators • The intervention on the process and the activities to improve waste management, with an ever-increasing propensity towards recycling, in order to avoid more effectively the contamination of soil and water, to constantly monitor the quantities of materials used (chemicals, polymers) to control emissions into the atmosphere. • To privilege those suppliers who demonstrate that they have carried out initiatives in favour of the environment. • The commitment to intervene on signiﬁcant environmental aspects, direct and indirect, with the best technologies economically sustainable. COMMITMENTS In the environmental policy, the commitment of the entire organization is reafﬁrmed to: • Respect, in the contents and principles, the environmental laws, also in compliance with the international standards and pursuing voluntary improvement initiatives. • Evaluate in advance, avoid or reduce potential environmental impacts (and their economic dawn falls), identifying effective actions in the management of production processes. • To aspire to continuous improvement in waste management, which includes an ever-increasing propensity towards recycling and natural resources, avoiding the contamination of the soil and water. • Constantly monitor the quantities of materials used (chemicals, polymers) to keep under control emissions into the atmosphere. GOALS AND TARGETS The goals and targets taken for the material topics of this macro-topic are developed following what is described in the section "Processes common to all macro-topics".

306-2 Waste by type and disposal method

RESOURCES Assigning human and ﬁnancial resources is under the responsibility of the plant manager who draws up an investment plan approved by the business unit administrator and the general management. GRIEVANCE MECHANISMS The mechanisms with which it is possible to place any complaints related to this macro theme are developed following what is described in the section "Processes common to all macro-topics".

303-1 Water withdrawal by source GRI 303: Water 2016 GRI 306: Efﬂuents and Waste 2016

GRI 304: Biodiversity 2016

306-1 Water discharge by quality and destination

304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

SPECIFIC ACTIONS PSC has adopted an environmental management system that, thanks to an audit process and periodic reviews, provides for the control, monitoring and possibly the mitigation of negative impacts on the environment. PSC adopts tools for assessing and quantifying energy and environmental loads and potential impacts of products and processes through: • External analysis laboratories for the assessment of the main environmental impacts (emissions, discharges, noise, waste), dedicated internal resources and external consulting ﬁrms for the energy assessment of individual sites. • Involvement of all the professional skills necessary for development, management and control activities • Adoption and maintenance of an environmental management system For most plants, the management system is also certiﬁed according to ISO14001. EVALUATION ON THE MANAGEMENT Evaluation mechanisms on the management of material topics related to the "Natural Resources and environment "are developed following what is described in the section "Processes common to all macro-topics”.

Responsibilities

• Responsibilities for the topics management related to the area of natural resources and environment are entrusted to the following ﬁgures: • CEO of the Group • Director of the business unit • Manufacturing sites managers In the context of management system the theme is addressed entrusting the directional responsibility to the plant manager, who is supported by a person responsible for the management system and an operational structure.

GRI CONTENT INDEX

GRI Content Index GRI Standard

Disclosure

Page

GRI 101: Foundation 2016 GRI 102: General Disclosure 2016

PAG E 9 1

102-1 Name of the organization 102-2 Activities, brands, products and services 102-3 Location of headquarters 102-4 Location of operations 102-5 Ownership and legal form 102-6 Markets served 102-7 Scale of the organization 102-8 Information on employees and other workers 102-9 Supply chain 102-10 Significant changes to the organization and in its supply chain 102-11 Precautionary Principle or approach 102-12 External initiatives 102-13 Membership of associations 102-14 Statement from senior decision-maker 102-15 Key impacts, risks, and opportunities 102-16 Values, principles, standards, and norms of behavior 102-18 Governance structure 102-40 List of stakeholder groups 102-41 Collective bargaining agreements 102-42 Identifying and selecting stakeholders 102-43 Approach to stakeholder engagement 102-44 Key topics and concerns raised 102-45 Entities included in the consolidated financial statements 102-46 Defining report content and topic Boundaries 102-47 List of material topics 102-48 Restatements of information 102-49 Changes in reporting 102-50 Reporting period 102-51 Date of most recent report 102-52 Reporting cycle 102-53 Contact point for questions regarding the report 102-54 Claims of reporting in accordance with the GRI Standards 102-55 GRI content index 102-56 External assurance a

7-8 16-17 11 13 11 16-17 15 50-53 44-46 12, 46, 50 39, 68 8 10 2-3 30-32 8 11 25 57 25 25 26 12 20 21-24 21 20 20 20 20 96 20 91-94 27, 95

Omissions

Material topics identified by PSC

Material topics from GRI Standards GRI 103: Management approach

Risk management

Research, development and technological innovation

Relationships with business partners

Water resources protection

Emissions in the atmosphere

Biodiversity

86-89

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluations

86-87

GRI 201: economic performance 2016

201-1 Direct economic value generated and distributed

33-35

GRI 103: Management approach

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluations

86-87

GRI 201: economic performance 2016

201-4 Financial assistance received from government

37-38

GRI 103: Management approach

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluations

86-87

GRI 103: Management approach

Waste management

206-1: Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

GRI 103: Management approach

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluations

GRI 302: Energy 2016

302-1: Energy consumption within the organization 302-4: Reduction of energy consumption

GRI 103: Management approach

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluations

86-89 70 71

86-89

GRI 303: Water 2016

303-1: Water withdrawal by source

GRI 306: waste and discharge 2016

306-1: Water discharge by quality and destination

80-81

GRI 103: Management approach

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluations

86-89

GRI 305: Emissions 2016

305-1: Direct (Scope 1) GHG emissions 305-7: Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions

72 73-75

GRI 103: Management approach

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluation

86-89

GRI 304: Biodiversity 2016

PAG E 9 2

Omissions

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluations

GRI 206: anti-competitive behavior 2016 Energy consumption

Page

GRI 103: Management approach

304-1: Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas 103-1 Motivations and boundaries of material topics

GRI 303: Water 2016

303-1: Water withdrawal by source

GRI 306: waste and discharge 2016

306-1: Water discharge by quality and destination

Emissions in the atmosphere

GRI 103: Management approach

Material topics identified by PSC

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluations

Material topics from GRI Standards

79 80-81

Page86-89

GRI 305: Emissions 2016

305-1: Direct (Scope 1) GHG emissions 305-7: Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions

72 73-75

Biodiversity

GRI 103: Management approach

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluation evaluations

86-89

Risk management

GRI 304: Biodiversity 2016 GRI 103: Management approach

304-1: Operational sites owned, leased, managed in, 103-1 Motivations andprotected boundaries of material topics or adjacent to, areas and 103-2 Management tools areas of high biodiversity value outside protected areas 103-3 Management evaluations 103-1 and boundaries of material topics 201-1 Motivations Direct economic value generated and distributed 103-2 Management tools 103-3 Management evaluation

Waste management

GRI approach 2016 GRI 103: 201: Management economic performance

Research, development and technological innovation

GRI 306: 103: waste Management approach and discharge 2016

Employees well-being

GRI 103: Management approach GRI 201: economic performance 2016

Relationships with business partners

Health and safety at work Energy consumption

GRI 401: 103: employment Management2016 approach

GRI 206: anti-competitive behavior 2016 GRI 103: Management approach GRI 103: Management approach GRI 403: health and safety of workers 2016 GRI 302: Energy 2016

Personnel training and development Water resources protection

GRI GRI 103: 103: Management Management approach approach

GRI and education 2016 GRI 404: 303: training Water 2016 GRI 306: waste and discharge 2016 Emissions in the atmosphere Equal opportunities and diversity

Local communities Biodiversity

PAG E 9satisfaction 3 Customer and product quality Waste management

82 86-87 33-35 86-89

103-1 Motivations andand boundaries material topics 306-2: Waste by type disposal of method 103-2 Management tools 103-3 Motivations Managementand evaluations 103-1 boundaries of material topics 103-2 tools received from government 201-4 Management Financial assistance 103-3 Management evaluation

77-78

103-1 Motivations and hires boundaries of material topics 401-1: New employee and employee turnover 103-2 toolsto full-time employees that are 401-2 Management Benefits provided 103-3 not Management evaluations provided to temporary or part-time employees

54-55

206-1: Legal actions for anti-competitive behavior, 103-1 Motivations andmonopoly boundaries of material topics anti-trust, and practices 103-2 Management tools 103-3 Motivations Managementand evaluation 103-1 boundaries of material topics

103-2 Management tools 403-1: Workers representation in formal joint 103-3 Management evaluations managementâ&#x20AC;&#x201C;worker health and safety committees 403-2: injury and rates of injury, occupational diseases, 302-1: Types Energyofconsumption within the organization lost days, and absenteeism, and number of work-related fatalities 302-4: Reduction of energy consumption 103-1 103-1 Motivations Motivations and and boundaries boundaries of of material material topics topics 103-2 103-2 Management Management tools tools 103-3 103-3 Management Management evaluation evaluations 404-1: hours of training per year per employee 303-1: Average Water withdrawal by source 404-3: Percentage of employees receiving regular 306-1: performance Water discharge quality and destination andby career development reviews

103-1 Motivations Motivations and and boundaries boundaries of of material material topics topics 103-1 103-2 Management Management tools tools 103-2 103-3 Valutazioni Management evaluations 103-3 sulla gestione GRI 305: Emissions 2016 305-1: Direct (Scope 1) GHG emissions GRI 405: diversity and equal opportunities 2016 405-1: Diversity of governance bodies and employees 305-7: Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions

86-87 37-38 86-88

86-87 56 39 86-88 86-89 57 70 58 71

86-88 86-89 59-60 79 80-81 61

GRI 103: 103: Management Management approach approach GRI

103-1 Motivations Motivations and and boundaries boundaries of of material material topics topics 103-1 103-2 Management Management tools tools 103-2 103-3 Management Management evaluation evaluation 103-3

GRI 304: 413: Biodiversity local communities GRI 2016 2016

413-1 Operations community 304-1: Operationalwith siteslocal owned, leased, engagement, managed in, impact assessments, and development programs or adjacent to, protected areas and areas of high biodiversity value outside protected areas 103-1 Motivations and boundaries of material topics 103-2 tools 103-1 Management Motivations and boundaries of material topics 103-3 Management evaluation

GRI 103: Management approach GRI 103: Management approach

Omissions

86-89 86-88 72 62-66 73-75

86-87 86-89 47 82 86-87

PARTIAL

GRI 404: training and education 2016

103-3 Management evaluation

86-88

404-1: Average hours of training per year per employee 404-3: Percentage of employees receiving regular performance and career development reviews

59-60

Equal opportunities and diversity

GRI 103: Management approach

Material topics identified by PSC

Material topics from GRI Standards

GRI 405: diversity and equal opportunities 2016 405-1: Diversity of governance bodies and employees

Local communities

GRI 103: Management approach

103-1 Motivations and boundaries of material topics 103-2 Management tools evaluation 103-3 Management evaluations

86-87 86-89

Risk management

GRI 413: local communities 2016 GRI 103: Management approach

413-1 Operations with local community engagement, 103-1 Motivations and boundaries of material topics impact assessments, and development programs 103-2 Management tools 103-3 Management evaluations 103-1 Motivations and boundaries of material topics

86-87

Customer satisfaction and product quality

GRI 103: Management approach GRI 201: economic performance 2016

Research, development and technological innovation

GRI 416:customer health and safety 2016 GRI 103: Management approach

Compliance Relationships with business partners

GRI 201: economic performance 2016 GRI 103: Management approach GRI 103: Management approach GRI 307: environmental Compliance 2016 GRI 206: anti-competitive behavior 2016 GRI 419: socio-economic compliance 2016

Energy consumption Responsible management of the supply chain

GRI 103: 103: Management Management approach approach GRI

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Valutazioni sulla gestione

Page86-88

103-2 tools 201-1 Management Direct economic value generated and distributed 103-3 Management evaluation

Sustainable production Emissions in the atmosphere

GRI 103: Management approach GRI 103: Management approach GRI 303: Water 2016 GRI 306: waste and discharge 2016 GRI 103: Management approach GRI 103: Management approach

GRI 305: Emissions 2016 Biodiversity

GRI 103: Management approach

GRI 304: Biodiversity 2016

PAG E 9 4

Waste management

GRI 103: Management approach

47 33-35 86-87

416-1 Assessment of the health and safety impacts 103-1 Motivations and boundaries of material topics of product and service categories 40-41 103-2 Management tools 416-2 Incidents of non-compliance concerning the health 103-3 Management evaluations 86-87 and safety impacts of products and services 41 201-4 Financial assistance received from government 37-38 103-1 Motivations and boundaries of material topics 103-2 tools 103-1 Management Motivations and boundaries of material topics 103-3 86-87 103-2 Management evaluation tools 103-3 Management evaluations 86-87 307-1: Non-compliance with environmental laws and regulations 43 206-1: Legal actions for anti-competitive behavior, 419-1: Non-compliance with laws and regulations in the social and economic area 43 anti-trust, and monopoly practices 39 103-1 Motivations Motivations and and boundaries boundaries of of material material topics topics 103-1 103-2 Management Management tools tools 103-2 103-3 Management Management evaluation evaluations 103-3

GRI 308: 302:Environmental Energy 2016assessments on suppliers 2016 308-1 302-1:New Energy consumption within the organization GRI suppliers that were screened using environmental criteria 302-4: Reduction of energy consumption GRI 414: Social assessments on suppliers 2016 414-1 New suppliers that were screened using social criteria Water resources protection Research, development and technological innovation

62-66

86-89 86-87 70 44-46 71 44-46

103-1 Motivations and boundaries of material topics 103-1 boundaries of material topics 103-2 Motivations Managementand tools 103-2 103-3 Management Management tools evaluations 103-3 Management evaluation 303-1: Water withdrawal by source Number of people employed in research and development field 306-1: Water discharge by quality and destination 103-1 Motivations and boundaries of material topics 103-1 Management Motivations and boundaries of material topics 103-2 tools 103-2 Management Management evaluation tools 103-3 103-3 Management evaluations IRIS-OI1254 Environmental management system 305-1: Direct (Scope 1) GHG emissions 305-7: Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions

86-89 86-89 76 72 73-75

103-1 Motivations and boundaries of material topics 103-2 Management tools 103-3 Management evaluation

86-89

304-1: Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas 103-1 Motivations and boundaries of material topics

86-89 86-87 79 36 80-81

Omissions

–              -            -                    

   



      -     



          -                           -                                       -



-



-





  -

               

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

- -                                  

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Requests for information: Claudia Masini Quality Engineer WCM Division Coordinator claudia.masini@pscomponents.eu