SOCI AL SUSTAIN - ABILITY - Gruppo Dani · Examination of returns from the field and operating faults. 64 Communication of performance through “Quality Points”, bulletin boards

SOCIALSUSTAIN-ABILITY

628

8,667

90%of personnel was taken onagainst permanent employment

persons employed as to 31 December 2015

total hours of training, of which 2,766 hours on workplace safety

An integrated environmental and safety management system(ISO 14001 and BS OHSAS 18001) is currently pending

63SOCIAL SUSTAINABILITY

PeopleOur Human Resources Policy

The primary objective in the management of personnel is to enhance and develop the potential of human resources, in a safe, fair and stimulating working environment.

DANI's commitment for the growth and motivation of its staff is based on the following international and national references and the values they contain:The Constitution of the Italian Republic;The European Convention for the Protection of Human Rights;ILO conventions (International Labour Organisation);The National Collective Labour Agreement for the Tanning Industry.

These principles are based on the general respect of human rights that Dani protects and has incorporated in its own Code of Ethics that includes clauses on respecting human rights in all conduct and dealings with stakeholders. The application of the Code of Ethics and monitoring of any violation of the same are also guaranteed by the Supervisory Board (pursuant to Legislative Decree. 231/01).

These principles are implemented in the company through a number of programmes and actions: 1. Participation and involvement. Dani encourages all

its employees to participate in activities of continuous improvement. Participation and involvement are encouraged by specific instruments provided by the Quality Management System, including:Examination of in-house non-conformity issues Examination of Customer claims Examination of returns from the field and operating faults

64

Communication of performance through “Quality Points”, bulletin boards (Visual Management) and the company's periodic magazine “Dani News”.2. Training. Dani considers the professional growth of all its

collaborators to be of fundamental importance and achieves this with training courses, based on the company's needs and the personal/professional requirements of workers.

3. Satisfaction and organisational climate. In order to analyse and improve the organisational climate once a year Dani carries out an employee satisfaction survey using its “Employee Satisfaction Questionnaire”. The results of the questionnaire are analysed in order to provide appropriate responses to the priority issues ascertained.

REPORT ON SUSTAINABILITY 2015

65

Composition and characteristics of personnel

At the end of 2015 Dani S.p.A. had 628 employees with respect to the 648 members of staff in December 2014, with a decrease of 3% in the last year. The persons who left the company did so above all for personal reasons (e.g. transfer of residence).The number of persons employed on temporary contracts remained stable at 37.

The Employees of Dani S.p.A.

SOCIAL SUSTAINABILITY

2013 2014 2015

592648 628

0

100

200

300

400

500

600

700

800

Dani consider it to be very important to contribute to the protection and growth of the human capital in the territory where it operates. The company's most important contribution is undoubtedly the job opportunities it creates given that most of Dani's employees reside in the province where the company has its registered offices: more specifically, 76% of its

1 Alonte, Altissimo, Arzignano, Brendola, Castelgomberto, Chiampo, Crespadoro, Gambellara, Lonigo, Montebello, Montecchio, Montorso, Nogarole, San Pietro Mussolino, Sarego, Trissino, Zermeghedo

66

employees reside in Valle del Chiampo1 (an area of the highest concentration of the Vincenza Tanning District where the company has its registered offices), 11% come from other municipalities of Vincenza province and 12% reside in Verona province. All the senior managers (Management) reside in areas close to the tannery.

VALLATA DEL CHIAMPO MUNICIPALITIES

OTHER MUNICIPALITIES IN VICENZA PROVINCE

VERONA PROVINCE

OTHERResidence

76%

11%

12%1%

Employees by place of residence (2015)

The average age of employees at Dani is approximately 42 years (40 in 2014); the age groups, at the end of 2015, are as follows:

Employees by age group (2015)

18-30

31-40

41-50

51-60

OVER 60

Age29%

33%

21%

2%15%



The table shows that 33% of employees are aged between 41 and 50, while 29% are aged between 31 and 40. 23% of workers are over 50, while young people under the age of 30 represent 15% of the total work force. The following table, which shows the changes in employees by age group with respect to the previous year, shows a very clear decrease in the younger age groups due above all to a high number of voluntary resignations.

2013 2014 2015Age

groups M F Total M F Total M F Total Diff ’15vs ’14

18-30 65 28 93 81 26 107 72 24 96 -11

31-40 148 37 185 154 35 189 145 36 181 -8

41-50 153 48 201 173 49 222 161 46 207 -15

51-60 73 31 104 86 32 118 96 36 132 +14

over 60 7 2 9 10 2 12 11 1 12 =

Total 446 146 592 504 144 648 485 143 628 -20

More than half of Dani's employees are of foreign origin while Italian workers represent 49% of the total. The following graph shows the difference in age groups between Italian and foreign workers:

Distribution of Dani employees by age group and area of origin

40%

30%

20%

10%

18-30 years 41-50 years Over 60 years

21%

10%

21%

36%

30%

36%

26%

16%

2% 2%

Italian

Foreigners

68

Country 2013 2014 2015 ∆ ’15 vs ‘14Italy 283 311 311 =

Bangladesh 143 139 126 - 13

Ghana 55 63 62 - 1

India 31 34 31 - 3

Romania 22 24 23 - 1

Burkina Faso 13 13 15 + 2

Serbia 12 19 18 - 1

Albania 5 5 5 =

Others 28 26 37 + 1

Total 592 648 628 - 20

It may be noted that a good percentage of Italians are in the younger age group and a high percentage of foreigners are in the 31-40 and 41-50 age groups.

The largest communities of non-Italian workers are workers from Bangladesh, Ghana, India and Romania.Foreign workers are mainly employed in production activities.

Employees by origin (31 December 2015)

ITALIAN

FOREIGNERS

Origin49%

51%



The other countries with less than 5 people are: Argentina, Bosnia, Morocco, Republic of Moldavia, Senegal, Nigeria, Belgium, Benin, Brazil, Ivory Coast, Croatia, Great Britain, Liberia, Poland, Switzerland and Ukraine, Kosovo and Santo Domingo.

Employees by geographic area of origin

In 2015, as part of an Internship hosted by Dani, the level of education of the workers in the production departments was analysed, which confirmed that about 38 non-EU workers hold a University degree. Following this survey, 2 workers were transferred to the Dani laboratory. The following graph shows the distribution by education qualification:

400

300

200

100

Italy Rest of Europe Africa Asia Others

283

4674

174

15

311

5888

173

18

311

6487

157

9

2013

2014

2015

120

90

60

30

Albania Burkina Faso India Romania Others

PRIMARY SCHOOL

JUNIOR SCHOOL

HIGH SCHOOL

UNIVERSITY DEGREE

ISLAMIC SCHOOL

NO SCHOOLING OR

VERY LITTLE SCHOOLING

70

WOMEN

MEN

Gender

23%

77%

0 10 20 30 40 50 60

Warehouse

Cut

Offices

Others

201320142015

4242

53

5446

17

4144

51

910

6

In 2015, 23% of the total work force were women: with respect to 2014, the percentage of women workers was 1% less due to the fact that the personnel recruited for the departments were almost all men. The low percentage of women employed by the Company, which is typical of this industry, is due above all to the type of work carried out.5 women workers in 2015, asked to go on parental leave. 2 are still at home on maternity leave, 3 have returned to work.

Employees by gender (31 December 2015)

The following are the departments with the highest number of women:

Number of women by department



Employment relationship

The employees of Dani, are distributed equally between the two divisions: 52% works with the Automotive Division, while 48% works with the Homestyle&Fashion Division.

Employees by Division (31 December 2014)

AUTOMOTIVE

HOME, STYLE & FASHION

Division 53%

47%

2014 2015Professional roles U D Total U D Total

Senior managers 2 - 2 2 - 2

Middle managers 4 - 4 4 - 4

White collar workers 75 47 122 81 47 128

Blue collar workers 423 97 520 398 96 494

Total 648 628

The subdivision of employees by contract levels shows a high number of blue collar workers (79% of the total at the end of 2015) and 20% of white collar workers. This is consistent with the fact that the tanning industry carries out manufacturing activities.

72

The employees are distributed fairly evenly over all the departments (see the graph below). The departments with the highest number of staff are the following: warehouse (115 persons), offices (119) and finishing (109).

Dani S.p.A.Employees by Depart-ments

31 December 2013

31 December 2014

31 December 2015

Changes ’15 vs ‘14

Tanning 60 77 73 - 4

Dyeing 22 27 23 - 4

Pre-dyeing 58 57 58 + 1

Drying 41 56 67 + 11

Finishing 88 101 109 - 2

Warehouse 100 121 115 - 6

Cut 111 90 30 - 60

Laboratory 9 10 8 - 2

Maintenance 10 10 10 =

Offices 84 89 119 + 30

Total 592 648 628 - 20

The most obvious figure is undoubtedly the increase in office staff and the decrease of workers in the cutting department. In the first case this is due to the fact that in 2014 the technical department was part of the reference departments, while in 2015 these were included in the office departments. In the second case, this is due to the fact that the personnel of the cutting department was transferred to other departments as a result of the strategic choice to carry out this work through the foreign factories (who specialise in cutting), which entailed transferring a number of projects to Tunisia and Slovenia. All the workers of the department were in any case kept on with the company.



2015

TANNING

DYEING

PRE-DYEING

DRYING

FULLING

FINISHING

WAREHOUSE

CUT

LABORATORY

MAINTENANCE

OFFICES

12%

4%

9%

11%

2%

17%

18%

5%

1%

2%

19%

Total employees by Departments

0

100

200

300

400

500

600

700

800

permanent temporary/start-up

56

7210%58

536

2013 2014 2015

576570

90%

Number of employees by type of contract

All employees are taken on against the national tanning industry contract.

74

Breakdown by type of contract (Men - Women)

2013 2014 2015M W total M W Total M W Total

Permanent 402 134 536 439 137 576 432 138 570

Temporary 44 12 56 65 7 72 53 5 58

Total 446 146 - 504 144 648 485 143 628

Temporary Agency Contracts 20 2 22 1 - 1 3 - 3

Interns 2 2 4 1 4 5 5 5 10

In 2015, 37 temporary/apprenticeship contracts were changed into permanent contracts, confirming the intention of the Company Management to stabilize contracts with its employees as far as possible (70 in 2014).

Consistently with the company policy to create stable and lasting employment for its employees, in 2015 90% of personnel was taken on against permanent employment contracts while 10% are on temporary or starter contracts. The change with respect to the previous year is due to the number of persons generally recruited during the year, against temporary contracts. The percentage of employees taken on against permanent contracts confirms the stability of employment relations even with respect to the average figures at a national level recorded by UNIC (2014 Sustainability Report): in Italian tanneries 85% of employment contracts are permanent contracts.In 2015 very little use was made of atypical forms of collaboration: as to 31 December 2015 there were three temporary agency contracts (the temporary agency contracts in force at the beginning of the year were then changed into temporary contracts).



As for the previous year, even in 2015, all the personnel is employed full-time with exception of 24 employees (9 men and 15 women), 3.8% of the total at the end of 2015, who work part-time. Of these 24 persons, 9 belong to protected categories.

2015No. of new

Recruitments

No. of Terminations

Recruitment Rate*

Turnover Rate*

Men 24 43 3.8% 6.8%

<30 years 6 9 1.0% 1.4%

30-50 12 27 1.9% 4.3%

>50 years 6 7 1.0% 1.1%

Women 6 7 1.0% 1.1%

<30 years 3 2 0.5% 0.3%

30-50 3 2 0.5% 0.3%

>50 years - 3 - 0.5%

Total 30 50 4.8% 8.0%

* Calculation method: No of recruitments or No. of terminations divided by the total number of employees at the end of 2015

The turnover of employees shows a negative balance: in the period examined 30 new workers were recruited by the Company, while 50 workers left the company (recruitment rate 4.8%). The turnover calculated as ratio between the number of persons who left the company during the year and the number of employees on the payroll on 31 December 2015 is 8%, which increased with respect to 2014 when it was 4.9%. This figure refers above all to male staff above the age of thirty (which is in line with the composition of personnel by age and gender). The recruitment dynamics show that the growth rates are above all in the 31-40 age group. Of the 30 new employees recruited, 10 fall into this age group and 8 in the 18-30 age group.

76

Trade Union relations 2013 2014 2015

No. of trade union members 181 193 191

% of total employees 35.6% 29.8% 30.4%

No. of hours for trade union leave

427 225 203

In terms of Industrial Relations, relations with Trade Unions representatives and the RSU (amalgamated union), are constant and based on informal general meetings relevant to the performance of the company and other specific issues. With respect to 2013, when there were particularly intense trade union discussions (resulting in a higher number of hours for trade union leave), in 2014 the number of hours relevant to trade union leave decreased (225), with a further decrease in 2015 (203 hours).

30.4% of the company's employees are trade union members against the national average of approximately 20.8% (source: UNIC).



Workplace Health and Safety

Dani is committed to protecting and safeguarding the health and safety of workers, by introducing measures to ensure more efficient prevention of workplace accidents. This is confirmed by the introduction of an integrated environmental and safety management system developed in accordance with ISO 14001 and OHSAS 18001, which will very probably be completed before the end of September 2016. Dani monitors the application of procedures and fulfils its obligations for each category of worker, exerting its best efforts to guarantee to all workers a safe, healthy and respectable workplace. 20% of the total number of employees are involved in safety matters. These are roles such as the Employer, the HSO, fire safety operators, first aid operators, and the HSR (workers' health and safety representative).

The following table gives the main figures on accidents in 2015:

2015 Employees and collaborators

Men Women

No. of workplace accidents 25 7

No. of pending accidents 9 2

No. deaths due to accidents 0 0

No. of days lost due to accidents 774 564

No. of cases of occupational diseases 0 0

No. of days lost due to occupational diseases 0 0

Total of workable days for the workforce 126,802 36,230

Total number of hours worked 930,124 231,979

Days of absence in the reporting period 6,475 1,835

Absenteeism rate 5.1% 5%

Accident rate (injury rate) 26.9 30.2

Severity rate (lost day rate) 0.368 1.298

78

In order to calculate the accident rates, all the accidents that occur in the company are taken into account, as set forth by applicable laws, including those requiring less than 3 days of absence. During the year no outside personnel were involved in accidents.There were a total of 43 accidents (11 pending), up by 48% with respect to 2014. The total number of days of absence also increased due to injuries: 1338 in 2015 (+73% with respect to 2014). Excluding pending accidents, the number of days of absence were equal to 643 (vs. 494 in 2014).

0

5

10

15

20

25

30

35

40

Workplace accidents Pending accidents

11

7

10

32

2013 2014 2015

1619

Accident trends



Days of absence due to injury

Accident frequency rate

5102 4102 3102

824

691

773

494

1338

643

Days of absence Days of absence (excluding pending accidents)

0

350

700

1050

1400

These results are reflected on the injury rates which compare the number of accidents and days lost due to accidents to the number of hours worked during the year and the number of workers present.In 2015 the frequency rate was up by 75% with respect to the previous year while the gravity rate increased by 35%: this means that more accidents occurred with more days off work.

5102 4102 3102

20.2622

14.095415.8491

27.679524.1908

37.1943

Injury rate (excluding pending accidents)Accident frequency rate

0

10

20

30

40

80

Accident gravity rate

Accident incidence rate

The incidence rate increased by 64% with respect 2014: this means that the number of accidents increased with respect to the number of workers.

5102 4102 3102

0.7259

0.6087

0.6448

0.5562

0.4121

1.1573

Accident severity rate (excluding pending accidents)Accident gravity rate

0,0

0,3

0,6

0,9

1,2

5102 4102 3102

40

27.8261 30.1109

49.382745.9588

66.358

Incidence rate (excluding pending accidents)Incidence rate

0,0

17,5

35,0

52,5

70,0



Temporary disability, on the other hand, measures the average duration of accidents: in 2015 this was equal to 20.1 days per accident, below the figure in 2014 (26 days off work due to injuries).More specifically, the 32 accidents which occurred in 2015, included:

1. 4 accidents considered to be serious (more than 40 days off work): • 2 accidents in the “Shipping” department for a total of 181

days off work.• 1 accident on the outdoor yard for a total of 78 days off work. • 1 accident in the “Footwear Finishing” department for a total

of 80 days off work.2. 10 accidents with prognosis of more than 10 days;3. 18 accidents with a prognosis of less than 10 days, which

resulted in an average of 5 days off work;

Temporary disability

5102 4102 3102

43.188

35.826126.6552

20.094

26

31.1163

Temporary disability (average duration) (excluding pending accidents)Temporary disability (average duration)

0,0

12,5

25,0

37,5

50,0

82

2013 2014 2015Type ofSafety Course Participants Total number

of man hours Participants Total number of man hours Participants Total number

of man hours

Basic Safety Course pursuant to Legislative Decree 81/01, the State-Regions Agreement, courses for specific risks

510 1215 475 1,892 270 649

Course forforklift operators 16 80 33 292 64 256

Course for hydraulicloaders (mechanical claw)

3 48 11 94

Platformcourse 5 20

Course for fire-fighting emergency operators 26 144 51 248

Training coursefor Workers' Health and Safety Representative

10 17 0 3 48

Training Coursesfor HSO/PPSM (Prevention and Protection Services Manager)

0 4 20

Courses forSupervisors 10 28 59 162

Manual handlingof loads 38 37 0 45 90

Emergencyplan 179 551 110 114 150 77

Firstaid 72 305 115 258

Company courses* 317 459 1122 864

Total 753 1,900 1,051 3,302 1,894 2,766

* Courses on safety organised by the company

Particular importance is given to training and updating courses for employees, supervisors and managers on security issues. In 2015 a total of 2,766 hours were dedicated to training courses (calculated as the sum of all hours used by all workers) with respect to 3,302 hours in 2014.The topics focused on different aspects of prevention and health protection:


SOCIAL SUSTAINABIL-

ITY


Safety training course

The high number of hours in 2014 was due to the higher number of employees taken on by the company which resulted in many hours of basic safety courses. The number of hours quite naturally decreased in 2015, given the frequency of obligatory training courses.

In particular, a high number of hours were dedicated to company courses, confirming the importance that the company places on safety, which goes well beyond the obligations set forth by law. In 2015 a campaign was carried out to raise awareness on safety issues, above all in the case of supervisors and forklift operators. Above all in the case of supervisors, shadowing was arranged in order to make the supervisors more autonomous when carrying out safety audits, in order to facilitate the reporting of problems.

5102 4102 3102

753

1,900 1,894

2,766

3,302

1,051

0

1.000

2.000

3.000

4.000

Number of participants Total number of hours

According to the 2011 State Regions Agreement, basic safety courses and courses for specific risks are planned, according to the analysis of the duties.

SOCIAL SUSTAINABIL-

ITY

84

Training and development

Like all large companies who face the competitive challenges of the market, Dani considers continuing education to be a strategic resource, whose aim is to encourage professional development and personal motivation. In parallel with “on the job” training, the company promotes training courses on notions concerning transversal and professional topics with training institutes recognised by Veneto Region, and in cooperation with the Industry Inter-professional Funds of which the company is a member.

The training plans start from the awareness that it is necessary to integrate the employees from different departments and companies which, following the reorganization in 2013, are now part of Dani. The training plan (annual) is structured to take into account the objectives, organizational development and individual training needs.

Training covers different topics, including:Training on workplace safety aspects;Training on environmental aspects;Practical training on machines;Training on the use of control instruments;Course on understanding and interpreting the technical documents of products and processes;Courses on how to fill in the forms on machines;Courses on the management of non-conforming products;Specific training and/or technical/professional updating courses.



Total hours of training, by Division/Factory 2013 2014 2015 Changes

%

Automotive 4,459 5,582 3,548 -36%

HSF 2,360 3,141 3,463 +10%

Quinta Strada (only as from May 2014) - 422 1,656 +293%

Total number of training hours 6,819 9,145 8,667 -5%

Average number of hours per capita by gender (2015) Men Women Total

Average per capita 12.8 15.5 13.8

Average number of hours per capita by category 2015

Senior managers 38

Middle managers 37

White collar workers 27

Blue collar workers 10

2013 2014 2015 Changes %

No. of courses held 518 1,030 1,234 +20%

No. of course hours (teaching) 2,068 2,980 2,310 -22%

Total number of man hoursof training received by employees

6,819 9,140 8,667 -5%

Average per capita(on total number of employees as to 31/12)

11.5 12.4 13.8 +11%

Hours worked in the year 1,181,934 1,198,803 1,164,231 -3%

Relationship between training and total number of working hours

0,58% 0,76% 0,74% -2%

86

Training courses are customised for specific corporate functions and are subdivided into courses to develop technical and behavioural skills. Workplace quality and safety are topics that involve most Dani employees in terms of the total number of training hours (man-hours).

The training course provided in the past three years have concentrated above all on the following:

For Dani, investing in human capital also means establishing ongoing and mutually beneficial relationships with schools and universities, so as to transfer skills and provide opportunities for growth and development to young people (for more information in this regard see Chapter “The company's territory and citizens”).

Type of training courses (total training hours) 2013 2014 2015

Quality 2,407 2,408 1,972

Safety 1,900 3,302 2,775

Training/job change/operating Instructions 1,203 321 585

Work on board machines 744 2,793 1,814

Sales/Communications/Administration 417 19 99

Languages 60 0 871

Maintenance 56 105 134

Environment 20 103 154

Human Resources 12 74 261

Laboratory 1 - 2

Total 6,819 9,146 8,667



Internal communication and involvement

In order to establish relationships of collaboration between people, while increasing the feeling of belonging and disseminating values and the corporate culture, safety and quality principles, Dani has introduced a number of communications and activities to ensure the involvement of employees.The bulletin boards at all the factories and Dani News are used for this purpose.Dani News is a channel through which all the news about what is happening in and outside the company are published, in a social-economic environment where the dimension of the district goes hand in hand with the tendencies of globalisation.The scope of this communications tool is to help increase the feeling of belonging to the company.

All our employees have had the opportunity of being involved in two social bonding events outside working hours: the Summer Festival and our Christmas Dinner, which are now a part of the Dani tradition. During the Christmas Party Dani presented retirement plaques to nine of its employees who retired in 2016.Some of those who received the retirement plaque had worked with Dani for more than 35 years.

DANI NEWS

NOVITA’ - EVENTI - INFORMAZIONI

BACHECA AVVISI

VOLUME 7, N. 4 - 10 aprile 2016

pag 1

SOMMARIO

Notizie Flash ..................pag. 4

Risorse Umane

Sostenibilità,

Ambiente e Innovazione

Ambiente di lavoro

e Sicurezza

Qualità

Manutenzione e

lavori straordinari

INFABBRICA

19 Aprile 2016

Con�ndustria, con l'obiettivo

di far conoscere e incontrare

le eccellenze del territorio, ha

promosso ai propri associati

la visita alla Dani S.p.A.

LE GRANDI CASE

AUTOMOBILISTICHE

SCELGONO LA PELLE

DANI. . . . . . . .. . . . . . . . .

. . pag. 1

FIERA:

APLF - MM&T............pag. 2

LE GRANDI CASE AUTOMOBILISTICHE SCELGONO

LA PELLE DANI

AUDIT DANI AFC &

DANI TUNISIA............pag. 2

PROVA DI EVACUAZIONE

IN DANI 5° STRADA..pag. 3

È stata presentata a Febbra-

io, al Salone di Ginevra,

la nuova Volkswagen

T-Cross Breeze realizzata

con la pelle Florida di Dani.

Questa è solo uno degli

importanti progetti che

vedono selezionata, negli

interni auto delle più grandi

e rinomate case automobili-

stiche, la pelle Dani.

L’impegno, la dedizione al

lavoro e la professionalità,

unita alla costante collabo-

razione di tutti noi, ci hanno

permesso –anche nel 2016-

di essere selezionati in

qualità di fornitori di pelle

per importanti progetti del

mondo auto.

Le nuove s�de lanciate dall’ottenimento di questi prestigiosi progetti

sono opportunità per dimostrare –ancora una volta- la qualità dei nostri

prodotti, la professionalità di tutti noi e il valore della nostra azienda.

E’ solo insieme, cooperando nel raggiungimento degli stessi obiettivi,

che potremo vincere le varie s�de e rinnovare quotidianamente l’identi-

tà Dani di “fornitore di qualità”.

UN GRAZIE A TUTTI!

FIERA DUBAI:

Leatherworld Middle East

26 -28 Aprile 2016

88

But 2015 was also a year of celebrations for Dani's 65th anniversary; the company organised an event at Piazza dei Signori in Vicenza to which the industrial tanning world, local authorities and mayors from Vicenza were invited to celebrate the history of this company. A stage was set up in the square for a concert with 1,000 seats reserved to employees, customers, suppliers, authorities and friends, while another 1,000 seats were reserved to the citizens. The event was organised in Vicenza, as thanks and recognition not only for Dani, but for the leather district as whole for this territory.The concert portrayed with images and music the themes dear to the values of Dani, from tradition to research and innovation, social and environmental sustainability.Cav. Dani was joined on stage by many different personalities, including the Chairman of DNV, Mr. Nicola Privato, who addressed the issue of social sustainability, and the sole director of Acque del Chiampo, Mr. Alberto Serafin, who underlined the commitment undertaken with Dani to develop and improve the Arzignano tanning district as a whole, thanks to the GreenLife project in which both companies are involved.



In 2015 a survey of the organisational climate was also carried out in order to understand the quality of working life and motivation of workers with respect to the company and the departments in which they work. The purpose is to understand the causes of any possible distress and introduce an intervention plan (training, consulting activities, coaching).In particular, the analysis was carried out using a questionnaire submitted to all employees with the following response rate:

The survey produced a number indications that Dani considers to be possible areas of improvement in the near future and which concern:

Assessment of personnel; Level of involvement of personnel; Interpersonal relationships with managers; Awareness of the duties performed; Clearness of the objectives of duties; The safety of personnel.

No. questionnaires filled in %

Automotive Division 177 70%

HSF Division 222 75%

Quinta Strada Division 54 72%

77%

2400

190 M turnover from foreign markets

laboratories, 9 qualified technicians who monitor and analyse raw materials and products

laboratory tests carried outevery day in 2015

Dani leather is certified by the Leather from Italy Full Cycle

Launch of Zero Impact, a Dani advanced research project

The satisfaction of customers is regularly monitored by customer satisfaction surveys


Customers, products and the marketSales and product policy

Dani is committed to ensuring the highest standards of product quality, service efficiency and on-time deliveries, while focusing on customer needs and maintaining long-term relationships in time. Resolving claims immediately and ongoing improvement, are the cornerstones of how Dani does business. In compliance with the privacy law, Dani protects the personal details of its customers and will not disclose the same, other than within the limits set forth by law or agreed with the customer.Relationships with customers are managed with professionalism and are based on dialogue and reciprocal cooperation.

The values that Dani considers important to maintain and share are:Quality of the product and “Made in Italy”: passion, commitment, skills and creativity to create a unique product. Partnership and cooperation: the desire to establish long-term relationships with clients so as to work and grow togetherTransparency and a sense of responsibility;Innovation: new product lines, research projects and organizational innovation;Internationalisation: openness to other cultures, willingness to get closer to customers and fast deliveries;Sustainability: efficient use of natural resources and valorisation of the people who work for and with Dani.

92

The fundamental objectives of the sales and product policy are:Promoting customer loyalty through cooperation and sharing product quality;Increasing the reputation and fame of the Dani brand through collaboration activities involving sustainability, product quality, transparency and internationalisation;Developing the turnover and margins of the product lines through innovation, and the product and geographical expansion of markets



The uniqueness of Dani leather

Leathers from the Dani tannery are accompanied by Leather from Italy Full Cycle (UNI EN 16484) certification, a voluntary standard that guarantees that leathers are produced entire in Italy, from raw hide to the finished leather.

This certification, which is unique of its kind, ensures full control of the production process, right from the prior and systematic verification of the chemicals used to process hides, in order to further protect our customers and end users. It also guarantees that the very first stages of the tanning process, namely those that transform the raw hide into tanned leather, and are crucial for the success of the end product, are entirely carried out in Italy.Dani leathers are also appreciated for the fact that the raw hides processed come above all from other European companies, that are internationally known to be of the highest quality at an international level.

The careful selection of raw materials, the professionalism of workers and plant technology make it possible to offer a wide range of items and product uses that have made Dani the most important point of reference on the upholstery market and the furnishings and automotive industries. For more than 20 years Dani has also produced leather that requires cutting-edge characteristics for the technical footwear sector, which include items such as mountain boots, boots for firemen and military boots. These products must be water repellent, resistant to high temperatures, transpiring and have very high mechanical strength. Each product code has a data sheet which describes the organoleptic characteristics, specifications and chemical-physical properties of the product.

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The company's two laboratories are equipped with all the instruments required to ensure reliable products and consistent quality to our customers. Dani is able to meet the demands of its customers in full thanks to its wide range of products:

Aniline leather retains the hide's natural surface, and is soft and delicate, Semi-aniline leather retains the hide's natural surface but is more resistant to sunlight and more practical with respect to pure aniline leather; Pigmented leather is highly resistant to sunlight, ensures good coverage of imperfections and is easy to keep clean; Nubuck is smooth, soft transpiring leather with two-tone effect that is velvety and soft to the touch; Automotive leather ensures high performance characteristics with the same beautiful appearance and feel.Leather for technical shoes is water repellent, transpiring, heat resistant and highly resistant to tear. Flame retardant leather: from semi-aniline to pigmented leather, these leathers undergo fire retardant treatment that complies with the strictest flammability tests for the interiors of aircraft, train and public spaces.

Environmental product certifications that make sustainable Dani leather environmentally sustainable complete the picture (see Chapter “Customers, products and the market”).



Customers and markets

Dani's sales trend in recent years may be summarised roughly into three periods:

2009 - 2012: growth linked to the entry in the automotive sector through the acquisition of the former Leather Gbr;2013: further significant growth thanks to the development of new projects in the automotive and information technology sectors;2014 - 2015: consolidation of the turnover at about 200 million Euro per annum, thanks above all to the strength of some industries that use Dani leather, given the gradual completion of some important projects in the Automotive Industry and Information Technology sectors.

Turnover (MLN €)

250

187.5

125

62.5

2009 2010 2011 2012 2013 2014 2015

71116

134

123

210 214 190

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Geographical distribution of turnover

The main business areas in which Dani operates are described below above all in terms of:

1. distribution by commodity use of the turnover, which with respect to the previous year shows a drop in the IT-Information Technology sector (from 23% to 7%), against a substantial increase in the furniture industry (from 18% to 27% ) which is less marked on other markets;

2. distribution of the turnover by geographical area, which, with respect to the previous year, shows a drop in America (from 25% to 10%) that corresponds to the drop in the IT sector, and a substantial increase in Europe (from 50% to 61%);

Turnover FORNITURE LEATHER GOODS IT AUTOMOTIVE

27%

16%

7%

50%

10%

USAIT

ASIAEU

24%61%

6%



The graphs also show the strong exports of Dani tannery, thanks above all to the Automotive market. It should also be noted that Dani's Italian customers are highly export-oriented.

Dani is able to meet the demands of a wide range of markets, thanks to its specialised divisions:

The Automotive IndustryDani produces whole and cut full-grain and crust leathers for this industry which is used for different parts of car interiors such as steering wheels, seats, door panels, knob covers, gearshift levers, dashboards, headrests and armrests, in line with the highest industry standards.As from 2014 Dani also supplies stitched seat covers, thanks to its partnership with the Slovenian company Dani AFC. All this makes Dani a truly complete supplier in the eyes of all the most important car manufacturers in the world.

Furnishings industry, Footwear and Leather goodsThe Home Style & Fashion division specialises in a wide range of items for the furnishings, foot wear and leather goods industries. The items for the furnishings industry are produced for a wide range of uses, from upholstered to furnishing items, from walls to floors and even offices, hotels and airports. Our leather is used for the production of classic and sports shoes, including boots and moccasins.Dani HS&F serves some of the most prestigious brands in the fashion and furnishing industries in the world.

Technical Footwear SectorFor more than 20 years Dani has been a leading supplier to the technical footwear industry, with products for the army, rock climbers, mountaineers, bikers, the Fire Brigade, including motorcycle boots and safety shoes for companies. Thanks to the experience acquired in recent years, Dani leathers guarantee excellent performance in terms of water repelling

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properties, resistance to extreme temperatures, wear and tear.

Information Technology SectorFor several years Dani has been a supplier of aniline and semi-aniline leather for telephone and tablet covers.

Transport IndustryDani produces fire-retardant leather for the aeronautics and rail transport sectors. The leather for these sectors is produced with highly technological processes in order to pass the very strict testing suppliers are called to undergo when supplying leather of this kind, such as:DIN 4554-5 Smoke density and toxicity;FAR/JAR 25.853 Vertical Test;AIRBUS/BOEING Smoke Density and Toxicity.

These also include leathers for the nautical industry, that are available in six lines in more than 250 colours.

Customers and Sustainability

Dani's ongoing cooperation with customers produces fertile ground in the environmental field. This is an area where shared values, a long-term vision and attention to each other's needs are of paramount importance. In addition to the above we also arrange visits for our customers to the tannery and training courses for the sales staff of our customers. In addition to the above forms of collaboration, we also arrange initiatives to better understand the basic principles and guidelines in the actions of our customers on the question of social responsibility and sustainability.

2015 was an important year for Dani and some of its partners, with the start-up of the Zero Impact project. This project is also intended as a further starting point for the future technical



development of Dani that will be applied to production as a whole.

The main innovations of the project are:1. Innovations in the production process; 2. Reforestation of some Italian areas in accordance with

internationally certified procedures.

1. Zero Impact skins are “heavy metal free” in accordance with ISO 15987 standards, that set the maximum permitted heavy metal content as 0.1%. This has required the simultaneous application of the results of the research and development work carried out in recent years. More specifically: Unhairing stage: oxidative unhairing was introduced, where hydrogen peroxide is placed in a special polypropylene drum. This technology makes it possible to obtain by-products that may be reused by the industrial, farming-industrial and energy sectors. Tanning: new tanning metal-free technologies have been developed, based on the use of enzymes and polysaccharides which give the skin the same physical and mechanical properties of leathers treated with traditional tanning methods. Re-tanning and finishing: ad hoc very low metal content products were selected, and, for the finishing stage, water-based products were specifically selected.

2. The company decided to offsets the greenhouse gas emissions produced by a part of its production in 2015, amounting to 2,000 tons of CO2eq. Total emissions produced by Dani, which were quantified through the Carbon Footprint of the product, were therefore offset in part by purchasing 2,000 carbon credits from forestry projects in Italy, that correspond precisely to 1,869 trees planted by AzzeroCO2 partner in the following areas: Gargano National Park (FG); Internuraghes - Nuoro Municipality (NU); Po and Orba River Park (AL);

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Po Delta Regional Park (RO).

Dani was joined by a number of partners in these projects, who have developed new ad hoc product lines:Desirèe;Gamma Arredamenti;Living;Aku.

During this project, the Website “zeroimpactleather.com” was also launched which publishes information on technological innovations, partners and the reforestation project. Dani also advertised the launch of the Zero Impact project in many specialised furnishing and design magazines, and other Italian magazines such as Interni, Living, AD etc..


PO DELTA REGIONAL PARK

GARGANO NATIONAL PARK

PO AND ORBA RIVER PARK

INTERNURAGHES FARM


To better understand the importance of sustainability for our customers, in 2015 matters relating to sustainability were included the customer satisfaction questionnaire, in order to:

Ascertain the importance our customers place on sustainability issues;Ascertain the importance our customers place on sustainability issues in the near future.

Approximately 30% of the total number questionnaires sent were returned. The questionnaires asked customers to give a score from 0 to 10 on the issues listed in the table below:

The importance of sustainability for our customers

10

8

5

3

Sustainabilityand strategy

Consumerand certifications

Certifiedleather

Riskmanagement

Selection of the supplier

7.5

6

8 8 8

The results confirm the importance that in recent years Dani has placed on creating responsible value, the management of the brand's reputation, reducing the impact of processes and production facilities. Dani intends to face the challenges that the economic contest is raising by focusing on the sustainability of the product and its business model.

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Quality Control and Product Safety

Dani is committed to ensuring the highest quality and safety standards to customers, above all by monitoring and testing raw materials, products and by-products.The European Union has introduced safety standards for Community and imported products and Dani not only complies with the applicable regulations in force but has also introduced control systems and higher quality standards.Dani uses certified management systems and product certification to ensure continuous improvement (see paragraph “Certification system”). Dani also has two laboratories which carry out tests to ensure compliance with industry standards and/or customer specifications. The laboratories ensure that leathers comply with the parameters established by international regulations and the specifications requested by customers.

The HSF laboratory has 48 instruments and employs 5 members of staff, 3 of these carry out physical and chemical tests on the leathers while 2 carry out research and development activities. The Automotive laboratory has 79 tools and a staff of 4. 7 new instruments were purchased for our laboratories in 2014.

Our staff mainly carries out:Production control tests;Registration checks;Chemical product control tests on incoming products;Any tests requested by customers or specifications, sending the relevant test reports to customers;Sample management;External test management.



The most important work carried out by the laboratories re the following:Quality control on all leather lots before shipment;Quality control on all leather lots during production;Checks on incoming chemical products;A check is carried out to ensure compliance with applicable laws on banned substances.

All the data collected during tests are recorded and stored by production lot number in the case of leathers or by lot number in the case of chemical products, in order to ensure complete traceability. Data are read and recorded every day in order to process them quickly, producing statistics and consistency trends in time for specific items, a particular test or chemical product with specific software.

Quality controls on leather before shipment Quality controls are carried out on all production lots, before shipment Different tests are carried out according to what the leather is to be used for. Each item produced by Dani is associated with a specific technique that complies with European standards and/or customer specifications. The laboratory of the Automotive division uses the specifications of the customers of car manufacturers. Dani also carries out tests based on specific customer methodologies.The test methods also comply with international regulations, above all UNI EN ISO standards (sampling area, colour fastness to rubbing, tearing resistance, etc.).

Above all the laboratories carry out physical tests which include: Mechanical tests (tensile, tear, elongation);Colour fastness (rubbing, bending, adhesion, crockmeter, resistance to light, water drops, PVC);Tests for waterproof leathers (dynamic waterproofing properties against inflowing water or water absorption);Water vapour permeability tests, heat resistance and flammability tests.

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The chemical tests carried out on the leather are above all pH and chromium oxide testsOur customer services include sending the test report, after sales service, information on how to clean and care for leather.

Controls during the production processThe entire production process is continuously monitored both by means of tests performed in the field, and by laboratory tests.Every day our laboratories carry out tests such as cross-checks of the pH on tanning baths and pickel tests to check that results comply with the department data recorded in these two processing stages. During production tests are carried out in the case of special processing. Water-resistance tests are carried out for some articles, such as the leather used for waterproof shoes. A flammability test is carried out on all the items produced for the automotive sector both during and at the end of the production process.Visual and instrumental checks are carried out on the colour of the leather during dyeing and finishing, during final selection and by the laboratory.

Checks on incoming chemical productsIncoming chemical products are checked before the same are used in production. The list of products checked is drawn up by Dani's Technical who take into account a number of different factors including consumption and critical problems. The following are the checks carried out on particular types of chemical products:A colorimetric comparison using a spectrophotometer is carried out on colouring agents;The correct titration of chemical products is checked;An IR spectrum for comparison with standards is carried out on fattening, resins and similar products and the actual percentage of active substance is checked.



A check is carried out to ensure compliance with applicable laws on banned substancesDani checks the presence of the following substances, with the help of certified external laboratories:Aldehydes (formaldehyde);Colouring agents (aromatic amines);Phthalates (DIBP, DBP, BBP, DEHP, etc.);Metals (chromium VI, Lead, Cadmium, Mercury, Arsenic, Cobalt, Nickel, etc.);Preserving agents (Chlorocresol, Pesticides, DMF, organostannic compounds, PCP, TCP, TeCP, etc.);Short-chain chlorinated paraffins;Flame retardants (brominated compounds, etc.);Emissions (VOC).

Number of controlsIn 2015 just over 175,000 tests were carried out, corresponding to approximately 400 tests a day, in line with the 2014 figure.

No. of tests in 2014 No. of tests in 2015

Physical tests 159,071 165,072

Chemical tests 10,217 10,251

Total 169,288 175,323

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Sales communication

In its communications Dani wishes to convey that it is a credible, reliable and proactive partner.

Dani leathers are accompanied by a data sheet which gives the technical and qualitative characteristics, product specifications and certifications. Leather products available for shipment in stock are also accompanies by a colour chart.

Dani has a stand at all the most important trade shows where it promotes its products:

Fair/Exhibition Place Period

Première Vision Paris February

Lineapelle Bologna March

APLF MM&T Hong Kong April

Leather Middle East Dubai May

Lineapelle Milan September

Première Vision Paris September

In addition to what has now become a standing appointment in April at the APLF Trade Show in Hong Kong, in 2015 Dani also had a stand at all the most important trade shows such as “Première Vision” and Lineapelle, and also took part for the first time in the “Leather Middle East” Trade Fair in Dubai, as part of a sales strategy to strengthen its presence in the Middle East.



Dani also uses the following sales tools:Publications in hardcopy and on-line sector magazines;Sponsoring activities or the presence of “Dani materials” at sales and corporate events of customers and at sales points;Integration of customer communications (exchange of press releases, joint announcements , etc....);Guided tours for customers at the tannery;Training courses for the sales staff of customers to help them get across the value of leather correctly.

On-line communicationsIn 2015 Dani arranged communications through different channels, including traditional and next-generation channels. In the same year, Dani set up the “Dani Sustainable Leather” pages on Google+ and Linkedin. This allowed the company to widen its horizons and feel closer to those who are interested in its development, in terms of sustainability, technological innovation and new proposals, and who are wish to follow the company's progress step by step.

In January 2015 the Group's website was also restyled, with new sections and technical changes that make the website easier to use.

Finally, with the publication of the first Sustainability Report the website now has a section entirely dedicated to the report.To support the publication of its first Sustainability Report a hardcopy abstract called “Yes, we Report!” was created as continuation of the first abstract “Yes, we care” in which Dani stated its commitment to sustainability.

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Company visitsIn 2015, 35 guided tours of the three factories were organised. Visitors are given a brochure produced by the company called "Guide to the production cycle" that describes each step of the production cycle with pictures, photos and explanations that help visitors recognise the different stages of the tour. A video in Italian and English was produced for the training courses held on the premises of its clients, which presents the most important stages of the production cycle, taking viewers on a virtual tour of the departments.



Customer satisfaction

Dani is strongly committed to customer satisfaction and to measuring customer satisfaction through dialogue and listening, above all through the company's quality management system. Customer Satisfaction may be monitored in different ways for the two company divisions.The quality management system developed in the HSF division calls for a customer satisfaction survey every 2 years. The last survey was carried out with the questionnaire which was answered by approximately 30% of the companies to which it was sent.In this survey the company decided to go one step further: the questionnaire not only examined quality aspects but tried to ascertain the customers' interest in environmental issues. The scope was to see if there was a positive response to Dani's efforts on environmental matters.

QualityDifferent aspects were examined, and customers were asked to state the importance and level of satisfaction for each, so as to calculate the difference, intended as the “satisfaction gap”. The overall satisfaction, on a scale from 1 to 10 was 8 (8,1 in the previous survey).The topics were all judged to be important by customers and the following table shows the average of the total scores. The scale used ranges from a minimum of 1 (low importance/low satisfaction) to a maximum of 10 (high importance/high satisfaction).

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Characteristics QualityImportance

for the customer

Satisfaction for the customer GAP

Prompt deliveries 9.1 8.2 0.9

Fast deliveries 9 8.1 0.9

Quality consistency 9.5 7.9 1.6

Perception of customer's needs. 8.9 8.1 0.8

Innovation 8.3 7.8 0.5

Technical documents 8.8 8.1 0.7

Sales-administrative documents 8.8 8.5 0.3

Handling of claims 8.8 7.5 1.3

Number and quality of visits 8.2 8.2 =

Quality of agents/back office relations 8.6 8.5 0.1

Value for money 8.8 7.7 1.1

New products 7.8 7.4 0.4

A first analysis of the results above all confirmed the overall reliability that Dani guarantees to its customers. The areas with the highest gap were: quality consistency, problematic management, value for money and prompt deliveries, for which the quality management system will introduce appropriate corrective measures.

The Automotive Division measures customer satisfaction in different ways with respect to the other division. In the Automotive Division each customer uses its own calculation methods to periodically assess the quality of supplies in terms of product conformity with respect to specifications and compliance with delivery dates. It is difficult to provide an indicator which summarises the assessment of customers in the Automotive industry, given the subjective nature of these assessments, but on the whole the reliability of our supplies is confirmed.


2

678

5

1.5of the turnover invested each year by Dani in research and innovation

quality management system certifications for the company as a whole

important innovation projects currently underway

projects approved in 2015 for product style innovation

Prizes and awards obtained in the last 3 years

product certification for the Home, Style & Fashion Division


Innovation and QualityResearch and innovation

Dani considers Research and innovation to be essential for its medium and long term business development.Innovation involves:The product;The process;The organization.Activities are developed according to specific basic principles which include the following:Reducing the consumption of resources and environmental impacts, that transversally affect all the aspects of innovation;Improved performance of leather and production efficiency;Supply chain approach, in order to ensure cooperation and the creation of partnerships with suppliers and customers, with a gradually increasing networking approach;Collaboration with universities and research institutes;Growing international approach.Each year Dani invests approx. 1.5% of its turnover in research and innovation.The following table summarises the main projects in the period 2013 - 2016:

Product innovation

Process innovation

Organisational innovation

Green L.I.F.E. ✔ ✔

Safety and Environment Management System ✔

EPD Process ✔ ✔

“Linkki” project ✔

Indeco ✔ ✔

New collections ✔

Zero Impact ✔


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Dani is the coordinator of the project “Green Leather Industry for Environment”, financed by the European Commission under the “LIFE” programme.This initiative is the first step in a process shared at a district level, together with five companies belonging to the Vincenza tanning supply chain: Dani S.p.A. (tannery), Gruppo Mastrotto S.p.A. (tannery), Ikem Srl (supplier of chemical products), Ilsa S.p.A. (a company in the biotechnologies and technical farming equipment industry) and Acque del Chiampo S.p.A. (provider of the water conditioning service)

The goals of the project are ambitious:To reduce water consumption in the wet operations phases by 20%;To reduce consumption of chemical products in the wet operations phases by 20%;To reduce solid waste by 20%;Elimination of the sulphide in the leather unhairing stage;Recovery and recycling of 15% of the tanning cycle by-products.Creation of a “technology hub” to share ideas and technologies.

EcoL.I.F.E. Project(Ecological Leather Innovation for Environment)

LIFE13 ENV/IT/000840

www.greenlifeproject.eu

reduce by 20%the water consumptionin the wet operation phases

reduce by 100% of chromium in solid waste

reduce by 20%the solid waste

reduce by 20%the cons. of chemicalproducts in the wetoperation phases

recovery andrecycling of 15%of the tanning cycleby-products

create a “technology hub”to share ideasand technologies

ARZIGNANO ITALY


Activities will be developed over three years, with an investment of 2.3 million Euro, 50% of which will be financed by the European Commission.

The results we have achieved so far are encouraging. These are: A 15-20% reduction of water consumption in the liming phase; Development of a new tanning agent from renewable sources, that will be tested in 2016;Start-up of experimental in vitro and field tests for the use of hair and liming baths, all appropriately treated, as fertilizer and biostimulant componentsOrganisation of a survey on liming and tanning processes in Arzignano district.

The project was carried out together with different information and participation events, the most important of which was the seminary held on 15 December 2015 at the Arzignano Galilei Technical School called “greenleather 2016”.

Safety and Environment Management SystemIn line with the values of Dani, where our business activities are based on respect for the well-being of people and the commitment to ensure the best possible workplace health and safety conditions for the same, and investments to reduce the consumption of resources and environmental impacts, a procedure to obtain certification of the integrated environmental and safety management system in accordance with ISO 14001:2015 and OHSAS BS 18001 standards, was started in 2015. After the many product certifications obtained by Dani, the company has decided to introduce this management system as well in order to: Ensure systematic compliance with the law, reducing the risks of violation;Reduce the risks to people and the environment;Reduce reputational risks for Dani;Improve the efficiency of our processes;Objectively measure our performance;Commercially promote the company on the market;


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Be seen by customers as a solid and reliable partner in the “supply chain”.Dani expects to obtain this certification at the end of 2016.

The “Process EPD” ProjectWith the EPD (Environmental Product Declaration), Dani has calculated the environmental impact for the production of 1 sq.m. of an average piece leather. With this ambitious project, the aim is to identify the main items produced by Dani and to calculate the specific impact for each of item. This will make it possible in some way to compare the production processes which produce the greatest impacts with respect to others. This project should also be completed in 2016.

“Linkki” projectDani has decided to introduce a MES system for the management of production progress and control. The MES (Manufacturing Execution System) is an IT system that is installed between the database and the control software at an operating level. Dani has called the project “Linkki”, Finnish term for network, link. The name is suggestive of the benefits that the system will bring: precise and direct data, and consequently precise and sophisticated production control.In addition to these advantages, Linkki will reduce the paper used to date for forms and quality documents. This will drastically reduce the time required to file the information obtained and the time required by personnel to collect and distribute hardcopy documents. Once the system is operational, Dani will have a database of processed information that will make it possible to have reports based on efficiency indicators such as the OEE (Overall efficiency of a plant). All this will be achieved thanks to the fact that the software is able to talk with each information system installed in the production department, from which data may be obtained and processed as required on aggregate indicators.What does the introduction of Linkki entail? The system requires the installation of a tablet on each production machine.


The tablet will be used by the machine foreman to check the orders planned by the production programmer. The architecture of the system was created from a “bottom” approach, interviewing the people who run the machines and have to face production problems every day. The model created made it possible to decide how to distribute the tablets and define the different roles.On the date this report was drawn up (June 2016), tablets had been installed on about 50% of Dani's machinery. The goal is to introduce this system on 100% of the machines.

Indeco Project(Industrial Alliance for reducing energy consumption and CO2 emission)Energy efficiency is yet another initiative by Dani to reduce polluting emissions and is a challenge with a twofold positive impact: for the environment and cost reduction. Dani was a partner of the European Project Indeco, funded by the European Commission for the period 2012 - 2015 which involved the analysis of energy consumption of the company in order to introduce energy efficiency measures. The project coordinator was Unic (National Tanning Industry Union), supported by tanneries, shoe factories, trade associations and consulting companies from about ten different European countries


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for a total of 15 project partners.

The main objectives of the project were:To provide a systematic framework of the energy performance of the company;To identify possible areas of improvement;To prepare a structured check list to keep company consumption under control.For more information on the energy efficiency investments made please see page 48.

New collectionsProduct innovation continues to be one of Dani's strong points. Its ability to meet customer requirements and offer new and diversified products to the market make Dani a point of reference in the leather tanning world.Every year Dani presents has several tens of new product designs to meet the needs of the market. In 2015 the company completed 78 successful projects including:59 projects approved by the world leading car manufacturers in the Automotive sector;19 projects approved by leading customers in the furnishing, footwear and leather goods industries.


System and Product Certifications

Our certifications represent the final result of a process whose aim is to introduce advanced organisation models in the company in order to improve our ability to satisfy the needs of our stakeholders. The management and product systems are then certified by independent third party bodies, to ensure transparency to the exterior and correct communications. The processes and products which are constantly monitored and improved in terms of quality, the environment and the safety of workers are a value not only for Dani, but even for customers, employees and the local community.

Dani S.p.A. certificationsDani S.p.A. has obtained the following certifications for its quality management system:• Automotive division: UNI ISO/TS 16949 obtained in 2010;• Home Style and Fashion Division: UNI EN ISO 9001 obtained in

1997 and UNI ISO/TS 16949 obtained in 2015

As well as Leather from Italy Full Cycle (UNI 11239), certification, which guarantees that Dani carries out the full leather processing production cycle in Italy, from hides to finished leather.

The Home Style and Fashion Division also obtained the following product certifications:• UNI ISO/TS 14067 - Carbon Footprint of Product, (calculation

of the climatic footprint) obtained in 2011;• UNI EN ISO 14025 - Environmental Product Declaration

(calculation of the environmental impact) obtained in 2012;• RAL UZ 148 - Der Blaue Engel (low-environmental impact

leather for the furnishing industry) obtained in 2012;

2011

2014

2013


Awards and prizes awarded to DANI S.p.A.

Italian Award for Innovation: Award of awardsOn 14 June 2011, Giancarlo Dani received from President of the Republic Giorgio Napolitano, this prestigious award, created as recognition for Italian companies who have distinguished themselves in promoting a culture of innovation.The reason given for the award was particularly significant “for having made organisational and product innovation the lever to become an important company at an international level while keeping its entire production in Italy”".

Tannery of the year: finalistEach year two finalists from each continent are selected for this important international tannery award. In Dani was chosen in 2013 to represent Europe thanks to its achievements in 6 different categories: technical innovation, environmental compatibility, development of human resources, commitment to the community, customer relations and economic sustainability.

GreenItaly report: top 100 companiesThis is the annual report drawn up by Unioncamere and Symbola Foundation which contains a list of 100 Italian companies that produce with the least possible impact on the environment. In 2014 Dani was listed as one of these 100 diligent companies, thanks to its projects in environmental research and certifications. Dani received this recognition even in 2012.

The CEO Giancarlo Dani was appointed Cavaliere del LavoroGiancarlo Dani is one of the outstanding entrepreneurs who received the Order of “Merit for Labour” by decree of the President of the Republic, Giorgio Napolitano.This important award recognizes the levels of excellence achieved by Dani tannery. The Cavalieri del Lavoro are chosen from «Italian citizens who in working in a field continuously for at least twenty years with independent responsibility» have «contributed in a significant manner, through business activities, to economic growth, social development and innovation».

10

6

10

The Dani Code of Ethics: this is the compendium of moral rights and duties whose aim is to disseminate and share the values in which Dani believes and through which it creates trust with the outward world.

collaboration with Universities and Research Institutes;

university students hosted as undergraduates in recent years

interns from local high schools enrolled in 2015

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The company's territory and citizens

Dani considers it important to build relationships with all its stakeholders, based on fairness, transparency and ongoing dialogue, pursuing shared goals to create value and sustainable development opportunities. Dani intends to be a proactive social actor in all aspects of sustainability: environmental, economic and social.In its relations with public institutions and trade associations, Dani is committed to providing the data and information required with spirit of collaboration and in a complete and prompt manner within the deadlines requested according to the times required for the technical assessment procedures. All activities relevant to public financing are carried out in full compliance with the law, and are documented and correctly filed. In relations with the local community, Dani intends to focus at all times on the environment, landscape, and interests of the local community, while reducing impacts on the territory to a minimum. To achieve this, Dani complies in full with all applicable environmental regulations and invests in technologies and equipment that have the least impact on the environment.

To give an idea of the indirect economic impacts generated by Dani S.p.A., it is sufficient to consider that about 450 persons work for Dani in the district, including subcontractors and suppliers, and for many of these Dani is one of their most important customers. Another aspect that should be noted is the impact produced by Dani on the Public Administration in terms of the taxes paid directly by employees: even if these are not paid directly by Dani, they come from the salaries paid by the company.

SOCIAL SUSTAINABILITY

2014 2015

INPS (Italian Social Security) deductions

1,750,350 1,808,757

IRPEF (personal income tax) withhold-ings

3,736,976 3,880,183

Total 5,487,341 5,688,940

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Relations with public institutions and/or trade bodies

Dani has relations with the following institutions:

Category Authority Dani position

Trade, protection authorities of industry interests

Unic - National UnionTanning industry

The Chief Executive Officeris a director

Utiac - Association of users of the Arzignano water conditioning

plant

The Chief Executive Officeris the chairman

Technical Associations for up-dating and training

Vicenza Confindustria (Associa-tion of Italian Industries)

The Chief Executive Officer is a member of the council

AICC - Italian Leather Chemicals Association

8 technicians are members of the association

Dani also has dealings with public institutions such as Veneto Region and the European Union for the allocation of contributions, either directly or through other authorities/institutions.It also has dealings with institutions who have control and authorisation functions such as:Vincenza Province;Acque Del Chiampo.

A company like Dani, that has a strong influence on the territory, must ensure that its relationships with these institutions are correct and transparent in order to be a credible and important partner with whom they may establish partnerships that are useful both to the company and the territory.



It should be noted that in 2015, the CEO Giancarlo Dani was appointed member of Confindustria.

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Activities forSchools and Universities

In Italy the school and working works often find it difficult to liaise. A closer and more systematic relationship is therefore necessary between the school and the institutional and social stakeholders in the territory, and above all, with the production system and the labour world through a stable training alliance.That is what Dani has for many years supported stable collaborations with schools in Arzignano, in order to share know-how in different ways:

Visits by high school classes to the tannery, above all from the Technical High School and ITIS Galilei (Industrial-Technical High School) in Arzignano;By hosting internships, 3 interns in 2013, 4 in 2014, 10 in 2015. Each internship project is discussed with the school and the area manager in order to carry out specific activities according to the knowledge of the student and the school he or she comes from. In any case, the intern receives basic training on safety (4 hours) and quality just like any other employee;Hosting undergraduates. In recent years 6 university students have done an internship with the company in order to prepare their dissertations. Dani believes that it is important to have a close relationship with universities with a mutual exchange of knowledge and experience: on one hand students bring their skills to the company and have the possibility of immediately putting them into practice, and on the other hand the company offers students the opportunity of experiencing a first approach with the labour world, which is very important for the personal and professional growth of young students.



As confirmation of the above, the following are the titles of the dissertations produced in the company:

Together with Veneto Region, Dani also sponsored 2 study grants for 2 researchers from Padua University, for the following departments: Department of Technology and Management of Materials, Department of Experimental Veterinary Science.

The network of relations that Dani has created over the years with Universities and Institutes, has made Dani one of the most dynamic companies in our industry today, with increasing market consensus which allows us to look to the future with optimism.

Thesis title Year

Carbon Footprint of the Product. Application in the tanning industry of the law being currently developed ISO 14067. The case Dani Group

2012

Applications of conjoint analysis to design the green supply chain in the tanning industry. The case Dani Group

2012

Analysis and initiatives to improve tanning production processes: the role of the internal customer. The case Dani Group.

2012

Consolidated Financial Statements The case Dani Group 2012

Application of value stream mapping to the tanning industry: the case of Dani Group 2013

Employing a foreign workforce: the case of Dani group 2015

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The Universities and research centres with which we have collaborated are:

Padua UniversityDepartment of Technology and Management of Industrial Systems;Padua UniversityDepartment of Chemical Process Engineering;Padua UniversityVeterinary Department;Naples UniversityDepartment of Organic Chemistry and Biochemistry;Conciaricerca R&D;Aiica (Spanish research centre for the tanning industry);Inescop (Technological Institute of the footwear industry - Spain);Ctcp (Institute of footwear technologies - Portugal).



Social commitment and relationship with the community

Dani has never neglected what it feels to be one of its responsibility: social commitment.Dani supports sports and volunteer associations and educational activities in the area. The contributions paid in 2015, for a total of about 55,000 euro, consist of the following:

Social utility charges

Charges

SOCIAL ACTIVITIES

EDUCATIONAL ACTIVITIES

VOLUNTEER ACTIVITIES

SPORT ACTIVITIES65%

0%

3%

32%

The most important social event is undoubtedly the 2015 Christmas event.Dani has revised its corporate policy and, besides not accepting any Christmas gifts from its customers/suppliers, it has decided to donate the amount allocated to Christmas gifts to charity.Dani decided to support the Arzignano Urology Ward, with a donation of 20,000 € allocated for Christmas gifts, towards the purchase of an innovative ultrasound scanner and an arm of the

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robotic system for laparoscopic procedures. These are tools that are today not very commonly available in Italy, with none at all in Veneto, that make the post-operative phase faster and easier for patients.The company actively promoted this project, raising the awareness of its industrial colleagues in the area; the response of the entrepreneurial (and non-entrepreneurial) community was remarkable: thanks to donations received from 55 companies, the initial donation of 20,000 Euro became a donation of over 90,000 Euro.An important result which demonstrates a strong sensitivity to social issues.



In addition to managing the relations with the local and national communication bodies, Dani also dedicates a section of its own website to communication (by publishing news, press releases and information on up and coming events). In this section, which is constantly updated, it is possible to find the details of all the relevant initiatives specifically regarding Dani.

Documents

SOCI AL SUSTAIN - ABILITY - Gruppo Dani · Examination of returns from the field and operating faults. 64 Communication of performance through “Quality Points”, bulletin boards