Dellas Integrated Annual Report 2017 en (21173)

SOLUZIONE COLORE QUANDO IL LOGO VIVE SU FONDO BIANCO
INTEGRATED ANNUAL REPORT 2017
Financial capital Manufactured capital Social and relationship capital Intellectual capital Human capital Natural capital
HIGHLIGHTS 2017
2018
+ -
1973
€ 16,977,151
45
Years of history
Consolidated
turnover
€ 35,059,155
Total invested
capital
54
Dealers and Agents
€ 4,719,211
Global gross
added value
648 € 434,931
EBITDA
Customers
3,100 € 1,914,618
Operating cash flow
Analyzed stones
353
CO2 Eq. Saving (ton)
BBB+ Rating
2 ǀ Dellas
SUMMARY
INDEX
1 OUR BUSINESS 4
Letter from the CEO 5
Letter of the CFO 7
Business Model and Value Creation 8
2 GOVERNANCE
16
Organizational structure 17
Corporate Governance 19
3 RISKS, STRATEGIES AND MATERIALITY
22
Definition of risks 23
Strategic risk management 23
Analysis of Materiality 25
4 PERFORMANCE AND OUTLOOK 30
Financial capital 31
Manufactured capital 34
Social and relationship capital 35
Intellectual capital 40
Human capital 44
Natural capital 51
Outlook 53
5 METHODOLOGICAL NOTE 54
6 CONSOLIDATED FINANCIAL STATEMENTS 64

Statement of assets and liabilities 65
Profit and loss account 70
Cash flow statement 72
Notes to the accounts 74
Reports 86
7 DELLAS SPA FINANCIAL STATEMENTS 90

Management report 91
Statement of assets and liabilities 100
Profit and loss account 106
Cash flow statement 108
Notes to the accounts 110
Reports 136
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www.dellasdiamondtools.com/news-events/annual-reports/survey Dellas ǀ 3
DANIELE FERRARI ISIDORO FERRARI ELISA FERRARI

President and Honorary President Vice President
Chief Executive Officer (CEO)
4 ǀ Dellas
1 OUR BUSINESS
Dear Shareholders and Stakeholders,
Up until 2017, the main market targeted by the Dellas Group was that of diamond tools for natural stone processing,
which globally generates a turnover of around 700 million euros.
The Dellas
Group is directing its The Confindustria Directory Marmomacchine 2018, which each year produces an overall picture of the sector
strategies towards the worldwide, shows that the use of marble and stone has continued to progress on several national markets, albeit with
diversification of its reduced rates globally. The volume of stone extracted worldwide has reached 145 million tons with a growth of 3%
products to serve other compared with the previous year, while that of international trade amounted to 53.5 million tons, marking an increase
adjoining sectors, from of roughly half a million tons.
artificial stone to
Ceramics The Dellas Group is directing its strategies towards the diversification of its products to serve other adjoining sectors,
from artificial stone to ceramics. As opposed to the sector of natural stone, these sectors show a high rate of growth
and less competition from Asian producers with a consequent lower pressure on sales prices.
The entry of the Dellas Group into these adjoining sectors started in 2017 and will assume more significant proportions
in the course of 2018 and in subsequent years. This evolution has required the Group to make an effort in terms
of research and development, to adapt its technology and production know-how, and also to reorganize its sales
activities, dedicating specific sales force resources to these markets.
This deve-
lopment has required Through its subsidiaries and dealers the Dellas Group has a widespread presence on all the main international markets,
the Group to make making it possible to develop a sales activity for these new products as well.
an effort in terms
of research and We are also able to demonstrate excellent technical results in the field. This has been achieved through the
development, to development of these products, which have arrived at and sometimes exceeded the performance of similar tools
adapt its technology already on the market. More specifically customers are recognizing the uniqueness of a family of “green” products
and production specific to the Dellas Group, as these do not have components that pose difficulties for disposal at the end of the of
know-how, and also the production cycle.
to reorganize its sales
activities, dedicating With regard to the stone sector, the main producing countries continue to be, in order of importance, China, India,
specific sales force Turkey, Brazil, Iran and Italy, which account for more than 70% of world extraction, confirming a historical tendency
resources to these towards progressive concentration of production in these countries.
markets
These markets show a high potential, but at the same time they are in extremely competitive territory: the optimism
about growth of these markets and their ability to offset the downturn in other areas, sometimes has to come to terms
with uncertainty and volatility, which must be adequately assessed.
The exposure to financial risk from customers in some of these areas demands increased prudence, even at the
expense of turnover. There are no hard and fast rules but an apprehensive awareness of the dangers is essential to
overcome fear and continue to expand.
Customers are Throughout 2017, Dellas Spa has continued to nurture the growth of its foreign subsidiaries: while the “core”
recognizing the uni- production remains localized at its Italian headquarters, its foreign companies are dedicated to serving and developing
queness of a family their respective local markets and represent a stable sales and production presence, in addition to the customer
of” green “products service network for the local market in those countries in which they are established.
specific to the Dellas
Group Investment, in Italy and in foreign subsidiaries, in technological innovation and in the improvement of the efficiency of
the organization, is the guarantee of success for Dellas and it is the basis for our cautious optimism as we envision the
development of our company over the next few years.
DANIELE FERRARI
President and Chief Executive Officer (CEO)
Dellas ǀ 5
MARCO PASQUOTTI
Chief Financial Officer (CFO)
6 ǀ Dellas
1 OUR BUSINESS
Dear Shareholders and Stakeholders,
The parent In the financial year 2017, the consolidated revenue of the Dellas Group amounted to € 16,977,151, with an Added Value of
company in the band € 4,719,211 and an EBITDA (Gross Operating Margin) of € 434,931.
Investment Grade
with an average rating The Group’s net result is negative by € 1,580,512. If the net result is recalculated without taking into account extraordinary and
corresponding to non-recurring events, the loss is reduced to 263.377.
“BBB+ “Of Standard
& Poor’s The value of the Consolidated Net Equity, amounting to € 16,648,188, compared to the total Invested Capital of € 35,059,155,
indicates a good level of capitalization and a balanced indebtedness ratio of the Group. The parent company Dellas Spa shows,
a high standing in fact, combined with a moderate debt rate and a good level of liquidity, as shown by the NFP / Net financial
position / Net equity ratio respectively, equal to 0.59 , and the level of Acid Test Ratio (current immediate and deferred liquidity
/ liabilities ), equal to 0.93.
In 2017, these assets and financial characteristics of Dellas Spa allowed for financing of working capital and investments through
Diversification the banking system at reasonable rates: it should be considered that the average cost of minority capital was 1.78%.
of products, by the
Group, This reduced average cost of debt has been made possible by the high credit rating granted by the banking system to Dellas
to serve the sectors Spa. The analysis of the ratings assigned by the top 5 institutions, representing approximately 85% of the granted credit lines,
of artificial stone positions the Parent company in the Investment Grade with an average rating corresponding to “BBB+ “of Standard & Poor’s.
and ceramics has This positioning confirms the company’s ability to adequately meet its financial obligations.
been carried out
with investments The Group’s product differentiation into the sectors of artificial stone and ceramics was achieved through investments in
in Research and research and development for € 954,954. These were made directly by the parent company with a driving effect for the entire
Development Group. These investments were financed entirely with the Group’s Operating Cash Flow, which amounted to € 1,914,618.
for € 954,954, made
directly from the The presentation of the accounts of the Consolidated Financial Statements indicate a cash flow from operations of 1.740.943,
Parent Company, with which helped to partially cover the Flow of Investment Assets of € 2,757,376. The cash flow of financing activities amounted to
a driving effect for the € 1,108,609. The Net Financial Position has gone from € 10,515,675, the value at the beginning of the period, to € 11,532,108,
entire Group the value at the end of the period.
Among the provisions that Dellas has put in place to oversee strategic risks, reference must be made to the monitoring of
non-financial KPIs and Integrated Reporting. The adoption of Integrated Reporting is a big step forward in recognizing that
organizational resources depend not only on financial capital and productive capital but also increasingly on human, intellectual,
social and relational capital. It follows that the impact on environmental and natural resources, such as input and output,
Among the greatly influences business operations and value creation.
actions that Dellas
has put in place to This awareness leads to integrated thinking which redresses the balance between the primacy of financial capital growth with
oversee strategic risks the reporting of non-financial information.
reference should
be made to the With its experience in this field, Dellas can testify to clearly evident results in terms of improving the corporate image, in better
monitoring of positioning at the level of supply chain, in the procurement of better human resources and in developing those already in
non-financial KPIs house, as well as better access to the credit market. In the context of Italy, characterized almost entirely by SMEs, the company
and Integrated is firmly convinced that nonfinancial communication may represent a factor of importance to competitivity.
Reporting
G4-1
MARCO PASQUOTTI
Chief Financial Officer (CFO)
Dellas ǀ 7
Business Model and Value Creation

Sector of industry: Technical Stone and Marble
Sub-Sector of industry: Diamond tools
}

0.47
Net equity on invested capital
Financial capital
A good level of capitalisation
and moderate levels of debt
}
5 Manufacture of
648
Customers
Product Families
diamonded
Manufactured capital
components
Wide range of products, able to meet all needs in
this sector, including those of quarrying, cutting and
polishing. Automated and innovative production
3,100
Analyzed stones
processes that ensure products are of high
quality and highest performance + -
Tool
assembly
€ 16,977,151
}
Consolidated
45 turnover
Years of history
Social and relationship capital
€ 35,059,155
Total invested capital
Considerable and consolidated work
FACTORS
FEATURES
experience ensuring 360° knowledge of Application € 4,719,211
Global gross
sector consulting and added value
}
after-sales service

954 € ,954
Investment 2017 R&D
€ 434,931
EBITDA
Intellectual capital
Strong propensity for research and
development, to find the tool most
suited for the work Research and € 1,914,618
development Operating cash flow
}

30 Assistance Centres }
54 Dealers and Agents }

12
Technical area - human
resources

Human capital
Widespread worldwide presence assured by BBB+ Rating
effective and detailed distribution network.
Highly specialised technical personnel able to promptly
and professionally respond to customer needs
}

3
Energy rationalisation initiatives
Natural capital
Priority for health and safety in the workplace,
energy efficiency, control of emissions
INPUTS BUSINESS ACTIVITES OUTPUTS
8 ǀ Dellas
1 OUR BUSINESS
G4-2 G4-9
STAKEHOLDERS THEMES OF KEY IMPROVEMENT
INVOLVED INVOLVEMENT PERFORMANCE AIMS
INDICATORS
G4-26 G4-27
u Shareholders u Value Added distribution u Consolidated added value u Increase in

u Banks u Turnover of Group Subsidiaries Turnover
u Public Administration u Increase in volume of
turnover in the sectors of
artificial stone and ceramics
Financial (page 31)

capital
u Shareholders u Value of fixed u New investments in u Increase in production
u Banks assets tangible and intangible assets and financial holdings
assets
Manufactured
capital
(page 34)
u Customers u Service, after-sales at the u Customer satisfaction level u Improved average delivery
u Suppliers customer’s premises and u Average delivery times times
u Collectivity level of service in terms of u Average credit rating u Consolidation of relations
Social and the reliability of deliveries u Lead production Time for MTO with the “historical” suppliers
relationship u Reliability and regularity u Top 30 suppliers in seniority and partial sharing of
of payment u DPO (mean supplier innovation and development
capital u Economic and social payment time) objectives
(page 35) development in the u N° and value of charity
VALUE community donations
CREATION u Customers u Product quality u Costs allocated to R&D u Two projects aimed at
excellence projects achieving technological
u Hours allocated to R&D improvements to the
Intellectual projects products, as well as to
capital expand and renew what is
offered to customers
(page 40)
u Human Resources u Improvements to u Staff turnover u Managerial

competencies, abilities and u Benefits developmental
Human skills u N° of Accidents training
u Increase in level of safety u Notification of partners of
capital at the workplace company approach to
sustainability with the
establishment of the Ethical
(pag. 44) Code
Natural
u Environment u Improvement in the u Consumption u Growing responsibility
capital energy efficiency of in CO2 equivalent of the company in the
production plant u Saved CO2 equivalent carrying out of product
u Energy saved (Kw) process realisation and in
the products themselves,
with regard to the consumption
(page 51) of energy resources and the
disposal of waste, with the aim
of minimising the impacton
the environment
u Electricity purchased at
100% from renewable sources
OUTCOMES
► TABLE 1 - Business Model and Value Creation
Dellas ǀ 9
Value creation
In this context, Integrated Reporting shows how the Dellas Group manages and utilises the various capital categories for the
creation of value in the short, medium and long term.
Capital can be financial, manufactured, intellectual, human, social and relational and natural. Some capitals are material, others
intangible.
Financial capital: total funds that the organisation can use to produce goods or to provide services, also
obtained by various loans.
Manufactured capital: manufactured physical objects ( e.g. buildings, machinery, facilities, equipment)
that an organization can use to produce goods or provide services.
Social and relational capital: set of relations with Stakeholder groups and other networks, and ability to
share information in order to increase individual and collective well-being.
Intellectual capital: intangible assets corresponding to the organizational capital and the value of
knowledge (e.g. patents, procedures and protocols, organizational know-how).
Human capital: competences, skills and experience of persons and their motivation to innovate.
Natural capital: environmental processes and resources, both renewable and non-renewable and
resources that provide goods or services for the past, present and future success of an organization.
In each organization, for each of the capitals above, there is a stock of initial value that is increased, reduced or transformed
through company activities. TABLE 1 illustrates this process of value creation.
The fulcrum of the organization is its own “BUSINESS MODEL”, which leverages the various “INPUTS”, classified by “CAPITAL”
converting them to “OUTPUTS” through “BUSINESS ACTIVITY”. The activities and outputs of the organization produce
“OUTCOMES” on the various capitals and contribute to the achievement of the strategic objectives and therefore to “VALUE
CREATION” in the short, medium and long term.
Inputs
Amongst the inputs are highlighted the distinctive factors from which the organization depends, limited to those that materially
affect the ability to create value.
Business activities
The core of the business model is business activities, which are the way the organization is understood on the market.
Outputs
The immediate result of the business activities are the outputs in terms of products and services that immediately translate into
economic-financial measurements.
Outcomes
The functioning of the company activities, the resources used and the outputs produced generate impacts on the various
capitals. These impacts may refer to internal or external stakeholders. In the case of positive impacts, a net increase in capital
is achieved, creating value.
Each category of “CAPITAL” impacts on different “INTERESTED STAKEHOLDERS”, through specifics “THEMES OF INVOLVEMENT”.
Impacts are measured using “KEY PERFORMANCE INDICATORS” of a financial or non-financial nature, but nevertheless
numerical. Against the values expressed in the year in question, “IMPROVEMENT OBJECTIVES” were put in place to be
achieved in following years.
10 ǀ Dellas
1 OUR BUSINESS
Mission
We work in close contact with our customers that work marble, granites and stone as we design, build and offer them
the best high quality solutions to their needs.
We guarantee:
• tooling customisation;
• speed;
• after sales service;
• constant quality standards;
• an ubiquitous presence.
We strive to get the utmost commitment and involvement of all those who work for us.
We operate with the greatest respect for individuals and the law, ensuring safety for and loyalty towards employees,
customers, suppliers and all of our stakeholders.
Company values
G4-56
Respect
Simplicity of ideas, a commitment to hunting down the best solutions and enthusiasm for turning them into reality
all stem from an environment in which individuals are held in the highest esteem, where people are able to express
themselves in terms of their professionalism and what they believe in. We are convinced that the prosperity of a
company springs from the human and professional growth of its employees and its customers.
Responsibility
The commitment, professionalism and loyalty with which our company is steeped provide the basis for the establishing
of relationships founded on trust and the sense of responsibility, with benefits for all persons involved and the
community in which we operate.
Honesty
We counsel and warrant the quality and reliability of our products and services. The experience we have gained
over forty years of working in this sector of industry means we are able to guide the customer towards transparent
purchases characterised by carefully weighed choices designed to satisfy particular needs and requirements.
Willingness to help
We aim to provide an all round service with responses and products that will help our customers satisfy their needs
for safety, speed and technological innovation. We listen, we appraise and we decide together with our customers on
what is most appropriate to them for achieving the best possible performance.
A Code of Ethics
Dellas is committed to communicating the principles of the Charter of Values and Behaviours approved by the Board of
The Charter
Directors to its employees and sales staff who in their different ways benefit the company through their professionalism.
of Values and The company has thought it important to publish the Charter of Values and Behaviours aimed at all the sales personnel
Behaviours aimed of the group and to those who in their various ways have relations with the company’s clients or potential clients.
at all the group’s These members of staff are called upon to have more frequent contact with Stakeholders outside the company so it is
sales staff is the basis important that they carry out their business with respect for a system of values and behaviours which is coherent with
for extending the the philosophy and the value system implied by the daily activities of the company.
company’s values This document is also the basis for going on to extend the company’s values and definitions of desirable behaviour to
to all its employees its employees and those who work for and in the name of Dellas.
and collaborators
The current Charter is divided into three sections:
• The reference values that guide Dallas’s actions and represent the basic principles inspiring the conduct of the
members that operate in the name and on behalf of the company, especially the Group’s sales personnel and those
who for various reasons have relations with the company’s clients or potential clients (from herein “sales staff”);
• The criteria for behaviour, which go to identify and define in a clear and precise way the modus operandi of Dallas
in relation to its sales staff and its own clients in its business activities, the professionalism and dedication of its
personnel to the company’s sales;
• The method of dissemination and revision of the Charter of Values and Behaviours.
Dellas ǀ 11
1973 The year “Deltas di Sinigaglia&Viazzo

Snc” was established and started
manufacturing and selling its diamond
1975 The first contacts with Iran start,
a market that will prove always to
be essential for the growth of the
disks and blades in Italy Company.
Dellas embarks on the countries of the

1980 North Africa and the Near East: Egypt,
Palestine and the Lebanon.
1985 Dellas starts in South America: Brazil.
1990
Dellas continues with its conquest of
the North African markets: Algeria,
Morocco, Tunisia.
The company changed its legal
1979 personality from “Deltas di

Sinigaglia&Viazzo Snc” to “Dellas
SpA”
1996 Dellas sets foot in Saudi Arabia

and Turkey.
1997 Dellas enters Portugal.
2001 Dellas opens up in Rumania and from

here moves into Russia.
Establishment of the Spanish branch
1984
Isidoro Ferrari appointed
President, a role he would
continue to hold until 2012
2004 “DELLAS SPAGNA SI” to serve the
Spanish market in strong growth.
Establishment of the Ethiopian branch

2011 “DELLAS SPA ETHIOPIAN BRANCH”, to
serve all the sub-Saharan Africa market.
- Establishment of the Turkey branch

“DELLAS ISTANBUL MAKINA SANAYI
2012 VE TICARET AS”.
- Establishment of the Chinese
branch “DELLAS DIAMOND TOOLS
SUZHOU CO. LTD”
2014
Acquisition of shareholding through
“Cordusio Società Fiduciaria Per
Azioni”
2012 Daniele Ferrari, son of Isidoro,

appointed CEO.
2016 Establishment of “DELLAS do BRAZIL

Ferramentas Diamantadas LTDA”.
12 ǀ Dellas ► TABLE 2 - Main Company Milestones ► TABLE 3 - The main international markets
1 OUR BUSINESS
45 years of History
In 2013 Dellas S.p.A. celebrated its first 40 years which have seen it rise to its current position as an international
market leader in the manufacturer and sales of diamond tools for marble, granite and agglomerate.
The enterprise started life in Desenzano del Garda in 1973 and moved to its current home in Lugo di Valpantena in
G4-3 G4-7
1982. The valley of Valpantena, like that of the nearby Valpolicella, has always been known for the local skills in the
cutting of marbles and granites from this area, from Italy as a whole and from all parts internationally. The move
therefore enabled Dellas to get closer to the beating heart of the stone working industry and to be able to constantly
test products and obtain immediate feedback on their performance.
Since its very beginnings Dellas has been strongly inclined towards research and development, with the companies
surrounding its business having, over the years, acted as an “extended testing laboratory” for its tools.
The experience gained in this community, together with the work of an organization that has grown in size but
remained lean and dynamic with highly specialized technical staff, has provided the platform for the company to make
its name in new markets and ensure its brand is internationally recognized.
Dellas is now led by its second generation, the children of its founder Isidoro Ferrari. These are Daniele Ferrari, President and
Dellas is now Chief Executive Officer, and Elisa Ferrari Vice President, backed by a Board of Directors made up of individuals who are all
led by its second experienced in their areas of company business and all ready, able and willing to provide strong leadership for a company
generation backed which is no longer a family business but a world force. The successes achieved year after year have been to a great extent
by a Board of associated with the company’s deeply rooted values that put customer assistance first, with a heavy emphasis also on research
Directors with broad and development for the solving of challenges as they arise in the field.
experience
The Products and Markets served

The range of products cover all stone working processes from quarrying through to final polishing and finishing. Dallas
came into being as a manufacturer of diamond discs and blades, which are now known and highly regarded all over
the world. The diamond blade is Dellas’ product par excellence. Depending on the type of material to be cut, Dallas
makes diamond blades of various sizes that are able to assure the perfect cutting of marble at relatively low costs. In
particular the discs provided by the company have diameters ranging from 200 to 3,000 mm in diameter and their
quality gives them high production speeds per hour and excellent finishing quality. Dellas furnishes diamond disks to
cut marble, stone, granite, asphalt, ceramics and cement, as well as discs for heading machines, for horizontal cutting,
disks for milling cutters, for splitters and for block cutters. Each type may have a standard or silent core which, in the
latter case, significantly reduces the noise produced.
For a number of years now the new frontier embarked upon by Dellas, and one which is forging ahead internationally,
is that of diamond wire: these are sintered or electrodeposited beads fixed to a steel carrier cable. The diamond wire
is truly the ”marbleman’s jewel”, increasingly used for the quarrying and quarrying of blocks of stone and the cutting
of slabs. The technology can be applied in the quarry, on stationary machines, on profiling or multi-wire machines. In
all of its applications, diamond wire offers considerable advantages in terms of the precision and the height of the cut,
Dellas gives
in keeping noise levels down, for high productivity, reductions in costs of labour and of water and energy and also with
advice on the specific
the absence of dust and vibration and smaller installation footprints for the machinery.
tool to use for every
type of machine,
Lastly, the range has been extended to include two new product families: the special uses tools and numerical control
material and
machine tools. The first family includes the plane and shaped (both concave and convex) mills, the calibration plates
finishing. Dellas is
for marble and granite, the fickerts and the frankfurts for marble and granite calibration and the calibrating rollers. The
present with its
second family, for its part, consists of milling cutters, the splitting mills and the profiling milling sets.
products in all
the main stone
Thanks to the experience that has accrued to Dellas over all of these years the company is in a good position to
extraction markets
give advice on the specific tool to use for every type of machine, material and finishing. Its thorough knowledge of
with its own
materials and technology enable it to make tailor made tools for any requirement, to help customers find the best
products
approach to their particular problems and provide specific working parameters according to the material and the
machine being used.
Dellas is present with its products in all the main stone extraction markets with its own products.
China, India, Turkey, Brazil, Iran and Italy account for 70% of total extraction. In all these markets Dellas has either its
own branch or its own dealers ensuring immediate and rapid service.
G4-8 G4-9
LOOK AT THE PROFILE WEB PAGE

www.dellasdiamondtools.com/company/company-profile Dellas ǀ 13
Dellas
Diamond
Blades
Dellas
Diamond
Discs
Dellas
Diamond
Wire
Dellas
Polishing and
calibrating tools
Dellas
Numerical control
machine tools
14 ǀ Dellas
1 OUR BUSINESS

Diamond blades
Diamond blades are used for natural stones and composite materials, granite excluded. These diamond blades are in
G4-4
particular employed on frames for cutting slabs from the block; the single blade is, on the other hand, principally used
for block squaring and the cutting of thicknesses.
A historically very important product the diamond blade is the tool that Dellas has become best known for and which
has been most appreciated over the years by its clientele. The high precision and quality of the cut have seen Dellas
blades’ problem-free use on all marble diamond mounts. Their being correctly mounted on the frame is essential for
good performance and long life. To this end Dellas’ specialised technical personnel have assisted customers with the
start-up process, as well as during actual working, to ensure the tools are used to maximum efficiency.
The long experience Dellas has had worldwide means it has acquired the knowledge necessary to make a very wide
range of diamond tools able to meet many different requirements as regards quality, duration and cutting. In addition
to this variety in the sectors themselves, the product is itself available in various gauges and sizes of steel with diverse
technical specifications suited to the various types of frame and type of materials to cut.
Diamond discs
Diamond discs are used for cutting and working on any kind of stone, whether marble, granite or agglomerates. Discs
diameters vary from 200 through to 3,000 mm, with standard of silenced cores, with Dallas disks all offering quality
and finishing perfection.
Every material requires a specific sector of product, thanks to sophisticated research laboratory work Dallas succeeds
in correctly identifying the stone to cut and selects the most suitable mixture for the customer’s specific needs.
Diamond wire
Diamond wire is the more recent and most interesting ‘cutting edge’ innovation in the field of cutting tools. Constantly
growing in importance the wire is used in the extraction process in the quarries, in cutting with mono or multi-wire
machines and in the squaring and profiling of natural stones like marble and granite.
The commitment and the research efforts of Dellas have all been directed towards producing a tool that will give an
improved surface finish, be vibration free, produce less noise and achieve a high level of precision on fast cutting, all
of which translate into a general reduction in costs, in terms of energy, water and labour.
The company can on request offer consultation and also produce, on the basis of customer requirements, rubberised,
plasticised or sprung diamond wire, that may also be open or closed through the use of splicing or with copper or
steel junction joints.

Polishing and calibrating tools
Polishing and calibrating tools are for the working and finishing of the surfaces of natural stones and agglomerates. The finishing
process can be broken down into four stages that take place in the following order:
• Roughing: which removes surface imperfections resulting from the cutting of the material.
Tools used: roughing rollers, roughing plates and fickerts.
• Calibrating: preparing the material both superficially and also geometrically while complying the tolerances
required by the market. Tools used: rollers, plates and stallite grinders.
• Smoothing: removes the roughing and calibrating marks to prepare the material for the upcoming processes
of polishing, brushing and satin finishing etc. Tools used: diamond fickerts, resin fickerts, diamond frankfurts,
synthetic frankfurts, resign frankfurts, diamond brushes, steel brushes and silicon carbonide brushes.
• Polishing: gives the material its colour and shine. Tools used: resin fickerts, synthetic frankfurts, resin frankfurts
and polishing materials.

Numerical control machine tools
Tools for work stations and numerical control millers permit very detailed stone working such as the creation of curves,
bore holes and specific and special shapes. Dellas offers a complete range of tools:
• electrolytic tools for working on marble and stone;
• sintered tools for granite, abrasive materials or coloured marbles;
• core drills, drilling bits, cutting millers, boring grinders, routers and profiling wheel sets.
Lugo di Grezzana (VR), 09/04/2018 DANIELE FERRARI

Dellas ǀ 15
2
GOVERNANCE
16 ǀ Dellas
2 GOVERNANCE
Organisational Structure
Company Organisation Chart
BOARD OF
DIRECTORS
CHIEF EXECUTIVE
OFFICER
CHIEF FINANCIAL
OFFICER
QUALITY SYSTEM
MANAGER
HUMAN RESOURCES
AND COMMUNICATION
IT SYSTEMS
MANAGER
OPERATIONS TECHNICAL AREA SALES

MANAGER AND R&D DIRECTOR
PLANNER
LABORATORY
MANAGER MARKETING
PURCHASING MANAGER
MANAGER
CUSTOMER CARE
MANAGER
MAINTAINACE TECHNICAL OFFICE AND
MANAGER PROJECT MANAGER
PRODUCTION
MANAGER
► TABLE 1 - Company Organisation Chart Dellas ǀ 17

Ownership
Dellas is owned by the Ferrari family (► TABLE 2): Isidoro Ferrari, the founder and Honorary President holds 19% of
G4-7 G4-13 the shares, 17% are held by his wife and the children Daniele and Elisa Ferrari are respectively the current CEO and
Vice-President and Marketing, Communications and HR Manager of the company each owning 18.5% of the shares.
The remaining (27%) are held by three other individual members. There have not been any significant changes in the
ownership structure during the reporting period.
Isidoro Ferrari 19 %
Daniele Ferrari 18.5 %
Elisa Ferrari 18.5 %
Gianfranco Ghilardi 17 %
Annamaria Scala 17 %
Maria Teresa Dui 5%
Maria Silvia Ferrari 5%
► TABLE 2 - The team ownership on 31/12/2017
Group Structure
The structure of the Dellas Group on 31st December 2017, is shown in the following chart.
76.20% 100%
Dellas Istanbul Makina Dellas Spa
Sanayive Ticaret AS Ethiopian Branch
77.52%
Dellas Diamond Tools
Suzhou Co. Ltd.
99.99%
DELLAS S.p.A
Dellas do Brasil ferramentas
diamantadas ltda
60%
Partecipazione tramite
Cordusio Società Fiduciaria
100% 100%
Dellas Spagna Dellas Stone Tools
SL India Private Limited
18 ǀ Dellas ► TABLE 3 - The structure of the Dellas Group as of 31/12/2016

2 GOVERNANCE
Corporate Governance
Dellas exercises its governance through four main bodies:
1. General Meeting of Shareholders;
2. Board of Directors;
3. Statutory Board of Auditors;
4. Auditor;
General Meeting of Shareholders

In accordance with the provisions in law and the articles of association of the company, the following matters are reserved to
the competence of the Ordinary General Meeting of Shareholders:
• the approval of the annual financial statements;
• the appointment and the revocation from office of directors, the appointment of the statutory auditors and the chairman
of the board of statutory auditors and the person put in charge of the accounting audits;
• the determination of the reward due to the statutory auditors;
• the liability of directors and of statutory auditors.
The Extraordinary General Meeting of Shareholders is however responsible for the following:
• amendments to the articles of association;
• the appointment, the substitution and the determination of the powers of the liquidators or official receivers;
• bond issues;
• other matters reserved to such meeting by the law.
Board of Directors
The Board of Directors is the body that actually does the work of managing Dellas. It represents the General Meeting
G4-34 G4-38 of Shareholders by which it is elected every three years and which decides its rewards and responsibilities. The board
is made up of 7 members when it is set up and it itself appoints from its number the Chairman and the Managing
Director.
G4-40 The role of the Board of Directors is to take all necessary actions in pursuance of the company’s aims, which in particular
includes the execution of the resolutions of the General Meeting of Shareholders, the drawing up of the budget and
the final balances and the drawing up of annual and multi-annual plans and programmes.
The Board of Directors is not only composed of shareholders but also of the most important managerial figures who
have been chosen on the basis of competence and experience so as to guarantee the immediate and direct application
G4-42 G4-45 of all the plans and strategies decided upon. All the members have an active role in the company at strategic levels of
the company’s organisation chart.
It falls to the Board of Directors to individuate the impact, risks and economic social and environmental opportunities
implementing them through their management. Apart from this, the Board approves the statement of the company’s
values, its mission, strategies, policies and objectives in relation to their economic social and environmental impact.
The board of directors has configured a dashboard of Key Performance Indicators to periodically monitor performance
relative to economic, social and environmental objectives. Further to this, some members of the Board were chosen
to participate in a training program on the international GRI standards version 4.0 (2013). This has strengthened the
Board’s collective understanding of these economic, social and environmental themes.
Board of Directors
G4-43
Name and Surname Position Role in the organsation chart
FERRARI DANIELE President and Managing Director Managing Director (CEO), Chief Sales Officer (CSO)
PASQUOTTI MARCO Board Member Chief Financial Officer (CFO)
FERRARI ELISA Board Member Chief Human Resources Officer (CHRO)
G4-39 RIVA GIOACHINO Board Member Area Manager
FERRARI ATTILIO Board Member Area Manager
FERRARI MARIASILVIA Board Member
GHILARDI GIOVANNA Board Member
Term of office: financial years 2015-2017 as decided by the General meeting of shareholders on 6 July 2015.
► TABLE 4 - The Board of Directors as of 31/12/2017
Dellas ǀ 19
30-40 years
43 %
Men
57 %
41-45 years
14 %
Women
43 %
Over 50 years
43 %
► TABLE 5 - Composition by gender and age of the Board of Directors
2017 2016 2015

Board members 7 7 7
% Women 42.8 % 42.8 % 42.8 %
Age of members
G4-LA12
Under 30
Between 30 and 40 3 3 3
Between 41 and 50 1 1 1
Over 50 3 3 3
Percentage belonging to protected categories
Number of meetings held 6 7 7
Attendance by Board members 83% 99% 99%
► TABLE 6 - Breakdown of composition and meetings of the Board of Directors
Statutory Board of Auditors

The Statutory Board of Auditors is made up of three executive members and two alternate members appointed by the General
Meeting of Shareholders which also appoints its Chairman. In accordance with the provisions of the Italian Civil Code, the
Statutory Board of Auditors supervises compliance with the law and with the articles of association, with the principles of
administrative propriety and in particular the adequacy of the organizational, administrative and accounting set-up of the
company and its proper actual running. It also reports to the General Meeting of the shareholders that is called to approve the
financial statements at the end of the company’s financial year and on the activity carried during in performance of its duties.
The make-up of the Statutory Board of Auditors
Name and Surname Role and Tasks
BELLORIO CLAUDIO Chairman
CAPRARA ARNALDO Executive auditor
EDERLE VALENTINO Executive auditor
FARLEGNI FRANCESCO Alternate auditor
VERGA DAVIDE Alternate auditor
Term of office: financial years 2016-2018, as decided by the General meeting of shareholders of 27 May 2016.
► TABLE 7 - The Auditor as of 31/12/2017
20 ǀ Dellas
2 GOVERNANCE
Auditor
The company’s accounts are audited by the Auditor, who carries out in particular the following tasks:
• periodical checks on the proper keeping of the company books and correct entering into the journals the events in the
management of the company;
• checking that the operational balance corresponds to the accounting record and that the civil law accounting regulations
have been complied with as well as correct accounting principles as drawn up by the Italian Accounting Organisation have
been duly and continuously applied;
• gives his written judgment on the operating balance.
The Auditor
Name and Surname Role and Tasks
ZANINI TOMMASO Auditor
Term of office: financial years 2016-2018, as decided by the General meeting of shareholders of 27 May 2016.
► TABLE 7 - The Auditor as of 31/12/2017
The Italian Legality Rating

Authority
on Fair Competition
The Competition and Market Authority, following the application for renewal of 09/02/2017, has decided to renew for
gave DELLAS Spa
the Company DELLAS SPA the Legality Rating previously attributed to it on 10/03/2015, upgrading its score from “êê+ ”
a legality rating
to “êê++”, entering it at that rating in the companies’ Legality Rating list pursuant to article 8 of the Regulation.
of êê++
The Legality Rating is the score given by the GCM which attributes one to three “stars” for good practice at companies
whose turnover exceeds two million Euros per year and which comply with a series of legal and quality requisites.
To obtain a “star”, the owner of the company and the senior managers must not have any history of crimes committed of
those listed in legislative decree number 231 of 2001 or for the main crimes against the public administration authorities
or for tax crimes. A further requisite is that there must not have been initiated against such persons any legal actions in
the area of criminal law relating to matters of mafia.
As regards the company, no administrative offences may have been committed by employees regarding offences
coming within the scope of legislative decree 231 and they must not have been guilty in the previous two-year period
for any unlawful anti-trust conduct or any offences in the consumer protection area. The company must also carry out
all payments and financial transactions over a thousand Euros only by traceable means. To obtain a higher score, the
Regulation indicates six other requirements: two “stars” if half the requisites are complied with and three “stars” if all are
complied with.
Authorised European Economic Operator Status (AEO)

In April 2017 Dellas SpA obtained Authorised European Economic Operator Status: Authorisation n. IT AEOF 17 1280.
The Customs and Monopolies Agency, in accordance with the inspection carried out by the Verona Customs Office, confirmed
that Dellas meets the criteria required for this Authorisation, according to the customs union provisions.

The new European Union Customs Code has made substantial changes to customs law and procedures, as well as to the
dealings between trade operators and the Customs authorities. The result is they will be more and more oriented towards
greater speed and collaboration, by virtue of this customs status of “Authorised European Union Status (AEO)”.
The acquisition of AEO certification purchase permits Dellas SpA to obtain a series of benefits in terms of the simplification of
customs and/or security matters.
G4-16 Membership of National associations

Dellas is a member of Confindustria, the main organisation representing manufacturing enterprises and services in
Italy, sharing its principles and the norms foreseen by its statute.

Dellas ǀ 21
3
RISKS,
STRATEGIES
AND
MATERIALITY
22 ǀ Dellas
Risk Management
STRATEGIC RISKS FINANCIAL RISKS
G4-45 (Competition, Social trend, Capital availability) (Pricing risk, Asset risk, Currency risk, Liquidity risk)
• Integrated Reporting • Single model of organization in finance area

• Non Financial KPIs • International Enterprise Resource Planning
• Business Plan and Budgeting • Exchange risk cover (Usd, Try, Cny)
• Masterfile and national documentation on
Transfer Pricing
OPERATIONAL RISKS HAZARD RISKS

(Customer satisfaction, Product failure, (Third Party Liability, Property damage, Natural
Integrity, Reputational risk) catastrophe)
• Tailor made products • International Liability Program

• Customer support services on site
• Testing centre available to clients
• Non Financial KPIs
► TABLE 1 - Definition of risks and safeguard actions
Following the directives of its Board of Directors, Dellas has carried out a specific Risk Assessment process aimed at
identifying, analysing and managing not only entrepreneurial and debt risks but also all the IT, social, natural disaster,
image and country risks to which the company may potentially be subject.
Four macro areas of risk have been identified:

• STRATEGIC RISKS
• FINANCIAL RISKS
• OPERATIONAL RISKS
• HAZARD RISKS
Such risks naturally need to be guarded against, not only by insurance, as specific protective strategies also need to
be implemented.
Strategic risk management

The international social and economic backdrop to the company’s activities means keeping a range of factors in check,
those associated not only with mistakes and accidents that are internal to the business organization but also with
macroeconomic events that are beyond the control of individual companies. In the face of such possible events it
is essential to establish operational continuity strategies to mitigate any negative impact of events and to preserve
competitive advantages. To this end the company has planned and implemented the following actions in the financial
year.
STRATEGIC RISKS
The risks of competition, social trend and capital availability are included in this class. The main actions have been on
the one hand to set up a short and medium term planning strategy and on the other a process of investor relations
as an overall description of the company. This action goes beyond the numbers of the statutory accounts and gives a
clear picture of the company’s future capacity to create sustainable and lasting value with the result of producing key
performance indicators that allow the evolution of the business to be measured in terms of its relationship towards
clients, suppliers, employees and the community at large.
Dellas ǀ 23
FINANCIAL RISKS
Within this category are included pricing risk, asset risk, currency risk and liquidity risk. A key facilitator in this context
These risks are was the implementation of a single organizational model of the Finance area, to be applied to the parent company
covered not only with and subsidiaries, favoured by the adoption in the Group of a single international Enterprise Resource Planning, which
simple insurance allows the measurement and monitoring of the performance of Group companies on a monthly basis
instruments but
also managed with OPERATIONAL RISKS
specific safeguard By this is intended customer satisfaction, product failure, integrity and risk to reputation. The risks associated with
strategies. “The client satisfaction and to the factor of reputation are managed by exploiting investments in R&D to produce products
international socio- with an increasingly higher performance but also to put the Laboratory of the Centre for testing and Analysis at the
economic context disposition of the client.
demands that several
factors be kept under HAZARD RISKS
control , linked not Here we are dealing essentially with insurance risks: third party liability, property damage and natural catastrophe.
only to mistakes or In this instance an International Liability Program has been implemented. This program has the aim of standardizing
accidents within the insurance coverage and to centralize the monitoring of the insurance situation. This is a response to the need to
organization but also ensure the compliance of insurance policies, safe in the knowledge that they are adapted to the laws of the different
to macroeconomic countries, but maintaining control of risks and the same level of insurance guarantees through the parent company.
events Moreover, the aim is to rationalize the cover, avoiding risks being covered twice or, worse, not having them covered
at all, as well as being able to keep claims under control. Specifically, in addition to stipulating a Directors & Officers
Liability insurance, which is a policy of civil liability of directors, statutory auditors and general managers, a Controlled
Master Program with the so-called con Dic/Dil/Drop Down clause has been put in place on the main overseas policies,
ensuring standardisation of local policies with the Italian master policy, which intervenes in the event of differences in
compensation limits and conditions in law, as well as in the event of exceeding maximum coverage.
As shown in TABLE 2, every aspect of risk has been weighed with the logic R = PXG, i.e. as a product of probability and
severity. Each risk has a correspondingly different type of treatment for which actions of safeguard have been defined.
RISK ASSESSMENT
IDENTIFICATION TREATMENT
Probability Severity Risk
Financial - Liquidity Probability
Financial - Property Probability
Financial - Price Severity
Financial - Currency Probability
Hazard - Natural disaster Severity
Hazard - Property damage Severity
Hazard - Civil Liability Severity
Hazard - Inter-company prices Severity
Operational - Product Failure Probability
Operational - Reputation Probability
Operational - Customer Satisfaction Probability
Strategic - Competition Severity
Strategic - Availability of Capital Probability
Strategic - Social Impact Severity
► TABLE 2 - Risk management High Medium Low Negligible
24 ǀ Dellas
Analysis of Materiality
Stakeholder Map
G4-24 G4-25
The primary responsibility of every company is to make a profit. If company is in good health, and voluntarily adopts
company strategies for sustainable development, the whole surrounding social and economic fabric benefits as a result.
All the stakeholders are involved in a dialogue with the companies of the Dellas Group and reciprocally interact with each
other. On the one hand they influence the business activities in different ways and to different degrees and on the other,
they are themselves influenced by these.
TABLE 3 illustrates the main categories of stakeholders with whom Dellas has to deal, in correlation with the categories of
capital that determine the creation of company value.
When the
company is in good The Stakeholders of the Dellas Group have been identified through internal meetings, involving those figures in the
health and adopts company who usually maintain relationships with stakeholders.
company strategies
aimed sustainable The elements that make up the responsible business processes are supported by three main pillars (economic, social and
development, the environmental), and it is upon these that the idea of sustainable development rests.
whole surrounding The economic pillar includes first and foremost Dellas customers and suppliers, as well as shareholders, financiers and
social and public administration.
economic fabric The social pillar has an internal dimension, that of the work place, which is represented by Human Resources, and an
benefits external dimension, i.e. the community.
Materiality matrix
The objective of the materiality matrix is to define which issues have an impact on the economic, social and environmental
G4-18 G4-19 performance of the Group and which issues can influence the decisions of the Stakeholders or their opinion on the
Group’s activities.
These so-called Relevant Issues are aspects that significantly affect the organization’s ability to create value in the short,
medium and long term.
The analysis of materiality was characterized by two main operational steps :

The materiality
• Investigation into relevance: to define the important issues for Dellas’ business
matrix indicates
• assignment of priority (low, medium, high) of the relevant themes according to:
which issues
- the impact on the economic social and environmental performance of Dellas;
have an impact
- the influence of the Stakeholders’ decisions and their opinions about the activities of the Group
on performance
and can influence The analysis of relevancy was conducted in relation to a predominantly internal context, by way of:
the decisions of • the examination of the company’s Annual Reports from previous years;
Stakeholders • the existence of internal policies regarding economic, social and environmental aspects;
• the presence of company functions overseeing the themes;
• the involvement of a number of figures at the top of the company, involved in the process of compiling the Dellas
Annual Report
The analysis and assignment of priority to the relevant themes was instead achieved by involving some of the key figures
within the company, by way of completing a questionnaire:
• Chief Executive Officer (CEO) and Chief Sales Official (CSO)
• Chief Financial Officer (CFO)
• Chief Human Resources Officer (CHRO)
• Chief Operations Officer (COO)
• Research and development manager
The themes brought out were:
• • elaborated and subdivided with reference to the groups of Stakeholders on the basis of which Dellas reports its
performance: human resources, clients, suppliers the community at large and the environment;
• • prioritised (high, medium, low priority) on the basis of their impact on the overall performance of the company
and on the influence of the themes on the expectations of the Shareholders
The position of the themes identified represents the order of priority given to them from the perspective of management
and of Stakeholder.
The analysis of materiality is annually updated using the process described above.
Dellas ǀ 25
The following matrix summarizes the result of the materiality analysis performed.
Each dot on the following matrix represents a relevant issue that has been identified.
The relevant issues that have had a medium to high prioritization both for the company and for the Stakeholders are the
material themes highlighted in the blue square.
26 ǀ Dellas
► TABLE 3 - Matrix of issues relevant to Stakeholders and overall
Dellas ǀ 27
The table that shows a list of the material and thematic strategies for Dellas, correlated, where possible with aspects of
GRI-G4 and relative indicators.
G4-20 G4-21
Relevant theme Aspect of GRI-G4 Indicator Impact within Impact outside the
the company company
Price and quality of - - Dellas Group Clients

products
Fair dealing General standard Ethics and integrity - Clients
disclosure
Fair negotiating General standard Ethics and integrity - Suppliers
disclosure
Reputation and Labelling of PR5 Dellas Group -
client satisfaction products and
services
Suppliers’ reputation - - Dellas Group -
Energy Energy Water EN3, EN6, EN8, Dellas Group Community,
Efficiency Emissions EN15, EN19, EN23 Area
Creation of value in Indirect economic EC7, EC8 - Community,
the area impact Area
Professional growth Training of human LA9, LA10, LA11 Dellas Employees -
and ongoing training resources
Support for local Indirect economic EC7 - Community,
initiatives impact Area
Innovation - - Dellas Group Clients
Adoption of Energy EN6, EN23 Dellas Group Community,
responsible Emissions Area
behaviour (eg. Refuse
Reduction of
consumption, Waste
sorting, etc.)
Employment stability Profile of the G4-10 Dellas employees Community
organization
Health and safety in Health and safety in LA5,LA6, LA7, LA8 Dellas employees -
the workplace workplaces
Collaboration in R&D - - Dellas Group Clients
Student Local Community SO1 Dellas Group Community
Opportunities
Compliance of Communication PR6, PR7 Dellas Group Clients
communications marketing
and responsible
promotion activities
Environmental Environment Disclosure on Dellas Group Community,
Governance management Area
approach
Transparent General standard Profile of Report Dellas Group All the Stakeholders
communication disclosure
of environmental
impact
Evaluation of the Purchasing policy Disclosure on - Suppliers
ethical-social and Evaluation of the management
environmental risks suppliers based approach, LA15,
of the suppliers on their social and HR11, SO10, EN33
environmental
impact
Timing and regularity - - - Suppliers
of payments to
suppliers
28 ǀ Dellas ► TABLE 4 - Material aspects GRI - G4 with relative indicators


Dellas ǀ 29
4
PERFORMANCE
AND OUTLOOK
30 ǀ Dellas
4 PERFORMANCE AND OUTLOOK
Financial
capital Financial capital
Manufactured Economic Performance
capital
The economic performance presented here represents a point of contact between the economic and social management
Social and profiles and allows an analysis of the prosperity created and distributed by the Dellas Group to the advantage of the
relationship capital
whole system with which it interacts.
Intellectual
capital Creating value means satisfying all the expectations of the social partners, mainly the shareholders who compared to
the other institutional investors are more exposed to risk and to the results of the company’s production activities.
Human Companies which do not put enough emphasis on a performance based on value and therefore on the remuneration
capital of its investors will not keep up with competition and consequently are destined to be abandoned by them in favour of
other more remunerative initiatives. However, shrewd businesses feel it necessary to satisfy the expectations of other
Natural
social groups, not only responding generically to the need for ethical behaviour but to precise criteria for survival and
capital
development: the capacity of the business to operate and survive over time is connected to the prospect of adequate
compensation for all the stakeholders.
DMA Management strategy

Conscious that the remuneration of the production factors and the return on investments is an essential condition for the
generation of economic and social value, Dallas has developed a financial management based on:
Dellas creates - the generation of a fair return on invested capital
value in the - long term financial stability of the company;
measure to which - the maintenance of good viability index levels
the return on
invested capital
Dellas creates value in the measure to which the return on invested capital grows for the shareholder, the professional
grows for the
standing of its managers, the wages and the tenor of life of its workers, the quality-price ratio for the clients, the affability
shareholder, the
and the continuity of the partnerships with the suppliers and the guarantee of social well being for the community.
professional standing
of its managers, the
The client is one of the main Stakeholders referred to. This is why Dellas offers solutions and products to help satisfy
wages and the tenor
the needs for safety, speed and technological innovation, calibrating them to the real needs of the client especially for
of life of its workers,
financial support which Dellas gives by way of favourable payment terms compared to those in the market. This goes
the quality-price
some way to deal with one of the present trading periods most critical aspects.
ratio for the clients,
the trustworthiness
Workers and staff constitute the most important capital for the company. Without their know-how, their professionalism
and the continuity of
and the abilities of its own staff, the company would not exist. For this reason Dellas is committed to giving fair
the partnerships with
compensation and in constantly developing the skills of its own partners so that they can produce value both for
the suppliers and the
themselves and for the company as a whole.
guarantee of social
wellbeing for the
Economic, Financial and Capital situation of the Dellas Group
community.
TABLES 1 and 2 illustrate the most significant data concerning the economic, financial and capital situation of the Dellas Group.
STATEMENT OF ASSETS AND LIABILITEIS 2017 2016 2015

Total fixed assets 11,494,222 10,372,824 9,929,045
Total current assets 23,564,933 24,309,908 25,254,731
Total assets 35,059,155 34,682,732 35,183,776
Total current liabilities 14,359,785 13,090,498 12,682,512

Total non-current liabilities 4,051,182 3,294,928 3,698,166
Third party capital and reserves 153,754 172,476 119,587
Total shareholder equity 16,494,434 18,124,830 18,683,511
Total Net Equity and Liabilities 35,059,155 34,682,732 35,183,776
► TABLE 1 - Main financial and capital data of the Dellas Group
Dellas ǀ 31
PROFIT AND LOSS ACCOUNT 2017 2016 2015

Net sales revenues 16,977,151 18,431,581 18,703,364
Added Value 4,719,211 6,325,472 6,991,306
EBITDA (gross operating margin) 434,931 1,606,509 1,560,107
% EBITDA on Sales 2% 9% 8%
EBIT (characteristic operating income) (1,367,535) (116,652) 67,858
EBT (pre-tax profit) (1,802,878) (306,881) 72,123
Net income (1,595,160) (305,758) 70,861
Adjusted EBT (278,025) 331,231 72,124
► TABLE 2 - Key economic data of the Dellas Group
The consolidated turnover for the year 2017 shows an 8% reduction compared to the previous year.
This change is the result of a 11% decrease in the turnover of the Parent Company, suffered due to a sharp decline in the
Brazilian and Turkish markets, offset by an increase in sales made by subsidiaries.
Gross Global Added Value was € 4,719,211, while the value of EBITDA was € 434,931.
The value of the Consolidated Net Equity, amounting to € 16,648,188, compared to the total Invested Capital of €
35,059,155, indicates a good level of capitalization and a balanced indebtedness ratio of the Group.
Calculation and breakdown of Added Value

Analysis of the relations between the Dellas Group and those having stakes in it are shown in TABLE 3 through consideration
G4-EC1 of so-called Added Value, a figure that results from the reclassification of the profit and loss account and enables us to
have a social re-interpretation of the traditional economic accounting.
By Added Value is meant the difference between the value of assets and services produced and the value of services
acquired from outside the company. This figure may thus be interpreted as the amount created by the company in
the carrying out of its activities and which, as such, is distributed among the different categories that have made their
different input to produce it.
The company is therefore seen as a team of persons cooperating together to create wealth, the distribution of which
benefits them all. From this point of view, income is not considered the wealth created but only as the shares of distribution
of the global wealth; similarly, the remuneration of the personnel is another share of wealth, which remunerates human
resources that have contributed to its creation.
To calculate and break down the Added Value, standard GBS drafting principles have been adopted for the company’s
statement of assets and liabilities
DETERMINATION 2017 2016 2015

OF THE CONSOLIDATED ADDED
VALUE
A) Production value 17,560,609 18,852,994 19,863,693
B) Costs of production 12,820,172 12,515,,871 12,861,451
TYPICAL GROSS ADDED VALUE 4,740,437 6,337,123 7,002,242
C) Accessory and contingent 21,226 11,650 10,936

components
GROSS GLOBAL ADDED VALUE 4,719,211 6,325,472 6,991,306
Amortization and provisions for 1,802,467 1,723,161 1,492,249

management
NET GLOBAL ADDED VALUE 2,916,744 4,602,311 5,499,057
► TABLE 3 - Added Value created by the Dellas Group
32 ǀ Dellas
With regard to the determination of the Added Value in particular, the following main items can be identified:
• The Characteristic Added Value, resulting from the difference between the revenues of the characteristic management
of the company and the so-called intermediate consumption, that is the consumption that does not amount to
remuneration for the main categories of Stakeholders such as the workers, the lenders, providers of gifts or other
payments to society or the community;
• the Gross Global Added Value is the algebraic sum of the Characteristic Added Value and the results of accessory
management and extraordinary management;
• the Net Global Added Value is obtained by the operating depreciation and provisions from the Global gross added
value.
TABLE 4 illustrates how the Added Value, by which here is meant the Added Global Gross Value, has been distributed
between internal and external Stakeholders, with the period of reference being the three year period 2015-2017
DISTRIBUTION OF ADDED VALUE 2017 2016 2015
A) Staff remuneration 4,412,602 4,673,660 5,391,957

Remuneration of employees 4,198,602 4,413,772 5,161,598
Directors and board of statutory auditors 214,000 259,888 230,359
B) Remuneration of the Public Administration (268,245) 25,568 75,807
Direct and indirect taxes (207,718) 90,194 79,647

(-) Contributions in the financial year 60,527 64,626 3,840
C) Remuneration of loan capital 241,389 284,990 319,949

Charges for short and medium-long term 241,389 284,990 319,949
capital
D) Remuneration of Shareholders (14,648) (28,639) (81,745)

Dividends distributed to Parent company
shareholders
Profits/Loss relating to third parties (14,648) (28,639) (81,745)
E) Remuneration to the Company 323,940 1,345,030 1,256,776

Provision for Reserves of Net Equity (1,595,160) (305,758) 70,863
Depreciation 1,687,849 1,723,161 1,492,249

(Profits) and losses on currency exchange 231,251 (72,373) (306,336)
F) Compensation to the community 24,173 24,863 28,562

Free contributions to Entities 24,173 24,863 28,562
and Membership fees
GROSS GLOBAL ADDED VALUE 4,719,211 6,325,472 6,991,306
► TABLE 4 - The distribution of Added Value of the Dellas Group as between its Stakeholders Dellas ǀ 33
Human Resources 87 %
The Company System 7%
Banks and Lenders 5%
Community 1%
► TABLE 5 - Dellas stakeholders’ map
From an analysis of the added value produced and distributed in 2017 by the consolidated Dellas Group the following
emerges:
Human Resources
The personnel is the stakeholder obtaining the greatest percentage of added Value: with 87% overall added value
produced in 2017.
The Added Value was distributed to the employees by means of direct and indirect remuneration of € 4,198,602 as
detailed in the section dedicated to human resources .
The Company System

As stated the company policy of Dellas has always set aside the greater part of its operating profit, funding much of
the Investments by way of self-financing. This has meant that over the years it has been possible to remain somewhat
independent of the credit system by keeping bank debt down. This is illustrated in the Business report, which goes into
G4-EC4
detail on the question of company debt. In the financial year under examination the Company System received about
7% of added value, with provisions for Reserve, depreciation and exchange differences.
Banks and Lenders

The remuneration of capital receivables in the financial year in question is € 241,389.
G4-EC7 Community
A part of the Global Added Value for € 24,173 was allocated to the community, in the form of various initiatives to support
associations and Non-profit organisations operating in the Verona area.
Shareholders
No dividend for 2017 to Shareholders
Financial
capital Manufactured capital
Manufactured The financial year 2017 is characterized by a robust investment policy in Fixed Assets for a total of € 1,352,190.
capital In addition to important development projects, worth € 1,192,732, so as to ensure continuous product improvement,
and a strong innovative drive in the industrial process, investments were made in associated companies and subsidiaries
Social and for € 159,458, to support the productive and commercial development of the same.
With regard to investments in tangible assets, these mainly concerned plant and machinery.
Intellectual
These loans were financed entirely with the Operating Cash Flow generated by operations in the year in question.
capital
Human
capital
Natural
capital
34 ǀ Dellas
Financial
capital Social and Relationship Capital
Manufactured
capital
Customers
Social and Characteristics and size of the market
The global market for diamond tools for working natural stone is estimated to be about 700 million Euros (1), breaking
down between many small local competitors and only just a few worldwide players.
Intellectual
capital Dellas is among the top 5 international players, that together have a market share of about 15% (1).
Human (1) Source: Annual Report 2016 Husqvarna Group and Dellas estimates.
capital
Markets and Products
Natural
capital Dellas products cover all stone working processes from the quarrying to final finishing and polishing (► section
“Business Model and Value Creation”) are distributed globally by way of the network cover of assistance or direct
presence of companies in the group. There are 30 countries in which Dellas has commercial and assistance premises,
with a total of 54 dealers/agents.
The geographic breakdown of revenues ( ► TABLE 6) showed that there sales were achieved of 59% in Europe,
while 41% is divided between Asia, America and Africa.
The geographic
breakdown of revenues
showed that there sales
were achieved of 59% Europe 59 %
in Europe, while 41% is
divided between Asia,
America and Africa Asia 22 %
Africa 10 %
G4-8 G4-9
America 9%
► TABLE 6 - Geographical division of the Group’s revenue (year 2017)
0% 20% 40% 60% 80% 100%
The weighted
share of the new 2015 ► 42% 58% New Products
family of products
is ever more
Disks and Blades
important
2016 ► 45% 55%
2017 ► 42% 58%
► TABLE 7 - Incomes for the Group divided by typology of product
Dellas ǀ 35
Distribution Network
It has over time been found to be a strategic policy to create assembly centres around the world in co-operation with
local retailers. The company thus develops a widespread presence able to offer immediate and prompt assistance,
thus ensuring competitive local costs. there are 30 countries in which we have Dellas commercial and assistance
G4-5 G4-6 premises, with a total of 54 dealers/agents.
DELLAS S.P.A. DELLAS İSTANBUL MAKINA

Via Pernisa, 12 - Frazione Lugo SANAYI VE TICARET A. Ş.
37023 Grezzana SeyrantepeMah. Altınay Cad. No: 31 Kat: 2
Italy Köşe Han Kağıthane, İstanbul
Turkey
DELLAS SPAGNA, S.L. DELLAS DIAMOND TOOLS

Polig. Indus. A Granxa, Pa 114 - SUZHOU CO. LTD.
36475 Porriño - Pontevedra Building 17F Suchun Industrial Square
Spain Qingqiu Street, Longtan Road
Suzhou Industrial Park, Suzhou,
P.R.China
DELLAS S.P.A. DELLAS DO BRASIL FERRAMENTAS

ETHIOPIAN BRANCH DIAMANTADAS LTDA
Kebele 16, Bole Sub city Woreda 07 Avenida Colares Junior, nº 1.485-F,
House N.053, Addis Ababa CEP 29172-810, Serra, Espírito Santo
Ethiopia Brazil
DELLAS STONE TOOLS

INDIA PRIVATE LIMITED
Unit G, Hotel Planet, 571/2,
MORE INFORMATION ON DELLAS BRANCHES
Office Complex, Anna Salai, Teynampet,
www.dellasdiamondtools.com/company/dellas-branches
Chennai - 600018, Tamil Nadu
Widespread
India
cover and prompt
assistance in 30
Countries
DELLAS S.P.A.
DELLAS
BRAZIL DELLAS DELLAS DELLAS
SPAIN ISTANBUL SUZHOU
DELLAS
INDIA
DELLAS
ETIOPIA
36 ǀ Dellas ► TABLE 8 - Dellas in the world: branches and countries served Dellas Branches Dellas in the world
Safety of Products and Services

The efforts made to protect the health and safety of those who use or supply the product have a direct impact on
DMA the reputation of the organisation, on the legal and financial risk of product recalls, and on the capacity for product
diversification on the market in relation also to the quality and motivation of the employees. Dellas thus carries out
continuous safety checks on all its products.
In the last three years Dellas has been deeply committed to the issues of product safety, with also an information
G4-PR1 G4-PR2 programme for customers on the storage, handling and assembly of tools to ensure they are not used improperly or
dangerously. Information is provided on the main regulations in the field of safe packaging of products and all categories
of products are subject to processes of constant improvements over time as regards safety for the customers.
In 2017 there have been no accidents or cases of non compliance with regulations or voluntary codes on the products
and health and safety.
Communications and marketing products and services

Communications relating to Della products have always been characterised by propriety and accuracy of information
and measured description of the cutting and processing performance of tools. Dellas does not sell products that are
G4-PR6 G4-PR7
prohibited by European law and regulations which are in fact very strict, nor does it do so outside of Europe even where
local regulations are would permit this. During 2017 there were no accidents caused as a result of failure to comply with
regulations regarding communications or marketing.
Customer relations, and customer satisfaction

G4-PR5
The illustrated innovation projects have over the last three years had a positive impact in terms of improvements in
customer relations. To secure competitive advantages over Asian competitors and better customer retention, as well as
providing an excellent product, Dellas is characterised by prompt after-sales service at customer premises and a high level
of service as regards delivery reliability.
The excellence of product quality is confirmed by the direct responsibilisation assumed by Dellas with regard to tool
performance since some categories of products are sold by yield, i.e. with the price calculated according to rendition with
guaranteed minimum amounts of cutting.
Dellas has
distinguished itself The quality levels of the products are measured with the indicator of numbers of Non-compliances on Output (► TABLE
for a punctual 9), che nel 2017 mostra un sensibile miglioramento rispetto al precedente esercizio.
after-sales service
at the customer’s
site and a high level Year Number Checks Number Non compliance % Non compliance
of service in terms 2017 9,217 170 1.8%
of reliability of
2016 9,078 105 1.2%
delivery
2015 11,735 374 3.2%
► TABLE 9 - numbers of Non-compliances
With regard to service, the customer carefully assesses performance in terms of flexibility and reliability of delivery,
where Dellas has over the last three years been able to optimise its production lead times. (► TABLE 10).
Year The Lead Time: (in days) Change in % (as compared with previous year)
2017 3.08 (4%)
2016 3.22 (4%)
2015 3.35 (2%)
► TABLE 10 - Product lead time
Dellas ǀ 37
Suppliers
Procurement policy and selection of suppliers
Procurement processes are managed by the Buying dept. of Dellas at its Italian office and by specialists in its foreign
subsidiaries. Integrated management as regards economics, social, environmental and governance characterises
the dealings between Dellas and its suppliers. The quality of the companies that provide goods or services is also
fundamental to the quality that the Dellas brand wishes to stand for. The social, environmental, and ethical business
responsibility of the Dellas supplier are valued together with the economic quality of the product or service to be
supplied when opening dealings with the potential supplier. The checks on ESG performance are made at present
G4-12 DMA through the collection of information that can be gathered on the market. These appraisals are particularly thorough
for suppliers from outside the EU, regarding countries whose environmental and workplace regulations are less strict.
Evaluations of the stability and reputation of the supplier partners complete the selection criteria. An average of
9 years’ service (► TABLE 11) that characterises the main suppliers (i.e. those that assure about 2/3 of the total
supplies), which is a notable figure that reflects good relations with a high level of partnership.
La 9-years
seniority average
Year N. years Weight in % subtotal of procurement in €
indicates good
relationships Mean longevity of Top 30 suppliers 9.1 67
with staff and
a high level of ► TABLE 11 - Average seniority of top suppliers (2017)
cooperation and
partnership
Provenance of Suppliers
TABLE 12 illustrates geographical origin of suppliers in the percentage of the value of supplies. It emerges that Dellas,
despite fierce Asian competition, has been able to stand out with strong cost leadership, and has up to today maintained
a high percentage of goods and services (around 54%) sourced from our own country. This “made in Italy” feature of
G4-EC9 Dellas products means they are of high intrinsic and perceived quality.
The 59% Country 2017 2016 2015

supplied by
Veneto 14% 22% 26%
our country’s
companies Italy (except for Veneto) 45% 32% 30%
is strongly Europe 16% 13% 12%
characterised
other Parts of the world 25% 33% 32%
by the “made in
Italy” formula for
Dellas products ► TABLE 12 - Provenance of Suppliers
Transaction conditions and Payment terms

Where a situation in which the economic overview is not particularly rosy, Dellas holds itself out to its suppliers as an
example of reliability and correctness as regards payments, convinced that this is essential for the growth in the quality
of the relationship. At a time when the average number of days between companies for payments in the private sector
has got more and more, Dellas can boast substantially steady Days Payable Outstanding (DPO),with a figure always below
100 days, the benchmark for the sector to which it belongs. (►TABLE 13).
2017 2016 2015
Days Payable Outstanding 98 87 83
► TABLE 13 - Transaction terms and payment terms
Such figures are even more important if compared with the conditions and average market payment terms in the markets
in which the products of Dellas are sold, as these exceed 180 days. For the benchmark see the average internally calculated
in the financial year 2015/2016 of Italian company members of Confindustria Marmomacchine -Assomarmomacchine
(General Confederation of Italian Industry - Marble industry) in the Diamond tools sector, with a minimum turnover of
3 million Euro.
38 ǀ Dellas
Suppliers of Capital
The Parent company Dellas Spa has dealings with 7 credit institutions, 5 of which carry out around 85% of the
commercial and financial operations. Such credit institutes are all but two Italian financial groups.
The lead company is
Also as regards the Group’s foreign subsidiaries there are dealings with another 5 banks that facilitate the operations
positioned with a mean
in the local areas.
investment grade rating
of “A-“ By Standard
The Dellas Group shows a high capital standing together with moderate debt levels as can been in the PFN/PN ratio
& Poor’s
(Net Financial Position/ Net equity), being at 0.57. Such capital and financial characteristics capital have enabled
Dellas, once again in 2017, to invest its own current capital assets and use the banking system at relatively low cost
levels if we consider the average cost of third party capital for the year 2017 was 2.7% on consolidated basis while
it was 1.7% for the parent company Dellas Spa.
The rating analysis (2) attributed to Dellas Spa by the first 5 institutes representing about 80% line of the loans
granted, places the Parent company in with Investment Grade with an average of a rating corresponding to the “A-”
of Standard & Poor’s (3). This positioning confirms its adequate capacity to meet its financial commitments.
(2) “The rating is a judgement on the reliability of a company, and specifically its ability to repay a loan over a determined period of
time. It is thus a synthetic available of the Credit risk profile, taking into account quantitative and qualitative information the bank
has on the company in relation to the mix of information on total availability of customer clients and their reimbursement behaviour
over time” (“Knowing the Rating - As reliability assessed by the companies in view of the Basel Accord” published by the Italian
Banking Association)
(3) Standard and Poor’s Corporation (S&P) is a private US-based company that does financial research and analysis of bonds and is
among the three leading rating agencies, together with Moody’s and Fitch Ratings.
CoIlectivity
In line with company values and the principles of Corporate Social Responsibility, Dellas has always considered itself to
be an integral part of the community in which it operates. In accordance with this conviction, it regards it as important
to sustain the social and economic value of the Collectivity or the community of which it is part, and does so through a
series of activities and initiatives.
Developing local Suppliers

Even though it has to face fierce competition in Asia which has strong cost advantages, Dellas has maintained a high
percentage of suppliers of goods and services in our own country, as previously illustrated in the section “Suppliers”.
DMA Contributions to the community and inclusion initiatives

Still with the aim of building, preserving and strengthening active cooperation with its community, Dellas has also
established a number of initiatives in support of Associations and Non-profit organisations in the local surrounding area,
G4-S01
especially in the area of Verona (► TABLE 14).
2017 2016 2015

Number of sponsorships for Associations 3 5 5
Number of donations to ONLUS charitable bodies 8 13 6
► TABLE 14 - Sponsorships to associations and donations to ONLUS charitable bodies
The sponsorships and donations, as well as other initiatives described in the paragraphs subsequent, in favour of the
socio-economic fabric of the local area, are appreciated directly or indirectly also by those working at or with Dellas,
G4-EC7 who enjoy being in a strong local geographical area: as already seen in The “Human Resources” section (► TABLE 21),
more than 92% of the personnel at Dellas lives in the municipal district and province of their workplace. Dellas carries
out no activities with significant negative, potential or actual impact on the local community. Dellas has not in the
G4-S02 G4-S07 course of 2017 had legal action brought against it for unfair competition, anti-trust matters or monopolistic practices
or the effects of these.
Dellas, in line with the company’s principles and values, has always considered itself an integral part of the community,
encourages the involvement of students of schools in its geographical area through various stages and internships
Dellas ǀ 39
Financial
capital Intellectual capital
Manufactured
Product and Process Innovations
capital
SUPREME EU Project
Social and During the course of the 2017 financial year, research activity was developed further. A new impetus stems from
relationship capital the placement of a new materials engineer and the participation in a European project Horizon 2020 (https: //www.
supreme-project.com).
Intellectual The project, in which 17 major European companies are involved in the field of powder metallurgy, aims to optimize
capital
processes throughout the supply chain, starting from the extraction in iron or copper mines, up to the manufacture
Human of the finished product through the use of the most innovative production techniques (additive manufacturing, MIM,
capital laser metal deposition, etc). Dellas, as SME representative within the consortium, was invited as a partner to develop
and optimize the DIM process for alternative metal powders to cobalt, a raw material increasingly difficult to find and
Natural for which the level of risk to exposure has been raised by the European authorities.
capital
https://www.supreme-project.com
3DIM “Diamond Injection Molding”

Dellas is about to market a new product developed using 3DIM technology, “Diamond Injection Moulding”. This is a
patented technology for the creation of new 3D shapes for the optimization of cutting performance and represents a
real revolution in the world of diamond tools. Currently, with the traditional frame cutting method, very thin marble
slabs can already be produced with a remarkably small amount of waste. However, with a view to constantly improving
its offer, Dellas has aimed to further increase its performance in cutting marble slabs, studying a wire for multithreading
of a reduced diameter optimizing the shape of the pearls thanks to innovative patented 3DIM technology. This
innovation aims to improve in qualitative terms the already excellent performance that this type of processing gives
today, without significantly impacting on costs. With this new generation of 3DIM technology, Dellas actually delivers
to the companies that transform stone materials a new essential tool with which it will be possible to cut the blocks of
marble with a speed that can be up to four times higher than that of the traditional frame, maintaining unvaried the
quantity of waste material and making the production processes more efficient. Moreover, the use of 3DIM technology
will reduce the risk of stone “fractures” to a minimum: irregular or delicate materials, which today usually tend to be
discarded or prepared with expensive resin treatmentswill be included in the standard production processes thanks to
this new technology, thus maximizing the resources available.
The process that led to the definition of this new generation 3DIM, a technology created exclusively by the Dellas
brand, has been long and tortuous, but has allowed us to offer a product of universal utility suited to a wide range of
needs. After all, the company has always prided itself on the ability to customize production, which is never standard
but based on a case by case study of the individual needs of the customer aimed at achieving the highest level of
service possible. Since its being established, the company’s Research and Development Analysis Centre has been at
the forefront of a constant quest for innovative and effective technological solutions able to meet the entire needs
of the stone industry. The Company periodically develops proposals and updates that allow the upgrading of the
complex processes of working marble and granite and that bring stone cutting ever nearer to the intrinsic concept of
“perfection” but this is not its only mission.
Dellas, offers a much needed tool revolution, which will ultimately cover all aspects of production and can only meet
with the approval of those who want to combine quality and speed in a single machine.
LOOK AT THE R&D WEB PAGE

40 ǀ Dellas www.dellasdiamondtools.com/company/research-development
Industrial Research Projects and Experimental Development

Over the course of 2017, two separate experimental research and development projects were carried out:
• PROJECT 1. - Design and development of a MOLA ECOLOGICAL milling machine dedicated to ceramic trimming
processes
The mills used in the ceramic market have also been developed, specifically in the choice of the materials used.
This is mainly to meet the needs of the market, which has seen an increasingly decisive shift towards the “copper
Two research
free “ for production needs as well as for ecological reasons.
and development
projects aimed • PROJECT 2. - Design and development of a new product dedicated to marble cutting: single andmulti-
at technological threaded diamond wire
improvement of A specific thread for marble cutting is being studied, a sector for which the use of multi-threaded wire, nowadays
own products used specifically for granite, may soon become a valid alternative to the frame with diamond blades. This type
of wire, which would be an entirely new innovation regarding the production methods and materials used, is the
subject of intense research activity that will hopefully come to fruition later in 2018.
In order to carry out the above projects, the company incurred research costs of € 111,627.28 and development costs
of € 843,327, a total of € 954,954 broken down as shown in TABLE 16.
We trust that the success of these innovations can generate results in terms of sales with a positive effect on company
profits.
The costs refer to experimental development activities, as defined by the Community guidelines on “State aid for
research, development and innovation” (2006 / C 323/01). (4)
These 2 projects required the use of personnel for 16,525 hours, divided between the various initiatives as shown in
TABLE 15.
Project 1 Project 1
7,441 ore 411,009 €
Project 2 Project 2
11,417 ore 543,945 €
► TABLE 15 - Distribution of R&D hours 2017 as between projects ► TABLE 16 - Distribution of R&D costs 2017 as between projects
Moreover in 2015 and 2016 several projects involving research and experimental development activities were carried
out, summarized in TABLE 24. The research activities were backed up by repeated laboratory tests, tests aimed at the
refinement of new technological solutions and the creation of samples. This was in collaboration with suppliers and
technological partners in order to simulate the process at an industrial level and obtain information on the soundness
and the qualitative characteristics of the product / process.
Year Number of hours Total costs (€) % Sales Costs
2017 18,858 954,954 5.6
2016 16,525 1,201,302 6.5
2015 24,400 1,154,989 6.2

► TABLE17 - Main industrial research and development projects in financial
Dellas ǀ 41
Process indicators
Control over production efficiency is one of the targets for which the production operators are measured and on
which the objectives for the operators are based. Also in the course of the financial year 2017, a slight downturn was
seen in the overall volume of production, especially for those products that Dellas has traditionally manufactured
and supplied (discs and blades). Significantly, volumes of new products are on the rise. Attempts are being made to
optimize the production processes for these.
The overall figure for company efficiency remains substantially in line with that of the previous year. This should be
considered, taking everything into account, as positive, in light of the decline in volumes produced against the increase
in the mix of the same.
1,7
1,65
1,6
1,55
1,5
1,45
1,4
I° II° III° IV° I° II° III° IV° I° II° III° IV° I° II° III° IV°
quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter
2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017
► TABLE 18 - Production efficiency
Another KPI that is monitored, indicator of the level of service to the end customer, is represented by the diamond
components crossing time, an indication of the organization’s speed in dealing with a production request and therefore
to satisfy the customer. Both indicators are shown in the following graphs.
4,00
3,80
3,60
3,40
3,20
3,00
2,80
2,60
2,40
2,20
2,00
I° II° III° IV° I° II° III° IV° I° II° III° IV° I° II° III° IV° I° II° III° IV°
quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter quarter
2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017
► TABLE 19 - Segments flow time
42 ǀ Dellas
(4) Concerning state aid for research, development and innovation (2006 / c 323/01), the following definitions are used:
• «Basic research»: experimental or theoretical work carried out above all to acquire new understanding about the principles behind
phenomena and observable facts, without any direct practical applications or uses;
• «industrial research»: planned research or critical investigation aimed at acquiring new knowledge for use or to make ready
new products, processes or services such as to allow for a notable improvement in the products, or services that already exist.
This includes the creation of components of complex systems necessary for industrial research and in particular for the validation of
technologies of general kinds excluding prototypes made in the subsequent experimental development stage;
• «experimental development»: the acquisition, combination, structuring and use of existing knowledge and skills of scientific,
technological, commercial or other nature with the aim of producing plans, projects or designs for products or processes that
are new, modified or improved. It may also be another activity for conceptual definition, planning and the documentation
concerning new products, processes and services. These activities can include the development of projects, drawings, plans and
other documentation, provided they are not intended for commercial use.
Over 3,100 Research and Analysis Centre

types of stones Succeeding in cutting and working all the world’s stone, but also building materials and ceramics, this is a guarantee that
were analysed Dellas offers its customers. To reach this objective, the company has developed in its Research and Analysis Centre for
in the Research materials. It is the high technology heart of the company.
and Analysis
Center Research, a subject of continuous investments through the use of company profits, has always been seen as a fundamental
part of the production cycle, essential for maintaining the competitiveness on global markets.
In addition to the most widespread and most used stone materials, the Dellas laboratory keeps over 3,100 samples of
marble, granites and agglomerates from all over the world. Every sample is carefully conserved and catalogued by type
and provenance. This forms a data base containing information about morphological characteristics of the material, the
only one of its kind, essential for the preparation of blades, discs and tools able to operate with the greatest efficiency
and precision. Dellas is thus able to offer its customers from all over the world a personalised service for every stone
sample provided.
Thin sections of stone are analysed under the microscope to identify the mineral content. The material is tested for
sawing and abrasion, with all results recorded in extremely accurate graphs. X-ray fluorescent spectroscopy showing
technicians the chemical composition of the samples. Only after a positive outcome from laboratory testing are the
diamond tools delivered and consequently considered as “standard”. At the end of the research and experimentation
process a materials file is drawn up which can, on request, be sent to the customer.
This level of organisation allows us to manage customer needs in real time. The company considers the efficiency of the
tools it supplies as absolutely essential, to ensure a faster, safer, quieter, more precise and more economical. Thanks to
its research, Dellas is able to greatly reduce cutting and working times. The constant commitment shown in every stage
in the working process, the passion for research, for continuous and strict experimental development, the automation
of the production processes and the desire for high quality products and service have all always been distinctive features
of Dellas.
Dellas ǀ 43
Financial
capital Human capital
Manufactured Human Resources
capital
The world of organisations over the last few years has increasingly been focusing attention on human resources, as their
Social and quality and the skills they represent give a real competitive advantage to companies operating in whatever sector. In the
relationship capital last decade, in particular, companies have had to face a situation characterized by profound technological revolutions,
which have consequently brought about changes in the kind of work that people do.
Intellectual Right at the start of this transformation Dellas realised the importance of human skills and learning ability and has
capital
maintained a keen interest in attracting and retaining the most talented individuals. For these reasons the Human
Resources in Dellas have started to occupy an ever more central role on realising that our co-workers, constitute a real
Human
capital asset to the company
There has consequently been a need to implement new practices for the management of human resources based on the
Natural cultivation of talent and on the creation of working conditions capable of attracting them and keeping them within the
capital company.
It is important to show that Dellas has always considered as fundamental the right of workers to enjoy the protection
of the current employment legislation and of collective bargaining, both national and company, strongly opposing any
kind of black economy working, the employment of minors or forced working, respecting the human rights of workers as
provided for in the “Universal declaration of human rights”.
One of the basic principles held by Dellas is to focus on the care of its human capital, a truly winning strategy in such a
competitive and constantly evolving market.
Analysis of company organisation

As of 31/12/2017, the Dellas Group has 122 staff, distributed in various locations in Italy and overseas. The location
with the greatest number of employees is that in Italy where the main production departments are located. There are
two factories in China, at Suzhou and Denizli, that have 16 employees. These are followed by the premises in Istanbul,
Denizli, Addis Adeba and Pontevedra with in all 14 employees(► TABLE 20).
DMA
Administrati- Managerial Production Sales Techni- Total Total Total

ve staff Service cal 2017 2016 2015
One of the basic Italy - Lugo 9 1 61 11 10 92 96 98
principles held by
China - Suzhou 1 1 12 1 15 14 14
Dellas is to focus
on the care of its China - Xiamen 1 1 1 6
human capital, a truly Turkey - Denizli 1 7 8 8 8
winning strategy in
Turkey - Istanbul 2 1 3 3 3
such a competitive
and constantly Ethiopia - Addis 1 1 1 1
evolving market Ababa
Spain - Pontevedra 2 2 1 1
Total 12 4 82 13 11 122 124 131
► TABLE 20 - Distribution of personnel by headquarters and business area at 31/12/2017
90% of the human resources live in the municipal area and province of their own place of work. (► TABLE 21).
G4-10
Administra- Managerial Production Sales Techni- Total Total Total
tive staff Service cal 2017 2016 2015
In the municipal 5 1 46 4 5 61 61 64
The Dellas district of
Group has 122 staff, workplace
distributed in various In the provincial 7 3 31 6 5 52 52 56
locations in Italy and district
overseas
Outside the 4 2 1 7 8 8
regional area of the
workplace
In the regional area 1 1 1 3 3
of the workplace
Total 12 4 82 13 11 122 124 131
► TABLE 21 - Distribution of personnel by location and company area as of 31/12/2017

44 ǀ Dellas
As can be seen in TABLE 21, the data has remained constant over the last three years, a situation that highlights the high
degree to which Dellas is integrated in the geographical area and with the communities concerned.
13% of the employees have degrees and 28% have a high school diploma. (► TABLE 22).

Compulsory 1 65 6 72 72 75
High school 3 2 16 9 4 34 35 38
Degree 8 2 1 4 1 16 17 18
Total 12 4 82 13 11 122 124 131
► TABLE 22 - Educational qualifications of staff as of 31/12/2017
Most of the employees are taken on for an open term contract (85%). This demonstrates the willingness of Dellas to
invest on its human resources, on their growth and loyalty.
The majority of employees (67%) are in the production area, clear evidence that Dellas operates in an industrial sector.
(► TABLE 23).

Open term contract 12 1 68 12 10 103 106 100
Fixed term contract 2 14 1 1 18 16 26

Other forms of 1 1 2 5
contract
Total 12 4 82 13 11 122 124 131
► TABLE 23 - Distribution of staff by type of work contract and company area as of 31/12/2017
The distribution of staff by contractual type and gender is illustrated in the following table. (► TABLE 24)
Females Males Total

84% of the
Open term contract 27 76 103
employees of
the Group are Fixed term contract 3 15 18
hired indefinitely
Other forms of contract 1 1
Total 30 92 122
► TABLE 24 - Distribution of staff by type of work contract and company area as of 31/12/2017

Workers 77 5 82 81 85
Clerks 9 1 2 7 5 24 25 27
Executives 2 3 5 1 11 13 13
Managers 1 3 1 5 5 6
Total 12 4 82 13 11 122 124 131
► TABLE 25 - Staff distribution by function and department as of 31/12/2017
Dellas ǀ 45
The average age of staff is 45 years. This rises to 47 in the managerial area and falls to 42 in the administrative area.
(►TABLE 26)
Administrati- managerial Production Sales Technical Total

ve staff Service
<25 years 2 2
26-30 years 1 5 2 8
31-35 years 1 2 2 5
36-40 years 3 1 10 5 1 20
41-45 years 3 2 19 1 1 26
46-50 years 3 25 1 3 32
51-55 years 1 11 2 3 17
> 56 years 1 8 2 1 12
Total 12 4 82 13 11 122

ve staff Service
Average age 42.33 46.75 45.34 44.38 45.64 45.02
► TABLE 26 - Average age of human resources as of 31/12/2017
Average business seniority, on the other hand, is 14 years.

18 people, or 14% of the workforce, have a seniority of less than 3 years, this is mainly due to new hiring at foreign
plants (China and Turkey). Then there is a 35% in the range between 11 and 15 years and between 16 and 20 years of
seniority. (►TABLE 27)

ve staff Service
<3 years 3 10 4 1 18
from 3 to 5 years 2 13 3 3 21
from 6 to 10 years 2 1 2 1 2 8
from 11 to 15 years 1 1 20 1 2 25
from 16 to 20 years 2 13 2 1 18
from 21 to 25 years 2 8 1 11
from 26 to 30 years 2 13 2 17
> 31 years 3 1 5
Total 12 4 82 13 11 122

ve staff Service
Average age in 14.42 6.75 15.12 10.54 11.27 13.94

company
► TABLE 27 - Average company age as of 31/12/2017
46 ǀ Dellas
Employment trends and turnover

The employment trend in 2017 is falling compared to 2016. The number of staff has fallen from 124 to 122.
In 2017 there were 2 new engagements, while 4 persons left the Dellas Spa. Premises.
The turnover of staff, which measures the number of workers hired and having contracts terminated during the year, is 5%
below the previous two years.
2017 2016 2015

G4-LA1 Turnover rate total (*) 4.9% 5.6% 14.5%
*Calculated according to the formula: (entries + exits in the period/ average staff in period *100)
► TABLE 28 - Turnover of staff
DMA
Equal Opportunity
Dellas is receptive to the issue of equal opportunity avoiding all forms of discrimination and promoting a company culture
that appreciates diversity. In relations with workers, in the management of personnel and in the organization of work,
as well as with its dealings with all stakeholders, Dellas undertakes to guarantee the absence of discrimination in the
workplace.
In the selection of the personnel, Dellas safeguards equal opportunity through evaluations of the professional and
Female Personnel psycho- attitudinal profile of the candidate, respecting their private lives and opinions.
is 25% of the staff, For Dellas managing diversity also means making the most of each employee’s own unique contribution. Diversity of
rising to 50% in the gender, of culture and of origin are now universally acknowledged as a true value. Dellas seeks to manage it as well as
administrative areas possible, without forgetting that today the management of diversity must go hand in hand with the quest for equality,
and 33% in the sales since feeling oneself to be equal and included, gives rise to cooperative working and sharing of the company culture.
area
Female Staff
The female staff covers 25% of the workforce: this percentage increases up to 50% in the administrative and staff area
and to 31% in the sales area. (► TABLE 29).

Females 6 1 18 4 1 30 31 33
Males 6 3 64 9 10 92 93 98
Total 12 4 82 13 11 122 124 131
► TABLE 29 - Women staff at 12/31/2017
Foreign Workers
Dellas has significant variety in the nationalities working for the company. Reflecting the company’s multicultural values,
23% of the personnel is non-Italian. In 2017, 25% of the foreign workers were from non-EU countries
As of 31 December 2017 Dellas did not witness any episodes linked to discrimination.

Chinese 1 12 1 1 15 14 18
Italian 9 3 58 11 10 91 95 98
Spanish 2 2 1 1
Turkish 2 1 7 1 11 11 11
Nigerian 1 1 1 1
Croatian 2 2 2 2
Total 12 4 82 13 11 122 124 131
► TABLE 30 - Nationality of employees as of 31/12/2017
Dellas ǀ 47
Hiring and collective bargaining policies

G4-HR3
Dellas has always regarded the meeting with and the hiring of personnel as a matter that is not only important, but also
strategic. This is why, especially in recent years, recruitment policies have been embarked upon using new guidelines,
aimed at better refining the choice of candidates and consequently ensuring the success of each placement of each
member of staff in the organisation. For this reason, the staff at Dellas increasingly embody the values and principles of
the company, thus becoming a driving force for its success.
The selective procedures for taking on new personnel are carried with procedures that ensure impartiality and
transparency and ensure reasonable costs and speed for the appraisal of the skills, knowledge and attitudes of candidates
to hold the corresponding company positions.
Access to a job at Dellas is arrived at by methods that assure respect for equal opportunities for candidates without
distinction as regards, gender, religion, culture or social position. The selection process adopts objective and transparent
mechanisms designed to check the person has the right requirements.
The selection procedure is carried out as follows:
• Head of HM, together with the MD, draws up a plan of annual staff hiring that takes account of the needs for
personnel in the various offices and departments and expected turnover.
• In the first instance, the selection of candidates is made on the basis of applications that have been sent to the
company, together with assessments of candidates proposed by agencies specialised in recruitment.
• A classification is drawn up on which to proceed, according to needs and booking the dates the candidates will be
interviewed for suitability.
• The first interviews are conducted by the Head of human resources for the department taking on new staff.
• After the first interviews the number of candidates is cut to three.
• The second interview is then carried out at which the Managing Director is also present.
G4-EC6
• At the end of the selection the results are given to the new employee and all the other people involved in the
selection procedure.
G4-11
In 2017 no senior managers were taken on to carry out strategic functions of responsibility and supervision of organizational
activities within the company.
Dellas adopts the collective bargaining agreement for the Chemical industry. All the Italian personnel are covered by this
CCNL collective bargaining agreement, save two senior managers at the Italian head office that are covered by the National
Senior management contract.
With reference to the notice to employees, as provided for in the CCNL collective bargaining agreement on any organisational
modifications or company restructuring that could affect their working relationship, it should be pointed out that Dellas
G4-LA4 conducts itself differently in relation to the following scenarios:
• organisational changes: in the event of changes and/or any new internal organisational arrangements, there is
dialogue with the personnel directly concerned with those changes;
• corporate restructuring and transformation: in the event of restructuring, which takes place following significant
organizational and production changes, the methods for informing employees are governed by the law and by
the national collective bargaining agreements. Where there changes have been made to the legal form of the
company legislative provisions are in place to provide information to the workers and the representatives of details
of the changes so as to permit them to check that the process is being conducted in the correct manner, as well as
assessing any impact on their contracts of employment .
Travel
The international nature of the company is also amply demonstrated by the transfer of staff between various non-EU
countries. Assistance on site and working alongside the customer are essential elements for the success of the company .
(►TABLE 31).
Administrati- Production Sales Techni- Total Total Total

Travel Foreign 9 6 106 20 141 150 122
Europe
Travel Foreign 59 347 83 489 592 466
outside Europe
Travel in Italy 118 26 142 157 76
Total 9 65 571 127 772 899 664
► TABLE 31 - National and international travel (year 2017)
The number of days of business travel made in 2017 was 772, with a clear majority of these outside the EU, in line
with previous years.
48 ǀ Dellas
Benefits
Dellas’ human resources are able to enjoy certain benefits (► TABLE 32). The main ones include life insurance coverage
G4-LA2 for accidents at work and for healthcare abroad in the event of travel, provided for all employees.
Numero dipendenti
Accident insurance for Italy and abroad 92
Canteen 122
Company cars 10
Transport 92
Reimbursement of medical expenses 92
DO 7
► TABLE 32 - Benefits to employees (2017)
Incentive schemes
G4-LA11
The incentive system involves the company at 360 ° and aims at enhancing and at the same time giving a better
evaluation of the role of individuals, so that everyone feels an integral part of a complex but harmonious system. The
aim is to encourage individual improvement and the persons professional development.
Dellas is well aware that having faith in individual staff means:
• constructing an ever more stimulating work environment characterised by enthusiasm, collaboration, fairness,
transparency, innovation and ideas;
• to search people for a constant evolution of their skills, thanks to feedback on results and continuous learning;
• ensuring there are financial and career rewards for those who merit it;
• Following this incentive system, all of the personnel at Dellas receive regular performance assessments and on
feedback on how their career is developing.
Training activities
Dellas has always invested its efforts in the continuous growth of its personnel and partners with the aim of fostering
individual improvement and the development of the potential of every single individual, as well as that of the company.
The company is convinced that training has an ever important role in a context in which there is a continuously growing
DMA
need for greater professional skills, abilities and specialist aptitudes. This can be seen by the number of hours of
training provided and by the number of employees involved.
The planning process for Dellas training scheme involves four main steps:
1. Identification of training requirements: this means identifying which persons should be given further training
and establishing the skills each needs to acquire by taking part in these activities. At this stage the heads of the
various offices and departments communicate to the Head of personnel and the Managing Director the needs of
its employees and partners. Among the various needs selected are those most urgent and necessary.
2. Analysis of the training offered: this stage considers the advantages of sending staff to inter-company training
activities already available on the market and/or creating company specific training initiatives.
3. Definition of a training activity plan: this phase consists in identifying:
• the economic resources that are required and can effectively be invested in,
• the staff that will attend the courses,
• the persons (from within or from outside the company) responsible for running the courses,
• the objectives and contents to be addressed in the courses,
• the time needed for the realisation of the courses.
4. Measuring the results of the training activities: this concerns appraisal of how much the persons have actually
learned through the training and the utility of what they have learned in relation to the working tasks they
carry out in their employment. These assessments will also contribute to policy decisions about future needs
to address in any further training initiatives. The evaluation of results of the training is carried out through the
use of questionnaires and interviews. The evaluation of results from training is carried out through the use of
G4-LA10
questionnaires and interviews.
Dellas ǀ 49
Health and Safety

The protection of health and safety in the workplace remains a high priority for company management. The pursuit of
this objective is undertaken by adopting all the necessary measures to:
• prevent and reduce accidents and the onset of occupational diseases;
• create awareness of responsibility and liability in all areas of health and safety in the workplace;
• ensure that industrial processes are designed, implemented, managed and maintained by considering health and
safety in the workplace as a priority;
• respect the laws in force and apply state of the art solutions in the field of health and safety in the workplace,
thanks to continuous and constant updating;
• cooperating with local health bodies, the fire department, the senior safety at work institute, the trades unions,
the supervisory bodies and those charged with the task of ensuring compliance with current regulations in this
area.
Furthermore, the company management undertakes to:

• periodically review the Policy and System of Health and Safety Management in the workplace, to ensure that they
DMA
are adequate for the company’s activities;
• disseminate this policy among the stakeholders, since the pursuit of ever better levels of health and safety in the
workplace is a key factor for successful economic development and the social role of the company.
Handling fine metal powers that are potentially carcinogenic is the main risk the workers are subject to. The continuous
improvement the company requires led to the introduction in the year 2017 of further plant and procedural systems that
follow on from the work carried out in previous years, all in strict collaboration with the supervisory body of the Veneto
Regional Authority.
In particular some of the plant for the gathering of powder has been modernised as well as the completion of detailed
scientific analysis of what work should be done in relation to contamination of the areas. From this analysis more evidence
was obtained as to which actions to take in detail, especially procedural, so as to further limit the presence of powder in
the air and any consequential risk to the health of the workers.
Certainly, the outcome of these interventions can only be measured in the medium to long period but the first health
tests carried out on the workers in November 2017 by a competent physician have confirmed the efficacy of the work
carried out in the course of the year.
Accidents and absences

In 2017 the number of injuries was quite low, in line with 2016.
Although in many cases the analysis of accidents has shown that they are difficult to predict, it has been considered
appropriate to increase safeguards by way of personal protection devices to a further group of operations and activities.
Here below are the figures relating to accidents for the year 2017. (► TABLE 33)
G4-LA6
Year Accidents Total Hours Frequency index (No. of Severity index (days absence injury
that days of not accidents / hours worked) / hours worked) * 100
occurred absence worked * 100
2017 3 47 376 0.00213 0.03300
2016 2 20 164 0.00100 0.08200
2015 3 11 88 0.00148 0.04348
► TABLE 33 - Accidents at work
Number of hours 2017 2016 2015

Illness 3,604 3,762 1,857
G4-LA7 Paid leave and paid absence 416 969 583
Maternity and paternity leave 1,124 1,314 1,104
Injury 376 164 88
Unpaid leave and absences 1,525 1,003 8
Total 7,045 7,212 3,639
► TABLE 34 - Justifications and hours of absence

50 ǀ Dellas
Financial
capital Natural capital
Manufactured
capital
environment
Dellas considers the environment as a priority stakeholder. Because of this fundamental conviction, each year the
Social and company puts into effect a series of strategies and actions aimed at minimising its own impact on the environmental and
its geographical area, mainly by way of:
• an efficient policy aimed at overall improvement and saving energy;
Intellectual
capital • careful management and differentiation of production waste and scrap
Human
capital
Energy Consumption and Rationalization
In 2011, Dellas launched an energy saving and improvement program which, starting from an initial energy audit, has
Natural gone on to activate a series of measures to increase energy efficiency.
capital
No investments have been made directed at plants for the production of renewable energy but measures have been
adopted to reduce energy consumption and consequently the C02 Equivalent (which precisely measures the Global
Warming Potential of greenhouse gases, i.e. their heating potential).
Among the measures adopted in the three years 2011-2013 the following are of particular importance:
DMA • the improvement in terms of energy efficiency of the air compressors present in various production plants;
• the recovery of the thermal energy produced by the sintering and welding plant and its reuse for heating working
environments;
• the raising of staff awareness of the need for energy savings and the establishment of a working group for the
planning and the implementation of specific actions aimed at continuous improvement.
Among the
measures adopted, In 2015 a specific energy diagnosis was made to promote cost-efficiency and the best use of the energies available. The
the recovery results of the initiatives illustrated, in quantitative terms, are evident.
of the thermal Tables 35 and 36 indicate a further improvement in 2017.
energy produced A measure of the improvement of energy efficiency is given by the Electricity Consumption, which is shown below in
by the sintering terms of equivalent kWh and C02 .
and welding plant
and its reuse for
heating of working kWh CO2 Equivalent (ton) % change
environments
2017 3,048,962 1,388.87 (0.67%)
2016 3,069,378 1,398.17 (6.19%)
2015 3,102,861 1,490.43 (1.33%)
G4-EN3 G4-EN6
► TABLE 35 - Consumption and saving of electricity
G4-EN15 G4-EN19
Another fundamental variable in the field of energy efficiency is given by the consumption of diesel oil for the heating of
work environments. The purchase of Diesel was carried out in minimum quantities, as a reserve in case of interruption
of the heating system with recovery of thermal energy of the sintering and welding plant. This system, in the course of
2017, guaranteed 90% of the actual consumption required for heating. In the absence of this heat recovery the company
would have had to buy fuel for quantities equal to 10 times the current level.
Consumption Actual consumption Theoretical consumption without CO2 Eq.

Actual in CO2 Eq. (Ton) recovery of heat in CO2 Eq. (Ton) Saving (ton)
2017 15,000 39.18 391.83 352.65
2016 28,000 73.14 731.42 724.11
2015 19,000 49.53 495.25 445.72
► TABLE 36 - Fuel consumption and savings - data referring to the Dellas Spa company
The setting up of the dedicated work group allows for the situation to be kept under control and, above all, for planning
actions for continuous improvement in this field as well.
Dellas ǀ 51
Rationalization of water use

Dellas considers water resources important to its business: in 2016 it consumed 4,103 cubic metres of water, as illustrated
below. The water comes from the mains supply and is supplied by local multiutilities. In 2017. Dellas decreased its total
water consumption: water utilization decreased significantly at the Chinese subsidiary, while it remained substantially
unchanged in the other companies of the Group.
DMA G4-EN8 Consumption in m3 % change

2017 2,988 (27,00)
2016 4,103 13.98
2015 3,600 (3.41)
► TABLE 37 - Fuel consumption and savings - data referring to Dellas Spa
Produzione e Gestione dei Rifiuti

DMA
Furthermore, Dellas implements waste separation in all operating sites, making a distinction between hazardous and
non-hazardous waste (► TABLE 38). Dellas manages waste in line with current legislation, implementing a series of
company procedures aimed at promoting the differentiation of waste.
G4-EN23 G4-EN25 All hazardous and non-hazardous waste is assigned according to the provisions of the Consolidated Environmental Law
(Ref.: Legislative Decree No. 152 of 03.04.06 and subsequent amendments and additions).
Waste produced (in Kg) 2017 2016 2015

Exhausted nitric acid 11,420 3,832 1,130
Absorbent and filter materials 672 842 321
Empty spray cans 201 180 129
Paper and cardboard 6,560 3,600 2,720
Waste waxes and fats 810 755 485
Sludge from smoothing and 29,020 44,640 44,880
polishing
Running in sludge 7,060 12,080 11,260
Iron and steel 15,160 20,100
Paper packaging containing 1,828 976
dangerous substances
Wooden packaging 2,980 5,280 4,240
Packaging in mixed materials 18,020 17,400 15,620
Scrap abrasive material 3,940 5,320 7,160
Used oil 1,000 1,100 660
Plastic refuse 7,270 8,340 8,140
Waste aqueous solution 24,540 23,740 25,860
Aqueous washing solutions 20,180 18,740 18,540
Total 150,661 166,925 141,145
► TABLE 38 - Waste products - data referring to Dellas Spa
52 ǀ Dellas
Outlook
The Dellas Group expects a net recovery in business volume for the 2018 financial year, returning to levels equal to or
higher than those of 2016. This trend is evident from the analysis of performance for the first quarter of 2018, which
recorded a 15% increase in consolidated turnover, compared to the same period of the previous year, driven by the
recovery of Dellas Spa’s turnover and by further growth of subsidiaries.
The financial year 2018 will also see a net improvement in profitability, since it does not forecast contingent liabilities for
extraordinary and non-recurring events, which in the year 2017 led to a largely negative net result.
We therefore believe that by the end of the current year we can achieve all the objectives for improvement that have
been provided for within each category of capital, as reported in TABLE 39.
CAPITAL STAKEHOLDER OBJECTIVES

INTERESTED FOR IMPROVEMENT
u Shareholders u Increase in the volume of

u Banks business in the Subsidiaries
u Public administration u Increase in volume of
turnover in the sectors of
artificial stone and ceramics
Financial
capital
u Shareholders u Increase production assets

u Banks and financial holdings
Manufactured
capital
u Clients u Improvement in average

u Suppliers time of consignment
u Community u Consolidation of
relationships with “historical”
suppliers and sharing of
Social and
u Clients u Development of two

projects aimed at the
technological improvement
of products, as well as
expanding and renewing the
offer to customers
Intellectual
capital
u Human resources u Training activity in program

of managerial development
u Communicate to
employees the company
approach to sustainability
with the implementation of
Human the Code of Ethics
capital
u Environment u Increasing accountability

of the company, in the
implementation of processes
and products, with regard to
the consumption of energy
Natural resources and disposal of
waste, in order to minimize
capital environmental impact.
u Electricity purchased at 100%
from renewable sources
► TABLE 39 - Objectives for improvement
DANIELE FERRARI
Lugo di Grezzana (VR), 09/04/2018 Dellas ǀ 53

5
METHODOLOGICAL
NOTE
54 ǀ Dellas
5 METHODOLOGICAL NOTES
Methodological note
Integrated reporting
The relationship between the business, the investors and the company is increasingly a subject of attention attention.
G4-28
Companies are generally required to produce short term financial reporting focussing on the past, which means it is
difficult to explain the situation of the company in a holistic manner.
Integrated The result is that, despite the increasing costs of compliance, companies are not able to provide investors with
reporting <IR> is the right information they need, and capital markets are affected by short-term logic and an excessive attention to
a strategic and financial information. There is, however, a more advanced approach based on a good dialogue between companies
future-oriented and investors: Integrated reporting. This approach has been adopted by many companies around the world and
communication that contributes to the financial stability and sustainable development of the business.
describes the way in Integrated reporting <IR> , or Integrated Reporting, is a strategic and future-oriented communication, which describes
which organizations the way in which organizations affect the different resources and capital by creating value over time.
affect the different The International <IR> Framework (1), published by IIRC, identifies 6 main categories of capital:
resources and capital
to create value over
time
SUSTAINABILITY REPORTING
GRI-G4 Sustainability
Capitale naturale Reporting Guidelines
Capitale relazionale
e sociale www.globalreporting.org (2)
WORLD INTELLECTUAL CAPITAL

Capitale
INITIATIVE (WICI)
intelletuale WICI’s Intangibles
International <IR> Framework Reporting
integratedreporting.org (1) Framework
Capitale umano www.wici-global.com (3)
FINANCIAL REPORTING
Capitale
finanziario Principi contabili
italiani emanati da OIC
Capitale
produttivo
► TABLE 1 - Framework, principles and metrics
Integrated Reporting helps organizations think holistically about their strategy, in the context of the business impact on
different capitals, to make more informed decisions and manage the main risks, exploiting the opportunities.
In this way the orientation towards long-term objectives is promoted and the relationship of trust with investors is
strengthened.
GRI and <IR>, together for a broader vision of company performance

The 2017 report The sustainability disclosure following the GRI International Guidelines (2), offers a broader view of a company’s
is an essential step performance compared to financial reporting alone. When this analysis of sustainability is incorporated into integrated
towards achieving reporting, it contributes substantially to the analysis of value creation through the six capitals. Reporting, therefore,
a complex narrative has an increased significance when using both the GRI and International standards <IR> Framework. ESG energy, social
that is not limited to and governance analysis carried out following the GRI global setter standard indications contributes as part of the
just reproducing the Integrated reporting to build up a holistic view of company performance.
financial and equity
positions but
illustrates the
prospects of the
company’s capacity
to create value
Dellas ǀ 55
• First structured notification of the CSR according the first guidelines of the
Report European Commission (4)
• Breakdown of Business Model, Governance, Risks and Opportunities
2011 • Determination of the areas of social impact
• Adoption of «Principles of drafting the social report» Established in 2001 by the GBS (5)
• Widening the scope of reporting for the whole Group
Report • Introduction of the economic, financial, social and environmental profiling of
management, following the draft framework published by the International Integrated
2012 Reporting Council (1)
• Following the Framework of the International Integrated Reporting Council (1), having
carried out integration between the economic, financial, social and environmental
Report profiles of the company management, with the inclusion of specific connections
between the different sections of the Report
G4-17
2013 • Performance indicators of the areas of social impact
• Listening and Dialogue channels with Stakeholders, and Improvement Objectives
• Adoption of the GRI-G4 reporting standard (2)

G4-22
• Stakeholder engagement for materiality analysis
Report • Communication to the employees of the company approach to sustainability through the
implementation of a Code of Ethics
G4-23 2014 • Breakdown of KPIs in reference to corporate capital specified in IIRC Framework (1)
• Improvements to the Connectivity of information within the report and between the
report and website in response to the corresponding guidelines of the IIRC Framework
Report • Reorganized and added more detail to the section related to theBusiness Model, most
connected to the concept of Value Creation
2015 • Online survey on information and contents of the Annual Report
• Inclusion of the accounting tables for the Consolidated Financial Statements.
• Analysis of intangibles to better represent the human, intellectual and Relational capital
based on the WICI intangible Reporting Framework (3)
Report • The section concerning the Business Model and Value and CreationProcess is developed
2016 in-depth through explanation of the main impacts.
• Review of the Consolidated Financial Statements.
• Explanation of performance according to capital category

Report • Better definition of objectives for improvement
• Definition of outlook
2017
► TABLE 2 - Evolution of Corporate Reporting at Dellas
INTRODUCING ˂IR˃
56 ǀ Dellas https://youtu.be/EFm0sKeBLh0
Evolution of Corporate Reporting at Dellas

This Report, relating to the financial year 2017, constitutes an essential step (► TABLE 2) of the Dellas Group towards reporting
on its financial and non-financial results, to achieve an overall narration on the company, able to capture the factors described
above, not limited to communicate the financial position and performance achieved but illustrating the prospective capacity to
create value in a sustainable and lasting way.
With the 2011 Report, the company made its first structured communication of Corporate Social Responsibility,
according to the first Guidelines of the European Commission (4); this document went well beyond the minimal
requirements for contents of an economic, patrimonial and financial nature imposed by the civil law and by the
national accounting principles for the financial statements, to embrace and illustrate the social and environmental
profiles of the management as well.
From 2012, with the publication of the relative Annual Report, there was even more effort put in to broadening the
scope of the account rendering of the company.
A picture of the Dellas Group was given in its entirety, involving in the account rendering the main economic, financial,
social and environmental aspects of management for all the entities over which Dellas Spa exercises significant
influence, that is to say the subsidiaries.
Furthermore the “Principles for the drafting of the social report “ ruled in 2001 by the GBS were adopted (5).
Starting from the 2013 edition, keeping in mind the reference literature mainly attributable to the International <IR>
Framework, appropriate emphasis has also been given in this document to:
• highlighting of the main elements of integration between the economic-financial, social and environmental profiles
of management, through the insertion of specific references and links between the various sections of the Report
concerning these aspects;
• information about the main content:
- Presentation of the organization and the external environment
- Governance and business model
- Risks and opportunities
- Strategy and allocation of resources
- Performance
G4-18 - Outlook
In 2014 the company introduced the following innovations:
• the use of the international standard GRI, version 4.0 (2013), with reference to account rendering of the ESG aspects,
relating to areas that do not strictly relate to management accounting: this standard has allowed Dellas to identify and
report new and more specific indicators related to the issues concerning governance and to the social and environmental
performance of the company..
In the 2015 edition, the company introduced the following innovations:
• application of indications regarding the communication of the use of the various company “capitals”, as indicated by the
International <IR> Framework;
• reorganization of the section relating to the Business Model, most connected to the concept of Value Creation.
With the 2016 Report, the company continued its dissemination of information referring to the reporting aspects of the ESG,
within the ‘International <IR> Framework. This had already been carried out with the previous annual reports, through the use
of the international standard GRI, version 4.0 (2013).
Furthermore, in order to better represent Human, Intellectual and Relational Capital, the Company has further investigated
some aspects suggested by the WICI intangibles Reporting Framework (3), as recently published. This document represents
an important international initiative in the light of the growing importance of intangibles for the processes of corporate value
creation.
The 2017 edition, published on June 29, 2018, focuses on the disclosure of performance by capital category and the definition
of improvement objectives according to future prospects.
The part referring to “Corporate Social Responsibility”, was made possible, as in previous years, thanks to a gradual and targeted
involvement program for some of the most important company management figures (inclusiveness principle) that, through
planned meetings and focus groups, allowed for the identification of the relevant activities to be reported (materiality principle)
and the most significant information concerning the actions carried out by Dellas (completeness principle). In giving an account
of the contents of the Report, we tried to provide an unbiased image of Dellas’ performance, indicating both the positive and
the negative aspects (principle of balance).
In order to provide a correct representation of the company’s performance, exposure to qualitative and quantifiable information
has been given priority, avoiding as far as possible the use of estimates, which, if present, have been reported, indicating the
sources and methodologies of calculation used (principle of accuracy ).
There are no significant changes in aims or material aspects have been reported with respect to the previous Annual Previous
report.
The section of the present Annual Report on “Corporate Social Responsibility” is in accordance” with the Sustainability Reporting
Guidelines of the Global Reporting Initiative (GRI-G4), according to the “Core” option.
Dellas ǀ 57
Business report of the consolidated financial statements

G4-29 Sections 1, 2, 3, 4, 5 of the Integrated Annual Report 2017, drawn up on the basis of the principles contained in the
International Framework published by the International Integrated Reporting Council (IIRC), represent the Business
Report on the management of the consolidated financial statements as at 31/12/2017.
G4-30 The Integrated Annual Report was drafted on April 9, 2018, submitted to the Board of Directors of Dellas for its
approval on June 27, 2018 and was published on June 29, 2018.
For more information:
G4-31
Dott. Marco Pasquotti (CFO)
TEL: +39 045 8801522
MAIL: marco.pasquotti@dellas.it
(1) INTERNATIONAL <IR> FRAMEWORK - December 2013 - International Integrated Reporting Council - www.theiirc.org/
internationalir- framework. The International Integrated Reporting Council (IIRC) is a global organisation made up of regulators,
investors, companies, governmental entities, professionals working in the field of accounting and NGOs, with the aim of providing
guidelines so that notifications on the creation of value is the next step in the evolution of corporate reporting.
(2) The Guidelines promoted by the Global Reporting Initiative (GRI) represent a standard that is multi-stakeholder, international, and
long term, in relation to the development and the global diffusion of the Guidelines for Sustainability Reports. www.globalreporting.
org/reporting/g4/
(3) WICI Intangibles Reporting Framework - September 2016 - www.wici-global.com. The World Intellectual Capital/Assets Initiative
has developed a framework to improve the representation of intangibles, in a context of value creation, in direct relation to the
INTERNATIONAL <IR> FRAMEWORK..
(4) The main reference documents in the adoption of the guidelines published by the European Commission, were the following:
- European Commission, “Guide to Communicating about CSR”,
- 2009 European Commission, “Awareness-Raising Questionnaire”, 2005;
- European Commission, “CSR in Small Businesses: Good Practice Examples”, 2007;
- European Commission, “Opportunity and Responsibility”, 2007.
(5) GBS is the Study Group for the establishment of principles for the preparation of the Social Report (GBS) and was set up in 1998
58 ǀ Dellas by bodies, associations, universities, companies and certification bodies in order to support the dissemination of the Social Budget.
Tavola di correlazione GRI

G4-32
GENERAL STANDARD
DISCLOSURES
General Standard Disclosures Page number Omissions
Strategy and Analysis
G4-1 Statement about the relevance of sustainability to the 7 Non applicable
organization and the organization’s strategy for addressing
sustainability.
G4-2 Description of key impacts, risks, and opportunities. 9 Non applicable
Organisational Profile
G4-3 Name of the organization. 13 Non applicable
G4-4 Primary brands, products, and services. 15 Non applicable
G4-5 The location of the organization’s headquarters. 36 Non applicable
G4-6 Number of countries where the organization operates, and 36 Non applicable
names of countries where either the organization has significant
operations or that are specifically relevant to the sustainability
topics covered in the report.
G4-7 The nature of ownership and legal form. 13, 18 Non applicable
G4-8 Markets served (including geographic breakdown, sectors 13, 35 Non applicable
served, and types of customers and beneficiaries).
G4-9 The scale of the organization. 9, 13, 35 Non applicable
G4-10 The total number of employees by employment contract 44 Non applicable
and gender
G4-11 The percentage of total employees covered 48 Non applicable
by collective bargaining agreements.
G4-12 The organization’s supply chain. 38 Non applicable
G4-13 Report any significant changes during the reporting period 18 Non applicable
regarding the organization’s size, structure, ownership, or its
supply chain, during the reporting period
G4-14 Whether and how the precautionary approach or DELLAS Spa in the Non applicable
principle is addressed by the organization. evaluation and
management of the
risks inherent to its
own activities, adopts a
precautionary approach.
G4-15 Economic, environmental and social charters, principles, At this time DELLAS Spa Non applicable
or other initiatives to which the organization subscribes or which has not underwritten
it endorses. charters of values or
external principle
G4-16 List memberships of associations (such as industry associations) 21 Non applicable
and national or international advocacy
Identified Material Aspects and Boundaries
G4-17 All entities included in the organization’s consolidated 56 Non applicable
financial statements or equivalent documents.
G4-18 Process for defining the report content 25, 57 Non applicable
G4-19 Material Aspects identified in the process 25 Non applicable
for defining report content.
G4-20 Aspect Boundary within the organization 28 Non applicable
G4-21 The Aspect Boundary outside the organization. 28 Non applicable
G4-22 Report the effect of any restatements of information 56 Non applicable
provided in previous reports, and the reasons
Dellas ǀ 59
G4-23 Significant changes from previous reporting periods in the 56 Non applicable
Scope and Aspect Boundaries
Stakeholder engagement
G4-24 Stakeholder groups engaged by the organization 25 Non applicable
G4-25 Basis for identification and selection of stakeholders with 25 Non applicable
whom to engage
G4-26 Approach to stakeholder engagement 9 Non applicable
G4-27 Key topics and concerns that have been 9 Non applicable
raised through stakeholder engagement
Report Profile
G4-28 Reporting period for information provided 55 Non applicable
G4-29 Date of publication of previous report 58 Non applicable
G4-30 Reporting cycle 58 Non applicable
G4-31 Contact point and addresses for questions regarding the 58 Non applicable
report or its contents
G4-32 Explanatory table of report contents 59 Non applicable
G4-33 Organization’s policy and current practice with regard to The report on Non applicable
seeking external assurance for the report Corporate Social
Responsibility was not
subject to external
assurance
G4-34 Governance structure and its composition 19 Non applicable
G4-38 Composition of the highest governance 19
body and its committees
G4-39 Report whether the Chair of the highest governance body 19
is also an executive officer
G4-40 The nomination and selection processes for the highest 19
governance body and its committees
G4-42 Senior executives’ roles in the highest governance body 19
G4-43 Measures taken to develop and enhance the highest 19
governance body’s collective knowledge of economic,
environmental and social topics.
G4-45 Role in the identification and management of economic, 19, 23
environmental and social impacts, risks, and opportunities
Ethics and Integrity

G4-56 Describe the organization’s values, principles, standards 11 Non applicable
and norms of behaviour for sustainability performance and state
of advancement in their implementation
SPECIFIC STANDARD
DISCLOSURES
Material aspects Disclosure Omissions
List of material aspects identified responding to the economic, Management
social and environmental indicators set forth in guideline G4 Approach e Indicatori
Page number or link
DMA value and economic impacts 31
G4-EC1 Economic value directly generated 32
and distributed
G4-EC4 Financial assistance received by the organization from 34
public administration
60 ǀ Dellas
G4-EC6 Report the percentage of senior management living in 48

the local community
G4-EC7 Development and impact of infrastructure investments 34, 39
and services supported mainly for public utility
G4-EC9 Percentage of the procurement budget 38
spent on local suppliers
DMA Aspect “Energy” 51
G4-EN3 Consumption of energy at the 51
organisational Headquarters
G4-EN6 Reduction in the consumption of energy 51
G4-EN7 Reductions in energy requirements of products and Not relevant
services
DMA Aspect: “Water” 52
G4-EN8 Total water withdrawal by source 52
DMA Aspect: “Emissions” 51
G4-EN15 Direct Greenhouse Gas emissions (GHG) 51
G4-EN19 Reduction of greenhouse gas (GHG) 51
DMA Aspect: “Effluents and Waste” 52
G4-EN23 Total weight of refuse by type 52
and disposal method
G4-EN25 Transported, imported, exported, 52
or treated waste deemed hazardous
DMA Aspect: “Supplier assessment in respect 38
of environmental criteria”
G4-EN32 New suppliers that were screened Aspect as yet not
using environmental criteria identified. Objective
2017/2018
G4-EN33 Noteworthy negative environmental consequences real No negative impact
and potential in the supply chain and actions taken detected
DMA Aspect: “Employment” 44
G4-LA1 Total number and rates of new employee hires and 47
employment turnover by age gender and region
DMA Aspect: Diversity and Equal Opportunities 47
G4-LA2 Benefits provided to full-time employees that are not 49
provided to temporary or part-time employees, by significant
locations of operation
G4-LA4 Minimum notice periods regarding operational changes 48
DMA Aspect: “Occupational Health and Safety” 37
G4-LA6 Type of injury and rates of injury, occupational diseases, 50
lost days, and absenteeism, and total number of work-related
fatalities, by region and by gender
G4-LA7 Workers involved in activities who have a high incidence 50
or high risk of specific diseases
DMA Aspect: “Training and Education” 49
G4-LA10 Programs for skills management 49
G4-LA11 Percentage of employees receiving 49
regular performance reviews
DMA Aspect “Diversity and equal opportunity” 47
G4-LA12 Composition of governance bodies and breakdown 20, 49
of employees per employee category according to gender, age
group, minority group membership Dellas ǀ 61
DMA Aspect “Supplier assessment 38

for labour practices”
G4-LA14 New suppliers that were screened Aspect as yet not
using labour practices criteria identified. Objective
2017/2018
G4-LA15 Significant actual and potential negative impacts for No negative impact
labour practices in the supply chain and actions taken detected
DMA Aspect “Non-discrimination” 44
G4-HR3 Total number of incidents of discrimination and 48
corrective actions taken
DMA Aspect “Supplier human rights 38
assesment”
G4-HR10 Percentage of new suppliers that were screened using Aspect as yet not
human rights criteria identified. Objective
2017/2018
G4-HR11 Significant actual and potential negative human rights No negative impact
impacts in the supply chain and actions taken detected
DMA Aspect “Local communities” 39
G4-SO1 Operations with implemented local community 39
engagement, impact assessments, and development programs
DMA Aspect “Supplier assessment for 38

impacts on society”
G4-SO2 Operation with significant actual or potential negative 39
impacts on local communities
G4-SO7 Percentage of new suppliers that were screened using 39
criteria for impacts on society
G4-SO9 Percentage of new suppliers that were screened using Aspect as yet not
criteria for impacts on society identified. Objective
2017/2018
G4-SO10 Significant actual and potential negative impacts on No negative impact
society in the supply chain and actions taken detected
DMA Aspect “Customer health and safety” 50

G4-PR1 Percentage of significant product and service 50
categories for which health and safety impacts are assessed for
improvement
G4-PR2 Total number of incidents of non-compliance with 50
regulations and voluntary codes concerning the health and
safety impacts of products and services
G4-PR5 Results of surveys measuring customer satisfaction 50

DMA Aspect “Marketing Communications” 37
G4-PR6 Sale of banned or disputed products 37
G4-PR7 Total number of incidents of non-compliance with 37
regulations and voluntary codes concerning marketing
communications, including advertising, promotion, and
sponsorship, by type of outcomes
► TABLE 3 - Table of GRI Correlations
DANIELE FERRARI
62 ǀ Dellas Lugo di Grezzana (VR), 09/04/2018 President and Chief Executive Officer (CEO)
Dellas ǀ 63
6
CONSOLIDATED
FINANCIAL
STATEMENTS
as of 31/12/2017
FINANCIAL
STATEMENT
TABLES
64 ǀ Dellas
6 CONSOLIDATED FINANCIAL STATEMENTS
Assets 31/12/2017 31/12/2016
A) Accounts receivable from shareholders in

respect of unpaid share capital (of which called up)
B) Fixed assets
I. Intangible assets
1) Start-up and expansion costs 108,400 144,533
2) Development costs 3,369,336 3,328,268
3) Industrial patent and intellectual property rights 617,727 542,649
4) Concessions, licenses, trademarks and similar right 23,390 40,891
5) Goodwill 109,986 127,837
6) Work-in-progress and advances
7) Other intangible assets
4,228,839 4,184,178
II. Tangible assets
1) Land and buildings 4,039,084 4,108,273
2) Plant and machinery 744,653 884,891
3) Industrial and commercial equipment 23,140 21,190
4) Other assets 82,010 100,855
4,888,887 5,115,209
III. Financial assets
1) Shareholdings in:
a) controlled undertakings 235,829 576,371
b) affiliated undertakings 145,000 145,000
c) controlling companies
d) undertakings under control by the controlling
companies
d - bis) other companies 32,505 33,021
413,334 754,392
2) Accounts Receivables
a) from controlled undertakings
- falling due within one year 87,912 87,912
- falling due after more than one year 1,875,250 231,133
1,963,162 319,045
b) from affiliated undertakings
- falling due within one year
- falling due after more than one year
c) from controlling companies
d) from undertakings under control by the con-
trolling companies
Dellas ǀ 65
d-bis) Other accounts receivable

1,963,162 319,045
3) Other securities
4) Derivative financial instruments
2,376,496 1,073,437
Total fixed assets 11,494,222 10,372,824
C) Current assets
I. Stock
1) Raw materials, subsidiary materials and 4,558,168 4,404,929
consumables
2) Work in process and semi-finished products 2,014,475 2,241,161
3) Work in progress on order
4) Finished products and goods 4,466,551 3,870,545
5) Advances
11,039,194 10,516,635
II. Accounts receivable
1) From customers
- falling due within one year 8,978,355 9,175,256
- falling due after more than one year 771,610 1,190,123
9,749,965 10,365,379
2) From controlled undertakings
- falling due after more than one year 1,412,519
87,143 1,525,375
3) From affiliated undertakings
- falling due within one year (55,469)
(55,469)
4) From controlling companies
- falling due within one year 101
101
5) From undertakings under control by the
controlling companies
5-bis) Tax credits

228,422 270,411
5-ter) Tax assets

854,895 309,303
66 ǀ Dellas
5-quater) Other accounts receivable

- falling due after more than one year 2,606 2,889
380,096 345,437
11,300,521 12,760,537
III. Financial assets other than fixed assets
1) Shareholdings in controlled undertakings

2) Shareholdings in affiliated undertakings
3) Shareholdings in controlling companies
3-bis) Shareholdings in undertakings under control
by the controlling companies
4) Other shareholdings
6) Other securities
IV. Cash-in-hand, cash-at-bank and cash equivalents

1) Bank and postal accounts 630,532 508,491
2) Cheques 347,631 377,455
3) Cash and cash equivalents 10,047 10,089
988,210 896,035
Total current assets 23,327,925 24,173,207
D) Accrued income and Prepayments 237,008 136,702
Total assets 35,059,155 34,682,733
Dellas ǀ 67
Liabilities 31/12/2017 31/12/2016

A) Shareholders’ equity
I. Share capital 8,000,000 8,000,000
II. Share premium reserve
III. Revaluation surplus 1,535,712 1,535,712
IV. Legal reserve 1,600,000 1,600,000
V. Reserves provided for by the articles of association
VI. Other reserves
Extraordinary reserve 7,189,081 8,044,969
Non-distributable reserve pursuant to article 2426 46,799 90,803
Reserve for translation differences from 537,987 (28,093)
consolidation of foreign companies
Consolidation reserve (79,277) (406,575)
7,694,590 7,701,104
VII. Cash flow hedge reserve
VIII. Retained earnings (loss carryovers) (755,356) (434,867)
IX. Profit (loss) for the year (1,580,512) (277,119)
X. Negative reserve for Treasury Shares
Total group shareholders’ equity 16,494,434 18,124,830

Shareholders’ equity and reserves of minority shareholders 168,402 201,115
Profit (loss) for the year of minority shareholders (14,648) (28,639)
Total shareholders’ equity of minority shareholders 153,754 172,476
Total consolidated shareholders’ equity 16,648,188 18,297,306
B) Provisions for contingent liabilities

and charges
1) Provision for pensions and similar benefits
2) Provision for taxes, including deferred taxes 43,123 67,917
4) Other provisions 2,723 8,458
Total provisions for contingent liabilities and charges 45,846 76,375
C) Employees’ leaving indemnity 463,857 480,762
D) Accounts Payables
1) Bonds
2) Convertible bonds
3) Shareholders’ loans
184,449 233,215
4) Accounts payable to banks
- falling due after more than one year 3,580,905 2,694,507
12,520,318 11,411,709
68 ǀ Dellas
5) Accounts payable to third party lenders

- falling due after more than one year 6,420 10,223
6,420 10,223
6) Advances
1,281 14,244
7) Accounts payable to suppliers
2,967,567 2,731,094
8) Accounts payable represented by debt instruments
9) Accounts payable to controlled undertakings

- falling due within one year 60,776
60,776
10) Accounts payable to affiliated undertakings
11) Accounts payable to controlling companies
- falling due within one year 703,625
- falling due after more than one year 32,632
703,625 32,632
11-bis) Accounts payable to undertakings under
control by the controlling companies
12) Tax liabilities
353,156 303,317
13) Accounts payable to social security institutions
185,526 211,405
14) Other accounts payable
713,136 690,292
Total accounts payable 17,696,254 15,638,131
E) Accrued liabilities and deferred income 205,010 190,159
Total shareholders’ equity and liabilities 35,059,155 34,682,733
Dellas ǀ 69
Profit and loss account 31/12/2017 31/12/2016

A) Revenues
1) From sales and services 16,977,151 18,431,581
2) Changes in stocks of work in process, semi-fini- (147,066) 244,810
shed and finished products
3) Changes in work in progress on order
4) Capitalised internal work in progress 234,163
5) Other revenues and proceeds with separate
indication of capital contributions:
- various 447,484 123,627
- operating grants 22,222 41,596
- capital grants (share of the financial year) 38,305 23,030
508,011 188,253
Total revenues 17,572,259 18,864,644
B) Expenses
6) Raw materials, subsidiary materials, 6,864,252 6,635,123
consumables and goods
7) Services 3,987,087 4,680,321
8) Rent/lease 145,591 143,478
9) Personnel costs
a) salaries and wages 3,044,156 3,203,545
b) social contributions 1,016,874 997,141
c) employees’ leaving indemnity 201,157 222,179
d) accruals for pension and similar benefits
e) other costs 22,093 36,210
4,284,280 4,459,075
10) Amortisation, depreciation and value adjustments
a) amortisation of intangible assets 1,185,659 1,059,244
b) depreciation of tangible assets 502,190 626,368
c) other value adjustments
d) write-down of accounts receivable recorded 114,618 37,549
among current assets and liquid assets
1,802,467 1,723,161
11) Changes in raw materials, subsidiary materials, (220,997) 261,102
12) Accruals to provisions for contingent liabilities
and charges
13) Other accruals
14) Miscellaneous running costs 2,077,115 1,079,036
Total expenses 18,939,795 18,981,296
Difference between revenues and expenses(A-B) (1,367,536) (116,652)
C) Financial income and costs

15) Income from shareholdings:
- in controlled undertakings
- in affiliated undertakings
- in controlling companies
- in undertakings under control by controlling
companies
- other income 38
38
70 ǀ Dellas 16) Other financial income:
a) from accounts receivable recorded among fixed assets

- from controlled undertakings 17,388 16,698
- from affiliated undertakings
- from controlling companies
- from undertakings under control by controlling companies
- other financial income
17,388 16,698
b) from securities registered in fixed assets that do
not constitute equity investments
c) from securities included in current assets that do
not constitute equity investments
d) other income:
- from controlled undertakings
- from undertakings under control by controlling companies 5,690
- other income 19,872
19,872 5,690
37,260 22,388
17) Interest and other financial costs:
- to non-consolidated controlled undertakings
- to affiliated undertakings
- to controlling companies
- other income 241,389 284,990
241,389 284,990
17-bis) Exchange gains and losses (231,251) 72,373

Total financial income and costs (435,342) (190,229)
D) Value adjustments of financial assets

18) Write-ups:
a) of shareholdings
b) of financial fixed assets which do not constitute
shareholdings
c) of securities recorded among current assets
which do not constitute shareholdings
d) of derivative financial instruments
19) Write downs:
a) of shareholdings
shareholdings
Total value adjustments of financial assets
Result before taxes (A-B±C±D) (1,802,878) (306,881)

20) Taxes on the income for the year: current taxes
and deferred tax assets and liabilities
Current taxes 206,555 90,194
Dellas ǀ 71
Deferred tax assets and liabilities (414,273) (91,317

(207,718) (1,123)
21) Profit (loss) for the year (1,595,160) (305,758)

Profit (loss) for the year pertaining to third parties (14,648) (28,639)
Group profit (loss) (1,580,512) (277,119)
Cash flow statement 31/12/2017 31/12/2016

A.1 Cash flow from operating activities (indirect method)
Profit (loss) for the year (1,595,160 ) (305,758)
Income taxes (207,718) (1,123)
Interest expense (interest income) 204,129 262,601
(Dividends) (37)
Total capital (gains)/losses from the disposal of assets
A.2 Adjustments in connection with non-monetary items with no

offsetting items in the net working capital
Accrual to provisions
Amortisation/depreciation of fixed assets 1,687,849 1,685,612
Write-downs of assets due to permanent value impairment 114,618 37,549
Value adj. to financial assets and liabilities generated by
derivative financial instruments with do not involve a cash flow
Other adjustments in connection with non-monetary items (156,113) (1)
Cash flow before changes in working capital 47,568 1,678,880
A.3 Changes in working capital

Decrease/(increase) of inventory (522,560) 268,789
Increase/(decrease) of accounts receivable from customers 1,998,279 282,687
Increase/(decrease) of accounts payable to suppliers 968,242 (71,355)
Decrease /(Increase) of accrued income and prepayments (100,305) (133,489)
Increase /(decrease) of accrued liabilities and deferred income 14,852 65,731
Other decreases/(increases) in working capital (491,458) (134,715)
Cash flow after changes in working capital 1,914,618 1,956,528
A.4 Other adjustments

Interest collected/(paid) (204,129) (262,601)
(Income taxes paid) (184,471 ) (90,194)
Dividends collected 37
Other adjustments 214,888 253,681
Cash flow from operating activities (A) 1,740,943 1,857,414
72 ǀ Dellas
B.1 Tangible assets

(Investments) (109,112) (603,508)
Realisation price of divestments
B.2 Intangible assets

(Investments) (1,345,205) (1,499,892)
B.3 Financial fixed assets

(Investments) (1,303,059) (464,441)
B.4 Financial assets not included among fixed assets

(Investments)
Realisation price of divestments 58
(Acquisition undertakings or business concerns not including
cash-in-hand and cash-at-bank)
Disposal undertakings or business concerns not including
cash-in-hand and cash-at-bank
Cash flow from investing activities (B) (2,757,376) (2,567,783)
C.1 Debt
Loans taken out 4,394,938 2,250,538
(Loans repaid) (3,286,329) (2,260,301)
C.2 Equity
Share capital increase
(share capital reimbursement)
Sale (purchase) of treasury shares
Dividends (and interim dividends) paid
Cash flow from financing activities (C) 1,108,609 (9,763)
Cash increase (Decrease ) (A ± B ± C) 92,176 (720,132)
1. Exchange differences in cash-at-bank, cash-in-hand

and cash equivalents
2. Cash at the beginning of the year 896,034 1,616,166
3. Cash at the end of the year 988,210 896,034
Changes in in cash-at-bank, cash-in-hand and cash equivalents 92,176 (720,132)
DANIELE FERRARI
Lugo di Grezzana (VR), 09/04/2018 Presidente e Chief Executive Officer (CEO) Dellas ǀ 73
6
CONSOLIDATED
FINANCIAL
STATEMENTS
as of 31/12/2017
NOTES TO
THE ACCOUNTS
74 ǀ Dellas
General considerations
The Dellas Group has been producing and marketing diamond tools for marble and granite, as well as for natural stone,
cement, asphalt and ceramics for over 40 years.
The companies making up the Group are Dellas Diamond Tools Suzhou Co Ltd, Dellas Istanbul MakinaSanayi Ve Ticaret
As, Dellas Spain sl, Dellas Spa Ethiopian Branch, Dellas Do Brasil Ferramentas Diamantadas Ltda, Dellas Stone Tools India
Private Limited, and other shareholdings through Cordusio Trustee Company.
Drafting principles
The consolidated financial statements consisting of the balance sheet, income statement and notes to the accounts have
been prepared in accordance with the provisions of art. 29 of the legislative decree D. Lgs. 127/91, as shown in these
notes to the accounts, prepared pursuant to art. 38 of the same decree.
Where necessary, the accounting standards established by the National Council of Chartered Accountants and Accounting
Experts have been applied and, if these are missing, the accounting standards recommended by ASB arw referred to by
Consob.
In addition to the annexes provided for by the law, reconciliation statements between the net result and the net assets
of the consolidating company are presented together with the respective values resulting from the consolidated financial
statements.
The consolidated financial statements present the figures for the previous year for comparative purposes.
The methods used for the formation and the measuring of closing balance items as of 31/12/2017 take account of the
new rules introduced in national law with Legislative Decree 139/2015 implementing EU Directive 2013/34/EU. Pursuant
to legislative decree D. Lgs. 139/2015 changes have been made to the national accounting standards (OIC).
With this note to the accounts the data and information provided for by art. 38 of the same decree are shown.
Area and consolidation methods

The consolidated financial statements of the group Dellas includes the financial statements of Dellas SpA (Parent
Company) and of the companies controlled, directly or indirectly, by majority vote at 31/12/2017.
The list of the Companies included in the consolidation area is attached to the notes to the accounts.
Excluded from the consolidation both with the integration method and with the equity method, are those companies
that, pursuant to art. 28, second paragraph of the legislative decree D.lgs. 127/91, are irrelevant for the purposes of the
true and correct representation of the equity and financial situation and the economic result of the group. The list is
attached to the notes.
There are no exclusions for heterogeneity of the activity compared to remaining companies of the Group, pursuant to art.
28, first paragraph of the legislative decree D.lgs 127/91.
There are no Companies over which joint control is exercised pursuant to art. 37 of the legislative decree D. Lgs. 127/91
for which the consolidation with the proportional method would be foreseen.
There are also no Associated companies over which the parent directly or indirectly exercises significant influence and
holds a capital of between 20% and 50%, for which the equity method would be foreseen .
The other subsidiaries excluded from consolidation pursuant to Legislative Decree D.lgs. 127/91 are valued according to
the cost method. These companies are listed in the annex, indicating the reasons for the exclusion.
For consolidation, the financial statements of the individual companies were used, prepared by the Boards of Directors
for approval, reclassified and adjusted to bring them into line with the accounting principles and presentation criteria
adopted by the Group.
For those companies that have a closing date for the year other than the reference date of the consolidated financial
statements, specific interim annual financial statements have been prepared
Consolidation criteria
The book value of shareholdings in consolidated companies is eliminated against the corresponding portion of equity.
The differences resulting from the elimination are attributed to the individual balance sheet items that justify them and
the remainder, if positive, will be recorded in an asset item called “goodwill”, unless it must be fully or partially charged
to the income statement under item B14. The amount recorded under assets is amortized over the period provided
for by the first paragraph, no. 6, of article 2426. If negative, the difference is imputed, where possible, as a deduction
from the assets recorded for values higher than their recoverable value and to liabilities recorded at a value lower than
their extinguishing value. The negative difference that remains is recorded under the item “Consolidation reserve” or
specifically “Consolidation provision for future risks and charges”, in compliance with the criterion of art. 33, paragraph
3, of the legislative decree D. Lgs. 127/91.
The provision is used in subsequent years to reflect the assumptions, made at the time of purchase, of its estimated
worth. The portions of shareholders’ equity pertaining to minority shareholders are recorded in the specific item in the
balance sheet. The portion of the result pertaining to third parties is shown separately in the income statement.
The balance sheet and income statements between the companies included in the consolidation area are totally
eliminated.
Gains and losses arising from transactions between consolidated companies, which are not carried out with transactions
with third parties, are eliminated. Dellas ǀ 75
In the pre-consolidation phase the items exclusively relevant to tax have been eliminated and the related deferred taxes
have been set aside.
The conversion of the budget of the foreign subsidiaries and associated companies was carried out using the spot
exchange rate at the balance sheet date for assets and liabilities, the average exchange rate for the period for income
statement items. The net effect of the translation of the financial statements of the investee company into the currency
of account is recorded in the “Reserve for translation differences”.
For the conversion of the financial statements expressed in foreign currency, the rates indicated in the following table
have been applied
Valuta Cambio
al 31/12/2017 medio annuo

CNY - Chinese Renminbi (yuan) 7.8044 7.35222
TRY - Lira turca 4.5464 3.34325
Evaluation criteria
The criteria used in the formation of the consolidated financial statements at 31/12/2017 are those used in the financial
statements of the parent company that draws up the consolidated financial statements and do not deviate from the same
used for the formation of the consolidated financial statements of the previous year, particularly in the valuations and
continuity of the same principles.
The drafting of the balance entries was based on general criteria of prudence and competence, in the expectation that
the business continues its activities.
The recognition and presentation of the balance sheet items was made taking into account the substance of the
transaction or contract.
In particular, the drafting principles adopted in the preparation of the financial statements were as follows.
Fixed assets
Intangibles
These are recorded at historic purchase cost and shown net of write-downs made during the financial years and attributed
directly to the individual items.
The costs of development with multi-year utility have been recorded in assets with the consent of the Board of Statutory
Auditors. Start-up and expansion costs are written down over a period of no more than five years; development costs are
amortized according to their useful life: in exceptional cases where it is not possible to reliably estimate their useful life,
they are written down over a period of no more than five years.
Improvements to third-party assets are amortized at rates that depend on the duration of the contract.
If, regardless of the depreciation already recorded, there is a permanent loss in value, the asset is correspondingly written
down. If the requirements for the write-down no longer apply in subsequent financial years, the original value net of
accumulated depreciation is restored.
Materials
These are registered at purchase cost and adjusted by the corresponding depreciation funds.
The value to be recorded in the accounts took into account the secondary charges and costs incurred for the use of the
asset, leading to a reduction in the cost of trading and cash discounts of significant amounts.
The amortization quotas, charged to the income statement, have been calculated according to their anticipated use, the
destination and the economic-technical duration of the assets, based on the criterion of its residual possible use. This is a
criterion that we considered well represented by the following rates, which remain unchanged compared to the previous
year and halved in the year of entry into operation of the asset:
If, regardless of the depreciation already recorded, there is an impairment loss, the asset is correspondingly written
Financial lease transactions (leasing)
As envisaged by OIC 17, considering the essentially informative nature of the consolidated financial statements, financial
leasing transactions are accounted for using the financial method.
Credits
Receivables are recognized in the financial statements according to the written-down cost method, taking into account
the time factor and the estimated realizable value.
In the initial recording of receivables using the criteria of the written-down cost, the time factor is complied with by
comparing the actual interest rate with market interest rates. If the actual interest rate is significantly different from
the market interest rate, this latter is used to discount back future financial flows deriving from receivables, so as to
determine the initial value to record.
On closure for the year, the value of receivables valued at written-down cost is the current value of future financial
flows discounted at the actual interest rate. If there is a fixed contractual rate, the actual interest rate determined at first
accounting is not recalculated. If on the other hand the rate is variable and linked to market rates, the future financial
76 ǀ Dellas flows are periodically recalculated to reflect market interest rates changes, with a recalculation of actual interest rate.
The discounting-back of receivables was not made for credits with a maturity of less than 12 months as the effects are
irrelevant compared to the discounted value
Receivables recorded in the financial statements before 1st January 2016 are entered at a presumed sale value insofar
as it was decided not to use the written down cost and discounting-back method provided for in accounting standard
OIC 15.
In particular, during the year 2017, the amortized cost criterion was applied to long-term capitalized accounts
receivable from subsidiaries with maturities of more than 12 months.
The adjustment of the nominal value of receivables to their presumed realizable value is obtained through a specific
provision for doubtful accounts, taking into account the existence of long-term loss indicators. The receivables
originally collected within the year and subsequently transformed into long-term receivables have been shown in the
balance sheet under financial fixed assets.
Receivables are de-recognized from the balance sheet when the contractual rights on the cash flows deriving from
the receivable are extinguished or if all the risks inherent in the receivable subject to disposal have been transferred.
Debts
Accounted for according to written down cost, taking into account time factors.
In the initial recording of receivables with the written down cost method, the time factor is complied with by comparing
the actual interest rate with market interest rates.
On the closure for the year, the value of debts valued at cost written down is the current value of future financial flows
discounted at the actual interest rate.
Discounting-back of receivables has not been carried out for receivables falling due within 12 months since the effects are
irrelevant with respect to the non-discounted back value.
With reference to the debts recorded in the financial statements before the financial year starting 1st January 2016, these
were entered at their face value because, as provided for in accounting standard OIC 19, it was decided not to use the
written down cost and discounting-back method.
In particular among the debts with due date beyond 12 months, arising from 1st January 2016, the written down cost led
to an accounting disparity with respect to face value regarding unsecured loans from Medio Credito Centrale, resulting in
a difference in the actual interest rate compared with the market interest rates.
Accruals and pre-payments

These have been determined according to the period of actual competence.
As regards accruals and prepayments over several years, there have been checks on the conditions that determined their
original itemization, applying changes where necessary.
Stock inventories
Raw materials, ancillary materials and finished products are recorded at the lower purchase or production cost and the
realizable value inferable from market trends, applying the weighted average cost.
The cost of production includes direct costs and indirect costs incurred during production and required to bring inventories
into their current place and conditions.
Products still undergoing the working process are registered on the basis of costs incurred during the year.
The evaluation criteria adopted are unchanged compared to the previous year with the reasons given in the first part of
these notes to the accounts.
Shareholdings
The shareholdings, recorded under fixed assets, represent a long-term strategic investment by the company.
Interests held in subsidiaries and controlled companies and other investments, recorded under financial fixed assets, are
valued at purchase or subscription cost.
The shareholdings recorded at purchase cost have not been written down due to permanent losses in value; there were
no cases of reinstatement of value.
Provisions for risks and charges
These are set aside to cover losses or liabilities that are certain or likely, but for which at year-end were not determinable
as regards the amount or date of occurrence.
In evaluating such funds the general principles of prudence and accrual have been followed and no general risk funds
have been set up without financial justification.
The liabilities are reported in the financial statements and recorded in the provisions as deemed probable and reasonably
estimable as regards the amount of the burden.
Severance pay reserve funds (TFR)
The reserve represents the actual debt accrued to employees according to current law and contracts of employment,
considering each form of remuneration as being continuous in nature.
Dellas ǀ 77
Income taxes
Taxes are set aside according to the accrual principle; they therefore represent:
• Provisions for taxes paid or to be settled for the year, determined according to the rates and current regulations;
• the amount of deferred or prepaid taxes in relation to time differences arising or cancelled during the year;
• the adjustments to the balances of deferred taxes to take account of changes to rates.
Deferred and prepaid taxes are calculated on the temporal differences between the values of assets and liabilities
determined according to statutory criteria and the corresponding tax values.
Registration of revenues
Revenues from the sale of products are recorded at the time of the transfer of the property, which is normally at the time
of delivery or shipping.
Revenues of a financial nature and those arising from the performance of services are recorded on the basis of their time
accrual.
The revenues and income, the costs and charges and burdens in foreign exchange transactions are valued at current rate
at the date of carrying out of the transaction.
Revenues and charges relating to purchase and sale transactions with obligation for re-conveyance, including the
difference between forward price and spot price, are recorded for the accrued share in the financial year.
Conversion method for foreign currency items
Receivables and the debts originally expressed in foreign currency, recorded on the basis of the exchange rates in force on
the date in which they arose, are aligned with the exchange rates current on the date of closing of the period.
In particular, the assets and liabilities that do not amount to fixed assets as well as the financial receivables are recorded
at the exchange rate at the period end date. The profits and the losses arising from the conversion of the receivables
and the debts are respectively credited and debited to the Income Statement as item 17 b - Profits and losses on foreign
exchange transactions.
Any net profit deriving from the adjustment to year-end exchange rates of foreign currency items is a factor contributing
to the formation of the result for the year and, upon approval of the financial statements and subsequent allocation
of the result to the legal reserve, is recorded, for the part not absorbed by any loss for the year, in a non-distributable
reserve until subsequent realization .
With reference to fixed assets in foreign currencies, these are recorded at the exchange rate at the time of their purchase
or at a lower one at the end of the financial year only if the negative changes have led to a permanent loss in value of the
assets themselves.
Obligations, guarantees and potential liabilities
The undertakings, not resulting from the balance sheet, represent obligations assumed by the company towards third
parties that originate from legal transactions with certain mandatory effects but not yet performed by either party. The
category of obligations includes both those that are certain to be executed and the relative amount, as well as obligations
whose execution is certain but the relative amount is not. The amount of the obligation is the nominal value that can be
deduced from the relative documentation.
The guarantees provided by the company include both personal guarantees and collateral.
In the case of a surety provided by the company together with other guarantors (co-guarantee), the full amount of the
guarantee is given, if lower, the total amount of the guaranteed debt at the date of the financial statement is given.
78 ǀ Dellas
Analysis of changes in entries for net equity

Intangible fixed assets
The item intangible assets is made up as follows.
Description 31/12/2017 31/12/2016 Changes
Start-up and expansion costs 108,400 144,533 (36,133)

Development 3,369,336 3,328,268 41,068
Industrial patents rights 617,727 542,649 75,078
Grants, licenses, trademarks 23,390 40,891 (17,501)
Goodwill 109,986 127,837 (17,851)
Assets under construction and advances
Others
Total 4,228,839 4,184,178 44,661
Tangible fixed assets

The item tangible assets is made up as follows.
Description 31/12/2017 31/12/2016 Variazioni

Land and buildings 4,039,084 4,108,273 (69,189)
Plant and machinery 744,653 884,891 (140,238)
Industrial and commercial equipment 23,140 21,190 1,950
Miscellaneous assets 82,010 100,855 (18,845)
Assets under construction and advances
Total 4,888,887 5,115,209 (226,322)
Long term loans and investments: shareholdings

List of companies included in the consolidation with the integral method pursuant to art. 26 of the legislative decree
D. Lgs. 127/91 al 31/12/2017
Company name Town, if in Italy or Capital in Share held Balance sheet value
a foreign state euros as percentage or corresponding
receivables
DELLAS Diamond Tools Suzhou - China 645,000 77.52 500,000
SUZHOU Co Ltd
DELLAS ISTANBUL Makina Istanbul - Turkey 668,635 76.2 509,500
Sanayi ve Ticaret As
DELLAS SPAGNA SL Porrino - Spain 500,000 100 500,000
Shareholdings through Milan - Italy 386,637 100 386,637
Cordusio Trust Company For
Shares
List of other investments in subsidiaries and allied companies excluded

The following companies are excluded from consolidation both with the integration method and with the equity method,
because, pursuant to art. 28, second paragraph of the legislative decree D.lgs. 127/91, they are irrelevant for the purposes
of a true and correct representation of the equity, financial situation and the economic result of the group.
Company name Town, if in Italy or Capital in Share held Balance sheet value
a foreign state euros as percentage or corresponding
receivables
DELLAS Spa ETHIOPIAN Addis Ababa - 69,339 100 69,339
Branch Ethiopia
DELLAS do BRASIL Serra ES - Brazil 146,001 99.99 146,000
Ferramentas Diamantadas
Ltda
Dellas ǀ 79
The following companies are excluded from consolidation both with the integration method and with the equity
method, as they are subject to voluntary liquidation procedure.
Name Town, if in Italy, or Capital in Share held Balance sheet value

foreign country Euros as percentage or corresponding
receivables
DELLAS Stone Tools INDIA Tamil Nadu - India 6,032 100 6,032
Private Limited
Inventories
The items stocked at the end of the year are as follows.
Raw materials, ancillary 4,558,168 4,404,929 153,239

materials and consumables
Products in progress and 2,014,475 2,241,161 (226,686)
semi-finished products
Finished products and 4,466,551 3,870,545 596,006
goods
Advances
Total 11,039,194 10,516,635 522,559
Credits
The consolidated credit balances, after the elimination of Intra-group values, are thus divided according to the deadlines.
Description Within Over Over Total

12 months 12 months 5 years
Customer loans 8,978,355 771,610 9,749,965
Towards unconsolidated subsidiaries 87,143 87,143
Payable to allied companies
Towards parent companies
Towards companies subject to
control by the parent companies
For tax credits
For prepaid taxes 228,422 228,422
To others 854,895 854,895
Rounding off 377,490 2,606 380,096
Total 10,526,305 774,216 11,300,521
Liquid assets
The balance represents the cash in hand and the existence of funds and values at the end of the year.
Bank and post office 630,532 508,491 122,041

deposits
Cheques 347,631 377,455 (29,824)
Money and values in cash 10,047 10,089 (42)
Totale 988,210 896,035 92,175
80 ǀ Dellas
Analysis of changes in entries for net equity

Net assets
Reconciliation statements between the net result and the net assets of the consolidating
company are presented together with the respective values resulting from the
consolidated financial statements.
The group’s consolidated shareholders’ equity and its consolidated economic result at 31/12/2017 are reconciled with
those of the parent company as follows:
Statement of changes in consolidated group shareholders’ equity
Capital Reserves Conso- Conver- Profit Profit Group

lidation sion diffe- (loss) (loss) over total
reserve rences brought financial
forward year
Initial balance at 8,000,000 11,271,484 (406,575) (28,093) (434,867) (277,119) 18,124,830
01/01/2017
Changes in the
financial year:
Underwriting to
increase social capital
Shareholder capital
payments
Dividends
Losses for the year (1,580,512) (1,580,512)
Profit for the year
Exchange differences (51,184) (51,184)
deriving from
the conversion of
financial statements
expressed in foreign
currency
Other transactions (899,892) 944,562 (320,489) 277,119 1,300
Final balance at 8,000,000 10,371,592 537,987 (79,277) (755,356) (1,580,512) 16,494,434
31/12/2017

The item is composed as follows.
Provision for retirement benefits and similar obligations

Provision for taxes, including deferred payments 43,123 67,917 (24,794)
Derivatives (liabilities)
Others 2,723 8,458 (5,735)
Consolidation provision for future risks and charges
Total 45,846 76,375 (30,529)
TFR Severance payments for employees

Provision for retirement benefits and similar obligations 463,857 480,762 (16.905)
Dellas ǀ 81
Debts
Consolidated debts, after the elimination of the Intra-group values, are thus divided according to their deadlines.
Description Within 12 months Over 12 months Over 5 years Total

Bonds
Convertible bonds
Debts to shareholders for loans 184,449 184,449
Debts to banks 8,939,413 3,580,905 12,520,318
Debts to other lenders 6,420 6,420
Advances 1,281 1,281
Debts to suppliers 2,967,567 2,967,567
Debts consisting of debt securities
Debts to unconsolidated subsidiaries 60,776 60,776
Debts to allied companies
Debts to parent companies 703,625 703,625
Debts to companies subject to
control by parent companies
Tax debts 353,156 353,156
Debts to social security institutions 185,526 185,526
Sundry debts 713,136 713,136
Total 14,108,929 3,587,325 17,696,254
Analysis of income statement items

Revenues by category of activity
Product sales 16,977,151 18,431,581 (1,454,430)

Others 508,011 188,253 319,758
Total 17,528,262 18,662,569 (1,134,307)
Revenues by geographical area

The item Product sales is composed as follows.
Area Sales
Africa 1,813,088
America 1,597,022
Asia 3,769,663
Europe 9,797,378
Total 16,977,151
82 ǀ Dellas
Production costs
Raw materials, auxiliaries and goods 6,864,252 6,635,123 229,129

Services 3,987,087 4,680,321 8693,234)
Third party property leasing charges 145,591 143,478 2,113
Wages and payrolls 3,044,156 3,203,545 (159,389)
Social security charges 1,016,874 997,141 19,733
Severance payments funds 201,157 222,179 (21,022)
Retirement benefits and similar
Misc. personnel costs 22,093 36,210 (14,117)
Depreciation of intangible fixed assets 1,185,659 1,059,244 126,415
Depreciation on tangible fixed assets 502,190 626,368 (124,178)
Other write-downs of fixed assets
Devaluations of current receivables 114,618 37,549 77,069
Change in inventories of raw material (220,997) 261,102 (482,099)
Provision for risks
Other provisions
Miscellaneous management expenses 2,077,115 1,079,036 998,079
Total 18,939,795 18,981,296 (41,501)
Interest and miscellaneous financial charges


From unconsolidated subsidiaries
From allied companies
From Parent companies
Others 241,389 284,990 (43,601)
From companies subject to control by the parent companies
Total 241,389 284,990 (43,601)
Current taxes on income for the year

Current taxes: 206,555 90,194 116,361
Deferred (prepaid) taxes (414,273) (91,317) (322,956)
Total (207,718) (1,123) (206,595)
Deferred / prepaid tax

The deferred taxes have been calculated according to the total allocation method taking into account the accumulated
amount of all time differences on the basis of the actual rate for the last financial year.
Prepaid taxes have been recorded insofar as there is a reasonable certainty of the existence of a taxable income not
less than the amount of the differences that will be wiped out in the financial year in which the time differences will
fall.
Dellas ǀ 83
Other information
Information related to fair value of derivative financial instruments
Here below fair value is indicated together with information on the extent and nature of each category of derivative
effected by the company broken down by class, taking into consideration such matters as their characteristics and
purpose of their use.
Derivatives used to hedge cash flows:

Contract type: IR SWAP
Negotiation date: 15/11/2017
Expiry date: 11/30/2022
Notional: € 750,000
Mark-to-Market: € (4,963,61)
Information on related party transactions

The important transactions made by the company with allied parties, have solely regarded raw materials, semi-finished
goods and finished products to the subsidiary companies Dellas Diamond Tools Suzhou Co Ltd, Dellas Istanbul Makina
Sanayi Ve Ticaret As, Dellas Spagna Sl, Dellas Spa Ethiopian Branch, Dellas Do Brasil Ferramentas Diamantadas Ltda,
Dellas Stone Tools India Private Limited and another shareholding through Cordusio Trustee Company.
Such transactions have been concluded under normal market conditions.
Information relating to agreements not resulting from the balance sheet
Dellas Spa (Holding) has provided guarantees, in the form of a surety, for a total of € 286,000 towards subsidiaries.
Employment data
The average number of employees is reported by categories.
Staff 31/12/2017 31/12/2016 Changes
Senior executives 5 5
Middle management 11 13 (2)
Office staff 24 25 (1)
Workers 82 81 1
Others
Total 122 124 (2)
Financial lease transactions (leasing)

The company “Other participation through Cordusio Trust Company for Shares” has n. 1 leasing contract, accounted
for with the equity method, for which the following information is provided:
duration of the leasing contract in months: 144

asset used: commercial property
cost of asset equal to € 397,950
Initial Instalment
Description Amount
Total amount of leased assets at the end of the year 482,887

Depreciation which would have been the responsibility of 30,615
the year
Adjustments and write-backs that would have been the
responsibility of the year
Current value of lease payments not expired at the end of 298,035
the financial year
Financial charges for the year based on the effective 11,044
interest rate
84 ǀ Dellas
The present consolidated financial statements, comprising the balance sheet, the income statement and the
explanatory notes, represent truthfully and correctly the balance sheet and income statement and correspond to
the accounting records of the parent company and the information transmitted by the companies included in the
consolidation.
DANIELE FERRARI
Lugo di Grezzana (VR), 09/04/2018 Chairman of the board of directors
Dellas ǀ 85
6
CONSOLIDATED
FINANCIAL
STATEMENTS
as of 31/12/2018
REPORTS
86 ǀ Dellas
DELLAS SPA
Reg. Imp 00519470173

Rea
DELLAS SPA
Headquarters in VIA PERNISA, 12 - 37023 LUGO DI GREZZANA (VR) Share capital Euro 8,000,000.00 IV
Report of the Auditor pursuant to art. 14 of the legislative decree

D. Lgs. of 27 January 2010, n.39
To the shareholders of the DELLAS SPA
I have carried out the legal audit of the attached consolidated financial statements of the company DELLAS
SPA, consisting of the balance sheet at 31/12/2017, the income statement, the financial statement for the year
ended on that date and the explanatory notes.
Judgement without change
In my judgement, the consolidated financial statements provide a true and correct representation of the
financial and patrimonial situation of the company DELLAS SPA at 31/12/2017 and of the economic result and
cash flows for the year ended on that date, in compliance with the Italian regulations that govern their drafting
criteria.
Elements on which the judgement is based
I have carried our the audit in compliance with international auditing standards (ISA Italia). My liabilities
according to these principles are further described in the section in this report on Liability of the auditor for the
audit of the consolidated financial statements. I believe I have acquired sufficient and appropriate auditing
evidence on which to base the my judgment.
Key aspects of the audit
The key aspects of the audit are those aspects that, according to my professional judgement, were most
significant in the audit of the consolidated financial statements for the year in question. I addressed myself to
these aspects in the context of the audit and in the formation of my opinion on the consolidated financial
statements as a whole; therefore I do not not express a separate judgement on these aspects.
Responsibilities of the directors and the board of statutory auditors for the consolidated financial statements
The directors are responsible for the preparation of the consolidated financial statements that provide a truthful
and correct representation in accordance with the Italian regulations governing the drafting criteria and, within
the terms established by law, for that part of the internal control they deem necessary to allow the preparation
of a consolidated financial statement that does not contain significant errors due to fraud or unintentional
behaviour or events.
The directors are responsible for assessing the Company's ability to continue operating as a going concern
and, in drafting the consolidated financial statements, for the appropriateness of utilising the assumption of
business continuity, as well as for adequate disclosure on this matter. The directors use the assumption of
business continuity in the preparation of the consolidated financial statements, unless they have assessed that
the conditions exist for the liquidation of the Company or for the interruption of the activity or have no realistic
alternatives to such choices.
The Board of Statutory Auditors is responsible for supervising, within the terms established by law, the process
of preparing the Company's financial information.
Auditor's responsibility
DELLAS SPA
My objectives are the acquisition of reasonable assurance that the consolidated financial statements as a
whole do not contain significant errors, due to fraud or unintentional behaviour or events, and the issuing of an
audit report
Report of thethat includes
Auditor myconsolidated
on the judgement. By reasonable
financial certainty
statements is intended a high degree of certainty
at 31/12/2017 Pagewhich,
1
however, does not provide the assurance that an audit carried out in accordance with international auditing
standards (ISA Italia) will always identify a significant error, if any. Errors can result from fraud or unintentional
behaviour or events and are considered significant if it can reasonably be expected that they, individually or
together, will be able to influence economic decisions taken by users on the basis of the consolidated financial
statements.
As part of the audit carried out in accordance with international auditing standards (ISA Italia) I have exercised
professional judgement and / or maintained professional scepticism throughout the duration of the audit.
Furthermore:
• I have identified and assessed the risks of material misstatement in the consolidated financial statements,
due to fraud or unintentional behaviour or events; I have defined and carried out auditing procedures Dellas ǀin
87
response to these risks; I have acquired sufficient and appropriate audit evidence on which to base my
judgement. The risk of not identifying a significant error due to fraud is higher than the risk of not identifying
a significant error deriving from unintentional behaviour or events, since fraud can imply the existence of
standards (ISA Italia) will always identify a significant error, if any. Errors can result from fraud or unintentional
behaviour or events and are considered significant if it can reasonably be expected that they, individually or
together, will be able to influence economic decisions taken by users on the basis of the consolidated financial
statements.
As part of the audit carried out in accordance with international auditing standards (ISA Italia) I have exercised
professional judgement and / or maintained professional scepticism throughout the duration of the audit.
Furthermore:
• I have identified and assessed the risks of material misstatement in the consolidated financial statements,
due to fraud or unintentional behaviour or events; I have defined and carried out auditing procedures in
response to these risks; I have acquired sufficient and appropriate audit evidence on which to base my
judgement. The risk of not identifying a significant error due to fraud is higher than the risk of not identifying
a significant error deriving from unintentional behaviour or events, since fraud can imply the existence of
collusion, falsification, intentional omission, misleading representations or forcing internal auditing;
• I have acquired an understanding of the internal control relevant for auditing purposes in order to define
audit procedures appropriate to the circumstances and not to express an opinion on the effectiveness of
the internal auditing of the Company;
• I have assessed the appropriateness of the accounting principles used and the reasonableness of
accounting estimates made by the directors, including the related disclosure;
• I have arrived at a conclusion on the appropriateness of the use by the directors of the assumption that the
company is a going concern and based on the audit evidence acquired, on the existence of significant
uncertainty regarding events or circumstances that may give rise to significant doubts about the Company's
ability to continue operating as a business. In the presence of significant uncertainty, I am obliged to draw
attention to the audit report on the related disclosures in the financial statements or, if this disclosure is
inadequate, to reflect this fact in the formulation of the my judgement. My conclusions are based on the
auditing evidence obtained up to the date of this report. However, subsequent events or circumstances
may result in the Company ceasing to operate as an ongoing concern;
• I have assessed the presentation, structure and content of the budget consolidated as a whole, including
the disclosure, and assessed if the consolidated financial statements represent the underlying operations
and events in order to provide a correct representation.
• I have communicated to those responsible for activities of governance, identified at an appropriate level as
required by ISA Italia, among other aspects, the scope and timing planned for the audit and the significant
results that emerged, including any significant deficiencies in the internal control identified in the course of
the audit.
Report on other provisions of law and regulations
Judgement of the consistency of the management report with the consolidated financial statements
The directors of the Company DELLAS SPA are responsible for the preparation of the report on the
management of the company DELLAS SPA al 31/12/2017, including its consistency with the related
consolidated budget and its compliance with the law.
In my judgement, the management report is consistent with the consolidated financial statements of the
Company DELLAS SPA at 31/12/2017 and is prepared in accordance with the law.
With reference to the declaration pursuant to art. 14, paragraph 2, lett. e) of the Legislative Decree D.Lgs.
39/2010, issued on the basis of the knowledge and understanding of the company and acquired during the
related context of the audit, I have nothing to report.
Judgement on the consistency of the management report with the consolidated financial statements
DELLAS SPA
The directors of the Company DELLAS SPA are liable for the preparation of the report on the management of
the company DELLAS SPA al 31/12/2017, including its consistency with the related consolidated budget and
its compliance with the law.
I have carried out the procedures indicated in the auditing standard (SA Italia) No. 720B in order to express a
judgement on the consistency of the management report with the consolidated financial statements of the
Report of DELLAS
company the Auditor
SPA on as
theofconsolidated
31/12/2017 financial at 31/12/2017
statementswith
and in compliance Page on
the law, as well as making a declaration 2
any significant errors.
In my judgement, the management report is consistent with the consolidated financial statements of the
Company DELLAS SPA at 31/12/2017 and is prepared in accordance with the law.
Grezzana 14/04/2018
Grezzana, 04/14/2018
The Statutory Auditor

ZANINI TOMMASO
88 ǀ Dellas
DELLAS S.p.A.
Headquarters in Via Pernisa, 12 - 37023 Lugo Di Grezzana (VR)
Share Capital Euro 8,000,000.00 iv.
Tax Code and N. Registration of Companies 00519470173
VAT number: 00519470173 - N. Rea: 176288
Report of the Board of Statutory Auditors on the

Consolidated Financial Statements as at 31/12/2017
Shareholders,
We examined the draft consolidated financial statements as of 31/12/2017 and made available to us by the Board of
Directors. The Consolidated Financial Statements have been prepared in accordance with the provisions of art. 29 of the
Decree no. 127 of 9 April 1991, and closes with a loss of Euro 1,580,512.00.
The notes and the areas of consolidation are analytically indicated in the notes to the accounts and there are no
differences compared to the previous year in relation to the criteria used for the preparation of the consolidated financial
statements.
In particular we have verified:
1. the correspondence of the data used for consolidation with those resulting from the parent company’s financial
statements, the financial statements of the companies included and the information sent by them;
2. compliance with the rules, accounting standards, methods and credits stated in the explanatory notes and their
correct application in relation to the actual situation.
We confirm the following:
• The consolidated financial statements present the figures for the previous year for comparative purposes.
• For those companies that have a closing date for the year other than the reference date of the consolidated financial
statements, specific interim annual financial statements have been prepared.
• The consolidated financial statements originated from the accounting records of the parent company and from the
information transmitted by the companies included in the consolidation in compliance with the instructions given
by the parent company.
• The information received was processed correctly by the consolidating company on the basis of the principles,
methods and criteria of consolidation stated in the explanatory notes, and compliant with the provisions of Legislative
Decree D.lgs no. 127/91 supplemented, where appropriate, by national and international accounting standards.
• The structure and content of the consolidated financial statements correspond to the specific provisions of Legislative
Decree D.lgs no. 127/91.
• The contents of the explanatory notes, in particular with regard to the information envisaged by art. No. 38 of the
legislative decree D. Lgs. 127/91, corresponds to the rules.
• The consolidated financial statements have been subjected to statutory auditing by auditor ZANINI TOMMASO who
has issued a certification report.
• No reservation or objection results from the certification report.
Grezzana 14/04/2018
The Board of Statutory Auditors
Chairman of the Board of Statutory Auditors Active Auditor Active Auditor

Claudio Bellorio Arnaldo Caprara Valentino Ederle
Dellas ǀ 89
7
DELLAS SPA
FINANCIAL
STATEMENTS
as of 31/12/2017
MANAGEMENT
REPORT
90 ǀ Dellas
7 DELLAS SPA FINANCIAL STATEMENTS
Corporate strategy and the progress of markets

Our company’s products are aimed at a market mainly composed of businesses in the stone sector, that is the mining,
cutting and processing of natural stone.
The Confindustria Directory Marmomacchine 2018, which each year produces an overall picture of the sector
worldwide, shows that the use of marble and stone has continued to increase on several national markets, albeit at
reduced rates.
In 2017,
The volume of stone extracted worldwide has reached 145 million tons with a growth of 3% compared with the
Dellas Spa,
previous year, while that of international trade amounted to 53.5 million tons, showing an increase of roughly half a
makes significant
million tons.
investments aimed at
internationalization Compared with other adjoining sectors, the financial position of the stone sector remains competitive, with a strength
and product ratio compared to ceramics and oxide porcelain. The growth of consumption of artificial stone, especially in some
development important non-European markets such as the United States should also be mentioned.
The world’s top six producers, which in order of volume are China, India, Turkey, Brazil, Iran, Italy, account for over
70% of world extraction, further confirming a tendency towards a progressive concentration of production in these
countries. In particular, China has further consolidated its production record, which nowadays represents a third of the
volume of marble and stone excavated in the world.
Italy’s final balance was negative, with exports declining by 7%, and a decrease in imports of around 9%, to be
understood in the context of renewed inertia in the internal market, conditioned by chronic stagnation in the building
sector.
Throughout 2017, Dellas Spa has continued to invest in the development of its products and in the growth of its
foreign subsidiaries: while the “core” production remains localized at its Italian headquarters, its foreign companies
are dedicated to serving and developing their respective local markets and represent a stable sales and production
presence, in addition to the customer service network for the local market in those counties in which they are
established.
Economic, capital and financial indicators

The Added Main economic data
Value of the
management is In 2017Dellas operations SpA achieved a turnover of € 12,756,453.
measured at € The EBITDA (Operating Gross Margin) is negative by € 586,485, however the Added Value of the management is
2,848,439, equal positive, by € 2,848439, equal to 22% of the Revenue.
to 22% of the The net result for the year is negative by € 2,240,514.
Turnover If the net result is recalculated without taking into account extraordinary and non-recurring events ( “Normalized Net income”),
losses decrease to € 923,379. This result of operations is mainly attributable to the decline in turnover of around 11%, compared
to the previous year, following a sharp decline suffered by the Brazilian and Turkish market during 2017. In recent months,
however, these markets have returned to 2016 levels, as shown by the turnover of Dellas SpA in the first quarter 2018.
The follow chart highlights the weighting of quota of turnover for the new product families (Wire, Polishing and cnc) compared
to diamond blade and disc products in the 2017 financial year.
The turnover
of new products
reached 32% Discs and Blades 68 %
New products 32 %
► TABLE 1 - Breakdown Revenues by Product: Net sales revenues by macro - product family
Dellas ǀ 91
The geographical distribution of revenues shows the prevalence of the quota from Europe of 53%, while the turnover
in other continents is divided into quotas that are similar one to another.
Europe 53 %
Asia 19 %
Africa 15 %
America 13 %
► TABLE 2 - Breakdown Revenues by market: Net sales from sales in 2017 by market
More economic data is described below by way of the reclassification of the income statement (in Euro):
31/12/2017 31/12/2016 Changes
Net sales revenues 12,756,453 14,293,259 (1,536,806)
Purchases net of inventory changes (5,988,142) (6,041,186) 53,044
Costs for services and for third party assets (2,705,414) (2,943,727) 238,313
Write-downs and provisions (105,418) (37,549) (67,869)
Miscellaneous operating charges (net of sundry income) (1,109,040) (569,226) (539,814)
Added Value 2,848,439 4,701,571 (1,853,132)
Cost of personnel (3,434,924) (3,602,906) 167,982
EBITDA (586,485) 1,098,665 (1,685,150)
Depreciation on tangible assets (459,173) (577,066) 117,893
Depreciation on intangible assets (1,131,435) (1,001,543) (129,892)
EBIT (2,177,093) (479,944) (1,697,149)
Financial income and charges (147,125) (164,490) 17,365
Gains and losses on foreign exchange (338,659) 64,239 (402,898)
EBT (2,662,877) (580,195) (2,082,682)
Income taxes 422,363 93,676 328,687
Net income (2,240,514) (486,519) (1,753,995)
Normalized net result (*) (923,379) 146,593 (1,069,972)
(*) “Normalized net result”: Net result excluding extraordinary and non-recurring events.
Main balance sheet data

Over the years, the constant ability to generate cash flow combined with a decisive policy on the part of the shareholders to reinvest
profits has contributed to the achievement of a solid financial position. At the end of 2017 the NFP / NE (Net Financial Position / Net
Equity) ratio shows a value of 0.59, an indicator of low dependence on external and burdensome financial sources.
21,000,000 0.80
0,46
19,000,000 0,51 0.70
0,59
17,000,000 0.60
15,000,000 0.50
NE
13,000,000 0.40
NFP/NE
11,000,000 0.30
9,000,000 0.20
7,000,000 0.10
5,000,000 0.00
►
2015 2016 2017

92 ǀ Dellas ► TABLE 3 - Net equity: in value terms and compared with the Net Financial Position
Year NE NFP NE
2017 16,551,015 (9,798,458) 0.59
2016 18,791,532 (9,606,807) 0.51
2015 19,278,047 (8,926,967) 0.46
The main balance sheet figures are described below through the reclassification of the Statement of Assets and
Liabilities according to the financial criterion (in Euro):
NFP / NE gives 31/12/2017 31/12/2016 Changes

a value of 0.59, an
indicator of low Net intangible assets 3,774,090 3,909,728 (135,638)
dependence on
Net tangible assets 4,512,616 4,862,677 (350,061)
external financial
sources Shares held and other long-term investments 4,272,633 2,469,574 1,803,059
Receivables- more than 12 months 771,610 3,252,920 (2,481,310)
Fixed capital assets 13,330,949 14,494,899 (1,163,950)
Stock inventories 8,781,420 8,893,755 (112,335)

Receivables due from customers 6,862,747 7,300,485 (437,738)
Miscellaneous receivables 1,251,686 1,721,261 (469,575)
Accruals and pre-payments 603 562 41
Short term assets for the period 16,896,456 17,916,063 (1,019,607)
Debts to suppliers 1,847,032 2,269,401 (422,369)

Advances
Tax and social security debts 399,008 429,481 (30,473)
Sundry debts 954,207 613,630 340,577
Accrued expenses and deferred income 196,263 168,493 27,770
Short term liabilities for the period 3,396,510 3,481,005 (84,495)
Net operating capital 13,499,946 14,435,058 (935,112)
TFR Severance payments for employees 438,299 463,701 (25,402)

Tax and social security debts beyond 12 months
Miscellaneous medium and long term liabilities 43,123 67,917 (24,794)
Medium to long term liabilities 481,422 531,618 (50,196)
Invested capital 26,349,473 28,398,339 (2,048,866)
Net assets 16,551,015 18,791,532 (2,240,517)

Net medium- to long-term financial position 3,580,905 2,694,507 886,398
Net short term financial position 6,217,553 6,912,300 (694,747)
Equity and net financial debt 26,349,473 28,398,339 (2,048,866)
A clearer picture of the financial soundness of the company is provided in the table below showing some margins
and balance sheet indices pertaining to medium / long-term sources and loans, compared with those relating to the
financial statements of previous years.
31/12/2017 31/12/2016 31/12/2015

Primary structure margin 7,549,553 7,549,553 8,684,349
Primary structure quotient 1.67 1.67 1.82
Secondary structure margin 10,775,678 10,775,678 12,260,057
Secondary structure quotient 1.96 1.96 2.16
Dellas ǀ 93
Main financial data

To get a better idea of the financial situation, the following table shows some balance sheet ratios, compared with
those same ratios relative to the financial statements of previous years.
31/12/2017 31/12/2016 31/12/2015

Acid Test Ratio 0.93 1.18 1.35
Current Ratio 1.80 2.02 2.26
Indebtedness 0.59 0.51 0.46
The Acid Test Ratio (Immediate Liquidity + Deferred Liquidity / Current Liabilities), equal to 0.93, denotes good liquidity,
while the Current Ratio (Current Activities / Current Liabilities), at 1.80, indicates that the value assumed by the net
working capital is adequate in relation to the amount of current payables. The level of borrowings of 0.59 in addition
to indicating limited use of third-party assets, ensures an adequate mix between internal and external sources of
financing.
The net financial position on 31/12/2017, was the following (in Euro):
31/12/2017 31/12/2016 Change
Bank deposits 446,505 143,511 302,994
Money and other cash securities 8,126 9,913 (1,787)
Liquid assets 454,631 153,424 301,207
Financial assets that do not constitute fixed assets
Bonds and convertible bonds (within 12 months)

Debts to shareholders for loans (within 12 months)
Debts due to banks(within 12 months) 6,672,184 7,065,724 (393,540)
Payables to other lenders (within 12 months)
Advances for foreign payments
Short term loan ratio
Short term financial debts 6,672,184 7,065,724 (393,540)
Net short term financial position 6,217,553 6,912,300 (694,747)
Bonds and convertible bonds (beyond 12 months)
Debts to shareholders for loans (beyond 12 months)
Debts due to banks (beyond 12 months) 3,580,905 2,694,507 886,398
Debts to other lenders (beyond 12 months)
Advances for foreign payments
Short term loan ratio
Net medium to long term financial position 3,580,905 2,694,507 886,398
Net financial position 9,798,458 9,606,807 191,651
The data shown show a Net Financial Position essentially unchanged compared to the previous year.
The following cash flow statement illustrates the evolution of the net financial position in more detail as just
calculated.
94 ǀ Dellas
31/12/2017 31/12/2016 Changes

Ebitda (586,525) 1,098,672 (1,685,197)
Depreciation and devaluation (1,590,608) (1,578,609) (11,999)
Income taxes 422,363 93,676 328,687
Depreciation on tangible fixed assets 1,131,435 1,001,543 129,892
Cash Flow (Operating Cash Flow) (164,162) 1,192,348 (1,356,510)
Changes of stock inventories of the financial year 112,335 (17,853) 130,188
Changes in trading receivables 3,701,431 442,798 3,258,633
Changes in trade debts (72,235) 192,907 (265,142)
Other changes in working capital (375,166) (163,529) (211,637)
Operating Cash Flow 3,202,203 1,646,671 1,555,532
(Cash Flow after working capital variations)
Investments in tangibles (109,110) (130,070) 20,960
Investments in intangibles (995,800) (1,355,359) 359,559
Financial investments (1,803,059) (740,831) (1,062,228)
Free Cash Flow (Cash Flow after Investments) 294,234 (579,589) 873,823
Financial income and charges (485,784) (100,251) (385,533)
Net Cash Flow (cash flow after investments) (191,550) (679,840) 488,290
NFP (Net financial position) at start of period (9,606,807) (8,926,967) (679,840)
NFP (Net financial position) at end of period (9,798,458) (9,606,807) (191,550)
The 2017
Change in
financial year
NFP as of circulating Financing NFP as of
shows an Operating 01/01/2017 Cash flow capital Investments activities 31/12/2017
Cash Flow of € -5,500,000
3,202,203
-6,000,000
3,366,365 (2,907,969)
-6,500,000
-7,000,000
-7,500,000
-8,000,000
-8,500,000
-9,000,000
(485,784)
(164,162)
-9,500,000
(9,606,807)
-10,000,000
(9,798,458)
► TABLE 4 - NFP Effect of Cash flow and Outflow on Net Financial Position
The current year shows an Operating Cash Flow of € 3,202,203, almost entirely the result of variations of Net Working
Capital.
This Operating Cash Flow has allowed for the entire financing of investments in tangible, intangible and financial assets
for a total of €2,907,969.
The Net Financial Position has gone from € 9,606,807, the value at the beginning of the period to € 9798357, the value
at the end of the period.
Investiments
During the course of the year, investments were made in the following areas:
Dellas ǀ 95
Fixed assets Investments

Costs of development 843,327
Industrial patents rights 133,891
Grants, licenses, trademarks 18,582
Intangible fixed assets 995,800
Plant and machinery 88,012
Industrial and commercial equipment 13,848
Miscellaneous assets 7,250
Tangible fixed assets 109,110
Shareholdings in associated and controlled companies 159,458
Capitalised receivables 1,643,601
Long term loans and investments 1,803,059
2,907,969
The financial year 2017 is characterized by a robust investment policy in Fixed Assets for a total of € 2,907,969
Investments have been made in associated and controlled companies and fixed assets, in addition to important
development projects that guarantee continuous product improvement, and a strong innovative impulse to the
industrial process.
Financial fixed assets 62 %

Intangible fixed assets 34 %
Tangible fixed assets 4%
► TABLE 5 - Investments 2017: Investments by category
Research and development activities

The following information is provided in accordance with Article 2428, paragraph 2 number 1.
῾῾ The company
incurred research
costs of €
111,627.28 and
Over the course of its operations in 2017, our company carried out industrial research and experimental development
activities, focusing its efforts on a number of projects considered to be particularly innovative, namely:
Project 1 - Design and development of a MOLA ECOLOGICAL milling machine dedicated to ceramic trimming processes
development costs Project 2 - Design and development of a new product dedicated to marble cutting: single and multi-threaded diamond
of € 843,327 a total wire.
of € 954,954 over
In order to carry out the above projects, the company incurred research costs of € 111,627,28 and development costs
᾽᾽
the year
of € 843,327, a total of € 954,954 over the year .
We trust that the success of these innovations can generate good results in terms of sales with a positive effect on
company profits.
Staff, Environment and Safety
During 2017 from the point of view of the personnel employed in production, we worked to increase their involvement and
awareness of their role within the organization, through obligatory meetings between managers and direct co-workers.
The production staff, traditionally not accustomed to such meetings, were called to an interview at the beginning of the year
with the department manager, At these meetings objectives were set and problems shared concerning the management
of the process, skills, schedules, etc.. This meeting was intermediately followed up by a check-up meeting, and then a final
report in which the department head gave feedback on the achievement of the objectives set.
These methods have come to represent the start of a process of change in the way the relationships between the various
figures in the company are understood, with a view to creating working relationships in line with a rapidly changing market.
Risks attendant to the workplace, in particular those connected to the handling of fine particles, has led the company to
work constantly to achieve a continuous improvement in working conditions.
96 ǀ Dellas
Relationships with subsidiaries, affiliates, parent and sister companies

The company, in relations with Dellas Diamond Tools Suzhou Co Ltd, Dellas Istanbul MakinaSanayi Ve TicaretAs, Dellas Spain
sl, Dellas Spa EthiopianBranch, Dellas Do Brasil Ferramentas Diamantadas Ltda, Dellas Stone Tools India Private Limited,
other participation through Cordusio Trust Company For Shares, has maintained relations governed by normal market
conditions and in the absence of atypical and / or unusual transactions.
Treasury shares and parent company shares
There are no treasury shares.
The company is not a subsidiary of any other company
Information relating to risks and uncertainties pursuant to art. 2428, paragraph 3, at
point 6-bis, of the Civil Code
Pursuant to art. 2428, second paragraph, n. 6-bis, Cc the following information is provided on the use of financial
instruments, as they are relevant for the purpose of assessing the financial situation and that of equity.
Dellas has embarked on a specific path of Risk Assessment, aimed at identifying, analysing and managing not only the
business and credit risk, but also that of risks inherent in the use of IT, social risk, risk of catastrophe and based on the
reputation and risks associated with the country to which the Group is subject.
In particular, four macro-categories of risk have been identified:
• STRATEGIC RISKS
• FINANCIAL RISKS
• OPERATIONAL RISKS
• HAZARD RISKS
These risks are covered not only with insurance but also managed with specific safeguard strategies.
The international socio-economic context, in which the company takes part, demands a constant awareness of various
factors, linked not only to errors or incidents within the organization, but also to macroeconomic events that fall
outside the control of the individual companies. In the face of these
eventualities, it is essential to be equipped with adequate strategies to restore business continuity, so as to mitigate
the negative effects and maintain a competitive advantage.
To this end, the company planned and carried out the following actions during the year under review.
STRATEGIC RISKS
Risks included within this class are competition, social trends and capital availability. The main actions concerned the setting
up of a short and medium term planning system, on the other hand an impulse towards relationships with investors in the
form of an overall narration on the company. This goes beyond the figures contained in the statutory financial statements,
in that it offers a clear illustration of the prospective capacity to create value in a sustainable and lasting way, by producing
key performance indicators allowing for the measurement of the evolution of the business in terms of the relationship with
customers, suppliers, employees and the community.
FINANCIAL RISKS
Within this category are included pricing risk, assert risk, currency risk and liquidity risk. A key role in this context
was the implementation of a single organizational model of the Finance area, to be applied to the parent company
and subsidiaries, favoured by the adoption in the Group of a single international Enterprise Resource Planning, which
allows the measurement and monitoring of the performance of Group companies on a monthly basis.
With specific regard to management of credit risk in the form of liquidity and from the market, the following should
be highlighted:
Credit risk
It must be assumed that the company’s financial assets have a good credit quality.
The amount of financial assets considered unlikely to be recovered represent a negligible amount compared to
the total. However, given the degree of uncertainty in the general economic situation, management has deemed it
appropriate to stipulate a credit insurance on global turnover as a credit risk hedging instrument.
Liquidity risk
IIn relation to the liquidity risk, no specific hedging instruments have been employed since this is low, guaranteed
by an effective correlation between short-term assets and short-term liabilities as illustrated by the liquidity
indices in the first part of this Report on Management.
Market risk
In relation to market risk, on the other hand, management adopted suitable instruments to hedge interest rate
risk, negotiating suitable derivative financial tools that allow the control of the main flows of finance during the
year. However, at the end of the financial year there are no derivative instruments.
Dellas ǀ 97
OPERATIONAL RISKS
By this is meant customer satisfaction, product failure, integrity and risk for reputation. Risks related to customer satisfaction
and to the factor of reputation, are managed exploiting as much as possible the investments in R & D, to create products
with an ever increasing performance
but also to make the Analysis Centre Laboratory available to customers.
HAZARD RISKS
These are actual insurance risks: third party liability, property damage and natural catastrophe. In this instance an
International Liability Program has been implemented This program has the aim of standardizing insurance coverage
and to centralize the monitoring of the insurance situation. This action responds to the need to ensure the compliance
of insurance policies, safe in the knowledge that they are adapted to the laws of the different countries, but maintaining
control of risks and the same level of insurance guarantees through the parent company. Furthermore, the aim is to
rationalize the cover, avoiding risks being covered twice or, worse, not having them covered at all, as well as being able
to keep claims under control. Specifically, in addition to stipulating a Directors & Officers Liability insurance, which is a
policy of civil liability of directors, statutory auditors and general managers, a Controlled Master Program with the so-
called con Dic/Dil/Drop Down clause has been put in place on the Primary foreign policies , ensuring standardization
of local policies with the Italian master policy, which intervenes in the event of differences in compensation limits and
conditions in law, as well as in the event of superseding excess.
Assembly Meetings
During the financial year 2017 the Shareholders’ Meeting met to pass resolutions on the following points:
• Approval of the Financial Statements ending 31/12/2016: a unanimous vote was passed.
• Approval of the interim balance on 05/11/2017, date of the death of the shareholder Gianfranco Ghilardi.
Social and secondary locations
Pursuant to art. 2428, fourth paragraph, Cc it should be noted that the activity is also carried out at the company’s
second branch at Pietrasanta (LU) in Via degli Opifici 22., as well as in the main office of Lugo di Grezzana (VR) in Via
Pernisa 12.
Subsequent events and foreseeable management evolution
Dellas foresees a net recovery of turnover for the financial year 2018, returning to levels equal to or higher than those
of the year 2016.
To confirm this trend in turnover, consider that the first quarter of 2018 registered an increase of 21%, compared to
the same period of the previous year,
This positive evolution in turnover is a consequence of the marked improvement of the economic / political situation
of the Brazilian and Turkish markets.
Allocations of the operating result

Dear Shareholders,
After having set out and interpreted the most salient administrative and managerial information concerning the year
just ended and the premises and the positive prospects for the year to come, at the same time as thanking you for the
trust granted to it, the Administrative Body invites you to:
- approve the financial statements as at 31/12/2017, which highlights a negative net result of € 2,240,514, and
the reports that accompany it;
- to approve the proposal of the Administrative Body for the use of the extraordinary reserve to cover the loss
for the year, reclassifying also the reserve excess under Art. 2426 8-bis, set aside in the previous year, of €
46,799, to the Extraordinary Reserve, freely available
DANIELE FERRARI
Lugo di Grezzana (VR), 30/03/2018 President and Chief Executive Officer (CEO)
98 ǀ Dellas
Dellas ǀ 99
7
DELLAS SPA
FINANCIAL
STATEMENTS
as of 31/12/2017
STATEMENT
OF ASSETS
AND
LIABILITIES
100 ǀ Dellas
5
7 BILANCIO
DELLAS SPA
D’ESERCIZIO
FINANCIALDI
STATEMENTS
DELLAS SPA
Assets 31/12/2017 31/12/2016
A) Receivables from shareholders for unpaid

up capital (of which called up)
B) Fixed assets
I. Intangible assets
1) Start-up and expansion costs
2) Development costs 3,135,173 3,328,268
3) Industrial patent and intellectual property rights 617,727 542,649
4) Concessions, licenses, trademarks 21,190 38,811
and similar rights
5) Goodwill
7) Other intangible assets
3,774,090 3,909,728
II.Tangible assets
1) Land and buildings 3,782,945 3,997,524
2) Plant and machinery 663,365 798,295
3) Industrial and commercial equipment 19,241 7,729
4) Other assets 47,065 59,129
4,512,616 4,862,677
III. Financial assets
1) Shareholdings in:
a) non-consolidated controlled undertakings 2,276,966 2,117,508
b) affiliated undertakings
c) controlling companies
d) undertakings under control by the controlling
companies
d - bis) other companies 32,505 33,021
2,309,471 2,150,529
2) Accounts receivable
a) from non-consolidated controlled
undertakings
- falling due after more than one year 1,875,250 231,133
1,963,162 319,045
b) from affiliated undertakings
c) from controlling companies
d) from undertakings under control by the con-
trolling companies
Dellas ǀ 101
d-bis) Other accounts receivable

1,963,162 319,045
3) Other securities
4,272,633 2,469,574
Total Fixed Assets 12,559,339 11,241,979
C) Current assets
Stock
1) Raw materials, subsidiary materials and 3,922,815 3,885,549
consumables
2) Work in process and semi-finished products 1,988,116 2,096,220
3) Works in progress on order
4) Finished products and goods 2,870,489 2,911,986
5) Advances
8,781,420 8,893,755
II, Accounts receivable
1) From customers
- falling due after more than one year 771,610 1,190,123
7,634,357 8,490,608
2) From non-consolidated controlled undertakings
- falling due after more than one year 2,062,797
100,442 2,945,622
3) From affiliated undertakings
4) From controlling companies

5) From undertakings under control by the

controlling companies
5-bis) Tax credits

130,499 236,204
5-ter) Deferred tax assets

691,149 293,580
102 ǀ Dellas
5-quater) Other accounts receivable

329,596 308,652
8,886,043 12,274,666
III.Financial assets other than fixed assets
1) Shareholdings in non-consolidated controlled

undertakings
2) Shareholdings in affiliated undertakings
3) Shareholdings in controlling companies
3-bis) Shareholdings in undertakings under control
by the controlling companies
4) Other shareholdlngs
6) Other securities
IV. Cash-in-hand, cash at bank and cash equivalents

1) Bank and postal deposits
2) Cheques 446,505 143,511
3) Cash and cash equivalents
8,126 9,913
454,631 21,321,845
Total current assets
18,122,094 21,321,845
D) Prepayments and accrued income 603 562
Total assets 30,682,036 32,564,386
Dellas ǀ 103
Liabilities 31/12/2017 31/12/2016

A) Shareholders’ equity
I. Share capital 8,000,000 8,000,000
II. Share premium reserve
III. Revaluation surplus 1,535,712 1,535,712
IV. Legal reserve 1,600,000 1,600,000
V. Reserves provided for by the articles of association
VI. Other reserves
Extraordinary reserve 7,609,018 8,051,536
Non-distributable reserve pursuant to art. 2426 46,799 90,801
Difference from rounding of Euro 2
7,655,817 8,142,339
VII. Cash flow hedge reserve
VIII. Retained earnings (loss carryovers)
IX. Profit (loss) for the year (2,240,514) (486,519)

X. Negative reserve for Treasury Shares
Total group shareholders’ equity 16,551,015 18,791,532
B) Provisions for contingent liabilities and charges

1) Provision for pensions and similar benefits
2) Provision for deferred income taxes, including 43,123 67,917
deferred tax assets
4) Other provisions
Total provisions for liabilities and charges 43,123 67,917
C) Employees’ leaving indemnity 438,299 463,701
D) Accounts Payables
1) Bonds
2) Convertible bonds
3) Shareholders’ loans
4) Accounts payable to banks

- falling due after more than one year 3,580,905 2,694,507
10,253,089 9,760,231
5) Accounts payable to third party lenders
104 ǀ Dellas
6) Advances
7) Accounts payable to suppliers

1,847,032 2,182,560
8) Accounts payable represented by debt
instruments
9) Accounts payable to non-consolidated

controlled undertakings
350,134 86,841
10) Accounts payable to affiliated undertakings
11) Accounts payable to controlling companies

11-bis) Accounts payable to undertakings under

control by the controlling companies
12) Taxes payable

229,096 229,096
13) Accounts payable to social security institutions
169,912 199,535
14) Other accounts payable

604,073 613,630
Total accounts payable 13,453,336 13,072,743
E) Accrued liabilities and deferred income 196,263 168,493
Total shareholders’ equity and liabilities 30,682,036 32,564,386
Dellas ǀ 105
Profit and loss account 31/12/2017 31/12/2016

A) Revenues
1) From sales and services 12,756,453 14,293,259
2) Changes in stocks of work in process, (149,600) 244,916
semi-finished and finished products
3) Changes in work in progress on order
4) Capitalised internal work in progress
5) Other revenues and proceeds:
- others 224,362 184,636
- contributions on trading account 60,527 64,626
284,889 249,262
Total revenues 12,891,742 14,787,437
B) Expenses
6) Raw materials, subsidiary materials, consumables 5,875,808 6,059,038
and goods
7) Services 2,623,348 2,849,205
8) Rent/lease 82,066 94,522
9) Personnel costs
a) salaries and wages 2,309,634 2,483,374
b) social contributions 910,598 888,501
c) employees’ leaving indemnity 192,599 214,771
d) accruals for pension and similar benefits
e) other costs 22,093 16,260
3,434,924 3,602,906
10) Amortisation, depreciation and value

adjustments
a) amortisation of intangible assets 1,131,435 1,001,543
b) depreciation of tangible assets 459,173 577,066
c) other value adjustments
d) write down of accounts receivable recorded 105,418 37,549
among current assets and liquid assets
1,696,026 1,616,158
11) Changes in raw materials, subsidiary materials, (37,266) 227,064
12) ) Accruals to provisions for contingent liabilities and charges
13) Other accruals
14) Miscellaneous running costs 1,393,929 818,488
Total expenses 15,068,835 15,267,381
Difference between revenues a (2,177,093) (479,944)

nd expenses (A-B)
C) Financial income and costs

15) Income from shareholdings:
- in non-consolidated controlled undertakings
- in affiliated undertakings
- in controlling companies
- in undertakings under control by controlling companies
- other income
106 ǀ Dellas
37
16) Other financial income:

a) from accounts receivable recorded among fixed assets
- from controlled undertakings 17,388 16,698
- other financial income
17,388 16,698
b) from securities recorded among fixed assets
c) from securities recorded among current assets
d) other income:
- from controlled undertakings

- other income 9,743 456
9,743 456
27,131 17,154
17) Interest and other financial costs:
- to controlled undertakings
- to affiliated undertakings
- to controlling companies
- other income 174,293 181,644
174,293 181,644
17-bis) Exchange gains and losses (338,659) 64,239
Total financial income and costs (485,784) (100,251)
D) Value adjustments of financial assets

18) Write-ups:
a) of shareholdings
shareholdings
19) Write downs:
a) of shareholdings
shareholdings
Total value adjustments of financial assets
Result before taxes (A-B±C±D±E) (2,662,877) (580,195)

20) Taxes on the income for the year: current taxes
and deferred tax assets and liabilities
a) Current taxes
b) Taxes of prior years Dellas ǀ 107
c) Deferred tax assets and liabilities

deferred taxes (24,794) (84,380)
prepaid taxes (397,569) (9,295)
(422,363) (93,676)
21) Profit (loss) for the year (2,240,514) (486,519)
Cash flow statement 31/12/2017 31/12/2016
A) Cash flows from operating activities (indirect method)

Profit (loss) for the year (2,240,515) (486,519)
Income taxes (422,363) (93,676)
Interest expense (interest income) 147,162 164,490
(Dividends) (37)
Total capital (gains)/losses from the disposal of assets 2,500
1) Cash flow from operating activities (indirect method) (2,515,753) (413,205)
Adjustments in connection with non-monetary items with no

offsetting items in the net working capital
Accrual to provisions
Amortisation/depreciation of fixed assets 1,590,607 1,578,609
Write-downs of assets due to permanent value impairment 105,418 37,549
Value adj. to financial assets and liabilities generated by
derivative financial instruments with do not involve a cash flow
Other adjustments in connection with non-monetary items (819,932) (102,971)
Total adjustments for non-monetary items that did not have a 876,093 1,513,187
counterpart in net working capital
2) Cash flow before changes in net working capital (1,639,660) 1,099,982
Changes in net working capital

Decrease/(increase) of inventory 112,335 (17,852)
Increase/(decrease) of accounts receivable from customers 4,521,361 442,799
Increase/(decrease) of accounts payable to suppliers (72,235) 192,907
Decrease /(Increase) of accrued income and prepayments (41) 240
Increase /(decrease) of accrued liabilities and deferred income 27,770 53,342
Other decreases/(increases) in working capital (352,838) 69,554
Total changes in net working capital 4,236,352 601,882
3) Cash flow before changes in net working capital 2,596,692 1,701,864
Other adjustments
Interest received / (paid) (125,078) (169,693)
(Taxes paid)
Dividends collected 37
(Use of funds)
Other receipts / (payments) 244,667 8,187
Total other adjustments 119,626 161,506
Cash flow from operating activities (A) 2,716,318 1,540,358

B) Cash flow deriving from investment activities
108 ǀ Dellas
Tangible assets
(Investments) (109,112) (130,070)

Realisation price of divestments 6,060
Intangible assets
(Investments) (995,797) (1,355,358)
Financial fixed assets
(Investments) (1,803,576) (740,830)
Realisation price of divestments 516
Financial assets not included among fixed assets
(Investments)
(Acquisition undertakings or business concerns not including
cash-in-hand and cash-at-bank)
Disposal undertakings or business concerns not including
cash-in-hand and cash-at-bank
Cash flow from investing activities (B) (2,907,969) (2,220,198)
C) Cash flow deriving from financing activities

Debt
Loans taken out 4,394,938 2,050,538
(Loans repaid) (3,902,080) (1,845,688)
Equity
Share capital increase
(share capital reimbursement)
Sale (purchase) of treasury shares
Dividends (and interim dividends) paid
Cash flow from financing activities (C) 492,858 204,850
Cash increase (Decrease ) (A ± B ± C) 301,207 (474,990)
Exchange differences in cash-at-bank, cash-in-hand

and cash equivalents
Cash at the beginning of the year

Bank and post office deposits 143,511 621,102
Cheques
Cash-in-hand and cash equivalents 9,913 7,312
Total liquidity at the beginning of the year 153,424 628,414
of which not freely usable
Total cash at the end of the year
Bank and post office deposits 446,505 143,511
Cheques
Cash-in-hand and cash equivalents 8,126 9,913
Total liquidity at the beginning of the year 454,631 153,424
of which not freely usable
Changes in in cash-at-bank, cash-in-hand and cash equivalents 301,207 (474,990)
DANIELE FERRARI
Lugo di Grezzana (VR), 30/03/2018 President and Chief Executive Officer (CEO) Dellas ǀ 109
7
DELLAS SPA
FINANCIAL
STATEMENTS
as of 31/12/2017
NOTES TO
THE ACCOUNTS
110 ǀ Dellas
General considerations
In its years of activity Dellas has come to occupy a leading position in the international market for the production and
marketing of diamond tools for marble and granite, as well as for natural stone, cement, asphalt and ceramics.
The range of products Dellas, which has become increasingly complete, is able to meet all the needs of the
sector and to guarantee a consolidated competitiveness in terms of quality and costs at an international level.
The Company is a member of a group, of which it is the controlling undertaking: exercising management and coordination
over the companies Dellas Diamond Tools Suzhou Co Ltd, Dellas Istanbul Makina Sanayi Ve Ticaret As, Dellas Spagna Sl,
Dellas Spa Ethiopian Branch, Dellas Do Brasil Ferramentas Diamantadas Ltda and Dellas Stone Tools India Private Limited,
and other holdings through Cordusio Società Fiduciaria Per Azioni.
Drafting principles
The criteria used in the formulation and evaluation of the financial statements closed at 31/12/2016 takes account of the
new rules introduced in national law by Decree. 139/2015, through which the 2013/34 / EU Directive was implemented.
Pursuant to legislative decree D. Lgs. 139/2015 changes have been made to the national accounting standards (OIC).
For comparative purposes only, the effects that would have occurred in the financial statements of the previous year have
been recalculated as if the new accounting standard had always been applied, proceeding with the adjustment of the
opening balance of Shareholders’ Equity.
For details of the adjustments and the related effects on net Shareholders Equity please refer to the table below in these
notes.
The following financial statements comply with the provisions of Articles 2423 et seq. of the Civil Code, as shown in these
notes to the accounts, which have been drawn up in accordance with Article 2427 of the Civil Code, forms an integral part
of the balance sheet for this year.
The figures in the financial statements are represented in units of EUR with a rounding up of the relative amounts. Any
differences from either rounding up or down have been indicated under the item “Rounding up-down reserve in EUR”
Included among the shareholders’ equity items, pursuant to article 2423, sixth paragraph, of the Italian Civil Code, the
explanatory notes have been drawn up in thousands of euros/ (in Euro units).
The notes to the financial statements present information on the balance sheet and income statement items in the order
in which the related items are indicated in the respective financial statements.
Evaluation criteria
(Ref. art. 2427, first paragraph, n. 1, of the civil code and OIC 12 accounting standard )
The development of the balance entries was based on general criteria of prudence and competence, in the expectation
that the business continues its activities.
The application of the principle of prudence has led to an individual assessment of the elements making up each entry
or item of assets or liabilities, to avoid offsetting losses that had to be recognized and ignore profits inasmuch as they are
unrealized.
In compliance with the accrual principle, the effect of the transactions and other events were recorded in the accounts
and attributed to the financial year to which these transactions and events refer, and not to the year in which they
numerically occurred (i.e. the collection of sums and payments).
In applying the principle of relevance, the obligations regarding the recognition, evaluation, presentation and disclosure
were not respected when their observance had irrelevant effects as far as giving a truthful and correct representation
was concerned.
Continuity in the application of the evaluation criteria over time is necessary for the purposes of comparing the company’s
financial statements from various financial years.
The recognition and presentation of the balance sheet items was made taking into account the substance of the
transaction or contract.
Exceptions
Ref. art. 2423, fifth paragraph, of the civil code)
There were no exceptional cases that made it necessary to resort to exemptions pursuant to art. 2423 paragraph 5 of the
Civil Code.
To facilitate comprehension, an annexed pro-forma economic-financial situation summary is attached to the explanatory
notes, highlighting the effects of the change in the accounting standard, since these effects are significant.
Obligations, guarantees and potential liabilities

Commitments not indicated in the balance sheet, representing obligations undertaken by company to third parties
originate from contracts with obligatory and certain effects that have not yet been performed by either of the parties. The
category of obligations includes both those that are certain to be executed and the relative amount, as well as obligations
whose execution is certain but the relative amount is not. The amount of the obligation is the nominal value that can be
deduced from the relative documentation.
Dellas ǀ 111
The guarantees provided by the company include both personal guarantees and collateral.
In the case of a surety provided by the company together with other guarantors (co-guarantee), the full amount of the
guarantee given, if lower, the total amount of the guaranteed debt at the date of the financial statement.
Explanatory note, active

Credit to shareholders for payments still due
The share capital has been fully paid up by the shareholders.
Fixed assets
Intangible fixed assets
Balance at 31/12/2017 Balance at 31/12/2016 Changes
3,774,090 3,909,728 (135,638)
These are recorded at historic purchase cost and shown net of write-downs made during the financial years and attributed
directly to the individual items.
The costs of development with multi-year utility have been recorded in assets with the consent of the Board of Statutory
Auditors. Start-up and expansion costs are written down over a period of no more than five years; development costs are
amortized according to their useful life: in exceptional cases where it is not possible to reliably estimate their useful life,
they are written down over a period of no more than five years.
The annual rate of depreciation adopted is as follows:
• start-up and expansion costs: 20%
• research and development costs: 20%
• trademarks: 10%
• patent rights: 10%
• software under license for use: 33.33%
Improvements to third-party assets are amortized at rates that depend on the duration of the contract.
Movements of intangible assets
(Ref. art. 2427, first paragraph, n. 2, C.c.)
Start-up and Costs of Industrial Grants, licen- Total intangi-
expansion development patent rights ses, trademar- ble fixed assets
costs: 20% and intellec- ks and similar
tual property rights
rights
Value at start of
financial year
Cost 13,579 5,718,888 1,856,069 343,438 7,931,974
Revaluations
Depreciation (deprecia- 13,579 2,390,620 1,313,420 304,627 4,022,246
tion reserve)
Write-downs
Balance value 3,328,268 542,649 38,811 3,909,728
Changes in the financial
year
Increase from acquisitions 843,326 133,890 18,581 995,797
Reclassifications (of the
balance value)
Decreases due to
disposals and divestiture
(of the book value)
Revaluations made
during the year
112 ǀ Dellas
Depreciation for the year 1,036,421 58,812 36,202 1,131,435
Write-downs made
during the year
Other variations
Total changes (193,095) 75,078 (17,621) (135,638)
Value at financial year
end
Cost 13,579 6,562,215 1,989,959 362,019 8,927,772
Revaluations
Depreciation (deprecia- 13,579 3,427,042 1,372,232 340,829 5,153,682
tion reserve)
Write-downs
Balance value 3,135,173 617,727 21,190 3,774,090
Previous revaluations, amortization and write-downs

(Ref. art. 2427, first paragraph, n. 2, of the civil code
No write-downs were made for permanent losses in value relative to intangible assets.
Cost breakdown for plant, expansion and development
The composition of the items cost of development is shown below, registered with the consent of the Board of Statutory
Auditors, as well as the motivations for their registration.
Costs of development
Description Value Increasesover Decreases over Depreciation Value

costs 31/12/2016 financial year financial year over financial year 31/12/2017
Costs of 3,328,268 843,327 1,036,422 3,135,173
development
Over the course of its operations in 2017, Dellas carried out industrial research and experimental development
activities, focusing its efforts on a number of projects considered to be particularly innovative, namely:
Project 1 - Design and development of a MOLA ECOLOGICAL milling machine dedicated to ceramic trimming processes
Project 2 - Design and development of a new product dedicated to marble cutting: single and multi-threaded diamond
wire
In order to carry out the above projects, the company incurred research costs of € 111,627 and development costs of
€ 843,327, a total of € 954,954 over the year .
We trust that the success of these innovations can generate results in terms of sales with a positive effect on company
profits.
In compliance with the national accounting principle No. 24 of the CNDC and CNR reviewed by the OIC and Article
2426 of the Civil Code point 5 it is believed that the above development costs have the requisites to be capitalized and
amortized within a period of no more than five years.
To this end, it should be noted that these have been charged to the assets with the consent of the Board of Statutory
Auditors.
Research costs, on the other hand, must be accounted for in the income statement under the costs of the year.
The development costs capitalized in the assets are composed of: wages, salaries and other costs related to personnel
involved in development activities; from the costs of materials and services used in development activities; from the
depreciation of buildings, plant and machinery, to the extent that such assets are used in the development activity;
from indirect costs, other than costs and general and administrative expenses relating to development activities;
from other costs, such as the amortization of patents and licenses, to the extent that such assets are used in the
development activity.
Industrial patent rights
According to the national accounting standard OIC 24, in addition to costs relating to industrial patents, this budget item
also includes licenses for use.
Tangible fixed assets

4,512,616 4,862,677 (350,061)
Dellas ǀ 113
These are registered at purchase cost and adjusted by the corresponding depreciation funds.
The value to be recorded in the accounts took into account the secondary charges and costs incurred for the use of the
asset, leading to a reduction in the cost of trading and cash discounts of significant amounts.
The amortization quotas, charged to the income statement, have been calculated according to their anticipated use,
the destination and the economic-technical duration of the assets, based on the criterion of its residual possible use, a
criterion that we considered well represented by the following rates, which remain unchanged compared to the previous
year and halved in the year of entry into operation of the asset:
• sundry and small equipment: 25%
• cars, motor-vehicles and similar: 25%
• transport vehicles: 20%
• light constructions: 10%
• industrial buildings : 3%
• generic and specific plants: 10%
• specific automatic machinery: 15.5%
• electronic machines and computers: 20%
• ordinary office machines and furniture: 12%
down. If the requirements for the write-down no longer apply in subsequent financial years, the original net value of
Flow of fixed tangibile assets
Land and Plant and Industrial Other tangible Tangible fixed Total tangible
buildings machinery and fixed assets assets in progress fixed assets
commercial and advance
equipment payments
Value at start of
financial year
Cost 7,663,854 15,719,461 392,882 1,156,360 24,932,557
Revaluations
Depreciation (de- 3,666,330 14,921,166 385,153 1,097,231 20,069,880
preciation reserve)
Write-downs
Balance value 3,997,524 798,295 7,729 59,129 4,862,677
Changes in the finan-
cial year
Increase from 88,012 13,848 7,252 109,112

acquisitions
Depreciation for 214,578 222,942 2,336 19,316 459,173
the year
Write-downs made
during the year
Other variations (1) (1)
Total changes (214,579) (134,930) 11,512 (12,064) (350,061)
Value at financial year
end
Cost 7,663,854 15,807,473 406,730 1,163,612 25,041,669
Revaluations
Depreciation (de- 3,880,909 15,144,108 387,489 1,116,547 20,529,053
preciation reserve)
Write-downs
Balance value 3,782,945 663,365 19,241 47,065 4,512,616
Based on a timely application of the OIC 16 accounting standard and following a revision of the estimates of the useful
life of the instrumental properties, in the year ending December 31, 2006, we discarded the portion of the cost related
to the surface area of the same.
Starting from the financial year 2006, the amortization quotas relating to the value of the aforementioned land have
no longer been allocated being considered, on the basis of updated social estimates, assets that are not subject to
deterioration and have an unlimited useful life.
From the financial year 2007, the depreciation reserve has been shared between land and buildings using the proportional
114 ǀ Dellas method according to the provisions of Art. 1, co. 81, L. 244/2007.
In the financial year ending 31/12 /2008, based on the Decree Law 185 of 2008 converted into Law 2 of 2009, revaluation
was carried out on the depreciable property, namely the industrial buildings and offices at the headquarters of Lugo di
Grezzana (VR) and the Pietrasanta (LU) of € 1,583,208. For the assets subject to revaluation, the criterion for adjusting
the historical cost was used. As a consequence of this revaluation, a DL 185/2008 revaluation reserve was recorded as a
contra-entry for € 1,535,712, equal to the revaluation amount net of lieu tax.
Total revaluations of tangible assets at the end of the year
(Ref. art. 2427, first paragraph, n. 2, of the civil code)
Pursuant to Article 10 law n. 72/1983, there have not been monetary revaluations or departure from civil accounting
evaluations.
It should be noted that there have been revaluations of the asset entries recorded in the financial statements pursuant
to Law 342/2000 on the basis of Decree law 185 of 2008, converted into Law 2 of 2009.
However, no discretionary or voluntary revaluations have been made and the assessments carried out have as their
upper limit the objectively determined value of the capital asset itself .
Long term loans and investments

4,272,633 2,469,574 1,803,059
Analysis of transfers of shares, other securities, derivatives and capital assets

Sharehol- Sharehol- In- sharehol- Sharehol- Total sha- Misc. Derivati-
dings in dings in vestments dings dings held res held secu- ves
subsidia- allied com- in con- held in in other rities
ries panies trolling companies companies
underta- controlled
kings by parent
companies
Value at start of
financial year
Cost 2,117,508 33,021 2,150,529
Revaluations
Write-downs
Balance 2,117,508 33,021 2,150,529
value
Changes in the
financial year
Increase 159,458 159,458

from acqui-
sitions
Decreases 516 516
due to
disposals
and
divestiture
(of the
balance
sheet value)
Total 159,458 (516) 158,942
changes
Value at finan-
cial year end
Cost 2,276,966 32,505 2,309,471
Revaluations
Write-downs
Balance 2,276,966 32,505 2,309,471
value
Dellas ǀ 115
Shareholdings
The shareholdings, recorded under fixed assets, represent a long-term strategic investment by the company.
Interests held in subsidiaries and controlled companies and other investments, recorded under financial fixed assets, are
valued at purchase or subscription cost.
The shareholdings recorded at purchase cost have not been written down due to permanent losses in value; there were
no cases of reinstatement of value.
Variations and maturity of fixed assets
Non-current Non- Non-current Non-current Non-current Total non-

receivables current receiva- receivables receivables current
from subsidia- receivables bles from due from from others receivables
ries from allied controlling companies
companies underta- controlled by
kings the parent
companies
Value at start of 319,045 319,045
financial year
Changes in the 1,644,117 1,644,117
financial year
Value at financial 1,963,162 1,963,162
year end
Value at financial 87,912 87,912
year end
Amount falling 1,875,250 1,875,250
due beyond the
financial year
With a residual
maturity of more
than 5 years
The capitalized accounts receivable from subsidiaries are shown in the financial statements according to the written
down cost.
flows are periodically recalculated to reflect market interest rates changes, with a recalculation of actual interest rate.
OIC 15.
In particular the amortized cost criterion has been applied to credits invested in subsidiaries with maturities of more than
12 months starting on 1 January 2016
116 ǀ Dellas
Details on investments held in subsidiaries

Denominazione Town, if in Italy Capital in Share held as Balance sheet value
or a foreign state euros percentage or corresponding
receivables
DELLAS Diamond Tools SUZHOU Co Ltd Suzhou - China 645,000 77.52 500,000
DELLAS ISTANBUL Makina Sanayi ve
Istanbul - Turkey 668,635 76.2 509,500
Ticaret As
Cordusio Società Fiduciaria Per
Milan - Italy 386,637 100 386,637
Azioni
DELLAS SPAGNA Sl Porrino - Spain 500,000 100 500,000
Addis Ababa -
DELLAS Spa ETHIOPIAN Branch 69,339 100 69,339
Ethiopia
DELLAS do BRASIL Ferramentas Dia-
Serra ES - Brazil 146,001 99.99 146,000
mantadas Ltda
DELLAS Stone Tools INDIA Private Tamil Nadu -
6,032 100 6,032
Limited India
Other shareholdings 159,458
Total 2,276,966
Long-term investments in subsidiaries are not recorded in the financial statements for a value greater than their fair
value.
Breakdown of the capitalized accounts receivable by geographic area
The breakdown of receivables 31/12/2017 according to geographical area is shown in the following table (article 2427,
first paragraph, no. 6, of the civil code).
Geographic area Non- CNon- Non-current Non-current Non-current Total non-

current current receiva- receivables receivables current recei-
receivables receivables bles from due from from others vables
from subsi- from allied controlling companies
diaries companies undertakings controlled by
the parent
companies
Italy
EEC 1,084,384 1,084,384
Outside the EU 878,778 878,778
Total 1,963,162 1,963,162
Analysis of the value of long term investments

Accounting value Fair value
Investments in controlling undertakings
Shareholdings held in companies controlled by parent companies
Shareholdings held in other companies 32,505
Non-current receivables from subsidiaries 1,963,162
Detail of the value of shareholdings in other companies
Descrizione Accounting value Fair value

Other investments in other companies 32,505
Total 32,505
Dellas ǀ 117
Current assets
Inventories
8,781,420 8,893,755 (112,335)
Raw materials, ancillary materials and finished products are recorded at the lower purchase or production cost and the
realizable value inferable from market trends, applying the weighted average cost.
The cost of production includes direct costs and indirect costs incurred during production and required to bring inventories
into their current place and conditions.
Products still undergoing the working process are registered on the basis of costs incurred during the year.
The evaluation criteria adopted are unchanged compared to the previous year with the reasons given in the first part of
these notes to the accounts.
Value at start of finan- Changes in the financial Value at financial year

cial year year end
Raw materials, ancillary
3,885,549 37,266 3,922,815
materials and consumables
Products in progress and semi-
2,096,220 (108,104) 1,988,116
finished products
Works in progress on order
Finished products and goods 2,911,986 (41,497) 2,870,489

Advances
Total inventories 8,893,755 (112,335) 8,781,420
The inventories are made up of 45% raw materials, 22% of semi-finished products and work in progress and 33% of
finished products and goods.
Credits recorded under current assets

8,886,043 12,274,666 (3,388,623)
Changes and maturity of receivables included in current assets

Value at Changes in Value at fi- Amount Amount With a residual
start of the financial nancial year falling due falling due maturity of
financial year end within the beyond the more than 5
year financial financial years
year year
Receivables from 8,490,608 (856,251) 7,634,357 6,862,747 771,610
customers recorded in
current assets
Receivables due from 2,945,622 (2,845,180) 100,442 100,442
subsidiaries recorded
under current assets
Tax credits recorded 236,204 (105,705) 130,499 130,499

Assets for prepaid 293,580 397,569 691,149
taxes registered in
current assets
Receivables from 308,652 20,944 329,596 329,596
customers recorded
Total receivables 12,274,666 (3,388,623) 8,886,043 7,423,284 771,610
recorded under
current assets
118 ǀ Dellas
Receivables are recognized in the financial statements according to the written-down cost method, taking into account
the time factor and the estimated realizable value.
flows are periodically recalculated to reflect changes in market interest rates, with a recalculation of actual interest rate.
OIC 15.
The adjustment of the nominal value of receivables to their presumed realizable value is obtained through a specific
provision for doubtful accounts, taking into account the existence of long-term loss indicators The receivables originally
collected within the year and subsequently transformed into long-term receivables have been shown in the balance
sheet under financial fixed assets.
Receivables are de-recognized from the balance sheet when the contractual rights on the cash flows deriving from the
receivable are extinguished or if all the risks inherent in the receivable subject to disposal have been transferred.
Breakdown of receivables recorded under current assets by geographical area

The breakdown of receivables 31/12/2017 according to geographical area is shown in the following table (article 2427,
first paragraph, no. 6, of the civil code).
Geo- Receiva- Receiva- Receiva- Receiva- Receiva- Tax credits Assets Recei- Total
graphic bles from bles due bles due bles due bles from recorded for vables recei-
area custo- from sub- from from companies under cur- prepaid from vables
mers sidiaries allied con- controlled rent assets taxes custo- recor-
recorded recorded com- trolling by parent registe- mers ded
in current in current panies under- companies red in recor- under
assets assets recor- takings recorded current ded current
ded in recor- in current assets under assets
current ded in assets. current
assets current assets
assets
Italy 2,655,409 523,441 236,204 293,580 308,652 4,017,286
EEC
Non EU 5,835,199 2,422,181 8,257,380
Total 8,490,608 2,945,622 236,204 293,580 308,652 12,274,666
The nominal value of receivables was adjusted by means of a specific provision for doubtful debts which underwent the
following movements during the year:
Description Doubtful debts fund Doubtful debts fund

under article 2426 DPR 917/1986
Civil Code
Balance at 31/12/2017 112,398 74,616
Utilisation in the period 97,398 74,616
Provisions for the year 105,418 38,302
Balance at 31/12/2017 120,418 38,302
Dellas ǀ 119
Cash in hand
454,631 153,424 301,207
Value at start of financial Changes in the financial Value at financial year

year year end
Bank and post office 143,511 302,994 446,505
deposits
Cheques
Money and other cash 9,913 (1,787) 8,126
securities
Total cash in hand 153,424 301,207 454,631
The balance represents the cash and cash equivalents and the existence of number sand values at the end of the year.
Accruals and pre-payments

603 562 41
These have been determined according to the period of actual competence.

As regards accruals and prepayments over several years, there have been checks on the conditions that determined their
original itemization, applying changes where necessary.
Refers to income and charges that are prepaid or postponed with respect to the numeric or documented entry; they
are excluded from the date of payment or collection of the corresponding income or charges common to two or more
financial years and are broken down over time.
Also for these items, the criteria adopted in the valuation and conversion of values expressed in foreign currency are
shown in the first part of these explanatory notes.
There are as of 31/12/2017, no accruals and deferrals with a duration of more than five years
Accrued earnings Prepayments Total accrued earnings and prepayments

Value at start of financial year 562 562
Changes in the financial year 41 41
Value at financial year end 603 603
Explanatory note, liabilities and shareholders’ equity

Net assets
(Ref. art. 2427, first paragraph, n. 6-bis, of the civil code)

16,551,015 18,791,532 (2,240,517)
120 ǀ Dellas
Changes in shareholders’ equity items

Value at start Utilisation of operating results Result of Value at finan-
of financial of previous financial year operations cial year end
year
Dividend Other Other
allocation utilisations utilisations
Capital 8,000,000 8,000,000

Revaluation reserve 1,535,712 1,535,712
Legal reserve 1,600,000 1,600,000
Statutory reserves
Extraordinary reserve 8,051,536 (442,518) 7,609,018
Reserve for exceptions pur-
suant to Article 2423 of the
Italian Civil Code
Reserve for unrealized gains
on exchanges
Miscellaneous reserves 90,803 (44,004) 46,799
Total misc. reserves 8,142,339 (486,522) 7,655,817
Profit (loss) brought forward
Profit (loss) for the year (486,519) (1,753,995) (2,240,514) (2,240,514)
Total equity 18,791,532 (2,240,517) (2,240,514) 16,551,015
Description Importo
Non-distributable reserve pursuant to art. 2426 46,799
Total 46,799
Availability and use of net equity

The shareholders’ equity items are broken down by origin, the possibility of use, the distribution and use in the three
previous financial years (article 2427, first paragraph, no. 7-bis, of the civil code)
Summary of uses made in the

previous three years
Origin / Possibility Share
Amount
nature of use available for other
to cover losses
reasons
Capital 8,000,000 B 7,950,000

Revaluation reserve 1,535,712 A,B 1,535,712
Legal reserve 1,600,000 A,B 1,600,000
Other reserves
Extraordinary reserve 7,609,018 A,B,C,D 7,609,018 603,656
Miscellaneous reserves 46,799
Total misc, reserves 7,655,817 7,609,018 603,656
Total 18,791,529 18,694,730 603,656
Non-distributable
3,135,173
portion
Residual portion for
15,559,557
distribution
Dellas ǀ 121
Legend: A: for capital increase B: for loss coverage C: for distribution to shareholders D: for other statutory obligations E:
other
Origin, possibility for further use and distribution of various other reserves
Origin /
Description Amount Possibility of use Share available
nature
Riserva non distribuibile ex art. 2426 46,799 A,B,C,D
Totale 46,799
Legend: A: for capital increase B: for loss coverage C: for distribution to shareholders D: for other statutory obligations E:
other
The non-distributable portion regards the share of € 3,135,173 for the cost of Development not written-down (art. 2426,
no. 5).
Formulation and use of net equity items

As foreseen by art. 2427, paragraph 1, number 4) of the Italian Civil Code, the following information is provided:
Share capital Legal Other Result Total

reserve reserves over finan-
cial year
At the beginning of the previous year 8,000,000 1,600,000 9,607,517 70,530 19,278,047
Utilisation of the result of operations
- Dividend allocation
- Other allocations 4 4
Other variations
- Increases 180,787 180,787
- Decreases 110,257 557,049 667,306
- Reclassifications
Result of the previous year (486,519)
At the end of the previous year 8,000,000 1,600,000 9,678,051 (486,519) 18,791,532
Utilisation of the result of operations
- Dividend allocation
- Other allocations (486,522) (1,753,995) (2,240,517)
Result of the current year (2,240,514)
At the close of the current year 8,000,000 1,600,000 9,191,529 (2,240,514) 16,551,015
Reserves incorporated in the share capital

The reserves or other funds that in the event of distribution contribute to form the taxable income of the company,
regardless of the period of training, for free increase of the share capital using the available reserves, are as follows:
- by resolution of the extraordinary general meeting of shareholders of 26/10/2000.
Reserves Value
Extraordinary reserve 535,189
Total 535,189
122 ǀ Dellas
- by resolution of the extraordinary general meeting of shareholders of 26/10/2000.
Reserves Value
Revaluation reserve under law L.72 / 1983 241,395
Revaluation reserve under law L.342/2000 225,225
Capital account contributions fund (art.55 TU) pursuant to Law 675/777 2,271
Capital account contributions fund (art.55 TU) ex L.317 / 1991 121,327
Chamber of Commerce CCIAA contributions fund to capital account (art.55 TU) 15,494
Extraordinary reserve 6,257,719
Total 6,863,431


43,123 67,917 (24,794)
Provision for re- Funds for taxes, Derivatives Other funds Total provisions
tirement bene- including defer- (liabilities) for risks and
fits and similar red payments charges
obligations
Value at start of 67,917 67,917

financial year
Changes in the
financial year
Provisions for
the year
Utilisation in the 24,794 24,794

period
Other variations
Total changes (24,794) (24,794)
Value at finan- 43,123 43,123
cial year end
These are set aside to cover losses or liabilities that are certain or likely, but for which at year-end were not determinable
as regards the amount or date of occurrence.
In evaluating such funds the general principles of prudence and accrual have been followed and no general risk funds
have been set up without financial justification.
The liabilities are reported in the financial statements and recorded in the provisions as deemed probable and reasonably
estimable as regards the amount of the burden.
The increases regard provisions for the financial year. The decreases are utilisations of the financial year.
The provisions for taxes are recorded as deferred tax liabilities for Euro 67,917 relating to tax time differences; a description
which is found in the relevant section of these notes to the accounts.


438,299 463,701 (25,402)
Dellas ǀ 123

Value at start of financial year 463,701
Changes in the financial year
Provisions for the year
Utilisation in the period 25,402
Other variations
Total changes (25,402)
Value at financial year end 438,299
The reserve represents the actual debt accrued to employees according to current law and contracts of employment,
considering each form of remuneration as being continuous in nature.
The reserve corresponds to the total of individual indemnities accrued to employees up to 31 December 2006 at the date
of the closure of the balance sheet, net of advances paid and equivalent to what would be due to pay to the employees
in the event of cessation of the employment agreement as of that date.
The reserve does not include the indemnity accrued from 1st January 2007, for complementary pensions pursuant to the
provisions of legislative decree D. Decree. 2426, no. 5). 252 of 5 December 2005 (or transferred to the INPS treasury).
Debts

13,453,336 13,072,743 380,593
Variations and expiry of debts

The maturity of the debts is divided as follows (article 2427, first paragraph, no. 6, of the civil code).
Value at start Changes in Value at Amount falling Amount falling

of financial the financial financial year due within the due beyond the
year year end financial year financial year
Debts to banks 9,760,231 492,858 10,253,089 6,672,184 3,580,905
Debts to suppliers 2,269,401 (422,369) 1,847,032 1,847,032
Debts to subsidiaries 350,134 350,134 350,134
Tax debts 229,946 (850) 229,096 229,096
Debts to social security 199,535 (29,623) 169,912 169,912
institutions
Sundry debts 613,630 (9,557) 604,073 604,073
Total debts 13,072,743 380,593 13,453,336 9,872,431 3,580,905
Accounted for according to written down cost, taking into account time factors.
In the initial recording of receivables with the written down cost method, the time factor is complied with by comparing
the actual interest rate with market interest rates.
On the closure for the year, the value of debts valued at cost written down is the current value of future financial flows
discounted at the actual interest rate.
Discounting-back of receivables has not been carried out for those falling due within 12 months since the effects are
irrelevant with respect to the non-discounted back value.
With reference to the debts recorded in the financial statements before the financial year starting 1st January 2016, these
were entered at their face value because, as provided for in accounting standard OIC 19, it was decided not to use the cost
written down and discounting-back method.
In particular among the debts with due date beyond 12 months, arising from 1st January 2016, the written down cost led
to an accounting disparity with respect to face value regarding unsecured loans from Medio Credito Centrale, resulting in
a difference in the actual interest rate compared with the market interest rates.
124 ǀ Dellas
Geo- Debts to Debts to Debts to Tax debts Debts to social Sundry Debts
graphic banks suppliers subsidiaries security institu- debts
area tions
Italy 10,253,089 1,478,382 89,425 229,096 169,912 604,073 12,823,977

EEC 360,838 360,838
Non EU 7,812 260,709 268,521
Total 10,253,089 1,847,032 350,134 229,946 169,912 604,073 13,453,336
Analysis of debts with collateral security on company assets

There have been no debts backed by collateral security on company assets (article 2427, first paragraph, n. 6, of the
civil code
Debts with Debts without colla-

Total
collateral security teral security
Debts to banks 10,253,089 10,253,089

Debts to suppliers 1,847,032 1,847,032
Debts to subsidiaries 350,134 350,134
Tax debts 229,096 229,096
Debts to social security institutions 169,912 169,912
Sundry debts 604,073 604,073
Total debts 13,453,336 13,453,336
The balance of Debts due to banks inclusive of loans received, expresses the actual amount of actual outstanding debt,
interest and secondary charges accrued and collectible.
“Debts to suppliers” are recorded at written down cost net of trade discounts; cash discounts are recorded at the time
of payment.
The item “Tax debts” only includes liabilities for certain and determined taxes, as liabilities for taxes probable or uncertain
at the date of occurrence, or for deferred taxes, are recorded in item B.2 under liabilities (tax provision)
Accrued expenses and deferred income

196,263 168,493 27,770
Accruals Deferred income Total accrued expenses

and deferred income
Value at start of financial year 168,493 168,493
Changes in the financial year 27,770 27,770
Value at financial year end 196,263 196,263
The composition of the item is detailed as follows (article 2427, first paragraph, no. 6, of the civil code)
Description Amount
Deferred income on R & D tax credits 196,263
Total 196,263
Dellas ǀ 125
In accordance with the accounting principle OIC 16, the R & D tax Credit was deemed a capital account contribution and
entered in the financial statements using the deferred income method,
There are no accruals and deferrals with a duration of more than five years at 31/12/2017.
Explanatory notes, income statement

Value of production

12,891,742 14,787,437 (1,895,695)
Description Balance at 31/12/2017 Balance at 31/12/2016 Changes

Income from sales and services 12,756,453 14,293,259 (1,536,806)
Changes in product inventories (149,600) 244,916 (394,516)
Changes in work in progress on order
Fixed assets for internal works
Other income and revenue 284,889 249,262 35,627
Total 12,891,742 14,787,437 (1,895,695)
Revenues from the sale of products are recorded at the time of the transfer of the property, which is normally at the time
of delivery or shipping.
Revenues of a financial nature and those arising from the performance of services are recorded on the basis of their time
accrual.
The revenues and income, the costs and charges and burdens in foreign exchange transactions are valued at current rate
at the date of carrying out of the transaction.
Revenues and charges relating to purchase and sale transactions with obligation for re-conveyance, including the
difference as between forward price and spot price, are recorded for the accrued share in the financial year.
Breakdown of income from sales and services by activity category

Activity category Value in current financial year

Sales of goods 12,516,084
Performance of services 240,369
Total 12,756,453
Comment, details of income from sales and services by geographic area

Geographic area Value in current financial year

ITALY 5,114,483
EEC 1,237,659
Non-EU 6,404,311
Total 12,756,453
The change is strictly correlated with that shown in the Management report.
In Misc. income and revenues are included reimbursement of travelling expenses, pay-outs by insurance company on
claims, consideration for sales of depreciable assets and revenues from real property.
126 ǀ Dellas
5
7 BILANCIO
DELLAS SPA
D’ESERCIZIO
FINANCIALDI
STATEMENTS
DELLAS SPA
Production costs
15,068,835 15,267,381 (198,546)

Raw materials, auxiliaries and goods 5,875,808 6,059,038 (183,230)
Services 2,623,348 2,849,205 (225,857)
Third party property leasing charges 82,066 94,522 (12,456)
Wages and payrolls 2,309,634 2,483,374 (173,740)
Social security charges 910,598 888,501 22,097
Severance payments funds 192,599 214,771 (22,172)
Retirement benefits and similar
Misc. personnel costs 22,093 16,260 5,833
Depreciation of intangible fixed assets 1,131,435 1,001,543 129,892
Other write-downs of fixed assets
Devaluations of current receivables 105,418 37,549 67,869
Change in inventories of raw material (37,266) 227,064 (264,330)
Provision for risks
Other provisions
Miscellaneous management expenses 1,393,929 818,488 575,441
Total 15,068,835 15,267,381 (198,546)
Costs of raw materials, auxiliaries, consumables and goods and costs of services
These are directly correlated to what is indicated in the part of the Management report point A) (Value of Production)
of the Profit and loss account.
Personnel costs
The item comprises the costs incurred for the employment of personnel, including improvements on merit, seniority
increases, promotions, the costs of holidays not taken and provisions required by law and by collective bargaining
contracts.
Write down of tangible fixed assets
As regards the write-downs, these have been calculated on the basis of the useful life of the assets and their suitability
for exploitation in the production stage
Devaluations of receivables in current assets and cash in hand
The adjustment of face value of receivables at presumed realisation value has been obtained by means of a special
provision for doubtful debts as illustrated in these Notes to the accounts at point C.II of Assets.
Miscellaneous management expenses

The total amount of € 1.393.929 includes €1,229,816 of losses on credits and passive rebates. These are non-recurring
costs, resulting from the negative outcome of legal attempts to recover receivables from foreign customers
Financial income and charges

(485,784) (100,251) (385,533)
Dellas ǀ 127

From shareholdings 37 37
From receivables recorded in fixed assets 17,388 16,698 690
From securities recorded in fixed assets
From securities recorded under current assets
Income other than that indicated above 9,743 456 9,287
(Interest and miscellaneous financial charges) (174,293) (181,644) 7,351
Exchange rate profits (losses) (338,659) 64,239 (402,898)
Total (485,784) (100,251) (385,533)
Composition of the investment income

Description Controlling Subsidiaries Allied Subject to control of Miscellaneous

undertakings companies Parent company
Other income from 37

shareholdings other than
dividends
Dividends
Total 37
Other income from shareholdings

Income other than dividends
From subsidiaries
From allied companies
From controlling undertakings
Companies controlled by parent companies
From others 37
Total 37
Other financial income

Description Controlling Subsidiaries Allied Subject to Miscellaneous Total
undertakings companies control of
Parent
company
Interest on bonds
Interest on securities
Bank and postal interest
Interest on loans 17,388 9,135 9,135
Interest on trading 17,388
receivables
Other income 608 608
Total 17,388 9,743 27,131
128 ǀ Dellas
5
7 BILANCIO
DELLAS SPA
D’ESERCIZIO
FINANCIALDI
STATEMENTS
DELLAS SPA
Breakdown of interest and other financial charges by type of debt

Interest and miscellaneous financial charges

Debts to banks 174.182
Others 111
Total 174.293
Companies
Allied com- Parent controlled
Description Subsidiaries Others Total
panies company by parent
companies
Bank interests 74,607 74,607

Suppliers interests 111 111
Average credit interest 99,575 99,575
Total 174,293 174,293
Conversion method for foreign currency items

Receivables and the debts originally expressed in foreign currency, recorded on the basis of the exchange rates in
force on the date in which they arose, are aligned with the exchange rates current on the date of closing of the period.
In particular, the assets and liabilities that do not amount to fixed assets as well as the financial receivables are
recorded at the exchange rate at the period end date. The profits and the losses arising from the conversion of the
receivables and the debts are respectively credited and debited to the Income Statement as item 17 b - Profits and
losses on foreign exchange transactions.
Any net profit deriving from the adjustment to year-end exchange rates of foreign currency items is a factor contributing
to the formation of the result for the year and, upon approval of the financial statements and subsequent allocation
of the result to the legal reserve, is recorded, for the part not absorbed by any loss for the year, in a non-distributable
reserve until subsequent realization.
With regard, instead, to fixed assets in foreign currencies, they are recorded at the exchange rate at the time of their
purchase or at the lower one at the end of the financial year only if the negative changes have led to a permanent loss
in value of the assets themselves.
Exchange rate profits (losses)

Of the total amount of foreign exchange losses for € 338,659, the non-realized valuation component corresponds to
a loss of € 249,450.
Therefore, not requiring the allocation of non-distributable reserves until the next realization, the amount recorded in
the previous year in the respective reserve for € 46,799.29 will be reclassified to distributable reserve.
However, within the component realized, a loss of € 87,318 relates to foreign credit for which losses on receivables
resulting from the negative outcome of judicial attempts to recover credits have been recorded.
Income taxes, current, deferred and prepaid

(422,363) (93,676) (328,687)
Dellas ǀ 129
Taxes Balance at 31/12/2017 Balance at 31/12/2016 Changes

Current taxes:
IRES income tax
IRAP (regional tax)
Substitute taxes
Taxes corresponding to previous
financial years
Deferred (prepaid) taxes (422,363) (93,676) (328,687)
IRES income tax (421,736) (93,081) (328,655)
IRAP (regional tax) (627) (595) (32)
Income (charges) from adhering to the
consolidated tax / tax transparency
system
Total (422,363) (93,676) (328,687)
Taxes are set aside according to the accrual principle; they therefore represent:
• provisions for taxes paid or to be settled for the year, determined according to the rates and current regulations;
• the amount of deferred or prepaid taxes in relation to time differences arising or cancelled during the year;
• the adjustments to the balances of deferred taxes to take account of changes to rates..
Ires (corp. income tax) and prepaid differences calculated on time differences between the assets and liabilities in
accordance with civil criteria and the corresponding tax figures with reference solely to the company.
Irap regional tax, deferred and prepaid and determined exclusively with reference to the company.
Taxes recorded are those accrued in the year.
Reconciliation between tax burden in the financial statement and the theoretical tax
burden (IRES)
Description Value Taxes
Before tax result (2,662,877)
Theoretical tax burden (%) 24
Time difference in taxable in subsequent financial years:
Non deductible depreciations 183,795
Losses on currency exchange 284,970
Total 468,765
Time differences deductible in subsequent financial years:
Income on currency exchange 35,520
Total 35,520
Reversal of time differences from previous financial years
Losses on currency exchange 92,033
Income on currency exchange 138,832
Total 230,865
Differences that will not be carried forward to subsequent financial years
Total variations in increase and decrease 390,066
Total 390,066
Taxable amount (1,537,661)
Current taxes on income for the year
130 ǀ Dellas
7
Calculation of IRAP regional tax

Description Value Taxes
Difference between value and costs of production 1,363,249
Costs not relevant for IRAP purposes (4,681,335)
Total increases 967,061
Costs not relevant for IRAP purposes
Total decreases (66,164)
Total (2,417,189)
Theoretical tax burden (%) 3,9
Deductible time difference in subsequent financial years:
Taxable for Irap regional tax (2,417,189)
Current IRAP for the year
In accordance with article 2427, first paragraph n 14 of the civil code we show the information requested on the deferred
and prepaid tax principle:
Deferred / prepaid tax
The deferred taxes have been calculated according to the total allocation method taking into account the accumulated
amount of all time differences on the basis of the actual rate for the last financial year.
Prepaid taxes have been recorded insofar as there is a reasonable certainty of the existence, in the financial year in which
the temporary differences will fall, of a taxable income not less than the amount of the differences that will be wiped out.
The main time differences that had led to the accounting of deferred and prepaid taxes are indicated in the following
table together with the corresponding effects.
Recognition of deferred and anticipated taxes and consequent effects
over finan- over finan- over finan- over finan- over over
cial year cial year cial year cial year financial year financial year
31/12/2017 31/12/2017 31/12/2017 31/12/2017 31/12/2016 31/12/2016
Amount of Tax effect Amount of Tax effect Amount of Tax effect
temporary IRES income temporary IRAP (regio- temporary IRAP (regional
IRES diffe- tax IRES diffe- nal tax) IRES tax)
rences rences differences
For prepaid taxes

Provisions for 67,116 16,108 23,966 5,752
doubtful debts that
are greater than the
quota set aside
Depreciation of 16,074 3,858 16,074 627 15,249 3,660
intangible assets
that are greater than
these on the share of
depreciation tax
Losses on currency 284,970 68,393 92,033 22,088
exchange
Tax loss 1,363,755 327,301 249,421 59,861
Ace Excess 14,043 3,370 41,962 10,071
Reversal of prepaid (92,033) (22,088)
taxes from exchange
rate losses from
the previous year’s
valuation
Total 1,653,925 396,942 16,074 627 422,631 101,432
Dellas ǀ 131
Deferred taxes:
Income on currency 35,520 8,525 138,832 33,320
exchange
Reversal of deferred (138,832) (33,320)
taxes from profit on
exchange rates from
the previous year's
valuation
Total (103,312) (24,795) 138,832 33,320
Deferred (prepaid) (421,737) (627) (68,112)
taxes
IRES IRAP
A) Time differences
Total deductible time 1,653,925 16,074
differences
Total taxable time (103,312)
differences
Net time differences (1,757,237) (16,074)
B) Tax effects
Deferred taxes
(prepaid) reserve at
beginning of financial
year.
Deferred taxes (pre- (421,737)
paid) of the financial
year
Deferred taxes (pre- (421,737) (627)
paid) reserve at end
of financial year.
Details of deductible time differences

Description Amount at Variation oc- Amount at IRES Tax ef- Rate Tax effect
the end of curred during the end of (corp. fect IRES of IRAP IRAP
previous year the year year income income regional (regional
tax) rate tax corp. tax tax)
Provisions for 23,966 43,150 67,116 24 16,108
doubtful debts
that are greater
than the quota
set aside
Depreciation of 15,249 825 16,074 24 3,858 3,90 627
intangible assets
that are greater
than these on the
share of depre-
ciation
Losses on cur- 92,033 192,937 284,970 24 68,393
rency exchange
Tax loss 249,421 1,114,334 1,363,755 24 327,301
Ace Excess 41,962 (27,919) 14,043 24 3,370
Reversal of pre- (92,033) (92,033) 24 (22,088)
paid taxes from
exchange losses
from
valuation from
previous year
132 ǀ Dellas
Details of deductible time differences

Description Amount at Variation oc- Amount at IRES Tax ef- Rate Tax effect
the end of curred during the end of (corp. fect IRES of IRAP IRAP (re-
previous year the year year income income regional gional tax)
tax) rate tax corp. tax
Income on cur- 138,832 (103,312) 35,520 24 8,525

rency exchange
Reversal of (138,832) (138,832) 24 (33,320)

deferred taxes
from profit on
exchange rates
from the previous
year’s valuation
Notes to the accounts, other information

Employment data
The average company staff numbers, broken down by categories, has been subject to the following changes as compared
with the previous financial year.
Staff 31/12/2017 31/12/2016 Changes

Senior executives 2 2
Middle management 7 8 (1)
Office staff 20 21 (1)
Workers 62 63 (1)
Others 1 1
Total 92 95 (3)
The national employment contract is that of the Chemical industry - Abrasives
Senior Middle Office staff Workers Other Total

executives management employees Employees
Numero 2 7 20 62 1 92
medio
Rewards, advances and credit granted to directors and auditors and loans undertaken
on their behalf
Directors Auditors
Rewards 128,700 17,100
Rewards to the statutory auditor or auditing company

(Ref. art. 2427, first paragraph, n. 16-bis, of the civil code)
Value
Statutory audit of annual accounts 9,000
Dellas ǀ 133
Details on other financial instruments issued by the company

The company has issued no financial instruments.
Information related to fair value of derivative financial instruments

Here below fair value is indicated together with information on the extent and nature of each category of derivatives
effected by the company broken down by class, taking into consideration such matters as their characteristics and
purpose of their use.
Derivatives used to hedge financial flows:

Contract type: IR SWAP
Negotiation date: 15/11/2017
Expiry date: 11/30/2022
Notional: € 750,000
Mark-to-Market: € (4,963,61)
Obligations, guarantees and contingent liabilities not recorded in the balance sheet
As foreseen by art. 2427, first paragraph, n. of the civil code the following information is provided on obligations,
guarantees and contingent liabilities not recorded in the statement of assets and liabilities
The company has provided guarantees, in the form of a surety, towards subsidiaries.
Amount
Obligations
with regard to subsidiaries 286,000
Information on related party transactions

(Ref. art. 2427, first paragraph, n. 22-bis, of the civil code
The important transactions made by the company with allied parties, have solely regarded raw materials, semi-finished
goods and finished products to the subsidiary companies Dellas Diamond Tools Suzhou Co Ltd, Dellas Istanbul Makina
Sanayi Ve Ticaret As, Dellas Spagna Sl, Dellas Spa Ethiopian Branch, Dellas Do Brasil Ferramentas Diamantadas Ltda, Dellas
Stone Tools India Private Limited and another shareholding through Cordusio Società Fiduciaria Per Azioni.
Such transactions have been concluded under normal market conditions.
Proposed distribution of profits or loss cover

It is proposed to the assembly to use the extraordinary reserve to cover a negative result of € 2,240,514, also reclassifying
the Reserve ex Art. 2426 8-bis, set aside in the previous year, for € 46,799, to the Extraordinary Reserve, freely available.
DANIELE FERRARI
Lugo di Grezzana (VR), 30/03/2018 President and Chief Executive Officer (CEO)
134 ǀ Dellas
Dellas ǀ 135
7
DELLAS SPA
FINANCIAL
STATEMENTS
as of 31/12/2017
REPORTS
136 ǀ Dellas
DELLAS SPA
Reg. Imp 00519470173

Rea
DELLAS SPA
Headquarters in VIA PERNISA, 12 -@ LUGO DI GREZZANA (VR) Share capital Euro 8,000,000.00 IV
Report of the Auditor pursuant to art. 14 of the legislative decree D. Lgs. of 27 January
2010, n.39
To the shareholders of the DELLAS SPA
I have carried out the legal audit of the attached financial statements of the company DELLAS SPA, consisting of the
balance sheet at 31/12/2017, the income statement, the financial statement for the year ended on that date and the
explanatory notes.
Judgement without change
In my judgement, the financial statements provide a true and correct representation of the financial and patrimonial
situation of the company DELLAS SPA at 31/12/2017 and of the economic result and cash flows for the year ended on
that date, in compliance with the Italian regulations that govern their drafting criteria
Elements on which the judgement is based
I have carried our the audit in compliance with international auditing standards (ISA Italia). My liabilities under these
standards are further described in the section in this report on Auditor's responsibility for the audit of the financial
statements. These are independent from the Company in compliance with the rules and principles on ethics and
independence applicable in the Italian legal system for auditing the financial statements.
I believe I have acquired sufficient and appropriate auditing evidence on which to base my judgment.
My opinion does not contain findings with reference to this aspect.
Responsibilities of the directors and the board of statutory auditors for the financial statements
The directors are responsible for the preparation of the financial statements that provide a truthful and correct
representation in accordance with the Italian regulations governing the drafting criteria and, within the terms established
by law, for that part of the internal control they deem necessary to allow the preparation of a financial statement that does
not contain significant errors due to fraud or unintentional behaviour or events.
The directors are responsible for assessing the Company's ability to continue operating as a going concern and, in drafting
the financial statements, for the appropriateness of utilising the assumption of business continuity, as well as for adequate
disclosure on this matter. The directors use the assumption of business continuity in the preparation of the financial
statements, unless they have assessed that the conditions exist for the liquidation of the Company or for the interruption
of the activity or have no realistic alternatives to such choices.
The Board of Statutory Auditors is responsible for supervising, within the terms established by law, the process of preparing
the Company's financial information.
Auditor's responsibility
My objectives are the acquisition of reasonable assurance that the financial statements as a whole do not contain significant
errors, due to fraud or unintentional behaviour or events, and the issuance of an audit report that includes my judgement.
By reasonable certainty is intended a high degree of certainty which, however, does not provide the assurance that an
audit carried out in accordance with international auditing standards (ISA Italia) will always identify a significant error, if
any. Errors can result from fraud or unintentional behaviour or events and are considered significant if it can reasonably
be expected that they, individually or together, will be able to influence economic decisions taken by users on the basis of
the financial statements.
As part of the audit carried out in accordance with international auditing standards (ISA Italia) I have exercised professional
judgement and / or maintained professional scepticism throughout the duration of the audit. Furthermore:
• I have identified and assessed the risks of significant errors in the financial statements, due to fraud or unintentional
behavior or events; I have defined and carried out review procedures in response to these risks; I have acquired sufficient
and appropriate audit evidence on which to base my judgement. The risk of not identifying a significant error due to fraud
Report of the Auditor on the financial statements at 31/12/2017 Page 1
Dellas ǀ 137
DELLAS SPA
is higher than the risk of not identifying a significant error deriving from unintentional behaviour or events, since fraud can
imply the existence of collusion, falsification, intentional omission, misleading representations or forcing internal auditing;
• I have acquired an understanding of the internal control relevant for auditing purposes in order to define audit procedures
appropriate in the circumstances and not to express an opinion on the effectiveness of the internal auditing of the Company;
• I have assessed the appropriateness of the accounting principles used and the reasonableness of accounting estimates
made by the directors, including the related disclosure;
• I have arrived at a conclusion on the appropriateness of the use by the directors of the assumption that the company is
a going concern and based on the audit evidence acquired, on the existence of significant uncertainty regarding events or
circumstances that may give rise to significant doubts about the Company's ability to continue operating as a business. In
the presence of significant uncertainty, I am obliged to draw attention to the audit report on the related disclosures in the
financial statements or, if this disclosure is inadequate, to reflect this fact in the formulation of the my judgement. My
conclusions are based on the auditing evidence obtained up to the date of this report. However, subsequent events or
circumstances may result in the Company ceasing to operate as an ongoing concern;
• I have assessed the presentation, structure and content of the budget as a whole, including the disclosure, and if the
financial statements represent the underlying operations and events in order to provide a correct representation.
• I have communicated to those responsible for activities of governance, identified at an appropriate level as required by
ISA Italia, among other aspects, the scope and timing planned for the audit and the significant results that emerged,
including any significant deficiencies in the internal accounting control identified in the course of the audit.
Judgement of the consistency of the management report with the financial statements
The directors of the Company DELLAS SPA are responsible for the preparation of the report on the management of the
company DELLAS SPA al 31/12/2017, including its consistency with the related consolidated budget and its compliance
with the law.
I have carried out the procedures indicated in the revision principle (SA Italia) n. 720B in order to to express a judgement
on the consistency of the management report with the financial statements of the company DELLAS SPA at 31/12/2017
and on the compliance of the same with the law, as well as issuing a statement on any significant errors.
In my opinion the management report is consistent with the financial statements of the company DELLAS SPA at
31/12/2017 and is written in compliance with the law.
With reference to the declaration pursuant to art. 14, paragraph 2, lett. e) of the Legislative Decree D.Lgs. 39/2010, issued
on the basis of the knowledge and understanding of the company and acquired during the related context of the audit, I
have nothing to report.
Grezzana
Grezzana, 14/04/2018
04/14/2018
The Statutory Auditor

ZANINI TOMMASO
Report of the Auditor on the financial statements at 31/12/2017 Page 2
138 ǀ Dellas
DELLAS S.p.A.
Headquarters in Via Pernisa, 12 - 37023 Lugo Di Grezzana (VR)
Share Capital Euro 8,000,000.00 iv.
Tax Code and N. Registration of Companies 00519470173
VAT number: 00519470173 - N. Rea: 176288
Report of the Board of Statutory Auditors to the

Shareholders’ Meeting pursuant to art. 2429
paragraph 2 of the Civil Code
Shareholders,
During the financial year closed at 31/12/2017 our activity has been inspired by legal provisions and by the Rules of
Conduct of the Board of Statutory Auditors, issued by the National Council of Chartered Accountants and Accountants,
in respect of which we have carried out the self-assessment, with a positive outcome, for each member of the board of
statutory auditors.
Supervisory activities pursuant to Article 2403 et seq., Of the Civil Code.
• We have supervised the observance of the law, of the deed of incorporation and compliance with the principles of
correct administration;
• We have taken part in the shareholders’ meetings and the meetings of the board of directors, in relation to which,
based on the information available, we have not detected violations of the law and the by-laws, nor manifestly
imprudent, risky transactions in potential conflict of interest or such as might compromise the integrity of the social
assets
• We have acquired from administrators, during the meetings held, information on the general performance of the
management and on its foreseeable evolution, as well as on the most significant transactions, due to their size or
characteristics, carried out by the company and its subsidiaries and, based on the information acquired, we have no
particular observation to report;
• We have gathered knowledge and monitored the adequacy of operations by the organizational set-up of the company,
also by collecting information from the heads of the departments and in this regard we have no observations to
make;
• We have assessed and monitored the adequacy of the administrative and accounting system, as well as the reliability
of the latter to correctly represent the facts concerning management , by obtaining information from the heads of
the functions, by the person in charge of the accounting control and the examination of company documents. In this
regard we have not particular observations to report
It should be noted that no complaints were received pursuant to art. 2408 cc
During the year the opinions of the Board of Statutory Auditors were not provided for by law.
During the course of the supervisory activity, as described above, no further significant events emerged that would
require pointing out in this report.
Observations regarding the financial statements
To the best of our knowledge, the directors, in drafting the financial statements, did not derogate from the provisions of
the law pursuant to art. 2423, paragraph 4, of the Civil Code
The board of statutory auditors acknowledges that during the 2017 financial year the company carried out industrial
research and experimental development on some projects considered to be particularly innovative, called:
PROJECT 1 - Design and development of a MOLA ECOLOGICAL milling machine dedicated to ceramic trimming processes
PROJECT 2 - Design and development of a new product dedicated to marble cutting: single and multithreaded diamond
wire. In order to carry out the above projects, the company incurred research costs of € 111,627,28 and development
costs of € 843,327, a total of € 954, 954 over the year .
Pursuant to art. 2426, n 5 c.c. we have given our consent to the inclusion in the Assets of the Balance Sheet of Development
Costs for € 3,135,173.00
The board notes that its recommendations expressed on 10/04/2017 (Financial Statements 2016), on the management
of the 2017 financial year, were accepted and also applied in the preparation of the financial statements that we are
about to close.
The board now feels the need to pay particular attention to the trend in turnover, costs and expenses; this is to better
identify the desirable inversion of tendency that will bring positive results to the company .
Finally, the Board hopes that the significant investments the company has made and continues to use in research and
development projects will bear the fruits they deserve.
The net result ascertained by the Board of Directors for the year ended December 31, 2017, as is clear from reading of
the financial statements, is negative for Euro 2,240,514.00
The statutory auditing activity, pursuant to article 2409-bis and following of the Italian Civil Code, was carried out by the
Legal Auditor
Dellas ǀ 139
The report of the Statutory Auditor relating to the financial statements for the year ended 31 December 2017 does not
highlight any significant deviation, that is to say, negative opinions or the impossibility of expressing a judgement or
references to information and therefore the judgement issued is positive.
We have verified compliance with the law on the preparation of the management report, and in this regard we have no
observations to make.
We have verified that the financial statements correspond to the facts and information known to us as a result of the
performance of our duties, and we have no observations to make on this.
Remarks and proposals in order to approve the balance
Considering the results of the activity carried out by the accounting control body, results contained in the specific
report accompanying the financial statements, we recommend that the ordinary general meeting approve the financial
statements closed at the end of the year 31/12/2017, as drafted by the Directors.
The Board agrees with the utilisation of the operating result made by the administrators.
Grezzana 14/04/2018
The Board of Statutory Auditors
Chairman of the Board of Statutory Auditors Active Auditor Active Auditor

Claudio Bellorio Arnaldo Caprara Valentino Ederle
140 ǀ Dellas
Minutes of the ordinary general meeting

In the year 2018, on the 27th of the month of June, at 10.00, at the registered office of the Company Pernisa 12 Fraz.
Lugo - 37023 Grezzana (VR), the ordinary general meeting of the company DELLAS SPA was held, on second call, as the
first was not quorate, to discuss and decide on the following
Agenda
1. Financial Statements and Report on Operations for the financial year ended 31/12/2017: related and
consequent resolutions. Report of the Board of Statutory Auditors and of the Accounts Auditor.
2. Interventions were made by the Chairman of the Board of Directors on research, innovation and process /
product improvement.
3. Appointment of the Board of Directors and the Chairman of the Board of Directors, and related remuneration,
for the three-year period 2018 - 2020.
4. Miscellaneous and other matters
In the place and at the time indicated, the following persons are physically present:
FERRARI DANIELE CEO
BELLORIO CLAUDIO Chairman of the Board of Statutory Auditors
CAPRARA ARNALDO Active Auditor
EDERLE VALENTINO Active Auditor
ZANINI TOMMASO Auditor
as well as the majority of the Board of Directors and Shareholders representing, on their own behalf or by proxy,
8,000,000 shares equal to the entire share capital. The attendance of the participants is also recorded on the sheet
signed by all of those present. The time sheet will be kept in the records of the company.
The role of President is taken by Mr. FERRARI DANIELE, Chief Executive Officer, and those present call Mr. PASQUOTTI
MARCO, to act as secretary to the meeting waiving the need to appoint tellers.
With the chair thus formally established, the Chairman ascertains that company general meeting on first calling was
not quorate and that this second calling must be deemed valid in view of the fact that the majority of the Directors,
the Board of Statutory Auditors, the Accounts Auditor and the Shareholders, in person or by proxy, are here present
representing 8,000,000 shares, being the whole of the company capital and since the general meeting has been called
in manner and in accordance with the terms provided for in the Articles of Association.
The meeting thus moves on to the first item on the Agenda.
The President asks if anyone intends to declare themselves uninformed about the items on the agenda.
Having obtained consent to proceed with discussion of the items on the agenda, the Chairman declares the session
fit to pass its resolutions.
The Chairman asks the participants to state if there is any situation that exists that impedes them from exercising their
right to vote, and no person intervenes in this regard.
1. Financial statements and Business report for the company year ending on 31/12/2017: consequential and
inherent decisions regarding these. Report of the Board of Statutory Auditors and of the Auditor.
With regard to the first item on the Agenda, the Chairman distributes to those present copies of the:
• Draft of the Financial Statements for the year closing 31/12/2017
• Draft Report on Operations for the year closing 31/12/2017
• Report of the Board of Statutory Auditors on the financial statements for the financial year closing 31/12/2017
• the report of Auditor on the Financial statements for the year closing
The Chairman of the Board of Statutory Auditors Mr. BELLORIO CLAUDIO reads the Report of the Board of Statutory
Auditors on the financial statements for the financial year ended 31/12/2017.
The Auditor Mr. TOMMASO ZANINI reads the Report of the Auditor on the financial statements for the financial year
closing 31/12/2017.
The discussion is opened on the various questions proposed, the President answers providing the clarifications
requested. After extensive discussion, the President puts the first item on the agenda to the vote. After hearing the
arguments for and against the persons present unanimously
pass their resolution
• to acknowledge the Report of the Board of Statutory Auditors and of the Accounting Auditor on the financial
year closed on 31/12/2017, which are annexed hereto;
• to approve the Financial Statements and the Annual Business Report for the financial year ended 31/12/2017,
as prepared by the Chief Executive Officer, which shows a negative net result of € 2,240,514, being annexed
hereto;
• approve the CEO’s proposal to use the Extraordinary Reserve to cover the negative result for the year of
€ 2,240,514,
• reclassify the Reserve pursuant to Art. 2426 8-bis, set aside in the previous year, for € 46,799, to the
Extraordinary Reserve, freely available.
Dellas ǀ 141
2. Interventions were made by the Chairman of the Board of Directors on research, innovation and process /
product improvement.
[ OMISSIS ]
3. Appointment of the Board of Directors and the Chairman of the Board of Directors, and related remuneration,
for the three-year period 2018 - 2020.
[ OMISSIS ]
There being no other matters to discuss, and with no other person requesting the floor, the session is closed at 1 pm,
after the reading of and the unanimous approval of these minutes.
The Secretary The Chairman

MARCO PASQUOTTI DANIELE FERRARI
142 ǀ Dellas
Dellas ǀ 143
SOLUZIONE COLORE QUANDO IL LOGO VIVE SU FONDO BIANCO
DELLAS S.p.A. Via Pernisa 12, fraz. Lugo

37023 Grezzana (VR) - Italy
Tel. +39 045 8801522 - Fax +39 045 8801302
www.dellas.it - email: info@dellas.it
dellas@postacerta.net
Skype: dellasdiamondtools
144 ǀ Dellas

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SOLUZIONE COLORE QUANDO IL LOGO VIVE SU FONDO BIANCO

INTEGRATED ANNUAL REPORT 2017

6 CONSOLIDATED FINANCIAL STATEMENTS 64

7 DELLAS SPA FINANCIAL STATEMENTS 90

DOWNLOAD IN PDF FORMAT THIS ANNUAL REPORT

HELP US TO IMPROVE OUR ANNUAL REPORT.

DANIELE FERRARI ISIDORO FERRARI ELISA FERRARI

Dear Shareholders and Stakeholders,

Dear Shareholders and Stakeholders,

Business Model and Value Creation

INPUTS BUSINESS ACTIVITES OUTPUTS

u Shareholders u Value Added distribution u Consolidated added value u Increase in

Financial (page 31)

u Human Resources u Improvements to u Staff turnover u Managerial

► TABLE 1 - Business Model and Value Creation

1973 The year “Deltas di Sinigaglia&Viazzo

Dellas embarks on the countries of the

1985 Dellas starts in South America: Brazil.

1979 personality from “Deltas di

1996 Dellas sets foot in Saudi Arabia

1997 Dellas enters Portugal.

2001 Dellas opens up in Rumania and from

Establishment of the Spanish branch

Establishment of the Ethiopian branch

- Establishment of the Turkey branch

2012 Daniele Ferrari, son of Isidoro,

2016 Establishment of “DELLAS do BRAZIL

The Products and Markets served

LOOK AT THE PROFILE WEB PAGE

Lugo di Grezzana (VR), 09/04/2018 DANIELE FERRARI

Company Organisation Chart

OPERATIONS TECHNICAL AREA SALES

► TABLE 1 - Company Organisation Chart Dellas ǀ 17

► TABLE 2 - The team ownership on 31/12/2017

18 ǀ Dellas ► TABLE 3 - The structure of the Dellas Group as of 31/12/2016

General Meeting of Shareholders

► TABLE 4 - The Board of Directors as of 31/12/2017

2017 2016 2015

► TABLE 6 - Breakdown of composition and meetings of the Board of Directors

Statutory Board of Auditors

The Italian Legality Rating

Authorised European Economic Operator Status (AEO)

G4-16 Membership of National associations

Lugo di Grezzana (VR), 09/04/2018 DANIELE FERRARI

• Integrated Reporting • Single model of organization in finance area

OPERATIONAL RISKS HAZARD RISKS

• Tailor made products • International Liability Program

► TABLE 1 - Definition of risks and safeguard actions

Four macro areas of risk have been identified:

Strategic risk management

Financial - Liquidity Probability

Financial - Property Probability

Financial - Price Severity

Financial - Currency Probability

Hazard - Natural disaster Severity

Hazard - Property damage Severity

Hazard - Civil Liability Severity

DELLAS S.P.A. DELLAS İSTANBUL MAKINA

DELLAS SPAGNA, S.L. DELLAS DIAMOND TOOLS

DELLAS S.P.A. DELLAS DO BRASIL FERRAMENTAS

DELLAS STONE TOOLS