<SEC-DOCUMENT>0000903423-17-000455.txt : 20170828
<SEC-HEADER>0000903423-17-000455.hdr.sgml : 20170828
<ACCEPTANCE-DATETIME>20170707162213
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000903423-17-000455
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20170707

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATUZZI S P A
		CENTRAL INDEX KEY:			0000900391
		STANDARD INDUSTRIAL CLASSIFICATION:	HOUSEHOLD FURNITURE [2510]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		VIA IAZZITIELLO 47
		CITY:			SANTERAMO ITALY
		STATE:			L6
		ZIP:			70029

	MAIL ADDRESS:	
		STREET 1:		VIA IAZZITIELLO 47
		CITY:			SANTERAMO ITALTY
		STATE:			L6
		ZIP:			999999999

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NATUZZI INDUSTRIES SPA
		DATE OF NAME CHANGE:	19950823
</SEC-HEADER>
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<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>NATUZZI S.P.A.</B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt 4.5in">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt 4.5in">July 7, 2017</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt 264.25pt; text-indent: -264.25pt"><FONT STYLE="text-transform: uppercase"><U>VIA
EDGAR TRANSMISSION</U></FONT></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">Mr. John Cash</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">Accounting Branch Chief</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">Office of Manufacturing and Construction</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">Division of Corporation Finance</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">Securities and Exchange Commission</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">100 F Street, NE</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">Washington, DC 20549</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0.2in 0 0; text-indent: 35.4pt"><FONT STYLE="letter-spacing: 0.1pt"><B>Re:
Natuzzi S.p.A.</B></FONT></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 0 22.5pt; text-indent: 35.4pt"><FONT STYLE="letter-spacing: -0.45pt"><B>Form
20-F for the Year Ended December 31, 2015</B></FONT></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 0 22.5pt; text-indent: 35.4pt"><FONT STYLE="letter-spacing: -0.2pt"><B>Filed
May 23, 2016</B></FONT></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 1.8pt 0 0 22.5pt; text-indent: 35.4pt"><FONT STYLE="letter-spacing: -0.2pt"><B>File
No. 1-11854</B></FONT></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">Dear Mr. Cash:</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">As discussed on a telephone call with members of the staff
(the &ldquo;<U>Staff</U>&rdquo;) of the Securities and Exchange Commission held on June 2, 2017, Natuzzi S.p.A. (the &ldquo;<U>Company</U>&rdquo;)
is submitting this draft supplemental response letter in order to provide the Staff with additional information relating to the
Company&rsquo;s previous response dated April 21, 2017 (the &ldquo;<U>April Letter</U>&rdquo;).</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0"><B><I><U>Review of manual journal entries</U></I></B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">With reference to the Company&rsquo;s April Letter and
the recent call, the following details the explanations provided on the call by the Company and its auditor regarding the Company&rsquo;s
conclusions as to the effectiveness of its internal control over financial reporting (&ldquo;<U>ICOFR</U>&rdquo;) as of December
31, 2015. As described below, during 2015, the Company identified a deficiency in its ICOFR that led it, out of an abundance of
caution, to expand the testing population of the manual journal control and to perform supplemental testing of such control as
part of the financial statement close process (&ldquo;<U>FSCP</U>&rdquo;). Nevertheless, the Company concluded, and confirms to
the Staff its conclusion, that the deficiency did not constitute a material weakness in light of existing controls in place as
of December 31, 2015 and the Company&rsquo;s analysis of the severity of the deficiency in accordance with relevant SEC guidance.
The Company&rsquo;s prudent decision to perform additional testing should not give rise to any inference that its ICOFR was not
effective, which would only serve to discourage management from exercising the highest degree of care in</P>


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<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">carrying out its responsibility to assess the Company&rsquo;s
ICOFR as of the end of the relevant reporting period.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-size: 12pt"><I>a)</I></FONT></TD><TD><FONT STYLE="font-size: 12pt"><I>Background of the decision to complete the testing on manual journal entries by expanding
the testing population of the manual journal control</I></FONT></TD></TR></TABLE>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">The Company&rsquo;s internal control framework is based
on seven significant classes of transactions (&ldquo;<U>SCOT</U>&rdquo;), in particular:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">Purchases</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">Warehouse</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">Sales</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">Payroll</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">Treasury</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">Assets</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">FSCP</FONT></TD></TR></TABLE>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">The controls around the FSCP include a control pertaining
to the review of manual journal entries, which is designed to ensure the proper authorization and documentation of manual journal
entries. Prior to the December 2015 ICOFR assessment, this control was executed on manual journal entries relating to non-routine
transactions only, using a threshold of Euro 500 thousand. As part of the FSCP, it was performed between January and April of the
year following the relevant fiscal year. In previous years, this control produced no exceptions. Thus, it had always been sufficiently
precise as designed.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">During 2015, following the reassignment of roles and
responsibilities in the Company&rsquo;s organization, which was one of the consequences of the implementation of the Company&rsquo;s
Transformation Plan, potential exceptions were identified to the Company&rsquo;s IT segregation of duties (&ldquo;<U>SOD</U>&rdquo;)
guidelines. As described in the April Letter, in response to such potential exceptions, in October 2015 the Company implemented
a monitoring control related to access rights, which included additional review of transactions performed by personnel with potential
conflicting access rights. These monitoring activities regarding potential SOD exceptions continued until April 2016 and did not
identify any improper activity.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">As the above monitoring control was still operating
during the FSCP, when the manual journal entry control would normally operate, in connection with the review of transactions performed
by such personnel the Company decided, for the sake of additional prudence and not out of necessity, to expand its testing procedures
over manual journal entries to include routine transactions as part of the testing population. This was done despite the existence
of compensating controls over manual journal entries already operating in the relevant business</P>


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<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">processes, which were tested and determined to be effective.
The journal entries subject to compensating controls included, but were not limited to, manual journal entries related to:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">salaries, for which the controls around Payroll operated
to ensure that such entries were properly authorized and correctly posted;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">interest paid, which were subject to other controls
in Treasury to ensure that bank accounts were duly reconciled;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">provisions for legal claims, for which other controls
operated around the FSCP to verify the accuracy and completeness of the provision to be posted to the financial statements on the
basis of legal opinions, among other factors;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">invoices to be received, which were subject to other
controls around Purchases that operated to ensure that such invoices were posted in accordance with orders and receipt of goods;
and </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">sales provisions, for which the controls around Sales
ensured such provisions were properly calculated and posted. </FONT></TD></TR></TABLE>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">The foregoing controls are not a complete population
of relevant compensating controls. The Company has similar compensating controls in place, which, together with the compensating
controls listed above, cover the entire population of journal entries related to routine transactions. Further, each compensating
control (both described in and omitted from this letter) was designed at an appropriate level of precision and operated effectively
as of December 31, 2015.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">Although it was (and remains) the case, based on the
assessment management performed, that these already existing and tested effective business process controls would have identified
material inappropriate or unauthorized manual journal entries relating to routine transactions, in an abundance of caution due
to the IT SOD exceptions, the Company determined to expand the manual journal entry control within the FSCP framework also to cover
routine transactions. Having commenced the testing of the expanded population of manual journal entries, the Company determined
that it should complete it prior to filing the annual report on Form 20-F for the year ended December 31, 2015 (the &ldquo;<U>2015
Form 20-F</U>&rdquo;).</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">The Company initially performed the extended testing
over the expanded population of manual journal entries using the same Euro 500 thousand threshold that had been used for non-routine
transactions. Due to the inclusion of manual journal entries deriving from routine transactions, and the resulting increase in
the testing population, such threshold proved insufficient, since the total population that was excluded from review was Euro 28.5
million, of which Euro 0.8 million related to non-routine transactions and Euro 27.7 million related to routine transactions.</P>


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<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0">As a result of this deficiency, the Company decided
to complete its testing procedure over manual journal entries reducing the threshold from Euro 500 thousand to Euro 100 thousand,
in order to cover the residual portion of items not initially subject to testing. The completion of testing using the lower threshold
took longer than expected (it was not in fact completed until May 2016), but resulted in a coverage over manual journal entries
of 99.8%, with a remaining untested population of Euro 984 thousand, significantly lower than the Company&rsquo;s materiality level
for the 2015 ICOFR assessment.</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">Such additional testing over the Euro 28.5 million population
confirmed the results already obtained on the initial population subject to testing, noting no exceptions either in the accuracy
or in the appropriate authorization of entries.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in; text-indent: -0.25in"><I>b) The deficiency regarding
the manual journal entry threshold was not a material weakness in ICOFR at December 31, 2015</I></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">The Company assessed the severity of the deficiency
in the manual journal entry control threshold in accordance with Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act
of 1934, the COSO framework, and Public Company Accounting Oversight Board standards and releases. As a result of this assessment,
the Company concluded that the deficiency did not constitute a material weakness.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">In determining whether there was a reasonable possibility
that the deficiency (alone or in combination with others) could cause a material misstatement, the Company considered the following
risk factors relating to the manual journal entries pertaining to routine transactions:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">Manual journal entries connected to routine transactions
derive from routine processes, which are inherently low(er) risk and with low(er) complexity or judgment required, and which were
already subject to other (effective) SCOT level controls. Such controls had also ensured that the related assets/liabilities were
not particularly susceptible to loss or fraud. The risk of a material misstatement could therefore reasonably be anticipated to
be lower than the risk related to non-routine transactions;</FONT></TD></TR></TABLE>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">This control over the expanded population of manual
journal entries was put in place only as a matter of prudence in response to the IT SOD exceptions and could therefore be considered
as &ldquo;one-off&rdquo; in nature and largely redundant, since it complemented the Company&rsquo;s IT monitoring control over
transactions performed by potential unauthorized users and was in addition to the already existing SCOT level controls;</FONT></TD></TR></TABLE>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">The cause of the deficiency was that the control
testing threshold was not adapted for routine transactions, and therefore the detected control exception was that too large a manual
journal entry population was not initially subject to testing. While expanding the control to cover routine, as well as non-routine,
manual journal entries was done out of</FONT></TD></TR></TABLE>


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<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in">prudence and not necessity, on reflection, the
testing threshold should have been adapted before executing the control.</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 6pt 11.9pt 6pt 0; text-align: justify">In addition, the Company
considered whether any of the following factors was present as it related to the deficiency (alone or in combination with the other
identified deficiencies):</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 11.9pt 0 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt"><I>Identification of fraud, whether or not material,
on the part of senior management</I></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Courier New, Courier, Monospace; font-size: 12pt">o</FONT></TD><TD STYLE="text-align: justify; padding-right: 11.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">There
was no such indication in 2015 or any prior years.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 11.9pt 0 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt"><I>Restatement of previously issued financial
statements to reflect the correction of a material misstatement </I></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Courier New, Courier, Monospace; font-size: 12pt">o</FONT></TD><TD STYLE="text-align: justify; padding-right: 11.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">There
was no such restatement required.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 11.9pt 0 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt"><I>Identification of a material misstatement of
financial statements in the current period in circumstances that indicate that the misstatement would not have been detected by
the company's ICOFR</I></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Courier New, Courier, Monospace; font-size: 12pt">o</FONT></TD><TD STYLE="text-align: justify; padding-right: 11.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">There
was no such identification of a material misstatement. Also, the Company noted that the 2015 audit had not identified material
corrected or uncorrected audit differences </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 11.9pt 0 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Century Gothic,sans-serif; font-size: 12pt">-</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt"><I>Ineffective oversight of the company&rsquo;s
external financial reporting and ICOFR by the company's audit committee</I></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.2pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Courier New, Courier, Monospace; font-size: 12pt">o</FONT></TD><TD STYLE="text-align: justify; padding-right: 11.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt">The
Company assessed that this was not the case, given the nature of the deficiencies identified and the frequency of communication
with the Audit Committee<I>.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0">Taking all of the above into account, the Company
concluded that the deficiency in the manual journal entry control related to routine transactions (alone and in combination with
the other control deficiencies) did not represent a material weakness.</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0">Although there was no indication of a material
weakness, the deficiency around the review threshold, in combination with other deficiencies the Company noted in its FSCP, led
to the conclusion that a significant deficiency existed in the Company&rsquo;s FSCP.</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0">During 2016, the Company successfully implemented
a remediation plan, shared with the Audit Committee, that aimed, among other things, to remediate the SOD issues noted during the
2015 ICOFR assessment. In particular, due to the implementation of monthly controls to monitor access rights and a specific SAP
module to prevent potential conflicting access rights, such SOD issues were resolved. As a consequence, the control over manual
journal entries was once again limited to covering only non-routine journal entries, as in previous years. The results of the 2016
ICOFR assessment performed by the Company showed no deficiencies in this control.</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 11.9pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0.1pt 0 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0.1pt 0 0"><B><I><U>Disclosure controls and procedures</U></I></B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 1.45pt 5.25pt 0 0">In addition, the Company is advising the Staff
that, as a result of the Staff&rsquo;s disagreement with management&rsquo;s conclusion as to the effectiveness of the Company&rsquo;s
disclosure controls and</P>


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<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 1.45pt 5.25pt 0 0">procedures as of December 31, 2015, the Company
has decided to amend its 2015 Form 20-F to update (i) its assessment of the effectiveness of its disclosure controls and procedures
as of December 31, 2015 and (ii) the certifications required by Rule 13a-14(a) set forth in exhibits 12.1 and 12.2.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 1.45pt 5.25pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 1.45pt 5.25pt 0 0">Subject to final resolution of the points described
in this letter, we will amend the 2015 Form 20-F as follows (additional text italicized):</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 1.45pt 5.25pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 1.45pt 5.25pt 0 0"><B>Disclosure Controls and Procedures</B> &mdash;
The Company carried out an evaluation under the supervision and with the participation of the Company&rsquo;s management, including
the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company&rsquo;s
disclosure controls and procedures as of December 31, 2015. There are inherent limitations to the effectiveness of any system of
disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls
and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving
their control objectives. Based on the Company&rsquo;s evaluation of its disclosure controls and procedures <I>and, since the Company
failed to complete its evaluation of internal control over financial reporting by the deadlines prescribed in the SEC&rsquo;s rules
and forms, </I>the Chief Executive Officer and Chief Financial Officer concluded that the Company&rsquo;s disclosure controls and
procedures were <I>not</I> effective as of December 31, 2015 to provide reasonable assurance that information required to be disclosed
in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the SEC&rsquo;s applicable rules and forms, and that it is accumulated and communicated to the Company&rsquo;s
management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure. <I>The Company timely filed its annual report on Form 20-F for the year ended December 31, 2016 and concluded
that its disclosure controls and procedures were effective as of the end of the period covered by such report.</I></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 1.45pt 5.25pt 0 0; text-indent: 35.4pt">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 5.05pt 0 0">The Company acknowledges that it and its management
are responsible for the adequacy and accuracy of their disclosures, notwithstanding any review, comments, action or absence of
action by the Staff.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 5.05pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">If you have any questions or require any additional
information with respect to the above, please do not hesitate to contact me at +39 080 882 0111.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">[<I>signature page follows</I>]</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt 1.5in; text-indent: 2in">Sincerely,</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-indent: 3.5in">&#9;<U>/s/ Vittorio Notarpietro&#9;</U></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-indent: 3.5in">Vittorio Notarpietro</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-indent: 3.5in">Chief Financial Officer</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">cc: &#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pietro Fioruzzi</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><I>Cleary Gottlieb Steen &amp; Hamilton
LLP</I></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">David Gottlieb</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><I>Cleary Gottlieb Steen &amp; Hamilton
LLP</I></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 0 1in">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: center"><I>Natuzzi Response Letter &ndash;
Signature Page</I></P>



<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>


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