Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited
take no responsibility for the contents of this announcement, make no representation as toits accuracy or completeness and expressly disclaim any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the contents of thisannouncement.

PRADA spa
(Stock Code: 1913)

ANNOUNCEMENT
OF THE INTERIM RESULTS FOR THE SIX MONTHSENDED JULY 31, 2016

- Retail net sales were Euro 1,276.6 million, -17.8% compared with thesix months ended July 31, 2015 (-15.9% at constant exchange rates)- Wholesales net sales were Euro 252.7 million, +1.5% compared withthe six months ended July 31, 2015 (+2.9% at constant exchange rates)- Royalties were Euro 24.9 million, +7.9% compared with the six months
ended July 31, 2015
- EBIT was Euro 213.7 million, or 13.8% on net revenues- Group’s net income was Euro 141.9 million, or 9.1% on net revenues- Net Operating cash flow were Euro 266.7 million- Net financial position standing negative at Euro 251.7 million as at
July 31, 20161

Consolidated results for the six months ended July 31,
2016
The Board of Directors (the “Board”) of PRADA S.p.A. (the “Company”, or“PRADA spa”) announces the unaudited Consolidated results of the Company
and its subsidiaries (collectively, the “Group”) for the six months ended July
31, 2016, together with the unaudited comparative figures for the same six
months period ended July 31, 2015. The following financial information has
been prepared in accordance with the International Financial ReportingStandards (“IFRS”) as adopted by the European Union. The Consolidated
results of the Group for the year ended January 31, 2016, were audited by
Deloitte & Touche S.p.A.

Key financial informationsix
monthsended
July 312016(unaudited)

twelvemonthsended
January 31
2016(audited)sixmonthsended
July 312015(unaudited)change %six months
2016
vssix months
2015

1,554,172
329,99121.2%
213,701
13.8%
141,9230.055
108,085
266,728

3,547,771
802,75822.6%
502,89314.2%
330,8880.129
336,895
368,465

1,824,433
440,05424.1%
293,21416.1%
188,5930.074
176,235
63,374-14.8%-25.0%-27.1%-24.7%-25.7%
n/a

12,22812,414

12,365-1.1%

Key statement of financial positionindicators(amounts in thousands of Euro)

July 312016(unaudited)

January 31
2016(audited)

July 312015(unaudited)changeJul 2016
vs Jan2016

Net operating working capital
Net invested capital
Net financial position surplus/(deficit)
Group shareholders’ equity

674,446
3,166,777(251,727)
2,894,984

665,156
3,212,172(114,795)
3,080,340

747,574
3,238,133(259,749)
2,960,909

9,290(45,395)(136,932)(185,356)

Key economic figures(amounts in thousands of Euro)Net revenues
EBITDAEBITDA %EBITEBIT %Net income of the Group
Earnings per share (Euro)
Capital expenditure
Net operating cash flows
Average number of employees

Highlights for the six months ended July 31, 2016
The net revenues for the first six months of fiscal year 2016 amounted toEuro 1,554.2 million, down by 14.8% compared to the same period of lastyear. The decrease was entirely attributable to a sales decline in the retailchannel as the wholesales and royalties were positive.
In the six-month period, management undertook several initiatives to assist
the retail performance in the context of an uncertain economy that did notshow any significant improvement with respect to the previous year. So,leveraging its craftsmanship, manufacturing capacity and unique stylistic
identity, the Group launched new collections in all product categories for all2

brands. These include, among others, the new iconic Prada Cahier, Prada
Pionnère and Miu Miu Dahlia handbags, as well as several one-of-a-kindeditions created to celebrate seasonal festivities, retail events and business
partnerships. Despite good results in new products, sales were down almost
everywhere, but, again, the most significant declines were in the leather
goods division, especially in the Far East.
The Group combined its commitment to product design with effective
advertising campaigns and communication activities, and directed its efforts
toward additional enhancement of the customer experience. To this end theGroup started to relocate or expand some of its most important shops, suchas the Prada stores on Canton Road in Hong Kong and at Plaza 66 in Shanghai,
and began to roll-out new retail concepts. At the same time, new stores
were opened only in areas deemed strategic, such as Zurich and Moscow, andsuch openings were counterbalanced with selected store closings insecondary cities or where expiring leases could be not be renewed underconditions deemed in line with the market. As in the previous year, all these
initiatives were accompanied by a continuous review of corporate processes
and savings to limit the pressure on operating margins.
At the end of the six-month period the results of the cost containment
actions allowed the Group, despite the sales contraction, to achieve an EBIT
margin of 13.8%, compared to 16.1% for the same period of last year. The
Group’s net income was Euro 141.9 million, or 9.1% as a percentage of net
revenues, whereas it was 10.3% for the same six-month period of 2015.
The net operating working capital at July 31, 2016 is Euro 674.4 million,
practically unchanged from the Euro 665.2 million of January 31, 2016. The
Group succeeded in optimizing the management of this item thanks to better
retail planning and operations, thus benefiting the Group’s net financial
debt, which after the dividend payment of Euro 281.5 million in June 2016
stood at Euro 251.7 million at July 31, 2016.

3

Consolidated Statement of Profit or Loss for the six months
ended July 31, 2016

(amounts in thousands of Euro)Net revenues
Cost of goods soldsix months
ended
% on
July 31
Net
2016 revenues(unaudited)

Note

3

six months
ended
% on
July 31
Net2015 revenues(unaudited)

1,554,172(432,231)

100.0%-27.8%

1,824,433(498,520)

100.0%-27.3%

1,121,941

72.2%

1,325,913

72.7%(908,240)-58.4%(1,032,699)-56.6%

213,701

13.8%

293,21416.1%(6,756)-0.4%(9,073)

-0.5%

558

0.0%

1,562

0.1%

207,503

13.4%

285,703

15.7%(62,206)-4.1%(94,139)-5.2%

145,297

9.3%

191,564

10.5%

3,374

0.2%

2,971

0.2%

Net income – Group

141,923

9.1%

188,593

10.3%

Depreciation, amortization andimpairment

116,290

7.5%

146,840

8.0%

EBITDA

329,99121.2%

440,054

24.1%

Gross margin
Operating expenses

4

EBIT
Interest and other financial
income/(expenses), net
Dividends from investments

5

Income before taxes
Taxation

6

Net income for the period
Net income – Non-controlling interests

Basic and diluted earnings per share (inEuro per share)

7

0.055

4

0.074

Consolidated statement of financial position(amounts in thousands of Euro)

Note

AssetsCurrent assets
Cash and cash equivalents
Trade receivables, net
Inventories
Derivative financial instruments – current
Receivables from, and advance payments to,related parties - current
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Associated undertakings
Deferred tax assets
Other non-current assets
Derivative financial instruments - non current
Receivables from, and advance payments to,related parties – non-current
Total non-current assets
Total Assets

9
8

as at
July 312016(unaudited)

as atJanuary 31
2016(audited)

675,423
314,340
625,482
11,423680,601
254,183
692,672
11,682

10

17,793

19,62912

211,616
1,856,077

229,671
1,888,438

11
11

1,505,147
918,685
16,689272,505
116,650204

1,517,779
932,238
17,354
280,572
113,954
721

3,762

5,499

2,833,642
4,689,719

2,868,117
4,756,555

334,523
6,319
265,376
70,39625,153
218
127,263829,248

270,1125,244
281,699
80,744
11,095654
142,271
791,819586,735
64,28770,03733,754
174,344
16,264945,421
1,774,669

520,475
69,405
69,23336,882
161,317
10,047867,359
1,659,178

Share capital
Total other reserves
Translation reserve
Net income for the year
Equity attributable to owners of Group
Equity attributable to Non-controlling interests
Total Equity

255,882
2,386,277
110,902
141,923
2,894,984
20,0662,915,050

255,882
2,355,023
138,547
330,888
3,080,340
17,037
3,097,377

Total Liabilities and Total Equity

4,689,719

4,756,555

Net current assets
Total assets less current liabilities

1,026,829
3,860,471

1,096,619
3,964,736

13
10

Liabilities and Shareholders’ Equity
Current liabilities
Bank overdrafts and short-term loans
Payables to related parties - current
Trade payables
Tax payables
Derivative financial instruments - current
Obligations under finance leases - current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term financial payables
Post-employment benefits
Provision for risks and charges
Deferred tax liabilities
Other non-current liabilities
Derivative financial instruments non-current
Total non-current liabilities
Total Liabilities

14
15

16

17

5

Statement of changes in consolidated shareholders’ equity(amounts in thousands of Euro, except for number of shares)
EquityEquityNonattributacontrolble toling
owners ofinterestsGroup(amounts inthousands of Euro)

Number of
SharesShare
CapitalTranslation
Reserve

Fair Value
Share
Cash flow
Total
Actuarial Available for
Otherpremium
hedge
Other
Reservesalereserves
reserve
reserve
Reserves
Reserve

Balance at January
31, 2015 (audited)

2,558,824,000

255,882

130,996410,047(35,323)(13,481)

Allocation of 2014
net income

-

-

-

-

-

-

-

Dividends

-

-

-

-

-

-

- (281,471) (281,471)

-

-

-

-

-

-

-

(719)

-

-

-

-

-

-

-

-

-

39,974-

16,044

-

-

-

-

-

-

1,322

2,558,824,000

255,882

170,970410,047(19,279)(12,159)

-

-

-

-

-

-

-

(7)

(7)

-

(7)

-

(7)

-

-

(32,423)-

12,179-(6,611)-

5,568

142,295

115,440(444)

114,996

-

-

-

-

-

3,998

-

-

3,998

-

3,998

6

4,004

Balance at January
31, 2016 (audited)

2,558,824,000

255,882

138,547410,047(7,100)(8,161)

Allocation of 2015
net income

-

-

-

-

-

-

-

Dividends

-

-

-

-

-

-

- (281,471) (281,471)

-

-

-

-

-

-

-

(1,283)

-

-

-

-

-

-

-

-

-

(27,645)-(14,130)

-

-

-

-

-

-

(2,264)2,558,824,000

255,882

110,902410,047(21,230)(10,425)

Transactions with
non-controllinginterests
Capital injection in
subsidiaries
Comprehensive
income for the six
months(recyclable to P&L)
Comprehensive
income for the six
months(not recyclable to
P&L)
Balance at July 31,2015 (unaudited)
Transactions with
non-controllinginterests
Comprehensive
income for the six
months(recyclable to P&L)
Comprehensive
income for the six
months(not recyclable to
P&L)

Transactions with
non-controllinginterests
Capital injection in
subsidiaries
Comprehensive
income for the six
months(recyclable to P&L)
Comprehensive
income for the six
months(not recyclable to
P&L)
Balance at July 31,
2016 (unaudited)

6

11,115 1,790,771 2,163,129

Net
income450,730 3,000,737

Total
Equity17,410 3,018,147

-

-

-

-

(281,471)(3,228)(284,699)

(719)

-

(719)

(39)

(758)

-

-

-

-

409

409

(3,571)-

12,473

188,593

241,040

2,923

243,963

-

-

1,322

-

1,322

-

1,322

450,730

450,730 (450,730)

7,544 1,959,311 2,345,464

933 1,959,304 2,355,023

188,593 2,960,909

330,888 3,080,340

17,475 2,978,384

17,037 3,097,377

-

-

-

-

(281,471)(369)(281,840)(1,283)-(1,283)(249)(1,532)

-

-

-

-

109

109

(486)

-

(14,616)

141,923

99,662

3,538

103,200--(2,264)-(2,264)-(2,264)

330,888

330,888 (330,888)

447 2,007,438 2,386,277

141,923 2,894,984

20,066 2,915,050

Condensed statement of consolidated cash flows
six months
ended
July 312016(unaudited)

six months
ended
July 312015(unaudited)

Net cash flows from operating activities

266,728

63,374

Cash flows generated/(utilized) by investing activities(114,675)(235,889)

Cash flows generated/(utilized) by financing activities(156,243)

1,902(4,190)(170,613)(amounts in thousands of Euro)

Change in cash and cash equivalents, net of bank overdrafts

Statement of consolidated comprehensive income
sixmonthsended
July 312016(unaudited)

twelvemonthsended
January 31
2016(audited)sixmonthsended
July 312015(unaudited)

145,297

333,338

191,564

Change in Translation reserve
Tax impact
Change in Translation reserve less tax impact(27,480)(27,480)

7,580
7,580

39,92739,927

Change in Cash Flow Hedge reserve
Tax impact
Change in Cash Flow Hedge reserve less tax impact(18,080)
3,950(14,130)

38,907(10,684)
28,223

21,734(5,690)16,044

(648)
162
(486)

(13,576)
3,394(10,182)(4,761)
1,190(3,571)

Change in Actuarial reserve
Tax impact
Change in Actuarial reserve less tax impact(2,409)145(2,264)

6,526(1,200)
5,326

1,823
(501)
1,322

Consolidated comprehensive income for the period

100,937

364,285

245,286

Comprehensive income for the period – Noncontrolling Interests

3,538

2,485

2,923

Comprehensive income for the period – Group

97,399361,800

242,363(amounts in thousands of Euro)Net income for the period – ConsolidatedA) Items recyclable to P&L:

Change in Fair Value reserve
Tax impact
Change in Fair Value reserve less tax impactB) Item not recyclable to P&L:

7

Notes to the consolidated results for the six months
ended July 31, 2016
1.

Presentation of PRADA GroupPRADA spa (the “Company”), together with its subsidiaries (jointly the“Group”), is listed on the Hong Kong Stock Exchange (HKSE code: 1913). It is
one of the world leaders in the luxury goods sector where it operates with
the Prada, Miu Miu, Church’s and Car Shoe brands in the design, production
and distribution of luxury handbags, leather goods, footwear, apparel andaccessories. The Group also operates under specific licensing agreements inthe eyewear and fragrances, and, starting from 2014, in the food & beveragebusiness through the historical Milanese patisserie Marchesi 1824. Its
products are sold in 70 countries worldwide through a network that included
622 Directly Operated Stores (DOS) at July 31, 2016, and a select network ofluxury department stores, independent retailers and franchise stores.
The Company is a joint-stock company, registered and domiciled in Italy. Its
registered office is in via Fogazzaro 28, Milan, Italy.

2.

Basis of preparation

The financial information for the six months ended July 31, 2016, included inthis Announcement refers to the Group of companies controlled by PRADA
spa, holding company of the PRADA Group (the "Group"), and is based on its
unaudited Interim condensed consolidated financial statements. Such Interim
results for the six months ended July 31, 2016, were prepared on a consistentbasis compared to the Consolidated financial statements of the Group for thetwelve months ended January 31, 2016, with the exception of the revised
IFRS issued by the International Accounting Standard Board (“IASB”) below
reported.
IFRS also refer to all the International Accounting Standards (“IAS”) and all
the interpretations of the International Financial Reporting Interpretation
Committee (“IFRIC”), previously named the Standing Interpretations
Committee (“SIC”).
Amendments issued by the IASB, endorsed by the European Union andapplicable to the PRADA Group from February 1, 2016
The following amendments to IFRS have been endorsed by the European
Union and are applicable to the PRADA Group effective from February 1,
2016. These changes did not have any significant impact on the figures
reported in this Announcement: Amendment to IAS 16 and IAS 38 “Clarification of Acceptable Methods ofDepreciation and Amortization”;
 Amendment to “IFRS 11 Accounting for Acquisitions of Interests in Joint
Operations”;
 Disclosure Initiative: Amendments to “IAS 1 Presentation of Financial
Statements”;
 Annual Improvements to IFRSs (2012–2014 Cycle);8 Amendments to “IAS 27 Separate Financial Statements”.

Change in accounting estimates
In the six-month period, in accordance with the aforementioned applicableaccounting standards, the Directors revised the estimated useful lives ofsome depreciable assets, mainly for the retail area, as shown below:
retail area
category ofdepreciable asset
Improvements to leased retail premises
Furniture and fixtures in leased premises
Store-lease acquisition

useful life used until
Jan. 31, 2016shorter of lease term and10 years5 – 10 years
shorter of lease term and10 years

useful life usedfrom Feb. 1, 2016lease term (*)
lease term (*)
lease term (*)(*) the lease term includes the renewal period when the exercise of the option is deemed reasonable

The Prada Group has amassed experience in the development andmanagement of retail premises under its long-term expansion plan andcontinuous improvements in practices and processes. The experience andinformation accumulated over the years led management to consider the 10year limit as no longer representative of the useful life of improvements
made to retail premises. In fact, the average life of a store exceeds ten years
and the benefits from improvements made to retail space and from thefurniture and fixtures installed there, especially when a new store is opened,
continue to flow to the Group until the store is closed down.
February 1, 2016 has been conventionally identified as the date on which theaforementioned accounting estimates were changed. The extension of theuseful lives affected profit or loss by reducing the depreciation andamortization charges by Euro 27.3 million for the six months ended July 31,
2016: Euro 1.2 million at a cost of goods sold level and Euro 26.1 million at
an operating expenses level.

3.

Net revenues analysis

Net revenues for the six months ended July 31, 2016
six months
ended
July 312016(unaudited)(amounts in thousands of Euro)Net sales of directly operated stores (DOS)Sales to independent customers andfranchisees
Royalties
Net revenues, total

1,276,588

82.1%

1,552,393

252,679

16.3%

248,963

24,905
1.6%
1,554,172 100.0%

9

six months
ended
July 312015(unaudited)%change85.1% -17.8%
13.6%

1.5%

23,0771.3%
7.9%
1,824,433 100.0% -14.8%

Net sales of Directly Operated Stores (DOS)six months
ended
July 312016(unaudited)

six months
ended
July 312015(unaudited)%changeNet sales of directly operated stores (DOS) bygeographical area
Italy
EuropeAmericas
Asia PacificJapan
Middle East
Other countries
Total

158,485 12.4%
271,034 21.2%
168,496 13.2%
434,984 34.1%
189,736 14.9%
52,820
4.1%
1,033
0.1%
1,276,588 100.0%

200,675 12.9%
340,955 22.0%
203,813 13.1%
557,643 35.9%
194,222 12.5%
53,418
3.5%
1,667
0.1%
1,552,393 100.0%-21.0%-20.5%-17.3%-22.0%-2.3%-1.1%-38.0%-17.8%Net sales of directly operated stores (DOS) by
brand
Prada
Miu Miu
Church's
Other
Total

1,028,497 80.6%
217,498 17.0%
25,073
2.0%
5,520
0.4%
1,276,588 100.0%

1,262,180 81.3%
257,926 16.6%
25,777
1.7%
6,510
0.4%
1,552,393 100.0%-18.5%-15.7%-2.7%-15.2%-17.8%Net sales of directly operated stores (DOS) by
product line
Clothing
Leather goods
Footwear
Other
Total

223,271 17.5%
776,789 60.8%
247,585 19.4%
28,943
2.3%
1,276,588 100.0%

248,927 16.0%
997,078 64.2%
272,890 17.6%
33,4982.2%
1,552,393 100.0%-10.3%-22.1%-9.3%-13.6%-17.8%(amounts in thousands of Euro)Net sales to independent customers and franchisees(amounts in thousands of Euro)Net Sales to independent customers andfranchisees by brand
Prada
Miu Miu
Church's
Other
Total

10

six months
ended
July 312016(unaudited)

six months
ended
July 312015(unaudited)

205,100 81.2%
31,654 12.5%
14,673
5.8%
1,252
0.5%
252,679 100.0%

199,313 80.0%
2.9%
35,992 14.5% -12.1%
12,602
5.1% 16.4%
1,056
0.4% 18.6%
248,963 100.0%
1.5%%changeNumber of storesas atJuly 312016
DOS
franchises

as atJanuary 31
2016
DOS
franchises

as atJuly 31
2015
DOS
franchises

Prada
Miu Miu
Church’s
Car Shoe
Marchesi

388
173
54
5
2

23
8
-

386
173
52
5
2

26
10
-

372
174
54
5
1

27
10
-

Total

622

31

618

36

606

37

as at
July 312016
DOS
franchises

as atJanuary 31
2016
DOS
franchises

as atJuly 31
2015
DOS
franchises

ItalyEuropeAmericas
Asia PacificJapan
Middle East
Africa

53
171
115
184
77
20
2

4
22
5
-

54
167
117
183
74
21
2

5
26
5
-

53
167
113
181
72
18
2

5
27
5
-

Total

622

31

618

36

606

37

% on netrevenues

4.

Operating expenses
six months
ended
July 312016(unaudited)% on netrevenues

six months
ended
July 312015(unaudited)

Product design and development costs
Advertising and communications costs
Selling costs
General and administrative costs

64,484
76,594
682,026
85,136

4.1%
4.9%
43.9%
5.5%

69,30898,534751,977
112,880

3.8%
5.4%
41.2%
6.2%

Total Operating expenses

908,24058.4%

1,032,699

56.6%(amounts in thousands of Euro)

5.

Interest and other financial income/(expenses), net
six months
ended
July 312016(unaudited)

six months
ended
July 312015(unaudited)

Interest expenses on borrowings
Interest expenses IAS 19
Interest income
Exchange gains / (losses) – realized
Exchange gains/ (losses) – unrealized
Other financial income / (expenses)(7,722)
(89)
2,008
2,943
(2,615)(1,281)(7,592)
(58)
1,548
3,930
(5,360)(1,541)

Total(6,756)(9,073)(amounts in thousands of Euro)

11

6.

Taxation
six months
ended
July 312016(unaudited)

six months
ended
July 312015(unaudited)

Current taxation
Deferred taxation

49,047
13,159114,514(20,375)

Income taxes

62,206

94,139(amounts in thousands of Euro)

7.

Earnings and dividends per share

Earnings per share
Earnings per share are calculated by dividing the net income of the period
attributable to Group’s shareholders by the weighted average number ofordinary shares in issue.
sixmonthsended
July 312016(unaudited)Group net income in Euro
Weighted average number of ordinary shares in issue
Earnings per share in Euro, calculated on weighted average
number of sharessixmonthsended
July 312015(unaudited)

141,923,268 188,593,497
2,558,824,000 2,558,824,000
0.055

0.074

Dividend per share
During the six months ended July 31, 2016, the Company distributed
dividends of Euro 281,470,640, as approved by the Shareholders’ Meeting
held on May 24, 2016, to approve the financial statements for the year ended
January 31, 2016.
The payment of the dividends and the related Italian withholding tax liability(Euro 14.6 million), arising from the application of the Italian ordinary
withholding tax rate to the whole amount of dividends paid to beneficial
owners of the Company shares held through the Hong Kong Central Clearing
and Settlement System, was completed by July 31, 2016.

12

8.

Inventories, net
as atJuly 312016(unaudited)

as atJanuary 31
2016(audited)

Raw materials
Work in progress
Finished products
Allowance for obsolete and slow moving inventories

105,065
21,242549,307(50,132)

107,782
20,925
614,423(50,458)

Total

625,482

692,672(amounts in thousands of Euro)The reduction in finished products amounting to Euro 64.8 million represents
the result of actions undertaken to gradually lowering the level ofinventories.
Movements on the allowance for obsolete and slow moving inventories areanalyzed as follows:Rawmaterials

Finished
Products

Total

26,757

23,70150,458

(5)
-

(10)
173
(484)

(15)
173
(484)

26,752

23,38050,132

as atJuly 312016(unaudited)

as atJanuary 31
2016(audited)

Trade receivables – third parties
Allowance for bad and doubtful debts
Trade receivables – related parties

292,552(6,604)28,392

235,718(6,546)25,011

Total

314,340

254,183(amounts in thousands of Euro)
Balance at January 31, 2016 (audited)
Exchange differences
Increases
Utilization
Balance at July 31, 2016 (unaudited)9.

Trade receivables, net(amounts in thousands of Euro)

Trade receivables increased by Euro 60.2 million, in line with the seasonal
trend and the positive performance of the wholesale channel occurred in thelast months of the period.
Trade receivables from related parties mainly refer to the sale of finishedproducts to Fratelli Prada spa, a related company and franchisee of the
PRADA Group.

13Movements of the allowance for doubtful debts during the period were as
follows:(amounts in thousands of Euro)

as at
July 312016(unaudited)

as atJanuary 31
2016(audited)

6,546

7,784

(59)
206
(49)
(40)

(47)
418
(1,321)
(288)

6,604

6,546

Opening balance
Exchange differences
Increases
Utilized
Reversals
Closing balance (unaudited)

The following table contains a summary of total receivables by due date
before the allowance for doubtful debts:
as atJuly 31,2016(unaudited)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

Trade receivables

320,944

267,527

18,696

5,903

Total

320,944

267,527

18,696

5,903(amounts inthousands of Euro)as at(amounts inJanuary 31,
thousands of Euro)2016(audited)

Overdue (days)
91 < 120

≥ 120

6,308

7,352

15,158

6,308

7,352

15,158

Overdue (days)
Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

Trade receivables

260,729

217,808

17,077

6,848

5,257

3,400

10,339

Total

260,729

217,808

17,077

6,848

5,257

3,400

10,33914

The following table contains a summary of trade receivables by due dateafter the allowance for doubtful debts:(amounts inthousands of Euro)

as at
July 31Not
2016 overdue(unaudited)

Overdue (days)
1 ≤ 3031 ≤ 60 61 ≤ 90

91 < 120≥ 120

Trade receivables
less allowance for
doubtful accounts

314,340

267,021

18,679

5,903

6,308

7,352

9,077

Total

314,340

267,021

18,679

5,903

6,308

7,352

9,077

(amounts inthousands of Euro)

as at
January 31
Not2016 overdue(audited)

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

Trade receivables
less allowance for
doubtful accounts

254,183

217,327

17,077

6,848

5,257

3,400

4,274

Total

254,183

217,327

17,077

6,848

5,257

3,400

4,274

10. Receivables from, and advance payments to, relatedparties – current and non-current
Receivables from, and advance payments to, related parties current are
detailed as follows:(amounts in thousands of Euro)

as at
July 312016(unaudited)

as atJanuary 31
2016(audited)

Prepaid sponsorship
Other receivables and advances

11,686
6,107

13,626
6,003

Receivables from and advances to related parties - current

17,793

19,629Receivables from, and advance payments to, related parties non-current are
detailed as follows:
as atJuly 312016(unaudited)

as atJanuary 31
2016(audited)

Prepaid sponsorship
Deferred rental income – long-term
Loans

2,946
816
-

3,164
1,632
703

Receivables from and advances to related parties –non-current

3,762

5,499

(amounts in thousands of Euro)15

11. Capital expenditure
Changes in the net book value of Property, plant and equipment in the period
ended July 31, 2016, are as follows:(amounts inthousands ofEuro)

Land andbuildings

Balance atJanuary 31,
2016 (audited)

639,831

28,691

478,717

187,687

86,109

92

597

(0)

28

0

1

718

3,344
(8,747)(1,316)

3,552(3,751)(57)

44,993(59,986)
(103)

8,631
(17,763)
(256)

3,828
(6,731)(46)

36,055(27)

100,403(96,978)(1,805)(17,054)

(95)

6,041

(1,090)224

76(11,898)

8,129

1,429

28,6494,756

740(43,190)

513

-

-

(2,719)

(608)

(29)

(229)

(3,585)624,279

30,366495,592

181,385

84,095

Change inconsolidation
area
Additions
Depreciation
Disposals
Exchangedifferences
Other
movements
Impairment
Balance at July
31, 2016(unaudited)

Production Leasehold
Assets
Total
Furniture
Other
plant and improveunder historical& fittings tangibles
machineryments
construction
cost

96,744 1,517,779

89,430 1,505,147

Changes in the net book value of Intangible assets in the period ended July
31, 2016, are as follows:
Development
Assets Total Net
costs andin carrying
otherprogress amountintangibles(amounts inthousands ofEuro)

TradeStore Lease
Goodwill
Softwaremarks
Acquisitions

Balance atJanuary 31, 2016
(audited)

265,238

513,218

97,51015,037

14,987

26,248932,238

-

2,375

-

-

2

-

2,377

87
(5,593)
-

263
(13)
-

(6,158)-1,009(2,933)-13(1,028)
-

3,215
-

4,587
(15,725)-(5,012)

(945)

1,125

28

-

38

(4,766)

-

-

548
-

6,560
(2)

-

(7,132)
-

(24)
(2)

254,720514,898

93,025

19,69913,97422,369918,685

Change inconsolidation
area
Additions
Amortization
Disposals
Exchangedifferences
Other movements
Impairment
Balance at July
31, 2016(unaudited)16

12. Other current assets
as atJuly 312016(unaudited)

as atJanuary 31
2016(audited)

VAT
Income tax and other tax receivables
Other assets
Prepayments
Deposits

44,091
78,227
24,211
59,511
5,576

59,917
100,838
12,242
51,863
4,811

Total

211,616

229,671

as atJuly 312016(unaudited)

as atJanuary 31
2016(audited)

Guarantee deposits
Deferred rental income
Pension fund surplus
Other long-term assets

73,984
16,877
7,041
18,74873,974
13,716
7,778
18,486

Total

116,650

113,954

as atJuly 312016(unaudited)

as atJanuary 31
2016(audited)

Financial payables
Other payables

5,674
645

4,858
386

Payables to related parties - current

6,319

5,244

(amounts in thousands of Euro)

13. Other non-current assets(amounts in thousands of Euro)

14. Payables to related parties - current(amounts in thousands of Euro)

Financial payables to related parties regard two interest-free loans from thenon-controlling shareholders of the Group’s subsidiaries in the Middle East.

15. Trade payables(amounts in thousands of Euro)

as at
July 312016(unaudited)

as atJanuary 31
2016(audited)

Trade payables – third parties
Trade payables – related parties

253,663
11,713

266,701
14,998

Total

265,376

281,699

Trade payables decreased by Euro 16.3 million, consistently primarily withseasonal manufacturing trends and efficiencies achieved following therevision of industrial and logistic processes.

17

The following table contains a summary of trade payables by due date:as atJuly 312016(unaudited)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

Trade payables

265,376

235,764

13,386

5,684

1,000

1,322

8,220

Total

265,376

235,764

13,386

5,684

1,000

1,322

8,220

as at
January 31
2016(audited)

Not
overdue1 ≤ 3031 ≤ 60

61 ≤ 90

91 < 120≥ 120

Trade payables

281,699

246,525

16,418

10,190

1,912

670

5,984

Total

281,699

246,525

16,418

10,190

1,912

670

5,984

(amounts inthousands of Euro)(amounts inthousands of Euro)

Overdue (days)

Overdue (days)

16. Other current liabilities
as atJuly 312016(unaudited)

as atJanuary 31
2016(audited)

Payables for capital expenditure
Accrued expenses and deferred income
Other payables

34,246
17,05075,96754,132
16,37971,760Total

127,263

142,271(amounts in thousands of Euro)

17. Provisions for risks and charges
Movements in provisions for risks and charges are summarized as follows:
Provision
for litigation

Provision fortax disputes

Other
Provisions

Total

Balance at January 31, 2016
(audited)

2,041

22,84644,346

69,233

Exchange differences
Reversals
Utilized
Increases

(16)
(81)
(225)
25

(2)
(79)
74

147
(970)
1,931

129
(81)
(1,274)2,030

Balance at July 31, 2016
(unaudited)

1,744

22,83945,45470,037(amounts in thousands of Euro)

Provisions represent the Directors’ best estimate of maximum contingent
liabilities at the reporting date. In the Directors’ opinion and based on theinformation available to them as supported by the opinions of independent
experts, the total amount provided for risks and charges is reasonableconsidering the liabilities that might arise. During the six months ended July
31, 2016, there were no significant developments regarding litigation ongoingat January 31, 2016. Moreover, no new contingencies requiring significant

18

adjustment to the provisions for risks and charges reported at July 31, 2016,
emerged.

Management Discussion and Analysis for the six months
ended July 31, 2016 (unaudited)
Net sales (retail channel)
Retail sales for the six months ended July 31, 2016 were Euro 1,276.6
million, down by 17.8% from the same period of 2015. At constant exchange
rates, the decrease was 15.9%. The number of Directly Operated Stores(“DOS”) increased from 618 at January 31, 2016 to 622 at July 31, 2016.
Eighteen stores were opened in the six-month period, including at priority
locations like Zurich and the GUM department store in Moscow. Fourteen
stores that were no longer deemed strategic were closed down in the period.

Markets (retail channel)
The Far East market generated net sales of Euro 435 million, a decrease of
22% (-18% at constant exchange rates) compared to the first six-month of
2015. Hong Kong and Macau continued to weigh heavily on the region’scontraction, although other areas, including Mainland China, also had lower
sales compared to the same period of the previous year. Overall, the Greater
China region generated retail sales of Euro 278.7 million, down by 24.4% atcurrent exchange rates and by 21% at constant exchange rates.
Net sales in Europe were Euro 271 million, a decrease of 20.5% at current
exchange rates and 16.3% at constant exchange rates. The reduction of
traveler flows, resulting mainly from the publicized tragic events, had asignificant impact on the sales performance in the region, while local
consumption proved to be more resilient. The only exceptions in Europe
were the double-digit growth rates in local currency in Russia and thepositive signs in the UK which benefitted from the weak pound after the
Brexit.
In Italy, the retail channel generated net sales of Euro 158.5 million, downby 21% from the first six months of 2015. The reasons for this performance
were largely the same as those regarding Europe.
Net sales from the American market totaled Euro 168.5 million, down by
17.3% (-14.8% at constant exchange rates). The decrease in sales was causedby the decline in tourist flows as well as moderate sales with domestic
customers. However, sales growth was achieved in Brazil and Mexico.
Japan had net sales of Euro 189.7 million, down by 2.3% from the same
period of last year (-9.4% at constant exchange rates). The strong
appreciation of the Japanese yen since the start of the year adversely
affected the flow of tourists from China. The decline in Japan was marginallyoffset by sales growth in Hawaii.
Net sales in the Middle East region fell by 1.1% at current exchange rates(+0.2% at constant exchange rates). Sales were sustained by local
consumption as the region continued to suffer from low tourist flows.
19

Products (retail channel)
Footwear generated net sales of Euro 247.6 million in the retail channel, adecrease of 9.3% at current exchange rates (-6.4% at constant exchange
rates). The performance of this product division was affected by a generalcontraction in all regions except the Middle East, where the market
delivered double-digit growth.
The clothing division produced net sales of Euro 223.3 million, a 10.3%
decrease at current exchange rates (-7.8% at constant exchange rates). Sales
were down in all geographical areas except Japan and the Middle East.
Net sales of leather goods were Euro 776.8 million, down by 22.1% comparedto the same six-month period of last year (-20.7% at constant exchange
rates). Negative trends were reported for all regions.

Brands (retail channel)
The Prada brand generated retail sales of Euro 1,028.5 million, an 18.5%
decrease at current exchange rates (-16.6% at constant exchange rates).
Sales fell in all regions; the Far East accounted for most of the decline,
although sales in Japan were down just slightly.
Miu Miu generated net sales of Euro 217.5 million, a 15.7% decrease atcurrent exchange rates (-14.2% at constant exchange rates). The Middle East
region had double-digit growth for the brand, but sales fell in all othergeographical areas compared to the same six-month period of 2015.
Net sales of the Church’s brand were Euro 25.1 million through its DOS
network, a 2.7% decrease compared to the same six-month period of 2015(+1.5% at constant exchange rates). The brand achieved organic sales growthin Europe and Italy, its two main markets.
The “other” brand category consists largely of the Marchesi 1824 patisserie
products, whose growth is benefitting from the expansion plan implemented
in the second half of 2015, and the Car Shoe brand, which experienced adouble-digit sales decline for the six-month period.

Net sales to independent customers and franchisees
The performance of the Prada brand in the first six months of 2016 reflected
the high-standing accounts selected by the Group pursuant to the long-term,
thorough rationalization process undertaken. The increase for the period wasessentially attributable to new partnerships forged with leading electronic
retailers (“e-tailers”).
The performance of the Miu Miu brand in this channel was affected by anadverse trend for leather goods, while shoes and clothing sales were up
compared to the six months ended July 31, 2015.
The double-digit growth for the Church’s brand compared to the previous
period was even higher at constant exchange rates (+27.6%), and positive
almost everywhere.

20

Royalties
In the six months ended July 31, 2016, licensing agreements generated
royalty income of Euro 24.9 million, up by 7.9% from the same six-month
period of 2015. The increase was largely due to the new Miu Miu fragrance,
which was launched gradually from July 2015.

Operating results
During the six-month period, management expanded the initiatives
introduced last year with the result of limiting the pressure of the sales
decline on the operating margin.
In the period the Directors revised the useful lives of certain depreciabletangible and intangible assets to better represent their use in the Group’s
processes, mainly in the retail area. As explained above the relevant impact
on profit or loss was a Euro 27.3 million reduction of depreciation andamortization for the six-month period ended July 31, 2016: Euro 1.2 million
at a cost of goods sold level and Euro 26.1 million at an operating expenses
level.
The gross margin for the six months ended July 31, 2016 was Euro 1,121.9
million, or 72.2% of net revenues, fairly in line with that of the previous
period.
Operating expenses for the six months ended July 31, 2016 amounted to Euro
908.2 million, a decrease of Euro 124.5 million compared to the same periodof 2015. As a percentage of net revenues, operating expenses rose from
56.6% in 2015 to 58.4% in the current period.
Selling costs decreased due to lower variable labor and lease costs, but also
as a result of measures adopted to run the retail operations more efficiently.
Notwithstanding such decrease, the incidence of selling costs on net
revenues grew from 41.2% to 43.9% compared to the previous six-month
period.
Advertising and communications as a percentage on net revenues fell from
5.4% to 4.9% in relation to a Euro 21.9 million decrease in their amount. The
main differences emerged from a concentration of special events in the firsthalf of 2015 and a different phasing of the media spending in the current
year.
General and administrative costs decreased by Euro 27.7 million as a resultof various initiatives on discretionary expenditure items, like consultancies
and general services; their incidence on net revenues fell from 6.2% for thesix months ended July 31, 2015 to 5.5% for the same period of 2016.
EBITDA for the six months ended July 31, 2016 was Euro 330 million,
corresponding to 21.2% of net revenues, a dilution of 290 basis points
compared to the same period of last year. The EBIT for the six-month period
was Euro 213.7 million, or 13.8% of net revenues, compared to 16.1% for thesame period of last year. The EBIT trend was from 6% on net revenues in thefirst three-month period of 2016 to 19% in the second three-month period.

21

Net income
The finance costs of the period were in line with those of the previous
period, since the increase in the average gross bank debt wascounterbalanced by lower borrowing rates, also thanks to the refinancing
activities undertaken.
The tax rate was 30%, compared to 32.9% for the same six-month period oflast year. The decrease is attributable primarily to favorable tax laws
enacted in Italy and other countries, although the geographical compositionof the sources of taxable income was less advantageous.
The Group’s net income for the six months amounted to Euro 141.9 million,
or 9.1% of net revenues, compared to Euro 188.6 million or 10.3% for thesame six-month period of 2015.

Net invested capital
The following table contains the statement of financial position, as
reclassified in order to provide a better picture of the composition of Net
Invested Capital.
(amounts in thousands of Euro)

as at
July 312016(unaudited)

as atJanuary 31
2016(audited)

Non-current assets (excluding deferred tax assets)
Trade receivables, net
Inventories, net
Trade payables
Net operating working capital
Other current assets (excluding items of financial position)
Other current liabilities (excluding items of financial position)
Other current assets/(liabilities), net
Provision for risks
Post-employment benefits
Other long-term liabilities
Deferred taxation, net
Other non-current assets/(liabilities)
Net invested capital
Shareholder's equity – Group
Shareholder's equity – Non-controlling interests
Total Consolidated shareholders' equity
Long term financial payables
Short term financial, net surplus/(deficit)
Net financial position surplus/(deficit)
Shareholders’ equity and net financial position
Net Debt to Consolidated equity ratio

2,561,138
314,340
625,482(265,376)
674,446
240,832(223,457)
17,375(70,037)(64,287)(190,609)
238,751(86,182)
3,166,777(2,894,984)(20,066)(2,915,050)(586,735)
335,008(251,727)(3,166,777)
8.6%

2,586,841
254,183
692,672(281,699)
665,156
260,983(234,496)
26,487(69,233)(69,405)(171,364)
243,690(66,312)3,212,172(3,080,340)(17,037)(3,097,377)(519,772)
404,977(114,795)(3,212,172)
3.7%

At July 31, 2016, the Group maintains a solid balance-sheet structure, basedon net invested capital of Euro 3,166.8 million, financed by net debt of Euro
251.7 million and the Group shareholder's equity of Euro 2,895 million.
The Euro 25.7 million decrease in non-current assets, consisting primarily oftangible and intangible assets, was due mainly to the Euro 116.3 million
22depreciation of the period, net of capital expenditures of Euro 108.1 million.
These investments regarded mainly the retail network (Euro 70.3 million), as
the Group undertook numerous projects to expand, relocate and renew theconcepts of stores in order to further enhance the customer experience. The
number of stores rose from 618 at January 31, 2016 to 622 at the reporting
date. Other investments totaling Euro 37.8 million were incurred in the
period for the industrial and corporate areas.
At July 31, 2016, the net working capital amounts to Euro 674.4 million,
fairly in line with January 31, 2016:- Trade receivables increased by Euro 60.2 million, in line with the seasonal
trend and the positive performance of the wholesale channel in the lattermonths of the period;- Trade payables decreased by Euro 16.3 million, consistently with seasonal
manufacturing trends and efficiencies achieved following the revision ofsome industrial and logistic processes;- Inventory decreased overall by Euro 67.2 million, benefitting from thesignificant reduction of finished products (Euro 64.8 million); thisachievement reflects the target to gradually reduce inventory, still inprogress at the end of the period.
The other current assets (net) do not show a material departure from thebalance at January 31, 2016. The Euro 5.2 million decrease was mainly
attributable to tax liabilities accrued in the period and fair value changes inderivative contracts; such changes were partially offset by the settlement of
payables for capital expenditures and payments of short-term benefits toemployees.
The other non-current liabilities (net) increased from Euro 66.3 million at
January 31, 2016 to Euro 86.2 million at July 31, 2016. The difference wasattributable to increases in long-term deferred rent liabilities and fair valuechanges in derivative contracts expiring after twelve months.
At July 31, 2016, the Group shareholder's equity amounts to Euro 2,895
million. The Euro 185.3 million decrease from the Euro 3,080.3 million ofJanuary 31, 2016 was due largely to the Euro 281.5 million dividend payment
to PRADA spa shareholders in June 2016, net of the Euro 141.9 million
Group’s net income of the six-month period and changes in IFRSs equity
reserves.

23

Net financial position surplus/(deficit)
as atJuly 312016(unaudited)

as atJanuary 31
2016(audited)

Bonds
Bank borrowing – non-current
Finance lease obligations – non-current
Total financial payables – non-current(130,000)(456,735)(586,735)(130,000)(390,475)(520,475)

Financial payables and bank overdrafts - current(334,523)(270,112)

Payables to parent company and related parties
Finance lease obligations – current
Total financial payables – current(5,674)(218)(340,415)(4,858)(654)(275,624)

Total financial payables(927,150)(796,099)-

703

Cash and cash equivalents
Total financial receivables and cash and cash equivalents - current

675,423
675,423680,601
680,601

Total financial receivables and cash and cash equivalents

675,423

681,304

Net financial surplus/(deficit), total(251,727)(114,795)

Net financial surplus/(deficit) excluding related party balances(246,053)(110,640)-36.2%-14.3%(amounts in thousands of Euro)

Financial receivables from related parties – non-current

NFP/EBITDA ratio

At July 31, 2016, the Group's net financial debt is Euro 251.7 million. During
the six-month period, net cash flows from operating activities amounting toEuro 266.7 million were used, together with new credit lines, to financecapital expenditures (Euro 114.7 million the cash out of the period) and topay dividends to PRADA spa shareholders (Euro 281.5 million).
In the first six months of 2016 the Group, in keeping with the financial
strategies adopted in the previous year, signed new medium/long-term loan
agreements for a total value of Euro 120 million. These loans, thanks tofavorable credit market conditions, allowed the Group to further reduce theaverage bank borrowing rate and simultaneously extend its loan maturities.
The new loans are secured by financial covenants in line with those forexisting loans and relating to the ratio of EBITDA to net financial position
and EBITDA to net finance costs. All the ratios were fully respected at July
31, 2016.
The total amount of unused credit lines at July 31, 2016 is Euro 472.5
million.

Events after the reporting date
Nothing to mention.
24

Outlook
The Prada Group has begun a phase of profound transformation that will
enable it to respond quickly to the challenges and opportunities of a rapidly
evolving market. Management sees 2016 as a turning point from where theGroup will return to growth by focusing on the values that made Prada theiconic company it is today: quality, innovation and ability to lead andinterpret trends.
The Group’s business and marketing strategies are redefining the products byfocusing fully on the needs of individual markets and strategic price points
for the Group’s brands, while promoting the collections by stepping up thedigital communications.
The Group is also rationalizing its retail network and optimizing the spaces
within the stores. This process will be accompanied by the roll-out of the
new store concept - as seen in the recent restyling of Prada stores inShanghai, Plaza 66, and GUM stores in Moscow - redesigned to guarantee amore exclusive shopping experience for increasingly sophisticated anddemanding international customers.
The Group is confident that all the actions underway will enable it to pave
the way for the growth in the future.

25

Corporate Governance practices
The Company is committed to maintaining a high standard of corporate
governance practices as part of its commitment to effective corporate
governance. The corporate governance model adopted by the Company
consists of a set of rules and standards aimed toward establishing efficientand transparent operations within the Group, to protect the rights of theCompany’s shareholders and to enhance shareholder value. The corporate
governance model adopted by the Company is in compliance with theapplicable regulations in Italy, as well as the principles of the Corporate
Governance Code (the “Code”) contained in Appendix 14 of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited (the “Listing Rules”).
Corporate governance practices adopted by the Company during the six
months ended July 31, 2016 (the “Reviewed Period”), are in line with thosepractices set out in the Company’s 2015 Annual Report and the Code.

Compliance with the Code
The Board has reviewed the Company’s corporate governance practices andis satisfied that the Company’s corporate governance practices havecomplied with the code provisions set out in the Code throughout the
Reviewed Period.

The Board
The Board of Directors of the Company (the “Board”) is responsible forsetting up the overall strategy as well as reviewing the operation andfinancial performance of the Company and the Group.
As resolved at the shareholders’ general meeting of the Company on May 24,
2016, each of Mr. Stefano Simontacchi and Mr. Maurizio Cereda was elected
as non-executive director of the Company - to fill the casual vacancies
caused by the resignations of Mr. Donatello Galli and Mr. Gaetano Miccichè
respectively - for a term expiring at the same time as the other current
Directors (i.e. on the date of the shareholders’ general meeting to be called
to approve the financial statements of the Company for the year ending
January 31, 2018).
The Board has established the following committees with written terms ofreference, which are of no less exacting terms than those set out in the
Code:
1.

Audit Committee

2.

Remuneration Committee

3.

Nomination Committee

Audit Committee
The Company has established an Audit Committee in compliance with Rule3.21 of the Listing Rules of which at least one member possesses appropriate
professional qualifications in accounting or related financial management
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expertise to discharge the responsibility of the Audit Committee. The Audit
Committee consists of three independent non-executive directors, namely,
Mr. Gian Franco Oliviero Mattei (Chairman), Mr. Giancarlo Forestieri and Mr.
Sing Cheong Liu. The primary duties of the Audit Committee are to assist theBoard in providing an independent view of the activities of the Company’s
financial reporting process and internal control and risk management
systems, to oversee the external audit process and the internal audit process
and to perform other duties and responsibilities as are assigned to the Audit
Committee by the Board. The Audit Committee held three meetings on April
8, 2016, June 30, 2016 and August 26, 2016, with an attendance rate of 100%
to review with the senior management, the Group’s internal and external
auditors and the board of statutory auditors the audit plan for the year 2016,
the auditing and internal controls activities, the Group’s continuingconnected transactions for 2015, the update on risk assessment and thefinancial reporting matters (including the annual results for the year 2015
and the interim results for the year 2016, before recommending them to theBoard for approval), and to recommend the appointment of the external
auditor of the Company for the three financial years ending January 31,
2019.

Remuneration Committee
The Company has established a Remuneration Committee in compliance with
the Code. The primary duties of the Remuneration Committee are to makerecommendations to the Board on the Company’s policy and structure for the
remuneration of directors and senior management and the establishment of aformal and transparent procedure for developing policy on such
remuneration. The recommendations of the Remuneration Committee arethen put forward to the Board for consideration and adoption, whereappropriate. The Remuneration Committee consists of two independent nonexecutive directors, Mr. Gian Franco Oliviero Mattei (Chairman) and Mr.
Giancarlo Forestieri, and one executive director, Mr. Carlo Mazzi. The
Remuneration Committee held three meetings on April 7, 2016, May 24,
2016, and June 29, 2016, with an attendance rate of 100% to review andrecommend certain updates to the long term incentive plan for executives
and Directors and to review the management by objectives plan for theCompany’s executives.

Nomination Committee
The Company has established a Nomination Committee in compliance with
the Code. The primary duties of the Nomination Committee are to makerecommendations to the Board on the structure, size and composition of theBoard itself, on the selection of new Directors and on the succession plansfor Directors. The Nomination Committee also assesses the independence ofindependent non-executive directors. The recommendations of theNomination Committee are then put forward to the Board for consideration
and adoption, where appropriate. The Nomination Committee consists of two
independent non-executive directors, Mr. Gian Franco Oliviero Mattei(Chairman) and Mr. Sing Cheong Liu, and one executive director, Mr. Carlo27

Mazzi. The Nomination Committee held three meetings on February 19, 2016,
April 8, 2016, and May 4, 2016, with an attendance rate of 100% to performthe annual review of the independence of independent non-executive
directors, to acknowledge the resignations of an executive director (who wasalso the Chief Financial Officer) and a non-executive director and torecommend the appointment of new directors of the Company and theappointment of the Chief Financial Officer.

Supervisory Body
In compliance with the Italian Legislative Decree 231 of June 8, 2001 (the“Decree”), the Company has established a supervisory body whose primary
duty is to ensure the functioning, effectiveness and enforcement of theCompany’s Model of Organization, adopted by the Company pursuant to theDecree. The supervisory body consists of three members appointed by the
Board selected among qualified and experienced individuals, including
independent non-executive directors, qualified auditors, executives orexternal individuals. The supervisory body consists of Mr. David Terracina(Chairman), Mr. Gian Franco Oliviero Mattei and Mr. Paolo De Paoli, who
replaced Mr. Franco Bertoli on June 30, 2016.

Board of Statutory Auditors
Under Italian law, the Company is required to have a board of statutory
auditors, appointed by the shareholders for a term of three financial year,with the authority to supervise the Company on its compliance with the law
and the By-laws, compliance with the principles of proper management and,in particular, on the adequacy of the organizational, administrative andaccounting structure adopted by the Company and on its functioning.
The board of statutory auditors of the Company consists of Mr. Antonino
Parisi (chairman), Mr. Roberto Spada and Mr. David Terracina. The alternate
statutory auditors are Ms. Stefania Bettoni and Mr. Cristiano Proserpio.

Dividends
The Company may distribute dividends subject to the approval of theshareholders in a general shareholders’ meeting.
On April 8, 2016, the Board of the Company recommended the payment of a
final dividend for the financial year 2015 of Euro/cents 11 per share in thecapital of the Company, representing a total dividend of Euro 281,470,640.
The Shareholders approved this dividend at the shareholders’ general
meeting of the Company held on May 24, 2016. The dividend was paid on
June 13, 2016.
No dividends have been declared or paid by the Company in respect of the
Reviewed Period.

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Directors’ Securities Transactions
The Company has adopted written procedures governing Directors’ securities
transactions on terms no less exacting than the standard set out in the Model
Code for Securities Transactions by Directors of Listed Issuers as set out inAppendix 10 of the Listing Rules (the “Model Code”). Relevant employees
who are likely to be in possession of unpublished inside information of theGroup are also subject to compliance with written procedures. Specific
written confirmations have been obtained from each Director to confirm
his/her compliance with the required standard set out in the Model Code andthe Company’s relevant procedures regarding directors’ securities
transactions for the Reviewed Period. There was no incident of noncompliance during the Reviewed Period.

Purchase, Sale, or Redemption of the Company’s Listed
Securities
Neither the Company nor any of its subsidiaries has purchased, sold orredeemed any of the Company’s listed securities during the Reviewed Period.

Publication of Interim Results Announcement and Interim
Report
The interim results announcement of the Company is published on thewebsites of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk
and the Company at www.pradagroup.com. The interim report will beavailable on the same websites and dispatched to the shareholders of theCompany in due course.

By Order of the Board
PRADA S.p.A.
Mr. Carlo Mazzi
Chairman

Milan (Italy), August 26, 2016
As at the date of this announcement, the Company’s executive directors are Mr.
Carlo MAZZI, Ms. Miuccia PRADA BIANCHI, Mr. Patrizio BERTELLI and Ms. Alessandra
COZZANI; the Company’s non-executive directors are Mr. Stefano SIMONTACCHI and
Mr. Maurizio CEREDA and the Company’s independent non-executive directors are
Mr. Gian Franco Oliviero MATTEI, Mr. Giancarlo FORESTIERI and Mr. Sing Cheong
LIU.

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