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IndexThe PRADA Group
Financial Review
Corporate GovernanceInterim condensed consolidated financial statements
Notes to the Interim condensed consolidated financial statements

Prada Group-Interim Financial Report oct 4_2013.indd 1

3
9
25
31
37

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Patrizio Bertelli

Miuccia Prada2

PRADA Group

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The PRADA GroupPRADA Group

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Corporate Information

4

Registered office

Via A. Fogazzaro, 28
20135 Milan, Italy

Headquarters office

Via A. Fogazzaro, 28
20135 Milan, Italy

Place of business in Hong Kong
registered under Part XI of theHong Kong Companies Ordinance

36/F, Gloucester Tower
The Landmark, 11 Pedder Street
Central, Hong Kong

Company website

www.pradagroup.com

Hong Kong Exchange Stock Code1913

Board of Directors(appointed on May 22, 2012)

Miuccia Prada Bianchi(Chairperson and Executive Director)
Patrizio Bertelli(Chief Executive Officer and Executive Director)
Carlo Mazzi(Deputy Chairman and Executive Director)
Donatello Galli(Chief Financial Officer and Executive Director)
Marco Salomoni(Non-Executive Director)
Gaetano Micciché(Non-Executive Director)
Gian Franco Oliviero Mattei(Independent Non-Executive Director)
Giancarlo Forestieri(Independent Non-Executive Director)
Sing Cheong Liu(Independent Non-Executive Director)

Audit Committee

Gian Franco Oliviero Mattei (Chairman)
Giancarlo Forestieri
Sing Cheong Liu

Remuneration Committee

Gian Franco Oliviero Mattei (Chairman)
Marco Salomoni
Giancarlo Forestieri

Nomination Committee

Gian Franco Oliviero Mattei (Chairman)
Marco Salomoni
Sing Cheong Liu

Board of Statutory Auditors(appointed on May 22, 2012)

Antonino Parisi (Chairman)
Roberto Spada (Standing member)David Terracina (Standing member)Supervisory Board(Legislative Decree 231/2001)

David Terracina (Chairman)
Gian Franco Oliviero Mattei
Franco Bertoli

PRADA Group

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Main Shareholder

PRADA Holding bv
Keizersgracht 313 3rd Floor
1016 EE Amsterdam - The Netherlands

Joint Company Secretaries

Patrizia Albano
Via A. Fogazzaro, 28
20135 Milan, Italy
Ying-Kwai Yuen (Fellow member, HKICS)
Flat A, 20th Floor
Block 4, Sceneway Garden
8 Sceneway Road
Kowloon, Hong Kong

Authorized Representatives
in Hong Kong

Donatello GalliVia Elba, 1020144 Milan, Italy
Ying-Kwai Yuen (Fellow member, HKICS)
Flat A, 20th Floor
Block 4, Sceneway Garden
8 Sceneway Road
Kowloon, Hong Kong

Alternate Authorized
Representative in Hong Kong
to Donatello Galli

Sing Cheong Liu
House 7 Severn Hill
4 Severn Road
The PeakHong Kong

Hong Kong Share Registrar

Computershare Hong Kong Investor
Services Limited
Shops 1712-1716
17th Floor, Hopewell Centre
183 Queen’s Road East
Wanchai, Hong Kong

Auditor

Deloitte & Touche spa
Via Tortona, 2520144 Milan, Italy

PRADA Group

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PRADA Group Structure

PRADA spa
Milan

Holding/Manufacturing/distribution/services

100%
66.7%

Artisans Shoes srl
Montegranaro
Production

PRADA Hong Kong pd ltd 100%Hong Kong
services

60%

Pellettieri d’Italia srl
Milan
Production

PRADA Dongguan
Trading Co ltd
Dongguanservices100%

IPI Logistica srl
Milan
services

Post Developement Corp 100%
San Francisco
real estate

100%

SPACE Caffè srl
Milan
services

Church Holding UK ltd
Northampton
sub-Holding

49%

PAC srl in liquidazione
Milan(in liquidation)

100%

100%

100%
Church & Co ltd
Northampton
Manufacturing/
distribution/services

PRADA Far East bv
Amsterdam
sub-Holding/outlet

100%

PRADA USA Corp
New York
distribution/services/retail

100% PRADA Australia Pty ltd
Sydneyretail100%

PRADA Korea ltd
Seoul
retail100%

Space USA Corp
New Yorkoutlet100% PRADA Singapore Pte ltd
Singaporeretail55%

TRS Hawaii Ilc
Honolulu
dfs

100%

55%

TRS Guam Partnership
Guam
dfs

100%

100%

PRADA Retail Mexicos de rm de cv
Mexico City
retail55%

PRADA Retail
Malaysia Sdn Bhd
Kuala Lumpur
retailPRADA Japan Co ltd
TokyoretailTravel Retail Shops
Okinawa KK
Tokyo
dfs

Church’s English Shoes
Switzerland sa
LuganoretailChurch & Co (USA) ltd
New Yorkretail100%

TRS Saipan Partnership
Saipandfs

55%

100% PRADA (Thailand) Co ltd
Bangkokretail100% Church Japan Company ltd
TokyoretailChurch UK Retail ltd
Northampton
retail100%

TRS Hong Kong ltd
Hong Kong
dfs

55%

100% PRADA New Zealand ltd
Wellington
retail100%

100%

Church Hong Kong
Retail ltd
Hong Kong
retailChurch’s English Shoes sa 100%
Bruxelles
retailMacau Branch
Macau
dfs

100% Church & Co (Footwear) ltd
Northampton
tradeMarks

Church France sas
Parisretail100%

TRS New Zealand ltd
Wellington
dfs

55%

100% Church Singapore pte ltd
SingaporeretailChurch Italia srl
Milan
distribution/retail100%

TRS Singapore pte ltd
Singapore
dfs

55%

100%

Church Netherlands bv
Amsterdam
outletChurch Spain sl
Madridretail100%

PRADA Asia Pacific ltd
100%
Hong Kong
distribution/retail/services

100%

Church Footwear AB
Stockholm
retailChurch Ireland Retail ltd 100%
DublinretailChurch Austria gmbh
Wienretail100%

Church Footwear(Shanghai) Co ltd
Shanghairetail

100%

100%

100%

100%

Prada Group-Interim Financial Report oct 4_2013.indd 6

PRADA Sweden AB
Stockholm
retail100%

Kenon ltd
Londonreal estate

PRADA Taiwan ltd
Hong Kong
services
Taipei BranchTaipeiretail100%

PRADA Group100%

Macau Branch ltd
MacauretailPRADA China ltd
Hong Kong
dorMant

100%

6

100%

PRADA Canada Corp
Toronto
distribution/retail

PRADA Trading(Shanghai) Co ltd
ShanghairetailSpace Hong Kong ltd
Hong Kong
outletPRADA Fashion Commerce(Shanghai) Co ltd
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100%
PRADA Hellas
Sole Partner llc
Athensretail100%

100% PRADA Czech Republic sro
PragueretailPRADA Portugal
Unipessoal lda
Lisbonretail100%

PRADA Rus llc
Moscow
retail100%

100%
PRADA sa
Luxembourg
tradeMarkPRADA Stores srl
Milanretail/services
100% PRADA Montecarlo sam
MonacoretailSwiss Branch
Luganoservices

100%

PRADA Austria gmbh
Wienretail100%

PRADA Company sa
Luxembourg
services

100%

PRADA Spain sl
Madridretail100%

Car Shoe sa
Luxembourg
tradeMarkPRADA Bosphorus Deri
Mamüller ltd Sirketi
Istanbul
retail100% PRADA Germany gmbh
Munichretail/services

PRADA Middle East fzco
Jebel Ali Free Zone-Dubai
distribution/services

100%

Space sa
Luganooutlet49%

PRADA Emirates llc
Dubai
retail100%

PRADA Retail UK ltd
Londonretail100%

49%

PRADA Kuwait wll
Kuwait City
retailIreland Branch
Dublinretail

100%

100%

60%

100% PRADA Retail France sas
Parisretail100%
Car Shoe Italia srl
Milan
distribution/retail100%

Car ShoeSingapore pte ltd
SingaporeretailCar ShoeHong Kong ltd
Hong Kong
retailCar Shoe UK ltd
LondonretailPRADA Brasil
100% Importação e Comércio
de Artigos de Luxo ltda
Sãu Paulo
retail100%

PRADA Ukraine llc
Kiev
retail100%

PRADA Kazakhstan llp
Almatyretail100%

PRADA Maroc (Sarlau)
Casablanca
retail100%

PRADA Retail spc
Doharetail100%

PRADA Switzerland sa
Ginevraretail100%

ERFICO sa
GinevraretailPRADA Group

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Financial Review

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The Financial review of the Board of Directors refers to the Group of companies controlledby PRADA spa (the "Company"), holding company of the PRADA Group (the "Group")and is based on the unaudited Interim condensed consolidated financial statements of
the Group for the six months ended July 31, 2013, prepared in accordance with IAS 34
and the IFRS as adopted by the European Union. This Financial review must be read
together with the Interim condensed consolidated financial statements.
Consolidated income statement(amounts in thousands of Euro)

Retail%six months
ended July 31
2012(unaudited)%

1,422,460

82.3%

1,229,966

79.5%

Wholesale285,124

16.5%

294,721

19.0%

Royalties

20,481

1.2%

22,686

1.5%

Net revenues

1,728,065

100.0%

1,547,373

100.0%

Cost of goods sold(460,407)-26.6%(440,872)-28.5%

Gross margin

1,267,658

73.4%

1,106,501

71.5%

Operating expenses(809,320)-46.8%(711,619)-46.0%

EBIT

458,33826.5%

394,882

25.5%

Interest and other financial income/(expenses), net(15,194)-0.9%(2,911)

-0.2%

284

-

-

-

Income before taxation

443,42825.7%

391,971

25.3%

Taxation(130,609)-7.6%(102,756)-6.6%

Net income from continuing operations

312,81918.1%

289,215

18.7%

Net income for the period

312,81918.1%

289,215

18.7%

Net income from continuing operations –non-controlling interests

4,580

0.3%

2,806

0.2%

Net income – Non-controlling interests

4,580

0.3%

2,806

0.2%

Net income from continuing operations – Group

308,23917.8%

286,409

18.5%

Net income – Group

308,23917.8%

286,409

18.5%

Depreciation, amortization and impairment

92,715

5.4%

74,491

4.8%

EBITDA

551,05331.9%

469,373

30.3%

Dividends received from third parties

Basic and diluted earnings per share(in Euro per share)10

six months
ended July 31
2013(unaudited)

PRADA Group

Prada Group-Interim Financial Report oct 4_2013.indd 10

0.120

0.112

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Key financial information
Key figures of the periods(amounts in thousands of Euro)Net revenues

six months
ended
July 312013(unaudited)

twelve months
ended
January 31
2013(audited)six months
ended
July 312012(unaudited)% change
on July 31
2012

1,728,065

3,297,219

1,547,373

11.7%

EBITDA

551,053

1,052,469

469,373

17.4%

EBIT

458,338

889,781394,882

16.1%

Income before tax

443,428

883,616

391,971

13.1%

Net income of the Group

308,239625,681

286,409

7.6%

0.120

0.245

0.112

7.1%

Earnings per share
Average headcount (persons)

10,364

9,427

9,101

13.9%

Capital expenditure

293,031

351,129

121,688-

Net operating cash flows

403,764

759,272

332,192-

EBITDA %

31.9%

31.9%

30.3%

-

EBIT %

26.5%

27.0%

25.5%

-

July 312013(unaudited)

January 31
2013(audited)

July 312012(unaudited)change on
January 31
2013

Key figures at the reporting date(amounts in thousands of Euro)Net operating working capital
Net invested capital
Net financial position surplus/(deficit)
Group shareholders’ equity

323,132

317,714351,874

5,418

2,205,677

2,017,844

1,944,812

187,833

195,626

312,648

82,532(117,023)

2,388,096

2,320,022

2,017,482

68,0742013 first half financial highlights
In the six months ended July 31, 2013, the Group pursued its commercial strategy
through the retail network expansion, also resigning some wholesale accounts infavor of the opening of Directly Operated Stores (DOS), mainly in North America. Keepfollowing this path and leveraging on the worldwide success of its iconic products,
the Group posted net revenues of Euro 1,728.1 million in the six months ended July
31, 2013, growing 11.7% as reported and 14.8% at constant exchange rates. The
progress in sales was achieved despite an extremely volatile international economic
environment and was mainly led by leather goods and the Prada brand.
The sales development was coupled with an improvement in the operating profit: the
EBITDA for the six months ended July 31, 2013, amounted to Euro 551.1 million, or
31.9% as a percentage on net revenues, showing a progress of 17.4% over the results
posted in the six months ended July 31, 2012.
The Group’s net result for the six months ended July 31, 2013, totaled Euro 308.2
million, up by 7.6% compared to Euro 286.4 million recorded in the first half of 2012.
It was slightly diluted by the impact of currencies fluctuation as well as by a higher tax
rate.
At July 31, 2013, the positive net financial position of the Group stood at Euro 195.6
million, after the distribution of dividends of Euro 232.2 million and after a capital
expenditure spending for the period of Euro 292.5 million that also included thepurchase of a prestigious retail location in London where the Group already operated
under a lease agreement.
On July 29, 2013, Prada spa issued a Euro 130 million Notes listed on the Irish Stock
Exchange with an issue price of 99.641 per cent, settled on August 1, 2013. The
Notes is due in 2018 and pays annual interest at the rate of 2.75%. Being the Notes
settled on August 1, 2013, there is neither cash received nor liability recognized at thereporting date.

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Net sales analysis
six months
ended July 31
2013(unaudited)%

six months
ended July 31
2012(unaudited)%% changeItaly

268,53115.7%

259,326

17.0%

3.5%

Europe374,300

21.9%

349,277

22.9%

7.2%

Americas231,58713.6%

204,161

13.4%

13.4%

Asia Pacific627,56436.8%

532,471

34.9%

17.9%

Japan (including Hawaii)

159,449

9.3%

164,415

10.8%

-3.0%

Middle East

43,287

2.5%

12,5500.8%

244.9%(amounts in thousands of Euro)Net sales by geographical area

Other countries
Total

2,866

0.2%

2,487

0.2%

15.2%

1,707,584

100.0%

1,524,687

100.0%

12.0%

Net sales by brandPrada1,410,062

82.6%

1,233,433

80.9%

14.3%

Miu Miu

255,950

15.0%

245,971

16.1%

4.1%

Church's

32,6731.9%

31,0102.1%

5.4%

Car shoe

7,551

0.4%

11,3420.7%-33.4%

Other

1,348

0.1%

2,931

0.2%

-54.0%

Total

1,707,584

100.0%

1,524,687

100.0%

12.0%

Net sales by product line
Clothing

248,81714.6%

248,677

16.3%

0.1%

1,156,369

67.7%

943,060

61.8%

22.6%

Footwear282,39616.5%

315,290

20.7%-10.4%

Other

20,002

1.2%

17,660

1.2%

13.3%

Total

1,707,584

100.0%

1,524,687

100.0%

12.0%

1,422,460

83.3%

1,229,966

80.7%

15.7%

285,124

16.7%

294,721

19.3%

-3.3%

Total

1,707,584

100.0%

1,524,687

100.0%

12.0%

Net sales

1,707,584

98.8%

1,524,687

98.5%

12.0%

Royalties

20,481

1.2%

22,686

1.5%

-9.7%

1,728,065

100.0%

1,547,373

100.0%

11.7%

Leather goods

Net sales by distribution channelDOS
Independent customers and franchises

Total net revenues

Distribution channels
In the six months ended July 31, 2013, the retail channel contributed 83.3% of total net
sales compared to 80.7% of the first six months of last year. Retail net sales amounted
to Euro 1,422.5 million, up by 15.7% over Euro 1,230.0 million recorded in the same
period of 2012 (+19.5% at constant exchange rates). The performance of this channel
measured on a Same Store Sales Growth (SSSG) basis was 7%.
At July 31, 2013, the Group operated through 491 DOS, a net of 77 stores more thanJuly last year. From the beginning of the financial year, a net of 30 new DOS wereopened (36 openings, 6 closures): 24 Prada, 7 Miu Miu, 4 Church’s and 1 Car Shoe.
Along with the Group’s expectations, and contributing for the remaining 16.7% of
total net sales, the wholesale channel generated net sales of Euro 285.1 million andrecorded a 3.3% slowdown compared to the results achieved in the six months ended
July 31, 2012. The shrinkage mostly occurred in Europe, Italy included, and was partiallycompensated by the contribution of the Asia Pacific region where 4 duty free fanchisee
shops were opened in the period.

12

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Markets
In terms of geography, the six months ended July 31, 2013, reported different growthtrends.
Asia Pacific posted net sales for Euro 627.6 million and recorded a progress equal to17.9% compared to Euro 532.5 million achieved during the six months ended July 31,
2012 (+18.7% at constant exchange rates). The contribution to total net sales reached36.8% (34.9% last year). The performance in this area was pushed both by the retail
openings in the period and by the growth delivered by the existing shops. The Greater
China area (PRC, Hong Kong and Macau) generated net sales for Euro 396.7 million,
contributing significantly to the development of the Far East market.
In the six months ended July 31, 2013, net sales in the European market (Italy excluded)
amounted to Euro 374.3 million, up by 7.2% compared to Euro 349.3 million posted
during the same period of last year (+8.9% at constant exchange rates). As the second
largest market for the Group, it contributed 21.9% to consolidated net sales (22.9% in2012) with different trends by distribution channels. The 138 DOS operating at period
end posted a double-digit growth while the wholesale channel suffered a decline
compared to the results posted in the same period of 2012 due to the persistentselective strategy over independent clients in the region and difficult market conditions
especially in secondary cities.
The Italian market posted net sales of Euro 268.5 million that resulted from a highsingle-digit growth rate generated by the network of stores directly operated by theGroup (50 at July 31, 2013), and, not differently from the rest of Europe, a slowdown
in the wholesale channel.
The total net sales generated by the American market were Euro 231.6 million, up by
13.4% compared to Euro 204.2 million posted in the six months ended July 31, 2012(+15.9% at constant exchange rates). The increase in sales was strongly contributedby retail as wholesale contracted.
In the six months ended July 31, 2013, the Japanese market demand proved to berobust recording net sales of Euro 159.4 million and delivering a double-digit growth of
16.4% at constant exchange rates and a slight decline of 3% as reported because of
the persistent weakening of the Japanese Yen.
The Middle East area posted net sales amounting to Euro 43.3 million in the six months
ended July 31, 2013, delivering a triple-digit expansion rate compared to the same
period of 2012. The extraordinary advance in sales was essentially achieved thanks tothe performances of the stores opened in the second half of previous year.
Products
In the six months ended July 31, 2013, the Leather goods segment recorded net
sales of Euro 1,156.4 million, up by 22.6% compared to Euro 943.1 million posted in
the same period of 2012 (+26.3% at constant exchange rates). Again, this productcategory, sustained by the impressive success of iconic handbags and by the launchof widely appreciated new styles, delivered double-digit growth rates in all markets(except in Japan) at constant and reported exchange rates.
Clothing generated net sales of Euro 248.8 million in the six months ended July 31,
2013, compared to Euro 248.7 million posted in the same period of 2012 (+0.1% asreported and +2.8% at constant exchange rates). Although the general increase wassmall, growth was positive in all markets at constant exchange rates.
Footwear contributed net sales of Euro 282.4 million in the six months ended July 31,
2013, down by 10.4% as reported (-8.4% at constant exchange rates) compared to

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Euro 315.3 million achieved in the same period of last year. This category particularly
suffered for the shrinkage of the wholesale business except for the Miu Miu shoes thatmanaged to grow double-digit at constant exchange rates in this first half of the year
compared to the same period of 2012.
BrandsDuring the six months ended July 31, 2013, the Prada brand generated net sales
for Euro 1,410.1 million and the increase over Euro 1,233.4 million posted in the six
months ended July 31, 2012, was 14.3% (+17.4% at constant exchange rates). The
contribution to total net sales raised to 82.6% from 80.9% in the same period of 2012.
Except for Italy, Prada delivered solid double-digit performances everywhere.
Miu Miu net sales amounted to Euro 256.0 million, up by 4.1% compared to Euro
246.0 million recorded in the six months ended July 31, 2012. The increase at constantexchange rates was +8.2%. The retail network delivered a 5.6% growth over the
results achieved in the same period of 2012 (+10.6% at constant exchange rates). The
brand posted positive increase in all product categories.
The Church’s brand net sales totaled Euro 32.7 million and managed to achieve a 5.4%
advance compared to the results posted in the six months ended July 31, 2012 (+8% atconstant exchange rates). All markets delivered positive paces of growth, with Europe
continuing to be the most important market for the English brand.
Car shoe totaled net sales of Euro 7.6 million, down by 33.4% over the same periodof 2012. That was substantially due to timing differences in wholesale deliveries. The
brand opened a new store in Italy during the period.
Royalties
In the six months ended July 31, 2013, the contribution of the licensed products
business was equal to Euro 20.5 million, down by 9.7% compared to Euro 22.7 million
posted in the same period of 2012. The results of the first half of 2012 were boosted
for some Euro 4.6 million by the income following the launch of the PRADA phone by
LG 3.0 that finished contributing royalties by the end of last year.
Number of stores
July 31, 2013
(unaudited)

January 31, 2013
(audited)

Owned

Franchises

Owned

Franchises

Owned

Franchises

Prada

301

23

283

19

263

19

Miu Miu

133

7

126

6

102

6

Church’s

49

-

45

-

43

-

Car Shoe

8

-

7

-

6

-

Total

491

30

461

25

414

25

July 31, 2013
(unaudited)

14

July 31, 2012
(unaudited)

January 31, 2013
(audited)

July 31, 2012
(unaudited)

Owned

Franchises

Owned

Franchises

Owned

Italy

50

6

48

5

46

Franchises
5

Europe

138

6

137

6

125

6

Americas

75

-

61

-

49

-

Asia Pacific

142

18

130

14

119

14

Japan (including Hawaii)

70

-

71

-

69

-

Middle East

13

-

11

-

3

-

Africa

3

-

3

-

3

-

Total

491

30

461

25

414

25

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Operating results
In the six months ended July 31, 2013, the Group’s gross margin amounted to Euro
1,267.7 million, up by 14.6% compared to the same period of 2012. Profitability climbed
up to 73.4% on net revenues from 71.5% achieved in the six months ended July 31,
2012. A more favorable sales mix in terms of channel, geographical area and productcategory allowed reaching a double-digit pace of growth.
The consolidated EBITDA amounted to Euro 551.1 million and recorded an increaseof +17.4% compared to Euro 469.4 million posted in the six months ended July 31,
2012. Following the above mentioned improvement at gross margin level and despite
the increased incidence of the operating expenses, the EBITDA profitability, as apercentage on net revenues, raised to 31.9% from 30.3% of the same six months
period of last year.
The EBIT totaled Euro 458.3 million, or 26.5% on total net revenues, and grew 16.1%
compared to Euro 394.9 million reported in the six months ended July 31, 2012 (25.5%
on net revenues).
The tax charges for the first six months of 2013 represented 29.4% on profit before
taxation compared to 26.2% reported in the comparable period of last year. The higher
incidence rate mainly resulted from a change in the geographical mix of taxable incomes.
The net result for the six months ended July 31, 2013, amounted to Euro 308.2 million,
or 17.8% on net revenues, up by 7.6% compared to Euro 286.4 million earned in thesame period of 2012. The dilution in terms of profitability of the Group’s net result wasaffected, in addition to the higher tax rate, by the negative impact of finance expenses
that increased from Euro 2.9 million in the first half of 2012 to Euro 15.2 million, mainly
because of the foreign exchange fluctuations.
EBITDA by brand(amounts in thousands of Euro)six months ended July 31, 2013
(unaudited)

Group

Prada

Miu Miu

Church’s

Car Shoe

Others

Net sales

1,707,584

1,410,062

255,950

32,673

7,551

1,348

Royalties

20,481

19,261

1,214

6

-

-

1,728,065

1,429,323

257,164

32,679

7,551

1,348

EBITDA

551,053

507,854

43,6802,569(2,916)(134)

EBITDA %

31.9%

35.5%

17.0%

7.9%

-

-

six months ended July 31, 2012
(unaudited)

Group

Prada

Miu Miu

Church’s

Car Shoe

Others

Net sales

1,524,687

1,233,433

245,971

31,01011,342

2,931

Royalties

22,686

21,972

651

63

-

-

1,547,373

1,255,405

246,62231,073

11,342

2,931

EBITDA

469,373415,749

52,653

2,326

(947)

(408)

EBITDA %

30.3%

33.1%

21.3%

7.5%

-

-

Net revenues

Net revenues

In the six months ended July 31, 2013, the EBITDA of the Prada brand totaled Euro507.9 million, or 35.5% on relevant net revenues, up by 22.2% compared to EuroPRADA Group

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415.7 million, or 33.1%, posted in the six months ended July 31, 2012. The improved
margin was the direct expression of the business expansion combined with a more
profitable mix of sales in terms of channel, product category and geographical area,
which allowed the brand to sustain the increased operative expenses. In fact, in
addition to the direct cost deriving from the retail business expansion, major efforts
were spent to sustain the brand equity. Once again, in these first six months of2013, Prada pursued its innovative and unconventional cooperation with the art world
ranging over cinema, dressing the Great Gatsby movie, to literature, launching a literarycontest with Giangiacomo Feltrinelli Editor and art, sponsoring through the Fondazione
Prada the exposition “When Attitudes Become Form: Bern 1969/Venice 2013” inVenice. Moreover, for the fourth time, the Group also sponsored the Luna Rossa yacht
challenging the XXXIV America’s Cup edition that started with the America’s Cup World
Series in 2012.
The EBITDA of the Miu Miu brand amounted to Euro 43.7 million for the six months
ended July 31, 2013, or 17% on net revenues, down by 17% compared to the same
period of 2012, when the incidence on net revenues was 21.3%. As previously
highlighted, Miu Miu is still undergoing an intense investment phase, aimed to enlarge
its global DOS footprint and brand awareness in all international markets. Consequently,
the relative growth at the topline, broadly in line with the average of the luxury market,
was not sufficient to absorb the expansion of the retail network and the investments
made in communication and other brand building activities, such as the revisiting of thestores concept or the Miu Miu Women’s tales project that, in February 2013, added toits history the fifth short movie, “The Door” by Ava DuVernay.
The EBITDA of the Church’s brand for the six months ended July 31, 2013, totaled
Euro 2.6 million, up by 10.4% compared to the results achieved the same period oflast year. As a percentage on net revenues, the profitability increased from 7.5% in thefirst half of 2012 to 7.9% in the current period. The improvement achieved at the grossmargin level was essentially delivered by the sales expansion, but it was partially offset
by the higher incidence of the selling expenses, following the recent openings in new
countries for the brand.
In the six months ended July 31, 2013, the EBITDA of the Car Shoe brand totaled
negative Euro 2.9 million. The further decline compared to negative Euro 0.9 million
recorded in the same six months of 2012 was substantially caused by timing difference
in deliveries to independent clients.

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Analysis of the statement of financial position
Net invested capital
The following table contains the Statement of financial position reclassified in order toprovide a better picture of the composition of the Net invested capital.
(amounts in thousands of Euro)

Non-current assets (excluding deferred tax assets)

July 312013(unaudited)

January 31
2013(audited)

July 312012(unaudited)

2,015,666

1,821,773

1,721,908

Trade receivables, net

317,519

304,525

292,043

Inventories, net

408,534

343,802

380,688

Trade payables(402,921)(330,613)(320,857)

Net operating working capital

323,132

317,714351,874

Other current assets (excluding items of financial position)

165,028

165,962

152,692

Other current liabilities (excluding items of financial position)(240,039)(230,285)(246,444)

Other current assets/(liabilities), net(75,011)(64,323)(93,752)

Provision for risks(47,750)(46,914)(58,543)

Post-employment benefits(57,888)(45,538)(41,526)

Other long-term liabilities(89,211)(85,289)(90,294)

Deferred tax assets/(liabilities), net

136,739

120,421155,145

Other non-current assets/(liabilities), net(58,110)(57,320)(35,218)

Net invested capital

2,205,677

2,017,844

1,944,812

Shareholder's equity – Group(2,388,096)(2,320,022)(2,017,482)

Shareholder's equity – Non-controlling interests(13,207)(10,470)(9,862)(2,401,303)(2,330,492)(2,027,344)

Long term financial payables(81,572)(79,348)(64,154)

Short term financial, net surplus/(deficit)

277,199

391,996

151,978(1)-(5,292)

195,626

312,648

82,532(2,205,677)(2,017,844)(1,944,812)

n.a

n.a.

n.a

Total consolidated shareholders' equity

Payable for dividends
Net financial position surplus/(deficit) – including payable fordividends
Shareholders’ equity and Net financial position
Debt to Equity ratio

At July 31, 2013, Net invested capital totaled Euro 2,205.7 million compared to Euro
2,017.8 million at January 31, 2013. The investments occurred during the period
contributed the most to the increase.
The consolidated shareholders’ equity rose from Euro 2,330.5 million to Euro 2,401.3
million at July 31, 2013. The increase generated by the Group’s net income for thesix months ended July 31, 2013, amounting to Euro 308.2 million, was partially offset
by Euro 230.3 million of dividends distributed to the PRADA spa shareholders (asapproved on May 23, 2013, by the Annual General Meeting on the financial statements
for the year ended January 31, 2013) and by Euro 1.9 million of dividends paid to Noncontrolling interests. Other changes resulting from translation differences and changes
in fair value equity reserves accounted for the rest of the increase.

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Non-current assets (excluding deferred tax assets)(amounts in thousands of Euro)

July 312013(unaudited)

January 31
2013(audited)

July 312012(unaudited)

Property, plant and equipment

1,047,291

857,299

777,425

Intangible assets

879,477

878,750

860,986

Investments in associated undertakings

16,672

23,024

19,459Other non-current assets

72,02861,68264,038

198

1,018

-

2,015,666

1,821,773

1,721,908

43%

46%

48%

Derivative financial instruments-non-current
Total non-current assets (exluding deferred tax assets)
Percentage of tangible assets already depreciated

The increase in Property, plant and equipment and Intangible assets taken together waslargely due to capital expenditure for the period (Euro 293.0 million) less depreciation,amortization and impairment (Euro 92.7 million), the effect of translation into Euro(Euro 8.8 million) and other (Euro 0.8 million). The Group’s capital expenditure for theperiod was allocated as follows: Euro 250.2 million in the retail area, Euro 11.9 million
in the production and logistics area and Euro 30.9 million in the corporate area. It is
worth highlighting that the spending in the retail area included the purchase of two
prestigious retail locations: one in London, in Old Bond street, and one in St. Petersburg.
Net operating working capital(amounts in thousands of Euro)

July 312013(unaudited)

January 31
2013(audited)

July 312012(unaudited)

Trade receivables, net

317,519

304,525

292,043

Inventories, net

408,534

343,802

380,688

Trade payables(402,921)(330,613)(320,857)

Net operating working capital

323,132

317,714351,874

The increase in inventories was essentially attributable to the higher unitary valueof the more expensive fall/winter finished products stocked at July 31, 2013, as
well as to larger quantities of raw materials purchased to support the growth of theretail business. Compared to July 31, 2012, the variance in inventories followed theincreased volumes because of the business expansion. For the same reasons, trade
payables also increased.

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Net financial position
The following table summarizes the items included in the Net financial position.
July 312013(unaudited)

January 31
2013(audited)

July 312012(unaudited)(81,124)(78,830)(63,545)

(448)

(518)

(609)

Long term financial payables(81,572)(79,348)(64,154)(amounts in thousands of Euro)Long term debt
Obligations under finance leases

Short term financial payables and bank overdrafts(159,468)(175,570)(238,518)

Payables to parent company and related parties(4,205)(5,018)(3,173)

Receivables from parent company and related parties

1,415

1,413

3,040

Obligations under finance leases

(197)

(575)

(965)

Cash and cash equivalents

439,654571,746

391,594

Short term financial (payables)/receivables, net of cash and cash
equivalents

277,199

391,996

151,978

Net financial surplus/(deficit)

195,627

312,648

87,824(1)-(5,292)

195,626

312,648

82,532

Payable for dividends
Net financial surplus/(deficit), including payable for dividends

The operational free cash flow generated during the period allowed the Group to booka net positive financial position of Euro 195.6 million (Euro 312.6 million at January
31, 2013) after the payment of Euro 230.3 million of dividends on the 2012 financial
statements and the massive ongoing capital expenditure program (Euro 292.5 million).
The composition in the short-term bank debt was affected by a shift occurred in thesix months ended July 31, 2013. In fact, the Pool loan borrowed by PRADA spa and
PRADA Japan co ltd expiring in the period was definitively repaid for some Euro 122
million. At the same time, PRADA spa arranged a new revolving credit facility for Euro
170 million, drawn for Euro 100 million at July 31, 2013, and PRADA Japan co ltd
arranged a new working capital syndicate loan of Japanese Yen 3 billion, drawn at July
31, 2013, for some Japanese Yen 2.9 billion, or Euro 22.2 million.
On the long-term side the subsidiary PRADA Japan co ltd entered into a syndicate loan
agreement with a pool of Japanese banks for a total amount of Japanese Yen 6 billion,
drawn at July 31, 2013, for some Japanese Yen 3.3 billion, or Euro 25.5 million.

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Risk factors
Risk factors regarding the international luxury goods market
Risks regarding the general state of the economy and the Group’s international
operations
The Group is exposed to several macroeconomic factors as a consequence of its
operations on an international scale.
Current economic conditions may adversely impact demand for the Group’s products,
reduce access to credit and cause its customers and others with which it does businessto suffer financial hardship, all of which could adversely impact the business, results ofoperations, financial condition and cash flows of the Group.
A substantial amount of the Group’s sales is generated by customers who purchaseproducts while travelling abroad. Consequently, adverse economic conditions (like theglobal financial crisis in 2008 and 2009), global political developments (such as the war
in Iraq in the Spring of 2003), other social and geo-political sources of unrest, instability,
disorders, riots, civil wars or military conflicts, natural disasters such as fire, floods,
blizzards and earthquakes or other events (such as the events in the United States on
September 11, 2001, or the travel advisories issued by the World Health Organisationin connection with Severe Acute Respiratory Syndrome-SARS) that result in a shift intravel patterns or a decline in travel volumes in the past have had, and in the future
could have, an adverse effect on the Group’s business and results of operations.
Risks regarding the protection of intellectual property rights
The Group believes that its trademarks and other intellectual property rights arefundamental to its success and position. Therefore, the business is highly dependent
on the Group’s ability to protect and promote trademarks and other intellectual property
rights.
The Group constantly commits to establish and protect its trademarks and otherintellectual property rights such as registered designs and patents on a worldwide
basis. The Group believes that its trademarks and other intellectual property rights areadequately supported by applications for registrations, existing registrations and otherlegal protections in all principal markets.
Risks regarding brand image and recognition
The success of the Group on the international luxury goods market is linked to therecognition, integrity and image of its brands. In these terms, the success of its brands
depend on many factors, like the style and design of products, the quality of materials
and production techniques used, the image and location of the Group’s directly
operated stores, the careful selection of licensees for certain product categories andthe communications activities in terms of public relations, advertising, marketing andGroup profile in general.
Preservation of the image and prestige acquired by the Group’s brands and trademarksin the fashion and luxury goods industry is an objective that the PRADA Group pursues
by closely monitoring each step of the process, both inside and outside the company,in order to guarantee uncompromised quality. It also engages in a constant search forinnovation in terms of style, product and communications in order to ensure that its
message is always consistent with the strong identity of the brands.

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Risks regarding the ability to anticipate trends and respond to changing
customer preferences
The Group’s success depends on its ability to create and drive market and producttrends as well as to anticipate and respond to changing consumer preferences andfashion trends in a timely manner.
The Group pursues its objective of driving the luxury goods market by stimulating
consumer markets and setting trends thanks to the commitment of its Design and
Product development department. This corporate area employs some 900 people
distributed between the Design, where the creative effort is contributed by themix of nationalities, cultures and talents and the Product Development, where thecraftsmanship abilities combined with well-established industrial processes allow
Prada to compete in the industry to attempt to stay abreast of emerging lifestyle andconsumer trends.
Risk factors specific to the PRADA Group
Risks regarding exchange rate fluctuations
The Group has a wide international footprint and therefore is exposed to exchange
rate risk which can affect revenues, costs, margins and profits. In order to hedge
the exchange rate risk, the Group enters into derivative hedging contracts to ensure
the value in euro (or in other operating currencies) of identified expected cash flows.
Such expected future cash flows mainly consist of the collection of trade and financial
receivables and the payment of trade payables. They are mainly concentrated in theparent company PRADA spa as worldwide distributor and holding of the Group.
The management of the exchange rate risk is described in the Notes to the unaudited
Interim condensed consolidated financial statements.
Risks regarding interest rate fluctuations
The interest rate risk is the risk that cash outflows might vary as a result of interest
rate fluctuation. In order to hedge this risk, which is mainly concentrated in theparent company PRADA spa, the Group uses interest rate swaps and collars. These
instruments convert variable rate loans into fixed rate loans or loans at rates within anegotiated range of rates.
The management of the interest rate risk is described in the Notes to the unaudited
Interim condensed consolidated financial statements.
Risks regarding the importance of key personnel
The Group’s results depend both on the contribution of certain key figures who
have played an essential role in the development of the Group and who have great
experience of the fashion and luxury goods industry and on Prada’s ability to attract
and retain personnel highly capable in terms of design, marketing and merchandisingof products.
The Group believes it has a management structure capable of guaranteeing the ongoing
success of the business and it has recently implemented a long-term incentive plan inorder to retain the key figures in the Company so as to let them to continue to cover
key roles for the achievement of the challenging objectives that the Group constantly
seeks.
Risks regarding the implementation of strategy
The Group’s ability to increase revenues and improve profitability depends on the
successful implementation of its strategy for each brand. As already stated, this

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strategy is mainly based on the international development of the retail channel.
The Group is pursuing its objectives through gradual expansion in new geographicalareas or in areas where its presence is not yet considered strong enough. In order toensure the success of each new DOS, the Group carefully assesses market conditions
and consumer trends in the new DOS location. In particular, when entering into new
countries, the Group dedicates significant resources to ensuring that sales managers
and personnel convey an image consistent with the identity of the Group brands anda level of service in keeping with the quality of the products. The utmost attention is
also paid to the design and fitting out of the stores themselves.
Risks regarding the outsourcing of manufacturing activities
While the Group develops, controls and produces in-house the majority of its prototypes
and samples, the production of most of its accessories and products is outsourced toexternal manufacturers with appropriate expertise and capacity. External manufacturers
produced the vast majority of finished products.
The Group has in place a rigorous inspection and quality control process for all
outsourced production, and contractually requires all third-party manufacturers tocomply with intellectual property protections and confidentiality restrictions, in addition
to all applicable labour, social security and health and safety laws and regulations.
Credit risk
Credit risk is defined as the risk that a counterparty in a transaction causes a financial
loss for another entity through failure to fulfill its obligations. The maximum risk towhich an entity is potentially exposed is represented by all financial assets recordedin the financial statements. The Group essentially believes that its credit risk mainly
regards trade receivables generated in the wholesale channel and cash and cash
equivalents. The Group manages the credit risk and reduces its negative effects
through its commercial and financial strategy.
On the trade receivables side, credit risk management is performed by controlling andmonitoring the reliability and solvency of customers. At the same time, the fact that the
total receivables balance is not highly concentrated on individual customers, the factthat net sales are evenly spread geographically and the ongoing strategy of selective
reduction of the wholesale customer base (for reasons including the prevention ofparallel distribution) have led to a reduced credit risk.
On the cash and cash equivalents side, the risk of default substantially relates to bankdeposits which is the method most widely used by the Group to invest the surplus
funds generated by operations also considering its low-risk policy. The default risk
is mitigated by the allocation of the available funds among different bank deposits
in terms of countries, currencies and banks as well as by the term profile of suchinvestments which is always short-term. The residual significant portion of cash andcash equivalents is made up of bank accounts and cash. The Group maintains that there
is no significant risk on these kinds of liquid assets as their use is strictly connectedwith the business operations and corporate processes and, as a result, the number ofparties involved is very fragmented.
Liquidity risk
The liquidity risk relates to the difficulty the Group may have in fulfilling its obligations
with regard to financial liabilities. The Directors are responsible for managing the liquidity
risk while the Corporate finance department, reporting to the CFO, is responsible formanaging financial resources as well as possible. The Directors believe that the funds
and lines of credit currently available, in addition to those that will be generated byoperating and financing activities, will allow the Group to meet its needs resulting from

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investing activities, working capital management, repayment of loans as they fall due
and dividend payments as planned.
Legal and regulatory risks
The PRADA Group operates in a complex regulatory environment and is exposed tolegal risks and risks regarding compliance with applicable laws, including:––

the risks associated with health and safety at work in compliance with Italian
Legislative Decree 81/2008 and equivalent regulations in other countries;––

possible legal sanctions for wrongful acts pursuant to Italian Law 231/2001, as
subsequently amended;––

the risks associated with antitrust rules in the areas where the Group operates;––

the possibility of events that adversely affect the reliability of annual financial
reporting and the safeguarding of Group assets;––changes in international tax rules applicable to countries where the Group operates;––

possible industrial compliance risks regarding the conformity of the finishedgoods distributed and raw and consumables materials used with the Italian andinternational laws and regulations.

By involving all of its various divisions and using external specialist advisors whennecessary, the Group ensures that its processes and procedures are updated to comply
changes in rules and regulations, reducing the risk of non-compliance to an acceptablelevel. As well as by Divisional Managers and by audit activities, monitoring activities
are also carried out by specific entities and committees such as the Supervisory Board,
the Internal Control Committee and the Industrial Compliance Committee.
Risks regarding data processing
Data is processed using information systems subject to a governance model that
ensures that:––data is adequately protected against the risk of unauthorized access, loss (including
accidental loss) and utilization inconsistent with assigned duties;––

data is processed in accordance with applicable laws and regulations.

Information on relationships and transactions with related parties
Information on the Group’s relationships and transactions with related parties isprovided in the Notes to the interim condensed consolidated financial statements.
Outlook for second half of 2013
The Group will continue to pursue its retail growth strategy and support the world
wide awareness of its brands. The challenging environment determined by a still weakgeneral economic situation and the added international tensions of the recent weeks,
will – nevertheless - require a close attention to efficiency of operations and executionof strategy in order to be able to respond to possible sudden change of conditions.

Milan (Italy), September 17, 2013

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Corporate Governance

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Corporate governance practices
The Company is committed to maintaining a high standard of corporate governancepractices and fulfilling its commitment to effective corporate governance. The corporate
governance model adopted by the Company consists of a set of rules and standards
with the aim of establishing efficient and transparent operations within the Group, toprotect the rights of the Company’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”).
Compliance with the Code
The Board has reviewed the Company’s corporate governance practices and issatisfied that the Company’s corporate governance practices have complied with thecode provisions set out in the Code throughout the six months from February 1, 2013
to July 31, 2013 (the “Review Period”).
The Board
The Board of Directors of the Company (the “Board”) is responsible for setting up theoverall strategy as well as reviewing the operation and financial performance of theCompany and the Group.
The Board has established the Audit Committee, the Remuneration Committee andthe Nomination Committee. Each is chaired by an Independent Non-executive Director.
The written terms of reference of each Committee are available on the Company’s andStock Exchange’s websites.
In addition, the Board has established a Supervisory Body under the Italian Legislative
Decree 231 of June 8, 2001 (the “Decree”).
Audit Committee
The Company has established an Audit Committee in compliance with Rule 3.21 of
the Listing Rules. The Audit Committee consists of three independent non-executive
directors, namely, Mr. Gian Franco Oliviero Mattei (Chairman), Mr. Giancarlo Forestieriand Mr. Sing Cheong Liu. The primary duties of the Audit Committee are to review andsupervise our financial reporting process and internal controls. The Audit Committee
has held four meetings on April 3, 2013, May 23, 2013, June 11, 2013 and September
17, 2013 with an attendance rate of 91.7% to discuss the auditing and internal controls
activities, to propose the appointment of the external Auditor, to review the audited
separate and consolidated financial statements of the Company for the year ended
January 31, 2013, the unaudited consolidated quarterly financial statements of theCompany for the three months ended April 30, 2013 and the unaudited consolidated
interim financial statements of the Company for the six months ended July 31, 2013,
before recommending to the Board for approval.
Remuneration Committee
The Company has established a Remuneration Committee in compliance with theCode. According to its terms of reference, the primary duties of the Remuneration
Committee are to make recommendations to the Board on the Company’s policy
and structure for all remuneration of directors and senior management and theestablishment of a formal and transparent procedure for developing policy on such
remuneration. The Remuneration Committee consists of two independent nonexecutive directors, Mr. Gian Franco Oliviero Mattei (Chairman) and Mr. Giancarlo
Forestieri and one non-executive director, Mr. Marco Salomoni. The Remuneration

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Committee has held one meeting on April 3, 2013 with an attendance rate of 100% todiscuss the implementation of the long-term incentive plan connected to the Group’s
results and its application to certain strategic consultants of the Company.
Nomination Committee
The Company has established a Nomination Committee in compliance with the Code.
According to its terms of reference, the primary duties of the Nomination Committee
are to make recommendations to the Board on the structure, size and compositionof the Board itself, on the selection of new Directors and on the succession plansfor Directors. The Nomination Committee consists of two independent non-executive
directors, Mr. Gian Franco Oliviero Mattei (Chairman) and Mr. Sing Cheong Liu and one
non-executive director, Mr. Marco Salomoni. The Nomination Committee has held two
meetings on April 3, 2013 and September 17, 2013 with attendance rate of 100% toreview the adequacy of the structure and composition of the Board, to perform theannual review of the independence of the independent non-executive directors and to
propose to the Board the adoption of the Board diversity policy.
Supervisory Body
In compliance with 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 the Decree.
The Supervisory Body consists of three members appointed by the Board, selectedamong qualified and experienced individuals, including non-executive directors,
qualified auditors, executives or external individuals. The Supervisory Body consists of
Mr. David Terracina (Chairman), Mr. Franco Bertoli and Mr. Gian Franco Oliviero Mattei(who replaced Mr. Marco Salomoni on June 11, 2013).
Board of Statutory Auditors
Under Italian law, the Company is required to have a Board of Statutory Auditors,
appointed by the shareholders, which has 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
and accounting structure adopted by the Company and on its functioning. The Boardof Statutory Auditors of the Company consists of Mr. Antonino Parisi (Chairman), Mr.
Roberto Spada and Mr. David Terracina.
Dividends
The Company may distribute dividends subject to the approval of the shareholders inan ordinary shareholders’ meeting.
On April 5, 2013, the Board recommended the payment of a final dividend of Euro/
cents 9 per share in the capital of the Company, representing a total dividend of Euro
230,294,160. The shareholders approved this dividend at the Shareholders’ General
Meeting of the Company held on May 23, 2013. The dividend was paid on June 20,
2013.
No dividends have been declared or paid by the Company in respect of the six months
ended July 31, 2013.

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Change in Information of Directors Pursuant to Listing Rule 13.51B(1)Pursuant to Rule 13.51B(1) of the Listing Rules, the change in information of Director
since the Company’s 2012 Annual Report is set out below:
Name of Director

ChangeSing Cheong Liu

Ceased as a member of the Council of The Hong Kong University of Science and Technology
with effect from March 31, 2013

Gaetano MiccichéElected as a member of the Management Board of Intesa Sanpaolo S.p.A. on May 9, 2013
Granted the honorary title “Cavaliere del Lavoro” by the President of the Republic of Italy
on May 31, 2013

Gian Franco Oliviero Mattei

Ceased as Chairman and CEO of HGM – Holding Gruppo Marchi S.p.A. with effect from June24, 2013
Elected as Chairman of Adenium Sgr S.p.A with effect from April 30, 2013

Directors’ Securities Transactions
The Company has adopted written procedures governing Directors’ securities
transactions in compliance with on terms no less 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 arelikely to be in possession of unpublished inside information of the Group are also
subject to compliance with written procedures. Specific written confirmations havebeen obtained from each Director to confirm compliance with the Model Code for thesix months ended July 31, 2013. There was no incident of non-compliance during thesix months ended July 31, 2013.
Purchase, Sale, or Redemption of the Company’s Listed Securities
Neither the Company nor any of its subsidiaries has purchased, sold or redeemed anyof the Company’s listed securities during the six months ended July 31, 2013.
Directors’ interests and short positions in securities
As at July 31, 2013, the Directors and chief executives of the Company and theirassociates had the following interests in the shares, underlying shares and debenturesof the Company and its associated corporations (within the meaning of Part XV of the
Securities and Futures Ordinance (“SFO”)) as recorded in the register required to be
kept under Section 352 of the SFO or as otherwise notiﬁed to the Company and The
Stock Exchange of Hong Kong Limited (the “Stock Exchange”) pursuant to the Model
Code:(a) Long positions in shares and underlying shares of the Company
Name of Director

Number of Shares

Nature of Interest

Approximate Percentage
of Issued Capital

Ms. Miuccia Prada Bianchi

2,046,470,760(Notes 1 and 2)

Interest of Controlled
corporation

80%

Mr. Patrizio Bertelli

2,046,470,760(Notes 1 and 3)

Interest of Controlled
corporation80%

Notes:

28

1.

Prada Holding bv owns approximately 80% of the issued capital in the Company
and is therefore the holding company of the Company.

2.

The entire issued share capital in Prada Holding bv is held by Gipafin sàrl. Ms.
Miuccia Prada Bianchi, owns, indirectly through Ludo sa 53.8% (which comprises
438,460 ordinary shares and 100,000 preference shares) of the capital in Bellatrixsàrl, which in turn owns 65% (which comprises 1,650 ordinary shares and 300
preference shares) of the capital in Gipafin sàrl. Ms. Miuccia Prada Bianchi istherefore deemed under the SFO to be interested in all the shares registered in

PRADA Group

Prada Group-Interim Financial Report oct 4_2013.indd 28

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04/10/13 11.22

the name of Prada Holding bv. Ms. Miuccia Prada Bianchi is also a director of Ludosa.
3.

Mr. Patrizio Bertelli owns, indirectly through companies owned by him (PaBe1 sa,
PaBe2 sa, PaBe3 sa and PaBe4 sa), 35% (which comprises 750 ordinary sharesand 300 preference shares) of the capital in Gipafin sàrl. Mr. Patrizio Bertelli istherefore deemed under the SFO to be interested in all the shares registered in
the name of Prada Holding bv.

The interests of Ms. Miuccia Prada Bianchi and Mr. Patrizio Bertelli in the shares of theCompany as at July 31, 2013 are summarized in the following chart:

Miuccia Prada
Bianchi

Patrizio
Bertelli

Ludo S.A.
53.8%

PaBe1 S.A.
17.6%

PaBe2 S.A.
5.8%

PaBe3 S.A.
5.8%

PaBe4 S.A.
5.8%

Bellatrix S.à.r.l.
65%

Gipafin S.à.r.l.
100%

Prada
Holding B.V.
80%

PRADA S.p.A.

PRADA Group

Prada Group-Interim Financial Report oct 4_2013.indd 29

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04/10/13 11.22

(b) Long positions in shares and underlying shares of associated corporations:
Name ofDirector

Name of associatedcorporations

Class of shares

Numberof shares

Nature of Interests

Approximate
percentage ofInterests

Ms. Miuccia
Prada Bianchi

Prada Holding bv

Common Shares

1,001

Controlled Corporation

100%

Prapar Corporation

Common Shares

50

As above

100%

EXHL Italia srl

Participation Quotas (Euro)

15,000As above

100%

I.P.I. (21) UK ltd

Ordinary Shares

750,000

As above

100%

MFH Munich Fashion
Holding gmbh

Registered Share1

As above100%

PAC srl (in liquidation) Participation Quotas (Euro)30,600As above100%

Gipafin sàrl

Ordinary Shares

1,650

As above

68.75%

Gipafin sàrl

Preference Shares300

As above

50%

Bellatrix sàrl

Ordinary Shares

438,460

As above

49.83%

Bellatrix sàrl

Preference Shares

100,000

As above

83.34%

Ludo sa

Ordinary Shares

100,310

Beneficial Owner

100%

PRADA Arte bv

Registered Shares

180

Controlled Corporation

100%

Arte One bv

Ordinary Shares

180

As above100%

PRA 1 srl

Participation Quotas (Euro)

10,000As above100%

Prada Holding bv

Common Shares

1,001

Controlled corporation

100%

Mr. Patrizio
Bertelli

Prapar Corporation

Common Shares

50

As above

100%

EXHL Italia srl

Participation Quotas (Euro)

15,000As above

100%

I.P.I. (21) UK ltd

Ordinary Shares

750,000

As above

100%

MFH Munich Fashion
Holding gmbh

Registered Share1

As above100%

PAC srl (in liquidation) Participation Quotas (Euro)30,600As above100%

Gipafin sàrl

Ordinary Shares

750

As above31.25%

Gipafin sàrl

Preference Shares300

As above

50%

Save as disclosed above, as at July 31, 2013, none of the Directors and chief executivesof the Company or their associates had any interest or short position in the shares,
underlying shares and debentures of the Company or any of its associated corporations(within the meaning of Part XV of the SFO) as recorded in the register required to be
kept under Section 352 of the SFO or as otherwise notiﬁed to the Company and theStock Exchange pursuant to the Model Code.
Substantial shareholders’ interests and short positions in securities
As at July 31, 2013, other than the interests of the Directors of the Company as
disclosed above, the following persons had interests or short positions in the sharesor underlying shares of the Company which fall to be disclosed to the Company under
Section 336 of the SFO:
Name of Shareholder

Capacity

Number of Shares

Approximate percentage
of issued capital

Prada Holding bv

Legal and beneficial owner

2,046,470,76080%Gipafin sàrlInterest of controlled corporation

2,046,470,760

80%Bellatrix sàrlInterest of controlled corporation

2,046,470,76080%

Ludo sa

Interest of controlled corporation

2,046,470,760

80%

Note:
Prada Holding bv owns approximately 80% of the issued capital in the Company. As
Ludo sa owns 53.8% of Bellatrix sàrl which in turn owns 65% of Gipafin sàrl (Gipafin sàrlowns the entire issued capital in Prada Holding bv), Gipafin sàrl, Bellatrix sàrl and Ludo sa
were all deemed to be interested in the 2,046,470,760 shares held by Prada Holding bv.

30

PRADA Group

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Interim condensed consolidated financial statements

PRADA Group

Prada Group-Interim Financial Report oct 4_2013.indd 31

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31

04/10/13 11.22

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

Note

July 312013(unaudited)

January 31
2013(audited)

AssetsCurrent assets
Cash and cash equivalents

6439,654571,746

Trade receivables, net

7317,519

304,525

Inventories, net

8408,534

343,802

Derivative financial instruments - current

922,86343,060Receivables from, and advance payments to, parent company andother related parties

10

17,973

19,493

Other current assets

11

Total current assets

125,607

104,823

1,332,150

1,387,449

Non-current assets
Property, plant and equipment

12

1,047,291

857,299

Intangible assets

13879,477

878,750

Associated undertakings

14

16,672

23,024

Deferred tax assets

32

182,244

176,057

Other non-current assets

15

72,02861,682Derivative financial instruments - non current

9

198

1,018

Total non-current assets

2,197,910

1,997,830

Total Assets

3,530,060

3,385,279

175,570

Liabilities and Shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans

16

159,468

Payables to parent company and other related parties

17

5,018

5,599

Trade payables

18

402,921330,613
97,148Current tax liabilities

19

105,229

Derivative financial instruments - current

9

1,845

912

Obligations under finance leases - current

20

197

575

Other current liabilities

21

Total current liabilities

132,153

131,645806,831742,062
78,830Non-current liabilities
Long-term financial payables

22

81,124

Obligations under finance leases non-current

20

448

518

Post-employment benefits

23

57,88845,538Provision for risks and charges

24

47,75046,914

Deferred tax liabilities

32

45,50555,636

Other non-current liabilities

25

89,05484,905Derivative financial instruments non-current

9

157

384

321,926

312,725

1,128,757

1,054,787

Total non-current liabilities
Total Liabilities
Share capital

255,882

255,882

Other reserves

1,860,837

1,480,747

Translation reserve(36,862)(42,288)

Net profit for the year

308,239625,681

Total Shareholders’ Equity – Group26

2,388,096

2,320,022

Shareholders’ Equity – Non-controlling interests

27

13,207

10,4703,530,060

3,385,279

Total Liabilities and Shareholders’ Equity

Net current assets
Total assets less current liabilities

32

PRADA Group

Prada Group-Interim Financial Report oct 4_2013.indd 32

525,319645,387

2,723,229

2,643,217

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04/10/13 11.22

Consolidated income statementNote

six months
ended
July 312013(unaudited)%

six months
ended
July 312012(unaudited)%

Net revenues

28

1,728,065

100.0%

1,547,373

100.0%

Cost of goods sold29

(460,407)-26.6%(440,872)-28.5%

1,267,658

73.4%

1,106,501

71.5%(809,320)-46.8%(711,619)-46.0%

458,33826.5%

394,882

25.5%(amounts in thousands of Euro)

Gross margin
Operating expenses

30

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

31(15,194)-0.9%(2,911)-0.2%

Dividend received from investments

14

284

-

-

-

443,42825.7%

391,97125.3%(130,609)-7.6%(102,756)-6.6%

Net income for the period from continuing operations

312,81918.1%

289,215

18.7%

Net income for the period

312,81918.1%

289,215

18.7%

4,580

0.3%

2,806

0.2%

308,23917.8%

286,409

18.5%

Income before taxation
Taxation

32

Net income – Non-controlling interests
Net income – Group
Basic and diluted earnings per share (in Euro per share)

PRADA Group

Prada Group-Interim Financial Report oct 4_2013.indd 33

27

0.120

0.112

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33

04/10/13 11.22

Consolidated statement of cash flows(amounts in thousands of Euro)

Income before taxation

six months
ended
July 312013(unaudited)

six months
ended
July 312012(unaudited)

443,428

391,971

91,82573,630

Income statement adjustments
Depreciation and amortization
Impairment of property, plant and equipment and intangible assets

890

861

Non-monetary financial (income)/expenses

14,512

6,478

Other non-monetary (income)/ expenses

41,137

9,661

Changes in Statement of financial position
Other non-current assets and liabilities(14,899)(7,721)

Trade receivables, net(13,674)(20,671)

Inventories, net(65,911)381

Trade payables

71,296

41,869Other current assets and liabilities(33,105)(30,657)

Cash flows from operating activities

535,499

465,802

Financial expenses, net - third parties(6,854)(4,498)

Taxes paid

(124,881)(129,113)

Net cash flows from operating activities

403,764

332,191

Purchases of property, plant and equipment and intangible assets(292,484)(142,008)

-

1,954

Financial assets held for trading

(989)

-

Dividend received from investments

284-

Cash flows generated (utilized) by investing activities(293,189)(140,054)

Dividends paid to shareholders of PRADA spa(230,294)(122,963)

Dividends paid to Non-controlling shareholders(1,881)(2,645)

Disposals of assets

Repayment of loans to related parties
New loans to related companies
Repayment of short term portion of long term borrowings - third parties

(538)

-

(1,545)(143,436)(61,472)

New long-term borrowings – third parties arranged

29,812

29,840Change in short-term borrowings – third parties

100,801(9,883)

Capital contribution by Non-controlling interests

10

1,161

Cash flows generated (utilized) by financing activities(245,918)(168,045)

Change in cash and cash equivalents, net of bank overdrafts(135,343)

24,092Foreign exchange differences

3,262

13,546

Opening cash and cash equivalents, net of bank overdraft

571,722353,554

Closing cash and cash equivalents, net of bank overdraft439,641

391,192

Cash and cash equivalents

439,654391,594

Bank overdraft
Closing cash and cash equivalents, net of bank overdraft

34

(930)

PRADA Group

Prada Group-Interim Financial Report oct 4_2013.indd 34

(13)

(402)

439,641

391,192

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04/10/13 11.22

Statement of changes in consolidated shareholders’ equity(amounts in thousands of Euro, except for number of shares)(amounts inthousandsof Euro)Balance atJanuary 31, 2012
(audited)

Number ofsharesShare
Capital2,558,824,000

255,882

Cash flow
Share
Translation
hedge
premium
reserve
reserve
reserve

410,047(17,239)(4,173)

Actuarial
Available
gain
for sale(losses)
reserve
reserve(1,192)

(58)

Other
reserves

747,548

EquityNonNet attributable
controlling
profit to owners ofinterests
the Group

431,929

1,822,743

8,224

Total
Equity1,830,967

Allocation of 2011
net profit

-

-

-

-

-

-

-

431,929 (431,929)

-

-

-

Dividends

-

-

-

-

-

-

-

(127,941)-(127,941)(2,645)(130,586)

Capital injection in
subsidiaries

-

-

-

-

-

-

-

-

-

-

1,161

1,161

Comprehensive
income for theyear(recycled to P&L)

-

-

-

41,593(6,856)

-

2,869

-

286,409

324,0163,122

327,138

Comprehensive
income for theyear(not recycled to
P&L)

-

-

-

-

-

(1,336)---(1,336)-(1,336)

Balance at
July 31, 2012
(unaudited)

2,558,824,000

255,882

410,047

24,354(11,029)(2,528)2,811

1,051,536

286,4092,017,482

9,862

2,027,344(amounts inthousandsof Euro)Number ofsharesShare
CapitalActuarial
Available
gain
for sale(losses)
reserve
reserve

Other
reserves

EquityNonNet attributable
controlling
profit to owners ofinterests
the Group

Total
Equity2,558,824,000

255,882

Balance atJanuary 31, 2012
(audited)

Cash flow
Share
Translation
hedge
premium
reserve
reserve
reserve

410,047(17,239)(4,173)(1,192)(58)

747,548

431,929

1,822,744

8,224

1,830,968

Allocation of 2011
net profit

-

-

-

-

-

-

-

431,929 (431,929)

-

-

-

Dividends

-

-

-

-

-

-

-

(127,941)-(127,941)(5,576)(133,517)

Capital injection in
subsidiaries

-

-

-

-

-

-

-

-

-

-

1,166

1,166

Comprehensive
income for theyear(recycled to P&L)

-

-

-

(25,049)

24,321

-

5,544

-

625,681

630,497

6,656

637,153

Comprehensive
income for theyear(not recycled to
P&L)

-

-

-

-

-

(5,278)---(5,278)-(5,278)

Balance atJanuary 31, 2013
audited)2,558,824,000

255,882

410,047(42,288)

20,148(6,470)5,486

1,051,536

625,6812,320,022

10,4702,330,492

Allocation of 2012
net profit

-

-

-

-

-

-

-

625,681 (625,681)

-

-

-

Dividends

-

-

-

-

-

-

-

(230,294)-(230,294)(1,881)(232,175)

Capital injection in
subsidiaries

-

-

-

-

-

-

-

-

-

-

10

10

Comprehensive
income for theyear(recycled to P&L

-

-

-

5,426

(10,225)-(4,764)-308,239

298,676

4,608

303,284

Comprehensive
income for theyear(not recycled to
P&L)

-

-

-

-

-

(308)

-

-

-

(308)

-

(308)

2,558,824,000

255,882

410,047(36,862)

9,923(6,778)722

1,446,923

308,2392,388,096

13,2072,401,303

Balance at
July 31, 2013
(unaudited)

Under Italian law, the Company is required to allocate a portion of its net profit tonon-distributable reserves and to provide additional information on the distribution of
earnings for the period, Note 33.

PRADA Group

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Statement of consolidated comprehensive income
six months
ended
July 312013(unaudited)

twelve months
ended
January 31
2013(audited)six months
ended
July 312012(unaudited)

312,819

633,277

289,215

5,454(25,989)

41,190(25,989)

41,190(14,099)

33,530(9,475)

3,874(9,209)2,619

Change in Cash Flow Hedge reserve less tax impact(10,225)

24,321(6,856)
3,826(amounts in thousands of Euro)Net income for the period – Consolidated
A)

Items recycled to P&L:

Change in Translation reserve
Tax impact-

Change in Translation reserve less tax impact
Change in Cash Flow Hedge reserve
Tax impact

5,454

-

Change in Fair Value reserve(6,352)

7,391

Tax impact

1,588(1,847)(957)

Change in Fair Value reserve less tax impact(4,764)

5,544

2,869

(385)

(6,369)(1,843)

77

1,091

507

(308)

(5,278)(1,336)302,976

631,875

325,802

4,608

6,656

3,122

298,368

625,219

322,680

B)

Item not recycled to P&L:

Change in Actuarial reserve
Tax impact
Change in Actuarial reserve less tax impact
Consolidated comprehensive income for the period
Comprehensive income for the period – Non-controlling Interests
Comprehensive income for the period – GroupThe accounting policies and the following notes constitute an integral part of theInterim condensed consolidated financial statements.

36

PRADA Group

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Notes to the Interim condensed consolidated financial statements

PRADA Group

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37

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1.

General information
PRADA spa (the “Company”), together with its subsidiaries (jointly the “Group”), islisted 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 and accessories. The Group also operates, underlicensing agreements, in the eyewear, fragrances and mobile telephone sectors. Its
products are sold in more than 70 countries worldwide through a network that included
491 Directly Operated Stores (DOS) at July 31, 2013, and a selected network of luxury
department stores, independent retailers and franchise stores.
The Company is a joint-stock company, registered and domiciled in Italy. Its registeredoffice is in via Fogazzaro 28, Milan, Italy. At July 31, 2013, 79.98% of the share capital
was owned by PRADA Holding bv, a company domiciled in The Netherlands, while theremaining shares were floating on the Main Board of the Hong Kong Stock exchange.
These Interim condensed consolidated financial statements were approved by the
Board of Directors of PRADA spa on September 17, 2013.

2.

Basis of preparation
The Interim condensed consolidated financial statements of the PRADA Group for thesix months ended July 31, 2013, including the “Consolidated statement of financial
position”, the “Consolidated income statement”, the “Consolidated comprehensive
income statement”, the “Consolidated statement of cash flows“, the “Statementof changes in consolidated shareholders’ equity” and the “Notes to the Interim
condensed consolidated financial statements” have been prepared in accordance with
“IAS 34 Interim Financial Reporting” as endorsed by the European Union.
The Interim condensed consolidated financial statements should be read together with
the Consolidated financial statements of the PRADA Group for the twelve months ended
January 31, 2013, that were prepared in accordance with the International Financial
Reporting Standards (“IFRS”) issued by the International Accounting Standards Board(“IASB”) as endorsed by the European Union.
At the date of presentation of these Interim condensed consolidated financial
statements, there were no differences between IFRS as endorsed by the European
Union, and applicable to the PRADA Group, and those issued by the IASB.
IFRS also refers to all International Accounting Standards (“IAS”) and all interpretationsof the International Financial Reporting Interpretations Committee (“IFRIC”), previously
called the Standing Interpretations Committee (“SIC”).
The Interim condensed consolidated financial statements have been prepared using
the same scope of consolidation, basis of consolidation and accounting policies
adopted for the preparation of the Consolidated financial statements for the twelve
months ended January 31, 2013, except for the amendments to accounting standards
as reported below under Note 3.
The Group has prepared the Consolidated statement of financial position presenting
separately current and non-current assets and liabilities. All the details needed for more
complete information are provided in the Notes to the interim condensed consolidated
financial statements. The Consolidated income statement is classified by destination.
The cash flow information is provided in the Consolidated Statement of cash flows
which has been prepared under the indirect method.

38

PRADA Group

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The Interim condensed consolidated financial statements have been prepared on agoing concern basis and presented in Euro which is also the functional currency of theCompany.
3.

Amendments to IFRS
New standards and amendments issued by the IASB, endorsed by the European
Union and applicable to the PRADA Group from February 1, 2013
The following amendments to IFRS have been endorsed by the European Union andare applicable to the PRADA Group effective from February 1, 2013. The matters inquestion do not have any significant impact to the Group as of the date of these Interim
condensed consolidated financial statements:––“IAS 1 Presentation of financial statements”. The objective of the amendments
made to this Standard, effective from annual periods beginning July 1, 2012, are to
make the presentation of the increasing number of items of other comprehensive
income clearer, and to assist users of the financial statements in distinguishing
between the items of other comprehensive income that can be reclassified
subsequently to profit or loss, and those that will never be reclassified to profit or
loss.

––

“IAS 19 Employee benefits”. The amendments made to this Standard, effectivefrom annual periods beginning on or after January 1, 2013, should help users offinancial statements to better understand how defined benefit plan affect entity’s
financial position, financial performance and cash flows.

––“IFRS 13 Fair Value measurement”. This new Standard, effective from annual
periods beginning on or after January 1, 2013, defines the fair value, sets out ina single IFRS a framework for measuring the fair value and requires disclosuresabout fair value measurements. This IFRS applies to IFRSs that require or permit
fair value measurements or disclosures about fair value measurements. It does
not require fair value measurements in addition to those already required or
permitted by other IFRSs and is not intended to establish valuation standards oraffect valuation practices outside financial reporting.

––“IAS 12 Income Taxes”. The amendments made to this Standard, effective fromannual period beginning on or after January 1, 2013, provide a practical approachfor measuring deferred tax assets and deferred tax liabilities when an investment
property is measured using the fair value model in “IAS 40 Investment property”.
These amendments have to be applied retrospectively.

––“IFRS 7 Financial Instruments: Disclosures”. The amendments made to thisStandard, effective from annual periods beginning on or after January 1, 2013,
require additional disclosures to enable users of its financial statements toevaluate the effect, or potential effect, of netting arrangements on the entity’s
financial position. The disclosures required by these amendments have to be
applied retrospectively.

––“IFRIC Interpretation 20 Stripping Costs in the Production Phase of a Surface
Mine”. This new IFRIC 20, effective from annual periods beginning on or afterJanuary 1, 2013, aimed to provide guidance on recognition of production stripping
costs as an asset.

––

Amendments to “IFRS 1 First-time Adoption of International Financial ReportingStandards – Government Loans”. The amendments, effective from annual periods
beginning on or after January 1, 2013, deal with loans received from governments
at a below market rate of interest and their objective is to give first-time adoptersof IFRSs relief from full retrospective application on transition to IFRSs.

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––Annual improvements to IFRSs (2009-2011 Cycle). Such improvements amended:• “IAS 1 Presentation of Financial Statements”. New criteria have been
introduced when reporting comparative information are provided in addition
to the minimum comparative financial statements and when a change inaccounting policy, a retrospective restatement or a reclassification occur;• “IAS 16 Property, Plant and Equipment”. The amendment establishes that
items such as spare parts, stand-by equipment and servicing equipment arerecognized with this IFRS when they meet the definition of IAS 16. Otherwise,
such items are classified as inventory;• “IAS 32 Financial Instruments: Presentation”. The amendment clarified that
income tax relating to distributions to holders of an equity instrument and totransaction costs of an equity transaction shall be accounted for in accordancewith IAS 12 “Income taxes”.

New standards and amendments issued by the IASB, endorsed by the European
Union, but not yet applicable to the PRADA Group as effective from annual
periods beginning on or after January 1, 201440––

“IFRS 10 Consolidated Financial Statements”. This new Standard, effective at thelatest as from the commencement date of a financial year starting on January 1,
2014, grounds on previous version of “IAS 27 Consolidated and Separate Financial
Statements” and provide more guidance for the presentation and preparation of
consolidated financial statements. It enforces the definition of control as basis fordetermining which entities have to be consolidated. It also supersedes “IAS 27
Consolidated and Separate Financial Statements” and “SIC 12 Consolidation –Special Purpose Entities”.

––“IFRS 11 Joint Arrangements”. This new Standard, effective at the latest as fromthe commencement date of a financial year starting on January 1, 2014, establishes
principles for financial reporting by parties to a joint arrangement and supersedes“IAS 31 Interests in Joint Ventures” and “SIC 13 Jointly Controlled Entities - Nonmonetary Contributions by Ventures’”. The IFRS provides guidelines to determine
the type of joint arrangement in which an entity is involved (joint operation or joint
venture) by assessing its rights and obligations arising from the arrangement.

––“IFRS 12 Disclosure of Interests in Other Entities”. This new standard, effectiveat the latest as from the commencement date of a financial year starting on
January 1, 2014, applies to entities that have an interest in a subsidiary, a joint
arrangement, an associate or an unconsolidated structured entity. It requires
the entity to disclose information that enable users of its financial statements toevaluate the nature of, and risks associated with, its interests in other entities aswell as the effects of those interests on its financial position, financial performanceand cash flows.

––“IAS 28 Investment in Associates and Joint Ventures”. The amendments to thisStandard, effective at the latest as from the commencement date of a financial
year starting on January 1, 2014, have to be read together with “IFRS 11 Joint
Arrangements” and “IAS 27 Separate Financial Statements”. The standard (asamended in 2011) is to be applied by all entities that are investors with joint controlof, or significant influence over, an investee and defines the equity method as amethod of accounting whereby the investment is initially recognized at cost andadjusted thereafter for the post-acquisition change in the investor’s share of net
assets of the investee.

––“IAS 27 Separate Financial Statements”. The amendments to this standard
followed the issue of “IFRS 10 Consolidated Financial Statements”, “IFRS 11

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Joint Arrangements”, “IFRS 12 Disclosure of Interests in Other Entities” andthe amendments to “IAS 28 Investment in Associates and Joint Ventures”
and prescribe the accounting and disclosure requirements for investments in
subsidiaries, joint ventures and associates when an entity prepares separate
financial statements. Such amendments are effective at the latest as from thecommencement date of a financial year starting on January 1, 2014.
––

Transition Guidance (amendments to IFRS 10, IFRS 11 and IFRS 12) provided
additional transition relief by limiting the requirement to present adjusted
comparative information to the period immediately preceding the date of initial
application when the consolidation conclusion reached at the date of initial
application were different between IFRS 10 and IAS 27/SIC 12.

––

IAS 32 “Financial Instruments: Presentation”. The amendments made to thisStandard, effective from annual periods beginning on or after January 1, 2014, andto be applied retrospectively, clarify the criterion to be followed when an entity
currently has legally enforceable right to set off the financial assets and financial
liabilities.

As requested by the Hong Kong Stock exchange the Group assessed the financial
effects of IFRS 10 on its consolidated figures and did not raise any detailed disclosure
to be provided as the application of this new standard would not have any impact on
the PRADA Group Interim condensed consolidated financial statements at July 31,
2013. As far as all of the others new IFRS and amendments above mentioned concern,
the Group is currently assessing their impact on its consolidated financial statements.
New standards and amendments issued by the IASB, not yet endorsed by theEuropean Union and not applicable to the PRADA Group as effective from annual
periods beginning on or after January 1, 2014––

”IFRS 9 Financial instruments”. This new Standard, effective from annual periods
beginning on or after January 1, 2015, represents the first of three phases aimed at
replacing entirely ”IAS 39 Financial instruments: recognition and measurement”.
Such phase 1, named “Classification and measurement of financial assets andfinancial liabilities” requires all financial assets to be classified on the basis of
the entity’s business model for managing the financial assets and the contractual
cash flow characteristics of the financial asset. Assets are initially measured atfair value plus, in the case of a financial asset not at fair value through profit orloss, particular transaction costs. Assets are subsequently measured at amortizedcost or fair value. On the liabilities side, most of the requirements of IAS 39
for classifying and measuring financial liabilities remained unchanged, with the
exception of the recognition through other comprehensive income, and no longer
through income statements, of the change in the fair value of financial liabilities asa result of a change in the credit rating.

––

Investment Entities (amendments to IFRS 10, IFRS 12 and IAS 27) introduced
an exception to the principle that all subsidiaries shall be consolidated. The
amendments define an investment entity and require a parent that is an investment
entity to measure its investments in particular subsidiaries at fair value throughprofit or loss instead of consolidating those subsidiaries in its consolidated andseparate financial statements. In addition, the amendments introduce new
disclosure requirements related to investment entities in “IFRS 12 Disclosure ofInterests in Other Entities” and “IAS 27 Separate Financial Statements”. Suchamendments are required to apply for annual periods beginning on or after January
1, 2014.

––

Recoverable amount disclosures for non-financial assets (amendments to “IAS
36 Impairment of Assets“). The amendment requires more disclosure about the

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recoverable amount of any cash-generating unit for which the carrying amountof goodwill or intangible assets with indefinite useful lives allocated to that unit
is significant in comparison with the entity’s total carrying amount of goodwill or
intangible assets with indefinite useful lives. Such amendments are required toapply for annual periods beginning on or after January 1, 2014. Earlier applicationis permitted. An entity shall not apply those amendments in periods (including
comparative periods) in which it does not also apply IFRS 13.
––

Amendments to “IAS 39 Financial Instruments: Recognition and Measurement“.
Such amendments provided relief from discontinuing hedge accounting whennovation to a central counterparty following the introduction of a new law or
regulation of a derivative designated as a hedging instrument meets certain
criteria. Such amendments are required to apply for annual periods beginning on
or after January 1, 2014.

––“IFRIC Interpretation 21 Levies“. This interpretation, effective from annual periods
beginning on or after January 1, 2014, provides guidance on when to recognize
a liability for a levy imposed by a government, both for levies that are accounted
for in accordance with “IAS 37 Provisions, Contingent Liabilities and Contingent
Assets“ and those where the timing and amount of the levy is certain.

As at September 17, 2013, the date of approval of these Interim condensed consolidated
financial statements, the European Union has not completed yet the endorsement of
the new standards and amendments as described above.
4.

Incorporation of subsidiaries
On February 3, 2013, the Group set up PRADA Retail SPC in order to develop its
commercial activities in Qatar.
On February 7, 2013, the Group set up Kenon ltd, a real estate company based in
London (United Kingdom).
On June 24, 2013, the Group set up PRADA Kazakhstan llp in order to develop its retail
activities in Kazakhstan.
On July 5, 2013, the Group set up PRADA New Zealand Limited in order to develop its
commercial activities in New Zealand.
On July 10, 2013, PRADA spa and a third party company, Fin-Reta srl, incorporated in
Italy, 60% and 40% respectively, the subsidiary Pellettieri d’Italia srl in order to develop
manufacturing activities.

5.

Operating segments“IFRS 8 Operating Segments“ requires that detailed information be provided for each
operating segment that makes up the business. An operating segment is intended as abusiness division whose operating results are regularly reviewed by top management
so that they can make decisions about the resources to be allocated to the segment
and assess its performance.
The Group’s matrix-based organizational structure - whereby responsibility is assigned
cross-functionally in relation to brands, products, distribution channels and geographicalareas, together with the complementary nature of the production processes of thevarious brands and the many relationships between the different business segments– means that operating segments that meet the IFRS 8 definition cannot be identified,
as top management is only provided with income statement results on a Group-widelevel. For this reason, the business has been considered as a single operating segment
as this better represents the specific characteristics of the PRADA Group businessmodel.

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Information on net revenues by brand, geographical area, product and distribution
channel are anyway hereafter reported together with the information on the EBITDA
by brand and on the non-current assets by geographical area. Information on net
revenues is also reported in the Financial review where it is accompanied by further
information on the Group’s operating results.
Net sales analysis
six months
ended
July 312013(unaudited)%

six months
ended
July 312012(unaudited)%% change

Italy
Europe268,53115.7%

259,326

17.0%

3.5%

374,300

21.9%

349,277

22.9%

7.2%

Americas231,58713.6%

204,161

13.4%

13.4%

Asia Pacific627,56436.8%

532,471

34.9%

17.9%

Japan (including Hawaii)

159,449

9.3%

164,415

10.8%

-3.0%

Middle East

43,287

2.5%

12,5500.8%

244.9%(amounts in thousands of Euro)Net sales by geographical area

Other countries

2,866

0.2%

2,487

0.2%

15.2%

1,707,584

100.0%

1,524,687

100.0%

12.0%

Prada

1,410,062

82.6%

1,233,433

80.9%

14.3%

Miu Miu

255,950

15.0%

245,971

16.1%

4.1%

Church's

32,6731.9%

31,0102.1%

5.4%

Car shoe

7,551

0.4%

11,3420.7%-33.4%Total
Net sales by brand

Other

1,348

0.1%

2,931

0.2%

-54.0%

Total

1,707,584

100.0%

1,524,687

100.0%

12.0%

Net sales by product line
Clothing

248,81714.6%

248,677

16.3%

0.1%

1,156,369

67.7%

943,060

61.8%

22.6%

Footwear282,39616.5%

315,290

20.7%-10.4%

Other

20,002

1.2%

17,660

1.2%

13.3%

Total

1,707,584

100.0%

1,524,687

100.0%

12.0%

1,422,460

83.3%

1,229,966

80.7%

15.7%

285,124

16.7%

294,721

19.3%

-3.3%

Total

1,707,584

100.0%

1,524,687

100.0%

12.0%

Net sales

1,707,584

98.8%

1,524,687

98.5%

12.0%

Royalties

20,481

1.2%

22,686

1.5%

-9.7%

1,728,065

100.0%

1,547,373

100.0%

11.7%

Leather goods

Net sales by distribution channelDOS
Independent customers and franchises

Total net revenues

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EBITDA by brand(amounts in thousands of Euro)six months ended July 31, 2013
(unaudited)

Group

Prada

Miu Miu

Church’s

Car Shoe

Others

Net sales

1,707,584

1,410,062

255,950

32,673

7,551

1,348

Royalties

20,481

19,261

1,214

6

-

-

1,728,065

1,429,323

257,164

32,679

7,551

1,348

EBITDA

551,053

507,854

43,6802,569(2,916)(134)

EBITDA %

31.9%

35.5%

17.0%

7.9%

-

-

six months ended July 31, 2012
(unaudited)

Group

Prada

Miu Miu

Church’s

Car Shoe

Others

Net sales

1,524,687

1,233,433

245,971

31,01011,342

2,931

Royalties

22,686

21,972

651

63

-

-

1,547,373

1,255,405

246,62231,073

11,342

2,931

EBITDA

469,373415,749

52,653

2,326

(947)

(408)

EBITDA %

30.3%

33.1%

21.3%

7.5%

-

-

Net revenues

Net revenues

In the six months ended July 31, 2013, the EBITDA of the Prada brand totaled Euro507.9 million, or 35.5% on relevant net revenues, up by 22.2% compared to Euro
415.7 million, or 33.1%, posted in the six months ended July 31, 2012. The improved
margin was the direct expression of the business expansion combined with a more
profitable mix of sales in terms of channel, product category and geographical area,
which allowed the brand to sustain the increased operative expenses. In fact, in
addition to the direct cost deriving from the retail business expansion, major efforts
were spent to sustain the brand equity. Once again, in these first six months of2013, Prada pursued its innovative and unconventional cooperation with the art world
ranging over cinema, dressing the Great Gatsby movie, to literature, launching a literarycontest with Giangiacomo Feltrinelli Editor and art, sponsoring through the Fondazione
Prada the exposition “When Attitudes Become Form: Bern 1969/Venice 2013” inVenice. Moreover, for the fourth time, the Group also sponsored the Luna Rossa yacht
challenging the XXXIV America’s Cup edition that started with the America’s Cup World
Series in 2012.
The EBITDA of the Miu Miu brand amounted to Euro 43.7 million for the six months
ended July 31, 2013, or 17% on net revenues, down by 17% compared to the same
period of 2012, when the incidence on net revenues was 21.3%. As previously
highlighted, Miu Miu is still undergoing an intense investment phase, aimed to enlarge
its global DOS footprint and brand awareness in all international markets. Consequently,
the relative growth at the topline, broadly in line with the average of the luxury market,
was not sufficient to absorb the expansion of the retail network and the investments
made in communication and other brand building activities, such as the revisiting of thestores concept or the Miu Miu Women’s tales project that, in February 2013, added toits history the fifth short movie, “The Door” by Ava DuVernay.
The EBITDA of the Church’s brand for the six months ended July 31, 2013, totaled
Euro 2.6 million, up by 10.4% compared to the results achieved the same period oflast year. As a percentage on net revenues, the profitability increased from 7.5% in thefirst half of 2012 to 7.9% in the current period. The improvement achieved at the gross
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margin level was essentially delivered by the sales expansion, but it was partially offset
by the higher incidence of the selling expenses, following the recent openings in new
countries for the brand.
In the six months ended July 31, 2013, the EBITDA of the Car Shoe brand totaled
negative Euro 2.9 million. The further decline compared to negative Euro 0.9 million
recorded in the same six months of 2012 was substantially caused by timing difference
in deliveries to independent clients.
Geographical information
The following table reports the carrying value of most of the Group’s non-current assets
by geographical area, as requested by IFRS 8 for entities, like the PRADA Group, thathave a single reportable segment.
July 312013(unaudited)

January 31
2013(audited)

Italy

507,299484,945

Europe960,634

842,289

Americas197,052

185,688Japan

107,119

93,156

Asia Pacific

199,377

175,674

Other countries

39,91534,852

2,011,396

1,816,604(amounts in thousands of Euro)Total

The total amount of Euro 2,011.4 million (Euro 1,816.6 million at January 31, 2013)
relates to the Group’s non-current assets excluding, as requested by IFRS 8, thoserelating to financial instruments, deferred tax assets and surplus arising from a pension
benefit scheme.
Consolidated statement of financial position
6.

Cash and cash equivalents
Cash and cash equivalents are detailed as follows:(amounts in thousands of Euro)

July 312013(unaudited)

January 31
2013(audited)

Cash on hand

24,96324,188Bank deposit accounts

246,720

306,898

Bank current accounts

167,971

240,660

Total

439,654571,746

At July 31, 2013, bank current accounts and deposits accounts generated interest
income of between 0.0% and 4.25% per annum (between 0.0% and 4% at January
31, 2013).

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7.

Trade receivables, net
Trade receivables are detailed as follows:(amounts in thousands of Euro)

July 312013(unaudited)

January 31
2013(audited)

Trade receivables – third parties

294,351

286,390

Allowance for bad and doubtful debts(12,140)(11,547)

Trade receivables – related parties

35,30829,682

Total

317,519

304,525

Trade receivables from third parties increased for the six months ended July 31, 2013,by Euro 8 million compared to January 31, 2012, and stood at Euro 294.4 million at July
31, 2013. The increase was generated by slightly higher volumes in general as well
as by the higher sale prices of the fall/winter collection delivered to wholesalers at theend of the first half 2013.
Trade receivables from related parties included a total amount of Euro 31.9 million
essentially arising from the sales of finished products and royalties to companies
owned by the main shareholder of PRADA Holding bv and operating the retail business
in Italy under franchise agreements. Details of trade receivables from related parties
are provided in Note 36.
The allowance for doubtful debts was determined on a specific basis considering all
information available at the date the financial statements were prepared.
Movements occurred during the period were as follows:
July 312013(unaudited)

January 31
2013(audited)

11,547

11,681

Exchange differences

71

(67)

Increase

746

805

Uses

(224)

(754)

-

(118)

12,140

11,547

July 312013(unaudited)

January 31
2013(audited)

Raw materials

88,302

79,559Work in progress

32,811

24,620Finished products

362,044314,244

Allowance for obsolete and slow moving inventories(74,623)(74,621)

Total

408,534

343,802(amounts in thousands of Euro)

Opening balance

Reversals
Closing balance

8.

Inventories, net
Inventories are detailed as follows:(amounts in thousands of Euro)

The increase in inventories was essentially attributable to the higher unitary value ofthe more expensive fall/winter finished products stocked at July 31, 2013, as well

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as to larger quantities of raw materials purchased to support the growth of the retailbusiness.
Movements in the allowance for obsolete and slow moving inventories are analyzed
as follows:(amounts in thousands of Euro)

Balance at January 31, 2013 (audited)
Exchange differences
Balance at July 31, 2013 (unaudited)9.

Rawmaterials

Finished
Products

Total

29,75444,86774,621(1)

3

2

29,75344,87074,623

Derivative financial instruments, assets and liabilities, and financial risks
Derivative financial instruments: assets and liabilities, current portion.
July 312013(unaudited)

January 31
2013(audited)

Financial assets regarding derivative instruments

22,86343,060Financial liabilities regarding derivative instruments(1,845)(912)

Net carrying amount – current

21,01842,148(amounts in thousands of Euro)

Derivative financial instruments: assets and liabilities, non-current portion.
July 312013(unaudited)

January 31
2013(audited)

Financial assets regarding derivative instruments

198

1,018

Financial liabilities regarding derivative instruments

(157)

(384)

41

634

(amounts in thousands of Euro)Net carrying amount – non-current

The net carrying amount for type of derivative financial instruments, current and noncurrent taken together, consists of the following:(amounts in thousands of Euro)

July 312013(unaudited)

January 31
2013(audited)

IFRS7
Category

Forward contracts

9,072

20,983

Level II

Options

13,98923,095

Level II--

Level II

Positive fair value

23,06144,078Forward contracts(1,565)(138)

Level II

(9)-

Level IIInterest rate swaps(428)(1,158)

Level II

Negative fair value(2,002)(1,296)

Net carrying amount – current and non-current

21,05942,782

Interest rate swaps

Options

The Group entered into the financial derivative contracts in the course of its risk

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management activities in order to hedge financial risks connected with exchange andinterest rate fluctuations.
All of the above derivative instruments are qualified as Level II of the fair value hierarchy
proposed by IFRS 7. The Group did not enter into any derivative contract that may bequalified as Level I or III.
Foreign exchange rate transactions
The cash flows resulting from the Group’s international activities are exposed to
exchange rate volatility. In order to hedge this risk, the Group enters into options andforward sale and purchase agreements so as to guarantee the value in Euro (or in othercurrencies of the various Group companies) of identified cash flows. Expected future
cash flows regard the collection of trade receivables, settlement of trade payables andfinancial flows. The most important currencies in terms of hedged amounts were: Hong
Kong Dollar, US Dollar, Japanese Yen, GB Pound, Korean Won and Chinese Renminbi.
At the reporting date, the notional amounts of the derivative contracts designated as
foreign exchange risk hedges (as translated at the European Central Bank exchange
rate at July 31, 2013) were stated below.
Contracts in place at July 31, 2013, to hedge projected future trade cash flows.
Options

Forward sale
contracts (*)

Forwardpurchase
contracts (*)

July 312013(unaudited)

US Dollar

109,522

5,273-

114,795

GB Pound

39,216

9,273-

48,489Japanese Yen

64,26918,769-83,038Hong Kong Dollar

57,60349,541-

107,144(amounts in thousands of Euro)

Currency-

27,786-27,786Chinese Renminbi

Korean Won

27,40949,409-76,818Other

17,852

31,158-49,010

Total

315,871

191,209-507,080(*) positive figures represent forward sales of currency, negative figures represent forward purchases of currency.

Contracts in place as at July 31, 2013, to hedge projected future financial cash flows.
(amounts in thousands of Euro)

Options

Forward sale
contracts (*)

Forwardpurchase
contracts (*)

July 312013(unaudited)

Currency
Japanese Yen-

28,000-28,000Hong Kong Dollar--(52,455)(52,455)

US Dollar--(47,834)(47,834)

Other-

15,399-15,399Total-

43,399(100,289)(56,890)(*) positive figures represent forward sales of currency, negative figures represent forward purchases of currency.

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Contracts in place as at July 31, 2013, mature by twelve months. This except for some
options expiring after July 31, 2014, whose notional amount was Euro 18.2 million at
the reporting date.
Contracts in place at January 31, 2013, to hedge projected future trade cash flows.
Options

Forward sale
contracts (*)

Forwardpurchase
contracts (*)

January 31
2013(audited)

US Dollar

154,539

7,380(32,472)

129,447

GB Pound

70,5252,684(1,167)72,042

Japanese Yen

52,96032,663(32,436)

53,187

Hong Kong Dollar

109,033

76,114(4,757)

180,390(amounts in thousands of Euro)

Currency

Korean Won-

49,249(577)

48,672Chinese Renminbi-

56,962-56,962

Other

41,23634,185(4,924)70,497

Total

428,293259,237(76,333)

611,197(*) positive figures represent forward sales of currency, negative figures represent forward purchases of currency.

Contracts in place as at January 31, 2013, to hedge projected future financial cash
flows.
(amounts in thousands of Euro)

Options

Forward sale
contracts

Forwardpurchase
contracts

January 31
2013(audited)

Currency
Japanese Yen-

47,356-47,356Other-

15,256-

15,256

Total-

62,612-62,612Contracts in place as at January 31, 2013, had a maturity profile by twelve months.
This was except for forward sale contracts and options expiring after January 31, 2014,
whose notional amount was Euro 15.5 million at January 31, 2013.
All contracts in place at the reporting date were entered into with leading financial
institutions and the Group did not expect them to default.

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Interest rate transactions
The Group enters into Interest Rate Swaps agreements (IRS) in order to hedge the riskof interest rate fluctuations in relation to several bank loans. The key features of the
IRS agreements in place as at July 31, 2013, and January 31, 2013, are summarized
as follows:
Contract

Currency

Notional
amountInterest
rate

Maturity
date

Currency

Hedgedloan –
lending
institution

AmountExpiry(67)

Euro/000IntesaSanpaolo

11,25006/2014

July 312013(unaudited)fair value
I.000

IRS

Euro/000

7,500

1.545%

02/06/2014

IRS

Euro/000

3,000

2.210%

01/07/2015(53)

Euro/000

MPS

3,000

07/2015

IRS

Yen/000

2,000,000

1.875%

31/03/2017(308)

Yen/000

Mizuho2,000,000

03/2017

Contract

Currency

Notional
amountInterest
rate

Maturity
date

January 31
2013(audited)

Currency

Hedgedloan –
lending
institution

AmountExpiryfair value
I.000
IRS

Euro/000

100,000

1.511%

26/07/2013(588)

Euro/000

Pool loan

100,000

07/2013IRS

Euro/000

11,2501.545%

02/06/2014(141)

Euro/000IntesaSanpaolo

11,25006/2014IRS

Euro/000

3,000

2.210%

01/07/2015(77)

Euro/000

MPS

3,000

07/2015

IRS

Yen/000

2,000,000

1.875%

31/03/2017(352)

Yen/000

Mizuho2,000,000

03/2017The IRS agreements convert the variable interest rates applying to a series of loans
into fixed interest rates. These agreements were arranged with leading financial
institutions and the Group did not expect them to default.
Movements in the cash flow hedge reserve included in Group shareholders’ equity,
before the tax effects, since February 1, 2012, were as follows:(amounts in thousands of Euro)
Closing balance at January 31, 2012 (audited)
Change in the translation reserve(5,645)19

Change in fair value, recognized in Equity

24,840Change in fair value, charged to Income Statement

8,690

Closing balance at January 31, 2013 (audited)

27,904

Change in the translation reserve

5

Change in fair value, recognized in Equity(1,272)

Change in fair value, charged to Income Statement(12,827)

Closing balance at July 31, 2013 (unaudited)

13,810Changes in the reserve that are charged to the income statement are recognizedunder Interest and other financial income/(expense), net or as operating income andexpenses depending on the nature of the underlying.
Information on credit risks
Credit risk is defined as the risk that a counterparty in a transaction, by not fulfilling
its obligations, causes a financial loss for another entity. The maximum risk to which
an entity is potentially exposed is represented by all financial assets recorded in thefinancial statements.
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The Group essentially believes that its credit risk mainly regards trade receivables
generated in the wholesale channel and cash and cash equivalents. The Groupmanages the credit risk and reduces its negative effects through its commercial andfinancial strategy, as also explained under the Information on Risk factors included in
the Financial review of this 2013 Interim Financial Report.
Trade receivables
The following table contains a summary, by due date, of total receivables before theallowance for doubtful debts at the reporting date:July 312013(unaudited)

Current

Trade receivables

329,659

Total(amounts in thousands of Euro)

Overdue (days)
1 < 3031 < 60

61 < 90

91 < 120> 120

283,606

17,060

6,635

2,406

4,558

15,394

329,659

283,606

17,060

6,635

2,406

4,558

15,394January 31
2013(audited)

Current

1 < 3031 < 60

61 < 90

91 < 120> 120

Trade receivables

316,072

263,079

27,328

7,708

5,852

1,607

10,498

Total

316,072

263,079

27,328

7,708

5,852

1,607

10,498(amounts in thousands of Euro)

Overdue (days)

The following table contains a summary, by due date, of trade receivables less theallowance for doubtful accounts at the reporting date:(amounts in thousands of Euro)

July 312013(unaudited)

Current

Trade receivables less allowancefor doubtful accounts

317,519

Total

Overdue (days)
1 < 3031 < 60

61 < 90

91 < 120> 120

283,305

17,060

6,635

2,406

4,558

3,555

317,519

283,305

17,060

6,635

2,406

4,558

3,555

(amounts in thousands of Euro)

January 31
2013(audited)

Current

Trade receivables less allowancefor doubtful accounts

304,525

Total

304,525

Overdue (days)
1 < 3031 < 60

61 < 90

91 < 120> 120

262,799

27,141

7,708

5,804

634

439

262,799

27,141

7,708

5,804

634

439

At the reporting date, the expected loss on doubtful receivables was fully coveredby the allowance for doubtful receivables. Movements on the allowance for doubtfulreceivables are shown in Note 7.

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Bank deposit accounts and bank current accounts
Bank deposit accounts are broken down by currency as follows:
July 312013(unaudited)

January 31
2013(audited)Euro

69,000110,300

US Dollar

12,61023,793

Korean Won

27,651

36,003

Hong Kong Dollar

110,595

90,798Other currencies

26,86446,004

Total bank deposit accounts

246,720

306,898(amounts in thousands of Euro)The Group seeks to mitigate the default risk on bank deposit accounts by allocating
available funds to several accounts that differ in terms of currency, country and bankas well. These investments always have a short-term profile.
Bank current accounts
July 312013(unaudited)

January 31
2013(audited)Euro

68,93642,755US Dollar

36,75875,690

Korean Won

2,929

1,994

Hong Kong Dollar

8,043

10,751Other currencies

51,305

109,470

Total bank current accounts

167,971

240,660(amounts in thousands of Euro)The Group maintains that there is no significant risk regarding this kind of liquid asset
as their use is strictly connected with the business operations and corporate processes
and, as result, the number of parties involved is fragmented.
Trade payables
The following table summarizes trade payables by maturity date.
July 312013(unaudited)

Current

Trade payables

402,921

Total(amounts in thousands of Euro)

Overdue (days)
1 < 3031 < 60

61 < 90

91 < 120> 120

375,006

14,835

5,795

996

443

5,846

402,921375,006

14,835

5,795

996

443

5,846

January 31
2013(audited)

Current

Trade payables

330,613

Total

330,613(amounts in thousands of Euro)

Overdue (days)
1 < 3031 < 60

61 < 90

91 < 120> 120

301,940

14,991

3,859

3,119

1,180

5,524

301,940

14,991

3,859

3,119

1,180

5,524

At July 31, 2013, the Group had a total of Euro 392.1 million of available unused credit
facilities (Euro 473.1 million at January 31, 2013).

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10. Receivables from and advance payments to parent company and other relatedparties
Receivables from and advance payments to parent company and other related partiesare detailed below:(amounts in thousands of Euro)

Financial receivables – other related parties

July 312013(unaudited)

January 31
2013(audited)

1,415

1,413

Other receivables – PRADA Holding bv

314

249

Other receivables – other companies controlled by PRADA Holding bv

17

3

Other receivables – other related parties

2,446

2,652

Advance payments – other related companies

13,781

15,176

Total

17,973

19,493

Advance payments included Euro 11 million of advance payments made to Luna
Rossa Challenge NZ ltd and Luna Rossa Challenge srl in accordance with the contracts
signed with subsidiary PRADA sa for sponsorship of the Luna Rossa yacht in relation
to its participation on the XXXIV edition of the America’s Cup. The remaining Euro
2.8 million mainly consisted of advances paid to Progetto Prada Arte srl and Stichting
Fondazione Prada, in accordance with the signed agreements, for cultural initiatives tobe undertaken in the future. Details of receivables from related parties are provided in
Note 36.
11. Other current assets
Other current assets are detailed as follows:
July 312013(unaudited)

January 31
2013(audited)

VAT

27,88025,072

Income tax and other tax receivables

18,913

20,540

Other assets

26,097

16,731

Prepayments and accrued income

49,402

41,266

Deposits

2,332

1,214

983

-

125,607

104,823

July 312013(unaudited)

January 31
2013(audited)Advertising contributions under license agreements

8,363

5,258

Advances to suppliers

3,096

1,478

Incentives for retail investments

1,052

1,318

Advances to employees

1,795

1,392

Other receivables

11,791

7,285

Total

26,097

16,731(amounts in thousands of Euro)

Financial assets held for trading
Total

Other assets
Other assets are detailed as follows:(amounts in thousands of Euro)PRADA Group

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Prepayments and accrued income
Prepayments and accrued income are detailed as follows:
July 312013(unaudited)

January 31
2013(audited)

Rental charges

18,276

17,116

Insurance

2,589

1,472

Design costs

14,701

11,970Fashion shows and advertising campaigns

4,657

4,021

945

1,233

(amounts in thousands of Euro)

Consulting
Amortized costs on loans

1,653

197

Other

6,581

5,257

Total

49,402

41,266

Design costs mainly included costs incurred for the conception and the realization ofcollections that will generate revenue after the reporting date.
Deposits
Deposits mainly included guarantee deposits paid under commercial lease agreements.
12. Property, plant and equipment
Changes in the historical cost of Property, plant and equipment in the period ended
July 31, 2013, and in prior year are as follows:
Land andbuildings

Production
plant andmachinery

Leaseholdimprovements

Furniture& fittings

Othertangibles

AssetsTotal
under historicalconstruction
cost

Balance at January 31, 2012
(audited)

215,587

104,023

641,136

210,796

103,076

82,620 1,357,238

Additions

35,371

8,977

136,368

48,65524,34773,617327,335

Disposals

(3)

(810)

(823)

(1,633)(32,347)(1)(35,617)

Exchange differences(1,346)(214)(37,710)(8,207)(1,225)(5,448)(54,150)

Other movements

3,308

122

37,324

3,544

1,223

(44,583)

938

-

-

(13,458)(2,574)(1,242)(700)(17,974)

Balance at January 31, 2013
(audited)

252,917

112,098

762,837

250,581

93,832

105,505 1,577,770

Additions

109,613

4,049

47,05425,766

24,64465,604

Disposals

(5)

(306)

(185)

(523)

(174)

(24)

(1,217)

Exchange differences(2,062)(151)(3,795)(1,708)

(252)

(817)

(8,785)

Other movements

7,883

48

25,736

6,062

5,634

(45,614)

(251)

-

-

(14,352)(3,755)

(323)

(6)

(18,436)

368,346

115,738

817,295

276,423

123,361(amounts in thousands of Euro)

Impairment

Impairment
Balance at July 31, 2013
(unaudited)

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124,648 1,825,811

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Changes in accumulated depreciation of Property, plant and equipment in the period
ended July 31, 2013, and in prior year are as follows:
Land andbuildings

Production
plant andmachinery

Leaseholdimprovements

Furniture& fittings

Othertangibles

Total accum.
depreciation

Balance at January 31, 2012
(audited)

32,50388,547

336,812

122,41263,094643,368

Depreciation

5,977

7,087

84,272

25,324

6,932

129,592

-

(793)

(115)

(777)

(14,693)(16,378)

Exchange differences

(448)

(191)

(19,463)(4,710)(874)(25,686)

Other movements

(26)

-

(446)

292

-

(180)

Impairment

3,331

-

(11,266)(2,270)(40)(10,245)

Balance at January 31, 2013
(audited)

41,337

94,650389,794140,271

54,419720,471

Depreciation

78,210(amounts in thousands of Euro)

Disposals

3,776

3,778

52,391

14,8233,442

Disposals

(2)

(272)

(133)

(158)

(141)

(706)

Exchange differences

214

(135)

(683)

(900)

(207)

(1,711)Other movements

522

-

(589)

(3)

-

(70)

-

-

(14,022)(3,331)(321)(17,674)

45,84798,021

426,758

150,70257,192778,520

Impairment
Balance at July 31, 2013
(unaudited)

Changes in the net book value of Property, plant and equipment in the period ended
July 31, 2013, and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2012
(audited)

Land andbuildings

Production
plant andmachinery

Leaseholdimprovements

Furniture& fittings

183,084

15,476304,324

88,384

Other Assets under
tangibles construction

39,982

82,620713,870

73,617327,335

Additions

35,371

8,977

136,368

48,65524,347

Depreciation(5,977)(7,087)(84,272)(25,324)(6,932)

Disposals

Total net
book
value

- (129,592)

(3)

(17)

(708)

(856)

(17,654)(1)(19,239)

(898)

(23)

(18,247)(3,497)(351)(5,448)(28,464)

Other movements

3,334

122

37,770

3,252

1,223

(44,583)

1,118

Impairment(3,331)-(2,192)(304)(1,202)(700)(7,729)Balance at January 31, 2013
(audited)

211,580

17,448373,043

110,310

39,413

105,505

857,299

Additions

109,613

4,049

47,05425,766

24,64465,604

276,730

Depreciation(3,776)(3,778)(52,391)(14,823)(3,442)-(78,210)

Exchange differences

(3)

(34)

(52)

(365)

(33)

(24)

(511)

Exchange differences

Disposals(2,276)(16)(3,112)

(808)

(45)

(817)

(7,074)

Other movements

7,361

48

26,325

6,065

5,634

(45,614)

(181)

-

-

(330)

(424)

(2)

(6)

(762)

322,499

17,717

390,537

125,721

66,169Impairment
Balance at July 31, 2013
(unaudited)

124,648 1,047,291

The addition to land and buildings, amounting to Euro 109.6 million, mainly related
to the purchase of two retail real estates in prestigious locations of London and
St. Petersburg.

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The increases in production plant and machinery mainly related to purchases ofequipment for use in the manufacturing processes.
The increases in leasehold improvements, furniture and fixture and assets underconstruction were mostly explained by the Group’s strategy of retail network expansion
and renovation.
Total capital expenditure in the retail channel for the period ended July 31, 2013,
amounted to some Euro 250 million. This included Euro 106 million invested in newly
opened stores (Euro 48 million for stores opened at the reporting date and Euro 58
million for stores opening shortly) while Euro 144 million were invested in existing
stores through refurbishments and relocations, as well as for the purchase of the two
above mentioned locations.
All of the land owned by the Group at July 31, 2013, and January 31, 2013, was freehold
outside Hong Kong.
Land and buildings included capitalized interest charges as follows:(amounts in thousands of Euro)Land and buildings

Opening net
book value

Increases

Exchangedifferences

Amortization

Closing net
book value

7,116

20

-175

115

6,846

13. Intangible assets
Changes in the historical amount of Intangible assets in the period ended July 31,
2013, and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2012
(audited)
Change in scope of
consolidation

Goodwill

Store Lease
Acquisitions

SoftwareDevelopment
costs

Assets inprogressTotal
historicalcost

392,598

534,003

123,139

66,20645,581

1,476

1,163,003--

15,694---

15,694

Additions286-

17,476

1,909

9

7,740

27,420

Disposals

-

-

-

(84)

-

-

(84)

(1,995)

(712)

(864)

(314)

-

(57)

(3,942)Other movements

-

-

-

576

86

(819)

(157)

Impairment

-

-

-

27

(96)

(110)

(179)

390,889533,291

155,445

68,32045,5808,230

1,201,755

-

-

-

-

-

-

-

Additions

175

-

5,411

571

-

10,14416,301

Disposals

-

-

-

-

-

-

-

(1,437)

(513)

(9)

(58)

-

(552)

(2,569)Other movements

-

-

3,765

1,736

-

(5,517)(16)

Impairment

-

-

(693)

(268)

(7)

(48)

(1,016)389,627

532,778

163,919

70,30145,573

12,2571,214,455

Exchange differences

Balance at January 31, 2013
(audited)
Change in scope of
consolidation

Exchange differences

Balance at July 31, 2013
(unaudited)

56

Trademarks

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Changes in the accumulated amortization of Intangible assets in the period ended July
31, 2013, and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2012
(audited)

Trademarks

Goodwill

Store Lease
Acquisitions

SoftwareDevelopment
costs

Total
accumulated
amortization

89,29029,78380,46557,62842,311

299,477

-

-

-

-

-

-

11,137

-

9,471

2,963

1,677

25,248Change in scope of
consolidation
Amortization
Disposals

-

-

-

(3)

-

(3)

(643)

(479)

(364)

(288)

-

(1,774)

Other movements

-

-

110

5

-

115

Impairment

-

-

-

27

(85)

(58)

99,78429,304

89,68260,332

43,903

323,005

-

-

-

-

-

-

5,488

-

5,973

1,699

455

13,615

-

-

-

-

-

-

(440)

(345)

10

(33)

-

(808)

Other movements

-

-

55

-

-

55

Impairment

-

-

(693)

(189)

(7)

(889)

104,832

28,95995,02761,80944,351

334,978

Exchange differences

Balance at January 31, 2013
(audited)
Change in scope of
consolidation
Amortization
Disposals
Exchange differences

Balance at July 31, 2013
(unaudited)

Changes in the net book value of Intangible assets in the period ended July 31, 2013,
and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2012
(audited)
Change in scope of
consolidation
Additions
Amortization
Disposals

Trademarks

Goodwill

Store Lease
Acquisitions

SoftwareDevelopment
costs

Assets in
Total netprogress book value

303,308504,220

42,674

8,578

3,270

1,476

863,526--

15,694---

15,694286-

17,476

1,909

9

7,740

27,420(11,137)-(9,471)(2,963)(1,677)-(25,248)

-

-

-

(81)

-

-

(81)

(1,352)

(233)

(500)

(26)

-

(57)

(2,168)Other movements

-

-

(110)

571

86

(819)

(272)

Impairment

-

-

-

-

(11)

(110)

(121)

291,105

503,987

65,763

7,988

1,677

8,230

878,750

-

-

-

-

-

-

-

175

-

5,411

571

-

10,14416,301(5,488)-(5,973)(1,699)(455)-(13,615)

Exchange differences

Balance at January 31, 2013
(audited)
Change in scope of
consolidation
Additions
Amortization
Disposals

-

-

-

-

-

-

-

(997)

(168)

(19)

(25)

-

(552)

(1,761)Other movements

-

-

3,710

1,736

-

(5,517)(71)

Impairment

-

-

-

(79)

-

(48)

(127)

284,795

503,819

68,892

8,492

1,222

12,257879,477

Exchange differences

Balance at July 31, 2013
(unaudited)

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The net book value of Trademarks at July 31, 2013, and January 31, 2013, was broken
down as follows:
July 312013(unaudited)

January 31
2013(audited)

Miu Miu

168,197

170,961

Church’s

100,165

103,087

Luna Rossa

5,640

6,132

Car Shoe

5,661

5,770

Prada

4,231

4,311

Other

901

844

Total

284,795

291,105(amounts in thousands of Euro)No impairment losses were recorded in relation to the Group’s trademarks for the six
months ended July 31, 2013. Other included trademark registration expenses.
The additions in store lease acquisitions and in most of those of assets underconstruction referred to key-money paid to enter into lease agreements to develop theretail business across Europe and in South America.
The following table contains a summary of total additions to Property, plant andequipment and Intangible assets for each business area.
July 312013(unaudited)

January 31
2013(audited)

Retail

250,224265,356

Production and logistics

11,90642,767

Corporate

30,901

46,632

Total

293,031354,755(amounts in thousands of Euro)

Impairment test
As at July 31, 2013, Goodwill amounted to Euro 503.8 million, detailed by Cash
Generating Unit (CGU) as follows:(amounts in thousands of Euro)

July 312013(unaudited)

January 31
2013(audited)

Italy Wholesale

78,35578,355Asia Pacific and Japan Retail311,936

311,936

Italy Retail25,85025,850Germany and Austria Retail

5,064

5,064

United Kingdom Retail

9,300

9,300

Spain Retail

1,400

1,400

France and Monte Carlo Retail

11,70011,700

North America Retail and Wholesale

48,00048,000

Production division

3,492

3,492

Church’s

8,722

8,890

Total

503,819

503,987

The Group does not recognize other intangible assets with an indefinite useful life
other than goodwill. IAS36 requires an entity to test goodwill for impairment and totest whether there is any indication that an asset may be impaired at least once a year

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by comparing carrying amounts with recoverable amounts. Accordingly, at January
31, 2013, the Group performed the impairment tests on Goodwill, but also on the Car
Shoe trademark.
The method used to identify the recoverable value (value in use) was based on the
Discounted expected free Cash-Flow (hereafter “DCF”) generated by the assets
directly attributable to the business to which the goodwill or the trademark subject toimpairment have been allocated (Cash Generating Unit). Value in use is calculated as
the sum of the present value of future free cash-flows expected from the business plan
projections prepared for each CGU and the present value of the operating activities ofthe sector at the end of the business plan period (terminal value).
None of the impairment tests performed as at January 31, 2013, identified any
impairment losses for the Group CGUs and other intangible assets for which the Grouphighlighted indicators of impairment.
No evidence emerged during the period under review to suggest any indication of
impairment. However, as value in use is measured based on estimates, the Group
cannot guarantee that the value of goodwill or other intangible assets will not be
impaired in future.
14. Investments(amounts in thousands of Euro)

July 312013(unaudited)

January 31
2013(audited)

Investment in associated undertaking

1,739

1,739

Investment available for sale

14,91821,27015

15

16,672

23,024

Other investments
Total

Investment in associated undertaking regarded a 49% interest in Pac srl, an unlisted
Italian company under a liquidation procedure at the reporting period that has beenmeasured under the equity method.
Investment available for sale regarded the 4.88% stake in the issued share capital of
Sitoy Group Holdings ltd, a company listed on the Hong Kong Stock exchange (HK:1023) that operates on the Asian market in the production of leather bags and otherproducts. In accordance with IAS 39, the investment was initially recognized at costand subsequently restated at fair value in line with the official quoted share price on the
Hong Kong Stock exchange as at July 31, 2013 (Level I of the fair value hierarchy per
IFRS 7). The fair value adjustment for the six months ended July 31, 2013, amounted
to negative Euro 6.4 million and was recognized in a specific equity reserve, net ofthe relevant taxation effect. On May 9, 2013, the Group collected from Sitoy Group
Holdings a net of HKD 2.9 million (Euro 0.3 million) as dividend income.

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15. Other non-current assets
Other non-current assets are detailed as follows:
July 312013(unaudited)

January 31
2013(audited)

Guarantee deposits

56,93250,898Deferred rental income

5,337

2,410

Other receivables

9,759

8,374

Total

72,02861,682(amounts in thousands of Euro)

Other receivables included Euro 4.1 million representing the actuarial valuation of theGroup’s pension plans in the United Kingdom, as described in Note 23.
Guarantee deposits are analyzed below by nature and maturity:
July 312013(unaudited)

January 31
2013(audited)

Stores54,58948,719

Offices

1,504

1,563

Warehouses

162

161

Other

677

455

Total

56,93250,898(amounts in thousands of Euro)Nature:July 312013(unaudited)(amounts in thousands of Euro)
Maturity:
By July 31, 2015

17,208

By July 31, 2016

3,924

By July 31, 2017

2,524

By July 31, 2018

4,547

After July 31, 2018

28,729Total

56,932

16. Short-term financial payables and bank overdrafts(amounts in thousands of Euro)Bank overdrafts and commercial lines of credit

July 312013(unaudited)

January 31
2013(audited)

13

24

Short-term bank loans

118,463

16,218Current portion of long term loans

41,556

159,867

(564)

(539)

159,468

175,570

Deferred costs on loans
Total

The decrease of Euro 118.3 million in the caption Current portion of long-term loans
was mainly due to the repayment of the Pool loan borrowed by PRADA spa, for a total
amount equal to Euro 100 million, and to that of PRADA Japan co ltd, for an amountequal to Euro 21.5 million, as well as to the repayment of the loan borrowed by PRADA
Japan co ltd from Mizuho bank. The decrease was partially offset by the reclassificationof the current portion of some long-term loans.
60

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The increase in the caption Short-term bank loans of Euro 102.2 million mainly related to
the new revolving credit facility for a total amount of Euro 170 million signed by PRADA
spa on May 6, 2013 (at reporting date it was partially drawn for an amount equal to Euro
100 million); the lending banks were: Barclays, BNP Paribas, Credit Agricole CIB, JP
Morgan Chase, Mizuho, Banco do Brasil. The facility expires in May 2016. The facility
is subject to interest rate at Euribor for the period plus an initial margin of 100 basis
points, variable in relation to the ratio between consolidated total net borrowings andconsolidated EBITDA. The credit line is subject to compliance with certain covenants
based on the Consolidated financial statements of the Group. Specifically, the ratio ofconsolidated total net borrowings and consolidated EBITDA cannot exceed 3.0 at bothyear end and six–months reporting date, while the ratio of consolidated EBITDA toconsolidated net financial interest must be greater than 4.
Short-term bank loans and the current portion of long-term borrowings by currency are
analyzed as follows:
July 312013(unaudited)

January 31
2013(audited)Euro118,726

118,722

Japanese Yen

27,68444,528Chinese Renminbi

12,183

11,951Other currencies

1,426

884

160,019

176,085(amounts in thousands of Euro)

Total

The Group generally borrows at variable rates of interest and manages the risk ofinterest rate fluctuation by entering into hedging agreements as described in Note 9.
Considering hedges in place at the reporting date, some 36% of the current portion of
medium/long-term loans consisted of fixed rate loans (70% at January 31, 2013) withvariable rate loans making up the remaining 64% (30% at January 31, 2013).
Bank borrowings are stated net of amortized costs incurred to arrange the loans. At
July 31, 2013, amortized costs were deducted from long-term loans for Euro 1.1 million
and from short-term loans for Euro 0.6 million.
17. Payables to parent companies and related parties
Payables to parent company and other related parties are detailed as follows:(amounts in thousands of Euro)

Other payables – PRADA Holding bv
Other payables – other companies controlled by PRADA Holding bv
Financial payables – other related parties
Other payables – other related parties
Total

July 312013(unaudited)

January 31
2013(audited)

118

120

-

3

4,205

5,018

695

458

5,018

5,599

Financial payables towards other related parties, totaling Euro 4.2 million at July
31, 2013, included an interest-free loan contributed by Al Tayer Insigna llc, theNon-controlling shareholder of PRADA Middle East fzco, according to its stake in the
PRADA Group’s subsidiary. The loan was partially repaid during the period. Details of
payables from related parties are provided in Note 36.

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18. Trade payables
Trade payables are summarized as follows:
July 312013(unaudited)

January 31
2013(audited)

Trade payables – third parties

390,078

323,894

Trade payables – related parties

12,843

6,719

Total

402,921330,613(amounts in thousands of Euro)

The increase in Trade payables was due to the growth of the business in general.
Details of trade payables to related parties are provided in Note 36.
19. Tax payables
Current tax payables are summarized as follows:
July 312013(unaudited)

January 31
2013(audited)

Current income taxes

78,84368,505

VAT and other taxes

26,38628,643

Total

105,229

97,148(amounts in thousands of Euro)

20. Obligations under finance leases
At July 31, 2013, Obligations under finance leases included short-term payables ofEuro 0.2 million and long-term payables of Euro 0.4 million. They mainly related toleases of properties situated in Italy. The Group's obligations under finance leases are
secured by the lessor's charge over the leased assets. Further information is provided
in Note 37.
21. Other current liabilities
Other current liabilities are analyzed as follows:(amounts in thousands of Euro)

July 312013(unaudited)

January 31
2013(audited)

Payables for capital expenditure

53,16957,969Accrued expenses and deferred income

10,748

9,810

Other payables

68,23663,866

Total

132,153

131,645

July 312013(unaudited)

January 31
2013(audited)

Short term benefits for employees and other personnel

51,62752,018Customer advances

7,687

3,340

Returns from customers

7,651

7,364

Other

1,271

1,144

Total

68,23663,866

Other payables are detailed below:(amounts in thousands of Euro)62

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22. Long-term financial payables
Long-term financial payables are as follows:
July 312013(unaudited)

January 31
2013(audited)Long-term loans

82,24878,945

Deferred costs on loans(1,124)

(115)

Total

81,12478,830(amounts in thousands of Euro)

The increase was mainly due by new long-term loans arranged during the six
month ended July 31, 2013, in currencies other than Euro to fund retail businessexpansion. This increase was partially offset by the reclassification to short-termof the current portions of most of the long-term loans existing at January 31, 2013.
The Group generally borrows at variable rates of interest and manages the risk ofinterest rate fluctuation by entering into hedging agreements as described in Note 9.
At the reporting date, some 15% of long-term loans consisted of fixed rate loans (7%at January 31, 2013) with variable rate loans making up the remaining 85% (93% at
January 31, 2013).
Details of long-term borrowing at July 31, 2013, are provided below.
amount inthousands of Euro

Borrower

Loan currency Lender

Expirydate

Interest rate
(1)

PRADA spa

1,200

Euro

Monte dei Paschi di Siena

07/2015

3.310%PRADA spa

7,779

Euro

Cariparma

08/2015

1,319%PRADA Japan co ltd

11,538Yen

Mizuho Bank

03/2017

1,875%PRADA Japan co ltd

6,155

Yen

Sumitomo Mitsui Trust

08/20160.749%PRADA Japan co ltd

10,769Yen

Syndicate Loan

01/2018

1,128%PRADA Japan co ltd

14,769Yen

Syndicate Loan

07/2018

1,130%PRADA Middle East fzco

12,114US Dollar

ENBD

09/2016

3,811%PRADA Fashion Commerce(Shanghai) co limited

13,827

Renmimbi

Mizuho Bank

11/2015

6,150%PRADA Fashion Commerce(Shanghai) co limited

4,097

Renmimbi

Intesa SanPaolo

06/2015

6,027%

Total

82,248(1) the interest rates include the effect of interest rate risk hedging transactions

Details of long-term borrowing at January 31, 2013, are provided below.
amount inthousands of Euro

Borrower

Loan currency Lender

Expirydate

Interest rate
(1)

PRADA spa

1,800

Euro

Monte dei Paschi di Siena

07/2015

3.310%PRADA spa

3,750

Euro

IntesaSanPaolo

06/20142.145%PRADA spa

2,400

Euro

Unicredit

05/20140.953%PRADA spa

10,338Euro

Cariparma

08/2015

1.575%PRADA Middle East FZCO

15,433

US Dollar

ENBD

09/2016

3.811%PRADA Japan co ltd

7,298

Japanese Yen

Sumitomo Mitsui Trust

08/20160.810%PRADA Japan co ltd

14,191

Japanese Yen

Mizuho Bank

03/20171.055%PRADA Fashion Commerce(Shanghai) co limited

17,801Renminbi

Mizuho Bank

11/2015

6.150%PRADA Fashion Commerce(Shanghai) co limited

5,934

Renminbi

Intesa SanPaolo

06/2015

6.027%

Total

78,945(1) the interest rates include the effect of interest rate risk hedging transactions

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On March 29, 2013, the subsidiary PRADA Japan co ltd entered into a syndicate loan
agreement with a pool of Japanese banks for a total amount of JPY 9 billion, out of
which a five years term-loan of JPY 2.4 billion to be repaid in 10 semi-annual equal
installments starting from January 2014, a five years term-loan of JPY 3.6 billion to
be repaid in 5 installments for JPY 300 million starting from July 2015 and a final
istallment for JPY 2.1 billion on the termination date and a working capital loan of JPY
3 billion due by July 2014. At July 31, 2013, the total amount drawn was equal to Euro
47.7 million, reported for Euro 22.2 million under bank overdrafts and short-term loans
and for Euro 25.5 million under long-term bank debt.
On July 11, 2013, the subsidiary Church & Co Limited signed a five years term-loan
facility agreement with HSBC for a total amount of British Pound 3 million. The termloan is subject to interest at Libor plus a spread of 1.5%. It has to be repaid in 6 equalsemi-annual installments starting 2 years after the date of the first drawdown. The
availability period ends on April 2014. At the reporting date the loan was undrawn.
The long-term loan granted by Banca Monte dei Paschi di Siena to PRADA spa in
2008, that was outstanding at July 31, 2013, for an amount of Euro 1.2 million underlong-term and for Euro 1.2 million under short-term, was secured by a mortgage on
a building in Tuscany that houses offices and research and development workshops.
The long-term loan granted by Cassa di Risparmio Parma e Piacenza to PRADA spa
in 2008 – outstanding amount of Euro 7.8 million reported at July 31, 2013 (including
current portion of Euro 5.1 million) - was secured by a mortgage on a building in Tuscany
where the Group has concentrated the logistics activities of the footwear and leather
goods divisions.
On July 29, 2013, PRADA spa issued Euro 130 million 2.75 per cent Notes due on
August 1, 2018. The Notes were issued to professional and institutional investors andthe settlement occurred on August 1, 2013. The Irish Stock Exchange admitted theNotes to the official list and trading on its regulated market. PRADA spa may, at its
option, redeem all, but not some only, of the Notes on August 1, 2013, or at any time
thereafter (Optional Redemption Date) at an amount equal to their principal amountplus (if applicable) a premium, together with any accrued interest or at par plus accrued
interest, in the event of certain tax changes. The Notes are not rated. Save as disclosed
above, neither the Company nor any of its subsidiaries issued any debt securities atthe end of the current period or in the previous year.
All bank borrowings are analyzed by security profile as follows:(amounts in thousands of Euro)64

July 312013(unaudited)

January 31
2013(audited)

Secured

15,28018,396

Unsecured

227,000

236,658

Total

242,280

255,054

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23. Long-term employee benefits
July 312013(unaudited)

January 31
2013(audited)

Post-employment benefits

38,211

38,665

Other long term employee benefits

19,677

6,873

Total liabilities for long term benefits

57,88845,538Post-employment benefit (pension plan surplus)(4,072)(4,150)Net liabilities for long term benefits

53,816

41,388(amounts in thousands of Euro)

Post-employment benefits
Liabilities and assets for post-employment benefits reported at July 31, 2013, totaled
a net of Euro 34.1 million (Euro 34.5 million at January 31, 2013) and all of them werequalified as defined benefit plans according to IAS19. The pension plan surplus relating
to Group companies operating in the United Kingdom is included in Other non-current
assets, Note 15.
The balance included Euro 23.5 million of liabilities recorded in the financial statementsof Italian companies and Euro 10.6 million reported by non-Italian companies. The
Italian liabilities for post-employment benefits regarded the “Trattamento di Fine
Rapporto” (hereinafter “TFR”, i.e. staff leaving indemnity) and the balance - whichreflected fair value - was determined projecting the benefit, accruing under Italian law
at the reporting date, to the future date when the employment relationship will beterminated and discounting it at the reporting date using the actuarial “Projected Unit
Credit Method (PUCM)”.
The following table shows movements on net liabilities for post-employment benefits
for the period ended July 31, 2013.

Balance at January 31, 2013 (audited)

Post-employment benefits
Italian companies (TFR)

Post-employment benefits
non-Italian companies

Group
Total

23,794

10,721

34,515
1,470

Current service cost

83

1,387

Interest cost/(revenue)

56

31

87

Actuarial (gains)/losses

385

-

385

Benefits paid

(774)

(866)

(1,640)

-

(679)

(679)

23,544

10,594

34,138Exchange differences
Balance at July 31, 2013 (unaudited)

The current service cost and the interest cost/(revenue) were recognized throughincome statement.
The TFR liability was determined based on an independent appraisal by Federica
Zappari, an Italian registered actuary (no 1134) of Ordine Nazionale degli Attuari. The
technical part of the computation was based on an historical analysis of the data.
For the demographic assumptions, variables such as mortality, early retirement andresignation, dismissal, expiry of employment contract, advance payment on leaving
indemnities and supplementary pension schemes were considered. Economic andfinancial assumptions were made based on variables such as inflation and discountrates.

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Post-employment benefits of non-Italian companies were stated net of the surplus
on pension plans relating to Group companies operating in the United Kingdom which
provide pension services for their employees. As at July 31, 2013, these pension plans
had a positive fair value of Euro 4.1 million and the valuation was not updated since
January 2013. The Directors believed that no significant changes incurred in their fairvalue during the six months ended July 31, 2013.
Other long-term employee benefits
Other long-term employee benefits were qualified into the IAS 19 category “Other
long-term employee benefits” and related to long-term retention and performances
plan recognized to Group employee. As at July 31, 2013, their actuarial valuation,
obtained using the Projected Unit Cost Method, was Euro 19.7 million (Euro 6.9 million
as at January 31, 2013), as determined based on the appraisal of the independentactuary Federica Zappari.
24. Provisions for risks and charges
Movements on provisions for risks and charges are summarized as follows:(amounts in thousands of Euro)

Balance at January 31, 2013 (audited)

Provision
for litigation

Provision fortax disputes

Other
provisions

Total

1,775

27,467

17,672

46,914(524)

Exchange differences

7

(259)

(272)

Reversals

(8)

-

-

(8)

Uses

(22)

(118)

(317)

(457)

Increases

29

188

1,608

1,825

1,781

27,27818,69147,750

Balance at July 31, 2013 (unaudited)

Provisions represented the Directors’ best estimate of maximum contingent liabilities.
In the Directors’ opinion, and based on the information available to them as supportedby the opinions of independent experts at the reporting date, the total amountprovided for risks and charges was reasonable considering the contingent liabilities
that might arise. During the six months ended July 31, 2013, there were neither
significant development regarding the outstanding litigations at January 31, 2013, nor
new controversy occurred during the period so as to considerably adjust the estimates
made to account for Provisions for risks and charges at January 31, 2013.
Provision for litigation
The provision for litigation amounted to Euro 1.8 million at July 31, 2013, and mainly
regarded disputes with suppliers, former employees of the Group and government
authority on social contribution.
Other provisions for risks
Other provisions for risks amounted to Euro 18.7 million as at July 31, 2013, andrelated to onerous lease agreements and to obligations to reinstate premises underlease agreements in their original state.
25. Other non-current liabilities
Other non-current liabilities amounted to Euro 89.1 million (Euro 84.9 million as atJanuary 31, 2013). They regarded liabilities to be recognized on a straight-line basis inrelation to commercial lease costs. The increase was due to the expansion of the retail
network.

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26. Shareholders’ equity - GroupThe Group’s shareholders’ equity is as follows:
July 312013(unaudited)

January 31
2013(audited)

Share Capital

255,882

255,882

Share premium reserve

410,047410,047

Other reserves

1,446,923

1,051,536

Actuarial reserve(6,778)(6,470)Fair value reserve

722

5,486

9,923

20,148Translation reserve(36,862)(42,288)

Net income for the period

308,239625,6812,388,096

2,320,022(amounts in thousands of Euro)

Cash flow hedge reserve

Total

Share capital
At July 31, 2013, some 80% of the share capital of PRADA spa was held by PRADA
Holding bv while the remainder was floating on the Main Board of the Hong Kong
Stock exchange.
Translation reserve
The change in the Translation in the six months ended July 31, 2013, resulted from theappreciation of net assets denominated in currencies other than Euro.
Other reserves
At July 31, 2013, other reserves amounted to Euro 1,446.9 million and mainly consistedof prior years retained earnings.
Net income for the year
The Group’s net income for the year amounted to Euro 308.2 million (Euro 625.7 million
for the twelve months ended January 31, 2013).
Capital gain tax in Italy
Capital gains realized on disposals of shares in the Company’s shares may be subject
to tax in Italy. Further details of Italian capital gains taxation have already been provided
in the Tax Booklet available on the Company’s website at www.pradagroup.com.

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27. Shareholders’ equity – Non-controlling interests
The following table shows movements on the Shareholders’ equity of Non-controlling
Interests during the years ended July 31, 2013, and January 31, 2013.
(amounts in thousands of Euro)

Opening balance
Translation differences

July 312013(unaudited)

January 31
2013(audited)

10,470

8,224

28

(940)

Dividends(1,881)(5,576)

Net income for the period

4,580

7,596

10

1,166

13,207

10,470Capital injection in subsidiaries
Closing balance

Dividends recognized in the six months ended July 31, 2013, and totaling Euro 1.9
million, were distributed by the subsidiaries TRS Hong Kong ltd and Artisans Shoes
srl. The capital injection into subsidiaries related to Pellettieri d’Italia srl, a company
incorporated in the period, and was made by Non-controlling shareholders in proportion
to the number of share held by them.

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Consolidated income statement
28. Net revenues
Consolidated net revenues were mainly generated by sales of products and werestated net of returns and discounts.
six months
ended July 31
2013(unaudited)

six months
ended July 31
2012(unaudited)

Net sales

1,707,584

1,524,687

Royalties

20,481

22,686

1,728,065

1,547,373(amounts in thousands of Euro)

Total

A breakdown of net revenues by brand, distribution channel, geographical area andproduct is provided in the Financial review.
In the six months ended July 31, 2013, the contribution of the licensed products
business was equal to Euro 20.5 million, down by 9.7% compared to Euro 22.7
million posted in the same period of 2012. The results of the first half of 2012were boosted for some Euro 4.6 million by the income following the launch of the
PRADA phone by LG 3.0 that finished contributing royalties by the end of last year.
29. Cost of goods soldCost of goods sold is analyzed as follows:
six months
ended July 31
2013(unaudited)

six months
ended July 31
2012(unaudited)

Purchases of raw materials and production costs

426,385

360,694

Logistics costs, duties and insurance

90,78076,156

Change in inventories(56,758)

4,022

Total

460,407440,872(amounts in thousands of Euro)

Cost of goods sold increased from Euro 440.9 million in the six months ended July 31,
2012, to Euro 460.4 million in the current period. Meanwhile, as a percentage on net
revenues, it decreased from 28.5% to 26.6% mainly because of a more favorable mixof net sales in terms of channel, product and geographical area.
30. Operating costs
Operating costs are analyzed as follows:(amounts in thousands of Euro)six months
ended July 31
2013(unaudited)% of netrevenues

six months
ended July 31
2012(unaudited)% of netrevenues

Product design and development costs

66,405

3.8%

56,226

3.6%

Advertising and communications costs

82,053

4.7%

68,295

4.4%

Selling costs

563,95432.6%

488,920

31.6%

General and administrative costs

96,908

5.6%

98,178

6.3%

Total

809,32046.8%

711,619

46.0%

Operating costs went from Euro 711.6 million in the six months ended July 31, 2012,PRADA Group

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to Euro 809.3 million in the current period. The incidence on net revenues was slightly
higher at 46.8% from 46%.
Product design and development expenses raised mainly because of higher labor costs
following the introduction of new retention plans in favor of key resources operatingin this corporate area.
Advertising and communications costs increased from Euro 68.3 million in the six
months ended July 31, 2012, to Euro 82.1 million in the current period. The sponsorshipof the Luna Rossa yacht challenging the XXXIV edition of the America’s Cup raised
significantly the spending in the current period.
Selling costs increased from Euro 488.9 million in the six months ended July 31, 2012,or 31.6% on net revenues, to Euro 564.0 million in the current period, or 32.6% on
net revenues. The DOS expansions program undertaken in the last years involved thegrowth of the most important expenses typical of the selling area, namely rent, laborand depreciation and amortization.
General and administrative expenses remained almost unchanged in absolute terms
essentially thanks to economies of scale, as most of the costs of this area are fixed.
In fact, they decreased from Euro 98.2 million in the six months ended July 31, 2012,
or 6.3% on net revenues, to Euro 96.9 million in the current period, or 5.6% on net
revenues.
Operating expenses included depreciation, amortization and impairment adjustments
for both property, plant and equipment and intangible assets, for a total amount of Euro87.2 million (Euro 69.8 million in 2012), labor costs for a total amount of Euro 237.8
million (Euro 213.7 million in 2012), fixed rent for a total amount of Euro 112.1 million(Euro 98.5 million in 2012) and variable rent for a total amount of Euro 143.2 million(Euro 119.9 million in 2012).
31. Interest and other financial income/(expenses), net
Interest and other financial income/(expenses), net are analyzed as follows:
six months
ended July 31
2013(unaudited)

six months
ended July 31
2012(unaudited)

Interests expenses on borrowings(4,527)(6,184)

Interest income

2,035

2,557

Exchange gains / (losses) – realized(4,148)

8,203

Exchange gains/ (losses) – unrealized(6,248)(5,074)

Other financial income / (expenses)(2,306)(2,413)

Total(15,194)(2,911)(amounts in thousands of Euro)Interest and other financial income/(expenses), net increased by Euro 12.3 million
compared to first half of 2012, resulting in a total of Euro 15.2 million for the six months
ended July 31, 2013.
Interest expenses on borrowings decreased essentially because of a reduction in bankborrowings.
The negative impact on exchange gains/(losses) in the six months ended July 31,
2013, essentially resulted from the decrease in the fair value of the derivative financial
instruments and from losses on the revaluation of monetary assets in currencies otherthan Euro.

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32. Income taxes
Income taxes are analyzed as follows:
six months
ended July 31
2013(unaudited)(amounts in thousands of Euro)six months
ended July 31
2012(unaudited)

Taxation

143,557

119,942

Deferred taxation(12,948)(17,186)

Income taxes

130,609102,756

The charge for income taxes raised from Euro 102.8 million in the six months ended
July 31, 2012, or 26.2% as a percentage on result before taxation, to Euro 130.6
million in the current period, or 29.4% as a percentage on result before taxation. The
higher incidence rate mainly resulted from a change in the geographical mix of taxable
incomes.
Movements in deferred tax assets and liabilities, net are shown in the following table:
July 312013(unaudited)

January 31
2013(audited)

120,421

128,071

Exchange differences(633)(7,910)

Deferred taxes on derivative instruments recorded in equity (cash flow hedges)

3,873(9,209)77

1,091(amounts in thousands of Euro)

Opening balance

Deferred taxes on post-employment benefits recorded in equity (reserve for actuarial
differences)
Other movements

53

104

Deferred taxes for the period in income statement

12,948

8,274

Closing balance

136,739

120,421

The following table shows deferred tax assets and liabilities classified by nature:(amounts in thousands of Euro)Inventories

July 31, 2013
(unaudited)
Deferred tax
assetsJanuary 31, 2013
(audited)Deferred tax
liabilities

Deferred tax
assetsDeferred tax
liabilities

85,898

3

78,572-

Receivables and other assets

361

1,551

452

1,551

Useful life of non-current assets

48,12913,86050,563

15,447-22,416-25,112

Provision for risks / accrued expenses

27,018842

26,4542,257

Non deductible / taxable charges / income

5,642

681

4,964

1,515

Tax loss carry-forwards

7,363

-

7,611

-

Derivative financial instruments

89

3,814

89

7,702

Long term employee benefits

Deferred taxes due to acquisitions

6,820

1,137

6,796

1,312

Other

924

1,201

555

740

Total

182,244

45,505

176,057

55,636PRADA Group

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33. Earnings and Dividends per share
Earnings per share
Earnings per share were calculated by dividing the net income attributable toshareholders by the weighted average number of ordinary shares in issue.
six months
ended July 31
2013(unaudited)Group net income in Euro
Weighted average number of ordinary shares in issue
Earnings per share in Euro, calculated on weighted average numberof ordinary shares

six months
ended July 31
2012(unaudited)308,238,604

286,408,505

2,558,824,000

2,558,824,000

0.120

0.112

Dividends per share
During the period ended July 31, 2013, the Company distributed dividends for Euro
230,294,160, as approved by the Annual General Meeting held on May 23, 2013, toapprove the financial statements for the year ended January 31, 2013. The payment
was arranged on June 2013, net of the Italian withholding tax payable (Euro 9.2 million),as arising from the application to the whole amount of dividends payable to beneficial
owners of the Company shares held through the Hong Kong Central Clearing and
Settlement System of the Italian ordinary withholding tax rate for dividends paid to
non-Italian residents.
During the period ended January 31, 2013, the Company distributed dividends of Euro
127,941,200, as approved by the Annual General Meeting held on May 22, 2012, toapprove the financial statements for the year ended January 31, 2012. The paymentof the dividends and the related Italian withholding tax payable, arising from theapplication 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 January 31, 2013.
34. Additional information
The average headcount by functional area for the periods ended July 31, 2013, andJuly 31, 2012, was as follows:(no of employees)

Production

six months
ended July 31
2012(unaudited)

1,852

1,736

Product design and development

890

849

Advertising and Communications

112

109

6,637

5,612

873

795

10,364

9,101

Selling
General and administrative services
Total

72

six months
ended July 31
2013(unaudited)

PRADA Group

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Employee remuneration
Employee remuneration by functional area for the periods ended July 31, 2013, andJuly 31, 2012, is analyzed below:
six months
ended July 31
2013(unaudited)

six months
ended July 31
2012(unaudited)

Production

45,38541,412

Product design and development

30,18728,513Advertising and Communications

5,977

5,530

Selling161,641

140,536

General and administrative services

40,02939,150

Total

283,219

255,141(amounts in thousands of Euro)

Employee remuneration by nature for the periods ended July 31, 2013, and July 31,
2012, is analyzed below:
six months
ended July 31
2013(unaudited)

six months
ended July 31
2012(unaudited)

Wages and salaries

212,662

192,454

Post-employment benefits

13,117

10,960Social security

47,24442,735

Other

10,196

8,992

Total

283,219

255,141(amounts in thousands of Euro)Distributable reserves of parent company PRADA spa(amounts in thousands of Euro)

Amount at
July 31, 2013
(unaudited)

Possibleutilization

Distributableamount410,047

Share Capital

255,882

Share premium reserve

410,047

A,B,C

Legal reserve

51,176B

Other reserves

182,899

A,B,C

182,899

Non distributable reserves Art. 7of Legislative Decree 38/2005

20,516

Retained earnings

221,842

A,B,C

221,842Fair Value Reserve

10,056

Distributable Amount

Summary of utilization in last
three years and current period
Coverage oflossesDistribution ofdividends

504,235(*)

814,788(*) dividends distributed include also the dividends paid during the six months ended July 31, 2013 on the financial statements
ended January 31, 2013.
A share capital increase
B coverage of losses
C distributable to shareholders

Pursuant to Article 2431 of the Italian Civil Code, the share premium reserve is fully
distributable only when the legal reserve reaches an amount equal to 20% of sharecapital. As at July 31, 2013, no adjustment is required to reach this amount.

PRADA Group

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Exchange rates
The exchange rates against the Euro used to consolidate statements of financial
position and income statements prepared in other currencies as at July 31, 2013,
January 31, 2013 and July 31, 2012, are shown below.
Average rate
for the six
monthsended July 31,
2013

Currency

Average rate
for the six
monthsended July 31,
2012

Closing rate

Opening rate

US Dollar

1.310

1.287

1.328

1.355

Canadian Dollar

1.342

1.294

1.367

1.358

GB Pound

0.856

0.815

0.874

0.857

Swiss Franc

1.231

1.203

1.232

1.234

1.323

1.248

1.473

1.301

Korean Won

Australian Dollar

1,460.408

1,469.141

1,489.980

1,472.100

Japanese Yen

127.466

102.994130.000

123.320Hong Kong Dollar

10.1679.986

10.29510.511

Singapore Dollar

1.638

1.623

1.690

1.677

Thai Baht

39.32740.07741.53740.420

Taiwan Dollar

39.05838.14639.78140.066

Russian Ruble

41.20039.60843.75940.777

Czech Koruna

25.76225.15425.85725.619Macau Pataca

10.472

10.28510.60310.826Chinese Renminbi

8.091

8.141

8.136

8.427

New Zealand Dollar

1.599

1.601

1.665

1.616

Malaysian Ringgit

4.063

3.983

4.315

4.209

Turkish Lira

2.409

2.312

2.562

2.388

Brazilian Real

2.708

2.444

3.033

2.689

Mexican Peso

16.47417.03917.00917.217

UAE Dirham

4.813

4.725

4.876

4.977

Ukrainian Hryvna

10.47610.296

10.61810.823

Moroccan Dirham

11.14911.11411.16911.220

Kuwait Dinar

0.373

0.359

0.378

0.381

198.134-203.950203.820

Kazakhstani Tenge
Qatari Riyal

4.769

4.688

4.815

4.933

Sweden Koruny

8.536

8.832

8.713

8.633

35. Remuneration of Board of Directors and Senior Management
Remuneration of the PRADA spa Board of Directors for the six months ended
July 31, 2013
(amounts in thousands of Euro)Salariesand otherbenefits

Bonusesand other
incentives

Contributions
Non-monetary to retirement
benefits
benefits
schemeTotal

Miuccia Prada Bianchi

500

4,850

4,500

-

1

9,851

Patrizio Bertelli

500

3,000

6,500

-

1

10,001

Carlo Mazzi

150

-

-

40

10

200

Donatello Galli

20

153

91

19

90

373

Marco Salomoni

30

-

-

-

-

30

Gian Franco Oliviero Mattei

70

-

-

-

2

72

Giancarlo Forestieri

30

-

-

-

4

34

Gaetano Micciché

20

-

-

-

-

20

Sing Cheong Liu

30

-

-

-

6

36

1,350

8,003

11,091

59

114

20,617

Total

74

Directors’fees

PRADA Group

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The remuneration of Chairperson and Executive Director Miuccia Prada Bianchi reported
for the six months ended July 31, 2013, fell within the scope of application of Chapter
14A of the Hong Kong Stock exchange Listing Rules as it was qualified as continuingconnected transactions subject to reporting and announcement, but exempted fromindependent shareholders’ approval requirement. As requested by the Listing Rules,
comprehensive disclosure of this continuing connected transaction was reported by
the PRADA spa Announcements dated April 27, 2012, and April 5, 2013.
The remuneration and bonus of Chief Executive Officer and Executive Director Patrizio
Bertelli reported for the six months ended July 31, 2013, fell within the scope of
application of Chapter 14A of the Hong Kong Stock exchange Listing Rules as it was
qualified as continuing connected transactions subject to reporting and announcement,
but exempted from independent shareholders’ approval requirement. As requested by
the Listing Rules, comprehensive disclosure of this continuing connected transaction
was reported by the PRADA spa Announcements dated April 27, 2012, and April 5,
2013.
Remuneration of the PRADA spa Board of Directors for the period ended July 31,
2012(amounts in thousands of Euro)

Directors’fees

Salariesand otherbenefits

Bonusesand other
incentives

Contributions
Non-monetary to retirement
benefits
benefits
schemeTotal

Miuccia Prada Bianchi

500

4,850

-

-

-

5,350

Patrizio Bertelli

500

3,000

1,500

-

-

5,000

Carlo Mazzi

150

-

-

41

9

200

Donatello Galli

20

150

38

19

77

304
238

Marco Salomoni

30

200

-

-

8

Gian Franco Oliviero Mattei

70

-

-

-

8

78

Giancarlo Forestieri

30

-

-

-

4

34

Gaetano Micciché

20

-

-

-

-

20

Sing Cheong Liu

30

-

-

-

6

36

1,350

8,200

1,538

60

112

11,260

Total

Senior Management remuneration
The remuneration of the Senior Management were as follows:
six months
ended July 31
2013(unaudited)

six months
ended July 31
2012(unaudited)

Wages and salaries

6,232

4,314

Bonus and other incentives

2,517

2,859

703

511

Contributions to retirement benefits scheme

1,189

958

Total

10,641

8,642(amounts in thousands of Euro)

Non-monetary benefits

PRADA Group

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The remuneration of the Senior Managers is provided by bands as follows:(amounts in Hong Kong Dollars)

76

six months
ended July 31
2013(unaudited)

six months
ended July 31
2012(unaudited)

Less than HKD 2,000,000

15between HKD 2,000,000 and HKD 4,000,000

1410between HKD 4,000,000 and HKD 8,000,000

33between HKD 8,000,000 and HKD 25,000,000

1-

in excess of HKD 25,000,000

1

1Total number of individuals

20

19

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36. Transactions with related parties
The Group enters into transactions with parties that can be qualified as related
according to “IAS 24 Related Party Disclosure“. These transactions mainly refer to thesale and purchase of goods, supply of services, the granting and receipt of loans aswell as sponsorship, lease and franchise agreements. These transactions take place
on an arm’s length basis.
The following tables show details of transactions with related party for each item in theStatement of financial position and in the Income statement.
Statement of financial position amounts at July 31, 2013 (unaudited)Trade
receivables from
related parties

Other
receivables andprepaymentsfrom relatedpartiesTradepayables torelated parties

Other
payables andprepayments torelated parties

PRADA Holding bv

-

314

-

118

Other companies controlled by PRADA Holding bv

-

17

-

-

Prapar Corporation

-

-

-

-

EXHL Italia srl

-

17

-

-

35,30817,642

12,8434,900

DFS Hawaii

-

-

662

-

DFS Venture Singapore pte ltd

-

-

46

50

25

-

1,388

-

-

-

33

-

31,883

-

5,830

320

Al Tayer Travels

-

-

94

-

Al Tayer Insignia llc

-

-

141

4,205

Al Tayer Logistics

-

-

-

-

Al Tayer Motors

-

-

-

-

Al Tayer Trends

14

-

12

-

Al Tayer Group llc

-

-

5

-

Danzas llc UAE

-

-

144

182

1,172

10,261

-

-

143

739

-

-

Aati Contracs

-

-

36

-

Stiching Fondazione Prada

-

1,453

-

62

Progetto Prada Arte srl

-

3,417

-

78

Gipafin sarl

-

-

-

3

Granello sa

-

153

-

-

HMP srl

-

138

-

-

Prada America’s Cup srl

-

1,397

-

-

1,090

-

-

-

Premiata srl

792

-

1,851

-

Le Mazza srl

189

-

625

-

Calzaturificio Mazza Graziano

-

-

61

-

Peschiera Immobiliare srl

-

81

-

-

Secva srl

-

-

1,914

-

PRADA Arte bv

-

3

-

-

Other

-

-

1

-

Members of the Board of Directors

-

-

178

-

Relative of a member of the Board of Directors

-

-

283

-

35,30817,973

13,304

5,018(amounts in thousands of Euro)

Other related partiesDFS Cotai ltd
DFS New Zealand ltd
F.lli Prada srl

Luna Rossa Challenge 2013 NZ ltd
Luna Rossa Challenge 2013 srl

PRA 1 srl

Total at July 31, 2013 (unaudited)

PRADA Group

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Statement of financial position amounts at January 31, 2013 (audited)(amounts in thousands of Euro)PRADA Holding bv

Othernon-current
assets from
related parties

-

249

-

3

-

-

3

Prapar Corporation

-

-

-

-

3

EXHL Italia srl

-

Other
Trade
payables andpayables toprepayments torelated parties
related parties

Other companies controlled by
PRADA Holding bv

Other related parties

-

120

-

3

-

-

-

29,683

19,241

113

6,719

5,476

DFS Hawaii

-

-

-

293

-

DFS Venture Singapore pte ltd

-

-

-

88

-

DFS Cotai ltd
DFS New Zealand ltd
F.lli Prada srl

17

-

-

1,243

-

-

-

-

45

320

28,432

3

-

1,568

Al Tayer Travels

-

-

-

58

-

Al Tayer Insignia llc

-

-

-

44

5,085

Al Tayer Logistics

-

-

-

8

-

Al Tayer Motors

-

-

-

1

-

Al Tayer Trends

319

-

-

148

-

Al Tayer Group llc

-

-

-

13

-

Danzas llc UAE

-

-

-

284

-

Luna Rossa Challenge 2013 NZ ltd

592

11,263---

Luna Rossa Challenge 2013 srl

117

1,070

-

-

-

-

-

-

49

-

Aati Contracs
Stiching Fondazione Prada

-

671

-

-

33

Progetto Prada Arte srl

-

3,470

-

-

37

Gipafin sarl

-

6

-

-

-

Granello sa

-

148

-

-

-

HMP srl

-

86

113

-

-

Prada America’s Cup srl

-

1,397

-

-

-

PRA 1 srl

39

1,041

-

-

-

Premiata srl

124

-

-

1,386

-

Le Mazza srl

42

-

-

37

-

-

-

-

61

-

Peschiera Immobiliare srl

-

81

-

-

-

Secva srl

-

-

-

1,393

-

Calzaturificio Mazza Graziano

PRADA Arte bv

-

4

-

-

-

Other

1

1

-

-

1

Members of the Board of
Directors

-

-

-

88

-

Relative of a member of theBoard of Directors

-

-

-

131

-

29,683

19,493

113

6,939

5,599

Total at January 31, 2013
(audited)

78

Other
Trade receivables andreceivables fromprepayments
related parties
from relatedparties

PRADA Group

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Income statement amounts for the six months ended July 31, 2013 (unaudited)
Net
sales

Cost ofgoods soldGeneral, admin.
& selling costs(income)Royalties
incomeInterest
incomePRADA Holding bv

-

-

(48)

-

-

Other companies controlled by
PRADA Holding bv

-

-

(3)

-

-

(amounts in thousands of Euro)

EXHL Italia

-

-

(3)

-

-

Other related parties

24,091

4,234

28,927689

1F.lli Prada srl

24,090988(1,834)689-

Danzas llc

-

585

17

-

-

DFS Hawaii

(1)

-

2,043

-

-

DFS New Zealand ltd

-

-

281

-

-

DFS Australia pty ltd

-

-

-

-

-

DFS Cotai ltd

-

-

3,819

-

-

DFS Venture Singapore pte ltd

-

-

284

-

-

Al Tayer Travels

-

-

164

-

-

Al Tayer Group llc

-

-

22

-

-

Al Tayer Insignia llc

-

17

75

-

-

Al Tayer Trends

-

40

265

-

-

Secva srl

-

-

1,352

-

-

Luna Rossa Challenge 2013 NZ ltd

1(8)

16,536--

Luna Rossa Challenge 2013 srl sl

-

-

1,209

-

-

HMP srl

-

-

227

-

1

PRA 1 srl

-

-

178

-

-

Stitching Fondazione Prada

-

-

1,353

-

-

Progetto Prada Arte srl

-

(17)

2,398

-

-

Peschiera Immobiliare srl

-

-

245

-

-

Premiata srl

-

1,844

-

-

-

Calzaturificio Mazza Graziano

-

-

300

-

-

Le Mazza srl

-

785

-

-

-

Gipafin sarl

-

-

(18)

-

-

PRADA Arte bv

-

-

(3)

-

-

Other

1

-

14

-

-

Relative of a member of theBoard of Directors

-

-

365

-

-

24,091

4,234

29,241689

1Total at July 31, 2013 (unaudited)

PRADA Group

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Income statement amounts for the six months ended July 31, 2012 (unaudited)
Net
sales

Cost ofgoods soldGeneral,admin. &selling costs(income)Royalties
incomeInterest
incomeInterest
expensePRADA Holding bv

-

-

(77)

-

-

-

Other companies controlled by
PRADA Holding bv

-

-

(6)

-

-

-

(amounts in thousands of Euro)

-

-

(6)

-

-

-

Other related parties

EXHL Italia

20,004

3,054

14,101563

190F.lli Prada srl

20,004

1,041(1,143)

563

-

-

-

278

-

-

-

-

Danzas llc
DFS Hawaii

-

-

1,750

-

-

-

DFS New Zealand ltd

-

-

228

-

-

14

DFS Australia pty ltd

-

-

-

-

-

DFS Cotai ltd

-

-

2,265

-

-

-

DFS Venture Singapore pte ltd

-

-

216

-

-

-

Al Tayer Travels

-

-

24

-

-

-

Al Tayer Group llc

-

-

18

-

-

11
65

Al Tayer Insignia llc

-

-

87

-

-

Al Tayer Trends

-

-

-

-

-

-

Secva srl

-

-

480

-

-

-

Luna Rossa Challenge 2013 NZ ltd

-

-

6,838

-

-

-

Luna Rossa Challenge 2013 srl sl

-

-

461

-

-

-

Luna Rissa Challenge sl

-

-

22

-

-

-

HMP srl

-

-

248

-

1

-

PRA 1 srl

-

-

-

-

-

-

Stitching Fondazione Prada

-

(1)

1,044

-

-

-

Progetto Prada Arte srl

-

(1)

1,292

-

-

-

Peschiera Immobiliare srl

-

-

-

-

-

-

Premiata srl

-

-

(5)

-

-

-

Calzaturificio Mazza Graziano

-

-

300

-

-

-

Le Mazza srl

-

1,737

1

-

-

-

Gipafin sarl

-

-

-

-

-

-

PRADA Arte bv

-

-

-

-

-

-

Other

-

-

(25)

-

-

-

Relative of a member of theBoard of Directors

-

-

199

-

-

-

20,004

3,054

14,217563

190

Total at July 31, 2012 (unaudited)

The above tables report information on transactions with related parties in accordancewith IAS 24. As stated below, some of these transactions fell also within the applicationof the Hong Kong Listing Rules.
The transactions with related party Fratelli Prada spa reported for the six months
ended July 31, 2013, fell within the scope of application of Chapter 14A of the Hong
Kong Stock exchange Listing Rules as they were qualified as continuing connectedtransactions subject to reporting and announcement, but exempted from independent
shareholders’ approval requirement. As requested by the Listing Rules, comprehensive
disclosure of these continuing connected transactions was reported by the PRADA
spa Prospectus dated June 13, 2011.
The transactions with related parties Luna Rossa Challenge 2013 NZ ltd and Luna Rossa
Challenge 2013 srl reported for the six months ended July 31, 2013, fell within thescope of application of Chapter 14A of the Hong Kong Stock exchange Listing Rules as
they were qualified as connected transactions subject to reporting and announcement,
but exempted from the independent shareholders’ approval requirement. As requestedby the Listing Rules, comprehensive disclosure of these connected transactions was
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reported by the PRADA spa Announcements dated January 10, 2012, and April 16,
2013.
The transactions with related party Progetto Prada Arte srl (hereafter “PPA”) included arental income of Euro 546 thousands accrued for the six months ended July 31, 2013,
and reported under the caption General, administrative & selling costs/(income), as afee payable by PPA to PRADA spa in accordance with the PPA Business Combination
Agreement signed on January 29, 2013. The PPA Business Combination Agreement fellwithin the scope of application of Chapter 14A of the Hong Kong Stock exchange Listing
Rules as it was qualified as continuing connected transactions subject to reporting
and announcement, but exempted from the independent shareholders’ approvalrequirement. As requested by the Listing Rules, comprehensive disclosure of thesecontinuing connected transactions was included in the PRADA spa Announcement
dated January 29, 2013.
The transactions with related party Progetto Prada Arte srl (hereafter “PPA”), otherthan the rental income above-reported, fell within the scope of application of Chapter
14A of the Hong Kong Stock exchange Listing Rules as they were qualified asconnected transactions subject to reporting and announcement, but exempted fromthe independent shareholders’ approval requirement. As requested by the Listing
Rules, comprehensive disclosure of these connected transactions was reported by
the PRADA spa Announcements dated June 28, 2013.
With the exception of the above reported non-exempt continuing connectedtransactions and non-exempt connected transactions no other transaction reported forthe six months ended July 31, 2013, fell under the definition of “connected transaction”
or “continuing connected transaction” or, whether it fell under the definition of“connected transaction” or “continuing connected transaction”, it was exemptedfrom reporting, annual review, announcement and independent shareholders’ approvalrequirements contained in Chapter 14A of the Listing Rules.
37. Commitments
Operating leases
At July 31, 2013, and January 31, 2013, operating lease commitments, by maturity
date, were as follows:
July 312013(unaudited)

January 31
2013(audited)

Within a year

294,903

281,598

After between one year and five years

961,067

847,816After more than five years

932,310723,323

2,188,280

1,852,737(amounts in thousands of Euro)Total

The operating leases commitments as at July 31, 2013, included Euro 2,084 million
regarding agreements to lease commercial premises (Euro 1,738 million for thefinancial year 2012).

PRADA Group

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The following table shows the amounts paid in first half 2013 and 2012:(amounts in thousands of Euro)six months
ended July 31
2013(unaudited)

six months
ended July 31
2012(unaudited)

Fixed minimum lease payments

113,634

100,109

Variable lease payments

143,162

119,916

Total

256,796

220,025

Some Group companies are required to pay lease charges based on a fixed percentageof net sales.
Finance leases
Property, plant and equipment included the following assets held under finance leases:(amounts in thousands of Euro)Land and buildings
Furniture and fittings
Other tangibles

July 312013(unaudited)

January 31
2013(audited)

7,836

12,284-

12,44672

3,007

Accumulated depreciation(1,591)(16,468)

Total

6,317

11,269The present value of lease payments due after July 31, 2013, is detailed by maturity
date below:(amounts in thousands of Euro)
Payable by:
July 31 2014

197

July 31 2015

437

July 31 2016

4

July 31 20177

After July 31 2017

-

Total

645

38. Financial summary(amounts in thousands of Euro)

82

January 31
2013(audited)

January 31
2012(audited)

January 31
2011(audited)

January 31
2010(audited)

January 31
2009(audited)
1,643,629

Net revenues

3,297,219

2,555,606

2,046,651

1,561,238

Gross margin

2,376,541

1,828,025

1,387,888

974,656

953,096

Operating income (EBIT)

889,781

628,935

418,387

187,032

190,954

Group net income

625,681431,929

250,819

100,163

98,806

Total assets

3,385,279

2,943,568

2,366,015

2,147,481

2,176,054

Total liabilities

1,054,787

1,112,601

1,155,877

1,090,822

1,163,755

Total Group shareholders’ equity

2,320,022

1,822,743

1,204,350

1,047,903

1,003,107

PRADA Group

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39. Definitions
DOS: Directly Operated Store.
EBITDA: Earnings Before Interest, Tax, Depreciation, Amortization and imparement.
SSSG: Same Stores Sales Growth, which means a comparison of the results atconstant exchange rates of all of the Group DOS in operation for more than one year
using the actual comparable days of operation for each DOS for the prior year (meaning
only the days in which such DOS were open in both years).
Net Financial Position: short-term and long-term financial payables to third and relatedparties, plus lease obligations, less cash and cash equivalent and short-term and longterm financial receivable from third and related parties.
40. Consolidated companies
The companies included in the scope of consolidation are as follows:

EntityLocalcurrency

Sharecapital%(000s ofinterest
local
currency)

RegisteredofficeDate ofincorporation/ Main businessestablishment

Italy
PRADA spa

EUR

255,882

Artisans Shoes srl (*)

EUR

1,000

66.70

Milan, Italy

Production/Distribution/
Group Holding company

Montegranaro,
09/02/1977
Italy

Footwear production

Space Caffè srl (*)

EUR

20

100.00Milan, Italy

06/12/1990

Service company

IPI Logistica srl(*)

EUR

600

100.00Milan, Italy

26/01/1999

Service company

PRADA Stores srl (*)

EUR

520

100.00Milan, Italy

11/04/2001

Retail/sub holding
company

Car Shoe Italia srl

EUR

10

100.00Milan, Italy

16/03/2001

Distribution/Retail

Church Italia srl

EUR

51

100.00Milan, Italy

31/01/1992

Distribution/Retail

Pellettieri d’Italia srl (*)

EUR

25

60.00

Milan, Italy

10/07/2013

Production

PRADA Group

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Localcurrency

EntitySharecapital%(000s ofinterest
local
currency)

RegisteredofficeDate ofincorporation/ Main businessestablishment

100.00London, UK

07/01/1997

EuropePRADA Retail UK ltd

GBP

RetailPRADA Germany gmbh

EUR

215

100.00

Munich,Germany

20/03/1995

RetailPRADA Austria gmbh

EUR

40

100.00Vienna, Austria 14/03/1996

RetailPRADA Spain sa

EUR

240

100.00Madrid, Spain

14/05/1986

RetailPRADA Retail France sas

EUR

4,000

100.00Paris, France

10/10/1984

RetailPRADA Hellas Single
Partner Limited Liability
Company (*)

EUR

6,000

100.00Athens, Greece 19/12/2007

RetailPRADA Monte-Carlo sam

EUR

150

100.00Monte-Carlo,
Monaco25/05/1999

RetailPRADA sa (*)

EUR

31

100.00

Luxembourg

29/07/1994

Service company/
Trademark owner

PRADA Company sa

EUR

3,204

100.00

Luxembourg

12/04/1999

Service company

Car Shoe sa

EUR

2,100

100.00

Luxembourg

13/03/2001

Service company/
Trademark owner

27/03/2000

Sub-holding company/
Service company/ Retail

PRADA Far East bv(*)

EUR

20

100.00Amsterdam,
Netherlands

Space sa

CHF

200

100.00

Lugano,Switzerland

17/07/2008

RetailChurch Holding UK plc (*)

GBP

78,126100.00

Northampton,UK

22/07/1999

Sub-holding

Church France sa

EUR

241

100.00Paris, France

01/06/1955

RetailChurch UK Retail ltd

GBP

1,021

100.00

Northampton,
UK

16/07/1987

RetailChurch’s English Shoes
Switzerland sa

CHF

100

100.00

Lugano,Switzerland

29/12/2000

RetailChurch & Co. ltd

GBP

2,811

100.00

Northampton,
UK

16/01/1926

Sub-holding company/
Production/Distribution

Church & Co. (Footwear) ltd

GBP

44

100.00

Northampton,
UK

06/03/1954

Trademark ownerChurch English Shoes sa

EUR

75

100.00Brussels,
Belgium

25/02/1963

RetailPRADA Czech Republicsro (*)

CZK

2,500

100.00Prague, Czech
Republic

25/06/2008

RetailPRADA Portugal. Unipessoal
lda (*)

EUR

5

100.00Lisbon, Portugal

07/08/2008

Retail07/11/2008

RetailPRADA Rus llc (*)

RUR

250

100.00

Moscow,
RussiaChurch Spain sl

EUR

3

100.00Madrid, Spain

06/05/2009

RetailPRADA Bosphorus Deri
Mamuller Ticaret Limited
Sirketi (*)

TRY

26,000100.00Istanbul,
Turkey26/02/2009

RetailPRADA Ukraine llc (*)

UAH

30,000100.00Kyiv, Ukraine

14/10/2011

Retail100.00Amsterdam,
Netherlands

07/07/2011

RetailChurch Netherlands bv

84

5,000

EUR

18

Car Shoe UK ltd

GBP

100

100.00London, UK

28/10/2011

RetailChurch Ireland Retail ltd

EUR

50

100.00Dublin, Ireland 20/11/2011

RetailChurch Austria gmbh

EUR

35

100.00Vienna, Austria 17/01/2012

RetailPrada Sweden AB

SEK

500

100.00Stockholm,
Sweden

18/12/2012

RetailChurch Footwear AB

SEK

100

100.00Stockholm,
Sweden

18/12/2012

RetailPrada Switzerland sa (*)

CHF

226

100.00Geneve,Switzerland

28/09/2012

RetailErfico SA (*)

CHF

50

100.00Geneve,Switzerland

28/09/2012

Retail24/06/2013

Retail07/02/2013

Real Estate

Prada Kazakhstan llp (*)

KZT

500

100.00

Almaty, Kazakhstan

Kenon Limited

GBP

50,000100.00London, UK

PRADA Group

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Localcurrency

EntitySharecapital%(000s ofinterest
local
currency)

RegisteredofficeDate ofincorporation/ Main businessestablishment

Americas
PRADA USA Corp. (*)

USD

152,211100.00

New York,
U.S.A

25/10/1993

Services / Distribution/
RetailSpace USA Corp.

USD

301

100.00

New York,
U.S.A.

15/02/1994

Retail17/11/1999

Duty-free stores

TRS Hawaii llc

USD

400

55.00

Honolulu,
U.S.A.

PRADA Canada corp. (*)

CAD

300

100.00Toronto,Canada01/05/1998

Distribution/Retail

Church & Co. (USA) ltd

USD

85

100.00

New York,
U.S.A.

08/09/1930

RetailPost Development corp (*)

USD

42,221100.00

New York,
U.S.A.

18/02/1997

Real estate

PRADA Retail Mexico,
S. de R.L. de C.V.

MXN

2,058

100.00

Mexico City,
Mexico12/07/2011

RetailPRADA Brasil Importação e
Comércio de Artigos de Luxo
Ltda. (*)

BRL

30,000100.00

Sao Paulo,
Brazil12/04/2011

RetailPRADA Asia Pacific ltd

HKD

3,000

100.00Hong Kong

12/09/1997

Retail /Distribution/
Services

Asia-Pacific and Japan

PRADA Taiwan ltd

TWD

3,800

100.00Hong Kong

16/09/1993

RetailSpace HK ltd

HKD

1,000

100.00Hong Kong

25/02/1993

RetailPRADA Retail Malaysia Sdn.
Bnd.

MYR

1,000

100.00

Malaysia

23/01/2002

RetailPRADA China ltd

HKD

115,100

100.00Hong Kong

03/11/1997

Dormant

TRS Hong Kong

HKD

500

55.00

Hong Kong

23/02/2001

Duty-free stores

PRADA Singapore Pte ltd

SGD

1,000

100.00Singapore

31/10/1992

RetailTRS Singapore

SGD

500

55.00

Singapore

08/08/2002

Duty-free stores

PRADA Korea ltd

KRW

8,125,000

100.00Seoul, Korea

27/11/1995

RetailPRADA (Thailand) co ltd

THB

172,000

100.00

Bangkok,Thailand19/06/1997

RetailPRADA Japan co ltd

JPY

1,200,000

100.00Tokyo, Japan

01/03/1991

RetailTRS Guam Partnership

USD

1,095

55.00

Guam

01/07/1999

Duty-free stores

TRS Saipan Partnership

USD

1,405

55.00

Saipan01/07/1999

Duty-free stores

55.00

Auckland,
New Zealand

04/11/1999

Duty-free stores

21/04/1997

RetailTRS New Zealand ltd

NZD

100

PRADA Australia Pty ltd

AUD

7,500

100.00

Sydney,Australia

PRADA Trading (Shanghai)co ltdRMB

1,653

100.00Shanghai,China

09/02/2004

RetailTRS Okinawa KK

JPY

10,000

55.00

Tokyo, Japan

21/01/2005

Duty-free stores

31/10/2005

Retail

17/04/1992

RetailPRADA Fashion Commerce(Shanghai) co ltd

RMB

174,950

100.00Shanghai,
China

Church Japan co ltd

JPY

3,050

100.00Tokyo, Japan

Church Hong Kong Retail ltd

HKD

1,000

100.00Hong Kong

04/06/2004

RetailChurch Singapore Pte. ltd

SGD

500

100.00Singapore

18/08/2009

RetailCar Shoe Singapore ltd

SGD

500

100.00Singapore

01/02/2010

RetailCar Shoe Hong Kong ltd

HKD

3,000

100.00Hong Kong

26/02/2010

Retail100.00Hong Kong

15/12/2011

Service company

100.00

Dongguan,China

28/11/2012

Service company

100.00Shanghai,China

05/12/2012

Retail100.00Wellington,
New Zealand

05/07/2013

RetailPRADA Hong Kong P.D. ltd (*)

HKD

11,000Prada Dongguan Trading Co.,
Ltd

HKD

3,000

Church Footwear (Shanghai)Co., Ltd

RMB

11,900Prada New Zeland ltd

NZD

80,000PRADA Group

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Localcurrency

EntitySharecapital%(000s ofinterest
local
currency)

RegisteredofficeDate ofincorporation/ Main businessestablishment

Middle East
PRADA Middle East fzco (*)

AED

18,00060.00

Jebel Ali Free
Zone, Dubai

25/05/2011

Services / Distribution

PRADA United Arab Emiratesllc (**)

AED

300

49.00

Dubai, United
Arab Emirates

04/08/2011

RetailPrada Kuwait wll (**)

KWD

50

49.00

Kuwait city,
Kuwait18/09/2012

RetailPrada Retail SPC (*)

QAR

15,000100.00Doha, Qatar

03/02/2013

RetailMAD

44,000100.00Casablanca,
Morocco

11/11/2011

RetailOther countries
PRADA Maroc sarlau (*)(*) Companies owned directly by PRADA spa(**) Company consolidated based on definition of control per IAS 27

The following table shows the companies not included in the consolidation area andthe related consolidation method:
Company

PAC srl (in liquidation)

Percentage directinterest as at
July 31, 2013

Percentage directinterest as at
July 31, 2012

Note

Consolidation method

49.00

49.00

Associate

Equity method

41. Events after the reporting period
On August 1, 2013, the Euro 130 million Notes admitted on the Irish Stock Exchange
was settled.

86

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