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Interim Financial Report 2015

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

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3
9
25
35
41

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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

Head Office

Via A. Fogazzaro, 28
20135 Milan, Italy

Place of business in Hong Kong
registered under Part 16 of theHong Kong Companies Ordinance

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

Company website

www.pradagroup.com

Hong Kong Stock Exchange
Identification Number

1913

Board of Directors

Carlo Mazzi(Chairman)
Miuccia Prada Bianchi(Chief Executive Officer)
Patrizio Bertelli(Chief Executive Officer)
Donatello Galli(Executive Director)
Alessandra Cozzani(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)
Carlo Mazzi
Giancarlo Forestieri

Nomination Committee

Gian Franco Oliviero Mattei (Chairman)
Carlo Mazzi
Sing Cheong Liu

Board of Statutory Auditors

Antonino Parisi (Chairman)
Roberto Spada (Standing member)David Terracina (Standing member)

PRADA Group

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Supervisory Board(Leg. Decr. 231/2001)

David Terracina (Chairman)
Gian Franco Oliviero Mattei
Franco Bertoli

Main Shareholder

PRADA Holding S.p.A.
Via A. Fogazzaro, 28
20135 Milan, Italy

Joint Company Secretaries

Patrizia Albano
Via A. Fogazzaro, 28
20135 Milan, Italy
Ying-Kwai Yuen (Fellow member, HKICS)
36/F, Gloucester Tower
The Landmark, 11 Pedder Street
Central, Hong Kong

Authorized Representatives
in Hong Kong

Carlo Mazzi
Via A. Fogazzaro, 28
20135 Milan, Italy
Ying-Kwai Yuen (Fellow member, HKICS)
36/F, Gloucester Tower
The Landmark, 11 Pedder Street
Central, Hong Kong

Alternate Authorized
Representative to Carlo Mazzi
in Hong Kong

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 S.p.A.
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

100%

Pellettieri d’Italia srl
Milan
Production

PRADA Dongguan
Trading Co ltd
Dongguanservices100%

IPI Logistica srl
Milan
services49%

PAC srl in liquidazione
Milan(in liquidation)

60%

Tannerie Limonges sas
Isle
Production

100%

PRADA Far East bv
Amsterdam
sub-Holding/outlet/retail

100%

PRADA USA Corp
New York
distribution/services/retail

100% PRADA Australia pty ltd
SydneyretailPRADA Korea ltd
Seoul
retailPost Developement Corp 100%
San Francisco
real estate

100%

Church Holding UK ltd
Northampton
Holding

100% PRADA Singapore pte ltd
Singaporeretail100%

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

55%

TRS Hawaii Ilc
Honolulu
dfs

100%

55%

TRS Guam Partnership
Guam
dfs

100%

100%

PRADA Retail Mexico
S. de R.L. de C.V.
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
retail100% Church & Co (Footwear) ltd
Northampton
tradeMarks
100% Church Singapore pte ltd
Singaporeretail100%

Church Netherlands bv
Amsterdam
outlet/retail

100%

Church Footwear ab
Stockholm
retail100%

Church Denmark aps
CopenhagenretailChurch’s English Shoes sa 100%
Brussels
retailChurch France sas
ParisretailMacau Branch
Macau
dfs

100%

TRS New Zealand ltd
Wellington
dfs

55%

Church Italia srl
100%
Milan
distribution/retail/services

TRS Singapore pte ltd
Singaporedfs

55%

Church Spain sl
MadridretailPRADA Asia Pacific ltd
100%
Hong Kong
distribution/retail/services

100%

Church Ireland Retail ltd 100%
DublinretailChurch Austria gmbh
Viennaretail100%

Church Footwear(Shanghai) Co ltd
Shanghairetail100%

Macau BranchMacau
retail
100%

100%

100%

PRADA Group

Prada Group-Interim Financial Report 2oct 2015.indd 6

100%

PRADA Sweden ab
Stockholm
retail100%

Kenon ltd
Londonreal estate

100%

PRADA India Fashion
Private ltd
MumbaidorMant

100% PRADA Vietnam Limited
Liability Company
Hanoi
retail100%

PT Prada Indonesia
Jakartadistribution

PRADA Taiwan ltd
Hong Kong
services
Taipei BranchTaipeiretail

100%

6

100%

PRADA Canada Corp
Toronto
distribution/retail

PRADA Trading(Shanghai) Co ltd
Shanghai
dorMant
PRADA Fashion Commerce(Shanghai) Co ltd
ShanghairetailPRADA Macau Co ltd
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PRADA Hellas
Sole Partner llc
Athensretail100%

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

PRADA Rus llc
Moscow
retail100%

PRADA Stores srl
Milanretail/services

100%

PRADA Austria gmbh
Viennaretail100%

PRADA Spain sl
Madridretail100% PRADA Germany gmbh
Munichretail/services

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

100%

49%

PRADA Emirates llc
Dubai
retail49%

PRADA Kuwait wll
Kuwait City
retail80%

100% PRADA Monte-Carlo sam
MonacoretailPRADA Bosphorus Deri
Mamüller ltd Sirketi
Istanbul
retail

100%

60%

100%

Marchesi Angelo srl
Milan
confectionery

100%

Swiss Branch
Luganoservices

10%90%Montenapoleone 9 srl
Milan
services

PRADA sa
Luxembourg
tradeMark100%

PRADA Company sa
Luxembourg
services

PRADA Retail UK ltd
LondonretailIreland Branch
Dublinretail100% PRADA Retail France sas
ParisretailPRADA Brasil
100% Importação e Comércio
de Artigos de Luxo ltda
São Paulo
retail100%

PRADA Ukraine llc
Kiev
retail100%

PRADA Kazakhstan llp
Almatyretail100%

PRADA Maroc (Sarlau)
Casablanca
retailMaroc Branch
Marrakech
retail100%

PRADA RetailSouth Africa (pty) ltd
Sandtonretail100%

PRADA Retail spc
Doharetail75%

PRADA Saudi Arabia ltd
Jeddahretail100%

PRADA Switzerland sa
Luganoretail100%

PRM Services
S. de R.L. de C.V.
Mexico City
services

100%

PRADA Panama sa
Panamaretail100%

PRADA Retail Aruba nv
Aruba
retail100%

PRADA Denmark aps
CopenhagenretailPRADA Group

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8

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Financial Review

PRADA Group

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The Financial review of the Board of Directors refers to the Group of companies
controlled by PRADA spa (the "Company"), operating 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, 2015, prepared inaccordance with “IAS 34 Interim Financial Reporting” and the IFRS as adopted by theEuropean Union. This Financial review must be read together with the 2015 unaudited
Interim condensed consolidated financial statements.
Consolidated income statement(amounts in thousands of Euro)

Retail%six months
ended July 31
2014(unaudited)%

1,552,393

85.1%

1,442,161

82.3%

Wholesale

248,963

13.6%

288,739

16.5%

Royalties

23,077

1.3%

20,415

1.2%

Net revenues

1,824,433

100.0%

1,751,315

100.0%

Cost of goods sold(498,520)-27.3%(493,715)-28.2%

Gross margin

1,325,913

72.7%

1,257,600

71.8%

Operating expenses(1,032,699)-56.6%(884,442)-50.5%

EBIT

293,21416.1%

373,158

21.3%

Interest and other financial expenses, net(9,073)-0.5%(9,492)-0.5%

Dividends from investments

1,562

0.1%

455

-

Income before taxation

285,703

15.7%

364,121

20.8%

Taxation(94,139)-5.2%(113,075)-6.5%

Net income for the period

191,56410.5%

251,046

14.3%

2,971

0.2%

6,198

0.3%

Net income - Group

188,593

10.3%

244,848

14.0%

Depreciation, amortization and impairment

146,840

8.0%

119,677

6.8%

EBITDA

440,05424.1%

492,835

28.1%

Net income - non-controlling interests

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

six months
ended July 31
2015(unaudited)

PRADA Group

Prada Group-Interim Financial Report 2oct 2015.indd 10

0.074

0.096

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Key financial information
Key economic figures(amounts in thousands of Euro)Net revenues
EBITDAEBITDA %EBITEBIT %Net income of the Group
Earnings per share (Euro)six months
ended
July 312015(unaudited)

twelve months
ended
January 31
2015(audited)

1,824,433

3,551,696

1,751,315

4.2%

440,054954,249

492,835-10.7%

six months
change %ended
six months 2015
July 31vs2014
six months 2014
(unaudited)

24.1%

26.9%

28.1%

-

293,214701,551

373,158-21.4%

16.1%

19.8%

21.3%

-

188,593450,730

244,848-23.0%-23.0%

0.074

0.176

0.096

Capital expenditure

176,235

449,735

289,616-

Net operating cash flows

63,374

483,597

209,186-69,7%

Average number of employees

12,365

11,962

11,824-

Key financial figures(amounts in thousands of Euro)

July 312015(unaudited)

January 31
2015(audited)

July 312014(unaudited)changeJuly 2015 vsJanuary 2015
184,165

Net operating working capital

747,574

563,409510,217

Net invested capital

3,238,133

2,829,359

2,683,766

408,774

Net financial position(259,749)

188,788(1,366)(448,537)

Group shareholders’ equity

2,960,909

3,000,737

2,666,923(39,828)

Financial highlights for the first half of 2015
Net revenues for the first six months of fiscal year 2015 amounted to Euro 1,824.4
million, up by 4.2% compared to the same period of last year at current exchange rates
and down by 5.9% at constant exchange rates. The increase of 7.6% achieved by
the retail channel was consistent all along the six months and drove the consolidated
growth as the wholesale business declined. Sales expansion, essentially driven by the
footwear and clothing divisions, benefited also from the persistent weakness of theEuro, which fostered the flow of tourists in the Eurozone and led to an increase in thevalue of sales made outside the Eurozone. At the same time, results suffered from theongoing slowdowns in the Asia Pacific region. In particular, the contractions recordedin Hong Kong and Macau had a significant impact on performances for the period, bothin terms of sales and margins.
EBIT for the six months ended July 31, 2015, amounted to Euro 293.2 million, or
16.1% on net revenues, down by 21.4% compared to the Euro 373.2 million achievedin the first six months of 2014 when the incidence on net revenues was 21.3%. During
the first half of 2015 the management carried on with the actions commenced at
the end of 2014, focusing on improving the industrial and operative processes; theseactions resulted in a visible improvement in profitability compared to the first quarterof 2015 limiting further pressure on margins. At the same time, despite major partof the retail network expansion plan is done, the Group made further investments inthe DOS structure to complete the project with some improvement and renovation,
while further increasing the Group’s capacity and control over the supply chain. Cost
containment actions have been carried at all levels, including advertising and promotion
expenses. Nevertheless, some important initiatives were put in place to promote andstrengthen the identity of the brands so, besides advertising campaigns and retailevents, Prada continued to support the unique initiatives that distinguish the Group for
its ability to interact with worlds other than fashion, namely art and culture. Among themost significant projects supported in the period, it is worth mentioning the unveilingof the new Milan headquarters of the Prada Foundation, an art museum built on an

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overall surface of 19,000 m2 and designed by OMA, the architectural firm led by Rem
Koolhaas. The resonance of this project has been extremely wide all over the world
and the location has been since the beginning a “must see” for all visitors in Milan.
At July 31, 2015, the Net financial debt of the Group is Euro 259.7 million, from a net
positive position of Euro 188.8 million recorded at January 31, 2015. The reduction was
attributable, first, to payment of dividends to PRADA spa shareholders and, second, tothe use of cash to support the investment plan for the period and finance increases in
net operating working capital.
Net sales analysis
six months
ended July 31
2015(unaudited)%

six months
ended July 31
2014(unaudited)%% changeItaly

286,21015.9%

286,808

16.6%

-0.2%

Europe379,178

21.0%

361,539

20.9%

4.9%

Americas

264,91214.7%

233,452

13.5%

13.5%

Asia Pacific

610,26633.9%

619,221

35.8%

-1.4%

Japan

195,90210.9%

175,262

10.1%

11.8%

Middle East

61,3793.4%

51,930

3.0%

18.2%

Other countries

3,509

0.2%

2,688

0.1%

30.5%

1,801,356

100.0%

1,730,900

100.0%

4.1%(amounts in thousands of Euro)Net sales by geographical area

Total
Net sales by brandPrada

1,461,493

81.2%

1,431,114

82.7%

2.1%

Miu Miu

293,91916.3%

256,031

14.8%

14.8%

Church's

38,3792.1%

35,5602.0%

7.9%

Car Shoe

5,514

0.3%

6,516

0.4%

-15.4%

Other

2,051

0.1%

1,679

0.1%

22.2%

Total

1,801,356

100.0%

1,730,900

100.0%

4.1%

Net sales by product line
Clothing

288,22916.0%

275,779

15.9%

4.5%

1,107,761

61.5%

1,110,715

64.2%

-0.3%

Footwear

370,41520.6%

314,423

18.2%

17.8%

Other

34,951

1.9%

29,983

1.7%

16.6%

Total

1,801,356

100.0%

1,730,900

100.0%

4.1%

1,552,393

86.2%

1,442,161

83.3%

7.6%

248,96313.8%

288,73916.7%-13.8%

Total

1,801,356

100.0%

1,730,900

100.0%

4.1%

Net sales

1,801,356

98.7%

1,730,900

98.8%

4.1%

Royalties

23,077

1.3%

20,415

1.2%

13.0%

1,824,433

100.0%

1,751,315

100.0%

4.2%

Leather goods

Net sales by distribution channelDOS
Independent customers and franchises

Total net revenues

Sales channels
In the six months ended July 31, 2015, retail sales amounted to Euro 1,552.4 million,
up by 7.6% compared to Euro 1,442.2 million achieved for the same period of lastyear. At constant exchange rates there was a 3.3% decrease. The overall improvementin performance was driven only by the favorable exchange rate trends and by new
openings. In the first six months of 2015, the number of Directly Operated Stores (DOS)rose from 594 at January 31, 2015, to 605 at July 31, 2015 (20 openings and 9 closures).

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The wholesale channel generated total net sales of Euro 249 million, down by 13.8%
compared to Euro 288.7 million for the six months ended July 31, 2014. The decrease
was determined by the ongoing selective strategy as well as by a significant slowdown in the duty-free channel in South Korea, following a decline of tourist flows
impacted, above all, by the MERS outburst.
Markets
In Asia Pacific, net sales amounted to Euro 610.3 million, down by 1.4% compared toEuro 619.2 million reported for the same period of 2014 (-17.5% at constant exchange
rates). The performance was significantly penalized by Hong Kong and Macau which
failed to show any signs of recovery throughout the six month period at industry level.
The Greater China recorded net sales for Euro 384.5 million, down by 1.2% as reported
and down by 19.3% at constant exchange rates. In the period the Group opened its
first store in Hanoi, Vietnam.
Net sales generated in Europe totaled Euro 379.2 million, up by 4.9% as reported and
up by 2.5% at constant exchange rates. The growth was entirely delivered by the retailchannel. In the first six months of 2015 just one DOS was opened. Net sales in thewholesale channel were down compared to the corresponding period of prior year, also
at current exchange rates, as a result of the Group’s ongoing highly selective policy inthe region and the impact of the conversion program in Switzerland.
The Italian market contributed Euro 286.2 million to consolidated net sales, basicallythe same amount compared to the same six month period of last year when net sales
totaled Euro 286.8 million. The positive performance achieved by the stores directly
operated by the Group (+14.9%) was counterbalanced by a significant reduction
recorded in the wholesale channel. The only opening in the first half of 2015 was thePrada store in Galleria Vittorio Emanuele II, Milan which became a DOS after a period
when it was operated under a franchise agreement by a related party.
Net sales on the American market totaled Euro 264.9 million, up by 13.5% comparedto Euro 233.5 million for the same period of 2014. At constant exchange rates, net
sales fell by 6.1%. As reported, the retail channel achieved double-digit growth, whileat constant exchange rates it decreased, also because of the impacts of a strong US
Dollar. Wholesale business grew single-digit as reported, but decreased double-digit
at constant exchange rates. In the period, the Group opened its first Prada store in
Panama City.
In Japan net sales totaled Euro 195.9 million, 11.8% up on Euro 175.3 million reported
for the same period of 2014 (4.9% up at constant exchange rates), despite the very
unfavorable comparison base of the first two months, when 2014 results largely
benefitted from anticipated purchases ahead of a VAT increase that came into force
from April 2014.
The Middle East generated net sales of Euro 61.4 million, up by 18.2% compared toEuro 51.9 million for the six months ended July 31, 2014. At constant exchange rates
net sales were down by 2%. It is worth highlighting the positive performance of the
Miu Miu brand which also grew at constant exchange rates. In the period, the Group
opened its first Miu Miu store in Jeddah, Saudi Arabia.
Products
In the six months ended July 31, 2015, leather goods generated net sales of Euro
1,107.8 million which were down by 0.3% compared to Euro 1,110.7 million for thesame period of 2014. At constant exchange rates, the reduction was equal to 10%.
Net sales in the ready-to-wear department amounted to Euro 288.2 million, up by 4.5%
as reported and down by 5.3% at constant exchange rates, with a significative impact

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of the reduced wholesale business. This product category was weak in all regions
except Japan, where there was double-digit sales growth.
The footwear division continued its growth in all regions and, despite being hit by thewholesale business reduction, posted net sales of Euro 370.4 million, showing an
increase of 17.8% compared to Euro 314.4 million reported for the same six month
period in prior year. At constant exchange rates there was a 5.8% growth.
BrandsThe Prada brand generated net sales of Euro 1,461.5 million recording an increaseof 2.1% compared to Euro 1,431.1 million reported for the same period of 2014. At
constant exchange rates there was a 7.9% decrease, essentially determined by theperformances of the leather goods division and especially in Asia Pacific. In terms ofchannels the retail grew, although mainly thanks to better exchange rates, while thewholesale declined double-digit both as reported and at constant exchange rates.
In the six months ended July 31, 2015, the Miu Miu brand contributed net sales ofEuro 293.9 million, a 14.8% increase as reported and a 3.3% increase at constantexchange rates compared to Euro 256 million for the same period of last year. Allregions recorded sales growth at constant exchange rates with the sole exception ofAsia Pacific. In absolute terms, the growth was driven by the retail channel with leather
goods and footwear both performing well.
In the period under analysis the Church’s brand recorded net sales of Euro 38.4 million,
a 7.9% increase compared to Euro 35.6 million for the same period of last year. At
constant exchange rates the increase became a slight decrease of 0.8% due to the
UK Pound movements. The retail channel achieved growth at constant exchange rates
and also on a SSSG basis thanks to the good performances recorded mainly in Europe.
The wholesale business decreased following the selective policy applied to someindependent accounts and the DOS expansion in Europe.
Royalties
In the six months ended July 31, 2015, licensing agreements generated royalties incomeof Euro 23.1 million, 13% more than the Euro 20.4 million reported for the same periodof prior year. This encouraging performance reaffirms the global appeal of the brands
and regarded both the eyewear and fragrance businesses. In addition, it was achieved
without the benefit of the launch of the first Miu Miu fragrance, distribution of which
commenced in August 2015.

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Number of stores
July 31, 2015
Owned

January 31, 2015

Franchises

Owned

Franchises

July 31, 2014
Owned

Franchises

Prada

372

27

362

27

342

27

Miu Miu

174

10

169

8

162

7

Church’s

54

-

55

-

54

-

Car Shoe

5

-

8

-

8

-

Total

605

37

594

35

566

34

July 31, 2015

January 31, 2015

Owned

Franchises

Owned

Franchises

July 31, 2014
Owned

Franchises

Italy

52

5

51

6

52

6

Europe

167

-

167

3

159

4

Americas

113

-

110

-

100

-

Asia Pacific

181

27

175

22

164

21

Japan

72

-

70

-

71

-

Middle East

18

5

17

4

17

3

Africa

2

-

4

-

3

-

Total

605

37

594

35

566

34

Operating and financial results
Gross margin for the six months ended July 31, 2015, amounted to Euro 1,325.9
million, or 72.7% on net revenues. The improvement compared to the 71.8% grossmargin reported for the previous period was due, despite a less favorable product andgeographical mix, to improvements on industrial costs as well as to the positive impact
of exchange rates.
EBITDA for the six months amounted to Euro 440.1 million, or 24.1% on net revenues,
down from Euro 492.8 million for the first six months of 2014, or 28.1% on net revenues.
The dilution in profitability was caused by the negative operational leverage, especiallyat selling expenses level and in advertising and communication expenses, mainly fora concentration of spending in the early months of the current year. The dilution wasrecorded at the EBIT level also as a result of the increased level of depreciation andamortization charges. At the end of the six months the EBIT totaled Euro 293.2 million,
or 16.1% on net revenues, down by 21.4% compared to the Euro 373.2 million achievedin the previous six month period when the incidence on net revenues was 21.3%.
Net financial expenses amounted to Euro 7.5 million, showing overall a decrease
compared to the expense of Euro 9 million recorded in the same period of prior year.
In addition to higher interest on bank borrowings during the period – because ofhigher average financial debt – there were lower exchange financial losses and higher
dividends from financial investments.

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

Non-current assets (deferred tax assets excluded)

July 312015(unaudited)

January 31
2015(audited)

July 312014(unaudited)

2,614,885

2,557,198

2,427,553

Trade receivables, net

347,493346,284

373,848

Inventories, net

778,907654,545539,042

Trade payables(378,826)(437,420)(402,673)

Net operating working capital

747,574

563,409510,217

Other current assets (excluding items of financial position)

208,926

190,149

157,567

Other current liabilities (excluding items of financial position)(291,241)(411,878)(336,490)

Other current assets/(liabilities), net(82,315)(221,729)(178,923)

Provision for risks(67,859)(63,695)(56,229)

Post-employment benefits(65,904)(85,754)(68,760)

Other long-term liabilities(164,043)(159,419)(122,584)

Deferred taxation, net

255,795

239,349

172,492

Other non-current assets/(liabilities)(42,011)(69,519)(75,081)Net invested capital

3,238,133

2,829,359

2,683,766

Shareholder's equity – Group

(2,960,909)(3,000,737)(2,666,923)

Shareholder's equity – Non-controlling interests
Total consolidated shareholders' equity(17,475)(17,410)(15,477)(2,978,384)(3,018,147)(2,682,400)

Long-term financial payables(428,088)(254,462)(265,972)

Short-term financial, net surplus/(deficit)

168,339443,250

264,606

Net financial position surplus/(deficit)(259,749)

188,788(1,366)(3,238,133)(2,829,359)(2,683,766)

0.09

n.a.

0.0005

Shareholders’ equity and net financial position
Debt to Equity ratio

At July 31, 2015, Net invested capital amounts to Euro 3,238.1 million, an increase ofEuro 408.8 million compared to the figure of Euro 2,829.4 million reported at January
31, 2015.
Non-current assets (deferred tax assets excluded) increased from Euro 2,557.2 million
at January 31, 2015, to Euro 2,614.9 million at July 31, 2015. The increase of Euro57.7 million was driven by capital expenditure for the period amounting to Euro 176.2
million, of which Euro 113.2 million for the expansion and improvement of the retail
network, Euro 25.3 million for the strengthening of the industrial facilities and processes
and Euro 37.7 million for the corporate area. Intangible assets recognized at July 31,
2015, include goodwill of Euro 514.1 million in respect of which management did not
identify any indicators of impairment. In accordance with the requirements of “IAS 36
Impairment of assets”, mandatory impairment tests will be performed at year end.
Net operating working capital increased from Euro 563.4 million at January 31, 2015, toEuro 747.6 million. The Euro 184.2 million increase was mainly due to the higher levelof inventories as a result of both a different approach to replenishment and shipping
which started in the last few months of 2014 and new openings (39 since July 31,2014), as well as to a decrease of trade payables following a different phasing of
the procurement strategy of raw materials which was anticipated compared to thepast. Finished products and raw materials in inventory at period end are stated net ofobsolescence and slow moving provision of Euro 64.1 million in order to adjust thecost to the estimated realizable value.
Other current liabilities, net, decreased from Euro 221.7 million at January 31, 2015,
to Euro 82.3 million, following settlement of payables for investments in tangible and
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intangible assets and expiry of hedging derivative contracts which had a negative fairvalue at January 31, 2015.
Other non-current liabilities, net, amount to Euro 42 million. They decreased by Euro
27.5 million compared to the figure at January 31, 2015, as a result of higher level ofdeferred tax assets recognized on temporary differences between the tax values andthe amounts reported in the consolidated financial statements for finished products, aswell as because of payment of some Euro 23 million of long-term employee benefits.
The Group’s net equity at July 31, 2015, amounts to Euro 2,960.9 million. During theyear, dividends of Euro 281.5 million were distributed to shareholders of PRADA spa,
as approved by the Annual General Meeting held on May 26, 2015, with reference tothe financial statements for the year ended January 31, 2015.
Net financial position
July 312015(unaudited)

January 31
2015(audited)

July 312014(unaudited)(428,829)(255,203)(265,965)

-

-

(7)

741

741

-

Long-term financial payables(428,088)(254,462)(265,972)

Short-term financial payables and bank overdrafts(379,153)(263,335)(242,061)

Payables to parent company and related parties(2,444)(2,371)(3,498)

-

11

11

(7)

(21)

(437)

Cash and cash equivalents

549,943

708,966

510,591

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

168,339443,250

264,606

Net financial surplus/(deficit)(259,749)

188,788(1,366)

Net financial surplus/(deficit), excluding receivables/(payables) withrelated parties(258,046)

190,407(1,366)

0.288

n.a.

0.001

(amounts in thousands of Euro)

Long-term debt
Obligations under finance leases – non-current
Long-term financial receivables due from related parties

Receivables from parent company and related parties
Obligations under finance leases

NFP/EBITDA ratio

At July 31, 2015, the Net financial position of the Group is negative and stands at
Euro 259.7 million. There was an overall decrease of Euro 450 million compared to thefigure at January 31, 2015, as a result of the use of cash flows generated by operating
activities, together with existing cash, to finance the investment plan (Euro 235.9
million) and to pay dividends to the shareholders of PRADA spa (Euro 281.5 million)
and to the non-controlling shareholders of the Group’ subsidiaries (Euro 9.4 million). It
should be noted that, following some supply chain processes reengineering, purchasesof raw materials were brought forward compared to previous standard for incoming
fall/winter deliveries and had a significant impact in terms of cash consumption as thenet operating working capital increased from Euro 563.4 million at January 31, 2015, toEuro 747.6 million at July 31, 2015.
In terms of maturity of bank borrowings, the Group managed to improve its financial
flexibility, while also taking advantage of the favorable conditions on the credit market.
It did so by signing during the six month period new long-term facilities in Euro andJapanese Yen for a total amount of approximately Euro 80 million. The total amount ofavailable and unused credit lines amount to Euro 295.1 million at July 31, 2015.

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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 performance of the luxury goods market greatly depends on general economic
conditions. Therefore, the Group’s profitability and operating performance are exposed
to global macroeconomic risk factors as a consequence of its operations on aninternational scale.
The current international economic environment could have a negative impact on
demand for the Group’s products and reduce access to credit, causing financial
problems for customers and other parties with which the Group operates. Overall,these factors could have a negative impact on the business, results, cash flows andthe financial condition of the Group.
A significant portion of the Group’s sales is made to customers who purchasegoods during trips abroad. Consequently, unfavorable economic conditions (e.g. theglobal financial crisis of 2008 and 2009), global political developments (e.g. the war
in Iraq in the spring of 2003), other social or geopolitical factors resulting in unrest,
instability, disorder, civil war or military conflict, natural disasters like fires, flooding andearthquakes, or other events (e.g. the events of September 11, 2001, in the UnitedStates or travel advice issued by the World Health Organization in response to Severe
Acute Respiratory Syndrome, “SARS”) which lead to changes in the flow of travelers
or a reduction in the volume of travel have in the past and could in future have anegative impact on the Group’s business and results.
Risks regarding the protection of intellectual property rights
The Group believes that its trademarks and other intellectual property rights arefundamental to its success and market position. Consequently, the Group’s businessis strongly dependent on its ability to protect and defend its trademarks and otherintellectual property rights.
The Group is constantly committed to the international registration and protection of
its trademarks and other intellectual property. It maintains that its trademarks and otherintellectual property rights are adequately protected on major markets by registration
applications, existing registrations and other legal safeguards.
Risks regarding brand image and recognition
The success of the Group on the international luxury goods market is linked to theimage and distinctiveness of its brands. These features depend on many factors, likethe 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 carefulselection of licensees for certain product categories and the communications activities
in terms of public relations, advertising, marketing and Group profile in general.
Preservation of the image and prestige acquired by the Group’s brands in the fashionand 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 toguarantee uncompromised quality. It also engages in a constant search for innovationin terms of style, product and communications in order to ensure that its message isalways consistent with the strong identity of the brands.

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Risks regarding ability to anticipate trends and react to changing customer
preferences
The Group’s success depends on its ability to create and drive market and producttrends while anticipating changes in customer preferences and in the dynamics of theluxury goods market.
The Group pursues its objective of driving the luxury goods market by stimulating
consumer markets and setting trends thanks to the creative efforts of its Design and
Product Development department. This area of the business includes around 1,000
persons divided between design – where creativity is boosted by a strong mix ofnationalities, cultures and talents – and development – where craft skills combinedwith tried and tested industrial processes ensure that the Group continues to compete
in order to keep up with consumer trends and emerging lifestyles.
Risk factors specific to Prada Group
Risks regarding exchange rate fluctuations
The Group has a vast international presence and is, therefore, exposed to the foreignexchange risk which can negatively impact revenue, costs, margins and profit. In orderto hedge the foreign exchange risk, the Group enters into hedging derivatives designed
to guarantee the Euro (or other operating currency) amount of identified future cash
flows. These future cash flows mainly regard the collection of trade and financial
receivables and the settlement of trade payables. They are mainly concentrated in
PRADA spa, Group holding company and worldwide distributor of Prada and Miu Miu
brand products.
Exchange rate risk management is described in more detail in the Notes to the 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.
Interest rate risk management is described in more detail in the Notes to the 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 who are highly capable in terms of the design, marketing andmerchandising of products.
The Group believes it has a management structure capable of guaranteeing theongoing success of the business and has recently implemented a long-term incentive
plan in order to retain key figures so that they will continue to fulfil roles essential toachievement of the challenging objectives that the Group constantly sets itself.

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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, thisstrategy is mainly based on continued support and development of retail channel
performance and on expansion on an international scale.
The Group sustains the operating performance and results of the retail channel byconstantly checking and, if necessary, redesigning and integrating the main businessprocesses, also through localized marketing initiatives that reassert the distinctive
strengths of the Group brands: their strong identity, the close control over the entire
value chain, the overseeing capacity to combine innovation and quality in a shortperiod of time and a network of stores positioned on the most prestigious shopping
streets and the most important international department stores. In order to ensure
the success of each new DOS, the Group carefully assesses market conditions andconsumer 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 so that brand identify
is properly represented.
Risks regarding the outsourcing of manufacturing activities
The Group designs, checks and produces in-house most of its prototypes and samples
while outsourcing production of most of its accessories and products to third parties
with the right experience and skills.
The Group has implemented a rigorous inspection and quality control process for all
outsourced production. Prada contractually requires its outsourcers to comply withrules and regulations on brand ownership and other intellectual property rights, with all
the provisions of laws and national collective agreements on labor and social security
rules and with laws and regulations on health and safety in the workplace. It also
requires them to read the Prada Group Code of Ethics and make an undertaking torespect the principles set out in it.
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, also considering its
low-risk policy, to invest the surplus funds generated by operations. 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 and
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cash 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 highly 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 frominvesting 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 to legalrisks and risks regarding compliance with applicable laws, including:––

the risks associated with the failure to comply with the Rules governing the
Listing of Securities on the Stock Exchange of Hong Kong or with other laws or
regulations in force in Hong Kong and applicable to the Company following its
listing on the Stock Exchange of Hong Kong Limited;––

the risks associated with the failure to comply with the laws and regulations
applicable to the Company following the listing of the Notes issued on August
2013 on the Irish Stock Exchange;––

the risks associated with health and safety at work in compliance with Italian
Legislative Decree 81/08 and equivalent regulations in other countries;––

possible legal sanctions for wrongful acts pursuant to 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 financial reporting
and the safeguarding of Group assets;––changes in international tax rules applicable in the various countries where theGroup operates that could expose the Group to the risk of non-compliance;––

possible industrial compliance risks regarding the conformity of the finishedgoods distributed and the raw materials and consumables used with 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 tocomply with changes in rules and regulations, reducing the risk of non-complianceto an acceptable level. 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.

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Risks regarding personal data processing
Data is processed using information systems subject to a governance model which
ensures that:––data is adequately protected against the risk of unauthorized access and disclosure(including means for protecting personal privacy and proprietary information),
improper information modification or destruction (including accidental loss) andutilization 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,
insofar as required by IFRS, and in the Corporate Governance section, insofar as
required by the Hong Kong Stock Exchange Rules.
Non-IFRS measures
The Group uses certain financial measures (“non-IFRS measures”) to measure its
operating performance and to help the reader to understand and analyze its statementof financial position. Although they are used by Group management, these measures
are not universally or legally defined and are not regulated by IFRS based on which
the consolidated financial statements are prepared. As other companies operating in
the luxury goods segment might utilize the same measures, but based on different
calculation criteria, it is worth noting the fact that said non-IFRS measures should
always be read together with the related notes and may not be suitable for a directcomparison between different companies.
In this Interim Financial Report, the Prada Group has used the following non-IFRS
measures:
EBITDA: Earnings Before Interests, Taxation, Depreciation and Amortization, i.e.
“Consolidated net income for the period” adjusted to exclude “Interest and otherfinancial income/(expense) and dividends from investments”, “Taxes on income” and“Depreciation, amortization and impairment”.
EBIT: Earnings Before Interest and Taxation, i.e. “Consolidated net income for theperiod” adjusted to exclude “Interest and other financial income/(expense) anddividends from investments” and “Taxes on income”.
SSSG: Same Store Sales Growth, i.e. same store sales growth comparing constantexchange rate results of all DOS operational for more than a year and utilizing theeffective number of days of operations for each DOS in the previous year (i.e. only the
number of days in which the DOS were open in both reporting periods).
Net financial position: Short-term and long-term financial payables towards third parties,
towards related parties and under finance leases less Cash and cash equivalents,
short-term and long-term financial receivables from third parties and related parties.
Free cash flows: net cash flows generated by operating activities less cash flows
utilized in investing activities.
Effective tax rate: ratio between taxation and result before taxation.

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The following table shows the calculation of EBITDA and EBIT.
(amounts in thousands of Euro)six months
ended
July 312015

twelve months
ended
January 31
2015

six months
ended
July 312014

Consolidated net income for the period

191,564

459,218

251,046

Taxes on income

94,139208,484

113,075

Interest and other financial income/(expense) anddividends from investments

7,511

33,8499,037

EBIT (Earnings Before Interest and Taxation)

293,214701,551

373,158

Depreciation, amortization and impairment

146,840

252,698

119,677

EBITDA (Earnings Before Interest, Taxation,
Depreciation and Amortization)

440,054954,249

492,835

Outlook for second half of 2015
The global economic environment is still volatile and recent instability in Asia has nothelped ease the situation so visibility will probably remain low for the time being.
Given this challenging environment, management has continued to perform the wideranging review of critical processes that began in the previous year, focusing on supply
chain management (planning, procurement, manufacturing and logistics organization,
product development), the product offering and pricing structure. This ongoingprocess is aimed at streamlining operations and reducing costs but also at adapting
our business to immediate and long-term market challenges. Moreover, from a shorter
term perspective, action has been taken to cut discretionary expenditure. Some initial
positive effects of these measures are already visible in the last quarter.
Management remains committed and confident that, thanks to the work that has
been done so far and all the efforts that are being made in relation to industrial,
marketing and retail activities, the Group will be in a position to face the current andfuture evolution of the international markets while also leveraging global awareness ofthe brands, coupled with the broad international footprint guaranteed by direct retail
network expansion.

Milan (Italy), September 15, 2015

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Corporate Governance

PRADA Group

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Corporate governance practices
The Company is committed to maintaining a high standard of corporate governancepractices as part of its commitment to effective corporate governance. The corporate
governance model adopted by the Company consists of a set of rules and standards
aimed toward establishing 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, 2015,
to July 31, 2015 (the “Reviewed 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.
As resolved at the shareholders’ general meeting of the Company on May 26, 2015
(the “AGM”), the following persons were re-elected as members of the Board andMr. Carlo Mazzi was elected as the Chairman of the Board for a term of three financial
years, ending on the date of the shareholders’ meeting called to approve the financial
statements for the last year of the Board’s office, and the other executive roles wereconferred at the first Board meeting thereafter in accordance with Italian law and theby-laws of the Company (the “By-laws”):
Mr. Carlo Mazzi as executive director and Chairman of the Board;
Ms. Miuccia Prada Bianchi as executive director and Chief Executive Officer;
Mr. Patrizio Bertelli as executive director and Chief Executive Officer;
Mr. Donatello Galli as executive director and Chief Financial Officer;
Ms. Alessandra Cozzani as executive director;
Mr. Gaetano Micciché as non-executive director;
Mr. Gian Franco Oliviero Mattei as independent non-executive director;
Mr. Giancarlo Forestieri as independent non-executive director; andMr. Sing Cheong Liu as independent non-executive director.
The Board has established the Audit Committee, the Remuneration Committee andthe Nomination Committee. Each Committee is chaired by an independent nonexecutive director. The written terms of reference of each Committee are of no lessthan exacting terms than those set out in the Code and are available on the websites of
the Company and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).
In addition, the Board has established a Supervisory Body under the Italian Legislative
Decree 231 of June 8, 2001 (the “Decree”).

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Audit Committee
The Company has established an Audit Committee in compliance with Rule 3.21 of
the Listing Rules of which at least one member possesses appropriate professional
qualifications in accounting or related financial management expertise to discharge
the responsibility of the Audit Committee. The Audit Committee consists of three
independent non-executive directors, namely, Mr. Gian Franco Oliviero Mattei(Chairman), Mr. Giancarlo Forestieri and Mr. Sing Cheong Liu. The primary duties of
the Audit Committee are to assist the Board in providing an independent view of theactivities of the Company’s financial reporting process and internal control and risk
management systems, to oversee the external audit process and the internal audit
process and to perform other duties and responsibilities as are assigned to the Audit
Committee by the Board. The Audit Committee held four meetings on February 26,
2015, March 26, 2015, June 12, 2015 and September 15, 2015, with an attendance
rate of 100% to review with the senior management, the Group’s internal and external
auditors and the board of statutory auditors the audit plan for the year 2015, theauditing and internal controls activities, the Group’s continuing connected transactionsfor 2014, the update on risk assessment and the financial reporting matters (including
the annual results for the year 2014 and the first quarterly results and interim results
for the year 2015, before recommending them to the Board for approval).
Remuneration Committee
The Company has established a Remuneration Committee in compliance with the Code.
The primary duties of the Remuneration Committee are to make recommendations to
the Board on the Company’s policy and structure for the remuneration of directors andsenior management and the establishment of a formal and transparent procedure fordeveloping policy on such remuneration. The recommendations of the Remuneration
Committee are then put forward to the Board for consideration and adoption, whereappropriate. The Remuneration Committee consists of two independent nonexecutive directors, Mr. Gian Franco Oliviero Mattei (Chairman) and Mr. Giancarlo
Forestieri, and one executive director, Mr. Carlo Mazzi. The Remuneration Committee
held two meetings on March 17, 2015 and May 26, 2015 with an attendance rate of
100% to recommend certain updates to the long term incentive plan, the proposed
allocation of the aggregate basic remuneration of the Board to the directors (subject tothe aggregate basic remuneration being approved by the shareholders at the general
meeting on May 26, 2015) and the additional remuneration of the directors vested
with special authorities (that is to the executive directors and members of the Board’s
committees).
Nomination Committee
The Company has established a Nomination Committee in compliance with the Code.
The primary duties of the Nomination Committee are to make recommendations to theBoard on the structure, size and composition of the Board itself, on the selection of
new Directors and on the succession plans for Directors. The Nomination Committee
also assesses the independence of independent non-executive directors. The
recommendation of the Nomination Committee are then put forward to the Board forconsideration and adoption, where appropriate. The Nomination Committee consists of
two independent non-executive directors, Mr. Gian Franco Oliviero Mattei (Chairman)
and Mr. Sing Cheong Liu, and one executive director, Mr. Carlo Mazzi. The Nomination
Committee held a meeting on March 26, 2015, with an attendance rate of 100%
to perform the annual review of the independence of independent non-executive
directors and to recommend the re-election of all the directors of the Company at its
shareholders’ general meeting held on May 26, 2015.

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Supervisory Body
In compliance with the Decree, the Company has established a supervisory bodywhose 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 independent non-executive
directors, qualified auditors, executives or external individuals. The supervisory bodyconsists of Mr. David Terracina (Chairman), Mr. Gian Franco Oliviero Mattei and Mr.
Franco Bertoli.
Board of Statutory Auditors
Under Italian law, the Company is required to have a board of statutory auditors,
appointed by the shareholders for a term of three financial year, with the authority tosupervise the Company on its compliance with the law and the By-laws, compliancewith the principles of proper management and, in particular, on the adequacy of theorganizational, administrative and accounting structure adopted by the Company andon its functioning.
As resolved at the shareholders general meeting of the Company on May 26, 2015,
the following persons were elected/re-elected as members of the board of statutory
auditors or alternate statutory auditors of the Company (as the case may be) for aterm of three financial years, ending on the date of the shareholders’ meeting called
to approve the financial statements for the last year of the board of statutory auditors’
office:Mr. Antonino Parisi as statutory auditor and Chairman of the board of statutory auditors;
Mr. Roberto Spada as statutory auditor;
Mr. David Terracina as statutory auditor;
Ms. Stefania Bettoni as alternate statutory auditor; andMr. Cristiano Proserpio as alternate statutory auditor.
Dividends
The Company may distribute dividends subject to the approval of the shareholders ina general shareholders’ meeting.
On March 27, 2015, the Board of the Company recommended the payment of a
final dividend for the financial year 2014 of Euro/cents 11 per share in the capital of
the Company, representing a total dividend of Euro 281,470,640. The Shareholders
approved this dividend at the shareholders’ general meeting of the Company held on
May 26, 2015. The dividend was paid on June 15, 2015.
No dividends have been declared or paid by the Company in respect of the Reviewed
Period.

28

PRADA Group

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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 2014 Annual Report is set out below:
Name of Director

ChangeMiuccia PRADA BIANCHI

Director’s fee and emolument to be received for the executive role as Chief Executive Officer
for each of the financial years 2015 (starting from the AGM date), 2016 and 2017: Euro
12,000,000 plus a variable incentive component depending on the Group’s profitability

Patrizio BERTELLI

Director’s fee and emolument to be received for the executive role as Chief Executive Officer for each of the financial years 2015 (starting from the AGM date), 2016 and 2017: Euro
12,000,000 plus a variable incentive component depending on the Group’s profitability

Donatello GALLI

Director’s fee for each of the financial years 2015 (starting from the AGM date), 2016 and2017: Euro 50,000

Alessandra COZZANI

Director’s fee for each of the financial years 2015 (starting from the AGM date), 2016 and2017: Euro 50,000

Gaetano MICCICHE’

Director’s fee for each of the financial years 2015 (starting from the AGM date), 2016 and2017: Euro 50,000
Appointed as Vice-Chairman of Banca IMI since July 2015
Ceased to be a board member of Pirelli & C. S.p.A. since August 2015

Gian Franco Oliviero MATTEI

Director’s fee for each of the financial years 2015 (starting from the AGM date), 2016 and2017: Euro 50,000

Giancarlo FORESTIERI

Director’s fee for each of the financial years 2015 (starting from the AGM date), 2016 and2017: Euro 50,000

Sing Cheong LIU

Director’s fee for each of the financial years 2015 (starting from the AGM date), 2016 and2017: Euro 50,000
Ceased to be a member of the Hong Kong Institute of Surveyors since 2015

Directors’ Securities Transactions
The Company has adopted written procedures governing Directors’ securities
transactions on terms no less exacting than the standard set out in the Model Codefor Securities Transactions by Directors of Listed Issuers as set out in Appendix 10of the Listing Rules (the “Model Code”). Relevant employees who are likely to bein possession of unpublished inside information of the Group are also subject tocompliance with written procedures. Specific written confirmations have been obtained
from each Director to confirm his/her compliance with the required standard set out inthe Model Code and the Company’s relevant procedures regarding directors’ securities
transactions for the Reviewed Period. There was no incident of non-compliance during
the Reviewed Period.
Purchase, Sale, or Redemption of the Company’s Listed Securities
Neither the Company nor any of its subsidiaries has purchased, sold or redeemed anyof the Company’s listed securities during the Reviewed Period.

PRADA Group

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Directors’ interests and short positions in securities
As at July 31, 2015, the Directors of the Company and their associates held thefollowing interests in the shares, underlying shares and debentures of the Company
and its associated corporations (within the meaning of Part XV of the Securities andFutures Ordinance (“SFO”)) as recorded in the register required to be kept by theCompany under Section 352 of the SFO or as otherwise notiﬁed to the Company andthe 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:

30

1.

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

2.

Ms. Miuccia Prada Bianchi, owns indirectly through Ludo S.r.l. 53.8% (comprisedof 438,460 ordinary shares and 100,000 preference shares) of the capital in
Bellatrix S.p.A., which in turn owns 65% (comprised of 1,650 ordinary shares and
300 preference shares) of the capital in Prada Holding S.p.A.. Ms. Miuccia Prada
Bianchi is therefore deemed under the SFO to be interested in all the sharesregistered in the name of Prada Holding S.p.A.. Ms. Miuccia Prada Bianchi is alsoa director of Prada Holding S.p.A., Bellatrix S.p.A. and Ludo S.r.l..

3.

Mr. Patrizio Bertelli owns, indirectly through PABE 1 S.r.l. 35% (comprised of 750
ordinary shares and 300 preference shares) of the capital in Prada Holding S.p.A..
Mr. Patrizio Bertelli is therefore deemed under the SFO to be interested in all theshares registered in the name of Prada Holding S.p.A.. Mr. Patrizio Bertelli is alsoa director of PABE 1 S.r.l.

PRADA Group

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The deemed interests of Ms. Miuccia Prada Bianchi and Mr. Patrizio Bertelli in theshares of the Company as at July 31, 2015, are summarized in the following chart:

Miuccia Prada
Bianchi

Patrizio Bertelli

100%

100%

Ludo S.r.l.
53.8%

PABE 1 S.r.l.

Bellatrix S.p.A.
65%

35%

Prada Holding S.p.A.
80%

PRADA S.p.A.

PRADA Group

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(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 S.p.A.

Ordinary Shares

1,650

Controlled Corporation

68.75%

Prada Holding S.p.A.

Preference Shares300

As above

50%

Prapar Corporation

Common Shares

50

As above

100%

EXHL Italia S.r.l.

Participation Quotas (Euro)

15,000As above

100%

MFH Munich Fashion
Holding GmbH

Registered Share1

As above

100%

PAC S.r.l.
(in liquidation)

Participation Quotas (Euro)30,600As above100%

Bellatrix S.p.A.

Ordinary Shares

438,460

As above

49.83%

Bellatrix S.p.A.

Preference Shares

100,000

As above

83.34%

Ludo S.r.l.

Ordinary Shares

100,311

Beneficial Owner100%

PRA 1 S.r.l.

Participation Quotas (Euro)

10,000Controlled Corporation

100%

C.I.D. – Cosmetics
International Distribu- Common Sharetion Corp.

1

As above100%

Fratelli Prada S.p.A.

Mr. Patrizio
Bertelli

734,754

As above73.48%KMF Investments S.r.l. Participation Quotas (Euro)

Ordinary Shares

10,000As above

100%

Maestrale Holding
S.r.l.

Ordinary Shares

10,200As above100%

Prada Holding S.p.A.

Ordinary Shares

750

Controlled corporation

31.25%

Prada Holding S.p.A.

Preference Shares300

As above

50%

Prapar Corporation

Common Shares

50

As above

100%

EXHL Italia S.r.l.

Participation Quotas (Euro)

15,000As above

100%

MFH Munich Fashion
Holding GmbH

Registered Share1

As above

100%

PAC S.r.l. (inliquidation)

Participation Quotas (Euro)30,600As above100%

C.I.D. – Cosmetics
International
Distribution Corp.

Common Share1

As above

100%

Maestrale Holding
S.r.l.

Ordinary Shares

10,200As above

100%

Save as disclosed above, as at July 31, 2015, none of the Directors of the Company or
their associates held any interest or short position in the shares, underlying shares anddebentures of the Company or any of its associated corporations (within the meaningof 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 the Stock Exchange pursuant
to the Model Code.

32

PRADA Group

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Substantial shareholders’ interests and short positions in securities
As at July 31, 2015, other than the interests of the Directors of the Company as
disclosed above, the following persons held interests in the shares or 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 S.p.A.

Legal and beneficial owner

2,046,470,760

80%Bellatrix S.p.A.

Interest of controlled corporation

2,046,470,76080%

Ludo S.r.l.

Interest of controlled corporation

2,046,470,760

80%

PABE 1 S.r.l.

Interest of controlled corporation

2,046,470,76080%Harris Associates L.P.

Investment manager

153,855,902

6.01%

OppenheimerFunds, Inc.

Investment manager

153,708,010

6.01%

Note:
Prada Holding S.p.A. owns approximately 80% of the issued capital in the Company.
As Ludo S.r.l. owns 53.8% of Bellatrix S.p.A. which in turn owns 65% of Prada Holding
S.p.A. and PABE 1 S.r.l. owns 35% of Prada Holding S.p.A., Bellatrix S.p.A., Ludo S.r.l.
and PABE 1 S.r.l. are all deemed to be interested in the 2,046,470,760 shares held by
Prada Holding S.p.A..
Save as disclosed above, the Company had not been notified of any short positions being
held by any substantial shareholder in the shares or underlying shares of the Company
as at July 31, 2015.

PRADA Group

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34

PRADA Group

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Interim condensed consolidated financial statements

PRADA Group

Prada Group-Interim Financial Report 2oct 2015.indd 35

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35

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

Note

July 312015(unaudited)

January 31
2015(audited)

AssetsCurrent assets
Cash and cash equivalents

6549,943

708,966

Trade receivables, net

7347,493346,284
654,545

Inventories, net

8778,907

Derivative financial instruments – current

9

8,025

6,287

Receivables from, and advance payments to, related parties, current

10

7,843

3,240

Other current assets

11

Total current assets

193,057

180,633

1,885,268

1,899,955

Non-current assets
Property, plant and equipment

12

1,520,168

1,474,218

Intangible assets

13

946,936

943,304

Associated undertakings

14

25,76930,529Deferred tax assets

32

296,606

280,983
91,353

Other non-current assets

15

101,580

Derivative financial instruments - non current

9

1,408

1,106

Receivables from, and advance payments to, related parties, non-current

10

19,765

17,429Total non-current assets

2,912,232

2,838,922

Total Assets

4,797,500

4,738,877

263,335

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

16379,153

Payables to related parties – current

17

3,124

3,083

Trade payables

18

378,826

437,420

Tax payables

19

105,510

133,914

Derivative financial instruments - current

937,62756,772

Obligations under finance leases - current
Other current liabilities

20

Total current liabilities

7

21

147,423

220,480

1,051,670

1,115,025
255,203

Non-current liabilities
Long-term financial payables

21

428,829

Post-employment benefits

22

65,90485,754

Provision for risks and charges

23

67,85963,695

Deferred tax liabilities

32

40,811

41,634

Other non-current liabilities

24

153,539

128,752

Derivative financial instruments non-current

910,504

17,283

Payables to related parties – non-current

17-

13,384

767,446

605,705

1,819,116

1,720,730

Total non-current liabilities
Total Liabilities
Share capital

255,882

255,882

Other reserves

2,345,464

2,163,129

Translation reserve

170,970

130,996

Net income for the period

188,593450,730

Total Shareholders’ Equity – Group25

2,960,909

3,000,737

Shareholders’ Equity – Non-controlling interests

26

17,475

17,4104,797,500

4,738,877

Total Liabilities and Shareholders’ Equity
Net current assets
Total assets less current liabilities

36

PRADA Group

Prada Group-Interim Financial Report 2oct 2015.indd 36

833,598

784,930

3,745,830

3,623,852

Interim Financial Report 2015 - Interim condensed consolidated financial statements

05/10/15 10:54

Consolidated income statementNote

six months
ended
July 312015(unaudited)%

six months
ended
July 312014(unaudited)%

Net revenues

27

1,824,433

100.0%

1,751,315

100.0%

Cost of goods sold28

(498,520)-27.3%(493,715)-28.2%

1,325,913

72.7%

1,257,600

71.8%(1,032,699)-56.6%(884,442)-50.5%

293,21416.1%

373,158

21.3%(amounts in thousands of Euro)

Gross margin
Operating expenses

29

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

30(9,073)-0.5%(9,492)-0.5%

Dividends from investments

31

1,562

0.1%

455

-

285,703

15.7%

364,12120.8%(94,139)-5.2%(113,075)-6.5%

191,56410.5%

251,046

14.3%

2,971

0.2%

6,198

0.3%

188,593

10.3%

244,848

14.0%

Income before taxation
Taxation

32

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

26

Net income – Group
Basic and diluted earnings per share (in Euro pershare)PRADA Group

Prada Group-Interim Financial Report 2oct 2015.indd 37

33

0.074

0.096

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37

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

Income before taxation

six months
ended
July 312015(unaudited)

six months
ended
July 312014(unaudited)

285,703

364,121

145,802118,367

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

1,037

1,310

Non-monetary financial (income)/expenses(1,985)

14,844

Other non-monetary charges

3,380(2,481)(44,342)(14,981)(654)(63,655)

Inventories, net(119,316)(82,308)

Trade payables(61,319)

54,490

Other current assets and liabilities(17,705)(13,470)

Cash flows from operating activities

190,601

376,236

Interest paid, net – third parties(6,869)(6,106)(120,358)(160,944)

63,374

209,186(220,423)

Balance Sheet changes
Other non-current assets and liabilities
Trade receivables, net

Taxes paid
Net cash flows from operating activities
Purchases of property, plant and equipment and intangible assets(239,496)

Disposals of property, plant and equipment and intangible assets

2,806

-

Proceeds of investments held for sale

1,562

454

Transaction with non-controlling interests(761)(7,701)

Net cash flows utilized by investing activities(235,889)(227,670)

Dividends paid to shareholders of PRADA spa(281,471)(281,471)

Dividends paid to non-controlling shareholders(3,229)(6,763)

Repayment of loans to related companies

-

(659)

Repayment of loans by related companies

-

2,000

New loans to related companies--

Repayment of short term portion of long term borrowings - third parties(21,376)(23,379)

Arrangement of long-term borrowings – third parties

192,346

76,480Change in short-term borrowings – third parties

115,223

169,364

Share capital increases by non-controlling shareholders of subsidiaries
Cash flows generated/(utilized) by financing activities
Change in cash and cash equivalents, net of bank overdrafts

1,589(62,839)(170,613)(81,323)

Foreign exchange differences

11,653

9,048

Opening cash and cash equivalents, net of bank overdraft

708,873

568,299

Closing cash and cash equivalents, net of bank overdraft549,913496,024

Cash and cash equivalents

549,943

510,591(30)(14,567)

549,913496,024

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

38

409
1,902

PRADA Group

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Statement of changes in consolidated Shareholders’ Equity(amounts in thousands of Euro, except for number of shares)(amounts inthousandsof Euro)Number ofsharesShare
CapitalTranslaSharetion premium
Reserve
reserve

CashFair Valueflow Actuarial Available
hedge Reserve
for salereserve
Reserve

EquityTotal
Other
Reserves

Net
income1,446,923 1,853,325

627,785

2,687,554

627,785 (627,785)

-

Other
reserves

Balance atJanuary 31, 2014
(audited)

2,558,824,000

Allocation of2013 net income

-

-

-

-

-

-

-

627,785

Dividends

-

-

-

-

-

-

-

(281,471) (281,471)

Acquisition ofMarchesi Angelo
srl

-

-

-

-

-

-

-

(2,459)

Capital injection
in subsidiaries

-

-

-

-

-

-

-

Comprehensive
income for the six
months (recyclable
to P&L)--

22,693-(6,844)-Comprehensive
income for thesix months (notrecyclable to P&L)

-

-

-

-

-

255,882 (26,745)

410,047

Balance at
July 31, 2014
(unaudited)

2,558,824,000

255,882 (49,438)

410,047

3,699 (11,452)

4,108

EquityNonattributable
controllingto owners ofinterests
Group

Total
Equity13,986 2,701,540

-

-

-

(281,471)(6,763) (288,234)(2,459)-(2,459)107(2,352)

-

-

-

-

1,589

1,589

4,531

-

(2,313)244,848

265,2286,558

271,786(1,929)--(1,929)-(1,929)-(1,929)(3,145) (13,381)

8,639

1,790,778 2,192,938

244,848

2,666,923

15,477 2,682,400

Acquisition ofMarchesi Angelo
srl

-

-

-

-

-

-

-

(7)

(7)

-

(7)

-

(7)

Dividends

-

-

-

-

-

-

-

-

-

-

-

(2,615)(2,615)

Capital injection
in subsidiaries

-

-

-

-

-

-

-

-

-

-

-

536

536

Comprehensive
income for the six
months (recyclable
to P&L)-- 157,741- (32,178)

-

2,476

-

(29,702)205,882

333,9214,015

337,936

Comprehensive
income for thesix months (notrecyclable to P&L)

-

-

-

(100)

-

-

(100)

-

(100)

(3)

(103)

Balance atJanuary 31, 2015
(audited)

2,558,824,000

410,047 (35,323) (13,481)

11,115

1,790,771 2,163,129

450,730

3,000,737

Allocation of2014 net income

-

-

-

-

-

-

-

450,730

450,730 (450,730)-

Dividends

-

-

-

-

-

-

-

(281,471) (281,471)

Transactions with
non-controllinginterests

-

-

-

-

-

-

-

(719)

Capital injection
in subsidiaries

-

-

-

-

-

-

-

Comprehensive
income for the six
months (recyclable
to P&L)--39,974-

16,044-Comprehensive
income for thesix months (notrecyclable to P&L)

-

-

-

-

-

Balance at
July 31, 2015
(unaudited)

PRADA Group

Prada Group-Interim Financial Report 2oct 2015.indd 39

2,558,824,000-

255,882 130,996

255,882 170,970-

17,410 3,018,147

-

-

-

(281,471)

(719)

-

(719)

(39)

(758)

-

-

-

-

409

409

(3,571)-

12,473

188,593

241,040

2,923

243,963

1,322

-

-

1,322

-

1,322

-

1,322

410,047 (19,279) (12,159)

7,544

1,959,311 2,345,464

188,5932,960,909

Interim Financial Report 2015 - Interim condensed consolidated financial statements(3,228) (284,699)

17,475 2,978,384

39

05/10/15 10:54

Statement of consolidated comprehensive income(amounts in thousands of Euro)Net income for the period – ConsolidatedA)

six months
ended
July 312015(unaudited)

twelve months
ended
January 31
2015(audited)six months
ended
July 312014(unaudited)

191,564

459,218

251,046

39,927

182,519

23,053---39,927

182,519

23,053(9,279)Items recyclable to P&L:

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

21,734(52,817)

Tax impact(5,690)13,7952,435

Change in Cash Flow Hedge reserve less tax impact

16,044(39,022)(6,844)

Change in Fair Value reserve(4,761)

9,343

6,041

Tax impact

1,190(2,336)(1,510)Change in Fair Value reserve less tax impact(3,571)

7,007

4,531

(2,033)B)

Item not recyclable to P&L:

Change in Actuarial reserve

1,823(2,338)Tax impact

(501)

306

104

Change in Actuarial reserve less tax impact

1,322(2,032)(1,929)245,286

607,690

269,857

2,923

10,5706,558

242,363

597,120

263,299

Consolidated comprehensive income for the period
Comprehensive income for the period – Non-controlling Interests
Comprehensive income for the period – GroupThe accounting policies and the notes constitute an integral part of the Interim
condensed consolidated financial statements.

40

PRADA Group

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Notes to the Interim condensed consolidated financial statements

PRADA Group

Prada Group-Interim Financial Report 2oct 2015.indd 41

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41

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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. Moreover, in 2014, Prada acquired
the 80% of Angelo Marchesi srl, owners of the historic Milanese pastry shop foundedin 1824. The Group operates, under licensing agreements, in the eyewear andfragrances sectors. Its products are sold in 70 countries worldwide through a networkthat includes 605 Directly Operated Stores (DOS) at July 31, 2015, 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 the date of these unaudited Interim
condensed consolidated financial statements, 80% of the share capital is owned by
PRADA Holding spa, a company domiciled in Italy, while the remaining shares were
floating on the Main Board of the Hong Kong Stock Exchange.
The Interim condensed consolidated financial statements were approved andauthorized for issue by the Board of Directors of PRADA spa on September 15, 2015.

2.

Basis of preparation
The 2015 Interim condensed consolidated financial statements of the PRADA Groupfor the six months ended July 31, 2015, including the “Consolidated statementof financial position”, the “Consolidated income statement”, the “Statement ofconsolidated comprehensive income”, the “Consolidated statement of cash flows”,
the “Statement of changes in consolidated shareholders’ equity” and the “Notes
to the Interim condensed consolidated financial statements” have been prepared inaccordance 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, 2015, 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 Consolidated financial statements, there were nodifferences between IFRS as endorsed by the European Union and applicable to thePrada 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 Group has prepared the Interim condensed consolidated statement of financial
position presenting separately current and non-current assets and liabilities. All thedetails needed for an accurate and complete information are provided in the relevantNotes. 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.
The Consolidated financial statements have been prepared on a going concern basis
and are presented in Euro which is also the functional currency of PRADA spa.

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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, 2015
The following new IFRS and amendments to existing IFRS have been endorsed by theEuropean Union and are applicable to the Prada Group effective from February 1, 2015.
These changes do not have any significant impact to the Group as of the date of these
consolidated financial statements:––

Annual improvements to IFRS (2011–2013 Cycle). Such improvements impacted:–– “IFRS 1 First-time Adoption of IFRS”, clarifying the meaning of “effective
IFRS”;–– “IFRS 3 Business Combinations”, clarifying that the IFRS does not apply to theaccounting for the formation of a joint arrangement;–– “IFRS 13 Fair Value Measurement”, clarifying the application of the IFRS tofinancial assets and financial liabilities with offsetting positions in market risks
or counterparty credit risk;–– “IAS 40 Investment Property”, clarifying the interrelationship between IFRS 3
and IAS 40 when classifying property as investment property or owner-occupied
property.

––

Amendments to “IAS 19 Employee Benefits”. IASB has amended therequirements in IAS 19 for contributions from employees or third parties thatare linked to a service. If the amount of the contributions is independent of thenumber of years of service, an entity is permitted to recognize such contributions
as a reduction in the service cost in the period in which the related service isrendered, instead of attributing the contributions to the periods of service. If theamount of the contributions is dependent on the number of years of service, an
entity is required to attribute those contributions to periods of service using thesame attribution method required by paragraph 70 of IAS 19 for the gross benefit(i.e. either using the plan’s contribution formula or on a straight-line basis). An
entity shall apply those amendments for annual periods beginning on or after July
1, 2014, retrospectively in accordance with “IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors”. Earlier application is permitted. If an entity
applies those amendments for an earlier period, it shall disclose that fact.

––

Annual improvements to IFRS (2010–2012 Cycle). Such improvements, effective
for annual periods beginning on or after July 1, 2014, impacted:–– “IFRS 2 Share-based Payment”, amending the definition of vesting condition;–– “IFRS 3 Business Combinations”, amending the accounting for contingent
consideration in a business combination;–– “IFRS 8 Operating Segments”, requesting more disclosure when aggregating
operating segments and requiring the reconciliation of the total of the reportablesegments’ assets to the entity’s assets;–– “IFRS 13 Fair Value Measurement”, clarifying the impact of the standard on themeasurement of short-term receivables and payables;–– “IAS 16 Property, Plant and Equipment”, amending the revaluation method;–– “IAS 24 Related Party Disclosure”, amending the definition of key management
personnel;–– “IAS 38 Intangible Assets”, amending the revaluation method.

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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, 2016
None.
New standards and amendments issued by the IASB, but not yet endorsed by
the European Union

44––“IFRS 9 Financial instruments”. This Standard will replace “IAS 39 Financial
Instruments: Recognition and Measurement” in its entirety. An entity shall apply
this Standard for annual periods beginning on or after January 1, 2018, with earlier
application permitted. Such replacement project has been divided into three main
phases, namely the measurement of financial assets and financial liabilities, theimpairment methodology and the hedge accounting.

––“IFRS 14 Regulatory Deferral Accounts”. This Standard, effective for annual
periods beginning on or after January 1, 2016, permits an entity that adopts
IFRS to continue to use, in its first and subsequent IFRS financial statements, its
previous GAAP accounting policies for the recognition, measurement, impairment
and de-recognition of regulatory deferral account balances without specificallyconsidering the requirements of paragraph 11 of IAS 8. This new IFRS describes
regulatory deferral account balances as amounts of expense or income that would
not be recognized as assets or liabilities in accordance with other Standards, butthat qualify to be deferred in accordance with this Standard because the amountis included, or is expected to be included, by the rate regulator in establishing theprice that an entity can charge to customers for rate-regulated goods or services.

––“IFRS 15 Revenue from contracts with Customers”. The core principle of IFRS
15, effective for annual periods beginning on or after January 1, 2017 (earlier
application is permitted), is that an entity recognizes revenue to depict thetransfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those
goods or services. An entity should recognize revenue in accordance with thatcore principle by applying the following steps: identify the contract, identify theperformance obligations in the contract, determine the transaction price, allocate
the transaction price to the performance obligations in the contract and recognize
revenue when the entity satisfies a performance obligation.

––

Amendment to IAS 16 and IAS 38 “Clarification of Acceptable Methods ofDepreciation and Amortization”. The IASB amended “IAS 16 Property, Plant
and Equipment” and “IAS 38 Intangible assets” clarifying that, even though
the selection of an amortisation methodology involves the use of judgement, arevenue-based method is not considered to be an appropriate manifestation of
consumption for depreciating an asset. An entity shall apply those amendments
prospectively for annual periods beginning on or after January 1, 2016.

––

Amendment to “IFRS 11 Accounting for Acquisitions of Interests in Joint
Operations”. This amendment requires the acquirer of an interest in a joint
operation in which the activity constitutes a business, as defined in “IFRS 3
Business Combinations”, to apply all of the principles on business combinations
accounting in IFRS 3 and other IFRSs except for those principles that conflictwith the guidance in “IFRS 11 Joint Arrangements“. In addition, the acquirer
shall disclose the information required by IFRS 3 and other IFRSs for businesscombinations. An entity shall apply that amendment in annual periods beginningon or after January 1, 2016.

––

Amendments to IFRS 10, IFRS 12 and IAS 28. “IFRS 10 Consolidated Financial

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Statements” has been amended to confirm that the exemption from preparing
consolidated financial statements set out in paragraph 4(a) of IFRS 10 is available
to a parent entity that is a subsidiary of an investment entity. This because aninvestment entity may measure all of its subsidiaries at fair value through profit orloss in accordance with paragraph 31 of IFRS 10. Those amendments are applicablefor annual periods beginning on or after January 1, 2016. Earlier application ispermitted, providing disclosure.
––

Disclosure Initiative: Amendments to “IAS 1 Presentation of Financial Statements”.
This project is part of the IASB's overall disclosure initiative and it considers
proposals such as:–– adding an explanation in IAS 1 similar to more recent standards explaining that
too much detail can obscure useful information;–– clarifying that materiality applies to the whole financial statements and that
information which is not material need not be presented in the primary financial
statements or disclosed in the notes;–– clarifying that some disclosures specified in standards are simply not importantenough to justify separate disclosure for a particular entity;–– making it clear that preparers should exercise professional judgment inpresenting their financial reports;–– remove the perception of a “normal order of presentation” of financial
statements, making it easier for entities to provide more contextual information;–– reducing restrictions on how accounting policies should be presented, allowing
important accounting policies to be given greater prominence in financial
reports;–– adding additional explanations with examples of how IAS 1 requirements aredesigned to shape financial statements instead of specifying precise terms thatmust be used, including whether subtotals of IFRS numbers such as earnings
before interest and tax (EBIT) and earnings before interest, tax, depreciation
and amortisation (EBITDA) should be acknowledged in IAS 1;–– adding a requirement that entities disclose and explain their net debt
reconciliation.

The amendment will be applicable for annual periods beginning on or after January 1,
2016. Earlier application is permitted.
––

Annual Improvements to IFRSs (2012–2014 Cycle). Such improvements, effective
for annual periods beginning on or after January 1, 2016, impacted:–– “IFRS 5 Non-current Assets Held for Sale and Discontinued Operations”,
changing the methods of disposal.
–– “IFRS 7 Financial Instruments: Disclosures”, applying disclosure requirements
to a servicing contract.
–– “IAS 19 Employee Benefits”, clarifying the discount rate to be used for actuarial
assumption.
–– “IAS 34 Interim Financial Reporting”.

––

Amendments to IFRS 10 and IAS 28: “Sale or Contribution of Assets between
an Investor and its Associate or Joint Venture”. The amendments address a
conflict between the requirements of “IAS 28 Investments in Associates andJoint Ventures” and “IFRS 10 Consolidated Financial Statements” and clarify
that in a transaction involving an associate or joint venture the extent of gain orloss recognition depends on whether the assets sold or contributed constitute abusiness. They are effective for annual periods beginning on or after January 1,
2016, with earlier application being permitted.

––

Amendments to “IAS 27 Separate Financial Statements”. The amendments
reinstate the equity method as an accounting option for investments in subsidiaries,
joint ventures and associates in an entity's separate financial statements. The

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amendments are effective for annual periods beginning on or after January 1,
2016, with earlier application being permitted.
As at the date these Consolidated financial statements were prepared, the European
Union has not completed yet the endorsement of the new standards and amendments
as described above.
4.

Acquisitions and incorporation of companies
On February 1, 2015, Space USA Corp was incorporated into PRADA USA Corp andSpace HK ltd was amalgamated with PRADA Asia Pacific ltd.
On March 31, 2015, the company PCS sas changed its corporate name into Tannerie
Limoges sas.
On April 22, 2015, the company Montenapoleone 9 srl was incorporated by PRADA spa
and Marchesi Angelo srl, 90% and 10% respectively, in order to develop the businessactivities of the Marchesi brand.
On May 19, 2015, PRADA spa established PRADA Denmark aps with the aim todevelop commercial activities in Denmark.
On May 19, 2015, the company Car Shoe UK limited was liquidated.
On June 5, 2015, the deregistration of Car Shoe Hong Kong ltd was completed.

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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.
Detailed information on net revenues by brand, geographical area, product anddistribution channel, as well as non-current assets by geographical area are provided
below. Information on net revenues is also reported in the Financial review where it isaccompanied by further comments.

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Net sales analysis
six months
ended
July 312015(unaudited)%

six months
ended
July 312014(unaudited)%% changeItaly

286,21015.9%

286,808

16.6%

-0.2%

Europe379,178

21.0%

361,539

20.9%

4.9%

Americas

264,91214.7%

233,452

13.5%

13.5%

Asia Pacific

610,26633.9%

619,221

35.8%

-1.4%

Japan

195,90210.9%

175,262

10.1%

11.8%

Middle East

61,3793.4%

51,930

3.0%

18.2%

Other countries

3,509

0.2%

2,688

0.1%

30.5%

1,801,356

100.0%

1,730,900

100.0%

4.1%

Prada

1,461,493

81.2%

1,431,114

82.7%

2.1%

Miu Miu

293,91916.3%

256,031

14.8%

14.8%

Church's

38,3792.1%

35,5602.0%

7.9%

Car Shoe

5,514

0.3%

6,516

0.4%

-15.4%(amounts in thousands of Euro)Net sales by geographical area

Total
Net sales by brand

Other

2,051

0.1%

1,679

0.1%

22.2%

Total

1,801,356

100.0%

1,730,900

100.0%

4.1%

Net sales by product line
Clothing

288,22916.0%

275,779

15.9%

4.5%

1,107,761

61.5%

1,110,715

64.2%

-0.3%

Footwear

370,41520.6%

314,423

18.2%

17.8%

Other

34,951

1.9%

29,983

1.7%

16.6%

Total

1,801,356

100.0%

1,730,900

100.0%

4.1%

1,552,393

86.2%

1,442,161

83.3%

7.6%

248,96313.8%

288,73916.7%-13.8%

Total

1,801,356

100.0%

1,730,900

100.0%

4.1%

Net sales

1,801,356

98.7%

1,730,900

98.8%

4.1%

Royalties

23,077

1.3%

20,415

1.2%

13.0%

1,824,433

100.0%

1,751,315

100.0%

4.2%

Leather goods

Net sales by distribution channelDOS
Independent customers and franchises

Total net revenues

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Geographical information
The following table reports the carrying amount of the Group’s non-current assets bygeographical area, as requested by “IFRS 8 Operating Segments” for entities, like thePrada Group, that have a single reportable segment.
(amounts in thousands of Euro)

July 312015(unaudited)

January 31
2015(audited)

Italy

795,184

745,492

Europe1,166,323

1,141,285

Americas221,772

220,495

Asia Pacific294,926

299,947

Japan

95,931

108,707

Middle East

31,88832,474

Other countries

5,511

5,919

2,611,535

2,554,319

Total

The total amount of Euro 2,611.5 million (Euro 2,554 million at January 31, 2015) relates
to the Group’s non-current assets excluding, as requested by IFRS 8, those relating tofinancial instruments, deferred tax assets and surplus arising from a pension benefit
scheme.

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6.

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

July 312015(unaudited)

January 31
2015(audited)

Cash on hand

37,90744,470Bank deposit accounts

328,191

415,481

Bank current accounts

183,845

249,015

Total

549,943

708,966

At July 31, 2015, bank current accounts and deposit accounts generated interest
income of between 0% and 3.10% per annum (between 0% and 3.25% at January
31, 2015).
Bank deposit accounts and bank current accounts
Bank deposit accounts are broken down by currency as follows:(amounts in thousands of Euro)

July 312015(unaudited)

January 31
2015(audited)Euro

20,000-US Dollar

38,06037,366

Korean Won

3,883

44,924

Hong Kong Dollar

257,721319,387

Other currencies

8,527

13,804

328,191

415,481

Total bank deposit accounts

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 bank;these investments are always short-term in nature.
Bank current accounts are broken down by currency as follows:
July 312015(unaudited)

January 31
2015(audited)Euro

66,783

127,917

US Dollar

57,46751,074

Korean Won

962

3,924

Hong Kong Dollar

4,409

5,465

GB Pound

4,709

5,420

Other currencies

49,51555,215

Total bank current accounts

183,845

249,015(amounts in thousands of Euro)The Group maintains that there is no significant risk regarding bank current accounts astheir use is strictly connected with the business operations and corporate processes
and, as a result, the number of parties involved is fragmented.

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7.

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

July 312015(unaudited)

January 31
2015(audited)

Trade receivables – third parties

322,342

317,147

Allowance for bad and doubtful debts(7,907)(7,784)

Trade receivables – related parties

33,05836,921

Total

347,493346,284

Trade receivables from related parties are made up of receivables due from Fratelli
Prada spa, a retail company owned by the majority shareholders of parent company
PRADA Holding spa, for Euro 24.6 million (Euro 29.3 million at January 31, 2015) andrelating to the sale of finished products, services recharges and royalties as provided by
the franchising agreement signed with the said related party. A complete breakdownof trade receivables from related parties is provided in Note 36.
The allowance for doubtful accounts was determined on a specific basis considering all
information available at the date the financial statements were prepared. It is revised
periodically to bring receivables as close as possible to their fair value.
Movements during the period were as follows:(amounts in thousands of Euro)

July 312015(unaudited)

January 31
2015(audited)

7,784

10,432

Opening balance (audited)
Change in scope of consolidation
Exchange differences

-

17

104

463

Increases

112

109

Uses

(58)

(3,173)

Reversals

(35)

(64)

7,907

7,784

Closing balance (unaudited)

The following table contains a summary of total receivables before the allowance for
doubtful debts at the reporting date:July 312015(unaudited)

Current

Trade receivables

355,400

Total(amounts in thousands of Euro)

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

279,619

28,60813,528

9,721

2,296

21,628355,400

279,619

28,60813,528

9,721

2,296

21,628January 31
2015(audited)

Current

1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

Trade receivables

354,068

283,878

28,279

11,202

10,0293,840

16,840

Total

354,068

283,878

28,279

11,202

10,0293,840

16,840(amounts in thousands of Euro)PRADA Group

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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 312015(unaudited)

Current

Trade receivables less allowancefor doubtful accounts

347,493

Total

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

278,822

28,60813,528

9,721

2,296

14,518347,493

278,822

28,60813,528

9,721

2,296

14,518(amounts in thousands of Euro)

January 31
2015(audited)

Current

Trade receivables less allowancefor doubtful accounts

346,284

Total

346,284

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

283,137

28,279

11,202

10,029

3,840

9,797

283,137

28,279

11,202

10,029

3,840

9,797

At the reporting date, the expected loss on doubtful receivables was fully covered by
the allowance for doubtful receivables.
8.

Inventories, net
Inventories are analyzed as follows:
July 312015(unaudited)

January 31
2015(audited)

Raw materials

128,806

106,843

Work in progress

31,17640,786

Finished products

683,060

571,115

Allowance for obsolete and slow moving inventories(64,135)(64,199)

Total

778,907654,545(amounts in thousands of Euro)

The increase in inventories was generally due to the different approach to replenishment
and shipping which started in the last few months of 2014 and to the additional 11
DOS (net) since January 31, 2015.
Movements on the allowance for obsolete and slow moving inventories are analyzed
as follows:(amounts in thousands of Euro)

Balance at January 31, 2015 (audited)Rawmaterials

Finished
Products

Total

26,79837,40164,199Exchange differences

6

6

12

Utilization

-

(76)

(76)

26,80437,33164,135

Balance at July 31, 2015 (unaudited)

The allowance for obsolete and slow moving inventories has been adjusted to bringthe value of inventories into line with estimated realizable amount.

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9.

Derivative financial instruments: assets and liabilities
Derivative financial instruments: assets and liabilities, current portion and non-current
portion.
July 312015(unaudited)

January 31
2015(audited)

Financial assets regarding derivative instruments – current

8,025

6,287

Financial assets regarding derivative instruments – non-current

1,408

1,106

Financial liabilities regarding derivative instruments – current(37,627)(56,772)

Financial liabilities regarding derivative instruments – non-current(10,504)(17,283)

Net carrying amount – current and non-current(38,698)(66,662)(amounts in thousands of Euro)The net carrying amount of derivative financial instruments, current and non-current
taken together, consists of the following:(amounts in thousands of Euro)

Forward contracts

July 312015(unaudited)

January 31
2015(audited)

IFRS7
Category

9,250

7,355

Level II

Options

31

38

Level IIInterest rate swaps

152-

Level II

Positive fair value

9,433

7,393

Forward contracts(17,182)(26,901)

Level II

Options(22,357)(34,287)

Level IIInterest rate swaps(8,592)(12,867)

Level II

Negative fair value(48,131)(74,055)

Net carrying amount – current and non-current(38,698)(66,662)

All of the above derivative instruments are qualified as Level II of the fair value hierarchy
proposed by IFRS 7. The Group has not entered into any derivative contracts that may
be qualified as Level I or III.
The fair values of derivatives arranged to hedge interest rate risks (IRS) and ofderivatives arranged to hedge exchange rate risks (forward contracts and options) havebeen determined utilizing one of the valuation platforms in most widespread use on
the financial market and are based on the interest rate curves and on spot and forward
exchange rates at the reporting date.
The Group entered into the financial derivative contracts in the course of its risk
management activities in order to hedge financial risks connected with exchange andinterest rate fluctuations.
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 subsidiaries) of identified cash flows. Expected future cash
flows mainly regard the collection of trade receivables, settlement of trade payables
and financial cash flows. The most important currencies in terms of hedged amounts
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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, 2015) are as stated below.
Contracts in place at July 31, 2015, to hedge projected future trade cash flows.
Options

Forward sale
contracts (*)

Forwardpurchase
contracts (*)

July 312015(unaudited)Hong Kong Dollar

94,6705,954-

100,624

US Dollar

77,961--

77,961Chinese Renminbi

49,631

22,354(16,593)

55,392(amounts in thousands of Euro)

Currency

Japanese Yen

4,988

64,163-

69,151

GB Pound

25,067

26,701(4,616)47,152
41,026

Korean Won-

41,026-

Swiss Franc-

10,118

(284)

9,834

6,577

42,609(27,549)

21,637

258,894

212,925(49,042)422,777

Other currencies
Total(*) Positive figures represent forward sales, negative figures represent forward purchases of currency.

Contracts in place at July 31, 2015, to hedge projected future financial cash flows.
(amounts in thousands of Euro)

Options

Forward sale
contracts (*)

Forwardpurchase
contracts (*)

July 312015(unaudited)

Currency
Swiss Franc

-

64,080(11,074)

53,005

Brazilian Real-23,476-23,476

GB Pound-

17,043(1,619)15,424

Japanese Yen-

26,698(8,802)

17,896US Dollar

-

3,647

(57,901)(54,254)

Other-

15,145(4,488)10,658

Total-

150,089(83,884)

66,205(*) Positive figures represent forward sales, negative figures represent forward purchases of currency.

All of the contracts in place at July 31, 2015, are due to mature within 12 months,
except for several forward contracts to hedge future financial cash flows which mature
after July 31, 2016, and whose notional net amount is Euro 78.3 million (forward sale
contracts of Euro 79.9 million and forward purchase contracts of Euro 1.6 million).

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Contracts in place at January 31, 2015, to hedge projected future trade cash flows.
Forwardpurchase
contracts (*)

January 31
2015(audited)

Options

Forward sale
contracts (*)

Hong Kong Dollar

182,117

28,661-

210,778

US Dollar

197,258-(59,651)

137,607(amounts in thousands of Euro)

Currency

Chinese Renminbi

99,237

33,692(24,349)

108,580

Japanese Yen

22,017

91,824(5,493)

108,348

GB Pound55,252

38,610(11,290)

82,572-

71,430-71,430

Korean Won-

18,283(8,063)

10,220

Other currencies

Swiss Franc

17,74972,756(24,533)

65,972

Total

573,630

355,256(133,379)

795,507(*) Positive figures represent forward sales, negative figures represent forward purchases of currency

Contracts in place as at January 31, 2015, to hedge projected future financial cash
flows.
(amounts in thousands of Euro)

Options

Forward sale
contracts (*)

Forwardpurchase
contracts (*)

January 31
2015(audited)

Currency
Swiss Franc

-

66,979(15,082)

51,897

Brazilian Real-25,138-25,138

GB Pound-

22,633(1,518)

21,115

Japanese Yen-

18,335-

18,335US Dollar

-

3,538

(56,172)(52,634)

Other-

10,934-

10,934

Total-

147,557(72,772)

74,785(*) Positive figures represent forward sales, negative figures represent forward purchases of currency

The contracts in place at January 31, 2015, expired during the six month period, except
for forward sale contracts and options with maturity date after July 31, 2015, andtotaling a notional net amount of Euro 466.6 million (forward sale contracts of Euro
282.7 million, forward purchase contract of Euro 75 million and option contract of Euro
258.9 million).
All contracts in place at the reporting date were entered into with leading financial
institutions and the Group does 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, 2015, and January 31, 2015, are summarized
as follows:
Interest Rate Swap (IRS) Agreement
Contract

Currency

Notional
amountHedged loan
fair value
Maturity
July 31
date
2015(unaudited)

Interest
rate

Currency

Lending
institution

AmountExpiry(amounts inthousandsof Euro)
IRS

Euro/000

55,0001.457%

23/05/2030(2,160)Euro/000IntesaSanpaolo

55,00005/2030

IRS

Euro/000

60,0000.105%

09/03/2019

64

Euro/000

Unicredit

60,00003/2019IRS

GBP/000

59,4002.828%

31/01/2029(5,921)

GBP/000

Unicredit

59,40001/2029

IRS

Yen/000

1,000,000

1.875%

31/03/2017(93)

Yen/000

Mizuho1,000,000

03/2017

IRS

Yen/000

3,000,000

1.369%

30/03/2020(330)

Yen/000

Mizuho3,000,000

03/2020

Total(8,440)Interest Rate Swap (IRS) Agreement

Contract

Currency

Notional
amountHedged loan
fair value
Maturity January 31
date
2015
(audited)

Interest
rate

Lending
institution

AmountExpiryEuro/000

MPS

600

07/201555,00005/2030

Currency(amounts inthousandsof Euro)
IRS

Euro/000600

IRS

Euro/000

55,000IRS

GBP/000

60,000

IRS

Yen/000

1,250,000

2.210%

01/07/2015(6)

23/05/2030(2,959)Euro/000IntesaSanpaolo

2.828%

31/01/2029(9,764)

GBP/000

Unicredit

60,00001/2029

1.875%

31/03/2017(138)

Yen/000

Mizuho1,250,000

03/20171.457%

Total(12,867)

The IRS agreements convert the variable interest rates applying to a series of loans
into fixed interest rates. These agreements have been arranged with leading financial
institutions and the Group does not expect them to default.
Movements on the cash flow hedge reserve included in Group shareholders’ equity,
before tax effects, since February 1, 2014, may be analyzed as follows:(amounts in thousands of Euro)
Balance at January 31, 2014 (audited)
Change in the translation reserve

5,155
32

Change in fair value, recognized in Equity(78,233)

Change in fair value, charged to Income Statement

25,416

Balance at January 31, 2015 (audited)(47,630)

Change in the translation reserve

1

Change in fair value, recognized in Equity(14,605)

Change in fair value, charged to Income Statement

36,339Balance at July 31, 2015 (unaudited)(25,895)

Changes in the reserve that are charged to the Income Statement are recorded underInterest and other financial income/(expense), net or as operating income and expenses

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depending on the nature of the underlying.
10. Receivables from, and advance payments to, related parties, current and noncurrent
Receivables from and advances to parent company and other related parties aredetailed below:(amounts in thousands of Euro)

July 312015(unaudited)

Financial receivables

January 31
2015(audited)-

11

Other receivables and advance payments

7,843

3,229

Receivables from, and advance payments to, related parties - current

7,843

3,240

The increase in the caption mainly relates to advance payments made in fulfillment of
obligations under a consulting agreement signed with PRADA spa.
July 312015(unaudited)

January 31
2015(audited)

Prepaid sponsorship

17,641

12,379Deferred rental income – long-term

1,383

4,309

741

741

19,765

17,429(amounts in thousands of Euro)

Loans
Receivables from, and advance payments to, related parties – non-current

Prepaid sponsorship refers to the amount paid to Luna Rossa Challenge srl in respectof the arrangements in force at July 31, 2015. Deferred rental income – long-term
was recognized in application of “IAS 17 Leases” which requires rental income to berecognized on a constant basis.
Further information on related party transactions is provided in Note 36.
11. Other current assets
Other current assets are detailed as follows:
July 312015(unaudited)

January 31
2015(audited)

VAT

62,74956,934

Income tax and other tax receivables

34,60753,307

Other assets

29,38011,454

Prepayments and accrued income

63,39854,642

Deposits

2,923

4,296

193,057

180,633(amounts in thousands of Euro)

Total

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

July 312015(unaudited)

January 31
2015(audited)Advertising contributions under license agreements

8,074

916

Advances to suppliers

7,554

2,351

Incentives for retail investments

7,257

3,950

Advances to employees

719

849

Other receivables

5,776

3,388

Total

29,38011,454

July 312015(unaudited)

January 31
2015(audited)

Rental charges

19,10818,741

Insurance

3,494

2,380

Design costs

14,938

14,629Fashion shows and advances on advertising campaigns

8,970

3,752

Consulting

3,493

3,922

Amortized costs on loans

1,154

1,286

Other

12,241

9,932

Total

63,39854,642

Prepayments and accrued income
Prepayments and accrued income are detailed as follows:(amounts in thousands of Euro)

Prepaid design costs mainly include costs incurred for the conception and realization ofcollections that will generate revenue after July 31, 2015.
Deposits
Deposits mainly include guarantee deposits paid under commercial lease agreements.

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12. Property, plant and equipment
Changes in the historical cost of Property, plant and equipment in the period ended
July 31, 2015, and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2014
(audited)
Change in scope of consolidation

Land andbuildings

Production
plant andmachinery

Leaseholdimprovements

Furniture& fittings

Othertangibles

AssetsTotal
under historicalconstruction
cost

440,557

122,395

950,401

315,112

129,490

109,358 2,067,313

-

185

-

100

101

-

386

Additions

78,4749,189

109,969

47,027

9,733

129,570

383,962

Disposals(1,418)(580)(1,096)(2,707)(766)(1,655)(8,222)

Exchange differences

20,655

777

106,797

27,952

2,788

7,900

166,869

Other movements

1,646

121

22,7296,389

257(32,016)

(874)

-

(1)

(16,058)(8,547)

(752)

(291)

(25,649)

539,914132,086

1,172,742

385,326

140,851

Impairment
Balance at January 31, 2015
(audited)
Change in scope of consolidation
Additions
Disposals

212,866 2,583,785

-

-

-

-

-

-

-

32,044

5,519

45,766

10,815

2,051

58,011

154,206-(212)(2,898)(1,052)

(202)

(76)

(4,440)Exchange differences

15,641627

15,590

3,889

308

842

36,897

Other movements

57,811

2,631

47,9818,401

227(117,358)

(307)

-

(41)

(8,707)(3,406)(444)-(12,598)

645,410140,610

1,270,474

403,973

142,791

Impairment
Balance at July 31, 2015
(unaudited)

154,285 2,757,543

Changes in accumulated depreciation of Property, plant and equipment during theperiod ended July 31, 2015, and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2014
(audited)
Change in scope of consolidation

Land andbuildings

Production
plant andmachinery

Leaseholdimprovements

Furniture& fittings

Othertangibles

Total accum.
depreciation

49,880102,116

463,174

161,684

60,267

837,121

-

143

-

80

78

301

9,483

8,525

146,006

39,451

9,997

213,462

Disposals

(745)

(549)

(632)

(2,161)(664)(4,751)

Exchange differences

3,356

703

65,433

14,474

1,608

85,574

Other movements

-

(27)

(478)

23

(21)

(503)

Impairment-(1)(14,063)(6,886)(687)(21,637)

61,974110,910

659,440

206,665

70,5781,109,567

Depreciation

Balance at January 31, 2015
(audited)
Change in scope of consolidation
Depreciation
Disposals

-

-

-

-

-

-

5,302

4,934

86,26924,755

5,292

126,552

-

(135)

(495)

(827)

(176)

(1,633)

1,055

572

10,7002,318

253

14,898Other movements

1

(1)

87

(188)

5

(96)

Impairment-

22(8,573)(2,951)(411)(11,913)

68,332

116,302

747,428

229,772

75,541

1,237,375

Exchange differences

Balance at July 31, 2015
(unaudited)

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Changes in the net book value of Property, plant and equipment in period ended July
31, 2015, and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2014
(audited)
Change in scope of consolidation

Land andbuildings

Production
plant andmachinery

Leaseholdimprovements

Furniture& fittings

390,677

20,279487,227

153,428

Other Assets under
tangibles construction

69,223

Total net
book
value

109,358 1,230,192

-

42

-

19

24

-

85

Additions

78,4739,189

109,969

47,027

9,733

129,570

383,961

Depreciation(9,483)(8,525)(146,006)(39,452)(9,997)

(672)

(31)

(465)

(546)

(103)

(1,655)(3,472)

Exchange differences

17,29974

41,365

13,478

1,180

7,900

81,296

Other movements

1,646

148

23,2076,367

277(32,016)

(371)

-

-

(1,995)(1,660)

(64)

(291)

(4,010)477,940

21,176513,302

178,661

70,273

Disposals

Impairment
Balance at January 31, 2015
(audited)
Change in scope of consolidation- (213,463)

212,866 1,474,218

-

-

-

-

-

-

-

Additions

32,044

5,519

45,766

10,815

2,051

58,011

154,206

Depreciation(5,302)(4,934)(86,269)(24,755)(5,292)-(77)(2,403)

(224)

(26)

(76)

(2,806)

Exchange differences

14,586

56

4,889

1,571

55

842

21,999Other movements

57,811

2,631

47,893

8,588

222(117,357)

(212)

-

(63)

(134)

(455)

(33)

-

(685)

577,079

24,308523,044

174,201

67,250

Disposals

Impairment
Balance at July 31, 2015
(unaudited)- (126,552)

154,286 1,520,168

Additions to land and buildings include the expenses incurred to complete the realizationof the new Milan headquarters of the Prada Foundation, an art museum built on an
overall surface of 19,000 m2 and designed by OMA, the architectural firm led by Rem
Koolhaas. The remainder consists of facilities purchased to improve manufacturing
activities.
Additions to Production plant and machinery mainly relate to purchases of equipment
for use in 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 six months ended
July 31, 2015, is summarized as follows:(amounts in thousands of Euro)

July 312015(unaudited)

January 31
2015(audited)

Stores opened during the year

89,411

155,576of which stores already opened during the year

77,368102,493of which stores opening soon

12,04353,083Purchases, refurbishment and relocation of existing stores

23,778105,367

Total retail capital expenditure

113,189

260,943

The impairment adjustments recorded for the six months ended July 31, 2015,
essentially relate to several projects for the relocation and renewal of retail premises.
At July 31, 2015, all of the Group’s land outside Hong Kong was owned on a freeholdbasis.

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13. Intangible assets
Changes in the historical cost of Intangible assets in the period ended July 31, 2015,
and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2014
(audited)
Change in scope of consolidation

Trademarks

Goodwill

Store Lease
Acquisitions

SoftwareDevelopment
costs and otherintangible
assetsAssets inprogressTotal
historicalcost

394,685

534,470

180,455

74,24564,884

5,343

1,254,082

-

7,975

22,0652

1-30,043

Additions494-

14,677

3,164

177

17,13335,645

Disposals

-

(711)

-

(21)

(52)

(1)

(785)

7,425

2,650

9,043

763

2

57

19,940

Other movements

-

670

1,829

629

-

(3,678)(550)

Impairment

-

-

(256)

(7)

-

(41)

(304)

402,604

545,054

227,81378,77565,012

18,813

1,338,071

Exchange differences

Balance at January 31, 2015
(audited)
Change in scope of consolidation
Additions
Disposals

-

-

-

-

-

-

-

153

257

251

1,094

96

20,17522,026--(2,486)---(2,486)

5,795

2,068

(619)

113

-

(30)

7,327

Other movements-

40

15,372

1,335-(16,996)(249)

Impairment

-

(516)

(273)

(157)

(326)

-

(1,272)

408,552

546,903240,058

81,16064,782

21,962

1,363,417

Exchange differences

Balance at July 31, 2015
(unaudited)

Changes in the accumulated amortization of Intangible assets during the period ended
July 31, 2015, and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2014
(audited)
Change in scope of consolidation
Amortization
Disposals

Trademarks

Goodwill

Store Lease
Acquisitions

SoftwareDevelopment
costs and otherintangible
assetsTotal
accumulated
amortization

111,772

30,097

101,461

63,60845,855352,793

-

-

-

-

-

-

11,0971

17,950

3,655

2,481

35,184

-

(711)

-

(15)

(52)

(778)

2,503

1,782

2,727

707

2

7,721

Other movements

-

671

(561)

(1)

1

110

Impairment

-

-

(256)

(7)

-

(263)

125,372

31,840121,32167,94748,287394,767

-

-

-

-

-

-

5,790

-

10,487

1,968

1,006

19,251

-

-

(558)

-

-

(558)

2,027

1,391

272

148

-

3,838

Exchange differences

Balance at January 31, 2015
(audited)
Change in scope of consolidation
Amortization
Disposals
Exchange differences
Other movements

-

49

53

-

-

102

Impairment

-

(436)

-

(157)

(326)

(919)

133,189

32,844

131,575

69,906

48,967416,481

Balance at July 31, 2015
(unaudited)

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Changes in the net book value of Intangible assets during the period ended July 31,
2015, and in prior year are as follows:(amounts in thousands of Euro)

Balance at January 31, 2014
(audited)
Change in scope of consolidation
Additions
Amortization
Disposals

Trademarks

Goodwill

Store Lease
Acquisitions

SoftwareDevelopment
costs and otherintangible
assets282,913504,373

78,994

10,63719,029Assets in
Total netprogress book value

5,343

901,289

30,043-

7,975

22,065

2

1

-

494

-

14,677

3,166

177

17,13335,647(11,097)(1)(17,950)(3,655)(2,482)-(35,185)

-

-

-

(7)

-

(1)

(8)

4,922

867

6,316

57

-

57

12,219Other movements

-

-

2,390

628

-

(3,678)(660)

Impairment

-

-

-

-

-

(41)

(41)

277,232

513,214

106,492

10,82816,725

18,813

943,304

Exchange differences

Balance at January 31, 2015
(audited)
Change in scope of consolidation

-

-

-

-

-

-

-

153

257

251

1,094

96

20,17522,026(5,790)-(10,486)(1,968)(1,006)-(19,250)--(1,928)---(1,928)

3,768

677

(892)

(35)

-

(30)

3,488

Other movements-(8)

15,317

1,335-(16,996)(352)

Impairment

-

(80)

(272)

-

-

-

(352)

275,363514,060

108,482

11,254

15,81521,962946,936

Additions
Amortization
Disposals
Exchange differences

Balance at July 31, 2015
(unaudited)

The net book value of Trademarks is broken down as follows:
July 312015(unaudited)

January 31
2015(audited)

Miu Miu

157,046

159,811Church's

104,048

102,502

Luna Rossa

3,678

4,169

Car Shoe

5,147

5,237

(amounts in thousands of Euro)

Prada

3,905

3,985

Other

1,539

1,528

Total

275,363

277,232

No impairment losses were recorded in relation to the Group’s trademarks for the six
months ended July 31, 2015. Trademark registration costs are included in Other.

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Total capital expenditure on Property, plant and equipment and Intangible assets forthe six months ended July 31, 2015, was Euro 176.2 million.
July 312015(unaudited)

January 31
2015(audited)

Retail113,189

260,943

Production and logistics

25,31458,927

Corporate

37,732

129,865

Total

176,235

449,735(amounts in thousands of Euro)

Impairment test
As required by “IAS 36 Impairment of assets”, goodwill with an indefinite useful life
is not amortized. Instead, it is tested for impairment at least once a year. As at July
31, 2015, Goodwill amounted to Euro 514.1 million, detailed by Cash Generating Unit
(CGU) as follows:(amounts in thousands of Euro)

July 312015(unaudited)

January 31
2015(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

3,660

3,492

Church’s

10,82010,142

Marchesi Angelo

7,975

7,975

514,060

513,214Total

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. Associated undertakings(amounts in thousands of Euro)

July 312015(unaudited)

January 31
2015(audited)

Investment in associated undertaking

1,738

1,738

Investment available for sale

24,01528,77716

14

25,76930,529Other investments
Total

Investment in associated undertaking regards a 49% interest in Pac srl (in liquidation),an unlisted company based in Italy, which has been measured under the equity method.
Investment available for sale regards the 4.88% stake in the share capital of Sitoy
Group Holdings ltd, a company listed on Hong Kong Stock Exchange that operates on
the Asian market in the production of leather bags and other products. In accordance

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with “IAS 39 Financial instruments: measurement and impairment”, the investment
was initially recognized at cost and subsequently restated at fair value in line with theofficial quoted share price on the Hong Kong Stock Exchange as at July 31, 2015 (Level
I of the fair value hierarchy per “IFRS 7 Financial Instruments: Disclosures”). Changes
to fair value compared to January 31, 2015 – negative by Euro 4.8 million – have beenrecognized in a specific equity reserve, net of the taxation effect (Euro 1.2 million). In
2015, the Group collected net dividends from Sitoy Group Holdings totaling HKD 13.4
million (Euro 1.6 million).
15. Other non-current assets
Other non-current assets are detailed as follows:
July 312015(unaudited)

January 31
2015(audited)

Guarantee deposits

73,14470,004

Deferred rental income

13,625

9,056

Pension fund surplus

2,683

2,515

Other long-term assets

12,128

9,778

Total

101,580

91,353

July 312015(unaudited)

January 31
2015(audited)

Stores69,73566,568

Offices

2,184

2,175

(amounts in thousands of Euro)

Guarantee deposits are analyzed below by nature and maturity:(amounts in thousands of Euro)Nature:Warehouses

182

182

Other

1,043

1,079

Total

73,14470,004(amounts in thousands of Euro)

July 312015(unaudited)

Maturity:
By 31.07.2017

11,597

By 31.07.2018

9,747

By 31.07.2019

14,599By 31.07.2020

16,447After 31.07.2020

20,754

Total

73,144

At July 31, 2015, pension fund surplus amounted to Euro 2.7 million and represents theactuarial valuation of the post employment pension plans the Group has in the United
Kingdom, as also indicated in Note 22.

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16. Bank overdraft and short-term loans(amounts in thousands of Euro)Bank overdrafts and commercial lines of credit

July 312015(unaudited)

January 31
2015(audited)30

93

Short-term bank loans

337,122

221,639

Current portion of long term loans

42,48742,074

(486)

(471)

379,153

263,335

Deferred costs on loans
Total

The increase in Short-term bank loans was mainly due to the almost full drawdown of
the revolving line of credit of Euro 315 million, arranged by PRADA spa on December
1, 2015, with a pool of banks (drawn for Euro 150 million at January 31, 2015). At thesame time, during the six months, the Group reimbursed Short-term banks loans inJapanese Yen and Renminbi for a total amount of some Euro 50 million.
The Euro 315 million pool loan is subject to compliance with several covenants
determined based on the PRADA spa Consolidated financial statements. Specifically,
the ratio between total net bank borrowing and EBITDA must not exceed 3 and theratio between EBITDA and total net interest expenses must exceed 4. The covenants
were respected at July 31, 2015.
Short-term bank loans at July 31, 2015, also include committed lines of credit of
PRADA Japan co ltd which are subject to a series of covenants based on the financial
statements of PRADA Japan that were fully respected at July 31, 2015.
The Current portion of long-term loan includes the mortgage loan provided by Cassa di
Risparmio Parma e Piacenza to PRADA spa in 2008 and reported for Euro 2.6 million at
July 31, 2015 (Euro 5.2 million at January 31, 2015). Security for this loan consists ofa mortgage on a real estate property in Tuscany used by the Group for leather goods
division logistics activities.
The Current portion of long-term bank loans at January 31, 2015, included Euro 0.6
million related to a secured loan arranged by PRADA spa with the Monte dei Paschi diSiena Group in 2008 which was reimbursed during the six month period.
Short-term bank loans and the current portion of long-term borrowings by currency are
analyzed as follows:
July 312015(unaudited)

January 31
2015(audited)

Euro

321,987

157,883

Japanese Yen

43,03873,571Chinese Renminbi

5,573

24,477

Other currencies

9,011

7,782

379,609263,713(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 41% of the current portion of
medium/long term loans consisted of fixed rate loans (15% at January 31, 2015) withvariable rate loans making up the remaining 59% (85% at January 31, 2015).

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Bank borrowings are stated net of amortized costs incurred to arrange the loans (Euro
0.5 million short-term and Euro 1.5 million medium/long term).
17. Payables to related parties – current and non-current
The current portion of payables to related parties is detailed as follows:(amounts in thousands of Euro)

Financial payables
Other payables
Payables to related parties - current

July 312015(unaudited)

January 31
2015(audited)

2,444

2,371

680

712

3,124

3,083

Financial payables towards other related parties, totaling Euro 2.4 million at July 31,
2015, include an interest-free loan provided by Al Tayer, the non-controlling shareholderof PRADA Middle East fzco, according to the number of shares held by it in said
company. Details of payables to the parent company and other related parties areprovided in Note 36.
The non-current portion of payables to parent company and other related parties isdetailed as follows:
July 312015(unaudited)

January 31
2015(audited)

Other payables –related companies-

13,384

Payables to related parties – non-current-

13,384(amounts in thousands of Euro)As a result of transactions with Non-controlling shareholders of a Group’s subsidiaryduring the six months ended July 31, 2015, Fin-reta srl is no longer a related party but
a third party. Consequently, the payables in question are now reported under “Other
non-current liabilities”.
18. Trade payables
Trade payables are detailed as follows:
July 312015(unaudited)

January 31
2015(audited)

Trade payables – third parties

355,383

410,977

Trade payables – related parties

23,443

26,443

Total

378,826

437,420(amounts in thousands of Euro)The reduction in trade payables followed a different phasing of the procurement
strategy of raw materials which was anticipated compared to the past. A complete
breakdown of trade payables to related parties is provided in Note 36.

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The following table summarizes trade payables by maturity date:July 312015(unaudited)

Current

Trade payables

378,826

Total(amounts in thousands of Euro)

Overdue (days)
1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

331,478

24,621

8,080

3,718

2,253

8,676

378,826

331,478

24,621

8,080

3,718

2,253

8,676

January 31
2015(audited)

Current

1 ≤ 3031 ≤ 60

61 ≤ 9091 ≤ 120> 120

Trade payables

437,420392,284

21,893

10,967

1,936

1,424

8,916

Total

437,420392,284

21,893

10,967

1,936

1,424

8,916

(amounts in thousands of Euro)

Overdue (days)

19. Tax payables
Tax payables are detailed as follows:
July 312015(unaudited)

January 31
2015(audited)

Current income taxes

68,95397,007

VAT and other taxes

36,55736,907

Total

105,510

133,914(amounts in thousands of Euro)Net of current income tax receivables (Euro 34.6 million – Note 11), current income
tax payables total Euro 34.3 million at July 31, 2015 (Euro 43.7 million at January 31,2015).
20. Other current liabilities
Other current liabilities are detailed as follows:(amounts in thousands of Euro)

July 312015(unaudited)

January 31
2015(audited)

Payables for capital expenditure

58,313

128,346

Accrued expenses and deferred income

17,632

17,354

Other payables

71,47874,780

Total

147,423

220,480

Payables for capital expenditure include liabilities for capital expenditure for Property,
plant and equipment and Intangible assets. The decrease compared to January 31,
2015, is due to the payment of Euro 55 million for the purchase of the property in Milanused as the Company’s headquarter.

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Other payables are detailed as follows:
July 312015(unaudited)

January 31
2015(audited)

Short term benefits for employees and other personnel

55,69360,332Customer advances

6,743

4,725

Returns from customers

7,042

7,813

Other

2,000

1,910

Total

71,47874,780July 312015(unaudited)

January 31
2015(audited)Long-term bank borrowings

300,374

126,671

Bonds

130,000

130,000

Deferred costs on loans(1,545)(1,468)

Total

428,829

255,203(amounts in thousands of Euro)

21. Long-term financial payables
Long-term financial payables are analyzed below:(amounts in thousands of Euro)

During the period, in order to give itself more financial flexibility, the Group took
advantage of the favorable conditions on the credit market and arranged the following
new long-term bank borrowings:––

Euro 40 million with Intesa-Sanpaolo and Euro 60 million with Unicredit; theseloans are subject to compliance with several covenants based on the PRADA
spa Consolidated financial statements. The covenants were respected at July 31,
2015.

––

Bilateral loans for a total amount of Japanese Yen 5 billion with several Japanesebanks, as detailed in the table below.

In addition during the six months the Group made the drawdown of the Euro 55
million long-term loan arranged with Intesa-Sanpaolo Group by PRADA spa on June23, 2014, and secured by a mortgage on the property in Milan used as the Company’s
headquarter. The loan is repayable in equal installments from November 2015.
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 July 31, 2015, some 83% of long-term loans consisted of fixed rate loans (83%
at January 31, 2015) with variable rate loans making up the remaining 17% (17% at
January 31, 2015).

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Details of long-term borrowings at July 31, 2015, are provided below:
Borroweramount inthousands of Euro

Loan currency Lender

Expirydate

Interest rate
(1)

PRADA spa

130,000

Euro

Bonds

08/20182.750%PRADA spa

60,000Euro

Unicredit

03/20190.755%PRADA spa

51,333Euro

Intesa SanPaolo

05/2030

2.737%PRADA spa

40,000Euro

Intesa SanPaolo

02/20190.608%PRADA Middle East FZCO

1,411

US Dollar

ENBD

09/2016

3.184%PRADA Japan Co. Ltd

3,667

Japanese Yen

Mizuho Bank

03/20171.875%PRADA Japan Co. Ltd

2,934

Japanese Yen

Sumitomo Mitsui Trust

08/2016

0.638%PRADA Japan Co. Ltd

7,041

Japanese Yen

Syndicate loan

07/2018

1.057%PRADA Japan Co. Ltd

19,802

Japanese Yen

Syndicate loan

01/2018

1.057%PRADA Japan Co. Ltd

17,603

Japanese Yen

Mizuho Bank

03/2020

1.360%PRADA Japan Co. Ltd

5,868

Japanese Yen

MUFG

03/20200.810%PRADA Japan Co. Ltd

2,934

Japanese Yen

Sumitomo Mitsui Trust

03/2020

1.180%PRADA Japan Co. Ltd

2,494

Japanese Yen

SMBC

03/20180.455%

Kenon Ltd82,446

GB PoundUnicredit

01/20294.477%

Church & Co. ltd

2,841

GB Pound

HSBC

05/2018

2.064%

Total

430,374(1) the interest rates include, where applicable, the effect of any interest rate risk hedging transactions

The loan from Sumitomo Mitsui Trust Bank is subject to compliance with a number ofparameters based on the statutory financial statements of PRADA Japan co ltd – theparameters were respected in full at July 31, 2015.
The Bonds reported for a net amount of Euro 129 million (nominal amount of Euro
130 million as adjusted by Euro 1 million following application of the amortized cost
method). Their fair value, as determined based on the official listed price on the Irish
Stock Exchange at July 31, 2015, is Euro 136 million.
All bank borrowing is analyzed by security profile as follows:(amounts in thousands of Euro)

July 312015(unaudited)

January 31
2015(audited)

Secured141,972

85,685

Unsecured

668,041434,792

Total

810,013

520,477

Other than PRADA spa, no Group company had issued any debt securities at July 31,
2015.
22. Post-employment benefits
July 312015(unaudited)

January 31
2015(audited)

Post-employment benefits

44,15045,638Other long term employee benefits

21,754

40,116

Total liabilities for long term benefits

65,90485,754Post-employment benefit (pension plan surplus)

2,683

2,515

Net liabilities for long term benefits

63,221

83,239(amounts in thousands of Euro)PRADA Group

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Liabilities and assets for post-employment benefits reported at July 31, 2015, totaled
a net amount of Euro 63.2 million (Euro 83.2 million at January 31, 2015) and all werequalified as defined benefit plans. The pension plan surplus relates to Group companies
operating in the United Kingdom. It amounts to Euro 2.7 million at July 31, 2015,
against Euro 2.5 million at January 31, 2015. This item is included in Other non-current
assets, Note 11.
The post-employment benefits totaling Euro 44.2 million includes Euro 24.2 million(Euro 26.3 million at January 31, 2015) of liabilities recorded in the financial statementsof Italian companies and Euro 19.9 million reported by non-Italian companies (Euro19.4 million at January 31, 2015). The Italian liabilities for post-employment benefits
regard the “Trattamento di Fine Rapporto” (hereinafter “TFR”, i.e. staff leaving
indemnity), a deferred employee benefit that must be paid by Italian businesses andis linked to length of working life and remuneration received. The present value of theliability as reported 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 liabilities for post-employment benefits inthe year ended July 31, 2015.

(amounts in thousands of Euro)

Balance at January 31, 2015 (audited)

DefinedBenefit Plans
in Italy(TFR)

DefinedBenefitPension Funds
Plans abroadUK(including
Japan)

Other
long-term
employeebenefits

Total(2,515)

40,116

83,2396,473

26,265

19,373Current service cost

770

1,140

-

4,563

Interest expenses (income)

14

-

-

44

58

Actuarial (gains)/losses(1,822)--343(1,479)(24,476)

Benefits paid

(1,073)(15)-(23,388)

Contributions

-

-

-

-

-

Exchange differences

-

(452)

(168)

76

(544)

Other movements

-

(50)

-

-

(50)

24,15419,996(2,683)21,754

63,221

Balance at July 31, 2015 (unaudited)

The current service cost and the interest expense/(income) were recognized throughincome statement. For the Other long-term employee benefits only, actuarial differenceswere also recognized through the income statement. The TFR liability was determinedbased 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 the likelihood of death, early retirement and resignation, dismissal, expiry of
employment contract, advance payment on leaving indemnities and supplementary
pension schemes were considered.
The pension plans relates to subsidiaries operating in the United Kingdom which
provide pension services for their employees. As at July 31, 2015, these pension plans
had a fair value of Euro 2.7 million (net surplus of Euro 2.5 million as at January 31,2015).

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Other long-term employee benefits
Other long-term employee benefits come under the IAS 19 category “Other longterm employee benefits” and relate to long-term retention and performance plans
recognized in favor of Group employees. As at July 31, 2015, their actuarial valuation,
obtained using the Projected Unit Cost Method, was Euro 21.8 million (Euro 40.1 million
as at January 31, 2015), as determined based on an independent actuarial appraisal.
The decrease in 2015 regards the payments of Euro 23.4 million.
23. 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, 2015 (audited)
Exchange differences

Provision
for litigation

Provision fortax disputes

Other
provisions

Total

1,876

25,53736,282

63,695

14

2

654

670

-

-

-

-

(120)

-

(237)

(357)

Reclassifications
Reversals
Utilized

(8)

-

(682)

(690)

Increases

151

91

4,299

4,541

1,913

25,63040,31667,859Balance at July 31, 2015 (unaudited)

Provisions represent the Directors’ best estimate of maximum contingent liabilities. In
the Directors’ opinion and based on the information available to them as supported by
the opinions of independent experts at the reporting date, the total amount provided
for risks and charges is reasonable considering the liabilities that might arise. During
the six months ended July 31, 2015, there were no significant developments regarding
litigation ongoing at January 31, 2015. Moreover, no new contingencies requiring
significant adjustment to the provisions for risks and charges reported at July 31, 2015,
emerged.
24. Other non-current liabilities
Other non-current liabilities amount to Euro 153.5 million (Euro 128.8 million as atJanuary 31, 2015). They mainly regarded liabilities to be recognized on a straight-line
basis in relation to commercial lease costs.
25. Shareholders’ equity - GroupThe Group’s shareholders’ equity is as follows:
July 312015(unaudited)

January 31
2015(audited)

Share Capital

255,882

255,882

Share premium reserve

410,047410,047

Other reserves

1,959,311

1,790,771

Actuarial reserve(12,159)(13,481)

Fair value reserve

7,544

11,115

Cash flow hedge reserve(19,279)(35,323)

Translation reserve

170,970

130,996

Net income for the period

188,593450,730

2,960,909

3,000,737(amounts in thousands of Euro)

Total

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Share capital
At July 31, 2015, 80% of the share capital of PRADA spa was held by PRADA Holding
spa while the remainder was floating on the Main Board of the Hong Kong Stock
Exchange.
Share premium reserve
The share premium reserve of Euro 410 million is unchanged compared to January 31,
2015.
Translation reserve
Movements on this reserve relate to the translation of foreign currency financial
statements of consolidated companies. The reserve passed from Euro 131 million at
January 31, 2015, to Euro 171 million at July 31, 2015. The main reason for this change(Euro 40 million) lies in the constant strengthening of the Hong Kong Dollar, the GB
Pound and the US Dollar which have gained 3%, 6.3% and 3%, respectively, against
the Euro compared to the opening exchange rates.
Other reserves
At July 31, 2015, other reserves amounted to Euro 1,959.3 million (Euro 1,790.8 million
at January 31, 2015). They increased by Euro 168.5 million compared to January 31,
2015, due to allocation of net income for the previous year (Euro 450.7 million), net ofthe distribution of dividends to PRADA spa shareholders (Euro 281.5 million).
Net income for the period
The Group’s net income for the six months ended July 31, 2015, amounted to Euro
188.6 million (Euro 450.7 million for the twelve months ended January 31, 2015).
Capital gains tax in Italy
Capital gains realized on disposals of shares in the Company may be subject to tax
in Italy. Further details of Italian capital gains taxation are provided in the Tax Booklet
available on the Company’s website www.pradagroup.com.
26. Shareholders’ equity – Non-controlling interests
The following table shows movements on the Shareholders’ equity of Non-controllinginterests during the periods ended July 31, 2015, and January 31, 2015.
(amounts in thousands of Euro)

Opening balance
Translation differences

January 31
2015(audited)

17,41013,986

(47)

2,085

Dividends(3,229)(9,378)Net income for the period

2,971

8,488

Actuarial reserve

-

(3)

409

2,125

Acquisition of Marchesi Angelo srl-

107

Transaction with minority interests

(39)

-

17,475

17,410Capital injection in subsidiaries by non-controlling shareholders

Closing balance

72

July 312015(unaudited)

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27. Net revenues
Consolidated net revenues are mainly generated by sales of products and are stated
net of returns and discounts.
six months
ended July 31
2015(unaudited)

six months
ended July 31
2014(unaudited)

Net sales

1,801,356

1,730,900

Royalties

23,077

20,415

1,824,433

1,751,315(amounts in thousands of Euro)

Total

A breakdown of net sales by brand, distribution channel, geographical area andproduct, as well as details on royalties, are provided in the Financial review.
28. Cost of goods soldCost of goods sold is analyzed as follows:
six months
ended July 31
2015(unaudited)

six months
ended July 31
2014(unaudited)

Purchases of raw materials and production costs

510,894

476,558

Logistics costs, duties and insurance

100,628

95,641

Change in inventories(113,002)(78,484)

Total

498,520493,715(amounts in thousands of Euro)The cost of goods sold decreased as a percentage of net revenues as it went downfrom 28.2% in the first six months of 2014 to 27.3%. The efficiency was due, despite
a less favorable product and geographical mix, to improvements on industrial costs aswell as to the positive impact of exchange rates.
29. Operating expenses
Operating expenses are analyzed as follows:(amounts in thousands of Euro)six months
ended July 31
2015(unaudited)% of netrevenues

six months
ended July 31
2014(unaudited)% of netrevenues

Product design and development costs

69,3083.8%

69,686

4.0%

Advertising and communications costs

98,534

5.4%

76,535

4.4%

Selling costs

751,977

41.2%

639,366

36.5%

General and administrative costs

112,880

6.2%

98,855

5.6%

1,032,699

56.6%

884,442

50.5%

Total

Advertising and communications costs increased from Euro 76.5 million in the first six
months of the 2014 year to Euro 98.5 million, essentially following the higher spending
in the current period for media, events and sponsorships. There was a concentrationof this spending in the first quarter of 2015 where many promotional initiatives were
programmed. In the six month period, the Group confirmed its commitment to support
innovative and worldwide resonant projects aimed at promoting image and long-termvalue, such as the initiatives of the Prada Foundation, the third party entity that operates
the art museum in Milan unveiled on May 9, 2015.

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Selling costs increased from Euro 639.4 million in the first six months of the 2014 toEuro 752 million. The expansion of the retail network, combined with the increases
generated by the weakness of the Euro, raised the total amount of the expenses forthis corporate area, which means rent, depreciation and labor costs.
The general and administrative costs increased from Euro 98.9 million to Euro 112.9
million, essentially because of the aforementioned movements in the currencies andsome one-off expenses incurred in the first three months of the year to carry out thereorganization of some business processes.
As required by “IAS 1 Presentation of financial statements”, the following table shows
the depreciation, amortization and impairment costs, labor costs and rental costs
included in operating expenses.
six months
ended July 31
2015(unaudited)

six months
ended July 31
2014(unaudited)

Depreciation, amortization and impairment

139,796

113,878

Labor cost

301,518

265,077

Variable rent

180,735

148,198

Fixed rent

145,296

123,822

Total

767,345

650,975(amounts in thousands of Euro)

30. Interest and other financial income/(expense), net
Interest and other financial income/(expenses), net are analyzed as follows:(amounts in thousands of Euro)six months
ended July 31
2015(unaudited)

six months
ended July 31
2014(unaudited)

Interest expenses on borrowings(7,592)(6,020)Interest expenses IAS 19
Interest income

(58)

(101)

1,548

1,713

Exchange gains / (losses) – realized

3,930

3,031

Exchange gains/ (losses) – unrealized(5,360)(6,707)

Other financial income / (expenses)(1,541)(1,408)

Total(9,073)(9,492)

Interest expenses on borrowings have increased compared to 2014 because of thehigher level of borrowings on average. Exchange losses, net mainly refer to thefluctuation of the Euro currency against the US Dollar, the HK Dollar and the Swiss
Franc in relation to monetary financial assets and liabilities outstanding at the reportingdate.
31. Dividends from investments
As at July 31, 2015, the Group held a 4.88% interest (unchanged on prior year) in Sitoy
Group Holdings ltd, a company listed on Hong Kong Stock Exchange (HK: 1023).
In 2015, the dividends collected from said company amounted to Euro 1,562 thousand(Euro 455 thousand in 2014).

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32. Income taxes
Income taxes are analyzed as follows:
six months
ended July 31
2015(unaudited)(amounts in thousands of Euro)six months
ended July 31
2014(unaudited)

Current taxation

114,514

123,157

Deferred taxation(20,375)(10,082)

Income taxes

94,139113,075

In absolute terms, the tax burden for the period is lower than July 31, 2014 (downfrom Euro 113.1 million to Euro 94.1 million), but the relevant tax rate went up from
31.1% to 32.9% essentially following a different mix of the taxable income in termsof geography.
Movements on net deferred tax assets and deferred tax liabilities are shown in thefollowing table:
six months
ended
July 312015(unaudited)

twelve months
ended
January 31
2015(audited)

239,349

158,574

Exchange differences

2,380

21,549Deferred taxes on derivative instruments recorded in equity (cash flow hedges)(5,690)13,795(501)

306(amounts in thousands of Euro)

Opening balance

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

(118)

897

Deferred taxes for the period in income statement

20,37544,228

Closing balance

255,795

239,349

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

July 31, 2015
(unaudited)
Deferred tax
assetsJanuary 31, 2015
(audited)Deferred tax
liabilities

Deferred tax
assetsDeferred tax
liabilities

152,922-

137,815-

Receivables and other assets

485

1,603

506

1,541

Useful life of non-current assets

61,294

13,26454,47813,248-22,097-

21,787

Provision for risks / accrued expenses

49,182

2,679

47,6272,436

Non-deductible / taxable charges/income

10,080482

10,896

1,795

Tax loss carryforwards

4,732

-

5,411

-

Derivative financial instruments

6,903

-

12,577-

Long term employee benefits

8,883

544

10,041

507

Other

2,125

142

1,632

320

Total

296,606

40,811

280,983

41,634

Deferred taxes due to acquisitions

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33. Earnings and Dividends per share
Earnings per share
Earnings per share are calculated by dividing the net income attributable to shareholders
by the weighted average number of ordinary shares in issue in the period.
six months
ended July 31
2015(unaudited)Group’s net income in Euro
Weighted average number of ordinary shares in issue
Earnings per share in Euro, calculated on weighted average number of shares

six months
ended July 31
2014(unaudited)

188,593,497

244,847,587

2,558,824,000

2,558,824,000

0.074

0.096

Dividends per share
During the six months ended July 31, 2015, the Company distributed dividends ofEuro 281,470,640, as approved by the Shareholders’ Meeting held on May 26, 2015,
to approve the financial statements for the year ended January 31, 2015.
The payment of the dividends and the related Italian withholding tax liability (Euro 14.6
million), arising from the application of the Italian ordinary withholding tax rate to thewhole amount of dividends paid to beneficial owners of the Company shares held
through the Hong Kong Central Clearing and Settlement System, was completed by
July 31, 2015.
34. Additional information
The average headcount by functional area is as follows:
six months
ended July 31
2015(unaudited)

six months
ended July 31
2014(unaudited)

Production

2,067

1,987

Product design and development

1,045

950

Advertising and Communications

120

115

Selling

8,110

7,785

General and administrative services

1,023

987

Total

12,365

11,824six months
ended July 31
2015(unaudited)

six months
ended July 31
2014(unaudited)

Production

51,83749,158

Product design and development

36,17034,882Advertising and Communications

7,190

5,940

Selling

210,402

181,036

General and administrative services

47,756

43,219Total

353,355

314,235(number of employees)

Employee remuneration
Employee remuneration by functional area is as follows:(amounts in thousands of Euro)76

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Employee remuneration by nature is as follows:
six months
ended July 31
2015(unaudited)

six months
ended July 31
2014(unaudited)

Wages and salaries

267,357

238,205

Post-employment benefits

16,84013,121Social contributions

55,05652,390Other

14,102

10,519Total

353,355

314,235(amounts in thousands of Euro)Distributable reserves of parent company PRADA spa(amounts in thousands of Euro)

Amount at
July 31, 2015
(unaudited)

Possibleutilization

Amountdistributable

410,047

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

Retained earnings

454,951

A, B, C419,411

Cash flow hedge reserve(15,024)

Distributable amount

Summary of utilization in the last
three years
Coverage oflossesDistribution ofdividends-

639,706

1,012,356

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 as the legal reserve reached an amount equal to 20% of share capital.
The retained earnings are non-distributable for an amount equal to Euro 20,516
thousand following the application of Art. 7 of Legislative Decree 38/2005 and for Euro
15,024 thousand being the coverage of the negative value of the Cash flow hedge
reserve.

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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, 2015.
Currency

Average ratein prior six
month period

Closing rate

Opening rate

US Dollar

1.106

1.369

1.097

1.131

Canadian Dollar

1.379

1.497

1.431

1.432

GB Pound

0.723

0.816

0.704

0.751

Swiss Franc

1.049

1.219

1.057

1.047

Australian Dollar

78

Average rate

1.433

1.483

1.514

1.454

Korean Won

1,225.970

1,426.771

1,287.410

1,246.540

Japanese Yen

133.080133.887

139.755

136.340

Hong Kong Dollar

8.574

10.618

8.503

8.764

Singapore Dollar

1.497

1.720

1.508

1.529

Thai Bath36.72144.39138.57137.055

Taiwan Dollar

34.39541.30234.60435.582

Russian Ruble

62.70248.15866.86079.925

Czech Koruna

27.37127.43827.03127.797

Macau Pataca

8.830

10.936

8.758

9.027

Chinese Renminbi

6.877

8.475

6.810

7.064

New Zealand Dollar

1.527

1.601

1.677

1.557

Malaysian Ringgit

4.065

4.446

4.202

4.110

Turkish Lira

2.905

2.942

3.049

2.758

Brazilian Real

3.385

3.113

3.697

3.011
16.838Mexican Peso

16.95917.90917.747

UAE Dirham

4.061

5.029

4.028

4.152

Ukrainian Hryvna

24.80614.89523.67618.28310.837

Moroccan Dirham

10.802

11.23910.779Kuwait Dinar

0.332

0.386

0.332

0.334

Danish Kronor

7.460

7.462

7.462

7.444

Swedish Kronor

9.333

9.018

9.462

9.361

Kazakhstani Tenge

205.404248.369205.180209.180

Qatari Riyal

4.027

4.986

4.029

4.127

Indian Rupee

69.76282.77070.33870.113

Saudi Arabian Riyal

4.147

5.135

4.113

4.252

South African Rand

13.342

14.61813.92113.103

Vietnamese Dong

23,831.722

28,900.580

23,702.000

24,308.000

Indonesian Rupiah

14,485.430

15,947.160

14,866.290

14,342.800

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35. Remuneration of Board of Directors
Remuneration of the PRADA spa Board of Directors for the six months ended
July 31, 2015
(amounts in thousands of Euro)

Directors’
fees

Carlo Mazzi

Remunerationand otherbenefits

Bonusesand other
incentives

Benefits
in kindPension,healthcare
and TFR
contributions

Total

510

-

-

42

2

554

Miuccia Prada Bianchi

4,352

2,675

-

-

-

7,027

-

7,102

Patrizio Bertelli

4,352

1,500

1,250

Donatello Galli

22

203

125

20

88

458

Alessandra Cozzani

22

95

56

6

42

221

Gaetano Micciché

22

-

-

-

-

22

Gian Franco Oliviero Mattei

75

-

-

-

-

75

Giancarlo Forestieri

32

-

-

-

5

37

Sing Cheong Liu

32

-

-

-

6

38

9,419

4,473

1,431

68

143

15,534

Total

Remuneration of the PRADA spa Board of Directors for the six months ended
July 31, 2014
(amounts in thousands of Euro)

Directors’fees

Remuneration
Bonusesand otherand otherbenefits incentives (*)

Benefits
in kindPension,healthcare
and TFR
contributions

Total

Carlo Mazzi

510

-

-

42

11

563

Miuccia Prada Bianchi

500

5,350

585

-

-

6,435
6,123

Patrizio Bertelli

500

3,000

2,623

-

-

Donatello Galli

20

208

76

20

106

430

Alessandra Cozzani

20

86

37

7

52

202

Gaetano Micciché

20

-

-

-

-

20

Gian Franco Oliviero Mattei

80

-

-

-

-

80

Giancarlo Forestieri

30

-

-

-

4

34

Sing Cheong Liu

30

-

-

-

6

36

1,710

8,644

3,321

69

179

13,923Total(*) Bonuses and other incentives includes Other long-term benefits in favor of Patrizio Bertelli and Miuccia Prada Bianchi for
an amount of Euro 623 thousand and Euro 585 thousand respectively. As required by IAS 19, the amounts shown reflect theeffects of an actuarial valuation. Further information on Other long-term benefits is provided in Note 22.

36. Related party transactions
The Group enters into transactions with parties that can be qualified as related
according to “IAS 24 Related Party Disclosures”. These transactions mainly refer tothe sale and purchase of goods, supply of services, the granting and receipt of loans
as well as sponsorship, lease and franchise agreements. These transactions take place
on an arm’s length basis.
The following tables show details of related party transactions for each item in theStatement of financial position and in the Income statement. They show amounts
relating to each related party and the total amount relating to each line item.

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Statement of financial position amounts at July 31, 2015 (unaudited)(amounts in thousands of Euro)

EXHL Italia Srl

Trade
receivables

Receivablesfrom andadvances torelated parties– current

Receivablesfrom andadvancesto relatedparties – noncurrentTradepayablesPayablesto relatedparties –currentt

Payablesto relatedparties – noncurrentt

3

11

-

-

-

-

STICHTING Prada

681

25

-

38

-

-

Progetto Prada Arte srl

473

91

742

652

169

-

1,097

-

1,383

-

-

-

Progetto Prada Arte srl (Galleria)(*) (**)HMP Srl

8

-

-

-

-

-

Al Tayer Group LLC

-

-

-

6

-

-

Al Tayer Insignia LLC

-

-

-

133

2,444

-

Danzas LLC - UAE

-

-

-

-

155

-

DFS Hawaii

-

-

-

767

-

-

DFS New Zealand Limited

-

-

-

18

-

-

DFS Venture Singapore (Pte)
Limited

-

-

-

29

33

-

Luna Rossa Challenge 2013 NZ
LTD

1,294

-

-

-

-

-

Luna Rossa Challenge 2013 Srl

49-

17,640---Al Tayer Motors

-

-

-

1

-

-

Chora Srl

-

5,848

-

3,756

-

-

DFS Cotai limitada

30

-

-

931

-

-

Al Tayer Trends

14

-

-

-

-

-

Al Sanam Rent a Car LLC

-

-

-

2

-

-

Peschiera Immobiliare srl

-

80

-

-

-

-

Premiata Srl

58

-

-

1,293

-

-

La Mazza Srl

197

-

-

644

-

-

Stichting Prada

341

-

-

-

-

-

-

-

-

107

-

-

Friuli 64 srl
SPELM SA

-

-

-

(79)

-

-

3,805

-

-

-

-

-

Conceria Superior spa

1

-

-

11,325--PRADA HOLDING spa(Main Shareholder)

292

63

-

-

-

-

24,632

1,587

-

3,800

323

-

-

92

-

43

-

-

Isarcodue Srl

-

30

-

-

-

-

Perseo Srl

83

-

-

-

-

-

Rubaiyat Modern Lux. Prod. Ltd

F.lli Prada srl (franchising)PRA 1 Srl

Other

-

16

-

(23)

-

-

Members of the Board of
Directors of PRADA spa

-

-

-

2,320

-

-

Relative of a Director of PRADA spa

-

-

-

227

-

-

Total at July 31, 2015 (unaudited)

33,058

7,843

19,76525,9903,124-(*)The non-current receivable of Euro 1,383 thousand recognized in relation to Progeto Prada Arte srl represents deferred
rental income upon application of “IAS 17 Leases” to the temporary business partnership between PRADA spa and Progeto
Prada Arte srl.
(**)The receivable of Euro 1,097 thousand represents the portion of rental expenses for use of the premises in Galleria Vittorio
Emanuele II, Milan, by Progeto Prada Arte srl in compliance with temporary business partnership between PRADA spa andProgeto Prada Arte srl.

80

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Statement of financial position amounts at January 31, 2015 (audited)(amounts in thousands of Euro)PRADA Holding spa
Other payables – other companies
controlled by PRADA Holding spa
EXHL Italia srl
Other related parties

Trade
receivables

Receivablesfrom andadvancesto parent
companies
and relatedparties –current

Receivablesfrom andadvancesto parent
companies
and relatedparties – noncurrentTradepayablesPayablesto parent
companies
and relatedparties –current

Payablesto parent
companies
and relatedparties – noncurrent

160

5

-

1

-

-

-

-

-

-

-

-

-

-

-

-

-

-

36,761

3,235

17,42926,442

3,083

13,384DFS Hawaii

-

-

-

707

-

-

DFS Venture Singapore pte ltd

-

-

-

57

-

-

DFS Cotai limitada

89

-

-

1,478

-

-

DFS New Zealand ltd

-

-

-

49

-

-

F.lli Prada srl (franchising)F.lli Prada spa (Galleria) (*) (***)

29,291

-

-

2,639

322

-

912

-

3,174

-

-

-

Al Tayer Travels

-

-

-

51

-

-

Al Tayer Insignia llc

-

-

-

88

2,371

-

Al Tayer Logistics

-

-

-

-

-

-

Al Tayer Motors

-

-

-

1

-

-

Al Tayer Trends

13

-

-

-

-

-

Danzas llc UAE

-

-

-

27

112

-

Rubaiyat Modern Lux Prod ltd

2,342

-

-

-

-

-

Luna Rossa Challenge 2013 NZ ltd

1,294

-

-

-

-

-

721

11

12,379

154

21

-

-

-

-

-

-

-

Stiching Fondazione Prada

526

25

-

36

32

-

Stiching Prada

354

-

-

-

-

-

Progetto Prada Arte srl

355

88

741

1,784

211

-

Progetto Prada Arte srl (Galleria)(**) (****)

566

-

1,135

-

-

-

Luna Rossa Challenge 2013 srl
Aati Contracs

HMP srl

8

-

-

-

-

-

PRA 1 srl

-

90

-

75

-

-

Premiata srl

182

-

-

2,211

-

-

Friuli 64 srl

-

-

-

151

-

-

SPELM sa

-

-

-

183

-

-

La Mazza srl

105

-

-

867

-

-

Conceria Superior spa

1

-

-

12,418--Peschiera Immobiliare srl

-

82

-

-

-

-

Chora srl

-

2,924

-

3,233

-

-

FinReta srl

-

-

-

190

-

13,384Pelletteria Reta srl

-

15

-

38

13

-

Other

2

-

-

5

1

-

Members of the Board of
Directors of PRADA spa

-

-

-

143

-

-

Relative of a Director of PRADA spa

-

-

-

432

-

-

36,921

3,240

17,42927,0183,083

13,384

Total at January 31, 2015
(audited)(*)The non-current receivable of Euro 3,174 thousand recognized in relation to Fratelli Prada spa represents deferred rental
income upon application of “IAS 17 Leases” to the business management agreement between PRADA spa and Fratelli Prada
spa.
(**)The non-current receivable of Euro 1,135 thousand recognized in relation to Progeto Prada Arte srl represents deferred
rental income upon application of “IAS 17 Leases” to the temporary business partnership between PRADA spa and Progeto
Prada Arte srl.
(***)The receivable of Euro 912 thousand represents the business management fee due by Fratelli Prada spa to PRADA spa
for the conduct of retail business in the premises in Galleria Vittorio Emanuele II, Milan, under the business managementagreement between Fratelli Prada spa and PRADA spa.
(****)The receivable of Euro 566 thousand represents the portion of rental expenses for use of the premises in Galleria Vittorio
Emanuele II, Milan, by Progeto Prada Arte srl in compliance with temporary business partnership between PRADA spa andProgeto Prada Arte srl.

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Income statement for the six months ended July 31, 2015 (unaudited)(amounts in thousands of Euro)

EXHL Italia Srl
STICHTING Prada
Progetto Prada Arte srl

Net revenues

Cost ofgoods soldGeneral,admin. &selling costs(income)Royalties
incomeInterest
incomeInterest
expense

-

-

(3)

-

-

-

16

-

857

-

-

-

-

260

273

-

9

-

Progetto Prada Arte srl (Galleria)
(*)

(756)

HMP Srl

-

-

13

-

-

-

Al Tayer Group LLC

-

-

31

-

-

-

Al Tayer Insignia LLC

-

-

242

-

-

-

Danzas LLC - UAE

-

642

83

-

-

-

Al Tayer Travels

-

-

45

-

-

-

(2)

-

2,141

-

-

-

DFS New Zealand Limited

-

-

153

-

-

-

DFS Venture Singapore (Pte)
Limited

-

-

172

-

-

-

DFS Hawaii

DFS Cotai limitada
Luna Rossa Challenge 2013 Srl

-

-

3,528

-

-

-

13

-

6,693

-

-

-

Al Tayer Motors

-

-

3

-

-

-

Chora Srl

-

-

1,499

-

-

-

Al Sanam Rent a Car LLC

-

-

5

-

-

-

Peschiera Immobiliare Srl

-

-

251

-

-

-

Premiata Srl

-

1,914

1

-

-

-

La Mazza Srl

-

903

8

-

-

-

Fin_Reta srl

-

125

-

-

-

-

Pelletteria Reta Srl

-

53

1

-

-

-

Friuli 64 Srl

-

-

371

-

-

-

SPELM SA

-

-

238

-

-

-

Gran Caffè snc

-

4

4

-

-

-

165

-

(858)

165

-

-

Conceria Superior spa-

18,543

76

-

-

-

PRADA HOLDING spa(Main Shareholder)

-

-

(199)

-

-

-

14,244

94

(717)

406

-

-

Rubaiyat Modern Lux. Prod. Ltd

F.lli Prada spa (franchising)F.lli Prada spa (Galleria) (**)

1,200

PRA 1 Srl

-

-

558

-

-

-

Isarcodue Srl

-

(30)

-

-

-

-

PABE-RE LLC.

-

-

745

-

-

-

Perseo Srl

-

(68)

-

-

-

-

Relative of Director of PRADA spa

-

-

427

-

-

-

14,43622,44017,085571

9-

Total at July 31, 2015 (unaudited)(*) This amount includes non-monetary income in the form of deferred rental income of Euro 249 thousand recognized inrelation to Progetto Prada Arte srl in application of “IAS 17 Leases” to the temporary business partnership contract between
PRADA spa and Progetto Prada Arte srl.
(**) This amount includes non-monetary expense in the form of derecognition of deferred rental income of Euro 1,587 thousand
recognized in relation to Fratelli Prada spa in application of “IAS 17 Leases” to the temporary business partnership contract
between PRADA spa and Fratelli Prada spa.

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Income statement for the six months ended July 31, 2014 (unaudited)
Net sales

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

-

-

(57)

-

-

-

Other companies controlled by
PRADA Holding bv

-

-

(3)

-

-

-

(amounts in thousands of Euro)

EXHL Italia

-

-

(3)

-

-

-

Other related parties

16,793

4,847

16,510522

370F.lli Prada spa (Franchising)

16,7922(1,045)522--

F.lli Prada spa (Galleria) (*)--(2,329)---Danzas llc

-

667

96

-

-

-

DFS Hawaii

-

-

2,213

-

-

-

DFS New Zealand ltd

-

-

244

-

-

-

DFS Cotai limitada

-

-

4,333

-

-

-

DFS Venture Singapore pte ltd

-

-

164

-

-

-

Al Tayer Travels

-

5

214

-

-

-

Al Tayer Group llc

-

-

13

-

-

-

Al Tayer Insignia llc

-

38

128

-

-

-

Al Tayer Motors

-

-

2

-

-

-

Al Sanam Rent a Car llc

-

-

2

-

-

-

Secva srl (****)

-

-

1,493

-

-

2

Luna Rossa Challenge 2013 NZ ltd

-

-

6

-

-

-

Luna Rossa Challenge 2013 srl

-

(8)

5,482

-

3

-

HMP srl

-

-

20

-

-

-

Stiching Fondazione Prada

-

-

2,417

-

-

-

Progetto Prada Arte srl(Sponsorship)

1

(15)

3,601

-

-

-

Progetto Prada Arte srl (Galleria)(**)-

Peschiera Immobiliare srl

-

-

248

-

-

-

Premiata srl

-

2,783

-

-

-

-

La Mazza srl

-

1,014

2

-

-

-

Gipafin sarl

-

-

(18)

-

-

-

PRADA Arte bv

-

-

(3)

-

-

-

PRA 1 Srl

-

-

388

-

-

-

FinReta srl (***)

-

248

-

-

68

Pelletteria Reta srl

-

111

-

-

-

-

Friuli 64 srl

-

-

360

-

-

-

Spelm sa

-

-

34

-

-

-

Gran Cafè snc

-

2

1

-

-

-

Rubaiyat Modern Lux. Prod. ltd

-

-

(795)

-

-

-

Other

-

-

(3)

-

-

-

Relative of a Director of PRADA spa

-

-

295

-

-

-

Total at July 31, 2014 (unaudited)

16,793

4,847

16,745

522

3

70

(758)

(*) This amount contains non-monetary income in the form of deferred rental income of Euro 1,169 thousand recognized inrelation to Fratelli Prada spa in application of “IAS 17 Leases” to the business management agreement between PRADA spa
and Fratelli Prada spa.
(**) This amount includes non-monetary income in the form of deferred rental income of Euro 249 thousand recognized inrelation to Progetto Prada Arte srl in application of “IAS 17 Leases” to the temporary business partnership contract between
PRADA spa and Progetto Prada Arte srl.
(***) The interest expense represents the expense for the six months as calculated with the effective interest rate applied tothe discounted long-term liability agreed to establish the right of usufruct.
(****) The interest expense represents the expense for the six months resulting from discounting of the liability for deferredfees due after more than a year.

The above tables report information on transactions with related parties in accordancewith “IAS 24 Related Party Disclosures”. As stated below, some of these transactions
fall within the application of the Hong Kong Stock Exchange Listing Rules.

PRADA Group

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The transactions with related party “PABE-RE LLC” refer to transaction between
PABE-RE LLC and Prada Japan in relation to the the lease of the Aoyama Building inTokyo. The transactions reported for the six months ended July 31, 2015, fall within
the scope of application of Chapter 14A of the Listing Rules as they were qualified ascontinuing connected transactions subject to reporting and disclosure but exemptedfrom independent shareholders’ approval requirements. As requested by the Listing
Rules, comprehensive disclosure of these continuing connected transactions iscontained in the PRADA spa Announcement dated July 15, 2015.
The transactions with related party “Fratelli Prada spa – franchising” refer to transactions
between the Prada Group and Fratelli Prada spa in relation to the franchising agreement
regarding the Prada stores in Milan. The transactions reported for the six months
ended July 31, 2015, fall within the scope of application of Chapter 14A of the Listing
Rules as they were qualified as continuing connected transactions subject to reportingand disclosure but exempted from independent shareholders’ approval requirements.
As requested by the Listing Rules, comprehensive disclosure of these continuingconnected transactions is contained in the PRADA spa Announcement dated January
29, 2014.
The transactions with related party “Fratelli Prada spa – Galleria” refer to thetransactions between the Prada Group and Fratelli Prada spa in relation to the business
management agreement over the use by the latter of part of the Galleria Vittorio
Emanuele property in Milan to conduct retail business. These transactions refer tothe period going from February 1, 2015, to April 1, 2015, following the terminationagreement signed by the parties on March 31, 2015, those content was reported in
the PRADA spa Announcement dated April 2, 2015.
The transactions with related party “Progetto Prada Arte srl - Galleria” refer to thetransactions between the Prada Group and Progetto Prada Arte srl in relation to thetemporary business partnership agreement regarding the use by the latter of part of
the Galleria Vittorio Emanuele property in Milan to carry out cultural activities. The
transactions reported for the six months ended July 31, 2015, fall within the scope of
application of Chapter 14A of the Listing Rules as they were qualified as continuingconnected transactions subject to reporting and disclosure but exempted fromindependent shareholders’ approval requirements. As requested by the Listing Rules,
comprehensive disclosure of these continuing connected transactions was included in
the PRADA spa Announcement dated January 29, 2013.
The transactions with related party Luna Rossa Challenge 2013 srl reported for thesix months ended July 31, 2015, fall within the scope of application of Chapter 14A ofthe Listing Rules as they were qualified as continuing connected transactions subject
to reporting and announcement but exempted from the independent shareholders’approval requirement. As requested by the Listing Rules, comprehensive disclosure ofthese connected transactions was included in the PRADA spa Announcement dated
February 27, 2014.
Unlike the “non-exempt continuing connected transactions” and the “non-exempt
connected transactions” as reported in Note 35, no other transaction reported in
the unaudited Interim condensed consolidated financial statements falls under thedefinition of “connected transaction” or “continuing connected transaction” provided
by Chapter 14A of the Listing Rules or, if it does fall under the definition of “connectedtransaction” or “continuing connected transaction” in terms of said Chapter 14A,
is exempted from reporting, disclosure and independent shareholders’ approvalrequirements again under Chapter 14A.

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37. Commitments
Operating leases
At July 31, 2015, and January 31, 2015, operating lease commitments by maturity dateare as follows:(amounts in thousands of Euro)Within a year

July 312015(unaudited)

January 31
2015(audited)

423,210406,528

After between one year and five years

1,244,228

1,228,000

After more than five years

1,002,488

850,197

Total

2,669,926

2,484,725

Operating lease commitments for the 2015 reporting period included Euro 2,589
million regarding lease agreements for retail premises (Euro 2,398 million for 2014).
The increase in operating lease commitments is mainly due to increases in countries
that use currencies other than the Euro.
The amounts recorded in the income statement in relation to lease agreements are as
follows:(amounts in thousands of Euro)six months
ended July 31
2015(unaudited)

six months
ended July 31
2014(unaudited)

Fixed minimum lease expenses

146,511125,136

Variable lease expenses

180,735

148,198

Total

327,246

273,334

Some Group companies are required to pay lease charges based on a fixed percentageof net sales.
At July 31, 2015, and January 31, 2015, future rental income under current operatingleases for properties owned by the Group was analyzed by maturity as follows:
July 312015(unaudited)

January 31
2015(audited)

Within a year

9,548

13,471After between one year and five years

34,00450,277After more than five years

26,577

95,427

Total

70,129159,175(amounts in thousands of Euro)

The decrease from Euro 159.2 million to Euro 70.1 million is essentially retaled tothe termination agreement in respect of the Fratelli Prada Business Management
Agreement signed on March 31, 2015.

PRADA Group

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Finance leases
Property, plant and equipment includes the following assets held under finance leases:
July 312015(unaudited)

January 31
2015(audited)

Land and buildings--

Furniture and fittings--

Other tangibles

40

23

Accumulated depreciation

(17)

(21)

Total

23

2

(amounts in thousands of Euro)

Other commitments
At July 31, 2015, the Group did not have significant binding purchase commitments.
Comparative income statement and statement of financial position information
January 31
2015(amounts in thousands of Euro)

January 31
2014

January 31
2013

January 31
2012

January 31
2011

Net revenues

3,551,696

3,587,347

3,297,219

2,555,606

2,046,651

Gross margin

2,550,579

2,648,649

2,376,541

1,828,025

1,387,888

Operating income (EBIT)

701,551

939,237

889,781

628,935

418,387

Group net income

450,730

627,785625,681431,929

250,819

Total assets

4,738,877

3,888,292

3,385,279

2,943,568

2,366,015

Total liabilities

1,720,730

1,186,752

1,054,787

1,112,601

1,155,877

Total Group shareholders’ equity

3,000,737

2,687,554

2,320,022

1,822,743

1,204,350

38. Consolidated companies

EntityLocalcurrency

Sharecapital%(000s ofinterest
local
currency)

RegisteredofficeDate ofincorporation/ Main businessestablishment

Italy

86

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

Production

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

Church Italia srl

EUR

51

100.00Milan, Italy

31/01/1992

Distribution/Retail

Pellettieri d’Italia srl (*)

EUR

100

100.00Milan, Italy

10/07/2013

Production

Marchesi Angelo srl (*)

EUR

23

80.00

Milan, Italy

10/07/2013

Confectionery

Montenapoleone 9 srl (*)

EUR

250

98.00

Milan, Italy

22/04/2015

Confectionery

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

5,000

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

2,850

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

100.00Amsterdam,
Netherlands

27/03/2000

Sub-holding company /Service company / Retail13/03/2014

RetailPRADA Far East bv (*)

EUR

20

Church Denmark aps

DKK

50

100.00Copenhagen,Denmark

Church Holding UK plc (*)

GBP

78,126100.00

Northampton,UK

22/07/1999

Sub-holding company

Church France sas

EUR

241

100.00Paris, France

01/06/1955

Retail100.00

Northampton,
UK

16/07/1987

Retail29/12/2000

RetailChurch UK Retail ltd

GBP

1,021

Church’s English Shoes
Switzerland sa

CHF

100

100.00

Lugano,Switzerland

Church & Co. ltd

GBP

2,811

100.00

Northampton,
UK

16/01/1926

Sub-holding company/
Production andDistribution

Church & Co. (Footwear) ltd

GBP

44

100.00

Northampton,
UK

06/03/1954

Trademark owner

25/02/1963

RetailChurch English Shoes sa

EUR

75

100.00Brussels,
Belgium

PRADA Czech Republicsro (*)

CZK

2,500

100.00Prague, Czech
Rep.

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 (*)

TRY41,000100.00Istanbul,
Turkey26/02/2009

RetailPRADA Ukraine llc (*)

UAH

30,000100.00Kiev, Ukraine

14/10/2011

RetailChurch Netherlands bv

EUR

18

100.00Amsterdam,
Netherlands

07/07/2011

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

24,000100.00Geneva,Switzerland

28/09/2012

RetailPrada Kazakhstan llp (*)

KZT500,000

100.00

Almaty, Kazakhstan

24/06/2013

RetailKenon Limited

GBP

84,000100.00London, UK

07/02/2013

Real estate company

Tannerie Limoges S.A.S (*)

EUR

1,200

60.00

Isle, France

19/08/2014

Production

Prada Denmark Aps (*)

DKK

50

100.00Copenaghen,
Denmark

19/05/2015

RetailPRADA 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/
RetailTRS Hawaii llc

USD

400

55.00

Honolulu,
U.S.A.

17/11/1999

Duty-free stores

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

45,138100.00

New York,
U.S.A.

18/02/1997

Real estate company

12/07/2011

RetailPRADA Retail Mexico,
S. de R.L. de C.V. (*)

MXN

142,058

100.00

Mexico City,
MexicoPRADA Brasil Importação e
Comércio de Artigos de Luxo
Ltda. (*)

BRL

87,000100.00

Sao Paulo,
Brazil12/04/2011

Retail

PRM Services S. de R.L. de
C.V. (*)

MXN

7,203

100.00

Mexico City,
Mexico27/02/2014

Services

15/09/2014

RetailPRADA Panama sa (*)

PAB

30

100.00Panama, Rep.
di Panama

PRADA Retail Aruba (*)

USD

2,012

100.00

Oranjestad,Aruba

25/09/2014

RetailPRADA Asia Pacific ltd

HKD

3,000

100.00Hong Kong

12/09/1997

Retail /Distribution/
Services

PRADA Taiwan ltd

TWD

3,800

100.00Hong Kong

16/09/1993

Retail100.00

Kuala Lumpur,
23/01/2002
Malaysia

RetailAsia-Pacific and Japan

PRADA Retail Malaysia Sdn.
Bnd.

88

MYR

1,000

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

372,000

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

TRS New Zealand ltd

NZD

100

55.00

Wellington,
New Zealand

04/11/1999

Duty-free stores

PRADA Australia Pty ltd

AUD

10,500100.00

Sydney,Australia

21/04/1997

RetailPRADA 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

PRADA Fashion Commerce(Shanghai) co ltd

RMB

474,950

100.00Shanghai,China

31/10/2005

RetailChurch Japan co ltd

JPY

31,525100.00Tokyo, Japan

17/04/1992

RetailChurch Hong Kong Retail ltd

HKD

1,000

100.00Hong Kong

04/06/2004

RetailChurch Singapore Pte. ltd

SGD

500

100.00Singapore

18/08/2009

RetailPRADA Hong Kong P.D. ltd (*)

HKD

11.000100.00Hong Kong

15/12/2011

Service company

Prada Dongguan Trading Co.,
Ltd

RMB

8,500

100.00

Dongguan,China

28/11/2012

Service company

Church Footwear (Shanghai)Co., Ltd

RMB

21.900100.00Shanghai,China

05/12/2012

RetailPrada New Zealand ltd

NZD

3,500

100.00Wellington,
New Zealand

05/07/2013

RetailPRADA India Fashion Private
ltd

INR

100

100.00

Mumbai, India 30/09/2013

RetailPRADA Vietnam Limited
Liability Company

VND

10,641,570

100.00Hanoi City,
Vietnam

09/09/2014

RetailPRADA Indonesia

IDR

3,023,844

100.00

Jakarta,Indonesia

15/10/2014

Distribution

PRADA Macau Co ltd

MOP

25

100.00Macau

22/01/2015

RetailPRADA Group

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Localcurrency

EntitySharecapital%(000s ofinterest
local
currency)

RegisteredofficeDate ofincorporation/ Main businessestablishment

Jebel Ali Free
Zone, Dubai

25/05/2011

Middle East
PRADA Middle East fzco (*)

AED

18,00060.00

Distribution/Services

PRADA Emirates llc (**)

AED

300

49.00

Dubai

04/08/2011

RetailPrada Kuwait wll (**)

KWD

50

49.00

Kuwait city

18/09/2012

RetailPrada Retail SPC (*)

QAR

15,000100.00Doha

03/02/2013

RetailPrada Saudi Arabia ltd (*)

AED

26,66675.00

Jeddah02/07/2014

RetailPRADA Maroc sarlau (*)

MAD

95,000100.00Casablanca,
Morocco

11/11/2011

RetailPRADA Retail South Africa
pty (*)

ZAR

50,000100.00

Sandton,South Africa

06/09/2014

RetailOther countries(*) Company owned directly by PRADA spa(**) Company consolidated based on definition of control per IFRS 10

Companies not included in scope of consolidation:
Company

PAC srl (in liquidation)

PRADA Group

Prada Group-Interim Financial Report 2oct 2015.indd 89

Percentage directinterest as at
July 31, 2015

Percentage directinterest as atJanuary 31, 2015

Note

Consolidation method

49.00

49.00

Associate

Equity method

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39. Information on Non-Controlling Interests
Financial information on the Non-Controlling Interests in the Group is provided below,
in accordance with IFRS 12. The values below reported are before the consolidation
adjustments.
Financial statements for the period ended July 31, 2015:
Subsidiary(amounts inthousands)

ownership

local
currency

total assets

net
net result
total netrevenues of the period
equity(six months) (six months)

dividends
notdistributed
to noncontrollinginterests

Artisans Shoes srl

67.00

EUR

30,2507,541

31,329608

TRS Hawaii llc

55.00

USD

9,149

4,945

8,469

(49)

1,018
-

TRS Hong Kong

55.00

HKD

1,000

830

-

(58)

22,500TRS Singapore

55.00

SGD

2,918

2,140

1,958

323

-

TRS Guam Partnership

55.00

USD

7,282

5,066

5,730

(700)

-

TRS Saipan Partnership

55.00

USD

2,819

2,024

3,072

382

-

TRS New Zealand ltd

55.00

NZD

2,447

1,944

1,674

285

-

TRS Okinawa KK

55.00

JPY

800,475

510,322845,190

126,705-

TRS Hong Kong
Branch in Macau

55.00

MOP

108,171

42,814

187,31430,002-PRADA Emirates llc (*)

49.00

AED

184,805

6,609

117,432(13,042)-PRADA Middle East fzco

60.00

AED

334,617

144,377

155,616

29,339-

Prada Kuwait wll (*)

49.00

KWD

6,973

77

4,816

(6)

-

Prada Saudi Arabia

75.00

AED

40,82621,004966(2,429)-Marchesi Angelo srl

80.00

EUR

869

408

858

(336)

-

Tannerie Limoges S.A.S (*)

60.00

EUR

3,336

27

-

(746)

-

Montenapoleone 9 srl (*)

98.00

EUR

250

250

-

-

-

net net result of
revenues
the period(twelve(twelvemonths)months)dividends
notdistributed
to noncontrollinginterests(*) Company consolidated based on definition of control per IFRS 10

Financial statements for the year ended January 31, 2015:
Subsidiary(amounts inthousands)

ownership

local
currency

total assets

total netequityArtisans Shoes srl

67.00

EUR

36,8689,990

75,4393,064

510

Pellettieri d’Italia srl

60.00

EUR

490

(926)

-

(1,021)-TRS Hawaii llc

55.00

USD

8,748

4,994

20,514

1,073-

TRS Hong Kong

55.00

HKD

1,067

889

-

(168)

63,000TRS Singapore

55.00

SGD

2,795

1,818

3,929

535

900

TRS Guam Partnership

55.00

USD

7,448

5,766

16,070

1,000

1,375

TRS Saipan Partnership

55.00

USD

2,440

1,643

7,315

1,211

450

TRS New Zealand ltd

55.00

NZD

2,299

1,659

5,291

905

585

TRS Okinawa KK

55.00

JPY

713,380

383,617

1,491,121

178,948

90,000TRS Hong Kong
Branch in Macau

55.00

MOP

144,425

64,312555,432

125,399-

PRADA Emirates llc (*)

49.00

AED

189,768

19,652258,920(2,253)-PRADA Middle East fzco

60.00

AED

282,303

115,039

268,481

33,639-

Prada Kuwait wll (*)

49.00

KWD

6,523

83

8,633

57

-

Prada Saudi Arabia

75.00

AED

27,10023,433-(2,233)-

Marchesi Angelo srl

80.00

EUR

1,601

744

2,479

212

-

Tannerie Limoges S.A.S (*)

60.00

EUR

1,402

774

-

(426)

-

(*) Company consolidated based on definition of control per IFRS 10

At the date of these consolidated financial statements, there were no significant
restrictions on the Group’s ability to access or utilize its assets and settle its liabilities.

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40. Events after the reporting period
Nothing to report.

PRADA Group

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