H1 2016 Cofide

SEMI ANNUAL INTERIM FINANCIAL REPORT
AS OF 30 JUNE 2016
CONTENTS
ADMINISTRATIVE BODIES
BOARD OF DIRECTORS .......................................................................................................................... 03
INTERIM REPORT ON OPERATIONS
1.
KEY FIGURES .................................................................................................................................. 05
2.
PERFORMANCE OF THE GROUP .................................................................................................... 08
3.
PERFORMANCE OF THE PARENT COMPANY ................................................................................. 12
4.
RECONCILATION OF THE PARENT COMPANYS FINANCIAL STATEMENTS WITH

THE CONSOLIDATED FINANCIAL STATEMENTS .............................................................................. 13
5.
PERFORMANCE OF THE SUBSIDIARIES........................................................................................... 15
6.
SIGNIFICANT EVENTS SUBSEQUENT TO 30 JUNE 2016 .................................................................. 20
7.
OUTLOOK FOR OPERATIONS ......................................................................................................... 20
8.
PRINCIPAL RISKS AND UNCERTAINTIES OF THE GROUP ................................................................ 20
9.
OTHER INFORMATION ................................................................................................................... 21
CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2016

1.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................. 24
2.
CONSOLIDATED INCOME STATEMENT .......................................................................................... 25
3.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ........................................................ 26
4.
CONSOLIDATED STATEMENT OF CASH FLOWS .............................................................................. 27
5.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................. 28
6.
EXPLANATORY NOTES .................................................................................................................... 29
CERTIFICATION OF THE SEMI-ANNUAL INTERIM FINANCIAL REPORT AS OF 30 JUNE 2016

IN ACCORDANCE WITH ART. 154 BIS OF D.LGS 58/98 ........................................................................... 95
SEPARATE FINANCIAL STATEMENTS AS OF 30 JUNE 2016
1.
STATEMENT OF FINANCIAL POSITION ........................................................................................... 98
2.
INCOME STATEMENT ..................................................................................................................... 99
3.
STATEMENT OF COMPREHENSIVE INCOME ..................................................................................100
4.
STATEMENT OF CASH FLOWS ........................................................................................................101
5.
STATEMENT OF CHANGES IN EQUITY ............................................................................................102
LIST OF EQUITY INVESTMENTS AS OF 30 JUNE 2016 ..............................................................................103

REPORT OF THE INDIPENDENT AUDITORS .............................................................................................111
This Semi-annual Interim Financial Report as of 30 June 2016 was prepared in accordance with Art. 154 ter of D.Lgs.
58/1998 and in conformity with applicable international accounting standards recognized in the European Union as per
EU Regulation no. 1606/2002 of the European Parliament and Council of July 19 2002, and specifically with IAS 34
Interim Financial Reporting, and also with the measures issued in implementation of Art. 9 of D. Lgs no. 38/2005.
This Semi-annual Interim Financial Report has been translated into English language solely for the convenience of
international readers. In the event of any ambiguity the Italian text will prevail.
COFIDE - Gruppo De Benedetti S.p.A.
Share Capital 359,604,959

Register of Companies ref. no. and Tax Code 01792930016
A company subject to management and coordination by FRATELLI DE BENEDETTI S.p.A.
Registered office and operations centre

20121 Milan, Via Ciovassino 1
Tel. (02) 72270.1 Fax (02) 72270.270
Administrative office
10129 Turin, Via Valeggio 41
Tel. and Fax (011) 5517 +
ADMINISTRATIVE BODIES
BOARD OF DIRECTORS
Honorary Chairman
and Director
CARLO DE BENEDETTI
Chairman
RODOLFO DE BENEDETTI (*)
Directors
SILVIA CANDIANI
FRANCESCA CORNELLI (1) (2)
MASSIMO CREMONA (1) (2) (3)
EDOARDO DE BENEDETTI
MARCO DE BENEDETTI
PAOLA DUBINI (1) (2)
PIERLUIGI FERRERO
FRANCESCO GUASTI (1) (2)
MARIA SERENA PORCARI (2)
Secretary to the Board
MASSIMO SEGRE
BOARD OF STATUTORY AUDITORS

Chairman
RICCARDO ZINGALES
Statutory Auditors
TIZIANO BRACCO
ANTONELLA DELLATORRE
Alternate Auditors
LUIGI NANI
LUIGI MACCHIORLATTI VIGNAT
PAOLA ZAMBON
INDEPENDENT AUDITORS
DELOITTE & TOUCHE S.p.A.
Notice in accordance with the recommendation of Consob contained in its Communiqu no. DAC/RM/97001574 of 20 February 1997
(*) Powers as per Corporate Governance
(1) Member of the Appointments and Compensation Committee
(2) Member of the Internal Control and Risks Committee
(3) Lead Independent Director
Interimreportonoperations
1. Keyfigures
TheCOFIDEGroupmadeconsolidatednetincomeinthefirstsixmonthsof2016of17.5million,
comparedwith20.3millioninthecorrespondingperiodoflastyear.
This result was essentially attributable to CIR, which contributed 14.1 million (18.6 million in the
firsthalfof2015)andCOFIDE,theparentcompany,whichcontributednetincomeof3.4million(
1.7millioninthefirsthalfof2015).
Inthefirstsixmonthsof2016CIRrecordedconsolidatednetincomeof25.9millioncomparedwith
36.4millioninthesameperiodlastyear;thedifferenceisentirelyduetolowerfinancialincomeat
thelevelofCIRandnonindustrialsubsidiariesandtothecapitalgainrealizedbyEspressointhefirst
halfof2015whenitsoldAllMusictoDiscovery.
The contribution made by the CIR Group's industrial subsidiaries amounts to 17.7 million,
comparedwith21.9millioninthefirstsixmonthsoflastyear.Excludingthecapitalgainondisposal
realizedbyEspressointhefirsthalfof2015,thecontributionhasgonefrom16.7millionto17.7
million.
In a market environment that is still difficult for the media and the press in particular, Espresso
posted a 4.2% decline in revenues, a very positive net result ( 12.1 million) and substantial cash
generation(28.9million);thenetfinancialpositionat30June2016waspositivefor18.2million.
Infirsthalf2015,netincomecameto22.1million,including9.3millionforthecapitalgainonthe
saleofAllMusic.
Sogefimanagedtoincreaseitsturnoverby4.6%,thankstogrowthinNorthAmericaandChina,and
despitethecrisisintheLatinAmericanmarket(salesexcludingMercosurgrewby7.6%).EBITDAhas
increased from 62.4 million in first half 2015 to 74.7 million in 2016, whereas the net result
decreasedslightly,goingfrom9.7millioninfirsthalf2015to8.3millionin2016,duetohigher
amortisation, depreciation and writedowns, financial expense and taxes. Cash flow resulted in
substantialbalanceinfirsthalf2016comparedwith51.9millioninfirsthalf2015(netdebtat30
June2016amountedto326.2million,moreorlessinlinewhatitwasat31December2015).
Lastly,KOSachieveda4.7%increaseinrevenues,thanksinparticulartothedevelopmentofnursing
homesfollowingtheacquisitionsmadein2015;netincomecameto9.6million,comparedwith
7.6millioninfirsthalf2015.Cashflowfortheperiod,beforedividends,waspositivefor3.4million
and net debt at 30 June 2016 amounted to 226.3 million, compared with 210.0 million at 31
December2015afterhavingdistributeddividendof29.9million.
CIRanditsnonindustrialsubsidiariescontributednetincomeof8.2millioncomparedwithanet
lossof14.5millioninthefirsthalfof2015;thereductionisduetothesignificantproceedsfrom
sellinghedgefundsinthefirsthalfof2015andloweryieldsontheequitiesportfolio.
COFIDE|2016INTERIMFINANCIALSTATEMENTS|REPORTONOPERATIONS
.5
ThenetdebtoftheparentcompanyCOFIDEhasgonefrom37.7millionat31December2015to
26.6 million at 30 June 2016, an improvement thanks to partial realization of the Jargonnant fund
andthereceiptofdividends,netofthosepaid,for5.9million.
Groupequityat30June2016was543.4millionversus567.8millionat31December2015. The
decrease,despitethe positivenetresultfortheperiod,isduetothedistributionofdividendsof
10.1millionandCIR'spurchaseofafurtherinterestinKOS,accountedforinaccordancewithIFRS3.
COFIDE's industrial subsidiaries are active in the following areas: media (publishing, radio, internet
and advertising), automotive components (suspension components, air filters and cooling), and
healthcare(carehomes,rehabilitation,cancercure,diagnosticandhospitalmanagement).
.6
InordertoprovidefurtherinformationonthefinancialperformanceoftheCOFIDEGroupinthefirst
half of 2016, the income statement and balance sheet are provided with a breakdown of the
subsidiaries'contributiontotheGroup'snetresultandequity.
Theincomestatementisasfollows:
1sthalf
2016
1sthalf
2015
Contributionsofinvestmentsinsubsidiaries:
CIRS.p.A.
14.1
18.6
TOTALCONTRIBUTIONS
14.1
18.6
5.1
3.7
Netfinancialincomeandexpense
(0.6)
(1.0)
Netoperatingcosts
(0.8)
(0.8)
(inmillionsofeuro)
Netgainsandlossesontradingandthevaluationofsecurities
RESULTBEFORETAXES
17.8
20.5
Incometaxes
(0.3)
(0.2)
NETRESULTFORTHEPERIOD
17.5
20.3
Thestatementoffinancialpositionat30June2016showsequityof543.4million,netdebtofthe
ParentCompanyof26.6millionandlongtermfinancialassetsof570.7million.
(inmillionsofeuro)
30.06.2016
31.12.2015
CIRS.p.A.
556.2
585.0
LONGTERMEQUITYINVESTMENTS
556.2
585.0
14.5
21.7
570.7
606.7
Otherlongtermfinancialassets
TOTALFINANCIALASSETS
Tangibleassets
Netreceivablesandpayables
NETINVESTEDCAPITAL
Financedby:
1.3
1.2
(2.0)
(2.4)
570.0
605.5
Equity
543.4
567.8
Netfinancialdebt
(26.6)
(37.7)
The"Otherlongtermfinancialassets"of14.5millionconsistmainlyofCOFIDE'sinvestmentinthe
Jargonnantrealestatefundfor4.8millionandtheinvestmentintheThreeHillsDecaliafund,which
investsinsmall/mediumsizedEuropeancompanies,for8.7million.
.7
2. PerformanceoftheGroup
Consolidated revenues for the first half of 2016 amounted to 1,319.1 million compared with
1,290.7millioninthesameperiodof2015,anincreaseof28.4million(+2.2%).Sogefirecordedan
4.6%increaseinturnover,KOSoneof4.7%,whiletherevenuesoftheEspressoGroupfellby4.2%,as
a consequence of the ongoing crisis that is affecting the entire publishing industry. Revenues
generatedoutsideItalyaccountedfor56.9%ofthetotal,thankstotheinternationaldevelopmentof
Sogefi.
Consolidatedrevenuesisbrokendownbybusinesssectorasfollows:
Media
EspressoGroup
Automotivecomponents
SogefiGroup
1sthalf
2016
1sthalf
2015
Absolute
change
292.9
22.2
305.7
23.7
(12.8)
(4.2)
798.6
60.5
763.7
59.2
34.9
Healthcare
KOSGroup
227.6
17.3
217.3
16.8
10.3
4.0
0.3
(4.0)
1,319.1
100.0
1,290.7
100.0
28.4
2.2
ofwhich:ITALY
568.8
43.1
578.5
44.8
(9.7)
(1.7)
OTHERCOUNTRIES
750.3
56.9
712.2
55.2
38.1
5.3
Othersectors
Totalconsolidatedrevenues
4.6
4.7
TheconsolidatedincomestatementoftheCOFIDEGroupisasfollows:
1sthalf
2016
1,319.1
126.4
Consolidatedoperatingincome(EBIT)
Financialmanagement(2)
(inmillionsofeuro)
Revenues
ConsolidatedEBITDA(1)
Incometaxes
Income/(loss)fromassetsheldforsale
Netincomeincludingminorityinterests
Netincomeminorityinterests
NetresultoftheGroup
100.0
1sthalf
2015
1,290.7
100.0
9.6
119.7
9.3
67.6
5.1
68.4
5.3
(6.2)
(0.5)
(2.3)
(0.1)
(17.2)
(1.3)
(16.7)
(1.3)
1.0
45.2
0.1
3.4
9.2
58.6
0.7
4.6
(27.7)
(2.1)
(38.3)
(3.0)
17.5
1.3
20.3
1.6
1) This is the sum of "earnings before interest and taxes (EBIT)" and "amortisation, depreciation and writedowns" in the consolidated
incomestatement.
2) Thisisthesumof"financialincome","financialexpense","dividends","gainsfromtradingsecurities","lossesfromtradingsecurities"
and"adjustmentstothevalueoffinancialassets"intheconsolidatedincomestatement.
Inthefirsthalfof2016,consolidatedEBITDAcameto126.4million(9.6%ofrevenues),compared
with119.7million(9.3%ofrevenues)inthefirsthalfof2015,anincreaseof6.7million(+5.6%).
TheincreaseisduetoSogefiandKOS,comparedwithaslightreductioninEBITDAofEspresso.
.8
ConsolidatedEBITforthefirsthalfof2016was67.6million(5.1%ofrevenues),slightlydownon
68.4 million (5.3% of revenues) in the same period of 2015 (1.1%); this change is due to higher
amortisation,depreciationandwritedownsatSogefi.
Financial management generated a net income of 6.2 million compared with a charge of 2.3
millioninthefirsthalfof2015.Indetail:
netfinancialexpensecameto25.1millioncomparedwith23.8millioninthefirsthalfof2015,
whichhadbenefitedfromnonrecurringincomeof1.5millionrecognisedbySogefiGroup(on
thefairvaluemeasurementofitsbond);
net gains on trading of securities and from dividends amounted to 17.5 million versus 21.7
millioninthefirstsixmonthsof2015,whichincludedproceedsrealizedfromthepartialsaleof
thehedgefundandprivateequityportfolio;
positive adjustments to financial assets of 1.4 million have been recorded compared with
negativeadjustmentsof0.2millioninthefirsthalfof2015.
ThecondensedconsolidatedstatementoffinancialpositionoftheCofideGroupat30June2016,
withcomparativefiguresat31December2015,isasfollows:
(inmillionsofeuro)
30.06.2016
31.12.2015
1,796.7
1,815.3
(91.1)
(68.6)
3.0
(14.2)
Netinvestedcapital
1,708.6
1,732.5
Netfinancialdebt
(244.8)
(159.4)
Totalequity
1,463.8
1,573.1
EquityoftheGroup
543.4
567.8
Minorityinterests
920.4
1,005.3
Fixedassets
Othernetnoncurrentassetsandliabilities
Networkingcapital
Net invested capital at 30 June 2016 stood at 1,708.6 million versus 1,732.5 million at 31
December2015,adecreaseof23.9million.
Theconsolidatednetfinancialpositionat30June2015,asmentionedpreviously,showednetdebt
of244.8million(comparedwith159.4millionat31December2015)causedby:
debt of 26.6 million for COFIDE, the parent company, compared with 37.7 million at 31
December2015;
a financial surplus pertaining to CIR and its nonindustrial subsidiaries of 313.3 million, down
comparedwiththe31December2015figureof417.9million.Thechangeof104.6millionwas
mainlycausedbytheincreaseindividendsreceivedof19.4millionandadecreaseinoutlayof
around 85 million for CIR's additional investment in KOS, purchases of treasury shares during
theperiodfor17.1millionandthedistributionofdividendfor29.5million;
bytotaldebtoftheindustrialsubsidiariesof531.5millioncomparedwith539.6millionat31
December2015.Thereductionof8.1millionismainlyattributabletotheimprovementinthe
financialpositionoftheEspressogroup(+28.9million)comparedwithanincreaseindebtfor
theKOSgroupof16.3millionandtheSogefigroupof3.9million.
Total equity at 30 June 2016 comes to 1,463.8 million, compared with 1,573.1 million at 31
December2015,adecreaseof109.3million.
.9
Group equity at 30 June 2016 amounted to 543.4 million compared with 567.8 million at 31
December2015,anetreductionof24.4million.
Minorityinterestsat30June2016amountedto920.4million,comparedwith1,005.3millionat
31December2015,adecreaseof84.9million.
Thenotestothefinancialstatementsexplainhowconsolidatedequityhasevolvedovertime.
The consolidated statement of cash flows for the first half of 2016, prepared according to a
"management" format which, unlike the version included in the financial statements, shows the
changes in net financial position rather than in cash and cash equivalents, can be summarised as
follows:
(inmillionsofeuro)
SOURCESOFFUNDS
Resultfortheperiodincludingminorityinterestsfromcontinuing
operations
Amortisation,depreciation,writedowns&othernonmonetarychanges
1sthalf2016
1sthalf2015
44.3
49.3
46.8
32.0
Selffinancing
91.1
81.3
Changeinworkingcapital
CASHFLOWGENERATEDBYOPERATIONSFROMCONTINUING
OPERATIONS
Increasesincapital
(2.4)
(23.3)
88.7
58.0
10.7
0.2
TOTALSOURCESOFFUNDSFROMCONTINUINGOPERATIONS
99.4
58.2
APPLICATIONSOFFUNDS
Netinvestmentinfixedassets
Pricepaidforbusinesscombinations
(30.9)
(64.1)
(0.1)
(51.1)
(20.4)
Netfinancialpositionofacquiredcompanies
Purchaseofminorityinterests
(84.5)
Buybackofownshares
(17.2)
(28.2)
Paymentofdividends
(41.7)
(6.9)
Otherchanges
TOTALAPPLICATIONSOFFUNDSFROMCONTINUINGOPERATIONS
FINANCIALSURPLUS(DEFICIT)FROMCONTINUINGOPERATIONS
CASHFLOWSFROMDISCONTINUEDOPERATIONS
(11.4)
14.3
(185.8)
(156.4)
(86.4)
(98.2)
1.0
9.2
(85.4)
(89.0)
NETFINANCIALPOSITIONATTHEBEGINNINGOFTHEPERIOD
(159.4)
(145.6)
NETFINANCIALPOSITIONATTHEENDOFTHEPERIOD
(244.8)
(234.6)
FINANCIALSURPLUS(DEFICIT)
.10
Inthefirsthalfof2016,theGrouprecordedafinancialdeficitof85.4million;againstsourcesof
funding of 99.4 million, there were uses for 185.8 million, consisting mainly of the further
investmentinKOSfor84.5million,thepaymentofdividendsforatotalof41.7millionandthe
purchaseoftreasurysharesfor17.2million.Net investmentsinfixedassetsamountedto30.9
million,downfrom64.1millioninthefirsthalfof2015,andrelateinparticulartotheSogefiand
KOSgroups.
Forabreakdownoftheitemsmakingupthenetfinancialposition,referenceshouldbemadetothe
sectioncontainingthefinancialstatements.
At30June2016theCOFIDEGrouphad14,607employees,comparedwith14,215at31December
2015.
.11
3. PerformanceoftheParentCompany
TheparentcompanyCOFIDESpAclosedthefirsthalfof2016withaprofitof19.4million,upfrom
1.7millioninthefirsthalfof2015thankstofinancialincome.
The condensed income statement of COFIDE for the first half of 2016, compared with the first six
monthsof2015,isasfollows:
Netoperatingcosts(1)
1sthalf
2016
(0.5)
1sthalf
2015
(0.7)
Otheroperatingcosts,amortisationanddepreciation(2)
(0.3)
(0.1)
Financialmanagement(3)
20.5
2.7
Resultbeforetaxes
19.7
1.9
Incometaxes
(0.3)
(0.2)
Netresult
19.4
1.7
(inmillionsofeuro)
1) Thisitemisthesumof"sundryrevenuesandincome","costsforthepurchaseofgoods","costsforservices"and"personnelcosts"in
theincomestatementofCOFIDES.p.A.
2) Thisitemisthesumof"otheroperatingcosts"and"amortisation,depreciationandwritedowns"intheincomestatementofCOFIDE
S.p.A.
3) This item is the sum of "financial income", "financial expense", "dividends", "gains from trading securities", "losses from trading
securities"and"adjustmentstothevalueoffinancialassets"intheincomestatementofCOFIDES.p.A.
In the first half of 2016, the result of financial management, 20.5 million, derives from
dividendspaidbyCIRof16.0million,gainsfromtradingsecuritiesof4.5million,adjustments
tothevalueoffinancialassetsof0.6millionandinterestexpenseof0.6million.
The condensed statement of financial position of COFIDE S.p.A. at 30 June 2016, with
comparativefiguresat31December2015,isasfollows:
(inmillionsofeuro)
Fixedassets(1)
30.06.2016
31.12.2015
575.0
575.0
Othernetnoncurrentassetsandliabilities(2)
14.5
21.3
Networkingcapital(3)
(1.9)
(2.0)
Netinvestedcapital
587.5
594.3
Netfinancialposition(4)
(26.6)
(37.7)
Equity
561.0
556.6
1) This item is the sum of "intangible assets", "tangible assets", "investment property" and "equity investments in subsidiaries" in the
statementoffinancialpositionofCOFIDES.p.A.,theParentCompany.
2) Thisitemisthesumof"securities"and"otherreceivables"innoncurrentassetsand"otherpayables"and"personnelprovisions"in
noncurrentliabilitiesinthestatementoffinancialpositionofCOFIDES.p.A.
3) This item is the sum of "other receivables" in current assets and "trade payables" and "other payables" in current liabilities in the
statementoffinancialpositionofCOFIDES.p.A.
4) Thisitemisthesumof"securities"and"cashandcashequivalents"incurrentassets,"otherborrowings"innoncurrentliabilitiesand
"overdrafts"and"otherborrowings"incurrentliabilitiesinthestatementoffinancialpositionofCOFIDES.p.A.,theParentCompany.
Equityat30June2016stoodat561.0million,comparedwith556.6millionat31December2015.
Thechangeisduetotheresultfortheperiodlessthedividenddistributionof10.1millionandthe
reductioninthefairvaluereserve.
.12
4. Reconciliation of the Parent Company's financial

statementswiththeconsolidatedfinancialstatements
The following is a reconciliation between the net result and equity of the Group with the parent
company'sfigures.
Equity
30.06.2016
Netresult
1sthalf
2016
Equity
30.06.2015
Netresult
1sthalf
2015
FinancialstatementsofCofideS.p.A.(Parent
Company)
560,973
19,457
560,795
1,742
Dividendsfromconsolidatedcompanies
(16,006)
(16,006)
81,806
14,092
64,014
18,583
(83,424)
(64,421)
543,349
17,543
560,388
20,325
(inthousandsofeuro)
Netcontributionofconsolidatedcompanies
Differencebetweenthecarryingvaluesof
investeecompaniesandtheportionsoftheir
equityincludedintheconsolidation,netoftheir
contributions
Otherconsolidationadjustments
Consolidatedfinancialstatements(Groupshare)
.13
MainGroupinvestments
at30June2016
54.4% (*)
56.5%(*)
57.4% (*)
62.7% (*)
noncore
Investments
BUSINESSES
Allmediasectors
fromdailiesand
periodicalstoradio,
internetandadvertising
Globalautomotive
componentssupplier
(filters,engineair,
andcoolingsystems
andsuspensions
(*)thepercentageiscalculatednetoftreasuryshares
.14
Nursinghomes,
rehabilitationand
Hospital
management
PrivateEquity
5. Performanceofthesubsidiaries
CIR GROUP Asalreadymentioned,inthefirsthalfof2016theCIRGroupachievedconsolidatednet
incomeof25.9million,comparedwith36.4millioninthesameperiodlastyear.
ThefollowingisasummaryofthecontributionsmadebyCIR'smainsubsidiariestotheconsolidated
resultandequity:
1sthalf
2015
1sthalf
2016
(inmillionsofeuro)
CONTRIBUTIONSTONETRESULT
EspressoGroup
SogefiGroup
KOSGroup
Totalformainsubsidiaries
Othersubsidiaries
CIRandotherholdingcompanies
Assetsheldforsale
NetresultoftheCIRGroup
6.9
4.8
6.0
17.7
12.4
5.6
3.9
21.9
(0.2)
8.4
25.9
0.1
14.4
36.4
Asmentionedpreviously,thecontributionmadebytheindustrialsubsidiarieswasof17.7million,
comparedwith21.9millioninthesameperiodof2015,andtheaggregatecontributionofCIRand
theothernonindustrialsubsidiarieswasincomeof8.2million(14.5millioninthefirsthalfperiod
of 2015). The difference in the results is entirely due to lower financial income at the level of the
parentcompanyanditsnonindustrialsubsidiariesandthecapitalgainrealizedbyEspressoinfirst
half2015,thankstothesaleofAllMusictoDiscovery.
(inmillionsofeuro)
CONTRIBUTIONSTOEQUITY
EspressoGroup
SogefiGroup
KOSGroup
Othersubsidiaries
Totalsubsidiaries
CIRandothernonindustrialsubsidiaries
investedcapital
netfinancialposition
EquityoftheCIRGroup
30.06.2016
31.12.2015
339.4
332.2
96.5
98.4
160.9
136.2
1.7
598.5
423.1
109.8
313.3
1,021.6
1.8
568.6
534.4
116.5
417.9
1,103.0
Consolidatedequityhasgonefrom1,103millionat31December2015to1,021.6millionat30
June 2016. The decrease, despite the significantly positive net result for the period, is due to the
distribution of dividends for 29.5 million, the purchase of own shares for 17.1 million and
accountingforthefurtherinvestmentinKOS,acquiredfromArdian,inaccordancewithIFRS3.
TherenowfollowsamoreindepthanalysisofthebusinesssectorsoftheCIRGroup.
.15
MEDIA
TheEspressogroupclosedthefirsthalfof2016withconsolidatedrevenueof292.9million,down
by 4.2% compared with 305.7 million in first half 2015, a softer decline compared with previous
years.
Grouprevenuesareasfollows:
(inmillionsofeuro)
1sthalf2016
1sthalf2015
Change
Amounts
Amounts
Circulationandaddons
122.2
41.7
128.2
41.9
(4.7)
Advertising
170.7
58.3
177.5
58.1
(3.8)
TOTAL
292.9
100.0
305.7
100.0
(4.2)
According to figures published by Nielsen Media Research, advertising expenditure in first five
monthsof2016roseby2.7%comparedwiththesameperiodof2015.
The upswing in investment has involved television and radio, which grew by 6.1% and 2.0%,
respectively.
After a positive first quarter, Internet turned in a negative performance in April and May, which
resultedina1.9%declineintotaladvertisingincomeinJanuaryMay2016comparedwiththesame
periodlastyear.
Lastly,asregardsprintadvertising,thetrendwasnegative(4.3%)anddidnotshowsignificantsigns
of improvement compared with the trend in the same period of 2015 (5.0%): in particular, the
declineinnationaladvertisingcameto3.6%,whilethatoflocaladvertisingcameto5.4%.
As for newspaper circulation, according to the figures published by ADS (Accertamento Diffusione
Stampa), in the period from January to May 2016 sales on newsstands and by subscription fell by
7.7%.
The Group's circulation revenues (including addons) amounted to 122.2 million, a decrease of
4.7%onthesameperiodlastyear(128.2million),inamarketthatiscontinuingtoseeasignificant
declineindailynewspapersales.
Advertisingrevenuesare3.8%down,takingintoaccountthegeneraltrendinprintadvertising.Radio
advertising was broadly in line with the same period last year, while the press and Internet were
affectedbythecriticaltrendinthemarket.
Costswentdownby3.2%;inparticular,industrialcostsandpersonnelcostshavedecreased,taking
intoaccountthattheaverageworkforcefellby4.4%comparedwiththefirsthalfof2015.
ConsolidatedEBITDAamountedto27.3millioncomparedwith31millioninthefirsthalfof2015.
ConsolidatedEBITcameto19.9millionversus23.6millioninthesameperiodlastyear.
NetIncomefromcontinuingoperationsamountedto11.2million,comparedto12.9millionin
thefirsthalfof2015.ThesaleofAllMusictoDiscoveryItaliainlateJanuary2015resultedincapital
gains,whichhavebeenbookedunderdiscontinuedoperations,amountingto9.3millioninthefirst
half of 2015 and 1.0 million in the first half of 2016, relating to the price adjustment agreed
between the parties. Consolidated net income, including discontinued operations, amounted to
12.1million,comparedwith22.1millioninthefirsthalfof2015.
Thenetfinancialpositionat30June2016waspositivefor18.2million,havingpostedafinancial
surplusof28.9millionduringtheperiod.Comparedwith30June2015,theimprovementinthenet
financialpositioncomesto23.2million.
.16

The Group's workforce at 30 June, including those on shortterm contracts, amounted to 2,211
employees.
On2March2016CIRsignedamemorandumofunderstandingwithitssubsidiaryGruppoEditoriale
LEspresso,ITEDI(thecompanythatpublishesthenewspapersLaStampaandIlSecoloXIX)andthe
shareholders of the latter (FCA and Ital Press Holding S.p.A. of the Perrone family) with a view to
creatingItaly'slargestpublishinggroupandoneoftheprincipalgroupsinEuropeinthefieldofdaily
anddigitalnews.Thedealhasconsiderableindustrialvalueasitisdesignedtointegratetwogroups
withcomplementaryactivitiesandaimstoachieverisingeconomiesofscale.Uponcompletion,CIR
will remain the majority shareholder with more than 40% of Gruppo Editoriale L'Espresso. The
companyresultingfromthisdealwillremainlistedontheItalianStockExchange.Allofthetitleswill
maintain full editorial independence. The deal, which is subject to authorization by the competent
authoritiesandtherespectiveshareholders'meetings,isscheduledforthefirstquarterof2017.
Asregardsforecastsfortheentireyear,despitethefactthattheadvertisingmarket'sdevelopment
in the second half is still uncertain, the Group could achieve a net result, excluding nonrecurring
items,inlinewiththatofthepreviousyear.
AUTOMOTIVE COMPONENTS
TheSogefiGroupendedthefirsthalfof2016withconsolidatedrevenuesof798.6million,upby
4.6%from763.7millioninthecorrespondingperiodof2015.
1sthalf2016
1sthalf2015
Amounts
Amounts
Change
%
Suspension
289.5
36.3
287.1
37.6
0.8
Filtration
270.7
33.9
274.0
35.9
(1.2)
AirandCooling
240.4
30.1
204.7
26.8
17.4
Other
(2.0)
(0.3)
(2.1)
(0.3)
n.a.
TOTAL
798.6
100.0
763.7
100.0
4.6
(inmillionsofeuro)
Inthefirsthalfof2016thecarmarketagainturnedinapositivetrend,withworldgrowthinoutput
of 2% for personal cars and 4.0% for the heavy duty vehicles. The trend was supported by the EU
market (+7% for personal cars), China (+6%) and NAFTA countries (+3%). On the other hand, the
Mercosurcrisiscontinues,withtheproductionofpersonalcarsdownby22%comparedwiththefirst
halfof2015.
AsregardsSogefi,revenuesinEuropeareupby1.8%overfirsthalf2015andthesignificantbusiness
developmentinNorthAmerica(24.6%)andAsia(25.4%)hascontinued.InSouthAmerica,revenues
in euro decreased by 18.3% because of the devaluation of the local currencies and the persistent
crisisinthemarket.ExcludingSouthAmerica,growthcameto7.6%.
TheproportionofnonEuropeancountriesontotalrevenuesoftheGrouproseto36.5%from34.7%
in the first half of 2015 thanks to strong growth in the North American and Asian markets. In
particular,theweightingofNAFTAandAsiaroseto26.9%from22.4%inthefirsthalfof2015,while
thatofMercosurfellfrom11.8%to9.2%.
Revenue growth in the first half of 2016 was supported above all by the Air and Cooling segment,
whichrecordedanincreaseof17.4%.TherevenuesoftheSuspensionsegmenthavegrownby0.8%,
.17
though without Mercosur the increase would have been of 4.7%. The revenues of the Filtration
segmentfellby1.2%,butexcludingMercosurtheygrewby3.2%.
EBITDA amounted to 74.7 million, up 19.6% from 62.4 million in the corresponding period of
2015.Theincreasewasduetorevenuegrowthandincreasedprofitability,risingto9.3%from8.2%
inthefirsthalfof2015,thankstoaslightincreaseinthecontributionmarginandaslightdecreasein
the incidence of indirect costs. In particular, overall labour costs as a percentage of revenues
decreasedto21.7%,from22.6%.EBITDAhasgoneupinallregionsexceptSouthAmerica.
As regards the risk of claims, for Sogefi Air & Refroidissement France SAS (formerly Systmes
MoteursSAS),therewerenochangesinthe"productwarranty"risksinthefirsthalfof2016suchas
torequirechangesintheprovisionmadeat31December2015.AsregardstherecoveryfromDayco,
the seller of Sogefi Air & Refroidissement France SAS, the arbitration procedure ended in May,
orderingthecompanytopaySogefi9.4millionforclaimsalreadypaid.However,theawardturned
outtobe4millionlessthanwhatSogefiexpectedtorecover,sothisamounthadanegativeimpact
onthefirsthalf2016result.
EBIT amounted to 36.6 million, an increase of 20.1% over the first six months of 2015, after
depreciation,amortisationandwritedownsoffixedassets.
Financial expense increased to 16.8 million, compared with 14.7 million in the corresponding
periodof2015;thisincreaseismainlyduetothegainrecordedinthefirsthalfof2015forthefair
valuemeasurementoftheembeddedderivativeintheconvertiblebond.
Thenetresultwaspositivefor8.3million,aslightdecreasecomparedwith9.7millioninfirsthalf
2015duetohighertaxcharges.
Net debt at 30 June 2016 amounted to 326.2 million, in line with 31 December 2015 ( 322.3
million)andanimprovementof21.8millionon30June2015(348million).Freecashflowforthe
firsthalfof2016amountedto0.2millioncomparedwith51.9millioninthefirstsixmonthsof
2015.Thisimprovementisattributableforaround19milliontolowernonrecurringoutlaysrelated
toproductwarrantiesandrestructuringand,fortheremainder,toabettertrendinoperatingcash
flow,aswellasmorefactoringtransactions.
At30June2016,equity,excludingminorityinterests,cameto168.2million(170.8millionat31
December2015).
Thenumberofemployeesat30June2016was6,795comparedwith6702at31December2015.
For the entire year, Sogefi expects a positive contribution from North America, China and India. In
Europe, growth could be more moderate than in 2015, in line with what was observed in the first
half,whilemarketconditionsinSouthAmericaremaindifficult.
.18
HEALTHCARE
The KOS Group currently manages 76 facilities, mainly in central and northern Italy, for a total of
around7,200beds,operatinginthreestrategicareas:
1) Care homes: management of residential care homes for the elderly and psychiatric care
communities, with 45 nursing facilities and 9 psychiatric rehabilitation facilities, for a total of
5,213bedsinuse(ofwhich5,017incarehomes);
2) Rehabilitation: management of hospitals and rehabilitation centres, including 21 rehabilitation
facilities(withthreecarehomesfortheelderly)and14hospitals,foratotalof1,878beds;
3) Hospital management: management of a hospital and cancer cure and diagnostics in 33 public
andprivatefacilities.
Inthefirstsixmonthsof2016,theKOSGroupachievedaconsolidatedturnoverof227.6million,up
4.7%from217.3millioninthesameperiodlastyear.Theincreaseinrevenueswasdrivenbycare
homes for the elderly (+9.9%), which performed very well thanks to organic growth and the
acquisitionof"ArgentoVivo"in2015.
(inmillionsofeuro)
Carehomes
1sthalf2016
1sthalf2015
Change
Amounts
Amounts
100.2
44.0
91.2
42.0
9.9
Rehabilitation
87.9
38.6
85.8
39.5
2.4
Acute/Hitech
39.5
17.4
40.3
18.5
(1.7)
227.6
100.0
217.3
100.0
4.7
TOTAL
ConsolidatedEBITDAamountedto37.1million,8.8%upon34.1millioninthefirstsixmonthsof
2015.
ConsolidatedEBITcameto22.4million,comparedwith21.3millioninthesameperiodlastyear.
Consolidatednetincomeamountsto9.6millioncomparedwith7.6millioninthefirstsixmonths
of2015.
At30June2016theKOSGrouphadnetdebtof226.3million,comparedwith210millionat31
December2015.Theincreaseismainlyduetothedistributionofdividendsduringtheperiod.
During the half year, on 17 May, CIR and F2i Healthcare, a subsidiary of the Secondo Fondo F2i,
completedthepurchasefromArdianof46.7%ofKOSforatotalof292million.
TheGrouphad5,462employeesat30June2016comparedwith5,194at31December2015.
Asfortheoutlook,notethatgrowingdemandsforcutsinpublicspending,alreadypartlyintroduced
in certain regions where the Group operates, may reduce the resources allocated to public and
privatehealthspending;theimpactontheKOSGroupisnotexpectedtobesignificant.
.19
NONCORE INVESTMENTS
Theyarerepresentedbyprivateequityfundinvestments,minorityinterestsandotherinvestments
amountingto111.8millionat30June2016,comparedwith113.7millionat31December2015.
PRIVATEEQUITY
CIRInternational,aGroupcompany,managesadiversifiedportfolioofinvestmentsinprivateequity
funds. The overall fair value of the portfolio at 30 June 2016, based on the NAVs provided by the
variousfunds,cameto55.3million,adecreaseof4.0millioncomparedwith31December2015,
primarilyduetotheeffectofwritedowns,capitalrepaymentsandexchangeratedifferences(that
impactequity).Totaldistributionsintheperiod,amountingto5.8million,generatedacapitalgain
of4.2million.Outstandingcommitmentsat30June2016amountedto4.9million.
OTHERINVESTMENTS
At30June2016,CIRhaddirectandindirectinvestmentsinnonstrategicinvestmentsforatotalof
15.5millionandaportfolioofnonperformingloansforatotalof41million.
In the first half of 2016, CIR International sold a 5.5 million investment in China, making a net
capitalgainof6.5million.
6. Significanteventssubsequentto30June2016
IntheHealthcaresector,duringthemonthofJuly,adeedofsalewassignedforthebusinesscarried
oninViaBarbarano,Rome,toIstitutodiRiabilitazioneS.StefanoS.r.l.relatingtothemanagementof
atotalof118beds,aspartofacompetitiveprocedurebeforetheCourtofTurin.Thetransactionis
subject to the condition precedent of obtaining the necessary reregistrations from the Lazio
RegionalAuthorities.
On 8 July 2016 Sogefi SpA received 4.9 million from Dayco Europe Srl, being its share of the
compensationof9.4millionestablishedbythearbitrationaward.
7. Outlookforoperations
The performance of the Cofide Group during the second half of the year will be influenced by
developments in the Italian economy, the impact of which is significant, especially in the media
sector, as well as by the performance of major global automotive markets for the components
sector.
8. PrincipalrisksanduncertaintiesoftheGroup
ThemainriskfactorstowhichtheCOFIDEGroupisexposedaresubstantiallythesameasthosethat
featuredin2015.
Foradetaileddescriptionoftheserisks,pleaserefertotheinformationcontainedintheSection8of
the Report of the Board of Directorswhich forms part of the financial statements at 31 December
2015.
Fortherisksrelatedtospecificsituations,pleaserefertotheinformationinsection5"performance
of the subsidiaries" of this Report and in the notes to the consolidated financial statements at 30
June2016.
.20
9. Otherinformation
TRANSACTIONSWITHGROUPCOMPANIESANDRELATEDPARTIES
On28October2010theCompanyadoptedtheRegulationsonRelatedPartyTransactionsenvisaged
inConsobResolutionno.17221of12March2010,asamendedbyResolutionno.17389of23June
2010. This procedure can be found on the website: www.cofide.it in the "Corporate Governance
section.
TheprocedurelaysdownprinciplesofconductthattheCompanyisrequiredtoadopttoensurethat
relatedpartytransactionsarehandledproperly.Thismeansthatit:
1.laysdownthecriteriaandmethodsofidentifyingtheCompany'srelatedparties
2.establishesprinciplesforidentifyingrelatedpartytransactions
3.governstheproceduresforcarryingoutrelatedpartytransactions
4.establisheswaystoensurecompliancewiththerelateddisclosurerequirements.
TheBoardofDirectorshasalsoappointedaRelatedPartyTransactionsCommittee,establishingthat
itsmemberscoincidewiththoseoftheInternalControlandRiskCommittee,exceptforthesystemof
substitutesenvisagedintheprocedures.
Pursuanttothelaw,wewouldpointoutthatnotransactionswerecarriedoutduringthefirsthalfof
2016 with the ultimate parent company Fratelli De Benedetti S.p.A., which performs management
andcoordinationactivities.
TheCOFIDEGroupdidnotcarryoutanytransactionswithrelatedparties,asdefinedbyCONSOB,or
with entities other than related parties that could be considered transactions of an atypical or
unusual nature, outwith normal business administration or such as to have a significant impact on
theGroup'sresults,assetsandliabilitiesorfinancialsituation.
OTHER
CofideGruppoDeBenedettiS.p.A.hasitsregisteredofficeinViaCiovassino1,20121Milan
(MI),Italy.
COFIDEshares,whichhavebeenquotedontheMilanStockExchangesince1985,havebeentraded
ontheOrdinarySegmentMTAsince2004(Reutercode:COFI.MI,Bloombergcode:COFIM).
Thisreportfortheperiod1January30June2016wasapprovedbytheBoardofDirectorson29July
2016.
TheCompanyissubjecttomanagementandcoordinationbyFratelliDeBenedettiS.p.A.
.21
.22
COFIDE GROUP
CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
.23
1.Consolidatedstatementoffinancialposition
(inthousandsof euro )
ASSETS
Notes
NONCURRENTASSETS
INTANGIBLEASSETS
TANGIBLEASSETS
INVESTMENTPROPERTY
INVESTMENTSINCOMPANIESCONSOLIDATEDATEQUITY
OTHEREQUITYINVESTMENTS
OTHERRECEIVABLES
ofwhichwithrelatedparties(*)
SECURITIES
DEFERREDTAXES
(7.a.)
(7.b.)
(7.c.)
(7.d.)
(7.e.)
(7.f.)
(7.f.)
(7.g.)
(7.h.)
CURRENTASSETS
INVENTORIES
CONTRACTWORKINPROGRESS
TRADERECEIVABLES
OTHERRECEIVABLES
FINANCIALRECEIVABLES
SECURITIES
AVAILABLEFORSALEFINANCIALASSETS
CASHANDCASHEQUIVALENTS
(8.b.)
(8.b.)
(8.c.)
(8.c.)
(8.d.)
(8.e.)
(8.f.)
(8.g.)
ASSETSHELDFORSALE
(8.h.)
30.06.2016
2,065,615
992,611
647,067
20,674
130,873
5,443
84,201
2,693
(8.a.)
2,693
87,383
104,747
1,346,516
135,058
39,201
449,392
1,412,396
134,055
39,178
415,937
1,395
2,259
113,385
569
TOTALASSETS
LIABILITIESANDEQUITY
NONCURRENTLIABILITIES
BONDS
OTHERBORROWINGS
OTHERPAYABLES
DEFERREDTAXES
PERSONNELPROVISIONS
PROVISIONSFORRISKSANDLOSSES
97,565
655
28,289
75,140
235,398
270,653
30,496
131,012
251,510
312,643
11,582
9,005
3,423,713
3,515,946
30.06.2016
(9.a.)
(9.b.)
(9.c.)
(10.a.)
(10.b.)
(7.h.)
(10.c.)
(10.d.)
CURRENTLIABILITIES
BANKOVERDRAFTS
BONDS
OTHERBORROWINGS
ofwhichtorelatedparties(*)
TRADEPAYABLES
OTHERPAYABLES
PROVISIONSFORRISKSANDLOSSES
(11.a.)
(11.b.)
(11.b.)
(11.c.)
(11.c.)
(11.d.)
(11.d.)
(10.d.)
LIABILITIESHELDFORSALE
(8.h.)
ELIMINATIONSFROMANDTODISCONTINUEDOPERATIONS
TOTALLIABILITIESANDEQUITY
(*)
2,094,545
997,652
659,109
20,916
131,833
5,830
87,075
80,518
104,228
ELIMINATIONSFROMANDTODISCONTINUEDOPERATIONS
EQUITY
SHARECAPITAL
RESERVES
RETAINEDEARNINGS(LOSSES)
NETINCOME(LOSS)FORTHEYEAR
GROUPEQUITY
MINORITYINTERESTS
31.12.2015
As per Consob Resolution no. 6064293 of 28 July 2006
.24
31.12.2015
1,463,775
359,605
78,682
87,519
17,543
543,349
920,426
1,573,078
359,605
110,571
78,901
18,687
567,764
1,005,314
979,643
275,232
342,161
12,023
139,537
131,621
79,069
1,060,437
288,366
421,910
9,321
135,235
124,622
80,983
970,913
22,384
19,990
194,487
875,769
19,517
5,011
150,316
447,112
2,067
428,173
2,251
220,248
200,985
66,692
71,767
9,382
6,662
3,423,713
3,515,946
2.Consolidatedincomestatement
(inthousandsofeuro)
Notes
SALESREVENUES
(12)
ofwhichfromrelatedparties(*)
(12)
1 st half2016
1,319,146
CHANGEININVENTORIES
COSTSFORTHEPURCHASEOFGOODS
(13.a.)
(13.a.)
COSTSFORSERVICES
(13.b.)
(13.b.)
PERSONNELCOSTS
(13.c.)
OTHEROPERATINGINCOME
(13.d.)
(13.d.)
OTHEROPERATINGCOSTS
(13.e.)
(13.e.)
1 st half 2015(**)
1,290,737
1,325
10,670
(498,046)
(483,948)
(307,988)
(2,703)
(312,441)
(979)
(363,987)
(362,020)
11,980
834
34,713
922
(38,190)
(60,134)
ADJUSTMENTSTOTHEVALUEOFINVESTMENTS
CONSOLIDATEDATEQUITY
(7.d.)
AMORTISATION,DEPRECIATION&WRITEDOWNS
2,186
2,157
(58,776)
(51,352)
67,650
68,382
EARNINGSBEFOREINTEREST
ANDTAXES(EBIT)
FINANCIALINCOME
(14.a.)
(14.a.)
FINANCIALEXPENSE
(14.b.)
(14.b.)
5,935
19
(31,018)
262
10,053
23,594
(14.d.)
(538)
(2,147)
(14.e.)
1,433
(190)
61,468
66,060
(17,202)
(16,726)
44,266
49,334
1,000
9,251
45,266
58,585
(27,723)
(38,260)
17,543
20,325
0.0244
0.0244
0.0283
0.0283
GAINSFROMTRADINGSECURITIES
(14.c.)
LOSSESFROMTRADINGSECURITIES
ADJUSTMENTSTOTHEVALUEOFFINANCIALASSETS
INCOME(LOSS)BEFORETAXES
(15)
INCOME(LOSS)AFTERTAXESFROM
OPERATINGACTIVITY
INCOME/(LOSS)FROMASSETSHELDFORSALE
NETINCOME(LOSS)FORTHEPERIODINCLUDINGMINORITYINTERESTS
MINORITYINTERESTS
NETINCOME(LOSS)OFTHEGROUP
BASICEARNINGS(LOSS)PERSHARE(ineuro)
(16)
DILUTEDEARNINGS(LOSS)PERSHARE(ineuro)
(16)
(*)
(32,521)
7,953
DIVIDENDS
INCOMETAXES
8,680
364
(**) Some values of 2015 have been reclassified
.25
3.Consolidatedstatementofcomprehensiveincome
(inthousandsofeuro)
Income/(Loss)fortheperiodofcontinuingoperations
1 st half
2016
1 st half
2015(*)
44,266
49,334
(13,211)
(1,522)
2,510
305
Itemsofothercomprehensiveincomethatcannotbereclassifiedtoprofitandloss
Actuarialgains(losses)
Taxesonothercomprehensiveincomethatcannotbereclassifiedtoprofitandloss
Otheritemsofcomprehensiveincomethatcanbereclassifiedtoprofitandloss
Exchangedifferencesontranslationofforeignoperations
(3,958)
8,111
Netchangeinfairvalueofavailableforsalefinancialassets
(9,201)
(6,630)
Netchangeincashflowhedgereserve
2,392
4,174
Otheritemsofcomprehensiveincome
158
(313)
(1,147)
(21,623)
3,291
1,000
23,607
TOTALSTATEMENTOFCOMPREHENSIVEINCOMEOFTHEPERIOD
23,643
76,232
Totalcomprehensiveincomeattributableto:
Shareholdersoftheparentcompany
Minorityinterests
6,330
17,313
25,312
50,920
BASICEARNINGS(LOSS)PERSHARE(ineuro)
DILUTEDEARNINGS(LOSS)PERSHARE(ineuro)
0.0088
0.0088
0.0352
0.0352
Taxesonitemsofothercomprehensiveincomethatcanbereclassifiedtoprofitandloss
Totalitemsofothercomprehensiveincomeoftheperiod ofcontinuingoperations
Itemsofstatementofcomprehensiveincomediscontinuedoperations
(*) Some values of 2015 have been reclassified
.26
4.Consolidatedstatementofcashflows
(inthousandsof euro)
1sthalf
2016
1sthalf
2015(*)
44,266
49,334
58,776
(2,186)
2,405
(13,201)
(1,433)
10,804
(13,199)
51,352
(2,157)
2,268
(21,377)
190
19,378
(42,710)
86,232
56,278
ofwhich:
interestreceived(paid)
incometaxpayments
(19,922)
(3,740)
(18,370)
(12,279)
INVESTINGACTIVITY
PRICEPAIDFORBUSINESSCOMBINATIONS
NETFINANCIALPOSITIONOFACQUIREDCOMPANIES
PURCHASEOFMINORITYINTERESTS
(PURCHASE)SALEOFSECURITIES
PURCHASEOFFIXEDASSETS
(100)
(84,457)
74,438
(30,874)
(51,139)
(20,405)
10,382
(70,312)
CASHFLOWFROMINVESTINGACTIVITYCONTINUINGOPERATIONS
(40,993)
(131,474)
FINANCINGACTIVITY
INFLOWSFORCAPITALINCREASES
OTHERCHANGESINEQUITY
DRAWDOWN/(REPAYMENT)OFOTHERBORROWINGS/FINANCIALRECEIVABLES
BUYBACKOFOWNSHARES
DIVIDENDSPAID
10,696
(11,429)
(31,526)
(17,164)
(41,673)
206
14,208
(2,340)
(28,226)
(6,908)
CASHFLOWFROMFINANCINGACTIVITYCONTINUINGOPERATIONS
(91,096)
(23,060)
INCREASE(DECREASE)INNETCASHANDCASHEQUIVALENTSCONTINUINGOPERATIONS
(45,857)
(98,256)
1,000
9,251
NETCASHANDCASHEQUIVALENTSOPENINGBALANCE
293,126
333,214
NETCASHANDCASHEQUIVALENTSCLOSINGBALANCE
248,269
244,209
OPERATINGACTIVITY
NETINCOME(LOSS)FORTHEPERIODINCLUDINGMINORITYINTERESTSCONTINUINGOPERATIONS
ADJUSTMENTS:
SHAREOFRESULTSOFCOMPANIESCONSOLIDATEDATEQUITY
ACTUARIALVALUATIONOFSTOCKOPTION/STOCKGRANTPLANS
CHANGESINPERSONNELPROVISIONS,PROV.FORRISKS&LOSSES
INCREASE(DECREASE)INNONCURRENTRECEIVABLES/PAYABLES
(INCREASE)DECREASEINNETWORKINGCAPITAL
CASHFLOWFROMOPERATINGACTIVITYCONTINUINGOPERATIONS
NETCASHANDCASHEQUIVALENTSOPENINGBALANCEOFDISCONTINUEDOPERATIONS
(*) Some values of 2015 figures have been reclassified.
.27
5.Consolidatedstatementofchangeinequity
Attributable to shareholders of the parent company
(in thousands of euro)

Balance at 31 December 2014
Capital increases
Dividends to Shareholders
Retained earnings
Effects of equity changes in subsidiaries
Comprehensive result for the year
Fair value measurement of hedging instruments
Fair value measurement of securities
Securities fair value reserve released to income statement
Currency translation differences
Actuarial gains (losses)
Result for the period
Total comprehensive result for the year
Balance at 31 December 2015
Capital increases
Dividends to Shareholders
Retained earnings
Comprehensive result for the year
Fair value measurement of hedging instruments
Fair value measurement of securities
Securities fair value reserve released to income statement
Currency translation differences
Actuarial gains (losses)
Result for the period
Total comprehensive result for the year
Balance at 30 June 2016
Share
capital
Reserves
Retained
earnings
(losses)
Net income
(losses) for the
year
Total
Minority
interests
Total
359,605
----
89,883
----
93,369
--(14,468)
(14,468)
--14,468
528,389
----
1,030,068
289
(8,001)
--
1,558,457
289
(8,001)
--
--
15,470
--
--
15,470
(70,551)
(55,081)
----
6,038
1,438
(7,538)
----
----
6,038
1,438
(7,538)
11,900
239
(7,006)
17,938
1,677
(14,544)
-----
76
2,124
3,080
--
-----
---18,687
76
2,124
3,080
18,687
203
(2,008)
7,190
42,991
279
116
10,270
61,678
--
18,687
23,905
18,687
--
567,764
-(10,069)
--
1,005,314
10,696
(31,604)
--
1,573,078
10,696
(41,673)
--
(20,676)
(81,293)
(101,969)
--
5,218
359,605
----
110,571
---
--
(20,676)
--
----
560
(6,862)
(292)
----
----
560
(6,862)
(292)
1,259
(1,542)
(245)
1,819
(8,404)
(537)
-----
54
(1,329)
(3,344)
--
-----
---17,543
54
(1,329)
(3,344)
17,543
104
(2,629)
(7,357)
27,723
158
(3,958)
(10,701)
45,266
--
(11,213)
--
17,543
6,330
17,313
23,643
359,605
78,682
87,519
17,543
543,349
920,426
1,463,775
.28
78,901
-(10,069)
18,687
(18,687)
53,509
77,414
6. Explanatorynotes
1. Structureandcontentofthefinancialstatements
Thesecondensedinterimconsolidatedfinancialstatementshavebeenpreparedinaccordancewith
internationalaccountingstandards(IAS/IFRS)issuedbytheInternationalAccountingStandardsBoard
("IASB")andwiththerelatedinterpretationoftheInternationalFinancialReportingInterpretations
Committee(IFRIC)andratifiedbytheEuropeanUnioninforceat30June2016.Pleaserefertothe
section entitled "Adoption of new accounting standards, interpretations and amendments" for an
illustrationofthenewstandardsintoforcewitheffectfrom1January2016.Inparticular,notethat
theadoptionofthenewstandardshadnoimpactontheGroup'sequityandincomestatement.
TheseinterimfinancialstatementshavebeenpreparedonacondensedbasisinaccordancewithIAS
34 "Interim Financial Reporting". Being condensed, they do not include all of the information
requiredforannualreportsandshouldbereadinconjunctionwiththefinancialstatementsforthe
yearended31December2015.
The consolidated financial statements at 30 June 2016 include the parent company Cofide S.p.A.
(hereinafterCOFIDE)anditssubsidiaries,andwerepreparedusingtheaccountsoftheindividual
companies included in the scope of consolidation; these correspond to their separate interim
financialstatementsortheconsolidatedstatementsofsubgroups,examinedandapprovedbytheir
respective boards and amended and restated where necessary to bring them into line with the
accountingprincipleslistedbelowand,wherecompatible,withItalianregulations.
Theclassificationformatsadoptedareasfollows:
thestatementoffinancialpositionisorganisedbymatchingitemsonthebasisofcurrentand
noncurrentassetsandliabilities;
theincomestatementisshownbytypeofexpenditure;
thestatementofcashflowshasbeenpreparedusingtheindirectmethod;
thestatementofchangesinequitygivesabreakdownofthechangesthattookplaceintheperiod
andinthepreviousyear;
thestatementofcomprehensiveincomeshowstheincomeitemsthataresuspendedinequity.
These condensed interim consolidated financial statements have been prepared in thousands of
euro, which is the Group's "functional" and "presentation" currency in accordance with IAS 21,
exceptwhereindicatedotherwise.
Itshouldalsobenotedthatsomevaluationprocesses,particularlythemorecomplexonessuchas
the determination of impairment of noncurrent assets, are generally carried out only when
preparing the annual financial statements, when all the necessary information is more likely to be
available with a reasonable degree of accuracy, except in cases where there are indications of
impairmentthatrequiresanimmediateassessmentofanypermanentlosses.
Incometaxesarerecognisedonthebasisofthebestestimateoftheweightedaveragetaxratefor
theentireyear.
On 2 March 2016, the Espresso Group and ITEDI (publishing house whose titles include La Stampa
and Il Secolo XIX, both daily newspapers) announced the signature of a memorandum of
COFIDE|2016INTERIMFINANCIALSTATEMENTS|CONSOLIDATEDFINANCIALSTATEMENTS
.29
understanding for the creation of Italy's foremost publishing group. This group, which will also be
amongtheleadersinEuropeintheprovisionofdailyanddigitalinformation,willbeformedonthe
absorption of ITEDI by Gruppo Editoriale L'Espresso. Uniting the authoritative strength of such
historicaltitlesasLaRepubblica,LaStampa,IlSecoloXIXandthenumerousdailynewspapersowned
bytheEspressoGroup,thisoperationwillbecarriedoutinfullcompliancewiththeregulationsthat
govern the concentration of the publishing sector. Accordingly, work is currently in progress to
analyseanddeterminethetransactionsrequired,forvariousreasons,toenabletheGroup,withits
new ownership profile, to comply with the limits on nationwide distribution envisaged in art. 3 of
Law67/1987.Thesetransactionswillincludethesaleofanumberoftitles.
In accordance with IFRS 5 "Noncurrent assets held for sale and discontinued operations", assets
andliabilitiesheldforsalehavebeenclassifiedunder"Assets/Liabilitiesheldforsale".
Itshouldalsobenotedthat,asregardsactivitiesinthe"Education"sector,duringthepreviousyear
CIR S.p.A. decided to stop this line of business; in particular, following the receipt of several
expressionsofinterestfrominvestorsforthepurchaseofSouthlandsS.r.l.,itwasdecidedtoinitiate
negotiations with a view to selling the investment. Therefore, in accordance with IFRS 5 "Non
current assets held for sale and discontinued operations", assets and liabilities held for sale have
been classified under "Assets/liabilities held for sale" and the costs and revenues achieved by the
companyuptothedateofthetransferhavebeenclassifiedunder"Income/(loss)fromassetsheld
forsale",togetherwiththedifferencebetweenthebookvalueandthefairvalueofthecompany.
2. Consolidationprinciples
2.a.
Consolidationmethods
ThescopeofconsolidationincludesallcompaniesoverwhichtheGroupexercisescontrolpursuant
toIFRS10.
Under the definition of "control", an investor controls an investee when it has power over the
relevantactivities,isexposedtovariablereturnsarisingfromitsinvolvementwiththeinvesteeand
hastheabilitytoaffectthosereturnsbyexercisingitspowerovertheinvestee.
Subsidiaries are fully consolidated from the date on which the Group takes control and are de
consolidatedwhensuchcontrolceasestoexist.
Consolidationisonalinebylinebasis.
Themaincriteriausedwhenapplyingthismethodarethefollowing:
thecarryingvalueofeachinvestmentiseliminatedagainsttheGroup'sshareofitsequityandthe
difference between the acquisition cost and net equity of investee companies is posted, where
appropriate,totheassetandliabilityitemsincludedintheconsolidation.Ifthereisabalanceleft
over,itispostedtoincomeifnegativeortoassetsasgoodwillifpositive.Goodwillistestedfor
impairmentbasedonitsrecoverablevalue;
significanttransactionsbetweenconsolidatedcompaniesareeliminatedonconsolidation,asare
receivablesandpayablesandunrealisedprofitsontransactionsbetweenGroupcompanies,netof
tax;
minority interests in equity and the net result for the period are shown separately in the
consolidatedstatementoffinancialpositionandincomestatement.
.30
Associates
AllcompaniesinwhichtheGrouphasasignificantinfluence,withouthavingcontrol,inaccordance
withIAS28,areconsideredassociates.SignificantinfluenceispresumedtoexistwhentheGrouphas
between 20% and 50% of the voting rights (excluding cases of joint control). Associates are
consolidated using the equity method from the date on which the Group acquires significant
influenceintheassociateandaredeconsolidatedfromthemomentwhenthisinfluencenolonger
exists.
Themaincriteriausedwhenapplyingtheequitymethodarethefollowing:
thecarryingvalueofeachinvestmentiseliminatedagainsttheGroup'sshareofitsequityandany
positive difference identified at the time of the acquisition, net of any impairment; the
correspondingshareofthenetincomeorlossfortheperiodispostedtotheincomestatement.If
the Group's portion of the associate's accumulated losses exceeds the carrying value of the
investment, the investment is written off and any further losses are not recorded, unless the
Grouphasacontractualobligationtodoso;
any unrealised gains and losses generated by transactions between Group companies are
eliminated,exceptwherethelossesreflectimpairmentoftheassociate'sassets;
theaccountingpoliciesofassociatesareamended,wherenecessary,tobringthemintolinewith
thoseoftheGroup.
Jointventures
JointventuresaremeasuredusingtheequitymethodpursuanttoIFRS11.
2.b. Translationofforeigncompanies'financialstatementsintoeuro
Foreign subsidiaries' financial statements (assuming they do not operate in a hyperinflationary
economy as defined by IAS 29) get translated into euro at the yearend exchange rate for the
statement of financial position and at the average exchange rate for the income statement. Any
exchangedifferencesarisingontranslationofshareholders'equityattheyearendexchangerateand
oftheincomestatementattheaverageratearepostedto"Otherreserves"inequity.
Themainexchangeratesusedarethefollowing:
USdollar
2016
Averageexchange
rate
1.1159
30.06.2016
1.1102
2015
Averageexchange
rate
1.1095
31.12.2015
1.0887
Swissfranc
1.09605
1.0867
1.06786
1.0835
GBpound
0.7785
0.8265
0.7257
0.7340
Brazilianreal
Argentinepeso
Chineserenminbi
Indianrupee
4.1350
3.5898
3.6390
4.3116
15.9898
16.5810
10.2114
14.0964
7.2934
7.3757
6.9691
7.0607
74.9625
74.9625
71.1238
72.0461
NewRomanianleu
4.4956
4.5235
4.4450
4.5241
Canadiandollar
1.4854
1.4384
1.4158
1.5116
20.1613
20.6356
17.5623
18.9143
8.6655
8.6133
8.5977
8.4374
Mexicanpeso
HongKongdollar
.31
2.c.
Scopeofconsolidation
Theconsolidatedfinancialstatementsat30June2016andtheconsolidatedfinancialstatementsof
thepreviousyeararetheresultofconsolidatingCOFIDE(ParentCompany)andallofthecompanies
directly or indirectly controlled, jointly controlled or associated as of those dates. Assets and
liabilitiesscheduledfordisposalarereclassifiedtospecificassetandliabilityitemstohighlightthese
circumstances.
A list of the equity investments included in the scope of consolidation, with an indication of the
consolidation method used, is given in the appropriate section of this report, along with a list of
thosethathavebeenexcluded.
With reference to the provisions of IFRS 12, the following is the disclosure on noncontrolling
interestspresentinminorityinterestsandassociatesdeemedrelevantfortheGroup.
The Group has defined as relevant for these purposes the companies representing at least 2% of
totalassets,netofassetsheldforsale,or5%oftotalGrouprevenues.
At30June2016therearenorelevantcompanieswithsignificantnoncontrollinginterests.
Among relevant associates, Persidera S.p.A. (interest held through the Espresso Group) meets the
aboverequirements;itsfiguresaregivenbelow:
PersideraS.p.A.
(inthousandsofeuro)
30.06.2016
Revenues
40,318
Netincome
6,658
Comprehensiveincome
6,830
Noncurrentassets
148,144
Currentassets
45,950
Totalassets
194,094
Noncurrentliabilities
57,859
Currentliabilities
42,922
Totalliabilities
100,781
Changeinthescopeofconsolidation
The main changes in the scope of consolidation compared with the previous year concern the
following:
MEDIA
Thescopeofconsolidationhasnotchangedcomparedwiththepreviousyear.
.32
AUTOMOTIVECOMPONENTS
Sogefi Suspension France S.A. increased its holding in S.ara Composite S.A.S. from 95% to 95.43%
duringthefirsthalfof2016.
Therewerenootherchangesinthescopeofconsolidationduringtheperiod.
HEALTHCARE
Exceptasdescribed,therewerenochangesinthescopeofconsolidationduringthefirstofthisyear.
PurchaseoftheCasaMarchettilineofbusinessfor1,200thousandresultedintherecognitionof
goodwilltotalling1,088thousand.
CIRS.p.A.increaseditsequityinterestinKOSS.p.A.from51.26%to62.73%.
3. Accountingpolicies
3.a.
Intangibleassets(IAS38)
Intangibleassetsarerecognisedonlyiftheycanbeseparatelyidentified,ifitislikelythattheywill
generatefutureeconomicbenefitsandifthecostcanbemeasuredreliably.
Intangible assets with a finite useful life are valued at purchase or production cost, net of
amortisationandaccumulatedimpairment.
Intangibleassetsareinitiallyrecognisedatpurchaseorproductioncost.
Purchasecostisrepresentedbythefairvalueofthemeansofpaymentusedtopurchasetheasset
and any additional direct cost incurred to prepare the asset for use. The purchase cost is the
equivalentpriceincashatthedateofrecognition;wherepaymentisdeferredbeyondnormalterms
ofcredit,thedifferencecomparedwiththecashpriceisrecognisedasinterestforthewholeperiod
ofdeferment.
Amortisationiscalculatedonastraightlinebasisovertheexpectedusefullifeoftheassetandstarts
whentheassetisreadyforuse.
Intangible assets with an indefinite useful life are not amortised, but monitored constantly for
impairment. Itis mainly theEspressoGroup's newspaper/magazine titlesandTV/radiofrequencies
thatareconsideredintangibleassetswithanindefiniteusefullife.
The carrying value of intangible assets is maintained to the extent that there is evidence that this
value can be recovered through use; to this end, an impairment test is carried out at least once a
yeartocheckthattheintangibleassetisabletogeneratefuturecashflows.
Development costs are recognised as intangible assets when their cost can be measured reliably,
whenthereisareasonableassumptionthattheassetcanbemadeavailableforuseorforsaleand
that it is able to generate future benefits. Once a year or any time it appears to be justified,
capitalisedcostsareimpairmenttested.
Researchcostsarechargedtotheincomestatementasandwhentheyareincurred.
Trademarksandlicences,whichareinitiallyrecognisedatcost,aresubsequentlyaccountedfornetof
amortisationandaccumulatedimpairment.Theperiodofamortisationisdefinedasthelowerofthe
contractualdurationforuseofthelicenceandtheusefullifeoftheasset.
Software licences, including associated costs, are recognised at cost and are recorded net of
amortisationandanyaccumulatedimpairment.
"Customerrelationships"representsthevalueassignedduringthepurchasepriceallocationprocess
tothecustomerportfoliooftheSystmesMoteursGroupatthedateofacquisitionofcontrol.
"Name" represents the value assigned during the purchase price allocation process to the name
"SystmesMoteurs"atthedateofacquisitionofcontrol.
.33
Goodwill
In the event of the acquisition of companies, the identifiable assets, liabilities and contingent
liabilitiesacquiredarerecognisedattheirfairvalueasattheacquisitiondate.Thepositivedifference
betweentheacquisitioncostandtheGroup'sshareofthefairvalueoftheseassetsandliabilitiesis
classifiedasgoodwillandrecordedinthestatementoffinancialpositionasanintangibleasset.Any
negativedifference("badwill")ispostedtotheincomestatementatthetimeofacquisition.
After initial recognition, goodwill is measured at cost less any accumulated impairment. Goodwill
alwaysreferstoidentifiedincomeproducingassets,whoseabilitytogenerateincomeandcashflow
ismonitoredconstantlyforimpairment.
Seeparagraph3.x.below(BusinessCombinationsandGoodwill).
3.b. Tangibleassets(IAS16)
Tangible assets are recognised at purchase price or production cost, net of accumulated
depreciation.
Cost includes associated expenses and any direct and indirect costs incurred at the time of
acquisitionandneededtomaketheassetreadyforuse.Financialchargesrelatingtospecificloans
forlongterminvestmentsarecapitaliseduptothedatewhentheassetsbecomeoperational.
When there are contractual or compulsory obligations for decommissioning, removing or clearing
siteswherefixedassetsareinstalled,thevaluerecognisedalsoincludesadiscountedestimateofthe
coststhatwillbeincurredfortheirdisposal.
Fixed assets are depreciated each year on a straightline basis over the residual useful life of the
assets.
Land,assetsunderconstructionandadvancepaymentsarenotdepreciated.
Landandbuildingsnotusedforcorporateoperatingpurposesareclassifiedunderaseparateasset
itemandaccountedforonthebasisofIAS40"Investmentproperty"(seeparagraph3.e.below).
In the event of circumstances that suggest that an asset has been impaired, its carrying value is
checked against its recoverable value (i.e. fair value or value in use, whichever is the higher). Fair
valuecanbeestablishedonthebasisofvaluesexpressedbyanactivemarket,recenttransactionsor
the best information available at the time with a view to determining the potential proceeds of
sellingtheasset.Valueinuseisdeterminedbydiscountingthecashflowsexpectedfromusingthe
asset,applyingbestestimatesofitsresidualusefullifeandaratethattakesintoaccounttheimplicit
riskofthespecificbusinesssectorsinwhichtheGroupoperates.Thisvaluationiscarriedoutforeach
individualassetorforthesmallestidentifiablecashgeneratingunit(CGU).
Ifthereisanegativedifferencebetweenthesevaluesandthecarryingvalue,theassetgetswritten
down; if subsequently the reasons for the impairment no longer apply, the asset is revalued. Such
writedownsandrevaluationsarepostedtotheincomestatement.
3.c. Governmentgrants
Governmentgrantsarerecognisedwhenthereisareasonabledegreeofcertaintythattherecipient
willcomplywiththeconditionsforthegrant,whetherornotthereisaformalresolutionawardingit;
inotherwords,whenitishighlylikelythatthegrantwillbereceived.
Capitalgrantsarerecognisedinthestatementoffinancialpositioneitherasdeferredincome,which
isthentransferredtotheincomestatementovertheusefullifeoftheassetbeingfinanced,thereby
reducingthedepreciationcharge,orbydeductingthemdirectlyfromtheassetinquestion.
Government grants obtainable in the form of a reimbursement of expenses and costs already
incurred or to provide immediate support for the recipient without there being any future costs
relatedtothegrant,arerecognisedasincomeintheperiodinwhichtheycanbeclaimed.
.34
3.d.
Leasedassets(IAS17)
Lease contracts for assets where the lessee substantially assumes all the risks and rewards of
ownershipareclassifiedasfinanceleases.Wheresuchfinanceleasesexist,theassetisrecognisedat
the lower of its fair value and the present value of the minimum lease payments stipulated in the
contracts. Total lease payments are allocated between the financial element and the capital to be
reimbursed in such a way as to obtain a constant rate of interest on the outstanding debt. The
residualleasepayments,netoffinancialcharges,areclassifiedasborrowings.Theinterestexpenseis
chargedtotheincomestatementovertheperiodofthelease.Assetsacquiredunderfinanceleases
are depreciated to an extent consistent with the nature of the asset. Lease contracts in which the
lessorsubstantiallyretainstherisksandrewardsofownership,ontheotherhand,areclassifiedas
operatingleasesandpaymentsmadeundersuchleasesarechargedtotheincomestatementona
straightlinebasisovertheperiodofthelease.
In the event of a sale and leaseback agreement, any difference between the selling price and the
carryingvalueoftheassetisnotrecognisedtotheincomestatementunlesstheassetitselfsuffersan
impairmentloss.
3.e. Investmentproperty(IAS40)
Investmentpropertyisproperty(landorabuilding,orpartofabuilding,orboth)held(bytheowner
orbythelesseeunderafinancelease)toearnrentalsorforcapitalappreciationorboth,ratherthan
foruseintheproductionorsupplyofgoodsorservicesorforadministrativepurposes,orforsalein
theordinarycourseofbusiness.
The cost of an investment property is represented by its purchase price, as well as any
improvements,replacementsandextraordinarymaintenance.
Forselfconstructedinvestmentproperty,anestimateismadeofallcostsincurreduptothedateon
whichtheconstructionordevelopmentisfinished.Untilthatdate,IAS16applies.
Inthecaseofanassetheldunderafinancelease,theinitialcostisdeterminedaccordingtoIAS17as
the lower of the fair value of the property and the present value of the minimum lease payments
due.TheGrouphasoptedforthecostmethodtobeappliedtoallinvestmentpropertyheld.Under
thecostmethod,thevalueismeasurednetofdepreciationandanyimpairmentlosses.
3.f. Impairmentofintangibleandtangibleassets(IAS36)
AtleastonceayeartheGroupverifieswhetherthecarryingvalueofintangibleandtangibleassets
(includingcapitaliseddevelopmentcosts)arerecoverable,inordertodeterminewhethertheassets
havesufferedimpairment.Ifsuchevidenceexists,thecarryingvalueoftheassetsisreducedtoits
recoverablevalue.
Anintangibleassetwithanindefiniteusefullifeistestedforimpairmentatleastonceayear;more
frequentlyifthereisanysignthatitmayhavesufferedalossinvalue.
Whenitisnotpossibletoestimatetherecoverablevalueofanindividualasset,theGroupestimates
therecoverablevalueofthecashgeneratingunittowhichtheassetbelongs.
Therecoverablevalueofanassetisthehigherofitsfairvaluelesscoststosellanditsvalueinuse.
Todeterminethevalueinuseofanasset,theGroupcalculatesthepresentvalueofestimatedfuture
cash flows, applying a discount rate that is consistent with the cash flows and which reflects the
currentmarketassessmentofthetimevalueofmoneyandthespecificrisksofthebusinesssector.
Animpairmentlossisrecognisediftherecoverablevalueislowerthanthecarryingvalue.Ifatalater
date the loss on an asset (other than goodwill) no longer exists or is less than it was, the carrying
value of the asset or of the cash generating unit is written up to the new estimated recoverable
value, though it cannot exceed the value that it would have had if no impairment loss had been
recognised.Thereversalofanimpairmentlossisrecognisedimmediatelyintheincomestatement.
.35
3.g.
Otherinvestments
Investments in companies where the Parent Company does not exercise a significant influence are
accountedforinaccordancewithIAS39,whichmeansthatthey areclassifiedasavailableforsale
andmeasuredatfairvalue,oratcostifthefairvalueormarketpricecannotbereliablyestimated.
3.h. Receivablesandpayables(IAS32,39and21)
Receivablesandpayablesareinitiallyrecognisedattheirfairvalue,whichusuallycorrespondstothe
nominal value. Receivables are adjusted, where necessary, to their estimated realisable value.
Subsequently,receivablesandpayablesaremeasuredatamortisedcost.
Receivablesandpayablesinforeigncurrenciesareinitiallyaccountedforattheratesofexchangein
force on the transaction date. They are then adjusted to the periodend exchange rates and any
exchangegainsandlossesarerecognisedtotheincomestatement(seeparagraph3.u.below).
3.i. Securities(IAS32and39)
In accordance with IAS 32 and IAS 39, investments in companies other than subsidiaries and
associatesareclassifiedasavailableforsalefinancialassetsandmeasuredatfairvalue.
Gainsandlossesresultingfromfairvalueadjustmentsarerecordedinaspecialequityreserve.Inthe
eventofimpairmentlossesorwhentheassetsaresold,thegainsandlossespreviouslyrecognisedto
equityaretransferredtotheincomestatement.
Notethatpurchasesandsalesarerecognisedonthetradedate.
This category also includes financial assets bought or issued and then classified either as held for
tradingoratfairvaluethroughprofitandlossaccordingtothefairvalueoption".
For further details of the accounting treatment of financial assets, we would refer readers to the
specificnoteon"FinancialInstruments".
3.l. Incometaxes(IAS12)
Currenttaxesareprovidedforonthebasisofarealisticestimateoftaxableincomeundercurrenttax
regulationsofthecountryinwhichthecompanyisbased,takingintoaccountanyexemptionsand
taxcreditsthatmaybeclaimed.
Deferred taxes are calculated on the basis of any temporary differences (taxable or deductible)
between the carrying values of assets and liabilities and their tax bases and are classified as non
currentassetsandliabilities.
Adeferredtaxassetisrecognisedtotheextentthattaxableincomewillprobablybeavailableinthe
futuretooffsetdeductibletemporarydifferences.
Thecarryingvalueofdeferredtaxassetsissubjecttoperiodicanalysisandisreducedtotheextent
that it is no longer probable that there will be sufficient taxable income to take advantage of the
deferredtaxasset.
3.m. Inventories(IAS2)
Inventories are shown at the lower of weighted average purchase or production cost and their
estimatedrealisablevalue.
.36
3.n.
Cashandcashequivalents(IAS32and39)
Cash comprises cash on hand and demand deposits. Cash equivalents are shortterm, highly liquid
investmentsthatarereadilyconvertibleintocashandwhichhaveaninsignificantriskofchangesin
value.
3.o. Equity
Ordinary shares are recorded at their nominal value. Costs directly attributable to the issuance of
newsharesaredeductedfromequityreserves,netofanyrelatedtaxbenefit.
Treasurysharesareshownseparatelyasadeductionfromreserves;anysubsequentsale,reissuance
orcancellationwillnothaveanyimpactontheincomestatement,onlyonequity.
Unrealisedgainsandlossesonfinancialassetsclassifiedas"availableforsale"arerecognised,netof
tax,underequityinthefairvaluereserve.
Thereserveisreversedtotheincomestatementwhenthefinancialassetisrealisedorimpairmentto
itisrecognised.
The hedging reserve is formed when fair value changes are recognised on derivatives which have
beendesignatedas"cashflowhedges"or"hedgesofnetinvestmentsinforeignoperations"forthe
purposesofIAS39).
Theportionofgainsandlossesconsidered"effective"isrecognisedtoequityandisreversedtothe
income statement as and when the elements being hedged are in turn recognised to the income
statement,orwhenthesubsidiaryissold.
When a subsidiary prepares its financial statements in a currency different from the Group's
functional currency, the subsidiary's financial statements are translated and any translation
differencesarerecognisedinaspecialreserve.Whenthesubsidiaryissoldthereserveisreversedto
theincomestatement,accountingforanygainsorlossesonthedisposal.
"Retained earnings (losses)" include accumulated earnings and balances transferred from other
reserveswhenthesearereleasedfromanypreviouslimitations.
This item also shows the cumulative effect of any changes in accounting principles and/or the
correctionoferrors,whichareaccountedforinaccordancewithIAS8.
3.p. Borrowings(IAS32and39)
Loans are initially recognised at cost, represented by their fair value net of any transaction costs
incurred. Subsequently, borrowings are measured at amortised cost calculated by applying the
effective interest rate method, taking into consideration any issuance costs incurred and any
premiumordiscountappliedatthetimetheinstrumentissettled.
3.q. Provisionsforrisksandlosses(IAS37)
Provisionsforrisksandlossesrefertoliabilitieswhichareprobable,butwheretheamountand/or
maturity is uncertain. They are the result of past events which will cause a future cash outflow.
Provisionsarerecognisedexclusivelyinthepresenceofacurrentobligationtothirdparties,whether
legalorimplicit,whichimpliesanoutflowandwhenareliableestimateoftheamountinvolvedcan
bemade.Theamountrecognisedasaprovisionisthebestestimateofthedisbursementrequiredto
settletheobligationasatthereportingdate.Theprovisionsrecognisedarereviewedatthecloseof
eachaccountingperiodandadjustedtorepresentthebestcurrentestimate.Changesintheestimate
arerecognisedtotheincomestatement.
.37
When the estimated outflow relating to the obligation is expected in a time horizon longer than
normal payment terms and the discount factor is significant, the provision represents the present
value,discountedatanominalriskfreerate,oftheexpectedfutureoutflowstosettletheobligation.
Contingentassetsandliabilities(potentialassetsandliabilities,orthosenotrecognisedbecauseno
reliableestimate canbe made)arenotrecognised.However, adequatedisclosureonsuchitemsis
provided.
3.r. Revenuesandincome(IAS18)
Revenuesfromthesaleofgoodsarerecognisedatthetimeownershipandtherisksrelatedtothe
goodsaretransferred,netofreturns,discountsandrebates.
Servicerevenuesarerecognisedatthetimetheserviceisprovided,basedonitsstageofcompletion
atthereportingdate.
Incomefromdividends,interestandroyaltiesisrecognisedasfollows:
dividends, when the right to receive payment is established (with a balancing entry under
receivableswhendistributionisapproved);
interest,usingtheeffectiveinterestratemethod(IAS39);
royalties,onanaccrualbasis,inaccordancewiththeunderlyingcontractualagreement.
3.s.
Employeebenefits(IAS19)
Benefitstobepaidtoemployeesonterminationoftheiremploymentandotherlongtermbenefits
aresubjecttoactuarialvaluation.
Following this methodology, liabilities recognised represent the present value of the obligation
adjustedforanyactuarialgainsorlossesnotaccountedfor.
FinanceLawno.296/2006madeimportantchangestoemployeeleavingindemnity(TFR)regulations,
introducing the option for workers to transfer their indemnity maturing after 1 January 2007 to
selected pension schemes. Therefore, all employee leaving indemnity accrued as at 31 December
2006foremployeeswhoexercisedthisoption,whileremainingwithinthesphereofdefinedbenefit
plans, was determined using actuarial methods that exclude the actuarial/financial components
relatingtofuturechangesinsalary.
EURegulation475/2012endorsedtheamendmentstoIAS19EmployeeBenefits,asapprovedby
the IASB on 16 June 2011, with the aim of promoting the understanding and comparability of
financialstatements,particularlywithreferencetodefinedbenefitplans.Themostimportantchange
istheeliminationofthedifferentaccountingtreatmentsthatwerepermittedforrecordingdefined
benefit plans and the consequent introduction of a single method that envisages immediate
recognitioninthestatementofcomprehensiveincomeofanyactuarialgainsorlossesthatarisefrom
measuringtheobligation.ComparedwiththepreviousaccountingtreatmentadoptedbytheGroup,
the main impact is the elimination of the "corridor method", with immediate recognition in the
statement of comprehensive income, and therefore in equity, of changes in the value of the
obligationsandtheplanassets.TheeliminationofthismethodhadanimpactonGroupequityatthe
dateoffirstapplicationofthenewstandard,asactuarialgainsandlossesnotpreviouslyrecognised
underthecorridormethodhavenowbeenrecognised.
IFRS 2 "Sharebased Payment" issued in February 2005 with validity from 1 January 2005 (revised
versioneffective1January2010)requiresthatapplicationshouldberetrospectiveinallcaseswhere
.38
stockoptionswereassignedafter7November2002andwherethevestingconditionsoftheplans
hadnotyetmaturedattheeffectivedate.
Inaccordancewiththisstandard,theCOFIDEGroupnowmeasuresandrecognisesthenotionalcost
of stock options and stock grants to the income statement under personnel costs and apportions
themthroughoutthevestingperiodofthebenefit,withabalancingentryintheappropriateequity
reserve.
The cost of the option is determined at the award date of the plan, applying special models and
multiplyingbythenumberofoptionsexercisableoverthereferenceperiod,assessedwiththeaidof
appropriateactuarialvariables.
Similarly,thecostresultingfromtheassignmentofphantomstockoptionsisdeterminedinrelation
to the fair value of the options at the assignment date and is recognised to the income statement
under personnel costs over the vesting period of the benefit; unlike for stock options and stock
grants, the balancing entry is recorded under liabilities (other personnel provisions) and not in an
equityreserve.Untilthisliabilityisextinguisheditsfairvalueisrecalculatedateachreportingdate
and on the date of actual disbursement and all fair value changes are recognised to the income
statement.
Similarly,thecostresultingfromtheassignmentofphantomstockoptionsisdeterminedinrelation
to the fair value of the options at the assignment date and is recognised to the income statement
under personnel costs over the vesting period of the benefit; unlike for stock options and stock
grants, the balancing entry is recorded under liabilities (other personnel provisions) and not in an
equityreserve.Untilthisliabilityisextinguisheditsfairvalueisrecalculatedateachreportingdate
and on the date of actual disbursement and all fair value changes are recognised to the income
statement.
3.t. Derivatives(IAS32and39)
Derivativesaremeasuredatfairvalue.
The Group uses derivatives mainly to hedge risks, in particular interest rate, foreign exchange and
commoditypricerisks.Classificationofaderivativeasahedgeisformallydocumented,statingthe
effectivenessofthehedge.
Foraccountingpurposeshedgingtransactionsareclassifiedas:
fairvaluehedgeswheretheeffectsofthehedgearerecognisedtotheincomestatement;
cashflowhedgeswherethefairvaluechangeoftheeffectiveportionofthehedgeisrecognised
directlytoequity,whilethenoneffectivepartisrecognisedtotheincomestatement.
hedgesofanetinvestmentinaforeignoperationwherethefairvaluechangeoftheeffective
portionofthehedgeisrecogniseddirectlytoequity,whilethenoneffectivepartisrecognisedto
theincomestatement.
3.u.
Foreigncurrencytranslation(IAS21)
TheGroup'sfunctionalcurrencyistheeuroandthisisthecurrencyinwhichitsfinancialstatements
are prepared. Group companies prepare their financial statements in the currencies used in their
respectivecountries.
Transactions carried out in foreign currencies are initially recognised at the exchange rate on the
dateofthetransaction.
At the reporting date, monetary assets and liabilities denominated in foreign currencies are
translatedattheexchangerateprevailingonthatdate.
.39
Nonmonetary items measured at historical cost in a foreign currency are translated using the
exchangerateprevailingonthedateofthetransaction.
Nonmonetary items measured at fair value are translated using the exchange rate at the date on
whichthecarryingvaluesweremeasured.
The assets and liabilities of Group companies whose functional currency is not the euro are
measuredasfollows:
assetsandliabilitiesaretranslatedusingtheexchangerateprevailingatthereportingdate;
costsandrevenuesaretranslatedusingtheaverageexchangeratefortheperiod.
Exchangeratedifferencesarerecogniseddirectlytoaspecialequityreserve.
Shouldaninvestmentinaforeignoperationbesold,theaccumulatedexchangeratedifferences
recognisedintheequityreservearereversedtotheincomestatement.
3.v. Noncurrentassetsheldforsale(IFRS5)
Anoncurrentassetisheldforsaleifitscarryingvaluewillberecoveredprincipallythroughasale
rather than through its use in the business. For this condition to be satisfied the asset must be
immediatelysaleableinitspresentconditionandasalemustbeconsideredhighlylikely.
Assetsorgroupsofdiscontinuedassetsthatareclassifiedasheldforsalearevaluedatthelowerof
theircarryingvalueandtheexpectedrealisablevalue,lesscoststosell.
Individualassetsorthosethatformpartofagroupclassifiedasheldforsalearenotdepreciated.
Presentation of these assets in the financial statements involves showing the aftertax income and
lossesresultingfromthesaleonaseparatelineintheincomestatement.Similarly,theassetsand
liabilitieshavetobeshownonaseparatelineinthestatementoffinancialposition.
3.w. Earningspershare(IAS33)
Basic earnings per share are determined by dividing net income attributable to the ordinary
shareholders of the parent company by the weighted average number of ordinary shares in
circulationduringtheperiod.
Diluted earnings per share are calculated by adjusting the weighted average number of ordinary
sharesincirculationtotakeintoaccountallpotentialordinaryshares,forexamplederivingfromthe
possibleexerciseofassignedstockoptionsthatcouldhaveadilutiveeffect.
3.x. BusinesscombinationsandGoodwill
Businessacquisitionsarerecognisedusingthepurchaseandacquisitionmethodincompliancewith
IFRS3,onthebasisofwhichtheacquisitioncostisequaltothefairvalueonthedateofexchangeof
the assets transferred and the liabilities incurred or assumed. Any transaction costs relating to
businesscombinationsarerecognisedtotheincomestatementintheperiodtheyareincurred.
Contingent consideration is included as part of the transfer price of the net assets acquired and is
measured at fair value at the acquisition date. Similarly, if the business combination agreement
envisages the right to receive repayment of certain elements of the price if certain conditions are
met,thisrightisclassifiedasanassetbythepurchaser.
Anysubsequentchangesinthisfairvaluearerecognisedasanadjustmenttotheoriginalaccounting
treatmentonlyiftheyaretheresultofmoreorbetterfairvalueinformationandifthistakesplace
within twelve months of the acquisition date; all other changes must be recognised to the income
statement.
.40
Intheeventofastepacquisitionofasubsidiary,theminorityinterestpreviouslyheld(recognisedup
to that point according to IAS 39 Financial Instruments: Recognition, IAS 28 Investments in
Associates or IFRS 11 Joint Arrangements Accounting for acquisitions of interests in joint
operations)istreatedasifithadbeensoldandrepurchasedatthedatethatcontrolisacquired.The
investmentisthereforemeasuredatitsfairvalueonthedateof"transfer"andanygainsandlosses
resulting from this measurement are recognised to the income statement. Moreover, any amount
previously recognised in equity as "Other comprehensive gains and losses", is reclassified to the
incomestatementfollowingthesaleoftheassettowhichitrefers.Thegoodwill(orincomeinthe
caseofbadwill)arisingonconclusionofthedealwithsubsequentacquisitioniscalculatedasthesum
ofthepricepaidfortheacquisitionofcontrol,thevalueofminorityinterests(measuredusingoneof
the methods permitted by the accounting standard) and the fair value of the minority interest
previouslyheld,netofthefairvalueoftheidentifiablenetassetsacquired.
Theidentifiableassets,liabilitiesandcontingentliabilitiesoftheacquiredbusinesswhichmeetthe
conditions for recognition are accounted for at their fair value on the date of acquisition. Any
positivedifferencebetweentheacquisitioncostandthefairvalueoftheGroup'sshareofnetassets
acquired is recognised as goodwill or, if negative, charged to the income statement. After initial
recognition,goodwillismeasuredatcostlessanyaccumulatedimpairment.Goodwillalwaysrefers
toidentifiedincomeproducingassets,whoseabilitytogenerateincomeandcashflowismonitored
constantlyforimpairment.
The accounting treatment of the acquisition of any further investment in companies already
controlled are considered transactions with shareholders and therefore any differences between
acquisition costs and the carrying value of the minority interests acquired are recognised in Group
equity.Likewise,salesofminorityinterestsnotinvolvinglossofcontroldonotgenerategains/losses
intheincomestatement,butratherchangesinGroupequity.
Theinitialallocationtoassetsandliabilitiesasmentionedabove,usingtheoptiongiveninIFRS3,can
beperformedonaprovisionalbasisbytheendoftheyearinwhichthetransactioniscompleted;the
valuesprovisionallyassignedoninitialrecognitioncanbeadjustedwithintwelvemonthsofthedate
onwhichcontrolwasacquired.
3.y. Useofestimates
The preparation of financial statements and explanatory notes in accordance with IFRS requires
managementtomakeestimatesandassumptionswhichaffectthevaluesoftheassetsandliabilities
showninthem,aswellasthedisclosuresmaderegardingcontingentassetsandliabilitiesasofthe
reportingdate.
Theestimatesandassumptionsusedarebasedonexperienceandotherfactorsconsideredrelevant.
The actual results could differ from these estimates. Estimates and assumptions are reviewed
periodically and the effects of any changes are reflected in the income statement in the period in
whichtheamendmentismadeifthereviewonlyaffectsthatperiod,orinsubsequentperiodsifthe
amendmentaffectsboththecurrentandfutureyears.
Theitemsmainlyaffectedbythisuseofestimatesaregoodwill,deferredtaxes,provisionsforrisks
andlosses,personnelprovisionsandthefairvalueoffinancialinstruments,stockoptions,phantom
stockoptionsandstockgrants.
Seethenotesonthesespecificitemsforfurtherdetails.
.41
4. Financialinstruments
FinancialinstrumentstakeonaparticularsignificanceintheCOFIDEGroup'seconomicandfinancial
structure. For this reason, management felt that it would be useful to devote a special section to
accounting standards IAS 32 and IAS 39, to help readers understand better the financial issues
involved.
AccordingtoIAS32financialinstrumentsareclassifiedintofourcategories:
a) financialinstrumentsmeasuredatfairvaluethroughprofitandloss(FVTPL)inapplicationof
thefairvalueoption:eitherdesignatedassuchorheldfortrading;
b) investmentsheldtomaturity(HTM);
c) loansandreceivables(L&R);
d) availableforsalefinancialassets(AFS).
Classification depends on the intended use of the financial instrument within the context of the
Company'sfinancialmanagementandeachinvolvesadifferenttypeofmeasurementforaccounting
purposes.Financialtransactionsarerecognisedonthebasisoftheirvaluedate.
Financialinstrumentsatfairvaluethroughprofitandloss
Financialinstrumentsareclassifiedassuchiftheysatisfyoneofthefollowingconditions:
theyareheldfortrading;
theyaredesignatedassuchunderthefairvalueoption,ontheassumptionthatthefairvaluecan
bereliablydetermined.
Tradinggenerallymeansfrequentbuyingandsellingwiththeaimofgeneratingprofitonshortterm
pricefluctuations.
Derivativesareincludedinthiscategoryunlesstheyaredesignatedashedgeinstruments.
Theinitialdesignationoffinancialinstruments,otherthanderivativesandthoseheldfortrading,as
instrumentsatfairvaluethroughprofitandlossunderthefairvalueoptionislimitedtothosethat
meetthefollowingconditions:
a) designation under the fair value option eliminates or significantly reduces an accounting
mismatch;
b) agroupoffinancialassets,financialliabilitiesorbotharemanagedandtheirperformanceis
measured on a fair value basis in accordance with a documented investment risk strategy,
and;
c) aninstrumentcontainsanembeddedderivativewhichmeetsparticularconditions.
Thedesignationofanindividualinstrumenttothiscategoryisfinal,itismadeatthetimeofinitial
recognitionandcannotbemodified.
Investmentsheldtomaturity
Thiscategoryincludesnonderivativeinstrumentswithfixedordeterminablepaymentsandafixed
maturity,whichtheCompanyintendsandisabletoholdtomaturity.
These instruments are measured at amortised cost and constitute an exception to the general
principleofmeasurementatfairvalue.
Amortised cost is determined by applying the effective interest rate of the financial instrument,
taking into account any discounts received or premiums paid at the time of purchase, and
recognisingthemthroughouttheentirelifeoftheinstrumentuntilitsmaturity.
.42
Amortised cost represents the initial recognition value of a financial instrument, net of any capital
repaymentsandanyimpairment,plusorminuscumulativedifferencesbetweenitsinitialvalueand
itsvalueatmaturitycalculatedusingtheeffectiveinterestratemethod.
The effective interest rate method is a way of calculating the financial charges to be assigned to a
particularperiod.
Theeffectiveinterestrateistheratethatgivesacorrectpresentvaluetoexpectedfuturecashflows
untilmaturity,soastoobtainthenetpresentcarryingvalueofthefinancialinstrument.
If even only one instrument belonging to this category is sold before maturity, for a significant
amountandwherethereisnospecialjustificationforitsdisposal,thesocalled"taintingrule"gets
applied: this requires that the whole portfolio of securities classified as Held To Maturity be
reclassified and measured at fair value, after which this category cannot be used for the next two
years.
Loansandreceivables
Loansandreceivablesarenonderivativefinancialassetswithfixedordeterminablepaymentsthat
arenotquotedinanactivemarketandwhicharenotheldfortrading.
Thecategoryincludestradereceivables(andpayables).
Measurementoftheseinstruments,exceptforthoseclassifiedascurrentassetsorliabilities(within
twelvemonths),ismadebyapplyingtheamortisedcostmethod,usingtheeffectiveinterestrateand
taking into account any discounts received or premiums paid at the time of acquisition and
recognisingthemthroughouttheentirelifeoftheinstrumentuntilitsmaturity.
Availableforsalefinancialassets
Thisisa"residual"categorywhichincludesnonderivativefinancialinstrumentsthataredesignated
asavailableforsaleandnotincludedinanyofthepreviouscategories.
Availableforsalefinancialinstrumentsarerecognisedattheirfairvalueplusanytransactioncosts.
Gainsandlossesarerecognisedtoaseparateequityitemuntilthefinancialinstrumentsaresoldor
sufferimpairment.Insuchcases,thegainsandlossesaccruedtoequityuptothatpointarereleased
totheincomestatement.
This item also includes insurance policies subscribed by CIR Investimenti S.p.A. This deals with
capitalisationpoliciesandlifeinsurancepolicieswithreturnslinkedtoseparateinsuranceportfolios
andincertaincases,tounitlinkedfunds.Thereturnaccruedeachyear,beingfinancialinnature,like
interest,isrecognisedintheincomestatement.Theyieldslinkedtounitlinkedfundsaswellasto
changes in fair value are recorded in the comprehensive income statement and only in case of
impairment or redemption recognised in the income statement. The valuation in the financial
statementsisbasedonthecommunicationsreceivedfromtheinsurancecompanies.
Investments in financial assets can only be derecognised (i.e. eliminated from the financial
statements)whenthecontractualrightstoreceivetheirrespectivefinancialcashflowshaveexpired
or when the financial asset is transferred to third parties together with all associated risks and
benefits.
Fairvalue
Fairvalue,asdefinedbyIFRS13,isthepricethatwouldbereceivedforthesaleofanassetorthat
would be paid to transfer a liability in an regular transaction between market participants at the
measurementdate.
The fair value of financial liabilities due and payable on demand (e.g. demand deposits) is not less
than the amount payable on demand, discounted from the first date on which payment could be
required.
.43
For financial instruments quoted in active markets, the fair value is determined on the basis of
officialpricesintheprincipalmarkettowhichtheGrouphasaccess(marktomarket).
A financial instrument is considered quoted in an active market if quoted prices are readily and
regularlyavailablefromaquotationsystem,dealers,brokers,etc.,andthesepricesrepresentactual
andregularmarkettransactions.Ifthereisnoquotedmarketpriceinanactivemarketforafinancial
instrument taken as a whole, but there is one for some of its components, the fair value is
determinedonthebasisofthespecificmarketpricesofitscomponents.
Iftherearenoobservablepricesinanactivemarketforanidenticalitemownedbyanotheroperator
asanasset,orifpricesarenotavailable,usingotherobservableinputssuchasquotedpricesinan
inactivemarketfortheidenticalitemownedbyanotheroperatorasanasset,theGroupwillassess
thefairvalueusinganothervaluationtechnique,suchas:
anincomeapproach(forexample,atechniquethattakesintoaccountthepresentvalueoffuture
cashflowsthatamarketparticipantwouldexpecttoreceivefromowningafinancialliability,an
equityinstrumentoranasset);
amarketapproach(forexample,using quoted pricesforsimilarliabilitiesorequityinstruments

ownedbythirdpartiesasassets);
valuations performed using, in all or in part, inputs not taken from parameters that are
observableonthemarket,forwhichuseismadeofestimatesandassumptionsdevelopedbythe
evaluator(MarktoModel).TheGroupusesvaluationmodels(marktomodel)thataregenerally
accepted and used by the market. The models include techniques based on the discounting of
futurecashflowsandestimatesofvolatility(ifthereisanoptionalcomponent);thesearesubject
torevisionfromtimetotimeinordertoensureconsistencywiththeobjectivesofthevaluation.
These methods use inputs based on prices set in recent transactions and/or prices/quotations for
instrumentsthathavesimilarcharacteristicsintermsofriskprofile.
Asafurtherguaranteeoftheobjectivityofvaluationsderivedfromvaluationmodels,theGroupuses
fair value adjustments (FVAs) to take into account the risks associated primarily with the limited
liquidityofthepositions,thevaluationmodelsusedandcounterpartyrisk.
The choice between these techniques is not optional, as they have to be applied in hierarchical
order: if, for example, is a price quoted in an active market is available, the other valuation
techniquescannotbeused.
Asregardsthedeterminationofthefairvalueofderivativecontracts,defaultrisk,whichisreflected
through credit value adjustments (CVA) and debit value adjustments (DVA), has to be taken into
consideration.
IFRS13providesfortheclassificationoftheinstrumentsbeingmeasuredatfairvalueaccordingto
theobservabilityoftheinputsusedforpricingthem.
Thefairvaluehierarchyhasthreelevels:
Level1:thefairvalueofinstrumentsclassifiedinthislevelisdeterminedbasedon(unadjusted)
quotedpricesthatcanbeobservedinactivemarkets;
Level 2: the fair value of instruments classified in this level is determined based on valuation
models that use inputs that can be observed in active markets (other than the quoted prices
includedinLevel1,observableeitherdirectlyorindirectly).
Level 3: the fair value of instruments classified in this level is determined based on valuation
modelsthatprimarilyuseinputsthatcannotbeobservedinactivemarkets.Thevaluationsare
basedonvariousinputs,notalldirectlyderivedfromobservablemarketparameters,andinvolve
estimatesandassumptionsonthepartoftheevaluator.
.44
5. Accountingstandards,changesinaccountingestimatesand
errors
The criteriaformakingestimatesand measurementsarereviewedperiodically,basedon historical
experienceandotherfactorssuchasexpectationsofpossiblefutureeventsthatarereasonablylikely
totakeplace.
Iffirsttimeapplicationofastandardaffectsthecurrentyearorthepreviousone,theeffectisshown
byindicatingthechangecausedbyanytransitionalrules,thenatureofthechange,adescriptionof
the transitional rules, which may also affect future years, and the amount of any adjustments to
yearspriortothosebeingpresented.
If a voluntary change of a standard affects the current or previous year, the effect is shown by
indicatingthenatureofthechange,thereasonsforadoptingthenewstandard,andtheamountof
anyadjustmentstoyearspriortothosebeingpresented.
Intheeventofanewstandardorinterpretationissuedbutnotyetinforce,anindicationisgivenof
thefact,its potentialimpact,thenameofthestandardorinterpretation,thedateonwhichitwill
comeintoforceandthedateofitsfirsttimeapplication.
Achangeinaccountingestimateinvolvesgivinganindicationofthenatureandimpactofthechange.
Estimates are used mainly in the recognition of asset impairment, provisions for risks, employee
benefits, taxes and other provisions and allowances. Estimates and assumptions are reviewed
regularlyandtheeffectsofanysuchchangesarereflectedintheincomestatement.
Lastly,thetreatmentofaccountingerrorsinvolvesanindicationofthenatureoftheerrorandthe
amountoftheadjustmentstobemadeatthebeginningofthefirstreportingperiodaftertheywere
discovered.
6. Adoptionofnewaccountingstandards,interpretationsand
amendments
Thefollowingaccountingstandards,amendmentsandinterpretationswereappliedforthefirsttime
bytheGroupwitheffectfrom1January2016:
Amendments to IAS 19 Defined Benefit Plans: Employee Contributions (published on 21

November 2013): regarding the accounting for contributions made to defined benefit plans by
employees and third parties. Adoption of these amendments did not have any impact on the
consolidatedfinancialstatementsoftheGroup.
Amendments to IFRS 11 Joint Arrangements Accounting for acquisitions of interests in joint
operations(publishedon6May2014):regardingtheaccountingfortheacquisitionofinterests
injointoperationswhoseactivitiesconstituteabusiness.Adoptionoftheseamendmentsdidnot
haveanyimpactontheconsolidatedfinancialstatementsoftheGroup.
AmendmentstoIAS16Property,plantand equipmentandIAS 41AgricultureBearer Plants
(published on 30 June 2014): bearer plants, i.e. fruit trees that will give rise to annual harvests
(suchasgrapevinesorhazelnuttrees)shouldbeaccountedforinaccordancewithIAS16(rather
than IAS 41). Adoption of these amendments did not have any impact on the consolidated
financialstatementsoftheGroup.
Amendments to IAS 16 Property, plant and equipment and IAS 38 Intangible Assets
Clarification of acceptable methods of depreciation and amortisation (published on 12 May
2014): these clarify that depreciation and amortisation criteria based on revenues are generally
consideredinappropriate.Thisisbecausetherevenuesgeneratedbyanactivitythatincludesuse
.45
of the depreciated asset usually reflect factors other than just consumption of the economic
benefits deriving from that asset, which is the strict requirement for the recognition of
depreciation. Adoption of these amendments did not have any impact on the consolidated
AmendmenttoIAS1DisclosureInitiative(publishedon18December2014):theobjectiveof
the amendment is to provide clarification about certain disclosures that could be perceived as
impedimentstoclearandintelligiblefinancialstatements.Adoptionoftheseamendmentsdidnot
haveanyimpactontheconsolidatedfinancialstatementsoftheGroup.
Lastly,aspartofitsannualimprovementstoaccountingstandards,on12December2013theIASB
publishedAnnualImprovementstoIFRSs:20102012Cycle(including:IFRS2SharebasedPayment
Definition of vesting conditions, IFRS 3 Business Combinations Accounting for contingent
consideration,IFRS8OperatingSegmentsAggregationofoperatingsegmentsandReconciliationof
total of the reportable segments assets to the entitys assets, IFRS 13 Fair Value Measurement
Shorttermreceivablesandpayables)and,on25September2014,AnnualImprovementstoIFRSs:
20122014Cycle(including:IFRS5NoncurrentAssetsHeldforSaleandDiscontinuedOperations,
IFRS 7 Financial Instruments: Disclosure and IAS 19 Employee Benefits) which supplement the
existing standards. Adoption of these amendments did not have any impact on the consolidated
ACCOUNTINGSTANDARDS,AMENDMENTSANDINTERPRETATIONSOFIFRSNOTYETENDORSEDBY
THEEUROPEANUNION
At the date of these consolidated halfyearly financial statements, the competent bodies of the
EuropeanUnionhadnotyetcompletedtheendorsementprocessnecessaryfortheadoptionofthe
followingamendmentsandstandards.
IFRS 15 Revenue from Contracts with Customers (published on 28 May 2014 with further
clarifications published on 12 April 2016) that will replace IAS 18 Revenue and IAS 11
Construction Contracts, as well as IFRIC 13 Customer Loyalty Programmes, IFRIC 15
Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers
andSIC31RevenuesBarterTransactionsInvolvingAdvertisingServices.Thestandardlaysdown
a new model of revenue recognition that will apply to all contracts with customers, except for
those that fall within the scope of other IAS/IFRS as leases, insurance contracts and financial
instruments.Thebasicstepsfortherecognitionofrevenueunderthenewmodelare:
o identificationofthecontractwiththecustomer;
o identificationoftheperformanceobligationslaiddowninthecontract;
o determinationoftheprice;
o allocationofthepricetotheperformanceobligationslaiddowninthecontract;
o the method of recognition of the revenues when the entity meets each performance
obligation.
This standard will be applicable from 1 January 2018, but earlier application is permitted. The
Directors are of the opinion that application of IFRS 15 could have a significant impact on the
amounts booked as revenues and on the related disclosures to be made in the Group's
consolidatedfinancialstatements.However,itisnotpossibletoprovideareasonableestimateof
theeffectsuntiltheGrouphascompletedadetailedanalysisofitscontractswithcustomers.
.46
FinalversionofIFRS9FinancialInstruments(publishedon24July2014).Thedocumentincludes
the results of steps relating to classification and measurement, impairment and hedge
accounting,oftheIASB'sprojecttoreplaceIAS39:
o it introduces new criteria for the classification and measurement of financial assets and
liabilities;
o with reference to the impairment model, the new standard requires loan losses to be
estimatedonthebasisofexpectedlosses(andnotincurredlosses,asunderIAS39),using
informationthathasadequatesupport,availablewithoutunreasonableeffortorexpense,
andthatincludeshistorical,currentandprospectivefigures;
o itintroducesanewmodelforhedgeaccounting(increasesthetypesoftransactionseligible
for hedge accounting, changes the methodology for recognising forward contracts and
optionswhenincludedinaneligiblehedgingrelationship,amendstheeffectivenesstest);
o This new standard, which replaces the previous versions of IFRS 9, has to be applied in
financialstatementsbeginningonorafter1January2018.
The Directors are of the opinion that application of IFRS 9 could have a significant impact on the
amountsanddisclosurestobereportedintheGroup'sconsolidatedfinancialstatements.However,
it is not possible to provide a reasonable estimate of the effects until the Group has completed a
detailedanalysis.
On13January2016,theIASBissuedIFRS16LeaseswhichisintendedtoreplaceIAS17Leases
and IFRIC 4 Determining Whether an Arrangement contains a Lease, SIC15 Operating Leases
Incentives and SIC27 Evaluating the Substance of Transactions Involving the Legal Form of a
Lease.
Thenewstandardprovidesanewdefinitionofleaseandintroducesacriterionbasedoncontrol
("right of use") of an asset to distinguish leases from service contracts, identifying as
discriminating factors: identification of the asset, the right to replace it, the right to obtain
substantiallyalloftheeconomicbenefitsarisingfromuseoftheassetandtherighttodirectuse
oftheassetunderlyingthecontract.
Thestandardestablishesasinglemodelofrecognitionandmeasurementofleasesforthelessee,
which entails booking the asset being leased whether a finance lease or an operating lease
underassets,withafinancialpayableasthecontraentry.Thestandardalsoprovidesanoption
not to recognize as leasing contracts that involve "lowvalue assets" and leases that last for 12
months or less. On the other hand, the standard does not include any significant changes for
lessors.
The standard is applicable from 1 January 2019, but earlier application is permitted only for
companies that have applied for early adoption of IFRS 15 Revenue from Contracts with
Customers. The Directors are of the opinion that application of IFRS 16 could have a significant
impact on the accounting treatment of lease contracts and the disclosures to be made in the
Group's consolidated financial statements. However, it is not possible to provide a reasonable
estimateoftheeffectsuntiltheGrouphascompletedadetailedanalysisoftherelatedcontracts.
On 11 September 2014 the IASB issued an amendment to IFRS 10 and IAS 28 "Sales or
Contribution of Assets between an Investor and its Associate or Joint Venture". This document
was published in order to resolve the current conflict between IAS 28 and IFRS 10 on how to
measurethegainorlossderivingfromthetransferorcontributionofanonmonetaryassettoa
jointventureorassociate,inexchangeforanequityinterestinthelatter.TheIASBhascurrently
suspendedthisamendment.
On 18 December 2014, the IASB issued the document "Investment Entities: Applying the
Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28)" (published on 18
December 2014), containing amendments related to issues arisen after the application of the
.47
consolidation exception granted to investment entities. The amendments introduced by this

documenthavetobeappliedforyearsbeginningon1January2016orafter.TheDirectorsdonot
expect these changes to have a significant impact in the Group's consolidated financial
statementsastheCompanydoesnotsatisfythedefinitionofaninvestmententity.
On19January2016,theIASBpublishedRecognitionofDeferredTaxAssetsforUnrealisedLosses
(Amendments to IAS 12), which amends IAS 12. This document clarifies the recognition of
deferredtaxassetsforunrealisedlossesundercertaincircumstances,aswellashowtoestimate
future taxable income. These amendments will be applicable from 1 January 2017, but earlier
application is permitted. The Directors do not expect any impact on the Group's consolidated
financialstatementsfromtheapplicationoftheseamendments.
On 29 January 2016 ,the IASB published Disclosure Initiative (Amendments to IAS 7), which
contains amendments to IAS 7. This document provides clarifications intended to improve the
disclosuresmadeaboutfinancialliabilities.Inparticular,theamendmentsrequiredisclosuresthat
enable the users of financial statements to evaluate changes in liabilities arising from financing
activities. These amendments will be applicable from 1 January 2017, but earlier application is
permitted. There is no requirement to present prioryear comparative information on firsttime
application.TheDirectorsarecurrentlyassessingthepotentialeffectsoftheseamendmentson
theGroup'sconsolidatedfinancialstatements.
On 20 June 2016, the IASB published Classification and measurement of sharebased payment
transactions (Amendments to IFRS 2), which clarifies how to account for the effects of vesting
conditions when cashsettled sharebased payments are involved, how to classify sharebased
payments that represent net settlements, and how to recognise amendments to the terms and
conditions of a sharebased payment that change its classification from cashsettled to equity
settled. These amendments will be applicable from 1 January 2018, but earlier application is
permitted. The Directors are currently assessing the potential effects of these amendments on
theGroup'sconsolidatedfinancialstatements.
.48
7.Noncurrentassets
7.a.Intangibleassets
Openingposition
Original
cost
(inthousandsofeuro)
Startupandexpansioncosts
Capitaliseddevelopmentcosts
purchased
producedinternally
Industrialpatentsandintellectualpropertyrights
Concessions,licences,trademarksandsimilarrights
Titlesandtrademarks
Frequencies
Goodwill
Assetsinprogressandadvancepayments
purchased
producedinternally
Other
Total
Accumulatedamortisation
andwritedowns
Changesfortheperiod
Netbalance
31/12/2015
Acquisitions
Business
combinations/disposals
DTVfrequencies
Otherintangibleassets
Netdisposals
Amortisationand
writedowns
Originalcost
Accumulatedamortisation
andwritedowns
Balance
30/06/2016
increases
decreases
(36)
36
(36)
184,220
(104,857)
79,363
7,897
(543)
4,929
(43)
(12,972)
197,625
(118,994)
78,631
48,875
82,297
388,002
87,278
902,017
(17,728)
(68,562)
(541,836)
31,147
13,735
388,002
87,278
360,181
514
1,356
1,088
(2,900)
1
(34)
(872)
563
(378)
(1,428)
(1,488)
(345)
49,222
84,542
385,102
87,278
901,581
(18,988)
(70,410)
(541,907)
30,234
14,132
385,102
87,278
359,674
7,674
15,493
26,968
1,742,860
(1,211)
(10,978)
(745,208)
7,674
14,282
15,990
997,652
2,244
3,364
465
15,840
1,088
(2,900)
(34)
(40)
(50)
(1,572)
(2,523)
(3,215)
194
(52)
(421)
(791)
(17,024)
7,361
15,751
27,471
1,755,969
(1,360)
(11,663)
(763,358)
7,361
14,391
15,808
992,611
DEPRECIATIONRATES
Closingposition
Other
changes
36
Intangibleassetswentfrom997,652thousandat31December2015to992,611thousandat30June2016.
Description
Exchangerate
differences
%
2033%
420%
1630%
5%
1630%
.49
cost
AMORTISATIONRATES
Description
DTVfrequencies
Otherintangibleassets
2033%
450%
1633.33%
5%
1633.33%
GOODWILL,TRADEMARKSANDOTHERASSETSWITHANINDEFINITEUSEFULLIFE
Amoredetailedanalysisofthemainitemsmakingupintangibleassetswithanindefiniteusefullifeis
giveninthefollowingcharts.
Titlesandtrademarks:
(inthousandsofeuro)
laRepubblica
Localnewspapers
Othertitlesandtrademarks
Total
30.06.2016
31.12.2015
229,952
151,841
3,309
385,102
229,952
154,741
3,309
388,002
30.06.2016
31.12.2015
87,278
87,278
87,278
87,278
30.06.2016
31.12.2015
2,733
228,303
128,638
359,674
2,733
228,810
128,638
360,181
Frequencies:
(inthousandsofeuro)
Radiofrequencies
Total
Goodwill:
(inthousandsofeuro)
Media(EditorialeLEspressogroup)
Healthcare(KOSgroup)
Automotive(Sogefigroup)
Total
GoodwillhasbeenallocatedtotheCGUsthatwereidentifiedinthesamewaythatmanagementof
theParentCompanyoperatesandmanagesitsassets,basedontheGroup'soperatingsectors.The
abovechartshowstheallocationofgoodwillbyGroupoperatingsector.
In order to perform the impairment test of goodwill and other intangible assets with an indefinite
useful life, the recoverable value of each cash generating unit, defined in accordance with IAS 36,
wasestimatedwithreferencetoitsvalueinuseoritsfairvaluelesssellingcostsandhavingregard
where applicable in the specific circumstances for the guidelines contained in the document
entitled Impairment test of goodwill in the context of crises in the financial markets and the real
economy:guidelinesissuedbytheO.I.V.(ItalianValuationBoard).
Valueinusewascalculatedbydiscountingtopresentvaluefuturecashflowsgeneratedbytheunit
in the production phase and at the time of its disposal, using an appropriate discount rate
(discounted cash flow or DCF method). More specifically, in accordance with what is required by
internationalaccountingstandards,totestthevalue,cashflowswereconsideredwithouttakinginto
.50
accountinflowsandoutflowsgeneratedbyfinancialmanagementoranycashflowsrelatingtotax
management. The cash flows to be discounted are therefore distinctive, unlevered operating cash
flows(astheyrefertoindividualunits).
Thecashflowsofthesingleoperatingunitswereextrapolatedfromthebudgetsandforecastsmade
bythemanagementoftheoperatingunitsconcerned.Theseplanswerethenprocessedonthebasis
ofeconomictrendsrecordedinpreviousyearsandusingtheforecastsmadebyleadinganalystson
theoutlookfortherespectivemarketsandmoreingeneralontheevolutionofeachbusinesssector.
To give a fair estimate of a CGU's value in use, we had to assess its expected future cash flows,
expected changes in the amount and timing of these flows, the discount rate to be used and any
otherriskfactorsaffectingtheunit.
In order to determine the discount rate to be used, we calculated the weighted average cost of
capital (WACC) invested at sector level, regardless of the financial structure of the individual
companyorsubgroup.
ThevaluesusedtocalculateWACC(takenfromleadingfinancialsources)werethefollowing:
financialstructureofthesector;
unleveredbetaforthesector;
riskfree rate: annual average yield on government bonds in countries where Group companies
operate;
riskpremium:averagemarketriskpremiumincountrieswhereGroupcompaniesoperate.
The fair value less costs to sell of an asset or group of assets (e.g. a CGU) is best expressed in the
price established by a "binding sale agreement in an arm's length transaction", net of any direct
disposalcosts.Ifthisinformationwasnotavailable,thefairvaluenetofcoststosellwasdetermined
inrelationtothefollowingtradingprices,inorderofimportance:
thecurrentpricetradedonanactivemarket;
pricesforsimilartransactionsexecutedpreviously;
theestimatedpricebasedoninformationobtainedbythecompany.
Therecoverablevalueofeachassetwasestimatedwithreferencetothehigherofitsfairvalueless
coststoselloritsvalueinuse,ifbothwereavailable.
AsrequiredbyIAS36,goodwillistestedforimpairmentatleastonceayear,exceptincaseswhere
thereareindicationsthatrequireanimmediateassessmentofpossibleimpairmentlosses.
At30June2016,inlightofthetrendsinsalesandmarginsoftheCGUsduringthefirsthalfof2016,
also in relation with their respective plans, there were no indications that suggested that the
impairmenttestwasnolongervalid,northattheamountswerenolongerreasonable.
.51
7.b.Tangibleassets
Openingposition
(inthousandsofeuro)
Accumulated
depreciationandwrite
downs
Originalcost
Changesfortheperiod
Netbalance
31/12/2015
Acquisitions
Business
increases
Land
Buildingsusedforoperatingpurposes
Plantandmachinery
Industrialandcommercialequipment
Otherassets
Assetsinprogressandadvancepayments
Total
48,588
393,164
962,357
140,773
255,834
55,152
1,855,868
(522)
(161,482)
(733,338)
(101,750)
(198,939)
(728)
(1,196,759)
48,066
231,682
229,019
39,023
56,895
54,424
659,109
336
4,170
2,758
3,060
21,714
32,038
Capitalisedfinancial Exchangerate
charges
differences
Closingposition
Other
changes
decreases
112
112
(1,486)
(25)
(1,511)
(170)
78
68
(562)
(88)
(440)
(1,114)
(1)
775
14,193
(283)
4,309
(18,948)
45
(*)"Otherchanges"relatetocompletionoftheprojectsinprogressattheendofthelastfinancialyearandtotheconsequentreclassificationoftheitemsconcerned.
Description
Buildingsusedforoperatingpurposes
Plantandmachinery
%
3.00%
10.0025.00%
Otherassets:
Electronicofficeequipment
Furnitureandfittings
Motorvehicles
20.00%
12.00%
25.00%
.52
Depreciationand
writedowns
Original
cost
Balanceat
30/06/2016
cost
Tangibleassetswentfrom659,109thousandat31December2015to647,067thousandat30June2016.
DEPRECIATIONRATES
Netdisposals
Accumulated
depreciationand
writedowns
(43)
(23)
(88)
(8)
(77)
(239)
(5,958)
(25,139)
(3,934)
(6,040)
(302)
(41,373)
48,417
394,068
961,615
140,733
260,604
57,369
1,862,806
(522)
(167,198)
(740,813)
(103,707)
(202,501)
(998)
(1,215,739)
47,895
226,870
220,802
37,026
58,103
56,371
647,067
7.c.Investmentproperty
Openingbalance
Originalcost
Accumulateddepreciationand
writedowns
Changesfortheperiod
Netbalance
31/12/2015
Acquisitions
Business
increases
Capitalised
financialcharges
Closingbalance
Exchangerate
differences
Other
changes
Depreciationand
writedowns
Netdisposals
Original
cost
Accumulateddepreciationand Balanceat
writedowns
30/06/2016
cost
decreases
Landandbuildings
29,215
(8,299)
20,916
136
(379)
29,352
(8,678)
20,674
Total
29,215
(8,299)
20,916
136
(379)
29,352
(8,678)
20,674
Investmentpropertyhasgonefrom20,916thousandat31December2015to20,674thousandat30June2016,mainlyduetodepreciationfortheperiod.
Themarketvalueisconsiderablyhigherthanthecarryingvalue.
DEPRECIATIONRATES
Description
Buildings
%
3.00%
.53
The position of leased assets and of restrictions applied to all tangible assets on account of
guaranteesandcommitmentsat30June2016and31December2015isasfollows:
(inthousandsofeuro)
Grossleasing
amount
Land
Buildings
Plantandmachinery
Otherassets
Assetsinprogressandadvance
payments
30.06.2016 31.12.2015
7,385
7,385
76,294
76,663
21,293
19,244
84
2,862
7,713
Accumulated
depreciation
30.06.2016
9,237
8,836
84
30.12.2015
8,390
6,172
2,150
6,013
Restrictionsfor
guaranteesand
commitments
30.06.2016
31.12.2015
131,178
131,178
144,963
183
With reference to the Restrictions for guarantees and commitments, the reduction in the Plant
andmachinerycategoryrelatestotheguaranteesgiventobanksbytheEspressoGroup,securedon
printingpresses,equipmentandsimilar,onthearrangementofanassistedloanin2005:theseloans
havebeenrepaidinfulland,therefore,therelatedprivilegesaremerelyformalandwillbecancelled
shortly.
7.c.
Investmentsincompaniesconsolidatedatequity
(inthousandsofeuro)
Balance
31.12.2015
Increases
(Decreases)
Write
downs
Dividends
PersideraS.p.A.
30.00
113,084
(2,802)
EditorialeLibertS.p.A.
EditorialeCorrieredi
RomagnaS.r.l.
35.00
13,911
(350)
49.00
3,156
AltrimediaS.p.A.
35.00
741
(52)
LeScienzeS.p.A.
50.00
88
DevilPeakS.r.l.
36.16
ApokosRehabPVTLtd
50.00
725
HuffingtonpostItaliaS.r.l.
49.00
Total
7.d.
Prorata
shareofresult
Loss Income
Other
changes
Discontinued
operations
Balance
30.06.2016
1,997
112,279
210
13,771
25
3,181
14
703
96
725
128
58
(68)
118
131,833
58
(3,204)
(68)
2,254
130,873
Otherinvestments
(inthousandsofeuro)
AnsaS.Coop.A.R.L.
EmittentiTitoliS.p.A.
30.06.2016
31.12.2015
2,209
2,209
132
132
Other
3,102
3,489
Total
5,443
5,830
The carrying values correspond to the cost, reduced where necessary for impairment, and are
essentiallyconsideredtobeequivalenttotheirfairvalue.
.54
7.e.
Otherreceivables
"Otherreceivables"at30 June2016 hadabalance of84,201thousand,comparedwith87,075

thousandat31December2015.
At30June2016,thisitemincludesthefollowing:
41,072thousand(42,022thousandat31December2015)ofunsecuredandmortgagebacked
receivablesofthesecuritisationcompaniesZeusFinanceS.r.l.andJupiterMarketPlaceS.r.l.;
19,368thousandrelatingtothereceivablefromthevendorofthesharesinSystmesMoteurs
S.A.S. (booked as part of the Purchase Price Allocation of the Systmes Moteurs Group) for the
recoveryofcostsarisingfromdisputesaboutproductquality,basedontheguaranteesprovided
bythevendor.InMay2016,SogefiS.p.A.receivedtheoutcomeoftheinternationalarbitration
promoted in relation to Dayco, the seller of Sogefi Air & Refroidissement France S.A.S., for the
recovery of costs incurred by Sogefi Air & Refroidissement France S.A.S. subsequent to the
acquisition. Based on the outcome of the arbitration, the company has reduced its expected
recoveriesfromDaycoby4millionand,therefore,haswrittendownitsindemnificationassetby
thatamountat30June2016;
11,510 thousand of amounts due from the Treasury to the Sogefi Group, relating to tax
receivablesforresearchanddevelopmentoftheFrenchsubsidiaries.
7.f. Securities
"Securities"at30June2016amountedto80,518thousand,comparedwith87,383thousandat
31 December 2015, and refer mainly to investments in private equity funds and minority
shareholdings. These investments were measured at fair value, booking as the contraentry an
amount,netoftax,of8,639thousand(14,582thousandat31December2015)tothefairvalue
reserveforCofide'sportion.Duringtheperiod,gainsfor9,399thousand(6,065thousandin2015)
wererealisedandbookedtoitem14.c."Gainsonsecuritiestrading".
Certainsecuritieswhosefairvalueisunknownhavebeenrecognisedatpurchasecost.
.55
7.g.
Deferredtaxes
The amounts relate to taxes resulting from deductible temporary differences and from benefits
derivingfromtaxlossescarriedforward,whicharedeemedtoberecoverable.
Thebreakdownof"Deferredtaxassetsandliabilities"bytypeoftemporarydifferenceisasfollows:
(inthousandsofeuro)
30.06.2016
Total
temporary
differences
Tax
effect
31.12.2015
Total
temporary
differences
Tax
effect
Deductibletemporarydifferencesfrom:
writedownofcurrentassets
writedownoffixedassets
46,922
51,385
revaluationofcurrentliabilities
20,768
5,741
22,645
6,005
revaluationofpersonnelprovisions
68,938
18,047
61,385
17,030
revaluationofprovisionsforrisksandlosses
70,765
21,877
76,011
23,686
12,015
14,299
45,758
51,349
11,996
14,368
revaluationoflongtermborrowings
writedownoffinancialinstruments
722
173
907
228
taxlossesfrompreviousyears
107,551
32,076
105,578
31,434
Totaldeferredtaxassets
Taxabletemporarydifferencesfrom:
revaluationofcurrentassets
revaluationoffixedassets
367,051
104,228
363,633
104,747
10,402
451,690
2,514
127,633
638
446,959
160
125,621
50,157
8,033
49,159
7,943
4,872
1,221
5,109
1,335
424
127
424
127
29
174
49
139,537
502,463
135,235
(35,309)
(30,488)
writedownofcurrentliabilities
valuationofpersonnelprovisions
writedownofprovisionsforrisksandlosses
revaluationoffinancialinstruments
Totaldeferredtaxliabilities
517,574
Netdeferredtaxes
Deferred tax assets have been recognised, at operational subgroup level, with reference to their
recoverability based on the related business plans. Prioryear losses not used in the calculation of
deferred taxes relate to CIR International for approximately 432 million, which can be carried
forward without any limit, and to other Group companies for 86 million. No deferred tax assets
werecalculatedfortheselossesbecausepresentconditionsaresuchthatthereisnocertaintythat
theycanberecovered.
.56
Thechangesin"Deferredtaxassetsandliabilities"duringtheperiodwereasfollows:
(inthousandsofeuro)
Balanceat
31.12.2015
Deferredtaxassets:
toincomestatement
84,269
toequity
20,478
Deferredtaxliabilities:
toincomestatement
Useofdeferredtaxes
frompriorperiods
Deferredtaxes
generated
intheperiod
Exchangerate
differences
andotherchanges
Balanceat
30.06.2016
(3,732)
1,223
2,587
130
(727)
81,890
22,338
(112,856)
(2,221)
(2,748)
(23)
235
(114,937)
(24,600)
(35,309)
toequity
(22,379)
163
292
Netdeferredtaxes
(30,488)
8. Currentassets
8.a.
Inventories
Inventoriescanbebrokendownasfollows:
(inthousandsofeuro)
30.06.2016
31.12.2015
Rawmaterials,secondarymaterialsandconsumables
71,343
69,835
Workinprogressandsemifinishedgoods
16,127
13,888
Finishedgoodsandgoodsforresale
47,588
50,332
134,055
Advancepayments
Total
135,058
Thevalueofinventoriesisshownnetofanywritedownsmadeeitherinpastyearsorthisperiodand
takes into account the degree of obsolescence of finished goods, goods for resale and secondary
materials.
8.b.
Tradereceivables
(inthousandsofeuro)
30.06.2016
31.12.2015
Receivablescustomers
447,997
413,678
Receivablesassociates
1,395
2,259
449,392
415,937
Total
"Receivables customers" are interestfree and have an average maturity in line with market
conditions. Trade receivables are shown net of any writedowns that take credit risk into account.
Duringthefirsthalfof2016,accrualsweremadetotheprovisionforthewritedownofreceivables
foratotalof2,064thousand(1,857duringthefirsthalfof2015).
.57
8.c.
Otherreceivables
(inthousandsofeuro)
30.06.2016
31.12.2015
Receivablessubsidiariesandjointventures
465
551
Receivablesassociates
104
104
58,918
51,970
53,898
113,385
44,940
Taxreceivables
Otherreceivables
Total
97,565
"Receivables subsidiaries and joint ventures" refer to the loan granted to Southlands S.r.l. whose
assetsandliabilitieshavebeenreclassifiedinaccordancewithIFRS5.Awritedownof61thousand
hasbeenmadeonthisloantoadjustitsvaluetothepotentialsellingpriceofthecompany.
8.d.
Financialreceivables
"Financialreceivables"rosefrom30,496thousandat31December2015to28,289thousandat
30June2016.Thisitemincludes12,469thousandwhichrelatestothefairvaluemeasurementof
theCrossCurrencySwapcontractsdesignatedashedgeaccounting,takenoutbytheSogefiGroup
forthepurposeofhedgingtheinterestrateandcurrencyriskontheprivatebondplacementofUSD
115 million; it also includes 12,986 thousand of receivables due to the Kos Group by factoring
companiesfornonrecourseassignments.
8.e. Securities
Thisitemconsistsofthefollowingcategoriesofsecurities:
(inthousandsofeuro)
ItalianGovernmentsecuritiesorsimilarsecurities
Investmentfundsandsimilarfunds
Bonds
Othersecurities
Total
30.06.2016
31.12.2015
2,529
2,562
40,053
62,327
9,181
33,227
23,377
75,140
32,896
131,012
Thefairvaluemeasurementof"Securities"ledtoapositiveadjustmenttotheincomestatementof
2,454thousand.
8.f.
Availableforsalefinancialassets
Thisitemtotals235,398thousandandrefersfor41,858thousandtosharesinhedgefundsand
redeemable shares in asset management companies held by CIR International S.A. The degree of
liquidityoftheinvestmentisafunctionofthetimerequiredfortheredemptionofthefunds,which
normally varies from one to three months.The fair value measurement of these funds involved a
totalvalueadjustmentof5,392thousand(7,305thousandat31December2015).Theeffectof
this measurement on Cofide's equity for its share came to 2,935 thousand. The losses realised
duringtheperiod,13thousand(profitof16,679thousandin2015),areclassifiedinitem14.d.
Lossesonsecuritiestrading.
.58
This item also includes 193,540 thousand for wholelife insurance and capitalisation policies
arrangedwithleadinginsurancecompaniesbyCIRInvestimentiS.p.A.,withyieldslinkedtoseparate
managedinsurancefundsand,insomecases,tounitlinkedfunds..Thenetyieldduringtheperiod
was1,821thousand.Thefairvaluemeasurementofpolicieswithyieldsderivingfromunitlinked
funds has involved a total value adjustment of 101 thousand, net of tax.The effect of this
measurementonCofide'sequityforitssharecameto55thousand.
8.g. Cash&cashequivalents
Theyfellfrom312,643thousandat31December2015to270,653thousandat30June2016.
Abreakdownofthechangesisgiveninthestatementofcashflows.
8.h.
Assetsandliabilitiesheldforsale
Theamountof"assetsheldforsale"of11,582thousandrefersfor4,649thousandtoassetsof
theEspressogroupandfor6,933thousandtoassetsofSouthlandsS.r.l.
Theamountof"liabilitiesheldforsale"of9,382thousandrefersfor2,449thousandtoliabilities
oftheEspressogroupandfor6,933thousandtoliabilitiesofSouthlandsS.r.l.
Forfurtherinformationpleasereadsection6"Notestotheconsolidatedfinancialstatements".
9. Equity
9.a.
Sharecapital
Thesharecapitalat30June2016amountsto359,604,959.00,thesameasat31December2015,
andismadeupof719,209,918shareswithanominalvalueof0.50each.
Thesharecapitalisfullysubscribedandpaidup.
.59
9.b.
Reserves
Thechangesof"Reserves"areasfollows:
(inthousandsofeuro)
Share
premium
reserve
Legal
reserve
Fairvalue
reserve
Translation
reserve
Other
reserves
Total
reserves
5,044
22,644
14,051
(5,001)
53,145
89,883
Increasesincapital
Fairvaluemeasurementofhedginginstruments
6,038
6,038
Fairvaluemeasurementofsecurities
1,438
1,438
Securitiesfairvaluereservereleasedtoincome
statement
(7,538)
(7,538)
Balanceat31December2014
Effectsofequitychanges
insubsidiaries
723
(377)
15,200
15,546
Currencytranslationdifferences
922
1,202
2,124
3,080
3,080
5,044
22,644
15,634
(4,176)
71,425
110,571
Increasesincapital
Fairvaluemeasurementofhedginginstruments
560
560
Fairvaluemeasurementofsecurities
(6.862)
(6,862)
Securitiesfairvaluereservereleasedtoincome
statement
(292)
(292)
Effectsofequitychanges
insubsidiaries
241
(42)
(20,821)
(20,622)
Currencytranslationdifferences
(1,329)
(1,329)
(3,344)
(3,344)
Balanceat30June2016
5,044
22,644
9,281
(5,547)
47,260
78,682
(inthousandsofeuro)
31.12.2015
Increases
Decreases
30.06.2016
(9,651)
130
5,418
(73)
(4,176)
33
33
(1,006)
(393)
(5)
(1,404)
(10,657)
163
5,025
(78)
(5,547)
The"Fairvaluereserve",netoftax,waspositivefor9,281thousandandreferred(inpositive)to
the measurement of "Securities" in item 7.g. for 8,639 thousand and to the measurement of
"Availableforsale financial assets" in item 8.f. for 2,990 thousand, and in negative to the
measurementofhedgesfor2,348thousand.
The "Translation reserve" had a negative balance of 5,547 thousand at 30 June 2016 with the
followingbreakdown:
SogefiGroup
KosGroup
CIRInternational
Other
Total
.60
"Otherreserves"aremadeupasfollows:
Mergersurplus
43
Reserveforthedifferencebetweenthecarryingvaluesofinvesteecompanies
andtherespectiveportionsofconsolidatedequity
Total
9.c.
47,217
47,260
Retainedearnings(losses)
ThechangesinRetainedearnings(losses)areshowninthe"StatementofChangesinEquity".
10. Noncurrentliabilities
10.a. Bonds
Thebreakdownof"Bonds",netofintercompanyeliminations,isasfollows:
(inthousandsofeuro)
30.06.2016
31.12.2015
GruppoEditorialeL'EspressoS.p.A.ConvertibleBond2.625%2014/2019
81,507
79,497
SogefiS.p.A.Bond2013/2023inUSD
88,477
105,302
SogefiS.p.A.Bond2013/2020
24,946
24,940
SogefiS.p.A.2%2014/2021ConvertibleBond
Total
80,302
78,627
275,232
288,366
In application of IAS 32 and 39, the original values of bond issues were written down to take into
accountexpensesincurredandissuediscounts.
10.b. Otherborrowings
(inthousandsofeuro)
Collateralisedbankloans
Otherbankloans
Leases
Otherpayables
Total
30.06.2016
31.12.2015
38,203
42,179
204,914
275,464
86,532
89,767
12,512
342,161
14,500
421,910
ThisitemconsistsofloanstotheSogefigroupfor100,698thousand,fromloanstotheKOSgroup
for202,326thousandandaloangrantedtotheparentcompanyCofidefor39,137thousand.
"Otherpayables"include10,251thousandrelatingtothefairvalueofderivativecontractshedging
interestraterisk.
.61
10.c. Personnelprovisions
Thedetailsofthisitemareasfollows:
(inthousandsofeuro)
30.06.2016
31.12.2015
71,443
60,178
131,621
75,118
49,504
124,622
30.06.2016
124,622
10,893
1,377
13,211
(5,349)
(1,912)
(11,221)
131,621
31.12.2015
143,854
22,343
2,732
(10,529)
(13,808)
28
(19,998)
124,622
Employeeleavingindemnity(TFR)
Pensionfundsandsimilarobligations
Total
(inthousandsofeuro)
Openingbalance
Provisionsforserviceduringtheperiod
Increasesforinterest
Actuarialgainsorlosses
Benefitspaid
Increasesordecreasesduetochangesinthescopeofconsolidation
Otherchanges
Closingbalance
The significant change in Actuarial gains or losses reflects the reduction in the discounting rate
from3.9%to3%.
10.d. Provisionsforrisksandlosses
Thebreakdownandchangesinthenoncurrentpartoftheseprovisionsareasfollows:
(inthousandsofeuro)
Provisionsmadeduringtheperiod
Uses
Exchangeratedifferences
Otherchanges
Balanceat30June2016
Provision
Provisionfor
forpendingdisputes restructuringcharges
Provision
forotherrisks
Total
12,734
5,194
63,055
80,983
770
161
2,960
3,891
(562)
(2,406)
(2,073)
(5,041)
40
169
213
(993)
25
(9)
(977)
11,953
3,014
64,102
79,069
The provision for other risks includes the provision for product warranties allocated by the Sogefi
Grouptocoverclaimsfromtwocustomersrelatingtothesupplyfrom2010onwardsofadefective
part by Sogefi Air & Refroidissement France S.A.S., before, and partly after, its acquisition by the
SogefiGroup.Intheopinionofthecompany,thedefectwascausedbyathermostatatthebaseof
thecomponentthatwasmadebyasupplierofSogefiAir&RefroidissementFranceS.A.S.In2012,
thecompanytookthatsuppliertocourtinFrance,requestingreimbursementforallindemnitiesthat
mightbepayabletocustomers.
ThelawsuitinvolvedatechnicalinspectionbyanexpertappointedbytheCourt.Thecourtappointed
an expert in June 2012. Proceedings on the merits have therefore been suspended, pending the
expert's report. The expert has established that the origin of the defect relates to the thermostat,
whichwasmadebyasupplierofSogefiAir&RefroidissementFranceS.A.S.
In2014,thetwocustomersintervenedintheproceedingsbyaskingfortheexpertappraisalalsoto
definethecompensationduetothem.Thisrequestwasacceptedandtheexpert'sappointmentwas
subsequentlyextended.
.62
Previously,thetwocustomershadsubmittedclaimsfordamagesoutofcourt.Todate,thereareno
otherproceedingspendinginwhichthetwocustomersareinvolved.
The customers have requested damages, which they estimate at 122.8 million, mainly related to
pastandfuturecampaigns,and65.9millionforreputationaldamageandlossofprofits.
Basedontheproceedingsthatarecurrentlypending,theCompanyanditslegalcounselbelievethat
thelikelihoodofaliabilityasaresultofthisclaimisremote.
Withregardtothefirstrequest,eachclaimhasbeendividedwiththeaimidentifyingthecostsfor
eachproductionperiod.Ofthe122.8million,theCompanyestimatesthat60.4millionrelatesto
theperiodpriortotheacquisitionofSogefiAir&RefroidissementFranceS.A.SfromtheSogefiGroup
and26.6milliontothe7monthsimmediatelyafterwards.
TheCompanyhasalreadysettledwiththecustomersthroughdebitnotesforatotalof3million.In
addition, in the first half of 2015, the Company paid 18.0 million to the two customers. These
amountswerepaidtothesecustomersbySogefiAir&RefroidissementFranceS.A.S.onaprovisional
basisunderstandstillagreements,withoutadmissionofliability.Theseamountswillbeadjustedand
possiblypartiallyreimbursedwhenthejudgementontheissuewillbeissued.
During2015,theCompanyhaddecidedtosetasideanadditional11.8millionintheProvisionfor
productwarranties.Thisamountwasreviewedattheendofthefirsthalfof2016,havingregardfor
thedevelopmentsinthecaseinprogress.Thecompanystillconsiderstheprovisiontobeadequate.
InMay2016,SogefiS.p.A.receivedtheoutcomeoftheinternationalarbitrationpromotedinrelation
toDayco,thesellerofSogefiAir&RefroidissementFranceS.A.S.,fortherecoveryofcostsincurred
bySogefiAir&RefroidissementFranceS.A.S.subsequenttotheacquisition.
Summarising heavily, the arbitration award recognised the general principle that Dayco should
indemnify Sogefi for claims relating to production prior to the acquisition of Sogefi Air &
RefroidissementFranceS.A.S.bySogefi,requiringDaycotopay9.4millionfortheclaimsthathave
alreadybeensettled.
The award however makes Sogefi responsible for any claim payments relating to production
subsequenttotheacquisition.Thecompanyreservestherighttotakeallappropriateactionbefore
thecompetentauthorities.
With reference to the compensation expected from the seller of the shares in Sogefi Air &
Refroidissement France S.A.S., it should be noted that in 2011 the Sogefi Group recorded in its
consolidated financial statements an indemnification asset of 23.4 million, having received from
theseller,DaycoEuropeS.r.l.,contractualguaranteesrelatingtodefectiveproductsoutstandingat
thedateofacquisition,includingtheonedescribedabove.
Based on the outcome of the arbitration, the company has reduced its expected recoveries from
Daycoby4millionand,therefore,haswrittendownitsindemnificationassetbythatamountat30
June2016.Daycopaidthecompany4.9millioninJuly2016,beingpartoftheindemnityof9.4
millionreferredtoabove.
These are complex procedures, which include an assessment of the technical, legal and market
aspects;thereisconsiderableuncertaintyaboutwhatthefinaldecisionsbytheFrenchcourtandthe
arbitrationpanelwillbe.Theestimateoftheriskprovisionandtherecoveryoftheassetsthathave
been recognised is based on the best information available during preparation of the financial
statements.Theyaresubjecttoevolutionovertimeonthebasisofeventsastheymaterialise.
.63
Thebreakdownandchangesinthecurrentpartof"Provisionsforrisksandlosses"areasfollows:
(inthousandsofeuro)
Provisionsmadeduringtheperiod
Uses
Exchangeratedifferences
Otherchanges
Balanceat30June2016
Provisionfor
pendingdisputes
Provisionfor
restructuringcharges
Provisionfor
otherrisks
Total
4,683
11,627
55,457
71,767
2,847
2,850
(1,355)
(3,715)
(3,865)
(8,935)
(52)
(52)
960
102
1,062
4,291
7,912
54,489
66,692
Apart from the libel disputes regarding the Espresso Group, which are typical of all publishing
businesses,theprovisionfordisputespendingalsocoversrisksforlitigationofacommercialnature
andlaboursuits.Theprovisionforrestructuringchargesincludesamountssetasideforrestructuring
plansthathavebeenpubliclyannouncedandcommunicatedtothepartiesconcernedandrefersin
particulartotheproductionreorganisationprojectsinvolvingcompaniesoftheEspressoGroups.
Theprovisionforotherrisksismainlytocovertaxdisputespendingwithlocaltaxauthorities.
11. Currentliabilities
11.a. Bonds
Thisitem,totalling19,990thousand,includes14,802thousandrepresentingthecurrentportion
of the Sogefi S.p.A. Bond 2013/2020 denominated in USD and 5,188 thousand representing the
currentportionoftheGruppoEditorialeLEspressoS.p.A.Bond2014/2019.
11.b. Otherborrowings
(inthousandsofeuro)
Collateralisedbankloans
Otherbankloans
Leases
Otherborrowings
Total
30.06.2016
31.12.2015
6,925
5,758
135,951
91,232
9,960
10,252
41,651
194,487
43,074
150,316
Thisitemrelatefor109,549thousandtoloanswithintheSogefiGroup,for49,237thousandto
loanswithintheKosGroupandfor35,119thousandtoloanswithintheEspressoGroup.
11.c. Tradepayables
(inthousandsofeuro)
30.06.2016
Payablessubsidiariesandjointventures
Payablesassociates
Payablessuppliers
Advancepayments
Total
31.12.2015
2,058
2,242
440,401
421,747
4,644
4,175
447,112
428,173
.64
11.d. Otherpayables
(inthousandsofeuro)
30.06.2016
31.12.2015
Duetoemployees
83,822
73,257
Taxpayables
47,630
32,467
Socialsecuritypayables
38,513
48,705
50,283
220,248
46,556
200,985
Otherpayables
Total
.65
NOTESONTHEINCOMESTATEMENT
12. Revenues
BREAKDOWNBYBUSINESSSECTOR
(inmillionsofeuro)
Media
1sthalf2015
%
amount
1sthalf2016
amount
Change
%
292.9
22.2
305.7
23.7
(4.2)
798.6
60.5
763.7
59.2
4.6
Healthcare
227.6
17.3
217.3
16.8
4.7
4.0
0.3
n.s.
1,319.1
100.0
1,290.7
100.0
2.2
Other
BREAKDOWNBYGEOGRAPHICALAREA
(inmillionsofeuro)
1sthalf2016
Total
revenues
Italy
Other
countries
European
North
America
South
America
Asia
Other
Countries
Media
292.9
292.9
798.6
54.1
453.6
150.6
73.8
63.5
3.0
Healthcare
227.6
221.8
3.5
2.3
Other
1,319.1
568.8
457.1
150.6
73.8
65.8
3.0
Percentages
100.0%
43.1%
34.7%
11.4%
5.6%
5.0%
0.2%
(inmillionsofeuro)
1sthalf2015
Total
revenues
Italy
Other
countries
European
North
America
South
America
Asia
Other
Countries
Media
305.7
305.7
763.7
57.1
441.6
120.9
90.4
50.6
3.1
Healthcare
217.3
212.5
3.5
1.3
4.0
3.2
0.8
1,290.7
578.5
445.9
120.9
90.4
51.9
3.1
Percentages
100.0%
44.8%
34.6%
9.4%
7.0%
4.0%
0.2%
Other
The types of products marketed by the Group and the nature of its business sectors mean that
revenue flows are reasonably linear throughout the period and are not subject to any particular
cyclicalphenomenaonalikeforlikebasis.
.66
13. Operatingcostsandincome
13.a. Costsforthepurchaseofgoods
Costs for the purchase of goods increased from 483,948 thousand in the first half of 2015 to
498,046 thousand in the same period of 2016. The increase is mainly attributable to the Sogefi
Group.
13.b. Costsforservices
Thisitemwentfrom312,441thousandinthefirsthalfof2015to307,988thousandinthefirst
halfof2016,ascanbeseenfromthefollowingbreakdown:
1sthalf
2016
Technicalandprofessionalconsulting
46,066
1sthalf
2015
42,100
Distributionandtransportcosts
18,047
20,081
Outsourcing
18,542
23,886
Otherexpenses
225,333
307,988
226,374
(inthousandsofeuro)
Total
312,441
13.c. Personnelcosts
Personnelcostsamountedto363,987thousandinthefirsthalfof2016(362,020thousandinthe
firsthalfof2015)andareasfollows:
1sthalf
2016
253,624
1sthalf
2015
254,240
Socialsecuritycontributions
81,167
81,369
Employeeleavingindemnity
9,649
9,422
Pensionsandsimilarbenefits
1,244
1,224
Valuationofstockoptionplans
2,405
2,268
(inthousandsofeuro)
Salariesandwages
Othercosts
Total
15,898
13,497
363,987
362,020
TheaveragenumberofemployeesoftheGroupinthefirsthalfof2016was14,417(14,005inthe
firsthalfof2015).
13.d. Otheroperatingincome
Thisitemcanbebrokendownasfollows:
1sthalf
2016
119
1sthalf
2015
513
49
1,711
Miscellaneousgainsandotherincome
11,812
32,489
Total
11,980
34,713
(inthousandsofeuro)
Stategrants
Capitalgainsonassetdisposals
.67
During the first half of 2015, Miscellaneous gains and other income included use by the Sogefi
Groupofprovisionsforrestructuringandproductwarrantiestotalling18million.
13.e. Otheroperatingexpense
Thisitemcanbebrokendownasfollows:
(inthousandsofeuro)
Writedownsandlossesonreceivables
Allocationstoprovisionsforrisksandlosses
1sthalf
2016
2,055
1sthalf
2015
1,841
4,052
14,359
16,250
15,604
3,233
1,880
177
285
Miscellaneouslossesandothercosts
12,423
26,165
Total
38,190
60,134
Indirecttaxes
Restructuringcharges
Capitallossesonassetdisposals
ThedecreaseismainlyattributabletotheSogefiGroup.
"Restructuring charges" relate to the costs involved in the restructuring plans already being
implementedbytheSogefiGroup.
14. Financialincomeandexpense
14.a. Financialincome
Thisitemismadeupof:
1sthalf
2016
440
810
2,765
968
951
1
5,935
(inthousandsofeuro)
Interestincomeonbankaccounts
Interestonsecurities
Otherinterestincome
Interestratederivatives
Exchangegains
Otherfinancialincome
Total
1sthalf
2015
974
1,097
2,242
2,736
1,631
8,680
.68
14.b. Financialexpense
Thisitemismadeupof:
1sthalf
2016
7,002
1sthalf
2015
8,838
Interestexpenseonbonds
9,979
9,687
Otherinterestexpense
5,413
4,107
Interestratederivatives
3,050
3,281
36
67
5,538
6,541
31,018
32,521
Othersecuritiesandothergains
1sthalf
2016
10,053
1sthalf
2015
23,594
Total
10,053
23,594
1sthalf
2016
1sthalf
2015
2,038
(inthousandsofeuro)
Interestexpenseonbankaccounts
Exchangelosses
Otherfinancialexpenses
Total
14.c. Gainsfromtradingsecurities
Thebreakdownof"Gainsfromtradingsecurities"isasfollows:
(inthousandsofeuro)
14.d. Lossesfromtradingsecurities
Thebreakdownof"Lossesfromtradingsecurities"isthefollowing:
(inthousandsofeuro)
Sharesandoptionsothercompanies
Othersecuritiesandotherlosses
538
109
Total
538
2,147
1sthalf
2016
13,460
1sthalf
2015
18,975
Deferredtaxes
3,955
(2,642)
Prioryeartaxes
(213)
393
17,202
16,726
15. Incometaxes
Incometaxescanbebrokendownasfollows:
(inthousandsofeuro)
Currenttaxes
Total
16. Earningspershare
Basic earnings per share is calculated by dividing net income for the period attributable to the
ordinaryshareholdersbytheweightedaveragenumberofsharesincirculation.Dilutedearningsper
shareiscalculatedbydividingnetincomefortheperiodattributabletotheordinaryshareholdersby
.69
the weighted average number of ordinary shares in circulation during the period, adjusted for the
dilutiveeffectofoutstandingoptions.Treasurysharesarenotincludedinthecalculation.
Thecompanydoesnothaveanyoutstandingoptionsortreasuryshares,sodilutedEPSpershareis
thesameasbasicEPS.
Thefollowingchartprovidesinformationonthesharesusedtocalculatebasicanddilutedearnings
pershare.
1sthalf
2016
17,543
1sthalf
2015
20,235
719,209,918
719,209,918
Basicearningspershare(euro)
0.0244
0.0283
(inthousandsofeuro)
1sthalf
2016
1sthalf
2015
Netincomefromthestatementofcomprehensiveincome
attributabletotheshareholders(inthousandsofeuro)
6,330
25,312
Weightedaveragenumberofordinarysharesincirculation
719,209,918
719,209,918
0.0088
0.0352
(inthousandsofeuro)
Netincomeattributabletotheshareholders(inthousandsofeuro)
Weightedaveragenumberofordinarysharesincirculation
Totaldilutedearnings(loss)pershare(euro)
17. Dividendspaid
Dividendpaymentsduringthefirsthalfof2016amountedto10,069thousand,being0.014per
share.
18. Financialriskmanagement:additionaldisclosures
The COFIDE Group operates in various industry and service sectors, both nationally and
internationally, so its business is exposed to various kinds of financial risk, including market risk
(exchangerateriskandpricerisk),creditrisk,liquidityriskandinterestraterisk.
TheGroupuseshedgingderivativestominimisecertaintypesofrisks.
Riskmanagementiscarriedoutbythecentralfinanceandtreasuryfunctiononthebasisofpolicies
approvedbytopmanagementandcommunicatedtothesubsidiarieson25July2003.
18.a. Marketrisk
Foreigncurrencyrisk
AstheGroupoperatesinternationally,Sogefiinparticular,itisexposedtotheriskthatfluctuationsin
exchange rates could affect the fair value of some of its assets and liabilities. The Sogefi Group
producesandsellsmainlyintheEuroArea,butitissubjecttoforeigncurrencyrisk,especiallyversus
theGBpound,Brazilianreal,USdollar,Argentinepeso,ChineserenminbiandCanadiandollar.
Regarding the exchange rate risk associated with translation of the financial statements of
international subsidiaries, the operating companies generally have a high degree of convergence
betweenthecurrenciesoftheirsourcingcostsandtheirsalesrevenues,areactivebothintheirown
domesticmarketsandabroadand,ifnecessary,canarrangefundinglocally.
.70
18.b. Creditrisk
Credit risk can be valued both in commercial terms by customer type, contractual terms and sales
concentration,andinfinancialtermsbytypeofcounterpartyusedinfinancialtransactions.Thereis
nosignificantconcentrationofcreditriskwithintheGroup.
Sometimeagoadequate policieswereputin place toensurethatsalesaremadetocustomersof
good standing. The counterparties for derivative products and cash transactions are exclusively
financial institutions with a high credit rating. The Group has policies that limit credit exposure to
individualfinancialinstitutions.
Creditriskcanvarydependingonthebusinesssectorconcerned.Inthe"AutomotiveComponents"
sector there is no excessive concentration of credit risk since the Original Equipment and After
market distribution channels with which it operates are car manufacturers or large purchasing
groupswithoutanyparticularconcentrationofrisk.
The "Media" sector does not have any significant areas of credit risk and in any event the Group
adoptsoperatingproceduresthatpreventthesaleofproductsorservicestocustomerswithoutan
adequatecreditprofileorcollateral.
The"Healthcare"sectorhasdifferentconcentrationsofreceivablesdependingonthenatureofthe
activities carried on by the operating companies, as well as by their different target customers,
mitigated, however, by the fact that the credit exposure is spread over a large number of
counterparties and customers. For example, the concentration of receivables is lower than in the
case of management of residential care homes, whose revenues derive more than 50% from the
numberofguestsinthestructureandwhosereceivablesrecordedinthefinancialstatementsfrom
publicentities(mainlylocalhealthauthoritiesandmunicipalities)areduefromapluralityofsubjects.
Theconcentrationofreceivablesisgreaterthaninthecaseofhospitalmanagement(orofdiagnostic
imagingdepartmentsinhospitals)duetothefactthatalmostalloftherevenuesderivefromasingle
subject.
Themonitoringofcreditriskversuscustomersincludesgroupingreceivablestogetherbytype,age,
thewhetherthecompanyisinfinancialdifficultyorisinvolvedindisputesandtheexistenceoflegal
orinsolvencyproceedings.
Since2006theCOFIDEGrouphasbeenacquiringandmanagingnonperformingloansandhasputin
placeproceduresformeasuringandestablishingthefairvalueofitsportfolios.
18.c. Liquidityrisk
Prudentmanagementofliquidityriskimpliesmaintainingsufficientliquidityandnegotiablesecurities
andensuringanadequatesupplyofcreditfacilitiestoensureadequatefunding.
The Group systematically meets its maturities and commitments, and such conduct enables it to
operate on the market with the necessary flexibility and reliability to maintain a correct balance
betweenfundinganddeploymentofitsfinancialresources.
Thecompaniesheadingupthethreemainbusinesssectorsmanagetheirownliquidityriskdirectly
andindependently.Tightcontrolisexercisedoverthenetfinancialpositionanditsmovementsinthe
short,mediumandlongterm.Ingeneral,theCOFIDEGroupfollowsanextremelyprudentfinancial
policy using mainly medium/longterm funding structures. Treasury management is centralised for
eachoftheoperatinggroups.
18.d. Interestraterisk(fairvalueandcashflow)
Interestrateriskdependsonfluctuationsinmarketrates,whichcancausechangesinthefairvalue
ofcashflowsoffinancialassetsorliabilities.
Interestrateriskmainlyconcernslongtermbondsissuedatafixedrate,whichexposestheGroupto
theriskoffluctuationsintheirfairvalueasinterestrateschange.
.71
In line with the Group's risk management policies, the Parent Company and the subsidiaries have
entered into various IRS contracts and other types of derivatives over the years in order to hedge
interestrateriskontheirbondissuesandbankborrowings.
18.e. Derivatives
Derivativesaremeasuredatfairvalue.
Foraccountingpurposeshedgingtransactionscanbeclassifiedas:
fairvaluehedges,iftheyaresubjecttopricechangesinthemarketvalueoftheunderlyingasset
orliability;
cash flow hedges, if they are entered into against the risk of changes in cash flows from an
existingassetandliability,orfromafuturetransaction;
hedges of net investments in foreign operations, if they are entered into to protect against
foreigncurrencyriskfromthetranslationofsubsidiariesequitydenominatedinacurrencyother
thantheGroupsfunctionalcurrency.
Forderivativesclassifiedasfairvaluehedges,gainsandlossesresultingfromboththedetermination
of their market value and the adjustment to fair value of the element underlying the hedge are
recognisedtotheincomestatement.
Forinstrumentsclassifiedascashflowhedges(interestrateswaps),gainsandlossesfrommarking
them to market are recognised directly to equity for the part which "effectively" hedges the
underlyingrisk,whileany"noneffective"partisrecognisedtotheincomestatement.
Forinstrumentsclassifiedashedgesofanetinvestmentinaforeignoperation,gainsandlossesfrom
markingthemtomarketarerecogniseddirectlytoequityforthepartwhich"effectively"hedgesthe
underlyingrisk,whileany"noneffective"partisrecognisedtotheincomestatement.
Oninitialrecognitionunderhedgeaccounting,derivativesareaccompaniedbyaneffectivehedging
relationship which designates the individual derivative as a hedge and specifies its effectiveness
parametersinrelationtothefinancialinstrumentbeinghedged.
Hedge effectiveness is tested at regular intervals, with the effective part of the relationship being
recognisedtoequityandtheineffectivepart,ifany,totheincomestatement.Morespecifically,the
hedge is considered effective when the change in fair value or in the cash flows of the instrument
being hedged is "almost entirely" offset by the change in fair value or cash flows of the hedging
instrument,andwhentheresultsachievedareinarangeof80%125%.
18.f. Capitalratios
Management modulates the use of leverage to guarantee solidity and flexibility in the capital
structure of CIR and its financial holding companies, measuring the ratio of funding sources to
investmentactivity.
18.g. Borrowingconditions
SomeoftheGroup'sborrowingagreementscontainspecialclauseswhich,intheeventoffailureto
comply with certain economic and financial covenants, give the lending banks an option to claim
immediate repayment if the company involved does not immediately remedy the infringement of
suchcovenantsasrequiredunderthetermsandconditionsoftheagreements.
At30June2016allthecontractualclausesrelatingtomediumandlongtermfinancialliabilitieswere
fullycompliedwithbytheGroup.
.72

Below is a summary of the main covenant relating to the borrowings of the operating subholding
companiesoutstandingatperiodend.
EspressoGroup
The Convertible Bond 2014/2019 and related interest payments are not backed by specific
guaranteesnorarethereanycovenantsorclausesthatcouldtriggerearlyrepayment.
SogefiGroup
Thecovenantsrelatingtodebtoutstandingattheendofthefirsthalfof2016aredescribedbelow:
loanof60,000thousandIntesaSanpaoloS.p.A.:ratioofconsolidatednetfinancialpositionto
consolidatednormalisedEBITDAoflessthanorequalto3.5;
loan of 15,000 thousand Banco do Brasil S.A.: ratio of consolidated net financial position to
consolidated normalised EBITDA of less than or equal to 3.5; ratio of consolidated normalised
EBITDAtoconsolidatednetfinancialexpensesofnotlessthan4;
loan of 20,000 thousand Mediobanca S.p.A.: ratio of consolidated net financial position to
loan of 50,000 thousand Unicredit S.p.A.: ratio of consolidated net financial position to
loan of 55,000 thousand BNP Paribas S.A.: ratio of consolidated net financial position to
loan of 20,000 thousand Mediobanca S.p.A.: ratio of consolidated net financial position to
loanof30,000thousandSocitGnraleS.A.:ratioofconsolidatednetfinancialpositionto
loan of 30,000 thousand Ing Bank N.V.: ratio of consolidated net financial position to
bond of USD 115,000 thousand: ratio of consolidated net financial position to consolidated
normalised EBITDA of less than or equal to 3.5; ratio of consolidated normalised EBITDA to
consolidatednetfinancialexpensesofnotlessthan4;
bond of 25,000 thousand: ratio of consolidated net financial position to consolidated

normalised EBITDA of less than or equal to 3.5; ratio of consolidated normalised EBITDA to
consolidatednetfinancialexpensesofnotlessthan4.
At30June2016,thesecovenantswereallrespected.
.73
KOSGroup
TheKOSGrouphasundertakentocomplywiththefollowingcovenantrelatingtosomeofitsloans:
alineofcreditobtainedbytheparentcompanyKOS:ratioofconsolidatednetfinancialposition
toconsolidatedEBITDAoflessthan4andratioofEBITDAandfinancialexpenseofmorethan3.5;
loan obtained by Istituto di Riabilitazione Santo Stefano S.r.l.: ratio of net financial position to
EBITDAoflessthan4.25;
loan obtained by Istituto di Riabilitazione Santo Stefano S.r.l.: ratio of net financial position to
EBITDAoflessthan4;
loanobtainedbyResidenzeAnniAzzurriS.r.l.:ratioofnetfinancialpositiontoEBITDAoflessthan
4;
loan obtained by Medipass S.p.A.: ratio of net financial position to EBITDA of less than 2.6 and
ratio of consolidated net financial position to consolidated shareholders' equity of less than 2.2
andaDebtServiceCoverageRatioofmorethan1;
loan obtained by Clearmedi Ltd: Tangible Net Worth greater than INR 200 million, Turnover
greaterthanINR275millionandGearingoflessthan7.5.
At30June2016,thesecovenantswereallrespected.
Certainloanagreementsalsocontainnegativepledge,paripassuandchangeofcontrolclauses,as
well as limitations on the distribution of dividends. At the date of preparation of this report there
havenotbeenanybreachesoftheseclausesandcovenants.
18.h. Measurementoffinancialassetsandliabilitiesandfairvaluehierarchy
Thefairvalueoffinancialassetsandliabilitiesiscalculatedasfollows:
the fair value of financial assets and liabilities with standard terms and conditions listed on an
activemarketismeasuredonthebasisofpricespublishedontheactivemarket;
the fair value of other financial assets and liabilities (except for derivatives) is measured using
commonlyacceptedvaluationtechniquesbasedonanalyticalmodelsusingdiscountedcashflows,
whichasvariablesusepricesobservableinrecentmarkettransactionsandbrokerlistedpricesfor
similarinstruments.
thefairvalueofderivativesthatarelistedonanactivemarketismeasuredonthebasisofmarket
prices; if no prices are published, different approaches are used according to the type of
instrument.
In particular, for the measurement of certain investments in bond instruments with no regular
market,i.e.wherethereisaninsufficientnumberoffrequenttransactionswithabidaskspreadand
asufficientlylimitedvolatility,thefairvalueoftheseinstrumentsismeasuredprincipallyonthebasis
ofpricessuppliedbyleadinginternationalbrokersatthecompany'srequest.Thesepricesarethen
validatedbycomparingthemwithmarketprices,eveniflimitedinnumber,orwithpricesthatare
observableforotherinstrumentswithsimilarcharacteristics.
Inmeasuringinvestmentsinprivateequityfunds,fairvalueisdeterminedonthebasisoftheNAV
communicated by the fund administrators at the reporting date. Where such information is not
availableatthereportingdate,thelastofficialcommunicationisused,thoughitmustnotbemore
than three months old at the reporting date and, if necessary, validated against more recent
informationmadeavailabletoinvestorsbythefundadministrators.
.74
Notransfersweremadebetweenthedifferentlevelsofthefairvaluehierarchyduringthefirsthalf
of2016.AsfarasthefinancialassetsclassifiedasLevel3areconcerned,theseareventurecapital
investments which are measured using some inputs that are not observable on the market. These
investmentsareheldbytheGroupthroughCIRInternationalforinvestmentsincompaniesoperating
intheinformationtechnologyandcommunication(ITC)sector(foratotalof707thousand).
The following table shows changes in financial assets measured at fair value (Level 3) during the
period:
Heldfortrading
Openingposition
Increases
Purchases
Gainsrecognisedto:
Incomestatement(1)
ofwhichgains
Equity(2)
Transferredfromotherlevels
Otherincreases
Decreases
Sales
Repayments
Lossesrecognisedto:
Incomestatement(3)
ofwhichlosses
Equity(4)
Transferredfromotherlevels
Otherdecreases
Closingposition
FINANCIALASSETS(Level3)
Measuredat Availableforsale
fairvalue
858
591
591
Hedges
(589)
(150)
(3)
707
(13)Increases/decreasesinfinancialassetsarerecognisedtotheincomestatementunderthefollowingheadings:
Item14.c.:Gainsfromtradingsecurities
Item14.d.:Lossesfromtradingsecurities
Item14.e.:Adjustmentstothevalueoffinancialassets
(24)Thegainsandlossesrelatedtochangesinfairvaluearerecognisedunderitem9.b."ReservesFairvaluereserves"
withtheexceptionofimpairmentlosseswhicharerecognisedunderitem14.e."Adjustmentstothevalueoffinancialassets"
untiltheassetistransferred,atwhichtimethecumulativeincreasesanddecreasesrecordedinthevaluationreservesare
recognised as gains or losses in items 14.c. "Gains from trading securities" and 14.d. "Losses from trading securities"
.75
19. Guaranteesandcommitments
At30June2016thepositionofguaranteesandcommitmentswasthefollowing:
COFIDE
CIR shares for a total carrying amount of 335,278 thousand have been pledged to the bank as
collateralfortheloan.
CIRandfinancialholdingcompanies
CommitmentsforprivateequityfundinvestmentsbyCIRInternationalfor4.9million;
EspressoGroup
At30June2016thegrouphadoutstandingcommitmentsof43,226thousandinrelationto:
contractsforthepurchaseofplantsandotherprintingequipmentfor591thousand;
guaranteesgivenbytheParentCompanytothecompaniesinvolvedintheGroupVATreturnfor
15,382thousand;
suretiesgivenforupto20millionbytheParentCompanyinfavourofA.Manzoni&C.S.p.A.
pursuanttoafactoringcontractsignedwithaleadingbank;
otherguaranteesfor7,253thousand,whichmainlyrelatetoguaranteesinfavouroftheParent
Company and the subsidiaries Elemedia and Finegil Editoriale, NordEst and Nuova Sardegna
divisions.
SogefiGroup
Operatingleases
For accounting purposes, leases and rental contracts are classified as operating leases when the
followingconditionsapply:
asignificantpartoftherisksandbenefitsofownershipareretainedbythelessor;
therearenobargainpurchaseoptionsfortheassetattheendofthelease;
the duration of the contract does not cover most of the useful life of the asset being leased or
rented;
atthestartofthelease,thepresentvalueoftheminimumleasepaymentsdoesnotequalthefair
valueoftheleasedasset.
Instalment payments for operating leases are booked to the income statement in line with the
underlyingcontracts.
Themainoperatingleasesoutstandingat30June2016refertothefollowingsubsidiaries:
Sogefi(Suzhou)AutoPartsCo.LtdfortheleaseofthreeproductionsiteslocatedinWujiang,for
which the contract terminates in September 2033. At 30 June 2016 the residual instalments
.76
amountto15,130thousand,ofwhich370thousandduewithinoneyear.TheGrouphasnot
givenanyformofguaranteeonthiscontract;
SogefiFiltrationFranceS.A.fortheleaseoftheGuyancourtoffices.Thetwocontractsterminate
inMarch2020andMay2021respectively;at30June2016theresidualinstalmentsamountto
2,871thousand,ofwhich778thousandduewithinoneyear.TheGrouphasnotgivenanyform
ofguaranteeonthiscontract;
Allevard Federn GmbH for the lease of the Volklingen production site. The contract expires in
September2020.Theresidualinstalmentsat30June2016amountto1,633thousand,ofwhich
384 thousand due within one year. The Group has not given any form of guarantee on this
contract;
Sogefi Air & Cooling Canada Corp. for the lease of the Montreal production site. The contract
terminates in December 2021 and at 30 June 2016 the residual instalments amount to 4,513
thousand,ofwhich963thousandduewithinoneyear.Againstthiscontract,SogefiS.p.A.has
issuedaguaranteeforapproximately100%oftheresidualleaseinstalments;
SogefiEngineSystems MexicoS.deR.L.deC.V.for theleaseof the Monterreyproductionsite.

ThecontractterminatesinJune2031andat30June2016theresidualinstalmentsamountto
20,202 thousand, of which 805 thousand due within one year. Against this contract, Sogefi
S.p.A.hasissuedaguaranteeforapproximately100%oftheresidualleaseinstalments;
Allevard Sogefi U.S.A. Inc. for the lease of the production site in Prichard (West Virginia). The
contractterminatesinMay2019andtheresidualinstalmentsat30June2016amountto1,051
thousand,ofwhich366thousandduewithinoneyear.Againstthiscontract,SogefiS.p.A.has
issued a guarantee for approximately 84% of the residual lease instalments. The guarantee is
renewed at the end of each year based on the residual amount outstanding. There are no
restrictionsofanykindconnectedwiththiskindofleasingand,attheendofthecontract,theUS
companywillhavetherighttobuythepropertyatitsmarketvalue.
Investmentcommitments
At30June2016therearebindingcommitmentsforinvestmentsrelatingtothepurchaseoftangible
assetsof3,974thousand.
Guaranteesgiven
Detailsoftheseguaranteesareasfollows:
(inthousandsofeuro)
30.06.2016
31.12.2015
Suretiesgiventothirdparties
4,944
4,984
Otherunsecuredguaranteesgiventothirdparties
2,463
2,463
10,780
8,422
Securedguaranteesgivenforborrowingsshowninthefinancial
statements
Thesuretiesgiveninfavourofthirdpartiesrelatetoguaranteesgiventocertaincustomersandfor
operatingleasecontracts;suretiesareshownatthevalueoftheoutstandingcommitmentasofthe
reportingdate.
.77
"Otherunsecuredguaranteesgiventothirdparties"refertothecommitmentofLPDNGmbHtothe
staff pension fund of the two business divisions at the time of the acquisition in 1996. This
commitment is covered by contractual obligations on the part of the vendor, which is a leading
Germancompany.
The secured guarantees relate exclusively to the subsidiaries Sogefi Air & Cooling Canada Corp.,
Allevard IAI Suspensions Private Ltd, United Springs B.V., SogefiMNR Engine Systems India Pvt Ltd
andSogefiFiltrationdoBrasilLtdawhich,fortheloansobtained,havegrantedtothelenderssecured
guaranteesovertheirtangibleassetsandtradereceivables.
Otherrisks
At30June2016theSogefiGroupheldassetsbelongingtothirdpartiesonitspremisesfor11,779
thousand.
KOSGroup
The following is a breakdown of the bank guarantees and other sureties given by KOS S.p.A. for a
totalof5,925thousand:
aguaranteeinfavouroftheMunicipalityofSanremoasasecuritydepositforurbanisationworks,
for225thousand;
aguaranteeonbehalfofResidenzeAnniAzzurriS.r.l.fortheleaseofSantegidioS.r.l.(Scarnafigi),
for100thousand;
a guarantee on behalf of Residenze Anni Azzurri S.r.l. for the Rivarolo property lease, for 75
thousand;
aguaranteeonbehalfofResidenzeAnniAzzurriS.r.l.fortheRivarolobusinessunitlease,for35
thousand;
aguaranteeonbehalfofResidenzeAnniAzzurriS.r.l.fortheDormellettopropertylease,for200
thousand;
a guarantee on behalf ofResidenze Anni Azzurri S.r.l. for the Dorzano property lease, for 121
thousand;
an omnibus guarantee on behalf of Medipass S.p.A. in its relations with the Venice Health
Authority,for700thousand;
a guarantee on behalf of Immobiliare Durini for the rental of offices in Via Durini, for 46
thousand;
aguaranteeonbehalfofIstitutodiRiabilitazioneS.StefanofortheleaseofVillaRosafor314
thousand;
aguaranteeonbehalfofIstitutodiRiabilitazioneS.StefanofortheleaseofthebuildinginAncona
for309thousand;
aguaranteeonbehalfofIstitutodiRiabilitazioneS.StefanofortherentofVillediNozzanofor
65thousand;
aguaranteeonbehalfofResidenzeAnniAzzurrifortheleaseofthebuildinginSanFaustinofor
1,641thousand;
aguaranteeonbehalfofResidenzeAnniAzzurrifortheleaseofthebuildinginSanFaustino27for
2,094thousand.
.78
Bank guarantees given by other Group companies for 10,628 thousand, with the following
breakdown:
aguaranteegivenbyResidenzeAnniAzzurriS.r.l.toguaranteecarehomeleasepayments,for
9,742thousand;
a guarantee given by companies of the Istituto di Riabilitazione S. Stefano Group for 886
thousand;
At30June2016,othercommitmentsandrisksamountedto8,194thousand,mainlyrelatedto:
assetsonfreeloanfor2,030thousand;
guaranteesissuedbySuzzaraHospitalinfavourofF.lliMontecchi,for953thousand;
contractual commitments for technology upgrades to equipment, where necessary, for

approximately1,474thousand.Giventhecurrentstatusofthecontracts,thereisnoreasonto
considerthiscommitmentprobable;
counterguarantee commitments for the successful completion of structural works for 2,891
thousand.
thirdpartycommitmentstosellfor229thousand;
contractualcommitmentsofaround617thousand.
The Group carries on its business activities in premises, some of which are owned, others rented.
Leasecontractsvaryindurationfrom3to9yearsandaregenerallyrenewable.Ofthe46carehomes
for the elderly in operation at the reporting date, 11 are owned, while 8 of the 30 functional and
psychiatricrehabilitationfacilitiesareowned(includingtworesidentialcarehomesfortheelderly).
Theotherfacilities(dayhospitals,psychiatrictreatmentcommunities,diagnosticsdepartments)are
generallyleased.
20. Informationonthebusinesssector
ThebusinesssectorscoincidewiththeGroupsofcompaniesthatCofideS.p.A.controlsthroughCIR.
Indetail:
theEspressoGroup:media;
theSogefiGroup:automotivecomponents;
theKosGroup:healthcare.
From a geographical point of view, with the exception of the Sogefi Group, business is conducted
almostexclusivelyinItaly.
IncomestatementandbalancesheetinformationbybusinesssegmentisprovidedintheReporton
Operations, whereas details of revenues by geographical area (secondary sector) can be found in
Note12.
.79
CONSOLIDATEDFINANCIALPOSITIONBYBUSINESSSECTOR
(inmillionsof euro )
30.06.2016
CONSOLIDATED
AGGREGATE
Fixedassets
(1)
Othernetnoncurrent
assetsandliabilities
(2)
Networking
capital
Netfinancialposition
(continuingoperations)
(3)
31.12.2015
Totalequity
ofwhich:
Minority
interests
Groupequity
Groupequity
176.2
(4)
EspressoGroup
699.3
(161.7)
46.8
18.2
602.6
417.8
184.8
SogefiGroup
530.6
(37.7)
18.4
(326.2)
185.1
132.6
52.5
52.2
KOSGroup
545.7
(22.9)
(32.4)
(226.3)
264.1
176.5
87.6
72.2
Othersubsidiaries
2.8
(3.9)
2.8
1.7
0.8
0.9
0.9
Totalsubsidiaries
1,775.6
(219.5)
28.9
(531.5)
1,053.5
727.7
325.8
301.5
19.8
113.9
(23.9)
313.3
423.1
192.7
230.4
283.5
(26.6)
1.3
14.5
(2.0)
(26.6)
1.3
14.5
(2.0)
(26.6)
1.2
21.3
(2.0)
(37.7)
(244.8)
1,463.8
543.4
567.8
CIRandfinancialholdingcompanies
COFIDE
Fixedassets
Othernetnoncurrentassetsandliabilities
Networkingcapital
1.3
14.5
(2.0)
Netfinancialposition
ConsolidatedtotalfortheGroup
1,796.7
(91.1)
3.0
920.4
1)
Thisitemisthesumofintangibleassets,tangibleassets,investmentproperty,investmentsincompaniesconsolidated at equityandotherequityinvestments"oftheconsolidatedstatementoffinancialposition.
2)
Thisitemisthesumofotherreceivables","securities"and"deferredtaxes"undernoncurrentassetsandof"otherpayables", "deferredtaxes","personnelprovisions"and"provisionsforrisksandlosses"undernoncurrentliabilitiesofthe
consolidatedstatementoffinancialpositionThisitemalsoincludesthe"assetsheldforsale"and"liabilitiesheldforsale"intheconsolidatedstatementoffinancialposition.
3)
Thisitemisthesumofinventories,contractworkinprogress,tradereceivablesandotherreceivables"undercurrent assets,andoftradepayables,otherpayablesandprovisionsforrisksandlosses"undercurrentliabilitiesinthe
consolidatedstatementoffinancialposition.
4)
Thisitemisthesumof"financialreceivables","securities","availableforsalefinancialassets"and"cashandcashequivalents"undercurrentassets,"bonds"and"otherborrowingsundernoncurrentliabilities,andbankoverdrafts,bonds
andotherborrowingsundercurrentliabilitiesintheconsolidatedstatementoffinancialposition.
.80
21. Jointventures
TheGroupdoesnotholdequityinvestmentsinjointventuresat30June2016.
22. Netfinancialposition
Thenetfinancialpositionisanalysedasfollows:
(inthousandsofeuro)
30.06.2016
31.12.2015
312,643
A.
Cashandbankdeposits
270,653
B.
Othercashequivalents
235,398
251,510
C.
Securitiesheldfortrading
75,140
131,012
581,191
695,165
28,289
30,496
(*)(165,260)
(116,507)
G. Bonds
(19,990)
(5,011)
H. Currentportionofnoncurrentdebt
(51,611)
(53,326)
(236,861)
(174,844)
372,619
550,817
(**)(243,117)
(317,643)
(275,232)
(288,366)
(**)(99,044)
(104,267)
O. Noncurrentfinancialdebt(L)+(M)+(N)
(617,393)
(710,276)
P.
(244,774)
(159,459)
D. Cashandcashequivalents(A)+(B)+(C)
E.
Currentfinancialreceivables
F.
Currentbankpayables
I.
Othercurrentborrowings
J.
Currentfinancialdebt(F)+(G)+(H)+(I)
K.
Currentnetfinancialposition(J)+(E)+(D)
L.
Noncurrentbankborrowings
M. Bondsissued
N. Othernoncurrentpayables
Netfinancialposition(K)+(O)
(*)142,876thousand(165,26022,384)isclassifiedintheStatementofFinancialPositionunder"Otherborrowings".
(**)Classifiedunder"Otherborrowings"Noncurrentliabilities.
.81
23. Disputes
CertainGroupcompanieshavelegaldisputespending,againstwhichtheirBoardshavesetasiderisk
provisions for amounts that are considered appropriate, taking into account the opinion of their
consultantsregardingthelikelihoodthatsignificantliabilitieswillactuallyoccur.
Inparticular,theRomeRegionalTaxCommissionfileditsjudgementno.64/9/12on18May2012,on
itsresumption,withregardtotheinvestigationsinto1991IRPEGandILOR;theseinvestigationsgave
risetothefollowingmainfindings;
theTaxAuthoritieschallengedthetaxbenefitsresultingfromthereorganisationoftheEditoriale
LEspressoGroupthatfollowedthebreakupoftheMondadoriGroup(inparticular,thebenefits
arisingfromthemergerofEditorialeLaRepubblicaS.p.A.withCartieradiAscoliS.p.A.,whichthen
adopteditsname);
they also challenged the benefits relating to transactions involving beneficial interests in shares
with foreign entities, especially those relating to the tax credit on dividends and related
withholdingtaxes,aswellastheaccruedinterest.
As regards the beneficial interest in shares, the Group has been making provisions since 2008,
considering that, according to the evolution of the related jurisprudence, the additional taxes
assessedandrelatedinterestchargedweretobeconsidereda"probablerisk"(theprovisionsdidnot
only involve 1991, but also the next three tax years, for which the Tax Authorities challenged the
sametypesofbenefits),unlikethepenaltiesforwhichtheriskwasconsidered"possible".
Onthefirstmatter,whichonlyconcerns1991,theriskhasalwaysbeenconsidered"remote",inlight
ofthetechnicalevaluationofitemsindisputeandtheoutcomeofthevariouslevelsofjustice.Bear
inmindthat:
the facts were first being evaluated by the criminal court for alleged tax fraud and the
proceedings were concluded with a judgement of nonsuit by the GUP (the magistrate who
presidesoverthepreliminaryhearing).ThiswasdefinitivelyconfirmedbytheCourtofAppealon
9December1999,fullyacquittingallofthedirectorsandstatutoryauditors;
thetaxassessmentsoffirstandsecondinstancewerebothfavourabletotheGroup,in1998and
2000respectively;subsequently,in2007theSupremeCourtcancelledthejudgementofsecond
instance, referring it to the Regional Tax Commission, though it only decided on procedural
matterswithoutaffectingthemeritsofthecaseinanyway.
With this judgement, the Regional Tax Commission upheld the position of the Tax Authorities in
relationtothemostimportantitemindisputefromaneconomicpointofview,whichconcernedthe
corporate restructuring, whereas it dismissed the question concerning beneficial interests. Re
evaluatingthesituationasof30June2016,thisjudgementindicatesamaximumamountatriskof
374.3million(ofwhichadditionaltaxesassessedof121.4million,interestof131.4millionand
penaltiesof121.4million):thisvaluecomesfromthefactthattheTaxAuthoritiesdidnotjustdeny
the tax benefits (deemed not due) based on the higher values recorded on allocation of the
"cancellationdeficit"aspartofthemergerprocess,butunexpectedlydemandedtheimmediate
andfullliabilitytotaxationofthisdeficitasbeingdevoidofanyincomevalue,treatingitasthoughit
wereacapitalgainthathadbeen"realized".
.82
On 27 June 2012 the Company filed an appeal against the judgement of second degree with the
Supreme Court and on 28 June 2012 it applied to the Rome Regional Tax Commission for a
suspensionoftheeffectsofthejudgementpursuanttoarticle373oftheCodeofCivilProcedure;the
applicationhasbeenacceptedbytheRomeRegionalTaxCommissionbyorderfiledon19July2012.
Being well aware of the fiscal and statutory legitimacy of the transactions being challenged by the
TaxAuthorities,alsoonthebasisoftechnicalevaluationsobtainedfromindependentprofessionals,
theGrouphasconfirmeditsassessmentas"probable"ofthedegreeofriskinvolvedinthetreatment
of beneficial interests in shares (even though successful on this point before the Regional Tax
Commission). As a result of the recent and established positions of the Supreme Court, the same
level of risk was extended to the penalties, while the risk in relation to corporate restructuring
operations,wheretheGrouphasbeenunsuccessful,isconsideredtobemerely"possible".
In this regard, it should be noted that, during 2015, Legislative Decree 128 was issued, which, in
additiontohavingrepealedthepreviousantiavoidancerule,madechangestothetaxpayer'sstatute
(Law212/2000)providinggreaterclaritytothetaxsystembyintroducingasingledefinitionofabuse
ofrightsandtaxavoidance.
Formattersrelatingtothebeneficialinterestsinshares,upto31December2012theGrouphadset
asideanamountof34.2million(tocovertherisksrelatedtotheamortisationofthecostincurred
for the purchase of the beneficial interest, the tax credit on the dividends, the withholding taxes
incurred,therelatedaccruedinterestandpenalties),withreferencetoalltaxperiodsassessed.At30
June2016,inpartfollowingtherecognitionof173thousandtotakeaccountofaccruedinterest,
therelatedprovisiontotals35,286thousand.
TheSogefiGroupismonitoringenvironmentalmattersatcertainproductionlocationsforwhichno
significantcostsareexpected.
SogefiFiltrationLtdacquiredtheassetsandliabilitiesofFiltrautoUKLtdin2004,thereforebecoming
the employer for the purposes of the Filtrauto UK Limited Staff Pension Scheme and Filtrauto UK
LimitedWorksPensionScheme.Theseschemesaredefinedbenefitplans.
Between 1990 and 2006 the employer and the trustees of the above pension schemes obtain
professionaladvicefromleadingfirmsregardingtheequalisationoftheconditionsoftheschemes,
asrequiredbyregulatorychanges.
Ithasemergedthatsuchequalisationmightnothavebeenappliedcorrectly.
SogefiFiltrationLtdhasthereforepresentedaprotectiveclaimtotheBirminghamHighCourt.
The Court might conclude that the equalisation has been applied properly, or that it is possible to
make an adjustment, perhaps resulting in a contingent liability. In this last case, the evidence is
consideredtosupporttheprobabilitythatanyliabilitywillbealmostentirelyrecoverablefromthe
advisors.
Aninitialapproximateassessmentofthemaximumpotentialliability,beforetheprobablerecovery
fromtheadvisors,isabout2million.
In January 2014 Sogefi S.p.A. received two notices of assessment from the tax authorities that
disallowedthetaxdeductibilityforIRESpurposesandtherelateddeductibilityforVATpurposesof
thecostofservicesprovidedbyCIRS.p.A.in2009,amountingto1.8million.
Takingaccountoftheopinionexpressedbyataxadvisor,thedirectorsconsidertheseassessmentsto
be unfounded and inconsistent with the applicable tax regulations. Accordingly, they consider the
riskoflosingthecasetobepossiblebutnotprobable.
For this reason, Sogefi S.p.A. has not recorded any related tax provisions in the interim financial
statementsat30June2016.
.83
NotethatthoseassessmentshavealreadybeendiscussedbytheProvincialTaxCommissionwitha
favourableoutcomefortheCompany.
TheTaxAuthoritieshaveappealedagainstthisresulttotheRegionalTaxCommission.
Duringthefirsthalfof2016,SogefiS.p.A.wassubjectedtoataxinspectioncoveringthe2011and
2012 tax years. The report issued following this inspection identified a number of matters
(concerning the VAT and direct tax deductibility of services provided by CIR S.p.A.), in relation to
whichthecompanyhasnotyetreceivedanyassessments.
In2005,SogefiS.p.A.requestedtheParisTaxCourttoruleonthereimbursementofthetaxcredit
(avoirfiscal),netofthe5%withholdingtax,dueonthedividendspaidbytheFrenchsubsidiariesin
2004,havingregardforthechangesmadetotheFrenchtaxregulations,whichabrogatedtherightto
receivethetaxcreditfromthe2005taxyear.ThisCourt,firstly,andtheParisadministrativeappeal
court, secondly, rejected the claims advanced by Sogefi S.p.A.; the Council of State (following an
appeal by the company), by contrast, overturned the above rulings and returned the case to the
AdministrativeCourt.
On2June2016,theParisadministrativeappealcourtnotifiedSogefiS.p.A.ofitsrulingthataccepts
the requests made by the company, recognising the reimbursement of 3,975 thousand plus
interest.
As the counterparties are entitled to appeal against the ruling within two months of the day
following the date of its notification, the recognition of the reimbursement as income has been
deferreduntiltheoutcomeofanyfurtherappealthatmaybefiledbytheFrenchtaxauthorities.
24. Disclosuresregardingsharebasedincentiveplans
24.a. Incentiveplansforemployeesat30June2016(CIR)
ThefollowingtableshowstheincentiveplansofthesubsidiaryCIR:
.84
CIRSTOCKOPTIONPLANSOUTSTANDINGAT30JUNE2016
Optionsincirculationatstart Optionsgrantedduringthe Optionsexercisedduringthe

ofperiod
period
period
Weighted
averagestrike No.ofoptions
price
No.ofoptions
Weighted
price
Weighted
averagestrike
price
Optionsexpiredduringthe
period
No.ofoptions
Optionsexercisableatendof
period
Optionsincirculationatendofperiod
Averagestrike
price
Weightedaverage
No.ofoptions
strikeprice
Averageduration
(years)
Weighted
averagestrike
price
No.ofoptions
StockOptionPlan6September2005
2,125,000
2.49
2,125,000
2.49
StockOptionPlan20061sttranche
2,175,000
2.50
2,175,000
2.50
0.50
2,175,000
2.50
StockOptionPlan20062ndtranche
2,175,000
2.47
2,175,000
2.47
1.00
2,175,000
2.47
ExtraordinaryStockOptionPlan1sttranche
3,050,000
3.0877
3,050,000
3.0877
1.25
3,050,000
3.0877
ExtraordinaryStockOptionPlan2ndtranche
3,050,000
2.7344
3,050,000
2.7344
1.75
3,050,000
2.7344
ExtraordinaryStockOptionPlan3rdtranche
3,110,000
1.6806
3,110,000
1.6806
2.25
3,110,000
1.6806
ExtraordinaryStockOptionPlan4thtranche
2,203,500
1.0718
2,203,500
1.0718
2.75
2,203,500
1.0718
1sttranche2009
1,947,800
0.9907
1,947,800
0.9907
3.25
1,947,800
0.9907
2ndtranche2009
3,136,000
1.5449
3,136,000
1.5449
3.67
3,136,000
1.5449
1sttranche2010
3,206,000
1.6208
3,206,000
1.6208
4.25
3,206,000
1.6208
2ndtranche2010
3,128,000
1.4982
3,128,000
1.4982
4.67
3,128,000
1.4982
29,306,300
1.9826
27,181,300
1.9430
2.63
27,181,300
1.9430
Total
2,125,000
2.49
CIRSTOCKGRANTPLANSAT30JUNE2016
Financialinstrumentsin
circulationatstartofperiod
No.ofUnits
Initialvalue
Financialinstruments
grantedduringtheperiod
Financialinstrumentsexpiredin Financialinstrumentsincirculationatendof
exercisedduringtheperiod
theperiod
period
No.ofUnits
No.ofUnits
Initialvalue
Weighted
averagestrike
price
Weightedaverage
strikeprice
No.ofUnits
No.ofUnits
Initialvalue
Averageduration
(years)
exercisableatendofperiod
No.ofUnits
Initialvalue
StockGrantPlan2011
166,625
1.6391
6,371
1.0560
11,125
1.6391
161,871
1.6391
4.83
161,871
1.6391
StockGrantPlan2012
3,373,145
1.0263
33,290
1.0560
133,723
1.0263
2,426,837
1.0263
845,875
1.0263
5.83
845,875
1.0263
StockGrantPlan2013
3,022,453
0.8003
3,022,453
0.8003
6.83
StockGrantPlan2014
1,761,574
1.1300
1,761,574
1.1300
8.01
StockGrantPlan2015
1,680,000
1.0916
1,680,000
1.0916
8.83
StockGrantPlans2015reservedtotheGeneralManager
1,000,000
1.0940
1,000,000
1.0940
8.83
1,750,000
1.0587
1,750,000
1.0587
9.84
1,789,661
1.0586
10,221,773
1.0099
7.96
StockGrantPlan2016
Total
11,003,797
1.0062
144,848
.85
1.0734
2,426,837
1.0263
1,007,746
1.1247
24.b. Incentiveplansforemployeesat30June2016(EspressoGroup)
ThechartbelowshowsthestockoptionplansoftheEspressoGroup:
.86
EDITORIALEL'ESPRESSOGROUPSTOCKOPTIONPLANSFOREMPLOYEESAT30JUNE2016
Optionsincirculationatstartof
period
No.ofoptions
Weighted
averagestrike
price
Optionsgrantedduringthe
period
Optionscancelled/expired
duringtheperiod
No.of
options
No.of
options
Weightedaverage
strikeprice
Weighted
averagestrike
price
Optionsexercisedduringthe
period
Weighted
averagestrike
price
No.of
options
period
No.of
options
Weighted
averagestrike
price
Average
duration
(years)
No.of
options
Weighted
averagestrike
price
Stockoptionplan20061sttranche
850,000
4.33
45,000
4.33
805,000
4.33
0.50
805,000
4.33
Stockoptionplan20062ndtranche
850,000
3.96
45,000
3.96
805,000
3.96
1.00
805,000
3.96
Extraordinarystockoptionplan20091sttranche
1,267,500
3.84
52,500
3.84
1,215,000
3.84
1.25
1,215,000
3.84
Extraordinarystockoptionplan20092ndtranche
1,267,500
3.60
52,500
3.60
1,215,000
3.60
1.75
1,215,000
3.60
Extraordinarystockoptionplan20093rdtranche
1,515,000
2.22
87,500
2.22
1,427,500
2.22
2.25
1,427,500
2.22
Extraordinarystockoptionplan20094thtranche
820,950
1.37
62,750
1.37
758,200
1.37
2.75
758,200
1.37
Ordinarystockoptionplan20091sttranche
485,150
1.00
9,600
1.00
475,550
1.00
3.25
475,550
1.00
Ordinarystockoptionplan20092ndtranche
2,152,200
1.86
96,200
1.86
2,056,000
1.86
3.75
2,056,000
1.86
Ordinarystockoptionplan20101sttranche
2,417,500
2.25
150,000
2.25
2,267,500
2.25
4.25
2,267,500
2.25
Ordinarystockoptionplan20102ndtranche
2,085,400
1.58
124,500
1.58
1,960,900
1.58
4.75
1,960,900
1.58
13,711,200
2.49
725,550
2.43
12,985,650
2.50
2.95
12,985,650
2.50
Total
.87
EDITORIALEL'ESPRESSOGROUPSTOCKGRANTPLANSFOREMPLOYEESAT30JUNE2016
Unitsincirculationatstartof
period
No.ofUnits
2011
Timebasedunits
Unitsgrantedduringtheperiod
Unitscancelled/expired
duringtheperiod
Weighted
Weightedaverage
averagestrike No.ofUnits
No.ofUnits
strikeprice
price
Unitsexercisedduringthe
period
Weighted
price
Unitsincirculationatendof
period
Weighted
price
Unitsexercisableatendof
period
Weighted
price
Weighted
average
strikeprice
156,721
1.81
6,248
1.81
150,473
1.81
150,473
1.81
Timebasedunits
452,335
0.98
74,679
0.98
377,656
0.98
377,656
0.98
Performancebasedunits
494,367
0.98
325,750
0.98
16,565
0.98
152,052
0.98
152,052
0.98
Timebasedunits
625,620
0.83
66,248
0.83
96,565
0.83
462,807
0.83
250,972
0.83
625,620
0.83
66,248
0.83
96,565
0.83
462,807
0.83
250,972
0.83
Timebasedunits
725,000
1.70
94,062
1.70
17,500
1.70
613,438
1.70
73,131
1.70
725,000
1.70
94,062
1.70
630,938
1.70
Timebasedunits
710,000
1.24
57,500
1.24
652,500
1.24
710,000
1.24
57,500
1.24
652,500
1.24
Timebasedunits
657,500
0.95
0.00
657,500
0.95
657,500
0.95
0.00
657,500
0.95
2012
2013
2014
2015
2016
.88
24.c. Incentiveplansforemployeesat30June2016(SogefiGroup)
Thefollowingtableshowsthetotalnumberofoptionsoutstandingwithrespecttothestockgrant
plansfortheperiod20112016:
Notexercised/notexercisableatthestartofthe
year
Grantedintheyear
30.06.2016
31.12.2015
1,877,872
2,024,255
500,095
441,004
Cancelledintheyear
(670,380)
(409,398)
Exercisedduringtheyear
Notexercised/notexercisableattheendofthe
year
Exercisableattheendoftheyear
(334,871)
(177,989)
1,372,716
1,877,871
144,261
391,558
the following table shows the total number of options outstanding and refers to the plans of the
period20062010withtheiraveragestrikeprice:
30June2016
No.ofoptions
Notexercised/notexercisableatthestartoftheyear
Grantedintheperiod
Cancelledintheperiod
4,190,737
Average
strikeprice
3.16
(110,000)
2.30
Exercisedintheperiod
(100,000)
1.04
Notexercised/notexercisableattheendoftheperiod
3,980,737
3.24
Exercisableattheendoftheperiod
3,980,737
3.24
Theline"Notexercised/notexercisableattheendoftheperiod"referstothetotalamountofthe
optionsnetofthoseexercisedorcancelledduringthecurrentorprioryears.
Theline"Exercisableattheendoftheperiod"referstothetotalamountoftheoptionsvestedatthe
endoftheyearbutnotyetexercised.
Thefollowingtablegivesabreakdownofthenumberofphantomstockoptionsat30June2016:
30June2016
840,000
Notexercised/notexercisableatthestartoftheyear
Grantedintheperiod
Cancelledintheperiod
Exercisedintheperiod
Notexercised/notexercisableattheendoftheperiod
840,000
Exercisableattheendoftheperiod
840,000
.89
24.d. Incentiveplansforemployeesat30June2016(KOSGroup)
ThefollowingtableshowsthestockoptionplansoftheKOSGroup:
.90
KOSSTOCKOPTIONPLANSAT30JUNE2016
Optionsincirculationatstartof Optionsgrantedduringthe Optionsexercisedduringthe Optionsexpiredduringthe

period
period
period
period
No.ofoptions
Weighted
No.of
Weighted
No.ofoptions Weighted No.ofoptions Weighted
averagestrike
options
averagestrike
average
average
price
price
strikeprice
strikeprice
Expirydate
period
No.of
Weighted
Vestingdate Expirydate
options
averagestrike
(100%)
price
Number
No.ofoptions
Average
duration
(years)
StockOptionPlan2007
420,000
3.40
420,000
3.40
StockOptionPlan2010
4,070,000
3.75
2,408,917
3.75
1,661,083
3.75
635,000
3.75
635,000
3.75
StockWarrantsPlan2010
StockOptionPlan16
1,500,000
7.28
1,500,000
7.08
16.9
17/05/2023
17/05/2033
StockPlan'10rev
1,661,063
3.75
1,661,063
3.52
16.9
1,661,063
3.52
31/12/2014
17/05/2033
3,161,063
5.42
2,828,917
3.70
2,296,083
3.75
3,161,063
5.21
16.9
1,661,063
3.52
Total
5,125,000
3.72
.91
25. Subsequentevents
Regarding subsequent events, please refer to the appropriate paragraph of the interim report on
operations.Notethattheinterimreport,ofwhichtheinterimfinancialstatementsat30June2016is
anintegralpart,wasapprovedbytheBoardofDirectorson29July2016.
26. Significantnonrecurringeventsandatypicaland/orunusual
transactions
Nononrecurringitemshavebeenincludedintheoperatingresultfortheperiod.
Norhaveanyatypicaland/orunusualtransactionstakenplace.
27. Relatedpartytransactions
Information regarding the impact that related party transactions have on the financial and equity
situationandontheresultfortheperiodareprovidedinthecommentontheindividualitemsofthe
financialstatements.
The section "Other information" in the interim report on operations shows the various types of
transactionswithrelatedparties,whereastheamountsinvolvedareshowninthenotes.
Thefollowingchartgivesasummaryoftransactionswithrelatedparties:
.92
CONSOLIDATEDINCOMESTATEMENTrelatedpartytransactions
Salesrevenues
Costsforthe
purchaseof
Costsfor
services
Otheroperating
expense
Parentcompanies
Subsidiaries
Associates
Jointventures
Otherrelatedparties
(2,703)
784
50
18
1
Total
(2,703)
834
19
Otheroperating Financialincome Financialexpense

income
CONSOLIDATEDSTATEMENTOFFINANCIALPOSITIONRelatedpartytransactions
Parentcompanies
Subsidiaries
Associates
Jointventures
Otherrelatedparties
Total
Noncurrent
Noncurrent
Currentassets
Currentliabilities
liabilities
assets
Otherreceivables Tradereceivables
Other Otherborrowings Otherborrowings
Tradepayables
receivables
465
9
2,693
1,395
104
2,058
2,693
1,395
569
.93
2,067
Otherpayables
Dividends
SUMMARYOFKEYFIGURESFROMTHELATESTFINANCIALSTATEMENTSOFTHE
COMPANYTHATEXERCISESMANAGEMENTANDCOORDINATION
ThekeyfiguresfromthefinancialstatementsofF.lliDeBenedettiS.p.A.at31December2015areas
follows:
(ineuro)
STATEMENTOFFINANCIALPOSITION
ASSETS
B)
Fixedassets
C)
Currentassets
Totalassets
LIABILITIES
A)
EQUITY
Sharecapital
Reserves
12,840,460
Netincome(loss)fortheyear
(2,187,310)
D)
PAYABLES
63,958,690
Totalliabilities
INCOMESTATEMENT
B)
Costsofproduction
C)
Financialincomeand(expense)
D)
Extraordinaryincomeand(expense)
Incometaxesfortheyear
Netincome(loss)fortheyear
245,309,618
122,222
245,431,840
170,820,000
245,431,840
(310,614)
(1,876,720)
24

(2,187,310)
.94
CERTIFICATION OF THE SEMI-ANNUAL INTERIM FINANCIAL REPORT AS OF 30 JUNE 2016

IN ACCORDANCE WITH ART. 154 BIS OF D. LGS 58/98
1.
The undersigned, Rodolfo De Benedetti, as Chairman and Giuseppe Gianoglio as executive responsible
for the preparation of the financial statements of Cofide S.p.A., hereby certify, also taking into account
the provision of Art. 154-bis, paragraphs 3 and 4, of Legislative Decree no. 58 of 24 February1998:
-
the appropriateness, in relation to the characteristics of the business, and

effective application of the administrative and accounting procedures for the preparation of the
Semi-annual Interim Financial Report as of 30 June 2016, during the course of period 1 January
2016 30 June 2016.
2. On this subject no aspects emerged that needed to be notified.

3. We also certify that the consolidated financial statements as of 30 June 2016:
-
are prepared in accordance with International Financial Reporting Standards as endorsed by the
European Community pursuant to Regulation (EC) No. 1606/2002 of the European Parliament and
of the Council of 19 July 2002;
agree with the balances on the books of account and accounting entries;
are able to give a true and fair view of the financial position, results and cash flows of the issuer.
The Semi-annual report on operation as of 30 June 2016 includes a reliable analysis of the Company's
performance and results of operations, as well as the general situation of the issuer, together with a
description of the principal risks and uncertainties to which it is exposed.
Milan, 29 July 2016

Signed by:
Rodolfo De Benedetti
Chairman
Giuseppe Gianoglio
Executive responsible for the preparation
of the company's financial statements
.95
.96
COFIDE GROUP
SEPARATE FINANCIAL STATEMENTS AS OF 30 JUNE 2016
STATEMENT OF FINANCIAL POSITION

INCOME STATEMENT
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF CASH FLOWS
STATEMENT OF CHANGES IN EQUITY
.97
1.Statementoffinancialposition
(inthousands of euro)
ASSETS
NONCURRENTASSETS
TANGIBLEASSETS
INVESTMENTPROPERTY
INVESTMENTSINSUBSIDIARIES
OTHEREQUITYINVESTMENTS
OTHERRECEIVABLES
SECURITIES
CURRENTASSETS
OTHERRECEIVABLES
31.12.2015
589,636
352
852
573,822
118
14,492
596,842
372
852
573,822
118
21,678
13,078
477
12,301
202
295
ofwhichtorelatedparties
SECURITIES
CASHANDCASHEQUIVALENTS
TOTALASSETS
LIABILITIESANDEQUITY
EQUITY
SHARECAPITAL
RESERVES
RETAINEDEARNINGS(LOSSES)
NETINCOME(LOSS)FORTHEYEAR
NONCURRENTLIABILITIES
OTHERBORROWINGS
OTHERPAYABLES
DEFERREDTAXES
PERSONNELPROVISIONS
CURRENTLIABILITIES
BANKOVERDRAFTS
OTHERBORROWINGS
TRADEPAYABLES
OTHERPAYABLES
95
10,594
2,007
10,006
2,093
602,714
609,143
30.06.2016
31.12.2015
560,973
359,605
162,106
19,805
19,457
556,605
359,605
167,126
33,470
(3,596)
39,234
39,137
35
62
50,367
49,834
35
354
144
2,507
896
2,171
755
134
TOTALLIABILITIESANDEQUITY
(*)
30.06.2016
.98
1,611
1,416
602,714
609,143
2.Incomestatement
1sthalf2016
SUNDRYREVENUESANDINCOME
1sthalf2015
246
ofwhich: sundryrevenuesandincomewithrelatedparties
183
COSTSFORTHEPURCHASEOFGOODS
COSTSFORSERVICES
ofwhich: fromrelatedparties
132
(7)
(13)
(649)
(637)
(134)
PERSONNELCOSTS
158
(35)
(46)
(90)
(296)
(240)
(20)
(22)
(772)
(844)
FINANCIALINCOME
40
FINANCIALEXPENSE
(620)
(998)
16,006
OTHEROPERATINGEXPENSE
EBIT
DIVIDENDS
ofwhich: dividendsfromrelatedparties
16,006
GAINSFROMTRADINGSECURITIES
LOSSESFROMTRADINGSECURITIES
INCOME/(LOSS)BEFORETAXES
INCOMETAXES
NETINCOME(LOSS)OFTHEPERIOD
.99
4,544
179
588
3,530
19,747
1,907
(290)
(165)
19,457
1,742
3.Statementofcomprehensiveincome
1 st half2016
1 st half2015
19,457
1,742
(5,312)
(30)
292
Itemsofothercomprehensiveincomefortheperiod,netoftax
(5,020)
(28)
TOTALSTATEMENTOFCOMPREHENSIVEINCOMEOFTHEPERIOD
14,437
1,714
Netincomeoftheperiod
Othercomponentsofcomprehensiveincome:
Netchangeinfairvalueofavailableforsalefinancialassets
Taxesonothercomprehensiveincome
.100
4.
Statement of cash flows
1sthalf2016
1sthalf2015
19,457
1,742
20
22
(144)
(53)
(588)
(3,530)
61
370
18,806
(1,444)
NETCHANGEINNONCURRENTSECURITIES
1,874
5,466
CASHFLOWFROMINVESTMENTACTIVITY
1,874
5,474
(10,697)
(852)
435
DIVIDENDSPAID
(10,069)
CASHFLOWFROMFINANCINGACTIVITY
(20,766)
(417)
(86)
3,613
NETCASHANDCASHEQUIVALENTSOPENINGBALANCE
2,093
1,701
NETCASHANDCASHEQUIVALENTSCLOSINGBALANCE
2,007
5,314
OPERATINGACTIVITY
NETINCOME/(LOSS)FORTHEYEAR
ADJUSTMENTS:
AMORTISATION/DEPRECIATION
ALLOCATIONTOPERSONNELPROVISIONS,NETOFUSE
LOSSES/(GAINS)ONSALEOFCURRENTSECURITIES
(INCREASE)DECREASEINNETWORKINGCAPITAL
CASHFLOWFROMOPERATINGACTIVITY
INVESTINGACTIVITY
CHANGEINTANGIBLEASSETS
FINANCINGACTIVITY
CHANGEINOTHERBORROWINGS
NETCHANGEINCURRENTSECURITIES
INCREASE(DECREASE)INNETCASH&CASHEQUIVALENTS
.101
5.Statementofchangesinequity
Sharecapital
(inthousandofeuro)
BALANCEAT1stJENUARY2015
Allocationof2014resulttoreserves
Adjustmentofsecuritiestofairvalue:
Changeinreserve
deferredtaxesonreservechanges
Totalcomprehensiveresultfor2015
BALANCEAT31DECEMBER2015
Allocationof2015resulttoreserves
DistributiontoShareholders
Adjustmentofsecuritiestofairvalue:
changeinreserve
deferredtaxesonreservechanges
Totalcomprehensiveresultofthefirsthalfof2016
BALANCEAT30JUNE2016
Attributabletoshareholdersoftheparentcompany
Reserves
Retainedearnings
Netincome(losses)
(losses)
fortheperiod
Total
359,605
166,005
36,431
(2,961)
(2,961)
2,961
559,080
1,198
(77)
1,198
(77)
(3,596)
(3,596)
359,605
167,126
33,470
(3,596)
(10,069)
(3,596)
3,569
556,605
(10,069)
(5,312)
292
(5,312)
292
19,457
19,457
359,605
162,106
19,805
19,457
560,973
.102
LISTOFEQUITYINVESTMENTS
ASOF30JUNE2016
PersuanttoArt.38.2ItalianLegislativeDecree127/91
.103

SUBSIDIARIESCONSOLIDATEDUSINGTHEFULLLINEBYLINEMETHOD
(in euro or foreign currency)
Name of Company
Registered
office
Share
capital
Currency
Parent
Company
% of
ownership
COFIDE GROUP
CIR S.p.A. (*)
Italy
397.146.183,50
COFIDE S.p.A.
45.80
CIR GROUP
CIR INTERNATIONAL S.A.
Luxembourg
CIRINVEST S.r.l.
Italy
15,000,000.00
CIR S.p.A.
100.00
119,764.00
CIR S.p.A.
CIGA LUXEMBOURG S..r.l.
Luxembourg
100.00
1,000,000.00
CIR S.p.A.
NEXENTI ADVISORY S.r.l.
100.00
Italy
100,000.00
CIR S.p.A.
100.00
NEXENTI S.r.l.
Italy
50,000.00
CIR S.p.A.
100.00
JUPITER MARKETPLACE S.r.l.
Italy
100,000.00
NEXENTI S.r.l.
100.00
CIR INVESTIMENTI S.p.A.
Italy
12,426,162.00
CIR S.p.A.
100.00
INSTITUT DCOLE PRIMAIRE LMAN S.A.
Switzerland
3,695,000.00
Chf CIR S.p.A.
94.59
50,000.00
CIR S.p.A.
71.43
(In liquidazione)
SOUTHLANDS S.r.l.
Italy
INSTITUT DCOLE PRIMAIRE LMAN S.A.
28.57
100.00
ESPRESSO GROUP
GRUPPO EDITORIALE LESPRESSO S.p.A. (**)
Italy
61,805,893.20
FINEGIL EDITORIALE S.p.A.
Italy
128,798,515.00
S.E.T.A. S.p.A.
Italy
774,750.00
A. MANZONI & C. S.p.A.
Italy
15,000,000.00
GRUPPO EDITORIALE LESPRESSO S.p.A.
100.00
ROTOCOLOR S.p.A.
Italy
23,000,000.00
100.00
SOMEDIA S.p.A.
Italy
677,608.00
100.00
ELEMEDIA S.p.A.
Italy
25,000,000.00
100.00
MO-NET S.r.l.
Italy
35,800.00
CIR S.p.A.
53.58
99.78
71.00
ELEMEDIA S.p.A.
83.00
SOGEFI GROUP
SOGEFI S.p.A. (***)
Italy
61,630,948.60
CIR S.p.A.
55.98
SOGEFI REJINA S.p.A.
Italy
21,978,316.00
SOGEFI S.p.A.
99.88
SOGEFI FILTRATION FRANCE S.A. (gi FILTRAUTO S.A.)
France
5,750,000.00
SOGEFI S.p.A.
100.00
SOGEFI FILTRATION Ltd
UK
5,126,737.00
GBP SOGEFI S.p.A.
100.00
SOGEFI FILTRATION S.A.
Spain
14,249,084.96
SOGEFI S.p.A.
86.08
SOGEFI FILTRATION FRANCE S.A.
13.92
100.00
SOGEFI FILTRATION d.o.o.
Slovenia
10,291,798.00
SOGEFI S.p.A.
100.00
SOGEFI SUSPENSIONS FRANCE S.A.
France
34,000,000.00
SOGEFI S.p.A.
99.99
France
100,000.00
SOGEFI S.p.A.
100.00
(gi ALLEVARD REJNA AUTOSUSPENSIONS S.A.)
SOGEFI GESTION S.A.S.

(gi SOGEFI PURCHASING S.A.S.)
ALLEVARD SOGEFI U.S.A. Inc.
United States
20,055,000.00
$USA SOGEFI S.p.A.
100.00
SOGEFI AIR &REFROIDISSEMENT FRANCE S.A.S.
France
54,938,125.00
SOGEFI S.p.A.
100.00
Brazil
51,507,374.00
(gi SYSTMES MOTEURS S.A.S.)
SOGEFI FILTRATION DO BRASIL Ltda
Real SOGEFI FILTRATION S.A.

ALLEVARD MOLAS DO BRAZIL Ltda
99.99
0.01
100.00
SOGEFI FILTRATION ARGENTINA S.A.
Argentina
57,235,407.00
Pesos SOGEFI FILTRATION DO BRASIL Ltda

SOGEFI FILTRATION FRANCE S.A.
SOGEFI REJNA S.p.A.
94.25
5.17
0.57
99.99
SHANGHAI SOGEFI AUTO PARTS Co., Ltd
China
13,000,000.00
$USA SOGEFI S.p.A.
100.00
SOGEFI (SUZHOU) AUTO PARTS CO., Ltd
China
37,400,000.00
$USA SOGEFI S.p.A.
100.00
(*) 54.44 % net of own shares held as treasury stock
.104

Name of Company
Registered
office
Share
capital
Currency
Parent
Company
% of
ownership
ALLEVARD SPRINGS Ltd
UK
4,000,002.00
GBP SOGEFI SUSPENSIONS FRANCE S.A.
100.00
ALLEVARD FEDERN GmbH
Germany
50,000.00
100.00
ALLEVARD REJNA ARGENTINA S.A.
Argentina
48,858,410.00
Pesos SOGEFI SUSPENSIONS FRANCE S.A.
90.19
9.80
99.99
IBERICA DE SUSPENSIONES S.L. (ISSA)
Spain
10,529,668.00
50.00
Brazil
37,161,683.00
Real SOGEFI SUSPENSIONS FRANCE S.A.
99.99
0.01
ALLEVARD SPRINGS Co. Ltd
100.00
UNITED SPRINGS Ltd
UK
4,500,000.00
GBP SOGEFI SUSPENSIONS FRANCE S.A.
UNITED SPRINGS B.V.
Netherlands
100.00
254,979.00
SHANGHAI ALLEVARD SPRING Co. Ltd
100.00
China
5,335,308.00
60.58
UNITED SPRINGS S.A.S.
France
5,109,000.00
100.00
LUHN & PULVERMACHER DITTMANN
Germany
ALLEVARD FEDERN GmbH
100.00
50,000.00
& NEUHAUS GmbH

S.ARA COMPOSITE S.A.S.
France
11,500,000.00
95.65
SOGEFI M.N.R. ENGINE SYSTEMS INDIA Pvt Ltd
India
21,254,640.00
Inr SOGEFI SUSPENSIONS FRANCE S.A.
45.00

SYSTEMES MOTEURS CHINA S..r.l.
24.98
0.02
70.00
ALLEVARD IAI SUSPENSIONS Pvt. Ltd
India
SOGEFI AIR & COOLING CANADA CORP.
Canada
340,000,000.00
Inr SOGEFI SUSPENSIONS FRANCE S.A.
74.23
39,393,000.00
Cad SOGEFI AIR &REFROIDISSEMENT FRANCE S.A.S.
100.00
100.00
$USA SOGEFI AIR &REFROIDISSEMENT FRANCE S.A.S.
100.00
100.00
(gi SOGEFI ENGINE SYSTEMS CANADA CORP.)
SOGEFI AIR & COOLING USA Inc.
United States
(gi SOGEFI ENGINE SYSTEMS USA Inc.)
SYSTMES MOTEURS CHINA S..r.l.
Luxembourg
SOGEFI ENGINE SYSTEMS MEXICO S.DE R.L.DE C.V.
Mexico
12,500.00
3,000.00
Mxn SOGEFI AIR & COOLING CANADA CORP.

99.97
0.03
100.00
S.C. SOGEFI AIR & COOLING

(gi S.C. SYSTMES MOTEURS S.r.l.)
Romania
7,087,610.00
Ron SOGEFI AIR &REFROIDISSEMENT FRANCE S.A.S.

SOGEFI FILTRATION S.A.
99.99
0.01
100.00
SOGEFI ENGINE SYSTEMS HONG KONG Ltd
Hong Kong
1,000.00
(**) 56.51 % net of own shares held as treasury stock

(***) 57.39 % net of own shares held as treasury stock
.105
Hkd SYSTMES MOTEURS CHINA S..r.l.
100.00

Name of Company
Registered
office
Share
capital
Currency
Parent
Company
% of
ownership
KOS GROUP
KOS S.p.A.
Italy
8,848,103.70
CIR S.p.A.
62.73
OSPEDALE DI SUZZARA S.p.A.
Italy
120,000.00
KOS S.p.A
99.90
MEDIPASS S.r.l.
Italy
700,000.00
KOS S.p.A
100.00
ELSIDA S.r.l.
Italy
100,000.00
MEDIPASS S.r.l.
100.00
MEDIPASS HEALTHCARE LTD
UK
3,477.00
GBP MEDIPASS S.r.l.
89.99
CLEARMEDI HEALTHCARE LTD
India
Inr MEDIPASS S.r.l.
70.88
9,904,111.18
CLEARVIEW HEALTHCARE LTD
29.12
100.00
MEDIPASS HEALTHCARE LEEDS & BELFAST LTD
UK
1,000.00
GBP MEDIPASS HEALTHCARE LTD
MEDIPASS LEEDS LTD (gi HTI LEEDS)
UK
2.00
GBP MEDIPASS HEALTHCARE LEEDS &BELFAST LTD
100.00
MEDIPASS BELFAST LTD (gi HTI IRELAND)
UK
2.00
GBP MEDIPASS HEALTHCARE LEEDS &BELFAST LTD
100.00
RESIDENZE ANNI AZZURRI S.r.l.
Italy
27,079,034.00
POLO GERIATRICO RIABILITATIVO S.p.A.
Italy
320,000.00
CLEARVIEW HEALTHCARE LTD
Italy
4,661,880.00
HSS REAL ESTATE S.r.l.
Italy
2,064,000.00
KOS S.p.A
100.00
ISTITUTO DI RIABILITAZIONE S. STEFANO S.r.l.
Italy
2,550,000.00
KOS S.p.A
100.00
ABITARE IL TEMPO S.r.l.
Italy
100,826.00
54.00
SANATRIX S.r.l.
Italy
843,700.00
76.97
SANATRIX GESTIONI S.r.l.
Italy
300,000.00
SANATRIX S.r.l.
99.61
JESILAB S.r.l.
Italy
80,000.00
100.00
FIDIA S.r.l.
Italy
10,200.00
60.00
KOS SERVIZI SOCIET CONSORTILE a r.l.
Italy
115,000.00
KOS S.p.A
Inr MEDIPASS S.r.l.
KOS S.p.A
55.00
100.00
96.00
85.19
3.68
46.12
36.93
MEDIPASS S.r.l.
2.07
OSPEDALE DI SUZZARA S.p.A.
2.15
SANATRIX GESTIONI S.r.l.
3.02
4.94
FIDIA S.r.l.
0.43
JESILAB S.r.l.
0.43
ELSIDA S.r.l.
0.23
100.00
.106
INVESTMENTSINJOINTVENTURESANDASSOCIATES
CONSOLIDATED USING THE EQUITY METHOD
Name of Company
Registered
office
Share
capital
Currency
Parent
Company
% of
ownership
CIR GROUP
DEVIL PEAK S.r.l.
69,659.00
ESPRESSO GROUP
Italy
Italy
Italy
NEXENTI S.r.l.
36.16
LE SCIENZE S.p.A.
Italy
103,400.00
50.00
HUFFINGTONPOST ITALIA S.r.l.
Italy
250,000.00
49.00
EDITORIALE CORRIERE ROMAGNA S.r.l.
Italy
1,756,766.00
49.00
EDITORIALE LIBERT S.p.A.
Italy
1,000,000.00
35.00
ALTRIMEDIA S.p.A.
Italy
517,000.00
35.00
PERSIDERA S.p.A.
Italy
21,428,572.00
30.00
China
10,000,000.00
Rmb SOGEFI ENGINE SYSTEMS HONG KONG Ltd
50.00
SOGEFI GROUP
MARK IV ASSET (Shanghai) AUTO PARTS Co. Ltd
CIR INTERNATIONAL GROUP
KTP GLOBAL FINANCE S.C.A.
Luxembourg
566,573.75
47.55
KOS GROUP
APOKOS REHAB PVT Ltd
India
115,000,000.00
.107
Inr KOS S.p.A.
50.00
INVESTMENTSINJOINTVENTURESANDASSOCIATES
CONSOLIDATED AT COST(*)

Name of Company
Registered
office
Share
capital
Currency
Parent
Company
% of
ownership
GRUPPO ESPRESSO
ENOTRYA S.r.l. (in liquidazione)
Italy
75,000.00
ELEMEDIA S.p.A.
70.00
CELLULARMANIA.COM S.r.l. (in liquidazione)
Italy
10,400.00
ELEMEDIA S.p.A.
100.00
KSOLUTIONS S.r.l. (in liquidazione)
Italy
100,000.00
ELEMEDIA S.p.A.
100.00
CLUB D.A.B. ITALIA CONSORTILE S.p.A.
Italy
240,000.00
ELEMEDIA S.p.A.
37.50
GOLD 5 S.r.l.
Italy
250,000.00
20.00
Italy
750,000.00
25.50
GRUPPO KOS
OSIMO SALUTE S.p.A.
GRUPPO CIR INTERNATIONAL

PHA Participations Hotelieres Astor
(In liquidazione)
France
12,150.00
100.00
KTP GLOBAL FINANCE MANAGEMENT S.A.
Luxembourg
31,000.00
46.00
(*) investments which are not significant, non-operational, or that have been recently acquired, unless stated otherwise.
.108
INVESTMENTSINOTHERCOMPANIES
CONSOLIDATED AT COST

Name of Company
Registered
office
Share
capital
Italy
10,783,361.63
Currency
Parent
Company
% of
ownership
ESPRESSO GROUP
AGENZIA A.N.S.A. S. COOP. a.r.l.

S.E.T.A. S.p.A.
CONSULEDIT S. CONSORTILE a.r.l.

(in liquidazione)
Italy
20,000.00

S.E.T.A. S.p.A.
IMMOBILIARE EDITORI GIORNALI S.r.l.
Italy
830,462.00
S.E.T.A. S.p.A.
TRENTO PRESS SERVICE S.r.l.
Italy
AGENZIA INFORMATIVA ADRIATICA d.o.o.
Slovenia
AUDIRADIO S.r.l. (in liquidazione)
Italy
PRESTO TECHNOLOGIES Inc. (non operativa)
United States
D-SHARE S.r.l.
260,000.00
12,768.00
258,000.00
3.68
13.24
2.94
19.85
6.64
5.48
0.49
12.61
0.17
0.12
0.29
S.E.T.A. S.p.A.
14.40
19.00
7.50
7,663,998.40
$USA ELEMEDIA S.p.A.
7.83
Italy
104,235.25
ELEMEDIA S.p.A.
9.43
TELELIBERT S.p.A.
Italy
2,200,000.00
4.32
PREMIUM PUBLISHER NETWORK
Italy
19,426.00
16.96
CONSORZIO
CONSORZIO EDICOLA ITALIANA
Italy
51,497.00
16.67
TAVOLO EDITORI RADIO S.r.l.
Italy
110,000.00
ELEMEDIA S.p.A.
12.50
UMC & MAKKAWI SPRING

MANUFACTURING Co., Ltd
Sudan
900,000.00
SDP SOGEFI REJNA S.p.A.
25.00
AFICO FILTERS S.A.E.
Egypt
14,000,000.00
EGP SOGEFI REJNA S.p.A.
17.77
Italy
45,600,000.00
SOGEFI GROUP
KOS GROUP
FONDO SPAZIO SANIT
IST. DI RIABILITAZIONE S. STEFANO S.r.l.
0.88
1.10
1.98
.109
INVESTMENTSINSUBSIDIARIES,ASSOCIATESANDINOTHERCOMPANIES
NON INCLUDING IN THE CONSOLIDATED STATEMENTS

Name of Company
Registered
office
Share
capital
Currency
Parent
Company
% of
ownership
CIR GROUP
FINAL S.A. (in liquidazione)
Francia
2,324,847.00
CIGA LUXEMBOURG S..r.l.
47.73
Lussemburgo
5,540,513.00
19.00
CIR INTERNATIONAL GROUP

FOOD CONCEPTS HOLDING SA (in liquidazione)
.110
REPORT OF THE INDIPENDENT AUDITORS
.111

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SEMI ANNUAL INTERIM FINANCIAL REPORT

KEY FIGURES .................................................................................................................................. 05

PERFORMANCE OF THE GROUP .................................................................................................... 08

PERFORMANCE OF THE PARENT COMPANY ................................................................................. 12

RECONCILATION OF THE PARENT COMPANYS FINANCIAL STATEMENTS WITH

PERFORMANCE OF THE SUBSIDIARIES........................................................................................... 15

SIGNIFICANT EVENTS SUBSEQUENT TO 30 JUNE 2016 .................................................................. 20

OUTLOOK FOR OPERATIONS ......................................................................................................... 20

PRINCIPAL RISKS AND UNCERTAINTIES OF THE GROUP ................................................................ 20

OTHER INFORMATION ................................................................................................................... 21

CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2016

CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................. 24

CONSOLIDATED INCOME STATEMENT .......................................................................................... 25

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ........................................................ 26

CONSOLIDATED STATEMENT OF CASH FLOWS .............................................................................. 27

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................. 28

EXPLANATORY NOTES .................................................................................................................... 29

CERTIFICATION OF THE SEMI-ANNUAL INTERIM FINANCIAL REPORT AS OF 30 JUNE 2016

STATEMENT OF FINANCIAL POSITION ........................................................................................... 98

INCOME STATEMENT ..................................................................................................................... 99

STATEMENT OF COMPREHENSIVE INCOME ..................................................................................100

STATEMENT OF CASH FLOWS ........................................................................................................101

STATEMENT OF CHANGES IN EQUITY ............................................................................................102

LIST OF EQUITY INVESTMENTS AS OF 30 JUNE 2016 ..............................................................................103

COFIDE - Gruppo De Benedetti S.p.A.

Share Capital 359,604,959

Registered office and operations centre

RODOLFO DE BENEDETTI (*)

Secretary to the Board

BOARD OF STATUTORY AUDITORS

4. Reconciliation of the Parent Company's financial

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As per Consob Resolution no. 6064293 of 28 July 2006

As per Consob Resolution no. 6064293 of 28 July 2006

(**) Some values of 2015 have been reclassified

(*) Some values of 2015 have been reclassified

(*) Some values of 2015 figures have been reclassified.

(in thousands of euro)

amarketapproach(forexample,using quoted pricesforsimilarliabilitiesorequityinstruments

Amendments to IAS 19 Defined Benefit Plans: Employee Contributions (published on 21

consolidation exception granted to investment entities. The amendments introduced by this

"Otherreceivables"at30 June2016 hadabalance of84,201thousand,comparedwith87,075

bond of 25,000 thousand: ratio of consolidated net financial position to consolidated

SogefiEngineSystems MexicoS.deR.L.deC.V.for theleaseof the Monterreyproductionsite.

contractual commitments for technology upgrades to equipment, where necessary, for

Optionsincirculationatstart Optionsgrantedduringthe Optionsexercisedduringthe

Optionsincirculationatstartof Optionsgrantedduringthe Optionsexercisedduringthe Optionsexpiredduringthe

Otheroperating Financialincome Financialexpense

CERTIFICATION OF THE SEMI-ANNUAL INTERIM FINANCIAL REPORT AS OF 30 JUNE 2016

the appropriateness, in relation to the characteristics of the business, and

2. On this subject no aspects emerged that needed to be notified.

Milan, 29 July 2016

STATEMENT OF FINANCIAL POSITION

As per Consob Resolution no. 6064293 of 28 July 2006

Statement of cash flows

CIGA LUXEMBOURG S..r.l.

NEXENTI ADVISORY S.r.l.

JUPITER MARKETPLACE S.r.l.

CIR INVESTIMENTI S.p.A.

INSTITUT DCOLE PRIMAIRE LMAN S.A.

Chf CIR S.p.A.

INSTITUT DCOLE PRIMAIRE LMAN S.A.

FINEGIL EDITORIALE S.p.A.

A. MANZONI & C. S.p.A.