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F.I.LA. GROUP2016 HALF-YEAR REPORT

2016 Half-Year Report

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Contents

General Information ............................................................................................................................. 4 Corporate Boards ................................................................................................................................ 4 Overview of the F.I.L.A. Group.......................................................................................................... 5 F.I.L.A. Group Structure ..................................................................................................................... 6

2016 Half-Year Report ......................................................................................................................... 7 Key Financial Highlights .................................................................................................................... 7 F.I.L.A. Group Key Financial Highlights ........................................................................................... 9

Normalised operating results .......................................................................................................... 9

Statement of Financial Position .................................................................................................... 11 Financial overview ........................................................................................................................ 14

Disclosure by operating segment ...................................................................................................... 19 Business Segments – Statement of Financial Position .................................................................. 22 Business Segments – Income Statement ....................................................................................... 25 Business Segments – Other Information ....................................................................................... 28

Business seasonality .......................................................................................................................... 29 Significant events in the first half of 2016 ........................................................................................ 30 Related party transactions ................................................................................................................. 33 Subsequent events ............................................................................................................................. 34 Outlook ............................................................................................................................................. 34 Treasury shares ................................................................................................................................. 34

Condensed Consolidated 2016 Half-Year Financial Statements .................................................... 36 Consolidated Financial Statements ................................................................................................... 36

Condensed Consolidated Statement of Financial Position ............................................................ 36 Condensed Statement of Comprehensive Income ......................................................................... 37 Statement of Changes in Equity .................................................................................................... 38 Condensed Consolidated Statement of Cash Flow ....................................................................... 39 Statement of financial position pursuant to CONSOB motion No. 15519 of July 27, 2006 ........ 41 Statement of comprehensive income pursuant to CONSOB motion No. 15519 of July 27, 2006 42

Explanatory Notes ............................................................................................................................. 43 Other Information ........................................................................................................................... 102

Related party transactions ........................................................................................................... 102 Attachments .................................................................................................................................... 104

List of companies included in the consolidation and other investments ..................................... 104 Business Combinations ............................................................................................................... 105

Transactions relating to atypical and/or unusual operations ....................................................... 108

Declaration of the Executive Responsible and Corporate Boards ................................................ 109

Auditors’ Report ............................................................................................................................... 110


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DIRECTORS’ REPORT

AT JUNE 30, 2016

F.I.LA. GROUP2016 HALF-YEAR REPORT


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General Information

Corporate Boards

Board of Directors

Chairman Gianni Mion

Chief Executive Officer Massimo Candela

Executive Director Luca Pelosin

Director & Honorary Chairman Alberto Candela

Director (**) Fabio Zucchetti

Director (**) Annalisa Barbera

Director (*) Sergio Ravagli

Director (*)(***) Gerolamo Caccia Dominioni

Director (*) Francesca Prandstraller

(*) Independent director in accordance with Article 148 of the CFA and Article 3 of the Self-

Governance Code.

(**) Non-Executive Director.

(***) Lead Independent Director.

Control and Risks Committee

Gerolamo Caccia Dominioni

Fabio Zucchetti

Sergio Ravagli

Board of Statutory Auditors

Chairman Claudia Mezzabotta

Standing Auditor Stefano Amoroso

Standing Auditor Rosalba Casiraghi

Alternate Auditor Pietro Villa

Alternate Auditor Sonia Ferrero

Independent Audit Firm KPMG S.p.A.


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Overview of the F.I.L.A. Group

The F.I.L.A. Group operates in the creativity tools market, producing colouring, design,

modelling, writing and painting objects, such as pencils, crayons, paints, modelling clay and

chalk, among others.

The F.I.L.A. Group at June 30, 2016 operates through 14 production facilities and 32

subsidiaries across the globe and employs approx. 6,000, becoming a pinnacle for creative

solutions in many countries with brands such as GIOTTO, Tratto, DAS, Didò, Pongo and

LYRA.

Founded in Florence in 1920, F.I.L.A. has achieved strong growth over the last twenty years,

supported by a series of strategic acquisitions: the Italian Company Adica Pongo in 1994, the

US Group Dixon Ticonderoga in 2005, the German Group LYRA in 2008, the Mexican

Company Lapiceria Mexicana in 2010 and the Brazilian Company Lycin in 2012. In addition

to these operations, on the conclusion of an initiative which began with the acquisition of a

minority stake in 2011, control was acquired in 2015 of the Indian company Writefine

Products Private Limited.

On February 3, 2016, F.I.L.A. S.p.A. in addition acquired control of the Daler-Rowney Lukas

Group, an illustrious brand producing and distributing since 1783 materials and accessories

on the arts & crafts market, with a direct presence in the UK, the Dominican Republic,

Germany and the USA.


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F.I.L.A. Group Structure

The F.I.L.A. Group structure at June 30, 2016 is presented below.

0.79%

0.0001%

99.21%

95%

5.00%

0.051%

100.0% 100.0% 100.0%

51.66%

100.0% 100.0% 100.0%

48.34%

99.998% 99.998% 99.990% 99.998%

51.0%

100.0%

0.47%

100.0%

100.0% 100.0%

52% 80%

100.0% 100.0% 100.0%

100%

100.0%

F.I.L.A. S.p.A.

OMYACOLOR S.A.

(France)

94.936%

F.I.L.A. CHILE LTDA

(Chile)

100.0%

100.00%

F.I.L.A. HISPANIA S.L. (Spain)

96.77%

Dixon Ticonderoga

Company

(U.S.A.)

FILA ARGENTINA S.A.

(Argentina)Fila Stationary and Office

Equipment Industry Ltd. Co.

(Turkey)

100.00%

Dixon Ticonderoga Inc.

(Canada)

Fila Dixon Art & Craft

Yixing Co.,Ltd

(China)Fila Hellas SA

(Greece)

50.00%

Industria Maimeri S.p.A. (Italy)51.00%

Fila Stationary O.O.O.

(Russia)

90.00%

Grupo F.I.L.A. -Dixon,

S.A. de C.V.

(Mexico)

Fila Dixon Stationery

(Kunshan) Co., Ltd. (China)

Xinjiang F.I.L.A.

Dixon Plantation Co.

Ltd. (China)

Licyn Mercantil Industrial Ltda

(Brazil)

99.99%

FILA LYRA GB Ltd

(United Kingdom)

Beijing F.I.L.A.-Dixon

Stationery Company Ltd

(China)

Dixon Comercializadora

S.A. de C.V.

(Mexico)

Dixon Ticonderoga de Mexico

S.A. de C.V.

(Mexico)

Fila Polska Sp. Z.o.o (Poland)

51.00%

Maimeri S.p.A.

(Italy)

1.00%Renoir Topco Ltd

(United Kingdom)

Servidix S.A.

de C.V.

(Mexico)

0.002%Dixon Mexico, SA. De CV

(Mexico)

Fila SA PTY LTD

(South Africa)

90.00% 100.0%

5.013%

Renoir Midco Ltd

(United Kingdom)WRITEFINE PRODUCTS PVT

LTD (India)

51.00%

100.0%

Renoir Bidco Ltd

(United Kingdom)Pioneer Stationery Pvt Ltd.

(India)

Fila Australia

PTY LTD

(Australia)

100.00% 100.0% 100.0% 100.0%

Daler Rowney Group

Ltd (United Kingdom)

Daler Rowney S.A.

(Belgium)

Daler Rowney Ltd

(United Kingdom)

Lyra Gmbh & Co. KG

(Germany)

99.53%

100.0% 100.0% 100.0% Daler Rowney Gmbh

(Germany)

Lastmill Ltd

(United Kingdom)

Longbeach Arts Ltd (United

Kingdom)

Daler-Rowney U.S.A.

Ltd (U.S.A.)

Daler Board Company

Ltd (United Kingdom)

PT. Lyra Akrelux

(Indonesia)

Lyra Scandinavia AB

(Sweden)

100.0% Rowney & Co.

(Pencils) Ltd

(United Kingdom)Lukas-Nerchau Gmbh

(Germany)

Nerchi Gmbh

(Germany)

Lyra Verwaltungs

Gmbh

(Germany)

Daler Holdings Ltd

(United Kingdom)

Bridshore Srl

(Dominican Republic)

Daler Designs Ltd

(United Kingdom)

Rowney (artists

brushes)

(United Kingdom)

For further details on the Group structure, reference should be made to Attachment 1 of the

“List of companies included in the consolidation and other investments”.


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Key Financial Highlights

The F.I.L.A. Group key financial highlights for 1H 2016 are reported below.

Euro thousands 1H 2016

% core

business

revenue

1H 2015

% core

business

revenue

of which:

D&R Group(1)

of which:

Writefine(1)

of which:

Pioneer(1)

Core Business Revenue 201,514 100.0% 141,520 100.0% 59,994 42.4% 30,125 21,588 295

EBITDA 31,222 15.5% 25,973 18.4% 5,249 20.2% 2,487 3,118 27

EBIT 24,562 12.2% 21,800 15.4% 2,762 12.7% 658 1,259 17

Net financial charges (1,982) -1.0% (48,240) -34.1% 46,258 -95.9% (1,146) (82) (13)

Total income taxes (8,638) -4.3% (7,722) -5.5% (916) 11.9% 191 (665) (1)

F.I.L.A. Group Net Profit/(loss) 13,208 6.6% (34,348) -24.3% 47,556 -138.5% (298) 261 2

Earnings per share (€ cents)

basic 0.32 -1.15

diluted 0.32 -1.15

NORMALISED - Euro thousands 1H 2016% core

business

revenue

1H 2015% core

business

revenue

of which:

D&R Group(1)(2)

of which:

Writefine(1)(2)

of which:

Pioneer(1)

Core Business Revenue 201,514 100.0% 141,520 100.0% 59,994 42.4% 30,125 21,588 295

EBITDA 36,572 18.1% 27,860 19.7% 8,712 31.3% 2,639 3,140 27

EBIT 29,911 14.8% 23,687 16.7% 6,224 26.3% 810 1,281 17

Net financial charges (2,264) -1.1% (1,582) -1.1% (682) 43.1% (1,146) (82) (13)

Total income taxes (9,765) -4.8% (8,579) -6.1% (1,186) 13.8% 191 (673) (1)

F.I.L.A. Group Net Profit 17,143 8.5% 13,340 9.4% 3,803 28.5% (146) 269 2


basic 0.42 0.45

diluted 0.41 0.39

Euro thousands

Cash Flow from operating activities

Investments

% core business revenue

Euro thousandsof which:

D&R Group

of which:

Pioneer

Net capital employed 92,334 947

Net Financial Instruments 0 0

Net Financial Position 2,974 (601)

Equity (95,308) (346)

(1) “Core Business Revenue" and “Net financial charges" are reported net of Intercompany transactions

(2) The figures are adjusted in terms of the normalisations required relating to companies subject to deconsolidation

(3) The Gross Operating Margin (EBITDA) corresponds to the operating result before amortisation and depreciation and write-downs;

Change

2016 - 2015

Change

2016 - 2015

June 30, 2016 June 30, 2015Change

2016 - 2015

(38,366) (54,175) 15,809

4,261 4,660 (399)

2.1% 3.3%

June 30, 2016 December 31, 2015Change

2016 - 2015

418,736 271,975 146,761

0 (21,504) 21,504

(4) Indicator of the net financial structure, calculated as the aggregate of the current and non-current financial debt, net of cash and cash equivalents and current financial assets and

loans provided to third parties classified as non-current asset. The net financial position as per CONSOB Communication DEM/6064293 of July 28, 2006 excludes non-current

financial assets. The non-current financial assets of the F.I.L.A. Group at June 30, 2016 amount to Euro 2,132 thousand, of which Euro 355 thousand included in the calculation of the

net financial position; therefore the F.I.L.A. Group financial indicator does not equate, for this amount, with the net financial position as defined in the above-mentioned Consob

communication. For further details, see paragraph ‘Financial Overview” of the Report below.

(188,895) (38,744) (150,151)

(229,841) (211,727) (18,114)


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2016 Normalisations:

• The normalisation of 1H 2016 EBITDA relates to non-recurring operating costs of

approx. Euro 5.4 million, principally for consultancy on the corporate operations carried

out in 1H 2016.

• The normalisation of Net financial charges relates principally to the net financial income

on the currency hedging derivative opened on the loan in UK Sterling for the acquisition

of the Daler-Rowney Group, net of the currency adjustments on the loan itself.

• The normalisation of the 1H 2016 Group Result concerns the above-stated

normalisations, net of the tax effect.

2015 Normalisations:

• The normalisation of 1H 2015 EBITDA relates to non-recurring operating costs for

approx. Euro 1.9 million, principally for consultancy on the merger proposal between

F.I.L.A. S.p.A. and Space S.p.A..

• The normalisation of Net financial charges concerns charges from the Fair Value

measurement of Space S.p.A. equity at May 31, 2015 (Euro 45.8 million) and of market

warrants at June 30, 2015 (Euro 0.9 million).

• The normalisation of the 1H 2015 Group Result concerns the above-stated

normalisations, net of the tax effect.


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F.I.L.A. Group Key Financial Highlights

The F.I.L.A. Group Key Financial Highlights for 1H 2016 are reported below.

Normalised operating results

The F.I.L.A. Group results in 1H 2016 report an EBITDA improvement of approx. 31.3% on

2015.

NORMALISED - Euro thousands

1H 2016

% core

business

revenue

1H 2015

% core

business

revenue

Core Business Revenue 201,514 100% 141,520 100% 59,994 42.4%

Other Revenue and Income 4,765 3,001 1,764 58.8%

TOTAL REVENUE 206,279 144,521 61,758 42.7%

TOTAL OPERATING COSTS (169,707) -84.2% (116,661) -82.4% (53,046) 45.5%

EBITDA 36,572 18.1% 27,860 19.7% 8,712 31.3%

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (6,661) -3.3% (4,172) -2.9% (2,489) 59.7%

EBIT 29,911 14.8% 23,687 16.7% 6,224 26.3%

NET FINANCIAL CHARGES (2,264) -1.1% (1,582) -1.1% (682) 43.0%

PRE-TAX PROFIT 27,647 13.7% 22,106 15.6% 5,541 25.1%

TOTAL INCOME TAXES (9,765) -4.8% (8,579) -6.1% (1,186) 13.8%

NET PROFIT - CONTINUING OPERATIONS 17,882 8.9% 13,526 9.6% 4,356 32.2%

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS 0 0.0% (120) -0.1% 120 -100.0%

NET PROFIT FOR THE PERIOD 17,882 8.9% 13,406 9.5% 4,476 33.4%

Non-controlling interest profit 739 0.4% 66 0.0% 673 1018.4%

F.I.L.A. GROUP NET PROFIT 17,143 8.5% 13,340 9.4% 3,803 28.5%

Change 2016 - 2015

The principal changes compared to 2015 are illustrated below.

“Core Business Revenue” of Euro 201,514 thousand increased on 2015 by Euro 59,994

thousand (+42.4%).

Excluding the negative currency impact of Euro 6,134 thousand (principally on the Mexican

and Argentinian Peso) and the M&A effect of approx. Euro 52,008 thousand (of which Euro

21,588 concerning the Indian company Writefine Products PVT Ltd (India), consolidated in

October 2015, Euro 295 thousand concerning the Indian company Pioneer Stationery Private

Ltd (India), consolidated in May 2016 and Euro 30,125 thousand concerning the English

Daler-Rowney Lukas, consolidated from February 2016), organic growth was Euro 14,120

thousand (+10%), principally concentrated in Central-South America for Euro 4,849

thousand, +20,8% (particularly Mexico and Argentina), Europe for Euro 4,793 thousand,


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+7% (particularly Italy, Russia, Germany and Scandinavia) and North America for Euro

3,933 thousand, +8.1% (United States).

Other Revenue and Income of Euro 4,765 thousand increased on the previous year Euro

1,764 thousand on the basis of exchange gains on commercial operations.

“Operating Costs” of Euro 169,707 thousand increased Euro 53,046 thousand on 2015,

principally due to the M&A effect stated above (Euro 49,127 thousand). The increase in

acquisition and commercial costs in support of higher revenue was in part offset by the

depreciation of the Mexican and Chinese currencies, in addition to air transport savings in

2015 to ensure punctual procurement;

The normalised “EBITDA” in 2016 of Euro 36,572 thousand therefore improved Euro 8,712

thousand on 2015 (+31.3%, of which +12.1% entirely organic growth excluding the currency

effect), greater therefore than organic revenue growth (+10%).

Amortisation, depreciation & write-downs increased Euro 2,489 thousand, entirely due to the

above-stated M&A effect.

Normalised “Net financial charges” increased Euro 681 thousand, principally due to higher

interest charges and currency related charges.

Group “Income taxes” amounted to Euro 9,765 thousand, with the effective tax rate reducing

on the comparative period. The tax benefits stemmed from the use of prior tax losses of the

parent, principally for the revaluation of market warrants and the use of the “ACE” assessable

tax base.

Excluding the non-controlling interest result, the F.I.L.A. Group normalised net profit in

2016 was Euro 17,143 thousand, compared to Euro 13,340 thousand in the previous year.


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Statement of Financial Position

The statement of financial position of the F.I.L.A. Group at June 30, 2016 is reported below.

Euro thousandsJune 2016 December 2015

Change

2016 - 2015

Intangible assets 152,789 88,156 64,633

Property, plant & equipment 59,221 47,901 11,320

Financial assets 1,808 1,785 23

NET FIXED ASSETS 213,818 137,842 75,976

OTHER ASSETS/NON-CURRENT LIABILITIES 14,933 13,901 1,033

Inventories 157,155 118,519 38,636

Trade and Other Receivables 152,805 77,731 75,074

Other Current Assets 6,312 5,020 1,292

Trade and Other Payables (79,071) (52,985) (26,086)

Other Current Liabilities (7,909) (1,840) (6,070)

NET WORKING CAPITAL 229,293 146,445 82,848

PROVISIONS (39,308) (26,213) (13,095)

NET CAPITAL EMPLOYED 418,736 271,975 146,761

EQUITY (229,841) (211,727) (18,114)

NET FINANCIAL INSTRUMENTS 0 (21,504) 21,504

NET FINANCIAL POSITION (188,895) (38,744) (150,151)

NET FUNDING SOURCES (418,736) (271,975) (146,761)

Note:

- for the breakdown of the accounts illustrated in the above table, reference should be made to the “F.I.L.A. Group Consolidated Financial

Statements at June 30, 2016”.

The “Net Capital Employed” of the F.I.L.A. Group at June 30, 2016 of Euro 418,736

thousand is principally comprised of “Net Fixed Assets” of Euro 213,818 thousand

(increasing on December 31, 2015 Euro 75,976 thousand) and the “Net Working Capital”

totalling Euro 229,293 (increasing on December 31, 2015 Euro 82,848 thousand). These

increases include the change in the consolidation scope with the entry of the Daler-Rowney

Lukas Group on February 3, 2016 for Euro 98,899 thousand.

The increase in “Net Fixed Assets”, amounting to Euro 75,976 thousand, mainly concerned

“Intangible and Tangible Fixed Assets” and relates to the change in the consolidation scope

in 2016, substantially concerning the Daler-Rowney Lukas Group for Euro 84,213 thousand

and marginally the net investments undertaken during the year by the other Group companies.

The increase in “Intangible Assets” of Euro 64,633 thousand mainly relates to “Brands,

Know-how and Goodwill” and partly the “Goodwill” of the Daler-Rowney Lukas Group,


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recognised during the Business Combination of February 3, 2016, for a total of Euro 74,304

thousand, less currency translation impacts of Euro 7,483 thousand and amortisation of Euro

2,637 thousand.

The increase in “Property, plant and equipment” of Euro 11,320 thousand mainly relates to

the assets of the Daler-Rowney Lukas Group, recognised at February 3, 2016, for a total of

Euro 12,839 thousand, net investments of Euro 3,940 thousand, less depreciation of Euro

3,868 thousand and currency translation impacts of Euro 2,411 thousand.

The principal changes in “Net Working Capital” refer to the increase in the account “Trade

and Other Receivables” (Euro 75,074 thousand), due to the seasonality of the F.I.L.A.

Group’s business and the increase in revenue, in addition to, for Euro 16,147 thousand, the

change in the consolidation scope with the entry of the Daler-Rowney Lukas Group.

“Inventories” increased Euro 38,636 thousand, mainly at the US, German, French and

Canadian subsidiaries and substantially in support of the expanding order book in the first

half-year and the prompt execution of orders, in addition to, for Euro 23,520 thousand, the

entry into the consolidation scope of the Daler-Rowney Lukas Group. The increase in

“Inventories” and “Trade and Other Receivables” is offset by the changes to “Trade and

Other Payables” (Euro -26,086 thousand), principally against increased purchases in support

of higher production volumes and inventory, in addition to extraordinary consultancy on

M&A operations and for Euro 13,075 thousand the entry into the consolidation scope of the

Daler-Rowney Lukas Group.

The increase in “Provisions” of Euro 13,095 thousand substantially concerns “Deferred Tax

Liabilities” contributed by the Daler-Rowney Lukas Group under the Business Combination

process of February 3, 2016, for a total of Euro 14,087 thousand and the tax effect from the

Fair Value adjustment of “Brands” and “Know-how”.

The “Equity” of the F.I.L.A. Group amounting to Euro 229,841 thousand at June 30, 2016

increased by Euro 18,114 thousand on the previous year. This is principally due to the

exercise of “Market Warrants” for Euro 21,444 thousand and the comprehensive net profit in

2016 of the Group companies, totalling Euro 13,208 thousand, offset by the “Translation

Reserve” concerning the conversion of the Group companies financial statements for Euro


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11,984 thousand, recorded principally in UK Sterling and Mexican Pesos, the distribution of

dividends to shareholders of the F.I.L.A. Group of Euro 4,277 thousand, in addition to the

“IAS 19 Reserve” for Euro 1,156 thousand.

Following the conclusion of the Market Warrants exercise period, the “Net Financial

Instruments” account amounted to zero, which at December 31, 2015 amounted to Euro

21,504 thousand. The effect of the conversion into shares resulted in a change to equity as

previously described of Euro 21,444 thousand; the residual non-exercised portion was

recognised to the income statement as financial income for Euro 60 thousand.

The F.I.L.A. Group “Net Financial Position” at June 30, 2016 was a net debt of Euro 188,895

thousand, increasing on Euro 150,151 thousand at December 31, 2015. For greater details,

reference should be made to the “Financial Overview” paragraph.


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Financial overview

The overview of the 1H 2016 Group operating and financial performance is completed by the

Statement of Cash Flow and Group Net Financial Position reported below.

Euro thousands June 2016 June 2015

EBIT 24,562 21,800

adjustments for non-cash items: 7,351 4,488

Amortisation & Depreciation 6,504 3,617

Write-down and Recovery in Value 8 4

Doubtful Debt Provision 149 552

Exch. effect on Assets and Liabilities in Foreign Curr. of Commercial Transactions 704 318

Gain/Loss on Fixed Asset Disposals (14) (3)

integrations for: (3,913) (6,870)

Income Taxes Paid (3,262) (6,496)

Unrealised Exchange Differences on Assets and Liabilities in Foreign Currencies 1,963 344

Realised Exchange Differences on Assets and Liabilities in Foreign Currencies (2,614) (718)

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN NET

WORKING CAPITAL28,000 19,418

Changes in Net Working Capital: (66,366) (73,593)

Change in Inventories (19,215) (17,723)

Change in Trade and Other Receivables (62,000) (57,273)

Change in Trade and Other Payables 15,323 1,868

Change in Other Assets/Liabilities (1,194) (450)

Change in Post-Employment and Employee Benefits 719 (15)

CASH FLOW FROM OPERATING ACTIVITIES (38,366) (54,175)

Total Investment/Divestment in Intangible Assets (301) (50)

Total Investment/Divestment in Property, Plant and Equipment (3,960) (4,610)

Cash Flow from Non-Current Assets & Liabilities Held-for-Sale 0 171

Total Investment/Divestment in Other Financial Assets (585) (90)

Acquisition of investment in Daler & Rowney Lucas Group (16,875) 0

Acquisition of investment in Pioneer Stationary Pvt Ltd (13) 0

Interest Received 110 162

CASH FLOW FROM INVESTING ACTIVITIES (21,623) (4,416)

Total Change in Equity (4,277) (64)

Interest Paid (2,357) (1,787)

Total Increase/Decrease Loans and Other Financial Liabilities 128,718 (13,531)

CASH FLOW FROM FINANCING ACTIVITIES 122,083 (15,382)

Translation difference (11,984) 3,699

Other non-cash equity changes 11,469 (2,497)

NET CASH FLOW IN THE PERIOD 61,579 (72,770)

Cash and Cash Equivalents net of Bank Overdrafts at beginning of the period 17,542 30,663

Cash and Cash Equivalents net of Bank Overdrafts at beginning of the period (change in

consolidation scope) (87,227) 93,333

CASH AND CASH EQUIVALENTS NET OF BANK OVERDRAFTS AT END OF THE

PERIOD(8,105) 51,226

1) Cash and cash equivalents in 1H 2016 totalled Euro 15,626 thousand; current account overdrafts amounted to Euro

23,731 thousand net of relative interest.

2) Cash and cash equivalents at June 30, 2015 totalled Euro 59,842 thousand; current account overdrafts amounted to

Euro 8,615 thousand net of relative interest.

3) The cash flows are presented using the indirect method. In order to provide a more complete and accurate presentation

of the individual cash flows, the effects from non-cash operations were eliminated (including the conversion of

statement of financial position items in currencies other than the Euro), where significant. These effects were

aggregated and included in the account “Other non-cash changes”.


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The net cash flow absorbed in 2016 from “Operating Activities” of Euro 38,366 thousand

(absorption of operating cash at June 30, 2015 of Euro 54,175 thousand) concerns:

for Euro 28,000 thousand (Euro 19,418 thousand at June 30, 2015) cash flow generated

from “Operating Activities”, based on the difference of the “Value” and the “Costs of

Cash Generation” and the remaining ordinary income components, excluding financial

management;

for a negative Euro 66,366 thousand (Euro 73,593 thousand in 1H 2015), “Working

Capital Management” movements, principally due to the increase of “Trade and Other

Receivables”, in line with the seasonality of the business, in addition to the increase in

stock levels (required to support higher sales volumes and to guarantee the prompt

fulfilment of customer orders). The latter effect principally concerns the subsidiaries

Dixon Ticonderoga Company (U.S.A.), Omyacolor S.A. (France), Lyra Gmbh & Co. KG

(Germany), Dixon Ticonderoga Inc. (Canada), F.I.L.A. Chile Ltda (Chile), FILA

Argentina S.A. (Argentina) and F.I.L.A. Hispania S.L. (Spain). The above-stated

absorption of cash is offset by the increase in “Trade and Other Payables”, principally at

the US subsidiary. This increase principally follows increased Group purchases in

support of higher production volumes and inventories, in addition to extraordinary

consultancy on M&A operations, mainly by the parent.

“Investing Activities” absorbed net liquidity of Euro 21,623 thousand (Euro 4,416 thousand

in 1H 2015), of which:

Euro 16,888 thousand (Euro 0 thousand at June 30, 2015), almost exclusively

concerning the acquisition of the Daler & Rowney Group and of Pioneer

Stationery Private Ltd (India).

Euro 301 thousand (Euro 50 thousand at June 30, 2015), almost exclusively

concerning the purchase of software by Writefine Products PVT LTD (India);

Euro 3,960 thousand (Euro 4,610 thousand in 1H 2016) for net investment in plant

and machinery, principally by Writefine Products PVT LTD (India), Fila Dixon

Stationery (Kunshan) Co., Ltd. (China), F.I.L.A. S.p.A. (Italy), Grupo F.I.L.A. –

Dixon, S.A. de C.V. (Mexico) and Daler Rowney Ltd (United Kingdom).


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“Financing Activities” generated net cash of Euro 122,083 thousand (absorbing cash of Euro

15,382 thousand in 1H 2015), principally concerning:

the decrease in equity of Euro 4,277 thousand (decrease of Euro 64 thousand in 1H 2015)

following the distribution of dividends to F.I.L.A. Group shareholders;

the absorption of Euro 2,357 thousand (Euro 1,787 thousand in 1H 2015) from interest

charges paid on loans and credit lines granted to Group companies, principally F.I.L.A.

S.p.A. (Italy), Dixon Ticonderoga Company (U.S.A.), Grupo F.I.L.A. –Dixon, S.A. de

C.V. (Mexico) and Writefine Products PVT LTD (India);

the generation of Euro 128,718 thousand, principally due to the bank loan issued for the

acquisition of the Daler-Rowney Lucas Group.

Finally, the negative translation difference of Euro 11,984 thousand, following the conversion

of Group companies financial statements from local currency to the consolidation currency

(the Euro), is almost entirely offset by non-cash increases for Euro 11,469 thousand

(principally due to the exchange rate movements on the previous year concerning the larger

balance sheet items).

The total net cash generated in the period was therefore Euro 61,579 thousand (absorption of

Euro 72,770 thousand in the first half of 2015).

Considering therefore the “Cash and cash equivalents” at the beginning of the period of Euro

17,542 thousand and the “Cash and cash equivalents from the change in consolidation scope

at the contribution date” for a negative Euro 87,227 thousand, the “Cash and cash

equivalents” at period-end was a negative Euro 8,105 thousand.


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The Net Financial Position at June 30, 2016 reports a debt of Euro 188,895 thousand.

Euro thousandsJune 30, 2016 December 31, 2015 Change in period

A Cash 130 132 (2)

B Other cash equivalents 15,496 30,551 (15,055)

C Securities held-for-trading 0 0 0

D Liquidity ( A + B + C) 15,626 30,683 (15,057)

E Current financial receivables 1,254 268 986

F Current bank payables (93,794) (67,319) (26,475)

G Current portion of non-current debt (10,311) (715) (9,596)

H Other current financial payables (2,229) (505) (1,724)

I Current financial debt ( F + G + H ) (106,334) (68,539) (37,795)

J Net current financial debt (I + E+ D) (89,454) (37,588) (51,866)

K Non-current bank payables (99,614) (1,404) (98,210)

L Bonds issued 0 0 0

M Other non-current payables (182) (106) (76)

N Non-current financial debt ( K + L + M ) (99,796) (1,510) (98,286)

O Net financial debt (J+N) (189,250) (39,098) (150,152)

P Loans issued to third parties 355 354 1

Q Net financial debt (O + P) - F.I.L.A. Group (188,895) (38,744) (150,151)

Note:

3) At June 30, 2016 there were no transactions with related parties which impacted the net financial debt.

1) The net financial debt calculated at point “O” complies with Consob Communication DEM/6064293 of July 28, 2006, which excludes non-

current financial assets. The net financial debt of the F.I.L.A. Group differs from the above communication by Euro 355 thousand in relation to the

non-current loans granted to third parties by F.I.L.A. S.p.A. (Euro 350 thousand) and Omyacolor S.A. (Euro 5 thousand)

2) The Market Warrants recognised to the financial statements at December 31, 2015 of Euro 21,504 thousand are not considered an integral part

of the net financial debt as cashless financial instruments.

Compared to December 31, 2015 (debt of Euro 38,744 thousand), net debt increased Euro

150,151 thousand. Excluding the net debt of the Daler-Rowney Lukas Group and of Pioneer

Stationery P. Ltd at the acquisition date, respectively amounting to Euro 86,752 thousand and

Euro 512 thousand, the currency effect from the translation of the net financial position items

in currencies other than the Euro, contributing cash of Euro 2,638 thousand, the absorption of

cash following the recognition of the investment in the Daler-Rowney Lukas Group of Euro

16,751 thousand (of which Euro 1,084 thousand consultancy for the corporate operation), the

increase in the net debt was Euro 48,773 thousand (compared to the cash absorption of Euro

59,121 thousand in the first half of 2015) and principally concerns:


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net cash absorbed from operating activities of Euro 38,366 thousand (Euro 54,175

thousand in the first half of 2015), due principally to the increase in the working

capital of the main group companies and reflective of business seasonality;

net tangible and intangible asset investment of Euro 4,261 thousand (Euro 4,660

thousand in 1H 2015);

the payment of dividends of Euro 4,277 thousand to F.I.L.A. S.p.A. shareholders by

the parent, to non-controlling interests of the Indian and German subsidiaries (Euro 64

thousand in 1H 2015)

cash absorbed from interest on loans and credit lines issued to Group companies of

Euro 2,357 thousand (Euro 1,787 thousand in 1H 2015).

For further details on the changes to the balance sheet accounts, reference should be made to

“Note 12 – Share Capital and Equity” and “Note 13 – Financial Liabilities” of the Notes.


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Disclosure by operating segment

As per IFRS 8, F.I.L.A Group segment reporting is based on internal reporting, which is

constantly reviewed by the highest level of Group management in order to allocate resources

to the various segments and to analyse performance.

Geographic region is the primary basis of analysis and of decision-making by F.I.L.A. Group

Management, therefore fully in line with the internal reporting prepared for these purposes.

The products of the F.I.L.A. Group are similar in terms of quality and production, target

market, margins, sales network and clients, even with reference to the different brands which

the Group markets. No diversification is therefore deemed to be present within the segment,

in consideration of the substantial uniformity of the risks and benefits relating to the products

produced by the F.I.L.A. Group.

The segment disclosure accounting standards are in line with those utilised for the

consolidated financial statements.

Segment disclosure was therefore based on the location of operations (“Entity Locations”),

broken down as follows: “Europe”, “North America”, “Central and South America” and

“Rest of the World”. The “Rest of the World” includes the subsidiaries in South Africa and

Australia.

The “Business Segment Reporting” of the F.I.L.A. Group aggregates companies by region on

the basis of the “operating location”.

The association between the regions, reported in the “Business Segment Reporting” and the

F.I.L.A. Group companies was as follows:


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EuropeF.I.L.A. S.p.A. (Italy)

Omyacolor S.A. (France)

F.I.L.A. Hispania S.L. (Spain)

FILALYRA GB Ltd. (United Kingdom)

Johann Froescheis Lyra Bleistift-Fabrik GmbH & Co. KG (Germany)

Lyra Bleistift-Fabrik Verwaltungs GmbH (Germany)

Lyra Scandinavia AB (Sweden)

FILA Stationary and Office Equipment Industry Ltd. Co. (Turkey)

Fila Stationary O.O.O. (Russia)

Industria Maimeri S.p.A. (Italy)

Fila Hellas SA (Greece)

Fila Polska Sp. Z.o.o (Poland)

Renoir Topco Ltd (United Kingdom)

Renoir Midco Ltd (United Kingdom)

Renoir Bidco Ltd (United Kingdom)

Daler Rowney Group Ltd (United Kingdom)

Daler Rowney S.A. (Belgium)

Daler Rowney Ltd (United Kingdom)

Longbeach Arts Ltd (United Kingdom)

Daler Board Company Ltd (United Kingdom)

Daler Holdings Ltd (United Kingdom)

Daler Designs Ltd (United Kingdom)

Daler Rowney GmbH (Germany)

Lukas-Nerchau GmbH (Germany)

Nerchauer Malfarben GmbH (Germany)

Lastmill Ltd (United Kingdom)

Rowney & Company Pencils Ltd (United Kingdom)

Rowney (Artists Brushes) Ltd (United Kingdom)

North America

Dixon Ticonderoga Company (U.S.A.)

Dixon Ticonderoga Inc. (Canada)

Daler Rowney USA Ltd (U.S.A.)

Central - South America

Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico)

F.I.L.A. Chile Ltda (Chile)

FILA Argentina S.A. (Argentina)

Licyn Mercantil Industrial Ltda (Brazil)

Brideshore srl (Dominican Republic)

Asia

Beijing F.I.L.A.-Dixon Stationery Company Ltd. (China)

Xinjiang F.I.L.A.-Dixon Plantation Company Ltd. (China)

Fila Dixon Art & Craft Yixing Co.,Ltd (China)

PT. Lyra Akrelux (Indonesia)

FILA Dixon Stationery (Kunshan) Co., Ltd. (China)

Pioneer Stationery Pvt Ltd. (India)

Writefine Products PVT LTD (India)

Rest of the World

FILA Australia PTY LTD (Australia)

FILA SA PTY LTD (South Africa)


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The segment reporting required in accordance with IFRS 8 is presented below.

For the purposes of providing comparable financial statements, the figures are shown net of

the change in the consolidation scope during 2016 following the acquisition of the Daler-

Rowney Lukas Group and the controlling stake in Pioneer Stationery Pvt Ltd, previously an

associate of Writefine Products Private Limited at December 31, 2015. In addition, in relation

to the income statement, the 1H 2016 figures exclude also Writefine Products Private

Limited, consolidated from November 2015.


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Business Segments – Statement of Financial Position

The “statement of financial position” for the F.I.L.A. Group by region, at June 30, 2016 and

December 31, 2015, is reported below:

Euro thousands EuropeNorth

America

Central -

South AmericaAsia

Rest of the

WorldConsolidation

F.I.L.A.

Group

June 2016

STATEMENT OF FINANCIAL POSITION

Non-Current Assets 302,265 14,241 13,699 91,736 175 (192,911) 229,205

of which Intercompany (192,549) (181) (8) (173)

Intangible Assets 75,327 5,882 5,064 66,270 111 135 152,789

Property, Plant and Equipment 26,152 1,868 6,881 24,261 59 59,221

Non-Current Financial Assets 1,355 686 325 631 5 (870) 2,132

Investments measured at Cost 193,115 480 8 307 (193,879) 31

Deferred Tax Assets 6,316 4,769 1,421 267 2,259 15,032

Other Receivables 556 (556)

Current Assets 266,297 97,781 100,301 45,883 1,810 (178,921) 333,152

of which Intercompany (132,595) (8,283) (22,895) (15,147)

Current Financial Assets 91,671 2,302 139 1,290 (94,148) 1,254

Current Tax Receivables 2,136 1,847 606 1,723 6,312

Inventories 65,358 44,054 32,456 21,433 1,367 (7,513) 157,155

Trade and Other Receivables 99,020 48,345 63,628 18,744 352 (77,284) 152,805

Cash and Cash Equivalents 8,113 1,233 3,472 2,693 91 24 15,626

TOTAL ASSETS 568,563 112,022 114,000 137,619 1,985 (371,832) 562,357


Non-Current Liabilities 119,449 4,470 1,527 14,079 (1,301) 138,224

of which Intercompany (745) (556)

Non-Current Financial Liabilities 99,989 22 152 502 (870) 99,795

Employee Benefits 4,060 931 816 326 6,133

Provisions for Risks and Charges 662 706 1,368

Deferred Tax Liabilities 14,738 2,255 559 13,152 125 30,829

Other Payables 556 99 (556) 99

Current Liabilities 214,377 53,414 62,950 31,913 3,045 (171,407) 194,292213,515 4,886 9,203 12,304 2,371 of which Intercompany (125,686) (13,056) (16,803) (13,041) (2,821)

Current Financial Liabilities 130,774 22,202 38,169 8,059 1,278 (94,148) 106,334

Provisions for Risks and Charges 888 90 978

Current Tax Payables 1,246 4,195 568 1,900 7,909

Trade and Other Payables 81,469 26,927 24,213 21,954 1,767 (77,259) 79,070

TOTAL LIABILITIES 333,826 57,884 64,477 45,992 3,045 (172,708) 332,516

of which Intercompany (126,431) (13,612) (16,803) (13,041) (2,821)

* Allocation by "Entity Location"

REPORTING FORMAT - BUSINESS SEGMENTS*

Goegraphic Area - F.I.L.A. Group


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America

Central -

South AmericaAsia

Rest of the

WorldConsolidation

F.I.L.A.

Group

December 2015



of which Intercompany (2,108) 578 (148)

Intangible Assets 8,383 4,251 7,089 68,545 112 (224) 88,156


Non-Current Financial Assets 3,425 497 334 472 4 (2,945) 1,787

Investments measured at Equity 322 322

Investments measured at Cost 31 31


Current Assets 103,815 49,667 66,930 45,805 1,423 (35,419) 232,221

of which Intercompany (16,206) (3,728) (2,946) (12,536) (3)

Current Financial Assets 4,146 215 881 (4,974) 268


Inventories 49,134 24,804 26,285 22,118 925 (4,747) 118,519


Cash and Cash Equivalents 9,284 10,971 3,605 6,403 161 259 30,683

TOTAL ASSETS 138,379 59,682 82,386 139,498 1,603 (37,098) 384,450

of which Intercompany (18,315) (3,150) (2,946) (12,684) (3)


of which Intercompany (1,820) (1,000)

Non-Current Financial Liabilities 2,843 16 1,000 596 (2,945) 1,510




Other Payables 132 132

Current Liabilities 77,788 21,427 42,081 32,172 2,506 (30,672) 145,302

of which Intercompany (7,696) (453) (9,167) (11,100) (2,255)


Financial Instruments 21,504 21,504


Current Tax Payables 316 29 300 1,195 1,840



of which Intercompany (9,516) (453) (10,167) (11,100) (2,255)



Goegraphic Area - F.I.L.A. Group


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For a better understanding of the changes between the comparative periods, the F.I.L.A.

Group Business Segments at June 2016 at like-for-like consolidation scope with 2015 are

reported below.


America

Central -

South AmericaAsia

Rest of the

WorldConsolidation

F.I.L.A.

Group

June 2016 - LIKE-FOR-LIKE CONSOLIDATION SCOPE



of which Intercompany (88,513) (180) (8) 9

Intangible Assets 11,705 5,882 5,064 66,270 111 (3,510) 85,522


Non-Current Financial Assets 1,346 686 325 617 5 (870) 2,110

Investments measured at Equity

Investments measured at Cost 85,193 480 8 (85,650) 31


Other Receivables 556 (556)

Current Assets 131,735 77,460 77,133 45,453 1,810 (46,889) 286,704


Current Financial Assets 6,669 1 139 1,290 (7,925) 173


Inventories 51,275 35,249 27,297 21,236 1,367 (5,960) 130,465


Cash and Cash Equivalents 6,583 820 3,417 2,660 91 24 13,595

Non-Current and Current Assets Held-for-Sale

of which Intercompany

TOTAL ASSETS 251,062 90,186 89,782 136,328 1,985 (135,580) 433,456



of which Intercompany (745) (556)

Non-Current Financial Liabilities 99,928 9 152 501 (870) 99,720


Provisions for Risks and Charges 662 706 1,368


Other Payables 556 99 (556) 98

Current Liabilities 87,334 42,672 54,044 31,100 3,045 (40,929) 177,266




Current Tax Payables 1,231 3,943 568 1,895 7,637


Liab. related to Non-Current & Current Assets Held-for-Sale





Geographic Area - F.I.L.A. Group


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Business Segments – Income Statement

The “income statement” for the F.I.L.A. Group by region for 1H 2016 and 1H 2015 is

reported below:


America

Central -

South

America

AsiaRest of the

WorldConsolidation F.I.L.A. Group

1H 2016

INCOME STATEMENT

Core Business Revenue 118,884 67,613 42,161 43,992 260 (71,396) 201,514

Other Revenue and Income 4,985 1,176 1,538 518 47 (3,499) 4,765

TOTAL REVENUE 123,869 68,789 43,699 44,510 307 (74,895) 206,279


Raw Materials, Ancillary, Consumables and Goods (67,534) (52,616) (26,522) (26,547) (558) 71,480 (102,297)

Services and Rent, Leases and Similar Costs (27,336) (10,783) (7,245) (5,067) (180) 2,372 (48,239)

Other Operating Costs (2,305) (1,387) (1,672) (138) (4) (186) (5,692)

Change in Inventory 4,281 12,511 3,069 (67) 395 (1,663) 18,526

Labour Costs (19,949) (3,816) (6,359) (7,133) (98) (37,355)

TOTAL OPERATING COSTS (112,843) (56,091) (38,729) (38,952) (445) 72,003 (175,057)

of which Intercompany 36,042 25,307 5,445 4,656 553

EBITDA 11,026 12,698 4,970 5,558 (138) (2,892) 31,222

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (3,242) (452) (738) (2,219) (9) (6,660)

EBIT 7,784 12,246 4,232 3,339 (147) (2,892) 24,562

NET FINANCIAL CHARGES 4,212 1,736 (644) (224) 25 (7,087) (1,982)

of which Intercompany (5,170) (1,969) 40 12

PRE-TAX PROFIT/(LOSS) 11,996 13,982 3,588 3,115 (122) (9,979) 22,580

TOTAL INCOME TAXES (3,271) (4,195) (807) (930) 565 (8,638)

of which Intercompany 278 287

NET PROFIT/(LOSS) - CONTINUING OPERATIONS 8,725 9,787 2,781 2,185 (122) (9,414) 13,942

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS

NET PROFIT/(LOSS) FOR THE PERIOD 8,725 9,787 2,781 2,185 (122) (9,414) 13,942

Non-controlling interest profit/(loss) 201 545 (12) 734

F.I.L.A. GROUP NET PROFIT/(LOSS) 8,524 9,787 2,781 1,640 (110) (9,414) 13,208





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America

Central -

South AmericaAsia

Rest of the


1H 2015

INCOME STATEMENT



TOTAL REVENUE 84,304 50,057 37,250 23,433 148 (50,670) 144,521




Other Operating Costs (844) (885) (1,026) (64) () (269) (3,088)

Change in Inventory 5,656 4,663 8,930 (1,414) 170 (117) 17,889

Labour Costs (13,985) (2,890) (5,924) (4,550) (129) (27,479)



EBITDA 10,919 9,582 3,727 2,102 (242) (116) 25,973

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (2,156) (260) (915) (831) (10) (4,173)

EBIT 8,763 9,322 2,812 1,271 (251) (116) 21,800

NET FINANCIAL CHARGES (42,561) 1,806 (1,101) (203) (16) (6,164) (48,240)


PRE-TAX PROFIT/(LOSS) (33,797) 11,128 1,711 1,070 (269) (6,281) (26,440)

TOTAL INCOME TAXES (3,747) (3,418) (887) 264 65 (7,722)

of which Intercompany 289 (224)

NET PROFIT/(LOSS) - CONTINUING OPERATIONS (37,545) 7,710 824 1,334 (269) (6,216) (34,162)

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS 2 (122) (120)

NET PROFIT/(LOSS) FOR THE PERIOD (37,545) 7,713 824 1,212 (269) (6,216) (34,282)


FILA GROUP NET PROFIT/(LOSS) (37,705) 7,713 824 1,173 (136) (6,216) (34,348)



Geographic Area - F.I.L.A Group


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For a better understanding of the changes between the comparative periods, the F.I.L.A.

Group Business Segments at June 2016 at like-for-like consolidation scope with 2015 are

reported below.


America

Central -

South

America

AsiaRest of the


1H 2016 - LIKE-FOR-LIKE CONSOLIDATION SCOPE

INCOME STATEMENT



TOTAL REVENUE 89,910 53,872 36,318 20,066 307 (47,607) 152,866




Other Operating Costs (886) (1,361) (1,669) (113) (4) (107) (4,141)

Change in Inventory 2,186 10,749 2,480 458 395 (852) 15,416

Labour Costs (14,709) (2,976) (5,530) (4,090) (98) (27,403)



EBITDA 10,664 11,785 3,336 2,025 (138) (2,081) 25,590

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (1,724) (248) (631) (350) (9) (2,962)

EBIT 8,940 11,537 2,705 1,675 (147) (2,081) 22,628

NET FINANCIAL CHARGES 5,344 1,746 (644) (130) 25 (7,083) (741)


PRE-TAX PROFIT/(LOSS) 14,284 13,283 2,061 1,545 (121) (9,164) 21,887

TOTAL INCOME TAXES (3,449) (4,056) (807) (264) 414 (8,163)

of which Intercompany 127 287

NET PROFIT/(LOSS) - CONTINUING OPERATIONS 10,834 9,227 1,255 1,280 (121) (8,750) 13,724

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS

of which Intercompany

NET PROFIT/(LOSS) FOR THE PERIOD 10,834 9,227 1,255 1,280 (121) (8,750) 13,724


F.I.L.A. GROUP NET PROFIT/(LOSS) 10,633 9,227 1,255 988 (109) (8,750) 13,243





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Business Segments – Other Information

The “other complementary information” relating to investments made by F.I.L.A. Group

companies by region for the first half of 2016 and 2015 is reported below:

Euro thousands Europe North AmericaCentral -

South AmericaAsia

Rest of the

World

F.I.L.A.

Group

June 2016

OTHER INFORMATION

Investments

Intangible assets 94 207 301

Property, Plant and Equipment 1,866 71 503 1,519 1 3,960

TOTAL INVESTMENTS 1,960 71 503 1,726 1 4,261


Euro thousands Europe North AmericaCentral -

South AmericaAsia

Rest of the

World

F.I.L.A.

Group

June 2015

OTHER INFORMATION

Investments

Intangible assets 46 4 50

Property, Plant and Equipment 1,074 457 2,017 1,042 20 4,610

TOTAL INVESTMENTS 1,120 457 2,017 1,042 24 4,660







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Business seasonality

The Group’s operations are affected by business seasonality, as reflected also in the

consolidated results.

The breakdown of the income statement by quarter highlights the concentration of sales in the

second and third quarters for the “schools’ campaign”. Specifically, in June the major sales

are made through the “school suppliers” traditional channel and in August through the

“retailers” channel.

The key quarterly figures of 2015 are reported together with those for the first six months of

2016 below.

Euro thousands

First 3 mth.

2015

First 6 mth.

2015

First 9 mth.

2015FY 2015

First 3 mth.

2016

First 6 mth.

2016

First 3 mth.

2016LIKE-FO R-LIKE

CO N. SCO PE(1)

First 6 mth.

2016LIKE-FO R-LIKE

CO N. SCOPE(1)

Core Business Revenue 57,091 141,520 217,794 275,333 82,896 201,514 61,578 149,506Full year portion 20.74% 51.40% 79.10% 100.00% 100.00% 100.00% 100.00% 100.00%

EBITDA 8,273 25,973 37,936 41,780 10,143 31,222 7,945 25,590% core business revenue 14.49% 18.35% 17.42% 15.17% 12.24% 15.49% 12.90% 17.12%

Full year portion 19.80% 62.17% 90.80% 100.00% 100.00% 100.00% 100.00% 100.00%

EBIT 6,321 21,800 32,051 33,999 6,853 24,562 6,305 22,628% core business revenue 11.07% 15.40% 14.72% 12.35% 8.27% 12.19% 10.24% 15.14%


Normalised EBITDA 8,516 27,860 40,938 47,622 11,870 36,572 9,672 30,766% core business revenue 14.92% 19.69% 18.80% 17.30% 14.32% 18.15% 15.71% 20.58%


Group Net Profit/(loss) 3,827 (34,348) (28,230) (16,663) (288) 13,208 (210) 13,243% core business revenue 6.70% -24.27% -12.96% -6.05% -0.35% 6.55% -0.34% 8.86%

Full year portion -22.97% 206.14% 169.42% 100.00% 100.00% 100.00% 100.00% 100.00%

Net Financial Position (91,369) (55,632) (30,131) (38,744) (166,344) (188,895) NA NA

2015 2016 2016

( 1) First 3 mth. & First 6 mth. 2016 at like-for-like consolidation scope. Figures net of the contribution of the Daler-Rowney Lukas Group, Writefine Products Private Limited and

Pioneer Products Stationary Ltd


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Significant events in the first half of 2016

On January 4, 2016, the period for the exercise of the “F.I.L.A. S.p.A. Market Warrants”

concluded. Overall, 8,153,609 Market Warrants were exercised between December 1,

2015 and January 4, 2016 (“Deadline” as communicated by the Issuer on December 1,

2015) against the subscription of 2,201,454 ordinary shares. As established by paragraph

5.1 of the “F.I.L.A. S.p.A. Market Warrants” Regulation, the remaining 22,685

unexercised “F.I.L.A. S.p.A. Market Warrants” are cancelled and entirely invalid;

On February 3, 2016, F.I.L.A. S.p.A. acquired 100% of the entire share capital -

comprising “ordinary shares” and “preference shares” - of Renoir TopCo Ltd, the

holding company of the Daler-Rowney Lukas Group, from the private equity fund

Electra Partners LLP and the management team of Daler-Rowney Lukas.

The Daler-Rowney Lukas Group has produced and distributed since 1783 materials and

accessories for the art & craft sector. With a direct presence in the UK, the Dominican

Republic (production), Germany and the USA (distribution), Daler-Rowney Lukas

appeals to a wide consumer base and presents a perfectly complementary range to that of

F.I.L.A. S.p.A.. In the US, Daler-Rowney Lukas since 2009 has been the principal

supplier of art materials to Walmart.

The acquisition of the entire share capital of Renoir TopCo Ltd involved total

consideration of Euro 80.8 million, of which Euro 2.6 million as payment for the

“ordinary shares”, Euro 12.7 million as payment for the “preference shares” and Euro

65.5 million for redemption of the Loan Notes held by the sellers, in addition to the price

adjustment of Euro 0.3 million in March 2016, in accordance with the purchase contract.

The acquisition of the Daler-Rowney Lukas Group represents a further concrete step

towards FILA’s strengthening of its presence on the art & craft market, significantly

increasing distribution and commercial synergies with the colour and creative

instruments market, in line with F.I.L.A. S.p.A.'s acquisition-led growth strategy.

The integration with the Daler-Rowney Lukas Group is undertaken in fact to tap into

significant cost synergies - through optimising the production structure, the sales force

and overhead costs - in addition to revenue synergies through increasing the sales of the

Group’s products.


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The operation was entirely financed through a medium-term bank loan, issued in

February 2016, by Unicredit S.p.A., Intesa Sanpaolo S.p.A. and Mediobanca Banca di

Credito Finanziario S.p.A. for a total amount of Euro 130 million, which includes a

revolving line to cover any needs generated by Group working capital.

F.I.L.A. decided to neutralise interest rate movements on the loan of Euro 109.4 million,

undertaken for the acquisition of the Daler-Rowney Lukas Group, through the

undertaking of two interest rate swaps, both with effect from June 30, 2016 and maturity

coinciding with the loan (February 2, 2016). The IRS contracts were signed with the

same banks and establish for the swap of the Euribor at 3 months with a fixed rate of

0.01%. The margin paid on the variable rate is not subject to hedging.

Within the completion of the range of products, on August 1, 2015 Writefine Products

Limited (India) acquired 49% of the share capital of the Indian company Pioneer

Stationary Pvt Ltd. (India) for approx. Euro 290 thousand, specialised in the production,

marketing and distribution of stationary paper, prevalently on the domestic market.

On May 1, 2016, Writefine Products Limited (India) acquired an additional 2%, for a

value of approx. Euro 13 thousand. The non-controlling shareholders have the option to

sell to Writefine Products Limited (India) the remaining 49% between the third and

fourth year from the date of the contract; at the end of this period Writefine Products

Limited (India) will have the right to exercise an option to acquire this share capital. The

operation therefore resulted in the acquisition of a majority stake in Pioneer Stationery

Pvt Ltd, previously recognised as an associate, which from May 1, 2016 was

consolidated “line-by-line”.

On May 12, 2016, F.I.L.A. S.p.A. announced the presentation of a binding offer and the

undertaking of exclusive negotiations for the full acquisition of the Canson Group, held

by the French Group Hamelin. This project will be subject to a disclosure and

consultation process involving the main trade unions representing the workers of the

French companies.

The exclusive negotiations will continue until the end of 2016. F.I.L.A. expects the

agreements to be concluded in October 2016.


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The acquisition of the Canson Group, with a brand whose importance and distinction can

provide a key contribution to the growth of the F.I.L.A. Group in the coming years and

which marries perfectly with the Group’s range of products, will enable the F.I.L.A.

Group to become a major Art & Craft sector player.

Canson in fact is the most respected brand globally involved in the production and

distribution of high added value paper for the fine arts, design, leisure and schools, but

also for artists’ editions and technical and digital drawing materials. The Canson Group,

founded in 1557 by the Montgolfier family, has its headquarters in Annonay in France,

production facilities in France and conversion and distribution centres in Italy, France, the

USA, China, Australia and Brazil. Canson products are available in over 120 countries.

In 2015, Canson generated revenue of over Euro 100 million (+5.2% on 2014), relying on

a workforce numbering more than 450.


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Related party transactions

The transactions with related parties, including inter-company transactions, are not atypical

or unusual and fall within the ordinary business activities of the companies of the Group.

They are executed at ordinary market conditions. Information on transactions with related

parties in the period is reported in the Explanatory Notes to the Condensed Consolidated

Half-Year Financial Statements, to which reference should be made.


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Subsequent events

On July 1, 2016, the Indian subsidiary Writefine Products Limited (India) acquired 35% of

the Indian Uniwrite Pens and Plastics Pvt Ltd, for Rupee 20 million, a company specialised in

writing tools and in particular ballpoint pens.

Outlook

The Outlook is based on the latest forecasts available.

Despite the current economic uncertainty, in particular in the Eurozone, the Group expects in

the second half of 2016 to perform in line with the first half of the year, taking into account

the seasonality of the business.

Treasury shares

The parent F.I.L.A. S.p.A. did not hold treasury shares at June 30, 2016.

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CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL

STATEMENTSat JUNE 30, 2016

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36

Condensed Consolidated 2016 Half-Year Financial Statements

Consolidated Financial Statements

Condensed Consolidated Statement of Financial Position

Euro thousands June 30, 2016 December 31, 2015

ASSETS 562,357 384,450

Non-Current Assets 229,205 152,229

Intangible Assets Note 1 152,789 88,156

Property, Plant and Equipment Note 2 59,221 47,901

Non-Current Financial Assets Note 3 2,132 1,787

Investments Measured at Equity Note 4 0 322

Investments Measured at Cost Note 5 31 31

Deferred Tax Assets Note 6 15,032 14,032

Current Assets 333,152 232,221

Current Financial Assets Note 3 1,254 268

Current Tax Receivables Note 7 6,312 5,020

Inventories Note 8 157,155 118,519

Trade and Other Receivables Note 9 152,805 77,731

Cash and Cash Equivalents Note 10 15,626 30,683

Non-Current and Current Assets Held-for-Sale 0 0

LIABILITIES AND EQUITY 562,357 384,450

Equity Note 12 229,841 211,727

Share Capital 37,171 37,171

Reserves 35,304 80,828

Retained Earnings 120,767 86,424

Net Profit/(loss) for the period 13,208 (16,663)

Group Equity 206,450 187,760

Non-controlling interest equity 23,391 23,967

Non-Current Liabilities 138,224 27,421

Non-Current Financial Liabilities Note 13 99,795 1,510

Employee Benefits Note 14 6,133 5,352

Provisions for Risks and Charges Note 15 1,368 942

Deferred Tax Liabilities Note 16 30,829 19,485

Other Payables Note 19 99 132

Current Liabilities 194,292 145,302

Current Financial Liabilities Note 13 106,334 68,539

Financial Instruments Note 17 0 21,504

Provisions for Risks and Charges Note 15 978 434

Current Tax Payables Note 18 7,909 1,840

Trade and Other Payables Note 19 79,071 52,985

Non-Current and Current Assets Held-for-Sale 0 0

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Condensed Statement of Comprehensive Income

Euro thousands 1H 2016 1H 2015

Revenue from Sales and Service Note 20 201,514 141,520

Other Revenue and Income Note 21 4,765 3,001

TOTAL REVENUE 206,279 144,521

Raw Materials, Ancillary, Consumables and Goods Note 22 (102,297) (72,850)

Services and Rent, Leases and Similar Costs Note 23 (48,239) (33,020)

Other Operating Costs Note 24 (5,692) (3,088)

Change in Raw Materials, Semi-Finished, Work-in-progress and Finished Products Note 22 18,526 17,889

Labour Costs Note 25 (37,355) (27,479)

Amortisation & Depreciation Note 26 (6,504) (3,617)

Write-downs Note 27 (156) (556)

TOTAL OPERATING COSTS (181,717) (122,721)

EBIT 24,562 21,800

Financial Income Note 28 1,983 630

Financial Charges Note 29 (3,965) (49,345)

Income/Charges from Investments at Equity Note 31 0 475

NET FINANCIAL INCOME/(CHARGES) (1,982) (48,240)

PRE-TAX PROFIT/(LOSS) 22,580 (26,440)

Income Taxes (7,976) (6,603)

Deferred Tax Income and Charges (662) (1,119)

TOTAL INCOME TAXES Note 32 (8,638) (7,722)

NET PROFIT/(LOSS) - CONTINUING OPERATIONS 13,942 (34,162)

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS 0 (120)

NET PROFIT/(LOSS) FOR THE PERIOD 13,942 (34,282)

Attributable to:

Profit attributable to non-controlling interests 734 66

Profit/(loss) attributable to shareholders of the parent 13,208 (34,348)

Other Comprehensive Income Items which may be reclassified subsequently in the P&L account(11,983) 3,691

Translation Difference recorded in Equity (11,983) 3,691

Other Comprehensive Income Items which may not be reclassified subsequently in the P&L account(1,179) 136

Actuarial Gains/(Losses) for Employee Benefits recorded directly to Equity (1,404) 133

Income Taxes on income and charges recorded directly to Equity 225 3

OTHER COMPREHENSIVE INCOME ITEMS (net of tax effect) (13,162) 3,827

Attributable to:

Profit/(loss) attributable to non-controlling interests (178) 86

Profit/(loss) attributable to shareholders of the parent 958 (30,521)


basic 0.32 (1.15)

diluted 0.32 (1.15)

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Statement of Changes in Equity

Euro thousands

Share capital Legal Reserve

Share

premium

reserve

IAS 19

Reserve

Other

Reserves

Translation

Difference

Retained

Earnings

Group

Profit/(loss)Group Equity

Non-

Controlling

Interest

Capital &

Reserves

Non-

Controlling

Interest

Profit/Loss

Non-

Controlling

Interest

Equity

Total Equity

December 31, 2015 37,171 0 109,879 (1,361) (27,311) (379) 86,424 (16,663) 187,760 23,704 263 23,967 211,727

Net Profit 13,208 13,208 734 734 13,942

Other changes in the period 4,503 (1,156) (11,095) 16,941 9,193 (744) (744) 8,449

Gains/(losses) recorded directly to equity 0 0 4,503 (1,156) 0 (11,095) 16,941 13,208 22,401 (744) 734 (10) 22,391

Allocation of the 2015 result (16,663) 16,663 0 263 (263) 0 0

Allocation to reserves 7,434 (49,033) 3,823 37,776 0 0 0

Dividends (3,711) (3,711) (566) (566) (4,277)

June 30, 2016 37,171 7,434 65,349 (2,517) (23,488) (11,474) 120,767 13,208 206,450 22,657 734 23,391 229,841

Euro thousands

Share capital Legal Reserve

Share

premium

reserve

IAS 19

Reserve

Other

Reserves

Translation

Difference

Retained

Earnings

Group

Profit/(loss)Group Equity

Non-

Controlling

Interest

Capital &

Reserves

Non-

Controlling

Interest

Profit/Loss

Non-

Controlling

Interest

Equity

Total Equity

December 31, 2014 2,748 608 0 (1,368) 11,154 (1,756) 82,572 16,575 110,532 1,405 30 1,435 111,968

Share capital increase 23,616 23,616 0 23,616

F.I.L.A. S.p.A.- Space S.p.A. Merger effect 10,807 (608) 94,125 (23,079) (13,237) 68,008 0 68,008

Net Profit/(loss) (34,348) (34,348) 66 66 (34,282)

Other changes in the period 136 3,691 3,827 (45) (45) 3,782

Gains/(losses) recorded directly to equity 34,423 (608) 94,125 136 (23,079) 3,691 (13,237) (34,348) 61,103 (45) 66 21 61,124

Allocation of the 2014 result 16,575 (16,575) 0 30 (30) 0 0

June 30, 2015 37,171 0 94,125 (1,232) (11,925) 1,935 85,910 (34,348) 171,635 1,390 66 1,456 173,092

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39

Condensed Consolidated Statement of Cash Flow

Euro thousands June 2016 June 2015

EBIT 24,562 21,800

adjustments for non-cash items: 7,351 4,488

Amortisation & Depreciation Note 1 - 2 6,504 3,617

Write-down and Recovery in Value Note 1 - 2 8 4

Doubtful Debt Provision Note 9 149 552

Exch. effect on Assets and Liabilities in Foreign Curr. of Commercial Transactions Note 24 704 318

Gain/Loss on Fixed Asset Disposals Note 21 - 24 (14) (3)

integrations for: (3,913) (6,870)

Income Taxes Paid Note 7 - 18 (3,262) (6,496)

Unrealised Exchange Differences on Assets and Liabilities in Foreign Currencies Note 28 - 29 1,963 344

Realised Exchange Differences on Assets and Liabilities in Foreign Currencies Note 28 - 29 (2,614) (718)

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN NET

WORKING CAPITAL28,000 19,418

Changes in Net Working Capital: (66,366) (73,593)

Change in Inventories Note 8 (19,215) (17,723)

Change in Trade and Other Receivables Note 9 (62,000) (57,273)

Change in Trade and Other Payables Note 19 15,323 1,868

Change in Other Assets/Liabilities Note 15 - 16 - 6 (1,194) (450)

Change in Post-Employment and Employee Benefits Note 14 719 (15)

CASH FLOW FROM OPERATING ACTIVITIES (38,366) (54,175)

Total Investment/Divestment in Intangible Assets Note 1 (301) (50)

Total Investment/Divestment in Property, Plant and Equipment Note 2 (3,960) (4,610)

Cash Flow from Non-Current Assets & Liabilities Held-for-Sale 0 171

Total Investment/Divestment in Other Financial Assets Note 3 (585) (90)

Acquisition of investment in Daler & Rowney Lucas Group (16,875) 0

Acquisition of investment in Pioneer Stationary Pvt Ltd (13) 0

Interest Received 110 162

CASH FLOW FROM INVESTING ACTIVITIES (21,623) (4,416)

Total Change in Equity Note 12 (4,277) (64)

Interest Paid Note 29 (2,357) (1,787)

Total Increase/Decrease Loans and Other Financial Liabilities Note 13 128,718 (13,531)

CASH FLOW FROM FINANCING ACTIVITIES 122,083 (15,382)

Translation difference Note 12 (11,984) 3,699

Other non-cash equity changes 11,469 (2,497)

NET CASH FLOW IN THE PERIOD 61,579 (72,770)

Cash and Cash Equivalents net of Bank Overdrafts at beginning of the period 17,542 30,663

Cash and Cash Equivalents net of Bank Overdrafts at beginning of the period (change in

consolidation scope) (87,227) 93,333

CASH AND CASH EQUIVALENTS NET OF BANK OVERDRAFTS AT END OF THE

PERIOD(8,105) 51,226

1) Cash and cash equivalents in 1H 2016 totalled Euro 15,626 thousand; current account overdrafts amounted to Euro

23,731 thousand net of relative interest.

2) Cash and cash equivalents at June 30, 2015 totalled Euro 59,842 thousand; current account overdrafts amounted to

Euro 8,615 thousand net of relative interest.

3) The cash flows are presented using the indirect method. In order to provide a more complete and accurate presentation

of the individual cash flows, the effects from non-cash operations were eliminated (including the conversion of

statement of financial position items in currencies other than the Euro), where significant. These effects were

aggregated and included in the account “Other non-cash changes”.

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Euro thousands June 2016 December 2015

OPENING CASH AND CASH EQUIVALENTS 17,542 30,663

Cash and cash equivalents 30,683 32,473

Bank overdrafts (13,141) (1,810)

CLOSING CASH AND CASH EQUIVALENTS (8,105) 17,542

Cash and cash equivalents 15,626 30,683

Bank overdrafts (23,731) (13,141)

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Statement of financial position pursuant to CONSOB motion No. 15519 of

July 27, 2006

Euro thousandsJune 30, 2016

of which related

partiesDecember 31, 2015

of which related

parties

ASSETS 562,357 0 384,450 0

Non-Current Assets 229,205 0 152,229 0

Intangible Assets 152,789 88,156

Property, Plant and Equipment 59,221 47,901

Non-Current Financial Assets 2,132 1,787

Investments Measured at Equity 0 322

Investments Measured at Cost 31 31

Deferred Tax Assets 15,032 14,032

Current Assets 333,152 0 232,221 0

Current Financial Assets 1,254 268

Current Tax Receivables 6,312 5,020

Inventories 157,155 118,519

Trade and Other Receivables 152,805 77,731

Cash and Cash Equivalents 15,626 30,683

Non-Current and Current Assets Held-for-Sale 0 0 0 0

LIABILITIES AND EQUITY 562,357 703 384,450 637

Equity 229,841 211,727 0

Share Capital 37,171 37,171

Reserves 35,304 80,828

Retained Earnings 120,767 86,424

Net Profit/(loss) for the period 13,208 (16,663)

Group Equity 206,450 187,760

Non-controlling interest equity 23,391 23,967

Non-Current Liabilities 138,224 27,421 0

Non-Current Financial Liabilities 99,795 1,510

Employee Benefits 6,133 5,352

Provisions for Risks and Charges 1,368 942

Deferred Tax Liabilities 30,829 19,485

Other Payables 99 132

Current Liabilities 194,292 703 145,302 637

Current Financial Liabilities 106,334 68,539

Financial Instruments 0 21,504

Provisions for Risks and Charges 978 434

Current Tax Payables 7,909 1,840

Trade and Other Payables 79,071 703 52,985 637

Non-Current and Current Assets Held-for-Sale 0 0 0 0

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Statement of comprehensive income pursuant to CONSOB motion No.

15519 of July 27, 2006

Euro thousands

1H 2016of which related

parties

of which non-

recurring charges1H 2015

of which related

parties

of which non-

recurring charges

Revenue from Sales and Service 201,514 141,520

Other Revenue and Income 4,765 3,001

TOTAL REVENUE 206,279 144,521

Raw Materials, Ancillary, Consumables and Goods (102,297) (854) (72,850) (655)

Services and Rent, Leases and Similar Costs (48,239) (252) (4,905) (33,020) (399) (1,843)

Other Operating Costs (5,692) (426) (3,088)

Change in Raw Materials, Semi-Finished, Work-in-progress and Finished Products 18,526 17,889

Labour Costs (37,355) (19) (27,479) (44)

Amortisation & Depreciation (6,504) (3,617)

Write-downs (156) (556)

TOTAL OPERATING COSTS (181,717) (122,721)

EBIT 24,562 21,800

Financial Income 1,983 810 630 1

Financial Charges (3,965) (528) (49,345) (106) (46,658)

Income/Charges from Investments at Equity 0 475

NET FINANCIAL INCOME/(CHARGES) (1,982) (48,240)

PRE-TAX PROFIT/(LOSS) 22,580 (26,440)

Income Taxes (7,976) (6,603)

Deferred Tax Income and Charges (662) (1,119)

TOTAL INCOME TAXES (8,638) (7,722)

NET PROFIT/(LOSS) - CONTINUING OPERATIONS 13,942 (34,162)

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS 0 (120)

NET PROFIT/(LOSS) FOR THE PERIOD 13,942 (34,282)

Attributable to:

Profit attributable to non-controlling interests 734 66

Profit/(loss) attributable to shareholders of the parent 13,208 (34,348)

Other Comprehensive Income Items which may be reclassified subsequently in the P&L account(11,983) 3,691

Translation Difference recorded in Equity (11,983) 3,691

Other Comprehensive Income Items which may not be reclassified subsequently in the P&L account(1,179) 136

Actuarial Gains/(Losses) for Employee Benefits recorded directly to Equity (1,404) 133

Income Taxes on income and charges recorded directly to Equity 225 3

OTHER COMPREHENSIVE INCOME ITEMS (net of tax effect) (13,162) 3,827

Attributable to:

Profit/(loss) attributable to non-controlling interests (178) 86

Profit/(loss) attributable to shareholders of the parent 958 (30,521)

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Explanatory Notes

General principles

The Condensed Consolidated 2016 Half-Year Financial Statements of the F.I.L.A. Group

were prepared in accordance with IAS 34 Interim Reporting, as established also by Article

154-ter of the Consolidated Finance Act (Legislative Decree No. 58/1998) and should be read

together with the F.I.L.A. Group 2015 Annual Consolidated Financial Statements. Although

not presenting all the information required for complete financial statement disclosure,

specific explanatory notes are included outlining the events and transactions central to

understanding the changes to the statement of financial position and the F.I.L.A. Group’s

performance since the last financial statements.

The IFRS were applied consistently for all the periods presented in the present document.

These Condensed Consolidated 2016 Half-Year Financial Statements of the F.I.L.A. Group

were authorised for publication by the Board of Directors on August 4, 2016.

They are presented in Euro, as the functional currency in which the Group operates and

comprise the Condensed Consolidated Statement of Financial Position, in which assets and

liabilities are classified as current and non-current, the Condensed Statement of

Comprehensive Income, the Condensed Consolidated Statement of Cash Flows (according to

the indirect method), the Condensed Consolidated Statement of Changes in Equity, the

Explanatory Notes and are accompanied by the Directors’ Report. All amounts reported in

the Condensed Statement of Financial Position, the Condensed Statement of Comprehensive

Income, the Condensed Consolidated Statement of Cash Flows, the Condensed Consolidated

Statement of Changes in Equity and in the Explanatory Notes are expressed in thousands of

Euro, except where otherwise stated.

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Accounting standards

These Condensed Consolidated Half-Year Financial Statements were prepared according to

the same accounting standards used for the preparation of the F.I.L.A. Group 2015

Consolidated Annual Financial Statements.

We report below the accounting standards, amendments and interpretations issued by the

IASB and endorsed by the European Union entering into force from January 1, 2016:

Amendments to IAS 19 - Defined benefit plans: employee contributions

The amendment, issued by the IASB in November 2013, introduces simplifications for the

accounting of defined benefit plans. In particular, the amendments to IAS 19 enable the

recognition of employee or third party contributions as a reduction of service costs in the

period in which the services are rendered, where the contributions are:

- formally established under the plan conditions;

- related to the services provided; and

- independent from the number of years of service.

In all other cases, the recognition of these contributions will be more complex, as they must

be attributed to the individual periods of the plan through the actuarial calculation of the

relative liability. For the IASB, the amendments entered into force from financial statements

beginning or subsequent to July 1, 2014. For the European Union, the entry into force was

postponed to financial statements beginning or subsequent to February 1, 2015

Improvements to IFRS: 2010-2012 Cycle

On December 12, 2013, the IASB published the “Annual Improvements to IFRS’s: 2010-

2012 Cycle” document, which includes the amendments to the standards within the annual

improvement process. For the IASB, the amendments entered into force from financial

statements beginning or subsequent to July 1, 2014. For the European Union, the entry into

force was postponed to financial statements beginning or subsequent to February 1, 2015.

The application of these amendments is prospective.

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The principal changes relate to:

• IFRS 2 Share-based payments - The definition of “vesting conditions” was clarified and

the concepts of “performance conditions” and “service conditions” were defined

separately.

• IFRS 3 Business combinations - The amendments clarify that a contingent consideration

classified as an asset or as a liability must be measured at fair value at each reporting date,

whether the contingent consideration is a financial instrument in application of IAS 39 or

a non-financial asset or liability. The changes in the fair value must be recognised to the

profit/(loss) for the period.

• IFRS 8 Operating Segments - The amendments require an entity to provide disclosure on

the evaluations made by Management in the application of the operating segment

aggregation, including a description of the aggregated operating segments and of the

economic indicators considered in determining whether these operating segments have

“similar economic characteristics”. The amendments also clarify that the reconciliation

between the total assets of the operating segments and the total assets of the entity must

be presented only if the total assets of the operating segments are regularly reviewed by

the Chief Operating Decision-Maker (“CODM”).

• IFRS 13 Fair Value Measurement - The Basis for Conclusions were modified in order to

clarify that with the issue of IFRS 13 current trade receivables and payables may be

recorded without recording the effects of discounting, where these effects are not

significant.

• IAS 16 Property, Plant and Equipment and IAS 38 Intangible assets - The amendments

eliminated inconsistencies concerning the recording of accumulated amortisation and

depreciation in the case in which the restatement criterion is applied. The new

requirements clarify that the gross carrying amount is adjusted consistently with the

revaluation of the carrying amount of the asset and that the depreciation or amortisation

provision is equal to the difference between the gross carrying amount and the carrying

amount, less the impairments recorded.

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• IAS 24 Related party disclosures - with the amendment to IAS 24, the IASB:

- extended the definition of “related party” to entities providing within the group key

management personnel;

- clarified that entities preparing the financial statements should indicate the amount of

expenses incurred for the provision of key management services, without the

obligation to breakdown the fees paid or due by the “management entity” to their

directors or employees, as would be required by IAS 24.

Amendment to IFRS 11 Joint Arrangements

The amendments, published by the IASB in May 2014, provide clarification on the

accounting treatment of the acquisition of investments under joint control which constitute a

business.

Amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible assets

The amendments published by the IASB in May 2014 clarify that revenue-based methods to

calculate depreciation are not permitted as revenues generated from an activity which

includes the utilisation of an asset generally reflect the benefits which the asset itself is

capable of generating and not the consumption of such benefits. IASB also clarified that

revenues generally are not considered an adequate basis to measure the consumption of the

economic benefits generated from an intangible asset. However this presumption may not be

applicable in certain limited circumstances.

Amendments to IAS 16 and IAS 41 Agriculture: Bearer plants

The amendments, published by the IASB in June 2014, require that bearer plants, therefore

plants creating annual harvests, must be recognised according to IAS 16 – Property, plant and

equipment, rather than IAS 41 – Agriculture.

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Improvements to IFRS: 2012-2014 cycle

In September 2014, the IASB published the “Annual Improvements to IFRS’s: 2012-2014

Cycle”, which includes the amendments to the standards within the annual improvement

process.


• IFRS 5 Non-current Assets Held-for-Sale and Discontinued Operations - The amendment

introduces specific guidelines to IFRS 5 in the case in which an entity reclassifies an asset

(or a disposal group) from the held-for-sale category to the held-for-distribution category

(or vice versa), or where the requirements to classify an asset as held-for-distribution are

no longer present.

• IAS 19 Employee Benefits - The amendment to IAS 19 clarifies that high quality corporate

bonds utilised to calculate the discount rate of post-employment benefits should be in the

same currency as that utilised for the payment of the benefits.

• IAS 34 Interim Reporting - The amendment clarifies the requirements where the

disclosure is presented in the interim financial report, but outside of the interim financial

statements. The amendment requires that this disclosure is included through a cross-

reference from the interim financial statements to other parts of the interim financial

report and that this document is made available to readers of the financial statements in

the same manner and according to the same timelines as the interim financial statements.

• IFRS 7 Financial Instruments: additional disclosure - The IASB clarified that an entity

has a residual involvement in the financial assets transferred and fully eliminated where it

continues to have a right to the payments for the service to be provided on these assets

and this payment is variable according to the future yield of the assets themselves. The

IASB clarified that the obligation to provide supplementary disclosure for the “offsetting”

of financial assets and liabilities is required only for annual financial statements. In

interim reports, supplementary disclosure is however only provided where considered

necessary to understand changes in the financial position and the performance of an entity

in comparison to its latest annual financial statements.

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Amendment to IAS 1 Disclosure Initiative

The amendments to IAS 1, published in December 2014, are applied from periods beginning

January 1, 2016 or subsequently. Earlier application is permitted.


- significance and aggregation of information:

- aggregation/de-aggregation of accounts;

- other items of the statement of comprehensive income;

- order of the explanatory notes;

- partial results in the financial statements.

Amendment to IAS 27 Separate Financial Statements

The amendments to IAS 27, published in August 2014, allow entities to use the equity

method to measure investments in subsidiaries, joint ventures and associates in the separate

financial statements.

Accounting standards, amendments and interpretations not yet approved by the EU

and applicable from January 1, 2016

IFRS 14 Regulatory Deferral Accounts

IFRS 14, issued by the IASB in January 2014 permits only those adopting IFRS for the first

time to continue to recognise amounts concerning Rate Regulation Activities according to the

previous accounting standards adopted. In order to improve comparability with entities which

already apply IFRS and who do not recognise these amounts, the standard requires that

amounts recognised for rate regulation be presented separately from the other accounts.

Currently the approval process by the European Union is suspended.

IFRS 15 Revenue from Contracts with Customers

The standard, issued by the IASB in May 2014, introduces a framework which establishes

whether, when and to what extent revenue will be recognised. IFRS 15 is applicable from

January 1, 2017; advanced application is permitted. On first application, IFRS 15 must be

applied retroactively. A number of simplifications are however permitted (“practical

expedients”), in addition to an alternative approach (“cumulative effect approach”) which

avoids the restatement of periods presented for comparative disclosure; in this latter case, the

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effects from the application of the new standard must be recognised to the initial equity of the

period of first application of IFRS 15. The F.I.L.A. Group is assessing the potential effects

from application of IFRS 15 on the consolidated financial statements.

IFRS 9 – Financial instruments

The standard, issued by the IASB in July 2014, replaces IAS 39 – Financial Instruments:

Recognition and Measurement. IFRS 9 introduces new provisions for the classification and

measurement of financial instruments, including a new model for expected losses from

impairments on financial assets, and new general provisions for the accounting of hedging.

In addition, the standard includes provisions for the recognition and accounting elimination

of financial instruments in line with the current IAS 39. The new standard is applicable from

January 1, 2018 and advance adoption is permitted. IFRS 9 indicates as a general rule that

application should take place prospectively, although a number of exceptions are permitted.

Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in

Associates and Joint Ventures.

The standard issued by the IASB in September 2014 includes amendments which eliminate

an inconsistency in the treatment of the sale or conferment of assets between an investor and

its associate or joint venture. The main consequence of the amendments is that a profit or

loss is fully recognised when the transaction refers to a business. The IASB, with a further

amendment in December 2015, cancelled the previous first application date planned for

January 1, 2016 to be determined at a future date.

Amendments to IFRS 10, IFRS 12 and IAS 28 – Investment companies: exceptions to the

consolidation method

The amendments, published in December 2014, are applied retrospectively from periods

beginning January 1, 2016 or subsequently. Earlier application is permitted.


- IFRS 10 Consolidated Financial Statements – The amendments to IFRS clarify that

the exemption from the presentation of consolidated financial statements applies to a

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parent in turn controlled by an investment company, when the investment entity

measures all its subsidiaries at fair value.

- IAS 28 Investments in Associates – The amendment to IAS 28 permits a company

which is not an investment company and that has an investment in an investment

company valued at equity, to maintain the fair value applied by the investment

company for its interest in subsidiaries.

- IFRS 12 Disclosure on investments in other entities – the amendment to IFRS 12

clarifies that this standard is not applicable to investment companies who prepare their

financial statements measuring all subsidiaries at fair value through the income

statement.

IFRS 16 – Leases

The standard, published by the IASB in January 2016, proposes substantial changes to the

accounting treatment of leasing agreements in the lessee’s financial statements, which must

recognise the assets and liabilities deriving from contracts, without distinction between

operating and financial leases, in the statement of financial position.

The IASB expects that the standard will be applied for years commencing from January 1,

2019. Advance application is permitted for entities applying IFRS 15 Revenue from

Contracts with Customers.

Amendment to IAS 12 - Recognition of deferred tax assets for unrealised losses

The amendment issued by the IASB in January 2016 clarifies the recognition of deferred tax

assets on debt instruments measured at fair value. The amendments will be applied from

periods beginning January 1, 2017. Earlier application is permitted.

Amendment to IAS 7 - Statement of Cash Flows: Disclosure Initiative

The amendment provides clarifications to improve disclosure on financial liabilities. In

particular, an entity should provide disclosure which enables the reader of the financial

statements to understand the changes to liabilities (and any related assets) recorded to the

statement of financial position, whose cash flows are or in the future will be recognised to the

statement of cash flows as cash flows from financing activities. The amendments are

effective from January 1, 2017, although advance application is permitted. The presentation

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of comparative disclosure relating to preceding periods is not required.

Amendment to IFRS 2 - Classification and Measurement of Share-based Payment Transactions

In June 2016, the IASB published the amendments to IFRS 2 Classification and Measurement

of Share-based Payment Transactions, which clarify the recognition of some types of share-

based payment transactions.

These changes will be applied from January 1, 2018. Earlier application is however

permitted.

The Group will adopt these new standards, amendments and interpretations, according to the

application date and will evaluate the potential impacts, where they have been approved by

the European Union.

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Exchange rates adopted for conversion

The exchange rates adopted for the conversion of local currencies into Euro are as follows

(source: Official Italian Exchange Rates):

Currency Average Exchange Rate

1H 2016

Closing Exchange Rate

30-06-2016

Argentinean Peso 15.9896 16.5802

Canadian Dollar 1.4854 1.4384

Chilean Peso 769.2615 735.5000

Renminbi Yuan 7.2937 7.3755

Euro 1.0000 1.0000

Pound 0.7785 0.8265

Mexican Peso 20.1599 20.6347

US Dollar 1.1155 1.1102

Indonesian Rupiah 14,962.4500 14,601.7000

Swedish Krona 9.3015 9.4242

Singapore Dollar 1.5402 1.4957

Turkish Lira 3.2588 3.2060

Brazilian Real 4.1349 3.5898

Indian Rupee 74.9776 74.9603

Russian Ruble 78.4122 71.5200

South Africa Rand 17.2037 16.4461

Polish Zloty 4.3686 4.4362

Source: Bank of Italy

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Note 1 - Intangible Assets

Intangible assets at June 30, 2016 amount to Euro 152,789 thousand (Euro 88,156 thousand

at December 31, 2015) and are comprised for Euro 45,780 thousand of indefinite intangible

assets – goodwill (“Note 1.B - Intangible Assets with indefinite useful lives) and for Euro

107,009 thousand finite intangible assets (“Note 1.C – Intangible Assets with Finite Useful

Lives”).

The decrease in the period is principally due to amortisation, partially offset by the

conversion of the items in foreign currencies.

Euro thousands

Goodwill

Industrial Patents and

Intellectual Property

Rights

Concessions,

Licenses, Trademarks

& Similar Rights

Other Intangible

AssetsAssets in Progress Total Amount

Change in Historical Cost

December 31, 2015 42,212 183 42,826 18,429 0 103,650

Increases in the period 3,645 1 40,326 30,784 0 74,756

Increases (Investments) 3,645 1 62 238 0 3,946of which Change in Consolidation Scope 0 0 0 0 0 0

Change in consolidation scope - Contribution at operation date 0 0 40,264 30,546 0 70,810

Decreases in the period (77) 0 (4,465) (3,302) 0 (7,844)

Decrease Translation Differences (77) 0 (4,465) (3,302) 0 (7,844)

June 30, 2016 45,780 184 78,687 45,911 0 170,562

Change in Amortisation

December 31, 2015 (124) (12,422) (2,947) (15,494)

Increases in the period (6) (1,852) (799) (2,657)

Amortisation in Period (6) (1,833) (798) (2,637)of which Change in Consolidation Scope 0 (542) (415) (957)

Change in consolidation scope - Contribution at operation date 0 (19) (1) (20)

Decreases in the period 0 342 36 378

Decrease Translation Differences 0 342 36 378

June 30, 2016 (130) (13,932) (3,710) (17,773)

Net Carrying Amount at December 31, 2015 42,212 59 30,404 15,482 0 88,156

Net Carrying Amount at June 30, 2016 45,780 54 64,755 42,201 0 152,789

Change in period 3,568 (5) 34,351 26,719 0 64,633

Note 1.A - INTANGIBLE ASSETS

The increase in the net carrying amount of intangible assets at June 30, 2016 amounted to

Euro 64,633 thousand and principally related to the effects of the change in the consolidation

scope with the acquisition of the Daler-Rowney Lukas Group on February 3, 2016 and the

Indian company Pioneer Stationery P. Ltd, acquired through the Indian subsidiary Writefine


For further information on the accounting effects of the business combination, reference

should be made to the section “Business Combinations”.

“Intangible assets with indefinite useful lives” comprise entirely of goodwill for a total

amount of Euro 45,780 thousand (Euro 42,212 thousand at December 31, 2015). The increase

in the period amounts to Euro 3,568 thousand and concerns for Euro 3,520 thousand the

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acquisition of the Daler-Rowney Lukas Group and for Euro 125 thousand Pioneer Stationery

P. Ltd.. The overall change includes in addition currency impacts of Euro 77 thousand.

Goodwill is not amortised but subject to an impairment test whenever facts or circumstances

arise which may give rise to a risk of impairment.

In accordance with the provisions of IAS 36, the goodwill is allocated to the various cash-

generating units or CGU’s and at least on an annual basis subject to recoverability analysis

through an impairment test.

The goodwill allocated to the CGU’s are reported below:

Euro thousandsJune 30, 2016 December 31, 2015 Change in period Translation differences

Change in Consolidation

Scope

Writefine Products Private Limited (India) 33,285 33,290 (5) (5) 0

Dixon Group - Central/South America(1)

1,967 1,998 (31) (31) 0

Dixon Group - North America(2)

2,188 2,229 (41) (41) 0

Industria Maimeri S.p.A. (Italy) 1,695 1,695 0 0 0

Omyacolor S.A. (France) 1,611 1,611 0 0 0

Lyra Group(3)

1,217 1,217 0 0 0

FILA Cartorama SA PTY LTD (South Africa) 101 101 0 0 0

Licyn Mercantil Industrial Ltda (Brazil) 71 71 0 0 0

Daler & Rowney Group(4)

3,520 0 3,520 0 3,520

Pioneer Stationary Pvt Ltd (India) 125 0 125 0 125

Total amount 45,780 42,212 3,568 (77) 3,645

(1) - Grupo F.I.L.A. Dixon, S.A. de C.V. (Mexico); F.I.L.A. Chile Ltda (Chile); FILA Argentina S.A. (Argentina)

(2) - Dixon Ticonderoga Company (U.S.A.); Dixon Ticonderoga Inc. (Canada)

(3) - Johann Froescheis Lyra Bleistift-Fabrik GmbH & Co. KG (Germany); Lyra Scandinavia AB (Sweden); PT. Lyra Akrelux (Indonesia)

(4) - Goodwill recognised by Topco Renoir Ltd (United Kingdom), parent of the Daler & Rowney Group

NOTE 1.B GOODWILL BY CASH GENERATING UNIT

The Group carried out impairment tests on goodwill at least on an annual basis or more

frequently when there is an indication of a loss in value.

No potential impairments of goodwill were reported at June 30, 2016 due to the strong results

recorded in the first half of the year and on the basis of the medium-term outlook. Therefore,

no specific impairment test on the account was carried out on the preparation of the

condensed consolidated half-year financial statements.

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The movements at June 30, 2016 of “Intangible Assets with Finite Useful Lives” are reported

below.

Euro thousands

Industrial Patents and

Intellectual Property

Rights

Concessions,

Licenses, Trademarks

& Similar Rights

Other Intangible

AssetsAssets in Progress Total Amount


December 31, 2015 183 42,826 18,429 0 61,439

Increases in the period 1 40,326 30,784 0 71,111

Increases (Investments) 1 62 238 0 301

of which Change in Consolidation Scope 0 0 0 0 0

Change in Consolidation Scope (contribution at operation date) 0 40,264 30,546 0 70,810

Decreases in the period 0 (4,465) (3,302) 0 (7,767)

Decrease Translation Differences 0 (4,465) (3,302) 0 (7,767)

June 30, 2016 184 78,687 45,911 0 124,783

Change in Amortisation

December 31, 2015 (124) (12,422) (2,947) (15,494)

Increases in the period (6) (1,852) (799) (2,657)

Amortisation in Period (6) (1,833) (798) (2,637)

of which Change in Consolidation Scope 0 (542) (415) (957)

Change in Consolidation Scope (contribution at operation date) 0 (19) (1) (20)

Decreases in the period 0 342 36 377

Decrease Translation Differences 0 342 36 377

June 30, 2016 (130) (13,932) (3,710) (17,774)

Net Carrying Amount at December 31, 2015 59 30,404 15,482 0 45,944

Net Carrying Amount at June 30, 2016 54 64,755 42,201 0 107,009

Change in period (5) 34,351 26,719 0 61,066

Note 1.C - INTANGIBLE ASSETS WITH FINITE USEFUL LIVES

“Industrial Patents and Intellectual Property Rights” amount to Euro 54 thousand at June 30,

2016 (Euro 59 thousand at December 31, 2015).

The average residual useful life of the “Industrial Patents and Intellectual Property Rights”,

recorded in the financial statements of June 30, 2016, is 6 years.

“Concessions, Licences, Trademarks and Similar Rights” amount to Euro 64,755 thousand at

June 30, 2016 (Euro 30,404 thousand at December 31, 2015).

The increase on the previous year is Euro 34,351 thousand and is principally due to the

consolidation of the Daler-Rowney Lukas Group with a total contribution at February 3,

2016, net of the relative accumulated amortisation provision, of Euro 40,245 thousand. This

amount principally comprises the valuation under the “purchase price allocation” method of

the trademarks held by the English Group.

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Amortisation in 1H 2016 amounted to Euro 1,833 thousand, of which Euro 542 thousand

relating to the companies of the Daler-Rowney Lukas Group and represents the amount

recorded between February 3, 2016 and June 30, 2016.

The other historic trademarks subject to amortisation refer principally to “Lapimex” held by

F.I.L.A.-Dixon, S.A. de C.V. (Mexico) and the trademarks “Lyra” held by Lyra KG

(Germany) and “DOMS” held by Writefine Products Private Limited (India).

The average useful life of the “Concessions, Licenses, Trademarks and Similar Rights”,

recorded in the financial statements at June 30, 2016, is 30 years.

“Other Intangible Assets” amount to Euro 42,201 thousand at June 30, 2016 (Euro 15,482

thousand at December 31, 2015). The increase on the previous year is Euro 26,719 thousand

and is principally due to the change in the consolidation scope with a net carrying amount

contributed at February 3, 2016 of Euro 30,545 thousand; this amount concerns the “Know-

How” of the Daler-Rowney Lukas Group, identified as a strategic asset of the company

through the “purchase price allocation”.

Amortisation in the period amounts to Euro 798 thousand, of which Euro 415 thousand

concerning the English Group between February 3, 2016 and June 30, 2016.

The average useful life of “Other Intangible Assets”, recorded in the financial assets at June

30, 2016, is 13 years.

In the first half of 2016, the F.I.L.A. Group did not generate any intangible assets internally.

There are no intangible assets subject to restrictions.

Note 2 - Property, plant and equipment

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At June 30, 2016, “Property, Plant and Equipment” amounted to Euro 59,221 thousand (Euro

47,901 thousand at December 31, 2015). The movements in the period are shown below:

Euro thousands Land BuildingsPlant and

Machinery

Industrial and

Commercial

Equipment

Other Assets Assets in Progress Total Amount


December 31, 2015 8,165 30,119 51,951 9,828 7,332 1,336 108,732

Increases in the period 4,563 4,428 16,437 6,365 1,457 236 33,487

Increases (Investments) 0 72 2,205 218 330 1,139 3,964of which Change in Consolidation Scope 0 16 568 126 159 0 869

Capitalisation from Assets in Progress 0 265 688 17 207 (1,178) 0of which Change in Consolidation Scope 0 0 241 0 0 (241) 0

Change in consolidation scope - Contribution at operation date 4,563 4,091 13,544 6,130 920 275 29,523

Decreases in the period (554) (938) (2,444) (290) (202) (45) (4,473)

Decreases (Divestments) 0 0 (26) (37) (10) 0 (73)

Write-downs 0 0 (5) 0 (2) 0 (7)

Decrease Translation Differences (554) (938) (2,413) (253) (190) (45) (4,393)

June 30, 2016 12,174 33,609 65,944 15,903 8,587 1,527 137,746

Change in period 4,009 3,490 13,993 6,075 1,255 191 29,014

Change in Depreciation

December 31, 2015 (15,045) (31,034) (8,909) (5,842) (60,831)

Increases in the period (1,352) (12,351) (5,229) (829) (19,760)

Depreciation in Period (561) (2,288) (602) (417) (3,868)of which Change in Consolidation Scope (66) (407) (292) (80) (845)

Change in consolidation scope - Contribution at operation date (791) (10,063) (4,627) (412) (15,893)

Decreases in the period 209 1,448 260 150 2,067

Decreases (Divestments) 0 26 37 6 69

Decrease Translation Differences 209 1,422 223 144 1,998

June 30, 2016 (16,188) (41,937) (13,878) (6,521) (78,525)

Net Carrying Amount at December 31, 2015 8,165 15,074 20,917 919 1,490 1,336 47,901

Net Carrying Amount at June 30, 2016 12,174 17,422 24,007 2,025 2,065 1,527 59,221

Change in period 4,009 2,348 3,090 1,106 575 191 11,320

Note 2.A - PROPERTY, PLANT AND EQUIPMENT

“Land” at June 30, 2016, amounts to Euro 12,174 thousand (Euro 8,165 thousand at

December 31, 2015) and includes the land relating to the buildings and production facilities

owned by the company F.I.L.A. S.p.A. (Rufina Scopeti – Italy), by the subsidiary Lyra KG

(Germany) and by Writefine Products Private Limited (India). Following the acquisition of

control of the Daler-Rowney Lukas Group, Euro 4,563 thousand concerning land belonging

to companies of the English Group was contributed to the consolidation.

“Buildings” at June 30, 2016 amount to Euro 17,422 thousand (Euro 15,074 thousand at

December 31, 2015) and principally relate to the production plant buildings in Italy, Mexico,

Germany, England, France and India. The increase on December 31, 2015 was Euro 2,348

thousand and is mainly due to the accounting effects of the consolidation of the Daler-

Rowney Lukas Group (net carrying amount contribution at February 3, 2016 of Euro 2,834

Amortisation in 1H 2016 amounted to Euro 1,833 thousand, of which Euro 542 thousand

relating to the companies of the Daler-Rowney Lukas Group and represents the amount

recorded between February 3, 2016 and June 30, 2016.

The other historic trademarks subject to amortisation refer principally to “Lapimex” held by

F.I.L.A.-Dixon, S.A. de C.V. (Mexico) and the trademarks “Lyra” held by Lyra KG

(Germany) and “DOMS” held by Writefine Products Private Limited (India).

The average useful life of the “Concessions, Licenses, Trademarks and Similar Rights”,

recorded in the financial statements at June 30, 2016, is 30 years.

“Other Intangible Assets” amount to Euro 42,201 thousand at June 30, 2016 (Euro 15,482

thousand at December 31, 2015). The increase on the previous year is Euro 26,719 thousand

and is principally due to the change in the consolidation scope with a net carrying amount

contributed at February 3, 2016 of Euro 30,545 thousand; this amount concerns the “Know-

How” of the Daler-Rowney Lukas Group, identified as a strategic asset of the company

through the “purchase price allocation”.

Amortisation in the period amounts to Euro 798 thousand, of which Euro 415 thousand

concerning the English Group between February 3, 2016 and June 30, 2016.

The average useful life of “Other Intangible Assets”, recorded in the financial assets at June

30, 2016, is 13 years.

In the first half of 2016, the F.I.L.A. Group did not generate any intangible assets internally.

There are no intangible assets subject to restrictions.

Note 2 - Property, plant and equipment

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thousand) and of Pioneer Stationery P. Ltd (India - net carrying amount contribution of Euro

465 thousand).

Group investments in the period amounted to Euro 72 thousand and concern Dixon, S.A. de

C.V. (Mexico) for Euro 56 thousand and Brideshore Srl (Dominican Republic) for Euro 16

thousand.

The change due to the entry into use of assets classified as assets in progress amounts to Euro

265 thousand, of which Euro 243 thousand concerning the Indian subsidiary Writefine


Group depreciation totalled Euro 561 thousand, of which Euro 66 thousand concerning the

companies acquired in the period.

“Plant and Machinery” amounted to Euro 24,007 thousand (Euro 20,917 thousand at

December 31, 2015). The increase on the previous year of Euro 3,090 thousand principally

concerns the accounting effects from the consolidation of the companies of the Daler-

Rowney Lukas Group (net carrying amount of Euro 3,433 thousand) and of Pioneer

Stationery P. Ltd (net carrying amount of Euro 48 thousand).

Investments in the period amounted to Euro 2,205 thousand, mainly concerning Writefine

Products Private Limited (Euro 854 thousand) and acquired for the development of the Indian

subsidiary’s production complex. Other investments related to the parent F.I.L.A. S.p.a. for

Euro 427 thousand, in particular for the extension of the production line at the Rufina facility,

and Daler Rowney Ltd (United Kingdom) for Euro 462 thousand invested post-acquisition.

The increase due to the entry into use of assets in progress was Euro 688 thousand,

principally relating to Pioneer Stationery Private Ltd for Euro 241 thousand and to FILA

Dixon Stationery (Kunshan) Co. Ltd. (China) for Euro 210 thousand.

Investment in new plant and machinery seeks to drive the efficiency of the current production

capacity through upgrading and expanding the current “assets”.

Depreciation in the period totalled Euro 2,288 thousand, of which Euro 407 thousand at the

new companies within the consolidation scope (Daler Rowney Ltd for Euro 326 thousand,

Brideshore Srl for Euro 65 thousand, Lukas-Nerchau GmbH for Euro 10 thousand and

Pioneer Stationery P. Ltd for Euro 6 thousand).

The currency effect was negative for Euro 991 thousand.

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“Industrial and Commercial Equipment” amounted to Euro 2,025 thousand at June 30, 2016

(Euro 919 thousand at December 31, 2015). The increase of Euro 1,106 thousand is due in

particular to the change in the consolidation scope, with the contribution on February 3, 2016

of a net carrying amount of Euro 1,503 thousand by the companies of the Daler-Rowney

Lukas Group.

Investments amounted to Euro 218 thousand, particularly concerning Daler Rowney Ltd

(United Kingdom) for Euro 75 thousand, Daler Rowney USA for Euro 50 thousand and

F.I.L.A. S.p.A. for Euro 48 thousand.

Depreciation was Euro 602 thousand, of which Euro 292 thousand concerning the portion

matured by the companies acquired in the period included from the acquisition date and at

June 30, 2016.

“Other Assets” amount to Euro 2,065 thousand at June 30, 2016 (Euro 1,490 thousand at

December 31, 2015) and include furniture and office equipment, EDP and motor vehicles.

The increase principally concerns the effect from the change in the consolidation scope with a

contribution at the acquisition date of Euro 509 thousand, of which Euro 501 thousand

concerning the companies of the Daler-Rowney Lukas Group and Euro 8 thousand relating to

Pioneer Stationery Private Ltd. The investments mainly concern F.I.L.A. S.p.A. for Euro 68

thousand, the subsidiary Omyacolor (France) for Euro 41 thousand and the companies of the

Daler-Rowney Lukas Group (Daler Rowney Ltd Euro 78 thousand, Brideshore Euro 42

thousand and Lukas-Nerchau GmbH Euro 38 thousand). Depreciation amounted to Euro 417

thousand of which Euro 80 thousand related to the companies entering the consolidation

scope.

“Assets in Progress” include internal constructions undertaken by the individual companies

of the Group which are not yet operational. The increase in the net carrying amount at June

30, 2016 (Euro 191 thousand) compared to 2015 is due both to the effect from the change in

the consolidation scope (Euro 275 thousand) and the net value between investments made

and assets completed and entering into use (Euro 39 thousand).

There is no property, plant and equipment subject to restrictions.

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Note 3 – Financial Assets

“Financial Assets” amount to Euro 3,386 thousand at June 30, 2016 (Euro 2,055 thousand at

December 31, 2015).

The composition of the account at June 30, 2016 was as follows:

Euro thousands

Loans and

Receivables

Other Financial

AssetsTotal Amount

December 31, 2015 354 1,701 2,055

non-current portion 354 1,433 1,787

current portion 0 268 268

June 30, 2016 355 3,031 3,386

non-current portion 355 1,777 2,132

current portion 0 1,254 1,254

Change in period 1 1,330 1,331

non-current portion 1 344 345

current portion 0 986 986

Note 3.A - FINANCIAL ASSETS

“Financial Assets - non-current portion” at June 30, 2016 amount to Euro 2,132 thousand

(Euro 1,787 thousand at December 31, 2015) and mainly relate to deposits paid to third

parties as services and goods contract guarantees and financial investments made by the

subsidiary Dixon Ticonderoga Company (U.S.A.) concerning the indemnities to be paid to

personnel, not directly attributable and therefore not considered “plan assets” for the purposes

of IAS 19.

“Financial assets - current portion” amount to Euro 1,254 thousand, increasing Euro 986

thousand on December 31, 2015. This is principally due to the acquisition of the Daler-

Rowney Group which, through the company Daler Rowney Ltd (United Kingdom),

contributed accessory banking service guarantee deposits for a total amount of Euro 899

thousand.

The carrying amount approximates the “fair value” of these assets at the reporting date.

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Reference should be made to Note 11 concerning the net financial position at June 30, 2016

of the F.I.L.A. Group.

Note 4 - Investments Measured at Equity

Investments measured at Equity amounted to Euro 0 thousand (Euro 322 thousand at

December 31, 2016). The decrease is due to the acquisition by Writefine Products Limited

(India) of an additional 2% of the equity of Pioneer Stationery Pvt Ltd, resulting in an

increase to the holding from 49% at December 31, 2015 to 51% at May 1, 2016. The

operation therefore resulted in the acquisition of a majority stake in Pioneer Stationery Pvt

Ltd, previously recognised as an associate, which from May 2016 was consolidated “line-by-

line”.

Note 5 - Investments Measured at Cost

The Investments measured at cost, amounting to Euro 31 thousand, relate to the shareholding

in Maimeri S.p.A. by F.I.L.A. S.p.A. for a value of Euro 28 thousand, corresponding to 1% of

the share capital, and the quota held in the consortiums Conai, Energia Elettrica Zona

Mugello and Energia Elettrica Milano by F.I.L.A. S.p.A. at June 30, 2016.

Note 6 - Deferred Tax Assets

“Deferred Tax Assets” amount to Euro 15,032 thousand at June 30, 2016 (Euro 14,032

thousand at December 31, 2015).

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Note 6.A - CHANGES IN DEFERRED TAX ASSETS

Euro thousands

December 31, 2015 14,032

Provisions 3,364

of which Amount in Period from Change in Consolidation Scope 440

Utilisations (4,432)

of which Amount in Period from Change in Consolidation Scope (247)

Change in Consolidation Scope (contribution at operation date) 2,259

Translation differences (359)

Change in Equity 168

June 30, 2016 15,032

Change in period 1,000

The account at June 30, 2016 mainly includes deferred tax assets calculated on “Intangible

Assets”, “Personnel”, “Risk and Charges Provisions not deductible” as well as on other

differences between statutory and fiscal values.

The movement in deferred tax assets in the first half of 2016 particularly concerned the

parent F.I.L.A. S.p.A. and Dixon Ticonderoga Company (U.S.A.).

Corporate operations in the period resulted in increased deferred tax assets for a total of Euro

2,259 thousand.

The deferred tax assets were recognised by each company of the Group evaluating the

projected future recovery of these assets, presently considered very probable, on the basis of

updated strategic plans and relative tax planning.

Note 7 - Current Tax Receivables

At June 30, 2016, tax receivables relating to corporation tax totalling Euro 6,312 thousand

(Euro 5,020 thousand at December 31, 2015), mainly comprised Euro 1,814 thousand relating

to the parent F.I.L.A. S.p.A., Euro 1,736 thousand to Dixon Ticonderoga Co. (U.S.A.), Euro

1,632 thousand to Writefine Private Products Limited (India) and Euro 580 thousand to

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Grupo F.I.L.A.- Dixon, S.A. de C.V. (Mexico). These amounts principally relate to payments

on account.

Note 8 - Inventories

Inventories at June 30, 2016 amount to Euro 157,155 thousand (Euro 118,519 thousand at

December 31, 2015).

The breakdown of inventories is reported below.

Euro thousands

Raw Materials,

Ancillary and

Consumables

Work-in-progress &

Semi-fin. Products

Finished Products and

GoodsTotal Amount

December 31, 2015 33,439 13,229 71,851 118,519

June 30, 2016 39,952 15,888 101,315 157,155

Change in period 6,513 2,659 29,464 38,635

Note 8.A - INVENTORIES

Inventories at June 30, 2016 amounted to Euro 157,155, of which Euro 26,492 concerning the

companies of the Daler-Rowney Lukas Group consolidated at February 3, 2016 and Euro 197

thousand concerning Pioneer Stationery Private Ltd consolidated from May 1, 2016.

Excluding the increase from the change to the consolidation scope, inventories totalled Euro

130,466 thousand, increasing Euro 11,947 thousand at December 31, 2015.

Inventories at June 30, 2016 are shown net of the obsolescence provision relating to raw

materials (Euro 1,481 thousand), work-in-progress (Euro 80 thousand) and finished products

(Euro 1,945 thousand). The provisions refer to obsolete or slow moving materials for which it

is not considered possible to recover their value through sale.

The changes in the inventory obsolescence provision in the year were as follows:

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Note 8.B- CHANGE IN INVENTORY OBSOLESCENCE PROVISION

Euro thousands

Raw Materials, Ancillary

and Consumables

Work-in-progress and

Semi-finished Products

Finished Products and

Goods

December 31, 2015 866 108 1,907 2,880

Provisions 122 25 421 568

Utilisations (48) (59) (672) (779)

Release 0 0 0 0

Change in consolidation scope - Contribution at operation date 543 6 292 841

Translation differences (2) 0 (3) (5)

June 30, 2016 1,481 80 1,945 3,505

Change in period 616 (28) 38 625

Inventory Obsolescence Provision

Total Amount

The movement in the period principally concerns the altered consolidation scope with a total

contribution by the Daler-Rowney Lukas Group companies of Euro 841 thousand.

Note 9 – Trade and Other Receivables

Trade and other receivables amount to Euro 152,805 thousand, increasing Euro 75,074

thousand on December 31, 2015, due to the combined effect of business seasonality and the

change in the consolidation scope with the acquisition of the Daler-Rowney Lukas Group.

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The breakdown is illustrated below.

Euro thousands

30-06-2016 31-12-2015 Change in period

Trade Receivables 142,755 69,598 73,157

Tax Receivables 3,535 3,375 160

Other Receivables 3,889 3,838 51

Prepayments and Accrued Income 2,625 920 1,705

Total amount 152,805 77,731 75,074

Note 9.A - TRADE AND OTHER RECEIVABLES

Trade receivables increased on June 30, 2016 by Euro 73,157 thousand. This is mainly due to

the corporate operations in the first half of 2016; the trade receivables of the companies

acquired total Euro 14,737 thousand, of which Euro 14,622 thousand concerning the Daler-

Rowney Lukas Group and Euro 115 thousand the Indian company Pioneer Stationery Private

Ltd.

Excluding the effect of the changes in the consolidation scope and considering the impact of

the negative currency differences for Euro 3,019 thousand, total receivables increased by

Euro 61,438 thousand. This is due to business seasonality and improved revenues.

All of the above receivables are due within 12 months.

The changes in the doubtful debt provision and the relative breakdown to cover difficult

recovery positions are illustrated in the table below.

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Euro thousands

December 31, 2015 3,966

Provisions 371of which Amount in Period from Change in Consolidation Scope 38

Utilisations (137)of which Amount in Period from Change in Consolidation Scope 0

Release (223)

Effect Increase in Consolidation Scope 493

Exchange Differences (62)

June 30, 2016 4,409

Change in period 443

Note 9.B - CHANGES IN DOUBTFUL DEBT PROVISION

Doubtful Debt Provision

The principal movement in the doubtful debt provision is due to the change in the

consolidation scope, with the contribution to the consolidated financial statements from

February 3, 2016 of a total amount of Euro 493 thousand.

“Tax Receivables” includes V.A.T. and other local tax receivables other than corporation

taxes.

Current tax receivables amount to Euro 3,535 thousand at June 30, 2016 (Euro 3,375


“Other Receivables” includes personnel and social security receivables and payments on

account to suppliers. At June 30, 2016 the account amounts to Euro 3,889 thousand (Euro

3,838 thousand at December 31, 2015). The carrying amount of “Other Receivables”

represents the “fair value” at the reporting date.

All of the above receivables are due within 12 months.

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Note 10 - Cash and Cash Equivalents

“Cash and Cash Equivalents” at June 30, 2016 amount to Euro 15,626 thousand (Euro 30,683


The breakdown and comparison with the previous year is illustrated in the table below.

Euro thousands

Bank and Post Office

DepositsCash in hand and similar Total Amount

December 31, 2015 30,551 132 30,683

June 30, 2016 15,496 130 15,626

Change in period (15,055) (2) (15,057)

Note 10 - CASH AND CASH EQUIVALENTS

“Bank and Postal Deposits” comprise temporary liquidity generated within the treasury

management and relate to the ordinary current accounts of F.I.L.A. S.p.A. for Euro 1,864

thousand and the bank current accounts of the foreign subsidiaries of Euro 13,632 thousand,

mainly relating to the Spanish subsidiary (Euro 1,604 thousand), Writefine Products Private

Limited (Euro 1,414 thousand), the Chinese subsidiaries (Euro 1,175 thousand) and Daler

Rowney Ltd (Euro 1,062 thousand).

“Cash and Cash on hand” amounts to Euro 130 thousand, of which Euro 55 thousand

concerning the Indian subsidiary.

The carrying amount approximates the “Fair Value” at the reporting date.

Bank and post office deposits are remunerated at rates indexed to inter-bank rates such as

Libor and Euribor.

There are no bank and postal deposits subject to restrictions.

Reference should be made to the paragraph: “Statement of Financial Position” for comments

relating to the Net Financial Position of the F.I.L.A. Group.

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Note 11 - Net Financial Position

The F.I.L.A. Group Net Financial Position at June 30, 2016 is as follows:


A Cash 130 132 (2)

B Other cash equivalents 15,496 30,551 (15,055)

C Securities held-for-trading 0 0 0

D Liquidity ( A + B + C) 15,626 30,683 (15,057)

E Current financial receivables 1,254 268 986

F Current bank payables (93,794) (67,319) (26,475)

G Current portion of non-current debt (10,311) (715) (9,596)

H Other current financial payables (2,229) (505) (1,724)

I Current financial debt ( F + G + H ) (106,334) (68,539) (37,795)

J Net current financial debt (I + E+ D) (89,454) (37,588) (51,866)

K Non-current bank payables (99,614) (1,404) (98,210)

L Bonds issued 0 0 0

M Other non-current payables (182) (106) (76)

N Non-current financial debt ( K + L + M ) (99,796) (1,510) (98,286)

O Net financial debt (J+N) (189,250) (39,098) (150,152)

P Loans issued to third parties 355 354 1

Q Net financial debt (O + P) - F.I.L.A. Group (188,895) (38,744) (150,151)

Note:

3) At June 30, 2016 there were no transactions with related parties which impacted the net financial debt.

1) The net financial debt calculated at point “O” complies with Consob Communication DEM/6064293 of July 28, 2006, which excludes non-

current financial assets. The net financial debt of the F.I.L.A. Group differs from the above communication by Euro 355 thousand in relation to the

non-current loans granted to third parties by F.I.L.A. S.p.A. (Euro 350 thousand) and Omyacolor S.A. (Euro 5 thousand)

2) The Market Warrants recognised to the financial statements at December 31, 2015 of Euro 21,504 thousand are not considered an integral part

of the net financial debt as cashless financial instruments.

The F.I.L.A. Group “Net Financial Position” at June 30, 2016 was a net debt of Euro 188,895

thousand, increasing on Euro 150,151 thousand at December 31, 2015.

Reference should be made to the paragraph: “Statement of Financial Position” for comments

relating to the Net Financial Position of the F.I.L.A. Group.

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Note 12 - Share Capital and Equity

Share capital

The share capital, fully-paid in, comprises 41,232,296 ordinary shares:

- 34,665,788 ordinary shares, without nominal value;

- 6,566,508 class B shares, without nominal value, which attribute 3 votes exercisable

at the Shareholders’ Meeting (ordinary and extraordinary) of F.I.L.A. S.p.A..

The breakdown of the share capital of F.I.L.A. S.p.A. is illustrated below.

Shares No. of Shares% of Share

CapitalListing

Ordinary shares 34,665,788 84.07% MTA - STAR Segment

Class B Shares (multiple votes) 6,566,508 15.93% Non-listed

According to the available information, published by Consob and updated to June 30, 2016,

the main parent shareholders were:

Shareholders Ordinary shares %

Pencil S.p.A. 13,133,032 37.9%

Venice European Investment Capital

S.p.A.3,916,291 11.3%

Sponsor 2,300,000 6.6%

Market Investors 15,316,465 44.2%

Total 34,665,788 100%

Shareholder Ordinary shares Class B Shares Total Voting rights

Pencil S.p.A. 13,133,032 6,566,508 19,699,540 47.8%

Venice European Investment Capital

S.p.A.3,916,291 3,916,291 9.5%

Sponsor 2,300,000 2,300,000 5.6%

Market Investors 15,316,465 15,316,465 37.1%

Total 34,665,788 6,566,508 41,232,296 100%

Each ordinary share attributes voting rights without limitations.

Each class B share attributes three votes, in accordance with Article 127-sexies of Legislative

Decree No. 58/1998.

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There are no restrictions on the distribution of dividends and the repayment of capital.

At June 30, 2016, there were restrictions on the totality of shares held by the parent F.I.L.A.

S.p.A., directly or indirectly in Renoir Topco Limited (United Kingdom), Renoir Bidco

Limited (United Kingdom), Renoir Midco Limited (United Kingdom) and Daler-Rowney

Limited (United Kingdom), in guarantee of the bank loan in place at June 30, 2016.

Legal Reserve

The account at June 30, 2016 amounts to Euro 7,434 thousand, following reconstitution in

2016 to reach one-fifth of the share capital in accordance with statutory rules (Article 2431 of

the Civil Code) and in execution of the Shareholders’ Meeting motion approving the financial

statements of the parent F.I.L.A. S.p.A. of April 29, 2016.

Share premium reserve

The account at June 30, 2016 amounts to Euro 65,349 thousand (Euro 109,879 thousand at

December 31, 2015), decreasing Euro 44,530 thousand.

The decrease relates to the following events:

the utilisation of part of the reserve for Euro 41,599 thousand in coverage of the 2015

loss (Euro 41,086 thousand) and in coverage of the residual losses for years preceding

2015 (Euro 513 thousand) of the parent F.I.L.A. S.p.A., as per Shareholders’ Meeting

motion of April 29, 2016;

the utilisation of part of the reserve against the full constitution of the legal reserve for

Euro 7,434 thousand, as per Shareholders’ Meeting motion of April 29, 2016;

the restoration of the market warrants reserve contributed by the company Space

S.p.A. in 2014, representing the fair value of market warrants at the date of initial

recognition (Euro 4,503 thousand). This restoration follows the conclusion of the

market warrant exercise period with their effective exercise by January 4, 2016.

We highlight in addition the restriction on the distribution of a portion of the share premium

reserve related to the revaluation of the investment held in the company Writefine Products

PVT Ltd (Euro 15,052 thousand), in accordance with Article 6, paragraph 1, letter a) of

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Legislative Decree No. 38 of February 28, 2015, following the purchase of the majority

shareholding and recorded under financial income in 2015.

Market Warrants

On January 4, 2016, the period for the exercise of the “F.I.L.A. S.p.A. Market Warrants”

concluded. Overall, 8,153,609 Market Warrants were exercised between December 1, 2015

and January 4, 2016 (“Deadline” as communicated by the Issuer on December 1, 2015)

against the subscription of 2,201,454 ordinary shares. As established by paragraph 5.1 of the

“F.I.L.A. S.p.A. Market Warrants” Regulation, the remaining 22,685 unexercised “F.I.L.A.

S.p.A. Market Warrants” are cancelled and entirely invalid.

Sponsor warrants

At June 30, 2016 no sponsor warrants had been exercised.

IAS 19 Reserve

The account at June 30, 2016 amounts to Euro 2,517 thousand (Euro 1,361 thousand at

December 31, 2015), with a decrease in the period of Euro 1,404 thousand, as well as an

increase of Euro 225 thousand relating to deferred tax liabilities recognised directly to equity

following application of IAS 19.

Other Reserves

The account at June 30, 2016 amounted to Euro 23,488 thousand, including the amount

reclassified from “Retained earnings/(accumulated losses)” of Euro 3,823 thousand for

correct allocation and presentation.

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Translation Difference

The account refers to the exchange differences relating to the translation of the financial

statements of subsidiaries prepared in local currencies and converted into Euro as the

consolidation currency.

The changes in the “Translation Difference” in 1H 2016 are illustrated below:

Euro thousands Translation Difference

December 31, 2015 (379)

Changes in the period:

Difference between Period Average Rate and Period-End Rate 172

Difference between Historical Rate and Period-End Rate (11,267)

June 30, 2016 (11,474)

Change in period (11,095)

Retained earnings/(accumulated losses)

The movement in the reserve totalled Euro 34,343 thousand and principally concerned:

the allocation of the Share Premium Reserve of Euro 37,776 thousand, in coverage of

prior losses as per Shareholders’ Meeting motion of April 29, 2016;

the restoration of the market warrants reserve contributed by the company Space

S.p.A. in 2014, representing the fair value of market warrants at the date of initial

recognition (Euro 16,941 thousand). This restoration follows the conclusion of the

market warrant exercise period with their effective exercise by January 4, 2016;

the distribution of dividends to F.I.L.A. S.p.A. shareholders for Euro 3,711 thousand,

as per Shareholders’ Meeting motion of April 29, 2016;

the carrying forward of the loss for 2015 for Euro 16,633 thousand;

the reclassification to “Other Reserves” of Euro 3,823 thousand, for the correct

presentation and allocation of “Retained earnings/(accumulated losses)”.

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Non-controlling interest equity

Non-controlling interest equity decreased Euro 576 thousand, principally due to the currency

effect, mainly on the Indian Rupee, for Euro 744 thousand and to the distribution of

dividends to non-controlling interests of the Indian and Scandinavian subsidiaries for a total

of Euro 566 thousand, offset by the non-controlling interest profit of Euro 734 thousand.

Basic and diluted earnings per share

The basic earnings per share is calculated by dividing the result of the Group by the weighted

average number of ordinary shares outstanding during the year, excluding any treasury shares

in portfolio.

The diluted earnings/(loss) per share is calculated by dividing the result of the company by

the weighted average number of ordinary shares in circulation during the year and those

potentially arising from the conversion of all potential ordinary shares with dilutive effect.

The table below illustrates the reconciliation between the equity of the Parent F.I.L.A. S.p.A.

and the consolidated equity and the reconciliation between the result of the Parent F.I.L.A.

S.p.A. and the consolidated result:

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Euro thousands

F.I.L.A. S.p.A. Equity 155,929

Effect elimination intercompany margins (2,598)

Consolidation effect Omyacolor S.A. (France) 8,506

Consolidation effect F.I.L.A. Hispania S.A. (Spain) 3,644

Consolidation effect Licyn Mercantil Industrial Ltda (Brazil) (3,581)

Consolidation effect Dixon Ticonderoga group 59,488

Consolidation effect Lyra group (171)

Consolidation effect FILA Stationary and Office Equipment Industry Ltd. Co. (Turkey) (1,550)

Consolidation effect FILA Stationary O.O.O. (Russia) (896)

Consolidation effect FILA Hellas (Greece) 772

Consolidation effect Industria Maimeri S.p.A. (Italy) 338

Consolidation effect FILA Cartorama S.A. (South Africa) (1,063)

Consolidation effect Fila Polska Sp. Z.o.o (Poland) 90

Consolidation effect Writefine Private Limited (India) 19,877

Consolidation effect Daler & Rowney group (9,094)

Consolidation effect Pioneer Stationary Pvt Ltd (India) 149

Total Equity 229,841

“Non-controlling interest” consolidation effect 23,391

F.I.L.A. Group Equity 206,450

Reconciliation at June 30, 2016 between Parent Equity and F.I.L.A. Group Equity

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Euro thousands

F.I.L.A. S.p.A. Net Profit/(loss) (6,975)

Result of Subsidiaries of the Parent (16,383)

Elimination of the effects of transactions between consolidated companies:

Dividends (7,084)

Inventory margins 1,102

Adjustments to Group accounting standards:

Consolidation Daler & Rowney Group - IFRS 3 1,208

Consolidation Pioneer Stationary Pvt Ltd (India) - IFRS 3 22

Total Net Result (13,942)

Non-controlling interest share (734)

F.I.L.A. Group Net Profit/(loss) (13,208)

Reconciliation at June 30, 2016 between Parent Result and F.I.L.A. Group Result

Note 13 - Financial Liabilities

The balance at June 30, 2016 amounts to Euro 206,129 thousand (Euro 70,049 thousand at

December 31, 2015), of which Euro 99,795 thousand long-term and Euro 106,334 thousand

short-term.

The account refers to both non-current and current portions of the loans granted by banking

institutions, other lenders and bank overdrafts.

The breakdown at June 30, 2016 is illustrated below.

Banks Other Lenders Bank Overdrafts

Euro thousands Principal Interest Principal Interest Principal Interest

December 31, 2015 56,168 99 607 4 13,141 30 70,049

non-current portion 1,404 0 106 0 0 0 1,510

current portion 54,764 99 501 4 13,141 30 68,539

June 30, 2016 181,032 (1,081) 2,410 1 23,731 36 206,129

non-current portion 100,822 (1,208) 181 0 0 0 99,795

current portion 80,210 127 2,229 1 23,731 36 106,334

Change in period 124,864 (1,180) 1,803 (3) 10,590 6 136,080

non-current portion 99,418 (1,208) 75 0 0 0 98,285

current portion 25,446 28 1,728 (3) 10,590 6 37,795

Note 13.A - FINANCIAL LIABILITIES: Third Parties

Total

Amount

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With reference to the “Bank Loans” the total exposure of the Group amounts to Euro 179,951

thousand, of which Euro 80,337 thousand considered as current (Euro 54,863 thousand at

December 31, 2015) and Euro 99,614 thousand as non-current (Euro 1,404 thousand at

December 31, 2015).

The medium/long-term portion of bank loans increased on 2015 Euro 98,210 thousand,

principally following the issue of a loan to the parent F.I.L.A. S.p.A. by a banking syndicate

comprising Unicredit S.p.A. as “Global coordinator - Mandated Lead Arranger”, Intesa

Sanpaolo S.p.A. – Banca IMI and Mediobanca Banca di Credito Finanziario S.p.A. as

“Mandated Lead Arranger”.

The loan was disbursed in February 2016 for Euro 109,357 thousand, against the total

granting of Euro 130,000 thousand, including a “Revolving Credit Facility” of Euro 10,000

thousand in support of the acquisition of the Daler-Rowney Lukas Group (for further details,

reference should be made to the 2016 Half-Year Report - Significant events in the first half of

2016).

The loan stipulates a Euribor at 3 months interest rate, plus a spread of 1.5% (“Facility A”

credit line), with quarterly calculation of interest. The spread applied will be subject to

changes based on compliance with the covenants established for the loan.

The repayment plan establishes for settlement by February 2, 2021 (“Termination Date”)

through half-yearly capital instalments to be repaid from September 30, 2016.

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The repayment plan is as follows:

Maturity Repayment

Euro thousands

September 30, 2016 4,374

March 31, 2017 5,468

September 30, 2017 6,561

March 31, 2018 7,655

September 30, 2018 8,749

March 31, 2019 12,029

September 30, 2019 14,216

March 31, 2020 16,404

September 30, 2020 16,404

Termination Date 17,497

Total 109,357

The above financial liabilities are initially recognised at Fair Value, including directly

attributable transaction costs. The initial carrying amount is subsequently adjusted to account

for redemptions in principal, any write-downs and amortisation of the difference between the

redemption value and initial carrying amount. Amortisation is made on the basis of the

internal effective interest rate represented by the rate equal to, at the moment of initial

recognition, the present value of expected cash flows and the initial carrying amount

(amortised cost method). The effect at June 30, 2016 of the amortised cost method was Euro

152 thousand of interest.

The current portion of the bank loans increased Euro 25,474 thousand.

This is principally due to the current portion of the loan, described previously, issued to the

parent F.I.L.A. S.p.A. totalling Euro 9,842 thousand, in addition to the increase in the credit

lines granted to Grupo F.I.L.A.-Dixon, S.A. de C.V (Mexico) for Euro 13,321 thousand, Lyra

KG for Euro 5,735 thousand and Dixon Ticonderoga Company (U.S.A.) for Euro 3,777

thousand, offset by repayments by Writefine Products PVT Ltd. (India) for Euro 2,223

thousand and FILA Dixon Stationery (Kunshan) Co. Ltd. (China) for Euro 850 thousand.

We highlight in addition the change from the positive translation difference on loans

undertaken in foreign currencies of Euro 2,659 thousand.

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A number of the loans include covenants, whose violation is considered as non-fulfilment and

which, if not settled, may result in a request for the immediate return of the sums received.

Covenants

The F.I.L.A. Group, against the debt undertaken with leading credit institutions (Unicredit,

Mediobanca, Intesa Sanpaolo and Banca Nazionale del Lavoro) for the acquisition of the

Daler-Rowney Lukas Group, is subject to commitments and “covenants”.

The covenants are verified half-yearly and annually. In particular, the covenants on the loan

contracts concern: Net Financial Debt (NFD), EBITDA (“Earnings Before Interest, Tax,

Depreciation and Amortisation”) and Net Financial Charges (NFC), calculated on the

F.I.L.A. Group half-year and annual consolidated financial statements prepared as per IFRS.

The criteria for the calculation of the NFD, the EBITDA and the NFC are established by the

relative loan contract.

We report below the covenant indicators and the relative parameters to be complied with at

June 30, 2016.

NFD / EBITDA < 4x

EBITDA / NFC > 5x

The covenants at June 30, 2016 had been fully complied with.

As required by Consob Communication No. DEM/6064293 of 28/07/2006, we report that the

impact of non-compliance with the covenants as established by the underlying contracts

essentially concerns the possibility that the lending banks may revoke the loan contract

and/or declare forfeiture of the repayment conditions upon all or part of the loans.

“Financial Liabilities – Other Loans” at June 30, 2016 totalled Euro 2,411 thousand (Euro

611 thousand at December 31, 2015), with the current portion totalling Euro 2,230 thousand

at June 30, 2016 (Euro 505 thousand at December 31, 2015).

The amount principally includes financial liabilities to other lenders of F.I.L.A. S.p.A.

concerning the factoring company (Ifitalia - International Factors S.p.A. - Euro 1,335

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thousand) against advances from the company, in addition to the change in the consolidation

scope related to Pioneer Stationery Private Ltd (India) for Euro 476 thousand.

“Bank Overdrafts”, in terms of the current portion, amounted to Euro 23,731 thousand (Euro

13,141 thousand at December 31, 2015) and refer to the Parent F.I.L.A. S.p.A.. (Euro 19,023

thousand) and to the company Industria Maimeri S.p.A. (Italy - Euro 4,120 thousand),

Note 14 - Employee Benefits

The F.I.L.A. Group companies guarantee post-employment benefits for employees, both

directly and through contributions to external funds.

The means for accruing these benefits varies according to the legal, fiscal and economic

conditions of each State in which the Group operates. These benefits are based on

remuneration and years of employee service.

The benefits recognised to employees of the Parent F.I.L.A. S.p.A. concern salary-based

Post-Employment Benefits, governed by Italian legislation and in particular Article 2120 of

the Italian Civil Code. The amount of these benefits is in line with the contractually-

established compensation agreed between the parties on hiring.

The other Group companies, particularly Omyacolor S.A. (France), Dixon Ticonderoga

Company (U.S.A.) and Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico), guarantee post-

employment benefits, both through defined contribution plans and defined benefit plans.

In the case of defined contribution plans, the Group companies pay the contributions to

public or private insurance institutions based on legal or contractual obligations, or on a

voluntary basis. With the payment of contributions the companies fulfill all of their

obligations. The cost is accrued based on employment rendered and is recorded under labour

costs.

The defined benefit plans may be unfunded, or they may be partially or fully funded by the

contributions paid by the company, and sometimes by its employees to a company or fund,

legally separate from the company which provides the benefits to the employees. The funds

provide for a fixed contribution by the employees and a variable contribution by the

employer, necessary to at least satisfy the funding requirements established by law and

regulation in the individual countries.

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Finally, the Group recognises to employees other long-term benefits, generally issued on the

reaching of a fixed number of years of service or in the case of invalidity. In this instance,

the value of the obligation recognised to the financial statements reflects the probability that

the payment will be issued and the duration for which payment will be made. The value of

these funds are calculated on an actuarial basis, utilising the “projected unit credit” method.

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The amounts at June 30, 2016 were as follows:

Note 14.A -POST-EMPLOYMENT BENEFITS ITALY (“TFR”) AND OTHER EMPLOYEE BENEFITS

Euro thousands

Post-employment

benefits (Italy)

Other Employee

benefits

Total

Amount

December 31, 2015 2,572 2,780 5,352

Disbursements (376) (824) (1,200)of which Amount in Period from Change in Consolidation Scope (321) (168) (489)

Financial Charges 22 0 22of which Amount in Period from Change in Consolidation Scope 4 0 4

Past Service Cost 0 1 1

Pension Cost for Service 0 1,131 1,131of which Amount in Period from Change in Consolidation Scope 0 142 142

IAS 19 Reserve 1,316 30 1,346of which Amount in Period from Change in Consolidation Scope 1,164 0 1,164

Change in consolidation scope - Contribution at operation date 0 62 62

Translation differences 19 (94) (76)

Other Increases (506) 0 (506)

June 30, 2016 3,047 3,086 6,133

Change in period 475 306 781

The “Actuarial Losses” for 1H 2016 totalled Euro 1,346 thousand, recognised net of the fiscal

effect directly to equity.

“Other increases” related to the offsetting with hedging financial assets.

The following table outlines the amount of employee benefits, broken down by funded and

unfunded by assets in service of the plan over the last two years:

1. Obligations for Employee Benefits

30-06-2016 31-12-2015

Present Value of Obligations Not Covered by Assets to Service Plan 3,047 2,572

3,047 2,572

Present Value of Obligations Covered by Assets to Service Plan 4,060 3,611

Fair value of Plan Assets Relating to the Obligations (974) (831)

3,086 2,780

Total amount 6,133 5,352

EMPLOYEE BENEFIT PLANS

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The financial assets at June 30, 2016 invested by the F.I.L.A. Group to cover financial

liabilities arising from “Employee Benefits” amount to Euro 974 thousand (Euro 831

thousand at December 31, 2015) and relate to Dixon Ticonderoga Company (U.S.A. – Euro

686 thousand) and F.I.L.A.-Dixon, S.A. de C.V. (Mexico – Euro 288 thousand).

The table below highlights the net cost of employee benefit components recognised to the

income statement in 2016 and 2015:

2. Cost Recognised in Income Statement

30-06-2016 31-12-2015

Pension Cost for Service 1,132 1,889

Financial Charges 22 86

Cost Recognised in Income Statement 1,154 1,975

The principal actuarial assumptions used for the estimate of the post-employment benefits

were the following:

3. Main Actuarial Assumptions at Reporting Date (average values)

30-06-2016 31-12-2015

Annual Technical Discounting Rate 4.0% 4.3%

Increase Cost of Living 4.3% 4.3%

Future Increase in Salaries 2.4% 2.4%

Future Increase in Pensions 2.0% 2.0%

Note 15 - Provision for Risks and Charges

The “Provision for Risks and Charges” amounts at June 30, 2016 to Euro 2,346 thousand

(Euro 1,376 thousand at December 31, 2015), of which Euro 1,368 thousand (Euro 942

thousand at December 31, 2015) concerning the non-current portion and Euro 978 thousand

(Euro 434 thousand at December 31, 2015) concerning the current portion.

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Euro thousands

Risks Provisions for

Tax Disputes

Risks Provisions for

Legal Disputes

Provisions for

Pensions and Similar

Obligations

Other

Provisions

Total

Amount

December 31, 2015 39 132 647 558 1,376

non-current portion 0 0 607 335 942

current portion 39 132 40 223 434

June 30, 2016 39 677 702 927 2,346

non-current portion 0 0 662 706 1,368

current portion 39 677 40 221 978

Change in period 0 546 55 370 970

non-current portion 0 0 55 371 426

current portion 0 545 0 (2) 544

Note 15A - PROVISION FOR RISKS AND CHARGES

The movement in the account “Provision for Risks and Charges” at June 30, 2016 was as

follows:

Euro thousands

Risks Provisions for Tax

Disputes

Risks Provisions for Legal

Disputes

Provisions for Pensions and

Similar Obligations

Other

Provisions

Total

Amount

December 31, 2015 39 132 647 558 1,376

Utilisation of Provisions 0 (50) (27) (67) (144)

Provisions Accrued 0 0 24 428 452

Discounting 0 0 58 0 58

Change in consolidation scope - Contribution at operation date 0 653 0 17 670

Exchange Differences 0 (58) 0 (8) (66)

June 30, 2016 39 677 702 928 2,346

Change in period 0 545 55 371 970

Note 15.B PROVISION FOR RISKS AND CHARGES: CHANGES IN PERIOD

Risk Provisions for Tax Disputes:

this provision represents the best estimate by management of liabilities concerning a tax

assessment of F.I.L.A. S.p.A. by the public tax departments, concerning financial year

2004 and relating to direct and indirect taxes (Euro 39 thousand).

Legal Dispute Provisions:

this provision represents the best estimate by management of liabilities to be discharged

concerning:

• legal proceedings arising from ordinary operating activities;

• legal proceedings concerning disputes with employees or former employees and

agents.

Provisions for Pensions and Similar Obligations: the provision for pensions and similar

obligations concerns the agent supplementary indemnity provision at June 30, 2016 of the

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Parent F.I.L.A. S.p.A. and the subsidiary Industria Maimeri S.p.A.. The “Actuarial Loss”

in 1H 2016 amounts to Euro 58 thousand. The actuarial changes in the year, net of the tax

effect, are recognised directly to equity.

Other Provisions: the provision of Euro 928 thousand principally relates to the

environmental reclamation provision accrued by the subsidiary Dixon Ticonderoga

Company (U.S.A.), concerning the activities undertaken in the US in the period prior to

the acquisition by F.I.L.A. S.p.A.. Reclamation times and estimates will be revised by

management until completion. No further disposal and environmental reclamation costs

are expected following the reorganisation process involving the F.I.L.A. Group sites.

In order to establish the best estimate of the potential liability, each F.I.L.A. Group company

assesses legal proceedings individually to estimate the probable losses which generally derive

from similar events. The best estimate considers, where possible and necessary, the opinion

of legal consultants and other experts, the prior experience of the company, in addition to the

intention of the company itself to undertake further actions in each case. The present

provision in the F.I.L.A. Group consolidated financial statements concerns the sum of

individual allocations made by each Group company.

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Note 16 - Deferred tax liabilities

“Deferred Tax Liabilities” amount to Euro 30,829 thousand at June 30, 2016 (Euro 19,485


Note 16.A - CHANGES IN DEFERRED TAX LIABILITIES

Euro thousands

December 31, 2015 19,485

Provisions 70

of which Amount in Period from Change in Consolidation Scope 0

Utilisations (476)

of which Amount in Period from Change in Consolidation Scope (208)

Change in Consolidation Scope (contribution at operation date) 13,486

Translation differences (1,678)

Change in Equity (57)

June 30, 2016 30,829

Change in period 11,344

The deferred tax liabilities are calculated on “Intangible Assets” and “Property, Plant and

Equipment”, in addition to other differences between tax values and carrying amounts.

The balance at June 30, 2016 is mainly due to the change in the consolidation scope. The

acquisition of the Daler-Rowney Lukas Group in fact resulted in the contribution to the

consolidated financial statements of deferred tax liabilities principally from the fiscal effects

calculated on the revaluations of the Fair Values of the “Brands, Know-How and Property,

Plant and Equipment”, recorded during the “Business Combination” process.

Against “Deferred tax liabilities” at June 30, 2016, utilisations were recorded of Euro 476

thousand, principally concerning Writefine Products Private Limited (India) for Euro 205

thousand and by the Daler-Rowney Lukas Group for Euro 197 thousand.

The change in the Equity represents the tax effect of the “Actuarial Gains/Losses” calculated

on the “Post-Employment Benefits and Employee Benefits” and recognised, in accordance

with IAS 19, as an Equity reserve.

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Note 17 – Fair Value Market Warrants “Fair Value Market Warrants” at June 30, 2016 amounted to Euro 0 thousand (Euro 21,504


On January 4, 2016, the period for the exercise of the Market Warrants still on the market

concluded. Of the residual portion at December 31, 2015, 8,153,609 Market Warrants,

corresponding to Euro 21,444 thousand, were exercised, resulting in a similar increase in

Equity; the remaining 22,685 F.I.L.A. S.p.A. Market Warrants which were not exercised

were cancelled and are without validity, generating financial income of Euro 60 thousand (for

further details, reference should be made at Directors’ Report at June 30, 2016).

Note 18 - Current Tax Payables

The account “Current Tax Payables” concerns current tax payables, totalling Euro 7,909

thousand at June 30, 2016 (Euro 1,840 thousand at December 31, 2015), relating to the

F.I.L.A. Group companies.

Note 19 - Trade and Other Payables

“Trade and Other Payables” at June 30, 2016 amount to Euro 79,071 thousand (Euro 52,985



Trade Payables 60,549 38,412 22,137

Tax Payables 4,971 4,775 196

Other Payables 11,959 8,787 3,172

Accrued Liab. & Deferred Income 1,592 1,011 581

Total amount 79,071 52,985 26,086

Note 19.A TRADE AND OTHER PAYABLES

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The increase in “Trade Payables” (Euro 22,137 thousand) is mainly due to the change in the

consolidation scope and the debt of the Daler-Rowney Lukas Group of Euro 12,312

thousand, in addition to trade payables of Pioneer Stationery Private Ltd (India) for Euro 111

thousand.

Excluding corporate operations, the increase was Euro 9,714 thousand, partly due to higher

revenues and partly to seasonality, which requires the Group to increase production and

procurement to support peak sales in the middle months of the year.

The carrying amount of trade payables at the reporting date approximates their “fair value”.

The trade payables reported above are due within 12 months.

The account “Tax Payables” to third parties amounts to Euro 4,971 thousand at June 30, 2016

(Euro 4,775 thousand at December 31, 2015), of which Euro 3,743 thousand VAT payables

and Euro 1,228 thousand concerning tax payables other than current taxes. VAT payables

principally concern the Mexican subsidiary (Euro 1,598 thousand) and the Parent F.I.L.A.

S.p.A. (Euro 731 thousand).

Other Tax Payables concern consultants withholding taxes, principally relating to the Parent

F.I.L.A. S.p.A (Euro 236 thousand). The residual amount refers mainly to the Chinese

subsidiary (Euro 329 thousand) for local taxes and to Dixon Ticonderoga Inc. (Canada, Euro

134 thousand).

“Other Payables” amount to Euro 11,959 thousand at June 30, 2016 and principally include:

employee salary payables of Euro 6,923 thousand (Euro 5,111 thousand at December

31, 2015);

social security contributions to be paid of Euro 2,215 thousand (Euro 2,099 thousand

at December 31, 2015);

payables for agent commissions of Euro 451 thousand (Euro 172 thousand at

December 31, 2015).

The carrying amount of “Tax Payables”, “Other Payables” and “Accrued Liabilities and

Deferred Income” at the reporting date approximate their fair value.

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With reference to the other non-current payables, the balance at June 30, 2016 amounted to

Euro 99 thousand and refers to deposits paid by clients to guarantee long-term supply

contracts of the Indian company Writefine Products Private Limited (India).

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Note 20 – Core Business Revenue

Core business revenue in the first half of 2016 amounted to Euro 201,514 thousand (Euro

141,520 thousand in 1H 2015).

Revenue was broken down as follows:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Revenue from Sales and Service 210,788 150,364 60,424

Adjustments on Sales (9,274) (8,844) (430)

Returns on Sales (4,658) (4,127) (531)

Discounts, Allowances and Premiums (4,616) (4,717) 101

Total amount 201,514 141,520 59,994

Note 20.A - CORE BUSINESS REVENUE

“Core business revenue” increased in the first half of 2016 due to the change in the

consolidation scope compared to the comparative period for Euro 52,008 thousand, with a net

increase at like-for-like consolidation scope of Euro 7,986 thousand.

The principal change on the previous year is due to the US group company Dixon

Ticonderoga for Euro 3,966 thousand and the parent F.I.L.A. for Euro 2,065 thousand.

Note 21 – Other Revenue and Income

The account other income relates to ordinary operations and does not include the sale of

goods and provision of services and principally concerns realised and unrealised exchange

gains on commercial transactions.

“Other Revenue and Income” in 1H 2016 amounted to Euro 4,765 thousand (Euro 3,001

thousand in 1H 2015).

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Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Gains on Sale of Property, Plant and Equipment 14 3 11

Unrealised Exchange Gains on Commercial Transactions 2,350 1,203 1,147

Realised Exchange Gains on Commercial Transactions 1,663 1,234 429

Other Revenue and Income 737 561 176

Total amount 4,765 3,001 1,764

Note 21 – OTHER REVENUE AND INCOME

The increase in “Other Revenue and Income” in the first half of 2016 from the change in the

consolidation scope was Euro 1,959 thousand, with a net decrease at like-for-like

consolidation scope of Euro 195 thousand.

“Other Revenue and Income” in the first half of 2016 principally included:

commissions from Dixon Ticonderoga brand sales by a wholesaler to one of the major

American distributors for Euro 76 thousand;

sale of production waste for Euro 110 thousand, concerning Fila Dixon Stationery

(Kunshan) Co., Ltd. (China) and Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico);

royalties recognised to F.I.L.A. S.p.A. of Euro 50 thousand.

Note 22 - Costs for Raw Materials, Ancillary, Consumables and Goods

The account includes all purchases of raw materials, semi-processed products, transport for

purchases, goods and consumables for operating activities.

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The breakdown is provided below:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Raw materials, Ancillary, Consumables and Goods (85,751) (60,373) (25,378)

Shipping Expenses on Purchases (4,737) (5,447) 710

Packaging (3,384) (1,236) (2,148)

Import Charges and Customs Duties (3,368) (2,230) (1,138)

Other Accessory Charges on Purchases (4,707) (3,583) (1,124)

Materials for Maintenance (384) 0 (384)

Adjustments on Purchases 34 19 14

Discounts, Allowances and Premiums 33 19 14

Total amount (102,297) (72,850) (29,447)

Note 22 - COSTS FOR RAW MATERIALS, ANCILLARY, CONSUMABLES AND GOODS

The increase in “Costs for Raw Materials, Ancillary, Consumables and Goods” in the first

half of 2016 from the change in the consolidation scope amounts to Euro 29,579 thousand,

with a net decrease at like-for-like consolidation scope of Euro 132 thousand.

Goods purchases, shipping expenses and purchases, packaging, import charges and customs

duties and other accessory charges on purchases, at like-for-like consolidation scope, were in

line with the previous year.

The decrease in inventories at June 30, 2016 totalled Euro 18,526 thousand. The change in

inventories at June 30, 2016 following the change in the consolidation scope was Euro 3,109

thousand, against a net change at like-for-like consolidation scope of Euro 15,416 thousand.

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Note 23 - Service Costs and Rent, Leases and Similar Costs

“Service Costs and Rent, Leases and Similar Costs” amounted in 1H 2016 to Euro 48,239

thousand (Euro 33,020 thousand in 2015).

Services costs are broken down as follows:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Sundry services (4,314) (2,830) (1,484)

Transport (7,437) (4,781) (2,656)

Warehousing (746) (302) (444)

Maintenance (3,139) (1,871) (1,268)

Utilities (2,745) (2,226) (519)

Consulting (7,784) (3,374) (4,410)

Directors and Statutory Auditors Fees (2,008) (1,562) (446)

Advertising, Promotions, Shows and Fairs (2,721) (2,343) (378)

Cleaning (225) (185) (40)

Bank Charges (533) (376) (157)

Agents (3,467) (3,225) (242)

Sales representatives (1,877) (1,242) (635)

Sales Commissions (5,259) (4,423) (836)

Insurance (969) (574) (395)

Other Service Costs (764) (598) (166)

Hire Charges (2,710) (1,957) (753)

Rental (457) (329) (128)

Operating Leases (779) (537) (242)

Royalties and Patents (308) (285) (23)

Total amount (48,239) (33,020) (15,218)

Note 23 - SERVICE COSTS AND RENT, LEASES AND SIMILAR COSTS

The increase in “Service costs and Rent, Leases and Similar costs” in the first half of 2016

from the change in the consolidation scope on the previous period was Euro 9,809 thousand.

The net increase at like-for-like consolidation scope was Euro 5,410 thousand, principally

comprising non-recurring consultancy for the M&A projects undertaken by the Group,

increased commercial costs and professional contributions due to higher revenues, increased

advertising and marketing expenses, in addition to higher directors’ fees.

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Note 24 – Other Costs

“Other Costs” in 1H 2016 totalled Euro 5,692 thousand (Euro 3,088 thousand in 2015).

The account principally includes realised and unrealised exchange losses on commercial

transactions.

“Other costs” are broken down as follows:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Unrealised Exchange Losses on Commercial Transactions (955) (877) (78)

Realised Exchange Losses on Commercial Transactions (3,762) (1,878) (1,884)

Other Operating Charges (974) (333) (641)

Total amount (5,692) (3,088) (2,603)

Note 24 – OTHER COSTS

The increase in “Other costs” in the first half of 2016 following the change in the

consolidation scope was Euro 1,551 thousand, with a net increase at like-for-like

consolidation scope of Euro 1,054 thousand.

“Other Operating Charges” of Euro 974 thousand principally include the non-recurring costs

of the subsidiary Dixon Ticonderoga Co. (U.S.A. - Euro 426 thousand), substantially relating

to legal disputes. In addition, the account includes costs of the Parent F.I.L.A. S.p.A. (Italy –

Euro 125 thousand) and the subsidiary Lyra KG (Germany – Euro 72 thousand) relating to

tax charges other than income taxes, such as municipal taxes on property, registration taxes

and other indirect taxes, in addition to gifts and promotional items.

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Note 25 – Labour Costs

“Labour Costs” include all costs and expenses incurred for employees.

These costs are broken down as follows:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Wages and Salaries (28,813) (20,724) (8,089)

Social Security Charges (6,546) (5,324) (1,222)

Post-Employment Benefits (1,132) (922) (210)

Other Personnel Expenses (864) (509) (355)

Total amount (37,355) (27,479) (9,876)

Note 25 – LABOUR COSTS

The increase in “Labour costs” in the first half of 2016 from the change in the consolidation

scope was Euro 9,952 thousand. The net decrease at like-for-like consolidation scope was

Euro 76 thousand and in line with the comparable period.

The following table reports the breakdown of the F.I.L.A. Group workforce at June 30, 2016

and December 31, 2015 by region.

Europe North AmericaCentral - South

AmericaAsia Rest of the World Total

June 2016 788 148 1,750 4,065 13 6,764

December 2015 527 92 1,322 4,083 12 6,036

Change 261 56 428 (18) 1 728

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Note 26 – Amortisation and Depreciation

Amortisation and depreciation in 2016 and 2015 is reported below:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Depreciation of Property, Plant and Equipment (3,867) (2,803) (1,064)

Amortisation of Intangible Assets (2,637) (814) (1,823)

Total amount (6,504) (3,617) (2,887)

Note 26 – AMORTISATION AND DEPRECIATION

The increase in “Amortisation and depreciation” in the first half of 2016 from the change in

the consolidation scope was Euro 3,660 thousand. The net decrease at like-for-like

consolidation scope amounted to Euro 773 thousand.

For further details, reference should be made to “Note 1 – Intangible Assets” and “Note 2 –

Property, Plant and Equipment”.

No impairments were recognised in the year.

Note 27 – Write-Downs

The details of write-downs are presented below:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Write-down Property, Plant and Equipment (8) (4) (4)

Doubtful Debt Provisions (149) (552) 403

Total amount (156) (556) 399

Note 27 – WRITE-DOWNS

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The increase in “Write-downs” in the first half of 2016 from the change in the consolidation

scope totalled Euro 38 thousand. The net decrease at like-for-like consolidation scope was

Euro 438 thousand.

Trade receivable write-downs in the first half of 2016 principally concern the Parent F.I.L.A.

S.p.A. (Italy) and Dixon Ticonderoga Company (U.S.A.) following solvency assessments.

Note 28 – Financial Income

Financial income, together with the comment on the main changes on the previous year, was

as follows:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Interest on Bank Deposits 100 162 (62)

Income from Non-Current Financial Assets 10 0 10

Income from Non-Current Financial Assets: Interest 10 0 10

Other Financial Income 834 93 742

Unrealised Exchange Gains on Financial Transactions 991 352 639

Realised Exchange Gains on Financial Transactions 48 24 24

Total amount 1,983 630 1,353

Note 28 - FINANCIAL INCOME

The increase in “Financial income” in the first half of 2016 from the change in the

consolidation scope totalled Euro 95 thousand. The net increase at like-for-like consolidation

scope was Euro 1,258 thousand.

“Other Financial Income” in the first half of 2016 principally included financial income of

Euro 750 thousand from the settlement of the forward currency contract undertaken by the

parent F.I.L.A. against movements in UK Sterling, necessary for the acquisition of the Daler-

Rowney Lukas Group on February 3, 2016.

An additional Euro 60 thousand concerns the parent and derives from the exercise of Market

Warrants on January 4, 2016.

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Note 29 - Financial Charges

Financial charges, together with the comment on the main changes on the previous year, were

as follows:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Interest on Bank Overdrafts (101) (134) 33

Interest on Bank Loans (2,262) (1,788) (474)

Interest to Other Lenders (14) (1) (13)

Other Financial Charges (603) (46,990) 46,387

Unrealised Exchange Losses on Financial Transactions (423) (334) (89)

Realised Exchange Losses on Financial Transactions (562) (98) (464)

Total amount (3,965) (49,345) 45,380

Note 29 - FINANCIAL CHARGES

The increase in “Financial Charges” in the first half of 2016 from the change in the

consolidation scope was Euro 1,338 thousand. The net decrease at like-for-like consolidation


“Other Financial Charges” in the first half of 2016 principally related to the Amortised Cost

effect of Euro 152 thousand, calculated on the loan of the parent F.I.L.A. of Euro 109,357

thousand, received from a banking syndicate on February 3, 2016 (for further details, see

Note 13).

In addition, “Other Financial Charges” include financial discounts of Euro 196 thousand,

recognised by the parent F.I.L.A. to leading clients against the advance payment of invoices.

“Interest on Bank Loans” principally concerns the Mexican group company for Euro 924

thousand and the parent F.I.L.A. for Euro 674 thousand relating to the above-stated loan.

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Note 30 - Foreign Currency Transactions

Exchange differences on financial and commercial transactions in foreign currencies in 1H

2016 are reported below.

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Unrealised Exchange Gains on Commercial Transactions 2,350 1,203 1,147

Realised Exchange Gains on Commercial Transactions 1,663 1,234 429

Unrealised Exchange Losses on Commercial Transactions (955) (877) (78)

Realised Exchange Losses on Commercial Transactions (3,762) (1,878) (1,884)

Total exchange differences on commercial transactions (704) (318) (386)

Unrealised Exchange Gains on Financial Transactions 991 352 639

Realised Exchange Gains on Financial Transactions 48 24 24

Unrealised Exchange Losses on Financial Transactions (423) (334) (89)

Realised Exchange Losses on Financial Transactions (562) (98) (464)

Total exchange differences on financial transactions 54 (56) 110

Total net value of exchange differences (651) (374) (277)

Note 30 - FOREIGN CURRENCY TRANSACTIONS

The increase in “Foreign currency transactions” in the first half of 2016 from the change in

the consolidation scope totalled Euro 194 thousand. The net increase at like-for-like

consolidation scope was Euro 471 thousand.

Exchange differences in 1H 2016 principally arose from the movement of local currencies

(principally the South American currencies) against the Euro, in addition to the movement in

the period of assets and liabilities in foreign currencies, following commercial and financial

transactions.

Note 31 – Income/Charges from Investments Valued at Equity

“Income/Charges from Investments Valued at Equity” amounted to Euro 0 thousand (Euro

475 thousand in the first half of 2015), as at June 30, 2016 the company Writefine Products

Private Limited (India) was fully consolidated.

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Note 32 - Income Taxes

They amount to Euro 8,638 thousand in 2016 (Euro 7,722 thousand in 2015) and concern

current taxes for Euro 7,976 thousand (Euro 6,603 thousand in 2015) and a net deferred tax

charge of Euro 662 thousand (Euro 1,119 thousand in 2015).

The increase in “Income taxes” in the first half of 2016 from the change in the consolidation

scope was Euro 483 thousand. The net increase at like-for-like consolidation scope was Euro

433 thousand.

Note 32.A – Current Income Taxes

The breakdown is as follows.

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Current Income Taxes - Italy (509) (1,470) 961

Current Income Taxes - Foreign (7,467) (5,133) (2,334)

Total amount (7,976) (6,603) (1,373)

Note 32.A - INCOME TAXES

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Current Italian taxes concern F.I.L.A. S.p.A..

The breakdown of current overseas taxes is illustrated below.

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Omyacolor S.A. (France) (702) (568) (134)

F.I.L.A. Hispania S.L. (Spain) (214) (206) (8)

Dixon Ticonderoga Company (U.S.A.) (3,846) (3,141) (705)

FILALYRA GB Ltd. (United Kingdom) (38) (65) 27

Beijing F.I.L.A.-Dixon Stationery Company Limited (China) (4) 0 (4)

Fila Dixon Stationery (Kunshan) Co., Ltd. (China) (218) 0 (218)

Fila Dixon Art & Craft Yixing Co.,Ltd (20) 0 (20)

Dixon Ticonderoga Inc. (Canada) (170) (159) (11)

Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico) (674) (779) 105

FILA Argentina S.A. (Argentina) (16) (114) 98

Lyra GmbH & Co. K.G. (Germany) (212) (36) (176)

Lyra Scandinavia AB (Sweden) (80) 0 (80)

Lyra Verwaltungs Gmbh (1) 0 (1)

Licyn Mercantil Industrial Ltda (Brazil) (38) (13) (25)

Fila Hellas SA (Greece) (97) (52) (45)

Fila Polska Sp. Z.o.o (Poland) (16) 0 (16)

Writefine products PVT LTD. (911) 0 (911)

Daler Rowney S.A. (Belgium) (18) 0 (18)

Daler Rowney USA Ltd (USA) (192) 0 (192)

Total amount (7,467) (5,133) (2,334)

Note 32.A.1 INCOME TAXES

The other F.I.L.A. Group companies not presented in “Note 32.A.1 – Income Taxes” did not

report taxes in the current year in line with the respective local tax regulations.

The increase in “Current income taxes” in the first half of 2016 from the change in the

consolidation scope totalled Euro 1,121 thousand. The net increase at like-for-like

consolidation scope was Euro 1,213 thousand.

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Note 32.B – Deferred Tax Income and Charges

The breakdown is provided below:

Euro thousands

1H 2016 1H 2015 Change 2016 - 2015

Deferred Tax Charge 406 158 248

Deferred Tax Income (1,068) (1,277) 210

Total amount (662) (1,119) 458

Note 32.B - DEFERRED TAX INCOME AND CHARGES

The net deferred tax charge increase in the first half of 2016 from the change in the

consolidation scope was Euro 639 thousand. The net decrease at like-for-like consolidation


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Other Information

Related party transactions

For the procedures adopted in relation to transactions with related parties, also in accordance

with Article 2391-bis of the Civil Code, reference should be made to the procedure adopted

by the Parent pursuant to the Regulation approved by Consob with motion No. 17221 of

March 12, 2010 and subsequent amendments, published on the website of the company

www.filagroup.it in the “Governance” section.

Under the applicable accounting standards, the following were identified as related parties:

• joint arrangements and associates;

• shareholders exercising a significant influence on the F.I.L.A. Group and

• key management personnel and their close family members.

In accordance with Consob Communication No. 6064293 of July 28, 2006, the following

table outlines the commercial and financial transactions with related parties for the year

ended December 31, 2016:

Euro thousands

COSTS

Nuova Alpa Collanti S.r.l. Trade Supplier 0 0 0 0 0 579 0 0 0 0 854 0 0

Studio Legale Salonia e Associati Legal Consultancy 0 0 0 0 0 35 0 0 0 0 0 131 0

Studio Zucchetti Tax & Administration Consultancy 0 0 0 0 0 89 0 0 0 0 0 120 0

Total 0 0 0 0 0 703 0 0 0 0 854 252 0

Financial

Payables

(Other)

Trade

Payables

Revenue

from sales

Other

Revenue

(S ervices)

Other

Revenue

Financial

IncomeCompany Nature

Trade

Receivables

Financial

Assets

Cash and

Cash

Equivalents

Financial

Payables

(Banks)

Financial

Charges

F.I.L.A. GROUP RELATED PARTIES 2016

June 30, 2016 1H 2016

Statement of Financial Position Income Statement

ASSETS LIABILITIES REVENUE

Operating

Costs

(Products)

Operating

Costs

(S ervices)

Euro thousands

COSTS

Nuova Alpa Collanti S.r.l. Trade Supplier 0 0 0 0 0 407 0 0 0 0 655 0 0

Studio Legale Salonia e Associati Legal Consultancy 0 0 0 0 0 9 0 0 0 0 0 122 0

Studio Zucchetti Tax & Administration Consultancy 0 0 0 0 0 221 0 0 0 0 0 148 0

Studio Legale Pedersoli e Associati(1)

Legal Consultancy 0 0 0 0 0 0 0 0 0 0 0 106 0

Intesa Sanpaolo S.p.A.(1)

Loans 0 0 0 0 0 0 0 0 0 1 0 23 106

Total 0 0 0 0 0 637 0 0 0 1 655 399 106

Financial

Income

Operating

Costs

(Products)

Operating

Costs

(S ervices)

Financial

Charges

1) Parties considered as related parties between January 1, 2015 and the Effective Date of the merger between F.I.L.A. S.p.A. and Space S.p.A.. The cost reported in the table represent the amounts matured by these parties in the period in which they were considered

related parties.

Financial

Payables

(Banks)

Financial

Payables

(Other)

Trade

Payables

Revenue

from sales

Other

Revenue

(S ervices)

Other

RevenueCompany Nature

Trade

Receivables

Financial

Assets

Cash and

Cash

Equivalents

Statement of Financial Position Income Statement

ASSETS LIABILITIES REVENUE

F.I.L.A. GROUP RELATED PARTIES 2015

December 31, 2015 1H 2015

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Studio Legale Salonia e Associati

Studio Legale Salonia e Associati, with which a partner is related to the majority shareholder

of the company, principally provides legal consultancy.

Nuova Alpa Collanti S.r.l.

Nuova Alpa Collanti S.r.l., in which a shareholder is a Board member of F.I.L.A. S.p.A.,

supplies glue.

Studio Zucchetti

Studio Zucchetti, in which a partner of the firm is a member of the Board of Directors of

F.I.L.A. S.p.A., principally provides tax and administrative consultancy.

The comparative income statement figures for the first half of 2015 take into account also

transactions with Studio Legale Pedersoli e Associati and the credit institution Intesa

Sanpaolo as a related party until the Effective Merger Date with Space S.p.A., therefore for

the period between January 1, 2015 and May 31, 2015.

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Attachments

List of companies included in the consolidation and other investments

CompanyState of residence of the

company

Year of

acquisition of

the company

% held

directly

(F.I.L.A. S.p.A.)

% held

indirectly

% held by

F.I.L.A. GroupInvesting Company

Consolidation

method

Non-

controlling

interests

Omyacolor S.A. France 2000 94.94% 5.05% 99.99%

FILA S.p.A.

Johann Froescheis Lyra Bleistift-Fabrik GmbH & Co. KG

Lyra Bleistift-Fabrik Verwaltungs GmbH

Line-by-line 0.01%

F.I.L.A. Hispania S.L. Spain 1997 96.77% 0.00% 96.77% FILA S.p.A. Line-by-line 3.23%

FILALYRA GB Ltd. United Kingdom 2005 0.00% 100.00% 100.00% Dixon Ticonderoga Company Line-by-line 0.00%

Johann Froescheis Lyra Bleistift-Fabrik GmbH & Co. KG Germany 2008 99.53% 0.47% 100.00% Lyra Bleistift-Fabrik Verwaltungs GmbH Line-by-line 0.00%

Lyra Bleistift-Fabrik Verwaltungs GmbH Germany 2008 0.00% 100.00% 100.00% Johann Froescheis Lyra Bleistift-Fabrik GmbH & Co. KG Line-by-line 0.00%

Lyra Scandinavia AB Sweden 2008 0.00% 80.00% 80.00% Johann Froescheis Lyra Bleistift-Fabrik GmbH & Co. KG Line-by-line 20.00%

FILA Stationary and Office Equipment Industry Ltd. Co. Turkey 2011 100.00% 0.00% 100.00% FILA S.p.A. Line-by-line 0.00%

Fila Stationary O.O.O. Russia 2013 90.00% 0.00% 90.00% FILA S.p.A. Line-by-line 10.00%

Industria Maimeri S.p.A. Italy 2014 51.00% 0.00% 51.00% FILA S.p.A. Line-by-line 49.00%

Fila Hellas SA* Greece 2013 50.00% 0.00% 50.00% FILA S.p.A. Line-by-line 50.00%

Fila Polska Sp. Z.o.o Poland 2015 51.00% 0.00% 51.00% FILA S.p.A. Line-by-line 49.00%

Dixon Ticonderoga Company U.S.A. 2005 100.00% 0.00% 100.00% FILA S.p.A. Line-by-line 0.00%

Dixon Ticonderoga Inc. Canada 2005 0.00% 100.00% 100.00% Dixon Ticonderoga Company Line-by-line 0.00%

Grupo F.I.L.A.-Dixon, S.A. de C.V. Mexico 2005 0.00% 100.00% 100.00%Dixon Ticonderoga Inc.

Dixon Ticonderoga CompanyLine-by-line 0.00%

F.I.L.A. Chile Ltda Chile 2000 0.79% 99.21% 100.00%Dixon Ticonderoga Company

FILA S.p.A.Line-by-line 0.00%

FILA Argentina S.A. Argentina 2000 0.00% 100.00% 100.00%F.I.L.A. Chile Ltda

Dixon Ticonderoga CompanyLine-by-line 0.00%

Licyn Mercantil Industrial Ltda Brazil 2012 99.99% 0.00% 99.99% FILA S.p.A. Line-by-line 0.01%

Beijing F.I.L.A.-Dixon Stationery Company Ltd. China 2005 0.00% 100.00% 100.00% Dixon Ticonderoga Company Line-by-line 0.00%

Xinjiang F.I.L.A.-Dixon Plantation Company Ltd. China 2008 0.00% 100.00% 100.00% Beijing F.I.L.A.-Dixon Stationery Company Ltd. Line-by-line 0.00%

PT. Lyra Akrelux Indonesia 2008 0.00% 52.00% 52.00% Johann Froescheis Lyra Bleistift-Fabrik GmbH & Co. KG Line-by-line 48.00%

FILA Dixon Stationery (Kunshan) Co., Ltd. China 2013 0.00% 100.00% 100.00% Beijing F.I.L.A.-Dixon Stationery Company Ltd. Line-by-line 0.00%

FILA Australia PTY LTD Australia 2015 100.00% 0.00% 100.00% FILA S.p.A. Line-by-line 0.00%

FILA Cartorama SA PTY LTD South Africa 2014 90.00% 0.00% 90.00% FILA S.p.A. Line-by-line 10.00%

FILA Dixon Art & Craft Yixing Co. Ltd China 2015 0.00% 100.00% 100.00% Beijing F.I.L.A.-Dixon Stationery Company Ltd. Line-by-line 0.00%

Writefine Products Private Limited India 2015** 51.00% 0.00% 51.00% FILA S.p.A. Line-by-line 49.00%

Pioneer Stationery Pvt Ltd.** India 2015 0.00% 51.00% 51.00% Writefine Products Private Limited Line-by-line 49.00%

Renoir Topco Ltd United Kingdom 2015 100.00% 0.00% 100.00% FILA S.p.A. Line-by-line 0.00%

Renoir Midco Ltd United Kingdom 2015 0.00% 100.00% 100.00% Renoir Topco Ltd Line-by-line 0.00%

Renoir Bidco Ltd United Kingdom 2015 0.00% 100.00% 100.00% Renoir Midco Ltd Line-by-line 0.00%

Daler Rowney Group Ltd United Kingdom 2015 0.00% 100.00% 100.00% Renoir Bidco Ltd Line-by-line 0.00%

Daler Rowney S.A. Belgium 2015 0.00% 100.00% 100.00% Renoir Bidco Ltd Line-by-line 0.00%

Daler Rowney Ltd United Kingdom 2015 0.00% 100.00% 100.00% Renoir Bidco Ltd Line-by-line 0.00%

Longbeach Arts Ltd United Kingdom 2015 0.00% 100.00% 100.00% Daler Rowney Group Ltd Line-by-line 0.00%

Daler Board Company Ltd United Kingdom 2015 0.00% 100.00% 100.00% Daler Rowney Group Ltd Line-by-line 0.00%

Daler Holdings Ltd United Kingdom 2015 0.00% 100.00% 100.00% Daler Rowney USA Ltd Line-by-line 0.00%

Daler Designs Ltd United Kingdom 2015 0.00% 100.00% 100.00% Daler Rowney USA Ltd Line-by-line 0.00%

Daler Rowney GmbH Germany 2015 0.00% 100.00% 100.00% Daler Rowney Ltd Line-by-line 0.00%

Lukas-Nerchau GmbH Germany 2015 0.00% 100.00% 100.00% Daler Rowney GmbH Line-by-line 0.00%

Nerchauer Malfarben GmbH Germany 2015 0.00% 100.00% 100.00% Daler Rowney GmbH Line-by-line 0.00%

Lastmill Ltd United Kingdom 2015 0.00% 100.00% 100.00% Daler Rowney Ltd Line-by-line 0.00%

Rowney & Company Pencils Ltd United Kingdom 2015 0.00% 100.00% 100.00% Daler Rowney Ltd Line-by-line 0.00%

Rowney (Artists Brushes) Ltd United Kingdom 2015 0.00% 100.00% 100.00% Daler Rowney Ltd Line-by-line 0.00%

Daler Rowney USA Ltd U.S.A. 2015 0.00% 100.00% 100.00% Daler Rowney Group Ltd Line-by-line 0.00%

Brideshore srl Dominican Republic 2015 0.00% 100.00% 100.00% Daler Rowney USA Ltd Line-by-line 0.00%

* Although not holding 50% +1% of the share capital considered a subsidiary under the parameters of IFRS 10

** Writefine Products Private Limited acquired control in 2016 of the company Pioneer Stationery Pvt Ltd., previously consolidated as an associate at December 31, 2015 with a holding of 49%

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Business Combinations

Daler-Rowney Lukas Group

On February 3, 2016, F.I.L.A. S.p.A. acquired 100% of the entire share capital - comprising

“ordinary shares” and “preference shares” - of Renoir TopCo Ltd, the holding company of

the Daler-Rowney Lukas Group, from the private equity fund Electra Partners LLP and the

management team of Daler-Rowney.

From February 3, 2016, the companies of the English Group were consolidated in the

financial statements of the F.I.L.A. S.p.A. Group under the “line by line” method and at

March 31, 2016 contributed to the result only the profits/loss for the period between February

3, 2016 and March 31, 2016.

The acquisition of the entire share capital of Renoir TopCo Ltd involved total consideration

of Euro 80.8 million, of which Euro 2.6 million as payment for the “ordinary shares”, Euro

12.7 million as payment for the “preference shares” and Euro 65.5 million for redemption of

the Loan Notes held by the sellers, in addition to the price adjustment of Euro 0.3 million in

March 2016, in accordance with the purchase contract.

F.I..L.A. S.p.A. incurred costs related to the acquisition of Euro 1,084 thousand for legal

expenses and due diligence costs. These costs were included in the “Services and Rent,

Leases and Similar costs” account of the condensed statement of comprehensive income.

The goodwill deriving from the acquisition was recognised as illustrated in the following

table.

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Euro thousands

Value of F.I.L.A. S.p.A Investment in the Daler & Rowney Lukas Group in the separate financial statements of the

parent at February 3, 2016A 16,751

Total Consultancy Charges of F.I.L.A. S.p.A. for Daler & Rowney Lukas Group B 1,084

Total Payment of F.I.L.A. S.p.A. for Daler & Rowney Lukas Group A + B = C 15,667

Value of Equity of Daler & Rowney Lukas Group at February 3, 2016 held by F.I.L.A S.p.A. F (12,147)

C - F 3,520 Goodwill at February 3, 2016

The goodwill deriving from the acquisition principally concerns the skills and know-how of

the personnel of the acquired group, in addition to synergies from the integration of the

company acquired.

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The value of the assets and liabilities of the Daler-Rowney Lukas Group at the acquisition

date was as follows:

Euro thousands

Fair Value at

February 3, 2016

ASSETS 130,365

Non-Current Assets 86,454

Intangible Assets 70,784

Property, Plant and Equipment 12,839

Non-Current Financial Assets 589

Deferred Tax Assets 2,242

Current Assets 43,911

Current Financial Assets 1,041

Current Tax Receivables 23

Inventories 23,520

Trade and Other Receivables 16,147

Cash and Cash Equivalents 3,181

Non-Current and Current Assets Held-for-Sale 0

LIABILITIES AND EQUITY 130,365

Equity 12,147

Non-Current Liabilities 13,435

Non-Current Financial Liabilities 19

Employee Benefits 57

Deferred Tax Liabilities 13,359

Current Liabilities 104,783

Current Financial Liabilities 90,955

Current Provisions for Risks and Charges 670

Current Tax Payables 82

Trade and Other Payables 13,075

Non-Current and Current Assets Held-for-Sale 0

Note: The figures are converted at the exchange rate at February 3, 2016.

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Transactions relating to atypical and/or unusual operations

In accordance with Consob Communication of July 28, 2006, during 2016 the F.I.L.A. Group

did not undertake any atypical and/or unusual operations as defined by this communication,

whereby atypical and/or unusual operations refers to operations which for size/importance,

nature of the counterparties, nature of the transaction, method in determining the transfer

price or time period (close to the period-end) may give rise to doubts in relation to: the

correctness/completeness of the information in the financial statements, conflicts of interest,

the safeguarding of the company’s assets and the protection of non-controlling interest

shareholders

The Board of Directors

THE CHAIRMAN

Mr. Gianni Mion

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Declaration of the Executive Responsible and Corporate Boards

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Auditors’ Report

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FILA S.p.A.Fabbrica Italiana Lapis ed Affini S.p.A.

SEDE LEGALEVia XXV Aprile 5 20016 - Pero (MI)

f.i.la. group 2016 half-year report › wp...group-2016-half-year-report.pdf2016 t 5 ke 1 2016...

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