FILA Consolidated & Separate Financial Statements at Dec ... · Consolidated Financial Statements...

Consolidated Financial Statements of the F.I.L.A. Group

Separate Financial Statements of F.I.L.A. S.p.A.

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CONSOLIDATED FINANCIAL STATEMENTS OF

THE F.I.L.A. GROUP AT DECEMBER 31, 2014

SEPARATE FINANCIAL STATEMENTS OF

F.I.L.A. S.p.A. AT DECEMBER 31, 2014

F.I.L.A. – Fabbrica Italiana Lapis ed Affini S.p.A.

REGISTERED OFFICE – VIA POZZONE 5 – MILAN



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DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL

STATEMENTS OF THE F.I.L.A. GROUP AND THE SEPARATE

FINANCIAL STATEMENTS OF F.I.L.A. S.p.A. AT DECEMBER

31, 2014

I. Preliminary Information

7 Corporate Boards of F.I.L.A. S.p.A.

8 Chairman’s Letter to The Shareholders

10 F.I.L.A. Group Structure

II. Directors’ Report

14 Economic overview

17 Key Operating Results

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

18 Operating Results

25 Balance Sheet

30 Financial Position

35 Key Financial Highlights of main Group Companies

36 Investments

37 Management and Control

38 Treasury Shares

38 Commitments and Guarantees

41 Research and Development

43 Transactions with Related Parties

49 Significant Events of the year

50 Subsequent Events



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51 Going Concern

51 Information and Management of Financial Risks

65 Environment and Safety

65 Workforce

68 Board of Directors and Board of Statutory Auditors

CONSOLIDATED FINANCIAL STATEMENTS OF THE F.I.L.A.

GROUP AND THE SEPARATE FINANCIAL STATEMENTS OF

F.I.L.A. S.p.A AT DECEMBER 31, 2014

I. Basis of preparation of the Explanatory Notes to the

Consolidated Financial Statements of the F.I.L.A. Group and the

Separate Financial Statements of F.I.L.A. S.p.A. at December 31, 2014

72 Accounting principles and policies

86 Introduction

87 Consolidation Principles

92 Accounting Policies of the Consolidated and Separate Financial Statements

106 Other Accounting Policies

110 Consolidation Scope

II. Consolidated Financial Statements of the F.I.L.A. Group at

December 31, 2014

115 Consolidated Balance Sheet

116 Consolidated Statement of Comprehensive Income



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117 Consolidated Cash Flow Statement

119 Consolidated Statement of Changes in Shareholders’ Equity

120 Notes to the Main Consolidated Financial Statement Accounts

179 Business Combinations

189 Segment Reporting

201 Transactions relating to atypical or unusual operations

202 Final Considerations

203 Board of Statutory Auditors’ Report on the Consolidated

Financial Statements at December 31, 2014

205 Auditors’ Report as per Article 14 of Legislative Decree No. 39

of January 27, 2010

III. Basis of Preparation of the Explanatory Notes to the Separate

Financial Statements of F.I.L.A. S.p.A. at December 31, 2014

207 Accounting principles and policies

210 Accounting Policies of the Separate Financial Statements

225 Other Accounting Policies

IV. Separate Financial Statements of F.I.L.A. S.p.A. at December

31, 2014

229 Balance Sheet

230 Statement of Comprehensive Income

231 Cash Flow Statement

233 Statement of Changes in Shareholders’ Equity



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234 Notes to the Main Financial Statement Accounts

280 Transactions relating to Atypical and/or Unusual Operations

281 Final Considerations

282 Board of Statutory Auditors’ Report on the Financial

Statements at December 31, 2014 prepared as per Article 2429 of

the Civil Code

291 Auditors’ Report as per Article 14 of Legislative Decree No. 39

of January 27, 2010



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DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL

STATEMENTS OF THE F.I.L.A. GROUP AND THE SEPARATE

FINANCIAL STATEMENTS OF F.I.L.A. S.p.A.

AT DECEMBER 31, 2014



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I. Preliminary Information

Corporate Boards of F.I.L.A. S.p.A.

Board of Directors

Chairman Mr. Alberto Candela

Chief Executive Officer Mr. Massimo Candela

Directors Mr. Alessandro Marena

Mr. Antonio Scarabosio Mr. Giacomo Berti

Mr. Fabio Zucchetti

Mr. Luca Pelosin

Mr. Simone Franco Citterio

Mr. Sergio Ravagli

Board of Statutory Auditors

Standing Auditors Mr. Stefano Amoroso – Chairman

Mr. Giuseppe Persano Adorno

Mr. Nicola Bruni

Alternate Auditors:

Mr. Dario Greco

Mr. Gianmarco Amico di Meane

Independent Audit Firm KPMG S.p.A.



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Chairman’s Letter to the Shareholders

Dear Shareholders,

2014 was an excellent year across the board in terms of operating and financial results.

At Group level, together with a lowering of the net debt, revenues improved (+6.7%) -

as did the EBIT (+11%) and the net profit (+24%).

These performances are considered even stronger when taking into account:

• the extensive volatility of a number of the major currencies against the Euro

(US Dollar, Chinese Renmimbi and the Russian Ruble);

• the transfer of the Chinese production base from Beijing to Shanghai, with the

consequent impact on the scheduled production capacity;

• the significant non-recurring charges from corporate acquisitions which, among

other benefits, facilitated the entry into the “fine arts” sector through the

acquisition of Industria Maimeri S.p.A. and the listing proposal (reference

should be made to the “Subsequent Events” paragraph:);

• the opening of the new commercial subsidiaries in Greece and South Africa.

We highlight also the excellent results of the Indian group company Writefine Products

Private Limited (India), currently held 18.5% and therefore not consolidated line-by-

line but at equity, which in 2014 delivered 28% revenue growth and EBIT growth of

46%, together with ongoing product quality improvements and innovation thanks to

synergies with F.I.L.A. S.p.A..



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In 2015, the Fila Group will again focus on leaner production, the consolidation of

market share and will continue to tap into all commercial opportunities in regions

without a direct Group presence, also through the setting up of local companies.



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F.I.L.A. Group Structure

The F.I.L.A. Group structure at December 31, 2014 is presented below.



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The F.I.L.A. S.p.A. subsidiaries at December 31, 2014 are:

� Omyacolor S.A. (France), held 99.99%, of which 5.05% through the German

subsidiary Lyra KG;

� F.I.L.A. Hispania S.L. (Spain), held 96.77%;

� FILA Stationary and Office Equipment Industry Ltd. Co. (Turkey), held 99.99%;

� Licyn Mercantil Industrial Ltda (Brazil), held 99.99%;

� Fila Stationary O.O.O. (Russia), held 90%;

� Fila Hellas SA (Greece), held 50%;

� Industria Maimeri S.p.A. (Italy), held 51%, which in turn wholly-owns Maimeri

U.S.A. Inc. (U.S.A.);

� Fila Cartorama SA PTY LTDA (South Africa), held 51%;

� Fila Australia PTY LTD (Australia), held 50%;

� Dixon Ticonderoga Company (U.S.A.), wholly-owned which, in turn holds direct

investments in:

� FIRALYRA GB Ltd (United Kingdom), wholly-owned;

� Beijing F.I.L.A.-Dixon Stationery Company Ltd (China), wholly-owned,

which in turn wholly-owns Xinjiang F.I.L.A.-Dixon Plantation Co. Ltd

(China) and wholly-owns Fila Dixon Stationary (Kunshan) Co., Ltd.

(China).

� Dixon Ticonderoga Inc. (Canada), wholly-owned, which in turn holds

51.66% of Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico);

� 48.34% of Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico);



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� 99.21% of F.I.L.A. Chile Ltda (Chile), which in turn holds 95% of FILA

Argentina S.A. (Argentina);

� 5% of FILA Argentina S.A. (Argentina).

The Mexican company Grupo F.I.L.A.-Dixon, S.A. de C.V. holds in turn

99.998% of Servidix S.A. de C.V., 99.99% of Dixon Comercializadora S.A. de

C.V., 99.998% of Dixon Ticonderoga de Mexico S.A. de C.V. and 99.99% of

Dixon Mexico, SA. De CV. Servidix S.A. de C.V. holds in turn 0.002% of

Dixon Mexico, SA. De CV.

� Lyra KG “Johann Froescheis Lyra-Bleitstitift-Fabrik GmbH&Co-KG” (Germany),

wholly-owned, which in turn holds direct investments in:

� Lyra-Bleitstitift-Fabrik Verwaltungs GmbH (Germany), wholly-owned;

� Lyra Scandinavia AB (Sweden), held 80%;

� PT. Lyra Akrelux (Indonesia), held 52%;

� Lyra Asia PTE Ltd (Singapore), held 70%;

The associated company of F.I.L.A. S.p.A. at December 31, 2014 is:

� Writefine Products Private Limited (India), held 18.5%;

Other investments at December 31, 2014 include:

� Maimeri S.p.A. (Italy), held 1%.

Note:

- Maimeri U.S.A. Inc. (U.S.A.) and Lyra ASIA PTE LTD (Singapore), both in liquidation, and

FILA Australia PTY LTD (Australia), incorporated on September 1, 2014, were not operative at

December 31, 2014.



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Reference should be made to the “Directors’ Report – Significant Events” for complete

disclosure concerning the above stated events.

For further details on the Group companies, reference should be made to the subsequent

section “Key Financial Highlights of the F.I.L.A. Group”.



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II. Directors’ Report

ECONOMIC OVERVIEW

2014 saw the global economy expand, although with continued weakness apparent in

the Eurozone, principally due to restricted private spending, public spending cuts,

continued high youth unemployment rates and tax increases.

The F.I.L.A. Group markets report improved consumer numbers in the Eurozone and in

the US, with significant expansion in India. The South American market however was

stable, which again in 2014 was impacted by delays for Brazilian import permits.

The inflation and GDP figures for the main countries in which the F.I.L.A. Group

companies operate are reported below.

COUNTRY INFLATION GDP INFLATION GDP

Eurozone Italy 0.10% (0.20%) 1.20% (1.90%)

Spain (0.10%) 1.30% 1.80% (1.30%)

Greece (0.80%) 0.60% (0.80%) (3.60%)

France 0.70% 0.40% 1.00% 0.10%

Turkey 9.00% 3.00% 7.60% 3.50%

Germany 0.90% 1.40% 1.50% 0.50%

Sweden 0.10% 2.10% 0.40% 0.80%

North America USA 2.00% 2.20% 1.50% 1.70%

Canada 1.90% 2.30% 1.00% 1.70%

Latin America Mexico 3.90% 2.40% 3.70% 1.20%

Chile 4.40% 2.00% 1.80% 4.50%

Argentina n.a. (1.70%) 20.50% 5.10%

BRICs China 2.30% 7.40% 2.70% 7.70%

India 7.80% 5.60% 9.80% 4.90%

Brazil 6.30% 0.30% 6.20% 2.50%

Russia 7.50% 0.20% 6.40% 1.50%

Source: International Monetary Fund, Decembre 2014 /Economist Intelligence Unit 2013

2014 2013



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2015 Group Outlook

The group for 2015 will continue to focus on acquiring market share through ongoing

product innovation and the maintenance of high quality levels, the strengthening of

brand image and the opening of commercial subsidiaries on new markets to ensure a

more direct connection with the end consumer.

The commercial and strategic focus was confirmed for the “colour” segment, with a

view to widening the customer age bracket, also thanks to the recent acquisition of

company Industria Maimeri in the “fine arts” segment.

Further growth is again forecast for the Indian market, thanks to continued product

quality improvements ahead of the local competition, investment in the Doms brand

and the expanded wood production capacity.

The strategy driving the forecast growth in the other regions will however be based on:

- for North America, the consolidation of Ticonderoga brand market share for

office products, the focus on the Prang brand on the educational channel,

following the marketing investments and brand promotion - in addition to the

growth of the Dixon brand industrial products;

- for Central-South America, demographic expansion and greater numbers in the

school system, the focus on the “fine arts” segment, improved market

positioning following product quality improvements and cost streamlining as a

result of Mexican production investment;

- for Europe, the consolidation of market share, also due to the benefit for the

Giotto, Lyra and Das brand products from the acquisition of “fine arts” business

through Industria Maimeri.

The Chinese subsidiary, which in 2014 completed the major transfer of production from

Beijing to Shanghai, will become fully operational again and continue to focus on – in

addition to production for the core Group companies – further domestic market

development.



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The planned investments for 2015 are concentrated in the F.I.L.A. Group production

companies and principally concern production and industrial capital expenditure,

following the group decision to focus on its “core businesses”, with continued

innovation and a further strengthening of the “leadership” position achieved. Particular

focus has been placed on Industria Maimeri capex to raise its production efficiency to

Fila Group level.

On the basis of that outlined above, it may be reasonably expected that results will

again improve on 2014, with a continued steadfast focus on improving the net debt

through ongoing working capital optimisation.



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Key Operating Results

The key F.I.L.A. Group results for 2014 are reported below.

Euro thousands 2014% on

revenue2013

% on

revenue

Total revenue 237,402 100% 222,155 100% 15,247 7% 9,731 100%

EBITDA 35,019 15% 33,186 15% 1,833 6% 318 3%

Normalised EBITDA 40,221 17% 36,958 17% 3,263 9% 621 6%

EBIT 28,977 12% 26,114 12% 2,863 11% 188 2%

Net Profit - Continuing operations 16,681 7% 13,550 6% 3,131 23% 1 0%

Net Profit/(Loss) - Discontinued operations (76) (192) 116 -60% (150)

F.I.L.A. Group Net Profit 16,575 7% 13,371 6% 3,204 24% 157 2%

Earnings per share (€ cents)

basic 9.77 7.88

diluted 9.77 7.88

Euro thousands

Cash Flow from operating activities

Net investments

% on revenue

Euro thousands

Net capital employed

Net financial position

Equity (111,968) (92,348) (19,620) (1,596)

3,288 (4,014)

Consolidation Scope

Change at December

31, 2014

170,403 154,070 16,333 5,610

(58,435) (61,723)

December 31, 2014 December 31, 20132014 - 2013

Change

2.8% 1.7% 19.1% 1.5%

19,265 22,467 (3,202) N/A

6,601 3,687 2,914 149

2014 - 2013

Change

Consolidation Scope

Change at December

31, 2014

December 31, 2014 December 31, 20132014 - 2013

Change

Consolidation Scope

Change at December

31, 2014

Note:

- 2014 EBITDA includes non-recurring operating costs of approx. Euro 5.2 million, of which Euro 4.6 million

concerning various extraordinary operations, for approx. Euro 0.3 million principally concerning the transfer of the

Chinese production site and for Euro 0.2 million the “lay-off” of personnel.

- 2013 EBITDA included non-recurring operating costs of approx. Euro 3.8 million, principally concerning the

acquisition and transfer of the Chinese production site.

- Normalised EBITDA: excludes non-recurring items and those not referring to the F.I.L.A Group “core business”.

- The “Consolidation Scope Change at December 31, 2014” concerns the companies Industria Maimeri S.p.A., FILA

Hellas SA and FILA Cartorama SA PTY LTD, not present in the comparable period.



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

The key F.I.L.A. Group results for 2014 are reported below.

Operating Results

The F.I.L.A. Group 2014 results saw reductions on 2013 for the “EBITDA” of approx.

8.7% and for the “EBIT” of approx. 10.1%.

INCOME STATEMENT 2014 Percentage 2013 Percentage

Operating Revenue 233,585 218,864 14,721 6.7% 9,692 5,029 2.3%

Other revenue and income 3,817 3,291 526 16.0% 39 487 14.8%

TOTAL REVENUE 237,402 100% 222,155 100% 15,247 6.9% 9,731 100% 5,516

TOTAL OPERATING COSTS (202,383) -85.2% (188,969) -85.1% (13,414) 7.1% (9,413) -96.7% (4,001) 2.1%

EBITDA 35,019 14.8% 33,186 14.9% 1,833 5.5% 318 3.3% 1,515 4.6%

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (6,041) -2.5% (7,072) -3.2% 1,031 -14.6% (130) -1.3% 1,161 -16.4%

EBIT 28,977 12.2% 26,114 11.8% 2,863 11.0% 188 1.9% 2,675 10.2%

NET FINANCIAL CHARGES (4,052) -1.7% (5,131) -2.3% 1,079 -21.0% (85) -0.9% 1,164 -22.7%

PRR-TAX PROFIT 24,925 10.5% 20,983 9.4% 3,940 18.8% 102 1.0% 3,839 18.3%

TOTAL INCOME TAXES (8,244) -3.5% (7,432) -3.3% (812) 10.9% (101) -1.0% (711) 9.6%

NET PROFIT - CONTINUING OPERATIONS 16,681 7.0% 13,550 6.1% 3,131 23.1% 1 0.0% 3,130 23.1%

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS (76) (192) 116 (150) 266 -138.8%

NET PROFIT FOR THE YEAR 16,606 7.0% 13,358 6.0% 3,247 24.3% 151 1.6% 3,096 23.2%

Minority interest profit/loss 30 (13) 43 (6) -0.1% 49 -389.7%

F.I.L.A. GROUP NET PROFIT 16,575 7.0% 13,371 6.0% 3,204 24.0% 157 1.6% 3,047 22.8%

2014 - 2013 Change

Consolidation Scope

Change at December

31, 2014

2014 - 2013 Change like-

for-like Consolidation

Scope

Note:

- The “Consolidation Scope Change at December 31, 2014” concerns the companies Industria Maimeri S.p.A., FILA Hellas SA and

FILA Cartorama SA PTY LTD, not present in the comparable period;

- for the breakdown of the income statement items reported in the following tables, reference should be made to the section

“F.I.L.A. Group Financial Statements at December 31, 2014”;

- The “EBITDA” is calculated as “Total Revenues” less “Total Operating Costs”;

- The “EBIT” is calculated as “EBITDA” less Amortisation, Depreciation and Write-downs of assets, receivables and liquidity.

For improved understanding of the performance, a comparison by region is provided for

2013 and 2014.



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

region on the basis of the “operating location” as, in accordance with IFRS 8, reporting

to the Group’s top management is based on the geographic extent of business.

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

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

Europe

F.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)

North America

Dixon Ticonderoga Company (U.S.A.)

Dixon Ticonderoga Inc. (Canada)

Maimeri U.S.A. Inc. (U.S.A.)

Central and 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)

Rest of the World

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

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

PT. Lyra Akrelux (Indonesia)

Lyra Asia PTE Ltd. (Singapore)

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

FILA Australia PTY LTD (Australia)

FILA Cartorama SA PTY LTD (South Africa)



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Euro thousands EuropeNorth

America

Central & S.

America

Rest of the

WorldConsolidation

F.I.L.A.

Group

FY 2014

INCOME STATEMENT

Operating Revenue 140,203 63,463 68,842 31,250 (70,174) 233,585

Other revenue and income 3,879 2,262 1,678 355 (4,356) 3,817

TOTAL REVENUE 144,082 65,726 70,520 31,605 (74,530) 237,402

of which Intercompany (24,266) (2,733) (18,398) (29,133)

Raw Materials, Ancillary, Consumables and Goods (68,872) (41,210) (40,873) (21,072) 70,311 (101,716)

Services and Rent, Leases and Similar Costs (34,261) (12,530) (11,900) (3,743) 4,779 (57,655)

Other Operating Costs (1,034) (948) (1,549) (736) (680) (4,947)

Change in Inventory 3,199 4,106 1,934 1,240 285 10,764

Labour Costs (26,343) (4,754) (10,615) (7,118) (48,829)

TOTAL OPERATING COSTS (127,310) (55,335) (63,004) (31,429) 74,695 (202,383)

of which Intercompany 31,647 26,340 8,768 7,939

EBITDA 16,772 10,390 7,516 176 165 35,019

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (3,401) (270) (1,603) (768) (6,041)

EBIT 13,371 10,120 5,913 (592) 165 28,977

NET FINANCIAL CHARGES 857 1,071 (1,929) (250) (3,802) (4,052)

of which Intercompany (2,246) (1,565) 5 4

PRR-TAX PROFIT 14,228 11,191 3,985 (842) (3,637) 24,925

TOTAL INCOME TAXES (4,114) (3,185) (908) (9) (27) (8,244)

of which Intercompany 161 (188)

NET PROFIT - CONTINUING OPERATIONS 10,114 8,006 3,077 (851) (3,663) 16,681

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS (150) (91) 165 (76)

NET PROFIT FOR THE YEAR 10,114 7,856 3,077 (943) (3,498) 16,606

Minority interest profit/loss 159 (74) (55) 30

F.I.L.A. GROUP NET PROFIT 9,955 7,930 3,077 (888) (3,498) 16,575

* Allocation by "Entity Location"

REPORTING FORMAT - BUSINESS SEGMENTS*

Regional Reporting - F.I.L.A. Group



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America

Central & S.

America

Rest of the

WorldConsolidation

F.I.L.A.

Group

FY 2013

INCOME STATEMENT

Operating Revenue 126,182 62,885 63,564 27,299 (61,066) 218,864

Other revenue and income 3,635 2,374 1,141 471 (4,329) 3,291

TOTAL REVENUE 129,817 65,258 64,704 27,771 (65,395) 222,155

of which Intercompany (20,680) (2,493) (16,822) (25,400)

Raw Materials, Ancillary, Consumables and Goods (57,209) (37,348) (36,452) (16,409) 61,510 (85,908)

Services and Rent, Leases and Similar Costs (27,782) (12,506) (11,141) (3,452) 4,031 (50,850)

Other Operating Costs (1,132) (879) (1,184) (2,296) (150) (5,641)

Change in Inventory (6,660) (326) 1,443 1,036 143 (4,365)

Labour Costs (21,427) (4,715) (10,134) (5,929) (42,205)

TOTAL OPERATING COSTS (114,210) (55,773) (57,469) (27,050) 65,534 (188,969)

of which Intercompany (27,953) (25,501) (11,520) (560)

EBITDA 15,606 9,485 7,235 721 139 33,186

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (3,987) (526) (1,906) (652) (1) (7,072)

of which Intercompany 1

EBIT 11,619 8,958 5,329 67 138 26,114

NET FINANCIAL CHARGES 1,304 903 (2,193) (205) (4,941) (5,131)

of which Intercompany 3,373 1,571 (3)

PRR-TAX PROFIT 12,924 9,861 3,137 (137) (4,803) 20,983

TOTAL INCOME TAXES (3,648) (2,668) (212) (907) 2 (7,432)


NET PROFIT - CONTINUING OPERATIONS 9,276 7,194 2,925 (1,044) (4,800) 13,550

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS 196 (4) 192


NET PROFIT FOR THE YEAR 9,276 7,194 2,925 (1,240) (4,796) 13,358

Minority interest profit/loss 18 (31) (13)

F.I.L.A. GROUP NET PROFIT 9,258 7,194 2,925 (1,209) (4,796) 13,371






22

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

Group Business Segments at like-for-like consolidation scope with 2013 are reported

below.


America

Central & S.

America

Rest of the

WorldConsolidation

F.I.L.A.

Group

FY 2014 - like-for-like consolidation scope at December 31, 2014

INCOME STATEMENT

Operating Revenue 130.695 63.463 68.842 31.066 (70.174) 223.892

Other revenue and income 3.848 2.262 1.678 347 (4.356) 3.779

TOTAL REVENUE 134.543 65.726 70.520 31.413 (74.530) 227.671

of which Intercompany (24.266) (2.733) (18.398) (29.133)

Raw Materials, Ancillary, Consumables and Goods (64.676) (41.210) (40.873) (20.296) 70.311 (96.744)

Services and Rent, Leases and Similar Costs (32.019) (12.530) (11.900) (3.575) 4.779 (55.246)

Other Operating Costs (1.015) (948) (1.549) (736) (680) (4.928)

Change in Inventory 2.997 4.106 1.934 590 285 9.912

Labour Costs (23.551) (4.754) (10.615) (7.045) (45.965)

TOTAL OPERATING COSTS (118.264) (55.335) (63.004) (31.063) 74.695 (192.970)

of which Intercompany 31.647 26.340 8.768 7.939

EBITDA 16.279 10.390 7.516 350 165 34.701

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (3.279) (270) (1.603) (760) (5.912)

EBIT 13.000 10.120 5.913 (410) 165 28.789

NET FINANCIAL CHARGES 932 1.071 (1.929) (239) (3.802) (3.967)

of which Intercompany (2.246) (1.565) 5 4

PRR-TAX PROFIT 13.932 11.191 3.985 (649) (3.637) 24.822

TOTAL INCOME TAXES (4.013) (3.185) (908) (9) (27) (8.142)


NET PROFIT - CONTINUING OPERATIONS 9.919 8.006 3.077 (658) (3.663) 16.680

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS (91) 165 74

NET PROFIT FOR THE YEAR 9.919 8.006 3.077 (749) (3.498) 16.755

Minority interest profit/loss (174) 74 136 36

F.I.L.A. GROUP NET PROFIT 10.093 7.932 3.077 (885) (3.498) 16.719






23

The principal changes on 2013, net of the effects from the changes to the consolidation

scope, are reported below.

“Operating Revenue” of Euro 223,892 increased on 2013 by Euro 5,028 thousand

(+2.3%), principally relating to “Europe” and “Central-South America”.

The following performances are reported compared to 2013 and excluding inter-

company transactions:

� “Europe” reported growth of Euro 4,513 thousand, principally generated by F.I.L.A.

S.p.A. following increased pencil, felt-tip pen and erasable pen sales by Omyacolor

S.A. (France), due to greater sales of chalk and pencils and improved sales by

F.I.L.A. Hispania S.L. in Portugal;

� “Central-South America” reported an increase of Euro 5,278 thousand, almost

exclusively concerning the subsidiary Grupo F.I.L.A.-Dixon, S.A. de C.V.

(Mexico), following the consolidation of sales on the Mexican market;

� The “Rest of the World” saw revenues improve Euro 3,767 thousand, principally

following the increased revenues of the Chinese subsidiary FILA Dixon Stationery

(Kunshan) Co., Ltd. (China), with the increase also related to the need to supply

group companies following the transfer of production from Beijing to Kunshan.

Inter-company eliminations, as reported above, concerning “Operating Revenues”

increased on the previous year approx. Euro 9,108 thousand, principally due to

improved sales in 2014 by the Chinese subsidiary, whose production is almost entirely

sold onto other group companies and, to a lesser extent the Mexican Group company

for production sold to the US group company.

“Other Revenue and Income” report an increase of Euro 488 thousand (+14.8%) on the

previous year, due principally to higher exchange gains on commercial operations

carried out by Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico) in US Dollars.

“Operating Costs” in 2014 of Euro 192,970 thousand increased Euro 4,001 thousand on

2013, principally due to greater business volumes, the costs incurred by Beijing



24

F.I.L.A.-Dixon Stationery Company Ltd. (China) for the transfer of production from

Beijing to Shanghai and charges incurred by F.I.L.A. S.p.A for the merger with Space

S.p.A., in addition to new acquisitions.

“EBIT” of Euro 28,789 thousand increased Euro 2,675 thousand: the relative

improvement compared to the “EBITDA” is due to the reduced doubtful debts reported

by F.I.L.A. S.p.A. and Dixon Ticonderoga Co. (U.S.A.) on the basis of an improved

general market.

“Net Financial Charges” in 2014 totalled Euro 3,967 thousand, net of the distribution of

dividends between Group companies, improving on 2013 due to a lower group debt,

against substantially unchanged rates - which in some cases slightly decreased

compared to the previous year.

Consequently, group “Income taxes” (Euro 8,142 thousand) increased Euro 709

thousand on 2014. The increased taxes principally concern F.I.L.A. S.p.A. (Italy –

Euro 261 thousand) and Dixon Ticonderoga Company (U.S.A. – Euro 398 thousand).

The discontinued operations result concerns Lyra Asia PTE Ltd. (Singapore) and

Maimeri U.S.A. (U.S.A.).

Consequently, the “Net Profit” in 2014 totalled Euro 16,755 thousand, up Euro 3,397

thousand on 2013.

Excluding the minority result, at like-for-like consolidation scope the F.I.L.A. Group

net profit in 2014 was Euro 16,719 thousand, compared to Euro 13,371 thousand in the

previous year.



25

Balance Sheet

The balance sheet of the F.I.L.A. Group is illustrated below:

BALANCE SHEET December 2014 % December 2013 %2014 - 2013

Change

Consolidation Scope

Change at December

31, 2014

2014 - 2013 Change like-

for-like Consolidation

Scope

Non-Current Assets 64,731 24% 57,647 24% 7,085 2,754 4,331

Intangible Assets 21,264 19,778 1,486 1,792 (306)

Property, Plant and Equipment 25,552 22,539 3,013 579 2,434

Non-Current Financial Assets 707 347 360 111 249

Investments measured at Equity 6,746 6,130 616 616

Investments measured at Cost 31 2 28 112 (84)

Deferred Tax Assets 10,429 8,849 1,580 160 1,420

Other Receivables 2 2

Current Assets 201,755 76% 178,415 75% 23,340 8,792 14,548

Current Financial Assets 257 118 138 138

Current tax receivables 923 770 153 153

Inventories 92,035 74,210 17,825 4,573 13,252

Trade and Other Receivables 76,067 67,520 8,547 3,910 4,637

Cash and Cash Equivalents 32,473 35,797 (3,323) 309 (3,632)

Non-Current and Current Assets Held-for-Sale 16 0% 661 0% (645) (645)

TOTAL ASSETS 266,502 100% 236,723 100% 29,778 11,546 18,232

Equity 111,968 42% 92,348 39% 19,620 1,596 18,024

Non-Current liabilities 31,615 12% 38,713 16% (7,099) 2,347 (9,446)

Non-Current Financial Liabilities 20,134 28,297 (8,163) 1,417 (9,580)

Employee benefits 4,925 3,847 1,078 712 366

Provisions for Risks and Charges 731 565 166 121 45

Deferred Tax Liabilities 5,825 6,004 (179) 97 (276)

Current Liabilities 122,919 46% 105,662 45% 17,257 7,603 9,654

Current Financial Liabilities 71,037 69,343 1,694 2,905 (1,211)

Provisions for Risks and Sharges 262 2,382 (2,120) 16 (2,136)

Current Tax Payables 2,536 1,362 1,174 192 982

Trade and Other Payables 49,084 32,575 16,509 4,490 12,019

Liabilities related to Non-Current and Current Assets Held-for-Sale 0 0% 0 0% 0 - 0

TOTAL LIABILITIES 266,502 100% 236,723 100% 29,778 11,546 18,232

Note:

- The figures relating to the “Consolidation Scope Change at December 31, 2014” refer to the companies Industria Maimeri S.p.A.,

FILA Hellas SA and FILA Cartorama SA PTY LTD, not in the consolidation scope of the previous year;

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

Consolidated Financial Statements at December 31, 2014”.

The principal changes compared to the previous year excluding the changes in the

consolidation scope are illustrated below:

F.I.L.A. Group “Assets” at December 31, 2014 amount to Euro 266,502 thousand,

divided between “Non-Current” totalling Euro 64,731 thousand (increase on December

31, 2013 of Euro 4,331 thousand), “Current” totalling Euro 201,755 thousand (increase

on December 31, 2013 of Euro 14,548 thousand) and “Non-Current and Current Assets



26

Held-for-Sale” totalling Euro 16 thousand (decrease on December 31, 2013 of Euro 645

thousand).

The main changes relating to “Non-Current Assets” (Euro 4,331 thousand) were:

� decrease in “Intangible Assets” of Euro 306 thousand mainly attributable to

amortisation in the year totalling Euro 1,559 thousand, partially offset by

investments in the year totalling Euro 244 thousand, of which Euro 173 thousand

incurred by F.I.L.A. S.p.A.;

� increase in “Property, Plant and Equipment” of Euro 2,434 thousand, mainly

generated from net investments totalling Euro 6,358 thousand made by F.I.L.A.

S.p.A (Italy – Euro 2,040 thousand) and Grupo F.I.L.A.-Dixon, S.A. de C.V.

(Mexico – Euro 1,358 thousand), Omyacolor S.A. (France – Euro 865 thousand)

and FILA Dixon Stationery (Kunshan) Co., Ltd. (China – Euro 849 thousand),

offset by depreciation in the year totalling Euro 4,319 thousand. Capital

expenditures in the year concerned upgrading and modernisation of industrial

production plant and, for FILA Dixon Stationery (Kunshan) Co., Ltd. (China) the

construction of the new Chinese plant;

� increase in “Non-Current Financial Assets” of Euro 249 thousand, principally

attributable to Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico) for the guarantee

deposit relating to the renegotiation of the rental contract of the Mexican site.

� increase of “Deferred Tax Assets” of Euro 1,420 thousand, principally relating to

Dixon Ticonderoga Company (U.S.A.) and Grupo F.I.L.A.-Dixon, S.A. de C.V.

(Mexico).

The main changes relating to the “Current Assets” (Euro 14,548 thousand) were as

follows:

� increase in “Inventories” of Euro 13,252 thousand principally by F.I.L.A. S.p.A,

Dixon Ticonderoga Company (U.S.A.), Grupo F.I.L.A.-Dixon, S.A. de C.V.

(Mexico) and FILA Dixon Stationery (Kunshan) Co., Ltd. (China) against higher

orders to be shipped.



27

� decrease in “Cash and Cash Equivalents” of Euro 3,632 thousand, principally

attributable to F.I.L.A. S.p.A.. Reference should be made to the “Consolidated

Cash Flow Statement” for further information.

� increase in “Trade and Other Receivables” of Euro 4,637 thousand, related to the

general increase in turnover by the F.I.L.A Group in the year;

� increase in “Current Income Tax Receivables” of Euro 153 thousand principally by

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

The main changes relating to “Non-Current and Current Assets Held-for-Sale” relate to

Lyra Asia PTE Ltd. (Singapore) and Maimeri U.S.A. (U.S.A.) following the relative

liquidation processes.

The “Equity” of the F.I.L.A. Group amounting to Euro 111,968 thousand at December

31, 2014 increased by Euro 19,620 thousand on the previous year. The increase is

mainly due to the 2014 comprehensive net profit of the companies of the Group,

amounting to Euro 16,575 thousand (of which “minorities” share of Euro 30 thousand),

increase in the “Translation Reserve” of Euro 3,940 thousand mainly due to the

appreciation of the Mexican Peso and US Dollar compared to the consolidation

currency, the distribution of dividends recognised in the year of Euro 1,526 thousand

and the decrease in the “IAS 19 Reserve” of Euro 284 thousand. The minorities

“Equity” increase of Euro 915 thousand is mainly attributable for Euro 607 thousand to

minorities “Share Capital” paid in to Industria Maimeri S.p.A. (Italy – Euro 595

thousand) and FILA Hellas SA (Greece – Euro 12 thousand).

The “Liabilities” of the F.I.L.A. Group at December 31, 2014 amount to Euro 154,534

thousand, divided between “Non-Current” totalling Euro 31,615 thousand (decrease on

December 31, 2013 of Euro 9,446 thousand) and “Current” totalling Euro 122,919

thousand (increase on December 31, 2013 of Euro 9,654 thousand).



28

The main changes in the “Non-Current Liabilities” (Euro 9,446 thousand) relate to:

� decrease in “Non-Current Financial Liabilities” of Euro 9,580 thousand, mainly due

to reclassification to short-term of part of the loan granted by Intesa Sanpaolo and

Banca Nazionale del Lavoro to F.I.L.A. S.p.A., amounting to Euro 7,750 thousand

and Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico) totalling Euro 560 thousand;

� increase in the “Provision for Risks and Charges” of Euro 366 thousand, mainly

relating to the provision by Dixon Ticonderoga Co. (U.S.A.) for the environmental

reclamation in course of land currently not utilised;

� decrease in “Deferred Tax Liabilities” of Euro 2,119 thousand, mainly relating to

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

The main changes relating to “Current Liabilities” (Euro 9,654 thousand) were as

follows:

� decrease in “Current Financial Liabilities” of Euro 1,211 thousand, mainly due to

the repayment of the short-term tranche of loans provided by Banca Nazionale del

Lavoro to F.I.L.A. S.p.A., equal to Euro 10,300 thousand, and HVB to Lyra GmbH

& Co. KG (Germany) amounting to Euro 1,009 thousand, offset by the

reclassification to short-term of “Financial Liabilities” amounting to Euro 8,116

thousand and greater usage of the credit lines granted to FILA Dixon Stationery

(Kunshan) Co., Ltd. (China – Euro 1,089 thousand);

� decrease in the “Provision for Risks and Charges” of Euro 2,096 thousand mainly

relating to the utilisation of the provisions for the relocation of the Chinese factory;

� increase in the “Current Income Taxes” of Euro 982 thousand, following higher tax

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

(Italy) and Omyacolor S.A. (France);

� increase in “Trade and Other Payables” of Euro 12,019 thousand mainly for higher

purchases in the year and extraordinary consultancy charges, as well as better

payment scheduling at Group level and in particular F.I.L.A. S.p.A..



29

For further comments on the F.I.L.A. Group balance sheet reference should be made to

the regional segment reporting (“Directors’ Report – Segment Reporting”).



30

Financial Position

The overview of the 2014 Group operating and financial performance is completed by

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

Euro thousands December 2014 December 2013

EBIT 28,977 26,114

adjustments for non-cash items: 6,830 10,044

Amortisation & Depreciation 5,698 6,033

Write-down and Recovery in Value48 8

Doubtful Debt Provision 297 1,032

Provisions for Risks and Charges 0 1,956

Exch. effect on Assets and Liabilities in Foreign Curr. of Commercial Transactions 830 1,038

Gain/Loss on Fixed Asset Disposals (42) (22)

integrations for: (9,661) (8,493)

Income Taxes Paid (8,692) (6,832)

Unrealised Exchange Differences on Assets and Liabilities in Foreign Currencies (617) (1,081)

Realised Exchange Differences on Assets and Liabilities in Foreign Currencies (352) (580)

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN

NET WORKING CAPITAL26,146 27,664

Changes in Net Working Capital: (6,880) (5,197)

Change in Inventories (11,159) 4,923

Change in Trade and Other Receivables (4,546) (11,115)

Change in Trade and Other Payables 11,255 775

Change in Other Assets/Liabilities (2,582) (88)

Change in Post-Employment and Employee Benefits 153 307

NET CASH FLOW FROM OPERATING ACTIVITIES 19,265 22,467

Investments in Intangible Assets (244) (120)

Total Investment/Divestment in Intangible Assets (244) (120)

Investments in Property, Plant and Equipment (8,068) (3,717)

Divestments in Property, Plant and Equipment 1,711 151

Total Investment/Divestment in Property, Plant and Equipment (6,358) (3,567)

Acquisition of Investee Companies (28) 0

Total Investment/Divestment of Investments measured at Cost (28) 0

Cash Flow from Non-Current Assets & Liabilities Held-for-Sale645 0

Total Investemnt/Divestment in Other Financial Assets 306 784

Interest Received 49 57

CASH FLOW FROM INVESTING ACTIVITY (6,274) (2,846)

Contribution/Reimbursement of Share Capital 6,063

Dividends Distributed (1,544) (1,638)

Other Changes in Equity 607 0

Total Change in Equity (937) 4,425

Interest Paid (3,774) (4,407)

Total Change Loans and Other Financial Liabilities (13,994) (8,955)

CASH FLOW FROM FINANCING ACTIVITY (18,705) (8,938)

Translation difference 4,112 (3,947)

Other Non-Cash Items (2,353) 3,599

NET CASH FLOW IN THE YEAR (3,955) 10,336

Cash and Cash Equivalents net of Bank Overdrafts at beginning of the year35,685 25,349

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

consolidation scope) (1,067) 0

CASH AND CASH EQUIVALENTS NET OF BANK OVERDRAFTS AT END

OF THE YEAR30,663 35,685



31

1. Cash and cash equivalents in 2014 totalled Euro 32,473 thousand; current account overdrafts amounted to

Euro 1,810 thousand net of relative interest.

2. Cash and cash equivalents in 2013 totalled Euro 35,797 thousand; current account overdrafts amounted to

Euro 112 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 balance sheet items in currencies other than the Euro), where significant. These effects

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

Euro thousands 2014 2013

OPENING CASH AND CASH EQUIVALENTS 35,685 25,349

Cash and cash equivalents 35,797 26,052

Bank overdrafts (112) (703)

CLOSING CASH AND CASH EQUIVALENTS 30,663 35,685


Bank overdrafts (1,810) (112)

Cash flow generated from “Operating Activities” in 2014 totalled Euro 19,265 thousand

(Euro 22,467 thousand in 2013), on the basis of the following:

� for Euro 26,146 thousand (Euro 27,664 thousand in 2013) from “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 6,880 thousand (Euro 5,197 thousand in 2013), “Working

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

Other Receivables” mainly relating to Grupo F.I.L.A. – Dixon, S.A. de C.V.

(Mexico), Omyacolor (France) and F.I.L.A. Chile Ltda (Chile) generated by the

increase in revenues, in part in the latter months in the year.

Simultaneously “Inventories” increased, principally concerning F.I.L.A. S.p.A,

Dixon Ticonderoga Company (U.S.A.), Grupo F.I.L.A.-Dixon, S.A. de C.V.

(Mexico) and FILA Dixon Stationery (Kunshan) Co., Ltd. (China), on the basis of

sales orders. The increase in “Inventories” was entirely offset by higher “Trade and



32

Other Payables”, mainly attributable to F.I.L.A. S.p.A. (Italy) and Grupo F.I.L.A. –

Dixon, S.A. de C.V. (Mexico), following increased procurement in the year and

extraordinary consultancy charges, exacerbated by the lengthened credit terms

granted by some suppliers.

“Investing Activities” absorbed net liquidity of Euro 6,274 thousand (Euro 2,846

thousand in 2013), of which:

� Euro 244 thousand (Euro 135 thousand in 2013) almost exclusively concerning the

renewal of concessions and trademarks by F.I.L.A. S.p.A;

� Euro 6,358 thousand (Euro 3,567 thousand in 2013) for net investment in the new

plant and machinery by the main Group production companies such as F.I.L.A.

S.p.A (Italy – Euro 2,040 thousand), Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico –

Euro 1,358 thousand), Omyacolor S.A. (France – Euro 865 thousand) and FILA

Dixon Stationery (Kunshan) Co., Ltd. (China – Euro 849 thousand). Investments in

the year focused on the upgrading and modernisation of the industrial production

facilities and for FILA Dixon Stationery (Kunshan) Co., Ltd. (China) the

development of the new Chinese production base.

“Financing Activities” absorbed net cash of Euro 18,705 thousand (absorption of Euro

8,938 thousand in 2013), principally concerning:

� the absorption of Euro 1,544 thousand, principally for dividends distributed by

F.I.L.A. S.p.A. to shareholders;

� the absorption of Euro 3,774 thousand (Euro 4,407 thousand in 2013) from interest

charges paid on loans 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 Lyra KG (Germany);

� a net absorption of Euro 13,994 thousand, principally due to the repayment of

medium/long-term loans by F.I.L.A. S.p.A. and Lyra KG and due to the lower



33

recourse to short-term lines by Grupo F.I.L.A. –Dixon, S.A. de C.V. (Mexico) and

Dixon Ticonderoga Company (U.S.A.).

Considering the increase in “Equity” of approx. Euro 4,112 thousand, following the

conversion of the Group company financial statements from the local currency to the

consolidation currency (the Euro) and other non-cash decreases for Euro 2,353

thousand, principally due to - in addition to exchange rate movements on the previous

year concerning the larger balance sheet items - the absorption of net cash was therefore

Euro 3,955 thousand (compared to cash generation of Euro 10,336 thousand in 2013).

Consequently, considering the “Net Cash Available” at the beginning of the year of

Euro 35,685 thousand and the “Net Initial Cash Available from the change in the

consolidation scope in the year”, for a negative Euro 1,067 thousand, the “Net Cash

Available” at year-end was Euro 30,663 thousand.

The Net Financial Position at December 31, 2014 reports a debt of Euro 58,435

thousand.


Cash and Cash Equivalents 32.473 35.797

Financial Liabilities - Bank Overdrafts (1.810) (112)

Financial Assets - Loans & Current & Non-Current Receivables 263 120

Financial Liabilities - Bank Current (69.227) (69.231)

Financial Liabilities - Bank Non-Current (20.134) (28.297)

Total Net Financial Position (58.435) (61.723)

Compared to December 31, 2013 (debt of Euro 61,723 thousand), the position

improved Euro 3,288 thousand. Excluding the changes to the consolidation scope (on

the basis of the financial positions of the companies Industria Maimeri S.p.A., FILA

Hellas SA and FILA Cartorama SA PTY LTD and totalling Euro 4,014 thousand), this

differential would be Euro 7,302 thousand. The improvement essentially stems from

the strong operating performance, generating Euro 19,265 thousand, net of income

taxes and net working capital movements. The cash generated was principally utilised

as follows:

� intangible asset investments for Euro 244 thousand, principally in concessions

and trademarks by F.I.L.A. S.p.A.;



34

� net investment in plant and machinery for Euro 6,358 thousand, principally by

Fila Dixon Stationery (Kunshan) Co., Ltd. (China) for the start-up of the new

production facilities, F.I.L.A. S.p.A. (Italy) and the main Group production

companies such as Grupo F.I.L.A. – Dixon, S.A. de C.V. (Mexico);

� the distribution of dividends to Gruppo F.I.LA. shareholders of Euro 1,544

thousand, of which Euro 1,526 thousand by the Parent Company to its

shareholders;

� the absorption of cash of Euro 3,774 thousand for interest charges on loans

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 Lyra KG (Germany).

The F.I.L.A. Group net debt is expected also to improve in 2015, thanks to the strong

operating performances forecast for the main F.I.L.A. Group companies.

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.

In relation to “Financial Assets” and “Financial Liabilities”, reference should be made

to “Directors’ Report - Information and Management of Financial Risks”.



35

Key Financial Highlights of the Main Group Companies

The following table outlines the key financial highlights of the main F.I.L.A. Group

companies:

FY 2014

INCOME STATEMENT (Euro thousands )

TOTAL REVENUE 78,977 100% 22,516 100% 7,259 100% 7,393 100% 58,266 100% 29,942 100% 7,459 100% 59,313 100% 17,204 100%

EBITDA 8,904 11% 3,276 15% 1,621 22% 109 0% 9,777 17% 117 0% 614 8% 6,942 12% 2,081 12%

NORMALISED EBITDA 12,970 16% 3,323 15% 1,621 22% 412 1% 10,043 17% 458 2% 614 8% 6,970 12% 2,112 12%

EBIT 6,827 9% 2,833 13% 1,603 22% 3 0% 9,510 16% (580) -2% 611 8% 5,493 9% 1,384 8%

NET FINANCIAL INCOME/(CHARGES) 1,455 2% (4) 0% 5 0% (73) 0% 649 1% (221) -1% 421 6% (1,530) -3% (158) -1%

TOTAL INCOME TAXES (2,264) -3% (948) -4% (492) -7% (6) 0% (3,024) -5% 31 0% (162) -2% (688) -1% (227) -1%

NET PROFIT/(LOSS) 6,019 8% 1,881 8% 1,116 15% (76) 0% 7,135 12% (770) -3% 870 12% 3,275 6% 998 6%

FY 2013

INCOME STATEMENT (Euro thousands )

TOTAL REVENUE 73,157 100% 21,354 100% 6,626 100% - 0% 57,699 100% 26,459 100% 7,559 100% 52,737 100% 19,378 100%

EBITDA 8,867 12% 2,777 13% 1,260 19% - 0% 9,119 16% (533) -2% 365 5% 6,286 12% 1,879 10%

NORMALISED EBITDA 9,860 12% 2,808 12% 1,260 17% - 0% 8,986 15% 2,087 7% 546 7% 6,514 11% 2,011 12%

EBIT 6,139 8% 2,304 11% 1,236 19% - 0% 8,607 15% (57) 0% 351 5% 4,543 9% 1,155 6%

NET FINANCIAL INCOME/(CHARGES) 1,699 2% (10) 0% 10 0% - 0% 503 1% 504 2% 400 5% (1,927) -4% 249 1%

TOTAL INCOME TAXES (148) 0% (768) -4% (375) -6% - 0% (2,625) -5% (825) -3% (42) -1% (45) 0% (150) -1%

NET PROFIT/(LOSS) 7,690 11% 1,525 7% 871 13% - 0% 6,485 11% (1,070) -4% 709 9% 2,570 5% 1,254 6%

FY 2014

BALANCE SHEET (in Euro thousands)

Non-Current Assets 70,512 58% 6,704 35% 5 0% 2,662 4% 25,262 41% 7,338 21% 105 2% 8,629 15% 9,351 46%

Current Assets 50,608 42% 12,285 65% 3,737 100% 6,920 11% 36,918 59% 26,800 79% 4,716 97% 50,484 85% 10,881 54%

TOTAL ASSETS 121,119 100% 18,989 100% 3,742 100% 9,581 100% 62,180 100% 34,138 100% 4,822 100% 59,113 100% 20,232 100%

Equity 63,821 53% 14,407 76% 2,780 74% 1,490 2% 36,912 59% 12,593 37% 3,505 73% 27,806 47% 8,359 41%

Non-Current Liabilities 23,027 19% 689 4% 0 0% 2,312 4% 2,676 4% 0 0% 7 0% 729 1% 1,770 9%

Current Liabilities 34,270 28% 3,893 20% 962 26% 5,780 9% 22,592 36% 21,545 63% 1,310 27% 30,578 52% 10,103 50%

TOTAL EQUITY AND LIABILITIES 121,119 100% 18,989 100% 3,742 100% 9,581 100% 62,180 100% 34,138 100% 4,822 100% 59,113 100% 20,232 100%

FY 2013

BALANCE SHEET (in Euro thousands)

Non-Current Assets 67,095 57% 6,460 38% 7 0% - 0% 22,224 45% 5,659 24% 115 3% 6,931 13% 10,256 49%

Current Assets 51,632 43% 10,750 62% 3,390 100% - 0% 26,794 55% 17,840 76% 3,857 97% 47,620 87% 10,477 51%

TOTAL ASSETS 118,726 100% 17,210 100% 3,397 100% - 0% 49,019 100% 23,499 100% 3,972 100% 54,551 100% 20,733 100%

- 0%

Equity 61,363 52% 13,548 79% 2,214 65% - 0% 26,767 55% 12,121 52% 3,239 82% 25,064 46% 7,360 36%

Non-Current Liabilities 30,705 26% 561 3% 0 0% - 0% 2,425 5% 0 0% 7 0% 978 2% 2,268 11%

Current Liabilities 26,659 22% 3,101 18% 1,183 35% - 0% 19,828 40% 13,878 59% 726 18% 28,509 52% 11,105 54%

TOTAL EQUITY AND LIABILITIES 118,726 100% 17,210 100% 3,397 100% - 0% 49,019 100% 23,499 100% 3,972 100% 54,551 100% 20,733 100%

Key Profitability Indicators

ROI -2014

ROI -2013

ROE - 2014

ROE - 2013

Key Financial Indicators (Euro/000)

Net Capital Employed - 2014

Net Capital Employed - 2013

NET FINANCIAL POSITION - 2014

NET FINANCIAL POSITION - 2013

DSO (days) - 2014

DSO (days) - 2013

DPO (days) - 2014

DPO (days) - 2013

Inventory Rotation - 2014

Inventory Rotation - 2013 3.6 2.4 1.92.6 3.8 6.5 - 2.3 2.2

2.4 4.0 8.5 1.3 1.9 3.5 2.4 2.6 1.5

103 43 45 - 19 57 31 34 41

130 54 38 218 23 40 32 47 41

82 61 80 - 58 13 68 204 38

78 69 67 150 49 20 69 193 42

(23,961) 3,497 1,399 - (14,784) 1,405 1,289 (18,293) (8,941)

(15,914) 4,288 1,953 (3,775) (12,408) (3,304) 1,420 (18,694) (8,033)

83,469 10,051 815 - 41,550 10,717 1,842 43,357 16,302

79,736 10,118 827 5,265 49,320 15,897 2,085 46,500 16,391

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

S.A.

F.I.L.A. HISPANIA

S.L.

Industria

MaimeriDixon USA

Dixon China +

Dixon KunshanDixon Canada Dixon Mexico Lyra KG

13% 11% 39% - 24% -9% 22% 10% 17%

9% 13% 40% -5% 19% -6% 25% 12% 12%

7% 23% 152% - 20% 3% 17% 10% 7%

9% 28% 194% 0% 19% -4% 29% 12% 8%


S.A.

F.I.L.A. HISPANIA

S.L.

Industria

MaimeriDixon USA

Dixon China +



S.A.

F.I.L.A. HISPANIA

S.L.

Industria

MaimeriDixon USA

Dixon China +



S.A.

F.I.L.A. HISPANIA

S.L.

Industria

MaimeriDixon USA

Dixon China +



S.A.

F.I.L.A. HISPANIA

S.L.

Industria

MaimeriDixon USA

Dixon China +



S.A.

F.I.L.A. HISPANIA

S.L.

Industria

MaimeriDixon USA

Dixon China +


Note:

ROI: profitability from operating activities in comparison to capital employed; the ratio

between operating income and total assets.

ROE: profitability on net invested equity; ratio between the net result and net equity.

Net Capital Employed: sum of net fixed assets, net working capital, the risks and charges provisions and

employee benefit provisions and other non-current assets and liabilities.



36

Inventory Rotation Index: the number of times inventory is replaced in the year and the relative level of

management efficiency; the ratio between purchases and the change in inventories and

the average between initial and final inventories.

D.S.O.

(“Days Sales Outstanding”): average duration of trade receivables; the number of client payment days.

D.P.O.

(“Days Purchases Outstanding”): average duration of supplier payables; the number of supplier payment days

Industria Maimeri S.p.A.: values concerning the April 1 - December 31, 2014 period.

Investments

Group investments for the year totalled Euro 8,312 thousand, broken down between

“Intangible Assets” for Euro 244 thousand and “Property, Plant and Equipment” for

Euro 8,068 thousand, undertaken both to achieve leaner production and to support sales

volume growth.

The following table reports investments made in 2014 and 2013, broken down by fixed

asset category.

INTANGIBLE ASSETS


Industrial Patents and Intellectual Property Rights 17 22

Concessions, Licenses, Trademarks & Similar Rights 158 69

Other Intangible Assets 69 29

Total investments 244 120

“Other Intangible Asset” investment principally concerned the purchase of IT software

by Omyacolor S.A. (France) and F.I.LA S.p.A (Italy).



37

PROPERTY, PLANT AND EQUIPMENT


Buildings 327 235

Plant and Machinery 4,194 1,074

Industrial and Commercial Equipment 893 581

Other Assets 353 192

Assets in Progress 2,302 1,636

Total investments 8,068 3,717

“Plant and Machinery” expenditure represented, as in 2013, the main investments for

the F.I.L.A. Group, principally at the production plant of Rufina Scopeti (Florence –

Italy) of F.I.L.A. S.p.A. (Euro 843 thousand), of the Chinese subsidiary Fila Dixon

Stationery (Kunshan) Co., Ltd. (China - Euro 2,845 thousand) and of the Mexican

subsidiary Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico - Euro 714 thousand).

Investments in “Industrial and Commercial Equipment” in 2014 amounted to Euro 893

thousand, of which Euro 723 thousand by the Parent Company F.I.L.A. S.p.A. at the

production facilities of Rufina Scopeti (Florence– Italy).

“Assets in Progress” at December 31, 2014 amounted to Euro 2,302 thousand. The

investments principally concerned Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico – Euro

652 thousand) and Omyacolor S.A. (France – Euro 589 thousand), in addition to

F.I.L.A. S.p.A. (Italy – Euro 520 thousand) and FILA Dixon Stationery (Kunshan) Co.,

Ltd. (China – Euro 499 thousand).

Management and control

The Company is not considered under the management and control of the parent

company Pencil S.p.A. in accordance with Article 2497-bis of the Civil Code.



38

Treasury shares

The treasury shares of the Parent Company F.I.L.A. S.p.A. both at December 31, 2014

and December 31, 2013 totalled Euro 180,075, comprising 9.60% of total shares.

Commitments and guarantees

Commitments

In 2014, commercial supplier commitments maturing in 2015 totalled Euro 453

thousand and concern F.I.L.A. Hispania S.L. (Spain).

In 2014, operating lease and hire commitments maturing in 2015 totalled Euro 354

thousand, while commitments maturing between 1 and 5 years totalled Euro 500

thousand.

Guarantees

Guarantees granted by F.I.L.A. S.p.A. were as follows:

� bank sureties granted to Unicredito Italiano S.p.A. on credit lines in favour of

Lyra KG (Germany – Euro 10.5 million) and in favour of Industria Maimeri

S.p.A. (Italy – 1 million) and to Banca Nazionale del Lavoro in favour of

Industria Maimeri S.p.A. (Italy – Euro 1 million);

� bank sureties granted in favour of third parties, to credit institutions for

guarantees on competitions for Euro 216 thousand; these include in addition

Euro 67 thousand paid as a guarantee on the Pero offices lease contract;

� of stand-by’s on credit lines in favour of Banca Nazionale del Lavoro, granted in

favour of FILA Stationary and Office Equipment Industry Ltd. Co. (Turkey –

Euro 2 million), in favour of Licyn Mercantil Industrial Ltda (Brazil – Euro 1.6

million) and in favour of PT. Lyra Akrelux (Indonesia) for Euro 250 thousand.



39

In order to guarantee the prompt and correct fulfilment of the obligations of Fila from

the undertaking of the loan with Intesa Sanpaolo S.p.A. and Banca Nazionale del

Lavoro S.p.A. on July 28, 2011, F.I.L.A. granted in favour of the banks the following

secured guarantees: (i) a first level mortgage on the building owned by Fila in Rufina

(FI), Via Mecci No. 2; and (ii) a restriction on the insurance policies concerning the

buildings subject to mortgage; (iii) the ceding of receivables concerning the indemnities

due to F.I.L.A. in accordance with the acquisition contract of Writefine and RR

Industries (Jammu).

We report 3 credit mandates granted to Unicredito Italiano S.p.A. in favour of Dixon

Ticonderoga Co. (U.S.A.) of USD 17 million, in favour of Beijing F.I.L.A.-Dixon

Stationery Company Ltd (China) of Euro 1.8 million and in favour of Industria Maimeri

S.p.A. (Italy) of Euro 600 thousand.

We report 5 credit mandates granted by Banca Intesa Sanpaolo in favour of Dixon

Ticonderoga Co. (U.S.A.) of USD 10 million, in favour of Fila Dixon Stationery

(Kunshan) Co. Ltd. (China) of Renminbi 32 million and USD 500 thousand, in favour

of Industria Maimeri S.p.A. (Italy) of Euro 1 million and in favour of Fila Stationary

O.O.O. (Russia) of Euro 250 thousand.

We report guarantees requested by Dresdner Bank of Euro 6,678 thousand to Lyra KG

“Johann Froescheis Lyra-Bleitstitift-Fabrik GmbH&Co-KG” (Germany) on inventories

in guarantee of the bank debt undertaken.

Mortgages were granted by the banks Dresdner Bank, Hypo Real Estate and Eurohypo

AG on the property of Lyra KG “Johann Froescheis Lyra-Bleitstitift-Fabrik

GmbH&Co-KG” (Germany) for Euro 5,465 thousand.

Lyra KG “Johann Froescheis Lyra- Bleitstitift-Fabrik GmbH&Co-KG” (Germany)

provided a guarantee in favour of PT. Perma Plasindo (a local Fila Group partner)

which, in turn, pledged tangible fixed assets in guarantee (land and buildings) of the

obligations devolving to PT. Lyra Akrelux under the loan contract with PT. Bank



40

Central Asia of February 11, 2010 for a total IDR 2,500,000,000 (approx. Euro

160,000).

In conclusion, in 2014 Credito Emiliano issued a patronage letter in favour of Industria

Maimeri S.p.A (Italy) for Euro 1 million.

Covenants

The F.I.L.A. Group, against the debt undertaken with leading credit institutions (Intesa

Sanpaolo and Banca Nazionale del Lavoro), is subject to commitments and

“covenants”.

Under the new loan contract signed with Banca Nazionale del Lavoro and Intesa

Sanpaolo on July 28, 2011, the two “covenants” illustrated below were revised.

Compliance with the “covenants” is based on the Net Financial Debt (N.F.D.),

E.B.I.T.D.A. (“Earnings Before Interest, Tax, Depreciation and Amortisation”) and Net

Financial Charges (N.F.C.) reported in the F.I.L.A. Group consolidated financial

statements drawn up in accordance with international accounting standards.

The criteria for the establishment of the N.F.D., the E.B.I.T.D.A. and the N.F.C. are

based on the loan contract.

The “covenants” and the relative parameters to be complied with concerning the

F.I.L.A. Group consolidated financial statements from December 31, 2011, also

following the merger with Space S.p.A., are reported below.

NFD / EBITDA

� December 31, 2011: ≤ 3.25x

� December 31, 2012: ≤ 3.00x

� December 31, 2014: ≤ 2.75x

� from December 31, 2014 until the Maturity Date: < 2.5x



41

EBITDA / NFC

� December 31, 2011: ≥ 4.00x

� December 31, 2012: > 4.30x

� from December 31, 2014 until the Maturity Date: > 5x

The loan undertaken with Banca Nazionale del Lavoro and Intesa Sanpaolo matures on

March 31, 2018.

At December 31, 2014, the covenants had been complied with.

In relation to the loan contract signed with Banca Nazionale del Lavoro and Intesa

Sanpaolo on July 28, 2011 and with Intesa Sanpaolo on December 21, 2009, F.I.L.A.

S.p.A. requested and obtained both the waiver and the non-novation amendment of the

loan contract, with the banks specifically permitting: 1) to not allocate to advance

obligatory repayment the 25% of any income from corporate finance operations

following the merger and consequent listing, 2) the completion of the merger and

related corporate operations, 3) the elimination of the limit for the payment or dividend

distribution, in any form, of reserves and/or dividends to shareholders.

Research and Development

The Research and Development Department carries out Group activity in this regard

and comprises a team of 14 dedicated employees operating within the production

facilities.

The Research and Development Department avails of, where necessary, the support of

technicians and production staff for the execution and verification of specific projects.

Specifically, research and development is carried out principally in Europe and in

Central America.

These operations are performed by expert technicians, who receive ongoing upskilling

through targeted training.

Research and development focuses essentially on the following:



42

• research and design of new materials and new technical solutions for product

and packaging innovations;

• product quality testing;

• comparative analyses with competitor products in order to improve product

efficiency;

• research and design for production process innovation in order to improve

efficiency.

Over recent years, the projects created by the dedicated research and development team

have led to the creation of innovative products, such as new formulas for modelling

clay, new plastic materials and the “Giotto be-bé” felt-tip pen.

The team, in order to guarantee compliance with physical and chemical specification

rules, constantly monitors the development of product regulations (such as, for example

purposes, those concerning the use of preservatives), amending the formulas or

developing new formulas for altered products.

Research costs in 2014 incurred by the F.I.L.A. Group totalled Euro 607 thousand

(Euro 510 thousand in 2013), of which Euro 317 thousand concerning Grupo F.I.L.A.-

Dixon, S.A. de C.V. (Mexico) and Euro 290 thousand concerning the parent company

F.I.L.A. S.p.A. and were entirely charged to the income statement.

In 2014, research and development costs were not capitalised as the requirements of

IAS 38 had not been satisfied.

Euro thousands 2014 2013 2014 - 2013 Change

Development Costs Capitalised in Balance Sheet 0 0 0

Research Costs expensed to Income Statement (607) (510) (97)

RESEARCH AND DEVELOPMENT



43

Transactions with Related Parties

“Related parties” concern, in accordance with Consob Regulation No. 11971 of May

14, 1999, as subsequently amended, those parties defined by IAS 24:

a) parties which control, are controlled by, or are subject to common control of the

F.I.L.A. Group;

b) the parties subscribing, including indirectly, to shareholder agreements concerning

voting rights, where such agreements cover a majority holding;

c) the parties related to the issuer and who exercise a significant influence on the

F.I.L.A. Group;

d) parties that are attributed powers and responsibilities in order to exercise

administration, management and control of the issuer;

e) close family members of the physical persons covered in letters a), b), c), and d);

f) the parties controlled by physical persons covered in letters b), c), d) and e) or on

which the physical persons covered in letters a), b), c), d) and e) exercise a significant

influence;

g) the parties that have a majority of Directors in common with the F.I.L.A. Group.

“Transactions” concern all transfers of resources, services or obligations between

related parties, independently of whether for consideration, with the exception of

typical or normal operations and those at market conditions. Typical or normal

transactions are those which, by their object or nature, are not outside the normal course

of business of the F.I.L.A. Group and those which do not involve particular critical

factors due to their characteristics or to the risks related to the nature of the counterparty

or the time at which they are concluded; normal market conditions relate to transactions

undertaken at standard Group conditions in similar situations.

In the case of transactions with related parties, the Board of Directors must be

appropriately informed on the nature of the connection, the means for execution, the

conditions (also financial), the assessment process carried out, the interests and

underlying motives and any risk for the Group.



44

F.I.L.A. Group transactions with related parties refer to normal transactions and are

regulated at market conditions, i.e. the conditions that would be applied between two

independent parties, and are undertaken in the interests of the Group.

In particular, we highlight the relations with the following parties:

Studio Legale Salonia e Associati

Studio Legale Salonia e Associati, a partner of which is related to the majority

shareholder of the company, principally provides legal consultancy.

The transactions with this related party are outlined below.

Nuova Alpa Collanti S.r.l.

Nuova Alpa Collanti S.r.l., owned by a Board member of F.I.L.A. S.p.A., supplies glue.


Studio Zucchetti

Studio Zucchetti, a related party as managed by a Board Member of F.I.L.A. S.p.A.,

principally provides tax and administrative consultancy.


Studio Legale Pedersoli e Associati

Studio Legale Pedersoli e Associati, owned by a member of the Board of Directors of

F.I.L.A. S.p.A. principally provides legal consultancy.


Intesa Sanpaolo

Intesa Sanpaolo, with an 11.877% stake in F.I.L.A. S.p.A., has in place lending and

banking operations.




45

In accordance with Consob Communication No. 6064293 of July 28, 2006, the

following table outlines the commercial and financial transactions with related parties:

Euro thousands

COSTS

Nuova Alpa Collanti S.r.l. Trade Supplier 0 0 0 0 0 447 0 0 0 0 1,265 0 0

Studio Legale Salonia e Associati Legal Consultancy 0 0 0 0 0 18 0 0 0 0 0 261 0

Studio Zucchetti Tax & Administration Consultancy 0 0 0 0 0 115 0 0 0 0 0 211 0

Pedersoli & Associati Studio Legale Legal Consultancy 0 0 0 0 0 104 0 0 0 0 0 210 0

Intesa Sanpaolo Finance 0 0 4,968 25,456 0 0 0 0 0 2 0 32 522

Total 0 0 4,968 25,456 0 684 0 0 0 2 1,265 714 522

Operating

Costs

(Products)

Operating

Costs

(Services)

Financial

Charges

Financial

Payables

(Other)

Trade Payables Revenue from

sales

Other

Revenue

(Services)

Other

Revenue

Financial

IncomeCompany Nature

Trade

Receivables

Financial

Assets

Cash and Cash

Equivalents

Financial

Payables

(Banks)

2014 - 2013 F.I.L.A. GROUP RELATED PARTIES

FY 2014 FY 2014

Balance Sheet Income Statement

ASSETS LIABILITIES REVENUE

Euro thousands

COSTS

Nuova Alpa Collanti S.r.l. Trade Supplier 0 0 0 0 0 1 0 0 0 0 1,081 0 0

Immobiliaria Futurear Property Rental 0 0 0 0 0 0 0 0 0 0 0 1,415 0

Studio Legale Salonia e Associati Legal Consultancy 0 0 0 0 0 15 0 0 0 0 0 148 0

Studio Zucchetti Tax & Administration Consultancy 0 0 0 0 0 112 0 0 0 0 0 219 0

Pedersoli & Associati Studio Legale Legal Consultancy 0 0 0 0 0 0 0 0 0 0 0 33 0

Intesa Sanpaolo Finance 0 0 6,444 32,365 0 0 0 0 0 2 0 39 637

Total 0 0 6,444 32,365 0 127 0 0 0 2 1,081 1,854 637

Operating

Costs

(Products)

Operating

Costs

(Services)

Financial

Charges

Financial

Payables

(Other)

Trade Payables Revenue from

sales

Other

Revenue

(Services)

Other

Revenue

Financial

IncomeCompany Nature

Trade

Receivables

Financial

Assets

Cash and Cash

Equivalents

Financial

Payables

(Banks)

FY 2013 FY 2013


ASSETS LIABILITIES REVENUE

Intercompany transactions concerning F.I.L.A. S.p.A. relate solely to operations to

develop synergies between Group companies, integrating production and commercial

operations.

On this basis, the exchange of goods, services and financial transactions between the

various group companies were undertaken at competitive market conditions.

The nature and the balances of transactions of the Parent Company F.I.L.A. S.p.A. with

the companies of the F.I.L.A. Group at December 31, 2014 and December 31, 2013 are

detailed below.



46

Euro thousands

Omyacolor S.A. (France) 422 307 0 547 0 3,068 214 878 0 1,784 29 0

F.I.L.A. Hispania S.L. (Spain) 0 233 0 0 0 2,600 55 532 0 0 0 0

Licyn Mercantil Industrial Ltda

(Brazil)0 118 433 0 0 38 37 0 5 0 0 0

Dixon Ticonderoga Company

(U.S.A.)14 332 0 5 0 1,055 156 1,173 0 59 2 0

Dixon Ticonderoga Inc. (Canada) 0 9 0 0 0 0 11 0 0 0 0 0

FILALYRA GB Ltd (United Kingdom) 0 64 300 0 0 724 33 0 14 13 3 0

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

(Mexico)321 327 0 230 0 1,006 184 0 0 580 6 0

Beijing F.I.L.A.-Dixon Stationery

Company Limited (China)471 152 0 140 0 233 170 0 0 3,834 4 0

FILA Dixon Stationery (Kunshan)

Co., Ltd. (China)2,293 19 0 796 0 19 0 0 0 3,980 7 0

F.I.L.A. Chile Ltda (Chile) 0 506 0 0 0 783 33 0 0 0 0 0

FILA Argentina S.A. (Argentina) 0 979 0 0 0 384 0 0 0 0 0 0

Johann Froescheis Lyra-Bleitstitift-

Fabrik Gmbh&Co-KG (Germany)

568 205 0 218 0 816 252 0 0 925 340 0

Lyra Scandinavia AB (Sweden) 0 59 0 0 0 404 16 0 0 0 0 0

FILA Hellas SA (Greece) 0 293 0 0 0 1,202 2 0 0 0 0 0

PT. Lyra Akrelux (Indonesia) 0 0 0 0 0 76 1 0 0 0 0 0

FILA Cartorama SA PTY LTD

(South Africa)0 135 290 0 0 125 4 0 4 0 0 0

FILA Stationary and Office

Equipment Industry Ltd. Co. (Turkey)0 208 3 0 0 324 31 0 13 0 11 0

Industria Maimeri S.p.A.

(Italy)48 115 1,177 29 0 162 8 0 5 71 3 0

Fila Stationary O.O.O. (Russia) 0 435 569 0 0 300 4 0 16 0 0 0

Total 4,137 4,496 2,772 1,965 0 13,319 1,211 2,583 57 11,246 405 0

Company InventoriesTrade

Receivables

Financial

AssetsTrade payables

Financial

Income

Operating

Costs

(Products)

Operating

Costs

(Services)

ASSETS LIABILITIES REVENUE COSTS

2014 - 2013 F.I.L.A. S.P.A. INTERCOMPANY TRANSACTIONS

FY 2014 FY 2014


Financial

liabilities

Financial

Charges

Revenue

from sales

Other

Revenue Dividends



47

Euro thousands

Omyacolor S.A. (France) 320 210 0 463 0 2,385 185 902 0 1,494 46 0

F.I.L.A. Hispania S.L. (Spain) 0 359 0 0 0 2,498 25 532 0 3 0 0

Licyn Mercantil Industrial Ltda

(Brazil)0 36 81 0 0 134 21 0 2 0 0 0

Dixon Ticonderoga Company

(U.S.A.)9 224 0 0 0 815 224 1,172 0 0 0 0

Dixon Ticonderoga Inc. (Canada) 0 0 0 0 0 0 0 0 0 0 0 0

FILALYRA GB Ltd (United Kingdom) 0 44 490 0 0 526 3 0 19 0 1 0

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

(Mexico)214 312 0 91 0 885 120 0 0 330 4 0

Beijing F.I.L.A.-Dixon Stationery

Company Limited (China)4,560 176 0 0 0 304 63 0 0 7,385 11 0

F.I.L.A. Chile Ltda (Chile) 0 243 0 0 0 723 3 0 0 0 0 0

FILA Argentina S.A. (Argentina) 0 792 0 0 0 341 0 0 0 0 0 0

Johann Froescheis Lyra-Bleitstitift-

Fabrik Gmbh&Co-KG (Germany)448 177 0 95 0 406 255 597 0 623 224 0

Lyra Scandinavia AB (Sweden) 0 74 0 0 0 346 5 0 0 0 0 0

Lyra Asia PTE Ltd (Singapore) 0 8 82 0 0 0 18 0 4 95 0 0

PT. Lyra Akrelux (Indonesia) 0 0 0 0 0 51 1 0 0 0 0 0

FILA Stationary and Office

Equipment Industry Ltd. Co. (Turkey)0 247 470 0 0 305 25 0 13 125 0 0

Fila Stationary O.O.O. (Russia) 0 131 353 0 0 130 1 0 3 0 0 0

Total 5,551 3,033 1,476 649 0 9,849 949 3,203 41 10,055 286 0

Company InventoriesTrade

Receivables

Financial

AssetsTrade Payables

Financial

Income

Operating

Costs

(Products)

Operating

Costs

(Services)

ASSETS LIABILITIES REVENUE COSTS

2013 - 2012 F.I.L.A. S.P.A. INTERCOMPANY TRANSACTIONS

FY 2013 FY 2013


Financial

Liabilities

Financial

Charges

Revenue

from sales

Other

Revenue Dividends

In particular, in 2014 and 2013 the nature of transactions between F.I.L.A. S.p.A. and

the other Group companies concerned:

� sale of products/goods of F.I.L.A. S.p.A. and other Group companies;

� granting of licences for the usage of the Suger trademark by F.I.L.A. S.p.A. and

Omyacolor S.A. (France);

� concession of the licence for the usage of the Omyacolor S.A. (France) and Lyra

KG (Germany) trademarks in favour of F.I.L.A. S.p.A.;

� granting of a loan in favour of the subsidiary FILALYRA GB Ltd (United

Kingdom), of the subsidiary Lycin Mercantil Industrial Ltda (Brazil), of the

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

of the subsidiary FILA Stationery OOO (Russia), of the subsidiary FILA

Cartorama S.A. (Pty) Ltd. (South Africa) and the subsidiary Industria Maimeri

S.p.A. (Italy) by F.I.L.A. S.p.A.;



48

� dividends received by the Parent Company F.I.L.A. S.p.A. from the subsidiary

Omyacolor S.A. (France – Euro 878 thousand), the subsidiary F.I.L.A. Hispania

S.L. (Spain – Euro 532 thousand), the subsidiary Dixon Ticonderoga Co.

(U.S.A. – Euro 1,173 thousand) and the associated company Writefine Products

Private Ltd. (India – Euro 16 thousand) in 2014 totalled Euro 2,599 thousand.

� the recharging of contractually established consultancy services and provided by

the parent company F.I.L.A. S.p.A. in favour of the subsidiary Grupo F.I.L.A.-

Dixon, S.A. de C.V. (Mexico), the subsidiary Dixon Ticonderoga Company

(U.S.A.), the subsidiary Dixon Ticonderoga Inc. (Canada), the subsidiary

F.I.L.A. Chile Ltda (Chile), the subsidiary Beijing F.I.L.A.-Dixon Stationery

Company Ltd (China), the subsidiary Lyra KG (Germany), the subsidiary

Omyacolor S.A. (France), the subsidiary FILALYRA GB (United Kingdom),

the subsidiary F.I.L.A. Hispania S.L. (Spain), the subsidiary Lyra Scandinavia

AB (Sweden), the subsidiary FILA Stationary and Office Equipment Industry

Ltd. Co. (Turkey), the subsidiary Licyn Mercantil Industrial Ltda (Brazil), the

subsidiary Fila Hellas SA (Greece) and the subsidiary Fila Stationary O.O.O.

(Russia);

� the recharging of costs for sureties granted by the parent company F.I.L.A.

S.p.A. in favour of the subsidiary Lyra KG (Germany), the subsidiary FILA

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

Mercantil Industrial Ltda (Brazil), to guarantee the credit lines undertaken with

Unicredito Italiano S.p.A. and Banca Nazionale del Lavoro, as contractually

established and provided;

� the recharging of costs to the subsidiaries for insurance coverage guaranteed by

F.I.L.A. S.p.A. in favour of Omyacolor S.A. (France), the subsidiary Lyra KG

(Germany), the subsidiary Lyra Scandinavia AB (Sweden), the subsidiary

F.I.L.A. Hispania S.L. (Spain), the subsidiary FILA Stationary and Office

Equipment Industry Ltd. Co. (Turkey), the subsidiary Licyn Mercantil Industrial

Ltda (Brazil), the subsidiary Fila Hellas SA (Greece) and the subsidiary Fila

Stationary O.O.O. (Russia).



49

Significant Events in the year

� On January 3, 2014, the commercial company FILA HELLAS SA, was

incorporated in Greece with a share capital of Euro 20 thousand and held 50% by

F.I.L.A. S.p.A. in order to ensure a more comprehensive development of Group

product sales in the Balkans region.

� On March 26, 2014, F.I.L.A. S.p.A. acquired 51% of Industria Maimeri S.p.A. for

consideration of Euro 206 thousand. On March 31, 2014, Maimeri S.p.A., the

leading Italian producer and marketer of colours, paints and fine arts articles and

accessories conferred the business unit to Industria Maimeri S.p.A. for Euro 1,793

thousand. In June, a share capital increase for a total of Euro 1,214 thousand was

carried out, with the shares subscribed and paid-in by F.I.L.A. S.p.A. and by Gianni

Maimeri respectively totalling Euro 619 thousand and Euro 595 thousand.

� On May 15, 2014, 51% of the share capital of FILA Cartorama SA PTY LTD was

acquired, a company involved in the sale of F.I.L.A. Group writing, art and design

products in South Africa.



50

Subsequent Events

� On February 19, 2015, the Shareholders’ Meeting of Fila, and on February 20, 2015

the Shareholders’ Meeting of Space, approved the merger of F.I.L.A S.p.A. into

Space S.p.A.. The merger proposal drawn up in accordance with Article 2501-ter of

the Civil Code was filed at the Milan Company Registration Office (file No. 10540

of January 16, 2015). Space is a special purpose acquisition company (SPAC),

whose ordinary shares are traded on the SIV (Special Investment Vehicle) segment

of the MIV market organised and managed by Borsa Italiana S.p.A., incorporated

exclusively to carry out over a maximum period of approx. 24 months from the

initial date of trading of its ordinary shares (December 18, 2013), a significant

operation - considered as the acquisition of a company, business or business unit, in

any manner, including through business combinations on the basis of conferment or

merger, also in combination with the acquisition or the undertaking of investments.

For F.I.L.A. S.p.A. shareholders, the decision to undertake a Merger enables listing

on the Stock Market, with such being the purpose of the SPAC, and to source

sufficient capital to support the growth - also through acquisitions - of the F.I.L.A.

Group, which as noted has an international focus. The choice to list through the

Merger with Space gives greater certainty to this objective and within a quicker

timeframe compared to the planned listing project through a traditional market

offer. It was also informed by the current uncertain stock market conditions and the

opportunity for F.I.L.A. S.p.A. to tap into in a short period of time all growth

possibilities which may present at this particular historic juncture, amid a significant

drive towards concentration within the company’s operating sector. The financial

reasoning of the listing through Merger also corresponds to the organisational needs

and will result in a better operating structure for the company.

It is highlighted finally that the listing process by F.I.L.A. S.p.A. is subject to

approval by Borsa Italiana, who will set the efficacy date in addition to the date for

the merger.



51

Going concern

The Directors of F.I.L.A. S.p.A., independently of the corporate operation described in

the previous paragraph, reasonably expects that F.I.L.A. S.p.A. and all of the other

Group companies will continue operations into the foreseeable future and have prepared

the consolidated financial statements of F.I.L.A. S.p.A. on the going concern basis and

in line with the long-term economic and financial plan, which forecasts improving

results. These expectations are further supported by the financial sources available

following the conclusion of the merger between F.I.L.A. S.p.A. and Space S.p.A..

Information and Management of Financial Risks

The principal F.I.L.A. Group financial instruments include financial assets such as

current accounts and on demand deposits, loans and short and long-term bank payables.

The objective is to finance the ordinary and extraordinary operations of the F.I.L.A.

Group.

In addition, the F.I.L.A. Group has in place trade receivables and payables arising from

“core business” operations.

The management of funding needs and the relative risks is undertaken by the individual

F.I.L.A. Group companies on the basis of the guidelines drawn up by the C.F.O. of the

Parent Company F.I.L.A. S.p.A. and approved by the Chief Executive Officer.

The principal objective of these guidelines is the ability to ensure a balanced equity

structure in order to maintain a solid capital base.

The main funding instruments used by the F.I.L.A. Group are:



52

� medium/long-term loans, in order to fund capital expenditure (principally the

acquisition of controlling investments and plant and machinery) and working

capital;

� short-term loans and client advances.

The average cost of debt was in line with the Euribor/Libor at 3 and 6 months, with the

addition of a spread which depends on the type of financial instrument utilised.

Loans issued in favour of subsidiaries may be accompanied by guarantees such as

sureties and patronage letters issued by the Parent Company F.I.L.A. S.p.A..

Loans obtained by the Parent Company F.I.L.A. S.p.A. provide for financial

“covenants”, in relation to which reference should be made to paragraph: “Directors’

Report – Commitments and Guarantees”.

The main financial risks, identified and managed by the F.I.L.A. Group are the

following:

• Market risk, which may be divided into the following categories:

Currency risk

The currency used for the F.I.LA. Group consolidated financial statements is the Euro.

However, the F.I.LA. group undertakes and will continue to undertake transactions in

currencies other than the Euro, particularly as the geographic distribution of the various

Group industrial activities differs from the location of the group’s markets, with an

exposure therefore to exchange rate fluctuation risk. For this reason, the operating

results of the F.I.L.A. Group may be impacted by currency movements, both as a result

of the conversion into Euro on consolidation and changes in the exchange rates on trade

payables and receivables in currencies other than the functional currency of the various

F.I.L.A. Group companies.



53

In addition, in limited cases, where financially beneficial or where local market

conditions require such, the company may undertake debt or use funds in currencies

other than the functional currency. The change in the exchange rate may result in the

realisation or the recording of exchange gains and losses.

The F.I.LA. Group is exposed to risks deriving from exchange rate fluctuations, which

may impact on the result and on the net equity.

The principal exchange rates to which all F.I.L.A. Group companies are exposed

concern the individual local currencies and:

o the Euro as the consolidation currency;

o The US Dollar, as the base currency for international trade.

The Group has decided not to undertake derivative financial instruments to offset

currency risk arising from commercial transactions within a prospective twelve month

period (or also subsequently, where considered beneficial according to the business’s

characteristics).

The F.I.LA. Group incurs part of its costs and realises part of its revenues in currencies

other than the Euro and, in particular, in US Dollars and Mexican Pesos.

The F.I.LA. Group generally adopts an implied hedging policy to protect against this

risk through the offsetting of costs and revenues in the same currency, in addition to

acquiring funding in the local currency.

The policy adopted by the Group is considered adequate to contain currency risk.

However, it must be considered that in the future currently unpredictable movements in

the Euro may impact the economic, financial and equity position of the Group

companies, in addition to the comparability between periods.

Also in relation to the commercial activities, the companies of the Group may hold

commercial receivables or payables in currencies other than the operational currency of

the entity. This is appropriately monitored by the F.I.L.A. Group, both in relation to the

potential economic impact and in terms of financial and liquidity risk.



54

A number of F.I.L.A. Group subsidiaries are based in countries not within the

Eurozone, in particular the United States, Canada, Mexico, the United Kingdom,

Scandinavia, China, Argentina, Chile, Singapore, Indonesia, South Africa and Russia.

As the Group’s functional currency is the Euro, the income statements of these

companies are converted into Euro at the average exchange rate and, at like-for-like

revenues and margins of the local currency, changes in the exchange rate may result in

effects on the value in Euro of revenues, costs and results recognised in the

consolidation phase directly to equity in the account “Translation Differences” (See

Note 12).

In 2014, the nature and the structure of the exchange risk exposures and the Group

monitoring policies did not change substantially compared to the previous year.

Liquidity risk

The liquidity risk to which the F.I.L.A. Group is exposed may arise from an incapacity

or difficulty to source, at beneficial conditions, the financing necessary to support

operations in an appropriate timeframe.

The cash flows, financing requirements and the liquidity of the Group companies are

constantly monitored centrally in order to guarantee the efficient management of

financial resources.

The F.I.L.A. Group does not undertake derivative financial instruments for the hedging

of the above-stated risks, which are monitored according to internal procedures and

periodic commercial and financial reporting, which allows management to assess and

offset any impacts from these risks through appropriate and timely policies.

The Group continually monitors financial risks in order to offset any impacts and

undertake appropriate corrective actions.

It has adopted at the same time the following policies and processes aimed at optimising

the management of financial resources, reducing the liquidity risk:



55

� maintenance of an adequate level of liquidity;

� diversification of funding instruments and a continual and active presence on the

capital markets;

� obtaining of adequate credit lines;

� monitoring of the liquidity position, in relation to business planning.

Financial transactions are carried out with leading highly rated Italian and international

institutions.

Management believes that the funds and credit lines currently available, in addition to

those that will be generated from operating and financial activities, will permit the

Group to satisfy its requirements deriving from investment activities, working capital

management and the repayment of debt in accordance with their maturities.

The capacity to generate liquidity through operations enables the Group to reduce

liquidity risk to the minimum, which concerns the difficulty in sourcing funding to

ensure the on time discharge of financial debts.

• Interest rate risk

The F.I.L.A. Group companies utilise external funding in the form of debt and use the

liquidity available in financial assets. Changes in the market interest rates impact on

the cost and return of the various forms of loans, with an effect therefore on the net

financial charges of the Group.

The Parent Company F.I.L.A. S.p.A. issues loans (only to Group companies), drawing

on direct funding.

Bank debt exposes the F.I.L.A. Group to interest rate risk. In particular, variable rate

loans result in cash flow risk. The current F.I.L.A. Group policy is to maintain variable

rate loans, monitoring interest rate movements, without undertaking derivative financial

instruments to hedge such risks.



56

• Credit risk

The credit risk represents the exposure to potential losses following the non-fulfilment

of obligations by counterparties.

The maximum theoretical exposure to the credit risk for the Group at December 31,

2014 is the carrying value of the commercial assets recorded in the accounts, and the

nominal value of the guarantees given on debts and commitments to third parties.

The F.I.L.A. Group strives to reduce the risk relating to the insolvency of its customers

through rules which ensure that sales are made to customers who are reliable and

solvent. These rules, based on available solvency information and considering historic

data, linked to exposure limits by individual clients, in addition to insurance coverage

on overseas clients (at Group level), ensure a good level of credit control and therefore

minimise the relative risk.

According to the F.I.L.A. Group policy, customers that request extensions of payment

are subject to a credit rate check. In addition, the maturity of trade receivables is

monitored on an ongoing basis throughout the year in order to anticipate and promptly

intervene on credit positions which present greater risk levels.

The credit risk is therefore offset by the fact that the credit concentration is low, with

receivables divided among a large number of counterparties and clients.

The individual positions are written down, if individually significant, with a provision

which reflects the partial or total non-recovery of the receivable. The amount of the

write-down takes into account the estimate of the recoverable cash flows and the

relative date of collection, charges and future recovery costs, in addition to the fair

value of guarantees. Against the receivables which are not individually written down,

an individual and general provision is made, taking into account historical experience

and statistical data.



57

The principal F.I.L.A. Group financial instruments include financial assets such as

current accounts and on demand deposits, loans and short and long-term bank payables.

The objective is to finance the operating and extraordinary activities of the F.I.L.A.

Group.

In addition, the F.I.L.A. Group has in place trade receivables and payables arising from

“core business” operations.

In accordance with I.F.R.S. 7, we report the following:

� the accounting treatment by class of financial assets and liabilities at

December 31, 2014 was as follows:

Euro thousands December 31, 2014 December 31, 2013 Measurement basis

Financial assets

Cash and Cash Equivalents 32,473 35,797 Fair Value

Loans and Receivables 7 3 Fair Value

Trade and Other Receivables 76,067 67,520 Fair Value

Total financial assets 108,547 103,320

Financial liabilities

Bank Payables 88,785 95,446 Amortised Cost

Other Lenders 577 2,077 Amortised Cost

Trade and Other Payables 49,084 32,575 Fair Value

Total financial liabilities 138,444 130,096

1. financial gains and losses are recognised to the income statement:



58


Interest Income from Bank Deposits 53 56

Total financial income 53 56

Financial Assets and Liabilities at Amortised Cost (78) (83)

Exchange Gains/(Losses) on Financial Operations (140) (623)

Total financial charges (218) (706)

Total net financial charges (165) (650)

For 2014 and 2013, no financial gains and losses were directly recognised to equity.

“Loans and Receivables” at December 31, 2014 amount to Euro 7 thousand;

� loans in place at December 31, 2014 and 2013.

Loans in place at December 31, 2014 of the F.I.L.A. Group totalled Euro 91,171

thousand and at December 31, 2013 Euro 97,641 thousand.

The loans recorded in the F.I.L.A. Group financial statements are classified under

Financial Liabilities, according to their contractually established maturity, as non-

current and current, in line with “Note 13.A – Financial Liabilities”.

Euro thousands December 31, 2014 December 31, 2013

Non-current financial payables 20,134 28,297

Loans - beyond one year 20,134 28,297

Banks - Principal third parties 20,183 28,403

Banks - Interest third parties (114) (190)

Banks 20,070 28,213

Other Lenders - Principal third parties 64 84

Other lenders 64 84

They include the non-current portion of loans issued by banks and other lenders.



59

The balance at December 31, 2014 was Euro 20,134 thousand, of which Euro 20,070

thousand concerning bank loans and Euro 64 thousand loans from other lenders.


Current financial payables 71,037 69,343

Loans - due within one year 69,227 69,226

Banks - Principal third parties 68,383 66,850

Banks - Interest third parties 332 383

Banks 68,715 67,233

Other Lenders - Principal third parties 509 1,984

Other Lenders - Interest third parties 3 9

Other lenders 512 1,993

Bank Overdrafts - Principal third parties 1,810 112

Bank Overdrafts - Interest third parties 0 6

Bank overdrafts 1,810 118

The balance at December 31, 2014 was Euro 71,036 thousand, of which Euro 68,715

thousand concerning bank loans, Euro 512 thousand concerning loans issued by other

lenders and Euro 1,810 thousand bank overdrafts;

• receivables at December 31, 2014 and 2013 were as follows:


Trade and other receivables 76,067 67,520

Trade Receivables 68,734 61,317

Tax Receivables 3,502 1,517

Other Receivables 3,132 3,410

Prepayments and Accrued Income 673 599

76,040 66,843

Trade Receivables - Associates 27 677

27 677



60

• payables at December 31, 2014 and 2013 were as follows:


Trade and other payables 49,084 32,575

Trade Payables 36,968 23,035

Tax Payables 3,839 3,538

Other Payables 7,440 5,603

Accrued Liabilities and deferred Income 630 395

48,877 32,571

Trade Payables - Associates 205 4

205 4

In relation to “Trade and Other Payables” and “Trade and Other Receivables”, reference

should be made to the relative Explanatory Notes.

Sensitivity analysis

In accordance with I.F.R.S. 7 and further to that outlined in the “Directors’ Report –

Information and Management of Financial Risks”, the following is reported:

� Currency risk

Net exposure of the main currencies:

(in Euro thousands) USD MXN CAD USD MXN CAD

Trade Receivables 8,941 529,440 2,052 10,042 482,997 1,936

Financial Assets 311 4,954 0 326 765 0

Financial Liabilities (21,967) (377,651) 0 (22,466) (405,352) 0

Trade Payables (3,283) (87,950) (525) (2,601) (50,085) (383)

Net Balance sheet Exposure (15,997) 68,793 1,527 (14,698) 28,325 1,554

December 31, 2014 December 31, 2013



61

The impact on the income statement and balance sheet, both negative, following an

increase of 10% in the exchange rate of the main foreign currencies against the Euro,

would total approx. Euro 748 thousand (Euro 1,340 thousand at December 31, 2013).

Closing exchange rates applied:

2014 2013

USD /€ 1.214 1.379

MXN /€ 17.868 18.037

CAD /€ 1.406 1.467

Year-End Exchange Rate

effect of a 10% increase on the Euro exchange rate:

2014 2013

USD /€ (1,198) (1,373)

MXN /€ 350 (66)

CAD /€ 99 99

(748) (1,340)

Equity

Changes

� Interest rate risk

The current F.I.L.A. Group policy is to maintain variable interest rates, monitoring the

interest rate curve and not considering the use of derivative hedging instruments

necessary.

The financial assets and liabilities at variable rates are reported below:



62


Financial Liabilities 91,171 97,640

Financial assets/liabilities at variable rate 91,171 97,641

The financial instruments at variable rates typically include liquidity, loans granted to a

number of Group companies and part of the financial payables.

A change of 100 “basis points” in the interest rates applicable to financial assets and

liabilities at variable rates in place at December 31, 2014 would result in the following

income statement and balance sheet impacts on an annualised basis.

Euro thousands Increase Decrease

December 31, 2014

Financial Assets/Liabilities at Variable Rate 912 (912)

December 31, 2013

Financial Assets/Liabilities at Variable Rate 976 (976)

Equity

100 bp Change

The same variables are maintained to establish the income statement and balance sheet

impact at December 31, 2014.

The capital portions of financial assets and liabilities of the F.I.L.A. Group are broken

down by contractual maturity for 2014 and 2013, in line with “Note 13.A – Financial

Liabilities”:



63

December 31, 2014Within

12 months

Within

1-2 years

Within

2-3 years

Within

3-4 years

Within

4-5 years

Beyond

5 yearsTotal

Euro thousands

VARIABLE RATE

Financial assets

Cash and Cash Equivalents 32,473 0 0 0 0 0 32,473

Loans and Receivables 0 7 0 0 0 0 7


Financial liabilities - Banks 68,715 8,577 9,163 1,949 382 0 88,786

Other Lenders 512 52 8 0 0 0 572

Expected cash flow (36,754) (8,622) (9,171) (1,949) (382) 0 (56,878)

December 31, 2013Within

12 months

Within

1-2 years

Within

2-3 years

Within

3-4 years

Within

4-5 years

Beyond

5 yearsTotal

Euro thousands

VARIABLE RATE

Financial assets

Cash and Cash Equivalents 35,797 0 0 0 0 0 35,797

Loans and Receivables 0 3 0 0 0 0 3


Financial liabilities - Banks 67,233 8,503 8,428 9,086 2,196 0 95,446

Other Lenders 1,993 46 25 13 0 0 2,077

Expected cash flow (33,429) (8,546) (8,453) (9,099) (2,196) 0 (61,723)

� Credit risk

At December 31, 2014, the account “Trade and Other Receivables” totalling Euro

76,067 thousand (Euro 67,520 thousand at December 31, 2013) is reported net of the

relative doubtful debt provision of Euro 3,181 thousand (Euro 3,226 thousand at

December 31, 2013).

Below we report:

� the ageing of the trade receivables at December 31, 2014 and December 31,

2013:



64

Euro thousands Balance at 31.12.2014 Balance at 31.12.2013 Change in period

Overdue between 0-60 days 9,759 15,719 (5,960)

Overdue between 60-120 days 5,598 3,917 1,681

Overdue beyond 120 days 2,684 3,509 (825)

Not yet due 50,693 38,172 12,522

Total amount 68,734 61,317 7,417

GROSS TRADE RECEIVABLES: AGEING

� the breakdown by type of debtor at both at December 31, 2014 and December

31, 2013 was as follows:

Euro thousandsBalance at December 31, 2014

Balance at December 31,

2013Change in period

Wholesalers 29,056 25,921 3,135

School/Office Suppliers 4,425 3,948 478

Supermarkets 16,262 14,507 1,755

Retailers 6,075 2,967 3,108

Distributors 7,284 6,498 786

Promotional & B2B 2,664 2,377 287

Other 2,967 5,099 (2,133)

Third parties 68,734 61,317 7,417

TRADE RECEIVABLES THIRD PARTIES - DISTRIBUTION CHANNEL

� the breakdown by region at December 31, 2014 and December 31, 2013 was as

follows:

Euro thousandsBalance at December 31, 2014

Balance at December 31,

2013Change in period

Europe 23,323 21,063 2,260

North America 9,323 8,602 722

Central/South America 33,329 29,302 4,027

Rest of the World 2,759 2,350 408

Third parties 68,734 61,317 7,417

TRADE RECEIVABLES THIRD PARTIES - REGIONAL BREAKDOWN



65

Environment and Safety

“Environment and Safety” issues are managed at local level by the F.I.L.A. Group

companies under the applicable regulations and in accordance with the “Group policy”.

Within the F.I.L.A. Group a manager-in-charge of “Environment and Safety” is

appointed by each local entity, reporting to the respective General Managers, who in

turn report to the Parent Company F.I.L.A. S.p.A..

“Environment and Safety” for F.I.L.A. S.p.A. has been managed with the support of a

specialised consultancy firm for a number of years. The actions implemented by

F.I.L.A. S.p.A. are in line with the environmental and workplace safety regulation

(Legislative Decree Nos. 626 and No. 81 of April 9, 2008). Waste is appropriately

disposed of and its movement is properly recorded in approved registers. All

employees are assigned a competent workplace doctor (under Legislative Decree No.

81/08) and obligatory visits are provided for.

During the year no significant problems emerged in relation to the environment and

safety area. The environmental reclamation at the lands owned by the US subsidiary

relates to previous industrial activity before the acquisition by F.I.L.A. S.p.A..

Workforce

The F.I.L.A. Group workforce at the end of 2014 numbered 2,842, compared to 2,401

at the end of 2013.

The increase is principally due to the greater number of hires, particularly in the skilled

workers category at the production sites of the subsidiary Fila Dixon Stationery

(Kunshan) Co., Ltd. (China – 863), the subsidiary Grupo F.I.L.A. –Dixon, S.A. de C.V.

(Mexico – 99 employees) and the subsidiary Industria Maimeri S.p.A. (Italy – 83

employees).



66

The graph below outlines the breakdown of the F.I.L.A. Group workforce at December

31, 2014 and 2013.

-

500

1,000

1,500

2,000

2,500

3,000

Europe North America Central/South

America

Rest of World F.I.L.A. Group

2014 515 103 1,286 938 2,842

2013 435 92 1,187 687 2,401

Personnel F.I.L.A. Group

and the breakdown and movement by worker category:

Manager White-collar Blue-collar Total

Total at 31/12/2013 63 677 1,661 2,401

Increases 9 219 1,035 1,263

Decreases (14) (186) (622) (822)

Total at 31/12/2014 58 710 2,074 2,842

Restructuring Departures (10) (37) (574) (621)

PERSONNEL

The reduction in the number of personnel is principally due to the restructuring of the

Chinese production base. The transfer of production from Beijing to Kunshan resulted

in a reduction in the workforce due to the impossibility of such workers to operate at

Kunshan, with the reduction entirely supplemented by on-site hiring at the facility. The

hires at Kunshan represent the majority of personnel additions in 2014. For greater

detail, reference should be made to Note 15: Provision for risks and charges.



67

The average number of employees of the companies in the consolidation scope, by

category, is as follows:

Average headcount Manager White-collar Blue-collar Total

Total at 31/12/2013 62 664 1,721 2,446

Total at 31/12/2014 55 752 2,010 2,816

PERSONNEL

The turn-over was affected by the restructuring of the workforce, principally in terms of

the blue-collar category.

The bonuses received by F.I.L.A. Group Managers in the year were as follows:

Euro thousands Amount Nature Amount Nature

Bonus 789 Perfomance Bonus 739 Perfomance Bonus

Total amount 789 739

BENEFITS AND OTHER INCENTIVES FOR MANAGERS

FY 2014 FY 2013

In 2014, as in previous years, F.I.L.A. Group personnel undertook training and

upskilling courses, particularly in the administrative areas in order to maintain

appropriate professional standards, in line with the “Group policy”.



68

Board of Directors and Board of Statutory Auditors

In accordance with Article 19 of the By-Laws, F.I.L.A. S.p.A. is managed by a Board

of Directors comprising between three and nine members, who remain in office for

three years and may be re-elected. Their mandate concludes on the date of the

Shareholders’ Meeting called for the approval of the financial statements relating to the

final year in office.

The Board of Directors shall have the widest powers of ordinary and extraordinary

administration of the company and may therefore carry out any and all acts it deems

appropriate for attaining the corporate scope, with the sole exclusion of those attributed

by law or the by-laws to the Shareholders’ Meeting.

In accordance with the By-Laws, the Board of Directors consider mergers in the cases

provided for by Articles 2505 and 2505-bis of the Civil Code, share capital reductions

in the case of shareholder withdrawal, in addition to the setting up and discontinuation

of secondary offices, branches, agencies or representative offices in Italy or abroad, in

addition to the transfer of the registered within Italy.

In accordance with Article 20 of the By-Laws, the Shareholders’ Meeting did not

approve exceptions to the non-competition agreement as per Article 2390 of the Civil

Code in favour of individual Directors.

In accordance with Article 29 of the By-Laws, the Board of Statutory Auditors

comprises three standing members and two alternate members. The appointment of the

Board of Statutory Auditors takes place in compliance with applicable regulations. All

those meeting the professionalism, good standing and independence requirements

established by the applicable regulation may be appointed as statutory auditors.

The statutory auditors’ mandate terminates on the date of the Shareholders’ Meeting

called for the approval of the financial statements relating to the third year of the office.

The Board of Statutory Auditors comprises auditors enrolled at the Auditors’ Register

of the Ministry for Justice.



69

The following table outlines the total emoluments recognised to members of the Board

of Directors and the Board of Statutory Auditors for offices held at F.I.L.A. S.p.A., in

addition to remuneration of any nature, in the case of “performance bonuses and one-off

remuneration” received in 2014.

Emoluments for

Office

Other Remuneration

(Bonus)

Euro thousands

Directors 1,477 965

Statutory Auditors 77 0

Total amount 1,554 965

The Directors and Statutory Auditors of F.I.L.A. S.p.A. will remain in office until the

effective date of the merger with Space S.p.A..

The Shareholders’ Meeting of F.I.L.A. S.p.A. approved on April 30, 2013 the

appointment of KPMG S.p.A. for the years 2013-2014-2015 for the auditing duties as

per Article 2409-ter of the Civil Code and the audit of the financial statements of

F.I.L.A. S.p.A. and the consolidated financial statements of the F.I.L.A. Group.



70

*********************

Dear F.I.L.A. S.p.A. Shareholders,

on the basis of that outlined above, we invite you to approve the F.I.L.A. S.p.A.

financial statements at December 31, 2014 and propose the allocation of the net profit

of Euro 6,018,519.50 entirely to Retained Earnings.



71

CONSOLIDATED FINANCIAL STATEMENTS OF THE F.I.L.A.

GROUP AND THE SEPARATE FINANCIAL STATEMENTS OF

F.I.L.A. S.p.A AT DECEMBER 31, 2014



72

I. Basis of Preparation of the Explanatory Notes to the

Consolidated Financial Statements of the F.I.L.A. Group and Separate


Accounting principles and policies

The consolidated financial statements of the F.I.L.A. Group (hereafter also “Group”)

and of the Parent Company F.I.L.A. S.p.A. (hereafter also “Parent Company”,

“Company”) at December 31, 2014, prepared by the Board of Directors of F.I.L.A.

S.p.A., were drawn up in accordance with International Financial Reporting Standards

(I.F.R.S.), the relative interpretations of the International Financial Reporting

Interpretations Committee (I.F.R.I.C.) and the Standing Interpretations Committee

(S.I.C.), approved by the European Commission (hereafter I.F.R.S.) at December 31,

2014.

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

document.

IFRS were recently introduced in Italy and in other countries and numerous new

standards have been published or revised and, therefore, a consolidated practice does

not exist for their interpretation and application. Consequently, the consolidated and

separate financial statements at December 31, 2014, although prepared on the basis of

the best knowledge of the Directors of the IFRS and the relative interpretations, also in

consideration of regularly updated accounting practices, in the coming years may be

subject to amendments to take into account different interpretations to those adopted in

their preparation.

For the consolidated financial statements of the F.I.L.A. Group, the first year of

application of IFRS was 2006, while for the separate financial statements of F.I.L.A.

S.p.A. the first year of application of IFRS was 2007.



73

The IAS/IFRS standards and relative S.I.C./I.F.R.I.C. interpretations applicable to the

financial statements for the current year are illustrated below:

Accounting standards, amendments and interpretations applied from January 1,

2014

The following accounting standards, amendments and interpretations, also revised

following the annual Improvement process carried out by IASB, were applied for the

first time from January 1, 2014:

• IFRS 10 – Consolidated Financial Statements – The standard, issued by the

IASB in May 2011, replaces SIC 12 – Consolidation: Special Purpose Entities

and parts of IAS 27 – Consolidated and Separate Financial Statements,

renamed Separate Financial Statements which addresses the accounting

treatment of investments in separate financial statements. IFRS 10 introduces a

new control model applicable to all entities, including the vehicles, based on the

power exercised by the Group over these entities, on the exposure and rights to

variable returns deriving from the involvement of the Group with these entities

and on the capacity of the Group to exercise its power to influence the above-

mentioned variable returns. The IASB requires retrospective application from

January 1, 2013. The relevant bodies of the European Union concluded the

process for the approval of this standard, with application from January 1, 2014

and permitting advance adoption from January 1, 2013.

The adoption of the new standard did not result in the re-definition of the

consolidation scope.

• IRFS 11 - Joint Arrangements - The Standard was issued by the IASB in May

2011, and replaces IAS 31 – Interests in joint ventures and SIC -13 – Jointly

controlled entities – Non-monetary contributions by venturers. IFRS 11

establishes the criteria for the classification of joint arrangements based on the

rights and obligations of the agreements rather than on the legal form and

establishes the equity method as the only method to be applied to holdings in



74

joint ventures in the consolidated financial statements. Following the

amendment to the standard, IAS 28 – Investments in Associates was amended to

include in its application, from the date of efficacy of the standard, also holdings

in joint arrangements. The IASB requires retrospective application from January

1, 2013. The relevant bodies of the European Union concluded the process for

the approval of this standard, with application from January 1, 2014 and

permitting advance adoption from January 1, 2013. The adoption by the F.I.L.A.

Group of this standard did not have any significant effects on the annual report.

• IFRS 12 – Disclosure of Interests in Other Entities - The standard issued by

the IASB in May 2011 establishes the additional disclosure to be provided on all

types of investments, including those in subsidiaries, joint ventures, associates,

special purpose entities and other non-consolidated vehicle companies. The

IASB requires retrospective application from January 1, 2013. The relevant

bodies of the European Union concluded the process for the approval of this

standard, with application from January 1, 2014 and permitting advance

adoption from January 1, 2013. The effects of the adoption of the new standard

are limited to the disclosure relating to the investments in other companies to be

included in the explanatory notes to the annual consolidated financial

statements.

• IAS 27 (2011) – Separate Financial Statements – Following the issue of IFRS

10, in May 2011 the IASB limited the application of IAS 27 to separate

financial statements. This standard specifically governs the accounting

treatment of investments in separate financial statements and is applicable from

January 1, 2014. The adoption by the F.I.L.A. Group of this standard did not

have any effects on the financial statements of the Parent Company.

• IAS 28 (2011) – Investment in Associates and Joint Ventures – Following the

issue of IFRS 11 in May 2011, the IASB modified the pre-existing standard to

include within its application also investments in companies under joint control



75

and provisions for the reduction in shareholdings which does not result in

discontinuing the application of the equity method. The standard is effective as

of January 1, 2014. The adoption by the F.I.L.A. Group of this standard did not

have any effects on the annual report.

• Amendments to IAS 32 – Financial Instruments: presentation - The

amendments issued by the IASB in December 2011 clarify the application scope

of some criteria for the off-setting of financial assets and liabilities present in

IAS 32. The amendments must be applied retrospectively from January 1, 2014.

• Amendments to IFRS 10, IFRS 11 and IFRS 12 – Guide to the Transitory

Provisions – On June 28, 2012, the IASB published the amendments to the

IFRSs applicable, together with the related standards, from the years beginning

January 1, 2013, unless applied in advance. The document introduces some

amendments to IFRS 10, 11 and 12 to clarify how an investor must rectify

retrospectively only the comparative previous period and include the disclosures

as per IAS 8, paragraph 28, letter f, exempting that required by the other letters

of the same paragraph. IFRS 12 was amended further, limiting the requirement

to present comparative information for disclosures concerning structured entities

not consolidated in periods before the application date of IFRS 12.

• Amendments to IFRS 10, IFRS 12 and IAS 27 – Investment Entities – The

amendment issued by the IASB in October 2012 updates IFRS 10 clarifying the

definition of investment entities and clarifies the consolidation method. The

amendment to IFRS 12 updates the standard clarifying the disclosures to be

included and the valuations relating to the determination of the investment

entities. The amendment to IAS 27 updates the standard determining the

disclosures which the investment entity must provide where it is also a holding

company. The adoption by the F.I.L.A. Group of this standard did not have any

effects on the annual report.



76

• Amendments to IAS 36 – Disclosure on the recoverable amount of non-

financial assets - The standard, issued by the IASB in May 2013, governs the

disclosure on the recoverable value of impaired assets, if this amount is based on

the fair value net of selling costs. The amendments must be applied

retrospectively from periods beginning January 1, 2014. Advance application is

permitted for the periods for which the entity has already applied IFRS 13.

• Amendments to IAS 39 - Novation of Derivatives and Continuation of Hedge

Accounting. The standard, issued by the IASB in June 2013, clarifies that the

amendments permit continuation of hedge accounting in the case in which a

derivative financial instrument, designated as a hedge instrument, is replaced

following the application of law or regulations in order to replace the original

counterparty so as to guarantee the fulfilment of the obligation assumed and

where certain conditions are satisfied. The same amendment will be included

also in IFRS 9 – Financial instruments. The amendments must be applied

retrospectively from periods beginning January 1, 2014. The adoption by the

F.I.L.A. Group of this standard did not have any effects on the annual report.

• IFRIC 21 - Levies - The interpretation, issued by the IASB in May 2013,

provides clarification on when an entity should recognise a liability for the

payment of State taxes, with the exception of those already governed by other

standards (e.g. IAS 12 – Income taxes). IAS 37 establishes the criteria for the

recognition of a liability, one of which is the existence of a present obligation on

the entity arising from a past event (known as an obligating event). The

interpretation clarifies that the obligating event, which gives rise to a liability for

the payment of the tax, is described in the applicable regulation from which the

payment arises. IFRIC 21 is applicable in accordance with IASB from years

beginning January 1, 2014 while in accordance with European Union regulation

from June 17, 2014. The adoption by the F.I.L.A. Group of this standard did not

have any effects on the annual report.



77

Standards, amendments and interpretations applicable from January 1, 2014

not significant for the Company

• Amendments to IAS 16 and IAS 41 – Agriculture: Bearer plants – The

amendments, issued 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. The

amendments will be applicable from January 1, 2016; advance application is

permitted.

Accounting standards, amendments and interpretations approved by the

European Union, but not yet applied and adopted in advance by the Group

• Amendments to IAS 19 – Defined Benefit Plans: Employee Contributions –

The amendment, issued by the IASB in November 2013 is applicable to the

contributions to employees or to defined benefit plans. The changes simplify the

accounting of contributions which are independent of the number of years of

service. The amendments are applicable from July 1, 2014; advance application

is permitted.

• Improvements to IFRS: 2010-2012 Cycle - On December 12, 2013, the IASB

published the “Annual Improvements to IFRSs: 2010-2012 Cycle” document,

which includes the amendments to the standards within the annual improvement

process. The amendments are applicable from periods beginning July 1, 2014.

Earlier application is permitted. The principal changes relate to:

IFRS 2 Share-based payments - Amendments were made to the definitions of

“vesting conditions” and “market conditions” and further definitions were added

for “performance conditions” and “service conditions” (previously included in

“vesting conditions”).

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 IFRS 9 or IAS 39 or a non-financial asset or



78

liability. The changes in the fair value (other than measurement adjustments of

the period) are recognised in the income statement.

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

decision-maker.

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 in the recording of depreciation and

amortisation provisions when a tangible or intangible asset is revalued. 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.

IAS 24 Disclosure of Transactions with Related Parties – Clarification is

provided on the applicable provisions for the identification of related parties and

disclosures when the activities of senior management are carried out by a

management entity (and not by a legal person). In this case the management

entity is considered a related party and it is necessary to provide separate

information in relation to the provision of the services by the management

entity; it is not necessary to indicate, within the disclosures on the remuneration

of senior management, the components of the remuneration paid to the

management entity.



79

• Improvements to IFRS: 2011-2013 Cycle - On December 12, 2013, the IASB

published the “Annual Improvements to IFRSs: 2011-2013 Cycle” document,

which includes the amendments to the standards within the annual improvement

process. The amendments will be applied from periods beginning July 1, 2014

and thereafter. Earlier application is permitted. The principal changes relate to:

IFRS 1 First-time adoption of International Financial Reporting Standards -

The amendment clarifies that an entity which adopts IFRS for the first time, as

an alternative to the application of a standard currently in force at the date of the

first IAS/IFRS financial statements, may opt for the advance application of a

new standard which will replace the standard in force. The option is permitted

when the new standard allows for advance application. In addition, the same

version of the standard must be applied for all periods presented in the first

IAS/IFRS financial statements.

IFRS 3 Business Combinations – The amendments clarify the exclusion from

the application of IFRS 3 of all types of joint arrangements.

IFRS 13 Fair Value Measurement – IFRS 13 paragraph 52 (portfolio exception),

in the current version, limits to only financial assets and liabilities included

within the application of IAS 39 the possibility to undertake fair value

measurement on the basis of their net value. The amendment clarifies that the

possibility of fair value measurement on the basis of their net value also refers to

contracts within the application of IAS 39 (or IFRS 9) but which does not satisfy

the definition of financial assets and liabilities within IAS 32, such as contracts

for the purchase and sale of commodities which may be settled in cash for their

net value.

IAS 40 - Investment Property - The amendment clarifies that IFRS 3 and IAS 40

are not mutually exclusive and in determining whether the acquisition of a real

estate asset enters within the application of IFRS 3 reference should be made to

the specific indications provided by IFRS 3; on the other hand, when

determining whether the acquisition is within the application of IAS 40,

reference should be made to the specific indications of IAS 40.



80

Standards, amendments and interpretations not approved by the European

Union not yet in force and not adopted in advance by the Group

• 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 the effect of the rate regulation be presented separately

from the other accounts. The standard is applicable from January 1, 2016,

however advance application is permitted.

• Amendments to IFRS 11 Joint Arrangements – The amendments, issued by the

IASB in May 2014, provide clarification on the accounting treatment of the

acquisition of investments under joint control which constitute a business. The

amendments are applicable in retrospective manner for years beginning January

1, 2016; advance application is permitted.

• Amendments to IAS 16, Property, Plant and Equipment and IAS 38

Intangible Assets – The amendments issued by the IASB in May 2014 clarify

that the utilisation of revenue-based methods to calculate the amortisation of an

asset are not appropriate as the revenues generated from an asset which include

the utilisation of an asset generally reflect factors other than the consumption of

the economic benefits deriving from the asset. 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. The

amendments are applicable from January 1, 2016; advance application is

permitted.

• IFRS 15 – Revenues from Contracts with Clients – The standard, issued by the

IASB in May 2014, introduces a framework which establishes whether, when



81

and to what extent revenues will be recognised. The standard replaces the

principles outlined in IAS 18 – Revenue, IAS 11 – Construction Contracts and

IFRIC 13 – Customer Loyalty Programmes. IFRIC 15 is applicable from

January 1, 2017; advanced application is permitted.

• 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 will be applicable retrospectively from January 1, 2018;

advance application is permitted

• Amendment to IAS 27 Separate Financial Statements. In August 2014, the

IASB published the document Equity Method in Separate Financial Statements;

the amendments will allow entities to use the equity method to measure

investments in subsidiaries, joint ventures and associates in the separate

financial statements. The amendments will be applicable from January 1, 2016;

advance application is 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 amendments will be applicable from January 1, 2016.



82

• Improvements to IFRS: 2012-2014 Cycle. In September 2014, the IASB

published the “Annual Improvements to IFRSs: 2012-2014 Cycle”, which

incorporates the amendments to the standards within the annual improvement

process. The amendments will be applicable from January 1, 2016. Earlier

application is permitted. The principal changes relate to:

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 Financial Reporting - The document 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: Disclosure - The document introduces further

guidelines to clarify if a servicing contract constitutes a residual involvement in

an asset transferred for the purposes of the disclosure required in relation to

transferred assets.

• Amendment to IAS 1. In December 2014, the IASB published the document

“Disclosure Initiative”. The principal changes relate to: Business combinations:

An entity must not impact the understanding of its financial statements by

concealing material disclosures with irrelevant information or aggregating

significant information of a different nature or function. In addition, for partial



83

sub-totals the entity must also present the reconciliation of each sub-total with

the total in the financial statements.

Disclosures to be included in the balance sheet and statement of comprehensive

income: Specific items of profit and loss, of other statement of comprehensive

income items and balance sheet items must be disaggregated. The partial sub-

totals must: Be composed of items recognised and measured in accordance with

IFRS, be presented and labelled in order to render the items which constitute the

partial sub-totals clear and understandable; be consistent between each year.

Statement of Comprehensive Income The share of the statement of

comprehensive income of associates and joint ventures measured under the

equity method must be presented in aggregate form but separately from the rest

of the statement of comprehensive income, as one single item, classified under

items which may or may not be subsequently reclassified to the income

statement. Explanatory Notes – Structure: The entity is free to decide the order

of the items in the financial statements but must consider the effect on

comprehension and comparability of its financial statements, giving prominence

to more significant operating segments for the understanding of its financial

performance and financial position.

The amendments will be applicable from January 1, 2016. Earlier application is

permitted.

• Amendment to IFRS 10, IFRS 12 and IAS 28 – Investment Companies:

exceptions to the Consolidation Method – In December 2014, the IASB

published the document “Investment Entities: Applying the Consolidation

Exception”. The principal changes relate to:

IFRS 10 Consolidated Financial Statements – The amendments to IFRS clarify

that the exemption from the presentation of consolidated financial statements

applies to a parent company 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 but that has an investment or



84

joint investment in an investment company, when the equity method is applied,

to maintain the measurement at fair value applied by the associate of the

investment entity or joint venture for its interest in subsidiaries.

IAS 12 Disclosure on Investments in Other Entities – The amendment clarifies

that this standard is not applicable to investment companies which prepare

financial statements in which all associates are measured at fair value through

the income statement.

The amendments will be applicable from January 1, 2016 or thereafter. Earlier

application is permitted.

Basis of presentation

The consolidated and separate financial statements of F.I.L.A. S.p.A. are comprised of

the balance sheet, statement of comprehensive income, statement of changes in equity

and the explanatory notes.

In relation to the presentation of the balance sheet at December 31, 2014 the Parent

Company F.I.L.A. S.p.A., consistent with the presentation in the consolidated financial

statements, made the following choices:

• balance sheet: in accordance with IAS 1, the assets and liabilities must be classified

between current and non-current or, alternatively, according to the liquidity order.

The Company chose the classification between current and non-current;

• statement of comprehensive income: IAS requires alternatively classification based

on the nature or allocation of the items. The Company chose the classification by

nature of income and expenses;

• statement of changes in equity: IAS 1 requires that this statement illustrates the

changes in the year of each individual equity account or which illustrates the nature

of income and charges recorded in the financial statements. The Company chose to

utilise this latter in the statement, providing the reconciliation statement of the

opening and closing amounts of each item within the explanatory notes;

• cash flow statement: IAS 7 requires that the cash flow statement includes the cash



85

flows for the period between operating, investing and financing operations. The

cash flows deriving from operating activities may be represented by the direct

method or utilising the indirect method. The Company decided to utilise the

indirect method.

The financial statements of F.I.L.A. S.p.A. and the consolidated financial statements of

the F.I.L.A. Group are presented together with the Directors’ Report, to which reference

should be made in relation to the business activities, subsequent events to year-end and

transactions with related parties, the cash flow statement, the reclassified income

statement and balance sheet and the outlook.

The financial statements of F.I.L.A. S.p.A. and the consolidated financial statements of

the F.I.L.A. Group were prepared in accordance with the general historical cost

criterion.

During the year, no special circumstances arose requiring recourse to the exceptions

allowed under IAS 1.

The preparation of the financial statements and the relative notes in application of IFRS

require that management make estimates and assumptions. These estimates and relative

assumptions are based on historical experience and other factors considered reasonable

and were adopted to determine the carrying amount of the assets and liabilities which

are not easily obtained from other sources, are reviewed periodically and the effects of

each change are immediately reflected in the income statement. However as they

concern estimates, it should be noted that the actual results may differ from such

estimates reflected in the financial statements.

The estimates are used to value the provisions for risk on receivables, depreciation and

amortisation, write-down of assets, employee benefits, income taxes and other

provisions.

The accounting policies utilised in the preparation of the financial statements and the

composition and changes of the individual accounts are illustrated below.

For a better comparison of the data, the figures for the prior year were adjusted where

necessary.

All values are expressed in thousands of Euro, unless otherwise stated.



86

Introduction

The F.I.L.A. Group operates in the creativity tools market, producing writing and

design objects such as crayons, paints, modelling dough, pencils and chalk etc..

The Parent Company F.I.L.A. S.p.A., Società Italiana Lapis ed Affini (hereafter “the

Company”), is a limited liability company with registered office in Milan (Italy), Via

Pozzone 5.

Consolidation scope

In 2014, the consolidation scope changed following the full consolidation of the

following companies: Industria Maimeri S.p.A. (Italy), FILA Cartorama SA PTY LTD

(South Africa), FILA Hellas SA (Greece), Maimeri U.S.A. Inc. (U.S.A.) and Fila

Australia PTY LTD (Australia).

Although holding 50% of the voting rights, the company FILA Hellas is considered as

controlled by the FILA Group in line with the definition of control by IFRS 10, in view

of the following aspects:

- current capacity of the FILA Group, deriving from substantial rights (deadlock

clauses), to control the core activities which significantly impact upon the returns of the

entity;

- exposure of F.I.L.A to variable returns and the correlation between power and returns.

In order to render the periods uniform, adjustments were made for the consolidation of

these companies.

The accounting policies described below, adopted for the preparation of the separate

and consolidated financial statements of F.I.L.A. S.p.A., were applied consistently for

all periods considered in the present document.

The main accounting policies are described below.



87

Consolidation Principles

Subsidiaries

Subsidiaries are those companies in which the Group has the power to determine,

directly or indirectly, the financial and operating policies and to obtain the relative

benefits. Control is generally presumed when the Group holds, directly or indirectly,

more than half of the voting rights, also taking into consideration potential voting rights

that are effectively exercisable or convertible.

The subsidiaries are consolidated under the line-by-line method in the consolidated

accounts from the date in which control occurs and until the date such control ceases.

The carrying amount of the subsidiaries is eliminated against the share of equity held,

net of the share of the result for the period. The share of equity and result for the period

relating to minority shareholders are recorded separately in the balance sheet and

income statement. The accounting policies of subsidiaries are adjusted, where

necessary, to ensure uniform policies with the Group.

Investments recorded under equity method

Associates are entities in which the Group exercises a significant influence on the

financial and operating policies, although not having direct or joint control. Joint

Ventures are entities in which the Group exercises, with one or more parties, joint

control of their economic activities based on a contractual agreement. Joint control

assumes that the strategic, financial and operating decisions are taken unanimously by

the parties that exercise control.

The investments in associates and joint ventures are recorded in the separate financial

statements at cost and in the consolidated financial statements under the equity method.

Based on this method, investments are initially recognised at cost, subsequently

adjusted according to the changes in the value of the share of the Group in the equity of

the associate. The Group’s share in the result of associates and joint ventures is

recorded in a separate income statement account from the date in which significant



88

influence is exercised and until such ceases to be exercised. Where necessary, the

accounting policies of associates and joint ventures are modified in line with the

accounting policies adopted by the Group.

Business combinations

Business combinations are recognised utilising the acquisition method, based on which

the identifiable assets, liabilities, and contingent liabilities of the company acquired,

which are in compliance with the requirements of IFRS 3, are recorded at their fair

value at the acquisition date.

Deferred taxes are recorded on adjustments made to book values in line with present

values.

The application of the acquisition method due to its complexity provides for a first

phase which provisionally determines the fair values of the assets, liabilities and

contingent liabilities acquired, to permit an initial recording of the operation in the

consolidated financial statements in the year in which the business combination

occurred. This initial recording is completed and adjusted within 12 months from the

acquisition date. Amendments to initial payments which derive from events or

circumstances subsequent to the acquisition date are recorded in the income statement

for the year.

Goodwill is recognised as the difference between:

a) the sum:

o of the payment transferred;

o of the minority interest, measured aggregation by aggregation or at Fair Value

(full goodwill) or the share of the net assets identifiable attributable to

minorities;

o and, in a business combination realised in several phases, of the fair value of the

interest previously held in the acquisition, recognised to the income statement

for the year any resulting profit or loss;



89

b) the net value of the identifiable assets acquired and liabilities assumed.

The costs related to the business combination are not part of the payment transferred

and are therefore recorded in the income statement for the year.

If the Group’s interest in the fair value of the identifiable assets, liabilities and

contingent liabilities recognised exceeds the cost of the business combination, the

excess is immediately recognised in the income statement. Goodwill is periodically

reviewed to verify recovery through comparison with the fair value or the future cash

flows generated from the underlying investment.

At the end of the analysis, the goodwill acquired in a business combination is allocated,

at the acquisition date, to the individual Group cash-generating units, or to the group of

cash-generating units which should benefit from the synergies of the business

combination, independently of the fact that other assets or liabilities of the Group are

allocated to this unit or group of units. Each unit or group of units to which the goodwill

is allocated:

• represents the smallest identifiable group of assets that generates cash streams

largely independent of the cash streams from other assets or groups of assets;

• is not greater than the operating segments identified based on IFRS 8 Operating

Segments.

When the goodwill constitutes part of a cash-generating unit (cash-generating unit

group) and part of the internal activities of this unit are sold, the goodwill associated

with the activity sold is included in the book value of the activity to determine the gain

or loss deriving from the sale. The goodwill sold in these circumstances is measured on

the basis of the relative values of the activities sold and of the portion of the unit

maintained.

When the sale relates to a subsidiary, the difference between the sales price and the net

assets plus the accumulated translation differences and the residual goodwill is recorded

in the income statement.

On first-time adoption of IFRS, the Group chose not to apply IFRS 3 in retrospective

manner for acquisitions prior to the transition date to IAS/IFRS; consequently, the



90

goodwill resulting from the acquisitions prior to this date was maintained at the

previous value determined in accordance with Italian GAAP and is periodically subject

to an impairment test.

In the event of purchase and sale of minority interests, the difference between the

acquisition cost, as determined above and the share of equity acquired from third parties

or sold is directly attributed to the reduction/increase of the consolidated equity.

Inter-company transactions

Profits arising from transactions between fully consolidated companies, not yet realised

with third parties, are eliminated.

The losses deriving from transactions between fully consolidated companies are

eliminated except when they represent an impairment in value. The effects deriving

from reciprocal payables and receivables, costs and revenues, as well as financial

income and charges between consolidated companies are eliminated.

Foreign currency transactions

Foreign currency transactions are translated into the functional currency of each Group

entity at the exchange rate at the date of the transaction. The monetary accounts in

foreign currencies at the reporting date are translated into the functional currency using

the exchange rate at the same date. The non-monetary accounts measured at fair value

in foreign currencies are translated using the exchange rate when the fair value was

determined. The exchange differences are generally recorded in the income statement.

The non-monetary accounts measured at historical cost in foreign currencies are not

translated.

Foreign entities

The assets and liabilities of foreign entities, including the goodwill and adjustments to

fair value deriving from the acquisition, are translated into Euro utilising the exchange



91

rate at the reporting date. The revenues and costs of foreign entities are translated into

Euro utilising the exchange rate at the transaction date. The exchange differences are

recorded under other items in the statement of comprehensive income and included in

the translation reserve, with the exemption of exchange differences which are attributed

to minority interests.

The exchange rates adopted for the conversion of local currencies into Euro are as

follows (source: Official Italian Exchange Rates):

Currency

Average Exchange Rate

2014

Closing Exchange Rate

at 31.12.2014

Argentinean Peso 10.7745 10.2755

Canadian Dollar 1.4669 1.4063

Chilean Peso 757.0586 737.2970

Chinese Renminbi 8.1882 7.5358

UK Sterling 0.8064 0.7789

Mexican Peso 17.6621 17.8679

US Dollar 1.3288 1.2141

Indonesian Rupiah 15,750.1250 15,076.1000

Swedish Crown 9.0969 9.3930

Singapore Dollar 1.6830 1.6058

Turkish Lira 2.9070 2.8320

Brazilian Real 3.1228 3.2207

Indian Rupee 81.0689 76.7190

Russian Ruble 51.0113 72.3370

South Africa Rand 14.4065 14.0353



92

Accounting policies of the Consolidated & Separate Financial

Statements

Intangible assets

An intangible asset is a clearly identifiable non-monetary asset without physical

substance, subject to control and capable of generating future economic benefits. These

assets are recorded at purchase and/or production cost, including the directly

attributable costs, net of accumulated amortization and any loss in value.

The interest charge on loans for the purchase and the construction of intangible assets,

which would not have been incurred if the investment was not made, are not capitalised.

• Intangible assets with indefinite useful lives

Intangible assets with indefinite useful lives mainly consist of assets which do not have

limitations in terms of useful life as per contractual, legal, economic and competitive

conditions. This category includes only the “goodwill” account. Goodwill is

represented by the excess of the purchase cost incurred compared to the net fair value at

the acquisition date of assets and liabilities or of business units. The goodwill relating to

investments measured at equity is included in the value of the investments.

This is not subject to systematic amortisation but an impairment test is made annually

on the carrying amount in the accounts. This test is made with reference to the “cash

generating unit” to which the goodwill is attributed. Any reduction in value of the

goodwill is recorded where the recoverable value of the goodwill is lower than the

carrying amount; the carrying amount is the higher between the fair value of a cash

generating unit, less selling costs, and the value in use, represented by the present value

of the estimated revenue streams for the years of operation of the cash generating units

and deriving from its disposal at the end of the useful life.

The principal assumptions adopted in the determination of the value in use of the “cash

generating units”, or rather the present value of the estimated future cash flows which is



93

expected to derive from the continuing use of the activities, relates to the discount rate

and the growth rate.

In particular, the F.I.L.A. Group utilised the discount rate which it considers correctly

expresses the market valuations, at the date of the estimate, of the present value of

money and the specific risks related to the individual cash generating units.

The operating cash flow forecasts derive from the most recent budgets and plans

prepared by the F.I.L.A. Group for the next three years.

The cash flow forecasts refer to current business conditions, therefore they do not

include cash flows related to events of an extraordinary nature.

The forecasts are based on reasonableness and consistency relating to future general

expenses, expected capital investments, financial conditions, as well as macro-

economic assumptions, with particular reference to increases in product prices, which

take into account expected inflation rates. The results of the “impairment tests” did not

generate, in the current or previous year, permanent losses in value.

In the event of a write-down for impairment, the value of goodwill may not be restated.

Reference should be made to Note 1 of the separate and consolidated financial

statements of the Group for further information on the indicators utilised for the

impairment analysis.

• Intangible assets with finite useful lives

Intangible assets with finite useful lives are amortised systematically on a monthly basis

over the useful life of the asset, which is an estimate of the period in which the assets

will be utilised by the enterprise. Amortisation commences when the asset is available

for use.

The amortisation policies adopted by the Group provide for the following useful lives:

o Trademarks: based on the useful life

o Concessions, Licences and Patents: based on the duration relating to the right

under concession or license and based on the duration of the patent

o Other intangible assets: 3 years



94

Research and development costs

Research and development costs are recorded in the income statement in the year

incurred, with the exception of development costs recorded under intangible assets,

when they satisfy the following conditions:

o the project is clearly identified and the related costs are reliably identifiable and

measurable;

o the technical feasibility of the project is demonstrated;

o the intention to complete the project and sell the assets generated from the

project are demonstrated;

o a potential market exists or, in the case of internal use, the use of the intangible

asset is demonstrated for the production of the intangible assets generated by the

project;

o the technical and financial resources necessary for the completion of the project

are available;

o the intangible asset will generate probable future economic benefits.

Amortisation of development costs recorded under intangible assets begins from the

date in which the result generated from the project is commercialised. Amortisation is

calculated, on a straight-line basis, over the useful life of the project.

Property, plant and equipment

Property, plant and equipment are measured at purchase cost, net of accumulated

depreciation and any loss in value. The cost includes all charges directly incurred for

the purchase and/or production. The interest charge on loans for the purchase and the

construction of tangible fixed assets, which would not have been incurred if the

investment was not made, are not capitalised but expensed to the income statement

based on the accruals of the costs. Where an asset relating to property, plant and

equipment is composed of various components with differing useful lives, these

components are recorded separately (significant components) and depreciated

separately.

The expense incurred for maintenance and repairs are directly charged to the income

statement in the year in which they are incurred. The costs for improvements,



95

modernisation and transformation of an incremental nature of tangible fixed assets are

allocated as an asset.

The purchase price or construction cost is net of public grants which are recognised

when the conditions for their concession are confirmed. At the date of the present

financial statements there are no public grants recorded as a reduction within “Property,

Plant and Equipment”.

The initial value of property, plant and equipment is adjusted for depreciation on a

systematic basis, calculated on a straight-line basis monthly, when the asset is available

and ready for use, based on the estimated useful life.

The estimated useful lives for the current and previous years are as follows:

o Buildings 25 years

o Plant and machinery 8.7 years

o Equipment 2.5 years

o Other intangible assets:

o Office equipment: 8.3 years

o Furniture and EDP: 5 years

o Transport vehicles: 5years

o Motor vehicles: 4 years

o Other: 4 years

• Finance leases

The assets held through finance lease contracts, where the majority of the risks and

rewards related to the ownership of an asset have been transferred to the F.I.L.A.

Group, are recognised as assets at their fair value or, if lower, at the present value of the

minimum lease payments, including any redemption amounts to be paid. The

corresponding liability due to the lessor is recorded under “Financial Liabilities”. The

assets are depreciated applying the criteria and rates previously indicated for the

account “Property, Plant and Equipment”, except where the duration of the lease



96

contract is lower than the useful life and there is not a reasonable certainty of the

transfer of ownership of the asset at the normal expiry date of the contract; in this case,

depreciation is over the duration of the lease contract.

The leased assets where the lessor bears the majority of the risks and rewards related to

an asset are recorded as operating leases. Costs related to operating leases are

recognised on a straight-line basis over the duration of the lease.

• Impairment of non-financial assets

At each reporting date, the tangible and intangible fixed assets are analysed to identify

the existence of any indicators, either internally or externally to the Group, of

impairment. Where these indications exist, an estimate of the recoverable value of the

above-mentioned assets is made, recording any write-down in the income statement. In

the case of goodwill and other indefinite intangible assets, this estimate is made

annually independently of the existence of such indicators. The recoverable value of an

asset is the higher between the fair value less costs to sell and its value in use. The fair

value is estimated on the basis of the values in an active market, from recent

transactions or on the basis of the best information available to reflect the amount which

the entity could obtain from the sale of the asset. The value in use is the present value of

the expected future cash flows to be derived from an asset. In defining the value in use,

the expected future cash flows are discounted utilising a pre-tax discount rate that

reflects the current market assessment of the time value of money, and the specific risks

of the asset.

For an asset that does not generate sufficient independent cash flows, the realisable

value is determined in relation to the cash-generating unit to which the asset belongs. A

reduction in value is recognised in the income statement when the carrying amount of

the asset, or of the cash-generating unit to which it is allocated, is higher than the

recoverable amount.

The losses in value of cash-generating units are firstly attributed to the reduction in the

carrying amount of any goodwill allocated to the cash-generating unit and, thereafter, to

a reduction of other assets, in proportion to their carrying amount. The losses relating to



97

goodwill may not be restated. In relation to assets other than goodwill, where the

reasons for the write-down no longer exist, the book value of the asset is restated

through the income statement, up to the value at which the asset would be recorded if

no write-down had taken place and amortisation had been recorded.

Current and non-current financial assets

Financial assets are initially recognised at fair value.

After initial recognition, financial assets are measured at fair value, without any

deduction for transaction costs which may be incurred in the sale or other disposal, with

the exception for the following “Financial Assets”:

o “Loans and Receivables”, as defined in paragraph 9 of IAS 39, which must

be measured at amortised cost utilising the effective interest criterion;

o investments held-to-maturity, as defined in paragraph 9 of IAS 39, which

must be measured at amortised cost utilising the effective interest criterion;

o investments in equity instruments which do not have a listed market price on

an active market and whose fair value may not be reliably measured and

related derivatives and which must be settled with the delivery of these non-

listed equity instruments, which must be measured at cost.

• Impairment of financial assets

Financial assets are measured at each reporting date to determine whether there is any

indication that an asset may have incurred a loss in value. A financial asset has

incurred a loss in value if there is an objective indication that one or more events had a

negative impact on the estimated future cash flows of the asset. A loss in value of a

financial asset measured at amortised cost corresponds to the difference between the

book value and the present value of the estimated cash flows discounted at the original

effective interest rate. The loss in value of financial asset available-for-sale is

calculated based on the fair value of the asset.



98

Financial assets individually recorded are measured separately to determine if they have

incurred a loss in value. The other financial assets are cumulatively measured, for

groups with similar credit risk characteristics. All the losses are recognised in the

income statement. Any accumulated loss of a financial asset available-for-sale

previously recognised in equity is transferred to the income statement.

Losses in value are restated if subsequently the increase in value can be objectively

associated to an event which occurred after the reduction in value. For financial assets

measured at amortised cost and financial assets available-for-sale corresponding to debt

securities, the restated amount is recognised in the income statement. For financial

assets available-for-sale corresponding to equity securities, the restated amount is

recognised directly to equity.

Cash and cash equivalents

Cash and cash equivalents principally include cash, bank deposits on demand and other

highly liquid short-term investments (converted into liquidity within ninety days). They

are measured at fair value and the relative changes are recorded in the income

statement. Bank overdrafts are classified under “Current Financial Liabilities”.

Trade and other receivables

Trade and other receivables are measured, on initial recognition, at fair value. Initial

book value is subsequently recorded at amortised cost adjusted to account for

redemptions in principal, any write-downs and amortisation of the difference between

the redemption value and initial book value. 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 book value

(amortised cost method). When there is an indication of a reduction in value, the asset is

reduced to the value of the discounted future cash flows obtainable. Impairments are

recognised to the income statement. When, in subsequent periods, the reasons for the



99

write-down no longer exist, the value of the assets is restated up to the value deriving

from the application of the amortised cost where no write-down had been applied.

The doubtful debt provision is accrued to record receivables at realisable value,

including write-downs for any indicators of a reduction in value of trade receivables.

The write-downs, which are based on the most recent information and on the best

estimates of the Directors, are made so that the assets are reduced to the present value

of the expected future revenue streams.

The doubtful debt provision is recorded as a direct reduction.

These provisions are classified in the income statement account “Write-downs”; the

same classification was used for any utilisations.

Inventories

Inventories of raw materials, semi-finished and finished products are measured at the

lower of purchase or production price, including accessory charges, determined in

accordance with the weighted average cost method, and the net realisable value. Net

realisable value is the estimated selling price in the ordinary course of business, less the

estimated costs of completion and the estimated selling costs.

Obsolete and slow-moving inventories are written down in relation to their possible

utilisation or realisable value.

The purchase cost is utilised for direct and indirect materials, purchased and utilised in

the production cycle. The production cost is however used for the finished products or

in work-in-progress.

For the determination of the purchase price, consideration is taken of the actual costs

sustained net of commercial discounts.

Production costs include, in addition to the costs of the materials used, as defined

above, the direct and indirect industrial costs allocated. The indirect costs were

allocated based on the normal production capacity of the plant.

Distribution costs were excluded from purchase cost and production cost.

Provisions for risks and charges (current and non-current)



100

Provisions are recorded when:

o it is probable the existence of a present obligation, legal or implicit, deriving

from a past event;

o it is probable that compliance with the obligation will result in a charge;

o the amount of the obligation can be estimated reliably.

Provisions are recorded at the value representing the best estimate of the amount that

the company would reasonably pay to discharge the obligation or to transfer it to a third

party. When the financial effect of time is significant and the payment dates of the

obligations can be reliably estimated, the provision is discounted. The rate used in the

determination of the present value of the liability reflects the current market values and

includes the further effects relating to the specific risk associated to each liability. The

increase of the provision due to the passage of time is recognised in the income

statement account “Financial income/(charges)”.

The provisions are periodically updated to reflect the changes in the estimate of the

costs, of the time period and of the discount rate; the revision of estimates are recorded

in the same income statement accounts in which the provision was recorded, or when

the liability relates to an asset, against the asset account to which it refers.

The explanatory notes illustrate the potential liabilities represented by: (i) possible

obligations (but not probable) deriving from past events, whose existence will be

confirmed only on the occurrence or otherwise of one or more uncertain future events

not fully under the control of the entity; (ii) current obligations deriving from past

events whose amount cannot be reliably estimated or whose fulfilment will likely not

incur a charge.

• Restructuring provision

The Group records a restructuring provision only in the event there is an implied

restructuring obligation and there exists, at the same time, a detailed formal programme

which has raised a valid expectation in those affected that it will carry out the



101

restructuring by starting to implement that plan or announcing its main features to those

affected by it.

Employee benefits

• Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the entity

pays fixed contributions to a separate entity and will not have a legal or implied

obligation to pay further contributions. The contributions to be paid to defined

contribution plans are recognised as costs in the income statement when incurred.

Contributions paid in advance are recognised under assets up to the advanced payment

which will determine a reduction in future payments or a reimbursement.

• Defined benefit plans

Defined benefit plans are post-employment benefit plans other than defined

contribution plans. The net obligation of the Group deriving from defined benefit plans

is calculated separately for each plan estimating the amount of the future benefit which

the employees matured in exchange for the services provided in the current and

previous years; this benefit is discounted to calculate the present value, while any costs

relating to past services not recorded in the financial statements and the fair value of

any assets to service the plan are deducted from liabilities. The discount rate is the

return, at the reporting date, of the primary obligations whose maturity date

approximates the terms of the obligations of the Group and which are expressed in the

same currency in which it is expected the benefits will be paid. The calculation is made

by an independent actuary utilising the projected credit unit method. Where the

calculation generates a benefit for the Group, the asset recognised is limited to the total,

net of all costs relating to past services not recognised and the present value of all

economic benefits available in the form of refunds from the plan or reductions in future

contributions to the plan. Where improvements are made to the plan benefits, the

portion of increased benefits relating to past services is recognised as an expense on a



102

straight-line basis over the average period until the benefits become vested. If the

benefits mature immediately, the cost is recognised immediately in the income

statement.

The Group records all actuarial gains and losses from a defined benefit plan directly and

immediately to equity, as the Group does not apply the corridor method.

In relation to the Post-Employment Benefit Provision, following the amendments to

Law No. 296 of December 27, 2006 and subsequent Decrees and Regulations (“Pension

Reform”) issued in the first months of 2007, the Parent Company F.I.L.A. S.p.A.

adopted the following accounting treatment:

o the Post-Employment Benefit Provision matured at December 31, 2006 is

considered a defined benefit plan as per IAS 19. The benefits guaranteed to

employees, under the form of the Post-Employment Benefit Provision, paid on

the termination of employment, are recognised in the period the right matures.

The relative liability is determined based on actuarial assumptions and the

effective payable matured and not settled at the reporting date, applying criteria

in accordance with current regulations. The discounting process, based on

demographic and financial assumptions, is undertaken applying the “Projected

Unit Credit Method” by professional actuaries. Under this method the valuation

is based on the average present value of the pension obligations matured based

on the employment service up to the time of the valuation. In consideration of

the new provisions introduced by the reform, the component related to the

expected future salary increases was excluded from the discounting calculation

from January 1, 2007;

o the Post-Employment Benefits matured from January 1, 2007 are considered a

defined contribution plan and therefore the contributions matured in the period

were fully recognised as a cost and recorded as a payable in the account “Post-

Employment Benefit Provision”, after deduction of any contributions already

paid.

It is also noted that the difference resulting from the re-measurement of the Post-

Employment Benefit Provision matured at December 31, 2006 on the basis of the new



103

assumptions introduced by the Pension Reform was fully recognised in the income

statement in the account “Labour Costs”.

• Other long-term employee benefits

The net obligation of the Group for long-term employee benefits, other than those

deriving from pension plans, corresponds to the amount of the future benefits which

employees matured for services in current and previous years. This benefit is

discounted, while the fair value of any assets is deducted from the liabilities. The

discount rate is the return, at the reporting date, of the primary obligations whose

maturity date approximates the terms of the obligations of the Group. The obligation is

calculated using the projected unit credit method. Any actuarial gains or losses are

recorded in the balance sheet in the year in which they arise.

• Employee termination benefits

Employee termination benefits are recorded as costs when the Group has committed, in

a demonstrable way and without a realistic possibility of withdrawal, to a formal

detailed plan that provides for the termination of employment before the normal

retirement date or following an offer prepared to encourage voluntary redundancy. In

the case of an offer made by the Group to encourage voluntary redundancy, the

measurement of termination benefits shall be based on the number of employees

expected to accept the offer.

• Short-term employee benefits

Short-term employee benefits are recorded as non-discounted expenses when the

services to which they arise are provided.

The Group records a liability for the amount that it expects will be paid in the presence

of a present obligation, legal or implicit, as a consequence of past events and for which

the obligation can be reliably estimated.



104

Financial liabilities (current and non-current)

Financial liabilities are initially recognised at fair value, including directly attributable

transaction costs. Subsequently these liabilities are measured at amortised cost. In

accordance with this method all the accessory charges relating to the provision of the

loan are recorded as a direct change of the payable, recording any differences between

cost and repayment amount in the income statement over the duration of the loan, in

accordance with the effective interest rate method.

Trade and other payables

Trade and other payables are measured on initial recognition at fair value. Initial book

value is subsequently adjusted to account for redemptions in principal and amortisation

of the difference between the redemption value and initial book value. 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 related to

the liabilities and the initial book value (amortised cost method).

When there is a change in the cash flows and it is possible to estimate them reliably, the

value of the payables are recalculated to reflect this change, based on the new present

value of the cash flows and on the internal yield initially determined.

Current, deferred and other taxes

Income taxes include all the taxes calculated on the assessable income of the Company

applying the tax rates in force at the date of the present report

Income taxes are recorded in the income statement, except those relating to accounts

directly credited or debited to equity, in which case the tax effect is recognised directly

to equity.

Other taxes not related to income, such as taxes on property and share capital, are

included under other operating charges (“Service costs”, “Rent, lease and similar” and

“Other charges”). The liabilities related to indirect taxes are classified under “Other

Payables”.



105

Deferred tax assets and liabilities are determined in accordance with the global

assets/liability method and are calculated on the basis of the temporary differences

arising between the carrying amounts of the assets and liabilities and the corresponding

values recognised for tax purposes, taking into account the tax rate within current fiscal

legislation for the years in which the differences will reverse, with the exception of

goodwill not fiscally deductible and those differences deriving from investments in

subsidiaries for which it is not expected the cancellation in the foreseeable future, and

on the tax losses carried forward.

“Deferred Tax Assets” are classified under non-current assets and are recognised only

when there exists a high probability of future assessable income to recover the asset.

The recovery of the “Deferred Tax Assets” is reviewed at each reporting date and for

the part for which recovery is no longer probable recorded in the income statement.

Revenues and costs

Revenue recognition

The revenues and income are recorded net of returns, discounts, rebates and premiums

as well as direct taxes related to the sale of products and services. In particular, the

revenues for the sale of products are recognised when the risks and rewards of

ownership are transferred to the buyer. This normally occurs on shipping of the goods.

Recognition of costs

Costs are recorded when relating to goods and services acquired or consumed in the

year or when there is no future utility.

The costs directly attributable to share capital operations are recorded as a direct

reduction of equity.

Commercial costs relating to the acquisition of new clients are expensed to the income

statement when incurred.



106

Financial income and charges

Financial income includes interest income on liquidity invested, dividends received and

income from the sale of available-for-sale financial assets. Interest income is recorded

in the income statement on an accruals basis utilising the effective interest method.

Dividend income is recorded when the right of the Group to receive the payment is

established which, in the case of listed securities, corresponds to the coupon date.

Financial charges include interest on loans, discounting of provisions, dividends

distributed on preference shares reimbursable, changes in the fair value of financial

assets recorded through P&L and losses on financial assets. Finance costs are recorded

in the income statement utilising the effective interest method. The currency operations

are recorded as the net amount.

Other accounting policies

Dividends

Dividends recognised to shareholders are recorded on the date of the Shareholders’

Meeting resolution.

Treasury shares

Treasury shares are recorded as a reduction of equity. The original cost of the treasury

shares and the revenues deriving from any subsequent sale are recognised as equity

movements.

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 per share coincide with the basic



107

earnings per share as there are no potential ordinary shares (financial instruments or

other contracts which may entitle its holder to ordinary shares).

Use of estimates

The preparation of the financial statements require the Directors to apply accounting

principles and methods that, in some circumstances, are based on difficulties and

subjective valuations and estimates based on the historical experience and assumptions

which are from time to time considered reasonable and realistic based on the relative

circumstances. The application of these estimates and assumptions impact upon the

amounts reported in the financial statements, such as the balance sheet, the income

statement and the cash flow statement, and on the disclosures in the notes to the

accounts. The final outcome of the accounts in the financial statements, which use the

above-mentioned estimates and assumptions, may differ from those reported in the

financial statements due to the uncertainty which characterises the assumptions and

conditions upon which the estimates are based.

The accounting principles which require greater judgement by the Directors in the

preparation of the estimates and for which a change in the underlying conditions or the

assumptions may have a significant impact on the condensed financial statements are

briefly described below.

o Measurement of receivables: trade receivables are adjusted by the doubtful debt

provision, taking into account the effective recoverable value. The calculation of

the write-downs requires the Directors to make valuations based on the

documentation and the information available relating to the solvency of the

clients, and from market and historical experience.

o Measurement of goodwill and indefinite intangible assets: in accordance with

the accounting principles applied by the Group, the goodwill and the intangible

assets are subject to an annual verification (“impairment test”) in order to verify

whether a reduction in value has taken place, which is recorded as a write-down,

when the net book value of the cash-generating unit to which the asset is

allocated is higher than the recoverable value (defined as the higher value



108

between the value in use and the fair value of the asset). The verification of the

value requires the Directors to make valuations based on the information

available within the Group and from the market, as well as historical experience.

In addition, when it is determined that there may be a potential reduction in

value, the Group determines this through using the most appropriate technical

valuation methods available. The same verifications of value and the same

valuation techniques are applied on the intangible and tangible assets with a

finite useful life when there are indications of the difficulty for the recovery of

the relative net book value through its use. The correct identification of the

indicators of the existence of a potential reduction in value as well as the

estimates for their determination depends on factors which may vary over time

impact upon the valuations and estimates made by the Directors.

o Risk provisions: the identification of the existence of a present obligation (legal

or implied) in some circumstances may be difficult to determine. The Directors

evaluate these factors case-by-case, together with the estimate of the amount of

the economic resources required to comply with the obligation. When the

Directors consider that a liability is only possible, the risks are disclosed in the

notes under the section on commitments and risks, without any provision.

o Measurement of inventories: inventories of products which are obsolescence or

slow moving are periodically subject to valuation tests and written down where

the recoverable value is lower than the book value. The write-downs are made

based on assumptions and estimates of management deriving from experience

and historic results.

o Pension plans and other post-employment benefits: the companies of the Group

participate in pension plans and other post-employment benefits in various

countries; in particular in Italy, Germany, the United States, France, Canada and

Mexico. Management utilises multiple statistical assumptions and valuation

techniques with the objective of anticipating future events for the calculation of

the charges, liabilities and assets relating to these plans. The assumptions relate

to the discount rate, the expected return of the plan assets and the rate of future



109

salary increases. In addition, the actuarial consultants of the Group utilise

subjective factors, for example mortality and employee turnover rates.



110

Consolidation scope

F.I.LA. S.p.A. and its subsidiaries operate in the stationary sector.

At December 31, 2014, the consolidation scope was as follows:

� F.I.L.A. S.p.A. (Italy), the Parent Company, with registered office in Milan, via

Pozzone, 5;

� Omyacolor S.A. (France), with registered office in Saint Germain la Ville, Share

Capital of Euro 8,835,360 fully paid-in (held 94.94% by F.I.LA. S.p.A. and

5.05% by Lyra KG);

� F.I.L.A. Hispania S.L. (Spain) with registered office in Parets del Valles

(Barcelona) P.I. Autopista Sud Paseo Fluvial 4, Share Capital of Euro 93,007

fully paid-in (held 96.77%);

� Lycin Mercantil Industrial Ltd (Brazil), with registered office at Rua Tiguassu,

165, Jardim Yamberê, Diadema, Sao Paulo (Brazil), Share Capital of Real

1,305,000 fully paid-in (held 99.99%);

� Dixon Ticonderoga Company (U.S.A.), with registered office at 195

International Parkway Heathrow, FL 32746, Share Capital of USD 84.89 fully

paid-in (held 100%);

� FILALYRA GB Ltd (United Kingdom), with registered office at 23 Maxwell

Road, Woodston, Peterborough - Cambs, PE 2 7JD, Great Britain, Share Capital

of GBP 640 fully paid-in (held 100%);

� Beijing F.I.L.A.-Dixon Stationery Company Limited (China), with registered

office in 16 Yaoxinzhuang Village, Zhangjawan Town, Tongzhou District -



111

Beijing, China 101113, Share Capital of Renminbi 35,529,591 fully paid-in

(held 100%);

� Xinjiang F.I.L.A.-Dixon Plantation Co. Ltd (China), with registered office at

Chabuchaer Xibo Autonomous Country, Yili Kazakstan Autonomous State,

Xinjiang Uygur Autonomous Region, Share Capital of Renminbi 3,000,000

fully paid-in (held 100%);

� Fila Dixon Stationary (Kunshan) Co., Ltd. (China), with registered office at 211,

Jiguang Zhonglu, Qiandeng, 215343 Kunshan City, Jiangsu Province, Share

Capital of Renmimbi 25,000,000 fully paid-in (held 100%);

� Dixon Ticonderoga Inc. (Canada), with registered office at 210 Pony Drive Unit

1, Newmarket, Share Capital of CAD 121,829 fully paid-in (held 100%);

� Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico), with registered office at

Autopista México-Querétaro Km 33.5, number 104, Lecheria, Tultitlán, Estado

de México 54940, Share Capital of MXN 32,317,165 fully paid-in (held 100%).

The company Grupo F.I.L.A.-Dixon, S.A. de C.V. in turn holds the following

investments:

� 99.998% in Servidix, S.A. de C.V., with registered office at Autopista

México-Querétaro Km 33.5, number 104-B, Lecheria, Tultitlán, Estado

de México 54940, Share Capital of MXN 50,000 fully paid-in and with

corporate purpose the provision of administrative services to the parent

company;

� 99.99% in Dixon Comercializadora, S.A. de C.V., with registered office

at Autopista México-Querétaro Km 33.5, number 104-C, Lecheria,

Tultitlán, Estado de México 54940, Share Capital of MXN 70,000,000

fully paid-in and whose corporate purpose is the production and

purchase/sale of writing articles;

� 99.998% in Dixon Ticonderoga de Mexico, S.A. de C.V., with registered

office at Autopista México-Querétaro Km 33.5, number 104-A,



112

Lecheria, Tultitlán, Estado de México 54940, Share Capital of MXN

50,000 fully paid-in and whose corporate purpose is the provision of

production services;

� 99.998% in Dixon Mexico, S.A. de C.V., with registered office at

Autopista México-Querétaro Km 33.5, number 104-A bis, Lecheria,

Tultitlán, Estado de México 54940, Share Capital of MXN 50,000 fully

paid-in and whose corporate purpose is the provision of personnel

services for production;

� F.I.L.A. Chile Ltda (Chile), with registered office at San Ignacio 300, Bodega C,

Quilicura, CP 8710030, Santiago de Chile, Chile, Share Capital of CLP

5,428,993,000 fully paid-in (held 100%);

� FILA Argentina S.A. (Argentina), with registered office at La Calandrai 465

B1607CTA Villa Adelina, Buenos Aires, Share Capital of ARS 932,684 fully


� “Johann Froescheis Lyra-Bleitstitift-Fabrik GmbH&Co-KG” (“Lyra KG” -

Germany), with registered office at Willstätterstraße 54-56, 90449 Nuremberg,

Share Capital of Euro 2,120,000 fully paid-in (held 100%);

� Lyra-Bleitstitift-Fabrik Verwaltungs GmbH (Germany), with registered office at

Fritz-Haber-Straße 9, 90449 Nuremberg, Share Capital of Euro 52,000 fully


� Lyra Scandinavia AB (Sweden), with registered office at Signalgatan 2, 44240

Kungälv, Share Capital of SEK 100,000 fully paid-in (held 80%);

� PT. Lyra Akrelux (Indonesia), with registered office at JL. Raya Gading Batavia

Block LC.8 NO.31, Kelapa Gading Permai, Jakarta 14240, Share Capital of IDR

1,996,250,000 fully paid-in (held 52%);



113

� Lyra Asia PTE Ltd (Singapore), with registered office at Blk 5012 Ang Mo Kio

Avenue 5, TechPlace II #03-05/06, Share Capital of SGD 300,000 fully paid-in

(held 70%);

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

registered office at 19 Mayis Mahallesi, Ataturk Cad, Esin Sok, Yazgan

Merkezi, No. 3/7, Istanbul, Share Capital of TRY 3,400,000 fully paid-in (held

99.99%);

� Fila Stationary O.O.O., Smirnovskaja Street 25, Bld 3 Office 07, 109052,

Moscow, Russia. Share Capital of RUB 40,000,000 fully paid-in (held 90%);

� Fila Hellas SA (Greece), with registered office at Anagenniseos 1/757 Block,

57013 Thessaloniki, Share Capital of Euro 24,000 fully paid-in (held 50%);

� Industria Maimeri S.p.A. (Italy), with registered office at Bettolino di Mediglia,

Via Gianni Maimeri 1, 20060 Mediglia (Milan), Share Capital of Euro

1,618,000.00 fully paid-in (held 51%). Industria Maimeri S.p.A. (Italy) in turn

holds 100% of Maimeri U.S.A. Inc. (U.S.A.), 847 Summerhill Drive 60506,

Aurora, Share Capital of USD 901,000.00 fully paid-in (held 100%);

� Fila Cartorama SA PTY LTDA (South Africa), with registered office at Rialto

Road, Grand Moorings Precinct, 7441 Century City, Cape Town, Share Capital

of ZAR 10,000 fully paid-in (held 51%);

� Fila Australia PTY LTD (Australia), 737 Burwood Road, Hawthorn East, VIC,

3123, Share Capital of AUD 100.00 (held 100%);

� Writefine Products Private Limited, (India), with registered office at Plot No.

32,33,44,45,46, GIDC New Exp. Area, Umbergaon – 396171, Gujarat, India,

Share Capital of INR 3,582,520 fully paid-in (held 18.5%)



114

All the companies of the Group were consolidated through the “line-by-line method”

with the exception of the associated company Writefine Products Private Limited

(India), consolidated under the equity method.



115

II. Consolidated Financial Statements of F.I.L.A. Group at December

31, 2014

Consolidated Balance Sheet


ASSETS 266,502 236,723

Non-Current Assets 64,731 57,647

Intangible Assets 21,264 19,778 Note 1

Property, Plant and Equipment 25,552 22,539 Note 2

Non-Current Financial Assets 707 347 Note 3

Investments Measured at Equity 6,746 6,130 Note 4

Investments Measured at Cost 31 2 Note 5

Deferred Tax Assets 10,429 8,849 Note 6


Current Assets 201,755 178,415

Current Financial Assets 257 118 Note 3

Tax Receivables 923 770 Note 7

Inventories 92,035 74,210 Note 8

Trade and Other Receivables 76,067 67,520 Note 9

Cash and Cash Equivalents 32,473 35,797 Note 10

Non-Current and Current Assets Held-for-Sale 16 661

LIABILITIES AND EQUITY 266,502 236,723

Equity 111,968 92,348 Note 12

Share Capital 2,748 2,748

Reserves 8,638 4,976

Retained Earnings 82,572 70,733

Net profit for the year 16,575 13,371

Minority Interest 1,435 520

Non-Current Liabilities 31,615 38,713

Non-Current Financial Liabilities 20,134 28,297 Note 13

Employee Benefits 4,925 3,847 Note 14

Provisions for Risks and Charges 731 565 Note 15

Deferred Tax Liabilities 5,825 6,004 Note 16

Current Liabilities 122,919 105,662

Current Financial Liabilities 71,037 69,343 Note 13

Provisions for Risks and Sharges 262 2,382 Note 17

Current Tax Payables 2,536 1,362 Note 18

Trade and Other Payables 49,084 32,575 Note 19




116

Consolidated Statement of Comprehensive Income


Revenue from sales and service 233,585 218,864 Note 20

Other Revenue and Income 3,817 3,291 Note 21

TOTAL REVENUE 237,402 222,155

Raw Materials, Ancillary, Consumables and Goods (101,716) (85,908) Note 22

Services and Rent, Leases and Similar Costs (57,655) (50,850) Note 23

Other Operating Costs (4,947) (5,641) Note 24

Change in Raw Materials, Semi-Finished, Work-in-progress and Finished Products 10,764 (4,365) Note 22

Labour Costs (48,829) (42,205) Note 25

Amortisation & Depreciation (5,698) (6,033) Note 26

Write-downs (344) (1,039) Note 27

TOTAL OPERATING COSTS (208,425) (196,041)

EBIT 28,977 26,114

Financial Income 589 641 Note 28

Financial Charges (5,084) (6,109) Note 29

Income/Charges from Investments at Equity 443 337 Note 31

NET FINANCIAL INCOME/(CHARGES) (4,052) (5,131)

PRR-TAX PROFIT 24,925 20,983

Income Taxes (9,714) (8,152)

Deferred Income and Charges 1,470 719

TOTAL INCOME TAXES (8,244) (7,433) Note 32

NET PROFIT FROM CONTINUING OPERATIONS 16,681 13,550

PROFIT/(LOSS) FROM DISCONTINUED OPERATIONS (76) (192)

NET PROFIT FOR THE YEAR 16,605 13,358

Profit attributable to minorities 30 (13)

Profit attributable to the shareholders of the parent 16,575 13,371

Other Comprehensive Income Items which may be reclassified subsequently in the P&L account

Actuarial Gains/(Losses) for Employee Benefits recorded directly to Equity (393) (482)

Income Taxes on income and charges recorded directly to Equity 109 17

Translation Difference recorded in Equity 3,940 (3,883)

OTHER COMPREHENSIVE INCOME ITEMS (net of tax effect) 3,656 (4,348)

Total Comprehensice Income attributable to the F.I.L.A Group 20,231 9,023

Total Comprehensice Income attributable to Minorities 170 (76)



117

Consolidated Cash Flow Statement Euro thousands December 2014 December 2013

EBIT 28,977 26,114



Write-down and Recovery in Value 48 8

Doubtful Debt Provision 297 1,032

Provisions for Risks and Charges 0 1,956

Exch. effect on Assets and Liabilities in Foreign Curr. of Commercial Transactions 830 1,038




Unrealised Exchange Differences on Assets and Liabilities in Foreign Currencies (617) (1,081)

Realised Exchange Differences on Assets and Liabilities in Foreign Currencies (352) (580)

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN NET

WORKING CAPITAL26,146 27,664

Changes in Net Working Capital: (6,880) (5,197)


Change in Trade and Other Receivables (4,546) (11,115)

Change in Trade and Other Payables 11,255 775

Change in Other Assets/Liabilities (2,582) (88)

Change in Post-Employment and Employee Benefits 153 307

NET CASH FLOW FROM OPERATING ACTIVITIES 19,265 22,467

Investments in Intangible Assets (244) (120)



Divestments in Property, Plant and Equipment 1,711 151


Acquisition of Investee Companies (28) 0

Total Investment/Divestment of Investments measured at Cost (28) 0

Cash Flow from Non-Current Assets & Liabilities Held-for-Sale 645 0

Total Investemnt/Divestment in Other Financial Assets 306 784


CASH FLOW FROM INVESTING ACTIVITY (6,274) (2,846)



Other Changes in Equity 607 0

Total Change in Equity (937) 4,425

Interest Paid (3,774) (4,407)



Translation difference 4,112 (3,947)

Other Non-Cash Items (2,353) 3,599


Cash and Cash Equivalents net of Bank Overdrafts at beginning of the year 35,685 25,349

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

scope) (1,067) 0

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

YEAR30,663 35,685

1 Cash and cash equivalents at December 31, 2014 totalled Euro 32,473 thousand; current account

overdrafts amounted to Euro 1,810 thousand net of relative interest.

2 Cash and cash equivalents at December 31, 2013 totalled Euro 35,797 thousand; current account

overdrafts amounted to Euro 112 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 balance sheet items in currencies other than the Euro), where significant. These effects

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



118




Bank overdrafts (112) (703)



Bank overdrafts (1,810) (112)

Reference should be made to the “Directors’ Report” for comment and analysis.



119

Consolidated Statement of Changes in Shareholders’ Equity

Euro thousands

Share

capital

Legal

Reserve

IAS 19

Reserve

Other

Reserves

Translation

Difference

Retained

Earnings

Group Net

ProfitGroup Equity

Minorities

Capital and

Reserves

Minority

Profit/Loss

Minorities

EquityTotal Equity

December 31, 2013 2,748 602 (1,084) 11,154 (5,696) 70,733 13,371 91,827 533 (13) 520 92,348

Changes in the year 6 (284) 3,940 (6) 3,656 902 902 4,559

Acquisition treasury shares 0 0 0

Net Profit 16,575 16,575 30 30 16,605

Gains/(losses) recorded directly to equity 0 6 (284) 0 3,940 (6) 16,575 20,231 902 30 932 21,164

Allocation of the 2013 result 13,371 (13,371) 0 (13) 13 0 0

Dividends (1,526) (1,526) (17) (17) (1,543)

Recognition Minorities Capital and Reserves 0 0 0

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



120

Notes to the Main Consolidated Financial Statement Accounts

Introduction

The F.I.L.A. Group operates in the creativity tools market, producing writing and

design objects such as crayons, paints, modelling dough, pencils and chalk etc..

The Parent Company F.I.L.A. S.p.A., Società Italiana Lapis ed Affini (hereafter “the


Pozzone 5.

The present consolidated financial statements, concerning the year ending December

31, 2014, are presented in Euro, as the functional currency in which the Group operates

and comprise the Consolidated Balance Sheet, the Consolidated Statement of

Comprehensive Income, the Consolidated Cash Flow Statement, the Consolidated

Statement of Changes in Shareholders’ Equity, the Explanatory Notes and are

accompanied by the Directors’ Report. All amounts reported in the Consolidated

Balance Sheet, the Consolidated Statement of Comprehensive Income, the Consolidated

Cash Flow Statement, the Consolidated Statement of Changes in Shareholders’ Equity

and in the Explanatory Notes are expressed in thousands of Euro, except where

otherwise stated.

For the overseas subsidiaries, the financial statements prepared for the consolidation

were utilised, appropriately adjusted in line with Group accounting standards (I.F.R.S.).



121

� Note 1 - Intangible assets

Intangible assets at December 31, 2014 amount to Euro 21,264 thousand (Euro 19,778

thousand at December 31, 2013) and are comprised for Euro 8,557 thousand of

indefinite intangible assets – goodwill (“Note 1.B - Intangible Assets with indefinite

useful lives) and for Euro 12,708 thousand finite intangible assets (“Note 1.D –

Intangible Assets with finite useful lives”).

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, 2013 6,381 158 22,234 2,644 5 31,422

Increases in the year 2,176 17 940 169 0 3,302

Increases (Investments) 0 17 158 69 0 244

of which Amount in Year from Change in Consolidation Scope 0 0 0 37 0 37

Effect Increase in Consolidation Scope 1,796 0 0 92 0 1,888

Increase Translation Differences 380 0 782 8 0 1,170

Decreases in the year 0 0 0 0 0 0

December 31, 2014 8,557 175 23,174 2,813 5 34,724

Change in Amortisation

December 31, 2013 (96) (9,007) (2,541) 0 (11,645)

Increases in the year (14) (1,711) (92) 0 (1,815)

Amortisation in Year (14) (1,461) (84) 0 (1,559)

of which Amount in Year from Change in Consolidation Scope 0 0 (33) 0 (33)

Increase Translation Differences 0 (249) (7) 0 (256)

Decreases in the year 0 0 0 0 0

December 31, 2014 (110) (10,717) (2,632) 0 (13,460)

Net Book Value at December 31, 2013 6,381 62 13,227 103 5 19,778

Net Book Value at December 31, 2014 8,557 65 12,457 181 5 21,264

Change in year 2,176 3 (770) 78 0 1,486

Note 1.A - INTANGIBLE ASSETS

The table below shows the changes in the year of “Intangible Assets with indefinite

useful lives”:



122

Euro thousandsGoodwill

Balance at 31-12-2013 6.381

Increases in the year 2.176

Effect Increase in Consolidation Scope 1.796

Increase Translation Differences 380

Decreases in the year 0

Decreases (Divestments)

Balance at 31-12-2014 8.557

Change in year 2.176

Note 1.B INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES

The increase in 2014 refers to goodwill recognised by the subsidiary Industria Maimeri

S.p.A. (Euro 1,695 thousand), following the acquisition of the business unit of Maimeri

S.p.A., and of the subsidiary FILA Cartorama SA PTY LTD (Euro 101 thousand),

following the acquisition by F.I.L.A. S.p.A..

Reference should be made to the paragraph: “Business combinations” for the relative

determination of the amounts.

The Group verifies the recovery of the goodwill at least on an annual basis or more

frequently when there is an indication of a loss in value.

For the purposes of the impairment test, the goodwill values were allocated to the

business units (or group of business units) generating cash flows (“cash generating

units”) at the reporting date.

The “Enterprise Value” utilised to value the recoverability of the goodwill of the

F.I.L.A. Group recorded in the financial statements was based on the 2015-2018

business plan, approved by the Board of Directors, together with the relative forecasts

and the “Cash Flow Statement” in 2014.

The goodwill allocated per “cash generating unit” and the indicators utilised in the

determination of the value in use of the “cash generating units”, or rather the present

value of the estimate future cash flows, are outlined below:



123

Euro thousands

Omyacolor S.A.

(France)

Johann Froescheis

Lyra Bleistift-

Fabrik GmbH &

Co. KG (Germany)

Dixon Ticonderoga

Co. (U.S.A.)

Grupo F.I.L.A.-

Dixon, S.A. de

C.V. (Mexico)

F.I.L.A. Chile Ltda

(Chile)

Licyn Mercantil

Industrial Ltda

(Brazil)

Industria Maimeri

S.p.A. (Italy)

Fila Cartorama SA

PTY LTD (South

Africa)

Goodwill F.I.L.A.

Group

Goodwill 1,610 1,217 2,079 1,784 71 1,695 101 8,557

Cost of Capital (W.A.C.C.) 6.80% 6.40% 7.40% 9.15% 10.10% 6.80% 8.10%

Cost of debt 2.50% 2.30% 2.70% 4.35% 4.30% 2.50% 3.70%

Cost of Own Capital 7.80% 7.40% 8.60% 10.40% 11.50% 7.80% 9.20%

Risk Free Rate 1.70% 1.30% 2.60% 2.60% 2.60% 1.70% 2.10%

Growth Rate 0.00% 0.00% 0.00% 1.10% 1.00% 0.00% 0.10%

Beta Levered 0.82% 0.82% 0.81% 0.83% 0.84% 0.82% 0.79%

NOTE 1.C REVENUE BY CASH GENERATING UNITS

Note:

Sources of principal W.A.C.C. components:

� Risk Free Rate: 10 year Government bonds.

� Beta Levered: similar panel of listed and non-listed companies.

� Country Risk: “damodaran” source.

From the impairment test at December 31, 2014, no loss in value arose.

The “value in use” of the “cash generating unit” is adequate also in view of the

“sensitivity analysis” undertaken, in order to evaluate deteriorated scenarios compared

to the official plan utilised to assess the recoverability of the goodwill of the F.I.L.A.

Group. This analysis was undertaken considering revenue growth rates lower than that

in the long-term economic and financial plan approved by the Board of Directors as

well as the W.A.C.C. rates deteriorating compared to those reported in the table above.

The table below shows the changes in the year of “Intangible Assets with finite useful

lives”:



124

Euro thousands


Intellectual Property

Rights

Concessions,

Licenses,

Trademarks &

Similar Rights

Other Intangible



December 31, 2013 158 22,234 2,644 5 25,041

Increases in the year 17 940 169 0 1,126

Increases (Investments) 17 158 69 0 244

of which Amount in Year from Change in Consolidation Scope 0 0 37 0 37

Effect Increase in Consolidation Scope 0 0 92 0 92

Increase Translation Differences 0 782 8 0 790


December 31, 2014 175 23,174 2,813 5 26,167


December 31, 2013 (96) (9,007) (2,541) 0 (11,645)

Increases in the year (14) (1,711) (92) 0 (1,815)

Amortisation in Year (14) (1,461) (84) 0 (1,559)

of which Amount in Year from Change in Consolidation Scope 0 0 (33) 0 (33)

Increase Translation Differences 0 (249) (7) 0 (256)


December 31, 2014 (110) (10,717) (2,632) 0 (13,460)

Net Book Value at December 31, 2013 62 13,227 103 5 13,397

Net Book Value at December 31, 2014 65 12,457 181 5 12,708

Change in year 3 (770) 78 0 (689)

Note 1.D - INTANGIBLE ASSETS WITH FINITE USEFUL LIVES

“Industrial Patents and Intellectual Property Rights” amount to Euro 65 thousand at

December 31, 2014 (Euro 62 thousand at December 31, 2013).

The average residual useful life of the “Industrial Patents and Intellectual Property

Rights”, recorded in the financial statements of December 31, 2014, is 6 years.

“Concessions, Licences, Trademarks and Similar Rights” amount to Euro 12,457

thousand at December 31, 2014 (Euro 13,227 thousand at December 31, 2013).

The decrease compared to 2013 mainly relates to the amortisation of the brands

“Lapimex” held by F.I.L.A.-Dixon, S.A. de C.V. (Mexico) and the brands “Lyra” held

by Lyra KG (Germany) as well as exchange rate effects.

The average residual useful life of the “Concessions, Licenses, Trademarks and Similar


“Other Intangible Assets” amount to Euro 181 thousand at December 31, 2014 (Euro

103 thousand at December 31, 2013) and mainly include costs relating to the

capitalisation of software.



125

The average residual useful life of “Other Intangible Assets”, recorded in the financial

assets at December 31, 2014, is 3 years.

In 2014, 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

At December 31, 2014, “Property, Plant and Equipment” amounted to Euro 25,552

thousand (Euro 22,539 thousand at December 31, 2013). The table below shows the

changes in the year:

Note 2.A - PROPERTY, PLANT AND EQUIPMENT

Euro thousands

Land BuildingsPlant and

Machinery

Industrial and

Commercial

Equipment

Other AssetsAssets in

ProgressTotal amount


December 31, 2013 4,334 22,395 37,552 8,678 5,164 212 78,335

Increases in the year 0 407 5,834 1,173 727 1,748 9,889

Increases (Investments) 0 327 4,194 893 353 2,302 8,068

of which Amount in Year from Change in Consolidation Scope 0 1 26 61 25 0 112

Capitalisation from Assets in Progress 0 0 296 260 0 (556) 0

Effect Increase in Consolidation Scope 0 0 452 18 73 0 542

Increase Translation Differences 0 80 887 2 302 2 1,273

Other Increases 0 0 5 0 0 0 5

Decreases in the year 0 (27) (8,025) (63) (346) (875) (9,336)

Decreases (Divestments) 0 (27) (3,182) (63) (244) (813) (4,329)

of which Amount in Year from Change in Consolidation Scope 0 0 0 0 0 0 (2)

Write-downs 0 0 (4,843) 0 (102) 0 (4,945)

Other Decreases 0 0 0 0 0 (62) (62)

December 31, 2014 4,334 22,774 35,361 9,788 5,545 1,085 78,888

Change in year 0 380 (2,191) 1,110 381 873 553

Change in Depreciation

December 31, 2013 (12,711) (31,111) (7,696) (4,280) (55,799)

Increases in the year (849) 1,972 (757) (566) (200)

Depreciation in Year (819) (2,183) (757) (380) (4,139)

of which Amount in Year from Change in Consolidation Scope (1) (39) (10) (22) (72)

Write-downs 0 4,795 0 102 4,897

Increase Translation Differences (30) (635) 0 (288) (953)

Other Increases 0 (5) 0 0 (5)

Decreases in the year 27 2,317 63 256 2,663

Decreases (Divestments) 27 2,317 63 256 2,663

December 31, 2014 (13,533) (26,822) (8,390) (4,590) (53,336)

Net Book Value at December 31, 2013 4,334 9,684 6,443 982 883 212 22,539

Net Book Value at December 31, 2014 4,334 9,242 8,539 1,398 954 1,085 25,552

Change in year 0 (442) 2,096 416 72 873 3,013

“Land” at December 31, 2014, amounting to Euro 4,334 thousand (Euro 4,334 thousand

at December 31, 2013), is comprised of land adjacent to the building owned by F.I.L.A.



126

S.p.A. at the production site in Rufina Scopeti (Florence - Italy) and the building of the

subsidiary Lyra KG in Norimberg (Germany).

“Buildings” at December 31, 2014, amounting to Euro 9,242 thousand (Euro 9,684

thousand at December 31, 2013) relates to production plant in Italy, Mexico and

Germany. The decrease in the net book value at December 31, 2014, amounting to Euro

442 thousand, refers to depreciation in 2014 (Euro 819 thousand).

We also report increases for currency differences in 2014 (Euro 50 thousand).

“Plant and Machinery” amounts to Euro 8,539 thousand at December 31, 2014 (Euro

6,443 thousand at December 31, 2013), with capital expenditure in 2014 of Euro 4,194

thousand mainly relating to the purchase of machinery by the subsidiary Fila Dixon

Stationery (Kunshan) Co., Ltd. (China – Euro 2,485 thousand) and the Parent Company

F.I.L.A. S.p.A. (Italy – Euro 843 thousand).

The capital expenditure in Fila Dixon Stationery (Kunshan) Co., Ltd. (China) concerns

the reallocation process of the production plant of Beijing F.I.L.A.-Dixon Stationery

Company Ltd.

Investment in new plant and machinery incurred by the principal production plant of the

F.I.L.A. Group seeks to drive efficiency of the current production capacity through

upgrading and expanding the current “assets”.

We also report increases for currency differences in 2014 (Euro 252 thousand).

Depreciation in 2014 amounted to Euro 2,183 thousand.

“Industrial and Commercial Equipment” amounts to Euro 1,398 thousand at December

31, 2014 (Euro 982 thousand at December 31, 2013) and mainly relates to investments

in new production moulds and plant technical modernisation incurred by F.I.L.A. S.p.A

in 2014 (Euro 723 thousand).

Depreciation in 2014 amounted to Euro 757 thousand.

“Other Assets” amount to Euro 954 thousand at December 31, 2014 (Euro 883 thousand

at December 31, 2013) and includes furniture and office equipment, EDP and motor



127

vehicles. The increase in 2014 (Euro 74 thousand) mainly refers to acquisitions by the

Parent Company F.I.L.A. S.p.A. (Italy – Euro 56 thousand).

Depreciation in 2014 amounted to Euro 380 thousand.

“Assets in Progress” include internal constructions undertaken by the individual

companies of the Group. The increase in the net book value at December 31, 2014

(Euro 873 thousand) compared to 2013 relates to the subsidiary Grupo F.I.L.A.-Dixon,

S.A. de C.V. (Mexico – Euro 652 thousand), the subsidiary Omyacolor S.A. (France –

Euro 589 thousand), the Parent Company F.I.L.A. S.p.A. (Italy – Euro 520 thousand)

and the subsidiary FILA Dixon Stationery (Kunshan) Co., Ltd. (China – Euro 499

thousand).

The write-down of Property, Plant and Equipment refers exclusively to the subsidiary

Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico) relating to the adjustment of the “assets”

to market values.

There are no fixed assets subject to restrictions with the exception of the mortgage on

the building at Rufina (Florence) owned by F.I.L.A. S.p.A., following the loan granted

by BNL and Intesa Sanpaolo.

� Note 3 – Financial Assets

“Financial Assets” amount to Euro 964 thousand at December 31, 2014 (Euro 465

thousand at December 31, 2013).



128

The breakdown of the account in 2014 is as follows:

Euro thousandsLoans and Receivables Other Financial Assets

Total Amount

December 31, 2013 3 462 465

non-current portion 3 344 347

current portion 0 118 118

December 31, 2014 7 957 964


of which Amount in Year from Change in Consolidation Scope 0 111 111


Change in year 4 495 499



Note 3.A - FINANCIAL ASSETS

“Other Financial Receivables: Other - non-current portion” amounts to Euro 700

thousand at December 31, 2014 (Euro 344 thousand at December 31, 2013) and mainly

relates to the non-current portion of the financial investments made by the subsidiary

Dixon Ticonderoga Company (U.S.A.) relating to the indemnities to be paid to

personnel, not directly attributable and therefore not considered “plan assets” for the

purposes of IAS 19, as well as deposits paid to third parties for contractual guarantees

on the provision of services and goods with the various companies of the F.I.L.A.

Group.

The increase in 2014 (Euro 356 thousand) mainly relates to the renegotiation of the

rental contract of the operational site of the subsidiary Grupo F.I.L.A.-Dixon, S.A. de

C.V. (Mexico – Euro 250 thousand), as well as financial investments made by the

subsidiary Dixon Ticonderoga Company (U.S.A. – Euro 85 thousand).

The book value approximates the “fair value” of these assets at the reporting date.

The disclosures relating to the timing of financial cash flows and other disclosures

relating to “Financial Assets” are summarised in Note 3.B.

Reference should be made to Note 11 concerning the net financial position at December

31, 2014 of the F.I.L.A. Group.

Details on the timing of financial cash flows and “Financial Assets” at December 31,

2014 are illustrated in the following table:



129

Description

Current

Financial

Assets

Capital 2015 2016 2017 2018 Beyond 2018

Euro thousands

Guarantee Deposits 7 2004 EUR Italy 0 0 0 0 7 None None

Guarantee Deposits 4 2006 EUR France 0 0 0 0 4 None None

Guarantee Deposits 23 2004 EUR UK 0 0 0 0 23 None None

Guarantee Deposits 277 2004 EUR Mexico 0 0 0 0 277 None None

Guarantee Deposits 12 2007 EUR Scandinav. 0 0 0 0 12 None None

Guarantee Deposits 9 2012 EUR Turkey 0 0 0 0 9 None None

Guarantee Deposits 131 2012 EUR Brazil 131 0 0 0 0 None None

Guarantee Deposits 126 2014 EUR Argentina 126 0 0 0 0 None None

Guarantee Deposits 104 2014 EUR Italy 0 0 0 0 104 None None

Guarantee Deposits 2 2014 EUR Greece 0 0 0 0 2 None None

Guarantee Deposits 5 2014 EUR South Africa 0 0 0 0 5 None None

Employee loan 7 2012 EUR France 0 7 0 0 0 None None

Fin. Assets to cover Employee Obligations 257 Pre 2000 EUR USA 0 65 10 10 172 None None

Total amount 964 257 72 10 10 615

Year Currency Country

General information

NOTE 3.B - FINANCIAL ASSETS

Amount

Guarantees

Received

Guarantees

Granted

Financial Assets

Non-CurrentAmount

� Note 4 - Investments Measured at Equity

Note 4.A INVESTMENTS MEASUED AT EQUITY

Inv. in Associates Total Amount

December 31, 2013 6,130 6,130

Increases in the year 632 632

Increases (Investments) 632 632

Decreases in the year (16) (16)

Dividends received (16) (16)

December 31, 2014 6,746 6,746

Change in year 616 616

The Investments measured under the equity method, amounting to Euro 6,746 thousand,

relate to the investment held in the associate Writefine Products Private Limited (India).

The increase in the year amounts to Euro 632 thousand, which corresponds for Euro

443 thousand to F.I.L.A. S.p.A.’s share of the net result of the associate and for Euro

189 thousand to the exchange rate effect on the value of the net equity at December 31,

2014 and decreases in the year of Euro 16 thousand relating to the elimination of the



130

dividends received by F.I.L.A. S.p.A. during the year from Writefine Products Private

Limited (India).

The F.I.L.A. Group, although holding less than 20% of the voting rights (18.5% at

December 31, 2014), exercises significant influence on the investee, participating

actively in the strategic decisions of the company thanks to representation on the Board

of Directors of the company (2 members) and undertakes significant purchasing

operations with the company. Finally, FILA holds rights option on the investee

(exercise period from June 2015) which would permit the Group to increase its

shareholding up to 50% of the share capital.

The Group investee recognised under the equity method is not listed on a stock

exchange and therefore there are no official listing prices available.

The carrying amount of the equity at December 31, 2014 of Writefine Products Private

Limited (India), corresponding to the shareholding of 18.5% held by F.I.L.A. S.p.A.,

amounts to Euro 2,075 thousand.

The difference in value between the investment measured under the equity method and

the net carrying amount is due to implicit goodwill.

The table below summarises the key data for the year 2014 of the investee recognised

under the equity method:



131

December December

2014 2013

Total Assets 19,937 13,336



Total Liabilities (8,722) (5,439)

Current Liabilities (6,388) (3,380)

Non-Current Liabilities (2,335) (2,059)

Net Assets 11,214 7,897

December December

2014 2013

Revenue 28,603 20,232

Costs (26,210) (18,412)

Net profit 2,393 1,820

Group share of profit 443 337

Group share of Net assets 2,075 1,461

Book Value 2,075 1,461

Consultant charges relating to the investment 702 702

Share premium F.I.L.A S.p.A. acquisition in Writefine

Products Private Limited (India) 5,106 5,106

Exchange effects initial equity (1,137) (1,139)

Value of F.I.L.A. S.p.A investment in Writefine

Products Private Limited (India) 6,746 6,130

Euro thousands

Euro thousands

The Group does not have investments in other associates.

� 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,



132

Energia Elettrica Zona Mugello and Energia Elettrica Milano held by F.I.L.A. S.p.A. at


� Note 6 – Deferred Tax Assets

“Deferred Tax Assets” amount to Euro 10,429 thousand at December 31, 2014 (Euro

8,849 thousand at December 31, 2013).

Note 6.A - CHANGES IN DEFERRED TAX ASSETS

Euro thousands

December 31, 2013 8,849

Provisions 2,093

Utilisations (1,138)

of which Amount in Year from Change in Consolidation Scope (21)

Effect Increase in Consolidation Scope 182

Change in Equity 442

December 31, 2014 10,429

Change in year 1,580

The account at December 31, 2014 mainly includes deferred tax assets calculated on

“Intangible Assets”, “Personnel”, “Risk and Charges Provisions not deductible” and

“Recoverable losses carried forward” and on the elimination of the margins which the

individual companies realised on the sale of finished products to other Group

companies (“Inventories”), as well as on other differences between statutory and fiscal

values.

The breakdown of “Deferred Tax Assets” is illustrated below.



133

Euro thousands

2014 Increase in

Consolidation Scope

2013 2014 2013 2014 2013

Deferred tax assets relating to:

Intangible Assets 1,104 80 1,156 (132) (58) 0 0

Property, Plant and Equipment 512 504 8 99 0 0

Provisions for Risks 939 906 33 594 0 0

Trade and Other Receivables 749 15 629 105 665 0 0

Inventories 1,323 79 1,160 84 375 0 0

Personnel 988 454 529 (174) 5 0

Exchange adjustments 20 - 20 0 0 0

Dividends Dixon Ticonderoga Inc. (Canada) 1,564 2,381 (817) 93 0 0

Translation reserve difference 437 (868) 868 (593) 437 (868)

Other 65 8 400 (343) 239 0 0

Tax Losses Carried Forward 2,728 2,127 601 (1,193) 0 0

Total deferred tax assets 10,429 182 8,849 956 48 442 (868)

NOTE 6.B - BREAKKDOWN OF DEFERRED TAX ASSETS

Balance Sheet Values Income Statement Equity

Deferred tax assets mainly relate to the Parent Company F.I.L.A. S.p.A. (Italy – Euro

2,117 thousand), principally for the non-deductible German tax losses in the parent

company pursuant to German tax legislation, Dixon Ticonderoga Company (U.S.A. –

Euro 4,087 thousand), mainly for the recognition of the tax credit utilised in 2014

relating to dividends received from Dixon Ticonderoga Inc. (Canada), Grupo F.I.L.A.-

Dixon, S.A. de C.V. (Mexico – Euro 1,464 thousand), principally for the tax losses

carried forward relating to the Mexican tax reform during the year and Lyra KG

(Germany – Euro 1,639 thousand), principally relating to tax losses carried forward.

In 2014, income on deferred tax assets was recorded directly through Profit and Loss

for Euro 955 thousand and through Equity for Euro 442 thousand.

Deferred tax assets recognised directly to equity on the translation differences on

balance sheet values, amounting to Euro 483 thousand, are recorded in application of

the translation rules of the local currencies to the consolidation currency concerning the

consolidation accounting principles.



134

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.

The table below illustrates the expected reversal of the deferred tax assets through the

income statement:

Balance Sheet Values

Euro thousands

December 31, 2014 2015 2016 2017 2018beyond

2018


Intangible Assets 1,104 100 100 100 100 704


Provisions for Risks 939 150 150 150 150 339

Trade and Other Receivables 749 75 75 75 75 449

Inventories 1,323 150 150 150 150 723

Personnel 988 75 75 75 75 688

Exchange adjustments 20 20

Dividends Dixon Ticonderoga Inc. (Canada) 1,564 150 150 150 150 964

Translation reserve difference 437 200 237

Other 65 65

Tax Losses Carried Forward 2,728 150 150 150 150 2128

Total deferred tax assets 10,429 1,235 1,187 950 950 6,107

NOTE 6.C - REVERSAL YEAR OF DEFERRED TAX ASSETS

Expiry Date

Deferred tax assets expected to reverse through the income statement within the next 12

months of the reporting date amounts to Euro 1,235 thousand.

� Note 7 - Current Tax Receivables

At December 31, 2014 tax receivables, relating to income taxes, total Euro 923

thousand (Euro 770 thousand at December 31, 2013), mainly comprised of Euro 441

thousand relating to Dixon Ticonderoga Co. (U.S.A.) and Euro 155 thousand to Grupo

F.I.L.A.-Dixon, S.A. de C.V. and principally concerning payments on account in the

period.



135

� Note 8 - Inventories

Inventories at December 31, 2014 amount to Euro 92,035 thousand (Euro 74,210


The breakdown of inventories is as follows:

Euro thousands

Raw Materials,

Ancillary and

Consumables

Work-in-progress and

Semi-finished Products

Finished

Products and

Goods

Total Amount

December 31, 2013 18,516 9,372 46,322 74,210

December 31, 2014 24,639 11,887 55,509 92,035

Change in year 6,123 2,515 9,187 17,825

of which Amount in Year from Change in Consolidation Scope 168 774 3,631 4,573

Note 8.A - INVENTORIES

The increase in 2014 amounted to Euro 17,825 thousand and is in line with the volume

of purchases of raw materials and finished products during the year as well as

maintaining adequate inventory levels necessary to support future sales.

No inventories are committed to guarantee any liabilities, with the exception of that

reported in the “Directors’ Report – Commitments and Guarantees” with reference to

the German subsidiary Lyra KG (Germany).

The values reported in the previous table are shown net of the inventory obsolescence

provision relating to raw materials, products in work-in-progress and finished products,

amounting respectively at December 31, 2014 to Euro 653 thousand (Euro 533

thousand at December 31, 2013), Euro 100 thousand (Euro 79 thousand at December

31, 2013) and Euro 1,769 thousand (Euro 1,139 thousand at December 31, 2013), which

refer to obsolete or slow moving materials for which it is not considered possible to

recover through sales.



136

The changes in the inventory obsolescence provision in the year were as follows:

Note 8.B- CHANGE IN INVENTORY OBSOLESCENCE PROVISION

Euro thousands

Raw Materials,

Ancillary and

Consumables


Semi-finished Products

Finished

Products and

Goods

December 31, 2013 533 79 1,139 1,750

Provisions 204 266 1,440 1,910

Utilisations (85) (245) (1,192) (1,522)

Release 0 0 7 7

Effect Increase in Consolidation Scope 0 0 250 250

Translation difference 1 0 125 126

December 31, 2014 653 100 1,769 2,521

Change in year 120 21 630 771

Inventory Obsolescence Provision

Total Amount

� Note 9 – Trade and Other Receivables

The account amounts to Euro 76,067 thousand and increased on the previous year by

Euro 8,546 thousand mainly due to the generalised contraction in payment terms as well

as higher sales volumes.

The breakdown is illustrated below.

Euro thousandsDecember 31, 2014 December 31, 2013 Change in year

Effect change in consolidation

scope

Trade Receivables 68,734 61,317 7,417 2,959

Tax Receivables 3,502 1,517 1,985 2

Other Receivables 3,131 3,410 (279) 146

Prepayments and Accrued Income 673 599 74 160

Third parties 76,040 66,843 9,197 3,267

Trade Receivables - Associates 27 677 (650) 0

Associates 27 677 (650) 0

Total amount 76,067 67,520 8,547 3,267

Note 9.A - TRADE AND OTHER RECEIVABLES

All of the above receivables are due within 12 months.



137

The geographic breakdown of trade receivables (by customers) are illustrated in the

table below:



scope

Europe 23,487 20,952 2,533 2,959

North America 9,279 8,278 1,001 0

Central/South America 33,964 30,299 3,665 0

Rest of the World 2,004 1,788 216 0

Third parties 68,734 61,317 7,416 2,959

NOTE 9.B - TRADE RECEIVABLES THIRD PARTIES - REGIONAL BREAKDOWN

The changes in the doubtful debt provision and the relative breakdown to cover difficult

recovery positions are illustrated in the table below.

Euro thousands

December 31, 2013 3,226

Provisions 340

of which Amount in Year from Change in Consolidation Scope 12

Utilisations (502)


Release (43)


Exchange Differences 106

December 31, 2014 3,181

Change in year (44)

Doubtful Debt Provision

Note 9.C - CHANGES IN DOUBTFUL DEBT PROVISION

The ageing of trade receivables with third parties at December 31, 2014 and December

31, 2013 is reported in the “Directors’ Report – Information and Management of

Financial Risks”.

“Tax Receivables” includes V.A.T. and other local taxes other than corporation taxes.

Current tax receivables amount to Euro 3,502 thousand at December 31, 2014 (Euro




138

“Other Receivables” includes personnel and social security receivables and payments

on account to suppliers. At December 31, 2014 the account amounts to Euro 3,131

thousand (Euro 3,410 thousand at December 31, 2013).

The book value of “Other Receivables” represents the “fair value” at the reporting date.


The disclosures on the exposure of the Group to the credit and market risk as well as

losses on trade and other receivables are reported in the Directors’ Report –

Management of Financial Risks.

� Note 10 - Cash and Cash Equivalents

“Cash and Cash Equivalents” at December 31, 2014 amount to Euro 32,473 thousand

(Euro 35,797 thousand at December 31, 2013).

The breakdown and comparison with the previous year are illustrated in the table

below.

Euro thousands

Bank and Post Office

Deposits

Cash in hand and

similarTotal Amount

December 31, 2013 35,729 68 35,797

December 31, 2014 32,415 58 32,473

Change in year (3,314) (10) (3,324)

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

11,196 thousand and the bank current accounts of the foreign subsidiaries of Euro

21,219 thousand, mainly relating to the US subsidiary (Euro 5,683 thousand), the

French subsidiary (Euro 4,335 thousand), the Chinese subsidiary (Euro 1,908

thousand), the Canadian subsidiary (Euro 1,418 thousand), the Spanish subsidiary (Euro

1,952 thousand), the German subsidiary (Euro 1,078 thousand) and the English

subsidiary (Euro 478 thousand).



139

“Cash and Cash on hand” amounts to Euro 58 thousand, of which Euro 25 thousand

relates to the Parent Company and Euro 33 thousand to the various foreign subsidiaries.

The book value approximates the “fair value” at the reporting date.

Bank and postal deposits are remunerated at rates which approximates Libor/Euribor.

There are no bank and postal deposits subject to restrictions (for further information in

relation to secured guarantees on property reference should be made to the “Directors’

Report - Commitments and Guarantees”).

� Note 11 - Net Financial Position

The F.I.L.A. Group Net Financial Position at December 31, 2014 is as follows:


Cash and Cash Equivalents 32,473 35,797

Financial Liabilities - Bank Overdrafts (1,810) (112)

Financial Assets - Loans & Current & Non-Current Receiv. 263 120

Financial Liabilities - Bank Current (69,227) (69,231)

Financial Liabilities - Bank Non-Current (20,134) (28,297)

Total Net Financial Position (58,435) (61,723)

Net debt at December 31, 2014 amounted to Euro 58,435 thousand.

Reference should be made to the paragraph: “Balance sheet” for comments relating to

the Net Financial Position of the F.I.L.A. Group.

� Note 12 - Share Capital and Equity

The changes in the account “Share Capital and Equity” are illustrated for the two years

in the table below:



140

Euro thousands

Share

capital

Legal

Reserve

IAS 19

Reserve

Other

Reserves

Translation

Difference

Retained

Earnings

Group Net

ProfitGroup Equity

Minorities

Capital and

Reserves

Minority

Profit/Loss

Minorities

EquityTotal Equity

December 31, 2013 2.748 602 (1.084) 11.154 (5.696) 70.733 13.371 91.827 533 (13) 520 92.348

Changes in the year 6 (284) 3.940 (6) 3.656 902 902 4.559

Acquisition treasury shares 0 0 0

Net Profit 16.575 16.575 30 30 16.605

Gains/(losses) recorded directly in equity 0 6 (284) 0 3.940 (6) 16.575 20.231 902 30 932 21.164

Allocation of the 2013 result 13.371 (13.371) 0 (13) 13 0 0

Dividends (1.526) (1.526) (17) (17) (1.543)

Recognition Minorities Capital and Reserves 0 0 0

December 31, 2014 2.748 608 (1.368) 11.154 (1.756) 82.572 16.575 110.532 1.405 30 1.435 111.968

Note 12.A Statement of Changes in Equity

Share capital

The Share Capital, fully paid-in, amounts to Euro 3,039,654.60, divided into 1,876,330

shares for a par value of Euro 1.62 each.

The nominal value of the Share Capital is reduced by the purchase of treasury shares, in

accordance with IAS 32, for a value of Euro 292 thousand.

The following table shows the reconciliation between the number of shares of all

classes in circulation at December 31, 2014 and the number of shares in circulation at

December 31, 2013:



141

In Euro31-12-2014 31-12-2013 31-12-2014 31-12-2013

In circulation at the beginning of the Year 1,876,330 1,800,750 3,039,655 2,917,215

Issued in the year 0 75,580 0 122,440

Sales in the year 0 0 0 0

Outstanding at the end of the year 1,876,330 1,876,330 3,039,655 3,039,655

Total treasury shares held 180,075 180,075 291,722 291,722

% treasury shares on share capital 9.60% 9.60% 9.60% 9.60%

Note 11.B - SHARES IN CIRCULATION

Number of Shares Nominal Value

At December 31, 2014 there were no privileges or restrictions of any nature on the

shares of the company, with the exception of the lien relating to the shares held by

F.I.L.A. S.p.A. in Omyacolor S.A. (France), Dixon Ticonderoga Co. (U.S.A.) and Lyra

KG (Germany) to guarantee the bank loans in place at December 31, 2014.

Each ordinary share attributes voting rights without limitations. Each class B share

gives the right to 3 exercisable votes in Shareholders’ Meeting (ordinary and

extraordinary) of F.I.L.A. S.p.A..

There are no other restrictions in the distribution of dividends and in the repayment of

capital with the exception of restrictions concerning loan contracts signed between

F.I.L.A. S.p.A. and Intesa Sanpaolo in 2009 and between F.I.L.A. S.p.A. and BNL -

Intesa Sanpaolo in 2011. The restriction relates to the payment and/or distribution of

dividends to shareholders within an annual maximum limit of Euro 2,500 thousand or,

in any case 15% of the profits of the Group.



142

Legal reserve

The account at December 31, 2014 amounts to Euro 608 thousand, equal to 22.13% of

the share capital. The increase compared to December 31, 2013 of Euro 6 thousand is

attributable to the allocation of part of the 2013 result approved by the Shareholders’

Meeting on April 28, 2014. The allocation of this amount to the legal reserve

represents the amount necessary to re-establish the statutory obligations as per Article

2430 of the Civil Code.

IAS 19 Reserve

Following the application of IAS 19, the account amounts to Euro 1,368 thousand at

December 31, 2014 (loss) and Euro 1,084 thousand at December 31, 2013 (loss).

Other reserves

The account amounts to Euro 11,154 thousand at December 31, 2014, unchanged

compared to December 31, 2013.

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 2014 are illustrated below:

Euro thousands Translation Difference

December 31, 2013 (5,696)

Changes in the year:

Difference between Period Average Rate and Year-End Rate 905

Difference between Historical Rate and Year-End Rate 3,035

December 31, 2014 (1,756)

Change in year 3,940



143

Retained earnings

The account amounted to Euro 82,572 thousand at December 31, 2014 and Euro 70,733

thousand at December 31, 2013.

The change between the two periods is generated from the allocation of the 2013 result,

amounting to Euro 13,371 thousand, to the retained earnings reserve for Euro 11,845

thousand and to the distribution of dividends to shareholders for Euro 1,526 thousand.

Minority interest equity

Minority interest equity increased by Euro 915 thousand, principally due to the effect of

minority interest holdings in subsidiaries: Industria Maimeri S.p.A. (49%), FILA Hellas

SA (50%) and FILA Cartorama SA PTY LTD (49%) which entered into the

consolidation scope during the year and due to the profits for the year attributable to the

“minority” holdings amounting to Euro 30 thousand, principally relating to the

subsidiary Lyra KG (Germany) and the distribution of dividends during the year

totalling Euro 17 thousand, as well as the increase in the translation reserve of Euro 172

thousand.

The availability and distributability of shareholders’ equity is outlined in the following

table:



144

Equity AccountBalance at

December 31,

2014

Possibility of

Utilisation

Quota

Available

Euro thousandscover losses

other

reasons

Share capital 2,748 0 0 292

Capital Reserves:

Legal Reserve 608 A 608 0 0

IAS 19 Reserve (1,368) 0 0 0

Other Reserves 11,154 B, C 11,154 0 0

Translation Differences (1,756) 0 0 0

Retained Earnings 82,572 B, C 82,572 0 37,396

Total 93,958 94,334 0 37,688

Key:

A - Available only to cover losses

B - Available to cover losses and capital increases

C - Distributable

Note 12.C ORIGIN, POSSIBILITY FOR UTILISATION AND DISTRIBUTION OF EQUITY

Summary of Utilisations in Last

3 Years

(2012-2014)

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 calculation of the basic earnings per share is as follows:

in Euro FY 2014 FY 2013

Net profit attributable to ordinary shareholders 16,575,455 13,371,038

Weighted average number of shares in circulation (number of shares) 1,696,255 1,696,255

Number of Shares in Circulation 1,876,330 1,876,330

Treasury Shares in Portfolio (180,075) (180,075)

Basic earnings per share 9.77 7.88

The diluted earnings per share coincide with the basic earnings per share as there are no

potential ordinary shares (financial instruments or other contracts which may entitle its

holder to ordinary shares).

The table below illustrates the reconciliation between the net equity of the Parent

Company F.I.L.A. S.p.A. and the consolidated net equity and the reconciliation between



145

the result of the Parent Company F.I.L.A. S.p.A. and the consolidated result:

Euro thousands

F.I.L.A. S.p.A. Equity 63,822

Effect elimination intercompany margins 444

Consolidation effect Omyacolor S.A. (France) 9,594

Consolidation effect F.I.L.A. Hispania S.A. (Spain) 2,690

Consolidation efffect Licyn Mercantil Industrial Ltda (Brazil) (2,322)

Consolidation effect Dixon Ticonderoga group 39,807

Consolidation effect Lyra group (831)

Consolidation effect FILA Stationary and Office Equipment Industry Ltd. Co. (Turkey) (1,260)

Consolidation effect FILA Stationary O.O.O. (Russia) (603)

Consolidation effect FILA Hellas (Greece) 283

Consolidation effect Industrie Maimeri (Italy) 544

Consolidation effect FILA Cartorama S.A. (South Africa) (200)

F.I.L.A. Group Net Equity 111,968

Reconciliation at December 31, 2014 between Parent Company Equity and F.I.L.A. Group Equity

Euro thousands

F.I.L.A. S.p.A. Net Profit 6,019

Elimination of the effects of transactions between consolidated companies:

Dividends (4,211)

Inventory margins 258

Adjustlments to Group accounting principles:

Consolidation Industria Maimeri S.p.A. (121)

Consolidation Maimeri (U.S.A.) 134

Consolidation Writefine Private Limited (India) 443

Result of Subsidiaries of the Parent Company 14,084

Minority interest share (30)

F.I.L.A. Group Net Profit 16,575

Reconciliation at December 31, 2014 between Parent Company Result and F.I.L.A. Group Result



146

� Note 13 - Financial Liabilities

The balance at December 31, 2014 amounts to Euro 91,171 thousand (Euro 97,640

thousand at December 31, 2013), of which Euro 20,134 thousand long-term and Euro

71,037 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 December 31, 2014 is illustrated below.

Banks Other Lenders Bank Overdrafts

Euro thousandsPrincipal Interest Principal Interest Principal Interest

December 31, 2013 95,253 193 2,068 9 112 6 97,640 0

non-current portion 28,403 (190) 84 0 0 0 28,297 0

current portion 66,850 383 1,984 9 112 5 69,343 0

December 31, 2014 88,566 220 572 3 1,810 0 91,171 2,148

non-current portion 20,183 (112) 63 0 0 0 20,134 277

current portion 68,383 332 509 3 1,810 0 71,037 1,871

Change in year (6,687) 27 (1,496) (6) 1,698 (5) (6,469) 2,148

non-current portion (8,220) 78 (21) 0 0 0 (8,163) 277

current portion 1,533 (51) (1,475) (6) 1,698 (5) 1,694 1,871

Total Amount

Note 13.A - FINANCIAL LIABILITIES: Third Parties


scope

“Bank Loans – non-current portion” amounts to Euro 20,071 thousand (Euro 28,213

thousand at December 31, 2013). Non-current bank payables mainly refer to the capital

portion of loans contracted by the Parent Company F.I.L.A. S.p.A. in 2009 and paied in

2010, amounting to Euro 14,500 thousand (original amount of Euro 40 million) and the

capital portion of loans granted in July 2011 underwritten with Banca Nazionale del

Lavoro and Intesa Sanpaolo, amounting to Euro 4,500 thousand (original amount Euro

8 million), for the acquisition of the Indian company.

“Bank Loans – current portion” amounts to Euro 68,715 thousand (Euro 67,233

thousand at December 31, 2013). Current bank payables (capital portion) principally

relates to Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico – Euro 21,132 thousand), Dixon

Ticonderoga Company (U.S.A. – Euro 18,043 thousand), the Parent Company F.I.L.A.

S.p.A. (Italy – Euro 10,750 thousand), Lyra KG (Germany – Euro 8,192 thousand), Fila

Dixon Stationery (Kunshan) Co., Ltd. (China – Euro 5,403 thousand), FILA Stationary



147

and Office Equipment Industry Ltd. Co. (Turkey – Euro 1,807 thousand), Licyn

Mercantil Industrial Ltda (Brazil – Euro 1,596 thousand), Beijing F.I.L.A.-Dixon

Stationery Company Limited (China – Euro 778 thousand) and Industria Maimeri

S.p.A. (Euro 635 thousand).

The table below shows the breakdown of the capital portion of the “Financial

Liabilities” of the F.I.L.A. Group with indication of the relative interest applied and

contract maturity dates.

Euro thousands Company Interest Rate Maturity December 31, 2014 December 31, 2013

Non-current liabilities: bank payables

Intesa Sanpaolo F.I.L.A. S.p.A. (Italy) Euribor at 6 months + spread 1.40% January 2017 14,500 21,000

Banca Nazionale del Lavoro / Intesa Sanpaolo F.I.L.A. S.p.A. (Italy) Euribor at 6 months + spread 1.90% March 2018 4,500 5,750

Hypo Real Estate / EuroHypo Lyra KG (Germany) Rate of 4.42% / 4.25% (spread included) September 2020 901 1,076

Scotia Bank Inverlat Grupo F.I.L.A.-Dixon, S.A.de C.V. (Mexico) Rate of 4.34% + spread 2.5% December 2015 0 554

Made in Lombardy Industria Maimeri S.p.A. (Italy) Euribor at 3 months + spread 2.40% November 2021 208 0

Banco Itau Licyn Industrial Mercantil Ltda (Brazil) Rate of 6.5% (spread included) December 2016 74 23

Total non-current liabilities 20,183 28,403

Current liabilities: bank payables

Unicredito Italiano S.p.A. / Intesa Sanpaolo / Bank of the West Dixon Ticonderoga Company (U.S.A.) Rate of 1.95% / 1.87% (spread included) September 2015 * 18,043 16,246

Scotia Bank Inverlat / BBVA Bancomer / Banco Santander / Banco Nacional de México Grupo F.I.L.A.-Dixon, S.A.de C.V. (Mexico)Rate of 3.2% + spread 1.45% / 3.79% + spread 1.5% / 3.4% + spread

1.37% / 3.37% + spread 1.5% / 0.25% + spread 1.65%September 2015 * 21,132 20,066

Intesa Sanpaolo F.I.L.A. S.p.A. (Italy) Euribor at 6 months + spread 1.40% January 2015 6,500 6,000

Banca Nazionale del Lavoro F.I.L.A. S.p.A. (Italy) Euribor at 6 months + spread 1.85% December 2014 0 1,050

Banca Nazionale del Lavoro / Intesa Sanpaolo F.I.L.A. S.p.A. (Italy) Euribor at 6 months + spread 2.10% March 2014 0 750

Banca Nazionale del Lavoro / Intesa Sanpaolo F.I.L.A. S.p.A. (Italy) Euribor at 6 months + spread 1.90% March 2015 1,250 1,500

Banca Nazionale del Lavoro / Intesa Sanpaolo F.I.L.A. S.p.A. (Italy) Euribor at 6 months + spread 1.70% September 2015 ** 3,000 4,000

HVB Lyra KG (Germany) Rate of 1.58% (spread included) September 2015 * 8,000 9,000

Hypo Real Estate / EuroHypo Lyra KG (Germany) Rate of 4.42% / 4.25% (spread included) September 2015 192 202

Unicredit Bank Beijing F.I.L.A.-Dixon Stationery Company Ltd (hina) Rate of 5.6% + spread 1.68% September 2015 * 778 4,614

TEB (BNL Branch)FILA Stationary and Office Equipment Industry Ltd. Co.

(Turkey)Rate of 6% (spread included) September 2015 * 1,807 1,795

Banco de Galicia y Buenos Aires F.I.L.A. Argentina S.A. (Argentina) Rate of 19% (spread included) September 2015 47 182

Made in Lombardy /Unicredito Italiano S.p.A. Industria Maimeri S.p.A. (Italy) Euribor at 3 months + spread 5%/2.4% May/November 2015 635 0

Intesa Sanpaolo / Unicredit Bank Fila Dixon Stationery (Kunshan) Co., Ltd. (China) Rate of 6.44% / 3.46%/5.6% (spread included) December 2015 * 5,403 0

Kolb Bank Omyacolor S.A. (France) Rate of 3.35% December 2014 0 16

BNP Paribas / Banco Itau / Caixa Economica Federal Licyn Industrial Mercantil Ltda (Brazil) Rate of 6.5% (spread included) September 2015 * 1,596 1,429

Total current liabilities 68,383 66,850

Note 13.B - FINANCIAL LIABILITIES: INTEREST RATE AND MATURITY

The breakdown of the F.I.L.A. Group long-term bank loans at December 31, 2014 is

illustrated below.

� Euro 14.5 million granted by Intesa Sanpaolo in December 2009, duration 8 years.

The repayment of the residual debt at December 31, 2014 is over 3 increasing

annual instalments, from January 2015 and with final instalment in January 2017.



148

The interest rate applied is the base Euribor at 6 months increased by a spread of

1.40%. The average effective interest rate applied on the loan in 2014 was 1.854%;

� Euro 4.5 million granted by Banca Nazionale del Lavoro and Intesa Sanpaolo in

July 2011, duration 7 years. The repayment of the residual debt at December 31,

2014 is over 4 annual instalments in arrears, from March 2015. The interest rate

applied is the base Euribor at 6 months increased by a spread of 1.90%. The

average effective interest rate applied on the loan in 2014 was 2.345%;

� Euro 901 thousand granted to Lyra KG (Germany) by various credit institutions

including Hypo Real Estate and EuroHypo. The repayment of the residual debt at

December 31, 2014 is over periodic instalments in arrears, from January 2015. The

interest rate, applied to different loans, is between a range of 4.25% (Hypo Real

Estate) and 4.42% (EuroHypo) including the spread;

� Euro 208 thousand granted by Made in Lombardy to Industria Maimeri S.p.A.

(Italy). The repayment of the residual debt at December 31, 2014 is from January

2016. The interest rate applied is the Euribor at 3 months increased by a spread of

2.4%.

� Euro 74 thousand granted to Licyn Industrial Mercantil Ltda (Brazil) by the credit

institution Banco Itau. The repayment of the residual debt at December 31, 2014 is

over monthly instalments in arrears, from January 2016. The interest rate applied is

in a range of between 6.5% and 17.2% including the spread.


transaction costs. Initial book value is subsequently adjusted to account for




recognition, the present value of expected cash flows ant the initial book value

(amortised cost method). The effect at December 31, 2014 of the amortised cost method

is Euro 112 thousand of interest.



149

The breakdown of current bank payables is shown below:

� Euro 21,132 thousand relating to credit lines granted to Grupo F.I.L.A.-Dixon, S.A.

de C.V. (Mexico) broken down as follows:

� Scotia Bank Inverlat S.A. equal to Euro 2,630 thousand at an annual interest

rate of 3.20% plus a spread of 1.45%;

� BBVA Bancomer S.A. , equal to Euro 7,790 thousand at an annual interest

rate between a range of 0.25% and 3.79% plus a spread between 1.5% and

1.65%;

� Banco Nacional de México S.A. equal to Euro 6,235 thousand at an annual

interest rate of 3.40% plus a spread of 1.4%;

� Bank Santander S.A. equal to Euro 4,477 thousand at an annual interest rate

of 3.37% plus a spread of 1.5%;

� Euro 18,043 thousand granted to Dixon Ticonderoga Company (U.S.A.) broken

down as follows:

� Euro 9,884 thousand relating to the current utilisation of the credit lines

totalling USD 20 million from Unicredito Italiano S.p.A. (USD 14 million in

September 2005 and subsequent extension for USD 6 million in March 2007)

at an interest rate of 1.95% including the spread;

� Euro 8,159 thousand relating to the current utilisation of the original credit

line totalling USD 10 million by Intesa Sanpaolo at an interest rate of 1.87%

including the spread;

� Euro 10,750 thousand relating to the Parent Company F.I.L.A. S.p.A. broken down

as follows:

� loan granted by Intesa Sanpaolo equal to Euro 6.5 million at an annual

interest rate of Euribor at 6 months plus a spread of 1.4%;

� current portion equal to Euro 1,250 thousand of the new loan granted by

Banca Nazionale del Lavoro and Intesa Sanpaolo, at an annual interest rate of

Euribor at 6 months plus a spread of 1.90%;



150

� current portion of Euro 3,000 thousand of the new credit line issued in 2011,

concerning the contract underwritten with Banca Nazionale del Lavoro and

Intesa Sanpaolo in July 2011 at an annual interest rate of Euribor at 6 months

plus a spread of 1.70%. The repayment of the current portion is scheduled in

two tranches of Euro 1,500 thousand each, in September 2015 and June

2016;

� Euro 8,192 thousand in favour of Lyra KG (Germany), as follows:

� Euro 8,000 thousand concerning the credit line granted by HVB at an annual

interest rate of 1.58% including the spread:

� Euro 161 thousand concerning the loan granted by Hypo Real Estate at an

annual interest rate of 4.25% including the spread;

� Euro 31 thousand concerning the loan granted by EuroHypo at an annual

interest rate of 4.42% including the spread;

� Euro 5,403 thousand granted in favour of Fila Dixon Stationery (Kunshan) Co.,

Ltd. (China), as follows:

� Euro 4,615 thousand concerning the credit line granted by Intesa SanPaolo at an

annual interest rate between a range between 3.46% and 6.44%;

� Euro 788 thousand concerning credit lines granted by Unicredit at an interest

rate of 5.60% including spread;

� Euro 1,807 thousand in favour of FILA Stationary and Office Equipment Industry

Ltd. Co. (Turkey) concerning the credit line granted by TEB (BNL Branch) at an

interest rate of 6% including the spread;

� Euro 1,596 thousand in favour of Licyn Mercantil Industrial Ltda (Brazil), as

follows:

� Euro 1,481 thousand concerning the credit line granted by BNP Paribas, at an

interest rate of 15.60% including spread;



151

� Euro 90 thousand concerning the credit line granted by Banco ITAU at an

annual interest rate of 6.5% including spread;

� Euro 25 thousand concerning the credit line granted by Caixa Economica

Federal at an annual interest rate of 19.60% including spread;

� Euro 778 thousand as a credit line granted in favour of Beijing F.I.L.A.-Dixon

Stationery Limited (China) by Unicredit Bank at an annual interest rate of 5.60%,

plus a spread of 1.68%;

� Euro 635 thousand granted in favour of Industria Maimeri S.p.A. (Italy), as follows:

� Euro 35 thousand concerning the Made in Lombardy loan, at an interest rate

of Euribor at 3 months, plus a spread of 2.4%;

� Euro 600 thousand concerning the loan granted by Unicredito Italiano S.p.A..

The interest rate applied is the Euribor at 3 months, plus a spread of 5%;

� Euro 47 thousand as a loan granted in favour of FILA Argentina S.A. (Argentina)

by Banco de Galicia y Buenos Aires at an annual interest rate of 19% including

spread.

A number of these 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 (Intesa

Sanpaolo and Banca Nazionale del Lavoro), is subject to set commitments and

covenants, reviewed following the loan underwritten with Banca Nazionale del Lavoro

and Intesa Sanpaolo on July 28, 2011.

Compliance with the covenants is verified according to the Net Financial Debt (NFD),

EBITDA (“Earnings Before Interest, Tax, Depreciation and Amortisation”) and Net



152

Financial Charges (NFC) reported in the F.I.L.A. Group consolidated financial

statements prepared as per international accounting standards.

The criteria for the calculation of the NFD, the EBITDA and the NFC are established

by the loan contract.

We report below the covenant indicators and the relative parameters to be complied

with at December 31 of each year, on the basis of the F.I.L.A. Group consolidated

financial statements from December 31, 2011.

NFD / EBITDA

� December 31, 2011: ≤ 3.25x

� December 31, 2012: ≤ 3.00x

� December 31, 2013: ≤ 2.75x

� from December 31, 2014 until the Maturity Date: < 2.5x

EBITDA / NFC

� December 31, 2011: ≥ 4.00x

� December 31, 2012: > 4.30x

� from December 31, 2013 until the Maturity Date: > 5x

The loan undertaken with Banca Nazionale del Lavoro and Intesa Sanpaolo matures on

March 31, 2018.

The nominal value of the “Financial Liabilities” stated above coincides with the

carrying amount.

The contractual maturity and details concerning “Bank Financial Liabilities” is reported

in the table below:



153

Current Financial

LiabilitiesNon-Current Financial Liabilities

Euro thousands

Per contractAmortised

Cost

UniCredit Revolving 9,884 0 0 9,884 2005 EUR United States 1.95% 0% 9,884 0 0 0 0

Intesa Revolving Loan 8,159 1 0 8,160 2010 EUR United States 1.87% 0% 8,160 0 0 0 0

Sub-total 18,043 1 0 18,044 18,044 0 0 0 0

Grupo Financiero Scotiabank Inverlat, S.A. 2,630 2 0 2,632 2014 EUR Mexico 3.20% 1.45% 2,632 0 0 0 0

Grupo Financiero BBVA Bancomer, S.A. 7,790 2 0 7,792 2014 EUR Mexico 0.25% / 3.79% 1.65% / 1.5% 7,792 0 0 0 0

Banco Nacional de México, S.A. 6,235 0 0 6,235 2014 EUR Mexico 3.40% 1.37% 6,235 0 0 0 0

Banco Santander, S.A. 4,477 0 0 4,477 2014 EUR Mexico 3.37% 1.50% 4,477 0 0 0 0

Sub-total 21,132 4 0 21,136 21,136 0 0 0 0

Intesa Sanpaolo 21,000 151 (74) 21,077 2009 EUR Italy Euribor at 6 months 1.40% 6,651 7,000 7,426 0 0

BNL / Intesa Sanpaolo 5,750 31 (38) 5,743 2011 EUR Italy Euribor at 6 months 1.90% 1,281 1,250 1,500 1,712 0

BNL / Intesa Sanpaolo 3,000 14 0 3,014 2011 EUR Italy Euribor at 6 months 1.70% 3,014 0 0 0 0

Sub-total 29,750 196 (112) 29,834 10,946 8,250 8,926 1,712 0

Made in Lombardy 243 0 0 243 2011 EUR Italy Euribor at 3 months 2.4% 35 35 35 35 103

Unicredito Italiano S.p.A. 600 14 0 614 2014 EUR Italy Euribor at 3 months 5.0% 614 0 0 0 0

Sub-total 843 14 0 857 649 35 35 35 103

HVB 8,000 0 0 8,000 2014 EUR Germany 1.58% 0% 8,000 0 0 0 0

EuroHypo 47 0 0 47 2014 EUR Germany 4.42% 0% 31 16 0 0 0

Hypo Real Estate 1,046 0 0 1,046 2014 EUR Germany 4.25% 0% 161 202 202 202 279

Sub-total 9,093 0 0 9,093 8,192 218 202 202 279

Unicredit Bank 778 10 0 788 2013 EUR China 5.60% 1.68% 788 0 0 0 0

Sub-total 778 10 0 788 788 0 0 0 0

Intesa Sanpaolo 4,615 32 0 4,647 2014 EUR China 6.44% - 3.46% 0% 4,647 0 0 0 0

Unicredit Bank 788 3 0 791 2014 EUR China 5.60% 0% 791 0 0 0 0

Sub-total 5,403 35 0 5,438 5,438 0 0 0 0

Banco de Galicia y Buenos Aires 47 7 0 54 2014 EUR Argentina 19.0% 0% 54 0 0 0 0

Sub-total 47 7 0 54 54 0 0 0 0

TEB (BNL branch) 1,807 65 0 1,872 2012 EUR Turkey 6.0% 0% 1,872 0 0 0 0

Sub-total 1,807 65 0 1,872 1,872 0 0 0 0

BNP Paribas 1,481 0 0 1,481 2014 EUR Brazil 15.60% 0% 1,481 0 0 0 0

Banco Itau 164 0 0 164 2014 EUR Brazil 6.50% 0% 90 74 0 0 0

Caixa Economica Federal 25 0 0 25 2014 EUR Brazil 19.60% 0% 25 0 0 0 0

Sub-total 1,670 0 0 1,670 1,596 74 0 0 0

Total amount 88,566 332 (112) 88,786 68,715 8,577 9,163 1,949 382

Beyond 2016

Note 13.C - BANK BORROWINGS F.I.L.A. GROUP

Description

General information Loan Repayments

Total Year Currency

2017

Country

InterestAmount

2018Principal

Interest

Variable Spread 2015 2016

The account “Financial Liabilities – Other Loans” includes principally financial

liabilities to other lenders of F.I.L.A. S.p.A., concerning BNP Paribas/Safety Kleen for

leasing contracts (Euro 19 thousand) and advances from factoring (Ifitalia -

International Factors S.p.A. – Euro 54 thousand).

“Financial Liabilities – Other Loans” at December 31, 2014 totalled Euro 575 thousand

(Euro 2,077 thousand at December 31, 2013), with the non-current portion totalling

Euro 63 thousand (Euro 84 thousand at December 31, 2013) and the current portion

amounting to Euro 512 thousand at December 31, 2014 (Euro 1,993 thousand at

December 31, 2013).

Details on the timing of financial cash flows and “Bank Financial Liabilities - Other

Lenders” at December 31, 2014 are illustrated in the following table:



154

Financial Liabilities

Current

Non-Current Financial

Liabilities Guarantees

Granted

Principal Interest Variable Spread 2015 2016 2017

Euro thousands

BNP Paribas (Leasing) 15 0 15 2009 EUR Italy 0.00% 0.00% 15 0 0 None

Safety Kleen Italia S.p.A. (Leasing) 4 0 4 2013 EUR Italy 0.00% 0.00% 2 2 0 None

International Factors S.p.A. (Ifitalia) 54 0 54 2014 EUR Italy Euribor 3 mth. 0.75% 54 0 0 None

Finance Working Capital 48 0 48 2013-2018 EUR USA 4.30% 0% 17 31 0 None

Finance Working Capital 54 0 54 2011 EUR France 0% 0% 24 19 11 None

Finance Working Capital 108 0 108 2014 EUR Italy 4% 0% 108 0 0 None

Finance Working Capital 17 1 18 2014 EUR Argentina 12% 0% 18 0 0 None

Finance Working Capital 252 2 254 2014 EUR Sth. Africa 8% 0% 254 0 0 None

Finance Working Capital 4 0 4 2014 EUR Germany 0% 0% 4 0 0 None

Finance Working Capital 16 0 16 2014 EUR Brazil 12.25% 0% 16 0 0 None

Total amount 572 3 575 512 52 11

General information

Note 13.D - LOANS FROM OTHER LENDERS

Loan Repayments

Amount Interest

Description

Total YearCurren

cyCountry

“Financial Liabilities – Bank Overdrafts” concern the current portion at December 31,

2014 of Euro 1,810 thousand (Euro 118 thousand at December 31, 2013), of Industria

Maimeri S.p.A. (Italy - Euro 1,638 thousand), the subsidiary Fila Stationary O.O.O.

(Russia - Euro 100 thousand) and PT. Lyra Akrelux Limited (Indonesia - Euro 72

thousand).

The breakdown of “Financial Liabilities – Bank Overdrafts” at December 31, 2014 is

outlined below:


Amount Cur. Fin. Liabilities

Principal Variable Spread 2015

Euro thousands

Various Credit Institutions 1,638 1,638 2014 EUR Italy Euribor 3 mth. 2.25% 2.6% 1,638 None

Bank BCA 72 72 2014 EUR Indonesia 12.00% 0% 72 None

Various Credit Institutions 100 100 2014 EUR Russia 2.60% 0% 100 None

Total amount 1,810 1,810 1,810

Note 13.E - BANK OVERDRAFTS

Interest

Description

Guarantees

GrantedTotal Year Currency Country

� 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.



155

The benefits recognised to employees of the Parent Company 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 Post-Employment Benefit Provision matured at December 31, 2006 is considered a

defined benefit plan as per IAS 19. The benefits guaranteed to employees, under the

form of the Post-Employment Benefit Provision, paid on the termination of

employment, are recognised in the period the right matures. The relative liability is

based on actuarial assumptions and the effective payable matured and not settled at the

reporting date. The discounting process, based on demographic and financial

assumptions, is undertaken applying the “Projected Unit Credit Method” by

professional actuaries.

The Post-Employment Benefits matured since January 1, 2007 are considered a defined

contribution plan and therefore contributions matured in the period were fully

recognised as a cost and recorded as a payable in the account “Other Current

Liabilities”, after the deduction of any contributions already paid.

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 fulfil 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.



156

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.

The amounts at December 31, 2014 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, 2013 1,977 1,870 3,847

Disbursements (440) (1,507) (1,947)

of which Amount in Year from Change in Consolidation Scope (283) (135) (418)

Financial Charges 75 109 184


Past Service Cost 0 51 51

Pension Cost for Service 0 1,528 1,528


IAS 19 Reserve 281 40 321


Effect Increase in Consolidation Scope 924 0 924

Translation differences 0 83 83

Other changes (38) (28) (66)

December 31, 2014 2,779 2,146 4,925

Change in year 802 276 1,078

The “Actuarial Losses” for 2014 totalled Euro 321 thousand, recognised net of the

fiscal effect directly to equity.

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

31-12-2014 31-12-2013

Present Value of Obligations Not Covered by Assets to Service Plan 2,779 1,977

2,779 1,977

Present Value of Obligations Covered by Assets to Service Plan 3,868 3,497

Fair value of Plan Assets Relating to the Obligations (1,722) (1,627)

2,146 1,870

Total amount 4,925 3,847



157

The financial assets at December 31, 2014 invested by the F.I.L.A. Group to cover

financial liabilities arising from “Employee Benefits” amount to Euro 1,722 thousand

(Euro 1,627 thousand at December 31, 2013) and relating to Dixon Ticonderoga

Company (U.S.A. – Euro 1,097 thousand) and F.I.L.A.-Dixon, S.A. de C.V. (Mexico –

Euro 625 thousand). The financial investments have an average yield of 5.5% on

invested capital (equally broken down between investments in the “Ticket PFG” fund

and investments in guaranteed yield contracts). The “structure” of financial

investments at December 31, 2014 did not change on the previous year.

The table below highlights the net cost of employee benefit components recognised to

the income statement in 2014 and 2013:

2. Cost Recognised in Income Statement

31-12-2014 31-12-2013

Pension Cost for Service (1,579) (1,331)

Financial Charges (184) (106)

Cost Recognised in Income Statement (1,763) (1,437)

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)

31-12-2014 31-12-2013

Annual Technical Discounting Rate 4.1% 5.8%

Increase Cost of Living 4.4% 3.5%

Future Increase in Salaries 2.4% 2.3%

Future Increase in Pensions 2.0% 1.8%

Details of the financial cash flows of employee benefits at December 31, 2014 are

illustrated in the table below.



158

Amount 2015 2016 2017 2018 Beyond 2018

Euro thousands

2,779 180 153 113 110 2,223

Other Employee Benefits 2,146 176 158 19 1 1,793

Total amount 4,925

Note 14.B EMPLOYEE BENEFITS: TIMING CASH FLOWS

Nature

Post-employment benefits Italy (TFR)

Timing cash flows

� Note 15 - Provision for Risks and Charges

The “Provision for Risks and Charges” amounts at December 31, 2014 to Euro 993

thousand (Euro 2,947 thousand at December 31, 2013), of which Euro 731 thousand

(Euro 565 thousand at December 31, 2013) concerning the non-current portion and

Euro 262 thousand (Euro 2,382 thousand at December 31, 2013) concerning the current

portion.

Euro thousands

Risks Provisions

for Tax Disputes

Risks Provisions

for Legal Disputes

Provisions cover

Losses in Associates

Provisions for

Agents

Restructuring

Provisions

Other

Provision

s

Amount

Amount


scope

December 31, 2013 39 96 0 504 1,913 395 2,947 0

non-current portion 0 0 0 464 0 101 565 0

current portion 39 96 0 40 1,913 294 2,382 0

December 31, 2014 51 67 0 686 0 189 993 96

non-current portion 0 0 0 646 0 85 731 96

current portion 51 67 0 40 0 104 262 0

Change in year 11 (29) 0 182 (1,914) (207) (1,954) 96

non-current portion 0 0 0 182 0 (16) 166 96

current portion 12 (29) (0) 0 (1,913) (190) (2,120) 0

Note 15A - PROVISION FOR RISKS AND CHARGES

The movement in the account “Provision for Risks and Charges” at December 31, 2014

was as follows:



159

Euro thousands

Risks Provisions for

Tax Disputes

Risks Provisions

for Legal Disputes

Provisions for

Agents

Restructuring

Provisions

Other

Provisions

Total Amount

December 31, 2013 39 96 504 1,913 395 2,947

Utilisation of Provisions 0 (80) (44) (2,120) (361) (2,606)

Provisions Accrued 11 20 59 0 173 263


Discounting 0 0 72 0 0 72


Effect Increase in Consolidation Scope 0 0 96 0 0 96

Exchange Differences 0 0 0 207 13 220

December 31, 2014 51 36 686 0 220 993

Change in year 11 (60) 183 (1,914) (175) (1,953)

Note 15.B PROVISION FOR RISKS AND CHARGES: CHANGES IN YEAR

� Risk Provisions for Tax Disputes:

this provision represents the best estimate by management and the tax

consultants of liabilities, principally 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 51 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.

The account at December 31, 2014 concerns the subsidiary Omyacolor S.A.

(France) for Euro 20 thousand and the Parent Company F.I.L.A. S.p.A. for Euro

16 thousand.

� Provisions for Agents:

the provision for agents concerns the agent supplementary indemnity provision

in place at December 31, 2014 of the Parent Company F.I.L.A. S.p.A. (Italy –

Euro 526 thousand) and of Industria Maimeri S.p.A. (Italy – Euro 120

thousand). The “Actuarial profit/Loss” for 2014 amounts to Euro 72 thousand.

The actuarial changes in the year, net of the tax effect, are recognised directly to

equity.



160

� Restructuring Provisions:

the restructuring provision, established in 2013, concerns the restructuring of

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

provision was completely utilised in the current year.

At December 31, 2014, no further allocations were made, according to the

available information to local management and contemporaneously restructuring

charges were recognised in the year, not covered by the provision at December

31, 2013, for Euro 310 thousand.

The current 2014 restructuring costs relate to the higher labour costs and the

transfer cost of operations from Beijing to Kunshan, both concerning the

extended transfer time of the production site.

The reorganisation process has to date resulted in 621 departures, in line with

the 2013 estimates.

� Other provisions:

the provision at December 31, 2014 principally reflects the best estimate of

environmental reclamation charges concerning the subsidiary Dixon

Ticonderoga Company (U.S.A. – Euro 82 thousand), following the activities

undertaken in the US in the period after the acquisition by F.I.L.A. S.p.A..

Reclamation times and estimates are revised on an ongoing basis 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



161

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.

Details on the timing of financial cash flows and “Provisions for risks and charges” at

December 31, 2014 (Euro 993 thousand) are illustrated in the following table:

2015 2016 2017 2018 Beyond 2018

Euro thousands

Provisions for Tax Disputes

Tax Assessments 51 0 0 51 0 0 0 0

Provisions for Legal Disputes

Appeal against Sentence 67 0 0 67 0 0 0 0

Provisions for Agents

Agents’ Supplementary Indemnity Provision 686 646 2.00% 40 50 50 50 496

Other Provisions

Other Provisions for Risks and Charges 173 0 0 88 50 35 0 0

Liquidation Costs Maimeri U.S.A. 16 0 0 16 0 0 0 0

Total amount 993 262 100 85 50 496

Note 15.C PROVISIONS FOR RISKS AND CHARGES: CASH FLOWS

Nature AmountActuarial Value

Year 2014

Discount Rate Applied for

Actuarial Value

Timing cash flows

� Note 16 - Deferred tax liabilities

The account amounts to Euro 5,825 thousand (Euro 6,004 thousand at December 31,

2013).

Note 16.A CHANGES IN DEFERRED TAX LIABILITIES

Euro thousands

December 31, 2013 6,004

Provisions 96

Utilisations (611)



Change in Equity 105

of which Amount in Year from Change in Consolidation Scope 22

December 31, 2014 5,825

Change in year (179)



162

The balance at December 31, 2014 principally includes deferred taxes calculated on

“Intangible Assets” and “Property, Plant and Equipment”, in addition to other

differences between tax values and carrying amounts.

Euro thousands 2014 Increase in

Consolidation Scope

2013 2014 2013 2014 2013

Deferred tax liabilities relating to:

Inventory (PPA Mexico) 0 201 (201) (631) 0 0Intangible Assets 2.988 231 2.613 144 (1.180) 0 0

Property, Plant and Equipment 1.532 1.275 257 227 0 0Personnel - IAS 19 108 32 180 (29) (104) (17)Dividends planned F.I.L.A. Group - IAS 12 136 137 (1) (586) 0 0Translation reserve difference 209 936 (936) 1.529 209 (876)Other 852 810 42 (1) 0 0

Total deferred tax liabilities 5.825 231 6.004 (515) (671) 105 (893)

NOTE 16.B - BREAKDOWN OF DEFERRED TAX LIABILITIES

Balance Sheet Values Income Statement Equity

The deferred tax provisions principally concern the Parent Company F.I.L.A. S.p.A.

(Italy – Euro 1,545 thousand), mainly within the “Property, Plant and Equipment”

category and Dixon Ticonderoga Company (U.S.A. – Euro 2,003 thousand) and Lycin

Mercantil Industrial Ltd (Brazil – Euro 636 thousand), principally concerning the

“Intangible Assets – Goodwill” category.

At December 31, 2014, deferred taxes charges were recorded in the income statement of

Euro 515 thousand and in equity of Euro 105 thousand, this latter concerning “Actuarial

Profits/Losses” under IAS 19 for “Post-Employment Benefits and Employee Benefit

Programmes”, in addition to the translation differences recognised on equity items of

Euro 209 thousand.

The expected timeframes for the reversal of deferred taxes is reported in the table

below.



163


Euro thousands December 31, 2014 2015 2016 2017 2018Beyond

2018


Intangible Assets 2,988 250 250 250 250 1988

Property, Plant and Equipment 1,532 100 100 100 100 1132

Personnel - IAS 19 108 50 58 0 0 0

Dividends planned F.I.L.A. Group - IAS 12 136 136 0 0 0 0

Translation reserve difference 209 100 109 0 0 0

Other 852 150 150 150 150 252

Total deferred tax liabilities 5,825 786 667 500 500 3,372

NOTE 16.C - REVERSAL YEAR OF DEFERRED TAX LIABILITIES

Expiry Date

The amount of deferred taxes that are estimated to reverse to the income statement

within 12 months at the reporting date total Euro 1,645 thousand.

� Note 17 - Provisions for Risks and Charges

The “Provision for Risks and Charges” at December 31, 2014 totalled Euro 262

thousand (Euro 2,382 thousand at December 31, 2013) and concern the current portion

of the “Provisions for Risks and Charges”.

Reference should be made to “Note 15 – Provisions for Risks and Charges” for greater

details.

� Note 18 – Current Tax Payables

The account “Current Tax Payables” concerns current tax payables, totalling Euro

2,536 thousand at December 31, 2014 (Euro 1,362 thousand at December 31, 2013),

relating to the F.I.L.A. Group companies.

� Note 19 - Trade and Other Payables

The breakdown of “Trade and Other Payables” of the F.I.L.A. Group is reported below:



164

Euro thousands December 31, 2014 December 31, 2013 Change in year Effect change in consolidation scope

Trade Payables 36,968 23,035 13,933 2,613

Tax Payables 3,839 3,538 301 59

Other Payables 7,442 5,603 1,839 1,952

Accrued Liabilities & Def.Income 630 395 235 -

Third parties 48,879 32,571 16,308 4,624

Trade Payables - Associates 205 0 205 0

Associates 205 0 205 0

Trade payables - Subsidiaries 0 4 (4) 0

Subsidiaries 0 4 (4) 0

Total amount 49,084 32,575 16,509 4,624

Note 19.A TRADE AND OTHER PAYABLES

“Trade and Other Payables” at December 31, 2014 amounted to Euro 49,084 thousand


The increase in “Trade Payables” (Euro 16,509 thousand) is due in part to the expanded

consolidation scope (Euro 4,624 thousand), in addition to increased Group revenue.

The breakdown of trade payables by region is reported below:



scope

Europe 20,763 12,937 7,826 2,613

North America 5,470 3,409 2,061 0


Rest of the World 7,006 4,365 2,641 0

Third parties 36,968 23,035 13,933 2,613

Note 19.B TRADE PAYABLES THIRD PARTIES - REGIONAL BREAKDOWN

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 3,839 thousand at

December 31, 2014 (Euro 3,538 thousand at December 31, 2013), of which Euro 2,696



165

thousand VAT payables and Euro 1,143 thousand concerning tax payables other than

current taxes. VAT payables principally concern the Mexican subsidiary (Euro 1,936

thousand) and the Chinese subsidiary (Euro 410 thousand).

“Other Tax Payables” concern employee withholding taxes arising in December 2014

and paid in January 2015 and principally relating to the Mexican subsidiary (Euro 316

thousand), the Parent Company (Euro 311 thousand) and the French subsidiary (Euro

110 thousand).

“Other Payables” amount to Euro 7,442 thousand at December 31, 2014 and principally

include:

� employee salary payables of Euro 4,032 thousand (Euro 2,561 thousand at

December 31, 2013);

� social security contributions to be paid of Euro 1,874 thousand (Euro 1,876

thousand at December 31, 2013);

� payables for agent commissions of Euro 199 thousand (Euro 218 thousand at

December 31, 2013).

The carrying amount of “Tax Payables”, “Other Payables” and “Accrued Liabilities and

Deferred Income” at the reporting date approximate their fair value.

� Note 20 – Operating Revenue

Operating revenue in 2014 amounted to Euro 233,585 thousand (Euro 218,864

thousand in 2013).



166

Revenue was broken down as follows:

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in

consolidation scope at

December 31, 2014

Revenue from Sales and Service 248,207 232,639 15,567 9,874

Adjustments on Sales (14,622) (13,776) (846) (182)

Returns on Sales (7,370) (6,653) (717) (75)

Discounts, Allowances and Premiums (7,252) (7,123) (129) (107)

Total amount 233,585 218,864 13,875 9,692

Note 20.A OPERATING REVENUE

The breakdown of revenue by end customer location is reported in the following table:

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Europe 111,011 100,220 10,791 9,482

North America 62,874 62,417 457 0


Rest of the World 9,108 8,731 377 210

Total amount 233,585 218,864 14,721 9,692

Note 20.B OPERATING REVENUE

� 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.

“Other Revenue and Income” in 2014 amounted to Euro 3,817 thousand (Euro 3,291

thousand in 2013).

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Gains on Sale of Property, Plant and Equipment 42 22 19 0

Unrealised Exchange Gains on Commercial Transactions 1,467 312 1,155 9

Realised Exchange Gains on Commercial Transactions 1,076 1,165 (89) 2

Other Revenue and Income 1,232 1,792 (560) 28

Total amount 3,817 3,291 526 39

Note 21 – OTHER REVENUE AND INCOME



167

“Other Revenue and Income” mainly includes:

� commissions from Dixon Ticonderoga brand sales by a wholesaler to one of the

major American distributors for Euro 284 thousand;

� sale of production waste for Euro 579 thousand, concerning Beijing F.I.L.A.-

Dixon Stationery Company Ltd. and Grupo F.I.L.A.-Dixon, S.A. de C.V.

(Mexico).

� 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.

The breakdown is provided below:

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Raw materials, Ancillary, Consumables and Goods (85,475) (72,462) (13,012) (4,911)

Shipping Expenses on Purchases (5,838) (4,727) (1,111) (20)

Packaging (1,831) (1,491) (340) (3)

Import Charges and Customs Duties (2,668) (2,150) (518) 0

Other Accessory Charges on Purchases (5,948) (5,218) (730) (38)

Adjustments on Purchases 46 140 (94) (0)

Returns on Purchases 0 117 (117) 0

Discounts, Allowances and Premiums 46 22 23 (0)

Total amount (101,716) (85,908) (15,808) (4,972)

Note 22 - COSTS FOR RAW MATERIALS, ANCILLARY, CONSUMABLES AND GOODS

The increase in the account is mainly due to the sourcing of raw materials, ancillary,

consumables and goods by the Parent Company, by the subsidiary Dixon Ticonderoga

Co. (U.S.A), by Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico) and due to the

incorporation of the subsidiary Industria Maimeri S.p.A. (Italy). The movement in the

account is in line with the revenue performance and follows also management’s strategy

to increase inventories at year-end to meet future sales forecasts.



168

The increase in “Import Charges and Customs Duties” on 2013 (Euro 518 thousand) is

in line with the movements in “Purchases of Raw Materials, Ancillary, Consumables

and Goods”.

“Other Accessory Charges and Other Raw Material, Consumable and Goods

Purchases” include all accessory charges concerning purchases made, such as

outsourcing and consortium contributions. The increase in 2014 principally relates to

the Parent Company.

Non-recurring transport costs totalled Euro 100 thousand (Beijing F.I.L.A.-Dixon

Stationery Company - China) for the transfer of the Chinese production base.

The increases in inventories at December 31, 2014 totalled Euro 10,764 thousand, of

which:

• increase of “Raw Materials, Ancillary, Consumables and Goods” for Euro 5,133

thousand (increase of Euro 741 thousand in 2013);

• increase in “Contract Work-in-Progress and Semi-Finished products” of Euro

1,323 thousand (increase of Euro 475 thousand in 2013);

• increase in “Finished Products” of Euro 4,308 thousand (decrease of Euro 7,400

thousand in 2013).

� Note 23 - Service Costs and Rent, Leases and Similar Costs

“Service Costs and Rent, Leases and Similar Costs” amounted in 2014 to Euro 57,655

thousand (Euro 50,850 thousand in 2013).



169

Services costs are broken down as follows:

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Sundry services (5,452) (5,040) (412) (107)

Transport (8,290) (8,240) (50) (97)

Warehousing (589) (356) (233) (150)

Maintenance (2,866) (2,037) (829) (94)

Utilities (4,017) (3,391) (626) (114)

Consulting (7,093) (4,277) (2,816) (426)

Directors and Statutory Auditors Fees (3,197) (2,354) (843) (245)

Advertising, Promotions, Shows and Fairs (3,985) (3,382) (603) (47)

Cleaning (323) (314) (9) (8)

Bank Charges (845) (840) (4) (62)

Agents (5,373) (4,950) (423) (363)

Sales representatives (2,109) (1,724) (385) (122)

Sales Commissions (5,947) (5,936) (12) 0

Insurance (1,251) (1,160) (91) (43)

Other Service Costs (539) (1,109) 570 (21)

Hire Charges (3,709) (3,831) 122 (245)

Rental (701) (604) (97) (58)

Operating Leases (941) (891) (49) 0

Royalties and Patents (428) (412) (16) (205)

Total amount (57,655) (50,850) (6,805) (2,409)

Note 23 - SERVICE COSTS AND RENT, LEASES AND SIMILAR COSTS

In 2014, non-recurring service costs amounted to Euro 4,513 thousand, exclusively

relating to extraordinary projects in progress at the F.I.L.A. Group. This movement

principally concerns “Consultancy” for the following companies: F.I.L.A. S.p.A. (Italy

– Euro 4,187 thousand), Omyacolor S.A. (France – Euro 20 thousand), Lyra KG

(Germany – Euro 27 thousand), Beijing F.I.L.A.-Dixon Stationery Company (China –

Euro 14 thousand), Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico – Euro 27 thousand),

Dixon Ticonderoga Co. (U.S.A. – Euro 99 thousand), Industria Maimeri (Italy – Euro

122 thousand) and Fila Dixon Stationery (Kunshan) Co., Ltd. (China – Euro 17

thousand).

The movement on the previous year, in addition to that described, stems mainly from

“Advertising, Promotions, Shows and Trade Fairs” (Euro 603 thousand), principally

incurred by the Parent Company, by Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico), by

the subsidiary Omyacolor S.A. (France), F.I.L.A. S.p.A. and by Dixon Ticonderoga Co.



170

(U.S.A.), in addition to the account “Directors and Statutory Auditors Remuneration”

(Euro 843 thousand), almost exclusively concerning F.I.L.A. S.p.A..

� Note 24 – Other Costs

“Other Costs” in 2014 totalled Euro 4,947 thousand (Euro 5,641 thousand in 2013).

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Unrealised Exchange Losses on Commercial Transactions (1,795) (818) (977) 0

Realised Exchange Losses on Commercial Transactions (1,578) (1,696) 118 (8)

Other Operating Charges (1,574) (1,171) (403) (11)

Provisions for Risks and Other Provisions 0 (1,956) 1,956 0

Total amount (4,947) (5,641) 694 (19)

Note 24 – OTHER COSTS

“Other Operating Costs” of Euro 1,574 thousand principally concern the subsidiary

Beijing F.I.L.A.-Dixon Stationery Company (China – Euro 669 thousand), the

subsidiary Dixon Ticonderoga Co. (U.S.A. – Euro 343 thousand), the subsidiary Lyra

KG (Germany – Euro 221 thousand), the Parent Company F.I.L.A. S.p.A. (Italy – Euro

153 thousand), the subsidiary Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico – Euro 25

thousand) and the subsidiary Omyacolor S.A. (France – Euro 20 thousand); the account

mainly relates 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.

� Note 25 – Labour Costs

“Labour Costs” include all costs and expenses incurred for employees.

These costs are broken down as follows:



171

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Wages and Salaries (36,297) (31,517) (4,780) (1,940)

Social Security Charges (9,547) (8,245) (1,303) (628)

Post-Employment Benefits (1,579) (1,331) (248) (135)

Other Personnel Expenses (1,405) (1,112) (293) (161)

Total amount (48,829) (42,205) (6,624) (2,865)

Note 25 – LABOUR COSTS

The movements in F.I.L.A. Group labour costs concern, in addition to the consolidation

of Industria Maimeri S.p.A., the workforces of Grupo F.I.L.A.-Dixon, S.A. de C.V.

(Mexico) and Fila Dixon Stationery (Kunshan) Co., Ltd. (China), particularly in terms

of skilled workers at the production facilities, in addition to standard wage increases.

Non-recurring F.I.L.A. Group labour costs totalled Euro 591 thousand, of which Beijing

F.I.L.A.-Dixon Stationery Company (China – Euro 212 thousand) concerning the

transfer of the Chinese production base, Omyacolor S.A. (France – Euro 27 thousand)

and Dixon Ticonderoga Co. (U.S.A. – Euro 167 thousand), Industria Maimeri S.p.A.

(Italy – Euro 180 thousand) and Lyra KG (Germany – Euro 5 thousand) for

restructuring.

The F.I.L.A. Group workforce at December 31, 2014 numbered 2,842 FTE compared to

2,401 at December 31, 2013.

The increase principally concerns the expanded workforce, particularly in terms of the

skilled worker category at the subsidiary Grupo F.I.L.A. –Dixon, S.A. de C.V. (Mexico

– 86 employees) and the subsidiary Fila Dixon Stationery (Kunshan) Co., Ltd. (China)

following the transfer of the production base (236 employees). The workforce

increased following the incorporation of the subsidiary Industria Maimeri S.p.A. (Italy -

72 employees) and the subsidiary FILA Cartorama S.A. PTY Ltd (South Africa – 8

employees).



172

The following table reports the breakdown of the F.I.L.A. Group workforce at

December 31, 2014 and 2013.

-

500

1,000

1,500

2,000

2,500

3,000

Europe North America Central/South

America

Rest of World F.I.L.A. Group

2014 515 103 1,286 938 2,842

2013 435 92 1,187 687 2,401

Personnel F.I.L.A. Group

and the breakdown and movement by worker category:

Manager White-collar Blue-collar Total

Total at 31/12/2013 63 677 1,661 2,401

Increases 9 219 1,035 1,263

Decreases (14) (186) (622) (822)

Total at 31/12/2014 58 710 2,074 2,842

Restructuring Departures (10) (37) (574) (621)

PERSONNEL

Restructuring departures concern the transfer of the Chinese production base. For

further details, reference should be made to the “F.I.L.A. Group consolidated financial

statements”: Note 15: Provision for risks and charges”.

The average number of employees of the companies in the consolidation scope, by

category, is as follows:



173

Average headcount Manager White-collar Blue-collar Total

Total at 31/12/2013 62 664 1,721 2,446

Total at 31/12/2014 55 752 2,010 2,816

PERSONNEL

The turn-over was affected by the restructuring of the workforce, principally in terms of

the blue-collar category.

� Note 26 – Amortisation and Depreciation

Amortisation and depreciation in 2014 and 2013 is reported below:

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Depreciation of Property, Plant and Equipment (4,139) (4,470) 331 (72)

Amortisation of Intangible Assets (1,559) (1,563) 5 (33)

Total amount (5,698) (6,033) 336 (104)

Note 26 – AMORTISATION AND DEPRECIATION

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 write-downs in 2014 and 2013 are reported below:



174

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Write-down Property, Plant and Equipment (48) (8) (41) (22)

Doubtful Debt Provision (296) (1,032) 736 (4)

Total amount (344) (1,039) 695 (26)

Note 27 – WRITE-DOWNS

Trade receivable provisions principally concern the Parent Company F.I.L.A. S.p.A.

(Italy), following a solvency assessment.

� Note 28 – Financial Income

Financial income, together with the comment on the main changes on the previous year,

was as follows:

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Interest on Bank Deposits 53 56 (4) 1

Other Financial Income 110 108 3 0

Unrealised Exchange Gains on Financial Transactions 226 106 121 6

Realised Exchange Gains on Financial Transactions 200 371 (172) 0

Total amount 589 641 (52) 7

Note 28 - FINANCIAL INCOME

“Other Financial Income” mainly includes interest from short-term investments of

excess liquidity by the Brazilian subsidiary (Euro 34 thousand), by the Mexican

subsidiary (Euro 26 thousand) and by the Swedish subsidiary (Euro 16 thousand) in

2014.

� Note 29 - Financial Charges

Financial charges, together with the comment on the main changes on the previous

year, were as follows:



175

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Interest on Bank Overdrafts (278) (272) (6) (71)

Interest on Bank Loans (3,504) (4,088) 584 (5)

Interest to Other Lenders (7) (4) (3) (5)

Other Financial Charges (729) (645) (85) (24)

Unrealised Exchange Losses on Financial Transactions (516) (681) 165 (12)

Realised Exchange Losses on Financial Transactions (50) (420) 370 0

Total amount (5,084) (6,109) 1,025 (117)

Note 29 - FINANCIAL CHARGES

“Bank Loan Interest” includes Euro 693 thousand of interest incurred on the loans

granted by Intesa Sanpaolo and Banca Nazionale del Lavoro to the Parent Company

F.I.L.A. S.p.A.. The remaining interest charges principally concern the subsidiary

Grupo F.I.L.A.-Dixon, S.A. de .V. (Mexico – Euro 1,382 thousand), the subsidiary

Dixon Ticonderoga Company (U.S.A – Euro 426 thousand), the subsidiary Lyra KG

(Germany – Euro 205 thousand) and the subsidiary Beijing F.I.L.A.-Dixon Stationery

Company Limited (China – Euro 111 thousand) following loans undertaken locally

(reference should be made to Note 13 for the breakdown of loans).

� Note 30 - Foreign Currency Transactions

Exchange differences on financial and commercial transactions in foreign currencies in

2014 are reported below.



176

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Unrealised Exchange Gains on Commercial Transactions 1,467 312 1,155 9

Realised Exchange Gains on Commercial Transactions 1,076 1,165 (89) 2

-

Unrealised Exchange Losses on Commercial Transactions (1,795) (818) (977) -

Realised Exchange Losses on Commercial Transactions (1,578) (1,696) 118 (8)

Total exchange differences on commercial transactions (830) (1,039) 207 3

Unrealised Exchange Gains on Financial Transactions 226 106 121 6

Realised Exchange Gains on Financial Transactions 200 371 (172) -

0

Unrealised Exchange Losses on Financial Transactions (516) (681) 165 (12)

Realised Exchange Losses on Financial Transactions (50) (420) 370 -

Total exchange differences on financial transactions (140) (623) 484 (6)

Total net value of exchange differences (970) (1,662) 690 (3)

Note 30 - FOREIGN CURRENCY TRANSACTIONS

Exchange differences in 2014 principally arose from the movement of local currencies

(principally the US Dollar, the Canadian Dollar and the respective South American

currencies) against the Euro, in addition to the movement in the year 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” total Euro 443 thousand (Euro

337 thousand in 2013) and exclusively concern the adjustment of the share of the 2014

result of the associated company Writefine Products Private Limited (India) on the basis

of the stake held by F.I.L.A. S.p.A. in the year.

� Note 32 - Income Taxes

These amounted to Euro 8,243 thousand in 2014 (Euro 7,433 thousand in 2013) and

concern current taxes for Euro 9,714 thousand (Euro 8,152 thousand in 2013) and net

deferred tax income of Euro 1,471 thousand (Euro 719 thousand in 2013).

� Note 32.A – Current Income Taxes

The breakdown is as follows.



177

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Current Income Taxes - Italy (2,307) (1,723) (585) (96)

Current Income Taxes - Foreign (7,406) (6,429) (977) (95)

Total amount (9,714) (8,152) (1,562) (192)

Note 32.A INCOME TAXES

Current Italian taxes concern F.I.L.A. S.p.A. (Euro 2,211 thousand) and Industria

Maimeri S.p.A. (Euro 96 thousand).

The breakdown of current overseas taxes is attached.

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in

consolidation scope

at December 31,

2014

Omyacolor S.A. (France) (981) (782) (199) -

F.I.L.A. Hispania S.L. (Spain) (492) (375) (117) -

Dixon Ticonderoga Company (U.S.A.) (3,288) (2,792) (496) -

FILALYRA GB Ltd. (United Kingdom) (121) (94) (28) -

Beijing F.I.L.A.-Dixon Stationery Company Limited (China) 31 (682) 713 -

Dixon Ticonderoga Inc. (Canada) (158) (43) (115) -

Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico) (1,952) (1,250) (702) -

FILA Argentina S.A. (Argentina) (194) (155) (39) -

PT. Lyra Akrelux (Indonesia) (41) (82) 42 -

Lyra GmbH & Co. K.G. (Germany) (24) (20) (4) -

Lyra Scandinavia AB (Sweden) (42) (119) 77 -

Licyn Mercantil Industrial Ltda (Brazil) (49) (35) (15) -

Fila Hellas SA (Greece) (95) 0 (95) (95)

Total amount (7,406) (6,429) (977) (95)

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.

� Note 32.B – Deferred Taxes




178

Euro thousands

2014 2013 Change 2013 - 2014

Effect change in


December 31, 2014

Deferred Tax Liabilities 515 671 (156) (112)

Deferred Tax Assets 955 49 906 21

Total amount 1,470 719 750 (91)

Note 32.B DEFERRED TAX INCOME AND CHARGES

The overall tax effects in the year, compared to the previous year, are reported below.

Euro thousands

2014 % 2013 %

Pre-Tax Consolidated Result of the F.I.L.A. Group 24,925 20,987

Result of Companies of the F.I.L.A. Group not subject to Current Inc. Taxes 1,495 694

Consolidation Effect of the F.I.L.A. Group - Before Income Taxes 3,637 4,803

Theoretical Tax Base 30,057 26,484

Total current income taxes in accounts (9,714) 32.32% (8,152) 30.78%

Deferred Tax Asset in Year on Temporary Differences 956 671

Deferred Tax Liability in Year on Temporary Differences 515 48

Total deferred tax income & charges in accounts 1,471 -4.89% 719 -2.71%

Total income taxes in accounts (8,243) 27.42% (7,433) 28.07%

Note 32.C TOTAL INCOME TAXES IN YEAR

The “Total taxes recognised to the income statement” of Euro 8,243 thousand represent

the average effective tax rate for the F.I.L.A. Group of 27.42%, reducing slightly

(0.65%) on the previous year.

Current tax levels increased, principally at F.I.L.A. S.p.A. (Italy – Euro 261 thousand)

and mainly due to the reduced level of tax deductions in the year and at Dixon

Ticonderoga Company (U.S.A. – Euro 398 thousand), essentially due to the higher tax

rate on assessable income and the conclusion of the tax benefit deriving from prior tax

losses.

However, thanks to the deferred tax benefit, the Group effective tax rate was lower than

the previous year.



179

Business Combinations

a) Industria Maimeri S.p.A.

On March 26, 2014, F.I.L.A. S.p.A. acquired 51% of Industria Maimeri S.p.A. for

consideration of Euro 206 thousand.

On March 31, 2014, Industria Maimeri S.p.A. acquired the business unit of Maimeri

S.p.A. for Euro 1,793 thousand, recognising Goodwill of Euro 2,066 thousand. Under

IFRS 3 Industria Maimeri S.p.A. adjusted the initial goodwill value to Euro 1,605

thousand. The consolidated financial statements include the result of Industria Maimeri

S.p.A. for the period from the acquisition date to December 31, 2014. The

consideration for the investment of Euro 206 thousand, plus accessory acquisition

charges, was allocated to assets and liabilities according to the fair value at the

acquisition date.

The cash flows concerning incorporation are reported below:

405

Fair Value of acquisition of Industria Maimeri S.p.A. 401

139

206

67

Net Book Value of acquisition of Industria Maimeri S.p.A. at March 26, 2014

Cash and Cash Equivalents Acquired A)

Price paid by F.I.L.A. S.p.A. B)

Cash Utilised for the acquisition of Industria Maimeri S.p.A. at March 26, 2014 B) - A)

The allocation of the differential between “Investment Cost” and the “Net Carrying

Amount“ of Industria Maimeri S.p.A. at March 26, 2014 and the generation of no

“Goodwill” from the consolidation is reported below:

326

120

206

206

(0)

Acquisition price of the Investment of F.I.L.A. S.p.A in Industria Maimeri S.p.A. net of consultancy

Net Value of acquisition of Industria Maimeri S.p.A. owned by F.I.L.A. S.p.A. (51%)

Differential between the acquisition price of the Investment and the Net Book Value of the acquisition of

Industria Maimeri S.p.A. at March 26, 2014

Value of the Investment of F.I.L.A. S.p.A. in Industria Maimeri S.p.A.

Consultancy charges capitalised in the separate financial statements of F.I.L.A S.p.A. and expensed in the



180

The value of assets and liabilities of Industria Maimeri S.p.A. on the incorporation date

were as follows:

Euro thousands Book ValueAlignment

Fair Value - IFRS 3Fair Value

ASSETS 9,307 203 9,510

Non-Current Assets 2,861 (286) 2,576

Intangible Assets 2,284 (499) 1,785 I)

of which Goodwill 2,066 (371) 1,695

Property, Plant and Equipment 328 196 525 II.

Non-Current Financial Assets 5 - 5

Investments measured at Cost 244 (165) 79 III.

Deferred Tax Assets - 182 182 IV.

Current Assets 6,446 489 6,934

Inventories 3,145 559 3,704 V)

Trade and Other Receivables 3,169 (77) 3,092

Cash and Cash Equivalents 132 7 139

LIABILITIES AND EQUITY 9,307 203 9,510

Equity 340 61 401

Share Capital 405 (4) 401

Net Profit/(Loss) (65) 65 ()

NON-CURRENT LIABILITIES 2,412 53 2,465

Non-Current Financial Liabilities 1,185 - 1,185

Employee Benefits 942 (18) 924 VI)

Provisions for Risks and Charges 256 (160) 96 VI)

Deferred Tax Liabilities - 231 231 IV.

Other Payables 29 - 29

Current Liabilities 6,556 89 6,644

Current Financial Liabilities 1,818 - 1,818

Trade and Other Payables 4,738 89 4,826

Other Current Liabilities - - -

The principal adjustments made to the balance sheet following the fair value

measurement of assets and liabilities is reported below:

I) The carrying amount of “Intangible Assets” is adjusted for Euro -499 thousand, of

which Euro -371 thousand concerning Goodwill generated by the acquisition of the

Maimeri S.p.A. business unit and Euro -128 thousand concerning the application of IAS

38 (Intangible Assets), principally relating to advertising costs and long-term deferred

charges.



181

II) The adjustment of the fair value of “Property, Plant and Equipment” for Euro -525

thousand, exclusively concerns the application of IAS 17 (Leasing).

III) The adjustments to the fair value of “Investments valued at cost” concerns the

write-down of the Maimeri U.S.A. investment following management’s decision to

liquidate and the relative accessory charges.

IV) The adjustments to the fair value of balance sheet items gave rise to a deferred tax

asset of Euro 182 thousand and a liability of Euro 231 thousand, calculated according to

IAS 12 (Taxes).

V) The application of IAS 2 (Inventories) resulted in adjustments to the value of

inventories of Euro 559 thousand.

VI) The application of IAS 19 (Employee Benefits) resulted in a reduction to the

account of Euro -18 thousand and a reduction of Euro -160 thousand to the account

“Risk and Charges Provisions” in the Agents category.

The Balance Sheet and Income Statement at December 31, 2014 are reported below:



182

Euro thousandsAt December 31, 2014

ASSETS 9,581

NON-CURRENT ASSETS 2,662

Intangible Assets 1,773

Property, Plant and Equipment 513

Non-Current Financial Assets 104

Investments measured at Cost 112

Deferred Tax Assets 160

CURRENT ASSETS 6,920

Inventories 3,605

Trade and Other Receivables 3,312

Cash and cash equivalents 3

LIABILITIES AND EQUITY (9,581)

Equity (1,490)

Share Capital (1,614)

Reserves 48

Net Profit/(Loss) 76

Non-Current Liabilities (2,311)

Long-term financial liabilities (1,383)

Post-Employment Benefits (712)

Provisions for Risks and Charges (121)

Deferred Tax Liabilities (97)

Current Liabilities (5,780)

Current Financial Liabilities (2,396)

Current Tax Payables (96)

Trade and Other Payables (3,288)

Liabilities related to Non-Current and Current Assets Held-for-Sale 0



183

Euro thousands2014

Operating Revenue 7,362

Other Revenue and Income 31

TOTAL REVENUE 7,393

Raw Materials, Ancillary, Consumables and Goods (2,552)

Services and Rent, Leases and Similar Costs (1,967)

Other Operating Costs (17)

Change in Raw Materials, Semi-Finished, Work-in-progress and Finished Products (100)

Labour Costs (2,648)

Amortisation & Depreciation (80)

Write-downs (26)

TOTAL OPERATING COSTS (7,390)

EBIT 3

Financial Income 1

Financial Charges (106)

Income/Charges from Investments at Equity 33

NET FINANCIAL INCOME/(CHARGES) (73)

PRR-TAX LOSS (70)

Income Taxes (96)

Deferred Tax Income and Charges 91

TOTAL INCOME TAXES (6)

NET LOSS - CONTINUING OPERATIONS (76)

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS 0

NET LOSS FOR THE YEAR (76)



184

b) FILA Cartorama SA PTY LTD

On May 15, 2014, a 51% share was acquired in the company.

The consolidated financial statements include the result of FILA Cartorama SA PTY

LTD from the acquisition date to December 31, 2014. The consideration paid was Euro

0.3 thousand.

The company FILA Cartorama PTY LTD is involved solely in the sale of the writing,

arts and design products of the F.I.L.A. Group in South Africa.

The value of assets and liabilities of FILA Cartorama PTY LTD at the incorporation

date was as follows:

Euro thousands Book ValueAlignment

Fair Value - IFRS 3Fair Value

ASSETS 42 - 42

Non-Current Assets 24 - 24

Intangible Assets 2 - 2

Property, Plant and Equipment 17 - 17

Non-Current Financial Assets 5 - 5

Current Assets 18 - 18

Trade and Other Receivables 3 - 3

Cash and Cash Equivalents 15 - 15

LIABILITIES AND EQUITY 42 - 42

Equity (100) - (100)

Share Capital 0.3 - 0.3

Retained Earnings (101) - (101)

Current Liabilities 142 - 142

Current Financial Liabilities 101 - 101

Trade and Other Payables 41 - 41

The cash flows concerning incorporation are reported below:

(100)

Fair Value of acquisition of FILA Cartorama SA (South Africa) (100)

15

0.3

14.7

Net Book Value of acquisition of FILA Cartorama SA (South Africa) at May 15, 2014

Cash and Cash Equivalents Acquired A)

Price paid by F.I.L.A. S.p.A. B)

Cash Utilised for acquisition of FILA Cartorama SA (South Africa) at May 15, 2014



185

The allocation of the differential between “Investment Cost” and the “Net Carrying

Amount“ of FILA Cartorama PTY LTD at May 31, 2014 and the generation of

“Goodwill” from the consolidation is reported below:

0.3

0

0.3

(99.8)

101

0

101

Acq. price of the Investment of F.I.L.A. S.p.A in FILA Cartorama SA (South Africa) net of consultancy

Net Value of acquisition of FILA Cartorama SA (South Africa)

Diff. between acquisition price of Invest. & Net Book Value of acquisition of FILA Cartorama SA (South Africa) at May 15, 2014

Allocation of the differential between Investment Cost and the Net Book Value of FILA Cartorama SA PTY LTD

Goodwill generated from the consolidation of FILA Cartorama SA PTY LTD at the acquisition date May 15, 2014

Consultancy charges capitalised in the separate financial statements of F.I.L.A S.p.A. and expensed in the consolidated financial

statements in application of IFRS 3

Value of Investment of F.I.L.A. S.p.A in FILA Cartorama SA (South Africa)


Euro thousands

At December 31, 2014

ASSETS 1,015

NON-CURRENT ASSETS 84

Intangible Assets 13

Property, Plant and Equipment 66


CURRENT ASSETS 931

Inventories 667

Trade and Other Receivables 189

Cash and cash equivalents 74

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

LIABILITIES AND EQUITY (1,015)

Equity 300

Share Capital (1)

Reserves 107

Net Profit/(Loss) 194

Non-Current Liabilities 0

Current Liabilities (1,315)

Current Financial Liabilities (544)

Trade and Other Payables (771)

Liabilities rel. to Non-Cur. & Current Assets Held-for-Sale 0



186

Euro thousands 2014

Operating Revenue 184

Other Revenue and Income 7

TOTAL REVENUE 192

Raw Materials, Ancillary, Consumables and Goods (776)

Services and Rent, Leases and Similar Costs (168)

Change in Raw Materials, Semi-Finished, Work-in-progress and Finished Products 650

Labour Costs (73)


TOTAL OPERATING COSTS (374)

EBIT (183)

Financial Income 7



PRR-TAX LOSS (194)

TOTAL INCOME TAXES 0

NET LOSS - CONTINUING OPERATIONS (194)


NET LOSS FOR THE YEAR (194)



187

Other Changes to the consolidation scope

c) Incorporation of FILA Hellas SA

On January 3, 2014, a 50% investment was acquired, for consideration of Euro 12

thousand.

The consolidated financial statements include the result of FILA Hellas SA from the

acquisition date to December 31, 2014.

The company FILA Hellas SA is involved solely in the sale of the writing, arts and

design products of the F.I.L.A. Group in the Balkans area.


Euro thousands At December 31, 2014

ASSETS 822

Non-Current Assets 8

Intangible Assets 6


Current Assets 814

Inventories 301

Trade and Other Receivables 410

Cash and Cash Equivalents 103

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

LIABILITIES AND EQUITY (822)

Equity (295)

Share Capital (24)

Net Profit/(Loss) (271)

Non-Current Liabilities 0

Current Liabilities (527)

Current Tax Payables (95)

Trade and Other Payables (432)

Liabilities related to Non-Current and Current Assets Held-for-Sale 0



188

Euro thousands 2014

Operating Revenue 2,147

TOTAL REVENUE 2,147

Raw Materials, Ancillary, Consumables and Goods (1,644)

Services and Rent, Leases and Similar Costs (274)

Other Operating Costs (2)

Change in Raw Materials, Semi-Finished, Work-in-progress & Finished Prod. 301

Labour Costs (143)


TOTAL OPERATING COSTS (1,779)

EBIT 368



PRR-TAX PROFIT 366

Income Taxes (95)

TOTAL INCOME TAXES (95)

NET PROFIT - CONTINUING OPERATIONS 271


NET PROFIT FOR THE YEAR 271



189

Segment Reporting

In terms of segment reporting, the F.I.L.A. Group has adopted IFRS 8, obligatory from

January 1, 2009. This standard was previously applied in 2007, in advance and

voluntarily, under the option permitted by the standard and following the approval of

Regulation (EC) No. 1358/2007 of November 21, 2007 containing IFRS 8 by the

European Commission.

It requires an entity to base segment reporting on internal reporting, which is constantly

reviewed by the highest level of 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 Chinese

subsidiary.

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:



190

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)

North America

Dixon Ticonderoga Company (U.S.A.)

Dixon Ticonderoga Inc. (Canada)

Maimeri U.S.A. Inc. (U.S.A.)

Central and 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)

Rest of the World

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

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

PT. Lyra Akrelux (Indonesia)

Lyra Asia PTE Ltd. (Singapore)

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

FILA Australia PTY LTD (Australia)

FILA Cartorama SA PTY LTD (South Africa)

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



191

Business Segments – Balance Sheet

The “balance sheet” for the F.I.L.A. Group by region, at December 31, 2014 and

December 31, 2013, is reported below:


America

Central & S.

America

Rest of the

WorldConsolidation

F.I.L.A.

Group

December 2014

BALANCE SHEET

Non-Current Assets 36.700 9.053 15.070 4.137 (229) 64.731

of which Intercompany (739) 510

Intangible Assets 8.892 4.032 8.148 267 (75) 21.264

Property, Plant and Equipment 15.868 670 5.149 3.865 25.552

Non-Current Financial Assets 1.463 257 277 5 (1.295) 707

Investments measured at Equity 6.746 6.746

Investments measured at Cost 6.143 (6.113) 31

Deferred Tax Assets 4.332 4.094 1.495 508 10.429


Current Assets 92.330 41.763 62.598 30.134 (25.070) 201.755


Current Financial Assets 1.497 256 1.008 (2.504) 257

Tax Receivables 133 457 155 177 923

Inventories 36.537 22.056 21.362 13.393 (1.312) 92.035

Trade and Other Receivables 34.367 12.018 37.877 13.059 (21.253) 76.067

Cash and Cash Equivalents 19.795 7.232 2.948 2.498 32.473


TOTAL ASSETS 129.029 50.815 77.668 34.287 (25.299) 266.502


Non-Current Liabilities 28.663 2.683 1.872 (1.603) 31.617

of which Intercompany (1.170) (433)

Non-Current Financial Liabilities 21.323 32 507 (1.728) 20.134

Employee Benefits 3.640 556 729 4.925

Provisions for Risks and Charges 646 85 731

Deferred Tax Liabilities 3.054 2.011 636 125 5.825

Other Payables

Current Liabilities 60.238 23.918 37.821 24.263 (23.324) 122.917


Current Financial Liabilities 24.378 18.061 22.819 7.850 (2.071) 71.036


Current Tax Payables 1.008 1.528 2.536

Trade and Other Payables 34.689 5.758 13.475 16.413 (21.253) 49.083

Liabilities rel. to Non-Cur. & Current Assets Held-for-Sale

TOTAL LIABILITIES 88.901 26.601 39.694 24.263 (24.927) 154.533




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



192


America

Central & S.

America

Rest of the

WorldConsolidation

F.I.L.A.

Group

December 2013

BALANCE SHEET

NON-CURRENT ASSETS 33,432 8,012 16,200 2,626 (2,623) 57,647

of which Intercompany 2,290 333

Intangible Assets 7,493 3,753 11,082 168 (2,717) 19,778

Property, Plant and Equipment 14,953 603 4,524 2,458 22,539

Non-Current Financial Assets 468 237 42 (400) 347

Investments measured at Equity 6,130 6,130

Investments measured at Cost 6,115 (6,113) 2

Deferred Tax Assets 4,400 3,420 551 478 8,849


Current Assets 82,831 30,651 58,167 19,275 (12,509) 178,415


Current Financial Assets 1,096 118 722 (1,818) 118

Tax Receivables 433 39 285 12 770

Inventories 29,773 15,578 19,394 10,907 (1,442) 74,210

Trade and Other Receivables 28,988 12,238 33,274 2,270 (9,249) 67,520

Cash and Cash Equivalents 22,542 2,796 5,096 5,363 35,797

Non-Current and Current Assets Held-for-Sale 572 89 661

of which Intercompany (89)

TOTAL ASSETS 116,263 38,663 74,367 22,472 (15,043) 236,723


Non-Current Liabilities 34,391 2,346 2,251 (275) 38,713

of which Intercompany 195 80

Non-Current Financial Liabilities 28,030 10 657 (400) 28,297

Employee Benefits 2,731 479 637 3,847


Deferred Tax Liabilities 3,166 1,755 957 125 6,004

Current Liabilities 49,180 20,562 34,317 12,497 (10,895) 105,662

of which Intercompany 4,426 804 3,761 1,904

Current Financial Liabilities 25,786 16,280 23,510 5,504 (1,736) 69,343

Provisions for Risks and Sharges 419 50 1,913 2,382

Current income tax payables 393 429 347 193 1,362

Trade and Other Payables 22,582 3,803 10,461 4,887 (9,159) 32,575

Liabilities rel. to Non-Cur. & Current Assets Held-for-Sale 0

TOTAL LIABILITIES 83,571 22,908 36,569 12,497 (11,170) 144,375

of which Intercompany 4,621 804 3,841 1,904



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



193

F.I.L.A. Group “Assets” at December 31, 2014 totalled Euro 266,502 thousand (Euro

236,723 thousand at December 31, 2013), broken down between “Non-Current” for

Euro 64,731 thousand (Euro 57,647 thousand at December 31, 2013), “Current” for

Euro 201,755 thousand (Euro 178,415 thousand at December 31, 2013) and “Non-

Current and Current Assets held-for-sale” for Euro 16 thousand (Euro 661 thousand at

December 31, 2013).

“Assets” at December 31, 2014 increased Euro 29,778 thousand on December 31, 2013.

The percentages of the various asset categories did not change significantly in 2014,

with the exception of “Inventories” which accounted for 4% more of “Total Assets”.

“Non-Current Assets” principally comprise “Property, Plant and Equipment” for Euro

25,552 thousand (Euro 22,539 thousand at December 31, 2013) and “Intangible Assets”

for Euro 21,264 thousand (Euro 19,778 thousand at December 31, 2013).

“Intangible Assets” in “Central-South America” and “Europe” comprise a significant

portion of the Group value and “North America” contributes significantly. The

category trademarks, patents and licences of F.I.L.A. S.p.A., of Lyra KG (Germany),

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

Industria Maimeri S.p.A. (Italy) and Licyn Mercantil Industrial Ltda (Brazil) are the

principal items comprising “Intangible Assets”.

“Property, Plant and Equipment” in “Europe” and in “Central - South America”

comprise a significant share of the Group value. Specifically, the “core” production

facilities are located in Italy, France, Germany and Mexico.

“Non-Current Assets” increased Euro 7,085 thousand.



194

“Current Assets” principally comprise “Inventories” for Euro 92,035 thousand (Euro

74,210 thousand in December 31, 2013) and “Trade and Other Receivables” for Euro

76,067 thousand (Euro 67,520 thousand in December 31, 2013).

“Inventories” in “Europe” comprise the most significant share of the Group value.

“Trade and Other Receivables” in “Central - South America” total Euro 37,877

thousand (Euro 33,274 thousand in December 31, 2013) and in “Europe” amount to

Euro 34,368 thousand (Euro 28,988 thousand in 2013), comprising a significant share

of the total F.I.L.A. Group value.

“Current Assets” increased Euro 23,340 thousand.

“Non-Current and Current Assets held-for-sale” decreased Euro 645 thousand and

exclusively concern Lyra Asia PTE Ltd. (Singapore) and Maimeri U.S.A. (U.S.A.),

following the liquidation in progress.

The “Liabilities” of the F.I.L.A. Group at December 31, 2014 amounted to Euro

154,534 thousand (Euro 144,375 thousand at December 31, 2013), broken down

between “Non-Current” for Euro 31,615 thousand (Euro 38,713 thousand at December

31, 2013) and “Current” for Euro 122,919 thousand (Euro 105,662 thousand at

December 31, 2013).

“Liabilities” at December 31, 2014 increased Euro 10,158 thousand on December 31,

2013.

The respective proportions at December 31, 2014 by asset category did not change

significantly in the year, with the exception of “Financial Liabilities (Non-Current and

Current)”, which accounted for 6% less of “Total Liabilities” and the “Trade and Other

Payables Category”, which represents 4% more of “Total Liabilities”.

“Non-Current Liabilities” principally include “Non-Current Financial Liabilities” for

Euro 20,134 thousand (Euro 28,297 thousand at December 31, 2013) and concerning



195

“Europe”. Specifically, bank loans undertaken by F.I.L.A. S.p.A. represent the majority

of this account.

“Non-Current Liabilities” decreased Euro 7,099 thousand.

“Current Liabilities” essentially concern “Current Financial Liabilities” for Euro 71,037

thousand (Euro 69,343 thousand at December 31, 2013) and “Trade and Other

Payables” for Euro 49,084 thousand (Euro 32,575 thousand at December 31, 2013).

“Current Financial Liabilities” in “Europe” and “Central - South America” comprise the

majority of the Group total.

“Trade and Other Payables” in “Europe” comprise the majority of the group total.

“Current Liabilities” increased Euro 17,257 thousand.

Reference should be made to the “Directors’ Report” for complete analysis and to

“Note 13 – Financial Liabilities”.



196

Business Segments – Income Statement

The “income statement” for the F.I.L.A. Group by region for 2014 and 2013 is reported

below:


America

Central & S.

America

Rest of the

WorldConsolidation

F.I.L.A.

Group

FY 2014

INCOME STATEMENT


Other revenue and income 3.879 2.262 1.678 355 (4.356) 3.817

TOTAL REVENUE 144.082 65.726 70.520 31.605 (74.530) 237.402




Other Operating Costs (1.034) (948) (1.549) (736) (680) (4.947)

Change in Inventory 3.199 4.106 1.934 1.240 285 10.764

Labour Costs (26.343) (4.754) (10.615) (7.118) (48.829)


of which Intercompany 31.647 26.340 8.768 7.939

EBITDA 16.772 10.390 7.516 176 165 35.019

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (3.401) (270) (1.603) (768) (6.042)

EBIT 13.371 10.120 5.913 (592) 165 28.977

Interest and Income from Group Companies 58 (59) ()

Interest on Bank Deposits 30 7 8 8 53

Interest Charges 88 7 8 8 (59) 53

Dividends 2.646 1.565 (4.211)

Other Financial Income 33 18 60 () 110

Unrealised Exchange Gains on Financial Transactions 220 6 226

Realised Exchange Gains on Financial Transactions 191 9 200

Rivalutazioni di Partecipazioni al Costo 33 (33)

Other Financial Income 3.122 1.592 60 6 (4.244) 536

Interest and charges from Group Companies (51) (5) (4) 60

Interest on Bank Overdrafts (260) (18) (278)

Interest on Bank Loans (1.126) (426) (1.725) (227) (3.504)

Interest to Other Lenders (5) (2) (7)

Interest Expense (1.441) (429) (1.730) (249) 60 (3.789)

Oneri da Partecipazioni valutate al costo

Other Financial Charges (450) (74) (203) (3) (729)

Unrealised Exchange Losses on Financial Transactions (438) (64) (12) (2) (516)

Realised Exchange Losses on Financial Transactions (24) (26) (50)

Other Financial Charges (912) (99) (267) (15) (2) (1.295)

Revaluations of Investments at Equity 443 443

Income/Charges from Investments at Equity 443 443

NET FINANCIAL INCOME/(CHARGES) 857 1.071 (1.929) (250) (3.802) (4.052)

of which Intercompany (2.246) (1.565) 5 4

PRR-TAX PROFIT/(LOSS) 14.228 11.191 3.985 (842) (3.637) 24.925

TOTAL INCOME TAXES (4.114) (3.185) (908) (9) (27) (8.244)


NET PROFIT/(LOSS) - CONTINUING OPERATIONS 10.114 8.006 3.077 (851) (3.663) 16.681

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS (150) (91) 165 (76)

NET PROFIT/(LOSS) FOR THE YEAR 10.114 7.856 3.077 (943) (3.498) 16.606

Minority interest profit/loss 159 (74) (55) 30

F.I.L.A. GROUP NET PROFIT/(LOSS) 9.955 7.856 3.077 (943) (3.529) 16.575






197


America

Central and

South

Rest of the

WorldConsolidation

F.I.L.A.

Group

FY 2013

INCOME STATEMENT


Other Revenue and Income 3.635 2.374 1.141 471 (4.329) 3.291

TOTAL REVENUE 129.817 65.258 64.704 27.771 (65.395) 222.155




Other Operating Costs (1.132) (879) (1.184) (2.296) (150) (5.641)

Change in Inventory (6.660) (326) 1.443 1.036 143 (4.365)

Labour Costs (21.427) (4.715) (10.134) (5.929) (42.205)


of which Intercompany (27.953) (25.501) (11.520) (560)

EBITDA 15.606 9.485 7.235 721 139 33.186

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (3.987) (526) (1.906) (652) (1) (7.072)


EBIT 11.619 8.958 5.329 67 138 26.114

Interest and Income from Group Companies 43 (44) 0

Interest on Bank Deposits 37 7 5 8 56

Interest Income 80 7 5 8 (43) 56

Dividends 3.702 1.571 (5.272) 0

Other Financial Income 62 45 108

Unrealised Exchange Gains on Financial Transactions 44 62 106


Other Financial Income 4.177 1.573 45 (5.211) 585

Interest and charges from Group Companies (36) (3) 39 0

Interest on Bank Overdrafts (255) (17) (272)

Interest on Bank Loans (1.193) (592) (2.106) (196) (4.088)

Interest to Other Lenders (4) () (4)

Interest Charges (1.489) (593) (2.109) (213) 39 (4.364)

Other Financial Charges (458) (54) (133) (644)

Unrealised Exchange Losses on Financial Transactions (616) (2) (63) (681)

Realised Exchange Losses on Financial Transactions (389) (30) (420)

Other Financial Charges (1.464) (84) (134) (63) (1.745)

Revaluations of Investments at Equity 337 337

Income/Charges from Investments at Equity 337 337

NET FINANCIAL INCOME/(CHARGES) 1.304 903 (2.193) (205) (4.941) (5.131)

of which Intercompany 3.373 1.571 (3)

PRR-TAX PROFIT/(LOSS) 12.924 9.861 3.137 (137) (4.803) 20.983

TOTAL INCOME TAXES (3.648) (2.668) (212) (907) 2 (7.432)


NET PROFIT/(LOSS) - CONTINUING OPERATIONS 9.276 7.194 2.925 (1.044) (4.800) 13.550

NET PROFIT/(LOSS) DISCONTINUED OPERATIONS 196 (4) 192


NET PROFIT/(LOSS) FOR THE YEAR 9.276 7.194 2.925 (1.240) (4.796) 13.358

Minority interest profit/loss 18 (31) (13)

F.I.L.A. GROUP NET PROFIT/(LOSS) 9.258 7.194 2.925 (1.209) (4.796) 13.371






198

In 2014, the F.I.L.A. Group “EBITDA” totalled Euro 35,019 thousand (Euro 33,186

thousand in 2013).

“Europe” represents the core of the Group “EBITDA”, followed by “North America”

and “Central - South America”.

For the “EBIT” which in 2014 totalled Euro 28,977 thousand (Euro 24,114 thousand in

2013), “Europe”, “Central - South America” and “North America” contributed to the

same degree as the previous year.

“Net Financial Charges“ of the F.I.L.A. Group in 2014 totalled Euro 4,052 thousand

(Euro 5,131 thousand in 2013). The principal consolidation adjustments concerning

“Net Financial Charges” relate to the dividends received from F.I.L.A. Group parent

companies; specifically F.I.L.A. S.p.A. received Euro 2,599 thousand, Dixon

Ticonderoga Company (U.S.A.) received Euro 1,153 thousand, Dixon Ticonderoga Inc.

(Canada) received Euro 413 thousand, Johann Froescheis Lyra Bleistift-Fabrik GmbH

& Co. KG (Germany) received Euro 46 thousand and Lyra Verwaltungs GmbH

(Germany) received Euro 1 thousand.

The F.I.L.A. Group in 2014 reported a “Net Profit” of Euro 16,575 thousand (Euro

13,371 thousand in 2013).

“Europe” and “North America” were the principal contributors to the overall F.I.L.A.

Group “Net Profit”, respectively contributing Euro 9,955 thousand (Euro 9,258

thousand in 2013) and Euro 7,930 thousand (Euro (7,194 thousand in 2013).

For further analysis, reference should be made to the relevant section of the “Directors’

Report”.



199

Business Segments – Other Complementary Information

The “other complementary information” for the F.I.L.A. Group by region for 2014 and

2013 is reported below:

Euro thousands Europe North AmericaCentral and

South America

Rest of the

World

F.I.L.A.

Group

December 2014

OTHER INFORMATION

Investments

Intangible assets 232 () 12 244

Property, Plant and Equipment 3,284 109 1,469 3,207 8,068

TOTAL INVESTMENTS 3,516 109 1,468 3,219 8,312






200

Euro thousands Europe North AmericaCentral and

South America

Rest of the

World F.I.L.A. Group

December 2013

OTHER INFORMATION

Investments

Intangible assets 119 120

Property, Plant and Equipment 2,268 192 658 600 3,717

TOTAL INVESTMENTS 2,387 192 658 600 3,837






201

Transactions relating to atypical or unusual operations

In accordance with Consob Communication of July 28, 2006, during 2014 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 year-end) may give rise to

doubts in relation to: the correctness/completeness of the information on the financial

statements, conflicts of interest, the safeguarding of the company’s assets and the

protection of minority shareholders.



202

Final Considerations

The present explanatory notes, as is the case for the entire financial statements of which

they are an integral part, provide a true and correct representation of the balance sheet

and financial position of the F.I.L.A. Group and the result for the year.

The present consolidated financial statement comprise the Consolidated Balance Sheet,

the Consolidated Statement of Comprehensive Income, the Consolidated Cash Flow

Statement, the Consolidated Statement of Changes in Shareholders’ Equity and the

Explanatory Notes and reflect the underlying accounting records.



203

F.I.L.A – Fabbrica Italiana Lapis ed Affini – S.p.A.

Registered Office in Milano, Via Pozzone 5

Share Capital: Euro 3,039,654.60 fully paid in

Tax, VAT and Milan Company’s Office Registration No: 00843550153

Milan REA No.: 396855

*************

Board of Statutory Auditors’ Report

on the Consolidated Financial Statements at December 31, 2014

*************

Dear Shareholders,

The consolidated financial statements at December 31, 2014,

accompanied by the Directors’ Report and Explanatory Notes, were

prepared in accordance with International Financial Reporting

Standards (I.F.R.S.), the relative interpretations of the International

Financial Reporting Interpretations Committee (I.F.R.I.C.) and the

Standing Interpretations Committee (S.I.C.) and approved by the

European Commission (hereafter also I.F.R.S.).

In the Explanatory Notes and the Directors’ Report, the Board of

Directors provided adequate disclosure on the performance of the

companies included in the consolidation and on operations, illustrated

in the individual accounts.

The present Report therefore refers to this documentation, also in

relation to the accounting policies adopted.

In accordance with Article 13 of Legislative Decree 39/2010, the audit

of FILA S.p.A. was assigned to the audit firm KPMG S.p.A. which, in

accordance with the Civil Code, verified the correct maintenance of

the underlying accounting records.

The Board of Statutory Auditors notes the absence of critical

assessments by the firm appointed to audit the financial statements at

December 31, 2014: KPMG S.p.A.’s audit opinion was issued on

March 27, 2015 and did not raise any issues.

The activities carried out by the Board of Statutory Auditors during

the year ended December 31, 2014 are illustrated in its Report on the

separate financial statements of the company, to which reference

should be made.



204

The Board of Statutory Auditors did not note any administrative

irregularities, any potentially damaging operations, complaints or the

raising of issues by shareholders or third parties.

The Board of Directors in its Directors’ Report outlined the situation

of the Companies included in the consolidation, their operating

performances, the subsequent events, the outlook, in addition to the

description of the principal risk and uncertainties.

The financial statements of the companies included in the

consolidation scope were prepared in accordance with the methods

indicated in the “Consolidation principles” paragraph of the Directors’

Report.

In relation to the activities carried out specifically on the consolidated

financial statements, the Board of Statutory Auditors highlights in

particular:

• The adequacy of the organisational structure of the Parent

Company for the acquisition and exchange of information with the

consolidated companies;

• The obtaining from the Board of Directors of adequate information

on the major economic, financial and equity operations undertaken

by the Group;

• The compliance of the general drafting, formation and structure of

the consolidated financial statements with applicable regulations;

• The adequacy of the Directors’ Report to illustrate the performance

of the Group in 2014 and its compliance with the consolidated

financial statements.

In consideration of that outlined above, the Board of Statutory

Auditors invites the Shareholders’ Meeting to consider the resolutions

concerning the result.

Milan, March 30, 2015

THE BOARD OF STATUTORY AUDITORS

Mr. Stefano Amoroso

Ms. Nicola Bruni



205

KPMG S.p.A. Telefono +39 02 6763 1

Revisione e organizzazione contabile Telefax +39 01 67632445

Via Vittor Pisani, 25 e-mail [email protected]

20124 MILANO MI PEC [email protected]

Auditors’ Report

To the Shareholders of

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

1 The present consolidated financial statements consist of the Balance Sheet, Statement

of Comprehensive Income, Statement of changes in Shareholders’ Equity, Cash Flow

Statement and the Explanatory Notes to the financial statements, of the F.I.L.A.

Group for the year ended December 31, 2014. The responsibility to prepare the

financial statements in accordance with International Financial Reporting Standards

adopted by the European Union is that of the directors of F.I.L.A S.p.A.. Our

responsibility is to express an opinion on these financial statements based on our

audit.

2 Our work was conducted in accordance with the Auditing Standards issued by the

Italian Accounting Profession (Consigli Nazionali dei Dottori Commercialisti degli

Esperti Contabili) and recommended by Consob. They require that we plan and

perform the audit to obtain the necessary assurance about whether the consolidated

financial statements are free of material misstatement and, taken as a whole, are

presented fairly. An audit includes examining, on a test basis, evidence supporting the

amounts and disclosures in the financial statements. An audit also includes assessing

the accounting principles used and the significant estimates made by the directors. We

believe that our audit provides a reasonable basis for our opinion.

For the opinion on the consolidated financial statements of the prior year, presented

for comparative purposes, reference should be made to our report issued on April 7,

2014.

3 In our opinion, the consolidated financial statements of the F.I.L.A. Group as of

December 31, 2014 are in accordance with International Financial Reporting

Standards adopted by the European Union and give a true and fair view of the balance

sheet, financial position and of the results of the F.I.L.A. Group as at that date.



206

F.I.L.A. GroupAuditors’ Report

December 31, 2014

4 The responsibility for the preparation of the Directors’ Report in compliance with

applicable legislation is that of the Directors of F.I.L.A. S.p.A.. Our responsibility is

to provide an opinion on the consistency of the Directors’ Report with the financial

statements, as legally required. Therefore, we have carried out the procedures

indicated in auditing principle No. 001 issued by the Italian accounting profession and

recommended by Consob. It is our opinion that the Directors' Report is consistent

with the 2014 consolidated financial statements of the F.I.L.A. Group.


KPMG S.p.A.

Domenico Bellini

Partner



207

III. Basis Of Preparation of the Explanatory Notes to the Separate


Accounting principles and policies

The financial statements of the Parent Company F.I.L.A. S.p.A. (hereafter also “Parent

Company”, “Company”) at December 31, 2014, prepared by the Board of Directors of

F.I.L.A. S.p.A., were drawn up in accordance with International Financial Reporting

Standards (I.F.R.S.), the relative interpretations of the International Financial Reporting

Interpretations Committee (I.F.R.I.C.) and the Standing Interpretations Committee

(S.I.C.), approved by the European Commission (hereafter I.F.R.S.) at December 31,

2014.

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

document.

IFRS were recently introduced in Italy and in other countries and numerous new

standards have been published or revised and, therefore, a consolidated practice does

not exist for their interpretation and application. Consequently, the separate financial

statements at December 31, 2014, although prepared on the basis of the best knowledge

of the Directors of the IFRS and the relative interpretations, also in consideration of

regularly updated accounting practices, in the coming years may be subject to

amendments to take into account different interpretations to those adopted in their

preparation.

For the separate financial statements of F.I.L.A. S.p.A. the first year of application of

IFRS was 2007.

The IAS/IFRS standards and relative S.I.C./I.F.R.I.C. interpretations applicable to the

financial statements for the current year are illustrated below:



208

Basis of presentation

The separate financial statements of F.I.L.A. S.p.A. are comprised of the balance sheet,

statement of comprehensive income, cash flow statements, statement of changes in

equity and the explanatory notes.

In relation to the presentation of the balance sheet at December 31, 2014 F.I.L.A.

S.p.A., consistent with the presentation in the consolidated financial statements, made

the following choices:

• balance sheet: in accordance with IAS 1, the assets and liabilities must be

classified between current and non-current or, alternatively, according to the

liquidity order. The Company chose the classification between current and non-

current;

• statement of comprehensive income: IAS requires alternatively classification

based on the nature or allocation of the items. The Company chose the

classification by nature of income and expenses;

• statement of changes in equity: IAS 1 requires that this statement illustrates the

changes in the year of each individual equity account or which illustrates the

nature of income and charges recorded in the financial statements. The

Company chose to utilise this latter in the statement, providing the reconciliation

statement of the opening and closing amounts of each item within the

explanatory notes;

• cash flow statement: IAS 7 requires that the cash flow statement includes the

cash flows for the period between operating, investing and financing operations.

The cash flows deriving from operating activities may be represented by the

direct method or utilising the indirect method. The Company decided to utilise

the indirect method.

The financial statements of F.I.L.A. S.p.A. are presented together with the Directors’

Report, to which reference should be made in relation to the business activities,

subsequent events to year-end and transactions with related parties, the cash flow



209

statement, the reclassified income statement and balance sheet and the outlook.

The financial statements of F.I.L.A. S.p.A. were prepared in accordance with the

general historical cost criterion.

During the year, no special circumstances arose requiring recourse to the exceptions

allowed under IAS 1.

The preparation of the financial statements and the relative notes in application of IFRS

require that management make estimates and assumptions. These estimates and relative

assumptions are based on historical experience and other factors considered reasonable

and were adopted to determine the carrying amount of the assets and liabilities which

are not easily obtained from other sources, are reviewed periodically and the effects of

each change are immediately reflected in the income statement. However as they

concern estimates, it should be noted that the actual results may differ from such

estimates reflected in the financial statements.

The estimates are used to value the provisions for risk on receivables, depreciation and

amortisation, write-down of assets, employee benefits, income taxes and other

provisions.

The accounting policies utilised in the preparation of the financial statements and the

composition and changes of the individual accounts are illustrated below.

For a better comparison of the data, the figures for the prior year were adjusted where

necessary.

All values are expressed in thousands of Euro, unless otherwise stated.



210

Accounting Policies of the Separate Financial Statements

Introduction

The accounting policies described below, adopted for the preparation of the separate

consolidated financial statements, were applied consistently for all periods considered

in the present document.

The main accounting policies are described below.

Intangible assets

An intangible asset is a clearly identifiable non-monetary asset without physical

substance, subject to control and capable of generating future economic benefits. These

assets are recorded at purchase and/or production cost, including the directly

attributable costs, net of accumulated amortization and any loss in value.

The interest charge on loans for the purchase and the construction of intangible assets,

which would not have been incurred if the investment was not made, are not capitalised.

• Intangible assets with indefinite useful lives

Intangible assets with indefinite useful lives mainly consist of assets which do not have

limitations in terms of useful life as per contractual, legal, economic and competitive

conditions. This category includes only the “goodwill” account. Goodwill is

represented by the excess of the purchase cost incurred compared to the net fair value at

the acquisition date of assets and liabilities or of business units. The goodwill relating to

investments measured at equity is included in the value of the investments.

This is not subject to systematic amortisation but an impairment test is made annually

on the carrying amount in the accounts. This test is made with reference to the “cash

generating unit” to which the goodwill is attributed. Any reduction in value of the

goodwill is recorded where the recoverable value of the goodwill is lower than the

carrying amount; the carrying amount is the higher between the fair value of a cash



211

generating unit, less selling costs, and the value in use, represented by the present value

of the estimated revenue streams for the years of operation of the cash generating units

and deriving from its disposal at the end of the useful life.

The principal assumptions adopted in the determination of the value in use of the “cash

generating units”, or rather the present value of the estimated future cash flows which is

expected to derive from the continuing use of the activities, relates to the discount rate

and the growth rate.

In particular, F.I.L.A. S.p.A. utilised the discount rate which it considers correctly

expresses the market valuations, at the date of the estimate, of the present value of

money and the specific risks related to the individual cash generating units.

The operating cash flow forecasts derive from the most recent budgets and plans

prepared by F.I.L.A. S.p.A. for the next three years.

The cash flow forecasts refer to current business conditions, therefore they do not

include cash flows related to events of an extraordinary nature.

The forecasts are based on reasonableness and consistency relating to future general

expenses, expected capital investments, financial conditions, as well as macro-

economic assumptions, with particular reference to increases in product prices, which

take into account expected inflation rates. The results of the “impairment tests” did not

generate, in the current or previous year, permanent losses in value.

In the event of a write-down for impairment, the value of goodwill may not be restated.

Reference should be made to Note 1 of the consolidated financial statements of the

Group for further information on the indicators utilised for the impairment analysis.

• Intangible assets with finite useful lives

Intangible assets with finite useful lives are amortised systematically on a monthly basis

over the useful life of the asset, which is an estimate of the period in which the assets



212

will be utilised by the enterprise. Amortisation commences when the asset is available

for use.

The amortisation policies adopted by the Company provide for the following useful

lives:

o Trademarks: based on the useful life

o Concessions, Licences and Patents: based on the duration relating to the right

under concession or license and based on the duration of the patent

o Other intangible assets: 3 years

Research and development costs

Research and development costs are recorded in the income statement in the year

incurred, with the exception of development costs recorded under intangible assets,

when they satisfy the following conditions:

o the project is clearly identified and the related costs are reliably identifiable and

measurable;

o the technical feasibility of the project is demonstrated;

o the intention to complete the project and sell the assets generated from the

project are demonstrated;

o a potential market exists or, in the case of internal use, the use

of the intangible asset is demonstrated for the production of the intangible assets

generated by the project;

o the technical and financial resources necessary for the completion of the project

are available;

o the intangible asset will generate probable future economic benefits.

Amortisation of development costs recorded under intangible assets begins from the

date in which the result generated from the project is commercialised. Amortisation is

calculated, on a straight-line basis, over the useful life of the project.



213

Property, plant and equipment

Property, plant and equipment are measured at purchase cost, net of accumulated

depreciation and any loss in value. The cost includes all charges directly incurred for

the purchase and/or production. The interest charge on loans for the purchase and the

construction of tangible fixed assets, which would not have been incurred if the

investment was not made, are not capitalised but expensed to the income statement

based on the accruals of the costs. Where an asset relating to property, plant and

equipment is composed of various components with differing useful lives, these

components are recorded separately (significant components) and depreciated

separately.

The expense incurred for maintenance and repairs are directly charged to the income

statement in the year in which they are incurred. The costs for improvements,

modernisation and transformation of an incremental nature of tangible fixed assets are

allocated as an asset.

The purchase price or construction cost is net of public grants which are recognised

when the conditions for their concession are confirmed. At the date of the present

financial statements there are no public grants recorded as a reduction within “Property,

Plant and Equipment”.

The initial value of property, plant and equipment is adjusted for depreciation on a

systematic basis, calculated on a straight-line basis monthly, when the asset is available

and ready for use, based on the estimated useful life.

The estimated useful lives for the current and previous years are as follows:

o Buildings 25 years

o Plant and machinery 8.7 years

o Equipment 2.5 years

o Other intangible assets:

o Office equipment: 8.3 years



214

o Furniture and EDP: 5 years

o Transport vehicles: 5years

o Motor vehicles: 4 years

o Other: 4 years

• Finance leases

� The assets held through finance lease contracts, where the majority of the risks and

rewards related to the ownership of an asset have been transferred to F.I.L.A. S.p.A.,

are recognised as assets at their fair value or, if lower, at the present value of the

minimum lease payments, including any redemption amounts to be paid. The

corresponding liability due to the lessor is recorded under “Financial Liabilities”. The

assets are depreciated applying the criteria and rates previously indicated for the

account “Property, Plant and Equipment”, except where the duration of the lease

contract is lower than the useful life and there is not a reasonable certainty of the

transfer of ownership of the asset at the normal expiry date of the contract; in this case,

depreciation is over the duration of the lease contract.

� The leased assets where the lessor bears the majority of the risks and rewards related

to an asset are recorded as operating leases. Costs related to operating leases are

recognised on a straight-line basis over the duration of the lease.

• Impairment of non-financial assets

At each reporting date, the tangible and intangible fixed assets are analysed to identify

the existence of any indicators, either internally or externally to the Company, of

impairment. Where these indications exist, an estimate of the recoverable value of the

above-mentioned assets is made, recording any write-down in the income statement. In

the case of goodwill and other indefinite intangible assets, this estimate is made

annually independently of the existence of such indicators. The recoverable value of an

asset is the higher between the fair value less costs to sell and its value in use. The fair

value is estimated on the basis of the values in an active market, from recent



215

transactions or on the basis of the best information available to reflect the amount which

the entity could obtain from the sale of the asset. The value in use is the present value of

the expected future cash flows to be derived from an asset. In defining the value in use,

the expected future cash flows are discounted utilising a pre-tax discount rate that

reflects the current market assessment of the time value of money, and the specific risks

of the asset.

For an asset that does not generate sufficient independent cash flows, the realisable

value is determined in relation to the cash-generating unit to which the asset belongs. A

reduction in value is recognised in the income statement when the carrying amount of

the asset, or of the cash-generating unit to which it is allocated, is higher than the

recoverable amount.

The losses in value of cash-generating units are firstly attributed to the reduction in the

carrying amount of any goodwill allocated to the cash-generating unit and, thereafter, to

a reduction of other assets, in proportion to their carrying amount. The losses relating to

goodwill may not be restated. In relation to assets other than goodwill, where the

reasons for the write-down no longer exist, the book value of the asset is restated

through the income statement, up to the value at which the asset would be recorded if

no write-down had taken place and amortisation had been recorded.

Investments

Investments in companies represent investments in the share capital of enterprises.

They are carried at acquisition or subscription cost, adjusted for any impairment, and

measured under the cost method. Where the reasons for a write-down no longer exist,

the original value is restated.

Current and non-current financial assets

Financial assets are initially recognised at fair value.



216

After initial recognition, financial assets are measured at fair value, without any

deduction for transaction costs which may be incurred in the sale or other disposal, with

the exception for the following “Financial Assets”:

� “Loans and Receivables”, as defined in paragraph 9 of IAS 39, which must

be measured at amortised cost utilising the effective interest criterion;

� investments held-to-maturity, as defined in paragraph 9 of IAS 39, which

must be measured at amortised cost utilising the effective interest criterion;

� investments in equity instruments which do not have a listed market price on

an active market and whose fair value may not be reliably measured and

related derivatives and which must be settled with the delivery of these non-

listed equity instruments, which must be measured at cost.

• Impairment of financial assets

Financial assets are measured at each reporting date to determine whether there is any

indication that an asset may have incurred a loss in value. A financial asset has

incurred a loss in value if there is an objective indication that one or more events had a

negative impact on the estimated future cash flows of the asset. A loss in value of a

financial asset measured at amortised cost corresponds to the difference between the

book value and the present value of the estimated cash flows discounted at the original

effective interest rate. The loss in value of financial asset available-for-sale is

calculated based on the fair value of the asset.

Financial assets individually recorded are measured separately to determine if they have

incurred a loss in value. The other financial assets are cumulatively measured, for

groups with similar credit risk characteristics. All the losses are recognised in the

income statement. Any accumulated loss of a financial asset available-for-sale

previously recognised in equity is transferred to the income statement.

Losses in value are restated if subsequently the increase in value can be objectively

associated to an event which occurred after the reduction in value. For financial assets



217

measured at amortised cost and financial assets available-for-sale corresponding to debt

securities, the restated amount is recognised in the income statement. For financial

assets available-for-sale corresponding to equity securities, the restated amount is


Cash and cash equivalents

Cash and cash equivalents principally include cash, bank deposits on demand and other

highly liquid short-term investments (converted into liquidity within ninety days). They

are measured at fair value and the relative changes are recorded in the income

statement. Bank overdrafts are classified under “Current Financial Liabilities”.

Trade and other receivables

Trade and other receivables are measured, on initial recognition, at fair value. Initial

book value is subsequently recorded at amortised cost adjusted to account for





(amortised cost method). When there is an indication of a reduction in value, the asset is

reduced to the value of the discounted future cash flows obtainable. Impairments are

recognised to the income statement. When, in subsequent periods, the reasons for the

write-down no longer exist, the value of the assets is restated up to the value deriving

from the application of the amortised cost where no write-down had been applied.

The doubtful debt provision is accrued to record receivables at realisable value,

including write-downs for any indicators of a reduction in value of trade receivables.

The write-downs, which are based on the most recent information and on the best

estimates of the Directors, are made so that the assets are reduced to the present value

of the expected future revenue streams.



218

The doubtful debt provision is recorded as a direct reduction.

These provisions are classified in the income statement account “Write-downs”; the

same classification was used for any utilisations.

Inventories

Inventories of raw materials, semi-finished and finished products are measured at the

lower of purchase or production price, including accessory charges, determined in

accordance with the weighted average cost method, and the net realisable value. Net

realisable value is the estimated selling price in the ordinary course of business, less the

estimated costs of completion and the estimated selling costs.

Obsolete and slow-moving inventories are written down in relation to their possible

utilisation or realisable value.

The purchase cost is utilised for direct and indirect materials, purchased and utilised in

the production cycle. The production cost is however used for the finished products or

in work-in-progress.

For the determination of the purchase price, consideration is taken of the actual costs

sustained net of commercial discounts.

Production costs include, in addition to the costs of the materials used, as defined

above, the direct and indirect industrial costs allocated. The indirect costs were

allocated based on the normal production capacity of the plant.

Distribution costs were excluded from purchase cost and production cost.

Provisions for risks and charges (current and non-current)

Provisions are recorded when:

� it is probable the existence of a present obligation, legal or implicit, deriving

from a past event;

� it is probable that compliance with the obligation will result in a charge;

� the amount of the obligation can be estimated reliably.



219

Provisions are recorded at the value representing the best estimate of the amount that

the company would reasonably pay to discharge the obligation or to transfer it to a third

party. When the financial effect of time is significant and the payment dates of the

obligations can be reliably estimated, the provision is discounted. The rate used in the

determination of the present value of the liability reflects the current market values and

includes the further effects relating to the specific risk associated to each liability. The

increase of the provision due to the passage of time is recognised in the income

statement account “Financial income/(charges)”.

The provisions are periodically updated to reflect the changes in the estimate of the

costs, of the time period and of the discount rate; the revision of estimates are recorded

in the same income statement accounts in which the provision was recorded, or when

the liability relates to an asset, against the asset account to which it refers.

The explanatory notes illustrate the potential liabilities represented by: (i) possible

obligations (but not probable) deriving from past events, whose existence will be

confirmed only on the occurrence or otherwise of one or more uncertain future events

not fully under the control of the entity; (ii) current obligations deriving from past

events whose amount cannot be reliably estimated or whose fulfilment will likely not

incur a charge.

• Restructuring provision

The Company records a restructuring provision only in the event there is an implied

restructuring obligation and there exists, at the same time, a detailed formal programme

which has raised a valid expectation in those affected that it will carry out the

restructuring by starting to implement that plan or announcing its main features to those

affected by it.



220

Employee benefits

• Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the entity

pays fixed contributions to a separate entity and will not have a legal or implied

obligation to pay further contributions. The contributions to be paid to defined

contribution plans are recognised as costs in the income statement when incurred.

Contributions paid in advance are recognised under assets up to the advanced payment

which will determine a reduction in future payments or a reimbursement.

• Defined benefit plans

Defined benefit plans are post-employment benefit plans other than defined

contribution plans. The net obligation of the Company deriving from defined benefit

plans is calculated separately for each plan estimating the amount of the future benefit

which the employees matured in exchange for the services provided in the current and

previous years; this benefit is discounted to calculate the present value, while any costs

relating to past services not recorded in the financial statements and the fair value of

any assets to service the plan are deducted from liabilities. The discount rate is the

return, at the reporting date, of the primary obligations whose maturity date

approximates the terms of the obligations of the Company and which are expressed in

the same currency in which it is expected the benefits will be paid. The calculation is

made by an independent actuary utilising the projected credit unit method. Where the

calculation generates a benefit for the Company, the asset recognised is limited to the

total, net of all costs relating to past services not recognised and the present value of all

economic benefits available in the form of refunds from the plan or reductions in future

contributions to the plan. Where improvements are made to the plan benefits, the

portion of increased benefits relating to past services is recognised as an expense on a

straight-line basis over the average period until the benefits become vested. If the



221

benefits mature immediately, the cost is recognised immediately in the income

statement.

F.I.L.A. S.p.A. records all actuarial gains and losses from a defined benefit plan directly

and immediately to equity, as the Company does not apply the corridor method.

In relation to the Post-Employment Benefit Provision, following the amendments to

Law No. 296 of December 27, 2006 and subsequent Decrees and Regulations (“Pension

Reform”) issued in the first months of 2007, the Parent Company F.I.L.A. S.p.A.

adopted the following accounting treatment:

� the Post-Employment Benefit Provision matured at December 31, 2006 is

considered a defined benefit plan as per IAS 19. The benefits guaranteed to

employees, under the form of the Post-Employment Benefit Provision, paid

on the termination of employment, are recognised in the period the right

matures. The relative liability is determined based on actuarial assumptions

and the effective payable matured and not settled at the reporting date,

applying criteria in accordance with current regulations. The discounting

process, based on demographic and financial assumptions, is undertaken

applying the “Projected Unit Credit Method” by professional actuaries.

Under this method the valuation is based on the average present value of the

pension obligations matured based on the employment service up to the time

of the valuation. In consideration of the new provisions introduced by the

reform, the component related to the expected future salary increases was

excluded from the discounting calculation from January 1, 2007;

� the Post-Employment Benefits matured from January 1, 2007 are considered

a defined contribution plan and therefore the contributions matured in the

period were fully recognised as a cost and recorded as a payable in the

account “Post-Employment Benefit Provision”, after deduction of any

contributions already paid.



222

It is also noted that the difference resulting from the re-measurement of the Post-

Employment Benefit Provision matured at December 31, 2006 on the basis of the new

assumptions introduced by the Pension Reform was fully recognised in the income

statement in the account “Labour Costs”.

• Other long-term employee benefits

The net obligation of the Company for long-term employee benefits, other than those

deriving from pension plans, corresponds to the amount of the future benefits which

employees matured for services in current and previous years. This benefit is

discounted, while the fair value of any assets is deducted from the liabilities. The

discount rate is the return, at the reporting date, of the primary obligations whose

maturity date approximates the terms of the obligations of F.I.L.A. S.p.A.. The

obligation is calculated using the projected unit credit method. Any actuarial gains or

losses are recorded in the balance sheet in the year in which they arise.

• Employee termination benefits

Employee termination benefits are recorded as costs when the Company has committed,

in a demonstrable way and without a realistic possibility of withdrawal, to a formal

detailed plan that provides for the termination of employment before the normal

retirement date or following an offer prepared to encourage voluntary redundancy. In

the case of an offer made by the Company to encourage voluntary redundancy, the

measurement of termination benefits shall be based on the number of employees

expected to accept the offer.

• Short-term employee benefits

Short-term employee benefits are recorded as non-discounted expenses when the

services to which they arise are provided.

F.I.L.A. S.p.A. records a liability for the amount that it expects will be paid in the

presence of a present obligation, legal or implicit, as a consequence of past events and

for which the obligation can be reliably estimated.



223

Financial liabilities (current and non-current)


transaction costs. Subsequently these liabilities are measured at amortised cost. In

accordance with this method all the accessory charges relating to the provision of the

loan are recorded as a direct change of the payable, recording any differences between

cost and repayment amount in the income statement over the duration of the loan, in

accordance with the effective interest rate method.

Trade and other payables

Trade and other payables are measured on initial recognition at fair value. Initial book

value is subsequently adjusted to account for redemptions in principal and amortisation

of the difference between the redemption value and initial book value. 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 related to

the liabilities and the initial book value (amortised cost method).

When there is a change in the cash flows and it is possible to estimate them reliably, the

value of the payables are recalculated to reflect this change, based on the new present

value of the cash flows and on the internal yield initially determined.

Current, deferred and other taxes

Income taxes include all the taxes calculated on the assessable income of the Company

applying the tax rates in force at the date of the present report

Income taxes are recorded in the income statement, except those relating to accounts

directly credited or debited to equity, in which case the tax effect is recognised directly

to equity.

Other taxes not related to income, such as taxes on property and share capital, are

included under other operating charges (“Service costs”, “Rent, lease and similar” and

“Other charges”). The liabilities related to indirect taxes are classified under “Other

Payables”.



224

Deferred tax assets and liabilities are determined in accordance with the global

assets/liability method and are calculated on the basis of the temporary differences

arising between the carrying amounts of the assets and liabilities and the corresponding

values recognised for tax purposes, taking into account the tax rate within current fiscal

legislation for the years in which the differences will reverse, with the exception of

goodwill not fiscally deductible and those differences deriving from investments in

subsidiaries for which it is not expected the cancellation in the foreseeable future, and

on the tax losses carried forward.

“Deferred Tax Assets” are classified under non-current assets and are recognised only

when there exists a high probability of future assessable income to recover the asset.

The recovery of the “Deferred Tax Assets” is reviewed at each reporting date and for

the part for which recovery is no longer probable recorded in the income statement.

Revenues and costs

Revenue recognition

The revenues and income are recorded net of returns, discounts, rebates and premiums

as well as direct taxes related to the sale of products and services. In particular, the

revenues for the sale of products are recognised when the risks and rewards of

ownership are transferred to the buyer. This normally occurs on shipping of the goods.

Recognition of costs

Costs are recorded when relating to goods and services acquired or consumed in the

year or when there is no future utility.

The costs directly attributable to share capital operations are recorded as a direct

reduction of equity.

Commercial costs relating to the acquisition of new clients are expensed to the income

statement when incurred.



225

Financial income and charges

Financial income includes interest income on liquidity invested, dividends received and

income from the sale of available-for-sale financial assets. Interest income is recorded

in the income statement on an accruals basis utilising the effective interest method.

Dividend income is recorded when the right of F.I.L.A. S.p.A. to receive the payment is

established which, in the case of listed securities, corresponds to the coupon date.

Financial charges include interest on loans, discounting of provisions, dividends

distributed on preference shares reimbursable, changes in the fair value of financial

assets recorded through P&L and losses on financial assets. Finance costs are recorded

in the income statement utilising the effective interest method. The currency operations

are recorded as the net amount.

Other accounting policies

Translation of accounts in currencies other than the Euro

The financial statements were prepared in Euro, which is the functional currency of the

company. Foreign currency transactions are converted into Euro using the exchange

rate at the transaction date. The foreign exchange gains and losses resulting from the

settlement of transactions and from the conversion at the balance sheet date of monetary

assets and liabilities denominated in foreign currencies are recognised in the income

statement.

Non-monetary assets and liabilities in foreign currencies measured at cost are recorded

at the transaction date exchange rate; where the measurement is at fair value or

recoverable value or realisable value the current exchange rate at the measurement date

is adopted. All amounts in Euro are rounded to the nearest thousand.



226

Dividends

Dividends recognised to shareholders are recorded on the date of the Shareholders’

Meeting resolution.

Treasury shares

Treasury shares are recorded as a reduction of equity. The original cost of the treasury

shares and the revenues deriving from any subsequent sale are recognised as equity

movements.

Earnings per share

The basic earnings per share is calculated by dividing the result of F.I.L.A. S.p.A. by

the weighted average number of ordinary shares outstanding during the year, excluding

any treasury shares in portfolio. The diluted earnings per share coincide with the basic

earnings per share as there are no potential ordinary shares (financial instruments or

other contracts which may entitle its holder to ordinary shares).

Use of estimates

The preparation of the financial statements require the Directors to apply accounting

principles and methods that, in some circumstances, are based on difficulties and

subjective valuations and estimates based on the historical experience and assumptions

which are from time to time considered reasonable and realistic based on the relative

circumstances. The application of these estimates and assumptions impact upon the

amounts reported in the financial statements, such as the balance sheet, the income

statement and the cash flow statement, and on the disclosures in the notes to the

accounts. The final outcome of the accounts in the financial statements, which use the

above-mentioned estimates and assumptions, may differ from those reported in the



227

financial statements due to the uncertainty which characterises the assumptions and

conditions upon which the estimates are based.

The accounting principles which require greater judgement by the Directors in the

preparation of the estimates and for which a change in the underlying conditions or the

assumptions may have a significant impact on the condensed financial statements are

briefly described below.

� Measurement of receivables: trade receivables are adjusted by the doubtful debt

provision, taking into account the effective recoverable value. The calculation of

the write-downs requires the Directors to make valuations based on the

documentation and the information available relating to the solvency of the

clients, and from market and historical experience.

� Measurement of goodwill and indefinite intangible assets: in accordance with

the accounting principles applied by the Company, the goodwill and the

intangible assets are subject to an annual verification (“impairment test”) in

order to verify whether a reduction in value has taken place, which is recorded

as a write-down, when the net book value of the cash-generating unit to which

the asset is allocated is higher than the recoverable value (defined as the higher

value between the value in use and the fair value of the asset). The verification

of the value requires the Directors to make valuations based on the information

available within F.I.L.A. S.p.A. and from the market, as well as historical

experience. In addition, when it is determined that there may be a potential

reduction in value, the Company determines this through using the most

appropriate technical valuation methods available. The same verifications of

value and the same valuation techniques are applied on the intangible and

tangible assets with a finite useful life when there are indications of the

difficulty for the recovery of the relative net book value through its use. The

correct identification of the indicators of the existence of a potential reduction in

value as well as the estimates for their determination depends on factors which

may vary over time impact upon the valuations and estimates made by the

Directors.



228

� Risk provisions: the identification of the existence of a present obligation (legal

or implied) in some circumstances may be difficult to determine. The Directors

evaluate these factors case-by-case, together with the estimate of the amount of

the economic resources required to comply with the obligation. When the

Directors consider that a liability is only possible, the risks are disclosed in the

notes under the section on commitments and risks, without any provision.

� Measurement of inventories: inventories of products which are obsolescence or

slow moving are periodically subject to valuation tests and written down where

the recoverable value is lower than the book value. The write-downs are made

based on assumptions and estimates of management deriving from experience

and historic results.

� Pension plans and other post-employment benefits: the company participates in

pension plans and other post-employment benefit plans. Management utilises

multiple statistical assumptions and valuation techniques with the objective of

anticipating future events for the calculation of the charges, liabilities and assets

relating to these plans. The assumptions relate to the discount rate, the expected

return of the plan assets and the rate of future salary increases. In addition, the

actuarial consultants of the Company utilise subjective factors, for example

mortality and employee turnover rates.



229

IV. Separate Financial Statements of F.I.L.A. S.p.A. at December

31,2014

Balance Sheet


ASSETS 121,121 119,008


Intangible Assets 468 399 Note 1

Property, Plant and Equipment 9,147 8,727 Note 2

Non-Current Financial Assets 1,282 387 Note 3

Investments Measured at Cost 57,498 55,221 Note 4

Deferred Tax Assets 2,117 2,244 Note 5



Current Financial Assets 1,497 1,096 Note 3

Tax Receivables 0 399 Note 6

Inventories 19,354 17,415 Note 7

Trade and Other Receivables 18,537 18,247 Note 8

Cash and Cash Equivalents 11,221 14,873 Note 9

LIABILITIES AND EQUITY 121,121 119,008

Equity 63,822 59,508 Note 11

Share Capital 2,748 2,748

Reserves 13,277 13,450

Retained Earnings 41,778 37,475

Net profit for the year 6,019 5,835

Non-Current Liabilities 23,029 30,722

Non-Current Financial Liabilities 18,890 26,580 Note 12

Post-Employment Benefits 2,068 1,977 Note 13


Deferred Tax Liabilities 1,545 1,701 Note 15

Current Liabilities 34,270 28,778

Current Financial Liabilities 11,017 13,730 Note 12


Current Tax Payables 305 0 Note 16

Trade and Other Payables 22,857 14,952 Note 17



230

Statement of Comprehensive Income


Revenue from Sales and Service 77,232 71,806 Note 18

Other Revenue and Income 1,745 1,351 Note 19

TOTAL REVENUE 78,977 73,157

Raw Materials, Ancillary, Consumables and Goods (37,852) (31,234) Note 20

Services and Rent, Leases and Similar Costs (22,128) (17,792) Note 21

Other Operating Costs (357) (410) Note 22

Change in Raw Materials, Semi-Finished, Work-in-progress and Finished Products 1,939 (4,999) Note 20

Labour Costs (11,676) (9,855) Note 23

Amortisation & Depreciation (1,837) (2,186) Note 24

Write-downs (239) (542)

TOTAL OPERATING COSTS (72,150) (67,018)

EBIT 6,827 6,139

Financial Income 2,741 3,271 Note 25

Financial Charges (1,285) (1,572) Note 26

NET FINANCIAL INCOME/(CHARGES) 1,456 1,699

PRR-TAX PROFIT 8,283 7,838

Income Taxes (2,211) (1,723)

Deferred Tax Income and Charges (53) (280)

TOTAL INCOME TAXES (2,264) (2,003) Note 28

NET PROFIT FOR THE YEAR 6,019 5,835

Other Comprehensive Income Items which may be reclassified subsequently in the P&L account

Actuarial Gains/(Losses) on Employee Benefits (289) (28)

Income Taxes on income and charges recorded directly to Equity 110 9

OTHER COMPREHENSIVE INCOME ITEMS (net of tax effect) (179) (19)

Total Comprehensive Income 5,840 5,816



231

Cash Flow Statement


EBIT 6,827 6,139



Doubtful Debt Provision 239 542

Exch. effect on Assets and Liabilities in Foreign Curr. of Commercial Transactions (202) 130




Unrealised Exchange Differences on Assets and Liabilities in Foreign Currencies 156 (49)

Realised Exchange Differences on Assets and Liabilities in Foreign Currencies 102 (103)

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN

NET WORKING CAPITAL7,419 7,588

Changes in Net Working Capital: 5,373 2,874


Change in Trade and Other Receivables (527) (2,215)

Change in Trade and Other Payables 7,905 (4)

Change in Other Assets/Liabilities (26) (36)

Change in Post-Employment and Employee Benefits 91 (80)

NET CASH FLOW FROM OPERATING ACTIVITIES 12,791 10,462Investments in Intangible Assets (173) (96)



Divestments in Property, Plant and Equipment 39 0


Total Investment/Divestment in Holdings Measured at Cost (1,567) (390)

Investments in Other Financial Assets (2,561) (617)

Divestments in Other Financial Assets 577 352

Total Investment/Divestment in Other Financial Assets (1,984) (265)

Dividends from Group companies 2,599 3,203


CASH FLOW FROM INVESTING ACTIVITY (3,251) 540



Total Change in Equity (1,526) 4,555

Interest Paid (902) (1,164)



Other Non-Cash Items 12 (227)


Cash and Cash Equivalents net of Bank Overdrafts at beginning of the year 14,873 10,458

CASH AND CASH EQUIVALENTS NET OF BANK OVERDRAFTS AT

END OF THE YEAR11,221 14,873

1) Cash and cash equivalents at December 31, 2014 totalled Euro 11,221 thousand; current account


2) Cash and cash equivalents at December 31, 2013 totalled Euro 14,873 thousand; current account




232




Bank Overdrafts 0 (87)



Bank Overdrafts 0 0

Reference should be made to the “Directors’ Report” for comment and analysis.



233

Statement of changes in Shareholders’ Equity

Euro thousands

Share capitalLegal

ReserveIAS 19 Reserve

Other

ReservesRetained Earnings Profit/(Loss) for year Equity

January 1, 2014 2,748 602 (79) 12,927 37,475 5,835 59,508

Changes in the year 0 0 (179) 0 0 0 (179)

Net Profit 0 0 0 0 0 6,019 6,019

Gains/(losses) recorded directly to equity 0 0 (179) 0 0 6,019 5,840

Allocation of the 2013 result 0 6 0 0 5,829 (5,835) 0

Dividend distribution to shareholders 0 0 0 0 (1,526) 0 (1,526)

December 31, 2014 2,748 608 (258) 12,927 41,778 6,019 63,822



234

Notes to the Main Financial Statement Accounts

Introduction

The company F.I.L.A. S.p.A. operates in the creativity tools market, producing writing

and design objects such as crayons, paints, modelling dough and pencils etc..

The company F.I.L.A. S.p.A., Società Italiana Lapis ed Affini (hereafter “the


Pozzone 5.

The information relating to the shareholding structure at December 31, 2014 is shown

below:

Shareholder Number of shares

% of share

capital

% of voting

rights

781,649 ordinary shares 41.658% 31.545% Pencil S.p.A.

390,824 “B” shares 20.829% 47.317%

Intesa Sanpaolo S.p.A. 222,843 ordinary shares 11.877% 8.993%

Venice European Investment

Capital S.p.A. 300,939 ordinary shares 16.039% 12.145%

F.I.L.A. S.p.A. (treasury shares) 180,075 ordinary shares 9.597% 0%

Total 1,876,330 100% 100%

The present financial statements, concerning the year ending December 31, 2014, are

presented in Euro, as the functional currency in which the Company operates and

comprise the Balance Sheet, the Statement of Comprehensive Income, the Cash Flow

Statement, the Statement of Changes in Shareholders’ Equity, the Explanatory Notes

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

Sheet, the Statement of Comprehensive Income, the Cash Flow Statement, the

Statement of Changes in Shareholders’ Equity and in the Explanatory Notes are

expressed in thousands of Euro, except where otherwise stated.



235

� Note 1 - Intangible assets

The intangible assets at December 31, 2014 amount to Euro 468 thousand (Euro 399

thousand at December 31, 2013) and consist only of intangible assets with finite useful

lives.

The table below shows the changes in the year.

Note 1. INTANGIBLE ASSETS WITH FINITE LIFE

Euro thousands


Intellectual Property Rights

Concessions, Licenses,

Trademarks & Similar

Rights

Other Intangible Assets Total Amount


December 31, 2013 158 2,691 2,006 4,855

Increases in the year 17 156 0 173

Increases (Investments) 17 156 0 173

Decreases in the year 0 0 0 0

Decreases (Divestments) 0 0 0 0

December 31, 2014 175 2,847 2,006 5,028


December 31, 2013 (96) (2,360) (2,000) (4,456)

Increases in the year (14) (86) (4) (104)

Amortisation in Year (14) (86) (4) (104)



December 31, 2014 (110) (2,446) (2,004) (4,560)

Net Book Value at December 31, 2013 62 331 6 399

Net Book Value at December 31, 2014 65 401 2 468

Change in year 2014 - 2013 3 70 (4) 69

“Industrial Patents and Intellectual Property Rights” amount to Euro 65 thousand at


The average residual useful life of the “Industrial Patents and Intellectual Property


“Concessions, Licences, Trademarks and Similar Rights” amount to Euro 401 thousand

at December 31, 2014 (Euro 331 thousand at December 31, 2013) and includes the



236

costs incurred for the registration and acquisition of trademarks necessary for the

marketing of the Fila brand products.

The average residual useful life of the “Concessions, Licenses, Trademarks and Similar


“Other Intangible Assets” amount to Euro 2 thousand at December 31, 2014 (Euro 6

thousand at December 31, 2013) and mainly include costs relating to the capitalisation

of software related to the Pro-J software system. The average residual useful life of

“Other Intangible Assets”, recorded in the financial assets at December 31, 2014, is 3

years.

There are no intangible assets subject to restrictions (for further information in relation

to secured guarantees on property, reference should be made to the “Directors’ Report -

Commitments and Guarantees”).

� Note 2 - Property, plant and equipment

At December 31, 2014, “Property, Plant and Equipment” amounted to Euro 9,147

thousand (Euro 8,727 thousand at December 31, 2013). The table below shows the

changes in the year:



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Note 2 - PROPERTY, PLANT AND EQUIPMENT

Euro thousands

Land BuildingsPlant and

Machinery

Industrial and

Commercial

Equipment

Other



December 31, 2013 1,977 9,367 13,186 7,129 928 183 32,770

Increases in the year 0 76 1,144 983 56 (35) 2,223

Increases (Investments) 0 76 843 723 56 521 2,219

Capitalisation from Assets in Progress 0 0 296 260 0 (556) 0

Other Increases 0 0 5 0 0 0 5

Decreases in the year 0 0 (183) 0 (1) (62) (246)

Decreases (Divestments) 0 0 (183) 0 (1) 0 (184)

Other Decreases 0 0 0 0 0 (62) (62)

December 31, 2014 1,977 9,443 14,147 8,112 983 86 34,748

Change in Accumulated Depreciation

December 31, 2013 (5,400) (11,409) (6,515) (718) (24,042)

Increases in the year (363) (638) (660) (77) (1,738)

Depreciation in Year (363) (633) (660) (77) (1,733)

Other Increases 0 (5) 0 0 (5)


Decreases (Divestments) 0 179 0 0 179

December 31, 2014 (5,763) (11,868) (7,175) (795) (25,601)



Change in year 2014 - 2013 0 (286) 502 323 (22) (97) 420

“Land” at December 31, 2014, amounting to Euro 1,977 thousand (Euro 1,977 thousand

at December 31, 2013), is comprised of land adjacent to the building owned by F.I.L.A.

S.p.A. at the production site in Rufina Scopeti (Florence - Italy).

“Buildings” at December 31, 2014 amount to Euro 3,680 thousand (Euro 3,966

thousand at December 31, 2013). The decrease mainly concerns depreciation in the

year (Euro 363 thousand), partially offset by the increase in building improvements

(Euro 76 thousand).

“Plant and Machinery” amounts to Euro 2,279 thousand at December 31, 2014 (Euro

1,777 thousand at December 31, 2013) and includes investments in new machinery for

the production plant at Rufina Scopeti (Florence-Italy). The account also includes



238

disposals of machinery at the Rufina Scopeti plant (Florence-Italy), completely

depreciated (Euro 183 thousand).

Investment in new plant and machinery seeks to drive the efficiency of the current

production capacity through upgrading and expanding the current “assets”.

“Industrial and Commercial Equipment” amounts to Euro 937 thousand at December

31, 2014 (Euro 614 thousand at December 31, 2013) and mainly relates to investments

in new production moulds and plant and the updating of the production plant at Rufina

Scopeti (Florence-Italy).

“Other Assets” amount to Euro 188 thousand at December 31, 2014 (Euro 210 thousand

at December 31, 2013) and include furniture and office equipment, EDP and motor

vehicles.

Finance leases at December 31, 2014 amounted to Euro 278 thousand, relating to “Plant

and Machinery”. The present value of payables relating to finance lease contracts in

place at December 31, 2014 amounts to Euro 15 thousand, maturing in the next year

(for further information on financial liabilities, reference should be made to “Note 12 -

Financial liabilities”).

There are no fixed assets subject to restrictions with the exception of the mortgage on

the building at Rufina (Florence) following the loan granted by Banca Nazionale del

Lavoro and Intesa Sanpaolo.

� Note 3 – Financial Assets

“Financial Assets” amount to Euro 2,779 thousand at December 31, 2014 (Euro 1.483




239

The breakdown of the account in 2014 is as follows:

Euro thousands

Loans & Receivables:

Subsidiaries

Other Financial Assets: Third

parties

Total Amount

December 31, 2013 1,476 7 1,483


current portion 1,096 0 1,096

December 31, 2014 2,772 7 2,779

non-current portion 1,275 7 1,282

current portion 1,497 0 1,497

Change in year 1,296 0 1,296



Note 3.A - FINANCIAL ASSETS

The account “Loans and Receivables - subsidiaries -non-current portion” includes:

� portion of the residual loan of Euro 100 thousand granted to FILALYRA GB Ltd.

(United Kingdom);

� loans of Euro 1,175 thousand granted to Industria Maimeri S.p.A. (Italy) and

provided by F.I.L.A. S.p.A. in 2014 in two tranches for Euro 325 thousand and

Euro 850 thousand respectively. The contract establishes interest at a variable rate

equal to Euribor at 6 months, plus a spread of 200 basis points for the first tranche.

The second tranche is non-interest bearing.

The account “Loans and Receivables - subsidiaries -current portion” includes:

� the short-term portion of the loan granted to FILALYRA GB Ltd. (United

Kingdom), described in the previous point, amounting to Euro 200 thousand.

The contract establishes interest at a variable rate equal to Euribor at 6 months,

plus a spread of 260 basis points;

� the short-term portion of the loan, amounting to Euro 550 thousand, granted to

FILA Stationary O.O.O. (Russia). An additional loan was granted of Euro 200

thousand in 2014, further to the residual loan at December 31, 2013. The



240

amount includes Euro 19 thousand interest accrued. The contract establishes

interest at a variable rate equal to Euribor at 3 months, plus a spread of 280 basis

points;


Licyn Mercantil Industrial Ltda (Brazil). An additional loan was granted of Euro

350 thousand in 2014, further to the residual loan at December 31, 2013. The

amount includes Euro 3 thousand interest accrued. The contract establishes

interest at a variable rate equal to Euribor at 6 months, plus a spread of 280 basis

points;


FILA Cartorama S.A. (Pty) Ltd. (South Africa). The amount includes Euro 4

thousand interest accrued. The contract establishes interest at a variable rate

equal to Euribor at 3 months, plus a spread of 280 basis points.

The loan outstanding at December 31, 2013 of Euro 82 thousand was repaid during

2014, including Euro 2 thousand of interest, by the company Lyra Asia PTE Ltd.

(Singapore).

We also report the conversion into share capital on September 30, 2014 of the loan

granted by F.I.L.A. S.p.A. to the company FILA Stationary and Office Equipment

Industry Ltd. Co. (Turkey), amounting to Euro 710 thousand (reference should be made

to Note 4 “Investments Measured at Cost”).

The book value approximates the “fair value” of these assets at the reporting date.

Details on the timing of financial cash flows and “Financial Assets” at December 31,




241

Current Financial

Assets

Principal Interest Variable Spread 2015 2016 2017 2018 Beyond 2018

Euro thousands

Guarantee Deposits 7 0 7 2004 EUR Italy 0% 0% 0 0 0 0 7 None None

Loan FILALYRA GB Ltd. (United Kingdom) 300 0 300 2010 EUR UK Euribor 6 mth. 2.60% 200 100 0 0 0 None None

Loan Industria Maimeri S.p.A. (Italy) 325 2 327 2014 EUR Italy Euribor 6 mth. 2.00% 2 0 325 0 0 None None

Loan Industria Maimeri S.p.A. (Italy) 850 0 850 2014 EUR Italy 0.00% 0.00% 0 0 0 850 0 None None

Loan FILA Turkey (Turkey) 0 3 3 2012 EUR Turkey Euribor 3 mth. 2.80% 3 0 0 0 0 None None

Loan Licyn Mercantil Industrial Ltda (Brazil) 430 3 433 2012 EUR Brazil Euribor 6 mth. 2.80% 433 0 0 0 0 None None

Loan FILA Stationery O.O.O. (Russia) 550 19 569 2013 EUR Russia Euribor 3 mth. 2.80% 569 0 0 0 0 None None

FILA Cartorama S.A. (Pty) Ltd (South Africa) 286 4 290 2014 EUR South Africa Euribor 3 mth. 2.80% 290 0 0 0 0 None None

Total amount 2,748 31 2,779 1,497 100 325 850 7

Non-Current Financial Assets

NOTE 3.B - FINANCIAL ASSETS

Description

General information Amount

Guarantees ReceivedGuarantees

GrantedAmountTotal Year Currency Country

Interest

“Other Financial Assets from third parties” relates to deposits paid to third parties as

contractual guarantees for the provision of services and goods.

Reference should be made to Note 10 concerning the “Net Financial Position” at

December 31, 2014 of F.I.L.A. S.p.A..

� Note 4 - Investments Measured at Cost

Note 4.A Investments Measured At Cost

Euro thousandsInvestments in Subsidiaries

Investments in

Associates

Investments in Other

CompaniesTotal Amount

December 31, 2013 49,104 6,115 2 55,221

Increases in the year 2,249 28 0 2,277

Increases (Investments) 2,249 28 0 2,277



December 31, 2014 51,353 6,143 2 57,498

Change in year 2,249 28 0 2,277

Investments in subsidiaries at December 31, 2014 and the changes in the year are

illustrated in the table below:



242

Note 4.B - INVESTMENTS IN SUBSIDIARIES

Euro thousands

F.I.L.A.

Hispania S.L.

(Spain)

Omyacolor

S.A.

(France)

Dixon

Ticonderoga Co.

(U.S.A.)

F.I.L.A. Chile

Ltda

(Chile)

Lyra Bleistift-Fabrik

GmbH & Co. KG

(Germany)

FILA Stationary and

Office Equipment

Industry Ltd. Co.

(Turkey)

Licyn Mercantil

Industrial Ltda

(Brazil)

FILA Stationery

O.O.O.

(Russia)

Industria

Maimeri S.p.A.

(Italy)

FILA Cartorama S.A.

(Pty) Ltd. (South

Africa)

FILA Hellas

S.A. (Greece)

FILA Australia

Pty Ltd

(Australia)

Total Amount

December 31, 2013 90 2,506 30,541 62 12,454 9 3,347 95 0 0 0 0 49,104

Increases 0 0 0 0 0 1,290 0 0 946 1 12 1 2,249

Decreases 0 0 0 0 0 0 0 0 0 0 0 0 0

December 31, 2014 90 2,506 30,541 62 12,454 1,299 3,347 95 946 1 12 1 51,353

Change in year 0 0 0 0 0 1,290 0 0 946 1 12 1 2,249

Investments in subsidiaries measured at cost increased by Euro 2,249 thousand, due to

the incorporation of Industria Maimeri S.p.A. (Italy – Euro 946 thousand), FILA Hellas

S.A. (Greece – Euro 12 thousand), FILA Cartorama S.A. (Pty) Ltd. (South Africa –

Euro 1 thousand), FILA Australia Pty Ltd. (Australia – Euro 1 thousand) during the

year, as well as the increase of the share capital of the company FILA Stationary and

Office Equipment Industry Ltd. Co. (Turkey – Euro 1,290 thousand) undertaken by

F.I.L.A. S.p.A. which derives from a conferment in cash, amounting to Euro 579

thousand, and conversion of the loan at September 30, 2014 of Euro 710 thousand.

A comparison between the value of the investment and the equity of the subsidiaries at

December 31, 2014 is illustrated in the table below:

Investments Measured at Equity - Euro thousands

Subsidiaries Equity Net Profit/ % Share of Net Value

at December 31, 2014 (Loss) Holding Equity Book according to

Value equity method

Dixon Ticonderoga Company (U.S.A.)* 69,754 10,037 100.00% 69,754 30,603 70,410

Licyn Mercantil Industrial Ltda (Brazil) 954 (957) 99.99% 954 3,347 1,025

Omyacolor S.A. (France) 14,407 1,881 99.9% 14,393 2,505 12,099

F.I.L.A. Hispania S.L. (Spain) 2,780 1,116 96.77% 2,690 90 2,780

Johann Froescheis Lyra Bleistift-Fabrik GmbH & Co. KG (Germany) 10,406 1,168 100.00% 10,406 12,454 11,623

FILA Stationary and Office Equipment Industry Ltd. Co. (Turkey) 40 (9) 99.99% 40 1,300 40

Fila Stationary O.O.O. (Russia) (508) (674) 90.00% (457) 95 (508)

Fila Hellas SA (Greece) 1,602 271 51.00% 817 12 295

Industraia Maimeri S.p.A. (Italy) 1,490 (76) 51.00% 760 946 1,490

Fila Cartorama SA PTY LTD (South Africa) (300) (194) 50.00% (150) 0 (200)

51,352 99,054

(1) figures from last approved financial statements

* includes 1% share of F.I.L.A CHILE LTDA held by F.I.L.A. S.p.A.



243

The carrying amount of the investment held by F.I.L.A. S.p.A. at December 31, 2014 in

Johann Froescheis Lyra-Bleitstitift-Fabrik GmbH&Co-KG (Germany) is considered

recoverable based on the future profitability and the “sensitivity analysis” undertaken.

The carrying amount in the investments held by F.I.L.A. S.p.A. at December 31 in the

following companies are considered recoverable: FILA Stationary and Office

Equipment Industry Ltd Co. (Turkey), FILA Stationary O.O.O. (Russia), Licyn

Mercantil Industrial Ltda (Brazil) and FILA Cartorama S.A. (Pty) Ltd. (South Africa)

as they relate to companies in start-up phases and for which future profitability is

forecast.


shares of the company. We report liens relating to the shares held by F.I.L.A. S.p.A. in

Omyacolor S.A. (France), Dixon Ticonderoga Co. (U.S.A.) and Lyra KG (Germany) to

guarantee the bank loans in place at December 31, 2014.

� Note 5 – Deferred Tax Assets

“Deferred Tax Assets” amount to Euro 2,117 thousand at December 31, 2014 (Euro


Euro thousands

December 31, 2013 2,244

Provisions 44

Utilisations (171)

December 31, 2014 2,117


Note 5.A - CHANGES IN DEFERRED TAX ASSETS



244

The account at December 31, 2014 concerns temporary deductible differences in future

years and were recorded as there is a reasonable certainty of the existence, in the years

in which the temporary differences will reverse, of assessable income not lower than the

amount of these differences.

At December 31, 2014, F.I.L.A. S.p.A. did not have tax losses carried forward.

The breakdown of “Deferred Tax Assets” is illustrated below.

Euro thousands 2014 2013 2014 2013


Intangible Assets 124 131 (7) (3)

Property, Plant and Equipment 442 504 (62) 99

Directors Remuneration 266 208 58 (52)

Doubtful Debt Provision not Deductible 257 234 23 (106)

Inventories 96 60 36 (58)

Agents Contributions 263 263 0 0

Exchange adjustments 20 21 (1) 3

Provisions for Risks and Charges 5 6 (1) 0

Fiscal Losses Carried Forward "Lyra KG (Germania)" 634 805 (171) (274)

Other 10 12 (2) 1

Total deferred tax assets 2,117 2,244 (127) (390)

NOTE 5.B - BREAKKDOWN OF DEFERRED TAX ASSETS


“Tax Losses carried forward” relates to the deferred tax asset on the tax losses of Lyra

KG (Germany) amounting to Euro 634 thousand, relating to the taxation of the parent

company pursuant to German tax legislation.

The table below illustrates the expected reversal of the deferred tax assets through the

income statement:



245


Euro thousands December 31, 2014 2015 2016 2017 2018

Beyond

2018


Intangible Assets 124 30 30 30 34 0


Directors Remuneration 266 110 140 16 0 0

Doubtful Debt Provision not Deductible 257 50 50 50 50 57

Inventories 96 96 0 0 0 0

Agent Social Contributions 263 65 65 65 68 0

Exchange Adjustments 20 20 0 0 0 0

Provisions for Risks and Charges 5 5 0 0 0 0

Tax Losses Carried Forward "Lyra KG (Germany)" 634 200 200 200 34 0

Other 10 10 0 0 0 0

Total deferred tax assets 2,117 666 565 441 266 179

Note 5.C BREAKDOWN OF DEFERRED TAX ASSETS

Expiry Date

The deferred tax asset calculation is made by F.I.L.A. S.p.A., evaluating the projected

future recovery of these assets based on updated strategic plans, together with the

relative tax plans.

The table below illustrates the temporary differences giving rise to deferred tax assets

for I.R.E.S. and I.R.A.P. purposes:

Euro thousands

I.R.E.S. I.R.A.P.

27.50% 3.90%

Intangible Assets 114 10 124

Property, Plant and Equipment 442 0 442

Directors Remuneration 266 0 266

Doubtful Debt Provision not Deductible 257 0 257

Inventories 96 0 96

Agent Social Contributions 230 33 263

Exchange Adjustments 20 0 20


Tax Losses Carried Forward "Lyra KG (Germany)" 634 0 634

Other 10 0 10

Total deferred tax assets 2,074 43 2,117

NOTE 5.D DEFERRED TAX ASSETS: I.R.E.S - I.R.A.P

Deferred tax assets relating to:Income

Tax



246

� Note 6 - Current Tax Assets

At December 31, 2014 tax receivables, relating to income taxes, amount to Euro 0

(Euro 399 thousand at December 31, 2013) concerning payments on account paid in the

year.

� Note 7 - Inventories

Inventories at December 31, 2014 amount to Euro 19,354 thousand (Euro 17,415


The breakdown of inventories is as follows:

Note 7.A - INVENTORIES

Euro thousands

Raw Materials,

Ancillary and

Consumables


Semi-finished

Products

Finished Products

and Goods

Total Amount

December 31, 2013 3,405 2,518 11,492 17,415

December 31, 2014 3,767 3,179 12,408 19,354

Change in year 362 661 916 1,939

The values reported in the previous table are shown net of the inventory obsolescence

provision relating to raw materials, products in work-in-progress and finished products,

amounting respectively at December 31, 2014 to Euro 117 thousand (Euro 100

thousand at December 31, 2013), Euro 36 thousand (Euro 0 thousand at December 31,

2013) and Euro 195 thousand (Euro 117 thousand at December 31, 2013), which refer

to obsolete or slow moving materials for which it is not considered possible to recover

through sales.

No inventory is provided as a guarantee on liabilities.



247

The changes in the inventory obsolescence provision in the year were as follows:

Note 7.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, 2013 100 0 117 217

Provisions 61 185 104 349

Utilisations (44) (149) (27) (219)

December 31, 2014 117 36 195 348

Change in year 17 36 78 131

Inventory Obsolescence ProvisionTotal Amount

During 2014 the provision was utilised for disposals and product scrapping. The

provision for the year was recorded against slow moving inventories at year end.

� Note 8 – Trade and Other Receivables

These amount to Euro 18,537 thousand and increased on the previous year by Euro 290

thousand.

The breakdown is illustrated below.

Note 8.A - TRADE AND OTHER RECEIVABLES

Euro thousands Dec. 31, 2014 Dec. 31, 2013 Change in year

Trade Receivables 12,557 13,753 (1,196)

Tax Receivables 767 535 232

Other Receivables 619 1,001 (382)

Prepayments & Acc. Income 71 14 57

Third parties 14,014 15,303 (1,289)

Trade Receiv. - Subsidiaries 4,496 2,944 1,552

Subsidiaries 4,496 2,944 1,552

Trade Receiv. - Associates 27 0 27

Total amount 18,537 18,247 290



248

Trade receivables are also impacted by a without recourse factoring contract with the

company International Factors Italia S.p.A. signed in 2009. In particular, the decrease

in trade receivables in 2014 (Euro 1,196 thousand) is due to the greater use of without

recourse factoring (Euro 10,077 thousand in 2014 compared to Euro 9,130 thousand in

2013), together with higher revenues in 2014 and an improved average DSO.

“Trade Receivables from Subsidiaries” amount to Euro 4,496 thousand at December 31,

2014 (Euro 2,944 thousand at December 31, 2013).

“Trade Receivables from Associates” amount to Euro 27 thousand (Euro 0 thousand at

December 31, 2013) and refer to commercial transactions with the company Writefine

Products Private Limited (India).

The change is related to business levels in the period.

The amounts of the previous table are shown net of the doubtful debt provision.

At December 31, 2014 there were no trade receivables subject to guarantees.


The geographic breakdown of trade receivables (by customers) are illustrated in the

table below:

Note 8.B -TRADE RECEIVABLES THIRD PARTIES - REGIONAL BREAKDOWN

Euro thousands December 31, 2014 December 31, 2013 Change in year

Europe 11,976 13,380 (1,404)

North America 1 0 1

Rest of the World 580 373 207

Third parties 12,557 13,753 (1,196)

The changes in the doubtful debt provision to cover difficult recovery positions are

illustrated in the table below.



249

Note 8.C CHANGES IN DOUBTFUL DEBT PROVISION

Doubtful debt provision

Euro thousands

December 31, 2013 962

Provisions 239

Utilisations (165)

December 31, 2014 1,036

Change in year 74

“Tax Receivables” includes V.A.T. and other local taxes other than corporation taxes.

Current tax receivables amount to Euro 767 thousand at December 31, 2014 (Euro 535

thousand at December 31, 2013) and includes VAT receivables at December 31, 2014,

as well as tax credits arising from the reimbursement request for IRES relating to IRAP

on labour costs in previous years.

“Other Receivables” includes personnel and social security receivables and payments

on account to suppliers. At December 31, 2014 the account amounts to Euro 619

thousand (Euro 1,001 thousand at December 31, 2013).

The book value of “Other Receivables” represents the “fair value” at the reporting date.


� Note 9 - Cash and cash equivalents

“Cash and Cash Equivalents” at December 31, 2014 amount to Euro 11,221 thousand


The breakdown and comparison with the previous year is illustrated in the table below.



250

Note 9.A - CASH AND CASH EQUIVALENTS

Euro thousands

Bank and Post Office

Deposits

Cash in hand and

similar

Total Amount

December 31, 2013 14,860 13 14,873

December 31, 2014 11,196 25 11,221

Change in year (3,664) 12 (3,652)

"Bank and postal deposits" consist of temporary liquidity positions with banks

generated in conjunction with treasury management and relating to ordinary current

accounts of F.I.L.A. S.p.A..

The book value approximates the “fair value” at the reporting date.

Bank and postal deposits are remunerated at rates which approximate the Euribor.

There are no bank and postal deposits subject to restrictions.

For comments on cash flows in the year, reference should be made to the cash flow

statement.

� Note 10 - Net Financial Position

The “Net Financial Position” at December 31, 2014 was as follows:



Financial Liabilities - Bank Overdrafts 0 0

Financial Assets - Loans & Current & Non-Current Receivables 2,772 1,476

Financial Liabilities - Bank Current (11,017) (13,730)

Financial Liabilities - Bank Non-Current (18,890) (26,580)

Total Net Financial Position (15,914) (23,961)

The “Net debt” at December 31, 2014 amounted to Euro 15,914 thousand, improving

on the previous year by Euro 8,047 thousand, principally due to operating cash flow

generated in the year, net of capex, equity investments, dividends and interest paid.

Reference should be made to the “Directors’ Report -Balance Sheet” for comments on

the Net Financial Position of F.I.L.A. S.p.A.



251

� Note 11 - Share Capital and Equity

The changes in the account “Share Capital and Equity” are illustrated for the two years

in the table below:

Euro thousands

Share capitalLegal

ReserveIAS 19 Reserve

Other

ReservesRetained Earnings Profit for year Equity

December 31, 2012 2.626 602 (60) 6.987 32.063 6.919 49.136

Changes in the year 122 0 (19) 5.940 0 0 6.044

Net Profit 0 0 0 0 0 5.835 5.835

Gains/(losses) recorded directly to equity 122 0 (19) 5.940 0 5.835 11.878

Allocation of the 2012 result 0 0 0 0 6.919 (6.919) 0

Dividends 0 0 0 0 (1.507) 0 (1.507)

December 31, 2013 2.748 602 (79) 12.927 37.475 5.835 59.508

Changes in the year 0 0 (179) 0 0 0 (180)

Net Profit 0 0 0 0 0 6.019 6.019

Gains/(losses) recorded directly to equity 0 0 (179) 0 0 6.019 5.840

Allocation of the 2013 result 0 6 0 0 5.829 (5.835) 0

Dividends 0 0 0 0 (1.526) 0 (1.526)

December 31, 2014 2.748 608 (258) 12.927 41.778 6.019 63.822

NOTE 11.A - Statement of Changes in Equity

Share capital

The Share Capital, fully paid-in, amounts to Euro 3,039,654.60, divided into 1,876,330

shares for a par value of Euro 1.62 each.

The nominal value of the Share Capital is reduced by the purchase of treasury shares, in

accordance with IAS 32, for a value of Euro 292 thousand.

The following table shows the reconciliation between the number of shares of all

classes in circulation at December 31, 2014 and the number of shares in circulation at

December 31, 2013:



252

In Euro31-12-2014 31-12-2013 31-12-2014 31-12-2013

In circulation at the beginning of the Year 1,876,330 1,800,750 3,039,655 2,917,215

Issued in the year 0 75,580 0 122,440

Sales in the year 0 0 0 0

Outstanding at the end of the year 1,876,330 1,876,330 3,039,655 3,039,655

Total treasury shares held 180,075 180,075 291,722 291,722

% treasury shares on share capital 9.60% 9.60% 9.60% 9.60%

Note 11.B - SHARES IN CIRCULATION

Number of Shares Nominal Value


shares of the company. We report liens relating to the shares held by F.I.L.A. S.p.A. in

Omyacolor S.A. (France), Dixon Ticonderoga Co. (U.S.A.) and Lyra KG (Germany) to

guarantee the bank loans in place at December 31, 2014.

Each ordinary share attributes voting rights without limitations. Each class B share

gives the right to 3 exercisable votes in Shareholders’ Meeting (ordinary and

extraordinary) of F.I.L.A. S.p.A..

There are no other restrictions in the distribution of dividends and in the repayment of

capital with the exception of restrictions concerning loan contracts signed between

F.I.L.A. S.p.A. and Intesa Sanpaolo in 2009 and between F.I.L.A. S.p.A. and BNL -

Intesa Sanpaolo in 2011. The restriction relates to the payment and/or distribution of

dividends to shareholders within an annual maximum limit of Euro 2,500 thousand or,

in any case 15% of the profits of the Group.

The availability and distributability of shareholders’ equity is outlined in the following

table:



253

Equity accounts Balance at

31-12-2014

Possibility of

Utilisation

Quota

Available

Euro thousandscover losses

other

reasons

Share capital 2,748 0 0 292

Capital Reserves:

Legal Reserve 608 A 608 0 0

IAS 19 Reserve (258) 0 0 0

Other Reserves 12,927 B, C 12,927 0 0

Retained Earnings 41,778 B, C 41,778 0 (19,436)

Total 57,803 55,313 0 (19,144)

Key:

A - Available only to cover losses

B - Available to cover losses and capital increases

C - Distributable

Note 11.C ORIGIN, POSSIBILITY FOR UTILISATION AND DISTRIBUTION OF EQUITY

Summary of Utilisations in Last

3 Years

(2012-2014)

Legal reserve

The account at December 31, 2014 amounts to Euro 608 thousand, equal to 22.13% of

the share capital. The increase compared to December 31, 2013 of Euro 6 thousand is

attributable to the allocation of part of the 2013 result approved by the Shareholders’

Meeting on April 28, 2014. The allocation of this amount to the legal reserve

represents the amount necessary to re-establish the statutory obligations as per Article

2431 of the Civil Code.

Other reserves

The account amounts to Euro 12,927 thousand at December 31, 2014, unchanged

compared to December 31, 2013. The account includes the share premium reserve of

Euro 5,940 thousand at December 31, 2014 and December 31, 2013.

IAS 19 Reserve

The account at December 31, 2014 amounts to Euro 258 thousand (Euro 79 thousand at

December 31, 2013) and reports a decrease in the year of Euro 289 thousand as well as

an increase of Euro 110 thousand relating to deferred tax liabilities recognised directly

to equity.



254

Retained earnings

The account at December 31, 2014 amounts to Euro 41,778 thousand (Euro 37,475

thousand at December 31, 2013) and increased by Euro 4,303 thousand relating to the

allocation of the 2013 result and decreased by Euro 1,526 thousand relating to the

distribution of dividends to shareholders of F.I.L.A. S.p.A..

Dividends

In 2014, F.I.L.A. S.p.A. distributed to shareholders Euro 0.93 per share, taking into

account treasury shares, corresponding to a value of Euro 1,526 thousand.

In 2014, the Board of Directors F.I.L.A. S.p.A. proposed the allocation of the profit of

Euro 6,018,519.50 entirely to retained earnings.

F.I.L.A. S.p.A. expects to receive in 2015 approx. Euro 4.7 million from subsidiary

companies.

In the last three years and in its forecasts, the F.I.L.A. Group coordinates its dividend

policy in line with the financial needs of extraordinary acquisition operations.

� Note 12 - Financial Liabilities

The balance at December 31, 2014 amounts to Euro 29,907 thousand (Euro 40,310

thousand at December 31, 2013), of which Euro 18,890 thousand long-term and Euro

11,017 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 December 31, 2014 is illustrated below.



255

Banks Other Lenders: Third Parties Bank Overdrafts

Euro thousands Principal Interest Principal Interest Principal Interest

December 31, 2013 40,050 100 154 0 0 6 40,310

non-current portion 26,750 (190) 20 0 0 0 26,580

current portion 13,300 290 134 0 0 6 13,730

December 31, 2014 29,750 84 73 0 0 0 29,907

non-current portion 19,000 (112) 2 0 0 0 18,890

current portion 10,750 196 71 0 0 0 11,017

Change in year (10,300) (16) (81) 0 0 (6) (10,403)

non-current portion (7,750) 79 (19) 0 0 0 (7,690)

current portion (2,550) (94) (63) 0 0 (6) (2,713)

Note 12.A - FINANCIAL LIABILITIES

Total

Amt.

“Bank Loans – non-current portion” includes:

� loan underwritten with Intesa Sanpaolo in 2009 and drawn down in 2010,

amounting to Euro 14.5 million (original amount of Euro 40 million) to support the

operating needs of the F.I.L.A. Group;

� loan underwritten with Banca Nazionale del Lavoro and Intesa Sanpaolo in July

2011, amounting to Euro 4.5 million (original loan of Euro 8 million) to support the

investment plans of the F.I.L.A. Group and working capital requirements.

“Bank Loans – current portion” includes:

� current portion equal to Euro 6.5 million of the loan granted by Intesa Sanpaolo;

� current portion equal to Euro 1,250 thousand of the loan granted by Nazionale del

Lavoro and Intesa Sanpaolo;

� Euro 3,000 thousand of the credit line issued in 2011, within the contract

underwritten with Banca Nazionale del Lavoro and Intesa Sanpaolo in July 2011;



256

The table below shows the breakdown of the capital portion of the “Financial

Liabilities” of F.I.L.A. S.p.A., with indication of the relative interest applied and

contract maturity dates.

Euro thousands

Interest RateMaturity December 31, 2014 December 31, 2013

Non-current liabilities: bank payables

Loan Intesa Sanpaolo

Euribor at 6

months

+ spread 1.40%

January 2017 14,500 21,000

Loan Banca Nazionale del Lavoro / Intesa Sanpaolo

Euribor at 6

months

+ spread 1.90%

March 2018 4,500 5,750

Total non-current financial liabilities 19,000 26,750

Current liabilities: bank payables

Loan Intesa Sanpaolo

Euribor at 6

months

+ spread 1.40%

January 2015

6,500 6,000

Loan Banca Nazionale del Lavoro

Euribor at 6

months

+ spread 1.85%

December 2014

0 1,050

Loan Banca Nazionale del Lavoro / Intesa Sanpaolo

Euribor at 6

months

+ spread 1.90%

March 2015 1,250 750

Credit Line Banca Nazionale del Lavoro

Euribor at 6

months

+ spread 1.85%

December 2014

0 1,500

Credit Line Banca Nazionale del Lavoro / Intesa Sanpaolo

Euribor at 6

months

+ spread 1.70%

September 2015 *

3,000 4,000

Total current financial liabilities 10,750 13,300

* For further information, reference should be made to the comments below

Note 12.B FINANCIAL LIABILITIES BANKS: INTEREST RATE AND MATURITY

The original loan signed by F.I.L.A. S.p.A. of Euro 40 million in December 2009,

drawn down from Intesa Sanpaolo in December 2010, duration of 8 years. The

repayment of the residual debt at December 31, 2014 is over 3 increasing annual

instalments, from January 2015 and with final instalment in January 2017. The interest

rate applied is the base Euribor at 6 months plus a spread of 1.40%. The average

effective interest rate applied on the loan in 2014 was 1.854%.



257

The residual loan signed by F.I.L.A. S.p.A. (original loan of Euro 5 million) from

Banca Nazionale del Lavoro in 2010, with duration of 5 years, was repaid in June and

September 2014, for a total amount of Euro 1,050 thousand.

The loan signed by F.I.L.A. S.p.A., amounting to Euro 8 million, granted by Banca

Nazionale del Lavoro and Intesa Sanpaolo in December 2011, duration 7 years. The

repayment of the residual debt at December 31, 2014 is over 4 annual instalments in

arrears, from March 2015. The interest rate applied is the base Euribor at 6 months, plus

a spread of 1.90%. The average effective interest rate applied on the loan in 2014 was

2.345%.

The credit line signed by F.I.L.A. S.p.A., originally of Euro 4 million, granted by Banca

Nazionale del Lavoro and Intesa Sanpaolo in December 2011, duration 5 years. The

repayment of the residual debt at December 31, 2014 is over 2 annual instalments in

arrears, in September 2015 and June 2016. The instalment due at December 31, 2014

of Euro 1 million was paid in October 2014. The interest rate applied is the base

Euribor at 6 months, plus a spread of 1.70%. The average effective interest rate applied

on the loan in 2014 was 2.145%.

We note the extinction of the credit line agreed by F.I.L.A. S.p.A., originally of Euro 5

million, granted by Banca Nazionale del Lavoro in 2010, duration 5 years, in December

2014 for an amount of Euro 1.5 million.


transaction costs. Initial book value is subsequently adjusted to account for





(amortised cost method). The effect at December 31, 2014 of the amortised cost method

is Euro 112 thousand.



258

This loan provides for covenants, calculated based on the consolidated financial

statements, whose violation is considered as non-fulfilment of such and which, if not

settled, may result in a request for immediate return of the sums received. In relation to

the covenants, reference should be made to the “Directors’ Report - Commitments and

Guarantees”.

The spread applied by banking institutions on loans reduced on the previous year,

following compliance with financial and operating parameters (“covenants”) by 20

basis points.

Details on the timing of financial cash flows and “Bank Loans” at December 31, 2014

are illustrated in the following table:

Current Financial

Liabilities

Non-Current Financial

Liabilities

Euro thousands Per contractAmortized

Cost

Loan Intesa Sanpaolo 21,000 151 (74) 21,077 2009 EUR Italy Euribor 6 mths. 1.40% 6,651 7,000 7,426 0

Loan BNL / Intesa Sanpaolo 5,750 31 (38) 5,743 2011 EUR Italy Euribor 6 mths. 1.90% 1,281 1,250 1,500 1,712

Credit Lines BNL / Intesa Sanpaolo 3,000 14 0 3,014 2011 EUR Italy Euribor 6 mths. 1.70% 3,014 0 0 0

Total amount 29,750 196 (112) 29,834 10,946 8,250 8,926 1,712

Principal

Interest

Variable 2017 2018Spread

Country

Interest

Note 12.C BANK LOANS

Description


Amount

Total Year Currency

2015 2016

“Financial “liabilities to Other Lenders” includes the payables of F.I.L.A. S.p.A. to

BNP Paribas for leasing contracts and factoring companies for advances on transfer of

receivables (Ifitalia). The loan with the Industry and Commerce Ministry was settled in

October 2014. This loan related to an incentive recognised to F.I.L.A. S.p.A. for

innovative technological capital investments in accordance with Law 46/1982.

Payables to other lenders at December 31, 2014 totalled Euro 73 thousand (Euro 154

thousand at December 31, 2013), with the non-current portion totalling Euro 2 thousand

(Euro 20 thousand at December 31, 2013).



259

Details on the timing of financial cash flows and “Other Lenders” at December 31,


General information

Current Financial

Liabilities

Non-

Current

Financial

Guarantees

Granted

Principal Interest Variable Spread 2015 2016

Euro thousands

BNP Paribas (Leasing) 15 0 15 2009 EUR Italy 0.00% 0.00% 15 0 None

Safety Kleen Italia S.p.A. (Leasing) 4 0 4 2013 EUR Italy 0.00% 0.00% 2 2 None

International Factors S.p.A. (Ifitalia) 54 0 54 2014 EUR Italy Euribor 3 mths. 0.75% 54 0 None

Total amount 73 0 73 71 2

Note 12.D - LOANS FROM OTHER LENDERS

Description

Loan Repayments

Amount Total Year

Currenc

yCountry

Interest

“Bank Overdrafts” at December 31, 2014 amounted to Euro 0 thousand corresponding

to the capital portion.

Reference should be made to “Note 10 - Net Financial Position” and the “Directors’

Report – Key Financial Highlights of the F.I.L.A. Group – Financial Position” in

relation to the net financial position at December 31, 2014.

� Note 13 - Employee Benefits

The benefits recognised to employees of 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 Post-Employment Benefit Provision matured at December 31, 2006 is considered a

defined benefit plan as per IAS 19. The benefits guaranteed to employees, under the



260

form of the Post-Employment Benefit Provision, paid on the termination of

employment, are recognised in the period the right matures. The relative liability is

based on actuarial assumptions and the effective payable matured and not settled at the

reporting date. The discounting process, based on demographic and financial

assumptions, is undertaken applying the “Projected Unit Credit Method” by

professional actuaries.

The Post-Employment Benefits matured since January 1, 2007 are considered a defined

contribution plan and therefore contributions matured in the period were fully

recognised as a cost and recorded as a payable in the account “Other Current

Liabilities”, after the deduction of any contributions already paid.

The amounts at December 31, 2014 were as follows:

Note 13.A POST-EMPLOYMENT BENEFITS

Euro thousands

December 31, 2013 1,977

Disbursements (689)

Financial Charges 59

Pension Cost for Service 531

IAS 19 Reserve 217

Other Decreases (27)

December 31, 2014 2,068

Change in year 91

The “Actuarial Loss” recorded in 2014 amounts to Euro 217 thousand. The actuarial

changes in the year, net of the tax effect, are recognised directly to equity.

The following table illustrates the disclosures required by I.F.R.S. in relation to

“Employee Benefits”.



261

1. Obligations for Employee Benefits

31-12-2014 31-12-2013

Present Value of Obligations Not Covered by Assets to Service Plan 2,068 1,977

Total amount 2,068 1,977

There are no financial assets at December 31, 2014 invested by F.I.L.A. S.p.A. to cover

financial liabilities relating to Post-Employment Benefits.

The table below highlights the net cost recognised to the income statement in 2014 and

2013:

2. Cost Recognised in Income Statement

31-12-2014 31-12-2013

Pension Cost for Service (531) (490)

Financial Charges (59) (67)

Cost Recognised in Income Statement (590) (557)

The obligations deriving from the above-mentioned plans are calculated based on the

following actuarial assumptions:

3. Main Actuarial Assumptions at Reporting Date (average values)

31-12-2014 31-12-2013

Annual Technical Discounting Rate 1.5% 3.2%

Increase Cost of Living 1.8% 2.0%

Future Increase in Pensions 2.8% 3.0%

For comparative purposes we illustrate the actuarial assumptions applied in 2013.

Details on the timing of financial cash flows relating to post-employment benefits at

December 31, 2014 are illustrated in the following table:



262

Amount 2015 2016 2017 2018 Beyond 2018

Euro thousands

Post-Employment Benefits

Post-Employment Benefits 2,068 150 150 110 110 1,548

Total amount 2,068

Note 13.B POST-EMPLOYMENT BENEFITS: TIMING CASH FLOWS

Timing cash flows

Nature

� Note 14 - Provisions for Risks and Charges

The “Provision for Risks and Charges” amounts to Euro 617 thousand and increased

Euro 57 thousand on the previous year.

Euro thousands

Risks Provisions

for Tax Disputes

Risks Provisions

for Legal Disputes

Provisions for

Agents

Other

Provisions

Total Amount

December 31, 2013 39 21 464 36 560

non-current portion 0 0 464 0 464

current portion 39 21 0 36 96

December 31, 2014 39 16 526 36 617


current portion 39 16 0 36 91

Change in year 0 (5) 62 0 57


current portion 0 (5) 0 0 (5)

Note 14.A PROVISION FOR RISKS AND CHARGES

The movement in the account “Provision for Risks and Charges” at December 31, 2014

was as follows:



263

Provisions for Legal

DisputesProvisions for Agents

Other

Provisions

Total Amount

December 31, 2013 39 21 464 36 560

Utilisation of Provisions 0 (5) (44) 0 (49)

Provisions Accrued 0 0 34 0 34

Discounting 0 0 72 0 72

December 31, 2014 39 16 526 36 617

Change in year 0 (5) 62 0 57

Note 14.B PROVISION FOR RISKS AND CHARGES

The relative “Provisions for Risk and Charges” are classified, by nature, in the related

income statement accounts.

� Risk Provisions for Tax Disputes:

this provision represents the best estimate by management and tax consultants of

liabilities, principally concerning a tax assessment by the public tax departments

concerning financial year 2004 and relating to direct and indirect taxes.

� Legal Dispute Provisions:


discharged concerning:

• legal proceedings arising from ordinary operating activities;

• legal proceedings concerning disputes with employees or former employees.

� Provisions for Pensions and Similar Obligations:

the provision for pensions and similar obligations concerns the agent

supplementary indemnity provision. The “Actuarial Loss” for 2014 amounts to

Euro 72 thousand. The actuarial changes in the year, net of the tax effect, are




264

� Other provisions:


discharged concerning a possible liability relating to the acquisition of Lyra.

Details on the timing of financial cash flows relating to the provisions for risks and

charges at December 31, 2014 are illustrated in the following table:

AmountActuarial Value Year

2014

Discount Rate Applied

for Actuarial Value2015 2016 Beyond 2017

Euro thousands

Provisions for Tax Disputes

Assessment Year 2004 39 0 0 39 0 0

Provisions for Legal Disputes

Appeal against Sentence 16 0 0 16 0 0

Provisions for Agents

Agents’ Supplementary Indemnity Provision 526 526 1.50% 0 0 526

Other Provisions

Other Provisions for Risks and Charges 36 0 0 36 0 0

Total amount 617 91 0 526

Note 14.C - PROVISION FOR RISKS AND CHARGES: TIMING CASH FLOWS

Timing cash flows

Nature

� Note 15 - Deferred tax liabilities

The account amounts to Euro 1,545 thousand (Euro 1,701 thousand at December 31,

2013).



265

Euro thousands

December 31, 2013 1,701

Provisions 44

Utilisations (118)

Change in Equity (82)

December 31, 2014 1,545


Note 15.A CHANGES IN DEFERRED TAX

LIABILITIES

The nature of the deferred tax liabilities and the relative effects on the Balance Sheet,

Income Statement and Equity are illustrated in the table below.

Euro thousands 2014 2013 2014 2013 2014 2013


Intangible Assets (8) (5) (3) (1) 0 0

Property, Plant and Equipment 1,532 1,637 (105) (105) 0 0

Personnel 51 133 0 0 (110) (9)

Other (30) (64) 34 (4) 0 0

Total deferred tax liabilities 1,545 1,701 (74) (110) (110) (9)

NOTE 15.B - BREAKDOWN OF DEFERRED TAX LIABILITIES

Balance Sheet Income Statement Equity

In 2014, charges on deferred tax liabilities were recorded directly through Profit and

Loss for Euro 74 thousand and through Equity for Euro 110 thousand. The deferred tax

liabilities recorded directly to Equity relate to “Actuarial Gains/Losses” on the Post-

Employment Benefit Provision.

“Deferred Tax Liabilities” on “Property, Plant and Equipment” mainly relate to the

application of international accounting standard 17 (Leasing) to the production plant at

Rufina Scopeti (Florence); the temporary differences refer to the difference between the

leasing instalments paid and deducted until the redemption date and the net book value

of the assets.



266

The expected timeframes for the reversal of deferred tax liabilities is reported in the

table below.


Euro thousands December 31, 2014 2015 2016 2017 2018

Beyond

2018


Intangible Assets (8) (8) 0 0 0 0

Property, Plant and Equipment 1532 105 105 105 105 1,112

Personnel 51 30 21 0 0

Other (30) (30) 0 0 0 0

Total deferred tax liabilities 1,545 97 126 105 105 1,112

NOTE 15.C - REVERSAL IN YEAR OF DEFERRED TAX LIABILITIES

Expiry Date

The amount of deferred taxes that are estimated to reverse to the income statement

within 12 months at the reporting date total Euro 97 thousand.

The table below illustrates the temporary differences giving rise to deferred tax

liabilities for I.R.E.S. and I.R.A.P. purposes:

Euro thousands

I.R.E.S. I.R.A.P.

27.50% 3.90%

Intangible Assets (8) 0 (8)

Property, Plant and Equipment 1,342 190 1,532

Personnel 51 0 51

Other (30) 0 (30)

Total deferred tax liabilities 1,355 190 1,545

NOTE 15.D - REVERSAL DEFERRED TAX LIABILITIES I.R.E.S - I.R.A.P

Deferred tax liabilities relating to:Income

Tax



267

� Note 16 - Tax Liabilities

At December 31, 2014 current tax payables amount to Euro 305 thousand (Euro 0

thousand at December 31, 2013) relating to the tax provision for the year. Reference

should be made to “Note 6 - Current Tax Assets”.

� Note 17 - Trade and Other Payables

The breakdown of “Trade and Other Payables” of F.I.L.A. S.p.A.is reported below:

Note 17.A - TRADE AND OTHER PAYABLES


Trade Payables 18,801 12,999 5,802

Tax Payables 311 358 (47)

Other Payables 1,758 1,031 727

Third parties 20,870 14,388 6,482

Trade payables - Subsidiaries 1,965 564 1,401

Subsidiaries 1,965 564 1,401

Trade Payables - Associates 22 0 22

Total Amount 22,857 14,952 7,905

“Trade and Other Payables” at December 31, 2014 amount to Euro 22,857 thousand


The increase in “Trade Payables” (Euro 7,905 thousand) relates to a temporary delay in

the payment of amounts due in December to the following year.

The breakdown of trade payables by region is reported below:



268

Note 17.B - TRADE PAYABLES THIRD PARTIES - REGIONAL BREAKDOWN


Europe 18,296 12,832 5,464

North America 5 0 6

Central/South America 12 12 0

Rest of the World 488 155 333

Third parties 18,801 12,999 5,802

The carrying amount of trade payables at the reporting date approximates their “fair

value”.

The trade payables reported above are due within 12 months.

Trade payables from subsidiaries at December 31, 2014 amount to Euro 1,965 thousand

(Euro 564 thousand at December 31, 2013). Payables to associates amount to Euro 22

thousand and refer to commercial transactions with Writefine Products Private Ltd.

(India).

The movement is related to business levels in the period.

“Tax Payables” to third parties includes taxes other than corporation tax. Other tax

payables refer to consultant withholding taxes.

Current tax payables amount to Euro 311 thousand at December 31, 2014 (Euro 358


“Other Payables” amount to Euro 1,758 thousand at December 31, 2014 (Euro 1,031


� social security contributions to be paid amount to Euro 489

thousand (Euro 480 thousand at December 31, 2013);

� employee payables for remuneration amount to Euro 1,036 thousand (Euro 337


The book value of “Other Payables”, “Tax Payables” and “Accrued Liabilities and

Deferred Income” at the reporting date approximate their fair value.



269

� Note 18 – Operating Revenue

Operating revenue in 2014 amounted to Euro 77,232 thousand (Euro 71,806 thousand

in 2013).

Revenue was broken down as follows:

Note 18.A REVENUE

Euro thousandsFY 2014 FY 2013 2014 - 2013 Change

Revenue from Sales and Service 82,527 76,791 5,736

Adjustments on Sales (5,295) (4,985) (310)

Returns on Sales (564) (679) 115

Discounts, Allowances and Premiums (4,731) (4,306) (425)

Total amount 77,232 71,806 5,426

The breakdown of revenue by end customer location is reported in the following table:

Note 18.B REVENUE BY REGIONAL BREAKDOWN

Euro thousands FY 2014 FY 2013 Change 2014 - 2013

Europe 71,821 66,775 5,046

North America 877 815 62

Central/South America 2,287 2,126 161

Rest of the World 2,248 2,090 158

Total amount 77,232 71,806 5,426



270

� Note 19 – Other Revenue and Income

The account other income relates to ordinary operations and does not include the sale of

goods and provision of services.

“Other Revenue and Income” in 2014 amounted to Euro 1,745 thousand (Euro 1,351

thousand in 2013).

Note 19 – OTHER REVENUE AND INCOME


Gains on Sale of Property, Plant and Equipment 35 0 35

Unrealised Exchange Gains on Commercial Transactions 166 1 165

Realised Exchange Gains on Commercial Transactions 171 127 44

Other Revenue and Income 1,373 1,223 150

Total amount 1,745 1,351 394

“Other Revenues and Income” (Euro 1,373 thousand) mainly include:

� recharging for services and consultants by F.I.L.A. S.p.A. on behalf of the

Mexican subsidiary (Euro 177 thousand), the French subsidiary (Euro 165

thousand), the American subsidiary (Euro 156 thousand), the Chinese subsidiary

(Euro 131 thousand), the German subsidiary (Euro 113 thousand), the Spanish

subsidiary (Euro 45 thousand), the Chilean subsidiary (Euro 33 thousand), the

UK subsidiary (Euro 33 thousand), the Brazilian subsidiary (Euro 17 thousand),

the Turkish subsidiary (Euro 16 thousand) and the Scandinavian subsidiary

(Euro 11 thousand);

� recharging of costs to subsidiaries for sureties granted by the parent company

F.I.L.A. S.p.A. in favour of Lyra KG (Germany - Euro 106 thousand), FILA

Stationary and Office Equipment Industry Ltd. Co. (Turkey - Euro 12 thousand)

and Licyn Mercantil Industrial Ltda (Brazil - Euro 15 thousand), to guarantee of

the credit lines undertaken with Unicredito Italiano S.p.A. and Banca Nazionale

del Lavoro;



271

� recharging of costs to subsidiaries to cover insurance guarantees by F.I.L.A.

S.p.A. on behalf of the French subsidiary (Euro 46 thousand), German

subsidiary (Euro 33 thousand), Spanish subsidiary (Euro 8 thousand,

Scandinavian subsidiary (Euro 5 thousand) and the Brazilian subsidiary (Euro 5

thousand) .

� Note 20 - 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.


Note 20 - COSTS FOR RAW MATERIALS, ANCILLARY, CONSUMABLES AND GOODS


Raw materials, Ancillary, Consumables and Goods (32,557) (27,210) (5,347)

Shipping Expenses on Purchases (1,880) (1,127) (753)

Packaging (201) (191) (10)

Other Accessory Charges on Purchases (3,214) (2,706) (508)

Total amount (37,852) (31,234) (6,618)

The change in the “Cost of Raw Materials, Ancillaries, Consumables and Goods”

relates to the significant increase in “Operating Revenues” in the year and the provision

of adequate inventories for future sales.

The increase in “Transport for Purchases” on 2013 (Euro 753 thousand) is in line with

the movements to the account “Purchases of Raw Materials, Ancillary, Consumables

and Goods”.

“Other Accessory Charges and Other Raw Material, Consumable and Goods

Purchases” include all accessory charges concerning purchases made, such as

outsourcing and consortium contributions.



272

The increases in inventories in 2014 totalled Euro 1,939 thousand (decrease in 2013 of

Euro 4,999 thousand), of which:

• increase of “Raw Materials, Ancillary, Consumables and Goods” for Euro 422

thousand (decrease of Euro 353 thousand in 2013);

• increase in “Contract Work in Progress and Semi-Finished products” of Euro

847 thousand (decrease of Euro 768 thousand in 2013);

• increase in “Finished Products” of Euro 670 thousand (decrease of Euro 3.878

thousand in 2013).

� Note 21 - Service Costs and Rent, Leases and Similar Costs

“Service Costs and Rent, Leases and Similar Costs” amounted in 2014 to Euro 22,128

thousand (Euro 17,792 thousand in 2013).

Services costs are broken down as follows:

Note 21 - SERVICE COSTS AND RENT, LEASES AND SIMILAR COSTS


Sundry services (3,361) (3,127) (234)

Transport (3,527) (3,481) (46)

Maintenance (415) (270) (145)

Utilities (1,309) (1,095) (214)

Consulting (4,654) (2,027) (2,627)

Directors and Statutory Auditors Fees (2,519) (1,958) (561)

Advertising, Proms., Shows & Fairs (1,204) (928) (276)

Cleaning (80) (70) (10)

Bank Charges (401) (466) 65

Agents (1,958) (1,836) (122)

Sales representatives (434) (378) (56)

Sales Commissions (685) (717) 32

Insurance (266) (256) (10)

Other Service Costs (212) (102) (110)

Hire Charges (362) (363) 1

Rental (212) (204) (8)

Operating Leases (126) (78) (48)

Royalties and Patents (403) (436) 33

Total amount (22,128) (17,792) (4,336)



273

The most significant increases relate to consultancy costs incurred for projects of a non-

recurring nature, such as the acquisition of the English Group Daler Rowney in 2014

but not more realized and advertising and promotion costs to support sales in 2014.

“Operating Leases” amount to Euro 126 thousand, concerning operating leases

undertaken by F.I.L.A. S.p.A. for company motor vehicles. Operating lease instalments

to be paid in the following year amount to Euro 71 thousand and to be paid in the next 5

years amount to Euro 136 thousand.

� Note 22 – Other Costs

“Other Costs” in 2014 totalled Euro 357 thousand (Euro 410 thousand in 2013).

Note 22 – OTHER COSTS


Unrealised Exchange Losses on Commercial Transactions (10) (45) 35

Realised Exchange Losses on Commercial Transactions (125) (213) 88

Other Operating Charges (222) (152) (70)

Total amount (357) (410) 53

“Other Operating Charges” include residual costs such as:

� property taxes (Euro 76 thousand);

� association contributions (Euro 53 thousand).

� Note 23 – Labour Costs

“Labour Costs” include all costs and expenses incurred for employees.



274

These costs are broken down as follows:

Note 23.A LABOUR COSTS


Wages and Salaries (8,212) (6,867) (1,345)

Social Security Charges (2,695) (2,242) (453)

Defined benefit plan charges (531) (490) (41)

Other Personnel Expenses (238) (256) 18

Total amount (11,676) (9,855) (1,821)

Salaries and wages and relative contribution charges increased significantly compared

to the previous year due to the renewal of the collective national contract during 2014

as well as the expanded labour force, with particular reference to the skilled blue-collar

category.

At December 31, 2014, the workforce of F.I.L.A. S.p.A. was as follows:

Managers White-collar Blue-collarTotal Number

Total at 31/12/2013 6 81 129 216

Increases 0 4 29 33

Decreases 0 (4) (26) (30)

Total at 31/12/2014 6 81 132 219

Average headcount al 31-12-2014 6 81 130 217

Note 23.B PERSONNEL

Turn-over in 2014 related to normal staffing changes, which mainly involved the blue-

collar category.



275

� Note 24 – Amortisation and Depreciation

Amortisation and depreciation in 2014 and 2013 is reported below:

Note 24 – AMORTISATION AND DEPRECIATION


Depreciation of Property, Plant & Equipment (1,733) (2,076) 343

Amortisation of Intangible Assets (104) (110) 6

Total amount (1,837) (2,186) 349

-

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 25 – Financial Income

Financial income, together with the comment on the main changes on the previous year,

was as follows:

Note 25 - FINANCIAL INCOME


Investment income 2,599 3,203 (604)

Interest and Income from Group Companies 57 41 16

Interest on Bank Deposits 13 14 (1)

Other Financial Income 5 10 (5)


Total amount 2,741 3,271 (530)

“Investment Income” includes dividends distributed by the subsidiary Omyacolor S.A.

(France – Euro 878 thousand), the subsidiary F.I.L.A. Hispania S.L. (Spain – Euro 532

thousand), the subsidiary Dixon Ticonderoga Co. (U.S.A. – Euro 1,173 thousand) and

the associate Writefine Products PVT Ltd (India – Euro 16 thousand).



276

During 2013 F.I.L.A. S.p.A. received dividends from the subsidiary Omyacolor S.A.

(France – Euro 902 thousand), the subsidiary F.I.L.A. Hispania S.L. (Spain – Euro 532

thousand), the subsidiary Dixon Ticonderoga Co. (U.S.A. – Euro 1,172 thousand) and

the subsidiary Lyra KG “Johann Froescheis Lyra-Bleitstitift-Fabrik GmbH&Co-KG”

(Germany – Euro 597 thousand) for a total amount of Euro 3,203 thousand.

“Interest and Income from Group companies” mainly relates to interest recharged to the

subsidiary Fila Stationery O.O.O. (Russia – Euro 16 thousand), the subsidiary

FILALYRA GB Ltd (United Kingdom – Euro 14 thousand), the subsidiary FILA

Stationary and Office Equipment Industry Ltd. Co. (Turkey – Euro 13 thousand), the

subsidiary Industria Maimeri S.p.A. (Italy - Euro 5 thousand), the subsidiary Licyn

Mercantil Industrial Ltda (Brazil – Euro 5 thousand) and the subsidiary FILA

Cartorama S.A. (Pty) Ltd. (South Africa – Euro 4 thousand), calculated on loans

granted to the subsidiaries by F.I.L.A. S.p.A.

For further information, reference should be made to “Note 3 - Financial Assets”.

� Note 26 - Financial charges

Financial charges, together with the comment on the main changes on the previous

year, were as follows:

Note 26 - FINANCIAL CHARGES


Interest on Bank Overdrafts (185) (196) 11

Interest on Bank Loans (693) (920) 227

Other Financial Charges (396) (432) 36

Unrealised Exchange Losses on Financial Transactions 0 (4) 4

Realised Exchange Losses on Financial Transactions (11) (20) 9

Total amount (1,285) (1,572) 287

“Financial Charges” amount to Euro 1,285 thousand in 2014 (Euro 1,572 thousand in

2013) and includes interest on loans contracted by F.I.L.A. S.p.A. (Euro 693 thousand)

described in “Note 12 - “Financial Liabilities”. The decrease in “Interest Expense on



277

Bank Loans” in 2014 benefitted from the reduction in the “Euribor” compared to the

previous year.

� Note 27 - Foreign Currency Transactions

Exchange differences on financial and commercial transactions in foreign currencies in

2014 are reported below.

Euro thousands FY 2014 FY 2013

Unrealised Exchange Losses on Commercial Transactions (10) (45)

Realised Exchange Losses on Commercial Transactions (125) (213)

Unrealised Exchange Gains on Commercial Transactions 166 1

Realised Exchange Gains on Commercial Transactions 171 127

Total exchange differences on commercial transactions 202 (130)

Unrealised Exchange Gains on Financial Transactions 0 0

Realised Exchange Gains on Financial Transactions 67 3

Unrealised Exchange Losses on Financial Transactions 0 (4)

Realised Exchange Losses on Financial Transactions (11) (20)

Total exchange differences on financial transactions 56 (21)

Total net value of exchange differences 258 (151)

Note 27 - FOREIGN CURRENCY TRANSACTIONS

Exchange differences in 2014 arose from transactions in US Dollars against the Euro, in

addition to the movement in the year of assets and liabilities in foreign currencies,

following commercial and financial transactions.

� Note 28 - Income taxes

They amount to Euro 2,264 thousand in 2014 (Euro 2,003 thousand in 2013) and

concern current taxes for Euro 2,211 thousand (Euro 1,723 thousand in 2013) and a net

deferred tax charge of Euro 53 thousand (Euro 280 thousand in 2013).



278

� Note 28A - Current Income Taxes

The breakdown is as follows.

Note 28.A - INCOME TAXES


Current taxes (2,211) (1,723) (488)

Total amount (2,211) (1,723) (488)

Current income taxes in 2014 refer to IRES and IRAP calculated on assessable income

in accordance with current legislation.

� Note 28.B – Deferred Taxes


Note 28.B - DEFERRED TAX INCOME AND CHARGES


Deferred Tax Assets (127) (390) 263

Deferred Tax Liabilities 74 110 (36)

Total amount (53) (280) 227

The overall tax effects in the year, compared to the previous year, are reported below.



279

Euro thousands

I.R.E.S. I.R.A.P. I.R.E.S. I.R.A.P.

Assessable Income 8,283 6,723 7,838 6,232

Tax deductions (2,786) 9,748 (3,810) 8,105

Tax non deductible 5,497 16,471 4,028 14,337

Total current income taxes (1,512) (642) (2,154) (1,108) (559) (1,667)

IRES tax credit on profits produced abroad (57) 0 (57) (56) 0 (56)

Total current income taxes (1,569) (642) (2,211) (1,164) (559) (1,723)

Deferred Tax Asset in Year on Temporary Differences (121) (6) (127) (401) 11 (390)

Deferred Tax Liability in Year on Temporary Differences 74 0 74 110 0 110

Total deferred tax income & charges (47) (6) (53) (291) 11 (280)

Total income taxes in accounts (1,616) (648) (2,264) (1,455) (548) (2,003)

Note 28.C TOTAL INCOME TAXES IN YEAR

FY 2014Total inc. tax.

FY 2013Total inc. tax.

The breakdown of current and deferred income taxes recognised to the income

statement was as follows:

Euro thousands FY 2014 FY 2013

Current Taxes (2,211) (1,723)

Current income taxes (2,211) (1,723)

Deferred Tax Charges (53) (280)

Deferred tax charges (53) (280)

Total amount (2,263) (2,003)

Note 28.D - CURRENT AND DEFERRED INCOME TAXES FOR THE YEAR

In relation to deferred tax liabilities recorded through equity, reference should be made

to “Note 15 - “Deferred Tax Liabilities”.



280

Transactions relating to atypical or unusual operations

In accordance with Consob Communication of July 28, 2006, during 2014, F.IL.LA.

S.p.A. 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 year 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 minority shareholders



281

Final Consideration

The present explanatory notes, as is the case for the entire financial statements of which

they are an integral part, provide a true and correct representation of the balance sheet

and financial position of F.I.L.A. S.p.A. and the result for the year.

The present financial statements comprise the Balance Sheet, the Statement of

Comprehensive Income, the Cash Flow Statement, the Statement of changes in

Shareholders’ Equity and the Explanatory Notes, and reflect the underlying accounting

records.



282

F.I.L.A – Fabbrica Italiana Lapis ed Affini – S.p.A.

Registered Office in Milan, Via Pozzone 5

Share Capital: Euro 3,039,654.60 fully paid-in

Tax, VAT and Milan Company’s Office Registration No: 00843550153

Milan REA No.: 396855

*************

Board of Statutory Auditors’ Report

on the separate financial statements at December 31, 2014

*************

Dear Shareholders,

during the year ended December 31, 2014, the Board of Statutory

Auditors performed the supervisory activities required by law, in

accordance with the Conduct principles for the Board of Statutory

Auditors endorsed by the Italian Accounting Profession (Consiglio

Nazionale dei Dottori Commercialisti e degli Esperti Contabili).

The audit of the financial statements, pursuant to Article 16 of

Legislative Decree No. 39/2011, was undertaken by the audit firm

KPMG S.p.A..

As part of its duties, during the year ended December 31, 2014, the


- attended the Shareholder and Board of Directors’ meetings held

during the year;

- received from the directors timely and appropriate information on

the operations undertaken, in accordance with statutory provisions.

Through attendance at Board of Directors’ meetings, the Board of

Statutory Auditors verified, inter alia, that the Executive Bodies

reported on the operations undertaken in accordance with the

powers attributed, on the operating performance and the business



283

- outlook, as well as on the most important operations, in terms of

size and nature, undertaken by the company and its subsidiaries;

- acquired appropriate information to undertake the activities in

relation to the adequacy of the organisational structure of the

Company, compliance with law and the Company By-Laws and

compliance with the principles of correct administration, through

direct investigation, obtaining information from department heads

and the exchange of information and data with the audit firm;

- supervised (in relation to our remit) on the functioning of the

internal control system and the adequacy of the administrative and

accounting system;

- verified compliance with law in relation to the formation,

presentation and preparation of the Financial Statements, drawn up

in accordance with International Financial Reporting Standards

(I.F.R.S.);

- verified that the Directors’ Report, relating to the year ended

December 31, 2014, complied with applicable legislation and was

consistent with the motions adopted by the Board of Directors, as

well as the events presented in the draft Financial Statements.

During our activities, undertaken as outlined above, no significant

matters arose to be reported to the relevant bodies. Based on our

reviews and the information received, the decisions undertaken by the

Directors are in compliance with law, the company By-Laws and

principles of correct administration, as well as consistent and

compatible with the size of the Company.

With the present “Report” we state our conclusions.

1. Considerations on the most significant economic, financial and

equity operations undertaken by the company and their compliance

with law and the company By-Laws

We received information on the most significant economic and

financial operations undertaken in the year, including by subsidiary



284

companies, ensuring that they were in conformity with law and the

company By-Laws and were not manifestly imprudent;

In relation to the major initiatives undertaken during the year,

contained in the Directors’ Report, we declare that, to the best of our

knowledge, they were undertaken in accordance with correct

administrative principles and that issues relating to potential or

possible conflicts of interest were subject to close evaluation.

Against the debt contracted with primary credit institutions, the

Company is subject to the commitments and “covenants” as outlined

in the consolidated financial statements of the F.I.L.A. Group,

prepared in accordance with international accounting standards and

which had been complied with at December 31, 2014, as illustrated in

the Directors’ Report.

1. Atypical and/or unusual transactions, including inter-company or

related party transactions

We were not informed of any atypical and/or unusual transactions,

including inter-company or related transactions.

Ordinary transactions, undertaken inter-company or with related

parties, and their principal effects on the balance sheet and income

statement are presented in the Directors’ Report. Transactions

between Group companies are principally of a commercial nature and

executed at normal market conditions. In addition, transactions of a

financial nature (inter-company loans) between the Parent Company

and the subsidiary companies are undertaken at normal market

conditions.

With reference to the transactions between the Parent Company FILA

S.p.A. and its subsidiaries, we report that there were no significant

changes in the contractual conditions which govern transactions

between the Parent Company and the subsidiaries, such as to be

presented in the present Report.



285

1. Adequacy of the information provided in the Directors’ Report in

relation to atypical and/or unusual transactions, including inter-

company and related party transactions.

The Board of Statutory Auditors report that the Directors, in their

report pursuant to Article 2428 of the Civil Code and Consob

Communication of July 28, 2006 concerning atypical and/or unusual

transactions and transactions of an extraordinary nature, as per the

previous point, did not issue any communications, given the absence

of such transactions.

2. Observations and proposals on exceptions or matters arising in the

Auditors’ Report.

The audit firm KPMG S.p.A. who were awarded, pursuant to Article

14 of Legislative Decree No. 39/2010, the audit of the financial

statements for the year ended December 31, 2014, and with which

during the year the Board of Statutory Auditors held periodic meetings

for the exchange of information, issued on March 27, 2015 their

Auditors’ Report.

The Auditors issued a clean audit opinion without any exceptions or

information drawn to the attention of the reader.

3. Presentation of any complaints pursuant to Article 2408 of the

Civil Code, of any initiatives undertaken and relative outcomes

At the present date no complaints were received from shareholders

pursuant to Article 2408 of the Civil Code.

4. Presentation of any petitions pursuant to Article 2408 of the Civil

Code, of any initiatives undertaken and relative outcomes

At the present date, the Board of Statutory Auditors had received no

petitions or other notices.

5. Conferment of other assignments to the audit firm

The audit firm, as indicated in the Report to the Separate Financial

Statements and to which reference should be made, did not receive

any further assignments or mandates by companies of the Group,



286

except for the audit of the interim financial statements (as per IAS 34)

at September 30, 2014, undertaken in relation to the operation

illustrated at point 17.

1. Conferment of assignments to parties related to the audit company

The company did not confer any such assignments (other than those

relating to the audit of the financial statements).

2. Opinions issued in accordance with law

During the year ended December 31, 2014, the Board of Statutory

Auditors did not issue any opinions, with the exception of a

favourable opinion pursuant to Article 2389, paragraph 3, of the Civil

Code.

3. Meetings of the Board of Directors, Executive Committee and the


During the year ended December 31, 2014, the following meetings

were held:

- 7 meetings of the Board of Directors with the presence of the

majority of the Board of Statutory Auditors;

- 6 meetings of the Board of Statutory Auditors.

4. Observations on compliance with the principles of correct

administration.

In relation to the administration structure and substantial compliance

with correct administration, within our remit we do not report

particular observations, as based on the verifications undertaken and

meetings with the audit firm, these matters have been complied with.

5. Observations on the adequacy of the organisational structure

The Board of Statutory Auditors, through direct observations,

investigations, requests for information and dealings with the

department heads, have acquired information upon and supervised the

adequacy of the organisational structure of the company.



287

In this regard we report that the Board of Directors did not undertake

any motions in relation to the adoption of the Ethics Code of the

Group and the Organisation, Management and Control Model of the

Company pursuant to Legislative Decree No. 231/2001,

The organisational structure – in relation to the remit of the Board of

Statutory Auditors – is considered adequate for the current operating

levels of the Company.

1. Observations on the adequacy of the internal control system, in

particular on the activities undertaken by the internal control manager

and any corrective actions undertaken and/or those to be undertaken

The internal control system, for the year ended December 31, 2014,

was adequate for the size and the current operational characteristics of

the Company.

The Internal Control Manager participated in the activities of the

Board of Statutory Auditors, providing where necessary, information

on the verifications undertaken and the results thereon.

In consideration of the continual updating and adjustment, also

according to new legislation and regulations, we consider the Internal

Control of the Company overall to be adequate and there are no

particular issues to be reported on.

2. Considerations on the adequacy of the administrative and

accounting system and the reliability of the system to correctly

represent operating events

There are no particular matters to be reported upon on the adequacy of

the administrative and accounting system and on the reliability to

correctly represent operating events.

3. Observations on the adequacy of the instructions issued by the

Company to subsidiaries

The co-ordination of the companies of the Group is ensured by the

presence of directors of the Parent Company on the boards of the main

subsidiary companies.



288

In addition, the FILA Group, relating to the Subsidiaries declares that:

• FILA S.p.A. receives on a continuous basis information and

documentation relating to the composition of the Boards of all

subsidiary companies;

• the accounting and administrative systems and the reporting in

place at the FILA Group permits an adequate exchange of

information, ensuring the Group operates in accordance with

current regulations;

• the current communication process with the audit firm, appointed

as auditor of the financial statements, in accordance with Articles

13 and 14 of Legislative Decree No. 39 of January 27, 2010, allows

for an adequate exchange of information ensuring the Group

operates in accordance with current regulations.

1. Issues arising during meetings with the auditors as per Article

2409-septies of the Civil Code

The Board of Statutory Auditors, in accordance with Article 2409-

septies of the Civil Code, held meetings with the audit firm for the

exchange of information relating to their respective activities. From

these meetings no matters arose requiring specific initiatives or further

investigation.

2. Conclusions on the supervision activities undertaken and

information on any omissions, censurable events or irregularities

recorded during the year

With reference to our activities, we report the following:

- Acquisition of treasury shares

During the year ended December 31, 2014, the Company did not

undertake transactions on treasury shares held in portfolio. Reference

should be made in this regard to the Directors’ Report relating to the

Financial Statements for the year ended December 31, 2014.

- Stock option plans



289

In this regard, the Board of Statutory Auditors reports that the

Company does not recognise additional benefits to any executives,

employees or consultants through stock options plans.

- Further information relating to the principal events in the year and

subsequent to year-end

The Board of Statutory Auditors finally recalls that within the

development plans of the Group, FILA approved with Extraordinary

Shareholders’ Motion of November 19, 2014 the adoption of a new

class of multi-voting shares, eliminating indication of the nominal

value of the share and converting part of the ordinary shares into

multi-voting shares, in addition to a change in the company By-Laws.

In addition, as outlined in detail in the “Subsequent Events” paragraph

of the Directors’ Report, FILA began the preparatory activities in

2014 to the undertaking of an agreement with Space S.p.A., an Italian

limited company acting as a SIV (Special Investment Vehicle) and a

special purpose acquisition company in accordance with Article

2.2.42, paragraph 1 of the Regulation for Markets Organised and

Managed by Borsa Italiana S.p.A., whose shares are traded on the

Investments Vehicle Segment organised and managed by Borsa

Italiana S.p.A. – SIV professional segment, reserved exclusively for

qualifying investors as defined by the applicable regulations. The

agreement provides for the merger of FILA S.p.A. into Space S.p.A.,

as approved by the Board of Directors on January 15, 2015 and the

Extraordinary Shareholders’ Meeting on February 19, 2015.

The merger of FILA S.p.A. into Space S.p.A. takes place through the

allocation to Fila shareholders of Space shares from a share capital

increase in service of the share swap, enabling in 2015 the consequent

listing on the Stock Exchange of Fila S.p.A.. The Merger assists

FILA’s growth, through the contribution of financial resources by

Space, in addition to access to the risk capital markets as a result of

the Merger into the listed Space.



290

FILA also approved with Extraordinary Shareholders’ Meeting

motion of February 19, 2015 the cancellation of 180,075 treasury

shares, without a reduction of the share capital.

1. Any proposals for Shareholders’ Meeting representation

As part of the oversight activities carried out in the year, we do not

report any observations in relation to the Financial Statements at

December 31, 2014, its approval and upon the matters within our

scope, nor in relation to the allocation of the net profit for the year, as

indicated in the Directors’ Report.


THE BOARD OF STATUTORY AUDITORS

Mr. Stefano Amoroso

Ms. Nicola Bruni



291

KPMG S.p.A. Telefono +39 02 6763 1

Revisione e organizzazione contabile Telefax +39 01 67632445

Via Vittor Pisani, 25 e-mail [email protected]

20124 MILANO MI PEC [email protected]

Auditors’ Report

To the Shareholders of

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

1 The present financial statements consist of the Balance Sheet, Statement of

Comprehensive Income, Statement of changes in Shareholders’ Equity, Cash Flow

Statement and the Explanatory Notes to the financial statements, of F.I.L.A. S.p.A. for

the year ended December 31, 2014. The responsibility to prepare the financial

statements in accordance with International Financial Reporting Standards adopted by

the European Union is that of the directors of F.I.L.A S.p.A.. Our responsibility is to

express an opinion on these financial statements based on our audit.

2 Our work was conducted in accordance with the Auditing Standards issued by the

Italian Accounting Profession (Consigli Nazionali dei Dottori Commercialisti degli

Esperti Contabili) and recommended by CONSOB. They require that we plan and

perform the audit to obtain the necessary assurance about whether the financial

statements are free of material misstatement and, taken as a whole, are presented

fairly. An audit includes examining, on a test basis, evidence supporting the amounts

and disclosures in the financial statements. An audit also includes assessing the

accounting principles used and the significant estimates made by the Directors. We

believe that our audit provides a reasonable basis for our opinion.

For the opinion on the financial statements of the prior year, presented for

comparative purposes, reference should be made to our report issued on April 7, 2014.

3 In our opinion, the financial statements of F.I.L.A. S.p.A. as of December 31, 2014

are in accordance with International Financial Reporting Standards adopted by the

European Union and give a true and fair view of the balance sheet, financial position

and of the results of F.I.L.A. S.p.A. as at that date.



292

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

Auditors’ Report

December 31, 2014

4 The responsibility for the preparation of the Directors’ Report in compliance

with applicable legislation is that of the Directors of F.I.L.A. S.p.A.. Our

responsibility is to provide an opinion on the consistency of the Directors’

Report with the financial statements, as legally required. Therefore, we have

carried out the procedures indicated in auditing principle No. 001 issued by the

Italian accounting profession and recommended by Consob. It is our opinion

that the Directors' Report is consistent with the 2014 financial statements of

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


KPMG S.p.A.

Domenico Bellini

Partner

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