pininfarina s.p.a. annual financial report 31 december … · annual financial report 31 december...

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(Translation from the Italian original which remains the definitive version)

PININFARINA S.p.A.

ANNUAL FINANCIAL REPORT

31 DECEMBER 2014

Pininfarina S.p.A. - Share capital €30,166,652 fully paid-up - Registered office in Turin, Via Bruno Buozzi 6

Tax Code and Turin Company Registration no. 00489110015

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The Board of Director approved the separate financial statements of Pininfarina S.p.A., the consolidated

financial statements as at and for the year ended 31 December 2014 and the directors’ reports thereon on

19 March 2015.

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ORDINARY SHAREHOLDERS’ MEETING

29 APRIL 2015

The shareholders are called for their ordinary meeting on first call at 11 am at the Sala “Mythos” of

Pininfarina S.p.A. in Via Nazionale 30 Cambiano (Turin) on 29 April 2015.

AGENDA

1) Approval of the separate financial statements as at and for the year ended 31 December

2014 and related resolutions .

2) Remuneration report and resolution pursuant to article 123-ter of Legislative decree no.

58/1998.

3) Appointment of the Boards of Directors, after having established the number of its members

and the related term of office. Establishing the directors’ fees. Related and consequent

resolutions.

4) Appointment of the Board of Statutory Auditors and establishing the standing statutory

auditors’ fees. Related and consequent resolutions.

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Board of Directors

Chairman * Paolo Pininfarina

Chief Executive Officer Silvio Pietro Angori

Directors Gianfranco Albertini (4) (5)

Edoardo Garrone (1) (2) (3)

Enrico Parazzini (3)

Carlo Pavesio (1)

Roberto Testore (1) (2) (3)

(1) Member of the Nomination and Remuneration Committee

(2) Member of the Control and Risk Committee

(3) Member of the Committee for Transactions with Related Parties

(4) In charge of financial reporting

(5) Responsible for the Internal Control and Risk Management System

Board of Statutory Auditors

Chairman Nicola Treves

Standing Statutory Auditors Giovanni Rayneri

Mario Montalcini

Alternate Statutory Auditors Alberto Bertagnolio Licio

Guido Giovando

Secretary to the Board of Directors Gianfranco Albertini

Independent Auditors KPMG S.p.A. *Powers Pursuant to article 22 of the bylaws, the Chairman is the parent’s legal representative vis-à-vis third parties and in court proceedings.

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CONTENTS

Directors’ report page 9

Events after the reporting date page 16

Going concern and outlook for 2015 page 24

Proposal for the allocation of the loss for the year page 25

Consolidated financial statements as at and for the year ended 31 December 2014 page 27

Notes to the consolidated financial statements page 34

Other information page 75

Disclosure required by article 149-duodecies of the Consob Issuer Regulation page 78

Statement on the consolidated financial statements pursuant to article 154-bis of Legislative decree no. 58/98

page 81

Statutory Auditors’ report on the consolidated financial statements as at and for the year ended 31 December 2014

page 82

Independent Auditors’ report

page 84

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DIRECTORS’ REPORT General considerations

The Group

2014 value of production (revenue) rose by 8.5% over the previous year, mainly thanks to the contribution of the styling activities, limited series of luxury cars, prototypes and the industrial design segment.

The rise in turnover in higher profitability segments and the sale of intellectual property rights to certain past concepts have enabled the Group to strongly improve its overall profitability. Indeed, both its EBITDA and EBIT became positive in 2014.

Net financial expense fell from €5.8 million in 2013 to €4.7 million, mainly due to a decrease in unrealised losses (€5.2 million compared to €6.5 million in 2013) arising on the measurement of the amounts due to the lending institutions at amortised cost.

The 2014 loss came to €1.3 million compared to a loss of €10.4 million for 2013 (which was also affected by the loss on the sale of the subsidiary Pininfarina Maroc Sas in December 2013).

Equity decreased mainly due to the loss for the year, from €29.4 million to €27.9 million. Net financial debt rose from €36.4 million at 31 December 2013 to €44.8 million at the reporting date. This was due to the parent’s recognition of unrealised losses during the year, which increased the amounts due to the lending institutions, and the advances paid for a tax dispute which terminated in the Group’s favour in 2015.

Bank loans and borrowings (principal) decreased from €119.3 million at the end of 2013 to €104.8 million at the reporting date.

The workforce numbered 677 at the reporting date (31 December 2013: 779, -13%).

Pininfarina S.p.A.

The 2014 key events of Pininfarina S.p.A. may be summarised as follows:

With respect to compliance with the Rescheduling Agreement between Pininfarina S.p.A. and the

lending institutions, the parent complied with the consolidated EBTDA and net financial debt

covenants in 2014. Indeed, its actual figures are considerably better than the reference parameters.

In December 2013, the parent was notified of orders for payment of tax and decisions to impose

penalties for an overall amount of €11.4 million. The orders referred to the signing of the

Rescheduling Agreement in Lugano (Switzerland) and the alleged failure to pay the related

registration tax. The parent filed appeals against the Orders and paid the assessed taxes and

interest totalling €5.6 million in advance. On 8 January 2015, the tax authorities cancelled the

above-mentioned orders as part of an internal review procedure with the related discontinuance of

the dispute, which was formally terminated on 20 January 2015.

No further progress has been made with respect to the VAT dispute originated in 2006 which, after

two levels of judgements, is pending before the Supreme Court of Cassation since Spring 2011.

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Human resources and the environment

A breakdown of group employee at the reporting date by business and geographical segments is set

out below.

Business segment

Engineering Operations Design General staff

TOTAL

2014 428 77 77 95 677

2013 466 99 102 112 779

The figures of the operations segment does not include 52 employees who were transferred to a

third party on 1 April 2011 by virtue of a business lease agreement that expired on 31 December

2013 and was renewed for another three years.

Geographical segment

Italy Germany China USA TOTAL

2014 327 342 6 2 677

2013 441 333 5 - 779

Research

Research for 2014 mainly continued on the basis of the projects launched in previous years and always focused on improving its staff’s skills in technologically advanced solutions in terms of the use of innovative materials and integration of systems/services in the electrical vehicle sector. Research activities were worth approximately €0.7 million. Pininfarina S.p.A.

In October 2011, the parent launched a redundancy programme due to discontinuation of production activities covering 127 people. On 2 December 2011, upon conclusion of negotiations with the trade unions and the Piedmont regional authorities, the parent signed an agreement, which was formalised in a special report at the Piedmont regional office on 19 December 2011. The key arrangements were the resort to the government-sponsored lay-off scheme up to 30 April 2012 and, subsequently, application for an extraordinary 24-month government-sponsored lay-off scheme due to partial discontinuation of activities. During the 24-month period, the parent would make excess personnel redundant, firstly on a non-opposition basis and then, at the end of the 24-month period, on a legal basis. Therefore, upon conclusion of the various government-sponsored lay-off schemes, the parent made redundant on a legal basis the personnel who had not been made redundant on a non-opposition basis.

Another two redundancy programmes were launched in 2014 (one in May and one in November), involving a total of 13 resources.

In 2014, there were no deaths or accidents at work causing serious or very serious injuries to registered employees, nor was the parent found liable for occupational diseases contracted by employees or former employees or mobbing. On the other hand, the parent reached out-of-court agreements covering remuneration issues with employees or former employees for financial and physiological damage (e.g., personal injuries, moral damage, hedonic damage, etc.).

With reference to investments in safety in the workplace and the environment, the parent pays utmost attention to the continuous upgrading and/or improvement of operating layouts and machinery/equipment in line with relevant legislation. Expected investments for 2015 amount to roughly €1,100,000.

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Further to the sale agreement (31 December 2009) for the Grugliasco facility, an environmental audit was carried out in 2011 that found that the hydrocarbons parameter in one small area exceeded the legal limit. The parent immediately commenced the reclamation procedures provided for by the environmental legislation. The authorities approved the characterisation plan (2012). The parent filed the risk analysis for the area involved in Summer 2012, showing the acceptability/absence of risk. A dispute commenced with the Grugliasco local authorities during their approval of the risk analysis, as they requested that the analysis be extended to the entire facility, which they erroneously believed to be “abandoned”. The parent appealed to the Piedmont regional administrative court against the request of the local authorities. With its ruling no. 382/2014, the regional administrative court rejected the appeal citing an unconvincing reason. Therefore, the parent filed an appeal with the Italian council of state against the ruling. On 18 June 2014, it filed a motion for urgency with the president of section V of the council of state in order to request that a date for the hearing for the merit be fixed. The date of the hearing is still pending.

The parent’s waste disposal and recycling environmental policies are available on its website.

Moreover, Pininfarina S.p.A. has a 2004 UNI EN ISO 14001-certifed environmental management system. A notified body checked the system’s continued compliance in the Italian facilities during 2014, finding it compliant.

2014 performance by business segment

Operations

This segment mainly involves the sale of car spare parts, expense and revenue relating to central functions and other transactions with third parties, including the lease of a business unit for the production of electric cars for the car sharing service of the Paris Municipality. It recognised value of production of €6.6 million (€9.1 million in 2013; -27.5%), accounting for 7.6% of consolidated value of production (11% in 2013). The decrease is mainly due to the fall in business lease income. This segment’s EBIT was a negative €9.1 million, compared to a negative €5.8 million in 2013. Services

This segment, comprising the design, industrial design and engineering businesses, recognised value of production of €80 million (€70.7 million in 2013; +13.1%), making up 92.4% of the consolidated figure (89% in 2013). Segment EBIT amounted to €13 million, a sharp increase from the €2.4 million operating profit for 2013.

The main activities carried out in Italy by the services segment in 2014 were:

Design

The longstanding collaboration with Ferrari for series and customised car projects continued.

Specifically, in relation to series cars, the group carried out an exterior design project for a car that

will be launched in 2016 throughout 2014 and activities are continuing in 2015.

Following the great success met by the Pininfarina Sergio concept car unveiled at the 2013 Geneva

international motor show, an important development activity for the production of “limited edition”

special cars was carried out. The presentation of the California T car at the 2014 Geneva

international motor show and the Compasso d’Oro ADI international award won by

Ferrari/Pininfarina for the F12 sedan launched at the 2012 Geneva international motor show testify

to the ongoing and successful union between Ferrari and Pininfarina.

The group assisted an important longstanding customer with the class B-A exterior/interior modelling

for a car that will be produced shortly.

Another important achievement is the new partnership with a leading European manufacturer for the

interior and exterior design of a class B car. The Group also carried out the styling of three projects

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for another important premium European company. Development of one of the projects is continuing

in 215.

Styling for longstanding customers in the Chinese market continued. In particular, the completion of

the entire design of a SUV for a leading car manufacturer is worth mentioning. The car premiered at

the 2014 Guangzhou international motor show. The Group also began to work with a Taiwanese

market leader for the exterior and interior styling of a mid-range sedan.

With regard to the Japanese market, the Group completed an interior research and styling project

for high-range car of a major international car manufacturer and the car was launched at the 2014

Paris international motor show.

Furthermore, the Group carried out special interior activities for a leading Japanese company, a

global leader in the production of electronic materials with a branch in Germany, in order to show its

technology in the automotive industry.

Styling development for various automotive projects for an Indian company continued, in addition to

the awarding of an extensive study into the interior and exterior design of a lorry cab.

The Cambiano concept car, which was presented at the 2012 Geneva international motor show,

won the Compasso d’Oro honourable mention in the ADI Design Index 2014 and the “Prize of Prizes

for Innovation” awarded by Minister Stefania Giannini.

On 7 February 2014, during the Frankfurt trade fair on environmental protection, the German Design

Council awarded a special mention in the Transportation and Public Space category as part of the

German Design Award 2014 to the BMW Pininfarina Gran Lusso Coupé, which was presented at

the 2013 Villa d’Este competition of elegance.

In the non-automotive means of transport business, the Group commenced the exterior design of an

agricultural vehicle family for a major European company. Again in the transportation design sector,

the new Eurostar e320 train was rolled out, of which Pininfarina designed the interiors and external

livery. The Ansaldobreda regional train, which grabbed the headlines due to an agreement for the

production of various units, was also designed by Pininfarina.

Industrial design

The key events for 2014 are as follows:

In January, the presentation in Dubai of the iconic project for the first prize of the “Dubai Tour” first

cycling race and, in Geneve, of the “Sergio” chronograph, the fifth project of the partnership

commenced in 2009; in March, the attendance at the “Living Design Fair” in Seoul with the “Cortile

Italia” stand designed by Pininfarina that included many of our design products, together with the

“Pininfarina Fuoriserie” luxury bike, that will be produced in a limited edition.

In April, at the Eurocucina trade fair, as part of the Milan Furniture Fair, the presentation of the

“Snaidero OLA 25 Limited Edition” project, a luxury kitchen model that will be produced in a limited

edition of 84 unique pieces to celebrate Pininfarina’s 84 years of history. In May, in Turin, the

presentation of the “Lagrange 12” project, developed in partnership with the Building Group. For the

first time in Italy, the parent collaborated in the development of the interior design of a luxury

residential complex. Again in May, in Moscow, the presentation of the OLA 25 project to a very

important market with a celebratory event at the Vetoshnyl art centre near Red Square.

In June, at the Caselle airport, the presentation of “Guido Gobino by Pininfarina” tasting point

located at the centre of the departures area of the “Sandro Pertini” airport, where it will remain for

some years; again in June, at the parent’s offices, the presentation of the “4Ever Pininfarina

Cambiano” innovative writing instrument, born of the collaboration with the Italian company Napkin.

It is an everlasting pen that allows to write indefinitely with no ink and no refill and is meeting with a

great interest from reviewers and a promising success from the e-commerce sector. In the same

month, the presentation of an event at Cusani Palace in Milan during the “Milan fashion week” for

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the new “Legacy” and “Tech” luggage and leather lines, the first fruit of the collaboration with The

Bridge, a leading company based in Florence, which is a new Pininfarina licensee in the sector.

In July, the presentation of the interior design project for the “Proximo” office complex in Warsaw, in

partnership with the real estate compay Hines; in August, the launch on the Italian market of the

Pininfarina “Sky Rider Drone” to be built in partworks, in collaboration with De Agostini Publishing.

In September, in Sao Paulo, the presentation of the first skyscraper designed by Pininfarina, which

designed both the interiors and the external architecture. The building, called “Cyrela by Pininfarina”,

will be built by Cyrela, one of the leading developers in Brazil; again in September, as part of the

“Vicenza Oro Fall 2014” trade fair, the presentation of the Barakà design by Pininfarina line, a

collection of key rings inspired by the history of Italian automobile design.

In October, in Milan, the presentation of the “Terrazza Martini by Pininfarina” interior design project

in the Italian Pavilion - EXPO Milano 2015 and, at the Mauto of Turin, as part of the “Design e

Territorio” exhibition, the unveiling of the “OttantaTre” Bovet-Pininfarina tourbillon among the 40

projects developed in Piedmont and Valle d’Aosta selected by the ADI Design Permanent

Observatory.

In November, in London, the presentation of the limited edition “Chivas 18 by Pinifarina Chapter 2

ice press”, an exclusive press that will be produced for one hundred of the most prestigious bars in

the world and used to make ice droplets with an aerodynamic form designed in the Pininfarina wind

tunnel. Again in November, in Paris, “4Ever Pininfarina Cambiano” was awarded the “Stylo de

l’année” prize by the “Le Stylographe” magazine for its best design and innovation. As mentioned

above, this writing instrument is having a considerable commercial success, overachieving any

expectations.

According to the 2014 report on project entrepreneurship, Pininfarina Extra gained five positions

from 10th to 5th place in the top 100 architecture and design companies operating in Italy.

Lastly, in December, at the “Art Basel” design exhibition in Miami, the presentation of two additional

projects in Brazil, this time in the Santa Caterina state. These interior design and exterior

architecture projects are called “Yacht House” (two twin towers, which will become Brazil’s highest

residential building) and “Vitra” (residential and commercial building). Both real estate projects will

be carried out by the local developer Pasqualotto, in the Balenario Camboriu costal area.

Engineering

The engineering activities’ consolidation and intensification process with the main customers (BMW,

FIAT Group and Mahindra) continued at a fast pace during 2014, also thanks to the satisfaction

expressed by customers during the project performance.

The Group also laid the foundations for new important development projects with Ferrari and the

FIAT Group.

Engineering activities carried out as part of German programmes and the experience gained with

the development of one-off cars and mini-series have enabled the Group to expand its partnerships

with its long-lasting customers.

The Group also continued to carry out significant activities in collaboration with its German facilities,

as these are necessary for performing new activities for the German market.

Wind tunnel services rocketed during the year, not only terms of activities but also thanks to the

acquisition of a diversified top level customer portfolio, represented by leading international

manufacturers.

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Information required by Consob (the Italian Commission for listed companies and the stock exchange) pursuant to article 114.5 of Legislative decree no. 58/98

1) The net financial debt of the Pininfarina Group, with separate classification of current and non-current items, is shown on page 21 hereof.

2) The Group has no past-due liabilities (of a commercial, financial, tax or social security nature). No actions against the Group have been filed by creditors.

3) The Group’s related party transactions are detailed on page 75 hereof.

4) The financial covenants linked to the 2014 EBITDA and net financial debt at 31 December 2014 provided for by the Rescheduling Agreement have been complied with.

5) The restructuring of the parent’s financial debt is continuing in line with the Rescheduling Agreement with the lending institutions.

6) There are presently no critical issues affecting the 2011-2018 business plan’s forecasts. However, the information disclosed in the “Going concern and outlook for 2015” section on page 24 should be considered.

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Group companies

Pininfarina S.p.A.

€’million 31.12.2014 31.12.2013 Variation

Value of production 52.8 48.0 4.8

EBIT 0.6 (7.3) 7.9

Loss for the year (3.0) (11.9) 8.9

Net financial debt (50.1) (39.2) (10.9)

Equity 28.9 32.1 (3.2)

Number of employees at the reporting date 302 419 (117)

Pininfarina Extra Group



EBIT 2.1 1.5 0.6

Profit for the year 1.5 1.0 0.5

Net financial position 3.8 3.7 0.1

Equity 5.9 5.4 0.5

Number of employees at the reporting date 27 22 5

Pininfarina Deutschland Group



EBIT 0.9 0.4 0.5

Profit for the year 0.9 0.4 0.5

Net financial position (debt) 1.0 (1.2) 2.2

Equity 20.0 19.2 0.8


Pininfarina Automotive Engineering Shanghai Co Ltd


Value of production 1.0 1.9 (0.9)

EBIT 0.3 0.8 (0.5)

Profit for the year 0.3 0.7 (0.4)

Net financial position 0.5 0.3 0.2

Equity 0.3 - 0.3


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Events after the reporting date

Tax litigation - Registration tax on 2008 deeds

On 24 December 2013, the parent was notified of 14 orders for payment of tax and decisions to

impose penalties (“Orders”), each relating to a pro rata “financial liability” recognised by Pininfarina

S.p.A. with almost all lending institutions involved in the Rescheduling Agreement signed in Lugano

(Switzerland) on 31 December 2008. In addition to the request for payment of the allegedly due

registration tax and related interest, each Order imposed a sanction amounting to 120% of the

assessed tax. The overall amount requested was €11.4 million. The parent appealed against the

Orders on 5 February 2014 (paying the assessed taxes plus interest for an overall amount of €5.6

million) to the local tax court.

On 8 January 2015, the tax authorities cancelled the Orders issued in 2013 as part of an internal

review procedure and the appeal pending before the Turin local tax court was thus terminated due

to discontinuance of the dispute on 20 January 2015.

As a result, the parent is now waiting for the tax authorities to repay the amount paid in advance in

2014.

Loan to the ultimate parent for tax litigation – Registration tax on 2008 and 2009 deeds

On 20 December 2013, the tax authorities notified Pincar S.r.l., the parent of Pininfarina S.p.A., of 13 orders for payment of taxes and decisions to impose penalties (“Orders”) for a total amount of €1,922,094.23, including interest accrued up to the Order issue date. With such Orders, the tax authorities alleged that the ultimate parent failed to pay the registration tax on certain agreements signed by Pincar and the lending institutions in Lugano (Switzerland) on 31 December 2008. The ultimate parent appealed against the Orders on 30 January 2014. Under the Rescheduling Agreement, Pininfarina agreed to directly pay or reimburse “any and all costs, taxes and related legal costs incurred by the lending institutions in connection with the drafting, negotiation, signing, execution and implementation of the financial documentation”. Based on this obligation and in order to avoid any additional outlays, the Board of Directors of Pininfarina S.p.A. resolved to grant a loan of €964,000.00 to the ultimate parent, which did not have the funds necessary to make the advance payment required by the law for appeals. The loan accrues annual interest at market rates and has a term of ten years. It can be used only for the tax purposes mentioned above and bears an acceleration clause in certain circumstances.

On 30 May 2014, the tax authorities notified Pincar S.r.l. of 14 orders for payment of taxes and decisions to impose penalties (“Orders”), for a total amount of €1,217,250.40, including interest accrued up to the Order issue date. With such Orders, the tax authorities alleged that the ultimate parent failed to pay the registration tax on certain agreements signed by Pincar and the lending institutions in Lugano (Switzerland) on 19 June and 23 December 2009. The ultimate parent appealed against the Orders on 17 July 2014. Again based on the relevant obligations, the board of directors of Pininfarina S.p.A. approved a loan of €603,000 to the ultimate parent to make the advance payment required by the law for appeals. The loan has the same terms as the previous one.

On 8 January and 13 January 2015, the tax authorities cancelled the Orders issued to Pincar S.r.l. in

2013 and 2014 as part of an internal review procedure and the appeal pending before the Turin local

tax court was thus terminated due to discontinuance of the dispute on 20 January 2015.

As a result, the ultimate parent is now waiting for the tax authorities to repay the amounts paid in

advance in order to repay the two loans to Pininfarina S.p.A..

There are no other significant events that occurred after the reporting date.

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Other information

The only group company that has approved the distribution of dividends to Pininfarina S.p.A. after the reporting date is Pininfarina Extra S.r.l. (approximately €1 million).

Report on corporate governance and ownership structure

With reference to article 89-bis.2 of the Issuer Regulation, the information on the adoption of the

codes of conduct (Report on corporate governance and ownership structure) is available in the

“Finance” section of the parent’s website (www.pininfarina.com) as well as through the other

methods provided for by current legislation.

Remuneration report

With reference to article 84-quater of the Issuer Regulation, the 2014 remuneration report will be

available in the “Finance” section of the parent’s website (www.pininfarina.com) as well as through

the other methods provided for by current legislation.

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Financial performance and financial position of the Pininfarina Group

Financial performance

Revenue rose by €15.1 million to €84.2 million from €69.1 million in 2013. The change in finished goods and work in progress became a negative €2.3 million (positive €3.3 million in the previous year). Other revenue and income decreased to €4.7 million from €7.4 million in the previous year and mainly comprise the business lease income for the Bairo Canavese facility, which fell following the signing of a new three-year agreement.

2014 consolidated value of production rose 8.5% to €86.6 million from €79.8 million in 2013. The increase is substantially due to larger volumes of engineering and design services provided in Italy. A breakdown of revenue by business segment is set on page 54. 2014 net gains on the sale of non-current assets totalled €0.7 million (sale of a historic car and two company cars) compared to substantially nil in 2013.

Operating expense, including changes in inventory, came to €32.3 million (€34.8 million in 2013; - 7.2%).

Value added rose by €10 million to €55 million from €45 million in the previous year.

Labour cost increased to €47.9 million (€47.5million in 2013; +0.8%).

EBITDA is a very positive €7 million, compared to the €2.6 million gross operating loss for 2013. The improvement is mainly due to the parent.

Amortisation and depreciation amounted to €3.3 million with a decrease of €0.1 million (€3.4 million for 2013). Additions to/utilisation of provisions and impairment losses came to a positive €0.3 million (compared to a positive €2.6 million in 2013). Specifically, additions were €0.2 million (€0.5 million for 2013) and utilisation €0.5 million (€3.2 million for 2013). No impairment losses were recognised in 2014 (€0.1 million in 2013).

As a result, EBIT was a positive €3.9 million (operating loss of €3.3 million in 2013).

Net financial expense fell from €5.8 million for 2013 to €4.7 million, mainly due to a decrease in unrealised losses relating to the signing of the current Rescheduling Agreement. Thanks to the Agreement, the Group recognised a gain of €44.8 million on the extinguishment of financial liabilities on 1 May 2012.

The loss before taxes came to €0.8 million for 2014, compared to €9.1 million for the previous year.

Income taxes amounted to €0.5 million (€0.1 million for 2013).

Further to the sale of the investment in the subsidiary Pininfarina Maroc SAS on 30 December 2013, the

Group reclassified its results for 2013 to the specific caption “Profit (loss) from discontinued operations”

pursuant to IFRS 5. The 2013 figure was a loss of €1.2 million.

The loss for 2014 came to €1.3 million compared to €10.4 million for 2013.

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Reclassified income statement

(€’000)

(*) Materials and services are net of utilisations of the provisions for product warranty and risks (€321 thousand and €58 thousand for 2013 and 2014, respectively). (**) Labour cost is net of utilisations of the restructuring and other provisions (€817 thousand and €1,857 thousand for 2013 and 2014, respectively). As required by Consob resolution no. DEM/6064293 of 28 July 2006, a reconciliation of the data in the consolidated financial statements with those in the reclassified schedules is provided below: - Materials and services include raw materials and components, other variable production costs, external variable

engineering services, exchange rate gains and losses and other expenses. - Amortisation and depreciation comprise amortisation of intangible assets and depreciation of property, plant and

equipment and investment property. - (Additions to)/utilisation of provisions and impairment losses include additions to/utilisation of provisions, impairment

losses and inventory write-downs. - Net financial expense comprises net financial expense and dividends.

2014 % 2013 % Variation

Revenue from sales and services 84,179 97.24 69,064 86.59 15,115

Change in inventories and contract work in progress (2,313) (2.67) 3,325 4.17 (5,638)

Other revenue and income 4,705 5.45 7,369 9.24 (2,664)

Revenue 86,571 100.00 79,758 100.00 6,813

Net gains on the sale of non-current assets 705 0.81 1 0.00 704

Materials and services (*) (31,720) (36.64) (35,295) (44.25) 3,575

Change in raw materials (622) (0.71) 494 0.62 (1,116)

Value added 54,934 63.46 44,958 56.37 9,976

Labour cost (**) (47,901) (55.33) (47,535) (59.60) (365)

EBITDA 7,033 8.12 (2,577) (3.23) 9,611

Amortisation and depreciation (3,348) (3.87) (3,392) (4.25) 44

(Additions to)/utilisation of provisions and impairment losses 261 0.30 2,634 3.30 (2,373)

EBIT 3,946 4.56 (3,335) (4.18) 7,281

Net financial expense (4,748) (5.47) (5,776) (7.24) 1,028

Share of profit (loss) of equity-accounted investees 8 0.01 (3) (0.0044) 11

Loss before taxes (794) (0.92) (9,114) (11.43) 8,320

Income taxes (469) (0.54) (112) (0.14) (357)

Loss from continuing operations (1,263) (1.46) (9,226) (11.57) 7,962

Loss from discontinued operations - - (1,161) (1.46) 1,161

Loss for the year (1,263) (1.46) (10,387) (13.02) 9,124

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Financial position

Net capital requirements at 31 December 2014 increased by €6.9 million on the previous year end, due to a reduction in net non-current assets, the larger working capital requirement and a decrease in post-employment benefits.

Specifically:

- net non-current assets totalled €63.8 million (down by €2.3 million on 31 December 2013), comprising a decrease of €0.1 million in intangible assets and a reduction of €2.2 million in property, plant and equipment and equity investments;

- working capital rose by €7.3 million to €14.2 million from €6.9 million at 31 December 2013;

- post-employment benefits decreased to €5.3 million from €7.1 million at the previous year end, following the departure of 87 people from Pininfarina S.p.A. as a result of the termination of the redundancy programme due to discontinuation of production activities.

Capital requirements were funded by:

- a €1.5 million decrease in equity, which went from €29.4 million at 31 December 2013 to €27.9 million at 31 December 2014. The decrease is mainly attributable to the loss for the year;

- the increase in net financial debt, which rose to €44.8 million from €36.4 million at 31 December 2013. The worsening is mainly due to the unrealised loss for the year that increased the carrying amount of the parent’s debt (€5.2 million) and the advances paid by the parent for a tax dispute (€5.6 million) which was cancelled as part of an internal review procedure by the tax authorities. The parent expects to recover the advances in the short term.

.

Reconciliation between the parent’s loss and equity and consolidated loss and equity

The parent’s loss and equity as at and for the year ended 31 December 2014 are reconciled with the Group’s relevant figures below.

2014 2013 31.12.2014 31.12.2013

Pininfarina S.p.A.'s separate financial statements (2,971,795) (11,924,310) 28,869,143 32,120,861

- Subsidiaries' contribution 2,701,744 2,142,225 4,715,756 3,007,403

- Goodwill of Pininfarina Extra S.r.l. - - 1,043,497 1,043,497

- Elimination of trademark licence in Germany - - (6,749,053) (6,749,053)

- Intragroup dividends (1,001,040) (601,400) - -

- Share of profit (loss) of equity-accounted investees 8,208 (3,485) 8,208 (3,485)

- Other minor - - - -

Consolidated financial statements (1,262,883) (10,386,970) 27,887,551 29,419,223

Loss for the year Equity

21

Reclassified statement of financial position

(€’000)

(*) Other liabilities include the following items: deferred tax liabilities, other financial liabilities, current tax liabilities and other liabilities.

31.12.2014 31.12.2013 Variation

Net non-current assets (A)

Net intangible assets 2,676 2,772 (96)

Net property, plant and equipment and investment property 60,845 63,008 (2,163)

Equity investments 311 303 8

Total A 63,832 66,083 (2,251)

Working capital (B)

Inventories 3,649 6,587 (2,938)

Net trade receivables and other assets 31,286 23,175 8,110

Assets held for sale - - -

Deferred tax assets 1,036 947 89

Trade payables (12,246) (15,211) 2,965

Provisions for risks and charges (847) (2,698) 1,851

Other liabilities (*) (8,674) (5,911) (2,764)

Total B 14,203 6,889 7,314

Net invested capital (C=A+B) 78,035 72,972 5,063

Post-employment benefits (D) 5,347 7,146 (1,799)

Net capital requirements (E=C-D) 72,688 65,826 6,862

Equity (F) 27,888 29,419 (1,531)

Net financial debt (G)

Non-current loans and borrowings 69,116 7,442 61,674

Net current financial (position) debt (24,316) 28,965 (53,281)

Total G 44,800 36,407 8,393

Total as in E (H=F+G) 72,688 65,826 6,862

22

Net financial debt

Net financial debt worsened by €8.4 million from €36.4 million at 31 December 2013 to €44.8 million at 31 December 2014.

The worsening is mainly due to the unrealised loss for the year that increased the carrying amount

of the parent’s debt (€5.2 million) and the advances paid by the parent for a tax dispute (€5.6 million)

which was cancelled as part of an internal review procedure by the tax authorities. The parent

expects to recover the advances in the short term.

Net financial debt

(€’000)

Cash and cash equivalents include a restricted account of €5,000,000. Reference should be made to note 12 for further

details.

Current assets held for trading include restricted assets of €2,402,940. Reference should be made to note 7 for further details. Following the lending institutions’ waiver of their rights arising from the parent’s failure to comply with the EBITDA covenant on 2 April 2014, liabilities have been reclassified in line with the due dates provided for by the Rescheduling Agreement.

31.12.2014 31.12.2013 Variation

Cash and cash equivalents 24,424 18,394 6,030

Current assets held for trading 16,359 41,952 (25,593)

Current loans and receivables - - -

Loan assets - related parties - - -

Current bank overdrafts - - -

Current finance lease liabilities (5,827) (51,992) 46,165

Current portion of bank loans and borrowings (10,640) (37,319) 26,679

Net current financial position (debt) 24,316 (28,965) 53,281

Non-current loans and receivables - third parties - - -

Non-current loans and receivables - related parties 1,770 80 1,690

Non-current held-to-maturity investments - - -

Non-current finance lease liabilities (43,547) - (43,547)

Non-current bank loans and borrowings (27,339) (7,522) (19,817)

Non-current loans and borrowings (69,116) (7,442) (61,674)

NET FINANCIAL DEBT (44,800) (36,407) (8,393)

23

Net financial debt (Consob)

(CESR recommendations no. 05-04b – EU Regulation no. 809/2004)

(€’000)

The “Net financial debt” set out above is presented in accordance with the format recommended by the Consob in Communication DEM no. 6064293 of 28 July 2006, implementing CESR (now ESMA) recommendation no. 05-04b. Because the purpose of this table is to show “Net financial debt”, assets are shown with a minus sign and liabilities with a plus sign. On the contrary, in the “Net financial debt” table provided on the previous page, assets are shown with a plus sign and liabilities with a minus sign. The reason for the difference between the amount of the “Net financial debt” on the previous page and on this page is that the latter does not include non-current loan assets. The total amount of these differences at the relevant reporting dates is shown below:

- At 31 December 2014: €1,770 thousand - At 31 December 2013: €80 thousand

31.12.2014 31.12.2013 Variation

A. Cash (24,424) (18,394) 6,030

B. Other cash equivalents - - -

C. Securities held for trading (16,359) (41,952) (25,593)

D. Total cash and cash equivalents (A.)+(B.)+(C.) (40,783) (60,346) (19,563)

E. Current loan assets - - -

F. Current bank loans and borrowings - - -

Current portion of secured bank loans 7,022 5,037 (1,985)

Current portion of unsecured bank loans 3,618 32,282 28,664

G. Current portion of non-current debt 10,640 37,319 26,679

H. Other current loans and borrowings 5,827 51,992 46,165

I. Current financial debt (F.)+(G.)+(H.) 16,467 89,311 72,844

J. Net current financial (position) debt (24,316) 28,965 53,281

Non-current portion of secured bank loans 7,322 7,522 200

Non-current portion of unsecured bank loans 20,017 - (20,017)

K. Non-current bank loans and borrowings 27,339 7,522 (19,817)

L. Bonds issued - - -

M. Other non-current loans and borrowings 43,547 - (43,547)

N. Net non-current financial debt (K.)+(L.)+(M.) 70,886 7,522 (63,364)

O. Net financial debt (J+N) 46,570 36,487 (10,083)

24

GOING CONCERN AND OUTLOOK FOR 2015

Going concern The 2014 figures show an improvement in the parent’s and Group’s operating profits and confirm the steady development achieved since 2009, when the debt was restructured for the first time. The parent has duly complied with the obligations provided for in the agreements with the lending institutions and has changed its business model, which now only envisages the provision of services, with constant focus on the containment of overheads. However, due to its reduced size, its stringent financial obligations arising from the agreements with the banks and the prolonged market crisis, the Group’s growth process has been slowed down. In the medium term, this may have a negative impact on the profits forecast in the 2011-2018 business plan, cash flows and equity. According to the outlook for 2015, it is unlikely that the Group will reach the 2015 EBITDA level required by the Rescheduling Agreement, while the covenant on the net financial position at 31 December 2015 does not pose a problem, nor does the Group’s ability to meet its financial obligations deriving from its agreements with the lending institutions. In the light of the above and in agreement with the ultimate parent, Pincar S.r.l., and the lending institutions, the Board of Directors is working on different assumptions in order to definitively secure the group, by finding the resources necessary for its growth and stabilising its cash flows with new business and commercial opportunities in the strategic sectors in which it operates. Considering all that discussed above and evaluating medium-term uncertainties, the Board of Directors reasonably expects that the Group and the parent are nonetheless able to continue as going concerns in the foreseeable future and continued to prepare the financial statements on a going concern basis. Outlook for 2015 Consolidated value of production for 2015 is expected to be in line with the 2014 figure and the EBIT is forecast to be negative. Net financial debt at the end of 2015 is expected to worsen compared to 31 December 2014, due principally to net working capital trends and the accumulated unrealised losses resulting from the measurement of financial liabilities at amortised cost.

25

PROPOSAL FOR THE ALLOCATION OF THE LOSS FOR THE YEAR

We propose the loss for the year of €2,971,795 be carried forward.

Turin, 19 March 2015

Chairman of the Board of Directors

(Paolo Pininfarina) (signed on the original)

27

PININFARINA GROUP

Consolidated financial statements as at and for the year ended 31 December 2014

28

Statement of financial position

Note 31.12.2014 31.12.2013

Land and buildings 1 45,748,122 46,976,638

Land 11,176,667 11,176,667

Buildings 26,391,504 27,261,472

Leased property 8,179,951 8,538,499

Plant and machinery 1 4,956,291 5,414,428

Machinery 155,007 172,888

Plant 4,801,284 5,241,540

Leased machinery and equipment - -

Furniture, fixtures and other assets 1 1,391,377 1,518,453

Furniture and fixtures 252,067 239,855

Hardware and software 740,918 847,911

Other assets, including vehicles 398,392 430,687

Assets under construction 1 - -

Property, plant and equipment 52,095,790 53,909,519

Investment property 2 8,748,731 9,098,558

Goodwill 3 1,043,495 1,043,495

Licences and trademarks 3 1,520,618 1,571,907

Other 3 111,656 156,590

Intangible assets 2,675,769 2,771,992

Associates 4 58,723 50,515

Joint ventures - -

Other companies 5 252,017 252,017

Equity investments 310,740 302,532

Deferred tax assets 18 1,036,457 946,970

Held-to-maturity investments - -

Loans and receivables 6 1,769,770 80,000

Third parties - -

Related parties 1,769,770 80,000

Available-for-sale financial assets - -

Non-current financial assets 1,769,770 80,000

TOTAL NON-CURRENT ASSETS 66,637,257 67,109,571

Raw materials 32,422 654,255

Work in progress - -

Finished goods 275,764 240,858

Inventories 8 308,186 895,113

Contract work in progress 9 3,340,819 5,691,494

Assets held for trading 7 16,358,515 41,952,071

Loans and receivables - -

Third parties - -

Related parties - -

Available-for-sale financial assets - -

Current financial assets 16,358,515 41,952,071

Derivatives - -

Trade receivables 10 15,892,543 16,514,442

Third parties 15,882,783 16,514,442

Related parties 9,760 -

Other assets 11 15,392,967 6,660,170

Trade receivables and other assets 31,285,510 23,174,612

Cash on hand and cash equivalents 15,850 22,670

Short-term bank deposits 24,407,933 18,371,004

Cash and cash equivalents 12 24,423,783 18,393,674

TOTAL CURRENT ASSETS 75,716,813 90,106,964

Assets held for sale - -

TOTAL ASSETS 142,354,070 157,216,535

29

Statement of financial position

Pursuant to Consob resolution no. 15519 of 27 July 2006, an ad hoc statement showing related party transactions has not been prepared as these are already shown in the financial statements schedules. As for transactions with other related parties, such as directors and statutory auditors, Other liabilities include accrued fees for the year of €58,516.

For consistency purposes, deferred income for contract work in progress in 2013 has been reclassified from “Trade payables - third parties” to “Advances for contract work in progress”.

Note 31.12.2014 31.12.2013

Share capital 13 30,150,694 30,150,694

Share premium reserve - -

Reserve for treasury shares 13 175,697 175,697

Legal reserve 13 6,033,331 6,033,331

Translation reserve 13 35,557 (17,767)

Other reserves 13 2,646,208 2,646,208

Retained earnings (losses carried forward) 13 (9,891,053) 818,030

Loss for the year 13 (1,262,883) (10,386,970)

EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT 27,887,551 29,419,223

Equity attributable to non-controlling interests - -

EQUITY 27,887,551 29,419,223

Finance lease liabilities 43,547,218 -

Other loans and borrowings 27,338,513 7,521,896 Third parties 27,338,513 7,521,896

Related parties - -

Non-current loans and borrowings 14 70,885,731 7,521,896

Deferred tax liabilities 18 2,476 -

Italian post-employment benefits 5,346,940 7,145,948

Other - -

Post-employment benefits 15 5,346,940 7,145,948

TOTAL NON-CURRENT LIABILITIES 76,235,147 14,667,844

Bank overdrafts - -

Finance lease liabilities 5,826,768 51,991,710

Other loans and borrowings 10,639,738 37,318,605 Third parties 10,639,738 37,318,605

Current loans and borrowings 14 16,466,506 89,310,315

Wages and salaries payable 2,582,299 2,092,339

Social security charges payable 1,280,181 672,927

Other 1,864,090 2,004,623

Other financial liabilities 16 5,726,570 4,769,889

Third parties 8,922,775 10,744,428


Advances for contract work in progress 3,277,786 4,466,870

Trade payables 16 12,245,601 15,211,298

Direct tax liabilities - 12,621

Other tax liabilities 958,116 623,830

Current tax liabilities 958,116 636,451

Derivatives - -

Provision for product warranty 58,650 62,611

Restructuring provision 442,615 2,299,512

Other provisions 345,323 335,564

Provisions for risks and charges 17 846,588 2,697,687

Other liabilities 16 1,987,991 503,828

TOTAL CURRENT LIABILITIES 38,231,372 113,129,468

TOTAL LIABILITIES 114,466,519 127,797,312

Liabilities associated with assets held for sale - -

TOTAL LIABILITIES AND EQUITY 142,354,070 157,216,535

30

Income statement

Note 2014

of which:

related

parties 2013

of which:

related

parties

Revenue from sales and services 19 84,178,825 1,259 69,064,459 -

Internal work capitalised - - - -

Change in inventories and contract work in progress (2,313,298) 3,325,423

Change in contract work in progress (2,305,504) 3,499,092

Change in finished goods and work in progress (7,794) (173,669)

Other revenue and income 20 4,705,116 24,000 7,368,600 20,019

Revenue 86,570,643 25,259 79,758,482 20,019

Gains on sale of non-current assets and equity investments 21 705,257 - 2,479 -

Gain on sale of equity investments - -

Raw materials and components 22 (6,798,747) (9,700,430)

Change in raw materials (621,833) 494,471

Inventory write-downs - -

Raw materials and consumables (7,420,580) - (9,205,959) -

Consumables (1,329,586) (862,364)

External maintenance (955,609) (775,530)

Other variable production costs (2,285,195) - (1,637,895) -

External variable engineering services 23 (9,888,020) (44,000) (11,422,039) -

Blue collars, white collars and managers (46,481,135) (45,924,464)

Independent contractors and temporary workers - -

Social security contributions and other post-employment benefits (1,420,142) (1,610,361)

Wages, salaries and employee benefits 24 (47,901,277) - (47,534,826) -

Depreciation of property, plant and equipment and investment property (2,696,736) (2,721,908)

Amortisation of intangible assets (650,964) (669,635)

Losses on sale of non-current assets and equity investments - (1,359)

(Additions to)/utilisation of provisions and impairment losses 25 260,662 2,633,794

Amortisation, depreciation and impairment losses (3,087,038) - (759,108) -

Net exchange rate gains (losses) 21,207 (32,312)

Other expenses 26 (12,768,543) (12,504,658)

Operating profit (loss) 3,946,454 (18,741) (3,335,834) 20,019

Net financial expense 27 (4,748,212) 76,626 (5,774,673) 1,816

Gain on the extinguishment of financial liabilities - - - -

Dividends - - - -

Share of profit (loss) of equity-accounted investees 8,208 - (3,485) -

Loss before taxes (793,550) 57,885 (9,113,994) 21,835

Income taxes 18 (469,333) - (112,384) -

Loss from continuing operations (1,262,883) 57,885 (9,226,377) 21,835

Loss from discontinued operations 28 - - (1,160,593) -

Loss for the year (1,262,883) 57,885 (10,386,970) 21,835

Of which:

- Loss for the year attributable to the owners of the parent (1,262,883) (10,386,970)

- Profit (loss) for the year attributable to non-controlling interests - -

Basic/diluted losses per share:

- Loss for the year attributable to the owners of the parent (1,262,883) (10,386,970)

- Number of ordinary shares, net 30,150,694 30,150,694

- Basic/diluted losses per share (0.04) (0.34)

31

Statement of comprehensive income

Pursuant to Consob resolution no. 15519 of 27 July 2006, the effects of related party transactions on the income statement of the Pininfarina Group are shown in the table provided above and in the “Other Information” section of the notes.

2014 2013

Loss for the year (1,262,883) (10,386,970)

Other comprehensive income (expense):

Items that will not be reclassified to profit or loss:

- Actuarial gains (losses) on defined benefit plans - IAS 19 (338,116) 2,339

- Income taxes 16,003 4,156

- Other - -

Total items of other comprehensive income (expense) that will not be

reclassified to profit or loss, net of tax effect:

Items that will or may be subsequently reclassified

to profit or loss:

- Gains (losses) from translation of financial statements of foreign operations - IAS 21 53,324 (14,791)

- Other - -

Total items of other comprehensive income (expense) that will be subsequently

reclassified to profit or loss, net of tax effect:

Total other comprehensive expense, net of tax effect (268,789) (8,296)

Comprehensive expense (1,531,672) (10,395,267)

Of which:

- Comprehensive expense attributable to the owners of the parent (1,531,672) (10,395,267)

- Comprehensive income (expense) attributable to non-controlling interests - -

Of which:

- Comprehensive expense from continuing operations (1,531,672) (9,234,675)

- Comprehensive expense from discontinued operations - (1,160,593)

(322,113) 6,495

53,324 (14,791)

32

Statement of changes in equity

31.12.2012

Comprehensive

expense

Allocation of

prior year profit

(loss) 31.12.2013

Quota capital 30,150,694 - - 30,150,694

Share premium reserve - - - -

Reserve for treasury shares 175,697 - - 175,697

Legal reserve 2,231,389 - 3,801,942 6,033,331

Translation reserve (2,976) (14,791) - (17,767)

Other reserves 2,646,208 - - 2,646,208

Retained earnings (losses carried forward) (28,330,285) 6,495 29,141,820 818,030

Profit (loss) for the year 32,943,762 (10,386,970) (32,943,762) (10,386,970)

39,814,489 (10,395,267) - 29,419,223

Equity attributable to non-controlling interests - - - -

EQUITY 39,814,489 (10,395,267) - 29,419,223

31.12.2013

Comprehensive

expense

Allocation of

prior year profit

(loss) 31.12.2014

Share capital 30,150,694 - - 30,150,694

Share premium reserve - - - -

Reserve for treasury shares 175,697 - - 175,697

Legal reserve 6,033,331 - - 6,033,331

Translation reserve (17,767) 53,324 - 35,557

Other reserves 2,646,208 - - 2,646,208

Retained earnings (losses carried forward) 818,030 (322,113) (10,386,970) (9,891,053)

Loss for the year (10,386,970) (1,262,883) 10,386,970 (1,262,883)

29,419,223 (1,531,672) - 27,887,551

Equity attributable to non-controlling interests - - - -

EQUITY 29,419,223 (1,531,672) - 27,887,551

EQUITY ATTRIBUTABLE TO THE OWNERS

OF THE PARENT

EQUITY ATTRIBUTABLE TO THE OWNERS

OF THE PARENT

33

Statement of cash flows

Pursuant to Consob resolution no. 15519 of 27 July 2006, the impact of transactions with related parties, which solely relates to transactions with the ultimate parent, Pincar S.r.l., and the associate Goodmind S.r.l., are disclosed in notes 6, 10 and 16 to the consolidated financial statements. Opening and closing net cash and cash equivalents include a restricted account of €5,000,000. Reference should be made to note 12 for further details. For consistency purposes, deferred income for contract work in progress in 2013 has been reclassified from “Trade payables and other financial liabilities” to “Other changes in working capital”.

2014 2013

Loss for the year (1.262.883) (10.386.970)

Adjustments:

- Income taxes 469.333 112.385

- Depreciation of property, plant and equipment and investment property 2.696.736 2.721.908

- Amortisation of intangible assets 650.964 669.635

- Impairment losses, provisions and change in accounting estimates (4.353.652) (3.965.133)

- Gains on the sale of non-current assets (705.257) (1.120)

- Financial expense 6.033.660 7.499.714

- Financial income (1.285.449) (1.701.723)

- (Dividends) - -

- Share of (profit) loss of equity-accounted investees (8.208) 3.485

- Profit from discontinued operations - 910.748

- Other adjustments 931.318 415.332

Total adjustments 4.429.445 6.665.231

Change in work ing capital:

- (Increase)/decrease in inventories 586.927 (274.766)

- (Increase)/decrease in contract work in progress 2.350.675 (3.505.768)

- (Increase)/decrease in trade receivables and other assets (7.747.388) 9.363.467

- Decrease in trade receivables - related parties (9.760) -

- Increase/(decrease) in trade payables, other financial liabilities and other liabilities 619.192 (1.512.596)

- Increase in trade payables - related parties 45.040 -

- Increase/(decrease) in advances for contract work in progress and deferred income(1.189.084) 1.906.536

- Other changes (137.734) 124.490

Total changes in working capital (5.482.132) 6.101.363

Gross cash flows from (used in) operating activities (2.315.570) 2.379.624

- Interest expense (832.119) (472.778)

- Income taxes (74.923) (60.071)

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (3.222.612) 1.846.775

- Purchases of non-current assets and equity investments (1.194.453) (1.547.468)

- Proceeds from the sale of non-current assets and equity investments 814.104 7.043

- Proceeds from the sale of discontinued operations, net of cash sold - 57.771

- Increase in loans and receivables - third parties - -

- Increase in loans and receivables - related parties (1.617.001) -

- Repayment of loans and receivables - third parties - -

- Repayment of loans and receivables - related parties 3.856 (27.871)

- Sale of current assets held for trading 25.593.556 8.342.087

- Interest income 277.504 747.179

- Dividends collected - -

- Other changes 56.670 60.495

CASH FLOWS FROM INVESTING ACTIVITIES 23.934.236 7.639.236 -

- Proceeds from the issue of shares - -

- Increase in finance lease liabilities and other loans and borrowings - third parties - -

- Increase in other loans and borrowings - related parties - -

- Repayment of finance lease liabilities and other loans and borrowings - third parties(14.681.515) (32.427.004)

- Repayment of other loans and borrowings - related parties - -

- Dividends paid - -

- Other changes/Other non-cash items - - -

CASH FLOWS USED IN FINANCING ACTIVITIES (14.681.515) (32.427.004)

TOTAL CASH FLOWS 6.030.109 (22.940.993) 41.334.667

Opening net cash and cash equivalents 18.393.674 41.334.667

Closing net cash and cash equivalents 24.423.783 18.393.674

Of which:

- Cash and cash equivalents 24.423.783 18.393.674

- Bank overdrafts - -

34

Notes to the consolidated financial statements GENERAL INFORMATION Foreword The core business of the Pininfarina Group (the “Group”) is based on the establishment of comprehensive collaborative relationships with carmakers. Operating as a global partner enables it to work with customers through the entire process of developing new products, including design, planning, development, industrialisation and manufacturing, or to provide support separately during any one of these phases with the utmost flexibility. Pininfarina S.p.A., the Group’s parent, is listed on the Italian Stock Exchange. Its registered office is in Via Bruno Buozzi 6, Turin. Market investors own 22.66% of its share capital, with the remaining 77.34% held by the following shareholders:

• Pincar S.r.l. 76.06%. The shares held by Pincar S.r.l. are charged with a senior pledge, without voting rights, in favour of the parent’s lending institutions;

• Segi S.r.l. 0.60%, parent of Pincar S.r.l.;

• Seglap S.s. 0.63%;

• treasury shares held by Pininfarina S.p.A. 0.05%. A list of the group companies, with their complete name and address, is provided later on. The consolidated financial statements are presented in Euros, the functional and presentation currency of the parent, where most of the activities and consolidated revenue are concentrated, and its main subsidiaries. All amounts are presented in Euros, unless stated otherwise. The Board of Directors approved the publication of these draft consolidated financial statements on 19 March 2015. The consolidated financial statements are audited by KPMG S.p.A.. Basis of presentation In accordance with IAS 1 - Presentation of Financial Statements, the consolidated financial statements formats are the same as those of the parent. They include the following schedules:

• statement of financial position, in which current and non-current assets and liabilities are classified separately;

• income statement and statement of comprehensive income, shown as two separate schedules in which costs are classified by nature;

• statement of cash flows, presented in accordance with the indirect method, as allowed by IAS 7 - Statement of Cash Flows;

• statement of changes in equity. Moreover, as required by Consob resolution no. 15519 of 28 July 2006, the Group presents the following information in separate schedules:

• net financial debt, with a breakdown of the main components and balances with related parties, is provided on page 21 of the directors’ report;

• the effects of non-recurring events or transactions, i.e., those transactions or events that are not repeated frequently in the normal course of business (pages 76 and 77).

35

related party transactions are not presented in separate schedules because they are listed as separate items in the statement of financial position, shown on pages 28 and 29.

Basis of preparation These consolidated financial statements are prepared on a going concern basis, which the directors deemed appropriate. References should be made to the “Going concern” and “Outlook for 2015” sections of the directors’ report for further details. These consolidated financial statements at 31 December 2014 comply with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and endorsed by the European Union. They are also consistent with the regulations enacted to implement article 9 of Legislative decree no. 38/2005. The term IFRS includes the International Financial Reporting Standards, the International Accounting Standards (“IAS”) and all interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”), previously called the Standing Interpretations Committee (“SIC”), endorsed by the European Commission as of the date of the Board of Directors’ meeting convened to approve the draft financial statements and listed in the applicable regulations published by the European Union as of the above-mentioned date. These consolidated financial statements are prepared in accordance with the general principle of historical cost, except for those items that, pursuant to the IFRS, shall be measured at fair value, as explained in the “Accounting policies” section. The accounting policies adopted to prepare these consolidated financial statements at 31 December 2014 are the same as those used in 2013, except as noted in the following section. Standards, amendments and interpretations applicable from 1 January 2014 The Group has applied the following new standards and amendments starting from 1 January 2014:

- IFRS 10 – Consolidated financial statements - IFRS 11 – Joint arrangements - IFRS 12 – Disclosure of interests in other entities - Revised IAS 27 – Separate financial statements - Revised IAS 28 – Investments in associates and joint ventures

The main new requirements introduced by these standards are as follows: i. IFRS 10 – Consolidated financial statements replaces SIC-12 Consolidation - Special purpose entities and parts of IAS 27 - Consolidated and separate financial statements. The new standard differs from the existing standards as it identifies the concept of control as the basis for consolidation of an entity in the parent’s consolidated financial statements. An investor controls an investee if and only if the investor has all of the following elements: a) power over the investee, i.e., the investor has existing rights that give it the ability to direct the relevant activities (the activities that significantly affect the investee’s returns) through voting rights and/or contractual agreements; b) exposure, or rights, to variable returns from its involvement with the investee (dividends, tax benefits, etc.); c) the ability to use its power over the investee to affect the amount of the investor’s returns. ii. IFRS 11 – Joint arrangements establishes that two or more parties have joint control if decisions about the relevant activities require the unanimous consent of the parties sharing control. There are two types of joint arrangements:

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• a joint venture (JV) is a joint arrangement whereby the parties have rights to the net assets of the arrangement. It is recognised using the equity method;

• a joint arrangement (JO) is an arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. The assets/revenue to which the party has rights and the liabilities/expense for which it has obligations are consolidated.

Following issue of this standard, IAS 28 - Investments in associates and joint ventures (amended in 2011) defines the requirements for application of the equity method to investments in these entities. The Group has also applied the following starting from 1 January 2014: • Amended IAS 32 – Presentation of financial instruments • Amended IAS 36 – Impairment of assets Application of these new standards and amendments has not affected the Group’s preparation of these consolidated financial statements.

New standards published but not yet adopted

Listed below are the new standards or amendments to existing standards applicable to annual periods beginning after 1 January 2014 that the Group has not adopted early in these consolidated financial statements. They will become applicable only after being endorsed by the EU. IFRS 9 - Financial instruments: Published in July 2014, it supersedes IAS 39 - Financial instruments: recognition and measurement. IFRS 9 introduces new requirements for the classification and measurement of financial instruments, including a new calculation model for impairment losses on financial assets and new general requirements for hedge accounting. Moreover, it contains recognition and derecognition requirements for financial instruments that are in line with the currently applicable IAS 39. Once endorsed by the EU, IFRS 9 will be applicable to annual periods beginning on or after 1 January 2018. Early adoption is allowed. The Group is assessing the potential effects of the application of IFRS 9 on its consolidated financial statements. IFRS 15 - Revenue from contracts with customers. This standard provides general comprehensive guidance to establish if, when and to what extent an entity shall recognise revenue. It replaces the recognition requirements set out in IAS 18 - Revenue, IAS 11 - Contract work in progress and IFRIC 13 - Customer loyalty programmes. IFRS 15 will be applicable to annual periods beginning on or after 1 January 2017. Early adoption is allowed. The Group is assessing the potential effects of the application of IFRS 15 on its consolidated financial statements The following new standards or amendments are not expected to produce significant effects on the Group’s consolidated financial statements.

• IFRS 14 - Regulatory deferral accounts.

• Agriculture: Bearer plants (amendments to IAS 16 and IAS 41)

• Accounting for acquisitions of interests in joint operations (amendments to IFRS 11).

• Clarification of acceptable methods of depreciation and amortisation (amendments to IAS 16 and IAS 38).

• Defined benefit plans: employee contributions (amendments to IAS 19).

• Annual improvements to IFRS 2010-2012 Cycle.

• Annual improvements to IFRS 2011-2013 Cycle.

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ACCOUNTING POLICIES Consolidated financial statements The consolidated financial statements include the financial statements of all subsidiaries from the date the Group acquires control until such control ceases to exist. Joint ventures (if any) and associates are measured using the equity method. Intragroup expenses, revenue, receivables, payables, gains and losses are eliminated in the consolidation process. When necessary, the accounting policies of subsidiaries, associates and joint ventures are amended to make them consistent with those of the parent. (a) Subsidiaries and business combinations A list of the companies consolidated line by line is provided below:

The reporting date of the subsidiaries is the same as that of the parent, Pininfarina S.p.A..

(b) Acquisition/sale of investments subsequent to the acquisition of control

Acquisitions and sales of investments subsequent to the acquisition of control that do not result in a loss of control are accounted for as owner transactions.

In the case of acquisitions, the difference between the consideration paid and the pro rata interest in the carrying amount of the net assets acquired is recognised in equity. In the case of sales, the resulting gain or loss is also recognised directly in equity.

If the Group loses control or significant influence, the remaining non-controlling interest is remeasured at fair value and any positive or negative difference between its carrying amount and fair value is recognised in profit or loss.

(c) Associates

Associates are listed below:

Name Registered office

Investment

% Held by

Currency

Share/quota

capital

Pininfarina Extra S.r.l. Via Bruno Buozzi 6, Turin, Italy 100% Pininfarina S.p.A. € 388,000

Pininfarina of America Corp. 1101 Brickell Ave - South Tower -

8th Floor - Miami FL USA

100% Pininfarina Extra S.r.l. USD 10,000

Pininfarina Deutschland GmbH Riedwiesenstr. 1, Leonberg,

Germany

100% Pininfarina S.p.A. € 3,100,000

mpx Entwicklung GmbH Frankfurter Ring 17, Munich,

Germany

100% Pininfarina Deutschland GmbH € 25,000

Pininfarina Automotive Engineering

(Shanghai) Co Ltd

Room 806, No. 888 Moyu (S)

Rd. Anting Town, 201805,

Jiading district, Shanghai, China

100% Pininfarina S.p.A. CNY 3,702,824

Name Registered office

Investment

% Held by

Currency

Quota

capital

Goodmind S.r.l. Via Nazionale 30, 20% Pininfarina Extra € 20,000

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(d) Other companies

Investments in other companies that are available-for-sale financial assets are measured at fair value, if feasible, and any resulting gains or losses are recognised in equity until the investments are sold. At that point, fair value gains or losses accumulated in equity are reclassified to the income statement for the reporting period.

If the investments are not listed on a regulated market and their fair value cannot be reliably determined, they are measured at cost, adjusted for any impairment losses, which cannot be reversed.

Translation of foreign currency captions

(a) Presentation currency and translation of financial statements denominated in currencies other than the Euro

The Group’s presentation currency is the Euro.

The table below lists the exchange rates used to translate financial statements denominated in functional currencies different from the presentation currency:

(b) Foreign currency assets, liabilities and transactions

Transactions carried out in currencies other than the Euro are initially translated at the exchange rate in force on the date of the transaction.

At the reporting date, monetary assets and liabilities denominated in foreign currencies are retranslated into Euros at the closing rate. All resulting exchange rate gains and losses are recognised in profit or loss, except for those stemming from foreign currency loans that hedge investments in foreign operations. Any such gains or losses, and the related tax effects, are recognised directly in equity. When the equity investment is sold, the accumulated translation differences are reclassified to profit or loss.

Non-monetary items that are carried at historical cost are translated into Euros at the exchange rate in force when the underlying transaction was initially recognised. Non-monetary items that are carried at fair value are translated into Euros at the exchange rate in force on the measurement date.

None of the group companies operate in a hyperinflationary economy.

Investment property

Property held to earn rentals or for capital appreciation are classified as investment property and measured at purchase or production cost, including any related costs and net of accumulated depreciation and impairment losses.

Property, plant and equipment

Property, plant and equipment comprise items used in production, including those held under finance lease. They are recognised at purchase or production cost, net of accumulated depreciation and impairment losses (if any), except for land, which is not depreciated.

Euro vs currency 31.12.2014 2014 31.12.2013 2013

US dollar - USD 1.21 1.32 1.38 1.33

Moroccan dirham - MAD - - 11.25 11.17

Chinese renminbi (yuan) - CNY 7.54 8.18 8.35 8.16

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The cost includes all purchase-related outlays, i.e., those incurred to bring the asset to the place and conditions necessary for its operation.

Depreciation of buildings and other generic assets is calculated on a straight-line basis, in order to allocate their residual carrying amount over their estimated useful life. Depreciation of specific equipment related to certain cars manufactured on behalf of third parties is based on production volumes, in accordance with paragraphs 50 and 60 of IAS 16 - Property, plant and equipment.

The depreciation rates applied to each asset category are set out below:

Land is recognised separately and is not depreciated but tested for impairment whenever the Group identifies indicators that the carrying amount exceeds the recoverable amount. Subsequent costs are capitalised only if it is probable that they will generate future economic benefits and their amount can be determined reliably. Should a portion be replaced, its carrying amount is derecognised. Costs that do not meet these requirements are immediately recognised in profit or loss. The carrying amount and useful life of property, plant and equipment are reviewed at each reporting date and adjusted, if necessary, prospectively pursuant to paragraphs from 32 to 38 of IAS 8 - Accounting policies, changes in accounting estimates and errors. Gains and losses on the sale, calculated as the difference between the asset’s carrying amount and sales price, are recognised in profit or loss. In these notes, impairment losses mean the losses recognised to adjust the assets’ carrying amounts to their recoverable amount.

Government grants

Government grants are recognised at fair value only if the Group is reasonably certain that they will be disbursed and has met all conditions for their collection. They are recognised as revenue in proportion to the costs incurred. As required by paragraph 17 of IAS 20 - Accounting for government grants and disclosure of government assistance, grants related to assets are recognised as deferred income and reclassified to profit or loss in line with the depreciation pattern of the related asset.

Intangible assets

Intangible assets are identifiable non-monetary assets without physical substance. They are controlled by the Group and generate measurable future economic benefits. They are recognised at cost, calculated using the same criteria as for property, plant and equipment.

(a) Goodwill

Category

Bairo and San

Giorgio facilities Other facilities

Land Indefinite Indefinite

Buildings and property under finance leases 50 33

Machinery 20 10

Plant 20 10

Leased machinery and equipment - 5

Furniture and fixtures 10 8

Hardware - 5

Other, including vehicles - 5

Useful life (years)

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Goodwill is the excess of the purchase price with respect to the acquisition-date fair value of the net assets acquired. It is not amortised, but is tested for impairment at least annually. Impairment testing allocates goodwill to the related cash-generating units, which are the smallest identifiable groups of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. If the carrying amount of the net assets of a cash-generating unit, including allocated goodwill, exceeds their recoverable amount, the identified impairment loss is firstly allocated to goodwill, up to its entire carrying amount. Any remaining impairment loss is then allocated pro rata to the carrying amount of the assets making up the cash-generating unit. Impairment losses recognised on goodwill cannot be reversed. Any negative goodwill is recognised as income in profit or loss.

(b) Software and other licences

Software and other similar licences are recognised as assets at cost, including that incur to use them. They are amortised over their estimated useful life, which ranges between three and five years. Costs incurred to maintain software programs are immediately recognised in profit or loss. Those incur to develop identifiable software that is controlled by the Group, which are very likely to produce future economic benefits exceeding the costs incurred, if any, are recognised as intangible assets and amortised over their useful life, which does not exceed three years.

(c) Research and development expenditure

Research expenditure, as defined by IAS 38 - Intangible assets, is expensed when incurred in accordance with IAS 38.54. Development expenditure is recognised as an intangible asset only if it can be measured reliably and if it is probable that the related project is likely to be successful, with reference to its technical feasibility, the availability of financial resources to complete it and its commercial penetration. Development expenditure that does not meet these requirements is expensed when incurred. This expense is never reclassified as an asset in subsequent years, if the requirements for its recognition as an asset is met after it is recognised in profit or loss. Development expenditure is amortised from when the related output is marketed over the estimated period during which it will generate economic benefits, which can never exceed five years. It is tested for impairment when the Group identifies indicators that its carrying amount exceeds its recoverable amount.The Group carries out development projects on behalf of third parties as part of both styling, engineering and car manufacturing contracts and solely designing and engineering contracts. Development expenditure incurred as part of styling and engineering sold to third parties is classified as a contractual cost under IAS 11 - Construction contracts and, accordingly, no intangible asset is recognised. Development expenditure related to styling, engineering and manufacturing contracts which give the Group a total or partial guarantee that the investment made on behalf of a customer will be recovered is classified as a financial asset under IFRIC 4 - Determining whether an arrangement contains a lease (see subsequent note), or, when the conditions for the application of this interpretation are not met, in the carrying amount of the specific equipment under property, plant and equipment.

(d) Other intangible assets

Other intangible assets separately acquired are recognised at cost. Those acquired as a result of a business combination are recognised at their acquisition-date fair value. After initial recognition, those with a finite useful life are subsequently measured at cost, adjusted for accumulated amortisation and impairment losses, whereas those with an indefinite useful life are measured at cost but not amortised. They are tested for impairment at least annually. Where possible, any changes are made prospectively pursuant to paragraphs from 32 to 38 of IAS 8 - Accounting policies, changes in accounting estimates and errors.

Impairment of non-financial assets

Intangible assets with an indefinite useful life, including goodwill, are tested for impairment at least annually and whenever there are indicators of impairment. Property, plant and equipment, investment property and intangible assets with a finite useful life are tested for impairment only if the Group identifies indicators that their carrying amount may exceed their recoverable amount. The recoverable amount is the higher of an asset’s (or cash-generating unit’s) fair value less costs to sell and its value in use, which is calculated as the present value of the future cash flows expected to be

41

derived from an asset, to be based on reasonable and supportable assumptions that represent management’s best estimate of the future economic conditions. The discount rate used reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted. This rate for the Group is the weighted average cost of capital (“WACC”).

When the carrying amount of an asset exceeds its recoverable amount, the Group recognises the difference as an impairment loss in profit or loss. If the reasons for the impairment loss no longer exist in future years, the impairment loss is reversed to the extent of the pre-impairment carrying amount, less amortisation/depreciation. Impairment losses on goodwill can never be reversed. Cash-generating units are identified in line with the Group’s organisational structure and business, by grouping those assets that are able to generate cash inflows independently, as required by IAS 36 - Impairment of assets; they are not larger than the two operating segments identified under IFRS 8 - Operating segments: 1) styling and engineering; 2) operations. In assessing the recoverable amount for impairment testing purposes, the Group makes reference to the fair value of owned real estate complexes, measured using the market valuations available at the Public Real Estate Registry Office and possibly appraisals prepared by independent experts.

Assets held for sale

Non-current assets, together with current and non-current assets included in disposal groups, whose carrying amount will be recovered through their sale rather than continuing use, are classified as held for sale. Assets held for sale and directly-associable liabilities are classified in the statement of financial position separately from the Group’s other assets and liabilities, in accordance with paragraphs from 38 to 40 of IFRS 5 - Non-current assets held for sale and discontinued operations. Assets held for sale are not amortised or depreciated and are measured at the lower of their carrying amount and fair value less costs to sell. Any difference between the carrying amount and fair value less costs to sell is recognised in profit or loss as an impairment loss. Any subsequent improvement in fair value less costs to sell is recognised as a reversal to the extent of the impairment losses previously recognised, including those recognised prior to the classification of the asset as held for sale.

Financial assets

Financial assets are recognised at the trade date, which is the date on which the Group assumes the obligation to acquire them.

In accordance with IAS 39 - Financial instruments: recognition and measurement, they are classified in the following four categories:

• financial assets at fair value through profit or loss;

• loans and receivables;

• held-to-maturity investments;

• available-for-sale financial assets. Financial assets are derecognised when the right to receive their cash flows ceases or is transferred or when the Group has substantially transferred all risks and rewards relating to the financial instrument, in addition to control thereover.

Financial assets and financial liabilities are not offset. They can be offset and the net balance is presented in the statement of financial position only when (i) the Group has a legally enforceable right to set off the recognised amounts and (ii) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

(a) Financial assets at fair value through profit or loss

This category includes:

• financial assets mainly acquired to be sold in the short term (financial assets held for trading);

• financial assets designated in this category on initial recognition, if the relevant requirements are met;

• derivatives, excluding hedges.

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They are measured at fair value with fair value gains or losses recognised in profit or loss. Financial instruments belonging to this category are classified as current assets if they are held for trading, or if they are expected to be sold within twelve months of the reporting date. The current or non-current classification depends on the group’s strategic policies about how long it intends to hold the asset and the asset’s actual marketability.

(b) Loans and receivables

This category includes non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. It mainly comprises trade receivables, including those recognised in accordance with IFRIC 4 - Determining whether an arrangement contains a lease. Loans and receivables are classified as current assets, except for those due after more than twelve months of the reporting date, which are classified as non-current assets. They are measured at amortised cost, using the effective interest method. Should the Group identify objective evidence of impairment, their carrying amount is adjusted to the present value of their estimated cash flows, discounted using their original effective interest rate. Objective evidence that a financial asset is impaired includes: (i) significant financial difficulty of the issuer or obligor, (ii) it becoming probable that the borrower will enter bankruptcy or other financial reorganisation; (iii) adverse changes in the payment status of borrowers including delayed payments. Impairment losses are recognised in profit or loss. If the reason for the impairment loss no longer exists in future years, the impairment loss is reversed to the extent of the pre-impairment carrying amount measured at amortised cost.

(c) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity.

They are initially recognised at acquisition cost, including any transaction costs. They are subsequently measured at amortised cost, using the effective interest method, adjusted for any impairment losses. Should the Group identify evidence of impairment, it applies the same criteria described above for loans and receivables.

(d) Available-for-sale financial assets

These are non-derivative financial assets that are designated either as available for sale or cannot be classified in any of the other previous categories. Available-for-sale financial assets are measured at fair value, with fair value gains or losses recognised in equity and reclassified to profit or loss only when the financial asset is actually sold or when the accumulated fair value losses are deemed to no longer be recoverable. If the fair value cannot be measured reliably, these instruments are measured at cost, adjusted for impairment losses. Impairment losses recognised on equity instruments cannot be reversed. Fair value losses that are deemed to be irrecoverable, for example due to a prolonged decline in the fair value of the financial assets, are reclassified from equity to profit or loss.

Derivatives

The Group has no derivatives in place, either for trading or hedging purposes.

Contract work in progress

The Group recognises styling and engineering contracts in accordance with IAS 11 - Construction contracts. Contract costs are recognised as incurred. Contract revenue is recognised as follows:

• if the performance of the contract cannot be estimated reliably, revenue is recognised to the extent of the incurred costs that are deemed to be recoverable;

• if the performance of the contract can be estimated reliably and a contract profit is probable, revenue is recognised over the term of the contract on an accruals basis;

• conversely, if a contract loss is probable, the loss is calculated as the difference between contract revenue and costs and is recognised in its entirety when identified.

The Group allocates contract revenue and costs to each year using the percentage of completion method set out in paragraph 25 of IAS 11 - Construction contracts. The percentage of completion is determined as the ratio of total costs incurred at the reporting date to the estimated total costs to

43

complete the contract. Progress billings are included in contract work in progress to the extent of the costs incurred. If they exceed the stage of completion, the balance is recognised as a liability under the caption “Deferred income” classified in “Trade payables - third parties”. If the stage of completion exceeds progress billings, the difference is recognised as an asset under contract work in progress.

Financial expense

In accordance with IAS 23 - Borrowing costs, borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset. Otherwise, they are recognised in profit or loss on an accruals basis.

Inventories

Inventories are recognised at the lower of cost and net realisable value, which is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. Under IAS 2 - Inventories, the cost is calculated using the FIFO (“first-in first-out”) method. The cost of finished goods and semi-finished products includes design, raw materials and direct labour costs, other direct costs and other indirect costs that can be directly allocated to the production activity based on normal production capacity. This cost does not include borrowing costs. Based on the assets’ expected future use and net realisable value, materials, finished goods, spare parts and other obsolete or slow-moving items are written down through an allowance account. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Trade receivables and other assets

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, net of impairment losses due to uncollectibility. Impairment losses are recognised if there is objective evidence that the Group is unable to collect all the amounts due at the due dates agreed with the customer. The impairment loss, calculated as the difference between the asset’s carrying amount and present value of future collections, discounted using the effective interest rate, is recognised in profit or loss.

Cash and cash equivalents

Net cash and cash equivalents include cash-in-hand, on-demand bank deposits, other investments that may be sold within three months and bank overdrafts, which are recognised in the relevant caption under current liabilities. In accordance with paragraph 8 of IAS 7 - Statement of cash flows, the cash flow for the year is equal to the change in net cash and cash equivalents.

Share capital

Ordinary shares are classified in equity. There are no other share categories. Costs directly related to the issue of ordinary shares or options are recognised in equity. If a Group company acquires the parent’s shares, or if the parent itself repurchases its own shares within the limits established by article 2357 of the Italian Civil Code, the consideration paid, net of any transaction cost, is deducted from equity attributable to the owners of the parent until when the treasury shares are cancelled, possibly assigned to employees or resold. The parent’s share capital comprises 30,166,652 ordinary shares with a unit nominal amount of €1. The parent’s shares held by the ultimate parent, Pincar S.r.l., (22,945,566 shares equal to 76.06% of the share capital) are charged with a senior pledge, without voting rights, in favour of the parent’s lending institutions.

Loan and lease liabilities

Loan and lease liabilities are initially recognised at fair value, equivalent to the cash obtained, net of any transaction costs. In accordance with IAS 39 - Financial instruments: recognition and measurement, after initial recognition, they are measured at amortised cost. The difference between the amount collected, net of any transaction costs, and the amount repayable (principal and interest) is recognised in profit or loss on an accruals basis using the effective interest method. The portion of loan and lease liabilities due within one year is recognised under current liabilities. When the Group has an unconditional right to defer payment, the portion due after one year is recognised under non-current liabilities. In accordance with paragraph 74 of IAS 1 - Presentation of Financial Statements,

44

if, at the reporting date, the Group has not complied with the loan and lease contractual provisions and the residual liability becomes fully due on demand (acceleration clause), the entire amount is reclassified to current liabilities, even when the Group has reached an agreement with its creditors for repayment at the original maturity before the publication date of the financial statements. This is because, at the reporting date, the Group does not have an unconditional right to defer payment of the liability to after twelve months.

Employee benefits

(a) Pension plans

The Pininfarina Group’s employees participate in defined contribution plans and defined benefit plans. The latter are a portion of the Italian post-employment benefits provided for by article 2120 of the Italian Civil Code and, therefore, do not comprise any plan assets. Defined contribution plans are formalised plans for post-employment benefits that require that the Group pay contributions to an insurance company or a pension fund. By doing this, the Group does not have any other legal or constructive obligation to pay additional contributions should the fund not have sufficient resources to pay all benefits accrued by employees over their current and past service periods when the benefits become due. These contributions paid in exchange for the service rendered by employees are recognised as an expense on an accruals basis. This category includes the payments made to the Cometa and Previp funds. Under defined benefit plans, the Group has a future obligation to pay the pension benefit to the employee upon termination of employment. The amount of the benefit depends on different factors, such as age, seniority and remuneration. The Group, therefore, takes on actuarial and investment risks arising from the plan. The Group calculates the present value of the plan liability and the service cost using the projected unit credit method, based on the actuarial calculation that uses demographic (mortality rate and turnover) and financial (discount rate and future salary and benefit increases) variables. The post-employment benefits of the Group’s Italian employees are classified as follows pursuant to IAS 19 - Employee Benefits:

• defined benefit plan for the portion vested prior to enactment of Finance Act (Law no. 296 of 27 December 2006) and related implementing decrees;

• defined contribution plan for the portion accrued thereafter. At the annual and half year reporting dates, the Group calculates the benefits using an actuarial valuation. The accumulated actuarial losses and gains arising from changes in estimates are recognised in profit or loss. Any curtailment or extinguishment of a plan liability is immediately recognised in profit or loss.

(b) Incentives, bonuses and profit-participation plans

The Group recognises a cost and a liability for its obligations for incentives, bonuses and profit-participation plans. The liability is recognised when the Group has a legal or constructive obligation and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

(c) Termination benefits

The Group recognises a liability and personnel expense when it is demonstrably committed to terminating the employment of an employee or group of employees before the normal retirement date or provide termination benefits as a result of an offer made in order to encourage voluntary redundancy. The Group is demonstrably committed to a termination when, and only when, it has a detailed formal plan for the termination and is without realistic possibility of withdrawal.

(d) Share-based payments

The Group has not granted benefits in the form of shares (e.g., stock options) to its employees which would trigger application of IFRS 2 - Share-based payment.

Provisions for risks and charges, contingent liabilities

The provisions for risks and charges include specific costs and losses whose existence is certain or probable but whose amount or due date is unknown at the reporting date. Provisions are recognised when all the following conditions are met: (i) the Group has a present obligation (legal or constructive) as a result of a past event; (ii) it is probable that an outflow of resources embodying

45

economic benefits will be required to settle the obligation; (iii) a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation or transfer it to third parties at the reporting date. Where the effect of the time value of money is material and the payment dates can be estimated reliably, the provision is discounted to present value. The Group recognises expected restructuring costs when a restructuring plan is formalised only if it has raised a valid expectation in those affected that it will carry out the restructuring. The liability accrued in the provisions for risks and charges are regularly adjusted for changes in estimated costs, expected timing and discount rates. Changes in estimates of provisions are recognised in the same income statement caption as the related addition. Disclosures about contingent liabilities, i.e.: (i) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; (ii) a present obligation that arises from past events, whose amount cannot be measured reliably or whose settlement will not probably require an outflow of resources embodying economic benefits are provided in the notes.

Leases

(a) Finance leases

Under IAS 17 - Leases, a lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership from the lessor to the Group (lessee). They are accounted for as follows:

(a1) Leases where the Group is the lessee

The Group enters into these leases to fund its investment in property, plant and equipment, as defined earlier. The leased asset is recognised as an item of property, plant and equipment and depreciated over the shorter of its useful life and the lease term. At the commencement of the lease term, the asset is recognised at the lower of its fair value and the present value of the minimum lease payments determined at the inception of the lease. The financial liability to the lessor is recognised as described earlier for loan and lease liabilities.

(a2) Leases where the Group is the lessor

The Group becomes a lessor when it applies IFRIC 4 - Determining whether an arrangement contains a lease, relating to IAS 17 - Leases, to certain specific plant and machinery in connection with certain design, engineering and car manufacturing contracts. IFRIC 4 applies to those arrangements that do not have the legal form of a lease, but that give the Group’s counterparty the right to use certain assets in exchange for a series of payments. This right implies that the arrangement is or contains a lease. The requirements for the application of this interpretation are as follows:

• fulfilment of the arrangement is dependent on the use of a specific asset;

• the arrangement conveys a right to use the asset;

• it is possible to assess whether an arrangement contains a lease at the inception of the arrangement;

• it is possible to separate payments for the lease from other payments. Briefly, under IFRIC 4, it is possible to identify and separate the lease from an arrangement and recognise it in accordance with IAS 17 - Leases. In this case, the Group recognises a financial asset equal to the present value of the lease payments. The difference between future collections and their present value is the interest income which is recognised in profit or loss over the lease term at a constant periodic rate of return.

(b) Operating leases

When a lease does not meet the requirements to be classified as a finance lease, it is classified as an operating lease. Lease payments, net of incentives received from the lessor, are recognised as an expense on a straight-line basis over the lease term.

Income taxes

(a) Current taxes

46

Current taxes are recognised by each group company on the basis of their estimated taxable profit using the tax rates (and tax laws) that have been enacted or substantively enacted by the reporting date, taking into account any domestic tax consolidation arrangements, applicable exemptions and tax assets.

(b) Deferred taxes

Under IAS 12 - Income taxes, deferred taxes are calculated for all temporary differences between the assets’ and liabilities’ tax bases and carrying amounts, except in two cases: (i) goodwill arising from a business combination, (ii) the initial recognition of an asset or liability in a transaction which is not a business combination and affects neither accounting profit nor taxable profit (tax loss). Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are respectively classified as non-current assets and liabilities. They are offset at individual company level if related to taxes that can be legally offset. The resulting balance, if positive, is recognised as a deferred tax asset and, if negative, as a deferred tax liability. Current and deferred taxes related to transactions directly affecting equity are recognised in equity. The Group recognises deferred tax assets to the extent that it is probable that taxable profit will be available against which the temporary difference can be utilised. The carrying amount of a deferred tax asset is reviewed at each reporting period date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Deferred taxes on undistributed profits of the group companies are recognised only if the company really intends to distribute such profits and, in any case, if there are no tax consolidation arrangements cancelling their taxation.

Revenue recognition

As required by IAS 18 - Revenue, revenue is measured at the fair value of the consideration received or receivable from the sale of goods and services, net of VAT, returns, discounts and intragroup transactions. It is recognised as follows:

(a) Sale of goods

Revenue is recognised when all the following conditions have been satisfied:

• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the Group retains neither effective nor continuing managerial involvement over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits will flow to the Group;

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

(b) Rendering of services

Revenue from services is recognised by reference to the stage of completion of the transaction when the services are rendered. Revenue is recognised when all the following conditions are satisfied:

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits will flow to the Group;

• the stage of completion of the transaction at the reporting date can be measured reliably;

• the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

Revenue from styling and engineering services on behalf of third parties are recognised based on the stage of completion.

(c) Interest, royalties and dividends

Revenue arising from the use by others of entity assets yielding interest, royalties and dividends is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of the revenue can be measured reliably. Interest is recognised using the

47

effective interest method, which is the rate that exactly discounts estimated future cash flows through the expected life of the financial instrument. Royalties are recognised on an accruals basis in accordance with the substance of the relevant agreement. Dividends are recognised when the shareholder’s right to receive payment is established.

Dividend distribution

The Group recognises a liability for dividends to be distributed when the distribution has been approved by the shareholders.

Earnings or losses per share

Basic earnings or losses per share are calculated by dividing the profit or loss for the year attributable to the owners of the parent’s ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted earnings or losses per share are derived by adjusting the weighted average number of outstanding shares for all potential ordinary shares with a dilutive effect.

Events after the reporting date

The events after the reporting date are those events, favourable and unfavourable, that occur between the reporting date (31 December for the Group) and the date when the financial statements are authorised for issue. Two types of events can be identified: (i) those that provide evidence of conditions that existed at the reporting date and (ii) those that are indicative of conditions that arose after the reporting date.

In accordance with IAS 10 - Events after the reporting period, in the first case (i) the Group adjusts the carrying amounts for the events that occurred after the reporting date and in the second case (ii) the Group does not adjust the carrying amounts, but discloses the events held significant in the notes.

Reference should be made to the directors’ report for further details.

Statement of cash flows

The statement of cash flows is presented in accordance with the indirect method allowed by IAS 7 - Statement of cash flows.

Repayment of loans and receivables recognised under IFRIC 4 - Determining whether an arrangement contains a lease, are recognised as cash flows from investing activities at the line “Repayment of loans and receivables - third parties”, in line with the definition of investment activities set out in IAS 7, with the Group’s financial position and net financial debt structures and in accordance with IAS 7.16-f.

ASSESSMENTS THAT AFFECT THE CONSOLIDATED FINANCIAL STATEMENTS

(a) Going concern

The going concern assumption is a key principle for the preparation of financial statements. When assessing whether the Group is able to continue as a going concern, the directors express their current opinion on the outcome of future events or circumstances which are, by their nature, uncertain. Any opinion about future events is based on information available when the opinion is expressed. Future events may contradict an opinion which, when it was expressed, was reasonable. Some of the elements that affect the opinion on the outcome of future events or circumstances include the size and complexity of an entity, the nature and circumstances of its business and its dependency on external factors.

(b) Additions to the provisions for risks and charges and contingent liabilities and contingent assets

Provisions are liabilities whose due date and amount are uncertain. The directors measure them based on the estimated costs to be incurred to extinguish the obligation at the reporting date.

48

Contingent liabilities and assets are presented in the financial statements in accordance with paragraphs 27 and 31, respectively, of IAS 37 - Provisions, contingent liabilities and contingent assets.

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.

Where necessary, the directors make their estimate with the assistance of their legal advisors and experts.

(c) Impairment

Investments in subsidiaries, associates and joint ventures are tested for impairment by estimating their value in use, which is usually calculated as the Group’s share of the investee’s equity derived from the consolidated financial statements plus the expected operating cash flows and the cash flow arising from its sale, net of selling costs, if it is material and can be determined reliably.

Cash flows are forecast by directors based on reasonable and supportable assumptions that represent their best estimate of the future economic conditions.

The discount rate used reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted.

Non-financial assets that are comprised in cash-generating units are tested for impairment on the basis of the expected future profits, whose estimate depends on a number of factors not wholly within the control of the Group.

Property is tested for impairment by comparing its carrying amount to its fair value, measured using the market valuations available at the Public Real Estate Registry Office and possibly appraisals prepared by independent experts engaged by the Board of Directors.

(d) Fair value measurement and hierarchy for financial instruments

Pursuant to IFRS 7 – Financial Instruments: Disclosures, the classification of financial instruments at fair value shall be based on the quality of the inputs used for measurement purposes. The IFRS 7 classification is based on the following fair value hierarchy:

• Level 1: fair value is determined based on prices quoted on an active market for identical assets or liabilities. This category includes financial assets classified as “held for trading”, which are mainly government bonds and high-rating bonds.

• Level 2: fair value is determined based on inputs that, while different from the quoted prices used in Level 1, can be observed either directly or indirectly. These consolidated financial statements do not present any financial instruments of this type.

• Level 3: fair value is determined based on valuation models, the input of which is not based on observable market data. These financial statements do not present any financial instruments of this type.

(e) Current and deferred taxes

Current taxes are calculated on the basis of a best estimate of the tax expense for the year, based on tax rates (and tax laws) that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are measured on the basis of the parent’s and Group’s expectations on how the carrying amount of their assets and liabilities will be recovered/extinguished, subject to the probability that they will earn future taxable profit. Deferred

49

tax assets and liabilities are measured on the basis of tax rates that are expected to be applicable when the assets will be realised or the liabilities will be extinguished, therefore based on tax rates or changes to tax laws that have been enacted by the reporting date.

(f) Italian post-employment benefits

Following the supplementary pension reform, the portion of Italian post-employment benefits vested before 1 January 2007 is considered to be a defined benefit under IAS 19 - Employee Benefits. Under defined benefit plans, the amount of the benefit due to the employee upon termination of employment depends on different factors, such as age, seniority and remuneration. Despite being prudently estimated and based on internal historical figures, these estimated parameters may be subject to change.

The directors estimated the post-employment benefit obligation assisted by an independent expert included in the Italian Actuary Register.

TYPES OF FINANCIAL INSTRUMENTS AND FAIR VALUE HIERARCHY The financial instruments held by the Group include:

• cash and cash equivalents;

• financial assets held for trading;

• non-current loan liabilities and finance lease liabilities;

• trade receivables and payables and loans and receivables - related parties. Financial assets held for trading mainly consist of government bonds, bonds and other financial assets, mostly traded in regulated markets, with a low risk profile, held because they are readily saleable and provide principal protection. The Group has no derivatives in place, either for speculative or cash flow/fair value hedging purposes.

As required by IFRS 7, the table below lists the types of financial instruments included in the consolidated financial statements and shows the measurement criteria adopted:

In addition, net cash and cash equivalents are measured at fair value which usually equals their nominal amount. Pursuant to IFRS 7 – Financial Instruments: Disclosures, the classification of financial instruments at fair value shall be based on the quality of the inputs used for measurement purposes. The IFRS 7 classification is based on the following fair value hierarchy:

• Level 1: fair value is determined based on prices quoted on an active market for identical assets or liabilities. This category includes financial assets classified as “held for trading”, which are mainly government bonds and high-rating bonds.

Fair value

hierarchy

Financial

instruments

at amortised

cost

Equity

investments

measured at

cost

Carrying

amount at

31.12.2014

Carrying

amount at

31.12.2013

profit or

loss

equity

Assets:

Equity investments in other companies - - 252,017 252,017 252,017

Loans and receivables - - 1,769,770 - 1,769,770 80,000

Assets held for trading 16,358,515 - Level 1 - - 16,358,515 41,952,071

Trade receivables and other assets - - 31,285,510 - 31,285,510 23,174,612

Liabilities:

Finance lease liabilities - - 49,373,986 - 49,373,986 51,991,710

Other loans and borrowings - - 37,978,251 - 37,978,251 44,840,501

Trade payables and other liabilities - - 16,097,681 - 16,097,681 17,719,749

Financial instruments

at fair value through:

50

• Level 2: fair value is determined based on inputs that, while different from the quoted prices used in Level 1, can be observed either directly or indirectly. These consolidated financial statements do not present any financial instruments of this type.

• Level 3: fair value is determined based on valuation models, the input of which is not based on observable market data. These financial statements do not present any financial instruments of this type.

FINANCIAL RISK MANAGEMENT Financial risk factors, as identified in IFRS 7 – Financial Instruments: Disclosures, are described below:

• Market risk: the risk that the fair value or the future cash flows of a financial instrument could fluctuate as a result of changes in market prices. Market risk includes the following other types of risk: currency risk, interest rate risk and price risk.

• Currency risk: the risk that the fair value or the future cash flows of a financial instrument could fluctuate as a result of changes in exchange rates.

• Interest rate risk: the risk that the fair value or the future cash flows of a financial instrument could fluctuate as a result of changes in interest rates.

• Price risk: the risk that the fair value or the future cash flows of a financial instrument could fluctuate as a result of changes in market prices (other than changes covered by the interest rate and currency risks), irrespective as to whether such fluctuations are determined by factors specific to the financial instrument or its issuer or by factors that affect all similar market-traded financial instruments.

• Credit risk: the risk that one of the parties causes the other party to incur a financial loss by failing to fulfil an obligation.

• Liquidity risk: the risk that an entity may be unable to fulfil obligations associated with financial liabilities.

(a) Currency risk The Group entered into most of its financial instruments in Euros, which is its functional and presentation currency. Although it operates in an international environment, it has a limited exposure to fluctuations in the exchange rates of the following currencies against the Euro: US dollar (USD), and Chinese Yuan (CNY). (b) Interest rate risk The Rescheduling Agreement signed by Pininfarina S.p.A. with the lending institutions (BRE, Intesa Sanpaolo, BNL, Italease, Unicredit, BP, MPS, UBI Leasing, Mediocredito Italiano S.p.A. – formerly Leasint, MPS Leasing, Selmabipiemme, Unicredit Leasing, BNP Lease and Release), effective from 1 May 2012 to 31 December 2018, defined a fixed contractual interest rate of 0.25% per annum, based on a year of 360 days, applicable to the rescheduled facilities, leases and operating lines over the entire term of the Agreement. As a result, the Group is only marginally exposed to the interest rate risk on a loan from Banca Nazionale del Lavoro (formerly Fortis Bank), which is not included in the above-mentioned Rescheduling Agreement and accrues interest at the six-month Euribor, plus a spread of 0.9%, on the outstanding balance of €7 million at 31 December 2014. Moreover, it is exposed in connection with a loan provided by Volksbank Region Leonberg to Pininfarina Deutschland GmbH, which accrues interest at the three-month Euribor plus a spread of 0.55% on the outstanding balance of €0.3 million. Interest on the short-term operating lines is computed at a fixed rate ranging between 5.26% and 6.75%, with regular accrual and payment in arrears at the end of each utilisation period. A breakdown of the Group’s financial debt by fixed and variable interest rates at 31 December 2014 is as follows:

51

Due to the new structure of the interest rates on medium to long-term financing that, at variable rates, accounts for 8% of total indebtedness, the Group has not performed a sensitivity analysis. (c) Price risk Because the Group exited the manufacturing sector and primarily operates within the Eurozone, its exposure to the risk of fluctuations in commodity prices is currently immaterial. Current assets held for trading, which totalled €16.4 million at 31 December 2014, are measured at fair value. As they mainly consist of government bonds, bonds and other financial assets held because they are readily saleable and provide principal protection, most of which are traded in regulated markets and have low risk profiles and high ratings, the price risk presented by these assets is deemed to be limited. A breakdown of these assets by nature is provided below:

(d) Credit risk

Styling and engineering contracts, which are the Group’s primary revenue source, are agreed with

highly rated customers located both inside and outside the European Union. In order to minimise the

credit risk from non-EU customers, the Group seeks to align both progress billings and their

collection with the relevant contract’s stage of completion. There is no significant credit

concentration with individual customers.

The Group did not carry out transactions involving the derecognition of financial assets, such as the factoring of trade receivables without recourse.

Financial transactions are carried out exclusively with financial institutions whose reliability is beyond

question. (e) Liquidity risk The effects of the Rescheduling Agreement, effective from 1 May 2012 to 31 December 2018, are summarised as follows:

- it rescheduled term financing and finance leases totalling €182.5 million and operating lines amounting to €18 million to 2018;

31.12.2014 % 31.12.2013 %

- Fixed rate 80,030,341 92% 84,273,406 87%

- Variable rate 7,321,896 8% 12,558,805 13%

Gross financial debt 87,352,237 100% 96,832,211 100%

31.12.2014 % 31.12.2013 %

Italian government bonds 6,316,720 38.61 15,253,327 36.36

Foreign government or government-guaranteed bonds - - 4,287,860 10.22

Supranational securities - - 4,483,452 10.69

Bank and insurance bonds 3,982,267 24.34 8,934,391 21.30

Other bonds 2,999,316 18.33 5,425,450 12.93

Bond funds 3,060,212 18.72 3,567,591 8.50

Assets held for trading 16,358,515 100.00 41,952,071 100.00

52

- it led to the adoption of a fixed interest rate of 0.25% per annum, based on a year of 360 days, for term financing, finance leases and rescheduled operating lines;

- it established mandatory and voluntary early repayments upon the occurrence of specific

events, including the sale of certain assets and the generation of cash flows in excess of those forecast in the 2011-2018 business plan.

The cash flows of the above-mentioned Agreement were determined based on the figures forecast in the 2011-2018 business plan, which was prepared by the Board of Directors with the support of Roland Berger and was approved on 20 April 2012. Consequently, over the medium to long term, the liquidity risk is directly correlated to the achievement of the business plan targets. A breakdown of the contractual amount of the Group’s financial debt is set out below.

Following the lending institutions’ waiver of their rights arising from the Group’s failure to comply with

the 2013 EBITDA covenant on 2 April 2014, liabilities have been reclassified in line with the due

dates provided for by the Rescheduling Agreement. The Group holds net cash and cash equivalents and assets held for trading totalling €40.8 million, including €7.4 million which is restricted (of which, €5 million up until 26 November 2016 and €2.4 million up until 31 January 2015), as explained in notes 7 and 12. Consequently, the Group is not exposed to liquidity risk in the foreseeable future.

(f) Risk of default and debt covenants This risk refers to the possibility that, in addition to the Rescheduling Agreement, effective as of 1 May 2012, the Group’s leases and financing agreements could contain acceleration clauses triggered by certain events, thereby creating a liquidity risk. The Rescheduling Agreement, effective as of 1 May 2012, introduced the following financial covenants:

Compliance with the covenants is checked on each Verification Date, based on the most recent

annual consolidated financial statements.

As a result of the tax disputes involving the parent and the ultimate parent, Pincar S.r.l. (see related

comments in the Events after the reporting date section of the 2013 annual financial report and in

the interim financial report at 30 June 2014), the parent had to pay €7.2 million in advance to the tax

authorities (paying €5.6 million directly and the rest through the loans to the ultimate parent, Pincar

S.r.l.), pending the outcome of the litigation.

Following the agreements reached with the lending institutions, the above amount will be added to

the figures provided for by the current Rescheduling Agreement and shown in the above table for

the purposes of the calculation of the annual consolidated net financial debt starting from 2014 and

until the tax litigation procedure is completed.

The 2014 financial covenants have been complied with.

Carrying

amount

31.12.2014

Contractual

cash flows

Of which:

due within one

year

Of which:

due from one to

five years

Of which:

due after five

years

Term financing 30,956,355 37,770,207 3,617,842 34,152,365 -

Finance lease liabilities 49,373,986 60,348,129 5,826,768 54,521,361 -

BNL S.p.A., formerly Fortis Bank 7,021,896 7,021,896 7,021,896 - -

Leases and financing 87,352,237 105,140,232 16,466,506 88,673,726 -

31.12.2012 31.12.2013 31.12.2014 31.12.2015 31.12.2016 31.12.2017 31.12.2018

Net financial debt < than: 74,100,000 55,050,000 57,400,000 51,500,000 41,950,000 24,250,000 30,900,000

EBITDA > than: n.a. 1,250,000 4,750,000 7,200,000 9,550,000 5,300,000 6,650,000

53

The definitions of net financial debt, liquidity, gross operating profit (loss) and financial expense are

set out below:

“Financial debt” with reference to the Pininfarina Group’s consolidated figures, means any debt

relating to:

(i) loans and borrowings of any type and form;

(ii) bonds and credit instruments issued in any form and similar instruments;

(iii) finance leases;

(iv) transfers of loans and receivables (with and/or without recourse) including as part of

factoring, securitisation and discounting transactions;

(v) payment of the price of any asset deferred to more than 180 days;

(vi) derivative transactions;

(vii) any guarantee or obligation of any type (presented or that may be presented in the

memorandum and contingency accounts) which gives or may give rise to a cash outflow;

(viii) any counter guarantee or hold harmless guarantee given, or recourse or compensation

obligation, in relation to guarantees, bonds, credit letters or other similar instruments issued by

a bank, financial intermediary, insurance company or other party; or

(ix) any guarantee, hold harmless guarantee or similar obligation in relation to any of the items set

out from point (i) to point (viii).

“Net financial debt” with reference to the Pininfarina Group’s consolidated figures, means:

(i) financial debt,

(ii) less liquidity.

“Liquidity” includes all amounts presented as “Cash and cash equivalents”, “Assets held for

trading”, “Available-for-sale financial assets” and “Current held-to-maturity investments” in the

statement of financial position, to the extent of the amounts that are not subject to restrictions and

that are cash, government bonds, other listed bonds with a rating not lower than A or other short-

term temporary liquidity investment instruments (e.g., monetary funds), net of bank overdrafts

(including operating lines).

“Gross operating profit (loss) (EBITDA)”: with reference to the Pininfarina Group’s consolidated

financial statements, means:

(i) the income statement caption “Operating profit (loss)”;

plus:

(ii) to the extent that they have been excluded from the calculation of the operating profit (loss): (I)

amortisation of intangible assets, (II) Depreciation of property, plant and equipment and

investment property, (III) other impairment losses on non-current assets, (IV) impairment

losses on current loans and receivables and cash and cash equivalents, (V) provisions for

risks, (VII) other provisions, (VII) non-recurring costs, including, without limitation, losses on

the sale of property, plant and equipment, investment property and intangible assets, (VIII)

financial expense and (IX) tax expense;

less:

(iii) to the extent they have been included in the calculation of operating profit (loss): (I) non-

recurring income, including, without limitation, gains on the sale of property, plant and

equipment, investment property and intangible assets, but excluding any income relating to the

company’s ordinary production and sales activities, which are never considered non-recurring,

and (II) financial income.

“Financial expense” with reference to the Pininfarina Group, means the income statement caption

“Financial expense”.

54

SEGMENT REPORTING

Operating segments are identified in accordance with paragraphs 5 to 10 of IFRS 8 – Operating

segments. In the Operations business segment, the operating segments coincide with a series of

activities mainly involving the supply of spare parts for cars manufactured by Pininfarina S.p.A., the

lease of certain businesses for the production of electric cars for the car sharing service of the Paris

Municipality and support functions.

Financial income and expense and income taxes are not allocated to the reporting segments

because management makes the relevant decisions on an aggregate segment basis. Intra-segment

transactions are carried out at market conditions. In accordance with IFRS 8.4, the Group presents

segment reporting in its consolidated financial statements only.

The Group’s business segments are not affected by seasonal factors. Segment reporting for the years ended 31 December 2014 and 2013 is set out below. Amounts are in thousands of Euros.

Reference should be made to the directors’ report for an analysis of the operating segments. A breakdown of assets and liabilities by operating segment is set out below:

A breakdown of sales by geographical segment is provided below:

Operations

Design &

&

engineering Total Operations

Design &

&

engineering Total

A B A + B A B A + B

Revenue 6,954 83,969 90,923 9,406 74,284 83,690

(Intra-segment revenue) (330) (4,022) (4,352) (344) (3,588) (3,932)

Revenue - third parties 6,624 79,947 86,571 9,062 70,696 79,758

Operating profit (loss) (9,078) 13,024 3,946 (5,768) 2,433 (3,335)

Net financial expense (4,748) (5,776)

Dividends - -

Share of profit (loss) of equity-accounted investees - 8 8 - (3) (3)

Loss before taxes - - (794) - - (9,114)

Income taxes - - (469) - - (112)

Loss from continuing operations - - (1,263) - - (9,226)

Loss from discontinued operations - - - - - (1,161)

Loss for the year - - (1,263) - - (10,387)

Other information required by IFRS 8:

- Amortisation and depreciation (1,902) (1,446) (3,348) (2,052) (1,340) (3,392)

- Impairment losses - (48) (48) - (85) (85)

- Provisions/change in accounting estimates 375 (66) 309 2,041 678 2,719

- Net gains on the sale of non-current assets 705 - 705 1 - 1

2014 2013

Operations

Design &

&

engineering Unallocated Total

Productio

n /

Design &

&

engineering

Unallocated Total

A B C A + B + C A B C A + B + C

Assets 37,297 53,743 51,314 142,354 37,252 56,873 63,092 157,217

Liabilities 53,989 18,006 42,472 114,467 55,769 22,774 49,254 127,797

Of which: other information required by IFRS 8:

- Equity-accounted investments - 59 - 59 - 51 - 51

- Intangible assets - 1,574 1,102 2,676 - 1,744 1,028 2,772

- Property, plant and equipment and investment property 34,339 25,818 688 60,845 35,310 26,975 723 63,008

- Employees 77 545 55 677 99 606 74 779

31 December 2014 31 December 2013

55

2014 2013

Italy 20,881 9,888

EU 45,606 42,885

Non-EU countries 17,692 16,291

Revenue from sales and services 84,179 69,064

56

NOTES TO THE CAPTIONS 1. Property, plant and equipment The carrying amount of property, plant and equipment at 31 December 2014 decreased to €52.1 million from €53.9 million at 31 December 2013. Changes in property, plant and equipment and an analysis of the items making up the captions are set out below.

Land and buildings include the carrying amounts of owned and leased real estate complexes, comprising the production facilities located in Via Castellamonte 6, Bairo Canavese (TO) and Strada provinciale per Caluso, San Giorgio Canavese (TO), the styling and engineering sites in via Nazionale 30, Cambiano (TO) and two properties in Turin and Beinasco (TO). Leased property shows the carrying amount of the portion of the Cambiano real estate complex under finance lease and accounted for in accordance with IAS 17 - Leases. All land and buildings located in Italy are owned by Pininfarina S.p.A.. They are mortgaged to Banca Nazionale del Lavoro S.p.A. to secure the outstanding financing of €7 million at 31 December 2014, which will be settled on 31 December 2015. Additions of the year mainly relate to the renovation of the Turin building.

Land Buildings Leased property Total

Historical cost 11,176,667 51,977,598 13,066,662 76,220,927

Accumulated depreciation and impairment losses - (24,716,126) (4,528,163) (29,244,289)

Carrying amount at 31 December 2013 11,176,667 27,261,472 8,538,499 46,976,638

Additions - 26,345 - 26,345

Disposals: Historical cost - - - -

Disposals: Acc. depreciation and imp. losses - - -

Depreciation - (896,313) (358,548) (1,254,861)

Impairment losses - (1,225) - (1,225)

Reclassifications - 1,225 - 1,225

Other changes - - - -

Carrying amount at 31 December 2014 11,176,667 26,391,504 8,179,951 45,748,122

of which

Historical cost 11,176,667 52,005,168 13,066,662 76,248,497

Accumulated depreciation and impairment losses - (25,613,664) (4,886,711) (30,500,375)

57

Plant and machinery at 31 December 2014 include generic production plant and machinery, mainly

based at the production facilities located in Bairo and San Giorgio Canavese and the plant and

machinery used in the Cambiano facility. Additions of the year are mainly due to plant installed at the Cambiano facility.

2014 additions to furniture and fixtures relate to the German group’s new offices. 2014 additions to hardware and software relate to the purchase of IT equipment for technological upgrading, while those to other assets relate to the purchase of two cars.

Machinery Plant

Leased plant

and

machinery

Total

Historical cost 5,734,088 82,029,533 122,353,360 210,116,981

Accumulated depreciation and impairment losses (5,561,200) (76,787,993) (122,353,360) (204,702,553)

Carrying amount at 31 December 2013 172,888 5,241,540 - 5,414,428

Additions - 214,394 - 214,394

Disposals: Historical cost (9,813) (45,553) - (55,367)

Disposals: Acc. depreciation and imp. losses 9,813 45,553 - 55,367

Depreciation (17,881) (654,649) - (672,530)

Impairment losses - - - -

Reclassifications - 622 - 622

Other changes - (622) - (622)

Carrying amount at 31 December 2014 155,007 4,801,284 - 4,956,291

of which

Historical cost 5,724,275 82,198,995 122,353,360 210,276,630

Accumulated depreciation and impairment losses (5,569,268) (77,397,710) (122,353,360) (205,320,339)

Furniture and

fixtures

Hardware and

softwareOther assets Total

Historical cost 2,457,370 5,424,386 796,472 8,678,228

Accumulated depreciation and impairment losses (2,217,515) (4,576,475) (365,785) (7,159,775)

Carrying amount at 31 December 2013 239,855 847,911 430,687 1,518,453

Additions 99,429 210,839 88,705 398,973

Disposals: Historical cost - (966) (190,339) (191,305)

Disposals: Acc. depreciation and imp. losses - - 81,463 81,463

Depreciation (87,503) (317,644) (14,371) (419,518)


Reclassifications 2,337 10,048 5,523 17,907

Other changes (2,051) (9,270) (3,276) (14,596)

Carrying amount at 31 December 2014 252,067 740,918 398,392 1,391,377

of which

Historical cost 2,559,136 5,643,704 700,361 8,903,202

Accumulated depreciation and impairment losses (2,307,069) (4,902,786) (301,969) (7,511,825)

58

2. Investment property The Group’s investment property consists of buildings owned by Pininfarina Deutschland GmbH in Renningen, near Stuttgart, Germany, which are leased to third parties. They are mortgaged to secure a loan received by the German subsidiary, which currently has an outstanding amount of €300,000.

3. Intangible assets The carrying amount of intangible assets at 31 December 2014 decreased to €2.7 million from €2.8 million at 31 December 2013.

The increase for the year mainly refers to software development activities and acquisition of licences.

Land Buildings Total

Historical cost 5,807,378 12,130,247 17,937,625

Accumulated depreciation and impairment losses - (8,839,067) (8,839,067)

Carrying amount at 31 December 2013 5,807,378 3,291,180 9,098,558

Additions - - -

Disposals: Historical cost - - -

Disposals: Acc. depreciation and imp. losses - - -

Depreciation - (349,827) (349,827)

Impairment losses - - -

Reclassifications - - -

Other changes - - -

Carrying amount at 31 December 2014 5,807,378 2,941,353 8,748,731

of which

Historical cost 5,807,378 12,130,247 17,937,625

Accumulated depreciation and impairment losses - (9,188,894) (9,188,894)

GoodwillLicences and

trademarksOther assets Total

Historical cost 1,043,495 4,997,113 2,072,708 8,113,316

Accumulated amortisation and impairment losses - (3,425,206) (1,916,118) (5,341,324)

Carrying amount at 31 December 2013 1,043,495 1,571,907 156,590 2,771,992

Increase - 533,844 20,895 554,739

Decrease - - - -

Decrease: Acc. amortisation and imp. losses - - - -

Amortisation - (585,133) (65,831) (650,964)


Reclassifications - - - -

Other changes - - 3 3

Carrying amount at 31 December 2014 1,043,495 1,520,618 111,657 2,675,769

of which

Historical cost 1,043,495 5,530,957 2,093,603 8,668,054

Accumulated amortisation and impairment losses - (4,010,339) (1,981,946) (5,992,285)

59

The remaining goodwill of €1,043,495, which is the Group’s only intangible asset with an indefinite useful life, originates from the consolidation of Pininfarina Extra S.r.l.. Within the Pininfarina Group, the Pininfarina Extra subgroup, which is comprised of Pininfarina Extra S.r.l., Pininfarina of America Corp. and the associate Goodmind S.r.l., engages in styling activities that are not related to the automotive industry. Consequently, it constitutes a separate cash generating unit. The impairment test of the Pininfarina Extra subgroup’s net assets did not identify any impairment loss.

As detailed below, the test has been carried out using the Unlevered Discounted Cash Flow model:

• the subgroup’s operating cash flows from third parties have been discounted using a WACC rate of 8.58% (9.05% at the previous year end). The estimated future cash flows are those set out in the plans prepared by the directors based on reasonable and supportable assumptions that represent their best estimate of the future economic conditions;

• the Pininfarina Extra subgroup’s net financial debt with third parties and net assets have been deducted from the discounted cash flows; the resulting figure has been compared with the carrying amount of goodwill.

As required by IAS 36 - Impairment of assets, the current and prior year parameters used to calculate the WACC rate are set out below:

• segment beta: this shows the segment’s risk level and amounts to 1.8 (unchanged from the previous year end);

• Market Risk Premium (“MRP”): equal to 5.7%, this shows the difference between the expected return on a risky asset and risk-free asset (unchanged from the previous year end);

• Risk Free Rate (“RFR”): amounts to 4.5 (unchanged from the previous year end);

• cost of debt: amounts to 4 (6.5% at the previous year end). 4. Investments in associates Associates Goodmind S.r.l., incorporated in July 2012, provides communication services to companies and public sector entities. The Group’s share of its profit for the year is €8,208. The associate had four employees at the reporting date. 5. Equity investments in other companies Equity investments in other companies did not change from the previous year end and are as follows:

31.12.2014

Midi Plc 251,072

Idroenergia Soc. Cons. a.r.l. 516

Volksbank Region Leonberg 300

Unionfidi S.c.r.l.p.A. Turin 129

Equity investments in other companies 252,017

60

6. Loans and receivables Changes in loans and receivables (third and related parties) are set out below.

The non-current portion of loans and receivables includes the €964,000 and €603,000 loans provided by Pininfarina S.p.A. to the ultimate parent, Pincar S.r.l., to cover the costs arising from the tax assessment reports notified in December 2013 and May 2014. The remainder shows the €50,000 loan provided by Pininfarina Extra S.r.l. to the associate Goodmind S.r.l. to finance its activities. In January 2015, the tax authorities informed Pincar S.r.l. of the cancellation of the orders for payment as part of an internal review procedure. Accordingly, the ultimate parent immediately claimed the reimbursement of the advances paid in order to repay the loan it received from Pininfarina S.p.A.. Loans to group companies are granted at market interest rates. 7. Assets held for trading

Assets held for trading mainly consist of government bonds and highly rated bonds, which represent

temporary investments of liquid assets, most of which are not subject to restrictions and that are not

subject to a significant credit risk exposure. However, these investments do not meet all the

requirements for recognition as cash and cash equivalents.

These assets are measured at fair value, based on their market prices. Fair value gains or losses

are recognised in profit or loss under Financial income/expense. Management of the investment

portfolio is outsourced to high standing counterparties with a highly reliable market reputation.

The balance at 31 December 2014 includes a restricted investment of €2,402,940 to secure a surety

issued to De Tomaso Automobili S.p.A. to cover compensation obligations, as is customary in

transactions involving the sale of business units. The maximum guaranteed liability equals the sales

price. The surety expired on 30 January and was released on 4 March 2015. 8. Inventories

Raw materials mainly consist of various materials used for the production of cars and prototypes at

the Cambiano facility. Finished goods mainly consist of car spare parts manufactured by the Group,

which are sold to carmakers.

31.12.2013 Increase

Interest

income Collection 31.12.2014

Third parties - - - - -

Related parties 80,000 1,617,000 76,626 (3,856) 1,769,770

Loans and receivables - Non-current portion 80,000 1,617,000 76,626 (3,856) 1,769,770

Third parties - - - - -

Related parties - - - - -

Loans and receivables - Current portion - - - - -

Loans and receivables 80,000 1,617,000 76,626 (3,856) 1,769,770

61

The table below shows a breakdown of inventories and the allowance for inventory write-down:

The allowance for inventory write-down (unchanged from 31 December 2013) reflects the risk of

obsolete and slow-moving items that arose during the phase out of production.

9. Contract work in progress Contract work in progress shows the balance of gross contract work in progress less progress payments and advances. The change for the year is due to the completion of certain styling and engineering contracts from customers inside and outside the European Union. 10. Trade receivables - related parties The following table shows trade receivables at 31 December 2014 and 2013:

The Group’s main counterparties are top carmakers with a high credit rating. Since there are no

insurance contracts on receivables, the Group’s maximum exposure to credit risk is equal to the

carrying amount of the receivables less the allowance for impairment. The Group did not factor any

receivables. Trade receivables are mostly denominated in Euros.

31.12.2014 31.12.2013

Raw materials 586,280 1,208,113

(Allowance for inventory write-down) (553,858) (553,858)

Finished goods 615,508 580,602

(Allowance for inventory write-down) (339,744) (339,744)

Inventories 308,186 895,113

31.12.2014 31.12.2013

Italy 6,193,047 4,051,293

EU 7,992,498 8,756,718

Non-EU countries 2,647,011 5,009,953

(Allowance for impairment) (949,773) (1,303,522)

Third parties 15,882,783 16,514,442

Goodmind S.r.l. 9,760 -


Trade receivables 15,892,543 16,514,442

62

Changes in the allowance for impairment are set out below:

Utilisations mainly refer to loans and receivables that are no longer deemed recoverable. Other changes are due to a revised estimate of the allowance in relation to the size of the default risk of the overall trade receivables, prudently estimated by considering the age of the receivables and past losses. Other changes are also due to exchange rate differences of the Pininfarina Extra Group. 11. Other assets The following table shows other assets at 31 December 2014 and 2013:

The caption “Registration tax” shows the amount paid by the parent following the payment order notified at the end of December 2013 against which it filed an appeal. In January 2015, the tax authorities informed the parent of the cancellation of the orders for payment as part of an internal review procedure. Accordingly, the parent is waiting to receiving the reimbursement of the advances paid. The increase in VAT is mainly due to the invoices issued by the lease companies to the parent following payments made by it at 31 December 2013.

Grants for the Program II.3 “Più Sviluppo” project are due from the Piedmont Regional Authorities as

the first and second instalment of the forgivable loan for the “AMPERE” industrial research and

experimental development project.

31.12.2014 31.12.2013

Opening balance 1,303,522 1,147,873

Additions 47,681 267,835

Utilisations (44,503) (112,186)

Other changes (356,927) -

Closing balance 949,773 1,303,522

31.12.2014 31.12.2013

Registration tax 5,634,087 -

VAT 6,033,788 2,258,395

Withholding taxes 1,546,806 1,949,928

Grants for the Program II.3 "Più sviluppo" project 1,111,441 1,111,441

Prepayments and accrued income 776,167 846,673

Advances to suppliers 91,613 133,607

Amounts due from INAIL (the Italian Workers' Compensation Authority)

and INPS (the Italian social security institution) 14,568 21,866

Amounts due from employees 17,916 34,824

Other 166,581 303,436

Other assets 15,392,967 6,660,170

63

12. Cash and cash equivalents The table below shows a breakdown of this caption and a comparison with the previous year-end corresponding figures:

Short-term bank deposits include the parent’s restricted account of €5,000,000 in favour of Banca Intermobiliare to secure the surety of the same amount that the latter provided to Reale Mutua Assicurazione, which, in turn, issued a surety of €9,649,751 to the tax authorities securing the repayment of the 2012 VAT receivable to the parent. The surety expires on 26 November 2016. 13. Equity (a) Share capital

The parent’s share capital is comprised of 30,166,652 ordinary shares, with a unit nominal amount of €1. There are no other classes of shares. Treasury shares are held in accordance with the limits imposed by article 2357 of the Italian Civil Code. As required by the agreements signed with the lending institutions, the shares held by Pincar S.r.l., equal to 76.06% of the share capital, are charged with a senior pledge, without voting rights, in favour of such institutions. Detailed information about the parent’s shareholders is provided in the “General information” section of these notes. (b) Reserve for treasury shares This reserve of €175,697, unchanged from the previous year end, is recognised in accordance with the provisions of article 2357 of the Italian Civil Code. (c) Legal reserve The legal reserve of €6,033,331, which pursuant to the provisions of article 2430 of the Italian Civil Code is available to cover any losses, is unchanged from the previous year end.

31.12.2014 31.12.2013

Cash on hand and cash equivalents 15,850 22,670

Short-term bank deposits 24,407,933 18,371,004

Cash and cash equivalents 24,423,783 18,393,674

(Bank overdrafts) - -

Net cash and cash equivalents 24,423,783 18,393,674

Nominal

amount No.

Nominal

amount No.

Ordinary shares 30,166,652 30,166,652 30,166,652 30,166,652

(Treasury shares) (15,958) (15,958) (15,958) (15,958)

Share capital 30,150,694 30,150,694 30,150,694 30,150,694

31.12.2014 31.12.2013

64

(d) Translation reserve The translation reserve reflects the cumulative differences from the translation of financial statements of companies with functional currencies other than the Euro, which is the Group’s presentation currency. These companies are Pininfarina Automotive Engineering (Shanghai) Co Ltd. and Pininfarina of America Corp.. (e) Other reserves Other reserves are unchanged from the previous year end. The Group has no stock option plans or other instruments requiring share-based payments. (f) Retained earnings (losses carried forward) Losses carried forward totalled €9,891,053 at the reporting date, down by €10,709,083 from the 31 December 2013 figure. The decrease includes the loss for 2013 of €10,386,970 and the effect of the adoption of IAS 19 (revised), quantified at €322,113. The table reconciling the parent’s loss and equity as at and for the year ended 31 December 2014 with the Group’s relevant figures is provided in the directors’ report, to which reference is made. 14. Loans and borrowings

Rescheduling Agreement

(a) Rescheduling Agreement

The Rescheduling Agreement (the “Agreement”) between Pininfarina S.p.A. and its lending

institutions became effective on 1 May 2012. Its effects are summarised below:

- the rescheduling of term financing and finance leases totalling €182.5 million and a portion of

the operating lines amounting to €18 million to 2018;

- the adoption of a fixed annual interest rate of 0.25% for the borrowings mentioned above.

The Agreement does not apply to the loan granted to Pininfarina S.p.A. by BNL (formerly Fortis Bank).

(b) Fair value of restructured debt

The fair value of the restructured debt was determined by discounting the cash flows from the

Rescheduling Agreement to their present value at a 6.5% rate, determined with the support of a

third-party financial advisor, as the sum of 1) the return on risk-free investments and 2) a credit

spread attributed to Pininfarina S.p.A..

65

The table below summarises the changes in loans and borrowings:

Following the lending institutions’ waiver of their rights arising from the Group’s failure to comply with

the 2013 EBITDA covenant on 2 April 2014, liabilities have been reclassified in line with the due

dates provided for by the Rescheduling Agreement. Other loans and borrowings include the amounts due to the lending institutions of Pininfarina S.p.A., parties to the Agreement, and to Banca Nazionale del Lavoro S.p.A. (formerly Fortis Bank), pursuant to the relevant loan and financing agreements.

A breakdown of the contractual cash flows by maturity is provided in paragraph (e) of the “Financial

risk management” section. A breakdown of changes by lender is set out below:

31.12.2013

2014

repayments

Figurative

interest

Changes in

operating

lines

Current/non-

current

reclassification 31.12.2014

Finance lease liabilities - - 3,209,043 - 40,338,175 43,547,218

Other loans and borrowings 7,521,896 (200,000) 1,992,498 - 18,024,119 27,338,513

Non-current portion 7,521,896 (200,000) 5,201,541 - 58,362,294 70,885,731

Bank overdrafts - - - - - -

Finance lease liabilities 51,991,710 (5,826,767) - - (40,338,175) 5,826,768

Other loans and borrowings 37,318,605 (8,654,748) - - (18,024,119) 10,639,738

Current portion 89,310,315 (14,481,515) - - (58,362,294) 16,466,506

Current and non-current portions 96,832,211 (14,681,515) 5,201,541 - - 87,352,237

Of which:

Finance lease liabilities 51,991,710 (5,826,767) 3,209,043 - - 49,373,986

Other loans and borrowings 44,840,501 (8,854,748) 1,992,498 - - 37,978,251

Leases and financing 96,832,211 (14,681,515) 5,201,541 - - 87,352,237

31.12.2013 2014

repayments

Figurative

interest 31.12.2014

Mediocredito Italiano S.p.A. (formerly Leasint S.p.A.) 11,521,759 (1,291,257) 711,148 10,941,650

MPS Leasing & Factoring S.p.A. 5,760,881 (645,628) 355,574 5,470,827

Selmabipiemme Leases S.p.A. 5,760,881 (645,628) 355,574 5,470,827

Release S.p.A. 15,485,047 (1,735,427) 955,771 14,705,391

BNP Paribas Leases Solutions S.p.A. 4,946,872 (554,401) 305,332 4,697,803

UBI Leasing S.p.A. 2,473,435 (277,200) 152,666 2,348,901

Unicredit Leasing S.p.A. 6,042,835 (677,226) 372,977 5,738,586

Finance lease liabilities 51,991,710 (5,826,767) 3,209,043 49,373,986

Intesa Sanpaolo S.p.A. 8,921,582 (999,852) 550,660 8,472,390

Intesa Sanpaolo S.p.A. (former operating line) 2,521,038 (282,535) 155,604 2,394,107

Banco Popolare Soc. Coop. (formerly Banca Italease S.p.A.) 669,120 (74,988) 41,300 635,432

Unicredit S.p.A. 7,270,808 (814,848) 448,770 6,904,730

Banca Nazionale del Lavoro S.p.A. 1,351,756 (151,492) 83,433 1,283,697

Banca Regionale Europea S.p.A. 3,717,326 (416,605) 229,442 3,530,163

Banca Regionale Europea S.p.A. (former operating line) 1,680,690 (188,355) 103,736 1,596,071

Banco Popolare Soc. Coop. 2,787,996 (312,452) 172,081 2,647,625

Banco Popolare Soc. Coop. (former operating line) 1,260,518 (141,266) 77,802 1,197,054

Banca Monte dei Paschi di Siena S.p.A. (former operating line) 2,100,862 (235,446) 129,670 1,995,086

Volksbank Region Leonberg (GER) 500,000 (200,000) - 300,000

Loans and borrowings 32,781,696 (3,817,839) 1,992,498 30,956,355

Banca Nazionale del Lavoro S.p.A. (formerly Fortis Bank) 12,058,805 (5,036,909) - 7,021,896

Leases and financing 96,832,211 (14,681,515) 5,201,541 87,352,237

66

Transactions with Banca Nazionale del Lavoro S.p.A., formerly Fortis Bank

On 25 June 2008, Pininfarina S.p.A. and Banca Nazionale del Lavoro S.p.A. (formerly Fortis Bank)

entered into an agreement (the “Fortis Agreement”) separate from the Rescheduling Agreement of

31 December 2008, aimed at defining a plan for the repayment of interest-bearing debt in half-yearly

instalments, the last one of which is due on 31 December 2015. This separate agreement is

independent of the new Rescheduling Agreement that became effective on 1 May 2012.

Further to the court orders served on Pininfarina S.p.A. on 28 March and 19 April 2008, Banca

Nazionale del Lavoro S.p.A. (formerly Fortis Bank) was granted court-ordered mortgages on the

buildings owned by the parent, which secure loans currently approximating €7 million that will be

settled on 31 December 2015.

Other information

The loan to Volksbank Region Leonberg (Geramany) decreased to €300,000 following a repayment made during the period and is due by Pininfarina Deutschland, which is the only subsidiary with non-current debt.

Consequently, the Group’s loans and borrowings are not subject to currency risk.

15. Post-employment benefits

Post-employment benefits shows the present value of the obligation to employees under article

2120 of the Italian Civil Code. Following the changes introduced to Italian laws five years ago,

benefits vested before 1 January 2007 are classified as defined benefit plans pursuant to IAS 19 -

Employee Benefits, while those accrued thereafter are classified as defined contribution plans.

Changes for the year are provided below:

Payments consist of post-employment benefits paid to former employees of the parent’s discontinued production operations. The business lease signed by the parent and a company of the Cecomp Group in 2011 expired on 31 December 2013. It was renewed with Bluecar Italy S.r.l., a company of the Bolloré Group. The agreement includes the transfer of 52 employment contracts and related post-employment benefits up until when the lease expires (31 December 2016).

31.12.2014 31.12.2013

Opening post-employment benefits 7,145,948 7,286,941

Interest cost recognised in profit or loss 158,364 214,128

Current service cost recognised in profit or loss 36,307 38,033

Actuarial (gains) losses recognised in other comprehensive income 338,116 (2,340)

Payments (2,331,795) (390,814)

Closing post-employment benefits 5,346,940 7,145,948

67

The main assumptions underlying the actuarial calculation of the liability in the current and previous

years are set out below:

The adopted discount rate refers to the market yield of AA-rated Euro securities. Moreover, the sensitivity analysis carried out increasing/decreasing the base rate by 10% did not show significant changes with respect to the current post-employment benefit obligation. 16. Trade payables, other financial liabilities and other liabilities (a) Trade payables

The reporting-date balance comprises amounts that will be paid within twelve months of the reporting date.

Advances for contract work in progress include advances and deferred income of €2.5 million for progress billing exceeding the stage of completion of the styling and engineering contracts. The Group made the same reclassification to the balance at 31 December 2013 (€3.3 million).

Details of the balance with related parties is provided in the Other information section on page 75.

(b) Other financial liabilities

(c) Other liabilities This caption mostly comprises the deferred lease income on the business lease signed by the parent.

2014 2013

Annual inflation rate 1.0% 1.5%

Benefit discount rate 1.2% 2.5%

Annual salary increase rate 0.5% - 1.5% 0.5% - 1.5%

31.12.2014 31.12.2013

Third parties 8,922,775 10,744,428


Advances for contract work in progress 3,277,786 4,466,870

Trade payables 12,245,601 15,211,298

31.12.2014 31.12.2013

Wages and salaries payable 2,582,299 2,092,339

Social security charges payable 1,280,181 672,927

Other 1,864,090 2,004,623

Other financial liabilities 5,726,570 4,769,889

68

17. Provisions for risks and charges, contingent liabilities and litigation (a) Provisions for risks and charges Changes in provisions for risks and charges are set out below, with a comment on the main changes:

The provision for product warranty represents the best estimate of the Group’s contractual and legal

obligations with regard to costs entailed by warranties provided on certain components of the

vehicles it manufactured for a specific period, starting from the sale of the vehicles to end

customers. The above-mentioned estimate was determined based on the Group’s experience,

specific contractual terms and product specifications and defect data generated by the statistical

survey systems of the Group’s customers.

The restructuring provision is the best estimate of the related liability at the reporting date.

Utilisations include amounts paid to employees who left during the year following conclusion of the

2011 redundancy programme and other termination benefits.

Other provisions reflect the estimated liabilities that may arise from losses to complete styling and

engineering contracts, potential disputes with former employees and environmental risks. Additions,

utilisations and other changes mainly show the effects of the measurement of losses to complete

long-term contracts. (b) Contingent liabilities and litigation

Registration tax

On 24 December 2013, the parent was notified of 14 orders for payment of tax and decisions to

impose penalties (“Orders”), each relating to a pro rata “financial liability” recognised by Pininfarina

S.p.A. with almost all lending institutions involved in the Rescheduling Agreement signed in Lugano

(Switzerland) on 31 December 2008. In addition to the request for payment of the allegedly due

registration tax and related interest, each Order imposes a sanction amounting to 120% of the

assessed tax. The overall amount requested is €11.4 million.

Almost all the lending institutions received similar orders for payment, as they are jointly and

severally liable with the parent vis-a-vis the tax authorities.

As it was certain of its correct conduct, the parent appealed against the Orders on 5 February 2014

(paying the assessed taxes plus interest for an overall amount of €5.6 million).

In January 2015, the tax authorities informed Pininfarina S.p.A. of the cancellation of the orders for payment as part of an internal review procedure. Accordingly, the parent immediately claimed the reimbursement of the advances paid.

VAT

This dispute, which arose in 2007 regarding the allegation that VAT should have been levied on the

amounts invoiced in 2002 and 2003 by the parent to Peugeot Citroen Automobiles SA, is currently

pending before the Supreme Court of Cassation. There were no developments in this case as of the

approval date hereof.

31.12.2013 Additions Utilisations Other changes 31.12.2014

Provision for product warranty 62,611 - (3,961) - 58,650

Restructuring provision 2,299,512 - (1,856,897) - 442,615

Other provisions 335,564 161,494 (141,470) (10,265) 345,323

Provisions for risks and charges 2,697,687 161,494 (2,002,328) (10,265) 846,588

69

18. Current and deferred taxes (a) Deferred taxes The table below provides a breakdown of deferred tax assets and liabilities:

The net deferred tax assets shown in the consolidated financial statements mainly refer to the German companies. They reflect the recoverable portion of the tax loss carryforwards, determined based on forecast future taxable profit and taking into account the agreement for the filing of a national consolidated tax return signed by the German companies. The increase for the year relates to Pininfarina of America Corp., which recognised deferred tax assets on non-deductible impairment losses recognised on loans and receivables. The Group has not recognised additional deferred tax assets as it does not expect to generate a taxable profit in the short to medium-term that would allow the full utilisation of the tax losses and deductible temporary differences. A breakdown of unrecognised deferred tax assets and liabilities and related comments are set out below:

“Offsettable” deferred tax assets and liabilities are calculated for all differences between the assets’ and liabilities’ carrying amount and tax base in accordance with paragraph 74 of IAS 12 - Income taxes, which requires offsetting if the Group has a legally enforceable right to set off in the same tax jurisdiction. Deferred tax assets on tax loss carryforwards are calculated applying the relevant tax rate to the tax loss carryforwards shown in the annual tax return. The balance is mainly attributable to Pininfarina S.p.A., the Pininfarina Deutschland GmbH subgroup and the subsidiary Pininfarina Automotive Engineering Shanghai Co Ltd..

31.12.2014 31.12.2013

Deferred tax assets 1,036,457 946,970

(Deferred tax liabilities) (2,476) -

Net deferred tax assets 1,033,981 946,970

31.12.2014 31.12.2013

Deferred tax assets on tax losses 29,180,741 27,144,899

Offsettable deferred tax assets on other temporary differences 11,884,840 12,919,526

(Offsettable deferred tax liabilities on other temporary differences) (5,799,858) (5,706,325)

Total 35,265,723 34,358,100

70

A breakdown of tax loss carryforwards and related deferred tax assets by geographical segment is set out below:

The Group has not recognised the deferred tax assets resulting from the above calculation as the generation of taxable profit in the short to medium-term enabling the full use of the tax losses and deductible temporary differences is not probable. (b) Current taxes Income taxes recognised in profit or loss are detailed below:

19. Revenue from sales and services

Sales refer mainly to revenue from sales of concept cars and related rights, spare parts and

equipment. Services show amounts invoiced for styling and engineering services.

Segment reporting is provided on page 54.

Tax loss

carryforwards

Deferred tax

assets

Tax loss

carryforwards

Deferred tax

assets

31.12.2014 31.12.2014 31.12.2013 31.12.2013

Italy 89,412,964 24,588,565 80,905,896 22,249,121

Germany 41,595,748 4,554,085 43,283,000 4,798,664

China 152,366 38,091 388,455 97,114

Tax loss carryforwards 131,161,078 29,180,741 124,577,351 27,144,899

2014 2013

Income taxes - (1,253)

IRAP (Regional tax on production activities) (525,114) (125,132)

Release of excess provision (9,208) -

Current taxes (534,322) (126,385)

Net deferred tax income 64,989 14,001

Income taxes (469,333) (112,384)

2014 2013

Sales - Italy 1,284,865 988,076

Sales - EU 4,165,705 2,369,657

Sales - Non-EU countries 2,379,808 445,203

Services - Italy 19,595,908 8,900,173

Services - EU 41,440,090 40,515,814

Services - Non-EU countries 15,312,449 15,845,536

Revenue from sales and services 84,178,825 69,064,459

71

20. Other revenue and income

Lease income mainly refers to the business lease signed by Pininfarina S.p.A. and a third party and leases for the two buildings located in Renningen, near Stuttgart, in Germany, owned by the subsidiary Pininfarina Deutschland GmbH. Prior year income refers to prior year income and estimation differences, other than errors, resulting from the regular updating of estimates made in previous years. Royalties refer to fees for the licence to use the Pininfarina trademark granted to the Bolloré S.A. Group in connection with the production of electric cars at the Bairo Canavese facility. 21. Gains on sale of non-current assets and equity investments This caption shows the gain recognised by the parent on the sale of a historic car and two company cars. 22. Raw materials and components Raw materials and components mainly include purchases of equipment and materials used for the styling and engineering contracts and spare parts resold by the Group. 23. External variable engineering services External variable engineering services mainly refer to design and technical services. 24. Wages, salaries and employee benefits

Utilisation of the restructuring provision refers to the amounts paid to employees who resigned

during the year, following completion of the 2011 redundancy programme, and other termination

benefits.

2014 2013

Lease income 3,567,894 5,669,712

Prior year income 123,967 171,359

Insurance compensation 1,524 10,290

Royalties 742,717 593,722

Rebilling 150,122 173,247

Grants relating to income 39,849 666,412

Sundry 79,043 83,858

Other revenue and income 4,705,116 7,368,600

2014 2013

Wages and salaries (38,653,861) (37,324,127)

Social security contributions (9,684,171) (9,417,542)

Utilisation of restructuring and other provisions 1,856,897 817,204

Blue collars, white collars and managers (46,481,135) (45,924,465)

Post-employment benefits - defined contribution plan (1,420,142) (1,610,361)

Wages, salaries and employee benefits (47,901,277) (47,534,826)

72

Post-employment benefits – defined contribution plan reflect the costs related to post-employment

benefits both for defined benefit and defined contribution plans.

A breakdown of the actual number of employees at 31 December 2014 and the average number for the year is set out below, as per article 2427 of the Italian Civil Code, calculated by adding the number of employees at the beginning and end of the year and dividing the result by two:

The business lease to a third party, which expired on 31 December 2013 and was renewed for another three years, includes the transfer of 52 employment contracts (unchanged from 31 December 2013).

25. Additions to/utilisation of provisions and impairment losses

Reference should be made to note 10 for details of the revised estimate of the allowance for

impairment.

Utilisation and revised estimates of provisions for risks and charges include the utilisation and

revised estimates of the provision for losses to complete contracts.

Reference should be made to note 17 for details of additions to the provisions for risks and charges.

reporting

date average

reporting

date average

Managers 23 22 21 23

White collars 622 641 689 698

Blue collars 32 42 69 62

Total 677 705 779 783

2014 2013

2014 2013

Net impairment losses on loans and receivables (50,152) (214,084)

Revised estimate of the allowance for impairment 374,671 -

Additions to provisions for risks and charges (161,494) (328,001)

Utilisation and revised estimates of provisions for risks and charges 97,637 3,260,500

Impairment losses on property, plant and equipment - (60,100)

Impairment losses on equity investments - (24,521)

Net utilisation of provisions and impairment losses 260,662 2,633,794

73

26. Other expenses

Travel expenses mainly include costs incurred for the transfer to Germany of personnel dedicated to the BMW contract.

Consulting and other services include legal expenses and IT consultancy fees.

Indirect taxes includes the single local tax of €450,593, the €281,980 tax on service contracts with

certain Chinese customers and other minor taxes.

General services and other expenses include costs for guarantees and settlements in court, net of

utilisations of the relevant provisions.

Leases mainly refer to IT equipment, forklift trucks and cars used by employees. These are

operating leases pursuant to IAS 17 – Leases and do not entail special commitments for the Group 27. Net financial expense

Bank interest and expense refer to interest paid on credit lines and bank fees.

2014 2013

Travel expenses (2,348,147) (2,476,240)

Leases (2,179,970) (2,157,327)

Directors' and statutory auditors' fees (1,113,200) (1,153,216)

Consulting and other services (2,880,369) (2,615,051)

Other personnel costs (697,850) (710,108)

Postal expenses (419,449) (439,253)

Cleaning and waste disposal services (230,105) (211,661)

Advertising (482,046) (373,916)

Indirect taxes (926,259) (813,104)

Insurance (592,404) (471,337)

Membership fees (90,402) (106,192)

Prior year expense (20,720) (63,162)

General services and other expenses (787,622) (914,090)

Other expenses (12,768,543) (12,504,658)

2014 2013

Bank interest and expense (421,735) (472,778)

Lease interest expense (3,375,584) (4,213,370)

Interest expense on loans and financing (2,236,341) (2,817,371)

Financial expense (6,033,660) (7,503,519)

Bank interest income 277,504 747,179

Fair value gains on assets held for trading 931,318 952,728

Interest income on loans and receivables - third parties - 27,123

Interest income on loans and receivables - related parties 76,626 1,816

Financial income 1,285,448 1,728,846

Net financial expense (4,748,212) (5,774,673)

74

Lease interest expense of €3,375,584 shows the effect of amortised-cost accounting (€3,209,043)

and interest paid under the new Agreement (€166,541).

Interest expense on loans and financing of €2,236,341 comprises the effect of amortised-cost

accounting (€1,992,498), interest accrued on the loan due to Banca Nazionale del Lavoro (formerly

Fortis Bank) (€137,091) and interest accrued under the new Agreement (€104,146). The remainder

relates to foreign companies.

Lease interest expense and interest expense on non-current loans and financing and the liability

with Banca Nazionale del Lavoro were paid on 30 June 2014 and 31 December 2014.

Bank interest income accrued on the current account positive balances.

The fair value gains on assets held for trading arise from the different performances and amounts of the securities in portfolio during the current and previous years.

Interest income on loans and receivables - related parties of €76,626 accrued on the loans granted

to the ultimate parent, Pincar S.r.l., by Pininfarina S.p.A. and to the associate Goodmind S.r.l. by

Pininfarina Extra S.r.l..

28. Profit (loss) from discontinued operations

(a) Loss from discontinued operations The investments in the subsidiary Pininfarina Maroc SAS held by Pininfarina S.p.A. and the subsidiary Pininfarina Extra S.r.l. were sold to third parties on 30 December 2013. The 2013 loss from the discontinued operation is detailed below:

2013

Revenue 783.420

Expense (1.022.433)

Operating loss (239.013)

Net financial expense and income taxes (10.832)

Operating loss, net of tax and net financial expense (249.845)

Loss on the sale of discontinued operations (910.748)

Loss from discontinued operations (1.160.593)

75

OTHER INFORMATION Events after the reporting date Reference should be made to the relevant section of the directors’ report for information about events that occurred after the reporting date. Related party transactions The table below, which is presented pursuant to Consob communication no. DEM/6064293 of 28 July 2006, summarises related party transactions, including intragroup transactions. These transactions were carried out at market conditions, consistent with the nature of the goods exchanged or services provided. They were neither atypical nor unusual for the purposes of the above-mentioned communication.

In addition to the above figures:

- Studio Professionale Pavesio e Associati, related to the director Carlo Pavesio, provided legal assistance to the parent and Pininfarina Extra S.r.l. for total fees of €356,135 and €1,989, respectively;

- Pantheon Italia S.r.l., related to the director Roberto Testore, provided commercial assistance for total fees of €93,004;

- Giovanni Pininfarina – son of the chairman of the Board of Directors, Paolo Pininfarina, provided commercial assistance for total fees of €8,400.

Assets Liabilities Assets Liabilities Revenue Expense Income Expense

Pincar S.r.l. - - 1,639,770 - - - 72,770 -

Goodmind S.r.l. 9,760 45,040 130,000 - 25,259 44,000 3,856 -

Total 9,760 45,040 1,769,770 - 25,259 44,000 76,626 -

Commercial Financial Operating Financial

76

Significant non-recurring transactions As required by Consob communication no. DEM/6064293 of 28 July 2006, the effects of non-recurring events or transactions, i.e., those events or transactions that do not occur frequently during the normal course of business, are shown in the next table:

31.12.2014

31.12.2014 net of

significant non-recurring

transactions

Property, plant and equipment 52,095,790 52,095,790

Investment property 8,748,731 8,748,731

Intangible assets 2,675,770 2,675,770

Equity investments 310,740 310,740

Deferred tax assets 1,036,457 1,036,457

Non-current financial assets 1,769,770 130,000

NON-CURRENT ASSETS 66,637,258 64,997,488

Inventories 308,186 308,186

Contract work in progress 3,340,819 3,340,819

Current financial assets 16,358,515 16,358,515

Derivatives - -

Trade receivables and other assets 31,285,509 31,285,509

Cash and cash equivalents 24,423,783 25,990,783

CURRENT ASSETS 75,716,812 77,283,811

Assets held for sale - -

TOTAL ASSETS 142,354,070 142,281,298

Share capital and reserves 29,150,434 29,150,434

Loss from continuing operations (1,262,883) (1,335,653)

EQUITY 27,887,551 27,814,781

Non-current loans and borrowings 70,885,731 70,885,731

Deferred tax liabilities 2,476 2,476

Post-employment benefits and other provisions 5,346,940 5,346,940

NON-CURRENT LIABILITIES 76,235,147 76,235,147

Current loans and borrowings 16,466,506 16,466,506

Other financial liabilities 5,726,570 5,726,570

Trade payables 12,245,600 12,245,600

Current tax liabilities 958,116 958,116

Provisions for risks and charges 846,588 846,588

Other liabilities 1,987,991 1,987,991

CURRENT LIABILITIES 38,231,372 38,231,371

Liabilities associated with non-current assets held for sale - -

TOTAL LIABILITIES 114,466,519 114,466,518

TOTAL LIABILITIES AND EQUITY 142,354,070 142,281,298

77

The transactions identified as significant and non-recurring are as follows:

• Loans to the ultimate parent Pincar S.r.l. Atypical and unusual transactions As required by Consob communication no. DEM/6064293 of 28 July 2006, the Pininfarina Group specifies that it did not carry out atypical or unusual transactions during the year, as defined in the above-mentioned Communication, according to which atypical and/or unusual transactions are transactions that, because of their significance/material amount, nature of the counterparty, subject, method used to determine the transfer price and timing of the event, could create doubts as to: the fairness/completeness of the disclosure provided in the financial statements, the existence of a conflict of interest, the safeguarding of corporate assets and the protection of non-controlling investors.

2014

2014 net of significant

non-recurring

transactions

Revenue from sales and services 84,178,825 84,178,825

Internal work capitalised - -

Change in finished goods and work in progress (2,313,298) (2,313,298)

Other revenue and income 4,705,116 4,705,116

REVENUE 86,570,643 86,570,643

Net gains on sale of non-current assets and equity investments 705,257 705,257

Raw materials and consumables (7,420,580) (7,420,580)

Other variable production costs (2,285,195) (2,285,195)

External variable engineering services (9,888,020) (9,888,020)

Wages, salaries and employee benefits (47,901,277) (47,901,277)

Amortisation and depreciation, impairment losses and provisions (3,087,039) (3,087,039)

Net exchange rate gains 21,207 21,207

Other expenses (12,768,543) (12,768,543)

OPERATING PROFIT 3,946,454 3,946,454

Net financial expense (4,748,212) (4,820,982)

Dividends 0 0

Share of profit of equity-accounted investees 8,208 8,208

LOSS BEFORE TAXES (793,550) (866,320)

Income taxes (469,333) (469,333)

LOSS FOR THE YEAR (1,262,883) (1,335,653)

78

Disclosure required by article 149-duodecies of the Consob Issuer Regulation The 2014 fees for audit and non-audit services provided by KPMG and other entities of its network are detailed below, pursuant to article 149-duodecies of the Issuer Regulation.

(1) The figure includes €10,000 for the translation of financial documents.

Service Service provider Service recipient Fee

KPMG S.p.A. Pininfarina S.p.A. (1) 83,219

KPMG S.p.A. Pininfarina Extra S.r.l. 10,030

KPMG network Subsidiaries 42,500

135,749 Audit

79

LIST OF CONSOLIDATED COMPANIES

Name Registered off ice Country

Share/quota

capital Currency

Consolidated

% Investor

Investment

%

Parent

Parent

Pininfarina S.p.A. Turin

Via Bruno Buozzi 6 Italy 30,166,652 € 100

Consolidated subsidiaries

Italian subsidiaries

Pininfarina Extra S.r.l. Turin

Via Bruno Buozzi 6 Italy 388,000 € 100 Pininfarina S.p.A. 100

Foreign subsidiaries

Pininfarina of America Corp.Miami FL

1101 Brickell Ave - South Tow er -

8th Floor USA 10,000 USD 100 Pininfarina Extra S.r.l. 100

Pininfarina Deutschland GmbH Leonberg

Riedw iesenstr. 1 Germany 3,100,000 € 100 Pininfarina S.p.A. 100

mpx Entw icklung GmbH Munchen

Frankfurter Ring 17 Germany 25,000 € 100 Pininfarina Deutschland GmbH 100

Pininfarina Automotive Engineering (Shanghai) Co Ltd

Room 806, No. 888 Moyu (S) Rd.

Anting Tow n, 201805, Jiading

district, Shanghai, China China 3,702,824 CNY 100 Pininfarina S.p.A. 100

Equity-accounted investees

Goodmind S.r.l.Cambiano (TO)

Via Nazionale 30 Italy 20,000 € 20 Pininfarina Extra S.r.l. 20

80

Key figures of the main Group companies

(IFRS figures)

Pininfarina Extra Group Registered office: Turin - I Quota capital €388,000 Investment percentage 100%

31.12.2014 31.12.2013 (€’million) Revenue 7.0 5.9 Profit for the year 1.5 1.0 Equity 5.9 5.4 Net financial position 3.8 3.7

Pininfarina Deutschland Group

Registered office: Leonberg - D Share capital €3,100,000 Investment percentage 100%

31.12.2014 31.12.2013 (€’million) Revenue 30.0 29.2 Profit for the year 0.9 0.4 Equity 20.0 19.2 Net financial position (debt) 0.9 (1.2)

Pininfarina Automotive Engineering Co Ltd Registered office: Shanghai - PRC Share capital CNY3,702,824 Direct investment percentage 100%

31.12.2014 31.12.2013 (€’million) Revenue 1.0 1.9 Profit for the year 0.3 0.7 Equity 0.3 (0.0) Net financial position 0.5 0.3

Chairman of the Board of Directors

Paolo Pininfarina

(signed on the original)

81

Statement on the consolidated financial statements

pursuant to article 154-bis of Legislative decree no. 58/98

◊ The undersigned Paolo Pininfarina, as chairman, and Gianfranco Albertini, as manager in

charge of financial reporting of Pininfarina S.p.A., also considering the provisions of article 154-

bis.3/4 of Legislative decree no. 58 of 24 February 1998, state that the administrative and

accounting policies adopted for the preparation of the consolidated financial statements:

- are adequate in relation to the Group’s characteristics and

- have been effectively applied during 2014.

◊ Moreover, they state that the consolidated financial statements as at and for the year ended 31

December 2014

- have been prepared in accordance with the International Financial Reporting Standards

endorsed by the European Community pursuant to (EC) regulation no. 1606/2002 issued by

the European Parliament and Council on 19 July 2002;

- are consistent with the accounting ledgers and records;

- are suitable to give a true and fair view of the financial position, financial performance and

cash flows of the issuer and the group of companies included in the consolidation scope.

The directors’ report includes a reliable analysis of the Group’s performance and results of

operations and the issuer’s and consolidated companies’ financial position and performance, as well

as a description of the main risks and uncertainties to which they are exposed.

19 March 2015

Chairman

Paolo Pininfarina


Manager in charge of

financial reporting

Gianfranco Albertini


82

(Translation from the Italian original which remains the definitive version)

STATUTORY AUDITORS’ REPORT

ON THE CONSOLIDATED FINANCIAL STATEMENTS

AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2014

Dear shareholders,

The Board of Directors has presented the consolidated financial statements of the Pininfarina Group

as at and for the year ended 31 December 2014, comprising the statement of financial position,

income statement, statement of comprehensive income, statement of changes in equity, statement of

cash flows and related notes.

These consolidated financial statements show equity of €27,887,551, including the loss of the year

of €1,262,883.

The consolidated financial statements as at and for the year ended 31 December 2014 have been

prepared in accordance with the IFRS.

The consolidated financial statements have been made available to the Board of Statutory Auditors

within the legal terms, together with the separate financial statements and the directors’ report.

The latter adequately describes the financial position, financial performance and cash flows,

including at consolidation level, of Pininfarina S.p.A. and its subsidiaries during the year and after

the reporting date. It also provides a breakdown of business volumes by the main business segments

and the consolidated results.

The consolidation scope has been adequately defined. At 31 December 2014, it includes the parent,

five consolidated subsidiaries and one associate measured using the equity method.

Moreover, the subsidiary Matra Automobile Engineering SAS had already been deconsolidated in

2012 due to the immateriality of its net assets.

Based on their checks, the independent auditors, KPMG S.p.A., confirmed that carrying amounts in

the 2014 consolidated financial statements are consistent with the parent’s accounting records, the

subsidiaries’ financial statements and relevant information communicated by the latter.

The subsidiaries’ financial statements prepared by their relevant bodies and provided to the parent

for consolidation purposes were checked/audited by the individual companies’ relevant bodies

and/or parties, in accordance with local legislation. The independent auditors performed the

procedures necessary for the audit of the consolidated financial statements.

83

The checks of the Board of Statutory Auditors do not cover those financial statements, as provided

for by specific legal provisions (Consolidated Finance Act and article 41.3 of Legislative decree no.

127 of 9 April 1991).

KPMG S.p.A., as the independent auditors engaged for the audit of the Pininfarina Group’s

consolidated financial statements, issued their unqualified audit report today, in which they state

that, in their opinion, the consolidated financial statements of the Pininfarina Group as at and for the

year ended 31 December 2014 comply with the IFRS endorsed by the European Union and the

Italian regulations implementing article 9 of Legislative decree no. 38/05.

KPMG’s report includes the same emphasis of matter paragraph as that set out in the Board of

Statutory Auditors’ report on the separate financial statements, to which reference is made.

Based on our checks and procedures, we state that:

- the consolidation scope, consolidation policies and procedures comply with the IFRS

requirements. Accordingly, the structure of the consolidated financial statements is technically

correct and, as a whole, consistent with relevant legislation;

- our examination of the directors’ report did not identify any inconsistencies with the figures and

results presented in the consolidated financial statements;

- all information used for consolidation purposes relates to the entire reporting period, which is

the year ended 31 December 2014;

- the accounting policies are consistent with those used in the previous year, except where stated

otherwise.

Lastly the chairman and the manager in charge of financial reporting issued a statement pursuant to

article 81-ter of Consob regulation no. 11971/1999, as subsequently amended, and article 154-

bis.3/4 of the Consolidated Finance Act (Legislative decree no. 58/1998).

Turin, 3 April 2015

STATUTORY AUDITORS

(Nicola Treves) (signed on the original)

(Giovanni Rayneri) (signed on the original)

(Mario Montalcini) (signed on the original)

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