Gruppo Coin - Annual Report 2010 (english)

OVS_A4_SS11_NewCollection.indd 2 06/12/10 11.17

ANNUAL REPORT 2010

ANNUAL REPORT2010

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ANNUAL REPORT2010

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“WITH COURAGE AND A VISION OF THE FUTURE, THAT IS HOW THE COIN GROUP HAS RESPONDED TO THE CHALLENGE

OF CHANGE”

SHAREHOLDERS,

2010 was another year in which the Coin Group was able to post highly satisfactory results. The strategy adopted to make the most of the consolidation of the Italian market has allowed our company to take another important step forward with the acquisition of Upim.

Net building sales, which include turnover achieved by “concession partners” stood at € 1,736.2 million, +38.1% as compared with the same period last year.EBITDA exceeded the threshold of two hundred million, reaching € 202.5 million (12.5% of net sales), up 35.4%, or +€ 52.9 million on 2009. EBIT was € 115.5 million, up € 23.4 million on 2009, after having absorbed greater amortisation and depreciation (+€ 29.5 million, of which around € 25 million related to the Upim perimeter acquired and the remaining part was mainly linked to the significant investment made in reconverting the Upim commercial network).Net income was positive for € 48.2 million, up 8.8% on 2009. Upim was particularly important, which, although still negative for € 8.2 million, recovered more than e 36 million on last year, although the benefits of synergies were only seen in the second half of the year. Excluding the effects of Upim, the Net Result would have been positive for € 56.4 million, up 27.4% on 2009.

Main events 2010.28 January saw the completion of the acquisition of 100% of the share capital of Upim srl, the company that managed 135 direct Upim-branded stores, 15 BluKids-branded stores and a franchising network of more than 200 stores. Great commitment also went into renewing the commercial network through the refurbishment of stores and their conversion into the formats of the OVS (54 stores, with sales of +41.4% on the same period of last year) and Coin industry brands (9 stores, with sales up by +46.1%). Coin Group management immediately began working on the integration of Upim into the Group’s business, exploiting all possible synergies in terms of administration, logistics, IT and, above all, buying processes, as best possible.

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The renewal of Upim also involved the new “Upim Pop” formula concerning 4 flagship stores in Milan and Rome. A sort of city centre shopping mall, featuring the inclusion of the most prestigious, most famous and highest quality brands. These are the brands the public seeks, and some of which are enjoying encouraging success in terms of sales and appreciation by a renewed customer base in the target. This success has convinced us to rapidly spread the concept to the entire Upim network, which will thus take place during 2011 and 2012.

Ovs industry has extended the perfume and beauty offers, along with footwear and home furnishing, enriching contents through an improved integration of the buying processes on a Group level, thereby benefitting from synergies in terms of creation, provisions and distribution of collections. In 2010, Ovs industry also signed agreements with important fashion designers for the creation of exclusive collections. In addition to the collaboration with Elio Fiorucci for the Baby Angel collection, which has now continued for several years, new collaborations have begun with Davide De Giglio (“Grand & Hills” casual menswear collection) and Ennio Capasa of Costume National (“Eequal” mens and womenswear collection).With effect from 1 October 2010, the chain of stores branded Magnolia was acquired from Bellavita Spa. This chain consists of around 50 sales outlets devoted to the distribution of children’s clothing in Italy. The acquisition of this small chain aims to consolidated the development path of the company in the children’s segment, by developing a new format branded “OVS KIDS”.

Coin has improved its offer, increasing the number of brands on sale, many of which are managed by concessions. Alongside the in-house brands, many fashion brands also help contribute towards the new Coin image of a “new shopping experience”, situated in the fashion world, for a space that is one of the most innovative and popular on the national scene. In spring 2010, Coin launched the project “Democratic Wear”: involving young international designers, thereby creating limited edition jeans, sneakers and rain jackets, all put on sale at the special price of just 10 euros. The first release, with the jeans designed by Japanese Yuka Morinishi, sold out completely in a few hours. Subsequent events, in particular the sale of a puffa jacket at 10 euros, saw long queues of customers form in front of the entrances to Coin, all seeking to purchase the “democratic” clothing items.The introduction of new brands continues, and should soon account for 80% of the total offer, thereby giving the public the possibility of choosing from an increasingly wide range of different fashion brands.

We are well aware that these dynamics of the Coin Group must find further outlets. We are looking to progress, grow and gain standing in broader and broader fields, where possible becoming internationally-recognised players: these are the challenges awaiting the team of managers, whom, once again, I would thank most sincerely.

STEFANO BERALDOCEO Coin Group

giubbotto

29,95 EURO

Angelika e Filippo

ANDY WARHOLDAUPIM

Apre la nuova upimin Corso Buenos Aires 21 a milano

Per la Prima volta un City shopping mall in italia ospita in una mostra esclusiva

le opere del Re della Pop Artdal 15 al 19 settembre 2010

oPening event oRe 20.30 sPeCiAL guest PLAtinette & niCoLA sAvino Dj set BY CRistiAn mARChi

miLAnoCorso Buenos Aires 21

via Polesine 39 angolo Piazzale Corvetto

RomAvia gioberti 64 angolo Piazza santa maria maggiore

via tuscolana 787 angolo via Ponzio Cominio 19

nasce il Primo shopping mall in Centro Città

uPim PoP in the CitY

www.PoP.uPim.it

sPeCiAL thAnks-AnD.ARion.AustRALiAn.CARPisA.CuLto.Dim.fiLAfioRi ReCisi.goPPion CAffÈ . LAYLA. Lee. LovABLe.miLunA.mo’ fooD CAfe’

RifLe.RoCCo gioCAttoLi.univeRso sPoRt.wonDeRBRA.wRAngLeR

AgAthA Ruiz De LA PRADA, AmoR, AnD, APPLe Bottoms, ARion, ARvAL, AustRALiAn, B. Young, BAgAtt, BARAzzoni, BiALetti, Bijoux BRigitte, CARPisA, CoAts CuCiRini, CReAm, CRoff, CuLto,DesiguAL, Dim, euRoniCs, feLtRineLLi, fiLA, fRAnk Q, fRAnsA, gAuDi,goPPion CAffÈ , iChi, inCiDenCe, jACkie&CeLine, kAffe, kiPLing, LAYLA,Lee, Levi’s, LovABLe, miLunA, mo’ fooD CAfe’, moki BAg, monDADoRi, nAu!, oReCA new, PAoLA PRAtA, PAoLo CAsALini, PLAYtex, Pink LADY, PuPA, RifLe, RimmeL, RoCCo gioCAttoLi, segue,sLoggi, sPitfiRe, sPRingfieLD, st. mARtins, univeRso sPoRt, womAn seCRet,wonDeRBRA, wRAngLeR, YAmAmAY, Yukiko

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MAIN FIGURES

€ 1,736.2 mln sales

€ 202.5 mln ebitda

€ 48.2 mln net result

872 stores

795,000 sqm selling area

9,498 employees

ANNUAL REPORT2010

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KEY EVENTS 2010

PANTONE806 C

OVS EXCEEDS THE THRESHOLD OF 500 STORES IN ITALY

OVS LAUNCHES THE “THOUSAND FACE” CAMPAIGNS WITH SCOTT SCHUMAN

OVS STARTS COLLABORATING WITH SAVE THE CHILDREN

OVS and Velvet create a capsule collection customised with the original graphics of designer Paula Castro

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KEY EVENTS 2010

COIN LAUNCHES THE “DEMOCRATIC WEAR” PROJECT OF LIMITED EDITION CLOTHES DEVELOPED BY EMERGING DESIGNERS ON SALE AT THE PRICE OF 10 EUROS

Milla Jovovich presents the new limited edition bag by Tommy Hilfiger for Breast Health International in the flagship store of Piazza V Giornate

COIN OPENS 22 NEW STORES

Raoul Bova and the entire cast of the Italian movie meet fans in the Coin store of Piazza V Giornate

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ANDY WARHOLDAUPIM

Apre la nuova upimin Corso Buenos Aires 21 a milano

Per la Prima volta un City shopping mall in italia ospita in una mostra esclusiva

le opere del Re della Pop Artdal 15 al 19 settembre 2010

oPening event oRe 20.30 sPeCiAL guest PLAtinette & niCoLA sAvino Dj set BY CRistiAn mARChi

miLAnoCorso Buenos Aires 21

via Polesine 39 angolo Piazzale Corvetto

RomAvia gioberti 64 angolo Piazza santa maria maggiore

via tuscolana 787 angolo via Ponzio Cominio 19

nasce il Primo shopping mall in Centro Città

uPim PoP in the CitY

www.PoP.uPim.it

sPeCiAL thAnks-AnD.ARion.AustRALiAn.CARPisA.CuLto.Dim.fiLAfioRi ReCisi.goPPion CAffÈ . LAYLA. Lee. LovABLe.miLunA.mo’ fooD CAfe’

RifLe.RoCCo gioCAttoLi.univeRso sPoRt.wonDeRBRA.wRAngLeR

AgAthA Ruiz De LA PRADA, AmoR, AnD, APPLe Bottoms, ARion, ARvAL, AustRALiAn, B. Young, BAgAtt, BARAzzoni, BiALetti, Bijoux BRigitte, CARPisA, CoAts CuCiRini, CReAm, CRoff, CuLto,DesiguAL, Dim, euRoniCs, feLtRineLLi, fiLA, fRAnk Q, fRAnsA, gAuDi,goPPion CAffÈ , iChi, inCiDenCe, jACkie&CeLine, kAffe, kiPLing, LAYLA,Lee, Levi’s, LovABLe, miLunA, mo’ fooD CAfe’, moki BAg, monDADoRi, nAu!, oReCA new, PAoLA PRAtA, PAoLo CAsALini, PLAYtex, Pink LADY, PuPA, RifLe, RimmeL, RoCCo gioCAttoLi, segue,sLoggi, sPitfiRe, sPRingfieLD, st. mARtins, univeRso sPoRt, womAn seCRet,wonDeRBRA, wRAngLeR, YAmAmAY, Yukiko

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ANDY WARHOL

DA UPIM

Per la Prima Volta un City Shopping Mall in Italia

Ospita in una Mostra Esclusiva le Opere

del Re della Pop Art dal 17 al 20 Settembre 2010

DJ Set by Cristian Marchi

ore 20.30 Special Guest

Elena Santarelli & Trio Medusa

OPENING EVENT Venerdì 17 settembre

KEY EVENTS 2010

UPIM POP IS THE FIRST SHOPPING MALL TO HOUSE WORKS BY ANDY WARHOL

UPIM POP IS CREATED, CITY CENTRE SHOPPING MALLS

UPIM SUPPORTS SCIENTIFIC RESEARCH WITH TELETHON

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2005 2006 2007 2008 2009 2010

92.3

114.7

144.6133.7

149.5

202.5

2005 2006 2007 2008 2009 2010

10.3

-4.5

43.5

38.2

44.3

48.2

1900

1700

1800

1600

1500

1400

1300

1200

1100

1000

2005 2006 2007 2008 2009 2010

1057.51116.7

1181.9 1173.4

1257.6

1736.2

SALES PERFORMANCE (€ MLN)

EBITDA (€ MLN)

NET PROFIT (€ MLN)

HISTORICAL TREND ANNUAL REPORT

2010

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2005

414.559430.976 455.469

541.752

729.000

795.000

2006 2007 2008 2009 2010

2005

344

2006 2007 2008 2009 2010

358394

499

690

872

2005 2006 2007 2008 2009 2010

56186091

6424 6537

9910

9498

SELLING AREA (SQM)

N° STORES

N° EMPLOYEES

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BOARD OF DIRECTORS

Andrea Carrara Chairman Stefano Beraldo Managing Director

Eric Bouchez Director Marta Coin Director

Piero Coin Director Roberto Ferraresi Director

Vit torio Levi Director

Michel M. Paris Director

Raffaele R. Vitale Director

BOARD OF STATUTORY AUDITORS

David Reali Chairman

Roberto Cortellaz zo Wiel Permanent Statutory Auditor

Carlo Hassan Permanent Statutory Auditor

Andrea Chiaravalli Substitute Statutory Auditor

Giuseppe Dolcet ti Substitute Statutory Auditor

INDEPENDENT AUDITOR

PricewaterhouseCoopers S.p.A .

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REPORT ON OPERATIONS 27

CONSOLIDATED FINANCIAL STATEMENTS

• Statement of consolidated financial position 56

• Consolidated income statement 57

• Statement of consolidated comprehensive income 57

• Consolidated cash flow statement 58

• Statement of changes in consolidated shareholders’ equity 59

EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 63 Basis of consolidation 66 Accounting policies and standards 68

Analysis of consolidated financial position items 82

Comment on the main items of the consolidated income statement 117 Related parties 124

RECONCILIATION BETWEEN NET EQUITY AND CONSOLIDATED NET PROFIT WITH HOLDING 127

STATEMENT OF THE GROUP’S COMPOSITION 128

APPENDICES TO THE CONSOLIDATED FINANCIAL STATEMENTS 129

DECLARATION BY THE MANAGER RESPONSIBLE 155

AUDITORS’ REPORT 159

CONSOLIDATED BALANCE AT 31 JANUARY 2011

ANNUAL REPORT2010

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ANNUAL REPORT2010

REPORT ON OPERATIONS

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ANNUAL REPORT2010

GRUPPO COIN

Report on operations at 31 January 2011 (Financial Year 2010)

The year just ended saw the company successfully involved in developing its network and consolidating its leadership position on the Italian market. The important growth factors that particularly marked the year include the following:- the integration of the assets of Upim, with a major renewal of its merchandise

offer, the restructuring of the commercial network through the conversion of 67 stores in the formats of the Group companies, OVS Industry and Coin and the creation of a new commercial formula aimed at renewing the company offer, called Upim Pop, which has been successfully implemented in a first group of stores;

- the consolidation and strengthening of the merchandising mix of OVS Industry in the segments of perfumes, shoes and household, as well as in the traditional clothing segment, particularly for the younger public, also through stylistic partnerships aimed at creating exclusive names for OVS Industry stores;

- the constant refinement of the commercial offer and Coin format;- the acquisition of the Magnolia chain, operating on the Italian market with 52

stores devoted to children’s items, with the aim of converting them into the OVS Kids format, thereby giving a strong boost to development plans in this segment.

Although the market was marked by a negative outlook for 2010 too, and only in the second half of the year were the first signs of an economic reprieve seen, the great commitment by the companies in the various development plans and the success of their development has yielded broadly positive results. Total building sales, which include turnover achieved by “concession” partners, stood at € 1,736.2 million, up 38.1% on the same period of last year. The main items of this growth are as follows:- +34.2% consolidation of the Upim perimeter (including, on the one hand the sales

made in converted stores and on the other the loss of turnover from stores that have closed or been disposed of and periods of temporary closure to allow for conversion). In 2010, sales in the Upim perimeter (€ 430.5 million) grew by +1.4% as compared with the same period of last year, thereby inverting the trend seen in the performance for the last two years.

- +3.8% growth enjoyed by Oviesse and Coin: both brands have shown positive sales trends, both in terms of network development and like-for-like sales.

EBITDA exceeded the threshold of two hundred million, reaching € 202.5 million (12.5% of net sales), up 35.4% or +€ 52.9 million on 2009 (which totalled € 149.5 million and 12.5% on net sales). The Operating Result was € 115.5 million, up € 23.4 million as compared with 2009 (€ 92.1 million), after having absorbed higher depreciation (+€ 29.5 million of which approximately € 25 million relative to the Upim purchases perimeter and the remaining part mainly linked to significant reconversion investments made involving the Upim commercial network). Financial charges stands at € 26.7 million, up € 8.1 million on 2009. This increase is mainly due to the debt of around € 100 million related to the acquisition of Upim.The net result was positive for € 48.2 million, up 8.8% on 2009. Considerable improvement for Upim which recorded more than 36 million on the net result compared with the previous year, even if improvement was really only seen during the second half of the year. Excluding the impact of Upim, the net result would be a positive figure of € 56.4 million, up 27.4% on 2009.As concerns financial management, as of 31 January 2011, the Group financial debt amounted to € 362.6 million, whereas it had totalled € 347.6 million as of 31 January 2010. The cash absorption recorded in 2010 mainly relates to the investments made in converting 67 ex-Upim stores to OVS Industry, Coin and Upim Pop formats, and an increase in warehouse stocks both to support the reopening of converted stores and to support the introduction of new collections and product segments within OVS Industry.

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ANNUAL REPORT2010

Upim integrationOn 28 January 2010, the Coin Group completed the acquisition, by a consortium consisting of Investitori Associati, Pirelli RE, Deutsche Bank and the Borletti family, of 100% of the share capital of Upim S.r.l., the company that managed 135 direct Upim-branded stores, 15 BluKids-branded stores and a franchising network of more than 200 stores. Immediately after completion of the acquisition, the Coin Group management and their teams immediately began working on the company’s operative management, with a view to ensuring the rapid integration into the Group’s activities, exploiting all possible synergies in terms of administration, logistics, IT and, above all, buying processes, as best possible. At the same time, and equal commitment was made to renewing the commercial network through the restructuring of stores and their conversion into the formats of the historic brands of OVS Industry and Coin. Just one month and half later, the first stores were re-opened in the OVS Industry format, with very positive sales performances indeed. Overall, throughout 2010, the following were converted:- 54 OVS Industry format stores with sales of +41.4% as compared with the same

period of last year;- 9 Coin format stores with sales up by +46.1%.The definition of a new commercial formula, “Upim POP”, was important, presenting as the first Italian city shopping mall, featuring the inclusion of the most prestigious, most famous and highest quality brands, and whose offer is completed by the very best Upim house-brands. This concept was implemented in 4 network stores with positive results in terms of sales and popularity with customers.The success seen has convinced the management to rapidly spread the concept to the entire Upim network not involved by the reconversion to OVS and Coin formats, and which will thus take place quickly over the forthcoming year.Finally, the integration of organisational and administrative processes came to a close with the transfer of all assets from the Upim Milan headquarters to those of Mestre as from July 2010. This therefore allowed for the closure of the Milan offices, just 6 months after acquisition and well ahead of the initial plans.

Consolidation and strengthening of the OVS Industry merchandising mix After having last year successfully tested the new offers in the merchandising segments of perfumes, shoes and household, in 2010 the diffusion of these proposals in the sales network extended and the contents were further enhanced. This has been made possible also thanks to the better and better integration of the buying processes on a Group level, thereby benefitting from synergies in the creation, provisioning and distribution of collections.OVS Industry has also signed agreements with important stylists for the creation and distribution of exclusive collections. In addition to the collaboration with Elio Fiorucci, for the Baby Angel collection, which has now continued for several years, new, profitable, long-term collaboration have begun, including those with Davide De Giglio for the creation of the Grand&Hills (casual clothing) and with Ennio Capasa who designed the EEqual collection.

Progressive improvement of the Coin offer with a constant increase of trademarks, many of which are managed by concessions.The consolidation path of Coin within the fashion world schedule, aimed at offering the most famous and well-known brands a showcase and one of the most innovative, popular sales areas, was further refined during the year just ended. In this sense, the partnerships both in concessions and with alternative commercial formulas have further developed, defining a product offer that, alongside our house-brands, creates a modern, varied assortment that is well able to meet the demands of modern department store customers. In Spring 2010, Coin has launched the innovative Democratic Wear Limited Edition project, aimed at creating, with the help of young stylists worldwide, capsules of clothing at a truly competitive price (10 euros). The first release was devoted to

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ANNUAL REPORT2010

Blue Jeans, created by the Japanese stylist Yuki Morinishi, launched on sale in Coin stores on 9 April and “sold out” in just a few hours. The same fortune was enjoyed by subsequent releases of the autumn season (Rain and Wind Jacket).

Magnolia Acquisition With effect as from 1 October 2010, Oviesse S.p.A. acquired the chain of stores branded Magnolia from the company Bellavita S.p.A.. This chain consists of around 50 stores devoted to the distribution of children’s clothing in Italy, managed directly or through affiliations. The acquisition of this small chain aimed to consolidate the development path of the company in the children’s segment by developing a dedicated format branded OVS Kids. The small stores, situated in town centres or shopping malls, were rapidly converted from December to January with particularly positive sales results and increases of more than 100% as compared with earlier formats. Overall the company in the children’s clothing segment confirms its absolute leadership position with a market share in Italy of 10.17%.

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ANNUAL REPORT2010

Economic results

The table below shows the consolidated economic results of 2010 compared with the proforma results of the previous year (including Upim from 1 february 2009 to 31 january 2010) and the consolidated results published in the Annual Report of 2009 (in millions of Euro)

Pro-forma 31 January 2011 31 January 2010 Change 31 January 2010 Change % su NS % su NS % su NS

Total Building Sales (a) 1,736.2 1,682.1 54.1 1,257.6 478.6 3.2% 38.1%

Net Sales 1,625.1 100.0 1,622.3 100.0 2.8 1,197.8 100.0 427.3 0.2% 35.7%

EBITDA (b) 202.5 12.5 141.9 8.7 60.5 149.5 12.5 52.9 42.7% 35.4%

Depreciation (86.9) (5.3) (91.0) (5.6) 4.1 (57.4) (4.8) (29.5)

EBIT (b) 115.5 7.1 50.9 3.1 64.6 92.1 7.7 23.4

Net financial income/(charges) (26.7) (1.6) (24.8) (1.5) (1.9) (18.6) (1.5) (8.1)

Operating result 88.8 5.5 26.1 1.6 62.7 73.6 6.1 15.3

Non recurring income/(charges) 5.4 0.3 (0.4) (0.0) 5.8 0.0 0.0 5.4

Pre-tax profit/(loss) 94.3 5.8 25.8 1.6 68.5 73.6 6.1 20.7

Income taxes (46.0) (2.8) (27.4) (1.7) (18.6) (29.3) (2.4) (16.8)

Net profit/(loss) 48.2 3.0 (1.6) (0.1) 49.8 44.3 3.7 3.9

(a) Total building sales include partners’ concession sales. (b) EBITDA and EBIT are to be considered reclassified on the basis of management criteria. Non-recurring income and charges are excluded; both are included in the consolidated accounts of operating income and costs.

The following main changes result from a comparison of the two periods:• Group total building sales, which include sales of concession partners within

our stores, amount to € 1,736.2 million, showing growth of +3.2%. • Consolidated net sales, totalling €1,625.1 million, are up on last year’s pro-

forma figure by +0.2% and suffer the effect of the closure, for at least 3-4 weeks, of the 67 Upim stores that were refurbished. In any case, in financial year 2010 the Coin Group consolidated its leadership position on the Italian clothing market, reaching a share of 6.15% (source Sitaricerca period January - December 2010), showing a clear increase on last year, when the pro-forma market share, considering Upim, was 5.65%.

• EBITDA amounted to € 202.5 million (12.5% of net sales) and was up 42.7% on the same pro-forma period of 2009 (€ 141.9 million and 8.7% of net sales).

• Amortisation and depreciation, amounting to € 86.9 million, was below the 2009 figure (€ 91.0 million), despite the major investments made to refurbish the Upim stores, by virtue of the divestments linked to reconversions and the closure of the Milan office.

• Net financial charges, equal to € 26.7 million (€ 24.8 million in pro-forma 2009) suffer the effect of the financial debt of Upim.

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ANNUAL REPORT2010

• The net result is positive for € 48.2 million (3.0% on net sales), showing a major increase on the pro-forma figure for last year, which was negative for -€ 1.6 million.

For a better understanding of the results achieved by the Coin Group in 2010, below is the consolidated pro-forma profit and loss account, which does not include the revenues and costs relating to the Upim perimeter, and which is therefore inclusive of the contribution made by stores converted into the OVS Industry and Coin formats (in millions of Euro):

31 January 2011 31 January 2010 Change % su NS % su NS

Total Building Sales (a) 1,305.7 1,257.6 48.1 3.8%

Net Sales 1,208.9 100.0 1,197.8 100.0 11.1 0.9%

EBITDA (b) 182.0 15.1 149.5 12.5 32.4 21.7%

Depreciation (62.2) (5.1) (57.4) (4.8) (4.8)

EBIT (b) 119.8 9.9 92.1 7.7 27.6


A comparison of periods shows the following main changes:• Group total building sales are up by 3.8%;• EBITDA amounted to € 182.0 million (15.1% of sales), up by +21.7% on 2009 (€ 149.5 million

and 12.5% of sales);

The economic results of the Group shown in the table above have been reclassified as compared with the financial statements drawn up in accordance with international accounting standards, in relation to:• impact on the purchase cost of goods of the change in the Euro/US$ exchange

rate, as compared with the standard rate determined on the basis of transactions in derivates specifically carried out in order to guarantee stability in purchase prices (for 2009);

• one-off items: in particular, non-recurrent, one-off items have been reclassified from components creating the EBITDA to one-off income and expense in order to provide an operating economic situation that shows a truer picture of the actual trend of the Group in 2010.

33

ANNUAL REPORT2010

The table below shows the different breakdown of EBITDA, which can be seen from the accounting schedules prepared in accordance with the international accounting standards, and that stated in the profit and loss account (core business) presented previously.

Economic results 2010 2009 Change (€ mln)

A Operating result 121.0 88.8 32.2

B of which non-recurring charges/(income) (5.4) (1.2) (4.3)

C of which foreign currency hedging charges/(income) 0.0 (4.5) 4.5

D Depreciation 86.9 57.4 29.5

E = A+D EBITDA 207.9 146.2 61.7

F = E+B-C ordinary EBITDA 202.5 149.5 52.9

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ANNUAL REPORT2010

Oviesse

Brand results without considering the contribution of the conversions of the ex-UPIM stores (million Euro):


Net sales 893.4 100.0 870.6 100.0 22.8 yoy change % 2.6% 8.3%

EBITDA (a) 165.3 18.5 141.7 16.3 23.6 yoy change % 16.7% 4.5%

Depreciation (44.5) (5.0) (41.3) (4.7) (3.2)

EBIT (a) 120.9 13.5 100.4 11.5 20.4

Note: Data on table above refer to Oviesse brand and then include revenues and Ebit of Oviesse Spa, Oviesse Franchising Spa, Oviesse d.o.o., Gruppo Coin Ungheria KFT, Gruppo Coin Department Store doo Serbia net of intercompany. (a) EBITDA and EBIT are to be considered reclassified excluding non-recurring charges.

Brand results including the contribution of the 54 ex-Upim stores from the re-opening with OVS Industry format compared with the pro-forma results for the same period of the 2009 (including the results of the 54 Upim stores in the same period of previous year):

31 January 2011 Pro Forma 31 January 2010 Change % su NS % su NS

Net sales 1,004.8 100.0 950.1 100.0 54.7 yoy change % 5.8%

EBITDA (a) 185.5 18.5 147.1 15.5 38.4 yoy change % 26.1%

Depreciation (48.5) (4.8) (45.3) (4.8) (3.2)

EBIT (a) 137.0 13.6 101.8 10.7 35.2

Note: Data on table above refer to Oviesse brand and then include revenues and Ebit of Oviesse Spa, Oviesse Franchising Spa, Oviesse d.o.o., Gruppo Coin Ungheria KFT, Gruppo Coin Department Store doo Serbia net of intercompany. (a) EBITDA and EBIT are to be considered reclassified excluding non-recurring charges.

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ANNUAL REPORT2010

Net sales of the Oviesse brand as of 31 January 2011 amount to € 1,004.8 million (+5.8% on 2009), benefitting from the results of the conversions of the ex Upim stores, the development of like-for-like sales and the expansion of the commercial network (e.g. the acquisition of Magnolia). EBITDA, amounting to € 185.5 million (18.5% of net sales), is up 26.1% on 2009.As of 31 January 2011, the Oviesse brand, including the 54 ex Upim stores, numbered 539 stores of which 395 direct stores in Italy (314 as of 31 January 2010) and 7 abroad, 75 franchising stores in Italy (69 as of 31 January 2010) and 62 franchising stores abroad (58 last year). Consolidation of international development has begun to contribute to turnover and margin.As concerns the market share in Italy, according to the Sitaricerca findings for the period January - December 2010, Oviesse stands at a 4.08% share, up on the 3.47% held in 2009, confirming its leadership of the clothing market in Italy.

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ANNUAL REPORT2010

Coin

Brand results without considering the contribution of the conversions of the ex-UPIM stores (million Euro):


Total Building Sales (a) 398.6 378.8 19.8 yoy change % 5.2% 3.0%

Net sales 301.7 100.0 319.0 100.0 (17.3) yoy change % -5.4% -6.1%

EBITDA (b) 17.4 5.8 8.8 2.8 8.6 yoy change % 97.8% n.a

Depreciation (17.8) (5.9) (16.0) (5.0) (1.7)

EBIT (b) (0.3) (0.1) (7.2) (2.3) 6.9

“Note: Data on table above refer to Coin brand and then include revenues and Ebit of Coin Spa and Coin Franchising Spa, Oviesse d.o.o., Gruppo Coin Ungheria KFT, Gruppo Coin Department Store doo Serbia net of intercompany. net of intercompany.


Brand results including the contribution of the 9 stores ex Upim, from the re-opening with Coin format, compared with the pro-forma results for the same period of the 2009 (including the results of the 9 Upim stores in the same period of previous year):

31 January 2011 Pro Forma 31 January 2010 Change % su NS % su NS

Total Building Sales (a) 434.5 403.6 30.8 yoy change % 7.6%

Net sales 328.3 100.0 343.8 100.0 (15.5) yoy change % -4.5%

EBITDA (b) 18.9 5.8 11.8 3.4 7.1 yoy change % 60.5%

Depreciation (19.2) (5.8) (17.5) (5.1) (1.7)

EBIT (b) (0.3) (0.1) (5.7) (1.7) 5.4

“Note: Data on table above refer to Coin brand and then include revenues and Ebit of Coin Spa and Coin Franchising Spa, Oviesse d.o.o., Gruppo Coin Ungheria KFT, Gruppo Coin Department Store doo Serbia net of intercompany. net of intercompany.


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ANNUAL REPORT2010

Net Coin building sales as of 31 January 2011 amounted to € 434.5 million (+7.6% on 2009); EBITDA, of € 18.9 million (5.8% of net sales) is up by 60.5% on 2009.Overall, as of 31 January 2011, the brands Coin, Luca D’Altieri, CoinGallery and CoinCasa number 52 direct stores (46 as of 31 January 2010), 4 outlet stores, 5 direct stores abroad, 28 franchising stores in Italy (24 as of 31 January 2010) and 10 abroad.

According to Sitaricerca findings for the period January - December 2010, the market share held by the Coin brand stood at 1.25%, up on the same period of last year, when it was recorded as 1.10%.

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ANNUAL REPORT2010

Upim

In the following table is shown the Upim Income Statement, including the converted stores compared to the 2009 results derived from the accounts of the acquired company (in million Euro):


Total Building Sales (a) 430.5 424.5 6.0

Net sales 416.2 100.0 424.5 100.0 (8.3)

EBITDA (b) 20.5 4.9 (7.6) (1.8) 28.1

Depreciation (24.7) (5.9) (33.6) (7.9) 8.9

EBIT (b) (4.2) (1.0) (41.2) (9.7) 37.0


The following table shows the results at 31 January 2011 excluding the revenues and costs of converted stores into OVS Industry and Coin formats (in million Euro):


Total Building Sales (a) 283.1 320.1 (37.0)

Net sales 278.2 100.0 320.1 100.0 (41.9)

EBITDA (b) (1.1) (0.4) (16.0) (5.0) 14.8

Depreciation (19.3) (6.9) (28.1) (8.8) 8.8

EBIT (b) (20.4) (7.3) (44.1) (13.8) 23.7


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ANNUAL REPORT2010

The economic figures shown in the table above are affected by many elements that have made negative contributions during the year, but which will no longer be in place as from financial year 2011. These include, the following of greatest relevance: stores with negative performance that are not compatible with conversion to OVS Industry or Coin and which have therefore been closed; temporary store closures, with major losses of turnover, to allow for refurbishment works involved in the reconversion; stores that have operated with commercial policies focussed on the disposal of products stocked in the warehouse at the time of acquisition; and, finally, the already-mentioned structural costs of the Milan office, that have been rationalised as from July 2010.

On the basis of Sitaricerca findings for the period January - December 2010, the market share held by the UPIM brand stood at 0.81%, showing a decline due to the conversion to OVS Industry and Coin brands and the closure of some stores recording only modest performance.

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ANNUAL REPORT2010

Gruppo Coin S.p.A.

Gruppo Coin S.p.A. is a holding of investments with tasks of providing strategic management, auditing and coordination of Group companies. Some operative activities not strictly linked to the specific nature of the various subsidiaries, are managed directly by the holding company, and this allows for scale economies to be achieved. The main activities that are centralised in Gruppo Coin S.p.A., which are supplied to subsidiaries, are: centralised treasury, with management tasks and the optimisation of flows and financial needs; administrative and tax services; legal services; the management and development of the network of stores; information technology activities; logistics and supply chain.

During the financial year 1 February 2010 - 31 January 2011, the holding company recorded income of € 94.1 million, mainly relating to services provided to subsidiaries. The year ended with a positive net result of € 20.3 million; the Shareholders’ Equity of Gruppo Coin S.p.A. as of 31 January 2011 amounted to € 317.9 million (as compared with the € 296.6 million as of 31 January 2010).

Other activities

OBS Oriental Buying Services Ltd., with registered office in Hong Kong, operates in the regions of the Far East (mainly China, Bangladesh and India and, more generally in non-European areas), as group agent, with the aim of selecting suppliers, supporting production and using its structures to monitor both costs and quality of product, ensuring that they are in line with the Group standards. Coherently with the project to increase imports from countries with competitive production costs, and diversify the countries of goods origin, in recent years, the company has pursued a continuous strengthening of its structures. In 2010, OBS Ltd. achieved a net positive result of € 14.8 million (€ 8.6 million in 2009).

Brand Zero S.p.A.The company incorporated in 2008, during the year began managing licenses and sub-licenses of the Love Therapy brand worldwide, with the stylistic collaboration of Elio Fiorucci. The year ends with a negative result of € 694 thousand.

Business to BusinessThe Group has begun working to make the most of development opportunities in the Business to Business scope, with the aim of becoming clothing supplier to important wholesale groups, making the most of its capacity to develop collections, its privileged access to supplies and its own important international sourcing platform. As such, the company COSI - Concept of Style Italy S.p.A. was incorporated, which began operating with some important Italian companies.During 2010, supplies continued to some important groups of domestic and European wholesale, and the company also devoted its work to defining and distribution the Upim store collections, whose buying structure has basically been replaced by the Group buying structures, in order to make best use of synergies. As a consequence of the new, significant commitments made, therefore, the management has decided to cease supplies of the autumn/winter 2011 collection, existing relations with wholesale customers, instead concentrating more resources on the supply of Upim goods.

The year ends with a net profit of € 1,680 thousand.

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ANNUAL REPORT2010

Invested capital and shareholders’ equity

The most important items of the consolidated financial and equity position, which include the newly-acquired Upim S.r.l., as compared with those as of 31 January 2010 are as follows (in million Euro)

31 January 2011 31 January 2010 Change (a)

Receivables 81.8 75.0 6.8

Inventory 354.2 260.1 94.0

Payables (502.9) (428.4) (74.5)

Net Operating Working Capital (66.9) (93.2) 26.3

Other assets and liabilities (63.8) (76.7) 12.9

Net Working Capital (130.7) (169.9) 39.3

Tangible and Intangible assets 1,139.1 1,125.7 13.4

Net deferred taxes (79.5) (69.3) (10.2)

Other long-term assets and liabilities 10.0 5.7 4.3

Pension fund and other provision funds (81.6) (92.9) 11.3

Net Capital Employed 857.4 799.2 58.1

Net equity 494.8 451.7 43.1

Net financial debt 362.6 347.6 15.0

Total financial sources 857.4 799.2 58.1

(a) To be compared, some values of consolidated financial statements for 2009 are re-exposed after the conclusion of Purchase Price Allocation process relative to Upim Srl, acquired on 28 january 2010.

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ANNUAL REPORT2010

Financial operations

The trend of the financial position is shown in the Consolidated cash flow statement given below, reclassified according to managerial criteria (in million Euro)

31 January 2011 31 January 2010 Change

EBITDA 202.5 149.5 52.9

Net Working Capital variation (39.3) (1.0) (38.2)

Capex (100.4) (59.7) (40.8)

Disinvestments 4.5 2.2 2.3

Operating Cash Flow 67.2 91.0 (23.8)

Financial charges (24.3) (15.7) (8.6)

Severance indemnity payment (14.5) (7.2) (7.3)

IRAP and other tax payment (21.5) (22.5) 1.0

Others (15.1) (11.2) (3.8)

Net Cash Flow (ante derivatives effect) (8.2) 34.4 (42.6)

MtM derivatives changing (a) (6.8) (22.9) 16.1

Net Cash Flow (ante acquisition) (15.0) 11.5 (26.5)

Acquisitions (b) 0 (83.2) 83.2

Net Cash Flow (15.0) (71.7) 56.7

(a)NFP is affected by the measurement to Mark to market of the derivatives in dollars; the variation of this post, which influence the change in the NFP, must be regarded as a mere accounting issues and therefore should not be taken into account in evalua (b) Upim acquisition and Management capital increase in 2009.

In 2010, the Group generated Operative Cash Flow of € 67.2 million, which although less than the € 91 million for 2009, is justified by the major commitment made in integrating Upim, in restructuring its commercial network and, finally, in refining the new commercial proposals made by OVS Industry and Coin, which have resulted in increased purchases of goods.

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ANNUAL REPORT2010

The consolidated net financial debt as of 31 January 2011 amounts to € 362.6 million (in million Euro):

31 January 2011 31 January 2010 Change

Cash & cash equivalents and net short-term financial assets 71.8 118.7 (46.9)

Short-term bank debt (151.5) (121.7) (29.8)

Short-term financial credits/debts on derivatives 4.5 3.6 0.9

Short-term financial amounts payable to other financial creditors (4.5) (36.4) 31.9

Short-term net financial position (79.7) (35.8) (43.9)

Medium-term bank debt (240.0) (273.8) 33.8

Medium-term parent company debt (29.8) (28.5) (1.3)

Medium-term financial credits/debts on derivatives (3.7) 4.0 (7.7)

Medium-term financial amounts payable to other financial creditors (9.4) (13.5) 4.1

Middle/long term financial position (282.9) (311.8) 28.9

Net financial position (362.6) (347.6) (15.0)

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ANNUAL REPORT2010

Economic situation and general reference market

The Italian economic trend for 2010 featured a modest growth to the GDP (+1.0%), inflation at 1.5%, up on the +0.8% recorded for last year and a trend in consumptions marketed by stores with fixed establishments that is practically on a par with last year (+0.2%).

In this general context of the economy and in a market that is still in a recession, the clothing market in Italy in 2010 was negative, or even slightly worse than 2009, as can be seen from the table below:

Clothing market trend

2010/2009 2009/2008

Expenditure -2.0% -1.8%

Quantity -0.7% -2.5%

Price -1.3% +0.7%

In this situation, the Coin Group achieved a market share of 6.15% as compared with the 5.65% recorded for last year (including the brands of Oviesse, Coin and Upim under this umbrella).The growth of the Group share is due to the increase of the historic brands of Coin and OVS Industry, an increase that has more than offset the drop in the Upim share, the company acquired at the end of January 2010 and in which regard optimisation and transformation works are still underway.

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ANNUAL REPORT2010

The Group structure

Liquidation procedure of Wandar S.r.l. has been started in 2005.

GRUPPO COIN S.p.A.

Coin S.p.A.

Upim S.r.l.

Coin Franchising S.p.A.

Centomilacandeles.c.p.a.

Brandhouse Oviesse Ltd - India

COSI - Concept of Style Italy S.p.A.

Oviesse d.o.o. Slovenija

Gruppo CoinUngheria K.f.t.

Oriental Buying Services Ltd -

Hong Kong

Obs India Private Ltd - India

Obs Retail LtdHong Kong

Cosi International Ltd - Hong Kong

Cosi International(Shanghai) Ltd

Brand Zero S.p.A.

Wandar S.r.l. Winding Up

Gruppo Coin Department

Stores d.o.o Srbija

Gruppo Coin international

S.A. - Luxembourg

Oviesse Franchising

S.p.A.

100%

4.16%

16.63%

100%

37.50%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Oviesse S.p.A.

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ANNUAL REPORT2010

Market risk management

Market risks include the effects that changes in the market may have on the commercial business of the company, which is sensitive to changes in consumer spending choices. Positive results can, amongst other matters, be affected by the business panorama, interest rates, taxation, local economic conditions, uncertainty on future economic prospects and a move towards other goods and services in spending choices. Consumer preferences and economic conditions may change in each market in which we operate.We must be able to offset deflation pressure on prices deriving from increased competition and changes in consumer choices, that may have negative effects on the financial position and economic results.

Management of financial risks and operational risks

The Group operates under the scope of commercial business, involving both retail and wholesale, and is therefore exposed to market risks linked to changes in interest rates, in exchange rates and in the prices of goods. The risk of price changes and cash flows is linked to the intrinsic nature of the business and is only partially able to be mitigated through the use of appropriate risk management policies.

• Credit risk Credit risk is the Group’s exposure to the risk of potential losses deriving from

counterparty default. As of 31 January 2011, there was no significant concentration of credit risk, as this

risk is mitigated by the fact that credit exposure is divided up over a large customer base.

In order to reduce the risk generally, the Group obtains guarantees in the form of bank security, to cover loans granted for the supply of goods.

Financial operations are booked net of impairment calculated on the basis of the risk of counterparty default, determined considering all information available on the solvency of the customer in addition to historic data.

• Liquidity risk Liquidity risk is the risk that financial resources may be difficult to obtain. At present, the Group considers that through the availability of sources of finance

and credit lines, it has access to sufficient funds to satisfy the forecast financial demands.

• Risk of price change and cash flow The Group margins are affected by changes in the prices of goods processed. If a reduction in the price of articles sold is not accompanied by a corresponding

reduction in purchase prices, this generally involves a decrease in operating results. Additionally, the Group’s cash flow is exposed to risks of changes in exchange rates

and market interest. In greater detail, exposure to exchange rates derives from the Group’s operations in currencies other than the euro, in which the Group purchases a significant share of the products sold and which are listed or linked to the US dollar.

Changes in interest rates affect the market value of the Group’s financial liabilities and the amount of net financial expense.

Objectives and policies on the management of risks of cash flow changes

Group treasury activities are centralised in the holding company Gruppo Coin S.p.A., which is the only interlocutor for all group companies with regards to credit institutes. Infra-group relations are regulated by specific contracts drawn up at market conditions.

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ANNUAL REPORT2010

Gruppo Coin S.p.A. adopts guidelines on financial operations which involve stipulating derivative financial instruments, mainly on demand and on behalf of its operative subsidiaries, in order to reduce the exchange rates with regards to the US dollar and risks of changes in interest rates.

• Derivative contracts

Nominal value of financial derivative contracts The term nominal value of a financial derivative contract is used to refer to the

amount in monetary quantities of each contract. The monetary quantities in foreign currencies are converted into euros at the exchange rate in place on the date of the financial year end.

Management of the interest rate risk Gruppo Coin S.p.A. has stipulated contracts to manage interest rate risks. These

include both Interest Rate Swaps and Interest Rate Collars. Given, in fact, that the forecast rate rises were not excessive, to avoid restricting an excessive share of the financial debt at fixed rate, the choice has fallen to structuring Collar transactions, involving:

A) payment of a fixed rate (“cap”), if the market rate exceeded this level; B) payment of the market rate, if falling between the Cap and a lower level (Floor); C) payment of a fixed rate higher than the Floor, if the market rate dropped below

the Floor.

However, during the financial year, Collar transactions reached their natural expiry and, therefore, as of the year end date, only the Interest Rate Swap contracts remained.

Managing the exchange rate risk Gruppo Coin stipulates various types of contracts on currencies to manage the

exchange rate risk related to future purchases in currency. These contracts are mainly used to cover the risk that the foreign currency (US $)

appreciates. Furthermore, Gruppo Coin also uses “Options” contracts, again to hedge the risk

of appreciation of the foreign currency, but in this case, there is no need to buy this currency at the time of expiry of the contract, as the buyer has the option to buy on the market if the exchange rate trend has taken an opposite direction to the purchase of the hedge.

Investment and development

In the period considered, investments were made in tangible assets for € 93.7 million and in intangible assets for € 8.0 million, mainly concerning the purchase and refurbishment of stores. During the year, 67 Upim stores were converted, of which 54 branded Oviesse Industry, 9 branded Coin and 4 branded Upim Pop.Additionally, during 2010, 36 new direct Oviesse Industry stores were opened (including 4 stores converted from ex Mela Blu and 20 from Magnolia).

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ANNUAL REPORT2010

Staff

During 2010, the Group took various steps aimed at optimising the organisational structure and developing the skills of collaborators, in direct support of the current growth programmes. In particular, an integrated plan of action has been developed to ensure a rapid, efficient integration and reorganisation with involvement of the workforce, following acquisition. An agreement has been drawn up with Sindacato Nazionale del Commercio (the National Trade Union for Commerce), which regulated both the closure of the Milan office and the adoption, in all stores acquired, of the Group organisational models, which ensure greater flexibility and limited costs of labour. In June, the restructuring of the various departments of the Mestre office had already been completed, allowing for the absorption of all central Upim activities involving more than 200 collaborators, and the Milan office could thus be closed, implementing a path involving recourse to extraordinary lay-off funds and plans in support of relocation, achieving significant synergies and efficiencies. In a parallel manner, opening hours and structures of all stores were reorganised and training delivered on all levels of the Upim sales team, in order to accelerate the adoption of new processes and improve the image and customer service. Overall, the main actions taken were:• strengthening the competencies dedicated to creating the House Brand assortments,

both by introducing new resources with experience and skills in style and product fields, and by developing working methods able to optimise the distinctive nature of the assortments and the collaboration with external stylists. In a parallel manner, the OBS structure devoted to international sourcing was evolved to extend the search for suppliers able to meet the new quality demands, whilst guaranteeing maximum synergies and optimising costs;

• creation of new structures devoted to developing new projects under the scope of the offer, such as EEqual, Profumeria Shaka and House Brand shoes;

• strengthening the competencies devoted to research and development of cooperation with external brands, in particular for Coin and Upim Pop;

• growth of the structures devoted to export development, identifying new competencies and new methods of supporting stores operating in other countries;

• development of a great many interventions on the direct Coin, Oviesse and Upim network in order to combine growth with the cost cutting obtained from work in line with sales trends, focussing on an organisation of the work that is able to combine efficiency, flexibility and coherent service levels to customers.

The development of competencies and performance levels of collaborators involved the main business areas. In the Oviesse sales network, the “Job Master” dedicated to future sales outlet managers involved more than 70 students and allowed more than 50 new Managers to be trained. The growth paths of the main specialised figures were implemented in parallel: Department Heads and Visual to strengthen the image of OVS Industry. In Coin, action aimed to increase the skills and competencies of management, Directors, Store Managers and Visual. In the Product and Purchases area, the in-house “Retail School” laid the basis by which to ensure new in-house training paths, in cooperation with entities, universities and stylists, both for planned new entries and the constant overall updates, with a view to optimising the individual competencies of retail and fashion. Significant progress was also made on negotiations for the renewal of the National Employment Agreement for the three-year period 2011-2013, which saw Confcommercio/Federdistribuzione talking to the national trade unions with a view to introducing some innovation to fight absenteeism, strengthen flexibility, increase effective working hours and define salary increases in line with the inflation rates forecast. The agreement reached in February saw a result that was in line with these needs.

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ANNUAL REPORT2010

Finally, we would like to provide an analysis of the overall quantitative data.

The average age has decreased by 3 months, taking it to 38 years and 2 months, in parallel average seniority has gone from 12 years and 6 months to 11 years and 1 month.Female employees account for 80.86% of the total and schooling levels are up by 8%: university and secondary school graduates now account for 75% of the entire workforce.During the year, 2,663 fixed-term contracts were stipulated. The overall average Group employment level during financial year 2010 stood at 8,121 Eqft. The employment level of Gruppo Coin as of 31 January 2011, as compared with the start of the year, was as follows:

31/01/2011 31/01/2010

Number of employees 9,498 7,140- of which working abroad 371 270

Average number of employees 9,500 7,045

- of which working abroad 308 250

Average number of employees 8,121 5,945- of which working abroad 308 250

It is specified that the details as of 31 January 2010 do not include the workforce of Upim S.r.l., which, on this date, amounted to 2,770 employees.

The increase of staff abroad mainly lies in the strengthening of OBS as a consequence to the increased volumes purchased abroad and the opening of direct management sales outlets. The growth dynamic seen in Italy is mainly linked to the acquisition of Upim.

Risks linked to the environmental policy

In compliance with the provisions of art. 2428, paragraph 2 of the Italian Civil Code, it is specified that the Group goes about its business in complete compliance with provisions concerning the environment and health and safety at work.

Programmatic document on data security - Italian Legislative Decree no. 196 of 30.06.03

The Group has complied in full with the provisions of privacy law, duly providing suitable instruction under the scope of the internal audit system. We have adjusted to comply with the minimum security requirements envisaged in adopting the programmatic document on data security established by said Legislative Decree.

Research and development

We should point out that during the financial year, the company did not carry out any research and development in the sense of the provisions established by the accounting standards. Despite this a certain number of people are constantly involved in creating and developing collections, with the aim of guaranteeing an exclusive offer, in line with the position of the three brands.

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ANNUAL REPORT2010

Equity investments held in Gruppo Coin S.p.A. by the members of the corporate bodies

In relation with the provisions of CONSOB regulation no. 11971, we would hereby disclose the equity investments held by the directors, auditors, general managers and executives with strategic responsibilities in the company or in its subsidiaries, in accordance with scheme 3) of annex 3C) to said Regulation:

No.OF SHARES No. OF SHARE

OWNED AT THE BOUGHT No. OF SHARES

END OF DURING THE No. OF SHARE SOLD OWNED AT THE END

NAME AND SURNAME COMPANY PREVIOUS YEAR YEAR DURING THE YEAR OF CURRENT YEAR

Beraldo Stefano Gruppo Coin S.p.A. 1,738,361 -- -- 1,738,361

Coin Marta Gruppo Coin S.p.A. 100 -- -- 100

Pampani Fabio Gruppo Coin S.p.A. 325,750 -- -- 325,750

Sama Francesco Gruppo Coin S.p.A. 151,196 -- -- 151,196

Zoppas Giovanni Gruppo Coin S.p.A. 202,065 -- -- 202,065

Related party transactions

In compliance with CONSOB resolution no. 15519 of 27 July 2006, at the foot of the consolidated accounting schedules, where significant, we have specified the values of the individual items relating to related party transactions.The explanatory notes also provide the information required by CONSOB communication no. 6064293 of 28 July 2006 and details of related party transactions. We would also point out that the new procedure governing related party transactions, in accordance with that provided for by the Consob Regulation approved by resolution no. 17221 of 12 March 2010, in was approved by the Board of Directors in the meeting held on 17 November 2010, and came into effect on 1 January 2011.

Reconciliation of shareholders’ equity and the consolidated result with those of the holding company

The statement of the period result and shareholders’ equity of the group, comparing these with the equivalent figures of the holding company, as required by Consob communication no. 6064293 of 28 July 2006, is included in the explanatory notes to the consolidated financial statements.

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ANNUAL REPORT2010

Subsequent events

No significant events have been reported after the end of the financial year.

Foreseeable evolution of operations

February and March were marked by a very rainy climate, particularly during the weekend. Additionally, this year, Easter fell in April, whilst last year it was in March, and this has determined a reduction of customer traffic in our stores. In April, with the arrival of a more favourable climate, sales immediately showed strong growth.In these first months of 2011, conversion activities continued, both of the Upim network (13 stores were converted and reopened, of which 9 OVS Industry, 2 Coin and 2 Upim Pop); the development plan of our children’s brand continued, with the conversion of 2 ex Magnolia stores to OVS Kids and 3 stores, again ex Magnolia, were converted to the new T-WEAR format, in addition to the opening of 2 new OVS Industry stores.In this sense, we should point out that the 2011 objective is to proceed with the development of small format OVS Kids and T-WEAR, with the idea of rapidly reaching a national dimension of these formats too, in order to better consolidate the Group’s growth path.In terms of the commercial offer, we should point out the positive reaction by customers for the new exclusive names of OVS Industry (Grand&Hills and EEqual).Finally, we should point out the evolution of the project Democratic Wear for Coin, from a means by which to promote young talent to a tool by which to achieve solidarity purposes, as was the case of the launch of the limited edition of Arc Pant of G-Star RAW in March 2011, the sales of which will fund the activity of Action Aid in Sierra Leone.

p. the Board of Directors CEO Stefano Beraldo

e presentano EEQUAL.

EEQUAL.IT

e presentano EEQUAL.

EEQUAL.IT

55

ANNUAL REPORT2010

CONSOLIDATED FINANCIAL STATEMENTS

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ANNUAL REPORT2010

Statement of consolidated financial position (thousand of Euro)

ASSETS 31 January 2011 31 January 2010 (*) Note

Current assets

Cash and cash equivalents 71,837 118,715 1

Trade receivables 81,827 75,035 2

Inventories 354,163 260,139 3

Financial assets 6,700 6,985 4

Current tax assets (A) 839 3,760 5

Other receivables 39,826 40,176 6

Current assets 555,192 504,810

Non current and fixed assets

Property, plant and equipment 343,372 320,978 7

Intangible fixed assets 634,235 644,454 8

Goodwill 159,557 159,557 9

Equity investments 1,963 722 10


Other rec, 9,960 5,679 12

Non-current assets 1,150,784 1,135,922

TOTAL ASSETS 1,705,976 1,640,732

LIABILITIES AND NET EQUITY 31 January 2011 31 January 2010 (*) Note

Current liabilities

Financial liabilities 158,227 130,336 13

Trade payables 502,893 459,595 14

Current tax liabilities (B) 10,025 1,242 15

Other payables 94,402 119,405 16

Current liabilities 765,547 710,578

Non current liabilities

Financial liabilities (C) 284,573 316,267 17

Employee termination indemnity provision 62,078 75,357 18

Provisions for risks and charges 19,482 17,533 19

Current tax liabilities 79,500 69,337 20

Non-current liabilities 445,633 478,494

TOTAL LIABILITIES 1,211,180 1,189,072

NET EQUITY

Share Capital 14,309 14,309 21

Reserves for purchase of treasury shares 0 0

Other reserves 432,256 393,053 22

Net result for the year 48,231 44,298

TOTAL NET EQUITY 494,796 451,660

TOTAL LIABILITIES AND NET EQUITY 1,705,976 1,640,732

(A) Including 1,963 thousand Euro as at 31/01/10 towards parent companies. (B) Including 6,839 thousand Euro as at 31/01/11 towards parent companies. (C) Including 29,797 thousand Euro as at 31/01/11 and 28,500 thousand Euro as at 31/01/10 towards parent companies. (*) To be compared, some values of consolidated financial statements for 2009 are re-exposed after the conclusion of Purchase Price Allocation process relative to Upim Srl, acquired on 28 january 2010.

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ANNUAL REPORT2010

Consolidated income statement(thousand of Euro)

31 January 2011 31 January 2010 Note

Revenues 1,625,102 1,197,792 24

Other operating income and revenues 110,890 58,006 25 of which non-recurring 20,689 1,184

Total Revenues 1,735,992 1,255,798

Purchase of raw materials, consumables and goods 832,486 533,539 26

Personnel expenses 323,926 232,120 27 of which non-recurring 9,207 0

Amortisation, depreciation and write-downs of fixed assets 86,935 57,418 28

Other operating costs:

Costs for services (D) 220,400 160,645 29 of which non-recurring 1,636 0

- for use of third party assets 212,246 148,978 30 of which non-recurring 3,224 0

- write-downs and allocationsi 8,263 4,302 31 of which non-recurring 638 0

- other operating charges 24,811 19,824 32 of which non-recurring 538 0

- change in inventories (94,037) 10,165

Net result before net financial charges and taxes 120,962 88,807

Financial income 233 392 33

Financial charges (29,426) (18,170)

Exchange differences 2,509 3,715

Income (charges) from equity investments 0 (1,182)

Pre-tax net result for the year 94,278 73,562

Income taxes (34,137) (21,692) 34

Deferred taxes (11,910) (7,572)

Net result 48,231 44,298

Earning per share (Euro)

base 0.34 0.34

diluted 0.34 0.34

(D) Including related entities for 23,295 thousand Euro as at 31/01/11 and 25,636 thousand Euro as at 31/01/10

Statement of consolidated comprehensive income (thousand of Euro) 31 January 2011 31 January 2010

Net Profit (A) 48,231 44,298

Profit/(loss) directly registered to reserve of cash flow hedge (8,210) (21,789)

Taxes of entry registered to reserve of cash flow hedge 2,258 5,992

Profit/(loss) actuarial to ESI 1,498 (146)

Taxes profit/(loss) actuarial to ESI (412) 40

Profit/(loss) directly registered to conversion reserve (229) (1,104)

Profit/(loss) directly registered to net equity (B) (5,095) (17,007)

TOTAL (A) + (B) 43,136 27,291

58

ANNUAL REPORT2010

CONSOLIDATED CASH FLOW STATEMENT (thousand of Euro)

Note 31 January 2011 31 January 2010

Operating activities

Net profit/ (loss) fot the period 48,231 44,298

Provisions for income taxes 34 46,047 29,264

Changes for:

Assets depreciation and write-offs 28 86,935 57,418

Net capital gains/ (losses) on assets (1,822) (39)

Writedowns of equity investments in subsidiaries 33 0 1,182

Net financial income/ (charges) 33 30,218 18,746

Gain/ (losses) on exchange rate differences and derivatives 33 (4,309) (7,782)

Fair value profit/ (loss) of derivatives 33 775 3,099

Provisions 18-19 5,021 1,284

Utilisation of funds 18-19 (17,551) (15,829)

Cash flow from operating activities before changes in circulating capital 193,545 131,641

Cash flow generated by changes in circulating capital 2-3-5-6-12-14-15-16-20 (79,271) (20,509)

Payment of taxes (21,526) (22,467)

Net received/ (paid) interest (24,347) (15,701)

Foreign exchanges 4,025 8,152

Other changes (5,903) (293)

Cash flow from operating activities 66,523 80,823

Investing activities

(Investments) in fixed assets 7-8-9 (100,426) (59,658)

Disposals in fixed assets 7-8-9 4,480 2,183

Change in equity investments in subsidiaries 10 (1,291) 266

Cash out for business combination netof cash acquired including costs accessories (5,681) 42,755

Cash flow from investing activities (102,918) (14,454)

Financing activities

Change in financial assets/ liabilities 4-11-13-17 (10,483) (18,422)

Right issues 21-23 0 10,530

(Purchase) of treasury shares 22 0 (4,979)

Cash flow from financing activities (10,483) (12,871)

Increase/(decrease) of liquidity (46,878) 53,498

Net liquidity opening balance 118,715 65,217

Net liquidity closing balance 71,837 118,715

59

ANNUAL REPORT2010

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63

ANNUAL REPORT2010

EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

64

ANNUAL REPORT2010

EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STRUCTURE AND CONTENT OF YEAR-END FINANCIAL STATEMENTS

In accordance with Regulation no. 1606/2002 issued by the European Parliament and the European Council and adopted with Italian Legislative Decree no. 38/2005, the consolidated financial statements of the Coin Group as of 31 January 2011 have been prepared according to the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board and homologated by the European Union. The term “IFRS” is also used to refer to all reviewed international accounting standards (International Accounting Standards or IAS), all interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”), including those previously issued by the Standing Interpretations Committee (“SIC”).

The consolidated financial statements of the Coin Group as of 31 January 2011 are drawn up in compliance with the “Regulation incorporating the implementation rules of Italian Legislative Decree no. 58 of 24 February 1998 on issuers” (Consob regulation no. 11971 of 14 May 1999 and subsequent amendments and supplements).

The consolidated financial statements of the Coin Group, consisting of the Statement of consolidated financial position, the Consolidated income statement, the Statement of consolidated comprehensive income, the Consolidated cash flow statement, the Statement of changes in the consolidated shareholders’ equity and the Explanatory Notes, are presented in euros, as the currency used in the economies in which the Group mainly operates and figures are given in thousands of euros, unless otherwise specified. With regards to the method by which the consolidated accounting schedules are presented, the company has chosen the following types:- Statement of consolidated financial position: assets and liabilities are analysed

according to maturity, separating current from non-current items;- Consolidated income statement: this is a scalar profit and loss account, analysed

according to nature; - Statement of consolidated comprehensive income: presented separately from the

consolidated profit and loss account and the individual items are stated gross of the tax effect;

- Consolidated cash flow statement: the statement shows cash flow deriving from operative operations, investment and loans. For its preparation, the indirect method is used;

- Statement of changes in consolidated shareholders’ equity : this is presented stating the period result separately and all income and expense that is not posted to the profit and loss account, but rather directly stated on the shareholders’ equity, according to specific IAS/IFRS accounting standards and is presented with separation of transactions implemented with shareholders.

These explanatory notes show the values stated on the consolidated financial statements of the Coin Group through the analysis, development and comments on them. They are supplied with extra information as deemed necessary in order to provide a truthful, correct representation of the equity, financial and economic position of the Coin Group.The changes that have been seen in the balances of the items of the assets and liabilities are explained where significant.

Please refer to the report on operations with regards to information relating to the nature of the business and significant events occurring after the end of the financial year.

The financial statements are legally audited by PricewaterhouseCoopers S.p.A..

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ANNUAL REPORT2010

CONSOLIDATION AREA

The consolidated financial statements include the financial statements of all subsidiaries as from the date on which control is assumed and until such time as said control should cease.Below is a list of companies included in the consolidation using the line-by-line method:

Companies Registred Location Shares Capital % Ownership

Italians Companies

Gruppo Coin S.p.A. Ve - Mestre 14,308,744.40 EUR Holding

Coin S.p.A. Ve - Mestre 10,000,000.00 EUR 100%

Coin Franchising S.p.A. Ve - Mestre 200,000.00 EUR 100%

Oviesse S.p.A. Ve - Mestre 20,015,500.00 EUR 100%

Oviesse Franchising S.p.A. Ve - Mestre 1,000,000.00 EUR 100%

Upim S.r.l. Ve - Mestre 5,154,264.14 EUR 100%

Brand Zero S.p.A. Ve - Mestre 200,000.00 EUR 100%

Cosi - Concept Of Style Italy S.p.A. Ve - Mestre 120,000.00 EUR 100%

Foreing companies

Gruppo Coin International S.A. Lussemburgo 1,505,000.00 EUR 100%

Oviesse D.O.O. Koper - Slovenia 300,000.00 EUR 100%

Gruppo Coin Dep. Stores D.O.O. Belgrado - Serbia 4,624,795 RSD 100%

Oriental Buying Services Ltd Hong Kong 585,000 HKD 100%

Obs India Private Ltd Delhi - India 15,000,000 INR 100%

Cosi International Ltd Hong Kong 10,000 HKD 100%

Cosi International (Shanghai) Ltd Shanghai - Cina 1,000,000 RMB 100%

Gruppo Coin Ungheria K.F.T. Budapest - Ungheria 60,000,000 HUF 100%

The period of reference for these consolidated financial statements is from 1 February 2010 to 31 January 2011. Where necessary, the financial statements used to prepare the consolidated financial statements have been suitably reclassified and adjusted to adapt them to the Group’s accounting standards.

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ANNUAL REPORT2010

BASIS OF CONSOLIDATION

The consolidated financial statements includes the financial statements of the holding company Gruppo Coin S.p.A. and of the companies over which it has the right to exercise control. The definition of control is not based exclusively on the concept of legal ownership. Control exists when the Group has the direct or indirect power to govern the financial and operative policies of a company in order to obtain the related benefits. The financial statements of subsidiaries are included in the consolidated financial statements as from the date on which control is assumed and until such time as said control should cease. The consolidated financial statements do not include subsidiaries in liquidation that are insignificant and insignificant businesses. Their influence over total assets, liabilities, the financial position and the Group result is irrelevant.Subsidiaries excluded from the scope of consolidation are measured using the equity method and recorded as “Equity investments”.

The main criteria for consolidation adopted are as follows:• for equity investments consolidated according to the line-by-line method and

eliminating the book value of the individual equity investments consolidated as the offset to the related shareholders’ equity with the assumption of the assets, liabilities, costs and income of subsidiaries, regardless of the entity of the investment held;

• all balances and transactions between companies of the group are eliminated, as are profits and losses (the latter if not representative of an effective lesser value of the goods sold) deriving from commercial operations, including sales of business units in companies controlled by the holding company or intra-group financial transactions not yet implemented with regards to third parties;

• the booking of the acquisitions of subsidiaries by the Group is carried out according to the purchase method established by international accounting standard IFRS 3 “Business combinations”. The cost of an acquisition is intended as the fair value, on the date of the transfer of control, of the assets sold, the liabilities assumed or the instruments representing capital issued in exchange for the control of the company acquired. This cost is increased by all costs directly attributable to the acquisition. According to the purchase method, the cost of the business combination is allocated to identifiable acquired assets and liabilities and potential liabilities assumed, and goodwill is recorded to the extent represented by the excess of the cost of the business combination with respect to the interest share of the buyer in the net fair value of assets, liabilities and identifiable potential liabilities recorded. If the acquisition cost is below the value of the identifiable net assets acquired, the difference is booked to the profit and loss account. It is stressed that in booking acquisitions of subsidiaries that have taken place after 1 February 2010, the acquisition method is used as established by the new IFRS 3 Revised (see paragraph “Accounting standards, amendments and interpretations applicable as from 1 February 2010);

• increases/decreases to the shareholders’ equity of the consolidated companies due to results achieved subsequent to the date on which the interest was acquired, during elimination, are posted to a specific reserve of the shareholders’ equity referred to as “Profit (loss) carried forward”;

• dividends distributed by the companies of the Group are eliminated from the profit and loss account during consolidation.

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ANNUAL REPORT2010

Financial statements in foreign currencies

The conversion into euros of the financial statements of foreign subsidiaries expressed in currencies other than the euro is carried out by applying the exchange rates in force at the end of the financial year to assets and liabilities, and by applying the average exchange rates for the period to the items of the profit and loss account. Shareholders’ equity, on the other hand, is taken at historic rates conventionally identified as the rates relating to the end of the first financial year in which the subsidiary was included in the scope of consolidation.Exchange differences deriving from the conversion of the financial statements expressed in foreign currencies, applying the above method, are allocated as items of the comprehensive profit and loss account, accumulated in a specific reserve of the shareholders’ equity until the sale of the equity investments.

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ANNUAL REPORT2010

ACCOUNTING POLICIES AND STANDARDS

The following are the accounting standards and measurement criteria adopted by the Group.

The items of the financial statements are measured prudently and with a view to the business as a going concern. They also consider the economic function of the asset or liability.

Goodwill

Goodwill is recorded net of any accumulated impairment.Goodwill acquired in a business combination is represented by the excess of the cost of the business combination with respect to the share pertaining of the net fair value of the assets, liabilities and identifiable potential liabilities recorded.Goodwill is not subject to amortisation, but is rather annually tested for impairment, or any time events occur or circumstances arise that would lead to the possibility of a reduction in value, in accordance with the provisions of IAS 36 (Impairment of assets).

Equity investments

This item includes equity investments in associates and joint ventures. These investments are measured using the equity method.The consolidated financial statements includes the Group share in the results of the related investments booked using the equity method, as from the date on which the significant influence or joint control occurs and until such time as said significant influence or joint control should cease to exist. Infra-group income not yet realised with regards to third parties is eliminated with regards to the Group share in the subsidiary. Infra-group losses not yet realised with regards to third parties are also eliminated if not representative of an effective lesser value of the goods sold.Any losses that should exceed shareholders’ equity are booked to the financial statements to the extent whereby the shareholder is obliged to fulfil legal or implicit obligations toward the subsidiary or whereby it covered its losses.

Associated companiesAssociated companies are companies over which the Group exercises significant influence but does not control or jointly control the financial and operative policies.

Joint venturesCompanies over which the Group has the power to govern the operative and financial policies but requires the unanimous consent of the other parties exercising joint control are considered joint ventures. Investments in joint ventures are consolidated using the equity method and standardised accounting standards with those of the Group.

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ANNUAL REPORT2010

Intangible fixed assets

Intangible fixed assets are recorded at cost, net of amortisation calculated on a straight-line basis for a period corresponding to its effective useful life and any impairment. The useful life is reviewed once a year. Specifically:

Brands - Brands, deriving from business combinations, are recorded at fair value as of the date of the business combination according to the purchase method. They are not subject to amortisation, as they have an undefined useful life, but are rather annually tested for impairment, or any time events occur or circumstances arise that would lead to the possibility of a reduction in value, in accordance with the provisions of IAS 36 (Impairment of assets). After the initial booking, brands are measured at cost, net of any accumulated impairment.

Administrative authorisations (licenses) - Administrative authorisations, deriving from business combinations, are recorded at fair value as of the date of the business combination according to the purchase method. After the initial booking, licenses are measured at cost, net of amortisation and any accumulated impairment. Amortisation is calculated on the difference between the cost and the residual value at the end of the useful life and is applied on a straight-line basis throughout their useful life, which, as from 2006, has been redefined as 40 years. The value of commercial authorisations is subject to annual impairment testing, hence, should at the time of preparing the subsequent year’s financial statements, said testing reveal recoverable values of certain positions that fall below the values booked, the loss identified will be booked to the profit and loss account. Additionally, the residual value of the assets is checked once a year and adjusted to consider any changes to its value.Please refer to note 8 “Intangible fixed assets” for a description of the criteria applied in defining useful life and the residual value at the end of the useful life.

Software - The costs of software licences, inclusive of related charges, are capitalised and recorded in the financial statements net of amortisation and any accumulated impairment. The amortisation rate used is 20%.

Other intangible fixed assets - Other intangible fixed assets are recorded as assets when they are identifiable, controlled by the group, able to produce future economic benefits and when their cost can be reliably determined. These assets are measured at purchase cost and amortised on a straight-line basis throughout their useful life. The value of the franchising network, recorded following business combinations, is amortised on the basis of a useful life of 20 years.

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ANNUAL REPORT2010

Property, plant and machinery

Property, plant and machinery are measured at purchase cost, inclusive of accessory costs directly related to them and net of depreciation and accumulated impairment. Land is not subject to depreciation, even if purchased jointly with a building. Depreciation is booked as from the month in which the asset began operating. Depreciation shares are booked monthly on a straight-line basis at rates that allow for the depreciation of assets by the end of their useful life, or, for disposal, until the last month of use.The depreciation rates adopted are as follows:

Buildings 3%-6%

Temporary constructions 10%

Plant and equipment for lifting, loading, unloading, weighing, etc. 7.5%

Miscellaneous machinery, apparatus and equipment 15%

Special internal communication and remote signalling devices 25%

Furnishing 15%

Alarm systems 30%

Specific plant for bars, restaurant and staff cafeterias 8%

Bar, restaurant and cafeteria equipment 25%

Furniture and ordinary office machinery 12%

Electromechanical and electronic office machinery 20%

Cash register 20%

Vehicles and internal means of transport 20%-25%

Ordinary maintenance costs are charged in full to the profit and loss account for the year in which they are sustained. Improvements to third party property are classified as tangible fixed assets according to the nature of the cost incurred. The period of depreciation is the lesser of the residual useful life of the tangible asset and the residual useful life of the lease agreement, which is generally twelve years.

Assets acquired through financial lease agreements, through which all risks and benefits linked to ownership are substantively transferred to the Group, are posted to tangible assets at their current value or, if less, at the current value of the minimum payments due for leasing with an opposite entry of the financial debt due to the lessor. The debt is gradually reduced according to the repayment plan of the capital shares included in the contracted payments, whilst the value of the goods included as tangible fixed assets, is gradually depreciated according to its technical-economic life.

Impairment of tangible and intangible fixed assets

IAS 36 requires the measurement of impairment of tangible and intangible fixed assets where indicators suggest that this problem may exist.In the event of goodwill, other intangible assets with an undefined useful life and administrative authorisations or assets not available for use, this test is carried out at least once a year.The possibility of recovering the values booked is verified by comparing the book value recorded on the statements with the greater of the fair value (current realisation value) having deducted the sales cost and value of asset use. The value of use is defined on the basis of discounting the forecast cash flows to be generated by the asset.For the purpose of measuring impairment, assets are analysed starting from the lowest level for which independent cash flows can be separately identified (cash generating

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ANNUAL REPORT2010

units - CGUs). Within the Group, the individual stores branded Coin, Oviesse and Upim have been identified as CGUs.If the value that can be recovered on an asset is less than its book value, the latter is reduced to the recoverable value. This reduction represents a loss in value, which is charged to the income statement.Where there is an indicator that the impairment may be restored, the recoverable value of the asset is recalculated and the book value is increased up to the new value.The increase in the book value may not, in any case, exceed the net book value that would have been recorded for the asset had the impairment not been applied.Impairment of goodwill cannot be restored.

Financial assets

Financial assets are stated amongst current and non-current assets according to their maturity and forecasts on the time within which they will be converted into monetary assets. Financial assets include equity investments in third party companies (other than subsidiaries or associates), derivatives, credits and cash on hand and equivalent.

For measurement purposes, the Group breaks financial assets down into the following categories: financial assets measured at fair value recorded on the profit and loss account, loans and receivables, financial assets to be held to maturity and financial assets held for sale. The Directors decide on the classification of the individual financial assets when booking them initially and, at each financial statement date, verify that the initial allocation is still correct.

a) Financial assets measured at fair value recorded on the profit and loss account This category includes both financial assets held for trading and derivative

instruments that cannot be classed as hedge accounting.

b) Loans and receivables Loans and receivables consist of non-derivative financial assets with fixed term or

term that can be calculated. They are included in current assets, with the exception of the shares expiring beyond twelve months subsequent to the date of the financial statements, which are classified as non-current assets.

c) Financial assets held to maturity Financial assets held to maturity consist of non-derivative assets with fixed payments

or payments that can be established, which the Group intends to hold to maturity. The classification of the asset as current or non-current depends on the forecast realisation within or beyond the 12 months subsequent to the financial statement date.

d) Financial assets held for sale Financial assets held for sale represent a residual category consisting of non-

derivative financial instruments allocated by the Directors to this item or which cannot be allocated to any of the other categories of financial investment described above. These assets are included in non-current assets unless the Directors intend to sell them within twelve months of the financial statements date.

Regardless of the sector to which they are classified, financial assets are initially booked at fair value and potentially increased by accessory purchase costs.Financial assets are eliminated from the books when the rights to receive cash flows associated with the financial assets have expired or been transferred to third parties and the Group has also substantively transferred all risks and benefits linked to ownership.

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ANNUAL REPORT2010

Subsequent to the initial booking, financial assets measured at fair value on the profit and loss account and financial assets held for sale are booked at fair value. Change in the fair value in the first case are booked to the profit and loss account in the period in which they arise; in the second, they are booked to the shareholders’ equity (reserve for assets held for sale). This reserve is reversed to the profit and loss account only once the financial asset is effectively sole or, in the event of negative changes, when it is seen that the reduction of value suspended on the shareholders’ equity cannot be recovered (significant or prolonged reduction).

Finally, loans and receivables and financial assets held to maturity, subsequent to the initial booking, are booked using the amortised cost criteria, using the effective interest rate method. Any impairment is booked to the profit and loss account to offset the value of the actual asset. The value of an asset that has previously been reduced to allow for impairment is restored when the circumstances that had given rise to the impairment cease to exist.

Please refer to the paragraph devoted to derivative instruments further on, for more information on their treatment.

Inventory

Inventories are booked at the lesser of purchase cost and net realisation value.The purchase cost is determined by the average weighted cost for the period of formation. The cost is also increased by all accessories expenses directly relating to the purchase of goods.Goods relating to the collections are impaired on the basis of their presumed possibility of future realisation, by posting them to a specific adjustment provision.

Cash and cash equivalents

Cash on hand and equivalent include cash on hand and positive balances of bank current accounts that are not subject to constraints or restrictions, with the exception of that specified in note 1 “Cash and banks”.Cash available in foreign currencies is measured according to period end exchange rates.

Provision for risks and charges

Provisions for risks and charges include the following provisions, broken-down according to type:

Provision for the retirement and similar obligations - This mainly includes liabilities and rights accrued by ex Standa employees and employees of the companies Oriental Buying Services Ltd and OBS India Private Ltd in relation to supplementary welfare contracts; the liabilities relating to these defined benefit programmes are determined on the basis of actuarial hypotheses, the amount posted on the financial statements represents the current value of the group obligation.

Other provisions for risks and charges - These are allocated in view of current, legal or implicit obligations deriving from a past event with regards to third parties for which the use of resources is likely and the amount of this should be able to be reliably estimated.The amount booked as allocation is the best estimate of the expense needed to entirely liquidate the current obligation.

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ANNUAL REPORT2010

The risks for which the onset of a liability is merely a possibility are subject to disclosure in the explanatory notes in the specific paragraph entitled “Guarantees, commitments and risks” and no allocation is made.

Severance indemnity provision

Benefits subsequent to employment are defined on the basis of programmes that, according to their characteristics, are defined as “defined contribution” programmes and “defined benefit” programmes.Defined benefit programmes, such as the provision for employee leaving indemnities accrued prior to the coming into force of the 2007 financial law are plans whose benefits guaranteed to employees are supplied at the time their employment ceases. Liabilities relating to defined benefits programs, on a par with the provision for retirement described above, are determined according to actuarial hypotheses, and are competence-booked in line with the work performance required to obtain benefits; the measurement of the liabilities is carried out by independent actuaries.Employee leaving indemnities and retirement provisions, as mentioned above, determined by applying the actuarial method, involve the allocation to the profit and loss account, under the item relating to the cost of labour, of the amount of the rights accrued during the period, whilst the figurative financial expense is stated amongst the net financial income (expense). Actuarial profit and loss reflecting the effects deriving from measurements of the actuarial hypotheses used are instead noted in full in the items of the Shareholders’ Equity in the period in which they arise. As from 1 January 2007, the 2007 Financial Law and related implementation decrees have made significant changes to the rules governing employee leaving indemnities (in Italy referred to as “TFR”), including providing the employee with the choice, to be made by 30 June 2007, as to the destination of his accruing TFR. In particular, new TFR flows may be directed by the worker into chosen pension schemes or alternatively kept in the company (in which case the company shall pay TFR contributions into a treasury account held with INPS).Following these changes, TFR accrued up until the date on which the employee made his choice (defined benefit programme), have been subject to new actuarial calculation by independent actuaries, which has excluded the item from future salary increases. The TFR shares accrued as from the date on which the employee made his choice and, in any case, as from 30 June 2007, are considered as a “defined contribution programme” and as such, they are booked in a similar way as for the other contributions paid.

Financial payables

Payables and other financial and/or commercial liabilities are initially booked at fair value, net of all transaction costs sustained in relation to the acquisition of loans. They are subsequently recorded at amortised cost; any difference between the amount received (net of transaction costs) and the total repayment is recorded on the profit and loss account, according to the loan duration, using the effective interest rate method (amortised cost). Financial liabilities are classified as current liabilities unless the Group has the unconditional right to repay the liability beyond the twelve months subsequent to the reporting date. In this case, only the share of the debt due within twelve months of the reporting date is classed as a current liability.

Financial derivative instruments

Derivative financial instruments are assets and liabilities recorded at fair value.The Group uses derivative financial instruments to hedge exchange rate risks or interest rate risks.

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ANNUAL REPORT2010

In compliance with that established by IAS 39, derivative financial instruments can be booked according to the methods established for hedge accounting only when:• at the start of the hedge, there is a formal designation and documentation of the

hedging relationship;• the hedge is presumed to be extremely efficient;• the efficiency can be reliably measured;• the hedge itself is extremely efficient during the various accounting periods for

which it is designated.

When the derivative instruments meet the criteria to allow for hedge accounting, the following accounting treatment applies:• if the derivates hedge the risk of a change to the fair value of the asset or liability

hedged (fair value hedge; e.g. hedging the change of the fair value of a fixed-rate asset/liability), the derivates are recorded at fair value and their effects are booked to the profit and loss account; coherently, the assets or liabilities hedged are adjusted to reflect the change in the fair value associated with the risk hedged;

• if the derivates cover the risk of changes to cash flows of assets or liabilities hedged (cash flow hedge; e.g. hedging changes in cash flows of assets/liabilities by virtue of changes to interest rates), the changes in the fair value of the derivatives are initially recorded on shareholders’ equity and subsequently allocated to the profit and loss account according to the economic effects produced by the hedged transaction.

If hedge accounting cannot be applied, the profits or losses deriving from the fair value measurement of the derivative instrument are immediately recorded on the profit and loss account.

Revenues and costs

Revenues are recognised to the amount that it is likely that the economic benefits associated with the sale of goods or provision of services shall be achieved by the Group and the related amount can be reliably calculated. Revenues are posted at fair value of the amount received or due, considering the value of any commercial discounts, bonuses and premiums granted.

Revenues from sales and the provision of services are booked respectively at the time of the effective transfer of the relevant risks and benefits typical of ownership or at the time the provision is completed. Costs are recognised when they relate to goods and services sold or consumed during the period, whilst in the event of use spanning several years, the costs are allocated systematically.

Income and costs of leasing

Income and costs deriving from lease agreements are recognised on a straight-line basis according to the term of the contracts to which they refer. Potential lease payments are noted as income in the years in which they are obtained.

Income taxes

Current income tax is calculated by applying current rates to the reasonable estimate of taxable income, determined in compliance with current tax regulations. The forecast debt, net of the related advances paid and withholdings applied, is recorded on an equity level under “Current tax liabilities” (or “Current tax assets” if the advances already paid and withholdings applied exceed the forecast debt”.

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Prepaid tax assets and deferred tax liabilities are determined on the basis of taxable temporary differences between the book value of assets and liabilities and their tax value, with the exception of goodwill which is not tax deductible, and are classified as non-current assets and liabilities.Income tax is recorded on the profit and loss account, with the exception of that relating to items directly credited or charged to shareholders’ equity in cases where the tax effect is recognised directly on shareholders’ equity.Prepaid taxes are only booked where it is probable that they will be recovered in future periods.The value of prepaid taxes is reviewed at each period end and is reduced according to the extent that it is no longer likely that sufficient taxable income will be generated to allow for the future use of all or part of the credit.Prepaid and deferred taxes are measured at the tax rate expected to be applied during the year in which the assets will be realised or liabilities extinguished, considering the rates in force and those already issued and substantially issued at the reporting date.The Italian companies of the Group, with the exception of Wandar S.r.l. in liquidation, have adhered to the national tax consolidation regime, according to the offer made by the consolidating company, Giorgione Investimenti S.p.A..The relations deriving from the participation in the consolidation are regulated by specific contractual agreements, approved and signed by all adhering companies.

Exchange differences

The booking of transactions implemented in foreign currencies takes place at the exchange rate applied on the date on which the transaction takes place. Monetary assets and liabilities in foreign currencies are converted into euros applying the exchange rate in force as of the year end date, with application to the effect on the profit and loss account, under the item financial income and expense.

Dividends

Dividends are booked on the date on which the shareholders’ meeting passes the related resolution.

Earnings per share

Basic earnings per share are calculated by dividing the profit attributable to the shareholders of the Holding Company by the weighted average of shares in issue during the financial year. The diluted earnings per share, in the situation of the Coin Group, is calculated in the same way as for basic earnings per share, as there are no diluting elements.

Use of estimates

To draft the financial statements and the relevant notes in the application of the International Accounting Standards, estimates and assumptions must be made which influence the values of the assets and liabilities of the financial statements and the information regarding potential assets and liabilities at the date of the financial statements. The final results may differ from the estimates used. The estimates are used to determine the allocation for risks on receivables, for obsolete inventories, amortisation/depreciation, impairment of assets, benefits to employees, refurbishment provisions, taxes, sundry provisions for risks and the measurement of derivative instruments. The estimates and assumptions are reviewed periodically, and the variations are immediately reflected in the consolidated income statement.

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Further information

Segment reporting: in view of the application as from 1 February 2009 of IFRS 8, the Group has identified, on the basis of the qualitative and quantitative elements established by the standard itself as the following three main brands to be classed as the operative segments to which segment reporting obligations shall apply:- Oviesse brand- Coin brand- Upim brand (as from 31 January 2010)

ACCOUNTING STANDARDS, AMENDMENTS AND INTERPRETATIONS APPLICABLE AS FROM 1 FEBRUARY 2010

The Group’s economic and financial results for 2010 and the financial period compared have been prepared in accordance with the International Financial Reporting Standards (IFRS) homologated by the European Union and in force as of the date on which this document was prepared,The following accounting standards, amendments and interpretations have been applied for the first time by the Group as from 1 February 2010.• IAS 27 (2008) - Consolidated and separate financial statements. The changes to IAS

27 mainly concern the booking of transactions or events that alter the interest shares held in subsidiaries and the attribution of losses of the subsidiary to minority interests. IAS 27 (2008) establishes that, once control has been obtained over an enterprises, all transactions in which the holding company acquires or transfers further minority shares, without altering the control exerted over the subsidiary are transactions with shareholders and, as such, must be recognised on shareholders’ equity. The new IAS 27 also requires all losses attributed to minority shareholders to be allocated to the share of the shareholders’ equity pertaining to third parties, even when the exceed their share of pertinence of the capital in the subsidiary.

• IFRS 3 (Reviewed in 2008) - Business combinations. In accordance with the rules of transition of the principle, the Group has adopted IFRS 3 (reviewed in 2008) - Business combinations, prospectively for all business combinations that took place as from 1 February 2010. In particular, the updated version of IFRS 3 introduced important changes mainly concerning: (i) the regulation of acquisitions by stages of subsidiaries; (ii) the faculty to measure any minority interests acquired in a partial acquisition at fair value; (iii) the allocation to the profit and loss account of all costs linked to the business combination; and (iv) the booking of the liabilities for conditional payments on the date on which the liability is acquired. Acquisition of a subsidiary in stages. Should a subsidiary be acquired in stages, IFRS 3 (2008) establishes that a business combination shall only be realised at the time when control is acquired and that, at this point, all identifiable net assets of the entity acquired must be measured at fair value; minority interests must be measured at fair value or on the basis of the proportional share of the fair value of the net assets identifiable of the acquired company (method already permitted by the previous version of IFRS 3). In an acquisition by stages of the control of a subsidiary, the minority share previously held, up until that time booked in accordance with IAS 39 - Financial Instruments: Reporting, or according to IAS 28 - Investments in associates or according to IAS 31 - Investments in joint ventures, must be treated as though it had been sold and repurchased on the date on which control is acquired. This investment must, therefore, be measured at its fair value on the date of the “sale” and any consequent profits and losses following this valuation must be noted on the profit and loss account. Additionally, any value previously recorded in shareholders’ equity as Other comprehensive profit and loss, which must be allocated to the profit and loss account following the sale of the asset to which it refers, must be reclassified to the profit and loss account. Goodwill or the proceed (in the event of badwill) deriving from the business concluded with the subsequent acquisition must be calculated as the sum of the price paid to obtain control,

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the value of the minority interests (measured according to one of the methods permitted by the standard), the fair value of the minority share previously held and net of the fair value of the net assets acquired that can be identified. According to the previous version of the standard, the acquisition of control in stages was noted transaction by transaction, as a series of separate acquisitions that generated an overall goodwill determined as the sum of the various goodwills generated by the individual transactions. Accessory transaction expenses. IFRS 3 (2008) establishes that accessory transaction expenses to business combinations shall be reported on the profit and loss account in the period in which they are sustained. According to the previous version of the standard, these expenses could be included in determining the acquisition cost of the net assets of the company acquired. Reporting conditional payments. IFRS 3 (2008) establishes that conditional payments shall be considered part of the transfer price of the net assets acquired and measured at fair value on the date of acquisition. Equally, if the business combination contract involved the right to return of certain items of the price should certain conditions be met, this right is classified as a buyer asset. Any subsequent changes to this fair value should be reported as adjustments to the originally booked figures, only if determined by greater or better information on the fair value or if occurring within 12 months of the date of acquisition. All other changes should be noted on the profit and loss account. The previous version of the standard established that conditional payments should be booked on the date of acquisition only if their payment was deemed to be probable and their value could be reliably calculated. Any subsequent change to the value of these payments was also recorded as an adjustment of goodwill.

• Improvement to IFRS 5 - Non-current assets held for sale and discontinued operations. This establishes that if a company is involved in a sales plan that entails the loss of control of a subsidiary, all assets and liabilities pertaining to the subsidiary must be reclassified to assets held for sale, even if after the sale the company shall continue to hold a minority share in the subsidiary.

• Amendments to IAS 28 - Investments in associates and to IAS 31 - Investments in joint ventures, consequent to the changes made to IAS 27.

• Improvements to IAS/IFRS (2009) • Amendment of IFRS 2 - Share-based payments: Group cash-settled share-based

payments. • IFRIC 17 - Distribution of non-cash assets to owners. • IFRIC 18 - Transfers of assets from customers.• Amendment to IAS 39 - Financial Instruments: recognition and measurement - Eligible

hedged items.It is specified that the Group has not adopted the accounting standards, amendments and interpretations already homologated by the European Union but not yet having come into force, in advance.

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SEGMENT REPORTING

IFRS 8 “Operating segments” requires the representation of segment information on the basis of the elements used by management to take their operative decisions and provide financial investors with significant data on business trends. The Group’s activities, on the basis of internal reporting that is regularly reviewed by the management, have been identified as three main sectors representative of the brand activities.

As of 31 January 2011, the Group’s operating assets were therefore broken-down into the following three main brands:- Oviesse- Coin - UpimThe remaining part mainly consists of service companies.

The results analysed by brand at 31 January 2011 are as follows (million Euro):

2010 Oviesse Coin UPIM Management reclas. Ledger Management reclas. Ledger Management reclas. Ledger (a) account (a) account (a) account

Net sales 1,004.8 1,004.8 328.3 328.3 278.2 278.2

Operating costs 819.4 819.4 309.4 309.4 279.3 279.3

EBITDA 185.5 185.5 18.9 18.9 (1.1) (1.1)

Depreciation (48.5) (48.5) (19.2) (19.2) (19.3) (19.3)

EBITDA 137.0 137.0 (0.3) (0.3) (20.4) (20.4)

Total Assets 925.5 925.5 329.2 329.2 390.0 390.0

Total Liabilities 925.5 925.5 329.2 329.2 390.0 390.0

Net Equity 490.7 490.7 121.3 121.3 188.4 188.4

Intangible/fixed assets investments

16.4 16.4 7.5 7.5 63.2 63.2

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Other and not allocated Total Management reclas. Ledger Management reclas. Ledger (b) account (a,b) account

Net sales 13.8 13.8 1,625.1 1,625.1

Operating costs 14.6 (5.4) 9.2 1,422.7 (5.4) 1,417.2

EBITDA (0.8) 5.4 4.6 202.5 5.4 207.9

Depreciation (86.9) (86.9)

EBITDA (0.8) 5.4 4.6 115.5 5.4 121.0

Net financial income/(charges) (26.7) (26.7) (26.7) (26.7)

Operating profit/(loss) (27.5) 5.4 (22.1) 88.8 5.4 94.3

Non recurring income/(charges) 5.4 (5.4) 5.4 (5.4)

Pre-tax profit/(loss) (22.1) (22.1) 94.3 94.3

Income taxes (46.0)

Net profit/(loss) 48.2

Total Assets 61.3 61.3 1,706.0 1,706.0

Total Liabilities 61.3 61.3 1,706.0 1,706.0

Net Equity 56.9 56.9 857.3 857.3

Intangible/fixed assets investments 13.3 13.3 100.4 100.4

(a) This item includes reclassification of the exchange-rate differences emerging from exchange-rate risk hedging activity effected on purchases of goods. (b) EBITDA and EBIT are to be considered reclassified excluding non-recurring charges (this value amounts to 5,4 million as at 31 Jan 2011)

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We would remind you that the UPIM brand had no economic effect in 2009 as the acquisition was completed as of year end.The results analysed by brand at 31 January 2010 are as follows (million Euro):

2009 Oviesse Coin Upim Management reclas. Ledger Management reclas. Ledger Management reclas. Ledger (a) account (a) account (a) account

Net sales 870.6 870.6 319.0 319.0

Operating costs 728.9 3.5 732.4 310.2 0.9 311.1

EBITDA 141.7 (3.5) 138.2 8.8 (0.9) 7.9

Depreciation (41.3) (41.3) (16.0) (16.0)

EBITDA 100.4 (3.5) 96.9 (7.2) (0.9) (8.1) Total Assets 867.6 867.6 306.3 306.3 359.0 359.0

Total Liabilities 867.6 867.6 306.3 306.3 359.0 359.0

Net Equity 476.7 476.7 124.6 124.6 149.5 149.5

Intangible/fixed assets investments

39.9 39.9 10.1 10.1

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Other and not allocated Total Management reclas. Ledger Management reclas. Ledger (b) account (a,b) account

Net sales 8.2 8.2 1,197.8 1,197.8

Operating costs 9.2 (1.2) 8.1 1,048.3 3.3 1,051.6

EBITDA (1.0) 1.2 0.2 149.5 (3.3) 146.2

Depreciation (0.1) (0.1) (57.4) (57.4)

EBITDA (1.1) 1.2 0.0 92.1 (3.3) 88.8

Net financial income/(charges) (18.6) 4.5 (14.1) (18.6) 4.5 (14.1)

Operating profit/(loss) (19.7) 5.7 (14.0) 73.6 1.2 74.7

Non recurring income/(charges) 0.0 (1.2) (1.2) 0.0 (1.2) (1.2)

Pre-tax profit/(loss) (19.7) 4.5 (15.2) 73.6 73.6

Income taxes (29.3)

Net profit/(loss) 44.3

Total Assets 107.8 107.8 1,640.7 1,640.7

Total Liabilities 107.8 107.8 1,640.7 1,640.7

Net Equity 48.4 48.4 799.2 799.2

Intangible/fixed assets investments 9.7 9.7 59.7 59.7

(a) EBITDA includes reclassification of the exchange-rate differences emerging from exchange-rate risk hedging activity effected on purchases of goods. For accounting purposes these items have been classified under financial income and charges. As at 31 Jan 2010 reclassification amounts to a value of 4,5 million of Euro. (b) EBITDA and EBIT are to be considered reclassified excluding non-recurring charges ( this value amounts to 1,2 million as at 31 Jan 2010)

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ANALYSIS OF CONSOLIDATED FINANCIAL POSITION ITEMS

The content and the changes occurring in primary items vs. financial statements for the year ending on 31 January 2010 are detailed below (unless otherwise specified, amounts are shown in € ‘000).

COMMENTS TO THE MAIN ITEMS OF THE ASSETS

BUSINESS COMBINATIONS

Acquisition of Upim S.r.l.

As already specified in the Report on Operations under the paragraph “Acquisition of Upim”, to which we would refer you for a description of the characteristics of the transaction, we would remind you that on 28 January 2010, Gruppo Coin S.p.A. completed the acquisition of 100% of the capital of Upim S.r.l.. This acquisition took place in accordance with the provisions of international accounting standard IFRS 3 “Business combinations”, as a business combination and, as such, has been booked according to the “purchase method”.We would point out that in accordance with IFRS 3, the initial booking of the business combination had been made on a provisory basis. The limited period of time that has passed from the date of acquisition - 28 January 2010 - and the preparation of the Annual financial report as of 31 January 2010 had not, in fact, allowed for the conclusion of all activities needed to proceed with the closure of business combinations. Consequently, as of 31 January 2010 the cost of the business combination had not been allocated to the assets, liabilities and potential liabilities acquired and, therefore, the difference between the acquisition cost and the shareholders’ equity booked for the company acquired had been recorded, at initial accounting, entirely as goodwill. As of the end of financial year 2010 and, therefore, within twelve months of the date of acquisition (as permitted by the international accounting standard of reference), the “Purchase Price Allocation” process has been definitively completed.

For comparative purposes, we would point out that following the definitive accounting of the business combination described herein, some values of the consolidated financial statements for financial period 2009 have been restated with respect to those examined by the Shareholders’ Meeting of 27 May 2010. No changes are noted to the comparative figures of the consolidated income statement.

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The following shows the differences in the statement of Consolidated Financial Equity Position, deriving from that specified above (figures in thousands of Euro)

ASSET 31.01.2010 31.01.2010 restated published Change

Cash and equivalents 118,715 118,715 0


Invetories 260,139 260,139 0


Current tax assets 3,760 3,760 0

Other receivables 40,176 40,176 0

Property, plant and equipment 320,978 320,978 0

Intangible fixed assets 644,454 502,254 142,200

Goodwill 159,557 259,638 (100,081)

Equity investments 722 722 0

Not current financial assets 4,532 4,532 0

Other not current assets 5,679 5,679 0

TOTAL ASSETS 1,640.732 1,598.613 42,119

LIABILITIES 31.01.2010 31.01.2010 AND NET EQUITY restated published Change

Financial liabilities 130,336 130,336 0

Due to suppliers 459,595 459,595 0

Current tax liabilities 1,242 1,242 0

Other payables 119,405 119,405 0

Not Current liabilities 316,267 316,267 0

Employee termination indemnity provision 75,357 75,357 0

Provisions for risks and charges 17,533 15,715 1,818

Current tax liabilities 69,337 29,036 40,301

TOTAL LIABILITIES 1,189,072 1,146,953 42,119

NET EQUITY 451,660 451,660 0

TOTAL LIABILITIES AND NET EQUITY 1,640,732 1,598,613 42,119

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We note that the main change as compared with the provisory allocation consists of the identification of the following intangible assets, in accordance with IAS 38, existing as of the date of acquisition:• Local goodwill: these refer to the fair value reporting of administrative

authorisations (licenses) in relation to some sales outlets for a total value of € 72.0 million, amortised over 40 years, net of a terminal value quantified as € 43.7 million;

• Upim brand: for an amount of € 45.4 million, of indefinite life, subject to annual impairment testing;

• Franchising contracts: for an amount of € 24.8 million, amortised over 20 years;• Goodwill: residual unallocated value, for an amount of € 38.3 million, subject to

annual impairment testing.

Temporary (in thousand Euro) at the acquisition date Final restated Change

Cash and equiv. 42,755 42,755 0


Invetories 35,558 35,558 0

Tangible assets 62,196 62,196 0

Intangible assets 3,408 145,608 142,200

Goodwill 44,563 44,563 0

Equity investments 33 33 0

Deferred tax assets 38,778 0 (38,778)

Total assets acquired 261,913 365,335 103,422

Financial liabilities (105,336) (105,336) 0

Trade payables and other payables (168,977) (168,977) 0

Employee termination indemnity provision (17,988) (17,988) 0

Provisions for risks and charges (7,574) (9,392) (1,818)

Deferred tax liabilities 0 (1,523) (1,523)

Total liabilities assumed (299,875) (303,216) (3,341)

Liabilities to other financial institutions (747) (747) 0

Goodwill elimination registered in thefinancial statements of the company acquired (44,563) (44,563) 0

Minority interests 0 0 0

Net equity adjusted (83,272) 16,809 100,081

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Goodwill recorded following business combination

The definitive accounting of the business combination showed the recording of residual goodwill of € 38,252, determined as follows:

(in thousand Euro) Temporary Final at the acquisition date restated

Net Fair value registered (83,272) 16,809

Business combination cost

- cash * 49,381 49,381

- additional costs related to the combination ** 5,680 5,680

Residual Goodwill 138,333 38,252

* The purchase price is determined by n. 7,948,132 new shares issued and No 2,558,426 shares allotted to the member exchange in December 2007 SpA at Euro 4.70 per share equal to official market value of the day January 28, 2010

** It should be noted that, for the cash flow statement, the cash-out for these charges were incurred during 2010.

This goodwill represents the future economic benefits resulting from the business combination, due mainly to the equity of competence and know-how developed by Upim over the years. These represent a potential contribution to future income and generation of cash-flow for the Coin Group, deriving from the capacity to meet customer demands and quantifiable in terms of increasing income and cash-flow, which are being developed following the transaction.Future economic benefits are guaranteed by the commercial strategies and information held by Upim in relation to the products marketed and customer demands, and which, in its past, it has implemented in order to gain standing and conquer new customers and markets. This intangible equity of practical knowledge summarises the commercial know-how of the company acquired.

Acquisition of business units

On 16 September 2010, Oviesse S.p.A. acquired a business unit from Bellavita S.p.A. with the aim of retail selling children’s clothing and articles branded “Magnolia”. There are 26 stores involved (of which 1 business rented) and 28 franchising contracts with third parties for the marketing and sale of products branded “Magnolia”. Also for this acquisition, which gave rise to a business combination, accounting took place according to the “purchase method”, as established by the new international accounting standard IFRS 3 Business Combinations (reviewed in 2008), applied for the first time by Gruppo Coin prospectively as from 1 February 2010. The cost of the business combination amounted to € 158 thousand paid by Oviesse S.p.A. to the seller. Any accessory transaction costs have been recorded on the profit and loss account in the period in which they were incurred (as established by the new IFRS 3 revised).

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Below shows the value of the assets and liabilities determined definitively (thousands of Euro):

Final Fair value

Fixed and Intangible assets 103

Receivables to franchisee 98

Other activities 19

Severance indemnity provision (162)

Other payables to employees (50)

Total assets and liabilities acquired 8

The booking of the business combination therefore determined the recording of goodwill of € 150 thousand, for which the Group, in view of the inconsistency of the amount and the basic lack of intangible assets and potential liabilities not already reflected in the book values of the acquisition (given above), maintained the value as definitive accounting of the stated business combination.

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CURRENT ASSETS

1 Cash and cash equivalents 71,837

Previuos year 118,715

Decrease 46,878

The balance represents the cash on hand as of the date of year end and is broken-down as follows (in thousands of euros):

31.01.2011 31.01.2010 Change

1) Bank and postal deposits 65,848 111,875 (46,027)

2) Cheques 0 3 (3)

3) Cash on hand 5,989 6,837 (848)

Total 71,837 118,715 (46,878)

Cash on hand and equivalent consist of cash, cheques and values on hand held at the central headquarters and stores of the direct sales network. The significant decrease is mainly due to the consolidation, as of 31 January 2010, of Upim S.r.l., which shows available cash for an amount of € 42,755 thousand. This liquidity was subsequently absorbed by the major investments made in 2010.

2 Trade receivables 81,827


Increase 6,792

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The breakdown of trade receivables as of 31 January 2011 and 2010 is as follows (thousands of euros):

31.01.2011 31.01.2010 Change

Trade recivables

Receivables for retail sales 2,228 2,219 9

Wholesale cust. goods 67,472 75,419 (7,947)

Due from Fiditalia SpA 150 170 (20)

Wholesale cust. non goods 18,862 11,114 7,748

Receivables in dispute 16,406 7,938 8,468

Subsidiaries 910 1,338 (428)

Subtotal 106,028 98,198 7,830

(provision for bad and doubtful debts) (24,201) (23,163) (1,038)

Total 81,827 75,035 6,792

Disputed receivables have been entirely impaired.Receivables due for the provisions of services mainly include charges for the management of the department and sub-rents to third party managers; the increase is due to the new contracts stipulated during the year.The change in the provision for doubtful receivables is due to allocations made for € 3,303 thousand, to uses for € 1,965 thousand and the release of € 300 thousand.In financial year 2009, the change in the provision for doubtful receivables was due to allocations for € 3,418 thousand, uses for € 4,505 thousand and inclusion in the scope of consolidation of Upim S.r.l. for € 12,670 thousand. Impairment concerns receivables due from affiliates or commercial partners for which difficulties are envisaged in collection or disputes are underway, in most cases, due to bankruptcy proceedings involving the customer.

It is considered that the book value of the Trade receivables is close to their fair value.

3 Inventories 354,163


Increase 94,024

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This item includes inventories of goods held at depots and sales outlets as of the re-porting date. The increased value is due to the increased perimeter of the stores.The value stated is basically in line with the values that would be obtained if we were to measure inventories at current costs as of the closing date of the year, and is net of € 32,326 thousand impairment for slow moving goods (€ 39,899 thousand at the end of last year).

Additionally, inventory differences (€ 11,082 thousand, as compared with the € 12,323 as of 31 January 2010) have been calculated in relation to the period July 2010 - January 2011, as the Group carries out physical inventories each June. Considering the provision mentioned, the trend of these inventory differences is in line with that of the sector.

Depreciation found Inventories found Total

31 January 2010 39,899 12,323 52,222

- Provision for the period 16,757 16,549 33,306

- Utilization (24,330) (17,790) (42,120)

31 January 2011 32,326 11,082 43,408

4 Financial assets 6,700

Previuos year 6,985

Decrease 285

The amount shown refers exclusively to the recognition of the market value of deri-vative financial instruments. For more information on derivative financial instruments, please refer to the paragraph entitled “Exposure and management of financial risks”.

5 Current tax assets 839

Previuos year 3,760

Decrease 2,921

These are mainly credits for tax advances and other receivables due from the tax authority for taxes withheld at source. The amount specified as of 31 January 2010 showed advances paid in 2009 over and above the amount of IRES accrued; as such the excess amount, of € 1,963 thousand, had been stated amongst Current tax assets, as a receivable due from Giorgione Investimenti S.p.A.. As of 31 January 2011, the Group had accrued a payable due for IRES.We would remind you that Gruppo Coin S.p.A., Coin S.p.A., Oviesse S.p.A., Upim S.r.l., Oviesse Franchising S.p.A., Coin Franchising S.p.A., Brand Zero S.p.A. and C.O.S.I. S.p.A. have exercised the option to adhere to the tax consolidation, with the consolidating party

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being the company Giorgione Investimenti S.p.A.. Following the option, specific agreements were drawn up by the companies specified, to regulate the related conduct and which envisage the transfer of IRES payables/receivables through Gruppo Coin S.p.A..

6 Other receivables 39,826


Decrease 350

Other receivables can be analysed as follows:

31.01.2011 31.01.2010 Change

Receivables from others

Other receivables 3,778 4,431 (653)

Insurance receivables 2,682 1,158 1,524

Other amounts due from employees 1,652 1,977 (325)

Accrued income and prepaid expenses

Lease rentals and shared running expenses 24,867 26,206 (1,339)

Prepayments - insurance 198 303 (105)

Interest on guarantee deposits 191 171 20

Other 6,458 5,930 528

Total 39,826 40,176 (350)

The item “Sundry receivables” mainly refers to receivables due from social security entities, advances made to suppliers and couriers. Receivables due from insurance companies mainly increase by virtue of the repayment envisaged (around € 800 thousand) following damages suffered in the store of Aquila due to the earthquake and for damages suffered by the store of Rome Termini due to a fire (€ 602 thousand).The item “Deferred income - Other” includes the current share of income on financial commission (€ 1,443 thousand) sustained for the obtaining of the medium to long-term revolving credit line in April 2007 and to obtain the new credit lines better described in the paragraph below “Net financial position”. The competence of these costs refers to next year. The same item also includes deferred income on advertising costs for € 1,258 thousand and € 557 thousand referred to technical provisions underway for a refurbishment project concerning a new sales outlet in Milan. The residual amount mainly refers to deferred income on costs for utilities.

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NON-CURRENT ASSETS

7 Property, plant and equipment 343,372


Increase 22,394

Annex 1 states, for each item, the historic cost, previous amortisation or depreciation, changes occurring during the financial period and closing balances.

Period investments, amounting to € 93,748 thousand mainly concern:- expenses involved in modernising, refurbishing and re-qualifying sales outlets

of the commercial network;- the acquisition of furniture and furnishings in relation to the commercial

network for the fitting-out of new opening branches and refurbished branches.

The increase in the item “Land and buildings” concerns, in addition to improvements made to third party assets allocated to this category, works on the property of the Venice - Mestre office.The improvements made to third party assets, allocated to these items, mainly refer to refurbishment works in stores not owned.

The most significant decreases concerned the sales outlets being refurbished rather than closures/disposals.In compliance with IAS 36 as concerns businesses presenting impairment indicators, the Group carried out impairment testing, using the discounted cash flow method. This test resulted in impairment for the period of € 550 thousand (of which, in relation to impairment deriving from the results of the impairment testing for 2009 of Oviesse S.p.A. for € 146 thousand and Upim S.r.l. for € 404 thousand).

The item “Property, plant and machinery” includes land and buildings under financial lease, as detailed below (in thousands of euros):

Balance as Increase Decrease Depreciation Balance as at 31/01/2010 during year during year for the period at 31/01/2011

Buildings held under leasing contracts

Original cost 7,800 -- -- -- 7,800

Depreciation (1,404) -- -- (234) (1,638)

Net 6,396 -- -- (234) 6,162

Land held underleasing contracts 7,400 -- -- -- 7,400

Total 13,796 -- -- (234) 13,562

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8 Intangible fixed assets 634,235


Decrease 10,219

Intangible fixed assets as of 31 January 2011 mainly include the following assets, net of period amortisation and depreciation, deriving: 1) from the acquisition in May 2005 by Bellioni Investimenti S.p.A., now Gruppo Coin S.p.A., of the control of Gruppo Coin S.p.A.; 2) from the acquisition of Tre. Bi S.p.A. and subsidiaries of 15 December 2008; and 3) from the acquisition on 28 January 2010 of Upim S.r.l.:• Coin brand, equal to € 61.4 million, of indefinite life;• Oviesse brand, equal to € 216.5 million, of indefinite life;• Upim brand, equal to € 45.4 million, of indefinite life;• Franchising network equal to € 58.9 million, amortised in 20 years (of which € 23.6

million referring to the Upim network);• Commercial authorisations relating to Coin stores, amounting to € 55.2 million,

amortised in 40 years; • Commercial authorisations relating to Oviesse stores, amounting to € 105.8 million

(of which € 10.6 million referring to the ex Tre.Bi. S.p.A. stores), amortised in 40 years;• Commercial authorisations relating to Upim stores, amounting to € 70.4 million,

amortised in 40 years.With regards to the useful life of the commercial authorisations, we would note that their duration has been estimated as 40 years, on the basis of historical analyses carried out within the Group.On this, we would point out the little relevance of the time term relating to the duration of lease agreements. In actual fact, the tenant is protected by market practice and specific legal provision, flanked by a strategy of progressive further network development forwarded by the Group, which generally renews lease agreements prior to their natural expiry. All these elements have, over time, resulted in an almost total success in pursuing the renewal policy.

We would also point out that a “residual value” component has been identified (residual value at the end of the useful life, not subject to amortisation or depreciation), calculated as 18 months of the lease fees, as this is representative of the value in any case recognised by the lessor if the contract should not be renewed for reasons not by the hand of the Coin Group.

Industrial patent rights and the rights to use intellectual works mainly include costs for investment in software programmes. The increase in the period (€ 7,721 thousand) refers to the implementation of various systems looking to respond more promptly to the many variables that are seen in the segment in which the Group operates and, in particular following the acquisition of Upim.

In compliance with IAS 36 as concerns businesses presenting impairment indicators, the Group carried out impairment testing, using the discounted cash flow method. This testing has resulted in impairment for the period of € 2,979 thousand.

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Impairment test

As established by IAS 36, the Group will test intangible assets with an undefined useful life and administrative authorisations with a defined life for impairment at least once a year or more frequently if there are indicators of impairment, and will test tangible assets and other intangible assets with a defined useful life for impairment whenever there are indications that this may be the case. The recoverable value of the cash generating units to which the individual assets have been attributed is tested through the determination of the value in use and/or their fair value

Impairment testing of goodwill and other intangible assets with an undefined lifeIn compliance with the provisions of IAS 36, the goodwill and brands of Coin, Oviesse and Upim have been subjected to impairment testing, proceeding to determine the value in use for each brand, as defined previously in the notes.In the specific case at hand, the CGU to which the goodwill has been assigned for potential impairment is that pertaining to the Oviesse brand, with regards to the goodwill deriving from the acquisition of May 2005, and to the Upim brand, with regards to the residual goodwill deriving from the acquisition of Upim S.r.l. (please refer to the paragraph above “Business combinations”).The main assumption made to determine the value in use of the CGU relate to the discounting rate and growth rate. More specifically, the Group has adopted discounting rates that reflect the current market values of the cost of money and consider the specific risks involved for the individual CGUsThe value that can be recovered for these assets is determined with reference to their value in use, calculated using a post-tax discounting rate of 9.1% and a growth rate for the period following the three-year budget of 1.5% (in the previous year, the post-tax discounting rate used was 8.20% and the growth rate was 1.5%).On the basis of the analyses performed, goodwill and brands do not appear to have suffered impairment.The Group has carried out sensitivity analyses, hypothesising a 1.5% increase in discounting rates whilst keeping all other conditions unchanged.The results of these simulations have not revealed any potential impairment.

Impairment test of administrative authorisations relating to storesAdministrative authorisations relating to Coin, Oviesse and Upim stores have been submitted to impairment testing, proceeding to determine the value in use for each one.The main assumption made to determine the value in use relate to the discounting rate and growth rate. In particular, the post-tax discounting rate used was 9.1% and no growth rate has been envisaged for the period subsequent to the 2011 budget.During the financial year, the administrative authorisations relating to 5 CGUs of the Oviesse segment and the assets of one Upim store were impaired. The results of the 2010 impairment testing are summarised in the table below, detailing impairment and appreciation applied during the financial period according to segment of operation, and recorded on the profit and loss account under “Amortisation, depreciation and impairment” (in thousands of euros):

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Oviesse Upim Total

Intangible assets (excluding goodwill)

Periodic writedowns (2,099) 0 (2,099)

Total intangible assets (2,099) 0 (2,099)

Tangible assets

Periodic writedowns (146) (404) (550)

Total tangible assets (146) (404) (550)

9 Goodwill 159,557


Decrease 0

The item relates to the goodwill recorded during the May 2005 acquisition by Bellini Investimenti S.p.A., now Gruppo Coin S.p.A., of the control of Gruppo Coin S.p.A. for € 97,595 thousand, to the goodwill deriving from the acquisition of the Tre.Bi group for € 23,710 thousand and the goodwill deriving from the business combination of Upim for € 38,252 thousand, as better described in the first paragraph on business combinations.

10 Equity investments 1,963

Previuos year 722

Increase 1,241

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This item can be broken-down as follows:

31.01.2011 31.01.2010Company name Book value Book value

Wandar S.r.l. (winding up) 511 511

Brandhouse Oviesse Ltd. 1,287 --

Marciana Finanziaria S.p.A. 74 74

Centomilacandele S.c.p.A. 81 81

Le Porte Franche Gestione S.c.a.r.l. 1 1

Gruppo Coin Dep. Store d.o.o. -- 50

Idroenergia s.c.a r.l. 1 1

Consorzio Remedia 1 1

Consorzio Operatori Piacenza 1 1

Consorzio Operatori Meraville 2 2

Consorzio Piazzagrande 2 --

Consorzio Le Torri d’Europa 2 --

Total 1,963 722

The increase seen in 2010 is due to the acquisition as a joint venture with Brandhouse Retail Limited, of the 37.5% share in the investment held in Brandhouse Oviesse Ltd India.

11 Financial assets 1,697

Previuos year 4,532

Decrease 2,835

The amount shown refers to the recognition of the market value of derivative financial instruments booked as hedge accounting and maturing beyond 12 months. For more details, please refer to the paragraph entitled “Exposure and management of financial risks”.

12 Other receìvable 9,960

Previuos year 5,679

Increase 4,281

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Other receivables can be broken-down as follows:

31.01.2011 31.01.2010 Change

Other receivables

Due from tax. auth. 180 203 (23)

Security deposits 3,858 3,556 302

Other receivables 5,593 148 5,445

Deferral financial exp. m/l term 330 1,772 (1,442)

Total 9,960 5,679 4,281

Caution deposits mainly refer to those paid on the basis of lease agreements and utilities. Receivables due for wholesale sales concern receivables due from affiliates beyond 12 months.

We would point out the deferred charge in relation to financial expense incurred in order to obtain the revolving credit line in relation to the loan agreement stipulated in April 2007 and the new revolving line contracted in January 2010 in relation to the acquisition of Upim. The amount stated includes costs for commission and consulting. For more details in relation to these loans, please refer to the paragraph below entitled “Net financial position”.

The item “sundry receivables” includes € 3,200 thousand relating to a receivable deriving from the sale by Upim S.r.l. of a business unit in Verona, and for € 2,320 thousand refers to a receivable due from an ex-affiliate that will be offset with the payments due for the rent of the business unit acquired by Oviesse during the financial year.

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CURRENT LIABILITIES

13 Financial liabilities 158,227


Increase 27,891

The amount stated represents the short-term payables due to banks (€ 151.5 million), to leasing companies and factoring companies (€ 4.0 million), to subsidiaries in liquidation (€ 0.5 million) and for derivative financial instruments (€ 2.2 million). For more information on the loan agreements in place, please refer to the paragraph below entitled “Net financial position”.

14 Trade payables 502,893


Increase 43,298

These represent current exposure for supplies of goods, fixed assets and services.The balance includes foreign trade payables (mainly from Asia) for € 101,967 thousand. The same balance also includes exposure in foreign currency (mainly US$) for 102,476 US$, already net of the 18,409 US$ paid by way of advance.The increase on 31 January 2010 is due to the increased sales perimeter.

15 Current tax liabilities 10,025

Previuos year 1,242

Increase 8,783

As of 31 January 2011, the item includes the payable due to Giorgione Investimenti S.p.A. for €6,839 in relation to the tax consolidation contract, whilst as of 31 January 2010 advances paid during 2009 were stated over and above the amount of IRES accrued, hence the excess amount has been stated amongst Current tax assets.The amount stated also includes tax payables for the financial year pertaining to foreign companies and the payable due to IRAP net of advances paid. Finally, we would point out that in December 2010, following the tax audit carried out at Coin S.p.A. and Oviesse S.p.A. by the Veneto Regional Tax Directorate for tax year 2007, a Report of Findings has been delivered showing items relating to IRES, IRAP and VAT. The companies have presented their own articulate briefs, observations and requests, in accordance with art. 12, paragraph 7 of Italian Law no. 212/00 to the findings described, through which they have provided grounded opinions that differ from the allegations made by the Authority. At present, it is in any case considered that any economic outlay will be negligible.

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Additionally, again in December 2010, upon completion of the audit by the Milan Regional Tax Directorate, in relation to the financial year ended on 30 September 2008 with regards to Upim S.r.l., a Report of Findings has been delivered which has given rise to the presentation by the company of briefs and observations.As of the date of these financial statements, no elements have arisen that allow for the determining of any need to make allocations on the financial statements. In any case, your attention is drawn to the fact that in relation to the acquisition of Upim, there are, in any case, the guarantees given by the seller with regards to this aspect.

16 Other payables 94,402


Decrease 25,003

The following is a breakdown of Sundry payables as of 31 January 2011 and as of 31 January 2010:

31.01.2011 31.01.2010 Change

Other payables

Due to employees for holiday leave 8,958 7,746 1,212

Other amounts due to employees 26,906 23,362 3,544

Due to directors, statutory auditors and shareholders 995 967 28

Amounts due to parent companies 281 281 0

Other payables 9,505 14,850 (5,345)

Due to Social Security 8,085 9,278 (1,193)

VAT payables 14,873 42,297 (27,424)

Other tax payables 5,326 5,251 75

Other payables - due to customers 1,338 662 676

Accruals and deferred income

Leasing instalment accruals/deferrals 6,900 5,997 903

Utilities accruals and deferrals 4,469 3,623 846

Insurance accruals and deferrals 1,042 254 788

Other accruals and deferrals 5,724 4,837 887

Total 94,402 119,405 (25,003)

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ANNUAL REPORT2010

Payables due to staff refer to dues accrued and not liquidated as of as of 31 January 2011. The increase is mainly due to the new openings during the financial period and the greater MBO / bonuses matured with respect to last year.

The decrease in the “Other” payables is mainly due to the recalculation of the linear nature of lease agreements with fees that increase throughout their term (€ 4,823 thousand as compared with € 9,998 thousand as of 31 January 2010). “Other” payables also include customer advances to book goods and purchases of goods for € 3,900 thousand (€ 3,144 thousand last year) and confirmation deposits for € 360 thousand. In relation to Payables due to social security and welfare institutes, the most significant amount is represented by payables due to INPS.

As of the closing date of the financial statements, the group had a VAT debt deriving from retail and wholesale sales, and, to a lesser extent, from the sale of goods and services. The significant decrease as compared with the end of last year is mainly due to the significant volume of goods supplied recorded at the end of the period.

The item “Other tax payables” includes payables for IRPEF for employees, amounts owing to tax authorities and amounts due for withholding tax to be paid.

With regards to the item “Other accrued liabilities and deferred income”, we note that this includes € 2,098 thousand (€ 2,001 thousand last year) referring to accrued local tax liabilities.

The increase in accrued liabilities and deferred income is mainly due to the new sales outlet openings.

NON-CURRENT LIABILITIES

17 Financial liabilities 284,573


Decrease 31,694

We note that as defined by the Financial Agreements specified in the Framework Agreement relating to the acquisition of Upim S.r.l. signed on 17 December, 2009, on 28 January 2010, Carpaccio Investimenti S.p.A., the majority shareholder of Gruppo Coin, provided a subordinate shareholder loan in favour of the operation for a total amount of € 28,500 thousand for a term of 5 years at a rate of 4.5% per annum. As of 31 January 2011, this loan amounted to € 29.8 million. The increase is due to the capitalisation of interest. By virtue of the merger by incorporation of Carpaccio Investimenti S.p.A. into the holding company Giorgione Investimenti S.p.A., with effect as of 31 January 2011, the incorporating company took over the loan with Gruppo Coin.

The amount stated represents the non-current payables due to banks (€ 240.0 million), to Giorgione Investimenti S.p.A. (€ 29.8 million), leasing companies (€ 9.4 million) and for derivative financial instruments (€ 5.4 million).

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For more information on the loan agreements in place, please refer to the paragraph below entitled “Net financial position”.

The balance of “Financial liabilities” includes payables due to financial leasing companies, of which the summary data as of the financial year end date is reported below (in thousands of euros). The short-term share of the payable is stated in the current part of the liabilities on the financial statement tables.

Minimum payment Capital for financial leasing

31 January 2011 31 January 2010 31 January 2011 31 January 2010

Within 1 year 4,442 5,138 3,974 4,466

1 to 5 years 9,327 12,499 8,698 11,440

More than 5 years 597 2,128 591 2,070

Total 14,366 19,765 13,263 17,976

Reconciliation of minimum payments due to the financial leasing company and their current value (capital share) is as follows:

31 January 2011 31 January 2010

Minimum payments for financial leasing 14,366 19,765

(Future financial expenses) (1,103) (1,789)

Present value of financial leasing debts 13,263 17,976

The Group has purchased buildings, machinery and furnishing under financial lease agreements. The average weighted term of financial lease agreements is around 8 years.The interest rates are fixed on the date of stipulation of the agreements and index-linked to the Euribor three-month rate. All lease agreements can be repaid through a straight-line repayment plan and now restructuring of the original plan is contractually established.All agreements are in the account currency (euros).Payables due to financial lease companies are guaranteed to the lessor through rights over the leased goods.

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Net financial position

As of 31 January 2011, net financial debt came to € 362.6 million.

Details are as follows:

(in million Euro) 31.01.2011 31.01.2010 Change

Cash & Cash equivalent and net short term financial assets

71.8 118.7 (46.9)

Assets derivatives 6.7 7.0 (0.3)

Short-term bank debts (151.5) (121.7) (29.8)

Short term debt vs collateral companies (0.5) (0.5) 0.0

Liabilities derivatives (2.2) (3.4) 1.2

Short term financial amounts payable to other financial creditors

(4.0) (4.7) 0.7

Short-term net financial position (79.7) (4.6) (75.1)

Long term debt vs parent company (29.8) (28.5) (1.3)

Assets derivatives 1.7 4.5 (2.8)

Liabilities derivatives (5.4) (0.4) (5.0)

Medium-term bank debt (240.0) (273.8) 33.8

Medium term financial amounts payable to other financial creditors

(9.4) (13.5) 4.1

Middle/long term financial position (282.9) (311.7) 28.8

Net financial position (362.6) (316.3) (46.3)

Note: the net financial position does not include commission incurred to obtain the revolving lines of credit classified under ìOther current and non-current receivablesî (1.8 milion Euro as at 31 January 2011 e 3.2 milion Euro as at 31 January 2010).

Under the scope of the transactions implemented for the acquisition of Upim S.r.l., on 28 January 2010, Gruppo Coin and Oviesse signed financial agreements that involved the amendment of the terms and conditions of loans granted with the contract of 24 April 2007.

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The credit lines available to the Group in accordance with the loan agreement today include:

(i) a medium to long-term line for a maximum amount as of 31.01.2011 of € 176.1 million, which consists of two tranches (A and B), with the following characteristics:

(a) a credit line referred to as “Facility A”, of which the total maximum amount is, as of 31.01.2011, € 53.4 million, to be repaid according to the following plan:

Date Amount to be repaid (Euro)

30 april 2011 17,790,437.68

31 october 2011 17,790,437.68

24 april 2012 17,790,437.68

(B) a credit line referred to as “Facility B”, of which the total maximum amount is currently € 122.7 million (of which € 49.1 million relating to the credit line granted to Oviesse S.p.A.), to be repaid as a lump sum on 24 April 2012.

(II) a medium to long-term credit line referred to as “Facility C” for a maximum amount of € 93.9 million, to be repaid as a lump sum on 24 April 2012;

(III) a medium to long-term credit line referred to as “Subordinated Facility” for a maximum amount of € 7.3 million (including the original € 0.3 million for interest capitalised with respect to the original supply), to be repaid as a lump sum on 24 September 2012.

As of 31 January 2011, Gruppo Coin had used the medium to long-term lines referred to as Facility A, B, C and Subordinated Facility, in full.

(IV) a revolving medium to long-term credit line for a maximum amount of € 170 million to be used by Gruppo Coin to meet the cash and working capital needs of its core business and to pay interest, commission and expenses in accordance with the loan agreement, available until 24 April 2012.

(v) a revolving medium to long-term credit line for a maximum amount of € 55 million to be used by Gruppo Coin to meet the cash and working capital needs of its core business and to pay interest, commission and expenses in accordance with the loan agreement, available until 24 April 2012.

As of 31 January 2011, the credit lines available to the Group had been used for a total of € 389.2 million.The average interest rate on the credit lines supplied to the Group in place as of 31 January 2011 was 3.421%.For an indication on the policies for hedging the risk of changes to interest rates implemented by Gruppo Coin for the entire Group, please refer to the report on operations and specifically to the chapter entitled “Management of financial risks”.

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CovenantsOn this matter, the Financial Agreements signed on 28.01.2010 kept the provisions of the previous Loan Agreement in place, which, amongst other matters, establish the release of the usual declarations and guarantees and the assumption by the beneficiary companies, of commitments in line with banking market practice for loans of a similar nature and value. More specifically, the Loan Agreement established compliance with certain financial parameters (“financial covenants”) to be calculated on a quarterly basis on a consolidated level, and which include net interest cover (ratio of adjusted EBITDA and adjusted net financial expense), cash flow cover (ratio of adjusted cash flow and adjusted debt service), leverage (ratio of net financial position and EBITDA) and capital expenditure (the amount of investments in tangible and intangible fixed assets). The values of the financial covenants have been adjusted to the new corporate, economic and financial structure of the Group.

Additionally, the Group has a contractual obligation on which base, the use of the revolving line (of a maximum amount of € 170 million) must not exceed € 20 million for at least 5 consecutive days in the period from 1 April 2010 to 31 March 2011 (clean down obligation). This value reaches € 15 million for the period 1 April 2011 - 31 March 2012. The covenant for the period 1 April 2010 - 31 March 2011 was reached sometime between 21 and 27 January 2011.

The Loan Agreement also establishes the assumption by the beneficiary companies of some obligations relating to the companies of the Group, including, we would mention, the commitment not to provide security-backed or personal guarantees (of the Italian Civil Code to third parties, and the obligation not to take out further loans (other than those specifically permitted).

Change of control and defaultThe Loan Agreement, as is standard practice, also contains a change of control clause in accordance with which, the loss of possession (direct or indirect) of the absolute majority of the share capital of Carpaccio Investimenti S.p.A., now Giorgione Investimenti S.p.A., by the PAI Funds or the fact that Carpaccio Investimenti S.p.A., now Giorgione Investimenti S.p.A. should not hold the absolute majority of the shares in Gruppo Coin S.p.A. shall entail the cancellation and obligation for the immediate repayment of the credit lines granted to the Group in accordance with the Loan Agreement. Finally, we would point out that the loan agreement establishes, as is standard practice, default events concerning the holding company and its subsidiaries. In the event that any of these such events should occur (and not be subsequently condoned), the agreement would authorise the lending banks to demand that the Group repay all credit lines granted to the Group itself in accordance with the loan agreement or bring forward said obligation to repay.As already mentioned, the new loan agreement has entirely eliminated any cross default events connected with breach by holding companies of Gruppo Coin S.p.A..

GuaranteesThe signing of the Financial Agreements entailed the integration of the package of guarantees provided in support of the repayment obligations for the credit lines granted to the Group. In particular, in addition to confirmation of the pledge in the banks’ favour of 100% of the share in Coin and 100% of the share in Oviesse (both owned by Gruppo Coin) and the confirmation of the pledge over 100% of the shares in Oviesse Franchising (owned by Oviesse), 100% of the shares in Oriental Buying Services Ltd and 100% of the shares in Upim Srl (both owned by Gruppo Coin SpA) have also been pledged in the banks’ favour. This pledge over intellectual property rights linked to the brands owned by the Group has also been extended to the Upim, OVS Industry and Gruppo Coin SpA brands. The pledges of insurance policies and corporate goods with unitary values in excess of € 2,000 have been confirmed. We would specify that the voting rights, other administrative rights and equity rights relating to the shares and units pledged remain with the party constituting the pledge until such time as breach should occur in

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accordance with the Loan Agreement, in which case said rights shall be transferred to the creditor banks. Repayment obligations of the credit lines supplied to Carpaccio Investimenti, now Giorgione Investimenti, in accordance with the new Loan Agreement are, on the other hand, guaranteed - amongst others - by the pledge in favour of the lending banks of 69.304% of the shares in Gruppo Coin S.p.A..

18 Employee termination indemnity provisions 62,078


Decrease 13,279

The amount represents what has been allocated by the Group for leaving indemnity accrued by employees. We would remind you that this provision is determined on the basis of actuarial hypotheses and is recognised for competence in compliance with the work provisions required to obtain said benefits.We note that as from 1 January 2007, the Financial Law and related implementation decrees have introduced significant changes to the TFR regulations, including the choice by the worker as to the destination of his accruing TFR. In particular, new TFR flows may be directed by the worker into chosen pension schemes or alternatively kept in the company (in which case the company shall pay TFR contributions into a treasury account held with INPS).

As of 31 January 2011, actuarial measurements relating to TFR consider the effects deriving from the change to its regulation as implemented by Italian Law dated 27 December 2006 (the “2007 Financial Law”) and subsequent Decrees and regulations issued in 2007. On the basis of these changes:- the shares of TFR accruing as from 1 January 2007, both in the event of opting for forms of supplementary welfare and in the event of allocation to the Treasury Fund held by INPS, are similar to the payment of contributions to Defined Contribution Plans and consequently accounted;- TFR accrued until 31 December 2006 instead remains similar to Defined Benefit Plans and booked according to the provisions of IAS 19 for this type of Plan.

Below are the hypotheses of work adopted for actuarial valuations:

Demographic hypotheses: • for the probability of death, those relating to the Italian population recorded by

ISTAT for 2002 and broken-down according to gender:• for the probability of disability, those, broken-down according to gender, adopted

in the INPS model for 2010 forecasts. These probabilities have been constructed starting from the distribution by age and gender of current pensions as of 1 January 1987, with effect 1984, 1985, 1986 in relation to staff in the credit branch;

• for the retirement age for generic asset, it has been assumed that the first of the pension requirements valid for General Compulsory Insurance shall be reached;

• for the probability of ceasing work for reasons other than death, on the basis of the statistics supplied by the Group, the annual attendance of 10.00% for all group companies were considered;

• for the probability of advance, an annual figure of 3.00% was considered.

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Financial and economic hypotheses.The financial and economic scenario used for the assessment is described by the table below:

Technical annual rate of discounting 4.60%

Annual inflation rate 2.00%

Annual rate of increase in severance indemnities 3.00%

N.B. The assumption on the annual rate of increase in termination indemnity refers only to Group companies with fewer than 50 employees

With regards to the discounting rate, for the measurement of this parameter, the iBoxx Eurozone Corporates AA 7 - 10 index was used as a parameter, with duration measured to the average residual permanence of the collective subject to assessment, as of 31 January 2011.

The following changes are shown during the financial year:

Value at 31.01.2010 75,357

Increase in the period 2,535

Actuarial earnings / (losses) (1,497)

Consolidation area variation 162

Decrease due to disbursements / transfers for the year (14,479)

Value at 31.01.2011 62,078

The average workforce for the financial year just ended was 89 managers, 9,133 white-collar workers and 278 blue-collar workers.AS of 31 January 2011, the Group employed 90 managers, 9,115 white-collar workers and 293 blue-collar workers.

19 Provisions for risks and charges 19,482


Increase 1,949

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ANNUAL REPORT2010

The changes to the provisions were as follows:

Provisions for Other Other risks and charges Provisions Provisions

Value at 31.01.2010 17,533 239 17,294

Increase in the period 5,021 6 5,015

Decrease in the period (3,072) (15) (3,057)

Value at 31.01.2011 19,482 230 19,252

Broken-down:

Pension Founds 230

Previuos year 239

Decrease 9

This is mainly a provision for pensions concerning ex Standa employees, acquired with the business unit. The supply of the provision is established for when the employee retires. On a par with TFR, the value of the provision in question is also calculated on an actuarial basis with the “unitary forecast of credit”.

Other Provisions 19,252


Increase 1,958

The provision is allocated against potential risks for disputes with suppliers linked to the marketing of products, Public Entities, ex employees and third parties by various title.The provision also includes € 864 thousand allocated against potential risks of losses deriving from returns of goods by affiliates of the autumn-winter season, goods which, subsequent to acceptance, will be impaired.

The outcome of these risks cannot be defined with any certainty and, therefore represents a prudent estimate of the assumed expense at the end of the financial year.

20 Current tax liabilities 79,500


Increase 10,163

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The balance is detailed in the summary table given below.

The prepaid taxes on tax losses concern unlimited losses that can be reported and accrued by the subsidiary Coin prior to adhesion to the tax consolidation and by the subsidiary Upim S.r.l..

Temporary Temporary differences Tax effect differences Tax effect 31 January 2011 % 31 January 2011 31 January 2010 % 31 January 2010

Deferred tax assets

Inventory obsolescence provision 48,016 27.50% 13,204 51,348 27.50% 14,121

Provision for local taxes 3,393 27.50% 933 3,846 27.50% 1,058

Accrued directors’ and auditors fees that will become deductible in the 508 27.50% 140 432 27.50% 119

following year

Provisions for contingenciesand charges 19,179 27.50% 5.274 17,264 27.50% 4,748

Write-down of receivables 22,722 27.50% 6,249 21,640 27.50% 5,951

Temporarly undeductible amortisation 686 31.40% 215 5,214 31.40% 1,637

Write-down of assets 18,716 27.50% 5,147 31,497 27.50% 8,662

Tax losses 63,988 27.50% 17,597 63,986 27.50% 17,596

Fair value of derivatives 1,411 27.50% 388 0 27.50% 0

Incentives 1,266 27.50% 348 1,266 27.50% 348

Lease contract temporarly differences 4,823 31.40% 1,514 9,998 31.40% 3,139

Financial costs 5,977 27.50% 1,644 9,395 27.50% 2,584

Others 2,571 27.50-31.40% 734 3,341 27.50-31.40% 939

Total deffered tax assets 193,256 53,387 219,227 60,902

Deferred tax liabilities

Brands and other Intangibile assets (franchising, and (399,064) 27.50-31.40% (125,328) (381,244) 27.50-31.40% (119,744)local goodwill)

Gain on building sold (1,721) 27.50-31.40% (540) (4,931) 27.50-31.40% (1,490)

Leasing on head office building (10,231) 31.40% (3,213) (13,706) 31.40% (4,304)

Severance pension indemnity complying IAS 19 (8,795) 27.50% (2,419) (7,997) 27.50% (2,199)

Fair value of derivatives (2,979) 27.50% (819) (8,555) 27.50% (2,352)

Software and other depreciation (1,072) 31.40% (337) 0 31.40% 0

Other small items (846) 27.50% (231) (527) 27.50% (150)

Total (deferred) tax liabilities (424,708) (132,887) (416,960) (130,239)

Net (deferred) tax assets (231,452) (79,500) (197,733) (69,337)

The deferred tax liabilities relating to the greater book value of intangible fixed assets essentially derive from their recognition at fair value according to the “purchase method”, calculated during the business combination with Gruppo Coin, Tre. Bi. and Upim.

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SHAREHOLDERS’ EQUITY

Shareholders’ equity amounts to € 494.8 million.The changes involving the items comprising shareholders’ equity are detailed in the specific accounts statement.

21 Share capital

The Share Capital of Gruppo Coin S.p.A. amounts to € 14,308,744.40 and consists of 143,087,444 ordinary shares, each with a value of € 0.10.

22 Reserves

Reserves are broken down as follows:

Share premium reserveThe share premium reserve, which amounts to € 293.0 million, derives from capital increases made on 18 May 2005 and 20 July 2005. It was also increased following the acquisition of the minority interests during the business combination. The increase of € 51.3 million of the Share premium reserve recorded in 2009 is determined as follows:- assignment of 2,558,246 treasury shares in exchange for 24.35% of the share capital

of Upim S.r.l. at the price of € 4.70 for a total of € 12.025 thousand net of the value already booked of € 7,555 thousand and, therefore, for a value of € 4,470 thousand.

- Capital increase of 7,948,132 new shares in exchange for the conferral of 75.65% of the share capital of Upim S.r.l. at the price of € 4.70 with a premium of € 4.60 for a total of € 36,561 thousand.

- Capital increase managers of 3,000,000 shares at the price of € 3.51 with premium of € 3.41 for a total of € 10,230 thousand.

Other reservesThis item, amounting to € 137.6 million, mainly includes profits carried forward for € 137.0 million and the effects of the booking directly to shareholders’ equity of the actuarial profits relating to Employee leaving indemnities, the Reserve for cash flow hedges and the Conversion reserve. For more details on the changes during the financial year, please refer to the Statement of change in the accounts of the consolidated shareholders’ equity.

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Below are the changes to the cash flow hedge reserve:

(in thousand Euro) 2010 2009

Value at the beginning of the financial year 5,817 21,614

Release to sales cost of share related to instruments for which the report failed to cover

(11,305) (2,675)

Deferred tax effect 3,109 736

Release to change in inventories of share related to instruments for which the report failed to cover

(4,955) (765)

Deferred tax effect 1,363 210

Release to P&L of fair value on instruments for which the report failed to cover

(38) (222)

Deferred tax effect 10 61

Changes in fair value on Forward coverage 6,692 (17,683)

Deferred tax effect (1,840) 4,863

Release to P&L of share paid on differential 2,430 2,350

Deferred tax effect (668) (646)

Release to P&L of fair value on instruments for which the report failed to cover

- -

Changes in fair value on IRS coverage (1,035) (2,795)

Deferred tax effect 285 769

Total changes (5,952) (15,797)

Value at the end of the financial year (135) 5,817

Below are the changes to the actuarial profits/(losses) reserve:

(in thousand Euro) 2010 2009

Value at the beginning of the financial year 34 140

Changes in severance indennity in accordance with IAS 19 1,498 (146)

Deferred tax effect (412) 40

Total changes 1,086 (106)

Value at the end of the financial year 1,120 34

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ANNUAL REPORT2010

GUARANTEES, COMMITMENTS AND RISKS

· Operational leased assetsAs of 31 January 2011, there were lease agreements in place for vehicles (€ 138 thousand for instalments due and € 2 thousand in relation to redemption).

· Bank security and Guarantees granted in favour of third partiesThese amount to € 63,379 thousand and were granted on behalf of the Group by credit institutes or insurance companies, mainly as a guarantee of Italian lease agreements. They include € 2,066 thousand that represent one year’s lease as an estimate of the risk in place with regards to ex Standa contracts, the total value of which covered by the bank security amounts to € 15,493 at end December 2013. · Other commitmentsWe would point out commitments made for the lease of sales outlets and deposits to be liquidated in relation to contractual expiries, with or without withdrawal clauses. This clause is, in almost all contracts, an average of 12 months. The consequent commitment relates to one year’s lease and amounts to € 187.5 million.

EXPOSURE AND MANAGEMENT OF FINANCIAL RISKS

The Group operates under the scope of commercial business, involving both retail and wholesale, and is therefore exposed to market risks linked to changes in interest rates and in exchange rates.Group treasury activities is centralised in the holding company Gruppo Coin S.p.A., which is the only interlocutor for all group companies with regards to the main credit institutes. Infra-group relations are regulated by specific contracts drawn up at market conditions.

The risk of cash flow changes can only be partially mitigated through the use of suitable risk management policies.Gruppo Coin S.p.A. adopts guidelines on financial operations which involve stipulating derivative financial instruments, in order to reduce the exchange rates with regards to the US dollar and risks of changes in interest rates.

The following section provides qualitative and quantitative information of reference on the incidence of these risks on the Coin Group.The quantitative data supplied below has no value in terms of forecasts, in particular the sensitivity analysis cannot reflect the complexity and related reactions of markets that can derive from all changes hypothesised.

Credit riskThe credit risk represents the Group’s exposure to the risk of potential losses deriving from counterparty breach (this risk mainly refers to Coin S.p.A., Coin Franchising S.p.A., Oviesse Franchising S.p.A. and Upim S.r.l.).

As of 31 January 2011, there was no significant concentration of credit risk, as this risk is mitigated by the fact that credit exposure is divided up over a large customer base, mainly in Italy, with only 9.98% of clientele resident abroad. In order to reduce the credit risk generally, the Group obtains guarantees in the form of bank security to cover loans granted for the supply of goods. As of 31 January 2011, comprehensive guarantees totalled € 35.3 million (€ 47.7 million as of 31 January 2010).

Financial operations relating to trade receivables are booked net of impairment calculated on the basis of the risk of counterparty default, determined considering all information available on the solvency of the customer in addition to historic data. The positions are subject to individual impairment if individually significant, where they are

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effectively totally or partially unable to be demanded. Receivables that are not subject to individual impairment have provisions allocated on a collective basis, considering past experience and statistical data.As of 31 January 2011, trade receivables, totalling € 81.8 million (€ 75.0 million as of 31 January 2010) include € 24.2 million relating to receivables subject to individual impairment (€ 23.2 million as of 31 January 2010); the following analysis is provided for overdue amounts:

Expired receivables 31 January 2011 Guarantees 31 January 2010 Guarantees

within 3 months 28.9 8.5 26.2 10.4

3 to 6 months 6.0 1.6 5.2 1.3

more than 6 months 9.1 2.9 11.7 4.6

TOTAL 44.0 13.0 43.2 16.2

Liquidity riskLiquidity risk is the risk that financial resources may be difficult to obtain.The two main factors that determine the Group liquidity position are, on the one hand, the resources generated or used by operations and investment and, on the other hand, the characteristics of debt renewal or expiry and market conditions.The Group has adopted a series of policies and processes aiming to optimise the management of financial resources, thereby reducing the liquidity risk:1. centralised management of incoming cash flows and payment; 2. maintenance of an adequate level of cash on hand;3. obtaining adequate credit lines;4. monitoring prospective liquidity conditions in relation to the business planning

process.

Below are the characteristics of debt expiries of the Group as of the closing date for financial year 2010 and 2009:

Maturity31 January 2011 Within 6 months 6 to 12 months 1 to 5 years More than 5 years

Trade payables 496.7 6.2 -- --

Financial payables vs banks 133.7 17.8 240.0 --

Financial payables vs parent company -- -- 29.8 --

Financial payables vs others 2.2 2.4 8.1 0.6

Financial charges vs banks (*) 8.7 9.4 5.1 --

(*) ‘This value has been calculated by applying the forward curve at 31.01.11 to the loan depreciation plan. Concerning to the Revolving it’s assumed an average utilization of 75%.Furthermore, the aggregate includes the nominal interest value for leasing contracts and the value from future flows generated by derivative contracts that, at the balance sheet date, had a negative fair value.

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Maturity31 January 2010 Within 6 months 6 to 12 months 1 to 5 years More than 5 years

Trade payables 456.7 2.9 -- --

Financial payables vs banks 104.4 17.3 273.8 --

Financial payables vs others 0.0 0.0 28.5 --

Financial payables vs other lenders 2.5 2.2 13.5 --

Financial charges vs banks (*) 10.2 9.3 25.6 --

(*) ‘This value has been calculated by applying the forward curve at 31.01.10 to the loan depreciation plan. Concerning to the Revolving it’s assumed an average utilization of 75%.Furthermore, the aggregate includes the nominal interest value for leasing contracts and the value from future flows generated by derivative contracts that, at the balance sheet date, had a negative fair value.

Management considers that the provisions and credit lines currently available, in addition to those that will be generated by operations, will allow the Group to meet its demands deriving from investment, working capital management and the repayment of debts and their natural expiry.

The book value of loans is close to their fair value as of 31.01.2011.

Derivative financial instruments

The table below provides a breakdown of derivative financial instruments

(in million Euro) 2010 2009 Assets Liabilities Assets Liabilities

Interest rate swaps - coverage cash flow 0.0 (1.4) 0.0 (2.8)

Interest rate collar - speculative 0.0 0.0 0.0 (1.0)

Future contracts - coverage cash flow 8.4 (6.1) 9.7 0.0

Future contracts and Option- speculative 0.0 (0.1) 1.8 0.0

Total 8.4 (7.6) 11.5 (3.8)

Corrent quote:


Interest rate collar - speculative 0.0 0.0 0.0 (1.0)

Future contracts- coverage cash flow 6.7 (0.8) 5.2 0.0

Future contracts and Option- speculative 0.0 (0.1) 1.8 0.0

Total current quote 6.7 (2.2) 7.0 (3.4)

Non current quote


Future contracts- coverage cash flow 1.7 (5.3) 4.5 0.0

Total non current quote 1.7 (5.4) 4.5 (0.4)

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Interest rate risk

The Group treasury uses external financial resources in the form of debt. Changes in market interest rate levels affect the cost of the loan, therefore also affecting the Group’s financial expense.In order to cope with these risks, the Group uses derivative instruments on rates (“Interest rate swaps” and “Interest Rate Collars” contracts) with a view to mitigating, at economically acceptable conditions, the potential incidence of the variability of interest rates on the economic result.

The contracts in place as of 31.01.2011 are presented in detail in the tables below:

TABLE 1 : interest rate risk(Euro)

Nominal value as Nominal value as Fair Value asDerivative contracts Date at 31 January 2010 at 31 January 2011 at 31 January 2011

Interest rate swap (IRS) 18/06/2009 38,009,931 128,031,994 (1,410,569)

TABLE 2 : existing derivatives (Euro)

Interest rate Fair Value asDerivative contracts Date weighted average Maturity at 31 January 2011

Interest rate swap (IRS) 18/06/2009 2.46% 24/04/2012 (1,410,569)

Interest Rate Swap contracts meeting the criteria established by IAS 39 are booked ac-cording to the hedge accounting method.

The periods in which it is assumed that cash flows of these hedging derivatives will af-fect the profit and loss account are summarised in the statement attached:(in million Euro)

Profit and loss account impact 31 January 2011 Notional Within 3 3 to 6 6 to 12 Value Fair Value months months months More than 12 months

Interest Rate

128.0 -1.4 -0.4 -0.4 -0.5 -0.1 Swap contracts

The amount recorded on the profit and loss account under the Cash flow hedge reserve, at the end of financial year 2010, is -€ 1.4 million.

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Sensitivity analysis

For the Coin Group, variable rate financial instruments concern financial debt. The following is a sensitivity analysis that shows the effects on the profit and loss account of a hypothetical translation of the curves of +40 or -40 basis points with respect to the forward rate curve hypothesised as of 31.01.2011. This hypothetical, instant and unfavourable (favourable) change in the level of short-term interest rates applicable to the variable-rate financial liabilities would entail a greater pre-tax net expense, on an annual basis, of around € 1.8 million (or rather a lesser expense for € 1.8 million). This analysis is based on the assumption of a generalised, instant change to the interest rate level of reference. The same simulation carried out as of 31 January 2010 would have caused greater expense for € 1.9 million and lesser expense for € 2.8 million.

Change on financial charges effect - P&L effect(in million Euro) - 40 bps base + 40 bps

Sensitivity analysis at 31/01/11 (15.0) (16.8) (18.6)

Sensitivity analysis at 31/01/10 (13.2) (16.0) (17.9)

The table above includes the impact on the profit and loss account of only interest on loans, excluding the impact of derivatives. The effect of the change in the interest rate on the fair value of derivatives in rates and the consequent effects on the profit and loss account and shareholders’ equity as of 31 January 2011 and as of 31 January 2010 are as follows:

Change on financial charges effect - P&L effect (in million Euro) - 40 bps + 40 bps

Sensitivity analysis at 31/01/11 -- --

Sensitivity analysis at 31/01/10 (0.05) 0.05

Change on cash flow hedge reserve effect - equity effect(in million Euro) - 40 bps + 40 bps



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Exchange rate risk

The Group is exposed to risks deriving from the change in exchange rates, which can affect its economic result and the value of its shareholders’ equity. In particular, where the companies of the Group sustain costs in currencies other than the euro, the change in exchange rates can affect the operative result of these companies.The methodology applied provides, as far as possible, for the neutralisation of the economic effects deriving from changes to exchange rates through the use of derivative instruments (forward purchases and options). Said transactions are carried out by the Coin Group Finance Management with the bank system and, in speculative terms, reversed to the Group companies, which therefore incur the economic effects. The only exchange rate that is significant for the Group is EUR/US$ in relation to the purchases made in dollars by Italian companies on the far east market and on other markets in which the dollar is the currency of reference in international trade.A change in exchange rates may entail the realisation or ascertainment of exchange gains or losses.The Group hedges even highly probable orders, even if not yet purchased, pursuing the managerial objective of minimising the risks to which the Group is subject.Below, we provide details of the different types of contracts on currencies taken out to manage the exchange rate risk and stipulated by Gruppo Coin:

(in million USD) Nominal value as at 31.1.2011 Nominal value as at 31.1.2010

Futures contracts 767.0 397.0

Option contracts 0.0 10.0

Repurchase agreements are used to cover the risk that the foreign currency (US $) appreciates. The table below summarises the amount of the contracts:

Operation Operation Amount Strike Amount Fair Value as date date (in million USD) price (in million Euro) at 31.01.2011

From 21/05/2009 From 01/02/2011

767.00 From 1.2619

560.18 2.19 to 26/01/2011 to 02/12/2013 to 1.4852

In 2010, the nature and structure of the exposure to the exchange rate risk and the hedging policies applied by the Group have not changed substantially as compared with last year

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Sensitivity analysis

The impact of a 5% change in exchange rates on the fair value of derivatives held in exchange rates and the consequent effects on the income statement and shareholders’ equity as of 31.01.2011 and as of 31.01.2010 are as follows: - the potential loss on the income statement of the fair value of the derivative financial instruments taken out to manage the exchange rate risk and held by the Group as of 31 January 2011, for speculative purposes, as a consequence of a hypothetical depreciation of approximately 5% in the US& would equate to around € 1.9 million (as compared with a positive change of € 2.1 million if the change was an appreciation). The same assessment with reference to the figures as of 31.01.2010 entailed a negative change to the profit and loss account of € 1.6 million and a positive one of € 1.8 million:

(in million Euro) Change on financial charges effect - P&L effect - 5% + 5%

Sensitivity analysis at 31/01/11 2.1 (1.9)


With regards, instead, derivative financial instruments held in hedge accounting, the effects on the shareholders’ equity of a 5% appreciation/depreciation of the Euro/US$ exchange rate are as follows:

(in million Euro) Change on cash flow hedge reserve effect - equity effect - 5% + 5%



If we limit the analysis to the effects on the income statement, but extend the sensitivity analysis to all flows subject to change dependent on the Euro/US$ exchange rate, and keep the variability interval unchanged, the hypothesis of an appreciation of the US$ would, as of 31 January 2011, cause a total loss of € 1.8 million (as compared with a positive change of € 1.7 million in the event of depreciation).The same assessment with reference to the figures as of 31 January 2010 entailed a negative change to the income statement of € 1.5 million (and a positive one of € 1.5 million).

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Classification of financial assets and liabilities

In order to complete the disclosure on financial risks, below is a reconciliation of classes of financial assets and liabilities, as identified in the Group’s financial equity position and the type of financial assets and liabilities identified on the basis of the requirements of IFRS7:

Liabilities

Fair value Assets Fair value valued at Liabilities

assets Receivables Assets held avaiable liabilities depreciation valued

to P&L and loans until maturity for sale to P&L cost accordingIAS 17 Total

Current assets

Cash and banks - 71,837 - - - - - 71,837

Trade receivables - 81,827 - - - - - 81,827

Financial assets (a) 6,700 - - - - - - 6,700

Non current assets

Trade receivables 2,393 - - - - - 2,393

Financial assets (a) 1,697 - - - - - - 1,697

Current liabilities

Financial liabilities - - - - 2,175 (b) 152,078 3,974 158,227

Trade payables - - - - - 502,893 - 502,893

Non current liabilities

Financial liabilities - - - - 5,438 (b) 269,846 9,289 284,573

(a) of which 8,360 thousand Euro recorded to Net equity into cash flow hedge reserve (b) of which (7,538) thousand Euro recorded to Net equity into cash flow hedge reserve

The general criteria used to calculate the fair value is the current value of future cash flow forecast by the instrument concerned by the appraisal. The liabilities relating to bank debt are measured according to the “amortised cost” method.Trade receivables and payables are measured at book value, as it is considered as reflecting current value.Financial leases are measured at cost as they do not fall under the scope of application of IAS 39.

COMMENT ON THE MAIN ITEMS OF THE CONSOLIDATED INCOME STATEMENT

We would now like to provide details of some items of the income statement (figures are given in thousands of euros).Please note that the income statement of Upim has been included under the scope of consolidation on a line-by-line basis as from these financial statements, hence comparison with the corresponding figures of last year is not standardised.

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INCOME

24 Revenues from ancillary sales and services

The figures of sales and accessory provisions consists of the following:

31.01.2011 31.01.2010 Change

Revenues for retail sales 1,776,348 1,336,651 439,697

VAT on retail sales (297,390) (223,626) (73,764)

Net sales 1,478,958 1,113,025 365,933

Revenues from sales to franchisee and wholesale 145,659 84,354 61,306

Subtotal net sales 1,624,617 1,197,379 427,238

Revenues for services 485 413 72

Total 1,625,102 1,197,792 427,310

On a national level, retail sales were achieved for 47.2% by regions of the north of Italy, for 34.6% by regions of central Italy and for 18.2% in regions of the south and on the islands.

25 Other revenues and operating income

31.01.2011 31.01.2010 Change

Rental and leasing income 44,223 31,385 12,838

Revenues from provision of services 34,392 17,767 16,625

Compensation for damages 2,180 407 1,773

Capital gains from disposal of assets 1,822 41 1,781

Other 28,273 8,406 19,867

Total 110,890 58,006 52,884

The significant increase in the item Rental and lease expense is mainly due to the new concession contracts relating to Coin and, to a lesser extent, to Upim, stipulated during the financial year.Income for the provision of services mainly relates to the recovery of transport costs, the recovery of advertising costs, promotional contributions, debits of payroll costs and other services.

The item “Other” includes € 10,118 thousand as discounts and bonuses granted by suppliers of Upim following agreements reached subsequent to the entry of the new shareholder and € 10,571 thousand as contingent assets deriving from the reorganisation of Upim.

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The same item also includes bonuses/round-off income and differences for cash for € 650 thousand, indemnity for the loss of goodwill for € 548 thousand, indemnity from lessors for € 1,373 thousand, release of provisions for € 989 thousand and reimbursements in relation to training costs for € 744 thousand. The income shown is net of VAT.

26 Purchases of raw materials and consumables

Purchases of raw materials, ancillary materials, consumables and goods for resale mainly include purchases of products destined for marketing and amount to € 832,486 thousand. The increase is due to the inclusion of Upim in the scope of consolidation, in addition to the new openings.The equivalent value in euros of the purchases from abroad, mainly made in dollars, including accessory expenses, amounts to € 460,696 thousand.

27 Payroll and related costs

Payroll costs are broken-down as follows:

31.01.2011 31.01.2010 Change

Salaries and wages 236,903 169,615 67,288

Social security charges 70,191 50,976 19,215

Staff leaving indemnity 14,651 10,749 3,902

Personnel expenses - other costs 2,181 780 1,401

Total 323,926 232,120 91,806

The increase in payroll costs is mainly attributable to the inclusion of Upim in the scope of consolidation, in addition to staff employed in the new stores and the average change recorded in the MBOs.

28 Depreciation and write off of assets

31.01.2011 31.01.2010 Change

Amortisation and write-downs of intangible assets 13,796 8,828 4,968

Depreciation and write-downs of property, plant and equipment 66,855 44,702 22,153

Other write-downs of fixed assets 6,284 3,888 2,396

Total 86,935 57,418 29,517

For this item too, the increase is mainly attributable to Upim.We would report that the amount relating to the impairment of tangible and intangible fixed assets, in the attachments of reference, has been included in the values relating to the line “Impairment/disposals”. Impairment refers to assets impaired following impairment testing and as a consequence to the closure of stores.

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29 Other operating costs: - for services

Costs for the acquisition of services that reflect recourse to resources external to the group are broken-down as follows:

31.01.2011 31.01.2010 Change

Advertising 28,228 21,797 6,431

Utilities 45,002 35,226 9,776

Others retail store costs 50,573 35,924 14,649

Outside professional & advisory services 25,838 17,360 8,478

Staff travel and related items 18,761 13,398 5,363

Insurance 3,235 2,358 877

Maintenance, cleaning and security 42,851 29,987 12,864

Other services 4,635 3,636 999

Statutory Auditors 309 304 5

Directors’ emoluments 968 655 313

Total 220,400 160,645 59,755

30 Other operating costs: - for use of leasehold property

The costs for the use of third party goods consist of the following:

31.01.2011 31.01.2010 Change

Rents payable and related costs 210,769 147,845 62,924

Leasing of plants, equipment and motor vehicles 1,477 1,133 344

Total 212,246 148,978 63,268

The item “Rental expense and accessory charges” mainly includes rent and condominium expenses for the sales network; the increase is due to the new openings of sales outlets. The lease contracts were stipulated at market conditions and values.

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31 Other operating costs: - depreciations and provisions

Details are as follows:

31.01.2011 31.01.2010 Change

- allow. for doubtful debts 3,302 3,418 (116)

- allocations for risks 4,961 884 4,077

- allocations for company reorganisation 0 0 0

Total 8,263 4,302 3,961

32 Other operating costs: - other operating costs

Other operative expenses can be broken down as follows:

31.01.2011 31.01.2010 Change

Material and equipment 7,999 8,233 (234)

Taxes and duties 11,285 7,269 4,016

Equity capital losses 0 2 (2)

Other operating costs 5,527 4,320 1,207

Total 24,811 19,824 4,987

Other operating expenses include, amongst others, costs for general and administrative expenses, miscellaneous transactions and donations.

33 Financial income and (charges)

Financial income

31.01.2011 31.01.2010 Change

Interest income on bank c/a 180 180 0

Miscellaneous financial income 53 205 (152)

Income from subsidiaries and associated companies 0 7 (7)

Total 233 392 (159)

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Financial charges

31.01.2011 31.01.2010 Change

Interest payable to subsidiaries 2 5 (3)

Interest expense on bank c/a 222 277 (55)

Financial charges on loans 22,020 12,298 9,722

Financial charges on other financial creditors 3,355 3,023 332

Charges from measurement of derivatives at fair value 22 1,097 (1,075)

Other financial charges 3,805 1,470 2,335

Total 29,426 18,170 11,256

Financial expenses owed to other lenders include € 2,853 thousand deriving from the actuarial calculation of the Provision for employee leaving indemnities. The residual amount refers to the financial expense linked to lease agreements.

Other financial expenses include commission for € 1,444 thousand, referring to loans in place.

Exchange differences

31.01.2011 31.01.2010 Change

Positive exchange differences 7,016 11,304 (4,288)

Positive exchange differences not realized 362 20 342

Negative exchange differences (3,060) (3,152) 92

Negative exchange differences not realized (78) (390) 312

Fair value derivates on exchange differences (1,731) (4,067) 2,336

Total 2,509 3,715 (1,206)

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34 Operating income taxes

The balance can be broken-down as follows:

Taxes IRES 21,006

Regional Business Tax (IRAP) 12,523

Foreign taxes 607

Deferred Taxes 11,910

Total 46,046

The following is a reconstruction of the effective tax rate (in thousands of euros): IRES

Income before taxes 94,278

Taxes at referring rate 25,926 27.5%

Tax effect for permanent differences 5,447 5.78%

Other differences 1,618 1.72%

Total 32,991 35.0%

Total IRES 32,991

IRAP

Operating result 120,962

Staff charges 323,926

Net value of production 444,888

Taxes at referring rate 17,351 3.9%

Tax effect for permanent differences 446 0.10%

Amount deducted (4,742) -1.07%

Total 13,055 2.93%

Total IRAP 13,055

Total IRES and IRAP 46,046

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Earnings per share

The basic earnings per share of Gruppo Coin is determined by dividing the profit of competence by the weighted average number of shares of the company in issue in the period, excluding treasury shares. The weighted average number of shares in issue is 143,087,444.

For Gruppo Coin, the diluted earnings per share is calculated in the same way as for basic earnings per share, as there are no diluting elements.

35 Related parties

As of 31 January 2011, the following related party transactions were in place - as defined by Consob Communications no. 97001574 of 20 February 1997, 98015375 of 27 February 1998 and 2064231 of 30 September 2002, which, amongst others, also incorporate international accounting standard IAS 24.

(figures in thousands of euros)

Parent company

Tax consolidation payables

Giorgione Investimenti S.p.A. 6,839

Total 6,839

Receivables/payables RECEIVABLES PAYABLES Trade Financial Trade Financial

Giorgione Investimenti S.p.A. -- -- 281 29,797

Total -- -- 281 29,797

Internal revenues/charges REVENUES CHARGE Sales Financial Charges Financial and services revenues for services charges

Giorgione Investimenti S.p.A. 1,297

Total 0 0 0 1,297

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Controlled companies not consolidated on a line-by-line basis

Internal receivables/payables RECEIVABLES PAYABLES Trade Financial Trade Financial

Wandar S.r.l. (winding up) 4 0 541

Total 4 0 0 541


Wandar S.r.l. (winding up) 3 2

Total 3 0 0 2

Associate companies valued using the equity method

Internal receivables/payables RECEIVABLES PAYABLES Trade Financial Trade Financial

Brandhouse Oviesse Limited 906

Total 906 0 0 0


Brandhouse Oviesse Limited 1,329

Total 1,329 0 0 0

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ANNUAL REPORT2010

Related entities (in thousand Euro)

RECEIVABLES/PAYABLES RECEIVABLES PAYABLES Trade Financial Trade Financial

Correlated entities 7 -- 220 --

Total 7 0 220 0

REVENUES/CHARGES For services Purchasing of services, loans and others

Correlated entities 7 24,511

Total 7 24,511

The above transactions are part of the company’s standard commercial operations. Income concerned some provisions of administrative services, utilities and transfers of goods charged back.

Rental costs, amounting to € 1,216 thousand, relate to lease agreements for a commercial building used for the Coin brand in Milan, leased by the company DUEC S.r.l., a company headed by the Coin family.

Costs for utilities, amounting to € 23,295, relate to the supply of electricity by the company Centomilacandele s.c.p.a..

We would specify that these transactions, all settled at market conditions, refer to transactions with regards to companies that directly or indirectly refer to the shareholders, without, however, giving rise to any conflict of interests.

As concerns fees, of a monetary and other nature, and the related salaries paid to directors and auditors, we would refer you to the specific prospectus included in the explanatory notes to the separate financial statements.

127

ANNUAL REPORT2010

SUPPLEMENTARY INFORMATION

Non recurring significant transactions and events

According to that required by Consob communication no. DEM/6064293 of 28 July 2006, the following is a summary of the economic impact of non recurring transactions and events equal to income for € 5,446 thousand in 2010 and income for € 1,184 thousand in 2009:

31.01.2011 31.01.2010

Extraordinary discounts from suppliers 10,118

Refunds and indemnities 1,184

Charges for refurbishing (6,142)

Personnel charges (6,359)

Other charges (2,556)

Capital gain from conveyance of business unit 3,120

Income from reorganization 7,265

5,446 1,184

Transactions deriving from non-typical and/or unusual operations

In accordance with Consob Communication of 28 July 2006, we would like to specify that in 2010 the Group did not implement any non-typical and/or unusual transactions, as defined in said Communication

RECONCILIATION BETWEEN NET EQUITY AND CONSOLIDATED NETPROFIT WITH HOLDING

(thousand Euro) Profit (loss) Net equity

Balance sheet of Gruppo Coin S.p.A. at 31.1.2011 drawn up in compliance with IFRS 20,327 317,908

Consolidated companies net equity 71,542 177,716

Exclusion of internal dividends (43,634) 0

Exclusion of internal profits not realized without tax effect (4) (538)

Foreign exchange related to balance conversion in foreign currency 0 (290)

Consolidated balance sheet of Gruppo Coin S.p.A. at 31.1.2011 drawn up in compliance with IFRS 48,231 494,796

128

ANNUAL REPORT2010

STATEMENT OF THE GROUP’S COMPOSITION

List of companies included in the consolidation with the integral method:

Company Registered office Share capital % ownershipItalian Companies

Gruppo Coin S.p.A. Ve - Mestre 14,308,744.40 EUR Holding

Coin S.p.A. Ve - Mestre 10,000,000.00 EUR 100%

Coin Franchising S.p.A. Ve - Mestre 200,000.00 EUR 100%

Oviesse S.p.A. Ve - Mestre 20,015,500.00 EUR 100%

Oviesse Franchising S.p.A. Ve - Mestre 1,000,000.00 EUR 100%

Upim S.r.l. Ve - Mestre 5,154,264.14 EUR 100%

Brand Zero S.p.A. Ve - Mestre 200,000.00 EUR 100%

Cosi - Concept Of Style Italy S.p.A. Ve - Mestre 120,000.00 EUR 100%

Foreign companies

Gruppo Coin International S.A. Lussemburgo 1,505,000.00 EUR 100%

Oviesse D.O.O. Koper - Slovenia 300,000.00 EUR 100%

Gruppo Coin Dep. Stores D.O.O. Belgrado - Serbia 4,624,795 RSD 100%

Oriental Buying Services Ltd Hong Kong 585,000 HKD 100%

Obs India Private Ltd Delhi - India 15,000,000 INR 100%

Cosi International Ltd Hong Kong 10,000 HKD 100%

Cosi International (Shanghai) Ltd Shanghai - Cina 1,000,000 RMB 100%

Gruppo Coin Ungheria K.F.T. Budapest - Ungheria 60,000,000 HUF 100%

List of shareholdings valued with the shareholders’ equity method:

Company Registered office Share capital % ownership

Wandar S.r.l. (1) Ve - Mestre 49,200.00 EUR 100%

OBS Retail Ltd Hong Kong 10,000,000 HKD 100%

Brandhouse Oviesse Ltd Bombay - India 89,776,550 INR 37.50%

(1) Company winding up

129

ANNUAL REPORT2010

APPENDIXES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following documents contain additional information accompanying consolidated financial statements for the year ended January 31, 2011.

Appendix:

n. 1 Tangible fixed assets as at 31 January 2011n. 2 Intangible fixed assets as at 31 January 2011n. 3 Tangible fixed assets as at 31 January 2010n. 4 Intangible fixed assets as at 31 January 2010n. 5 Controlled companies financial statements

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APPENDIX 1

Tangible fixed assets The breakdown of and the changes occurring in these assets during the year were as follows (in € ‘000):

Changes occured during the year Status at Disposals/ Status at 31.01.2010 Acquisitions writedowns Amortization 31.01.2011

Land and buildings

original cost 255,182 24,161 (8,527) 0 270,816

depreciation (242) 0 108 13 (121)

amortization (144,542) 0 5,756 (15,733) (154,519)

Net 110,398 24,161 (2,663) (15,720) 116,176

Plant and equipment

original cost 296,794 27,231 (19,753) 0 304,272

depreciation (454) 0 305 15 (134)

amortization (187,119) 0 14,782 (19,978) (192,315)

Net 109,221 27,231 (4,666) (19,963) 111,823

Fix. and fittings, tools and other equip. original cost 435,548 35,275 (75,086) 0 395,737

depreciation (199) 0 144 47 (8)

amortization (321,548) 0 68,304 (27,772) (281,016)

Net 113,801 35,275 (6,638) (27,725) 114,713

Other assets

original cost 58,875 4,651 (1,091) 0 62,435

depreciation (4) 0 0 2 (2)

amortization (48,114) 0 940 (3,449) (50,623)

Net 10,757 4,651 (151) (3,447) 11,810

Work in prog. and pay. on acct.

original cost 826 2,936 (506) 0 3,256

depreciation 0 0 0 0 0

amortization 0 0 0 0 0

Net 826 2,936 (506) (b) 0 3,256

Write-down of tangible asset’s Upim

Net (22,655) 0 8,249 0 (14,406)

Total

original cost 1,047,225 94,254 (104,963) 0 1,036,516

depreciation (23,554) 0 8,806 (d) 77 (14,671)

amortization (701,323) 0 89,782 (66,932) (678,473)

Net 322,348 (a) 94,254 (6,375) (c) (66,855) 343,372

(a) Including assets as at 31/01/10 for 1,370 thousand Euro, reclassified from intangible assets. (a) The opening balances at 31/01/10, concerning Upim Srl, have been reclassified in accordance with the criteria used by Gruppo Coin. (b)This value includes for 506 thousand Euro intangible in process as at 31/01/10 reclassified to the specific asset categories for the year 2010. (c) Including 3,635 thousand Euro related to writedowns during the year due to store wind-up (d) Including 550 thousand Euro related todepreciated assets as a result of impairment testing, net of depreciation relating to earlier years.

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APPENDIX 2

Intangible fixed assets The breakdown of and the changes occurring in these assets during the year were as follows(in € ‘000): Changes occured during the year Status at Disposals/ Status at 31.01.2010 Acquisitions writedowns Amortization 31.01.2011

Industrial patents and similar rights

original cost 84,192 7,721 (894) 0 91,019


amortization (65,022) 0 870 (10,270) (74,422)

Net 19,170 7,721 (24) (10,270) 16,597

Concessions, licenses and brands

original cost 581,840 377 (880) 0 581,337

depreciation (4,743) 0 (2,099) 0 (6,842)

amortization (13,470) 0 0 (2,868) (16,338)

Net 563,627 377 (2,979) (2,868) 558,157


original cost 270 122 (270) 0 122



Net 270 122 (270) (b) 0 122

Other intang. assets

original cost 79,632 0 (359) 0 79,273


amortization (14,733) 0 359 (4,171) (18,545)

Net 64,899 0 0 (4,171) 60,728

Write-down of intangible asset’s Upim

Net (4,882) 0 0 3,513 (1,369)

Total

original cost 745,934 8,220 (2,403) 0 751,751

depreciation (9,625) 0 (2,099) (c) 3,513 (8,211)

amortization (93,225) 0 1,229 (17,309) (109,305)

Net 643,084 (a) 8,220 (3,273) (13,796) 634,235

Goodwill

original cost 159,557 0 0 0 159,557



Net 159,557 0 0 0 159,557

(a) Restatement of opening balances following the conclusion of the Purchase Price Allocation process related to Upim Srl, acquired on January 28, 2010. (a) Including assets as at 31/01/10 for 1,370 thousand Euro, reclassified from intangible assets. (a) The opening balances at 31/01/10, concerning Upim Srl, have been reclassified in accordance with the criteria used by Gruppo Coin. (b)This value includes for 200 thousand Euro intangible in process as at 31/01/10 reclassified to the specific asset categories for the year 2010. (c) Including 2,099 thousand Euro related to depreciated assets as a result of impairment testing.

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ANNUAL REPORT2010

APPENDIX 3 Tangible fixed assetsThe breakdown of and the changes occurring in these assets during the year were as follows (in € ‘000):

Changes occured during the year Change in consolidation Change in Status at Disposals/ Gruppo Coin consolidation Status at 31.01.2009 Acquisitions writedowns Amortization Ungheria KFT Upim 31.01.2010

Land and buildings

original cost 151,281 11,653 (1,364) 0 181 169,368 331,119

depreciation (277) 0 23 12 0 (8,125) (8,367)

amortization (68,950) 0 571 (9,315) (11) (113,741) (191,446)

Net 82,054 11,653 (770) (9,303) 170 47,502 131,306

Plant and equipment

original cost 198,892 12,339 (3,012) 0 0 18,272 226,491

depreciation (438) 0 (92) 76 0 (20) (474)

amortization (117,302) 0 1,834 (13,594) 0 (15,240) (144,302)

Net 81,152 12,339 (1,270) (13,518) 0 3,012 81,715

Fix. and fittings, tools and other equip.

original cost 263,158 27,744 (15,359) 0 5 151,236 426,784

depreciation (1,217) 0 818 200 0 (13,957) (14,156)

amortization (178,861) 0 11,629 (19,923) (4) (128,602) (315,761)

Net 83,080 27,744 (2,912) (19,723) 1 8,677 96,867

Other assets

original cost 34,314 2,928 (780) (3) 0 0 22,171 58,633

depreciation (2) 0 (2) 0 0 (362) (366)

amortization (27,280) 0 239 (2,158) 0 (18,804) (48,003)

Net 7,032 2,928 (543) (2,158) 0 3,005 10,264

Work in prog. and pay. on acct. original cost 1,703 490 (1,412) 0 45 0 826

depreciation 0 0 0 0 0 0 0

amortization 0 0 0 0 0 0 0

Net 1,703 490 (1,412) (*) 0 45 0 826

Total original cost 649,348 55,154 (21,927) 0 231 361,047 1,043,853

depreciation (1,934) 0 747 (2) 288 0 (22,464) (23,363)

amortization (392,393) 0 14,273 (44,990) (15) (276,387) (699,512)

Net 255,021 (a) 55,154 (6,907) (1) (44,702) 216 62,196 320,978

(a) Restatement of opening balances for 694 thousand euro following the cocnlusion of the Purchase Price Allocation of Tre.Bi. S.p.A. and its subsidiaries, now incorporated into Oviesse SpA accounting with effect from 01.02.2009. (*) This value includes for 1,412 thousand Euro intangible in process as at 31/01/09 reclassified to the specific asset categories for the year 2009. (1) Including 2,087 thousand Euro related to writedowns during the year due to store wind-up (2) Including 780 thousand Euro related todepreciated assets as a result of impairment testing, net of depreciation relating to earlier years. (3) Including assets as at 31/01/09 for 486 thousand euros, year 2009 reclassified to other categories.

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ANNUAL REPORT2010

APPENDIX 4 Intangible fixed assets The breakdown of and the changes occurring in these assets during the year were as follows (in € ‘000):

Changes occured during the year Change in Status at Disposals/ consolidation Status at 31.01.2009 Acquisitions writedowns Amortization Upim 31.01.2010

Industrial patents and similar rights

original cost 46,379 6,040 0 0 0 52,419

depreciation 0 0 0 0 0 0

amortization (35,772) 0 0 (3,664) 0 (39,436)

Net 10,607 6,040 0 (3,664) 0 12,983

Concessions, licenses and brands

original cost 463,219 888 (626) 0 2,414 465,895

depreciation (4,413) 0 (355) 0 (390) (5,158)

amortization (11,110) 0 30 (2,070) (1,167) (14,317)

Net 447,696 888 (951) (2,070) 857 446,420


original cost 1,014 200 (1,014) 0 70 270


amortization 0 0 0 0 0 0

Net 1,014 200 (1,014) (*) 0 70 270

Other intang. assets

original cost 54,883 72 (122) 0 34,544 89,377

depreciation 0 0 0 0 (5,511) (5,511)

amortization (11,689) 0 50 (3,094) (26,552) (41,285)

Net 43,194 72 (72) (3,094) 2,481 42,581

Total

original cost 565,495 7,200 (1,762) 0 37,028 607,961

depreciation (4,413) 0 (355) (2) 0 (5,901) (10,669)

amortization (58,571) 0 80 (8,828) (27,719) (95,038)

Net 502,511 (a) 7,200 (2,037) (1) (8,828) 3,408 502,254

Goodwill

original cost 121,305 0 0 0 138,333 259,638


amortization 0 0 0 0 0 0

Net 121,305 0 0 0 138,333 259,638

(a) Restatement of opening balances for 5,166 thousand euro following the cocnlusion of the Purchase Price Allocation of Tre.Bi. S.p.A. and its subsidiaries, now incorporated into Oviesse SpA accounting with effect from 01.02.2009. (*) This value includes for 1,014 thousand Euro intangible in process as at 31/01/09 reclassified to the specific asset categories for the year 2009. (1) Including 43 thousand Euro related to writedowns during the year due to store wind-up (2) Including 978 thousand Euro related to depreciated assets as a result of impairment testing.

in esclusiva da

( FATTI BELLO! )

by Davide De Giglio

in esclusiva da

Capi sportivi e formali, vintage e ultracontemporanei, classici e ribelli.T-shirt e felpe personalizzate da abbinareai classici pantaloni di chino e ai denim dai lavaggi "used".

Un "upper casual" a prezzi competitivi, un'immagine internazionale unita alla tradizione e alla qualità del design italiano.

Camicie a righe, tartan o tinta unita in cotone oxford o popeline di cotone.Giacche doppiopetto in gabardine e trench completano il guardaroba.

Grigio, nero e bianco si alternano alle tonalità autunnali del rosso, del verde e del marrone.

GET HANDSOME

136

ANNUAL REPORT2010

APPENDIX N. 5

COIN S.p.A. PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 379,664 351,744 27,920

Ebitda 2,204 2,173 31

Depreciation and ammortization (21,438) (21,380) (58)

Operating profit (19,234) (19,207) (27)

Goodwill depreciation (645) (645) 0

Net Financial income (charges) (2,124) (1,916) (208)

Earnings before non-recurring items and taxes (22,003) (21,768) (235)

Adjustments to financial assets value 0 0 0

Non recurring income 1,404 1,024 380

Non recurring charges (584) (530) (54)

Pre-tax profit (21,183) (21,274) 91

Income taxes 4,281 5,297 1,016

Net Profit (16,902) (15,977) (925)

BALANCE SHEET AS AT 31.01.2011 (‘000 Euro) ASSETS 31.01.2011 31.01.2010 Change

Net fixed assets 73,685 89,901 (16,216)

Invetory 97,081 85,848 11,233

Receivables 59,770 42,754 17,016

Financial assets 0 0 0

Avaiable funds 790 836 (46)

Accruals and deferred charges 5,717 5,038 679 Total assets 237,043 224,377 12,666

LIABILITIES AND NET EQUITY

Net Equity 25,512 12,415 13,097

Severance indennity and other provisions 21,262 24,938 (3,676)

Financial liabilities 18,240 42,226 (23,986)

Trade payables 136,745 110,042 26,703

Other liabilities 31,405 30,744 661

Accruals and deferred income 3,879 4,012 (133) Total liabilities 237,043 224,377 12,666

137

ANNUAL REPORT2010

APPENDIX N. 5

OVIESSE S.p.A. PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 990,510 882,932 107,578

Ebitda 142,597 121,446 21,151

Depreciation and ammortization (46,429) (45,625) (804)

Operating profit 96,168 75,821 20,347

Goodwill depreciation (7,464) (7,472) (8)

Net Financial income (charges) (6,202) 143 (6,345)

Earnings before non-recurring items and taxes 82,502 68,492 14,010


Non recurring income 3,423 2,161 1,262


Pre-tax profit 85,212 70,010 15,202

Income taxes (32,500) (26,267) 6,233

Net Profit 52,712 43,743 8,969

BALANCE SHEET AS AT 31.01.2011 (‘000 Euro)

ASSETS 31.01.2011 31.01.2010 Change

Net fixed assets 256,309 298,373 (42,064)

Invetory 175,036 135,895 39,141

Receivables 84,085 46,562 37,523

Financial assets 41,334 35,505 5,829

Avaiable funds 3,976 4,097 (121)

Accruals and deferred charges 15,076 15,184 (108)

Total assets 575,816 535,616 40,200


Net Equity 189,909 180,830 9,079


Financial liabilities 49,077 51,696 (2,619)

Trade payables 217,380 188,136 29,244

Other liabilities 71,951 65,335 6,616

Accruals and deferred income 7,966 8,641 (675)

Total liabilities 575,816 535,616 40,200

138

ANNUAL REPORT2010

APPENDIX N. 5

UPIM S.R.L. PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 435,719 173,038 262,681

Ebitda 15,098 (7,887) 22,985

Depreciation and ammortization (25,321) (9,363) (15,958)

Operating profit (10,223) (17,250) 7,027

Goodwill depreciation (3,072) (1,058) 2,014

Net Financial income (charges) (2,150) (718) (1,432)

Earnings before non-recurring items and taxes (15,445) (19,026) 3,581


Non recurring income 23,804 15 23,789

Non recurring charges (13,469) (42,079) 28,610

Pre-tax profit (5,110) (61,090) 55,980

Income taxes 422 14,297 13,875

Net Profit (4,688) (46,793) 42,105


Net fixed assets 145,347 111,319 34,028

Invetory 63,197 35,558 27,639

Receivables 63,817 58,471 5,346

Financial assets 0 69 (69)

Avaiable funds 3,004 42,755 (39,751)

Accruals and deferred charges 9,581 11,920 (2,339)

Total assets 284,946 260,092 24,854


Net Equity 61,484 66,172 (4,688)


Financial liabilities 37,308 3,900 33,408

Trade payables 66,310 133,662 (67,352)

Other liabilities 91,648 24,366 67,282

Accruals and deferred income 5,122 951 4,171


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APPENDIX N. 5

COIN FRANCHISING S.p.A PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 9,669 5,900 3,769

Ebitda 1,411 1,053 358

Depreciation and ammortization (69) (33) (36)

Operating profit 1,342 1,020 322

Goodwill depreciation 0 0 0

Net Financial income (charges) (248) (78) (170)

Earnings before non-recurring items and taxes 1,094 942 152


Non recurring income 3 5 (2)

Non recurring charges (1) (4) 3

Pre-tax profit 1,096 943 153

Income taxes (363) (290) 73

Net Profit 733 653 80


Net fixed assets 320 389 (69)

Invetory 0 0 0

Receivables 8,974 6,321 2,653


Avaiable funds 0 0 0

Accruals and deferred charges 6 5 1

Total assets 9,300 6,715 2,585


Net Equity 2,107 1,374 733

Severance indennity and other provisions 46 0 46

Financial liabilities 5,690 3,875 1,815

Trade payables 99 72 27

Other liabilities 1,355 1,394 (39)

Accruals and deferred income 3 0 3


140

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APPENDIX N. 5

OVIESSE FRANCHISING S.p.A. PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 75,683 65,221 10,462

Ebitda 4,967 1,606 3,361



Goodwill depreciation (2,977) (2,977) 0


Earnings before non-recurring items and taxes 1,199 (1,703) 2,902


Non recurring income 25 29 (4)


Pre-tax profit 1,209 (1,706) 2,915

Income taxes (1,023) 449 1,472

Net Profit 186 (1,257) 1,443


ASSETS 31.01.2011 31.01.2010 Change

Net fixed assets 9,353 12,349 (2,996)

Invetory 0 0 0

Receivables 36,019 36,964 (945)


Avaiable funds 1,705 1,362 343


Total assets 47,104 50,692 (3,588)


Net Equity 18,845 18,658 187


Financial liabilities 15,290 16,121 (831)

Trade payables 383 607 (224)

Other liabilities 12,171 15,224 (3,053)


Total liabilities 47,104 50,692 (3,588)

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APPENDIX N. 5

BRAND ZERO S.p.A. PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 2,874 2,940 (66)

Ebitda (1,045) (266) (779)

Depreciation and ammortization (1) (1) 0

Operating profit (1,046) (267) (779)


Net Financial income (charges) (11) (11) 0

Earnings before non-recurring items and taxes (1,057) (278) (779)


Non recurring income 154 23 131


Pre-tax profit (940) (308) (632)

Income taxes 246 83 (163)

Net Profit (694) (226) (468)


ASSETS 31.01.2011 31.01.2010 Change


Invetory 150 0 150

Receivables 866 1,534 (668)

Financial assets 1,510 85 1,425


Accruals and deferred charges 0 50 (50)

Total assets 2,564 1,679 885


Net Equity 201 164 37


Financial liabilities 0 0 0


Other liabilities 1,941 861 1,080

Accruals and deferred income 3 4 (1)

Total liabilities 2,564 1,679 885

142

ANNUAL REPORT2010

APPENDIX N. 5

COSI - CONCEPT OF STYLE ITALY S.P.A.

PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 84,808 4,463 80,345

Ebitda 730 (452) 1,182

Depreciation and ammortization 0 0 0

Operating profit 730 (452) 1,182


Net Financial income (charges) 1,681 5 1,676

Earnings before non-recurring items and taxes 2,411 (447) 2,858

Adjustments to financial assets value 0 0



Pre-tax profit 2,426 (447) 2,873

Income taxes (746) 116 (862)

Net Profit 1,680 (331) 2,011


ASSETS 31.01.2011 31.01.2010 Change

Net fixed assets 19 4 15

Invetory 16,081 823 15,258

Receivables 31,781 1,687 30,094

Financial assets 5,706 0 5,706



Total assets 53,593 2,515 51,078


Net Equity 1,769 89 1,680


Financial liabilities 23 29 -6

Trade payables 49,518 2,017 47,501




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APPENDIX N. 5

OVIESSE D.o.o. PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 4,481 4,935 (454)

Ebitda (717) (849) 132


Operating profit (1,075) (1,169) 94



Earnings before non-recurring items and taxes (1,115) (1,192) 77



Non recurring charges 0 0 0

Pre-tax profit (1,115) (1,192) 77


Net Profit (1,115) (1,192) 77


ASSETS 31.01.2011 31.01.2010 Change

Net fixed assets 1,883 2,214 (331)

Invetory 1,199 1,310 (111)

Receivables 7 7 0




Total assets 3,419 3,868 (449)


Net Equity (799) (883) 84




Other liabilities 3,286 4,034 (748)


Total liabilities 3,419 3,868 (449)

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APPENDIX N. 5

GRUPPO COIN INTERNATIONAL S.A. PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 0 0 0

Ebitda (8) (8) 0


Operating profit (8) (8) 0



Earnings before non-recurring items and taxes (8) (8) 0




Pre-tax profit (8) (8) 0


Net Profit (8) (8) 0


ASSETS 31.01.2011 31.01.2010 Change


Invetory 0 0 0

Receivables 0 0 0




Total assets 26 19 7


Net Equity 10 18 (8)




Other liabilities 15 0 15


Total liabilities 26 19 7

145

ANNUAL REPORT2010

APPENDIX N. 5

ORIENTAL BUYING SERVICES LTD PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 24,160 15,613 8,547

Ebitda 15,128 7,914 7,214




Net Financial income (charges) 234 827 (593)

Earnings before non-recurring items and taxes 15,232 8,643 6,589




Pre-tax profit 15,232 8,643 6,589

Income taxes (481) (64) (417)

Net Profit 14,751 8,579 6,172


ASSETS 31.01.2011 31.01.2010 Change


Invetory 0 0 0

Receivables 3,645 2,392 1,253

Financial assets 30,501 16,966 13,535

Avaiable funds 947 1,402 (455)


Total assets 36,131 21,503 14,628


Net Equity 35,017 20,530 14,487







146

ANNUAL REPORT2010

APPENDIX N. 5

OBS INDIA PRIVATE LTD PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 1,547 1,256 291

Ebitda 250 202 48


Operating profit 197 153 44



Earnings before non-recurring items and taxes 146 143 3




Pre-tax profit 146 143 3

Income taxes (71) (57) (14)

Net Profit 75 86 (11)


ASSETS 31.01.2011 31.01.2010 Change


Invetory 0 0 0

Receivables 246 431 (185)




Total assets 613 680 (67)


Net Equity 528 444 84




Other liabilities 55 212 (157)


Total liabilities 613 680 (67)

147

ANNUAL REPORT2010

APPENDIX N. 5

COSI INTERNATIONAL LTD PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 684 54 630

Ebitda (144) (235) 91




Net Financial income (charges) 4 (1) 5

Earnings before non-recurring items and taxes (167) (261) 94




Pre-tax profit (167) (261) 94


Net Profit (167) (261) 94


ASSETS 31.01.2011 31.01.2010 Change


Invetory 0 0 0

Receivables 324 29 295






Net Equity (505) (338) (167)




Other liabilities 1,069 612 457



148

ANNUAL REPORT2010

APPENDIX N. 5

COSI INTERNATIONAL (SHANGHAI) LTD PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 893 0 893

Ebitda 28 (32) 60


Operating profit 28 (32) 60

Goodwill depreciation (0) (0) 0

Net Financial income (charges) (0) 1 (1)

Earnings before non-recurring items and taxes 28 (31) 59




Pre-tax profit 28 (31) 59


Net Profit (6) (31) 25


ASSETS 31.01.2011 31.01.2010 Change


Invetory 0 0 0

Receivables 118 0 118






Net Equity 74 74 0







149

ANNUAL REPORT2010

APPENDIX N. 5

GRUPPO COIN UNGHERIA K.F.T. PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 3,168 1,576 1,592

Ebitda (1,052) (538) (514)


Operating profit (1,271) (615) (656)



Earnings before non-recurring items and taxes (1,319) (768) (551)

Adjustments to financial assets value 0 (1,184) 1,184



Pre-tax profit (1,319) (1,952) 633


Net Profit (1,336) (1,966) 630


ASSETS 31.01.2011 31.01.2010 Change

Net fixed assets 1,726 1,884 (158)

Invetory 1,398 1,152 246





Total assets 3,645 3,549 96


Net Equity (767) (1,909) 1,142


Financial liabilities 8 3,129 (3,121)

Trade payables 156 1,970 (1,814)



Total liabilities 3,645 3,549 96

150

ANNUAL REPORT2010

APPENDIX N. 5

GRUPPO COIN DEP. STORES D.o.o. PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010

Net Revenues 6,136

Ebitda (886)

Depreciation and ammortization (2)

Operating profit (888)

Goodwill depreciation 0

Net Financial income (charges) (165)

Earnings before non-recurring items and taxes (1,053)

Adjustments to financial assets value 0

Non recurring income 0

Non recurring charges 0

Pre-tax profit (1,053)

Income taxes (0)

Net Profit (1,053)

BALANCE SHEET AS AT 31.01.2011 (‘000 Euro) ASSETS 31.01.2011

Net fixed assets 1,323

Invetory 633

Receivables 545

Financial assets 0

Avaiable funds 274

Accruals and deferred charges 0

Total assets 2,775


Net Equity (999)

Severance indennity and other provisions 0

Financial liabilities 401

Trade payables 3,342

Other liabilities 31

Accruals and deferred income 0

Total liabilities 2,775

151

ANNUAL REPORT2010

APPENDIX N. 5

BRANDHOUSE OVIESSE LTD PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro)

2010

Net Revenues 638

Ebitda (1,189)

Depreciation and ammortization (75)

Operating profit (1,264)

Goodwill depreciation 0

Net Financial income (charges) (48)

Earnings before non-recurring items and taxes (1,312)

Adjustments to financial assets value 0

Non recurring income 0

Non recurring charges 0

Pre-tax profit (1,312)

Income taxes (0)

Net Profit (1,312)


ASSETS 31.01.2011

Net fixed assets 1,876

Invetory 1,235

Receivables 2

Financial assets 0

Avaiable funds 32

Accruals and deferred charges 198

Total assets 3,343


Net Equity 807

Severance indennity and other provisions 1,320

Financial liabilities 0

Trade payables 308

Other liabilities 906

Accruals and deferred income 2

Total liabilities 3,343

152

ANNUAL REPORT2010

APPENDIX N. 5

WANDAR S.R.L. (WINDING UP) PROFIT AND LOSS STATEMENT FY 2010 (‘000 Euro) 2010 2009 Change

Net Revenues 0 0 0

Ebitda (4) (4) 0




Net Financial income (charges) 2 5 (3)

Earnings before non-recurring items and taxes (2) 1 (3)



Non recurring charges 0 (0) 0

Pre-tax profit (2) 1 (3)


Net Profit (10) (7) (3)


ASSETS 31.01.2011 31.01.2010 Change


Invetory 0 0 0


Financial assets 541 544 (3)



Total assets 629 639 (10)


Net Equity 479 488 (9)

Severance indennity and other provisions 145 147 (1)



Other liabilities 4 4 (0)


Total liabilities 629 639 (10)

155

ANNUAL REPORT2010

DECLARATION BY THE MANAGER RESPONSIBLE

156

ANNUAL REPORT2010

STATEMENT ON THE CONSOLIDATED FINANCIAL STATEMENTS PURSUANT TO ARTICLE 81/TER OF CONSOB REGULATION NO.

11971 OF 14 MAY 1999 AND SUBSEQUENT AMENDMENTS AND INTEGRATIONS.

1. The undersigned, Stefano Beraldo, as managing director, and Giovanni Zoppas, as manager in charge of financial reporting, of Gruppo Coin S.pA. state, considering the provisions of paragraphs 3 and 4 of article 154-bis of Legislative decree no. 58 of 24 February 1998:

- the adequacy given the group’s characteristics - the effective application of administrative and accounting

procedures during 2010 to prepare the consolidated financial statements.

2. No significant issues arose.

3. Moreover, they state that:

3.1 The consolidated financial statements at 31 January 2011: a) ) have been prepared in accordance with the IFRS, and recognized

by the Eurpean Union as requested by Regulation (CE) no. 1606/2002 of European Parliament and of European Council, as at 19 July 2002, as well as with the regulations issued to implement Legislative Decree n° 38/2005;

b) comply with the accounting records and entries; c) it is suitable to give a true and fair view of a the financial position

of the issuer and consolidated companies;

3.2 The Directors’ Report includes a reliable analysis of the performance and result of management, as well as of the situation of the issuer and the entirety of the companies, including in consolidation, together with the description of the principal risks and uncertainties to which they are exposed.

Venice, 15 April 2011

Manager in charge Managing Director of financial reporting

Stefano Beraldo Giovanni Zoppas

159

ANNUAL REPORT2010

AUDITORS’ REPORT

160

ANNUAL REPORT2010

PricewaterhouseCoopers SpA

Sede legale e amministrativa: MilanoReg. Imp. Milano 12979880155 Iscritta al n. 43 dell’Albo ConsobBologna Zola Predosa 40069 Via Tevere 18 Tel. 0516186211Viale Gramsci 15 Tel. 0552482811 –Padova 35138 Via Vicenza 4 Tel. 0498734810521242848 – Roma 00154 Largo FochettiGrazioli 73 Tel. 0461237004 - Treviso33100 Via Poscolle 43 Tel. 043225789

www.pwc.com/it

AUDITORS’ REPORT IN ACCORDANCE WITH ARTICLES 14 AND 16 OF LEGISLATIVEDECREE N° 39 OF 27 JANUARY 2010

To the shareholders ofGruppo Coin SpA

1 We have audited the consolidated financial statements of Gruppo Coin SpA and itssubsidiaries (“Coin Group”) as of 31 January 2011 which comprise the statement ofconsolidated financial position, the consolidated income statement,consolidated comprehensive income, the consolidated cash flow statement, the statement ofchanges in consolidated shareholders’Gruppo Coin SpA are responsible for the preparation of these financial statementscompliance with the International Financial Reporting Standards as adopted by the EuropeanUnion, as well as with the regulations issued to implement article 9 of Legislative Decree n°38/2005. Our responsibility is to express an opinion on these consostatements based on our audit.

2 We conducted our audit in accordance with the auditing standards and criteria recommendedby CONSOB, the Italian Commission for listed Companies and the Stock Exchange. Thosestandards and criteria requireassurance about whether the consolidated financial statements are free of materialmisstatement and, taken as a whole, are presented fairly. An audit includes examining, on atest basis, evidence saudit also includes assessing the accounting principles used and significant estimates made bythe directors. We believe that our audit provides a reasonable basis for our opinion.

For comparative purposes the consolidated financial statements presentthe prior year. As discussed in the explanatory notes,adjusted the comparative data related toprior year, on which we issued our auditors’ report onretrospective adjustment of the corresponding data of the prior period and the informationpresented in the exaudited by us for the purpose of expressing our opinion on the Coin Group consolidatedfinancial statements as of 31 January 201

3 In our opinion, the consolidated financial statements ofcomply with the International Financial Reporting Standards as adopted by the EuropeanUnion, as well as with the regulations issued to implement article 9 of Legisla38/2005; accordingly, they have been prepared clearly and give a true and fair view of thefinancial position, result of operations and cash flows of


amministrativa: Milano 20149 Via Monte Rosa 91 Tel. 0277851 Fax 027785240 Cap. Soc. 3.754.400,00 Euro i.v., C.F. e P.IVA eReg. Imp. Milano 12979880155 Iscritta al n. 43 dell’Albo Consob - Altri Uffici: Bari 70124 Via Don Luigi Guanella 17 Tel. 0805640211

Zola Predosa 40069 Via Tevere 18 Tel. 0516186211 – Brescia 25123 Via Borgo Pietro Wuhrer 23 Tel. 0303697501Genova 16121 Piazza Dante 7 Tel. 01029041 – Napoli 80121 Piazza dei Martiri 58 Tel. 08136181

35138 Via Vicenza 4 Tel. 049873481 – Palermo 90141 Via Marchese Ugo 60 Tel. 091349737 – Parma00154 Largo Fochetti 29 Tel. 06570251 – Torino 10129 Corso Montevecchio 37 Tel. 011556771

Treviso 31100 Viale Felissent 90 Tel. 0422696911 – Trieste 34125 Via Cesare Battisti 18 Tel. 0403480781l. 043225789 – Verona 37122 Corso Porta Nuova 125 Tel.0458002561

AUDITORS’ REPORT IN ACCORDANCE WITH ARTICLES 14 AND 16 OF LEGISLATIVE39 OF 27 JANUARY 2010

We have audited the consolidated financial statements of Gruppo Coin SpA and itssubsidiaries (“Coin Group”) as of 31 January 2011 which comprise the statement ofconsolidated financial position, the consolidated income statement,

ated comprehensive income, the consolidated cash flow statement, the statement ofchanges in consolidated shareholders’ equity and related explanatory notes. The directors ofGruppo Coin SpA are responsible for the preparation of these financial statementscompliance with the International Financial Reporting Standards as adopted by the EuropeanUnion, as well as with the regulations issued to implement article 9 of Legislative Decree n°38/2005. Our responsibility is to express an opinion on these consostatements based on our audit.

We conducted our audit in accordance with the auditing standards and criteria recommendedby CONSOB, the Italian Commission for listed Companies and the Stock Exchange. Thosestandards and criteria require that we plan and perform the audit to obtain the necessaryassurance about whether the consolidated financial statements are free of materialmisstatement and, taken as a whole, are presented fairly. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made bythe directors. We believe that our audit provides a reasonable basis for our opinion.

comparative purposes the consolidated financial statements presentthe prior year. As discussed in the explanatory notes, the directors have retrospectivelyadjusted the comparative data related to the audited consolidated financial statements of theprior year, on which we issued our auditors’ report on 11 May 2010.retrospective adjustment of the corresponding data of the prior period and the informationpresented in the explanatory notes, with regards to changes made to such data, have beenaudited by us for the purpose of expressing our opinion on the Coin Group consolidatedfinancial statements as of 31 January 2011.

In our opinion, the consolidated financial statements of Coin Groupcomply with the International Financial Reporting Standards as adopted by the EuropeanUnion, as well as with the regulations issued to implement article 9 of Legisla38/2005; accordingly, they have been prepared clearly and give a true and fair view of thefinancial position, result of operations and cash flows of Coin Group for the period then ended.

20149 Via Monte Rosa 91 Tel. 0277851 Fax 027785240 Cap. Soc. 3.754.400,00 Euro i.v., C.F. e P.IVA e70124 Via Don Luigi Guanella 17 Tel. 0805640211 –

25123 Via Borgo Pietro Wuhrer 23 Tel. 0303697501 – Firenze 5012180121 Piazza dei Martiri 58 Tel. 08136181 –

Parma 43100 Viale Tanara 20/A Tel.10129 Corso Montevecchio 37 Tel. 011556771 – Trento 38122 Via

34125 Via Cesare Battisti 18 Tel. 0403480781 - Udine

AUDITORS’ REPORT IN ACCORDANCE WITH ARTICLES 14 AND 16 OF LEGISLATIVE

We have audited the consolidated financial statements of Gruppo Coin SpA and itssubsidiaries (“Coin Group”) as of 31 January 2011 which comprise the statement ofconsolidated financial position, the consolidated income statement, the statement of

ated comprehensive income, the consolidated cash flow statement, the statement ofequity and related explanatory notes. The directors of

Gruppo Coin SpA are responsible for the preparation of these financial statements incompliance with the International Financial Reporting Standards as adopted by the EuropeanUnion, as well as with the regulations issued to implement article 9 of Legislative Decree n°38/2005. Our responsibility is to express an opinion on these consolidated financial

We conducted our audit in accordance with the auditing standards and criteria recommendedby CONSOB, the Italian Commission for listed Companies and the Stock Exchange. Those

that we plan and perform the audit to obtain the necessaryassurance about whether the consolidated financial statements are free of materialmisstatement and, taken as a whole, are presented fairly. An audit includes examining, on a

upporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made bythe directors. We believe that our audit provides a reasonable basis for our opinion.

comparative purposes the consolidated financial statements present corresponding data ofthe directors have retrospectively

the audited consolidated financial statements of the. The methods used for the

retrospective adjustment of the corresponding data of the prior period and the informationplanatory notes, with regards to changes made to such data, have been

audited by us for the purpose of expressing our opinion on the Coin Group consolidated

Coin Group as of 31 January 2011comply with the International Financial Reporting Standards as adopted by the EuropeanUnion, as well as with the regulations issued to implement article 9 of Legislative Decree n°38/2005; accordingly, they have been prepared clearly and give a true and fair view of the

Group for the period then ended.

161

ANNUAL REPORT2010

4 The directors of Gruppo Coinand a report on corporate governance and ownership structure published in section“Corporate Governance”laws and regulations. Our responsibility is to express an opinion on the consistency of thereport on operations and of the information referred to in paragraph 1, letters c), d), f), l), m),and paragraph 2, letter b), oreport on corporate governance and ownership structure, with the financial statements, asrequired by law. For this purpose, we have performed the procedures required under ItalianAuditing StandardDottori Commercialisti e degli Esperti Contabili) and recommended by CONSOB. In ouropinion, the report on operations and the information referred to in paragraph 1, lettf), l), m) and paragraph 2, letter b), of article 123in the report on corporate governance and ownership structure are consistent with theconsolidated financial statements of

Treviso, 6 May 2011


Signed by

Roberto Adami(Partner)

This report has been translated into the English language from the original, which was issued inItalian, solely for the convenience of

Gruppo Coin SpA are responsible for the preparation of a report on operationsand a report on corporate governance and ownership structure published in section“Corporate Governance” of the website of Gruppo Coin SpA in compliance with the applicablelaws and regulations. Our responsibility is to express an opinion on the consistency of thereport on operations and of the information referred to in paragraph 1, letters c), d), f), l), m),and paragraph 2, letter b), of article 123-bis of Legislative Decree n°report on corporate governance and ownership structure, with the financial statements, asrequired by law. For this purpose, we have performed the procedures required under Italian

Standard n° 001 issued by the Italian Accounting Profession (Consiglio Nazionale deiDottori Commercialisti e degli Esperti Contabili) and recommended by CONSOB. In ouropinion, the report on operations and the information referred to in paragraph 1, lettf), l), m) and paragraph 2, letter b), of article 123-bis of Legislative Decreein the report on corporate governance and ownership structure are consistent with theconsolidated financial statements of Gruppo Coin SpA as of 31 January


This report has been translated into the English language from the original, which was issued inItalian, solely for the convenience of international readers.

2 of 2

the preparation of a report on operationsand a report on corporate governance and ownership structure published in section

in compliance with the applicablelaws and regulations. Our responsibility is to express an opinion on the consistency of thereport on operations and of the information referred to in paragraph 1, letters c), d), f), l), m),

n°. 58/98 presented in thereport on corporate governance and ownership structure, with the financial statements, asrequired by law. For this purpose, we have performed the procedures required under Italian

001 issued by the Italian Accounting Profession (Consiglio Nazionale deiDottori Commercialisti e degli Esperti Contabili) and recommended by CONSOB. In ouropinion, the report on operations and the information referred to in paragraph 1, letters c), d),

bis of Legislative Decree n° 58/98 presentedin the report on corporate governance and ownership structure are consistent with the

January 2011.

This report has been translated into the English language from the original, which was issued in

GRUPPO COIN SpAVia Terraglio, 17

VENEZIA MESTRE (VE)

Documents

Gruppo Coin - Annual Report 2010 (english)