report, Board of Statutory auditors - Dmail Group Spa

INDEX 

Dmail Group S.p.A. 

Registered and Administrative Office: Via G. Ripamonti no. 89 – 20141 Milan (MI) 

Share capital 15,300,000 Euro – Fiscal Code and VAT Registration and 

Companies Register Number: 12925460151 

COMPANY BODIES...................................................................................................................................................................................................... 3 

GROUP STRUCTURE AND HUMAN RESOURCES............................................................................................................................................................ 5 

MANAGEMENT REPORT ON THE CONSOLIDATED BALANCE SHEET 

MANAGEMENT REPORT 

Introduction (ias/ifrs applicaTion).................................................................................................................................................................................... 7 

SUMMARY DATA .......................................................................................................................................................................................................... 7 

SIGNIFICANT EVENTS IN THE ACCOUNTING PERIOD................................................................................................................................................... 8 

COMMENTS ON THE ACCOUNTING YEAR RESULT .................................................................................................................................................... 11 

FINANCIAL STATUS .................................................................................................................................................................................................... 15 

INVESTMENTS............................................................................................................................................................................................................ 15 

RESEARCH, DEVELOPMENT AND INNOVATION .......................................................................................................................................................... 15 

EVENTS SUBSEQUENT TO THE ACCOUNTING YEAR’S CLOSURE................................................................................................................................. 16 

MANAGEMENT’S FORESEEABLE EVOLUTION.............................................................................................................................................................. 16 

TREND OF THE DMAIL GROUP S.P.A. SHARE............................................................................................................................................................... 16 

PARA-SOCIAL AGREEMENT ........................................................................................................................................................................................ 17 

ADOPTION OF THE ETHICAL CODE ON THE SUBJECT OF “INTERNAL DEALING” ........................................................................................................ 17 

ADOPTION OF THE SELF-DISCIPLINE CODE ............................................................................................................................................................... 18 

CONSOLIDATED BALANCE SHEET 

ACCOUNTING STATEMENTS 

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES ........................................................................................................................................... 20 

CONSOLIDATED PROFIT AND LOSS ACCOUNT ......................................................................................................................................................... 21 

FINANCIAL STATEMENT ............................................................................................................................................................................................. 22 

STATEMENT OF NET WORTH VARIATIONS.................................................................................................................................................................. 23 

EXPLANATORY NOTES 

1 – GENERAL-NATURE INFORMATION........................................................................................................................................................................ 25 

2 – DRAWING UP CRITERIA ........................................................................................................................................................................................ 27 

• Compliance with IFRS ................................................................................................................................................................................ 27 

• Consolidation principles............................................................................................................................................................................. 28 

• Form and contents .................................................................................................................................................................................... 28 

• Consolidation area.................................................................................................................................................................................... 28 

• Controlled Companies............................................................................................................................................................................... 31 

• Joint-control companies............................................................................................................................................................................. 31 

• Associated companies ............................................................................................................................................................................... 31 

• Transactions done away with in the consolidation process ............................................................................................................................ 31 

• Criteria and exchange rates applied in the conversion of balance sheets......................................................................................................... 32 

3 – VARIATION OF THE ACCOUNTING PRINCIPLES .................................................................................................................................................... 32 

4 – REPORT ON THE ACCOUNTING PRINCIPLES APPLIED ........................................................................................................................................... 33 

5 – COMPANY AGGREGATIONS (ACQUISITIONS)...................................................................................................................................................... 41 

6 – OTHER SECTOR INFORMATIVE REPORT ................................................................................................................................................................ 44 

1

7 – START UP AND OTHER INDEFINITE-LIFE INTANGIBLE ASSETS................................................................................................................................. 45 

8 – IMPAIRMENT ........................................................................................................................................................................................................ 45 

9 – DEFINITE-LIFE INTANGIBLE ASSETS........................................................................................................................................................................ 47 

10 – FIXED ASSETS (OWNED AND UNDER FINANCIAL LEASING) .................................................................................................................................. 48 

11 – SHAREHOLDINGS .............................................................................................................................................................................................. 50 

12 – EQUITIES AND FINANCIAL CREDITS .................................................................................................................................................................... 50 

13 – SUNDRY CREDITS AND OTHER NON-CURRENT ASSETS....................................................................................................................................... 50 

14 – ASSETS FOR ADVANCE TAXATION ...................................................................................................................................................................... 51 

24 – DEFERRED TAXATION FUND ............................................................................................................................................................................... 51 

15 – STOCK ON HAND ............................................................................................................................................................................................. 52 

16 – COMMERCIAL CREDITS, SUNDRY AND OTHER CURRENT ASSETS......................................................................................................................... 52 

17 – EQUITIES DIFFERENT FROM SHAREHOLDINGS.................................................................................................................................................... 53 

18 – FINANCIAL CREDITS AND OTHER CURRENT FINANCIAL ASSETS........................................................................................................................... 53 

19 – CASH AND OTHER EQUIVALENT RESOURCES ..................................................................................................................................................... 53 

20 – CEASED ASSETS DESTINED TO BE CEDED ........................................................................................................................................................... 54 

21 – NET WORTH ...................................................................................................................................................................................................... 54 

22 – NON-CURRENT FINANCIAL LIABILITIES................................................................................................................................................................ 55 

23 – EMPLOYEES BENEFITS ........................................................................................................................................................................................ 56 

24 – DEFERRED TAXATION FUND ............................................................................................................................................................................... 57 

25 – FUNDS FOR FUTURE RISKS AND CHARGES ......................................................................................................................................................... 57 

26 – SUNDRY DEBTS AND OTHER NON-CURRENT LIABILITIES ..................................................................................................................................... 58 

27 – CURRENT FINANCIAL LIABILITIES......................................................................................................................................................................... 59 

28 – COMMERCIAL DEBTS, FOR TAXES AND OTHER CURRENT LIABILITIES ................................................................................................................... 60 

29 – REVENUE ........................................................................................................................................................................................................... 61 

30 – PURCHASES ....................................................................................................................................................................................................... 61 

31 – COSTS FOR SERVICES ........................................................................................................................................................................................ 62 

32 – PERSONNEL COSTS ........................................................................................................................................................................................... 63 

33 – OTHER OPERATING COSTS................................................................................................................................................................................ 63 

34 – DEPRECIATION, PROVISIONS AND DEVALUATIONS ............................................................................................................................................ 63 

35 – FINANCIAL INCOME AND CHARGES .................................................................................................................................................................. 64 

36 - TAXATION .......................................................................................................................................................................................................... 64 

37 – PROFIT PER SHARE ............................................................................................................................................................................................. 64 

38 – OTHER INFORMATION ...................................................................................................................................................................................... 65 

• Subsequent events..................................................................................................................................................................................... 65 

• Correlated parties ..................................................................................................................................................................................... 65 

APPENDIX – TRANSITION TO THE IFRS INTERNATIONAL ACCOUNTING PRINCIPLES .................................................................................................... 68 

AUDIT COMMITTEE REPORT......................................................................................................................................................... ………………… 76 

AUDITING FIRM’S REPORT ................................................................................................................................................................................... 79 

GROUP COMPANIES FINANCIAL STATEMENT LAYOUTS....................................................................................................................................... 81 

2005 FINANCIAL STATEMENT MANAGEMENT REPORT .................... 88 

FINANCIAL STATEMENT AS OF 31/12/2005 ............................................................................................................................................... 99 

PROFIT AND LOSS ACCOUNT RECLASSIFIED ACCORDING TO THE SCHEME OF LEG. DEC 127/91........................................................................... 103 

SUPPLEMENTARY NOTE TO THE FINANCIAL STATEMENT AS OF 31/ NOTE AS AT 31/12/2005................................................................................... 104 

AUDIT COMMITTEE REPORT................................................................................................................................................................................. 130 

FIRM’S AUDIT REPORT.............................................................................................................................................................................................. 139 

2

COMPANY BODIES 

Board of Directors 

Chairman and Managing Director Adrio Maria de Carolis 

Managing Director Gianluigi Viganò 

Members Maurizio Valliti 

3 

Mario Volpi 

Giuliano Vaccari 

Independent members Luca De Martini 

Board of Auditors 

Andrea Zanone Poma 

Chairman Lorenzo Ravizza 

Statutory Auditors Angelo Galizzi 

Mauro Bottega 

Alternate Auditors Giampaolo Targia 

Auditing company 

Remuneration Committee 

Luigi Pirovano 

Reconta Ernst & Young S.p.A. 

Independent Luca De Martini 

Independent Andrea Zanone Poma 

Non executive Maurizio Valliti

Internal control committee 

Executive Luisa Fabiani 

Independent Luca De Martini 

Independent Andrea Zanone Poma 

Non-executive Mario Volpi 

The components of the internal control Committee and Remuneration Committee were appointed by the 

Board of Directors at the meeting dated May 4, 2005. 

4

GROUP STRUCTURE AND HUMAN RESOURCES 

Dmail Group S.p.A. is the parent company that directly and indirectly controls the other companies, 

represented in the following organisational chart, in which are outlined the essential information relative to 

the Group’s company. 

50% 

70% 

70% 

D-Mail S.r.l. D-Store S.r.l. 

Otto S.r.l. 

Area Media Commerce Area Media Locali Altre Partecipazioni 

100% 

D-Mail Venda 

Directa S.A. 

D-Mail 

Direct S.r.l. 

CAT S.p.A. 

D-Mail 

Store B.V. 

Lake View 

Impex S.r.l. 

71% 

100% 

60% 

100% 

Antares 

Editoriale S.r.l. 

60% 

100% 

99% 

D-Stand 10 

S.a.s. 

Promotion 

Sondrio S.r.l. 

60% 

Editrice 

Lecchese S.r.l. 

100% 

Publisette S.r.l. 

Dmedia 

Group S.p.A. 

40% 

Editrice 

Valtellinese S.r.l. 

Promotion 

Digitale S.r.l. 

Editrice 

Vimercatese S.r.l. 

Promotion 

Lecco S.r.l. 

5 

100% 

Publiest S.r.l. 

30% 30% 

40% 40% 

80% 

100% 

Promotion 

Merate S.r.l. 

100% 

100% 

Editrice 

Martesana S.r.l. 

60% 60% 

Giornale di 

Merate S.r.l. 

20% 

Publitorino 

S.r.l. 

The following table illustrates the number of employees for each company in the Group: 

COMPANY 

31/12/2005 

10% 

A.P.V. S.r.l. 

31/12/2004 

Dmail Group S.p.A. 2 2 

D-MAIL S.r.l. 57 53 

Dmail Direct S.r.l. 9 

CAT Import Export S.p.A. 23 22 

D-MAIL VENDA DIRECTA SA 28 26 

D-Media Group S.p.A. 101 88 

Total 220 191





MANAGEMENT REPORT ON THE 


AS OF 31/12/2005 

6


INTRODUCTION (IAS/IFRS APPLICATION) 

With the coming into force of European Regulation 1606/2002 dated July 19, 2002, starting from 

accounting year 2005, the companies with shares admitted to negotiations in a regulated market of the 

European Union member Countries must draw up the consolidated balance sheet complying with 

international accounting principles (IAS / IFRS) ratified by the European Commission. 

In compliance with the provisions of those regulations, starting from January 1, 2005, the Dmail group 

has adopted the international accounting principles (IAS / IFRS). 

The present balance sheet as of December 31, 2005, was therefore drawn up by applying the evaluation 

and measurement criteria established by IAS / IFRS, adopted by the European Commission. 

The same criteria were adopted for the drawing up of the comparative economic and patrimonial 

situations. 

In compliance with the Consob DEM / 5025723 communication dated April 15, 2005, the balances 

tabled in the reconciliation statements relative to January 1, 2004 and December 31, 2004 underwent 

complete auditing. 

SUMMARY DATA 

MAIN ECONOMIC DATA 31/12/2005 31/12/2004 DIFF. DIFF. % 

Revenue and other operating income 49,480 45,179 4,301 9.5% 

Gross operating margin 4,938 4,085 853 20.9% 

Net operating result 3,226 2,470 756 30.6% 

Result before tax 2,625 2,080 545 26.1% 

MAIN PATRIMONIAL/FINANCIAL DATA 31/12/2005 31/12/2004 DIFF. DIFF. % 

Net investment capital 

Net group and third party assets 32,682 26,150 6,532 24.98% 

Net group assets 31,641 25,532 6,109 23.93% 

Net third party assets 1,041 618 423 68.40% 

Net financial position (1,566) (791) (775) 98.01% 

Distributed dividends 765 765 

NET FINANCIAL POSITION 31/12/2005 31/12/2004 DIFF. DIFF. % 

Liquid assets 4,134 2,841 1,293 45.52% 

Debts towards banks (5,700) (3,632) (2,068) 42.83% 

Net indebtedness (1,566) (791) (775) 42.83% 

7

SIGNIFICANT EVENTS IN THE ACCOUNTING PERIOD 

a) Resolutions passed at meetings 

On January 25, 2005, with a deed attested by notary public Cambi in Bagno a Ripoli, the Ordinary 

shareholders meeting of Dmail Group S.p.A. passed a resolution for Authorisation to purchase and 

provide for its own shares, in compliance with the joint provisions of articles 2357 and 2357-ter of the 

Civil Code, as well as art. 132 of Legislative Decree no. 58, dated February 24 1998. 

The extraordinary meeting of the company was held on January 25, 2005, which passed a resolution to 

increase the capital reserved for minority shareholders of controlled company Gidiemme Stampa S.r.l., in 

compliance with art. 2441, clause 4 of the Civil Code, for 2,400,000 Euro nominal, through the issue of 

1,200,000 new shares with a nominal value of 2.00 Euro, with premium for each share of 2.6923 Euro, 

taking the share capital to an overall 15,300,000 Euro as well as an increase of the reserve from the 

share premium of 3,231,000 Euro, which thus reached an amount of 17,879,000 Euro. The resolution 

for the capital increase was passed by the granting of 43% of the share capital of Gidiemme Stampa 

S.r.l. and generated the entry for a start up of 5,561,000 Euro. 

On March 14, 2005, the above allotment was carried out by means of a deed attested by Notary Public 

Riccardo Cambi in Bagno a Ripoli. 

On April 11, 2005, the increase for which the resolution was passed by the extraordinary meeting dated 

last January 25 was carried out. 

On January 27, 2005, the trade name of controlled company D-Mail Store S.r.l was changed to D-Store 

S.r.l. and its registered office was transferred from Pontassieve (FI) to Milan. 

On May 4, 2005, the shareholders meeting passed a resolution on a dividend of 0.10 Euro being paid 

for each of the 7,650,000 shares in circulation, and on the right to this. 

On July 11, 2005, the deed was stipulated for the merger between Editrice Lecchese S.r.l. and Editrice 

Lariana S.r.l. uni-personnel, coming into force on January 1, 2005. 

On November 9, 2005, the deed was stipulated for the merger by incorporation between company 

DMedia Group S.p.A. and Gidiemme Stampa S.r.l., coming into force on January 1, 2005. 

8

) Shareholdings 

On January 5, 2005 Otto S.r.l. was formed, with a share capital of 40,000 Euro of which D-Mail S.r.l. 

uni-personnel holds 50% of the quotas. The purpose of this company is to provide transport and postal 

logistic services to D-Mail S.r.l., to the other shareholder and to third parties, in order that the synergies 

between the two founder members be essentially exploited. 

On January 5, 2005, company Otto S.r.l. was established, in which D-Mail S.r.l. uni-personnel has a 

50% share and whose company purpose is the provision of logistic services. 

On January 11, 2005, Dmail Group S.p.A. transferred a share quota amounting to 29% of the share 

capital of D-Store S.r.l. to L’Innominato S.p.A. for an exchange value of 180,000 Euro. 

In order to increase penetration into the strongly growing European markets, on January 21, company 

Dmail Direct S.r.l. (Rumania) was established, of which D-Mail S.r.l. holds 70% of the share capital. The 

objective is to replicate the Italian model in that country. 

On March 2, 2005, the minority shareholding of 20% held in company Email.it S.r.l. was ceded for an 

exchange value of 50,000 Euro. 

On April 13, 2005, the entire shareholding held in company Promotion Service S.r.l., in liquidation, was 

ceded for an exchange value of 50 000 Euro. 

On June 14, 2005, DMedia Group S.p.A. stipulated a preliminary agreement for the acquisition of 

100% of the share capital of companies Editrice La Martesana S.r.l. and Publiest S.r.l. The former is the 

publishing company of La Gazzetta della Martesana, the latter is the advertising space broker company. 

The acquisition operation was concluded on July 21, 2005. In applying the IAS/IFRS accounting 

principles, the property data of the two companies were included in the consolidation area, starting from 

January 2005, while the profit and loss data were taken on from July 2005. 

On November 3, 2005, the company Dmail Store B.V. was established under Dutch law, with the 

purpose of the remote sale of Dmail products on the international markets, and to be able to provide 

Italian companies, in outsourcing mode, with the possibility of being present in Italy and at international 

level in the remote-sales sector and in e-commerce, freeing them from having to make the considerable 

investments demanded by the specific sector. Dmail Group S.p.A. holds 60% of the share capital 

amounting to 60,000 Euro. 

On December 20, 2005, 100% of the share capital in Rumanian Law company Lakeview Impex S.r.l was 

acquired. This company is dormant and is the owner of a commercial-use building located in the centre 

9

of Bucharest, earmarked to become the new Dmail sale-point. The book value of the shareholding is in 

line and coherent with the building’s commercial value. 

On November 10, 2005, DMedia Group S.p.A. ceded its shareholding in Brown Editore S.p.A. for an 


On November 30, 2005, company Promotion Sondrio S.r.l., was established, 60% owned by DMedia 


On November 30, 2005 Promotion Merate S.r.l. acquired the remaining 3.3% of company Editrice 


On December 22, 2005, company Antares Editoriale S.r.l. acquired a further 9% of D-Stand S.a.s. in 

which it already had a shareholding. 

On December 22, 2005, DMedia Group S.p.A. acquired a 20% shareholding in company Publitorino 

S.r.l. 

c) Corporate bodies 

On March 23, 2005, following the resignations of Directors Gucci, Gianluigi Viganò, Giancarlo Ferrario 

and Giuliano Vaccari, the whole Board of Directors fell from office. 

On May 4, 2005, the Shareholders Meeting appointed the new Board of Directors and the new Board of 

Auditors for the 2005-2007 three-year period, fixing the relative emoluments. The new Board of 

Directors is made up by Messrs: Adrio Maria de Carolis, Gianluigi Viganò, Maurizio Valliti, Giuliano 

Vaccari, Mario Volpi, Luca Mario De Martini (independent director) and Andrea Zanone Poma 

(independent director). The new Board of Auditors is made up by Messrs.: Lorenzo Ravizza (Chairman), 

Angelo Galizzi and Mauro Bottega (Statutory Auditors) and Giampaolo Targia and Luigi Pirovano 

(Alternate Auditors). 

d) Search for strategic partners 

On March 7, 2005, Cairo Communication S.p.A. stipulated an agreement with several partners for the 

acquisition of 10% of the share capital of Dmail Group S.p.A. The acquisition was completed with the 

transfer of 765,000 Dmail Group S.p.A. shares on August 1, 2005. 

10

COMMENTS ON THE ACCOUNTING YEAR RESULT 

CONSOLIDATED PROFIT AND LOSS ACCOUNT 

PROFIT AND LOSS ACCOUNT 31/12/2005 31/12/2004 Variations Variations % 

Revenue 46,431 42,736 3,696 8.6% 

Other revenues 3,049 2,443 606 24.8% 

Total Revenue and other revenues 49,480 45,179 4,302 9.5% 

Costs for purchases (14,877) (14,235) (642) 4.5% 

Costs for services (22,360) (18,839) (3,521) 18.7% 

Personnel costs (5,576) (5,488) (87) 1.6% 

Other operative costs (1,729) (2,531) 802 (31.7%) 


Net operating margin (1,713) (1,615) (98) 6.1% 


Net financial income (charges) (601) (390) (211) 54.1% 

Before-tax result and deductions 2,625 2,080 545 26.2% 

Income tax (1,364) 2,223 (3,587) 

Net result of operating assets 1,261 4,303 (3,042) 

Net result of assets destined for divestment 73 (73) 

Profit for the period 1,261 4,376 (3,115) 

The balance sheet closed on December 31, 2005 tables a net positive result for the accounting year 

amounting to 1,261,000 Euro. 

The value of production moves from 45,179,000 Euro to 49,480,000 Euro, showing an increase of 

9.5%. 

The gross operative margin has recorded a growth of 20.9%, with a percentage incidence on the value 

of production of 10%. 

The net operative result goes up from 2,470,000 Euro to 3,226,000 Euro, recording a difference 

amounting to 756,000 Euro, corresponding to 30.6%. Furthermore, the incidence as compared to the 

value of production moves, increases from 5.5% in 2004 to 6.5% in 2005. Even discounting greater 

financial charges, the result before tax moves from 2,080,000 Euro to 2,625,000 Euro with an increase 

amounting to 26.2% and an incidence on the value of production amounting to 5.3% as compared with 

4.6% of the 2004. The profit for the period amounts to 1,261,000 Euro, but is not comparable with that 

of the previous accounting year. In fact, whereas advance taxes were accounted for amounting to 

2,223,000 Euro in the course of year 2004, in 2005 the taxes had a negative impact amounting to 

1,364,000 Euro. 

The analysis of the data clearly highlights the group’s optimal performance in the various economic, 

patrimonial and financial indicators. 

During the course of 2005 the activities envisaged by the approved strategic plan were carried out, and 

all the group’s companies have strengthened their organisations, in the face of ambitious programmes of 

organic growth. The organic growth, the intrinsic strategic and competitive validity of the business 

models and the patrimonial solidity reached, paint a very positive picture of the group and of the 

perspectives in the short and medium term. 

11

RESULTS BY AREA OF ACTIVITY 

Media Commerce Area 

Dmail Italia 31/12/2005 31/12/2004 Variations Variations % 

Revenue 18,136 16,062 2,074 12.9% 

Other revenues 1,494 1,509 (15) (1%) 

Total revenues and other operating income 19,630 17,571 2,059 11.7% 


Gross contribution margin 12,019 10,409 1,610 15.5% 

Costs for services (7,618) (6,752) (866) 12.8% 

Personnel costs (1,589) (1,430) (159) 11.1% 

Other operating costs (676) (825) 149 (18.1%) 


Depreciation and devaluation (289) (297) 8 (2.5%) 



Before-tax result and deductions 1,635 1,007 628 62.3% 

Income tax (898) 1,020 (1,918) 

Result for the accounting year 737 2,027 (1,290) 

Foreign Dmail 31/12/2005 31/12/2004 Variations Variations % 

Revenue 3,301 3,128 173 5.5% 

Other revenues 252 201 51 25.5% 

Total revenues and other operating income 3,553 3,329 224 6.7% 


Gross contribution margin 2,212 2,078 134 6.4% 


Personnel costs (473) (438) (35) 8.1% 

Other operating costs (211) (334) 123 (36.7%) 

Gross operating margin 5 92 (87) (94.6%) 


Net operating result (59) 25 (84) 

Net financial income (charges) (24) (44) 20 (45.5%) 

Before-tax result and deductions (83) (19) (64) 

Income tax 9 (1) 10 

Result for the accounting year (74) (20) (54) 

12

CAT Import Export S.p.A. 31/12/2005 31/12/2004 Variations Variations % 

Revenue 10,589 11,606 (1,017) (8.8%) 

Other revenues 215 275 (60) (21.9%) 

Total revenues and other operating income 10,804 11,881 (1,077) (9.1%) 

Costs for purchases (5,346) (5,762) 416 (7.2%) 

Gross contribution margin 5,458 6,118 (660) (10.8%) 

Costs for services (2,157) (2,364) 207 (8.8%) 

Personnel costs (978) (935) (43) 4.7% 

Other operative costs (38) (53) 15 (28.3%) 

Gross operating margin 2,285 2,767 (482) (17.4%) 


Net operating result 1,761 2,132 (371) (17.4%) 


Before-tax result and deductions 1,635 2,051 (416) (20.3%) 

Income tax (673) (807) 134 (16.6%) 

Result for the accounting year 962 1,244 (282) (22.7%) 

The positive results attained in the “DMail Italia” area, are a consequence of the relevant actions for the 

consolidation of the clients database, the development of the database prospect through the typical 

leverage of remote sales (catalogue, newsletters, call centre) and of the relevant synergies with direct 

points of sale. 

It has been deemed opportune for the economic data of the “DMail” area to be subdivided into “Italy” 

and “Foreign”, in relation to the location of the controlled companies. 

The overall revenues recorded in the “DMail Italia” area amount to 19,630,000 Euro, highlighting a 

growth of 11.7%. The gross operative margin has increased by 52.3%, with a percentage incidence on 

the overall revenues amounting to 10.9%. 

The profit for the period, which amounts to 737,000 Euro, is not comparable with that of the previous 

accounting year; in fact, whereas advance taxes amounting to 1,020,000 Euro were accounted for 

during 2004, in 2005 taxes had a negative impact of 898,000 Euro. 

Foreign DMail activities record a growth of overall revenues amounting to 6.7%. The gross operative 

margin, which substantially breaks even, discounts the effect of costs sustained at the start up of foreign 

commercial activities, which will already start generating revenue in the early months of 2006. 

The results attained by the Cat, despite showing a reduction of 9.1% in overall revenues mainly 

ascribable to the trends of the reference market, return a gross operative margin of 2,285,000 Euro, with 

an incidence on total revenues of 21.1%. The net operative result has reached 1,761,000 Euro with a 

margin of 16.3%. 

13

Local Media Area 

Media 31/12/2005 31/12/2004 Variations Variations % 

Revenue 15,960 13,313 2,647 29.9% 

Other revenues 986 405 581 143.3% 

Total revenues and other operating income 16,946 13,718 3,228 23.5% 


Costs for services (10,071) (7,935) (2,136) 26.9% 

Personnel costs (2,450) (2,547) 97 (3.8%) 

Other operative costs (587) (770) 183 (23.8%) 


Depreciation and devaluation (755) (617) (138) 22.5% 

Net operating result 1,206 439 767 175.0% 


Before-tax result and deductions 859 171 688 402.2% 

Income tax (442) (197) (245) 124.,4% 

Result for the accounting year 417 (26) 443 

The results returned during 2005 show a market increase as compared with the previous accounting year. 

During the course of 2005 considerable investments were made on the information system and the new 

operative site, which will show their benefits within a short time. All the revenue components (circulation, 

advertising and publishing services) are growing despite the publishing market’s present negative trend. In 

this case too, the uniqueness and the innovative traits of the business model are generating rates of growth, 

margin and competitive defensibility that are positive and reassuring. The gross operative margin places 

itself at 11.6% while the net operative result reaches 7.1%, always compared to revenue. 

DMAIL GROUP S.P.A. 

14 

31/12/2005 31/12/2004 Variations 

Revenue 56 177 (121) 

Other revenues 18 540 (523) 

Costs for purchasing (9) (2) (7) 

Costs for services (1,220) (790) (429) 

Personnel costs (86) (139) 52 

Other operating costs (317) (577) 260 

Depreciation and devaluation (7) (691) 684 

Operating result (1,565) (1,481) (84) 

Net financial income (charges) 1,820 767 1,053 

Before-tax result and deductions 255 (714) 969 

Income tax 541 1,781 (1,240) 

Net result of operating assets 796 1,067 (271) 

Net result of assets destined for divestment 

Profit for the period 796 1,067 (271)

FINANCIAL STATUS 

FINANCIAL STATEMENT Notes 1/01/2005 – 31/12/2005 

15 

1/01/2004 – 

31/12/2004 

Current management cash flow A 3,446 2,748 

Variation of the accounting year profits and losses B (644) 6 

Accounting period activities cash flow C=A+B 2,802 2,754 

Liquidity requirements for investments D (2,127) 610 

Financial activities cash flow E (3,889) 484 

Variation of net financial resources F=C+E (1,087) 3,238 

Net financial resources at the beginning of accounting year G (318) (3,557) 

Variation in the consolidation area H 179 

Net financial resources at the end of accounting year I=F+G+H (1,226) (319) 

The positive cash flow for the accounting year, amounting to 2,802,000 Euro was utilised to the amount 

of 2,127,000 Euro for investments in fixed, intangible and financial assets, to which was added the 

purchase of own shares for 863,000 Euro, the distribution of the dividend for 765,000 Euro and the 

medium/long term financing refund for 133,000 Euro. The positive trend of the liquidity generated by 

the core activities, therefore, benefits from the group’s investment policies for year 2005. 

Composition of net indebtedness 

NET FINANCIAL POSITION 31/12/2005 31/12/2004 DIFF. DIFF. % 

Liquid assets 4,134 2,841 1,293 45.52% 

Debts towards banks (5,700) (3,632) (2,068) 42.83% 

Net indebtedness (1,566) (791) (775) 42.83% 

Furthermore, the entry of leasing contracts with the financial method generates an increase in 

indebtedness amounting to 691,000 Euro in the short term and 2,650,000 Euro in the medium/long 

term, reclassified respectively in items “Sundry Debts” and “other current and non-current liabilities”. 

INVESTMENTS 

The group’s ordinary investments, excluding the purchasing of shareholdings, amount to 3,188,000 Euro 

and are mainly made up by purchases of fixed assets for 2,120,000 Euro and intangible assets for 

1,068,000 Euro. 

RESEARCH, DEVELOPMENT AND INNOVATION 

The research, development and innovation activities are mainly centred in the IT area, in order to 

enhance the Internet platforms, on account of the continuous and foreseeable growth of the on-line 

market. Furthermore, the information network and data transmission system was improved. Finally, the 

group is active in the development of its own business model in Italy and abroad, through the constant 

quest for opportunities and alliances.

EVENTS SUBSEQUENT TO THE ACCOUNTING YEAR’S CLOSURE 

No relevant events are recorded subsequent to the balance sheet closure. 

MANAGEMENT’S FORESEEABLE EVOLUTION 

After having completed the group’s reorganisation process, which is envisaged as being completed 

within the first semester 2006, with the aim of concluding new acquisitions deemed as strategic and 

compatible with the business of the companies belonging to the group, the company intends 

concentrating on creating synergies with existing realities. 

TREND OF THE DMAIL GROUP S.P.A. SHARE 

The trend of the quotation of our company’s share during the course of 2005 was very positive, 

absolutely exceeding the Star reference index. 

Getting down to the trend’s detail of the Dmail Group share, during the course of 2005 we have 

recorded a share swing going from a maximum of 9.8 Euro as at 20/09/2005 to a minimum of 5.43 

Euro as at 03/01/2005. 

The share’s trend and the exchanged volumes during 2005 are illustrated as follows: 

16

PARA-SOCIAL AGREEMENT 

As at 31/12/2005, those participating in the para-social agreement held the following shareholdings: 

no. of shares 

held 

17 

% on the Dmail 

share capital 

no. of 

syndicated shares 

% on the total of 

syndicated shares 

Banfort Consultadoria e Servicios Lda 850,621 11.12 850,621 29.78 

Lumbini S.r.l. 752,744 9.84 752,744 26.35 

Smeraldo S.r.l. 624,254 8.16 624,254 21.86 

Norfin S.p.A 628,582 8.21 628,582 22.01 

Total 2,856,201 37.33 2,856.201 100.00 

ADOPTION OF THE ETHICAL CODE ON THE SUBJECT OF “INTERNAL DEALING” 

The Board of Directors, at the meeting dated August 5, 2004, approved an updating of the pre-existing 

Ethical Code on the subject of “Internal Dealing”, drawn up in compliance with the provisions of articles 

2.6.3 and subsequent, of the “Regulations of the New Market organised and managed by Borsa Italiana 

S.p.A.” and of section IA.2.14 of the relative Instructions. 

The Ethical Code conforms to the quantitative thresholds and the terms set by the above-mentioned 

Italian Stock Exchange Regulations for the detection and communication to the market of the operations 

carried out by “relevant persons” on the financial instruments quoted on the stock exchange and issued 

by the company, and which precisely envisages: 

o the timely communication of the person relevant to the subject, in charge of all operations 

performed on the company’s financial instruments, whatever the amount involved; 

o the communication to the market of the above-mentioned operations for an amount equal to, or 

exceeding 50,000 Euro, within 10 days of open stock exchange, from the end of each calendar 

quarter; or 

o the communication to the market of the operations concerning an amount equal to, or exceeding 

250,000 Euro, immediately on receiving the news of their having been performed by the relevant 

person. 

Furthermore, it envisages: 

o forbidding the carrying out of operations on company financial instruments within the 30 days 

preceding the approval of the trial balance sheet for the accounting year and of the half-yearly 

report, as well as within the 15 days preceding the approval of quarterly reports; 

o the obligation for notification on operations involving the sale of financial instruments deriving 

from the contextual exercising of purchase subscription options attributed within the ambit of 

stock options plan.

The “relevant persons” receivers of the Code have been identified as: 

o the directors, auditors, finance managers and, where appointed, the Company’s general 

managers; 

o the directors, auditors and, where appointed, the general managers of the Main Controlled 

companies, for these intending the companies belonging to the Dmail group which would attain 

revenues exceeding 5 million Euro. 

Furthermore it is highlighted that, from April 1 2006, the new Internal Dealing ethical code will be 

applied, drawn up in observance of the discipline provided for in art. 114, clause 7, TUF, currently in 

force, and in the relative regulatory provisions of articles 152-sexies, 152-septies and 152-octies of the 

“Regolamento Emittenti” regulations as modified by Consob deliberation no. 15232/2005. As regards 

the implementation of the above-mentioned procedure, formal acknowledgement will be provided in the 

Corporate Governance Report for accounting year 2006. 

ADOPTION OF THE SELF-DISCIPLINE CODE 

The company Charter contains provisions that directly receive the forecasts of the Self-Disciplining Code 

of Quoted companies. 

Furthermore, in order to receive what is foreseen by the Self-Disciplining Code of the Quoted 

companies, the Shareholders Meeting held on May 4, 2005, appointed as independent Directors 

Messrs. Luca Mario De Martini and Andrea Zanone Poma. 

During the course of the Board of Directors’ meeting held on May 12, 2005, the independent directors 

Messrs. Luca Mario De Martini, Andrea Zanone Poma and the non-executive director Mr. Maurizio Valliti 

were appointed as members of the “Remuneration Committee” (having as duties information and 

transparency in relation to the modality and definition of the remuneration of the Board of Directors 

members). 

The same Board of Directors appointed as members of the “Internal Control Committee” (which has the 

task of assuring the internal control system’s functionality and adequacy) the independent directors 

Messrs. Luca Mario De Martini, Andrea Zanone Poma and the non-executive directors Mr. Mario Volpi. 

Mrs. Luisa Fabiani was appointed as the committee manager. 

Furthermore, the Board of Directors has also identified the Chairman and Managing Director Mr. Adrio 

Maria de Carolis as the individual “responsible for relationships with Institutional Investors and with other 

Members”. 


The Chairman of the Board of Directors 

Adrio Maria de Carolis 

18






AS OF 31/12/2005 

19


ACCOUNTING STATEMENTS 

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES 

Non-current assets 

Immaterial assets 

20 

Notes 

31/12/2005 

(a) 

31/12/2004 

(b) 

Variations 

(a-b) 

Start up and other indefinite-life intangible assets 7) 15,114 14,581 533 

Definite-life intangible assets 9) 2,277 1,702 575 

Intangible assets 

Buildings, plant and machinery 10) 11,389 6,921 4,468 

Real estate investments 405 339 66 

Other non-current assets 

Shareholdings 11) 25 83 (58) 

Shares and financial credits 12) 65 40 25 

Various credits and other non-current assets 13) 15 9 6 

Advance taxation assets 14) 3,558 4,029 (471) 

TOTAL NON-CURRENT ASSETS (A) 32,847 27,704 5,143 

Current assets 

Stock on hand 15) 5,165 5,114 51 

Commercial credits, various and other current assets 16) 14,847 14,248 599 

Financial Credits and other current financial assets 18) 1 487 (486) 

Cash on hand and other equivalent liquid assets 19) 4,134 2,841 1,293 

TOTAL CURRENT ASSETS (B) 24,148 22,690 1,458 

TOTAL ASSETS CEDED / DESTINED TO BE CEDED (C) 20) 46 186 (140) 

TOTAL ASSETS (A+B+C) 57,042 50,580 6,462 

Net worth 21) 

Quota pertaining to the Parent Company 31,641 25,532 6,109 

Quota pertaining to Third Parties 1,041 618 423 

TOTAL NET WORTH (D) 21) 32,682 26,150 6,532 

Non-current liabilities 

Financial non-current liabilities 22) 340 472 (132) 

TFR and other funds pertaining to personnel 23) 1,414 1,312 102 

Deferred taxation fund 24) 1,756 546 1,210 

Risks and future charges fund 25) 168 161 7 

Various debts and other non-current liabilities 26) 3,149 2,087 1,062 

TOTAL NON-CURRENT LIABILITIES (E) 6,827 4,578 2,249 

Current liabilities 

Risks and future charges fund 25) 401 508 (107) 

Current financial liabilities 27) 5,495 8,939 (3,444) 

Commercial debts, for taxation, sundry and other current liabilities 28) 11,636 10,405 1,231 

TOTAL CURRENT LIABILITIES (F) 

TOTAL LIABILITIES (H=E+F) 

TOTAL NET WORTH AND LIABILITIES (D+H) 

17,532 19,852 (2,320) 

24,360 24,430 (70) 

57,042 50,580 6,462

CONSOLIDATED PROFIT AND LOSS ACCOUNT 

21 

Note 31/12/2005 

(a) 

31/12/2004 

(b) 

Variations 

(a-b) 

Revenue 29) 46,431 42,736 3,696 

Other revenues 29) 3,049 2,443 606 

Costs for purchasing 30) (14,877) (14,235) (642) 

Costs for services 31) (22,360) (18,839) (3,521) 

Personnel costs 32) (5,576) (5,488) (87) 

Other operating costs 33) (1,729) (2,531) 802 

Depreciation and devaluation 34) (1,713) (1,615) (98) 

Operating result 3,226 2,470 756 

Net financial income (charges) 35) (601) (390) (211) 

Before-tax result and deductions 2,625 2,080 545 

Income tax 36) (1,364) 2,223 (3,587) 

Net result of operating assets 


1,261 4,303 (3,042) 

73 (73) 

Profit for the period 1,261 4,376 (3,115) 

Attributable to: 

- Profit for the Period pertaining to Parent Company 

- Profit for the Period pertaining to third party shareholders 

1,209 4,316 (3,107) 

52 60 (8) 

Profit per share Euro/000 37) 0.167 0.669 (0,502)

FINANCIAL STATEMENT 

Result for the accounting year 

- depreciation of intangible assets 

- depreciation of fixed assets 

- advance/deferred taxation 

- provision for severance indemnity 

- provision for risks and other provisions 

- provision for the credit devaluation fund 

- re-valuations 

22 

Note 1/01/2005 - 31/12/2005 1/01/2004 - 31/12/2004 

1,209 4,316 

273 285 

759 607 

359 (3,334) 

232 291 

412 347 

268 236 

Cash flow for the current management A 3,446 2,748 

- Variation of circulating credits (750) (318) 

- Variation of stock on hand (47) (456) 

- Variation of accruals and payables 2 (225) 

- Variation of other credits 1,060 923 

- Variation of debts towards suppliers (667) 877 

- Variation of accrued liabilities 53 (65) 

- Variation of other non-financial debts 530 167 

- Variation of debts towards banks, short term 2200 (2,118) 

- Variation of TFR severance fund (311) (139) 

- Variation of other funds (514) (758) 

Variation of the profits and losses for the accounting year B 1,556 (2,112) 

Net financial flows of operating assets C=A+B 5,002 636 

Variation of intangible assets (462) (480) 

Variation of fixed assets (1,392) (196) 

Variation of financial assets 525 158 

Purchasing/Sale of fixed assets interests (914) 1,339 

Sundries 117 58 

Net financial flows of investment assets D (2,126) 879 

Distribution of dividends (765) 

Purchasing of own shares (864) 

Variation of medium/long term financing (133) (126) 

Net financial flows of financial assets E (3,888) 753 

Variation of net financial resources F=C+E 1,114 1,389 

Net financial resources brought forward G 2,841 1,452 

Variation of the consolidation area H 179 

Net financial resources carried forward at the end of period I=F+G+H 4,134 2,841 

RECONCILIATION BETWEEN FINANCIAL RESOURCES AND FINANCIAL STATEMENT 31/12/2005 31/12/2004 

Banking and postal deposits 4,048 2,808 

Cheques 31 18 

Money and cash on hand 55 15 

Total 4,134 2,841 

(66)

STATEMENT OF NET WORTH VARIATIONS 

SHARE 

CAPITAL 

RESERVE 

FROM 

SUR- 

CHARGE 

LEGAL 

RESERVE 

EXTRA- 

ORDINARY 

RE-SERVE 

REVALUATION 

RESERVE 

RESERVE 

FOR 

OWN 

SHARES 

23 

CURRENCY 

CONV. 

RESERVE 

IAS 

RESERVE 

CUMULATIVE 

PROFITS 

(LOSSES) 

RESULT 

FOR 

THE 

PERIOD 

GROUP’S 

NET 

WORTH 

DI 

THIRD 

PARTIES 

NET 

WORTH 

DI 

TOTAL 

FOR 

GROUP 

AND 

THIRD 

PARTIES 

As of 

01/01/2004 12.900 20,132 149 (7,609) (4,369) 21,203 (30) 21,173 

Movem. of 

result (4,369) 4,369 

Coverage of 

losses (5,554) 5,554 

Other 

movements 628 628 

Profit (loss) 

for the 

period 4,316 4,316 60 4,376 

Other 

movements 13 13 (40) (27) 

Total as of 

31/12/2004 12,900 14,578 149 (6,411) 4,316 25,532 618 26,150 

Movem. of 

the result 53 248 4,015 (4,316) 

Share 

capital 

increases 2,400 3,231 5,631 5,631 

Purchasing 

of own 

shares (864) 864 

Allocation of 

own shares (864) (864) (864) 

Other 

movements (3,007) 3,007 2 (186) (184) 157 (27) 

Dividend 

distribution (765) (765) (765) 

Revaluation 

of buildings 1,082 1,082 214 1,296 

Profit (loss) 

for the 

period 1,209 1,209 52 1,261 

Total as of 

31/12/2005 15,300 13,938 3,060 248 149 2 1,082 (3,347) 1,209 31,641 1,041 32,682 


Chairman of the Board of Directors 

Adrio Maria de Carolis






24


1 – GENERAL-NATURE INFORMATION 

Dmail Group S.p.A. is a company with legal status organised according to the legal system of the Italian 

Republic. Dmail Group S.p.A. and its controlled companies (the “Group”) operate mainly in Italy and 

other European Countries (Portugal, Switzerland, Holland and Rumania). 

The group engages mainly in the direct and remote sales sector, including all activities concerning 

purchasing, logistics, distribution, marketing and multi-channel and multi-product sales, through hard- 

copy catalogues, Internet sites, shops and call centres, own or third parties, and in the local media 

sector. 

The group’s registered office is in Milan, Italy. 

The consolidated balance sheet of the Dmail group is drawn up in Euro (rounded to thousands of Euro) 

which is also the current currency of the economies in which the group mainly operates, and is the 

functional currency of the group as well. The foreign controlled companies are included in the 

consolidated balance sheet, according to the principles described in the note “Consolidation principles 

and techniques”; among these are the Rumanian companies Dmail Direct S.r.l. and Lake View Impex 

S.r.l. that adopt the New Rumanian Lei as the functional currency. 

The annual consolidated balance sheet for 2005 is drawn up in compliance with the IFRS issued by the 

International Accounting Standards Board and ratified by the European Union. The term IFRS also 

implies all the reviewed international accounting principles (“IAS”), all interpretations of the International 

Financial Reporting Interpretations Committee (“IFRIC”), including those previously issued by the 

Standing Interpretations Committee (“SIC”). 

The annual balance sheet of the Parent Company Dmail Group SpA was drawn up according to the 

Italian accounting principles by virtue of the options allowed by the law. 

Adoption of the IFRS in the accounting year 

During the accounting year, the group adopted the following reviewed international accounting 

principles by re-determining the comparative value as necessary. The adoption of the reviewed principles 

has no effect on the net worth as at January 1, 2004. 

IAS 1 Presentation of the Balance Sheet 

IAS 2 Left-over stocks 

IAS 7 Financial statements 

IAS 8 Accounting principles, changes in the accounting estimates and errors 

IAS 10 Events subsequent to the balance sheet date 

IAS 12 Income Tax 

25

IAS 14 Sector information 

IAS 16 Buildings, plant and machinery 

IAS 17 Leasing 

IAS 18 Revenue 

IAS 19 Employees benefits 

IAS 23 Financial charges 

IAS 24 Informative on balance sheet operations with correlated parts 

IAS 27 Consolidated balance sheet 

IAS 28 Shareholding in subsidiaries 

IAS 32 Financial instruments: tabling in the statements for the accounting year and integrative 

information 

IAS 33 Profit per share 

IAS 37 Provisions, potential liabilities and assets 

IAS 38 Intangible assets 

IAS 40 Real estate investments 

New principles and interpretations adopted by the European Union, but not yet in force 

As required by IAS 8 (Accounting principles, changes in the accounting estimates and errors), the 

possible impacts of the new principles or new interpretations on the balance sheet for the initial 

accounting year application are indicated hereunder. 

The IFRS in force after December 31, 2005, are indicated hereunder and are briefly illustrated. 

Modifications to IAS 19 – Employee benefits 

These modifications, adopted by the European Union in November 2005 (EC regulation no. 1910- 

2005), foresee the option for immediately acknowledging the actuarial profits and losses within the 

accounting year in which they take place, not in the profit and loss account, but directly in a specific net 

worth item. These modifications are applicable starting from January 1, 2006. 

IFRIC 4 – Determining whether a contractual agreement contains leasing contracts 

This interpretation, adopted by the European Union in November 2005 (EC regulation no. 1910-2005), 

foresee that agreements not having the legal leasing form, but containing a location, should in any case 

be classified as a financial leasing or an operative leasing, according to what is foreseen by IAS 17. This 

interpretation is applied starting from January 1, 2006. 

Application of this interpretation should not have significant effects on the Group’s balance sheet. 

26

IFRS 7 – Financial instruments: integrative information 

This principle, adopted by the European Union in January 2006 (EC Regulations no. 108/2006) receives 

the section of the Integrating Information (disclosures) contained in IAS 32 (Financial Instruments: entry to 

balance sheet and supplementary information) even though with modifications and integration; 

consequently, IAS 32 modifies its title in “Financial Instruments: entry to balance sheet”. The group 

retains that IFRS 7, applicable starting on January 1, 2007, will not have repercussions on the 

consolidated balance sheet. 

Modifications to IAS 39- Coverage of the operations envisaged between Group companies 

This modification, adopted by the European Union in December 2005 (EC Regulations no. 2006-2005), 

allows the application of hedge accounting in consolidated balance sheets to inter-group programmed 

operations and which is deemed highly probable with foreign currency denomination and is object of 

coverage, on condition that the operation has currency denomination in a currency differing from the 

functional one of the subject carrying out these operations, and that the exchange rate risk determines an 

effect on the consolidated profit and loss account. 

This modification, applicable from January 1, 2006, should not affect the consolidated balance sheet 

since there are no present cases to which this could be applied. 

The Dmail group consolidated balance sheet for the accounting year closed on December 31, 2005, 

was approved on March 27, 2006 by the Board of Directors of the parent Company Dmail Group S.p.A. 

which therefore authorised its publication. 

2 – DRAWING UP CRITERIA 

The balance sheet was drawn up according to the costing principle, excepting for assets destined to 

sales, for land and buildings and for real estate investments; for these categories, as requested and/or as 

allowed by the reference principles, the evaluation was adopted on the strength of the fair value 

principle. 

The values tabled in the present explanatory notes, unless differently specified, are expressed in 

thousands of Euro. 

Compliance with IFRS 

The consolidated balance sheet of the Dmail group as of December 31, 2005, and of the comparative 

period, was drawn up in compliance with the International Financial Reporting Standards, applied to the 

group starting from January 1, 2005. 

In order to allow a homogeneous comparison, the financial statements for year 2004 and the property 

accounts as of December 31, 2004, were adapted to the same accounting principles, where applicable. 

27

The effects deriving from the transition to IAS / IFRS on the relative values as at January 1, 2004, and as 

of December 31, 2004, are illustrated in the appendix; furthermore, the reconciliation envisaged by IFRS 

1 – First adoption of the International Financial Reporting Standards are reported upon, with the addition 

of the relative explanatory notes. 

No exception to the application of the international accounting principles was applied in drawing up the 

present consolidated balance sheet. 

Consolidation principles 

The consolidated balance sheet includes the economic-patrimonial situations of the parent Company 

and of the Italian and foreign controlled companies on which the parent Company directly or indirectly 

exercises control, such as defined by IAS 27 – Consolidated Balance Sheet. 

These balance sheets, whose date of closure coincides with that of the parent Company, were approved 

by the respective administrative bodies and drawn up according to civil-law accounting principles. The 

companies on which a considerable influence is exercised, are consolidated with the net worth method. 

The proportional method is used in consolidating companies subjected to joint control. 

Form and contents 

The balance sheet structure chosen by the group foresees the profit and loss account classified by nature, 

the balance sheet based on the splitting between current and non-current assets and liabilities. 

It is deemed that this representation reflects at best the elements that determined the group’s profit and 

loss account, as well as its patrimonial and financial structure. 

The financial statement is drawn up on the indirect method base. 

As regards the sector disclosure requested by IAS 14, the group’s primary reporting is by activity sector, 

whereas the secondary report tables the information divided by geographic area. 

Consolidation area 

Variations of the consolidation area 

On January 5, 2005, company Otto S.r.l. was incorporated with a share capital of 40,000 Euro, of 

which D-Mail S.r.l. uni-personnel holds 50% of the quotas. The purpose of this company is that of 

providing transport and postal logistic services to D-Mail S.r.l., to the other shareholder and to third 

parties, so as to essentially exploit the synergies between the two founder members. 

On January 5, 2005, company Otto S.r.l. was incorporated, 50% owned by D-Mail S.r.l. uni-personnel, 

and has the main corporate purpose of providing logistic services. 

On January 11, 2005, Dmail Group S.p.A. ceded to L’Innominato S.p.A. a quota amounting to 29% of 

the share capital of D-Store S.r.l. for an exchange value of 180,000 Euro. 

28

In order to increase penetration of the European markets under strong growth, on January 21, 2005, 

company Dmail Direct S.r.l. (Rumania) was incorporated, of which D-Mail S.r.l. holds 70% of the share 

capital. The objective is that of repeating the Italian model in that country. 

On March 2, 2005, the minority shareholding amounting to 20% held in Email.it S.r.l. was ceded for an 


On April 13, 2005, the entire shareholding in company Promotion Service S.r.l. in liquidation was ceded 

for an exchange value of 50,000 Euro. 


100% of the share capital of the Società Editrice La Martesana S.r.l. and Publiest S.r.l. The former is the 

publishing company of La Gazzetta della Martesana, the latter is the advertising agent company. The 

operation for the acquisition was concluded on July 21, 2005. In applying the IAS/IFRS accounting 

principles, the patrimonial data of the two companies were inserted in the consolidation area starting in 

January 2005, while the economic data from July 2005. 

On November 3, 2005, Dmail Store B.V., was formed, a company under Dutch law, which will be 

entrusted with the remote selling of Dmail products on the international markets, providing Italian 

companies in outsourcing mode with the possibility to be present in Italy and at international level in the 

remote selling and e-commerce sector, freeing them from having to make the considerable investments 

demanded by the sector. Dmail Group S.p.A. holds 60% of the share capital amounting to 60,000 Euro. 

On December 20, 2005, 100% of the share capital of the company founded under Rumenian Law 

Lakeview Impex S.r.l. was acquired. This company happens to be dormant and is the owner of a 

commercial-use building located in the centre of Bucharest, destined to be the new Dmail sale point. The 

book value of the shareholding is in line and coherent with the commercial value of the building in 

question. 

On November 10, 2005, DMedia Group S.p.A. ceded the shareholding in Brown Editore S.p.A. for an 


On November 30, 2005, company Promotion Sondrio S.r.l. was established, 60% owned by DMedia 


On November 30, 2005, Promotion Merate S.r.l. acquired the remaining 3.3% of company Editrice 


On December 22, 2005, company Antares Editoriale S.r.l. acquired a further 9% of the already owned 

D-Stand S.a.s.. 

On December 22, 2005, DMedia Group S.p.A. acquired 20% of company Publitorino S.r.l.. 

29

The following tables list the companies included in the consolidation area as of December 31, 2005: 

MEDIA COMMERCE 

SHARE CAPITAL 

D-MAIL S.r.l. 

Uni-personnel 

Via Aretina , 25 - Pontassieve (Fi) 

100% through Dmail Group S.p.A. 3,600,000 

D-STORE S.r.l. 

Via Ripamonti, 89 - Milan 

71% through Dmail Group S.p.A. 

110,000 

CAT IMPORT EXPORT S.p.A. 

Uni-personnel 

Via A. Moro, 41 – Bomporto (Mo) 

100% through Dmail Group S.p.A. 1,.000,000 

D-MAIL VENDA DIRECTA S.A. 

Lisbon – Portugal 

70% through D-Mail S.r.l. Uni-personnel 

155,000 

Otto S.r.l. 

Via Grazia Deledda, 14 

06073 – Corciano (PG) 

50% through D-Mail S.r.l. uni-personnel 155,000 

Dmail Direct S.r.l. 

Str. Vasile Lascar, 126 

Sect- 2 – Bucharest (Rumania) 

70% through D-Mail S.r.l. uni-personnel 11,102 

Dmailstore B.V. 

Energieweg, 2 

Waalwijk (Holland) 

60% through Dmail Group S.p.A. 100,000 

Lake View Impex S.r.l. uni-personnel 

Bd. Natiunile Unite Nr 4, Bl. 106 

Bucharest (Rumania) 


OTHER SHAREHOLDINGS SHARE CAPITAL 

A.P.V. S.r.l. 

Via Mazzini 69d – Sondrio 

10% through Gidiemme Stampa S.r.l. 10,329 

Publitorino S.r.l. 

Corso Galileo Ferraris, 134 

20% through DMedia Group S.p.A. Uni-personnel 

30 

LOCAL MEDIA 

D-Media Group S.p.A. Uni-personnel 



SHARE CAPITAL 

8,000,000 

GIORNALE DI MERATE S.r.l. 

Via Campi 29/L – Merate (LC) 

60% through DMedia Group S.p.A. unipersonnel 

15,600 

PROMOTION MERATE S.r.l. 



10,400 

EDITRICE VALTELLINESE S.r.l. 

Via Carlo Alberto, 11 - Monza 

40% through DMedia Group S.p.A. uni-p. 

30% through Promotion Merate S.r.l. 

30% through Editrice Lecchese S.r.l. 10,400 

PUBLISETTE S.r.l. Uni-personnel 

Via Castelli Fiorenza 34 - RHO (MI) 


12,000 

PROMOTION DIGITALE S.r.l. 

Via Aspromonte 52 – Lecco 



EDITRICE VIMERCATESE S.r.l. uni-personnel 

Via Cavour 59 - Vimercate (MI) 

100% through Promotion Merate S.r.l. 15,600 

EDITRICE LECCHESE S.r.l. 



98,800 

LOCAL MEDIA 

SHARE CAPITAL 

PROMOTION LECCO S.r.l. 



ANTARES EDITORIALE S.r.l. uni-personnel 

Via G.Paglia, n. 4 - Bergamo 


92,900 

D-Stand 10 Sas 

Via De Gasperi 135 – Merate (LC) 

99% through Antares Editoriale S.r.l. unipersonnel 

92,900 

Editrice the Martesana S.r.l. uni-personnel 

Via B. Luini, 3 – Milan (MI) 


10,200 

Publiest S.r.l. uni-personnel 



10,200 

Promotion Sondrio S.r.l. 



10,000

Controlled Companies 

The integral method is used for consolidating all controlled companies. 

This method foresees that assets and liabilities, charges and income of the consolidated companies 

should be integrally entered in the consolidated balance sheet; the accounting value of shareholdings is 

written off against the corresponding fraction of the net worth of the participated companies, attributing 

their current value at the control acquisition date to the elements of the shareholders assets and 

liabilities. 

The possible residual difference, if positive, is entered to the “Start up” assets item; if negative, it is 

booked to profit and loss account. 

The shares of net worth and profits pertaining to minority shareholders are entered to specific balance 

sheet items; the minority shareholders’ net worth share is defined on the basis of current values attributed 

to the assets and liabilities as at the control assumption date, excluding the eventual start up referring to 

these. 

Joint-control companies 

Joint-control companies are evaluated in the consolidated balance sheet with the proportional method, 

adding line by line the own share of each asset, liability, revenue and costs of the joint-control company, 

with the respective items of the consolidated balance sheet. 

Associated companies 

The net worth method is used for evaluating associated companies in the consolidated balance sheet, 

starting from the date in which the notable influence starts, until the time in which said notable influence 

ceases to exist. 

Should the eventual share, pertaining to the group, of the losses of the associated company exceed the 

accounting balance sheet value of the shareholding, one proceeds to write off the value of the 

shareholding and the share of the further losses is not accounted for, excepting for and to the extent in 

which the group is obliged to be accountable for it. 

Transactions done away with during the consolidation process 

In drawing up the consolidated balance sheet, the profits and losses not yet realised, deriving from 

operations between Group companies, are not accounted for, as well as the entries that originate debits 

and credits, costs and revenue among the companies included in the consolidation area. 

Non-realised profits and losses generated by operations with associated or joint-control companies are 

done away with according to the group’s shareholding value in the relevant companies. 

Dividends collected by consolidated companies are not accounted for. 

31

Criteria and exchange rates applied in the conversion of balance sheets 

Conversion into Euro of the balance sheets expressed in currencies differing from the accounting 

currency, is carried out as follows: 

• entries to profit and loss account are converted at the average exchange rates for the accounting 

year, whereas the balance sheet entries are converted according to the exchange rates at the end of the 

accounting year; the exchange rate differences deriving from the application of the different criterion for 

conversion of the income and property account nature entries into Euro are entered to the net worth 

reserve “Reserve for currency conversion”, until the cession of the shareholding; 

• the exchange rate conversion differences resulting from the comparison between the initial net worth 

converted at current exchange rates and the same converted at the rate pertaining to the preceding 

accounting year, are also entered to the “Reserve for currency conversion”. 

In preparing the consolidated financial statements, average exchange rates were used in converting the 

cash flows of the foreign controlled companies. 

The exchange rates applied in conversion operations are the following: 

December 31, 2005 

Average Exchange Rate Final Exchange Rate 

New lei – Rumania 3.620897 3.6802 

The companies that utilise the New Lei are: 

Dmail Direct S.r.l. - Str. Vasile Lascar, 126 - Sect- 2 – Bucharest (Rumania) 

Lake View Impex S.r.l. uni-personnel - Bd. Natiunile Unite Nr 4, Bl. 106 - Bucharest (Rumania) 

3 – VARIATION OF THE ACCOUNTING PRINCIPLES 

The accounting principles adopted in drawing up the present balance sheet are homogenous with those 

of the previous accounting year, excepting for new or reviewed principles adopted during 2005. In 

particular, it is noted that the group opted for the application of principle IAS 16 – par. 31 “model for 

the re-determination of value” and of principle IAS 40 – par. 33 “fair value model” as regards the 

buildings entered to balance sheet as of December 31, 2005. 

The effects of this application on the opening balances as of January 1, 2005 are the following: 

Gross revaluation of buildings 2,132 

Tax effect on the revaluation (Deferred taxation fund) 794 

Effect on profit and loss account (Revaluation IAS 40) 41 

Effect on consolidation reserves (Revaluation IAS 16) 1,296 

Effect on depreciation for 2005 accounting year 62 

Effect on taxation for 2005 accounting year 23 

32

4 – REPORT ON THE ACCOUNTING PRINCIPLES APPLIED 

INTANGIBLE ASSETS 

START UP 

In the case of acquisition of company control shares, the assets, liabilities, and the potential liabilities 

(including the respective equities pertaining to third parties) acquired and identifiable are accounted for 

at their current value (fair value) as at the date of acquisition. The positive difference between the 

purchasing cost and the group’s shareholding in the current value of these assets and liabilities is entered 

as start up and is classified as intangible asset. The eventual negative difference (“negative start up”) is 

instead entered to profit and loss account at the time of acquisition. 

In the case of acquisition of minority shareholding in companies already controlled, the difference 

between the cost of acquisition and the entry values of the acquired assets and liabilities is entered to 

item “start up” 

The start up is initially entered at cost and is subsequently reduced only for the cumulative losses of value. 

Annually, or more frequently should specific events or changed circumstance indicate the possibility of a 

drop in value having taken place, the start up is subjected to verification in order to identify possible 

reduction in value, in compliance with the provisions of IAS 36 (Reductions in the value of assets). 

At the time of the original adoption of the IFRS, the group opted against applying the IFRS 3 

(Aggregations of companies) in a retroactive way to the acquisition of companies that took place before 

January 1, 2004; as a consequence, the start up generated on acquisitions prior to the date of transition 

to the IFRS was maintained (without prejudice to eventual effects deriving from the application of the new 

principles) at the previous value defined according to the Italian accounting principles, by prior 

verification of its recoverability. 

OTHER INTANGIBLE ASSETS 

The other intangible assets acquired are entered to assets according to the provisions of IAS 38 

(Intangible assets), when it is probable that the utilisation of the asset will generate future economic 

benefits and when the asset’s cost can be reliably determined. 

These assets are entered at the purchasing cost and are depreciated in constant quotas along their useful 

estimated life, if these have a defined useful life. In particular, regarding patent rights, these are 

depreciated in 3 years, the headers included in category “granting of brand licences and similar rights” 

have been judged as having definite useful life and, therefore, to be depreciated over a period of 20 

years, whereas for what concerns the patent rights, these are depreciated over 5 years. 

33

OWNED BUILDINGS, PLANT AND MACHINERY 

Buildings whose fair value can be reliably determined are entered at the re-evaluated cost. The value re- 

definition is carried out as net of any subsequent depreciation and whatever subsequent loss of value, 

with a frequency sufficient to ensure that the accounting value does not relevantly differ from that which 

would have been determined by utilising the fair value at the balance reference date. The fair value is 

represented on the basis of ordinary market parameters, through a survey provided by professionally 

qualified individuals. 

The buildings held for investment are evaluated at fair value determined through the above-mentioned 

criteria. The eventual revaluation or devaluation is entered to profit and loss account net of the taxation 

effect. 

Owned plant and machinery are entered at purchase or production cost or, for those already in the 

books at the date of transition to the IFRS (January 1, 2004), at the presumed cost (deemed cost). The 

costs sustained subsequently to the purchase are capitalised only if they determine an increment of the 

future economic benefits in-built in the asset to which they refer. 

All other costs (including financial charges directly attributable to the acquisition, construction or 

production of the asset itself) are entered to profit and loss account when they are sustained. 

The assets’ initial cost also includes the costs envisaged for the dismantling of the asset and the site 

restoration. 

The corresponding liability is entered, at the time when generated, in a liability fund within the framework 

of the funds for future risks and charges, at market value (fair value); the entry to profit and loss account 

of the capitalised asset takes place throughout the useful life of the relative fixed assets through their 

depreciation process. 

The depreciation is calculated according to a criterion based on constant quotas on the estimated useful 

life of the asset, as follows: 

CATEGORY YEARS 

Buildings 33 

Generic plants 10 

Specific plants 10 – 5 

Electronic office machines 5 

Furniture and fittings 9 

Motor vehicles 5 

Computers 5 

Equipment 7 

Motor cars 4 

Cell telephones 5 

The land, including that pertaining to buildings, will not be depreciated. 

34

ASSETS UNDER FINANCE LEASING 

The assets owned under leasing contracts, through which all risks and benefits linked to the property are 

essentially transferred to the group, are acknowledged as group assets at their current value or, if lower, 

at the current value of the minimum payments due for the leasing, including the amount to be paid for 

the accounting period of the purchasing option. The corresponding liabilities towards the lessor is 

entered to balance sheet among the liabilities for short-term and medium/long-term finance leasing. 

ASSETS’ LOSS OF VALUE 

At least once a year, the group assesses the recoverability of the accounting value of owned intangible 

assets, buildings, equipment and machinery and of the Assets under financial leasing. Should there be an 

indication of loss of value it will be necessary to estimate the asset’s recoverable value in order to 

determine the entity of the possible loss. Intangible assets with an undefined useful life, including the Start 

up, are subjected to this assessment every year, or more frequently, whenever there is an indication of the 

asset’s having sustained a loss of value. 

When it is impossible to estimate the recoverable value of a single asset, the group assesses the 

recoverable value of the unit generating cash flows to which the asset belongs. 

The value recoverable from an asset is the greater between the fair value net of sale costs and its 

utilisation value. In order to determine the utilisation value of an asset, the current value of the future 

estimated financial flows is calculated, gross of taxes, by applying an actualisation rate, before-tax, which 

reflects the current market evaluation of the money’s timing value and of the specific risks of asset. A loss 

of value is entered if the value recoverable is lower than the accounting value. When, subsequently, a 

loss on an asset different from start up falls away or is reduced, the accounting value of the asset or of 

the unit generating the financial flows is increased up to the new estimate of the recoverable value, but it 

cannot exceed the value that would have been determined should no loss due to the reduction of value 

have been found. The reinstatement of loss of value is immediately entered to the profit and loss 

account. 

SHAREHOLDINGS 

The net worth method is used in evaluating the shareholdings in companies different from controlled or 

joint-control ones. 

EQUITIES DIFFERENT FROM SHAREHOLDINGS 

Equities different from shareholdings classified among current assets are included in the categories of 

shares held for negotiation and evaluated at fair value through the profit and loss account. 

35

Should the market price not be available, the fair value of financial instruments is determined through the 

most appropriate evaluation techniques such as, for example, the analysis of actualised cash flows, 

carried out through the information available as at the balance sheet date. 

CREDITS AND FINANCING 

The credits generated by the company and the financing included in both the non-current and current 

assets, are evaluated at the depreciated cost. 

The credits with expiry of more than one year, non-profit bearing or earning interests lower than market 

ones, are actualised by utilising market rates. 

CASH AND OTHER EQUIVALENT LIQUID RESOURCES 

Cash on hand and other equivalent liquid resources are entered, according to their nature, at the 

nominal value, that is at the depreciated cost. 

LOSS OF VALUE OF FINANCIAL ASSETS 

Valuations are regularly carried out in order to verify whether there is objective evidence that a financial 

asset or a group of assets could have suffered a reduction in value. Should there be objective evidence, 

the loss of value is entered as a cost in the profit and loss account for the period. 

FINANCIAL LIABILITIES 

The financial liabilities are represented by financial debts, by the liabilities for assets entered within the 

ambit of financial leasing contracts and by commercial debts. 

Financial liabilities are initially entered at market value ( fair value) increased by the costs of operation; 

subsequently they are evaluated at the depreciated cost, in other words the initial value, net of the 

refunds already carried out on capital line, adjusted (by increase or reduction) according to the 

depreciation (by utilising the effective interest method) of possible differences between the initial value 

and the expiry value. 

OWN SHARES 

Own shares are entered as a reduction of the net worth. The original cost of own shares and the 

economic effects deriving from subsequent eventual sales are accounted for as net worth movements. 

36

STOCK ON HAND 

The stock on hand of raw materials and finished products are evaluated at the lesser between the cost 

and the market value; the cost is determined by using the FIFO method. 

SECTOR INFORMATIVE REPORT 

The sector is a part of a specifically identifiable group which provides a set of homogeneous products 

and services (activity sector) or which provides products and services of a determined economic area 

(geographical sector). Within the Dmail group, at primary level, three activity areas were identified: i) 

media, ii) media commerce and a third residual area, iii) other. As the secondary level, partitioning by 

geographical area was adopted, regarding which the net revenues are shared according to the clients’ 

locations. 

BENEFITS TO EMPLOYEES 

The Severance Indemnity Allowance Fund (TFR), compulsory for Italian companies in compliance with 

law no. 297/1982, is considered a plan of defined benefits and, among others, is based on the working 

life of employees and on the remuneration received by the employee during the course of a pre- 

determined service period. 

The TFR is determined by independent actuaries, utilising the credit unitary method projection (projected 

unit credit method). 

The portion of the cumulative net value of profits and of the actuarial losses is not accounted for until 

such time as it has exceeded in absolute value 10% of the liability’s current value (“corridor method”). In 

the accounting year in which this threshold is exceeded, the actuarial profit (loss) is accounted for. 

The costs relative to the increase of the liability’s current value for the TFR, deriving from the nearing of 

the time of payment of the benefits, are included in the personnel Costs. 

FUNDS FOR FUTURE RISKS AND CHARGES 

The group raises the funds for future risks and charges when, in the presence of a legal or implicit 

obligation towards third parties, it becomes probable that the deployment of group resources to fulfil the 

obligation will become necessary, and when a reliable estimation of the amount for the obligation itself 

will become possible. 

The estimate variations are reflected in the profit and loss account of the period in which the variation 

takes place. 

37

OPERATIONS IN FOREIGN CURRENCY 

Operations in foreign currency are recorded at the exchange rate in force at the time of the transaction. 

Monetary assets and liabilities denominated in foreign currency are converted at the exchange rate in 

force at the balance sheet reference date. The exchange rate differences generated by the discharging of 

monetary entries or by their conversion at exchange rates different from those at which they were 

converted at the time of initial recording in the period or in previous balance sheets, are entered to the 

profit and loss account. 

RECOGNITION OF THE REVENUE AND CHARGES TO BE ENTERED TO PROFIT AND LOSS 

ACCOUNT 

Revenues and income, costs and charges are entered in the balance sheet according to the economic 

reference principle, excluding non-realised profits and taking into account the risks and losses accrued 

during the account period, even if they had subsequently become known. 

Revenues and income, costs and charges are entered to the balance sheet net of returns, discount, 

allowances and considerations, as well as of taxes directly connected with the sale of products and 

provision of services. 

Leasing contracts of a financial nature are entered to the consolidated balance sheet according to the 

financial method envisaged by the IAS 17 accounting principle. 

Revenues are picked up to the amount in which it is probable that the group will derive economic 

benefits and their amount can be reliably determined; they are recorded net of discounts, allowances 

and returns. 

TAXATION 

Income tax includes all taxes calculated on the taxable income of the Group’s companies. 

Income taxes are entered to the profit and loss account, excepting for those relative to items directly 

debited or credited to a net worth reserve, in which case the taxation effect is applied directly to the net 

worth reserve. Provisions for taxes that could be generated by the transfer of non-distributed profits 

pertaining to the controlled companies are carried out only when the transferring of such profits would be 

the real intention. Other taxes not related to income, such as fixed property taxes and capital taxes, are 

included in the operative costs. 

Deferred/advance taxes are allocated according to the liability global allocation method (balance sheet 

liability method). They are calculated on all the timing differences between the fiscal values of assets and 

liabilities and the relative accounting values in the consolidated balance sheet, excepting for not fiscally 

deductible start ups and for differences deriving from investments in controlled companies for which 

38

writing off is not envisaged in the foreseeable future. Credit deferred taxes on fiscal losses and the 

relative non-utilised taxation credits to be carried forward, are accounted for to the extent in which the 

availability of future taxable income would be probable, on account of which these could be recovered. 

Current and deferred fiscal assets and liabilities are offset when income taxes are applied by the same 

fiscal authority and when there is a legal right to the settlement. Deferred fiscal assets and liabilities are 

determined by adopting the taxation rates foreseen as being applicable in the accounting years during 

which the temporary differences would be cancelled out. 

DIVIDENDS 

Dividends payable to third parties are accounted for as net worth movements in the accounting year in 

which they are approved by the shareholders meeting. 

PROFIT PER SHARE 

The base profit per ordinary share is calculated by dividing the group’s economic result quota 

attributable to ordinary shares by the weighted average of the ordinary shares in circulation during the 

relevant period, excluding own shares. 

RISKS, UNDERTAKINGS AND GUARANTEES 

Undertakings and guarantees are indicated in the suspense accounts at their contractual value. 

The risks, for which the manifestation of a liability is probable, are described in the explanatory notes and 

a relevant provisions is made in a specific fund according to congruity criteria. Risks for which the 

manifestation of a liability is only possible, are described in the explanatory note, without proceeding to 

the allocation of risk funds. Remote nature risks are not taken into account. 

UTILISATION OF ESTIMATES 

The drawing up of the consolidated balance sheet and of the relative notes in application of the IFRS, 

requires the Management to provide estimates and hypotheses that have an effect on the values of 

balance sheet assets and liabilities and on the informative report relative to potential assets and liabilities 

as at the balance sheet date. The results that will be actualised could differ from said estimates. The 

estimates are utilised to account for the provisions for risks on credits, for obsolescence and slow-moving 

stocks, depreciation, asset devaluation, employee benefits and taxation, as well as other provisions and 

funds. Estimates and assumptions are reviewed periodically and the effects of every variation are 

immediately reflected on the profit and loss account. 

39

RISKS MANAGEMENT 

In carrying out its activities, Dmail group is exposed to some financial risks, such as: exchange rate risks, 

price risks and credit/counterpart risks. 

As regards the exchange rates/price risk relative to purchases from foreign countries, the trend of the 

exchange ratio Euro/Dollar hasn’t called for the activation of particular coverage instruments. 

Relatively to the credit risks, there are no significant credit risk concentrations as regards the media 

commerce segment, while for what concerns the media sector, the risk is managed through an adequate 

procedure for the evaluation of debtors and the recovery of credits. 

40

5 – COMPANY AGGREGATIONS (ACQUISITIONS) 

Editrice La Martesana S.r.l. – Publiest S.r.l. 


100% of the share capital of company Editrice the Martesana S.r.l. and Publiest S.r.l.. The acquisition 

operation was then finalised on June 21, 2005. In applying the IAS/IFRS accounting principles, the 

property data of the two companies have been included in the consolidation area starting from January 

2005, while the economic data are entered at the acquisition date. 

The fair value as at the date of the exchange of the assets ceded and of the liabilities assumed is the 

following: 

Non current assets 

EDITRICE LA MARTESANA S.r.l. Fair value Book value 

Intangible assets (Newspaper) 386 

Fixed assets 75 75 

Other fixed assets 1 1 

Total non-current assets 462 76 


Stock on hand 4 4 

Client credits 176 176 

Other current assets 13 13 

Cash on hand and at banks 121 121 

Total current assets 314 314 

Total current and non current assets 776 390 

Net worth 425 39 


Non-current financial debts 

Funds for personnel 115 115 

Other funds 

Total non-current liabilities 115 115 


Current financial debts 

Suppliers debts 137 137 

Other current liabilities 99 99 

Total current liabilities 236 236 

Total current liabilities and net worth 776 390 

The cost of acquisition was 425,000 Euro. Furthermore, a current debt entry of 84,000 Euro and a non- 

current of 165,000 Euro, was made towards the seller. 

The financial disbursement in 2005 for the acquisition of shares was therefore 176,000 Euro, which 

impacted directly on the Group’s liquidity. 

41

The above-mentioned patrimonial items were therefore written off by the relative variations of the 

financial statement and presented in item “Acquisition of companies or controlled companies 

shareholdings” for the paid consideration. 

Should the acquisition have been consolidated at the start of the year, on the basis of the results of the 

acquired company, the group revenue would have been further increased by 542,000 Euro, whereas at 

the net result level the contribution would be 1.5 Euro/000. 


PUBLIEST S.r.l. Fair value Book value 

Intangible assets (start up) 533 


Other fixed assets 3 3 



Stock on hand 

Client credits 311 311 


Cash on hand and at banks 58 58 


Total current and non-current assets 1,244 516 

Net worth 793 138 

Non current liabilities 


Funds for personnel 66 66 

Other funds 75 2 

Total non-current liabilities 141 68 



Supplier debts 209 209 



Total current liabilities and net worth 1,244 516 

The cost of acquisition was 793,000 Euro. Furthermore, a current debt entry of 165,000 Euro and a 

non-current of 306,000 Euro, was made towards the seller. 

The financial disbursement for the acquisition of shares was therefore 322,000 Euro, which impacted 

directly on the Group’s liquidity. 

The above-mentioned patrimonial items were therefore written off by the relative variations of the 

financial statement and presented in item “Acquisition of companies or controlled companies 

shareholdings” for the paid consideration. 

Should the acquisition have been consolidated at the start of the year, on the basis of the results of the 

acquired company, the group revenue would have been further increased by 242,000 Euro, 

42

net of the inter-group entry with company Editrice La Martesana S.r.l., whereas at the net result level the 

contribution would have been 74,000 Euro. 

Lake View Impex S.r.l 

On December 20, 2005, Dmail Group S.p.A. acquired 100% of the share capital of company Lake View 

Impex S.r.l. - Rumania. 

The fair value at the date of exchange of the ceded assets and of the liabilities assumed are the 

following: 



LAKE VIEW IMPEX S.r.l. Fair value Book value 


Other fixed assets 



Stock on hand 

Client credits 


Cash on hand and at banks 


Total current and non-current assets 495 45 

Net worth 402 (3) 



Funds for personnel 

Other funds 45 

Total non-current liabilities 45 



Supplier debts 



Total liabilities and net worth 495 45 

The cost of acquisition was 402,000 Euro and it was settled through the utilisation of the group’s 

financial resources. 

The above-mentioned patrimonial items were therefore written off by the relative variations of the financial 

statement and presented in item “Acquisition of companies or controlled companies shareholdings” for 

the paid consideration. Should the acquisition have been consolidated at the start of the year, on the 

basis of the results attained by the acquired company, the group’s revenue and the net result would have 

been substantially unchanged. 

43

6 – OTHER SECTOR INFORMATIVE REPORT 

According to the provisions of the IAS 14 on the matter of sector informative report, the following 

statement lists the relevant information concerning the different activity sectors: 

Dmail Italia 

31/12/2005 

Dmail Foreign 

31/12/2005 

44 

CAT 

31/12/2005 

MEDIA 

31/12/2005 

Other 

31/12/2005 

Consolidation 

Revenue 18,136 3,301 10,589 15,960 (1,555) 46,431 

Other revenues 1,494 252 215 986 102 3,049 

Total revenue and other operating income 19,630 3,553 10,804 16,946 (1,453) 49,480 

Costs for purchases (7,611) (1,341) (5,346) (1,877) 1,299 (14,876) 

Gross margin 12,019 2,212 5,458 14915 34,604 

Costs for services (7,618) (1,523) (2,157) (10,071) (991) (22,360) 

Personnel costs (1,589) (473) (978) (2,450) (86) (5,576) 

Other operating costs (676) (211) (38) (587) (217) (1,729) 

Gross operating margin 2,136 5 2,285 1,961 (1,448) 4,939 

Depreciation and devaluation (289) (64) (524) (755) (81) (1,713) 

Net operating result 1,847 (59) 1,761 1,206 (1,529) 3,226 

Net financial income (charges) (212) (24) (126) (347) 108 (601) 

Before-tax result 1,635 (83) 1,635 859 (1,421) 2,625 

Income tax (898) 9 (673) (442) 640 (1,364) 

Result for the accounting year 737 (74) 962 417 (781) 1,261 


Profit for the accounting period 737 (74) 962 417 (781) 1,261 

Sector assets 

Sector liabilities 

Investments 

9,555 

5,133 

76 

Dmail Italia 

31/12/2004 

1,067 

1,026 

21 

Dmail Foreign 

31/12/2004 

12,266 

4,363 

50 

CAT 

31/12/2004 

22,041 

2,440 

MEDIA 

31/12/2004 

12,112 

14,653 ( 815) 

602 

Other 

31/12/2004 

57,042 

24,360 

3,188 

Consolidated 

31/12/2004 

Revenue 16,062 3,128 11,606 13,313 (1,373) 42,736 

Other revenues 1,509 201 275 405 52 2,443 

Total revenue and other operating income 17,571 3,329 11,881 13,718 (1,321) 45,179 

Costs for purchases (7,162) (1,251) (5,762) (1,412) 1,352 (14,235) 

Gross margin 10,409 2,078 6,118 12,307 31 30,944 

Costs for services (6,752) (1,214) (2,364) (7,935) (574) (18,839) 

Personnel costs (1,430) (438) (935) (2,547) (139) (5,488) 

Other operative costs (825) (334) (53) (770) (549) (2,531) 

Gross operating margin 1,402 92 2,767 1,055 (1,231) 4,085 

Depreciation and devaluation (297) (67) (635) (617) (1,615) 

Net operating result 1,105 25 2,132 439 (1,231) 2,470 

Net financial income (charges) (98) (44) (80) (267) 100 (390) 

Before-tax result 1,007 (19) 2,051 171 (1,130) 2,080 

Income tax 1,020 (1) (807) (197) 2,208 2,223 

Result for the accounting year 2,027 (20) 1,244 (26) 1,078 4,303 

Net result of assets destined for divestment 73 73 

Profit for the accounting period 2,027 (20) 1,244 (26) 1,151 4,376 

Sector assets 9,007 1,017 9,976 

Sector liabilities 5,624 1,020 6,540 

21,886 

8.694 

15,388 (4,141) 

Investments 148 68 65 122 -30 373 

50,581 

24,430

The inter-sector revenues as of December 31, 2005, are the following: 

Dmail Italia towards Dmail foreign 1,213,000 Euro 

Dmail foreign towards Dmail Italia 30,000 Euro 

Cat towards Other 83,000 Euro 

Dmail Italia towards CAT 4,000 Euro 

Media towards Dmail Italia 91,000 Euro 

Other towards Dmail Italia 17,000 Euro 

Media towards Other 133,000 Euro 

7 – START UP AND OTHER INDEFINITE-LIFE INTANGIBLE ASSETS 

The total for the start up entered to balance sheet has increased as compared with December 31, 2004, 

from 14,581,000 Euro to 15,114,000 Euro. 

The increment of 533,000 Euro is due to the acquisition of the shareholding in company Publiest S.r.l.. 

For the effect of the merger that took place in November 2005, coming into force as at 01/01/2005, 

the start up entered in company Gidiemme Stampa S.r.l. was received by company DMedia Group 

S.p.A.. 

The start up, allocated to the CGU group according to IAS 36, presents the following sharing and 

variations as compared with December 31, 2004: 

AMOUNTS IN EURO/000 

NET START UP 

31/12/2004 

45 

INCREASES DECREASES 

NET START UP 

30/06/2005 

D-MAIL S.r.l. 1,633 1,633 

CAT Import Export S.p.A. 2,146 2,146 

DMEDIA GROUP S.p.A. 10,802 533 11,335 

Total start ups 14,581 533 15,114 

No de-valuations were detected to be entered to profit and loss account among the components of the 

operative result. 

The item in question doesn’t include the start ups relative to the assets ceased/destined to be ceded, nor 

are the start ups to be included among the assets ceased/destined to be ceded. 

8 – IMPAIRMENT 

Group Dmail carries out the recoverability verification (impairment test) of the start up value once a year, 

and more frequently should there be loss of value indications. 

For the purposes of evaluation of the impairment test, the goodwill values were allocated to the 

respective units (or groups of units) generating financial flows (“cash generating unit”) as at the date of 

the reference balance sheet.

The main hypotheses utilised in determining the value in use of the cash generating unit, or the current 

value of the estimated future financial flows that it is supposed will be derived from a continued use of 

the asset, are relative to the discount rate and the growth rate. 

In particular, the group utilised discount rates that are deemed as correctly reflecting the market 

evaluations, at the reference date of the estimate, of the current value of money and the specific risks 

connected with the single cash generating units; these rates are ranging between 7.22% and 8.65%. 

The operative cash flow forecasts derive from those inherent to the most recent budgets and plans pre-set 

by the group for the next five years, extrapolated on a twenty-year basis according to the medium/long 

term growth rate and according to the different characteristics of the activities and in any case not 

exceeding the average long term growth rate for the market in which the Group operates. 

The utilisation of a twenty-year period is justified by the products life cycle related to the reference 

market. 

The cash flow forecasts that refer to the current conditions in which the activities are carried out, therefore 

don’t include financial flows connected with possible interventions of an extraordinary nature. 

The make up of the future financial flows estimates was determined according to the conservative criteria 

that consider as constant, in terms of volumes, the sales subsequent to the analytical forecast horizon. 

Furthermore, the forecasts are based on reasonable and coherent criteria as regards the attribution of 

future general expenses, on the trend of expected capital investments, to the financial balance 

conditions, as well as the macro-economic hypotheses, with particular reference to product price 

increases, which take into account the expected inflation rates. 

All impairment tests have led to evaluations that haven’t made it necessary, in the current and in the 

preceding accounting year, to account for permanent losses of value. 

46

9 – DEFINITE-LIFE INTANGIBLE ASSETS 

As compared with December 31, 2004, the definite-life intangible assets increase from 1,702,000 Euro 

to 2,277,000 Euro and present the following make up and variation: 

MOVEMENTS FOR THE ACCOUNTING YEAR +/- 

47 

PATENT 

RIGHTS 

GRANTING OF 

LICENCES, 

BRANDS 

OTHER TOTAL 

Historical cost as of 01/01/2005 + 1,925 1,694 1,041 4,659 

Cumulative depreciation as of 01/01/2005 - (1,341) (727) (888) (2,956) 

Net Accounting Value as of 01/01/2005 584 966 153 1,702 

Increases + 174 698 196 1,068 

Cessions/decreases +/- (10) (15) (25) 

Depreciation - (162) (92) (206) (459) 

Other movements +/- 37 18 (65) (10) 

Net accounting value as of 31/12/2005 623 1,591 63 2,277 

Make up of the accounting balance as of 31/12/2005 

Historical cost as of 31/12/2005 + 2,126 2,410 1,138 5,674 

Cumulative depreciation as of 31/12/2005 - (1,503) (819) (1,075) (3,397) 

Net accounting value as of 31/12/2005 623 1,591 63 2,277 

The industrial patent rights and the original works utilisation rights essentially consist of the application 

software acquired as property and under open-ended timing user licence. 

The increases relative to the granting of licences and brands mainly refer to the shareholding acquisition 

of La Martesana S.r.l. and the relative allocation of the header consolidation difference for 386,000 

Euro. Furthermore, among the other increases one must highlight 240,00 Euro relative to the acquisition 

of the newspaper “Milano Metropoli” by company Antares S.r.l..

10 – FIXED ASSETS (OWNED AND UNDER FINANCIAL LEASING) 

BUILDINGS, PLANT AND MACHINERY 

As related to December 31, 2004, these increase from 6,921,000 Euro to 11,389,000 Euro and 

present the following make up: 

MOVEMENTS FOR THE ACCOUNTING YEAR 

LAND AND 

BUILDINGS 

48 

PLANT AND 

MACHINERY 

INDUSTRIAL 

AND 

COMMERCIAL 

EQUIPMENT 

OTHER 

ASSETS 

Historical cost 6,244 909 726 2,425 10,304 

Re-valuation in compliance with the law 184 184 

Capital value as of 01/01/2005 6,428 909 726 2,425 10,488 

Purchases + 1,439 77 59 545 2,120 

Decreases - (2) (40) (42) 

Re-valuations + 2,066 2,066 

Variation of the consolidation area 

+/ 

837 95 (1) 134 1,064 

Other movements 

- 113 (26) 118 205 

Capital value as of 31/12/2005 10,882 1,053 784 3,183 15,901 

Balance of depreciation fund as of 01/01/2005 + 804 587 360 1,817 3,567 

Share for the accounting year + 248 89 99 302 738 

Decreases - 

+/ 

(39) (39) 

Other movements 

- 

+/ 

3 (9) (45) (51) 

Variations in the consolidation area 

- 127 86 (1) 84 296 

Depreciation fund as of 31/12/2005 1,182 753 458 2,119 4,511 

Net accounting value as of 31/12/2005 9,700 300 326 1,064 11,390 

Net accounting value as of 01/01/2005 5,624 323 367 608 6,921 

Historical cost + 8,632 1,053 784 3,183 13,652 

Re-valuation in compliance with the law + 184 184 

Economic revaluation + 2,066 2,066 

Total capital value 10,882 1,053 784 3,183 15,901 

Less Depreciation Fund (economic-technical) - (1,182) (753) (458) (2,119) (4,511) 

Net accounting value as of 31/12/2005 9,700 300 326 1,064 11,389 

The mortgage guarantees on owned real estate amount to an overall 2,066,000 Euro. 

During the course of 2005 no de-valuations were applied for losses of value. 

The re-valuations for the period refer to the evaluation at fair value of the building owned, or for which a 

financial leasing is in progress. The re-valuations applied are the following: 

IDENTIFICATION OF FIXED PROPERTY AMOUNT 

Dmedia group Spa (ex Gidiemme Stampa S.r.l.) – Rho (MI) Via C. Fiorenza, 34 36 

Promotion Merate - Merate le Piazze 285 

Promotion Merate – Merate la Taverna 175 

Editrice Lecchese – Lecco Via Aspromonte 52 393 

Dmail S.r.l. – Le sieci (FI) Via Aretina 25 326 

CAT S.p.A. – Comporto (Mo) Via A.Moro, 41 851 

Total 2,066 

TOTAL

The fixed assets include the following assets in financial leasing accounted for according to the 

provisions of IAS 17: 

ASSETS COMPANY AMOUNT REVALUATIONS 

49 

DEPREC. 

FUND 

AS OF 

31/12/200 

5 

NET 

AMOUNT 

AS OF 

31/12/200 

5 

CURRENT 

RESIDUAL 

DEBT 

NON 

CURRENT 

RESIDUAL 

DEBT 

Other assets Promotion Digitale S.r.l. 231 70 161 57 75 

Other assets Promotion Merate S.r.l. 24 12 12 4 8 



Buildings Editrice Lecchese S.r.l. 697 393 94 996 77 228 

Buildings CAT IE S.p.A. 3,147 851 330 3,668 237 975 

Other assets Dmail Group S.p.A. 114 18 96 20 58 

Buildings Dmail S.r.l. 1,121 324 185 1,260 119 319 

Furniture and fittings Dmail S.r.l. 373 211 162 17 0 

Other assets Dmail S.r.l. 19 8 11 

Other assets La Martesana S.r.l. 19 4 15 6 7 

Other assets Giornale di Merate S.r.l. 13 2 11 4 7 

Buildings Editrice Vimercatese S.r.l. 1,426 21 1,405 111 928 

Other assets Editrice Vimercatese S.r.l. 46 5 41 17 19 

Other assets Editrice Lecchese S.r.l. 10 1 9 3 6 

Other assets DMedia Group S.p.A. 15 2 13 5 7 

Total 7,337 1,568 977 7,928 691 2,651 

The land and buildings category includes 1,034,000 Euro relative to the separation of the value of areas 

pertaining to buildings, inclusive of 229,000 Euro of re-valuations of same at fair value. 

REAL ESTATE INVESTMENTS 

REAL ESTATE INVESTMENTS 

Historical cost 471 

Capital value as of 01/01/2005 471 

Re-valuations + 66 

Capital value as of 31/12/2005 537 

Depreciation fund – Balance as of 01/01/2005 + 133 

Depreciation fund as of 31/12/2005 133 

Net accounting value as of 31/12/2005 404 

Net accounting value as of 01/01/2005 339 

Historical cost + 471 

Economic re-valuation + 66 

Total Capital Value 537 

less Depreciation Fund (economic-technical) - (133) 

Net accounting value as of 31/12/2005 405

11 – SHAREHOLDINGS 

The variations recorded as related to the previous accounting year are summarised a follows: 

SHAREHOLDING AMOUNTS IN EURO/000 

Shareholdings in associated companies 

31/12/200 

4 

Publitorino S.r.l. 20 

Total shareholdings in associated companies 20 

Shareholdings in other companies 

Brown Editore S.p.A. (formerly Spystocks S.p.A.) 79 79 

Banca pop. Monza and Brianza scarl 4 

RMedia 1 

Total shareholdings in other companies 83 1 79 

50 

INCR. DECR. RE-CLASS. REV./ DE-VAL. 31/12/200 

5 

The cession of the shareholdings held by Brown Editore S.p.A. has generated a loss amounting to 

29,000 Euro. 

The summary financial information available on the shareholding of the associated Publitorino srl 

referred to 31/12/2004 are the following: 

Assets 981 

Non-current assets 15 

Current liabilities (951) 

Non-current liabilities (11) 

Net assets 34 

Revenue 1,180 

Profit 9 

12 – EQUITIES AND FINANCIAL CREDITS 

As related to December 31, 2004, the financial credits increase from 40,000 Euro to 65,000 Euro and 

are essentially made up by interest-bearing guarantee deposits on passive hiring. 

13 – SUNDRY CREDITS AND OTHER NON-CURRENT ASSETS 

These are substantially unchanged as referred to December 31, 2004, and are relative to credits for 

income taxes claimed in refund. 

20 

20 

4 

1 

5

14 – ASSETS FOR ADVANCE TAXATION 

24 – DEFERRED TAXATION FUND 

TAXABLE 

2004 

FISCAL EFFECT 

51 

TAXABLE 

2005 

FISCAL EFFECT 

FISCAL EFFECT 

VARIATION 

Advance taxes on temporary differences 

Provisions 592 213 801 283 70 

Depreciation 185 71 332 125 54 

De-valuations of shareholdings 3,618 1,194 2,558 846 (348) 

Profits in-built in stock on hand 139 55 41 15 (40) 

Other costs 987 371 562 211 (161) 

Total 5,521 1,904 4,295 1,480 (424) 

Advance taxation on fiscal losses 6,443 2,125 7,519 2,481 356 

Total advance taxation 11,964 4,029 11,814 3,962 (68) 

Variations from fiscal national consolidation (404) 

Total credits for advance taxation 

Deferred taxation 

4,029 3,558 

On leasing (1,509) (552) (2,312) (835) (283) 

Other (16) (6) (6) 

Total deferred taxation (1,509) (552) (2,328) (841) (289) 

Other variations 6 (915) 

Total debts for deferred taxation (546) (1,756) 

Total adv./def. Taxation to Profit and loss account (357) 

Advanced and deferred taxes are put to reserve upon the temporary differences between assets and 

liabilities accepted for taxation purposes and those entered to balance sheet. The credit deferred taxes on 

fiscal losses are attributed to the extent at which there would be a reasonable certainty for earning a 

future taxable income able to re-absorb their effect. 

The variations from fiscal consolidation amounting to 404,000 Euro relative to advance taxation for year 

2005, refer to the utilisation and the provision for advance taxation credits against the debit for current 

taxes pertaining to CAT Import-Export S.p.A. and of the credit for advance taxation of D-Store S.r.l. due 

to the effect of the group’s fiscal consolidation. The other variations relative to deferred taxes instead, 

refer to the fiscal effect attributed to the re-valuations applied to the fair value of buildings and to the 

allocation of the consolidation difference on the building that is property of Publiest S.r.l. and of Lake 

View Impex S.r.l..

15 – STOCK ON HAND 

DESCRIPTION 

52 

SUBSIDIARY AND 

CONSUMPTION 

RAW MATERIALS 

FINISHED 

PRODUCTS AND 

GOODS 

Stock on hand as of 01/01/2005 + 302 4,867 5,169 

Depreciation fund as of 01/01/2005 - (55) (55) 

Balance as of 01/01/2005 (A) + 302 4,812 5,114 

Stock on hand as of 31/12/2005 + 287 4,920 5,207 

Depreciation fund as of 31/12/2005 - (42) (42) 

Balance as of 31/12/2005 (B) 287 4,878 5,165 

Variation (B-A) (15) 66 51 

As compared with December 31, 2004, this item increases from 5,114,000 Euro to 5,165,000 Euro 

essentially for the greater stock on hand connected with greater sales. 

16 – COMMERCIAL CREDITS, SUNDRY AND OTHER CURRENT ASSETS 

TOTAL 

CREDITS 31/12/2005 31/12/2004 DIFF. 

Towards clients 13,149 12,178 971 

Fiscal credits 1,076 1,178 (102) 

Credit accruals and unearned income 614 614 

Towards shareholders 3 3 

Towards others 542 812 (270) 

Gross total credits 

Credits devaluation fund 

A 15,384 14,783 601 

Balance 1/1 535 516 19 

Provision for the accounting year + 263 236 27 

Utilisation for the accounting year - (264) (196) (68) 

Re-classifications +/- 

Variation of the consolidation area +/- 1 (21) 20 

Other movements +/- 

Balance of Credits Devaluation Fund B 537 535 (2) 

Balance of Net Credits as of 31/12/2005 A-B 14,847 14,248 599 

Detail of credits towards Inland Revenue 31/12/2005 31/12/2004 DIFF. 

Inland Revenue c/accounts income tax 672 636 36 

Inland Revenue c/refund taxes 226 (226) 

Inland Revenue c/sundry taxes 2 12 (10) 

Inland Revenue c/sundry credits 5 3 2 

Taxation credits 25 25 

Credits towards Inland Revenue for VAT 372 301 71 

Total 1,076 1,178 (102)

The balance of the credits increases from 14,248,000 Euro on December 31, 2004, to 14,847,000 

Euro as at December 31, 2005. The increase of 599,000 Euro is to be basically attributed to the greater 

volume of revenues earned during the period. 

17 – EQUITIES DIFFERING FROM SHAREHOLDINGS 

At the date of closure of accounting year 2005 there are no equities other than shareholdings. 

During the course of the second semester of 2005 it was decided to proceed with the sale of all share 

quotas held in the investment fund Nextra Tesoreria and of the CTZ 28/4/2006, which were present in 

the 2005 half-yearly report. 

18 – FINANCIAL CREDITS AND OTHER CURRENT FINANCIAL ASSETS 

These move from 487,000 Euro on December 31, 2004 to 1,000 Euro as at December 31, 2005. 

53 

31/12/2005 31/12/2004 DIFF. 

Financial credits and other current financial assets 1 487 (486) 

The financial credits towards others as at December 31, 2004 included financing to the formerly 

controlled D-Media S.p.A., ceded in February 2004, for an amount of 460,000 Euro, which was 

subsequently repaid. 

19 – CASH AND OTHER EQUIVALENT RESOURCES 

DESCRIPTION 31/12/2005 31/12/2004 

Banking and postal deposits 4,048 2,808 

Cheques 31 18 

Money and cash items 55 15 

Total 4,134 2,841 

The increase in liquid assets during the period December 1, 2004 – December 31 2005 is substantially 

to be attributed to the cash flows generated by the characteristic activity, with reference to the growing 

income volumes generated during the course of 2005.

20 – CEASED ASSETS DESTINED TO BE CEDED 

These are made up by the following non-tied up shareholdings: 

Shareholdings in other companies 

SHAREHOLDINGS 31/12/2004 INCR./DECR. 31/12/2005 

Galassia S.r.l. 100 (100) 

APV S.r.l. 46 46 

Email.it S.r.l. 40 (40) 

Total 186 (140) 46 

The disposal of the shareholding held in company Email.it S.r.l. generated a net surplus of 10,000 Euro, 

whereas that relative to the disposal of Galassia S.r.l. has made it possible to recover the value entered 

as of December 31, 2004. 

21 – NET WORTH 

It is made up as follows: 

NET WORTH 31/12/2005 31/12/2004 VARIATION 

Quota share pertaining to Parent company 31,641 25,532 6,109 

Quota share pertaining to Third Parties 1,041 618 423 

TOTAL NET WORTH 32,682 26,150 6,532 

The movements of the single net worth is expressed by the following table: 

SHARE 

CAPITAL 

RESERVE 

FROM 

ADDIT. 

PRICE 

LEGAL 

RESERVE 

EXTRAO 

RD. 

RESERVE 

REVALUATI 

ON 

RESERVE 

RESERVE 

OWN 

SHARES 

54 

CURR. 

CONVE 

RSION 

RESERVE 

IAS 

RESERV 

E 

PROFITS 

(LOSSES) 

CUMULATIVEI 

RESULT 

FOR PERIOD 

GROUP’S 

NET 

WORTH 

3 rd PARTY 

NET 

WORTH 

TOTAL FOR 

GROUP 

& 3 rd 

PARTIES 

As of 01/01/2004 12,900 20,132 149 (7,609) (4,369) 21,203 (30) 21,173 

Result movement (4,369) 4,369 

Coverage of losses (5,554) 5,554 

Other movements 628 628 

Profit (loss) for the period 4,316 4,316 60 4,376 

Other movements 13 13 (40) (27) 

Total as of 31/12/2004 12,900 14,578 149 (6,411) 4,316 25,532 618 26,150 

Result movement 53 248 4,015 (4,316) 

Share capital increases 2,400 3,231 5,631 5,631 

Acquisition of own shares (864) 864 

Allocation of own shares (864) (864) (864) 

Other movements (3,007) 3,007 2 (186) (184) 157 (27) 

Distribution of dividends 

1,08 

(765) (765) (765) 

Re-valuation of buildings 

2 1,082 214 1,296 

Profit (loss) for the period 

1,08 

1,209 1,209 52 1,261 

Total as of 31/12/2005 15,300 13,938 3,060 248 149 2 2 (3,347) 1,209 31,641 1,041 32,682 

The main variations recorded as compared with December 31, 2004 can be outlined as follows:

- completion of allotment operation of 43% of the Gidiemme Stampa group through the issue of. 

1,200,000 ordinary shares of 2.00 Euro nominal value, with a unit surcharge of 2.6923 Euro, which 

generated an overall increase in the share capital of 2,400,000 Euro, as well as an increase of the 

reserve from the surcharge of 3,230,760 Euro. The net worth increase correlated to the shareholding 

acquisition, has generated the entry of a start up of 5,561,000 Euro as at December 31, 2004 against 

an acquired share of the accounting net worth of group Gidiemme Stampa, amounting to 70,000 Euro. 

- on May 4, 2005 the shareholders meeting passed a resolution to increase, thus reaching the legal 

minimum provided for by art. 2430 of the civil code, the legal reserve of 3,007,000 Euro, drawing from 

the shares surcharge reserve; 

- in the second semester of 2005, the company proceeded with the acquisition of 94,750 own shares 

for a total amount of 863,000 Euro, with direct entry in reduction of the pre-established reserve for own 

shares in the parent company’s balance sheet. 

- the re-valuation carried out on the owned buildings and under financial leasing entered according to 

IAS 17, implied a revaluation reserve increase of 1,082,000 Euro for the group and 214,000 Euro for 

Third Parties, net of the relative fiscal effect on the gross re-valuation entered as an increase of the 

selfsame assets and of the share attributed to profit and loss account for 66,000 Euro relative to a non- 

instrumental building, as provided for by IAS 40. 

- during the course of the year, the dividend distribution to shareholders took place for a total amount of 

765,000 Euro. 

22 – NON-CURRENT FINANCIAL LIABILITIES 

These decrease by 134,000 Euro, going from 472,000 Euro as of December 31, 2004, down to 

340,000 Euro as of December 31, 2005, and they are made up by the residual capital line instalments 

over 12 months, of the opened financing and covered by mortgage guarantee on buildings for an 

overall amount of 2,066,000 Euro. 

Details are the following: 

Description 

Original 

amount 

Rate 

Current 

residual 

debt 

Residual 

debt 

from 1 

to 5 

years 

Residual 

debt 

over 5 

years 

Total non 

current 

residual 

debt 

Total 

residual debt 

31/12/200 

5 

Current 

residual debt 

31/12/200 

4 

Non- current 

residual debt 

31/12/200 

4 

Total 

residual debt 

31/12/200 

4 

Mortgage Banca Popolare di 

4.35 

Milano 774 ind. 115 248 248 362 110 362 472 

Mortgage loan Banca Intesa 

5.15 

Via de Gasperi 207 ind. 17 92 92 109 15 110 125 

Totals 981 132 340 340 472 125 472 597 

55

23 – EMPLOYEES BENEFITS 

The Severance Indemnity (TFR) benefit has recorded the following movements: 

DESCRIPTION YEAR 2004 YEAR 2005 

Balance as of 01/01/2005 + 1,200 1,312 

Provisions + 291 274 

Utilisation and other movements - (312) (351) 

Profits/actuarial losses +/- - (10) 

Variation of consolidation area +/- 181 189 

Balance as of 31/12/2005 1,312 1,414 

The variation of the consolidation area is relative to the admission of companies La Martesana S.r.l. and 

Publiest S.r.l. in the consolidation area. 

The severance indemnity fund (TFR) falls within the defined benefit plans. For determining the liability, the 

methodology called Projected Unit Credit Cost was utilised, articulated according to the following 

phases: 

- on the basis of a series of financial hypotheses (increase in the cost of living, retribution increments 

etc.), the possible future benefits that could be provided to the employee registered in the programme in 

the case of retirement, death, disability, resignation, etc. were projected. The estimate of future services 

will include the eventual increments corresponding to the further service seniority accrued as well as the 

presumable increase of the level of retribution earned at the date of evaluation; 

- the current average value of future benefits was calculated as at the date of evaluation on the basis of 

the yearly interest rate adopted and on the probability that each of the benefit services will have actually 

been provided; 

- the liability for the company was defined by identifying the quota of the current average value of the 

future benefits that refers to the benefit already accrued to the employee at the evaluation date; 

- on the basis of the liability defined at the previous point and of the reserve with relevant provision made 

in the balance sheet for Italian civil law purposes, the reserve recognised as valid for the IAS purposes 

has been identified. 

The hypotheses adopted for the determination of the plan are summarised in the following table: 

FINANCIAL HYPOTHESES YEAR 2004 YEAR 2005 

Actualisation yearly rate 4% 4% 

Rotation yearly rate 3% 3% 

Inflation rate 2% 2% 

Advance rate 2% 2% 

Retributions increases rate 4.5% 4.5% 

The actuarial profits included in the corridor amount to 9,000 Euro. Financial charges on the obligations 

undertaken amount to 42,000 Euro. 

56

24 – DEFERRED TAXATION FUND 

The detailed make up of the variations is outlined in NOTE 14. 

25 – FUNDS FOR FUTURE RISKS AND CHARGES 

Non-current 

FUND FOR SEVERANCE INDEMNITY 

Balance as of 01/01/2005 + 161 

Provisions + 43 

Utilisation - (3) 

Variation consolidation area +/- 

Other movements +/- (33) 

Balance as of 31/12/2005 168 

The supplementary indemnity fund for the clientele is aimed at facing the non-current liability accrued by 

the agents on this aspect. 

The hypotheses adopted for determining the plan are summarised in the following table: 

FINANCIAL HYPOTHESES YEAR 2004 YEAR 2005 

Actualisation yearly rate 4% 4% 

Yearly rate of voluntary resignations 1.5% 1.5% 

Annual probability of dispensation 0,5% 0,5% 

Average annual probability of death/disability 1% 1% 

Current 

OTHER FUNDS 

Balance as of 01/01/2005 + 508 

Provisions + 374 

Utilisation - (481) 

Variation in consolidation area +/- 

Other movements +/- 

Balance as of 31/12/2005 401 

Total risk and charges funds as of 01/01/2005 669 

Total for risks and charges funds as of 31/12/2005 569 

DETAIL OF OTHER FUNDS 

DESCRIPTION 

PRODUCT 

WARRANTY FUND 

57 

SALE RETURNS 

FUND 

LEGAL RISKS 

FUND 

OTHER 

FUNDS 

Balance as of 01/01/2005 + 65 188 25 230 508 

Provisions + 74 238 35 27 374 

Utilisation - (65) (188) (25) (203) (481) 

Final balance as of 31/12/2005 74 238 35 54 401 

TOTAL

The guarantee and risk funds prudently cover the foreseen and foreseeable, short-term risks and charges, 

for the single fund categories, to face legal or implicit obligations, on the basis of historical data and 

statistics or of specific normative provisions. 

It is highlighted that during December 2005, the competent Regional Revenue Office for controlled 

company Cat S.p.A. issued a notice of assessment relative to assumed irregularities in the drawing up of 

the Income Tax Return , Mod. Unico 2003 (accounting year 2002): 

The amount demanded by Inland Revenue is 2,089,000 Euro (of which 1,044,000 Euro for taxes and 

1,045,000 Euro for penalties and other accrued interests) and refers to the non-declaration on the 

specific statement for operations involving subjects in cd “black list” Countries (ex art. 110 of TUIR). 

As regards the above, the following are highlighted: 

1. the company, on January 30, 2006, filed an appeal against the mentioned assessment notice, 

having evaluated that the alleged reasons could be favourably received by the competent 

Judges; 

2. in case of unfavourable judgement, an event that is, in any case, deemed improbable by the 

company and its consultants, and of a consequent financial disbursement for taxes, penalties and 

interests, the company is adequately guaranteed for the recovery of whatever would eventually be 

paid: 

3. the main doctrine, the specialised press and the stance of the Modena Tax-Commission, 

competent for the location of the controlled Cat S.p.A., have highlighted that, in accordance with 

dispensing elements of the above-mentioned TUIR norm, the violations in question evolve into a 

simple formal omission, rendering the inflicted penalties unjustifiable. 

26 – SUNDRY DEBTS AND OTHER NON-CURRENT LIABILITIES 

DESCRIPTION 31/12/2005 31/12/2004 DIFF. 

Liabilities for medium/long term financial leasing 2,650 1,999 651 

Medium/long term debts towards suppliers 5 27 (22) 

Medium/long term taxation liabilities 1 9 (8) 

Medium/long term liabilities towards provident and social security institutions 22 22 

Other medium/long term liabilities 471 30 441 

Total 3,149 2,087 1,062 

The liabilities for financial leasing with expiry within five years amount to 2,268,000 Euro, whereas those 

over five years amount to 382,000 Euro. 

The other medium/long term debts refer for 471,000 Euro to the non-current portion of the debt relative 

to the shareholdings acquisition in La Martesana S.r.l. and Publiest S.r.l.. 

58

27 – CURRENT FINANCIAL LIABILITIES 


Members 62 218 (214) 

Short-term debts towards banks 5,360 3,160 2,200 

Short-term debts towards other financing parties 73 5,561 (5,343) 

Total 5,495 8,939 (5,488) 

The debts towards other financing parties as of December 31, 2004 referred to the value of start up as 

regards the share quota of 43% of the shareholding in Gidiemme Stampa S.r.l. on account of the current 

value of the shareholding held, amounting to the effective value drawn with the assignment operation 

carried out in March 2005, for an amount of 5,561,000 Euro. The debts towards other financing parties 

as of December 31, refer to the reclassification of the debt towards Smalg S.p.A., former partner of 

Gidiemme Stampa S.r.l. following the assignment operation referred to above. 

59

28 – COMMERCIAL DEBTS, FOR TAXES AND OTHER CURRENT LIABILITIES 


Short-term accounts 4 4 

Short-term debts towards suppliers 7,663 7,107 556 

Liabilities for short-term financial leasing 691 449 242 

Short-term tax liabilities 862 756 106 

Short-term debts towards provident institutions 356 333 23 

Other short-term liabilities 1,620 1,390 230 

Payables and accrued liabilities 440 370 70 

Total 11,636 10,406 1,231 

IRAP 271 180 91 

IRES 73 102 (29) 

Deductions 254 240 14 

Substitute-tax on Re-valuations 9 9 

Inland Revenue VAT account 251 219 32 

Tax ex Leg. Dec. 209/02 2 2 

Other 2 6 (4) 

Total Tax Liabilities 862 756 106 

Detail debts towards Social Security Institutions 

INPS 293 266 27 

INAIL 11 3 8 

ENASARCO 24 23 1 

Others 28 41 (13) 

Total Debts towards Social Security Institutions 356 333 23 

Detail of other liabilities 

Personnel, for remuneration to be settled 299 607 (308) 

Accruals for employed personnel 282 77 205 

Clients 88 103 (15) 

Other 886 502 384 

Agents 44 (44) 

Administrators 65 57 8 

Total other liabilities 1,620 1,390 230 

Detail advance liabilities 

Other operative costs 1 1 

Other 41 19 22 

Total advance liabilities 42 19 23 

Detail deferred income 

Interests 4 (4) 

Subscriptions 64 64 

Other 78 20 58 

Digital 246 251 (5) 

Utilisation of spaces and shared expenses 10 12 (2) 

Total deferred income 398 351 47 

Total accruals and anticipated liabilities 440 370 70 

In detail, the debt towards others/other credits include 236,000 Euro relative to the deferred payment of 

the shareholdings for La Martesana S.r.l. and Publiest S.r.l.. 

60

29 – REVENUE 

Revenue subdivision and other income per channel 31/12/2005 31/12/2004 DIFF. 

Internet 3,250 2,686 564 

Mail 3,001 4,261 (1,260) 

Call centre 6,909 5,348 1,561 

Direct shops 6,389 5,008 1,381 

Retail 10,506 11,683 (1,177) 

Publishing revenue 4,453 4,084 369 

Advertising, communication and marketing revenue 9,181 9,096 85 

Outsourcing and other revenue 2,742 570 2,172 

Total Revenue 46,431 42,736 3,695 

Other revenue and sundry income 2406 2014 393 

Extraordinary income 643 429 214 

Total other revenue 3,049 2,443 606 

Total 49,480 45,179 4,303 

Foreign revenue amounts to 3,539,000 Euro (3,530,000 Euro as of December 31, 2004) and is 

subdivided as follows: 

VALUE SUBDIVISION OF FOREIGN PRODUCTION 31/12/2005 31/12/2004 DIFF. 

Portugal 3,489 3,394 95 

Holland 1 1 

Switzerland 11 136 (125) 

Rumania 38 38 

Total 3,539 3,530 9 

Other revenue and income are made up as follows: 

DETAIL OF OTHER REVENUE AND INCOME 31/12/2005 31/12/2004 DIFF. 

Recovery of expenses 1,885 1,785 100 

Other sundry revenue 522 229 293 

Contingent assets 243 384 (141) 

Surplusses 278 45 233 

Re-valuation 66 66 

Other extraordinary income 55 55 

Total 3,049 2,443 606 

30 – PURCHASES 

PURCHASES 31/12/2005 31/12/2004 DIFF. 

Goods purchases 12,219 12423 (204) 

Packaging purchases 270 237 33 

Paper purchases 1790 1785 5 

Consumption materials purchases 165 112 53 

Sundry purchases 604 133 471 

Total purchases 15,048 14,690 358 

Variation in stock on hand, finished products (175) (456) 281 

Variation in goods on hand 4 1 3 

Total purchases 14,877 14,235 642 

61

31 – COSTS FOR SERVICES 

SERVICES 31/12/2005 31/12/2004 DIFF. 

Catalogues plant and printing 1,823 1,829 (6) 

Catalogues shipping 1,951 1,394 557 

Outsourcing parcel-making / warehousing logistics 866 498 368 

Transport expenses on sales 816 762 54 

Postal expenses on sales 1,286 452 834 

Commissions and royalties 1,586 1,529 57 

Promotional and other advertising expenses 347 111 237 

Purchase of addresses listings 171 1 170 

Call-Centre 193 174 19 

Internet connection 364 402 (38) 

Telephone expenses 437 385 52 

Transport for purchasing 958 1,143 (184) 

Inspections and compliance verifications 68 58 10 

Accessory expenses on purchases 12 55 (43) 

Professional services 362 307 55 

Collaborations 630 667 (36) 

Legal and notarial expenses 333 339 (6) 

Other professional services 309 256 53 

Directors emoluments 1,522 976 547 

Auditor emoluments 103 114 (11) 

Contributions and sundry charges 195 171 24 

Motor and travelling 553 661 (108) 

Company costs 62 (62) 

Auditing 272 210 63 

Utilities 151 142 8 

Insurance 76 69 6 

Maintenance and repairs 166 131 35 

Administrative expenses 174 105 69 

Entertainment expenses 54 62 (8) 

Sundry management expenses 329 1,176 (848) 

Other postal expenses 69 87 (18) 

Training costs 8 4 5 

Others 428 250 178 

Publishing printing services 1,585 1,502 83 

Editorial services 895 1,185 (290) 

Distribution to news agents 745 731 14 

Distributors – circulation 1,106 453 653 

Copyrights 24 30 (6) 

Photographic – graphic services 104 108 (4) 

Other costs for publishing services 116 152 (36) 

Advertising spaces 1,163 92 1,071 

Others 9 5 4 

Total services costs 22,360 18,839 3,521 

62

32 – PERSONNEL COSTS 

PERSONNEL COSTS 31/12/2005 31/12/2004 DIFF. 

Salaries and wages 4,089 4006 83 

Social charges 1224 1154 70 

Severance indemnity (TFR) 232 291 (59) 

Other costs 31 37 (6) 

Total for personnel 5,576 5,488 88 

33 – OTHER OPERATIVE COSTS 

OTHER OPERATIVE COSTS 31/12/2005 31/12/2004 DIFF. 

Rents paid 983 958 25 

Leasing, hiring and similar 37 106 (69) 

Space utilisation 70 62 8 

Other 11 (11) 

Total costs for use of third-party assets 1,090 1,137 (47) 

Minus-values 28 (28) 

Taxation and sundry duties (ICI and others) 117 135 (18) 

Other charges 146 113 33 

Gifts and Promotional items 5 11 (6) 

Subscriptions 3 2 1 

Total sundry management charges 271 289 (18) 

Contingent liabilities 64 64 

Taxation from previous accounting years 1 15 (14) 

Others 303 1,090 (787) 

Total Extraordinary Charges 368 1,105 (737) 

Total 1,729 2,531 (802) 

34 – DEPRECIATION, PROVISIONS AND DEVALUATIONS 

DEPRECIATION, PROVISIONS AND DEVALUATION 31/12/2005 31/12/2004 DIFF. 

Depreciation of intangible assets 273 285 (12) 

Depreciation of fixed assets 759 607 152 

Devaluation of credits included in the working capital and cash resources 268 236 32 

Provisions for risks 322 272 50 

Other provisions 91 75 16 

Total 1,713 1,475 238 

EVALUATION OF SHAREHOLDINGS A PN AND OTHER VALUE ADJUSTMENTS 31/12/2005 31/12/2004 DIFF. 

Devaluation of Galassia S.r.l. 122 (122) 

Devaluation of Brown editore 18 (18) 

Total 140 (140) 

General Total 1,713 1,615 98 

63

35 – FINANCIAL INCOME AND CHARGES 

Income 

FINANCIAL INCOME AND CHARGES 31/12/2005 31/12/2004 DIFF. 

Banking and postal interests 10 10 

Profits on exchange rates 32 127 (95) 

Sundry interests 8 4 4 

Interests and actuarial income 85 85 

Other 58 68 (10) 

Total other financial income 193 209 (16) 

Charges 

Banking interests (175) (240) 71 

Interest paid on mortgage loans (26) (11) 

Interest on monetary adv. a/c (24) (25) (12) 

Financial discounts and charges (9) (1) 59 

Losses on exchange rates (237) (81) (147) 

Sundry interests (3) (27) 26 

Interests on leasing (107) (120) 74 

Losses on shareholding take-overs (30) (30) 

Other charges (181) (107) (74) 

Total interests and other financial charges (793) (599) (197) 

Net financial income and charges (600) (390) (213) 

36 - TAXATION 

TAXATION 31/12/2005 31/12/2004 DIFF. 

Current income taxes for the accounting year (1,006) (1,111) 105 

Deferred income taxes in profits for the accounting year (358) 3,334 (3,692) 

Total (1,364) 2,223 (3,587) 

The tax burden for current taxes is substantially in line with the same period of 2004. As regards deferred 

taxes, reference is made to the explanatory detail in NOTE 9. 

37 – PROFIT PER SHARE 

Profit per base share (amounts in Euro) 31/12/2005 31/12/2004 

Profit for the period due to the parent company 1,209,060 4,316,365 

Average number of ordinary shares 7,238 6,450 

Profit per share, in Euro 167.04 669.,20 

It is stated that there are no instruments that could potentially dilute the per-share profit. 

64

38 – OTHER INFORMATION 

SUBSEQUENT EVENTS 

No facts of interest are recorded, subsequent to the balance sheet closure. 

CORRELATED PARTIES 

In compliance with the international accounting principle (I.A.S.) number 24, we certify that the following 

entities are considered as parties correlated to Dmail Group S.p.A.: 

• the members of the Board of Directors and eventual companies in which single members hold a 

controlling or connection shareholding; 

• natural persons holding a shareholding quota in the Company. 

For these purposes, we certify the situation regarding the shareholdings as of 31/12/2005: 

• members of the Board of Directors of eventual companies in which the single directors own a 

controlling shareholding: 

Banfort Consultadoria e Servicos l.d.a. which at 31/12/2005 holds 11.12% of the share capital 

in Dmail Group S.p.A., is controlled by Gianluigi Viganò (Managing Director) 

• natural persons owning a shareholding quota in Dmail Group S.p.A. who have held, even for a 

fraction of year, office as managing director, auditor or general manager of the companies 

controlled by them: 

NAME AND SURNAME OFFICE 

NO. OF SHARES 

AS OF 

31/12/2004 

NO. OF SHARES 

ACQUIRED 

NO. OF SHARES 

SOLD 

NO. OF SHARES 

AS OF 

31/12/2005 

Ferrario Giancarlo Director (1) 306,977 241,534 65,443 

Gino Francini Director (1) 400 400 

Giuliano Vaccari Director 45,440 45,440 

Maurizio Valliti Director 

Independent 

64,500 64,500 

Luca Mario de Martini Director (2) 6,000 6,000 

Gianluigi Viganò Managing Director 700 306,977 242,234 65,443 

(1) in office until May 4, 2005 

(2) in office until May 4, 2005 

65

During the course of 2005, the members of the Board of Directors and the members of the Board of 

Auditors were attributed the following fees, even if paid at a later stage: 

PERSON OFFICE DESCRIPTION REMUNERATION 

NAME AND SURNAME OFFICE 

DURATION 

IN OFFICE 

EMOLUMENTS FOR 

THE OFFICE 

66 

NON-MONETARY 

BENEFITS 

BONUS AND 

OTHER 

INCENTIVES 

OTHER 

REMUNERA- 

TIONS 

Adrio Maria de Carolis Chairman M.D. A) 150,000 97,857 1,800 

Maurizio Valliti Director A) 3,333 1,500 

Giuliano Vaccari Director A) 1,667 1,800 

Ludolf Uberto Gucci Director B) 1,730 

Gianluigi Viganò Director M.D. A) 40,348 97,857 1,800 

Giancarlo Ferrario Director B) 1,384 

Gino Arancini Director B) 692 

Mario Volpi Director 

Independent 

A) 3,333 

Luca Mario De Martini Director 

Independent 

A) 6,667 

Andrea Zanone Poma Director A) 6,667 

TOTAL DIRECTORS 212,015 195,714 10,706 

AUDITORS 

Mario Galeotti Flori Chairman B) 9,000 1,140 

Carlo Bossi Statutory Auditor B) 6,000 676 

Angelo Galizzi (2) Statutory Auditor A/B) 12,000 3,340 

Lorenzo Ravizza Chairman A) 12,000 1,780 

Mauro Bottega Statutory Auditor A) 8,000 1,854 

TOTAL AUDITORS 47,000 8,790 

A) Appointed on May 4, 2005 for the three-year period 2005/2007 

B) In office until 04/05/2005 

On May 12, 2005, the Board of Directors passed a resolution for the attribution of annual fees, net of taxes and 

social security and welfare contributions, to the Members of the Board of Directors, to the following extent: 

• 150,000.00 Euro (one hundred and fifty thousand /00) to the Chairman of the Board of Directors Dr. 

Adrio Maria de Carolis, over and above a variable compensation linked to the EBITDA trend referred to 

the consolidated Group balance sheet 

• 40,348.00 Euro (forty thousand three hundred and forty eight /00) to the Director and Managing Director, 

Mr. Gianluigi Viganò, over and above variable compensation linked to the EBITDA trend referred to the 

consolidated Group balance sheet; 

• 5,000.00 Euro (five thousand /00) to Directors Messrs. Maurizio Valliti and Mario Volpi; 

• 2,500.00 Euro (two thousand five hundred /00) to Director, Mr. Giuliano Vaccari; 

• 10,000.00 Euro (ten thousand /00) to independent directors, Messrs. Luca Mario De Martini and Andrea 

Zanone Poma.

The fees attributed to Dmail Group S.p.A. company Directors by the companies controlled by the former 

are detailed in the following table: 

PERSON COMPANY OFFICE EMOLUMENT 

Soares Ferreira Joaquim D-Mail S.r.l. B. of D. Chairman 165,000 

Soares Ferreira Joaquim CAT IMPORT-EXPORT S.p.A. Director 5,200 

Stetter Brigitte D-Mail S.r.l. Managing director 130,000 

Stetter Brigitte CAT IMPORT-EXPORT S.p.A. Director 5,200 

Ferrario Giancarlo EDITRICE LECCHESE S.r.l. Managing director 62,496 

Viganò Gianluigi DMEDIA GROUP S.r.l. B. of D. Chairman 60,000 

Viganò Gianluigi EDITRICE LECCHESE S.r.l. B. of D. Chairman 13,500 

Viganò Gianluigi PROMOTION MERATE S.r.l. B. of D. Chairman 36,152 

Vaccari Giuliano (1) CAT IMPORT-EXPORT S.p.A. B. of D. Chairman 300,000 

(1) On December 20, 2004, the shareholders meeting of CAT Import Export S.p.A. Uni-personnel passed 

resolution for a further annual fee in favour of Mr. Giuliano Vaccari to the value of 1% of the invoicing increase 

obtained as compared to 2004. 

67

APPENDIX – TRANSITION TO THE IFRS INTERNATIONAL ACCOUNTING PRINCIPLES 

Dmail group adopted the International Financial Reporting Standards principles starting from accounting 

year 2005, with transition to the IFRS from January 1, 2004. The last consolidated balance sheet drawn 

up according to Italian accounting principles relates to the accounting year closed on December 31, 

2004. 

As required by IFRS 1 and by art. 82 of the “Regolamento Emittenti” regulations no. 11971/1999 

adopted by Consob with deliberation no. 14990 dated April 14, 2005, this note reports the 

reconciliation statements between the values previously tabled according to Italian accounting principles 

and those re-defined according to the IFRS, completed with the relative explanatory notes on the 

adjustments. 

For this purpose, the following have been arranged: 

• The notes concerning the rules for the first application of the IAS/IFRS (IFRS 1) and of the other 

IAS/IFRS principles selected, including the assumptions of the administrators on the principles of 

the interpretations of the IAS/IFRS in force and on the accounting policies adopted for the 

balance sheet drawn up according to the IAS/IFRS as of December 31, 2005; 

o The reconciliation statements between the net worth consolidated according to the 

previous accounting principles and that drawn in compliance with the IAS/IFRS as of 

December 31, 2004; 

• The reconciliation statement of the economic result reported in the balance sheet as of December 

31, 2004, drawn up according to the previous accounting principles, with that deriving from the 

application of the IAS/IFRS for the same accounting year; 

• The comments on the reconciliation statements; 

• The comments on the main variations applied to the financial statement following the 

introduction of the new accounting principles; 

• The IAS/IFRS consolidated balance sheet as of December 31, 2004 and the IAS/IFRS 

consolidated profit and loss account for the accounting year closed on December 31, 2004. 

These statements were set out in compliance with the International Financial Reporting Standards in force 

at the date of their being drawn up, including the IFRS recently adopted by the International Accounting 

Standards Board (IASB), the International Accounting Standards (IAS) and the interpretations of the 

International Interpretations Committee (IFRIC) and of the Standing Interpretations Committee (SIC). 

For the balance sheet layout, the criterion “current/non-current” was adopted, which is generally applied 

to industrial and commercial realities, whereas for the profit and loss account the layout was adopted 

with the costs classified by nature; this has implied the reclassification of the historical balance sheets set 

out according to the layouts envisaged by Leg. Dec. 127/1991. 

68

For the adoption of international accounting principles, the group applied the provisions of IFRS 1 – First 

adoption of the International Financial Reporting Standards, taking advantage of several exemptions. 

The exemptions envisaged by IFRS 1 applicable to the Group, are listed hereunder, with the indication of 

those utilised in drawing up the opening balance sheet: 

• Company aggregations: the group hasn’t retrospectively applied the IFRS 3 to the operations 

implying company aggregations that took place prior to the date of transition to the IFRS; 

• Evaluation of buildings, plant and machinery and of intangible assets at fair value or, 

alternatively, at the re-valued cost as a replacement value for the cost: for certain categories of 

assets (buildings) the group applied the re-valued cost as replacement of the cost; 

• Benefits to employees: the re-determination of the liabilities through the actuarial methodology in 

fact basically confirmed, without highlighting significant differences, the accounting values 

expressed with the Italian accounting principles and, therefore, no adjustments were applied in 

application of the new IAS/IFRS accounting principles, taking furthermore into account that the 

so-called corridor method was utilised, on the basis of which the net value of the cumulative 

profits and of the actuarial losses is not picked up until such time as this has exceeded, in 

absolute value, 10% of the liability’s actuarial value. 

For the most significant accounting principles and evaluation criteria utilised in drawing up the 

reconciliation statements, reference is made to note 4 of the index, relative to the summary of the 

accounting principles adopted. 

69

Main impacts deriving from the application of IAS/IFRS on the consolidated balance sheet as of 

December 31, 2004. 

STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2004 

70 

NOTES 

NATIONAL 

ACCOUNTING 

PRINCIPLES 

IAS/IFRS 

ADJUSTMENTS 

IAS/IFRS 

31/12/2004 



Start up and other indefinite-life intangible assets 1) 6,751 7,911 14,581 

Definite-life assets 2) 2,014 (312) 1,702 

8,765 7,599 16,283 

Fixed assets 

Owned buildings, plant and machinery 3) 7,234 26 7,260 

Other non-current assets 

Shareholdings 83 83 

Shares and financial credits 40 40 

Sundry credits and other non-current assets 9 9 

132 132 

Assets for advance taxation 4) 3,913 35 4,029 

TOTAL NON-CURRENT ASSETS (A) 20,044 7,660 27,704 


Stock on hand 5,114 5,114 

Commercial credits, sundry and other current assets 14,248 14,248 

Securities different from shareholdings 

Financial credits and other current assets 487 487 

Cash on hand and other liquid resources 2,841 2,841 

TOTAL CURRENT ASSETS (B) 22,690 22,690 

TOTAL CEASED ASSETS/DESTINED TO BE CEDED (C) 186 186 

TOTAL ASSETS (A+B+C) 42,921 7,660 50,581 

Net worth 

Quota share pertaining to the Parent company 5) 23,446 2,087 25,532 

Quota share pertaining to Third Parties 615 3 618 

TOTAL NET WORTH (D) 24,061 2,090 26,150 


Non-current financial liabilities 472 472 

TFR and other funds relative to personnel 1,312 1,312 

Deferred taxes fund 6) 536 10 546 

Risks and future charges fund 669 669 

Sundry debts and other non-current liabilities 2,087 2,087 

TOTAL NON-CURRENT LIABILITIES (E) 5,076 10 5,086 


Current financial liabilities 7) 3,378 5,561 8,939 

Commercial debts, for taxes, sundry and current liabilities 10,405 10,405 

TOTAL CURRENT LIABILITIES (F) 13,784 5,561 19,344 

Liabilities correlated to ceased assets/destined to be ceded 

of financial nature 

of non-financial nature 

TOTAL LIABILITIES CORRELATED TO ASSETS 

CEASED/DESTINED TO BE CEDED (G) 

TOTAL LIABILITIES (H=E+F+G) 18,860 5,571 24,430 

TOTAL NET WORTH AND LIABILITIES (D+H) 42,921 7,660 50,581

PROFIT AND LOSS ACCOUNT AS OF 31 DECEMBER 2004 

ACCOUNTING PRINCIPLES IAS/IFRS 

IAS/IFRS 

31/12/2004 ADJUSTMENTS 31/12/2004 

Revenues 8) 42,760 (24) 4,736 

Other revenues 2,443 2,443 

Purchase costs (14,235) (14,235) 

Service costs 9) (18,786) (53) (18,839) 

Staff costs (5,488) (5,488) 

Other operational costs (2,531) (2,531) 

Depreciations and devaluations 10) (4,292) 2,677 (1,615) 

Net operational result (130) 2,600 2,470 

Net financial income (expense) 11) (414) 24 (390) 

Result before tax (544) 2,624 2,080 

Tax 12) 2,438 (216) 2,223 

Net operating activities result 1,895 2,408 4,303 

Net result from activities to be transferred 73 73 

Operating result 

Attributable to: 

1,968 2,408 4,376 

- Period profit pertinent to holding company 1,912 2,404 4,316 

- Period profit pertinent to third party shareholders 56 4 60 

Comments to the main IAS/IFRS adjustments to the Assets and Liabilities Statement and Profit and Loss 

Account as of 31 December 2004 

1) Goodwill and other intangible assets of undefined life length 

The above indicated adjustments mainly concern allocation to goodwill of the eliminations of certain 

costs of installation and development, advertising costs and deferred charges, net of the related tax 

effect, that don't comply with the accounting requirements prescribed by the IAS/IFRS principles, as well 

as reclassification of the goodwill's depreciation which, following the IAS/IFRS principles, is no more 

prescribed and amounts to 1,948,000 euro. 

Are included furthermore: the goodwill's amount of 5,561,000 euro, referred to the additional 

partnership share of 43% in Gidiemme Stampa S.r.l., following the sellers' transfer rights ("PUT Option") 

prescribed by the original purchase agreement of 57% of Gidiemme Stampa S.r.l., the further share of 

33% in addition to 10% of the share capital further optioned through the settlement agreement with 

Smalg S.p.A., settled following its dispute with the sellers of 33% of the Gidiemme Stampa S.r.l. share 

capital. 

2) Intangible assets of defined life length 

They mainly concern the elimination of certain installation and development costs, advertising costs and 

deferred charges, net of the related tax effect, that don't comply with the accounting requirements 

prescribed by the IAS/IFRS principles partly allocated as of January 1 st , 2004 to goodwill (329 euro/000) 

and partly charged to net assets reserve (319 euro/000), in addition to the eliminations of the period's 

increases for 53.1 euro/000. 

71

3) Owned real estate, plant and machinery 

They concern the adjustments linked to the lower recalculated depreciations following the separation of 

land value from building value according to IAS 16. 

4) Assets due to anticipated tax 

They refer to the adjustments for the assets balancing entry of the tax effects on the reconciliation items. 

5) Net assets – Share pertinent to the holding company 

The net assets adjustments refer to the mentioned eliminations of certain installation and development 

costs, advertising costs and deferred charges, net of the related tax effect, that don't comply with the 

accounting requirements prescribed by the IAS/IFRS principles, in addition to the reclassification of the 

goodwill's depreciation which following the IAS/IFRS principles is no more prescribed and to the 

depreciation adjustments relating to the tangible and intangible assets subject to the adjustments as 

referred to by at the previous points. 

6) Deferred taxes provision 

They refer to the adjustments for the liabilities balancing entry of the tax effects on the reconciliation 

items. 

7) Current financial debts 

They refer to the liabilities balancing entry related to the goodwill's booking and referred to the 43% 

share indicated at the previous note 1. 

8) Revenues 

The adjustment concerns the stripping of the financial component inherent to the sales revenues linked to 

the cashing postponement as regards to the average cashing timings. 

1) Service costs 

They relate to the allocation to the profit and loss account of the increases of certain installation and 

development costs, advertising costs and deferred charges, that don't comply with the booking 

requirements to the Statement of assets and liabilities, prescribed by the IAS/IFRS principles, pertaining to 

the 2004 period. 

2) Depreciations and devaluations 

They relate to the goodwill's depreciation reclassification of 1,948 euro/000, no more prescribed 

following the IAS/IFRS principles, and for the remaining portion to adjustments relating to the tangible 

and intangible assets subject of the changes recalled at the previous points. 

72

3) Net financial income (expense) 

The adjustment relates to the stripping of the financial component inherent to the sales revenues linked to 

the cashing postponement as regards to the average cashing timings as referred to by the 

previous point 7. 

4) Taxes 

Concerns the reversal to the profit and loss account of credits for anticipated tax recorded following the 

adjustments for the assets balancing entry of the tax effects on the reconciliation items, pertaining to the 

2004 period. 

73

Main impacts following implementation of IAS/IFRS to the consolidated financial statement as of 

December 31 st , 2004 

NET ASSETS AS OF 

NET ASSETS AS OF 2004 PROFIT AND LOSS 

NOTES 

1/01/2004 

31/12/2004 

ACCOUNT GROUP AND 

GROUP AND THIRD PARTIES GROUP AND THIRD PARTIES THIRD PARTIES 

Italian accounting principles 21,492 24,061 1,968 

Minus: Third parties share (30) 615 56 

Holding Company's share 21,522 23,446 1,912 

Adjustments 

Tangibles a) 26 26 

Intangibles b) (973) - 312 703 

Goodwill c) 329 2,350 1948 

Deferred taxes provision 10 

Credits for anticipated taxes 325 35 (215) 

Sundry (19) 54 

Third parties (4) 

IAS/IFRS 21,203 25,532 4,376 

a) Tangibles and related depreciations: IFRS requests that for the land of concern, previously 

depreciated together with the building located on it, one is to strip and eliminate the related 

depreciation. 

b) Intangibles: the capitalization of certain kinds of intangibles as start-up costs, research and 

advertising and other intangibles is no more allowed by IFRS and one has therefore reclassified 

the amount ascribable to these kinds of intangibles. 

c) Goodwill: goodwill is no more subject to a depreciation procedure but regularly undergoes an 

evaluation process (impairment test). As prescribed by IFRS 1, the net goodwill's accounting value 

appearing in the financial statement drawn following the Italian accounting principles on the date 

of transition regularly undergoes the impairment test and is not subject to the depreciation 

procedure. The overall favourable effect on net assets as of the 31 st of December 2003 is 1,947 

euros/000. 

74

Impact on the income report as of December 31 st , 2004 

The reconciliation statement of the income report consolidated as of December 

31 st , 2004 isn't produced since the implementation of the IAS/IFRS principles 

hasn't significantly affected the 2004 opening and closing amounts of cash 

and other liquidities. 

The implementation of the IAS/IFRS principles has instead affected the overall financial situation 

following the booking of the financial debt correlated to the entry of the goodwill's amount of 5,561 

euros/000, referred to the additional 43% partnership share in Gidiemme Stampa S.r.l. as described 

above at point 1) of the comment notes and relating to Goodwill and other intangible assets of 

undefined life length. 


The Chairman of the Board of Directors 


75


Legal and Administrative office: Via G. Ripamonti n. 89 – 20141 Milano (MI) 

Share Capital 15,300,000 euros – F.C. , VAT and Enterprise Register n. 12925460151 

AUDIT COMMITTEE REPORT 

76



Share Capital 15,300,000 euro – F.C. , VAT and Enterprise Register n. 12925460151 

AUDITING FIRM'S REPORT 

79




GROUP COMPANIES 

FINANCIAL STATEMENT LAYOUTS 

81

GROUP COMPANIES FINANCIAL STATEMENT LAYOUT AS 

OF DECEMBER 31 ST 2005 

STATEMENT OF ASSETS AND LIABILITIES 

ASSETS 

0B) FIXED ASSETS 

I – Intangible assets: 

Antares 

Editoriale srl 

Publisette srl 

Editrice La 

Martesana srl 

Publiest srl 

Giornale di 

Merate srl 

Promotion 

Merate srl 

D-Stand 10 sas 

1) Installation and expansion costs 2.775 720 4.656 720 1.200 

3) Industrial patent rights and rights to use original works 8.051 8.306 10.738 

4) Permits, licenses, trademarks and similar rights 228.000 19.000 114.000 

5) Goodwill 35.000 

7) Other 2.100 2.183 

Total 

II – Tangible assets: 

230.775 10.871 19.000 161.962 13.641 1.200 

1) Land and buildings 2.870 340.493 

2) Plant and machinery 8.797 9.255 22.504 9.808 

3) Industrial and commercial equipment 7.195 1.313 

4) Other goods 4.079 49.952 584 32.605 34.138 

Total 

III – Long-term investments 

1) Partnerships in: 

12.876 59.207 3.454 62.304 385.752 

a) companies under control 13.500 24.977 

b) associated companies 5.165 

d) other companies 3.693 

Total 

2) Loans from 

13.500 33.835 

a1) controlled companies (short-term) 25.000 

d1) others (short-term) 1.000 

d2) others (medium/long-term) 6.843 1.420 3.254 1.570 4.919 23 

32.843 1.420 3.254 1.570 4.919 23 

Total 46.343 1.420 3.254 1.570 38.754 23 

TOTALE IMMOBILIZZAZIONI (B) 

C) WORKING CAPITAL 

I – Goods on hand: 

277.118 23.747 79.627 6.708 225.836 438.147 1.223 

4) Finished products and goods 4.476 

Total 

II – Credits 

4.476 

1a) due from customers (short-term) 1.583.540 278.939 513.393 723.849 1.873.714 

2a) loans to controlled companies (short-term) 1.074 882 

3a) loans to associated companies (short term) 10.509 

4a) loans to controlling companies (short-term) 39.735 3.147 

4 bis a) tax credits (short-term) 46.198 8.137 2.581 1.466 

4 ter a) anticipated taxes (short-term) 13.987 76 

4 ter a) anticipated taxes (medium/long-term) 110.610 54.145 

5a) due from others (short-term) 5.767 65.961 24.085 26.786 47.351 53.105 44.016 

Total 

IV – Liquidity: 

163.649 1.711.360 303.100 540.179 773.781 1.996.968 44.016 

1) Bank and post deposits 14.755 57.605 16.699 185.906 5.070 44.975 1.101 

2) Cheques 7.200 6.335 13.715 5.641 12.528 

3) Money and cash on hand 51 1.230 12.113 2.307 635 398 

Total 22.006 65.170 42.527 193.854 5.705 57.901 1.100 

TOTAL WORKING CAPITAL (C) 185.655 1.776.530 350.103 734.033 779.486 2.054.869 45.117 

D) ADJUSTMENT ACCOUNTS 220 1.302 149 19.484 3.291 39 

TOTAL ASSETS 

LIABILITIES AND NET EQUITY 

A) NET EQUITY 

462.773 1.800.497 431.032 740.890 1.024.806 2.496.307 46.379 

I Share capital 92.900 12.000 10.200 10.400 15.600 10.400 10.000 

IV Legal reserve 7.698 25 2.080 2.080 17.817 10.544 

VII Other reserves: extraordinary reserve 101.933 25.468 51.447 39.933 59.267 

VII Altre Riserve (1) 2 (1) 67.291 1 

VIII Profit (loss) carried forward (1.435) 57.885 260.483 

IX Profit (loss) of the period 30.374 1.516 (14.253) 64.285 26.042 68.179 1.085 

Total group net equity 232.904 12.108 23.494 128.212 224.568 408.874 11.085 

Total net equity 

B) RISK AND CONTINGENCY FUNDS 

232.904 12.108 23.494 128.212 224.568 408.874 11.085 

1) For retirement pay and kindred outlays 9.049 11.793 

2) for taxes 4.470 373 3.353 

3) Others 110 

Total 4.470 9.049 373 3.463 11.793 

C) SUBORDINATE EMPLOYMENT SEVERANCE INDEMNITY 

D) DEBTS: 

16.253 104.125 69.283 68.629 44.962 

3a) Partners for short-term financing 25.000 

4a) Short-term bank debts 528.604 231 239.934 714.085 405 

4b) medium/long-term bank debts 92.253 

5a1) Short-term debts to other financing institutes 8.703 

6b) m/l-term advances 3.486 

7a) Due to suppliers (short-term) 223.621 1.052.387 56.184 336.905 142.640 633.013 639 

9a) Due to controlled companies (short-term) 487.905 

10a) Due to associated companies (short-term) 3.302 

11a) Due to controlling companies (short-term) 

11b) Due to controlling companies (m/l-term) 

128.152 137.588 102.520 243.393 8.152 

12a) Short-term tax liabilities 14.598 31.902 44.426 17.311 37.639 2.104 

13a) Short-term debts towards welfare and social security instit. 10.148 16.469 12.000 13.324 13.171 668 

13b) M/l-term debts towards welfare and social security instit. 495 

14a) Other short-term debts 22.601 26.941 30.599 35.619 30.083 6.478 

Total 223.621 1.756.490 278.018 529.936 692.221 2.020.098 35.294 

E) ACCRUED EXPENSES AND DEFERRED INCOME 1.778 6.597 25.022 13.459 35.925 10.580 

TOTAL LIABILITIES 229.869 1.788.389 407.538 612.678 800.238 2.087.433 35.294 

TOTAL NET EQUITY AND LIABILITIES 462.773 1.800.497 431.033 740.890 1.024.806 2.496.307 46.379 

SUSPENSE ACCOUNTS 

(0) 1 

OTHER SUSPENSE ACCOUNTS 14.766 12.218 18.908 

Total 

PROFIT AND LOSS ACCOUNT 

A) MANUFACTURING VALUE 

14.766 12.218 18.908 

1) Revenues from sales and services rendered 88.889 3.202.354 1.131.205 1.378.650 2.059.966 4.319.965 50.451 

2) Changes of on hand work-in-progress products semifinished 

and finished 

(8.340) 

5a) Other revenues and sundry proceeds 19.185 491 31.648 99.668 44.768 3 

Total 88.889 3.221.539 1.123.356 1.410.298 2.159.634 4.364.733 50.454 

82



B) MANUFACTURING COSTS 

Antares 

Editoriale srl 

Publisette srl 

83 

Editrice La 

Martesana srl 

Publiest srl 

Giornale di 

Merate srl 

Promotion 

Merate srl 

D-Stand 10 sas 

6) For raw, subsidiary, consumer materials and goods 801 110.829 22.354 422.266 23.029 9.458 

7) For services 14.718 3.054.366 531.459 924.310 1.266.326 3.869.821 28.531 

8) For enjoyment of third party goods 74 20.736 21.478 81.333 68.545 9.375 

a) Payroll 43.688 283.814 210.297 195.444 94.996 

b) Social security contributions 50 13.648 77.346 60.460 63.097 25.335 204 

c) Severance indemnity 3.800 22.723 14.825 15.908 8.166 

d) Retirement pay and similar 6.148 6.049 

a) depreciation of intangible assets 13.604 3.727 1.000 15.616 4.104 300 

b) depreciation of tangible assets 5.330 31.563 11.330 17.678 33.067 

cash on hand 38.231 3.430 90.379 

14) Sundry operating expenses 1.218 4.908 10.069 5.197 18.971 12.063 373 

Total 29.590 3.168.573 1.095.687 1.276.300 2.100.069 4.229.505 48.240 

Difference between manufacturing value and costs (A-B) 59.299 52.966 27.669 133.998 59.565 135.228 2.213 

C) PROCEEDS AND FINANCIAL CHARGES 

15) Proceeds from partnerships 

a) proceeds from partnerships in controlled companies 1.074 

c) other proceeds from partnerships 107 

b) from securities booked in fixed assets other than partnerships 977 

c) from securities booked in working capital other than 

partnerships 

1.868 

d4) v. others 30 79 364 98 25 777 1 

d) interest and other financial charges v. other third parties (28.573) (1.145) (3.005) (19.049) (27.570) (384) 

Total (15 – 16 – 17) 1.104 (28.494) (781) (62) (19.024) (26.686) (383) 

D) FINANCIAL ACTIVITIES VALUE ADJUSTMENTS 

E) EXTRAORDINARY PROCEEDS AND CHARGES 

20a) Capital gain from transfers 9.506 

20b) Other proceeds 5.082 4.963 9.949 391 26.295 3.065 

21b) Taxes relating to prior periods (318) (953) 

21c) Other charges (15.122) (6.613) (12.445) (1) (316) 

Total extraordinary entries (20 – 21) (10.040) (1.968) (2.496) (563) 25.979 12.571 

Result before tax (A –B + C + D + E) 50.363 22.504 24.392 133.373 66.520 121.113 1.830 

22a) Current period income taxes (1.829) (28.375) (38.272) (69.088) (37.125) (60.879) (746) 

22b) Deferred period income taxes (18.160) 7.387 (373) (3.353) 7.945 

Total adjustments (18 – 19) (19.989) (20.988) (38.645) (69.088) (40.478) (52.934) (746) 

26) Profit (loss) of the period 30.374 1.516 (14.253) 64.285 26.042 68.179 1.085 

Consolidated profit (loss) of the period 30.374 1.516 (14.253) 64.285 26.042 68.179 1.084




Editrice 

Vimercatese srl 

Editrice 

Lecchese srl 

84 

Promotion 

Lecco srl 

Editrice 

Valtellinese srl 

Promotion 

Digitale srl 

Promotion 

Sondrio srl 

Dmedia 

Group spa (1) 

ASSETS 

A) DUE TO PARTNERS FOR PAYMENTS STIIL DUE 

B) FIXED ASSETS 


7.500 

1) Installation and expansion costs 6.947 8.640 840 720 727 17.361 

2) Research, development and advertising costs 800 

3) Industrial patent rights and rights to use original works 7.466 13.920 7.440 7.440 214.184 299.511 

4) Permits, licenses, trademarks and similar rights 10.303 99.217 44.157 903.082 

5) Goodwill 6.702.218 

7) Other 148.707 12.428 624 2.192 28.016 

Total 


173.423 135.005 8.904 54.509 214.911 7.950.188 

1) Land and buildings 865.160 

2) Plant and machinery 35.848 47.245 1.286 116 12.612 57.759 

3) Industrial and commercial equipment 7.305 7.645 112 1.555 15.771 416 

4) Other goods 14.157 14.595 10.599 2.889 117.553 126.336 

Total 



57.310 69.485 11.997 4.560 145.936 1.049.671 

a) companies under control 66.416 1.921.977 

b) associated companies 5.165 20.000 

d) other companies 

2) Loans from: 

46.481 


d2) others (medium/long-term) 8.033 7.829 253 1.621 

Total 8.033 79.410 253 2.110.079 

TOTAL FIXED ASSETS (B) 



238.766 283.900 20.901 59.322 360.847 11.109.938 

1) Raw, subsidiary and consumer materials 183.017 

4) Finished products and goods 89.034 187.430 

Total 


89.034 370.447 

1a) due from customers (short-term) 282.475 380.093 693.089 193.923 478.982 1.326.180 

2a) loans to controlled companies (short-term) 209.200 1.021.290 

3a) loans to associated companies (short term) 44.080 16.970 

4a) loans to controlling companies (short-term) 492.905 45.733 24.000 

4 bis a) tax credits (short-term) 10.775 2.929 1.032 736 10.786 5.592 

4 bis a) tax credits (m/l-term) 2.806 227 516 6.306 

4 ter a) anticipated taxes (short-term) 3.502 4.312 

5a) due from others (short-term) 30.889 31.191 12.138 14.843 84.332 39.350 

Total 


817.044 667.493 712.567 209.729 641.631 2.422.718 

1) Bank and post deposits 5.789 4.539 135.576 8.500 2.500 18.417 

2) Cheques 3.497 579 

3) Money and cash on hand 1.127 1.077 1.255 701 111 208 

Total 6.916 5.616 4.752 136.277 9.190 2.500 18.625 

TOTAL WORKING CAPITAL (C) 823.960 673.109 717.319 346.006 739.855 2.500 2.811.790 

D) ADJUSTMENT ACCOUNTS 158.427 40.291 39 5.436 25.400 1.125 

TOTAL ASSETS 


A) NET EQUITY 

1.221.153 997.300 738.259 410.764 1.126.102 10.000 13.922.853 

I Share capital 15.600 98.800 46.800 10.400 11.440 10.000 8.000.000 

III Revaluation reserves 139.836 

IV Legal reserve 3.158 24.228 8.387 5.683 2.288 427 

VII Other reserves: extraordinary reserve 45.555 899 124.111 98.033 32.644 59.812 

VII Other reserves 8.154 1 2 1 2 

VIII Profit (loss) carried forward 7.116 (494.695) 

IX Profit (loss) of the period (1.775) (41) 1.096 3.869 30.607 7.037 

Total group net equity 62.538 278.992 180.394 117.987 76.980 10.000 7.572.583 



62.538 278.992 180.394 117.987 76.980 10.000 7.572.583 

1) For retirement pay and kindred outlays 2.791 

2) for taxes 664 1.889 4.906 39.229 

3) Others 30.000 

Total 664 1.889 2.791 34.906 39.229 


D) DEBTS: 

132.362 143.318 26.620 42.207 63.085 110.310 

3a) to partners for short-term financing 2.630.000 

4a) Short-term bank debts 301.765 227.715 211.270 210.259 751.978 

4b) medium/long-term bank debts 247.313 

5a1) short-term debts with other financing institutes 72.821 

7a) Due to suppliers (short-term) 379.030 165.439 61.754 53.461 337.886 909.141 

9a) Due to controlled companies (short-term) 71.860 

10a) Due to associated companies (short-term) 13.668 44.080 10.509 

11a) Due to controlling companies (short-term) 268.223 73.902 213.875 43.456 132.110 102.866 

12a) Short-term tax liabilities 13.368 21.544 2.498 17.574 12.841 20.373 

12b) M/l-term tax liabilities 8 741 

13a) Short-term debts towards welfare and social security instit. 18.698 14.791 3.842 9.224 9.648 23.027 

13b) M/l-term debts towards welfare and social security instit. 21.573 

14a) Other short-term debts 19.286 23.061 29.567 30.796 18.877 834.751 

14b) Other m/l-term debts 471.111 

Total 1.000.370 540.120 522.806 198.591 732.138 6.157.555 

E) ACCRUED EXPENSES AND DEFERRED INCOME 25.219 32.981 5.648 17.073 253.899 43.176 

TOTAL LIABILITIES 1.158.616 718.308 557.865 292.777 1.049.122 6.350.270 

TOTAL NET EQUITY AND LIABILITIES 1.221.153 997.300 738.259 410.764 1.126.102 10.000 13.922.853 


OTHER SUSPENSE ACCOUNTS 

1.272.105 366.761 146.593 13.775


OF DECEMBER 31 ST Editrice 

Editrice Promotion Editrice Promotion Promotion Dmedia 

2005 

Vimercatese srl Lecchese srl Lecco srl Valtellinese srl Digitale srl Sondrio srl Group spa (1) 

Total 



1.272.105 366.761 146.593 13.775 

1) Revenues from sales and services rendered 2.268.111 2.326.538 1.387.210 1.108.946 1.457.644 5.083.496 

2) Changes of on hand work-in-progress products semifinished 

and finished 

(4.853) 

5a) Other revenues and sundry proceeds 143.233 23.499 10.244 5.272 41.843 504.662 

Total 2.411.344 2.350.037 1.397.454 1.114.218 1.499.487 5.583.305 


6) For raw, subsidiary, consumer materials and goods 377.240 401.836 823 169.338 69.126 1.117.421 

7) For services 1.398.336 1.405.245 1.290.385 647.469 892.601 3.184.997 

8) For enjoyment of third party goods 140.133 136.421 6.028 24.227 206.369 99.025 

a) Payroll 270.821 224.068 45.388 141.840 140.929 387.037 

b) Social security contributions 77.803 69.220 13.876 44.408 42.817 114.443 

c) Severance indemnity 23.576 20.521 4.011 10.902 11.672 31.127 


a) depreciation of intangible assets 24.548 15.414 2.452 4.972 54.621 146.341 

b) depreciation of tangible assets 15.396 16.181 2.238 1.181 36.189 74.582 

cash on hand 3.493 2.983 13.594 871 2.816 11.732 

11) Changes in on hand raw, subsidiary and consumer 

materials and gods 

13) Other provisions 30.000 

85 

(27.850) 39.057 

14) Sundry operating expenses 20.341 20.418 2.781 11.160 14.067 16.136 

Total 2.351.687 2.312.307 1.381.576 1.086.368 1.443.357 5.221.898 

Difference between manufacturing value and costs (A-B) 59.657 37.730 15.878 27.850 56.130 361.407 



a) proceeds from partnerships in controlled companies 36.000 

16) Other financial proceeds: 

d1) vs. controlled companies 126.200 

d4) vs. others 141 38 103 680 218 132 

17) Interest and other financial charge: 

b) interest and other financial charges towards associated 

companies 

(104.937) 

c) interest and other financial charges towards controlling 

companies 

(271.570) 

d) interest and other financial charges towards other third 

parties 

(13.790) (16.340) (8.419) (67) (5.175) 

(29.395) 

Total (15 – 16 – 17) (13.649) (16.302) (8.316) 613 (4.957) (243.570) 


20a) Capital gain from transfers 1.759 10.000 

20b) Other proceeds 34.541 24.890 37 7.693 3.185 2.974 

21a) Capital losses from transfers 

21b) Taxes relating to prior periods (340) (170) (425) 

21c) Other charges (59.015) (13.984) (2) (147) (1.890) (28.328) 

Total extraordinary entries (20 – 21) (24.474) 12.325 (135) 7.121 11.295 (25.354) 

Result before tax (A –B + C + D + E) 21.534 33.752 7.427 35.584 62.468 92.483 

22a) Current period income taxes (22.645) (32.870) (6.533) (26.809) (31.035) (46.217) 

22b) Deferred period income taxes (664) (923) 202 (4.906) (826) (39.229) 

Total adjustments (18 – 19) (23.309) (33.793) (6.331) (31.715) (31.861) (85.446) 

26) Profit (loss) of the period (1.775) (40) 1.096 3.869 30.607 7.037 

Consolidated profit (loss) of the period (1.775) (40) 1.096 3.869 30.607 7.037

GROUP COMPANIES FINANCIAL STATEMENT LAYOUT 

AS OF DECEMBER 31 ST 2005 


ASSETS 

OTTO srl 

D-Mail Venda 

Directa sa 

D-Mail Direct srl D-Mail srl D-Mail Store srl CAT spa Lake View Impex srl 

A) DUE TO PARTNERS FOR PAYMENTS STIIL DUE 



15.000 

1) Installation and expansion costs 1.459 341 1.229 2.030 

3) Industrial patent rights and rights to use original works 6.089 

4) Permits, licenses, trademarks and similar rights 13.866 6.620 

5) Goodwill 360.000 83.529 

7) Other 17.357 392.181 

Total 


1.459 13.866 341 390.066 1.229 477.740 

1) Land and buildings 167.220 42.694 

2) Plant and machinery 57.088 1.963 22.622 13.135 

3) Industrial and commercial equipment 23.029 53.426 24.404 

4) Other goods 17.422 201.407 154 62.159 6 

Total 



97.539 1.963 277.455 154 266.918 42.700 

a) companies under control 112.770 

d) other companies 

2) Loans from 

24 1.005 


d2) others (medium/long-term) 26.935 1.549 

73.428 1.549 

Total 186.222 2.554 

TOTAL FIXED ASSETS (B) 1.459 111.405 2.304 853.743 1.383 747.212 42.700 



1) Raw, subsidiary and consumer materials 12.311 92.034 

4) Finished products and goods 318.303 13.685 2.177.365 2.090.021 

Total 


330.614 13.685 2.269.399 2.090.021 

1a) due from customers (short-term) 37.487 3.782 796.561 4.959.095 

1b) due from customers (m/l-term) 5.331 

2a) loans to controlled companies (short-term) 2.252 340.989 

3a) loans to associated companies (short term) 471.056 

4a) loans to controlling companies (short-term) 136.391 21.898 19.741 

4 bis a) tax credits (short-term) 32 23.881 33.648 27.054 128.053 2.249 

4 ter a) anticipated taxes (short-term) 907 1.047.961 159.233 

5a) due from others (short-term) 49.332 1.137 8.998 1.342 30.642 

Total 


136.423 119.190 4.919 2.250.055 519.193 5.277.023 2.249 

1) Bank and post deposits 55.612 121.771 236 2.265.497 126.821 846.298 3 

2) Cheques 365 552 

3) Money and cash on hand 4.748 6.375 2.467 13 543 9 

Total 55.612 126.519 6.611 2.268.329 126.834 847.393 12 

TOTAL WORKING CAPITAL (C) 192.035 576.323 25.215 6.787.783 646.026 8.214.437 2.261 

D) ADJUSTMENT ACCOUNTS 214.038 340.493 271.995 

TOTAL ASSETS 


A) NET EQUITY 

208.494 901.767 27.519 7.982.019 647.409 9.233.644 44.961 

I Share capital 20.000 155.000 10.724 3.600.000 110.000 1.000.000 2.191 

III Revaluation reserves 149.040 

IV Legal reserve 24.966 123.723 260 

VII Other reserves: extraordinary reserve 124.700 16.517 2.794.119 

VII Other reserves 1.971 13.247 2.081.151 

VIII Profit (loss) carried forward (283.027) (491.633) 474.344 (5.103) 

IX Profit (loss) of the period 546 20.490 (84.467) 531.567 (50.478) 624.841 (863) 

Total group net equity 20.546 17.163 (71.772) 3.656.451 572.079 6.772.874 (3.515) 



20.546 17.163 (71.772) 3.656.451 572.079 6.772.874 (3.515) 

1) For retirement pay and kindred outlays 177.528 

3) Others 129.725 1.558 240.000 

Total 129.725 1.558 417.528 

C) SUBORDINATE EMPLOYMENT SEVERANCE 

INDEMNITY 

D) DEBTS: 

313.859 309.543 

3a) to partners for short-term financing 64.917 43.529 

4a) Short-term bank debts 9.205 

7a) Due to suppliers (short-term) 175.396 408.883 54 2.466.049 13.644 1.021.002 

7b) Due to suppliers (m/l-term) 4.806 

9a) Due to controlled companies (short-term) 305.206 241.111 

11a) Due to controlling companies (short-term) 

11b) Due to controlling companies (m/l-term) 

26.053 60.000 172.189 3.338 

12a) Short-term tax liabilities 12.552 91.576 672 294.278 219.863 1.610 

13a) Short-term debts towards welfare and social security 

institutes 

7.297 2.001 121.581 76.629 

14a) Other short-term debts 5.594 744.318 129 212.082 

Total 187.948 817.768 99.291 3.876.542 73.773 1.701.765 48.477 

E) ACCRUED EXPENSES AND DEFERRED INCOME 66.836 5.442 31.933 

TOTAL LIABILITIES 187.948 884.603 99.291 4.325.568 75.330 2.460.769 48.477 

TOTAL NET EQUITY AND LIABILITIES 208.494 901.767 27.519 7.982.019 647.410 9.233.643 44.962 

86

GROUP COMPANIES FINANCIAL STATEMENT LAYOUT 

AS OF DECEMBER 31 ST 2005 


OTTO srl 

D-Mail Venda 

Directa sa 

D-Mail Direct srl D-Mail srl D-Mail Store srl CAT spa Lake View Impex srl 

SURETIES 146.990 37.361 

OTHER SUSPENSE ACCOUNTS 43.200 475.077 1.354.814 

Total 


43.200 622.067 1.392.175 


1) Revenues from sales and services rendered 246.963 3.262.103 37.902 18.109.820 11.447 10.588.959 

5a) Other revenues and sundry proceeds 14 227.041 277 1.366.286 9 156.263 

Total 246.977 3.489.144 38.179 19.476.106 11.456 10.745.222 


6) For raw, subsidiary, consumer materials and goods 1.318.256 36.680 7.897.111 1.174 5.197.977 761 

7) For services 245.741 1.462.734 52.808 7.588.900 73.055 2.156.978 32 

8) For enjoyment of third party goods 

9) For the staff: 

167.377 3.935 723.559 2.952 290.351 

a) Payroll 360.406 16.110 1.145.808 704.482 

b) Social security contributions 69.767 13.692 363.731 222.638 

c) Severance indemnity 90.008 55.805 

e) other costs 13.498 1.967 9.454 

a) depreciation of intangible assets 365 10.588 2.125 157.222 307 186.780 

b) depreciation of tangible assets 31.845 573 91.849 320 88.629 

cash on hand 5.012 27.371 68.416 

11) Changes in on hand raw, subsidiary and consumer 

materials and gods 

(13.986) (280.512) 240.606 

12) Risk provisions 122.903 198.879 

13) Other provisions 60.000 

14) Sundry operating expenses 175 2.281 10.178 76.481 1.864 28.616 70 

Total 246.281 3.441.764 122.117 18.006.398 79.671 9.509.611 863 

Difference between manufacturing value and costs (A-B) 696 47.380 (83.938) 1.469.708 (68.215) 1.235.611 (863) 


87 

1.838.314 

16) Other financial proceeds: 

a4) vs. others 118 19.684 

d) proceeds other than the previous 900 

d4) vs. others 

17) Interest and other financial charge: 

(17) 7.247 27.033 

c) interest and other financial charges towards controlling 

companies 

(16.517) 

d) interest and other financial charges towards other third 

parties 

(43.078) (524) (90.950) (419) (55.246) 

17 bis) gains and losses on exchange 12 (108.960) (96.617) 

Total (15 – 16 – 17) 118 (23.394) (529) (192.663) 481 (141.347) 


20a) Capital gain from transfers 14.241 

20b) Other proceeds 24.824 127.966 20.267 44.613 

21a) Capital losses from transfers 

21b) Taxes relating to prior periods 

21c) Other charges (27.398) (25.176) (207) (8.508) 

Total extraordinary entries (20 – 21) (2.574) 102.791 20.060 50.346 

Result before tax (A –B + C + D + E) 814 21.412 (84.467) 1.379.836 (47.674) 1.144.610 (863) 

22a) Current period income taxes (269) (922) (136.852) (553.416) 

22b) Deferred period income taxes (711.417) (2.804) 33.647 

Total adjustments (18 – 19) (269) (922) (848.269) (2.804) (519.769) 

26) Profit (loss) of the period 545 20.490 (84.467) 531.567 (50.478) 624.841 (863) 

Period profit (loss) pertaining to third parties 

Consolidated profit (loss) of the period 545 20.490 (84.467) 531.567 (50.478) 624.841 (863)





2005 FINANCIAL STATEMENT 


88

Dear shareholders 

We submit to your attention and approval the financial statement ending on December 31 st 2005, which 

highlights a positive result of 795,611 euros due mainly to the good figures of the financial and 

partnership management as regards to the operational result which turned-out to be negative. 

Before examining the trend of the markets in which the Company operates, the Board of Directors would 

like to underline that the present financial statement has undergone a full audit by Reconta Ernst & Young 

S.p.A., well known auditing firm registered to the Consob board. 

ACTIVITY OF THE COMPANY AND GROUP 

Dmail Group S.p.A. is the group's holding company and performs centralized services of strategic 

approach, business development, communications, administration, ordinary and extraordinary finance 

and control. 

Dmail Group S.p.A., quoted at the Italian Stock Exchanges' Star operates in the media commerce and 

local media fields. 

Active in the multi-product and multi-channel direct and at distance sales of "useful and difficult to find 

ideas", widely-used electronic appliances and small household appliances, Dmail is present on the 

national and international market controlling the B2C and B2B channels. 

Dmail has developed and manages an integrated distribution platform which enables it to propose to 

third party customers the implementation and management in full outsourcing of direct and at distance 

sales, including purchasing, logistics, distribution and marketing activities, through paper catalogues, e- 

commerce, call centres and sales points. 

The press activities are handled through DMedia Group who controls Netweek, the first Lombardy circuit 

of local weeklies. Consisting of 17 headings and the first regional weekly for number of copies, "Milan 

Metropolis – Lombardy in Europe", Netweek is printed in 190,000 copies and can count on one million 

weekly readers. Netweek produces and sells, furthermore, editorial contents for national media and local 

institutions also. 

MANAGEMENT PERFORMANCE AND MAIN ECONOMIC – FINANCIAL FIGURES 

Let us now analyze some economic and financial figures achieved by the Company during the period. 

The analysis of the group's activities and related results is carried out in detail in the consolidated 

financial statement report. 

The profit and loss account and statement of assets and liabilities are summarized below and compared 

with the previous period results. 

89

PROFIT AND LOSS ACCOUNT 2005 2004 

A) MANUFACTURING VALUE 55,752 176,671 

B) MANUFACTURING COSTS (1,464,034) (1,509,621) 

DIFFERENCE BETWEEN MANUFACTURING VALUES AND COSTS (1,408,282) (1,332,950) 

C) FINANCIAL INCOME AND EXPENSE 1,819,996 767,229 

D )VALUE ADJUSTMENTS OF FINANCIAL ACTIVITIES (164,211) 

E) EXTRAORDINARY PROCEEDS AND EXPENSES (157,124) (524,777) 

RESULT BEFORE TAX 254,590 (1,254,709) 

OPERATING INCOME TAX/ANTICIPATED TAX 541,021 2,321,479 

OPERATING PROFIT 795,611 1,066,770 

Also in 2005 the Company carried-out its role of holding company by continuing to focus on the 

reorganization and rationalization of the entire corporate structure, bearing the costs which had a 

negative impact on the related profit and loss account. 

The 2005 financial management shows a positive result of 1,819,000 euro overall exceeding the 2004 

result by 1,052,000 euro. 

This result has been mainly determined by the dividends realized and deliberated by the controlled 

company CAT Import Export S.p.A. and income on interest-beating loans granted to the controlled 

companies. 

Furthermore, during the course of 2005, but in a much more limited way when compared to the prior 

period, the company decided to book additional anticipated taxes. Such decision was backed-up by the 

reasonable assumption of recovering the tax losses and other temporary differences in future periods, 

based on the budget plans drawn purposely for a period of five years. Such assumed recovery is due 

essentially to the possibility of applying within the Group the new regulations inherent to the "Consolidato 

Fiscale", extended, counting from the 01/01/2005 – 31/12/2005 tax period, to the controlled D-Mail 

S.r.l. and D-Store S.r.l. also. 


ASSETS 2005 2004 

A) DUE FROM PARTNERS 

B) TANGIBLES AND INTANGIBLES 32,377,846 26,161,947 

C) WORKING CAPITAL 4,653,667 4,195,066 

D) ACCRUED INCOME AND PRE-PAID EXPENSES 65,260 22,369 

TOTAL ASSETS 37,096,773 30,379,382 

LIABILITIES 

A) NET ASSETS 34,206,043 28,544,673 

B) RISK AND CONTINGENCY FUND 150.000 

C) SEVERANCE INDEMNITY PROVISION 5,106 12,644 

D) DEBTS 2,881,917 1,671,740 

E) ACCRUED EXPENSES AND DEFERRED INCOME 3,706 325 

TOTAL LIABILITIES AND NET ASSETS 37,096,772 30,379,382 

Tangibles and intangibles go from 26,162,000 euro to 32,377,000 euro increasing by 6,159,000 

euro. 

90

Net assets go from 28,545,000 euro to 34,206,000 euro increasing by 5,661,000 due for 5,631,000 

euro mainly to the assignment of 43% of the share capital of Gidiemme Stampa S.r.l. (then merged 

through incorporation into DMedia Group S.p.A. unipersonale). 

INVESTMENTS 

Investments in intangible assets 

During 2005 the company has made investments in intangibles for 45,000 euro, represented mainly by 

the purchase of a new software program to be used for both the drawing of the consolidated financial 

statements and the management control of all the group's companies. 

Investments in tangible assets 

During 2005 the company has made investments in tangibles and more specifically in machines and 

computers for 18,000 euro. 

Long-term investments 

During 2005 the company has made long-term investments detailed as follows: 

• Purchase of all the shares of the company under Rumanian law Lake View Impex S.r.l., booked to 

the financial statement at the purchase price of 402,000 euro; 

• Setting-up on the 3 rd of November 2005 of the company under Dutch law Dmail Store B.V., with 

share capital of 100,000 euro, of which the company holds a 60% share. Such partnership is 

booked to the financial statement as of 31/12/2005 for 60,000 euro. The minority shareholder 

is represented by the quoted Dutch company DocData B.V. 

With reference to the already held partnerships on 31/12/2004, the company has provided to modify 

the partnerships listed here below: 

• CAT Import Export S.p.A.: the partnership booking value has been increased by 2,081,000 euro. 

Following such increase it now shows-up on the financial statement as of December 31 st 2005 

for 10,551,000 euro. The increased recorded cost as regards to 31/12/2004 is related to the 

assignment of an interest-bearing financing credit, granted by Dmail Group S.p.A. to its 

controlled company, to net assets reserve. 

• DMedia Group S.p.A. Unipersonale: the partnership recorded value has been increased by 

5,631,000 euro. Following such increase it now shows-up in the financial statement as of 

December 31 st 2005 for 13,302,000 euro. The increase with respect to 31/12/2004 is related 

to the assignment from Dmail Group S.p.A, of 43% of Gidiemme Stampa S.r.l., finalized through 

91

the March 14 th 2005 deed. As a result of this assignment, the company has increased the value 

of its partnership held in DMedia Group S.p.A. unipersonale. 

During 2005 the company sold its 29% share held in D-Store S.r.l. Unipersonale for 174,000 euro. 

PERFORMANCE OF THE CONTROLLED COMPANIES 

D-MAIL S.r.l. 

Is the Group's company whose business purpose is to market products "useful ideas and not easy to find" 

through differentiated sales channels. During 2005 the company focused on the traditional mail-order 

selling business, trying to improve its marketing penetration and increase turnover by mainly investing in 

advertising and promotion. The company has continued its control activity in order to increase the 

operational controls' efficiency and corporate procedures' functionality. The 2005 result reached 

632,000 euro and the manufacturing value equalled 19,476,000 euro. 

On January 5 th 2005 Otto S.r.l. was set-up with a share capital of 40,000 euro of which D-Mail S.r.l. 

holds 50% of the shares. Purpose of this company is to provide transportation and mail services to D- 

Mail S.r.l., the other partner and third parties, so as to essentially exploit the synergies between the two 

partner founders. 

In order to increase penetration into the strongly growing European markets, Dmail Direct S.r.l. 

(Rumania) was set-up on January 25 th 2005 of which D-Mail S.r.l. holds 70% of the share capital. The 

aim is that of replicating the Italian model in that country. 

CAT IMPORT EXPORT S.p.A. 

Is the Group's company controlling the third party retail channel which can count on a strong capillary 

distribution network made-up by more than 2,000 sales points supplied by its own sales force. 

The company can count on a real capacity, acquired in ten years of experience, for selecting and finding 

the products; Furthermore, the 200 conventionalized technical assistance centres represent a strong 

barrier to entry. CAT closed 2005 with a positive result of 625,000 euro and a manufacturing value of 

10,745,000 euro. 

D-STORE S.r.l. 

In 2005, following the transfer on October 28 th 2004 of the company branch relating to the Milan, 

Rome, Genoa and Turin shops to the associated D-Mail S.r.l., the company hasn't operated anymore. 

We must recall, however, that the same company has focused on finding new business areas for 

92

developing its activity and this process is believed to reach completion during the course of the 2006 

period. 

DMEDIA GROUP S.P.A. 

DMedia Group S.p.A. is 100% controlled by Dmail Group S.p.A. During 2005 the company has run the 

service activity for the whole "Local Media" group and has extended the same to other companies of the 

group providing services of administrative and logistic nature and has put at disposal its own financial 

resources providing for the purchasing centralization of paper for the newspapers' printing and for the 

press services. Since 2005 it has also started a services activity relating to the diffusion and distribution of 

newspapers as a result of the assignment received for managing some headings. 

The "Local Media" group shows a net consolidated result of 417,000 euro a gross operational margin of 

1,961,000 euro and overall revenues of 16,946,000 euro. 

During 2005 DMedia Group S.p.A. transferred the partnership it held in the Brown Editore S.p.A. 

company because no more considered strategic to the group. 

GIDIEMME STAMPA S.R.L. 

The company, which has operated for more than twenty years in the publishing and advertising fields with 

circulation throughout the Lombardy territory, has been merged through incorporation into DMedia 

Group S.p.A., through a deed signed on the 9 th of November 2005, under the hand and seal of Filippo 

Zabban, notary in Milan, with back-dated accounting and fiscal effects to the 1 st of January 2005. 

RESEARCH AND DEVELOPMENT ACTIVITIES 

The activities of research and development are carried out within the areas of activity assigned to the 

controlled companies. 

FINANCIAL MANAGEMENT 

The company operates through ordinary-kind bank credit lines exclusively and has recourse to no implicit 

and explicit derivative financial instrument. 

93

ADOPTION OF IAS/IFRS ACCOUNTING PRINCIPLES 

Dmail Group S.p.A. has adopted the international accounting principles, International Financial 

Reporting Standards (IFRS), when drawing the Dmail Group's consolidated financial statement starting 

from the 2005 period, and the transition date to the IFRS has been January 1 st 2004. The last 

consolidated financial statement drawn following the Italian principles was that relating to the period 

ending on December 31 st 2004. 

In the 2005 consolidated financial statement, the comparative data of the corresponding 2004 periods 

have been re-determined following the international accounting principles; The document attached to the 

Consolidated Financial Statement "Transition to the (IFRS) accounting principles" illustrates the effects, 

following adoption of the IFRS, on the values as of 31/12/2004 which at that time had been published 

and drawn according to the Italian accounting principles. Reference is made to that document also for 

the effects, following the adoption of the IFRS, on the Dmail Group's financial position at the date of 

transition (January 1 st 2004), on the 2004 profit and loss account and on the choices taken during the 

first implementation. 

RELATIONSHIP WITH ASSOCIATED CONTROLLED COMPANIES AND CORRELATED PARTIES 

As of 31/12/2005 Dmail Group S.p.A. holds direct partnerships in the following companies: 

D-Mail S.r.l. for 100% 

Cat Import-Export S.p.A. for 100% 

D-Store S.r.l. for 71% 

DMedia Group S.p.A. for 100% 

Lake View Impex S.r.l. for 100% 

Dmail Store Bv for 60% 

The main income, assets and financial relations set-up by Dmail Group S.p.A. with controlled and 

associated companies can be summarized as follows (values are expressed in thousands of euros): 

COMPANY COSTS REVENUES DIVIDENDS 

94 

FINANCIAL 

INCOME 

COMMERCIAL 

CREDITS 

FINANCIAL 

CREDITS 

COMMERCIAL 

DEBTS 

DMedia Group S.p.A. 130 145 103 2.230 24 

Promotion Merate S.r.l. 3 3 

Promotion Digitale S.r.l. 20 10 

Dmail S.r.l. 6 22 

Lake View Impex S.r.l. 15 

D-Store S.r.l. 50 40 

Cat Import Export S.p.A. 1 1.711 17 792

RELATIONSHIP WITH CORRELATED PARTIES 

Pursuant to principle n. 24 of the (I.A.S.) international accounting we certify that the following entities are 

considered as correlated parties to Dmail Group S.p.A.: 

• The Board of Directors' members and possible companies in which single members hold a 

controlling or connection-kind partnership; 

• Individuals holding a partnership in the Company. 

For these purposes we certify the share partnerships situation as of 31/12/02005: 

• Members of the Board of Directors and possible companies in which single directors hold a 

controlling partnership: 

Banfort Consultadoria e Servicos l.d.a. which as of 31/12/2005 holds 11,12% of the share 

capital of Dmail Group S.p.A., is controlled by Gianluigi Viganò (Managing Director) 

• Individuals holding a share partnership in Dmail Group S.p.A. which have been appointed, even 

if for just a fraction of a year, as director, auditor or general manager and that of the companies 

controlled by the same: 

NAME AND SURNAME FUNCTION 

N° OF SHARES AS 

OF 31.12.04 

95 

N° OF SHARES 

PURCHASED 

N° OF SHARES 

SOLD 

N° OF SHARES AS 

OF 31/12/2005 

Ferrario Giancarlo Director (1) 306.977 241.534 65.443 

Gino Arancini Director (1) 400 400 

Giuliano Vaccari Director 45.440 45.440 

Maurizio Valliti Director 64.500 64.500 

Luca Mario de Martini 

independent 

Director (2) 

6.000 6.000 

Gianluigi Viganò Managing Director 700 306.977 242.234 65.443 

(1) in charge till 4th of May 2005 

(2) in charge since 4th of May 2005 

TREASURY SHARES 

With reference to points 3) and 4) of art. 2428 of the Italian civil code, we evidence that the Company, 

during 2005, has purchased treasury shares for an overall number of 94,750 equal to 1.2% of the share 

capital and corresponding to a face value of 189,000 euro and an actual value of 863,000 euro. 

On the matter, we need to remind that the company was authorized to carry-out operations on the 

treasury shares by the Dmail Group S.p.A. Ordinary Assembly held on January 25 th 2005, under the 

hand and seal of the notary Cambi in Bagno a Ripoli, who deliberated the Authorization to purchase and 

dispose of treasury shares, pursuant to the combined provisions of art. 2357 and 2357-ter of the Italian 

civil code and art. 132 of the February 24 th 1998 Legislative Decree n. 58.

During 2005 the companies controlled by Dmail Group S.p.A. haven't purchased or sold shares of the 

controlling company and held none as of the 31 st of December 2004. 

RELEVANT EVENTS AFTER THE PERIOD'S CLOSING 

No relevant events were evidenced after the financial statement closing date. 

EXPECTED MANAGEMENT PERFORMANCE 

Upon completion of the group's reorganization foreseen for the end of the first half of 2006, the 

company intends to focus on acquiring new companies considered strategic and compatible with the 

business of the group companies in order to implement synergies with the existing realities. 

OTHER INFORMATION 

MANDATORY BANK MONEY AND ACCOUNTING DOCUMENTS VALID EXTERNALLY 

The financial statement as of December 31 st 2005 has been drawn using the Euro bank currency. 

ADOPTION OF THE SELF-DISCIPLINE CODE 

The Company Statute contains provisions which directly assimilate provisions of the Quoted companies' 

Self-discipline Code. 

Furthermore, In order to assimilate what prescribed by the Quoted Companies' Self-discipline Code, on 

May 4 th 2005 the Assembly appointed as independent Directors Luca Mario De Martini and Andrea 

Zanone Poma. 

During the May 12 th 2005 Board meeting were appointed as members of the "Compensation 

Committee" the independent directors Luca Mario De Martini and Andrea Zanone Poma and the non 

operating director Maurizio Valliti (with functions of information and transparency in relation to the 

means and determination of the compensations to the Board members. 

The same Board appointed, as members of the "Internal Control Committee" (with functions for ensuring 

the functionality and adequacy to the internal control system), the independent directors Luca Mario De 

Martini, Andrea Zanone Poma and the non operating director Mario Volpi. Mrs. Luisa Fabiani was 

appointed as responsible of the committee. 

The Board has also acknowledged as person "responsible for the relations with the institutional investors 

and the other partners" the Chairman and Managing Director Aldo Maria de Carolis. 

96

ADOPTION OF THE CODE ON BEHAVIOUR ON MATTERS OF "INTERNAL DEALING" 

The Board meeting held on August 5 th 2004 approved an update to the pre-existing Code on Behaviour 

on matters of "Internal Dealing" drawn in compliance with what prescribed by art. 2.6.3 and subsequent 

articles of the "Ruling of the New Market organized and managed by the Borsa Italiana S.p.A." and by 

sect. IA.2.14 of the relative instructions. 

The Code on Behaviour complies with the quantitative thresholds and terms established by Borsa Italiana 

in the aforementioned Ruling for identifying and communicating to the market the operations made by 

the "relevant persons" on the quoted financial instruments issued by the Company and prescribes 

precisely: 

• the timely information by the relevant person to the person in charge on all the operations made 

on the company's financial instruments, whatever be their amount; 

• the communication to the market of the above operations when equal to or in excess of 50,000 

euro, within ten open market days from the end of each calendar quarter; or 

• the communication to the market of operations equal to or in excess of 250,000 euro, the 

moment the relevant person gets informed that these operations have been accomplished. 

Prescribes furthermore: 

• the prohibition of accomplishing operations on Company financial instruments during the 30 

days prior to the approval of the period draft financial statement and six months report, and 

during the 15 days prior to the approval of the quarterly reports; 

• the obligation of communicating sales operations on financial instruments deriving from the 

contextual exercising of subscription or purchase options within the stock option plans context. 

The "relevant persons" addressees of the Code have been identified: 

• in the directors, auditors, finance manager and, when appointed, the Company general 

managers; 

• in the directors, auditors and, when appointed, general managers of the Main Controlled 

companies, considering as such the companies of the Dmail Group with revenues in excess of 5 

million euro. 

We must furthermore point out that the new code on Internal Dealing behaviour will be in force from 

April 1 st 2006, drawn in accordance with the ruling contained at art. 114, sub-paragraph 7, TUF, 

currently in force, and related ruling provisions as referred to by art.152-sexies, 152-septies and 152- 

octies of the "Regolamento Emittenti", as amended by the 15232/2005 Consob deliberation. 

97

Implementation of the aforesaid procedure will be given notice of in the Corporate Governance Report 

for the 2006 period. 

PERFORMANCE OF THE DMAIL GROUP S.P.A. SHARE 

As for the share's performance, reference is made to the related paragraph contained in the consolidated 

financial statement management report. 

SHAREHOLDERS' AGREEMENT 

As of December 31 st 2005 the members of the shareholders' agreement held the following share 

partnerships: 

n. of shares held 

98 

% on Dmail share 

capital 

n. of audited 

shares 

% on total n. of 

audited shares 

Banfort Consultadoria e Servicos Lda 850,621 11,12 850,621 29,78 

Lumbini S.r.l. 752,744 9,84 752,744 26,35 

Smeraldo S.rl 624,254 8,16 624,254 21,86 

Norfin S.p.A 628,582 8,21 628,582 22,01 

Total 2,856,201 37,33 2,856,201 100,00 

ADOPTION OF THE PROGRAM-RELATED DOCUMENT FOR SECURITY 

Pursuant to the attachment B, point 26, of the n. 196/2003 Legislative Decree containing the code on 

matters of private information, the directors acknowledge that the company has made the Programrelated 

Document on Security operational for the measures on matters of safeguard of private 

information, in the light of the provisions introduced by the n. 196/2003 Legislative Decree following the 

terms and ways indicated herein. 

PROPOSAL ON THE OPERATING RESULT'S ALLOCATION 

The Board of Directors will propose at the Assembly to assign the 2005 period profit of 795,611 euros: 

• as for 765,000 euro to dividend, in the measure of 0.10 euros per share which, taking into 

account the shares holding rights pursuant to the Italian civil code, will increase proportionally 

due to the treasury shares held by the company. Detachment of coupon n.3 is fixed for the 22 nd 

of May 2006 with value as of May 25 th 2006; 

• as for 30,611 euro to extraordinary reserve. 

For the Board of Directors 

The Chairman 

Adrio Maria de Carolis





FINANCIAL STATEMENT AS OF 31/12/2005 

99

B I Intangibles 


ASSETS 

100 

31/12/2005 

31/12/2004 

1 Installation and development costs 4,491 813 

2 Costs for research, development and advertising 

3 Industrial patent rights 33 72 

6 Fixed assets in course of acquisition and advance payments 40,000 

7 Other 4,579 5,724 

II Tangibles 

TOTAL 49,103 6,609 

2 Plant and machinery 319 319 

4 Other goods 27,630 13,660 

TOTAL 27,949 13,979 

III Long-term investments 

1 Partnerships in: 

a) companies under control 29,670,278 21,670,120 

2 Due from: 

C II Credits 

a2) enterprises under control (beyond 12 months) 2,630,000 3,830,000 

d1) others (within 12 months) 460,088 

d2) others (beyond 12 months) 516 

TOTAL 32,300,794 25,960,208 

TOTAL FIXED ASSETS 32,377,846 25,980,796 

1 loans to customers (within 12 months) 55,667 6,237 

2 loans to controlled companies (within 12 months) 950,748 703,098 

Loans to controlled companies (beyond 12 months) 181,151 

4 bis Tax credits (within 12 months) 771,656 650,074 

4 ter Anticipated tax (within 12 months) 505,850 570,949 

Anticipated tax (beyond 12 months 1,404,194 1,210,083 

5 Due from others (within 12 months) 40,519 249,907 

TOTAL 3,728,635 3,571,499 

III Disposable financial activities 

2 Partnerships in associated enterprises 100,000 

5 Treasury shares 863,879 

6 Other shares 

IV Liquidity 

TOTAL 863,879 100,000 

1 Bank and post office deposits 61,008 704,213 

3 Money and cash on hand 145 505 

D Adjustment accounts 

TOTAL 61,153 704,718 

TOTAL WORKING CAPITAL 4,653,667 4,376,217 

a Accrued income and prepaid expenses 65,260 22,369 

TOTAL 65,260 22,369 

TOTAL ASSETS 37,096,773 30,379,382

A Net assets 


LIABILITIES 

101 

31/12/2005 

31/12/2004 

I Share capital 15,300,000 12,900,000 

II Share –premium reserve 13,938,122 14,577,902 

IV Legal reserve 3,060,000 

V Reserve for treasury shares in portfolio 863,879 

VII Other reserves, indicated separately 

a) extraordinary reserve 248,431 

b) other Reserves 1 

IX Profit/(loss) for the period 795,611 1,066,770 

TOTAL 34,206,043 28,544,673 

B Risk and contingency funds 

3 Other provisions 150,000 

TOTAL 150,000 

C Subordinate employment severance indemnity 5,106 12,644 

D Debts 

4 due to banks (within 12 months) 2,165,392 

7 due to suppliers (within 12 months) 637,085 751,839 

9 due to controlled enterprises (within 12 months) 59.155 842,570 

12 tax debts (within 12 months) 4,837 12,826 

13 Due to social welfare instit. (within 12 months) 3,448 10,597 

14 Other debts (within 12 months) 12,000 53,908 

TOTAL 2,881,917 1,671,740 

E Accrued expenses and deferred income 

1 accrued expenses and deferred income 3,707 325 

TOTAL 3,707 325 

TOTAL LIABILITIES 37,096,773 30,379,382 


Sureties 16,612 249,060 

Other suspense accounts 85,359 17,491 

TOTAL 101,971 266,551

A MANUFACTURING VALUE 

PROFIT AND LOSS ACCOUNT 31/12/2005 31/12/2004 

1 Revenues from sales and services rendered 55,700 176,671 

5.01 Other revenues and income 52 

TOTAL 55,752 176,671 

B MANUFACTURING COSTS 

6 Raw, subsidiary, consumer materials and goods 8,816 1,520 

7 Services 1,219,673 790,353 

8 Enjoyment of third party goods 120,256 43,746 

9 Staff: 

a) wages and salaries 68,289 102,972 

b) social security contributions 13,599 27,258 

c) severance indemnity 4,528 8,455 

10 Depreciations and devaluations 

a) intangibles 3,119 524,801 

b) tangibles 3,909 2,250 

14 Sundry operating charges 21,845 8,266 

TOTAL 1,464,034 1,509,621 

DIFF. BETWEEN MANUFACTURING VALUE AND COSTS (1,408,282) (1,332,950) 

C FINANCIAL PROCEEDS AND EXPENSES 

15 from partnerships 

1 in controlled enterprises 1,711,000 667,000 

16 Other financial proceeds 

a From credits booked in fixed assets 

due from controlled companies 119,133 

d Proceeds other than the previous 

due from companies under control 161,888 

due from other companies 3,091 15,541 

17 Interest and other financial expenses 

v. other companies (55,983) (34,445) 

TOTAL 1,819,996 767,229 

D FINANCIAL ACTIVITIES VALUE ADJUSTMENTS 

19 Devaluation of: 

a) partnerships (164,211) 

TOTAL (164,211) 

E EXTRAORDINARY PROCEEDS AND EXPENSES 

20 Proceeds 

a) capital gains from transfers 6,000 

b) other 11,705 

21 Expenses 

a) capital losses (110,000) 

c) other (174,829) (414,777) 

TOTAL (157,124) (524,777) 

PROFIT BEFORE TAXES 254,590 (1,254,709) 

22 Taxes relating to the period 

b) deferred and anticipated 541,021 2,321,479 

TOTAL 795,611 2,321,479 

23 PROFIT/(LOSS) FOR THE PERIOD 795,611 1,066,770 

102

Reclassified Profit and Loss Account on the basis of the 127/91 

Legislative Decree layout 

(CONSOB Communication n. 94001437 of February 23rd 1994) 

(Values in Euros) 

FINANCIAL PROCEEDS AND EXPENSES 

As of 31/12/2005 As of 31/12/2004 


a) from controlled enterprises 1,711,000 667,000 

2) Other financial proceeds 

a) from credits booked in fixed assets 

- from controlled enterprises 119,133 

d) proceeds other than the previous 

- from controlled enterprises 161,888 

- from other enterprises 3,091 15,541 

3) Interest and other financial expenses 

- from others (55,983) (34,445) 

Total financial proceeds and expenses (1 + 2 +3) 1,819,996 767,229 

FINANCIAL ACTIVITIES VALUE ADJUSTMENTS 

4 Revaluations 

a) of partnerships 

5 Devaluations 

a) of partnerships (164,211) 

Total financial activities value adjustments (4 + 5) (164,211) 

6 OTHER OPERATING INCOME 55,752 176,671 

OTHER OPERATING COSTS 

7 Services (1,219,673) (790,353) 

8 Enjoyment of third party (120,256) (43,746) 

9 Staff: 

a) wages and salaries (68,289) (102,972) 

b) social security contributions (13,599) (27,258) 

c) severance indemnity (4,528) (8,455) 

e) other costs 

10 Depreciations and devaluations 

a) fixed assets depreciation (3,119) (524,801) 

b) fixed assets depreciation (3,909) (2,250) 

12 Other provisions 

13 Sundry operating charges (30,661) (9,786) 

Total operating costs (1,464,034) (1,509,621) 

PROFIT (LOSS) OF ORDINARY ACTIVITIES 411,714 (729,932) 

EXTRAORDINARY PROCEEDS AND EXP. 

14 Proceeds 17,705 

15 Expenses (174,829) (524,777) 

EXTRAORDINARY PROFIT (LOSS) (14 - 15) (157,124) (524,777) 

PROFIT BEFORE TAX 254,590 (1,254,709) 

16 Income tax for the period 541,021 2,321,479 

PROFIT (LOSS) FOR THE PERIOD 795,611 1,066,770 


The Chairman 


103





SUPPLEMENTARY NOTE TO THE FINANCIAL 

STATEMENT AS OF 31/12/2005 

104

1) ACTIVITIES AND STRUCTURE OF THE GROUP 

Dmail Group S.p.A. is the holding company which as of December 31 2005 

controls directly and indirectly the other companies as illustrated in the table below: 

SHARE 

MEDIA COMMERCE 

CAPITAL 

D-Mail S.r.l. unipersonale 

Via Aretina , 25 - Pontassieve (Fi) 


D-Store S.r.l. 



110,000 

Cat Import Export S.p.A. 

Unipersonale 

Via A. Moro, 41 – Bomporto (Mo) 

100% trough Dmail Group S.p.A. 1,000,000 

D-Mail Venda Directa S.A. 

Lisbon – Portugal 

70% through D-Mail S.r.l. unipersonale 

155,000 

Otto S.r.l. 

Via Grazia Deledda, 14 

06073 – Corciano (PG) 

50% through D-Mail S.r.l. unipersonale 155,000 

Dmail Direct S.r.l. 

Str. Vasile Lascar, 126 

Sect- 2 – Bucharest (Rumania) 

70% trough D-Mail S.r.l. unipersonale 11,102 

Dmailstore B.V. 

Energieweg, 2 

Waalwijk (Holland) 


Lake View Impex S.r.l. unipersonale 

Bd. Natiunile Unite Nr 4, Bl. 106 

Bucharest (Rumania) 


OTHER PARTNERSHIPS 

SHARE CAPITAL 

Publitorino S.r.l. 

Corso Galileo Ferris, 134 – Turin (TO) 

20% through DMedia Group S.p.A. 

unipersonale 26,000 

A.P.V. S.r.l. 

Via Mazzini 69d – Sondrio 

10% through DMedia Group Spa 

unipersonale. 

SHARE 

LOCAL MEDIA 

CAPITAL 

D-Media Group S.p.A. unipersonale 



Giornale di Merate S.r.l. 




Promotion Merate S.r.l. 




Editrice Valtellinese S.r.l. 

Via Carlo Alberto, 11 - Monza 

40% through DMedia Group S.p.A. unip. 



Publisette S.r.l. unipersonale 

Via Castelli Fiorenza 34 - RHO (MI) 



Promotion Digitale S.r.l. 




Editrice Vimercatese S.r.l. unipersonale 

Via Cavour 59 - Vimercate (MI) 


15,600 

Editrice Lecchese S.r.l. 




Promotion Lecco S.r.l. 



Antares Editoriale S.r.l. unipersonale 

Via G.Paglia, n. 4 - Bergamo 



D-Stand 10 S.a.s. 

Via De Gasperi 135 – Merate (LC) 

99% through Antares Editoriale S.r.l. 


Editrice La Martesana S.r.l. unipersonale 




105 

LOCAL MEDIA 

SHARE CAPITAL 

Publiest S.r.l. unipersonale 




Promotion Sondrio S.r.l. 



unipersonale 10,000

2) ACCOUNTING PRINCIPLES AND EVALUATION CRITERIA 

The financial statement as of December 31 st 2005 consists of the Statement of Assets and Liabilities, the 

Profit and Loss Account and the Supplementary Note which is part of the above and cannot be separated 

pursuant to art. 2423 of the Italian C.C. 

The Statement of Assets and Liabilities and the Profit and Loss Account are the result of the accounting 

entries held as per law and in compliance with the ruling provisions on the matter and have been drawn 

on the basis of the principles illustrated here below: 

a) when drawing the period financial statement, pursuant to art. 2423, 2423 bis and 2426 of the 

Italian C.C. principles of caution have been applied in the expectation of the activity to continue, 

of temporal and economic competence and the general principle of continuity when 

implementing the items' evaluation and exposure criteria, and, when not in contrast with the 

specific law provisions, the assets and liabilities items have been evaluated privileging substance 

to form. 

b) the Italian Civil Code articles recalled in the present supplementary note are those relative to the 

new law in force since January 1 st 2004, as amended by the reform on corporate matters by 

means of the n. 6 Legislative Decree of 2003 and subsequent amendments. 

c) possible events occurred after the closing of the period have been taken into account when 

determinant as regards to risks or losses pertaining to the period ended on December 31 st 2005. 

d) the financial statement drawn in this way represents in a clear, correct and true manner the assets 

and financial standing of the company and its profit and loss situation for the period. 

e) in order to classify the profit and loss account's expenses and income, reference has been made 

to the Interpretation Document n. 1 of the "Interpretations" series of the Accounting Principle n. 

12 of the "Consiglio Nazionale dei Dottori Commercialisti e Ragionieri della Commissione per la 

Statuizione dei Principi Contabili", in the version reviewed by the Italian Accounting Body (OIC 1). 

One is to furthermore point out that, given the new financial statement layout, the possible items 

of the period which are not comparable with those of the prior financial statement period have 

been adapted and a detailed explanation of this issue will be provided later in the present 

supplementary note. 

106

f) pursuant to the provisions as referred to by art. 2427 bis of the Italian C.C., it is to be noticed 

that the company holds no derivative-kind financial instruments and no long-term investments 

booked in the financial statement other than those held in compliance with art. 2359 of the C.C. 

in controlled and associated companies. 

The evaluation criteria used when drawing the financial statement have been the following: 


Intangible assets represent costs and expenses, the utility of which covers several years, booked at their 

purchase costs and subject to straight-line depreciation, according to the expected period of future use of 

the specific charges, or in the absence, for a period not exceeding five years. 

The application software bought in property or as license, when intended to improve the use of the basic 

software, is considered an integral part of the related category. The depreciation, intended as expected 

period of utility of such costs covers only 3 years, given the high technological obsolescence of these 

goods. 

The installation and development costs relate to the costs incurred by the company when it was set-up 

and to all the later charges related to the quotation process and are depreciated on a five year basis. 

Advertising costs of extraordinary and non recurrent nature, considered pertinent to more periods, are 

capitalized and depreciated on a three year basis. 

The intangibles' value at the closing date of the period is not lower as regards to that determined 

following the abovementioned criteria, with clear reference to their contribution to the future production 

of economic results, to their predictable useful life and, as important it may be, to their market value. 

Tangible assets 

Tangible assets are booked at their purchase cost. 

The tangible assets' depreciation is calculated systematically on the basis of the economic-technical 

quotas determined in relation to the residual possibility of using the goods, in compliance with what 

stated by art. 2426, sub-paragraph 1, n. 2 C.C. In the period in which the asset is purchased a 50% 

depreciation is applied. The tangible assets' value at the period's closing date is not lower as regards to 

that determined following the abovementioned criteria, with clear reference to their contribution to the 

future production of economic results, to their predictable useful life and, as important it may be, to their 

market value. 

107

The depreciation period by category is the following: 

Category Years 

Standard installations 10 

Specific installations 10 – 5 

Electronic office machines 5 

Furniture and fittings 9 

Lorries 5 

Computers 5 

Equipment 7 

Motor vehicles 4 

Mobile phones 5 

Standard maintenance expenses are fully charged to the profit and loss account. Maintenance and repair 

expenses which significantly increase the estimated useful life of a specific good or that do not however 

consume their usefulness within the period, are capitalized and depreciated according to the assets plan 

to which they refer to. 

Long-term investments 

Partnerships are booked at purchase price adjusted downwards following possible permanent losses in 

value. 

Credits which represent fixed assets are valued at their expected salvage value. 

Credits 

Credits appear at their presumable salvage value, which in this specific case is equal to the face value. 

Liquidity 

Liquidities are booked at their face value. 

Adjustment accounts 

The adjustment accounts entries reflect shares of expense and income, pertaining to two or more 

periods, the amounts of which change depending on the lapse of time. 

Net Assets 

108

The share capital is booked at face value according to the bank money. Reserves are listed separately 

with specific reference to their origin, possibility of use and distribution, and their actual use during prior 

periods. 

Income tax 

Starting from the period ended on December 31 st 2005, the company complied, as also the controlling 

company, with the consolidation-based taxation procedure ex art. 117 and following of the 917/1986 

PDPR, together with the controlled companies DMail S.r.l., D-Store S.r.l. and CAT Import Export S.p.A., 

this last already physically consolidated since the prior fiscal period. As regards, in fact, to such last 

controlled company, Dmail Group S.p.A. as the controlling company, has already complied with the 

consolidation-based taxation procedure since the period ended on December 31 st 2004. 

The company determines the Group's IRES according to the option expressed, by offsetting its own fiscal 

result with the positive and negative taxable results of the other interested companies. 

The economic relations between the companies adhering to the consolidation-based taxation procedure 

and which are ruled through a specific agreement stipulated by the parties, are the following: 

• The controlled companies which transfer to the fiscal group positive taxable amounts must 

transfer the financial resources corresponding to the due tax amount. 

• The controlled companies which transfer a negative result are entitled to receive from the 

Consolidating company an amount equal to the product of the IRES rate in force and the 

transferred fiscal loss. 

Deferred and anticipated taxes (IRES and/or IRAP) are calculated on the basis of the existing temporary 

differences between the value attributed to the assets and liabilities according to the statutory criteria and 

that according to the fiscal ones. Anticipated taxes are, furthermore, calculated on the fiscal losses that 

can be carried forward. In observance with the accounting principle of caution when drawing the period 

financial statement, anticipated taxes are booked on the presumption of a reasonable certainty of 

realizing in the future positive taxable results capable of absorbing the previously mentioned temporary 

differences as well as the previous fiscal losses that can be carried forward. 

Deferred taxes are entered to the financial statement's voice "B) 22) for also deferred taxes" which is 

booked in liabilities among the Risk and contingency funds, whilst anticipated taxes are booked as 

increases to the working capital's credits at voice "C) II 4-ter anticipated taxes". 

109

Severance indemnity provision for subordinate employment 

The severance indemnity provision for subordinate employment represents the actual accrued amount 

due to all the employees at the closing date of the period, net of the advances paid, calculated in 

accordance with the law, labour contracts and possible agreements with the company, ex art. 2120 C.C. 

Debts 

Debts are booked at their face value 

Risks, commitments, guarantees 

Commitments and guarantees appear in the suspense accounts at their face value. 

Booking of revenues and proceeds and of costs and charges 

The revenues and proceeds, costs and charges are booked to the financial statement on an economic 

accrual basis, excluding the unrealized profits and taking into account the risks and losses matured 

during the period, even if known only later. 

3) INFORMATION ON THE COMPOSITION AND MOVEMENTS OF ENTRIES OF THE STATEMENT OF 

ASSETS AND LIABILITIES 

The asset and liability-related entries show-up in euros together with the main changes impacting the 

overall amounts of the assets and liabilities. 

The in detail statements attached to the present note complete the information. 

ASSETS 

A) DUE FROM PARTNERS FOR PAYMENTS STILL DUE 

No amounts appear. 


The attached statement evidences the fixed assets movements and provides for each entry the elements 

required by art. 27 of the Italian Civil Code. 

110

B I – Intangible assets 

The intangible assets movements occurred during the 2005 period are shown In the table below. 

CATEGORY 

Net Value 

31.12.2004 

Increases during 

the period 

111 

Decreases during 

the period 

Period depreciations 

Net value 

31.12.2005 

Installation and quotation expenses 813 5,614 1,936 4,491 

Software 72 39 33 

assets in course of acquisition and 

advance payments 40,000 40,000 

Other intangible assets 5,724 1,145 4,579 

Total 6,609 45,614 3,120 49,103 

During the 2005 period the Company has made investments in software for 40,000 euro needed for 

drawing the consolidated financial statement booked at the entry: assets in course of acquisition and 

advance payments. 

The other intangible fixed assets refer to improvements made in the Milan office in Via Ripamonti 89 

incurred during the prior periods. 

B II – Tangible assets 

By analysing the attached table below one can notice all the tangible assets movements. 

CATEGORY 

Electronic 

machines 

Computers 

Installations 

Furniture 

and fittings 

Mobile 

phones 

Total 

Balance 

01/01/2005 

3,081 

6,719 

355 

8,189 

359 

18,703 

Historical cost Depreciation fund 

Increases 

during the 

period 

4,094 

6,050 

8,015 

238 

18,397 

Decreases 

during the 

period 

274 

302 

576 

Balance 

31/12/2005 

6,901 

12,769 

355 

16,204 

295 

36,524 

Balance 

01/01/2005 

485 

3,642 

36 

491 

70 

4,724 

Increases 

during the 

period 

1,041 

1,369 

1,464 

35 

3,909 

The leasing agreements in force at the period's closing date are the following: 

Description of the 

good 

Agreement date 

of stipulation 

Length of the 

agreement 

months 

Theoretical 

historical 

cost 

Theoretical 

depreciation 

fund 

31/12/2005 

Theoretical 

depreciation 

year 2005 

Decreases 

during the 

period 

27 

30 

57 

Balance 

31/12/2005 

Debt (principal) 

as of 

31/12/2005 

1,499 

5,011 

36 

1,955 

75 

8,576 

Net balance 

31/12/2005 

5,402 

7,758 

319 

14,250 

220 

27,949 

Financial 

charges 2005 

Computers and 

accessories 

Furniture and 

13/08/2004 36 3,420 1,026 684 1,572 119 

fittings 04/11/2004 36 20,160 3,629 2,419 9,267 700 

Motor vehicle 21/02/2005 36 41,714 5,214 5,214 27,568 1,585 

Motor vehicle 30/09/2005 36 48,377 6,047 6,047 40,176 698 

113,671 15,916 14,364 78,583 3,102

B III – Long-term investments 

Partnerships 

The long-term investments are represented by partnerships in: 

Companies under control 

Value as of 

31/12/2004 

Increase Decrease Devaluations Reclassifications 

112 


31/12/2005 

D-Mail S.r.l Unipersonale 4,928,620 4,928,620 

Cat Import Export S.p.A. Unipersonale 8,469,893 2,081,151 10,551,044 

D-Store S.r.l. 600,000 174,000 426,000 

DMedia Group S.p.A. Unipersonale 7,671,607 5,630,760 13,302,367 

Dmail Store B.V. 60,000 60,000 

Lakeview Impex S.r.l. 402,427 402,247 

Total controlled companies 21,670,120 8,174,338 174,000 29,670,278 

Here following the detail of the partnerships in euro: 

Ownership 

% 

Share 

Capital 

Euro 

Value in 

the F.S. 

31/12/2005 

Value following adoption 

of the equity method as of 

31/12/2005 

F.S. net assets as of 

31/12/2005 

Operating 

result as of 

31/12/2005 

D-Mail S.r.l. Unipersonale 

- Florence 

Cat Import Export S.p.A. 

100 3,600,000 4,928,620 1,892,079 3,656,451 531,567 

Unipersonale – Modena 100 1,000,000 10,551,044 4,882,873 6,772,874 624,841 

D-Store S.r.l. – Milan 

DMedia Group S.p.A. 

71 110,000 426,000 237,551 555,142 (50,478) 

Unipersonale – Milan (1) 100 8,000,000 13,302,367 9,885,114 7,565,543 

Dmail Store B.V. – Holland 

Lakeview Impex S.r.l. – 

60 100,000 60,000 47,062 78,437 (21,563) 

Rumania 

Total companies under 

100 2,191 402,247 389,237 (3,515) (863) 

control 

(1) data referred to year 2004 

12,812,191 29,670,278 17,333,916 18,631,969 1,090,541 

D-Mail S.r.l. Unipersonale closed the period with a profit of 532,000 euro and a manufacturing value 

equal to 19,476,000 euro growing by 21.54% as regards to the prior period and showing a net 

operational result of 1,380,000 euro equal to 7.08% of the overall revenues. During 2005 the company 

made investments in intangible assets for 11,000 euro consisting mainly of application software and 

investments in tangible assets for 90,000 euro and relating to equipment, furniture and computers. 

CAT Import Export S.p.A Unipersonale closed the 2005 period with a profit of 625,000 euro and a 

manufacturing value equal to 10,745,000 euro dropping by 8.76% as regards to the prior period but 

maintaining however a good margin percentage which stands at 12.79%. During 2005 no particular 

investment has been made other than those intended to replace the goods that have become obsolete. 

D-Store S.r.l., after having transferred its own activity at the end of 2004, has focused on identifying new 

business areas where it can develop its operating capacity. On the matter, the company is awaiting to 

finalize during the course of 2006 its new industrial plan.

On January 25 th 2005 under the hand and seal of the notary Cambi in Bagno a Ripali the assignment of 

43% of the Gidiemme Stampa group for an amount of 5,561,000 euro into Dmail Group S.p.A. was 

finalized by issuing 1,200,000 share capital ordinary shares having a face value of 2.00 euro plus a unit 

share-premium of 2.6923 euro which generated an overall share capital increase of 2,400,000 euro 

and an increase in the share-premium reserve of 3,231,000 euro. 

DMedia Group S.p.A Unipersonale, holding company of the local media area, incorporated during 

2005 Gidiemme Stampa S.r.l. already under its control for 57%. 

Following the merge through incorporation, made without increasing the incorporating company's share 

capital, Dmail Group S.p.A. increased the book value of DMedia Group S.p.A. by 5,361,000 euro 

amount equal to that of the partnership in the incorporated company Gidiemme Stampa S.r.l. 

The said merger has been done in view of reducing the control chain which would be of great use in 

reorganizing the Group's structure in its whole. For DMedia Group S.p.A the merger has generated a 

merger deficit to be allocated to the single asset entries of the statement of assets and liabilities and to 

the "partnerships" entry in particular. The DMedia Group S.p.A. Board of Directors, after having heard 

also the opinion of the body in charge of controlling the accounting, has considered as being correct to 

subdivide the abovementioned merger deficit after the approval of the statements of assets and liabilities 

of the partially owned companies and therefore postpone the approval of its own statement of assets and 

liabilities till the latest delay between that prescribed by art. 2364 of the C.C: and that by art. 17.1 of the 

company by-laws. 

Dmail Store B.V, company under Dutch law, set-up on November 3 rd 2005, will dedicate itself in selling 

at distance the Dmail products on the European markets and will provide in outsourcing the Italian 

companies with the possibility of being present in Italy and at international level in the sale at distance 

and e-commerce sectors, so as to exempt them from having to make the heavy investments required by 

the sector. Dmail Group S.p.A. has underwritten 60% of the capital and the quoted Dutch company 

DocData B.V. which will supply the know-how relating to the logistics represents the minority partner. 

On December 20 th 2005 100% of the share capital of the company under Rumanian law Lakeview 

Impex S.r.l. was acquired. This company isn't operational and owns a building of commercial use in the 

centre of Bucharest set to become a new DMail sales point. The partnership book value appears to be in 

line and consistent with the commercial value of the said building. 

Credits 

113

Dmail Group S.p.A. holds the following credits due from enterprises under control and falling due 

beyond 12 months. 

Description 


31/12/2004 

Increases Reclassifications Decreases 

Long-term credit V/ CAT S.p.A. 2,081,151 (2,081,151) 

114 


31/12/2005 

Interest-bearing financing to DMedia Group S.p.A. 1,930,000 700,000 2,630,000 

Total 4,011,151 700,000 (2,081,151) 2,630,000 

The credit due from CAT Import Export S.p.A., originating from the sale of the D-Mail Retail S.p.A. 

shares, has been completely waived by the holding company on May 2 nd 2005 and converted in Net 

Assets. Following such operation, the company has increased , by the same amount, the CAT Import 

Export S.p.A partnership booking in its own financial statement. 

The financing granted to DMedia Group S.p.A. bears a fixed interest of 6% for the portion of financing 

granted in 2005, equal to 700 euros/000, as well as for the portion granted in 2004 and, finally, 6.75% 

on the residual portion of the financing granted in 2003. 

As of December 31 st 2005 Dmail Group S.p.A. holds a credit position for guarantee deposits for an 

overall amount of 516 euros. 

Dmail Group S.p.A. has extinguished during 2005 the financing granted to DMedia S.p.A and holds no 

credits due from other enterprises and falling due within 12 months, as shown in the table summary 

below. 

Description 


31/12/2004 

Increases Reclassifications Decreases 

Financing of D-Media S.p.A. 460,088 460,088 

Total 460,088 460,088 


C II – Credits 

Credits due from customers within 12 months 


31/12/2005 

At the current period's closing the company holds credits due from customers for an amount equal to 

56,000 euro against which no provisions have been accrued for possible collection risks, given that they 

are expected to be soon transferred at their face value during the first months of 2006. 

Credits due from Controlled companies within 12 months

Description 


31/12/2004 

D STORE S.r.l. Credit 162,651 40,259 

115 

Increases Decreases 


31/12/2005 

162,651 40,259 

Credit vs Lakeview Impex 15,434 15,434 

Cat Import Export S.p.A. unipersonale Credits 540,447 1,051,750 

800,008 792,189 

DMEDIA GROUP S.p.A. unipersonale Credits 102,866 102,866 

Total 703,098 1,210,309 

962,659 950,748 

The credit claimed from D-Store S.r.l., was originated by services given to the controlled company. 

The credits claimed from Cat Import Export S.p.A. , whose overall amount as of December 31 st 2004 

was 546,000 euro, have increased during 2005 reaching the overall amount of 792,000 euro and 

represent credit positions originating from the fiscal consolidation of the taxable amount of the company 

complying with the national "consolidato fiscale" in its position of consolidated company. The increase 

relates, as expressed in the above table, for 620,000 euro to the booking due to maturity of the 

controlled company's dividends and, for 432,000 euro to the credit related to the exercising of the 

"consolidato fiscale" option. The 800,000 euro decrease is ascribable to the closing of the balances of 

the positions inherent to the compliance with the national "consolidato fiscale" 

The credits due as of December 31 st 2005 from customers and controlled companies can be subdivided 

by geographical area as follows: 

Description EUROPE 

NORTH 

OF ITALY 

CENTER 

ITALY 

SOUTH OF 

ITALY 

Value as of 31/12/2005 

Credits Vs Lakeview Impex S.r.l. 15,434 15,434 

DMEDIA GROUP S.p.A. unipersonale Credits 

102,866 

102,866 

D-STORE S.r.l. Credit 40,259 40,259 

Credits v/ Cat Import export S.p.A. 

unipersonale 792,189 792,189 

Total 

Tax credits within 12 months 

Description 

15,434 143,125 792,189 950,748 


31/12/2004 

Increase Decrease 


31/12/2005 

Ires state treasury credits 418,176 7,095 411,075 

Irap state treasury credits 82,919 82,919 

Treasury/withholding credit 442 442 

Treasury/withholding tax 6 6 6 6 

VAT credit 148,973 274,179 145,938 277,214 

Total 650,074 274,627 153,039 771,656 

The IRES and IRAP originate from tax advances paid in 2004, which turned-out to be in excess as 

regards to the balancing taxes due for the same fiscal period. 

Credits for Anticipated Taxes within 12 months 

Description Value as of 31/12/2004 Increase Decrease Value as of 31/12/2005 

Anticipated Ires taxes 570,921 65,114 505,807

Anticipated Irap taxes 28 15 43 

Total 570,949 15 65,114 505,850 

Credits for Anticipated taxes beyond 12 months 


Anticipated Ires taxes 1,210,083 194,111 1,404,194 

Total 1,210,083 194,111 1,404,194 

The fact of maintaining in the current period financial statement the credits for anticipated taxes is 

justified by the introduction of the "Consolidato Nazionale fiscale", ex art. 117 TUIR, with which the 

company has complied, consolidating tax-wise the controlled companies Cat Import Export S.p.A. 

unipersonale, DMail S.r.l. unipersonale and D-Store S.r.l. Following the exercising of such option, we 

believe there is reasonable certainty in obtaining, during the future periods, taxable amounts sufficient to 

absorb the fiscal losses which can be carried forward. The IRES anticipated taxes considered recoverable 

within 12 months are those which refer to the temporary changes taking place during 2006, in addition 

to those which can be referred to the transfer, by the controlled company CAT Import Export S.p.A. 

complying with the national "consolidato fiscale" institution in its position of consolidated company, of an 

assumed taxable amount for 2006 equal to that transferred and attributed to the controlling company for 

the 2005 fiscal period. 

Anticipated – deferred taxes Differences 

Booked to the Financial Statement 

Anticipated taxes on temporary differences 

Temporary3 

1/12/2004 

Due from others within 12 months 

Fiscal 

impact 

Fiscal 

impact 

IRES release IRAP release Differences 

IRES IRAP 31/12/2005 31/12/2005 

116 

Temporary3 

1/12/2005 

Fiscal 

impact 

IRES 

33% 

Fiscal 

impact 

and 

IRAP 

4,25% 

Total 

anticipated 

taxes net of 

release 

Total 

anticipated 


release 

IRES IRAP 

Administrators compensations 90,000 29,700 (29,700) 224,279 74,012 74,012 

Entertainment expenses 

D-Store devaluation carried out 

652 215 28 (66) (8) 542 179 23 328 43 

in prior periods 

D-Mail S.r.l.unipersonale 

and D-Media S.p.A. depreciations 

319,764 105,522 (52,761) 52,761 

performed in prior periods 

Taxes anticipated on the 5% adjustment of 

2,884,515 951,890 (317,297) 634,593 

the non taxable dividends 33,350 11,005 (11,005) 

TOTAL A) 3,328,281 1,098,332 28 (410,829) (8) 224,821 74,191 23 761,694 43 

Anticipate – deferred taxes 

Anticipated taxes inherent to fiscal losses of 

Fiscal losses 

Fiscal 

impact 

Fiscal 

impact 

IRES release IRAP release Fiscal losses 

Fiscal 

impact 

Fiscal 

impact 

and 

Total 

anticipated 


release 

Total 

anticipated 


release 

the period and previous ones 3,706,420 1,223,119 2,659,527 877,644 2,100,763 

TOTAL B) 3,706,420 1,223,119 2,659,527 877,644 2,100,763 

TOTAL A) + B) 

Reduced anticipated taxes following transfer 

of the taxable basis of Cat Import Export 

7,034,701 2,321,451 28 (410,829) (8) 2,884,348 951,835 23 2,862,457 43 

S.p.A. uniperosonale 

Increase in credits for anticipated taxes 

following transfer of the fiscal loss of the 

(1,637,717) (540,447) (1,308,333) (431,750) (972,197) 

controlled company D-Store S.r.l. 59,821 19,741 19,741 

TOTAL C) 

(1,637,717) (540,447) (1,248,512) (412,009) (952,456) 

TOTAL A) + B) - C) 5,396,984 1,781,004 28 (410,829) (8) 1,635,836 539.826 23 1,910,001 43 

Of which within 12 months 505,807 43 

Of which beyond 12 months 1,404,194

The overall item amount is equal to 41,000 euro and refers to: credits due from the transferee of the 

partnership in Galassia S.r.l. for 40,000 euro, due from Inail, for 397 euro and guarantee deposits for 

122 euro. 

C III – Disposable of financial assets 

Partnerships 

On November 24 th 2004, Dmail Group S.p.A. stipulated a preliminary agreement for the sale of 

Galassia S.r.l. and, during the same 2004 period, the partnership value was equalized to that of the 

transfer. On May 19 th 2005 the transfer of the partnership in Galassia S.r.l. was finalized. 


Description 

31/12/2004 

Increase Decrease Revaluation Devaluation 

GALASSIA S.r.l. 100,000 (100,000) 

Total associated enterprises 100,000 (100,000) 

117 


31/12/2005 

On the present document's date of reference, Dmail Group S.p.A. showed in its own working capital 

94,750 treasury shares booked for a value of 864,000 euro, having a unit face value of 2 euro for an 

overall face value of 190,000 euro. 

Description 


31/12/2004 

Increase Decrease Revaluation Devaluation 


31/12/2005 

Treasury shares 863,879 863,879 

Total treasury shares 863,879 863,879 

C IV – Liquidity 

They represent cash on hand and current account active balances held by the company at the various 

credit institutes. The movements occurred during the 2005 period are summarized in the following table: 

Description Value as of 31/12/2004 Increase Decrease 


31/12/2005 

Unicredit 666,947 640,628 26,319 

C/securities c/o Banca Intesa 34,689 34,689 

Money and cash on hand 505 360 145 

Total liquidity 666,452 34,689 640,988 61,153 

D Accrued income and prepaid expenses

The detail and movements of these items are the following: 

Description Value as of 31/12/2004 Increase Decrease 

118 


31/12/2005 

Commissions 2,596 2,596 2,596 2,596 

Building rentals 10,375 10,375 

Other utilities 2,041 4,581 2,041 4,581 

leasing 4,010 12,369 4,010 12,369 

Technical assistance and services rentals 3,347 42,326 3,347 42,326 

Stamps and insurance 3,388 3,388 

Total 22,369 65,260 22,369 65,260 

The prepaid expenses for leasing rentals relate to leasing contracts for fittings, computers and motor 

vehicles stipulated during the 2005 period and the previous one. The prepaid expenses relating to 

assistance fees refer to software assistance and various services. 

LIABILITIES AND NET ASSETS 

A) NET ASSETS 

The detail of the net assets accounts is the following (Val. rounded to euro unit). 

Description 

Share 

Capital 

Share- 

premium 

reserve 

Legal 

Reserve 

Treasury 

shares 

reserve 

Other 

optional 

reserves 

Other 

reserves 

(round. 

euro) 

Dividends Operating 

Balances as of 

31.12.2004 12,900,000 14,577,902 1 1,066,770 28,544,673 

Share Capital increase 2,400,000 3,230,760 5,630,760 

Provisions to Legal 

Reserve (3,006,661) 3,006,661 

Provision to reserve for 

treasury shares in 

portfolio (863,879) 863,879 

Other (1) 765,000 764,999 

2004 profit allocation 53,339 248,431 (765,000) (1,066,770) 

Rel. 2005 Profit 


795,611 795,611 

31.12.2005 15,300,000 13,938,122 3,060,000 863,879 248,431 795,611 34,206,043 

Use possibilities B ABC B ABC ABC 

Available share 

15,300,000 

13,938,122 

3,060,000 

248,431 

Legend: A= for share capital incr.; B=for coverage of losses; C= for distribution to partners 

Result 

795,611 

As of December 31 st 2005 the share capital equals 15,300 euro and is made-up by 7,650,000 ordinary 

shares each with a face value of 2 euro. On April 11 th 2005 the Share Capital was increased by 

2,400,000 euro and the share-premium reserve was increased correspondingly by 3,231,000 euro. 

Totals

Following the purchase by the Company of treasury shares, in observance to what stated at art. 2357-ter 

of the Italian C.C., the reserve for treasury share held in portfolio was created for an amount equal to 

864,000 euro. 

On May 4 th 2005, during the assembly approval of the financial statement as of December 31 st 2004, it 

was decided to allocate the 2004 period profit as follows: 

- for 53,339 euro to Legal Reserve increase; 

- for 248,431 euro to Extraordinary Reserve increase; 

- for 765,000 to dividends of 0.10 euro per share. 

The changes to the net assets during the last periods have been the following: 

Description 

Share 

Capital 

Share-premium 

reserve 

Legal 

Reserve 

Treasury 

shares 

reserve 

119 

Other 

optional 

reserves 

Other 

reserves 

(round. 

euro) 

Dividends 

Operating 

Result 

Balance as of 

31.12.2002 

Coverage of 2002 

12,900,000 21,468,728 19,113 234,143 *(2) (1,589,273) 33,032,709 

period loss (1,336,017) (19,113) (234,143) 1,589,273 

Rel. 2003 loss 


*1 (5,554,809) (5,554,808) 

31.12.2003 

Coverage of 2003 

12,900,000 20,132,711 *(1) (5,554,809) 27,477,901 

period loss (5,554,809) 5,554,809 

Rel. 2004 profit 


*2 1,066,770 1,066,772 

31.12.2004 

Share Capital 

12,900,000 14,577,902 1 1,066,770 28,544,673 

increase 

Provision to Legal 

2,400,000 3,230,760 5,630,760 

Reserve 

Provision to reserve 

for treasury shares in 

(3,006,661) 3,006,661 

portfolio (863,879) 863,879 

Allocation of 2004 

period profit 53,339 248,431 (1) 

Totals 

765.000 

(765.000) (1,066,770) (765,001) 

Rel. 2005 profit 795,611 795,611 


31.12.2005 15,300,000 13,938,122 3,060,000 863,879 248,431 795,611 34,206,043 

* Values rounded to the Euro unit. 

B) RISK AND CONTINGENCY FUNDS

During the 2005 period, the Risk Fund, created during the prior periods to cover possible contractual 

risks originating from the transfer of the D-Media S.p.A. partnership to the Editori Per La Finanza S.p.A. 

company, was used for its entire accrued amount. 


Provision for risks on partnerships 150,000 150,000 

Total 150,000 150,000 


Represents the amount of the Subordinate Employment Severance Indemnity calculated as prescribed by 

the law provisions and the C.C.N.L. 

The fund's movements during 2005 are shown in the following table: 


Severance Indemnity Provision 12,644 4,528 12,066 5,106 

The fund's decrease is due to the transfer during the year of an employee to other companies of the 

group. 

D) DEBTS 

The detail of the debt items, all short term, is the following: 

Description Value as of 31/12/2004 Value as of 31/12/2005 Change 

Due to banks 2,165,392 2,165,392 

Due to suppliers 751,839 637,085 (114,754) 

Due to companies under control 842,570 59,155 (783,415) 

Tax liabilities 12,826 4,837 (7,989) 

Due to social security institutions 10,597 3,448 (7,149) 

Other short-term debts 53,908 12,000 (41,908) 

Total 1,671,740 2,881,917 1,210,177 

120

The overall debt towards banks and credit institutes at the period's closing date is equal to 2,165,000 

euro and the detail is as follows: 

Description Value as of 31/12/2005 

Banca popolare di Lodi 511,400 

Banca Intesa 472,227 

Banca Toscana 219,338 

c/securities c/o Banca Intesa 902,393 

Anticipation Unicredit 60,000 

Total 2,165,358 

Reasons for the decreased amount due to suppliers when compared to that of the 2004 period are the 

commercial relations on the supply of services and consultancy. 

The debts towards controlled enterprises are made-up for 22,000 euro towards DMail S.r.l. 

Unipersonale, for 24,000 euro towards DMedia Group S.pA. Unipersonale, for 3,000 euro towards 

Promotion Merate S.r.l., for 10,000 euro towards Promotion Digitale S.r.l. and for 337 euro towards Cat 

Import Export S.p.A. unipersonale. 

The fiscal liabilities are made-up by advance withholding taxes to employees and professionals. 

Among the other short-term debts we find mainly debts due to employees for performances accrued, for 

3,000 euro, to administrators for 6,000 euro and other debts due to collaborators for 3,000 euro. 

E) ACCRUED EXPENSES AND DEFERRED INCOME 

The overall accrued expenses and deferred income amount is equal to 4,000 euro and relates to 

performances accrued by the employees at the period's closing date. 


The company has furthermore engagements for lease rentals falling due for 86,000 euro, relating to the 

leasing agreements in force. It is to be pointed out also that during the 2005 period, the Company has 

underwritten a bank surety for the amount of 17,000 euro, as guarantee for the proper and timely 

fulfilment of the contractual obligations relating to the lease contract for the premises in Milan at Via 

Ripamonti 89, used exclusively for administrative offices. 


121


The revenues relate to services rendered to D-Store S.r.l. and the controlled DMail S.r.l. Unipersonale. 


Revenues from sales and services rendered 176,671 55,700 (120,971) 

Other revenues 53 53 

Total 176,671 55,753 (120,948) 


The manufacturing costs can be examined at the following tables: 

6) Purchase costs for raw, subsidiary and consumer materials and goods 



31/12/2005 

Change 

Stationery and printouts 1,520 2,577 1,057 

Capital equipment of less than 516,45 Euro 1,029 1,029 

Fuel for traction 4,120 4,120 

Other materials 1,090 1,090 

Total 1,520 8,816 7,296 

7) For services 

Description 

122 


31/12/2004 


31/12/2005 

Change 

Telephone expenses 2,280 20,201 17,921 

Professional services rendered 83,533 73,686 (9,847) 

Legal and notary-wise 130,703 83,544 (47,159) 

Other professional services 105,120 119,144 14,024 

Compensation to Administrators 210,378 441,918 231,540 

Compensation to Auditors 49,722 55,790 6,068 

Contributions and other charges 5,767 14,952 9,185 

Assistance on projects and related charges 32,698 32,698 

Travel and transfers 22,248 13,768 (8,480) 

Corporate costs 62,112 142,727 80,615 

Auditing 87,435 147,359 59,924 

Utilities 12,358 5,170 (7,188) 

Insurances 528 3,558 3,030 

Maintenance and repair 479 13,045 12,566 

Administrative expenses 12,550 28,169 15,619 

Entertainment expenses 749 2,031 1,282 

Other operating expenses 4,066 12,789 8,723 

Other mailing and transportation expenses 325 1,023 698 

Others 8,101 8,101 

Total 790,353 1,219,673 429,320 

The expenses for professional services rendered relate to the consulting on economic, financial, fiscal 

and administrative information. Legal and notary-wise expenses concern notary assistance at the 

assemblies and for legal consulting on corporate law.

8) Enjoyment of third party goods 

The item, equal to an overall amount of 120,000 euro refers to lease rentals for 29,000 euro, to rental 

and expenses for using the premises for 91,000 euro and lease of capital goods for 387 euro. 

As regards to the prior period there has been an increase in the cost of the Milan office premises in Via 

Ripamonti 89, given the increased use of the same during 2005. 

As for the lease contracts, one is to point out that if the company had recorded such operations 

according to the financial method prescribed by the IAS 17 accounting principle, it would have registered 

a lower operating loss of 7,000 euro and a net assets increase of 14,000 euro. 

IMPACT OF IAS 17 IMPLEMENTATION 

Value of the goods under financial leasing net of depreciations at the end of the prior period + 22,028 

Goods acquired in leasing during the present period + 90,091 

Goods under leasing redeemed during the present period - 

Depreciation quotas pertaining to the period - (15,916) 

Adjustments or value restatement on the goods in leasing +/- 

Value of the goods in financial leasing net of depreciations for euro 

at the end of the current period (a) = 96,203 

Greater overall value of the goods redeemed according to the financial method 

as regards to the net accounting value at the end of the period (b) = 

Implied debts for leasing operations at the end of the prior period + 21,989 

of which: falling due during the following period 6,455 

of which: falling due between 1 and 5 years 15,534 

of which: falling due beyond three 5 years 

Implied debts incurred during the period + 90,091 

Reimbursement of capital shares during the period - (32,034) 

Implied debts for leasing operations at the end of the period © = 78,583 

of which: falling due in the following period 19,601 

of which: falling due between 1 and 5 years 58,982 

of which: falling due beyond 5 years 

Overall gross impact at the end of the period (d) assets increase (a+b-c) 17,620 

Overall tax impact (3,673) 

Overall impact on net assets = 13,947 

Reclassification of rentals on leasing operations - 28,939 

Financial charges on leasing + (3,102) 

Depreciation quotas on ongoing agreements + (14,365) 

Depreciation quotas on goods redeemed - 

Adjustments or value restatement on goods in leasing +/- 

Impact on the result before tax (lower costs) = 11,472 

Ires tax impact (K) - (3,786) 

Irap tax impact (K) - (619) 

Impact on the operating result by the leasing figures using the financial method = 7,067 

123

9) Wages and salaries 

The staff costs for 2005 can be summarized as follows: 

Description 

Wages and salaries 

Value as of 31/12/2004 Value as of 31/12/2005 Change 

Salaries 102,972 68,289 (34,683) 

Social security contributions 

Welfare contributions 26,616 12,997 (13,619) 

INAIL contributions 394 299 (95) 

QUAS contributions 248 302 54 

Severance indemnity 

Severance indemnity provision 8,455 4,528 (3,927) 

Total 138,685 86,415 (52,270) 


Intangible assets depreciations 

The depreciations calculated on the intangible assets refer in particular to the quotation and advertising 

expenses borne during the year 2000, for improvements on third party goods and for software as per the 

following attached detail: 

Description 

Depreciation of setting-up and quotation 

Value as of 31/12/2004 Value as of 31/12/2005 Change 

costs 507,172 1,936 (505,236) 

Depreciation of improvements on third party 

goods 1,145 1,145 

Software programs using rights 16,484 38 (16,446) 

Total 524,801 3,119 (521,682) 

Tangible assets depreciations 


Depreciation of electronic machines and 

computers 1,681 2,411 730 

Depreciation of mobile phones 42 35 (7) 

Deprec. of fittings and installations 527 1,463 936 

Total 2,250 3,909 1,659 

12) Provisions for risks 

No provision for risks has been taken during 2005. 

124

14) Sundry operating expenses 

The Sundry operating expenses entry is made-up as follows: 


Loss on credits 345 345 

Contingent liabilities 379 270 (109) 

Taxes 544 586 42 

Consob supervision contribution 5.686 6,935 1,249 

Other charges 1,209 12,785 11,576 

Gifts 307 307 

C.C.I.A.A. contributions 448 618 170 

Total 8,266 21,846 13,580 

C) FINANCIAL PROCEEDS AND EXPENSES 


in controlled enterprises: 

The proceeds from partnerships originate from the 2004 dividend distribution of the controlled Cat 

Import Export S.p.A. unipersonale company, for an amount equal to 1,091,000 euro, cashed during 

2005, and from the recording, following the maturity criteria, of the 2005 dividends which will be 

distributed by the controlled company during 2006, the amount of which is equal to 620,000 euro. 

16) Other financial Proceeds 


a1) from credits recorded in net assets v/controlled enterprises: 


125 


31/12/2005 

Change 

Int. on financing to Cat Import Export S.p.A unipersonale 49,532 16,517 (33,015) 

Int. on financing to DMedia Group S.p.A. unipersonale 69,601 145,371 75,770 

Total 119,133 161,888 42,755 

Interest income due from DMedia Group S.p.A. Unipersonale has increased as regards to the 

previous period figure given the increased financing granted. 


31/12/2005 

Change 

Proceeds from partnerships 667,000 1,711,000 1,044,000 

Total 667,000 1,711,000 1,044,000

d4) sundry v/ Other enterprises: 

Description 


31/12/2004 

126 


31/12/2005 

Change 

Positive allowances 10 (10) 

Other financial interests from third parties 6,240 (6,240) 

Other sundry proceeds 9,269 3,068 (6,201) 

Bank interests 22 23 1 

Total 15,541 3,091 (12,450) 

The other financial proceeds originate from the retrocession to the Company, contractually 

prescribed, by the Caboto Company in relation to the transactions made by these on the Dmail 

Group's shares. 

17) Interests and other financial charges: 

The financial charges item is made-up as follows: 


Bank interests 27,785 39,476 11,691 

Losses realized on exchange 75 75 

Bank charges 6,607 (6,607) 

Interest expense V/others 3,548 3,548 

Allowances and discounts 10 4 (6) 

Commissions 43 12,880 12,837 

Total 34,445 55,983 21,538 

* Bank charges have been reclassified among the costs for services, item B.7 of the profit and loss account. 

D) FINANCIAL ACTIVITIES VALUE ADJUSTMENTS 

19) Devaluations 

Partnerships devaluations 

During the period the company devaluated no partnerships booked in assets, because no reason arose 

justifying such value adjustment. 

We need to highlight that during the period the company has sold its partnership in Galassia S.r.l. 

E) EXTRAORDINARY PROCEEDS AND EXPENSES 

The Company realized during the 2005 period extraordinary proceeds for 18,000 euro, achieved, for a 

6,000 euro capital gain on the transfer of 29% of D-Store S.r.l.'s share capital to the l'Innominato S.p.A. 

Company, and for the remaining from positive income components not ascribable to the ordinary 

company management. 

Non recurring extraordinary expenses show-up for 175,000 euro, originating from operations of 

extraordinary nature carried out during the course of the year and in particular: legal and financial-kind

consulting inherent to extraordinary operations occurred during the year 2005; technical/accounting- 

kind consulting for implementing accounting systems complying with the (IAS) International Accounting 

Principles indications, and from expenses deriving from the Share Capital increase through assignment of 

43% of the Gidiemme Stampa S.r.l. shares. 

22) Period income tax 

The company hasn't noticed income tax for the period. Dmail Group S.p.A. has made use of the faculty 

of drawing the "Consolidato Fiscale", ex art. 117 of the TUIR, with the controlled Cat Import Export S.p.A. 

unipersonale, of which the communication of acceptance was produce on the 27 th of October 2004, 

and is therefore at the second year of implementation of the provisions on the taxation on the 

consolidated basis, and with the controlled DMail S.r.l. unipersonale e D-Store S.r.l., these last 

consolidated tax-wise starting from the 2005 period, as per communication of acceptance sent to the 

competent on June 16 th 2005. 

As of December 31 st 2005 the company has recorded to the financial statement the following anticipated 

taxes: 

Anticipated – 

deferred taxes 

recorded to the F.S. 

Temporary 

differences as 

of 

31/12/2004 

IRES fiscal 

impact 

IRAP 

fiscal 

impact 

IRES 

release 

127 

IRAP 

release 

Temporary 

differences as 

of 

31/12/2005 

IRES 

fiscal 

impact 

33% 

IRAP 

fiscal 

impact 

4.25% 

Total 

anticipated 

taxes net 

of release 

Anticipated taxes 

Compensation to 

administrators 90,000 29,700 (29,700) 224,279 74,012 44,312 

Entertainment 

expenses 652 215 28 (66) (8) 542 179 23 128 

D-Store devaluation 

realized during prior 

periods 319,764 105,522 (52,761) (52,761) 

D-Mail S.r.l. 

unipersonale and D- 

Media S.p.A. realized 

during prior periods 2,884,515 951,890 (317,297) (317,297) 

Anticipated taxes on 

the 5% adjustment of 

the non taxable 

dividends 33,350 11,005 (11,005) (11,005) 

Total 

Anticipated taxes 

inherent to fiscal 

losses of the period 

3,328,281 1,098,332 28 (410,829) (8) 224,821 74,191 23 

and previous ones 3,706,420 1,223,119 

2,659,527 877,644 

Totals 

2,321,451 28 (410,829) (8) 

Compensation to the Board of Directors and Audit Committee 

2,884,348 

951,835 

23 

877,644 

541,021 

Total 

anticipated 

taxes profit 

and loss 

account 

The shareholders' meeting deliberated on May 4 th 2005, the assignment to the members of the 

Board of Director and to those of the Audit Committee, of an overall annual compensation 

equal to 800,00 euro as a maximum. During the Board of Directors' meeting held on May 12 th 

2005, the overall compensation established by the shareholders' meeting has been subdivided 

541,021

among the members of the same Board. For year 2005 the following gross compensations have 

been granted to the directors and auditors: 

PERSON FUNCTION DESCRIPTION COMPENSATIONS 

SURNAME AND NAME 

COVERED 

FUNCTION 

TIME OF THE 

ASSIGNMENT 

FUNCTION'S 

EMOLUMENTS 

NON 

MONETARY 

BENEFITS 

BONUS AND 

OTHER 

INCENTIVES 

OTHER 

COMPENSATIONS 

Adrio Maria de Carolis Chairman M.D. A) 150,000 97,857 1,800 

Maurizio Valliti Director A) 3,333 1,500 

Giuliano Vaccari Director A) 1,667 1,800 

Ludolf Uberto Gucci Director 

Director 

B) 1,730 

Gianluigi Viganò 

M.D. A) 40,348 97,857 1,800 

Giancarlo Ferrario Director B) 1,384 

Gino Francini Director B) 692 

Mario Volpi Director 

Independent 

A) 3,333 

Luca Mario De Martini Director 

Independent 

A) 6,667 

Andrea Zanone Poma Director A) 6,667 

TOTAL DIRECTORS 

AUDITORS 

212,015 195,714 10,706 

Prof. Mario Galeotti Flori Chairman B) 9,000 1,140 

Attorney Carlo Bossi Statutory auditor B) 6,000 676 

Dott. Angelo Galizzi Statutory auditor A/B) 12,000 3,340 

Dott. Lorenzo Ravizza Chairman A) 12,000 1,780 

Dott. Mauro Bottega Statutory auditor A) 8,000 1,854 

TOTAL AUDITORS 47,000 8,790 

A) in charge till approval of the financial statement as of December 31st 2007; 

B) in charge till approval of the financial statement as of December 31st 2004; 

The compensations assigned to the Dmail Group S.p.A. Directors by the companies controlled by the 

same are detailed here below: 

PERSON COMPANY FUNCTION EMOLUMENTS 

Soares Ferreira Joaquim D-Mail srl Chairman B.o.D. 165,000 

Soares Ferreira Joaquim CAT IMPORT-EXPORT Director 5,200 

Stetter Brigitte D-Mail srl Delegated director 130,000 

Stetter Brigitte CAT IMPORT-EXPORT Director 5,200 

Ferrario Giancarlo EDITRICE LECCHESE SRL Delegated director 62,496 

Viganò Gianluigi DMEDIA GROUP SPA Chairman B.o.D. 60,000 

Viganò Gianluigi EDITRICE LECCHESE SRL Chairman B.o.D. 13,500 

Viganò Gianluigi PROMOTION MERATE SRL Chairman B.o.D. 36,152 

Vaccari Giuliano (1) CAT IMPORT-EXPORT Chairman B.o.D. 300,000 

128

(1) On December 20th 2004 the CAT Import Export S.p.A. Unipersonale shareholders' meeting deliberated an 

additional annual compensation in favour of Giuliano Vaccari in the measure of 1% of the turnover increase with 

respect to 2004. 

LIQUIDITY GENERATED BY THE PERIOD'S INCOME PERFORMANCE 

Statement of income 2005 2004 

Net operating result 795,611 1,066,770 

Adjustments to items with no impact on liquidity 

Period depreciation and devaluation of tangible/intangible assets 7,028 527,051 

Provision for loan losses 

Other provisions 10,000 

Severance indemnity provision 4,528 8,455 

Net accounting value of sold assets 518 

Partnerships devaluation 164,211 

Current management cash-flow 807,685 1,776,487 

Use of loan losses fund 

Changes in other funds (150,000) 

Paid seniority allowance (12,066) (9,229) 

Change in frozen credits 1,840,723 (2,212,151) 

Changes in credits (338,287) (1,890,296) 

Changes in goods on hand 

Changes in accrued income and prepaid expenses (42,891) (19,990) 

Changes in other debts (1,179,495) 1,490,786 

Changes in accrued expenses and deferred income 227,661 (5,036) 

Liquidity generated by the income performance A 1,153,331 (869,429 

Purchase of intangible assets (45,614) (6,969) 

Purchase of tangible assets (18,217) (11,633) 

Change in frozen credit for losses coverage (605) 

Purchase/transfer partnerships (even treasury shares) (763,879) 1,816,440 

acquisition of long-term investments (8,000,338) 

Cash-flow for investments B (8,828,048) 1,797,233 

Share Capital increase 2,400,000 

Share-premium reserve increase 3,230,760 

Payment of dividends (765,000) 

Cash-flow for financial activities C 4,865,760 

Net period cash-flow (A+B+C) (2,808,957) 927,804 

Net period cash-flow (2,808,957) 927,804 

Net financial standing at the beginning of the period 704,718 (223,086) 

Net financial standing at the end of the period (2,104,239) 704,718 


The Chairman 


129





AUDIT COMMITTEE REPORT 

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FIRM'S AUDIT REPORT 

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report, Board of Statutory auditors - Dmail Group Spa

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