The Benetton Group Annual Report 1996

As discussed in note 3, other financial income includes approximately Lire 21,200 million (around
Lire 24,100 million in 1995) of exchange gains on capital hedging transactions, representing the
differentials between spot and forward exchange rates.
This caption also includes:
– positive differentials on interest rate swaps and forward rate agreements, approximately Lire 41,300
million (approximately Lire 18,100 million in 1995);
– premiums collected on options and income deriving from the adjustment of warrant-related
transactions linked to the Lire 200,000 million bond issued by Benetton International N.V. (Note 22),
approximately Lire 3,300 million (around Lire 8,400 million in 1995);
– income from currency swaps, approximately Lire 4,700 million (around Lire 8,600 million in 1995).
Interest and other financial expense
This caption consists of the following:
1995 1996
Interest expense on bonds 17,042 17,012
Interest expense on bank current accounts 10,464 5,362
Interest expense on import/export advances 5,003 3,992
Interest expense on advances against
receivables
6,879 10,528
Interest expense on short-term loans 25,845 31,421
Interest expense on long-term bank loans 30,792 19,720
Interest expense on loans from other providers of
finance
Miscellaneous financial expense 80,897 70,878
Exchange losses and charges from currency
management
5,142
410,944
3,942
285,580
Total 593,008 448,435
Exchange losses are considerably lower than exchange gains.
Miscellaneous financial expense mainly includes:
– negative differentials on interest rate swaps, around Lire 11,200 million (around Lire 25,600 million in
1995);
– the current portion of charges deriving from the valuation of warrants and of premiums paid for
options, amounting to approximately Lire 9,000 million (around Lire 17,000 million in 1995);
– charges on currency swaps, approximately Lire 20,000 million (around Lire 19,500 million in 1995);
– discounts allowed on the early settlement of trade receivables, approximately Lire 6,600 million
(around Lire 7,000 million in 1995);
– bank charges and commission of approximately Lire 5,100 million (around Lire 6,200 million in 1995).
28. EXTRAORDINARY INCOME AND EXPENSE
Income
This caption includes:
1995 1996
Gains on disposals 2,652 7,318
Other income:
- Out-of-period income 7,653 5,101
- Other extraordinary income 6,557 4,115
Total 16,862 16,534