ANNUAL FINANCIAL REPORT DECEMBER 31, 2016

1 ANNUAL FINANCIAL REPORT DECEMBER 31, 2016 DiaSorin Via Crescentino (no building No.) - 13040 Saluggia (VC) Tax I. D. and Vercelli Company Register n. 13144290155 CONTENTS REPORT ON OPERATIONS .. 3 LETTER TO SHAREHOLDERS .. 3 BOARD OF DIRECTORS, BOARD OF STATUTORY AUDITORS AND INDEPENDENT 3 STRUCTURE OF THE GROUP AT DECEMBER 31, 2016 .. 6 OUR BUSINESS .. 7 BUILDING TODAY FOR TOMORROW: RESEARCH AND DEVELOPMENT .. 11 FOCUS ON OUR 12 FOCUS ON CLIA MENU .. 13 FOCUS ON MOLECULAR DIAGNOSTICS .. 14 RESEARCH & DEVELOPMENT COSTS AND INVESTMENTS .. 16 FOCUS ON PEOPLE .. 17 OUR SUSTAINABILITY DRIVERS .. 19 STOCK OWNERSHIP .. 19 HIGHLIGHTS .. 21 CONSOLIDATED FINANCIAL 22 FINANCIAL HIGHLIGHTS OF THE GROUP S PARENT COMPANY .. 22 OVERVIEW OF THE GROUP S PERFORMANCE IN 2016 AND COMPARISON WITH 2015 .. 23 REVIEW OF THE GROUP S OPERATING PERFORMANCE AND FINANCIAL POSITION.

2 27 NON-RECURRING MATERIAL TRANSACTIONS AND ATYPICAL AND/OR UNUSUAL TRANSACTIONS .. 36 MAIN RISKS AND UNCERTAINTIES TO WHICH DIASORIN AND THE GROUP ARE EXPOSED .. 37 SIGNIFICANT EVENTS OCCURRING AFTER DECEMBER 31, 2016 AND BUSINESS OUTLOOK .. 39 REVIEW OF THE OPERATING PERFORMANCE AND FINANCIAL POSITION OF DIASORIN .. 40 RELATED-PARTY TRANSACTIONS .. 47 REPORT ON CORPORATE GOVERNANCE AND THE COMPANY S OWNERSHIP STRUCTURE .. 48 MOTION TO APPROVE THE FINANCIAL STATEMENTS AND APPROPRIATE THE 2016 NET 92 CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2016 AND DECEMBER 31, 2015 OF THE DIASORIN GROUP .. 93 CONSOLIDATED INCOME STATEMENT .. 93 COMPREHENSIVE INCOME STATEMENT .. 94 CONSOLIDATED STATEMENT OF FINANCIAL POSITION .. 95 CONSOLIDATED STATEMENT OF CASH FLOWS .. 97 STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY .. 98 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2016 AND DECEMBER 31, 2015.

3 99 ANNEX I: LIST OF EQUITY INVESTMENTS WITH THE SUPPLEMENTAL DISCLOSURES REQUIRED BY CONSOB COMMUNICATION NO. DEM/6064293 .. 151 ANNEX II: DISCLOSURE REQUIRED PURSUANT TO ARTICLE 149-DUODECIES OF THE CONSOB ISSUERS REGULATIONS .. 153 CERTIFICATION OF THE STATUTORY FINANCIAL STATEMENTS .. 154 STATUTORY FINANCIAL STATEMENTS OF DIASORIN AT DECEMBER 31, 2016 AND AT DECEMBER 31, 2015 .. 155 INCOME STATEMENT .. 155 COMPREHENSIVE INCOME STATEMENT .. 156 STATEMENT OF FINANCIAL POSITION .. 157 STATEMENT OF CASH FLOWS .. 159 STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY .. 160 NOTES TO THE FINANCIAL STATEMENTS OF DIASORIN AT DECEMBER 31, 2016 AND DECEMBER 31, 2015 .. 165 ANNEX III: DISCLOSURE REQUIRED PURSUANT TO ARTICLE 149-DUODECIES OF THE CONSOB S ISSUERS REGULATIONS .. 212 CERTIFICATION OF THE STATUTORY FINANCIAL STATEMENTS .. 213 REPORT OF THE BOARD OF STATUTORY AUDITORS .. 214 INDEPENDENT AUDITORS REPORT .

4 225 3 REPORT ON OPERATIONS LETTER TO SHAREHOLDERS Dear Shareholders, In 2016 DiaSorin confirmed its excellence in terms of FINANCIAL results: we achieved solid net profit and cash generation driven by growth in revenues and profitability. These results were in line with the guidance provided for the year just ended. Again this year, the Group s strategy laid the foundations for a sound future in the immunodiagnostic field, positioning DiaSorin as a global player capable of successfully competing in an increasingly complex market. The acquisition of Focus Diagnostics Molecular and Immunoassay products business completed in May 2016 marked one of the most important milestone of the past year. In 2016 , we signed a distribution partnership agreement with Beckman Coulter Diagnostics, a global diagnostic leader, for the commercialization in the of DiaSorin Hepatitis A, B, C and HIV tests on the LIAISON XL.

5 DiaSorin and Beckman will work together to submit to the Food and Drug Administration tests for approval and commercialization in the Furthermore, DiaSorin has been awarded a contract by the Biomedical Advanced Research and Development Authority, a division of the Department of Health and Human Services Office of the Assistant Secretary for Preparedness and Response, for the development of new serological tests to detect Zika virus infections. The above results prove the excellence of our Research and Development team that, again in 2016 , launched high-quality tests on the market, confirming its leading role in the diagnostic market. Today DiaSorin has become a global diagnostic leader leveraging the integration of these new businesses into the Group s well-established excellence, the outstanding products we have already launched on the market and products under development and, lastly, LIAISON MDX innovative technology.

6 4 In view of the above, DiaSorin is, thus, able to meet the growing needs of laboratories all over the world, providing fast, high-quality and special solutions, as well as high-flexible immunodiagnostic and molecular diagnostic platforms and several high-quality diagnostic tests. In 2016 , we continued to develop and evaluate the first prototypes of our new LIAISON XS immunodiagnostic analyzer, designed to meet the growing needs of small and medium sized laboratories in USA and China. We believe this is a strategic market sector for the future of our Group and surely laboratories will be able to appreciate its huge potential, allowing the Company to achieve further success. Another aspect worthy of attention is, again this year, our focus on Sustainability. In 2016 , our Group supported several initiatives of Corporate Social Responsibility sharing a common focus on People.

7 Next April we will publish our Sustainability REPORT which focuses on the importance of people and their talents, the ability of our people to innovate and the attention our Group pays to communities where we operate by supporting significant and concrete projects. Focusing on People means to thank our management and people we work with: they can make us an outstanding company capable of innovating, growing and achieving increasingly challenging targets. What our People have achieved so far stems from a good balance of entrepreneurship and managerial skills, from the ability to create a successful and growth process to meet the needs of laboratories, from patients who come into contact with our tests and from you, dear Shareholders, and the trust you place in our ambitious objectives. We are confident we will continue to achieve these objectives in the future.

8 Gustavo Denegri Chairman 5 BOARD OF DIRECTORS, BOARD OF STATUTORY AUDITORS AND INDEPENDENT AUDITORS Board of Directors (elected on April 28, 2016 ) Chairman Gustavo Denegri Deputy Chairman Michele Denegri Chief Executive Officer Carlo Rosa (1) Directors Giancarlo Boschetti Stefano Altara Chen Menachem Even Franco Moscetti (2) Giuseppe Alessandria (2) (3) Roberta Somati (2) Fiorella Altruda (2) (4) Francesca Pasinelli (2) Monica Tardivo (2) Enrico Mario Amo Tullia Todros (2) Vittorio Squarotti Board of Statutory Auditors Chairman Monica Mannino Statutory Auditors Roberto Bracchetti Ottavia Alfano Alternates Maria Carla Bottini Salvatore Marco Fiorenza Independent Auditors PricewaterhouseCoopers COMMITTEES Control and Risks Committee Franco Moscetti (Chairman) Enrico Mario Amo Roberta Somati Compensation Committee Giuseppe Alessandria (Chairman) Michele Denegri Roberta Somati Nominating Committee Giuseppe Alessandria (Chairman) Franco Moscetti Michele Denegri Related-party Committee Franco Moscetti (Chairman) Giuseppe Alessandria Roberta Somati (1) General Manager (2) Independent Director (3) Lead Independent Director (4) Director Fiorella Altruda was appointed by the Shareholders Meeting on DECEMBER 19, 2016 6 AN EXPERIENCE FILLED WITH FUTURE DiaSorin is an Italian multinational Group listed on the MTA (automated stock market) in the FTSE Italia Mid Cap Index, organized and managed by Borsa Italiana With over 40 years of experience, DiaSorin is a solid and innovative player in the in vitro diagnostics which is an increasingly competitive and complex market.

9 In the last 10 years DiaSorin focused its efforts to widen its presence in over 120 countries, strengthened its position both in reference markets, such as Europe and United States and in emerging markets, such as China, that are becoming a major global player. The Group s daily challenge is to see what others cannot see, anticipating the future. STRUCTURE OF THE GROUP AT DECEMBER 31, 2016 7 OUR BUSINESS DiaSorin produces, develops and markets tests for the diagnosis of infectious diseases or hormonal disorders. Clinical areas We develop both high routine tests and specialty tests in a wide range of clinical areas. Infectious Diseases Gastrointestinal Infections Bone and Mineral Endocrinology Hypertension Oncology Onco-hematology Autoimmunity DiaSorin tests are designed for hospitals and private testing laboratories in the markets of immunodiagnostics and molecular diagnostics.

10 Both technologies use: Testing kits (reagents and consumables); Technological platforms (according to the different technology used). Immunodiagnostics This technology is based on the detection of antibodies to find diseases in a human fluid sample. Molecular Diagnostics This technology is used in the diagnosis of a pathology through the detection of specific RNA or DNA sequences (nucleic acids) in patients biological fluids or in their abnormal cells. The identification of nucleic acids is carried out through the DNA or RNA amplification . 8 Diagnostic kits DiaSorin diagnostic tests are biological components whose purpose is detecting the presence of specific elements (virus, hormones, etc.) in patient s blood sample. Due to their high level of specificity, these high-tech diagnostic products can detect the presence of the element to be searched in the patient s sample, even in small quantity.