(*) This item includes profit for the year of €451 million, actuarial gains on provisions for employee termination benefits of €79 million after the related current and deferred tax income of €30 million.
Cash generated by operating activities before movements in working capital [a] 882,599 717,812
Net cash generated by/(used for) financial assets held for trading 939 1
Net cash f low from /(for ) operating activities [d]=[a+b+c] 2,303,017 322,242 - of which related party transactions (1,616,762) (1,445,376)
Net cash f low from /(for ) investing activities [e] (518,078) (440,747)
Receivable authorised by 2015 Stability Law in implementation of Sentence of the European Court 535,000 -
Amounts that cannot be drawn on due to court rulings (11,228) (11,151)
Meeting held on 14 April 2011 Poste Italiane SpA’s shareholder approved the creation of ring-fenced capital to be used exclusively in relation to BancoPosta’s operations (BancoPosta Ring-fenced Capital or BancoPosta
RFC), as governed by Presidential Decree 144 of 14 March 2001, and established the assets and contractual rights to be included in the ring-fence as well as By-laws governing its organisation, management and control.
BancoPosta RFC was provided originally with an initial reserve of €1 billion through the attribution of Poste
Italiane SpA's retained earnings. The resolution of 14 April 2011 became effective on 2 May 2011, the date on which it was filed with the Companies’ Register.
Italian Civil Code or for other special purpose entities, in that it has not been established for a single specific business but rather, pursuant to Presidential Decree 144 of 14 March 2001, for several types of financial activities to be regularly carried out for an unlimited period of time. For this reason, the above legislation does not impose the 10% limit on BancoPosta's equity, waiving the provisions of the Italian Civil Code unless expressly cited as applicable.
BancoPosta's assets, contractual rights and authorisations pursuant to notarial deed were conferred on
TUB) - and all related and consequent activities;  the collection of savings through postal securities and deposits;  payment services, including the issuance, administration and sale of prepaid cards and other payment instruments pursuant to art. 1, para. 2, letter f) numbers 4) and 5), TUB;  foreign currency exchange services;  promotion and arrangement of loans issued by approved banks and financial brokers;  investment and related services pursuant to art. 12, Presidential Decree 144/2001;  debt collection services;  professional gold trading, on own behalf or on behalf of third parties, in accordance with the requirements of Law 7 of 17 January 2000.
As revised on the issuance of Law Decree 179 of 18 October 2012 converted into law with amendments by Law 221
All assets, contractual rights and authorisations were conferred on BancoPosta as required to engage in the following types of operation:
BancoPosta RFC’s operations consist of the investment of cash held in postal current accounts, in the name of
BancoPosta but subject to statutory restrictions, and the management of third parties’ collections and remittances. This latter activity includes the collection of postal savings (Postal Savings Books and Interestbearing Postal Certificates), carried out on behalf of Cassa Depositi e Prestiti and the MEF, and services delegated by Public Administration entities. These transactions involve the use of cash advances from the
Italian Treasury and the recognition of receivables awaiting financial settlement. The specific agreement with the MEF requires BancoPosta to provide daily statements of all cash flows, with a delay of two bank working days with respect to the transaction date. In compliance with the 2007 Budget Law, from 2007 the Company is required to invest the funds raised from deposits paid into postal current accounts by private customers in euro area government securities
In addition, following the amendment of art. 1, paragraph 1097 of Law 296 of 27 December 2006, introduced by art.
account at the MEF, with the objective of ensuring flexibility with regard to investments in view of daily movements in amounts payable to current account holders. These deposits are remunerated at a variable rate calculated on the basis of the Euro OverNight Index Average (EONIA)
Banco Posta RFC are indicated in specific General Guidelines governing the process of contracting out
 Support services, meaning the coordination and management of investments, IT systems, customer care and postal services.
 Staff services, represented by the provision of support for the coordination and management of
Bank of Italy Circular 285 of 17 December 2013, part four, chapter 1 – BancoPosta.
The Operating Guidelines establish, among other things, levels of service and the related transfer prices, and become effective, in accordance with the General Guidelines, following an authorisation process involving the relevant functions, the Chief Executive Officer and, when provided for, the Issuer’s Board of Directors.
Poste Italiane SpA's liability, pursuant to art. 2, paragraph 17-nonies of Law Decree 225 of 29 December 2010 converted into Law 10, to creditors of Bancoposta RFC is limited to the ring-fenced capital, represented by the assets and contractual rights originally allocated or arisen after the separation. Poste Italiane's liability is, however, unlimited with respect to claims arising from actions in tort relating to the management of
BancoPosta or for transactions for which no indication was made that the obligation was taken specifically by
BancoPosta RFC. The Regulation approved at the Extraordinary General Meeting of Poste Italiane SpA’s shareholder on 14 April 2011 SpA, and subsequently amended on 31 July 2015, provides that BancoPosta
RFC's equity shall be sufficient to ensure that it is able to comply with supervisory capital requirements and is aligned with the risk profile of its operations.
In this regard, the following table shows a reconciliation of the components of BancoPosta RFC’s equity, as shown in the Company’s statement of financial position and in the Separate Report
, which states that “the assets and contractual rights included in BancoPosta’s ring-fenced capital shall be shown separately in the
Actuarial gains and losses on defined benefit plans, which in the Company’s financial statements are accounted for in retained earnings, are accounted for in the valuation reserves in the Separate Report (Item 130 of Liabilities). 73
Purchases of €207 million primarily relate to:  €34 million, primarily relating to extraordinary maintenance of post offices and local head offices around the country (€25 million) and mail sorting offices (€8 million); tab. A1 - Movements in property, plant and equipment (€m)
Investment property primarily regards former service accommodation owned by Poste Italiane SpA pursuant to Law 560 of 24 December 1993, and residential accommodation previously used by post office directors.
None of the property included in this item is attributable to BancoPosta RFC. Movements in investment property are as follows:
December 1993, while the remaining balance reflects price estimates computed internally by the Company
Investment in “Intangible assets” during 2015 amounts to €176 million, including €5 million in internal software development costs and the related expenses. Research and development costs, other than those incurred directly to produce identifiable software used, or intended for use, within the Company, are not capitalised.
Ind u st r ia l pat ent s and in t e llect u al propert y r ight s
Asset s u nd er const ru ct ion and ad vances
Purchases of industrial patents and intellectual property rights total €126 million, before amortisation for the year, and relate primarily to the purchase and entry into service of new software programmes and the acquisition of software licences.
Purchases of intangible assets under construction primarily regard the development of software relating to the infrastructure platform and for use in providing support to the sales network.
During the year the Company effected reclassifications from intangible assets under construction to industrial patents, intellectual property, rights, concessions, licences, trademarks and similar rights, amounting to €57 million, reflecting the completion and commissioning of software and the upgrade of existing software.
Movements in investments in the year ended 31 December 2015 (€m)
Su b scr ipt ions/ Capit a l cont r ib u t ions
Cons. per i Servizi di Telefonia Mobile ScpA - - - - - - -
Poste Holding Participações do Brasil Ltda 1 - - (1) - - -
Tot al su b sid iar ies 2,029 41 - ( 1) - ( 76) 1,993 in associat es
The following movements occurred in 2015:  Liquidation of the Brazilian company, Poste Holding Participações do Brasil LTDA (established in August 2013, with 76% of share capital subscribed by Poste Italiane SpA and 24% by PosteMobile SpA) on 25
 The acquisition of a 10.32% interest in Anima Holding SpA from Monte Paschi Siena SpA (BMPS) for a total consideration of €210.5 million, based on a price of €6.80 per share. This is broadly in line with the average market price of the investee’s shares on the Milan Stock Exchange during the month prior to the agreement, executed on 14 April 2015. The agreement will also result in Poste Italiane’s inclusion in the shareholders’ agreement that BMPS has previously entered into with Banca Popolare di Milano (BPM), which owns 16.85% of the investee. In view of the strategic importance of the transaction and the significant influence acquired through the shareholders’ agreement, the investee has been classified as an associate. Anima Holding SpA provides strategic guidance and coordination for the group of the same name, one of Italy’s leading asset managers. The difference of €134.6 million between the consideration paid (€210.5 million) and the net assets acquired on a pro rata basis (€75.9 million) has been allocated to goodwill, incorporated in the carrying amount of the investment.
Movements in investments in the year ended 31 December 2014 (€m)
Poste Holding Participações do Brasil Ltda - 1 - - - - 1
Energia SpA was merged with and into EGI SpA, with effect for accounting and tax purposes from 31
The impairment tests required by the related accounting standards have been conducted in order to identify any evidence of impairment. The tests carried out at 31 December 2015 were based on projections contained in the five-year business plans for the relevant cash generating units (companies or their subsidiaries) or the latest available projections. Data from the last year of the plan have been used to project cash flows for subsequent years over an indefinite time, and the resulting value was then discounted using the Discounted
at 31 December 2014) and an assumed growth rate of 1.34% (1% at 31 December 2014).
Poste Italiane SpA has committed to providing financial support to the subsidiaries, SDA Express Courier SpA,
The following table shows a list of investments in subsidiaries and associates at 31 December 2015 (NB: amounts in thousands of euros): (1) Consortium fund in the case of consortia. The registered offices of subsidiaries and associates are all located in Rome, with the exception of Anima Holding SpA, whose registerd office is in Milan.
(3) Figures taken from the company’s latest approved financial statements at 31 December 2014.
(4) Figures taken from the company’s latest approved financial statements at 30 September 2015.
Decree 144/2001, which from 2 May 2011 are attributable to the ring-fenced capital, and which relate to the management of postal current accounts deposits, carried out in the name of BancoPosta but subject to statutory restrictions on the investment of the liquidity in compliance with the applicable legislation, and the management of collections and payments on behalf of third parties (note 4.2).
Receivables of €8,394 million include:  Amounts deposited with the MEF, totalling €5,855 million, including public customers’ current account deposits, which earn a variable rate of return, calculated on a basket of government bonds 2015, the Company entered into derivative contracts to convert part of the return on the longer-term component of such deposits to fixed rate; the purpose of the transaction was to stabilise the return on this component, for 2015, through a series of repurchase agreements of 7-year BTPs, without delivery of
I t em Not e Non-cu rrent asset s Cu rrent asset s Tot al
M EF on behalf o f the Italian Treasury - 1,331 1,331 - 663 663
Cassa Depositi e Prestiti, less €45 million receivable from the MEF for Interest bearing Postal Certificates issued on its behalf.
Balance of cash flows for advances - 1,693 1,693 - 905 905
Amounts payable due to theft - (158) (158) - (159) (159)
Amounts payable for operational risks - (34) (34) - (34) (34)
I t em Non-cu rrent asset s Cu rrent asset s Tot al
Non-cu rrent asset s Cu rrent asset s Tot al tab. A5.1.1 a) - Balance of cash flows for advances (€m)
MEF postal current accounts and other payables - (672) (672) - (673) (673)
Ministry of Justice - Orders for payment - (1) (1) - (12) (12)
Cu rrent asset s Tot al tab. A5.1.1 b) - Movements in amounts payable due to theft (€m)
Amounts payable for thefts during the year [tab. C8] 6 6
following rulings by the Court of Auditors on thefts suffered until 31 December 1993, amounting to €1 million.
Other amounts to be charged to customers, amounting to €233 million, primarily regard: withdrawals from BancoPosta ATMs, the use of debit cards issued by BancoPosta, cheques and other collection items settled in the clearing house.
Italian government securities with a nominal value of €39,040 million. Movements in investment securities are as follows: tab. A5.1.2 - Other financial receivables (€m)
Other receivables 5 14 tab. A5.2 - Movements in investment securities (€m)
Changes in cash flow hedge transactions - - - 12 - - - 12
Accrued income for current year - 208 - 286 - - - 494
Sales and settlement of accrued income - (229) (3,257) (3,999) (134) (143) (3,391) (4,371)
Changes in fair value through equity - - - 1,401 - - - 1,401
At 31 December 2015, the fair value of the held-to-maturity portfolio, accounted for at amortised cost, is €15,057 million (including €187 million in accrued interest).
The fair value of the available-for-sale portfolio is €32,415 million (including €302 million in accrued interest).
The overall fair value gain for the period of €969 million has been recognised in the relevant equity reserve for the positive amount of €1,401 million, in relation to the portion of the portfolio not hedged by fair value hedges, and through profit and loss, in relation to the loss of €432 million related to the hedged portion.
Poste Italiane at transaction closing, expected by the end of June 2016 – subject to clearance from the relevant authorities – was estimated by the investee to be €111 million, including €83 million in cash and €28 million in Visa Inc. stock (Convertible Participating Preferred Stock) convertible into class A shares within 12 years of the closing;  €68 million relating to the fair value of 756,280 class B shares in MasterCard Incorporated. These equity instruments are not quoted on a regulated market but may be converted into an equal number of Class A
Fair value gains during the year amount to €126 million and have been recognised in the relevant equity reserve (section B3).
The fair value hedges in place, which are held to limit the price volatility of certain available-for-sale fixed rate instruments, saw their effective portion record a decrease in fair value of €404 million, whilst the hedged securities (tab. A5.2) have recorded a fair value gain of €432 million, with the difference of €28 million due to paid or accruing differentials.
In the year under review, the Company carried out the following transactions:  entered into new asset swaps used as fair value hedges with a notional value of €4,780 million;  settled asset swaps used as fair value hedges for securities sold, with a nominal value of €320 million.
Gains/(Losses) through profit or loss ** - - - - - - - - - - - of which
Der ivat ive liab ilit ies - - 1,325 (73) 8,120 (1,474) - - - - 9,445 (1,547)
At 31 December 2015, financial assets outside the ring-fence are as follows: Loans and receivables
This item (€409 million) regards short-term loans repayable by the end of 2016 and overdrafts on intercompany current accounts granted to subsidiaries, paying interest on an arm’s length basis.
This is the so-called “Nuova Alitalia”, the company to which all the aviation assets and activities of Alitalia Compagnia
Aerea Italiana SpA, now CAI SpA, have been transferred. The company owns 100% of Midco SpA.
Receivables break down as follows: The amount due from the MEF, expressed at the amortised cost
During 2015, the Company collected receivables with a nominal value of €114 million and recognised interest income for the year, as calculated on the present value of the receivables. The difference of €2 million between the nominal value of the receivable of €3 million and the nominal value of the payable of €1 million
(tab. B7), corresponding to its amortised cost, is due to partial repayment of the principal falling due in 2015 and not yet repaid by the MEF.
Guarantee deposits of €52 million relate to collateral provided to counterparties with whom the Company has entered into asset swaps.
The amortised cost of the non-interest bearing receivable in question was calculated on the basis of the present value obtained using the risk-free interest rate applicable at the date from which the incorporation of Poste Italiane SpA took effect (1 January 1998). The receivable is thus increased each year by the amount of interest accrued and reduced by any amounts collected.
These instruments primarily include the investment in CAI SpA (formerly Alitalia CAI SpA), which was acquired for €75 million in 2013 and written off, the historical cost of approximately €4.5 million for the 15% equity interest in Innovazione e Progetti ScpA, which is in liquidation, unchanged from last year.
Changes in fair value through equity - - 22 - 1 23
Changes in fair value through equity - - 4 - - 4
Accrued income for current year - - 6 - - 6
Sales and settlement of accrued income - - (6) - - (6)
Fixed - income inst ru ment s Ot her invest ment s
Movements in derivative financial instruments are as follows: * Increases / (decreases) refer to the nominal value of new transactions and changes in the fair value of the overall portfolio during the period. ** Gains and losses through profit or loss refer to any ineffective components of hedges, recognised in other income and other expenses from financial and insurance activities. *** Transactions settled include forward transactions settled, accrued differentials and the settlement of asset swaps linked to securities sold.
October 2013 (section B.7). L The cash flow hedge of this derivative set in as of 25 October 2015, when the bond began to pay a variable interest rate. For this reason, the remaining negative change in fair value for €6 million was reclassified among cash flow hedging instruments while the positive change in fair value (for €1 million), which took place between the date of execution of the hedge and financial year-end, was recognised through equity, in the cash flow hedge reserve. With this transaction, the
The fair value of these derivative instruments is based on the present value of expected cash flows deriving from the differentials to be exchanged.
Gains/(Losses) through profit or loss(**) - - - - - - - of which:
Ministries and related local offices (€76 million); – Unfranked mail services provided on credit, totalling €81 million, provided to Ministries and local offices (€38 million), Agencies and other central government entities (€24 million), as well as local government authorities (€19 million); – Reimbursement of the costs associated with the management of property, vehicles and security incurred on behalf of the Ministero dello Sviluppo Economico (Ministry for Economic Development), totalling €70 million, of which €3 million relates to the amount accrued during the year; – Pension and other employment related services on behalf of INPS (the National Institute of Social
Ministries and Public Administration entities - 605 605 47 703 750
reflects the new terms and conditions laid down in the Agreement dated 4 December 2014 whereby billing takes place quarterly instead of every six months.
BancoPosta is in the process of recovering, which have largely been written down.
 Amounts due for other Bancoposta services refer to amounts due on insurance and banking services, personal loans, overdrafts and mortgages sold on behalf of third parties, totalling €81 million.
December of which attributable to BancoPosta RFC 121 7 - - 128 10 - - 138
These trade receivables include:  Poste Vita SpA: largely regarding fees deriving from the sale of insurance policies through post offices and attributable to BancoPosta RFC (€135 million);  Postel SpA: mainly relating to receivables deriving from the delivery of Bulk Mail by Poste Italiane SpA and collected by the subsidiary (€50 million).
This item relates to trade receivables due from the Ministry of the Economy and Finance: tab. A7.3 - Trade receivables due from subsidiaries (€m)
Poste Assicura SpA 5 7 of which attributable to BancoPosta RFC 165 116 tab. A7.4 - Receivables due from the MEF (€m)
Company of €327 million, compared to compensation of €350 million calculated by the Company, which was collected in December 2015. Provision has not been made in the state budget for the remaining €23 million. The Company appealed AGCom’s decision on 13 November 2014 before the
According to the new Service Contract, starting in 2016, the Company will receive Universal Service compensation on a monthly basis.
Movements in provisions for doubtful debts due from the MEF are as follows: Provisions for doubtful debts due from the MEF reflect the lack of funding and/or the uncertainty related to medium/long-term forecasts for the state budget, which make it difficult to collect certain receivables recognised on the basis of laws, contracts and agreements in force at the time of recognition. The release of provisions for €68 million in 2015 was due to new funding in the state budget. Similarly, the amount of deferred revenue relates, for about €66 million, to compensation for which no provision has been made in the state budget or for which provision is expected only in the medium term, minus €17 million for which provision has been made.
This item breaks down as follows: Specifically:  Substitute tax paid, which is attributable to BancoPosta RFC, primarily regards: - €716 million charged to holder of Interest bearing Postal Certificates for stamp duty at 31 December
Receivable from fixed-term contract settlements 144 95 239 161 98 259
Amounts due from social security agencies and pension funds (excluding fixedterm contracts settlements)
Amounts that cannot be drawn on due to court rulings - 68 68 - 81 81
Accrued income and prepaid expenses from trading transactions and other assets - 6 6 - 7 7
Other amounts due from subsidiaries - 3 3 - 2 2
Receivable authorised by the 2015 Stability Law in implementation of the sentence
December 2007 as a result of an attempted fraud and that have remained on deposit with an overseas bank. The latter sum may only be recovered once the legal formalities are completed.
Receivables due from staff under agreement of 2006 6 3 9 9 8 3 11 12 due from staff under agreement of 2008 47 16 63 69 58 20 78 87 due from staff under agreement of 2010 40 8 48 61 45 9 54 69 due from staff under agreement of 2012 34 7 41 52 38 8 46 59 due from staff under agreement of 2013 5 1 6 7 6 1 7 9 due from staff under agreement of 2015 6 2 8 8 - - - -
Noncu rrent asset s tab. A8.2 - Movements in Provisions for doubtful debts due from others (€m)
Public Administration entities for sundry 13 - - 13 - - 13
Receivables from fixed-term contract settlements of which attributable to BancoPosta RFC 18 1 - 19 1 - 20
Tot al 3,161 2,873 tab. A10 - Cash and cash equivalents (€m)
Bank deposits and amounts held at the Italian Treasury 1,120 43
Cash and cash equivalents in hand 9 9 of which attributable to BancoPosta RFC 401 942
Poste Italiane SpA’s available and distributable reserves are shown below. Retained earnings include profit for
At 31 December 2015 all the shares in issue are fully subscribed and paid up. No preference shares have been issued and the Parent Company does not hold treasury shares.
As decided by the General Meeting of shareholders held on 28 April 2015 the Company paid dividends totalling €250 million, based on a dividend per share of €0.19.
The other shareholder transactions, as shown in the statement of changes in equity, concern the tax effects resulting from the partial return of €535 million (€510 million, net of the tax effects on the interest portion) - as recognised in 2014 and contemplated by article 1, paragraph 281 of Law 190/2014, i.e. the 2015 Stability
Tot al 7,646 of which d ist r ib u t ab le 1,488
. According to Company calculations, the sums due until 13 May 2015, inclusive of interest, amounted to €580 million
Details are as follows:  The fair value reserve regards changes in the fair value of available-for-sale financial assets which, during 2015, showed gains totalling €1,531 million as follows: – €1,527 million regarding the net fair value gain on available-for-sale financial assets attributable to
BancoPosta RFC, consisting of €1,401 million in gains on securities and €126 million in gains on equity instruments; – €4 million regarding the net fair value gain on available-for-sale financial assets outside the ringfence.
Tax effect of transfers to profit or loss - - 73 15 88
Gains/(Losses) recognised in equity - - 1,066 66 1,132 of which attributable to BancoPosta RFC - 1,000 1,573 48 2,621
Tax effect of changes in fair value - - (454) (4) (458)
Tax effect of transfers to profit or loss - - 123 23 146
Gains/(Losses) recognised in equity - - 931 (39) 892 of which attributable to BancoPosta RFC - 1,000 2,500 8 3,508
Company’s incorporation, liabilities deriving from the provision of delegated services for social security agencies, fraud, violations of administrative regulations, compensation and adjustments to income for previous years, risks linked to disputes with customers regarding instruments and investment products tab. B4 - Movements in provisions for risks and charges
Movements in provisions for risks and charges in the year ended 31 December 2015 (€m)
Provisions for expired and statute barred postal savings certificates of which attributable to BancoPosta RFC 358 71 1 (7) (39) 384
Overall analysis of provisions: (1) Net releases for personnel expenses total €12 million. Service costs (legal assistance) total €7 million, whilst other releases total €1 million.
Overall analysis of provisions: (1) Net releases for personnel expenses total €7 million. Service costs (legal assistance) total €7 million.
 Provisions for restructuring charges reflect the estimated costs to be incurred by the Company for early retirement incentives, under the current redundancy scheme for employees leaving the Company by 31
December 2015, the provisions represent the present value of total liabilities, based on a nominal value of €21 million, expected to be progressively settled by 2043.
Company; and claims for payment of accrued interest expense due to certain suppliers. Provisions of €7 million for the year regard the first two types of liability.
Balance at 1 Janu ary 1,434 1,301 effect of actuarial gains/(losses) (79) 171
Balance at 31 Decemb er 1,320 1,434 of which attributable to BancoPosta RFC 19 20 tab. B5.1 - Economic and financial assumptions 1.60% for 2019 2.00% from 2019 on 2.00% from 2019 on 2.00% from 2020 on 2.70% for 2019 3.0% from 2019 on 3.0% from 2019 on 3.0% from 2020 on
At 31 December 2015, financial institutions borrowings amount to €4,895 million and regard repurchase agreements, having a nominal value of €4,569 million, entered into with major financial institutions. These liabilities consist of:  €4,111 million (€9 million of which accrued interest) relating to Long Term Repo entered into with primary counterparties, with the resulting resources invested in Italian fixed-income government securities of a matching nominal amount; tab. B5.4 - Sensitivity analysis (€m)
At 31 December 2015, the fair value of the above borrowings amounts to €4,949 million.
Movements in derivative financial instruments during 2015 are described in section A5. Net fair value losses on the current portion of these instruments, which include income from differentials accruing at 31 December
 Amounts to be credited to customers relate to payments of bills by payment slip in the process of being credited to beneficiaries’ accounts, premiums collected and payments to be made on behalf of Poste Vita
 Amounts payable for guarantee deposits, totalling €81 million, include €76 million received in relation to
Asset swaps (collateral provided by specific Credit Support Annexes) and €5 million received from counterparties in relation to repurchase agreements covering fixed-income securities (collateral under specific Global Master Repurchase Agreements).
Domestic and international money transfers - 532 532 - 520 520
Tax collection and road tax - 106 106 - 137 137
Other amounts payable to third parties - 65 65 - 62 62
As part of the Company’s EMTN – Euro Medium Term Note programme, totalling €2 billion, the following bonds listed on the Luxembourg Stock Exchange were issued in 2013:  bonds with a nominal value of €750 million, placed through a public offering for institutional investors at a price below par of €99.66 on 18 June 2013. The bonds have a term to maturity of five years and pay annual coupon interest at a fixed rate of 3.25%. The fair value of this borrowing at al 31 December
A commitment given to creditors by which a borrower undertakes not to give senior security to other lenders ranking pari passu with existing creditors, unless the same degree of protection is also offered to them. 88
In terms of fair value hierarchy, which reflects the relevance of the sources used to measure assets, this amount qualifies for level 1. 89
Fair value through profit or loss - - - 7 - 7
Ministry of the Economy and Finance is offset by a receivable, recognised as a financial asset due from the
MEF, which will be collected in keeping with the loans’ repayment schedules.
The fair value of the two fixed rate EIB loans, totalling €400 million, is €405 million.
The carrying amount of the other financial liabilities in table B7 approximates to their fair value.
At 31 December 2015, the following credit facilities are available:  committed lines of €800 million;  uncomitted lines of credit of €1,118 million;  overdraft facilities of €81 million;  unsecured guarantee facilities with a value of €347 million.
Moreover, the Bank of Italy has granted BancoPosta RFC access to intraday credit in order to fund intraday interbank transactions. Collateral for this credit facility is provided by securities with a nominal value of €545 million, and the facility is unused at 31 December 2015.
In terms of fair value hierarchy, which reflects the relevance of the sources used to measure assets, this amount qualifies for level 2. 91
In terms of fair value hierarchy, which reflects the relevance of the sources used to measure assets, this amount qualifies for level 2. 92
Tot al 784 754 of which attributable to BancoPosta RFC 23 31 tab. B8.2 - Amounts due to subsidiaries (€m)
These items primarily regard accrued amounts that have yet to be paid at 31 December 2015. The following table shows a breakdown: At 31 December 2015, incentives that at 31 December 2014 were included in provisions for restructuring were determinable with reasonable certainty and, as such, were recognised as payables.
Security) primarily relate to amounts due on salaries paid and accruedat 31 December 2015. This item also includes provisions for employee termination benefits still to be paid.
Amounts due to the MEF - 21 21 - 21 21
Accrued expenses and deferred income from trading transactions 14 19 33 12 15 27 of which attributable to BancoPosta RFC 792 100 892 639 73 712
Other tax liabilities break down as follows: In particular:  Withholding tax on employees’ and consultants’ salaries relates to amounts paid to the tax authorities by the Company in January and February 2016 as the withholding agent.
 Withholding tax due on postal current accounts refers to amounts withheld by BancoPosta RFC on interest accrued during the year on customer current accounts.
 Stamp duty represents the amount payable to the tax authorities in virtual form after the adjustment made in 2016 in accordance with note 3bis to art. 13 of the Tariff introduced by Presidential Decree 642/1972. The non-current portion of stamp duty regards the amount accrued at 31 December 2015 on
Treasury and General Accounting Department and included in the letter dated 7 August 2015.
Poste Holding Participações do Brasil Ltda - - - - 1 1
Ind irect su b sid iar ies of which attributable to BancoPosta RFC - - - - - -
This item primarily regards the amount payable by Poste Italiane SpA, as the consolidating entity in the tax consolidation arrangement (note 2.2 – Summary of significant accounting standards and policies), to subsidiaries in return for the transfer of tax credits for advance payments, withholding taxes paid and tax paid overseas, less IRES payable by subsidiaries to the consolidating entity, and the benefit linked to the tax losses transferred from 2015 from PosteShop SpA and SDA Express Courier SpA.
Sundry payables attributable to BancoPosta 76 8 84 76 10 86 of which attributable to BancoPosta RFC 76 8 84 76 10 86
Cu rrent liab ilit ies Tot al of which attributable to BancoPosta RFC - 14 14 - 11 11
USO. Compensation for services rendered in 2015 was recognised in the amount of €262 million, tab. C1 - Revenue from sales and services (€m)
Automated franking by third parties and at post offices 827 882
 Electoral subsidies relate to amounts paid by the state to cover reductions and preferential prices granted to election candidates under Law 515/93.
Remuneration of current account deposits (deposited with the M EF) 34 73
Income from investments in securities derives from the investment of deposits paid into postal current accounts held by private customers. The total includes the impact of the interest rate hedge described in section A5.
 Revenue from insurance brokerage derives from fees receivable from the subsidiaries, Poste Vita and
This relates to income from ordinary activities that is not directly attributable to the specific Postal services and
Foreign exchange gains 5 3 tab. C3 - Other operating income (€m)
(1) This item primarily regards the recovery of expenses incurred directly by Poste Italiane SpA and passed on to tenants. This category does not include extraordinary maintenance costs.
notice. Given the resulting lack of certainty, the expected revenue flows from these leases are not referred to in these notes. No significant extraordinary maintenance costs were transferred to tenants via increases in rents.
This item breaks down as follows: tab. C3.2 - Lease rentals (€m)
Lease expense breaks down as follows: Real estate leases relate almost entirely to the buildings from which the Company operates (post offices,
Delivery Logistics Centres and Sorting Centres). Under the relevant lease agreements, rents are increased annually on the basis of the price index published by the Istituto Nazionale di Statistica (ISTAT, the Italian
Office for National Statistics). Lease terms are generally six years, renewable for a further six. Renewal is assured from the clause stating that the lessor "waives the option of refusing renewal on expiry of the first term", by which the lessor, once the agreement has been signed, cannot refuse to renew the lease, except in cases of force majeure. Poste Italiane SpA has the right to withdraw from the contract at any time, giving six months’ notice, in accordance with the standard lease contract.
Personnel expenses include the cost of staff seconded to other organisations. The recovery of such expenses, determined by the relevant chargebacks, is posted to other operating income. Personnel expenses break down as follows: Net provisions for disputes with staff and provisions to restructuring charges are described in section B4.
Net provisions (reversals) for disputes with staff [tab. B4] (12) (7)
Industrial patents and intellectual property rights 178 203 tab. C8 - Other operating costs (€m)
Net provisions and losses on doubtful debts (uses of provisions) (63) 71
(1) Finance income on discounted receivables includes: €8 million in interest on amounts due from staff and INPS under the fixed-term contract settlements of 2006, 2008, 2010, 2012 and 2013 and €3 million in interest on amounts due for the publisher tariff subsidies.
(2) For the purposes of reconciliation with the statement of cash flows, for 2015 these items total €52 million (€68 million in 2014).
Income from financial assets at fair value through profit or loss 1 -
Foreign exchange gains(2) 6 3 tab. C9.2 - Finance costs (€m)
I t em Year end ed 31 Decemb er 2015 Year end ed 31 Decemb er 2014 tab. C10.1 - Reconciliation between the theoretical IRES tax rate and the effective IRES tax rate (€m)
Deduction from IRES of IRAP on personnel expenses (4) -0.63% (53) -19.42%
Adjustments for change in IRES tax rate introduced by 2016 Stability Law 20 3.36% - -
Decemb er 2014 tab. C10.2 - Reconciliation between the theoretical IRAP tax rate and the effective IRAP tax rate (€m)
Under IAS 12 – Income Taxes, IRES and IRAP credits are offset against the corresponding current tax liabilities, when applied by the same tax authority to the same taxable entity, which has a legally enforceable right to offset and intends to exercise this right.
prepayments for the current year 189 30 219 199 215 414 balance payable for the previous year - - - - 3 3
The following table shows deferred tax assets and liabilities: The nominal tax rates are 27.5% for IRES and 3.9% for IRAP (+/- 0.92% resulting from regional surtaxes and/or relief and +0.15% as a result of additional surtaxes levied in regions with a health service deficit). The
deducted for income tax calculation purposes, it will be necessary to re-calculate the IRAP deducted in previous years in relation to these events”. For this reason, “Net non-recurring income/(expense) related to deferred taxation recognised in profit or loss” is due to deferred IRAP tax assets - in the amount of €24 million, in relation to past provisions that will be deductible in future, when they are actually utilised – and deferred
Furthermore, article 1, paragraph 61 of the 2016 Stability Law (Law 208/2015), has cut the IRES rate to 24%
from 1 January 2017 for financial years starting after 31 December 2016. For this reason, the accounts for the year ended 31 December 2015 show “Net non-recurring expense recognised in profit and loss” of €20 million and “Net non-recurring income for deferred taxation recognised in equity” of €109 million, due to the adjustment to the new IRES rate of deferred taxation that will be utilised after 31 December 2016.
Non-recurring income/(expense) recognised in equity due to adjustment to IRES rate [tab. C10.8] 109 -
At 31 December 2015, deferred tax assets and liabilities recognised directly in equity are as follows: * The impact of the adjustment to the IRES rate on deferred tax assets recognised on accrued employee termination benefits for 2014 which, based on actuarial calculations, exceed the amount calculated in accordance with article 2120 of the Italian Civil Code.
In addition, a €26 million reduction in current tax expense, calculated on the deductible amount of unrealised actuarial losses on the employee termination benefits, has been recognised directly in equity. Therefore, during the year under review, equity declined by €229 million as a result of income tax expense.
P resent value o f emplo yee terminat io n benef its
Income/(Expenses) recognised in equity - (52) - - 34 (25) (43)
Income/(Expenses) recognised in profit or loss 1 - (19) 16 - 3 1
IRES rate tab. C10.7 - Movements in deferred tax liabilities (€m)
Income/(Expenses) recognised in profit or loss 1 - (6) - (5)
Income/(expenses) recognised in profit or loss due to adjustment to IRES rate - - - - -
Impact of related party transactions on the financial position and results of operations
Provisions for doubtful debts from external related parties - - (156) (9) - - - - -
Balance at 31 Decemb er 2015 tab. 4.4.2 - Impact of related party transactions on the financial position at 31 December 2014 (€m)
Ministry of the Economy and Finance 6,130 117 1,388 549 934 - - 95 21
Provisions for doubtful debts from external related parties - - (170) (10) - - - - -
At 31 December 2015, total provisions for risks and charges made to cover probable liabilities arising from transactions with related parties external to the Group attributable to trading relations amount to €9 million
The nature of the Company’s principal transactions with related parties external to the Group is summarised below in order of relevance.
Banca del Mezzogiorno-MedioCredito Centrale SpA 2 34 2 - - - - - -
Consorzio Servizi Telef. Mobile ScpA - - - - - 99 - - -
Ministry of the Economy and Finance 560 1 2 - - 2 - (64) -
Other related parties external to the Group 17 1 - - - 16 40 - -
Consorzio Servizi Telef. Mobile ScpA - - - 1 - 93 - - -
The costs incurred with the CDP Group refer mainly to software maintenance and electronic payment card management services performed by SIA SpA.
 Amounts received from the Eni Group relate primarily to payment for mail shipments and collection and accounting for utility payments. The costs incurred relate to the supply of fuel for motorcycles and vehicles and the supply of gas.
Poste Italiane SpA and its subsidiaries that apply the National Collective Labour Contract are members of the
Board of Statutory Auditors) is shared equally between the workers and the companies that are members of the Fund. The Fund’s Board of Directors takes decisions including: the general criteria for the allocation of risk in terms of investments and investment policies; the choice of fund manager and custodian bank.
Cash and cash equ ivalent s 1,198 401 (79) 1,520 391 of which re lat ed part y t ransact ions
Balance at 31 Decemb er 2015 Capit a l ou t sid e r ing - fence BancoPost a RFC Eliminat ions
At 31 December 2015, the fair value reserves related to available-for-sale financial assets amount to €3,455 million (€2,307 million at 31 December 2014), inclusive of the relevant taxation.
Loans from Cassa Depositi e Prestiti (3) - - (3) (3)
Cash and cash equ ivalent s 198 942 ( 154) 986 934 of which re lat ed part y t ransact ions
tab. 4.5.3 - ESMA net financial indebtedness for capital outside ring-fence (€m)
I . Cu rrent financia l liab ilit ies ( F+G+H) ( 603) ( 2,254)
N. Non-cu rrrent net d eb t ( K+L+M) ( 1,245) ( 1,251)
O. Ind u st r ia l net d eb t ( ESMA gu id elines) ( J+N) ( 73) ( 2,659)
There were no transfers of financial instruments measured at fair value between level 1 and level 2 of the hierarchy on a recurring basis in 2015.
In accordance with IFRS 7 – Financial Instruments: Disclosures, this section provides details of financial assets and liabilities that are subject to a master netting agreements or similar arrangements, regardless of whether the financial instruments have been offset in keeping with paragraph 42 of IAS 32
In particular, the disclosures in question concern the following positions at 31 December 2015:  derivative assets and liabilities and related collateral, represented by both cash and government securities;  repurchase and reverse repurchase agreements and related collateral, represented by both cash and government securities.
Tot al financia l asset s at fa ir valu e 32,723 666 116 33,505 29,177 254 5 29,436
Financial liabilities attributable to BancoPosta - (1,547) - (1,547) - (1,720) - (1,720)
Tot al financia l liab ilit ies at fa ir valu e - (1,598) - (1,598) - (1,778) - (1,778)
tab. 4.5.5 - Financial assets/liabilities offset in the statement of financial position, or subject to a master netting agreement or similar arrangements (€m)
Financia l asset s at t r ib u t ab le t o BancoPost a [A5]
Financial liabilities arising from repos (4,885) (4,895) (4,949) (5,613) (5,639) (5,663)
Future commitments related to property leases, which may generally be terminated with six months’ notice, break down by due date as follows: Guarantees
Su ret ies and ot her gu arant ees issu ed : by banks in the interests of Poste Italiane SpA in favour of third parties 162 137 by Poste Italiane SpA in the interests of subsidiaries in favour of third parties 54 69 letters of patronage issued by Poste Italiane SpA in the interests of subsidiaries 1 4
At 31 December 2015, the Company had paid a total of €119 million in claims on behalf of the Ministry of
The following table shows fees, classified in accordance with art. 149 duodecies of the “CONSOB Regulations for Issuers”, payable to PricewaterhouseCoopers SpA and companies within its network for 2015 (€000): (*) The above amounts do not include incidental expenses and charges. (**) The amounts shown do not include fees for auditing services performed in respect of funds managed by BancoPostaFondi SGR SpA
Auditing services are expensed as incurred and reported in the audited financial statements. This item reflects, for 2015, additional services for €100 thousand, as approved by the Copmpany’s shareholders at the Annual
Securities subscribed by customers held at third-party banks 5,992 7,747 tab. 4.6.5 - Disclosure of fees paid to Independent Auditors (€000)
Su b sid iar ies of Post e I t a liane SpA
The attestation services rendered by PricewaterhouseCoopers SpA regarded mainly the engagement performed in connection with the IPO.
Company and on a centralised basis, definition of the capital structure for Poste Italiane SpA and the Group, and the assessment of funding transactions and extraordinary and subsidised transactions is, on the other hand, the responsibility of Administration, Finance and Control.
 Poste Italiane SpA’s financial transactions primarily relate to BancoPosta’s operations, asset financing and liquidity investment.
BancoPosta RFC’s operations consist in the active management of liquidity generated by postal current account deposits, carried out in the name of BancoPosta but subject to statutory restrictions, and collections and payments on behalf of third parties. The funds deposited by private account holders in postal current accounts are invested in euro zone government securities
Following the amendment of art. 1, paragraph 1097 of Law 296 of 27 December 2006, introduced by art. 1, paragraph 285 of the 2015 Stability Law (Law 190 of 23 December 2014), it became possible for BancoPosta RFC to invest up to 50% of its deposits in securities guaranteed by the Italian government. As of 1 April 2015 the match between customers’ deposits and related investments, which is verified on a quarterly basis, relates to the amortised cost calculated on the ex coupon value of the financial instruments held in portfolio. Before, the equivalence was measured based on the nominal value of the instruments.
See in particular the provisions laid down in Part I – Section IV – Chapter 3.
Operations not covered by BancoPosta RFC, primarily relating to management of the Parent Company’s own liquidity, are carried out in accordance with investment guidelines approved by the Board of
 Financial instruments held by the insurance company, Poste Vita SpA, primarily relate to investments designed to cover its contractual obligations to policyholders on traditional life policies and index-linked and unit-linked policies. Other investments in financial instruments regard investment of the insurance company’s free capital.
The impact of financial risk on investment performance can be absorbed in full or in part by the insurance provisions based on the level and structure of the guaranteed minimum returns and the profit-sharing mechanisms of the “separate portfolio” for the policyholder. The company determines the sustainability of minimum returns through periodic analyses using an internal financial-actuarial (Asset-Liability
Index-linked and unit-linked products, relating to Class III insurance products, regard policies where the premium is invested in structured financial instruments, Italian government securities, warrants and mutual investment funds. For this type of product, issued prior to the introduction of ISVAP Regulation 32 of 11 June 2009, the company does not guarantee capital or a minimum return and, therefore, the associated financial risks are borne almost entirely by the customer. However, in the case of policies issued after the introduction of the Regulation, the company assumes sole liability for solvency risk associated with the instruments in which premiums are invested, providing a guaranteed minimum return only when called for by contract. The company continuously monitors changes in the risk profile of individual products, focusing especially on the risk linked to the insolvency of issuers.
Poste Assicura SpA’s investment policies are designed to preserve the Company’s financial strength, as outlined in the framework resolution approved by the Board of Directors on 18 June 2015. Regular analyses of the macroeconomic context and market trends for the different asset classes, with the relevant effects on asset-liability management, are conducted. For the non-life business, such analyses do not consider guaranteed minimum returns but, rather, focus on the management of liquidity in order to meet claims.
Balanced financial management and monitoring of the main risk/return profiles are carried out and ensured by dedicated organisational structures that operate separately and independently. In addition, specific processes are in place governing the assumption and management of and control over financial risks, including the progressive introduction of appropriate information systems.
Against this backdrop, Poste Italiane SpA’s Board of Directors has adopted regulations containing integrated guidelines for Poste Italiane SpA’s Internal Control and Risk Management System (Guidelines for Internal
 the Finance, Savings and Investment Committee, which is responsible for establishing policies governing management of the savings of retail customers, as well as strategies to be applied in managing the
The risk environment is defined on the basis of the framework established by IFRS 7 – “Financial Instruments: Disclosures”, which distinguishes between four main types of risk (a non-exhaustive classification):  market risk;  credit risk;  liquidity risk;  cash flow interest rate risk.
Cash flow interest rate risk refers to the uncertainty related to the generation of future cash flows, due to interest rate fluctuations. Such risk may arise from the mismatch – in terms of interest rate, interest rate resets and maturities – of financial assets and liabilities until their contractual maturity and/or expected maturity
The principal financial assets subject to price risk and the results of the analysis carried out as at 31 December 2015 for the Poste Italiane Group are shown in the following table.
Available-for-sale financial assets 1,427 162 (162) 146 (146) - - 16 (16)
Fair value through profit or loss 245 58 (58) 58 (58) - - - -
Fair value through profit or loss (liabilities) - - - - - - - - 2014 effect s
Available-for-sale financial assets 1,184 69 (69) 54 (54) - - 15 (15)
Available-for-sale financial assets mainly refer to the Parent Company’s investments in equity instruments and
Poste Vita SpA’s position in other investments, represented by equity mutual investment funds.
At 31 December 2015, equity instruments include:  Shares held by BancoPosta RFC, totalling €71 million. These are mainly Class B Mastercard Incorporated shares which, for the purposes of the sensitivity analysis, are matched with the corresponding amount of the Class A shares, considering the volatility of the shares listed on the NYSE;  Shares held by Poste Vita SpA in the Class I separately managed portfolios, totalling €8 million.
In relation to financial assets recognised at fair value through profit or loss, price risk concerns investments held by Poste Vita SpA, totalling €10,004 million, of which €1,395 million used to cover Class III policies, €8,606 million used to cover Class I policies and €3 million in mutual fund units held in the Company’s free capital.
Sensitivity analysis of the items subject to foreign exchange risk was based on the most significant positions, assuming a stress scenario determined by the levels of exchange rate volatility applicable to each foreign currency position considered to be material. The test applies an exchange rate movement based on volatility during the year, which was considered to be representative of potential market movements.
At 31 December 2015, this item primarily refers to equity instruments held by Poste Italiane SpA denominated in US dollars and Special Drawing Rights.
+ Vol 260d d - Vol 260d d + Vol 260d d - Vol 260d d + Vol 260d d - Vol 260d d 2015 effect s
Available-for-sale financial assets 68 56 4 (4) - - 4 (4)
+ Vol 260d d - Vol 260d d + Vol 260d d - Vol 260d d + Vol 260d d - Vol 260d d 2015 effect s 2014 effect s
Equ it y reserves b efore t axat ionI t em Posit ion in
Foreign exchange risk refers to the net receivable/(payable) position in SDRs, a synthetic currency resulting from the weighted average of the exchange rates of four major currencies (the euro, US dollar, British pound and Japanese yen) and used worldwide to settle debits and credits among postal operators.
This refers to the effects of changes in interest rates on the price of fixed rate financial instruments or variable rate financial instruments converted to fixed rate via cash flow hedges and, to a lesser degree, the effects of change in interest rates on the spread of floating rate financial instruments or fixed rate financial instruments converted to variable rate via fair value hedges. The impact of these effects is directly related to the financial instrument’s duration.
Nominal Fair valu e +100b ps -100b ps +100b ps -100b ps +100b ps -100b ps +100b ps -100b ps 2015 effect s
Available-for-sale financial assets 101,896 116,437 (6,272) 4,044 (4,822) 3,460 - - (1,450) 584
Financial assets at FV through profit or loss 8,042 8,128 (249) 100 (249) 100 - - - -
Available-for-sale financial assets 93,811 105,957 (5,596) 4,778 (4,446) 4,446 - - (1,150) 332
Financial assets at FV through profit or loss 7,904 7,920 (267) 267 (265) 265 - - (2) 2
Fair value though profit or loss (50) (7) 4 (5) - - 4 (5) - -
They include:  fixed-rate government bonds (inclusive of the CDP bonds) held by Poste Vita SpA, totalling €70,522 million (of which €6,918 million in inflation-indexed bonds); of this amount, €67,199 million is used to cover Class I and V policies linked to separately managed funds, €3,323 million relates to the Company’s capital;  €30,915 million in government bonds held by BancoPosta RFC, which consist of: fixed rate bonds amounting to €11,131 million; variable rate bonds converted into fixed rate bonds via cash flow swaps amounting to €2,177 million; variable rate bonds amounting to €2,681 million and fixed or variable rate bonds converted to variable-rate positions via fair value hedges amounting to €14,926 million;  €11,585 million in other, non-government bonds held by Poste Vita SpA, used mainly to meet obligations towards policyholders in relation to separately managed Class I and V policies;  €1,500 million in fixed-rate bonds issued by CDP, and guaranteed by the Italian government, held by
covering Class I and V contractual obligations, and investments with a fair value of €569 million, relating to bonds issued by CDP SpA to cover Class I policies.
Within the context of financial derivatives, the risk in question concerns the decrease in fair value, in the amount of €5 million, of a derivative contract entered into by the Parent Company in 2013 to hedge the cash flows of the bond with a nominal value of €50 million issued on 25 October 2013 (note 3.3, tab. A5.10). The cash flow hedge of the derivative in question kicked in on 25 October 2015, when the bond began paying variable interest rates. Before this date, the derivative was recognised at fair value through profit or loss.
At 31 December 2015, with reference to the interest rate risk exposure determined by the average duration of the portfolios, the duration of BancoPosta’s overall investments went from 5.2 to 5.58. On the other hand, with respect to Class I and Class V policies sold by Poste Vita SpA, the duration of the matching assets went from 5.43 at 31 December 2014 to 6.19 at 31 December 2015 while the duration of the liabilities went from 5.43 to 7.05. The financial instruments intended to cover the technical provisions for Class III have maturities that match those of the liabilities.
(from 138 bps at 31 December 2014). The progressive improvement in the market’s perception of Italy’s credit rating in 2015 has had a positive impact on the price of Italian government securities, generating fair value gains on those classified by the Group as available-for-sale (AFS), with some gains realised.
Duration is the indicator used to estimate the percentage change in price of in response to a shift in market returns (i.e. + 100 bps).
Available-for-sale financial assets 26,928 32,985 (3,058) 3,439 - - (3,058) 3,439 2014 effect s
I t em Posit ion Change in valu e Pre- t ax profit
Available-for-sale financial assets 74,176 82,632 (5,630) 5,630 (5,440) 5,440 - - (190) 190
Effect on liab ilit y t oward s policyhold ers Pre- t ax profit
Poste Italiane Group’s financial assets exposed to credit risk at 31 December 2015 are shown in the table below. The ratings reported in the table have been assigned by Moody’s.
Financial assets at FV through profit or loss 190 8,639 76 8,905 117 9,075 545 9,737
Fair value through profit or loss - 245 - 245 - 208 - 208
Credit risk arising from derivative transactions is mitigated through rating and group/counterparty concentration limits. In relation to BancoPosta RFC and BdM-MCC SpA, interest rate and asset swap contracts
are collateralised by deposits or the physical delivery of financial instruments (in accordance with Credit
Poste Italiane Group’s trade receivables exposed to credit risk at 31 December 2015 are shown in the table below.
Due from subsidiaries, associates and joint ventures 2 - 2 of which past due 569 632
The Company’s Other receivables and assets exposed to the risk in question at 31 December 2015 are shown in the table below.
Receivables due from staff under fixed-term contract settlements 232 (7) 253 (6)
Technical provisions for claims attributable to reinsurers 58 - 54 -
Accrued income and prepaid expenses from trading transactions 16 - 17 -
Lastly, with regard to financial assets, as required by Communication DEM/11070007 of 28 July 2011, implementing Document 2011/266 published by the European Securities and Markets Authority (ESMA) and later amendments, Poste Italiane SpA’s exposure to sovereign debt at 31 December 2015 is shown in the table below, which provides details of the nominal value, carrying amount and fair value of each type of portfolio.
Financial assets at FV through profit or loss 5,678 5,665 5,665 6,170 6,033 6,033
Assets, broken down by maturity, are shown above at nominal value and increased, where applicable, by interest receivable. The item “Investments in securities” includes financial instruments held by BancoPosta RFC
and the Group’s insurance policies. In particular, fixed rate instruments are shown on the basis of expected cash flows, which consist of principal and interest paid at the various payment dates.
The key point of note is the liquidity risk associated with the investment of customers’ current account balances and with the Class I and V policies issued by Poste Vita SpA.
As to the policies sold by Poste Vita SpA, in order to analyse its liquidity risk profile, the company performs
Cash flow interest rate risk refers to the uncertainty over future cash flows generated by variable rate instruments and variable rate instruments created through fair value hedges following fluctuations in market interest rates.
Sensitivity to cash flow interest rate risk relating to these instruments is calculated by assuming a parallel shift in the yield curve (+/- 100 bps).
Nominal +100 b ps -100 b ps +100 b ps -100 b ps +100 b ps -100 b ps 2015 effect s
The table below analyses the sensitivity of future cash flows for the Group’s financial assets at 31 December
Available-for-sale financial assets 8,138 9,458 (277) 277 (273) 273 (4) 4 2014 effect s
Financial statement balances at 31 December 2015 have been subjected to a stress test, based on actual volatility during the year, considered to be representative of potential market movements.
Date of reference of the analysis Position Change in value Pre-tax profit Equity reserves before taxation
Available-for-sale financial assets exposed to the risk in question regard primarily equities.
At 31 December 2015, equity instruments include:  Class B Mastercard Incorporated and Class C VISA Incorporated shares held by BancoPosta RFC, totalling €67 million and €3 million, respectively. For the purposes of the sensitivity analysis, the shares held in the portfolio are matched with the corresponding amount of the Class A shares, considering the volatility of the shares listed on the NYSE.
 Units of mutual investment funds, amounting to €6 million held outside the ring-fence as “Other investments”.
Drawing Rights. The table below shows the sensitivity to foreign exchange risk at 31 December 2015 of the
+ 260-day vol. - 260-day vol. + 260-day vol. - 260-day vol. + 260-day vol. - 260-day vol.
Date of reference of the analysis Position in USD Position in €
The table below shows the sensitivity analysis for the fair value interest rate risk at 31 December 2015 for the
Available-for-sale financial assets 23,941 28,751 (1,014) 206 - - (1,014) 206
Available-for-sale financial assets 500 569 (3) (7) - - (3) (7)
BancoPosta RFC;  €569 million in investments held outside the ring-fence.
(from 138 bps at 31 December 2014). The progressive improvement in the market’s perception of Italy’s credit rating in 2015 has had a positive impact on the price of Italian government securities, generating fair value gains on those classified as available-for-sale (AFS), with some gains realised.
Available-for-sale financial assets 23,941 28,751 (2,122) 2,384 - - (2,122) 2,384
Date of reference of the analysis Risk exposure Change in value Pre-tax profit Equity reserves before taxation
At 31 December 2015, available-for-sale financial assets attributable to BancoPosta RFC show a potential maximum loss of €260 million for the spread risk exposure alone (€238 million at 31 December 2014), while financial assets held outside the ring-fence show a potential maximum loss on available-for-sale financial assets of €4 million for the spread risk exposure alone (€2 million t 31 December 2014).
VaR is estimated on statistical bases over a 1-day time horizon and at a 99% confidence level). The analysis reveals the following:  financial assets attributable to BancoPosta RFC show a potential maximum loss on available-for-sale financial assets, relating to fair value interest rate risk and spread risk, of €332 million at 31 December
The changes that have occurred with respect to 31 December 2014 depend on the higher volatility of risk factors in 2015.
Credit risk refers to all financial instruments, except shares and units of mutual funds.
This risk is managed as follows:  minimum rating requirements for issuers/counterparties, based on the type of instrument;  concentration limits per issuer/counterparty;  monitoring of changes in the ratings of counterparties.
Poste Italiane SpA - Credit risk on financial assets attributable to BancoPosta (€m)
Available-for-sale financial assets - 32,415 - 32,415 - 28,751 - 28,751
Available-for-sale financial assets - 569 - 569 - 569 - 569
Balance at 31 December 2015 Balance at 31 December 2014 from Aaa to Aa3 from A1 to Baa3 Item from Aaa to Aa3 from A1 to Baa3 from Ba1 to Not rated Total
Credit risk arising from derivative transactions is mitigated through rating and group/counterparty concentration limits. In relation to BancoPosta RFC and BdM-MCC SpA, interest rate and asset swap contracts are collateralised by deposits or the physical delivery of financial instruments (in accordance with Credit
Poste Italiane SpA - Credit risk on other receivables and assets (€m)
Due from tax authorities - tax withholdings 1,219 - 1,116 -
Receivables due from staff under fixed-term contract settlements 232 (6) 254 (6)
Accrued income and prepaid expenses from trading transactions 6 - 7 -
Amount due under 2015 Stability Law implementing EU Court sentence - - 535 -
Nominal value Carrying amount Fair value Nominal value Carrying amount Fair value
Financial assets recognised at FV through profit or loss - - - - - -
Tot al liab ilit ies 24,776 14,020 18,549 57,345 27,916 10,976 16,823 55,715
The above table shows expected cash outflows at the date of the financial statements, broken down by maturity. The maturities of postal current account deposits are based on a statistical/econometric model of typical postal current account interest rates and maturities, in turn based on a prudent projection of the future volume of deposits. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2015.
Held-to-maturity financial assets 1,864 6,544 7,689 16,097 1,795 6,995 9,101 17,891
Cash and deposits attributable to BancoPosta 3,161 - - 3,161 2,873 - - 2,873
Assets, broken down by maturity, are shown above at nominal value and increased, where applicable, by interest receivable. The item “Investments in securities” is shown on the basis of expected cash flows, which consist of principal and interest paid at the various payment dates.
Lastly, for the proper evaluation of the liquidity risk attributable to BancoPosta RFC, it should be borne in mind that, unless they are restricted, investments in euro area government securities are highly liquid assets and can be used as collateral in interbank repurchase agreements to obtain short-term financing.
Financial liabilities due from the MEF (72) (1) 1 (1) 1 2014 effects
At 31 December 2015, cash flow inflation rate risk regards inflation-linked government securities not subject to cash flow hedges held by BancoPosta RFC for a nominal amount of €2,060 million and a fair value of €2,508 million. A sensitivity analysis showed negligible effects.
Operational risk refers to the risk of losses resulting from inadequate or failed internal processes, people and systems, or from external events. This category of risk includes losses resulting from fraud, human error, business disruption, systems failures, breach of contracts and natural disasters. Operational risk includes legal risk.
At 31 December 2015, the risk map prepared in accordance with the aforementioned framework shows the type of operational risks BancoPosta RFC’s products are exposed to. In particular: Event type Number of types
For each type of mapped risk, the Company has recorded and classified the related sources of risk (internal losses, external losses, scenario analysis and risk indicators) in order to construct complete inputs for the integrated measurement model. Systematic measurement of the mapped risks has enabled the Company to prioritise mitigation initiatives and attribute responsibilities to competent functions, in order to contain any future impact.
In the insurance business, the most significant events for the Group regard errors in the execution of processes.
In technical terms, mortality is one of the main risk factors for Poste Vita SpA, i.e. any risk associated with the uncertainty of a policyholder’s life expectancy. Particular attention is paid in selling pure life insurance policies, an area where procedures set underwriting limits to the capital and the age of the policyholder. In terms of
For products with the capital sum subject to negative risk, such as annuities, there are negative consequences when actual death frequencies are lower than the death probabilities realistically calculated (longevity risk).
The options embedded in the policies held in the portfolio include:  Surrender option;  Guaranteed minimum return option;
 Provisioning risk: referring to the risk that technical provisions are not sufficient to meet obligations to policyholders. This insufficiency may be due to incorrect estimates by the company and/or changes in the general environment.
The Group’s business is by its nature exposed to elements of reputational risk, linked to market performance and primarily associated with the placement of investment products issued by third-party entities (bonds, certificates and real estate funds) or by Group companies (insurance policies issued by the subsidiary, Poste
Vita SpA, and mutual funds managed by BancoPosta Fondi SpA SGR).
In this regard, in order to optimise the risk-return profile of the products offered to its customers, Poste Italiane
SpA has adopted competitive selection policies and procedures for third-party issuers, entailing the selection
of domestic and foreign issuers consisting solely of banks and other financial companies with investment grade ratings. In addition, in order to protect and safeguard the Group’s excellent reputation and public confidence in its operations and to protect its commercial interests from potential dissatisfaction among savers, significant monitoring activity is carried out throughout the Group to keep track of the performance of individual products and of changes in the risks to which customers are exposed; this involves conducting careful assessments based on the contractual nature of the products in question in terms of how they meet the needs of the various customers.
Italiane is closely monitoring market trends in order to protect its customers’ interests.
Uptime SpA) - were not awarded the contract and, on 30 December 2015, SDA terminated its relationships with these companies, as provided for in the relevant contracts, with effect from 1 July 2016. This termination could have repercussions for jobs at both companies and, on 2 March 2016, an Ordinary General Meeting of
Strictly in terms of employment law – even though no court document or formal letter of notice has been received so far – the possibility of disputes arising with staff employed by the two companies cannot be ruled out. Any claims will be assessed on merit in view of the actual circumstances.
This joint venture (71.43% owned by Gepin Contact SpA, 28.57% owned by SDA Express Courier SpA) did not take part in the tender as it did not meet the elevant requirements.
In 2011, as part of a criminal investigation of third parties, the Tax Office in Rome, acting on behalf of local judicial authorities, seized accounting and administrative documents from Postel SpA related to eprocurement transactions carried out in 2010 and, to a lesser extent, in 2011; as a precautionary measure, eprocurement operations were suspended in 2011. The company and its external legal advisors will consider what actions to take to best safeguard the company’s interests, should it be necessary.
On 27 February 2015, the tax authorities notified Poste Italiane SpA of an indictment for accounting irregularities before the Court of Auditors for the Lazio region, regarding a number of accounting records for the handling and distribution of revenue stamps in the years between 2007 and 2010. The hearing was held on 2 July 2015. With sentence no. 332 of 9 July 2015, the Court of Auditors for the Lazio region fined the
Upon conclusion of a general tax audit relating to the 2008 tax year, on 22 December 2011 BdM-MCC SpA
received an official tax audit report contesting the deductibility of €19.6 million in costs, relating to agreements effected in 2008 to settle disputes with the Parmalat Group. The report further claims that BdM-
In November 2011, the tax authorities notified EGI SpA of three notices of assessment for the years 2006, 2007 and 2008, resulting in the identification of the same irregularity in each of the three years. This concerned the application, for the purposes of IRES, of art. 11, paragraph 2 of Law 413/1991 to properties of historical and artistic interest owned by EGI and leased by it to third parties. Following the ruling of the
Provincial Tax Tribunal of Rome, on 21 March 2014, EGI was served two tax demands and, on 7 May 2014, the company proceeded to pay a total of approximately €2.1 million within the required deadline. On 23
September 2014, the Provincial Tax Tribunal of Rome upheld the company’s appeal, confirming in full the arguments put forward and rejecting the cross appeal submitted by the tax authorities. Following the successful appeal, on 10 June 2015, Equitalia reimbursed the full sum paid to EGI SpA. On 24 April 2015, the tax authorities notified EGI that they had filed an appeal with the Court of Cassation, requesting annulment of
the judgement on appeal in favour of the company, and on 12 June 2015 EGI SpA presented a cross appeal.
The litigation is currently pending before the Supreme Court of Cassation.
In 2009, the Regional Tax Office for Large Taxpayers (Agenzia delle Entrate - Direzione Regionale del Lazio -
Tax Tribunal's sentences regarding the disputes for the years 2004 and 2006 had not yet been filed, the
Tribunal in first instance postponed dealing with the appeal until 9 November 2015 in order to comply with the decisions of the Tribunal in second instance and to avoid making conflicting statements about identical cases. With a ruling filed on 24 December 2015, the Provincial Tax Tribunal of Rome found in favour of the company. To date, the tax authorities are still entitled to file another appeal. The likely outcomes of the tax disputes continue to be taken into account in determining provisions for risks and charges.
In 2012, the Agenzia delle Entrate - Direzione Regionale del Lazio - Settore, Controlli, Contenzioso e
Italiane SpA’s IRES, IRAP, VAT and withholding taxes for the 2009 tax year. The audit forms part of the normal two-yearly controls of so-called "large taxpayers" required by art. 42 of Law 388 of 23 December 2000. This audit was extended to include the 2010 tax year, exclusively regarding inspection of VAT exemption relating to postal services. The audit came to an end on 27 October 2014, with the findings being published in the official tax audit report and accepted by Poste Italiane SpA on 26 November 2014, leading to payment of taxes, interest and a fine of a limited total amount. With regard to the issue of the VAT exemption for postal services, the tax authorities did not find any irregularities, merely reporting the matter to the assessing office for 2009 and 2010. Subsequently, on 2 October 2015, the tax authorities closed the case.
On 22 July 2014, the Nucleo Polizia Tributaria Roma (Tax Police) commenced a tax audit relating to Postel SpA
regarding direct taxes and VAT for the tax years from 2009 to 2012 included, with the aim of producing a tax audit report on the violations identified as a result of a criminal investigation, which are described above in the section on litigation. This audit came to an end on 25 November 2014, with delivery of a tax audit report in which, with regard to the commercial transactions entered into by the e-procurement business unit, the right to deduct VAT from purchases, applied by the company in 2010 and 2011, is contested. To back up its defence, on 23 January 2015 the company filed observations pursuant to art. 12, paragraph 7 of Law 212/2000. On 21 December 2015, the tax authorities served a tax assessment notice to the Company, for fiscal year 2010, whereby, in confirming the opinion of the inspectors from the Finance Police on nondeductible VAT amounts for “subjectively non-existing” transactions, the company was ordered to pay €5.6
million plus interest and fines. Considering that the tax assessment notice contains a number of key aspects warranting a radical review of the assessment, and considering the remarks made under article 12, paragraph 7, of Law 212 of 27 July 2000, Postel SpA filed a tax settlement proposal. The likely outcome of this dispute continues to be taken into account in determining provisions for risks and charges
Legislative Decree 68 of 19 March 2001. In particular, the inspection regarded the company's alleged failure to pay social security contributions for employees and/or contractors used by Wizard Srl in the years from 2010 to 2014. The inspection was concluded on 8 October 2015 with delivery of a tax audit report, contesting the right to deduct VAT and the deductibility of IRAP applied by the company in the tax years 2010 and 2014. On 4 December 2015, the company filed a brief pursuant to article 12, paragraph 7, of Law 212/2000. On 21 December 2015, the tax authorities served the company with a tax assessment notice for 2010 where, in taking the view that the service contracts with Wizard Srl were instead employment contracts, it requested the company to pay VAT, IRES and IRAP totalling €0.2 million, plus penalties and interest. The lack of any basis for the inspectors’ claims suggests that, at present, it might be reasonably assumed that the matter will be closed in a positive manner.
Also regarding Postel SpA, various disputes relating to the statute of limitations for IRAP for the years 2004, 2005 and 2006 contested by the tax authorities, as well as an audit for the years from 2003 to 2006, were finally settled in July 2015, entailing payment of largely insignificant amounts.
Since 2012, the Istituto Nazionale per la Previdenza Sociale (INPS, the National Institute of Social Security)
office at Genoa Ponente has issued Postel SpA and Postelprint SpA (regarding which an agreement relating to a merger with Postel SpA was signed on 27 April 2015, effective for accounting and tax purposes from 1
In addition, as part of a criminal investigation of third parties (no. 36768/13 RGNR), the Guardia di Finanza – Nucleo Speciale Polizia Valutaria (Currency Police) in Rome began an audit of Postel SpA on 15 January 2015 in order to obtain all the records and documents regarding transactions between Consorzio PosteLink, now merged with the company, and Phoenix 2009 Srl.
Parent Company’s shareholder, in November 2008 Poste Italiane SpA made available €443 million plus interest of €41 million to the MEF, which collected the sum in January 2009. In implementation of the
European Court’s (by then definitive) decision, in accordance with art.1 para. 281 of the 2015 Budget Law,
European Commission reopened its review and appointed an external expert to determine whether (in accordance with art. 1, para. 31 of the 2006 Budget Law - Law 266 of 23 December 2005) the rates of interest earned by the Company on deposits with the MEF during the period from 1 January 2005 to 31 December 2007 were in line with market rates. The external expert has provided the Commission, on a preliminary basis, with an updated version of the analysis originally performed by the Commission. Poste Italiane will collaborate with the relevant national authorities to demonstrate the appropriate nature of the returns earned during the period in question.
regulations concerning state aid, regarding Alitalia Compagnia Aerea Italiana SpA (“Alitalia”), and submitted a series of requests for information on these matters to the Italian authorities. Subsequently, additional requests were submitted, to which the Italian authorities replied, partly based on information provided by Poste.
Company has abused its dominant position in the deregulated postal services market. The procedure aims to determine whether or not Poste Italiane SpA provides individual customers with services for which it does not charge VAT, thereby benefitting from an unjustified competitive advantage in being able to offer services exempt from value added tax. On 23 April 2013 Poste Italiane SpA was notified of the Authority’s ruling which, in brief, concluded that the national VAT legislation is not in keeping with that of the EU and, accordingly, must be disapplied. While the ruling did not result in any financial sanctions for the Company, it further concluded that Poste Italiane SpA had abused its dominant position by applying discounts – due to the non-application of VAT – that its competitors could not match, and gave the Company 180 days after
On 3 April 2015, replies to the requests for information received at the start of investigation were sent to the
Poste Italiane had adopted initiatives aimed at allowing customers to benefit from the bonus rate.
On 4 June 2015, the AGCM launched an investigation pursuant to art.8, paragraph 2 quater of Law 287/90, aimed at ascertaining whether actions taken by Poste Italiane were designed to prevent H3G SpA from accessing the post office network. In July 2015, the Authority accepted requests to participate in the investigation from Fastweb SpA and Vodafone Omnitel BV. At the same time as the procedure was launched in respect of Poste Italiane, PosteMobile was subject to an inspection by the Authority at its offices on 4 June 2015. The company, which was inspected as a third party in the proceedings, submitted a request to participate in order to demonstrate its lack of responsibility for any alleged violation. The hearing was held on 18 September 2015, and on 29 October 2015 the Authority released the results of its investigation. With the ruling adopted at a meeting held on 16 December 2015, the Authority deemed that Poste Italiane – at variance with the provisions of art. 8, paragraph 2 quater of Law 287/90 – failed, when requested, to offer a competitor of its subsidiary, PosteMobile, equal access to goods and services that are exclusively available from Poste Italiane, as they form part of the activities carried out within the scope of the Universal Postal
Lazio Regional Administrative Court on 25 February 2016. At the hearing convened to hear the application for interim relief, a hearing on the merits was scheduled for 9 March 2016.
PosteMobile also lodged an appeal against the final ruling before the Lazio Regional Administrative Court on
Moreover, on 23 December 2015, H3G SpA also submitted a writ of summons to the Court of Rome, citing
and net operating costs in the absence of such requirements. On 29 July 2014, the board of AGCom issued Resolution 412/14/CONS, approving the measure defining the method of calculating and quantifying the net cost of the universal postal service for 2011 and 2012. In confirming that the cost of the universal service for 2011 and 2012 is, in certain respects, unfair and thus merits compensation, the resolution quantified the cost for 2011 and 2012, respectively, as €381 million and €327 million, compared to sums recorded originally by Poste Italiane SpA for approximately €357 million and €350 million (see also note A7.3 in section 3). On 13 November 2014, Poste Italiane SpA challenged this resolution by filing an appeal before the Regional Administrative Court (TAR). A hearing has not been scheduled yet. On 23 September 2014, the Authority began the process covering the analysis and applicability of the method for allocating and assessing the net cost of the Universal Postal Service for 2013, and, on 24 July 2015, confirmed that such process would be extended to include 2014. On the other hand, the Authority has not yet notified the opening of proceedings related to the charges for 2015 which, according to the subsidy cap mechanism in the 2009-2011 Service Contract, should result in the receipt of €329.1 million, by Poste Italiane’s own calculation (note 2.4).
Further steps were taken to reinforce the processes and procedures designed to prevent money laundering and the financing of terrorism, as part of a structured compliance programme that will involve the progressive release of IT components and procedures. In particular, work has continued on the process for acquiring the information needed for “adequate checks” and on the implementation of operating procedures to support compliance with the obligation to refuse to carry out transactions and to return funds, in cases where it is impossible to conduct adequate checks. In addition, the rollout of the new IT platform to help in the process of flagging potentially suspect transactions was completed and, in order to make active cooperation more effective, an organisational procedure was introduced with the aim of improving and speeding up the procedures involved in reporting suspect transactions to Italy’s Financial Intelligence Unit (UIF).
Company sent related defence briefs to the Ministry of the Economy and Finance regarding each of the notified cases. Overall, at 31 December 2015, there are 26 pending proceedings at the Ministry of the
IVASS - Istituto per la Vigilanza sulle Assicurazioni (the insurance regulator)
On 29 may 2015, in response to certain press reports, the Data Protection Authority asked Poste Italiane SpA
to provide information regarding alleged processing of the personal data of persons operating at companies
In this context the Company submitted a statement to the judiciary and appeared as the injured party in the related criminal proceedings. It also duly submitted information to AGCOM. Poste Italiane has launched disciplinary proceedings regarding the staff involved in the activities as revealed by the findings of a specific preliminary investigation. A technical committee was set up to manage these proceedings in order to verify the findings regarding the contested audits, taking into account the defence arguments put forward by the parties concerned and any other evidence that may emerge.
So far 246 reprimands have been notified, entailing 15 dismissals and 156 disciplinary measures without dismissal relating to managerial and non-managerial staff. All these measures also refer to the Company’s right to take action to protect its rights and interests with respect to findings that may yet emerge and damages the Company may suffer for any reason or cause whatsoever. In the first quarter of 2015, a longterm transformation programme was launched aimed at increasing the level of automation of mail and parcel logistics procedures, in all processing phases, from collection to delivery, partly through the development of IT
support systems and platforms. This programme will enable a substantial strengthening of performance monitoring.
On 15 January 2014, at the end of an investigation launched in 2009, the Authority imposed a fine of €0.34 million on Postel SpA, which the company accounted for in its financial statements for 2013. The company appealed the Authority’s ruling before the Civil Court of Rome, requesting an injunction suspending its implementation, which was accepted by the judge with a ruling on 16 June 2014. On 21 January 2016, the designated judge reduced the fine by €0.1 million, rejecting the other preliminary exceptions raised on the merits. As a result of this decision, the relevant liabilities have been reduced accordingly.
Section 3 – Events after the end of the reporting period ........................................................................................ 364
Section 5 – Held-to-maturity financial assets – Item 50 ............................................................................................ 384
Section 7 – Due from customers – Item 70 .................................................................................................................. 385
Section 9 – Adjustments for changes in hedged financial assets portfolio – Item 90 .................................... 387
Section 11 – Property, plant and equipment – Item 110 ......................................................................................... 388
Section 3 – Debt securities in issue – Item 30 .............................................................................................................. 393
Section 4 – Financial liabilities held for trading – Item 40 ....................................................................................... 393
Section 5 – Financial liabilities designated at fair value – Item 50 ........................................................................ 393
Section 9 – Liabilities included in non-current assets held for sale and discontinued operations – Item 90
Section 3 – Dividends and similar income – Item 70 ................................................................................................. 404
Section 11 – Net losses/recoveries on property, plant and equipment – Item 170 ........................................ 408
Section 12 – Net losses/recoveries on intangible assets – Item 180 .................................................................... 408
Section 13 – Other operating income/(expenses) – Item 190 ............................................................................... 409
Section 14 – Profits/(Losses) on investments – Item 210 ......................................................................................... 409
Section 15 – Profits/(Losses) on fair value measurement of property, plant and equipment and intangible
Section 16 – Impairment of goodwill – Item 230 ....................................................................................................... 409
PART E – INFORMATION ON RISKS AND RELATED HEDGING POLICIES .............................................................. 413
Assets 10. Cash and cash equivalents 3,168,696,276 2,878,161,445 20. Financial assets held for trading - 30. Financial assets designated at fair value - 40. Available-for-sale financial assets 32,597,102,765 28,807,402,339 50. Held-to-maturity financial assets 12,886,100,728 14,099,685,123 90. Adjustments for changes in hedged financial assets portfolio (+/-) - 110. Property, plant and equipment - of which: of which Law 214/2011 - 140.
Non-current assets (or disposal groups) held for sale and discontinued operations - -
Liabil ities and equity 30. Debt securities in issue - 40.
Financial liabilities held for trading - 50. Financial liabilities designated at fair value - 70. Adjustments for changes in hedged financial liabilities portfolio (+/-) - 90. Liabilities included in non-current assets held for sale and discontinued operations - 120. Provisions for risks and charges: 384,292,349 357,819,174 a) post-employment benefits - 200.
60. Net fee and commission income 3,483,381,638 3,511,869,935 70. Dividends and similar income 478,412 404,203 80. Profits/(Losses) on trading 8,648,747 2,315,175 90. Fair value adjustments in hedge accounting 338,982 (1,028,474)
100. Profits/(Losses) on disposal or repurchase of: 426,100,371 381,488,236 a) loans and advances - b ) available-for-sale financial assets 426,100,371 381,488,236 c) held-to-maturity financial assets - 110.
Net income from banking activities 5,398,070,019 5,434,281,050 a) personnel expenses (95,364,883) (90,792,283)
Profits/(Losses) on fair value measurement of property, plant and equipment and intangible assets 240. Profits/(Losses) on disposal of investments - 250. Income/(Loss) before tax from continuing operations 857,841,412 691,356,597 260. Taxes on income from continuing operations (270,871,841) (251,692,032)
270. Income/(Loss) after tax from continuing operations 586,969,571 439,664,565 280. Income/(Loss) after tax from discontinued operations - 290. Profit/(Loss) for the year 586,969,571 439,664,565
Other components of comprehensive income after taxes reclassif ied to profit or loss 70. Hedges of foreign investments - 100.
Available-for-sale financial assets 926,865,737 1,049,396,010 110. Non-current assets held for sale - 120.
Share of valuation reserve attributable to equity-accounted investments - 130. Total other components of comprehensive income after taxes 887,980,380 1,113,926,367 140. Comprehensive income (Items 10+130) 1,474,949,951 1,553,590,932
Attr ibution of retained earnings - - - 150,000,000 - - - - (439,664,565) (289,664,565)
Valuation reserves Equity instruments Treasury shares Profit/(Loss) for the year Equity
Attr ibution of retained earnings - - - 200,000,000 - - - - (374,030,213) (174,030,213)
- gains/(losses) on hedging activities (-/+) (338,982) 1,028,474 - net losses/recoveries on impairment (+/-) 10,955,347 (215,152)
- financial assets held for trading - - - financial assets designated at fair value - - - available-for-sale financial assets (2,723,802,144) (1,292,166,718)
- due from banks: on demand 2,255,643 5,645,758 - due from banks: other (387,971,864) (546,017,289)
3. Cash f low from/(used for ) f inancial l iabil ities 2,535,499,139 386,974,657 - due to banks: on demand (3,119,823) 6,817,232 - due to banks: other (288,643,679) 2,059,854,500 - due to customers 2,901,878,024 (1,430,958,418)
- debt securities in issue - - - financial liabilities held for trading - - - financial liabilities designated at fair value - -
- issuance/purchase of own shares - - - issuance/purchase of equity instruments - - - dividends and other payments (289,664,565) (174,030,213)
NET CASH FLOW GENERATED / (USED) DURING THE YEAR 290,534,831 (199,434,943)
Cash and cash equivalents at end of the year 3,168,696,276 2,878,161,445
("IFRS") issued by the International Accounting Standards Board ("IASB"). These were endorsed for application in the European Union by European Regulation (EC) 1606/2002 of 19 July 2002, as transposed into Italian law by Legislative Decree 38 of 28 February 2005 governing the introduction of IFRS into Italian legislation. The term "IFRS" means all International Financial Reporting Standards, all International Accounting Standards
previously known as the Standing Interpretations Committee ("SIC") endorsed for application in the European
Union by EU Regulations issued prior to 22 March 2016, the date on which the Board of Directors of Poste
Commission regulation Title Effective date 28/2015 Annual improvements cycle 2010-2012 1 Jan 2016 29/2015 Amendments to IAS 19 - Defined Benefit Plans: Employee Contributions 1 Jan 2016 2173/2015 Amendments to IFRS 11 - Accounting for Acquisitions of Interests in Joint Operations 1 Jan 2016 2231/2015 Amendments to IAS 16 and IAS 38 providing Clarification of Acceptable Methods of Depreciation and Amortisation 2406/2015 Amendments to IAS 1 - Presentation of Financial Statements: Disclosures 1 Jan 2016 2441/2015 Amendments to IAS 27 - Separate Financial Statements: Equity Method in Separate Financial
Amendments to IFRS 10 - IAS 28 Sales or Contributions of Assets Between an Investor and its Associate/Joint Venture 11 Sept 2014
IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses 19 Jan 2016
“Banks' Financial Statements: Layouts and Preparation”, as amended, and of art. 2447 septies, paragraph 2, of the Italian Civil Code. On 27 May 2014, the Bank of Italy issued specific Supervisory Standards for BancoPosta
RFC (Circular 285/2013, Part Four, Section 1) which, in taking into account the entity’s specific organisational and operational aspects, has established prudential requirements that are substantially in line with those applicable to banks. The Standards also govern the requirements regarding capital adequacy and risk containment. The Separate Report relates to the year ended 31 December 2015, has been prepared in euros and consists of the statement of financial position, the income statement, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows and the explanatory notes. The statement of financial position, income statement and statement of comprehensive income consists of numbered line items and lettered line sub-items. Nil balances have also been presented in the statement of financial position, income statement and statement of comprehensive income for the sake of completeness.
. All figures in the notes are stated in millions of euros. Notes and account analysis have not been included for nil balances.
Section 3 – Events after the end of the reporting period
No material events occurred after the end of the reporting period for this Separate Report for the year ended
Assets 40. Available-for-sale financial assets 32,597 - 28,807 50. Held-to-maturity financial assets 12,886 - 14,100 -
Liabil ities and equity 120. Provisions for risks and charges 384 - 358 200. Profit/(Loss) for the year (+/-) 587 - 440 -
BancoPosta intends to contract out a major operating process or a control procedure, whether in its entirety or in part, to Poste Italiane SpA in accordance with specific Operating Guidelines, it must give prior notice to the Bank of Italy. In accordance with Bank of Italy Circular 285 issued on 17 December 2013, Part Four,
Authority and, on 23 April 2015, the first set of commitments was submitted. On 12 May 2015, following a hearing held at the Authority’s offices, the proposed commitments were revised and added to and a second set of commitments was submitted. On 12 June 2015, the Authority notified its rejection of the proposed set of commitments and its intention to ascertain whether any violation had occurred. On 3 July 2015, the
During 2015, three violations of anti-money laundering legislation by BancoPosta RFC were notified to Poste
The CONSOB commenced a general inspection of the investment services offered by BancoPosta in April 2013, pursuant to art. 10, paragraph 1 of the Consolidated Law on Finance. The inspection was completed in
May 2014 and, based on the results, the regulator issued a report on 7 August 2014, noting a number of areas
Financial assets held for trading are initially recognised on the settlement date for debt and equity securities, whereas, for derivative contracts, on the subscription date. Financial assets are initially recognised at fair value which is generally the price paid. Any changes in fair value occurring between the trade and settlement dates are recognised in the Separate Report.
Financial assets are derecognised when the contractual rights to the cash flows of those financial assets lapse or when the financial asset is sold and all risks and rewards relating to the financial asset are substantially transferred.
Available-for-sale financial assets are recognised at fair value and any resulting fair value gains or losses are recognised in an equity reserve. This reserve is only recycled to profit or loss when the financial asset is effectively disposed of (or settled) or, in the event of accumulated losses, when there is evidence that the impairment recognised in equity cannot be recovered.. Solely in the case of debt securities, if the fair value subsequently increases as the objective result of an event that took place after the impairment loss was recognised in profit or loss, the value of the financial instrument is reinstated and the reversal recognised in profit or loss.. The recognition of returns on debt securities under the amortised cost method takes place through profit or loss, as do the effects of movements in exchange rates, whilst movements in exchange rates relating to available-for-sale equity instruments are recognised in a specific equity reserve.
Held-to-maturity financial assets are initially recognised on settlement date. They are initially recognised at fair value which is generally the price paid. When recognition in this category arises in connection with the reclassification of available-for-sale financial assets, the fair value of the asset at the date of reclassification is deemed to be the asset's amortised cost.
Loans and advances are non-derivative, unlisted financial instruments largely consisting of deposits at the
Ministry of the Economy and Finance (the MEF) which are expected to generate income of fixed amounts or which can be determined. Receivables relate to operations and are trade in nature. Loans and advances are recognised on settlement whereas receivables are recognised on the relevant invoice date.
Receivables, loans and advances are derecognised when the contractual rights to the cash flows of those financial assets lapse or on disposal of the financial asset and all risks and rewards relating to the financial asset are substantially transferred.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges after initial recognition is recognised in a specific equity reserve (Cash flow hedge reserve). A hedging transaction is generally considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. Amounts accumulated in equity are recycled to profit or loss in the period in which the hedged item affect profit or loss.
on trading, for the relevant year. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the related gains and losses accumulated in the cash flow hedge reserve at that time remain in equity and are recognised in profit or loss at the same time as the original underlying.
Current income tax expense (IRES and IRAP) is based on the best estimate of taxable profit for the period and the related regulations, applying the rates in force. Deferred tax assets and liabilities are calculated on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts, using tax rates that are expected to apply when the related deferred tax assets are realised or the deferred tax liabilities are settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
BancoPosta RFC is not a separate legal person and is not either directly or indirectly assessable to taxes.
Universal Postal Service, as examined by Poste Italiane SpA's independent auditors as part of the statutory audit.
Provisions are measured on the basis of management’s best estimate of the use of resources required to settle the obligation. The value of the liability is discounted at a rate that reflects current market values and takes into account the risks specific to the liability. In those rare cases, in which disclosure of some or all of the information regarding the risks in question could seriously prejudice BancoPosta RFC’s position in a dispute or in ongoing negotiations with third parties, BancoPosta RFC exercises the option granted by the relevant accounting standards to provide limited disclosure.
13 – Due to banks, Due to customers and Debt securities in issue a) recognition and classification
Due to banks and customers are measured at amortised cost employing the effective interest rate method. The carrying amounts of payables are restated in the event of a change in projected cash flows which can be reliably estimated. The restated carrying amount is that present value of projected cash flows discounted at the original internal rate of return.
Financial liabilities are derecognised when repaid or in the event that BancoPosta RFC transfers all liabilities and charges associated with the relevant instrument.
14 – Financial liabilities held for trading a) classification and recognition
Since, for defined benefit plans, the amount of benefits payable can only be determined subsequent to the cessation of employment, the related cost and obligations can only be estimated by actuarial techniques in accordance with IAS 19.
Defined benefit plans include employee termination benefits payable to employees in accordance with article 2120 of the Italian Civil Code. Benefits vesting up to 31 December 2006
, which are covered by the reform of supplementary pension provision, must, from 1 January 2007, be paid into a supplementary pension fund or into a Treasury Fund set up by INPS. Accordingly the BancoPosta RFC’s defined benefit liability is applicable only to the provisions made up to 31 December 2006.
Supplementary Pension Fund or a Treasury Fund at INPS. Contributions to defined contribution plans are recognised in profit or loss when incurred, based on their nominal value.
Other long-term employment benefits consist of benefits not payable within twelve months of the end of the reporting period during which the employees provided their services. Generally, there is not the same degree of uncertainty regarding the measurement of other long-term employee benefits as there is in relation to postemployment benefits. As a result, IAS 19 permits use of a simplified method of accounting: the net change in the value of the liability during the reporting period is recognised in full in profit or loss. Measurement of the other long-term employee benefits liability is recognised in the financial statements based on calculations performed by independent actuaries.
In accordance with IFRS 2 – Share-Based Payments, the entity to which the employee belongs recognises the transaction by offsetting the increase in share capital with the recognition of a cost, regardless of whether these shares are assigned by it or by its direct or indirect parent. Consequently, given that it is not necessary to be in the Group’s employ at the end of the period in question to receive the bonus share, the total cost incurred, determined on the basis of actuarial calculations, was recognised on the subscription date, was not spread over the holding period and will not be recalculated during such period.
Italiane's commercial network, are normally recognised on line 150 b) - Other administrative expenses.
This section provides a description of accounting treatments that require the use of subjective estimates and for which a change in the conditions underlying the assumptions used could have a material impact on
The fair value of financial instruments that are not traded on an active market is based on prices quoted by external dealers or on internal valuation techniques which estimate the transaction price on the measurement date in an arm’s length exchange motivated by normal business considerations. The valuation models are primarily based on market variables, considering where possible, the prices in recent transactions and quoted market prices for substantially similar instruments, and of any related credit risk. Further details on the techniques used to measure the fair value of unquoted financial instruments are contained in Part A, Section
BancoPosta RFC is prohibited by Presidential Decree 144 of 14 March 2001 from making loans to customers.
A.4.1 Fair value levels 2 and 3: valuation techniques and inputs
The assets and liabilities concerned (specifically assets and liabilities carried at fair value and carried at cost or amortised cost, for which fair value is required to be disclosed in the notes) are classified with reference to a hierarchy that reflects the materiality of the sources used for their valuation.
For BancoPosta RFC, these include the following types of financial instrument:  Straight Italian and international government and non-government bonds, quoted on inactive markets or not at all: valuation is based on discounted cash flow techniques involving the computation of the present value of future cash flows, inputting rates from yield curves incorporating spreads reflecting credit risk that are based on spreads determined with reference to quoted and liquid benchmark securities issued by the issuer, or by other companies with similar characteristics to the issuer. Yield curves may be slightly adjusted to reflect liquidity risk relating to the absence of an active market.
 Unquoted equities, for which it is to use the price of quoted equities of the same issuer as a benchmark.
 Buy and Sell Back agreements used for the short-term investment of liquidity: valuation is based on discounted cash flow techniques involving the computation of the present value of future cash flows. Buy and Sell Back agreements may be pledged as collateral and the fair value, consequently, need not be adjusted for counterparty risk.
 Financial liabilities either quoted on inactive markets or not at all, consisting of repurchase agreements used to raise finance are valued using discounted cash flow techniques involving the computation of future contractual cash flows. Repos may also be used for collateral and in such cases fair value need not be adjusted for the counterparty credit risk.
Level 3: this category includes the fair value measurement of assets and liabilities using inputs which cannot be observed.
There is no need to provide the additional disclosures required by IFRS 13, paragraphs 51, 93(i) and 96.
A.4.5.4 Assets and liabilities not designated at fair value or not measured at fair value on a recurring basis by fair value level
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 1. Held-to-maturity financial assets 12,886 15,057 - - 14,100 16,263 - 4. Property, plant and equipment held for investment purposes - - - - - - - 5. Non-current assets (or disposal groups) held for sale - - - - - - - 4. Liabilities included in non-current assets held for sale and discontinued operations - - - - - - - -
Asset s/ Liab ilit ies not d esignat ed at fa ir valu e or not measu red at fa ir valu e on a recu rr ing b asis b y fa ir valu e level
Section 1 – Cash and cash equivalents – Item 10 1.1 Cash and cash equivalents: analysis
The sub-item “Cash” is comprised of cash at post office counters and companies that provide cash transportation services, consisting of cash deposits on postal current accounts, postal savings products
Section 2 – Financial assets held for trading – Item 20 2.1 Financial assets held for trading: analysis
BancoPosta RFC had no financial instruments in the trading book either at 31 December 2015 or 31
During the year under review, a number of repurchase agreements with a nominal value of €108 million were entered into and settled, with the purpose of converting the return, for 2015, on public customers’ current account deposits deposited with the MEF from a variable to a fixed rate.
Profits or losses on such transactions are reported in Part C, Table 4.1.
Section 3 – Financial assets designated at fair value – Item 30
No financial assets are held in portfolio designated at fair value through profit or loss (the "fair value option”).
Section 4 – Available-for-sale financial assets – Item 40 4.1 Available-for-sale financial assets: analysis
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 2. Equ it y inst ru ment s - 71 111 - 56 -
Debt securities carried at fair value total €32,415 million (€302 million of which being accrued interest). At 31
Equity instruments comprise:  €68 million relating to the fair value of 756,280 Class B shares in MasterCard Incorporated. These equity instruments are not quoted on a regulated market but may be converted into an equal number of Class A
 €3 million relating to the fair value of 11,144 Class C shares in Visa Incorporated. These equity instruments are not quoted on a regulated market but may be converted into an equal number of Class A shares, which are listed on the New York Stock Exchange, if disposal is desired;  €111 million relating to the fair value of an ordinary share in Visa Europe Ltd, previously allocated to Poste
Italiane at transaction closing, expected by the end of June 2016 – subject to clearance from the relevant authorities – was estimated by the investee to be €111 million, including €83 million in cash and €28 million in Visa Inc. stock (Convertible Participating Preferred Stock) convertible into class A shares within 12 years of the closing.
Decemb er 2014 1. Deb t secu r it ies 32.415 28.751 a) Governments and Central Banks 30.915 28.751 b) Other public entities - 2. Equ it y inst ru ment s 182 56 a) Governments and Central Banks - b ) Other public entities - -
There was a net increase of €969 million in the fair value of debt securities, for which a fair value hedge was not arranged, during the period under review, with a gain of €1,401 million recognised in a separate equity reserve, and a net loss of €432 million on the hedged portion recognised in profit or loss (Part C, Table 5.1).
At 31 December 2015, €187 million of the aggregate fair value of the held-to-maturity portfolio was accrued interest.
Tot al fa ir valu e 5.3 Micro-hedged held - to -maturity financial assets
A . Du e from Cent ral Banks - 3. Reverse repurchase agreements - x x x - x x x 1.1 Current accounts and demand deposits 3 x x x 6 x x x - Reverse repurchase agreements 417 x x x - x x x 2.2 Other debt securities - x x x - x x x
The sub-item, “Other loans, Other” includes cash collateral held by counterparties for asset swaps (pursuant to
Credit Support Annexes) entered into for cash flow and fair value hedging purposes by BancoPosta RFC.
Section 7 – Due from customers – Item 70 7.1 Due from customers: analysis
The sub-item, “Other transactions”, primarily consists of:  €5,871 million, €16 million of which being accrued interest, in public customers’ current account deposits deposited with the MEF, which earn a variable rate of return, calculated on a basket of government securities
; during 2015, BancoPosta RFC entered into derivative contracts to convert part of the return on the longer-term component of such deposits to fixed rate; the purpose of the transaction was to stabilise the return on this component, for 2015, through a series of repurchase agreements of 7-year
BTPs, without delivery of the underlying securities at maturity but with settlement of the difference between the forward price of the securities and their market value;  €390 million, €1 million of which being accrued interest, in deposits at the MEF (the "Buffer account"), remunerated at the EONIA rate
Italian Treasury for losses resulting from theft and fraud. This liability derives from cash withdrawals from the Treasury to make up for the resultant losses, in order to ensure that post offices can continue to operate;  payables of €34 million for operational risks, relating to advances from the MEF for transactions for which there were insufficient funds;  €397 million in fees and commissions receivable from Cassa Depositi e Prestiti during the year in connection with postal savings, which under the agreement signed on 4 December 2014 are invoiced on a quarterly basis;  €578 million in amounts receivable from Poste Italiane SpA’s functions outside the ring-fence, €577 million of which relates to Poste Italiane SpA’s Finance function’s intersegment account, used for the processing of payments to and from third parties.
The rate in question is calculated as follows: 50% is based on the return on 6 month BOTs, with the remaining 50% based on the monthly average Rendistato index. The latter represents the average yield on government securities with maturities greater than 2 years, which approximates the return on 7-year BTPs.
The rate applied in overnight lending and calculated as the weighted average of overnight rates for transactions on the interbank market reported to the ECB by a panel of banks operating in the euro zone (the biggest banks in all the euro zone countries).
Section 8 – Hedging derivatives – Item 80 8.1 Hedging derivatives by type of hedge and level
Tot al liab ilit ies - - - - - - - - 2. Portfolio of financial assets and financial liabilities x x x x x - x - -
Section 13 – Tax assets and liabilities – Assets Item 130 and Liabilities Item 80
adjustments to prior period taxes - 1 1 5 1 6 of which: Descr ipt ion
Deferred tax assets through equity 67 11 30 5 - - - - - - 97 16
Deferred tax liabilities through equity 786 149 27 5 813 154
a) relating to previous years - b ) due to changes in accounting policies - 2. 2 New taxes or tax rate increases (1) 3. 1 Deferred tax liabilities derecognised in the year 161 104 b) due to changes in accounting policies - 3. 2 Reduction of tax rate 117 -
Section 14 – Non-current assets (or disposal groups) held for sale/discontinued operations and related liabilities - Assets Item 140 and Liabilities Item 90
Section 15 – Other assets – Item 150 15.1 Other assets: analysis
Tax assets other than those included in item 130 326 380
Current account cheques being settled, drawn on other banks 85 69
 €41 million in withdrawals from BancoPosta ATMs yet to be debited to customer accounts or awaiting settlement;  amounts due from commercial partners for providing PostePay top-ups (€25 million) and processing payments slips, totalling €17 million, to be credited to beneficiaries;  unsettled debit card payments made at post offices, totalling €20 million;  account maintenance and custody fees of €5 million to be debited to customers.
"Other items" include:  €716 million in stamp duty accrued to 31 December 2015 payable by holders of outstanding Interestbearing Postal Certificates
. An equal amount has been recognised in "Other liabilities" as tax payables
Decemb er 1. Du e t o Cent ral Banks - 2. 1 Current accounts and demand deposits 283 286 2.4 Obligations to repurchase equity instruments - -
At 31 December 2015, €4,895 million is due to banks under the terms of repurchase agreements involving securities with a total nominal value of €4,569 million. These regard:  €4,111 million (€9 million of which being accrued interest) relating to Long Term Repos entered into with primary counterparties, with the resulting resources invested in Italian fixed income government securities of a matching nominal amount;  €784 million relating to ordinary borrowing operations via repurchase agreement transactions with primary financial institutions, in order to optimise the match between investments and short-term movements in current account deposits by private customers.
“Current accounts and demand deposits” include €79 million in postal current accounts held by Poste Italiane
“Loans, Other” refers to an amount due to Poste Italiane SpA’s functions outside the ring-fence in connection with the creation of BancoPosta RFC.
“Other payables” primarily consist of €1,438 million in prepaid PostePay card balances payable to customers and domestic postal orders, amounting to €396 million.
Section 4 – Financial liabilities held for trading – Item 40
Section 5 – Financial liabilities designated at fair value – Item 50
B . Cred it d er ivat ives - - - - - - - -
Fair Valu e at 31 Decemb er 2014 Not ional amou nt at
Section 10 – Other liabilities – Item 100 10.1 Other liabilities: analysis
Tax liabilities other than those included in item 80 881 734
Amounts due to Poste Italiane SpA outside the ring-fence for services rendered 187 306
Certificates in accordance with the requirements referenced in Part B, Assets, Table 15.1;  €106 million regarding taxes and road tax payable to collection agents, the tax authorities and regional authorities for payments made by customers;  €7 million in tax withholdings on current account interest earned by customers.
“Items in process, other” includes, among other things, domestic and international bank transfers, totalling €136 million, amounts received from the MEF to fund the payment of “fuel bonuses” to qualifying customers, totalling €89 million, and unpaid postal cheques of €46 million.
Measurement of the liability entails actuarial computations for which the following assumptions were used in
Key economic and financial assumptions 1.70% for 2018 1.50% for 2017 and 2018 1.50% for 2017 and 2018 1.60% for 2019 2.00% from 2019 on 2.00% from 2019 on 2.00% from 2020 on 2.775% for 2018 2.625% for 2017 and 2018 2.625% for 2017 and 2018 2.700% for 2019 3.000% from 2019 on 3.000% from 2019 on 3.000% from 2020 on
At 31 Decemb er 2015 At 30 Ju ne 2015 At 31 Decemb er 2014
Section 12 – Provisions for risks and charges – Item 120 12.1 Provisions for risks and charges: analysis
Provisions for disputes with staff regard liabilities that may arise following labour litigation and disputes of various type.
Provisions for personnel expenses are made to cover expected liabilities arising in relation to the cost of labour.
December 2015, the provisions represent the present value of total liabilities, based on a nominal value of €21 million, expected to be progressively paid off by 2043.
Decemb er 2014 1) Financia l gu arant ees issu ed - 2 ) Trad e gu arant ees issu ed - 3 ) I r revocab le commit ment s t o d isb u rse fu nd s - ii ) uncertain disbursement - ii ) uncertain disbursement - 4 ) Commit ment s u nd er lying cred it d er ivat ives: prot ect ion sales - 5 ) Asset s pled ged as collat eral for t h ird part y commit ment s - 6 ) Ot her commit ment s 400 129
Decemb er 2014 1. Financial assets held for trading - 2. Financial assets designated at fair value - 3. Available-for-sale financial assets 544 4. Held-to-maturity financial assets 4,474 6,062 7. Property, plant and equipment - -
“Held-to-maturity financial assets”, carried at amortised cost, relate to securities provided as collateral to counterparties of negative fair value hedging asset swaps and repos.
Amou nt 1. Execu t ion of ord ers on b ehalf of cu st omers 2. Port folio management 3. Cu st od y and ad min ist rat ion of secu r it ies 45,032 a) third party securities in custody: related to depository bank operations (excluding portfolio management) 1. securities issued by the reporting bank b ) third party securities in custody (excluding portfolio management): other 5,992 1. securities issued by the reporting bank c ) third-party securities deposited with third parties 5,992 d) own securities deposited with third parties 39,040 4. Ot her t ransact ions 243,320 a) Postal Savings Books 118,476 b) Interest-bearing Postal Certificates 124,844
The “Custody and administration of third-party securities deposited with third parties” relates to customers'
securities held at primary market operators and, to a much lesser extent, securities held has collateral. Except for securities held as collateral, orders received from customers are executed by qualified, designated credit institutions.
"Other transactions" include the principal of postal savings deposits accepted for and on behalf of Cassa
Tot al at 31 Decemb er 2014 49 - 49 49 - x -
Amou nt of financia l liab ilit ies offset in financia l st at ement s
Tot al at 31 Decemb er 2015 6,442 - 6,442 5,571 850 21 x
BancoPosta RFC is not a party to enforceable master netting arrangements or similar agreements meeting the requirements of IAS 32, paragraph 42 for offsetting in the financial statements. The above tables have been compiled in accordance with IFRS 7 – Financial Instruments: Disclosure, which requires a specific disclosure regardless of whether or not the financial instruments have been offset.
Decemb er 2014 1. Financial assets held for trading 1 - - 1 2. Available-for-sale financial assets 930 - - 930 913 3. Held-to-maturity financial assets 573 - - 573 632 6. Financial assets designated at fair value - - - - -
The sub-item, “Other liabilities and provisions – Other transactions” includes interest payable to Poste Italiane
“Management, brokerage and advisory services” include, within the context of the distribution of other products, fees receivable in return for the collection of postal savings deposits. This service relates to the provision and redemption of Interest-bearing Postal Certificates and payments into and withdrawals from
A. Own cou nt ers: 2,197 2,155 3. Third-party products and services 2,175 2,133 3. Third-party products and services - -
C. Ot her d ist r ib u t ion channels: - 3. Third-party products and services - -
The cost of “Management and brokerage services: financial instrument trading” relates to fees retroceded to qualified financial institutions for the execution of orders received from customers.
Section 3 – Dividends and similar income – Item 70 3.1 Dividends and similar income: analysis
During the year, BancoPosta RFC received dividends on its shares in Mastercard Incorporated and Visa
1. Financia l asset s held for t rad ing - 4 - ( 1) 3 2. F inancia l liab ilit ies held for t rad ing - - - - 4. Der ivat ive inst ru ment s 1 4 - - 5 - on debt securities and interest rates 1 4 - - 5 - on equity instruments and share indices - - - - - - on foreign exchange and gold x x x x -
A. Income on : A.1 Fair value hedge derivatives 469 -
B . Cost of: B.1 Fair value hedge derivatives (37) (1,329)
Section 7 – Profits/(Losses) on financial assets and liabilities designated at fair value
Writ e-off Ot her In t erest Ot her In t erest Ot her
Section 9 – Administrative expenses – Item 150 9.1 Personnel expenses: analysis
d) social security costs - e ) provision for employee termination benefits - (1)
h) cost of share-based payments - i ) other employee benefits (6) (5)
The cost of services provided by Poste Italiane functions outside the ring-fence relates to those services described in Part A - Accounting Policies, A.1, Section 4 - Other Information.
Section 12 – Net losses/recoveries on intangible assets – Item 180
Section 13 – Other operating income/(expenses) – Item 190 13.1 Other operating expenses: analysis
Decemb er 2014 2. Increase/(decrease) in current taxes of prior period taxation (+/-) 1 6 3. Reduction in current taxes (+) - 3.
Art. 1, paragraph 61 of the 2016 Stability Law (208/2015) has reduced the IRES tax rate from 27.5% to 24%
Non-recurring (income)/expense for taxes charged to profit or loss (10) -1.2% - 0.0%
Net non-recurring income for IRES and IRAP charged to profit or loss, totalling €7 million, regards the change in the regulations introduced by the 2015 Stability Law (190/2014), which permits the deductibility of personnel expenses for staff employed on permanent contracts from the IRAP tax base.
a) changes in fair value - - b ) reversal to profit or loss - - -
Ot her component s of comprehensive income reclassified t o profit or loss
The funds deposited by private account holders in postal current accounts are invested in euro zone government securities
Easing programme in 2015, have resulted in an increase of unrealised gains on securities carried in the financial statements, some of which recognised as realised gains in profit or loss.
Balanced financial management and monitoring of the main risk/return profiles are carried out and ensured by dedicated organisational structures, both within and without the BancoPosta ring-fence, that operate separately and independently. In addition, specific processes are in place governing the assumption and management of and control over financial risks. In this regard, Poste Italiane SpA’s Board of Directors has adopted regulations containing integrated guidelines for Poste Italiane SpA’s Internal Control and Risk
Directors to correctly and effectively determine the risk appetite framework and risk management policies;  the Cross-functional Committee, set up under the BancoPosta RFC Regulation and chaired by Poste
Amendment of art. 1, paragraph 1097 of Law 296 of 27 December 2006, introduced by art. 1, paragraph 285 of the 2015 Stability Law (Law 190 of 23 December 2014).
Credit risk relates to the possibility that a change in a borrower's credit rating could result in a loss, i.e., the risk that a debtor comes into full or partial breach of its repayment obligations for principal and interest.
Presidential Decree 144/2001 prohibits BancoPosta RFC from making loans to members of the public. As a result, there are no credit policies.
The nature of BancoPosta RFC's operations, however, results in a considerable concentration of exposure to
The role of BancoPosta RFC's Risk Management function is the management and control of credit, counterparty and concentration risks.
Repurchase Agreements);  securities provided as collateral in accordance with agreements intended to mitigate counterparty risk
(CSAs and GMRAs);  trade receivables payable for financial/insurance product arrangement.
The above limits for BancoPosta RFC are set out in Poste Italiane SpA’s guidelines for financial transactions, which also contain rating limits that only permit dealings with investment grade counterparties, whilst concentration limits are applied as required by prudential regulations for banks
In order to limit the counterparty risk’s exposure, partly for the purposes of prudential supervisory standards,
BancoPosta RFC has concluded standard ISDA master agreements and special agreements for the mitigation of risk for repo transactions (GMRAs) and OTC derivatives (CSAs). More specifically, the agreements provide for the netting of asset and liability positions and the posting of cash or government securities as collateral.
According to the prudential requirements, weighted risk exposure must at all times be below 25% of own funds. Exposures are normally equal to an asset's nominal value adjusting for any credit risk mitigation. Lower risk borrowers are assigned lower risk weightings.
The “Market Value” method to measure the risk inherent in derivatives entails summing two components: the current substitution cost, represented by fair value, if positive, and an add-on equal to the product of the nominal value and the probability that the fair value, if positive, increases the value or, if negative, turns positive.
A.1.2 Distribution of gross and net credit exposure by portfolio and credit quality
Cu mu lat ive losses Net exposu re Net exposu re 1. Financial assets held for trading - - -
Asset s of evid ent ly low cred it qu alit y
A.1.3 On and off-balance sheet credit exposure to banks: gross and net amounts and past-due categories
A.1.6 On and off-balance sheet credit exposure to customers: gross and net amounts and past-due categories
A.2.1 Distribution of on and off-balance sheet exposures by external rating classes
The rating agency equivalents of credit rating classes are shown below: As defined in the prudential requirements.
BancoPosta RFC has received securities as collateral with a fair value of €10 million as required by the agreements concluded for the mitigation of counterparty risk (GMRAs) as part of the financing in Repos.
Government s Ot her pu b lic ent it ies Finance companies Insu rance companies Non- finance companies
In compliance with the supervisory standards in force, the table for “Large exposures” shows information on exposures to customers or groups of connected customers that exceed 10% of total own funds. The exposures are determined with reference to total on-balance sheet risk assets and off-balance sheet transactions, without applying any risk weightings. Based on these criteria, the table includes entities that, despite having a risk weighting of 0%, represent an unweighted exposure in excess of 10% of own funds. Exposures to the Italian state shown in the table represent approximately 86% of the total carrying amount. The remaining exposures regard primary counterparties represented by European banks and other central counterparties in Italy.
However, in view of the fact that it cannot lend to the public, the Bank of Italy has exempted BancoPosta RFC
from application of the requirements regarding limits on large exposures. No further exemptions from the remaining obligations have been granted.
E.1 Financial assets sold but not fully derecognised: carrying amount and gross amount
E.2 Financial liabilities matched with assets sold but not derecognised: carrying amount
Held - t o-mat u r it y financia l asset s
Fair value interest rate risk is inherent in market rate euro zone government securities for which a fair value hedge has not been arranged. BancoPosta RFC's securities are predominantly natural fixed rate instruments or variable rate instruments transformed into fixed rate by cash flow hedges.
levels for the estimates. A maximum time horizon (cut-off point) of 20 years is currently used for private customer deposits, 10 years for PostePay cards and 5 years for Public Administration deposits, based on a 99% confidence level. This approach entails the computation of an ALM rate risk through the determination of asset/liability maturity gaps.
such as the duration of deposits, the value of investments and interest rate trends – that contribute to determining the measurement of exposure. In particular, the stress tests are based on an assumed reduction in the maximum time horizon (cut-off point) for private customer deposits, revaluation of the asset portfolio in response to adverse market movements, and non-parallel shifts in the interest rate curve.
Spread risk is inherent in euro zone government securities classified as available-for-sale financial assets. In 2015, the spreads between German bunds and government bonds issued by many other European countries, including Italy, continued to decline, in the case of 10-year terms to 97 bps at 31 December 2015 (from 138 bps at 31 December 2014). The progressive improvement in the market’s perception of Italy’s credit rating in 2015, primarily thanks to the ECB’s Quantitative Easing programme, has had a positive impact on the price of
Italian government securities, generating fair value gains on those classified as available-for-sale (AFS), with some gains realised.
BancoPosta RFC monitors the price risk to which its shareholdings are exposed by computing Value at Risk
The pattern of portfolio maturities results in the need to invest funds in euro government securities resulting in an exposure to risk of an increase in prices as a consequence of decreasing yields. Where appropriate,
The sensitivity of exposures to fair value interest rate risk was tested by assuming a parallel shift of the market yield curve of +/- 100 bps.
December 2014: 5.24). The sensitivity analysis is shown in the table.
Financial assets held for trading - - - - - - - -
Financial liabilities held for trading - - - - - - - 31 Decemb er 2014 var iab ilit y 23,941 28,751 ( 1,014) 206 - - ( 1,014) 206
Equ it y reserves b efore t axesAnalysis d at e Nominal valu e Fair Valu e Changes in valu e
Financial liabilities held for trading - - - - - - - 31 Decemb er 2014 var iab ilit y 23,941 28,751 ( 2,122) 2,384 - - ( 2,122) 2,384
Equ it y reserves b efore t axesAnalysis d at e Nominal valu e Fair Valu e
Maximum potential loss (VaR - Value at Risk), a statistical estimation with a time horizon of 1 day and a confidence level of 99%, is also computed by BancoPosta RFC to monitor market risk.
In order to jointly monitor spread and fair value interest rate risks, the following table shows the results of the
VaR analysis conducted with reference to available-for-sale financial assets and derivative financial instruments, taking into account the variability of both risk factors: (€m)
The increase in VaR at the end of the period, compared with 31 December 2014, reflects the increased duration of the securities held in portfolio, which has resulted in a rise in the component of VaR relating to spread risk.
Cash - Account held at Bank of Italy 216 1 - 118 - -
Due from customers - Due from customers (Poste Italiane SpA outside the ring-fence) 577 6 (1) 64 1 -
Due to customers (Poste Italiane SpA outside the ring-fence) (14) - - (68) (1) -
Net in t erest and ot her b anking income Nominal valu e
Cash flow interest rate risk at 31 December 2015 was primarily inherent in the placement of Public
Available-for-sale financial assets 31 Decemb er 2015 var iab ilit y 182 15 ( 15) - - 15 ( 15)
The above analysis excluded the fair value of the investment in the shares of Visa Europe Ltd, amounting to €111 million, as, at the date of this report, there is no historical data or other elements representative of potential market movements on which to base the stress test.
The Class B Mastercard Incorporated shares and Class C Visa Incorporated shares in portfolio were sensitivity tested using similar listed shares adjusting for 2015 volatility. The shares' price risk is also monitored daily through the computation of VaR.
Foreign exchange risk relates to losses that could be incurred on foreign currency positions, regardless of portfolio, through fluctuations in foreign exchange rates. BancoPosta RFC is exposed to this risk principally through foreign currency bank accounts, foreign currency cash and MasterCard and VISA shares.
Foreign exchange risk is controlled by the Risk Management function using the measurement of exposure to the risk in accordance with financial operations guidelines which restrict currency trading to the foreign exchange service and international bank transfers.
E. F inancia l d er ivat ives - Options - Other derivatives
d ays d ays d ays d ays d ays d ays 2015 Effect
Equ it y reserves b efore t axes Analysis d at e
Changes in valu e Net in t erest and ot her b anking income
Cent ral cou nt erpart ies 1. Deb t secu r it ies and in t erest rat es 13,455 - 8,995 2. Equ it y inst ru ment s and st ock ind ices - - - 5. Ot her u nd er lyings - - - -
A.8 OTC financial derivatives - banking book: notional amount, gross negative and positive fair value by counterparty - contracts falling within the scope of netting agreements
Non- finance companies Ot her ent it ies 1) Deb t secu r it ies and in t erest rat es 2) Equ it y inst ru ment s and st ock ind ices 3) Cu rrencies and gold 4) Ot her
Cont ract s fa lling wit h in t he scope of net t ing agreement s
1 year or less 1 - 5 years over 5 years Tot al
A.2 Financial derivatives on equity instruments and stock indices - - - -
B.1 Financial derivatives on debt securities and interest rates - 715 12,740 13,455
B.2 Financial derivatives on equity instruments and stock indices - - - -
C.1 OTC financial and credit derivatives: net fair value and future exposures by counterparty
Non- finance companies Ot her ent it ies 1) B ilat eral agreement s financia l d er ivat ives 2) B ilat eral agreement s cred it d er ivat ives 3) Cross prod u ct agreement s
In terms of BancoPosta RFC’s specific operations, liquidity risk regards the investment of current account deposits in euro zone government securities. The potential risk derives from a mismatch between the maturities of investments in securities and those of liabilities, represented by current accounts where the funds are available on demand, thus compromising the ability to meet its obligations to current account holders.
This potential mismatch between assets and liabilities is monitored via comparison of loan and deposit maturities, using the statistical model of the performance of current account deposits, in accordance with the various likely maturity schedules and assuming the progressive total withdrawal of deposits over a period of twenty years for private customers, 10 years for PostePay cards and five years for Public Administration customers. BancoPosta RFC closely monitors the behaviour of deposits taken in order to assure the model's validity.
In addition to postal deposits, BancoPosta also funds itself through:  LTROs, amounting to an outstanding €4.1 billion;  short-term deposits created through spot sales and forward purchases of BTP to optimise earnings and accommodate temporary shortfalls of current account balances or to meet cash obligations in connection with collateral contracts.
BancoPosta RFC's maturity mismatch approach entails an analysis of the mismatch between cash in and outflows for each time band of the maturity ladder.
BancoPosta RFC's cash is dynamically managed by treasury for the timely and continual monitoring of private customer postal current account cash flows and the efficient management of short-term cash shortfalls and excesses. In order to assure flexible investments in securities consistent with the dynamic nature of current accounts, BancoPosta RFC can also use the MEF buffer account within certain limits and subject to payment of a fee.
BancoPosta RFC’s liquidity is assessed, in the form of stress tests, through risk indicators (the Liquidity Coverage
(Bank of Italy Circular 262/2005, third Revision and relevant clarifications provided by the Supervisory Body), using accounting data reported for the residual contractual term to maturity.
On -b alance sheet liab ilit ies 45,369 140 298 392 177 242 502 3,601 - -
On -b alance sheet liab ilit ies - - - - - - - - - -
At 31 December 2015, the risk map prepared in accordance with the aforementioned framework shows the type of operational risks BancoPosta RFC’s products are exposed to. These are as follows: Operational risk
For each type of mapped risk, the related sources of risk (internal losses, external losses, scenario analysis and risk indicators) have been recorded and classified in order to construct complete inputs for the integrated measurement model.
Bank of Italy Circular 285/2013, the purpose of which was to implement EU Regulation 575/2013 (the socalled Capital Requirements Regulation, or “CRR”) and Directive 2013/36/EU (the so-called Capital
. Compliance with the metrics established by the RAF influences decisions regarding profit distributions as part of capital management.
A definition of the RAF is provided in the “Introduction” to Part E.
Posit ive reserve Negat ive reserve Posit ive reserve Negat ive reserve
Section 2 – Own funds and capital ratios 2.1 Own funds
According to the framework defined by the Bank of Italy, own funds consist of two levels:  Tier 1 Capital, in turn consisting of:
o Common Equity Tier 1 – CET1; o Additional Tier 1 - AT1; BancoPosta RFC’s own funds are all Common Equity Tier 1.
BancoPosta’s CET1 consists of:  other reserves, being revenue reserves, amounting to €1 billion originating from the creation of the ringfence, and any further amounts attributed by Poste Italiane SpA that meet the requirements for inclusion in own funds
CET1 b efore invest ment s t o b e d ed u ct ed and ad ju st ment s for t he t ransit ional reg ime ( A+/ - B )
Tot al own fu nd s ( F + L + P)
Tot al Common Equ it y T ier 1 - CET1 ( C - D +/ - E)
Transit ional reg ime - Impact on AT1 ( +/ - )
Based on prudential standards, BancoPosta is required to comply with the following minimum capital ratios:  Total capital ratio (the ratio of total own funds to total risk weighted assets - RWA
being the minimum requirement and 2.5% being the capital conservation buffer
Adjustment (CVA), the standardised approach provided for by EU Regulation 575/2013 is used.
In the case of BancoPosta RFC, credit risk derives primarily from exposures in the form of cash deposits and securities pledged as collateral (under counterparty risk mitigation agreements, such as CSAs and GMRAs), and trade receivables due from partners as a result of the distribution of financial and insurance products
The capital conservation buffer is designed to ensure a minimum level of regulatory capital under adverse markets conditions by enabling the build-up of high-quality capital outside periods of market stress.
The principal risk is operational, which absorbs approximately 80% of total prudential requirements. Credit risk amounts to €166 million, whilst the remaining amount absorbed regards counterparty risk (€14 million).
Ministry of the Economy and Finance - 7,646 - - - - -
Hed g ing d er ivat ives Ot her asset s
Banca del Mezzogiorno MCC SpA - - - - - 5 -
Poste Holding Participações do Brasil Ltda - - - - - - -
Impact of related party transactions on the results of operations for the year ended 31 December 2014
Other related parties external to the Group - - 3 - - - - -
Attestation of the Poste Italiane Group’s consolidated financial statements for the year ended 31 December 2015 pursuant to art. 154-bis , paragraph 5 of Legislative Decree 58/1998 and art. 81-ter of CONSOB Regulation 11971 of 14 May 1999 1. The undersigned, Francesco Caio, as Chief Executive Officer, and Luciano Loiodice, as Manager responsible for Poste Italiane SpA’s financial reporting, having also taken account of the provisions of art.154-bis, paragraphs 3 and 4 of Legislative Decree 58 of 24 February 1998, hereby attest to: - the adequacy with regard to the nature of the Poste Italiane Group and - the effective application of the administrative and accounting procedures adopted in preparation of the Poste Italiane Group’s consolidated financial statements during the period from 1 January 2015 to 31 December 2015.
2. In this regard, it should be noted that: - the adequacy of the administrative and accounting procedures adopted in preparation of the Poste Italiane Group’s consolidated financial statements was verified by assessment of the internal control system over financial reporting. This assessment was conducted on the basis of the criteria contained in the Internal Control–Integrated Framework model issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); - the assessment of the internal control system over financial reporting did not identify any material issues.
(This certification has been translated from the original which was issued in accordance with Italian legislation)