Total revenue 30,739 28,512 of which: from Postal and Business Services 3,893 4,074 from Financial Services 5,188 5,358 from Insurance Services 21,415 18,840 from Other Services 243 240
Investment during the period 699 437 of which in property, plant and equipment and intangible assets 488 436
Number of post offices 13,048 13,233 for the year ended 31 December (€m) 2015 2014
Express Delivery and Parcels handled by Group (volumes in million) 86 77
Number of PosteMobile SIM cards (average for the period in '000) 3,471 3,090 1 This figure includes transaction accounts.
(1) The Board of Directors was elected by the Ordinary General Meeting of 2 May 2014. The number of Directors was increased at the General Meeting of 31 July 2015 which, in keeping with the Company’s By-laws, increased the number of Board members in order to add new expertise and capabilities, partly to ensure an adequate composition of the various Board committees. The General Meeting voted to elect seven Board members and proceeded to elect Umberto Carlo Maria Nicodano and Chiara Palmieri, whose terms of office will expire at the same time as those of the existing Directors. In addition, on 7 August 2015, Antonio Campo Dall’Orto resigned from the Board with immediate effect and, on 10 September 2015, the Board – in accordance with art. 2386 of the Italian Civil Code and art. 14.4 of the By-laws – appointed Filippo Passerini to replace the departing Director. Mr Passerini’s election was then confirmed by the General Meeting of 23 September 2015.
(2) The Board of Statutory Auditors was elected by the Ordinary General Meeting of 25 July 2013 to serve until approval of the financial statements for the year ended 31 December 2015. Following the resignations of the Chairman, Biagio Mazzotta, and the alternates, Roberto Coffa and Patrizia Padroni, the Ordinary General Meeting of 23 September 2015 proceeded to replace the departing auditors, electing Maurizio Bastoni as a standing auditor and two alternates, Manuela Albertella and Alfonso Tono. At the same meeting, Benedetta Navarra was elected Chairwoman.
At the meeting held on 10 September 2015, the Board of Directors established 3 Board committees with responsibility for making recommendations and providing advice to the Board. The following committee members were appointed: Nominations Committee Remuneration Committee Audit and Risk Committee - Roberto Rao - Chairman - Filippo Passer in i - Chairman - Umberto Car lo Mar ia N icodano - Chairman - Chiara Palmier i - Elisabetta Fabr i - Chiara Palmier i - F ilippo Passer in i - Umberto Car lo Mar ia N icodano - Roberto Rao
Poste Italiane has issued shares, listed on the screen-based trading system (Mercato Telematico Azionario or
The corporate governance structure was revised during 2015, in keeping with the recommendations in the
Standards issued by the Bank of Italy and applicable to Poste Italiane in view of the unbundled activities conducted by BancoPosta RFC (Patrimonio destinato BancoPosta), following the creation of ring-fenced capital attributable solely to BancoPosta’s operations with effect from 2 May 2011.
In accordance with the provisions of the Italian Civil Code, the Board of Directors has delegated certain executive powers to the Chief Executive Officer and has established three Board Committees to provide recommendations and advice: the Nominations Committee, the Remuneration Committee and the Audit and
Risk Committee. The latter committee is also responsible for procedures relating to related parties and associated entities.
The role of the Chairwoman is to lead and oversee the Board of Directors, exercising the powers provided for by law and the Company’s By-laws, and those assigned by the Board of Directors’ meeting of 7 May 2014.
(”Implementation of Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts”).
With regard to the governance system adopted by BancoPosta RFC, the rules governing the organisation, management and control of BancoPosta's operations are contained in the specific BancoPosta RFC
May 2014, Poste Italiane, in conducting BancoPosta’s activities, is comparable – for the purposes of application of corporate governance regulations – to a major bank in terms of size and operational complexity.
Further information regarding the corporate governance structure is provided in Poste Italiane’s “Report on
During the year just ended, which witnessed the admission to listing of Poste Italiane SpA’s shares on the screen-based trading system (Mercato Telematico Azionario or “MTA”) operated by Borsa Italiana SpA, the
Plan reflects the Group’s goal of driving the country’s growth through the development of its business: Letters and Parcels, Financial Services and Insurance Services. The aim is to do this by leveraging its strengths in terms of human resources, multi-channel network and technology platforms.
The steps to be taken to achieve the targets set out in the Plan regard all the above aspects. An action plan, focusing on business processes and on the Group’s physical and technology assets, has been drawn up and is being implemented.
The Group’s strategies in Financial Services aim to consolidate profitability through: • targeted initiatives aimed at high-potential customers; • implementation of the new retail services model at 900 post offices; • a revamped range of loan products.
The following developments took place in the Asset Management and Insurance Services segments: • the acquisition of 10.3% of Anima Holding SpA, with the aim of developing new savings products; • expansion of the offering of protection and welfare products (pensions, assistance, healthcare), focusing above all on health insurance, with the acquisition, by the subsidiary, Poste Vita SpA, of SDS System Data
The Group's operations are divided into four operating segments: Postal and Business Services, Financial
Services, Insurance Services and Other Services, which are managed by dedicated Group functions and/or companies. The organisation is also based on two distribution channels for retail customers, on the one hand, and business and Public Administration customers, on the other. These channels operate alongside a series of
It should be noted that, as of 2016, following organisational changes that will be described below, the allocation of certain companies to the related operating segments will be modified. Specifically, BancoPosta
Fondi SpA SGR, which is currently allocated to the Financial Services segment, will form part of the Asset
Management segment, now called Insurance Services, while Poste Tributi ScpA, which is currently allocated to the Postal and Business Services segment, will join the Financial Services segment.
Legislative Decree 58/2011 provides that Poste Italiane SpA is the universal postal service provider for fifteen years from 30 April 2011. The efficiency of provision of the service is verified every five years by the Ministry for
Economic Development, based on an assessment performed by the regulator (AGCom - the Italian
Communications Authority). Letter post includes Poste Italiane SpA’s traditional postal services, direct marketing and innovative services for paper-based as well as electronic communications in addition to e-
Government services. Postel SpA provides communications services to businesses and public entities, offering a full range of services including mass printing and enveloping, electronic document management, direct marketing and commercial printing.
Courier SpA; • on 31 March 2015, Postel SpA signed an agreement to acquire Italia Logistica Srl's1 “Physical Document
Management” business unit, with effect from 1 April 2015; • on 30 April 2015, PostelPrint SpA was merged with and into Postel SpA. For tax and accounting purposes, this transaction was effective from 1 January 2015; • on 26 May 2015, a deed was signed to merge Italia Logistica into SDA Express Courier. For tax and accounting purposes, this transaction was effective from 1 June 2015.
PosteShop SpA sells various types of product to retail customers through dedicated channels (the website www.posteshop.it, paper catalogues and periodic flyers). In 2015 the company was engaged in finalising initiatives aimed at rationalising its operations ahead of the merger with and into Postel SpA, approved in
ScpA) as part of its postal service operations, in addition to air freight and passenger services for other customers.
Poste Energia SpA procures energy for the Poste Italiane Group, acting as a wholesale purchaser, and deals with energy saving projects for Poste Italiane SpA.
With a view to bringing property management and energy procurement under the control of a single company and combining EGI's know-how with Poste Energia SpA’s expertise in rationalising and optimising electricity procurement, the following took place in 2015: • on 6 October 2015, Poste Italiane SpA transferred its 100% interest in Poste Energia SpA to EGI SpA; • on 3 December 2015, Poste Energia SpA was merged with and into EGI SpA. For legal, tax and accounting purposes, the transaction was effective from 31 December 2015.
PosteTutela SpA offers secure funds logistics services (transport, escort, custody, currency counts), fixed and mobile security, as well as all types of surveillance and protection of sensitive data. These services are provided to Poste Italiane's operating units and customers outside the Group, for whom it primarily carries out the movement of cash and valuables.
The not-for-profit consortium, PosteMotori, serves as a jointly owned vehicle for its shareholders (Poste
(fraud analysis and management, credit checks, the management of payment orders for legal and other expenses, as well as postal savings products).
Mezzogiorno – MedioCredito Centrale SpA, the promotion of mutual funds carried out by BancoPosta Fondi
(BMPS) on 25 June 2015 for a total consideration of €210.5 million, equivalent to a price of €6.80 per share.
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.
The Insurance Services business is run by the Postevita insurance group, a registered insurance group that includes the parent, Poste Vita SpA, and its subsidiary, Poste Assicura SpA. The Group operates in the life and non-life insurance business.
Insieme ONLUS, of which Group companies are members, was established with start-up capital of €1 million provided by Poste Italiane SpA.
Another 123 project proposals were received during the first few months of the Foundation's operations, and 16 new projects, aimed at children, families and the elderly, were presented in February 2016. This outcome highlights Poste Insieme's capacity to activate a process of involvement and participation by staff members and local and national non-profit organisations, in confirmation of Poste Italiane's commitment to families and local communities and its widespread capacity to respond to their social needs.
The Group has an integrated, multi-channel distribution network, which serves the country's entire population via a physical network of post offices and staff on the ground and a virtual infrastructure with state-of-the-art multimedia channels.
,The Private Customer function manages the commercial front end and back office activities (pre- and postsales support) for the Private Customer, SME and the Local Government segments for which it is responsible, as well as overseeing the development of philately products, their distribution and marketing.
Back-office activities are partly carried out at post offices, and partly at 15 specialist service centres (Centralised
Service Teams) spread around the country which are the sole point of reference for post offices with regard to such activities3, handling both Private Customers and business customers.
Projects launched in 2014 were continued and new initiatives were defined in line with the organisational developments and corporate objectives provided for in the Business Plan.
Specialist Commercial Financial Promoters (206 at 31 December 2015), who are responsible for promoting and selling certain investment products and services, with a view to increasing market share and developing retail segment opportunities; 2 The rationalisation of the post office network, aimed at reducing universal service provision costs, is being carried out in accordance with the criteria laid down by the Ministerial Decree of 7 October 2008 and AGCom Resolution 342/14/CONS. 3 This regards the processing of certain products and services, such as current accounts, financial products, probate issues, and money laundering prevention requirements.
• regarding Customer Services: o in relation to the Centralised Service Teams, the development of specialist expertise at the various sites was fine-tuned and anti-money laundering initiatives were strengthened, partly in order to comply with Bank of Italy regulations. Business segment services were also boosted, including via the definition of dedicated post-sales initiatives together with establishment of the role of post-sales advisor; o service quality improvement also continued at Contact Centres, by bringing them into line with the standards applied by key players through the introduction of roles with responsibility for coordination and on-the-job training; • Corners, staffed by dedicated specialists in non-life insurance products, continued to be launched, with a view to ensuring an adequate market presence. At 31 December 2015, the number of Corners in operation stood at 59; • in the Philately segment, 7 Spazi Filatelia shops were reallocated to the nearest local Branch, in order to provide a more comprehensive and rapid response to network and the related customer requirements.
Moreover, in terms of SMEs and local government customers, the new business customer management model introduced in 2015 provides for the phasing out of business post offices via targeted actions based on their relevance in terms of sales and transactions. This review has resulted in 14 closures, 72 conversions to retail post offices and 162 mergers with neighbouring retail post offices.
At the same time, the role of business consultant was created to operate within post offices, with the aim of developing new business with this customer segment.
At highly complex Branches, the Business Commercial function has been established to provide direct support to specialists and an interface between the post office sales network and Area Offices.
Consequently, the commercial coordination model dedicated to this segment was also revised at Area Office level, in line with the changes that have taken place.
Group products and services regarding large companies, commercial partners and Central and Local
The initiatives implemented during 2015 regard consolidation of the function's organisational structure, the completion of initiatives launched in previous years, and adaptation to changes in the regulatory framework, with the trial of new mail handling and delivery procedures.
In terms of initiatives designed to improve the quality performance, a quality dashboard was introduced. This enables all the most important service provision processes to be monitored, with each process having its own specific indicators in order to assess the performances of the organisation as a whole and of each organisational unit (Distribution Centre/Primary/Secondary/Decentralised Distribution Centres) in terms of their assigned targets. Other initiatives were also launched, on a trial basis, to support the management of undelivered items. In particular, the “Digital signature for postmen and women” project was launched with the aim of improving customer care, efficiency and response times, whilst also helping in the gradual elimination of paper receipts.
In the second half of 2015, following authorisation by the regulator and the agreement with the labour unions of 25 September 2015, alternate day delivery was launched on a trial basis at 19 Distribution Centres in "unregulated" and "regulated" rural areas.
As part of the process of rationalising sorting activities, automated walk-sequencing was trialled at the
The application of new rates on 1 October 2015 saw the introduction of the Posta 4 product for retail customers, leading to lower priority volumes of mail. This has enabled a reduction in airmail routes from 9 to
Express Courier began. The new operating model will provide for a shared and integrated transport process, aimed at maximising vehicles' transport capacity and guaranteeing current levels of service, whilst cutting costs. Development of the network will also guarantee the interoperability of the logistical platforms (HUB), as well as flexibility in adapting to the development of the logistics and production network structure and the volumes to be handled.
continued, with the aim of redistributing capacity among the Logistic Network hubs, following the rationalisation of sorting centres. This has resulted in changes in the relevant areas.
At 31 December 2015, more than 3,800 post offices with Consulting Rooms catered for dematerialisation of contracts and financial transactions. In another 4,000 post offices, which are primarily one-person offices, dematerialisation of the main over-the-counter financial transactions has been provided for. Moreover, in order to simplify the commercial offering and the sale of financial services, the “New Savings Book Front-End”
and “New Postal Certificate Front-End” applications, enabling automated management of the procedure for opening a Savings Book, ancillary services and the issue of Interest-bearing Postal Certificates, were introduced at all post offices.
management regarding the BancoPosta Più and BancoPostaClick current accounts (opening, migration and upgrade).
Extension of the national ATM network, comprising 7,235 machines at 31 December 2015 (compared with 7,174 at 31 December 2014) continued, and new separate Postamat windows were created at some post offices (2,808 at 31 December 2015, compared with 2,759 at 31 December 2014), with a total of 3,920 counters dedicated to BancoPosta account holders (3,899 at 31 December 2014).
The new queue management system, which has simplified the process by which customers book the service they require, was installed at 720 post offices. The new technology infrastructure, using centralised architecture, enables the provision of a wide range of highly innovative services to customers, based on a multi-channel approach. Counter operations may also be booked by smartphone using a free app. In addition,
At 917 post offices, a free Wi-Fi service has been made available to customers.
December 2014), as was the number of insurance corners (59 at 31 December 2015, compared with 41 at 31
In 2015, the provision of services aimed at simplifying relations with the general public and the Public
Administration continued via the Sportello Amico network, including: local tax collection services; payment for healthcare services, which is also available at post offices outside the Sportello Amico network and regarding which agreements were entered into with other healthcare providers; the issue of birth, death and other certificates, and INPS statements (available throughout the network); and the issue of land registry documents. The delivery of Carta Acquisti (Social Cards) to EU and non-EU citizens5 and the home delivery of passports also continued.
Regarding customers from non-EU communities, who are mainly reside in certain cities, the number of mono and/or multi-ethnic post offices was increased. In these post offices, counter staff and consultants speak the languages of the various ethnic groups present. At 31 December 2015, this service model is operating in 18 post offices, including 2 mono-ethnic and 16 multi-ethnic post offices (one mono-ethnic and two multi-ethnic post offices at 31 December 2014).
Via this approach, management of the three areas of business – post and logistics; banking, savings and payments; insurance – is carried out, respectively, by the Mail, Logistics and Communication Services,
BancoPosta and Asset Management and Insurance Services functions. The latter function was set up in
The main initiatives implemented during 2015 include: Poste Italiane – Directors’ Report on Operations 2015 25
• setting up of the Digital Architecture and Services for the Public Administration function, which focuses on managing digital architecture innovation issues in Italy, as part of the current process of modernising public service provision to make it faster and more efficient; • creation of the Group Secretary, External Relations, Security and Safety function, which was assigned responsibility for all external communications, public affairs, regulatory matters and security and safety.
In addition, the Legal and Corporate Affairs function was established in January 2016, aimed at bring together the management of legal and corporate governance matters, and thereby obtaining operating synergies in business support activities.
Alongside the above slowdown in China, the main driving force behind the global economy, emerging nations saw opposing trends, with declining GDP in countries such as Russia and Brazil contrasting with growth in India, which outperformed China thanks to strong internal demand. Elsewhere, a number of Arab oil producers responded to falling sales and declining prices by announcing measures aimed at reducing their trade deficits.
In spite of a less favourable international environment, the euro zone’s recovery continued, driven by a number of internal factors, above all rising consumer demand. The European Central Bank’s Securities Markets
After a number of years of recession, Italy began to see a recovery, even if at a slower pace than the average for the EU as a whole. Export-led growth is being progressively replaced by a recovery driven by internal demand.
The third quarter of 2015 recorded an increase in household disposable income, which, combined with improved labour market conditions, generated a real improvement in consumption.
In addition, the fact that interest rates are at all-time lows is giving households access to credit on easy terms.
The services sector has begun to show signs of renewed expansion, whilst the construction industry has also seen an improvement. Confirmation of the modest recovery is provided by figures for lending, which has risen in recent months, even if the performance reveals notable differences across the various sectors and sizes of business.
The Italian economy is expected to see a progressive improvement in the coming months. The level of investment, which has so far made a modest contribution, could benefit from improved projections for demand and easier access to credit, partly thanks to the steps recently taken by the ECB. Whilst focusing its attention on strengthening the public finances, the government has introduced a number of measures in its
2016 Stability Law designed to stimulate both private and public investment. However, risks linked to the international environment remain: a further slowdown in emerging economies or events of a geopolitical nature could lead to renewed tensions in the markets and in the global economy.
adopted by the European Union and contained in the related EU regulations published up to 22 March 2016, the date on which Poste Italiane SpA’s Board of Directors approved the annual accounts.
Poste Italiane has included a number of indicators in this Report on Operations that have been derived from them. These provide management with a further tool for measuring the performances of the Parent Company and its subsidiaries.
In particular, in addition to the operating segment disclosures required by IFRS 8, management has proceeded to reclassify the income statement for the financial and insurance segments solely for the purpose of integrating and enhancing its assessment of the operating performance of the specific segments in which the Group operates.
WORKING CAPITAL – the sum of inventories, trade receivables and other receivables and assets, less technical provisions attributable to reinsurers, current tax assets, trade payables and other liabilities, and current tax liabilities.
GROUP NET (DEBT)/FUNDS - the sum of financial liabilities, technical provisions for the insurance business, financial assets, technical provisions attributable to reinsurers, cash and deposits attributable to BancoPosta and cash and cash equivalents. This indicator is also shown separately for each operating segment.
Services and Other Services segments - the sum of the following items, shown according to the format recommended by ESMA, the European Securities and Markets Authority (document 319 of 2013): financial liabilities after adjusting for intersegment transactions, current financial assets after adjusting for intersegment transactions and cash and cash equivalents.
INDUSTRIAL NET (DEBT)/FUNDS, before adjusting for intersegment transactions: this is the sum of net debt attributable to the sum of net (debt)/funds for the Postal and Business Services and Other Services segments before adjusting for intersegment transactions.
The contribution to operating profit from Financial Services is up 21% (€930 million in 2015, compared with €766 million in 2014). The Insurance Services segment recorded an excellent operating performance, with
Finally, in addition to the above improvement in operating profit, profit for the year of €552 million reflects a proportionate reduction in income tax expense compared with 2014, due primarily to the change in legislation that came into effect from 1 January 2015. This has made it possible to deduct personnel expenses for staff employed on permanent contracts from the IRAP tax base.
Other expenses from financial and insurance activities 689 76 613 n/s
Profit for the year 552 212 340 n/s n/s: not significant * This item includes €18,197 million in insurance premiums and €2 million in revenue attributable to the SDS group, in which Poste Vita SpA acquired a controlling interest in 2015.
The Poste Italiane Group’s total revenue for the year amounts to €30,739 million, marking an increase of 7.8%
Economy and Finance, in line with market trends, as well as a decrease in income from the distribution of postal savings products on behalf of Cassa Depositi e Prestiti SpA, linked to the agreed mechanism tying fees to the achievement of net savings inflow targets. The impact of the above was only partially offset by the positive performance of other income from financial activities, which is up from €404 million in 2014 to €442 million in 2015. This was primarily generated by the sale of available-for-sale financial assets, in the form of euro area government securities or, up to a maximum of 50%, of securities guaranteed by the Italian government8, in which the postal current account deposits of BancoPosta RFC’s private customers are invested.
investment and savings products, where the Group has built up a strong presence. Other income from financial and insurance activities is, however, down from the €3,368 million of 2014 to €3,215 million in 2015, reflecting fair value losses on the financial instruments held to cover obligations to policyholders.
Total revenue from Other Services is up €3 million (€243 million in 2015, compared with €240 million in 2014). This reflects improved operating results from Poste Mobile, making an important contribution to the
Other expenses from financial and insurance activities are up from €76 million in 2014 to €689 million in 2015, reflecting the greater impact of movements in the fair value of financial instruments, for the most part attributable to the subsidiary, PosteVita.
(*) This includes the following items described in note C8 to the consolidated financial statements: salaries and wages; social security contributions; employee termination benefits; temporary work; Directors’ fees and expenses; other costs (cost recoveries).
Personnel expenses are down 1.3% from the €6,229 million of 2014 to €6,151 million in 2015. This reflects a reduction in the average workforce employed during the period (over 930 fewer full-time equivalents on average in 2015, compared with the previous year).
Income tax expense is down from the €485 million of 2014 to €381 million in 2015. The effective tax rate is 40.77%, consisting of the sum of the IRES tax rate (36.42%) and the IRAP tax rate (4.35%). Compared with the figure for 2014, when the effective tax rate was 69.58%, the charge for the year under review benefits from the positive impact of the deductibility of personnel expenses for staff employed on permanent contracts from the IRAP tax base, introduced by the 2015 Stability Law.
The Postal and Business Services segment recorded an operating loss of €568 million (a loss of €504 million in
This performance reflects a decline of €442 million in total revenue, including a €181 million reduction in external revenue and a reduction of €261 million in intersegment revenue in 2015. This is due, on the one hand, to a reduction in traditional letter post and, on the other, to the different mechanism for the remuneration of services provided by the distribution network, reflecting a decrease in transfer payments by made BancoPosta RFC to other Poste Italiane functions, in accordance with the “General Guidelines governing the process of contracting out BancoPosta’s corporate functions to Poste Italiane” and in application of specific operating guidelines.
In contrast, costs are down €378 million, primarily due to a reduction in other operating costs (down €198 million compared with 2014), reflecting, among other things, the release of provisions made in previous years, linked to the procedures and timing involved in the collection of amounts receivable from the Ministry of the
Economy and Finance as Universal Service compensation. Reductions were also recorded for personnel expenses (down from €6,066 million in 2014 to €5,977 million in 2015) and depreciation, amortisation and impairments (down €84 million compared with 2014). This trend confirms the effectiveness of the cost efficiency drive launched in 2015.
Against this backdrop, a number of national regulators have begun to review the regulations governing postal services, with a view to ensuring the sustainability of the Universal Service provided by public providers, whilst at the same time opening up the market to competition.
In Italy, where the rate of decline in volumes since 2007 has been the fastest among all the main European operators, the approach adopted by the regulator (AGCom - the Italian Communications Authority) to provision of the Universal Postal Service has allowed Poste Italiane to proceed with its planned transformation of the postal service, necessary in order to continue to effectively meet the changing needs of customers in the digital age.
In contrast, the market for Express Delivery and Parcels continues to grow, primarily driven by the expansion of e-commerce. The value of online purchases in Italy reached €16.6 billion in 2015, up 16% on 2014 and equivalent to an increase of more than €2.2 billion (source: E-commerce B2C Observatory - School of
Raccomandata InCittà was launched in 16 cities on a trial basis. This tracked, signed-for product is aimed at customers who regularly need to send items that are delivered within their town of origin. The product includes the Pick-Up Light and Infodelivery Light services. The latter is designed to provide online reports for delivery outcomes. 2015 also saw the launch of the Extradoc range, a new non-universal service aimed at business customers and the Public Administration for tracked and signed-for items weighing up to 20 kg, to be delivered within 6 working days. The recorded mail segment also saw the launch of the Raccomandata
Market modular offering for mailing contract tenders, with additional functions that include notice of receipt.
Finally, other initiatives related to the launch of the new Paccoreverse service, which enables acceptance of a returned shipment at a post office or via pick-up from a home or business address, and the launch of Gamma
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.
Gepin Contact and, on 2 March 2016, an Ordinary General Meeting of Uptime SpA’s shareholders voted by a 9 From 1 January 2015, the transport of lithium batteries (shipped without equipment) is prohibited on passenger aircraft, and only allowed on cargo aircraft.
merely exercised – in the correct manner – its contractual right, by which, among other things, the parties had established that there can be no grounds for any claim for damages or compensation. From another standpoint, SDA’s conduct could not have been legitimately interpreted as giving Gepin any assurance that the contractual relationship would have continued.
On this basis, no appreciable elements currently exist to define and/or quantify any potential risks with respect to this matter, either in terms of possible disputes or with regard to reputation. However, given the above circumstances, future developments that might have an effect on profit or loss in reporting periods subsequent to the period ended 31 December 2015 cannot be excluded.
Efforts continued to enhance the philately offering with the launch of a new product, the “MiniFolder” which provides for limited edition numbering and the introduction of a new “forever stamp” – a first in Italian philatelic history. Indeed, for the first time ever, stamps with no expiry date or explicit face value have been produced and put on sale. One of the advantages is flexibility for users in the event of rate increases.
The most important issues were: “Turin, European Capital of Sport 2015”; the centenary of the birth of Alberto
Burri; the 70th anniversary of the Liberation; stamps to commemorate the First World War; the Milan 2015
Identity Management (SPID), steps were taken to enable Poste Italiane to obtain accreditation as a Digital
Identity Manager, something that took place on 19 December 2015. The SPID system, provided for by Legislative Decree 82 of 7 March 2005, the “Digital Administration Code”, amended by Law 98 of 9 August 2013, is the new system for accessing online services, created to simplify relations between the public, businesses and the Public Administration. It will enable citizens to access any
Following accreditation on 19 December 2015 and the signature of an agreement with the Agency for
Digital Italy, Poste Italiane, InfoCert and Tim (via the Telecom Italia group company, Trust Technologies) will make the first digital identities available from 15 March 2016.
Group Letter Post for the year ended 31 December (€m) 2015 2014 2015 2014
Direct Marketing and Unaddressed Mail 980 1,093 (113) -10.3% 192 209 (17) -8.1%
(**) Universal Service compensation also includes compensation relating to the ordinary parcels service. With regard to tariff subsidies, Law Decree 66/2014 has abolished subsidised tariffs from 1 June 2014, for both electoral publicity and for publicity regarding the voluntary contribution of 0.2% of personal income tax.
Total Express del ivery, Logist ics and Parcels 85,9 76,4 9,5 12,4% 610 587 23 3,9%
All European operators continue to register falling volumes for traditional postal services, in relation to the size of their domestic market, the extent to which digital services have developed and the scale of electronic billing by private and public entities. Moreover, in Italy the reduced demand for postal services has been accompanied by increasingly tough competition in the most profitable areas, a factor that is almost totally lacking in rural and mountain areas, where costs for a Universal Service provider like Poste Italiane continue to be high, thus discouraging alternative operators from entering the market.
performance of Registered Mail (12 million fewer items handled, corresponding to a fall in revenue of €21 million compared with 2014).
Direct Marketing and Unaddressed Mail volumes fell respectively by 10.3% and 8.1%, due to customers rationalising their mail spend.
Other revenue includes, among other things, services for publishers, which fell as a result of the continuing decline in the number of subscribers for printed publications and the increase in digital subscriptions.
Despite the negative impact of the industrial action that hampered the operations of SDA Express Courier during the year, the Express Delivery, Logistics and Parcels segment saw growth in the volume of items transported and in revenue, registering increases of 12.4% (9.5 million more items handled) and 3.9% (up €23 million), respectively, compared with 2014. This good performance is essentially due to growth in the National
Express Delivery segment, which registered a rise of 8 million in the number of items handled and a €26 million increase in revenue (volumes up 13.6% and revenue up 7%, compared with 2014) due to the good performances posted by Promopacco and Express Box, which are used for B2C shipments.
The International Express Delivery segment performed well (volumes up 9%, and revenue up 14%) thanks to the competitively priced Export Box product for business customers.
(*) Based on data certified by IZI at the request of AGCom. The figures for priority mail refer to the period January-September 2015, as the product was withdrawn from October and replaced by the Posta 1 product. As a result, the measured quality for the Posta 1 product relates to the period October-December 2015.
Postacelere Express Delivery 1 day 90.0% 84.6% 1 day 90.0% 84.2%
With Resolution 5/16/CONS of 14 January 2016, notified to Poste Italiane on 3 February 2016, AGCom confirmed the €50,000 penalty. Following this resolution, in a memorandum on 23 February 2016, the
In a memorandum dated 27 November 2015, AGCom asked IZI SpA to transfer its sample quality checks on
The Contratto di Programma (Service Contract) regulates relations between the Ministry for Economic
Development and Poste Italiane SpA in connection with the Universal Postal Service.
On 26 January 2015, the Ministry for Economic Development issued a Decree regarding Calculation and procedures for the payment of contributions by postal operators to the Autorità per le Garanzie nelle
Administrative Court ruled that the retroactive nature of the contribution for the years 2012-2014 was illegitimate, and therefore the final outcome of the dispute is awaited. Other regulatory measures regarding the sector include the draft of Law 3012 “Annual market and competition law”, presented by the government in June 2015, which in art. 18 provides for the repeal, from 10 June 2016, of art. 4 of Legislative Decree 261/99, giving Poste Italiane SpA exclusive rights (as the
Principal relations with the Autorità per le Garanzie nelle Comunicazioni (AGCom - the Italian
Specifically, in Resolution 395/15/CONS, the regulator defined the criteria to identify the municipalities affected by the new model, based on the particular geographical nature and type of infrastructure characterising mail delivery in Italy. Implementation of alternate day delivery (with delivery on Monday,
The regulator may restrict or influence the introduction of corrective measures relating to implementation of the second and third phases, whether arising from any comments made by the European Commission or to solve any problems identified during the monitoring process. Poste Italiane will be required to send quarterly reports to the regulator, including detailed information on cost savings made, problems encountered and any impacts on users. In addition, an annual summary report should be sent to the regulator and the European
Codacons has lodged an appeal before the Lazio Regional Administrative Court opposing the resolution.
Company sent AGCom a list of the 2,395 Italian municipalities involved.
With Resolution 396/15/CONS, AGCom also introduced some amendments to Resolution 728/13/CONS, regarding the regulation of Universal Postal Service rates.
In terms of priority mail, also from 1 October 2015, Poste Italiane's sole obligation is to charge fair, moderate and non-discriminatory rates. However, in the event that quality commitments are not met, AGCom is entitled to impose different prices for different levels of service and automatic compensation mechanisms.
The first priority mail target is measured in terms of "available" working days in order to enable implementation of alternate day delivery. Therefore, the target will be set at one, two or three working days after collection, depending on whether the collection and/or delivery area is affected by alternate day delivery.
The Italian Association of International Air Couriers (AICAI) challenged Resolution 396/15/CONS before the
Also in relation to universal service rates, on 1 December 2015, new rates were applied for domestic
Resolution 728/13/CONS also includes provisions regarding access to Poste Italiane’s network. Specifically,
AGCom established an obligation for the Company to provide access to postal services, at the request of third parties, under fair and reasonable conditions to be freely negotiated with the parties. Pending the appeal lodged by the Company against this ruling, Poste Italiane received two requests for access to the postal network, in February and October 2014. Neither of the two requests has reached a conclusion. Regarding the first request, in October 2014 the operator seeking access involved the regulator, which asked the parties to go ahead with negotiations. In January 2015, the operator informally notified Poste Italiane that it had reiterated the request for intervention to the regulator, owing to the persistent stalemate in the negotiations, following which the regulator has so far taken no action regarding the intervention request.
With Resolution 129/15/CONS of 11 March 2015, issued on completion of a procedure launched in 2013,
AGCom approved the “Regulations regarding the requirements to be met in order to offer postal services to the public” (Annex A of the Resolution). Applied on 24 March 2015, the Resolution sets out the conditions
On 27 May 2015, Nexive SpA and the Italian Association of International Air Couriers (AICAI) challenged the
Resolution before the Lazio Regional Administrative Court (also notifying Poste Italiane as the other party to the proceedings), with particular reference to the obligation for general authorisation holders to contribute to the universal service compensation fund, on the basis of earnings received from the sale of services deemed to be in replacement of universal services. On 27 June 2015, Poste Italiane submitted its brief regarding the proceedings launched by AICAI to the Lazio Regional Administrative Court. The case was adjourned and the matter referred to the Court of Justice due to a number of preliminary matters contained in the adjournment ruling.
This action was also challenged by AICAI. The Regulations lay down that within 180 days of their publication, parties already authorised to provide postal services should bring their licence into line with the provisions contained therein by sending a specific application to the Ministry for Economic Development. Poste Italiane fulfilled this requirement on 10 February 2016.
On 31 October 2014, AGCom issued Resolution 564/14/CONS, launching a procedure designed to define the legal and financial terms and conditions relating to the return of mail items entrusted by senders to operators
At the end of the consultation, with Resolution 621/15/CONS of 5 November 2015 (published on 24
Italiane – especially the possibility of only being able to recover additional costs with the new rates, and having to widely implement manual solutions in order to provide the service – the Company has appealed against the ruling before the Lazio Regional Administrative Court. The hearing on the merits has been scheduled for 8 June 2016.
On 4 February 2016, AGCom sent Poste Italiane a memorandum containing various observations on the procedures for implementing the provisions of the ruling. Poste Italiane replied to this memorandum on 5
February 2016, reaffirming that its Contract Terms and Conditions comply with the above regulations.
On 14 April 2015, AGCom issued formal notification of penalty 02/15/DSP, launching a procedure against
Service, with regard to the exceptional closure of 21 post offices in the Province of Messina on certain days in
July and August 2014. The regulator set a deadline for completion of the procedure at 150 days from notification of the proceedings, without prejudice to any suspensions arising from further investigations. On 14 May 2015, Poste Italiane submitted a defence brief to the regulator, which was subsequently supplemented with additional evidence prepared after the Company accessed the relevant documents. With
Subsequently, on 18 November 2015, with Resolution 631/15/CONS AGCom ordered the Company to pay a fine of €296,000 for the 13 violations relating to the procedure regarding closure of 13 post offices.
On 26 June 2014, as a result of a procedure launched in 2013 to which Poste Italiane also contributed,
AGCom adopted Resolution 342/14/CONS, concluding the procedure. This ruling has added to the current criteria used in deciding on the distribution of post offices, defined by the Ministerial Decree of 7 October 2008, introducing, in particular, a ban on the closure of offices located in municipalities in rural and mountain areas.
On 10 July 2015, AGCom issued formal notification of penalty 04/15/DISP, launching a procedure against
Poste Italiane for the alleged violation of its legal obligations relating to certain post offices and local area offices, following monitoring carried out by IZI SpA in 2014 in connection with changes to post office opening hours during the summer period. The regulator set a deadline for completion of the procedure at 150 days from notification of the proceedings, without prejudice to any suspensions due to further investigations. On 7
August 2015, Poste Italiane sent the regulator a defence brief, rejecting the alleged violations. On 18
On 19 October 2015, AGCom issued Directive 07/15/DISP, claiming that Poste Italiane had failed to meet its obligations relating to legal process requirements, following inspections carried out at the Roma Prati post office, regarding 14 court documents. The Company submitted its defence brief against this claim on 18
Centre, as well as certain reporting obligations relating to customers. The Company submitted its defence brief against this claim on 2 March 2016.
On 3 March 2016, AGCom issued Directives 5/16/DISP and 6/16/DSP, claiming that Poste Italiane had failed to meet its obligations relating to legal process requirements, following inspections carried out at the Rome
Belsito post office and the Naples South Main Distribution Centre, respectively. The Company will submit its defence brief within 30 days.
RFC’s operations, which benefitted from gains made on the sale of financial assets and a reduction in administrative expenses, reflecting a decrease in transfer payments for services provided by other Poste
Net fee and commission income is down from €3,589 million in 2014 to €3,563 million in 2015. This income primarily consists of commissions earned on the distribution of postal savings products, totalling €1,610 million, and €1,928 million from the processing of bills paid by payment slip, sundry payments and from other services offered to customers (e.g. insurance broking).
Net income from banking activities is down €39 million from the €5,564 million of 2014 to €5,525 million in 2015, after provisions for doubtful debts of €9 million, including impairment losses on current account overdrafts granted to BancoPosta RFC’s customers.
Operating expenses are down 4.2% on the previous year, primarily due to a reduction in other administrative expenses, which benefitted from a decline in the transfer payments made by BancoPosta RFC to other Poste
The continuing presence of deflationary pressures in the euro zone led the European Central Bank to take further expansionary measures, increasing the scale of its Quantitative Easing programme (this has now been extended until the end of March 2017) and reducing the ECB’s deposit facility rate (-0.30% from December 2015). These policies helped to drive down the yields on government securities (between November 2014 and December 2015, yields on 10-year European sovereign debt have fallen by approximately 40 basis points), with the benefits extending to Italian sovereign debt. The spread between 10-year Treasury Notes
International equity markets were in positive territory overall in 2015 (the Euro Stoxx index had recorded a 5.1% rise, on an annual basis, in December 2015), despite the decline seen in the third quarter of the year as a result of the crisis in China and the impact of the Volkswagen group’s difficulties on the car industry. The
The early weeks of 2016, on the other hand, were marked by a high degree of market volatility, with all the global indexes registering negative performances, as growth expectations for Asian economies were lowered and the oil price fell.
The expansionary policies adopted in Europe contrasted with the Federal Reserve’s decision to raise rates. This had an impact on the currency markets, consolidating the rise in the value of the US dollar (the average
(deposits, bonds and repurchase agreements) continued to follow a downward trend in 2015: the average cost of customer deposits in December 2015 was 1.19%, compared with the 1.27% of July 2015 and 1.50% of
After the decline registered early in the year, from August on, bank lending began to see year-on-year growth for the first time since 2012. Total lending in December 2015 – excluding interbank loans – amounted to €1,830 billion, compared with the €1,828 billion of December 2014.
Principal commercial initiatives 2015 saw BancoPosta RFC proceed with a commercial strategy designed to foster the cross-selling Poste
Conto BancoPosta Più offering through the introduction of new promotions, with customers purchasing insurance policies or savings products being offered free banking (no annual current account fee). Likewise, 48 Poste Italiane – Directors’ Report on Operations 2015
With regard to the distribution and management of Postal Savings products, during 2015 the issuer, Cassa
(Buono BFP3x4Fedeltà, Buono BFP3x4RisparmiNuovi and BFPImpresa) and replacement products introduced, including: BFP4x4Fedeltà for customers redeeming at maturity certificates or bonds distributed exclusively by
BFP4x4, offering a rising interest rate and a maximum term of sixteen years. From April, the minimum investment in dematerialised certificates was lowered from €250 to €50.
New promotions were launched for Postal Savings Books, including the Supersmart offering for holders of
In the collections and payments segment, the process of repositioning the traditional payment of bills using payment slips, so as to enable payments to be made via multiple digital channels, continued. This has resulted in the launch of a paperless payment slip, which is so far only available for use by the customers of Telecom
Italia. The new procedure enables customers to pay their phone bills at a post office without the need to present a paper slip, but by simply providing their telephone number, the amount payable and the period to which the bill refers.
Certain payment slips can also be paid on line using a “fast track” procedure, simplifying the process and offering the option of receiving the receipt via e-mail.
In addition, as part of the process of ensuring compliance with the regulations issued by the Agency for a
December 2015, compared with 12.2 million cards at 31 December 2014), Poste Italiane completed the rollout of contactless technology for both cards throughout the country. In June, the new Le mie carte service was made available, enabling Postamat Maestro, Postamat BancoPosta Click and Postepay cardholders to customise a number of functions based on their specific needs (e.g., to set limits on the amount that can be withdrawn from ATMs and spent at a POS, to enable the cards to be used only within Europe or anywhere in the world, to enable all online purchases or only those of certain categories of goods, to opt to deactivate the contactless function, etc.)
IMI, BNP Paribas Arbitrage Issuance BV, Deutsche Bank AG, Société Générale and Morgan Stanley BV and participation in five underwriting syndicates for public offerings for the sale and/or subscription of securities.
(repayment holidays, changes to instalments). The range of Quinto BancoPosta salary loans was extended, with the addition of low-interest products for public employees, whilst the price of BancoPosta’s mortgage loans was cut and refinancing and remortgage options reintroduced. A number of applications for renegotiation were also handled.
In 2015, Banca del Mezzogiorno-Mediocredito Centrale SpA continued to provide support for creditworthy companies operating in southern Italy, through its lending activities and by promoting and facilitating access to government subsidies. The Business Plan for the period 2015-2017, approved in July 2015, also introduced a number of new strategic options and operating processes in order to achieve cost efficiencies, contain risk and stabilise the financial position.
The bank aims to increase its lending activities by, among other things, strengthening its commercial model; achieving balanced growth in its loan book, partly by expanding its product offering; and by increasing its use of medium/long-term funding, in line with regulatory requirements regarding operating and structural liquidity.
Regarding the incentives for national research projects promoted by the Ministry for Economic Development
(MISE), as head of a temporary consortium of companies, the bank was awarded a contract in 2014 to provide assistance and support to the Ministry in approving, disbursing, controlling and monitoring the grants provided for research, development and strategic innovation projects within the scope of the Fondo per la
BancoPosta Fondi SpA SGR continued to carry out activities relating to its two lines of business, represented by individual and collective investment services, in 2015.
On 8 June 2015, placement of a new flexible mutual investment fund, named BancoPosta Selezione Attiva, began. The fund aims to provide moderate capital growth over the medium term through diversified investment of the assets managed.
Following Poste Italiane’s acquisition of 10.32% of Anima Holding, on 31 July 2015 BancoPosta Fondi Sgr and
December 2015, by placement of the first ever mutual investment fund to be distributed in partnership with 50 Poste Italiane – Directors’ Report on Operations 2015
(€40 million, 2.0% of total inflows). Redemptions primarily related to bond funds (56% of the total).
(3) Includes revenues related to loans, credit cards, other investment products, BancoPosta Fondi and Banca del Mezzogiorno.
This primarily reflects: • the performance of revenue from the investment of customer deposits which, despite a rise in the amount invested due to an increase in deposits14, is down 3.5% (€1,974 million in 2015, compared with €2,045 million in 2014), reflecting a reduction in average interest rates on both deposits invested in securities and on deposits with the Ministry of the Economy and Finance; • a reduction in revenue from collection and payment services, due to a decrease in revenue from the processing of tax payments using forms F23/F24.
Sales of postal savings products, where revenue is linked to a mechanism agreed with Cassa Depositi e Prestiti
At 31 December 2015, Savings Book deposits amount to €118.7 billion (€114.4 billion at 31 December 2014), whilst savings in the form of Interest-bearing Postal Certificates amount to €206.1 billion (€211,3 billion at 31
• there was an 18% decrease in money transfer revenue (€45 million in 2015, compared with €55 million in 2014), primarily due to a fall in the volume of domestic transfers (4.9 million transactions in 2015, compared with 5.4 million in 2014); • Delegated service revenue of €123 million (€136 million in 2014) includes, among other things, commissions received in return for the payment of INPS (National Social Insurance Institute) pensions, totalling €60 million (€69 million in 2014), and commissions earned on the payment of pensions and other sums for the Ministry of the Economy and Finance, totalling €57 million. The decrease in commissions was basically due to the reduction in pensions paid at post offices, as opposed to those paid directly into a current account on which, from 1 June 2015, a lower commission is charged.
Segment profit or loss – Insurance Services for the year ended 31 December (€m) 2015 2014
Net financial income from assets related to index- and unit-linked products
Net change in technical provisions for insurance business and other claims expenses
Net change in technical provisions for insurance business 11,660 12,369 (709) -5.7%
Net finance income from securities related to traditional products amounts to €2,352 million, having fallen 15.8% compared with €2,793 million of 2014. The performance reflects financial market trends, which resulted in the recognition of net unrealised losses of €435 million, compared with net gains of €123 million in 2014. However, given that these investments are included in the separately managed accounts covering the matching insurance liabilities, this amount has been attributed in full to policyholders under the shadow accounting method. In contrast, despite a market scenario marked by falling yields on government securities, ordinary income, thanks to growth in assets under management, amounts to €2,786.6 million, up €119 million on the figure for 2014.
Financial market trends, together with the reduction in volumes due to the a number of Class III products reaching maturity, are also reflected in investments linked to index- and unit-linked products, which generated total finance income of €193 million in 2015, down on the €525 million of 2014. This amount is, in any event, almost entirely matched by a corresponding change in technical provisions.
As a result of the above operating performance and the corresponding revaluation of insurance liabilities due to the positive financial performance, the matching change in technical provisions, after the portion ceded to reinsurers, amounts to €19,683 million, compared with €17,883 million in the previous year. Claims paid to 54 Poste Italiane – Directors’ Report on Operations 2015
(€5.5 billion in 2014). Total surrenders accounted for 3.3% of initial provisions (3.7% for 2014), a figure that continues to be far lower than the industry average.
Whilst the final official data is not yet available, the estimated figure for gross premium revenue in the life insurance market, in 2015, is approximately €115 billion, up approximately 4% on the figure for 2014. The performance was largely due to significant growth in premium revenue for Class III products (up 46%
(so-called “direct premiums written in Italy”), thus excluding premiums for regular premium policies written in previous years, premium revenue was close to €100 billion, up 5.8% compared with the previous year and setting an all-time record.
Analysing the composition and performance of new business, Class I continues to be the best-selling form of insurance, despite registering a reduction of 4.8% compared with the previous year. This Class accounts for two-thirds of total premium revenue. Premiums invested in unit-linked funds are up 49% compared with 2014 and represent around 30% of new business. New business in terms of Class VI and Class IV products, regarding pension funds and long-term health insurance, respectively, remains marginal.
on 2014). The second most important channel, in terms of premium revenue, is represented by financial promoters, with a market share of around 17% (up 22% compared with 2014), whilst agents account for approximately 10% of premium revenue (up 1% on 2014).
registered a 1.5% decline in total premium revenue compared with 2014, with total revenue amounting to €25.9 billion. This reflects a reduction in vehicle insurance (down 5.4%), only partially offset by modest growth in premiums in other non-life classes (up 2.9%). The classes that performed best were: Financial Loss (€540 million, up 2.9%), Health (€1,549 million, up 4.9%) and General Third Party Liability (€2,741 million, up 5.3%).
Sales of regular premium products also performed well (Multiutile Ricorrente, Long Term Care, Posta Futuro
Da Grande), with over 166 thousand policies sold during the year, as did sales of the PostaPrevidenzaValore product which, with over 80 thousand policies sold and a total number of members amounting to 785 thousand, has enabled the company to consolidate its role in the pensions market. Sales of pure risk policies
(term life insurance) also performed well. These are sold in stand-alone versions (not bundled together with products of a financial nature), with over 31.5 thousand new policies sold during the year, whilst around 92.8 thousand were new policies, again of a pure risk nature, sold bundled together with financial obligations deriving from mortgages and loans sold through Poste Italiane’s network.
The investment policy continues to be marked by the utmost prudence, with the portfolio primarily invested in
Italian government securities and highly-rated corporate bonds, and with an overall exposure that, whilst 56 Poste Italiane – Directors’ Report on Operations 2015
lower compared with 2014, represents over 75% of the entire portfolio. In addition, in 2015, the company continued with the process of diversifying investments, begun in the second half of 2014, by increasing the exposure to equities (up from 4.4% to 10.6%), above all multi-asset, harmonised open-end funds of the UCITS
(Undertakings for Collective Investment in Transferable Securities) type, whilst maintaining a moderate risk appetite. In line with its strategic asset allocation policy, moreover, the company has begun investing in real estate funds (targeting retail and office properties) in Europe and Italy. The returns on separately managed accounts were positive (4.7 % for PostaPrevidenza and 3.6 % for PostaValorePiù).
As a result of the above operating and financial performance, technical provisions for the direct Italian portfolio amount to €90.5 billion (€77.7 billion at the end of 2014), including €81.7 billion for Class I and V
provisions, linked to the change in the fair value of the financial instruments covering the provisions, remained at €9.7 billion, which is broadly in line with the figure at the beginning of the year despite increased market volatility. Technical provisions for the non-life business, before the portion ceded to reinsurers, amount to €0.1 billion at the end of the year, up 25% compared with 2014.
and adopted by IVASS (the insurance industry regulator): solvency ratios were computed according to the standard Solvency II formula; stress tests and prospective assessments of risk and solvency were conducted; the disclosures required for the Solvency II balance sheet were prepared and submitted to IVASS; on 3 June and 15 July 2015, the first supervisory reports for the reporting date of 31 December 2014 were filed, as were, on 25 November 2015 and 7 January 2016, those for the third quarter of 2015. The procedures carried out have shown how the transition from Solvency I to Solvency II has significantly benefitted Poste Vita in terms of capital. The company’s solvency ratio at 31 December 2015, determined on the basis of the new requirements, stands at 405%, marking a significant improvement on the same ratio calculated in accordance with Solvency I guidelines (113%).
Segment profit or loss – Other Services for the year ended 31 December (€m) 2015 2014
The Other Services segment, which includes the company, PosteMobile, reports operating profit of €31 million for 2015, up €17 million on the previous year. The performance of the mobile telecommunications business reflects the Company's commitment to initiatives designed to acquire higher value customers, which has enabled it to grow its customer base (3.6 million lines at 31 December 2015, compared with 3.3 million at the end of 2014) and consolidate the quality of acquisitions. Good performances were also registered by voice services, with over 5.3 billion minutes used in 2015 (up 16% on the previous year), and above all by data services, with substantial growth of more than 3,900 terabytes (up 90% on 2014).
The mobile telecommunications market saw overall negative growth in 2015, although the major operators witnessed a slowdown in revenue decline compared with 2014.
MNOs (Mobile Network Operators), continued during 2015. At 30 September 2015, the total number of lines stood at approximately 93.1 million, down 1.8% on the same period of 2014, whilst the estimated penetration rate stood at 153%, two percentage points lower than the figure for 2014.
BancoPosta and/or Postepay accounts to their phone number, thus enabling them to make payments in a simple and secure way directly through digital channels.
The success of the PosteMobile app led Poste Italiane to apply the same “white label” logic to creation of the new version of the BancoPosta app, which was made available to all Poste Italiane customers in July 2015, regardless of their mobile operator. From December 2015, all the functions of the Sconti BancoPosta app have been added to the new app, thus expanding the range of services offered to customers.
Just under six months after the roll-out, taking into account new installations and updates of the previous version, the BancoPosta app had registered over 650,000 downloads, enabling 260,000 customers to use its payment services and complete transactions worth more than €90 million.
In the consumer market, PosteMobile has adopted a strategy aimed at supporting market share growth, in terms of volumes and value, focusing on commercial initiatives, especially flat-rate price plans in the Creami range, where the offering is structured around bundles that customers may freely use for any service (voice, text and data). In the fourth quarter of 2015, PosteMobile also began marketing its LTE (Long Term Evolution)
In the Small Office Home Office (SoHo) market, the product range has seen the launch of a promotional initiative, PM Ufficio Full, targeting professionals looking to switch from another operator. The offer features unlimited calls and texts and 3GB of data.
In 2015, PosteMobile was also very active in the Business and Public Administration segment, collaborating with the main public transport companies in Emilia Romagna, for which it created an integrated ticket inspection and fine management solution.
In line with its mission to modernise and simplify the Italian mobile market, and to create value for the Group,
PosteMobile continued to drive the spread of NFC services. Specifically, thanks to its Super SIM, almost 900,000 NFC SIM cards were distributed during the year.
Provisions for employee termination benefits and pension plans (1,361) (1,478) 117 -7.9%
IT assets. Depreciation, amortisation and impairments (after reversals of impairments) of property, plant and equipment, intangible assets and investment property during the year amounts to €581 million.
Financial assets at fair value through profit or loss - - 18,132 - - 18,132
Net f inanc ial assets/( l iabi l i t ies) (1,052) 2,223 876 22 287 2,356
Cash and deposi ts attributable to BancoPosta - 3,161 - - - 3,161
Financial assets at fair value through profit or loss - - 12,155 - - 12,155
Technical provis ions for c laims attributable to reinsurers - - 54 - - 54
Net f inanc ial assets/( l iabi l i t ies) (1,786) (8) 1,631 15 312 164
Consol idated amounts 64 Poste Italiane – Directors’ Report on Operations 2015
Industr ial net debt (before adjusting for intersegment transactions) 302 (1,451)
Cash and cash equivalents at beginning of per iod 1,704 1,445
Cash and cash equivalents at end of per iod 3,142 1,704 of which: Cash subject to investment restrictions 1 511
Cash and cash equivalents is up €1,438 million, after the payment of dividends of €250 million and the collection of €535 million from the MEF as a result of the return of amounts deducted from the Parent
Net funds amount to €8,659 million at 31 December 2015, marking a significant improvement on the figure for 31 December 2014 (when net funds totalled €4,741 million). This reflects, among other things, the component linked to fair value measurement of investments in securities, primarily by BancoPosta RFC, and, to a lesser extent, by the subsidiary, Poste Vita, amounting to approximately €3,775 million (€2,651 million at 31 66 Poste Italiane – Directors’ Report on Operations 2015
The workforce employed by the Group breaks down as follows: Total workforce on permanent contracts 139,730 142,221 137,601 140,040
2015 saw the birth of Poste Italiane's Corporate University, designed to provide strategic leverage for the
Business Plan, with a mission of coherent governance at Group level of all training processes and services in order to develop distinctive strategic expertise to be applied in managing the Group's businesses.
Business Sales and Public Administration 706 2,983 476 4,165 348 6,874 15 7,237
Online hours converted to person days 93,272 20,125 945 114,341 122,374 23,866 61 146,300 for the year ended 31 December 2015 for the year ended 31 December 2014 for the year ended 31 December 2015 for the year ended 31 December 2014
For younger staff members – middle managers and/or graduates – training courses aimed to support participants in interpreting new market scenarios, drawing inspiration and impetus from them in order to adopt innovative strategies and working solutions, and also providing useful tools for acquisition of an overall and ever broader vision of the world we live and work in.
Two important leadership training initiatives were implemented for line managers, focusing, respectively, on the new retail service model (Private Customer staff) and the new delivery model (Mail, Logistics and
Communication staff). Regarding the latter, in addition to Distribution Centre managers, approximately 9,000 postmen and women were also involved, with a total of more than 139,000 training hours provided.
Several other initiatives were aimed at all the other corporate functions.
Training and Retraining) continued to support the development, presentation and activation of various projects entailing advanced technical retraining, and concluded several agreements to assist in obtaining financing from Fondimpresa. Efforts continued to recover costs relating to training activities for nonmanagerial staff from the Fondimpresa inter-professional fund. Specifically, 287 training plans with a value of approximately €9.7 million were accounted for.
Staff numbers were also boosted in multi-ethnic post offices, whilst, at Corporate level, Information
External recruitment also regarded the specific business requirements of Group companies, especially Poste
As in previous years, internal recruitment and selection activities continued with the development of graduates in service.
In relation to procedures aimed at ensuring the appropriate distribution of staff around the country, a number of personnel were transferred on the basis of applications submitted in accordance with the union agreement regarding nationwide mobility and in keeping with requirements as they arose.
Specific development initiatives were thus planned, based on three overall approaches: • the identification and development of potential talent; • recruitment for key management positions through systematic internal scouting processes; • the monitoring of skills diagnosis and development processes relating to key areas of the workforce.
For managerial staff, a structured process was devised with regard to the succession process for executives and an assessment plan was drawn up for 168 managers, for some of whom a subsequent step will entail the implementation of individual development plans, supported by initiatives such as coaching, mentoring, job rotation and management training.
The best performing staff were subject to an additional assessment, scouting and development process (called the Professional Guidance Programme), involving around 30 staff.
In order to ensure ongoing replenishment of the pool of staff to fill key roles (for example, Branch Managers,
Area Delivery and Sorting Office Managers), a people review process was devised. This involves joint meetings at local and central level, with the aim of establishing recruitment pools based on a readiness to take on the target positions and follow specific career development paths.
The commercial operations and Management By Objectives (MBO) incentive schemes were finalised.
Specifically regarding the Private Customer function, a meeting was held on 16 January 2015 to present the relevant aspects of the Plan, followed by further meetings on the new retail service model, evolution of the sales structure at Area Offices and Branches, the outlook for customer services and changes to Business Sales.
SpA, Poste Tributi ScpA, Posteshop SpA, Poste Energia SpA, EGI SpA and BancoPosta Fondi SpA SGR.
In 2015, in addition to the above-mentioned activities of the Ente Bilaterale per la Formazione e
On the regulatory front, the Company provided its observations on the changes to employment law introduced as part of reform of the Jobs Act; at the same time, the process of modifying internal procedures began. Staff were informed about any provisions directly affecting their employment via communications posted on noticeboards and the Company intranet. Special attention was also paid to the issue of controls as per art. 4 of the Workers' Statute, entailing the creation of two working groups – one inter-company and the other internal – aimed at analysing the most delicate aspects.
With respect to recruitment obligations relating to disabled people, agreements were reached with provincial and metropolitan authorities in areas where there is a shortfall in the number of disabled people employed.
The agreements have enabled the Group to offset the shortfalls against the number of disabled people employed in other provinces in excess of the relevant requirements.
In 2015, the well-established welfare system continued to improve the range and quality of inclusive services provided to socially vulnerable groups, and implement initiatives geared towards the needs of employees and their families.
Attention continued to be paid to inclusion of disabled children via summer holiday initiatives, thematic workshops and family entertainment.
During the year, a series of agreements continued to provide discounts on a range of products and time saving services, with 190 agreements and specific temporary campaigns launched at national level, focusing
With regard to disputes over flexible employment: • in relation to fixed-term contracts, 91 new claims were filed, compared with the 178 in the previous year.
The number of cases lost – calculated on the basis of outcomes notified regardless of the year in which the claims were filed – was approximately 13% (around 18% in 2014); • in relation to temporary and agency work, 12 new claims were filed, compared with 5 in the previous year, with cases lost amounting to 46.6% at 31 December 2015 (47.3% in 2014).
The number of new disputes arising from other contractual terms and conditions amounts to 1,276 at 31
December 2015, in line with the 1,277 of 2014. This area also includes dismissals on disciplinary grounds.
New challenges amounted to 183 in 2015, compared with 153 in 2014, with the number of cases lost falling from around 27% in 2014 to around 22% in 2015.
A fall in the total number was registered compared with 2014, when the number of staff receiving a penalty without dismissal amounted to 5,358 (dismissals numbered 237, and therefore remained substantially the same).
The principal grounds for dismissal included: “unjustified absence” (around 24% ); “irregularities regarding securities trading” (around 18%); and “criminal convictions/proceedings” (around 17%). The main reasons for the imposition of penalties without dismissal were: “misbehaviour” (around 40%); “absence in the event of a health inspection and failure to comply with sickness regulations” (around 28%); and “failure to fulfil duties and obligations” (around 19%).
Property, plant and equipment 237 218 261 of which Poste Italiane SpA 207 180 228
Total Poste Ital iane Group capital expenditure and Property investments 488 437 505
The Poste Italiane Group's capital expenditure during the year amounts to €488 million, mainly relating to
A special highlight was the launch of the Digital Transformation programme which, over the course of the
Service Delivery Platform) continued, involving an upgrade of hardware, software and disaster recovery components. An advanced platform for end-to-end monitoring of Poste Italiane's services was also launched.
The main initiatives carried out during the year relating to the mobile network were aimed at expanding business customer services, development of the BancoPosta and PosteMobile app and evolution of the Long
Given the size of the Company's property assets, comprising almost 14,000 workplaces, the modernisation and renovation of buildings primarily regarded planned renovation works (including furniture and fittings)
Poste Italiane is progressively consolidating a Group Risk Management model (“GRM”) to form part of its
Internal Control and Risk Management System (also “SCIGR”), in line with the requirements of the Corporate
Governance Code for listed companies and the relevant best practices. The GRM model aims to provide an organic, overall view of the Group’s principal risk exposures, greater consistency across the methods and tools used to support risk management and reinforced awareness, at all levels, of the fact that the adequate assessment and management of risks can play a part in achieving strategic objectives.
Two assessment cycles were conducted in 2015, whilst actions designed to mitigate or manage major risks were identified, in keeping with developments in the internal and external environments and the Group’s strategy.
The GRM model has adopted a Risk Model to support the process of identifying and describing risks. The
The current or future risk linked to the failure to comply with statutory or regulatory requirements imposed by legislation, industry regulations or internal rules.
December 2015 (5. Risk management) which, together with the Report on Operations, form a further section of the Annual Report.
One of Poste Italiane's areas of focus is post office security, in order to protect its staff and the Company’s assets, and deal with the risks deriving from fraud or external criminal attacks. The need to transport cash exposes Poste Italiane to the risk of criminal acts (theft and/or robbery) which, if they were to occur, could have a negative impact on the Company’s image, its operations and the Group’s future prospects, operating results and financial position. Criminal attacks are on the decline, thanks to the ongoing implementation, throughout the Group’s network, of additional measures designed to prevent and combat such events, which have resulted in a greater degree of security and protection from external threats.
Company, including online identity theft, phishing, malware, IP addresses identified as malicious and other data.
Poste Italiane revised its model for managing workplace health and safety in 2015, identifying 5 new operating units: 4 that coincide with the business functions (Mail, Logistics and Communication, BancoPosta,
This latter function is responsible for guidance, coordination and controls in relation to workplace health and safety and the environment.
Poste Italiane is the first Italian organisation to have a fully operational and internationally accredited CERT
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.
The actions taken in 2015, along the lines set out in the Business Plan, will continue into 2016, based on the positive results achieved during the year under review.
Finally, the digital channel will provide another source of growth, offering easy-to-use and effective contact channels alongside the traditional physical distribution channel represented by post offices, for which the process of developing an increasingly complete offering of simple and effective products, capable of meeting the changing needs of Poste Italiane’s customers, will continue.
VAT, thus benefitting from an unjustified competitive advantage. On 23 April 2013, the Authority concluded the procedure, notifying the Company that Italian VAT regulations are not in keeping with those of the EU, and cannot apply. In the ruling, which does not impose any fines, the Authority did, however, confirm that
Poste Italiane SpA had abused its dominant position by applying discounts that its competitors could not match. On 21 June 2013, Poste Italiane lodged an appeal against the ruling before the Lazio Regional
Administrative Court, which was rejected. On 25 March 2014, the Company appealed to the Council of State, requesting that the Regional Administrative Court's sentence and the Authority's ruling be overturned.
Moreover, on 11 August 2014, Law 116, converting Law Decree 91/2014 into law, amended Italian legislation to bring it into line with EU laws, based on the approach adopted by the Antitrust Authority.
On 13 November 2013, the Authority notified Poste Italiane SpA of an investigation (PS/7704) of alleged unfair commercial practices pursuant to Legislative Decree 206/2005 (the Consumer Code). This relates to
Poste Italiane not responding promptly to requests from customers to close their current accounts. Poste
On 27 May 2015 the Authority notified its acknowledgement of the measures adopted by Poste Italiane to implement the commitments undertaken.
On 1 August 2014, the Authority launched an investigation (PS/8998) of the alleged violation of articles 20, 21 and 22 of the Consumer Code (misleading and comparative advertising) in connection with the
“Specialcash Postepay” personal loan. A defence brief was prepared, including a response to the requests for information made by the Authority at the time it began the investigation. On 22 September 2014, Poste
Italiane submitted commitments designed to resolve the alleged violations indicated by the Authority and bring about the closure of the investigation without imposition of a fine. On 4 November 2014, the Authority 80 Poste Italiane – Directors’ Report on Operations 2015
In a ruling notified on 27 March 2015, the Authority finally closed the investigation without imposing a fine, accepting the commitments submitted by Poste Italiane.
Poste Italiane had adopted initiatives aimed at allowing customers to benefit from the bonus rate. Poste
On 4 June 2015, the AGCM launched an investigation (SP/157) 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 the procedure was launched,
Authority also ruled that Poste Italiane should desist from such conduct in the future. The Authority did not impose a fine. Poste Italiane lodged an appeal against this ruling before the Lazio Regional Administrative
However, given the complex and novel nature of the matters in hand and the uncertain nature of any judgment, it is difficult to make a reliable forecast on the outcome of the dispute.
The Antitrust Authority petitioned the Regional Administrative Court in October 2013 with respect to the
Ministry of Transport and Infrastructure and Poste Italiane (as agent of the consortium PosteMotori, having been awarded a contract by the Ministry of Transport and Infrastructure for the provision of management and remittance services for payments, by road users, for the services provided by the Department of
On 9 November 2015, ANAC sent the person responsible for the procedure a “request for information prior to the launch of a procedure pursuant to the ANAC Supervisory and Inspection Regulations of 9 December 2014
Economy and Finance, in November 2008 the Company returned the related amounts (€443 million, plus interest of €41 million). Under the 2015 Stability Law, in order to implement the Court of the European
Union's sentence of 13 September 2013, €535 million has been set aside for payment to Poste Italiane for 2014. These amounts were collected from the Central Treasury on 13 May 2015.
The European Commission subsequently reopened the enquiry, appointing an external expert to check that the levels of interest paid to the Company from 1 January 2005 to 31 December 2007 on deposits held at the
On 15 October 2013, the European Commission notified initiation of a preliminary investigation, in accordance with EU regulations concerning state aid, regarding Alitalia Compagnia Aerea Italiana SpA
(“Alitalia”), and submitted a series of requests for information on these measures to the Italian authorities.
Subsequently, additional requests were submitted, to which the Italian authorities replied, partly based on information provided by Poste Italiane.
From September to December 2015, with reference to the activities of BancoPosta and pursuant to art. 54, of
Legislative Decree 385 of 1993, the Bank of Italy carried out an inspection exclusively aimed at assessing compliance with obligations relating to the transparency of transactions and the prevention of money laundering. The results of the investigation were "partly favourable", with some areas for improvement in relation to organisational and procedural aspects indicated, primarily where interventions have already been completed or launched by the competent corporate functions. The Company's observations and an overall plan for corrective measures will be notified to the regulator.
SpA. The Company sent a related defence brief to the Ministry of the Economy and Finance regarding each of the notified cases. Overall, at 31 September 2015, there are 26 pending proceedings at the Ministry of the
May 2014 and, based on the results, the regulator issued a report on 7 August 2014, noting a number of areas for attention and precautions to be adopted in relation to the provision of investment services. Poste
Italiane is currently taking steps to address the various concerns raised by strengthening its organisational
Following the inspection that took place between 1 April and 14 July 2014, for the purposes of assessing the governance, management and control of investments and financial risk, and compliance with anti-money laundering regulations, on 17 September 2014, IVASS notified Poste Vita of its recommendations and the start of an administrative procedure regarding the alleged violation of four provisions concerning anti-money laundering regulations. The company has submitted defence briefs and the procedure will be closed within two years.
On 29 May 2015, in response to certain press reports, the Data Protection Authority asked Poste Italiane to provide information regarding alleged processing of the personal data of persons operating at companies (in particular IZI SpA) appointed to monitor postal service quality standards. According to the Authority, the data was processed without providing the parties concerned with the relevant privacy notices and without obtaining their consent to use of the data.
From the findings of this audit, it appears that certain members of staff interfered with the monitoring systems in violation of the Company's policy. It is currently impossible to ascertain whether this behaviour may have influenced determination of the service quality indicators recorded, and the possibility that the impact of such events may give rise to legal proceedings and fines cannot be ruled out. Poste Italiane has requested its legal experts to go ahead with all appropriate measures. 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.
The Company 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.
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 long-term 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.
After the inspection, on 3 November 2015, the Tax Police notified PosteMobile of one alleged violation relating to the retention of data for the purposes of identifying and combatting crimes (documentation of traffic data, namely internet access) beyond the maximum periods laid down in art. 132 of the Data Protection
Code, with the imposition of a fine (ranging from a minimum of €10,000 to a maximum of €50,000).
Deeming the allegation to be groundless, on 2 December 2015, pursuant to art. 18 of Law 689 of 24
November 1981, PosteMobile submitted its defensive brief to the Authority asserting that data retention for the purposes of identifying and combatting crimes was extended beyond the maximum periods provided for by the Data Protection Code in good faith and in line with the interpretative and applicatory practices of the
Anti-terrorism Decree 43 of 17 April 2015, which all telecommunications operators comply with. The subsequent phases of the proceedings at the Data Protection Authority are awaited.
Regarding legal, tax and social security proceedings, reference should be made to Poste Italiane's financial statements for the year ended 31 December 2015 (6. Proceedings pending and relations with the authorities).
The cornerstones of the Group's green strategy are: inclusive development, digitisation of products and services, and environmental protection.
Environmental Measurement and Monitoring System (EMMS) and Posteurop’s Greenhouse Gas Reduction
Preparations also began for renewal of the fleet, with the aim of introducing vehicles capable of cutting pollution, consumption and CO2 emissions with respect to those previously in use, including around 3,000 alternative fuel vehicles.
The Mobility Management project continued. This aims to develop commuter programmes based on environmental and economic sustainability, thereby benefitting workers, the community and the Company.
To this end, commuter programmes were prepared for 37 sites with over 300 staff; special agreements were negotiated on behalf of the Group’s employees, enabling them to purchase annual season tickets for local public transport in Rome and Bologna at reduced rates and in instalments; and a car-sharing service was implemented. An eco-driving training programme, providing a series of recommendations regarding vehicles and driving techniques, with the aim of cutting CO2 emissions, was also continued.
Finally, activities relating to the dematerialisation of documents and digitisation of products and services continued, as well as those aimed at reducing and sustainably managing waste. Regarding the latter, work continued on the creation of an integrated waste management system based on the recovery of raw materials used and less disposal of production waste, by assigning waste products an actual economic and commercial value. It was decided to recover and recycle special non-hazardous waste, such as paper, cardboard, plastic, wood and metal, and limit disposal to hazardous waste.
Ministry of the Economy and Finance, are not deemed to be related parties. Transactions involving financial assets and liabilities represented by instruments traded on organised markets are not deemed to be related party transactions.
The statement of reconciliation of the Parent Company’s profit/(loss) for the period and equity with the consolidated amounts at 31 December 2015, compared with the statement at 31 December 2014, is included in Poste Italiane's financial statements for the year ended 31 December 2015 (3.3 Notes to the financial statements).
The Parent Company, Poste Italiane SpA, reports profit for the year of €451 million, an improvement of €394 million compared with 2014, when profit for the year was €57 million.
Revenue from sales and services amounts to €8,205 million, down 3.1% compared with the figure for 2014
(revenue of €8,471 million in the previous year). This reflects the performances of postal and business services, resulting from a decline in demand for traditional mail services, and of financial services, due to lower average returns on the investment of customer deposits, which led to a decline in revenue at BancoPosta.
Other operating income is up from €306 million in 2014 to €399 million in 2015 and includes €331 million in dividends received from subsidiaries.
Ordinary personnel expenses, linked to salaries, contributions and sundry expenses, are down 0.8% (a reduction of €45 million) on 2014. In spite of additional pay due to the fact that a public holiday fell on a
The total figure also reflects provisions for restructuring charges of €316 million (€256 million in 2014), made to cover the estimated costs to be incurred by the Parent Company for early retirement incentives, under the current redundancy scheme for employees leaving the Company by 31 December 2017.
Finally, the change in personnel expenses also reflects income of €11 million recognised by Poste Italiane SpA
in 2015, following the agreements concluded with the labour unions in July, regarding the re-employment by court order of staff previously employed on fixed-term contracts.
Decree 34/1418 - the so-called “Jobs Act” - amounted to 9,180, equal to 8,942 FTEs19.
16 The workforce at 1 January of each year is identical to the workforce at 31 December of the previous year. 17 Art. 2, paragraph 1-bis of Legislative Decree 368/01 requires, among other things, that fixed-term contracts must not represent more than 15% of a company’s workforce on 1 January of the year in which the staff are recruited. 18 Art. 1, paragraph 1 of Legislative Decree 368/01, as amended by Law Decree 34/14 (the so-called “Jobs Act”) establishes, among other things, that employees recruited on fixed-term contracts cannot exceed 20% of a company’s permanent
Income tax expense is down from the €216 million of 2014 to €145 million for 2015. The total effective tax rate for 2015 is 24.35%. Compared with the figure for 2014, when the effective tax rate was 79.16%, the charge for the year under review benefits from the positive impact of the deductibility of personnel expenses for staff employed on permanent contracts from the IRAP tax base, introduced by the 2015 Stability Law. This has significantly reduced the impact of this tax compared with the overall tax charge, but has also resulted in a reduction in the amount deductible from the IRES tax base, resulting in an increase in the latter charge.
workforce at 1 January of the year in which they are recruited, after rounding up to the nearest whole number should the figure be equal to or above 0.5. 19 The number of fixed-term contracts – expressed in terms of both headcount and FTEs – includes, for 2015, both contracts and renewals during the year in question (7,275, equal to 7,142 FTEs) and contracts and renewals in 2014 and still in force at 1 January 2015 (1,905, equal to 1,800 FTEs).
Working capital : Trade receivables and other receivables and assets 3,840 5,683 (1,843) -32.4%
Non-current assets of €4,713 million are up €70 million compared with the end of 2014.
In addition to the acquisition of a 10.32% interest in Anima Holding SpA, the movement in this indicator reflects the recapitalisation of SDA Express Courier SpA (€40 million) in order to cover the losses incurred by the subsidiary through to 30 June 2015 and replenish the extraordinary reserve. This results from Poste
Italiane’s commitment to provide financial support for the subsidiary (whose performance was also impacted by the operating results of Italia Logistica).
Net f inanc ial assets/( l iabi l i t ies) 1,069 (1,966) 3,035 n/s
Cash and deposi ts attributable to BancoPosta 3,161 2,873 288 10.0%
An analysis of industrial net funds/(debt) outside the ring-fence at 31 December 2015, in accordance with
ESMA guidelines, computed on the basis of paragraph 127 of the recommendations contained in ESMA
I . Current f inanc ial l iabi l i t ies (F+G+H) (603) (2,254)
Industrial net funds/(debt) outs ide the ring-fence af ter adjust ing for intersegment transact ions
Cash and cash equivalents at beginning of per iod 986 588
Cash and cash equivalents at end of per iod 1,520 986 of which: Cash subject to investment restrictions 217 688
Cash and cash equivalents is up €534 million, after the payment of dividends of €250 million and the collection of €535 million from the MEF as a result of the return of amounts deducted from the Parent
Company’s retained earnings in 2008 and transferred to the MEF, pursuant to European Commission Decision
With regard to BancoPosta RFC’s governance, the rules governing the organisation, management and control of BancoPosta's operations are contained in the specific BancoPosta RFC Regulation approved by the
Bank of Italy on 27 May 2014, Poste Italiane, in conducting BancoPosta’s activities, is comparable – for the purposes of application of corporate governance regulations – to a major bank in terms of size and operational complexity. Further information regarding the corporate governance structure is provided in
Poste Italiane’s “Report on Corporate Governance and the Ownership Structure”, approved by the Board of
Poste Italiane” which, in implementation of the BancoPosta RFC Regulation, establish the procedures to be used in contracting out BancoPosta RFC’s functions to Poste Italiane in terms of decision-making processes, the minimum content of operating guidelines, levels of services, information flows and control procedures; • the guidelines in the Internal Control and Risk Management System (also “SCIGR”), describing the roles and duties of BancoPosta RFC’s control functions, and the procedures for coordinating and ensuring the exchange of information between these functions and Poste Italiane’s control functions and the flow of information to corporate bodies; • the system for delegating powers to function heads in accordance with their responsibilities.
In compliance with the regulatory requirements contained in the Bank of Italy's Supervisory Standards and the
CONSOB regulation governing the controls to which BancoPosta is subject, in early 2016 BancoPosta's
The Annual Report for 2015, presented to the Board of Statutory Auditors and the Board of Directors, will subsequently be submitted to the Bank of Italy. The specific section regarding investment services will, on the other hand, be submitted to the CONSOB.
BancoPosta has set up an independent Risk Management unit, responsible for ensuring, with regard to
Specifically, the function provides a detailed evaluation of the risk profile of the financial products sold to customers and provides the operational and business functions involved in product development and placement with advice and support. It is also responsible for periodic reporting.
The principal types of risk to which BancoPosta RFC is exposed in the course of its ordinary activities are described below: • credit risk (including counterparty risk); • market risk (including banking book rate risk); • liquidity risk; • operational risk.
During 2015, the Risk Management function proceeded with the process of complying with the new
Supervisory Standards issued by the Bank of Italy on 27 May 2014, with particular regard to prudential supervisory regulations. In particular: • a new ICAAP (Internal Capital Adequacy Assessment Process) report was prepared (the first to be prepared on a mandatory basis), setting out the process followed to assess BancoPosta RFC’s capital adequacy in relation to the range of significant risks identified. Following approval by the Board of
Directors on 28 April 2015, the report was submitted to the Bank of Italy; • the first public disclosure on risk in accordance with Pillar 3 of Basel III, as at 31 December 2014, was published on Poste Italiane’s website together with publication of the 2014 Annual Report and financial statements; • a new quarterly reports (the “Tableau de Bord”), were presented to the new Audit and Risk Committee and the Board of Directors; these reports cover monitoring of the metrics included in the Risk Appetite
Framework, which has been adjusted in line with the revised Business Plan.
and, following the launch of the ECB’s programme of Quantitative Easing, an increase in risk-free rates and in the spread between 10-year Treasury Notes (BTPs) and German Bunds. This situation, which continued into the second half of the year, helped to drive up the value of government securities in the available-for-sale portfolio.
The changing combination of market trends, together with the performance of deposits and investments, means that exposure to interest rate risk in the banking book, however, continued to decline, remaining consistent with the risk appetite framework, in terms of the impact on capital adequacy.
The Basel III leverage ratio, which was sufficiently above the required threshold of 3% following the appropriation of a portion of the profit for 2014 to retained earnings, has remained within the limits set by the
Details of the various areas of risk and the methods used for their measurement and prevention are provided in Poste Italiane SpA's financial statements.
Reclassified income statement for the year ended 31 December (€m) 2015 2014
Net losses /recoveries on impairment of loans and advances (11) - (11) n/s
BancoPosta RFC’s performance during the year resulted in profit for the year of €587 million, an increase of 33% compared with 2014. The improvement reflects gains on the sale of financial assets (up 12% on 2014)
Net interest and other banking income of €5,409 million (€5,434 million for 2014) benefitted from the above gains on the sale of financial assets, totalling €426 million (€381 million in 2014) and the net profit on trading and hedges, totalling approximately €10 million (€2 million in 2014).
Personnel expenses of €95 million (€91 million in 2014) are for BancoPosta employees shown in the following table. In carrying out its activities, BancoPosta RFC is, however, the recipient of services provided by other
Equity 5,042 3,857 of which: Valuation reserves 2,506 1,618 Profit for the year 587 440
With regard to the financial position, cash and cash equivalents amount to €3,169 million at 31 December 2015 (€2,878 million at the end of 2014). This item includes €2,953 million (€2,760 million at 31 December 2014) in cash on hand at post offices and cash in transit services deriving from postal current account balances, postal savings products (Interest-bearing Postal Certificates and Postal Savings Books deposits) not yet deposited at Cassa Depositi e Prestiti, or advances collected from the State Treasury to finance post office operations. The line item also includes demand deposits at central banks of €216 million (€118 million at 31
The increase in the value of equity instruments essentially relates to the fair value of an ordinary share in Visa
December 2015. They include €5,855 million (€5,467 million at 31 December 2014) in amounts deposited by
Public Administration customers and held at the MEF, which, under a specific agreement with the MEF, earn a variable rate of return, calculated on a basket of government bonds. During the year, BancoPosta RFC
entered into derivative contracts to convert part of the return on the longer-term component of such deposits, in 2015, to fixed rate 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.
The amount due to banks, totalling €5,259 million (€5,551 million at 31 December 2014), primarily regards repurchase agreements amounting to €4,895 million (€5,231 million at 31 December 2014), relating to: • €4,111 million (including €9 million in accrued interest) in Long-Term RePos entered into with major financial institutions, with the relevant proceeds invested in fixed-income Italian government bonds with the same nominal amount; • €784 million in ordinary repurchase agreements designed to optimise returns on investments with respect to short-term movements in private customer deposits.
The amount due to customers is up from €42,567 million at the end of December 2014 to €45,469 million at 31 December 2015. This regards current account deposits of €43,093 million (€40,012 million at 31
The increase in direct deposits is due to general market conditions, marked by low interest rates and a lack of attractive alternative forms of cash investment.
Other liabilities of €2,199 million (€1,973 million at 31 December 2014) primarily regard tax liabilities in the form of tax withholdings, items in progress that will be settled after the end of the reporting period and amounts payable to other Poste Italiane functions. In this regard, it should be noted that, in carrying out its activities, BancoPosta RFC makes use of real estate assets (e.g., use and management of office space for
BancoPosta’s operations) and technology assets (e.g., the design and implementation of new services, the development and maintenance of operations and business software) owned by Poste Italiane SpA. The provision of these services is regulated by operating guidelines and remunerated through the payment by
In addition to the initial reserve of €1 billion, it includes retained earnings of €949 million, the positive movement in the fair value reserve for investments in available-for-sale financial assets, totalling €2,506 million, and profit for the year of €587 million.
BancoPosta RFC Regulation, the Guidelines for Internal Control and Risk Management System (SCIGR), the
In terms of BancoPosta’s products and services, following changes to the “Regulations regarding the transparency of banking and financial transactions and services. Fairness in relations between intermediaries and customers”, introduced by the Bank of Italy on 15 July 2015, amendment of the related information documents was completed (within the established deadline of 1 October 2015), including the leaflets relating to current accounts and loans, documents in line with the Standard European Consumer Credit Information, periodic summaries of current account terms and conditions sent to customers and bank statements. To comply with the new regulations, it was also necessary to make changes to the website, the related internal regulations and training materials.
With regard to investment services, regulated by the Markets in Financial Instruments Directive (MiFID), work has continued on strengthening organisational and procedural aspects in line with the CONSOB
In terms of payment services, following the European Banking authority’s issue of “Guidelines on the security of internet payments” on 19 December 2014, a specific self-assessment of internal procedures and the related applications was conducted. A plan was then drawn up to ensure compliance by the end of 2016, focusing, among other things, on strengthening the IT procedures and platforms used to monitor transactions and combat online fraud.
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).
In 2016, BancoPosta RFC will continue to implement the strategic objectives forming the basis for the Business
Italiane’s wider multi-channel strategy. The strategy of actively managing the securities portfolio, with the aim of stabilising the overall return, in terms of interest income and capital gains, will continue. Finally, during 2016, BancoPosta plans to strengthen its partnership with Cassa Depositi e Prestiti in order to identify and examine other areas for commercial cooperation by exploiting synergies between the CDP group and the
Information on transactions between BancoPosta and its related parties is provided in Poste Italiane’s financial statements (7. BancoPosta RFC’s Separate Report for the year ended 31 December 2015, Part H of the notes).
Poste Italiane SpA's financial statements include separate BancoPosta financial statements in compliance with art. 2, paragraph 17-undecies of Law 10 converting Legislative Decree 225 of 29 December 2010, requiring separate disclosure of BancoPosta's ring-fenced assets and liabilities.
Information on proceedings and BancoPosta RFC’s relations with the authorities are provided in the section,
Financial Reporting Standards (IFRS) and approved by the boards of directors of the respective companies.
(*) Postel SpA incorporated PostePrint SpA, effective from an accounting and tax viewpoint from 1 January 2015.
Revenue from sales and services 534,950 511,140 23,810 4.7% Operating profit/(loss) (51,071) (21,066) (30,005) n/s Profit/(loss) for the year (39,322) (21,273) (18,049) 84.8%
Revenue from sales and services 79,015 91,394 (12,379) -13.5% Operating profit/(loss) 1,999 525 1,474 n/s Profit/(loss) for the year 77 (1,035) 1,112 n/s
(*) The company paid dividends totalling €30 million during the year.
(**) The company paid dividends totalling €130 million during the year.
(*) Equity includes the recapitalisation of €9 million completed by the Parent Company during the year.
Revenue from sales and services 115,772 130,780 (15,008) -11.5% Operating profit/(loss) 1,078 (2,502) 3,580 n/s Profit/(loss) for the year 573 (2,495) 3,068 n/s
(*) The company paid dividends totalling €34 million during the year.
(***) The company paid dividends totalling €150 million during the year.
Revenue from sales and services 333,530 325,290 8,240 2.5% Operating profit/(loss) 31,116 13,651 17,465 n/s Profit/(loss) for the year 18,726 7,760 10,966 n/s
Business to Consumer (also B2C): online transactions between companies and final consumers.
Distribution centres: physical sites serving their local area, carrying out the basic delivery service, internal handling, support services for the transport network, other external activities not directly linked to distribution and, on occasion, other high-value-added services.
e-Government (electronic government): the computerisation of Public Administration processes, enabling documents to be processed and managed in digital format, by using information and communication technologies to optimise the work of public bodies, and offering customers (the general public and companies) faster services, as well as new services via, for example, the websites of the government agencies concerned.
International Post Corporation (IPC): a cooperative specialised in the development of operational and commercial projects for postal services, the objective of which is to improve quality of service.
J+(n): the letter J indicates the day on which the item of mail was posted and the figure indicates the number of working days after the postage date needed to complete delivery.
Posta Pick-up: a service involving the door-to-door collection of mail and parcels.
Directive governing the distribution in member states of UCIs domiciled in one of those states. A UCITS
POSTE ITALIANE FINANCIAL STATEMENTS: CONSOLIDATED and SEPARATE FINANCIAL STATEMENTS OF POSTE ITALIANE SPA
for the year ended 31 December 2015 2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES ............................................ 117 2.1 COMPLIANCE WITH IAS/IFRSs.......................................................................................................................................... 117 2.2 BASIS OF PREPARATION .................................................................................................................................................... 117 2.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND MEASUREMENT CRITERIA .............................. 119 2.4 USE OF ESTIMATES .............................................................................................................................................................. 133 2.5 DETERMINATION OF FAIR VALUE ................................................................................................................................. 140 2.6 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS AND THOSE SOON TO BE EFFECTIVE ...... 144 3. POSTE ITALIANE GROUP FOR THE YEAR ENDED 31 DECEMBER 2015 .......................................... 147 4. POSTE ITALIANE SPA FOR THE YEAR ENDED 31 DECEMBER 2015 ................................................. 231 5. RISK MANAGEMENT……………………………………………………………………………………………………………………………311 6. PENDING LEGAL ACTIONS AND RELATIONS WITH THE AUTHORITIES……………………..………………342 7. BANCOPOSTA RFC SEPARATE REPORT FOR THE YEAR ENDED 31 DECEMBER 2015 (ANNEX TO POSTE ITALIANE SPA'S FINANCIAL STATEMENTS)………………………………………………………………………351 8. REPORTS AND ATTESTATIONS .…………………………………………………………………………………………………………451
Poste Italiane SpA (the “Parent Company”) is the company formed following conversion of the former Public
owned by Ministry of the Economy and Finances (“MEF”), with the remaining shares held by institutional and retail investors.
Postal and Business Services include mail, express delivery, logistics, parcels and philately, in addition to the activities performed by the various structures of Poste Italiane SpA in favour of the Other sectors in which the
Group operates. Financial Services primarily regard the activities of Bancoposta (as listed in art. 2 of
BancoPosta RFC’s Separate Report is attached. Disclosure regarding matters common both to the Group and to Poste Italiane SpA is provided only once, in sections relevant to both sets of statements; unless otherwise indicated, the contents of these sections apply to both consolidated and separate financial statements. In particular, common disclosure notes are provided in relation to the following topics:  accounting policies, measurement criteria and estimation methods adopted (notes from 2.2 to 2.6);  risk analysis and management (note 5);  pending legal actions and relations with the authorities (note 6).
Note 7 includes BancoPosta RFC’s Separate Report, which forms an integral part of Poste Italiane SpA’s financial statements, but is prepared in accordance with the specific financial reporting rules laid down by the applicable banking regulations.
The Group’s consolidated financial statements consist of the statement of financial position, the statement of profit or loss, the statement of comprehensive income
The annual accounts are prepared in accordance with the International Financial Reporting Standards (“IFRS”)
in EC Regulation 1606/2002 of 19 July 2002, and in accordance with Legislative Decree 38 of 28 February 2005, which introduced regulations governing the adoption of IFRS in Italian law.
The accounting policies described below reflect the fact that the Group and Poste Italiane SpA will remain fully operational in the foreseeable future, in accordance with the going concern assumption, and are consistent with those applied in the preparation of the consolidated financial statements for the year ended 31 December 2014, save for the classification in the “Statement of profit and loss” of “Changes in accounting estimates”
, which, from 1 January 2015, are recognised by their nature in the statements of profit and loss
The statement of comprehensive income shows “Profit/(loss) for the year” and “Other comprehensive income” recognised directly in equity. The latter includes, but is not limited to, actuarial gains/(losses) from defined benefit plans (employee termination benefits and pensions plans), unrealised gains/(losses) on available-for-sale financial assets and the effective portion of cash flow hedges. This Statement includes items that will be reclassified to profit or loss and items that will not.
In preparing the annual accounts, the CONSOB regulations contained in Resolution 15519 of 27 July 2006 and in Ruling DEM/6064293 of 28 July 2006 have been taken into account.
In accordance with CONSOB Resolution 15519 of 27 July 2006, the statement of financial position, the statement of profit or loss and the statement of cash flows show amounts deriving from related party transactions. The statement of profit or loss also shows, where applicable, income and expenses deriving from material non-recurring transactions, or transactions that occur infrequently in the normal course of business.
Property, plant and equipment is stated at acquisition or construction cost, less accumulated depreciation and any accumulated impairment losses. Cost includes any directly attributable costs incurred to prepare the asset for its intended use, and the cost of dismantling and removing the asset to be incurred as a result of legal obligations requiring the asset to be restored to its original condition. Borrowing costs incurred for the acquisition or construction of property, plant and equipment are recognised as an expense in the period in which they are incurred (with the exception of borrowing costs directly attributable to the acquisition or construction of a qualifying asset, which are capitalised as part of the cost of the asset in question). Costs incurred for routine and/or cyclical maintenance and repairs are recognised directly in profit or loss in the year in which they are incurred. The capitalisation of costs attributable to the extension, modernisation or improvement of assets owned by Group companies or held under lease is carried out to the extent that they qualify for separate recognition as an asset or as a component of an asset, applying the component approach, which requires each component with a different useful life and value to be recognised separately. The original cost is depreciated on a straight-line basis from the date the asset is available and ready for use, based on the asset’s expected useful life.
Property and any related fixed plant and machinery located on land held under concession or sub-concession, which is to be returned free of charge to the grantor at the end of the concession term, are accounted for,
based on the nature of the asset, within property, plant and equipment and depreciated on a straight-line basis over the shorter of the useful life of the asset and the residual concession term.
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the identifiable assets and liabilities of the company or business acquired, at the date of acquisition. Goodwill attributable to investments accounted for using the equity method is included in the carrying amount of the equity investment. Goodwill is not amortised on a systematic basis, but is tested periodically for impairment.
Value in use is determined based on the method described below in “Impairment of assets”.
The costs of acquiring industrial patents, intellectual property rights, licences and similar rights are capitalised.
Amortisation is applied on a straight-line basis, in order to allocate the purchase cost over the shorter of the expected useful life of the asset and any related contract terms, from the date the Group has the right to use the asset.
Regardless of any impairment indicator, the assets listed below are tested for impairment every year: intangible assets with an indefinite useful life or that arte not yet available; the impairment test can take place at any time during the year, provided that it is performed at the same time in each of the following years; goodwill arising on acquisition.
In the Poste Italiane Group’s consolidated financial statements, investments in subsidiaries that are not significant and are not consolidated and those in companies over which the Group exerts significant influence (“associates”) are accounted for using the equity method. See also note 3.2 - Basis of consolidation.
In Poste Italiane SpA’s separate financial statements, investments in subsidiaries and associates are accounted for at cost (including any directly attributable incidental expenses), after adjustment for any impairments.
Financial instruments include financial assets and liabilities that are classified on initial recognition at fair value based on the business purpose for which they were acquired. The purchase and sale of financial instruments are recognised by category, either on the date on which the Group commits to purchase or sell the asset
On initial recognition, financial assets are classified in one of the following categories and valued as follows: • Financial assets at fair value through profit or loss
They are included in current assets, except for those with maturities greater than twelve months after the
This is possible for transactions carried out on organised markets (the “regular way”).
Financial assets with similar risk profiles are subsequently measured collectively, taking account, among other things, of the age of the receivable, the nature of the counterparty, past experience of losses and collections on similar positions and information on the related markets.
Financial liabilities are classified as current liabilities, unless there is an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.
The relationship between each hedging instrument and the hedged item is documented, as well as the risk management objective, the strategy for undertaking the hedge transaction and the methods used to assess effectiveness. Assessment of whether the hedging derivative is effective takes place both at inception of the hedge and throughout the term of the hedge. Derivatives are initially recognised at their fair value. If derivatives qualify as hedges, subsequent changes in fair value are recognised in the manner described below.
IAS 39 allows, in addition to individual assets and liabilities, the designation of a cash amount, representing a group of financial assets and liabilities (or portions thereof) as the hedged item in such a way that a group of derivative instruments may be used to reduce exposure to fair value interest rate risk
In the case of hedges associated with a highly probable forecast transaction (such as the purchase of fixed income debt securities), the reserve is reclassified to profit or loss in the period or in the periods in which the asset or liability, subsequently accounted for and connected to the aforementioned transaction, will affect profit or loss (for example, an adjustment to the return on the security).
If the hedging transaction is not fully effective, the gain or loss arising from a change in fair value relating to the ineffective portion is recognised in profit or loss for the period.
Receivables and payables attributable to BancoPosta RFC are treated as financial assets and liabilities if related to BancoPosta’s typical deposit-taking and lending activities, or services provided under authority from customers. The related operating expenses and income, if not settled or classifiable in accordance with Bank of Italy Circular 272 of 30 July 2008 – The Account Matrix, are accounted for in trade receivables and payables.
In the event of application of the own use exemption, the commitments assumed are reported in note 3.6.
SpA. The tax consolidation arrangement is governed by Group regulations based on the principles of neutrality and equality of treatment, which are intended to ensure that the companies included in the tax consolidation are in no way penalised as a result. Following adoption of the tax consolidation arrangement, the Parent Company’s tax expense is determined at consolidated level on the basis of the tax expense or tax losses for the period for each company included in the consolidation, taking account of any withholding tax or advances paid.
Poste Italiane SpA posts its IRES tax expense to income taxes for the period, after adjustments to take account of the positive or negative impact of tax consolidation adjustments. Should the reductions or increases in tax expense deriving from such adjustments be attributable to the companies included in the tax consolidation,
Other taxes not related to income are included in “Other operating costs”.
Assets are not, however, recognised in the statement of financial position when the Group has incurred an expense that, based on the best information available at the date of preparation of the financial statements, is deemed unlikely to generate economic benefits for the Group after the end of the reporting period.
In compliance with the requirements of the OIC (the Italian accounting standards setter) regarding
“Greenhouse gas emissions allowances”, in addition to being best practice for the principal IAS adopters, the accounting treatment is as follows.
The issue, free of charge, of emission allowances involves a commitment to produce, in the relevant year, a quantity of greenhouse gas emissions in proportion to the emission allowances received: this commitment is accounted for in the memorandum accounts based on the fair value of the emission allowances at the time of allocation. At the end of the year, the commitment is reduced or derecognised in proportion to the greenhouse gas emissions effectively produced and any residual value is reported in the section, “Other information”, in the Annual Report. The purchase and sale of emission allowances are accounted for in profit or loss in the year in which the transaction occurs. At the end of the year, any surplus emission allowances deriving from purchases are accounted for in closing inventory at the lower of cost and net realisable value.
These are properties held by EGI SpA and not accounted for in “Investment property” as they were purchased for sale or subsequently reclassified as held for sale.
This method is based on the ratio of costs incurred as of a given date divided by the estimated total project cost. The resulting percentage is then applied to estimated total revenue, obtaining the value to be attributed to the contract work completed and accrued revenue at the given date.
Cash and cash equivalents refer to cash in hand, deposits held at call with banks, amounts that at 31
This category refers to non-current assets (or assets awaiting disposal) where the carrying amount is to be recovered primarily through a sale transaction rather than through continued use. Assets held for sale are accounted for at the lower of the net carrying amount and fair value less costs to sell. When a depreciable asset is reclassified to this category, the depreciation process is halted at the date of the reclassification.
Reserves include capital and revenue reserves. They include, the BancoPosta ring fenced capital reserve
The following policies and classification and measurement criteria refer specifically to the operations of the
Insurance contracts are classified and measured as insurance contracts or finance contracts, based on their prevalent features. Contracts issued by Poste Vita SpA primarily relate to life assurance. In 2010 Poste Assicura
 premiums and changes in technical provisions are not recognised in income, but rather, only fees and commissions are recorded as revenue, and commissions and other charges are recorded as cost. IAS 18 and IAS 39 require revenue and costs associated with the contracts to be allocated over the contract term, based on the service supplied.
Provisions for risks and charges are made when the Group has a present (legal or constructive) obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation.
Short-term employee benefits are those that will be fully paid within twelve months of the end of the year in which the employee provided his or her services. Such benefits include wages, salaries, social security contributions, holiday pay and sick pay.
employment 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 belong 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.
Revenue is recognised at the fair value of the consideration received, net of rebates and discounts, and in accordance with the accruals basis of accounting. Revenue from the rendering of services is recognised when it can be reliably measured on the basis of the stage of completion of the service provided. Revenue from activities carried out in favour of or on behalf of the state and Public Administration entities is recognised on the basis of the amount effectively accrued, with reference to the laws and agreements in force, taking account, in any event, of the instructions contained in legislation regarding the public finances.
other operating income as follows: grants related to income are recognised in proportion to the costs actually incurred for the project and accounted for to the public entity; grants related to property, plant and equipment are recognised in proportion to the depreciation charged on the assets acquired and used to carry out the projects and whose cost have been accounted for to the public entity.
using an interest rate that discounts all cash flows relating to a given transaction in the same way.
Dividends are recognised as finance income when the right to receive payment is established, which generally corresponds with approval of the distribution by the Shareholders Meeting of the investee company. Dividends from subsidiaries are accounted for as “Other operating income”.
Diluted: at the date of preparation of these financial statements no financial instruments have been issued which have potentially dilutive characteristics
Related parties within the Group refer to Poste Italiane SpA’s direct and indirect subsidiaries and associates.
for which the above estimates and assumptions have been applied may differ from those reported in previous financial statements, due to uncertainties regarding the assumptions themselves and the conditions on which estimates are based. Estimates and assumptions are periodically reviewed and the impact of any changes is reflected in the financial statements for the period in which the estimate is revised if the revision only influences the current period, or also in future periods if the revision influences both current and future periods.
Revenue from activities carried out in favour of or on behalf of the State and Public Administration entities is recognised on the basis of the amount effectively accrued, with reference to the laws and agreements in force, taking account, in any event, of the instructions contained in legislation regarding the public finance.
Director General of the Treasury Department and General Accounting Office referring to the items described below (the “MEF letter”). The table below summarises receivables due from the State:
Other receivables and assets: Amount due under 2015 Stability Law implementing EU Court sentence - 535
Receivables due from Ministries and Public Administration entities: Cabinet Office for publisher tariff subsidies 52 103
Receivables due from Ministries and Public Administration entities: Ministry for Econ. Dev. 72 68
Other receivables and assets: Sundry receivables due from Public Administration entities 9 10
Total amounts due from the MEF and Public Administration entities 1,266 3,439
With reference to the estimation of the above receivables, considering the applicable regulations and the uncertainty on the collection time, account was taken of the following: (i) Receivables related to Universal Service compensation at 31 December 2015, amounting to €334 million, gross of provisions for doubtful debt, were determined in accordance with the pre-existing Subsidy Cap mechanism provided for by the Contratto di Programma (Service Contract) for 2009-2011. This is applicable thanks to the survival-of-term clause until the coming into force, on 1 January 2016, of the new Contratto di Programma (Service Contract) for 2015-2019, whose approval process was completed on 19 February 2016 with the registration by the Court of Auditors. Details of these receivables are as follows:  an amount of €198 million for 2015, in relation to which €132 million have already been appropriated in the 2015 state budget, €33 million have been appropriated in the state budget forecast for 2017 while funding for the remaining €33 million is still pending;  sums due from previous years for €136 million, in relation to which €64 million has been appropriated in the 2016 state budget, €41 million has been appropriated in the state budget forecast for 2017 while funding for the remaining €31 million is still pending; In December 2015, €1,082 million was collected, including €131 million for sums due in 2015 and €951 million for sums due from previous years, in accordance with the abovementioned MEF letter.
letter, for which no provision has been made in the state budget.
Company’s equity at 31 December 2015 was deferred or adjusted, was addressed in the MEF letter for up to €6 million. However, to date, the relevant sum has not been appropriated in the state budget.
Goodwill and other non-current assets are tested for impairment in accordance with the applicable accounting standards.
In particular, two cash generating units (CGUs) are identified for the Parent Company - BancoPosta RFC and the remaining Postal and Business Services segment - and goodwill has been allocated to both of these. Each of the other Group companies is considered a separate CGU. Details of goodwill are provided in note 3.3, table A3.2.
The impairment tests at 31 December 2015 were performed on the basis of the five-year business plans for 2015-2019 of the units concerned 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
(net operating profit less adjusted taxes) was capitalised using an appropriate growth rate and discounted using the related WACC (weighted average cost of capital)
The current economic and financial crisis - which has resulted in highly volatile markets and great uncertainty with regard to economic projections - and the decline of the postal market in which the Group operates make it difficult to produce forecasts that can, with certainty, be defined as reliable. In this context, as at 31
In addition, in assessing the value of non-current assets of the Postal and Business service segment, account was taken of any effect on the value in use of certain properties, should such properties no longer be used in operations in future, making adjustments to certain impairment losses taken in the past in the light of new evidence available at 31 December 2015. The fair value of the Parent Company’s properties used in operations continued to be significantly higher than their carrying amount. As in the past, in determining the value of properties used as post offices and sorting centres, Poste Italiane SpA’s universal service obligation was taken into account, as was the inseparability of the cash flows generated from the properties that provide this service, (which the Parent Company is required to operate throughout the country regardless of the expected profitability of each location); the unique nature of the operating processes involved and the substantial overlap between postal and financial activities within the same outlets, represented by post offices, were also considered. On this basis, the value in use of the Parent Company’s land and buildings used in operations is relatively unaffected by changes in the commercial value of the properties concerned and, in certain critical market conditions, certain properties may have values that are significantly higher than their market value, without this having any impact on the cash flows or results of the Postal and Business Services segment.
Depreciation and amortisation of property, plant and equipment and intangible assets
The calculation of employee termination benefits is conducted also by independent actuaries, considering vested termination benefits for the period of service to date and actuarial assumptions of a demographic, economic and financial nature. These assumptions, which are based on the Group’s experience and relevant best practices, are subject to periodic reviews.
The Poste Italiane Group has adopted a fair value policy, setting out the general principles and rules to be applied in determining fair value for the purposes of preparing the financial statements, conducting risk management assessments and supporting the market transactions carried out by the Finance departments of the various Group entities. The principles and rules to be applied in measuring the fair value of financial instruments have been defined in compliance with indications from the various (banking and insurance)
In compliance with IFRS 13 - Fair Value Measurement, the following section provides information regarding the techniques used to measure the fair value of financial instruments within the Poste Italiane Group.
Level 1: this level is comprised of fair values determined with reference to prices quoted in active markets for identical assets or liabilities to which the entity has access on the measurement date. For the Poste Italiane
Group, these include the following types of financial instruments: Bonds quoted on active markets: The Group’s Fair Value Policy does not set out any techniques or criteria to be followed in determining the fair value of investments in shares of funds, for which NAV per share as determined by the fund managers are available.
 Bonds issued by EU government bodies or Italian or foreign corporate bonds: measurement is based on bid prices, according to a hierarchy of sources where the MTS (the wholesale electronic market for government securities) ranks first, MILA (Milan Stock Exchange) second, for bonds intended for retail customers, and the CBBT (Bloomberg Composite Price) third;  Financial liabilities: measurement is based on the ask prices quoted by CBBT (Bloomberg Composite Price).
 Structured bonds: measurement is based on a building blocks approach, where the structured bond is broken down into its basic components: the bond component and the option component. The bond component is measured by discounting cash flows to present value in line with the approach applicable to straight bonds, as defined above. The option component - which considering the features of the bonds included in the portfolio of the Poste Italiane Group relates to interest rate risk - is measured in accordance with a standard closed form expression as with classical option valuation models with underlyings exposed to such risks. In the case of structured bonds used to hedge index-linked policies (before ISVAP
regulation no. 32), measurement is based on the bid price provided by the financial counterparties with which buyback agreements have been struck.
Derivative financial instruments:  Interest rate swaps: Plain vanilla interest rate swaps: valued using discounted cash flow techniques, involving the computation of the present value of future differentials between the receiver and payer legs of the swap. The construction of yield curves to estimate future cash flows indexed to market parameters (money market rates and/or inflation) and computation of the present value of future differentials are carried out using techniques commonly used in capital markets.
 Warrants: considering the features of the securities held, measurement is based on the local volatility model. In particular, considering that buyback agreements have been entered into with the counterparties that structured these warrants, and that such counterparties use valuation models consistent with those used by the Group, these instruments are measured on the basis of the bid price quoted by the counterparties.
 Borrowings: these are measured by discounting their future cash flows using as input a yield curve reflecting the spread applicable to the credit risk.
 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.
The following will take effect on 1 January 2016: IFRS – Annual improvement cycle in relation to IFRS 2010-2012 adopted with Regulation (EU) no. 28/2015 in connection with the annual projects to improve and revise international accounting standards.
IFRS 11 – Joint Arrangements amended by Regulation (EU) no. 2173/2015. The amendment provides that when an entity acquires an interest in a joint operation in which the activity of the joint operation constitutes a business it will apply all the principles contained in IFRS 3. This applies to the acquisition of both the initial interest and additional interests. On the other hand, an interest held prior to the coming into effect of the amendment is not remeasured, in the event that the acquisition of an additional interest allows the entity to retain joint control (i.e. the additional interest acquired does not give the entity a controlling interest).
2231/2015. The amendment clarifies whether it is appropriate to use revenue-based methods to calculate the depreciation or amortisation of an asset (in addition to those permitted by the pre-existing versions of IAS 16 and IAS 38 for tangible and intangible assets, respectively). The amendment defined this method as inappropriate in the case of tangible assets and as appropriate for intangible assets but only if it can be demonstrated that revenue and the consumption of the economic benefits of the intangible assets are highly correlated. The amendment is founded on the existence of cases where the revenue generated by the activity that includes the use of an asset typically reflects factors that are not directly linked to consumption of the economic benefits embodied in the asset, such as selling activity, a different production process, changes in selling prices.
Lastly, as of the date of approval of these financial statement, the IASB has issued standards, interpretations, amendments that have not yet been endorsed by the EU and/or that are still in the consultation phase, including: IFRS 9 – Financial Instruments; IFRS 14 - Regulatory Deferral Accounts; IFRS 15 - Revenue from Contracts with Customers; IFRS 16 – Leases; Amendments to IFRS 10, IFRS 12 e IAS 28 – Investment Entities – Applying the Exception to Consolidation; Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its
Associate/Joint Venture; Amendments to IAS 12 on the Recognition of Deferred Tax Assets for Unrealised Losses; Amendments to IAS 7 on the information to be provided on cash flows from financing activities.
A4 – INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD ............................................................ 164
C3 – OTHER INCOME FROM FINANCIAL AND INSURANCE ACTIVITIES ........................................................... 201
C13 – INCOME TAX EXPENSE ................................................................................................................................................... 209 3.6 OTHER INFORMATION ON FINANCIAL ASSETS AND LIABILITIES .................................................. 218
3.9 EVENTS AFTER THE END OF THE REPORTING PERIOD .................................................................... 230
Cash and deposits attributable to BancoPosta [A9] 3,161 - 2,873 -
Other expenses from financial and insurance activities of which, non-recurring costs/(income) (11) of which, non-recurring costs/(income) 12 -
Profit/(Loss) before tax 933 697 of which, non-recurring costs/(income) 16 -
PROFIT FOR THE YEAR 552 212 attributable to owners of the Parent 552 212 attributable to non-controlling interests - -
Reserves * This item includes profit for the year of €552 million, actuarial gains on provisions for employee termination benefits for €81 million after tax expense and deferred tax assets of €30 million.
Net cash generated by/(used for) held-to-maturity financial assets attributable to financial activities 1,404 1,332
Cash generated by/(used for) assets and liabilities attributable to financial activities [c] (842) (382)
Receivable authorised by 2015 Stability Law in implementation of Sentence of the European Court 535 -
and 50%), hereinafter “associates”, are accounted for using the equity method.
Appropriate adjustments to the entity's share of the profits or losses after acquisition are made to account for additional depreciation or amortisation of the investee's depreciable or amortisable assets based on the excess of their fair values over their carrying amounts at the time the investment was acquired. Similarly, appropriate adjustments are made to the entity’s share of profits or losses after acquisition to account for impairment losses, for example, of goodwill or property, plant and equipment.
The following table shows the number of subsidiaries by method of consolidation and measurement: Subsidiaries At 31 December
As a part of broader rationalisation of the structure of the Poste Italiane Group, the following transactions involving companies under the direct or indirect control of the Parent Company were carried out in 2015:  On 4 February 2015 and 6 February 2015, the boards of directors of Postel SpA and PostelPrint SpA
March 2015 and 13 March 2015, respectively, voted in favour of the merger of Italia Logistica Srl with and into SDA Express Courier SpA by approving the related plan. Both merger deeds were filed with the
Companies’ Register on 16 March 2015 and the final merger deed was executed by the companies on 26
May 2015. The merger is effective for accounting and tax purposes from 1 June 2015.
 The liquidations of the Brazilian company, Poste Holding Participações do Brasil LTDA (established in
Moreover:  Following the decision taken by the Board of Directors on 15 April 2015, on 25 June 2015 the Parent
Company completed the acquisition of a 10.32% interest in Anima Holding SpA from Monte Paschi Siena
Italiane’s inclusion in the shareholders’ agreement that BMPS has previously entered into with Banca
Fair value adjus tments : - Property, plant and equipment - - Intangible as s ets - - Deferred tax liabilities -
Net as s ets acquired after the allocation (pro rata) 75.9
The table below shows a comparison between the consideration paid for the two companies and the net assets acquired. In particular, out of the difference of €19.6 million, €2.5 million was allocated to the fair value of the technology platform (intangible assets on the books of the acquiree at an amount of €1.2 million) and the remaining €17.8 million to goodwill.
A list of subsidiaries consolidated on a line-by-line basis and associates accounted for using the equity method, together with key information, is provided in note 3.8.
Fair value adjus tments : - Property, plant and equipment - - Intangible as s ets 2.5 - Deferred tax liabilities (0.7)
The following table shows movements in property, plant and equipment in 2015: tab. A1 - Movements in property, plant and equipment (€m)
Reclassifications from assets under construction, totalling €37 million, relate primarily to the acquisition cost of assets that became available and ready for use during the year. In particular, these assets regard the rollout of hardware held in storage and completion of the process of restyling leased and owned properties.
Investment property primarily relates to residential accommodation previously used by post office directors and former service accommodation owned by Poste Italiane SpA in accordance with Law 560 of 24
The fair value of investment property at 31 December 2015 includes approximately €67 million representing the sale price applicable to the Parent Company’s former service accommodation in accordance with Law 560 of 24 December 1993, while the remaining balance reflects price estimates computed internally by the
Given the resulting lack of certainty, the expected revenue flows from these leases are not referred to in these notes.
The following table shows movements in intangible assets in 2015: tab. A3 - Movements in intangible assets (€m)
Ind u st r ia l pat ent s, in t e llect u al propert y r ight s, concessions, licences, t rad emarks and similar r ight s
Purchases of industrial patents, intellectual property, rights, concessions, licences, trademarks and similar rights total €155 million, before amortisation for the period, and relate primarily to the purchase and entry into service of new software programmes and the acquisition of software licences.
The table below shows amounts for the IT platform used in development of the Full MVNO (Mobile Virtual
Network Operator) project and held under lease finance arrangements by PosteMobile SpA. The platform is amortised over 10 years.
The balance of intangible assets under construction includes activities conducted by the Parent Company, primarily regarding the development for software relating to the infrastructure platform (€19 million), for
The recoverable amount of the CGU Postel, which is equal to the value in use of the company and determined on the basis of the latest forecast data available, was lower than the capital invested in the company (including the relevant goodwill) for approximately €12 million. Value in use was determined by using a WACC of 7% (5.70% at 31 December 2014) and a 1.34% growth rate (1% at 31 December 2014).
Postel SpA is a CGU allocated to the Postal and Business Services segment.
The main change in this item concerned the acquisition of the interest in Anima Holding for €210,468 thousand (including goodwill of €134.6 million) on 25 June 2015. Subsequently, the carrying amount of this investment was increased by approximately €2.8 million, of which €2.5 million relating to the results achieved by this associate between 30 June and 30 September 2015 (latest available data) and €0.3 million due to other changes in equity occurring in the same period.
On 23 June 2015, Postecom SpA entered into a master cooperation agreement with Conio Inc. for the research, development and production of innovative, high technology-value products/services relating to electronic payment solutions and their distribution/sale in Italy and abroad. The same agreement included
The following table provides a breakdown of financial assets at 31 December 2015: tab. A5 - Financial assets
M EF account, held at the Treasury - 1,331 1,331 - 663 663
ECB;  €72 million for a loan provided by Cassa Depositi e Prestiti.
Receivables amount to €8,395 million reflect: The operations in question regard the financial services provided by the Parent Company pursuant to Presidential Decree 144/2001, which from 2 May 2011 are attributable to the ring-fenced capital, and which relate to the management of postal current account 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. Private customer deposits can only be used to purchase euro zone government securities (due to the changes introduced by article 1, paragraph 1097 of Law no. 296 of 27 December 2006 and by article 1 paragraph 285 of the 2015 Stability Law (Law 190 of 23 December 2014), BancoPosta RFC can invest up to 50% of assets under management in Italian government securities). Conversely, funds deposited by Public Administration entities are placed with the Ministry of the Economy and Finances at a variable rate of interest linked to a basket of government securities and money market indices, in accordance with a specific agreement with the MEF regarding treasury services. Collection and payment services on behalf of third parties include the collection of postal savings (Postal Savings Books and 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, within two bank working days of the transaction date.
In term of the fair value hierarchy, which reflects the relevance of the sources used to measure this item, this amount qualifies for level 3.
 Amounts deposited with the MEF, totalling €5,855 million, including public customers’ current account deposits of BancoPosta RFC, which earn a variable rate of return, calculated on a basket of government bonds
The balance of cash flows from the management of postal savings, amounting to a negative €170 million, represents the balance of withdrawals less deposits during the last two days of the year and cleared early in the following year. The balance at 31 December 2015 consists of €215 million payable to
Amounts payable due to thefts from post offices regard the Parent Company’s liability to the MEF on behalf of the Italian Treasury for losses resulting from theft and fraud, totalling €158 million. This liability derives from cash withdrawals from the Treasury to make up for the losses resulting from these criminal acts, in order to ensure that post offices can continue to operate. Movements in this liability during the year are as follows: 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 maturity greater than 2 years, which approximates the return on 7-year BTPs.
tab. A5.1.1 b) - Movements in amounts payable due to theft (€m)
Amounts payable for operational risks (€34 million) regard the portion of advances obtained to fund the operations of BancoPosta, in relation to which asset under recovery is certain or probable.
 Other financial receivables of €1,209 million break down as follows: tab. A5.1.2 - Other financial receivables (€m)
Guarantee deposits, totalling €864 million relate to €857 million provided to counterparties in asset swap transactions (with collateral provided by specific Credit Support Annexes) and €7 million provided to counterparties in repurchase agreements (with collateral contemplated by specific a Global Master
The following table shows a breakdown of investments in securities and equity instruments: tab. A5.2 - Investments in securities and equity instruments (€m)
Investments in securities relate to investments in Italian government securities with a nominal value of €39,832 million, held primarily by BancoPosta RFC
Movements in investments in securities in 2014 and 2015 are as follows: tab. A5.2.1 - Movements in investments in securities (€m)
Effect of sales on profit or loss - 392 - 392
Effect of sales on profit or loss - 385 1 386
The overall fair value gain for the period of €980 million has been recognised in the relevant equity reserve for the positive amount of €1,412 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.
The composition of this portfolio aims to replicate the financial structure of deposits paid into postal current accounts by private customers. Trend analysis for forecasting and prudential purposes is based on an appropriate statistical model developed for Poste Italiane SpA by a leading market operator. An Asset & Liability Management system has been developed to manage the relationship between customer deposits and investments.
In terms of the fair value hierarchy, which reflects the relevance of the sources used to measure assets, this amount qualifies for level 1.
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, reflecting the fair value of 756,280 Class B shares of Mastercard Incorporated. These shares are not traded on an organised exchange but are convertible into an equal number of Class A shares, which are listed on the New York Stock Exchange, if disposal is desired;  €3 million, reflecting the fair value of 11,144 class C shares of Visa Incorporated. These shares are not traded on an organised exchange but are convertible into an equal number of Class A shares, which are listed on the New York Stock Exchange, if disposal is desired.
At 31 December 2015, derivative financial instruments attributable to the Financial Services segment, amounting to €450 million, include €328 million attributable to BancoPosta RFC and €122 million to BdM-
The following table shows movements in the derivative instruments attributable to BancoPosta RFC: tab. A5.3 - Movements in derivative financial instruments (€m)
Gains/(Losses) through profit or loss ** - - - - - - - - - - - -
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 an increase in fair value of €404 million, whilst the hedged
In the year under review, the Parent 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.
Regarding derivative instruments recognised at fair value through profit or loss, the Parent Company entered into new contracts with a total notional amount of €108 million, to generate a fixed return, for 2015, on the public customers’ current account deposits deposited with the MEF, the majority shareholder, which earn a variable rate of return (tab. A5.1).
The positive fair value of €122 million for derivatives designated as fair value hedges refers to the value of four interest rate swap contracts used to hedge bonds issued by BdM-MCC SpA (tab. B8), with a nominal value of
Receivables of €66 million relate to subscription of and payment for unissued units of mutual investment funds by Poste Vita SpA.
Nominal valu e Fair valu e Fair valu e Fair valu e Fair valu e
Effects of sales on profit or loss 349 (15) (1) 333
Sales, redemptions and settlement of accrued income (11,909) (114) (3) (12,026)
Effects of sales on profit or loss 328 - 1 329
The Group recorded fair value gains of €1,084 million in relation to its available-for-sale financial assets, as follows:  net gains of €1,082 million deriving from the measurement of securities held by Poste Vita SpA, of which €1,035 million was transferred to policyholders, with a contra-entry made in technical provisions in accordance with the shadow accounting method;  net fair value gains on the securities held by Poste Assicura SpA, totalling €2 million.
The above changes in the fair value of available-for-sale financial assets during 2015 had a net positive impact on the relevant equity reserve of €49 million (tab. B4).
Movements in financial instruments at fair value through profit or loss are as follows:
tab. A5.6 - Movements in financial instruments at fair value through profit or loss (€m)
Effects of sales on profit or loss 11 14 1 26
Fair value gains and losses through profit or loss 65 22 (392) (305)
Fixed - income inst ru ment s St ru ct u red b ond s
These financial instruments are held by the subsidiary, Poste Vita SpA, and relate to:  fixed income securities, amounting to €7,559 million and consisting of €5,665 million in coupon stripped
 structured bonds, amounting to €1,346 million and relating to investments whose returns are linked to particular market indices, primarily designed to cover the insurance obligations to the holders of Class III
Investments in the amount of €8,606 million are used to cover Class I products while the rest relates to
Loans include €78 million (nominal amount €75 million) in Contingent Convertible Notes
. The Notes were issued by Midco SpA, which in turn owns 51% of Alitalia SAI. The Contingent Convertible Notes, with a twenty-year term to maturity starting 1 January 2015, carry a nominal rate of interest of 7% per annum. Interest and principal payments will be made by Midco SpA if, and to the extent that, there is available liquidity. Based on the latest available business plan of the Alitalia Group, a reasonable estimate of the effective interest rate payable on the Notes amounts to approximately 4.6%.
Receivables, almost entirely attributable to the Parent Company, break down as follows: tab. A5.8 - Receivables (€m)
Due from MEF for repayment of loans accounted for in liabilities - 3 3 1 116 117
Due from the purchasers of service accommodation 8 - 8 9 - 9
During 2015 the Parent 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, corresponding to its amortised cost, is due to partial repayment of the principal falling due in 2015 and not yet repaid by the MEF.
Fair value gains and losses through equity 22 1 - 23
Fair value gains and losses through equity 4 - - 4
Fair value gains and losses through profit or loss (5) - - (5)
Of these, instruments with a value of €375 million have been hedged using asset swaps designated as fair value hedges. Instruments with a nominal value of €450 million are encumbered, as they have been delivered to counterparties in repurchase agreements (tab. B8.1).
Other investments relate to units of equity mutual investment funds with a fair value of €6 million.
Movements in derivative assets and liabilities are as follows: tab. A5.10 - Movements in derivative financial instruments (€m)
Of which: Year end ed 31 Decemb er 2015 Year end ed 31 Decemb er 2014 * Increases / (decreases) refer to the nominal value of new transactions and changes in the fair value of the overall portfolio during the period.
October 2013 (section B.8). 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 yearend, was recognised through equity, in the cash flow hedge reserve. With this transaction, the Parent
Subsidiaries, associates and Joint ventures - 2 2 - 2 2
Receivables due from customers tab. A7.1 - R eceivables due from customers (€m)
Ministries and Public Administration entities 49 632 681 58 753 811
– Pension and other employment related services on behalf of INPS (the National Institute of Social
– Receivables arising from public grant management services refer to fees for services rendered to
 Receivables for parcel, express courier and express parcel services refer to services provided by SDA
Express Courier SpA, and to the mailing of parcels by the Parent Company.
 Amounts due for other Bancoposta services refer to amounts due on financial services, personal loans, overdrafts and mortgages sold on behalf of third parties, totalling €81 million.
Movements in provisions for doubtful debts are as follows: tab. A7.2 - Movements in provisions for doubtful debts (€m)
This item relates to trade receivables due to the Parent Company from the Ministry of the Economy and
Specifically:  Universal Service compensation includes: tab. A7.3.1 - Universal Service compensation receivable (€m)
Programma (Service Contract) for 2009-2011 which, in accordance with the survival–of-term provision, remains in force until 1 January 2016, the date of entry into force of the new Service Contract for 20152019, which was approved on 19 February 2016 with its registration with the Court of Auditors. To this end: - Regarding the balance outstanding of the compensation for 2015, provisions of €132 million have been made in the state budget for 2015 and €33 million in the state budget forecast for 2017, while no funds have been earmarked for the remaining €33 million.
- Regarding the balance outstanding of the 2014 compensation, provision of €14 million has been made in the state budget for 2016, while provision of €41 million has been made in the state budget forecast for 2017.
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 Parent Company appealed AGCom’s decision on 13 November 2014 before the Regional Administrative Court (TAR).
According to the new Service Contract, starting in 2016, the Parent Company will receive Universal
 The remuneration of current account deposits refers entirely to amounts accruing in 2015 and largely relates to the deposit of funds deriving from accounts opened by Public Administration entities and attributable to BancoPosta RFC.
Payments for delegated services relate to fees accrued solely in the year under review for treasury services performed by Bancoposta on behalf of the state in accordance with a special agreement with the MEF, which was renewed on 11 June 2014 for the three-year period 2014-2016.
Movements in provisions for doubtful debts due from the MEF are as follows: tab. A7.4 - Movements in provisions for doubtful debts due from the MEF (€m)
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 €67 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: tab. A8 - Other receivables and assets (€m)
Amounts restricted by court rulings - 68 68 - 81 81
Accrued income and prepaid expenses from trading transactions - 16 16 1 16 17
Provisions for doubtful debts due from others - (59) (59) - (57) (57)
Receivable authorised by the 2015 Stability Law in implementation of the sentence of the European Court [B2] - - -
 substitute tax paid refers mainly to: – €1,372 million paid in advance by Poste Vita SpA for the financial years 2010-2015, relating to withholding and substitute tax paid on capital gains on life policies
Company in 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 relating to fixed-term contract settlements 6 - - 6 1 - 7
MEF Decree dated 24 May 2012: Manner of implementation of paragraphs from 1 to 3 of article 19 of Law Decree 201 of 6 December 2011, on stamp duty on current accounts and financial products (Official Gazette 127 of 1 June 2012).
Details of this item are as follows: tab. A9 - Cash and deposits attributable to BancoPosta (€m)
Bank deposits and amounts held at the Italian Treasury include €1,082 million deposited by the MEF in a noninterest bearing current account at the Italian Treasury on 15 October 2015 and released on 29 December 2015, following the decision of the European Commission on the compatibility of the Service Contract 20152019 with EU rules on state aid. Moreover, bank deposits and amounts held at the Italian Treasury include €11 million whose use is restricted by court orders related to different disputes.
The share capital of Poste Italiane SpA of 1,306,110,000 no-par value ordinary shares, of which the Ministry of the Economy and Finances holds 64.7%, while the remaining shares are held by institutional and retail investors.
Group companies - Effects of intercompany transactions (including dividends) (638) - (392) (246) - (235) (11)
- Elimination of adjustments to value of consolidated companies 363 - 84 279 - 29 250 - - - Amortisation until1 January 2004/Impairment of goodwill (139) - (12) (127) - - (127)
- Non-controlling interests in profit/loss - - - - - - - -
As resolved at the General Meeting of shareholders held on 28 April 2015, on 28 May 2015 Poste Italiane SpA
paid dividends totalling €250 million, based on a dividend per share of €0.19.
Law - of amounts deducted from Poste Italiane SpA’s retained earnings on 17 November 2008 and transferred to the MEF, pursuant to the European Commission’s Decision C42/2006 of 16 July 2008 on State
. According to Company calculations, the sums due until 13 May 2015, inclusive of interest, amounted to
Pursuant to a ruling of the General Court of the European Union dated 13 September 2013, which found in favour of the Company. 53
Company’s shares in issue, given that no financial instruments with potentially dilutive effects have been issued at 31 December 2015 or at 31 December 2014.
Increases/(decreases) in fair value during the period - - 1,966 144 - 2,110
Tax effect of changes in fair value - - (628) (47) - (675)
Transfers to profit or loss - - (289) (46) - (335)
Tax effect of transfers to profit or loss - - 94 15 - 109 - -
Increases/(decreases) in fair value during the period - - 1,591 13 1,604
Tax effect of changes in fair value - - (473) (4) - (477)
Tax effect of transfers to profit or loss - - 151 23 - 174
These provisions refer to the contractual obligations of the subsidiaries, Poste Vita SpA and Poste Assicura
Technical provisions where investment risk is transferred to policyholders 7,218 8,503
Other provisions 9,790 9,511 for operating costs 79 83 for deferred liabilities to policyholders 9,711 9,428
Provisions for taxation/social security contributions 24 3 - (3) - 24
Other provisions for risks and charges 80 12 - (10) (6) 76
Overall analysis of provisions: Movements in provisions for risks and charges for the year ended 31 December 2014 (€m)
Provisions for disputes with staff (1) 232 27 - (32) (43) 184
Provisions for expired and statute barred postal savings certificates 14 - - - - 14
(1) Net releases for Personnel expenses amount to €11 million. Service costs (legal assistance) total €6 million.
(1) Net releases for Personnel expenses amount to €13 million. Service costs (legal assistance) total €7 million.
 Provisions for restructuring charges reflect the estimated costs to be incurred by the Parent Company for early retirement incentives, under the current redundancy scheme for employees leaving the Company by 31 December 2017. Use of €256 million was made during the year under review.
 Provisions for expired and statute barred Postal Certificates held by Bancoposta have been made to cover the cost of redeeming certificates relating to specific issues, the value of which was recognised in revenue in profit or loss in the years in which the certificates became invalid. The provisions were made in response to the Parent Company’s decision to redeem such certificates even if expired and statute barred.
At 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.
Change in scope of consolidation 1 - 1 - - -
The main actuarial assumptions applied in calculating provisions for employee termination benefits and the pension plan, where the latter relates solely to BdM-MCC employees, are as follows:
Actuarial gains and losses are generated by the following factors: The sensitivity of employee termination benefits and the pension plan to changes in the principal actuarial assumptions is analysed below.
Financial liabilities break down as follows at 31 December 2015: tab. B8 - Financial liabilities (€m)
Payables deriving from postal current accounts - 43,468 43,468 - 40,615 40,615
Fair value through profit or loss - - - 8 - 8
Medium Term Note programme of €2 billion listed by the Company in 2013 on the Luxembourg Stock
 Subordinated bonds with a nominal value of €750 million and accounted for at their amortised cost of €758 million, issued at a below par price of 99.597 by Poste Vita SpA on 30 May 2014 and listed on the
Luxembourg Stock Exchange. The bonds have a five-year term to maturity and pay annual coupon interest of 2.875%. The fair value of this liability at 31 December 2015 is €799 million.
This item breaks down as follows: tab. B8.1 - Borrowings from financial institutions (€m)
EIB fixed rate loan maturing 11 April 2018 200 - 200 200 - 200
 €510 million relating to repurchase agreements, involving securities with a total nominal amount of €450 million entered into by the Parent Company in the year under review to optimise returns and to meet its short-term liquidity requirements.
At 31 December 2015, the fair value of repurchase agreements amounts to €5,459 million.
The fair value of the two fixed rate EIB loans of €400 million obtained by the Parent Company €405 million.
Other borrowings of €375 million refer nearly entirely to:  medium-term loans entered into by BdM-MCC SpA for €200 million, of which €54 million provided by
The carrying amount of the above items and other borrowings approximates to their fair value at 31
tab. B8.2 - Reconciliation of total future payments and their present value (€m)
At 31 Decemb er 2015 tab. B8.3. - Term to maturity of finance lease liabilities (€m)
Industrial patents, intellectual property, rights, concessions, licences, trademarks and similar rights 1 2 - 3
At 31 December 2015, the following credit facilities are available:  committed lines of €1,630 million, of which €830 million has been used;  uncommitted lines of credit of €1,753 million, of which €295 million was used for short-term borrowings; In terms of fair value hierarchy, which reflects the relevance of the sources used to measure assets, this amount qualifies for level 2.
 overdraft facilities of €88 million, of which €5 million has been used;  unsecured guarantee facilities with a value of approximately €491 million (with €347 million available to the Parent Company), of which guarantees with a value of €281 million have been used on behalf of companies of the Poste Italiane Group in favour of third parties.
Amounts to be credited to customers - 160 160 - 120 120
Specifically:  Amounts due on prepaid cards, totalling €1,454 million relate to the electronic top-up of Postepay cards.
 Amounts payable for guarantee deposits regard €124 million paid to BdM-MCC SpA by interest rate swap counterparties (collateral provided by specific Credit Support Annexes), in relation to swaps entered into for fair value hedging purposes and €81 million received by the Parent Company in relation to Asset swaps (collateral provided by specific Credit Support Annexes) and repurchase agreements covering fixed income securities (collateral under specific Global Master Repurchase Agreements).
Amounts due to staff relate primarily to amounts accrued and not paid at 31 December 2015. Details are as follows: tab. B10.1 - Amounts due to staff (€m)
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.
 Amounts payable to pension funds relate to sums due to FondoPoste and other pension funds following the decision by certain Group employees to join supplementary funds.
Tax due on insurance provisions - 385 385 - 334 334
Withholding tax on employees' and consultants' salaries - 113 113 - 101 101
Withholding tax on postal current accounts - 7 7 - 21 21
 Withholding tax on employees’ and consultants’ salaries relates to amounts paid to the tax authorities by
 Substitute tax, relating mainly to Poste Vita SpA, refers to the tax payable on annual revaluations of individual pension plans and the monthly withholdings for December, which were both paid in January and February 2016.
The items in question were reviewed by a joint working group created with the MEF – Department of
Sundry payables attributable to BancoPosta 76 8 84 76 10 86
In detail:  sundry payables attributable to BancoPosta’s operations primarily relate to prior year balances currently being verified.
 guarantee deposits primarily relate to amounts collected from the Parent Company’s customers as a guarantee of payment for services (postage-paid mailing services, the use of post office boxes, lease contracts, telegraphic service contracts, etc.).
Accrued expenses and deferred income from trading transactions tab. B10.5 - Accrued liabilities and deferred income (€m)
Deferred income comprises:  €21 million in prepaid telephone traffic sold as of 31 December 2015 sold by PosteMobile SpA and not yet used by customers;  €14 million in fees on Postemat and Postepay Evolution cards collected in advance by the Parent
Revenue from sales and services, amounting to €8,810 million, breaks down as follows: tab. C1 - Revenue from sales and services (€m)
 Integrated services relate primarily to the delivery of administrative notices and fines (€195 million).
 Universal Service compensation relates to amounts paid by the MEF to cover the costs of fulfilling the
BancoPosta RFC, by BdM-MCC SpA and by BancoPosta Fondi SpA SGR - break down as follows: tab. C1.2 - Revenue from Financial Services (€m)
In particular:  Fees for the collection of postal savings deposits relate to remuneration for the provision and redemption of Interest-bearing Postal Certificates and payments into and withdrawals from Postal Savings Books. This service is provided by Poste Italiane SpA on behalf of Cassa Depositi e Prestiti under the Agreement of 4
Interest income on asset swaps of available-for-sale financial asset 4 41
Remuneration of current account deposits (deposited with the M EF) 34 74
 Revenue from current account services primarily relates to charges on current accounts, fees on amounts collected and on statements of account sent to customers, annual fees on debit cards and related transactions.
 Interest on loans and fees for the management of public funds are entirely attributable to BdM-MCC SpA.
Other sales of goods and services relate to income of €240 million generated by PosteMobile SpA mainly for mobile telephony services; the difference relates to the revenue of the SDS Group, which was acquired in 2015 by Poste Vita SpA.
Details of this item are as follows: tab. C2 - Insurance premium revenue (€m)
Details of this item are as follows: tab. C3 - Other income from financial and insurance activities (€m)
The following table provides a breakdown of the cost of goods and services: tab. C5 - Cost of goods and services (€m)
Raw, ancillary and consumable materials and goods for resale 175 230
Real estate leases relate almost entirely to the buildings from which the Group 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
Change in inventories of work in progress, semi-finished and finished goods [tab. A6] 2 5
Movement in technical provisions where investment risk is transferred to policyholders (1,285) (687)
The net movement in technical provisions for the insurance business and other claims expenses primarily includes:  claims paid, policies redeemed and the related expenses incurred by Poste Vita SpA during the period, totalling €7,313 million;  the change in mathematical provisions, totalling €13,383 million, reflecting increased obligations to policyholder;
 the decrease in technical provisions where investment risk is transferred to policyholders (so-called class
Provisions for employee termination benefits: supplementary pension funds and INPS 269 272
Net provisions (reversals) for disputes with staff [tab. B6] (13) (11)
Net provisions for disputes with staff and provisions for restructuring charges are described in section B6.
Parent Company by virtue of court orders not yet become final. Under the terms of these arrangements, these employees waived the legal and economic effects of the re-employment ruling and about 929 of them undertook to return, in instalments over the medium/long term, without interest, the back-pay collected for the periods not worked, which the Company had expensed out in previous years. These salaries amounted to approximately €11.3 million, but the Parent Company recognised the present value of €11 million as income for the current year.
The following table shows the Group’s average and year-end headcounts by category: Taking account of staff on flexible contracts, the total average number of full-time equivalent staff in 2015 is
Depreciation, amortisation and impairments break down as follows: tab. C9 - Depreciation, amortisation and impairments (€m)
Goodwill impairment refers to Postel SpA, as described in note A3.
Provisions (reversal of provisions) for receivables due from M EF [tab. A7.4] (68) 57
Income from and costs incurred on financial instruments relate to assets other than those in which deposits collected by BancoPosta and the financial and insurance businesses are invested.
For the purposes of reconciliation with the statement of cash flows, for 2015 these items total €127 million (€141 million in 2014). (2)
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.
Realised losses on financial instruments at fair value through profit or loss 6 -
Finance costs on provisions for employee termination benefits and pension plans [tab. B7] 28 39
Income tax of €381 million for the year reflects the effects of net non-recurring income/(expense) totalling €16 million, as described below.
Net provisions for risks and charges and bad debts 12 1.30% 16 2.30%
Realignment of tax bases and carrying amounts and taxation for previous years (4) -0.40% (9) -1.32%
Non-recurring income/(expenses) for deferred taxes recycled to profit or loss 7 0.71% - 0.00%
prepayments for the current year 213 46 259 228 225 453 balance payable for the previous year 12 4 16 63 5 68
Provisions to profit or loss (288) (59) (347) (288) (240) (528)
Cu rrent t axes for t he year end ed 31 Decemb er 2015 Cu rrent t axes for t he year end ed 31 Decemb er 2014
Current tax assets of €72 million at 31 December 2015 include €12 million in relation to an unreported IRAP
deduction, following submission of a claim pursuant to article 6 of Law Decree 185 of 29 November 2008 and article 2 of Law Decree 201 of 6 December 2011, which provided for a partial deductibility of IRAP from IRES.
The nominal tax rate for IRES is 27.5%, whilst the Group’s average statutory rate for IRAP is 6.16%
Movements in deferred tax assets and liabilities are shown below: The nominal IRAP rate is 3.90% for most taxpayers, 4.65% for banks and other financial entities and 5.90% for insurance companies (+/-0.92%, representing regional increases and cuts and + 0.15% representing an increase for regions that showed a healthcare deficit).
tab. C13.5 - Movements in deferred tax assets and liabilities (€m)
December 2014 – if the event in respect of which they were included in the financial statements actually occurs. In addition, as the aforementioned provisions may have been included in the calculation of IRAP
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
IRES tax liabilities, in the amount of €7 million, due to the lower IRES rate determined in previous years, which will have to be paid when the IRAP provisions are released.
IRES rate of deferred taxation that will be utilised after 31 December 2016.
Income/(expenses) recognised in profit or loss - 3 1 36 36 (3) - - - 73
Income/(expenses) realigned through profit or loss - - - - - - - - - -
Income/(expenses) recognised in equity - - (54) - - - - 35 (25) (44)
Income/(expenses) recognised in profit or loss due to adjustment to IRES rate (6) (2) - (3) (14) - - - (6) (31)
Income/(expenses) recognised in equity due to adjustment to IRES rate - - (4) - - - - (4) (1) (9)
Change in scope of consolidation - - - - - - - - - -
Income/(expenses) recognised in equity - - 512 - - - 512
The increase in deferred tax liabilities related to financial assets and liabilities is due mainly to movements in the fair value reserve, as described in section B4.
At 31 December 2015, deferred tax assets and liabilities recognised directly in equity are as follows: tab. C13.8 - Income/(expense) recognised in equity
The identified operating segments are Postal and Business Services, Financial Services and Insurance Services, with the remaining activities allocated to the Other Services segment
RFC’s By-laws, identify the services provided by Poste Italiane SpA functions to BancoPosta and determines the manner in which they are remunerated.
Tot al non-cash expenses ( 558) ( 2) ( 12,370) ( 44) - ( 12,974)
Investments accounted for using equity method 211 3 - - - 214
Investments accounted for using equity method 1 - - - - 1
Disclosure about geographical segments, based on the geographical areas in which the various Group companies are based or the location of its customers, is of no material significance. At 31 December 2015, all entities consolidated on a line-by-line basis are based in Italy, as is the majority of their client base; revenue from foreign clients does not represent a significant percentage of total revenue.
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 €60 million tab. 3.5.2 - Impact of related party transactions on the financial position at 31 December 2014 (€m)
Other related parties external to the Group 78 4 - - - 12 61
Provision for doubtful debts owing from external related parties - (170) (11) - - - -
tab. 3.5.3 - Impact of related party transactions on the results of operations for the year ended 31 December 2015 (€m)
 Amounts received from CDP SpA primarily relate to payment for the collection of postal savings deposits.
 Amounts received from the Enel Group primarily relate to payment for bulk mail shipments, unfranked mail, franking of mail on credit and postage paid mailing services, as well as collection and accounting for electric utility payments. The costs incurred primarily relate to the supply of gas.
Key management personnel consist of Directors, members of the Board of Statutory Auditors, managers at the first organisational level of the Parent Company and Poste Italiane’s manager responsible for financial reporting. The related remuneration - not including that of the Board of Statutory Auditors, which are shown separately, gross of expenses and social security contributions, of such key management personnel as defined above is as follows (€000): No loans were granted to key management personnel during 2015 and at 31 December 2015, Group companies do not report receivables in respect of loans granted to key management personnel.
Decemb er 2014 tab. 3.5.6 - Remuneration of Statutory Auditors (€000)
An analysis of the industrial net funds/(debt) of the Postal and Business Services and Other Services segments at 31 December 2015, in accordance with ESMA guidelines, computed on the basis of paragraph 127 of the recommendations contained in ESMA document 319 of 2013, is provided below: tab. 3.6.1 - Net (debt)/funds (€m)
Techn ical provisions for cla ims at t r ib u t ab le t o re insu rers - - 58 - - 58 -
Cash and cash equ ivalent s 1,316 489 1,608 16 ( 287) 3,142 391
Services E l iminations of w hich, related parties tab. 3.6.1 - Net (debt)/funds (€m)
Techn ical provisions for cla ims at t r ib u t ab le t o re insu rers - - 54 - - 54 -
O. Ind u st r ia l net d eb t ( ESMA gu id elines) ( J+N) ( 304) ( 2,147)
Ind u st r ia l net d eb t 249 ( 1,493)
The fair value measurement techniques used by the Poste Italiane Group are described in note 2.5. This section provides additional information regarding determination of the fair value of the financial assets and liabilities recognised at their fair value. Additional information related to financial assets and liabilities recognised at their amortised cost is provided in the respective notes.
The table below breaks down the fair value of financial assets and liabilities by level in the fair value hierarchy: Details of transfers of financial instruments measured at fair value between level 1 and level 2 of the hierarchy on a recurring basis are as follows.
Available-for-sale financial assets 113,767 3,623 479 117,869 102,325 4,574 248 107,147
Financial assets at FV through profit or loss 8,067 10,065 - 18,132 7,273 4,882 - 12,155
Financial liabilities at fair value - - - - - - - -
The reclassifications in question relate to financial assets held primarily by Poste Vita SpA and result from implementation of the Group’s new Fair Value Policy. In particular, transfers of bonds from level 1 to level 2 are due to the application of stricter standards for the definition of a “liquid and active” market, a feature that is measured mainly by reference to the bid-ask spread. The transfers of available-for-sale financial assets include bonds issued by CDP SpA, totalling approximately €197 million, and coupon-stripped Italian government bonds, mainly relating to hedges of Class I products.
Reconciliation of the opening and closing balances of financial instruments measured at fair value on a recurring basis, classified in level 3, is shown below.
Gains/Losses in profit or loss due to sales (2) - - (2)
Movements in fair value through profit or loss - - - -
Poste Italiane Group - Movements in financial instruments at fair value (level 3)
In addition, the increase in value of the financial instruments in question was due to the recognition at fair value, in the amount of €111 million, of the interest in Visa Europe Ltd, assigned to Poste Italiane SpA when the company was established and recognised at its nominal value of €10.00 (table A5.2).
In accordance with IFRS 7 – Financial Instruments: Disclosures, this section provides details of financial assets and liabilities that are subject to a master netting agreement or similar arrangements, regardless of whether the financial instruments have been offset in keeping with paragraph 42 of IAS 32
* The gross amount of financial assets and liabilities includes financial instruments offset in the statement of financial position or subject to a master netting agreement or similar arrangements, regardless of whether they are offset.
Paragraph 42 of IAS 32 provides that “A financial asset and a financial liability can be offset and the net amount presented in the statement of financial position when, and only when, an entity: (a) currently has a legally enforceable right to set off the recognised amounts; and (b) intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.”
Financia l asset s/ liab ilit ies offset in t he st at ement of financia l posit ion or t hat are su b ject t o a mast er net t ing agreement or similar arrangement s (€m)
Tot al at 31 Decemb er 2015 867 ( 7,901) - ( 7,034) 5,884 349 778 ( 23)
Post e I t a liane Grou p - Transfer of financia l asset s t hat are not d erecognised (€m)
Financial liabilities arising from repos [B8] (4,885) (4,895) (4,949) (5,613) (5,639) (5,663)
Assets under management by BancoPosta Fondi SpA SGR, measured at fair value using information available on the last working day of the year, break down as follows: tab. 3.7.2 - Assets under management (€m)
Average assets under management by the Group, in proprietary and third parties’ mutual funds, amount to €5,342 million. BancoPosta Fondi SpA SGR also manages the individual investment portfolios of Poste Vita
For 2016, Poste Energia SpA, which was merged with and into EGI SpA at 30 December 2015, gave a commitment to purchase electricity on regulated forward markets with a total value of €12.6 million. At 31
Inst alment s fa lling d u e: wihin 1 year of the reporting date 151 163 between 2 and 5 years after the reporting date 337 359 more than 5 years after the reporting date 51 59
Fees ( * )I t em Ent it y provid ing t he service
(**) The amounts shown do not include fees for auditing services performed in respect of funds managed by
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 shareholders at the Annual General
In order to make investments as consistent as possible with the risk-return profiles of the policies issued, ensuring management flexibility and efficiency, in certain cases Poste Vita SpA has purchased over 50% of the assets managed by certain investment funds. In these cases, tests have been performed in keeping with IFRS
to determine the existence of control. The results of the tests on such funds suggest that the company does not exercise any control within the meaning of IFRS 10 – Consolidated Financial Statements. However, these funds qualify as unconsolidated structured entities. A structured entity is an entity designed in such a way as not to make voting rights the key factor in determining control over it, as in the case where voting rights refer solely to administrative activities and the relevant operations are managed on the basis of contractual arrangements.
Invests in Shopping Property Fund 2: master fund which invests primarily in commercial properties and, marginally, in office buildings and alternative sectors. It does not invest in property debt
ISIN Name Nat u re of ent it y Act ivit y of t he Fu nd 31 Decemb er 2015
DISTRIBUTION FUND Financial asset FVPL 4,733 709 4,024 Analytical VaR 99.5% annualised
IT0004937691 TAGES PLATINUM GROWTH Available-for-sale financial assets 132 22 110 VaR 99.5% over a 1-year time horizon
LU1081427665 SHOPPING PROPERTY FUND 2 Available-for-sale financial assets 40 15 25 Analytical VaR 99.5% annualised * Maximum loss is estimated without considering the ability of liabilities to offset losses, thus representing a more prudential estimate
MFX - GLOBAL FUND - ASSET GLOBAL FUND ( PIMCO MULTI ASSET)
Banca del Mezzogiorno - MedioCredito Centrale SpA (Rome) 100.00% 364,509 32,427 425,511
(**)Poste Italiane SpA is committed to providing financial support to the subsidiaries, SDA Express Courier SpA, Mistral Air Srl and PosteShop SpA at least until 31 December 2016.
for t he year Name ( Reg ist ered office) % in t erest Asset s Liab ilit ies Equ it y
C10 – INCOME TAX EXPENSES ...................................................................................... 297 4.5 OTHER INFORMATION ON FINANCIAL ASSETS AND LIABILITIES.................... 304 4.7 EVENTS AFTER THE END OF THE REPORTING PERIOD ...................................... 310
ASSETS Note 2015 of which, related party transactions of which, related party transactions
Cash and deposits attributable to BancoPosta [A9] 3,160,654,030 - 2,873,042,628 -
ASSETS Note Capital outside the r ing-fence BancoPosta RFC Adjustments Total
LIABILITIES AND EQUITY Note Capital outside the r ing-fence BancoPosta RFC Adjustments Total
Cash and deposits attributable to BancoPosta [A9] - 2,873,042,628 - 2,873,042,628
Other expenses from financial activities [C5] 2,658,951 - 5,765,896 of which non-recurring costs/(income) (10,990,041) - - -
Operating profit/(loss) 613,876,972 380,631,675 of which non-recurring costs - - 75,000,000 of which non-recurring income 4,021,772 - 10,486,885 -