POSTE ITALIANE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 136 2. Basis of preparation and significant accounting policies 142 3. Material events duringthe year 176 4. Poste Italiane Group for the year ended 31 December 2017 180 5. Poste Italiane SpA ended 31 December 2017 260 6. Risk management 348 7. Proceedings pending and principal relations with the authorities 380 8. Material non-recurring eventsand/or transactions 387 9. Exceptional and/or unusual transactions 387 10. Events after the end of the reporting period 388 11. Additional information 389 12. Annex – BancoPosta rfc separate report for the year ended 31 December 2017 414
With a history going back more than 150 years, Poste Italiane is now able to combine the traditional mail sector with the new frontiers of digitalisation, through innovation in financial and insurance services and mobile communications. With almost 13,000 post offices and over 30,000 postmen and women, Poste Italiane is an integral part of the country’s social and productive fabric, unparalleled in Italy in terms of its size, recognisability, reach and the trust accorded by its customers.
We know how to change by steadfastly maintaining our values. Thanks to the determination and enthusiasm of our people, together with the trust of our stakeholders, we will manage to bring about our ambitious mission: to accompany citizens, businesses and Public Administration entities on the road to the new digital economy by offering simple, transparent and reliable mail, logistics, savings, transaction banking and insurance products and services.
and resigned in March 2018. (6) Committee members were appointed by the Board of Directors’ meeting of 28 April 2017. At the meeting of 19 February 2018, the Board of Directors renamed the Nominations Committee and the Audit and Risk Committee the Nominations and Corporate Governance Committee and the Audit, Risk and Sustainability Committee, respectively.
expand the range of products offered to savers. In particular, with regard to the spin-off and sale, determination of the final price, quantified as €120 million, will be subject to an earnout in Poste Italiane’s favour, in the event of an increase in income from the management mandates/delegations assigned to Anima SGR, in addition to certain thresholds and a price adjustment mechanism in Anima Holding’s favour, which is of marginal importance. The consideration will be paid in full on completion of the transaction by 31 December 2018, subject to suspensive conditions relating to receipt of the necessary consents from the competent authorities and following the subscription for and redemption of one or more share issues by Anima Holding SpA, with a value of at least €250 million.
Distribution channels and multichannel strategy The Group has an integrated, multichannel 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 organisation of the commercial network and related operational support processes breaks down into three levels: �� Multiregional Area Offices; �� Branch Offices; �� Post Offices, classified with respect to their organisation, into central, reporting, standard and basic.
2. The model provides for a more focused approach to customers with the introduction of consultants specialised in terms of target customer, and new staff roles dedicated to welcoming and guiding customers.
In India, growth, driven by domestic demand, continued, reaching a substantial 6.6%, albeit slowed down by demonetisation (withdrawal from circulation of large denomination banknotes).
Moreover, the regulations governing the service relating to legal process and violations of the Highway Code were further amended by the 2018 Budget Law, which brought the provisions of Law 890/1982 “Legal process and related communications postal service” into line with the new provisions of Law 124/2017.
Income tax expense for the year, after benefitting from the reduction in the IRES rate, is €153 million (down 22.7% compared with 2016). This results in profit for the year of €499 million (up 7.3% compared with 2016).
Regulatory environment IVASS has recently announced (Letter to the Market, dated 12 January 2018) the “Results of the comparative analysis on the Own Risk and Solvency Assessment Reports” (ORSA), based on the information requested in the Letter to the Market of 21 April 2017 (the impact on capital and solvency ratios of low interest rates and increased credit spreads on financial assets). IVASS has acknowledged the qualitative improvement with respect to previous years, with regard above all to the greater accuracy of the method used and increased awareness of the central importance of the ORSA process in the company’s management. It also indicated the need for an overall strengthening of the ORSA for Solvency II purposes.
Thanks to its constant focus on products, strengthened support for the distribution network and growing customer loyalty, Poste Vita recorded a good performance in 2017, despite the previously mentioned decline in new life business.
Subsequently, in view of the value of the fund’s units at 30 June 2017, communicated by the management company, which has quantified the reduction in the nominal value of the investment as approximately 80%, the Group has recognised a further impairment loss equal to 50% of its investment, with the sole exception of the amount invested in the Atlante II fund.
The main topics relating to business sustainability, which, on the one hand, are key elements for a more in-depth analysis of the Non-Financial Statement and, on the other, are part of the economic and social scenario in which the Poste Italiane Group carries out its mission and tackles its business challenges, are summarised below
Guarantee the confidentiality of customers’ data, safeguard intellectual property and protect assets from cyber attacks inside or outside the organisation.
�� Taking care of the world around us and are summarised in the following table through the macro-initiatives that are used in applying the values in the Group’s operations.
Against a backdrop of change that requires development of its business and, above all, focusing on its customers, Poste Italiane has launched an important process of digitalisation involving the entire Group, given the complexity and variety of the sectors in which it operates. To this end, the Company has identified organisational responsibilities and adopted specific policies to ensure adequate oversight of the issue.
Digital is now a key driver in the relationship with consumers who interact with Poste Italiane using multiple channels, both physically through the network of 12,822 post offices and 28,635 postmen and women, and using the website via computers and apps for smartphones or tablets.
Customers registered on Poste Italiane's digital channels (websites and apps) (millions) 12.5 15
(**) App downloads refer to iOS, Android and Windows users who have downloaded the app from the launch of the first version until the date indicated (31 December 2016 and 31 December 2017).
18. Founded in 2009 by Poste Italiane, in agreement with the Postal and Communications Police, the Department of Public Security of the Ministry of the Interior and the United States Secret Service, with the aim of building a strategic alliance at European level to suppress and prosecute activities related to cybercrime.
The objective is to guarantee a qualified and competent response to the needs of customers and the market, via adoption of technological and organisational solutions. The commitment to quality and the Customer Experience is specifically implemented in the areas of responsibility assigned within the organisation. In order to strengthen the supervision of product quality, the Corporate Reliability function was established, which, among other things, is responsible for verifying the actual compliance of operating and commercial processes with the service levels set out in the quality and performance indicators.
In 2017, Poste Italiane and 12 other large companies signed a memorandum of understanding regarding call centres, which set out good social and commercial practices for managing customer contact services, either directly or indirectly. The objective is to limit relocation “by setting the threshold for services provided in Italy at 80%”, and also by establishing that “95% of direct activities are carried out in Italy within six months of signing a contract, and that for new contracts at least 80% of the outsourced activities are carried out in Italy”.
By consulting the portal, it is possible to find information about the number and details of individual contracts signed during a month, including the relative amount, duration, product area, award procedure, type, geographical location and the name of the successful bidder, as well as the names of subcontractors. By setting filters for each search field, specific information may be obtained about contracts published each month. The new website also provides access to the total number of contracts signed by Poste Italiane during the year, broken down by product area and economic value.
Percentage of young Postepay standard card holders (under 35) 39.1 38.0
Percentage of senior Postepay standard card holders (over 65) 6.4 7.0
Mail and parcels logistics Poste Italiane plans and manages the mail and parcels commercial offering and distribution throughout the entire process of acceptance, collection, sorting, transport, delivery and management of returns, also using the services of the subsidiaries, Postel and SDA.
The Group’s integrated logistics chain is organised into 9 Area Logistics Offices, 23 Sorting Centres (including 16 Postal Sorting Centres and 7 Priority Centres) and 2,051 Delivery Offices. The physical sites in the supply chain are connected via a primary network of motorway and air routes, which are integrated within an organisation of independent SDA couriers and external road, rail and air carriers as needed.
Directors’ Report on Operations: 2. Organisational structure and operating segments; Distribution channels and multichannel strategy
GRI 102-23 President of the highest governance body Report on Corporate Governance and the Ownership Structure: 6.6 Chief Executive Officer
GRI 102-44 Key topics and concerns that have been raised through stakeholder engagement
Directors’ report on operations for the year ended 31 December 2017 7. Risk Management
As in the previous year, in 2017, in terms of economic value, BancoPosta RFC was exposed to falling rates. The entity of the exposure, measured using an internal model, remained below 10% of supervisory capital, thus well within the risk appetite framework for the year.
Events after the end of the reporting period are described in other sections of the Annual Report for 2017 and there are no further material events occurring after 31 December 2017 to report.
The Guidelines apply the regulations contained in Bank of Italy Circular 263/2006, “New prudential supervisory standards for banks”, Title V, Chapter 5, “Risk assets and conflicts of interest with connected parties” and Bank of Italy Circular 285/2013 (“Supervisory Standards”), applicable to Poste Italiane with reference to transactions entered into by BancoPosta with persons connected with Poste Italiane.
Management has decided to strip out the fair value reserves from equity in order to facilitate comparison of earnings in the comparative periods and to use, for the same reason, the net after-tax result, as this indicator is used solely to present the earnings of the Group as a whole.
(**) Insurance premium revenue is reported gross of outward reinsurance premiums. (***) During the year, the company paid dividends totalling €470 million.
33. Under the indirect method, net cash from operating activities is determined by adjusting profit/(loss) for the year to reflect the impact of non-cash items, any deferment or provisions for previous or future operating inflows or outflows, and revenue or cost items linked to cash flows from investing or financing activities.
Financial assets 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 This category includes: (a) financial assets held for trading, (b) those that qualify for designation at fair value through profit or loss on initial recognition, or for which the option to measure at fair value can be exercised, and (c) derivative instruments, with the exception of the effective portion of those designated as cash flow hedges. Financial assets in this category are accounted for at fair value and changes during the period of ownership are recognised in profit or loss. Financial instruments in this category are classified as short-term if they are held for trading or if they are expected to be realised within twelve months of the end of the reporting period. Derivative instruments at fair value through profit or loss are recognised as assets or liabilities depending on whether the fair value is positive or negative. Fair value gains and losses on outstanding transactions with the same counterparty are offset, where contractually permitted.
The calculation technique used in applying the shadow accounting method is based on the prospective yield on each separately managed account, considering a hypothetical realisation of unrealised gains and losses over a period which is consistent with the characteristics of the assets and liabilities held in the portfolio. The amount to be recognised as a deferred liability also takes account, for each separately managed account, of the contractual obligations, the level of guaranteed minimum returns and any financial guarantees provided.
Translation of items denominated in currencies other than the euro Transactions in currencies other than the euro are translated to euro using the exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at closing exchange rates of monetary assets and liabilities denominated in currencies other than the euro are recognised in profit or loss.
The table below summarises receivables due from the State: Receivables (€m) at 31 December 2017 at 31 December 2016
Other trade receivables due from Public Administration entities (vii) 538 557
iv. Receivables of €39 million following cancellation of the EC Decision of 16 July 2008 and the interest due as a result of the sentence of the European Court of 30 September 2013, the impact of which on the Parent Company’s equity was deferred or adjusted. A total of €6 million, acknowledged in the MEF letter, was collected in 2017.
d. Specific disclosure The quantitative and qualitative disclosures related to revenue are broader and more analytical than before.
�� Amendments to IFRS 15 - Revenue from Contracts with Customers – Clarifications to IFRS 15, adopted with Regulation (EU) no. 1987/2017. Certain clarifications are introduced regarding the new treatment of revenue and further application relief is provided to entities that adopt the standard on the basis of the modified retrospective method.
The above transaction aims to create a single provider of e-money and payment services to retail, business and Public Administration customers, combining in one entity the Poste Italiane Group’s distinctive competencies in the field of mobile and digital payments.
The Parent Company’s new organisational structure is reflected in the disclosures provided in Poste Italiane’s financial statements for the year ended 31 December 2017, with particular regard to the financial statements and the note on Operating segments (note 4.4).
The fair value of investment property at 31 December 2017 includes €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 Company56.
58. In terms of the fair value hierarchy, which reflects the relevance of the sources used to measure assets, this amount qualifies for level 1.
During the year under review, the effective portion of interest rate hedges recorded an overall fair value loss of €57 million reflected in the cash flow hedge reserve.
�� Equity instruments, totalling €58 million. These are investments to cover the contractual obligations arising on Class III products following establishment of the new unit-linked product linked to the individual savings plan, PosteVita Soluzione Italia.
Due from MEF for repayment of loans accounted for in liabilities - - - - 1 1
Reclassifications from level 1 to level 2 regard financial instruments whose value, at 31 December 2017, is not observable in a liquid and active market, as defined in the Group’s Fair Value Policy. Reclassifications from level 2 to level 1, on the other hand, regard financial instruments whose value, at 31 December 2017, is observable in a liquid and active market.
�� 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, renewed on 16 November 2017 for the three-year period 2017-2019.
Equity attributable to non-controlling interests - - - - - - -
After-tax increase/(decrease) in reserves related to groups of assets and liabilites held for sale
Provisions for disputes with third parties 349 102 - (65) (17) - 369
Provisions for disputes with staff (1) 120 14 - (34) (23) - 77
Remuneration of current account deposits (deposited with the MEF) 27 20
Income from investments in securities relates to interest earned on investment of deposits paid into postal current accounts by private customers. The total includes the impact of the interest rate hedge described in note A5 – Financial assets. Income from deposits held with the MEF primarily represents accrued interest for the year on amounts deposited by Public Administration entities.
Income from insurance activities is as follows: tab. C4.2 - Income from insurance activities
C8 - Depreciation, amortisation and impairments (€545 million) Depreciation, amortisation and impairments break down as follows: tab. C8 - Depreciation, amortisation and impairments
At a meeting on 13 December 2017, the Board of Directors, having obtained the consent of the Related and Connected Parties Committee, authorised signature of the agreement with Cassa Depositi e Prestiti governing the collection and distribution of Postal Savings products, by BancoPosta on behalf of Cassa Depositi e Prestiti, for the three-year period 2018-2020.
At 31 December 2017, the fair value88 of the held-to-maturity portfolio, accounted for at amortised cost, is €14,384 million (including €152 million in accrued interest).
Fair value hierarchy of financial assets The following table shows the classification of financial assets measured at fair value by level in the fair value hierarchy: tab. A6.5 - Fair value hierarchy
Receivables from fixed-term contract settlements 7 2 - 9 of which attributable to BancoPosta RFC 22 5 - 27
93. The transaction consideration of €390 million was adjusted by approximately €3 million to take into account certain adjustments provided for in the contract on the occurrence of certain conditions.
Balance at 31 December 1,244 of which attributable to BancoPosta RFC 17
As part of the Company’s EMTN – Euro Medium Term Note programme, totalling €2 billion, the following bonds listed on the Luxembourg Stock Exchange were issued in 2013: �� bonds with a nominal value of €750 million, placed through a public offering for institutional investors at a price below par of €99.66 on 18 June 2013. The bonds have a term to maturity of five years and pay annual coupon interest at a fixed rate of 3.25%. The fair value98 of this borrowing at al 31 December 2017 is €775 million; �� bonds with a nominal value of €50 million subscribed by investors through a private placement at par on 25 October 2013. The term to maturity of the loan is ten years, while the interest rate is 3.5% for the first two years and is variable thereafter (EUR Constant Maturity Swap rate plus 0.955%, with a cap of 6% and a floor of 0%). The cash flow interest rate risk exposure was hedged as described in note A6. The fair value99 of this borrowing at 31 December 2017 is €53 million.
At 31 December 2017, certain liabilities, which at 31 December 2016 were included in provisions for restructuring, were determinable with reasonable certainty and, as such, were recognised as payables.
In particular: �� Universal Service compensation relates to amounts paid by the MEF to cover the costs of fulfilling the USO. Annual compensation, amounting to €262 million, is established in the Contratto di Programma (Service Contract) for 2015-2019, which took effect on 1 January 2016. Approximately €108 million in further compensation for previous years was recognised in 2016101.
The nominal tax rate for IRES is 24% from 1 January 2017, whilst the nominal tax rate for IRAP is 3.90% for entities as a whole and 4.20% for entities that hold concessions other than those relating to the construction and operation of motorways and tunnels (+/–0.92% resulting from regional surtaxes and/or relief and +0.15% as a result of additional surtaxes levied in regions with a health service deficit). The Company’s average statutory rate for IRAP is 4.57%. Movements in deferred tax assets and liabilities are shown below: tab. C10.5 - Movements in deferred tax assets and liabilities
Other related parties external to the Group - - 4 - - - - 14 61
Available-for-sale financial assets exposed to the risk in question primarily regard: �� fixed income government bonds held by Poste Vita SpA, totalling €81,099 million; of this amount, €77,768 million is used to cover Class I and V policies linked to separately managed funds, €3,331 million relates to the company’s free capital; �� €36,614 million in fixed income government bonds held by BancoPosta RFC, which consist of: fixed rate bonds amounting to €11,460 million; variable rate bonds converted into fixed rate bonds via cash flow swaps amounting to €1,400 million; variable rate bonds amounting to €2,594 million (of which €2,508 million in inflation-linked instruments) and fixed or variable rate bonds converted to variable rate positions via fair value hedges amounting to €21,160 million (of which €19,013 million in forward starts); �� €13,376 million in other, non-government bonds held by Poste Vita SpA, used mainly to meet obligations towards policyholders in relation to separately managed Class I and V policies; �� €2,485 million in fixed rate bonds issued by CDP, and guaranteed by the Italian government, held by BancoPosta RFC.
Amount due from MEF following cancellation of EC Decision of 16 July 2008 - - 6 -
Available-for-sale financial assets - 551 - 551 - 562 - 562
Receivables due from staff under fixed-term contract settlements 179 (9) 204 (7)
Cash and deposits attributable to BancoPosta 3,196 - - 3,196 2,494 - - 2,494
payable under the settlement are reduced by the amounts already paid as a result of the legislation in force regarding the collection of tax when judgement is pending. In this instance, the amount payable by the company is €8.4 million. Thus, having already paid the sum of €2.8 million, the company proceeded to pay the sum of €5.6 million. The provisions made in previous years, totalling €8.3 million, have been used up. At the hearings for the appeals against the notices of assessment for the 2010 tax year (17 October 2017) and the 2011 tax year (6 December 2017), the Tribunal noted the request for a halt to proceedings and the company’s decision to opt for the settlement concession, adjourning the hearing to a later date to allow the tax authorities to verify the validity of the company’s request and whether or not the requirements of art. 11 of Law Decree 50 of 24 April 2017 have been met.
�� On 25 January 2018, Poste Italiane SpA’s Board of Directors authorised a capital injection of €40 million for SDA Express Courier SpA to cover losses incurred through to 31 December 2017, and to recapitalise the company and establish an extraordinary reserve.
�� On 26 February 2018, Poste Italiane SpA’s Board of Directors approved “Deliver 2022”, the five-year Strategic Plan that aims to maximise the potential value of Poste Italiane’s distribution network, already acknowledged as being the country’s most efficient and secure.
Analysis of net debt/(funds) The net debt/(funds) of the Poste Italiane Group and Poste Italiane SpA at 31 December 2017 are analysed below.
MEF account held at the Treasury - 3,483 - 3,483 3,483
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. Whilst maintaining a moderate risk appetite, in 2017, the gradual process of diversifying investments, begun in 2015 and 2016, continued by increasing investments in open-end harmonised multi-asset funds of the UCITS type, above all those belonging to the “MULTIFLEX” SICAV.
Information on investments Details of investments are as follows: List of investments consolidated on a line-by-line basis
(**) Poste Italiane SpA is committed to providing financial support to the subsidiaries SDA Express Courier SpA and Mistral Air Srl for 2018 and to Poste Tributi ScpA throughout its liquidation.
1 – Financial assets held for trading a) Recognition Financial assets held for trading are initially recognised on the settlement date for debt and equity securities, whereas, for derivative contracts, on the subscription date. Financial assets are initially recognised at fair value which is generally the price paid. Any changes in fair value occurring between the trade and settlement dates are recognised in the Separate Report.
b) Classification This category includes debt and equity instruments acquired primarily to obtain a short-term profit as the result of changes in their prices and the positive value of derivative contracts unless designated as hedging instruments.
c) Measurement and recognition of gains and losses Financial assets held for trading are recognised at fair value with any changes in fair value recognised in profit or loss in line “Item 80 - Profits/(Losses) on trading”. Derivatives are accounted for either as assets or liabilities depending on whether their fair value is positive or negative.
�� Derivative financial instruments: • Plain vanilla interest rate swaps: valuation is based on 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.
Balance at 31 December 2016 a) Governments and Central Banks 12,912 12,683 b) Other public entities - a ) Governments and Central Banks - b ) Other public entities - -
Multiple risks 1. Available-for-sale financial assets 364 - - - - x 31 x x 3. Held-to-maturity financial assets x - - x - x - x x 2. Portfolio of financial assets and financial liabilities x x x x x - x - -
Section 11 – Property, plant and equipment – item 110 BancoPosta does not own property, plant and equipment either for operating or investment purposes.
Provisions to profit or loss for (170) (40) (210) (211) (40) (251)
adjustments to prior period taxes 13 - 13 1 - 1 of which: Current tax assets receivable from Poste Italiane SpA outside the ring-fence (item 150 Assets)
Section 7 – Adjustments for changes in hedged financial liabilities portfolio – item 70 No macro-hedges have been arranged at the reporting date.
Balance at 31 December 2016 1. Provisions for retirement benefits - -
Balance at 31 December 2016 3) Irrevocable commitments to disburse funds - 416 ii) uncertain disbursement - ii ) uncertain disbursement - 4 ) Commitments underlying credit derivatives: protection sales - 5 Assets pledged as collateral for third party commitments - -
Section 6 – Profits/(Losses) on disposal or repurchase – item 100 6.1 Profits/(Losses) on disposal or repurchase: analysis
Section 10 – Net provisions for risks and charges – item 160 10.1 Net provisions for risks and charges: analysis
Section 20 – Other information All information has been presented above.
110. Non-current assets held for sale: - - a ) changes in fair value - - b ) reversal to profit or loss - - 120.
During 2017, the modest rise in both risk-free interest rates and the yields on Italian government bonds resulted in a slight reduction in unrealised gains on the securities accounted for in the financial statements, some of which were, in any event, recognised as realised gains in profit or loss.
129. According to the prudential requirements, weighted risk exposure must at all times be below 25% of own funds. Exposures are normally equal to an asset’s nominal value adjusting for any credit risk mitigation. Lower risk borrowers are assigned lower risk weightings.
B.1 Financial derivatives on debt securities and interest rates 1,705 745 20,120 22,570
- Valuation reserves relating to equity accounted investments - 7. Profit/(Loss) for the year 585 568
A. Qualitative information According to the framework defined by the Bank of Italy, own funds consist of two levels: �� Tier 1 Capital, in turn consisting of: • Common Equity Tier 1 – CET1; • Additional Tier 1 - AT1; �� Tier 2 Capital - T2.
A. Common Equity Tier 1 - CET1, before application of prudential filters 2,059 1,949 of which CET1 instruments subject to transitional requirements - -
F. Total Common Equity Tier 1 - CET1 (C - D +/- E) 2,059 1,949
G. Additional Tier 1 - AT1 before elements to be deducted and adjustments for the transitional regime - of which AT1 instruments subject to transitional requirements - -
Other related parties external to the Group - - - - - - (2) -
BancoPosta RFC Separate Report for the year ended 31 December 2017 Notes - Part H
Attestation of the Poste Italiane Group’s consolidated financial statements for the year ended 31 December 2017 pursuant to art. 154-bis, paragraph 5 of Legislative Decree 58/1998 and art. 81-ter of CONSOB Regulation 11971 of 14 May 1999 1. The undersigned, Matteo Del Fante, as Chief Executive Officer, and Luciano Loiodice, as Manager responsible for Poste Italiane SpA’s financial reporting, having also taken account of the provisions of art.154-bis, paragraphs 3 and 4 of Legislative Decree 58 of 24 February 1998, hereby attest to: - the adequacy with regard to the nature of the Poste Italiane Group and - the effective application of the administrative and accounting procedures adopted in preparation of the Poste
(This certification has been traslated from the original which was issued in accordance with italian legislation)
The Board of Statutory Auditors verified compliance with the law and the By-laws, periodically receiving information from the Directors on the overall operating performance, the outlook for the Company and on the most significant transactions having an impact on the results of operations and financial position decided on and carried out by the Company and other Poste Italiane Group companies during the year.
required under auditing standard (SA Italia) no. 720B in order to express an opinion of the consistency of the report on operations and of the specific information included in the report on corporate governance and the ownership structure, referred to in article 123-bis, paragraph 4 of Legislative Decree 58/98, with Poste Italiane’s separate and consolidated financial statements for the year ended 31 December 2017 and on their compliance with the law, as well as to issue a statement on material misstatements, if any. As a result, the Independent Auditor has also confirmed that the above report on operations and specific information included in the report on corporate governance and the ownership structure are consistent with Poste Italiane’s separate and consolidated financial statements for the year ended 31 December 2017 and have been prepared in compliance with the law.
FSIA Investimenti Srl), and the opinions on the separate and consolidated financial statements, are in line with the contents of the supplementary report to the for the Board of Statutory Auditors in its role as committee responsible for internal and statutory auditing, prepared pursuant to article 11 of the above Regulation.
Italiane’s Independent Auditor”, drawn up following the change in the regulatory
Board of Statutory Auditors, amounts to approximately 500 hours per Statutory Auditor and approximately 600 hours in the case of the Chairman, marking a significant increase with respect to the volume of activity envisaged at the time of the Board’s election by. The difference reflects an underestimate of both the work in general of the Board of Statutory
The Magistrate appointed by the Italian Court of Auditors to oversee Poste Italiane was always invited to attend meetings of the Board of Statutory Auditors concerning the control system.
Again with regard to the previous Board of Statutory Auditors’ report, in relation to our invitation to review the system for delegating authority by the Board of Directors, we note that, in January 2018, the Company drew up criteria for identifying strategically important transactions entered into by the Company, with a significant impact on the financial position, results of operations and cash flow. The Company now requires such transactions to be examined and approved by the Board of Directors and prior information to be provided in the event of transactions carried out by other Group companies.
✓ The Board of Statutory Auditors, within the scope of our responsibilities, and in accordance with the Corporate Governance Code, also verified the content of the above “Annual Report on Corporate governance and the Ownership Structure”, prepared by the Directors in accordance with the instructions contained in Borsa
ii) as noted by the Directors in the Annual Report, Poste Italiane is in the process of transferring a part of BancoPosta RFC to Poste Mobile, which will in turn create a separate, ring-fenced entity specialising in e-money and payment services enabling it to operate as a hybrid electronic money institution, following receipt of all the necessary consents from the Bank of Italy.
18. and 19 Final considerations on the audit procedures performed and an indication of any proposals to be presented to the Annual General Meeting pursuant to art. 153, paragraph 2 of Legislative Decree 58/1998
We have audited the consolidated financial statements of the Poste Italiane Group (the Group), which comprise the consolidated statement of financial position as of 31 December 2017, consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended and notes to the consolidated financial statements, including a summary of significant accounting policies.
With reference to the statement referred to in article 14, paragraph 2, letter e), of Legislative Decree No. 39/10, issued on the basis of our knowledge and understanding of the Company and the environment in which it operates obtained in the course of the audit, we have nothing to report.
Additional Disclosures required by Article 10 of Regulation (EU) No. 537/2014