annual report 2011

Transcription

annual report 2011

ANNUAL REPORT
2011
ANNUAL REPORT
2011
2
CONTENTS
3
FINANCIAL AND OPERATIONAL HIGHLIGHTS
4
CORPORATE OFFICERS
6
DIRECTORS’ REPORT on Operations 2011
9
POSTE ITALIANE GROUP
Consolidated financial statements 2011
131
POSTE ITALIANE SPA
Separate financial statements 2011
271
BANCOPOSTA RFC – First Separate Report 2011
387
ANNUAL REPORT
2011
4
FINANCIAL AND OPERATIONAL HIGHLIGHTS
Results of operations
Poste Italiane Group
2009
2010
2011
(€m)
2011
9,468
Poste Italiane SpA
2010
2009
17,456
19,639
19,635
Revenues from sales and services and earned premiums
9,572
9,841
5,210
5,050
4,792
Postal Services
4,240
4,505
4,709
4,796
4,665
4,878
Financial Services
5,141
4,962
5,039
7,112
9,505
9,526
Insurance Services
n/a
n/a
n/a
338
419
439
Other Services
87
105
93
1,599
1,870
1,641
Operating profit
1,402
1,452
1,399
904
1,018
846
9.2%
9.5%
1.8%
2.0%
39.8%
42.1%
45.7%
of which:
Profit for the year
699
729
737
8.4%
ROS
(*)
14.8%
15.2%
14.2%
1.7%
ROI(**)
2.7%
2.8%
2.7%
49.5%
37.4%
38.2%
ROE(***)
n/a: not applicable
(*)
ROS (Return on Sales) is the ratio of operating profit to revenues from ordinary activities.
(**)
ROI (Return on Investment) is the ratio of operating profit to average operating assets.
Operating assets equal assets less investment property and non-current assets held for sale
(***)
ROE (Return on Equity) is the ratio of profit before tax to equity for the two comparative periods.
Financial position
31 Dec 2009 31 Dec 2010 31 Dec 2011
(*)
(*)
(€m)
Poste Italiane SpA
31 Dec 2011 31 Dec 2010 31 Dec 2009
4,575
4,383
2,848
Equity
2,002
3,613
(1,338)
(1,057)
1,198
Net (funds)/debt
2,739
3
4,077
(472)
3,237
3,326
4,046
Net invested capital
4,741
3,616
3,605
Following the formation of BancoPosta's ring-fenced capital, certain components of the statement of financial position at 31 December 2011 have been reclassified
with respect to previous statements. In order to provide a like-for-like basis for comparison with 2010, amounts in the statement of financial position at 31
December 2010 have also been reclassified.
Other information
2010
2011
2009
513
436
Poste Italiane SpA
2010
2009
(€m)
2011
Investment during the period
822
386
471
capital expenditure
344
380
454
financial investments (equity investments)
478
6
17
142,343
146,014
148,550
419
of which:
(*)
507
434
416
6
2
3
152,074
149,703
146,363
Average workforce
(*)
The average workforce (shown in full-time equivalent terms) includes the flexible workforce and excludes seconded and suspended staff.
Other information about Poste Italiane SpA
31 Dec 2009 31 Dec 2010
31 Dec 2011
Operational data (€m)
Current accounts (average for the period)
34,741
35,949
38,021
Postal Office Savings Books
91,120
97,656
92,614
192,618
198,489
208,187
Interest-bearing Postal Certificates
Other indicators
Number of outstanding current accounts (‘000)
Number of post offices
Levels of service
Priority mail
Poste Italiane | Annual Report 2011
5,526
5,533
5,575
13,992
14,005
13,945
delivery within
2009
2010
2011
1 day
90.7%
92.0%
94.7%
5
Total revenue – Operating segments
2009
26.0%
24.7%
46.7%
2.6%
(€m)
Postal Services
Financial Sevices
Insurance Services
Other Services
Total
2010
23.2%
22.6%
51.3%
2.9%
2009
5,227
4,964
9,376
531
20,098
2010
5,065
4,946
11,206
620
21,837
2011
22.2%
23.0%
52.0%
2.8%
2011
4,810
5,003
11,278
602
21,693
% increase/(decrease)
2010 vs 2009
2011 vs 2010
(3.1)
(5.0)
(0.4)
1.2
19.5
0.6
16.8
(2.9)
8.7
(0.7)
Revenues from sales and services and earned premiums – Operating segments
2009
29.8%
27.5%
40.7%
1.9%
(€m)
Postal Services
Financial Services
Insurances Services
Other Services
Total
2010
25.7%
23.8%
48.4%
2.1%
2009
5,210
4,796
7,112
338
17,456
2010
5,050
4,665
9,505
419
19,639
2011
24.4%
24.8%
48.5%
2.3%
2011
4,792
4,878
9,526
439
19,635
2010 vs 2009
2011 vs 2010
(3.1)
(5.1)
(2.7)
4.6
33.6
0.2
24.0
4.8
12.5
n/s
n/s: not significant
POSTE ITALIANE SPA
Market revenues
2009
42.1%
1.9%
55.0%
1.0%
(€m)
Mail and Philately
Express Delivery and Parcels
BancoPosta Services
Other revenues
Total(*)
(*)
2010
42.4%
1.8%
54.6%
1.2%
2009
3,852
175
5,039
93
9,159
2010
3,855
161
4,962
105
9,083
2011
41.0%
1.5%
56.5%
1.0%
2011
3,725
135
5,141
87
9,088
2010 vs 2009
2011 vs 2010
0.1
(3.4)
(8.0)
(16.3)
(1.5)
3.6
12.9
(17.1)
(0.8)
0.1
Market revenues do not include publisher tariff subsidies and Universal Service Obligation subsidies, totalling 380 million euros (489 million euros in 2010).
6
CORPORATE
OFFICERS
Giovanni Ialongo
BOARD OF DIRECTORS (1)
In office from 21 April 2011
CHAIRMAN
Giovanni Ialongo
CHIEF EXECUTIVE OFFICER AND GENERAL MANAGER (2)
Massimo Sarmi
DIRECTORS
Maria Claudia Ioannucci - Antonio Mondardo - Alessandro Rivera
In office until 21 April 2011
CHAIRMAN
Giovanni Ialongo
DEPUTY CHAIRMAN
Nunzio Guglielmino
CHIEF EXECUTIVE OFFICER AND GENERAL MANAGER (2)
Massimo Sarmi
DIRECTORS
Roberto Colombo - Mauro Michielon
1. The Board of Directors, which was elected by the General Meeting of 21 April 2011, has a term
of office of three years, which will expire on approval of the financial statements for 2013.
The Board of Directors’ meeting of 6 May 2011 elected the Chief Executive Officer (CEO).
2. The appointment as General Manager was approved by the Board of Directors’ meeting
of 24 May 2002.
7
Massimo Sarmi
BOARD OF STATUTORY AUDITORS (3)
CHAIRMAN
Silvana Amadori
AUDITORS
Ernesto Calaprice - Francesco Ruscigno
ALTERNATES
Vinca Maria Sant’Elia - Giovanni Rapisarda
MAGISTRATE APPOINTED BY THE ITALIAN COURT
OF AUDITORS TO AUDIT POSTE ITALIANE (4)
Adolfo Teobaldo De Girolamo
INDEPENDENT AUDITORS (5)
PricewaterhouseCoopers SpA
3. The Board of Statutory Auditors was elected by the General Meeting of 4 May 2010 and has a
term of office of three years, which will expire on approval of the financial statements for 2012.
4. The functions were assigned by the Council of the Presidency of the Court of Auditors,
in its Resolution of 6-7 July 2010, with effect from 27 July 2010.
5. Appointed for nine years by the General Meeting of 14 April 2011, as required by Legislative
Decree 39/10.
ANNUAL REPORT
2011
8
9
DIRECTORS’ REPORT
on Operations 2011
ANNUAL REPORT
2011
10
CONTENTS
1. CORPORATE GOVERNANCE
12
2. ORGANISATION
23
23
25
27
28
30
30
31
3. FINANCIAL REVIEW
32
32
37
45
4. AREAS OF BUSINESS
54
55
58
62
67
68
72
74
75
76
77
77
81
5. DISTRIBUTION CHANNELS
83
83
84
84
2.1 Organisational structure of Poste Italiane SpA
2.1.1 Private Customers
2.1.2 Large Account and Public Sector
2.1.3 Postal Services
2.1.4 Other Business Functions
2.1.5 Corporate Functions
2.2 Structure of the Poste Italiane Group
3.1 Risk management for the Group and Poste Italiane SpA
3.2 Operating results
3.3 Financial position and cash flow
4.1 Postal Services
4.1.1 Commercial offering
4.1.2 Operating results
4.2 Financial Services
4.3 Insurance Services
4.4 Other Services
5.1 Retail/SME
5.2 Business and Public Sector
5.3 The Contact Centre and the internet
6. HUMAN RESOURCES
6.1
6.2
6.3
6.4
6.5
Workforce data
Training
Human resources management
Industrial relations
Labour disputes
86
86
88
90
91
92
11
7. INVESTMENT
93
7.1 Financial investments
7.2 Capital expenditure
7.2.1 It and telecommunications networks
7.2.2 Restyling and upgrading of post and delivery offices
7.2.3 Postal logistics
93
94
94
95
96
8. THE ENVIRONMENT
97
9. EVENTS AFTER 31 DECEMBER 2011
99
10. OUTLOOK
100
11. OTHER INFORMATION
103
12. BANCOPOSTA RFC MANAGEMENT REVIEW
104
12.1 BancoPosta RFC Corporate Governance
12.2 BancoPosta RFC’S internal control system and Risk Management
12.2.1 Internal control system
12.2.2 Risk management system
12.3 BancoPosta RFC financial review
12.3.1 Financial review
12.3.2 Assets, liabilities and cash flow
12.4 Operating review of BancoPosta RFC for the period
12.5 Events after 31 december 2011 relating to BancoPosta RFC
12.6 Outlook for BancoPosta RFC
12.7 Other information on BancoPosta RFC
104
13. BOARD OF DIRECTORS’ PROPOSALS TO THE SHAREHOLDERS
125
APPENDIX GLOSSARY
Key performance indicators for principal Poste Italiane Group
companies
107
107
109
110
113
116
118
123
123
124
126
129
ANNUAL REPORT
2011
12
1. CORPORATE GOVERNANCE
This section takes the place of the Corporate Governance Report required by art. 123-bis of Legislative Decree
58/1998 (the Consolidated Law on Finance), having regard to the disclosures required by paragraph 2.b1.
Poste Italiane SpA is a wholly owned subsidiary of the Ministry of the Economy and Finance (the MEF). General Meetings
are held periodically to vote on resolutions regarding matters within its purview in accordance with the law.
The governance model adopted by Poste Italiane SpA is based on the traditional separation of the functions of the Board
of Directors and those of the Board of Statutory Auditors. Responsibility for auditing the Group has been assigned to an
auditing firm.
The Board of Directors consists of 5 members and meets once a month to examine and vote on resolutions regarding the
operating performance, the results of operations, proposals relating to the organisational structure and transactions of
strategic importance. The Board met 13 times during 2011.
The Chairman exercises the powers assigned by the Articles of Association and those assigned to him by the Board of
Directors’ meeting of 6 May 2011. In compliance with the provisions of the 2008 Budget Law and subsequent amendments
and additions, the Board of Directors has been given the authority by the General Meeting to grant the Chairman
executive powers in respect of the following matters: communication and Government relations, international relations and
legal affairs.
The Chief Executive Officer (CEO) and General Manager, to whom all key departments report, has full powers for the
administration of the Company across the organisational structure, with the exception of following powers reserved to the
Board of Directors:
• the issue of bonds and the assumption of medium/long-term borrowings of amounts in excess of 25,000,000 euros,
unless otherwise indicated in specific resolutions passed by the General Meeting or the Board of Directors itself;
• strategic agreements;
• agreements (with ministries, local authorities, etc.) involving commitments in excess of 50,000,000 euros;
• the incorporation of new companies, and the acquisition and disposal of equity holdings;
• changes to the Company’s organisational model;
• the purchase, exchange and disposal of properties with a value of more than 5,000,000 euros;
• the approval of regulations governing supplies, tenders, services and sales;
• the appointment and termination of the Manager responsible for financial reporting, as proposed by the CEO and with
the prior approval of the Board of Statutory Auditors;
• the appointment, at the proposal of the CEO, of the Head of BancoPosta.
The Board of Directors also examines and approves the long-term business plans and annual budgets prepared by the CEO,
approving strategic guidelines and directives for Group companies proposed by the CEO. The Board must approve the
CEO’s proposals regarding the exercise of the Group’s vote at the extraordinary general meetings of subsidiaries and other
investee companies.
1. Not having issued shares traded on regulated markets or multilateral trading systems, the Company has elected to take up the option, provided for by
paragraph 5 of art. 123-bis, of not publishing the disclosures referred to in paragraphs 1 and 2, with the exception of those required by paragraph 2.b.
1. Corporate Governance 13
The Board of Statutory Auditors has 3 standing members elected by the General Meeting. Pursuant to art. 2403 of the
Italian Civil Code, the Board verifies compliance with the law, the articles of association and with correct corporate governance principles, also verifying the adequacy of the organisational structure and administrative and accounting systems
adopted by the Company and their functionality. The Board met 22 times during the year.
With the introduction of Legislative Decree 39/2010 (”Implementation of Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts”), the new legislation governing audits have come into effect. Under the new legislation, Poste Italiane is classified as a Public Interest Entity. As a result, it has transferred from the audit regime established by art. 2409-ter of the Italian Civil Code to a new regime that requires, among other things, that independent auditors should be appointed for a nine-year term and that their appointment should be subject to approval by the General
Meeting at the “recommendation” of the Board of Statutory Auditors.
On completion of a tender process designed to select an auditing firm to carry out this role, the Board of Statutory Auditors
recommended the firm that had submitted the best bid. The General Meeting of 14 April 2011 then voted to appoint the
auditing firm, PricewaterhouseCoopers SpA, to audit the Group’s accounts for the years 2011/2019.
The Board of Statutory Auditors also recommended appointment of the same firm, PricewaterhouseCoopers SpA, as part
of its engagement to audit the accounts, to carry out the further procedures relating to the requirements deriving from the
formation of BancoPosta’s ring-fenced capital (from now on also: BancoPosta RFC). The Ordinary General Meeting called
to approve the financial statements will appoint the form to carry out this additional engagement.
The Board of Directors has established a Remuneration Committee, which is responsible for making proposals to the Board
regarding the remuneration of executive directors.
In accordance with Law 259 of 21 March 1958, which requires parliamentary scrutiny of the financial management of agencies to which the State contributes on an ordinary basis, Poste Italiane SpA is subject to controls by the Italian Court of
Auditors, which examines its budget and financial management. The controls consist in ascertaining the legitimacy and regularity of management activities, as well as of the conduct of internal controls.
The Extraordinary General Meeting of 14 April 2011 resolved – pursuant to art. 2, paragraphs 17-octies et seq. of Law
Decree 225 of 29 December 2010, as converted with amendments into Law 10 of 26 February 2011 – to estabilish legally
ring-fenced capital for BancoPosta aimed at BancoPosta operations only.
The General Meeting also approved By-laws governing the organisation, management and control of BancoPosta RFC.
The formation of the ring-fenced capital was effective from the date the above resolution was filed with the Companies’
Register on 2 May 2011, and was implemented subsequent to ascertaining that no objections had been raised by creditors.
On 2 July 2011 BancoPosta’s assets and liabilities were, for all intents and purposes, unbundled from those of Poste Italiane
at that date or at any time in the future, whereas BancoPosta’s assets, liabilities and contractual rights were ring-fenced
exclusively for the satisfaction of its obligations arising out of its day to day business, with Poste Italiane’s liability being limited to the ring-fenced capital attributed from retained earnings.
Report on Operations
14
The By-laws for organising and managing BancoPosta RFC have been drawn up in line with the model used by Poste
Italiane and according to the following levels:
• Board of Directors;
• CEO;
• Head of BancoPosta;
• Cross-functional Committee.
BancoPosta RFC is managed by Poste Italiane’s Board of Directors, which has responsibility for strategic supervision and
which, with regard to the ring-fence, is exclusively responsible for, among other things, establishing strategic guidelines,
adopting and amending business and financial plans, and for assessing the adequacy of the organisational, administrative
and accounting structure, and the functionality, efficiency and effectiveness of internal controls.
The Chairman of the Board of Directors carries out the role assigned by the Articles of Association.
BancoPosta RFC is the responsibility of Poste Italiane’s Chief Executive Officer who has all powers required for the
implementation of strategy and the management of BancoPosta RFC.
Without prejudice to the powers assigned to the Head of BancoPosta, the CEO may avail himself of the support of
BancoPosta, of Poste Italiane’s other business and corporate functions involved in operations relating to BancoPosta and
of the Cross-functional Committee.
The CEO assigns responsibility for BancoPosta’s operations, granting the necessary powers to the Head of BancoPosta,
who has a duty to report to the Cross-functional Committee, to prepare and update internal regulations governing levels of
service together with other functions, and to prepare reports, on at least a six-monthly basis, for the Board of Directors on
the overall performance of the operations for which he is responsible.
The Cross-functional Committee, whose permanent members are the CEO, who also acts as chairman, the Head of
BancoPosta and the heads of the functions that interact with BancoPosta, provides advice and makes recommendations
and coordinates BancoPosta’s operations with those of other corporate functions involved in its operations. The Committee
conducts its activities on the basis of specific “Regulations for the Cross-functional BancoPosta Committee”, approved by
the Board of Directors with the prior agreement of the Board of Statutory Auditors. The Committee meets monthly.
The Board of Directors has also approved General Operating Guidelines governing BancoPosta, establishing rules and the
activities that the various functions within Poste Italiane must carry out on behalf of BancoPosta, and defining the criteria
to be used in assessing the related contributions.
The Board of Statutory Auditors, the Supervisory Board set up by Poste Italiane in response to Legislative Decree 231 and
Poste Italiane’s independent auditors are also responsible for carrying out the respective controls in relation to BancoPosta
RFC and as required by the related regulations.
In particular, the Board of Statutory Auditors, taking account of the peculiar nature of BancoPosta’s operations and ensuring the necessary separation of controls, both formal and otherwise, verifies compliance with the law and the Articles of
Association, adherence to correct governance principles and the adequacy of the organisational structure and administrative and accounting systems and of BancoPosta RFC’s internal control systems.
BancoPosta RFC also has its own independent controls: Risk Management, Compliance, Internal Auditing and Anti-Money
Laundering. Support is provided by Poste Italiane’s Internal Auditing function under a service contract.
Internal control system
Poste Italiane SpA’s internal control system consists of a systematic body of rules, procedures and organisational structures, which aim to prevent or limit the consequences of unexpected events and enable the Company to achieve its strategic and operating objectives, comply with the relevant laws and regulations and ensure the fairness and transparency of
internal and external reporting.
In this context, the Internal Auditing function assists the organisation in the pursuit of its business and governance goals,
supporting executives and management through its independent and objective professional contribution. The department
is responsible for monitoring and making improvements to the Company’s control and risk management processes and its
corporate governance.
The scope of the Internal Auditing function’s work has progressively expanded to include all of Poste Italiane’s principal
processes (as determined through risk analysis), thus assuring assessment of the adequacy of the design and functioning
of the internal control system, on the basis of an integrated approach, in support of, among others, the Manager responsible for financial reporting appointed in accordance with Law 262/05 (as described in greater detail below) and the Audit
Plans drawn up by the Supervisory Board.
Audits were conducted in 2011 with the aim of strengthening management of the Company’s and the Group’s processes
through a synergistic approach to risk management and control.
In line with the approach of recent years, the adoption of operating processes for assessing control systems was finalised,
thus providing integrated and standardised operating procedures and audit results.
In line with the annual plan, initiatives in 2011 gave priority to the progressive coverage of broad-based, organisation-wide
central processes, focusing on processes affected by significant organisational and operational changes with the aim of
integrating and supporting the best solutions devised by management.
Around the country, the overall control system for the processes carried out by the Centralised Service Teams and the management and back-office process for financial products was assessed. The state of progress in strengthening post office
processes was also monitored, something already down during previous audits.
Audit activities also included a complete assessment of the second-level controls carried out by management and specific specialist corporate functions, aiming to provide a better overall impression of the internal control system, focusing on
the reliability of financial reporting processes, with particular regard to financial transactions, accounts receivable and staff
costs. In terms of accounts payable, the capacity of standard control systems architecture to function adequately, even in
the case of particular or urgent purchases, was also assessed for the different types of good and service.
Further audit activities regarded the information systems that support a number of corporate processes, including accounting, in order to assess the level of control over security and the adequacy of the processes compared with the relevant regulations. The degree of implementation of the new Corporate Information Security Governance model, which has had a
wide-ranging impact on the general internal control system, was also monitored.
With regard to checks on the functionality of controls at local offices, a systematic review of audit plans was carried out as
part of a continuous audit process, with the aim of aligning them with operational changes regarding controls.
With reference to Group companies included in the scope of the audits, support and monitoring initiatives were carried out
for specific Internal Auditing functions as part of efforts designed to reinforce and ensure a consistent approach. A number
16
of processes at certain subsidiaries were the subject of attention by the companies themselves, whilst other initiatives,
carried out at the request of management in order to aid in assessing processes at risk for the purposes of Legislative
Decree 231/01, were also implemented in preparation for implementation /revision of the related Organisational Model.
With reference to the areas covered by Legislative Decree 231/01, during 2011 Poste Italiane’s Organisational Model was
amended and added to in order to reflect changes inside and outside the Company. In terms of areas of potential exposure
and the related preventive measures, the new Organisational Model, approved by the Board of Directors on 28 November
2011, has adopted the new provisions contained in Legislative Decree 121 of 7 July 2011 regarding environmental
protection, which, having come into force on 16 August, have added to the so-called list of “reati presupposto” (“relevant
offences”) for the purposes of Legislative Decree 231/01. The Organisational Model has also extended the scope of some
of the offences referred to in the previous Model (such as computer crimes, terrorism, market abuse, money laundering
and the receipt of stolen goods, occupational health and safety, etc.) to align it with operational developments within the
Company (e.g. the implementation of strategic projects) and regulatory changes (the related jurisprudence and new
legislation such as, for example, Law 136 of 13 August 2010 regarding “Special Anti-Mafia Measures”).
The Company continued to support Group companies with the aim of ensuring the consistency of the various organisational, management and control models introduced in response to Legislative Decree 231/01, in keeping with the guidelines
issued by the Parent Company, but taking account of the independence and specific nature of each organisation. The
process of renewing the supervisory boards of Group companies also proceeded during the year. Wide-ranging information is also to be provided by the various supervisory boards to Poste Italiane’s Supervisory Board set up in accordance with
Legislative Decree 231, whilst specialist expertise and experience relating to “231” is to be shared at Group level.
The multi-year Audit Plan, which has so far guided control activities and whose implementation will end in 2012, has
resulted in consolidation of a new integrated methodological approach leading to significant synergies, thus optimizing
systematic audit procedures at local level and compliance activities. In addition to the processes subject to strict legal
requirements (Legislative Decree 231/01 and Law 262/05), the strategic guidelines included in the Plan for 2012 envisage
an expansion of audit activities at Group companies and further additions to the Internal Auditing Data Warehouse for
remote analysis.
The existing risk management and control system for financial reporting pursuant to
art. 123-bis, paragraph 2, letter b of the Consolidated Law on Finance
Protagonists, roles and responsibilities
In addition to corporate bodies and internal auditing and control functions (described above), the Manager responsible for
financial reporting, appointed pursuant to Law 262/052 by the Board of Directors, and who is also the Chief Financial Officer,
is responsible for the establishment of administrative and accounting procedures and, together with the CEO, certifies their
effectiveness and functionality, in addition to the accuracy and correctness of the financial reports to which the procedures
2. Poste Italiane has been classified, pursuant to Legislative Decree 195/2007, as a listed issuer registered in Italy, since 1 January 2008. Consequently, the
Company is subject, where applicable, to Legislative Decree 58/1998 (the Consolidated Law on Finance), particularly with respect to articles 154-bis and
154-ter, as amended by the aforementioned Legislative Decree 195/2007, regarding financial reporting. Therefore, the position of Poste Italiane's Manager
responsible for financial reporting, introduced in 2007 with an amendment to the Articles of Association reflecting a voluntary decision made by the
shareholders, has become a legal obligation. This has entailed the assignment of additional duties and responsibilities, thereby modifying the process of
adaptation undertaken by the Company since the Manager's appointment. These modifications were approved by the Board of Directors on the
recommendation of the CEO, following mandatory consultation with the Board of Statutory Auditors.
refer. The position has also been created for those subsidiaries that contribute a significant share of the Group’s consolidated net assets, income and cash flows3.
The Manager responsible for financial reporting is supported by the Accounting Controls function, which forms part of
Accounting and Control, in analysing potential risks to the reliability of financial reporting. This is supplemented by the
reports sent periodically by the various other protagonists involved in managing the different types of risk.
Furthermore, a number of Poste Italiane’s corporate functions are involved in different aspects of the system of internal
control, with varying roles and responsibilities depending on their classification into three levels, which is also reflected in
the structure of monitoring activities described below:
Line or first-level controls
Poste Italiane’s corporate functions are each responsible for the System’s application, thus assuring the execution of line
or first-level controls as required by the previously cited administrative and accounting procedures. The Head of the Chief
Information Office plays a role of prime importance in this connection, since he is responsible for the IT systems that support financial reporting and is required, at least once a year, to provide the Manager responsible for financial reporting with
an attestation regarding the reliability of the system of internal controls as regards information technology.
Second-level controls
The processes relating to risk analysis and management at Poste Italiane SpA involve various functions with responsibility
for overseeing categories / areas of risk based on approaches and models that are specific to their area of responsibility,
and whose activities are at various stages of progress. These functions include:
• Risk Analysis and Security Intelligence which, adopting the international Enterprise Risk Management model, carry out
an analysis of operational risks at Company and Group level through a process of Risk Self Assessment of the various
risk factors, in terms of probability of occurrence and potential impact;
• BancoPosta’s Risk Management function oversees operational risk at BancoPosta and Poste Italiane’s financial risks. In
terms of operational risk, the function has adopted measurement models in line with those proposed by the Bank of Italy,
which are partly based, among other things, on the collection and analysis of historical data regarding internal and external operating losses, integrated with an analysis of the Business Environment and with self-assessments carried out by
the various departments involved in the processes linked to BancoPosta products. In a financial context, the function oversees liquidity, interest rate, counterparty and concentration risks to which both BancoPosta and the Corporate functions
are exposed, despite the investment restrictions in place. The risk of BancoPosta’s non-compliance with regulatory
requirements falls within the responsibility of BancoPosta’s Compliance function.
Third-level controls
• Internal Control/Internal Auditing reports to the CEO with a functional reporting line, through the Chairman, to the Board
of Directors. It supports the Manager responsible for financial reporting through continual quality assurance of the design
and functioning of controls over accounting procedures that form the basis of financial reporting. Given the department’s
organisational independence and autonomy, it is in a position to evaluate the adequacy of the design and effective application of administrative-accounting control procedures. Its work is based on an audit plan that covers existing procedures,
3. Poste Vita, SDA Express Courier and Postel, in addition to Banca del Mezzogiorno – Mediocredito Centrale which, as a listed issuer pursuant to Legislative
Decree 58/1998, is required by law to appoint a Manager responsible for financial reporting.
18
in addition to incorporating any audit tests specifically requested by the Manager responsible for financial reporting, with
whom methods and audit criteria are agreed. Audit findings are promptly reported to the Manager responsible for financial reporting in an agreed manner and format and are reported at least every six months to the Board of Directors through
the Chairman;
• BancoPosta’s Internal Auditors coordinate their activities with Internal Control/Internal Auditing to assure adequate periodic reports to the Manager responsible for financial reporting on the evaluation of the functionality of all internal control
systems relating to BancoPosta.
Finally, Group Companies have established and maintain their own systems of internal control over financial reporting, the
effective application of which is assured by certain of those companies through a manager responsible for financial reporting. Each company specifically assures the correctness of financial information and the reliability of any additional information for annual and interim consolidated financial statements and the report on operations. Certain of the companies also
have Audit, Risk Management and Compliance units similar to those of the Parent Company, thus replicating the same
internal control structure.
Principal characteristics of the Poste Italiane System
Generally the System embodies “cross-functional” components across Company and/or Group processes and operations
(job descriptions, powers and delegations, etc.) and the individual processes used for financial reporting. In accordance with
the principles adopted by Poste Italiane, the System consists of the following components: Control Environment, Risks and
Control Activities, Information and Communication and Monitoring.
Control environment: the general environment in which Poste Italiane’s staff perform their duties. It encompasses
integrity and other of Poste Italiane’s ethical values, its organisational structure, system of allocating and exercising authorities and responsibilities, the separation of duties, staff management and incentive policies, personnel competence and,
more in general, corporate culture. Other factors characterising the control environment at Poste Italiane, which are of particular importance for the internal control system applied to financial reporting, are primarily:
• Organisational Models pursuant to Legislative Decree 231/01 described above and the relevant corporate procedures.
One of the internal controls foreseen by legislation is the segregation of duties, which is applied in accordance with the
importance and nature of the relevant activity in order to avoid organisational over-concentration of powers and the need
for additional controls, even after taking the geographical dispersion of activities throughout Italy into account. The segregation of duties is of fundamental importance for certain activities, regardless of their effects on financial reporting, for
the safeguarding of assets and, in general, fraud prevention;
• the Group’s Code of Ethics, as supplemented by the Group Suppliers and Partners Code of Conduct, which protect Poste
Italiane against litigation and court orders arising from breaches of trust;
• the organisational structure of Poste Italiane and Group companies as reflected in organisational charts, service orders,
organisational notices and procedures, which determine the duties and responsibilities of corporate functions;
• the system for delegating powers, which entails the delegation of powers to the heads of the various functions with
respect to their activities, by the granting of special powers of attorney to specific persons;
• the Group’s Interrelations Map, which incorporates a system of behavioural and technical rules guaranteeing the standard
application of corporate governance through coordination of decision-making processes regarding aspects, issues and
activities of strategic interest and/or importance, or whose impact may involve significant financial risks for the Group.
In addition to the above, and of a more general nature, an in-house set of standards and principles has been developed for
the regulation and implementation of the position of the Manager responsible for financial reporting. Specifically;
• Guidelines for the Manager responsible for financial reporting, as reported to the Board of Directors, which determine the
powers, resources, duties and relationship of the Manager with corporate and control bodies, corporate functions and
Group companies, in compliance with the Articles of Association. The Guidelines are consistent with the standards of the
Italian association of chief executive and financial officers (Associazione nazionale direttori amministrativi e finanziari or
“ANDAF”). The Guidelines require that the Manager responsible for financial reporting be selected from among the
Company’s managers and have senior management responsibilities. The Manager must have direct responsibility for
administrative, accounting, tax and management control units. The Manager’s appointment may only be revoked for due
cause. Finally, the Manager must be given full and unfettered access to all corporate information deemed relevant for the
pursuit of his duties;
• the Financial Reporting Model of Governance and Control (the “Model”) issued by the Manager responsible for financial
reporting, together with the head of Human Resources and Organisation, which sets out the method of coordination,
within the Group, of processing, preparing and controlling accounting records, in addition to the principles applied by
Poste Italiane for the establishment and maintenance of suitable internal controls over financial reporting. The Model
incorporates the COSO4 Report recommended by Confindustria (the Confederation of Italian Industry) in the guidelines
for the duties of the Manager for financial reporting, pursuant to art. 154 of the Consolidated Law on Finance and by
ANDAF in a position paper on the manager responsible for financial reporting, entitled “Il Dirigente Preposto alla redazione
dei documenti contabili e societari”. As required by the Model, the Manager has developed and distributed “Procedural
and Operational Guidelines” throughout the Group, describing the analytical criteria, operational procedures and a selection of instruments to be used in one way or the other by the functions and personnel involved in the implementation,
verification and revision of the System. The objective of the document is to provide guidance on the practical implementation of the methodological principles adopted.
The Manager responsible for financial reporting has developed procedures based on these principles that regulate Poste
Italiane’s administrative and accounting processes and the related controls described below.
Finally, the Chief Financial Officer (the Manager responsible for financial reporting) is invited to attend meetings of the Board
of Statutory Auditors and is a member of the Supervisory Board’s Technical Secretariat, thus assuring a reciprocal and effective exchange of information. He is also a member of BancoPosta’s Cross-functional Committee and the Finance
Committee, and chairs the Financial Risk Committee.
The Finance Committee has a consultative function and provides strategic guidance to and supervision of Poste Italiane
and the Group in addition to the development of “Operational Guidelines for Poste Italiane’s Financial Management” for
approval by the Board of Directors, whereas the Financial Risk Committee assesses and monitors the Group’s overall exposure to financial risks, and verifies compliance with the above Guidelines.
4. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) defines the system of internal control “as a process, effected by an
entity’s board of directors, management and other personnel, designed to provide "reasonable assurance" regarding the achievement of objectives in the
following categories: effectiveness and efficiency of operations; reliability of financial reporting; and, compliance with applicable laws and regulations”.
20
Risk and control: Poste Italiane identifies and analyses risk through a structured process, which is implemented and
supported by various corporate functions that are strictly complementary to each other. A detailed description of risk management is contained in the section of this Report entitled “Risk Management for the Group and Poste Italiane SpA” and,
with regard to financial risks in the strictest sense of the term (interest rate, liquidity and counterparty risk, etc.), in the
notes to the separate financial statements, in the attached Separate Report for BancoPosta RFC and in the notes to the
consolidated financial statements (note 3 in each of the above documents). It should be noted, in that connection, that the
Company uses certain consolidation methods that permit the integrated and synergistic assessment and management, at
Group level, of the principal risks inherent in its business processes. As explained above with respect to Corporate
Protection Risk Analysis and Evaluation and BancoPosta’s Risk Management, corporate functions complement each other
with respect to support for other corporate functions and Group companies, in as far as operational risk analysis, assessment and management is concerned. The method used is based on management’s risk control self-assessment.
BancoPosta’s Risk Management has adapted this method, which was developed through the dissemination of specific
models and guidelines, in order to ensure compliance with regulatory requirements for the providers of banking services.
BancoPosta also has a specific organisational unit, named Projects, Processes and Procedures, for defining and reviewing
procedures in accordance with the applicable laws and regulations. During the year BancoPosta, in parallel with other initiatives, proceeded with the process of identifying solutions capable of ensuring the separation of control processes from
those relating to operations, and achieving the more general goal of establishing more specific and organic rules governing
business processes and procedures specific to it. The structure of BancoPosta’s organisation and controls is, in any event,
evolving in response to the formation of ring-fenced capital, in line with the scenario described in other parts of this document.
Poste Italiane also has specific organisational units to assure its assets and data are safeguarded. Their work in this connection entails both the detection of internal and external (e.g., theft) criminal acts, preventative measures, the development of policy and procedures and the analysis of potential vulnerability and critical events, above all in connection with
data protection. Finally, changes are being made with regard to the various specialist functions with responsibility for safety at work.
The assessment of the risk of errors in financial reporting is carried out in connection with the development of administrative
and accounting procedures, conducted by the above-mentioned Accounting Controls function, which forms part of Accounting
and Control. The documents are issued by the Manager responsible for financial reporting in conjunction with Human
Resources and Organisation and regulate, among other things, line (first-level) accounting controls of the various corporate
functions involved in the preparation of financial statements. The purposes of these procedures are, particularly, to:
• regulate administrative and accounting aspects of the relevant processes, through identification of the roles and responsibilities of the functions involved, by defining and describing their activities, the information systems used and the controls required to meet certain objectives (so-called “financial statement assertions”)5, necessary in order to reasonably
assure the accuracy and reliability of financial reporting;
• provide a method for monitoring by the process owner and independent verification.
5. Existence: the assets and liabilities of the enterprise actually exist and the postings to accounts represent actual occurrences;
Completeness: all transactions have been recorded in the financial statements;
Claims and Obligations: the assets and liabilities of an enterprise represent the company's claims and obligations;
Measurement/Recognition: measurement means that items have been recorded in the financial statements in compliance with the relevant accounting
standards (IAS/IFRS) applied in an appropriate and pertinent manner; recognition means that value of transactions is correctly computed, accurately
recorded, posted to the ledgers and documented;
Presentation and Disclosure: financial statement items are correctly designated, classified and described and, where applicable, analysed and commented
on in the notes and are released together with the most recent information needed for a complete representation of the company's earnings and net assets.
The process of preparing these procedures entails the following phases:
• the identification or updating, starting from the general ledger accounts and the component captions of the financial statements, of the various processes that, directly or indirectly, relate to the elaboration and preparation of financial reports,
by mapping the processes in decreasing order of relevance with respect to quantitative (effect on the income statement
and/or financial position and cash flows) and qualitative factors;
• the identification or updating, for each process identified, of activities and inter-related administrative-accounting controls
with respect to the above-mentioned financial statement assertions inherent in these processes, which are then formalised as a specific procedure and control. Controls intended to prevent irregularities that can cause errors in financial
reporting are then classified as “preventative”; those intended to identify irregularities that have already occurred are
“subsequent”. A distinction is also made between “manual” and, for those controls made by information systems used
for the processes, “automated”;
• the assessment, which is conducted at the same time as the previous phase, of the effectiveness of existing controls in
the mitigation of the inherent underlying risk of error, which is the inability to achieve one or more financial statement
assertions. In the event that existing controls are found to be inadequate, other so-called “actual” controls are specifically designated to assure the overall adequacy and effectiveness of the system of internal control over the process;
• the documentation, for each procedure, of the analysis conducted for the identification and assessment of risks is prepared in the form of a matrix showing how risks and controls are related (the risk-control matrix). The risks are then
assessed in terms of their potential effect and probability of occurrence, as shown by quantitative and qualitative variables, on the assumption of no controls;
• the verification of the effectiveness and testing of controls by the independent Internal Control/Internal Auditing department, as a part of its annual audit plan, or by the System of Accounting Controls function that reports to the Manager
responsible for financial reporting;
• periodic reports to the Board of Directors on the state of the System and any planned revisions, including progress on
the remedy of areas requiring improvement, at the time resolutions approving separate and consolidated annual financial
statements and the condensed interim consolidated financial statements are deliberated.
Based on the above approach, the current status of the project is that certain administrative-accounting processes have
been identified as important and are currently being tested for effectiveness.
The managers responsible for financial reporting appointed by the most important Group companies follow the same
approach as the Parent Company, applying the methods circulated by it. At the end of each annual and half-year reporting
period, each manager responsible for financial reporting issues a certificate jointly signed by the company’s CEO and with
the same wording as the Parent Company’s, as required by the CONSOB.
Compliance with ongoing changes in tax rules and accounting standards is provided by specific technical units under
Accountancy and Control. In addition, the Company also participates in technical round-table discussions held by major sector associations and professional bodies on administration, taxation accounting and internal control over financial reporting.
There is also a system of in-house attestation by Poste Italiane’s Chief Financial Officer (the Manager responsible for financial reporting), which serves as a basis for attestations relating to various aspects of financial reporting.
22
These are issued by the heads of corporate functions and attest to, among other things, the correctness and completeness
of accounting records and related reports, in addition to compliance with relevant administrative and accounting procedures. Analogous attestations are also issued by the Group’s senior management.
Information and communication: Poste Italiane’s information flows are supported by information systems that,
among other things, collate, classify and record transactions for the purposes of processing as well as preparing and controlling financial reporting. The IT internal control system is based on COBIT methodology6 and covers infrastructure and
transversal processes that are typically the responsibility of the Chief Information Office7 (the so-called Company Level
Controls and IT General Controls) and the so-called Application Controls over processes that support business. IT Company
Level Controls and IT General Controls relate to the processes of development and maintenance planning for hardware and
software, the determination of the organisational structure of dedicated units, the acquisition and implementation of IT
resources, the provision of services and assistance to users, the monitoring and assessment of objectives.
Finally, Monitoring is conducted at various levels based on the roles and responsibilities described above. The Company’s
earnings and cash flows are also continually monitored through management reports that, as a result of the organisational structure of the Company, are made by the Accounting and Control function and other corporate functions through their
own administration and control units.
6. COBIT (Control Objectives for Information and Related Technology) is a set of best practices (framework) for information technology management created
by the American ISACA (Information Systems Audit and Control Association) and ITGI (ITGovernance Institute) to provide an internationally generally accepted measures for the assessment and improvement a company's IT governance and control.
7. IT systems relating to human resources are under the direct control of Human Resources and Organisation.
2. Organisation 23
2. ORGANISATION
2.1 ORGANISATIONAL STRUCTURE OF POSTE ITALIANE SPA
Poste Italiane SpA’s organisation breaks down into the following business and corporate functions:
Business functions
Postal Services
BancoPosta
Private Customer
Large Account and Public Sector
Marketing Postal and Digital Services
Marketing and Management of Logistics Services
Corporate functions
Purchasing
Public Affairs
Legal Affairs
Corporate Affairs
Accountancy and Control
External Relations
Internal Auditing
Finance
Real Estate
Strategic Planning
Human Resources and Organisation
Chief Information Office
Security & Safety
The BancoPosta, Marketing Postal and Digital Services and Marketing and Management of Logistics Services business
functions are responsible for developing the related products and services and managing a part of the operations involved
in their supply.
24
The Marketing Postal and Digital Services function is also responsible for the development and supply of philately products.
The Private Customer and Large Account and Public Sector functions are the commercial channels responsible for developing and managing frontline commercial activities for all customer segments. The Private Customer function is also
responsible for customer care.
Postal Services is responsible for planning and managing the logistics process (mail and parcels) and for the supply of integrated services.
Corporate functions are central departments that manage, control and provide business support services.
2011 witnessed a number of organisational initiatives aimed at improving the focus and effectiveness of marketing, commercial and operating processes, so as to equip the Company to cope with the increasingly complex macroeconomic environment and respond to the growth in competition resulting from deregulation of the postal market. There were equally
important changes to financial services, where the changed regulatory environment deriving from the formation of
BancoPosta’s ring-fenced capital increased the need to introduce new organisational structures and processes.
Against this backdrop, the main organisational changes regarded the following:
• establishment of the Marketing and Management of Logistics Services function to ensure the development and innovation of logistics services, including through coordination of the functions of the various departments within the Company
and the relevant Group companies. The function was also handed responsibility for development of the e-commerce service offering, previously the subject of a specific initiative;
• a redefinition of the responsibilities of the Marketing Logistics and Digital Services, renamed Marketing Postal and Digital
Services, with the aim of achieving a more focused approach to the marketing of postal, integrated and digital communication products and services. In this regard, responsibility for operations involved in the management of logistics for
domestic parcels and the international gateway, and of the provision of integrated and innovative services was transferred
to Postal Services during the year. In addition, with the aim of exploiting the potential offered by unifying management of
traditional products and services, the development and production of philatelic products was transferred to Marketing
Postal and Digital Services;
• the transfer of activities previously carried out by the Internet function to Postecom, with the aim of achieving greater
coordination between the design and production stages and thus achieve a time to market more suited to the related
market;
• a review of the commercial and customer care model used by the Private Customer function, with the priority aim of
boosting the ability to provide distinctive offerings to the various target segments, with particular regard to the increasingly strategic SME segment. In this regard, commercial and pre- and after-sales support are now even more specialised
by type of product/service or customer based on the target customer segment;
• the formation of ring-fenced capital to be used in relation to BancoPosta, in compliance with the Bank of Italy’s prudential requirements; in this connection, definition of a model governing the organisation and management of the capital, as
part of the By-laws governing BancoPosta RFC, was particularly important. The model operates on various levels and,
among the various components, includes the establishment of a Cross-functional Committee with consultative and advisory functions and responsible for linking BancoPosta RFC with the other functions within Poste Italiane involved in operations relating to the ring-fenced entity;
• again at BancoPosta, the Projects, Processes and Procedures and the Operations functions were reorganised in order to
achieve a more precise division between “controls” and operating activities, and the business continuity model for financial services was revised, by reconfiguring the organisational roles designed to manage both critical events and activities
linked to the Business Continuity Management programme. The composition of the Crisis Unit was revisited and it was
decided to set up a Business Continuity Committee for Financial Services, with responsibility for operational supervision
of the Business Continuity Management programme;
• in completion of the planning initiative begun during 2010, formalisation of the new model for managing the Group's
Information Security which, partly through reorganisation of the corporate functions most concerned (above all the Chief
2. Organisation 25
Information Office and Security & Safety) and the related coordinating bodies, enables more precise management of the
process of ensuring the security of the entire information life cycle;
• a strengthening of the organisational units engaged in technological innovation and in the processes involved in planning
and managing projects and their development, through reorganization of areas of the Chief Information Office.
The following important events also took place in 2011:
• preparations for the start-up of operations of the Banca del Mezzogiorno from 2012 following the acquisition of Unicredit
MedioCredito Centrale SpA;
• the launch of the ISTAT Project relating to activities involved in the 15th Census of the Italian population and housing in
2011;
• the transfer of Poste Italiane SpA’s telecommunications unit to PosteMobile SpA as part of the plan to optimise use of
the Company’s telecommunications assets by obtaining synergies, in part with the aim of developing a competitive and
integrated commercial offering for future launch on the external market.
2.1.1 PRIVATE CUSTOMERS
The Private Customer function manages the commercial front end and pre- and after-sales support for the Private Customer,
SME and the Local Government segments for which it is responsible (Business).
The organisation of the commercial network and related operational support processes breaks down into three levels:
• Multi-regional Area Offices (referred to as Private Customer Area Offices);
• Branch Offices;
• post offices (including Poste Impresa offices), which from a commercial point of view are classified as central, relations,
transit, standard, service or support offices.
In continuation of the rationalisation process, the number of post offices was reduced by 60 in 2011, declining from 14,005
at 31 December 2010 to 13,945 at 31 December 2011, whilst the network of Poste Impresa offices rose to 258 at 31
December 2011 (239 at 31 December 2010), marking an increase of 19.
31 Dec 2010
Number
Private Customer Area Offices
Branch officies
Post officies
Workforce
31 Dec 2011
Number
Workforce
9
1,774
9
1,749
132
4,704
132
4,652
14,005
59,778
13,945
60,076
All workforce data is shown in full-time equivalent terms.
Back-office activities are partly carried out at post offices, and partly at 15 specialist service centres (Centralised Service
Teams) spread around the country and under the control of the Customer Services.
These centres, which have been created with the goal of streamlining, standardising and speeding up after-sales activities
for financial services, also deal with the management of current accounts and ancillary services, loan and mortgage applications and certain after-sales activities.
The above Teams carry out these activities for both Private and Business customers (SMEs and Local Government).
With the aim of boosting market coverage in order to exploit all the growth opportunities in the Private and Business segments, a number of reorganisation initiatives were undertaken at local level during the year, with the aim of achieving a
greater degree of process integration and optimising support activities across all areas of the business.
26
The main initiatives implemented / launched include:
• the overall reorganisation of customer care, within the scope of the Customer Service function, proceeded with the closure of sites in Bari and Cagliari; pre- and after-sales activities and complaints management were streamlined and centralised and a new operating model introduced, based on internal roles specialising in different products/services/customers (Private Financial Service Customers, Postal and other Private Customer Services and Business Customers).
Back-office activities were reorganised by establishing Specialist Units within the Centralised Service Teams handling
loans and probate issues in order to provide specialist support to post offices and improve integration with front-end staff;
• the new organisational model for the Operations Management function (formerly Operations) at Area and Branch Office
level was launched with the aim of refocusing attention on issues relating to the regular and correct conduct of the operating processes involved in support for post offices, introducing two new specific roles at local level (the Financial Process
Consultant and the Postal Process Consultant) and developing the skills of specialists at branch office level;
• a new operating model was defined for Private Commercial activities in order to guarantee a full and rapid response to
the needs of the network, redefining the mission of Area Office functions (as providers of expertise and knowledge to
support front-end staff) and Branch Office functions, focusing on management and support for operations, the monitoring of day-to-day operations and direct sales, including via the introduction of new specialists assigned responsibility for
groups of post offices;
• in order to improve market penetration, the micro-organisational model for Business Commercial activities was subject
to a review of the operating model for the relevant sales force. This involved a number of initiatives (the introduction of a
parcels sales specialist at Area Office level, the decision to have the Business and Local Government sales force reporting to Branch Office managers, the focus of Poste Impresa offices on developing the sectors in which target SME customers operate);
• the micro-organisations of the most important post offices (highly complex central post offices) were revisited with a view
to strengthening support for post office managers with regard to operational and management aspects, introducing new
roles (the Post Office Coordination Consultant and the Post Office Specialist).
PRIVATE
In order to improve service quality and develop the network’s commercial potential, by differentiating service provision from
activities offering higher added value, special “Financial and Loan Products” areas have been created for private customers
within post offices. At 31 December 2011 there were 4,712 of these areas, including 438 in the process of being set up.
SMALL AND MEDIUM ENTERPRISES AND LOCAL GOVERNMENT
During 2011 the management model for the SME market segment, covered by the Private Customer function, was
consolidated. This envisages the georeferencing of all SME and Local Government customers in relation to approximately
471 highly specialised, integrated physical locations (divided between Offices and Areas).
In addition to counter staff, Poste Impresa offices (which represent an evolved form of the pre-existing Poste Business
offices) also offer specialists in each industrial sector with responsibility for establishing direct relations with customers
with a view to acquiring new business and developing relations with actual and prospective customers in the following
sectors:
• communication, marketing, services and B2B (associations, advertising and press agencies, private educational institutes,
sports centres, wholesalers, etc.);
• Ho.Re.Ca.8 and B2C (hotels and restaurants, entertainment providers, retailers, etc.);
8. Ho.Re.Ca., the acronym for Hotellerie-Restaurant-Café, indicates enterprises operating in the hotel or food and beverage sectors.
2. Organisation 27
• companies (manufacturers, utilities, construction, transport, etc.);
• professionals and property managers.
The commercial model also involves dedicated sales personnel, reporting to Branch Office managers, for Business and
Local Government customers, with the role of protecting and growing the volume of business with customers belonging
to their assigned portfolio and of acquiring new customers.
Finally, each geographical area has a commercial organisation providing a link between central departments and Poste
Impresa offices and areas, disseminating commercial policies, offering specialist support to the channel in marketing the
offering, carrying out surveys of the market and of changes in customer needs, and checking on the progressive
implementation of commercial strategies at local area level.
Geographical distribution of post offices and Branch Offices
355
2
368
4
1
1,117
8
1,487 12
996
10
5
462
5
1,019 11
527
4
174
2
2,019 19
71
469
288
2
462
4
North-western Area
based in Turin
Piedmont
Valle d’Aosta
Liguria
Central Area 1
based in Florence
Tuscany
Umbria
9
493
5
1,049 9
187
2
698
6
853
851
12
Geographical distribution of Areas
Central Area
based in Rome
Lazio
Sardinia
Abruzzo
Southern Area 2
based in Palermo
Sicily
Post offices
Branch offices
Lombardy Area
based in Milan
Nord-eastern Area
based in Venice
Veneto
Trentino Alto Adige
Friuli Venezia Giulia
North-Central Area
based in Bologna
Emilia Romagna
Marche
Southern Area 1
based in Bari
Puglia
Molise
Basilicata
Southern Area
based in Naples
Campania
Calabria
2.1.2 LARGE ACCOUNT AND PUBLIC SECTOR
The Large Account and Public Sector function is responsible for developing business with Large Account, Central
Government and some Local Government customers. The process of better tailoring the offering to the needs of the
different customer segments continued in 2011 with adoption of an organisational model for sales departments that
envisages four specific areas: two geographical areas for Large Account and Local Government customers (Northern and
Central-Southern), an area covering Partner Channels and one for Central Government customers. Central functions also
exist to support and coordinate pre- and after-sales activities and liaise with the related marketing functions.
28
2.1.3 POSTAL SERVICES
Postal Services is responsible for planning and managing the integrated logistics chain (mail and parcels), overseeing the
entire process of collection, transport, sorting and delivery.
The logistics network is organised on two levels, the first of which deals with coordination and is represented by Area
Logistics Offices responsible for one or more regions, whilst the second is operational and includes sorting centres
(mechanical and manual) and distribution centres (Delivery Offices).
The restructuring of logistics and operations, based on the provision of postal services five days a week (Progett8VENTI),
was completed in line with the timing set out in the union agreement of 27 July 2010. Consequently, in the country’s major
cities9, it is now possible to guarantee deliveries throughout the working day (from 8.00am to 8.00pm from Monday to
Friday) and offer the delivery of certain types of mail on Saturday morning.
The project was completed with the launch of all the planned 915 Distribution Centres and efficiency improvements in
4,142 delivery zones.
31 Dec 2010
Number
Area Logistics Offices
31 Dec 2011
Workforce
Number
Workforce
9
1,908
9
3,181
Sorting Centres
21
10,931
21
10,432
Priority Centres
29
2,457
15
1,302
Delivery Logistics Centres
14
605
-
-
3,457
48,929
2,924
48,133
(*)
Delivery Offices
(**)
All workforce data is shown in full-time equivalent terms.
(*)
The process, begun in 2010, of transfering Coding Service Centres, which previously reported to the Priority Centres and Delivery Logistics Centres that
have now closed, to the Operations departments of the relevant Logistics Area Offices was completed in 2011. In addition, the activities involved in the
provision of online integrated and mail services were transferred to Area Offices, as was the handling of international parcels at the Gateway.
The geographical distribution of Offices at 31 December 2011 is as follows: Piedmont, Valle d'Aosta and Liguria; Lombardy; Veneto, Trentino Alto Adige and
Friuli Venezia Giulia; Emilia Romagna and Marche; Tuscany and Umbria; Lazio, Abruzzo, Molise and Sardinia; Campania and Calabria; Puglia and Basilicata; Sicily.
(**)
Delivery staff include 39,679 postmen and women and delivery supervisors (41,429 at 31 December 2010).
The new configuration of the logistics network10 introduced by Progett8VENTI has retained 21 Sorting Centres and 15
Priority Centres, whilst the remaining 20 Priority Centres and all 42 Delivery Logistics Centres are to be gradually closed.
The sorting operations carried out by the centres closed have been transferred to Sorting Centres, with the remaining mail
collection, local notification and transport services handed over to the nearest Distribution Centres, which have been
renamed Master Distribution Centres. The Coding Service Centres formerly located within the now closed Delivery
Logistics Centres and Priority Centres have been transferred to the Operations departments of the nearest Area Logistics
Offices.
Continuing the process begun in 2010, a total of 14 Priority Centres and 14 Delivery Logistics Centres were closed in 2011,
whilst the same number of Master Distribution Centres were established.
Further initiatives in 2011 regarded:
• the transfer of activities involved in the supply of integrated services (ten Service Centres supplying integrated mail services for the Integrated Notification Service and the Regularisation of Immigrant Workers) and online mail services
(Electronic Communication Service Centres, which primarily manage operations relating to a number of online mail services) to Area Logistics Offices, based on the area served;
9. In provincial capitals and municipalities with more than 30,000 inhabitants.
10. The facilities in operation on the date the agreement was signed (27 July 2010) break down as follows: Sorting Centres, which use highly automated equipment to sort bulk, business, priority and registered mail; Priority Centres, where mail classified within the J+1 service standard originating out of area is
sorted manually before delivery within the local area (cities and provinces in which Priority Centres are located); Delivery Logistics Centres, logistics hubs
for mail collection, notification services in the local area and transport.
2. Organisation 29
• amalgamation, within Postal Services, of domestic and international gateway parcels and the subsequent launch and conclusion of the “Gateway Unification” project, aimed at centralising international parcel processing at one site in Lonate
Pozzolo (VA) and the later closure of the sites at Genova Porto (10 June 2011) and Roma Corcolle (16 September 2011).
Initial trials of the insourcing of parcels were also run, channelling the delivery of Poste Italiane branded products via the
universal delivery network (Terni);
• development of the “Electronic Postman” project, with the implementation of new functions:
a) payment of pre-printed bills, cash on delivery payments and Postepay topups via POS operated by postmen and
women from the Universal Services and the new Innovative Services units;
b) management of the ISTAT census package;
c) collection of Postafree products at Distribution Centres with Innovative Services units;
d) the launch of trials using the “Q Code” (business mail quality control) at a number of Distribution Centres in Rome;
• on-schedule completion of the first stage of the ISTAT Project linked to the “15th Census of the Italian population and
housing in 2011”, with delivery of approximately 25 million questionnaires to Italian households;
• establishment of a Security, Infrastructure and Support Services function to provide specialist support for the reorganisation of operating processes at central and local level, in order to align and standardise improvement initiatives regarding
safety and security based on operational requirements in synergy with the Security & Safety function;
• review of the Delivery, Transport and Quality functions, with a view to standardising the organisations, and amalgamating activities involved in the collection of mail for Large Accounts within the central and local units of Administration and
Control and Operations.
Finally, the following initiatives were undertaken as part of the international consultancy agreements with the postal
operators, Egypt Post and Russian Post:
• the second phase of the consultancy contract, involving the re-engineering of Egypt Post’s logistics processes,
was completed;
• two Workshops (in Moscow and Rome) provided for in the consultancy contract between Poste Italiane, Russian Post
and Selex Elsag were held, including in-depth coverage of operational issues and visits to a number of logistics centres.
Distribution of Area Logistics Offices
Distribution of Postal Network Centres
SC
Piedmont - Valle d’Aosta - Liguria
3
1
Lombardy
3
1
Triveneto
3
3
Emilia Romagna - Marche
2
1
Tuscany - Umbria
2
2
Lazio - Abruzzo - Molise - Sardinia
3
3
Campania - Calabria
2
1
(*)
Puglia - Basilicata
1
2
Sicily
2
1
Total
21
15
(*)
PC
The Priority Centres include the Romanina and Portonaccio printing
centres in Rome (logistical support centres hosting the remaining
manual processes)
30
2.1.4 OTHER BUSINESS FUNCTIONS
The other Business functions are centralised departments which, partly by coordinating the operations of a number of
Group companies, create, design and manage the Group’s offerings, with the related responsibilities assigned as follows:
• Marketing Postal and Digital Services for domestic postal products/services, integrated and digital services and philatelic products;
• Marketing and Management of Logistics Services for domestic and International logistics products/services and
International mail products/services, and for e-commerce services, for which it provides specialist technical support;
• BancoPosta for financial products/services.
In addition, BancoPosta carries out a number of operating processes relating to its area of business at sites located around
the country, as follows:
• four Unified Service Automation Centres, where the bills paid at post offices are sent and processed;
• two Cheque Centres for the processing of cleared cheques;
• a Multi-service Centre, located in Turin, which carries out certain back-office processes (fraud analysis and management,
credit checks, the management of payment orders for legal and other expenses).
2.1.5 CORPORATE FUNCTIONS
Corporate functions work closely with the business functions in order to provide support across all areas of business with
the aim of ensuring the smooth running of the Company. Certain functions (Human Resources and Organisation,
Purchasing, Internal Auditing, Chief Information Office, Real Estate and Security & Safety) also have their own local units
responsible for the correct operational implementation of guidelines laid down by the respective central functions.
2. Organisation 31
2.2 STRUCTURE OF THE POSTE ITALIANE GROUP
100%
100%
Postecom
SpA
Postel SpA
10%
70%
Poste Tributi
ScpA
100%
100%
SDA Express
Courier SpA
10%
100%
39% CLP ScpA
Kipoint
SpA
5%
Mistral Air Srl
100%
5%
Address
Software Srl
PosteTutela
SpA
100%
Poste Vita SpA
100%
100%
Italia Logistica
Srl
PosteShop SpA
100%
Poste Assicura
SpA
28.57%
Uptime SpA
Poste Energia
SpA
100%
BancoPosta
Fondi SpA SGR
PosteMobile
SpA
100%
Consorzio per i
servizi di Telefonia
Mobile ScpA
51%
0.02%
99.98%
Postel do
Brasil Ltda
Telma-Sapienza
Scarl
32.18%
49%
Docugest SpA
Innovazione e
Progetti ScpA
(in liquidation)
15%
55%
45%
49%
51%
Europa Gestioni
Immobiliari SpA
50%
PostelPrint
SpA
Docutel
85% Communication
Services SpA
51%
100%
Banca del
100%
Mezzogiorno
MedioCredito Centrale
SpA
32
3. FINANCIAL REVIEW
3.1 RISK MANAGEMENT FOR THE GROUP AND POSTE ITALIANE SPA
MACROECONOMIC ENVIRONMENT
2011 witnessed a series of negative events, including political tensions in the Middle East, the nuclear disaster in Japan,
rising commodity prices and the sovereign debt crisis that hit a number of euro zone countries, giving rise to the adoption
of austerity measures. Together, the above factors resulted in a decline in global GDP growth from 5.1% in 2010 to 3.8%.
The worsening international situation has had a significant impact on our country: a reduction in the already slow pace of
GDP growth (0.5% compared with 1.8% in 2010) has resulted in a further rise in public debt, which now amounts to 3.9%
of GDP. Particularly during the second half, Italy experienced a crisis of confidence in its debt, leading to an increase in
borrowing costs, with the interest rates on short-term securities nearing 6% and on longer-term securities reaching around
7.5%.
This situation resulted in a deterioration in consumer confidence, which translated into only modest spending growth
(0.2%) compared with the already weak figure for 2010 (1.2%). Total internal demand thus fell slightly (0.3%), hitting Italian
economic growth as a whole.
Businesses also reported low growth: industrial output rose by a mere 0.2%, thanks to exports, which were up 6.3% on
2010. Companies had to face, on the one hand, stagnating demand and, on the other, increased difficulties in gaining access
to bank loans, linked to the rise in interest rates.
The situation was further complicated by the introduction of austerity measures, resulting in a recession caused by
increases in direct and indirect taxation and cuts to transfers to local authorities.
In late 2011 the country went back into recession (the fourth quarter of the year registered a 0.7% fall in GDP versus the
previous quarter), which is expected to deepen over the coming year: forecasts for 2012 point to a decline in GDP of
approximately 1.5%.
The weak macroeconomic environment in our country has had a negative impact on the sectors in which Poste Italiane
operates.
MARKET CONDITIONS AND COMPETITION
Following the introduction of Legislative Decree 58 of 31 March 2011, fully deregulating the postal market, a number of
competitors have reinforced their presence, offering a range of services and covering large areas of the country, above all
major cities and provincial capitals. These operators also intend to compete more effectively by focusing primarily on highvalue customers.
Competition was already present in previous years as a result of partial deregulation of the postal market, enabling our main
3. Financial review 33
competitors to begin offering postal products and gain market share. Above all, inroads were made by companies owned
by overseas postal operators seeking new market opportunities in markets in the process of being opened up.
These new developments in the postal market have occurred at the same time as a structural decline in the use of
traditional forms of communication, as a result of its progressive replacement by digital communication and the economic
downturn. Against this backdrop, Poste Italiane continues to bear the cost of providing a Universal Service, whilst ensuring
high quality services and covering a wide geographical area.
Thanks to large-scale investment in innovation and its widespread network, Poste Italiane has been able to respond to
these market challenges by relaunching traditional services and diversifying into totally new markets. We have leveraged
technology in order to offer new services. The Company has given priority to increasing the degree of functional integration
between the various areas of business (postal, financial and telecommunications) and has developed differentiated
offerings for the various customer segments, providing products that offer security, simplicity and reliability.
RISK MANAGEMENT
Poste Italiane takes a structured approach to identifying and analysing risk, which is carried out by various functions that
complement each other whilst mutually respecting each other’s roles. The Company has significantly boosted its Enterprise
Risk Management system in order to support and supplement the processes, tools and initiatives needed to assess and
quantify the levels of risk to which the different areas of the Company are exposed, based on a model for integrating internal
information flows. The system focuses primarily on process analysis and the measurement of risk in qualitative and
quantitative terms, using key performance and risk indicators (KPIs and KRIs) in line with the most recent international risks
management standards and best practices.
The principal categories of risk are as follows.
FRAUD AND EXTERNAL EVENT RISKS
One of the issues on which Poste Italiane continuously focuses attention is post office security, with a view to protecting
both staff and the Company’s assets and dealing with the risks deriving from fraud and/or criminal actions committed by
external agents. Compared with 2010, the figures for 2011 show a slight reduction in the number of attacks, confirming the
positive performance of the Company’s security plan designed to protect the various assets and the effectiveness of the
activities of the Remote Surveillance service, which plays a key role in fighting fraud and crime.
Although to a lesser extent than in the recent past, phishing continues to represent one of the most prevalent and sophisticated forms of online fraud. Poste Italiane has for some time adopted a series of organisational and technological counter-measures to prevent, manage and fight this type of crime.
Great attention is also paid to combating the risks deriving from potential fraud inside and outside the Company and specific steps taken. Poste Italiane has adopted a range of tools, used by the various departments within the Company, to prevent the occurrence of such events, including the Oracolo system for checking proof of identity and the Identity Check system for controlling access to the website at www.poste.it.
Overall, the risks deriving from fraud and/or actions committed by external agents are monitored via the anti-phishing system, which identifies any attempts at phishing for customers’ details, the Security Room, customer awareness campaigns,
heightened fraud prevention initiatives and an increased internal investigation capacity, as well as greater coordination with
the police and magistrates.
34
FINANCIAL RISKS
Definition and optimisation of the financial structure, over both the short and medium/long term, and management of the
Group’s related cash flows is the responsibility of the Parent Company’s Finance department, acting in accordance with the
general guidelines established by governance bodies.
Management of the Group’s financial assets and liabilities is primarily attributable to the operations of the Parent Company
and the insurance subsidiary, Poste Vita SpA.
Balanced financial management and monitoring of the main risk/return profiles is carried out by organisational structures
operating separately and independently. In addition, specific processes are in place governing the assumption,
management and control of financial risks, including via the progressive introduction of appropriate information systems.
From an organisational viewpoint, risk management is the responsibility of:
• a Finance Committee, which oversees Poste Italiane SpA’s financial strategy, based on indicators referring to internal planning and the external economic/financial cycle. The Committee meets at least on a quarterly basis and is a specialist body
that advises on the analysis and identification of investment and disinvestment opportunities;
• a Risk Measurement and Control function carried out by appropriate functions established within the Parent Company
and the subsidiaries that provide financial and insurance services (BancoPosta Fondi SpA SGR, Banca del MezzogiornoMedioCreditoCentrale SpA and Poste Vita SpA) and that operates on the basis of the organisational separation of risk
assessment from risk management activities. The results of these activities are examined by the relevant advisory committees, which are responsible for carrying out an integrated assessment of the main risk profiles. The outcomes of these
assessments are then examined by a Financial Risk Committee set up by the Parent Company.
With regard to the Parent Company, financial transactions primarily regard BancoPosta’s operations and transactions
involved in the funding of assets and the investment of the Company’s own liquidity. BancoPosta’s operations are governed
by Presidential Decree 144/2001. From 2 May 2011 BancoPosta has ring-fenced capital, as approved by the General Meeting
of 14 April 2011 for the purposes of applying the Bank of Italy’s capital adequacy requirements and the protection of
creditors, pursuant to art. 2 (paragraphs 17-octies to 17-duodecies) of the so-called “Milleproroghe” (“Thousand
Extensions”) Decree, converted into Law 10 of 26 February 2011. Poste Italiane SpA attributred 1 billion euros of retained
earnings to BancoPosta RFC for the creation of ring-fenced capital. BancoPosta RFC’s operations consist of the investment
of cash held in postal current accounts invested in the name of BancoPosta but subject to statutory restrictions, and
collections and payments on behalf of third parties.
BancoPosta is required to invest postal current account deposits by private customers in euro zone government securities,
whilst deposits by Public Sector entities are deposited with the Ministry of Finance and Economy. During 2011 BancoPosta
was engaged in reinvesting the funds deriving from maturing government securities and in the trading of securities
designed to progressively match the maturity profile of the portfolio with the investment model adopted by the Parent
Company in 2010. The new maturity profile was developed based, among the other things, on a leading market operator’s
statistical/econometric model that reflects the interest rates and maturities typical of postal current accounts. The model
is also used as the basis for investment policies in order to limit exposure to rate and liquidity risks by foreseeing
mismatches caused by the need to marry the exigencies of risk management with those of improving returns which are
dependent on the ever changing yield curve.
On the other hand, operations not covered by BancoPosta RFC, primarily regarding management of the Parent Company’s
own liquidity, are carried out in accordance with investment guidelines approved by the Board of Directors, which require
the Parent Company to invest in instruments such as government securities, high-quality corporate or bank bonds and term
bank deposits. Liquidity is also deposited in postal current accounts, with the resulting deposits subject to the same
requirements as apply to the investment of deposits by private current account holders.
With regard to cash flow management within the Group, a centralised treasury management system enables the automatic
elimination of co-existing large debit and credit balances attributable to individual companies, offering the Group advantages
in terms of improved liquidity management and a reduction in the related risk. The system includes the five main
subsidiaries and makes use, via the banking channel, of zero balance cash pooling. In this way cash flows between the
current accounts of subsidiaries and the Parent Company are transferred on a daily basis.
The Group’s business is by its nature exposed to elements of reputational risk, associated mainly with the placement of
index-linked bonds issued by other credit institutions and/or insurance policies issued by Poste Vita SpA. In this respect, in
July 2008, in accordance with the Markets in Financial Instruments Directive by the EU (Directive 2004/39/EC, “MiFID”),
the Parent Company adopted the “consulting service” model, which is currently being implemented.
The financial instruments held by the insurance company, Poste Vita SpA, primarily regard investments designed to cover
its contractual obligations to policyholders who have taken out classic with profit life policies and index-linked and unit-linked
policies. Other investments in financial instruments regard investment of the insurance company’s free capital.
Poste Vita SpA’s financial risks relate to separately managed accounts in the Branch I category sold by the company and,
as is typical in the insurance business, deriving from the guaranteed minimum returns on investment to be paid to
policyholders, and the potential impact on the financial statements of the measurement of the assets in which the technical
provisions are invested.
In contrast, index- and unit-linked products, relating to so-called Branch III insurance products, regard policies where the
premium paid is invested in structured financial instruments, Italian government securities, warrants and mutual investment
funds. For this type of product, issued prior to the introduction of ISVAP Regulation 32/2009, the company does not
guarantee capital or a minimum return and, as such, the financial risks associated with them are borne almost entirely by
the customer. However, in the case of policies issued after the introduction of the regulations, the company assumes sole
liability for solvency risk associated with the instruments in which premiums are invested. The company continuously
monitors changes in the risk profile of individual products, focusing above all on the risk linked to the insolvency of issuers.
The crisis of recent years has had profound effects on the performance of all the financial instruments on the market and,
in the second half of 2011, on the value of Italian government securities, which account for a large part of the Group’s
investments. Even though the Group has developed over time prudential policies in the customers’ best interests, entailing
the selection of domestic and foreign issuers solely with investment grade ratings, the situation has prompted even closer
scrutiny at Group level, so as to ensure full awareness of the performance of the products placed and the risks for
customers.
Sovereign risk, in fact, became a major component of market risk during 2011, due to the importance of the impact of the
spreads applicable to government securities on the fair value of euro zone government securities. The performance of
spreads during the year resulted in a reduction in the fair value of these securities, only partially offset by a decline in riskfree interest rates during the same period.
Further information on financial risk management is provided in the notes to the consolidated and separate financial
statements for the year ended 31 December 2011 (note 3 in both documents).
REGULATORY RISK
Given that the Group operates in a range of different sectors (postal, integrated communication services, logistics,
financial), it is subject to numerous laws and regulations (specific laws and regulations, including tax and environmental
legislation, and regulations issued by regulatory authorities). Compliance with these laws and regulations requires ongoing
adjustments to internal processes and procedures, their application to market offerings, initiatives designed to prevent
external disputes and appropriate staff training, to list only a few. Regulatory compliance is the responsibility of specific
units within the various departments, in addition to the Legal Affairs function.
Corporate Affairs also carries out ongoing analysis and assessment of acts of parliament and government policies and of
legislation in general, keeping other functions within the Company promptly informed. This function also lobbies for
changes to amendments to legislation or to laws in force.
36
RISKS CONNECTED TO THE MANAGEMENT OF HUMAN RESOURCES
The significance of the Company’s staff costs means that any changes in legislation, regarding contributions or other staffrelated matters, can have a substantial impact on its operating results.
In addition, the Company continues to be involved in labour disputes regarding its use of fixed-term contracts. This has
resulted in a number of important labour union agreements designed to resolve the situation.
Achievement of the Company’s objetives is dependent on the ongoing development of its staff through training courses
and e-learning initiatives designed to enhance the professional skills of the Company’s employees.
OTHER OPERATIONAL RISKS
A number of post offices experienced problems with their information systems in early June 2011, resulting in temporary
disruption to services. Poste Italiane has taken steps to ensure that all post offices are once again fully operational and has
announced its willingness, in agreement with consumers’ associations, to honour claims from customers who can provide
documentary proof of any damages incurred.
Certain trading relations are governed by specific agreements and contracts. Negotiations regarding the related financial
conditions and other aspects of their renewal are often complex.
In the case of certain services regulated by legislation and specific agreements or contracts (the Universal Service, electoral
tariff subsidies, publisher tariff subsidies), for which the government has undertaken to reimburse a part of the costs
incurred by the Company, the amounts payable to Poste Italiane SpA are not always covered by provisions set aside in the
government’s budget.
3.2 OPERATING RESULTS
Following the establishment of BancoPosta RFC, certain components of the statement of financial position at 31 December
2011, a number of items in the income statement and the related notes have been reclassified with respect to previous
statements. In order to provide a like-for-like basis for comparison with 2010, and in accordance with the requirements of
paragraph 39 of IAS 1 – Presentation of Financial Statements, amounts in the statements of financial position at 31
December 2010 and 2009 and items in the statement of cash flows for 2010 have also been reclassified.
This section provides a summary of the operating results, financial position and cash flow of the Poste Italiane Group and
the Parent Company, Poste Italiane SpA, in 2011.
INCOME STATEMENT
(€m)
Increase/(Decrease)
Poste Italiane SpA
Year ended 31 Dec
Year ended 31 Dec
Increase/(Decrease)
%
Amount
2010
2011
2011
2010
Amount
%
(0.2)
0.2
(5.3)
(16.2)
(0.7)
1.2
(25)
21
(105)
(35)
(144)
30
10,134
9,505
1,982
216
21,837
2,598
10,109
9,526
1,877
181
21,693
2,628
9,572
n/a
281
169
10,022
1,983
(104)
n/a
(156)
(3)
(263)
(40)
(1.1)
n/a
(55.5)
(1.8)
(2.6)
(2.0)
(3.0)
n/s
(1.8)
(0.5)
23.1
(10.1)
(303)
507
(109)
(3)
(9)
(28)
10,190
388
6,005
547
(39)
278
9,887
895
5,896
544
(48)
250
Revenues from sales and services
9,468
Earned premiums
n/a
Other income from financial and insurance activities 125
Other operating income
166
Total revenue
9,759
Cost of goods and services
1,943
Net change in technical provisions for insurance
business and other claims expenses
n/a
Other expenses from financial and insurance activities 22
Staff costs
5,681
Depreciation, amortisation and impairments
475
Capitalised costs and expenses
(8)
Other operating costs
244
n/a
5
5,821
494
(9)
276
n/a
17
(140)
(19)
1
(32)
n/a
n/s
(2.4)
(3.8)
(11.1)
(11.6)
(12.2)
(229)
1,870
1,641
1,402
1,452
(50)
(3.4)
(8.1)
(10.6)
(13)
(19)
161
179
148
160
146
135
158
144
(12)
(9)
(7.6)
(6.3)
n/s
1
-
1
n/a
n/a
n/a
n/a
(12.4)
(234)
1,888
1,654
1,391
1,438
(47)
(3.3)
(7.1)
(16.9)
(62)
(172.0)
870
1,018
808
846
692
699
709
729
(17)
(30.0)
(2.4)
(4.1)
Operating Profit/(Loss)
Finance costs
Finance income
Profit/(Loss) on investments accounted
for using the equity method
Profit/(Loss) before tax
Income tax expense
Profit for the year(*)
n/a: not applicable
(*)
Profit is entirely attributable to owners of the Parent, and no portion is attributable to non-controlling interests.
38
OPERATING RESULTS OF THE POSTE ITALIANE GROUP
Revenue by operating segment(*)
Total revenue
(€m)
Postal Services
Increase/(Decrease)
2010
2011
Amount
%
5,065
4,810
(255)
(5.0)
Financial Services
4,946
5,003
57
1.2
Insurance Services
11,206
11,278
72
0.6
Other Services
Total Poste Italiane Group
(*)
620
602
(18)
(2.9)
21,837
21,693
(144)
(0.7)
After consolidation adjustments and elimination of intercompany transactions.
Group - Total revenue (€m)
22,000
-2.9%
+16.8%
20,000
18,000
16,000
14,000
12,000
+19.5%
+0.6%
-0.4%
+1.2%
-3.1%
-5.0%
10,000
8,000
6,000
4,000
2,000
0
2009
2010
2011
Postal Services
Insurance Services
Financial Services
Other Services
Revenues from sales
and services
(€m)
2010
Other income from
financial and
insurance activities
Earned premiums
2011
%
inc./(dec.)
2010
%
2011 inc./(dec.)
2010
Other operating
income
%
2011 inc./(dec.)
2010
2011
%
inc./(dec.)
20.0
Postal Services
5,050
4,792
(5.1)
-
-
-
-
-
-
15
18
Financial Services
4,665
4,878
4.6
-
-
-
281
125
(55.5)
-
-
-
-
-
-
9,505
9,526
0.2
1,701
1,752
3.0
-
-
-
Other Services
419
439
4.8
-
-
-
-
-
-
201
163
(18.9)
Total Poste
Italiane Group
10,134
10,109
(0.2)
9,505
9,526
0.2
1,982
1,877
(5.3)
216
181
(16.2)
Insurance Services
Postal Services
(€m)
Poste Italiane SpA
intercompany revenues
Poste Italiane SpA - external revenue
SDA Express Courier SpA
SDA Express Courier SpA - external revenue
Postel Group
Postel Group - external revenue
Italia Logistica srl
Italia Logistica srl - external revenue
Mistral Air Srl
Mistral Air Srl - external revenue
Total external revenue
Total revenue
Increase/(Decrease)
2010
2011
Amount
%
4,222
(267)
(5.9)
323
26
8.8
232
(15)
(6.1)
32
1
3.2
1
1
0
n/s
5,065
4,810
(255)
(5.0)
4,505
16
4,240
18
4,489
438
141
441
118
297
411
164
400
168
247
44
13
46
14
31
42
41
37
36
Very briefly, whilst in certain cases registering a deterioration with respect to 2010, the operating results are satisfactory
given the unfavourable market conditions and changes in the regulatory framework. Indeed, despite the natural decline in
revenues from postal services, the absence of publisher tariff subsidies and difficulties in the public finances that have had
an impact on income and the collection of amounts receivable from the government, the Group recorded a sound performance. Moreover, the Group outperformed the market in a number of sectors in which it operates, with positive performances from financial services, the insurance services provided by the PosteVita group, which saw an improvement in its
results, and the telecommunications services offered by Poste Mobile, which saw gross customer acquisitions increase
more than 5% faster than the market.
The Poste Italiane Group’s Total revenue for 2011, amounting to 21,693 million euros, is down 0.7% on the 21,837 million euros
of 2010. This primarily reflects the natural decline in revenues from postal services and a reduction in government subsidies,
partly offset by increased income from the financial services offered by BancoPosta and from insurance services.
Total revenues from Postal Services are down from 5,065 million euros in 2010 to 4,810 million euros in 2011. As noted
above, this reflects the impact of an ongoing decline in demand for mail services, progressive growth in digital communication and even tougher competition following the entry into effect of Legislative Decree 58/2011, which marks completion
of the process of deregulating the European postal market. The results for this segment also reflect lower revenues in the
form of electoral tariff subsidies and the absence of publisher tariff subsidies following changes in the related legislation,
which abolished the subsidies from 1 April 2010, resulting in a reduction in the volume of mail sent by this category of customer.
Financial Services contributed 5,003 million euros to total revenue (4,946 million euros in 2010), with good growth in revenues from sales and services (up 213 million euros on 2010) partially offset by a decline in other income from financial
activities (down 156 million euros on 2010).
As noted above, Insurance Services made a positive contribution to revenue, with revenues up from 11,206 million euros
in 2010 to 11,278 million euros in 2011, despite the insurance market suffering the effects of the fallout from the current
economic and financial crisis. This has led to a reversal of the growth trend seen over the previous two years, with 2011
registering a fall of approximately 25% in new business for both traditional Branch I insurance products and investment
contracts. Against this backdrop, Poste Vita recorded a good performance, with 9,526 million euros in earned premiums
(9,505 million euros in 2010) at consolidated level and net of outward reinsurance premiums.
40
Revenues from Other Services, which are generated by ordinary activities not directly related to the Postal, Financial and
Insurance segments, regard, among other things:
• 209 million euros (162 million euros in 2010) in revenues generated by PosteMobile SpA from mobile telecommunications
services;
• 73 million euros (43 million euros in 2010) in revenues from the air transport services provided by Mistral Air Srl;
• 60 million euros (81 million euros in 2010) in revenues deriving from activities normally carried out by the Parent Company,
linked, for example, to services provided by its Contact Centres or to the collection of applications for residence permits;
• 46 million euros (54 million euros in 2010) in revenues from the sale of goods through the “Shop in Shop” channel.
COST ANALYSIS
Costs
(€m)
Net change in technical provisions for insurance business and other claims expenses
Other expenses from financial and insurance activities
Staff costs
2010
2,598
10,190
388
6,005
547
(39)
278
2011
2,628
9,887
895
5,896
544
(48)
250
% inc./(dec.)
1.2
(3.0)
n/s
(1.8)
(0.5)
23.1
(10.1)
Tortal costs
19,967
20,052
0.4
Costs and other charges of 20,052 million euros in 2011 are up 85 million euros on the figure for 2010 (19,967 million euros).
The principal changes regard:
• a reduction in technical provisions for the insurance business (down 303 million euros compared with 2010), reflecting,
despite an increase in earned premiums during the year and in the related mathematical provisions, the negative performance of “Class D” investments, reflected in changes in the matching technical provisions;
• a 507 million euro rise in other expenses from financial and insurance activities, primarily due to an increase in impairments following the fair value measurement of financial instruments attributable to the portfolio held by the subsidiary,
Poste Vita, and mainly reflecting the impact of the worsening financial crisis on the market for Italian government securities;
• the reduction of 109 million euros in staff costs described below.
Staff costs
(€m)
Salaries, social security contributions and sundry expenses
Redundancy payments
Net provisions for disputes
Provisions to the Solidarity Fund
Total
Income from fixed-term contract agreement
Total Staff costs
Increase/(Decrease)
(*)
2010
5,806
157
49
59
6,071
(66)
6,005
2011
5,613
287
110
(59)
5,951
(55)
5,896
Amount
(193)
130
61
(118)
(120)
11
(109)
%
(3.3)
82.8
n/s
n/s
(2.0)
(16.7)
(1.8)
This includes the following items reported in note 33 to the consolidated financial statements: salaries and wages; social security contributions; staff
termination benefits; temporary work; Directors’ fees and expenses; other costs (cost recoveries).
(*)
As noted above, staff costs are down 1.8% from 6,005 million euros in 2010 to 5,896 million euros in 2011. In detail, the
ordinary component of staff costs, relating to salaries, wages and sundry expenses, is down 3.3% from 5,806 million euros
in 2010 to 5,613 million euros in 2011. This is a result of close attention to the Group’s staffing needs, leading to a reduction
in the average workforce during the year (approximately 3,400 fewer full-time equivalents on average in 2011, compared
with 2010), and the release of provisions for charges connected to staff costs made in previous years and no longer necessary.
Redundancy charges and the cost of income support provided to staff taking early retirement are up 130 million euros on
the previous year. These charges are entirely attributable to the Parent Company and take account of recent reform of the
legislation governing access to old age pensions.
Net provisions for disputes, which essentially cover the liabilities to be incurred by the Parent Company in relation to the
dispute over fixed-term contracts, are up from 49 million euros in 2010 (this figure was influenced by the release of provisions made in previous years and no longer necessary) to 110 million euros in 2011. The provisions take account of both the
overall amount of claims payable (as a result of court rulings and union agreements) and the application of Law 183 of 4
November 2010 (the so-called Collegato lavoro legislation), which has introduced a cap on compensation payable as a result
of current and future claims brought by workers on fixed-term contracts who have been re-employed on permanent contracts by court order.
Provisions of 59 million euros to the solidarity fund, made by the Parent Company in 2010 following a number of union
agreements, were released in full to the income statement. This is due to the fact that the deadline for accessing the special income support, provided for in the regulations governing the Solidarity Fund, managed by INPS in accordance with
Ministerial Decree 178 of 1 July 2005, expired in September 2011.
Finally, staff costs also reflect income deriving from fixed-term contract agreements, amounting to 55 million euros (66 million euros in 2010). This income reflects staff signing up during the year to the agreement of July 2010 between the Parent
Company and the labour unions, regarding the re-employment by court order of staff previously employed on fixed-term
contracts.
The above performance of revenues and costs has resulted in Operating profit of 1,641 million euros (1,870 million euros
in 2010), as shown in the following table.
Operating profit: operating segments(*)
Increase/(Decrease)
(€m)
Postal Services
Financial Services
Insurance Services
Other Services
Eliminations(**)
2010
(153)
1,390
436
197
-
2011
(263)
1,420
367
116
1
Amount
(110)
30
(69)
(81)
1
%
71.9
2.2
(15.8)
(41.1)
n/s
Total Poste Italiane Group
1,870
1,641
(229)
(12.2)
(*)
Determined on the basis of the accounting unbundling regime required by art. 7.c.1 of Legislative Decree 261/99, after consolidation adjustments and
elimination of intercompany transactions.
(**)
Elimination of cost incurred by the Parent Company for interest paid to consolidated subsidiaries (recognised by the latter in finance income).
After net finance income of 13 million euros (18 million euros in 2010), Profit before tax amounts to 1,654 million euros
(1,888 million euros for 2010).
Income tax expense is down from 870 million euros for 2010 to 808 million euros in 2011, representing a tax rate of 48.9%
(46.1% in 2010).
Profit for the year is 846 million euros (1,018 million euros for 2010).
42
OPERATING RESULTS OF POSTE ITALIANE SPA
(€m)
Mail and Philately
Total market revenues from Postal Services(*)
BancoPosta services
Other revenues
Market revenues
Universal Service Obligation (USO) subsidies(*)
Tariff subsidies(*)
Total Poste Italiane SpA
(*)
Market revenues from Postal Services
USO subsidies
Tariff subsidies
(**)
Total Postal Services
(**)
Increase/(Decrease)
2010
3,855
161
4,016
4,962
105
9,083
364
125
9,572
2011
3,725
135
3,860
5,141
87
9,088
357
23
9,468
4,016
3,860
364
357
125
23
4,505
4,240
Amount
(130)
(26)
(156)
179
(18)
5
(7)
(102)
(104)
%
(3.4)
(16.3)
(3.9)
3.6
(17.1)
0.1
(1.9)
(81.6)
(1.1)
(265)
(5.9)
Subsidies for services provided at discounted rates under the relevant legislation.
Poste Italiane SpA’s Revenues from sales and services amount to 9,468 million euros, down 1.1% on the previous year
(9,572 million euros in 2010).
Market revenues are up 0.1% from the 9,083 million euros of 2010 to 9,088 million euros in 2011. The natural decline in
revenues from postal services (down 156 million euros compared with 2010) was offset by a good performance from
BancoPosta services (up 179 million euros on 2010), thanks to an increase in interest rates received on the current account
deposits that the Company must deposit with the Ministry of the Economy and Finance (the MEF) which, however, led to
a reduced contribution from financial activities.
Within the Postal Services segment, Mail and Philately saw a fall in volumes and revenues (down 130 million euros on
2010). This was primarily the result of a reduction in Unrecorded Mail and Direct Marketing volumes due, among other
things, to a decline in electoral mailings and a reduction in mailings by major customers, partly reflecting the wellestablished presence of competing providers, who have benefitted from the further deregulation of the postal services
market introduced by Legislative Decree 58/2011.
BancoPosta’s market revenues are up 3.6% from the 4,962 million euros of 2010 to 5,141 million euros in 2011, reflecting
growing returns on the investment of current account deposits.
Universal Service Obligation (USO) subsidies of 357 million euros were calculated on the basis of the Contratto di
Programma (Planning Agreement) for 2009-2011, signed by the Ministry for Economic Development and Poste Italiane in
November 2010 and finally approved by Law 183 of 12 November 2011, the 2012 Legge di Stabilità (Economic Stability
Law)11 .
Tariff subsidies of 23 million euros (125 million euros in 2010) refer entirely to discounts granted to election candidates,
whilst no publisher tariff subsidies were received following changes in the related legislation.
Total revenue of 9,759 million euros (10,022 million euros in 2010) also includes 125 million euros in other income from
financial activities attributable to BancoPosta RFC (281 million euros in 2010) and 166 million euros (169 million euros in
2010) in other operating income.
11. The planning agreement is effective, subject to notification to the European Commission of the payment of state aid to Poste Italiane in order to cover the
costs of Universal Service provision.
COST ANALYSIS
Costs
(€m)
Other expenses from financial activities
Staff costs
Total costs
2010
2011
% inc./(dec.)
1,983
1,943
(2.0)
5
22
n/s
5,821
5,681
(2.4)
494
475
(3.8)
(9)
(8)
(11.1)
276
244
(11.6)
8,570
8,357
(2.5)
An analysis of costs and other charges shows a reduction of 2.5% from 8,570 million euros in 2010 to 8,357 million euros
in 2011. This reflects a reduction in the cost of goods and services (down 40 million euros on 2010), as a result of close
monitoring and effective costs controls in line with the Company’s long-standing commitment to containing such costs,
and a decrease in Staff costs (down 140 million euros on 2010), as described below.
Other operating costs of 244 million euros (276 million euros in 2010) are down following the release of provisions for
doubtful debts, reflecting the probable collection of items originally deemed unlikely to be recovered.
Staff costs break down as follows.
Staff costs
(€m)
Salaries, social security contributions and sundry expenses(*)
Redundancy payments
Increase/(Decrease)
2010
2011
Amount
%
5,624
5,407
(217)
(3.9)
157
287
130
82.8
Net provisions for disputes
47
101
54
n/s
Provisions to the Solidarity Fund
59
(59)
(118)
n/s
5,887
5,736
(151)
(2.6)
(66)
(55)
11
(16.7)
5,821
5,681
(140)
(2.4)
Total
Income from fixed-term contract agreement
Total Staff costs
(*)
This includes the following items reported in note 29 to the separate financial statements: salaries and wages; social security contributions; staff termination
benefits; temporary work; Directors’ fees and expenses; other costs (cost recoveries).
The ordinary component of staff costs, relating to salaries, wages and sundry expenses, is down 3.9% from the 5,624
million euros of 2010 to 5,407 million euros in 2011, primarily due to a reduction in the average workforce during the year
(over 3,700 fewer full-time equivalents, or FTEs, compared with 2010), the release of provisions for charges connected to
staff costs made in previous years and no longer necessary, and the reduced use of fixed-term staff. In this regard, the
Company recruited 8,944 people on fixed-term contracts in 2011 (10,979 in 2010), equal to 8,702 FTEs (10,176 FTEs in
44
2010), of which 8,751 correspond to 8,509 FTEs pursuant to art. 2, paragraph 1-bis of Legislative Decree 368/200112. The
permanent workforce at 1 January 201113 amounted to 146,459 (147,753 at 1 January 2010), equal to 142,171 FTEs (144,902
FTEs at 1 January 2010).
There was an increase in redundancy charges and the cost of income support provided to staff taking early retirement (287
million euros in 2011, compared with 157 million euros in 2010).
As previously described in the analysis of the Group’s staff costs, net provisions for disputes total 101 million euros for 2011,
compared with 47 million euros in 2010 (this figure was influenced by the release of provisions made in previous years and
no longer necessary). The provisions, which largely regard the dispute over fixed-term contracts, take account of both the
overall amount of claims payable (as a result of court rulings and union agreements) and the application of Law 183 of 4
November 2010 (the so-called Collegato lavoro legislation), which has introduced a cap on compensation payable as a result
of current and future claims brought by workers on fixed-term contracts who have been re-employed on permanent
contracts by court order.
Provisions of 59 million euros to the solidarity fund, made in 2010 following a number of union agreements, were released
in full to the income statement. This is due to the fact that the deadline for accessing the special income support, provided
for in the regulations governing the Solidarity Fund, managed by INPS in accordance with Ministerial Decree 178 of 1 July
2005, expired in September 2011.
Finally, staff costs also reflect income deriving from fixed-term contract agreements, amounting to 55 million euros (66
million euros in 2010). This income reflects staff signing up during the year to the agreement of July 2010 between the
Parent Company and the labour unions, regarding the re-employment by court order of staff previously employed on fixedterm contracts.
After net finance income, Profit before tax from ordinary activities amounts to 1,391 million euros (1,438 million euros for
2010).
Income tax expense is down from 709 million euros in 2010 to 692 million euros in 2011. The effective tax rate has risen
from 49.30% for 2010 to 49.77% for 2011, primarily reflecting an increase in the IRAP rate for companies that operate
under concession (4.20% in 2011, compared with 3.90% in 2010).
The Company reports a profit for 2011 of 699 million euros (729 million euros for 2010).
12. 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 in the year in which the staff are recruited.
13. The workforce at 1 January of each year is identical to the workforce at 31 December of the previous year.
3.3 FINANCIAL POSITION AND CASH FLOW
Following the establishment of BancoPosta RFC, certain components of the statement of financial position at 31 December
2011, a number of items in the income statement and the related notes have been reclassified with respect to previous
statements. It was necessary to adopt the reclassifications in both Poste Italiane SpA’s separate financial statements and
in the consolidated financial statements.
FINANCIAL POSITION AND CASH FLOW OF THE POSTE ITALIANE GROUP
The Poste Italiane Group’s Net invested capital amounts to 4,046 million euros (3,326 million euros at 31 December 2010),
71% financed by Equity and 29% by net debt.
(€m)
Non-current assets
Working capital
Staff termination benefits and pension plans
Note(*)
[22]
(*)
31 Dec 2010
3,654
995
(1,323)
31 Dec 2011
3,516
1,726
(1,196)
Increase/(Decrease)
(138)
731
127
3,326
4,046
720
31 Dec 2010
2,957
163
521
7
6
31 Dec 2011
2,789
149
558
10
10
Increase/(Decrease)
(168)
(14)
37
3
4
3,654
3,516
(138)
Notes to the consolidated financial statements.
Non-current assets break down as follows at 31 December 2011 and 2010:
(€m)
Property, plant and equipment
Investment property
Intangible assets
Investments accounted for using the equity method
Non-current assets held for sale
Non-current assets
(*)
Note(*)
[5]
[6]
[7]
[8]
[15]
Compared with the situation at the end of 2010, Non-current assets are down 137.6 million euros as a result of reductions
of 557.5 million euros and additions totalling 419.9 million euros.
Reductions regard:
• depreciation, amortisation and impairments, totalling 544.2 million euros, of which 370.1 million euros regards Property,
plant and equipment, 166.9 million euros Intangible assets and 7.2 million euros depreciation and impairments of
Investment property, after reversals of impairments;
• sales of Investment property, totalling 7.7 million euros, of Property, plant and equipment, amounting to 4.3 million euros,
and of Intangible assets, totalling 1.1 million euros;
• sales of industrial properties owned by the Parent Company and accounted for in Non-current assets held for sale,
amounting to 0.2 million euros;
Additions regard:
• investment in Property, plant and equipment, amounting to 210.2 million euros, primarily by the Parent Company and
largely attributable to the purchase of new hardware for the Group’s post offices and headquarters premises and to the
modernisation and upgrade of the post office network and other industrial sites;
46
• investment in Intangible assets, amounting to 204.8 million euros, regarding the development of software both within the
Group for use in its IT platform, and by the Parent Company for use by BancoPosta;
• Investments accounted for using the equity method, which has registered a net increase of 2.6 million euros, including:
2 million euros relating to the merger of CSAB Printing Srl with and into Docugest SpA; 500 thousand euros to a capital
contribution from SDA Express Courier SpA to Kipoint SpA; 58 thousand euros to subscription of the capital increase carried out by Postel do Brasil Ltda, prior to the company’s liquidation14;
• purchases of Investment property, amounting to 1.2 million euros;
• adjustments of 0.9 million euros;
• a change in the basis of consolidation, totalling 0.2 million euros.
Working capital of breaks down as follows at 31 December 2011 and 2010:
(€m)
Inventories
Trade receivables and other current assets
Trade payables and other current liabilities
Current and deferred tax assets and liabilities
Provisions for liabilities and charges
31 Dec 2010
44
4,440
(3,326)
474
(1,327)
31 Dec 2011
47
4,567
(3,550)
1,455
(1,549)
Increase/(Decrease)
3
127
(224)
981
(222)
Trade receivables and Other non-current assets and liabilities [11] [12] [25]
690
756
66
Working capital
995
1,726
731
(*)
Note(*)
[10]
[11] [12]
[24] [25]
[38]
[21]
Working capital of 1,726 million euros is up 731 million euros compared with the end of 2010. The increase is essentially
due to the following:
• an increase in the balance of Other non-current assets and liabilities, amounting to 127 million euros, reflecting the delay
in collecting amounts due to the Parent Company from the Ministry of the Economy and Finance in the form of Universal
Service subsidies. However, the balance takes account of the sum of 324 million euros deposited by the Ministry of the
Economy and Finance, as of December 2011, in a non-interest bearing escrow account held by the Parent Company at
the Italian Treasury and corresponding to Universal Service subsidies accruing in previous years. This sum cannot be
released until the European Commission has ruled on the Contratto di Programma (Planning Agreement) for 2009-2011,
and until the Ministry has replenished its cash holdings;
• an increase in the net balance of Trade payables and other current liabilities, totalling 224 million euros, due, despite a
reduction in current liabilities, to the amount accounted for in Advances received from the MEF, as described above;
• an increase of 981 million euros in net Current and deferred tax assets, reflecting fair value losses on investments in securities attributable to BancoPosta RFC, as described below, and, to a lesser extent, on investments in securities attributable to Banca del Mezzogiorno – MedioCredito Centrale SpA and BancoPosta Fondi SGR, in addition to the future
deductibility of certain provisions for liabilities;
• an increase in Provisions for liabilities and charges, totalling 222 million euros, representing the balance of new provisions/changes in the basis of consolidation, totalling 690 million euros, and uses/releases/finance costs of 468 million
euros, primarily relating to liabilities linked to staff costs and disputes with personnel.
At 31 December 2011 Equity amounts to 2,848.2 million euros (4,383 million euros at 31 December 2010) and breaks down
as follows:
• Share capital
1,306.1 million euros
• Reserves
(1.096.5) million euros
• Retained earnings
2,638.6 million euros.
14. On 11 April 2011 the capital increase of 1.2 million euros was subscribed to via the conversion of all the receivables due to Postel SpA from the Brazilian
subsidiary and written off in previous years and via a cash payment of 58 thousand euros. The value of the investment was written down by 58 thousand
euros at the same time.
Compared with 31 December 2010, Equity has decreased by 1,534,8 million euros due to the following changes.
Reductions:
• changes in the fair value reserves, amounting to 1,928.7 million euros net of tax, reflecting movements in the value of
investments in securities attributable to BancoPosta RFC, as described in the paragraph dealing with changes in the
Parent Company’s Equity, and to a lesser extent, investments in securities attributable to Banca del Mezzogiorno –
MedioCredito Centrale SpA and BancoPosta Fondi SGR;
• the payment of dividends to the shareholder, totalling 350 million euros;
• changes in the cash flow hedge reserves, amounting to 148.3 million euros net of tax.
Additions:
• profit for the year of 846.4 million euros;
• the balance of actuarial gains and losses on provisions for staff termination benefits, totalling 45.8 million euros net of
tax.
Net debt/(funds) at 31 December 2011 is summarised below:
(€m)
Financial liabilities
- Postal current account deposits
- Financial assets at fair value
- Bonds
- Loans from Cassa Depositi e Prestiti
- Bank borrowings
- Other borrowings
- Derivative financial instruments
- Other(**)
Technical provisions for insurance business
Financial assets
- Loans and receivables
- Held-to-maturity financial assets
- Available-for-sale financial assets
- Financial instruments at fair value through profit or loss
Technical provisions for claims attributable to reinsurers
Net liabilities/(assets)
Cash and deposits attributable to BancoPosta
Cash and cash equivalents
Net debt/(funds)
(*)
(**)
Note (*)
31 Dec 2010
31 Dec 2011
Increase/(Decrease)
[23]
42,481
36,985
722
770
513
1,339
60
90
2,002
41,739
(81,825)
(8,071)
(14,768)
(47,571)
(11,198)
(217)
(8)
2,387
(2,351)
(1,093)
(1,057)
45,152
37,145
59
1,366
533
2,904
39
643
2,463
44,260
(83,733)
(9,343)
(14,364)
(50,152)
(9,642)
(232)
(18)
5,661
(2,560)
(1,903)
1,198
2,671
160
(663)
596
20
1,565
(21)
553
461
2,521
(1,908)
(1,272)
404
(2,581)
1,556
(15)
(10)
3,274
(209)
(810)
2,255
[20]
[9]
[12]
[13]
[14]
Includes financial liabilities payable to subsidiaries and other financial liabilities.
48
Cash and cash equivalents includes the sum of 324 million euros deposited by the Ministry of the Economy and Finance, as of
December 2011, in a non-interest bearing escrow account as an advance on Universal Service subsidies and a total of 17.8 million
euros that cannot be drawn on due to court rulings regarding various disputes.
The change from net funds to net debt in 2011 reflects the impact of the downgrade of Italy’s credit rating on the price of availablefor-sale investments attributable to BancoPosta RFC.
Liquidity at 31 December 2011 amounts to 1,903 million euros (1,093 million euros at the end of 2010).
(€m)
2010
2011
Cash and cash equivalents at beginning of year
2,039
1,093
Cash flow from/(for) operating activities
(397)
958
Cash flow from/(for) investing activities
(680)
79
Cash flow from/(for) financing activities
631
123
Cash flow from/(for) shareholder transactions
(500)
(350)
Net change in cash
(946)
810
Cash and cash equivalents at end of year
1,093
1,903
-
(324)
Amounts that cannot be drawn on due to court rulings
Escrow account held at the Italian Treasury
(27)
(18)
Current account overdrafts
(12)
(15)
1,054
1,546
Unrestricted net cash and cash equivalents at end of year
FINANCIAL POSITION AND CASH FLOW OF POSTE ITALIANE SPA
Poste Italiane SpA’s Net invested capital amounts to 4,741 million euros (3,616 million euros at 31 December 2010), which is
42% financed by Equity and 58% by net debt.
(€m)
Non-current assets
Working capital
Staff termination benefits
(*)
Notes to the separate financial statements.
Note(*)
[19]
31 Dec 2010
4,276
638
(1,298)
31 Dec 2011
4,567
1,337
(1,163)
Increase/(Decrease)
291
699
135
3,616
4,741
1,125
Non-current assets break down as follows at 31 December 2011 and 2010:
(€m)
Investment property
Intangible assets
Investments
Non-current assets
(*)
Note(*)
[4]
[5]
[6]
[7]
[14]
31 Dec 2010
2,806
92
358
1,017
3
31 Dec 2011
2,621
80
371
1,488
7
Increase/(Decrease)
(185)
(12)
13
471
4
4,276
4,567
291
Compared with the situation at the end of 2010, Non-current assets report a net increase of 290.8 million euros, following
additions of 821.5 million euros and reductions of 530.7 million euros.
Additions regard:
• the acquisition of Investments, totalling 478 million euros, including: 305 million euros relating to subscription of the capital
increase carried out by Poste Vita SpA; 140 million euros to the acquisition of the entire share capital of Unicredit MedioCredito
Centrale SpA15; 30 million euros to subscription of the capital increase carried out by the subsidiary, PosteMobile SpA, via the
contribution of Poste Italiane SpA’s Telecommunications unit on 31 March 2011; 3 million euros to the contribution paid to Mistral
Air Srl to cover losses incurred in the six months ended 30 June 2011;
• investment in Property, plant and equipment, amounting to 189.1 million euros, Intangible assets, totalling 154.2 million euros,
and Investment property, amounting to 0.2 million euros, with 57% regarding information technology and telecommunications
networks, 12.5% postal logistics and 30.5% the modernisation and upgrade of properties.
Reduction regard:
• depreciation, amortisation and impairments of 475.6 million euros, which includes 334.4 million euros relating to depreciation
of Property, plant and equipment, 136.9 million euros to amortisation of Intangible assets and 4.3 million euros regarding di
depreciation of Investment property, after reversals of impairments;
• sales of Property, plant and equipment, totalling 35.2 million euros, mainly linked to the contribution of the Telecommunications
unit to the subsidiary, PosteMobile, consisting of network infrastructure and technology, for the most part already in use and in
some cases not yet used in operations;
• sales of Investment property, totalling 7.7 million euros;
• adjustments of 7.2 million euros reflecting recognition of an impairment loss on the investment in Postel SpA based on the outcome of an impairment test and available information regarding the company’s outlook;
• sales of Intangible assets, totalling 4,6 million euros, primarily linked to Poste Italiane’s contribution of its Telecommunications
unit to PosteMobile. These assets consisted for the most part of software applications already in use and in some cases not yet
used in operations;
• sales of Non-current assets held for sale, totalling 0.2 million euros;
• reductions in Investments of 0.2 million euros, following the sale16 to Postel, on 29 March 2011, of Poste Italiane’s 70% interest in Poste Link Scrl.
15. On 21 November the bank changed its name to “Banca del Mezzogiorno – MedioCredito Centrale SpA” (in abbreviated form: “BdM - MCC SpA”).
16. On 29 March 2011 Postel SpA acquired, becoming the sole shareholder, the equity interests in Poste Link Scrl formerly held by Poste Italiane (70%) and
Postecom (15%,). The transaction was effective for legal purposes from 30 June 2011, whilst the tax and accounting effects have been backdated to 1
January 2011.
50
Working capital breaks down as follows at 31 December 2011 and 2010:
(€m)
Trade receivables and other current assets
Trade payables and other current liabilities
Current and deferred tax assets and liabilities
Trade receivables and Other non-current assets and liabilities
Working capital
(*)
Note(*)
[10] [11]
[22] [23]
[33]
[18]
[10] [11] [23]
31 Dec 2010
4,045
(2,993)
536
(1,262)
312
31 Dec 2011
4,171
(3,087)
1,476
(1,493)
270
Increase/(Decrease)
126
(94)
940
(231)
(42)
638
1,337
699
Working capital amounts to 1,337 million euros, representing an increase of 699 million euros compared with the end of
2010. The rise is essentially due to the following:
• an increase in the balance of Other non-current assets and liabilities, amounting to 126 million euros, reflecting the delay
in collecting amounts due from the Ministry of the Economy and Finance in the form of Universal Service subsidies;
• an increase of 940 million euros in net Current and deferred tax assets, reflecting fair value losses on investments in securities attributable to BancoPosta RFC, as described below in the paragraph on changes in Equity, and the future deductibility of certain provisions for liabilities;
• an increase in Provisions for liabilities and charges, totalling 231 million euros, representing the balance of new provisions,
totalling 667 million euros, and uses/releases/finance costs of 436 million euros, primarily relating to liabilities linked to
staff costs and disputes with personnel.
At 31 December 2011 Equity amounts to 2,001.8 million euros and breaks down as follows:
• Share capital
1,306.1 million euros
• Reserves
(1,010.6) million euros
• Retained earnings 1,706.3 million euros.
Compared with 31 December 2010 Equity is down 1,611.4 million euros as a result of the following changes.
Reductions:
• changes in the fair value reserves, amounting to 1,856.7 million euros net of tax; at 31 December 2011 the fair value
reserve attributable to BancoPosta RFC, which primarily takes account of movements in the prices of securities classified as available-for–sale, reflected losses of approximately 2 billion euros. The downgrade of Italy’s credit rating in 2011
had a negative impact on the price of Italian government securities, generating substantial fair value losses on those classified as available-for-sale (AFS), which were recognised in the fair value reserve in Equity, net of tax. As a result, in the
second half of 2011 this reserve came to represent a particularly significant percentage of Poste Italiane SpA’s Equity and,
with regard to BancoPosta RFC, at 31 December 2011 the negative balance of the fair value reserve has exceeded the
reserve of 1 billion euros initially attributed by Poste Italiane SpA. Despite this, postal current account deposits have
remained stable and BancoPosta’s Equity continues to be sufficient to back the available-for-sale securities through to
maturity, with steps taken and instruments created to cope with unexpected movements in deposits, without having to
sell large volumes of securities at a loss. Indeed, in early 2012, following a decline in the spread on Italian government
debt, the negative balance of the fair value reserve attributable to BancoPosta RFC fell from 1,991 million euros to 835
million euros at 31 March 2012;
• the payment of dividends to the shareholder, totalling 350 million euros;
• changes in the cash flow hedge reserves, amounting to 148.4 million euros net of tax.
Additions:
• profit for the year of 698.5 million euros;
• the balance of actuarial gains and losses on provisions for staff termination benefits, totalling 45.2 million euros net of tax.
Net debt at 31 December 2011 is summarised below:
(€m)
Financial liabilities attributable to BancoPosta
- Current account deposits
- Borrowings
- Other
- Bonds
- Amount payable to Cassa Depositi e Prestiti
- Bank borrowings
- Other borrowings
- Other**)
Financial assets attributable to BancoPosta
- Receivables
- Held-to-maturity financial assets
Financial assets
- Loans and receivables
Net liabilities/(assets)
Net debt/(funds)
Note(*)
31 Dec 2010
31 Dec 2011
Increase/(Decrease)
[20]
39,703
37,240
389
90
1,984
2,495
770
513
938
39
235
(36,849)
(7,431)
(14,768)
(14,562)
(88)
(2,087)
(1,492)
(572)
(23)
3,262
(2,351)
(908)
3
42,252
37,252
1,989
624
2,387
2,734
770
533
934
20
9
468
(36,669)
(8,754)
(14,364)
(13,465)
(86)
(1,809)
(1,277)
(532)
6,508
(2,560)
(1,209)
2,739
2,549
12
1,600
534
403
239
n/s
20
(4)
(19)
9
233
180
(1,323)
404
1,097
2
278
215
40
23
3,246
(209)
(301)
2,736
[21]
[8]
[9]
[12]
[13]
(*)
(**)
Includes financial liabilities payable to subsidiaries and other financial liabilities.
Cash and cash equivalents include the sum of 324 million euros deposited by the Ministry of the Economy and Finance,
as of December 2011, in a non-interest bearing escrow account as an advance on Universal Service subsidies and a total
of 17.8 million euros that cannot be drawn on due to court rulings regarding various disputes.
The increase in net debt in 2011 reflects the impact of the downgrade of Italy’s credit rating on the price of available-forsale investments attributable to BancoPosta RFC.
52
LIQUIDITY
(€m)
Deposits and cash in hand at beginning of year
Cash flow from/(for) operating activities
Cash flow from/(for) investing activities
Cash flow from/(for) financing activities
Cash flow from/(for) shareholder transactions
2010
1,599
312
(1,047)
544
(500)
2011
908
939
(649)
361
(350)
(691)
301
908
1,209
(27)
(324)
(18)
881
867
Net change in cash
NEW OPERATING SEGMENTS
In line with previous reports and the description in the section “Areas of business”, the identified operating segments in the
Annual Report 2011 are: Postal Services, Financial Services (which, from 2011, also includes the operations of Banca del
Mezzogiorno-MedioCredito Centrale SpA), Insurance Services and Other Services.
Segment information regards revenue components and is prepared on the basis of the Accounting Unbundling that Poste
Italiane SpA is required to carry out at the end of each reporting period in accordance with the laws in force at 31 December
2010 (Legislative Decree 261/99 and Legislative Decree 144/01). The cost allocation method adopted is based on the
absorption of resources (staff, external costs, plant, etc.) by the various business segments.
Following the establishment of BancoPosta RFC, the methods of measuring and presenting segment information for 2011
have been revised. The new identified operating segments are: Postal and Business Services, Financial Services and
Insurance Services, as shown below. These segments provide the basis for the new segment information to be presented
from the financial statements for 2012.
OPERATING SEGMENTS FOR 2011
Postal Services
Financial Services
Insurance Services
Other Services
Poste Italiane SpA
Postel Group
Mistral Air Srl
Consorzio Logistica Pacchi ScpA
Italia Logistica Srl
Poste Italiane/BANCOPOSTA
Poste Tutela SpA
Banca del Mezzogiorno - MCC SpA
Poste Italiane SpA
Poste Vita SpA
Poste Assicura SpA
Poste Italiane SpA
BancoPosta Fondi SpA SGR
Europa Gestioni Immobiliari SpA
Postecom SpA
PosteShop SpA
Poste Energia SpA
Poste Mobile SpA
Consorzio per i servizi di telefonia
Mobile ScpA
OPERATING SEGMENTS FOR 2012
Postal and Business Services
Financial Services
Insurance Services
Other Services
Poste Italiane SpA
Postel Group
Mistral Air Srl
Consorzio Logistica Pacchi ScpA
Postecom SpA
Poste Tutela SpA
PosteShop SpA
Poste Energia SpA
BancoPosta RFC
Banca del Mezzogiorno - MCC SpA
Poste Vita SpA
Poste Assicura SpA
Poste Mobile SpA
Consorzio per i servizi di telefonia
Mobile ScpA
Solely for the sake of completeness, the following table shows additional information on operating segments, taking
account of the legal and organisational changes that have occurred.
2011
(€m)
Postal and
Business
Services
Financial
Services
Insurance
Services
Other
Services
Unallocated
items
Adjustments
and
eliminations
Total
External revenue
Intersegment revenue
Total revenue
5,161
4,412
9,573
5,033
277
5,310
11,278
0
11,278
221
68
289
-
(4,757)
(4,757)
21,693
0
21,693
Non-cash expenses
Total non-cash expenses
(521)
(173)
(694)
(0)
(23)
(23)
(1)
(5,337)
(5,338)
(22)
(3)
(25)
-
-
(544)
(5,536)
(6,080)
834
580
199
26
-
2(*)
1,641
-
-
-
-
14
(2)(*)
12
1
-
-
-
(808)
-
1
(808)
Operating profit/(loss)
Finance income/(costs)
Profit/(loss) on investments accounted
Income tax expense
Profit/(Loss) for the year
(*)
Elimination of cost incurred by Poste Italiane SpA for interest paid to consolidated subsidiaries (recognised by the latter in finance income).
846
54
4. AREAS OF BUSINESS
The Poste Italiane Group offers integrated communication, logistics, and financial services and products across Italy
through a network of around 14,000 post offices, its website and the contact centre.
Pursuant to Legislative Decree 58/2011, Poste Italiane SpA is to provide Universal Postal Services for fifteen years from 30
April 2011.
Over the years the Group has expanded and enlarged its business, with the aim of offering increasingly innovative solutions
to its customers (the general public, businesses and the Public Sector in the form of central and local government), and
taking advantage of its distribution channels, as well as the multiple and complementary capabilities of its organisational
structure. It also offers supplies Public Sector entities with a variety of collections, payments and reporting services, in
keeping with the development of e-government. Via its post office network the Group also provides socially relevant
services by enabling access to public services of an administrative and financial nature, such as the “Reti Amiche” project
and the “Social Card” initiative.
The business is organised into the three segments described below: Postal Services, Financial Services and Insurance
Services.
• Postal Services, including Mail, Express Delivery and Parcels, and Philately activities carried out by Poste Italiane SpA and
certain subsidiaries (SDA Express Courier, the Postel Group, Mistral Air Srl, Consorzio Logistica Pacchi ScpA and Italia
Logistica Srl).
• Financial Services, comprising the activities of BancoPosta and the subsidiary, Poste Tutela SpA, and, from 2011, the activities of Banca del Mezzogiorno-MedioCredito Centrale SpA.
• Insurance Services include the activities carried out by Poste Vita SpA (whose products are distributed through post
offices) and its subsidiary, Poste Assicura SpA.
• Other related activities of Poste Italiane SpA and certain other Group companies (BancoPosta Fondi SpA SGR, EGI SpA,
Postecom SpA, PosteShop SpA, PosteMobile SpA, Poste Energia SpA and the Consorzio per i Servizi di telefonia Mobile
ScpA), are allocated to the Other Services segment.
• In addition, in 2010 Poste Italiane was one of the founders and promoters of the Global Cyber Security Center Foundation,
a non-profit organisation set up to promote, research into and develop cyber security and communication projects and initiatives.
4. Areas of business 55
4.1 POSTAL SERVICES
This area includes three separate segments:
• Mail, comprising Poste Italiane SpA's provision of traditional postal services, as well as direct marketing and innovative
services within the broader sector of paper-based and electronic communications. The segment also includes services
provided by the Postel Group in the Mass Printing sector;
• Philately, which is the sale of Postage and Revenue Stamps, and products for stamp collectors;
• Express Delivery and Parcels, including express delivery products offered on the deregulated market by Poste Italiane
SpA to Retail and SME customers, and by SDA Express Courier to business customers. The provision of ordinary parcel
services falls under the Universal Service obligation.
Furthermore, in support of the Group's business, the subsidiary, Mistral Air Srl, provides air transport services, carries out
sorting, handling and delivery activities relating to the parcels service and Italia Logistica Srl provides integrated logistics
and multimodal services to customers outside the Group.
The Contratto di Programma (Planning Agreement) regulates relations between the Ministry for Economic Development
and Poste Italiane SpA in connection with the Universal Postal Service.
The Contratto di Programma (Planning Agreement) for 2009-2011, signed by the Ministry for Economic Development and
Poste Italiane in November 2010, was finally approved by Law 183 of 12 November 2011, the 2012 Legge di Stabilità (2012
Economic Stability Law). The agreement is thus fully effective, subject to notification to the European Commission of the
payment of state aid to Poste Italiane in order to cover the costs of Universal Service provision.
The new Contratto di Programma (Planning Agreement) allows for greater flexibility than its predecessor combined with
the objective, set by the Ministry, to control the costs of the universal service. The main provisions include completion of
the reorganisation of postal services on the basis of deliveries five days a week, as set out in the union agreement of 27
July 2010.
The Philately business is also regulated by the Contratto di Programma (Planning Agreement), in as far as the issuance of
Postage and Revenue Stamps is concerned, by granting the Ministry for Economic Development the exclusive right to
programme such issues, with distribution and marketing by Poste Italiane SpA. The Ministry for Economic Development
appoints the Philately Advisory Committee and the Philately Commission: the first, chaired by the Minister concerned,
advises on guidelines for Italy’s philatelic policies and the annual programme of issues, the second examines and selects
images and designs for stamps.
During the year legislation governing the sector was affected by the issue of Legislative Decree 58 of 31 March 2011
relating to "Implementation of Directive 2008/6/EC 17, which amends Directive 97/67/EC, with regard to the full
accomplishment of the internal market of Community postal services”, in force since 30 April 2011.
The changes introduced by the Decree include elimination of the area reserved for providers of Universal Postal Services,
in order to achieve the full deregulation of the postal market required by Directive 2008/6/EC.
As well as redefining the scope of the Universal Service, including the collection, transport and distribution (delivery) of mail
up to 2 kg and parcels of up to 20 kg, as well services relating to registered and insured mail, with the exclusion of direct
mail for advertising purposes, as of 1 June 2012, the Decree redefines its characteristics18.
Legislative Decree 58/2011 has renewed Poste Italiane's concession regarding provision of the Universal Service for
another fifteen years, including five-yearly checks on the efficiency of service provision.
17. Deregulation of the European postal market, launched in 1997, has been the subject of three directives issued by the European Parliament and the Council:
Directive 97/67/EC, implemented by Legislative Decree 261 of 22 July 1999; Directive 2002/39/EC, implemented by Legislative Decree 384 of 23
December 2003; and lastly Directive 2008/6/EC, implemented by Legislative Decree 58 of 31 March 2011.
18. Art. 3, paragraph 5, specifically provided for:
- defined quality standards for each service with reference to EU legislation;
- provision of services on a continuous basis throughout the year;
- connection with all access points nationwide to be identified, in accordance with reasonable criteria, by the regulator;
- accessible prices, geared to costs, in accordance with cost efficient management of provision;
- delivery on at least five days a week, except for the possibility of delivering on alternate days, subject to authorisation by the regulator, in the event of
particular infrastructural or geographical conditions in areas with a population density of no less than 200 inhabitants per km, and in any case up to a maximum of one eighth of the national population.
56
The Decree has also provided for the transfer of responsibility for regulation and supervision of the postal sector from the
Ministry for Economic Development to a newly established national Agency (the Agenzia nazionale di regolamentazione del
settore postale). However, Law Decree 201 of 6 December 2011, converted into Law 214 of 22 December 2011, has
abolished the Agency, handing responsibility for regulation and supervision of the postal sector to the existing Autorità per
le Garanzie nelle Comunicazioni or AGCOM (Italy’s communications industry regulator). As the Agency never began
operating and the Postal Services division of AGCOM only became fully operational from 25 January 2012, the Ministry for
Economic Development continued to regulate and supervise the postal sector throughout 2011.
The Decree also amended the criteria for calculating the net cost of the Universal Service which, as of 2011, will be
calculated “as the difference between the net operating costs of a designated service provider subject to universal service
obligations and net operating costs without such obligations. The calculation will take account of all relevant elements,
including the intangible and commercial advantages that postal service providers designated to provide the universal
service benefit from, the right to make reasonable profits, and incentives for greater economic efficiency”, and also
established that the charge for Universal Service provision will be financed by transfers from state funds, as specified in
the Contratto di programma (Planning Agreement) between the Ministry for Economic Development and the Universal
Service provider, as well as via a compensation fund to which companies authorised to operate postal services will
contribute.
Finally, in accordance with the same Directive 2008/6/EC, the Decree maintains the exclusive rights granted to the
Universal Service provider to offer services relating to legal process and the notification of violations of the Highway Code.
Regarding postal services for publishers, the Decree of 23 December 2010, “Reduced-rate postal tariffs for non-profit
associations and organisations”, issued by the Ministry for Economic Development in conjunction with the Ministry of the
Economy and Finance, was published in the Official Gazette on 21 February 2011. This Decree introduces new reduced-rate
tariffs for the non-profit sector for 2010 pursuant to limits on the allocation of funds provided for by art. 2, paragraph 2-11,
of Legislative Decree no. 40/201019.
Later in the year, Law Decree 216 of 29 December 2011 introduced further legislation governing this area of activity. Art.
21 – Postponement of postal sector regulations - establishes that, from the date of entry into force of the Decree until 31
December 2013, postal service providers are authorised to apply specific tariffs for the mailing of publications by certain
non-profit associations and organisations entered in the Register of Communications Operators. The same article 21 also
excludes certain clearly identified products from the postponement, and establishes, with reference to reduced-rate tariffs,
that Law Decree 353 of 24 December 2003 (converted, with amendments, into Law 4 of 27 February 2004) is not
applicable. Art 3, paragraph 1 of this law also requires the Cabinet Office’s Information and Publishing department to
reimburse Poste Italiane for the total amount of the reductions applied.
The regulatory environment for international postal services in 2011 was marked by negotiation of the REIMS V agreement
by Europe's leading postal operators. The agreement has established new terminal rates for international mail from 2012.
With the aim of improving the quality of the tracking service and delivery times for Standard Parcels included in the
Universal Postal Service, on 20 May 2011 the Minister for Economic Development, as the Regulator of the postal sector,
approved a decree raising the price of Standard Parcels weighing between 0 and 20 kg, for delivery within Italy, to 9.10
euros and setting a new target for delivery times (94.00% in J+3). This change brings Poste Italiane’s Universal Service
offering into line with market practices.
19. This Decree, which was converted into Law 73 of 22 May 2010, allocated a sum of 30 million euros for 2010 in subsidies for the non-profit sector.
PROCEEDINGS PENDING AND RELATIONS WITH THE AUTHORITIES
During the year Constitutional Court sentence 46 of 11 February 2011 declared that “article 6 of Presidential Decree 156 of
29 March 1973 (Approval of the consolidated law regarding postal, postal banking and telecommunications services) is
unconstitutional, to the extent that the grantor and operators of public telegraphic services are deemed to have no
responsibility for the late delivery of mail dispatched by Postacelere express mail”.
The dispute arose from a claim for damages following the delayed delivery of a package (containing documents) sent by
Postacelere express mail. In addition to the refund of delivery charges, the company that sent the parcel claimed
compensation from Poste Italiane for the fact that it was thus unable to participate in a tender process.
The above Constitutional Court sentence has clarified the fact that, in the event of the late delivery of a Postacelere express
mail item, Poste Italiane's liability is not limited merely to the refund of the related delivery charges.
The Company continued to engage with the Antitrust Authority in relation to procedure A/413 concerning alleged abuse of
a dominant market position in connection with certain commercial practices of Poste Italiane relating to the Posta Time
product and participation in certain tenders.
Having rejected the commitments given by the Company, the Authority completed its investigation by imposing a fine of
39 million euros on Poste Italiane. The Company appealed the decision before Lazio Regional Administrative Court which,
on 11 January 2012, rejected the application for interim relief and fixed a date for the hearing on the merits.
On 4 April 2012, Lazio Regional Administrative Court upheld the appeal brought by Poste Italiane SpA, subject to certain
limitations, and cancelled the Authority’s fine. Whilst fully convinced that its conduct is in compliance with the law and
correct, the Company, whilst waiting for the judgement to become final, has prudently taken account of the above situation
in determining provisions for disputes with third parties at 31 December 2011.
The Antitrust Authority launched procedure PS/3341 on 30 April 2010, regarding the Company's alleged improper trade
practices within the meaning of Legislative Decree 206/2005 (the Consumer Code), consisting of the dissemination of
advertising (press and web) of the Raccomandata1 service. The Authority, having rejected the Company's undertaking to
eliminate the alleged improprieties, notified completion of the investigation on 29 December 2010 and fined Poste Italiane
200 thousand euros. Use of the advertising material was also prohibited.
The Company, which paid the fine in February 2011, has appealed the ruling before Lazio Regional Administrative Court.
On 9 March 2011 the Antitrust Authority launched investigation A/438 regarding an alleged abuse of a dominant position
relating to commercial practices adopted by Poste Italiane with reference to the bulk mail service. Specifically, this
investigation aims to ascertain whether, through its behaviour, the Company hindered the market entry of a company called
Selecta, to the advantage of its subsidiary, Postel.
In June and July 2011 Poste Italiane submitted its commitments pursuant to art. 14-ter of Law 287/90. The commitments
were held to be sufficient to remove the anti-competitive practices that gave rise to the investigation. As a result, on 26
March 2012 the Authority closed its investigation without imposing a fine and effectively rendered Poste Italiane’s
commitments compulsory.
On 24 March 2011 the Antitrust Authority launched procedure PS/6858 regarding alleged unfair commercial practices
pursuant to Legislative Decree 206/2005 (the Consumer Code) regarding the unavailability of forms relating to standard
Registered Mail and Parcel products at post offices. On completion of its investigation, the Authority imposed a fine of 540
thousand euros on Poste Italiane. The Company is preparing to appeal the ruling before Lazio Regional Administrative Court.
Finally, on 14 March 2012 the Antitrust Authority launched an investigation of Poste Italiane (A/441) to establish if the
Company has abused its dominant position in the deregulated postal services market. The procedure aims to determine
whether or not Poste Italiane’s conduct represents an abuse of its dominant position in violation of article 102 of the
European Treaty, which would be the case if it is confirmed that the Company does not charge VAT on deregulated services.
The procedure is due to be completed by 4 February 2013.
58
4.1.1 COMMERCIAL OFFERING
Mail
The reorganisation of logistics and operations set out in the union agreement of 27 July 2010 has led to a new stage in the
Company’s development, which aims to strengthen its strategic position in the postal sector and boost customer
satisfaction by offering new, tailor-made services. In this regard, in July 2011 the Company launched “Posteitaliane per Te”,
a new door-to-door service available in provincial capitals and municipalities with more than 30,000 inhabitants. The service
offers customers the chance to use certain of the Group’s mail products and services from the comfort of their own home
or place of work, by contacting one of 817 “Posteitaliane per Te” staff located around the country. The staff member’s visit
can be scheduled for the afternoon from Monday to Friday up to 8.00pm and for Saturday morning from 8.00am to 2.00pm
by calling freephone 803.160, going to the special page of the website at www.poste.it. or, alternatively, by asking your
postman or woman to be contacted by a member of staff.
The main services offered are: payment of pre-printed bills (primarily for utilities) using Postamat and Postepay cards; the
sale of pre-franked mail and parcels; purchase of the “Pick-up light” service; the purchase and activation of tailor-made
“Seguimi” delivery services; the delivery on request of registered and insured mail using the “Chiamami” service;
catalogue sales of Poste Shop products; and the delivery of urgent telegrams and Raccomandate1 registered mail.
A new range of pre-franked (envelopes and packing) and pre-packaged postal services, ready to be mailed, was piloted in
readiness for inclusion in the “Postafree” offering. Thanks to the use of standardised packaging and a flat rate based on the
size of the package, the customer can easily send documents, goods and other objects from the comfort of their own
home, tracking the package’s progress and delivery.
In order to meet the needs of business customers (large companies and SMEs) and central and local government, the
electronic document offering has been extended. The new offering involves installation, at the customer’s premises, of an
IT platform that enables the customer to publish documents on their website or, in the case of government entities, on
their notice board.
Reverse logistics services were also developed during the period. This offering is designed to meet the needs of certain
businesses wishing to provide their final customers with a value added service, which uses the post office network as a
channel for delivering goods returned for maintenance or replacement and for collection of the repaired or replaced item.
Large customers will benefit from advanced methods of delivery, electronic document storage and reporting, tracking
services and the documentation of shipments.
Finally, the ”Minibox” offering has been developed for international logistics services. This is a new range of services
specially designed to enable SMEs to send small objects overseas. The new range offers fast, low-cost untracked services
and a tracked service with the option of cash on delivery payments.
Online services
The “PosteMailBox” service offering for consumer customers was launched in the MyPoste20 section of the website at the
end of 2011. The service enables customers to gain integrated access to all the Poste Italiane Group’s online services and
includes the receipt and sending of various types of electronic communication (certified electronic mail, hybrid mail,
messages for large companies), remote electronic document storage and digital signatures. The offering will be extended
to businesses in 2012, with an expanded range of functions, such as the storage and conservation of electronic documents
in accordance with the law.
Philately
The philately programme for the year featured issues commemorating the 150th anniversary of the Unification of Italy in
2011. The most important issues primarily celebrated the Italian flag, a symbol of national unity, the Proclamation of the
Kingdom of Italy, the philatelic show dedicated to the “magnificent” two-year period 1859-1861, the various protagonists
involved in the unification (Camillo Benso, Count of Cavour, Carlo Cattaneo, Giuseppe Garibaldi, Vincenzo Gioberti, Giuseppe
Mazzini, Carlo Pisacane and Vittorio Emanuele II), the Italian Navy, with a collection of four stamps on a single sheet, and
20. MyPoste is the new service for customers registered with the website www.poste.it, which will replace the old electronic mail account, Postemail, which
will remain in service until 31 March 2012.
the different battles that took place (the battles of Pastrengo in 1848, Solferino in 1859, Volturno in 1860 and Bezzecca in
1866).
Another important issue was the stamp commemorating the Venerable Servant of God John Paul II to mark his Beatification
ceremony in San Peter’s Square on 1 May 2011.
Italian art and culture were celebrated in stamps featuring Roma Capitale, World Theatre Day, Trajan’s Arch in Benevento,
the Benedictine Abbey of the Santissima Trinità di Cava dei Tirreni and a stamp celebrating Villa Adriana in Tivoli.
The “Made in Italy” series included: the stamp featuring industrial design on the occasion of the Premio Compasso d’Oro
(a prize awarded by the Industrial Design Association), the stamp marking 175 years since the foundation of the Marzotto
textile group and one dedicated to Fratelli Carli one hundred years on from its foundation.
The issue marking the 50th anniversary of the foundation of Amnesty International was of particular social significance, as
was the issue marking the first ten years of the Agenzie Fiscali (the Italian Revenue Agency) and the stamp marking the
180th anniversary of the foundation of the Council of State.
A major publishing initiative was the publication, in partnership with Bolaffi, of the first instalment of a series marking the
150th anniversary of the Unification of Italy. This publication, which is available from all post offices, provides a history of
the country from unification to the present day.
The Postel Group provides communications services to businesses and Public Sector entities. In addition to printing and
enveloping mail, which traditionally represents the Group’s core business, its service offering includes Mass Printing (the
group of services intended for outsourcers of large volumes of mail); Direct Marketing (integrated communications and
marketing services combined with the printing of commercial documentation); Door to Door (corporate support services
for “unaddressed” mail campaigns); and Electronic Document Management by which the Group offers its customers
traditional optical acquisition and storage services, as well as innovative services such as backup optical filing and electronic
billing; and e-procurement (the management, distribution and supply of stationery, IT products, blank forms, printed matter,
consumables and other products required by both Poste Italiane SpA's network of 14,000 post offices and by external
parties).
The corporate transactions described below affected the Postel Group during the year.
The sale to Cedacri SpA of Postel SpA's 17% shareholding in C-Global SpA was completed on 31 January 2011 with the
simultaneous acquisition by Cedacri SpA of 12% of the share capital of Docugest. Postel's shareholding in Docugest rose
to 49% on conclusion of the sale, with the other 51% being held by C-Global SpA (37%) and Cedacri SpA (14%).
On 29 March 2011 Postel SpA acquired the stakes held by Poste Italiane and PosteCom SpA (70% and 15%, respectively)
in Poste Link Scrl, thus becoming the sole shareholder. On 6 April 2011 the general meetings of the two companies’
shareholders approved the merger of Poste Link scrl with and into Postel SpA and the merger deed was executed on 24
June 2011. The transaction was effective for legal purposes from 30 June 2011, whilst the tax and accounting effects were
backdated to 1 January 2011.
The liquidation of Postel do Brasil Ltda (99.98% owned by Postel SpA and 0.02% by Address Software Srl), a Brazilian
company established to bid, through ConsÓrcio BRPOSTAL, for a contract to develop hybrid mail services in Brazil21, also
proceeded. Following the cancellation of the tender in 2008, the Consortium was dissolved in 2010 and Postel consequently
instructed the sole director of Postel do Brasil to liquidate the company, whose only purpose was to take part in the tender.
For the purposes of the liquidation, it was necessary to convert loans provided over time by Postel SPA to Postel do Brasil
into equity. A deed was signed on 29 September 2011 approving Postel do Brasil’s final accounts, winding up the company
and appointing a liquidator.
During 2011 Postel, as part of a temporary consortium, was awarded a contract by the Istituto Nazionale di Statistica or
ISTAT (the Italian Office for National Statistics) to supply printing, enveloping, optical data storage and traditional data
recording services for the 15th Census of the Italian population and housing.
With regard to e-commerce initiatives, Postel’s new PostelOffice portal, offering SMEs and professionals the chance to buy
personalised printing services and office products, was activated. The service allows users to manage all their company’s
postal communications and printing processes and the personalisation and mailing of all forms of paper document
(business cards, headed paper, advertising postcards and mailings), thus streamlining existing procedures.
21. The Postel Group was the ConsÓrcio BRPOSTAL's technology partner for the operation of hybrid mail services and the supply of the relevant software
platform.
60
Service quality
Quality targets are established by the postal market regulator for delivery times, which must be guaranteed for certain
percentages of mail.
With a Decree issued on 23 November 2009, published in the Official Gazette on 1 December 2009, the Ministry for
Economic Development set “Quality targets for the three-year period 2009-2011 regarding bulk, registered and insured
mail, and standard parcel services”.
The table below shows the quality achieved compared with the targets set.
2010
Target
Actual
Target
Actual
1 day
89.0%
92.0%
89.0%
94.7%
85.0%
85.0%
92.5%
93.5%
90.9%
89.8%
95.1%
98.5%
85.0%
85.0%
92.5%
94.0%
92.9%
91.3%
93.8%
98.9%
Prioritary Mail(*)
International Mail(**)
inbound
outbound
Registered Mail(***)
Insured Mail(***)
(*)
(**)
(***)
2011
Delivery within
3
3
3
3
days
days
days
days
Based on data certified by IZI on behalf of the Ministry for Economic Development.
IPC - UNEX End-to-End Official Rule data.
Monitored by an electronic tracking system.
In the domestic market, a new commercial offering for the Pick-up service provided to small and small to medium sized
enterprises (an additional service offered in combination with the Postacelere 1 plus, Paccocelere 1 plus and Paccocelere
3 products) was launched with the aim of simplifying pricing. Postacelere1 Plus, Paccocelere1 Plus and Paccocelere3
customers are now also offered discounts by purchasing a carnet of prepaid consignment notes, thereby benefitting from
reductions with respect to list prices.
The Company continued with efforts to renew its international offering. This resulted in the new Posteexport offering, which
includes the “Minibox” products for businesses and professionals who send packages weighing up to 2 kg, and the
introduction of ancillary services for the Express Mail Service (EMS) and Quick Pack Europe products, such as the pick-up
service and the ability of customers to produce their own consignment notes.
SDA Express Courier SpA a wholly owned subsidiary of Poste Italiane SpA, in addition to being one of the largest
Italian couriers, is also able to provide its customers with integrated solutions for distribution, logistics and catalogue sales.
Poste Italiane, in fact, only uses SDA Express Courier for the distribution of all domestic and international Paccocelere,
ordinary parcel, J+3 and Home Box services (from the end of 2011 via Consorzio Logistica e Pacchi).
During the year, which witnessed a reduction in demand from both businesses and consumers and a general lack of
confidence throughout Europe, the company continued with efforts to improve its offerings, in keeping with the services
offered by its competitors. This was done with a view to protecting market share and acquiring new customers in emerging
segments of the market, such as e-commerce.
The domestic offering was extended with the introduction of services designed to personalise deliveries based on
customer needs. This involved the launch of the “Al piano” service for deliveries to the floor of the building on which the
addressee is located, the “Su appuntamento” service for deliveries on days and at times pre-arranged with customers, and
“di Sabato e di Sera” services that offer Saturday and evening delivery for addressees who are unavailable during working
hours.
In terms of international services, a partnership agreement was entered into with UPS (United Postal Service Inc.), one of
the world’s leading operators, that will see the partner progressively outsource the sorting, pick-up, transport and
distribution of express courier shipments in various parts of Italy to SDA over the next two years. UPS, in the meantime,
will provide transport, customs clearance and delivery services for international destinations (the outbound service).
With regard to corporate actions, following a request from its subsidiary, Kipoint SpA, on 30 December 2011 SDA made a
capital contribution of 500 thousand euros to cover the loss incurred in 2011. Moreover, in response to the losses incurred
in recent years by Italia Logistica, in which SDA has a 50% stake in joint venture with FS Logistica SpA (a Ferrovie dello
Stato group company), an impairment loss of 3.3 million euros on the investment in this company was recognised when
preparing the financial statements.
On line services
The range of services accessible via the website at www.poste.it was extended in December with the launch of
“Paccoweb”, a service that enables customers to purchase Paccocelere 1 plus and/or Paccocelere 3 services on line,
requesting collection from their home address on any working day between the following day and the ninetieth calendar
day after receipt of the online order.
A new version of the Home Box product was introduced for business customers, allowing them to automatically print
consignment notes and have a record of shipments sent.
SDA Express Courier continued to offer multiple interactive services through its website, www.sda.it. 11.9 million visits
were logged at the site in 2011, over 1.9 million of which were to schedule pick-ups and around 8 million to track packages.
Other integrated services available on the company's website include: a branch locator, a search for areas served,
international rate computation, international shipment times, requests for materials to be used for shipments, the tracking
of pick-ups and deliveries, pick-up scheduling, and delivery times and areas where “Time Definite” services are available.
A new web platform was inaugurated in November 2011, allowing final customers, including retail customers, to manage
their shipment on their own, printing the necessary forms, paying for the shipment and arranging pick-up from the sender’s
address.
Finally, with the aim of providing new solutions for distance sellers, further functions have been added to the mySDA22
portal relating to “Smart Alerts”, which keep customers informed about the delivery status of shipments via email or text
message. This function also provides addressees with detailed information about shipments in order to ensure successful
delivery.
Service quality
The service quality achieved by Express Delivery and Parcels is shown in the table below.
With respect to the Standard Parcels product, which is provided under the Universal Service Obligation, results are
compared with the "Quality targets for the three-year period 2009-2011 for bulk, registered and insured mail and standard
parcels" set by the Ministry for Economic Development Decree of 23 November 2009 and later modified, with regard to
Standard Parcels alone, by the Ministry for Economic Development Decree of 20 May 2011.
The targets for Postacelere and Paccocelere are contractually binding and were established by SDA and the Parent
Company.
2010
Delivery within
Standard Parcels
Postacelere Express Delivery
Paccocelere
Target
2011
Actual
Target
Actual
3 days
94%
98.9%
94%
97.6%
1 day
90%
95.0%
90%
94.5%
3 days
98%
99.1%
98%
99.7%
All products are monitored with an electronic tracking system.
22. MySDA is the section of the website reserved for users who have registered free of charge on the www.sda.it site, providing easy, ready and secure
access to all the administrative and operational information needed.
62
4.1.2 OPERATING RESULTS
MAIL AND PHILATELY
Volumes (‘000)
Revenues (€m)
2010
2011
% inc./(dec.)
2010
2011
% inc./(dec.)
Priority mail
1,118,398
1,028,980
(8.0)
789
770
(2.4)
Bulk mail
1,491,702
1,386,384
(7.1)
828
753
(9.1)
-
63,159
n/s
-
75
n/s
2,610,100
2,478,523
(5.0)
1,617
1,598
(1.2)
245,196
229,550
(6.4)
934
884
(5.4)
Additional services(*)
Total unrecorded mail
Registered mail
Insured mail and legal process
Total recorded mail
Philatelic products and Other Basic Services
Integrated Services
Digital and Multi-channel Services
33,006
31,588
(4.3)
189
213
12.7
278,202
261,138
(6.1)
1,123
1,097
(2.3)
211
181
(14.2)
289
285
(1.4)
n/s
n/s
74,692
56,789
(24.0)
14,912
14,241
(4.5)
66
60
(9.1)
1,267,947
1,190,139
(6.1)
315
305
(3.2)
Unaddressed Mail
684,387
616,135
(10.0)
29
32
10.3
Services for Publishers
673,898
552,211
(18.1)
192
158
(17.7)
(30.8)
Direct Marketing
Post Office Box rental
13
9
Total market revenues
3,855
3,725
(3.4)
224
180
(19.6)
67
23
(65.7)
including Philately Products and Revenue Stamps
Electoral subsidies
Publisher tariff subsidies
Total Mail and Philately
(**)
Postel Group - External revenue
53
-
n/s
5,604,138
5,169,176
(7.8)
3,975
3,748
(5.7)
-
-
-
247
232
(6.1)
From 2009 notices of receipt for Registered mail have been treated separately, with priority mail volumes (2010 and 2011) also including these items.
(*)
Volumes and revenues for 2011 refer to the collection and delivery of ISTAT questionnaires for the 15th Census of the Italian Population and Housing for
2011.
(**)
Overall mail volumes, including items handled by Postel and relating to Promoposta (28 million items), amount to approximately 5.2 billion items at 31
December 2011.
The results for mail services in 2011, which include the results for Philately and government subsidies, reveal reductions in
both volumes and revenues of 7.8% (5,169 million items handled in 2011, compared with 5,604 million in 2010) and 5.7%
(3,748 million euros in 2011, compared with 3,975 million euros in 2010).
Against a backdrop in which the prospects for economic recovery deteriorated further during the second half of 2011, the
reduction in volumes is primarily due to Unrecorded Mail (down 5.0%, equal to 132 million fewer items than in 2010) and
Direct Marketing (down 6.1%, equal to 78 million fewer items than in 2010). In addition to a decline in electoral mailings
(51 million fewer items of Unrecorded mail, 14 million less Direct Marketing items and 42 million less items of Unaddressed
Mail, making a total reduction of 107 million in 2011, compared with 2010), the performance reflects a reduction in mailings
by major customers (businesses and the Public Sector) and the progressive increase in digital communication, reflecting
the well-established presence of competing providers, in part due to the further deregulation of the postal services market
introduced by Legislative Decree 58/2011. This aspect has also had a negative impact, albeit to a lesser extent, on the volumes of mail sent by private customers, as this category of communication primarily suits the requirements of addressees
(companies and government entities), or meets the purposes required by law (such as Registered Mail). The volume of publications was also down (18.1%, or 122 million fewer items than in 2010) following changes in the related legislation.
Market revenues, before electoral subsidies23 (23 million euros in 2011, compared with 67 million in 2010), total 3,725 million euros, marking a reduction of 130 million euros on 2010 (down 3.4%). As noted above, this essentially reflects a
decrease in Unrecorded Mail (down 19 million euros or 1.2% on 2010) and in services for Publishers (down 34 million euros
or 17.7% on 2010), as well as the performance of Recorded Mail (down 26 million euros or 2.3% on 2010).
In detail, the decline in the market for Unrecorded Mail, where volumes were down for both Priority Mail and Bulk Mail (89
and 105 million fewer items, respectively, compared with 2010), was partly offset by the volume of mail generated by the
2011 Census, which resulted in 63 million items of mail and contributed 75 million euros to revenues under the item
“Additional services”.
Despite the positive performances of the Raccomandata1 service (up 1.7% or approximately 0.2 million more items) and
Legal Process (revenues up 28 million euros on the previous year, partly reflecting changes to pricing), Recorded Mail
reports a 6.1% reduction in volumes (17 million fewer items than in 2010) and a 2.3% decrease in revenues (down 26 million euros on 2010).
In terms of revenues, Integrated Services saw a decline of 4 million euros (down from 289 million euros in 2010 to 285 million euros in 2011, marking a reduction of 1.4% on 2010). This partly reflects the enactment of Law 122/2010, which has
established that demands for payment and notices of assessment on behalf of INPS and the tax authorities are immediately enforceable, resulting in a reduction in the volume of mail previously handled. This legislation, which came into effect
from 1 January 2011 for INPS and from 1 October 2011 for the tax authorities, aims to significantly reduce the time between
assessment of the amount payable and initiation by the tax collector of the process of collecting the sum due, with the
government entity’s right to collect the amount payable deriving from the fact that the demand for payment is enforceable.
Revenues from digital and multichannel services are down 9.1% compared with the previous year, reflecting the fact that
the growth recorded by the online channel is still not sufficient to offset the decline in more traditional services, such as
telegrams and Certofax.
As mentioned above, the volume of Direct Marketing items is down 6.1% (down 78 million fewer items than in 2010), partly reflecting the 14 million reduction in electoral mailings, resulting in a 10 million euros (3.2%) reduction in revenues compared with the previous year.
Unaddressed Mail volumes also reflect the impact of the decline in electoral mailings, with 42 million of the 68 million fewer
items sent in 2011, compared with 2010, referring to election material. In contrast, revenues are up 10.3% (up 3 million
euros on 2010) due to growth in both the volumes and revenues generated by “project-related” services, which typically
involve mailings with a high unit value.
The market for Services for Publishers was influenced by significant regulatory changes during the previous year, resulting
in the abolition of subsidised tariffs for publications from 1 April 2010. The new regulations resulted in reductions in both
volumes and revenues of 18.1% (122 million fewer items) and 17.7% (down 34 million euros). In terms of revenues, the
reduction is even greater if the fact that there were no publisher tariff subsidies in 2011 is taken into account (compared
with 53 million euros in subsidies in 2010).
Philately revenues included in postal services revenue, including those generated by the sale of Revenue Stamps, amount
to 180 million euros (224 million euros in 2010). This income was generated by a Philately Programme that included 52
issues with 81 stamps and 11 postcards, with a value of 59.95 euros (52 issues with 69 stamps, 3 postcards and a first
day cover, with a value of 46.50 euros in 2010).
The Postel Group‘s performance in 2011 was influenced by an unfavourable macroeconomic and market environment that
resulted in slower growth than in the previous year. Moreover, Mass Printing, the Group’s traditional core business, is a
fully mature business and exposed to ongoing competitive pressures due to the continuous restructuring processes carried out by its main customers. The Group is thus heavily engaged in protecting its established businesses, with the aim
of responding to negative market trends, and in developing and expanding its customer base and its offerings, above all for
its Integrated Document Management business.
23. No publisher tariff subsidies were received in 2011 following changes in the related legislation (in 2010 these subsidies totalled 53 million euros).
64
External revenue is down 6.1% on the previous year, declining from 247 million euros in 2010 to 232 million euros in 2011
(including changes in inventories relating to the contract with ISTAT) due to the reduction reported by Mass Printing (150
million euros in 2011, compared with 175 million euros in 2010), which has reached saturation point, and a reduced contribution from e-procurement (53 million euros in 2011, compared with 72 million euros in 2010), only partially offset by the
strong performance of the Electronic Document Management business where revenues, which are primarily earned on
contracts with customers outside the Poste Italiane Group, are up from 32 million euros in 2010 to 50 million euros in 2011.
The overall performance has resulted in an operating loss for Postel SpA of 30 million euros (a profit of 23.3 million euros
in 2010), reflecting a 30 million euro impairment of goodwill.
The Postel Group’s contributions to consolidated operating profit and profit for the year are 0.1 million euros and 2.6 million euros, respectively.
EXPRESS DELIVERY AND PARCELS
Volumes (‘000)
2010
2011
Revenues (€m)
% inc./(dec.)
2010
2011
% inc./(dec.)
Postacelere
Domestic
8,623
6,638
(23.0)
86.8
69.4
(20.0)
International
2,179
1,660
(23.8)
36.2
32.2
(11.0)
10,802
8,298
(23.2)
123.0
101.6
(17.4)
34,330
38,277
11.5
232.6
257.4
10.7
0.5
Total Postacelere
Domestic Express Delivery
2,420
2,447
1.1
19.2
19.3
Tailor-made Services
International Express Delivery
n/r
n/r
n/a
34.0
34.0
n/s
Other revenues
n/r
n/r
n/a
11.6
12.7
9.5
Total SDA Express Courier SpA - External revenue
36,750
40,724
10.8
297.4
323.4
8.7
Total Express Delivery
47,552
49,022
3.1
420.4
425.0
1.1
n/r: not recordable as such data relates to tailor-made services supplied to banks and insurance companies that cannot be calculated in volume terms.
n/a: not applicable
The year saw a slight increase in the number of items sent by Express Delivery (up 3.1%), entirely due to the good
performance of the domestic Express Delivery services offered by SDA Express Courier SpA, which offset the decline in
Postacelere volumes for retail customers. Total Express Delivery revenues, on the other hand, are up from 420.4 million
euros in 2010 to 425.0 million euros in 2011.
In detail, there was a 23.2% fall in Postacelere volumes, with revenues down 17.4% on 2011. The decline in volumes
affected both the domestic market (down 23.0%) and international services (down 23.8%). Despite being down on 2010,
revenues from international services were positively impacted by an improved tariff mix, which enabled the Group to
contain the loss caused by the decline in volumes (down 11.0%).
As mentioned above, the subsidiary, SDA Express Courier SpA, made a positive contribution to this segment’s results,
recording overall growth in volumes of 10.8% (4 million more items than in 2010) and in revenues from external customers
of 8.7% (up from 297.4 million euros in 2010 to 323.4 million euros in 2011). The improvement is essentially due to Domestic
Express Delivery, where volumes are up 11.5% (3.9 million more items than in 2010) and revenues are up 10.7% (a increase
of 24.8 million euros), reflecting the Company’s commercial strategy designed to acquire new customers in emerging
market segments, such as e-commerce, a policy that has partially offset the impact of the economic downturn that
continued into 2011. It should be noted, however, that the growth in shipments by web retailers is greater in volume terms
than in terms of revenues, as this type of shipment (delivered primarily to private customers) involves a more complex
delivery process, which also results in higher costs. This means that, whilst the quantity of B2C shipments is offset by the
volume of B2B shipments, this offset is not fully reflected in revenues.
International services (volumes up 1.1% and revenues up 0.5%) are substantially in line with the previous year.
Overall, SDA Express Courier SpA saw revenues from the sale of goods and services rise from 407 million euros in 2010
to 410 million euros in 2011 (up 0.7%), whilst keeping the cost of goods and services under control (down from 375.8
million euros in 2010 to 375.7 million euros in 2011). The company reports an operating loss of 11 million euros, compared
with a loss of 42 million euros for the previous year, which was, however, influenced by an impairment of goodwill
amounting to 20.8 million euros. The loss for the year is 7.6 million euros (a loss of 34.5 million euros for 2010).
Volumes (‘000)
Revenues (€m)
2010
2011
% inc./(dec.)
2010
2011
% inc./(dec.)
Universal Parcels Service
Domestic Parcels
3,392
1,451
(57.2)
16.2
9.8
(39.5)
Parcels - international export
450
483
7.3
17.7
19.4
9.6
Parcels - international import
256
231
(9.8)
3.3
3.2
(3.0)
1.0
0.7
(30.0)
38.2
33.1
(13.4)
4.6
-
n/s
42.8
33.1
(22.7)
Other revenues
Total
4,098
2,165
(47.2)
Publisher tariff subsidies
Total Parcels
4,098
2,165
(47.2)
Universal Parcels Service revenues of 33.1 million euros (42.8 million euros in 2010) reflect the reduction in the volume of
publications for the domestic market, primarily due to the abolition of subsidised tariffs for customers following changes in
the related legislation from 1 April 2010, which have altered the tariff system for all publications. Outgoing international
parcels recorded a sound performance, with volumes up on 2010 (revenues up 9.6%).
66
OTHER COMPANIES
Mistral Air Srl provides air mail services to Poste Italiane SpA (via Consorzio Logistica Pacchi ScpA) in addition to air freight
and passenger services for other customers.
In addition to the impact of the Parent Company’s reorganisation of delivery operations, which have led the company to
reduce the frequency of night mail flights from five times a week to four, Mistral Air’s results for the year reflect the difficult
macroeconomic environment in which it operates.
The civil unrest in the Middle East and North Africa (above all in Tunisia and Egypt) effectively deprived Mistral Air of its
traditional passenger charter markets, forcing the company to look for business in other areas of Europe where the lowcost carriers dominate. These events, the rise in fuel prices and the need to carry out extraordinary maintenance on the
company’s fleet of planes are reflected in the results.
The increase in passenger charter flights during the period has resulted in a 29.7% rise in total revenues (110.4 million euros
in 2011, compared with 85.1 million euros in 2010). This, however, is not enough to offset the increase in overall costs,
which are up from 85.9 million euros in 2010 to 112.7 million euros in 2011.
During the year it was necessary to cover the loss of 2 million euros for the first half of 2011, as required by art. 2482-ter
of the Italian Civil Code (capital below the legal minimum). As a result, the Extraordinary General Meeting held on 12
October 2011 approved the Parent Company’s injection of a further 3 million euros and the formation of an extraordinary
reserve.
The company reports a loss for 2011 of 2.2 million euros (a loss of 1.5 million euros for 2010).
Consorzio Logistica Pacchi ScpA, which is a wholly owned subsidiary of the Group (51% by Poste Italiane SpA, 39% by
SDA Express Courier SpA, 5% Italia Logistica Srl and 5% Mistral Air), continued to coordinate, supplement and supervise
consortium members' operating activities, and engage in activities relating to the sorting, handling and delivery of Parcels
that Poste Italiane SpA, in its role as a Universal Service provider, is required to provide. The consortium is also responsible
for air mail letter and newspaper services (night flights) between certain Italian airports provided by the consortium
member, Mistral Air, and for the integrated logistics and document management services provided by the consortium
member, Italia Logistica Srl, and, from 2011, manages the road transport of postal products and related activities previously
carried out by SDA Express Courier.
Finally, in 2011 Poste Italiane transferred the management of approximately 300 business customer accounts relating to
the Home Box service to the consortium.
The company, which is 50:50 owned by SDA Express Courier and FS Logistica SpA (a Ferrovie dello Stato group company)
provides integrated and multi-modal logistics services to companies outside the Group.
The period was marked by the launch of new contracts for integrated logistics and publications, and by the renewal or
extension of a number of contracts obtained during the previous year. In the transport and multi-modal logistics sector, the
company was engaged in developing an intermodal rail offering, based around the use of mobile crates, whilst consolidating
its sea and air transport services for international shipments in 2011.
In November a General Meeting of shareholders voted to cover accumulated losses at 30 September 2011 (11.9 million
euros) by using the all the equity reserves reported at that date (6.9 million euros) and by reducing the share capital to zero
(5 million euros), in order to meet the requirements of art. 2482-ter of the Italian Civil Code (capital below the legal
minimum). The General Meeting also voted to inject further share capital of up to 900 thousand euros.
Operating income is up from 87 million euros in 2010 to 91 million euros in 2011, essentially reflecting the positive impact
of the acquisition of new customers for logistics and document management services. These results, which were provided
by the company for the purposes of preparation of the Poste Italiane Group’s consolidated financial statements for 2011,
have yet to be approved by the Board of Directors of Italia Logistica.
4.2 FINANCIAL SERVICES
The financial services offering includes current accounts, payment services, financial products (including postal savings
products such as Savings Books and Interest-bearing Postal Certificates distributed on behalf of Cassa Depositi e Prestiti)
and third-party loan products in accordance with the provisions of Presidential Decree 144 of 14 March 2001, as amended.
From 2 May 2011 these activities were attributed by Poste Italiane SpA to BancoPosta RFC.
The subsidiary, Poste Tutela SpA, provides backup services for the above-mentioned activities and is responsible for the
organisation, coordination and management of funds and valuables in all branches and post offices throughout the country.
From 1 August 2011 the Financial Services segment also includes the management of public funds by Banca del
Mezzogiorno – MedioCredito Centrale SpA, which is now a fully-owned subsidiary of Poste Italiane SpA.
In terms of banking transparency, following the Bank of Italy's Directive of 9 February 201124 – Application of the Directive
on consumer credit – which intermediaries were obliged to comply with by 1 June 2011, in agreement with its partners on
whose behalf financial products are distributed, during 2011 Poste Italiane implemented a series of changes to organisational arrangements and IT systems aimed at increasing transparency (advertising and pre-contract information, contracts,
communication with customers) and bringing the sales procedures and operating processes concerned into line with the
new regulations. This primarily involved the implementation of initiatives designed to:
• prepare, in accordance with the required standards, documents containing basic information on consumer credit (SECCI
- Standard European Consumer Credit Information), covering loans, salary loans and credit cards;
• revise and add to contracts and forms for loans, credit cards, BancoPosta salary loans and BancoPosta lines of credit;
• implement the procedures and communication processes involved in managing significant overdrafts.
• the automated production and publication of mandatory transparency documents (factsheets, information leaflets and
information on changes to terms and conditions introduced by the financial service provider).
Regarding payment services, following the entry into force of Directive 2007/64/EC of the European Parliament and Council
– Payment Services Directive (PSD), which was transposed into Italian Law by Legislative Decree 11 of 27 January 2010,
effective from 1 March of the same year, Poste Italiane continued to make the necessary changes to its organisational
arrangements and IT systems.
The design of strengthened anti-money laundering processes and procedures continued with the aim of:
• adding further customer checks to the IT processes involved in the initiation of ongoing relationships and the conduct of
one-off over-the-counter transactions of amounts equal to or over 5 thousand euros;
• implementing “in-line” anti-terrorism controls in order to immediately block transactions (customer data, the initiation of
relationships and the conduct of one-off transactions);
• activating new functions to support the branch network in reporting suspect transactions and adding to the IT support
available to post offices in assessing irregular transactions.
On the subject of ADR (alternative dispute resolution), which is designed to reduce the impact on the ordinary courts of
certain types of dispute between intermediaries and customers over matters relating to banking, financial and insurance
services, the obligation introduced by Legislative Decree 28 of 4 March 2010 came into effect on 21 March 2011. This
requires the parties to enter into mediation proceedings before going to court. Moreover, the special Conciliation and
Arbitration Service set up by the CONSOB to resolve disputes between investors and intermediaries, resulting from alleged
violations of information, fairness and transparency requirements in contracts with investors, also began operating on 21
March 2011. In this regard, Poste Italiane has taken steps to implement the necessary procedures and ensure transparent
communication with customers.
In February 2012 the Bank of Italy ordered an audit of BancoPosta pursuant to art. 54 of Legislative Decree 385/93. The
audit is ongoing.
24. Issued in implementation of Legislative Decree 141 of 13 August 2010, and subsequent amendments, which implements Directive 2008/48/EC regarding
consumer credit contracts in Italy.
68
The gross annual interest rates payable on the two types of retail current accounts offered were modified in 2011: from 1
September the rate payable to Conto BancoPosta Più account holders who have demonstrated their loyalty was set at
1.00%, whilst the rate paid to Conto BancoPosta customers was lowered from 0.15% to 0.00%.
With regard to SMEs, the Group launched Conto BancoPosta In Proprio No Profit, a current account specifically designed
for the non-profit sector, and Conto BancoPosta Procedure Fallimentari, to be used in managing the assets of insolvent
entities. A promotional interest rate of 2% was also introduced for BancoPosta In Proprio account holders increasing the
amount deposited, with the dual objective of improving the quality of the existing customer base and acquiring new
customers.
In terms of the Public Sector, a new service was piloted during the year that enables customers to pay for medical
examinations at the "Sportello Amico" counters in post offices. Thanks to a link to the regional system for booking hospital
visits, the public can pay for previously made medical appointments by showing their National Health card and get a receipt
of payment.
The aim of defending and relaunching the Bollettino product for paying pre-printed bills, offering a service that is more
widely available around the country, led to an increase in specially enabled external channels in 2011, with over 13 thousand
tobacconists linked up to the Banca ITB network and more than 120 banks able to offer the service to their customers via
Poste Italiane. A total of over 12 million bills were handled by these channels during the year (2.8 million in 2010).
• The electronic money segment, where 6.3 million Postamat Maestro cards and 8 million Postepay cards have been
issued, witnessed, among other things:
• development of channels for accessing the BancoPosta Più card offering, with the possibility of applying for a card from
both the BancoPosta and BancoPostaclick accounts and initial trials of distance marketing of the card, such as direct mailing;
• creation of e-postepay, the first completely virtual card, which can be applied for free of charge on the www.postepay.it
website for use at retailers that use the MasterCard online service and which, from October, can also be activated using
a Poste Mobile SIM card;
• the commercial launch of contactless Postepay cards in the Milan area, allowing holders to use the card as both a prepaid card and as a season ticket for the city’s public transport system;
• the development, in collaboration with the partners Edenred and Qui!Group, of a multi-application prepaid Postepay Lunch
card which, in addition to the usual payment functions, can also be used as an electronic luncheon voucher.
In order to further strengthen the product’s competitive positioning, the banking channel was added to the range of options
for topping up Postepay cards, with activation of the service on the web banking sites of all the banks in the Bipiemme
group.
Finally, the external top-up channel for Postepay cards, comprising over 13 thousand tobacconists linked up to the Banca
ITB network and around 40 thousand SISAL betting shops, was extended. This resulted in a significant increase in top-ups,
with over 14 million registered (10 million in 2010).
A large number of promotional campaigns were run in 2011 in order to promote loan products, including:
• “Mutuo BancoPosta zero spese di istruttoria e di perizia”, which exempts borrowers from the payment of arrangement
and valuation fees, which are substantial in the case of mortgages;
• “Prestito BancoPosta Zero Spese”, the loan product that, in addition to eliminating application and collection fees and
statement charges, also refunds taxes payable by law and allows borrowers to effect early repayment without incurring
any charge;
• “Prontissimo BancoPosta Rata Tonda”, which is a loan offering, for specific amounts and terms, repayment in monthly
round amounts that are easy to remember;
• “Prestito BancoPosta e Prontissimo BancoPosta Extracash”, the small loan of 1,500 or 2,000 euros offered at particularly
attractive conditions and reserved to BancoPosta customers who already have a BancoPosta or Prontissimo BancoPosta
loan and have kept up with their repayments;
• “Prontissimo BancoPosta Salto Rata”, a flexible loan for which a maximum of five repayments can be postponed at no
additional cost. This initiative was also backed up during the first month by the offer of a promotional interest rate.
• Promotions were also held during the year for specific family needs, such as the Prestito BancoPosta Famiglia loan for
newlyweds and new parents, Prestito BancoPosta Studi for children's school fees, and Prestito Salute to cover medical
and dental expenses.
Two new loan products were also introduced: Reverse Factoring, offered in association with Sace FCT (the SACE Group's
factoring company), that allows customers owed money by a Public Sector entity to factor the related receivables; and the
test phase of Prontissimo Affari BancoPosta, a medium-term business loan for sole traders and professionals.
The Postal Savings segment saw the renewal, for the three year period 2011-2013, of the agreement with Cassa Depositi
e Prestiti signed on 3 August 2011. This regulates and establishes remuneration for the distribution and management of
Interest-bearing Postal Certificates and Post Office Savings Books. Additionally, in the second half of the year, the sharp
drop in net deposits resulting from tough market conditions, partly as a result of the high interest rates being offered by
competing banks, forced Cassa Depositi e Prestiti and Poste Italiane to take counter measures. Two new certificates were,
consequently, issued in August (BFP DiciottomesiPLUS) and October (BFP 3X4) which were successful at increasing funds
inflow. BFP DiciottomesiPLUS is a short term investment, which on maturity in eighteen months is repaid with a yield in
excess of the traditional BFPDiciottomesi. The BFP 3X4 is a medium to long-term investment the interest rate on which
increases over its twelve-year term.
The trend in investment products was to select bonds structured to take advantage of rising interest rates over the medium
to long-term. Issues related to two different types of Banco Popolare products (TassoMisto Cap&Floor 1^ e 2^ serie and
StepUp BancoPosta) and two Monte dei Paschi di Siena products (TassoMisto Cap&Floor 3^ e 4^ serie and StepByStep
BancoPosta a 6 anni).
Turning to Payments and International Money Transfer Systems, a new Ore 7 Moneygram Service was launched for the
transfer of money abroad at very low cost. The service is intended for transfers which are not urgent and can wait until
7.00am of the following morning to save around 50% of the transfer fees.
Online services
The web banking services linked to the BancoPostaOnline and Conto BancoPosta Click accounts again performed well in
2011: the number of online accounts opened by consumer customers now stands at over 1.1 million (1 million at the end
of 2010), whilst business accounts total approximately 223 thousand (211 thousand at the end of 2010).
Online customers carried out over 18 million payment transactions during the year (16 million in 2010), consisting of:
• 4.9 million bills paid on line via current account direct debits and the use of credit/Postepay cards (4 million in 2010), of
which more than 450 thousand by way of BancoPosta Click;
• 2.3 million bank transfers (1.7 million in 2010), of which 433 thousand by way of BancoPosta Click, and including 23 thousand international payments;
• 1.2 million giro payments from consumer to business customers (1.3 million in 2010);
• 4.8 million telephone top-ups (4.9 million in 2010);
• 5 million PostePay top-ups (4 million in 2010).
Online sales of financial products were also a success, with 116 thousand people subscribing to Interest-bearing Postal
Certificates on line (85 thousand in 2010), whilst loan approvals were down from 3.5 thousand in 2010 (out of 15 thousand
applications) to 2.5 thousand in 2011 (out of 9.3 thousand applications).
In terms of investment services, in June Poste Italiane launched its Trading On Line (TOL) service, which allows customers
to trade on the secondary market and subscribe to offerings on the primary market on line, without the need to go to a
post office.
70
Finally, a new Postepay Web Security system was introduced in December to improve the security of Postepay and
telephone top-ups as well as bill payments made on www.poste.it, ww.postepay.it, www.bancopostaclick.it. The new
payments system requires that the Postepay card be used together with a cell phone that has been associated with the
card. A text message is sent to the phone containing a one-time password separately generated for each individual
transaction.
Banca del Mezzogiorno - MedioCredito Centrale SpA
With regard to the agreement signed by UniCredit SpA and Poste Italiane SpA on 20 December 2010, the acquisition of
the entire share capital of Unicredit MedioCredito Centrale SpA25 was completed on 1 August 2011. This transactions forms
part of the Ministry of the Economy and Finance’s plan to create a development bank serving southern Italy, called the
Banca del Mezzogiorno (Law 191 of 23 December 2009, art. 2, paragraph 162 – objectives and art. 2, paragraph 169 – operating activities). The bank will operate as a second-level bank providing support for businesses in the south of the country.
During the year MedioCredio Centrale developed its operations as a manager of public funds and, above all, of the Fondo
di Garanzia per le Piccole e Medie Imprese (a guarantee fund for small and medium enterprises) pursuant to Law 662 of
1996. The bank was awarded a nine-year contract to manage the technical, administrative, financial and accounting aspects
of the fund as part of a temporary consortium in partnership with other major banks.
On 5 September 2011 MedioCredito Centrale’s Board of Directors approved changes to the articles of association and
subsequently asked the Bank of Italy to issue its assessment report (provvedimento di accertamento). Having received
clearance from the supervisory authority on 21 November, the bank changed its name to “Banca del Mezzogiorno –
MedioCredito Centrale SpA” (in abbreviated form “BdM - MCC SpA”), and business purpose to reflect the role assigned to
the Banca del Mezzogiorno by the government.
From 2 January 2012 Banca del Mezzogiorno - MedioCredito Centrale conducts three lines of business:
• Industrial and agricultural credit, to support the development and growth of small and medium industrial and farming
enterprises (SMEs) in southern Italy by providing medium- and long-term loans;
• Guarantee Bank, providing back-to-back guarantees to Confidi (credit guarantee consortia) and co-guarantees to companies, also with the aim of supporting local Confidi and driving development and consolidation by offering high value added
services;
• Management of public funds and subsidies on behalf of government entities, in order to aid companies throughout the
country in accessing credit and developing their businesses, partly by using Italian and European public funds, such as
the Fondo Centrale di Garanzia per le PMI (a central guarantee fund for SMEs) and other forms of subsidy.
The Bank will offer both “standard” loans (typically of reduced average amounts) and ordinary loans (of higher average
amounts), based on a three-channel distribution model:
• Poste Italiane: consisting of 250 post offices specially enabled to sell the bank’s products to sole traders and small businesses;
• Banks: using distribution agreements with banks operating in southern Italy to provide co-financing for corporate clients;
• Agreements: using distribution agreements with Confidi, industrial districts and business clusters to provide financing,
above all for corporate clients.
The bank also plans to open branch offices around the area with the dual aim of:
• promoting and supporting distribution channels in commercialising its products, focusing in particular on the most complex transactions;
• contributing to risk management by having a presence on the ground.
To better define and distinguish between the different lines of business in which it operates, the bank can use the Banca
del Mezzogiorno (“BdM”) brand for its new lending activities and the traditional MedioCredito Centrale (“MCC”) brand in
relation to the management of government subsidies, which is segregated from the other banking activities, with a separate management structure, organisation, administration and accounting systems.
25. MedioCredio Centrale was founded as a bank to promote and manage government subsidies for businesses, designed to support economic development.
Poste Tutela SpA
Poste Tutela is a security company providing the following services:
• the movement of cash (transport, escorts, safe custody and the counting of cash);
• fixed and mobile surveillance;
• protection of sensitive information.
Poste Tutela provides these services to the Parent Company’s operating units and, from 2010, to customers outside the
Group, for whom it primarily carries out the movement of cash and valuables.
The company reports a healthy performance for 2011, with revenue from sales and services of 84 million euros (80 million
in 2010) and a profit of 1.2 million euros (971 thousand euros for 2010), reflecting an increase in the movement of cash and
valuables during the year.
72
BancoPosta
Revenues
(€m)
Current Accounts
Pre-printed bills
Income from investment of customer deposits
Other Revenues from current accounts and prepaid cards
Money Transfers (*)
Postal savings and investment
Post Office Savings Books and Certificates
Government securities
Equities and bonds
Insurance policies
Investment funds
Securities Deposits
Delegated Services
Loan products
Other products (**)
Total Revenues
2010
2,580
622
1,376
582
77
1,891
1,557
7
19
283
2
23
195
185
34
4,962
2011
2,802
595
1,629
578
71
1,888
1,504
9
80
263
11
21
179
167
34
5,141
% inc./(dec.)
8.6
(4.3)
18.4
(0.7)
(7.8)
(0.2)
(3.4)
28.6
n/s
(7.1)
n/s
(8.7)
(8.2)
(9.7)
n/s
3.6
31 Dec 2010
35,949
97,656
198,489
31 Dec 2011
38,021
92,614
208,187
% inc./(dec.)
5.8
(5.2)
4.9
2010
555,350
7,876
3,235
1,719
1,516
86,695
12,191
2011
526,266
7,207
3,128
1,694
1,434
85,406
12,290
% inc./(dec.)
(5.2)
(8.5)
(3.3)
(1.5)
(5.4)
(1.5)
0.8
31 Dec 2010
31 Dec 2011
% inc./(dec.)
5,533
5,575
0.8
Number of credit cards
379
437
15.3
Number of debit cards
6,261
6,290
0.5
Number of prepaid cards
6,794
8,217
20.9
(*)
This item includes all revenues from domestic and international money orders and inbound and outbound Eurogiros.
(**)
This item includes revenues from tax collection forms and tax returns, and revenue stamps.
Deposits
(€m)
Current Accounts(*)
Post Office Savings Books(**)
Interest-bearing Postal Certificates(**)
(*)
(**)
Average deposits for the period.
Deposits include accrued interest for the year.
Number of transactions
(‘000)
Pre-printed bills processed
Domestic postal orders (*)
International postal orders
Inbound
Outbound
Pensions and other standing orders
Tax services
(*)
Includes Vaglia Circolari giro drafts.
Volumes
(‘000)
Number of customer current accounts
BancoPosta’s service revenues are up 3.6%, rising from 4,962 million euros in 2010 to 5,141 million euros in 2011. This primarily reflects the positive performance of current account revenues, which are up from 2,580 million euros in 2010 to
2,802 million euros in 2011.
In detail, current account revenues are up 8.6% on 2010 (up 222 million euros), thanks to an 18.4% increase in interest
income on the investment of current account deposits, which has risen from the 1,376 million euros of 2010 to 1,629 million euros in 2011. This reflects both a 5.8% increase in average deposits (38.0 billion euros in 2011, compared with 35.9
billion euros in 2010), and the increased contribution of income from the investment in securities of private customers’ current account deposits.
Revenues from the processing pre-printed bills are down 4% on the previous year, declining from 622 million euros in 2010
to 595 million euros in 2011. This reflects a reduction in the number of bills processed during the year (526 million in 2011,
compared with 555 million in 2010).
Other revenues from current accounts and prepaid cards are down 0.7% from 582 million euros in 2010 to 578 million euros
in 2011. This reflects the fact that growth in fee income on the issue and use of prepaid cards, which is up from 88 million
euros in 2010 to 96 million euros in 2011 due to the greater number of cards in circulation, was offset by a reduction in
other revenues generated by current accounts (482 million euros in 2011, compared with 494 million euros in 2010). The
latter reduction reflects both a decrease in fees earned on the processing of pre-printed bills and the impact of the new
commercial offering for current accounts which, with the aim of encouraging the use of related products, gives customers
the option of eliminating annual current account charges and the annual fee for the Postamat card.
Revenues from Money Transfers were down 7.8% (71 million euros in 2011, compared with 77 million euros in 2010), primarily due to a reduction in the volume of domestic transfers (Domestic Money Orders), where revenues are 10.2% down
on 2010 (50.3 million euros in 2011, compared with 56 million in 2010). The volume of international transactions (Eurogiro
and Moneygram) is also down, resulting in a 2.9% decline in revenues (19.9 million euros in 2011, compared with 20.5 million in 2010). This is primarily due to a reduction in the fees applied under the agreements entered into with Moneygram.
The sale of Interest-bearing Postal Certificates and inflows of Post Office Savings Books funds, the income on which is
linked to a mechanism agreed with Cassa Depositi e Prestiti SpA26 tied to the achievement of net savings inflow targets,
contributed 1,504 million euros to BancoPosta’s service revenues (1,557 million euros in 2010). This reflects competition
from high-interest products offered by other banks and the reduced savings capacity of customers.
Post Office Savings Books deposits amount to 92.6 billion euros at 31 December 2011 (97.7 billion euros at the end of 2010),
whilst outstanding Interest-bearing Postal Certificates amount to 208.2 billion euros (198.5 billion euros at the end of 2010).
Asset and fund management27 reports an increase of 15%, with revenues up from 334 million euros in 2010 to 384 million
euros in 2011. This reflects the positive performance of bond placements (2.8 billion euros in 2011, compared with 0.755
billion euros in 2010), resulting in revenues of 80 million euros as opposed to 19 million euros in 2010. Revenues from the
distribution of insurance policies, in the form of management fees, are down, however (263 million euros in 2011, compared with 283 million euros in 2010).
Fees from the placement of funds are up from 2 million euros in 2010 to 11 million euros in 2011, essentially due to an
increase in fees passed on by BancoPosta Fondi SpA SGR.
Delegated service revenues amount to 179 million euros (195 million euros in 2010) and include revenues from the payment of INPS (National Social Insurance Institute) pensions, totalling 93 million euros (108 million euros in 2010) and the
payment of INPDAP pensions, totalling 12 million euros (13 million euros in 2010) and fees from the payment of pensions
and other sums for the Ministry of the Economy and Finance, totalling 57 million euros28.
26. The agreement for the three-year period 2011-2013 was signed on 3 August 2011 and subsequently amended on 12 December 2011 and 15 March 2012.
27. Asset and fund management includes the distribution of government securities, equities, bonds, life assurance policies, mutual investment funds and
commissions on safe custody accounts.
28. INPDAP and ENPALS pensions are include in the figure for INPS from 1 January 2012, in accordance with Law Decree 201 of 6 December 2011 (the
“decreto salva Italia”), converted with amendments into Law 214 of 27 December 2011.
74
Revenues from the distribution of loan products29 are down 9.7% (167 million euros in 2011, compared with 185 million
euros in 2010). The amount of loans originated is down 96 million euros (1,542 million euros in 2011, compared with 1,638
million euros in 2010) and origination fees are down from 138.5 million euros in 2010 to 122.7 million euros in 2011, whilst
mortgage origination fees are 13.6 million euros (15.3 million euros in 2010) on disbursements of 796 million euros (835
million euros in 2010).
Banca del Mezzogiorno - MedioCredito Centrale SpA
The operating results for the period since the investment was acquired on 1 August 2011 report, at the level of the Poste
Italiane Group’s consolidated financial statements for the year ended 31 December 2011, net interest income of 3.3 million
euros, profit for the period of 0.7 million euros and Equity of 139.3 million euros.
4.3 INSURANCE SERVICES
The Insurance Services business is run by the Postevita Insurance Group, a registered insurance group that includes the
parent, Poste Vita SpA (a wholly owned subsidiary of Poste Italiane SpA) and the subsidiary (wholly owned by Poste Vita),
Poste Assicura SpA.
Poste Vita SpA operates in ministerial Life Insurance Branches I, III and V and ministerial Non-life Branches I and II (accident
and medical) and, in addition to the shareholding in Poste Assicura, has a 45% shareholding in Europa Gestioni Immobiliari
SpA (controlled by Poste Italiane SpA).
Poste Assicura SpA, which began operating in April 2010, is authorised to sell non-life policies providing personal injury and
medical insurance, General Liability Insurance, Fire and Other Damage insurance, Care insurance, and Legal Protection and
Financial Loss insurance. The range of products has been divided into two principal lines: Personal Protection and Property
Protection.
With regard to regulatory developments, activities assuring the Company’s compliance with the new requirements
contained in the new European Solvency II30 regulations proceeded during the year. The process also took account of the
proposed “OMNIBUS II” Directive issued by the European Commission on 19 January 2011, which, of approved, will amend
the Solvency II Directive, allowing for, among other things, a gradual transition to the new Solvency regime.
With regard to the audit report issued to Poste Vita in February 2010 by the insurance regulator (Istituto per la Vigilanza sulle
Assicurazioni Private e di Interesse Collettivo, or ISVAP), and the ensuing statement of charges served on the Company in
July 2010, on 24 October 2011 the company was notified of ruling 4085/11 dated 18 October 2011, by which the regulator
has closed the proceedings.
On 14 September 2010 the pension fund regulator (the Commissione di Vigilanza su Fondi Pensione, or COVIP) began an
inspection of Poste Vita SpA relating to its “Postaprevidenza Valore – Piano individuale pensionistico – Fondo Pensione”
pension product during the period from 1 January 2009 to 30 June 2010. The results of the inspection, which was
completed on 18 February 2011, focused primarily on internal claims management procedures, the handling of complaints
and aspects of the sale of products. In July 2011 the company filed a submission with the regulator, describing the
initiatives taken and/or that it plans to take in response to the inspectors’ findings. The company has yet to receive any
response to its submission from COVIP.
29. Personal loans, mortgage loans, overdrafts, salary loans and credit protection.
30. The European Parliament approved Directive 2009/138/EC (Solvency II) in 2009. The Directive made major changes to prudential requirements in order to
assure the stability of insurance companies. The scope of the Directive went beyond solvency margins, extending to the determination of technical
provisions and investments eligible to cover those provisions.
On 22 June 2011 the Regional Tax Office for Large Taxpayers (Direzione Regionale del Lazio - Settore, Controlli, Contenzioso
e Riscossione - Ufficio Grandi Contribuenti) began an audit of certain aspects of the company’s taxation for the 2009 tax
year. The audit forms part of the normal two-yearly controls of so-called "large taxpayers" required by art. 42 of Law 388 of
23 December 2000. The outcome of the audit was set out in an official tax audit report sent to the company on 26
September, and primarily demanding payment of IRES and IRAP deriving from the non-deductible nature of the cost of a
number of “expired” claims that were not paid and still held in the provisions for claims expenses at 31 December 2009.
The company deemed it financially advisable to accept the report, in view of the potential cost of a dispute with what would
have been an uncertain outcome. To this end, on 24 October 2011 the company notified the Regional Tax Office for Large
Taxpayers that it accepted the findings pursuant to art. 5-bis of Legislative Decree 218 of 1997, in relation to VAT, IRES and
IRAP. Payment of the outstanding taxes, the reduced fines and the related interest, amounting to 1.5 million euros, took
place on 2 February 2012, thereby settling all outstanding amounts for IRES, IRAP and VAT in relation to this period.
On 15 September 2011 Poste Vita was notified of a payment demand deriving from the partial audit of a third party, totalling
1,900 euros. This relates to fines for the alleged failure to settle invoices for servicing fees collected during the 2006 tax
year. The demand in question is similar to others received for the 2004 and 2005 tax years, against which the company has
filed appeals, which are currently pending before the Provincial Tax Tribunal for Rome.
During 2011 the company’s commercial initiatives were aimed at maintaining the level of earned premiums from traditional
Branch I life insurance products, in addition to focusing strongly on pension products and the market for investment
products. In this connection, during the year the company launched “Postapresente Cedola”, a product that pays an annual
return on the capital invested with a guaranteed minimum yield.
With regard to index-linked policies sold during the year, before launching the distribution of products, the company entered
into forward purchase agreements for the underlying securities, with settlement once the policies have been sold. With
specific reference to the “Titanium” policy, distribution of which was launched in March and ended in July, following an
unforeseen shortfall with respect to expected sales of the policy, the forward purchases of securities underlying the policy
were approximately 750 million euros more than the value of the policies sold. The unwinding of these positions, given the
sudden deterioration in the overall situation regarding the market for Italian government securities, resulted in a total aftertax loss of around 42 million euros.
With respect to its investment policies in 2011, the company maintained a segregated asset management policy in order
to increasingly tailor investments to its obligations to policyholders and, at the same time, run a portfolio that can provide
stable returns in line with the market. The investment policy was based on a highly prudent approach, with the portfolio
primarily invested in government bonds and highly rated corporate bonds.
Given the exceptional degree of financial market turbulence and tensions surrounding sovereign debt issued by euro zone
members, which heightened from July on, the company decided to hold on to the government securities in its portfolio,
thus avoiding any short-term reductions in returns to policyholders. The company thus elected to take advantage of the
option granted by ISVAP Regulation 28 of 17 February 2009, as amended by ISVAP Ruling 2934 of 27 September 2011,
which extended application of the options for measuring financial instruments held for trading to 2011. This allows insurance
companies to not align the carrying amount of these instruments with their fair values at year end, unless there is evidence
of a lasting impairment. This has had a positive impact on the result for the year, amounting to approximately 513 million
euros (net of tax), equal to 1.3% of reserves at the end of the reporting period.
76
The fallout from the ongoing economic and financial crisis also had a negative impact on the life insurance market, which
saw a reversal of the growth trend seen over the previous two years, registering a drop of approximately 25% in new
premiums written during 2011 for both traditional Branch I products and products with a greater financial component. In
this context, Poste Vita achieved a significant result, with earned premiums of 9,514 million euros31 (earned premiums of
9,501 million euros in 2010), enabling the company to further boost its market share, which is up from the 10.8% of 2010
to 12.8% in 2011. These results were generated primarily by sales of traditional products, which amount to approximately
8.2 billion euros, up 26% on the 6.5 billion euros of 2010, in part thanks to the success of the new “Cedola” product and
the positive performance of the “Poste Previdenza Valore” product. In contrast, given the uncertainty and volatility in the
financial markets, earned premiums from Branch III products amount to 1.3 billion euros, down from the 2.9 billion euros
of 2010.
The company also consolidated its leadership in the pensions market, with 108 thousand new pension plan members,
taking its share of the total specific market to 32.7%.
As a result of the operating performance, technical provisions, computed by analysis of each contract in compliance with
relevant legislation and based on suitable actuarial assumptions, total 47.8 billion euros32, marking an increase of 11%
compared with the 43.2 billion euros of 2010. Non-life and life technical provisions amount to 38.3 billion euros (32.4 billion
euros in 2010), accounting for 80% of total provisions. These provisions were made to cover all the Company's obligations
and include mathematical provisions of 37.8 billion euros (32 billion euros in 2010), outstanding claims provisions of 342
million euros (332.5 million euros in 2010), and other technical provisions of 90 million euros (88 million euros in 2010).
Technical provisions for Branch III products total 9.5 billion euros, down on the 10.7 billion euros of the beginning of the
year due to the decrease in new policies.
Technical provisions for "accident and medical" products amount to 2.4 million euros (3.5 million euros in 2010).
The value of assets attributable to separately managed accounts and the company’s free capital are up from 32.8 billion
euros at the beginning of the year to current 38.6 billion euros, invested primarily in government securities (79% of the
portfolio) and highly rated corporate bonds (14%). The long-term component accounts for approximately 61% of the
portfolio, of which 52% refers to government securities, 6% to UCITS with guaranteed capital and the remaining 3% to
corporate bonds.
Class D investments amount to 9.4 billion euros at the end of the year (10.8 billion euros at the end of 2010), including 5.4
billion euros invested in structured bonds underlying index-linked products and in units of mutual funds underlying unitlinked products, for which Poste Vita does not provide any capital guarantee or guaranteed minimum return, and 4.0 billion
euros consisting of financial instruments underlying the index-linked products for which the company directly provides
capital guarantees and guaranteed minimum returns for customers.
In order to equip the company with the capital necessary to fund its expected growth, and at the same time ease any
pressure on the solvency margin resulting from a worsening of the structural crisis in the international financial system and
continuing financial market volatility, in 2011 Poste Italiane SpA subscribed a capital increase of 305 million euros.
As a result of the above, profit for the year is 80.3 million euros, which also reflects the impact of changes to the taxation
of insurance companies, with the IRAP rate increased to 5.9% by the so-called “Milleproroghe” (“Thousand Extensions”)
Decree, and the introduction in the so-called “Salva Italia” (“Rescue Italy”) Decree of the so-called “ACE” scheme (“ACE”
stands for economic development aid) providing tax relief aimed at encouraging companies to raise risk capital to
strengthen their balance sheets.
31. Including 9,509 million euros in life premiums and 5 million euros in non-life premiums, both gross of outward reinsurance premiums.
32. At consolidated level, these provisions total 44.3 billion euros, given that they take account of the value of the unrealised losses transferrable to
policyholders, calculated using the shadow accounting method which, as of the financial statements for 2011, is based on the prospective yield on each
separately managed account, considering an assumed realisation of unrealised gains and losses over a period of time that matches the assets and liabilities
held in the portfolio. The assumption of an immediate realisation of losses and gains, as used in previous years, is no longer applied from 2011 as it is
based on unrealistic assumptions which, whilst acceptable under conditions of modest financial market volatility, generate inappropriate results in an
exceptional situation such as the current one.
In 2011 the subsidiary, Poste Assicura, launched the Postaprotezione Domani product, offering customers who have also
purchased a Postaprevidenza Valore individual pension plan from Postevita SpA guaranteed payment of their pension
contributions in the event of disability or job loss. Two special corporate products were also created to meet the specific
insurance needs of companies in the Poste Italiane Group. These General Liability Insurance products were developed with
the invaluable support of reinsurance.
Overall, the company’s commercial strategy aimed to achieve a balance in inflows from the various product lines (Property,
Personal and Credit), with the aim of meeting the principal needs of its customers, also in view of the current
macroeconomic situation. A total of around 268 thousand new policies were issued during the year, with premium income
amounting to 42.8 million euros (24.7 million euros in its nine months in operation in 2010). Combined with the positive
performance of investment income, this has enabled the company to report a profit of 796 thousand euros (a loss of 765
thousand euros at the end of 2010).
4.4 OTHER SERVICES
Other Services include the complementary services provided by Poste Italiane SpA and certain other Group companies,
including BancoPosta Fondi SpA SGR, PosteMobile SpA and Consorzio per i servizi di telefonia Mobile ScpA, Europa
Gestioni Immobiliari SpA, Postecom SpA, PosteShop SpA and Poste Energia SpA,).
In addition, in 2010 Poste Italiane was one of the founders and promoters of the Global Cyber Security Center, a non-profit
organisation.
Poste Italiane SpA
Public services
Poste Italiane continues to develop new initiatives that take advantage of its Sportello Amico network that acts as a conduit
bringing the Public Sector closer to the general public, and as a partner in the management of delegable administrative
functions, thus speeding up and simplifying administrative processes. The rollout of new health-related services was
completed in 2011, including payment for medical examinations in real time (launched in July in collaboration with the
Florence 10 local health authority), thanks to which patients can pay for the services offered by participating health providers
and get a receipt directly from the health centre or hospital concerned. These initiatives are of great social value and
combine the application of advanced technology with an original model for public services.
The extension of previously launched services to include other public bodies continued in 2011: by the end of the year, ten
public entities (including municipalities, local health authorities and central government entities) were provided real-time
services via Poste Italiane’s "Sportello Amico" network.
BancoPosta Fondi is the Poste Italiane Group company engaged in the management of collective investment funds (the
establishment, promotion and management of BancoPosta funds and the marketing of third-party funds) and of Individual
Investment Portfolios.
With regard to collective investment funds, two new proprietary buy-and-hold mutual bond funds were launched during
2011. Following changes to the terms and conditions, the BancoPosta CentoPiù fund was relaunched on 19 July 2011 under
the new name of BancoPosta Liquidità Euro, managed by BancoPosta Fondi SGR.
78
With effect from 1 July 2011 the new taxation treatment for Italian-registered mutual funds (conversion into law of Law
Decree 225 of 29 December 2010, the so-called “Milleproroghe” Decree) came into force. The system of taxing the
increase in the net asset value of Italian-registered funds has been abolished and replaced with taxation of the individual
investors. The company has implemented the necessary changes to operational processes and IT systems to ensure
compliance with the new tax treatment.
PosteMobile SpA
PosteMobile is an MVNO (Mobile Virtual Network Operator), operating in the telecommunications sector as a mobile
Enhanced Service Provider.
During 2011 the company continued to strengthen its position in the MVNO market, accounting for over 50% of the total
number of lines in Italy. Within a very tough competitive environment, PosteMobile focus on maintaining and building on
its “value strategy”, developing promotions designed to drive customer acquisitions, gaining new customers as a result of
MNP (Mobile Number Portability) and acquiring “high value” customers. At the end of 2011 the number of lines totals 2
million (1.7 million at the end of 2010), with over 1.9 million used by consumers and more than 120 thousand by businesses.
The number of SIM cards sold during the year is almost 806 thousand, with 750 thousand sold to consumers and more
than 55 thousand to businesses (724 thousand SIM cards sold to consumers and 52 thousand to businesses in 2010).
This strategy also involved a review of its offerings, which resulted in the launch of a number of new features for consumer
customers, including new fixed price plans renewable on a weekly basis (the “30 e Lode” and “60 e Lode” plans) and price
plans for contract customers (the “0 Pensieri Small” and “0 Pensieri Medium” plans).
As noted above, the company also continued to expand its range of value added services, which have taken on a central
role in PosteMobile’s positioning. 2011 saw the launch of the PosteMobile Store which enables users, including those with
Wi-Fi access, to download an array of digital content and applications, including the “Pago Bollettino” application for paying
bills using the barcode on pre-printed bills, marking a further step in PosteMobile’s commitment to integrating
telecommunications with financial and postal services. In this regard, the number of mobile payment transactions carried
out by PosteMobile customers during the year amounts to 18.7 million (12.3 million in 2010, up 52%), including 7.0 million
outgoing payments (5.1 million in 2010, up 38%). The value of transactions amounted to 198 million euros, up on the 138
million euros registered in 2010.
In terms of product sales, the most successful was “Telefono X Tutti”, enabling customers to buy a new cell phone by
making an initial downpayment on delivery of the phone and paying the rest in 24 monthly instalments. This was available
to both pay-as-you-go customers (from September) and contract customers (from December).
In terms of the business offering, 2011 saw a strong focus on the SOHO (Small Business Home Business) segment, with
both pay-as-you-go and bundled offerings. The market as a whole has taken to this type of offering which, whilst requiring
upfront payment for usage, enables companies to keep a tighter rein on expenditure and significantly cut the fixed costs
associated with each company SIM card.
Finally, in April 2011 the transfer of Poste Italiane SpA’s telecommunications unit to PosteMobile SpA was completed, with
the aim of integrating management of the Group’s mobile and fixed line telecommunications assets and obtaining the
related synergies. In this regard, 2011 was taken up by integration and restructuring of the unit, with the aim of identifying
and implementing potential improvements and synergies with existing infrastructure.
Consorzio per i Servizi di Telefonia Mobile ScpA, which is wholly owned by the Group (51% Poste Italiane SpA and 49%
Poste Mobile SpA), has been assigned the role of providing Poste Italiane with electronic communications networks and
the related platforms, systems and terminals, by coordinating, organising and managing the resources, equipment and
people made available by the consortium members. The consortium is also responsible for supplying the related mobile,
fixed-line, integrated and value added services.
During the year the company was contracted by the Parent Company to conduct a number of projects, with the most
important being: the “Supply of telecommunications services and the central system, of peripheral software applications
and specialist support services for the development and management of Poste Italiane’s Electronic Postman project”; the
“Supply of the services involved in the generation and validation of Postepay transactions carried out using a one-time
password”; the “Supply of telephone assistance via text message in connection with the Carta Acquisti programme”.
The company operates in the real estate sector, managing and developing properties transferred from the Parent Company.
Due to the nature of their properties, the service is mainly provided to large customers, often Public Sector entities.
The difficult economic environment also impacted on the real estate sector in which the company operates, resulting in a
downturn in demand and a general increase of the average time required to sell properties. Moreover, the specific nature
of EGI’s portfolio and above all the fact that its properties are sited in secondary locations, and require upgrading in order
to bring them up to the standards needed for the various uses, has resulted in a significant gap between demand for the
company’s properties and the number on offer.
In this context , the company sold a property located in Via Mazzini in Carrarra (formerly leased to the Parent Company) by
public auction. A number of lease agreements were also entered into and several existing leases were renegotiated.
On 17 November 2011 the tax authorities notified the company of three notices of assessment for the years 2006, 2007
and 2008 (beginning at the end of 2010 with the audit for 200833), resulting in the identification of the same irregularity in
each of the three years in the official tax audit report for 2008 (dated 16 March 2011). This concerned the application, for
the purposes of IRES, of art. 11, paragraph 2 of Law 413/199134 to properties of historical and artistic interest owned by EGI
and leased by it to third parties. This resulted in a demand for payment of IRES of 2.4 million euros, in addition to a fine of
2.4 million euros and interest of 0.3 million euros, making a total of 5.1 million euros. The company has appealed the
findings before the Provincial Tax Tribunal for Rome, where the dispute is currently pending.
Postecom SpA
Postecom SpA is the Poste Italiane Group company engaged in technological innovation, specialising in the development,
operation and integration of internet, intranet and digital certification services. The most important areas of specialisation
relate to digital certification and communications, e-payments and e-commerce, document management, e-Government
projects, particularly for health services and local taxation, e-procurement and e-learning, in addition to advanced IT security
services.
In 2011 the IT sector continued to suffer from a lack of investment by companies, reflecting uncertainty over economic
recovery in Italy and at global level. Despite the fact that innovation is one of the keys to renewed growth, businesses have
adopted a traditional approach, primarily focusing on the launch of initiatives aimed at tactical innovation of their offerings
and output at the expense of a strategic adoption of ICT systems.
Despite cuts in public expenditure on the digitalisation of administrative processes, the government continued with the
2012 e-Government Plan, bringing together a range of digital innovation projects designed to benefit health, education,
justice and business . The aim is to modernise the Public Sector and make it more efficient and transparent, thus improving
the quality of services provided to the public and to businesses and cutting the cost to the country.
The company developed its organisational model during the year in order to boost its market presence and the process of
innovating its products and services. The key elements of this process were the reorganisation of sales and the creation of
marketing and customer service teams. In addition, in order to combine efforts to develop the Group’s web presence, the
Parent Company transferred its web-related activities and the related staff to Postecom.
PosteShop SpA
Is the Group company that sells leading branded products through the post office network, through direct or catalogue
sales, over the internet at www.posteshop.it and via the Contact Centre. In addition, by leveraging Poste Italiane’s specific
capabilities, it is able to supplement its offering with services such as home delivery for catalogue orders, payment by direct
debit from a BancoPosta account, hire purchase and promotional mobile prices for people buying a cell phone.
33. On 22 December 2010 the tax authorities began a limited audit of the accounting entries made for the purposes of income tax, IRAP and VAT (relating to
certain items in the declaration for the 2008 tax year). As a result of this audit, which was completed on 16 March 2011, the tax authorities acknowledged
that EGI’s approach to assessing the tax payable on gains from the sale of properties was legal and correct.
34. Article 11, paragraph 2 of Law 413/1991 (the "attachment" to the 1992 Budget Law) established that income from properties of historical or artistic interest
should be determined by applying the lowest of the estimated tariffs for housing in the census district in which the building is located.
80
The Company also runs 217 "Shop in Shop" outlets, shops set up in the public area of main post offices, where it is possible
to buy books, school and other stationery, toys and gifts, CDs, DVDs and other items.
During the year the company continued with its reorganisation of its sales channels, modifying its sales model with the aim
of converting from a standardised offering for each channel to an offering designed for each channel’s target customers.
The company has also begun the process of improving the layout of its “Shop in Shop” outlets, work on the revamp of its
e-commerce platform and the development of sales via postmen and women forming part of the Innovative Services unit.
In terms of commercial initiatives, the sale of lottery scratch cards, launched in the previous year, continued to be a
success, with sales being extended to 1,500 post offices. This resulted in commissions of 2.2 million euros on total takings
of over 28 million euros.
With regard to the Antitrust Authority’s initiation of a PB/455 procedure regarding the company in 2009, in order to
investigate alleged infringements connected with the advertising material used by PosteShop to promote the activities of
the Kipoint franchise retail network, on 30 March 2010 the Authority decided to fine the company 100 thousand euros. The
appeal against the fine before Lazio Regional Administrative Court was turned down on 10 November 2010 and Posteshop
SpA filed appeal with the Council of State on 11 March 2011. The appeal is pending.
Poste Energia SpA
Poste Energia is the Group company set up to procure electrical energy from the national grid in order to meet the needs
of the Parent Company and the subsidiaries, SDA Express Courier and Europa Gestioni Immobiliari.
Poste Energia provides power procurement advisory and cost analysis services to Postel and its subsidiary, Docutel, as well
as providing power consumption reports for each offtake point.
During the year the company continued to pursue its pre-established targets, primarily relating to energy procurement,
contract management and the provision of value added energy services.
With regard to accounting regulations, Poste Energia has adopted IFRS as of the preparation of its financial statements for
2011. This has been done to ensure consistency with the Parent Company and in view of the fact that the limits for adoption
of international accounting standards, as defined by Legislative Decree 173 of 3 November 2008, have been reached.
Global Cyber Security Center Foundation
In 2011 Poste Italiane renewed its commitment to research into and raising awareness about cyber security via the
Global Cyber Security Center Foundation, whose aim is to promote and carry out studies, research, projects and
initiatives relating to IT and telecommunications security.
In addition to the founder members ENEL and MasterCard, ALMAVIVA has also decided to participate.
In 2011 the Foundation continued with the research begun in 2010 aimed at: the study of Cyber Security strategies; the
study of the strategic, legal and operational aspects of managing digital identities35; internet security; guidelines for
SCADA (Supervisory Control And Data Acquisition) systems security36 for the energy sector; the platform for the
exchange of online fraud information between public security agencies and banks.
In addition to taking part in numerous related national and international events and workshops, in 2011 the Foundation
was engaged in raising awareness of security-related issues by producing a newsletter and publishing articles in leading
scientific journals.
35. The digital identity is the set of data and resources provided by an information system to a particular user.
36. "Supervisory Control And Data Acquisition" refers to a distributed information system for the electronic monitoring of physical systems.
Total assets under management in relation to the company's lines of business at 31 December 2011 amount to 17.2 billion
euros (16.1 billion euros at 31 December 2010, marking an increase of 7%). Third-party and proprietary collective
investment funds have assets of 3,492 million euros (3,629 million euros at the end of 2010), whereas Individual Investment
Portfolio assets managed for the insurance company, Poste Vita, amount to 13,693 million euros (12,484 million euros at
31 December 2010).
Gross inflows into collective investment funds amount to 887 million euros, compared with the 934 million euros of the
previous year (down 5%), whilst redemptions amounted to 1,022 million euros, up on the 839 million euros of 2010. The
performance of gross inflows and redemptions resulted in a net outflow of 135 million euros, compared with a net inflow
of 95 million euros in 2010.
The principal contribution to total gross inflows in 2011 came from income distribution bond funds of the “Buy-and-hold”
type, which attracted inflows of 406 million euros (equal to 46% of total inflows), followed by bond funds (360 million euros,
equal to 41% of total inflows), equity funds (60 million euros) and balanced funds (37 million euros). Otherwise, customers
invested in flexible funds (24 million euros). Redemptions were concentrated mainly in bond funds (50% of the total).
The company reports a profit of 8.5 million euros (17.1 million euros for 2010).
PosteMobile SpA
In keeping with the commitments set out in its Business Plan, during 2011 PosteMobile continued to achieve growth,
consolidating its financial independence. The results reflect increased revenues, driven partly by customer acquisitions and
constant attention to costs.
Revenues from sales and services are up 60.8% (276.5 million euros in 2011, compared with 171.9 million euros in 2010),
driven by an acceleration of growth in all segments of the business and an increase in the basis of consolidation37. Voice
services, with revenue of 175 million euros in 2011 (136 million euros in 2010), rose due to expansion of the customer base
and an increase in traffic volumes.
The cost of goods and services kept pace with revenue, increasing as a result of traffic growth from 140.7 million euros in
2010 to 216.0 million euros in 2011.
Overall, the performance resulted in operating profit of 26.3 million euros (9.5 million euros in 2010) and profit for the year
of 16.6 million euros (5.5 million euros for 2010).
The sale of the property in Carrarra, accounted for in properties held for sale, generated revenue of 2.6 million euros and a
gain of 1.4 million euros (a gain of 2.1 million euros in the consolidated financial statements), whilst rental income totals
16.8 million euros (18.6 million in 2010). Overall, revenues from sales and services are down from 40.6 million euros in 2010
to 19.4 million euros in 2011, reflecting gains of 21.9 million euros generated in 2010 on the sale of two properties
accounted for in investment property. The cost of upgrading its property assets (excluding technical consultancy) amounts
to 2.2 million euros (1.9 million euros in 2010).
Operating profit is thus down from 30.1 million euros in 2010 to 6 million euros in 2011, whilst profit for the year is 6.4
million euros (18.3 million euros for 2010) and takes account of a 1.6 million euro reduction in income tax expense for
previous years and lower deferred tax liabilities on gains38 following the conclusion, on 16 March 2011, of the limited tax
audit regarding certain items in the tax declaration for the 2008 tax year. On completion of the audit, which began in
December 2010 and which found that the company had correctly and legitimately calculated taxation on the gain on
37. The total contribution to revenues from the telecommunications unit transferred from Poste Italiane amounts to 53.9 million euros.
38. At 31 December 2011 deferred tax liabilities amount to 9.4 million euros, compared with 14.8 million euros at 31 December 2010.
82
property sales, EGI revised its income tax expense for 2010 with respect to the amount accounted for in the financial
statements for 2010.
Postecom SpA
The company’s revenues from sales and services are up 5.7% in 2011 (79.7 million euros in 2011, compared with 75.4
million euros in 2010). This increase is essentially due to income from the development and supply of web-based
information services for Group companies, which is up 21% on the previous year and accounts for 69% of total revenue
(60% in 2010). The cost of goods and services is up from 41.7 million euros in 2010 to 50.7 million euros in 2011, primarily
reflecting the supply of the technical services necessary to ensure provision and development of the services sold primarily
to the Parent Company, using external contractors.
Operating profit for the year is 5.8 million euros (0.1 million euros in 2010) and profit for the year is 4.1million euros (a loss
of 1.1 million euros for 2010) This takes account of finance income (1.6 million euros) generated by the sale to Postel SpA,
on 24 March 2011, of the company’s shareholding in the Poste Link consortium.
PosteShop SpA
The general downturn in consumer spending and reorganisation of the sales network resulted in a 15% reduction in
revenues from sales and services (46 million euros in 2011, compared with 54 million euros in 2010 ) accompanied by a
21% decrease in the cost of goods and services from 52 million euros in 2010 to 41million euros in 2011, partly as a result
of an improvement in the company’s cost controls, involving the optimisation of distribution procedures and the
rationalisation of stocks.
Overall, the company’s performance resulted in operating profit of 2.1 million euros ( a loss of 2.3 million euros for the
previous year).
Poste Energia SpA
The company's revenues from sales and services increased in 2011 from 74.5 million euros in 2010 to 81 million euros in
2011, primarily due to rising energy prices. Operating costs are also up, increasing from 74.3 million euros in 2010 to 81
million euros in 2011.
4. Areas of business | 5. Distribution channels 83
5. DISTRIBUTION CHANNELS
Over the years, in response to the diverse requirements of its customers, Poste Italiane has activated several contact
channels including Counters, Financial/Loan Product areas, the network of PosteShop outlets consisting of “Shop in
Shops” set up in post offices, the PosteImpresa network, the Contact Centre, screen-based systems, the website
and just recently the most innovative social networks, Facebook and Twitter and the YouTube channel, which confirm
the Group's willingness to continue its development path, by optimising customer management and its positioning
on the web, and innovating online communication.
Sales and contact channels regarding Retail customers, Small and Medium Enterprises (SMEs) and some Local
Government customers are supervised by the Private Customer function, which coordinates the network of post
offices and contact centre services. The Large Account and Public Sector function is responsible for developing
business with Large Accounts and some Local Government and Central Government customers.
5.1 RETAIL/SME
As already mentioned in the section on Organisation, the Private Customer function was restructured in 2011 thus
allowing the Company to focus on sales and sales support processes and boost its capacity to protect market share
in order to develop growth opportunities in the Retail and Business segments.
These efforts arose from, among other things, the introduction of standards that guarantee a consistent approach at
local level and enhancement of the flexibility tools provided for in the new Collective Labour Contract, in order to bring
the opening hours of retail and PosteImpresa offices into line with customers' requirements.
In this regard, activities aimed at enabling rapid customer access to services continued via the queue management
system (2,857 systems up and running at the end of 2011) and the acquisition of 1,100 ATMs to extend the current
national network (the total nationwide network includes more than 6,000 ATMs).
Additional separate Postamat windows have also been introduced in some post offices. As of 31 December 2011,
2,653 post offices have Postamat tills (2,609 as of 31 December 2010), with a total of 3,648 counters reserved for
BancoPosta current account holders (3,594 as of 31 December 2010).
The PosteImpresa channel, which at 31 December 2011 comprises 258 PosteImpresa Offices and 213 Specialist
Areas and registers an increase in the number of PT-Impresa customers, has continued to play an important role in
developing business with SMEs, strengthening its presence in markets with higher concentrations of this type of
customer. Indeed, activities were focused on proactive customer management, which was also partly enabled
through the upgrading of IT systems. In particular, a new module of the CRM (Customer Relationship Management)
tool was introduced, aimed at increasing customer loyalty via cross-selling and up-selling techniques.
84
5.2 BUSINESS AND PUBLIC SECTOR
During the year the Company continued its efforts to step up customer management and development in all phases
of the marketing process (pre-sales, sales and after-sales), with the aim of maintaining postal volumes with large customers, and increasing sales of innovative services.
Specifically, activities focused on:
• efforts to keep business with large and public sector accounts that are increasingly subject to competition (commercial staff were engaged in helping end users find better solutions for their mailing and payment needs);
• strengthening the degree of specialisation among commercial staff in regard to market segments with the greatest sales potential, such as local authorities, healthcare providers and local tax offices;
• definition of new development strategies with the help of commercial agreements with partners that can disseminate innovative service offerings;
• development of public sector projects. In particular, the Company was awarded the contract regarding the Fifteenth
National Census of Households and Dwellings, which entailed delivery of questionnaires to households and other
materials to municipal Census Offices. Moreover, following the agreement signed with the Ministry of the Interior
– Traffic Police, a branch of the Integrated Notification Service centre in Fiumicino, called the National Infraction
Assessment Centre, will be set up to manage the fining procedure relating to automatically recorded infractions.
5.3 THE CONTACT CENTRE AND THE INTERNET
The "Poste Risponde" Contact Centre continues to play a key role in customer relationship management and in supporting Business functions and Group companies. It handled a total of approximately 20 million contacts during the
year, 90% of which for the captive market.
In addition to customer relationship management regarding financial, postal and internet matters, the main services
provided in support of internal Group activities regard: assisting the post office network with enquiries regarding regulations, operations and product and service support; after-sales services and assistance to post offices regarding
Poste Vita and Poste Assicura products; customer care regarding Poste Shop products; and assistance to the sales
network regarding Poste Mobile products
The most important initiatives during the year include:
• integration of Contact Centres and Centralised Service Team operating centres that deal with the processing of
financial product and service matters, in order to improve and complete the after-sales service (specialised support
regarding Conto InProprio, Conto Più, Conto Click, etc.);
• establishment of Specialist Units as part of the Centralised Service Teams to handle loans and probate issues in
order to provide specialist support to post offices and improve integration with front-end staff;
• activities aimed at gathering suggestions for improvements to service quality, such as customer satisfaction surveys focusing on assistance at post offices, and the setting up of working groups involving the participation of 12
post office managers;
• stepping up assistance to users of the www.poste.it website and related services, regarding such cases as loss
of access data and/or denial of access, which require swift intervention;
• setting up of campaigns in support of the distribution network which, via booking of appointments at post offices
and/or Posteimpresa offices, are aimed at disseminating specific products (e.g. PosteVita’s pension products, bundled products aimed at specific targets).
The web distribution channel, managed by the Group company Postecom via the www.poste.it website, represents
an access point for online services for around 7.0 million retail and business customers.
In 2011, in order to strengthen the Company's web presence and image, simplify means of identifying information
content and improve access to services offered for all types of customer (Private, SMEs, Large Account and Public
Sector), an initiative was launched to restyle the website, which affected both the pre-login and post-login areas.
5. Distribution channels 85
Another new element in customer relationship management was the opening of an official Poste Italiane page on the
social networking site Facebook, as an everyday channel for engaging with and dialoguing with customers, which saw
more than 31 thousand friends register during the year. Belief in the importance of social networking also led the
Company to use the YouTube channel to disseminate official corporate videos (institutional and commercial tutorials),
and activate the Poste Deliveries channel on Twitter, where assistance is provided on tracking postal products.
The process of web positioning development was launched. This will involve a programme of change that will encourage convergence and integration of the virtual and physical channels in order to achieve new customer targets and
optimise internal working processes. The main activities during the year designed to enable use of increasingly
advanced services provided via the www.poste.it website include:
• construction of a new technological platform regarding digital services for retail customers (Postemailbox offering);
• creation of a new retail customer registration procedure that centralises all customer data at Customer Relationship
Management (CRM) and enables simplification of contract activation for both customers and the Company;
• re-engineering of various applications, with a view to making the process of changing website content faster and
more flexible, as well as the addition of a new search engine to make web content browsing more user-friendly.
This new engine, based on Cogito technology, will enable searching of the www.poste.it website, as well as all the
main Poste Italiane Group websites;
• activation of a new search service for post offices, integrated with Google Maps, which, in addition to all the usual
post office search options (opening times, available counter services, post office ATMs), will offer all the potential
of geolocalisation and proximity services (find nearest post office, satellite view, street view, route planner and others).
Finally:
• post-login services for retail customers of the PosteVita insurance group have been expanded, partly to adapt them
to the new Postemailbox platform, and a new area reserved for business customers, of which the main service
regards management of employee termination benefits, has been created;
• some of the applications of the PosteShop website have been upgraded, regarding the section of the public area
that showcases products and the e-commerce area.
86
6. HUMAN RESOURCES
6.1 WORKFORCE DATA
The workforce employed by the Poste Italiane Group and the Parent Company breaks down as follows:
Number of employees(*)
Average
End of reporting period
Permanent workforce
Senior managers
Middle managers
Frontline staff
Back-office staff
2010
718
14,752
128,505
5,474
2011
734
14,853
126,470
4,367
31 Dec 2010
717
14,538
125,953
4,357
31 Dec 2011
712
14,829
123,889
4,048
Total workforce on permanent contracts
149,449
146,424
145,565
143,478
42
33
44
44
34
32
51
48
149,524
146,512
145,631
143,577
Traineeships
Apprenticeships
Total
Average
Flexible workforce
2010
2011
Temporary contracts
Fixed-term contracts
125
2,195
140
1,801
Total
2,320
1,941
151,844
148,453
Total permanent and flexible workforce
(*)
All workforce data is expressed in full-time equivalent terms.
6. Human resources 87
Poste Italiane SpA
Number of employees(*)
Average
Permanent workforce
End of reporting period
2010
2011
31 Dec 2010
31 Dec 2011
Senior managers
Middle managers (A1)
Middle managers (A2)
Grades B, C and D
Grades E and F
597
5,725
8,081
126,294
5,419
584
5,788
7,890
124,111
4,321
584
5,705
7,844
123,727
4,311
556
5,783
7,806
121,485
4,005
Total workforce on permanent contracts(**)
146,116
142,694
142,171
139,635
23
-
14
-
12
-
17
-
146,139
142,708
142,183
139,652
15
2,126
76
13
2,077
52
14
2,190
34
12
1,864
42
Traineeships
Apprenticeships
Total
(**)
including:
- Seconded
- Suspended without pay
- Seconded to Group companies
Average
Flexible workforce
2010
2011
Temporary contracts
Fixed-term contracts
11
2,081
25
1,701
Total
2,092
1,726
148,231
144,434
Total permanent and flexible workforce
(*)
All workforce data is expressed in full-time equivalent terms.
88
6.2 TRAINING
Training activities supported implementation of organisational changes in Postal Services, business innovation for Private
Customer activities and specialist technical refresher courses for staff positions.
A total of 435 thousand person days of training were provided, of which 247 thousand in the classroom and 188 thousand
through e-learning.
CLASSROOM COURSES (person days)
31 Dec 2010
Senior
managers
43,614
3,029
156
46,799
31,955
4,329
454
36,738
146
149
33
328
239
422
49
710
151,118
61,421
1,248
213,787
154,535
47,922
765
203,222
2,272
4,467
261
7,000
2,144
4,486
411
7,041
197,150
69,066
1,698
267,914
188,873
57,159
1,679
247,711
Grades
B-C-D-E-F
Postal Services
Financial Services
Private Customer/LAPS
Central functions
Total
31 Dec 2011
Middle
managers
(A1 e A2)
Total
Grades
B-C-D-E-F
Middle
managers
(A1 e A2)
Senior
managers
Total
E-LEARNING COURSES (hours)
31 Dec 2010
Senior
managers
43,837
471
5
44,313
69,007
3,424
12
72,443
861
24
-
885
3,680
696
9
4,385
557,689
126,326
17
684,032
1,099,141
162,634
1,582
3,318
3
4,903
5,975
6,488
603,969
130,139
25
734,133
1,177,803
173,242
83,885
18,075
3
101,963
163,584
24,061
Grades
B-C-D-E-F
Postal Services
Financial Services
Private Customer/LAPS
Central functions
Total
Total person days
31 Dec 2011
Middle
managers
(A1 e A2)
Total
Grades
B-C-D-E-F
Middle
managers
(A1 e A2)
Senior
managers
Total
68 1,261,843
82
12,545
171 1,351,216
24
187,669
Regarding classroom training, in support of business development in the credit sector, the "Credit culture and techniques"
training course was launched for the Private Customer function. Aimed at more than 5,500 staff including branch and post
office managers and local sales department managers from southern Italy involved in the Banca del Mezzogiorno project,
this course was designed to develop the skills involved in processing loan applications and the methods for presenting
products to customers.
Moreover, to give fresh impetus to sales network activities, a training course on advanced sales techniques and methods
was developed for around 400 local sales staff. Training was also given to 2,800 new counter staff and around 300 post
office managers who are to act as trainers with a view to improving knowledge dissemination in post offices.
In the Postal Services segment, initiatives were implemented, amongst others, in support of change management,
involving more than 2,000 people performing various roles. The programme also included teaching modules on
communication, problem solving and time allotted to team building. Training also continued in support of the Innovative
Services Unit project, aimed at developing customer management skills, which involved around 1,000 staff including
postmen and women and foremen and women.
Training courses aimed at operating staff primarily regarded the Real Estate, Information Technology, Administration and
Control, Safety & Security and Internal Auditing functions at BancoPosta.
Around 200 individual training courses were provided, aimed at upgrading the managerial skills of staff involved in
development processes.
On the e-learning front, 30 training courses and online programmes were provided to more than 146,000 staff39, with a total
of over 1 million enrolments and an average of around 7 courses per person.
For staff in the Private Customer function, ongoing regulatory and procedural developments regarding anti-money
laundering once again required special initiatives in 2011, entailing provision of 5 courses to staff operating in post offices,
with a total of more than 120,000 enrolments.
A course entitled “Market abuse in practice” dealt with issues relating to specific cases of potential corporate crimes;
aimed at post office managers and retail customer sales specialists, the course registered participation by more than 17,000
staff.
With a view to explaining the obligations provided for by Bank of Italy regulations aimed at safeguarding the accuracy and
transparency of contractual conditions, and indicating which transactions and services are affected by advertising and precontract information regulations, a "Banking Transparency" training course was launched. The course, which will continue in
2012, was aimed at customer contact staff and involved more than 35,000 participants.
As already mentioned, to support the launch of the Banca del Mezzogiorno, an integrated training course (classroom and
e–learning modules) was started up involving more than 5,500 staff. The e-learning component entailed provision of 4 online
courses to staff in the regions given priority in the activation (Abruzzo, Sardinia, Campania, Molise, Basilicata, Calabria,
Puglia and Sicily). The courses are aimed at acquiring technical knowledge of key loan products for businesses, as well as
in-depth information on the world of credit (players, roles, tools, guarantees).
With a view to upgrading the skills of savings and investment product sales staff regarding markets and financial
instruments, a programme including 7 online courses on savings management was launched; the initiative was carried out
by ABIformazione and personalised for Poste Italiane thanks to intensive specialised tutoring. During 2011 the project
involved more than 2,300 retail customer sales specialists.
Regarding activities connected with the 2011 ISTAT Census, an online course was provided in September that enabled all
counter staff, with a total of more than 44,000 participants, to learn the correct procedures relating to the management,
filing and distribution of the documentation received, in accordance with legal provisions.
Finally, the programme regarding the certification of professional requirements for insurance service operators resulted in
the issue and signature of more than 149,000 certificates, using a tried and tested system of training programmes,
processes and dedicated management systems, to the more than 18,000 operators who work in this sector.
Regarding e-learning initiatives for the Postal Services function:
• provision of the "Basic computer literacy" training programme was completed in December 2011. The training included 771
classroom sessions, focused on practical exercises aimed at learning the main functions regarding personal computer
use, and the basic skills required to access the training environment. Around 7,000 staff from all parts of Italy were
involved.
• The “Electronic Postman – payments via POS” course, aimed at illustrating cash-on-delivery payment operating procedures via PosteMobile cards and SIMs, took place. Provided via both e-learning and mobile learning using palmtop computers, the course involved around 10,500 postmen and women.
• With a view to illustrating the operating procedures regarding management of other operators' mail, in connection with
deregulation of postal services, 3 online courses were provided, tailor-made to meet the requirements of different participants. The programme, aimed at Network Centre and Delivery Centre staff, registered more than 58 thousand participants.
Finally, with a view to speeding up and facilitating enrolment procedures regarding courses on regulations for staff who
have recently taken up new positions, a Regulations Schedule was activated in May. In the space of a few months, this
constantly updated catalogue of courses available to all training facilities has enabled automatic monitoring and registration
of high levels of compulsory enrolment (an average of 91.4%).
39. Number of staff expressed as headcount rather than as full-time equivalents.
90
Funding
As part of the activities of the Ente Bilaterale per la Formazione e Riqualificazione del Personale (the Bilateral Agency for
Staff Training and Retraining), efforts continued to recover costs relating to training activities from both the Solidarity Fund
and the Fondimpresa inter-professional fund.
With respect to the Solidarity Fund, 17 reimbursement applications were submitted to INPS regarding 39 training
programmes involving reimbursements totalling around 19 million euros, of which 83% relate to classroom activities and
17% to e-learning courses.
Regarding Fondimpresa, funding for 16 training plans with a value of around 2 million euros was applied for, whilst 300,000
euros was received during the year for 5 plansi.
6.3 HUMAN RESOURCES MANAGEMENT
Recruitment policies in 2011 primarily regarded:
• engagement of young people to strengthen and rejuvenate front-end staff (counter operators, commercial specialists and
so-called multilingual staff);
• recruitment, mainly in the business and IT functions, of staff with specific professional skills that would be difficult to find
within the Company, including staff allocated to the Banca del Mezzogiorno project;
• engagement of young interns with high development potential, primarily graduates in engineering and economic subjects, and recruitment of those finishing their internships during the year.
Internal recruiting and selection procedures (enhancement of graduates in service and job posting) were also stepped up;
these are vital in meeting emerging needs and at the same time ensuring staff motivation and development.
Moreover, in line with the agreements with the labour unions of January 2006 and July 2008, the process of integrating
within the Company people who had previously worked for Poste Italiane on fixed-term contracts was completed.
As usual, in applying staff management, development and training policies, the Company used the performance appraisal
procedure for middle managers and other staff members in 2011, involving appraisal of approximately 82 thousand
employees (compared with around 79 thousand in 2010) and more than 5,000 appraisers.
Eight sessions were held at an Assessment Centre to find suitable candidates for senior positions; 64 middle managers
were involved in the assessments. 98 other sessions were held in parallel, with 570 existing clerical and executive staff to
identify employees suitable for career development. Furthermore, 18 new graduates were assessed in three sessions for
placement in operational and commercial positions at post offices.
As in previous years, remuneration systems were revised in 2011 via application of multiple incentive40 schemes that were
differentiated in the manner they worked, their purpose and targets. These structured incentive schemes were
accompanied by a merit-based approach that rewards outstanding performance on a selective basis, taking into account
the fairness of remuneration internally and comparing the pay of key management personnel with market practice.
The structure of the incentive scheme, involving quarterly incentives, was confirmed and extended in 2011, particularly with
respect to typically commercial jobs in Branches, Area Offices and post offices. This has permitted greater flexibility in and
focuses on commercial aspects of jobs, while not losing sight of ethics in dealing with customers, thus providing
employees with a more timely monetary reward for their efforts.
The agreement with postmen and women, which introduced the Innovative Services Unit last year, was confirmed in 2011.
This incentive scheme is designed to encourage staff to provide information about and sell Poste Italiane’s services.
40. The incentive schemes used include:
- MBO (Management by Objectives) for managers, aimed at translating senior management strategy into specific, clear and measurable business and financial, quality, operational and planning objectives. MBO measures and enhances the contribution of individual managers to overall corporate performance;
- a commercial incentive scheme, aimed at the sales force in order to maximise achievement and/or going above commercial budget targets, whilst also
taking into account the vital importance of customer satisfaction and loyalty;
- incentive scheme by objectives is an appraisal and compensation mechanism that links pecuniary bonuses for individuals with particularly important management positions and specialisations or managerial positions with a high content of direct operations.
6.4 INDUSTRIAL RELATIONS
Industrial relations activities in 2011 primarily saw the Company and labour unions involved in procedures to renew the
Collective Labour Contract for non-managerial staff, which was signed on 14 April 2011. This was a joint agreement reached
in terms of financial aspects, which contains some new elements of flexibility regarding the management of employment
relations.
In application of the provisions of the union agreements regarding collective bargaining arrangements, the effectiveness of
the contract that lasts for a three-year period was adjusted in relation to both pay and conditions, which will now be in effect
from 1 January 2010 to 31 December 2012.
In terms of relations between the labour unions and the Company, matters regarding primary and secondary bargaining
were more clearly defined, procedures for renewal of the collective contract were reviewed and the participatory nature of
the model via improved definition of the functions of the joint bodies was reaffirmed.
In terms of pay, one of the most significant aspects is the increase in the minimum wage to an average, once fully
implemented, of 100 euros for grade C staff, who make up the bulk of the Company's personnel. This adjustment is in line
with the outcomes of the main collective contracts already renewed.
Regarding conditions, the regulations governing trainees were made fully operative by enabling training to be carried out
entirely within the Company.
Part-time employment, which facilitates flexible employment, was also enhanced with the introduction of a new flexible
clause exclusively aimed at vertical part-time contracts, which allows staff to perform their duties during periods not
included in the individual employment contract.
Another innovation regards the establishment of an individual hour count, which allows any additional hours worked to be
specifically compensated for.
Regarding social protection, specific measures were implemented regarding sick leave (including extension of the number
of particularly serious illnesses) and maternity leave, in confirmation of the attention paid by the Company to social issues,
the needs of staff and work-life balance requirements.
Finally, a section was introduced regarding social policies, training, and staff enhancement and development, which
systematises the previous contractual provisions.
Finally, on 21 September 2011, the "cooling off" and conciliation procedure provided for in the above-mentioned Collective
Labour Contract of 14 April 2011 was completed. In October the Company paid out a portion of the total performancerelated bonus for 2011, which on average amounts to 935 euros.
During 2011 all the Bilateral Agencies continued their activities. In particular, by conducting technical investigations, the Ente
Bilaterale per la Formazione e Riqualificazione del Personale (the Bilateral Agency for Staff Training and Retraining)
supported the preparation, presentation and activation of numerous projects and the signing of three agreements that
enabled access to funding granted by Fondimpresa and the Solidarity Fund.
Regarding the activities of the Organismo Paritetico Nazionale (Joint National Body), initiatives aimed at implementing
legislation relating to stress in the workplace were launched. Specifically, an assessment procedure was launched regarding
the risk of stress at the workplace, entailing preparation of a time schedule (indicating activities to be carried out and their
related implementation times, in order to record any risk factors and identify actions designed to eliminate them). A
permanent working group was also set up to deal with the various activities provided for in the time schedule.
The Italian National Equal Opportunities Commission, acting in accordance with the 2010-2012 Action Plan completed,
among other projects, a training program for members of the Regional Equal Opportunities Commissions for the purpose
of gaining greater insight into the relevant legislation.
Efforts regarding sustainability issues, especially social policies, focused on improving the quality of work and the wellbeing of persons. Social policies for employees related to the development of work-life balance initiatives and the provision
of real support for families, including specific projects for deprived persons.
92
Regarding the spread of teleworking, staff access to this form of employment was extended and an average of 60 new
workstations were activated during the year. Results have been positive, with increased productivity of around 30% and a
similar reduction in the amount of absenteeism. Efforts were stepped up during the year regarding the project for the
employment of the disabled, aimed at identifying concrete measures to encourage the inclusion and enhancement of the
disabled and, in general, help remove physical, sensory and cultural barriers in workplaces, service areas and social meeting
places.
With regard to trade associations, management and coordination of Company representatives at local business
associations continued. Moreover, with a view to boosting the Company's presence within Confindustria (Confederation of
Italian Industry), all the necessary preparatory activities for the establishment of a new professional association (drawing
up of the Statutes in agreement with the competent functions, identification of the headquarters, planning of the
organisational structure, identification of funds to be allocated while maintaining total costs unchanged) were carried out
and completed. Thus, Poste Italiane will be one of the founder members of the association and intends to extend its
representation to companies that provide network services. The association will be formally established in early 2012.
6.5 LABOUR DISPUTES
In 2011 the number of labour disputes regarding fixed-term contracts rose substantially from 2,761 in 2010 to 4,761 in 2011.
This increase most likely stems from the entry into force of Law 183/10 (the so-called Collegato Lavoro legislation), which
introduced a shorter time limit for out-of-court challenges to fixed-term contracts and stricter time limits for taking
subsequent legal action.
This provision also set a cap equivalent to a maximum of 12 months' pay on compensation due to an employee in the event
of court-imposed conversions of fixed-term contracts. This cap, to be reduced by 50% for companies that implement
recruitment lists also applicable to the permanent employment of workers formerly on fixed-term contracts, is also
applicable to all pending judgments on the date the law comes into force. In this respect, on 11 November 2011 the decision
of the Constitutional Court, which ratified the complete legitimacy of the cap on compensation, was filed, thereby
confirming the validity of Poste Italiane's defence.
The percentage of cases lost regarding fixed-term contracts, relating to appeals filed in the previous year and pending
decision, stood at 34% (compared with 46% in the previous year). It should also be noted that during 2011, while awaiting
the Constitutional Court's above decision, several pending judgments were postponed.
Regarding flexible work (temporary and contract work), 293 appeals were lodged compared with the 359 registered in 2010,
thus confirming the downward trend for this type of dispute.
The percentage of cases lost also registered a substantial reduction: 44% compared with the 51% registered at 31
December 2010.
The number of disputes arising from new contractual terms and conditions is still at normal levels, given the number of
staff employed, and registered a reduction with respect to the previous year: 1,846 contestations in 2011, compared with
2,470 in 2010.
6. Human resources | 7. Investment 93
7. INVESTMENT
(€m)
2009
2010
2011
Intangible assets
185
269
156
224
154
190
Total Capital expenditure
Financial investments
454
17
380
6
344
478
Total investment by Poste Italiane SpA
471
386
822
7.1 FINANCIAL INVESTMENTS
Amounts invested in 2011 by the Parent Company in subsidiaries and associates relate to the following events:
• a capital increase of 305 million euros regarding Poste Vita SpA was subscribed to, in order to equip the company
with the capital necessary to fund its future growth, and at the same time ease any pressure on the solvency margin resulting from a worsening of the structural crisis in the international financial system and continuing financial
market volatility. The company also approved repayment of a portion of outstanding subordinated loans due to Poste
Italiane SpA;
• acquisition, at a price of 140 million euros, of the entire share capital of Unicredit MedioCredito Centrale SpA41, a
company that promotes and manages government subsidies for businesses designed to support economic development;
• the capital increase carried out by the subsidiary, PosteMobile SpA, via the contribution of Poste Italiane SpA’s
Telecommunications unit on 31 March 2011, with a carrying amount of 30 million euros. Since the contribution, which
was completed on 12 April 2011, the infrastructure platform and fixed telecommunications services for the Group's
network of post offices has been managed by PosteMobile;
• a contribution of 3 million euros paid to Mistral Air Srl to cover losses incurred as of 30 June 2011.
41. On 21 November the bank changed its name to “Banca del Mezzogiorno – MedioCredito Centrale SpA” (abbreviated as “BdM - MCC SpA”).
94
7.2 CAPITAL EXPENDITURE
The Parent Company’s capital expenditure of 344 million euros represents 83% of the Group’s total investment. As
shown in the chart below, 57% of this amount regards ICT (Information & Communication Technology), 30.5%
modernisation and renovation of buildings and 12.5% postal logistics.
57.0%
30.5%
Modernisation and upgrade of properties
Postal logistics
IT and telecommunications networks
12.5%
7.2.1 IT AND TELECOMMUNICATIONS NETWORKS
The need to develop the Group's business and pursue a policy of integrating and diversifying its products and services, has
driven ongoing evolution of technological infrastructure, resulting in the continuation of ICT (Information & Communication
Technology) activities in 2011, in line with the strategy implemented by the Group in recent years.
With a view to ensuring consolidation and ongoing development of the corporate Telecommunications Network, also
regarding the development of applications and services, before the transfer of the Telecommunications Network to the
subsidiary Poste Mobile in April 2011, the Parent Company carried out development initiatives, entailing the fitting out of
new spaces, to upgrade the network infrastructure of Data Centres (especially at the centres in Rozzano and Pomezia), and
other development initiatives were implemented on the network's perimeter security entailing the installation of new
firewalls42 at Data Centres.
Rollout of the Content Delivery Network (used in the distribution of digital content) also continued, including a total of 3,300
peripherals installed with the aim of improving transmission quality and expanding data transmission capacity.
Also regarding the ICT infrastructure platforms, consolidation and development of hardware, storage and backup systems
continued, as well as activities aimed at redesigning and implementing the Group's server farm infrastructure. Over the
years these activities have led the original 35 system rooms distributed nationwide to be reduced to 5 national hubs.
The main initiatives involved technological updates and the adaptation of systems to meet new requirements that emerged
during the year, as well as consolidation and disposal of obsolete hardware (disposal of around 324 systems). Regarding
equipment, upgrades were made to Data Centres to meet the operating requirements of installed computer systems, and
works were begun on the construction of a new Data Centre in Turin.
On the computerisation front, updating of hardware and software continued at post offices and administrative offices with
the acquisition of more than 60 thousand pieces of equipment, including personal computers, printers, POS, franking
machines, cheque readers and other goods.
Initiatives to computerise Customer Relationship Management (CRM) and Enterprise DataWarehouse (EDWH) continued.
The aim was to increase the effectiveness and efficiency of the sales network, support the launch of new commercial
offerings tailor-made to customer requirements, and optimise integrated management of processes and customer and
product data that serve various corporate businesses. The main CRM initiatives included: extension of counter appointment
42. A hardware or software network device that filters all incoming and outgoing packets, to and from a network or computer, applying rules that contribute
to its security. A filter is placed on incoming and outgoing connections, which enables the device to raise the level of network security and allows internal
and external users to operate in conditions of maximum security.
7. Investment 95
booking facilities to all retail post offices (around 41,000 users); creation of new dedicated reporting services for sales and
marketing departments (around 30,000 users); development of the internet channel; and enablement of integrated
management functions with Banca del Mezzogiorno – MedioCredito Centrale SpA regarding provision of loans to
companies. On the EDWH front, activities continued aimed at integrating corporate information assets and developing
customer data records and the products and services catalogue.
Also regarding corporate IT infrastructure, during 2011 the infrastructure and application components of the Service
Delivery Platform (SDP), which redesigned the old counter system via the construction of a multi-channel platform through
which all Poste Italiane's distribution channels now pass, were completed. At 31 December 2011 the platform was
operating in all post offices, with more than 52,000 work stations. The average volume of daily operations (movements
tracked in the database) exceeds 8 million, with peaks of around 10 million movements in the first few days of each month.
Regarding financial and insurance systems, activities continued in relation to compliance with Italian and international
regulatory requirements (including the new Banking Transparency regulations, rules issued by the tax authorities regarding
the tax roll and monthly reporting requirements), and to upgrading to meet the technological and security standards
required by the international VISA and Mastercard circuits. Moreover, the website www.postepay.it dedicated to Postepay
cards was completed, and in June Poste Italiane launched the Trading On Line (TOL) service, which allows customers to
trade on the secondary market and subscribe to offerings on the primary market on line, without the need to go to a post
office. The applications platform for the insurance company, Poste Assicura, was also released.
7.2.2 RESTYLING AND UPGRADING OF POST AND DELIVERY OFFICES
Poste Italiane SpA allocated 30.5% of its capital expenditure to restyling and upgrading of post and delivery offices. These
activities include building works (waterproofing and roofing, works on external facades, repair and renovation of frontages,
internal restructuring of premises and other buildings); technical and/or equipment works (extraordinary maintenance works,
repair and upgrade of electric, heating and air conditioning equipment, as well as of thermal and other electric power plants);
and works aimed at improving workplace health and safety. These efforts bear witness to the attention paid to customers in
terms of environmental quality and ease of access, and represent an additional tool for leveraging commercial growth and
greater customer satisfaction. For example, the restyling initiatives offer customers and counter staff a more functional and
comfortable environment.
Specifically, restyling and upgrading of post and delivery offices entailed overall renovation of 70 post offices and partial
renovation of 1,002 post offices. The latter included, among other things, stepping up active security measures at post offices
via the activation, integration or replacement of alarm and video surveillance systems, as well as passive security measures via
implementation of robbery protection systems, based on analysis of previous robberies carried out.
96
7.2.3 POSTAL LOGISTICS
The main initiatives implemented in 2011 regarded completion of the restructuring of logistics and operations project, based
on provision of the postal service five days a week (Progett8VENTI). Among other things, 204 infrastructure upgrades were
carried out (198 at Distribution Centres and 6 at Sorting Centres), which enabled improvement of workplaces in terms of
safety, comfort and operability.
Regarding the logistics network consolidation project, investment was carried out that involved installation of two tray
sweeping systems (TSS) for the automated emptying of mail trays at the Milan Peschiera Borromeo and Turin centres, and
measures were also implemented to boost production capacity at the sorting facilities at the main sites.
Regarding the reorganisation of management of integrated and online mail services entailing their allocation to Area
Logistics Offices, warehouses were built in Turin, Bari and Naples to store the paper documents arising from digitisation
activities.
Finally, with a view to optimising transport processes in support of the postal logistics chain, initiatives regarding
management of the Company's vehicle fleet were implemented during the year. The four-wheel fleet (cars and vans)
acquired through long-term leases was completely renewed, with the introduction of types of vehicle that respond better
to the requirements of delivery staff, in terms of comfort and safety, as well as more specifically meeting the expectations
of local communities, who are increasingly attentive to environmental issues.
7. Investment | 8. The environment 97
8. THE ENVIRONMENT
Poste Italiane initiated sustainable environmental protection measures throughout the Group several years ago. The
objective is to limit environmental damage caused by pollution through measures ranging from evolving the corporate fleet
of vehicles to the rationalisation of the logistics network, increased procurement of power from renewable sources,
participation in international postal operators' programmes for the reduction of greenhouse gas emissions and the
dissemination of a culture of corporate responsibility.
The Group's sustainable energy-related growth is the responsibility of Poste Energia SpA, which manages power supplies
to Group companies with high energy consumption, and also provides advisory services regarding gas supplies to Postel
SpA.
At the end of 2010 Poste Italiane also launched the Energy Resource Management Project aimed at measuring the power
consumption of real estate assets, as well as monitoring consumption and identifying energy saving measures for all types
of utility (electric power, gas, water and fuel).
In addition to reducing energy consumption during the year, particularly at head office and industrial premises, activities
were finalised during the year to continue procurement of power from certificated renewable sources under the Renewable
Energy Certificate System (RECS). Amounting to 268 GWh, renewable energy now accounts for 50% (also 50% in 2010)
of all power consumption throughout the Group's properties (around 550 GWh in 2011).
Measures were continued with respect to transport for the optimisation and efficiency of nationwide and local road
transport and, as explained in the section on capital expenditure, the introduction of alternative fuel and low environmental
impact vehicles continued during the year. In particular, in addition to the commitment to use around 2,000 alternative fuel
vehicles (petrol/methane bi-fuel), new vehicles in lower pollution categories than in previous years were acquired in 2011:
95% of the current fleet consists of Euro5 vehicles against 5% of Euro4 vehicles.
In further confirmation of the attention the Company focuses on reducing CO2 emissions, the Postal ZEV (Postal Zero
Emission Vehicle) project was launched in 2011. A natural continuation of the Green Post project that ended in 2010, this
new project revolves around a case study aimed at testing technologically innovative vehicles to reduce polluting emissions
in urban areas. In addition to Poste Italiane, which will test the vehicles, the project will be led by the Sustainable
Development Foundation, and also involve participation by the Biomass Research Centre, CRIT Research, CIRIAF (Interuniversity Research Centre on Pollution by Physical Agents), Ducati Energia and the Municipality of Perugia. The project is
funded by the Ministry of the Environment and Land and Sea Protection.
Also on the sustainable transport front, Poste Italiane collaborates with ENEL and the Municipality of Pisa on testing
services aimed at encouraging the use of eco-sustainable vehicles and substantial reduction of polluting emissions. Indeed,
since April 9 “green” Poste Italiane vehicles are operating (3 vans and 6 quadricycles, all of which are electric-powered),
which “top up” at 9 recharging points (home stations) installed by ENEL at the local postal distribution centre.
In 2011 Poste Italiane also continued to be active in the international arena where it participates in major working groups
engaged in environmental protection. In particular, in connection with the International Post Corporation (IPC), Poste Italiane
participates in the Environmental Measurement and Monitoring System (EMMS) for the monitoring of CO2 emissions and
98
the qualitative assessment of postal operators' environmental protection efforts. During 2011, 23 of the 24 IPC members
joined in the programme, comprising a total of around 2.2 million staff, more than 100,000 premises and around 535,000
vehicles used for transport and delivery around the world.
In connection with PostEurop, an association supporting public postal operators in Europe with respect to the introduction
of eco-sustainable development policies and the application of operational practices to save energy and reduce CO2
emissions, the Company took part in various working groups in 2011.
In connection with the Universal Postal Union (UPU), a UN agency specialising in the postal sector, Poste Italiane continued its efforts relating to all initiatives regarding global emissions monitoring systems and all activities connected with ecosustainable development. in particular, during 2011 the Company participated in the main activities carried out by the
Sustainable Development Project Group, aimed at raising awareness among all agency members of the need to introduce
strategies regarding the three pillars – environmental, economic and social – of sustainable development which guarantee
social responsibility in the postal sector.
All of the Poste Italiane Group's actions and results in connection with economic, social and environmental sustainability
are explained in the Company's annual Social Report.
8. The environment | 9. Events after 31 December 2011 99
9. EVENTS AFTER 31 DECEMBER 2011
During the second half of 2011 the downgrade of Italy’s credit rating and heightened financial market volatility had a significant impact on the price of Italian government securities, generating substantial fair value losses on those classified as
available-for-sale (AFS), which were recognised in the fair value reserve in Equity, net of tax.
At 31 December 2011 the fair value reserve attributable to BancoPosta RFC had a negative balance of 1,991 million euros,
net of tax, thus exceeding the funds of 1 billion euros initially attributed by Poste Italiane SpA.
However, postal current account deposits have remained stable and BancoPosta’s Equity continue to be sufficient to back
the available-for-sale securities through to maturity, with steps taken and instruments created to cope with unexpected
movements in deposits, without having to sell large volumes of securities at a loss.
In addition, there was a general relaxation in early 2012 of the severe tensions across the international financial system and
exceptional turbulence and volatility that had marked the preceding year, resulting in a narrowing of yield spreads between
European and Italian bonds and, especially, German Bunds. This resulted in a reduction in the negative balance of the fair
value reserve attributable to BancoPosta RFC from 1,991 million euros to 835 million euros at 31 March 2012.
In January 2012, the Company's Board of Directors approved the participation of Poste Italiane-BancoPosta RFC, for up to
6 billion euros, in the sale and buyback scheme launched by the European Central Bank (ECB).
A total of 5 billion euros in loans collateralised by securities were obtained in February 2012 from the ECB as part of its
Long Term Refinancing Operations ("LTRO").
The purpose of loans was to finance the early purchase of securities for the investment portfolio, represented by Securities
maturing over the next 36 months.
With reference to the Antitrust Authority’s procedure A/413 concerning alleged abuse of a dominant market position in
connection with certain commercial practices of Poste Italiane relating to the Posta Time product and participation in
certain tenders, on 4 April 2012 Lazio Regional Administrative Court upheld Poste Italiane’s appeal and cancelled the
Authority’s ruling.
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10. OUTLOOK
In 2012 the Postal Services segment is expected to see a further reduction in the volume of traditional mail, reflecting the
ongoing trend towards the abandonment of paper-based communication. In contrast, this process will be accompanied by
growing market demand for all the services related and complementary to postal products and, more generally, the various
ranges of digital and integrated services. Likewise, the development of e-commerce may have a positive impact on
advertising and commercial mail. In terms of the commercial offering, the Group aims to develop its new “Posteitaliane per
Te” service, which will be supported by an operations centre capable of interacting with the first-level Call Centre and the
local offices of the new Innovative Services unit, with the aim of rapidly and efficiently responding to customers’ requests
for appointments. The range of services offered will also be expanded to include communication services, such as
Postazone Contact, Poste Mailbox, online mail services and other basic services, and marketing initiatives, including
unaddressed mailings and radio and press campaigns, will be launched.
At the same time, the expertise and tools available to “Posteitaliane per Te” staff will be upgraded by using palmtop
computers to meet customer needs and enable, for example, customers to pay with their bank cards, as well as with post
office cards, and to use new technologies to provide value added services.
The issue of new kits to postmen and women will be completed in 2012, including palmtops43.
The commercial offering will also be boosted by changes to the logistics network through the creation, at network hubs,
of digital technology units for the dematerialisation of documents and paper-based mail, in order to optimise the network
hubs and prepare the way for the introduction of new digital services. Logistics network hubs will also be provided with
fully equipped areas (stores) and the necessary software platforms, enabling them to carry out semi-automatic document
management, storage, micro-logistics and the physical picking of documents and other objects as part of the logistics
process.
As regards transport, 2012 will see a further 750 electric-powered quadricycles and almost 18 thousand motorcycles added
to the Group’s fleet, with the aim of improving safety for users, achieving more efficient management of the fleet and
reducing the Group’s environment impact.
With respect to Express Delivery and Parcel services, the Group continues to be committed to consolidating integration
of the Parent Company's tracking systems with those of the subsidiary, SDA Express Courier SpA, in order to create a
single, integrated logistics network. The range of offerings will be extended with “Paccofree”, a pre-franked product sold
with standardised packaging that will simplify the collection process.
SDA Express Courier will be primarily focused on penetrating the e-commerce market, as well as launching the new “Road
Europe” service to be offered in collaboration with Eurodis, the leading provider of combi-freight transport for parcels and
pallets, for road shipments within Europe.
43. The kits consist of a palmtop, a printer and a POS terminal.
10. Outlook 101
In addition to its regular series of stamps in connection with specific topics, the Philately Programme for 2012 will include
a number of commemorative and celebratory issues, with the most important marking the 150th anniversary of the
introduction of the Italian lira, the Universal Exposition in Milano in 2015, and the 150th anniversary of the Italian Postal
Service.
From January 2012 the Financial Services segment will be focused on a major initiative designed to attract new current
account deposits through a promotion aimed at both new and existing current account holders, offering gross credit
interest of 4% on new deposits.
There will be a further relaxation of the requirements for various private customer segments to obtain the benefits of Conto
BancoPosta Più.
The year will also be marked by the impact of the so-called “Salva Italia” (“Rescue Italy”) Decree, introduced by Law
Decree 201 of 6 December 2011, converted into Law 214 of 22 December 2011, which provides for the following, with
regard to reduction of the limit for the traceability of financial flows to 1,000 euros and efforts to combat the use of cash:
• mandatory payment of pensions and wages by electronic payment instruments, including prepaid cards for amounts
exceeding 1,000 euros;
• a ban on banks and finance companies charging recipients of minimum pensions, including charges for revenue stamps;
• mandatory offer by banks and finance companies of basic account services with simplified, transparent and easily comparable fee structures.
The medium term loan product for sole traders and professionals, Prontissimo Affari BancoPosta, which was introduced on
a test basis in December 2011, will be officially launched.
The year will see the introduction of new remote banking services, such as increased security of BPIOL and new Interbank
Corporate Banking and Electronic Invoicing. The acquiring service associated with BancoPosta In Proprio Pos will also be
developed.
The electronic money segment will be broadened with new products. This will, in particular, entail the launch of a new credit
card for SMEs and professionals developed together with Deutsche Bank and Visa, and the broadening of the Sconti
BancoPosta loyalty programme to Deutsche Bank's retail Classic and Gold credit cards.
A new PostePay prepaid card will be launched called MyPostepay which can be obtained directly from the Company's web
page and personalised with an image selected by the customer including a personal photograph.
Furthermore, to promote the launch of e-postepay, two new top-up methods will be introduced: online at www.postepay.it,
by Visa or Mastercard or by bank transfer. These methods will be introduced at a later date for other postepay cards. This
will be accomplished by providing each e-postepay card with its own, unique IBAN that can be given to a bank when
transferring funds to the card.
The post office savings products provided by Cassa Depositi e Prestiti (Post Office Savings Books and Interest-bearing
Postal Certificates) will be restructured in 2012 by adding new cash products designed to better meet customer needs and
compete with the numerous similar products currently being offered.
Banca del Mezzogiorno – MedioCredito Centrale SpA will offer two forms of loan through post offices authorised to collect
loan applications: “Linea Impresa” and “Linea Agricoltura”, which may be backed by government or third-party guarantees
(e.g. the Guarantee Fund for SMEs, the ISMEA/Sgfa Guarantee Fund and Cofidi).
In the Insurance Services segment, 2012 is expected to see a high degree of uncertainty over the financial impact of the
extremely volatile spreads on Italian government Securities, which only since December have shown encouraging signs of
improvement. These considerations have a significant influence on the behaviour of policyholders and financial
intermediaries, thus making it necessary for the Group’s insurance company to closely monitor the situation. In this regard,
Poste Vita is putting in place a series of marketing and commercial initiatives that should ensure that the company continues
to achieve good results in terms of earned premiums in 2012, as confirmed by its performance in the early part of the year.
Commercial initiatives will continue to focus primarily on the offering of Branch I life products, whilst also aiming to develop
sales of pension funds and personal protection products.
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In terms of telecommunications, 2012 will see PosteMobile engaged in consolidating its development, which will focus on
two areas of growth: further development of its core business in keeping with initiatives launched in 2011 and expansion
into new areas of business.
The company’s core business will, among other things, be engaged in completing its transformation from an Enhanced
Service Provider (ESP) to a Full Mobile Virtual Network Operator (Full MVNO), which will see the company manage a part
of the network on its own account. This will provide greater flexibility, better quality control and more effective management
of the business.
Expectations of a hostile macroeconomic environment, combined with ongoing financial market tensions and changes in
tax and labour market legislation, make the outlook for 2012 particularly difficult. These general factors are in addition to the
already difficult situation in the postal sector.
The strategic and commercial initiatives described and ongoing cost controls mean that the Group expects, however, to
maintain current levels of profitability.
10. Outlook | 11. Other information 103
11. OTHER INFORMATION
In compliance with the provisions of article 2364 of the Italian Civil Code, approval of the financial statements for the year
ended 31 December 2011 by the General Meeting of Poste Italiane’s shareholder will take place after the end of the term
of 120 days, as, moreover, permitted by art. 7 of the Article of Association and in compliance with the extended term of
180 days from the end of the reporting period referred to in the above article.
The delay was made necessary following the acquisition of the interest in Mediocredito Centrale and its first-time
consolidation, and by the establishment of BancoPosta RFC and preparation of the Separate Report.
Related party transactions
With regard to postal current account services and postal savings deposits, the main transactions entered into by the Group
during the period were with the shareholder, the Ministry of the Economy and Finance and Cassa Depositi e Prestiti SpA.
Details of the related party transactions of the Poste Italiane Group and the Parent Company are provided in note 40 in the
consolidated financial statements and in note 34 in the separate financial statements.
Legislative Decree 196 of 30 June 2003
In compliance with Legislative Decree 196/2003, the “Data Protection Code” (“Codice in materia di protezione dei dati
personali”), the Company has revised its Data Protection Planning Document, which describes the Company’s overall
organisation, its technological infrastructure, and the distribution of duties and responsibilities within the departments
involved in the processing of personal data, as well as overseeing the correct application of the minimum security
requirements provided for by the law. The revision has involved the confirmation of references to company regulations
which, in addition to procedures, include notes, instructions, references to the intranet, forms, policies, minutes and other
relevant documents.
Statement of reconciliation of profit and Equity
The statement of reconciliation of the Parent Company’s profit/(loss) for the year and Equity with the consolidated amounts
at 31 December 2011, compared with the statement at 31 December 2010, is included in note 16 to the consolidated
financial statements.
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12. BANCOPOSTA RFC MANAGEMENT REVIEW
12.1 BANCOPOSTA RFC CORPORATE GOVERNANCE
The shareholder resolution, required by paras. 17-octies et seq. of art. 2 of Law Decree 225 of 29 December 2010,
converted into law with amendments by Law 10 of 26 February 2011, to provide ring-fenced capital for BancoPosta's
operations, was approved at the Extraordinary General Meeting of 14 April 2011.
By-laws regulating the organisation, management and control of BancoPosta's operations were approved at the same
Meeting. The By-laws also established operating and accounting procedures consistent with the ring-fencing of BancoPosta
RFC and the nature of the relationship between BancoPosta RFC and Poste Italiane SpA’s other functions.
The formation of the ring-fenced capital was effective from the date the above resolution was filed with the Companies’
Register on 2 May 2011, and was implemented subsequent to ascertaining that no objections had been raised by creditors.
On 2 July 2011 BancoPosta's assets and liabilities were, for all intents and purposes, unbundled from those of Poste Italiane
at that date or at any time in the future, whereas BancoPosta's assets, liabilitiesand contractual rights were ring-fenced
exclusively for the satisfaction of its obligations arising out of its day to day business, with Poste Italiane's liability being
limited to the ring-fenced capital attributed from retained earnings.
BancoPosta's operations consist of those listed in Presidential Decree 144 of 14 March 2001, as amended, namely:
• the collection of savings from the public in accordance with art. 11, para. 1 of Legislative Decree 385/1993 of 1 September
1993 - Consolidated Banking Law (Testo Unico Bancario)- and all related and consequent activities;
• the collection of savings through postal securities and deposits;
• payment services, including the issuance, administration and sale of prepaid cards and other payment instruments pursuant to art. 1, para. 2, letter f) numbers 4) and 5), TUB;
• foreign exchange brokerage services;
• promotion and placement to the public of loans issued by approved banks and financial brokers;
• investment and related services pursuant to art. 12, Presidential Decree 144/2001.
Acting on the shareholder resolution of 22 June, Poste Italiane's Board of Directors approved BancoPosta RFC's opening
statement of financial position at 2 May 2011 and determined BancoPosta's assetsand contractual rights at the same date,
without modification to their classes and rights, as originally determined.
BancoPosta was consequently provided with separate and ring-fenced capital on 2 May 2011, meeting the Bank of Italy's
prudential requirements at that date and thus assuring sound and prudent operations.
BancoPosta RFC's organisation and management consists of multiple bodies and officers, which are ranked here by their
vested powers: the Board of Directors, the Chief Executive Officer, the Head of BancoPosta and the Cross-functional
Committee.
The Board of Directors provides strategic oversight in addition to its responsibilities, which cannot be legally delegated:
• determination of strategic guidelines;
• adoption and amendment of business and finance plans;
• approval of risk management guidelines;
12. BancoPosta RFC Management Review 105
• assessment of the adequacy of organisational, administrative and accounting arrangements and approval of internal procedures and guidelines;
• assessment of the suitability, efficiency and effectiveness of the internal control system through evaluation, at least once
a year, of the reports provided by the Compliance, Internal Auditing and Risk Management functions;
• appointment of the Head of Compliance;
• determination and regular reviews of strategic guidelines and risk management policies regarding money-laundering and
the financing of terrorism.
The responsibilities of the Chairman of the Board of Directors are contained in the Articles of Association.
Normally each month, the Directors dedicate a separate section of their Board meetings to a review of all transactions and
matters of importance to BancoPosta RFC's operations, performance and outlook.
BancoPosta’s operations are the responsibility of Poste Italiane's Chief Executive Officer who has all powers required for
the implementation of strategy and the management of BancoPosta's operations.
The Chief Executive Officer proposes the appointment of a Head of BancoPosta to the Board of Directors with the CEO
being responsible for the delegation and revocation of the requisite powers.
Subject to the powers delegated to the Head of BancoPosta, the Chief Executive Officer directs:
• BancoPosta to assure the market competitiveness of its banking and financial services through planned growth consistent with corporate strategy and in compliance with the regulatory framework;
• other Poste Italiane business and staff functions which, depending on their areas of responsibility, are involved in the
operations of BancoPosta;
• the Cross-functional Committee, which has powers to advise and make recommendations and provides the interface
between BancoPosta and other corporate functions involved in BancoPosta's operations in accordance with their areas
of responsibility.
The Chief Executive Officer, in agreement with the Board of Directors and in consultation with the Board of Statutory
Auditors, appoints and dismisses the heads of the Risk Management, Internal Auditing and Anti-Money Laundering functions.
Responsibility for the implementation of the strategies approved by the Board of Directors has been delegated by the Chief
Executive Officer to the Head of BancoPosta, who is also responsible for:
• the exercise all delegated powers as required by the Chief Executive Officer;
• the recommendation of matters to be placed on the Cross-functional Committee's meeting agenda and the relevant corporate functions to be invited in addition to meeting minutes;
• the development and review of specific internal procedures on service levels with other corporate units.
The Head of BancoPosta is required to attend meetings of the Board of Directors of Poste Italiane whenever the Chief
Executive Officer places issues of importance to BancoPosta on the agenda.
BancoPosta's operations are regulated by the "BancoPosta Organisational and Operational Guidelines" as agreed by the
Board of Directors, with the Board of Statutory Auditors' concurrence.
The Cross-functional Committee is presided by the Chief Executive Officer. Its permanent members are the Head of
BancoPosta, and other function heads as specifically appointed to provide advice and make recommendations and to coordinate BancoPosta's operations with those of other corporate functions. The Committee conducts its activities on the basis
of specific “Regulations for the Cross-functional BancoPosta Committee”, approved by the Board of Directors on 26 October
2011 with the prior agreement of the Board of Statutory Auditors. The Committee meets monthly.
The Regulations for the Cross-functional BancoPosta Committee broadly address:
• the Committee's functions;
• the manner of convening meetings and the agenda;
• the formalisation of the decisions of Committee meetings;
• amendment of the Guidelines.
106
The Chief Executive Officer is responsible for the implementation of the Committee's decisions by the relevant Poste
Italiane function.
The shareholder deliberates the Board of Directors’ proposed profit appropriations, including those for BancoPosta, at the
annual general meeting held for the approval of Poste Italiane's financial statements.
Poste Italiane's Board of Statutory Auditors and Supervisory Board, pursuant to Legislative Decree 231, and the independent auditors retained to audit Poste Italiane’s accounts also provide oversight and audit services to BancoPosta, as required
by the relevant guidelines.
Having adapted its work to the particular nature of BancoPosta, the Board of Statutory Auditors oversees, with due regard
to the need for operationally and formally segregated controls, compliance with law, the Articles of Association and best
management practices, the adequacy of the organisational, administrative, accounting structure and BancoPosta's internal
control system.
The Board of Statutory Auditors ascertains the overall effectiveness of the internal control system, including its coordination with all relevant departments and units, and provides recommendations for the correction of any weaknesses and irregularities. The Board of Statutory Auditors also oversees the adequacy of the risk management system particularly with
respect to the systems used to determine capital adequacy. Its work on the propriety of operations includes the ascertainment and investigation of any operational irregularities, shortcomings of accounting processes and organisational arrangements and the follow-up of action taken by the Company to eliminate weaknesses.
In addition to using BancoPosta's control structure (Internal Auditing, Risk Management, Anti-Money Laundering), the
Board of Statutory Auditors also avails itself of Poste Italiane's control functions thus facilitating ongoing dialogue and
exchange of information. This close relationship enables the Board to opine on the appointment of the heads of
BancoPosta's control units and the determination of the essential elements of the internal control system.
In accordance with Law 259 of 21 March 1958, which requires parliamentary scrutiny of the financial management of agencies to which the State contributes on an ordinary basis, Poste Italiane SpA is subject to controls by the Italian Court of
Auditors, which examines its budget and financial management. The controls consist in ascertaining the legitimacy and regularity of management activities, as well as of the conduct of internal controls.
12.2 BANCOPOSTA RFC'S INTERNAL CONTROL SYSTEM
AND RISK MANAGEMENT
12.2.1 INTERNAL CONTROL SYSTEM
BancoPosta RFC’s internal control system consists of a systematic body of rules, procedures and organisational structures,
which aim to prevent or limit the consequences of unexpected events and enable BancoPosta to achieve its strategic and
operating objectives, comply with the relevant laws and regulations and ensure the fairness and transparency of internal
and external reporting.
The most important aspect of the system is the control environment in which employees work that includes integrity and
other corporate ethical values, organisational structure, allocation and exercise of authorities and responsibilities, separation
of duties, staff management and incentive policies, staff expertise and, more in general, corporate culture.
BancoPosta's control environment is evidenced by:
• the Group Code of Ethics;
• implementation of the Legislative Decree 231/01 Organisational Model and related corporate procedures;
• organisational structure of BancoPosta as reflected in organisational charts, service orders, organisational notices and procedures, which determine the work and responsibilities of corporate units;
• General Operating Guidelines which, in implementation of the By-laws, identify, and regulate the activities of various
Poste Italiane's units acting on behalf of BancoPosta in addition to valuing such services;
• the system for delegating powers to function heads in accordance with their responsibilities.
As a result of BancoPosta's separation from Poste Italiane, the Organisation Model requires:
• the existence of an interface between BancoPosta internal staff units (e.g., accountancy and control) and those of Poste
Italiane;
• establishment of autonomous and independent control functions in compliance with Bank of Italy supervisory requirements: Compliance, Risk Management, Anti-Money Laundering and Internal Auditing. The risk assessment techniques,
methods, controls and, periodic audit findings are shared amongst control units to promote synergies and take advantage
of specific skills;
• provision of support by other Poste Italiane functions consistent with the General Operating Guidelines.
BancoPosta's internal control system also involves other units with varying roles and responsibilities.
The objective of BancoPosta's Internal Auditing function44, which is in compliance with the regulatory requirements contained in the Bank of Italy's Supervisory Instructions on controls to which BancoPosta is subject, is to assess the overall
propriety of controls in terms of the adequacy and efficacy of systems, processes, procedures and arrangements for the
security of BancoPosta's operations by conducting audits as planned for each year and approved by the Board of Directors.
BancoPosta's Internal Auditing function coordinates its activities with Poste Italiane's Internal Control/Internal Auditing function. In this context, the Internal Control function assists the organisation in the pursuit of its business and governance
objectives, by providing support to executives and management through the exercise of professional independence in monitoring and improving the Company’s control and risk management processes and corporate governance.
Work in 2011 was conducted in accordance with an audit plan approved by the Board of Directors on 6 May 2011. The plan
entailed the use of risk assessment techniques to tailor audit work thus assuring its relevance to important matters in evolving business and governance practices, including BancoPosta's organisation, compliance with requirements to which
BancoPosta is subject and, finally, the communication of the function's findings regarding risk monitoring.
The audit work contained in the annual plan is also performed in accordance with existing rules between Internal Audit
Function and BancoPosta. particularly with respect to network and IT audits.
44. Formalised through designation of the Internal Auditing function approved at the Board of Directors' meeting of 25 January 2010.
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The opportunity was also taken in 2011 to conduct an Internal Capital Adequacy Assessment Process ("ICAAP") on an experimental basis for the first time specifically for BancoPosta. The reference date for the analyses and figures, which were
combined with projections and scenario analyses, was 31 December 2011.
The Internal Auditing function, as required by regulation, regularly provides corporate bodies with information on its findings. An independent professional Quality Assurance Review was conducted after the first five years resulting in the certification of the function's full conformity with international audit standards and of the compliance of its work with its mission as approved by the Poste Italiane Board of Directors thus attesting to the Audit function's contribution to the improvement of BancoPosta's internal control system.
Risks are to varying extents measured and controlled by a number of specialist risk monitoring functions employing
approaches and models specific to their relevant area or responsibility.
As one of Poste Italiane's internal control functions, BancoPosta's Risk Management function is responsible for controlling
operational and financial risks. It consequently provides a detailed evaluation of the risk profile of financial products sold to
customers and provides the operational and business units involved in the product development and placement process
with advice and support providing regular reports on its activities. The function uses operational risk measurement models
consistent with those recommended by the Bank of Italy. The models are based, amongst other things, on the analysis of
internal and external historical data on operating losses combined with business environment analyses and the units' own
evaluations of their processes relating to BancoPosta’s operations;
The risk of BancoPosta's non-compliance with regulation is controlled by the Compliance function whose work includes the
provision of advisory and support services to operating and business functions with regular reports to senior management.
The process of monitoring compliance is split into three phases:
• regulatory analysis;
• compliance risk assessment;
• monitoring and testing.
Monitoring and testing entails ongoing second-level compliance controls for the determination and reporting of precautionary action with a follow-up audit to assure that weaknesses have been eliminated.
The Compliance function regularly reports to corporate bodies and business units responsible for assuring compliance.
The Anti-Money Laundering function is engaged in regulatory analyses, risk assessment and the monitoring of activities
exposed to money-laundering and the financing of terrorism whereas the Money-laundering Reporting function is engaged
in the evaluation of suspect transactions with reports to the Financial Reporting Unit.
Corporate controls over BancoPosta's operations determine specific responsibility for the implementation of line, or firstlevel, controls.
IT controls are of particular importance in this regard.
12.2.2 RISK MANAGEMENT SYSTEM
Risks and controls
When BancoPosta was initially ring-fenced, capital were legally unbundled from Poste Italiane to create capital for capital
adequacy purposes and for the protection of creditors.
The clear identification of risks, to which BancoPosta could be potentially exposed, is a necessary condition for the
conscious assumption and management of risk.
The General Operating Guidelines, as implemented through internal operating guidelines, require the development and
annual revision of a risk map showing all risks inherent in BancoPosta's operations by product and service. In the event of
a loss, the risk map is used to determine responsibility and losses are deducted from transfer payments to the relevant
function.
Operating losses attributable to factors not included in the risk map, are investigated and responsibility determined jointly
by BancoPosta and the function concerned. In the event of disagreement, the matter is referred to BancoPosta’s Crossfunctional Committee.
Notwithstanding the pending introduction of new prudential requirements for BancoPosta, existing supervisory authority
risk classifications based on the types of risk, to which BancoPosta is typically exposed in the normal course of business,
are described below:
• credit risk (including counterparty risk);
• market risk;
• concentration risk;
• liquidity risk;
• operational risk.
BancoPosta has developed a structured process for risk identification, analysis and monitoring which is executed and
supported by various corporate units, the work of which is strictly complementary.
The work of the Risk Management function relating both to minimum capital (first pillar) and evaluation of capital adequacy
(second pillar) was devised in preparation for BancoPosta becoming subject to the prudential requirements of Basel II.
As mentioned above, this was taken as the opportunity to prepare an initial ICAAP report for mid-2012.
The most important risk category for first pillar capital charges is operational risk, above all if measured using the Basic
Indicator ("BIA") or the Standardised Approaches ("TSA"), since minimum supervisory capital is computed by applying fixed
regulatory capital ratios45 to total interest and fee income (before operating costs) which, for BancoPosta, exceeds five
billion euros a year. Capital charges for credit, counterparty and foreign exchange risks are lower.
BancoPosta's supervisory capital, under the regulatory option of sterilising losses on government bonds held in the AFS
portfolio, was sufficient to satisfy minimum capital requirements with the total capital ratio exceeding 9.5% at 31
December 2011 (the supervisory minimum is 8%) entirely constituted by Tier I funds.
In addition to the risks listed above, interest rate risk, arising as a result of mismatched interest rate periods for assets
(predominantly government bonds and funds held at the Ministry of the Economy and Finance) and liabilities (retail
customer and Public Sector postal current accounts), is of importance for second pillar purposes. The first computation of
second pillar capital, including projected second pillar capital, will be contained in the ICAAP report.
Note 37 of Poste Italiane's financial statements sets out the details of risk areas and the methods used for their
measurement and prevention.
45. There is only one ratio for the BIA which is 15%. Three ratios, 12%, 15% and 18%, are used for the TSA depending on the nature of business generating
the income.
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12.3 BANCOPOSTA RFC FINANCIAL REVIEW
MACROECONOMIC ENVIRONMENT
Slowing rates of production, also observed in recently industrialised economies, and continued financial market weakness,
combined with the sharpening of the euro zone sovereign debt crisis, were major contributing factors, particularly in the
second half of 2011, to the deterioration of the outlook for global economic recovery.
The adverse outlook for growth combined with the increasing weakness brought about by the sovereign debt crisis and the
consequent brakes on expansionist budgets resulted in poor stock market performance and losses in the latter part of the
year.
The ECB introduced a series of measures in the second half of 2011 which included the purchase of government bonds
from the secondary market intended to support financial sector liquidity and to avoid a further weakening of financial markets.
The slowdown of the world economy and the extreme weakness of government bond markets had a major effect on Italy
despite its fundamentally sound banking system, reduced consumer indebtedness and relatively sound real estate markets.
The crisis in Italy was primarily brought about by the high level of government debt, the economy’s significant exposure to
international trade and weak medium term growth prospects.
Government debt in Italy as a percentage of GDP increased to 120.1% in 2011; the highest level since 1996. The figure for
2010 was 118.7% (ISTAT) whereas the deficit as a percentage of GDP was 3.9% in 2011 compared with 4.6% in 2010.
GDP (Gross Domestic Product) for 2011 grew 0.5% which was significantly below the 2010 figure of 1.8%.
GDP in the fourth quarter, however, decreased 0.7% on the preceding quarter or 0.5%, year on year. Since GDP contracted two quarters in a row, (the decrease in the third quarter was 0.2%), Italy was technically in “recession”.
Eurostat also reported a slowdown in the euro zone. Euro zone GDP in the fourth quarter of 2011 fell 0.3% from the preceding quarter.
There was a rising price trend throughout 2011. Consumer price inflation increased from 2.3% in January to 2.9% in
December with average annual inflation for 2011 reaching 2.8% compared with an average of 1.5% for 2010.
The continual increase in raw material and, in particular, energy and food prices contributed to rising inflation which in Italy
touched 3.4% in October up from the 2.1% in January 2011.
Weak employment and the fall in disposable incomes resulted in prudent consumption patterns.
Propensity to save also declined in line with long-term trends. The rate of Italian consumers’ savings is now amongst the
lowest in the euro zone.
BancoPosta’s results for the year, however, continued to be positive, notwithstanding the economic uncertainties.
THE ITALIAN BANKING SYSTEM
The weakness of the sovereign debt market and, specifically, the increase in the risk premium on Italian government debt
resulted in rising funding costs for Italian banks. Italian bank interest rates gradually increased in line with rising money market and official ECB rates.
Interest rates on consumer loans, however, remained at historically low levels.
Bank lending began to slow in the second half of the year after its sound performance in the first half in consequence of
the recovery of lending to non-finance companies and strong growth of loans to consumers in the form of home mortgages.
Overall lending to the manufacturing sector during the summer grew at rates below the peaks of May and June whereas
consumer loans contracted in line with lower home mortgage lending.
Average overall interest rates paid on customer deposits also tended to increase. The increase in repo rates and bond yields
was more pronounced than current account credit interest.
Funds flowing into Italian banks continued to grow due to the strong recovery of bonds which diverted funds from weak
customer deposits.
There was a progressive contraction in current accounts whereas term deposits rose as did the recourse by Italian banks
to Eurosystem refinancing facilities.
Difficulties in attracting wholesale funding were largely offset by bond sales to retail customers which performed better
than the euro zone average.
The ability to attract indirect funding varied from bank to bank. The recovery of debt securities held in custody for individuals, corporates and to a lesser extent non-finance companies and family businesses continued during the first part of the
year. This was evidence of the ability to place corporate and government bonds with bank customers.
Turning to investment management, Italian mutual funds during the period were characterised by a net outflow which, however, appeared to reverse in the fourth quarter for cash funds whereas equity and bond fund outflows persisted.
The asset structure of Italian banks sets itself apart from their British, French and German counterparts since 61% of total
assets is in the form of claims on private customers whereas the share of private customers in the total assets of British,
French and German banks is 34%. Non-Italian banks’ exposure to private customers is marginal since the banks’ assets primarily consist of financial instruments and derivatives. This is confirmed by data on Italian banks’ financial assets which are
22% of total assets whereas the figure for other banking groups is 40%.
Turing to liabilities, customer deposits and securities in issue of over 64% continue to be the main source of funds for Italian
banks. The European average is 50%.
Cost and revenue allocation
Given the fact that Poste Italiane is a single legal entity, the Company’s general accounting system maintains its uniform
characteristics and capabilities. In this context, the general principles governing administrative and accounting aspects of
BancoPosta RFC are as follows:
• identification of transactions in Poste Italiane SpA’s general ledgers relating to BancoPosta’s ring-fenced operations which
are then extracted for recording in BancoPosta’s separate ledgers;
• allocation to BancoPosta of all relevant revenues and costs. In particular the services rendered by the different functions
of Poste Italiane SpA to BancoPosta RFC, are exclusively recorded as payables in BancoPosta’s separate books, in special accounts only, and subsequently settled;
• settlement of of all incoming and outgoing third party payments by the Poste Italiane SpA Finance function;
• allocation of income taxes based on BancoPosta’s separate income statement after adjusting for deferred taxation;
• reconciliation of BancoPosta’s separate books to Poste Italiane’s general ledger;
• BancoPosta’s income, assets and liabilities and cash flows are, in compliance with statutory requirements, separately
reported by Poste Italiane at the end of each year. The Separate Report is prepared in accordance with international financial reporting standards, as endorsed for application in the European Union and applied by Poste Italiane, and is consistent, where applicable, with Bank of Italy Circular 262 - Banks’ Financial Statements: Layouts and Preparation.
As explained above, the General Operating Guidelines identify each relevant activity and provide rules for the allocation of
costs incurred by Poste Italiane SpA’s functions in relation to BancoPosta’s operations. Costs are allocated to BancoPosta
by transfer pricing as determined with reference to:
• market prices for similar services, e.g., the free market comparable price method; or,
• cost plus a mark-up, e.g., the cost plus method, when there are no free market prices for the particular services provided by Poste Italiane functions.
Transfer prices are determined by the application of fixed rates plus a variable component used to reflect the achievement
of qualitative/quantitative and performance objectives. These prices are reviewed annually as part of the planning and budget process.
Finally, the General Operating Guidelines provide for the management of operating losses. As explained in the risk management section, the Guidelines prescribe that any operating losses be deducted from payments made to the relevant
Poste Italiane function outside the ring-fence.
Services provided by Poste Italiane to BancoPosta are subdivided into three macro areas in accordance with their nature
as shown in the general and internal operating guidelines.
112
Commercial activities
Commercial activities include the activities of the Private Customer and Large Account and Public Sector functions and
includes the marketing of BancoPosta products and services to all customer segments.
The commercial network is engaged in the sale of BancoPosta products and services in connection with the operations
pursuant to Presidential Decree 144 of 14 March 2011, as amended.
Support Services
Support services include IT (e.g., design, development and implementation of software and systems in support of
BancoPosta), Premises (preparation, operation and furnishing of BancoPosta premises, etc.), Finance (management of the
aggregate cash balances of postal current accounts and related BancoPosta services); Postal and Contact Centre Services
(specialist POS support (inbound), back office, promotions (outbound) and sundry.
Staff services
Headoffice functions include all overheads incurred for the cross support of the coordination and management of
BancoPosta by Purchasing, Legal Affairs, Accountancy and Control, External Relations, Human Resources and Organisation,
and Security & Safety.
The following table includes a summary of the Poste Italiane functions outside the ring-fence that engage in the transactions under discussion, reported by different macro-area of activity, with a brief indication of how transfer prices are determined.
Function
Commercial activities
Sales network
Allocation key
Fixed component: Cost + mark-up and variable component in accordance
with business targets achieved and service level
Chief Information Office
Real Estate
Support Services
Cost + mark-up
Determined with reference to floorspace, property appraisals
and maintenance costs
Finance
Postal Services
Call Center
Cost + mark-up
Standard rate times number of items handled
Number and type of calls
Accountancy and Control
Human Resources and Organisation
Security & Safety
Staff services
Legal Affairs
External Relations
Purchasing
Internal Auditing
Actual internal costs; external costs plus a mark-up
12.3.1 FINANCIAL REVIEW
KEY PERFORMANCE INDICATORS FOR THE PERIOD 2 MAY 2011 - 31 DECEMBER 2011
Income
(€m)
2 May 2011 – 31 December 2011
Net interest and other banking income
of which:
Net interest income
Net fee and commission income
Profits/(Losses) on trading and hedging activities
Profits/(Losses) on disposal of available-for-sale financial assets
3,467
Net income from banking activities
3,473
Operating expenses
1,063
2,321
8
75
(3,016)
Income before tax
457
Net profit for the period
256
Key income ratios(*)
Net interest income / Net interest and other banking income
31%
Recurring income / Net income from banking activities(**)
61%
Operating expenses / Net interest and other banking income(***)
87%
ROE(****)
26%
The key income ratios normally used reflect the unique nature of BancoPosta's balance sheet and the fact that payments to Poste Italiane in reimbursement of costs are classified as "administrative expenses". The absolute amounts of the ratios are, consequently, irrelevant and should not be used for market comparisons but for analyses over time. They will consequently become more meaningful from next year. The ratio of income for the period to
BancoPosta's own funds of 26% is more meaningful for the first eight months of operations.
(**)
Recurring income means interest and fee income under the Cassa Depositi e Prestiti contract.
(***)
Cost/income ratio.
(****)
8 month ROE.
(*)
Key balance sheet indicators
(€m)
Total assets
31 December 2011
42,480
of which:
Available-for-sale financial assets
13,465
Held-to-maturity financial assets
14,364
Due from customers
Liabilities
9,486
43,400
of which:
Due to banks and customers
Equity
40,822
(920)
of which:
BancoPosta’s ring-fenced capital
Valuation reserves
Net profit for the period
1,000
(2,176)
256
114
Key income, balance sheet and cash flow figures for the first eight months of BancoPosta RFC's operations are shown
below for the period from the establishment of BancoPosta RFC on 2 May 2011 to 31 December 2011.
RECLASSIFIED INCOME STATEMENT
Income/(expense) (€m)
Interest and similar income
Interest and similar expense
2 May 2011 – 31 December 2011
1,142
(79)
Net interest income
1,063
Fee and commission income
2,348
Fee and commission expense
(27)
2,321
Dividends and similar income
-
Profits/(Losses) on trading and hedging activities
8
Profits/(Losses) on disposals or repurchases
Net interest and other banking income
Net losses/recoveries on impairment
Net income from banking activities
Administrative expenses:
a) staff costs
b) other administrative expenses
Net provisions for liabilities and charges
Other operating income/(expenses)
Operating expenses
Income/(Loss) before tax from continuing operations
Taxes on income from continuing operations
Income/(Loss) after tax from continuing operations
Income/(Loss) after tax from discontinued operations
Net profit/(Loss) for the period
75
3,467
6
3,473
(2,991)
(57)
(2,934)
(12)
(13)
(3,016)
457
(201)
256
256
Notwithstanding the weak economy, BancoPosta earned 256 million euros for the first eight months of its ring-fenced operations.
Net interest income of 1,063 million euros, which is the difference between interest earned on investments in government
securities and deposits at the Ministry of the Economy and Finance (1,142 million euros) and interest on deposits paid to
current account holders (67 million euros) and first ranking credit institutions with which BancoPosta concludes sale and
buy-back agreements (12 million euros).
Fee income amounted to 2,348 million euros, 1,054 million euros of which related to transactions under the agreement
with Cassa Depositi e Prestiti, 778 million euros to the processing of bills and sundry payments and 516 million euros for
other services including those related to the distribution of insurance projects and the management of current accounts.
Fees paid amounted to 27 million euros most of which related to debit/credit card clearing services.
Financial assets generated income of 82 million euros for the period, consisting of:
• profit of 75 million euros on disposal available-for-sale securities;
• net trading and hedging income of 8 million euros as a result of the discontinuance of forward purchases initially classified as hedges;
• dividends received of 53 thousand euros on the investment in the Mastercard company.
The above assets generated net interest and other banking income of 3,467 million euros with net income from banking
activities, after adjusting for 6 million euros in recoveries of customer loans, of 3,473 million euros.
OPERATING COSTS
Operating expenses
(€m)
2011
Administrative expenses:
2,991
a) Staff costs
57
b) Other administrative expenses
2,934
12
Net losses/recoveries on impairment of property, plant and equipment
-
Net losses/recoveries on impairment of intangible assets
-
Other operating income/(expenses)
13
Total operating expenses
3,016
Operating costs amounted to 3,016 million euros and largely consisted of other administrative expenses (2,934 million
euros) which are the transfer payments to Poste Italiane in accordance with the General Operating Guidelines in application of specific internal guidelines. Other administrative expenses also include the cost to BancoPosta of the commercial
network.
Staff costs of 57 million euros are for BancoPosta employees as shown in the table below. As part of its operations and in
accordance with the General and attached Internal Operating Guidelines, BancoPosta is, however, the recipient of services provided by Poste Italiane employees, particularly Post Office and Contact Centre personnel.
BANCOPOSTA EMPLOYEES
Average number of employees(*)
Category
Senior managers
Middle managers (A1 and A2)
2011
45
357
Grades B, C, D, E and F
1,345
Total permanent staff
1,747
(*)
May-December 2011. Full Time Equivalents.
Net provisions charged against income amounted to 12 million euros and relate to litigation and other costs in connection
with operating losses.
Profit from continuing operations before taxes was 457 million euros with 201 million euros in taxes charged against
income.
116
12.3.2 ASSETS, LIABILITIES AND CASH FLOW
RECLASSIFIED STATEMENT OF FINANCIAL POSITION
Assets
(€m)
Financial assets held for trading
2 May
2011
2,025
31 December
2011
2,497
-
13
15,365
13,465
14,711
14,364
200
665
9,773
9,486
Due from banks
Due from customers
Hedging derivatives
111
74
Deferred tax assets
320
1,181
Other assets
727
735
Total assets
43,232
42,480
Liabilities and Equity
2 May
2011
(€m)
Due to banks
Due to customers
Financial liabilities held for trading
31 December
2011
755
2,372
39,928
38,450
-
7
Hedging derivatives
120
617
Tax liabilities:
108
53
a) current
b) deferred
Other liabilities
Valuation reserves
Reserves
Net profit/(loss) for the period
Total liabilities and Equity
-
9
108
44
1,250
1,590
16
15
288
296
(233)
(2,176)
1,000
1,000
-
256
43,232
42,480
Current account deposits by Public Sector entities are required to be deposited with the Ministry of Economy and Finance
(the "MEF"). Such amounts are remunerated at a variable interest rate as expressly agreed with the MEF for Treasury
services provided to BancoPosta on 8 May 2009 and extended, by addendum on 29 September 2011, to 30 June 2012.
The 2007 Budget Law, on the other hand, requires that private customer deposits in postal current accounts be invested
in euro zone government securities.
The treasury services agreement with the MEF also provides that a limited portion of the cash held in postal current
accounts by private customers may be invested in a separate reserve account held at the MEF (the "Buffer Account")
required to mitigate movements in current account balances.
During 2011 BancoPosta was engaged in reinvesting the funds deriving from maturing government securities and in the
trading of securities designed to progressively match the maturity profile of the portfolio with the investment model
approved by Poste Italiane’s Board of Directors. The new maturity profile was, among other things, based on a leading
market operator's statistical/econometric model that reflects the interest rates and maturities typical of postal current
accounts. The model is also used as the basis for investment policies in order to limit exposure to rate and liquidity risks
by foreseeing mismatches caused by the need to marry the exigencies of risk management with those of improving returns
which are dependent on the ever changing yield curve.
Real estate (e.g., use and management of office space for BancoPosta’s operations) and technology (e.g., design and
implementation of new services, management and maintenance of operations and business software) services are
provided to BancoPosta by Poste Italiane SpA. Capital expenditure in 2011 was made to assure compliance with regulatory
requirements (e.g., banking transparency and monthly reporting) and to incorporate new technical and security standards
for VISA and Mastercard.
The provision of these services is regulated by internal operating guidelines and remunerated through the payment by
BancoPosta of transfer prices to Poste Italiane.
118
12.4 OPERATING REVIEW OF BANCOPOSTA RFC FOR THE PERIOD
REGULATORY AND MARKET ENVIRONMENT
The new banking transparency requirements introduced in 2011 were primarily the result of the transposition of the
Consumer Credit Directive into Italian law effective 1 June 2011, with the consequent:
• prepare, in accordance with the required standards, documents containing basic information on consumer credit (SECCI
- Standard European Consumer Credit Information), covering loans, salary loans and credit cards;
• revise and add to contracts and forms for loans, credit cards, BancoPosta salary loans and BancoPosta lines of credit;
• implement the procedures and communication processes involved in managing significant overdrafts.
The automated production and publication of mandatory transparency documents (factsheets, information leaflets and
information on changes to terms and conditions introduced by the financial service provider).
The Bank of Italy order on the prevention of money-laundering was issued in September 2011 imposing organisational
guidelines, procedures and internal controls compliant with the "Money-laundering and Anti-terrorism Guidelines". The
guidelines set out the overall approach adopted by Poste Italiane for the introduction of institutional arrangements for the
prevention and management of the risks of money-laundering and financing of terrorism, the allocation of responsibilities
in relevant departments, principle operating requirements and reporting. Furthermore, in 2011 the design of strengthened
anti-money laundering processes and procedures continued with the aim of:
• adding further customer checks to the IT processes involved in the initiation of ongoing relationships and the conduct of
one-off over-the-counter transactions of amounts equal to or over 5 thousand euros;
• implementing “in-line” anti-terrorism controls in order to immediately block transactions (customer data, the initiation of
relationships and the conduct of one-off transactions);
• activating new functions to support the branch network in reporting suspect transactions and adding to the IT support
available to post offices in assessing irregular transactions.
The Government's issuance on 16 November 2011 of the so-called “Salva Italia” (“Rescue Italy”) and “Cresci Italia” ("Grow
Italy") decrees had a significant effect on BancoPosta’s operations and services, primarily entailing:
• the introduction of stamp duty on account statements for periodic notices sent to customers regarding financial products
not requiring safekeeping;
• the prohibition, as an improper business practice, of requiring customers obtaining loans to take out insurance arranged
by or open an account with the lender. Furthermore when arranging loans and advances to customers subject to the
arrangement of life insurance, lenders are required to provide the customer with at least two different offers from groups
unrelated to the lender so that the customer can choose the most suitable;
• the introduction of basic account services for socially disadvantaged customers with an adequate number of services and
transactions combined with a free-of-charge debit card and a streamlined, transparent, easily comparable fee structure;
Work is currently underway on the development of procedures to introduce the new services required and any subsequent
changes necessitated by implementing decrees or in response to clearly formulated requests.
On the subject of ADR (alternative dispute resolution), which is designed to reduce the impact on the ordinary courts of
certain types of dispute between intermediaries and customers over matters relating to banking, financial and insurance
services, the obligation introduced by Legislative Decree 28 of 4 March 2010 came into effect on 21 March 2011. This
requires the parties to enter into mediation proceedings before going to court. Moreover, the special Conciliation and
Arbitration Service set up by the CONSOB to resolve disputes between investors and intermediaries, resulting from alleged
violations of information, fairness and transparency requirements in contracts with investors, also began operating on 21
March 2011. In this regard, Poste Italiane has taken steps to implement the necessary procedures and ensure transparent
communication with customers.
In February 2012 the Bank of Italy ordered an audit of BancoPosta RFC pursuant to art. 54 of Legislative Decree 385/93.
The audit is ongoing.
COMMERCIAL OFFERING
The gross annual interest rates payable on the two types of retail current accounts offered were modified in 2011: from 1
September the rate payable to Conto BancoPosta Più account holders who have demonstrated their loyalty was set at
1.00%, whilst the rate paid to Conto BancoPosta customers was lowered from 0.15% to 0.00%.
With regard to SMEs, the Group launched Conto BancoPosta In Proprio No Profit, a current account specifically designed
for the non-profit sector, and Conto BancoPosta Procedure Fallimentari, to be used in managing the assets of insolvent
entities. A promotional interest rate of 2% was also introduced for BancoPosta In Proprio account holders increasing the
amount deposited, with the dual objective of improving the quality of the existing customer base and acquiring new
customers.
The aim of defending and relaunching the Bollettino product for paying pre-printed bills, offering a service that is more
widely available around the country, led to an increase in specially enabled external channels in 2011, with over 13 thousand
tobacconists linked up to the Banca ITB network and more than 120 banks able to offer the service.
The electronic money segment, where 6.3 million Postamat Maestro cards and 8 million Postepay cards have been issued,
witnessed, among other things:
• development of channels for accessing the BancoPosta Più card offering, with the possibility of applying for a card from
both the BancoPosta and BancoPostaclick accounts and initial trials of distance marketing of the card, such as direct mailing;
• creation of e-postepay, the first completely virtual card, which can be applied for free of charge on the www.postepay.it
website for use at retailers that use the MasterCard online service and which, from October, can also be activated using
a Poste Mobile SIM card;
• the commercial launch of contactless Postepay cards in the Milan area, allowing holders to use the card as both a prepaid card and as a season ticket for the city’s public transport system;
• the development, in collaboration with the partners Edenred and Qui!Group, of a multi-application prepaid Postepay Lunch
card which, in addition to the usual payment functions, can also be used as an electronic luncheon voucher.
Finally, the external top-up channel for Postepay cards, comprising over 13 thousand tobacconists linked up to the Banca
ITB network and around 40 thousand SISAL betting shops, was extended. This resulted in a significant increase in top-ups,
with over 14 million registered.
A large number of promotional campaigns were run in 2011 in order to promote loan products, including:
• “Mutuo BancoPosta zero spese di istruttoria e di perizia”, which exempts borrowers from the payment of arrangement
and valuation fees, which are substantial in the case of mortgages;
• “Prestito BancoPosta Zero Spese”, the loan product that, in addition to eliminating application and collection fees and
statement charges, also refunds taxes payable by law and allows borrowers to effect early repayment without incurring
any charge;
• “Prontissimo BancoPosta Rata Tonda”, which is a loan offering, for specific amounts and terms, repayment in monthly
round amounts that are easy to remember;
• “Prestito BancoPosta e Prontissimo BancoPosta Extracash”, the small loan of 1,500 or 2,000 euros offered at particularly
attractive conditions and reserved to BancoPosta customers who already have a BancoPosta or Prontissimo BancoPosta
loan and have kept up with their repayments;
• “Prontissimo BancoPosta Salto Rata”, a flexible loan for which a maximum of five repayments can be postponed at no
additional cost. This initiative was also backed up during the first month by the offer of a promotional interest rate;
• Promotions were also held during the year for specific family needs, such as the Prestito BancoPosta Famiglia loan for
newlyweds and new parents, Prestito BancoPosta Studi for children's school fees, and Prestito Salute to cover medical
and dental expenses.
Two new loan products were also introduced: Reverse Factoring, offered in association with Sace FCT (the SACE Group's
factoring company), that allows customers owed money by a Public Sector entity to factor the related receivables; and the
test phase of Prontissimo Affari BancoPosta, a medium-term business loan for sole traders and professionals.
120
The Postal Savings segment saw the renewal, for the three year period 2011-2013, of the agreement with Cassa Depositi
e Prestiti signed on 3 August 2011. This regulates and establishes remuneration for the distribution and management of
Interest-bearing Postal Certificates and Post Office Savings Books. Additionally, in the second half of the year, the sharp
drop in net deposits resulting from tough market conditions, partly as a result of the high interest rates being offered by
competing banks, forced Cassa Depositi e Prestiti and Poste Italiane to take counter measures. Two new certificates were,
consequently, issued in August (BFP DiciottomesiPLUS) and October (BFP 3X4) which were successful at increasing funds
inflow. BFP DiciottomesiPLUS is a short term investment, which on maturity in eighteen months is repaid with a yield in
excess of the traditional BFPDiciottomesi. The BFP 3X4 is a medium to long-term investment the interest rate on which
increases over its twelve-year term.
The trend in investment products was to select bonds structured to take advantage of rising interest rates over the medium to long-term. Issues related to two different types of Banco Popolare products (TassoMisto Cap&Floor 1^ e 2^ serie
and StepUp BancoPosta) and two Monte dei Paschi di Siena products (TassoMisto Cap&Floor 3^ e 4^ serie and
StepByStep BancoPosta a 6 anni).
Turning to Payments and International Money Transfer Systems, a new Ore 7 Moneygram Service was launched for the
transfer of money abroad at very low cost. The service is intended for transfers which are not urgent and can wait until
7.00am of the following morning to save around 50% of the transfer fees.
Online services
Online customers carried out over 18 million payment transactions during 2011, consisting of 4.9 million bill payments by
direct debit to current accounts or credit/Postepay cards, 450 thousand of which by way of BancoPosta Click, 2.3 million
credit transfers, 433 thousand by way of BancoPosta Click and including 23 thousand international payments, 1.2 million
giro payments from consumer to business customers, 4.8 million telephone top-ups and 5 million PostePay top-ups.
Online sales of financial products were also a success, with 116 thousand people subscribing to Interest-bearing Postal
Certificates on line and 2.5 thousand loan approvals.
In terms of investment services, the Trading On Line (TOL) service was launched in June, allowing customers to trade on
the secondary market and subscribe to offerings on the primary market on line.
Finally, a new Postepay Web Security system was introduced in December to improve the security of Postepay and telephone top-ups as well as bill payments made on www.poste.it, www.postepay.it, www.bancopostaclick.it. The new payments system requires that the Postepay card be used together with a cell phone that has been associated with the card.
A text message is sent to the phone containing a one-time password separately generated for each individual transaction.
OPERATING RESULTS
Revenues
2 May 2011 –
31 December 2011
(€m)
Current Accounts
Bills
Income from investment of customer deposits
Other Revenues from current accounts and prepaid cards
Money Transfers(*)
Postal savings and investment
Post Office Savings Books and Certificates
Government securities
Equities and bonds
Insurance policies
Investment funds
Securities Deposits
Delegated Services
Loan products
Other products(**)
Total Revenues
(*)
(**)
1,892
383
1,132
377
48
1,287
1,054
6
56
148
9
14
120
110
28
3,485
This item includes all revenues from domestic and international money orders and inbound and outbound Eurogiros.
This item includes revenues from tax collection forms and tax returns, and revenue stamps.
Deposits
31 Dec 2011
(€m)
Current Accounts(*)
Postal Savings Books(**)
Interest-bearing Postal Certificates(**)
(*)
(**)
Average deposits for the period.
Deposits include accrued interest for the year.
Number of transactions
(‘000)
Pre-printed bills processed
Domestic postal orders(*)
International postal orders
Inbound
Outbound
Pensions and other standing orders
Tax services
(*)
38,288
92,614
208,187
2 May 2011 –
31 December 2011
338,564
4,781
2,061
1,125
936
56,584
10,120
Includes Vaglia Circolari giro drafts.
Volumes
31 Dec 2011
(‘000)
Number
Number
Number
Number
of
of
of
of
customer current accounts
credit cards
debit cards
prepaid cards
5,575
437
6,290
8,217
122
BancoPosta's revenues for the period 2 May 2011 to 31 December 2011 total 3,485 million euros and consist primarily of
1,892 thousand euros or 54% of the total in revenues earned on current accounts. The greatest part of current account revenues consists of income earned on the investment of deposits (1,132 million euros), which is a function of both average
current account deposits (38.3 billion euros) and the performance of investments in securities.
Revenues from the processing pre-printed bills are 383 million euros and are correlated to the volume of bill payments (339
million), whereas other current account and prepaid card-related revenues amounted to 377 million euros.
The sale of Interest-bearing Postal Certificates and inflows of Post Office Savings Books funds, the income on which is
linked to a mechanism agreed with Cassa Depositi e Prestiti SpA46 tied to the achievement of net savings inflow targets,
contributed 1,054 million euros to BancoPosta’s service revenues. Post Office Savings Books deposits amount to 92.6 billion euros at 31 December 2011, whilst outstanding Interest-bearing Postal Certificates amount to 208.2 billion euros.
Asset and fund management47 revenues total 233 million euros and were principally earned on bond placements (56 million euros) and insurance policy sales (148 million euros).
Delegated service revenues amount to 120 million euros and included fees for the payment of INPS, INPDAP and other
pensions and other sums for the Ministry of the Economy and Finance48.
Revenues from the distribution of loan products total 110 million euros and relate to personal loans, mortgage loans, overdrafts, salary loans and credit protection.
46. The agreement for the three-year period 2011-2013 was signed on 3 August 2011 and subsequently amended on 12 December 2011 and 15 March 2012.
47. Asset and fund management includes the distribution of government securities, equities, bonds, life assurance policies, mutual investment funds and
commissions on safe custody accounts.
48. INPDAP and ENPALS pensions were combined from 1 January 2012 in accordance with Law Decree 201 of 6 December 2011 (the Rescue Italy Decree)
converted with amendments into Law 214 of 27 December 2011.
12.5 EVENTS AFTER 31 DECEMBER 2011 RELATING TO BANCOPOSTA RFC
During the second half of 2011 the downgrade of Italy’s credit rating and heightened financial market volatility had a significant impact on the price of Italian government securities, generating substantial fair value losses on those classified as
available-for-sale (AFS), which were recognised in the fair value reserve in Equity, net of tax.
At 31 December 2011 the fair value reserve attributable to BancoPosta RFC had a negative balance of 1,991 million euros,
net of tax, thus exceeding the reserve of 1 billion euros initially attributed by Poste Italiane SpA.
However, postal current account deposits have remained stable and BancoPosta’s Equity continues to be sufficient to back
the available-for-sale securities through to maturity, with steps taken and instruments created to cope with unexpected
movements in deposits, without having to sell large volumes of securities at a loss.
In addition, there was a general relaxation in early 2012 of the severe tensions across the international financial system and
exceptional turbulence and volatility that had marked the preceding year, resulting in a narrowing of yield spreads between
European and Italian bonds and, especially, German Bunds. This resulted in a reduction in the negative balance of the fair
value reserve attributable to BancoPosta RFC from 1,991 million euros to 835 million euros at 31 March 2012.
In January 2012, the Company's Board of Directors approved the participation of Poste Italiane-BancoPosta RFC, for up to
6 billion euros, in the sale and buyback scheme launched by the European Central Bank (ECB).
A total of 5 billion euros in loans collateralised by securities were obtained in February 2012 from the ECB as part of its
Long Term Refinancing Operations ("LTRO").
The purpose of loans was to finance the early purchase of securities for the investment portfolio, represented by Securities
maturing over the next 36 months.
12.6 OUTLOOK FOR BANCOPOSTA RFC
A major BancoPosta promotion will be launched in January 2012 to attract new current account deposits through a promotion aimed at both new and existing current account holders, offering gross credit interest of 4% on new deposits.
There will be a further relaxation of the requirements for various private customer segments to obtain the benefits of Conto
BancoPosta Più.
The year will also be marked by the impact of the so-called “Salva Italia” (“Rescue Italy”) Decree, introduced by Law
Decree 201 of 6 December 2011, converted into Law 214 of 22 December 2011, which provides for the following, with
regard to reduction of the limit for the traceability of financial flows to 1,000 euros and efforts to combat the use of cash:
• mandatory payment of pensions and wages by electronic payment instruments, including prepaid cards for amounts
exceeding 1,000 euros;
• a ban on banks and finance companies charging recipients of minimum pensions, including charges for revenue stamps;
• mandatory offer by banks and finance companies of basic account services with simplified, transparent and easily comparable fee structures.
The medium-term loan product for sole traders and professionals, Prontissimo Affari BancoPosta, which was introduced on
a test basis in December 2011, will be officially launched.
The year will see the introduction of new remote banking services, such as increased security of BPIOL and new Interbank
Corporate Banking and Electronic Invoicing. The acquiring service associated with BancoPosta In Proprio Pos will also be
developed.
The electronic money segment will be broadened with new products. This will, in particular, entail the launch of a new credit card for SMEs and professionals developed together with Deutsche Bank and Visa, and the broadening of the Sconti
BancoPosta loyalty programme to Deutsche Bank's retail Classic and Gold credit cards.
A new PostePay prepaid card will be launched called MyPostepay which can be obtained directly from the Company's web
page and personalised with an image selected by the customer including a personal photograph.
124
Furthermore, to promote the launch of e-postepay, two new top-up methods will be introduced: online at www.postepay.it,
by Visa or Mastercard or by bank transfer. These methods will be introduced at a later date for other postepay cards. This
will be accomplished by providing each e-postepay card with its own, unique IBAN that can be given to a bank when transferring funds to the card.
The post office savings products provided by Cassa Depositi e Prestiti (Post Office Savings Books and Interest-bearing
Postal Certificates) will be restructured in 2012 by adding new cash products designed to better meet customer needs and
compete with the numerous similar products currently being offered.
The above measures will permit BancoPosta's results for 2012 to be proportionately in line with those of its first eight
months of operation in 2011.
12.7 OTHER INFORMATION ON BANCOPOSTA RFC
Related party transactions
The principal transactions conducted by the BancoPosta regard the Ministry of the Economy and Finance and Cassa
Depositi e Prestiti, with particular reference to the post office savings and other Poste Italiane services.
Detailed information on transactions between BancoPosta and its related parties are shown in Part H, Note 37 of
BancoPosta RFC’s Separate Report.
Separate financial statements
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.
Intersegment transactions
Intersegment transactions between BancoPosta and Poste Italiane functions, which have not been included, are set out in
Part A.1, Section 4 of Note 37 of the financial statements.
12. BancoPosta RFC Management Review | 13. Board of directors’ proposals to the shareholders 125
13. BOARD OF DIRECTORS’ PROPOSALS TO THE
SHAREHOLDERS
The Board of Directors proposes that the General Meeting:
• approve the financial statements of Poste Italiane SpA for the year ended 31 December 2011, consisting of the statement
of financial position, the income statement, the statement of comprehensive income, the statement of changes in Equity,
the statement of cash flows and the notes (including the Separate Report on BancoPosta RFC), accompanied by the
Directors’ Report on Operations;
• appropriate profit for the year of 698,538,628 euros as follows:
a) 37,183,003 euros to the legal reserve;
b) 256,327,637 euros in profit attributable to BancoPosta RFC’s net profit for the year to retained earnings, to be
appropriated to BancoPosta RFC’s Equity;
c) the remaining 405,027,988 euros in accordance with the resolutions to be adopted by the General Meeting.
126
APPENDIX – KEY PERFORMANCE INDICATORS
FOR PRINCIPAL POSTE ITALIANE GROUP COMPANIES
The figures shown in the tables below reflect the financial and operational indicators (as deduced from the related reporting
packages) of the principal Group companies prepared in accordance with International Financial Reporting Standards (IFRS)
and approved by the boards of directors of the respective companies.
Postel SpA
Increase/(Decrease)
(€000)
Operating profit
Profit for the period
Investment
Equity
Permanent workforce - end of period
Flexible workforce - average
2010
2011
Amount
%
296,469
23,305
9,692
20,640
148,625
1,046
115
267,040
(29,960)
(25,019)
17,124
125,688
1,102
96
(29,429)
(53,265)
(34,711)
(3,516)
(22,937)
56
(19)
(9.9)
n/s
n/s
(17.0)
(15.4)
5.4
(16.5)
The company employed on average 4 people seconded from the Parent Company (7 in 2010).
PostelPrint SpA
Increase/(Decrease)
(€000)
Operating profit
Investment
Equity
2010
2011
Amount
%
115,007
6,400
4,058
538
36,891
231
23
115,678
(484)
(895)
627
36,023
229
21
671
(6,884)
(4,953)
89
(868)
(2)
(2)
0.6
n/s
n/s
16.5
(2.4)
(0.9)
(8.7)
Increase/(Decrease)
(€000)
Operating profit
Investment
Equity
2010
437,736
(41,535)
(34,508)
6,225
52,449
1,334
13
2011
440,755
(11,273)
(7,619)
4,049
44,894
1,342
12
Amount
3,019
30,262
26,889
(2,176)
(7,555)
8
(1)
%
0.7
(72.9)
(77.9)
(35.0)
(14.4)
0.6
(7.7)
Appendix - Key performance indicators for principal Poste Italiane Group companies 127
Italia Logistica Srl (*)
Increase/(Decrease)
(€000)
Operating profit
Investment
Equity
2010
2011
Amount
%
87,473
(3,627)
(3,544)
1,786
1,876
66
16
91,352
(3,227)
(2,685)
2,696
166
64
34
3,879
400
859
910
(1,710)
(2)
18
4.4
(11.0)
(24.2)
51.0
(91.2)
(3.0)
n/s
Since 2008 the company has been accounted for using proportionate consolidation. In the above table it is consolidated on a line-by-line basis.
The amounts shown for 2011 are those provided for the consolidated financial statements and have not yet been approved by the company's board of directors.
(*)
Poste Tutela SpA
Increase/(Decrease)
(€000)
Operating profit
Investment
Equity
2010
2011
Amount
%
81,325
1,501
971
21
8,146
4
85,126
1,680
1,156
9
9,310
6
3,801
179
185
(12)
1,164
2
4.7
11.9
19.1
(57.1)
14.3
50.0
Poste Vita SpA (*)
Increase/(Decrease)
(€000)
Earned premiums
Financial assets
Balance of technical account for life assurance
and Financial liabilities at fair value
Equity
(**)
2010
2011
Amount
%
9,500,212
188,058
43,677,787
9,513,878
131,736
45,507,043
13,666
(56,322)
1,829,256
0.1
(29.9)
4.2
42,450,276
1,240,577
168
4
44,291,918
1,607,118
201
8
1,841,642
366,541
33
4
4.3
29.5
19.6
100.0
(*)
The figures shown have been prepared in accordance with IFRS and therefore may not coincide with those in the financial statements prepared in accordance with the Italian Civil Code and Italian GAAP.
(**)
Earned premiums are reported gross of outward reinsurance premiums.
Increase/(Decrease)
(€000)
Fee and commission income
Financial assets (liquidity and securities)
Equity
2010
2011
Amount
%
35,074
31,172
17,210
65,556
66,467
38
31,500
18,891
8,357
73,245
74,757
40
(3,574)
(12,281)
(8,853)
7,689
8,290
2
(10.2)
(39.4)
(51.4)
11.7
12.5
5.3
The company employed on average 0.1 people seconded from the Parent Company (5 in 2010).
Postecom SpA
Increase/(Decrease)
(€000)
Operating profit
Investment
Equity
2010
2011
Amount
%
75,891
84
(1,106)
6,301
38,721
244
8
80,611
5,846
4,100
9,134
42,839
270
4
4,720
5,762
5,206
2,833
4,118
26
(4)
6.2
n/s
n/s
45.0
10.6
10.7
(50.0)
128
PosteMobile SpA
Increase/(Decrease)
(€000)
Operating profit
Investment(*)
Equity(*)
2010
172,927
9,542
5,464
16,500
14,886
164
0
2011
288,385
26,251
16,568
65,956
61,599
316
1
Amount
115,458
16,709
11,104
49,456
46,713
152
1
%
66.8
n/s
n/s
n/s
n/s
92.7
n/s
(*)
The figures for 2011 include the capital increase of 29,919 thousand euros subscribed by Poste Italiane SpA via the contribution of its Telecommunications
unit. The contribution included, among other things, intangible assets and property, plant and equipment with a carrying amount of 35,363 thousand euros.
Increase/(Decrease)
(€000)
Operating profit
Investment
Equity
2010
44,908
30,116
18,338
779
435,616
11
2011
23,341
6,043
6,371
1,408
441,997
14
Amount
(21,567)
(24,073)
(11,967)
629
6,381
3
%
(48.0)
(79.9)
(65.3)
80.7
1.5
27.3
The company employed on average 1 person seconded from the Parent Company (1 in 2010).
PosteShop SpA
Increase/(Decrease)
(€000)
Operating profit
Investment
Equity
2010
56,195
(2,289)
(2,500)
254
3,307
27
2011
46,552
2,141
1,284
394
4,548
34
Banca del Mezzogiorno - Mediocredito Centrale SpA
(€000)
Net interest income (*)
Net fee and commission income (*)
Profit for the period (*)
Financial assets
Equity
2011
3,347
14,069
699
815,667
139,273
183
5
The company employed on average 8 people seconded from the Parent Company.
(*)
The amounts shown for 2011 refer to the period from 1 August 2011 (the date of acquisition of the
company) and 31 December 2011.
Amount
(9,643)
4,430
3,784
140
1,241
7
%
(17.2)
n/s
n/s
55.1
37.5
25.9
Appendix - Key performance indicators for principal Poste Italiane Group companies | Glossary 129
GLOSSARY
Business to Business (also B2B): trading between companies.
Business to Consumer (also B2C): online trading between companies and final consumers.
Coding Service Centres (CSC): video coding centres for sorting equipment.
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: the computerisation of Public Sector 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.
ICAAP: the Internal Capital Adequacy Assessment Process requires companies to assess their capital adequacy internally
with respect to the risks assumed. This process, together with the Supervisory Review Process or “SREP”, represents the
“second pillar” in Basle 2.
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.
Master Distribution Centres: primary distribution centres which also serve as transit points for hubs, the provider of
notification services, and as receiving locations for large customers.
Phishing: attempt to criminally and fraudulently acquire confidential information by masquerading as a trustworthy entity
in an electronic communication.
Picking: this is one of the activities carried out as part of warehouse logistics and refers to the process of moving material
from its original location to another, which may be an area within the same warehouse or another facility. Picking may be
manual or automated. In the latter case, personnel only select the material, which is then moved by mechanical means.
PostEurop: a European association that aims to optimise postal operations and services in Europe and promoting greater
cooperation among its member states.
Reverse Logistics: services typically relating to items which, once delivered, are returned to the sender (e.g., items
returned for technical assistance or which must be replaced).
Time To Market: length of time it takes from a product being conceived until its being available for sale.
Universal Postal Union (UPU): a global organisation fostering cooperation amount postal operators, which regulates
and harmonises international postal exchange and provides stimulus for development by focusing on the improvement of
the quality of service provided to customers.
130
131
CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2011
statements and notes
ANNUAL REPORT
2011
132
CONTENTS
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
134
CONSOLIDATED INCOME STATEMENT
135
COMPREHENSIVE INCOME
136
CHANGES IN EQUITY
137
CONSOLIDATED STATEMENT OF CASH FLOWS
138
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
139
1. Introduction
139
2. Basis of accounting
140
3. Risk management
159
4. Operating segments
182
5. Property, plant and equipment
185
6. Investment property
188
7. Intangible assets
189
8. Investments accounted for using the equity method
191
9. Financial assets
193
10. Inventories
209
11. Trade receivables
209
12. Other receivables and assets
214
13. Cash and deposits attributable to BancoPosta
216
14. Cash and cash equivalents
216
15. Non-current assets held for sale
217
16. Share capital
218
17. Shareholder transactions
218
18. Earnings per share
219
19. Reserves
219
133
20. Technical provisions for insurance business
220
21. Provisions for liabilities and charges
221
22. Staff termination benefits and pension plans
223
23. Financial liabilities
224
24. Trade payables
230
25. Other liabilities
231
26. Revenues from sales and services
234
27. Earned premiums
238
28. Other income from financial and insurance activities
239
29. Other operating income
239
30. Cost of goods and services
241
31. Net change in technical provisions for insurance business
and other claims expenses
243
32. Other expenses from financial and insurance activities
244
33. Staff costs
245
34. Depreciation, amortisation and impairments
246
35. Capitalised costs and expenses
247
36. Other operating costs
247
37. Finance income/costs
248
38. Income tax expense
249
39. Related party transactions
254
40. Other information
259
41. Information on investments
263
42. Event after 31 december 2011
264
ATTESTATION OF THE SEPARATE AND CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011
PURSUANT TO ART.154-BIS OF LEGISLATIVE DECREE 58/1998
265
BOARD OF STATUTORY AUDITORS’REPORT
266
INDEPENDENT AUDITORS’REPORT
267
ANNUAL REPORT
2011
134
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
(€/000)
Note
31 December
2011
of which
related party
transactions
(Note 39)
31 December
2010
of which
related party
transactions
(Note 39)
1 January
2010
of which
related party
transactions
(Note 39)
Non-current assets
[5]
2,789,470
-
2,956,784
-
3,123,942
-
Investment property
[6]
149,234
-
162,945
-
153,676
-
Intangible assets
[7]
557,597
-
521,358
-
513,550
-
6,671
14,659
14,659
324,834 59,364,728
536,693
Investments accounted for using
the equity method
[8]
9,821
9,821
6,671
Financial assets
[9]
68,461,027
211,926
67,123,427
Trade receivables
[11]
181,555
-
216,583
-
254,315
-
Deferred tax assets
[38]
1,730,199
-
760,014
-
644,844
-
Other receivables assets
[12]
728,463
1,466
621,497
1,466
584,429
1,466
Total
74,607,366
72,369,279
64,654,143
Current assets
Inventories
[10]
46,939
-
44,190
-
52,595
-
Trade receivables
[11]
3,883,464
2,067,481
3,751,337
2,145,564
4,042,455
2,222,756
Current tax assets
[38]
68,974
-
52,408
-
50,358
-
Other receivables and assets
[12]
684,363
4,167
689,111
7,044
608,307
4,134
7,406,900 16,229,818
7,618,859
Financial assets
[9]
15,271,523
8,164,839
14,701,442
[13]
2,559,994
-
2,351,245
-
2,660,696
-
[14]
1,903,455
829,399
1,093,145
840,624
2,038,783
1,515,829
Total
24,418,712
[15]
TOTAL ASSETS
9,635
22,682,878
-
99,035,713
5,582
25,683,012
-
95,057,739
1,285
-
90,338,439
LIABILITIES AND EQUITY
(€/000)
Equity
Share capital
Reserves(*)
Retained earnings
Parent
Note
[16]
[19]
Minority interests
Total
31 December
2011
of which
related party
transactions
(Note 39)
31 December
2010
of which
related party
transactions
(Note 39)
1 January
2010
of which
related party
transactions
(Note 39)
1,306,110
(1,096,556)
2,638,648
2,848,202
-
1,306,110
(58,421)
3,135,376
4,383,065
-
1,306,110
663,618
2,605,182
4,574,910
-
13
-
13
-
13
-
2,848,215
4,383,078
4,574,923
Non-current liabilities
Staff termination benefits and pension plans
Deferred tax liabilities
Other liabilities
Total
[20]
[21]
[22]
[23]
[38]
[25]
44,260,432
540,010
1,196,269
1,945,603
248,994
135,574
48,326,882
46,179
227,417
6
41,738,868
451,572
1,323,481
2,191,263
293,795
140,244
46,139,223
- 35,927,121
43,750
425,924
- 1,445,954
371,122 3,286,155
417,328
6
152,692
41,655,174
39,323
512,668
6
Current liabilities
Trade payables
Current tax liabilities
Other liabilities
Total
[21]
[24]
[38]
[25]
[23]
1,009,053
2,016,318
95,037
1,534,144
43,206,064
47,860,616
8,556
553,348
78,761
316,210
875,427
1,622,563
43,888
1,703,489
40,290,071
44,535,438
10,664
911,069
239,870 1,698,450
79,570
76,792 1,715,632
150,555 39,703,621
44,108,342
11,639
284,791
72,701
182,049
95,057,739
90,338,439
TOTAL LIABILITIES AND EQUITY
(*)
99,035,713
This item includes the "Reserve for BancoPosta RFC ", totalling 1 billion euros, established on 14 April 2011 by appropriation from retained earnings.
Consolidated statement of financial position | Consolidated income statement 135
CONSOLIDATED INCOME STATEMENT
Note
2011
of which
related party
transactions
(Note 39)
[26]
10,108,572
2,660,318
10,133,509
2,666,138
Earned premiums
[27]
9,526,355
-
9,504,804
-
Other income from financial and insurance activities
[28]
1,876,908
-
1,982,500
-
[29]
181,647
3,917
216,130
4,389
[4]
21,693,482
[30]
2,628,003
147,289
2,597,716
152,288
Net change in technical provisions for insurance business
and other claims expenses
[31]
9,886,613
-
10,190,477
-
Other expenses from financial and insurance activities
[32]
894,503
-
388,332
-
Staff costs
of which non-recurring costs/(income)
[33]
5,896,510
(54,715)
29,931
-
6,004,505
(66,320)
29,511
-
[34]
543,913
-
547,232
-
[35]
(47,682)
-
(38,447)
-
[36]
250,169
12,259
277,609
5,248
(€/000)
Total revenue
2010
of which
related party
transactions
(Note 39)
21,836,943
1,641,453
1,869,519
Finance costs
[37]
147,673
20,670
160,671
26,964
Finance income
[37]
159,815
39,806
179,094
46,306
[8]
544
-
(490)
-
Profit/(loss) on investments accounted for
using the equity method
Income tax expense
1,654,139
[38]
807,758
1,887,452
-
869,531
PROFIT FOR THE YEAR
846,381
1,017,921
attributable to owners of the Parent
846,381
1,017,921
-
-
attributable to minority interests
Earnings per share
[18]
0.648
0.779
Diluted earnings per share
[18]
0.648
0.779
Consolidated financial statements
-
136
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
(€/000)
Note
2011
2010
846,381
1,017,921
Increase(Decrease) in fair value during the year
[19.1]
(2,780,366)
(896,610)
Transfers to profit or loss
[19.1]
(74,239)
(339,167)
[19.1]
(148,116)
86,659
Cash flow hedges
Increase/(Decrease) in fair value during the year
[19.1]
(70,998)
33,252
Actuarial gains/(losses) on provisions for staff termination benefits and pension plans
[22.1]
63,160
70,003
Taxation of items recognised directly in, or transferred from, Equity
[38.9]
979,315
336,097
Total other components of comprehensive income
(2,031,244)
(709,766)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(1,184,863)
308,155
attributable to owners of the Parent
(1,184,863)
308,155
-
-
attributable to minority interests
Consolidated statement of comprehensive income I Consolidated statement of changes in equity 137
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity
Reserves
(€/000)
Note
Balance at 1 January 2010
Total comprehensive income for the year
Retained
Cash flow
earnings/
hedge (Accumulated
reserve
losses)
Total Equity
attributable
to owners of
the Parent
Legal
reserve
Reserve for
BancoPosta
RFC
1,306,110 148,351
-
634,588
(119,321)
2,605,182
4,574,910
-
-
-
(842,383)
81,704
1,068,834
308,155
Share
capital
Fair value
reserve
Minority
interests
Total
Equity
13 4,574,923
-
308,155
Appropriation of Profit to Reserves
[19]
-
38,640
-
-
-
(38,640)
-
-
-
Dividends paid
[17]
-
-
-
-
-
(500,000)
(500,000)
-
(500,000)
1,306,110 186,991
-
(207,795)
(37,617)
3,135,376
4,383,065
13 4,383,078
- (1,928,751)
(148,332)
892,220* (1,184,863)
- (1,184,863)
Balance at 31 December 2010
Total comprehensive income for the year
-
-
[19]
-
38,948
-
-
-
(38,948)
-
-
-
Dividends paid
[17]
-
-
-
-
-
(350,000)
(350,000)
-
(350,000)
Establishment of BancoPosta RFC
[19]
-
-
1,000,000
-
- (1,000,000)
-
-
-
(*)
1,306,110 225,939
1,000,000 (2,136,546)
(185,949)
2,638,648
2,848,202
13 2,848,215
This item includes profit for the year of 846,381 thousand euros, actuarial gains on provisions for staff termination benefits of 63,160 thousand euros, net
of the related current and deferred taxation of 17,321 thousand euros
138
CONSOLIDATED STATEMENT OF CASH FLOWS
Note
2011
2010
Profit/(loss) before tax
[34]
Impairment of goodwill/goodwill arising from consolidation
[7]
[21]
Use of provisions for liabilities and charges
[21]
Provisions for staff termination benefits
[22]
Staff termination benefits paid
[22]
(Gains)/losses on disposals
[29]
(Gains)/losses on financial assets/liabilities measured at fair value
(Income)/Expenses from financial and insurance activities
(Dividends)
[37]
Dividends received
(Finance income realised)
[37]
(Finance income in form of interest)
[37]
Interest received
Interest expense and other finance costs
[37]
Interest paid
Losses and impairments/(Recoveries) on receivables
[36]
Income tax paid
[38]
Other changes
Cash generated by operating activities before changes in working capital
[a]
Changes in working capital:
(Increase)/Decrease in Inventories
[10]
(Increase)/Decrease in Trade receivables
(Increase)/Decrease in Other receivables and assets
Increase/(Decrease) in Trade payables
Increase/(Decrease) in Other liabilities
Cash generated by/(used in) changes in working capital
[b]
Increase/(Decrease) in liabilities attributable to financial activities
Net cash generated by/(used for) financial assets attributable to financial activities held for trading
Net cash generated by/(used for) available-for-sale financial assets attributable to financial activities
Net cash generated by/(used for) held-to-maturity financial assets attributable to financial activities
(Increase)/Decrease in cash and deposits attributable to BancoPosta
[13]
(Increase)/Decrease in other assets attributable to financial activities
Cash generated by/(used for) assets and liabilities attributable to financial activities
[c]
Payment of liabilities linked to financial contracts attributable to insurance activities
[23]
Net cash generated by/(used for) financial assets at fair value through
profit or loss attributable to insurance activities
Increase/(Decrease) in net technical provisions for insurance business
Net cash generated by/(used for) available-for-sale financial assets attributable to insurance activities
[9]
(Increase)/Decrease in other assets attributable to insurance activities
Cash generated by/(used for) assets and liabilities attributable to insurance activities
[d]
Net cash flow from /(for) operating activities
[e]=[a+b+c+d]
- of which related party transactions
Investing activities:
[5]
Investment property
[6]
Intangible assets
Investments
[8]
Other financial assets
Newly consolidated companies less cash
Disposals:
Property, plant and equipment, investment property and assets held for sale
Investments
[8]
Change in basis of consolidation
Net cash flow from /(for) investing activities
[f]
Proceeds from/(Repayments of) long-term borrowings
(Increase)/Decrease in loans and receivables
Increase/(Decrease) in short-term borrowings
Dividends paid
[17]
Net cash flow from/(for) financing activities and shareholder transactions
[g]
Net increase/(decrease) in cash
[h]=[e+f+g]
[14]
(€/000)
1,093,145
1,654,139
543,913
437,889
(220,064)
661
(133,712)
(32,826)
246,184
(571,600)
(81)
70
(20,831)
(136,195)
90,719
143,952
(57,735)
4,526
(777,688)
3,258
1,174,579
2,038,783
1,887,452
547,232
13,390
407,175
(415,348)
502
(111,746)
(100,976)
(139,946)
(739,708)
(376)
358
(40,020)
(132,726)
84,694
154,652
(77,682)
62,922
(782,891)
(4,179)
612,779
(2,749)
(69,990)
(85,865)
388,094
(181,218)
48,272
2,138,465
(6)
(1,522,634)
347,069
(208,749)
(1,327,684)
(573,539)
(663,031)
8,405
258,602
(89,503)
(75,887)
(48,553)
53,064
2,152
112,710
(268,086)
(1,510,042)
309,451
426,982
(926,833)
(1,005,189)
1,253,071
5,367,807
(5,646,929)
(2,472)
308,446
957,758
(482,405)
(480,268)
6,953,491
(5,602,437)
(1,861)
(136,264)
(397,254)
302,418
(210,182)
(1,223)
(203,080)
(2,608)
(99,225)
451,575
(247,056)
(1,180)
(185,745)
(1,700)
(482,229)
-
46,132
98,140
79,529
81,367
54,105
154,526
(85,608)
(350,000)
(226,977)
(194,874)
810,310
1,903,455
120,119
108,832
9,131
(679,828)
(29,837)
(187,543)
155,237
663,750
(500,000)
131,444
(504,957)
(945,638)
1,093,145
1,903,455
(323,987)
(17,765)
(15,588)
1,546,115
1,093,145
(26,647)
(12,155)
1,054,343
[14]
Consolidated statement of cash flows I Notes to the consolidated financial statements 139
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 - INTRODUCTION
Poste Italiane SpA (hereinafter also referred to as the “Parent Company”) derives from the conversion of the Public Entity,
Poste Italiane, under Resolution 244 of 18 December 1997 passed by the Interministerial Economic Planning Committee.
The Company’s registered office is at Viale Europa 190, Rome (Italy) and it is a wholly owned subsidiary of the Ministry of
the Economy and Finance (hereinafter also referred to as the “MEF”).
The Poste Italiane Group (the Group) provides a Servizio Postale Universale (a Universal Postal Service, provided under a
Universal Service Obligation) in Italy, whilst offering integrated communication, logistics, financial and insurance products
and services throughout the country via its national network of around 14,000 post offices. The Group operates in the three
segments of Postal Services, Financial Services and Insurance Services, which are supplied by the various business units
and Group companies. Postal Services include Mail, Express Delivery, Logistics and Parcels, and Philately. Financial
Services regard the activities of BancoPosta listed in art. 2 of Presidential Decree 144 of 14 March 2001, and primarily refer
to the collection of public deposits in all their forms, the supply of payment services, foreign currency trading, the promotion and marketing of loans issued by banks and other authorised financial institutions, and the provision of investment services. Insurance Services are provided by the subsidiary, Poste Vita, which operates in ministerial life assurance branches I,
III and V, and in ministerial non-life insurance branches I and II.
The Group increasingly aims to supply integrated services and innovative solutions to the general public, to firms and to
central and local government by exploiting its own distribution channels as well as the multiple and complementary competencies of Group companies.
On 26 February 2011, art. 2, paragraphs 17-octies et seq. of Law 10, which converted Law Decree 225 of 29 December
2010 into law, provided that Poste Italiane SpA’s shareholder should form ring-fenced capital to be used in relation to
BancoPosta’s operations only, as governed by Presidential Decree 144 of 14 March 2001. The ensuing resolution, which was
approved by the General Meeting held on 14 April 2011 and filed with the Companies’ Register on 2 May 2011, required the
Parent Company to establish ring-fenced capital of 1 billion euros. On 11 July 2011 the Court of Rome certified the absence
of any opposition from creditors or of any legal challenge to the above shareholder resolutions, thereby rendering them
effective from 2 May 2011.
These consolidated financial statements for the year ended 31 December 2011 have been prepared in euros, the currency
of the economy in which the Group operates. They consist of the statement of financial position, the income statement,
the statement of comprehensive income, the statement of changes in Equity, the statement of cash flows and the following notes. All amounts in the consolidated financial statements and the notes are shown in thousands of euros, unless otherwise stated.
140
2 - BASIS OF ACCOUNTING
2.1 - BASIS OF PREPARATION
The Poste Italiane Group prepares its consolidated financial statements under the International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board (IASB), and adopted by the European Union in EC
Regulation 1606/2002 of 19 July 2002, and pursuant to Legislative Decree 38 of 20 February 2005, which introduced regulations governing the adoption of IFRS in Italian law.
The term IFRS includes all the International Financial Reporting Standards, International Accounting Standards (IAS) and
interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC, previously known as the
Standing Interpretations Committee or SIC), adopted by the European Union and contained in the EU regulations published
through to 18 April 2012, the date on which the Board of Directors of Poste Italiane SpA approved these consolidated financial statements as part of the Annual Report.
Legislative Decree 195 of 6 November 2007, which implemented Directive 2004/109/EC that standardised the transparency requirements relating to the information published by issuers whose financial instruments are traded on a regulated market (the so-called Transparency Directive), has amended Legislative Decree 58 of 24 February 1998 (the Consolidated Law
on Finance), introducing the definition “listed issuers whose home member State is Italy”. Given that Poste Italiane SpA
falls within this definition as an issuer of bonds listed on the Luxembourg Stock Exchange, during preparation of this document the CONSOB regulations contained in Resolution 15519 of 27 July 2006 and in Ruling DEM/6064293 of 28 July 2006
were taken into account.
The accounting policies adopted, described in notes 2.2 and 2.3, reflect the fact that the Group 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 2010.
The statement of financial position has been prepared on the basis of the current/non-current distinction1. The format of the
income statement is based on the nature of expenses. The statement of cash flows has been prepared in accordance with
the indirect method2.
As required by CONSOB Resolution 15519 of 27 July 2006, each item in the statement of financial position, income statement and statement of cash flows shows the amounts deriving from related party transactions. The income statement also
shows, where present, income and expenses deriving from material non-recurring transactions or from non-recurring
events. Taking account of the different nature and the number of transactions carried out by Group companies, many items
of income and expense of a non-recurring nature may occur with significant frequency. These items of income and expense
are only presented separately when they are both of an exceptional nature and were generated by a transaction of a material nature.
Following the formation of BancoPosta's ring-fenced capital, certain components of the statement of financial position at
31 December 2011, a number of items in the income statement and the related notes have been reclassified with respect
to previous statements. This classification was also made necessary by the fact that the components of the ring-fenced
capital are accounted for by the Parent Company, where applicable, in accordance with Bank of Italy Circular 262 – Banks’
Financial Statements: Layout and Presentation. In order to provide a like-for-like basis for comparison with 2010, and in
accordance with the requirements of paragraph 39 of IAS 1 – Presentation of Financial Statements3, amounts in the statements of financial position at 31 December 2010 and 2009 and items in the statement of cash flows for 2010 have also
been reclassified.
1. Current assets include assets (such as inventories and trade receivables) that are sold, consumed or realised as part of the normal operating cycle even
when they are not expected to be realised within twelve months after the reporting period (paragraph 68, Revised IAS 1).
2. 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.
3. Paragraph 39 of IAS 1 - Presentation of Financial Statements states that when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements or when it reclassifies items in its financial statements, it shall present, as a minimum, three statements of financial position, two of each of the other statements and the related notes.
Notes to the consolidated financial statements 141
At the date of approval of these consolidated financial statements, there is no established practice on which to base interpretation and application of newly published, or revised, international accounting standards. The tax authorities have only
issued systematic official interpretations for a number of the effects of the tax-related measures contained in Legislative
Decree 38 of 20 February 2005, Law 244 of 24 December 2007 (the 2008 Budget Law) and the Ministerial Decree of 1
April 2009, implementing the 2008 Budget Law, which have introduced numerous changes to IRES and IRAP. In the meantime, the MEF Decree issued on 8 June 2011 contains instructions regarding the coordinated application of EU-endorsed
international accounting standards coming into effect between 1 January 2009 and 31 December 2010, in addition to regulations governing determination of the tax bases for IRES and IRAP. This does not, however, cover all aspects and, in view
of the fact that the Decree has only recently been issued, there are no significant legal interpretations or specific examples
of best practice. The consolidated finance statements have, therefore, been prepared on the basis of the best knowledge
currently available and taking account of best practice in this regard. Any future changes or updated interpretations will be
reflected in subsequent reporting periods, in accordance with the specific procedures provided for by the related standards.
2.2 - BASIS OF CONSOLIDATION
The Poste Italiane Group’s consolidated financial statements include the financial statements of Poste Italiane SpA and of
the companies over which the Parent Company directly or indirectly exercises control from the date on which control is
obtained until the date on which control is no longer held by the Group. Control is exercised both via direct or indirect ownership of voting shares, and via the exercise of dominant influence, defined as the power to govern the financial and operating policies of the entity, including indirectly on the basis of contractual or legal agreements, obtaining the related benefits, regardless of the nature of the equity interest. In determining control, potential voting rights exercisable at the end of
the reporting period are taken into account.
The financial statements used for consolidation purposes have been specifically prepared at 31 December 2011, after
appropriate adjustment, where necessary, to bring them into line with the accounting standards of the Parent Company.
Subsidiaries that, in terms of their size or operations, are irrelevant to a true and fair view of the Group’s results of operations and financial position are not consolidated.
Programma Dinamico SpA, a vehicle set up under Law 130 of 30 April 1999 that matches the definition of control established in the combined provisions of IAS 27 and SIC 12, is not consolidated as its separate statement of financial position,
income statement and cash flows are not material. Certain index-linked policies sold by Poste Vita SpA have invested in the
synthetic securities issued by this company in previous years and held in separately managed accounts. These securities
are accounted for in the company’s financial statements in Class D investments, where the risk is transferred to policyholders. In the Poste Italiane Group’s consolidated financial statements these synthetic securities are accounted for in financial
assets, in corresponding technical provisions and in financial liabilities measured at fair value.
The criteria adopted for consolidation on a line-by-line basis are as follows:
• the assets, liabilities, costs and revenues of consolidated entities are accounted for on a line-by line basis, where applicable attributing the minority interest in Equity and the profit/(loss) for the year to specific items reported separately in
consolidated Equity and the consolidated income statement;
• business combinations, entailing the acquisition of control of an entity, are accounting for using the purchase method.
The cost of acquisition is calculated on the basis of the fair values of the assets given, the liabilities incurred and the equity instruments issued by the acquirer, plus any directly attributable acquisition costs incurred. After re-determination of
the fair values of the assets and liabilities acquired and the cost of acquisition, any difference between the cost of acquisition and the fair values of the assets and liabilities acquired is, if positive, recognised as goodwill arising from consolidation, or, if negative, recognised in the income statement;
• acquisitions of minority interests in entities already controlled by the Group are not accounted for as acquisitions, but as
changes n equity; in the absence of a relevant accounting standard, the Group recognises any difference between the
cost of acquisition and the related share of equity acquired in Equity;
142
• significant transactions between companies consolidated on a line-by-line basis and unrealised gains and losses on such
transactions are eliminated, with the related tax effects, as are intercompany payables and receivables, costs and revenues, and finance costs and income;
• gains and losses deriving from the disposal of investments in consolidated companies are recognised in the income statement based on the difference between the sale price and the corresponding share of consolidated Equity sold.
Investments in joint ventures are accounted for using proportionate consolidation, reporting the Group’s share of jointly controlled entities’ assets, liabilities, income and expenses on a line-by-line basis. The carrying amounts of these entities’ current
and non-current assets and liabilities, income and expenses are reported in note 41.24
Investments in subsidiaries (note 41.3) that are not significant and are not consolidated, and those in companies over which
the Group exerts significant influence (associates, in which it is assumed that the Group holds an interest of between 20%
and 50%), are accounted for using the equity method. When the application of this method of accounting does not influence
the Group’s results of operations or financial position, the investment is recognised at cost less any impairment losses.
The equity method is as follows:
• the Group’s share of an associate’s post-acquisition profits or losses is recognised in the consolidated income statement
from the date on which significant influence or control is obtained until the date on which significant influence or control
is no longer exerted by the Group; provisions are made to cover a company’s losses that exceed the carrying amount of
the investment, to the extent that the Group has incurred legal or constructive obligations to cover such losses; changes
in the equity of companies accounted for using the equity method not related to the profit/(loss) for the year are recognised directly in Equity;
• unrealised gains and losses on transactions between the Parent Company/subsidiaries and the company accounted for
using the equity method are eliminated to the extent of the Group’s interest in the associate, unless the unrealised loss
provides evidence of an impairment.
The following table shows the number of subsidiaries by method of consolidation and measurement:
Subsidiaries
31 December 2011
31 December 2010
Consolidated on a line-by-line basis
Consolidated using proportionate consolidation
Consolidated using the equity method
16
1
7
16
1
7
Total subsidiaries
24
24
The following transactions took place during 2011:
• On 29 March 2011 the investments held by Poste Italiane SpA and Postecom SpA in PosteLink Scrl, amounting to 70%
and 15% respectively, were transferred to Postel SpA, which already held a 15% interest. Then, on 24 June 2011,
PosteLink Scrl was merged with and into Postel SpA, with effect for legal purposes from 30 June 2011 and with the tax
and accounting effects backdated to 1 January 2011.
• On 11 April Postel do Brasil Ltda carried out a capital increase with a value of 2,214,452 Brazilian reals (equal to 1,202,137
euros) by converting all the receivables due to Postel SpA from the Brazilian subsidiary, and written off in previous years,
and via a cash payment of 68,343 Brazilian reals (29,975 euros). The deed is currently being registered with the Brazilian
Trade Board and, following registration, the Sole Director will be able to formally place the company in liquidation. As a
result of the capital increase, the Group’s interest in Postel do Brasil Ltda has risen from 99.88% to 99.99%.
• On 1 August 2011 UniCredit SpA transferred ownership of its shareholding in MedioCredito Centrale SpA to Poste Italiane
SpA following execution of the agreement signed on 20 December 2010. The total cost incurred by the Parent Company
was 139,978,080 euros, consisting of a provisional price of 136,000,000 euros, paid on the transaction date, and subse4. The figures provided by Italia Logistica Srl for the consolidated financial statements have not yet been approved by the company’s board of directors.
quently topped up with a final payment of 3,978,080 euros. On 19 December 2011 MedioCredito Centrale SpA changed
its name to Banca del Mezzogiorno – MedioCredito Centrale SpA (hereafter also BdM-MCC).
A comparison of the assets and liabilities accounted for using the accounting policies of the seller and those of the Poste
Italiane Group is shown below:
Components of BdM-MCC SpA's financial position at 1 August 2011
Intangible assets to be allocated
Intangible assets
Deferred tax assets
Other non-current assets
Situation under
seller's accounting
policies
Situation under Poste
Group's accounting
policies
-
1,757
232
232
12
12
6,771
7,831
68,874
68,874
Current assets
689,964
687,532
Assets acquired
765,853
764,481
Non-current financial liabilities
Other non-current liabilities
13
330
582,661
582,661
7,659
7,067
35,311
36,202
Liabilities assumed
625,644
626,260
Equity acquired
140,209
138,221
Current liabilities
The Parent Company elected to apply the option granted by paragraphs 45 et seq. of IFRS 3 and to complete measurement
of the business combination involving MedioCredito Centrale SpA within twelve months of the acquisition date. At the date
of preparation of these financial statements the provisional difference between the price paid to the seller and the net value
at the acquisition date of the identifiable assets acquired and the identifiable liabilities assumed, measured in accordance
with IFRS 3, is 1,757 thousand euros. At 31 December 2011 this difference is accounted for in Intangible assets whilst
awaiting completion of the process of measuring the individual components of the net assets acquired (note 7.1).
BdM-MCC SpA's income statement
Net interest income
Net income/(loss) for the period
From date of
acquisition to 31
December 2011
3,347
14,069
699
A list of subsidiaries consolidated on a line-by-line basis and key information is supplied in note 41.1. Summary information
about investments in associates accounted for using the equity method is provided in notes 8.3 and 41.3.
144
2.3 - SUMMARY OF SIGNIFICANT ACCOUNTING STANDARDS AND POLICIES
The Poste Italiane Group’s consolidated financial statements have been prepared on a historical cost basis, with the exception of certain items that must be measured at fair value. The significant accounting standards and policies are described
below.
Property, plant and equipment is stated at cost, less accumulated depreciation and any accumulated impairment losses.
The cost includes any directly attributable costs of making the asset ready 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 borrowings costs directly attributable to the acquisition or construction of a qualifying asset, in which case the borrowings costs are capitalised as part of the cost of that
asset). The costs incurred for routine and/or cyclical maintenance and repairs are recognised directly in the income statement in the year in which they are incurred. The capitalisation of costs attributable to the extension, modernisation or
improvement of assets owned by the Group or held under lease is carried out to the extent that they qualify for separate
classification as an asset or as a component of an asset, applying the component approach, which states that each component with a different useful life and value is recognised separately. The original cost is depreciated on a straight-line basis
from the date the asset is available and ready for use, with reference to the asset’s expected useful life.
The useful life and residual value of property, plant and equipment are reviewed annually and adjusted, where necessary, at
the end of each year. Land is not depreciated. When a depreciable asset consists of separately identifiable components, with
useful lives that are significantly different from those of the other components of the asset, each component is depreciated
separately, in application of the component approach, over a period that does not, however, exceed the life of the principal
asset. The Group has estimated the following useful lives for the various categories of property, plant and equipment:
Category
Years
Buildings
25 - 33
Structural improvements to own assets
Plant
20
3 - 10
Electronic stations
6
Light constructions
10
Equipment
5-8
Furniture and fittings
5-8
Electrical and electronic office equipment
3 - 10
Motor vehicles
4 - 10
Automobiles
Leasehold improvements
Other assets
(*)
4
estimated lease term
(*)
3 - 10
Or the useful life of the improvement if shorter than the estimated lease term.
Property assets and the related fixed plant and machinery located on land held under concession or sub-concession, which
is to be handed over free of charge to the grantor at the end of the concession term, are accounted for, on the basis of the
type of asset, in 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.
Gains and losses deriving from the disposal or retirement of an asset are determined as the difference between the disposal proceeds and the net carrying amount of the asset retired or sold, and are recognised in the income statement in
the year the transaction takes place.
Investment property
Investment property regards land or buildings held to earn rentals or for capital appreciation or both, thus producing cash
flows that are largely separate from other assets. The same accounting standards and policies are applied to investment
property as those applied to property, plant and equipment.
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, which is controlled by the Group and
from which future economic benefits are expected to flow to it. Intangible assets are recognised at cost, including any
directly attributable costs of making the asset ready for its intended use, less accumulated amortisation, where applicable,
and any accumulated impairment losses. Borrowing costs incurred for the development of intangible assets are recognised
as an expense in the period in which they are incurred (with the exception of borrowings costs directly attributable to the
development of a qualifying asset, in which case the borrowings costs are capitalised as part of the cost of that asset).
Amortisation is applied from the date the asset is ready for use and is provided systematically on the basis of the remaining useful life of the asset, or its estimated useful life.
Goodwill
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 acquired entity at the date of acquisition. Goodwill attributable to investments accounted for
using the equity method is included in the carrying amount of the investment itself. Goodwill is not amortised on a
systematic basis, but is tested periodically for impairment. This test is performed with reference to the cash generating unit
to which the goodwill is attributable. An impairment loss is recognised in the income statement at the amount by which
the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair
value less costs to sell and value in use, represented by the present value of the future cash flows expected to be derived
from the cash generating unit and from its disposal at the end of its useful life. Value in use is determined on the basis of
the method described below in “Impairment of assets”. Impairment losses are not reversed if the circumstances that
resulted in the charge no longer exist.
When the impairment resulting from the test is higher than the carrying amount of the goodwill attributed to the cash
generating unit, the residual amount is attributed to the assets included in the cash generating unit in proportion to their
carrying amount. The minimum attributable amount is the higher of:
• the related fair value of the asset less costs to sell;
• the related value in use, as defined above.
Industrial patents, intellectual property rights, licences and similar rights
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 use life and the
related contract term from the date the right may be exercised.
Software
Costs associated with developing or maintaining software programmes are recognised in the income statement in the period in which they are incurred. Costs that are directly associated with the production of identifiable and unique software
products controlled by the Group, and that will generate economic benefits beyond one year, are recognised as intangible
assets. Identifiable and measurable direct costs include the cost of staff involved in software development and an appropriate portion of the relevant overheads. Amortisation is calculated on the basis of the estimated useful life of the software,
which is as a rule three years. Software specially developed for use in the provision of mobile telecommunications services is amortised over a period of seven years.
146
Leased assets
Assets held under finance leases, where the risks and rewards of ownership are substantially transferred to the lessee, are
recognised at fair value or, if lower, at the present value of the minimum lease payments. The corresponding liability,
represented by the capital element of future lease payments, is recognised as a financial liability. Depreciation is calculated
on a straight-line basis, based on the useful lives of the various categories of asset, estimated applying the same
procedures previously described for property, plant and equipment and intangible assets.
Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases.
Payments made under operating leases are recognised in the income statement on a straight-line basis over the lease
term.
Impairment of assets
At the end of each reporting period, the Group reviews the value of its property, plant, equipment and intangible assets
with finite lives to assess whether there is any indication that an asset may be impaired. If any indication exists, the Group
estimates the recoverable amount of the asset in order to determine the impairment loss to be recognised in the income
statement. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use, represented by
the present value of the future cash flows expected to be derived from the asset. In calculating value in use, future cash
flow estimates are discounted using a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the business. The realisable value of assets that do not generate separate cash flows is determined
with reference to the cash generating unit to which the asset belongs. An impairment loss is recognised for the amount
by which the carrying amount of the asset, or the cash generating unit to which it belongs, exceeds its recoverable amount.
When an impairment no longer exists, the carrying amount of the asset is reinstated and the reversal recognised in the
income statement. The reversal must not exceed the carrying amount that would have been determined had no impairment
loss been recognised and had depreciation or amortisation been charged.
Financial instruments
Financial instruments include financial assets and liabilities that are classified on initial recognition, based on the business
purpose for which they were acquired. Purchases and sales of financial instruments are recognised in each category on the
transaction date, representing the date on which the Group commits to purchase or sell the asset, or, in the case of the
insurance business and BancoPosta’s operations, at the settlement date5. In BancoPosta’s case, this almost always coincides with the transaction date.
Changes in fair value between the transaction date and the settlement date are, in any event, recognised in the consolidated financial statements.
5. This is possible for transactions carried out on organised markets (the so-called “regular way”).
Financial assets
On initial recognition, financial assets are classified in one of the following four categories and accounted for 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, 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 are treated as assets and 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.
• Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market, and primarily regard amounts due from customers, including trade receivables. They are included in current
assets, except for maturities greater than twelve months after the end of the reporting period, which are classified as noncurrent assets. These assets are carried at amortised cost6 using the effective interest method. If there is objective evidence of an impairment, a provision for impairment is established on the basis of the present value of estimated future
cash flows. The resulting impairment loss is recognised in the income statement. When an impairment no longer exists,
the carrying amount of the asset is reinstated on the basis of the value that would have resulted from application of the
amortised cost method. The estimation procedure adopted in determining provisions for doubtful debts primarily reflects
the identification and measurement of elements resulting in specific reductions in the value of individually significant
assets. 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.
• Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and maturities that
the Group has a positive intention and ability to hold to maturity. These assets are carried at amortised cost using the effective interest method, adjusted to reflect any impairment loss. The same policies as described in relation to loans and receivables are applied if there is an impairment.
• Available-for-sale investments
Available-for-sale financial assets are non-derivative financial instruments that are either designated in this category or not
attributable to any of the other categories described above. These financial instruments are recognised at fair value and any
resulting fair value gains or losses are recognised in an Equity reserve. This reserve is only reclassified to profit or loss when
the financial asset is effectively disposed of (or extinguished) or, in the event of accumulated losses, when there is evidence that the impairment recognised in Equity cannot be recovered. Solely in the case of debt securities, if the fair value
subsequently increases as the objective result of an event that took place after the impairment loss was recognised in the
income statement, the value of the financial instrument is reinstated and the reversal recognised in the income statement.
Moreover, the recognition of returns on debt securities under the amortised cost method takes place through profit or loss,
as do the effects of movements in exchange rates, whilst movements in exchange rates relating to available-for-sale equity instruments are recognised in a specific Equity reserve. The classification of an asset as current or non-current depends
on the strategic choice regarding how long to hold the asset and its effective negotiability. As a result, financial instruments
expected to be realised within twelve months of the end of the reporting period are classified as current assets.
Financial assets are derecognised when the Group no longer has a contractual right to receive cash flows from the investment and it has substantially transferred all the related risks and rewards and control.
6. The amortised cost of a financial asset or liability means the amount recognised initially, less principal repayments and plus or minus accumulated amortisation, using the effective interest method, of the difference between the initial amount and the maturity amount, after reductions for impairment and insolvency. The effective interest rate is the rate that exactly discounts contractual (or expected) future cash payments or receipts over the expected life of the
asset or liability to its initial carrying amount. Calculation of amortised cost must also include external costs and income directly attributable to the asset
or liability on initial recognition.
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Financial liabilities, including borrowings, trade payables and other payment obligations, are carried at amortised cost using
the effective interest method. If there is a change in the expected cash flows and they can be reliably estimated, the value
of borrowings is recalculated to reflect the change on the basis of the present value of estimated future cash flows and the
internal rate of return initially applied. Financial liabilities are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.
Financial liabilities linked to investment contracts issued by the subsidiary, Poste Vita SpA, are accounted for at fair value
through profit or loss.
Financial liabilities are derecognised on settlement or when the Group has substantially transferred all the related risks and
rewards.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date the derivative contract is executed and if they do not qualify for
hedge accounting. Gains and losses arising from changes in fair value after initial recognition are accounted for as finance
income or finance costs in the income statement for the period.
If, on the other hand, derivative financial instruments qualify for hedge accounting, gains and losses arising from changes
in fair value after initial recognition are accounted for in accordance with the specific policies described below.
The Group documents the relationship between each hedging instrument and the hedged item, as well as its 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.
• Fair value hedges
Both changes in the value of fair value hedges and changes in the value of the hedged item are recognised in profit or
loss when the hedge regards recognised assets or liabilities or an unrecognised firm commitment7. When the hedging
transaction is not fully effective, resulting in differences between the above changes, the ineffective portion represents a
loss or gain recognised separately in other components of comprehensive income for the period.
IAS 39 allows an entity to designate the item underlying a fair value hedge not only as an individual financial asset or liability but also as a cash amount, deriving from a group of financial assets and liabilities (or portions thereof), in such a way
that a group of derivative instruments may be used to reduce exposure to fair value interest rate risk (a so-called macro
hedge). Macro hedges cannot be used for net amounts deriving from differences between assets and liabilities. Like
micro hedges, macro hedges are deemed highly effective if, at their inception and throughout the term of the hedge,
changes in the fair value of the cash amount are offset by changes in the fair value of the hedges, and if the effective
results fall within the interval required by IAS 39.
• Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges8 after
initial recognition are recognised in a specific Equity reserve (Cash flow hedge reserve). A hedging transaction is generally considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future
cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. Amounts
accumulated in Equity are reclassified to profit or loss in the periods when the hedged item will affect profit or loss.
In the case of hedges associated with a highly probable forecast transaction (such as, the forward 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 above transaction, will affect profit or loss (as, 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.
7. Fair value hedge: a hedge of the exposure to a change in fair value of a recognised asset or liability or of an unrecognised firm commitment attributable to
a particular risk, and that could have an impact on profit or loss.
8. A hedge of the exposure to the variability of cash flows attributable to a particular risk associated with an asset or liability or with a highly
probable forecast transaction, and that could have an impact on profit or loss.
If, during the life of the derivative, the forecast hedged transaction is no longer expected to occur, the related gains and
losses accumulated in the Cash flow hedge reserve are immediately taken to profit or loss for the period. On the other
hand, when a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting,
the related gains and losses accumulated in the cash flow hedge reserve at that time remain in Equity and are recognised
in profit or loss at the same time as the original underlying transaction.
Determining the fair value of financial instruments
The fair value of financial instruments traded in active markets is based on quoted market prices (bid prices) at the end of
the reporting period. The fair value of financial instruments that are not traded on an active market is based on prices quoted by external dealers and on valuation techniques primarily based on objective financial variables, as well as by taking
account, where possible, of prices in recent transactions and quoted market prices for substantially similar instruments.
Income tax expense
The charge for current income tax expense (both IRES, or corporation tax, and IRAP, or regional business tax) is based on
the best estimate of taxable profit for the period and the related regulations, applying the rates in force. Deferred tax assets
and liabilities are calculated on all temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts, using tax rates that are expected to apply when the related deferred tax assets are realised or the
deferred tax liabilities are settled. Deferred tax assets and liabilities are not recognised if the temporary differences derive
from investments in subsidiaries, where the timing of the reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in the foreseeable future. Moreover, under IAS 12, deferred
tax liabilities are not recognised on goodwill deriving from a business combination.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which
the temporary differences can be utilised.
Current and deferred taxes are recognised in the income statement, with the exception of taxes charged or credited directly to Equity. In this case the tax effect is recognised directly in the specific item in Equity.
Current and deferred tax assets and liabilities are offset when they are applied by the same tax authority to the same taxpaying entity, which has the legally exercisable right to offset the amounts recognised, and when the entity intends to exercise this right. As a result, even if accounted for in liabilities, tax liabilities accruing in interim periods that are shorter than
the tax year are not offset against the matching assets deriving from withholding tax or advances paid. The Group’s tax
expense and its accounting treatment reflect that effects deriving from the fact that Poste Italiane SpA has adopted a tax
consolidation arrangement, which it has elected to apply in accordance with the related law together with the subsidiaries,
Poste Vita SpA, SDA Express Courier SpA and Mistral Air Srl. 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. Consolidated tax expense is determined 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. Other taxes not related to income are included in Other operating costs.
Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of fungible assets and goods for resale is calculated using the weighted average cost. In the case of non-fungible assets, cost is measured on the basis of the specific cost of the asset at the time of purchase.
The above costs are adjusted, if necessary, by provisions for obsolete or slow moving stock. When the circumstances that
previously led to recognition of the above provisions no longer exist, or when there is a clear indication of an increase in
the net realisable value, the provisions are fully or partly reversed, so that the new carrying amount is the lower of cost and
net realisable value at the end of the reporting period.
Assets are not, however, accounted for 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, it is deemed unlikely that the
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economic benefits will flow to the Group after the end of the reporting period.
In the case of properties held for sale, cost is represented by the fair value of each asset at the date of acquisition, plus
any directly attributable transaction costs, whilst the net realisable value is based on the estimated sale price under normal
market conditions, less direct costs to sell.
Long-term contract work is measured using the percentage of completion method, using cost to cost accounting9.
Cash and valuables held at post offices, and bank deposits attributable to the operations of BancoPosta, are accounted for
separately in Cash and cash equivalents as they derive from deposits subject to investment restrictions, or from advances
from the Italian Treasury to ensure that post offices can operate. This cash cannot be used for purposes other than to extinguish obligations deriving from the above transactions.
Cash and cash equivalents refer to cash in hand, deposits held at call with banks, amounts that at 31 December 2011 the
Parent Company has temporarily deposited with the MEF and other highly liquid short-term investments with original maturities of ninety days or less. Current account overdrafts are accounted for in current liabilities.
This category refers to non-current assets or assets included in disposal groups 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 in this category,
the depreciation process is halted at the date of the reclassification.
Equity
Share capital
The Share capital is represented by the Parent Company’s subscribed and paid-up capital. Incremental costs directly attributable to the issue of new shares are recognised as a reduction of the Share capital, net of any deferred tax effect.
Reserves
These regard capital or revenue reserves. They include, among other things, the Reserve for BancoPosta RFC, representing the initial reserve attributed to BancoPosta RFC, the Parent Company’s Legal reserve, the fair value reserve, relating to
items recognised at fair value through Equity, and the Cash flow hedge reserve, deriving from recognition of the effective
portion of hedging instruments outstanding at the end of the reporting period.
Retained earnings
This item includes the portion of profit for the period and for previous periods that was neither distributed nor taken to
reserves or used to cover losses, and actuarial gains and losses deriving from the calculation of the liability for staff termination benefits. This item also includes transfers from other equity reserves, when they have been released from the
restrictions to which they were subject.
9. 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.
Insurance contracts
Insurance contracts are classified and measured as insurance contracts or investment contracts, based on their prevalent
features. Contracts issued by Poste Vita SpA primarily regard life assurance. Since 2007 Poste Vita SpA has begun selling
accident and medical insurance, whilst Poste Assicura SpA began operating in the non-life sector in 2010.
The Group applies the following basis for classification and measurement of these contracts:
Insurance contracts
Insurance products include Branch I and V life assurance policies, in addition to index-linked policies that qualify as insurance contracts. These products are accounted for as follows:
• earned premiums, accounted for when the policies are written, are recognised as income and classified in revenues; they
include annual or single premiums accruing during the period and deriving from insurance contracts outstanding at the
end of the reporting period, less the value of lapsed policies;
• technical provisions are made in respect of earned premiums to cover obligations to policyholders; the provisions are calculated on an analytical basis for each contract using the prospective method, based on actuarial assumptions appropriate to cover all outstanding obligations. Changes in technical provisions and the cost of claims are recognised as expenses in a specific item in the income statement.
Contracts for separately managed accounts with discretionary participation features
Instead of being classified as financial contracts, contracts for separately managed accounts with discretionary participation features10 are, in compliance with the requirements of IFRS 4, accounted for in accordance with the rules for insurance
contracts. As a result:
• premiums, changes in technical provisions and the cost of claims are recognised in the same way as the insurance contracts described above;
• portions of unrealised gains and losses attributable to policyholders are assigned to them and recognised in technical provisions (deferred liabilities payable to policyholders) under the shadow accounting method (IFRS 4.30).
The calculation technique used in applying the shadow accounting method is based on the prospective yield on each separately managed account, considering an assumed realisation of unrealised gains and losses over a period of time that
matches the assets and liabilities held in the portfolio. Assessment of the portion to be recognised in the specific deferred
liability payable to policyholders also takes account, for each separately managed account, of contractual obligations, the
level of guaranteed minimum returns and any financial guarantees provided. The assumption of an immediate realisation of
losses and gains, as used in the financial statements for previous years, is no longer applied from 2011, as it is based on
unrealistic assumptions which, whilst acceptable under conditions of modest financial market volatility, generate inappropriate results in an exceptional situation such as the current one. Adoption of the new calculation technique has not result11
ed in any change in comparative amounts .
10. A contractual right of investors to receive returns on the assets under management.
11. The new calculation technique applied to the comparative reporting periods of 2009 and 2010 in these consolidated financial statements has not generated any change, taking account of the following primarily considerations:
• the exceptional degree of financial market turbulence in 2011, above all in terms of the spread between Italian and German government securities during November and December 2011;
• under existing contractual obligations, unrealised gains attributable to policyholders and recognised in technical provisions would benefit policyholders
to the same extent under both the previous and new methods;
• with regard to guaranteed minimum returns and other existing contractual obligations, the new method attributes to policyholders, and recognises in
technical provisions, a larger share of unrealised losses attributable to policyholders compared with the previous method, given that it is based on a
longer period of time in which losses may be realised, in accordance with an ALM approach. The provisions are tested for adequacy (a Liability Adeguacy
Test, or LAT) in accordance with IFRS4 and the test described in the section "Use of estimates – Technical provisions for insurance business" in these
consolidated financial statements.
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Investment contracts not linked to separately managed accounts
Investment contracts not linked to separately managed accounts, and which include a portion of index-linked contracts, are
accounted for under IAS 39, as follows:
• technical provisions are accounted for as financial liabilities and stated at fair value, whilst the related financial instruments
are accounted for in assets;
• premiums and changes in technical provisions are not recognised in income, with only revenue components, represented by front-end loads and fees, and cost components, represented by commissions and other charges, recognised in the
income statement. In more detail, IAS 18 and 39 require that revenues and costs attributable to the contracts in question
be allocated over the contract term, based on the service supplied.
Provisions for liabilities and charges represent provisions for liabilities or losses that are either likely or certain to be incurred,
but that are uncertain as to the amount or as to the date on which they will arise.
Provisions for liabilities and charges are made when the Group has a present (legal or constructive) obligation as a result of
a past event, and it is more likely than not that an outflow of resources will be required to settle the obligation. Provisions
are measured on the basis of management’s best estimate of the expenditure required to settle the obligation. The discount rate used to determine the present value reflects current market assessments of the time value of money and the
risks specific to the type of liability concerned.
Liabilities that may only possibly give rise to an outflow of resources are reported in a specific section of the notes on contingent assets and liabilities and no provisions are made.
When, in extremely rare cases, disclosure of some or all of the information regarding the liabilities in question can be
expected to prejudice seriously the Group’s position in a dispute or in ongoing negotiations with other parties, the Group
exercises the option granted by the relevant accounting standards to provide more limited disclosure.
Employee benefits
Post-employment benefits are of two types: defined contribution plans and defined benefit plans. Under defined contribution plans the contributions paid by the Group are recognised in the income statement when incurred, based on the related face value. Under defined benefit plans, given that the benefit to be paid can only be quantified after the termination of
employment, the related impact on the income statement and statement of financial position is recognised on the basis
of actuarial calculations, in accordance with IAS 19.
Post-employment benefits: defined benefit plans
Defined benefit plans, which include staff termination benefits payable to employees pursuant to article 2120 of the Italian
Civil Code, break down into two categories.
• For all companies with at least 50 employees, covered by the reform of supplementary pension provision, from 1 January
2007 vesting staff termination benefits must be paid into a supplementary pension fund or into a Treasury Fund set up
by INPS. A company’s liabilities deriving from defined benefit plans thus only regard provisions made up to 31 December
200612.
• In the case of companies with less than 50 employees, to which the reform of supplementary pension provision does
not apply, vested staff termination benefits continue to represent an accumulated liability for the company.
The liability represents the present value of the defined benefit obligation at the end of the reporting period, calculated
using the projected unit credit method to take account of the time that will pass before effective payment of the benefits.
Calculation of the liability recognised in the financial statements is carried out by independent actuaries.
12. Where, following entry into effect of the new legislation, the employee has not exercised any option regarding the investment of vested staff termination
benefits, the Group has remained liable to pay the benefits until 30 June 2007, or until the date, between 1 January 2007 and 30 June 2007, on which the
employee exercised a specific option. Where no option was exercised, from 1 July 2007 vested staff termination benefits have been paid into a supplementary pension fund.
The calculation takes account of vested termination benefits for the period of service to date and is based on actuarial
assumptions. These primarily regard the use of interest rates, with terms to maturity approximating to the terms of the
related obligation, and staff turnover. In the case of companies with at least 50 employees, given that the company is not
liable for staff termination benefits accruing after 31 December 2006, the actuarial calculation of staff termination benefits
no longer takes account of future rises in salary. Actuarial gains and losses are recognised at the end of each reporting period, based on the difference between the carrying amount of the liability and the present value of the Group’s obligations
at the end of the period, due to changes in the above actuarial assumptions. These gains and losses are recognised directly in Equity.
Defined benefit plans also include supplementary pension plans guaranteeing members and their surviving spouses a pension in addition to those managed by INPS to the extent and according to the conditions provided for in specific regulations, the collective labour contract and the law. Initial recognition and subsequent measurement are carried out according
to the same standards applied to staff termination benefits. In addition, like staff termination benefits, measurement of the
liability recognised in the financial statements is carried out by independent actuaries.
Termination benefits and incentive schemes: defined contribution plans
Termination benefits are recognised in liabilities when a Group company is demonstrably committed to terminating the
employment of an employee or group of employees before the normal retirement date, and to providing termination benefits to the employee or group of employees as a result of an offer made to encourage voluntary redundancy. The above
benefits are recognised immediately in Staff costs as they are not capable of generating future economic benefits for the
Group.
Other long-term employee benefits
Other long-term employee benefits consist of benefits not payable within twelve months of the end of the reporting period in which the staff concerned were employed. Generally, there is not the same degree of uncertainty regarding the measurement of Other long-term employee benefits as there is in relation to post-employment benefits. As a result, IAS 19 permits use of a simplified method of accounting: the net change in the value of all components of the liability during the
reporting period is recognised in full in the income statement. Measurement of the liability recognised in the financial statements for Other long-term employee benefits is carried out by independent actuaries.
Foreign currency translation
Foreign currency transactions are translated into the presentation currency using the exchange rates prevailing at the dates
of the transactions. 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 foreign currencies are recognised in
the income statement.
Revenue recognition
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 transaction. Revenue from activities carried out in favour of or on behalf of
the state is recognised on the basis of the amount effectively accrued, with reference to the laws and agreements in force,
and in relation to amounts allocated in government budgets. Remuneration of deposits with the MEF of funds deriving from
current account deposits is recognised on a time proportion basis, using the effective interest method. This income is clas-
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sified in Revenues from ordinary activities. The same classification is applied to income from euro area government securities, in which deposits paid into accounts by private customers are invested. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyer.
Government grants
Government grants are recognised once they have been formally allocated to the Group by the public entity concerned.
Grants related to income are recognised in the income statement as other operating income or as a direct adjustment of
the cost item to which they refer, whilst grants related to assets are recognised as a direct adjustment of the carrying
amount of the asset.
Any grants related to assets, regarding Property, plant and equipment, are accounted for as deferred income. Deferred
income is recognised in the income statement on a straight-line basis with reference to the useful life of the asset to which
the grant received is directly attributable.
Finance income and costs
Finance income and costs are recognised on a time-proportion basis, using the effective interest method.
Dividends
Dividends are recognised when the right to receive payment is established, which generally corresponds with approval of
the distribution by the General Meeting of shareholders of the investee company.
Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit attributable to owners of the Parent by the weighted average
number of ordinary shares in issue during the year.
Diluted
At the date of preparation of these financial statements no financial instruments have been issued that might potentially
have dilutive effects13.
Related parties
Related parties within the Group refer to Poste Italiane SpA’s direct and indirect subsidiaries and associates. Related parties external to the Group regard the parent, the MEF, entities controlled by the MEF, and the Group’s key management
personnel. In addition, in application of the new version of IAS 24 – Related Party Disclosures, introduced by EU Regulation
632/2010, related parties external to the Group also include the associates and jointly controlled entities of the entities controlled by the MEF. The State and other public sector entities, other than the MEF and the entities it controls, are not classified as related parties. Related party transactions do not include those deriving from financial assets and liabilities represented by instruments traded on organised markets.
13. Diluted earnings per share is calculated by taking into account of the dilutive effect of all the instruments potentially convertible into ordinary shares issued
by the Parent Company. The calculation is based on the ratio of profit attributable to the Parent Company, adjusted to take account of any costs or income
deriving from the conversion, net of any tax effect, and the weighted average number of shares outstanding, assuming conversion of all dilutive potential ordinary shares.
Accounting standards and interpretations applicable from 1 January 2011
The following amendments, interpretations and changes are applicable from 1 January 2011, but their adoption has not
resulted in any change to the presentation or measurement of items in the Poste Italiane Group’s financial statements:
• change to IAS 32 – Financial Instruments: Presentation, adopted by EC Regulation 1293 issued on 23 December 2009;
• change to IFRS 1 – Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters and Change to IFRS
7 – Financial Instruments: Disclosures, adopted by EC Regulation 574 issued on 30 June 2010;
• IAS 24 – Related Party Disclosures and Change to IFRS 8 – Operating segments, adopted by EC Regulation 632 issued
on 19 July 2010;
• changes to IFRIC 14 – Prepayments of a Minimum Funding Requirement, adopted by EC Regulation 633 issued on 19
July 2010;
• IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments and Change to IFRS 1 – First-time Adoption of
Financial Reporting Standards, adopted by EC Regulation 662 issued on 23 July 2010;
• Improvements to IFRS, adopted by EC Regulation 149/2011 of 18 February 2011.
New accounting standards and interpretations not yet effective
At the date of approval of these consolidated financial statements, the IASB has issued the following accounting standards,
interpretations and amendments, which have yet to be endorsed by the European Union and which, in certain cases, are
still at the consultation stage. These include the following:
• IFRS 9 – Financial Instruments, as part of the review of the existing IAS 39; a number of Exposure Drafts have also been
issued regarding Amortised Cost and Impairment, Fair Value Option for Financial Liabilities and Hedge Accounting;
• IFRS 10 – Consolidated Financial Statements, regarding consolidation of the financial statements of subsidiaries as part
of the review of IAS 27 and SIC 12 - Consolidation – Special Purpose Entities;
• IFRS 11 – Joint Arrangements, as part of the review of IAS 31 – Interests in joint ventures;
• IFRS 12 – Disclosure of Interests in Other Entities;
• IFRS 13 – Fair Value Measurement;
• IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine;
• Exposure Draft “Measurement of Non-financial Liabilities” as part of the review of the existing IAS 37 regarding the
recognition and measurement of provisions, contingent liabilities and contingent assets;
• Exposure Draft “Revenue from Contracts with Customers” as part of the review of the existing IAS 11 and IAS 18, regarding revenue recognition;
• Exposure Draft “Insurance Contracts” as part of the review of the existing IFRS 4, regarding the accounting treatment of
insurance contracts;
• Exposure Draft “Leases” as part of the review of the existing IAS 17, regarding the accounting treatment of leases;
• Exposure Draft “Income Taxes: “Deferred Tax: Recovery of Underlying Assets”,
• Exposure Draft “Improvements to IFRS” as part of the annual programme of general improvements and review of IFRS;
• Exposure Draft “Offsetting Financial Assets and Financial Liabilities”;
• Exposure Draft “Investment Companies”;
• Exposure Draft “Government Loans”, as part of the review to IFRS 1 – First-Time Adoption of International Financial
Reporting Standards;
• Changes to IFRS 1 – Severe Hyperinflation and Removal of Fixed Dates for First-Time Adopters”;
• Change to IAS 1 - Presentation of Financial Statements: Statement of Comprehensive Income, regarding presentation of
the statement of comprehensive income in the financial statements;
• Changes to IAS 19 – Employee Benefits as part of the review of the international accounting standard for employee benefits;
• IAS 28 Revised – Investments in Associates and Joint Ventures.
Finally, on 23 November 2011 EU Regulation 1205/2011 was published. This has adopted the changes to IFRS 7 – Financial
Instruments: Disclosures – Transfers of Financial Assets applicable from 1 January 2012.
The potential impact on the Poste Italiane Group’s financial reporting of the accounting standards, amendments and interpretations due to come into effect is currently being examined and assessed.
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2.4 - USE OF ESTIMATES
Preparation of the consolidated financial statements requires management to apply accounting standards and methods that
are at times based on complex judgements and estimates, linked to historical experience, and assumptions that are considered reasonable and realistic under the related circumstances. Use of these estimates and assumptions influences the
amounts reported in the financial statements, with reference to the statement of financial position, the income statement,
the statement of comprehensive income and the statement of cash flows, as well as the notes. The actual amounts of
items for which the above estimates and assumptions have been applied may diverge from those reported in previous
financial statements, due to uncertainties regarding assumptions and the conditions on which estimates are based. The
estimates and assumptions are periodically reviewed and the impact of any changes reflected in the financial statements
for the period in which the estimated is revised, if the revision only influences the current period, or also in future periods
if the revision influences the current and future periods.
This section provides a description of accounting treatments that, more than others, require the use of subjective estimates
and for which a change in the conditions underlying the assumptions used could have a material impact on the Group’s consolidated financial statements.
Revenues and receivables due from the State
Revenue from activities carried out in favour of or on behalf of the State and Public Sector 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.
Whilst awaiting renewal of agreements between Poste Italiane SpA and the tax authorities that expired in 2007, in 2011 the
Parent Company continued to provide the related delegated services as normal. Revenue recognition is based on the tariffs established in the previous agreements and which it is reasonable to expect will be confirmed, or on the lower tariffs
inferred from the state of negotiations with the relevant Public Sector customer.
At 31 December 2011, receivables due to the Parent Company from the MEF and the Cabinet Office amount to approximately 2.16 billion euros. This amount consists of:
• receivables of over 1,211 million euros in the form of Universal Service Obligation (USO) subsidies, including 1,093 million euros relating to the three-year period 2009-2011. These receivables are accounted for gross of 324 million euros
deposited by the MEF, in December 2011, in a non-interest bearing escrow account held by the Parent Company at the
Italian Treasury. Release of the sum deposited by the MEF and collection of the remaining receivables, including approximately 109 million euros relating to the Contratto di Programma (Planning Agreement) for 2006-2008, it is necessary to
wait for the European Commission’s ruling on the Contratto di Programma (Planning Agreement) for 2009-2011, and until
the MEF has replenished its cash holdings. Finally, receivables of approximately 9 million euros for 2005 have been cut
following the budget laws for 2007 and 2008;
• receivables of approximately 415 million euros in the form of publisher tariff subsidies. Of this amount, approximately 254
million euros in subsidies for the years from 2001 to 2007 are to be received in instalments in accordance with a specific Cabinet Office Decree, which has established that collection is to take place on a straight-line basis between 2010 and
2016. These receivables have been accounted for at present value. With regard to the remaining amount of approximately 161 million euros, the Cabinet Office has postponed a decision regarding the exact amount due until a special interministerial committee has reported. The committee’s conclusions has so far not provided the basis for an agreed solution. Of
this last amount, subsidies of approximately 8 million euros for the first quarter of 2010 are still not covered by a provision in the government’s budget;
• further receivables of 530 million euros due from the MEF, in relation to payment of interest on the Parent Company’s
mandatory deposits with the Ministry, for the provision of treasury services, for the distribution of euro converters and
for electoral subsidies. No provision has been made in the government’s budget for approximately 155 million euros of
these items, above all the latter, and payment of approximately 10 million euros has been suspended whilst awaiting specific measures.
Based on the above, of the total amount receivable, with a face value of over 2.16 billion euros, in the case of approximately 172 million euros either no provision has been made in the government’s budget or there is no legislation establishing
the procedures for payment of the Parent Company, whilst the collection, or availability, of approximately 1,619 million
euros is to take place in instalments or has been deferred.
The increase in these receivables over time means that Poste Italiane SpA has to finance growing amounts of working capital, with a negative impact on cash flow management and the related returns. Given that it is not currently possible to forecast when and how the receivables will be paid by the various Public Sector entities, without prejudice to the Parent
Company’s full entitlement and related rights, provisions for doubtful debts due from the parent, the MEF, at 31 December
2011 reflect the best estimate based on the circumstances and the financial impact of the above situation.
In the past, changes to the relevant legislation have been introduced after the end of the reporting period, resulting in
changes to estimates and influencing the income statement. The above circumstances mean that management cannot
exclude the possibility that, as a result of future legislation or the negotiations currently underway, the operating results for
reporting periods after the year ended 31 December 2011 will reflect changes to the estimates in question.
Provisions
The Group makes provisions for potential liabilities deriving from disputes with staff, suppliers, third parties and, in general, for liabilities deriving from present obligations.
Among other things, these provisions cover the liabilities that could result from legal action relating to fixed-term contracts.
In this regard, in November 2010 the so-called Collegato lavoro legislation was enacted. Among other things, this law has
made the “Compulsory” attempt at Conciliation in labour disputes (art. 31) optional and introduced a time limit for appeals
against dismissal, and a cap on compensation payable to an employee in the event of "court-imposed conversion" of a fixedterm contract (art. 32). With regard to claims resulting from the conversion of a fixed-term contract, the courts may now
award claimants between a minimum of 2.5 and a maximum of 12 months pay (regardless of the duration of the proceedings), which is reduced to 6 for companies that implement recruitment lists also applicable to the permanent employment
of workers formerly on fixed-term contracts. Compared with the end of 2010, this important reform, which is also applicable to ongoing legal actions, has resulted in a review of the Parent Company’s provisions.
In the course of the disputes in question, the plaintiffs have at times attempted to seize the Parent Company’s liquidity, and
an estimate of the liabilities linked to this factor is included in the calculation of the related provisions.
Determination of the provisions involves the use of estimates based on current knowledge of factors that may change over
time, potentially resulting in outcomes that may be significantly different from those taken into account when preparing the
Goodwill and measurement of assets that have indefinite useful lives
In measuring the value of these assets, the current economic and financial crisis, which has resulted in highly volatile markets and great uncertainty with regard to economic projections, it is difficult to produce forecasts that can, without any
uncertainty, be defined as reliable.
Goodwill and Goodwill arising from consolidation
Goodwill and Goodwill arising from consolidation are tested annually to assess whether or not they have suffered any
impairment to be recognised in profit or loss. Above all, the test involves the allocation of goodwill to the various cash generating units and the subsequent measurement of the related fair value. If the resulting fair value is lower than the carrying amount of the cash generating unit, it is necessary to reduce the value of goodwill allocated to the unit. The allocation
of goodwill to cash generating units and the measurement of their fair value involves the use of estimates based on factors that may change over time, with resulting effects, of a potentially significant nature, on the measurements performed.
The impairment tests required by the related accounting standards have been conducted in order to identify any evidence
of impairment. Where applicable, the tests carried out at 31 December 2011 were based on projections contained in the
three-year plans for the relevant cash generating units (Group companies or their subsidiaries) for the period 2012-2014,
where available, and on economic forecasts for future reporting periods. The figures for the last year of the plan were used
158
to project cash flows for subsequent years over an indefinite time horizon. The Discounted Cash Flow (DCF) method was
then applied to the resulting amounts. In calculating value in use, NOPLAT (Net operating profit less adjusted taxes) was
capitalised using an appropriate growth rate and discounted using the related WACC (Weighted average cost of capital). An
assumed growth rate of 1% was used in the tests carried out at 31 December 2011.
Measurement of assets that have indefinite useful lives
Non-current assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. Testing for the above indicators requires the use of subjective judgements based on the
information available within the Group and in the market, and on historical experience. Moreover, when an impairment is
recognised the Group calculates the entity of the impairment using appropriate measurement techniques. The correct identification of events or changes in circumstances indicating an impairment, and the estimates used in their calculation, are
linked to factors that may change over time, with a resulting impact on the measurements and estimates performed. The
current economic and financial crisis, which has resulted in highly volatile markets and great uncertainty with regard to economic projections, makes it is difficult to produce forecasts that can, without any uncertainty, be defined as reliable.
At 31 December 2011 the fair value of the Parent Company’s operating properties was significantly higher than their carrying amount. In determining the net carrying amount of Land and Buildings used in operations, the Company also took
account of any indications that these assets may be impaired. In this regard, and with particular reference to properties
used as post offices and Sorting Centres, Poste Italiane SpA’s Universal Service Obligation was taken into account. The
process thus took account of the inseparability of the cash flows generated by the large number of properties that provide
this service, which the 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 taken into consideration. On this basis, the
value in use of Land and Buildings used in operations is relatively unaffected by changes in the commercial value of the
properties concerned and, under particularly critical market conditions, certain properties may have values that are significantly higher than their mere commercial value, without this having any negative impact on the Parent Company’s cash
flows or overall earnings.
Depreciation and amortisation of Property, plant and equipment and intangible
assets
The cost of these assets is depreciated or amortised on a straight-line basis over the estimated useful life of the asset. The
useful life is determined at the time of purchase and based on historical experience of similar investments, market conditions and expectations regarding future events that may have an impact, including new technologies. The effective useful
life may, therefore, differ from the estimated useful life. The Group periodically assesses changes in technology and in the
industry, in dismantling costs and in the recoverable amount of assets in order to update their residual useful lives. This
periodic update may lead to changes in the depreciation or amortisation period and thus in charges for depreciation or amortisation in the current and in future years.
In the case of assets located on land held under concession or sub-concession, on expiry of the concession term, or whilst
awaiting confirmation of renewal, any additional depreciation of assets to be handed over free of charge at the end of the
concession term is calculated on the basis of the probable residual duration of the right to use the assets to provide public services, estimated on the basis of the framework agreements entered into with the Public Sector, the status of negotiations with the grantors and past experience.
Deferred tax assets
Accounting for deferred tax assets is based on expectations of taxable income in future years. Assessments of expected
taxable income to be used in order to account for deferred taxes depend on factors that may change over time, with a significant impact on the measurement of this component of the statement of financial position.
Provisions for doubtful debts
Provisions for doubtful debts reflect estimated losses on receivables, taking into account, in the case of specific items
receivable from Public Sector entities, of legislation restricting public spending. Provisions for expected losses reflect the
estimated credit risk associated with historical experience of similar receivables, an analysis of past due items (both current and historical), losses and collections, and monitoring of the current and future economic conditions in the related markets.
Fair value of unquoted financial instruments
The fair value of financial instruments that are not traded on an active market is based on prices quoted by external dealers, or on internal valuation techniques that result in an estimate of what the transaction price would have been on the
measurement date in an arm’s length exchange motivated by normal business considerations. The Group uses valuation
models based primarily on financial variables taken from the market, taking account, where possible, of prices in recent
transactions and quoted market prices for substantially similar instruments, and of any related credit risk.
The measurement of technical provisions for the insurance business is based on the conclusions reached by internal actuaries employed by Poste Vita SpA, which are regularly verified by independent external actuaries. Liability Adequacy tests
(LATs) are periodically conducted to verify the adequacy of the provisions. These tests measure the ability of future cash
flows from the insurance contracts to cover liabilities towards the policyholder. The LAT test is conducted on the basis of
the present value of future cash flows, obtained by projecting expected future cash flows from the existing portfolio at the
end of the reporting period, based on appropriate assumptions regarding the cause of termination (death, surrender,
redemption, reduction) and the performance of claims expenses. If necessary, technical provisions are topped up and the
related charge expensed in the income statement.
Calculation of staff termination benefits is carried out by independent actuaries. The calculation takes account of vested termination benefits for the period of service to date and is based on actuarial assumptions of both a demographic and economic and financial nature. These assumptions, which are based on the Group’s experience and relevant best practices, are
subject to periodic reviews.
3 - RISK MANAGEMENT
Definition and optimisation of the Poste Italiane Group’s financial structure, over both the short and medium/long term, and
management of the related cash flows is the responsibility of the Parent Company’s Finance department, acting in accordance with the general guidelines established by governance bodies.
Management of the Group’s financial transactions and of the associated risks is primarily attributable to the operations of
the Parent Company and the insurance company, Poste Vita SpA.
Poste Italiane SpA
With regard to the Parent Company, financial transactions primarily regard BancoPosta’s operations and transactions
involved in the funding of assets and the investment of the Company’s own liquidity. BancoPosta’s operations are governed
by Presidential Decree 144/2001. From 2 May 2011 BancoPosta has ring-fenced capital, as approved by the General Meeting
of 14 April 2011 for the purposes of applying the Bank of Italy’s prudential requirements and protecting creditors, pursuant
to art. 2 (paragraphs 17-octies to 17-duodecies) of the so-called “Milleproroghe” (“Thousand Extensions”) Decree, convert-
160
ed into Law 10 of 26 February 2011. BancoPosta RFC was provided with a legally separate reserve of 1 billion euros attributed from Poste Italiane SpA's retained earnings. The assets and liabilities included in BancoPosta’s ring-fence derive from
the management of postal current accounts deposits, carried out in the name of BancoPosta but subject to statutory
restrictions, and collections and payments on behalf of third parties.
The funds deriving from postal current account deposits by private customers are invested in euro zone government securities, whilst deposits by Public Sector entities are deposited with the Ministry of Finance and the Economy. During 2011
BancoPosta was engaged in reinvesting the funds deriving from maturing government securities and in the trading of securities designed to progressively match the maturity profile of the portfolio with the investment model adopted by the Parent
Company in 2010. The new maturity profile was developed based, among other things, on a leading market operator's statistical/econometric model that reflects the interest rates and maturities typical of postal current accounts. The model is
also used as the basis for investment policies in order to limit exposure to rate and liquidity risks by foreseeing mismatches caused by the need to marry the exigencies of risk management with those of improving returns which are dependent
on the ever changing yield curve.
On the other hand, operations not covered by the ring-fence, primarily regarding management of the Parent Company’s
own liquidity, are carried out in accordance with investment guidelines approved by the Board of Directors, which require
the Parent Company to invest in instruments such as government securities, high-quality corporate or bank bonds and term
bank deposits. Liquidity is also deposited in postal current accounts, with the resulting deposits subject to the same
requirements as apply to the investment of deposits by private current account holders.
Poste Vita SpA
The financial instruments held by the insurance company, Poste Vita SpA, primarily regard investments designed to cover
its contractual obligations to policyholders who have taken out classic with profit life policies and index-linked and unitlinked policies. Other investments in financial instruments regard investment of the insurance company’s free capital.
Traditional life policies, classified under Branch I, include products whose benefits are revaluated in keeping with the return
generated through the management of separate pools of financial assets, which enjoy a certain autonomy, though only in
accounting terms, from the rest of the company’s assets (so-called separately managed accounts). On these products, the
company provides a minimum rate of return payable upon maturity of the policy. It follows that the impact of financial risk
on investment performance can be absorbed in full or in part by the insurance provisions. In particular, this absorption
depends on the level and structure of the guaranteed minimum returns and the profit-sharing mechanisms of the “separate portfolio” for the policyholder. The company determines the sustainability of minimum returns through periodic analyses conducted with the aid of an internal financial-actuarial model which simulates, for each separate portfolio, the change
in value of the financial assets and the expected returns under a “central scenario” (based on current financial and commercial assumptions) and under stress and other scenarios based on different sets of assumptions.
In contrast, index- and unit-linked products, relating to so-called Branch III insurance products, regard policies where the
premium paid is invested in structured financial instruments, Italian government securities, warrants and mutual investment funds. For this type of product, issued prior to the introduction of ISVAP Regulation 32/2009, the company does not
guarantee capital or a minimum return and, as such, the financial risks associated with them are borne almost entirely by
the customer. However, in the case of policies issued after the introduction of the regulations, the company assumes sole
liability for solvency risk associated with the instruments in which premiums are invested. The company continuously monitors changes in the risk profile of individual products, focusing above all on the risk linked to the insolvency of issuers.
Financial risk management
Within this context, balanced financial management and monitoring of the main risk/return profiles is carried out by organisational structures operating separately and independently. In addition, specific processes are in place governing the
assumption, management and control of financial risks, including via the progressive introduction of appropriate information systems. From an organisational viewpoint, the model consists of:
• a Risk Measurement and Control function carried out by appropriate functions established within the Parent Company
and the subsidiaries that provide financial and insurance services (BancoPosta Fondi SGR SpA, BdM-MCC SpA and Poste
Vita SpA), and that operates on the basis of the organisational separation of risk assessment from risk management activities. The results of these activities are examined by the relevant advisory committees, which are responsible for carrying out an integrated assessment of the main risk profiles. The outcomes of these assessments are then examined by a
Financial Risk Committee set up by the Parent Company.
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.
In turn, market risk regards:
• price risk: this is the risk that the value of a financial instrument fluctuates as a result of market price movements, including both movements deriving from factors specific to the individual instrument or the issuer, and factors that influence all
instruments traded on the market;
• foreign exchange risk: this is the risk that the value of a financial instrument fluctuates as a result of movements in
exchange rates for currencies other than the presentation currency;
• fair value interest rate risk: this is the risk that the value of a financial instrument fluctuates as a result of movements in
market interest rates.
Sovereign risk became a major component of market risk during 2011, due to the importance of the impact of the spreads
applicable to government securities on the fair value of euro zone government securities, which reflects the market’s perception of the credit rating of sovereign issuers. The performance of spreads during the year resulted in a reduction in the
fair value of these securities, only partially offset by a decline in risk-free interest rates during the same period. The resulting impact on the fair value of the securities held by the Group at 31 December 2011 is described in the note on Sovereign
Risk.
In constructing the Risk Model adopted in order to monitor credit, liquidity and cash flow interest rate risks, the Group has
also taken account of the regulatory yardstick provided by the Bank of Italy’s prudential supervisory standards, despite the
fact that BancoPosta is not yet required to apply such standards, whilst waiting for specific instructions.
162
MARKET RISK
Price risk
This type of risk regards financial assets that the Group has classified as “Available-for-sale” (AFS) or “Held for trading”
(“Financial instruments at fair value through profit or loss”) and certain derivative financial instruments where changes in
value are recognised in profit or loss. The following sensitivity analysis relates to the principal positions potentially exposed
to fluctuations in value, excluding certain minor items not traded on an active market. The amounts accounted for in the
financial statements at 31 December 2010 and 31 December 2011 were subjected to a stress test, based on historical
volatility during the years in question, which was held to be representative of potential market movements.
The principal financial assets subject to price risk and the results of the analysis are shown in the following table.
3.1 - Market risk - Price
Date of reference of the analysis
Position
Change in value
+Vol
-Vol
Effect on liabilities
towards
policyholders
+Vol
-Vol
Pre-tax profit
+Vol
-Vol
Equity
reserves
+Vol
-Vol
2010 effects
Equity instruments
Other investments
2,424,636
32,266
2,392,370
148,907
10,447
138,460
(148,907)
(10,447)
(138,460)
139,540
1,533
138,007
(139,540)
(1,533)
(138,007)
-
-
9,367
8,914
453
(9,367)
(8,914)
(453)
Financial assets at FV through
profit or loss
7,529,516
419,267
(419,267)
412,327
(412,327)
6,940
(6,940)
-
-
6,787,051
742,465
390,294
28,973
(390,294)
(28,973)
383,427
28,900
(383,427)
(28,900)
6,867
73
(6,867)
(73)
-
-
105,555
105,555
-
25,376
25,376
-
(25,376)
(25,376)
-
25,376
25,376
-
(25,376)
(25,376)
-
-
-
-
-
10,059,707
593,550
(593,550)
577,243
(577,243)
6,940
(6,940)
9,367
(9,367)
2011 effects
Equity instruments
Other investments
2,330,102
28,135
2,301,967
189,439
10,231
179,208
(189,439)
(10,231)
(179,208)
180,234
1,687
178,547
(180,234)
(1,687)
(178,547)
-
-
9,205
8,544
661
(9,205)
(8,544)
(661)
profit or loss
5,577,626
326,844
(326,844)
325,835
(325,835)
1,011
(1,011)
-
-
4,874,775
702,851
291,098
35,746
(291,098)
(35,746)
290,150
35,685
(290,150)
(35,685)
949
62
(949)
(62)
-
-
68,390
69,344
(954)
16,160
16,205
(45)
(16,160)
(16,205)
45
16,161
16,205
(44)
(16,161)
(16,205)
44
(1)
(1)
1
1
-
-
7,976,118
532,443
(532,443)
522,230
(522,230)
1,010
(1,010)
9,205
(9,205)
Structured bonds
Other investments
Fair Value through profit or loss
Fair Value through profit or loss (liab.)
Variability at 31 December 2010
Structured bonds
Other investments
Fair Value through profit or loss
Fair Value through profit or loss (liab.)
These refer mainly to the Parent Company’s investments in shares and Poste Vita SpA’s position in Other investments, represented mainly by equity mutual investment funds.
Investments in equity instruments consist of the Parent Company’s holding of 75,628 Master Card Incorporated class B
shares with a fair value of 21,682 thousand (compared with 150,628 thousand shares with a fair value of 25,263 thousand
at 31 December 2010), 11,144 Visa Incorporated class C shares, with a fair value of 870 thousand euros (11,144 shares,
with a fair value of 586 thousand euros at 31 December 2010), whilst Poste Vita SpA’s separate Branch I portfolios held
shares totalling 5,583 thousand euros (compared with 6,417 thousand at December 31, 2010). The shares held by the
Parent Company are not traded in a regulated stock exchange but, in the event of their sale, are convertible into an equal
number of Class A shares, which are traded on the New York Stock Exchange. For sensitivity analysis purposes, the value
of these shares was associated with the corresponding A shares, taking into account the volatility of the shares traded on
the NYSE.
Other investments included units of mutual investment funds held by Poste Vita SpA - amounting to 2,298,275 thousand
euros (2,388,540 thousand euros at 31 December 2010), to meet its obligations to policyholders under the separately managed Branch I accounts - and units of mutual investment funds held by the Parent Company, amounting to 3,692 thousand
euros (3,830 thousand euros at 31 December 2010). With regard to the instruments held by Poste Vita SpA, any changes
at the above dates are fully reflected in the liability to policyholders as a result of application of the shadow accounting
method. The calculation technique used by the Group in applying this method is, from 2011, based on the prospective yield
on each separately managed account, considering an assumed realisation of unrealised gains and losses over a period of
time that matches the assets and liabilities held in the portfolio (note 2.3 on Insurance contracts).
Financial assets recognised at fair value through profit or loss
This item reflects investments by Poste Vita SpA (note 9.14) which are used nearly entirely to cover index- and unit-linked
policies under Branch III whose risks, save as otherwise contemplated by the abovementioned ISVAP Regulation no.
32/2009, are borne by policyholders.
This item reflects warrants acquired to cover the benefits associated with the Branch III policies, “Alba”, “Terra”, “Quarzo”,
“Titanium”, “Arco” and “Prisma” (note 9.15). The negative balance regards the forward purchase of warrants during the year
to cover obligations associated with the “6Speciale” policy, with a face value of 200 million euros (note 9.15).
Foreign exchange risk
Sensitivity analysis of the items subject to foreign exchange risk was based on the most significant positions, assuming a
stress scenario determined by the levels of exchange rate volatility applicable to each foreign currency position held to be
material. It was decided to apply an exchange rate movement based on volatility during the year, which was held to be representative of potential market movements. The results of the analysis are reported below.
Financial assets
At 31 December 2011 this item primarily reflects equity instruments held by the Parent Company (note 3.1) denominated
in US dollars, given that during 2011 Poste Vita SpA extinguished its US dollar exposure in fixed income securities linked to
Branch I insurance contracts (0.8 million US dollars at 31 December 2010).
Bilancio consolidato
164
3.2 - Market risk - US dollar
Date of reference on the
analysis
Position
in USD/000
2010 effects
Available for sale financial assets
Equity instruments
Fixed income instruments
Financial assets at Fv through
profit or loss
Variability at 31 december 2010
2011 effects
Available for sale financial assets
Equity instruments
Financial assets at Fv through
profit or loss
Variability at 31 december 2011
Position
in €/000
towards
policyholders
+Vol
-Vol
260 days
260 days
Pre-tax
profit
+Vol
260 days
-Vol
260 days
Equity
reserves
+Vol
-Vol
260 days
260 days
35,196
34,539
657
26,340
25,849
491
-
-
-
-
2,630
2,630
-
(2,630)
(2,630)
-
205
205
35,401
153
153
26,493
(67)
(67)
(67)
67
67
67
-
-
2,630
(2,630)
29,180
29,180
-
22,552
22,552
-
-
-
-
-
2,501
2,501
-
(2,501)
(2,501)
-
-
-
-
-
-
-
-
-
29,180
22,552
-
-
-
-
2,501
(2,501)
Trade receivables/payables due from and to overseas correspondents
The most significant net position (approximately 77% of the reported foreign exchange exposure) is that denominated in
SDRs (Special Drawing Rights), a synthetic currency determined by the weighted average of the exchange rates of four
major currencies (Euro, US dollar, British pound, Japanese yen) used worldwide to settle commercial positions among
Postal Operators. At 31 December 2011 this position has a positive balance of 368 thousand euros (a negative balance of
596 thousand euros at 31 December 2010).
3.3 - Market risk - SDRs
2010 effects
Current assets in SDRs
Current liabilities in SDRs
2011 effects
Change in value
+Vol
-Vol
260 days 260 days
Pre-tax
profit
+Vol
-Vol
260 days 260 days
Equity
reserves
+Vol
-Vol
260 days 260 days
Position in
SDRs/000
Position in
€/000
59,787
(60,305)
68,907
(69,503)
3,668
(3,700)
(3,668)
3,700
3,668
(3,700)
(3,668)
3,700
-
-
(518)
(596)
(32)
32
(32)
32
-
-
66,872
(66,562)
79,347
(78,979)
4,343
(4,323)
(4,343)
4,323
4,343
(4,323)
(4,343)
4,323
-
-
310
368
20
(20)
20
(20)
-
-
Fair value interest rate risk
Concerning the effects of changes in interest rates on the price of fixed income and fixed rate securities held by the Parent
Company, mainly in relation to BancoPosta RFC, Poste Vita SpA and BdM-MCC SpA.
In line with previous years, the following interest rate sensitivity analysis was based on changes in fair value following a
parallel shift in the forward yield curve +/- 100 bps. Due to the deterioration in Italy’s credit rating (described in the following section), 2011 witnessed fluctuations in the yields on government securities that were at times in excess of 100 bps.
The measures of sensitivity shown in the following analysis do, however, offer a basic point of reference, useful in assessing potential changes in fair value in the event of greater movements in interest rates.
3.4 - Market risk - Fair value interest rate risk
towards
policyholders
Notional
Fair value
2010 effects
Available-for-sale financial assets(1)
45,267,626
45,267,626
45,046,511
45,046,511
4,636,480
4,636,480
3,668,330
3,668,330
(175,808)
(175,808)
720,000
720,000
-
(13,700)
(13,700)
-
-
50,624,106
2011 effects
Available-for-sale financial assets(1)
+100bps
Equity
reserves
Pre-tax profit
-100bps
+100bps -100bps
-100bps
-
- (929,038) 1,025,904
- (929,038) 1,025,904
175,675
175,675
-
-
-
-
-
-
-
(56,147)
(56,147)
-
62,176
62,176
-
48,701,141
(1,623,000) 1,785,202
-
- (985,185) 1,088,080
53,181,799
53,181,799
47,722,022
47,722,022
(1,496,323) 1,655,535
(1,496,323) 1,655,535
-
- (947,831)
- (947,831)
profit or loss
5,572,909
5,572,909
4,063,829
4,063,829
(205,769)
(205,769)
-
-
-
-
Cash flow hedges (liabilities)
Fair value through profit or loss (liabilities)
2,102,200
800,000
1,302,200
(33,090)
(31,281)
(1,809)
(10,049)
(10,049)
10,049 (25,934) 26,803
10,049 (25,934) 26,803
(32,852)
(32,852)
-
35,247
35,247
-
60,856,908
51,752,761
profit or loss
(1)
(1,447,192) 1,609,527
(1,447,192) 1,609,527
+100bps
205,814
205,814
968,058
968,058
(1,712,141) 1,871,398 (25,934) 26,803 (980,683) 1,003,305
The effects are only measured for components of the portfolio not covered by fair value hedges.
Details of fair value interest rate risk are shown below and broken down as follows:
a. Financial Services, primarily regarding the financial instruments attributable to BancoPosta RFC and BdM-MCC SpA;
b. Insurance Services, regarding the financial instruments of the insurance company, Poste Vita SpA, and its subsidiary,
Poste Assicura;
c. Postal and Business Services, including all the Group’s other financial instruments.
166
a. Financial Services
towards
policyholders
2010 effects
Cash Flow hedges (liabilities)
2011 effects
Cash Flow hedges (liabilities)
Pre-tax
profit
Notional
Fair value
+100bps
-100bps
14,571,850
14,571,850
14,590,005
14,590,005
-
-
720,000
720,000
-
(13,700)
(13,700)
-
-
15,291,850
14,576,305
16,329,913
16,329,913
Equity
reserves
+100bps -100bps
+100bps
-100bps
-
- (868,824)
- (868,824)
955,829
955,829
-
-
-
-
-
-
- (924,971) 1,018,005
13,962,003
13,962,003
-
-
-
- (616,592)
- (616,592)
1,850,000
800,000
1,050,000
(25,370)
(31,281)
5,911
-
-
(25,648) 26,517
(25,648) 26,517
(32,852)
(32,852)
-
35,247
35,247
-
18,179,913
13,936,633
-
- (25,648) 26,517 (649,444)
668,434
(56,147)
(56,147)
-
62,176
62,176
-
633,187
633,187
The securities held by BancoPosta are almost evenly split between Held-to-maturity financial assets (HTM) and Availablefor-sale financial assets (AFS). Due to the fact that HTM are initially recognised at fair value and subsequently measured at
amortised cost, changes in fair value have no effect on profit or loss. For AFS, on the other hand, which are measured at
fair value, changes in fair value are taken to a separate equity reserve which, consequently, must be continually monitored
for gains and losses on measurement. The sensitivity analysis shown above is for these assets.
The portfolio consists of fixed rate government securities (ordinary BTPs) with a par value of 12,221,800 thousand euros,
variable rate CCTeus (Euribor + 1.00%) with a par value of 50,000 thousand euros and variable rate securities swapped into
fixed rate through cash flow hedges. The latter are inflation linked BTBs (BTP€i) with a par value of 2,583,750 thousand
euros (2,073,750 thousand euros at 31 December 2010) and CCTeus with a par value of 950,000 thousand euros.
The portion of the fixed rate portfolio relating to ordinary BTP was partially hedged against fair value interest rate risk
through a fair value hedge asset swap:
• BTPs with a notional amount of 500,000 thousand euros were hedged through an immediate IRS fair value hedge;
• 2023 and 2025 BTPs with a notional amount of 400,000 thousand euros were partially hedged through an IRS fair value
hedge with a forward start in 2016;
• 2026, 2034 and 2040 BTPs with a notional amount of 2,800,000 thousand euros were partially hedged through an IRS
fair value hedge with forward starts in 2015, 2016 and 2020, respectively.
The duration of BancoPosta’s AFS financial assets is 6.21 (at 31 December 2010 the duration of the securities portfolio was
6.23) reducing, albeit not to a significant extent, the sensitivity of the fair value of the portfolio to changes in interest rates.
The balance also includes fixed income euro zone government securities with a fair value of 519,986 thousand euros,
compared with a notional amount of 524,363 thousand euros (54,435 thousand euros and 54,500 thousand euros,
respectively, at 31 December 2010), primarily held by BdM-MCC SpA at 31 December 2011.
At 31 December 2011 this refers to fair value interest rate risk on forward purchases of securities carried out by the Parent
Company with a notional amount of 800 thousand euros (so-called cash flow hedges of forecast transactions).
Finally, disclosure of the risk associated with derivative financial instruments measured at fair value through profit or loss
held by the Parent Company, with a notional amount of 1,050,000 thousand euros, is included only for the purpose of full
disclosure. These forward transactions, deriving from discontinued cash flow hedges of forecast transactions, were, in fact,
settled early in February 2012 through forward sales with net proceeds of 55,618 thousand euros, after deducting the fair
value previously reported at 31 December 2011, totalling 5,911 thousand euros.
b. Insurance Services
towards
policyholders
2010 effects
profit or loss
Notional
Fair value
30,195,776
30,195,776
29,984,717
29,984,717
4,636,480
4,636,480
3,668,330
3,668,330
(175,808)
(175,808)
-
-
-
34,832,256
profit or loss
Fair value through profit or loss
-100bps
(1,447,192) 1,609,527
(1,447,192) 1,609,527
+100bps -100bps
+100bps
-100bps
-
-
(58,291)
(58,291)
67,968
67,968
175,675
175,675
-
-
-
-
-
-
-
-
-
33,653,047
(1,623,000) 1,785,202
-
-
(58,291)
67,968
36,351,886
36,351,886
33,331,073
33,331,073
(1,496,323) 1,655,535
(1,496,323) 1,655,535
-
- (326,105)
- (326,105)
329,448
329,448
5,572,909
5,572,909
4,063,829
4,063,829
(205,769)
(205,769)
205,814
205,814
-
-
-
-
252,200
252,200
(7,720)
(7,720)
(10,049)
(10,049)
10,049
10,049
(286)
(286)
286
286
-
-
42,176,995
37,387,182
(1,712,141) 1,871,398
(286)
286 (326,105)
329,448
2011 effects
+100bps
Equity
reserves
Pre-tax profit
The fixed income instruments considered in this analysis have a fair value of 31,296,987 thousand euros, compared with a
notional amount of 34,109,611 thousand euros (27,922,704 thousand euros and 27,994,401 thousand euros , respectively,
at 31 December 2010), and almost entirely consist of Poste Vita SpA’s fixed income investments, totalling 29,542,891 thousand euros (26,440,892 thousand euros at 31 December 2010) to cover its Branch I contractual obligations, and 1,754,096
thousand euros (1,481,812 thousand euros at 31 December 2010) related to the company’s free capital.
With regard to the instruments used to cover Branch I obligations, at 30 June 2011 an analysis of the impact on guaranteed
168
minimum returns of losses on securities included in the separately management accounts, “Posta Valore Più” and “Posta
Pensione”, was carried out. Particularly negative financial market trends at the end of the reporting period have generated
total losses of 3,463,546 thousand euros (including 2,877,401 thousand euros in 2011), almost entirely attributable to policyholders in accordance with the shadow accounting method described in note 2.3.
A portion of the floating rate portfolio with a fair value of 1,987,156 thousand euros, compared with a notional amount of
2,191,575 thousand euros, has not been taken into account for the purposes of this analysis.
Financial assets at fair value through profit or loss
This item reflects a portion of the fixed rate investments of Poste Vita SpA, totalling 3,901,804 thousand euros (3,274,718
thousand euros at 31 December 2010). These consist of investments with a fair value of 3,837,934 thousand euros, relating to coupon stripped14 BTPs (3,210,624 thousand euros at 31 December 2010) covering obligations associated with the
Branch III insurance products, and with a fair value of 63,870 thousand euros (64,094 thousand euros at 31 December
2010), covering Branch I contractual obligations.
A portion of the floating rate portfolio with a fair value of 162,025 thousand euros, compared with a notional amount of
201,374 thousand euros, has not been taken into account for the purposes of this analysis.
Finally, interest rate risk influences the fair value of forward purchases of coupon stripped BTPs by Poste Vita SpA, with
net fair value losses on these instruments amounting to 7,720 thousand euros. As described in note 9.15, securities with
a notional amount of 252,2 million euros were purchased primarily to cover obligations associated with the Branch III
policy called “6Speciale”.
c. Postal and Business Services
towards
policyholders
2010 effects
Pre-tax profit
Notional
Fair value
+100bps
-100bps
500,000
500,000
471,791
471,791
-
-
-
+100bps -100bps
Equity
reserves
+100bps
-100bps
-
(1,923)
(1,923)
2,107
2,107
2011 effects
500,000
471,791
-
-
-
-
(1,923)
2,107
500,000
500,000
428,945
428,945
-
-
-
-
(5,134)
(5,134)
5,423
5,423
500,000
428,945
-
-
-
-
(5,134)
5,423
These assets regard investments by the Parent Company with a notional amount of 500,000 thousand euros and a fair
value of 428,945 thousand euros, including 375,000 thousand euros hedged in 2010 against changes in their fair value by
entering into an asset swaps, effective immediately.
14. Coupon stripping is the act of detaching the interest payment coupons from a note or bond. Coupon stripping transforms each government security into
a series of zero coupon securities. Each component may be traded separately.
Sovereign risk
The global financial system was affected by significant tensions and ongoing financial market turbulence and volatility in
2011, with Italy particularly exposed. Spreads between German bunds and the government securities issued by many
European countries, including Italy, rose sharply, above all in November 2011. The spreads on ten-year bonds had risen to
527 bps at 31 December 2011.
The downgrade of Italy’s credit rating and heightened financial market volatility had a significant impact on the price of
Italian government securities, generating substantial fair value losses on those classified as available-for-sale (AFS), which
were recognised in the fair value reserve in Equity, net of tax. At 31 December 2011 the fair value reserve reflecting, at
consolidated level, movements in the price of government securities classified as AFS, net of tax, had a negative balance
of 2,137 million euros15.
With particular reference to BancoPosta, at 31 December 2011 the negative balance of the fair value reserve has exceeded the reserve of 1 billion euros initially attributed. In the circumstances, postal current account deposits have remained
stable and BancoPosta’s Equity continues to be sufficient to back the available-for-sale securities through to maturity, with
steps taken and instruments created to cope with unexpected movements in deposits, without having to sell large volumes
of securities at a loss. Notwithstanding the losses, BancoPosta's regulatory capital is, pursuant to prudential requirements,
sufficient for First Pillar (credit, counterparty and foreign exchange risks) and Second Pillar purposes (banking book rate risk).
In terms of the subsidiary, Poste Vita SpA, the increase in the spread and the resulting deterioration in fair value of the company’s available-for-sale financial assets did not have a significant impact on Equity, due to the attribution of unrealised losses to policyholders in accordance with the shadow accounting method.
Following a reduction in the yields on Italian government securities and in the related spread with respect to German
Bunds, the negative balance on the available-for-sale valuation reserves accounts has improved by 1,272 million euros since
31 December 2011 to stand at 865 million euros16 on 31 March 2012.
The sovereign risk sensitivity of the fair value of investments is higher than the interest rate risk described in note 3.4, given
the greater volume of assets affected by the potential impact of a movement in spreads, affecting the entire AFS portfolio
and not just the fixed rate component, and the absence of any compensatory effect provided by fair value hedges, whose
protection does not extend to movements in credit ratings.
CREDIT RISK
Credit risk regards the risk that a debtor might default on a payment or go into liquidation. This risk is managed as follows:
• minimum rating requirements for issuers/counterparties, based on the type of instrument;
• concentration limits per issuer/counterparty;
• monitoring of changes in the ratings of counterparties.
During the year under review, the macroeconomic events that had an impact on the risk-return profiles of the Poste Italiane
Group’s financial assets were the debt crises in peripheral EU countries (Greece, Ireland and Portugal), which caused
spreads on European government securities to widen, with a particular impact on those related to Italy’s sovereign risk,
and continuing uncertainty regarding the health of the banking sector. The second half of 2011 saw a significant number of
ratings downgrades by the leading agencies, resulting in a progressive deterioration in the weighted average rating of the
Group’s exposures, which has fallen from AA- at 31 December 2010 to A at 31 December 2011.
The nature of Poste Italiane SpA’s operations, above all in terms of BancoPosta’s investment activities, exposes it to a substantial degree of concentration in respect of the Italian state, linked essentially to deposits with the MEF and the portfolio invested entirely in Italian government securities.
Ruling DEM/11070007 of 28 July 2011, implementing Document 2011/266 published by the European Securities and
Markets Authority (ESMA) and later amendments, has introduced new requirements regarding sovereign debt disclosures
that listed issuers with holdings of national and euro area government securities and IFRS-compliant companies must
include in their annual and interim reports. Sovereign debt is understood to mean bonds issued by and loans granted by
companies to central governments, local government entities and government bodies. Information on the Group’s sovereign debt exposure is provided below, showing the face value, carrying amount and fair value of each type of portfolio.
15. At 31 December 2011 the fair value of held-to-maturity financial assets was lower than the related amortised cost, with approximately 806 million euros
accounted for in assets attributable to BancoPosta RFC, net of tax at the applicable statutory rate.
16. At 31 March 2012 the price of held-to-maturity financial assets was approximately 35 million euros lower than the related amortised cost, net of tax at
the applicable statutory rate, representing a net improvement of 771 million euros compared with 31 December 2011.
170
3.8 - Exposure to sovereign debt
Item
Face value
31 December 2011
Carrying amount
Fair value
Italy
66,502,162
14,237,650
46,956,179
5,308,333
59,526,257
14,363,893
41,324,428
3,837,935
58,336,468
13,174,718
41,323,816
3,837,934
Austria
213,625
213,625
-
224,486
224,486
-
224,486
224,486
-
Belgium
75,060
75,060
-
78,874
78,874
-
78,874
78,874
-
France
94,030
94,030
-
105,199
105,199
-
105,199
105,199
-
Germany
35,590
35,590
-
43,285
43,285
-
43,285
43,285
-
Netherlands
25,000
25,000
-
26,152
26,152
-
26,152
26,152
-
Spain
322,200
322,200
-
315,408
315,408
-
315,408
315,408
-
67,267,667
60,319,661
59,129,872
Total
The relevant credit exposure is shown below for each category of financial instrument. The ratings reported in the table
have been assigned by Moody’s.
3.9 - Credit risk - Financial assets
Item
Loans and receivables
Loans
Receivables
BancoPosta receivables
form Aaa
to Aa3
from A1 from Ba1 to
to Baa3 Not rated
Total
from Aaa
to Aa3
from A1 from Ba1 to
to Baa3
Not rated
Total
303,199
303,199
8,541,240
34,429
492,344
8,014,467
498,456
39,600
22,343
436,513
9,342,895
74,029
514,687
8,754,179
7,713,763
626,590
7,087,173
-
357,493
1,630
15,122
340,741
8,071,256
1,630
641,712
7,427,914
-
14,363,893
14,363,893
-
14,363,893
14,363,893
14,768,213
14,768,213
-
-
14,768,213
14,768,213
Available-for-sale
financial assets
2,372,170
Credit instruments Poste Vita Branch I 2,260,141
Credit instruments Poste Vita free capital
22,029
BancoPosta credit instruments
Other instruments and deposits
90,000
45,279,478
28,869,329
1,967,506
13,442,018
1,000,625
164,839 47,816,487
162,839 31,292,309
2,000 1,991,535
- 13,442,018
1,090,625
42,971,009
26,247,903
1,562,398
14,535,568
625,140
2,019,294
1,851,121
168,173
-
148,307
144,209
2,000
2,098
45,138,610
28,243,233
1,732,571
14,535,568
627,238
Financial assets at FV
through profit or loss
444,824
Credit instruments Poste Vita Branch I
Credit instruments Poste Vita Branch III 443,935
Credit instruments Poste Vita free capital
889
8,226,960
184,987
8,036,658
5,315
266,820
40,907
154,814
71,099
8,938,604
225,894
8,635,407
77,303
8,229,209
164,837
8,040,698
23,674
1,948,396
256,130
1,679,802
12,464
277,777
55,384
169,895
52,498
10,455,382
476,351
9,890,395
88,636
119,626
46,333
1,607
71,686
112,448
27,237
74,709
10,502
215
27
188
232,289
73,597
76,316
82,376
203,837
26,181
72,101
105,555
12,869
12,856
13
119
119
-
216,825
26,300
84,957
105,568
3,239,819
76,524,019
930,330 80,694,168
73,886,031
3,980,559
783,696
78,650,286
Held-to-maturity
financial assets
Cash flow hedges
Fair value hedges
Total
Outstanding positions at 31 December 2011 are described in note 9.
This item regards 7,552,843 thousand euros (6,800,045 thousand euros at 31 December 2010) in the Parent Company’s
claims on the parent, including 7,060,499 thousand euros (6,173,455 thousand euros at 31 December 2010) in postal current account deposits of Public Sector entities deposited with the MEF and 492,344 thousand euros (626,590 thousand
euros at 31 December 2010) relating to the residual principal to be repaid on loans accounted for in liabilities, and which, in
accordance with the laws that authorised the relevant loans, are to be repaid by the MEF.
This item refers to securities held by the Parent Company and attributable to BancoPosta RFC.
172
This item primarily regards available-for-sale financial assets held by BancoPosta and Poste Vita SpA. The latter relate to coverage of Branch I contractual obligations relating to separately managed accounts and the company’s free capital.
Other Securities and deposits primarily include fixed income Securities held by the Parent Company, with a fair value of
428,945 thousand euros (471,791 thousand euros at 31 December 2010) and securities held by BdM-MCC, with a fair value
of 461,543 thousand euros.
In terms of credit risk, no account has been taken of equity instruments or equity funds, whose credit risk takes shape in
the form of changes in their fair value (price risk).
Financial instruments at fair value through profit or loss
Financial instruments at fair value through profit or loss consist of financial instruments designed to cover the contractual
obligations associated with Branch III insurance policies. They include:
• structured bonds with a value of 4,874,775 thousand euros (6,787,051 thousand euros at 31 December 2010), which are
subject to credit risk in connection with the crisis that is affecting the financial markets, with any impairment of assets
classified under this item translating into a reduction in liabilities payable to customers;
• coupon stripped BTPs, totalling 3,837,934 thousand euros (3,210,624 thousand euros at 31 December 2010), described
in connection with the interest rate risk to which the fair value of these instruments is subject and for which the credit
risk is borne entirely by Poste Vita SpA.
Derivative Financial instruments
Derivative financial instruments primarily regard:
• the fair value, totalling 73,570 thousand euros (26,181 thousand euros at 31 December 2010), of cash flow hedges
attributable to BancoPosta RFC;
• the fair value, totalling 76,316 thousand euros, of Interest rate swaps hedging interest rate risk on the bonds issued by
BdM-MCC SpA;
• the fair value, totalling 69,344 thousand euros (105,555 thousand euros at 31 December 2010) of warrants entered into
by Poste Vita SpA.
Credit risk arising from derivative transactions is mitigated through rating and group/counterparty concentration limits. In
relation to BancoPosta RFC and BdM-MCC SpA, interest rate and asset swap contracts are guaranteed by collateral provided by specific Credit Support Annexes17. Exposure is quantified and monitored using the current value method, in accordance with the Bank of Italy’s prudential supervisory instructions.
Trade receivables
3.10 - Credit risk - Trade receivables
31 December 2011
31 December 2010
Carrying
amount
Specific
impairment
Carrying
amount
Specific
impairment
Private customers
Due from parents
Public Sector
Cassa Depositi e Prestiti
Overseas postal operators
Due from subsidiaries,
joint ventures and associates
Prepayments to suppliers
1,029,979
1,665,322
1,008,805
129,050
211,912
(154,109)
(82,712)
(74,464)
(20,556)
(423)
808,108
1,176,654
977,003
822,000
174,043
(155,165)
(72,855)
(92,782)
(20,556)
(4,296)
19,890
61
-
9,766
346
-
Total
of which past due
4,065,019
732,286
Item
3,967,920
541,101
17. At 31 December 2011 BancoPosta’s derivative counterparties all have investment grade ratings. The accreting asset swaps on long-term BTP€i were
entered into to minimise collateral requirements. These accreting asset swaps, entered into to hedge against interest rate risk, make it possible to reduce
the payments to be made periodically to the counterparty under the CSA contracts.
The nature of the Group’s customers, the structure of revenues and the method of collection mean that there is a limited
risk of default on trade receivables. In this regard, reference should be made to the paragraph of note 2.4 dealing with
Revenues and receivables due from the State. All receivables are subject to specific monitoring and reporting procedures
to support credit collection activities.
3.11 - Credit risk - Other receivables and assets
31 December 2011
Item
Tax assets
Receivables due from staff under fixed-term
contracts settlement
Other receivables
Accrued income and prepaid expenses
from trading transactions
Guarantee deposits paid to suppliers
Third-party deposits in Postal Savings Books
registered in the name of Poste Italiane SpA
Total
of which past due
31 December 2010
Carrying
amount
Specific
impairment
Carrying
amount
Specific
impairment
823,393
-
752,921
-
298,641
243,614
(2,189)
(53,517)
293,416
229,468
(2,189)
(49,857)
18,888
17,917
7,436
-
17,316
8,333
6,197
-
2,937
-
2,957
-
1,412,826
16,579
1,310,608
1,572
LIQUIDITY RISK
Liquidity risk is the risk that an entity may have difficulties in raising sufficient funds, at market conditions, to meet its
obligations deriving from financial instruments. Liquidity risk may regard the inability to sell financial assets quickly at an
amount close to fair value or the need to raise funds on excessively onerous terms or, in extreme cases, the inability to
borrow in the market.
The Poste Italiane Group applies a financial strategy that aims to minimise this type of risk as follows:
• diversification of the various forms of short- and long-term borrowings and counterparties;
• the availability of lines of credit in terms of amount and the number of banks;
• the gradual and consistent distribution of the maturities of medium/long-term borrowings;
• the adoption of analysis models designed to monitor the maturities of assets and liabilities.
Liabilities
Expected cash flows for financial liabilities accounted for at the end of the reporting period, broken down by maturity, are
shown below. Repayments of principal at face value are increased by interest payments calculated, where applicable, on
the basis of the yield curve applicable at 31 December 2011. In the following table the commitments of Poste Vita SpA and
Poste Assicura SpA are shown in the item “Outflows for the Poste Vita group’s policy portfolio”.
174
3.12 - Liquidity risk - Liabilities
31 December 2011
Item
Within 12 months
Between 1 and 5 years
Over 5 years
Total
Flows from Poste Vita group’s policies
Postal current accounts
Borrowings
Bonds
Cassa Depositi e Prestiti for loans
Due to banks
Other borrowings
Other financial liabilities
Trade payables
Other liabilities
5,649,052
13,974,371
28,908,943
8,984,124
34,727,681
15,053,590
69,285,676
38,012,085
803,006
320,743
2,456,348
26,039
770,889
2,462,497
2,016,318
1,536,850
249,838
240,127
282,796
9,474
719
94,062
667,953
209,784
6,440
51,786
1,720,797
560,870
2,948,928
41,953
770,889
2,463,216
2,016,318
1,682,698
Total liabilities
30,016,113
38,770,083
50,717,234
119,503,430
Assets
Assets at 31 December 2011, broken down by maturity, are shown below at face value and increased, where applicable,
by interest receivable. The item “Securities and other investments” primarily includes financial instruments held by
BancoPosta RFC and the Group’s insurance companies.
3.13 - Liquidity risk - Assets
31 December 2011
Item
Within 12 months
Between 1 and 5 years
Over 5 years
Total
Financial assets
Investments in securities and other instruments
Trade receivables
18,420,914
9,101,422
9,319,492
3,883,464
684,363
2,559,994
1,903,455
37,390,021
248,696
37,141,325
181,555
649,454
-
61,963,070
20,013
61,943,057
112,006
-
117,774,005
9,370,131
108,403,874
4,065,019
1,445,823
2,559,994
1,903,455
Total assets
27,452,190
38,221,030
62,075,076
127,748,296
At 31 December 2011 this refers primarily to the liquidity risk to which the investment of customers’ current account
deposits and investments linked to Branch I policies issued by Poste Vita SpA are exposed.
BANCOPOSTA RFC
In terms of BancoPosta’s specific operations, the liquidity risk regards the investment of current account deposits in euro
zone government securities. The potential risk derives from a mismatch between the maturities of investments in securities and those of liabilities, represented by current accounts where the funds are available on demand, thus compromising
the Company’s ability to meet its obligations to current account holders. This potential mismatch between assets and liabilities is monitored via comparison of the maturity schedule for assets with the statistical model of the performance of
current account deposits, in accordance with the various likely maturity schedules and assuming the progressive total withdrawal of deposits over a period of thirty years for private customers and within five years for Public Sector customers.
At 31 December 2011 the degree of the match between the maturities of investments in euro area government securities
and the portfolio replication model approved by the Board of Directors in April 2010 is being calculated, whilst the average
term to maturity of investments as a whole has fallen from 5.56 at 31 December 2010 to 5.39 at 31 December 2011.
For the purposes of liquidity risk analysis at 31 December 2011, the timing of withdrawals from postal current accounts (a
carrying amount of 37,144,907 thousand euros, as shown in note 23.1) was based on the amortisation schedule deriving
from application of the statistical model developed in order to model the behaviour of current account holders.
Both average Public Sector demand deposits and average demand deposits by private customers, with specific regard to
the retail component, which is typically more stable, have risen with respect to 31 December 2010. Poste Italiane SpA continues to closely monitor the deposit base.
Moreover, from the fourth quarter of 2010 new short-term funding arrangements have been introduced via the matched
sale and repurchase of BTPs, with the aim of optimising profitability and funding temporary cash withdrawals from demand
deposits.
POSTE VITA SPA
In order to analyse its liquidity risk profile, Poste Vita SpA uses Asset-liability management (ALM) to effectively manage
assets in relation to its obligations to policyholders, whilst also developing projections of the effects deriving from financial
market shocks (asset dynamics) and of the behaviour of policyholders (liability dynamics). At 31 December 2011 liabilities
attributable to Branch I policies have an average term to maturity of 8.03 years, compared with an average duration of the
matching assets of 4.98 years (approximately 6.78 and 5.25 years, respectively, at 31 December 2010). The financial instruments intended to cover the technical provisions for Branch III have maturities that match those of the liabilities.
CASH FLOW INTEREST RATE RISK
This regards uncertainty over future cash flows following fluctuations in market interest rates. It may be caused by a mismatch – in terms of type of rate, indexation method and term to maturity – between financial assets and liabilities that tends
to last until contractual and/or expected maturity (the banking book), and which, as such, generates an impact on the interest margin, which is thus reflected in the operating results for future periods.
At 31 December 2010 and 31 December 2011, sensitivity to interest rate risk of the cash flow generated by the instruments
concerned, represented by floating rate investments, or transactions rendered thus by fair value hedges, is summarized in
the table below, and calculated to reflect changes resulting from a parallel shift in the forward yield curve (+/- 100 bps).
176
3.14 - Cash flow interest rate risk and hedging policy
Date of reference of
the analysis
2010 effects
Financial assets
Amounts due from MEF
Other financial receivables
Other investments
Nominal
position
towards
policyholders
+100bps -100bps
6,173,454
90,074
3,508,822
93,550
23,412 (23,412)
-
Pre-tax
profit
+100bps
Equity
reserves
Total
Equity
-100bps
+100bps
-100bps
61,735 (61,735)
901
(901)
11,676 (11,676)
936
(936)
-
-
+100bps
-100bps
61,735 (61,735)
901
(901)
11,676 (11,676)
936
(936)
Bank deposits
10,797
-
-
108
(108)
-
-
108
(108)
Deposits with MEF
Bank deposits
840,624
239,115
-
-
8,406
2,391
(8,406)
(2,391)
-
-
8,406
2,391
(8,406)
(2,391)
(250,000)
-
-
(2,500)
2,500
-
-
(2,500)
2,500
(12,155)
(545)
(39,720)
-
-
(122)
(5)
(397)
122
5
397
-
-
(122)
(5)
(397)
122
5
397
Bank borrowings
Borrowings (postal current
account overdrafts)
Borrowings (from subsidiaries)
2011 effects
Financial assets
Amounts due from MEF
Other investments
10,654,016
23,412 (23,412)
83,129 (83,129)
-
-
83,129 (83,129)
7,060,499
507,609
3,375,124
93,550
21,240 (21,240)
-
70,605 (70,605)
5,076 (5,076)
11,964 (11,964)
936
(936)
-
-
70,605 (70,605)
5,076 (5,076)
11,964 (11,964)
936
(936)
Bank deposits
90,610
-
-
906
(906)
-
-
906
(906)
Deposits with MEF
Bank deposits
829,399
739,110
-
-
8,294
7,391
(8,294)
(7,391)
-
-
8,294
7,391
(8,294)
(7,391)
(537,601)
(271,511)
-
-
(5,306)
(2,586)
5,306
2,586
-
-
(5,306)
(2,586)
5,306
2,586
(15,588)
(550)
(80,504)
-
-
(155)
(5)
(805)
155
5
805
-
-
(155)
(5)
(805)
155
5
805
96,315 (96,315)
-
-
Bonds
Bank borrowings
Borrowings (postal current
account overdrafts)
11,790,147
21,240 (21,240)
96,315 (96,315)
Financial assets
At 31 December 2011 this risk primarily relates to the investment of the funds, with a notional amount of 7,060,499 thousand
euros, deriving from the current account deposits of Public Sector entities, which must be deposited with the MEF. Since 1
January 2008 these investments earn interest at a floating rate, calculated on the basis of a basket of government securities
and money market indexes, as set out in the agreement between the MEF and Poste Italiane SpA renewed on 1 April 2011.
In addition, cash flow interest rate risk regards a portion of the securities portfolio with a total notional amount of 3,375,124
thousand euros, including 2,392,949 thousand euros of financial instruments held by Poste Vita SpA primarily to cover contractual obligations deriving from Branch I and III policies, and 925,000 thousand euros of financial instruments held by the Parent
Company, represented by floating rate investments, or transactions rendered thus by hedging derivatives. The balance is made
up by instruments held by BdM-MCC SpA and BancoPosta Fondi SpA SGR.
The effects of the risk in question on the cash flows related to the investments of the Branch I policies sold by Posta Vita are
reflected entirely in the liabilities payable to policyholders, taking account of the method used to calculated the portion of unrealised gains and losses attributable to policyholders (shadow accounting).
With reference to the variable or indexed cash flows, designed to generate a return on the index- or unit-linked Branch III policies issued until the entry into effect of ISVAP Regulation 32/2009, considering the peculiar composition of such investments,
consisting of structured bonds yielding returns linked closely to bond and equity markets, any effect of changes in interest rates
on cash flows is reflected in the Liabilities towards policyholders (technical provisions and financial liabilities recognised at fair
value). Sensitivity to changes in interest rates thus generates a reputational risk that can affect the company’s business, in connection with policyholders’ expectations, as described in note 3.
Cash
This item includes amounts deposited with the MEF and held in the so-called buffer account, which, until 30 November
2011, earned interest calculated on the basis of the average yield on auctions of Short-term Treasury Certificates (BOT)
organised by the MEF during the relevant six-month period, and from 1 December 2011 earns interest based on the Main
Refinancing Operations (MRO) rate18.
Financial liabilities are described in note 23.
DETERMINATION OF FAIR VALUE
The financial instruments recognised at fair value in these financial statements are classified below on the basis of a
hierarchy reflecting the significance of the sources used in determining fair value. The fair value hierarchy comprises the
following levels:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices);
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
18. The minimum rate applied by the European Central Bank in its most recent main refinancing operation or the uniform rate should the BCE apply such a
rate in these operations.
178
3.15 - Fair value hierarchy
Item
Financial assets
AFS financial assets
Equity instruments
Other investments
Financial assets at fair value through
profit or loss
Structured bonds
Other investments
Total financial assets
at fair value
31 December 2011
Level 2
Level 3
Level 1
42,862,034 14,107,527
42,804,045 4,994,623
5,583
22,552
42,794,770 4,877,605
3,692
94,466
Total
3,056,201 60,025,762
2,353,350 50,152,018
5,429
33,564
49,646 47,722,021
2,298,275 2,396,433
57,989
57,989
-
8,880,615
4,005,840
4,874,775
-
702,851
702,851
9,641,455
4,063,829
4,874,775
702,851
-
232,289
-
232,289
42,862,034 14,107,527
3,056,201 60,025,762
Level 1
31 December 2010
Level 2
Level 3
39,269,882 16,429,707
39,090,003 6,025,585
6,417
25,849
39,079,756 5,907,638
3,830
92,098
179,879 10,275,502
179,879 3,488,451
- 6,787,051
-
128,620
39,269,882 16,429,707
Total
3,197,605 58,897,194
2,455,140 47,570,728
7,484
39,750
59,116 45,046,510
2,388,540 2,484,468
742,465
742,465
11,197,846
3,668,330
6,787,051
742,465
-
128,620
3,197,605 58,897,194
Financial liabilities at fair value
-
(701,979)
(59,204)
(642,775)
-
(701,979)
(59,204)
(642,775)
-
(812,066)
(721,564)
(90,502)
-
(812,066)
(721,564)
(90,502)
Total financial liabilities
at fair value
-
(701,979)
-
(701,979)
-
(812,066)
-
(812,066)
3.16 - Changes in financial instruments at fair value (level 3)
AFS
Financial assets
Financial assets
at FV through
profit or loss
Derivative
financial
instruments
Total
Opening balance at 1 January 2010
Purchases/Issues
Sales/Extinguishment of initial accruals
Redemptions
Changes in fair value through profit or loss
Changes in fair value through Equity
Gains/Losses in profit or loss due to sales
Transfers to level 3
Transfers to other levels
Changes in amortised cost
Other changes (including accruals at the end of the period)
1,646,752
826,955
(2,133)
(38,448)
22,014
-
615,680
241,861
(111,667)
(4,562)
1,153
-
132
(132)
2,262,564
1,068,816
(113,800)
(4,562)
(38,448)
1,153
22,014
(132)
Closing balance at 31 December 2010
Purchases/Issues
Sales/Extinguishment of initial accruals
Redemptions
Changes in fair value through profit or loss
Changes in fair value through Equity
Gains/Losses in profit or loss due to sales
Transfers to level 3
Transfers to other levels
Other changes (including accruals at the end of the period)
2,455,140
91,085
(19,534)
(9,614)
(145,111)
(18,616)
-
742,465
38,029
(76,270)
(1,626)
253
-
-
3,197,605
129,114
(95,804)
(9,614)
(1,626)
(145,111)
253
(18,616)
-
Closing balance at 31 December 2011
2,353,350
702,851
-
3,056,201
Item
At 31 December 2011 available-for-sale financial assets, measured at Level 3 fair value, primarily consist of Poste Vita SpA’s
investments in mutual investment funds, totalling 2,298,275 thousand euros, to cover its obligations to policyholders in
respect of separately managed Branch I accounts, and 49,646 thousand euros in new bonds in respect of Branch I policies.
The remainder regards investments in equity instruments, totalling 5,429 thousand euros.
At 31 December 2011 financial instruments at fair value through profit or loss, measured at Level 3 fair value, consist of
Poste Vita SpA’s investments in mutual investment funds, totalling 702,851 thousand euros, to cover obligations in respect
of Branch III unit-linked policies (note 9.14).
OTHER RISKS
Operational risk
This regards the risk of losses resulting from inadequate or failed internal processes, people and systems, or from external events. This category of risk includes losses resulting from fraud, human error, business disruption, systems failures,
breach of contract and natural disasters. Operational risk includes legal risk, but not strategic and reputational risks.
To protect the Group from this form of risk, in line with the prudential supervisory requirements, issued by the Bank of Italy
in December 2006, and adopted by Poste Italiane SpA as benchmarks, the Parent Company has formalised and agreed a
methodological and organisational framework to manage the operating risk related to the products/processes of
BancoPosta and the asset management company, BancoPosta Fondi SpA SGR.
BdM - MCC SpA has adopted the base method for reporting its capital adequacy and, for next year, plans to gather information about operating losses and conduct scenario analyses to provide it with the information needed to manage risk, for
operational purposes.
The areas of activity potentially living rise to losses due to operational risks in 2011 were:
• with regard to BancoPosta, the processes and infrastructure used in classifying BancoPosta product lines;
• with regard to BdM-MCC SpA, the processes and infrastructure linked to the management of public funds.
Systematic measurement, in relation to BancoPosta, of the mapped risks has enabled the Group to prioritise mitigation initiatives and the related attribution in order to reduce any future impact.
In 2011 Poste Vita SpA consolidated developments in its operational risk identification and assessment model, reviewing
the method of assessing risks.
Insurance risks
This type of risk arises with the stipulation of insurance contracts and the terms and conditions contained therein (technical bases adopted, premium calculation, terms and conditions of cash surrender, etc.).
The risks to which Poste Vita is exposed primarily relate to separately managed accounts in the Branch I category sold by
the company and, as is typical in the insurance business, deriving from the guaranteed minimum returns on investment to
be paid to policyholders, and the potential impact on the financial statements of the measurement of the assets in which
the technical provisions are invested.
In strictly technical terms, mortality is one of the main risk factors in life insurance, i.e. any risk associated with the uncertainty of a policyholder’s life expectancy.
For products with the capital sum subject to positive risk, such as term life insurance, this risk has negative consequences
if the frequency of death exceeds the death probabilities realistically calculated (second order technical bases).
For products with the capital sum subject to negative risk, such as annuities, there are negative consequences when death
frequencies are lower than the death probabilities realistically calculated.
Nevertheless, at 31 December 2011 the mortality risk is limited for the Company and mainly concerns:
• repayment of the premiums paid, in case of the death of holders of Branch III index- and unit-linked policies19, and the
minimum guaranteed capital in case of death, as required by the contracts for separate portfolio products;
• repayment of the insured capital for term life insurance policies.
As to pricing risk, i.e. the risk of incurring losses due to the inadequate premiums charged for the insurance products sold,
this may arise due to:
• inappropriate selection of the technical basis;
• incorrect assessment of the options embedded in the product;
• incorrect evaluation of the factors used to calculate the expense loads.
19. In the event that the surrender value is lower than the premiums paid, the Company makes up for the difference up to 5,000 euros.
180
As Posta Vita’s mixed and whole-life policies have cash value build-up features, accumulating in accordance with a technical
rate of zero, the technical basis adopted does not affect premium calculation (and/or the insured capital). In fact, there is
no pricing risk associated with the choice of technical basis in Poste Vita’s portfolio.
The options embedded in the policies held in portfolio include:
• Surrender option;
• Guaranteed minimum return option;
• Annuity conversion option.
For nearly all the products in the portfolio there are no surrender penalties. The surrender risk only becomes significant,
however, in the event of mass surrenders which, on the basis of historical evidence, have a low probability of occurrence.
The contractually guaranteed minimum return is 1.5%20 per non-consolidated event21, thus showing a very low risk
significance compared with the returns generated to date by the separate portfolios, as determined by the asset-liability
management analyses performed for the purposes of ISVAP Regulation 21 of 28 March 2008.
Poste Assicura SpA, which began operating as a non-life company in April 2010, is exposed to the following insurance risks:
• Underwriting risk: the risk deriving from the conclusion of insurance contracts, associated with the events insured, the
processes followed when pricing policies and selecting risks, and unfavourable claims trends compared with previous
estimates. This risk can be divided into the following categories:
- Pricing risk: the risk linked to the company’s pricing of its policies and dependent on the actuarial assumptions used in
order to calculate premiums. If prices are based on inadequate assumptions, the insurer may be exposed to the risk of
being unable to meet its contractual obligations to policyholders. This category includes “expense risk”, being the risk
that the premiums charged are not sufficient to cover the costs effectively incurred by the company, and the risks linked
to excessive growth in operations if associated with poor selection of risks, imprudent pricing or the absence of
resources sufficient to keep up with the pace of growth.
- Provisioning risk: referring to the risk that technical provisions are not sufficient to meet obligations to policyholders. This
insufficiency may be due to incorrect estimates by the company and/or changes in the general environment.
• Catastrophe risk: the risk that extreme and exceptional events have a negative impact that has not been taken into
account when pricing the policies.
• Anti-selection risk: this relates to the company’s unwillingness to insure an event not classified as future, uncertain and
damaging.
• Disability and morbidity risk: the risk associated with compensating or reimbursing losses caused by illness, accident or
disability, or medical expenses due to illness, accident or disability. Two aspects must be taken into account: the first
regards a number of claims over and above the expected number, and the second a duration of the compensation beyond
what was expected.
Given the fact that the insurance business is at the start-up stage, and in view of the expected growth of the portfolio and
the differing degrees of risk associated with the products distributed, the company has adopted a highly prudent approach
to reinsurance. It has entered into pro rata reinsurance treaties with major reinsurance providers, establishing the amounts
to be ceded based on the specific type and size of the risk to be assumed, backed up by excess-loss or stop-loss treaties
to cover risks of a certain size (accident policies or so-called catastrophic risks). In addition, when defining the guarantees
offered, the assumption of specific types of risk has been mitigated by limiting the size of payouts in the event of certain
specific types of claim.
Reputational risk
The Group’s business is by its nature exposed to elements of reputational risk, associated mainly with the placement of
index-linked bonds issued by other credit institutions and/or insurance policies issued by Poste Vita SpA.
In this respect, in July 2008, in accordance with the Markets in Financial Instruments Directive by the EU (Directive
2004/39/EC, “MiFID”), the Parent Company has adopted the “consulting service” model.
20. There are residual portions of the portfolio with different characteristics in terms of guaranteed minimums (a capital guarantee alone, a guaranteed minimum of 1% for consolidated events and a minimum of 1% for non-consolidated events.
21. In case of death, surrender and expiration.
As noted above in these notes, the crisis of recent years has had profound effects on the performance of all the financial
instruments on the market and, in the second half of 2011, on the value of Italian government securities, which account for
a large part of the Group’s investments. Even though the Group has developed over time prudential policies in the customers’ best interests, entailing the selection of domestic and foreign issuers solely with investment grade ratings, the situation has prompted even closer scrutiny at Group level, so as to ensure full awareness of the performance of the products placed and the risks for customers.
OTHER INFORMATION
With regard to cash flow management within the Group, a centralised treasury management system enables the automatic elimination of co-existing large debit and credit balances attributable to individual companies, offering the Group advantages in terms of improved liquidity and a reduction in the related risk. The system includes the five main subsidiaries, and
makes use, with regard to the banking channel, of zero balance cash pooling. In this way cash flows between the current
accounts of subsidiaries and the Parent Company are transferred on a daily basis.
The Group’s financial structure at 31 December 2011 is solid and balanced, and adequately protected from liquidity or refinancing risks. Overall borrowings are primarily medium/long-term, except for bank overdrafts, repurchase agreements and
drawdowns on short-term lines of credit. Medium/long-term debt is sufficient to cover the Group’s expected financial
needs.
At the end of the reporting period the Group has unused uncommitted lines of 1,180.2 million euros, of which 50 million
euros has been used. The Group also has overdraft facilities in place, totalling 83.1 million euros, of which 15.6 million euros
has been used, and bank guarantee facilities with a value of approximately 311.6 million euros (with 189.5 million euros
available to the Parent Company), of which guarantees with a value of 127 million euros have been used.
182
4 - OPERATING SEGMENTS
The identified operating segments are: Postal services, Financial services and Insurance services. The “Postal Services”
segment includes Mail, Express Delivery, Logistics and Parcels, and Philately. The “Financial Services” segment includes
the collection of public deposits on behalf of Cassa Depositi e Prestiti and the management of postal current accounts and
related services, the payment of pensions under authority, the transfer of funds via postal order, collection services for third
parties. The “Financial Services” segment includes the activities of Banca del Mezzogiorno – MedioCredito Centrale SpA
acquired in 2011 and primarily relating to the management of public funds. The “Insurance Services” segment regards the
sale of life assurance products in Branches I, III and V, and, secondarily, the recently launched sale of non-life insurance. The
remaining “Other Services” segment includes segments which, based on the indications in IFRS 8 - Operating Segments,
are not significant within the context of the Group’s operations. This segment includes the remaining services carried out
by Poste Italiane SpA and those conducted by certain Group companies, including PosteMobile SpA, a mobile virtual network operator, BancoPosta Fondi SpA SGR, an asset management company, EGI SpA, which operates in the property sector.
Segment information regards revenue components and is prepared on the basis of the Accounting Unbundling that Poste
Italiane SpA is required to carry out at the end of each reporting period in accordance with the laws in force at 31 December
2011 (Legislative Decree 261/99 and Legislative Decree 144/01). The cost allocation method adopted is based on the absorption of resources (staff, external costs, plant, etc.) by the various business segments.
The result for each segment is based on Operating profit/(loss). All income components reported for operating segments
are measured using the same accounting policies applied in the preparation of these consolidated financial statements.
(€m)
Postal
Services
Financial
Services
Insurance
Services
Other
Services
External revenue
Total revenue
5,065
298
5,363
4,946
8
4,954
11,206
0
11,206
619
167
786
-
(473)
(473)
21,837
21,837
Non-cash expenses
(488)
(159)
(0)
(90)
(0)
(6,953)
(58)
9
-
-
(547)
(7,193)
(647)
(90)
(6,953)
(49)
-
-
(7,740)
(153)
1,390
436
197
-
0*
1,870
-
-
-
-
19
(0)*
18
-
-
-
(0)
(870)
-
(0)
(870)
1,018
Assets
6,673
40,604
42,887
805
4,777
(688)
95,058
Liabilities
5,025
40,965
42,552
231
2,971
(1,069)
90,675
379
0
1
54
-
-
434
3
-
-
4
-
-
7
2010
Income tax expense
Other information
Capital expenditure
the equity method
(*)
Unallocated
Adjustments
items and eliminations
Total
Elimination of the costs incurred by Poste Italiane SpA for interest paid to consolidated subsidiaries (recognised by the latter in finance income).
(€m)
Postal
Services
Financial
Services
Insurance
Services
Other
Services
External revenue
Total revenue
4,810
284
5,094
5,003
9
5,012
11,278
0
11,278
602
232
834
-
(525)
(525)
21,693
0
21,693
Non-cash expenses
(468)
(165)
(0)
(28)
(1)
(5,337)
(74)
(11)
-
-
(544)
(5,541)
(633)
(28)
(5,338)
(85)
-
-
(6,085)
(263)
1,420
367
116
-
2*
1,641
(1)
-
-
-
15
(2)*
12
1
-
-
(0)
(808)
-
1
(808)
Assets
7,199
40,777
44,132
817
6,877
(766)
99,036
Liabilities
5,168
44,338
44,391
301
2,992
(1,003)
96,187
338
5
3
70
-
-
416
7
-
-
3
-
-
10
2011
Income tax expense
Unallocated
Adjustments
Total
Other information
Capital expenditure
the equity method
(*)
846
Assets are those employed by the segment in conducting its ordinary activities or that may be allocated to the segment
based on these activities.
Unallocated assets consist of cash of 1,560 million euros (1,068 million euros at 31 December 2010), non-current financial
assets of 2,231 million euros (1,696 million euros at 31 December 2010), deferred tax assets of 1,730 million euros (760
million euros at 31 December 2010), prepaid taxes of 817 million euros (747 million euros at 31 December 2010), current
financial assets of 470 million euros (454 million euros at 31 December 2010), and current tax assets of 69 million euros
(52 million euros at 31 December 2010).
Unallocated liabilities consist of current financial liabilities of 1,575 million euros (936 million euros at 31 December 2010),
non-current financial liabilities of 699 million euros (1,379 million euros at 31 December 2010), deferred tax liabilities of 249
million euros (294 million euros at 31 December 2010), taxes payable of 374 million euros (318 million euros at 31 December
2010) and current tax liabilities of 95 million euros (44 million euros at 31 December 2010).
Information about geographical segments, based on the geographical areas in which the various Group companies are
based, is not material. At 31 December 2011 all entities consolidated on a line-by-line basis are based in Italy, whilst their
customers are also primarily located in Italy and revenue from overseas customers does not account for a significant proportion of total revenue.
In response to the legislation enacted on 26 February 2011, described in note 1, the Parent Company has ring-fenced capital in relation to BancoPosta’s operations, as governed by Presidential Decree 144 of 14 March 2001. As a result, the methods of measuring and presenting the performances of the operating segments have been revised. Further segment information is therefore provided below to take account of the legal and organisational changes that have taken place, in line
with the new format for internal reporting on which the Group’s management bases its strategic decision-making. This information, provided solely in order to provide full disclosure22, will form the comparative basis for the segment information to
be provided in the consolidated financial statements for 2012.
22. The figures for the Financial Services segment take account of BancoPosta RFC’s contribution over a period of twelve months.
184
The new identified operating segments are: Postal and Business Services, Financial Services and Insurance Services. The
“Postal and Business Services” operating segment includes mail, express courier, logistics and parcels, philately and the
activities carried out by the various units of the Parent Company for the Other Segments in which the Group operates. The
“Financial Services” operating segment covers the collection of public deposits on behalf of Cassa Depositi e Prestiti and
the management of postal current accounts and related services, the payment of pensions under authority, the transfer of
funds via postal order, collection services for third parties carried out by BancoPosta RFC, the management of public funds
by Banca del Mezzogiorno – MedioCredito Centrale SpA and the promotion of mutual investment funds by BancoPosta
Fondi SpA SGR. The “Insurance Services” segment regards the sale of life assurance products in Branches I, III and V, and,
secondarily, the recently launched sale of non-life insurance. The remaining “Other Services” segment includes segments
which, based on the indications in IFRS 8 - Operating Segments, are not significant within the context of the Group’s operations. This segment includes the remaining services carried out by Poste Italiane SpA and those conducted by certain
Group companies, including PosteMobile SpA, a mobile virtual network operator, and the activities of Consorzio per i Servizi
di Telefonia Mobile ScpA.
The Postal and Business Services segment also earns revenues from the services provided by the various Poste Italiane
SpA functions to BancoPosta RFC. In this regard, separate General Operating Guidelines have been developed and
approved by the Poste Italiane SpA Board of Directors which, in implementation of BancoPosta RFC’s By-laws, identify the
services provided by Poste Italiane SpA functions to BancoPosta and determines the manner in which they are remunerated. Costs are allocated to BancoPosta by transfer pricing as determined with reference to:
• cost plus a mark-up, e.g., the cost plus method, when market prices are not available for the particular type of services
provided by Poste Italiane SpA. Costs are determined by unbundling total costs incurred with the application of the same
process used for Universal Postal Service purposes in the related regulatory accounting records , which are subject to
independent audit. The mark-up is determined taking into account the market prices of BancoPosta's principal services.
The resulting transfer prices are reviewed annually as part of the planning and budget process.
(€m)
Postal and
Business Services
Financial
Services
Insurance
Services
Other
Services
External revenue
Total revenue
5,161
4,412
9,573
5,033
277
5,310
11,278
0
11,278
221
68
289
-
(4,757)
(4,757)
21,693
0
21,693
Non-cash expenses
(521)
(173)
(0)
(23)
(1)
(5,337)
(22)
(3)
-
-
(544)
(5,536)
(694)
(23)
(5,338)
(25)
-
-
(6,080)
834
580
199
26
-
2*
1,641
-
-
-
-
14
(2)*
12
1
-
-
-
(808)
-
1
(808)
846
Assets
7,481
40,996
45,893
209
5,618
(1,161)
99,036
Liabilities
5,394
43,977
44,430
181
3,414
(1,209)
96,187
378
5
3
31
-
-
416
7
-
-
3
-
-
10
2011
Income tax expense
Other information
Capital expenditure
the equity method
(*)
Unallocated
Adjustments
Total
5 - PROPERTY, PLANT AND EQUIPMENT
The following table shows changes in property, plant and equipment in 2010 and 2011:
5.1 - Changes in Property, plant and equipment
Land
Cost
Accumulated depreciation
Accumulated impairments
Carrying amount
Changes during the year
Purchases
Adjustments
Reclassifications
Disposals
Depreciation
Impairments
Total changes
Cost
Carrying amount
Purchases
Adjustments(1)
Reclassifications(2)
Disposals(3)
Change in basis of consolidation(4)
Depreciation
Impairments
Total changes
Cost
Carrying amount
Adjustments(1)
Cost
Total
Cost
Total
Disposals(3)
Cost
Total
Cost
Total
74,505
74,505
625
(26)
(93)
(462)
44
Properties
used in
operations
Plant and
equipment
2,715,167 2,137,771
(972,686) (1,442,842)
(13,981)
(13,028)
1,728,500
681,901
292,212
(230,186)
(770)
61,256
44,302
52,830
(1,099)
(147,912)
(397)
(52,276)
12,525
26
(90)
(14,548)
(2,087)
74,652 2,717,568 2,148,453
- (1,047,958) (1,506,136)
(103)
(15,247)
(12,692)
74,549 1,654,363
629,625
304,041
(244,102)
(770)
59,169
1,376
237
(231)
(51)
1,331
27,479
286
(1,528)
(99,108)
(1,266)
(74,137)
Industrial
and
commercial
Leasehold
equipment improvements
23,281
5,374
(2,283)
(100,082)
(2,716)
(76,426)
55,078
20,575
(1,289)
87
(135,331)
(45)
(60,925)
7,524
414
(58)
(13,664)
(5,784)
75,983 2,738,133 2,161,070
- (1,142,650) (1,580,491)
(103)
(17,546)
(11,879)
75,880 1,577,937
568,700
309,788
(255,633)
(770)
53,385
Assets in the
course of
construction
Other
and
assets prepayments
218,649 1,246,954
(62,017) (1,016,117)
(5)
(48)
156,627
230,789
Total
190,364
190,364
6,875,622
(3,723,848)
(27,832)
3,123,942
60,679
41,739
(395)
(86,766)
(12)
15,245
73,343
(166,053)
(22)
(92,732)
247,056
(33,210)
(3,230)
(374,690)
(3,084)
(167,158)
283,696 1,344,839
(88,249) (1,098,745)
(35)
(60)
195,412
246,034
97,632
97,632
6,970,881
(3,985,190)
(28,907)
2,956,784
53,178
26,053
(193)
144
(86,992)
(37)
7,847
42,321
(69,186)
(86)
(26,951)
210,182
237
(3,576)
(4,323)
231
(366,401)
(3,664)
(167,314)
322,437 1,416,413
(117,695) (1,178,129)
(42)
(97)
204,700
238,187
70,681
70,681
7,094,505
(4,274,598)
(30,437)
2,789,470
28,103
37,988
(3)
(26,356)
(947)
38,785
27,424
13,425
(363)
(30,332)
(866)
9,288
237
237
-
(98)
98
-
(19)
19
-
-
(189)
189
-
-
(69)
306
237
(231)
(231)
2,879
2,495
5,374
18,976
1,599
20,575
(840)
1,254
414
13,438
(13)
13,425
27,281
(1,228)
26,053
(69,186)
(69,186)
(7,683)
4,107
(3,576)
(51)
(51)
(5,595)
2,895
417
(2,283)
(64,977)
62,830
858
(1,289)
(918)
860
(58)
(2,121)
899
859
(363)
(14,766)
14,573
(193)
(86)
(86)
(88,514)
82,057
2,134
(4,323)
-
-
3,638
(3,551)
87
-
-
6,070
(5,926)
144
-
9,708
(9,477)
231
186
At 31 December 2011 Property, plant and equipment includes assets belonging to the Parent Company located on land held
under concession or sub-concession, which is to be handed over free of charge at the end of the concession term, with a
carrying amount of 154,502 thousand euros (173,782 thousand euros at 31 December 2010).
The principal changes during 2011 are described below.
Capital expenditure of 210,182 thousand euros, including 4,697 thousand euros in capitalised costs and expenses, primarily regards:
• 23,281 thousand euros relating to properties used in operations and primarily referring to the extraordinary maintenance
of post offices, mail sorting offices and local head offices around the country;
• 55,078 thousand euros relating to plant, with the most significant items regarding the Parent Company and relating to
plant for buildings 25,529 thousand euros, the purchase of sorting equipment used at Sorting Centres 9,097 thousand
euros, installation of a LAN (Local Area Network) for the Company’s communications (5,602 thousand euros), the
installation and maintenance of video surveillance systems (5,158 thousand euros), and the installation of ATMs (2,935
thousand euros). The total also includes capital expenditure carried out by the Postel Group, totalling 1,789 thousand
euros and primarily relating to printing and enveloping systems;
• 7,524 thousand euros relating primarily to the purchase of various front- and back-office equipment for post offices (4,841
thousand euros) and security equipment for post office access and for the deposit of cash and sundry documents (1,413
thousand euros);
• 27,424 thousand euros invested almost entirely by the Parent Company in plant upgrades (18,296 thousand euros) and
structural improvements (8,977 thousand euros) for properties held under lease;
• 53,178 thousand euros regarding Other assets, with the most significant items regarding the Parent Company. This
includes 24,403 thousand euros for the purchase of new computer hardware for post offices and head offices and the
expansion of storage systems, 7,811 thousand euros for the purchase of furniture and fittings in connection with the new
layouts for post offices, and 5,696 thousand euros for the reorganisation of delivery systems for postal services and the
purchase of new equipment. The total also includes capital expenditure carried out by Poste Mobile SpA, totalling 6,282
thousand euros, relating to the purchase of the palmtop terminals used by postmen and women for the “Electronic
Postman” project;
• 42,321 thousand euros, primarily referring to the Parent Company’s investments in progress, with 16,023 thousand euros
for the purchase of computer hardware and other equipment yet to enter service, 15,908 thousand euros relating to the
restyling of post offices, 4,250 thousand euros regarding the renovation of central facilities, and 1,472 thousand euros for
the installation of a photovoltaic plant at a Sorting Centre.
Impairments of 3,664 thousand euros primarily regard assets located on land held under concession or sub-concession by
the Parent Company, for which, whilst awaiting confirmation of renewal, the concession term has expired. The impairment,
inclusive or depreciation of assets to be handed over free of charge at the end of the concession term, is calculated on the
basis of the probable residual duration of the right to use the assets, estimated on the basis of the framework agreements
entered into with the Public Sector, the status of negotiations with the grantors and past experience.
Reclassifications from Assets in the course of construction, totalling 69,186 thousand euros, primarily regard the purchase
cost of assets that became available and ready for use during the period. Above all, these assets regard the rollout of hardware held in storage and completion of the process of restyling leased and owned properties.
Disposals, with a carrying amount of 4,323 thousand euros, primarily regard the sale of properties used in operations (2,283
thousand euros) and the disposal of obsolete production plant (1,289 thousand euros). The impact of these disposals on
the income statement is described in note 29.2.
The following table shows a breakdown by category of property, plant and equipment held under finance leases, showing
the carrying amounts at 31 December 2011 and 2010:
5.2 - Property, plant and equipment held under finance leases
31 December 2011
31 December 2010
Cost
Accumulated
depreciation
Net carrying
amount
Buildings
17,043
(4,856)
Plant and equipment
65,294
Item
Other assets
Total
Cost
Accumulated
depreciation
Net carrying
amount
12,187
17,043
(4,345)
12,698
(65,167)
127
64,835
(63,795)
1,040
6,885
(4,067)
2,818
6,824
(3,144)
3,680
89,222
(74,090)
15,132
88,702
(71,284)
17,418
188
6 - INVESTMENT PROPERTY
Investment property primarily regards properties owned by the subsidiary, EGI SpA, residential accommodation previously used by post office managers and former service accommodation owned by Poste Italiane SpA pursuant to Law 560 of
24 December 1993. The following changes in investment property took place in 2011 and 2010:
6.1 - Changes in Investment property
2011
2010
Balance at 1 January
Cost
Carrying amount
247,198
(80,819)
(3,434)
162,945
215,714
(56,918)
(5,120)
153,676
Purchases
Disposals(2)
Depreciation
Reversals of impairments/(Impairments)
Total changes
1,223
(13)
(7,710)
(8,012)
801
(13,711)
1,180
26,452
(11,787)
(7,679)
1,103
9,269
Balance at 31 December
Cost
Carrying amount
235,388
(83,754)
(2,400)
149,234
247,198
(80,819)
(3,434)
162,945
Cost
Total
(24)
11
(13)
50,009
(23,557)
26,452
Disposals(2)
Cost
Total
(13,009)
5,066
233
(7,710)
(19,705)
7,335
583
(11,787)
The fair value of Investment property at 31 December 2011 amounts to 309 million euros. This value includes approximately 230 million euros representing the market prices of the investment property, based primarily on independent valuations,
and 75 million euros representing the sale price applicable to the Parent Company’s former service accommodation pursuant to Law 560 of 24 December 1993.
Most of the properties included in this category are subject to lease agreements classifiable as operating leases, given that
the Group retains substantially all the risks and rewards of ownership of the properties. Under the relevant agreements,
tenants usually have the right to break off the lease with six months notice. Given the resulting lack of certainty, the expected revenue flows from these leases are not referred to in these notes.
7 - INTANGIBLE ASSETS
The following table shows changes in Intangible assets in 2010 and 2011:
7.1 - Changes in Intangible assets
Industrial patents,
intellectual property
rights, concessions,
licences, trademarks
and similar rights
Intangible assets
in progress
and prepayments
Goodwill
Other
Total
1,244,954
(935,741)
(1,356)
307,857
94,875
(99)
94,776
106,103
(2,162)
103,941
120,383
(106,717)
(6,690)
6,976
1,566,315
(1,042,458)
(10,307)
513,550
71,364
38,725
(392)
(157,553)
(212)
(48,068)
110,105
(44,541)
65,564
(13,390)
(13,390)
4,276
4,543
(5,117)
3,702
185,745
(1,273)
(392)
(162,670)
(13,602)
7,808
1,354,514
(1,093,178)
(1,547)
259,789
160,439
(99)
160,340
106,103
(15,552)
90,551
129,202
(111,834)
(6,690)
10,678
1,750,258
(1,205,012)
(23,888)
521,358
101,293
95,895
(1,057)
(160,757)
(35,374)
97,032
(98,005)
(28)
(1,001)
-
6,512
1,458
12
(6,116)
1,866
204,837
(652)
(1,085)
12
(166,873)
36,239
1,549,505
(1,252,129)
(2,213)
295,163
159,438
(99)
159,339
106,103
(15,552)
90,551
137,251
(118,017)
(6,690)
12,544
1,952,297
(1,370,146)
(24,554)
557,597
(546)
546
-
-
-
-
(546)
546
-
Cost
Accumulated amortisation
Total
95,609
286
95,895
(98,005)
(98,005)
-
1,525
(67)
1,458
(871)
219
(652)
Transfers and disposals(3)
Cost
Total
(1,365)
974
(666)
(1,057)
(28)
(28)
-
-
(1,393)
974
(666)
(1,085)
-
-
-
12
12
12
12
Cost
Carrying amount
Purchases
Reclassifications
Transfers and disposals
Amortisation
Impairments
Total changes
Cost
Carrying amount
Purchases
Adjustments(1)
Transfers and disposals(3)
Amortisation
Total changes
Cost
Carrying amount
Adjustments(1)
Cost
Total
Cost
Total
190
Investment in Intangible assets during 2011 amounts to 204,837 thousand euros, including 42,985 thousand euros regarding software developed in-house by the Group.
The increase of 101,293 thousand euros in Industrial patents, intellectual property rights, concessions, licences, trademarks
and similar rights, before amortisation for the year, primarily refers to:
• 77,112 thousand euros regarding the purchase and entry into service of new software applications;
• 12,135 thousand euros, representing the fair value of recent developments of the software component for the ICT
platform used in the provision of virtual mobile services by PosteMobile SpA, which was purchased under a finance lease.
The increase in Other intangible assets includes the provisional difference of 1,757 thousand euros between the consideration paid to UniCredit SpA and the net carrying amount at the date of acquisition of the identifiable assets acquired and
the liabilities assumed of BdM-MCC SpA (note 2.2).
The balance of Intangible assets in progress and prepayments includes uncompleted investment by the Parent Company,
primarily regarding the development of software used in the infrastructure platform (47,585 thousand euros), the provision
of BancoPosta services (40,091 thousand euros), reporting and accounting systems (17,402 thousand euros), the postal
products platform (17,453 thousand euros) and platform for Integrated Web Services provided to postal customers (12,504
thousand euros).
During the period, the Group effected reclassifications from Intangible assets in progress and prepayments to Industrial
patents, intellectual property rights, concessions, licences, trademarks and similar rights, amounting to 95,895 thousand
euros. This primarily reflects the release and entry into service of new software programmes and the evolution of existing
programmes.
At 31 December 2011 Intangible assets include assets purchased under finance leases, the carrying amount of which is as
follows:
7.2 - Intangible assets held under finance leases
31 December 2011
31 December 2010
Cost
Accumulated
amortisation
Net carrying
amount
Industrial patents and intellectual
property rights, concessions, licences,
trademarks and similar rights
61,502
(24,772)
Total
(24,772)
Item
61,502
Cost
Accumulated
amortisation
Net carrying
amount
36,730
48,972
(14,549)
34,423
36,730
48,972
(14,549)
34,423
In 2007 PosteMobile SpA signed a contract for the supply of the hardware and software platform to be used in the provision of virtual mobile services. The contract envisages payment to the supplier of a set-up fee and a series of annual fees.
The contract has been accounted for as a finance lease. The duration, initially due to expire on 31 December 2014, has been
extended until 31 December 2016 under an Amendment signed by Poste Mobile SpA and the supplier on 17 November
2011. At 31 December 2011 the software component amounts to 36,170 thousand euros, after accumulated amortisation.
The hardware component is accounted for in Other assets, under Property, plant and equipment (note 5), at a carrying
amount of 2,760 thousand euros, after accumulated depreciation.
In 2009 Italia Logistica Srl agreed to lease three divisions of a business until March 2013. The value of the right to manage
the divisions has been accounted for as a finance lease (IAS - 17 Leases, and IFRIC 4 – Determining whether an
Arrangement contains a Lease). At 31 December 2011 the value of the intangible asset recognised is 560 thousand euros,
after accumulated amortisation.
Goodwill, as shown in the following schedule, primarily derives from acquisitions and subsequent mergers of companies
carried out by the subsidiaries, Postel SpA and PostelPrint SpA, after accumulated amortisation until 1 January 2004. This
item also includes Goodwill arising from consolidation, generated by the process of eliminating the value of investments
consolidated on a line-by-line basis, represents differences between the acquisition price and the fair value of the assets
acquired and liabilities assumed.
7.3 - Goodwill
Item
Postel SpA
Mistral Air Srl
45,000
3,296
4,934
37,321
45,000
3,296
4,934
37,321
Total
90,551
90,551
Goodwill has been tested for impairment in accordance with the relevant accounting standards. Based on the prospective
information available, there are no material indications of impairments to be accounted for in the consolidated financial
statements.
8 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
This item includes the following:
8.1 - Investments
Item
Investments in subsidiaries
Investments in joint ventures
Investments in associates
4,947
34
4,840
4,178
34
2,459
Total
9,821
6,671
Changes in Investments accounted for using the equity method during 2010 and 2011 are as follows:
8.2 - Changes in Investments in 2010
Adjustments
accounted
Balance at 31
for using the
dividend
December
equity method adjustments
2010
Additions/
(Reductions)
Changes
in the
basis of
consolidation
101
968
1,197
8,176
2,325
54
-
1,000
-
(968)
(8,176)
(54)
-
(4)
4
(445)
-
-
97
1,201
555
2,325
-
12,821
1,000
(9,198)
(445)
-
4,178
-
51
51
28
28
(45)
(45)
-
34
34
in associates
Docugest SpA
Consorzio ANAC
Telma - Sapienza Scarl
Uptime SpA
Other SDA group associates
1,781
10
28
19
649
-
(28)
-
-
-
1,781
10
649
19
Total associates
1,838
649
(28)
-
-
2,459
14,659
1,700
(9,198)
(490)
-
6,671
Investments
2010
in subsidiaries
Address Software Srl
Consorzio Poste Contact
Docutel SpA
Kipoint SpA
Poste Assicura SpA
Poste Tributi ScpA
Poste Voice SpA
Postel do Brasil Ltda
Total subsidiaries
in joint ventures
Uptime SpA(1)
Total joint ventures
Total
(1)
Measurement using the equity method was based on the latest available financial statements for the year 31 December 2009.
192
8.3 - Changes in Investments in 2011
Adjustments
Balance at
1 January 2011
Additions/
(Reductions)
Changes in
the basis of
consolidation
accounted for using
equity method
dividend
adjustments
Balance at 31
December 2011
in subsidiaries
Docutel SpA
Kipoint SpA(1)
Poste Tributi ScpA
97
1,201
555
2,325
-
500
58
-
40
62
167
(58)
-
137
1,263
1,222
2,325
-
Total subsidiaries
4,178
558
-
211
-
4,947
in joint ventures
Uptime SpA(2)
34
-
-
-
-
34
Total joint ventures
34
-
-
-
-
34
in associates
Docugest SpA(2)
Consorzio ANAC in liquidation
Telma - Sapienza Scarl(1)
Other SDA group associates(3)
1,781
10
649
19
2,058
(10)
-
-
491
(158)
-
-
4,330
491
19
Total associates
2,459
2,048
-
333
-
4,840
Total
6,671
2,606
-
544
-
9,821
Investments
(1)
(2)
(3)
Measurement using the equity method refers to the alignment of the value of the investment to Equity in the financial statements for the year ended 31
December 2010.
Measurement using the equity method was based on the latest available financial statements for the year 31 December 2010.
The other SDA Express Courier associates are: Epiemme srl (dormant), G.T.E. Transport Srl in liquidation, I.C.S. Srl, International Speedy Srl in liquidation,
MDG Express Srl, Speedy Express Courier Srl, S.T.E. Srl, T.W.S. Express Courier Srl.
Changes during 2011, as described in note 8.3, regard:
• a capital contribution from SDA Express Courier SpA to Kipoint SpA, totalling 500 thousand euros;
• participation in the capital increase carried out by Postel do Brasil Ltda on 11 April, in preparation for the company’s
liquidation, with a value of 2,214,452 Brazilian reals (equal to 1,202 thousand euros) by converting all the receivables due
to Postel SpA from the Brazilian subsidiary, and written off in previous years, and via a cash payment of 129,851 Brazilian
reals (58 thousand euros); at the same time the value of the investment was written down by 58 thousand euros. As a
result of the capital increase, the Group’s interest in Postel do Brasil Ltda has risen from 99.88% to 99.99%;
• Postel SpA’s acquisition, on 31 January 2011, of 162,151 shares in Docugest SpA, representing a 12% interest in the
company, and the simultaneous sale to a third company, CEDACRI SpA, of 152,556 shares in C-Global SpA, representing
a 17% interest. As a result of these transactions, Postel SpA owns a 49% interest in Docugest SpA;
• The request for cancellation of the Consorzio Accademia Nazionale di Aviazione Civile (ANAC) from the companies’
register on 25 July 2011.
In addition, on 7 September 2011 a new shareholder acquired an interest in Telma-Sapienza Scarl, thus reducing Poste
Italiane SpA’s holding from 32.45% to 32.18%. Following the entry of a further new shareholder on 1 March 2012, the
interest in Telma-Sapienza Scarl was reduced from 32.18% to 30.20%.
9 - FINANCIAL ASSETS
Financial assets break down as follows at 31 December 2011 and 2010:
9.1 - Financial assets
Item
profit or loss
Total
Non-current
assets
242,511
13,616,562
44,842,507
Current
assets
9,100,384
747,331
5,309,511
9,555,977
203,470
68,461,027
Total
9,342,895
14,363,893
50,152,018
Non-current
assets
336,575
12,969,208
42,429,757
Current
assets
7,734,682
1,799,005
5,140,971
Total
8,071,257
14,768,213
47,570,728
85,478
28,819
9,641,455
232,289
11,174,547
213,340
23,299
3,485
11,197,846
216,825
15,271,523
83,732,550
67,123,427
14,701,442
81,824,869
Information on Financial assets is broken down by operating segment, as follows:
• Financial Services, primarily relating to the financial assets of BancoPosta RFC23 and BdM-MCC SpA;
• Insurance Services, which includes the financial assets of Poste Vita SpA and its subsidiary, Poste Assicura;
• Postal and Business Services, accounting for all the Group’s other financial assets.
9.2 - Financial assets by operating segment
Item
FINANCIAL SERVICES
INSURANCE SERVICES
profit or loss
POSTAL AND BUSINESS SERVICES
Total
Non-current
assets
26,475,466
26,863
13,616,562
12,697,915
134,126
Current
assets
10,863,035
8,800,155
747,331
1,286,757
28,792
41,341,432
31,716,111
Total
37,338,501
8,827,018
14,363,893
13,984,672
162,918
Non-current
assets
26,669,898
12,969,208
13,613,438
87,252
Current
assets
10,230,521
7,428,030
1,799,005
1,002,533
953
Total
36,900,419
7,428,030
14,768,213
14,615,971
88,205
4,010,021
5,723
3,918,820
45,351,453
5,723
35,634,931
39,630,028
28,349,926
4,056,310
3,251
4,029,747
43,686,338
3,251
32,379,673
9,555,977
69,344
85,478
-
9,641,455
69,344
11,174,547
105,555
23,299
13
11,197,846
105,568
644,129
215,648
428,481
-
398,467
294,506
103,934
27
1,042,596
510,154
532,415
27
823,501
336,575
466,393
20,533
414,611
303,401
108,691
2,519
1,238,112
639,976
575,084
23,052
68,461,027
15,271,523
83,732,550
67,123,427
14,701,442
81,824,869
23. BancoPosta RFC’s operations 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 accounts deposits, carried out in the name of
BancoPosta but subject to statutory restrictions on the investment of the liquidity in compliance with the applicable legislation, and the management of
collections and payments on behalf of third parties. These include the collection of postal savings (savings books and savings certificates), carried out on
behalf of Cassa Depositi e Prestiti and the MEF, and services delegated by Public Sector entities. Among other things, 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, signed
on 8 May 2009 and extended with an addendum dated on 29 September 2011, expires on 30 June 2012, and requires BancoPosta to provide daily statements of all cash flows, with a delay of one bank working day with respect to the transaction date.
194
FINANCIAL SERVICES
LOANS AND RECEIVABLES
Loans and receivables break down as follows:
9.3 - Loans and receivables
Item
Loans
Non-current
assets
26,863
Current
assets
45,960
26,863
Receivables
Amounts deposited with the MEF
MEF on behalf of Italian Treasury
Total
Total
72,823
Non-current
assets
-
Current
assets
-
Total
-
8,754,195
7,060,499
793,537
900,159
8,754,195
7,060,499
793,537
900,159
-
7,428,030
6,173,455
829,234
425,341
7,428,030
6,173,455
829,234
425,341
8,800,155
8,827,018
-
7,428,030
7,428,030
LOANS
The balance, which refers to BdM-MCC SpA, consists of:
• 62,966 thousand euros in loans granted to public entities and non-financial companies, as part of the development
financing provided under the Agreement with Cassa Depositi e Prestiti; of the above, 25,475 thousand euros regards a
loan to be repaid by the MEF;
• 9,356 thousand euros for loan granted to a bank;
• 501 thousand euros to adjust the value of development loans following their conversion to a fixed rate as a result of fair
value hedges with a notional amount of 16,292 thousand euros, as described in note 9.12.
RECEIVABLES
This item relates almost entirely to BancoPosta RFC.
As provided for in the specific agreement with the MEF, renewed on 1 April 2011, approved by Ministerial Decree and valid
until 31 December 2011, these deposits regard the investment of liquidity deriving from current account deposits by Public
Sector entities with the parent and are remunerated at a floating rate in line with the European Commission’s Decision of
16 July 2008.
MEF on behalf of the Italian Treasury
9.4 - MEF on behalf of the Italian Treasury
Item
Non-current
assets
Current
assets
Total
Non-current
assets
Current
assets
Total
Balance of cash flows for advances
Balance of cash flows from management
of postal savings
Amounts payable for responsibility for robberies
Amounts payable for operational risks
-
1,439,513
1,439,513
-
1,177,544
1,177,544
-
(358,238)
(160,224)
(127,514)
(358,238)
(160,224)
(127,514)
-
(73,403)
(160,499)
(114,408)
(73,403)
(160,499)
(114,408)
Total
-
793,537
793,537
-
829,234
829,234
9.5 - Balance of cash flows for advances
Non-current
Item
assets
Net advances
MEF postal current accounts and other payables
Ministry of Justice - Orders for payment
MEF - State pensions
-
Current
assets
1,445,858
(680,713)
(3,024)
677,392
Total
1,439,513
-
Total
1,445,858
(680,713)
(3,024)
677,392
Non-current
assets
-
Current
assets
1,175,460
(679,417)
16
681,485
Total
1,175,460
(679,417)
16
681,485
1,439,513
-
1,177,544
1,177,544
The balance of cash flows for advances represents the net amount receivable as a result of transfers of deposits and excess
liquidity, less advances from the MEF to meet the cash requirements of BancoPosta.
Balance of cash flows from the management of postal savings
This item represents the balance of deposits less withdrawals during the last day of the period and cleared on the first day
of the following period. The balance at 31 December 2011 consists of 434,939 thousand euros payable to Cassa Depositi
e Prestiti (109,428 thousand euros at 31 December 2010), less 76,701 thousand euros receivable from the MEF for outflows on its behalf (36,025 thousand euros at 31 December 2010).
The Parent Company is liable to the MEF on behalf of the Italian Treasury for losses resulting from robberies and fraud. This
liability derives from the 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. Changes in this liability during the period are as follows:
9.6 - Changes in Amounts payable for responsibility for robberies
Note
Amounts payable for robberies during the year
Repayments mad
[36.1]
2011
160,499
6,778
(7,053)
2010
164,604
6,748
(10,853)
160,224
160,499
196
During 2011 the Parent Company made repayments of 3,683 thousand euros to the Treasury for robberies that took place
up to 31 December 2010 and repayments of 2,694 thousand euros for robberies during the first half of 2011. A further 676
thousand euros was repaid following rulings by the Italian Court of Auditors in respect of robberies up to 31 December
1993.
These payables regard the portion of advances obtained to fund the operations of BancoPosta, relating to advances from
the MEF for transactions for which there were insufficient funds. Changes in these payables are as follows:
9.7 - Changes in Amounts payable to the Italian Treasury for operational risks
Note
New payables for operational risks
Operational risks that did not occur
2011
114,408
9,462
(1,337)
[36.1]
Repayments made
Reclassification for Provisions for disputes
2010
102,647
11,074
(1,727)
8,125
4,981
9,347
(83)
2,497
127,514
114,408
9.8 - Other financial receivables
Item
Guarantee deposits
503,880
Cheques drawn on third parties awaiting clearance
233,407
BancoPosta ATM withdrawals to be debited to customer accounts
70,379
Other amounts to be charged to customers
39,884
Items awaiting settlement with the banking system
39,057
Other receivables
13,552
Total
900,159
90,074
92,718
70,189
138,529
18,624
15,207
425,341
Guarantee deposits, totalling 503,880 thousand euros include 481,290 thousand euros (89,560 thousand euros al 31
December 2010) provided to counterparties with whom the Company has executed asset swap transactions (with collateral provided by specific Credit Support Annexes) as part of the Group’s cash flow and fair value hedging policies, and 22,590
thousand euros (514 thousand euros at 31 December 2010) provided to counterparties in outstanding repo liabilities on
fixed income securities (with collateral provided by specific Global Master Repurchase Agreements).
Other amounts to be charged to customers primarily regard:
• amounts due from commercial partners derive from the handling of Postepay card top-ups and the payment of pre-printed
bills by their distribution networks, and total 21,689 thousand euros;
• use of the debit cards issued by BancoPosta, totalling 11,139 thousand euros;
• cheques and other post office securities settled through the clearing house, totalling 3,475 thousand euros (90,821
thousand euros at 31 December 2010). The reduction compared with the previous year is due to optimisation of the
process for handling remittances from the clearing house.
Items awaiting settlement with the banking system regard debit card payments made at post offices, totalling 37,026 thousand euros, and other items being processed in relation to ATM withdrawals using third-party debit cards, totalling 2,031
thousand euros.
INVESTIMENTS IN SECURITIES AND EQUITY INSTRUMENTS
This item breaks down as follows:
9.9 - Investments in securities and equity instruments
Item
Equity instruments
Total
Note
[9.10]
[9.10]
Non-current
assets
13,616,562
13,616,562
Current
assets
747,331
747,331
12,697,915
12,675,246
22,669
26,314,477
Total
14,363,893
14,363,893
Non-current
Current
assets
assets
12,969,208 1,799,005
12,969,208 1,799,005
Total
14,768,213
14,768,213
1,286,757
1,286,757
-
13,984,672
13,962,003
22,669
13,613,438 1,002,533
13,587,472 1,002,533
25,966
-
14,615,971
14,590,005
25,966
2,034,088
28,348,565
26,582,646 2,801,538
29,384,184
Investments in securities
This item regards investments in fixed income euro area government securities with a face value of 30,567,563 thousand
euros, and consisting of Italian government securities held primarily by BancoPosta RFC and to a residual extent by BdMMCC SpA and BancoPosta Fondi SpA SGR.
In compliance with the 2007 Budget Law, with effect from 2007 the Parent Company is required to invest the funds raised
from deposits paid into postal current accounts by private customers in euro area government securities. In this regard, 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 appropriate statistical models developed for
the Parent Company by a leading market operator. An Asset & Liability Management system has been created to management the match between customer deposits and investments. During the first half the process of matching the maturity
of the portfolio with the new replication model for deposits, introduced in 2010, continued.
Changes in Investments in securities in 2011 and 2010 are as follows:
198
9.10 - Changes in Investments in securities
HTM
Face
Securities
value
Balance at 31 December 2009 13,114,650
Purchases
Sales
Redemptions
Transfers to Equity
Increase/(Decrease) in
accrued income
Change in amortised cost
Fair value gains/(losses)
through Equity
AFS
FVPL
Carrying
Face
Fair
amount
value
value
13,287,112 14,123,020 15,098,084
2,695,000 2,814,133
(150,000)
(154,059)
(1,150,000) (1,150,000)
(17,857)
Face
value
100,000
TOTAL
Fair
value
104,021
Face
Carrying
value
amount
27,337,670 28,489,217
7,001,500
7,230,865 1,911,000 1,921,109
(5,707,350) (5,814,550) (2,011,000) (2,025,807)
(845,320)
(845,320)
(227,728)
-
11,607,500 11,966,107
(7,868,350) (7,994,416)
(1,995,320) (1,995,320)
(245,585)
-
(5,029)
(6,087)
-
18,085
9,912
-
677
-
-
13,733
3,825
-
-
-
(24,694)
-
-
-
(24,694)
-
-
-
(854,649)
-
-
-
(854,649)
Balance at 31 December 2010 14,509,650 14,768,213 14,571,850 14,590,005
-
-
Purchases
1,300,000 1,225,677 6,401,200 6,285,549
Sales
(50,000)
(50,576) (3,838,500) (3,824,282)
Redemptions
(1,522,000) (1,522,000)
(810,000)
(810,000)
Transfers to Equity
(44,557)
(114,252)
Increase/(Decrease) in
accrued income
(14,103)
8,841
1,239
23,242
407,960
through Equity
- (2,610,542)
5,363
5,482
-
7,701,200
7,511,226
- (3,888,500) (3,874,858)
- (2,332,000) (2,332,000)
(158,809)
-
-
-
(5,262)
24,481
-
-
-
407,960
-
-
- (2,610,542)
5,363
5,482
-
-
30,567,563 28,325,896
14,237,650 14,363,893 16,329,913 13,962,003
29,081,500 29,358,218
At 31 December 2011 the fair value of the held-to-maturity portfolio, accounted for at amortised cost, is 13,174,718 thousand euros (including 222,786 thousand euros in accrued daily interest payments). A notional amount of 1,498,000 thousand euros regards securities that are encumbered as they have been used as collateral for repurchase agreements (note
23.3).
The fair value of the available-for-sale portfolio is 13,962,003 thousand euros. A notional amount of 600,000 thousand euros
regards encumbered investments in securities used as collateral for repurchase agreements (note 23.3) entered into by the
Parent Company. In addition, securities with a notional amount of 230,000 thousand euros had been used as collateral for
repurchase agreements unwound in January 2012. The overall fair value loss of 2,202,582 thousand euros for the period is
recognised in the relevant Equity reserve, consisting of a loss of 2,610,542 thousand euros (note 19.1) relating to the portion of the portfolio not covered by fair value hedges, and in the income statement, represented by a loss of 407,960 thousand euros relating to the hedged portion. The losses reflect the downgrade of Italy’s credit rating in the second half of
2011.
Investments in equity instruments
These investments are attributable to BancoPosta RFC and primarily include 21,682 thousand euros relating to the fair value
of 75,628 class B shares in MasterCard Incorporated held by the Parent Company (150,628 shares with a fair value of
25,263 thousand euros at 31 December 2010). These equity instruments are not quoted on a regulated market but, should
it be necessary to sell them, they may be converted into an equal number of Class A shares, which are listed on the New
York Stock Exchange. 75,000 shares were sold to third parties during the period, realizing a gain of 20,318 thousand euros.
Fair value gains during the period amount to 9,282 thousand euros and have been recognised in the relevant Equity reserve
(note 19.1).
DERIVATIVE FINANCIAL INSTRUMENTS
At 31 December 2011 derivative financial instruments attributable to the Financial Services segment total 162,918 thousand
euros and include 86,414 thousand euros attributable to BancoPosta RFC and 76,504 thousand euros to BdM-MCC SpA.
The following schedule shows a breakdown of outstanding transactions attributable to BancoPosta RFC and BdM-MCC SpA
at 31 December 2011.
Derivative instruments attributable to BancoPosta RFC
9.11 - Changes in Derivative financial instruments
Cash flow hedges
Forward purchases
notional fair value
Discontinued CFHs
Increases/(Decreases)(*)
Gains/Losses through
profit or loss(**)
Transactions settled(***)
578,000
(91,000)
1,820,000
40,969
(6,941)
2,802
Fair value hedges
Asset swaps
notional fair value
2,618,700 (93,075)
450,000 83,259
Asset swaps
notional fair value
FV through profit or loss
Forward purchases
notional
fair value
Forward sales
notional fair value
notional
Total
fair value
2,950,000
15,904
91,000
-
6,941
2,286
100,000
541,000
(7)
(2,543)
3,296,700 (52,113)
5,761,000 101,708
-
(24)
2,864
(91,000)
(9,227)
(641,000)
2,550
(24)
(3,313,950) (51,867)
2,950,000
18,744
750,000 (417,249)
-
1,050,000
5,911
-
-
5,743,750 (2,296)
5,650,000 (565,359)
-
(552)
9,513
-
-
-
-
(1,587,000) (50,530)
(994,950)
2,476
Balance at 31 December 2010 720,000 (13,700)
Increases/(Decreases)(*)
3,190,000 (79,933)
Discontinued CFHs
(1,050,000) (5,911)
Gains/Losses through
profit or loss(**)
Transactions settled(***)
(2,060,000) 68,263
2,073,750
1,710,000
-
(7,340)
(68,177)
-
(250,000)
(450)
(46,588)
Balance at 31 December 2011 800,000 (31,281)
3,533,750 (122,555)
3,700,000 (389,544)
1,050,000
5,911
-
-
9,083,750 (537,469)
950,000 71,506
2,583,750 (194,061)
3,700,000 (389,544)
550,000
500,000
12,844
(6,933)
-
-
1,800,000 86,414
7,283,750 (623,883)
-
(2,310,000)
(1,002)
31,188
of which:
Derivative assets
Derivative liabilities
300,000
2,064
500,000 (33,345)
The opening balance and changes in 2010 solely regard derivative financial instruments associated with investments in securities.
(*)
Increases /(Decreases) refer to the notional amount of new transactions and changes in the fair value of the overall portfolio during the period
(**)
Gains and losses through profit or loss refer to any ineffective components of hedges, recognised in Other income and Other expenses from financial and insurance activities.
(***)
Transactions settled include forward transactions settled, accrued differentials and the extinguishment of asset swaps linked to securities sold.
During period the following transactions in relation to cash flow hedges were carried out:
• the settlement of forward purchases outstanding at 31 December 2010 with a notional amount of 720,000 thousand euros;
• the execution of new forward purchase agreements with a notional amount of 3,190,000 thousand euros (so-called cash
flow hedges of forecast transactions), including 1,340,000 thousand euros already settled at 31 December 2011;
• the reclassification of forward purchases with a notional amount of 1,050,000 thousand euros to derivative financial
instruments at fair value through profit and loss, following early settlement and resulting discontinuation24 of the hedges
in February 2012;
24. Discontinuation of the application of hedge accounting following a decision by management, or due to the early sale or extinguishment of the hedged or
hedging instrument, and the consequent application of a different accounting treatment, as required by the relevant IFRS.
200
• the execution of asset swaps on securities purchased during the period and with a notional amount 1,710,000 thousand
euros and the extinguishment of asset swaps on securities sold, previously protected by cash flow hedges, with a
notional amount of 250,000 thousand euros; as a result of these transactions, at 31 December 2011 the Parent Company
reports outstanding assets swaps with a total notional amount of 3,533,750 thousand euros with which BancoPosta has
purchased a fixed rate of 4.86% (the weighted average of the rates provided for in the contracts) and sold a floating rate
on inflation-linked BTPs (BTP€i) and CCTeus indexed to 6-month Euribor.
The effective portion of these instruments recorded an overall fair value loss of 148,110 thousand euros during the period,
which is reflected in the Cash flow hedge reserve (note 19.1).
During 2011 BancoPosta also executed fair value hedges to limit exposure to the price volatility of certain investments in
available-for-sale fixed income instruments. These instruments are long-term in nature or designed to provide portfolio flexibility. These transactions include asset swaps with a total notional amount of 750,000 thousand euros, including 350,000
thousand euros to be activated in 2015 and 400,000 thousand euros to be activated 2016. The swaps have enabled the
Company to purchase a suitable floating rate and sell the fixed rate applicable to the relevant BTPs. As a result of fluctuations in market rates, the effective portion of these instruments have undergone an overall net fair value loss of 417,249
thousand euros, whilst the hedged securities (note 9.10) have recorded a fair value gain of 407,960 thousand euros, with
the difference of 9,289 thousand euros being due to paid or maturing differentials. The losses reflect the downgrade of
Italy’s credit rating in the second half of 2011, given that the related exposure is not hedged.
Finally, with regard to derivative financial instruments measured at fair value through profit or loss, the above discontinued
hedge was settled in 2012 through forward sales with net proceeds of 55,618 thousand euros, after deducting the fair value
previously reported at 31 December 2011, totalling 5,911 thousand euros.
Derivative instruments attributable to BdM-MCC SpA
2011
2010
Cash Flow
hedges
Fair value
hedges
Fair value
through profit
or loss
Increases/(Decreases)
Gains/(Losses) through profit or loss
Transactions settled
-
41,413
32,327
2,076
-
41,413
32,327
2,076
-
of which:
Derivative assets
-
75,816
-
75,816
-
76,316
(500)
188
(188)
76,504
(688)
Total
Fair value
through profit
or loss
Total
-
-
-
-
-
-
-
-
-
-
-
Cash flow Fair value
hedges
hedges
Fair value gains of 76,316 thousand euros refer to the value of five interest rate swaps hedging bonds issued by BdM-MCC
SpA (note 23.1), with a notional amount of 333,452 thousand euros. These instruments recorded a net fair value gain of
33,942 thousand euros during the period, whilst the hedged bonds recorded a fair value loss of 32,126 thousand euros. The
difference of 1,816 thousand euros is due to the maturing differential recognised in profit or loss.
The balance is made up by six interest rate swaps, recording net fair value losses of 500 thousand euros, to hedge existing
loans with a notional amount of 16,292 thousand euros. These instruments recorded a net fair value gain of 461 thousand
euros during the period, whilst the hedged fixed rate loans recorded a fair value loss of 201 thousand euros. The difference
of 260 thousand euros is due to the maturing differential recognised in profit or loss.
Finally, the derivative financial instruments measured at fair value through profit or loss refer to two CAP options, including
one separated from the floored top side bond issue and classified in trading derivatives, and the other of the same amount
and type also separated from the derivate hedging the bonds.
INSURANCE SERVICES
RECEIVABLES
Receivables of 5,723 thousand euros (2,351 thousand euros at 31 December 2010) regard the subscription of and payment
for units of mutual investment funds by Poste Vita SpA. During the period receivables totalling 9,000 thousand euros due
from a counterparty declared bankrupt were sold. These items had been previously written down by 8,100 thousand euros,
thus realising a net gain of 1,216 thousand euros.
AVAILABLE-FOR-SALE FINANCIAL ASSETS
Changes in available-for-sale financial assets in 2010 and 2011 are as follows:
9.13 - Changes in Investments in available-for-sale financial assets
Equity instruments
Fixed income
instruments
Other
investments
Total
3,804
25,898,066
1,579,978
27,481,848
Additions/Disbursements
Fair value gains and losses through Equity
Fair value gains and losses through profit or loss
Transfers to the income statement
Accrued income
Sales/Settlement of accrued income
4,473
(759)
59
(40)
(1,120)
15,110,203
(1,078,719)
77,860
(79,922)
67,211
403,872
(10,413,855)
826,950
(16,255)
(2,133)
15,941,626
(1,095,733)
77,919
(79,962)
67,211
403,872
(10,417,108)
Fair value gains and losses through Equity
Transfers to the income statement
Accrued income
Sales/Settlement of accrued income
6,417
3,605
(1,756)
223
38
(2,944)
29,984,716
11,482,041
(2,815,774)
(4,305)
16,636
91,120
487,234
(5,910,595)
2,388,540
83,375
(165,087)
(8,553)
32,379,673
11,569,021
(2,982,617)
(4,082)
16,674
91,120
487,234
(5,922,092)
5,583
33,331,073
2,298,275
35,634,931
Financial instruments classified as Available-for-sale financial assets report fair value losses of 2,982,617 thousand euros.
This amount reflects:
• fair value losses of 2,979,626 thousand euros deriving from the measurement of securities held by Poste Vita SpA, with
2,877,401 thousand euros transferred to policyholders, with a contra-entry made in technical provisions in accordance
with the shadow accounting method (note 2.3 – Insurance contracts);
• net losses on the measurement of securities held by Poste Assicura SpA, totalling 2,991 thousand euros.
The sum of the above changes in the fair value of Available-for-sale financial assets during 2011 had a net negative impact
on the relevant Equity reserve of 105,216 thousand euros (note 19.1).
202
Equity instruments
Equity instruments refer to Poste Vita SpA’s investments, totalling 5,583 thousand euros (6,417 thousand euros at 31
December 2010) covering contractual obligations deriving from separately managed accounts. 79% of the portfolio is
invested in utilities (electricity and gas), telecommunications, energy and financial stocks.
Fixed income instruments primarily regard investments held by Poste Vita SpA, totalling 33,283,844 thousand euros
(29,975,803 thousand euros at 31 December 2010). This refers to listed instruments with a face value of 32,179,254 thousand euros issued by European governments and European blue-chip companies, with 31,291,309 thousand euros
(28,243,225 thousand euros at 31 December 2010) of these securities covering contractual obligations deriving from separately managed accounts. Under the shadow accounting method applied, unrealised gains and losses on these instruments are entirely transferred to policyholders and recognised in technical provisions. The remaining amount regards the
insurance company’s investment of free capital.
The balance is represented by the fair value of fixed income instruments, totalling 47,229 thousand euros, held by Poste
Assicura SpA.
Other investments
Other investments regard units of mutual investment funds with a value of 2,298,275 thousand euros (2,388,540 thousand
euros at 31 December 2010), including 2,270,565 thousand euros primarily consisting of equity funds and 27,710 thousand
euros relating to real estate funds, subscribed entirely by Poste Vita SpA and allocated to the insurance company’s separately managed accounts.
FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Changes in financial instruments at fair value through profit or loss were as follows in 2010 and 2011:
9.14 - Changes in Financial instruments at fair value through profit or loss
Purchases/Disbursements
Accrued income
Sales/settlement of accrued income
Accrued income
Sales/settlement of accrued income
Fixed income
instruments
Structured
bonds
Other
investments
Total
1,266,132
7,178,870
(111,931)
1,924
(4,666,665)
3,668,330
1,037,508
(244,107)
2,955
(400,857)
8,769,793
1,699,673
292,216
(3,974,631)
6,787,051
1,897,353
(33)
(3,809,596)
601,629
241,860
(4,385)
(96,639)
742,465
38,030
(1,373)
(76,271)
10,637,554
9,120,403
175,900
1,924
(8,737,935)
11,197,846
2,972,891
(245,513)
2,955
(4,286,724)
4,063,829
4,874,775
702,851
9,641,455
Financial instruments designated at fair value through profit or loss are held by the subsidiary, Poste Vita SpA and regard:
• fixed income instruments of 4,063,829 thousand euros (3,668,330 thousand euros at 31 December 2010), consisting of
3,837,934 thousand euros in coupon stripped BTPs covering contractual obligations driving from with Branch III insurance
policies, with the balance of 225,895 thousand euros primarily made up of corporate bonds issued by blue-chip
companies and primarily linked to separately managed accounts;
• structured bonds of 4,874,775 thousand euros (6,787,051 thousand euros at 31 December 2010) relating to investments
whose returns are linked to the performances of particular market indexes, primarily designed to cover the insurance
company’s contractual obligations to the holders of Branch III index-linked policies; the item also includes instruments
issued by the securitisation vehicle, Programma Dinamico SpA, with a fair value of 284,350 thousand euros (378,150
thousand euros at 31 December 2010); the reduction compared with the beginning of the year is due to sales of financial
instruments, totalling 1,870,680 thousand euros, to fund the payment of claims on Branch III policies;
• other investments totalling 702,851 thousand euros (742,465 thousand euros at 31 December 2010) regarding units of
mutual investment funds primarily acquired to cover contractual obligations to the holders of Branch III unit-linked policies;
the reduction compared with the beginning of the year is due to sales of financial instruments to fund the payment of
claims on Branch III policies.
At 31 December 2011 outstanding transactions primarily regard warrants and forward purchases of securities or warrants
executed by Poste Vita SpA to cover contractual obligations deriving from Branch III policies already distributed or in the
process of being distributed. Changes in derivative financial instruments accounted for at fair value through profit or loss in
2010 and 2011 are as follows:
9.15 - Changes in Derivative financial instuments at fair value through profit or loss
Purchases
Fair value gains and losses
Purchases
USD
currency
forwards
Forward
purchase of coupon
stripped BTPs
Forward
purchase of
warrants
Warrants
Other less
significant
instruments
Total
(21)
(7,547)
(4,860)
34,880
132
22,584
9,257
-
-
97,800
-
107,057
12
(7,891)
(11,115)
(27,125)
-
(46,119)
(9,235)
15,438
15,975
-
(132)
22,046
13
-
-
105,555
-
105,568
2,210
-
-
60,762
-
62,972
24
76,821
7,957
(93,895)
-
(9,093)
(2,247)
(84,541)
(8,911)
(3,078)
-
(98,777)
-
(7,720)
(954)
69,344
-
60,670
-
(7,720)
(954)
69,344
-
-
69,344
(8,674)
of which:
Derivative assets
• Extinguishment of all forward transactions in US dollars outstanding at 31 December 2010, executed to hedge the
redemption values at maturity of securities denominated in this currency.
• Execution of 46 forward coupon stripped BTP purchases with a total notional amount of 1,965 million euros, covering
contractual obligations deriving from Branch I policies and the Branch III “Titanium” policy; forward purchases with a
notional amount of 828 million euros, in excess of the value of the “Titanium” policies sold at 15 July 2011, were in part
extinguished early and in part allocated to the company’s free capital, with a total loss of 60,332 thousand euros.
• Execution and settlement of 4 forward coupon stripped BTP purchases with a total notional amount of 230 million euros,
covering contractual obligations deriving from the Branch III “Arco” policy.
204
• Execution and settlement of 4 forward coupon stripped BTP purchases with a total notional amount of 231.5 million euros,
subsequently reduced to 228.5 million euros without significant additional expense, covering contractual obligations
deriving from the Branch III “Prisma” policy.
• Execution of 7 forward coupon stripped BTP purchases with a total notional amount of 252.2 million euros, covering
contractual obligations deriving from the Branch III “6Speciale” policy in the process of being distributed at 31 December
2011; the net fair value loss on this transaction amounts to 7,720 thousand euros.
• Execution of forward purchases of Index Linked Warrants with a face value of 1,450 million euros, covering the indexlinked component of returns on the Branch III “Titanium” policy; the early extinguishment of a part of this contract, with
a notional amount of 729 million euros, resulted in a charge of 8,725 thousand euros.
• Execution and settlement of forward purchases of Index Linked Warrants with a face value of 200 million euros, covering
the index-linked component of returns on the Branch III “Arco” policy.
• Execution and settlement of forward purchases of Index Linked Warrants with a face value of 200 million euros,
subsequently reduced to 197 million euros without significant additional expense, covering the index-linked component
of returns on the Branch III “Prisma” policy.
• Execution and settlement of forward purchases of Index Linked Warrants with a face value of 200 million euros, covering
the index-linked component of returns on the Branch III “6Speciale” policy in the process of being distributed at 31
December 2011; the net fair value loss on this transaction amounts to approximately 954 thousand euros.
• Partial extinguishment of warrants with a face value of 118 million euros, covering the index-linked component of returns
on the Branch III “Quarzo” policy, which were in excess with respect to the related obligations. This extinguishment
resulted in a realised loss of 710 thousand euros.
At 31 December 2011 the Group’s position in warrants is represented by instruments with a total face value of 4,800 million
euros and a fair value of 69,344 thousand euros, as follows:
• warrants with a face value of 800 million euros purchased in 2009 and registering a fair value gain of 6,160 thousand euros
(24,000 thousand euros at 31 December 2010), covering the index-linked component of returns on the Branch III “Alba”
policy;
• warrants with a face value of 1,500 million euros purchased in 2010 and registering a fair value gain of 14,430 thousand
euros (42,555 thousand euros at 31 December 2010), covering the index-linked component of returns on the Branch III
“Terra” policy;
• warrants with a residual face value of 1,382 million euros purchased in 2010 (1,500 million euros at 31 December 2010),
registering a fair value gain of 9,395 thousand euros (39,000 thousand euros at 31 December 2010), covering the indexlinked component of returns on the Branch III “Quarzo” policy;
• warrants with a face value of 721 million euros purchased in 2011 and registering a fair value gain of 14,062 thousand
euros, covering the index-linked component of returns on the Branch III “Titanium” policy;
euros, covering the index-linked component of returns on the Branch III “Arco” policy;
euros, covering the index-linked component of returns on the Branch III “Prisma” policy.
POSTAL AND BUSINESS SERVICES
LOANS
This item refers to 1,023 thousand euros relating to the portion not consolidated using the proportionate method of the
loan formerly granted by SDA Express Courier SpA to Italia Logistica Srl, and 185 thousand euros relating to the loan previously granted by Postel SpA to the subsidiary not consolidated on a line-by-line basis, Address Software Srl.
RECEIVABLES
Receivables, almost entirely attributable to the Parent Company, break down as follows:
9.16 - Receivables
31 December 2011
Non-current
Item
assets
Due from parent
202,809
repayment of loans accounted
for in liabilities
202,809
repayment of interest for 2010
on loan L887/84
Purchasers of service accommodation
12,839
Other
Total
215,648
31 December 2010
Current
assets
289,535
Total
492,344
Non-current
assets
324,503
Current
assets
302,087
Total
626,590
279,902
482,711
324,503
292,454
616,957
9,633
4,441
(677)
9,633
12,839
4,441
(677)
11,737
3
-
9,633
692
(677)
9,633
11,737
695
(677)
293,299
508,947
336,243
302,102
638,345
At 31 December 2011 the fair value of receivables, totalling 482,711 thousand euros, due from the parent, the MEF, in the
form of the residual principal to be repaid on loans accounted for in liabilities, is 477,201 thousand euros. At 31 December
2010 the fair value of this item, at that time accounted for at 616,957 thousand euros, was 627,630 thousand euros. The
carrying amount of other receivables in this category approximates to fair value.
Receivables due from the parent, the MEF, amounting to 492,344 thousand euros, primarily regard a receivable of 482,711
thousand euros relating to the residual principal to be repaid on loans accounted for in liabilities, and which, in accordance
with the laws that authorised the relevant loans, are to be repaid by the parent. This receivable is represented by the amortised cost25 of a receivable with a face value of 505,773 thousand euros, which is expected to be collected by 2016. During
2011 Poste Italiane SpA collected receivables with a face value of 154,526 thousand euros and estimated accrued finance
income on the present value of the receivables to be 20,280 thousand euros.
On the basis of the laws referred to below, these receivables are non-interest-bearing as they relate to loans for which only
the principal is to be repaid by the government, with the exception of the loan linked to Law 887/8426.
25. The amortised cost of the non-interest bearing receivable in question was calculated on the basis of the present value obtained using the risk-free interest rate applicable at the date from which the incorporation of Poste Italiane SpA took effect (1 January 1998). The receivable is thus increased each year
by the amount of interest accrued and reduced by any amounts collected.
26. Interest was originally to be paid on this loan, but payments were suspended between 2001 and 2006, as a result of changes to the government’s budget. Interest accrued to 31 December 2009 was, instead, paid to Poste Italiane SpA from 2007.
206
The face value of these receivables is as follows:
Face value
of receivable
17,706
283,028
203,378
1,661
Legislation
Law 227/75 mechanisation of postal service
Law 39/82 subsequent changes to postal service
Law 887/84
Law 41/86
Total
505,773
Such items represent repayments of loans formerly disbursed by Cassa Depositi e Prestiti, in accordance with the above
laws, to the former Post and Telecommunications Office in order to fund investment between 1975 and 1993. On
conversion of the former Public Entity into a joint-stock company, the accounts payable to Cassa Depositi e Prestiti (the
provider of the loans) and the accounts receivable from the parent, the MEF, to which the relevant laws assigned the burden
of repayment, were posted in the accounts. Poste Italiane SpA is liable for interest expense through to full repayment of
the loans.
Receivables due from the parent, the MEF, also include 9,633 thousand euros in interest on the loan granted under Law
887/84 accruing in 2010 and yet to be collected.
Amounts due from others, totalling 4,441 thousand euros, include:
• guarantee deposits, totalling 3,729 thousand euros, accounted for in current assets, in favour of counterparties with
whom the Company has entered into outstanding repo liabilities on fixed income securities (with collateral provided by
specific Global Master Repurchase Agreements);
• 677 thousand euros due from a counterparty declared bankrupt in 2008 and written off in the same year, resulting from
early extinguishment of two Interest Rate Swaps in accordance with the related contracts terms.
Available-for-sale financial assets, held primarily by the Parent Company, break down as follows:
9.17 - Available-for-sale financial assets
Equity instruments
Fiduciary deposits
Mutual investment funds
Other investments
Total
5,312
428,945
7,365
471,791
94,466
3,692
92,098
3,830
98,158
95,928
532,415
575,084
Changes during the period are as follows:
9.18 - Changes in Available-for-sale financial assets
2011
Fixed income
instruments
Other
investments
7,365
-
471,791
99,225
95,928
-
575,084
99,225
2,089
through Equity
2010
Equity
Note instruments
[19.1]
Equity
Total instruments
Fixed income
instruments
Other
investments
Total
7,362
3
101,143
500,324
94,272
-
202,777
500,327
(73,890)
-
(7,241)
1,647
(5,594)
-
(75,979)
-
33,115
-
33,115
-
(24,569)
-
(24,569)
-
(354)
-
(354)
-
(1,257)
-
(1,257)
Accrued income
-
5,776
411
6,187
-
4,629
270
4,899
(2,053)
(104,629)
(270)
(106,952)
-
(101,238)
(261)
(101,499)
5,312
428,945
98,158
532,415
7,365
471,791
95,928
575,084
Sales / Redemptions /
Settlement of accrued income
Equity instruments
This item refers to 4,500 thousand euros regarding the historical cost of the Parent Company’s 15% interest in Innovazione
e Progetti ScpA, the value of which is unchanged with respect to the previous year.
This item regards investments in BTPs with a total face value of 500,000 thousand euros (a fair value of 428,945 thousand
euros), including 100,000 thousand euros purchased in 2011. Of this amount, securities worth 375,000 thousand euros have
been hedged via the asset swaps classified as fair value hedges, as described in the following note. All these securities
are encumbered investments used as collateral for repurchase agreements entered into by the Parent Company (note
23.3).
In 2011 the Group collected fixed income bonds issued by Cassa Depositi e Prestiti SpA with a face value of 100,000 thousand euros.
Other investments
Other investments regard:
• a fiduciary deposit with a face value of 93,550 thousand euros (unchanged with respect to the end of 2010), established
by the Parent Company in 2002 and expiring on 5 July 2012, and paying interest at a floating rate: the fair value of the
fiduciary deposit at 31 December 2011 is 94,466 thousand euros (92,098 thousand euros at 31 December 2010). At 31
December 2011 approximately 86% of the deposit is held in cash, with the remainder invested in bonds. The Parent
Company has an option which, if exercised, guarantees recovery of approximately 84% of the face value. The trustee has
also entered into credit default swaps (CDSs) with third-party counterparties to hedge exposure to the credit risk of
certain issuers. These CDSs have a total notional amount of 60 million euros.
• Units of equity mutual investment funds with a fair value of 3,692 thousand euros (3,830 thousand euros at 31 December
2010).
208
Changes in derivative assets and liabilities are as follows:
Fair value
hedges
2011
Fair value
through
profit or loss
119
(6)
(122)
36
22,933
(37,191)
10
4,717
27
27
-
Cash Flow
hedges
Gains/(Losses) through profit or loss
of which:
Derivative assets
2010
Fair value
through
profit or loss
Total
Cash Flow
hedges
Fair value
hedges
-
23,052
(37,197)
(112)
4,753
(269)
598
(87)
(123)
17
22,922
(6)
-
(252)
- 23,520
(93)
(123)
(9,531)
-
(9,504)
119
22,933
- 23,052
(9,531)
-
27
(9,531)
119
-
22,933
-
- 23,052
-
Total
Cash flow hedges
At 31 December 2011 outstanding derivative financial instruments, registering fair value gains of 27 thousand euros, consist exclusively of two currency forwards executed in March 2007 by Mistral Air Srl in order to hedge the foreign exchange
risk linked with a notional amount of 520 thousand US dollars. This sum relates to the fees payable to suppliers for the lease
of two aircraft.
Fair value hedges
At 31 December 2011 outstanding derivative financial instruments, registering fair value losses27 of 9,531 thousand euros
consist of nine asset swaps used as fair value hedges entered into by the Parent Company in 2010 to protect the value of
BTPs with a notional amount of 375 million euros from movements in interest rates. These instruments have enabled the
Parent Company to sell the fixed rate on the BTPs of 3.75% and purchase a suitable floating rate.
27. The fair value of these derivative instruments is based on the present value of expected cash flows deriving from the differentials to be exchanged.
10 - INVENTORIES
Net inventories break down as follows:
10.1 - Inventories
Balance at
31 December 2011
Balance at
31 December 2010
Increase/
(Decrease)
Work in progress, semi-finished and finished goods and goods for resale
23,083
21,131
1,952
Properties held for sale
11,384
11,923
(539)
Raw, ancillary and consumable materials
12,472
11,136
1,336
-
8,087
(8,087)
-
(8,087)
8,087
46,939
44,190
2,749
Item
Contract work in progress
Accumulated impairments of contract work in progress
Total
Work in progress, semi-finished and finished goods and goods for resale primarily refer to stocks of goods to be sold by
Poste Shop SpA, which are primarily held in stock at post offices, and stationary and forms used in the Postel Group’s eprocurement activities.
Raw, ancillary and consumable materials primarily include the materials used by the Postel Group for printing and enveloping, and the SIM cards and scratch cards used by PosteMobile SpA and mainly held in stock at post offices.
Properties held for sale regard a number of properties in EGI SpA portfolio that are to be sold. The fair value of these properties at 31 December 2011 amounts to approximately 70 million euros.
With regard to Work in progress, the liquidation of Postel do Brasil Ltda, a subsidiary of Postel SpA, was begun during the
period and the absence of the conditions that would allow the recovery of at least a part of the costs incurred, in previous
years, under the long-term contract for the creation of an integrated hybrid e-mail platform in Brazil was confirmed. The previously made provisions were, therefore, used in full.
11 - TRADE RECEIVABLES
Trade receivables break down as follows:
11.1 - Trade receivables
31 December 2011
Item
Customers
Parents
Subsidiaries
Associates
Joint ventures
Prepayments to suppliers
Total
31 December 2010
Non-current
assets
181,555
-
Current
assets
2,198,191
1,665,322
6,652
8,932
4,306
61
Total
2,379,746
1,665,322
6,652
8,932
4,306
61
Non-current
assets
216,583
-
Current
assets
2,564,570
1,176,654
3,261
3,084
3,422
346
Total
2,781,153
1,176,654
3,261
3,084
3,422
346
181,555
3,883,464
4,065,019
216,583
3,751,337
3,967,920
210
CUSTOMERS
11.2 - Receivables due from customers
31 December 2011
Non-current
Item
assets
Ministries and Public Sector entities
176,941
Unfranked mail delivered on behalf
of third parties and other
valued added services
24,614
Overseas correspondents
Parcel, express courier and express
parcel services
Overdrawn current accounts
Amounts due for other BancoPosta services
Amounts due for management of
government subsidies
Users of telegraphic services
Property management
Other trade receivables
(20,000)
Total
181,555
Current
assets
960,305
31 December 2010
Total
1,137,246
Non-current
assets
216,583
Current
assets
897,917
Total
1,114,500
432,099
219,007
456,713
219,007
-
419,402
184,210
419,402
184,210
165,591
126,645
149,606
98,480
165,591
126,645
149,606
98,480
-
150,791
100,952
842,556
108,581
150,791
100,952
842,556
108,581
52,919
40,253
9,906
314,629
(371,249)
2,198,191
52,919
40,253
9,906
314,629
(391,249)
2,379,746
216,583
45,131
7,875
202,556
(395,401)
2,564,570
45,131
7,875
202,556
(395,401)
2,781,153
MINISTRIES AND PUBLIC SECTOR ENTITIES
These items primarily regard amounts due from the following entities:
• Cabinet Office - Publishing department: 389,206 thousand euros due to the Parent Company, corresponding to a face
value of 415,465 thousand euros, relating to publisher tariff subsidies for the financial years from 2001 to 2010. The
receivable is accounted for at its present value to take account of the time it is expected to take to collect the amount
due in accordance with the regulations in force and the information available. For this reason, the sum of 176,941
thousand euros (corresponding to a face value of 203,200 thousand euros) is classified in Non-current assets;
• the Italian Office for National Statistics: 105,708 thousand euros regarding the printing, enveloping and delivery of the
package for the 2011 national census;
• 71,530 thousand euros due to the Parent Company from the tax authorities, primarily deriving from the provision of
integrated mail services (34,716 thousand euros), the postage of unfranked mail (24,733 thousand euros) and the
payment of tax rebates (5,284 thousand euros);
• 69,883 thousand euros due from INPS, including 61,404 thousand euros due for the payment of pensions by BancoPosta
and attributable entirely to 2011;
• 58,362 thousand euros due to the Parent Company from the Ministry for Economic Development, including 57,657
thousand euros as reimbursement of the costs associated with the management of property, vehicles and security
(including 3,212 thousand euros in amounts accrued during the period);
• 52,325 thousand euros due to the Parent Company from the Equitalia group, including 51,631 thousand euros for the
notification of tax assessments;
• 41,756 thousand euros due to the Parent Company from the Ministry of Internal Affairs, including 22,759 thousand euros
for integrated notification services and 18,997 thousand euros as payment for the franking of mail on credit;
• 41,182 thousand euros payable to the Parent Company by the Ministry of Justice, primarily for the delivery of
administrative notices (19,491 thousand euros) and for the payment service provided by BancoPosta for legal system
expenses (19,229 thousand euros).
• 39,608 thousand euros due to the Parent Company from the Municipality of Rome, primarily in relation to the delivery of
administrative notices;
• 29,879 thousand euros due to the Parent Company from Lazio Regional Authority, primarily for the delivery of
administrative notices.
• 28,701 thousand euros due from the Municipality of Milan to the Parent Company, primarily for the delivery of
administrative notices.
UNFRANKED MAIL DELIVERED ON BEHALF OF THIRD PARTIES AND OTHER VALUE
ADDED SERVICES
319,355 thousand euros of this item regards receivables deriving from the Bulk Mail service and other value added services, whilst a further 137,358 thousand euros regards receivables deriving from the delivery of unfranked mail on behalf of
third parties.
OVERSEAS CORRESPONDENTS
This item includes 218,349 thousand euros regarding postal services carried out by the Parent Company for overseas postal
operators, and 658 thousand euros relating to international telegraphic services.
PARCEL, EXPRESS COURIER AND EXPRESS PARCEL SERVICES
These receivables refer to services provided by SDA Express Courier SpA, and to the mailing of parcels by the Parent
Company.
OVERDRAWN CURRENT ACCOUNTS
These are amounts due to BancoPosta for temporarily overdrawn current accounts due almost entirely to the debit of recurring bank charges, and include accumulated sums that BancoPosta is in the process of recovering, and which have largely
been written down.
CASSA DEPOSITI E PRESTITI
This item includes 129,050 thousand euros in fees and commissions due for 2011 in relation to the management of postal
savings accounts by BancoPosta, with the remainder regarding previous years.
AMOUNTS DUE FOR OTHER BANCOPOSTA SERVICES
This refers to amounts due on insurance and banking services, on personal loans, on overdrafts and on mortgages sold on
behalf of third parties, totalling 77,314 thousand euros.
AMOUNTS DUE FOR THE MANAGEMENT OF GOVERNMENT SUBSIDIES
This refers to the services provided by BdM-MCC SpA in managing government subsidies.
USERS OF TELEGRAPHIC SERVICES
These receivables regard telegrams ordered by telephone (27,334 thousand euros) and other telegraphic services (12,919
thousand euros).
212
OTHER TRADE RECEIVABLES
This item includes:
• receivables deriving from unfranked mail on own behalf (89,325 thousand euros);
• receivables deriving from the lease of commercial and residential properties, and premises used as canteens and bars
(13,128 thousand euros);
• receivables deriving from the distribution of telephone directories (12,838 thousand euros);
• receivables generated by the Posta Easy service (12,065 thousand euros).
PROVISIONS FOR DOUBTFUL DEBTS
Changes in provisions for doubtful debts are as follows:
11.3 - Changes in Provisions for doubtful debts
Item
Balance at
Net
1 Jan 2010 provisions
Deferred
revenues
Uses
Balance
31 Dec 2010
Net
provisions
Deferred
revenues
Uses
Change
Balance at
in basis 31 Dec 2011
Public Sector entities
Private customers
8,259
153,640
182,527
1,922
6,609
44,058
3,213
570
(14)
(10,398)
(2,534)
10,167
153,064
224,621
(3,072)
(18,052)
9,554
3,212
502
(3,393)
2,473
-
7,095
140,697
231,284
For overdue interest
344,426
5,736
52,589
3,542
3,783
-
(12,946)
(1,729)
387,852
7,549
(11,570)
6,241
3,714
-
(3,393)
(1,617)
2,473
-
379,076
12,173
Total
350,162
56,131
3,783
(14,675)
395,401
(5,329)
3,714
(5,010)
2,473
391,249
A portion of Provisions for doubtful debts was released to the income statement in 2011 to reduce the item Other operating costs, reflecting the probable collection of items originally deemed unlikely to be recovered.
Net provisions (releases of provisions) for doubtful debts are accounted for in the income statement in Other operating
costs (note 36.1), or, if referring to receivables accruing during the year, via deferral of the related revenues.
Provisions regarding amounts due from Public Sector entities regard amounts that may be partially unrecoverable as a
result of legislation restricting public spending, delays in payment and problems at debtor entities. Provisions for doubtful
debts relating to private customers include 102,362 thousand euros attributable to BancoPosta’s operations, to cover the
risk of not recovering numerous individually immaterial amounts due from overdrawn current account holders.
PARENTS
Amounts receivable regard trade receivables due to the Parent Company from the Ministry of the Economy and Finance.
The following table shows a breakdown:
11.4 - Receivables due from parents
Item
Universal Service
Remuneration of current account deposits
Publisher tariff and electoral subsidies
Payment for delegated services
Payment for distribution of euro coins
Other
Provisions for doubtful debts due from parents
1,211,432
326,467
161,067
36,322
6,026
6,720
(82,712)
854,330
190,818
155,758
36,322
6,026
6,255
(72,855)
Total
1,665,322
1,176,654
Universal Service subsidies include 357,101 thousand euros representing the amount due for 2011, 364,463 thousand euros
in amounts accrued in 2010, 371,830 thousand euros in amounts accrued in 2009, 32,011 thousand euros in amounts
accrued in 2008 and 33,642, 43,722 and 8,663 thousand euros regarding residual amounts accrued in 2007, 2006 and 2005.
The balance includes the sum of 323,987 thousand euros deposited by the Ministry of the Economy and Finance, as of
December 2011, in a non-interest bearing escrow account held by the Parent Company at the Italian Treasury and for this
reason accounted for in Advances received. This sum cannot be released until the European Commission has ruled on the
Contratto di Programma (Planning Agreement) for 2009-2011, and until the MEF has replenished its cash holdings.
The remuneration of BancoPosta’s current account deposits refers entirely to amounts accruing in 2011 and almost entirely regards the deposit of funds deriving from accounts opened by Public Sector entities.
Electoral subsidies include 23,308 thousand euros accruing in 2011, with the remainder attributable to previous years. At
31 December 2011 almost all these receivables have not been budgeted for by the Government.
Payments for delegated services regard fees for treasury services carried out on behalf of the State under the recently
renewed Agreement with the MEF. 28,350 thousand euros regards amounts accruing in 2011, with 7,972 thousand euros
regards the residual amount due for 2008 and 2007.
Payment due for the distribution of euro coins refers to the supply and delivery of euro converters, carried out at the time
on behalf of the Cabinet Office. At 31 December 2011 these receivables have not been budgeted for by the Government.
11.5 - Changes in Provisions for doubtful debts due from parents
Balance at
1 Jan 2010
Provisions
Deferred
revenues
Uses
Balance at
31 Dec 2010
Provisions
Deferred
revenues
Uses
Balance at
31 Dec 2011
77,230
(4,375)
-
-
72,855
9,857
-
-
82,712
Provisions for doubtful
debts
Provisions for doubtful debts due from parents take account, overall, of the potential impact of legislation and other policies regarding the government’s management of the public finances, which could make it difficult to collect receivables
recognised on the basis of legislation, contracts and agreements in force at the time of recognition. The provisions reflect
the best estimate of unrecoverable amounts in view of the fact that these receivables have not been budgeted for by the
government and based on the related financial impact.
SUBSIDIARIES
Trade receivables due from unconsolidated subsidiaries are as follows:
11.6 - Receivables due from subsidiaries
Name
Poste Tributi ScpA
Docutel SpA
Kipoint SpA
5,089
987
419
157
2,421
495
289
56
Total
6,652
3,261
214
ASSOCIATES
This item amounts to 8,932 thousand euros (3,084 thousand euros at 31 December 2010) and primarily includes amounts
due from the associate, Docugest SpA.
JOINT VENTURES
This item amounts to 4,306 thousand euros (3,422 thousand euros at 31 December 2010) and includes the portion of a
receivable due from Italia Logistrica Srl not accounted for using the proportionate method of consolidation.
12 - OTHER RECEIVABLES AND ASSETS
12.1 - Other receivables and assets
31 December 2011
31 December 2010
Non-current
Item
assets
Prepaid taxes
483,767
Receivables from fixed-term contract
settlements
217,717
Amounts that cannot be drawn on
due to court rulings
Amounts due from social security agencies
and pension funds
Amounts due from ministries and
Public Sector entities for seconded staff
Amounts due from others
81
Provisions for doubtful debts due from others
(1,392)
Technical provisions attributable to reinsurers
17,917
7,436
Amounts due from current account holders
for stamp duty paid on their behalf
Third-party deposits in savings books
in Poste Italiane's name
2,937
Other amounts due from subsidiaries
-
Current
assets
333,196
Total
816,963
Non-current
assets
378,578
Current
assets
368,347
Total
746,925
83,113
300,830
227,536
68,069
295,605
99,179
99,179
-
117,189
117,189
90,288
90,288
-
43,931
43,931
13,528
93,887
(54,314)
13,528
93,968
(55,706)
85
(2,189)
11,283
106,803
(49,857)
11,283
106,888
(52,046)
18,888
-
18,888
17,917
7,436
8,333
6,197
17,316
-
17,316
8,333
6,197
6,430
6,430
-
5,996
5,996
168
2,937
168
2,957
-
34
2,957
34
Total
684,363
1,412,826
621,497
689,111
1,310,608
728,463
Prepaid taxes of 816,963 thousand euros include 565,000 thousand euros paid in advance by Poste Vita SpA for the financial years, 2007-2011, withholding and substitute tax paid on capital gains on life policies28 and advances paid to the tax
authorities by the Parent Company, including 216,796 thousand euros in stamp duty to be paid in virtual form in 2012, and
23,365 thousand euros as withholding tax on interest paid to current account holders for 2011.
Amounts due from staff under fixed-term contracts settlements consist of salaries to be recovered following the agreements of 13 January 2006, 10 July 2008 and 27 July 2010 between Poste Italiane SpA and the labour unions, regarding the
re-employment by court order of staff previously employed on fixed-term contracts. As shown in the following table, at 31
28. Of the total amount, 162,191 thousand euros, assessed on the basis of provisions at 31 December 2011, has yet to be paid and is accounted for in Other
taxes due (note 25.4).
December 2011 these receivables regard the total residual present value of amounts due from staff and the former pension fund, IPOST, totalling 300,830 thousand euros. Amounts due from staff are recoverable in the form of variable instalments, the last of which is due in 2031. Under an agreement reached with IPOST on 23 December 2009, contributions
relating to the agreements of 2006 and 2008 are to be recovered in straight-line six-monthly instalments, the last of which
is due in 2014.
12.2 - Receivables from fixed-term contract settlements
Item
Non-current
assets
Current
assets
Total
Face
value
Non-current
assets
Current
assets
Total
Face
value
Receivables
due from staff under agreement of 2006(1)
20,281
14,017
34,298
37,710
32,672
14,397
47,069
52,203
106,288
23,629
129,917
151,719
122,569
28,477
151,046
178,534
64,484
17,781
82,265
106,943
33,029
11,352
44,381
56,515
due from former IPOST(4)
26,664
27,686
54,350
55,372
39,266
13,843
53,109
55,372
217,717
83,113
300,830
227,536
68,069
295,605
Total
(1)
(2)
(3)
(4)
Discounted on the basis of the forward interest rate curve for government securities in issue at 30 June 2006.
Discounted on the basis of the forward interest rate curve for government securities in issue at 31 December 2008 in the case of individual agreements
entered into in 2008, and on the basis of the forward interest rate curve for government securities in issue at 30 June 2009 for individual agreements
entered into in the first half of 2009.
entered into in 2010, and on the basis of the forward interest rate curve for government securities in issue at 30 June 2011 for individual agreements entered
into in the first half of 2011.
Discounted on the basis of the forward interest rate curve for government securities in issue at 31 December 2009.
Amounts that cannot be drawn on due to court rulings include 86,100 thousand euros in amounts seized and not assigned
to creditors in the process of recovery and 13,079 thousand euros in amounts stolen from the Parent Company in
December 2007 as a result of an attempted fraud and currently deposited with an overseas bank. The latter sum may only
be recovered once completion of the necessary legal formalities enables it to be released and returned to Poste Italiane
SpA. The estimated time it will take to collect this receivable and the political risks linked to the country in which the depositary bank is based were taken into account when updating provisions for doubtful debts at 31 December 2011.
12.3 - Changes in Provisions for doubtful debts due from others
Balance at 1
Item
Jan 2010
for sundry services
11,451
Receivables from fixed-term
contract settlements
2,189
Other receivables
23,792
Total
37,432
Net
provisions
Uses
Balance at 31
Dec 2010
Net
provisions
Uses
Change in
basis
Balance at 31
Dec 2011
(984)
-
10,467
(380)
-
267
10,354
15,598
-
2,189
39,390
6,593
(2,820)
-
2,189
43,163
14,614
-
52,046
6,213
(2,820)
267
55,706
Provisions for amounts due from Public Sector entities regard accrued payments for the Parent Company’s staff seconded
to ministries and Public Sector entities.
216
13 - CASH AND DEPOSITS ATTRIBUTABLE TO BANCOPOSTA
13.1 - Cash and deposits attributable to BancoPosta
Item
Cash and valuables in hand
Cheques
Bank deposits
2,263,847
320
295,827
2,314,930
50
36,265
Total
2,559,994
2,351,245
Cash at post offices, relating exclusively to BancoPosta RFC, consists of cash deposits on postal current accounts, postal
savings products (Interest-bearing Postal Certificates and Post Office Savings Books) or advances obtained from the
Treasury to fund post office operations. This cash may only be used in settlement of these obligations. Cash and valuables
in hand are held at post offices (799,178 thousand euros) and companies that provide cash transportation services whilst
awaiting transfer to the Italian Treasury (1,464,669 thousand euros). Bank deposits relate to BancoPosta RFC‘s operations
and include amounts deposited in an account with the Bank of Italy to be used in interbank settlements, totalling 205,217
thousand euros.
14 - CASH AND CASH EQUIVALENTS
14.1 - Cash and cash equivalents
Item
Bank deposits and amounts held at the Italian Treasury
Deposits with the MEF
Total
1,063,097
829,399
10,959
1,903,455
239,115
840,624
13,406
1,093,145
BANK DEPOSITS AND AMOUNTS HELD AT THE ITALIAN TREASURY
Deposits with the Italian Treasury include a non-interest bearing escrow account of 323,987 thousand euros deposited by
the MEF in December 2011 as an advance on Universal Service subsidies due to the Parent Company. In addition, bank
deposits include 17,765 thousand euros that cannot be drawn on due to court rulings regarding various disputes.
DEPOSITS WITH THE MEF
Cash belonging to the Parent Company deposited in postal current accounts is subject to the same requirements as apply
to the investment of deposits by BancoPosta’s private current account holders. In the agreement with the MEF regarding
treasury services carried out by BancoPosta signed on 8 May 2009, extended with an addendum dated 29 September 2011
and valid until 30 June 2012, a portion of private current account deposits may be deposited in a specific account held at
the MEF (the so-called Buffer Account). This is done with the aim of ensuring a certain flexibility with regard to investments
in view of daily movements in amounts payable to current account holders. These deposits are remunerated at a floating
rate calculated, until 30 November 2011, on the basis of the average yield on Short-term Italian Treasury Certificates (BOT)
issued by the MEF in the relevant six-month period and, from 1 December 2011, on the basis of the ECB’s Main Refinancing
Operations (MRO) rate.
15 - NON-CURRENT ASSETS HELD FOR SALE
15.1 - Non-current assets held for sale
2011
2010
9,753
(3,706)
(465)
5,582
2,687
(937)
(465)
1,285
4,241
(188)
4,053
8,031
(3,734)
4,297
Cost
Impairments
Carrying amount
16,752
(6,652)
(465)
9,635
9,753
(3,706)
(465)
5,582
Cost
Total
7,293
(3,052)
4,241
12,997
(4,966)
8,031
Disposals(2)
Cost
Total
(294)
106
(188)
(5,931)
2,197
(3,734)
Cost
Impairments
Carrying amount
Reclassifications of non-current assets(1)
Disposals(2)
Reclassification from provisions for other liabilities and charges
Total changes
These assets refer to industrial buildings belonging to the Parent Company for which the related sales process has been
completed, and which are expected to fetch a total price of over 45 million euros. Recognition of this item has not resulted in charges recognised in the income statement.
218
16 - SHARE CAPITAL
The share capital consists of 1,306,110,000 ordinary shares with a par value of 1 euro each owned by the sole shareholder, the Ministry of the Economy and Finance.
Al 31 December 2011 all the shares in issue are fully subscribed and paid up. No preference shares have been issued and
the Parent Company does not hold treasury shares.
The following table shows a reconciliation of the Parent Company’s equity and profit/(loss) for the year with the consolidated amounts:
16.1 - Reconciliation of Equity
Equity
31 Dec 2011
Changes
in Equity
2011
Profit/(Loss)
for
2011
2,001,813
(2,309,951)
698,539
974,378
-
134,661
839,717
1,256
-
542
(109,909)
(72,010)
1,896
Financial statements of
Poste Italiane SpA
Equity
31 Dec 2010
Changes
in Equity
2010
729,035
4,076,920
-
205,040
634,677
714
-
(490)
1,204
-
(37,899)
(18,022)
-
(19,877)
717
-
1,179
986
-
193
(12,497)
-
(9,474)
(3,023)
-
3,524
(6,547)
(28,862)
(64,136)
15,790
664
-
2,158
1,661
28,627
-
(31,020)
(65,797)
(12,837)
664
-
16,395
12,623
-
(47,415)
(78,420)
(12,837)
664
- Effects of intercompany transactions
(11,316)
-
(9,423)
(1,893)
-
-
(1,893)
- Elimination of adjustments to value
of consolidated investments
160,932
-
10,519
150,413
-
61,671
88,742
- Amortisation until 1 Jan 2004/impairment
of goodwill arising from consolidation
(84,418)
-
-
(84,418)
-
(13,390)
(71,028)
-
-
(6,208)
6,208
-
2,824
3,384
2,611
-
(5,221)
7,832
-
689
7,143
2,848,202
(2,381,244)
846,381
4,383,065 (1,209,766)
1,017,921
4,574,910
13
-
-
-
13
- Undistributed profit/(loss)
of investee companies
- Investments accounted
- Balance of FV and CFH reserves
of investee companies
- Actuarial gains and losses on staff
termination benefits of investee companies
- Fees to be amortised attributable to
Poste Vita SpA and Poste Assicura SpA(*)
3,613,225 (1,192,730)
Profit/(Loss)
for
Equity
2010 1 Jan 2010
- Effects of contributions and transfers of
business units between Group companies:
EGI SpA
Postel SpA
PosteShop SpA
- Effect of tax consolidation arrangement
- Other consolidation adjustments
Equity attributable to owners
of the Parent
- Minority interests
(excluding profit/(loss)
- Minority interests in profit/(loss)
Minority interests in equity
Total consolidated equity
(*)
13
-
-
-
-
-
-
-
-
13
-
-
13
-
-
13
2,848,215
(2,381,244)
846,381
4,383,078 (1,209,766)
1,017,921
4,574,923
This adjustment regards deferment of fees payable for the distribution by Poste Vita SpA of certain Life products and by Poste Assicura SpA of Non-life
products. As distribution takes place via Poste Italiane SpA’s network, the deferment is eliminated.
17 - SHAREHOLDER TRANSACTIONS
The General Meeting of shareholders held on 14 April 2011 approved payment of dividends totalling 350,000 thousand
euros (based on a dividend per share of 0.27 euros).
18 - EARNINGS PER SHARE
The calculation of basic and diluted earnings per share (EPS) is based on the Group’s profit for the year. The denominator
used in the calculation of both basic and diluted EPS is represented by the number of the Parent Company’s shares in issue,
given that no financial instruments with potentially dilutive effects have been issued at 31 December 2011 or 31 December
2010.
19 - RESERVES
Reserves break down as follows:
19.1 - Reserves
Legal
reserve
Reserve for
BancoPosta
RFC
Fair value
reserve
Cash flow
hedge
reserve
Total
Increases/(Decreases) in fair value during the year
Tax effect of changes in fair value
Tax effect of transfers to profit or loss
Gains/(losses) recognised directly in Equity
Appropriation of remaining profit for 2009
148,351
38,640
-
634,588
(896,610)
285,972
(339,167)
107,422
(842,383)
-
(119,321)
86,659
(27,609)
33,252
(10,598)
81,704
-
663,618
(809,951)
258,363
(305,915)
96,824
(760,679)
38,640
Gains/(losses) recognised directly in Equity
186,991
38,948
-
1,000,000
(207,795)
(2,780,366)
905,062
(74,239)
20,792
(1,928,751)
-
(37,617)
(148,116)
47,920
(70,998)
22,862
(148,332)
-
(58,421)
(2,928,482)
952,982
(145,237)
43,654
(2,077,083)
38,948
1,000,000
225,939
1,000,000
(2,136,546)
(185,949)
(1,096,556)
RESERVE FOR BANCOPOSTA RFC
In order to identify ring-fenced capital for the purposes of applying the Bank of Italy’s prudential requirements and protecting creditors, on 26 February 2011 art. 2, paragraphs 17-octies et seq. of Law 10, which converted Law Decree 225 of 29
December 2010 into law, provided that Poste Italiane SpA’s shareholder should form ring-fenced capital to be used exclusively in relation to BancoPosta’s operations, as governed by Presidential Decree 144/2001. As a result of the ensuing resolution, which was approved by the General Meeting held on 14 April 2011 and filed with the Companies’ Register on 2
May 2011, the Parent Company has formed ring-fenced capital (“BancoPosta ring-fenced capital” or “BancoPosta RFC”),
and established the assets and contractual rights to be included in the ring-fence and By-laws governing its organisation,
management and control. BancoPosta RFC was provided with an initial reserve of 1 billion euros through the attribution of
Poste Italiane SpA's retained earnings. The Parent Company has also drawn up a new model for accounting unbundling,
extending the application of unbundling to all the financial statement components generated by revenue and cost components attributable to BancoPosta’s operations. This will result in preparation of a Separate Report, to be attached to the
financial statements from the reporting period under review. On 11 July 2011 the Court of Rome certified the absence of
220
any opposition from creditors or of any legal challenge to the above shareholder resolutions, thereby rendering them effective from 2 May 2011.
FAIR VALUE RESERVE
The fair value reserve regards changes in the fair value of Available-for-sale financial assets. During 2011 fair value losses
totalling 2,780,366 thousand euros included:
• 2,601,260 thousand euros regarding the net fair value loss on available-for-sale financial assets attributable to the Group’s
Financial Services, consisting of 2,610,542 thousand euros in losses on securities and 9,282 thousand euros in gains on
equity instruments (note 9.10);
• 105,216 thousand euros regarding the net fair value loss on available-for-sale financial assets attributable to the Group’s
Insurance Services described in note 9.13;
Postal and Business Services described in note 9.18.
CASH FLOW HEDGE RESERVE
The Cash flow hedge reserve, which primarily relates to the Parent Company, reflects changes in the fair value of the
effective portion of cash flow hedges outstanding.
In 2011 net fair value losses of 148,116 thousand euros reflected:
• a net loss of 148,110 thousand euros on the value of BancoPosta’s derivative financial instruments described in note 9.11;
• a loss of 6 thousand euros on the value of derivative financial instruments described in note 9.19.
20 - TECHNICAL PROVISIONS FOR INSURANCE BUSINESS
These provisions refer to the contractual obligations of the subsidiaries, Poste Vita SpA and Poste Assicura SpA, in respect
of their policyholders, inclusive of deferred liabilities resulting from application of the shadow accounting method. They
break down as follows:
20.1 - Technical provisions for insurance business
Item
Mathematical provisions
Outstanding claims provisions
Technical provisions where investment risk is transferred to policyholders
Other provisions
for operating costs
for deferred liabilities due to policyholders
Technical provisions for claims
37,830,568
341,987
9,483,264
(3,425,482)
89,111
(3,514,593)
30,095
31,989,508
332,531
10,003,902
(600,732)
87,077
(687,809)
13,659
Total
44,260,432
41,738,868
Details of changes are shown in the table regarding Changes in technical provisions for insurance business and other claims
expenses (note 31.1).
The Reserve for deferred liabilities due to policyholders includes portions of unrealised gains and losses attributable to policyholders under the shadow accounting method (note 2.3). Above all, the negative value of the provisions reflects the attribution to policyholders, in accordance with the relevant accounting standards, of unrealised losses on available-for-sale
financial assets at 31 December 2011 (note 9.13) and, to a residual extent, on financial instruments at fair value through
profit or loss.
Finally, at 31 March 2012, following a reduction in the yields on Italian government securities and in the related spread with
respect to German Bunds, the unrealised losses attributed to policyholders have been significantly reduced and the matching Provisions for deferred liabilities due to policyholders has a negative value of approximately 665 million euros, marking
a net change of approximately 2.85 billion euros compared with 31 December 2011.
21 - PROVISIONS FOR LIABILITIES AND CHARGES
Changes in provisions are as follows:
21.1 - Changes in Provisions for liabilities and charges in 2010
Balance at 31
Item
Dec 2009
Provisions for non-recurring charges
234,383
Provisions for disputes with third parties
179,103
Provisions for disputes with staff (1)
642,232
Provisions for staff costs
Provisions for restructuring charges
115,000
Provisions to the solidarity fund
Provisions for invalidated postal savings certificates
19,464
Provisions for taxation/social security contributions
14,456
Other provisions
132,355
Total
Overall analysis of provisions:
- non-current portion
- current portion
(1)
1,336,993
Provisions
55,772
91,395
76,610
166,702
58,706
24,979
Finance
costs
557
518
12
21
Released to
income
statement
(25,140)
(15,375)
(868)
(28)
(28,508)
Uses3)
(13,820)
(20,656)
(245,252)
(115,000)
(403)
(3,103)
(17,114)
Balance at 31
Dec 2010
251,195
235,024
472,722
166,702
58,706
19,579
11,337
111,733
474,164
1,108
(69,919)
(415,348)
1,326,998
1)
425,924
911,069
1,336,993
Net provisions of 49,061 thousand euros for staff costs and 26,681 thousand euros for service costs (legal assistance).
451,572
875,426
1,326,998
222
Balance at 31
Item
Dec 2010
251,195
235,024
Provisions for disputes with staff(1)
472,722
166,702
58,706
Provisions for invalidated postal
savings certificates
19,579
Provisions for taxation/social security
contributions(2)
11,337
Other provisions
111,733
Total
- current portion
(1)
(2)
1,326,998
Provisions
24,733
150,377
141,623
361,320
-
Finance
costs
932
-
Released to
income
statement
(21,271)
(21,449)
(19,886)
(106,218)
(58,706)
-
(1,316)
1,179
5,930
11
34
685,162
(339)
1)
Uses
(12,277)
(21,566)
(123,568)
(60,484)
-
Change in
basis of
consol.
155
371
-
Balance at 31
Dec 2011
242,380
343,473
471,262
361,320
-
(5,409)
(505)
-
12,349
(241)
(14,093)
(1)
(1,663)
4,053
12,285
105,994
(247,273) (220,064)
4,579
1,549,063
451,572
875,426
1,326,998
540,010
1,009,053
1,549,063
Including 300 thousand euros in taxation for the period.
Provisions for non-recurring charges regard operational risks connected with the Group’s financial and insurance services.
With regard to operational risks linked to BancoPosta’s operations, the liability regards, among other things, liabilities arising from the reconstruction of operating ledger entries at the time of Poste Italiane SpA’s establishment, liabilities deriving
from the provision of delegated services for social security agencies, fraud, compensation and adjustments to income for
previous years. Provisions for the year amount to 24,733 thousand euros and primarily regard the latter form of liability.
Uses of 12,277 thousand euros refer to liabilities identified or settled during the year. The release of 21,271 thousand euros
to the income statement reflects the non-occurrence of liabilities identified in the past. Provisions are based on the present value of the identified liabilities.
Provisions for disputes with third parties regard the present value of expected liabilities deriving from different types of
legal and out-of-court dispute with suppliers and third parties, the related legal expenses, and penalties and indemnities
payable to customers. Provisions for the year of 150,377 thousand euros reflect the estimated value of new liabilities measured on the basis of expected outcomes. A reduction of 21,449 thousand euros relates to the non-occurrence of liabilities
identified in the past, whilst a reduction of 21,566 thousand euros regards the value of disputes settled.
Provisions for disputes with staff regard liabilities that may arise following labour litigation and disputes of various types,
but largely attributable to the Parent Company’s use of fixed-term employment contracts. Net provisions of 121,737 thousand euros regard an updated estimate of the Parent Company’s liabilities and the related legal expenses, taking account
of both the overall value of negative outcomes (in terms of litigation and union agreements), and the application of Law 183
of 4 November 2010 (the so-called “Collegato lavoro”), which has introduced a cap on current and future compensation
payable to an employee in the event of "court-imposed conversion" of a fixed-term contract. Uses, amounting to 123,568
thousand euros, include amounts used to cover the cost of settling disputes, including 17,961 thousand euros in the form
of asset seizures by the Parent Company’s creditors. Provisions are based on the present value of identified liabilities, which
are deemed to be short term.
Provisions for staff costs of 361,320 thousand euros cover the best estimate of staff-related liabilities accruing during the
period, the exact amount of which will be known during 2012. Given that the economic and regulatory context does not
permit an accurate assessment of the related final amounts, provisions made for certain liabilities in 2011 have been classified as Provisions for staff costs, unlike in previous years when the liabilities were accounted for in Payables. The provisions decreased as a result of the non-occurrence of liabilities identified in the past (106,218 thousand euros) and the value
of disputes settled (60,484 thousand euros).
Provisions to the solidarity fund established in 2010 under an agreement between Poste Italiane SpA and the labour unions
were released in full to the income statement in September 2011 as the deadline for qualifying for extraordinary income
support provided for by the Fondo di Solidarietà (the Solidarity Fund) established by INPS as a result of Ministerial Decree
178 of 1 July 2005 has expired.
With regard to BancoPosta’s operations, provisions for expired and statute barred postal savings certificates have been
made to cover the cost of redeeming certificates relating to specific issues, the value of which was recognised in revenue
in the income statement 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 2011 the provisions represent the present value of total liabilities, based on a face value of 21,965 thousand euros, which are expected to be progressively paid off by 2043. Certificates with a total face value of 505 thousand euros were redeemed during
the period, whilst the probable timing of redemptions and the discount rate applied to the liabilities were updated on the
basis of historical trends over the last five years.
Provisions for taxation/social security contributions have been made to cover potential future tax liabilities.
The other provisions cover probable liabilities of various types, including: estimated liabilities deriving from the risk that specific legal actions to be undertaken in order to reverse seizures of the Parent Company’s assets may be unable to recover
the related amounts; claims for rent arrears on properties used free of charge by the Parent Company, and claims for payment of accrued interest expense due to certain suppliers. Provisions for the year of 5,930 thousand euros primarily refer
to the last two types of liability. The provisions decreased during 2011, primarily due to the reclassification of liabilities for
seizures to Provisions for disputes with staff.
22 - STAFF TERMINATION BENEFITS AND PENSION PLANS
Following the reform of supplementary pension provision, from 1 January 2007 companies with over 50 employees must
pay vested staff termination benefits into a supplementary pension fund or into a Treasury Fund set up by INPS (should the
employee have exercised the specific option provided for by the new legislation). These benefits qualify as a defined contribution plan and thus represent an expense to be recognised at face value in staff costs. In the case of these Group companies, staff termination benefits vesting up to 31 December 2006 remain with the company and continue to represent
accumulated liabilities qualifying as a defined benefit plan, for which actuarial calculation is necessary. A similar treatment
is applied to vested staff termination benefits at Group companies with less than 50 employees.
Pension plans refer entirely to BdM-MCC.
The following changes in staff termination benefits took place in 2011 and 2010:
22.1 - Changes in provisions for staff termination benefits and pension plans
2011
Staff termination
benefits
Change in basis
Pension
plans
1,323,481
3,192
2010
Total
Staff termination
benefits
Pension
plans
Total
-
1,323,481
1,445,954
-
1,445,954
3,875
7,067
-
-
-
Current service cost
661
-
661
502
-
502
Interest component
63,863
71
63,934
61,280
-
61,280
Effect of actuarial gains/(losses)
Uses for the year
Reduction due to fixed-term contracts
settlement of 2010
(63,116)
(44)
(63,160)
(70,003)
-
(70,003)
(133,509)
(203)
(133,712)
(111,746)
-
(111,746)
(2,002)
-
(2,002)
(2,506)
-
(2,506)
1,192,570
3,699
1,196,269
1,323,481
-
1,323,481
224
The current service cost is recognised in Staff costs (note 34.1), whilst the interest component is recognised in Finance
costs (note 37.2).
During 2011 net uses of provisions for staff termination benefits amounted to 133,712 thousand euros, represented by benefits paid, totalling 130,998 thousand euros, and substitute tax of 6,114 thousand euros, net of additions of 3,400 thousand
euros regarding the transfer of provisions for disputes with staff formerly on fixed-term contracts who have been reemployed by the Parent Company.
The main actuarial assumptions applied in calculating staff termination benefits are as follows:
Discount rate
Average staff turnover29 (summary data)
2011
2010
4.60%
0.93%
4.55%
1.08%
A number of actuarial assumptions were revisited during preparation of the financial statements for the year ended 31
December 2011 to take account of the macroeconomic situation and the effect of new legislation regarding the conditions
that need to be met to qualify for retirement. A new discount rate was also adopted and not linked to movements in the
spreads applicable to Italian government securities, which during 2011 could have improperly reduced the present value of
the liability.
23 - FINANCIAL LIABILITIES
23.1 - Financial liabilities
31 December 2011
Non-current
liabilities
Current
liabilities
Payables deriving from postal current accounts
Financial liabilities at fair value
59,204
Borrowings
1,282,360
Bonds
585,347
Loans from Cassa Depositi e Prestiti
226,417
Bank borrowings
456,475
Other borrowings
14,121
603,327
Cash flow hedges
210,650
Fair Value hedges
392,489
188
Financial liabilities due to subsidiaries
712
Total
Item
1,945,603
Total
Current
liabilities
Total
37,144,907
3,559,216
780,272
306,305
2,447,504
25,135
39,448
16,756
7,085
15,607
550
2,461,943
37,144,907
59,204
4,841,576
1,365,619
532,722
2,903,979
39,256
642,775
227,406
399,574
15,795
550
2,462,655
721,564
1,385,707
750,785
371,123
250,000
13,799
83,080
45,726
37,354
912
36,984,667
1,297,134
19,364
141,544
1,089,323
46,903
7,422
1,496
5,926
545
2,000,303
36,984,667
721,564
2,682,841
770,149
512,667
1,339,323
60,702
90,502
47,222
43,280
545
2,001,215
43,206,064
45,151,667
2,191,263
40,290,071
42,481,334
29. Frequency of early termination of employment due to resignations and dismissals.
31 December 2010
Non-current
liabilities
PAYABLES DERIVING FROM POSTAL CURRENT ACCOUNTS
These represent BancoPosta’s direct deposits. They include net amounts accrued at 31 December 2011 and settled with
customers in January 2012.
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE
Financial liabilities at fair value through profit or loss are linked to investment contracts issued by the insurance company,
Poste Vita SpA. These liabilities have decreased following redemptions of 663,031 thousand euros, and have increased due
to the change in fair value, amounting to 671 thousand euros (note 32.1).
BORROWINGS
Other than the guarantees described in the following notes, borrowings are unsecured and are not subject to financial
covenants, requiring Group companies to comply with certain financial ratios, or maintain a certain level of rating.
Bonds
Bonds regard:
• 769,841 thousand euros in fixed rate bonds issued by the Parent Company, paying coupon interest of 5.25% and with a
par value of 750 million euros. The bonds, which were issued in two tranches in 2002, are listed on the Luxembourg Stock
Exchange and were placed in the form of a public offering to institutional investors. These 10-year bonds are to be
redeemed in a lump sum in July 2012. The current portion of the loan represents accrued interest expense. The fair value
of the bonds at 31 December 2011 is 747,630 thousand euros (780,953 thousand euros at 31 December 2010). These
bonds are subject to standard negative pledge clauses30.
• 595,778 thousand euros relating to six bond issues by BdM-MCC SpA, listed on the MOT. These are floating rate or
rendered so via fair value hedges (note 9.12), have a face value of 643,347 thousand euros and remaining principal of at
the end of the period of 537,601 thousand euros. As a result of the above hedges, at 31 December 2011 the carrying
amount of the bonds takes account of a value adjustment of 48,936 thousand euros (32,126 thousand euros at the date
of acquisition of the bank). The fair value of these bonds at 31 December 2011 is 491,907 thousand euros.
This item refers to fixed rate loans issued to the Parent Company by Cassa Depositi e Prestiti. The laws authorising the
expenditure financed by the loans also establish the methods of repayment, as shown below.
23.2 - Details of loans
Loans to be repaid
in full by
Poste Italiane
Loans with principal
to be repaid by
parent
and interest to be
repaid by parent
Interest
2011
Total
loans
Law 15/74
6,757
-
-
507
7,264
Law 34/74
137
-
-
10
147
Law 227/75 (serv. acc.)(1)
-
17,706
-
1,480
19,186
Law 39/82 (subsequent changes
postal service)(1)
-
283,028
-
10,472
293,500
Law 887/84(1)
-
-
203,378
7,525
210,903
Law 41/86(1)
-
1,661
-
61
1,722
6,894
302,395
203,378
20,055
532,722
Legislation
Total
(1)
Loans to be repaid by the Ministry of the Economy and Finance (principal: 505,773 thousand euros).
30. A commitment given to creditors by which a borrower undertakes not to give senior security to other lenders ranking pari passu with the pre-existing
creditors, unless the same degree of protection is offered to them also.
226
The outstanding amount payable of 532,722 thousand euros includes the instalment maturing at 31 December 2011,
totalling 161,600 thousand euros inclusive of interest, and paid in early 2012.
The fair value of the loans, inclusive of accrued interest, is 533,136 thousand euros (524,854 thousand euros at 31
December 2010).
The outstanding principal assigned by law to the Ministry of the Economy and Finance is offset by a receivable, accounted for in Financial assets, due from the parent. Collection of the amount receivable is linked to the repayment schedules
for the loans (note 9.16).
Bank borrowings
These items, which primarily regard the Parent Company, break down as follows:
23.3 - Bank borrowings
31 December 2011
Item
Non-current
liabilities
Current
liabilities
31 December 2010
Total
Non-current
liabilities
Current
liabilities
Total
Repurchase agreements
Floating rate loan from
DEPFA Bank maturing 30 Sept 2013
EIB fixed rate loan maturing 11 Apr 2018
EIB floating rate loan maturing 2017
Short-term borrowings
Accrued interest expense
-
2,362,858
2,362,858
-
775,694
775,694
250,000
200,000
6,475
-
15,036
50,000
15,588
4,022
250,000
200,000
21,511
50,000
15,588
4,022
250,000
-
300,000
12,155
1,474
250,000
300,000
12,155
1,474
Total
456,475
2,447,504
2,903,979
250,000
1,089,323
1,339,323
The value of the above financial liabilities approximates to fair value.
Outstanding liabilities for repurchase agreements at 31 December 2011 total 2,362,858 thousand euros and regard 21 contracts with a notional amount of 2,598 million euros, entered into with major financial institutions to optimise investments
with respect to short-term movements in the current account deposits of BancoPosta’s private customers (1,933,161 thousand euros) and to optimise returns and meet temporary liquidity requirements (429,697 thousand euros).
The EIB loan of 21,511 thousand euros regards BdM-MCC SpA and includes 12,887 thousand euros in payments falling due
or already due and in the process of being paid. In the event of default, the loan from BdM-Mcc SpA is assigned to the EIB
for collection from the ultimate debtor.
Bank borrowings are subject to standard negative pledge clauses.
Drawdowns on the Group’s total committed and uncommitted lines of credit, totalling 1,263,246 thousand euros, amount
to 65,588 thousand euros. The lines of credit are unsecured.
Other borrowings
This item regards:
• 20,302 thousand euros in fixed rate loans issued to the Parent Company by CPG Società di Cartolarizzazione arl. The two
loans, originally totalling 309,874 thousand euros, denominated “Logistics 2002” and “Layout 2002”, were sold without
recourse by Cassa Depositi e Prestiti to C.P.G. Società di Cartolarizzazione arl in 2003. These ten-year loans were used to
finance certain projects. The outstanding debt of 20,302 thousand euros at 31 December 2011, inclusive of the related
interest, was repaid early in 2012;
• 1,414 thousand euros relating to a loan granted to BdM-MCC SpA by Cassa Depositi e Prestiti SpA; also in this case, in
the event of default, the loan from BdM-Mcc SpA is assigned to Cassa Depositi e Prestiti SpA for collection from the
ultimate debtor;
• 17,540 thousand euros regarding the outstanding principal due on financial liabilities due to suppliers of durable goods
acquired under finance leases, with the right to acquire ownership at the end of the lease, as shown below.
23.4 - Reconciliation of total future payments and present value
31 December 2011
Installments from 1 Jan
2012 to maturity
Interest
Present
value
Properties used in operations
Other assets
Industrial patents, intellectual property rights,
concessions, licences, trademarks and similar
12,502
55
2,025
5
10,477
50
7,506
493
7,013
Total
20,063
2,523
17,540
Item
23.5 - Term to maturity of borrowings
Item
within 12 months
31 December 2011
1 - 5 years
after 5 years
Total
Other assets
Industrial patents, intellectual property rights,
concessions, licences, trademarks and similar
867
10
3,888
40
5,722
-
10,477
50
3,542
3,471
-
7,013
Total
4,419
7,399
5,722
17,540
The changes in this item during 2011 is described in note 9.
FINANCIAL LIABILITIES DUE TO SUBSIDIARIES
These liabilities regard intercompany current accounts paying interest at market rates with subsidiaries not consolidated on
a line-by-line basis.
OTHER FINANCIAL LIABILITIES
Other financial liabilities primarily regard BancoPosta’s operations.
228
23.6 - Other financial liabilities
31 December 2011
31 December 2010
Non-current
liabilities
Current
liabilities
Total
Non-current
liabilities
Current
liabilities
Total
prepaid cards
domestic and international money transfers
cashed cheques
endorsed cheques
amounts to be credited to customers
tax collection and road tax
other amounts payable to third parties
guarantee deposits
payables for items in process
other
712
724,539
791,642
300,574
211,694
114,296
102,388
59,354
80,504
53,598
23,354
724,539
791,642
300,574
211,694
114,296
102,388
59,354
80,504
53,598
24,066
912
644,217
530,463
178,982
179,688
161,031
138,098
38,194
39,720
61,990
27,920
644,217
530,463
178,982
179,688
161,031
138,098
38,194
39,720
61,990
28,832
Total
712
2,461,943
2,462,655
912
2,000,303
2,001,215
Item
Amounts due on prepaid cards represent amounts due to Postepay (717,878 thousand euros) and Pensione card (6,661
thousand euros) customers who have topped up their prepaid cards. Compared with 31 December 2010, the increase in
the balance reflects a rise in the number of cards in circulation (8.2 million, compared with 6.8 million).
Amounts due on domestic and international money transfers represent the exposure to third parties for:
• domestic postal orders totalling 378,269 thousand euros (259,462 thousand euros at 31 December 2010);
• domestic and International transfers totalling 410,955 thousand euros (270,214 thousand euros at 31 December 2010);
• Moneygram transfers totalling 2,418 thousand euros (787 thousand euros at 31 December 2010).
Cashed cheques represent the exposure to customers for cheques paid into Post Office Savings Books but not yet credited. Endorsed checks represent the exposure to customers for endorsed checks in circulation.
Amounts to be credited to customers primarily regard:
• amounts to be paid to the beneficiaries of debits pre-authorised by customers, totalling 46,207 thousand euros;
• amounts in the process of payment in relation to maturing insurance policies issued by the subsidiary, Poste Vita SpA,
totalling 20,272 thousand euros;
• amounts in the process of payment to overseas holders of Postal Savings Certificates and Post Office Savings Books,
• amounts to be paid for BancoPosta promotions, totalling 9,558 thousand euros;
• payments of pre-printed bills in the process of being credited to beneficiaries’ accounts, totalling 9,072 thousand euros.
Tax collection and road tax payables regard amounts due to collection agents, the tax authorities and regional authorities
for payments made by customers.
Other amounts payable to third parties primarily regard endorsed cheques to be issued and amounts payable to banks for
the use of prepaid cards issued by the Parent Company.
Amounts payable for guarantee deposits include 70,984 thousand euros paid to BdM-MCC by counterparties with which it
has entered into interest rate swaps (collateral provided by specific Credit Support Annexes) for fair value hedging purposes and 9,520 thousand euros received by the Parent Company from counterparties with which it has entered into reverse
repo transactions for fixed income securities (collateral provided by specific Global Master Repurchase Agreements).
Payables deriving from items in process include amounts available to customers in relation to payments made on behalf of
public entities and other forms linked to BancoPosta’s operations.
Other financial liabilities include 7,057 thousand euros payable by Poste Vita SpA pursuant to Law 166/2008, which has
extended application of the regulations governing dormant accounts to insurance companies, including the requirement to
pay the value of any dormant policies into the specific fund established by the MEF.
ANALYSIS OF NET DEBT/(FUNDS)
The Group’s net debt/(funds) at 31 December 2011 and 31 December 2010 is as follows.
23.7 - Net debt/(funds)
Item
Note
Balance at 31
December 2011
of which
related party
transactions
Balance at 31
December 2010
of which
related party
transactions
45,151,667
37,144,907
59,204
1,365,619
532,722
2,903,979
39,256
642,775
2,463,205
880
532,722
10,026
42,481,334
36,984,667
721,564
770,149
512,667
1,339,323
60,702
90,502
2,001,760
1,002
512,667
8,008
Postal current account deposits
Financial assets designated at fair value
Bonds
Bank borrowings
Other borrowings
[23.1]
[20.1]
44,260,432
-
41,738,868
-
Financial assets
Financial instruments designated at fair value
[9.1]
(83,732,550)
(9,342,897)
(14,363,892)
(50,152,016)
(8,376,765)
-
(81,824,869)
(8,071,257)
(14,768,213)
(47,570,728)
(7,630,909)
(100,825)
(9,641,455)
(232,290)
-
(11,197,846)
(216,825)
-
(17,917)
-
(8,333)
-
[12.1]
Net financial liabilities/(assets)
5,661,632
2,387,000
[13.1]
(2,559,994)
-
(2,351,245)
-
[14.1]
(1,903,455)
(829,399)
(1,093,145)
(840,624)
Net debt/(funds)
(1,198,183)
(1,057,390)
Cash and cash equivalents includes the sum of 323,987 thousand euros deposited by the Ministry of the Economy and
Finance, as of December 2011, in a non-interest bearing escrow account as an advance on Universal Service subsidies and
a total of 17,765 thousand euros that cannot be drawn on due to court rulings regarding various disputes (note 14.1).
The change from net funds to net debt in 2011 reflects the impact of the downgrade of Italy’s credit rating on the price of
the Group’s holdings of available-for-sale financial assets.
230
24 - TRADE PAYABLES
24.1 - Trade payables
Item
Amounts due to suppliers
Prepayments and advances from customers
Other trade payables
Amounts due to joint ventures
Amounts due to subsidiaries
Amounts due to associates
1,431,136
547,225
15,805
11,183
6,551
4,418
1,417,357
187,450
52
10,213
4,034
3,457
Total
2,016,318
1,622,563
AMOUNTS DUE TO SUPPLIERS
24.2 - Amounts due to suppliers
Item
Italian suppliers
Overseas suppliers
Overseas correspondents(1)
1,276,498
11,385
143,253
1,285,581
10,066
121,710
Total
1,431,136
1,417,357
(1)
The amount due to overseas correspondents regard fees payable to overseas postal operators and companies in return for postal and telegraphic services
received.
PREPAYMENTS AND ADVANCES FROM CUSTOMERS
This item refers to amounts received from customers as prepayment for the following services to be rendered:
24.3 - Prepayments and advances from customers
Item
Advances from parent (note 11.4)
Prepayments from overseas correspondents
Mechanized franking
Unfranked mail
Postage-paid mailing services
Other services
323,987
92,697
86,412
26,294
9,038
8,797
76,650
63,701
23,782
10,025
13,292
Total
547,225
187,450
AMOUNTS DUE TO JOINT VENTURES
Amounts payable to joint ventures, totalling 11,183 thousand euros (10,213 thousand euros at 31 December 2010) primarily include the portion of a payable due to Italia Logistrica Srl not accounted for using the proportionate method of consolidation.
AMOUNTS DUE TO SUBSIDIARIES
This item represents amounts due to unconsolidated subsidiaries, as shown in the following table:
24.4 - Amounts due to subsidiaries
Item
Docutel SpA
Poste Tributi ScpA
Kipoint SpA
1,541
2,321
1,897
792
742
1,591
1,545
156
Total
6,551
4,034
AMOUNTS DUE TO ASSOCIATES
Amounts payable to associates, totalling 4,418 thousand euros (3,457 thousand euros at 31 December 2010) primarily
include amounts due to Docugest SpA.
25 - OTHER LIABILITIES
25.1 - Other liabilities
31 December 2011
Item
Amounts due to staff
Amounts due to social security agencies
Non-current
liabilities
-
Current
liabilities
622,310
31 December 2010
Total
622,310
Non-current
liabilities
-
Current
liabilities
852,920
Total
852,920
51,628
385,929
437,557
54,217
423,342
477,559
Other tax liabilities
-
373,613
373,613
-
317,617
317,617
Amounts due to the parent
-
12,140
12,140
-
12,140
12,140
Other amounts due to joint venture
-
20
20
-
-
-
Other amounts due to associates
6
-
6
6
-
6
Other amounts due to subsidiaries
Sundry payables
Accrued expenses and deferred income
Total
-
4
4
-
-
-
77,446
95,799
173,245
76,447
57,225
133,672
6,494
44,329
50,823
9,574
40,245
49,819
135,574
1,534,144
1,669,718
140,244
1,703,489
1,843,733
232
AMOUNTS DUE TO STAFF
These items primarily regard accrued amounts that have yet to be paid at 31 December 2011. The following table shows a
breakdown:
25.2 - Amounts due to staff
Item
fourteenth month salaries
incentives
accrued vacation pay
other amounts due to staff
235,393
177,441
81,691
127,785
236,969
388,144
75,733
152,074
Total
622,310
852,920
As reported in note 21.2, compared with the previous year, certain liabilities accounted for in Amounts due to staff are
reflected in Provisions for staff costs, in view of the fact that they have been measured at the date of preparation of the
financial statements on the basis of best estimates, given that uncertainty regarding the economic and regulatory context
that could have an influence on the amount to be paid on settlement.
AMOUNTS DUE TO SOCIAL SECURITY AGENCIES
25.3 - Amounts due to social security agencies
31 December 2011
Non-current
liabilities
Current
liabilities
Former IPOST
INPS
INAIL
Pension funds
Amounts due to the Solidarity Fund
Other agencies
87
51,541
-
Total
51,628
Item
31 December 2010
Total
Non-current
liabilities
Current
liabilities
Total
246,811
49,521
2,742
68,184
2,748
15,923
246,811
49,608
54,283
68,184
2,748
15,923
81
54,136
-
286,283
44,183
2,602
70,797
3,573
15,904
286,283
44,264
56,738
70,797
3,573
15,904
385,929
437,557
54,217
423,342
477,559
Amounts due to the former IPOST regard pension and social security contributions due to the institute on behalf of the
Group’s employees, calculated on both the salaries paid as of 31 December 2011 and accrued amounts due, as reported in
the item Amounts payable to staff.
Amounts due to INPS primarily regard provisions for vested staff termination benefits to be paid into the agency’s Treasury
fund at 31 December 2011.
Amounts due to INAIL include 54,136 thousand euros in charges for injury compensation paid to employees of the Parent
Company for injuries occurring up to 31 December 1998. This amount, originally totalling 82,633 thousand euros, is
repayable by Poste Italiane SpA in thirty years from 31 December 1999, based on a straight-line amortisation schedule and
an annual interest rate of 2.5%.
Amounts payable to pension funds regard sums due to FondoPoste and other pension funds following the decision by certain Group employees to join a supplementary fund.
Amounts due from the Parent Company to the Solidarity Fund set up by INPS regard amounts designed to cover redundancy payments and income support for employees who, having qualified for participation, decide to take voluntary early
retirement.
OTHER TAX LIABILITIES
25.4 - Other tax liabilities
Item
Tax due on insurance provisions
Withholding tax on employees’ and consultants’ salaries
VAT payable
Withholding tax on postal current accounts
Substitute tax
Stamp duty
Other taxes due
162,191
104,584
25,952
24,320
19,934
14,160
22,472
147,220
90,357
27,107
23,365
3,645
4,756
21,167
Total
373,613
317,617
Tax due on insurance provisions regards Poste Vita SpA and is described in note 12.1.
Amounts due on salaries paid to employees and consultants regards withholding tax paid to the tax authorities by Group
companies in January and February 2012.
Withholding tax due on postal current accounts refers to amounts withheld by BancoPosta on interest accrued during the
year on customers’ current accounts.
Substitute tax represents the balance payable by Group companies on the revaluation of staff termination benefits in 2011.
Stamp duty is payable to the tax authorities by the Parent Company as duty to be paid in virtual form. The balance includes
the adjustment paid in 2012 pursuant to note 3-bis of art. 13 of the Tariffs provided for by Presidential Decree 642/1972.
AMOUNTS DUE TO THE PARENT
This item refers to 12,140 thousand euros due to the Ministry of the Economy and Finance for pensions paid by the Ministry
to former employees of the Parent Company for the period 1 January to 31 July 1994.
SUNDRY PAYABLES
25.5 - Sundry payables
31 December 2011
Non-current
liabilities
Current
liabilities
Sundry payables attributable to BancoPosta
Guarantee deposits
Other
65,581
10,315
1,550
Total
77,446
Item
31 December 2010
Total
Non-current
liabilities
Current
liabilities
Total
17,833
2,221
75,745
83,414
12,536
77,295
66,467
9,697
283
17,281
662
39,282
83,748
10,359
39,565
95,799
173,245
76,447
57,225
133,672
Sundry payables attributable to BancoPosta’s operations primarily regard items from previous years in the process of settlement.
Guarantee deposits primarily regard amounts collected from the Parent Company’s customers as a guarantee of payment
for certain services (postage-paid mailing services, the use of post office boxes, lease contracts, telegraphic service contracts, etc.).
234
Other payables include 28,008 thousand euros regarding the collection of receivables formerly transferred from BdM-MCC
SpA to Unicredit SpA.
ACCRUED EXPENSES AND DEFERRED INCOME FROM TRADING TRANSACTIONS
The nature and composition of accrued expenses and deferred income is as follows:
25.6 - Accrued expenses and deferred income
31 December 2011
Non-current
liabilities
Current
liabilities
Accrued expenses
Deferred income
6,494
Total
6,494
Item
31 December 2010
Total
Non-current
liabilities
Current
liabilities
Total
4,872
39,457
4,872
45,951
9,574
4,613
35,632
4,613
45,206
44,329
50,823
9,574
40,245
49,819
Deferred income primarily regards:
• 16,488 thousand euros in prepaid telephone calls sold as of 31 December 2011 by Poste Mobile SpA and not yet used
by customers;
• 13,628 thousand euros in fees on Postemat cards collected in advance by the Parent Company;
• 5,986 thousand euros (of which 5,671 thousand euros relating to income accruing after 2011) regarding the Parent
Company’s advance collection of the rental on a thirty-year lease of a pneumatic postal machine in Rome;
• 5,046 thousand euros relating to income accruing to the Parent Company in future years as a result of the Grand Premio
BancoPosta loyalty programme, which grants award credits to customers to reward loyalty. As required by IFRIC 13,
recognition of the related revenue is deferred until the Company has fulfilled its obligations to deliver awards to customers
or, if the award credits must be used within a limited period of time, until the credits are no longer valid.
26 - REVENUES FROM SALES AND SERVICES
Revenues from sales and services of 10,108,572 thousand euros break down as follows:
26.1 - Revenues from sales and services
Item
Postal Services
Financial Services
Other sales of goods and services
Total
2011
2010
4,791,826
4,878,020
438,726
5,049,529
4,664,789
419,191
10,108,572
10,133,509
POSTAL SERVICES
Revenues from Postal Services break down as follows:
26.2 - Postal Services
Item
2011
2010
Unfranked mail
Mechanized franking by third parties and at post offices
Stamps
Express parcel and express courier services
Integrated services
Postage-paid mailing services
Overseas mail and parcels
Services provided to ISTAT for General Census
Telegarms and online services
Innovative services
E-procurement services
Logistics services
Other postal services
1,587,865
1,183,571
416,656
310,722
279,595
161,930
117,438
91,690
55,240
49,513
12,194
29,777
115,229
1,663,081
1,274,839
455,352
286,526
284,270
201,752
112,746
62,382
59,295
31,075
30,337
98,853
Total market revenues
4,411,420
4,560,508
357,101
23,305
364,463
124,558
4,791,826
5,049,529
Universal Service subsidies
Publisher and electoral tariff subsidies(1)
Total
(1)
Subsidies to compensate for tariffs discounted in accordance with the law.
Unfranked mail includes revenues from the mailing of correspondence by large customers from certain network centres
and enabled post offices, including mailings carried out under the Bulk Mail formula.
Mechanized franking by third parties or at post offices, which refers entirely the Parent Company, regards revenues from
the mailing of correspondence franked directly by customers or at post offices using a franking machine.
Stamp sales refer to the sale of postage stamps through post offices and authorised outlets and sales of stamps used for
franking on credit.
Express parcel and express courier services regard services provided by the subsidiary, SDA Express Courier SpA.
Integrated services, which refer entirely to the Poste Italiane SpA, regard the delivery of administrative notices and fines,
amounting to 246,507 thousand euros, the integrated notification service for legal process carried out on behalf of UNEP
(Notifications, Enforcements and Complaints Offices), totalling 30,625 thousand euros, and revenues deriving from the
agreement with the tax authorities regarding bulk and registered services, amounting to 2,463 thousand euros.
Postage-paid mailing services, which refer entirely to the Parent Company, regard revenues from the delivery of periodicals
and mail-order goods on behalf of publishers who benefit from preferential rates, as provided for by Law 46 of 27 February
2004, which converted Legislative Decree 353 of 24 December 2003.
Overseas mail and parcels, which refer to Poste Italiane SpA, relate to revenues from the international exchange of such
items.
Telegrams and online services primarily regard the telegram service provided by the Parent Company by phone or at post
offices, and amounting to 30,737 thousand euros and 10,926 thousand euros, respectively.
Revenues from innovative services, referring to Postel SpA, include 18,265 thousand euros from the door-to-door service,
14,325 thousand euros from direct mailing, 28,547 thousand euros from commercial printing and 5,419 thousand euros
from other “added value” services.
E-procurement services refer entirely to Postel SpA and regard the distribution and supply of stationery, forms and printed
documents.
236
Logistics services refer entirely to Italia Logistica Srl.
Universal Service Obligation subsidies regard the subsidies paid by the Ministry of the Economy and Finance to cover the
costs of fulfilling the Universal Service Obligation (USO). Subsidies of 357,101 thousand euros were calculated on the basis
of the Contratto di Programma (Planning Agreement) for the three-year period 2009-2011, which is awaiting clearance from
the European Commission.
Publisher and electoral tariff subsidies include solely regard amounts paid by the State to cover reductions and preferential
prices granted to election candidates under Law 515/93. This amount has currently not been budgeted for by the MEF.
With regard to publisher tariff subsidies, following the issue of the Ministry for Economic Development Decree of 30 March
2010, which has limited the application of publisher tariff subsidies until 31 March 2010, and of the joint Ministry for
Economic Development Decree-MEF Decree of 21 October 2010, which governs the tariffs to be applied to publishers by
Poste Italiane from 1 September 2010, no subsidies were received in 2011.
FINANCIAL SERVICES
Revenues from Financial Services, which regard the Parent Company’s BancoPosta RFC and BdM-MCC SpA, break down
as follows:
26.3 - Financial Services
Item
2011
2010
Fees for collection of postal savings deposits
Income from investment of postal current account deposits
Commissions on bills processed
Other revenues from current account services
Income from delegated services
Distribution of loan products
Fees for issue and use of prepaid cards
Fees from securities placement and trading
Money transfers
Fees for the management of public funds and other income from investments
Securities custody
Other products and services
1,628,775
1,504,050
594,794
480,701
179,244
157,681
95,796
89,048
70,735
21,867
21,437
33,892
1,375,716
1,557,000
622,110
492,939
194,778
174,975
88,195
26,246
77,107
22,434
33,289
Total
4,878,020
4,664,789
Income from the investment of postal current account deposits breaks down as follows:
26.4 - Income from the investment of postal current account deposits
Item
Income from investment in securities
Interest income on HTM financial assets
Interest income on AFS financial assets
Interest income on securities held for trading
Interest income on asset swaps of AFS financial assets
Income from deposits held with the MEF
Remuneration of current account deposits (deposited with the MEF)
Net remuneration of own liquidity recognised in finance income and costs
Total
2011
2010
1,316,621
605,147
659,802
51,672
1,188,665
582,413
571,808
677
33,767
332,900
332,900
196,140
196,140
(20,746)
(9,089)
1,628,775
1,375,716
Income from investments in securities
Interest income on securities derives from the investment of deposits paid into postal current accounts by private
customers. The total includes the impact of the cash flow hedges described in note 9.11.
Income from deposits held with the MEF
Remuneration of postal current account deposits represents accrued interest for the year on amounts deposited by Public
Sector entities and, to a lesser extent, returns on amounts deposited in the so-called Buffer account with the Ministry of
the Economy and Finance, as described in note 14. The floating rate used to calculate remuneration of the above deposits
and the rate used to calculate interest on the Buffer account are those provided for in the specific agreements with the
MEF.
Net remuneration of the Group’s own liquidity deposited in postal current accounts
This item (note 14) is shown separately in Finance income and costs (note 37.1), unlike income from the investment of
third-party deposits by BancoPosta.
Fees for the collection of postal savings deposits
Fees for the collection of postal savings deposits regard payment for managing the issue and redemption of Postal Savings
Certificates and payments into and withdrawals from Post Office Savings Books. This service is provided by Poste Italiane
SpA on behalf of Cassa Depositi e Prestiti under the Agreement of 3 August 2011, covering the three-year period 2011-2013,
as amended on 12 December 2011 and 15 March 2012.
Other revenues from current account services primarily regard current account charges (185,000 thousand euros), fees on
amounts collected and on statements of account sent to large customers (121,359 thousand euros), annual fees on debit
cards (55,367 thousand euros) and on debit card transactions (58,929 thousand euros).
Income from delegated services primarily regards amounts received by the Parent Company for the payment of pensions
disbursed by INPS (93,388 thousand euros) and INPDAP (11,964 thousand euros), and for treasury services carried out by
the Company in 2011 on the basis of the Agreement between Poste Italiane SpA and the MEF (57,319 thousand euros).
Revenues from the distribution of loan products by the Parent Company regard commissions on the sale of personal loans
and mortgages on behalf of third parties (157,681 thousand euros).
Fees from securities placement and trading (89,048 thousand euros) regard income from the execution of purchase and
sell orders on the secondary market on behalf of customers.
238
Revenues from money transfers primarily regard commissions collected on domestic money orders (45,260 thousand
euros), Moneygram transfers (15,015 thousand euros) and Eurogiros (4,872 thousand euros).
Revenues generated by the management of public funds are entirely attributable to BdM-MCC SpA and also include
income and interest on loans.
OTHER SALES OF GOODS AND SERVICES
This relates to income from ordinary activities that is not directly attributable to the specific Postal, Financial and Insurance
segments, to which it is allocated for the purposes of segment reporting in accordance with the relevant accounting
standards. The main components are described below:
• 209,103 thousand euros (161,950 thousand euros in 2010) generated by PosteMobile SpA, primarily from the provision
of mobile telecommunications services;
• 59,918 thousand euros earned by the Parent Company (81,304 thousand euros in 2010), including fees received for
collecting applications for residence permits and other permits (32,646 thousand euros), income from call centre services
(1,074 thousand euros) and income from ancillary franking and packaging services (3,838 thousand euros);
• revenues from the sale of products via the “shop-in-shop” channel or by catalogue and mail order, primarily by PosteShop
SpA, amounting to 45,652 thousand euros (53,655 thousand euros in 2010);
• 73,286 thousand euros (42,663 thousand euros in 2010) in revenues generated by Mistral Air Srl, primarily from the supply
of air transport services.
27 - EARNED PREMIUMS
27.1 - Earned premiums
Item
Life premiums(*)
Branch I
Branch III
Branch V
Non-life premiums(*)
Other income from Insurance Services
Total
(*)
Earned premiums are reported net of outward reinsurance premiums.
2011
2010
9,503,328
8,120,475
1,308,102
74,751
9,488,866
6,339,735
2,959,288
189,843
22,804
223
10,207
5,731
9,526,355
9,504,804
28 - OTHER INCOME FROM FINANCIAL AND INSURANCE ACTIVITIES
28.1 - Other income from financial and insurance activities
Item
2011
2010
398,383
275,378
73,916
49,089
572,398
281,650
238,047
52,701
Income from available-for-sale financial assets
Interest
Realised gains
1,467,380
1,293,373
174,007
1,396,313
1,025,965
370,348
Income from held-to-maturity financial assets
Realised gains
170
170
32
32
Income from cash flow hedges
Fair value gains
30
30
-
Income from fair value hedges
Fair value gains
37
37
79
79
Foreign exchange gains
Unrealised gains
Realised gains
2,269
370
1,899
3,081
981
2,100
Other income
8,639
10,597
1,876,908
1,982,500
2011
2010
80,499
34,003
22,046
10,860
1,909
2,340
29,990
55,212
102,057
24,817
9,744
2,661
2,313
19,326
181,647
216,130
Income from financial instruments at fair value through profit or loss
Interest
Fair value gains
Realised gains
Total
29 - OTHER OPERATING INCOME
This item primarily regards the following:
29.1 - Other operating income
Item
Increases to estimates for previous years
Gains on disposals
Recovery of contract expenses and other recoveries
Lease rentals
Recovery of cost of seconded staff
Grants related to income
Other income
Total
240
GAINS ON DISPOSALS
29.2 - Gains on disposals
Item
2011
2010
Gains on disposal of property and land used in operations
Gains on disposal of investment property
Gains on disposal of other operating assets
22,506
6,166
5,331
92,647
7,677
1,733
Total
34,003
102,057
For the purposes of reconciliation with the statement of cash flows, in 2011 this item amounts to 32,826 thousand euros, after losses of 1,177 thousand
euros (note 36.1). In 2010, net gains, after losses of 100,976 thousand euros, amounted to 1,081 thousand euros.
LEASE RENTALS
29.3 - Lease rentals
Item
Rental income from investment property
Rental income on commercial property
Recovery of expenses, transaction costs and other income (1)
Total
(1)
2011
2010
3,010
4,726
3,124
2,876
4,267
2,601
10,860
9,744
This item primarily regards the recovery of expenses incurred directly by the Group and passed on to tenants. This category does not include extraordinary
maintenance costs.
Lease rentals regard the management of properties owned by the Parent Company, which is held to be of a residual nature
and separate from the ordinary activities of the subsidiary, EGI SpA. Under the relevant lease agreements, tenants usually have the right to break off the lease with six months notice. Given the resulting lack of certainty, the expected revenue
flows from these leases are not referred to in these notes. No significant extraordinary maintenance costs were transferred
to tenants via increases in rents.
30 - COST OF GOODS AND SERVICES
30.1 - Cost of goods and services
Item
2011
2010
Services
Lease expense
Raw, ancillary and consumable materials and goods for resale
Interest expense paid to customers
Other interest expense
1,932,541
371,528
225,123
94,383
4,428
1,912,787
349,704
245,182
90,043
-
Total
2,628,003
2,597,716
2011
2010
473,960
262,733
163,164
160,716
135,692
100,309
95,917
94,095
77,759
73,398
72,248
56,622
49,934
38,229
27,557
25,441
19,015
1,816
1,740
1,573
623
489,234
236,194
150,154
158,154
129,952
86,924
92,604
87,872
82,861
75,711
87,367
66,147
47,844
46,977
26,803
19,798
22,200
2,103
1,691
1,527
670
1,932,541
1,912,787
SERVICES
30.2 - Services
Item
Transport of mail, parcels and forms
Routine maintenance and technical assistance
Outsourcing fees and other external service charges
Personnel services
Energy and water
Mobile telecommunications services for customers
Transport of cash
Printing and enveloping services
Mail, telegraph and telex
Cleaning, waste disposal and security
Telecommunications and data transmission
Consultants’ fees and legal expenses
Credit and debit card fees and charges
Advertising and promotions
Agents’ commissions and other
Airport costs
Insurance premiums
Asset management fees
Remuneration of Statutory Auditors
Securities custody and management fees
Other
Total
242
Details of the remuneration paid to Statutory Auditors are provided below:
30.3 - Remuneration of Statutory Auditors
Item
2011
2010
Remuneration
Expenses
1,454
286
1,459
232
Total
1,740
1,691
LEASE EXPENSE
Lease expense breaks down as follows:
30.4 - Lease expense
Item
2011
2010
Property rentals and ancillary costs
Vehicle leases
Equipment hire and software licenses
Other lease expense
191,387
85,155
56,008
38,978
184,041
76,932
54,878
33,853
Total
371,528
349,704
The cost of leasing properties almost entirely regards 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 Italian Office for National Statistics (ISTAT). Lease terms are generally six years, renewable
for a further six. Renewal is assured via the clause stating that the lessor "waives the option of refusing renewal on expiry
of the first term", by which the lessor, once the agreement has been signed, cannot refuse to renew the lease, except in
cases of force majeure. Moreover, Poste Italiane SpA, in accordance with the standard form of contract, has the right to
withdraw from the contract at any time, giving six months notice.
RAW, ANCILLARY AND CONSUMABLE MATERIALS AND GOODS FOR RESALE
30.5 - Raw, ancillary and consumable materials and goods for resale
Item
Consumables and goods for resale
Fuels and lubricants
Printing of postage and revenue stamps
Printed matter, stationery and advertising material
SIM cards and scratch cards
Change in inventories of work in progress, semi-finished
and finished goods and goods for resale
Change in inventories of raw, ancillary and consumable materials
Change in properties held for sale
Other
Total
Note
[10.1]
[10.1]
[10.1]
2011
2010
109,719
80,519
15,169
20,342
1,866
139,112
64,899
21,285
17,595
1,754
(1,952)
(1,336)
539
257
2,809
(2,248)
(243)
219
225,123
245,182
INTEREST EXPENSE PAID TO CUSTOMERS
This item regards interest paid on customer deposits held by BancoPosta, amounting to 94,383 thousand euros for 2011.
The rate paid to retail customers on ordinary postal current accounts was 0.15% until 31 August 2011. From 1 September
2011 no interest is paid on ordinary postal current accounts. Interest on online postal current accounts is, in contrast, paid
at rates between 1% and 2%.
Particular terms and conditions are applied to certain accounts to reward customer loyalty.
OTHER INTEREST EXPENSE
The item refers to the cost of funding of BdM-MCC SpA, adjusted for the impact of the hedges described in note 9.12.
31 - NET CHANGE IN TECHNICAL PROVISIONS FOR INSURANCE BUSINESS AND
OTHER CLAIMS EXPENSES
31.1 - Net change in technical provisions for insurance business and other claims expenses
Item
2011
2010
Claims paid
Change in outstanding claims provisions
Change in mathematical provisions
Change in other technical provisions
Change in technical provisions where investment risk is transferred to policyholders
Claims expenses and change in other provisions - Non-life
4,529,740
9,457
5,832,760
30,880
(520,638)
4,414
3,243,430
208,885
5,174,821
15,557
1,544,542
3,242
Total
9,886,613
10,190,477
The net change in technical provisions for insurance business and other claims expenses refers to:
• claims paid, policies redeemed and the related expenses incurred by Poste Vita SpA during the period, totalling 4,529,740
thousand euros;
• the change in mathematical provisions, totalling 5,832,760 thousand euros, reflecting increased obligations to
policyholders;
• the negative change in technical provisions where investment risk is transferred to policyholders (so-called class D),
totalling 520,638 thousand euros.
244
32 - OTHER EXPENSES FROM FINANCIAL AND INSURANCE ACTIVITIES
32.1 - Other expenses from financial and insurance activities
Item
2011
2010
12,538
634
766,654
714,928
51,726
306,351
282,080
24,271
51,739
51,739
30,929
30,929
Expenses from cash flow hedges
Fair value losses
480
480
-
Change in fair value of financial liabilities
671
35,954
Expenses from fair value hedges
Fair value losses
589
589
103
103
Foreign exchange losses
Unrealised losses
Realised losses
449
5
444
526
58
468
61,383
13,835
894,503
388,332
Interest on repurchase agreements
Expenses from financial instruments at fair value through profit or loss
Fair value losses
Realised losses
Expenses from available-for-sale financial assets
Realised losses
Other expenses
Total
This item regards:
• commissions of 42,176 thousand euros on the early extinguishment of forward purchases of coupon stripped BTPs and
the partial extinguishment of forward purchases of warrants relating to the “Titanium” policy (note 9.15);
• charges of 6,615 thousand euros regarding payments made by Poste Vita SpA pursuant to Law 166/2008, which has
extended application of the regulations governing dormant accounts to insurance companies, including the requirement
to pay the value of any dormant policies into the specific fund established by the MEF. These charges are offset by a
matching reduction in the change in Technical provisions.
33 - STAFF COSTS
Staff costs include the cost of staff seconded to other organisations. The recovery of such expenses is posted to Other
operating income. Staff costs break down as follows:
33.1 - Staff costs
Item
Note
2011
2010
[22.1]
4,302,849
1,201,343
661
4,384,730
1,222,525
502
262,258
7,242
3,760
287,183
109,796
(58,706)
(165,161)
264,040
6,894
4,017
156,725
49,061
58,706
(76,375)
Total costs
Income from fixed-term contracts settlements
5,951,225
(54,715)
6,070,825
(66,320)
Total
5,896,510
6,004,505
Wages and salaries
Social security contributions
Provisions for staff termination benefits: current service cost
Provisions for staff termination benefits: supplementary
pension funds and INPS
Agency staff
Remuneration and expenses paid to Directors
Redundancy payments
Net provisions for disputes with staff
Other staff costs/(cost recoveries)
[21.2]
[21.2]
Details of the remuneration paid to Directors are provided below:
33.2 - Remuneration and expenses paid to Directors
Item
Remuneration
Expenses
Total
2011
2010
3,639
3,841
121
176
3,760
4,017
Cost items relating to staff termination benefits are described in note 22.
Net provisions for disputes with staff and Provisions to the solidarity fund are described in note 21.2.
Cost recoveries primarily regard revised estimates for previous years.
Income from the fixed-term contracts settlement refers to additional staff who, in early 2011, accepted the terms of the
agreement reached on 27 July 2010, between Poste Italiane SpA and the labour unions, regarding the re-employment by
court order of staff previously employed on fixed-term contracts. These amounts, totalling approximately 70 million euros,
represent gross salaries and accrued termination benefits. Compared with the above face value of the amounts to be
returned, the amount of 54,715 thousand euros has been recognised in the income statement for the year based on the
present value of income deriving from the settlement. This present value was calculated on the basis of the expected cash
flows deriving from collection of the amounts due under the individual agreements (based on the forward yield curve for
government securities at 30 June 2011).
246
The following table shows the Group’s average and year-end headcounts by category:
33.3 - Workforce data
Average workforce
Level
Year-end headcount
2011
2010
31 Dec 2011
31 Dec 2010
Senior managers
Middle managers
Frontline staff
Back-office staff
734
14,853
126,470
4,367
718
14,752
128,505
5,474
712
14,829
123,889
4,048
717
14,538
125,953
4,357
Total permanent workforce(*)
146,424
149,449
143,478
145,565
(*)
Figures expressed in full-time equivalent terms.
Taking account of staff on flexible contracts, the average number of full-time equivalent staff in 2011 is 148,453 (151,844
in 2010).
34 - DEPRECIATION, AMORTISATION AND IMPAIRMENTS
34.1 - Depreciation, amortisation and impairments
Item
2011
2010
366,401
100,082
135,331
13,664
30,332
86,992
374,690
99,108
147,912
14,548
26,356
86,766
Impairments/recoveries/adjustments of Property, plant and equipment
3,428
3,084
Depreciation of Investment property
8,012
7,679
Impairments/recoveries/adjustments of Investment property
(801)
(1,103)
166,873
162,670
160,757
6,116
157,553
5,117
Impairments/recoveries/adjustments of Intangible assets
-
212
Impairment of Goodwill/Goodwill arising from consolidation
-
13,390
-
(13,390)
543,913
547,232
Property, plant and machinery
Plant and machinery
Industrial and commercial equipment
Other assets
Amortisation of Intangible assets
Industrial patents and intellectual property rights,
concessions, licenses, trademarks and similar rights
Other
Use of Provisions for other liabilities and charges
Total
35 - CAPITALISED COSTS AND EXPENSES
35.1 - Capitalised costs and expenses
Item
Intangible assets
Note
2011
2010
[5]
[7]
4,697
42,985
4,738
33,709
47,682
38,447
Total
36 - OTHER OPERATING COSTS
Other operating costs break down as follows:
36.1 - Other operating costs
Item
Note
2011
2010
Net provisions and losses on doubtful debts (uses of provisions)
Provisions for receivables due from customers
Provisions for receivables due from parent
Provisions for sundry receivables
Losses on receivables
[11.3]
[11.5]
[12.3]
4,526
(11,570)
9,857
6,213
26
62,922
52,589
(4,375)
14,614
94
[9.6]
[9.7]
25,185
6,778
8,125
10,282
22,741
6,748
9,347
6,646
118,818
128,928
3,462
(5,409)
(8,163)
103,123
76,020
30,632
(3,529)
1,177
1,081
Occurrence of operational risks
Robberies during the year
Reversal of BancoPosta assets, net of recoveries
Other operating losses of BancoPosta
Net provisions for liabilities and charges made/(used)
for disputes with third parties
for non-recurring charges
for invalidated postal savings certificates
for other liabilities and charges
[21.2]
[21.2]
[21.2]
[21.2]
Losses
Municipal property tax, urban waste tax and other taxes and duties
40,854
39,224
Revised estimates and assessments for previous years
20,835
17,575
Other recurring expenses
38,774
30,943
250,169
277,609
(1)
Total
(1)
The item includes 638 thousand euros in net provisions (28 thousand euros used in 2010) for taxation/social security contributions (note 21.2).
248
37 - FINANCE INCOME/COSTS
FINANCE INCOME
37.1 - Finance income
Item
Income from available-for-sale financial assets
Interest(1)
Accrued differentials on fair value hedges(1)
Realised gains
Dividends
Income from financial assets at fair value through profit or loss(1)
Other finance income(1)
Interest from parent
Remuneration of Poste Italiane SpA’s liquidity
Interest on bank current accounts
Interest on term bank accounts
Finance income on discounting receivables(2)
Overdue interest
Impairment of amounts due as overdue interest
Income from subsidiaries
Other
Foreign exchange gains
Total
2011
2010
84,476
67,639
(4,075)
20,831
81
79,385
40,636
(1,647)
40,020
376
1,633
4,942
70,998
108
20,746
4,819
-
88,795
9,711
9,089
10,045
238
43,119
7,489
(6,241)
28
930
48,694
12,373
(3,542)
85
2,102
2,708
5,972
159,815
179,094
Income from financial instruments regards assets other than those in which deposits collected by BancoPosta and/or the insurance company, Poste Vita SpA, are
invested.
(1)
(2)
For the purposes of reconciliation with the statement of cash flows, for 2011 these items amount to 136,195 thousand euros (132,726 thousand euros in
2010).
Finance income on discounted receivables regards: 20,280 thousand euros in accrued interest on the amount due from the MEF (note 9.16), 11,157 thousand euros in interest on amounts due for the publisher tariff subsidies described in note 11.2, and 11,682 thousand euros in interest on amounts due from
staff and IPOST under the fixed-term contracts settlements of 2006 and 2008 (note 12.2).
FINANCE COSTS
37.2 - Finance costs
Item
Note
Finance costs on financial liabilities
on bonds
on loans from Cassa Depositi e Prestiti
on bank borrowings
on other borrowings
paid to the parent
on derivative financial instruments
on amounts payable to subsidiaries
Sundry finance costs on financial assets
Realised losses on available-for-sale financial assets
Impairment losses on available-for-sale financial assets
Fair value losses on financial instruments at fair value through profit or loss
Realised losses on financial instruments at fair value through profit or loss
Loss on fiduciary deposit
Finance costs on provisions for staff termination benefits and pension plans [22.1]
Finance costs on provisions for liabilities
[21.2]
Finance costs on discounting amounts payable to solidarity fund
2011
2010
74,583
39,067
19,903
13,426
1,907
152
123
5
74,406
38,845
26,430
3,953
4,896
191
87
4
2,134
1,113
442
579
-
14,122
58
79
35
13,950
63,934
61,280
(339)
1,108
-
212
Other finance costs
3,640
3,524
Foreign exchange losses(1)
3,721
6,019
147,673
160,671
Total
Finance costs on financial instruments regard liabilities other than deposits and assets other than those in which deposits collected by BancoPosta and/or
the insurance company, Poste Vita SpA, are invested.
(1)
For the purposes of reconciliation with the statement of cash flows, for 2011 finance costs, before foreign exchange losses, amount to 143,952 thousand
euros (154,652 thousand euros in 2010).
38 - INCOME TAX EXPENSE
38.1 - Income tax expense
IRES
2011
IRAP
Total
IRES
2010
IRAP
Total
Current tax expense
Deferred tax income
Deferred tax expense
515,010
(26,211)
8,304
303,772
(4,341)
11,224
818,782
(30,552)
19,528
461,763
20,741
84,918
291,473
(1,140)
11,776
753,236
19,601
96,694
Total
497,103
310,655
807,758
567,422
302,109
869,531
Item
250
The effective tax rate for 2011 is 48.9% and breaks down as follows:
38.2 - Reconciliation of statutory and effective tax rate for IRES
2011
Item
Profit before tax
2010
IRES
% rate
1,654,139
IRES
% rate
1,887,452
Statutory tax charge
454,888
27.5%
519,049
27.5%
Effect of increases/(decreases) on statutory tax charge
Exempt gains on financial assets
Non-deductible contingent liabilities
Net provisions for liabilities and charges and impairments of receivables
Non-deductible taxes
Realignment of tax bases and carrying amounts and taxation for previous years
Other
(7,772)
10,092
34,174
5,212
(10,404)
22,483
(11,570)
-0.47%
0.61%
2.07%
0.32%
-0.63%
1.36%
-0.70%
(8,254)
6,966
28,478
5,149
(3,365)
20,219
(820)
-0.44%
0.37%
1.51%
0.27%
-0.18%
1.07%
-0.04%
Effective tax charge
497,103
30.05%
567,422
30.06%
38.3 - Reconciliation between statutory and effective tax rate for IRAP
2011
Item
Profit before tax
Statutory tax charge
IRAP
2010
% rate
1,654,139
IRAP
% rate
1,887,452
83,216
5.03%
86,044
4.56%
Effect of increases/(decreases) on statutory tax charge
Non-deductible contingent liabilities
Net provisions for liabilities and charges and impairment of receivables
Non-deductible taxes
Non-deductible staff costs
Realignment of tax bases and carrying amounts and taxation for previous years
Other
14,616
6,797
870
206,944
(943)
(845)
0.88%
0.41%
0.05%
12.51%
-0.06%
-0.05%
8,000
11,175
841
200,451
(1,111)
(3,289)
0.42%
0.59%
0.04%
10.62%
-0.06%
-0.17%
Effective tax charge
310,655
18.78%
302,109
16.01%
CURRENT TAX ASSETS AND LIABILITIES
38.4 - Changes in current tax assets/(liabilities)
Current taxes for 2011
Item
IRES
IRAP
Assets/(Liabilities) Assets/(Liabilities)
Current taxes for 2010
Total
IRES
IRAP
Assets/(Liabilities) Assets/(Liabilities)
Total
8,311
209
8,520
(26,279)
(2,933)
(29,212)
Payments of
prepayments for the current year
balance payable for previous year
substitute tax
486,927
456,519
30,387
21
290,761
287,764
2,997
-
777,688
744,283
33,384
21
487,979
422,968
38,914
26,097
294,912
285,483
9,429
-
782,891
708,451
48,343
26,097
Provisions to the income statement for
current tax expense
substitute tax
(515,010)
(529,106)
52
(303,772)
(303,931)
-
(818,782)
(833,037)
52
(461,763)
(475,811)
-
(291,473)
(291,795)
-
(753,236)
(767,606)
14,044
159
14,203
14,048
322
14,370
(17,150)
4
(17,146)
(18,846)
12
(18,834)
Other
22,906(**)
751
23,657
27,220
(309)
26,911
(14,016)
(12,047)
(26,063)
8,311
209
8,520
realignment(*)
Provisions to Equity
of which:
Current tax assets
(*)
(**)
62,625
(76,641)
6,349
(18,396)
68,974
(95,037)
47,216
(38,905)
5,192
(4,983)
52,408
(43,888)
the re-alignment is due to the impact of franking, in 2009, of the differences between the carrying amounts of assets and liabilities and their tax bases
arising after adoption of IAS/IFRS, which became deductible in five equal instalments from 2009 and in the four subsequent years following payment of
the relevant substitute tax. The positive effect on current tax liabilities is offset by the net negative impact of the release of deferred tax assets and
liabilities, as described in notes 38.7 and 38.8.
primarily due to tax credits driving from withholding tax paid on fees.
Under IAS 12 – Income taxes, IRES and IRAP credits are accounted for less the corresponding Current tax liabilities, given
that they are taxes applied by the same tax authority to the same taxable entity, which has a legally enforceable right to
offset and intends to exercise this right.
The IRES credit not offset at 31 December 2011 includes 38,042 thousand euros due to the payment of increased tax
expense as a result of the non-deductibility of 10% of IRAP between 2003 and 2007. A claim for a rebate of this amount
has been filed.
252
DEFERRED TAX ASSETS AND LIABILITIES
The following table shows deferred tax assets and liabilities:
38.5 - Deferred taxes
Item
2011
2010
Deferred tax assets
1,730,199
(248,994)
760,014
(293,795)
Total
1,481,205
466,219
The nominal tax rates are 27.5% for IRES and 4.2% for IRAP (+/- 0.92% as a result of regional surtaxes and/or relief and
+0.15% as a result of additional surtaxes levied in regions with a health service deficit). The Group’s average statutory rate
for IRAP is 5%.
Changes in deferred tax assets and liabilities are shown below:
38.6 - Changes in deferred tax assets and liabilities
Item
Deferred tax income/(expenses) recognised in the income statement
Deferred tax income/(expenses) recognised in Equity
Change in the basis of consolidation
2011
2010
466,219
11,024
996,461
7,501
227,516
(116,295)
354,931
67
1,481,205
466,219
The following table shows a breakdown of changes in deferred tax assets and liabilities according to principal event that
generated the change:
38.7 - Changes in deferred tax assets
PPE and
intangible
assets
Fees to be
amortised
Financial
assets and
liabilities
Accum.
adjustments
to assets
Provisions
for liabilities
and charges
Trade
and other
receivables
Staff
costs
Other
Total
Income/(Expenses) recognised
in profit or loss
in profit or loss on realignment
in Equity
Change in basis
of consolidation
66,985
3,871
118,348
125,172
276,959
22,214
9,281
22,014
644,844
(6,445)
(2,252)
251
(3,351)
6,810
29
255
1,390
(3,313)
(2,095)
-
(5,952)
(27)
(378)
(5,538) (2,298)
-
(16,288)
-
-
134,854
-
-
-
(150)
134,704
-
-
-
-
-
-
-
67
67
58,445
1,619
247,501
121,794
283,391
16,705
7,238 23,321
760,014
1,612
4,915
(2,219)
(36,262)
65,952
868
(1,885)
-
(5,952)
(27)
(378)
-
-
931,895
-
-
-
785
-
16
4,102
1,183
690
58,957
6,534
1,171,241
89,607
350,148
12,725
Item
in profit or loss
in profit or loss on realignment
in Equity
Change in basis
of consolidation
-
1,198
10,566
46,630
(5,538) (2,298)
-
(16,078)
-
(92)
931,803
327
727
7,830
6,465 34,522 1,730,199
Deferred tax assets represent the benefit expected to derive from reductions in future current tax expense as a result of
deductible temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. They
primarily reflect temporary differences arising between the tax bases of financial assets and liabilities their carrying amounts,
as a result of application of IAS 39 (1,171,241 thousand euros). The increase during the period is primarily due to the changes
in the fair value reserve described in note 19.1. Deferred tax assets also reflect the expected benefit of the future
deductibility of certain provisions for liabilities (350,148 thousand euros), of adjustments to assets (89,607 thousand euros), of
the impairment of trade and other receivables (12,725 thousand euros), of fee income receivable by Poste Vita SpA and
deferred, in application of IAS 18, over the term of individual policies (6,534 thousand euros) and of accrued amounts payable
to staff (6,465 thousand euros). Finally, deferred tax assets on Property, plant and equipment (58,957 thousand euros)
primarily regard the properties transferred from Poste Italiane to the subsidiary, EGI SpA, in 2001, recognising the deferred tax
benefits generated by calculation, at the time of the transfer, of taxation on the higher taxable value recognised for Investment
property, and the deferred tax assets recognised following Postel SpA’s decision to frank goodwill.
38.8 - Changes in deferred tax liabilities
Deferred
gains
Discounted
staff
termination
benefits
Other
Total
373,914
78,472
21,913
16,201
690
12
3,400
(139)
417,328
96,816
-
(122)
(220,235)
-
8
-
(122)
(220,227)
4,411
15,270
232,029
38,114
710
3,261
293,795
(2,296)
(6,418)
36,279
(8,452)
(18)
555
19,650
3
-
(122)
(64,704)
9
-
46
317
-
(122)
(64,658)
329
2,118
8,852
203,491
29,662
1,055
3,816
248,994
Intangible
assets
Financial
assets and
liabilities
5,043
Expenses/(Income) recognised in the profit or loss (632)
Expenses/(Income) recognised in profit
or loss on realignment
Expenses/(Income) recognised in Equity
-
12,368
2,902
Item
Expenses/(Income) recognised in the profit or loss
Expenses/(Income) recognised in profit
or loss on realignment
Expenses/(Income) recognised in Equity
PPE
Deferred tax liabilities reflect the benefit obtained as the result of a lower current tax charge due to taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. These liabilities primarily refer
to taxable temporary differences arising between the tax bases of financial assets and liabilities their carrying amounts, as
a result of application of IAS 39 (203,491 thousand euros). Deferred tax liabilities also derive from the deferral of gains
(29,662 thousand euros) and taxable temporary differences between the tax bases and carrying amounts of Intangible
assets (8,852 thousand euros) and Property, plant and equipment (2,118 thousand euros).
At 31 December 2011 and 2010 deferred tax assets and liabilities recognised directly in Equity are as follows:
38.9 - Deferred tax assets and liabilities recognised in Equity
Item
Increases/(Decreases) in Equity
2011
2010
Fair value reserve for available-for-sale financial assets
Cash flow hedge reserve for hedging derivatives
Actuarial gains/(losses) on staff termination benefits
925,817
70,782
(138)
393,296
(38,207)
(158)
Total
996,461
354,931
Finally, Current tax expense of 17,146 thousand euros was recognised in Equity during the year under review, primarily as
a result of actuarial gains on staff termination benefits. As a result, the total tax benefit for the year accounted for in Equity
is 979,315 thousand euros.
254
39 - RELATED PARTY TRANSACTIONS
IMPACT OF RELATED PARTY TRANSACTIONS ON THE FINANCIAL POSITION AND
RESULTS OF OPERATIONS
The impact of related party transactions on the financial position and results of operations is shown in the following tables
from 39.1 to 39.4.
39.1 - Impact of related party transactions on the financial position at 31 December 2011
Name
Subsidiaries
Docutel SpA
Kipoint SpA
Poste Tributi ScpA
Joint ventures
Uptime SpA
Associates
Consorzio ANAC in liquidation
Docugest SpA
Other SDA Group associates
Financial
assets
Trade
receivables
Other assets
Other
receivables
185
-
157
987
419
5,089
19
31
118
-
-
5
1,428
1,541
2,321
792
1,897
4
-
1,023
-
4,240
66
-
-
2
-
9,821
1,362
20
-
-
6,156
2,776
-
-
-
4,203
215
6
1,837,611
1,748,033
89,563
15
149,606
265
1
106
73
166
86
112,964
10,230
34,789
4,420
1,256
31
2
464
28
3
16
2
-
21,482
10,367
11,115
-
829,399
829,399
-
7,057
7,057
534,135
1,000
-
452,845
323,987
128,858
6
24
244
1,074
18,420
1,024
10,031
47,045
26
449
3
5
-
12,140
12,140
53,047
13,550
-
(104,528)
(16,017)
-
-
-
-
2,067,481
5,633
829,399
543,627
553,348
78,767
Related parties external to the Group
Ministry of the Economy and Finance
8,371,855
Direct relations
8,371,855
Agencies and other local offices
Former government procurement department
Cassa Depositi e Prestiti Group
CONI Servizi
Consap SpA
Consip SpA
Enav SpA
EUR SpA
Expo 2015 SpA
Fondoposte pension fund
Anas Group
Enel Group
Eni Group
Equitalia Group
Ferrovie dello Stato Group
2
Finmeccanica Group
319
Fintecna Group
2,526
Gestore Servizi Elettrici Group
Invitalia Group
Istituto Poligrafico Zecca dello Stato Group
RAI Group
855
Sogei Group
Sogin Group
Soc. Svil.po Mercato F.di Pensione SpA (MEFOP)
STMicroelectronics Holding NV
Provisions for doubtful receivables from external
related parties
Total
8,376,765
Cash and
cash
equivalents
Financial
liabilities
Trade
payables
Other
liabilities
At 31 December 2011 total Provisions for liabilities and charges made to cover probable liabilities arising from transactions
with related parties external to the Group and regarding trading relations amount to 54,735 thousand euros (54,414
thousand euros at 31 December 2010).
39.2 - Impact of related party transactions on the financial position at 31 December 2010
Name
Financial
assets
Trade
receivables
Other assets
Other
receivables
Cash and
cash
equivalents
Financial
liabilities
Trade
payables
Other
liabilities
Subsidiaries
287
56
13
-
5
742
-
Docutel SpA
-
495
20
-
1
1,591
-
Kipoint SpA
-
289
1
-
-
156
-
Poste Tributi ScpA
-
2,421
-
-
1,523
1,545
-
1,012
3,355
-
-
3
8,801
-
-
67
-
-
-
1,412
-
-
Joint ventures
Uptime SpA
Associates
Consorzio ANAC
-
3
-
-
16
-
Docugest SpA
-
180
-
-
-
3,116
-
331
-
-
-
-
-
-
-
2,901
-
-
-
341
6
7,629,279
1,303,196
24,383
840,624
7,462
121,397
12,140
7,629,279
1,249,509
13,378
840,624
7,462
-
12,140
-
53,687
11,005
-
-
-
-
-
-
-
-
-
121,397
-
Other SDA Group associates
Direct relations
100,825
842,556
-
-
512,667
-
-
Cinecittà Luce SpA
-
1
-
-
-
-
-
CONI Servizi
-
112
-
-
-
6
-
Consap SpA
-
-
-
-
-
41
-
Consip SpA
-
152
-
-
-
-
-
Enav SpA
-
11
-
-
-
-
-
EUR SpA
-
-
-
-
-
1,368
-
-
613
-
-
-
-
64,652
Anas Group
-
42
-
-
-
-
-
Enel Group
-
39,138
-
-
-
1,259
-
Eni Group
-
11,708
-
-
-
24,117
-
Equitalia Group
-
29,552
-
-
-
785
-
-
2,486
-
-
-
13,201
-
Finmeccanica Group
-
796
-
-
-
59,300
-
Fintecna Group
-
26
-
-
-
39
-
-
12
-
-
-
-
-
Invitalia Group
-
313
-
-
-
-
-
-
116
-
-
-
621
-
RAI Group
-
1
-
-
-
18
-
Sogei Group
-
42
-
-
-
-
-
Sogin Group
-
-
-
-
-
14
-
-
1
-
-
-
-
-
Provisions for doubtful receivables from external
related parties
-
(95,077)
(15,907)
-
-
-
-
7,731,734
2,145,564
8,510
840,624
521,677
239,870
76,798
Total
256
39.3 - Impact of related party transactions on the results of operations for 2011
2011
Revenue
Costs
Capital expenditure
Name
Revenues from
sales and
services
Other
operating
income
Finance
income
PPE
Intangible
assets
Goods
and
services
Current expenditure
Other
Staff operating Finance
costs
costs
costs
Subsidiaries
11
-
5
-
-
1,520
14
-
-
Docutel SpA
8
-
-
-
-
4,192
7
-
-
Kipoint SpA
85
-
-
-
-
885
-
-
-
2,873
-
-
-
-
144
-
1,458
5
-
-
-
-
-
-
-
-
-
2,226
369
23
-
-
15,102
-
14
-
15
-
-
-
-
3,185
-
-
-
Poste Tributi ScpA
Joint ventures
Uptime SpA
Associates
Docugest SpA
1,879
-
-
-
-
6,919
-
-
-
-
-
-
-
-
-
-
-
331
895,831
1,898
39,630
-
-
-
-
9,563
152
Direct relations
782,294
14
39,630
-
-
-
-
9,858
152
113,537
1,884
-
-
-
-
-
(295)
-
-
-
-
-
-
-
-
-
-
1,504,349
-
148
-
-
-
-
17
19,903
-
Cinecittà Luce SpA
8
-
-
-
-
-
-
-
CONI Servizi
583
287
-
-
-
70
-
-
-
Consap SpA
109
-
-
-
-
-
-
-
-
Consip SpA
186
-
-
-
-
-
-
-
-
Enav SpA
199
64
-
-
-
-
-
-
-
EUR SpA
-
-
-
-
-
1,009
-
1,015
-
50
418
-
-
-
-
29,563
-
Anas Group
756
15
-
-
-
-
-
-
-
Enel Group
144,371
759
-
3
-
1,380
-
190
59
Eni Group
31,070
45
-
-
-
52,591
-
-
-
Equitalia Group
60,607
35
-
-
-
775
-
-
-
2,166
8
-
-
-
4,052
42
-
220
Finmeccanica Group
137
1
-
8,797
7,608
47,059
-
-
-
Fintecna Group
278
-
-
-
-
389
-
-
-
373
-
-
-
-
-
-
-
-
Invitalia Group
564
-
-
-
-
-
-
-
-
1,236
16
-
-
-
8,009
-
2
-
3
-
-
-
-
-
-
-
-
Italia Lavoro Group
RAI Group
10,061
2
-
-
-
-
-
-
SACE Group
164
-
-
-
-
-
305
-
-
Sogei Group
41
-
-
-
-
-
-
-
-
2
-
-
-
-
5
-
-
-
50
-
-
-
-
-
-
-
-
Sogin Group
Sicot Srl
STMicroelectronics Holding NV
Total
4
-
-
-
-
3
-
-
-
23
-
-
-
-
-
-
-
-
2,660,318
3,917
39,806
8,800
7,608
147,289
29,931
12,259
20,670
In 2011 Net provisions for liabilities and charges made to cover probable liabilities arising from transactions with related
parties external to the Group and regarding trading relations amount to 3,329 thousand euros (7,490 thousand euros in
2010).
39.4 - Impact of related party transactions on the results of operations for 2010
2010
Revenue
Costs
Capital expenditure
Name
Revenues from
sales and
services
Other
operating
income
Finance
income
PPE
Intangible
assets
Goods
and
services
Current expenditure
Other
Staff operating Finance
costs
costs
costs
Subsidiaries
5
75
3
-
-
875
64
-
-
Docutel SpA
5
1,697
-
-
-
4,189
-
-
-
232
14
-
-
-
136
-
-
-
1,540
816
-
-
-
87
-
1,212
4
-
-
65
-
-
-
-
-
95
2,366
445
17
-
-
13,115
-
-
-
15
14
-
-
-
5,822
-
(37)
-
-
Kipoint SpA
Poste Tributi ScpA
Joint ventures
Uptime SpA
Associates
Consorzio ANAC
Docugest SpA
1
-
-
-
-
-
-
-
211
49
-
-
-
9,532
-
-
-
-
-
-
-
-
-
-
-
-
803,411
458
44,216
-
-
-
-
2,941
191
Direct relations
695,403
-
44,216
-
-
-
-
2,918
191
108,008
458
-
-
-
-
-
23
-
-
-
-
-
-
-
-
-
-
1,557,331
-
2,005
-
-
-
-
-
26,431
10
-
-
-
-
-
-
-
-
CONI Servizi
916
-
-
-
-
69
-
-
-
Consap SpA
76
-
-
-
-
-
-
-
-
Consip SpA
522
-
-
-
-
-
-
-
-
Enav SpA
214
61
-
-
-
-
-
-
-
EUR SpA
-
-
-
22
-
1,512
-
1,104
-
203
306
-
-
-
-
29,324
-
-
Anas Group
703
-
-
-
-
-
-
-
-
Enel Group
156,079
14
-
3
-
1,265
-
26
-
Eni Group
32,986
-
-
-
-
43,376
-
-
-
Equitalia Group
95,692
-
-
-
-
742
-
-
-
Cinecittà Luce SpA
2,160
14
-
-
-
5,292
123
-
243
Finmeccanica Group
215
426
-
19,678
8,343
51,396
-
-
-
Fintecna Group
300
-
-
-
-
347
-
-
-
220
-
-
-
-
-
-
-
-
Invitalia Group
700
-
-
-
-
-
-
-
-
Italia Lavoro Group
RAI Group
1,441
-
-
-
-
14,503
-
2
-
13
-
-
-
-
-
-
-
-
8,330
-
-
-
-
16
-
-
-
SACE Group
94
-
-
-
-
-
-
-
-
Sogei Group
82
-
-
-
-
14
-
-
-
Sogin Group
2
-
-
-
-
-
-
-
-
59
-
-
-
-
-
-
-
-
4
-
-
-
-
-
-
-
-
2,666,138
4,389
46,306
19,703
8,343
152,288
29,511
5,248
26,964
Sicot Srl
Total
258
The nature of the principal transactions between the Parent Company and related parties external to the Group is
summarised below.
• Amounts received from the MEF primarily refer to payment for carrying out the Universal Service Obligation (USO), the
management of postal current accounts, as reimbursement for electoral tariff reductions and subsidies, and as payment
for delegated services, integrated e-mail services, the franking of mail on credit, and for collection of tax returns.
• Amounts received from CDP SpA primarily refer to payment for the collection of postal savings deposits.
• Amounts received from the Enel Group primarily refer to payment bulk mail shipments, unfranked mail, franking of mail
on credit and postage paid mailing services, etc. The costs incurred primarily regard the supply of gas.
• Amounts received from the Equitalia Group primarily refer to payment for the integrated notification service and for
unfranked mail. The costs incurred primarily regard electronic transmission of tax collection data.
• Amounts received from the ENI Group primarily refer to payment for bulk mail shipments, etc. The costs incurred primarily
regard the supply of fuel for motorcycles and vehicles and the supply of gas.
• Purchases from the Finmeccanica Group primarily refer to the supply, by Elsag Datamat SpA, of equipment, maintenance
and technical assistance for mechanised sorting equipment, and systems and IT assistance regarding the creation of
document storage facilities, specialist consulting and software maintenance, and the supply of software licences and of
hardware.
KEY MANAGEMENT PERSONNEL
Key management personnel consist of Directors of the Parent Company, Poste Italiane SpA’s first-line managers and senior management in the most important Group companies. The related remuneration, including social security and pension
contributions, is as follows:
39.5 - Remuneration of key management personnel
Item
2011
2010
Remuneration paid in short term
Post-employment benefits
16,868
4,755
16,359
462
Total
21,623
16,821
No loans were granted to key management personnel during 2011 and at 31 December 2011 Group companies do not
report receivables in respect of loans granted to such personnel.
TRANSACTIONS WITH STAFF PENSIONS FUNDS
The Parent Company and its subsidiaries that apply the National Collective Labour Contract are members of the Fondoposte
Pension Fund, which is the national supplementary pension fund for non-managerial staff. As indicated in article 14,
paragraph 1 of Fondoposte’s By-laws, the representation of members among the various officers and boards (the General
Meeting of delegates, the Board of Directors, Chairman and Deputy Chairman, Board of Statutory Auditors) is shared
equally between the workers and the companies that are members of the Fund. Among other things, the Fund’s Board of
Directors takes decisions regarding:
• the general criteria for the allocation of investment risk and for investment policies;
• the choice of fund manager and depositary bank.
40 - OTHER INFORMATION
POSTAL SAVINGS DEPOSITS
Postal savings deposits collected by the Parent Company in the name of and on behalf of Cassa Depositi e Prestiti are
shown in the table below, which breaks deposits down by category.
40.1 - Postal savings deposits
Item
31 December 2011
31 December 2010
Post office savings books
Interest-bearing Postal Certificates
92,614,043
208,187,134
129,013,927
79,173,207
97,656,369
198,488,569
113,503,394
84,985,175
Total
300,801,177
296,144,938
The above amounts include accrued, unpaid interest.
ASSETS UNDER MANAGEMENT
Total assets under management by BancoPosta Fondi SpA SGR (relating solely to funds managed by third parties), consisting of the fair value of units measured on the last working day of the year, are shown below:
40.2 - Disclosure on assets under management
Item
31 December 2011
31 December 2010
Collective investment funds
Proprietary funds
Funds managed by third parties
2,983,965
216,766
2,767,199
3,066,195
3,066,195
Total
2,983,965
3,066,195
Average assets under management within the context of BancoPosta Fondi SpA SGR’s proprietary mutual investment
funds amount to 3,047 million euros for 2011 (3,113 million euros at 31 December 2010).
BancoPosta Fondi SpA SGR also manages individual investment portfolios for Poste Vita SpA and Poste Assicura SpA.
COMMITMENTS
Purchase commitments given primarily by the Parent Company are summarised below:
40.3 - Commitments
Item
Purchase commitments
Goods and services
Property leases
Intangible assets
Investment property
Committed lines of credit
Loans agreed and to be disbursed by BdM-MCC
Total
31 December 2011
31 December 2010
741,187
580,106
55,954
46,751
52
806,114
544,097
68,667
43,847
39
26,696
-
1,450,746
1,462,764
260
Future commitments with respect to property leases (note 31.4), which may generally be broken off with six months notice,
break down as follows according to due date:
40.4 - Property lease commitments
Item
31 December 2011
31 December 2010
Lease rentals due:
within 12 months
between 2 and 5 years after end of reporting period
after 5 years
153,833
357,490
68,783
138,399
345,067
60,631
Total
580,106
544,097
31 December 2011
31 December 2010
Sureties and other guarantees issued
by the Group in its own interests in favour of third parties
by banks in the interests of Group companies in favour of third parties
2,080
127,131
2,818
104,991
Total
129,211
107,809
31 December 2011
31 December 2010
Bonds subscribed by customers held by third-party banks
Third party's securities held on deposit at BdM-MCC SpA
Other assets
20,283,396
54,000
24,413
19,920,461
12,468
Total
20,361,809
19,932,929
GUARANTEES
Personal guarantees issued by the Group are as follows:
40.5 - Guarantees
Item
THIRD-PARTY ASSETS
40.6 - Third-party assets
Item
(*)
(*)
In addition to 222 million in the Parent Company's financial instruments other than bonds (approximately 179 million at 31 December 2010).
ASSETS IN THE PROCESS OF ALLOCATION
At 31 December 2011 the Parent Company has paid a total of 308,844 thousand euros in claims on behalf of the Ministry
of Justice (279,589 thousand euros at 31 December 2010), for which, under the agreement between Poste Italiane SpA
and the MEF, it has already been reimbursed by the Treasury, whilst awaiting acknowledgement of the relevant account
receivable from the Ministry of Justice.
LITIGATION
In 2008 the Parent Company was charged with violation of certain requirements of Legislative Decree 231/2001. The charges regard
the failure to implement appropriate preventive measures at organisational and operational level, thereby permitting the deliberate
overestimation of postal savings deposits in 2003, in order to earn an undue amount of income. Whilst it is not possible to predict
the outcome of the trial, which is underway at the Court of Naples, it should be noted that the financial and commercial effects of
the dispute have been reflected in the financial statements for previous years, and that Poste Italiane SpA has for some time now
taken appropriate organisational and operational steps to comply with the requirements of Legislative Decree 231/2001.
During the year the Tax Office in Rome, as part of a local criminal investigation of third parties, seized accounting and administrative
documents from Postel SpA regarding e-procurement transactions carried out primarily in 2010 and, to a lesser extent, in 2011. At the
date of preparation of these financial statements, the investigations in progress have not resulted in any charges against the company. As a precautionary measure, however, Postel SpA suspended its e-procurement operations in 2011. The company and its external legal advisors are, in any event, considering what action to take to safeguard the company’s interests.
TAX DISPUTES
In 2008 the tax authorities notified Banca del Mezzogiorno - Mediocredito Centrale SpA (BdM-MCC), acquired with effect from 1
August 2011, of the decision to contest its tax treatment of the purchase of its investment in Immobiliare Piemonte Srl in 2003, alleging that it had evaded tax by concealing the purchase of properties and omitting to self-invoice their purchase, amounting to a taxable amount of 115 million euros. As a result, the authorities imposed an administrative fine of approximately 23 million euros. In
2009 the bank presented two submissions with the aim of obtaining annulment of the fine. The tax authorities rejected the bank’s
arguments and notified it of a fine for VAT, against which the bank appealed before the Provincial Tax Tribunal. BdM-MCC is still awaiting communication of the date of the hearing and believes it is reasonable to expect a favourable outcome, supported by the opinions of its legal counsel. BdM-MCC is, in any event, protected from any potential liabilities that may arise by a specific indemnity
granted by the previous owner in the contract for the sale of the bank to Poste Italiane SpA.
At the end of a general tax audit relating to the 2008 tax year, on 22 December 2011 BdM-MCC received an official tax audit report
contesting the deductibility of costs incurred, totalling 19.6 million euros (regarding transactions concluded in 2008 in order to settle
disputes with the Parmalat group), and claiming that the bank had reduced its taxable income by 16.2 million euros (attributable to
the sale of non-performing loans to a company in the Unicredit group, to which the bank belonged at the time). As the bank believes
it unlikely that any potential liabilities will arise and given that responsibility for the above events lies with the bank’s previous owner,
BdM-MCC has not made any provision for liabilities and charges.
On 17 November 2011 EGI SpA received three notices of assessment for the years 2006, 2007 and 2008, resulting in the identification of the same irregularity in each of the three years in the official tax audit report for 2008 (dated 16 March 2011). This concerned
the application, for the purposes of IRES, of art. 11, paragraph 2 of Law 413/1991 to properties of historical and artistic interest owned
by EGI and leased by it to third parties. This resulted in a demand for payment of IRES of 2.4 million euros, in addition to a fine of the
same amount and interest of 0.3 million euros, making a total of 5.1 million euros. The company has appealed the above notices of
assessment, deeming the findings to be groundless in fact and in law. On 9 February 2012 the company appeared at court to file
copies of the appeal filed with the Provincial Tax Tribunal of Rome, where the dispute is currently pending. No potential liabilities are
currently expected as a result of this dispute.
In 2009 the Regional Tax Office for Large Taxpayers (Direzione Regionale del Lazio - Settore, Controlli, Contenzioso e Riscossione Ufficio Grandi Contribuenti) notified Poste Vita SpA of an alleged violation of the VAT regulations in the 2004 tax year, resulting in fines
of approximately 2.3 million euros for the failure to pay VAT on invoices for servicing fees collected. The findings are based on two
separate official tax audit reports relating to a commercial partner of the company in a number of insurance transactions in 2004. In
2010 the company appealed before the Provincial Tax Tribunal of Rome, requesting annulment of the fine. In December 2010 and
September 2011 the tax authorities sent the company notices of two further small fines for the same violation in the 2005 and 2006
tax years. Given that the company deems the authorities’ findings to be groundless, it has also appealed these fines. The appeals
are to date pending before the Provincial Tax Tribunal of Rome. The likely outcomes of these disputes have been taken into account
in determining Provisions for liabilities and charges.
In addition, on 22 June 2011 the Regional Tax Office for Large Taxpayers began an audit of certain aspects of the company’s taxation
for the 2009 tax year. The audit forms part of the normal two-yearly controls of so-called "large taxpayers" required by art. 42 of Law
388 of 23 December 2000. The outcome of the audit was set out in an official tax audit report sent to the company on 26 September
2011, and primarily demanding payment of IRES and IRAP deriving from the non-deductible nature of the cost of a number of
“expired” claims on approximately 400 policies, totaling 3.8 million euros, that were not paid and still held in the provisions for claims
expenses at 31 December 2009. According to the inspectors, the company should only have recognised the deductible cost on payment of the claims. The company The company deemed it financially advisable to accept the report, in view of the potential cost of
a dispute with what would have been an uncertain outcome. To this end, on 24 October 2011 the company notified the Regional Tax
Office for Large Taxpayers that it accepted the findings pursuant to art. 5-bis of Legislative Decree 218 of 1997, in relation to VAT, IRES
and IRAP. On 26 January 2012 the Regional Tax Office for Large Taxpayers issued the relevant notices of assessment. Payment of
the outstanding taxes, the reduced fines and the related interest, amounting to 1.5 million euros, took place on 3 February 2012,
thereby settling all outstanding amounts for IRES, IRAP and VAT in relation to this period.
262
PROCEEDINGS PENDING AND RELATIONS WITH THE AUTHORITIES
European Commission
Acting on the European Commission’s Decision of 16 July 2008 regarding State aid, and in accordance with instructions from the
Parent Company’s shareholder, on 15 January 2009 Poste Italiane SpA paid the amount due to the MEF. The Company’s appeal is
pending before the European Community Court.
Antitrust Authority
The investigation of the Parent Company launched on 15 October 2009, in relation to deregulated postal services (in order “to determine whether the Company's actions entailed an abuse of a dominant market position pursuant to art. 82 of the EC Treaty”, with specific reference to the Posta Time product and participation in certain tenders), came to an end on 15 December 2011, with the application of a fine of 39 million euros to be paid by Poste Italiane SpA. The Company immediately appealed before Lazio Regional
Administrative Court which, on 11 January 2012, rejected the application for interim relief and fixed a date for the hearing on the merits. On 4 April 2012, Lazio Regional Administrative Court upheld the appeal brought by Poste Italiane SpA, subject to certain limitations, and cancelled the Authority’s fine. Whilst fully convinced that its conduct is in compliance with the law and correct, the
Company, whilst waiting for the judgement to become final, has prudently taken account of the above situation in determining provisions for disputes with third parties at 31 December 2011.
On 14 December 2011 the Authority fined Poste Italiane SpA 540 thousand euros for unfair trading. This relates to the failure to provide Registered Mail and Standard Parcel services at certain post offices due to the lack of the necessary forms, and the offer of
more expensive services in their place. The company has appealed before Lazio Regional Administrative Court. In this case the
Company has also taken account of the above situation in determining provisions for disputes with third parties at 31 December 2011.
Finally, on 14 March 2012 the Antitrust Authority launched an investigation of Poste Italiane to establish if the Company has abused
its dominant position in the deregulated postal services market. The procedure aims to determine whether or not Poste Italiane provides individual customers with services for which it does not charge VAT, thereby benefitting from an unjustified competitive advantage in being able to offer services exempt from value added tax. The procedure is due to be completed by 4 February 2013.
ISVAP
With regard to the audit report issued to Poste Vita on 26 February 2010 by the insurance regulator (Istituto per la Vigilanza sulle
Assicurazioni Private e di Interesse Collettivo, or ISVAP), and the ensuing statement of charges served on the Company in on 27 July
2011, on 24 October 2011 the company was notified of ruling 4085/11 dated 18 October 2011, by which the regulator has closed the
proceedings.
COVIP
On 14 September 2010 the pension fund regulator (the Commissione di Vigilanza su Fondi Pensione, or COVIP) began an inspection
of Poste Vita SpA relating to the sale of its “Postaprevidenza Valore – Piano individuale pensionistico – Fondo Pensione” pension product, the handling of complaints and internal claims management procedures, focusing particularly on transfers to other funds. In April
2011 the regulator notified the company of the findings of the inspection completed on 18 February 2011. On 4 July 2011 the company filed a submission with the regulator, describing the initiatives taken and/or that it plans to take in response to the findings. The
company has yet to receive any response to its submission from COVIP.
Bank of Italy
Solely for the purposes of full disclosure, on 17 February 2012 the Bank of Italy began an inspection of BancoPosta RFC pursuant to
art. 54 of Legislative Decree 385/93.
DISCLOSURE OF FEES PAID TO THE INDEPENDENT AUDITORS
In 2011 Poste Italiane SpA voluntarily adopted guidelines governing the procedures for awarding contracts to the Independent
Auditors or companies within its network. The guidelines also require the Company to provide a summary of the contracts awarded.
The following table shows fees, broken down by type of service, payable to PricewaterhouseCoopers SpA and companies within its
network for 2011 and 2010.
40.7 - Disclosure of fees paid to the Independent Auditors
Entity providing the service
Fees(*)
Item
2011
2010
Audit
PricewaterhouseCoopers network
1,859
-
1,600
-
Voluntary audits or audit-related services
55
-
153
240
Services other than audit
797
30
967
2,711
2,990
Total
(*)
The above amounts do not include incidental expenses and charges (for example, the regulatory fee paid to the CONSOB).
The services other than audit mainly regard a long-term contract, awarded by Poste Italiane SpA via a tender process, for
monitoring the quality of the Priority Mail and Posta Target services.
41 - INFORMATION ON INVESTMENTS
41.1 - List of investments consolidated on a line-by-line basis
Name (registered office)
Banco Posta Fondi SpA SGR (Rome)
Banca del Mezzogiorno - MedioCredito Centrale SpA (Rome) (*)
Consorzio Logistica Pacchi ScpA (Rome)
Consorzio per i Servizi di Telefonia Mobile ScpA (Rome) (**)
Europa Gestioni Immobiliari SpA (Rome)
Mistral Air Srl (Rome)
Postecom SpA (Rome)
PosteMobile SpA (Rome)
Poste Energia SpA (Rome)
Poste Tutela SpA (Rome)
Poste Vita SpA (Rome) (**)
Poste Assicura Spa (Rome) (**)
Postel SpA (Rome)
PostelPrint SpA (Rome)
PosteShop SpA (Rome)
SDA Express Courier SpA (Rome)
(*)
(**)
% interest
Share capital
100%
12,000
100%
97.50%
132,509
516
120
100%
100%
100%
100%
100%
100%
103,200
530
Profit/(loss)
for year
Equity
8,357
699
-
139,273
516
120
6,371
74,757
441,997
2,512
6,450
(2,178)
4,100
32,561
120
16,568
94
61,599
972
9,310
1,607,118
26,763
100%
100%
100%
100%
100%
100%
153
1,156
866,608
25,000
20,400
7,140
131,736
1,350
2,582
100%
56,339
1,284
(7,619)
(25,019)
(895)
42,839
125,688
36,023
4,548
44,894
The result for the year refers to the period 1 August 2011 (the date of acquisition of the company) to 31 December 2011.
The figures for these companies have been calculated under IFRS, and may not, therefore, be consistent with those contained in the financial statements
prepared under Italian GAAP.
264
41.2 - List of investments consolidated using the proportionate method
Italia Logistica Srl (*) (Rome)
(*)
% interest
current
Asset
non-current
50%
55,185
15,477
Revenues
Liabilities
current
non-current from sales
and services
68,759
1,737
89,516
Profit/(Loss)
for
period
Workforce
at year
end
(2,685)
125
Figures provided for the consolidated financial statements and not yet approved by the company’s board of directors.
41.3 - List of investments accounted for using the equity method
% interest
Assets
Revenues from
Liabilities sales and services
Profit/(Loss)
for the year
Address Software Srl (Rome)
51%
1,642
1,376
2,212
78
Docugest SpA (Parma) (a)
49%
15,018
7,401
14,390
1,330
Docutel Communications Services SpA (Siena)
85%
4,355
2,888
5,061
73
100%
2,004
1,282
249
(273)
90%
8,568
5,985
2,943
-
99.99%
834
756
-
12
-
582
650
1
3
32.18%
1,636
126
-
-
28.57%
4,910
4,772
6,864
18
Kipoint SpA (Rome)
(a)
Poste Tributi ScpA (Rome)
Postel do Brasil Ltda (Brasilia) (b)
Programma Dinamico SpA (Rome) (c)
Telma Sapienza Scarl (Rome)
(a)
Uptime SpA (Rome) (a)
(a)
(b)
(c)
Figures taken from the company’s latest approved financial statements for the year ended 31 December 2010.
Figures taken from the company’s latest approved financial statements for the year ended 31 December 2007.
Figures taken from the company’s latest approved financial statements for the year ended 31 December 2010; Group companies do not hold investments
in Programma Dinamico SpA.
42 - EVENT AFTER 31 DECEMBER 2011
With reference to note 19.1 regard the negative balance of the fair value reserve at 31 December 2001, totalling approximately 2,137 million euros, as a result of unrealised losses on the Poste Italiane Group’s holdings of available-for-sale financial assets, following a downgrade of Italy’s credit rating, it should be noted that an improvement in the spreads on Italian
government securities in the first quarter of 2012 has reduced the above deficit at 31 March 2012 to 865 million euros.
Other events after the end of the reporting period are described in the above notes. No other material events have taken
place after 31 December 2011.
Notes to the consolidated financial statements | Attestation of the separate and consolidated financial statements for the year ended 31 December 2011 265
Attestation of the separate and consolidated financial statements for the year
ended 31 December 2011 pursuant to art.154-biss of Legislative Decrree 58/1998
1. The undersigned, Massimo Sarmi, as Chief Executive Officer, and Alessandro Zurzolo, as Manager responsible for Poste Italiane
SpAs 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, attest to:
the adequacy with regard to the nature of the Company and
the effective application of the administrative and accounting procedures adopted in preparation of the separate and
consolidated financial statements during 2011.
2. In this regard, it should be noted that:
2.1 as highlighted in the Internal Control-Integrated framework model issued by the Committee of Sponsoring Organizations of the
Treadway Commission, which represents the international standard body of generally accepted principles of internal control, as
expressly referred to by Confindustria (the main organization representing Italian manufacturing and services companies) in its
Guidelines for the role of Manager responsible for financial reporting pursuant to art.154-bis of the Consolidated Law on Finance, an
internal control system, no matter how well designed and implemented, can only provide reasonable, not absolute, assurance that
the companys objectives will be achieved, including true and fair financial reporting;
2.2 following the formation during the year of BancoPostas ring-fenced capital, further updating and assessment of administrative
and accounting procedures is planned.
3. We also attest that:
3.1 the separate and consolidated financial statements:
a) have been prepared in compliance with the International Financial Reporting Standards endorsed by the European
Union through EC Regulation 1606/2002, issued by the European Parliament and by the Counsel on 19 July 2002;
b) are consistent with the underlying accounting books and records;
c) give a true and fair view of the financial position and results of operations of the Company and its subsidiaries included in
the basis of consolidation.
3.2 the Directors Report on Operations includes a reliable operating and financial review of the Company and of the Group, as well
as a description of the main risks and uncertainties to which they are exposed.
Rome, Italy 18 April 2012
Chief Executive Officer
Manager responsible for financial reporting
Massimo Sarmi
Alessandro Zurzolo
(This certification has been translated from the original which was issued in accordance with Italian legislation)
266
BOARD OF STATUTORY AUDITORS’ REPORT ON THE
POSTE ITALIANE GROUP’S CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011
To the General Meeting of Shareholders of Poste Italiane SpA
The Poste Italiane Group’s consolidated financial statements for the year ended 31 December 2011, which report profit for
the year of 846,381 thousand euros (1,017,921 thousand euros for the year ended 31 December 2010), have been prepared
by the Parent Company, in accordance with the provisions of EC Regulation 1606/2002, under international financial reporting standards (IFRS). The financial statements consist of the statement of financial position, the income statement, the
statement of comprehensive income, the statement of changes in Equity, the statement of cash flows and the notes to
the financial statements, accompanied by the Directors’ Report on Operations.
The notes provide a clear description of the basis of accounting used, the specific accounting standards chosen and
applied, and the impact of related party transactions on the results of operations and the financial position.
The statement of financial position format uses the current/non-current distinction, whilst the separate income statement
has been prepared using the nature of expense method, and the statement of cash flows using the indirect method.
The Board acknowledges that the independent auditors, PricewaterhouseCoopers SpA, issued their opinion on the consolidated financial statements on 27 April 2012.
In conclusion, our review of the criteria adopted in the preparation of the consolidated financial statements, with particular
reference to the basis of consolidation and the consistent application of accounting standards, did not reveal any significant
aspects or information to be included in this Report.
Rome, Italy
27 April 2012
THE BOARD OF STATUTORY AUDITORS
Silvana Amadori
Ernesto Calaprice
Francesco Ruscigno
- Chairwoman
- Auditor
- Auditor
Board of Statutory Auditors’ Report | Indipendent Auditors’ Report 267
INDEPENDENT AUDITORS’ REPORT
268
Indipendent Auditors’ Report 269
270
274
271
POSTE ITALIANE SPA
SEPARATE FINANCIAL STATEMENTS
for the year ended 31 December 2011
statements and notes
ANNUAL REPORT
2011
272
CONTENTS
STATEMENT OF FINANCIAL POSITION
274
STATEMENT OF FINANCIAL POSITION (continued)
275
INCOME STATEMENT
276
STATEMENT OF COMPREHENSIVE INCOME
277
STATEMENT OF CHANGES IN EQUITY
278
STATEMENT OF CASH FLOWS
279
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
280
1. Introduction
280
2. Basis of accounting
281
3. Risk management
297
4. Property, plant and equipment
315
5. Investment property
317
6. Intangible assets
318
7. Investments
319
8. Financial assets attributable to BancoPosta
322
9. Financial assets
328
10. Trade receivables
332
11. Other receivables and assets
337
12. Cash and deposits attributable to BancoPosta
339
13. Cash and cash equivalents
340
14. Non-current assets held for sale
341
15. Share capital
341
16. Shareholder transactions
341
17. Reserves
342
18. Provisions for liabilities and charges
343
19. Staff termination benefits
345
20. Financial liabilities attributable to BancoPosta
346
273
21. Financial liabilities
348
22. Trade payables
352
23. Other liabilities
354
24. Revenues from sales and services
358
25. Other income from financial activities
361
26. Other operating income
362
27. Cost of goods and services
363
28. Other expenses from financial activities
365
29. Staff costs
365
30. Depreciation, amortisation and impairments
367
31. Other operating costs
368
32. Finance income/costs
369
33. Income tax expense
371
34. Related party transactions
375
35. Other information
380
36. Event after 31 December 2011
384
37. BancoPosta’s separate Report
384
ATTESTATION OF THE SEPARATE AND CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2011 PURSUANT TO
ART. 154-BIS OF LEGISLATIVE DECREE 58/1998
482
BOARD OF STATUTORY AUDITORS’ REPORT
483
INDIPENDENT AUDITORS’ REPORT
485
ANNUAL REPORT
2011
274
STATEMENT OF FINANCIAL POSITION
ASSETS
(€)
Non-current assets
Investment property
Intangible assets
Investments
Financial assets
Trade receivables
Deferred tax assets
Note
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[33]
[11]
[10]
[33]
[11]
[8]
[9]
[12]
[13]
1,488,002,996
748,089,320
1,465,574
3,596,776,282
38,477,065
574,158,696
10,291,916,110
619,993,481
2,559,994,557
1,208,802,583
2,326,179,207
23,309,971
7,854,036,390
512,331,179
829,399,265
18,890,118,774
Total
2,621,453,754
80,196,885
370,975,799
1,488,002,996
26,377,257,057
1,188,597,779
181,554,500
1,578,467,952
222,363,309
34,108,870,031
Total
Current assets
Trade receivables
Current tax assets
Financial assets
31 december of which related 31 december of which related
2011 party transactions
[14]
TOTAL ASSETS
6,567,591
2,805,563,230
92,023,096
358,346,118
1,017,399,927
26,649,993,015
1,475,844,530
216,582,794
660,248,178
231,339,281
- 2,965,692,335
77,017,157
344,913,756
1,017,399,927
1,074,632,600
- 25,409,884,602
980,063,391
951,679,312
254,314,890
550,163,995
1,465,574
239,850,974
33,507,340,169
31,868,149,621
3,506,235,104
38,456,667
539,167,151
10,198,710,094
611,312,013
2,351,245,239
907,979,930
2,352,524,077
7,088,980
7,002,688,553
601,029,712
840,623,654
18,153,106,198
-
53,005,556,396
1 January of which related
2,963,967
3,829,941,293
37,701,684
548,173,838
11,004,679,473
523,902,073
2,660,695,939
1,598,563,915
1,074,632,600
847,533,069
1,465,574
2,448,579,313
5,171,185
7,295,611,330
520,369,872
1,515,828,586
20,203,658,215
-
51,663,410,334
1,285,006
-
52,073,092,842
(€)
Equity
Share capital
Reserves(*)
Retained earnings
Note
[15]
[17]
Total
Other liabilities
1,306,110,000
(1,010,555,287)
1,706,257,923
-
2,001,812,636
[18]
[19]
[20]
[21]
[33]
[23]
504,939,664
1,162,602,399
594,492,369
685,654,296
68,883,269
133,743,095
[18]
[22]
[33]
[23]
[20]
[21]
988,030,700
1,867,747,291
72,326,659
1,219,483,138
41,657,362,166
2,048,478,714
1,306,110,000
(44,430,537)
2,351,545,997
-
3,613,225,460
46,178,821
226,417,433
-
3,150,315,092
Total
Current liabilities
Trade payables
Other liabilities
31 december of which related 31 december of which related
8,556,155
890,073,597
85,707,406
182,456,966
772,085,605
395,302,348
1,297,780,519
83,079,605
1,372,820,531
139,270,751
136,492,332
1 January of which related
1,306,110,000
659,587,199
2,111,223,261
4,076,920,460
43,749,957
371,122,638
-
377,159,659
1,419,160,550
112,328,209
1,553,078,569
345,634,313
140,910,453
3,424,746,086
3,948,271,753
866,482,317
1,526,728,171
23,254,937
1,466,320,879
39,620,345,407
1,122,307,077
10,663,580
906,567,336
518,492,197 1,556,231,434
65,694,979
91,335,625 1,543,372,355
267,665,934 39,423,385,098
373,062,797
552,649,427
Total
47,853,428,668
44,625,438,788
44,047,900,629
53,005,556,396
51,663,410,334
52,073,092,842
(*)
The item includes the "Reserve for BancoPosta RFC", totalling 1 billion euros, established on 14 April 2011 via the attribution of retained earnings.
-
39,323,120
512,667,533
-
11,638,923
489,422,232
83,347,805
105,598,284
492,268,365
Statement of financial position 275
STATEMENT OF FINANCIAL POSITION (continued)
SUPPLEMENTARY STATEMENT SHOWING BANCOPOSTA RFC AT 31 DECEMBER 2011
ASSETS
(€)
Non-current assets
Investment property
Intangible assets
Investments
Financial assets
Trade receivables
Deferred tax assets
Note
[8]
[33]
Total
Current assets
Trade receivables
Current tax assets
Financial assets
[10]
[11]
[8]
[12]
[13]
Total
Intersegment relations net amount
TOTAL ASSETS
Capital Outside
the ring-fence
BancoPosta
RFC
Adjustments
Total
2,621,453,754
80,196,885
370,975,799
1,488,002,996
1,188,597,779
181,554,500
397,524,754
222,363,309
26,377,257,057
1,180,943,198
-
-
2,621,453,754
80,196,885
370,975,799
1,488,002,996
26,377,257,057
1,188,597,779
181,554,500
1,578,467,952
222,363,309
6,550,669,776
27,558,200,255
-
34,108,870,031
2,830,616,786
38,477,065
220,317,714
619,993,481
369,852,363
766,159,496
353,840,982
10,291,916,110
2,559,994,557
838,950,220
-
3,596,776,282
38,477,065
574,158,696
10,291,916,110
619,993,481
2,559,994,557
1,208,802,583
4,079,257,409
14,810,861,365
-
18,890,118,774
6,567,591
6,567,591
-
-
454,983,248
-
(454,983,248)
-
11,091,478,024
42,369,061,620
(454,983,248)
53,005,556,396
Capital Outside
the ring-fence
BancoPosta
RFC
Adjustments
Total
1,306,110,000
166,471,427
1,449,401,185
(1,177,026,714)
256,856,738
-
1,306,110,000
(1,010,555,287)
1,706,257,923
2,921,982,612
(920,169,976)
-
2,001,812,636
261,332,103
1,147,194,173
685,654,296
24,940,687
68,161,996
243,607,561
15,408,226
594,492,369
43,942,582
65,581,099
-
504,939,664
1,162,602,399
594,492,369
685,654,296
68,883,269
133,743,095
2,187,283,255
963,031,837
-
3,150,315,092
936,061,525
1,807,097,555
63,243,030
1,127,331,333
2,048,478,714
51,969,175
60,649,736
9,083,629
92,151,805
41,657,362,166
-
-
988,030,700
1,867,747,291
72,326,659
1,219,483,138
41,657,362,166
2,048,478,714
5,982,212,157
41,871,216,511
-
47,853,428,668
-
454,983,248
(454,983,248)
-
11,091,478,024
42,369,061,620
(454,983,248)
53,005,556,396
(€)
Equity
Share capital
Reserves
Retained earnings
Note
[17]
Total
Other liabilities
[18]
[19]
[20]
[33]
[23]
Total
Current liabilities
Trade payables
Other liabilities
Total
Intersegment relations net amount
[18]
[22]
[33]
[23]
[20]
This statement has been prepared pursuant to art. 2, paragraph 17-undecies of Law 10, which converted Law Decree 225
of 29 December 2010 into law. This requires the assets and contractual rights included in BancoPosta’s ring-fenced capital
(from now on: BancoPosta RFC) to be shown separately in the Company’s statement of financial position. Intersegment
relations between BancoPosta RFC and the Poste Italiane functions outside the ring-fence are disclosed in detail and in full
in BancoPosta RFC’s Separate Report [note 37]. The above statement shows net amounts.
276
INCOME STATEMENT
(€)
of which
related party
transactions
Note
2011
Other income from financial activities
Total revenue
[24]
[25]
[26]
9,467,613,859
124,693,133
166,478,613
9,758,785,605
2,960,148,980
23,904,864
9,571,584,813
281,082,134
169,298,042
10,021,964,989
2,967,539,321
16,130,464
Other expenses from financial activities
Staff costs
of which non-recurring costs/(income)
[27]
[28]
[29]
1,943,329,945
21,513,774
5,681,006,425
(54,714,714)
475,453,472
(8,420,690)
244,139,520
1,401,763,159
758,253,205
48,075
30,235,080
16,526,055
1,982,576,519
5,488,779
5,820,609,638
(66,319,745)
493,928,305
(9,183,898)
276,446,438
1,452,099,208
722,367,831
31,499,060
6,421,927
Finance costs
Finance income
[32]
[32]
146,503,771
135,323,930
1,390,583,318
25,275,151
70,351,247
157,727,593
143,649,699
1,438,021,314
27,691,368
64,193,963
Income tax expense
PROFIT FOR THE YEAR
[33]
692,044,690
698,538,628
-
708,986,503
729,034,811
-
[30]
[31]
2010
of which
related party
transactions
Income statement | Statement of comprehensive income 277
STATEMENT OF COMPREHENSIVE INCOME
(€)
2011
2010
698,538,628
729,034,811
[17.1]
(2,675,514,966)
(68,552,823)
(860,640,367)
(348,048,366)
Cash flow hedges
[17.1]
(148,109,936)
(71,033,963)
86,062,091
33,375,608
Actuarial gains/(losses) on provisions for staff termination benefits
[19.1]
62,236,464
68,866,129
Taxation of items recognised directly in,
or transferred from, Equity
[33.9]
941,023,772
327,655,094
Total other components of comprehensive income
(1,959,951,452)
(692,729,811)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(1,261,412,824)
36,305,000
Note
278
STATEMENT OF CHANGES IN EQUITY
Equity
Reserves
(€)
Share capital
Legal
Reserve for
reserve BancoPosta RFC
Retained earnings/
Fair value Cash flow hedge
(Accumulated
reserve
reserve
losses)
Total
1,306,110,000
148,350,908
-
630,213,860
(118,977,569)
2,111,223,261
4,076,920,460
Total comprehensive income
for the year
-
-
-
(824,016,935)
81,359,181
778,962,754
36,305,000
-
38,640,018
-
-
-
(38,640,018)
-
Dividends paid
-
-
-
-
-
(500,000,000)
(500,000,000)
1,306,110,000
186,990,926
-
(193,803,075)
(37,618,388)
2,351,545,997
3,613,225,460
Total comprehensive income
for the year
-
-
-
(1,856,719,357)
(148,353,531)
-
38,948,138
-
-
-
(38,948,138)
-
Dividends paid
-
-
-
-
-
(350,000,000)
(350,000,000)
-
-
1,000,000,000
-
- (1,000,000,000)
-
1,306,110,000
225,939,064
(*)
1,000,000,000 (2,050,522,432)
(185,971,919)
743,660,064(*) (1,261,412,824)
1,706,257,923
2,001,812,636
This item includes profit for the year of 698,539 thousand euros, actuarial gains on provisions for staff termination benefits of 62,236 thousand euros after
the related current tax expense of 17,115 thousand euros.
Statement of changes in equity | Statement of cash flows 279
STATEMENT OF CASH FLOWS
Note
2011
2010
Profit/(loss) before tax
[30]
Impairments/(Reversals of impairments) of investments
[7]
[18]
Use of provisions for liabilities and charges
[18]
Staff termination benefits paid
(Gains)/Losses on disposals
[26]
(Gains)/Losses on financial transactions
(Dividends)
[32]
Dividends received
(Finance income realised)
[32]
(Finance income in form of interest)
[32]
Interest received
Interest expense and other finance costs
[32]
Interest paid
Losses and impairments/(Recoveries) on receivables
[31]
Income tax paid
[33]
Other changes
Cash generated by operating activities before changes in working capital
[a]
Changes in working capital:
(Increase)/Decrease in Trade receivables
(Increase)/Decrease in Other receivables and assets
Increase/(Decrease) in Trade payables
Increase/(Decrease) in Other liabilities
Cash generated by/(used in) changes in working capital
[b]
Increase/(Decrease) in liabilities attributable to BancoPosta
Net cash generated by/(used for) financial assets held for trading
Net cash generated by/(used for) available-for-sale financial assets
Net cash generated by/(used for) held-to-maturity financial assets
(Increase)/Decrease in other financial assets attributable to BancoPosta
(Increase)/Decrease in cash and deposits attributable to BancoPosta
Cash generated by/(used for) financial assets and liabilities attributable to BancoPosta
[c]
Net cash flow from /(for) operating activities
[d]=[a+b+c]
Investing activities:
[4]
Investment property
[5]
Intangible assets
[6]
Investments
Disposals:
Property, plant and equipment, investment property and assets held for sale
Investments
Net cash flow from /(for) investing activities
[e]
Proceeds from/(Repayments of) long-term borrowings
(Increase)/Decrease in loans and receivables
Increase/(Decrease) in short-term borrowings
Dividends paid
[16]
Net cash flow from/(for) financing activities and shareholder transactions
[f]
[g]=[d+e+f]
Net increase/(decrease) in cash
907,980
1,390,583
475,454
7,200
439,611
(207,887)
(132,050)
(40,634)
(98,593)
(70)
59
(20,318)
(112,497)
63,200
143,193
(58,334)
(5,238)
(722,055)
884
1,122,508
1,598,564
1,438,021
493,928
61,671
403,467
(426,444)
(110,223)
(63,825)
(281,338)
(121)
103
(35,810)
(102,119)
53,810
152,084
(76,160)
56,016
(747,543)
686
816,203
(54,496)
30,418
344,658
(253,259)
67,321
2,002,015
(6)
(1,069,548)
347,069
(1,321,981)
(208,749)
(251,200)
938,629
(563,934)
299,608
44,798
(29,503)
(81,682)
233,221
172,624
112,710
(244,156)
(1,510,042)
422,285
309,451
(737,128)
312,296
626,811
(189,062)
(212)
(154,226)
(444,050)
(124,911)
(223,968)
(469)
(155,800)
(4,480)
(853,155)
45,232
7,941
210,280
(649,008)
(300,519)
55,094
154,526
151,582
(350,000)
11,202
38,792
300,823
80,146
42
110,365
(1,047,319)
(403,925)
(179,739)
155,237
568,941
(500,000)
44,439
(605,516)
(690,584)
(€/000)
[13]
1,208,803
907,980
[13]
1,208,803
907,980
(323,987)
-
(17,765)
867,051
(26,647)
881,333
280
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
1 - INTRODUCTION
Poste Italiane SpA derives from the conversion of the Public Entity, Poste Italiane, under Resolution 244 of 18 December
1997 passed by the Interministerial Economic Planning Committee. The Company’s registered office is at Viale Europa 190,
Rome (Italy) and it is a wholly owned subsidiary of the Ministry of the Economy and Finance (hereinafter also referred to
as the “MEF”).
The Company provides a Servizio Postale Universale (a Universal Postal Service, provided under a Universal Service
Obligation) in Italy, whilst offering integrated communication, logistics, financial and insurance products and services
throughout the country via its national network of around 14,000 post offices. The Company operates in the three segments
of Postal Services, Financial Services and Insurance Services, which are supplied by the various business units and Group
companies. Postal Services include Mail, Express Delivery, Logistics and Parcels, and Philately. Financial Services regard
the activities of BancoPosta listed in art. 2 of Presidential Decree 144 of 14 March 2001, and primarily refer to the collection of public deposits in all their forms, the supply of payment services, foreign currency trading, the promotion and marketing of loans issued by banks and other authorised financial institutions, and the provision of investment services. Poste
Italiane SpA increasingly aims to supply integrated services and innovative solutions to the general public, to firms and to
central and local government by exploiting its own distribution channels as well as the multiple and complementary competencies of its business units.
On 26 February 2011, art. 2, paragraphs 17-octies et seq. of Law 10, which converted Law Decree 225 of 29 December
2010 into law, provided that Poste Italiane SpA’s shareholder should form ring-fenced capital to be used in relation to
BancoPosta’s operations only, as governed by Presidential Decree 144 of 14 March 2001. The ensuing resolution, which was
approved by the General Meeting held on 14 April 2011 and filed with the Companies’ Register on 2 May 2011, required the
Parent Company to establish ring-fenced capital of 1 billion euros. On 11 July 2011 the Court of Rome certified the absence
effective from 2 May 2011 (note 2.2).
These financial statements for the year ended 31 December 2011 have been prepared in euros, the currency of the economy in which the Company operates. They consist of the statement of financial position, which includes a supplementary
statement showing the separate components of the ring-fenced capital, the income statement, the statement of comprehensive income, the statement of changes in Equity, the statement of cash flows and the following notes, which include
BancoPosta RFC’s Separate Report (note 37). All amounts in the consolidated financial statements and the notes are shown
in thousands of euros, unless otherwise stated.
Poste Italiane SpA’s consolidated financial statements are published together with this document.
Notes to the separate financial statements 281
2 - BASIS OF ACCOUNTING
2.1 - BASIS OF PREPARATION
Poste Italiane SpA prepares its financial statements under the International Financial Reporting Standards (IFRS) issued by
the International Accounting Standards Board (IASB), and adopted by the European Union in EC Regulation 1606/2002 of
19 July 2002, and pursuant to Legislative Decree 38 of 20 February 2005, which introduced regulations governing the adoption of IFRS in Italian law.
The term IFRS includes all the International Financial Reporting Standards, International Accounting Standards (IAS) and
interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC, previously known as the
Standing Interpretations Committee or SIC), adopted by the European Union and container in the EU regulations published
through to 18 April 2012, the date on which the Board of Directors of Poste Italiane SpA approved these financial statements as part of the Annual Report.
Legislative Decree 195 of 6 November 2007, which implemented Directive 2004/109/EC that standardised the transparency requirements relating to the information published by issuers whose financial instruments are traded on a regulated market (the so-called Transparency Directive), has amended Legislative Decree 58 of 24 February 1998 (the Consolidated Law
on Finance), introducing the definition “listed issuers whose home member State is Italy”. Given that Poste Italiane SpA
falls within this definition as an issuer of bonds listed on the Luxembourg Stock Exchange, during preparation of this document the CONSOB regulations contained in Resolution 15519 of 27 July 2006 and in Ruling DEM/6064293 of 28 July 2006
were taken into account.
The accounting policies adopted, as described in note 2.3, reflect the fact that the Company will remain fully operational in
the foreseeable future, in accordance with the going concern assumption. The accounting policies are consistent with those
applied in the preparation of the financial statements for the year ended 31 December 2010.
The statement of financial position has been prepared on the basis of the current/non-current distinction1. The format of the
income statement is based on the nature of expenses. The statement of cash flows has been prepared in accordance with
the indirect method2.
As required by CONSOB Resolution 15519 of 27 July 2006, each item in the statement of financial position, income statement and statement of cash flows shows the amounts deriving from related party transactions. The income statement also
shows, where present, income and expenses deriving from material non-recurring transactions or from non-recurring
events. Taking account of the different nature and the number of transactions carried out by the Company, many items of
income and expense of a non-recurring nature may occur with significant frequency. These items of income and expense
are only presented separately when they are both of an exceptional nature and were generated by a transaction of a material nature.
Pursuant to art. 2447-septies of the Italian Civil Code, following the formation of BancoPosta’s ring-fenced capital in 2011,
the assets and contractual rights included in BancoPosta’s ring-fenced capital (from now on: BancoPosta RFC) are shown
separately in Poste Italiane SpA’s statement of financial position, in a specific supplementary statement, and in the notes
to the financial statements. Comparative amounts at 31 December 2010 are included for the purpose of full disclosure as
BancoPosta RFC had not yet been established at that date.
Following the formation of BancoPosta’s ring-fenced capital, certain components of the statement of financial position at
31 December 2011, a number of items in the income statement and the related notes have been reclassified with respect
to previous statements. This classification was also made necessary by the fact that the components of the ring-fenced
capital are accounted for, where applicable, in accordance with Bank of Italy Circular 262 – Banks’ Financial Statements:
Layout and Presentation. In order to provide a like-for-like basis for comparison with 2010, and in accordance with the
requirements of paragraph 39 of IAS 1 – Presentation of Financial Statements3, amounts in the statements of financial position at 31 December 2010 and 2009 and items in the statement of cash flows for 2010 have also been reclassified.
At the date of approval of these consolidated financial statements, there is no established practice on which to base inter1. Current assets include assets (such as inventories and trade receivables) that are sold, consumed or realised as part of the normal operating cycle even
when they are not expected to be realised within twelve months after the reporting period (paragraph 68, Revised IAS 1).
2. 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.
3. Paragraph 39 of IAS 1 - Presentation of Financial Statements states that when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements or when it reclassifies items in its financial statements, it shall present, as a minimum, three statements of financial position, two of each of the other statements and the related notes.
282
pretation and application of newly published, or revised, international accounting standards. The tax authorities have only
issued systematic official interpretations for a number of the effects of the tax-related measures contained in Legislative
Decree 38 of 20 February 2005, Law 244 of 24 December 2007 (the 2008 Budget Law) and the Ministerial Decree of 1
April 2009, implementing the 2008 Budget Law, which have introduced numerous changes to IRES and IRAP. In the meantime, the MEF Decree issued on 8 June 2011 contains instructions regarding the coordinated application of EU-endorsed
international accounting standards coming into effect between 1 January 2009 and 31 December 2010, in addition to regulations governing determination of the tax bases for IRES and IRAP. This does not, however, cover all aspects and, in view
of the fact that the Decree has only recently been issued, there are no significant legal interpretations or specific examples
of best practice. The consolidated finance statements have, therefore, been prepared on the basis of the best knowledge
currently available and taking account of best practice in this regard. Any future changes or updated interpretations will be
reflected in subsequent reporting periods, in accordance with the specific procedures provided for by the related standards.
2.2 - INFORMATION ON BANCOPOSTA RFC
The resolution approved by Poste Italiane SpA’s shareholder at the Extraordinary General Meeting of 14 April 2011 to establish legally ring-fenced capital for BancoPosta became effective on 2 May 2011. The resulting capital is aimed at
BancoPosta’s operations only, assuring the regular settlement of its obligations and serving as regulatory capital for the
Bank of Italy4 (from now on: “BancoPosta RFC”). The same shareholder resolution approved BancoPosta RFC’s By-laws and
established an initial reserve via the attribution of 1 billion euros from Poste Italiane SpA’s retained earnings.
The separation of BancoPosta from Poste Italiane SpA is only partly comparable to other ring-fenced capital solutions and
in particular to what is provided for in the Italian Civil Code in this respect. Indeed, BancoPosta is not expected to meet the
requirements of arts. 2447-bis, et seq., of the Italian Civil Code or of other special purpose entities, in that it has not been
established for a single specific business but rather, pursuant to Presidential Decree 144 of 14 March 2001, for several
types of financial activities to be regularly carried out for an unlimited period of time. Art. 2, paragraphs 17-octies, et seq.,
of Law 10 of 26 February 2011, which converted Law Decree 225 of 29 December 2010 into law, does not impose the 10%
limit on BancoPosta’s Equity, waiving the provisions of Italian Civil Code unless expressly cited as applicable.
Nature of Assets, Contractual Rights and Authorisations
BancoPosta’s assets, contractual rights and authorisations pursuant to notarial deed were conferred on BancoPosta RFC
exclusively by Poste Italiane SpA without third-party contributions. BancoPosta’s operations consist of those listed in
Presidential Decree 144 of 14 March 2001, as amended, namely:
• the collection of savings from the public in accordance with art. 11, para. 1 of Legislative Decree 385/1993 of 1 September
1993 - Consolidated Banking Law (Testo Unico Bancario)- and all related and consequent activities;
• the collection of savings through postal securities and deposits;
• payment services, including the issuance, administration and sale of prepaid cards and other payment instruments pursuant to art. 1, para. 2, letter f) numbers 4) and 5), TUB;
• foreign exchange brokerage services;
• promotion and placement to the public of loans issued by approved banks and financial brokers;
4. In detail:
• The shareholder at the Extraordinary General Meeting of 14 March 2001 approved a resolution to establish, in accordance with Law Decree 225 of 29
December 2010, converted with amendments by Law 10 of 26 February 2011, a ring-fenced entity called BancoPosta RFC exclusively for Poste Italiane’s
Financial Services segment, as regulated by Presidential Decree 144 of 14 April 2011, to serve as regulatory capital for the purposes of Bank of Italy supervision. BancoPosta RFC’s By-laws, containing the rules for BancoPosta’s organisation, management and control were approved by the same resolution.
• The shareholder resolution was filed and recorded on 2 May 2011 as required by art. 2, paragraph 17-novies of Legislative Decree 225 of 29 December
2010 at Rome Companies’s Register, as required by art. 2436 of the Italian Civil Code.
• On 22 June 2011, Poste Italiane’s Board of Directors approved, as authorised by the resolution of the Extraordinary General Meeting of 14 April 2011,
BancoPosta RFC’s opening statement of financial position at 2 May 2011.
• The 60-day period for creditors to file objections to the resolution of the Extraordinary General Meeting of 14 April 2011 lapsed on 2 July 2011 without, as
certified by the Court of Rome, objections having been raised.
• BancoPosta FRC was, consequently, deemed established on 2 May 2011.
• investment and related services pursuant to art. 12, Presidential Decree 144/2001.
All of the assets and rights arising out of various contracts, agreements and legal transactions related to the above activities have also been conferred on BancoPosta RFC5.
Cost and revenue allocation
Given the fact that Poste Italiane is a single legal entity, the Company’s general accounting system maintains its uniform
characteristics and capabilities. In this context, the general principles governing administrative and accounting aspects of
BancoPosta RFC are as follows:
• identification of transactions in Poste Italiane SpA’s general ledgers relating to BancoPosta’s ring-fenced operations which
are then extracted for recording in BancoPosta’s separate ledgers;
• allocation to BancoPosta of all relevant revenues and costs. In particular the services rendered by the different functions
of Poste Italiane SpA to BancoPosta RFC, are exclusively recorded as payables in BancoPosta’s separate books, in special accounts only, and subsequently settled;
• settlement of all incoming and outgoing third party payments by the Poste Italiane SpA Finance function;
• allocation of income taxes based on BancoPosta’s separate income statement after adjusting for deferred taxation;
• reconciliation of BancoPosta’s separate books to Poste Italiane’s general ledger.
Separate General Operating Guidelines have been developed and approved by Poste Italiane SpA’s Board of Directors
which, in implementation of BancoPosta RFC’s By-laws, identify the services provided by Poste Italiane SpA functions to
BancoPosta and determine the manner in which they are remunerated. Costs are allocated to BancoPosta by transfer pricing as determined with reference to:
• cost plus a mark-up, e.g., the cost plus method, when market prices are not available for the particular type of services provided by Poste Italiane SpA. Costs are determined by unbundling total costs incurred with the application of the
same process used for Universal Postal Service purposes in the related regulatory accounting records, which are sub-
5. All assets, contractual rights and authorisations were conferred on BancoPosta as required to engage in following types of operations:
a. Contracts for the collection of savings from the public (e.g., postal current accounts) and related services (e.g., issuance of postal cheques, postal a/c
bills, credit cards, collections and payments services, direct debits);
b. Contracts for the provision of payment services including the issuance, management and sale of payment cards, including prepaid cards (e.g., “postamat”, “postepay”), and money transfers (e.g., post office money orders);
c. Investment services contracts (e.g., brokerage, distribution and investment advisory services) and related services (e.g., securities custody);
d. Agreements with Cassa Depositi e Prestiti SpA in connection with collection of savings through postal securities and deposits;
e. Agreements with approved banks and brokers for the promotion and lending to the public (e.g. mortgages, personal loans);
f. Agreements with approved banks and brokers for acquiring and payment services;
g. Agreements with approved brokers to promote and place financial instruments, bancassurrance and insurance products (e.g., share, bond and mutual
fund subscriptions, life and non-life insurance);
h. Other agreements relating to BancoPosta services;
i. Contracts and related legal arrangements with BancoPosta employees belonging to a separate cost centre;
j. Contracts with suppliers to the BancoPosta costs centre and related legal arrangements;
k. Shares and investments in companies, consortia, payment/credit card issuers or money transfer service companies;
l. Euro zone government securities, held pursuant to art. 1, paragraph 1097 of Law 296 of 27 December 2006, and related valuation reserves;
m.Accounts payable (e.g., postal current accounts) and receivable in connection with the above points;
n. Intersegment accounts payable and receivable respectively to and from Poste Italiane;
o. Deferred tax assets and liabilities relating to BancoPosta;
p. Post office and bank account cash balances associated with BancoPosta business;
q. “Buffer” account at the Treasury, Ministry of the Economy and Finance;
r. Cash deposits at the Treasury, Ministry of the Economy and Finance relating to Public Sector balances held in post offices;
s. Cash and cash equivalent in connection with BancoPosta operations;
t. Litigation relating to BancoPosta and associated settlements;
u. Provisions in connection with BancoPosta RFC’s contractual and legal obligations.
284
ject to independent audit. The mark-up is determined taking into account the market prices of BancoPosta’s principal
services.
The resulting transfer prices are reviewed annually as part of the planning and budget process.
Obligations
Poste Italiane SpA’s liability, pursuant to art. 2, paragraph 17-novies of Law 10, which converted Law Decree 225 of 29
December 2010 converted into Law, to creditors of BancoPosta is limited to the ring-fenced capital, represented by the
assets and contractual rights originally allocated or arisen after the separation. Poste Italiane’s liability is, however, unlimited with respect to claims arising from actions in tort relating to the management of BancoPosta or for transactions for
which no indication was made that the obligation was taken specifically by BancoPosta RFC. The By-laws approved at the
Extraordinary General Meeting of Poste Italiane SpA’s shareholder provide that BancoPosta RFC’s Equity shall be sufficient
to support the risk inherent in its operations.
Separate Report
As required by law, at the end of each reporting period Poste Italiane SpA prepares a Separate Report on BancoPosta RFC’s
financial position and results of operations, in compliance with the same EU-endorsed international accounting standards
adopted by Poste Italiane SpA, and also, where applicable, in conformity with Bank of Italy Circular 262 - Banks’ Financial
Statements: Layouts and Preparation. The Report consists of the statement of financial position, the income statement,
the statement of comprehensive income, the statement of changes in Equity, the statement of cash flows and explanatory notes. The Separate Report is an integral part of the Company’s financial statements (note 37).
2.3 - SUMMARY OF SIGNIFICANT ACCOUNTING STANDARDS AND POLICIES
Poste Italiane SpA’s financial statements have been prepared on a historical cost basis, with the exception of certain items
that must be measured at fair value. The significant accounting standards and policies are described below.
Property, plant and equipment is stated at cost, less accumulated depreciation and any accumulated impairment losses.
The cost includes any directly attributable costs of making the asset ready 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
acquisition or construction of a qualifying asset, in which case the borrowings costs are capitalised as part of the cost of
that asset). The costs incurred for routine and/or cyclical maintenance and repairs are recognised directly in the income
statement in the year in which they are incurred. The capitalisation of costs attributable to the extension, modernisation
or improvement of assets owned by the Company or held under lease is carried out to the extent that they qualify for separate classification as an asset or as a component of an asset, applying the component approach, which states that each
component with a different useful life and value is recognised separately. The original cost is depreciated on a straightline basis from the date the asset is available and ready for use, with reference to the asset’s expected useful life.
The useful life and residual value of property, plant and equipment are reviewed annually and adjusted, where necessary,
at the end of each year. Land is not depreciated. When a depreciable asset consists of separately identifiable components,
with useful lives that are significantly different from those of the other components of the asset, each component is
depreciated separately, in application of the component approach, over a period that does not, however, exceed the life
of the principal asset. The Company has estimated the following useful lives for the various categories of property, plant
and equipment:
Category
Buildings
Structural improvements to own assets
Plant
Electronic stations
Light constructions
Equipment
Furniture and fittings
Electrical and electronic office equipment
Motor vehicles
Other assets
(*)
Years
33
20
5-10
6
10
8
8
5
4-5
Estimated lease term(*)
3-5
Or the useful life of the improvement if shorter than the estimated lease term.
Property assets and the related fixed plant and machinery located on land held under concession or sub-concession, which
is to be handed over free of charge to the grantor at the end of the concession term, are accounted for, on the basis of the
type of asset, in 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.
Gains and losses deriving from the disposal or retirement of an asset are determined as the difference between the disposal proceeds and the net carrying amount of the asset retired or sold, and are recognised in the income statement in
the year the transaction takes place.
Investment property
Investment property regards land or buildings held to earn rentals or for capital appreciation or both, thus producing cash
flows that are largely separate from other assets. The same accounting standards and policies are applied to investment
property as those applied to property, plant and equipment.
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, which is controlled by the Group and
from which future economic benefits are expected to flow to it. Intangible assets are recognised at cost, including any
directly attributable costs of making the asset ready for its intended use, less accumulated amortisation, where applicable,
and any accumulated impairment losses. Borrowing costs incurred for the development of intangible assets are recognised
development of a qualifying asset, in which case the borrowings costs are capitalised as part of the cost of that asset).
Amortisation is applied from the date the asset is ready for use and is provided systematically on the basis of the remaining useful life of the asset, or its estimated useful life.
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 use life and the
related contract term from the date the right may be exercised.
Amortisation is calculated on the basis of the estimated useful life of the software, which is as a rule three years.
286
Leased assets
Assets held under finance leases, where the risks and rewards of ownership are substantially transferred to the Company,
are recognised at fair value or, if lower, at the present value of the minimum lease payments. The corresponding liability,
represented by the capital element of future lease payments, is recognised in the statement of financial position as a financial liability. These assets are depreciated applying the same policies and rates previously described for property, plant and
equipment.
Leases where the lessor retains substantially all the risks and rewards of ownership qualify as operating leases. Payments
made under operating leases are recognised in the income statement on a straight-line basis over the lease term.
Impairment of assets
At the end of each reporting period, the Company reviews the value of its property, plant, equipment and intangible assets
with finite lives to assess whether there is any indication that an asset may be impaired. If any indication exists, the
Company estimates the recoverable amount of the asset in order to determine the impairment loss to be recognised in the
income statement. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use, represented by the present value of the future cash flows expected to be derived from the asset. In calculating value in use,
future cash flow estimates are discounted using a pre-tax rate that reflects current market assessments of the time value
of money and the risks specific to the business. The realisable value of assets that do not generate separate cash flows is
determined with reference to the cash generating unit to which the asset belongs. An impairment loss is recognised for
the amount by which the carrying amount of the asset, or the cash generating unit to which it belongs, exceeds its recoverable amount. When an impairment no longer exists, the carrying amount of the asset is reinstated and the reversal recognised in the income statement. The reversal must not exceed the carrying amount that would have been determined had
no impairment loss been recognised and had depreciation or amortisation been charged.
Investments
Investments in subsidiaries and associates are accounted for at cost (including any directly attributable incidental expenses), after adjustment for any impairments. Investments in subsidiaries and associates are tested annually for impairment
or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment is recognised in the income statement as an impairment loss. When an impairment no longer exists, the carrying
amount of the asset is reinstated and the reversal recognised in the income statement. The reversal must not exceed the
carrying amount that would have been determined had no impairment loss been recognised.
Financial instruments
Financial instruments include financial assets and liabilities that are classified on initial recognition, based on the business
purpose for which they were acquired. Purchases and sales of financial instruments are recognised in each category on the
transaction date, representing the date on which the Group commits to purchase or sell the asset, or, in the case of the
insurance business and BancoPosta’s operations, at the settlement date6. In BancoPosta’s case, this almost always coincides with the transaction date. Changes in fair value between the transaction date and the settlement date are, in any
event, recognised in the financial statements.
Financial assets
On initial recognition, financial assets are classified in one of the following four categories and accounted for 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
6. This is possible for transactions carried out on organised markets (the so-called “regular way”).
or loss on initial recognition, 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 are treated as assets and 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.
• Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market, and primarily regard amounts due from customers, including trade receivables. They are included in current
assets, except for maturities greater than twelve months after the end of the reporting period, which are classified as
non-current assets. These assets are carried at amortised cost7 using the effective interest method.
If there is objective evidence of an impairment, a provision for impairment is established on the basis of the present value
of estimated future cash flows. The resulting impairment loss is recognised in the income statement. When an
impairment no longer exists, the carrying amount of the asset is reinstated on the basis of the value that would have
resulted from application of the amortised cost method. The estimation procedure adopted in determining provisions for
doubtful debts primarily reflects the identification and measurement of elements resulting in specific reductions in the
value of individually significant assets. 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.
• Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and maturities that
the Company has a positive intention and ability to hold to maturity. These assets are carried at amortised cost using the
effective interest method, adjusted to reflect any impairment loss. The same policies as described in relation to loans and
receivables are applied if there is an impairment.
• Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial instruments that are either designated in this category or not
attributable to any of the other categories described above. These financial instruments are recognised at fair value and
any resulting fair value gains or losses are recognised in an Equity reserve. This reserve is only recycled through profit or
loss when the financial asset is effectively disposed of (or extinguished) or, in the event of accumulated losses, when
there is evidence that the impairment recognised in Equity cannot be recovered. Solely in the case of debt securities, if
the fair value subsequently increases as the objective result of an event that took place after the impairment loss was
recognised in the income statement, the value of the financial instrument is reinstated and the reversal recognised in the
income statement. Moreover, the recognition of returns on debt securities under the amortised cost method takes place
through profit or loss, as do the effects of movements in exchange rates, whilst movements in exchange rates relating
to available-for-sale equity instruments are recognised in a specific Equity reserve. The classification of an asset as current
or non-current depends on the strategic choice regarding how long to hold the asset and its effective negotiability. As a
result, financial instruments expected to be realised within twelve months of the end of the reporting period are classified
as current assets.
Financial assets are derecognised when the Company no longer has the right to receive cash flows from the investment
and it has substantially transferred all the related risks and rewards and control.
Financial liabilities, including borrowings, trade payables and other payment obligations, are carried at amortised cost using
the effective interest method. If there is a change in the expected cash flows and they can be reliably estimated, the value
7. The amortised cost of a financial asset or liability means the amount recognised initially, less principal repayments and plus or minus accumulated amortisation, using the effective interest method, of the difference between the initial amount and the maturity amount, after reductions for impairment and insolvency. The effective interest rate is the rate that exactly discounts contractual (or expected) future cash payments or receipts over the expected life of the
asset or liability to its initial carrying amount. Calculation of amortised cost must also include external costs and income directly attributable to the asset or
liability on initial recognition.
288
of borrowings is recalculated to reflect the change on the basis of the present value of estimated future cash flows and the
internal rate of return initially applied. Financial liabilities are classified as current liabilities, unless the Company has an
unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.
Financial liabilities are derecognised on settlement or when the Company has substantially transferred all the related risks
and rewards.
Derivatives are initially recognised at fair value on the date the derivative contract is entered into and if they do not qualify
for hedge accounting. Gains and losses arising from changes in fair value after initial recognition are accounted for as
finance income or finance costs in the income statement for the period.
If, on the other hand, derivative financial instruments qualify for hedge accounting, gains and losses arising from changes
in fair value after initial recognition are accounted for in accordance with the specific policies described below.
The Company documents the relationship between each hedging instrument and the hedged item, as well as its 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 on an ongoing
basis.
• Fair value hedges
Both changes in the value of fair value hedges and changes in the value of the hedged item are recognised in profit or
loss when the hedge regards recognised assets or liabilities or an unrecognised firm commitment8. When the hedging
transaction is not fully effective, resulting in differences between the above changes, the ineffective portion represents
a loss or gain recognised separately in other components of comprehensive income for the period.
• Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges9 after
initial recognition are recognised in a specific Equity reserve (Cash flow hedge reserve). A hedging transaction is generally
considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future
cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. Amounts
accumulated in Equity are reclassified to profit or loss in the periods when the hedged item will affect profit or loss.
In the case of hedges associated with a highly probable forecast transaction (such as, the forward purchase of fixed
income debt securities), the reserve is reclassified as a gain or a loss in profit or loss for the period or in the periods in
which the asset or liability, subsequently accounted for and connected to the above transaction, will affect profit or loss
(as, 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.
If, during the life of the derivative, the forecast hedged transaction is no longer expected to occur, the related gains and
losses accumulated in the Cash flow hedge reserve are immediately taken to profit or loss for the period. On the other
hand, when a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting,
the related gains and losses accumulated in the cash flow hedge reserve at that time remain in Equity and are recognised
in profit or loss at the same time as the original underlying transaction.
Determining the fair value of financial instruments
The fair value of financial instruments traded in active markets is based on quoted market prices (bid prices) at the end of
the reporting period. The fair value of financial instruments that are not traded on an active market is based on prices quoted by external dealers and on valuation techniques primarily based on objective financial variables, as well as by taking
account, where possible, of prices in recent transactions and quoted market prices for substantially similar instruments.
8. Fair value hedge: a hedge of the exposure to a change in fair value of a recognised asset or liability or of an unrecognised firm commitment attributable to
a particular risk, and that could have an impact on profit or loss.
9. A hedge of the exposure to the variability of cash flows attributable to a particular risk associated with an asset or liability or with a highly probable forecast
transaction, and that could have an impact on profit or loss.
Classification the receivables and payables attributable to BancoPosta RFC
In general, the 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
matching 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.
Income tax expense
The charge for current income tax expense (both IRES, or corporation tax, and IRAP, or regional tax) is based on taxable
profit for the period and the related regulations, applying the rates in force.
Deferred tax assets and liabilities are calculated on all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts, using tax rates that are expected to apply when the related deferred tax assets are
realised or the deferred tax liabilities are settled. Deferred tax assets and liabilities are not recognised if the temporary differences derive from investments in subsidiaries, where the timing of the reversal of the temporary difference is controlled
by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Moreover, under
IAS 12, deferred tax liabilities are not recognised on goodwill deriving from a business combination.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which
the temporary differences can be utilised.
Current and deferred taxes are recognised in the income statement, with the exception of taxes charged or credited directly to Equity. In this case the tax effect is recognised directly in the specific item in Equity.
Current and deferred tax assets and liabilities are offset when they are applied by the same tax authority to the same taxpaying entity, which has the legally exercisable right to offset the amounts recognised, and when the entity intends to exercise this right. As a result, even if accounted for in liabilities, tax liabilities accruing in interim periods that are shorter than
the tax year are not offset against the matching assets deriving from withholding tax or advances paid.
The Company’s tax expense and its accounting treatment reflect that effects deriving from the fact that Poste Italiane SpA
has adopted a tax consolidation arrangement, which it has elected to apply in accordance with the related law together
with the following subsidiaries: Poste Vita SpA, SDA Express Courier SpA and Mistral Air Srl. 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, 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 consolidation adjustments. Should the reductions or
increases in tax expense deriving from such adjustments be attributable to the companies included in the tax consolidation, to which the positive or negative income components adjusted in the process of consolidation refer, Poste Italiane
SpA shall attribute such reductions or increases in tax expense to the above companies. 50% of the economic benefit deriving from tax losses for the period transferred to the Company from companies included in the tax consolidation is passed
on to these companies by Poste Italiane SpA. The remaining benefit is covered by specific provisions for tax consolidation
losses, which is offset by a corresponding reduction in tax liabilities and attributed to the companies that generated such
benefit, should there be reasonable certainty that such companies will produce sufficient future taxable income to enable
them to recover the related deferred tax assets. Should such conditions not occur, the provisions, which represent the
Company’s potential debt to its subsidiaries, will be taken to Poste Italiane SpA’s income statement as a tax consolidation
gain. Consolidated tax expense is determined 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.
Other taxes not related to income are included in Other operating costs.
Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of fungible assets and goods for resale is calculated using the weighted average cost formula. In the case of non-fungible assets cost is measured on the basis of the
specific cost of the asset at the time of purchase.
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The above costs are adjusted, if necessary, by provisions for obsolete or slow moving stock. When the circumstances that
previously led to recognition of the above provisions no longer exist, or when there is a clear indication of an increase in
the net realisable value, the provisions are fully or partly reversed, so that the new carrying amount is the lower of cost and
net realisable value at the end of the reporting period.
Assets are not, however, accounted for in the statement of financial position when the Company has incurred an expense
that, based on the best information available at the date of preparation of the financial statements, it is deemed unlikely
that the economic benefits will flow to the Company after the end of the reporting period.
Cash and valuables held at post offices, and bank deposits attributable to the operations of BancoPosta, are accounted for
separately in Cash and cash equivalents as they derive from deposits subject to investment restrictions, or from advances
from the Italian Treasury to ensure that post offices can operate. This cash cannot be used for purposes other than to extinguish obligations deriving from the above transactions.
Cash and cash equivalents refer to cash in hand, deposits held at call with banks, amounts that at 31 December 2011 Poste
Italiane SpA has temporarily deposited with the MEF and other highly liquid short-term investments with original maturities of ninety days or less. Current account overdrafts are accounted for in current liabilities.
This category refers to non-current assets or assets included in disposal groups 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 in this category,
the depreciation process is halted at the date of the reclassification.
Equity
Share capital
The share capital is represented by the Company’s subscribed and paid-up capital. Incremental costs directly attributable
to the issue of new shares are recognised as a reduction of the share capital, net of any deferred tax effect.
Reserves
These regard capital or revenue reserves. They include, among other things, the Reserve for BancoPosta RFC, representing the initial reserve attributed to BancoPosta RFC, the Parent Company’s Legal reserve, the Fair value reserve, relating to
items recognised at fair value through Equity, and the Cash flow hedge reserve, deriving from recognition of the effective
portion of hedging instruments outstanding at the end of the reporting period.
Retained earnings
This item includes the portion of profit for the period and for previous periods that was neither distributed nor taken to
reserves or used to cover losses, and actuarial gains and losses deriving from the calculation of the liability for staff termination benefits. This item also includes transfers from other equity reserves, when they have been released from the
restrictions to which they were subject.
Provisions for contingencies and charges represent provisions for liabilities or losses that are either likely or certain to be
incurred, but that are uncertain as to the amount or as to the date on which they will arise. Provisions for liabilities and
charges are made when the Company has a present (legal or constructive) obligation as a result of a past event, and it is
more likely than not that an outflow of resources will be required to settle the obligation. Provisions are measured on the
basis of management’s best estimate of the expenditure required to settle the obligation. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the type
of liability concerned. Liabilities that may only possibly give rise to an outflow of resources are reported in a specific section of the notes on contingent assets and liabilities and no provisions are made.
When, in extremely rare cases, disclosure of some or all of the information regarding the liabilities in question can be
expected to prejudice seriously the Group’s position in a dispute or in ongoing negotiations with other parties, the Group
exercises the option granted by the relevant accounting standards to provide more limited disclosure.
Employee benefits
Post-employment benefits are of two types: defined contribution plans and defined benefit plans. Under defined contribution plans the contributions paid by the Company are recognised in the income statement when incurred, based on the
related face value. Under defined benefit plans, given that the benefit to be paid can only be quantified after the termination of employment, the related impact on the income statement and statement of financial position is recognised on the
basis of actuarial calculations.
Post-employment benefits: defined benefit plans
Defined benefit plans include staff termination benefits payable to employees pursuant to article 2120 of the Italian Civil
Code. Benefits vesting up to 31 December 200610, which are covered by the reform of supplementary pension provision,
must, from 1 January 2007, be paid into a supplementary pension fund or into a Treasury Fund set up by INPS. A company’s liabilities deriving from defined benefit plans thus only regard provisions made up to 31 December 200610.
The liability represents the present value of the defined benefit obligation at the end of the reporting period, calculated
using the projected unit credit method to take account of the time that will pass before effective payment of the benefits.
Calculation of the liability recognised in the financial statements is carried out by independent actuaries. The calculation
takes account of vested termination benefits for the period of service to date and is based on actuarial assumptions. These
primarily regard the use of interest rates, with terms to maturity approximating to the terms of the related obligation, and
staff turnover. Given that the Company is not liable for staff termination benefits accruing after 31 December 200610, the
actuarial calculation of staff termination benefits no longer takes account of future rises in salary. Actuarial gains and losses are recognised at the end of each reporting period, based on the difference between the carrying amount of the liability and the present value of the Company’s obligations at the end of the period, due to changes in the above actuarial
assumptions. These gains and losses are recognised directly in Equity.
Termination benefits and incentive schemes: defined contribution plans
Termination benefits are recognised in liabilities when the Company is demonstrably committed to terminating the employment of an employee or group of employees before the normal retirement date, and to providing termination benefits to
the employee or group of employees as a result of an offer made to encourage voluntary redundancy. The above benefits
are recognised immediately in Staff costs as they are not capable of generating future economic benefits for the Company.
10. Where, following entry into effect of the new legislation, the employee has not exercised any option regarding the investment of vested staff termination
benefits, the Company has remained liable to pay the benefits until 30 June 2007, or until the date, between 1 January 2007 and 30 June 2007, on which
the employee exercised a specific option. Where no option was exercised, from 1 July 2007 vested staff termination benefits have been paid into a supplementary pension fund.
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Foreign currency translation
Foreign currency transactions are translated into the presentation currency using the exchange rates prevailing at the dates
of the transactions. 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 foreign currencies are recognised in
the income statement.
Revenue recognition
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 transaction. Revenue from activities carried out in favour of or on behalf of the
state is recognised on the basis of the amount effectively accrued, with reference to the laws and agreements in force, and
in relation to amounts allocated in government budgets. Remuneration of deposits with the MEF of funds deriving from current account deposits are recognised on a time proportion basis, using the effective interest method. This income is classified in Revenues from ordinary activities. The same classification is applied to income from euro area government securities,
in which deposits paid into BancoPosta current accounts by private customers are invested. Revenue from the sale of goods
is recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyer.
Government grants
Government grants are recognised once they have been formally allocated to the Group by the public entity concerned.
Grants related to income are recognised in the income statement as other operating income or as a direct adjustment of
the cost item to which they refer, whilst grants related to assets are recognised as a direct adjustment of the carrying
amount of the asset.
Finance income and costs
Finance income and costs are recognised on a time-proportion basis, using the effective interest method.
Dividends
Dividends are recognised when the right to receive payment is established, which generally corresponds with approval of
the distribution by the General Meeting of shareholders of the investee company.
Related parties
Related parties within the Group refer to Poste Italiane SpA’s direct and indirect subsidiaries and associates. Related parties external to the Group regard the parent, the MEF, entities controlled by the MEF, and the Group’s key management
personnel. In addition, in application of the new version of IAS 24 – Related Party Disclosures, introduced by EU Regulation
632/2010, related parties external to the Group also include the associates and jointly controlled entities of the entities controlled by the MEF. The State and other public sector entities, other than the MEF and the entities it controls, are not classified as related parties. Related party transactions do not include those deriving from financial assets and liabilities represented by instruments traded on organised markets.
Accounting standards and interpretations applicable from 1 January 2011
The following amendments, interpretations and changes are applicable from 1 January 2011, but their adoption has not
resulted in any change to the presentation or measurement of items in Poste Italiane SpA’s financial statements:
• change to IAS 32 - Financial Instruments: Presentation, adopted by EC Regulation 1293 issued on 23 December 2009;
• change to IFRS 1 - Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters and Change to IFRS
7 - Financial Instruments: Disclosures, adopted by EC Regulation 574 issued on 30 June 2010;
• IAS 24 - Related Party Disclosures and Change to IFRS 8 – Operating segments, adopted by EC Regulation 632 issued
on 19 July 2010;
• changes to IFRIC 14 - Prepayments of a Minimum Funding Requirement, adopted by EC Regulation 633 issued on 19 July
2010;
• IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments and Change to IFRS 1 - First-time Adoption of
Financial Reporting Standards, adopted by EC Regulation 662 issued on 23 July 2010;
• Improvements to IFRS, adopted by EC Regulation 149/2011 of 18 February 2011.
New accounting standards and interpretations not yet effective
At the date of approval of these consolidated financial statements, the IASB has issued the following accounting standards,
interpretations and amendments, which have yet to be endorsed by the European Union and which, in certain cases, are
still at the consultation stage. These include the following:
• IFRS 9 – Financial Instruments, as part of the review of the existing IAS 39; a number of Exposure Drafts have also been
issued regarding Amortised Cost and Impairment, Fair Value Option for Financial Liabilities and Hedge Accounting;
• IFRS 10 – Consolidated Financial Statements, regarding consolidation of the financial statements of subsidiaries as part
of the review of IAS 27 and SIC 12 - Consolidation – Special Purpose Entities;
• IFRS 11 – Joint Arrangements, as part of the review of IAS 31 – Interests in joint ventures;
• IFRS 12 – Disclosure of Interests in Other Entities;
• IFRS 13 – Fair Value Measurement;
• IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine;
• Exposure Draft “Measurement of Non-financial Liabilities” as part of the review of the existing IAS 37 regarding the
recognition and measurement of provisions, contingent liabilities and contingent assets;
• Exposure Draft “Revenue from Contracts with Customers” as part of the review of the existing IAS 11 and IAS 18, regarding revenue recognition;
• Exposure Draft “Insurance Contracts” as part of the review of the existing IFRS 4, regarding the accounting treatment of
insurance contracts;
• Exposure Draft “Leases” as part of the review of the existing IAS 17, regarding the accounting treatment of leases;
• Exposure Draft “Income Taxes: “Deferred Tax: Recovery of Underlying Assets”;
• Exposure Draft “Improvements to IFRS” as part of the annual programme of general improvements and review of IFRS;
• Exposure Draft “Offsetting Financial Assets and Financial Liabilities”;
• Exposure Draft “Investment Companies”;
• Exposure Draft “Government Loans”, as part of the review to IFRS 1 – First-Time Adoption of International Financial
Reporting Standards;
• Changes to IFRS 1 – Severe Hyperinflation and Removal of Fixed Dates for First-Time Adopters”;
• Change to IAS 1 - Presentation of Financial Statements: Statement of Comprehensive Income, regarding presentation of
the statement of comprehensive income in the financial statements;
• Changes to IAS 19 – Employee Benefits as part of the review of the international accounting standard for employee benefits;
• IAS 28 Revised – Investments in Associates and Joint Ventures.
Finally, on 23 November 2011 EU Regulation 1205/2011 was published. This has adopted the changes to IFRS 7 – Financial
Instruments: Disclosures – Transfers of Financial Assets applicable from 1 January 2012.
The potential impact on Poste Italiane SpA’s financial reporting of the accounting standards, amendments and interpretations due to come into effect is currently being examined and assessed.
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2.4 - USE OF ESTIMATES
Preparation of the separate financial statements requires management to apply accounting standards and methods that are
at times based on complex judgements and estimates, linked to historical experience, and assumptions that are considered reasonable and realistic under the related circumstances. Use of these estimates and assumptions influences the
amounts reported in the financial statements, with reference to the statement of financial position, the income statement,
the statement of comprehensive income and the statement of cash flows, as well as the notes. The actual amounts of
items for which the above estimates and assumptions have been applied may diverge from those reported in previous
financial statements, due to uncertainties regarding assumptions and the conditions on which estimates are based. The
estimates and assumptions are periodically reviewed and the impact of any changes reflected in the financial statements
for the period in which the estimated is revised, if the revision only influences the current period, or also in future periods
if the revision influences the current and future periods.
This section provides a description of accounting treatments that, more than others, require the use of subjective estimates
and for which a change in the conditions underlying the assumptions used could have a material impact on the Company’s
financial statements.
Revenues and receivables due from the State
Revenue from activities carried out in favour of or on behalf of the State and Public Sector 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.
Whilst awaiting renewal of agreements between Poste Italiane SpA and the tax authorities that expired in 2007, in 2011 the
Company continued to provide the related delegated services as normal. Revenue recognition is based on the tariffs established in the previous agreements and which it is reasonable to expect will be confirmed, or on the lower tariffs inferred
from the state of negotiations with the relevant Public Sector customer.
At 31 December 2011, receivables due to the Company from the MEF and the Cabinet Office amount to approximately 2.16
billion euros. This amount consists of:
• receivables of over 1,211 million euros in the form of Universal Service Obligation (USO) subsidies, including 1,093 million euros relating to the three-year period 2009-2011. These receivables are accounted for gross of 324 million euros
deposited by the MEF, in December 2011 a non-interest bearing escrow account held by the Company at the Italian
Treasury. Release of the sum deposited by the MEF and collection of the remaining receivables, including approximately 109 million euros relating to the Contratto di Programma (Planning Agreement) for 2006-2008, it is necessary to wait
for the European Commission’s ruling on the Contratto di Programma (Planning Agreement) for 2009-2011, and until the
MEF has replenished its cash holdings. Finally, receivables of approximately 9 million euros for 2005 have been cut following the budget laws for 2007 and 2008;
• receivables of approximately 415 million euros in the form of publisher tariff subsidies. Of this amount, approximately 254
million euros in subsidies for the years from 2001 to 2007 are to be received in instalments in accordance with a specific Cabinet Office Decree, which has established that collection is to take place on a straight-line basis between 2010 and
2016. These receivables have been accounted for at present value. With regard to the remaining amount of approximately 161 million euros, the Cabinet Office has postponed a decision regarding the exact amount due until a special interministerial committee has reported. The committee’s conclusions has so far not provided the basis for an agreed solution. Of
this last amount, subsidies of approximately 8 million euros for the first quarter of 2010 are still not covered by a provision in the government’s budget;
• further receivables of 530 million euros due from the MEF, in relation to payment of interest on the Company’s mandatory deposits with the Ministry, for the provision of treasury services, for the distribution of euro converters and for electoral subsidies. No provision has been made in the government’s budget for approximately 155 million euros of these
items, above all the latter, and payment of approximately 10 million euros has been suspended whilst awaiting specific
measures.
Based on the above, of the total amount receivable, with a face value of over 2.16 billion euros, in the case of approximately 172 million euros either no provision has been made in the government’s budget or there is no legislation establishing
the procedures for payment of the Company, whilst the collection, or availability, of approximately 1,619 million euros is to
take place in instalments or has been deferred.
The increase in these receivables over time means that Poste Italiane SpA has to finance growing amounts of working capital, with a negative impact on cash flow management and the related returns. Given that it is not currently possible to forecast when and how the receivables will be paid by the various Public Sector entities, without prejudice to the Company’s
full entitlement and related rights, provisions for doubtful debts due from the parent, the MEF, at 31 December 2011 reflect
the best estimate based on the circumstances and the financial impact of the above situation.
In the past, changes to the relevant legislation have been introduced after the end of the reporting period, resulting in
changes to estimates and influencing the income statement. The above circumstances mean that management cannot
exclude the possibility that, as a result of future legislation or the negotiations currently underway, the operating results for
reporting periods after the year ended 31 December 2011 will reflect changes to the estimates in question.
Provisions
The Company makes provisions for potential liabilities deriving from disputes with staff, suppliers, third parties and, in general, for liabilities deriving from present obligations.
Among other things, these provisions cover the liabilities that could result from legal action relating to fixed-term contracts.
In this regard, in November 2010 the so-called Collegato lavoro legislation was enacted. Among other things, this law has
made the “Compulsory” attempt at Conciliation in labour disputes (art. 31) optional and introduced a time limit for appeals
against dismissal, and a cap on compensation payable to an employee in the event of “court-imposed conversion” of a
fixed-term contract (art. 32). With regard to claims resulting from the conversion of a fixed-term contract, the courts may
now award claimants between a minimum of 2.5 and a maximum of 12 months pay (regardless of the duration of the proceedings), which is reduced to 6 for companies that implement recruitment lists also applicable to the permanent employment of workers formerly on fixed-term contracts. Compared with the end of 2010, this important reform, which is also
applicable to ongoing legal actions, has resulted in a review of the Company’s provisions.
In the course of the disputes in question, the plaintiffs have at times attempted to seize the Company’s liquidity, and an
estimate of the liabilities linked to this factor is included in the calculation of the related provisions.
Determination of the provisions involves the use of estimates based on current knowledge of factors that may change over
time, potentially resulting in outcomes that may be significantly different from those taken into account when preparing the
Measurement of assets that have indefinite useful lives
Non-current assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. Testing for the above indicators requires the use of subjective judgements based on the
information available within the Company and in the market, and on historical experience. Moreover, when an impairment is
recognised the Company calculates the entity of the impairment using appropriate measurement techniques. The correct
identification of events or changes in circumstances indicating an impairment, and the estimates used in their calculation,
are linked to factors that may change over time, with a resulting impact on the measurements and estimates performed.
The current economic and financial crisis, which has resulted in highly volatile markets and great uncertainty with regard to
economic projections, makes it is difficult to produce forecasts that can, without any uncertainty, be defined as reliable.
At 31 December 2011 the fair value of the Poste Italiane SpA’s operating properties was significantly higher than their carrying amount. In determining the net carrying amount of Land and Buildings used in operations, the Company also took
account of any indications that these assets may be impaired. In this regard, and with particular reference to properties
used as post offices and Sorting Centres, Poste Italiane SpA’s Universal Service Obligation was taken into account. The
process thus took account of the inseparability of the cash flows generated by the large number of properties that provide
this service, which the Company is required to operate throughout the country regardless of the expected profitability of
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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 taken into consideration. On this basis, the
value in use of Land and Buildings used in operations is relatively unaffected by changes in the commercial value of the
properties concerned and, under particularly critical market conditions, certain properties may have values that are significantly higher than their mere commercial value, without this having any negative impact on the Company’s cash flows or
overall earnings.
Depreciation and amortisation of Property, plant and equipment and Intangible assets
The cost of these assets is depreciated or amortised on a straight-line basis over the estimated useful life of the asset. The
useful life is determined at the time of purchase and based on historical experience of similar investments, market conditions and expectations regarding future events that may have an impact, including new technologies. The effective useful
life may, therefore, differ from the estimated useful life. The Company periodically assesses changes in technology and in
the industry, in dismantling costs and in the recoverable amount of assets in order to update their residual useful lives. This
periodic update may lead to changes in the depreciation or amortisation period and thus in charges for depreciation or amortisation in the current and in future years.
In the case of assets located on land held under concession or sub-concession, on expiry of the concession term, or whilst
awaiting confirmation of renewal, any additional depreciation of assets to be handed over free of charge at the end of the
concession term is calculated on the basis of the probable residual duration of the right to use the assets to provide public services, estimated on the basis of the framework agreements entered into with the Public Sector, the status of negotiations with the grantors and past experience.
Deferred tax assets
Accounting for deferred tax assets is based on expectations of taxable income in future years. Assessments of expected
taxable income to be used in order to account for deferred taxes depend on factors that may change over time, with a significant impact on the measurement of this component of the statement of financial position.
Provisions for doubtful debts reflect estimated losses on receivables, taking into account, in the case of specific items
receivable from Public Sector entities, of legislation restricting public spending. Provisions for expected losses reflect the
estimated credit risk associated with historical experience of similar receivables, an analysis of past due items (both current and historical), losses and collections, and monitoring of the current and future economic conditions in the related markets. Net provisions (releases of provisions) for doubtful debts are accounted for in the income statement in Other operating costs, or, if referring to receivables accruing during the year, via deferral of the related revenues.
Fair value of unquoted financial instruments
The fair value of financial instruments that are not traded on an active market is based on prices quoted by external dealers, or on internal valuation techniques that result in an estimate of what the transaction price would have been on the
measurement date in an arm’s length exchange motivated by normal business considerations. The Company uses valuation models based primarily on financial variables taken from the market, taking account, where possible, of prices in recent
transactions and quoted market prices for substantially similar instruments, and of any related credit risk.
Calculation of staff termination benefits is carried out by independent actuaries. The calculation takes account of vested termination benefits for the period of service to date and is based on actuarial assumptions of both a demographic and eco-
nomic and financial nature. These assumptions, which are based on the Company’s experience and relevant best practices,
are subject to periodic reviews.
3 - RISK MANAGEMENT
Definition and optimisation of Poste Italiane SpA’s financial structure, over both the short and medium/long term, and management of the related cash flows is the responsibility of the Company’s Finance department, acting in accordance with
the general guidelines established by governance bodies.
Management of the Company’s financial transactions and of the associated risks is primarily attributable to the operations
of BancoPosta, as well as the funding of assets and the investment of its own liquidity.
BancoPosta’s operations are governed by Presidential Decree 144/2001. From 2 May 2011 BancoPosta has ring-fenced capital, as approved by the General Meeting of 14 April 2011 for the purposes of applying the Bank of Italy’s prudential requirements and protecting creditors, pursuant to art. 2 (paragraphs 17-octies to 17-duodecies) of the so-called “Milleproroghe”
(“Thousand Extensions”) Decree, converted into Law 10 of 26 February 2011. BancoPosta RFC was provided with a legally separate reserve of 1 billion euros attributed from Poste Italiane SpA’s retained earnings. The assets and liabilities included in BancoPosta’s ring-fence derive from the management of postal current accounts deposits, carried out in the name of
BancoPosta but subject to statutory restrictions, and collections and payments on behalf of third parties.
The funds deriving from postal current account deposits by private customers are invested in euro zone government securities, whilst deposits by Public Sector entities are deposited with the Ministry of Finance and the Economy. During 2011
BancoPosta was engaged in reinvesting the funds deriving from maturing government securities and in the trading of securities designed to progressively match the maturity profile of the portfolio with the investment model adopted by the
Company in 2010. The new maturity profile was developed based, among other things, on a leading market operator’s statistical/econometric model that reflects the interest rates and maturities typical of postal current accounts. The model is
also used as the basis for investment policies in order to limit exposure to rate and liquidity risks by foreseeing mismatches caused by the need to marry the exigencies of risk management with those of improving returns which are dependent
on the ever changing yield curve.
On the other hand, operations not covered by the ring-fence, primarily regarding management of the Company’s own liquidity, are carried out in accordance with investment guidelines approved by the Board of Directors, which require the
Company to invest in instruments such as government securities, high-quality corporate or bank bonds and term bank
deposits. Liquidity is also deposited in postal current accounts, with the resulting deposits subject to the same requirements as apply to the investment of deposits by private current account holders.
Balanced financial management and monitoring of the main risk/return profiles is carried out by organisational structures
operating separately and independently. In addition, specific processes are in place governing the assumption, management and control of financial risks, including via the progressive introduction of appropriate information systems. From an
organisational viewpoint, the model used for BancoPosta RFC and for the Company’s other financial transactions outside
the ring-fence consists of:
• a Risk Measurement and Control function carried out by an appropriate function that operates on the basis of the organisational separation of risk assessment from risk management activities. Where necessary, this function coordinates its
activities with similar functions established within subsidiaries. The results of these activities are examined by a Financial
Risk Committee, which meets at least every three months and is responsible for carrying out an integrated assessment
of the main risk profiles.
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):
298
•
•
•
•
market risk;
credit risk;
liquidity risk;
cash flow interest rate risk.
Market risk regards:
• price risk: this is the risk that the value of a financial instrument fluctuates as a result of market price movements, including both movements deriving from factors specific to the individual instrument or the issuer, and factors that influence all
instruments traded on the market;
• foreign exchange risk: this is the risk that the value of a financial instrument fluctuates as a result of movements in
exchange rates for currencies other than the presentation currency;
• fair value interest rate risk: this is the risk that the value of a financial instrument fluctuates as a result of movements in
market interest rates.
Sovereign risk became a major component of market risk during 2011, due to the importance of the impact of the spreads
applicable to government securities on the fair value of euro zone government securities, which reflects the market’s perception of the credit rating of sovereign issuers. The performance of spreads during the year resulted in a reduction in the
fair value of these securities, only partially offset by a decline in risk-free interest rates during the same period. The resulting impact on the fair value of the securities held by the Company at 31 December 2011 is described in the note on
Sovereign Risk.
In constructing the Risk Model adopted in order to monitor credit, liquidity and cash flow interest rate risks, the Group has
also taken account of the regulatory yardstick provided by the Bank of Italy’s prudential supervisory standards, despite the
fact that BancoPosta is not yet required to apply such standards, whilst waiting for specific instructions.
MARKET RISK
Price risk
This type of risk regards financial assets that the Company has classified as “Available-for-sale” (AFS) or “Held for trading”
(“Financial instruments at fair value through profit or loss”) and certain derivative financial instruments where changes in
value are recognised in profit or loss.
The following sensitivity analysis relates to the principal positions potentially exposed to fluctuations in value, excluding certain minor items not traded on an active market. The amounts accounted for in the financial statements at 31 December
2010 and 31 December 2011 were subjected to a stress test, based on historical volatility during the years in question,
which was held to be representative of potential market movements.
The principal financial assets subject to price risk and the results of the analysis are shown in the following table.
3.1 - Market risk - Price
Position
Change in value
+Vol
-Vol
Pre-tax profit
+Vol
-Vol
Equity reserves
+Vol
-Vol
2010 effects
Equity instruments
25,849
25,849
8,914
8,914
(8,914)
(8,914)
-
-
8,914
8,914
(8,914)
(8,914)
Financial assets
Other investments
3,830
3,830
29,679
453
453
9,367
(453)
(453)
(9,367)
-
-
453
453
9,367
(453)
(453)
(9,367)
2011 effects
Equity instruments
22,552
22,552
8,544
8,544
(8,544)
(8,544)
-
-
8,544
8,544
(8,544)
(8,544)
Financial assets
Other investments
3,692
3,692
26,244
661
661
9,205
(661)
(661)
(9,205)
-
-
661
661
9,205
(661)
(661)
(9,205)
Investments in equity instruments consist of the Company’s holding of 75,628 Master Card Incorporated class B shares
with a fair value of 21,682 thousand (compared with 150,628 thousand shares with a fair value of 25,263 thousand at 31
December 2010), and 11,144 Visa Incorporated class C shares, with a fair value of 870 thousand euros (11,144 shares, with
a fair value of 586 thousand euros at 31 December 2010). The shares are not traded in a regulated stock exchange but, in
the event of their sale, are convertible into an equal number of Class A shares, which are traded on the New York Stock
Exchange.
The reduction in the holding of Mastercard shares during the period was largely due to sales during the second half of 2011,
only partially offset by an increase in the market price.
For sensitivity analysis purposes, the value of these shares was associated with the corresponding A shares, taking into
account the volatility of the shares traded on the NYSE.
Other investments regard the equity mutual investment funds referred to in note 9.4.
Foreign exchange risk
Sensitivity analysis of the items subject to foreign exchange risk was based on the most significant positions, assuming a
stress scenario determined by the levels of exchange rate volatility applicable to each foreign currency position held to be
material. It was decided to apply an exchange rate movement based on volatility during the year, which was held to be representative of potential market movements. The results of the analysis are reported below.
The position at 31 December 2011 relates almost entirely to the Mastercard Incorporated and Visa Incorporated shares
(note 3.1), denominated in US dollars.
300
3.2 - Market risk - US dollar
Change in value
+Vol
-Vol
Pre-tax profit
+Vol
-Vol
Equity reserves
+Vol
-Vol
Position in
USD/000
Position in
€/000
260 days
260 days
260 days
260 days
260 days 260 days
2010 effects
34,539
Equity instruments
34,539
25,849
25,849
2,630
2,630
(2,630)
(2,630)
-
-
2,630 (2,630)
2,630 (2,630)
34,539
25,849
2,630
(2,630)
-
-
2,630 (2,630)
2011 effects
29,180
Equity instruments
29,180
22,552
22,552
2,501
2,501
(2,501)
(2,501)
-
-
2,501 (2,501)
2,501 (2,501)
22,552
2,501
(2,501)
-
-
2,501 (2,501)
29,180
Trade receivables/payables due from and to overseas correspondents
The most significant net position (approximately 77% of the reported foreign exchange exposure) is that denominated in
SDRs (Special Drawing Rights), a synthetic currency determined by the weighted average of the exchange rates of four
major currencies (Euro, US dollar, British pound, Japanese yen) used worldwide to settle commercial positions among
Postal Operators. At 31 December 2011 this position amounts to 368 thousand euros (596 thousand euros at 31 December
2010).
3.3 - Market risk - SDRs
Change in value
+Vol
-Vol
Pre-tax profit
+Vol
-Vol
Equity reserves
+Vol
-Vol
Position in
SDRs/000
Position in
€/000
260 days
260 days
260 days
260 days
2010 effects
59,787
(60,305)
(518)
68,907
(69,503)
(596)
3,668
(3,700)
(32)
(3,668)
3,700
32
3,668
(3,700)
(32)
(3,668)
3,700
32
-
-
2011 effects
66,872
(66,562)
310
79,347
(78,979)
368
4,343
(4,323)
20
(4,343)
4,323
(20)
4,343
(4,323)
20
(4,343)
4,323
(20)
-
-
260 days 260 days
At 31 December 2011 the net position in US dollars amounts to 56 thousand euros (71 thousand euros at 31 December
2010).
Fair value interest rate risk
This concerns the effects of changes in interest rates on the price of fixed income and fixed rate securities held by Poste
Italiane SpA, mainly in relation to BancoPosta’s activities, as a result of the investment of deposits paid into postal current
accounts by private customers.
In line with previous years, the following interest rate sensitivity analysis was based on changes in fair value following a
parallel shift in the forward yield curve (+/- 100 bps). Due to the deterioration in Italy’s credit rating (described in the following section), 2011 witnessed fluctuations in the yields on government securities that were at times in excess of 100 bps.
The measures of sensitivity shown in the following analysis do, however, offer a basic point of reference, useful in assessing potential changes in fair value in the event of greater movements in interest rates.
3.4 - Market risk – Fair value interest rate risk
Change in value
Notional
2010 effects
Financial assets attributable to BancoPosta(1) 15,237,350
14,517,350
Financial assets(1)
Financial assets(1)
(1)
+100bps
-100bps
Pre-tax profit
+100bps
Equity reserves
-100bps
+100bps
-100bps
14,521,868
(924,776) 1,017,810
-
-
(924,776) 1,017,810
14,535,568
(868,629)
955,634
-
-
(868,629)
955,634
720,000
-
(13,700)
-
(56,147)
-
62,176
-
-
-
(56,147)
-
62,176
-
500,000
471,791
(1,923)
2,107
-
-
(1,923)
2,107
471,791
(1,923)
2,107
14,993,659 (926,699) 1,019,917
-
-
500,000
15,737,350
2011 effects
Financial assets attributable to BancoPosta(1) 17,655,550
15,805,550
Fair value
13,416,648
(671,834)
691,691
(25,648) 26,517
13,442,018
(613,333)
629,928
800,000
1,050,000
(31,281)
5,911
(32,852)
(25,648)
35,247
26,517
500,000
428,945
(5,134)
5,423
-
500,000
428,945
(5,134)
5,423
-
18,155,550
13,845,593
(676,967)
697,115
(1,923)
2,107
(926,699) 1,019,917
(646,185)
665,174
-
(613,333)
629,928
(25,648) 26,517
(32,852)
-
35,247
-
-
(5,134)
5,423
-
(5,134)
5,423
(25,648) 26,517
(651,319)
670,598
-
The effects are only measured for components of the portfolio not covered by fair value hedges.
BancoPosta’s investment securities (note 8.1) are almost evenly split between Held-to-maturity (HTM) and Available-for-sale
(AFS). While a change in fair value does not have an impact in terms of financial position or operating performance for HTM
financial assets, which are initially recognised at their fair value and subsequently at their amortised cost, it does have an
effect in terms of financial position for AFS financial assets, which are recognised at fair value with any change accounted
for in equity, making it necessary to monitor constantly any unrealised gains and losses. The sensitivity analysis shown concerns AFS financial assets.
The portfolio consists of fixed rate government securities (ordinary BTPs) with a par value of 12,221,800 thousand euros
(12,443,600 thousand euros at 31 December 2010), variable rate CCTeus (Euribor + 1.00%) with a par value of 50,000 thousand euros and variable rate securities swapped into fixed rate through cash flow hedges. The latter are inflation linked
BTBs (BTP€i) with a par value of 2,583,750 thousand euros (2,073,750 thousand euros at 31 December 2010) and CCTeus
with a par value of 950,000 thousand euros.
302
The portion of the fixed rate portfolio relating to ordinary BTP was partially hedged against fair value interest rate risk
through a fair value hedge asset swap:
• BTPs with a notional amount of 500,000 thousand euros were hedged through an immediate IRS fair value hedge;
• 2023 and 2025 BTPs with a notional amount of 400,000 thousand euros were partially hedged through an IRS fair value
hedge with a forward start in 2016.
• 2026, 2034 and 2040 BTPs with a notional amount of 2,800,000 thousand euros were partially hedged through an IRS
fair value hedge with forward starts in 2015, 2016 and 2020, respectively.
The duration of BancoPosta’s AFS financial assets is 6.21 (at 31 December 2010 the duration of the securities portfolio was
6.23) reducing, albeit not to a significant extent, the sensitivity of the fair value of the portfolio to changes in interest rates.
At 31 December 2011 this refers to fair value interest rate risk on forward purchases of securities carried out by the
Company with a notional amount of 800 thousand euros (so-called cash flow hedges of forecast transactions).
Finally, disclosure of the risk associated with derivative financial instruments measured at fair value through profit or loss
held by the Company, with a notional amount of 1,050,000 thousand euros, is included only for the purpose of full disclosure. These forward transactions, deriving from discontinued cash flow hedges of forecast transactions, were, in fact, settled early in February 2012 through forward sales with net proceeds of 55,618 thousand euros, after deducting the fair value
Financial assets
These assets regard investments by in BTPs, described in note 3.4, with a notional amount of 500,000 thousand euros and
a fair value of 428,945 thousand euros, including 375,000 thousand euros hedged in 2010 against changes in their fair value
by entering into an asset swaps.
Sovereign risk
The global financial system was affected by significant tensions and ongoing financial market turbulence and volatility in
2011, with Italy particularly exposed. Spreads between German bunds and the government securities issued by many
European countries, including Italy, rose sharply, above all in November 2011. The spreads on ten-year bonds had risen to
527 bps at 31 December 2011.
The downgrade of Italy’s credit rating and heightened financial market volatility had a significant impact on the price of
Italian government securities, generating substantial fair value losses on those classified as available-for-sale (AFS), which
were recognised in the Fair value reserve in Equity, net of tax. During the second half of 2011 this reserve came to account
for a particularly significant percentage of Poste Italiane SpA’s Equity and, with particular reference to BancoPosta, at 31
December 2011 the negative balance of the Fair value reserve has exceeded the reserve of 1 billion euros initially attributed by Poste Italiane SpA.
In particular, at 31 December 2011 the Fair value reserve attributable to BancoPosta RFC, primarily reflecting movements
in the price of government securities classified as AFS, net of tax, had a negative balance of 1,991 million euros11.
In the circumstances, postal current account deposits have remained stable and BancoPosta’s Equity continue to be sufficient to back the available-for-sale securities through to maturity, with steps taken and instruments created to cope with
unexpected movements in deposits, without having to sell large volumes of securities at a loss. Notwithstanding the losses, BancoPosta’s regulatory capital is, pursuant to prudential requirements, sufficient for First Pillar (credit, counterparty and
foreign exchange risks) and Second Pillar purposes (banking book rate risk).
Following a reduction in the yields on Italian government securities and in the related spread with respect to German
Bunds, the negative balance on the available-for-sale Fair value reserve has improved by 1,156 million euros since 31
December 2011 to stand at 835 million euros on 31 March 201212.
11. At 31 December 2011 the fair value of held-to-maturity financial assets was lower than the related amortised cost, with approximately 806 million euros
accounted for in assets attributable to the ring-fenced capital, net of tax at the applicable statutory rate.
12. The market value of these securities at 31 March 2012 is approximately 35 million euros below their amortised cost, after taxes, which was a 771 million
euro improvement over 31 December 2011.
The sovereign risk sensitivity of the fair value of investments is higher than the interest rate risk described in note 3.4, given
the greater volume of assets affected by the potential impact of a movement in spreads, affecting the entire AFS portfolio
and not just the fixed rate component, and the absence of any compensatory effect provided by fair value hedges, whose
protection does not extend to movements in credit ratings.
Value at Risk analysis
In addition to the above sensitivity analysis, the Company monitors the market risk exposure of available-for-sale securities
and derivative financial instruments through the calculation of VaR (Value at Risk). This is estimated over a time horizon of
3 days and with a confidence level of 99%.
BancoPosta’s financial assets
With reference to BancoPosta’s financial assets and the related hedges, at 31 December 2011 the maximum VaR for available-for-sale financial assets amounts to 807,091 thousand euros (221,785 thousand euros at 31 December 2010) and for
forward purchases of derivative financial instruments to 29,353 thousand euros (14,588 thousand euros at 31 December
2010). VaR analysis takes account of a combination of various risk factors. In the specific case of BancoPosta’s available-forsale financial assets, this regards fair value interest rate risk and sovereign risk. The increase in VaR compared with 31
December 2010 primarily reflects the increased exposure to sovereign risk (the degree of variability of spreads) and the
absence of any offsetting effect from fair value hedges.
Financial assets
With reference to available-for-sale financial assets and the related hedges, at 31 December 2011 VaR, calculated for this
portfolio, calculated on the above basis, amounts to a maximum of 26,600 thousand euros (9,294 thousand euros at 31
December 2010). In this case too, the significant increase in VaR, reflects the high degree of sovereign risk volatility during
the period.
CREDIT RISK
Credit risk regards the risk that a debtor might default on a payment or go into liquidation. This risk is managed as follows:
•
•
•
•
minimum rating requirements for issuers/counterparties, based on the type of instrument;
concentration limits per issuer/counterparty;
a ban on investments in subordinated financial instruments, with the sole exception of the subsidiary, Poste Vita SpA;
monitoring of changes in the ratings of counterparties.
During the year under review, the macroeconomic events that had an impact on the risk-return profiles of the Poste Italiane
SpA’s financial assets were the debt crises in peripheral EU countries (Greece, Ireland and Portugal), which caused spreads
on European government securities to widen, with a particular impact on those related to Italy’s sovereign risk, and continuing uncertainty regarding the health of the banking sector. The second half of 2011 saw a significant number of ratings
downgrades by the leading agencies, resulting in a progressive deterioration in the weighted average rating of the Group’s
exposures, which has fallen from AA- at 31 December 2010 to A at 31 December 2011.
The nature of Poste Italiane SpA’s operations, above all in terms of BancoPosta’s investment activities, exposes it to a substantial degree of concentration in respect of the Italian state, linked essentially to deposits with the MEF and the portfolio invested entirely in Italian government securities (note 8.1).
Ruling DEM/11070007 of 28 July 2011, implementing Document 2011/266 published by the European Securities and
Markets Authority (ESMA) and later amendments, has introduced new requirements regarding sovereign debt disclosures
that listed issuers with holdings of national and euro area government securities and IFRS-compliant companies must
include in their annual and interim reports. Sovereign debt is understood to mean bonds issued by and loans granted by
companies to central governments, local government entities and government bodies. Information on the Company’s sovereign debt exposure is provided below, showing the face value, carrying amount and fair value of each type of portfolio.
304
3.5 - Exposure to sovereign debt
31 December 2011
Carring Amount
Item
Face value
Assets attributable to BancoPosta RFC
Italy
30,043,200
14,237,650
15,805,550
-
27,805,911
14,363,893
13,442,018
-
26,616,736
13,174,718
13,442,018
-
Assets outside the ring-fence
Italy
500,000
500,000
-
428,945
428,945
-
428,945
428,945
-
30,543,200
28,234,856
27,045,681
Total
Fair value
The relevant credit exposure is shown below for each category of financial instrument. The ratings reported in the table
have been assigned by Moody’s.
3.6 - Credit risk - Financial assets attributable to BancoPosta
Item
Receivables
from Aaa
from A1
from Ba1
Note
to Aa3
to Baa3 to Not rated
[8.2]
303,199
303,199
8,014,467
8,014,467
436,513
436,513
Total
from Aaa from A1
from Ba1
to Aa3 to Baa3 to Not rated
8,754,179
8,754,179
7,087,173
7,087,173
-
343,578
343,578
Total
7,430,751
7,430,751
Held-to-maturity
[8.8]
financial assets
- 14,363,893
- 14,363,893
- 14,363,893
- 14,363,893
14,768,213
14,768,213
-
- 14,768,213
- 14,768,213
Available-for-sale
[8.8]
financial assets
- 13,442,018
- 13,442,018
- 13,442,018
- 13,442,018
14,535,568
14,535,568
-
- 14,535,568
- 14,535,568
Derivative financial
instruments
Cash flow hedges
Fair value hedges
Fair value through
profit or loss
[8.9]
Total
48,674
46,333
-
37,739
27,237
-
-
86,414
73,570
-
75,349
26,181
49,168
12,856
12,856
-
88,205
26,181
62,024
2,341
10,502
-
12,844
-
-
-
-
436,513 36,646,504
36,466,303
12,856
351,873 21,494,224
343,578 36,822,737
Outstanding positions at 31 December 2011 are described in note 8.
Credit risk arising from derivative transactions is mitigated through rating and counterparty concentration limits as well as,
in the case of asset swaps, sufficient collateral (provided by specific Credit Support Annexes). Exposure is quantified and
monitored using the current value method, in accordance with the Bank of Italy’s prudential supervisory instructions.
At 31 December 2011 all counterparties for the Company’s derivatives have investment grade ratings. Accreting13 asset
swaps on long-term BTP€is have been entered into so as to minimise collateral requirements.
Financial assets
3.7 - Credit risk - Financial assets
Item
Loans
Receivables
from Aaa
from A1
from Ba1
Note
to Aa3
to Baa3 to Not rated
[9.1]
[9.3]
-
492,344
492,344
Available-for-sale
[9.4]
financial assets
Other instruments and deposits
90,000
90,000
433,411
433,411
-
-
-
-
90,000
925,755
instruments
Cash flow hedges
Fair value hedges
Fair value through
profit or loss
Total
Total
784,644 1,276,988
768,076
768,076
16,568 508,912
from Aaa from A1
from Ba1
to Aa3 to Baa3 to Not rated
Total
626,590
626,590
-
865,415
853,678
11,737
1,492,005
853,678
638,327
523,411
523,411
561,791
561,791
-
2,098
2,098
563,889
563,889
-
22,933
22,933
-
-
22,933
22,933
784,644 1,800,399
1,211,314
-
867,513
2,078,827
[9.6]
At 31 December 2011 the following positions are subject to this risk:
Loans of 768,076 thousand euros at 31 December 2011 (853,678 thousand euros at 31 December 2010) refer entirely to
loans (note 9.1) granted to Group companies and intercompany current accounts (note 9.2), with both types of transaction
conducted on an arm’s length basis. These loans include subordinated loans of 540,000 thousand euros to the insurance
company, Poste Vita SpA (645,000 thousand euros at 31 December 2010).
Receivables (note 9.3), totalling 508,912 thousand euros, include 492,344 thousand euros for claims on the parent, the MEF
(626,590 thousand euros at 31 December 2010) and 3,729 thousand euros in guarantee deposits, accounted for in current
assets, issued to counterparties for reverse repurchase agreements on fixed income instruments (collateral governed by a
specific Global Master Repurchase Agreements).
Other instruments and deposits include BTPs with a fair value of 428,945 thousand euros and a face value of 500,000 thousand euros and a fiduciary deposit established in 2002 with a fair value of 94,466 thousand euros and a face value of 93,550
thousand euros (92,098 thousand euros and 93,550 thousand euros, respectively, at 31 December 2010).
13. Accreting asset swaps entered into to hedge against interest rate risk make it possible to reduce the payments to be made to the counterparty from time
to time under the CSA contracts.
306
Current assets – Trade receivables
3.8 - Credit risk - Trade receivables attributable to Poste Italiane
31 December 2011
Item
Public Sector
Private customers
Due from subsidiaries
Due from associates
Due from parents
Total
of which past due
31 December 2010
Carring
amount
Specific
impairment
Carring
amount
Specific
impairment
211,912
890,225
322,689
271,567
5,502
1,310,277
3,012,172
(423)
(72,145)
(53,557)
(74,740)
174,043
880,591
218,136
222,912
171
948,552
2,444,405
(4,296)
(73,093)
(63,208)
(72,855)
532,232
394,976
3.9 - Credit risk - Trade receivables attributable to BancoPosta
31 December 2011
31 December 2010
Item
Carring
amount
Specific
impairment
Carring
amount
Specific
impairment
Public Sector
Private customers
Due from subsidiaries
Due from parents
Total
129,050
100,447
120,711
60,907
355,045
766,160
(20,556)
(2,319)
(102,042)
(7,972)
822,000
88,007
113,590
26,714
228,102
1,278,413
(20,556)
(19,689)
(93,356)
-
of which past due
50,073
12,866
The nature of the Company’s customers, the structure of revenues and the method of collection mean that there is a limited risk of default on trade receivables. In this regard, reference should be made to the paragraph of note 2.4 dealing with
“Revenues and receivables due from the State”. All receivables are subject to specific monitoring and reporting procedures
to support credit collection activities.
Other receivables and asset
3.10 - Credit risk - Other receivables and assets attributable to Poste Italiane
31 December 2011
Item
Receivables due from staff under fixed-term contracts settlement
Third-party deposits in Postal Savings Books registered
in the name of Poste Italiane SpA
Tax assets
Total
of which past due
31 December 2010
Carring
amount
Specific
impairment
Carring
amount
Specific
impairment
298,641
19,281
16,904
3,101
(2,189)
-
293,416
78
6,913
3,035
(2,189)
-
2,937
828
100,989
442,681
(27,483)
2,957
4,269
55,346
366,014
(22,221)
15,840
1,650
3.11 - Credit risk - Other receivables and assets attributable to BancoPosta
31 December 2011
Item
Tax assets
Total
of which past due
31 December 2010
Carring
amount
Specific
Impairment
Carring
amount
Specific
Impairment
240,166
30
113,645
(24,958)
249,305
5,904
149,283
(24,127)
353,841
404,492
-
-
LIQUIDITY RISK
Liquidity risk is the risk that an entity may have difficulties in raising sufficient funds, at market conditions, to meet its obligations deriving from financial instruments. Liquidity risk may regard the inability to sell financial assets quickly at an
amount close to fair value or the need to raise funds on excessively onerous terms or, in extreme cases, the inability to
borrow in the market.
Poste Italiane SpA applies a financial strategy that aims to minimise this type of risk as follows:
• diversification of the various forms of short- and long-term borrowings and counterparties;
• the availability of lines of credit in terms of amount and the number of banks;
• the gradual and consistent distribution of the maturities of medium/long-term borrowings;
• the adoption of analysis models designed to monitor the maturities of assets and liabilities.
At 31 December 2011 liquidity risk regards the potential exposure deriving from obligations relating to the investment of
deposits by current account customers.
BancoPosta RFC
In terms of BancoPosta’s specific operations, the liquidity risk regards the investment of current account deposits in euro
zone government securities. The potential risk derives from a mismatch between the maturities of investments in securities and those of liabilities, represented by current accounts where the funds are available on demand, thus compromising
the Company’s ability to meet its obligations to current account holders. This potential mismatch between assets and liabilities is monitored via comparison of the maturity schedule for assets with the statistical model of the performance of
current account deposits, in accordance with the various likely maturity schedules and assuming the progressive total withdrawal of deposits over a period of thirty years for private customers and within five years for Public Sector customers.
At 31 December 2011 the degree of the match between the maturities of investments in euro area government securities
and the portfolio replication model approved by the Board of Directors in April 2010 is being calculated, whilst the average
term to maturity of investments as a whole has fallen from 5.56 at 31 December 2010 to 5.39 at 31 December 2011.
The components of BancoPosta’s financial statements most exposed to liquidity risk are described below. The amounts
shown refer to obligations at maturity (nominal value plus accrued interest).
308
Liabilities
3.12 - BancoPosta RFC's exposure to liquidity risk
31 December 2011
31 December 2010
Item
Within Between 1
12 months and 5 years
attributable to BancoPosta
19,147,085
9,006,451
15,115,329
43,268,865
17,184,573
8,581,133 15,212,417 40,978,123
14,000,068
1,989,348
9,006,451
-
15,115,329
-
38,121,848
1,989,348
14,129,975
388,993
8,581,133 15,212,417
-
770,514
2,387,155
-
-
770,514
2,387,155
681,696
1,983,909
Postal current accounts
Borrowings
instruments
Over
5 years
Total
Within Between 1
Over
5 years
-
-
Total
37,923,525
388,993
681,696
1,983,909
Trade payables
60,650
-
-
60,650
89,367
-
-
89,367
Other liabilities
92,152
65,581
-
157,733
85,757
66,467
-
152,224
Total liabilities
19,299,887
9,072,032
15,115,329
43,487,248
17,359,697
8,647,600 15,212,417 41,219,714
For the purposes of liquidity risk analysis at 31 December 2011, the timing of withdrawals from postal current accounts (a
carrying amount of 37,252,267 thousand euros, as shown in note 20.1) was based on the amortisation schedule deriving
from application of the statistical model developed in order to model the behaviour of current account holders.
Both average Public Sector demand deposits and average demand deposits by private customers, with specific regard to
the retail component, which is typically more stable, have risen with respect to 31 December 2010. Poste Italiane SpA continues to closely monitor the deposit base.
Moreover, from the fourth quarter of 2010 new short-term funding arrangements have been introduced via the matched
sale and repurchase of BTPs, with the aim of optimising profitability and funding temporary cash withdrawals from demand
deposits.
Assets
At 31 December 2011 these liabilities are invested in the following types of financial instrument.
3.13 - BancoPosta RFC's exposure to liquidity risk
31 December 2011
31 December 2010
Within Between 1
Over
5 years
Total
11,136,377 11,341,544
Financial assets
Amounts deposited
with the MEF
7,060,499
MEF on behalf of
Italian Treasury
793,537
Investments in securities 2,382,198 11,341,544
900,143
-
30,500,139
52,978,060
11,014,009
-
7,060,499
6,173,455
30,500,139
-
793,537
44,223,881
900,143
829,234
3,583,258
428,062
Item
Within Between 1
Over
5 years
Total
11,348,216 28,551,677 50,913,902
-
-
6,173,455
829,234
11,348,216 28,551,677 43,483,151
428,062
Trade receivables
766,160
-
-
766,160
1,278,413
-
-
1,278,413
Other receivables
353,841
-
-
353,841
404,492
-
-
404,492
Cash and deposits attributable
to BancoPosta
2,559,994
-
-
2,559,994
2,351,245
-
-
2,351,245
-
-
838,951
850,653
-
-
850,653
15,655,323 11,341,544
30,500,139
57,497,006
15,898,812
Total assets
838,951
11,348,216 28,551,677 55,798,705
Investments in fixed income instruments (a carrying amount of 27,805,911 thousand euros, as described in note 8.8) are
shown on the basis of the expected cash flows, consisting of the redemption value of the securities and the coupon interest to be collected as it falls due.
Items outside the ring-fence
Liabilities
Expected cash flows for financial liabilities accounted for at the end of the reporting period, broken down by maturity, are
shown below. Repayments of principal at face value are increased by interest payments calculated on the basis of the yield
curve applicable at 31 December 2011 and 31 December 2010.
3.14 - Liquidity risk outside the ring-fence
Item
Borrowings
Bonds
Loans from
Bank borrowings
Other borrowings
Within Between 1
Over
5 years
Total
Within
12 months
Between 1
and 5 years
Over
5 years
Total
2,090,002
1,622,659
789,375
517,370
516,651
-
209,380
209,380
-
2,816,752
2,348,690
789,375
1,167,720
933,249
39,375
1,447,993
1,447,172
789,375
1,211
1,108
-
2,616,924
2,381,529
828,750
320,743
492,239
20,302
240,127
276,524
-
209,380
-
560,870
978,143
20,302
161,600
691,669
40,605
398,162
259,635
-
1,108
-
560,870
951,304
40,605
465,781
1,562
719
-
465,781
2,281
231,550
2,921
821
103
231,550
3,845
Trade payables
1,807,097
-
-
1,807,097
1,437,361
-
-
1,437,361
Other liabilities
1,128,684
28,003
51,786
1,208,473
1,381,981
26,956
56,050
1,464,987
Total liabilities
5,025,783
545,373
261,166
5,832,322
3,987,062
1,474,949
57,261
5,519,272
Financial liabilities due
from subsidiaries
Assets
Assets at 31 December 2011, broken down by maturity, are shown below at face value and increased, where applicable,
by interest receivable.
310
3.15 - Liquidity risk outside the ring-fence
Over
5 years
Total
Within
12 months
Between 1
and 5 years
Over
5 years
Total
628,952 1,221,562
243,611
733,660
226,418
12,839
158,923
475,063
-
2,504,677
1,221,171
538,578
650,076
94,852
639,507
218,599
307,929
111,523
1,456
1,033,677
510,544
367,575
60,805
94,753
978,389
449,492
12,768
516,129
-
2,651,573
1,178,635
688,272
688,457
96,209
2,830,617
204,793
3,021
3,038,431
2,227,821
203,200
50,800
2,481,821
Other receivables
220,318
Receivables due under fixed-term
82,316
contracts settlement
161,271
155,233
112,006
112,006
493,595
349,555
134,675
68,069
177,575
171,583
100,783
100,783
413,033
340,435
138,002
6,038
-
144,040
66,606
5,992
-
72,598
369,852
-
-
369,852
57,327
-
-
57,327
995,016 1,336,589
6,406,555
3,059,330
1,414,452 1,129,972
5,603,754
Item
Within
12 months
Financial assets
Loans
Receivables
Other investments
Trade receivables
654,163
243,900
299,321
16,090
94,852
Other
Total assets
4,074,950
Between 1
and 5 years
Investments in fixed income instruments (a carrying amount of 428,945 thousand euros, note 9.4) are shown on the basis
of the expected cash flows, consisting of the redemption value of the securities and the coupon interest to be collected
as it falls due.
CASH FLOW INTEREST RATE RISK
This regards uncertainty over future cash flows following fluctuations in market interest rates. It may be caused by a mismatch – in terms of type of rate, indexation method and term to maturity – between financial assets and liabilities that tends
to last until contractual and/or expected maturity (the banking book), and which, as such, generates an impact on the interest margin, which is thus reflected in the operating results for future periods.
At 31 December 2010 and 31 December 2011, sensitivity to interest rate risk of the cash flow generated by the instruments
concerned, represented by floating rate investments, or transactions rendered thus by fair value hedges, is summarized in
the table below, and calculated to reflect changes resulting from a parallel shift in the forward yield curve (+/- 100 bps).
3.16 - Cash flow interest rate risk and hedging policy
Pre-tax
profit
Equity
reserves
Total
Equity
Note
Notional
+100bps
-100bps
+100bps
-100bps
+100bps
-100bps
2010 effects
[8.2]
[8.7]
[8.1]
6,173,455
90,074
500,000
61,735
901
5,000
(61,735)
(901)
(5,000)
-
-
61,735
901
5,000
(61,735)
(901)
(5,000)
Financial assets
Loans
Receivables due from others
Other investments
[9.1]
[9.3]
[9.4]
[9.4]
851,503
375,000
93,550
8,515
3,750
936
(8,515)
(3,750)
(936)
-
-
8,515
3,750
936
(8,515)
(3,750)
(936)
Bank deposits
10,797
108
(108)
-
-
108
(108)
Cash and cash equivalents attributable to Poste Italiane
[13.1]
Bank deposits
54,885
549
(549)
-
-
549
(549)
Cash and cash equivalents attributable to BancoPosta
[13.1]
[13.1]
Bank deposits
840,624
788
8,406
8
(8,406)
(8)
-
-
8,406
8
(8,406)
(8)
(39,757)
(398)
398
-
-
(398)
398
(250,000)
(231,518)
(2,500)
(2,315)
2,500
2,315
-
-
(2,500)
(2,315)
2,500
2,315
8,469,401
84,694
(84,694)
-
-
84,694
(84,694)
[8.2]
[8.7]
7,060,499
503,880
550,000
70,605
5,039
5,500
(70,605)
(5,039)
(5,500)
-
-
70,605
5,039
5,500
(70,605)
(5,039)
(5,500)
[9.1]
[9.3]
[9.4]
[9.4]
762,077
3,729
375,000
93,550
7,621
37
3,750
936
(7,621)
(37)
(3,750)
(936)
-
-
7,621
37
3,750
936
(7,621)
(37)
(3,750)
(936)
Borrowings (banks)
[21.3]
[21.4]
2011 effects
Financial assets
Loans
Receivables due from others
Other investments
Bank deposits
[12.1]
90,610
906
(906)
-
-
906
(906)
Bank deposits
[13.1]
43,342
433
(433)
-
-
433
(433)
Cash and cash equivalents attributable to BancoPosta
[13.1]
Bank deposits
[13.1]
829,399
1,670
8,294
17
(8,294)
(17)
-
-
8,294
17
(8,294)
(17)
[20.2]
(9,520)
(95)
95
-
-
(95)
95
Borrowings (banks)
[21.3]
[21.4]
(250,000)
(465,781)
(2,500)
(4,658)
2,500
4,658
-
-
(2,500)
(4,658)
2,500
4,658
9,588,455
95,885
(95,885)
-
-
95,885
(95,885)
312
BancoPosta RFC
At 31 December 2011 this risk primarily relates to the investment of the funds deriving from the current account deposits
of Public Sector entities, which must be deposited with the MEF. Since 1 January 2008 these investments earn interest at
a floating rate, calculated on the basis of a basket of government securities and money market indexes, as set out in the
agreement between the MEF and Poste Italiane SpA renewed on 1 April 2011.
Cash flow interest rate risk primarily concerns:
• a receivable of 503,880 thousand euros posted as cash collateral for derivative liabilities (note 8.7);
• a portion of the fixed rate portfolio consisting of BTPs, hedged immediately by the fair value hedges described in note
3.4, with a notional amount of 500,000 thousand euros;
• CCTeus with a notional amount of 50,000 thousand euros, whose yields have not been hedged by cash flow hedges;
• bank deposits paying interest at floating rates;
• cash deposited with the MEF and held in the so-called buffer account, which, until 30 November 2011, earned interest
calculated on the basis of the average yield on auctions of Short-term Treasury Certificates (BOT) organised by the MEF
during the relevant six-month period, and from 1 December 2011 earns interest based on the Main Refinancing
Operations (MRO) rate14.
At 31 December 2011 this risk primarily concerns:
• the loans to Group companies described in note 9.1;
• un notional amount of 375,000 thousand euros of the fixed rate portfolio consisting of BTPs, hedged immediately by the
fair value hedges described in note 3.4.
DETERMINATION OF FAIR VALUE
The financial instruments recognised at fair value in these financial statements are classified below on the basis of a hierarchy reflecting the significance of the sources used in determining fair value. The fair value hierarchy comprises the following levels:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices);
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
14. The minimum rate applied by the European Central Bank in its most recent main refinancing operation or the uniform rate should the BCE apply such a
rate in these operations.
3.17 - Fair value hierarchy
31 December 2011
Item
Level 2
Level 3
Total
13,551,101
13,464,687
13,442,018
22,669
-
14,535,568
14,535,568
14,535,568
-
114,054
25,849
25,849
-
117
117
117
-
14,649,739
14,561,534
14,535,568
25,966
-
-
86,414
-
88,205
-
88,205
94,466
94,466
94,466
203,432
4,500
4,500
4,500
4,617
531,603
531,603
428,945
4,500
98,158
14,082,704
475,621
475,621
471,791
3,830
15,011,189
115,031
92,098
92,098
22,933
229,085
4,500
4,500
4,500
4,617
595,152
572,219
471,791
4,500
95,928
22,933
15,244,891
-
(623,883)
(623,883)
-
(623,883)
(623,883)
-
(90,501)
(90,501)
-
(90,501)
(90,501)
-
(9,531)
(9,531)
-
(9,531)
(9,531)
-
-
-
-
Total Financial Liabilities at fair value
-
(633,414)
-
(633,414)
-
(90,501)
-
(90,501)
Equity instruments
Held for trading
Level 2
Level 3
13,442,018
13,442,018
13,442,018
-
108,966
22,552
22,552
-
117
117
117
-
-
86,414
432,637
432,637
428,945
3,692
13,874,655
31 December 2010
Level 1
Level 1
Financial assets
Equity instruments
Other investments
Total Financial Assets at fair value
Total
There were no changes in financial instruments classified in Level 3 during the period.
OTHER RISKS
Operational risk
This regards the risk of losses resulting from inadequate or failed internal processes, people and systems, or from external events. This category of risk includes losses resulting from fraud, human error, business disruption, systems failures,
breach of contract and natural disasters. Operational risk includes legal risk, but not strategic and reputational risks.
To protect against this form of risk, in line with the prudential supervisory requirements, issued by the Bank of Italy in
December 2006, and adopted by Poste Italiane SpA as benchmarks, the Company has formalised and agreed a methodological and organisational framework to manage the operating risk related to the products/processes of BancoPosta.
At 31 December 2011 controls conducted in accordance with the above framework have shown what type of operational
risks BancoPosta’s products are exposed to, as follows:
Event Type
Internal fraud
External fraud
Employee practices and workplace safety
Customers, products and business practices
Damage to physical assets
Business disruption and system failure
Execution, delivery and process management
Total
Number of types
27
46
7
23
4
8
173
288
314
The measurement of mapped risks has made it possible to prioritise risk mitigation in order to limit future occurrence.
Reputational risk
Poste Italiane SpA’s business is by its nature exposed to elements of reputational risk, associated mainly with the placement of index-linked bonds issued by other credit institutions and/or insurance policies issued by Poste Vita SpA.
In this respect, in July 2008, in accordance with the Markets in Financial Instruments Directive by the EU (Directive
2004/39/EC, “MiFID”), the Company has adopted the “consulting service” model.
As noted above in these notes, the crisis of recent years has had profound effects on the performance of all the financial
instruments on the market and, in the second half of 2011, on the value of Italian government securities, which account for
a large part of the Group’s investments. Even though the Group has developed over time prudential policies in the customers’ best interests, entailing the selection of domestic and foreign issuers solely with investment grade ratings, the situation has prompted even closer scrutiny at Group level, so as to ensure full awareness of the performance of the products placed and the risks for customers.
INFORMATION ABOUT THE GROUP
With regard to cash flow management within the Group, a centralised treasury management system enables the automatic elimination of co-existing large debit and credit balances attributable to individual companies, offering the Group advantages in terms of improved liquidity and a reduction in the related risk.
The system includes the four main subsidiaries, and makes use, with regard to the banking channel, of zero balance cash
pooling. In this way cash flows between the current accounts of subsidiaries and Poste Italiane SpA are transferred on a
daily basis.
FINANCIAL STRUCTURE
Poste Italiane SpA’s financial structure at 31 December 2011 is solid and balanced, and adequately protected from liquidity
or refinancing risks. Overall borrowings are primarily medium/long-term, except for bank and intercompany overdrafts,
repurchase agreements and drawdowns on short-term lines of credit. Medium/long-term debt is sufficient to cover expected financial needs.
BancoPosta RFC
At the end of the reporting period BancoPosta RFC has unused uncommitted lines of 200 million euros for use on the
overnight market. It also has unused overdraft facilities in place, totalling 1 million euros.
At the end of the reporting period the Company has unused uncommitted lines of 980.2 million euros, of which 50 million
euros has been used. It also has unused overdraft facilities in place, totalling 55.2 million euros, and bank guarantee facilities with a value of 189.5 million euros, of which guarantees with a value of 73 million euros have been used in the interests of the Company and 0.7 million euros in the interests of Group companies (note 35.4).
4 - CHANGES IN PROPERTY, PLANT AND EQUIPMENT
The following table shows changes in Property, plant and equipment in 2010 and 2011:
4.1 - Changes in Property, plant and equipment
Land
Cost
Carrying amount
Purchases
Adjustments
Reclassifications
Disposals
Depreciation
Impairments
Total changes
70,379
70,379
Properties
used in
operations
Industrial
and
Plant and commercial
equipment equipment
2,517,990 1,920,426
(850,769) (1,278,093)
(13,981)
(3,976)
1,653,240
638,357
Leasehold
improvements
Assets in the
course of
Other construction and
assets
prepayments
289,352
(227,905)
(770)
60,677
210,022
(53,821)
(4)
156,197
1,176,826
(970,378)
(1)
206,447
27,441
37,988
(1)
(26,042)
(947)
38,439
55,028
40,253
(346)
(78,626)
16,309
Total
180,395 6,365,390
- (3,380,966)
(18,732)
180,395 2,965,692
625
(26)
(52)
(462)
85
27,011
264
(906)
(95,876)
(1,267)
(70,774)
37,244
43,123
(283)
(129,913)
(397)
(50,226)
12,421
26
(89)
(14,406)
(2,048)
70,567
(103)
70,464
2,521,092
(923,378)
(15,248)
1,582,466
1,915,946
(1,324,175)
(3,640)
588,131
301,088
(241,689)
(770)
58,629
1,376
237
(31)
(51)
1,531
22,489
5,462
(2,283)
(96,862)
(2,716)
(73,910)
48,321
13,136
(18,909)
(114,083)
(45)
(71,580)
7,479
414
(58)
(13,552)
(5,717)
72,098
(103)
71,995
2,541,486
(1,016,123)
(16,807)
1,508,556
1,797,129
(1,277,751)
(2,827)
516,551
306,810
(253,128)
(770)
52,912
Adjustments(1)
Cost
Other liabilities
Total
237
237
-
-
-
-
-
-
237
237
Cost
Total
(31)
(31)
3,500
1,962
5,462
12,077
1,059
13,136
(840)
1,254
414
13,439
(13)
13,426
24,417
(1,225)
23,192
(59,290)
(59,290)
(6,728)
3,037
(3,691)
Disposals(3)
Cost
(51)
-
(5,595)
2,155
1,157
(179,215)
159,448
858
(917)
859
-
(1,965)
743
859
(29,912)
18,400
-
(2,049)
-
(219,704)
181,605
2,874
Total
(51)
(2,283)
(18,909)
(58)
(363)
(11,512)
(2,049)
(35,225)
Cost
Carrying amount
Purchases
Adjustments (1)
Reclassifications (2)
Disposals (3)
Depreciation
Impairments
Total changes
Cost
Carrying amount
None of the above items is attributable to BancoPosta RFC.
274,938 1,268,318
(80,268) (1,045,561)
(34)
(1)
194,636
222,756
27,273
13,426
(363)
(30,093)
(865)
9,378
41,033
23,192
(11,512)
(76,238)
(38)
(23,563)
313,685 1,303,856
(109,631) (1,104,624)
(40)
(39)
204,014
199,193
64,198
(156,112)
(91,914)
223,968
(34,484)
(1,677)
(344,863)
(3,073)
(160,129)
88,481 6,440,430
- (3,615,071)
(19,796)
88,481 2,805,563
41,091
(59,290)
(2,049)
(20,248)
189,062
237
(3,691)
(35,225)
(330,828)
(3,664)
(184,109)
68,233 6,403,297
- (3,761,257)
(20,586)
68,233 2,621,454
316
At 31 December 2011 Property, plant and equipment includes assets belonging to the Parent Company located on land held
under concession or sub-concession, which is to be handed over free of charge at the end of the concession term, with a
carrying amount of 154,502 thousand euros (173,782 thousand euros at 31 December 2010).
The principal changes during 2011 are described below.
Capital expenditure of 189,062 thousand euros primarily regards:
• 22,489 thousand euros relating to properties used in operations and primarily referring to the extraordinary maintenance
of post offices, mail sorting offices and local head offices around the country;
• 48,321 thousand euros relating to plant, consisting of plant for buildings (25,529 thousand euros), the purchase of sorting equipment used at Sorting Centres (9,097 thousand euros), installation of a LAN (Local Area Network) for the
Company’s communications (5,602 thousand euros), the installation and maintenance of video surveillance systems
(5,158 thousand euros), and the installation of ATMs (2,935 thousand euros);
• 7,479 thousand euros relating primarily to the purchase of various front- and back-office equipment for post offices (4,841
thousand euros) and security equipment for post office access and for the deposit of cash and sundry documents (1,413
thousand euros);
• 27,273 thousand euros invested in plant upgrades (18,296 thousand euros) and structural improvements (8,977 thousand
euros) for properties held under lease;
• 41,033 thousand euros regarding Other assets, including 24,403 thousand euros for the purchase of new computer hardware for post offices and head offices and the expansion of storage systems, 7,811 thousand euros for the purchase of
furniture and fittings in connection with the new layouts for post offices, and 5,696 thousand euros for the reorganisation
of delivery systems for postal services and the purchase of new equipment;
• 41,091 thousand euros for investments in progress, with 16,023 thousand euros for the purchase of computer hardware
and other equipment yet to enter service, 15,908 thousand euros relating to the restyling of post offices, 4,250 thousand
euros regarding the renovation of central facilities, and 1,472 thousand euros for the installation of a photovoltaic plant at
a Sorting Centre.
Impairments of 3,664 thousand euros primarily regard assets located on land held under concession or sub-concession, for
which, whilst awaiting confirmation of renewal, the concession term has expired. The impairment, inclusive or depreciation
of assets to be handed over free of charge at the end of the concession term, is calculated on the basis of the probable
residual duration of the right to use the assets, estimated on the basis of the framework agreements entered into with the
Public Sector, the status of negotiations with the grantors and past experience.
Reclassifications from Assets in the course of construction, totalling 59,290 thousand euros, primarily regard the purchase
cost of assets that became available and ready for use during the period. Above all, these assets regard the rollout of hardware held in storage and completion of the process of restyling leased and owned properties.
Disposals, with a total carrying amount of 35,225 thousand euros, primarily regard the Company’s transfer to the Group
company, PosteMobile, of telecommunications infrastructure (17,768 thousand euros), technology assets in use (11,362
thousand euros) and technology assets not yet entered service (1,994 thousand euros). The impact of these disposals on
the income statement is described in note 26.2.
5 - INVESTMENT PROPERTY
Investment property primarily regards former service accommodation owned by Poste Italiane SpA pursuant to Law 560
of 24 December 1993, and residential accommodation previously used by post office managers. None of the property
included in this item is attributable to BancoPosta RFC.
The following changes in investment property took place in 2011 and 2010:
5.1 - Changes in investment property
2011
2010
163,120
(67,662)
(3,435)
92,023
127,310
(45,172)
(5,121)
77,017
212
(9)
(7,710)
(5,120)
801
469
29,069
(10,908)
(4,727)
1,103
(11,826)
15,006
150,303
(67,705)
(2,401)
80,197
126,540
163,120
(67,662)
(3,435)
92,023
140,037
(20)
11
(9)
53,701
(24,632)
29,069
(13,009)
5,066
233
(7,710)
(18,360)
6,869
583
(10,908)
Cost
Carrying amount
Purchases
Disposals(2)
Depreciation
Reversals of Impairments/(Impairments)
Total changes
Cost
Carrying amount
Fair value at 31 December
Cost
Total
Disposals(2)
Cost
Total
The fair value of Investment property at 31 December 2011 amounts to 126,540 thousand euros. This value includes 75,242
thousand euros representing the sale price applicable to the Company’s former service accommodation pursuant to Law
560 of 24 December 1993, whilst the residual amount refers to internal estimates of market prices.
Most of the properties included in this category are subject to lease agreements classifiable as operating leases, given that
Poste Italiane SpA retains substantially all the risks and rewards of ownership of the properties. Under the relevant agreements, tenants usually have the right to break off the lease with six months notice. Given the resulting lack of certainty,
the expected revenue flows from these leases are not referred to in these notes.
318
6 - INTANGIBLE ASSETS
The following table shows changes in Intangible assets in 2010 and 2011:
6.1 - Changes in intangible assets
Industrial patents
and intellectual
property rights
Concessions,
licences, trademarks
and similar rights
Intangible assets in
progress and
prepayments
Other
Total
1,124,411
(862,498)
261,913
2,026
(2,010)
16
82,985
82,985
68,868
(68,868)
-
1,278,290
(933,376)
344,914
52,956
31,890
(142,363)
(5)
102,844
(31,890)
-
-
155,800
(142,368)
(57,517)
(5)
70,954
-
13,432
1,209,257
(1,004,861)
204,396
2,026
(2,015)
11
153,939
153,939
68,868
(68,868)
-
1,434,090
(1,075,744)
358,346
71,312
93,001
(2,916)
(136,876)
24,521
(3)
(3)
82,914
(93,092)
(1,709)
(11,887)
-
154,226
(91)
(4,625)
(136,879)
12,631
1,364,279
(1,135,362)
2,026
(2,018)
142,052
-
68,868
(68,868)
1,577,225
(1,206,248)
228,917
8
142,052
-
370,977
93,001
93,001
-
(93,092)
(93,092)
-
(91)
(91)
(9,291)
6,375
(2,916)
-
(1,709)
(1,709)
-
(11,000)
6,375
(4,625)
Cost
Carrying amount
Purchases
Adjustments
Reclassifications
Amortisation
Total changes
Cost
Carrying amount
Purchases
Adjustments
Disposals(2)
Amortisation
Total changes
Cost
Carrying amount
Cost
Total
Disposals(2)
Cost
Total
None of the above items is attributable to BancoPosta RFC.
Investment in intangible assets during 2011 amounts to 154,226 thousand euros, including 8,421 thousand euros regarding software developed in-house and the related costs.
The increase of 71,312 thousand euros in Industrial patents and intellectual property rights, before amortisation for the year,
primarily refers to the purchase and entry into service of new software applications.
The balance of Intangible assets in progress and prepayments includes uncompleted investment by the Parent Company, primarily regarding the development of software used in the infrastructure platform (47,585 thousand euros), the provision of
BancoPosta services (40,091 thousand euros), reporting and accounting systems (17,402 thousand euros), the postal products
platform (17,453 thousand euros) and platform for Integrated Web Services provided to postal customers (12,504 thousand euros).
During the year, the Company effected reclassifications from Intangible assets in progress and prepayments to Industrial
patents and intellectual property rights, amounting to 93,001 thousand euros. This primarily reflects the release and entry
into service of new software programmes and the evolution of existing programmes.
Disposals, with a total carrying amount of 4,625 thousand euros, primarily regard the transfer to the Group company,
PosteMobile, of software applications in use, amounting to 2,529 thousand euros, and of applications tested but that have
not yet entered service, totalling 1,709 thousand euros.
7 - INVESTMENTS
This item includes the following:
7.1 - Investments
Item
1,487,022
980
1,016,419
980
1,488,002
1,017,399
Investments in subsidiaries
Investments in associates
Total
No investments are attributable to BancoPosta RFC. Changes in investments in subsidiaries and associates during 2010 and
2011 are as follows:
7.2 - Changes in investments in 2010
Investments
Balance at
1 January
2010
in subsidiaries
12,000
263
CLP ScpA
84
Consorzio Poste Contact
61
Cons. Servizi di Telefonia Mobile ScpA
191,410
EGI SpA
5,769
Mistral Air Srl
120
Poste Energia SpA
1,739
Poste Italiane Trasporti SpA
70
Poste Link Scrl
1,808
Poste Tributi ScpA
818
Poste Tutela SpA
563,481
Poste Vita SpA
319
Poste Voice SpA
12,789
Postecom SpA
131,575
Postel SpA
41,051
PosteMobile SpA
5,815
PosteShop SpA
105,460
1,074,632
Total subsidiaries
in associates
Telma-Sapienza Scarl
Total associates
1,074,632
Total
Additions
Subscriptions/Capital
Acquisicontributions
tions
Reductions
Sales,
liquidations,
mergers
Adjustments
Reval.
Balance at
31 December
(Impair.)
2010
3,500
1,739
5,239
-
(84)
(1,739)
84
(42)
(1,781)
-
(277)
(61,394)
(61,671)
12,000
263
61
191,410
9,269
120
154
1,808
818
563,481
12,789
131,575
41,051
5,815
45,805
1,016,419
980
980
6,219
-
(1,781)
-
(61,671)
980
980
1,017,399
320
7.3 - Changes in investments in 2011
Investments
Balance at
1 January
2011
in subsidiaries
Banca del Mezzogiorno MCC SpA
12,000
CLP ScpA
263
Cons. Servizi di Telefonia Mobile ScpA
61
EGI SpA
191,410
Mistral Air Srl
9,269
Poste Energia SpA
120
Poste Link Scrl
154
Poste Tributi ScpA
1,808
Poste Tutela SpA
818
Poste Vita SpA
563,481
Postecom SpA
12,789
Postel SpA
131,575
PosteMobile SpA
41,051
PosteShop SpA
5,815
45,805
Total subsidiaries
1,016,419
in associates
Telma-Sapienza Scarl
980
Total associates
980
Total
1,017,399
Additions
Subscriptions/Capital
Acquisicontributions
tions
Reductions
Sales,
liquidations,
mergers
Adjustments
Reval.
Balance at
31 December
(Impair.)
2011
3,000
305,000
29,979
337,979
139,978
139,978
(154)
(154)
-
(7,200)
(7,200)
139,978
12,000
263
61
191,410
12,269
120
1,808
818
868,481
12,789
124,375
71,030
5,815
45,805
1,487,022
337,979
139,978
(154)
-
(7,200)
980
980
1,488,002
Changes during 2011 regard.
• The acquisition from UniCredit SpA, on 1 August 2011, of the entire share capital of Unicredit – MedioCredito Centrale
SpA, a company set up to promote and manage government subsidies for businesses, designed to support economic
development. The acquisition was completed for a provisional consideration of 136,000 thousand euros and a subsequent
earn-out of 3,978 thousand euros. On 5 December 2011 Unicredit – MedioCredito Centrale SpA changed its name to
“Banca del Mezzogiorno – MedioCredito Centrale SpA”.
• A contribution of 3,000 thousand euros to Mistral Air Srl to cover losses incurred in the six months ended 30 June 2011
and establish an extraordinary reserve, as approved by the extraordinary general meeting of the subsidiary’s shareholders on 12 October 2011.
• On 29 March 2011 Postel SpA acquired the stakes held by Poste Italiane and PosteCom SpA (70% and 15%, respectively) in Poste Link Scrl, having aleady acquired the remaining 15%, and on 24 June 2011 PosteLink Scrl was merged with
and into Postel SpA, effective for legal purposes from 30 June 2011, whilst the tax and accounting effects were backdated to 1 January 2011. Following registration of the merger deed, Poste Link Scrl was struck off the Companies’ Register.
The transaction generated a gain for the Company of 7,787 thousand euros (note 26.2).
• Subscription of a capital increase of 305,000 thousand euros by Poste Vita SpA, as approved by the extraordinary general meeting of Poste Vita SpA’s shareholders on 21 December 2011, in order to equip the company with the capital necessary to fund its future growth.
• Subscription of the capital increase carried out by the subsidiary, PosteMobile SpA, via the contribution of Poste Italiane
SpA’s Telecommunications unit on 31 March 2011, with a carrying amount of 29,979 thousand euros.
In addition, on 7 September 2011 a new shareholder acquired an interest in Telma-Sapienza Scarl, thus reducing Poste
Italiane SpA’s holding from 32.45% to 32.18%. Following the entry of a further new shareholder on 1 March 2012, the interest in Telma-Sapienza Scarl was reduced from 32.18% to 30.20%.
The following table shows a list of investments in subsidiaries and associates at 31 December 2011:
7.4 - List of investments in subsidiaries and associates
Name
Subsidiaries
Banca del Mezzogiorno MCC SpA(2)
CLP ScpA
Consorzio per i Servizi di Telefonia
Mobile ScpA(3)
EGI SpA
Mistral Air Srl
Poste Energia SpA
Poste Tributi ScpA
PosteTutela SpA
Poste Vita SpA(3)
Postecom SpA
Postel SpA
PosteMobile SpA
PosteShop SpA
Associates
Telma-Sapienza Scarl(4)
(1)
(2)
(3)
(4)
% interest
Share
capital(1)
Profit/(loss)
for the year
Carrying
amount of
Equity
Share of
Equity
Carrying Difference between
amount at
Equity and
31 Dec 2011
carrying amount
100
100
51
132,509
12,000
516
699
8,357
-
139,273
74,757
516
139,273
74,757
263
139,978
12,000
263
(705)
62,757
-
51
55
100
100
70
100
100
100
100
100
100
100
120
103,200
530
120
2,583
153
866,608
6,450
20,400
32,561
2,582
56,339
6,371
(2,178)
94
1,156
131,736
4,100
(25,019)
16,568
1,284
(7,619)
120
441,997
2,512
972
2,583
9,310
1,607,118
42,839
125,688
61,599
4,548
44,894
61
243,098
2,512
972
1,808
9,310
1,607,118
42,839
125,688
61,599
4,548
44,894
61
191,410
12,269
120
1,808
818
868,481
12,789
124,375
71,030
5,815
45,805
51,688
(9,757)
852
8,492
738,637
30,050
1,313
(9,431)
(1,267)
(911)
32.18
1,523
-
-
-
980
(980)
Consortium fund in the case of consortia. The registered offices of subsidiaries and associates are all located in Rome.
The profit/(loss) for the period refers to the period from 1 August 2011 (the date of the company’s acquisition) to 31 December 2011.
The figures for these companies have been calculated under IFRS, and are not, therefore, consistent with those contained in the financial statements prepared under Italian GAAP.
Figures unavailable.
The impairment testing of investments required by the related accounting standards has been conducted. The tests carried
out at 31 December 2011 were based on three-year plans, covering the period 2011-2013, for the relevant cash generating
units (the companies and their subsidiaries). The figures for the last year of the plan were used to project cash flows for
subsequent years over an indefinite time horizon. The Discounted Cash Flow (DCF) method was then applied to the resulting amounts. In calculating value in use, NOPLAT (Net operating profit less adjusted taxes) was capitalised using an appropriate growth rate and discounted using the related WACC (Weighted average cost of capital). A growth rate of 1% was
used in the tests carried out at 31 December 2011.
Based on the available prospective information and the results of the impairment tests conducted, the value of the investment in Postel SpA has been written down by 7,200 thousand euros (note 31.1).
322
8 - FINANCIAL ASSETS ATTRIBUTABLE TO BANCOPOSTA
Financial assets attributable to BancoPosta break down as follows at 31 December 2011 and 2010.
8.1 - Financial assets attributable to BancoPosta
Item
Note
Receivables
Equity instruments
Cash flow hedges
Fair value hedges
Total
[8.8]
[8.8]
Non-current
assets
Current
assets
-
Total
Non-current
assets
Current
assets
Total
8,754,179
8,754,179
-
7,430,751
7,430,751
13,616,562
13,616,562
747,331
747,331
14,363,893
14,363,893
12,969,208
12,969,208
1,799,005
1,799,005
14,768,213
14,768,213
12,691,923
12,669,254
22,669
772,764
772,764
-
13,464,687
13,442,018
22,669
13,593,533
13,567,567
25,966
968,001
968,001
-
14,561,534
14,535,568
25,966
68,772
17,642
68,772
4,798
12,844
26,377,257 10,291,916
86,414
73,570
12,844
36,669,173
87,252
953
25,228
953
62,024
26,649,993 10,198,710
88,205
26,181
62,024
36,848,703
These operations regard the financial services provided by the 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 accounts
deposits, carried out in the name of BancoPosta but subject to statutory restrictions on the investment of the liquidity in
compliance with the applicable legislation, and the management of collections and payments on behalf of third parties.
These include the collection of postal savings (savings books and savings certificates), carried out on behalf of Cassa
Depositi e Prestiti and the MEF, and services delegated by Public Sector entities. Among other things, 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, signed on 8 May 2009 and extended with an addendum dated on 29 September
2011, expires on 30 June 2012, and requires BancoPosta to provide daily statements of all cash flows, with a delay of one
bank working day with respect to the transaction date.
RECEIVABLES
Receivables break down as follows:
8.2 - Financial receivables attributable to BancoPosta
Item
Non-current
assets
Current
assets
Total
Non-current
assets
Current
assets
Total
- 7,060,499
793,537
900,143
7,060,499
793,537
900,143
-
6,173,455
829,234
428,062
6,173,455
829,234
428,062
Total
- 8,754,179
8,754,179
-
7,430,751
7,430,751
As provided for in the specific agreement with the MEF, renewed on 1 April 2011, approved by Ministerial Decree and valid
until 31 December 2011, these deposits regard the investment of liquidity deriving from current account deposits by Public
Sector entities with the parent and are remunerated at a floating rate in line with the European Commission’s Decision of
16 July 2008.
8.3 - MEF on behalf of the Italian Treasury
Non-current
assets
Current
assets
Total
Non-current
assets
Current
assets
Total
-
1,439,513
1,439,513
-
1,177,544
1,177,544
Balance of cash flows from management of postal savings
-
(358,238)
(358,238)
-
(73,403)
(73,403)
-
(160,224)
(160,224)
-
(160,499)
(160,499)
-
(127,514)
(127,514)
-
(114,408)
(114,408)
Total
-
793,537
793,537
-
829,234
829,234
Item
8.4 - Balance of cash flows for advances
Non-current
assets
Current
assets
-
MEF postal current accounts and other payables
Ministry of Justice - Orders for payment
MEF - State pensions
Total
Item
Net advances
Total
Non-current
assets
Current
assets
Total
1,445,858
1,445,858
-
1,175,460
1,175,460
-
(680,713)
(680,713)
-
(679,417)
(679,417)
-
(3,024)
(3,024)
-
16
16
-
677,392
677,392
-
681,485
681,485
-
1,439,513
1,439,513
-
1,177,544
1,177,544
The balance of cash flows for advances represents the net amount receivable as a result of transfers of deposits and excess
liquidity, less advances from the MEF to meet the cash requirements of BancoPosta.
Balance of cash flows from the management of Postal Savings
This item represents the balance of deposits less withdrawals during the last day of the period and cleared on the first day
of the following period. The balance at 31 December 2011 consists of 434,939 thousand euros payable to Cassa Depositi
e Prestiti (109,428 thousand euros at 31 December 2010), less 76,701 thousand euros receivable from the MEF for outflows on its behalf (36,025 thousand euros at 31 December 2010).
324
The Company is liable to the MEF on behalf of the Italian Treasury for losses resulting from robberies and fraud. This liability derives from the 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. Changes in this liability during the period are as follows:
8.5 - Changes in Amounts payable for responsibility for robberies
Amounts payable for robberies during the year
Repayments made
Note
2011
2010
[31.1]
160,499
6,778
(7,053)
164,604
6,748
(10,853)
160,224
160,499
During 2011 the Company made repayments of 3,683 thousand euros to the Treasury for robberies that took place up to
31 December 2010 and repayments of 2,694 thousand euros for robberies during the first half of 2011. A further 676 thousand euros was repaid following rulings by the Italian Court of Auditors in respect of robberies up to 31 December 1993.
These payables regard the portion of advances obtained to fund the operations of BancoPosta, relating to advances from
the MEF for transactions for which there were insufficient funds. Changes in these payables are as follows:
8.6 - Changes in Amounts payable to the Italian Treasury for operational risks
Note
New payables for operational risks
Operational risks that did not occur
2011
114,408
9,462
(1,337)
102,647
11,074
(1,727)
[31.1]
8,125
4,981
9,347
(83)
2,497
127,514
114,408
Repayments made
Reclassification for Provisions for disputes
2010
Other Financial Receivables
8.7 - Other financial receivables
Item
Guarantee deposits
Cheques drawn on third parties awaiting clearance
BancoPosta ATM withdrawals to be debited to customer accounts
Other amounts to be charged to customers
Items awaiting settlement with the banking system
Other receivables
503,880
233,407
70,379
39,884
39,057
13,536
90,074
92,718
70,189
138,529
18,624
17,928
Total
900,143
428,062
Guarantee deposits, totalling 503,880 thousand euros include 481,290 thousand euros (89,560 thousand euros al 31
December 2010) provided to counterparties with whom the Company has executed asset swap transactions (with collateral provided by specific Credit Support Annexes) as part of the Group’s cash flow and fair value hedging policies, and 22,590
thousand euros (514 thousand euros at 31 December 2010) provided to counterparties in outstanding repo liabilities on
fixed income securities (with collateral provided by specific Global Master Repurchase Agreements).
Other amounts to be charged to customers primarily regard:
• amounts due from commercial partners derive from the handling of Postepay card top-ups and the payment of pre-printed bills by their distribution networks, and total 21,689 thousand euros;
• use of the debit cards issued by BancoPosta, totalling 11,139 thousand euros;
• cheques and other post office securities settled through the clearing house, totalling 3,475 thousand euros (90,821 thousand euros at 31 December 2010). The reduction compared with the previous year is due to optimisation of the process
for handling remittances from the clearing house.
Items awaiting settlement with the banking system regard debit card payments made at post offices, totalling 37,026 thousand euros, and other items being processed in relation to ATM withdrawals using third-party debit cards, totalling 2,031
thousand euros.
INVESTMENTS IN SECURITIES
This item regards investments in fixed income euro area government securities with a face value of 30,043,200 thousand
euros, and consisting of Italian government securities. In compliance with the 2007 Budget Law, with effect from 2007 the
Parent Company is required to invest the funds raised from deposits paid into postal current accounts by private customers
in euro area government securities.
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 appropriate statistical models developed for the Company by a leading market operator. An Asset & Liability Management system has been created to management the match between customer deposits and investments. During the first half the process of matching the maturity of the portfolio with the new replication model for deposits, introduced in 2010, continued.
Changes in Investments in securities in 2011 and 2010 are as follows:
8.8 - Changes in Investments in securities
HTM
Purchases
Face
value
Total
Face
value
Fair
value
13,114,650
13,287,112
14,092,700
15,067,840
100,000
2,695,000
2,814,133
6,967,000
7,196,615
1,911,000
(150,000)
(154,059)
(5,707,350)
(5,814,550)
(2,011,000)
(2,025,807)
(7,868,350)
(7,994,416)
(1,150,000)
(1,150,000)
(835,000)
(835,000)
-
-
(1,985,000)
(1,985,000)
Sales
Redemptions
FVPL
Carrying
amount
Securities
AFS
Face
value
Fair
value
Face
Value
Carrying
amount
104,021
27,307,350
28,458,973
1,921,109
11,573,000
11,931,857
Transfers to Equity reserves
-
(17,857)
-
(227,728)
-
-
-
(245,585)
Increase/(Decrease) in accrued income
-
(5,029)
-
17,645
-
677
-
13,293
-
(6,087)
-
9,912
-
-
-
3,825
Fair value gains/(losses) through profit or loss
-
-
-
(24,694)
-
-
-
(24,694)
Fair value gains/(losses) through Equity
-
-
-
(854,472)
-
-
-
(854,472)
14,509,650
14,768,213
14,517,350
14,535,568
-
-
29,027,000
29,303,781
1,300,000
1,225,677
5,873,200
5,768,963
-
-
7,173,200
6,994,640
(50,000)
(50,576)
(3,838,500)
(3,824,282)
-
-
(3,888,500)
(3,874,858)
Purchases
Sales
Redemptions
(1,522,000)
(1,522,000)
(746,500)
(746,500)
-
-
(2,268,500)
(2,268,500)
Transfers to Equity reserves
-
(44,557)
-
(114,189)
-
-
-
(158,746)
Increase/(Decrease) in accrued income
-
(14,103)
-
2,163
-
-
-
(11,940)
-
1,239
-
23,242
-
-
-
24,481
Fair value gains/(losses) through profit or loss
-
-
-
407,960
-
-
-
407,960
Fair value gains/(losses) through Equity
-
-
-
(2,610,907)
-
-
-
(2,610,907)
14,237,650
14,363,893
15,805,550
13,442,018
-
-
30,043,200
27,805,911
326
At 31 December 2011 the fair value of the held-to-maturity portfolio, accounted for at amortised cost, is 13,174,718 thousand
euros (including 222,786 thousand euros in accrued daily interest payments). A notional amount of 1,552,000 thousand euros
regards securities that are encumbered as they have been used as collateral for repurchase agreements (note 20.1).
The fair value of the available-for-sale portfolio is 13,442,018 thousand euros (including 226,519 thousand euros in accrued
daily interest payments). A notional amount of 600,000 thousand euros regards encumbered investments in securities
used as collateral for repurchase agreements (note 20.1). In addition, securities with a notional amount of 230,000 thousand euros had been used as collateral for repurchase agreements unwound in January 2012. The overall fair value loss of
2,202,947 thousand euros for the year is recognised in the relevant Equity reserve, consisting of a loss of 2,610,907 thousand euros relating to the portion of the portfolio not covered by fair value hedges, and in the income statement, represented by a loss of 407,960 thousand euros relating to the hedged portion. The losses reflect the downgrade of Italy’s credit rating in the second half of 2011.
INVESTMENTS IN EQUITY INSTRUMENTS
Equity instruments primarily include:
• 21,682 thousand euros relating to the fair value of 75,628 class B shares in MasterCard Incorporated held by the Parent
Company (150,628 shares with a fair value of 25,263 thousand euros at 31 December 2010). These equity instruments
are not quoted on a regulated market but, should it be necessary to sell them, they may be converted into an equal number of Class A shares, which are listed on the New York Stock Exchange. 75,000 shares were sold to third parties during
the year, realizing a gain of 20,318 thousand euros;
• 870 thousand euros relating to the fair value of 11,144 class C shares in Visa Incorporated (11,144 shares with a fair value
of 586 thousand euros at 31 December 2010). In accordance with the issuer’s memorandum of association, the class C
shares are non-transferable and are convertible into class A shares, which are quoted on the New York Stock Exchange;
• 117 thousand euros regarding the historical cost of the 8.637% interest in Eurogiro Holding A/S, the value of which is
unchanged with respect to the previous year.
Fair value gains during the period amount to 9,282 thousand euros and have been recognised in the relevant Equity reserve (note 17).
Changes in derivative financial instruments are as follows:
Cash flow hedges
Note
Forward purchases
notional
Fair value hedges
Asset swaps
fair value
notional
Asset swaps
fair value
notional
fair value
FV through profit or loss
Forward purchases
Forward sales
notional
fair value
notional
fair value
Total
notional
fair value
578,000
40,969
2,618,700
(93,075)
-
-
-
-
100,000
(7)
3,296,700
Discontinued CFHs
(91,000)
(6,941)
-
-
-
-
91,000
6,941
-
-
-
-
1,820,000
2,802
450,000
83,259
2,950,000
15,904
-
2,286
541,000
(2,543)
5,761,000
101,708
Increases/(Decreases) (*)
Gains/(Losses) through profit or loss (**)
Transactions settled (***)
Increases/(Decreases) (*)
Discontinued CFHs
Gains/(Losses) through profit or loss (**)
Transactions settled (***)
(52,113)
-
-
-
-
-
(24)
-
-
-
-
-
(24)
(1,587,000)
(50,530)
(994,950)
2,476
-
2,864
(91,000)
(9,227)
(641,000)
2,550
(3,313,950)
(51,867)
720,000
(13,700)
2,073,750
(7,340)
2,950,000
18,744
-
-
-
-
5,743,750
(2,296)
3,190,000
(79,933)
1,710,000
(68,177)
750,000
(417,249)
-
-
-
-
5,650,000
(565,359)
(1,050,000)
(5,911)
-
-
-
-
1,050,000
5,911
-
-
-
-
-
-
-
(450)
-
(552)
-
-
-
-
-
(1,002)
(2,060,000)
68,263
(250,000)
(46,588)
-
9,513
-
-
-
-
(2,310,000)
31,188
800,000
(31,281)
3,533,750
(122,555)
3,700,000
(389,544)
1,050,000
5,911
-
-
9,083,750
(537,469)
of which:
Derivative assets
(*)
300,000
2,064
950,000
71,506
-
-
550,000
12,844
-
-
1,800,000
86,414
[20.1] 500,000
(33,345)
2,583,750
(194,061)
3,700,000
(389,544)
500,000
(6,933)
-
-
7,283,750
(623,883)
Increases /(Decreases) refer to the notional amount of new transactions and changes in the fair value of the overall portfolio during the period.
(**)
Gains and losses through profit or loss refer to any ineffective components of hedges, recognised in Other income and Other expenses from financial activities.
(***)
Transactions settled include forward transactions settled, accrued differentials and the extinguishment of asset swaps linked to securities sold.
N.B.: The opening balance and changes in 2010 solely regard derivative financial instruments associated with investments in securities.
During the year the following transactions in relation to cash flow hedges were carried out:
• the settlement of forward purchases outstanding at 31 December 2010 with a notional amount of 720,000 thousand
euros;
• the execution of new forward purchase agreements with a notional amount of 3,190,000 thousand euros (so-called cash
flow hedges of forecast transactions), including 1,340,000 thousand euros already settled at 31 December 2011;
• the reclassification of forward purchases with a notional amount of 1,050,000 thousand euros to derivative financial
instruments at fair value through profit and loss, following early settlement and resulting discontinuation15 of the hedges
in February 2012;
• the execution of asset swaps on securities purchased during the period and with a notional amount 1,710,000 thousand
euros and the extinguishment of asset swaps on securities sold, previously protected by cash flow hedges, with a notional amount of 250,000 thousand euros; as a result of these transactions, at 31 December 2011 the Parent Company
reports outstanding assets swaps with a total notional amount of 3,533,750 thousand euros with which BancoPosta has
purchased a fixed rate of 4.86% (the weighted average of the rates provided for in the contracts) and sold a floating rate
on inflation-linked BTPs (BTP€i) and CCTeus indexed to 6-month Euribor.
The effective portion of these instruments recorded an overall fair value loss of 148,110 thousand euros during the year,
which is reflected in the Cash flow hedge reserve.
During 2011 BancoPosta also executed fair value hedges to limit exposure to the price volatility of certain investments in
available-for-sale fixed income instruments. These instruments are long-term in nature or designed to provide portfolio flexibility. These transactions include asset swaps with a total notional amount of 750,000 thousand euros, including 350,000
thousand euros to be activated in 2015 and 400,000 thousand euros to be activated 2016. The swaps have enabled the
Company to purchase a suitable floating rate and sell the fixed rate applicable to the relevant BTPs. As a result of fluctuations in market rates, the effective portion of these instruments have undergone an overall net fair value loss of 417,249
thousand euros, whilst the hedged securities (note 8.8) have recorded a fair value gain of 407,960 thousand euros, with the
difference of 9,289 thousand euros being due to paid or maturing differentials. The losses reflect the downgrade of Italy’s
credit rating in the second half of 2011, given that the related exposure is not hedged.
Finally, with regard to derivative financial instruments measured at fair value through profit or loss, the above discontinued
hedge was settled in 2012 through forward sales with net proceeds of 55,618 thousand euros, after deducting the fair value
15. Discontinuation of the application of hedge accounting following a decision by management, or due to the early sale or extinguishment of the hedged or
hedging instrument, and the consequent application of a different accounting treatment, as required by the relevant IFRS.
328
9 - FINANCIAL ASSETS
At 31 December 2011 and 2010 financial assets outside the ring-fence are as follows:
9.1 - Financial assets
Item
Non-current
assets
Current
assets
Total
Non-current
assets
Current
assets
Total
760,928
545,280
215,648
427,670
4,500
423,170
1,188,598
516,060
222,796
293,264
103,933
5,775
98,158
619,993
1,276,988
768,076
508,912
531,603
4,500
428,945
98,158
1,808,591
991,800
655,560
336,240
463,528
4,500
367,200
91,828
20,517
20,517
1,475,845
500,205
198,118
302,087
108,691
104,591
4,100
2,416
2,416
611,312
1,492,005
853,678
638,327
572,219
4,500
471,791
95,928
22,933
22,933
2,087,157
Loans
Receivables
Equity instruments
Other investments
Fair value hedges
Total
Loans
Loans refer entirely to amounts due from Group companies, and break down as follows:
Non-current portion:
• 540,000 thousand euros relating to four subordinated loans issued to Poste Vita SpA, in order to bring the subsidiary’s
capitalisation into line with the growth in earned premiums, in compliance with the specific regulations governing the
insurance sector. These loans include an irredeemable loan of 250,000 thousand euros disbursed on 18 April 2008; a
residual loan of 90,000 thousand euros with a term to maturity of up to 5 years, with the original amount of 350,000 thousand euros disbursed on 24 June 2010 and which was partially repaid in 2011; a loan of 50,000 thousand euros with a
term to maturity of up to 5 years, disbursed on 20 September 2011; and an irredeemable loan of 150,000 thousand euros
disbursed on 20 September 2011;
• 5,280 thousand euros relating to the non-current portion of three 5-year loans (1,200, 480 and 3,600 thousand euros,
respectively), repayable in six-monthly instalments paid in arrears, granted to Postel SpA on 31 March 2008, 30
September 2008 and 20 May 2009, in order to fund the purchase of capital goods.
Current portion:
• 216,830 thousand euros in short-term loans and overdrafts on intercompany current accounts granted to subsidiaries,
paying interest on an arm’s length basis, as described in table 9.2;
• 5,966 thousand euros in interest accrued at 31 December 2011 on loans to the subsidiaries, Poste Vita SpA and Postel
SpA, accounted for in the non-current portion above.
9.2 - Current portion of loans and receivables
Name
Direct subsidiaries
Mistral Air Srl
Poste Energia SpA
Postel SpA
Postecom SpA
Accrued interest on non-current loans
Total
InterLoans
company
Total
accounts
InterLoans
company
Total
accounts
3,005
5,280
20,028
28,313
5,966
34,279
5,280
20,040
25,320
2,136
27,456
7,077
2,868
87,892
3,779
86,901
188,517
188,517
10,082
2,868
93,172
3,779
106,929
216,830
5,966
222,796
5,759
1,805
106,442
56,656
170,662
170,662
5,759
1,805
111,722
76,696
195,982
2,136
198,118
Receivables
Receivables break down as follows:
9.3 - Receivables
Non-current
assets
Current
assets
Total
Non-current
assets
Current
assets
Total
Due from parent
202,809
repayment of loans accounted for in liabilities
202,809
repayment of interest for 2010 on loan (Law 887/84)
Due from buyers of service accommodation
12,839
Due from others
Total
215,648
289,535
279,902
9,633
4,406
(677)
293,264
492,344
482,711
9,633
12,839
4,406
(677)
508,912
324,503
324,503
11,737
336,240
302,087
292,454
9,633
677
(677)
302,087
626,590
616,957
9,633
11,737
677
(677)
638,327
Item
At 31 December 2011 the fair value of receivables, totalling 482,711 thousand euros, due from the parent, the MEF, in the
form of the residual principal to be repaid on loans accounted for in liabilities, is 477,201 thousand euros. At 31 December
2010 the fair value of this item, at that time accounted for at 616,957 thousand euros, was 627,630 thousand euros. The
carrying amount of other receivables in this category approximates to fair value.
Receivables due from the parent, the MEF, amounting to 492,344 thousand euros, primarily regard a receivable of 482,711
thousand euros relating to the residual principal to be repaid on loans accounted for in liabilities, and which, in accordance
with the laws that authorised the relevant loans, are to be repaid by the parent. This receivable is represented by the amortised cost16 of a receivable with a face value of 505,773 thousand euros, which is expected to be collected by 2016. During
2011 Poste Italiane SpA collected receivables with a face value of 154,526 thousand euros and estimated accrued finance
income on the present value of the receivables to be 20,280 thousand euros.
On the basis of the laws referred to below, these receivables are non-interest-bearing as they relate to loans for which only
the principal is to be repaid by the government, with the exception of the loan linked to Law 887/8417.
16. The amortised cost of the non-interest bearing receivable in question was calculated on the basis of the present value obtained using the risk-free interest rate applicable at the date from which the incorporation of Poste Italiane SpA took effect (1 January 1998). The receivable is thus increased each year
by the amount of interest accrued and reduced by any amounts collected.
17. Interest was originally to be paid on this loan, but payments were suspended between 2001 and 2006, as a result of changes to the government’s budget. Interest accrued to 31 December 2009 was, instead, paid to Poste Italiane SpA from 2007.
330
The face value of these receivables is as follows:
Legislation
Face value of receivable
Law 227/75 (mechanisation of PO services)
17,706
Law 39/82 (subsequent changes to PO services)
283,028
Law 887/84
203,378
Law 41/86
1,661
Total
505,773
Such items represent repayments of loans formerly disbursed by Cassa Depositi e Prestiti, in accordance with the above
laws, to the former Post and Telecommunications Office in order to fund investment between 1975 and 1993. On conversion of the former Public Entity into a joint-stock company, the accounts payable to Cassa Depositi e Prestiti (the provider of
the loans) and the accounts receivable from the parent, the MEF, to which the relevant laws assigned the burden of repayment, were posted in the accounts. Poste Italiane SpA is liable for interest expense through to full repayment of the loans.
Receivables due from the parent, the MEF, also include 9,633 thousand euros in interest on the loan granted under Law
887/84 accruing in 2010 and yet to be collected.
Amounts due from others, totalling 4,406 thousand euros, include:
• guarantee deposits, totalling 3,729 thousand euros, accounted for in current assets, in favour of counterparties with
whom the Company has entered into outstanding repo liabilities on fixed income securities (with collateral provided by
specific Global Master Repurchase Agreements) (note 21.3);
• 677 thousand euros due from a counterparty declared bankrupt in 2008 and written off in the same year, resulting from
early extinguishment of two Interest Rate Swaps in accordance with the related contracts terms.
Available-for-sale financial assets break down as follows:
9.4 - Available-for-sale financial assets
Equity instruments
Fiduciary deposits
Mutual investment funds
Other investments
Total
4,500
428,945
4,500
471,791
94,466
3,692
92,098
3,830
98,158
531,603
95,928
572,219
Changes during the year are as follows:
9.5 - Changes in Available-for-sale financial assets
2011
Equity Fixed income
Other
Note instruments instruments investments
4,500
471,791
Total
95,928 572,219
2010
Equity Fixed income
Other
instruments instruments investments
4,500
101,143
99,225
-
500,324
2,089 (73,890)
-
(7,241)
-
(24,569)
-
99,225
-
(75,979)
FV gains and losses through profit or loss
-
33,115
-
(354)
-
(354)
-
(1,257)
-
(1,257)
Accrued income
-
5,776
411
6,187
-
4,629
270
4,899
Sales/redemptions/settlement of accrued income
-
(104,629)
(270) (104,899)
-
(101,238)
(261) (101,499)
4,500
428,945
98,158 531,603
4,500
471,791
95,928 572,219
FV gains and losses through Equity
[17.1]
-
Total
94,272 199,915
-
33,115
- 500,324
1,647
(5,594)
- (24,569)
Equity instruments
This item refers to the historical cost of the 15% interest in Innovazione e Progetti ScpA, the value of which is unchanged
with respect to the previous year.
This item regards investments in BTPs with a total face value of 500,000 thousand euros (a fair value of 428,945 thousand
euros), including 100,000 thousand euros purchased in 2011. Of this amount, securities worth 375,000 thousand euros have
been hedged via the asset swaps classified as fair value hedges, as described in note 9.6. All these securities are encumbered investments used as collateral for repurchase agreements entered into by the Company (note 21.3).
In 2011 the Company collected fixed income bonds issued by Cassa Depositi e Prestiti SpA with a face value of 100,000
thousand euros.
Other Investments
Other investments regard:
• a fiduciary deposit with a face value of 93,550 thousand euros (unchanged with respect to the end of 2010), established
in 2002 and expiring on 5 July 2012, and paying interest at a floating rate: the fair value of the fiduciary deposit at 31
December 2011 is 94,466 thousand euros (92,098 thousand euros at 31 December 2010). At 31 December 2011 approximately 86% of the deposit is held in cash, with the remainder invested in bonds. The Company has an option which, if
exercised, guarantees recovery of approximately 84% of the face value. The trustee has also entered into credit default
swaps (CDSs) with third-party counterparties to hedge exposure to the credit risk of certain issuers. These CDSs have a
total notional amount of 60 million euros18.
• Units of equity mutual investment funds with a fair value of 3,692 thousand euros (3,830 thousand euros at 31 December
2010).
Changes in derivative assets and liabilities are as follows:
2011
Note
Income/ Expenses through profit or loss
Transaction settled
2010
Fair value
hedges
22,933
(37,191)
10
4,717
(9,531)
Fair value
through
profit or loss
-
-
-
-
(9,531)
Cash flow
hedges
-
Fair value
Fair value
through
hedges profit or loss
Total
22,922
- 22,922
11
11
22,933
- 22,933
Total
22,933
(37,191)
10
4,717
(9,531)
Cash flow
hedges
-
-
-
-
22,933
-
(9,531)
-
-
of which:
Derivative assets
[21.1]
- 22,933
-
-
18. The deposit was established when the official rating was assigned to Poste Italiane SpA and represents liquidity reserves designed to guarantee Poste
Italiane SpA’s bondholders and provide the rating agencies with a basis for their analysis. The initial deposit (215,000 thousand euros) was calculated in
2002 based on the level of borrowing costs generated in a calendar year on Poste Italiane SpA’s debt. In response to the subsequent reduction in borrowing costs, the face value of the investment has been progressively reduced by 107,500 thousand euros and, following the bankruptcy of one of the counterparties to the CDSs, an impairment of 13,950 thousand euros was recognised in 2010. In addition to guaranteeing a return, the deposit aims to provide
additional assurances to the market and rating agencies. The establishment of the deposit in 2002 helped Poste Italiane SpA receive ratings that resulted
in benefits in terms of reduced borrowing costs.
332
At 31 December 2011 outstanding derivative financial instruments, registering fair value19 losses of 9,531 thousand euros
consist of nine asset swaps used as fair value hedges entered into in 2010 to protect the value of BTPs with a notional
amount of 375 million euros from movements in interest rates. These instruments have enabled the Company to sell the
fixed rate on the BTPs of 3.75% and purchase a suitable floating rate.
10 - TRADE RECEIVABLES
Trade receivables break down as follows:
10.1 - Trade receivables
Non-current
assets
181,555
-
Current
assets
1,243,271
271,567
5,502
1,310,277
181,555
181,555
2,830,617
350,208
60,907
355,045
766,160
3,596,777
Item
Customers
Subsidiaries
Associates
Parents
Trade receivables attributable to Poste Italiane
Customers
Subsidiaries
Parents
Trade receivables attributable to BancoPosta RFC
Total trade receivables
Total
1,424,826
271,567
5,502
1,310,277
Non-current
assets
216,583
-
Current
assets
1,056,187
222,912
171
948,552
Total
1,272,770
222,912
171
948,552
3,012,172
350,208
60,907
355,045
766,160
3,778,332
216,583
216,583
2,227,822
1,023,597
26,714
228,102
1,278,413
3,506,235
2,444,405
1,023,597
26,714
228,102
1,278,413
3,722,818
CUSTOMERS
10.2 - Receivables due from customers
Item
Unfranked mail delivered on behalf of third parties
Customers attributable to Poste Italiane
Customers attributable to BancoPosta RFC
Total customers
Non-current
assets
Current
assets
176,941
24,614
(20,000)
181,555
181,555
835,201
219,007
112,744
40,253
242,590
(206,524)
1,243,271
103,627
149,606
126,645
96,447
(126,117)
350,208
1,593,479
Total
Non-current
assets
Current
assets
Total
1,012,142
219,007
137,358
40,253
242,590
(226,524)
1,424,826
103,627
149,606
126,645
96,447
(126,117)
350,208
1,775,034
216,583
216,583
216,583
781,643
184,210
126,992
45,131
149,662
(231,451)
1,056,187
107,870
842,556
100,952
106,269
(134,050)
1,023,597
2,079,784
998,226
184,210
126,992
45,131
149,662
(231,451)
1,272,770
107,870
842,556
100,952
106,269
(134,050)
1,023,597
2,296,367
19. The fair value of these derivative instruments is based on the present value of expected cash flows deriving from the differentials to be exchanged.
Amounts due from customers outside the ring-fence
Ministries and Public sector entities
• Cabinet Office - Publishing department: 389,206 thousand euros, corresponding to a face value of 415,465 thousand
euros, relating to publisher tariff subsidies for the financial years from 2001 to 2010. The receivable is accounted for at its
present value to take account of the time it is expected to take to collect the amount due in accordance with the regulations in force and the information available. For this reason, the sum of 176,941 thousand euros (corresponding to a face
value of 203,200 thousand euros) is classified in Non-current assets;
• the Italian Office for National Statistics: 88,572 thousand euros regarding the printing, enveloping and delivery of the package for the 2011 national census;
• 62,426 thousand euros due from the tax authorities, primarily deriving from the provision of integrated mail services
(34,716 thousand euros) and the postage of unfranked mail (24,733 thousand euros);
• 58,362 thousand euros due from the Ministry for Economic Development, including 57,657 thousand euros as reimbursement of the costs associated with the management of property, vehicles and security (including 3,212 thousand euros in
amounts accrued during the period);
• 52,325 thousand euros due to the Parent Company from the Equitalia group, including 51,631 thousand euros for the
notification of tax assessments;
• 41,756 thousand euros due from the Ministry of Internal Affairs, including 22,759 thousand euros for integrated notification services and 18,997 thousand euros as payment for the franking of mail on credit;
• 39,608 thousand euros due from the Municipality of Rome, primarily in relation to the delivery of administrative notices;
• 29,879 thousand euros due from Lazio Regional Authority, primarily for the delivery of administrative notices;
• 28,701 thousand euros due from the Municipality of Milan, primarily for the delivery of administrative notices;
• 21,953 thousand euros payable by the Ministry of Justice, primarily for the delivery of administrative notices (19,491 thousand euros) and the postage of unfranked mail (2,462 thousand euros).
This item includes 218,349 thousand euros regarding postal services carried out by the Company for overseas postal operators, and 658 thousand euros relating to international telegraphic services.
Unfranked mail delivered on behalf of third parties
This item regards receivables deriving from the delivery of unfranked mail on behalf of third parties, primarily regarding bulk
mail. Collection of these receivables is delegated to the authorised agents who provide the service.
These receivables regard telegrams ordered by telephone (27,334 thousand euros) and other telegraphic services (12,919
thousand euros).
This item includes:
• receivables deriving from unfranked mail on own behalf (89,325 thousand euros);
• receivables deriving from parcel post operations (16,265 thousand euros);
• receivables deriving from the lease of commercial and residential properties, and premises used as canteens and bars
(13,128 thousand euros);
• receivables deriving from the distribution of telephone directories (12,838 thousand euros);
• receivables generated by the Posta Easy service (12,065 thousand euros).
334
Provisions for doubtful debts attributable to Poste Italiane
10.3 - Changes in Provisions for doubtful debts attributable to Poste Italiane
Private customers
Balance at
1 Jan 2010
8,259
111,525
73,639
193,423
5,693
attributable to Poste Italiane
Net Deferred
provisions revenues
1,922
6,537
3,213
27,159
570
35,618
3,783
3,411
-
199,116
39,029
Balance at
Net Deferred
Balance at
Uses 31 Dec 2010 provisions revenues
Uses 31 Dec 2011
(14)
10,167
(3,072)
7,095
(8,517)
112,758
(2,353)
3,212
113,617
(240)
101,128
(7,664)
502
93,966
(8,771)
224,053 (13,089)
3,714
214,678
(1,706)
7,398
6,039
- (1,591)
11,846
3,783 (10,477)
231,451
(7,050)
3,714 (1,591)
226,524
A portion of Provisions for doubtful debts was released to the income statement in 2011, reflecting the probable collection
of items originally deemed unlikely to be recovered.
Provisions regarding amounts due from Public Sector entities regard amounts that may be partially unrecoverable as a
result of legislation restricting public spending, delays in payment and problems at debtor entities.
Amounts due from customers of BancoPosta RFC
Ministries and Public Sector Entities
• 69,883 thousand euros due from INPS, including 61,404 thousand euros due for the payment of pensions by BancoPosta
and attributable entirely to 2011;
• 19,229 thousand euros payable to BancoPosta by the Ministry of Justice for the payment service provided for legal system expenses;
• 9,104 thousand euros due from the tax authorities, primarily deriving from the payment of tax rebates (5,284 thousand
euros, the collection of taxes (2,134 thousand euros) and the collection of tax returns (888 thousand euros).
This item includes 129,050 thousand euros in fees and commissions due for 2011 in relation to the management of postal
savings accounts by BancoPosta, with the remainder regarding previous years.
These are amounts due to BancoPosta for temporarily overdrawn current accounts due almost entirely to the debit of recurring bank charges, and include accumulated sums that BancoPosta is in the process of recovering, and which have largely
been written down.
This refers to amounts due on insurance and banking services, on personal loans, on overdrafts and on mortgages sold on
behalf of third parties, totalling 77,314 thousand euros.
Provisions for doubtful debts attributable to BancoPosta
10.4 - Changes in Provisions for doubtful debts attributable to BancoPosta
Private customers
Balance at
1 Jan 2010
42,115
80,694
122,809
43
attributable to BancoPosta
Net Deferred
provisions revenues
72
12,899
12,971
131
-
122,852
13,102
-
Balance at
Net Deferred
Uses 31 Dec 2010 provisions revenues
(1,881)
40,306
(16,878)
93,593
8,769
(1,881)
133,899
(8,109)
(23)
151
202
(1,904)
134,050
(7,907)
-
Balance at
Uses 31 Dec 2011
23,428
102,362
125,790
(26)
327
(26)
126,117
A portion of Provisions for doubtful debts was released to the income statement in 2011, reflecting the probable collection
of items originally deemed unlikely to be recovered. Provisions for doubtful debts relating to private customers almost
entirely regard the risk of not recovering numerous individually immaterial amounts due from overdrawn current account
holders.
DIRECT AND INDIRECT SUBSIDIARIES
Trade receivables due from subsidiaries are as follows:
10.5 - Receivables due from subsidiaries
Name
3,820
16,277
475
1,156
785
580
3,165
221
59,023
1,045
214,205
13,469
8,677
4,245
916
615
5,684
30
649
437
637
3,355
1,293
276
24,123
1,315
183,542
11,082
6,505
5,121
-
8
7
1,561
266
2,193
315
65
332,474
60,907
4
3
1,084
259
3,362
183
67
249,626
26,714
Direct subsidiaries
CLP ScpA
Consorzio per i Servizi di Telefonia Mobile ScpA
EGI SpA
Mistral Air Srl
Poste Energia SpA
Poste Link Scrl
Poste Tributi ScpA
Poste Tutela SpA
Poste Vita SpA
Postecom SpA
Postel SpA
PosteMobile SpA
PosteShop SpA
Banca del Mezzogiorno MCC SpA
Indirect subsidiaries
Docutel SpA
(1)
Kipoint SpA
Poste Assicura SpA
PostelPrint SpA
Uptime SpA
(1)
Total
of which attributable to BancoPosta RFC
(1)
Joint venture.
336
Trade receivables include:
• Postel SpA (196,000 thousand euros), mainly relating to receivables deriving from the delivery of Bulk Mail by Poste
Italiane SpA and collected by the subsidiary;
• Poste Vita SpA (51,343 thousand euros), largely regards fees deriving from the sale of insurance policies through Poste
Italiane SpA’s post offices and attributable to BancoPosta RFC.
PARENTS
Amounts receivable regard trade receivables due from the Ministry of the Economy and Finance. The following table shows
a breakdown:
10.6 - Receivables due from parents
Item
Universal Service
Publisher tariff and electoral subsidies
Payment for distribution of euro coins
Other
Receivables due from parents attributable to Poste Italiane
Remuneration of current account deposits
Payment for delegated services
Other
Receivables due from parents attributable to BancoPosta RFC
Total
1,211,432
161,067
6,026
6,492
(74,740)
1,310,277
326,467
36,322
228
(7,972)
355,045
1,665,322
854,330
155,758
6,026
5,293
(72,855)
948,552
190,818
36,322
962
228,102
1,176,654
Universal Service subsidies include 357,101 thousand euros representing the amount due for 2011, 364,463 thousand euros
in amounts accrued in 2010, 371,830 thousand euros in amounts accrued in 2009, 32,011 thousand euros in amounts
accrued in 2008 and 33,642, 43,722 and 8,663 thousand euros regarding residual amounts accrued in 2007, 2006 and 2005.
The balance includes the sum of 323,987 thousand euros deposited by the Ministry of the Economy and Finance, as of
December 2011, in a non-interest bearing escrow account held by the Company at the Italian Treasury and for this reason
accounted for in Advances received. This sum cannot be released until the European Commission has ruled on the
Contratto di Programma (Planning Agreement) for 2009-2011, and until the MEF has replenished its cash holdings.
Electoral subsidies include 23,308 thousand euros accruing in 2011, with the remainder attributable to previous years. At
31 December 2011 almost all these receivables have not been budgeted for by the Government.
Payment due for the distribution of euro coins refers to the supply and delivery of euro converters, carried out at the time
on behalf of the Cabinet Office. At 31 December 2011 these receivables have not been budgeted for by the Government.
The remuneration of current account deposits refers entirely to amounts accruing in 2011 and almost entirely regards the
deposit of funds deriving from accounts opened by Public Sector entities.
Payments for delegated services regard fees for treasury services carried out on behalf of the State by BancoPosta under
the recently renewed Agreement with the MEF. 28,350 thousand euros regards amounts accruing in 2011, with 7,972 thousand euros regards the residual amount due for 2008 and 2007.
10.7 - Changes in Provisions for doubtful debts due from parents
Balance at
Net
1 Jan 2010 provisions
Provisions attributable to Poste Italiane
Provisions attributable to BancoPosta RFC
Total provisions
77,230
77,230
Deferred
revenues
Uses
-
-
(4,375)
(4,375)
Balance at
Net Deferred
Balance at
31 Dec 2010 provisions revenues Uses 31 Dec 2011
72,855
72,855
1,885
7,972
9,857
-
-
74,740
7,972
82,712
Provisions for doubtful debts due from parents take account, overall, of the potential impact of legislation and other policies regarding the government’s management of the public finances, which could make it difficult to collect receivables
recognised on the basis of legislation, contracts and agreements in force at the time of recognition. The provisions reflect
the best estimate of unrecoverable amounts in view of the fact that these receivables have not been budgeted for by the
government and based on the related financial impact.
11 - OTHER RECEIVABLES AND ASSETS
11.1 - Other receivables and assets
Item
Non-current
assets
Current
assets
217,717
Receivables from fixed-term contract settlements
Amounts due from social security
agencies and pension funds
Amounts due from ministries and Public Sector
entities for seconded staff
Amounts due from subsidiaries
Accrued income and prepaid expenses from
trading transactions and other assets
Third-party deposits in savings books
in Poste Italiane's name
Prepaid taxes
Other receivables and assets attributable to Poste Italiane
Prepaid taxes
Amounts that cannot be drawn
on due to court rulings
Stamp duty paid and to be recovered
from current account holders
Amounts due from social security agencies and pension funds
Amounts due from subsidiaries
Accrued income and prepaid expenses from
trading transactions and other assets
Other receivables and assets attributable to BancoPosta RFC
Total Other receivables and assets
Total
Non-current
assets
Current
assets
Total
83,113
300,830
227,536
68,069
295,605
-
89,649
89,649
-
43,642
43,642
(1,392)
-
11,019
27,804
(28,280)
19,281
11,019
27,804
(29,672)
19,281
(2,189)
-
11,231
22,694
(22,221)
78
11,231
22,694
(24,410)
78
3,101
16,904
-
16,904
3,101
3,035
6,913
-
6,913
3,035
2,937
-
828
2,937
828
2,957
-
4,269
2,957
4,269
222,363
-
220,318
240,166
442,681
240,166
231,339
-
134,675
249,305
366,014
249,305
-
99,179
99,179
-
117,189
117,189
-
6,430
32,752
242
(24,958)
30
6,430
32,752
242
(24,958)
30
-
5,996
50,205
20
(24,127)
-
5,996
50,205
20
(24,127)
-
222,363
353,841
574,159
353,841
796,522
231,339
5,904
404,492
539,167
5,904
404,492
770,506
338
Other receivables and assets outside the ring-fence
Amounts due from staff under fixed-term contracts settlements consist of salaries to be recovered following the agreements of 13 January 2006, 10 July 2008 and 27 July 2010 between Poste Italiane SpA and the labour unions, regarding the
re-employment by court order of staff previously employed on fixed-term contracts. As shown in the following table, at 31
December 2011 these receivables regard the total residual present value of amounts due from staff and the former pension fund, IPOST, totalling 300,830 thousand euros. Amounts due from staff are recoverable in the form of variable instalments, the last of which is due in 2031. Under an agreement reached with IPOST on 23 December 2009, contributions
relating to the agreements of 2006 and 2008 are to be recovered in straight-line six-monthly instalments, the last of which
is due in 2014.
11.2 - Receivables from fixed-term contract settlements
Non-current
assets
Current
assets
Total
due from staff under agreement of 2006(1) 20,281
14,017
23,629
17,781
27,686
83,113
34,298
129,917
82,265
54,350
300,830
Item
Face
Value
Non-current
assets
Current
assets
Total
37,710
151,719
106,943
55,372
32,672
122,569
33,029
39,266
227,536
14,397
28,477
11,352
13,843
68,069
47,069
151,046
44,381
53,109
295,605
Face
Value
Receivables
due from staff under agreement of 2008(2)106,288
due from staff under agreement of 2010(3) 64,484
due from former IPOST(4)
Total
26,664
217,717
52,203
178,534
56,515
55,372
(1)
Discounted on the basis of the forward interest rate curve for government securities in issue at 30 June 2006.
(2)
(3)
(4)
Discounted on the basis of the forward interest rate curve for government securities in issue at 31 December 2009.
Other receivables due from subsidiaries are shown below:
11.3 - Other amounts due from subsidiaries
Name
18,929
34
84
84
150
19,281
12
19
8
39
78
Direct subsidiaries
Poste Vita SpA
Postecom SpA
Postel SpA
PosteMobile SpA
PosteShop SpA
Total
These items primarily regard amounts due to Poste Italiane SpA as the consolidating entity in the tax consolidation arrangement.
Changes in Provisions for doubtful debts are as follows:
11.4 - Changes in Provisions for doubtful debts due from others attributable to Poste Italiane
Balance at
1 Jan 2010
11,451
Public Sector entities for sundry services
2,189
Amounts due under fixed-term contract settlements
Other receivables
10,800
24,440
Net
provisions
(984)
954
(30)
Uses
-
Balance at
31 Dec 2010
10,467
2,189
11,754
24,410
Net
provisions
(406)
5,668
5,262
Uses
-
Balance at
31 Dec 2011
10,061
2,189
17,422
29,672
Provisions for amounts due from Public Sector entities regard accrued payments for staff seconded to ministries and Public
Sector entities.
Other receivables and assets attributable to BancoPosta RFC
Prepaid taxes primarily include advances paid to the tax authorities, including 216,796 thousand euros in stamp duty to be
paid in virtual form in 2012, and 23,365 thousand euros as withholding tax on interest paid to current account holders for 2011.
Amounts that cannot be drawn on due to court rulings include 86,100 thousand euros in amounts seized and not assigned
to creditors in the process of recovery and 13,079 thousand euros in amounts stolen from the Company in December 2007
as a result of an attempted fraud and currently deposited with an overseas bank. The latter sum may only be recovered
once completion of the necessary legal formalities enables it to be released and returned to Poste Italiane SpA. The estimated time it will take to collect this receivable and the political risks linked to the country in which the depositary bank is
based were taken into account when updating provisions for doubtful debts at 31 December 2011.
Other receivables due from subsidiaries regards amounts due from Poste Tutela SpA.
Changes in Provisions for doubtful debts are as follows:
11.5 - Changes in Provisions for doubtful debts due from others attributable to BancoPosta
Public Sector entities for sundry services
Other receivables
Balance at
1 Jan 2010
10,941
1,362
12,303
Net
provisions
64
11,760
11,824
Uses
-
Balance at
31 Dec 2010
11,005
13,122
24,127
Net
provisions
110
721
831
Uses
-
Balance at
31 Dec 2011
11,115
13,843
24,958
12 - CASH AND DEPOSITS ATTRIBUTABLE TO BANCOPOSTA
12.1 - Cash and deposits attributable to BancoPosta
Item
Cheques
Bank deposits
Total
2,263,847
320
295,827
2,559,994
2,314,930
50
36,265
2,351,245
340
Cash at post offices, relating exclusively to BancoPosta RFC, consists of cash deposits on postal current accounts, postal
savings products (Interest-bearing Postal Certificates and Post Office Savings Books) or advances obtained from the
Treasury to fund post office operations. This cash may only be used in settlement of these obligations. Cash and valuables
in hand are held at post offices (799,178 thousand euros) and companies that provide cash transportation services whilst
awaiting transfer to the Italian Treasury (1,464,669 thousand euros). Bank deposits relate to BancoPosta RFC‘s operations
and include amounts deposited in an account with the Bank of Italy to be used in interbank settlements, totalling 205,217
thousand euros.
13 - CASH AND CASH EQUIVALENTS
13.1 - Cash and cash equivalents
Item
Bank deposits and amounts held at the Italian Treasury
367,329
2,523
54,885
2,442
Deposits with the MEF
Bank deposits
369,852
829,399
7,882
1,670
57,327
840,624
9,241
788
Cash and cash equivalents attributable to BancoPosta RFC
838,951
850,653
1,208,803
907,980
Total cash and cash equivalents
BANK DEPOSITS AND AMOUNTS HELD AT THE ITALIAN TREASURY
Deposits with the Italian Treasury include a non-interest bearing escrow account of 323,987 thousand euros deposited by
the MEF in December 2011 as an advance on Universal Service subsidies due. In addition, bank deposits include 17,765
thousand euros that cannot be drawn on due to court rulings regarding various disputes.
DEPOSITS WITH THE MEF
Cash deposited in postal current accounts is subject to the same requirements as apply to the investment of deposits by
BancoPosta’s private current account holders. In the agreement with the MEF regarding treasury services carried out by
BancoPosta signed on 8 May 2009, extended with an addendum dated 29 September 2011 and valid until 30 June 2012, a
portion of private current account deposits may be deposited in a specific account held at the MEF (the so-called Buffer
Account). This is done with the aim of ensuring a certain flexibility with regard to investments in view of daily movements in
amounts payable to current account holders. These deposits are remunerated at a floating rate calculated, until 30 November
2011, on the basis of the average yield on Short-term Italian Treasury Certificates (BOT) issued by the MEF in the relevant
six-month period and, from 1 December 2011, on the basis of the ECB’s Main Refinancing Operations (MRO) rate.
14 - NON-CURRENT ASSETS HELD FOR SALE
This item, regarding Poste Italiane functions outside the ring-fence, breaks down as follows:
14.1 - Non-current assets held for sale
2011
2010
6,060
(2,631)
(465)
2,687
(937)
(465)
Carrying amount
2,964
1,285
Acquisitions
Reclassifications of non-current assets(1)
Disposals(2)
Reclassification from provisions for other liabilities and charges
3,791
(187)
-
5,415
(3,736)
-
Total changes
3,604
1,679
12,610
(5,577)
(465)
6,060
(2,631)
(465)
6,568
2,964
6,843
(3,052)
-
9,306
(3,891)
-
3,791
5,415
Disposals
Cost
(293)
106
-
(5,933)
2,197
-
Total
(187)
(3,736)
Cost
Impairments
Cost
Impairments
Carrying amount
Cost
Total
(2)
These assets refer to industrial buildings for which the related sales process has been completed, and which are expected
to fetch a total price of over 41 million euros. Recognition of this item has not resulted in charges recognised in the income
statement.
15 - SHARE CAPITAL
The Share capital consists of 1,306,110,000 ordinary shares with a par value of 1 euro each owned by the sole shareholder, the Ministry of the Economy and Finance.
Al 31 December 2011 all the shares in issue are fully subscribed and paid up. No preference shares have been issued and
the Company does not hold treasury shares.
16 - SHAREHOLDER TRANSACTIONS
The General Meeting of shareholders held on 14 April 2011 approved payment of dividends totalling 350,000 thousand
euros (based on a dividend per share of 0.27 euros).
342
17 - RESERVES
Reserves break down as follows:
17.1 - Reserves
Legal
reserve
Reserve for
BancoPosta
RFC
Fair value
reserve
Cash flow
hedge
reserve
Total
Gains/(Losses) recognised directly in Equity
148,351
38,640
-
630,214
(860,640)
274,394
(348,048)
110,277
(824,017)
-
(118,978)
86,061
(27,445)
33,376
(10,632)
81,360
-
659,587
(774,579)
246,949
(314,672)
99,645
(742,657)
38,640
186,991
-
(193,803)
(37,618)
(44,430)
38,948
-
1,000,000
(2,675,515)
869,131
(68,553)
18,218
(1,856,719)
-
(148,110)
47,918
(71,034)
22,872
(148,354)
-
(2,823,625)
917,049
(139,587)
41,090
(2,005,073)
38,948
1,000,000
225,939
1,000,000
(2,050,522)
(185,972)
(1,010,555)
-
1,000,000
(1,991,055)
(185,972)
(1,177,027)
Gains/(Losses) recognised directly in Equity
RESERVE FOR BANCOPOSTA RFC
In order to identify ring-fenced capital for the purposes of applying the Bank of Italy’s prudential requirements and protecting creditors, on 26 February 2011 art. 2, paragraphs 17-octies et seq. of Law 10, which converted Law Decree 225 of 29
December 2010 into law, provided that Poste Italiane SpA’s shareholder should form ring-fenced capital to be used exclusively in relation to BancoPosta’s operations, as governed by Presidential Decree 144/2001. As a result of the ensuing resolution, which was approved by the General Meeting held on 14 April 2011 and filed with the Companies’ Register on 2
May 2011, the Parent Company has formed ring-fenced capital (“BancoPosta ring-fenced capital” or “BancoPosta RFC”),
and established the assets and contractual rights to be included in the ring-fence and By-laws governing its organisation,
management and control (note 2.2). BancoPosta RFC was provided with an initial reserve of 1 billion euros through the attribution of Poste Italiane SpA’s retained earnings. The Parent Company has also drawn up a new model for accounting
unbundling, extending the application of unbundling to all the financial statement components generated by revenue and
cost components attributable to BancoPosta’s operations. This will result in preparation of a Separate Report, to be attached
to the financial statements from the reporting period under review. On 11 July 2011 the Court of Rome certified the absence
effective from 2 May 2011.
FAIR VALUE RESERVE
The Fair value reserve regards changes in the fair value of Available-for-sale financial assets. During 2011 fair value losses
totalling 2,675,515 thousand euros included:
• 2,601,625 thousand euros regarding the net fair value loss on available-for-sale financial assets attributable to the Group’s
Financial Services, consisting of 2,610,907 thousand euros in losses on securities and 9,282 thousand euros in gains on
equity instruments;
Postal and Business Services described in note 9.5.
CASH FLOW HEDGE RESERVE
The Cash flow hedge reserve, which primarily reflects changes in the fair value of the effective portion of cash flow hedges
outstanding. In 2011 there was a net loss of 148,110 thousand euros on the value of BancoPosta’s derivative financial instruments described in note 8.9.
18 - PROVISIONS FOR LIABILITIES AND CHARGES
Changes in provisions are as follows:
Balance at 31
Item
Dec 2009
127,731
632,832
Provisions for restructuring charges
115,000
Provisions for taxation/social security contributions 10,888
Other provisions
126,170
1,012,621
11,924
1,024,545
28,543
7,315
203,860
Provisions for invalidated postal savings certificates 19,464
259,182
Total provisions for liabilities and charges
1,283,727
377,160
- current portion
906,567
Provisions for tax consolidation liabilities
Provisions
57,075
72,842
162,797
58,706
22,903
374,323
2,929(2)
377,252
18,411
1,203
2,548
49,072
71,234
448,486
Finance
costs
344
-
Released to
income
statement
(18,970)
(4)
Uses
(7,870)
(241,214)
(115,000)
(3,101)
(43,774)
Balance at 31
Dec 2010
158,310
464,460
162,797
58,706
7,787
105,295
344
344
173
518
691
1,035
(18,974)
(18,974)
(905)
(25,140)
(26,045)
(45,019)
(410,959)
(410,959)
(869)
(3,917)
(10,296)
(403)
(15,485)
(426,444)
957,355
14,853
972,208
45,353
4,601
2,548
217,496
19,579
289,577
1,261,785
1,283,727
(1)
(2)
These provisions are offset by a reduction in current tax liabilities.
395,303
866,482
1,261,785
344
Balance at 31
Item
Dec 2010
158,310
464,460
162,797
58,706
7,787
Provisions for taxation/social security contributions
105,295
Other provisions
957,355
14,853
972,208
45,353
4,601
2,548
217,496
Provisions for invalidated postal savings certificates 19,579
289,577
Total provisions for liabilities and charges
1,261,785
395,303
- current portion
866,482
Provisions for tax consolidation liabilities
Finance
costs
531
-
Released to
income
statement
(19,618)
(19,850)
(104,735)
(58,706)
(11,846)
Uses
(8,854)
(119,654)
(58,062)
(543)
Balance at 31
Dec 2011
271,190
457,162
351,211
7,787
95,247
626,579
2,655(2)
629,234
7,000
748
5,297
24,733
-
531
531
246
(1,316)
(214,755)
(214,755)
(183)
(1,483)
(5,571)
(5,409)
(187,113)
(2,712)
(189,825)
(2,057)
(2,158)
(1,065)
(12,277)
(505)
1,182,597
14,796
1,197,393
50,359
3,191
5,297
224,381
12,349
37,778
667,012
(1,070)
(539)
(12,646)
(227,401)
(18,062)
(207,887)
295,577
1,492,970
Provisions
140,821
132,206
351,211
2,341
1,261,785
(1)
(2)
504,940
988,030
1,492,970
These provisions are offset by a reduction in current tax liabilities.
Provisions for disputes with third parties regard the present value of expected liabilities deriving from different types of
legal and out-of-court dispute with suppliers and third parties, the related legal expenses, and penalties and indemnities
payable to customers. Provisions for the year of 147,821 thousand euros reflect the estimated value of new liabilities measured on the basis of expected outcomes. A reduction of 19,801 thousand euros relates to the non-occurrence of liabilities
identified in the past, whilst a reduction of 10,911 thousand euros regards the value of disputes settled.
Provisions for disputes with staff regard liabilities that may arise following labour litigation and disputes of various types,
but largely attributable to the use of fixed-term employment contracts. Net provisions of 113,104 thousand euros regard an
updated estimate of the Company’s liabilities and the related legal expenses, taking account of both the overall value of
negative outcomes (in terms of litigation and union agreements), and the application of Law 183 of 4 November 2010 (the
so-called “Collegato lavoro”), which has introduced a cap on current and future compensation payable to an employee in
the event of “court-imposed conversion” of a fixed-term contract. Uses, amounting to 121,812 thousand euros, include
amounts used to cover the cost of settling disputes, including 17,961 thousand euros in the form of asset seizures by creditors. Provisions are based on the present value of identified liabilities, which are deemed to be short term.
Provisions for staff costs of 356,508 thousand euros cover the best estimate of staff-related liabilities accruing during the
period, the exact amount of which will be known during 2012. Given that the economic and regulatory context does not
permit an accurate assessment of the related final amounts, provisions made for certain liabilities in 2011 have been classified as Provisions for staff costs, unlike in previous years when the liabilities were accounted for in Payables. The provisions decreased as a result of the non-occurrence of liabilities identified in the past (106,218 thousand euros) and the value
of disputes settled (59,127 thousand euros).
Provisions to the solidarity fund established in 2010 under an agreement between Poste Italiane SpA and the labour unions
were released in full to the income statement in September 2011 as the deadline for qualifying for extraordinary income
support provided for by the Fondo di Solidarietà (the Solidarity Fund) established by INPS as a result of Ministerial Decree
178 of 1 July 2005 has expired.
Provisions for taxation/social security contributions have been made to cover potential future tax liabilities.
The other provisions cover probable liabilities of various types, including: estimated liabilities deriving from the risk that specific legal actions to be undertaken in order to reverse seizures of the Company’s assets may be unable to recover the related amounts; claims for rent arrears on properties used free of charge by the Company, and claims for payment of accrued
interest expense due to certain suppliers. Provisions for the year of 2,341 thousand euros primarily refer to the last two
types of liability. The provisions decreased during 2011, primarily due to the reclassification of liabilities for seizures to
Provisions for disputes with staff.
Provisions for tax consolidation losses regard represent the Company’s potential debt to Group companies included in the
tax consolidation, equal to 50% of the economic benefit deriving from tax losses for the year transferred by such companies. In accordance with the Group’s rules for consolidation, this amount is attributed to these companies, from the tax year
for which they contributed tax losses to be included in the consolidation arrangement, provided that there is reasonable
certainty that they will produce sufficient future taxable income to enable them to recover the related deferred tax assets.
Should such condition not occur, the provisions will be taken to Poste Italiane SpA’s income statement as a tax consolidation gain. Net provisions of 2,655 thousand euros made during 2011 almost entirely reflect the tax losses transferred to the
Group by the subsidiaries, SDA Express Courier SpA and Mistral Air Srl. Provisions of 2,712 thousand euros were used during the period.
Provisions for non-recurring charges regard operational risks connected with BancoPosta’s ring-fenced operations. The liability regards, among other things, liabilities arising from the reconstruction of operating ledger entries at the time of the
Company’s establishment, liabilities deriving from the provision of delegated services for social security agencies, fraud,
compensation and adjustments to income for previous years. Provisions for the year amount to 24,733 thousand euros and
primarily regard the latter form of liability. Uses of 12,277 thousand euros refer to liabilities identified or settled during the
year. The release of 5,571 thousand euros to the income statement reflects the non-occurrence of liabilities identified in
the past. Provisions are based on the present value of the identified liabilities.
With regard to BancoPosta’s operations, provisions for expired and statute barred postal savings certificates have been
made to cover the cost of redeeming certificates relating to specific issues, the value of which was recognised in revenue
in the income statement in the years in which the certificates became invalid. The provisions were made in response to the
Company’s decision to redeem such certificates even if expired and statute barred. At 31 December 2011 the provisions
represent the present value of total liabilities, based on a face value of 21,965 thousand euros, which are expected to be
progressively paid off by 2043. Certificates with a total face value of 505 thousand euros were redeemed during the period, whilst the probable timing of redemptions and the discount rate applied to the liabilities were updated on the basis of
historical trends over the last five years.
19 - STAFF TERMINATION BENEFITS
Following the reform of supplementary pension provision, from 1 January 2007 companies must pay vested staff termination benefits into a supplementary pension fund or into a Treasury Fund set up by INPS (should the employee have exercised the specific option provided for by the new legislation). These benefits qualify as a defined contribution plan and thus
represent an expense to be recognised at face value in staff costs. Staff termination benefits vesting up to 31 December
2006, however, continue to represent accumulated liabilities qualifying as a defined benefit plan, for which actuarial calculation is necessary.
The following changes in staff termination benefits took place in 2011 and 2010:
346
19.1 - Changes in provisions for staff termination benefits
2011
2010
1,297,781
interest component
effect of actuarial gains/(losses)
Provisions for the year
Uses for the year
Reductions due to fixed-term contracts settlement of 2010
62,597
(62,236)
1,419,161
60,215
(68,866)
361
(133,538)
(2,002)
(8,651)
(110,223)
(2,506)
1,162,602
15,408
1,297,781
17,018
The interest component is recognised in Finance costs.
The current service cost, which is no longer included in the staff termination benefits managed by the Company, is recognised in Staff costs.
During 2011 net uses of provisions for staff termination benefits amounted to 133,538 thousand euros, represented by benefits paid, totalling 129,094 thousand euros, substitute tax of 6,114 thousand euros and transfers to a number of Group
companies, amounting to 1,730 thousand euros, net of additions of 3,400 thousand euros regarding the use of Provisions
for disputes with staff formerly on fixed-term contracts who have been re-employed by the Company.
The main actuarial assumptions applied in calculating staff termination benefits are as follows:
Discount rate
Average staff turnover20 (summary data)
2011
2010
4.60%
0.93%
4.55%
1.08%
A number of actuarial assumptions were revisited during preparation of the financial statements for the year ended 31
December 2011 to take account of the macroeconomic situation and the effect of new legislation regarding the conditions that
need to be met to qualify for retirement. A new discount rate was also adopted and not linked to movements in the spreads
applicable to Italian government securities, which during 2011 could have improperly reduced the present value of the liability.
20 - FINANCIAL LIABILITIES ATTRIBUTABLE TO BANCOPOSTA
20.1 - Financial liabilities attributable to BancoPosta
Item
Non-current
liabilities
Current
liabilities
Total
Non-current
liabilities
594,492
210,650
383,842
594,492
37,252,267
1,988,550
1,988,550
29,390
16,756
5,701
6,933
2,387,155
41,657,362
37,252,267
1,988,550
1,988,550
623,882
227,406
389,543
6,933
2,387,155
42,251,854
83,080
45,726
37,354
83,080
Payables deriving from postal current accounts
Borrowings
Bank borrowings
Cash flow hedges
Fair value hedges
Total
20. Frequency of early termination of employment due to resignations and dismissals.
Current
liabilities
Total
37,239,803 37,239,803
389,212
389,212
389,212
389,212
90,502
7,422
47,222
1,496
43,280
5,926
1,983,909
1,983,909
39,620,346 39,703,426
PAYABLES DERIVING FROM POSTAL CURRENT ACCOUNTS
These payables include net amounts accrued at 31 December 2011 and settled with customers in January 2012. The balance includes amounts due to Poste Italiane Group compagnie, totalling 108,248 thousand euros (256,140 thousand euros
at 31 December 2010), with 20,415 thousand euros deposited in postal current accounts by Poste Vita SpA (170,579 thousand euros at 31 December 2010).
BORROWINGS
Bank Borrowings
At 31 December 2011 bank borrowings amount to 1,988,550 thousand euros and regard 17 repurchase agreements with a
notional amount of 2,152 million euros, entered into with major financial institutions to optimise investments with respect
to short-term movements in the current account deposits of private customers. They include an amount due to the subsidiary, Banca del Mezzogiorno – MedioCredito Centrale SpA, totalling 55,389 thousand euros (a notional amount of 54 million euros).
BancoPosta RFC has obtained unused committed and uncommitted lines of credit totalling 201,000 thousand euros. The
lines of credit are unsecured.
Changes in this item during 2011 is described in note 8.9.
OTHER FINANCIAL LIABILITIES
20.2 - Other financial liabilities
Item
prepaid cards
domestic and international money transfers
cashed cheques
endorsed cheques
amounts to be credited to customers
tax collection and road tax
other amounts payable to third parties
guarantee deposits
payables for items in process
Total
Non-current
liabilities
Current
liabilities
-
724,539
791,642
300,574
211,694
133,846
102,388
59,354
9,520
53,598
2,387,155
Total
Non-current
liabilities
Current
liabilities
Total
724,539
791,642
300,574
211,694
133,846
102,388
59,354
9,520
53,598
2,387,155
-
644,217
530,463
178,982
179,688
172,557
138,098
38,194
39,720
61,990
1,983,909
644,217
530,463
178,982
179,688
172,557
138,098
38,194
39,720
61,990
1,983,909
Amounts due on prepaid cards represent amounts due to Postepay (717,878 thousand euros) and Pensione card (6,661
thousand euros) customers who have topped up their prepaid cards. Compared with 31 December 2010, the increase in
the balance reflects a rise in the number of cards in circulation (8.2 million, compared with 6.8 million).
Amounts due on domestic and international money transfers represent the exposure to third parties for:
• domestic postal orders totalling 378,269 thousand euros (259,462 thousand euros at 31 December 2010);
• domestic and International transfers totalling 410,955 thousand euros (270,214 thousand euros at 31 December 2010);
• Moneygram transfers totalling 2,418 thousand euros (787 thousand euros at 31 December 2010).
348
Cashed cheques represent the exposure to customers for cheques paid into Post Office Savings Books but not yet credited. Endorsed checks represent the exposure to customers for endorsed checks in circulation.
Amounts to be credited to customers primarily regard:
• amounts to be paid to the beneficiaries of debits pre-authorised by customers, totalling 46,207 thousand euros;
• amounts in the process of payment in relation to maturing insurance policies issued by the subsidiary, Poste Vita SpA,
• amounts payable to the subsidiaries, Poste Vita SpA and Poste Assicura SpA, amounting to 18,718 thousand euros and
102 thousand euros, respectively, in the form of premiums collected on their behalf;
• amounts in the process of payment to overseas holders of Postal Savings Certificates and Post Office Savings Books,
• amounts to be paid for BancoPosta promotions, totalling 9,558 thousand euros;
• payments of pre-printed bills in the process of being credited to beneficiaries’ accounts, totalling 9,072 thousand euros.
Tax collection and road tax payables regard amounts due to collection agents, the tax authorities and regional authorities
for payments made by customers.
Other amounts payable to third parties primarily regard endorsed cheques to be issued and amounts payable to banks for
the use of prepaid cards issued by the Parent Company.
Amounts payable for guarantee deposits include amounts received from counterparties in reverse repo transactions for
fixed income securities (collateral provided by specific Global Master Repurchase Agreements).
Payables deriving from items in process include amounts available to customers in relation to payments made on behalf of
public entities and other forms linked to BancoPosta’s operations.
21 - FINANCIAL LIABILITIES
Financial liabilities outside the ring-fence are as follows:
21.1 - Financial liabilities
Item
Borrowings
Bonds
Bank borrowings
Other borrowings
Financial liabilities due to subsidiaries
Total
Non-current
liabilities
Current
liabilities
676,417
226,417
450,000
8,525
712
685,654
1,580,134
769,841
306,305
483,686
20,302
1,006
465,781
1,558
2,048,479
Total
Non-current
liabilities
Current
liabilities
Total
2,256,551
769,841
532,722
933,686
20,302
9,531
465,781
2,270
2,734,133
1,371,908
750,785
371,123
250,000
912
1,372,820
887,868
19,363
141,544
687,957
39,004
231,518
2,921
1,122,307
2,259,776
770,148
512,667
937,957
39,004
231,518
3,833
2,495,127
BORROWINGS
Borrowings are unsecured and are not subject to financial covenants, requiring the Company to comply with certain financial ratios, or maintain a certain level of rating. The bonds in issue and bank borrowings are subject to standard negative
pledge clauses21.
21. A commitment given to creditors by which a borrower undertakes not to give senior security to other lenders ranking pari passu with the pre-existing creditors, unless the same degree of protection is offered to them also.
Bonds
Bonds regard fixed rate bonds, paying coupon interest of 5.25% and with a par value of 750 million euros. The bonds, which
were issued in two tranches in 2002, are listed on the Luxembourg Stock Exchange and were placed in the form of a public
offering to institutional investors. These 10-year bonds are to be redeemed in a lump sum in July 2012. The fair value (“mid
price”) of the bonds at 31 December 2010 is 747,630 thousand euros (780,953 thousand euros at 31 December 2010).
This item refers to fixed rate loans issued to the Parent Company by Cassa Depositi e Prestiti. The laws authorising the
expenditure financed by the loans also establish the methods of repayment, as shown below.
21.2 - Details of loans
Loans to be repaid
in full by Poste
Legislation
Italiane
6,757
Law 15/74
137
Law 34/74
)
Law 227/75 (serv. acc.) (1)
Law 39/82 (subsequent changes to postal service) (1) Law 887/84 (1)
Law 41/86 (1)
6,894
Total
(1)
to be repaid by
parent
17,706
283,028
1,661
302,395
Loans with principal and
interest to be repaid by
parent
203,378
203,378
Interest
2011
507
10
1,480
10,472
7,525
61
20,055
Total
loans
7,264
147
19,186
293,500
210,903
1,722
532,722
Loans to be repaid by the Ministry of the Economy and Finance (principal: 505,773 thousand euros).
The outstanding amount payable of 532,722 thousand euros includes the instalment maturing at 31 December 2011,
totalling 161,600 thousand euros inclusive of interest, and paid in early 2012.
The fair value of the loans, inclusive of accrued interest, is 533,136 thousand euros (524,854 thousand euros at 31
December 2010).
The outstanding principal assigned by law to the Ministry of the Economy and Finance is offset by a receivable, accounted for in Financial assets, due from the parent. Collection of the amount receivable is linked to the repayment schedules
for the loans (note 9.3).
Bank Borrowings
21.3 - Bank borrowings
Item
Floating rate loan from DEPFA Bank
maturing 30 Sept 2013
EIB fixed rate loan maturing 11 Apr 2018
Repurchase agreements
Short-term borrowings
Accrued interest expense
Total
TV: Finanziamento a tasso variabile
Non-current
liabilities
250,000
200,000
450,000
Current
liabilities
Total
Non-current
liabilities
Current
liabilities
Total
429,697
50,000
3,989
483,686
250,000
200,000
429,697
50,000
3,989
933,686
250,000
250,000
386,482
300,000
1,475
687,957
250,000
386,482
300,000
1,475
937,957
350
The value of the above financial liabilities approximates to fair value.
Outstanding repurchase agreements regard fixed income instruments with a notional value of 500,000 thousand euros
(note 9.4) executed during the year under review to optimise returns and meet temporary liquidity requirements.
Drawdowns on the Company’s total committed and uncommitted lines of credit, totalling 1,035,355 thousand euros,
amount to 50,000 thousand euros. The lines of credit are unsecured.
Other borrowings
This item regards fixed rate loans issued by CPG Società di Cartolarizzazione arl. Two loans totalling 309,874 thousand
euros, denominated “Logistics 2002” and “Layout 2002”, were sold without recourse by Cassa Depositi e Prestiti to CPG
Società di Cartolarizzazione arl in 2003. The two ten-year loans were used to finance certain projects. The outstanding debt
of 20,302 thousand euros at 31 December 2011, inclusive of the related interest, was repaid early in 2012.
Changes in this item during 2011 is described in note 9.6.
FINANCIAL LIABILITIES DUE TO SUBSIDIARIES
These liabilities regard intercompany current accounts paying interest at market rates. The following table shows a breakdown:
21.4 - Financial liabilities due to subsidiaries
Name
Direct subsidiaries
CLP ScpA
EGI SpA
Poste Link Scrl
Poste Tributi ScpA
Poste Tutela SpA
Poste Vita SpA
Postecom SpA
PosteMobile SpA
PosteShop SpA
Total
InterLoans
company
Total
accounts
-
10,201
61
211,016
551
5,682
202,820
33,988
1,462
465,781
10,201
61
211,016
551
5,682
202,820
33,988
1,462
465,781
InterLoans
company
Total
accounts
5,003
5,003
9,604
61
187,517
2
545
11,871
361
10,225
6,276
53
226,515
9,604
61
187,517
2
545
11,871
361
10,225
11,279
53
231.518
ANALYSIS OF NET DEBT/(FUNDS)
The Company’s net debt/(funds) at 31 December 2011 and 31 December 2010 is as follows:
21.5 - Net debt/(funds)
Item
of which
of which
Balance at 31 related party
Balance at 31 related party
Note December 2011 transactions December 2010 transactions
Postal current account deposits
Bank borrowings
[20.1]
Bonds
Bank borrowings
Other borrowings
[21.1]
42,251,854
37,252,267
1,988,550
623,882
2,387,155
2,734,133
769,841
532,722
20,302
9,531
468,051
532,722
465,781
(36,669,173)
(8,754,179)
(14,363,893)
(13,464,687)
(86,414)
(1,808,591)
(1,276,988)
(531,603)
-
933,686
Receivables
[8.1]
Financial assets
Net financial liabilities/(assets)
Net debt/(funds)
[9.1]
[12.1]
[13.1]
108,248
55,389
18,820
6,508,223
(2,559,994)
(1,208,803)
2,739,426
39,703,426
37,239,803
389,212
90,502
1,983,909
2,495,127
770,148
512,667
256,140
11,526
39,004
235,351
512,667
231,518
(7,854,036)
-
(36,848,703)
(7,430,751)
(14,768,213)
(14,561,534)
(88,205)
(7,002,689)
-
(1,260,421)
-
(2,087,157)
(1,492,005)
(572,219)
(22,933)
(1,480,268)
(100,825)
-
(829,399)
937,957
3,262,693
(2,351,245)
(907,980)
3,468
(840,624)
Cash and cash equivalents includes the sum of 323,987 thousand euros deposited by the Ministry of the Economy and
Finance, as of December 2011, in a non-interest bearing escrow account as an advance on Universal Service subsidies and
a total of 17,765 thousand euros that cannot be drawn on due to court rulings regarding various disputes.
The change from net funds to net debt in 2011 reflects the impact of the downgrade of Italy’s credit rating on the price of
BancoPosta RFC’s holdings of available-for-sale financial assets.
352
22 - TRADE PAYABLES
22.1 - Trade payables
Item
934,070
371,176
546,695
15,806
1,028,834
310,919
186,922
53
1,867,747
60,650
1,526,728
89,367
Italian suppliers
Overseas suppliers
Overseas correspondents(1)
785,256
5,561
143,253
901,889
5,233
121,712
Total
934,070
11,701
1,028,834
33,500
Amounts due to suppliers
Amounts due to subsidiaries
Prepayments and advances from customers
Other trade payables
Total
AMOUNTS DUE TO SUPPLIERS
22.2 - Amounts due to suppliers
Item
(1)
The amount due to overseas correspondents regard fees payable to overseas postal operators and companies in return for postal and telegraphic services
received.
AMOUNTS DUE TO SUBSIDIARIES
22.3 - Amounts due to subsidiaries
Name
Direct subsidiaries
CLP ScpA
Consorzio per i Servizi di Telefon

annual report 2011

Transcription

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