Annual Report 2010

Transcription

Annual Report 2010

ANNUAL REPORT 2010
Poste Italiane SpA
(A Sole Shareholder Company)
Registered Ofﬁce: Viale Europa, 190 . 00144 Rome . Italy
Tel. 06.59581
ANNUAL
REPORT
2010
www.poste.it
Copertina_Bilancio_2010_INGL.indd 1
26/07/11 16:44
ANNUAL REPORT 2010
Poste Italiane SpA
Tel. 06.59581
ANNUAL
REPORT
2010
www.poste.it
26/07/11 16:44
ANNUAL
REPORT
2010
2
SUMMARY
OF CONTENTS
3
FINANCIAL AND OPERATIONAL HIGHLIGHTS
4
CORPORATE OFFICERS
6
DIRECTORS’ REPORT ON OPERATIONS
8
POSTE ITALIANE GROUP
Consolidated financial statements 2010
POSTE ITALIANE SPA
Separate financial statements 2010
98
228
ANNUAL REPORT 2010
4
FINANCIAL AND OPERATIONAL HIGHLIGHTS
Results of operations
Poste Italiane group
2008
2009
2010
(€m)
2010
Revenues from sales and services and earned premiums
9,572
Poste Italiane SpA
2009
2008
15,907
17,456
19,639
9,841
9,826
5,483
5,210
5,050
Postal Services
4,505
4,709
4,953
4,539
4,796
4,665
Financial Services
4,962
5,039
4,781
5,535
7,112
9,505
Insurance Services
n.a.
n.a.
n.a.
350
338
419
Other Services
105
93
92
1,470
1,599
1,870
Operating profit
1,452
1,399
1,239
883
904
1,018
Profit/(Loss) for the year
9.2%
9.2%
1.8%
1.8%
46.8%
39.8%
42.1%
of which:
729
737
721
9.5%
(*)
ROS
15.2%
14.2%
12.6%
2.0%
ROI(**)
2.8%
2.7%
2.4%
37.4%
38.2%
42.5%
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 2008 31 Dec 2009 31 Dec 2010
(€m)
31 Dec 2010
3,422
4,575
4,383
Equity
(684)
(1,338)
(986)
Net (funds)/debt
2,737
3,237
3,397
Net invested capital
712
513
3,613
4,077
75
(472)
9
3,688
3,605
3,098
Other information
2008
2009
2010
436
Poste Italiane SpA
31 Dec 2009 31 Dec 2008
3,089
Poste Italiane SpA
2009
2008
(€m)
2010
Investment during the period
386
471
654
380
454
636
6
17
18
146,014
148,550
152,311
of which:
712
507
434
0,3
6
2
155,732
152,074
149,703
(*)
capital expenditure
financial investments (equity investments)
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 2008
31 Dec 2009
31 Dec 2010
35,949
Operational data (€m)
Current accounts (average for the period)
33,723
34,741
Postal Savings Books
81,801
91,120
97,656
185,543
192,618
198,489
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
5,383
5,526
5,533
13,991
13,992
14,005
delivery within
2008
2009
2010
1 day
90.6%
90.7%
92.0%
5
POSTE ITALIANE GROUP
Total revenue - Operating segments
2008
30.8%
25.7%
40.7%
2.7%
(€m)
Postal Services
Financial Services
Insurance Services
Other Services
Total
2009
26.0%
24.7%
46.7%
2.6%
2008
5,506
4,595
7,268
484
17,853
2009
5,227
4,964
9,376
531
20,098
2010
23.2%
22.6%
51.3%
2.8%
2010
5,065
4,946
11,206
620
21,837
09 vs 08
(5.1%)
8.0%
29.0%
9.7%
12.6%
10 vs 09
(3.1%)
(0.4%)
19.5%
16.8%
8.7%
Revenues from sales and services and earned premiums - Operating segments
2008
34.5%
28.5%
34.8%
2.2%
(€m)
Postal Services
Financial Services
Insurance Services
Other Services
Total
2009
29.8%
27.5%
40.7%
1.9%
2008
5,483
4,539
5,535
350
15,907
2009
5,210
4,796
7,112
338
17,456
2010
25.7%
23.8%
48.4%
2.1%
2010
5,050
4,665
9,505
419
19,639
09 vs 08
(5.0%)
5.7%
28.5%
(3.4%)
9.7%
10 vs 09
(3.1%)
(2.7%)
33.6%
24.0%
12.5%
POSTE ITALIANE SPA
Market revenues
2008
44.4%
2.2%
52.4%
1.0%
(€m)
Mail and Philately
Express Delivery and Parcels
BancoPosta services
Other revenues
Total(*)
(*)
2009
42.1%
1.9%
55.0%
1.0%
2008
4,045
202
4,781
92
9,120
2009
3,852
175
5,039
93
9,159
2010
42.4%
1.8%
54.6%
1.2%
2010
3,855
161
4,962
105
9,083
09 vs 08
(4.8%)
(13.4%)
5.4%
1.1%
0.4%
10 vs 09
0.1%
(8.0%)
(1.5%)
12.9%
(0.8%)
Market revenues do not include publisher tariff subsidies and Universal Service Obligation (USO) subsidies, totalling 489 million euros (682 million euros in 2009).
Directors’ Report on Operations
6
CORPORATE
OFFICERS
Giovanni Ialongo
BOARD OF DIRECTORS(1)
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 29 May 2008, has a term
of office of three years, which will expire on approval of these financial statements. The Board of
Directors’ meeting of 9 June 2008 elected the Deputy Chairman and 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)
CHAIRWOMAN
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. Contract awarded pursuant to art. 2409-ter of the Italian Civil Code, as amended by Legislative
Decree 39/10. With the approval of these financial statements, the General Meeting of shareholders will award a nine-year contract to the firm of auditors selected at the end of the current tender
process, in accordance with the provisions of Legislative Decree 39/10.
ANNUAL REPORT 2010
8
DIRECTORS’
REPORT
ON OPERATIONS
2010
9
ANNUAL REPORT 2010
10
CONTENTS
1. CORPORATE GOVERNANCE
12
2. ORGANISATION
22
2.1 Organisational structure of Poste Italiane SpA
22
2.1.1 Retail Market
24
2.1.2 Large Accounts and Public Sector
26
2.1.3 Postal Services
26
2.1.4 Other business functions
28
2.1.5 Corporate functions
29
2.2 Structure of the Poste Italiane group
3. FINANCIAL REVIEW
29
30
3.1 Risk management for the Group and Poste Italiane SpA
30
3.2 Operating results
34
3.3 Financial position and cash flow
42
4. AREAS OF BUSINESS
4.1 Postal Services
48
49
4.1.1 Commercial offering
51
4.1.2 Operating results
55
4.2 Financial Services
59
61
63
4.3 Insurance Services
65
66
67
4.4 Other Services
68
68
71
11
5. DISTRIBUTION CHANNELS
73
5.1 Retail/SME
73
5.2 Business and Public Sector
74
5.3 The Contact Centre and the internet
74
6. HUMAN RESOURCES
76
6.1 Headcount
76
6.2 Training and corporate social responsibility
78
6.3 Human resources management
80
6.4 Industrial relations
81
6.5 Labour disputes
82
7. INVESTMENTS
83
7.1 Financial investments
83
7.2 Capital expenditure
84
7.2.1 IT and telecommunications networks
84
7.2.2 Modernisation and upgrade of properties
85
7.2.3 Postal logistics
85
8. ENVIRONMENT
87
9. EVENTS AFTER 31 DECEMBER 2010
88
10. OUTLOOK
89
11. OTHER INFORMATION
91
12. BOARD OF DIRECTORS’ PROPOSALS TO SHAREHOLDERS
92
APPENDIX - Key performance indicators for principal Poste Italiane group companies
93
GLOSSARY
96
ANNUAL REPORT 2010
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.
In compliance with the Decree issued by the Ministry of the Economy and Finance on 30 November 2010, published in Official
Gazette of 16 December 2010, on 21 December 2010 Cassa Depositi e Prestiti transferred its investment in Poste Italiane
SpA to the Ministry of the Economy and Finance. As a result, Poste Italiane SpA is a wholly owned subsidiary of the Ministry.
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 accounting controls 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 11 times during 2010.
The Chairman exercises the powers assigned by the Articles of Association and those assigned to him by the Board of
Directors’ meeting of 2 November 2009. 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 of shareholders to
grant the Chairman executive powers in respect of the following matters: communication and Government relations,
international relations and legal affairs.
The Deputy Chairman acts for the Chairman in the event of his temporary absence or impediment.
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 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.
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 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.
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 2010.
With the introduction of Legislative Decree 39 of 27 January 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.
With the approval of these financial statements, the General Meeting of shareholders will award a nine-year contract to
the firm of auditors selected at the end of the current tender process, in accordance with the provisions of Legislative
Decree 39/10.
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 operation of internal controls.
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 department 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 Board of Directors’ meeting of 27 April 2009 approved an updated role for the Internal Auditing
department. The scope of the Internal Auditing department’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
14
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 2010, as in 2009, with the objective of facilitating
the generation of synergies with respect to the approaches of various areas of operation for the adoption of organisational and
technological solutions in continual improvement of operating efficiency, and to bolster the system of governance of the
Company’s and the Group’s processes. In line with the annual plan, initiatives focused on the following: assessing the
adequacy of the functions involved in the control system relating to broad-based, organisation-wide processes, with the aim
of improving key business processes with respect to both operations and control; the logistics, financial and back-office
accounting processes adopted around the country; the Group’s procurement processes, starting with the areas governed by
the Group’s Interrelations Map, approved by the Board of Directors, and any existing intercompany contracts. In addition, a
number of the Company’s projects, including software development programmes of key importance for the business and with
regard to compliance with specific regulations, were subject to independent audits.
Another of the Internal Auditing department’s objectives was the full evaluation of second-level internal controls carried out
by both management as well as specific specialist corporate functions, in order to integrate findings and provide an overall
assessment of internal control systems.
With reference to the areas covered by Law 262, in addition to assessing the design of administrative accounting procedures,
during 2010 Internal Auditing carried out a survey of the application of the controls involved in 21 of the 64 procedures so far
issued. The survey took the form of self-appraisals by the related management.
The strategic guidelines in the 2011 Plan are substantially in line with the Multi-year Audit Plan for the period 2009/2012,
reinforcing the role of Internal Auditing in carrying out third-level controls and overseeing the processes subject to key
regulatory restrictions (Legislative Decree 231/01, Law 262/05). Particular attention is given to assessing the status of
implementation of the Action Plans drawn up following previous audits and, therefore, the effective solution of the problems
already identified.
With reference to the areas covered by Legislative Decree 231/01, during 2010 Poste Italiane’s Organisational Model was
amended and added to. The changes regarded, on the one hand, the new approach to governance, dubbed “231”, adopted
by the Group, with the aim of strengthening the Parent Company’s role in establishing guidelines for its subsidiaries and raising
their awareness of the related requirements2, and, on the other, alterations to the Model in response to the addition of a
significant number of so-called “reati presupposto” (“relevant offences”)3. In particular, in addition to establishing new criteria
regarding the composition of subsidiaries’ Supervisory Boards and the selection of board members, the existing Organisational
Model has been supplemented with a list of the business processes potentially at risk of the further types of “231” offence
introduced into the specific regulatory framework, and with details of the relevant organisational and management solutions,
at once ensuring that the Model is in line with developments both within the Group and in the external environment
(jurisprudence, acknowledged business practice, new interpretations).
2. Update approved by Poste Italiane SpA’s Board of Directors on 22 February 2010.
3. Update approved by Poste Italiane SpA’s Board of Directors on 26 July 2010.
Significant progress was made during the year with regard to strengthening and extending oversight of the various areas
exposed to the risks represented by the offences identified by Legislative Decree 231/01. A number of the related projects,
which are often wide-ranging, were either completed or were close to completion, including Anti-Money Laundering, the
MiFID project and new anti-terrorism measures, etc.
In addition, in order to improve the quality of the periodic reports provided to the Supervisory Board on the relevant processes,
great attention was given to a review of information flows, and the gradual extension of the flows to the different areas of
exposure within the Group.
Finally, during the second half of the year, Group companies initiated the process of renewing their Supervisory Boards, in line
with the new guidelines introduced by the Parent Company and the related best practices. Similarly, the relevant functions
within Poste Italiane SpA began providing advice relating to “231” to its principal investee companies.
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.
Consistent with standard “COSO”4 methodology as adopted by Poste Italiane, the risk management and internal control
systems relating to financial reporting5 are an integral part of the system described above for all of those components that,
with reasonable certainty, assure the reliability, accuracy and timeliness of financial reporting. The qualities of these
systems (the “System”), however, are not treated as separate elements but rather as parts of a whole.
Further to the information provided above on the Company, the identity of Poste Italiane’s shareholders, the model of
corporate governance and the resultant implications, such as being audited by the Court of Auditors, it should be noted
that the Group operates in multiple sectors (postal services, banking, insurance and telecommunications), each of which
is subject to specific supervisory and regulatory regimes as implemented by the respective regulators (including the
CONSOB, the Bank of Italy and ISVAP). In addition, Poste Italiane’s operating structure is basically characterised by the
existence of multiple corporate functions and Group companies, engaged in product development, and a widespread,
capillary network throughout Italy. Public Sector entities form a significant customer segment.
As a result, Poste Italiane’s financial reporting reflects the size of its business, involving a high number of transactions that
are largely executed by employees spread across Italy, who input accounting data through information systems that
automatically validate input primarily with respect to certain major contracts and agreements, rates or investment yields on
government securities.
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 262/056 by the Board of Directors, and who is also the Chief Financial Officer,
4. The Committee of Sponsoring Organisations 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”.
5. Financial reporting means all accounting information and data appearing in the annual separate and consolidated financial statements, the half-year
condensed financial statements and all other information relating to the results of operations, financial position and cash flows released to the public, which
has been extracted from ledgers and accounting records.
6. 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.
16
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 which he oversees. The
position has also been created for those subsidiaries, which contribute a significant share of the Group’s consolidated net
assets, income and cash flows7.
The Manager responsible for financial reporting is supported by the System of Accounting Controls function, which forms
part of Accountancy 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 various 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, in line with the measurement models
proposed by the Bank of Italy, partly based 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 the liquidity, interest rate, credit, counterparty, market and exchange rate 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.
7. Poste Vita, SDA Express Courier and Postel.
Third-level controls
• Internal Auditing reports to the CEO with a functional reporting line and 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, 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 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 attributing and exercising
authorities and responsibilities, the segregation of duties, staff management and incentive policies, personnel competence
and, more in general, its 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;
18
• 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 COSO 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 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 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 Operational Guidelines for Financial Management.
Risk and Control Activities: 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 “Risk Management for the Group and Poste Italiane SpA” and note 3 of both the
separate and consolidated financial statements for financial risks in the strictest sense of the term (credit, interest rate,
liquidity and counterparty risk, etc.). It should be noted, in that connection, that Poste Italiane 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 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. In May 2010 Risk Analysis and
Security Intelligence began the ERM Task Force project, aimed at significantly improving the Enterprise Risk Management
process in terms of organisation, methodology, analysis and technology. The goal is to reinforce the processes, tools and
procedures needed to enable the full assessment and quantification of the levels of exposure to the various types of risk.
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 second half of the year, BancoPosta, in
parallel with other initiatives, began the process of drawing up a detailed definition of the unit’s role in setting policy and
providing guidelines, 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. The structure of BancoPosta’s organisation and controls is, in any event, evolving, 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 System of Accounting Controls function,
which forms part of Accountancy 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 reasonably assure the correctness and reliability of financial reporting;
20
• provide a method for monitoring by the process owner and independent verification.
The Manager responsible for financial reporting has commenced a rationalisation of these procedures in order to sharpen
their focus on controls over certain objectives (the so-called “assertions” of financial statements)8. The phases of the
rationalisation are:
• 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 assertions of financial statements 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 assertions of financial
statements. 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 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.
8. 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 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 at more important
Group companies have also started the same project as the Parent Company, for the revision of controls using the methods
advised by the Parent. At the end of each annual and half-year reporting period, each of these Group company managers
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. Poste Italiane 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. 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 methodology9 and covers infrastructure and
transversal processes that are typically the responsibility of the Chief Information Office10 (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 that are a function of 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 Accountancy and Control function and other corporate
functions through their own administration and control units.
9. 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 (IT Governance Institute) to provide an internationally generally accepted measures for the assessment and improvement a company’s IT governance and control.
10. IT systems relating to human resources are under the direct control of Human Resources and Organisation.
22
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
Postal Services
Philately
BancoPosta
Retail Market
Large Accounts and Public Sector
Logistic and Digital Services Marketing
Corporate
Purchasing
Public Affairs
Legal Affairs
Corporate Affairs
Accountancy and Control
External Relations
Internal Auditing
Finance
Real Estate
Internet
Strategic Planning
Human Resources and Organisation
Chief Information Office
Security & Safety
BancoPosta, Logistic and Digital Services Marketing and Philately are responsible for developing the related products and
services and managing a part of the operations involved in their supply.
2. Organisation 23
Logistic and Digital Services Marketing is also responsible for the provision of innovative and integrated mail services, and
for international mail and parcels operations.
Postal Services is responsible for planning and managing the logistics process in Italy (mail, express delivery and parcels).
The Retail Market and Large Accounts and Public Sector functions are the commercial channels responsible for developing
and managing frontline commercial activities for all customer segments. The Retail Market function is also responsible for
the activities of the contact centre (Customer Services).
Corporate functions are central departments that manage, control and provide business support services.
The Company’s organisational model was modified during 2010, with the aim of improving operating efficiency to boost
competitiveness and drive the process of developing innovative products and services.
The following principal developments took place:
• The restructuring of postal operations, reflecting the need to align the operating model with changes in the market environment, resulting from imminent deregulation of the postal market, and the need to take advantage of new revenuegenerating opportunities in the international market.
This primarily involved the separation of operating and delivery activities (transport, sorting and delivery), which remain
under the responsibility of Postal Services, from marketing and postal product and service development, at both national
and international level, which are now handled by the newly created Logistic and Digital Services Marketing function. The
establishment of separate departments focusing on specific areas of the business aims to:
a) drive the process of developing innovative and new products and services (digital communication, for example), and
exploit the potential for integrating traditional products and services with new areas of business by focusing and specialising expertise;
b) develop opportunities in international markets by adopting solutions enabling the Company to reduce the time to
market, partly to respond adequately to growing competition in the Italian market;
c) improve operating efficiency to boost competitiveness, by rationalising logistics assets, reducing operating costs and
overheads and improving the quality of services. This aspect is even more important in relation to the recent union
agreements, which are currently being implemented and which have redesigned the entire logistics chain (transport,
sorting and delivery), with the aim of driving efficiency and supporting business development.
In addition, with a view to achieving synergies in the design and development of an integrated offering that covers the
full range of logistics services, the Logistic and Digital Services Marketing function has also been handed responsibility for marketing Express Delivery and Parcels products.
• Elimination of the Express Delivery and Parcels function, whose responsibilities have been transferred to Postal Services
and, as noted above, Logistic and Digital Services Marketing in order to benefit from the end-to-end management of operating and logistics processes and create synergies between Poste Italiane’s mail and parcels offerings.
• The restructuring of all Postal Services operations (premises, logistics and delivery), embarked on following the labour union
agreement of 27 July 2010, aimed at making mail services more efficient and effective as full deregulation of the sector
approaches. The most important aspects of the agreement, which will be described in the section on Human Resources,
regard the provision of delivery services five days a week and a network structured around three synergic components.
• The integration of back-office and front-end (contact centre) support activities, by placing the Centralised Services Teams,
previously operating within Retail Market Area Offices, under the direct control of Customer Services for the Retail Market
function.
• Completion of the sales and customer service model for the Large Accounts and Public Sector function, involving the
adoption of an approach based on a customer/product matrix and the strengthening, at local level, of pre- and after-sales
operations and commercial planning.
Further initiatives involved:
• rationalisation of the central organisational structures of the External Relations, Internal Auditing, Legal Affairs, Security
& Safety and Real Estate functions;
24
• development of the Internet Project with the creation of an organisational unit to take ongoing charge of activities relating to the Company’s website, with the aim of coordinating the many initiatives and/or actions, and drawing up the development strategy for the channel and implementing internal communication initiatives;
• modification of the organisational model for BancoPosta’s marketing activities, via the redesign of the functions responsible for the various customer segments (Retail and Business, Corporate and Public Sector). This initiative primarily aims
to exploit potential in the small and medium enterprise (SME) market and take advantage of direct contact with sales
channels resulting from the review of the commercial model.
2.1.1 RETAIL MARKET
The Retail Market function manages the commercial front end for the Retail, SME and the Local Government segments.
The organisation of the commercial network and related operational support processes breaks down into three levels:
• Multi-regional Area Offices (referred to as Retail Market Area Offices);
• Branch Offices;
• Post offices (including PosteImpresa offices), which from a commercial point of view are classified as Central, Relations,
Transit, Standard, Service or Support offices.
31 Dec 2009
Number
Retail Market Area Offices
Branch Offices
Post offices
Workforce
31 Dec 2010
Number
Workforce
9
2,851
9
1,774
132
4,834
132
4,704
13,992
58,651
14,005
59,778
All workforce data is shown in full-time equivalent terms.
2010 saw the launch of a reorganisation designed to achieve increased integration of ancillary, support and other shared
processes, with the aim of boosting the efficiency and effectiveness of processes and implementing growth strategies
based on service quality and value for money.
This involved:
• The start-up of the gradual creation of a new distribution channel for the business segment, with the opening of
PosteImpresa offices (239 at 31 December 2010), representing a physical point of reference for the provision of integrated services to Small and Medium Enterprises, segmented on the basis of turnover or industry sector, and Local
Government customers.
• The start-up of a reorganisation of Customer Care activities, involving:
a) the design of a new organisational model for Customer Services, based on end-to-end management for each product
or service (Financial Services and Postal Services/Other Products), offering specialist assistance and reinforcing the services provided to internal customers (post offices and the sales force);
b) the progressive closure of four Contact Centres (Milan, Bari, Cagliari and Florence).
• In order to boost the effectiveness of the assistance provided to post offices with simpler organisational structures
(Service and Support), the commercial support model was revised by creating a specific role (the Post Office Channel
Specialist), with responsibility for providing support for post offices in handling complex transactions and in developing
customer loyalty marketing products and services.
• The gradual rollout of the new SDP (Service Delivery Platform) counter system, optimising service delivery by reducing
processing times, facilitating the offer of new products and services, improving the time to market and, in terms of Poste
Italiane’s technology infrastructure, centralising the control of applications, facilitating development, testing and operating
processes.
2. Organisation 25
• The execution, based on the provisions of the agreement with the labour unions dated 27 July 2010, of the transfer from
Postal Services to the Retail Market function of the Decentralised Distribution Centres serving less than 3 zones, which
will report to the manager of the relevant post office and, from an operational viewpoint, to the Area Delivery Manager
with responsibility for the related area.
RETAIL
As well as comprising the main sales channel for postal and financial products and services to retail customers, in small
communities post offices are also points of reference for social purposes and public services.
Back-office activities are partly carried out at post offices, and partly at 15 specialist service centres (Centralised Services
Teams) spread around the country and, as noted above, recently placed 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 opening current accounts and ancillary services, loan and mortgage approval processes
and certain after-sales activities.
The above Teams carry out these activities for both retail and business customers (SMEs and Local Government entities).
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 Products” areas have been created within post offices. These
spaces are used exclusively to offer value added financial products and services aimed at retail customers.
At 31 December 2010 the number of these areas, managed via a highly advanced reporting system designed to promptly
monitor commercial performance, amounted to 4,273, with around 180 in the process of being set up.
ENTERPRISES AND LOCAL GOVERNMENT
During 2010 the management model for the SME market segment, covered by the Retail Market function, was launched.
This envisages the georeferencing of all SME and Local Government customers in relation to approximately 480 highly
specialised, integrated physical locations (divided between Offices and Areas).
In addition to counter staff, PosteImpresa offices (which represent an evolved form of the pre-existing PosteBusiness
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 various sectors: communication, marketing, services and B2B (association, advertising and press agencies, private educational institutes, sports
centres, wholesalers, etc.); Ho.Re.Ca11 and B2C (hotels and restaurants, entertainment providers, retailers, etc.); companies (manufacturers, utilities, construction, transport, etc.); professionals and property managers.
• Enterprise and Local Government sales personnel, with responsibility for managing and developing the accounts assigned to them and acquiring prospective customers.
Moreover, each geographical area has a commercial organisation focusing on business customers, providing a link between central departments and Business 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 Area Offices level.
11. Ho.Re.Ca., the acronym for Hotellerie-Restaurant-Café, indicates enterprises operating in the hotel or food and beverage sectors.
26
Geographical distribution of post offices
and Branch Offices
356
Geographical distribution of Areas
371
4
1
1,112
8
1,488 12
994
10
5
462
5
1,030 11
535
4
171
2
2,022 19
71
496
289
2
458
4
Lombardy Area
Based in Milan
2
North Western Area
Based in Turin:
Piedmont
Valle d’Aosta
Liguria
Central Area 1
Based in Florence:
Tuscany
Umbria
9
495
5
1,053 9
187
2
705
6
855
855
12
Central Area
Based in Rome:
Lazio
Sardinia
Abruzzo
Southern Area 2
Based in Palermo:
Sicily
Post offices
Branch Offices
North Estern 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 ACCOUNTS AND PUBLIC SECTOR
The Large Accounts and Public Sector function is responsible for developing business with Large Account, Central
Government and some Local Government customers. As mentioned above, with the aim of better tailoring the offering to
the needs of the different customer segments, in 2010 the Group launched an organisational model that envisages,
alongside account managers, the presence of sales personnel specialising in individual products, and the introduction of
pre-sales, after-sales and commercial planning teams at local level. The organisational model for sales forces envisages 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.
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 collecting, transporting, sorting and delivering postal products.
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
(mechanised and manual) and urban and provincial Distribution Centres.
Following the union agreement of 27 July 2010, the Company has embarked on a restructuring of logistics and operations,
based on provision of the postal service five days a week.
The restructuring aims to:
• support development of new product and service offerings in line with the diversification of demand;
• guarantee, in the country’s major cities12, 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;
12. In provincial capitals and municipalities with more than 30,000 inhabitants.
2. Organisation 27
• implement the necessary efficiency improvements to achieve an adequately sized workforce.
In this context, revisiting the supply chain will result in a different distribution of the qualitative and quantitative mix of
facilities around the country, in terms of both sorting centres (mechanised or manual) and delivery offices (Distribution
Centres).
With regard to the configuration of the logistics network13, the project envisages substantial reconfirmation of the existing
21 Sorting Centres, which process domestic mail, and of 15 Priority Centres, whilst the remaining 20 Priority Centres and
all 42 Delivery Logistics Centres are to be closed.
The sorting operations carried out by the centres to be closed are to be transferred to Sorting Centres, with the remaining
mail collection, local notification and transport services to be handed over to the nearest Distribution Centres, which will
be renamed Master Distribution Centres.
The Coding Service Centres currently located within the Delivery Logistics Centres and Priority Centres to be closed will
be transferred to the Operations departments of the nearest Area Logistics Offices. The Coding Service Centres located
at the renamed Master Distribution Centres will remain where they are.
A total of 6 Priority Centres and 28 Delivery Logistics Centres were closed in 2010, whilst the same number of Master
Distribution Centres were established.
31 Dec 2009
31 Dec 2010
Number
Workforce
Number
Area Logistics Offices(*)
11
1,686
9
1,908
Sorting Centres
22
11,479
21
10,931
Priority Centres
35
2,943
29
2,457
Delivery Logistics Centres
42
1,611
14
605
3,870
50,027
3,457
48,929
Delivery Offices(**)
Workforce
All workforce data is shown in full-time equivalent terms.
(*)
From the end of 2010 the figure for the workforce also includes Coding Service Centres, which at 31 December 2010 reported to the the Operations
departments of Area Logistics Offices, following the closure of the Priority Centres and Delivery Logistics Centres to which they previously referred.
The geographical distribution at 31 December 2010 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 41,429 postmen and women and delivery supervisors (42,855 at 31 December 2009).
As regards delivery, beyond the conversion of 70 Distribution Centres into Master Distribution Centres, with the aim of
handling not only mail delivery, but also transport, collection and notification services in the local area, the existing structure
of Distribution Centres is to remain substantially the same.
After a three-week trial period from the end of September, involving 10 Distribution Centres, from 2 November 2010 the
reorganisation of Delivery Centres got underway, in accordance with the plan that provides for fifteen-day windows for
implementation through to completion in May 2011.
At 31 December 2010, 386 Distribution Centres, out of the 917 planned, had started operating according to the guidelines
in the new operating model.
Rollout of the Electronic Postman project continues. At 31 December 2010 a further 350 provincial Distribution Centres
had been computerised, involving approximately 6,500 postmen and women. By the end of 2010 a total of 591 Distribution
Centres had been equipped, covering approximately 18,500 postmen and women.
Further progress was recorded in transferring the process of delivering “undelivered” mail (not delivered during normal
delivery rounds, due to temporary unavailability of the addressee) from post offices to Distribution Centres. The project
affected a further 81 Distribution Centres during the year (95 Centres had completed the transfer at 31 December
2009), making a total of 176.
13. 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.
28
Finally, the International Sorting Centre in Milan has been closed, resulting in the transfer of the handling of inbound and
outbound international mail to the Sorting Centre at Milano Peschiera Borromeo. In addition, the number of Area Logistics
Offices has been reduced from 11 to 9, following closure of the offices in Sardinia and Calabria and the transfer of the
related activities and responsibilities to the Central and Southern Area Logistics Offices.
Distribution of Area Logistics Offices
Distribution of Postal Network Centres
SC
PC
DLC
Piedmont - Valle d’Aosta - Liguria
3
3
-
Lombardy
3
1
2
Triveneto
3
5
1
Emilia Romagna - Marche
2
2
5
Tuscany - Umbria
2
4
3
Lazio(*) - Abruzzo - Molise - Sardinia
3
7
-
Campania - Calabria
2
3
2
Puglia - Basilicata
1
2
1
Sicily
2
2
-
Total
21
29
14
(*)
The Priority Centres include the Romanina and Portonaccio printing
centres in Rome (logistical support centres hosting the remaining
manual processes).
2.1.4 OTHER BUSINESS FUNCTIONS
The Logistic and Digital Services Marketing, BancoPosta and Philately functions are centralised departments which – in the
latter cases, both directly and via a number of Group companies that report to them – create, design and manage the Group’s
ranges of postal and parcel/express delivery products and services, financial services and philatelic products. These functions
also carry out certain operations involved in their areas of business at facilities located around the country, as shown below.
Logistic and Digital Services Marketing is responsible for eleven Service Centres, including nine providing integrated mail
services (the Integrated Notification Service and the Regularisation of Immigrant Workers) and two Electronic Communication
Service Centres, which primarily manage operations relating to a number of online mail services. There are also a number of
operating units called Area Notification Centres, located around the country. Based on a multi-service platform, these centres
offer value added services to businesses and Public Sector customers.
Logistic and Digital Services Marketing is also responsible for the International Operations function, which has responsibility for
development of the postal business through agreements with other providers, and for coordinating the logistical, accounting
and quality control processes involved in international mail services.
BancoPosta operates:
• 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.
2. Organisation 29
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.
2.2 STRUCTURE OF THE POSTE ITALIANE GROUP
100%
100%
Postecom
SpA
Postel SpA
10%
70%
Poste Tributi
ScpA
100%
PostelPrint
SpA
85%
Docutel SpA
37%
17%
C-GLOBAL
SpA
51%
Address
Software Srl
0.25%
(*)
(**)
SDA Express
Courier SpA (*)
39% CLP ScpA
100%
Poste
Link Scrl
Kipoint
SpA
5%
Mistral Air Srl
Postel do
Brasil Ltda
Europa Gestioni
Immobiliari SpA
55%
45%
PosteTutela
SpA
100%
Poste Vita SpA
70%
100%
100%
50%
Italia Logistica
Srl
PosteShop SpA
100%
Poste Assicura
SpA
28.57%
Uptime SpA
Poste Energia
SpA
100%
BancoPosta
Fondi SpA SGR
PosteMobile
SpA
100%
49%
Consorzio per i
servizi di Telefonia
Mobile ScpA
51%
Telma-Sapienza
Scarl (**)
32.45%
Innovazione e
Progetti ScpA
15%
On 31 December 2010 Poste Italiane Trasporti SpA was merged with and into SDA Express Courier SpA.
On 5 November 2010 Poste Italiane SpA subscribed a capital increase out by Telma Sapienza Scarl, thus becoming a member of the consortium.
100%
5%
Docugest
SpA
37%
99.75%
51%
15%
10%
15%
100%
100%
30
3. FINANCIAL REVIEW
3.1 RISK MANAGEMENT FOR THE GROUP AND POSTE ITALIANE SPA
MACROECONOMIC ENVIRONMENT
Having exited from recession, in 2010 the euro-zone economy slowly returned to growth. The pace of recovery in the
various countries is not, however, uniform and the financial crisis that has hit the economies of certain EU countries
(Greece and Ireland) has contributed to a further destabilisation of the economic environment and the creation of
market uncertainty.
After the serious difficulties of the last two years, Italian GDP growth came in ahead of expectations in 2010, thanks to
the positive contribution from gross fixed investment and exports of goods and services, which showed strong growth.
In 2011 the recovery is forecast to be again strongly export-led, given that the fragility of the labour market (high levels
of unemployment) and curbs on public spending will preclude any significant increases in consumer spending or public
investment.
This economic uncertainty has provided the backdrop to Poste Italiane SpA’s operating and financial performance,
resulting in a negative impact on demand for products and services from retail and business customers and from the
Public Sector which, due to Government measures designed to cut the deficit, has had to rein in spending.
MARKET CONDITIONS AND COMPETITION
The Italian postal system is undergoing a number of important changes reflecting the development of Information
Technology, which has led to the progressive replacement of traditional forms of communication, the deregulation of postal
services (from 1 January 2011) and the recession, which has further depressed the already low volumes of mail in Italy.
Full deregulation of the postal market, as required by EC Directive 2008/6/CE, will lead to increased competition, above
all in the most profitable urban areas, where the market has, however, already been penetrated to varying degrees by
the Company’s competitors. These competing providers are expected to introduce new commercial offerings with the
aim of increasing their share of the market.
Whilst volumes decline, due to competition and growth in alternative forms of communication, the cost of providing
the Universal Service will continue to be borne by Poste Italiane SpA.
In response to these structural changes in the postal market, Poste Italiane SpA has leveraged its access to new
technologies, and its uniquely widespread footprint around the country, to develop a business model capable of
meeting a broad range of market needs: to communicate, to send goods, to make payments and to offer financial
services, integrating these functions in order to provide a full range of service combinations to serve the different
customer segments.
3. Financial review 31
FRAUD AND EXTERNAL EVENT RISKS
Poste Italiane SpA pays great attention to security in order to protect its staff and the Company’s assets, and deal with
the risks deriving from fraud or criminal actions committed by external agents. These risks are monitored and mitigated
via the anti-phishing system, which identifies any attempts at phishing for customers’ details, the Security Control
Room, customer awareness campaigns, heightened fraud prevention initiatives and an increased internal investigation
capacity, as well as greater coordination with the police and magistrates.
Particular attention is paid to risks deriving from fraud within the Company, which has adopted specific prevention
initiatives.
FINANCIAL RISK MANAGEMENT
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 SGR 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 as governed by
Presidential Decree 144/2001. In particular, these transactions regard management of the liquidity deposited in postal
current accounts, carried out under the Company’s own name but subject to restrictions on the investment of the
liquidity in compliance with the applicable legislation14, the management of collections and payments in the name and
on behalf of third parties, the funding of assets and the investment of its own liquidity.
In 2010 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 new investment
model approved by the Board of Directors in April. This new investment profile is, among other things, based on the
results of continuous monitoring of the performance of postal current account deposits, and on an updated
statistical/econometric model of deposits developed by a leading consulting firm. This model forms the basis of the
Company’s investment policy with the aim of mitigating exposure to interest rate and liquidity risk by predicting
potential gaps emerging as a result of the need to reconcile risk exposure with the necessity of earning returns linked
to the market interest rate curve.
14. The Company is required to invest the funds deriving from postal current account deposits by private customers in euro area government securities, whilst
deposits by Public Sector entities are deposited with the MEF.
32
The Group’s own liquidity is managed 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 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 unitlinked 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.
The crisis of recent years has had profound effects on the performance of all the financial instruments on the market,
especially those whose returns are magnified. These instruments, which are used exclusively, and on a residual basis,
by the subsidiary Poste Vita SpA to invest the premiums collected on so-called Branch III policies, are inevitably
exposed to higher risk and volatility of their fair value.
Even though the Group has developed over time prudential policies in the customers’ best interests, which entails the
selection of domestic and foreign issuers solely with investment grade ratings, the situation prompted closer scrutiny
at Group level, so as to ensure full awareness of the performance of the products placed and the risks for the
customers that, to this day, characterize these products. In this regard, Poste Vita issued over the years Branch III
index- and unit-linked policies. 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 credit and financial risks associated
with them are borne by the customer. The Company has taken steps to safeguard its own and the Group’s reputation
and its operating capacity by constantly monitoring changes in the risk profile. Particular attention was given to
monitoring certain financial instruments underlying index-linked policies issued in the period 2001-2002 by Programma
Dinamico SpA, a securitisation vehicle set up under Law 130/99. These instruments bring together different financial
positions, including securitisation transactions and credit and financial derivatives, whose performances were affected
by the financial and credit market crisis. Whilst it is true that, in accordance with the legal nature of the products in
question, the related investment risk is transferred to policyholders, if appropriate the Company is prepared to
restructure the instruments in order to safeguard its commercial interests, which could be prejudiced by widespread
dissatisfaction among customers, and the potential impact on its reputation as a result of a general expression of
discontent. In this context, in December 2008 and May 2009 Poste Vita SpA offered policyholders the opportunity to
convert certain Branch III policies into Branch I policies providing minimum returns guaranteed by the Company.
Further information on financial risk management is provided in the notes to the consolidated and separate financial
statements for the year ended 31 December 2010 (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.
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
staff-related 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 objectives 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
Certain trading relations are governed by specific agreements and contracts, some of which have expired. 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.
34
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 2010.
3.2 OPERATING RESULTS
INCOME STATEMENT
(€m)
Poste Italiane SpA
Increase/(Decrease) Year ended 31 Dec
% Amount
2009
2010
(2.0)
(210)
10,344
10,134
33.6
2,393
7,112
9,505
Revenues from sales and services
Earned premiums
(18.5)
2.4
8.7
1.9
(449)
5
1,739
48
2,431
211
20,098
2,550
1,982
216
21,837
2,598
Other income from financial
and insurance activities
Other operating income
Total revenue
Cost of goods and services
18.1
1,564
8,626
10,190
Net change in technical provisions for insurance
business and other claims expenses
27.6
(3.5)
(1.4)
30.0
2.2
84
(217)
(8)
(9)
6
304
6,222
555
(30)
272
388
6,005
547
(39)
278
16.9
271
1,599
1,870
(14.4)
0.6
(27)
1
188
178
161
179
n/s
(1.0)
1
-
18.7
26.8
298
184
1,590
686
1,888
870
12.6
114.0
904.0
1,018.0
Year ended 31 Dec
2010
2009
9,572
9,841
n/a
n/a
281
169
10,022
1,983
168
194
10,203
2,045
113
(25)
(181)
(62)
67.3
(12.9)
(1.8)
(3.0)
n/a
n/a
n/a
n/a
Other expenses from financial and
insurance activities
Staff costs
Depreciation, amortisation and impairments
Capitalised costs and expenses
Other operating costs
5
5,821
494
(9)
276
1
6,052
504
(10)
212
4
(231)
(10)
1
64
n/s
(3.8)
(2.0)
(10.0)
30.2
Operating profit/(loss)
1,452
1,399
53
3.8
Finance costs
Finance income
158
144
174
144
(16)
n/s
(9.2)
n/s
Profit/(Loss) on investments accounted
for using the equity method
n/a
n/a
n/a
n/a
Profit/(Loss) before tax
Income tax expense
1,438
709
1,369
633
69
76
5.0
12.0
Profit for the year(*)
729.0
736.7
(7.7)
(1.0)
n/s: not significant.
(*)
Profit is entirely attributable to owners of the Parent, and no portion is attributable to non-controlling interests.
Increase/(Decrease)
Amount
%
(269)
(2.7)
n/a
n/a
OPERATING RESULTS OF THE POSTE ITALIANE GROUP
Revenue by operating segment
(*)
Total revenue
Increase/(Decrease)
(€m)
2009
2010
Amount
Postal Services
5,227
5,065
(162)
Financial Services
4,964
4,946
(18)
(0.4)
Insurance Services
9,376
11,206
1,830
19.5
Other Services
Total Poste Italiane group
(*)
%
(3.1)
531
620
89
16.8
20,098
21,837
1,739
8.7
After consolidation adjustments and elimination of intercompany transactions.
Group - Total revenue (€m)
22,000
+16.8%
20,000
+9.7%
18,000
16,000
14,000
+29.0%
+19.5%
+8.0%
-0.4%
-5.1%
-3.1%
12,000
10,000
8,000
6,000
4,000
2,000
0
2008
2009
2010
Postal Services
Insurance Services
Financial Services
Other Services
Revenues from
sales and services
(€m)
2009
2010
Other income from
financial and
insurance activities
Earned premiums
Inc./
(Dec.)
2009
2010
Inc./
(Dec.)
2009
2010
Other operating
income
Inc./
(Dec.)
2009
2010
Inc./
(Dec.)
Postal Services
5,210
5,050
(3.1)
-
-
-
-
-
-
17
Financial Services
4,796
4,665
(2.7)
-
-
-
168
281
67.3
-
-
n/s
-
-
-
7,112
9,505
33.6
2,263
1,701
(24.8)
1
-
n/s
Other Services
338
419
24.0
-
-
-
-
-
-
193
201
4.1
Total Poste
Italiane group
10,344
10,134
(2.0)
7,112
9,505
33.6
2,431
1,982
(18.5)
211
216
2.4
Insurance Services
15 (11.8)
36
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
Poste Italiane Trasporti SpA(*)
Poste Italiane Trasporti SpA - external revenue
Total external revenue
Total revenue
Increase/(Decrease)
2009
2010
Amount
%
4,489
(204)
(4.3)
297
9
3.1
247
30
13.8
31
5
19.2
1
(2)
(66.7)
0
n/a
n/s
n/s
5,227
5,065
(162)
(3.1)
4,709
16
4,505
16
4,693
423
135
438
141
288
349
132
411
164
217
37
11
44
13
26
29
26
42
41
3
31
31
n/a
n/a
On 20 December 2010 the deed for the merger of Poste Italiane Trasporti SpA with and into SDA Express Courier SpA was executed, with effect for
legal purposes from 31 December 2010 and for accounting and tax purposes from 1 January 2010.
(*)
The Poste Italiane group’s Total revenue for 2010, amounting to 21,837 million euros, is up 8.7% on the previous year (total
revenue of 20,098 million euros in 2009). This reflects earned premiums which, at Group level, are up from 7,112 million
euros in 2009 to 9,505 million euros in 2010 (an increase of 33.6%).
Total revenue from Postal Services are down from 5,227 million euros in 2009 to 5,065 million euros in 2010. This
performance continues to reflect the fact that the market has reached maturity, with business customers reducing their
demand for mail services, post being replaced by other forms of communication (electronic, for example), competitive
pressures arising as a result of progressive deregulation of the postal sector, and the difficulties caused by the overall
economic situation. Turnover was also adversely affected by new regulations abolishing subsidised tariffs for publishers from
1 April 2010, resulting in a reduction in the volume of mail sent by this category of customer.
Financial Services contributed 4,946 million euros to total revenue (4,964 million euros in 2009), with other income from
financial activities (up 113 million euros) – designed to stabilise the income generated by the investment in securities of
postal current account deposits – largely offsetting the downturn in revenues from sales and services (down 131 million
euros). This reduction reflects, among other things, reduced fees earned on the placement of equities and bonds, an activity
that the Parent Company only restored during the second half of 2010, partly in accordance with a specific company policy
designed to reduce counterparty risk and offer customers products providing greater protection and guarantees.
As already noted above, the increase in revenues from Insurance Services, which are up from 9,376 million euros in 2009
to 11,206 million euros in 2010 (up 19.5%), played a key role in driving the Group’s revenue growth. In addition to the
continued sale of Branch I and V policies, which together account for over 65% of turnover, the rise in earned premiums
reported by Poste Vita (up 2.4 billion euros) was also due to the commercial launch of three new Branch III products, which
met with a positive response from customers.
Revenues from Other Services, generated by ordinary activities unrelated to the three main operating segments, regard,
among other things:
• 162 million euros (92 million euros in 2009) in revenues generated by PosteMobile SpA from mobile telecommunications
services;
• 54 million euros (59 million euros in 2009) in revenues deriving from the sale of goods through the “Shop in Shop” network;
• 43 million euros (26 million euros in 2009) in revenues from the freight and passenger charter services provided by the airline, Mistral Air SpA;
• 31 million euros (29 million euros in 2009) in revenues generated by the collective asset management activities carried out
by BancoPosta Fondi SpA SGR.
COST ANALYSIS
Costs
2009
2010
% inc./(dec.)
2,550
8,626
304
6,222
555
(30)
272
2,598
10,190
388
6,005
547
(39)
278
1.9
18.1
27.6
(3.5)
(1.4)
30.0
2.2
18,499
19,967
7.9
(€m)
Net change in technical provisions for insurance business and other claims expenses
Other expenses from financial and insurance activities
Staff costs
Total costs
An analysis of costs and other charges shows an increase of 7.9% (19,967 million euros in 2010, compared with 18,499
million euros in 2009), essentially due to:
• an increase in technical provisions for the insurance business (up 1,564 million euros on 2009) which, as they are made
to cover charges linked to the payment, by Poste Vita, of obligations and claims and to cover changes in mathematical
and technical provisions, are closely linked to growth in earned premiums during the year;
• a rise in other expenses from financial and insurance activities (up 84 million euros on 2009), reflecting an increase in
impairments following the fair value measurement of financial instruments;
• an increase in the cost of goods and services (up 48 million euros on 2009), essentially due to a rise in variable operating
costs linked to the growth of PosteMobile’s business and the resulting increase in the subsidiary’s revenues.
A breakdown of staff costs is shown in the following table.
Staff costs
(€m)
Salaries, social security contributions and sundry expenses(*)
Redundancy payments
Net provisions for disputes
Provisions to the Solidarity Fund
Provisions for restructuring charges
Total
Income from fixed-term contract agreement
Total Staff costs
Increase/(Decrease)
2009
5,860
170
198
115
6,343
(121)
6,222
2010
5,806
157
49
59
6,071
(66)
6,005
Amount
(54)
(13)
(149)
59
(115)
(272)
55
(217)
%
(0.9)
(7.6)
(75.3)
n/s
n/s
(4.3)
(45.5)
(3.5)
This includes the following items reported in note 34 to the consolidated financial statements:salaries and wages; social security contributions; staff termination benefits; temporary work; Directors’ fees and expenses; other costs (cost recoveries).
(*)
38
The ordinary component of staff costs, relating to salaries, wages and sundry expenses, is down 0.9% (a decrease of 54
million euros compared with 2009). This reflects a reduction in the average workforce during the year (a reduction of
approximately 2,300 in the average number of staff employed in 2010, compared with the previous year).
Net provisions for disputes which, as in the past, are mainly linked to the dispute over fixed-term contracts, primarily regard
updated estimates of the liabilities to be incurred essentially by the Parent Company. The estimates take account of both
the overall amount of claims payable, and application of 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 to the Solidarity Fund have been established following the union agreement of 27 July 2010 relating to the
reorganisation of postal services. The provisions have been made within the scope of the Fondo di Solidarietà (the Solidarity
Fund established by Ministerial Decree 178/2005) to provide income support for qualifying employees who decide to take
early retirement.
Provisions for restructuring charges, made by the Parent Company in 2009, regard the cost incurred by the Company in
the form of redundancy payments to approximately three thousand staff who left the Company by 31 December 2010.
These provisions have been used in full.
Finally, staff costs also reflect the reduction in income deriving from agreements between the Parent Company and the
labour unions regarding the re-employment by court order of staff previously employed on fixed-term contracts. This item
amounted to 121 million euros in 2009, compared with 66 million euros in 2010, marking an overall reduction of 3.5%
(down 217 million euros on 2009).
The above performance of revenues and costs has resulted in Operating profit of 1,870 million euros (1,599 million euros
in 2009), as shown in the following table.
After net finance income of 18 million euros, profit before tax amounts to 1,888 million euros (1,590 million euros in 2009).
Operating profit: operating segments(*)
Increase/(Decrease)
(€m)
2009
2010
Amount
%
Postal Services
Financial Services
Insurance Services
Other Services
Eliminations(**)
(208)
1,422
272
107
6
(153)
1,390
436
197
-
55
(32)
164
90
(6)
(26.4)
(2.3)
60.3
84.1
n/s
Total Poste Italiane group
1,599
1,870
271
16.9
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).
(*)
Income tax expense is up from 686 million euros for 2009 to 870 million euros for 2010, reflecting an effective tax rate of
46.1% (in 2009 the effective tax rate was 43.1%). The figure for 2009 benefitted from the positive impact generated by
the exercise of certain options relating to taxation, which reduced income tax expense by 51 million euros. In addition, the
figure for 2009 also reflects the IRES credit of 10.7 million euros deriving from the decision to claim a rebate for excess
IRES paid by consolidated companies in 2007, corresponding to 10% of IRAP paid in that year, as permitted by art. 6 of
the Law Decree of 29 November 2008, converted into Law 2 of 28 January 2009.
Finally, income tax expense for 2010 also reflects the impact of taxation of the “change in the technical reserves for life
policies”, introduced by the amendment to the draft legislation converting the budget measures of July 2010, which added
20 million euros to the tax charge payable by the subsidiary Poste Vita for the year.
Profit for the year is 1,018 million euros, up 12.6% on the 904 million euros of 2009.
OPERATING RESULTS OF POSTE ITALIANE SPA
Increase/(Decrease)
(€m)
2009
2010
Amount
%
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
3,852
175
4,027
5,039
93
9,159
372
310
9,841
3,855
161
4,016
4,962
105
9,083
364
125
9,572
3
(14)
(11)
(77)
12
(76)
(8)
(185)
(269)
0.1
(8.0)
(0.3)
(1.5)
12.9
(0.8)
(2.2)
(59.7)
(2.7)
4,027
4,016
(204)
(4.3)
(*)
Market revenues from Postal Services
USO
372
364
Tariff subsidies(**)
310
125
4,709
4,505
Total Postal Services
(**)
Subsidies for services provided at discounted rates under the relevant legislation.
Poste Italiane SpA’s Revenues from sales and services amount to 9,572 million euros, down 2.7% on the previous year
(9,841 million euros in 2009).
Market revenues are down 0.8% from 9,159 million euros in 2009 to 9,083 million euros in 2010, with Postal Services
revenues substantially in line (down 11 million euros compared with 2009) and a bigger decline in BancoPosta’s service
revenues (down 77 million euros on 2009).
Within the Postal Services segment, the resilience of Mail and Philately revenues (up 3 million euros on 2009), primarily
attributable to the good performance of Integrated Services and Direct Marketing that offset the ongoing decline in
Unrecorded Mail, contrasts with the reduction of 14 million euros in revenues from Express Delivery and Parcels compared
with 2009, reflecting the progressive deterioration in volumes for both the international and domestic markets, and a
downturn in publishers’ mailings.
BancoPosta’s market revenues are down 1.5% from 5,039 million euros in 2009 to 4,962 million euros in 2010, as growth
in income from current accounts (up 43 million euros) was unable to offset the reduction in income from postal savings
and investment (down 113 million euros). As noted in the above analysis of the Group’s operating results, the asset and
fund management component was also affected by the reduced fees earned on the placement of equities and bonds, an
activity that the Parent Company only restored during the second half of 2010, partly in accordance with a specific company
policy designed to reduce counterparty risk and offer customers products providing greater protection and guarantees.
Postal savings products (the sale of Interest-bearing Postal Certificates and Postal Savings Book deposits managed on
behalf of Cassa Depositi e Prestiti) recorded a net inflow of 2.6 billion euros in 2010 (5.5 billion euros in 2009).
Universal Service Obligation (USO) subsidies of 364 million euros are, whilst awaiting renewal of the Contratto di
Programma (Planning Agreement) for the three-year period 2009-2011, estimated on the basis of the best available
information from previous Contratti di Programma (Planning Agreements) and Interministerial Committee for Economic
Planning (CIPE) “Guidelines for Regulation of the Postal Sector”.
The tariff subsidies due to the Company as a result of legislation granting access to reduced-rate tariffs for certain sectors
(publishers, non-profit organisations, election campaign material) are down from the 310 million euros of 2009 to 125
million euros in 2010. The reduction is due to a decrease in publisher tariff subsidies, which are down from 242 million
euros in 2009 to 58 million euros in 2010. As described in greater detail below, during 2010 the publishing sector was
affected by a number of major new regulations abolishing subsidised tariffs for publishers from 1 April 2010. The subsidies
were then reinstated for charities and non-profit organisations by Law 70 of 22 May 2010, although final determination of
40
the subsidies was, however, put off until the issue of a specific Interministerial Decree.
The subsidies paid for election candidates are in line with the previous year (67 million euros in 2009 and in 2010).
Total revenue of 10,022 million euros (10,203 million euros in 2009) also includes 281 million euros in other income from
financial activities (168 million euros in 2009) and 169 million euros (194 million euros in 2009) in other operating income,
including 65 million euros from the sale of properties (57 million euros in 2009).
COST ANALYSIS
Costs
(€m)
2009
2010
% inc./(dec.)
2,045
1,983
(3.0)
1
5
n/s
6,052
5,821
(3.8)
504
494
(2.0)
(10)
(9)
(10.0)
212
276
30.2
8,804
8,570
(2.7)
Other expenses from financial activities
Staff costs
Total costs
An analysis of costs and other charges shows a reduction of 234 million euros from 8,804 million euros in 2009 to 8,570
million euros in 2010. This reflects a reduction in the cost of goods and services (down 62 million euros on 2009), 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 231 million euros on 2009). The cost of goods and services also includes
interest paid to current account holders, which is down 41 million euros following the decision to lower the rate of interest
paid from 0.25% to 0.15% from 10 May 2010.
Other operating costs of 276 million euros (212 million euros in 2009) include provisions for disputes with third parties,
which are made to cover expected liabilities linked to disputes of various nature with suppliers and others.
Staff costs break down as follows.
Staff costs
Increase/(Decrease)
(€m)
Salaries, social security contributions and sundry expenses(*)
Redundancy payments
Net provisions for disputes
2009
5,691
170
197
115
2010
5,624
157
47
59
-
Amount
(67)
(13)
(150)
59
(115)
%
(1.2)
(7.6)
(76.1)
n/s
n/s
Total
6,173
5,887
(286)
(4.6)
Income from fixed-term contract agreement
(121)
(66)
55
(45.5)
Total Staff costs
6,052
5,821
(231)
(3.8)
(*)
This includes the following items reported in note 28 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 1.2%, primarily, as part
of a prudent staff management policy, due to both a reduction in the average permanent workforce during the year (a
decrease of 2 thousand full time equivalents or FTEs compared with 2009) and to reduced use of fixed-term staff. In this
regard, the Company recruited 10,979 people on fixed-term contracts (12,808 in 2009) in 2010, equal to 10,176 FTEs
(12,270 FTEs in 2009), of which 10,898 correspond to 10,095 FTEs pursuant to art. 2, paragraph 1-bis of Legislative Decree
368/200115. The permanent workforce at 1 January 201016 amounted to 147,753 (150,631 at 1 January 2009), equal to
144,902 FTEs (147,922 FTEs in 2009).
As previously described in the analysis of the Group’s staff costs, net provisions for disputes take account of both the
overall amount of claims payable, and application of 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.
Finally, staff costs also reflect the reduction in income deriving from agreements between the Company and the labour
unions regarding the re-employment by court order of staff previously employed on fixed-term contracts. This item
amounted to 121 million euros in 2009, compared with 66 million euros in 2010, marking an overall reduction of 3.8%
(down 231 million euros on 2009).
After net finance income, Profit before tax from ordinary activities amounts to 1,438 million euros (1,369 million euros in 2009).
Income tax expense is up from 633 million euros for 2009 to 709 million euros for 2010, reflecting an effective tax rate of
49.3% (in 2009 the effective tax rate was 46.2%). The figure for 2009 benefitted from the positive impact generated by
the exercise of certain options relating to taxation, which reduced income tax expense by 42 million euros. In addition, the
figure for 2009 also reflects the IRES credit of 10 million euros deriving from the decision to claim a rebate for excess IRES
paid by consolidated companies in 2007, corresponding to 10% of IRAP paid in that year, as permitted by art. 6 of the Law
Decree of 29 November 2008, converted into Law 2 of 28 January 2009.
15. 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 at 1 January of the year in which the staff are recruited. In 2009 all fixed-term contracts were entered into in accordance with art. 2.
16. The workforce at 1 January of each year is identical to the workforce at 31 December of the previous year.
42
3.3 FINANCIAL POSITION AND CASH FLOW
FINANCIAL POSITION AND CASH FLOW OF THE POSTE ITALIANE GROUP
The Poste Italiane group’s Net invested capital amounts to 3,397 million euros (3,237 million euros at 31 December 2009),
financed entirely by equity.
(€m)
Non-current assets
Working capital
Staff termination benefits
Note(*)
31 Dec 2009
31 Dec 2010
Increase/
(Decrease)
[23]
3,807
876
(1,446)
3,654
1,066
(1,323)
(153)
190
123
3,237
3,397
160
(*)
Notes to the consolidated financial statements.
Non-current assets break down as follows at 31 December 2009 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(*)
31 Dec 2009
31 Dec 2010
Increase/
(Decrease)
[5]
[6]
[7]
[8]
[16]
3,124
154
514
14
1
2,957
163
521
7
6
(167)
9
7
(7)
5
3,807
3,654
(153)
Compared with the situation at the end of 2009, Non-current assets report a net decrease of 153.6 million euros as a result
of reductions of 589.2 million euros and additions totalling 435.6 million euros.
Reductions regard:
• sales of Investment property, totalling 11.8 million euros, of Property, plant and equipment, amounting to 3 million euros,
and of Intangible assets, totalling 0.4 million euros;
• sales of industrial properties owned by the Parent Company and accounted for in Non-current assets held for sale,
amounting to 3.7 million euros;
• depreciation, amortisation and impairments, totalling 560.6 million euros, of which 377.7 million euros regards Property,
plant and equipment, 176.3 million euros Intangible assets and 6.6 million euros depreciation and impairments of
Investment property, after reversals of impairments. Impairments of 16.6 million euros include 13.4 million euros relating
to the impairment of goodwill arising from consolidation of SDA Express Courier SpA, via the use of provisions made in
2009 to take account of any future deterioration in the indicators used as the basis for drawing up the long-term business
plans for the Group companies that provide postal services;
• a change in the basis of consolidation, amounting to 9.2 million euros;
• adjustments and reclassifications of 0.5 million euros.
Additions regard:
• investments in Property, plant and equipment, amounting to 247 million euros, primarily by the Parent Company and largely attributable to the purchase of hardware to renew the technology used in the Group’s offices and to the modernisa-
tion and upgrade of the post office network and other industrial sites;
• investments in Intangible assets, amounting to 185.7 million euros, primarily by the Parent Company and regarding the
purchase, and entry into service, of both new software applications for the maintenance and development of the technology infrastructure used to support the provision of financial services, and new software applications for innovative Mail,
WEB Oriented and BancoPosta services;
• acquisitions of Investments, totalling 1.7 million euros, including: 1 million euros for SDA Express Courier SpA’s establishment of Kipoint SpA (with initial share capital of 0.5 million euros and subsequent capital contributions amounting to a
further 0.5 million euros); 0.6 million euros deriving from the Parent Company’s subscription of 32.45% of the share capital of Telma-Sapienza Scarl; 0.1 million euros relating to SDA Express Courier SpA’s subscription of 28.57% of the share
capital of Uptime SpA;
• purchases of Investment property, amounting to 1.2 million euros.
Working capital of 1,066 million euros breaks down as follows at 31 December 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
Other non-current assets and liabilities
Note(*)
31 Dec 2009
31 Dec 2010
Increase/
(Decrease)
[11]
[12] [13]
[25] [26]
[39]
[22]
[10] [26]
53
4,684
(3,578)
198
(1,234)
753
44
4,518
(3,462)
474
(1,264)
756
(9)
(166)
116
276
(30)
3
876
1,066
190
Working capital
(*)
The increase in Working capital (up 190 million euros compared with the end of 2009) is primarily due to the following changes:
• a net reduction in Trade receivables and other current assets of 166 million euros, due to both the collection of accumulated
amounts due to the Parent Company from the Publishing Department of the Cabinet Office, and to a reduction in revenues,
and therefore receivables, in the form of fees and commissions due from Cassa Depositi e Prestiti SpA for the collection of
postal savings deposits;
• an increase in net Current and deferred tax assets of 276 million euros, reflecting fair value losses on investments in securities, and the absorption of deferred tax liabilities on components of Equity, after reclassification to the income statement of the
positive balance of the fair value reserve deriving from the sale of available-for-sale securities by the Parent Company.
At 31 December 2010 Equity amounts to 4,383 million euros (4,575 million euros at 31 December 2009) and breaks down as
follows:
• Share capital
1,306.1 million euros;
• Reserves
(58.4) million euros;
• Retained earnings
3,135.4 million euros.
Compared with 31 December 2009 Equity is down 191.8 million euros as a result of the following changes.
Additions:
• profit for the year of 1,017.9 million euros;
• changes in the cash flow hedge reserves, amounting to 81.7 million euros net of tax;
• the balance of actuarial gains and losses on provisions for staff termination benefits, totalling 50.9 million euros net of tax.
Reductions:
• changes in the fair value reserves, amounting to 842.3 million euros net of tax;
44
• the payment of dividends to shareholders, totalling 500 million euros.
Net funds at 31 December 2010 are summarised below:
(€m)
Financial liabilities
- Financial assets at fair value
- Bonds
- Loans from Cassa Depositi e Prestiti
- Bank borrowings
- Other borrowings
- Other(**)
Technical provisions for insurance business
Liabilities attributable to BancoPosta
Financial assets
- Loans and receivables
- Available-for-sale financial assets
- Financial instruments at fair value through profit or loss
- Other derivative financial instruments
Assets attributable to BancoPosta
Technical provisions for claims attributable to reinsurers
Net liabilities/(assets)
Deposits and cash in hand
Net debt/(funds)
(*)
(**)
Note (*)
31 Dec 2009
31 Dec 2010
Increase/
(Decrease)
[24]
5,882
1,691
771
679
261
110
2,370
35,927
37,718
(39,313)
(864)
(27,776)
(10,638)
(35)
(39,512)
(1,0)
701
(2,039)
(1,338)
5,331
721
770
513
950
61
2,316
41,739
37,811
(45,112)
(750)
(33,035)
(11,198)
(129)
(39,654)
(8.0)
107
(1,093)
(986)
(551)
(970)
(1)
(166)
689
(49)
(54)
5,812
93
(5,799)
114
(5,259)
(560)
(94)
(142)
(7.0)
(594)
946
352
[21]
[14]
[9]
[14]
[10]
[15]
Includes derivative instruments, financial liabilities payable to subsidiaries and other financial liabilities.
Net funds at 31 December 2010 amount to 986 million euros (at the end of 2009 the balance was 1,338 million euros). The
change is due to the above change in the fair value reserves (down 842 million euros) and, therefore, to the mere
accounting mismatch between assets (government securities) measured at fair value and liabilities (postal current account
deposits) measured at cost.
(€m)
2009
2010
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
2,346
859
(657)
(359)
(150)
2,039
1,179
(2,211)
586
(500)
Net change in cash and cash equivalents
(307)
(946)
Deposits and cash in hand at end of year
2,039
1,093
Liquidity at 31 December 2010 amounts to 1,093 million euros (2,039 million euros at the end of 2009).
FINANCIAL POSITION AND CASH FLOW OF POSTE ITALIANE SPA
Poste Italiane SpA’s Net invested capital amounts to 3,688 million euros (3,605 million euros at 31 December 2009),
which is 98% financed by Equity and 2% by net debt.
(€m)
Non-current assets
Working capital
Note(*)
[19]
31 Dec 2009
4,464
560
(1,419)
31 Dec 2010
4,276
710
(1,298)
Increase/
Decrease
(188)
150
121
3,605
3,688
83
31 Dec 2009
2,966
77
345
1,075
1
31 Dec 2010
2,806
92
358
1,017
3
Increase/
Decrease
(160)
15
13
(58)
2
4,464
4,276
(188)
(*)
Notes to the separate financial statements.
Non-current assets break down as follows at 31 December 2009 and 2010:
(€m)
Investment property
Intangible assets
Investments
Non-current assets
(*)
Note(*)
[4]
[5]
[6]
[7]
[14]
Compared with the situation at the end of 2009, Non-current assets report a net reduction of 187.5 million euros, following
additions of 386.5 million euros and reductions of 574 million euros.
Additions regard:
• investments in Property, plant and equipment, amounting to 224 million euros, Intangible assets, totalling 155.8 million
euros, and Investment property, amounting to 0.5 million euros, with 56% regarding information technology and telecommunications networks, 16% postal logistics and 28% the modernisation and upgrade of properties;
• acquisition of Investments, totalling 6.2 million euros, including: 3.5 million euros in capital contributions to Mistral Air Srl
to cover the loss reported at 30 September 2009 and to establish an extraordinary reserve; 1.7 million euros relating to
subscription of the capital increase carried out by SDA Express Courier SpA via Poste Italiane SpA’s contribution of 100%
of its stake in Poste Italiane Trasporti SpA; 1 million euros deriving from subscription of 32.45% of the share capital of
Telma-Sapienza Scarl and payment of the related admission fee.
Reductions regard:
• sales of Investment property, totalling 10.9 million euros, and of Property, plant and equipment, amounting to 1.7 million
euros (primarily relating to the disposal of operating properties and the retirement of obsolete plant);
• sales of Non-current assets held for sale, totalling 3.7 million euros;
• reductions in Investments, totalling 1.7 million euros and including: the above contribution of the stake in Poste Italiane
Trasporti SpA to SDA Express Courier SpA; 0.04 million euros regarding the transfer of the Company’s entire interest in
Poste Voice SpA to Poste Link Scrl. In addition, the merger of the Poste Contact consortium with and into the subsidiary, Poste Link Scrl, on 24 February 2010 generated an increase of 0.08 million euros and a matching reduction of 0.08
million euros;
• depreciation, amortisation and impairments of 556 million euros, which includes 347.9 million euros relating to deprecia-
46
tion of Property, plant and equipment, 142.4 million euros to amortisation of Intangible assets and 3.6 million euros regarding depreciation of Investment property, inclusive of revaluations; 61.4 million euros refers to the reduction in the value
of the investment in SDA Express Courier SpA based on impairment tests and available future projections.
Working capital breaks down as follows at 31 December 2009 and 2010:
(€m)
Trade receivables and other current assets
Trade payables and other current liabilities
Current and deferred tax assets and liabilities
Other non-current assets and liabilities
Working capital
(*)
Note (*)
[10] [11]
[21] [22]
[32]
[18]
[9] [22]
31 Dec 2009
31 Dec 2010
Increase/
(Decrease)
4,412
(3,268)
176
(1,181)
421
4,124
(3,129)
536
(1,199)
378
(288)
139
360
(18)
(43)
560
710
150
Working capital amounts to 710 million euros, representing an increase of 150 million euros compared with the end of
2009. The rise is essentially due to the following:
• a net reduction in Trade receivables and other current assets, primarily due to:
a) the collection of amounts due to the Company from the Publishing Department of the Cabinet Office for subsidies
covering preferential tariffs for publishers for 2008 and previous years;
b) a reduction in revenues in the form of fees and commissions due from Cassa Depositi e Prestiti SpA for the collection
of postal savings deposits, in view of the extraordinary inflows reported in 2009;
• an increase in net Current and deferred tax assets and liabilities of 360 million euros, reflecting fair value losses on investments in securities, and the absorption of deferred tax liabilities on components of Equity, after reclassification to the
income statement of the positive balance of the fair value reserve deriving from the sale of available-for-sale securities.
At 31 December 2010 Equity amounts to 3,613.2 million euros and breaks down as follows:
• Share capital
1,306.1 million euros;
• Reserves
(44.4) million euros;
• Retained earnings
2,351.5 million euros.
Compared with 31 December 2009, Equity is down 463.7 million euros as a result of the following changes.
Additions:
• profit for the year of 729 million euros;
• changes in the cash flow hedge reserves, amounting to 81.4 million euros net of tax;
• the balance of actuarial gains and losses on provisions for staff termination benefits, totalling 49.9 million euros net of tax.
Reductions:
• changes in the fair value reserves, amounting to 824 million euros net of tax;
• the payment of dividends to shareholders, totalling 500 million euros.
(€m)
- Bonds
- Loans from Cassa Depositi e Prestiti
- Bank borrowings
- Other borrowings
- Other(**)
Financial assets
- Loans and receivables
- Available-for-sale financial assets
- Derivative financial instruments
Note (*)
31 Dec 2009
31 Dec 2010
Increase/
(Decrease)
[20]
4,437
771
679
251
76
2,660
37,810
(1,608)
(1,347)
(261)
(39,512)
1,127
(1,599)
4,782
770
513
938
39
2,522
38,077
(2,219)
(1,598)
(598)
(23)
(39,657)
983
(908)
345
(1)
(166)
687
(37)
(138)
267
(611)
(251)
(337)
(23)
(145)
(144)
691
(472)
75
547
[12]
[8]
[12]
[13]
Net debt/(funds)
(*)
(**)
Includes derivative instruments, financial liabilities payable to subsidiaries and other financial liabilities.
Net debt amounts to 75 million euros at 31 December 2010 (net funds of 472 million euros at the end of 2009). The
difference is due to the above change in the fair value reserves (down 824 million euros) and, therefore, to the mere
accounting mismatch between assets (government securities) measured at fair value and liabilities (postal current account
deposits) measured at cost.
(€m)
2009
2010
Cash flow from/(for) operating activities
Cash flow from/(for) investing activities(*)
Cash flow from/(for) financing activities
Cash flow from/(for) shareholder transactions
973
1,547
(595)
(176)
(150)
1,599
1,865
(2,555)
499
(500)
Net change in cash and cash equivalents
626
(691)
1,599
908
(*)
This item includes BancoPosta's portfolio of held-to-maturity investments.
Liquidity at 31 December 2010 amounts to 908 million euros (1,599 million euros at 31 December 2009).
48
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. Poste Italiane SpA is required to provide
Universal Postal Service until 2015.
The Group increasingly aims to provide integrated services and innovative solutions to the general public, businesses and
the Public Sector (Central and Local Government) by taking advantage of its distribution channels, as well as the multiple
and complementary capabilities of its organisational structure.
The Group also 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 include Mail, Express Delivery and Parcels, and Philately activities carried out by Poste Italiane SpA and
certain subsidiaries (SDA Express Courier SpA, the Postel Group, Mistral Air Srl, Consorzio Logistica Pacchi ScpA and
Italia Logistica Srl).
• Financial Services are comprised of the activities of BancoPosta and the subsidiary, Poste Tutela 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, Poste Link Scrl, PosteMobile SpA, Poste Energia SpA and the Consorzio per i Servizi di
telefonia Mobile ScpA) are allocated to the Other Services segment.
Furthermore, the Global Cyber Security Centre Foundation was set up in 2010. Its activities range from the training of Cyber
Security specialists to the sharing of research and development laboratories, and from the management of research
projects financed by European institutional bodies to the exchange of information through an IT platform.
4. Areas of business 49
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 non-Group customers.
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 outline Contratto di Programma (Planning Agreement) for 2009-2011 was agreed by the parties in November 2010 and
has now been submitted to the relevant institutions for their views (CIPE, the Ministry of the Economy and Finance, the
Italian Audit Office, NARS and other relevant parliamentary committees). The outline must also be notified to the European
Commission.
Once definitively signed, the new Contratto di Programma will formalise the amount of subsidies paid by the Government
to Poste Italiane to partially cover Universal Service costs for the three-year period 2009-2011. Such subsidies are subject
to a cap in addition to the recovery of other residual amounts due to Poste Italiane for the preceding three-year period,
based on the addendum to the Contratto di Programma for 2006-2008.
The new Contratto di Programma allows for greater flexibility than its predecessor combined with the objective, set by the
Ministry, to control the costs of the universal service. As already mentioned in the section on the Organisation and as will
be explained in greater detail below, the main provisions entail the reduction of the frequency of mail deliveries from six to
five days a week.
The final approval of the new Contratto di Programma will be given against the backdrop of a fully deregulated postal
service. Article 37 of Law 96 of 4 June 2010 delegated the powers to the Government to transpose into Italian Law, by
one or more legislative decrees, European Parliament and Council Directive 2008/6/EC, in amendment of Directive
97/67/EC, providing for the full deregulation of postal services from 1 January 2011 in all Member States, including Italy.
The Philately business is also regulated by the Contratto di Programma, 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 new Philately Advisory Committee was appointed by the
Ministry for Economic Development in 2010. The Committee has been tasked with the establishment of guidelines for
Italy’s philatelic policies, the annual programme of issues. A new committee for the examination and selection of images
and designs for revenue stamps was also appointed.
There were also certain major changes to the regulatory environment in 2010 which are explained below.
An Interministerial Decree was issued on 30 March 2010 modifying the regulations regarding mail services for publishers.
The regulator established that the subsidised rates for publications set out in the Ministerial Decrees of 13 November 2002
and 1 February 2005 were to apply until 31 March 2010, thus postponing the determination of subsidised tariffs for the
remainder of 2010 until the issue of a later decree “should funds be available in the Cabinet Office’s independent budget”.
Art. 2, paragraph 2-undecies of Law 73 of 22 May 2010, which converted Law Decree 40 of 25 March 2010 into law with
amendments, subsequently earmarked the sum of 30 million euros for 2010 as financial support for the non-profit sector,
which was subsequently re-determined through the exclusion of those parties pursuant to paragraph 2 of art. 1 of Law
50
46/0417. As a result of the earmark, postal rates for certain parties may be reduced by decree of the Ministry for Economic
Development acting in conjunction with the Ministry of the Economy and Finance, in consultation with the Cabinet Office.
The Decree of 21 October 2010 introduced new “maximum” rates retroactively from 1 September 2010 for parties entered
in the Register of Communications Operators on the condition of no new or increased costs to be borne by the State or
the Cabinet Office’s independent budget.
In order to comply with EU principles, art. 2 of the cited Law 73/2010 (paragraphs 4-bis and 4-ter) also introduced changes
to VAT regulations, modifying item 16 of the first paragraph of article 10 of Presidential Decree 633 of 26 October 1972.
The new provision established that “the provision of universal postal service, in addition to sales of accessory goods and
services, by entities for which it is mandatory to provide such services” is exempt from VAT.
The Ministry for Economic Development issued a decree18 on 25 November 2010 extending the application of retail and
non-retail registered and insured mail rates to registered and insured mail relating to administrative notices. The rates were
subsequently also applied to Legal Process and international Priority Mail.
Cabinet Office Decree of 6 May 2009 contained “provisions for the release and use of certified electronic mail addresses
assigned to members of the public”, in implementation of Law 2 of 28 January 2009 having regard to “Urgent measures
to support families, workers, employment and businesses and revisit the national strategic framework in response to the
crisis”. The relevant procedures for the release and use of certified electronic mail addresses assigned to members of the
public to communicate with Public Sector entities were determined in 2010.
Art. 5 of the Cabinet Office Decree postponed the choice of a contractor to provide the service, named the “CEC-PAC”
service and finally “Postacertificat@”, until a public tender could be held. At the end of the tender process, the contract for
the service was awarded to the temporary consortium made up of Poste Italiane, Postecom and Telecom SpA. The contract
was definitively awarded by order of the Department for the digitalisation of the Public Sector and Technological Innovation
on 12 February 2010. This was followed by the signature of a specific contract.
The regulatory environment for international postal services in 2010 was marked by the entry into force of the REIMS IV
agreement between and among Europe’s major postal operators; the agreement established new terminal dues for the
remuneration of international mail.
During the year Constitutional Court sentence 3 of 2010 declared “art. 140 of the Code of Civil Procedure (the unavailability
or refusal to receive the copy) to be unconstitutional, in respect of the part providing that notice is deemed to have been
served to the addressee once it has been sent by registered mail, rather than on receipt of the notice or, in any event, after
ten days from the date of postage”.
The relevant departments of Poste Italiane promptly issued the necessary internal directives to bring its operating
procedures for the delivery of legal process into line with the Court’s ruling. The exact term for holding notices of receipt
for the registered mail covered by the sentence was also fixed.
Cabinet Office Decree 178 of 7 September 2010 on Direct Marketing, published in Official Gazette 256 of 2 December
2010, contained the “Regulations on the establishment and keeping of a public registry of subscribers objecting to the use
of their telephone number for trade sales and promotions”.
Telemarketing was changed by the regulation from an opt-in system for telephone subscribers, by which they were
required to provide their express consent for telemarketing, to an opt-out system by which telemarketing calls may be
made to subscribers without their consent. Subscribers may, however, add their number to the registry established by art.
130, paragraph 3-bis of Legislative Decree 196/2003 and thereby refuse to receive such telephone calls.
The Company continued in 2010 to engage with the Antitrust Authority in relation to proceedings A/413 concerning alleged
abuse of a dominant market position in connection with certain commercial practices of Poste Italiane relating to the Posta
17. The parties excluded are: associations whose political nature of their publications has been recognised by the relevant parliamentary groups; professional
bodies, unions, trade associations, armed and combat organisations.
18. Article 9 of the Decree provides that its provisions “may be amended as required when Directive 2008/06/EC is transposed into Italian law”.
Time product and participation in certain tenders. The Company has put forward a series of proposals, in part designed to
modify a number of postal service regulations, with the aim of bringing them more into line with the spirit of activities
carried out in a competitive market.
The proposals were turned down by the Authority by resolution of 10 November 2010, and the Company consequently
filed an appeal with Lazio Regional Administrative Court, where it is currently pending.
The Antitrust Authority also initiated proceedings on 30 April 2010 (PS/3341) for 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 the closure of the investigation on 29 December 2010 and fined Poste Italiane
200 thousand euros. Dissemination of the advertising material was also prohibited.
The Company paid the fine in February 2011 and appealed the decision before Lazio Regional Administrative Court.
4.1.1 COMMERCIAL OFFERING
Mail
Tailored mail delivery services were expanded in 2010 (Seguimi, Aspettami, Dimmiquando and Chiamami) by which
customers are able to determine the time and date of mail deliveries.
The Infomobility platform was enhanced as part of the Electronic Postman project for the digitalisation of mail delivery services
currently provided by postmen and the development of a technological platform capable of supporting new business services.
Services such as palmtop messages and electronic payments by Postemobile SIM cards and POS will now be supported by
Infomobility.
A new range of unaddressed mail services was launched in specific response to various aspects of commercial customer
demand. Called Postazone, they include value added services such as geomarketing for the planning of advertising campaigns
and reporting instruments that enhance delivery services.
Finally, preparations for the launch of the Data Certa Digitale service were completed during the year. The service, which was
launched in January 2011, enables customers to digitally stamp documents, thereby certifying time and date without having to
go to a post office.
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 new 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 Poste Italiane SpA’s network of 14,000 post offices).
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%). The sale
was made subsequent to the merger of Docugest with CSAB Printing Srl of 16 November 2010, in order to develop
production and commercial synergies between Cedacri and Postel.
The merger of the Poste Contact consortium with Poste Link Scrl, in which both consortia Postel held 15%, was completed
on 8 March 2010.
52
Finally, again in connection with the rationalisation of the Poste Italiane group, proceedings commenced for the liquidation
of Postel do Brasil Ltda (99.75% Postel SpA; 0.25% Address Software Srl), which is a Brazilian company established to bid,
through Consòrcio BRPOSTAL, for a contract to develop hybrid mail services in Brazil19. 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.
Online services
The range of hybrid electronic communications services was reviewed in 2010 in order to relaunch, and/or in certain cases
redesign, online products. The purpose was to further simplify access to and integration with secure digital
communications, and electronic document archiving and backup services.
A digital island project was developed to progress the expansion of MailRoom services, entailing the digitalisation and
electronic protocol of post receipts, from medium and large enterprises to small and medium sized enterprises and,
potentially, to consumers.
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.
2009
Priority Mail(*)
International Mail(**)
inbound
outbound
Registered Mail(***)
Insured Mail(***)
(*)
(**)
(***)
2010
Delivery within
Target
Actual
Target
Actual
1 day
89.0%
90.7%
89.0%
92.0%
85.0%
85.0%
92.5%
93.0%
93.6%
93.3%
94.3%
98.1%
85.0%
85.0%
92.5%
93.5%
90.9%
89.8%
95.1%
98.5%
3
3
3
3
days
days
days
days
Based on data certified by IZI on behalf of the Ministry for Economic Development.
IPC data - UNEX End-to-End Official Rule (data for 2010 are provisional).
Monitored by an electronic tracking system.
19. The Postel Group was the consortium’s technological specialist for the operation of hybrid mail services and the supply of the relevant software platform.
Philately
The Company continued to enrich its range of exclusive products for collectors during the year by issuing stamps of sociocultural importance and overseeing the promotional activities of philatelic specialists20, over two thousand temporary units21
and the participation in Italian and international philatelist events.
The most important commemoratives were dedicated to the 150th anniversary of Garibaldi’s Expedition of the Thousand; the
Solemn Exhibition of the Holy Shroud; the Celestinian Jubilee Year; the 50th Plautus Festival in Sarsina and the tenth
anniversary of the death of the Latin scholar Ettore Paratore. There were also issues commemorating the grand event of the
Unification of Italy, dedicated to the 150th anniversary of Garibaldi’s Expedition of the Thousand and a commemorative stamp
dedicated to Camillo Benso Conte di Cavour on the bicentenary of his birth. Particularly important commemoratives also
included stamps dedicated to Caravaggio on the fourth centenary of this death, Joe Petrosino on the 150th anniversary of his
birth and Leonardo Sciascia.
Italy’s artistic and cultural heritage was commemorated by issues that included: a sheet showing the Basilica Santa Maria in
Collemaggio, an example of Romanesque architecture in Abruzzo; the issue dedicated to the Basilica della Madonna dei
Miracoli in Motta di Livenza (Treviso), marking the 5th centenary of the appearance of the Virgin Mary.
The “Sports” series included, in addition to the standard issue dedicated to the winning team of the Serie A Italian Soccer
Championship, the issue of two stamps commemorating the XXI Winter Olympics, “Vancouver 2010”, the “Singapore 2010
Youth Olympic Games”, the 50th anniversary of the 1960 XVII Olympic Games in Rome, the Men’s World Volleyball
Championship and the Italian Tennis Federation on the centenary of its founding.
The “Made in Italy” series included a stamp dedicated to the centenary of the founding of Alfa Romeo and a stamp produced
using magnetic ink, celebrating Federacciai, the Federation of Italian Steel makers. The issue was timed to mark the centenary
of the opening of Italy’s first continuous rolling steel mill at Bagnoli. The stamp dedicated to nursing, issued as part of the
“Institutions” series, was of particular social significance and was sold at a premium to the normal price, with the additional
charge being donated to breast cancer research.
In addition to initiatives designed to prepare for the application of VAT to deregulated products from August, the Company
used the year to introduce operating cost savings and to strengthen its position in the domestic market with a more flexible
product range.
In this regard, the latest business customer offering, the Home Box solution, which includes a pick-up service and
scheduled delivery within 6 days of collection, was extended with the introduction of an additional service that enables the
addressee to be kept informed of the progress of items sent by text message.
Availability of the pick-up service (an additional service offered in combination with the Postacelere 1 plus, Paccocelere 1
plus and Paccocelere 3 products) was further extended, with the service being offered in 43 major cities and provincial
centres in December 2010.
Paccocelere 1 Plus and Paccocelere 3 electronic consignment notes were reduced from three to two types and their layout
streamlined. A new outsize parcel service was introduced in 2,300 post offices in August 2010 that eased size restrictions
for Paccocelere 3 and Paccocelere 1 plus parcels. Finally end-to-end22 tracking for Italian and international parcels was
introduced in November marking the culmination of the ambitious project to integrate the systems of the Parent with those
of the subsidiary SDA Express Courier SpA.
20. These are dedicated personnel trained to support the promotion of the products offered.
21. Philately services are provided at exhibitions and other events.
22. End-to-end tracking shows the entire route (date and time of processing at each transit point) of a parcel from the time it is handed in at the post office
until its final delivery to the consignee by the courier.
54
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.
Certain corporate actions described below were undertaken in 2010 as part of the rationalisation of the Group to maximise
synergies among Group companies.
A capital increase was approved on 17 March 2010 in connection with the conferment of 100% of the shares held by Poste
Italiane SpA in Poste Italiane Trasporti SpA. Subsequently, in December 2010, Poste Italiane Trasporti SpA was merged into
SDA Express Courier23.
Then, on 23 June 2010, Kipoint SpA, a 100% SDA Express Courier subsidiary, was incorporated. In November 2010, the
Kipoint Franchising Division of PosteShop SpA was demerged into Kipoint.
One of the most important commercial initiatives undertaken by SDA Express Courier in 2010 was to reposition the
Economy service, launched in 2009 to give businesses an opportunity to boost trade by keeping down shipping costs. The
service is primarily designed for the transport of goods and has introduced Porto Assegnato24 cash on delivery services.
Having obtained a separate licence from the Ministry for Economic Development covering the provision of registered and
insured mail services, but not including administrative and legal process, SDA has launched a specific service offering
various guaranteed delivery Time Definite options (9-hour, 10-hour and 12-hour). These services are accessible from the
website and offer only one single weight and price band (up to 2kg).
Online services
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 2010, 1.8 million of which were for scheduling pick-ups and over 7.7 million for tracking parcels.
Other services available on the company’s website include: branch addresses, areas served, international rate computation,
international shipment times, requests for operating materials, tracking of pick-ups and deliveries, pick-up scheduling,
delivery times and areas where Time Definite services are available.
Other new services were introduced in 2010 that included online shipment release, the service that lets customers provide
instructions for undelivered shipments through the Company’s website, without having to phone the call centre.
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.
The targets for Postacelere and Paccocelere are contractually binding and were established by SDA and the Parent
Company.
23. The legal effectiveness of the merger was deferred to 31 December 2010, whereas the effective date for tax and accounting purposes was backdated
to 1 January 2010.
24. Porto Assegnato is an additional cash on delivery service for the payment of goods on their receipt by the addressee.
2009
2010
Delivery within
Target
Actual
Target
Actual
5 days
94%
97.4%
94%
98.9%
1 day
90%
94.3%
90%
95.0%
3 days
98%
98.7%
98%
99.1%
Standard Parcels
Postacelere Express Delivery
Paccocelere
All products are monitored by an electronic tracking system.
4.1.2 OPERATING RESULTS
MAIL AND PHILATELY
Volumes (‘000)
2009
Revenues (€m)
2010
% inc./(dec.)
2009
2010
% inc./(dec.)
Priority Mail
1,225,295
1,118,398
(8.7)
873
789
(9.6)
Bulk Mail
1,564,006
1,491,702
(4.6)
855
828
(3.2)
Total Unrecorded Mail
2,789,301
2,610,100
(6.4)
1,728
1,617
(6.4)
253,564
245,196
(3.3)
911
934
2.5
33,928
33,006
(2.7)
193
189
(2.1)
287,492
278,202
(3.2)
1,104
1,123
1.7
n/s
n/s
211
211
n/s
Registered Mail
Insured Mail and legal process
Total Recorded Mail
Philatelic products and other basic services
Integrated Services
70,702
74,692
5.6
260
289
11.2
Digital and Multi-channel Services
15,961
14,912
(6.6)
73
66
(9.6)
Direct Marketing
1,256,721
1,267,947
0.9
284
315
10.9
Unaddressed Mail
579,358
684,387
18.1
31
29
(6.5)
Services for Publishers
881,848
673,898
(23.6)
153
192
25.5
Post Office Box rental
8.4
13.0
54.8
Total market revenues
3,852
3,855
0.1
232
224
(3.4)
including Philately and Revenue Stamps
Electoral subsidies
Publisher tariff subsidies
Total Mail and Philately(*)
Postel Group - External revenue
67
67
n/s
220
53
(75.9)
5,881,383
5,604,138
(4.7)
4,139
3,975
(4.0)
-
-
-
217
247
13.8
Certain amounts for 2009 have been reclassified in order to ensure comparability across the two periods.
From 2009 notices of receipt for Registered Mail have been treated separately, with Priority Mail volumes (2009 and 2010) also including these items.
(*)
Overall mail volumes, including items handled by Postel and relating to Promoposta (49 million items), amount to approximately 5.7 billion items at 31
December 2010.
56
As a result of the general contraction of the market, mail volumes were down 4.7%, (5,604 million items handled,
compared with 5,881 million in 2009), whilst revenues were down 4.0%, from 4,139 million euros in 2009 to 3,975 million
euros for 201025.
The fall in volumes was due to 1) the reduction in the volume of Unrecorded Mail (down 6.4% or 179 fewer items handled)
as a result of ongoing recessionary pressure, which has led to a rationalisation of items sent by customers, the digitalisation
of items handled and a further increase in competition; and 2) the reduction of services for publishers which, due to the
change in regulations, declined 23.6% or 208 million items.
Market revenues, before publisher tariff and electoral subsidies (respectively 53 and 67 million euros), appear to be in line
with 2009 (3,855 million euros in 2010 compared with 3,852 million euros in 2009) as the 6.4% decrease in Unrecorded
Mail revenues, from 1,728 million euros in 2009 to 1,617 million euros in 2010, was essentially offset by the increase in
revenues from high value products (integrated services), Recorded Mail and Direct Marketing.
Specifically, Recorded Mail revenues increased 1.7% (up 19 million euros), despite a net 3.2% reduction in volumes with
the increase in Raccomandata1 volumes (up 4.4 million items on 2009) being more than offset by the changes made to
the tariff structure pursuant to Ministry for Economic Development Decree of 19 June 2009, which from the second half
of 2009 has regulated the new Registered Mail and Insured Mail offering.
Integrated Services relating to the delivery of administrative notices and tax demands continue to make a positive
contribution to sector revenues, which increased 5.6% in volume terms (4 million items) and 11.2% in value terms
(revenues up 29 million euros) over 2009.
Revenues for digital and multichannel services were down compared to 2009, due to the fact that the good performance
of the online channel (volumes up 11.1% and revenues up 9.1%) was still not sufficient to offset the decline in more
traditional services, such as telegrams and Certofax. Compared with 2009, there was an overall 6.6% decrease in the
number of items accepted and a 9.6% decrease in revenues.
The volume of Direct Marketing items increased by 11.2 million (up 0.9%), with revenue up 10.9% on 2009 or 31 million euros.
As explained above, the Publishing sector was affected by major regulatory changes in 2010 that resulted in the abolition
of subsidised tariffs for publications from 1 April 2010, which were, subsequently, however, reinstated for charities and
non-profit organisations by Law 73 of 22 May 2010. Final determination of the subsidies was, however, to be established
by a separate Interministerial Decree.
As mentioned above, this resulted in a 23.6% fall in volumes and a 39 million euro increase in market revenues from 153
to 192 million, which, however, was not sufficient to counter the decrease in tariff subsidies (down 167 million euros),
which amounted to 53 million versus the 220 million euros of 2009. There was, consequently, an overall reduction in total
revenues (market revenues and publisher tariff subsidies) of 34% (128 million euros less than 2009).
Government subsidies for election campaign materials were on a par with the previous year (67 million euros).
The Postel Group’s external revenue amounted to 247 million euros (217 million euros in 2009), reflecting the growth
achieved by the Electronic Document Management business (revenues were up from the 24 million euros of 2009 to 32.3
million euros in 2010) and the launch on the external market of a number of e-procurement services previously only
provided to the captive market, the revenues of which increased from 38.3 million euros in 2009 to 72.1 million euros in
2010. This good performance more than offset the downturn in the Mass Printing and Normalisation sectors, which are
always exposed to severe competition.
The increase in revenues was accompanied by a rise in external operating costs, which were up from 268.9 million euros
in 2009 to 307.4 million euros in 2010.
Overall, revenues and operating costs amounted, respectively, to 364.3 million and 334.6 million euros and confirm the
Group’s sound management practices in the face of the unfavourable economic environment. As a result, the Group
reports operating profit of 29.7 million euros (27.1 million euros for 2009) and profit for the year of 13.8 million euros (23.7
million euros for the previous year, which had benefited from the non-recurring effect of franking non-deductible goodwill
from extraordinary transactions recognised in previous years).
25. Including the results of the Philately segment (224 million euros for 2010, compared with 232 million euros for 2009).
Philately revenues included in postal services revenue, including those generated by the sale of Revenue Stamps,
amounted to 224 million euros (232 million euros in 2009). The 2010 Philately Programme included 52 issues with 69
stamps and 3 postcards, with a value of 46.50 euros (52 issues with 77 stamps and 6 postcards, with a value of 66.65
euros in 2009).
EXPRESS DELIVERY AND PARCELS
Volumes (‘000)
2009
2010
Domestic
9,529
International
2,248
Revenues (€m)
% inc./(dec.)
2009
2010 % inc./(dec.)
8,623
(9.5)
94.3
86.8
(8.0)
2,179
(3.1)
37.6
36.2
(3.7)
11,777
10,802
(8.3)
131.9
123.0
(6.7)
31,657
34,330
8.4
219.8
232.6
5.8
2,236
2,420
8.2
17.8
19.2
7.9
Dedicated Services
n/r
n/r
n/a
36.1
34.0
(5.8)
Other revenues
n/r
n/r
n/a
14.0
11.6
(17.1)
Total SDA Express Courier SpA - External revenue
33,893
36,750
8.4
287.7
297.4
3.4
Total Express Delivery
45,670
47,552
4.1
419.6
420.4
0.2
Postacelere
Total Postacelere
Domestic Express Delivery
International Express Delivery
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.
The number of items sent by Express Delivery increased 4.1% from 45.7 million in 2009 to 47.6 million in 2010. This was
due to the success of domestic Express Delivery offered by SDA Express Courier SpA, which handles over 70% of the
segment’s total volume. More in general, the 4.1% increase in the number of items handled translates into a modest 0.2%
increase in revenues or 420.4 million euros in 2010 versus 419.6 million in the previous year as a result of the lower average
price in 2010, compared with 2009.
In detail, there was an 8.3% fall in retail segment Postacelere product volumes with revenues down 6.7% on 2009 due to
the ongoing adverse effect of economic uncertainty on the entire postal sector. The lower volumes primarily affected the
domestic market (down 9.5%), where competition was severe.
As mentioned above, the slight recovery of the Express Delivery sector was made possible by the contribution from the
subsidiary SDA Express Courier SpA, which reports volume and revenue growth of 8.4% and 3.4%, respectively, on
2009. The Company’s total external revenue of 297.4 million euros is up 3.4% on 2009, thanks to the commercial and
marketing initiatives taken during the year to retain existing customers, guaranteeing providing a satisfactory level of
service despite the need to contain operating costs.
The good results were primarily due to domestic Express Delivery, which, with volumes up 8.4%, was able to increase
revenues by 5.8% due to a high-value oriented range of products such as Extra-Large, so that its revenues, after only four
years from its launch on the market, are now 15% (42 million euros) of SDA’s external sales.
International market results were also good with volumes and revenues, up respectively 8.2% and 7.9%, due to the
increase in the number of items handled by UPS in Italy.
Income from Dedicated Services, which are primarily flat rate services offered chiefly to banks, was down by 5.8% as a
result of the sharpening of competition in the sector caused by banks’ cost cutting measures.
Overall, the company earned 407 million euros on the sale of goods and services (392 million in 2009) with cost of goods and
58
services of 376 million euros (366 million in 2009). There was a 35 million euro loss for the year (24 million euro loss for 2009).
Volumes (‘000)
Revenues (€m)
2009
2010
% inc./(dec.)
2009
2010
% inc./(dec.)
Universal Parcels Service
Domestic Parcels
6,952
3,392
(51.2)
22.9
16.2
(29.3)
Parcels - international export
405
450
11.1
15.6
17.7
13.5
Parcels - international import
275
256
(6.9)
Other revenues
Total
7,632
4,098
(46.3)
Publisher tariff subsidies
Total Parcels
7,632
4,098
(46.3)
3.6
3.3
(8.3)
1.5
1.0
(33.3)
43.6
38.2
(12.4)
22.2
4.6
(79.3)
65.8
42.8
(35.0)
Universal Parcels Service revenues, before publisher tariff subsidies, were 38.2 million euros, marking a decline of 12.4%
on 2009. The subsidies decreased 79.3% compared to the previous year due to legislation that modified the tariff system
from 1 April 2010 for the entire publications sector.
OTHER COMPANIES
Mistral Air Srl provides air mail services to Poste Italiane SpA (in conjunction with the Consorzio Logistica Pacchi ScpA)
in addition to air mail, air freight and passenger flights for other customers, in order to cover its overheads.
Operations during the year focused on continuation of the strategic repositioning begun last year. In this context, the new
activities defined in the company’s development plan were stepped up, resulting in an increase in the number of air mail
flights, since it is now the Parent Company’s sole air carrier.
After a slow start, passenger traffic recovered sufficiently to make it necessary in May to lease two Boeing 737’s on a
seasonal basis. The increase in the cost of fuel and the appreciation of the dollar, however, had an adverse effect on
earnings which were negative for the year. Despite an increase in revenues from 51.6 million euros in 2009 to 80.9 million
euros in 2010, the impact of higher fuel costs resulted in an operating loss of 0.8 million euros (operating loss of 2.3 million
euros in 2009).
At the end of the year equity was positive at 1.6 million euros (0.7 million negative equity in 2009) and the company
recorded a loss for the year of 1.5 million euros (2.3 million euro loss for 2009).
Mistral Air also renewed its employment contracts during the year for pilots and flight assistants.
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% by Italia Logistica Srl and 5% by 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 records management services provided by the
consortium member Italia Logistica Srl.
The company, which is held 50:50 by SDA Express Courier and FS Logistica SpA (Italian State Railways Group) provides
integrated and multi-modal logistics services to non-Group companies.
Events marking the year primarily related to the commencement of work on new logistics, document storage and binding
contracts for publishing houses.
The multimodal transport and logistics offering was expanded with the addition of new sea and air routes jointly operated
under commercial agreements with International operators. The company continued to provide logistics services to Fiera
di Milano SpA.
Revenues from sales and services during the year increased from 73 million euros in 2009 to 87 million in 2010, essentially
due to the acquisition of new customers for logistics and document storage services. In line with revenue growth, the cost
of goods and services increased to 82 million euros by year end 2010 (67 million euros for 2009). There was an
improvement in the net result, with the loss for the year down from 5.7 million euros in 2009 to 3.5 million in 2010.
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. 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.
With reference to investment services and the “Markets in Financial instruments” (MiFID) Directive, Poste Italiane has
been providing financial instruments and products in addition to advisory services in all post offices since 19 July. The
commencement of this additional service was the completion of a multi-stage development phase principally consisting of:
• the improvement of knowledge about the customer through the use of new and more detailed profiling questionnaire;
• the development of new documentation and contract and pre-contract information;
• the implementation of procedures and applications for the provision of advisory services;
• the provision of training to over twenty thousand network employees;
• the integration of a system of controls on the procedures used in providing the service.
Directive 2007/64/EC26 of the European Parliament and Council, the Payment Services Directive (PSD), came into force on
1 March 2010, entailing a review by the Company of payment services documents to assure their transparency. The
documents were subsequently distributed to all post offices and posted on Poste Italiane’s website. Also, following the
entry into force of provisional arrangements for direct debits (5 July 2010), the Company’s direct debit procedures,
agreements and forms were revised.
Again with respect to transparency, since 26 May the information sheets for retail customer27 current accounts have, as
required by regulation, included a synthetic cost indicator, calculated according to the criteria established by the Bank of
Italy, and an annual statement for the total cost of managing the account has been developed. The statements were sent
to customers together with the annual account statements for the period ended 31 December.
A joint working group set up in 2010 by the Bank of Italy, the shareholder, the Ministry of the Economy and Finance, and
Poste Italiane SpA, examined the best means for ring fencing capital for BancoPosta, in order to apply prudential
supervision requirements and protect BancoPosta’s creditors. In that connection, the conversion of the Law Decree of 29
26. Directive 2007/64/EC - PSD was transposed into Italian Law by Legislative Decree 11 of 27 January 2010 and became effective on 1 March for credit
transfers and electronic money, whereas the effective date for direct debits and trade collections was 5 July 2010.
27. MiFID identified three categories of investor: “retail clients”, “professional clients” and “eligible counterparties”. “Retail clients” are those parties
requiring a greater degree of protection; they are investors with no experience and do not have the investment expertise of professional clients and eligible
counterparties. All the rules contained in MiFID for the protection of investors are applicable to “retail clients”.
60
December 2010 – the so-called “Milleproroghe” (“Thousand Extensions”) Decree – into law was approved in February
2011. The Law requires Poste Italiane, by shareholder resolution to be approved by 30 June 2011, on the recommendation
of the Board of Directors, to ring fence capital to be used exclusively in relation to BancoPosta’s operations, as governed
by Presidential Decree 144/2001. The capital was to amount to more than 10% of the Company’s Equity. The shareholder
resolution will establish the assets and contractual relations to be included in the ring fence and the rules for its
organisation, management and control.
The Decree also permits Poste Italiane to acquire controlling and non-controlling interests in banks. This provision was
inserted to provide impetus and commitment to the plans to establish the “Banca del Mezzogiorno” (a state-owned bank
established to finance development projects in southern Italy) promoted by the Ministry of the Economy and Finance. It
emerged in the debate regarding the Decree’s conversion into Law that Poste Italiane had been selected for the
implementation of these plans.
Finally, with a view to improving the quality of customer relations, Poste Italiane has continued its association with the
Financial and Banking Mediator, a body accredited by the Ministry of Justice in accordance with Ministerial Decree 180 of
18 October 2010 for mediating in banking, financial and corporate disputes, as an alternative to the courts.
In addition, the Company, which has been expressly identified as one of the intermediaries dealing with BancoPosta, has
participated in the new system since 2009 for reaching out-of-court settlements in disputes that may arise with customers,
called the Financial and Banking Ombudsman, and has provided the relevant information to customers.
The project regarding the prevention of money laundering continued during the year for the:
• strengthening of anti-terrorism controls particularly in connection with statutory and regulatory requirements for the
immediate freezing of funds held by parties included in lists prepared by the European Union;
• revision of the customer questionnaire;
• the computerisation of the reporting system for suspect transactions (exchange of information centre/region) and introduction of new reporting instruments for controls on the effectiveness of the process and structured analysis of events
to be reported;
• introduction of additional and more sophisticated indicators for quick identification of suspect cash transactions and
money transfers based on the frequency/amount/channel involved;
• revision of the computation of customers’ risk profiles and introduction of monitoring in the regions of higher risk customers;
• standardisation of the method of recording new mandatory procedures in the Centralised Computer Archive as required
by the Bank of Italy.
Business Continuity & Disaster Recovery procedures for BancoPosta financial services, which were developed last year,
were further refined in 2010 to meet the Bank of Italy’s more stringent standards on “systemic processes”. The
modifications were examined by the Regulator in the fourth quarter of 2010 with respect to their technical/organisational
aspects in connection with both the security of the information system and details of the protection of financial business
processes.
Finally, honouring a commitment to the Antitrust Authority with respect to the payment of bills28, it also became possible
in the second half of 2010 for businesses to make fully automated payments of road tax and other vehicle-related fees by
direct debit from bank current accounts.
28. On 28 December 2009 the Antitrust Authority completed an investigation into whether Poste Italiane had abused its dominant market position in the
collection and payment services sector, without ruling that an infringement had taken place or imposing any penalty. The Authority accepted, thus making
binding, the undertakings of the Company regarding the payment of bills, including through alternative channels.
In January 2010, ten years from the establishment of the Conto BancoPosta, a new BancoPosta Più product was launched
that consolidates Poste Italiane’s position in the consumer current account market. BancoPosta Più was created to reward
customers who choose BancoPosta as their primary financial partner. By using products linked to their current account
such as the payment of their salary or pension directly to their bank account, direct debits and the new BancoPosta Più
credit card, customers can eliminate current account, Postamat card or credit card fees.
The new offering will enable Poste Italiane to strengthen its position in the market for current accounts, and boost the
loyalty of existing customers by encouraging them to make increased use of their accounts.
Another success for Private transactional products in 2010 was the high usage of Conto BancoPosta Click following the
payment of promotional credit interest of 2% (gross).
In addition to an increase in consumer customers, there was a consolidation during the year of Conto BancoPosta In Proprio
accounts for SMEs, thanks to improved quality and greater customer loyalty. Sales were principally focused on two options:
“In Proprio POS” (for customers intending to use POS to manage sales receipts thus reducing current account fees); and
“In Proprio WEB” (for customers who prefer to autonomously manage their businesses from their PC). This was achieved
through new agreements with various trade associations (including Confindustria, professional bodies, FIVA-Federazione
Italiana dei Venditori Ambulanti) and joint ad hoc promotions with Poste Italiane, such as discounts on the domestic and
international parcels service, the activation of Certified E-mail, personalised mail services and finally mobile telephone price
plans and value added services for SMEs.
As noted above, developments in the electronic money segment included the launch of the BancoPosta Più credit card,
which, in addition to having certain special features that differentiate the card from its competitors (including the option of
either paying off the full balance every month or in instalments; SMS alerts and inclusive insurance cover), is the first
payment instrument to have its own loyalty programme (“Sconti BancoPosta”). This rewards customers with discounts
credited directly to their account.
The loyalty campaign was also extended in the second half of 2010 to Postamat cards associated with both Conto
BancoPosta and Conto BancoPosta Click.
The segment generally continues to be dominated by the Postamat Maestro card (6.3 million cards in December 2010) and
the Postepay standard card (6.8 million prepaid cards in December 2010).
Also Postepay, although still leading the market, has focused on product differentiation and technological innovation that
resulted in the introduction of new cards for different customer segments, including the Postepay NewGift AS Roma and
SS Lazio, prepaid cards as a part of the NewGift series that can be topped up and bear the logos and colours of the two
football teams. Furthermore in 2010, the Company entered the multi-application card market with Postepay Lunch (for
companies desiring to provide staff with luncheon vouchers through prepaid cards) and Postepay&Go that can be used to
board local public transport.
In its second year of operation, the first external top-up channel for Postepay, comprising more than 40 thousand SISAL
betting shops (28 thousand at 31 December 2009), was a great success, with over 10 million cards topped up (3 million in
2009). An additional top-up channel was added at the beginning of December consisting of Banca ITB29 points of sales (over
7,000 tobacconists and betting shops).
A Prontissimo BancoPosta promotion was launched for loan products, enabling customers to obtain loans at below market
rates and raising the maximum loan amounts from 6 to 10 thousand euros and loan terms from 60 to 72 months.
Mutuo BancoPosta Doppio Gusto was launched in June. The product is a mortgage loan satisfying two customer
29. Banca ITB was the first online bank for Italian tobacconists.
62
requirements: transfer of their mortgage from another credit institution to Poste Italiane, while at the same time increasing
the value of the mortgage to pay for renovation work, all with just one mortgage and one monthly payment.
BancoPosta Fotovoltaico was launched in November. It is Poste Italiane’s first loan for the promotion of renewable energy
sources and environmental protection and is offered in partnership with Enel.si.
The number of post offices authorised to sell Quinto BancoPosta was progressively increased in 2010, bringing the total
to approximately 7,500 (1,400 for 2009).
With the aim of launching the new postal savings products in 2010 together with Cassa Depositi e Prestiti, indexed
Interest-bearing Postal Certificates were re-engineered to reconcile the need of issuers to adapt products to current market
conditions with Poste Italiane’s commercial strategies and the need to protect its savings customers.
The 2010 Agreement, governing distribution and management of the administrative and accounting aspects of postal
savings products, was finalised by Poste Italiane and Cassa Depositi e Prestiti in March.
Turning to investment products, in order to counter the on-going climate of uncertainty in the financial markets, the
selection of an issuer for BancoPosta bonds was completed after careful evaluation, which aimed to reduce counterparty
risk whilst obtaining fresh funding.
Royal Bank of Scotland plc was selected for 2010. As a European issuer with the British government as a shareholder, it
provides security and, in addition, higher returns than the market average for analogous securities and government bonds
of the same maturity.
Finally, Poste Italiane participated in Enel Green Power’s IPO from 18 to 29 October. The issuer is the Enel Group company
dedicated to the development and generation of renewable energy. 21,350,000 shares were placed by Poste Italiane SpA.
Online services
BancoPosta Online and Conto BancoPosta Click web banking services, for which, among other things, the strong
authentication of customers was fully introduced, continued to grow in 2010. There were more than one million
online consumer customer accounts by year-end (886 thousand active consumer customer accounts at year-end
2009) and approximately 211 thousand business accounts (183 thousand at year-end 2009).
Online customers executed nearly 16 million transactions in 2010, principally consisting of:
• 3.3 million bills paid by retail customers (2.7 million in 2009) through current account direct debits and
credit/Postepay cards (300 thousand of which using the BancoPosta Click channel);
• 1.7 million bank transfers (1.5 million in 2009), 264 thousand of which using the BancoPosta Click channel (including 14 thousand international transfers);
• 5.2 million telephone top-ups (5.3 million in 2009);
• 4 million Postepay top-ups (3.8 million in 2009);
• 1.4 million giro payments from consumer to business customers (1.1 million in 2009).
Financial products were also a success with customers, with more than 3.5 thousand loans approved and 51
thousand subscriptions to Interest-bearing Postal Certificates.
The new www.postepay.it website was launched during the year with a view to redesigning and enlarging the
Postepay section of www.poste.it, making it more attractive and adding value through interaction with cardholders,
partially through the creation of a web community.
Poste Tutela SpA
Poste Tutela is a private security company providing the following services:
• armoured car transport, security escorts, safe custody, the counting of valuables;
• fixed and mobile surveillance;
• protection of sensitive information.
Consistent with the strategy to exploit the expertise gained in the management, monitoring and control of
security services provided only to Group companies, the Company now provides these services to non-Group
companies.
PosteTutela’s provision of secure, logistics services to non-Group companies has provided important commercial
relationships, thus cementing its market position. The provision of these new services was successful with
revenue from sales and services of 80 million euros (79 million for 2009) and a profit of 971 thousand euros (771
thousand euros in 2009), reflecting the increase in the transport of valuables during the year.
BancoPosta
Revenues
(€m)
2009
2010
% inc./(dec.)
Current accounts
Bills
Income from investment of customer deposits
Other revenues from current accounts and prepaid cards
Money transfers(*)
Postal savings and investment
Postal Savings Books and Certificates
Government securities
Equities and bonds
Insurance policies
Investment funds
Securities deposits
Delegated services
Loan products
2,537
641
1,320
576
78
2,004
1,600
8
151
218
2
25
202
181
2,580
622
1,376
582
77
1,891
1,557
7
19
283
2
23
195
185
1.7
(3.0)
4.2
1.0
(1.3)
(5.6)
(2.7)
(12.5)
(87.4)
29.8
n/s
(8.0)
(3.5)
2.2
37
34
(8.1)
5,039
4,962
(1.5)
31 Dec 2009
31 Dec 2010
% inc./(dec.)
34,741
91,120
192,618
35,949
97,656
198,489
3.5
7.2
3.0
Other products(**)
Total Revenues
Certain amounts for 2009 have been reclassified in order to ensure comparability across the two periods.
(*)
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
Postal Savings Books(**)
(*)
(*)
(**)
Average deposits for the period.
Deposits include accrued interest for the year.
64
Number of transactions
('000)
Bills processed
Domestic postal orders
International postal orders
Inbound
Outbound
Pensions and other standing orders
Tax services
2009
2010
% inc./(dec.)
564,289
8,647
3,230
1,745
1,485
87,461
11,531
555,350
7,876
3,235
1,719
1,516
86,695
12,191
(1.6)
(8.9)
0.2
(1.5)
2.1
(0.9)
5.7
31 Dec 2009
31 Dec 2010
% inc./(dec.)
5,526
340
6,210
5,593
5,533
379
6,261
6,794
0.1
11.5
0.8
21.5
Volumes
('000)
Number
Number
Number
Number
(*)
of
of
of
of
customer current accounts
credit cards
debit cards(*)
prepaid cards
Including office cards.
BancoPosta service revenues declined 1.5% from 5,039 million euros in 2009 to 4,962 million euros in 2010, with the 43
million euro increase in current account revenues unable to offset the 113 million euro fall in postal savings and investment
revenues.
In detail, current account revenues increased 1.7% over 2009 due to the 4.2% increase in income from the investment of
current account deposits from 1,320 million euros in 2009 to 1,376 million euros in 2010, reflecting both a 3.5% increase
in average deposits (34.7 billion euros in 2009, compared with 35.9 billion euros for 2010), and the contribution of income
from the investment in securities of private customers’ current account deposits.
Revenues on bill payments was down 3% compared to the previous year, decreasing from 641 million euros in 2009 to
622 million euros for 2010 as a result of the fall in the number of bill payments during the year (564 million euros in 2009
versus 555 million euros in 2010).
Other revenues from current accounts rose from 576 million euros in 2009 to 582 million euros in 2010, due to increased
use of electronic money and the consequent fee revenue on the issue and use of prepaid cards (88 million euros in 2010
against 74 million euros in 2009). This trend was bolstered by a number of promotions encouraging the procurement and
use of new electronic payment instruments.
Revenues from Money transfers were down 1.3%, reflecting a decline in the volume of international transactions (Eurogiro
and Moneygram), which decreased 6.7% from 22.4 million euros in 2009 to 20.9 million euros in 2010, partly because of
new agreements with Moneygram resulting in a decrease in fees. Revenues in the domestic segment (Domestic postal
orders) were in line with 2009 (56 million euros in both years).
The sale of Interest-bearing Postal Certificates and inflows of Postal Savings Books funds, the income on which is linked
to a mechanism agreed with Cassa Depositi e Prestiti SpA tied to the achievement of net savings inflow targets,
contributed 1,557 million euros to BancoPosta services revenues (1,600 million euros in 2009) compared with net inflows
of 2.6 billion euros (5.5 billion euros in 2009).
In detail, total Postal Savings Books deposits were 97.7 billion euros at 31 December 2010, up 7.2 % on the 91.1 billion
euros at 31 December 2009, whilst Interest-bearing Postal Certificates in issue amounted to 198.5 billion euros (192.6
billion euros at the end of 2009).
Notwithstanding the strong performance of the insurance brokerage business (283 million euros in revenue in 2010
compared to 218 million euros for 2009), asset and fund management revenue30 fell 17.3% (revenues down from 404
million euros in 2009 to 334 million euros in 2010) due both to the lower volume of business and the change in the
Company’s orientation to a lower risk profile. Stock and bond subscriptions were down 82% (0.755 billion euros in 2010
versus 4.2 billion euros in 2009), with fee income falling 87.4% to 19 million euros in 2010 from 151 million euros for 2009.
Revenues from Delegated services amounted to 195 million euros (202 million euros in 2009), with fees for the payment
of INPS (National Social Insurance Institute) pensions totalling 108 million euros (107 million euros in 2009), and INPDAP
pensions totalling 13 million euros (16 million euros in 2009).
Revenues from the distribution of loan products31 were up 2.2% (181 million euros for 2009, compared with 185 million
euros 2010). In detail, personal loan disbursement fees amounted to 138.5 million euros (144 million euros in 2009) with
disbursements totalling 1,638 million euros (1,568 million in 2009), whilst fees on outstanding mortgages amounted to 15.3
million euros (13.6 million euros in 2009) on mortgage disbursements of 835 million euros (915 million euros in 2009).
4.3 INSURANCE SERVICES
The insurance business is run by Poste Vita SpA, a wholly owned subsidiary of Poste Italiane SpA, and Poste Assicura, a
wholly owned subsidiary of Poste Vita SpA.
Poste Vita SpA is permitted to engage 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, the new wholly owned subsidiary of Poste Vita, began operating in April. This company 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, to which is added Postaprotezione Piccola Impresa, a
multi-risk policy for small businesses, professionals and traders. As a result of the formation of the new company, Poste
Vita is now the Parent of the Postevita Insurance Group, a registered insurance group.
As a result of the change in regulations in 2010, activities assuring the Company’s compliance with the new requirements
under Solvency II32 (which will come into force in October 2012) proceeded during the year.
In response 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), the Company provided ISVAP with its observations and
clarifications regarding certain matters addressed by the report, in addition to information on the measures either already
introduced or which will be introduced in the future to assure the ongoing evolution and improvement of its operations.
In July 2010, ISVAP served a statement of charges on the Company which, with numerous initial critical findings, set out
a certain number of alleged violations together with the theoretical sanctions provided for by the relevant articles of the
Insurance Code. The Company submitted detailed responses in defence to ISVAP which, once examined, will determine
the final sanction or dismiss the charges.
30. Asset and fund management includes the distribution of government securities, equities, bonds, insurance policies, mutual investment funds and
commissions on safe custody accounts.
31. Personal loans, mortgages, overdrafts and credit protection.
32. 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.
66
With respect to the 2006 Budget Law regarding “dormant policies”, the entry into force of Law 73 of 22 May 2010, which
converted Law Decree 40/2010 (under which the obligation to report and subsequently pay any related amounts to the
Ministry of the Economy and Finance did not apply to policies for which the rights had expired before 28 October 2008),
has enabled the company to resolve disputes regarding customers’ policies that had expired prior to the entry into force
of Law 166 of 27 October 200833. Law Decree 40/2010, however, did not fully resolve the problem since the parties, for
whom the short expiry period was subsequent to October 2008, are the beneficiaries of policies that required Poste Vita’s
waiver of a short expiry period. The Company, consequently, approved additional measures that included a new information
campaign on insurance regulatory requirements by an announcement in the press and direct notifications, as well as the
payment of policies that effectively expired in the meantime, i.e., during the communication process.
Moreover with respect to dormant policies, on 30 June 2010 the Italian Antitrust Authority began an investigation of the
company (PS3989) pursuant to Legislative Decree 206/2005, alleging that it had used unfair commercial practices in
omitting information to customers regarding dormant policies. The Company undertook, within the meaning of art. 27,
paragraph 7 of Legislative Decree 206/2005, in July 2010 in that respect to either disseminate or complete the
dissemination of the relevant information to customers, in addition to paying those policies which had expired in the
meantime for which applications had been made no later than September. As a result of the above, the Antitrust Authority
approved the acceptance of the Company’s undertakings by resolution of 15 December, thus closing the proceedings
without determining that there had actually been a violation.
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 team of inspectors left the company’s
premises on 16 November 2010 and the documentation gathered during the inspection is currently being examined.
The “Postafuturo dinamico” policies issued in July 2000 fell due in July 2010. These policies provided, under certain
circumstances, for the revaluation of premiums paid with respect to the returns of the “Dynamic” fund that was
specifically separated from the other assets of Posta Vita in accordance with ISVAP Circular 71 of 26 March 1987.
Due to the fact that the circumstances for which the fund was established were no longer relevant, the closure of the
separate fund was approved by the Board of Directors.
The Postevita Group continued to focus on its customers’ welfare in 2010 by offering products with a high insurance
content in connection with savings, welfare and social security. The range of investment products was broadened in 2010
by the addition of three new Branch III products (financial/insurance products) to the existing range of Branch I products.
The new Branch III products are constructed in such a way that, whilst maximising return on investment, they provide all
of the benefits of a Postevita guarantee thus protecting customers from market risk. This guarantee was a success with
customers with this type of policy representing approximately 31% of all premiums written by the Company in 2010.
In addition to the development of new Branch III guaranteed products, research and development also focused on the
development of proprietary products for the protection of mortgages and personal loans. In parallel with Poste Assicura’s
complementary products, two single premium PPI (Payment Protection Insurance) policies were introduced to the market;
the policies insure the decease of the borrower of a post office mortgage or personal loan. In only nine months of
operations, a total of 60 thousand policies were issued.
33. Law 166/08 requires amounts payable to the beneficiaries of insurance policies that remain unclaimed at the end of the two-year expiry period (dormant
policies) provided for by art. 2952 of the Italian Civil Code to be paid into the protection fund for the victims of financial fraud.
With respect to its investment policies in 2010, the Company maintained segregated asset management policy in order to
increasingly tailor investments to its insurance obligations and, at the same time, run a portfolio that can provide stable
returns in line with its main competitors. The investment policy, partially because of market dynamics, was marked by
maximum prudence with the portfolio primarily invested in government bonds and highly rated corporate bonds.
With earned premiums of 9,501 million euros (7,091 million euros in 2009), Poste Vita achieved record turnover in 2010.
The 34% growth for 2010, following on the heels of the 28.4% for 2009, means that in just two years Poste Vita has grown
by more than 70%, increasing its market share by almost two percentage points to just under 11% in 2010.
Nearly 65% of new premiums written during the year relate to Life Branches I and V (6,535 million euros in 2010 versus
6,196 million in 2009). This inflow into individual pension plans, although less in absolute terms, is significant. In terms of
new policies sold, the Company increased business by almost 110% in 2010, with over 105 thousand new polices for
Postaprevidenza Valore pensions.
The decision to provide adequate cover to customers in connection with Branch III projects generated good results even
in this segment with earned premiums of 2,959 million euros (893 million euros in 2009).
Due to the growth in 2010, technical provisions, computed by analysis of each contract in compliance with relevant
legislation and based on suitable actuarial assumptions, total 43.2 billion euros, marking an increase of approximately 16%
on the 37.2 billion euros registered in 2009.
Non-life and life technical provisions amount to 32.4 billion euros (27.0 billion euros in 2009), accounting for 75% of total
provisions. These provisions were made to cover all the Company’s obligations and include mathematical provisions of 32
billion euros (26.8 billion euros in 2009), outstanding claims provisions of 332.5 million euros (122 million euros in 2009),
primarily relating to policies that fell due at the end of December, the beneficiaries of which were paid in January, and other
technical provisions of 88 million euros (84 million euros in 2009).
Technical provisions for Branch III products totalled 10.7 billion euros, up on 10.1 billion euros at the beginning of the year
and representing 25% of total provisions.
Technical provisions for “accident and medical” products are 3.5 million euros (2 million euros in 2009).
Class C assets, which are intended to cover contractual obligations to policyholders, increased from 27.2 billion euros at
the beginning of the year to 32.8 billion euros at 31 December 2010. 75% are treasury bonds, 17% high-grade corporate
bonds, with a non-current component amounting to around 60%, including 49% in treasury bonds, 7% in UCITS with
guaranteed capital and the remaining 3% in corporate bonds.
In nine months in operation, Poste Assicura SpA issued a total of approximately 179 thousand policies, resulting in portfolio
premiums of 24.7 million euros. Due to the nature of Poste Assicura’s portfolio, 95% of which is for the protection of
property and assets and personal protection, the premiums on which are paid in monthly instalments, total earned
premiums amount to approximately 17.1 million euros, which after allowing for the changes in premium provisions
correspond to approximately 9.5 million euros in earned premiums.
68
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, EGI SpA, Postecom SpA, PosteShop SpA, Poste Link Scrl and
Poste Energia SpA.
Poste Italiane SpA
Public services
By taking advantage of the customer contact opportunities provided by its Sportello Amico network and the PosteGov
platform, Poste Italiane continues to promote itself as a conduit to bring the Public Sector closer to the general public, and
as an integrated partner in the design and operation of complex project management functions enabling Central and Local
Government entities to expedite and simplify their administrative processes. A PostaCertificat@ service was developed in
this connection for the opening of certified electronic mail accounts free of charge on presentation of proof of identity. This
makes it possible to interact with the Public Sector without having to go to the relevant office in person.
The internet site www.StradeComuni.it was also launched during the year which provides Italian townships with a
database of 950 thousand roads and 15 million street addresses to update their records with Poste Italiane’s postal
addresses. This electronic street directory is organised, standardised and continually revised in order to permit townships
to work with a compendium of place names.
A two-year memorandum of understanding was signed with the Municipality of Rome in September for the development
of a programme of e-government services regarding registrar services, identity cards, local taxation, multi-service cards,
local controls and the possibility for the capital’s inhabitants to use Rome’s 200 post offices to apply for registrar’s
certificates.
BancoPosta Fondi SpA SGR
BancoPosta Fondi SpA SGR is the Poste Italiane group company engaged in the mutual funds business (promotion of
BancoPosta funds and marketing third-party funds) and Individual Investment Portfolio management.
Continuing the growing trend of recent years, it launched two Italian-registered guaranteed mutual funds in 2010,
BancoPosta Trend and BancoPosta STEP, as part of its portfolio of proprietary investment funds.
Corporate policy has assured sound results in terms of customer response. In fact, Assogestioni’s Asset Management Map
for the third quarter of 2010 regarding proprietary funds and Individual Investment Fund management ranked BancoPosta
Fondi as 17th out of over 74 Italian operators, with a market share of 1.29%, whereas in terms of Individual Investment
Fund management alone, BancoPosta Fondi was ranked tenth out of over 40 operators, with a market share of 2.6%.
PosteMobile SpA
PosteMobile SpA is an MVNO (Mobile Virtual Network Operator). It operates in the telecommunications sector as a mobile
Enhanced Service Provider.
In 2010, the company became increasingly engaged in all the activities needed to develop its market share through the
expansion of its customer base. The number of SIM cards sold during the year was 776 thousand, 724 thousand of which
to consumers and 52 thousand to businesses (670 thousand sold in the previous year, with 643 thousand to consumers
and 27 thousand to businesses).
Products offered to consumers were intended to strengthen the high-value strategy through measures designed to
promote purchases of MNP - Mobile Number Portability such as “Promo under 25” and “Over 60” (promotions that include
the offer of free traffic to anyone activating MNP under the age of 25 in the first case, and over 60 in the second), the
introduction of recurring top-up promotions such as the “Superconvenienza” promotion, which offers an economical
monthly rate for portability of 1.90 euros and is reduced to zero when the customer tops-up.
The range of value added services offered in 2010 saw a major evolution of the company’s position in the mobile telephone
payment services market. 12.3 million financial transactions were carried out by customers (up 69% on 2009), 5.1 million
of which were payments (77% more than in 2009). The value of transactions in 2010 totalled 138 million euros (up 91%
on 2009), with approximately one million customers linking their SIM card to a payment tool, representing 58% of all
customers (1.7 million lines at the end of 2010 versus 1 million for 2009).
Again with respect to value added services, the company consolidated its position in the mobile commerce market in 2010
by concluding agreements with major companies offering differing types of products. The agreements mean that
customers can now purchase products such as books, DVDs or mobile telephones directly over the internet. For the first
time in Italy, SIM cards can now be used for payments and e-commerce in absolute security in an extremely easy manner.
Turning to the statutory and regulatory framework, the telecommunications regulator, Autorità per le Garanzie nelle
Comunicazioni (“AGCOM”) approved resolution 74/10/CIR “Amendment to the Numbering Plan pursuant to Resolution
26/08/CIR, as amended” published on 2 December, making it also possible for virtual operators to be allocated numbers
for mobile telephone services. The new regulations now make it possible for PosteMobile, as a virtual operator, to be
assigned numbers and network codes for mobile and personal telecommunications. This will provide greater autonomy in
future for the development of business strategies.
Finally, in July 2010 the company signed a framework agreement for the provision of premium services in “decade 4” using
SMS and MMS and other types of data transmission34. The aim is to provide customers, among other things, with the ability
to access and use premium charge numbers in decade 4 assigned to mobile service providers.
Europa Gestioni Immobiliari SpA
The company operates in the real estate sector for the management and development of 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 building at the corner of via Orefici and piazza Cordusio in Milan, which had been leased to the Parent Company, was sold
at public auction and tenancy agreements for the building in via 1 Maggio in Pontedera were renegotiated during the year.
The tax authorities initiated a limited audit of the company on 22 December 2010 for the examination of accounting entries
regarding income taxes, IRAP and VAT in connection with certain items in the tax declarations for the 2008 tax year.
Postecom SpA
Postecom SpA is the Poste Italiane group company engaged in technological innovation specialised 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, 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.
34. Decade numbers denote services provided. Services beginning with 4 include donations, remote voting, obtaining content for cell phones (ring tones,
wallpapers, videos, music), and subscriptions to news and other services.
70
The IT sector, which in recent years has reflected the cautious approach adopted, above all with regard to investment,
continues to show no signs of recovery. ICT (Information & Communication Technology) cost cutting means that budgets
must be kept under control to rein in costs, thus limiting purchases of new systems and resulting in the renegotiation of
existing contracts.
The Public Sector is continuing with the 2012 e-Government Plans of the Ministry for the Public Administration and
Innovation, with the aim of modernising government and making it more transparent and efficient through technically and
organisationally innovative tools. In that context, the “CEC-PAC” service was started during the year, which was made
possible by the new Postacertificat@ service platform.
PosteShop SpA
PosteShop SpA is the Group company that distributes commercial products and services in post offices either through
direct or catalogue sales of stationery and the merchandising by Poste Italiane of books, CD, and other products. The
Company also runs 214 “Shop in Shop” outlets, which are actual shops set up in the public area of main post offices, web
www.posteshop.it, a telephone sales group and the MondoBanco Posta channel.
Products were also sold through a network of franchised Kipoint sales outlets until October 2010. On 25 October 2010,
however, the sale of the Kipoint Franchising Division by PosteShop to Kipoint SpA was finalised.
This business was marked by a series of initiatives designed to rationalise its product range, reorganise its sales channels
and introduce new commercial initiatives. This involved a review of the segmentation of traditional post offices, reducing
the offering in underperforming offices and progressively replacing “Shop in Shop” outlets deemed to have poor
commercial potential with outlets benefitting from greater customer traffic.
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 imposed a fine of 100 thousand euros on the company.
PosteShop appealed the ruling before Lazio Regional Administrative Court, requesting an immediate injunction suspending
payment. On 7 July 2010 Lazio Regional Administrative Court turned down the request for an injunction, in view of the
complexity of the issue and bearing in mind that the conditions attached to the fine imposed do not exclude the possibility
of recovery.
Poste Link Scrl
The company is a limited liability consortium, which acts on its own behalf and in the interests of consortium partners
(Poste Italiane SpA, Postecom SpA and Postel SpA), providing IT, electronic document management, internet, contact
centre and direct marketing services.
As part of a broader reorganisation of the Group’s customer services, which commenced a few years ago, the mergers,
pursuant to art. 2501 et seq. of the Italian Civil Code, of Consorzio Poste Contact with and into Postelink and of Postevoice
SpA with and into Postelink were completed in February 2010 and June 2010, respectively.
As a result of these mergers, the company has taken over responsibility for the call centre services previously handled by
Poste Voice and Poste Contact, including: the UCO (Ufficio Centrale Operativo) call centre service supplied on behalf of
the Ministry of Transport, which provides information and help regarding driving licence points, duplicate licences and car
ownership documents and changes in address, or the service carried out for ENPAPI (Ente Previdenziale Professione
Infermieristica), the body that manages the nurses’ pension fund.
Poste Energia SpA
Poste Energia is a Group company providing electrical energy to the national grid for the Parent Company and the
subsidiaries SDA Express Courier and Europa Gestioni Immobiliari.
Poste Energia provided power procurement advisory services to Postel and its subsidiary, Docutel, because of their unusual
pattern of power consumption caused by production scheduling and a limited number of offtake points. The advisory
services entail sales analyses and power consumption reports at 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.
Global Cyber Security Centre Foundation
Aware of the importance of issues regarding the security of IT and telecommunications networks, which are increasingly
subject to attack or attempts at hacking, Poste Italiane promoted the establishment of an international non-profit
foundation, the Global Cyber Security Centre, the purpose of which is to promote and carry out studies, research,
projects and initiatives relating to cyber security.
The Centre’s aim is to play a leading role at International level in the fight against Cyber Crime and in the prevention of IT and
digital security threats. The first two projects were started into 2010 in connection with critical infrastructure and networks.
Total customer assets of the company’s lines of business at 31 December 2010 amount to 16.1 billion euros (14.7 billion
euros at the end of 2009). In detail, third-party assets in mutual funds amount to 3,629 million euros (3,472 million at the
end of 2009), whereas Individual Investment Portfolio assets managed for the insurance company, Poste Vita, amount to
12,484 million euros (11,203 million euros at 31 December 2009).
Gross inflows into the Company’s mutual funds in 2010 amounts to 934 million euros (897 million euros in 2009), up 4%
on the previous year. Redemptions amount to 839 million euros, which was 583 million or 44% more than 2009. The
momentum of gross inflows and redemptions results in a net inflow of 95 million euros, compared with a net inflow of
314 million euros in 2009, a 70% decrease.
In terms of composition, the largest component of gross inflows for 2010 was bond funds (427 million euros or 46% of
the total inflow), followed by flexible funds (325 million euros or 35% of total inflow) and balanced funds (114 million
euros or 12% of total inflow). Otherwise, customers were attracted to equity funds (68 million euros or 7% of the total
inflow). Redemptions were concentrated in bond funds (64% of the total).
The gross inflow into Individual Investment Management was 1,887 million euros (5,720 million euros in 2009) with a net
inflow of 1,411 million euros (5,620 million euros in 2009).
PosteMobile SpA
2010 was the year in which PosteMobile was able to consolidate its earnings and achieve substantial financial
independence. Revenues from sales and services increased 75% (171.9 million euros versus 98.2 million euros in 2009),
evidencing a significant growth trend in all business segments. Voice traffic, with revenue of 136 million euros (75 million
euros in 2009), was the leading segment due to the expansion of the customer base and the increase in traffic volumes.
The cost of goods and services moved in line with revenue, increasing as a result of higher traffic, from 90.1 million
euros in 2009 to 140.7 million in 2010.
The company’s performance meant that it gained its financial independence by breaking even and earning an operating
profit of 9.5 million euros (an 8 million euro operating loss in 2009) and profit for the year of 5.5 million euros (a 6.8
million euro loss for the previous year).
72
Results for the year were good due to the sale of two properties for 39.2 million euros, on which the company realised
gains of 21.9 million euros (37.6 million euros at consolidated level). Rental income was 18.6 million euros (20.2 million
euros in 2009). Work amounting to 1.98 million euros (excluding technical consultancy) was either started or continued
during the year, on the restructuring of properties. Profit for the year was 18.3 million euros (19.9 million euros in 2009).
Postecom SpA
Revenues from sales and services amounted to 75.4 million euros, marking an increase of 32.7% on the previous year
(56.8 million euros in 2009). The increase was essentially due to the development and provision of information services
on the web for Group companies, which increased 55% during the year and now represent 60% of total revenue (51%
in 2009). Despite the significant increase in turnover, a loss of 1.1 million was incurred for the year (a 1.6 million euro
loss in 2009). The loss was partially caused by provisions and impairments in expectation of a reduction in the
profitability of projects started in 2009.
PosteShop SpA
The rationalisation of the offering through the network resulted in an 8.7% decline in revenues from sales and services
(53.9 million euros in 2010, compared with 59 million euros in 2009). This was accompanied by a 9.4% fall in the cost
of goods and services (51.6 million euros in 2010, compared with 57 million euros for 2009). The company reported an
overall operating loss of 2.3 million euros, compared with an operating loss of 1.4 million euros in 2009.
Poste Link Scrl
Although a profit was earned in 2010, it was less than the previous year and primarily attributable to the INPS-INAIL
contract, which was completed on 26 September 2010. Revenues from sales and services amounted to 26 million euros
(29 million euros in 2009), 23 million euros of which related to the contract. There was a 3.3 million euros profit for the
year (5.2 million euros for 2009).
Poste Energia SpA
The company’s revenues from sales and services increased in 2010 from 72 million euros in 2009 to 74.5 million,
reflecting the Group’s increased energy requirements. Production costs also increased from 71.4 million euros in 2009
to 74.3 million euros in 2010. The company incurred costs of 239 thousand euros hiring staff that had been employed
at the Parent Company until 2009.
Profit for the year is 78 thousand euros (377 thousand euro in 2009).
4. Areas of business 5. Distribution channels 73
5. DISTRIBUTION CHANNELS
Numerous channels have been dedicated to customer contact over the years: Counters, Consulting Rooms,
PosteShop, the PosteImpresa network, the Contact Centre, the website and screen based systems. All of these aim
to achieve the common objectives of improving process efficiency, product innovation, service quality and customer
relations in order to meet all customer needs through a complete and integrated range of products and services.
Sales channels and contact with retail customers, small to medium sized enterprises (SMEs) and certain Local
Government entities are the responsibility of the Retail Market function, whereas the Large Accounts and Public
Sector function is responsible for the development of business with large corporate customers and other Public
Sector entities, in addition to Central Government.
5.1 RETAIL/SME
The Company is strongly committed to the continuing improvement of service quality and customer relationships, in
other words: the professionalism of those persons interacting with customers on a daily basis in post offices;
technological reliability and speed; and the completeness and transparency of the information provided.
To achieve this, activities, in addition to training, included improvement of the customer experience at post offices
through queue management (more than 2,860 systems in operation at 31 December 2010 versus the 2,600 for 2009)
and the installation of approximately 500 new ATMs, bringing the total number to around 6,000 nationwide.
Separate Postamat windows have also been introduced in post offices. As of 31 December 2010, 2,609 post offices
have Postamat tills (2,491 as of 31 December 2010), with a total of 3,594 counters reserved for BancoPosta current
account holders (3,434 as of 31 December 2009).
Activities continued during the year aimed at taking advantage of the flexibility provided by the National Collective
Labour Contract, with a view to bringing the opening times of the Company’s retail and PosteImpresa offices into
line with customer needs and market trends. This resulted in the conversion of PosteImpresa counters for
conventional services.
At 31 December 2010, the PosteImpresa channel comprised 241 PosteImpresa Offices and 243 Specialist Areas and
it continues to play an important role in developing business with SMEs. In this connection, the number of PT-Impresa
customers has increased to 700 thousand at 31 December 2010, versus 675 thousand at 31 December 2009.
74
5.2 BUSINESS AND PUBLIC SECTOR
During the period the Company stepped up customer management and development in all phases of the
marketing process (pre-sales, sales and after-sales), with the aim of maintaining business volumes with large
accounts, and increasing sales of innovative services.
With regard to the Large Accounts segment, attention was focused on offering innovative services designed to
improve payment and dematerialisation processes, generating a real commitment to cooperation between the
customer and the Group.
A number of business development initiatives aimed at the Public Sector were further developed during the
period, with the aim of exploiting new opportunities in the integrated services market. These include:
• continuation of the PosteGov project, designed to provide Public Sector services via Poste Italiane’s different channels;
• a new agreement designed to support the Ministry for Economic Development’s Department for Business
Incentives in providing incentives to promote energy efficiency initiatives, green projects and occupational safety in implementation of the interministerial “incentives” decree of 6 April 2010;
• as already mentioned in the section on the results of operations of Postal Services, the new “CEC-PAC” service has
been launched with the aim of offering the general public a new means of communicating with central government.
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 23 million contacts
during the first half, 85% 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 PosteShop products;
assistance to the sales network regarding PosteMobile products.
The most important initiatives during the period include:
• the addition of further support for the post office network through: adoption of a new IVR (Interactive Voice
Response) system for identifying and handling requests for assistance; stock management support; support for
loan products and PosteMobile services;
• extension of the range of customer services provided for BancoPosta. Support was provided during the launch
of the new Conto BancoPosta Più account, thanks to creation of a special section focusing on the offering,
whilst a service that enables customers to request a new debit card over the phone, after their card has been
demagnetised and/or damaged, was launched, alongside a service that allows customers to track delivery of
the card and the related PIN number;
• activation of a new service providing assistance to customers and post offices regarding Poste Assicura products;
• the integration of the contact centre and the operations units processing financial products and services in
order to improve and add to after-sales services.
The Contact Centre also supported the Ministry for Economic Development in the campaign to stimulate
consumption. The Company made its technology infrastructure and a special phone number available to
consumers and businesses to provide information on how to gain access to the incentives. Poste Italiane was
assigned responsibility for managing the entire process involved in paying the grants: from receipt of applications
and the paper documentation, with the related optical storage, to assessment of the right to benefit from the
incentives, checks on the application and on the supporting documentation, determination of the amount
available for individual initiatives, and preparation for payment of the incentives granted.
5. Distribution channels 75
Commercial services offered on the internet at www.poste.it continue to be very successful, with over 6 million
registered customers (4.8 million at the end of 2009). The site, in addition to playing a major role in creating and
consolidating the Company’s corporate image, has gradually increased its importance as a channel for providing
the Group’s products and services, in part thanks to development of the platform for integrated and secure
electronic payments.
76
6. HUMAN RESOURCES
6.1 HEADCOUNT
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
2009
741
14,703
129,616
6,206
2010
718
14,752
128,505
5,474
31 Dec 2009
714
14,539
126,705
6,164
31 Dec 2010
717
14,538
125,953
4,357
Total workforce on permanent contracts
151,266
149,449
148,122
145,565
139
36
42
33
79
41
34
32
151,441
149,524
148,242
145,631
Traineeships
Apprenticeships
Total
Average
Flexible workforce
2009
2010
Temporary contracts
Fixed-term contracts
135
2,621
125
2,195
Total
2,756
2,320
154,197
151,844
Total permanent and flexible workforce
(*)
All workforce data is expressed in full-time equivalent terms.
6. Human Resources 77
Poste Italiane SpA
Number of employees(*)
Average
Permanent workforce
End of reporting period
2009
2010
31 Dec 2009
31 Dec 2010
Senior managers
Middle managers - A1
Middle managers - A2
Grades B, C, D
Grades E, F
627
5,750
8,119
127,487
6,143
597
5,725
8,081
126,294
5,419
602
5,663
8,010
124,520
6,107
584
5,705
7,844
123,727
4,311
Total workforce on permanent contracts(**)
148,126
146,116
144,902
142,171
98
-
23
-
60
-
12
-
148,224
146,139
144,962
142,183
27
2,096
120
15
2,126
76
15
2,063
103
14
2,190
34
Traineeships
Apprenticeships
Total
(**)
including:
- Seconded
- Suspended without pay
- Seconded to Group companies
Average
Flexible workforce
2009
2010
Temporary contracts
Fixed-term contracts
9
2,560
11
2,081
Total
2,569
2,092
150,793
148,231
Total permanent and flexible workforce
(*)
All workforce data is expressed in full-time equivalent terms.
78
6.2 TRAINING AND CORPORATE SOCIAL RESPONSIBILITY
There was a sharp focus last year on supporting business initiatives and meeting the training needs arising from staff
appraisals and inspections, with regard to current operations and the launch of innovative future projects.
Funding
Much attention was given to the determination and improvement of access to finance for training and the
improvement of both internal procedures and those shared with the labour unions.
89 projects were submitted to the Ente Bilaterale per la Formazione e Riqualificazione del Personale (the Bilateral Agency
for Staff Training and Retraining) with a view to obtaining funding from Fondimpresa (the Enterprise Fund) and the
Fondo di Solidarietà (the Solidarity Fund). The result was the signature of six agreements covering 65 different projects.
In addition to legally required training, primarily with respect to health and safety, the parties shared plans for
occupational retraining, particularly with respect to employees working in post offices and the Postal Services segment.
The Company endeavoured to fully exploit the existing funds available in 2010 in order to maximise self-financing. This
led to impressive results in terms of the recovery of costs: 8.5 million euros was obtained from and applications for
funding worth over 12.1 million euros were submitted to the Solidarity Fund; funding of 0.9 million euros was provided
by Fondimpresa; statements of 25 thousand euros were approved and funding of 350 thousand euros was applied for
to the European Social Fund.
In an attempt to diversify the sources of finance, investee companies’ association with Interprofessional Funds was
promoted, with their involvement meaning that the funds will remain within the Group.
Training
Training activities in 2010 primarily focused on:
• the diffusion, development and consolidation of a management culture, above all with regard to line functions;
• technical and professional refresher courses in line with the need to support product innovation and the adoption of
new technologies within the Company;
• improvement of commercial skills;
• the integration of objectives regarding the compliance, commercial performance and operational quality needed for
MiFID. E-learning and classroom courses for post office staff will enable them to acquire the skills needed to launch
the advisory services in accordance with the timing required under the directive.
370 thousand person days of training were provided during the year, 268 thousand of which in classrooms and 102
thousand in the form of e-learning. There were 13 new online courses involving 123 thousand employees, giving a total
of 541 thousand participants and an average of 4 courses per person. There was a total of 734 thousand hours of online
courses, split between various organisational units and staff levels as shown in the table below:
Classroom courses (person days)
31 Dec 2009
Grades
B-C-D-E-F
Postal Services
Retail Market/LAPS
Central functions
Total
Total
(A1 and A2)
Grades
Middle
managers
B-C-D-E-F
(A1 and A2)
Senior
managers
Total
29,217
1,709
75
31,001
43,614
3,029
156
46,799
193
43
22
258
146
149
33
328
117,086
43,366
1,452
161,904
151,118
61,421
1,248
213,787
2,059
2,294
152
4,505
2,272
4,467
261
7,000
148,555
47,412
1,701
197,668
197,150
69,066
1,698
267,914
Financial Services
(*)
31 Dec 2010
Middle
Senior
managers managers
E-learning courses (hours)
31 Dec 2009
Grades
B-C-D-E-F
Postal Services
31 Dec 2010
Middle
Senior
managers managers
Total
(A1 and A2)
Grades
Middle
managers
B-C-D-E-F
(A1 and A2)
Senior
managers
Total
35,164
730
10
35,904
43,837
471
5
3,152
645
12
3,809
861
24
-
885
711,699
118,875
58
830,632
557,689
126,326
17
684,032
1,613
1,661
38
3,312
1,582
3,318
3
4,903
Total
751,628
121,911
118
873,657
603,969
130,139
25
734,133
Total person days
104,393
16,932
16
121,341
83,885
18,075
3
101,963
Financial Services
Private Customer/LAPS(*)
Central functions
(*)
44,313
Large Accounts and Public Sector.
Training methods were increasingly integrated with work, thus permitting course participants to immediately see the
applicability of the course to their day-to-day work.
The chief priority for Retail Market training is regulatory compliance in the sector and the support of the introduction of
important new procedures.
The provision of MiFID compliant advisory services was the subject of classroom and online courses. There were four
courses included in the online component with 75 thousand inscriptions. Three anti-money laundering courses were held,
on the other hand, for a total of 41,300 participants.
A course, attended by 3,700 employees, was held for the first time on “Suspected Counterfeit Bank Notes”, in response
to Bank of Italy requirements.
A course on basic computer skills was held to expand the use of e-learning to Postal Services staff. The course, which was
aimed at a total of approximately 7,500 employees, was on basic digital equipment skills and was in compliance with
company rules on IT security.
A first set of courses for priority employees was developed as part of the skills-based training project. The project will enable
analysis of individual training needs, based on job profile or occupational category, for the development of personalised
courses. The process will lead to certification of employees’ skills for both training and career development purposes.
The commitment to sustainability and social policies was evidenced by training provided on the integration of corporate
social responsibility in a company’s strategies and the importance of investor relations.
The import of social policies for employees related to the work-life balance and real support for families, including specific
projects for disadvantaged individuals.
Implementation of the Crèche Project also proceeded, with the start up of work on construction of the Bologna crèche,
which is planned to be opened in September 2012 and which will also be made available to teleworkers. The productivity
of the 50 employees who currently work from their homes has increased 30% in combination with a 30% reduction in
absenteeism. A project for the employment of the disabled was started during the year for the identification of a range of
active policies and concrete measures to facilitate employment of and accessibility by the disabled.
80
6.3 HUMAN RESOURCES MANAGEMENT
In 2010, to facilitate the strengthening of the front-office and the change over to the younger generation, Poste Italiane
worked on the identification of internal and external personnel to work in post offices.
The Company filled other positions primarily through internal recruitment (promotion of graduates and internal postings of
vacant positions) in order to motivate and develop existing staff and by providing the possibility for professional
diversification and growth.
Staff were recruited from outside when it was necessary to recruit young graduates as trainees (primarily engineers) or to
obtain specific professional skills which it was difficult to find inside the Company.
In relation to the union agreements of January 2006 and July 2008, regarding the hiring of staff previously employed by
Poste Italiane on fixed-term contracts, more than 4,750 people were offered permanent positions as delivery staff. This
resulted in the hiring of approximately 2,000 people.
As usual, in applying staff management, development and training policies, the Company used the performance appraisal
procedure for executives and other staff members in 2010, involving the appraisal of approximately 79 thousand
employees (compared with around 75 thousand in 2009) and 5,300 appraisers.
Seven sessions were held at an Assessment Centre to find suitable candidates for senior positions; 56 middle managers
were involved in the assessments. 69 other sessions were held in parallel, with 410 existing middle managers and staff to
identify employees suitable for career development. Furthermore, 45 new graduates were assessed in seven sessions for
career development in operational and commercial positions at post offices.
A Professional Training project for middle managers was also launched at the beginning of the year, and has so far involved
around 50 people at head office. The aim is to implement specific organisational initiatives in the Retail Market and Postal
Services segments. The project reinforced corporate commitment to careful human resources management and
investment in professional enhancement of management through projects consistent with the seniority of the individuals
involved. Staff, consequently, took part in appropriate, targeted skills development programmes designed to realise their
potential and enable them to diversify their experience.
Remuneration systems were revised in 2010 through multiple incentive schemes35 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 key
managers’ pay with the market.
The structure of the incentive scheme was revised and expanded in 2010 from annual to three and four monthly incentives
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 relating to delivery services, which has been extended to include Innovative Services, has led to the
establishment of an incentive scheme designed to encourage postmen and women to provide information about and sell
Poste Italiane’s services.
35. 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 of commercial budget targets, whilst also taking into account
the vital importance of customer satisfaction and loyalty;
- incentive scheme by objective 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 saw the Company and labour unions deal mainly with a series of organisational issues in support of the
Company’s development and innovation, as it strives to boost competitiveness ahead of the upcoming deregulation of the
postal market.
Following complex negotiations, on 28 January 2010 the parties reached agreement defining the criteria and procedures
for voluntary transfers at national level for staff other than middle managers. Key aspects of the agreement include the
conditions to be eligible for transfer (the minimum period of employment in the area offices, years of service, maximum
sick leave taken in the previous year).
On 25 March 2010 an agreement was reached that classifies counter staff as video display terminal operators, requiring
such staff to have breaks from this kind of work, in accordance with the law, via a change of assignment. In accordance
with the provisions of the agreement, a Health Surveillance Plan was launched in June, alongside a series of training and
information initiatives.
As a part of a more general reorganisation of the Retail Market segment and above all the new Customer Service function,
on 9 April 2010 the Company signed an agreement in which the parties have set out a process for rationalising operations.
This will involve closure of the Contact Centres in Milan, Cagliari, Bari and Florence, with redeployment of the staff working
in the centres.
Negotiations were concluded on 27 July 2010 regarding the reorganisation of Postal Services in line with the need to modernise
all aspects of mail delivery and to strengthen the Company’s strategic position in line with changing customer demand. As with
other more advanced models in Europe, the innovative cornerstone of the new organisational model consists in providing mail
deliveries over five days a week, with only urgent deliveries on Saturdays, and in keeping post offices open to customers
throughout the day. The reorganisation, which takes advantage of the extensive nature of the distribution network and expands
on the responsibilities assigned to postmen and women, will generate greater efficiency within the Company, that will include
measures to adjust staff numbers and to enhance occupational skills. This last aspect will be realised through occupational
mobility and development in combination with targeted training, promotion of part-time work and the provision of incentives for
voluntary early retirement and access to income support provided by the Solidarity Fund.
The agreement also provides for the organisational model to be adjusted at regional level. The regional negotiation phase
opened on 16 September 2010, after which agreements were signed by all Regions, and was concluded on 11 October
2010 in line with the agreed national timetable.
The Statement of Agreement of 21 May has extended the previous term for the agreements of 10 and 22 July 2008
regarding the permanent employment of staff on fixed-term contracts who are on the recruitment list. The term for
contacting the relevant individuals has thus been extended to 31 December 2010. An agreement was subsequently
reached on 27 July 2010 enabling people previously employed by Poste Italiane on fixed-term contracts on the date of
signature of the agreement, and who are still employed under the terms of a provisional court order, to voluntarily withdraw
their claims against the Company, continue in the Company’s permanent employ and repay the gross wages paid by the
Company under the court order.
Approximately 3,700 applications were received to accept this offer. The process will be completed in early 2011 through
the signature of individual agreements before Local Industrial Associations or Provincial Employment Offices.
Negotiations commenced towards the end of the year on renewal of the Collective Contract for Poste Italiane staff.
The initial phase of the negotiations consisted of the establishment of Technical Committees that commenced an analysis
of the statutory requirements with respect to the Contract’s Industrial Relations System.
Negotiations are planned to recommence in 2011 with the aim of coming to a rapid conclusion.
The activities of all the bilateral entities were ongoing in 2010. The Ente Bilaterale per la Formazione e Riqualificazione del
Personale (the Bilateral Agency for Staff Training and Retraining) supported the development and presentation of staff
training projects entailing advanced technical retraining and has concluded numerous agreements to assist in obtaining
finance from Fondimpresa and the Solidarity Fund, as described above.
82
The work of the Organismo Paritetico Nazionale (Joint National Body) resumed in 2010 through, among other things,
advanced technical studies and analyses on stress at the workplace, resulting from companies’ legal obligations.
The Italian National Equal Opportunities Commission, acting in accordance with the 2010 Action Plan started, among other
projects, a training programme for members of the Regional Equal Opportunities Commissions for the purpose of gaining
greater insight into the relevant legislation.
6.5 LABOUR DISPUTES
In 2010, the number of labour disputes regarding fixed-term contracts (2,761 new complaints filed compared with around
2,900 in 2009) was more or less on the same level as claims regarding other contracts (approximately 2,470 versus 2,600
for 2009). 359 of the latter related to disputes on flexible working conditions (356 in 2009).
The percentage of cases lost regarding fixed-term employment contracts (cases brought in 2009 with a verdict handed
down in 2010) was around 46%, whereas there was a reduction in the percentage of cases lost in connection with flexible
work (51% versus 68% in 2009).
In November 2010 Law 183 (the so-called Collegato Lavoro legislation) came into effect. This, among other things (see art.
31), has made the “Compulsory” attempt at Conciliation in labour disputes optional and (see art. 32, paragraphs 1 to 4)
extended the 60 day period required for individual dismissals and challenges thereto to other matters – transfers of
individuals, transfers of company divisions, invalidity of dismissal. The effectiveness of these provisions has been deferred
to 31 December 2011 due to the amendments made in February 2011 by the Conversion Law of the Law Decree of 29
December 2010 (the so-called Milleproroghe legislation). Subject to the above, one of the most important new provisions
introduced by the Collegato Lavoro was a cap on compensation payable to workers for court-imposed conversions of fixedterm contracts (see art. 32, paragraphs 5 et seq.). With respect to compensation on the conversion of fixed-term contracts,
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 months for companies that implement recruitment lists also applicable
to the permanent employment of workers formerly on fixed-term contracts. At 31 December 2010 this important reform,
which is also applicable to ongoing legal actions, has resulted in a significant reduction in the risks deriving from this dispute.
6. Human Resources | 7. Investments 83
7. INVESTMENTS
(€m)
2008
2009
2010
Intangible assets
197
439
185
269
156
224
Total capital expenditure
Financial investments
636
18
454
17
380
6
Total investments by Poste Italiane SpA
654
471
386
7.1 FINANCIAL INVESTMENTS
Amounts invested in 2010 by the Parent Company in subsidiaries and associates consisted of:
• the payment of 3.5 million euros in capital contributions to Mistral Air Srl to cover the loss reported at 30 September 2009
and to establish an extraordinary reserve;
• the subscription of 32.45% of the share capital of Telma-Sapienza Scarl at a cost of 0.5 million euros and payment of a
further 0.5 million euros in the form of a statutory membership fee;
• subscription of the capital increase carried out by SDA Express Courier SpA (1.7 million euros).
Furthermore, the following transactions were concluded during the year which had no effect on the value of investments:
• the establishment by SDA Express Courier SpA, on 23 June, of Kipoint SpA with the aim of transferring the “Kipoint”
division acquired from PosteShop SpA to the new company in November;
• the conclusion, on 20 December 2010, of an agreement between Poste Italiane SpA and UniCredit SpA for the acquisition, at a price of 136 million euros, of the entire share capital of UniCredit MedioCredito Centrale SpA, a company that
promotes and manages government subsidies for businesses designed to support economic development; the effectiveness of this agreement is subject to the fulfilment of certain conditions precedent, including clearance from the
Antitrust Authority and the Bank of Italy. This acquisition is part of the “Banca del Mezzogiorno” project (regarding a
state-owned bank established to finance development projects in southern Italy) promoted by the Ministry of the
Economy and Finance.
84
7.2 CAPITAL EXPENDITURE
The Parent Company’s capital expenditure of 380 million euros represents 88% of the Group’s total investment. As
shown in the chart below, 56% of this amount regards ICT (Information & Communication Technology), 28%
modernisation and renovation of buildings and 16% postal logistics.
28%
56%
Modernisation and upgrade of properties
Postal logistics
IT and telecommunications networks
16%
7.2.1 IT AND TELECOMMUNICATIONS NETWORKS
ICT operations were, as in the past, oriented to the support and development of postal services, logistics and financial
products as well as electronic and telecommunications communications services through, among other things, the
strengthening of support applications and platforms (including Customer Relationship Management - CRM and the Service
Delivery Platform - SDP), the development of sophisticated infrastructure and the insourcing of the VoIP (Voice Over IP)
platform. VoIP technology has, incidentally, been expanded to over 6,850 post offices and industrial facilities, resulting in a
total of over 60 thousand users. Furthermore multicast36 infrastructure was introduced in all Branches and post offices
which have migrated to VoIP having been equipped with unicast37 equipment, which enables the streaming38 of videos to
all user workstations and the reception of multimedia content.
As mentioned above, corporate and business applications, used in the integrated management of customer/product data,
were developed on behalf of the Company’s various businesses, in combination with the ongoing computerisation of CRM
and the Enterprise Data Warehouse (EDWH).
CRM services in 2010 were expanded to 31 thousand users at post offices, Area Offices, Branches, head office,
Centralised Service Teams and the Contact Centre. The purpose of the expansion was to support commercial campaigns
and the management of flows between front-end and back-office post office staff. The management of retail current
account contracts and accessory products was also automated. Since CRM entails real-time access to financial information,
it has been used from 2010 by counter staff for operations and advisory services required by MiFID from July.
The activities of EDWH continued, which in the past successfully integrated various types of business, thus permitting
product-based services to become more focused on customer needs. During the year the gathering and archiving of daily
report data was improved.
Other corporate application hardware introduced in post offices during the year included the SDP platform entailing the
makeover of counter systems through the provision of a multichannel platform providing access to all of Poste Italiane
SpA’s distribution channels. SDP equipment had been installed in 1,718 post offices throughout Italy by 31 December 2010.
Modernisation of the technology used by post offices and head office departments went ahead, through the purchase of
over 50 thousand items of hardware and appliances for use in delivery and logistics operations.
36. A multicast entails simultaneous delivery of information to a group of destinations.
37. A unicast entails point-to-point data transmissions
38. Streaming refers to an audio/video data flow transmitted by a source to one or more destinations via a computer network. The data is reproduced as it
arrives at its destination.
7. Investments 85
Work on financial and insurance systems primarily related to compliance with Italian and international regulatory
requirements, including the completion of the project for MiFID compliance, and improving the efficiency of existing
systems. In detail: security arrangements for the BancoPosta Online (BPOL) channel were completed through the
introduction of a Personal Card Reader for retail customer transactions; the introduction of new equipment for the
dematerialisation of pre-marked bills at the counter; Fraud Management Systems and Remote Controls were improved;
the BPIOL Corporate Banking platform was updated through the introduction of an electronic invoicing service, which
manages and channels electronic documents with content in accordance with standard templates and can be used by all
participants in the Customer to Business Interaction (CBI)39 consortium.
A facility management system was introduced for the year for the maintenance of all properties and the real time control
of contractors’ commencement and completion of work.
Work on ICT security arrangements continued for the physical and digital protection of the Company’s hardware and software.
7.2.2 MODERNISATION AND UPGRADE OF PROPERTIES
28% of Poste Italiane SpA’s capital expenditure was attributable to the modernisation and upgrading of post offices and
industrial sites. This work primarily related to the restructuring and upgrading, regulatory compliance and maintenance of the
Company’s buildings. Work on the restoration of historical buildings also continued during the year.
In detail, 120 post offices were adapted to customer needs and 750 air conditioning and ventilation systems were upgraded or
installed. Work also started on a long-term project for the upgrading of security systems and, by 31 December 2010, systems
had been installed in approximately 110 offices at a particularly high risk of theft.
The reorganisation of delivery services, described in previous sections, commenced in accordance with the guidelines of
the new postal delivery services innovation project, with work beginning at 386 Distribution Centres out of a total of the
917 planned.
7.2.3 POSTAL LOGISTICS
The reorganisation of the postal services logistics chain has resulted in changes to mail collection, sorting and deliveries,
which now take place five days a week, and was a part of the ongoing rationalisation of logistics hubs.
In detail, there was a reduction in 2010 of manual sorting offices (Priority Centres) from 35 in 2009 to 29 by the end of
2010 and a reduction in Sorting Centres from 22 to 21, following the closure of the International Sorting Centre in Milan,
with the transfer of the handling of inbound and outbound international mail to the Sorting Centre at Milano Peschiera
Borromeo.
Action taken to increase plant and equipment at industrial facilities during the year included the installation at facilities in
Ancona, Naples and Novara of three input/output interconnections for automated mail sorting equipment for letters and
postcards, and the installation of a pilot system for the automated emptying of sorting equipment for outsize items at the
Bologna facility.
39. The Customer to Business Interaction (CBI) consortium is a screen-based banking service for companies of all sizes to connect directly, from their own
computers, with all banks with whom they do business.
86
With the introduction in 2010 of an additional seven40 remote Coding Service Centres (CSC) at logistics network hubs, the
decentralisation of video coding from Sorting Centres to non-automated network centres was completed. The number of
CSCs at the end of 2010 was 33.
Finally, in support of the reorganisation of the entire logistics network, action was taken during the year with respect to the
Company’s fleet of motor vehicles. This led to the procurement of 100 electric-powered light quadricycles, alternative fuel
vehicles with a low environmental impact, which had been successfully tested in previous years for mail deliveries in the
centres of major Italian cities and on certain smaller islands.
40. The seven centres are at: Arezzo, Avellino, Benevento, Bolzano, L’Aquila, Lecce and Ragusa.
7. Investments | 8. Environment 87
8. 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.
A “Consumption Reduction Plan - environmental area” was consequently developed during the year for three different
areas: energy savings, differentiated waste and the use of recycled paper. The Plan has two objectives: the reduction of
consumption and the diffusion of a culture of environmental protection within the Group. The latter was realised by
providing all employees in the Group with a copy of the Charter of Environmental Values to increase awareness of the
impact on the environment of our day-to-day actions. The intention is also for the Charter to publicise the Company’s
environmental initiatives and promote the participation of individuals in actions designed to reduce the Group’s
environmental impact through minor changes to day-to-day behaviour.
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. In 2010 it extended its advisory services to also cover gas supplies to
Postel SpA.
In addition to reducing energy consumption during the year, particularly at head office and industrial premises, steps were taken
to procure power from certificated renewable sources under the Renewable Energy Certificate System (RECS). Renewable
energy now accounts for 50% (45% in 2009) of all power consumption throughout the Group’s properties (over 500 GWh).
Measures were introduced 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.
Poste Italiane is also very active internationally where it participates in major working groups engaged in environmental
protection. In detail, the Company:
• in connection with the International Post Corporation (IPC), it participates in the Environmental Measurement and
Monitoring System (EMMS) for the monitoring of CO2 emissions and the qualitative assessment of postal operators’
environmental protection efforts;
• 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, it has taken over leadership of all projects eligible for EU funding for Green Projects;
• in connection with the Universal Postal Union (UPU), it provides active contribution to all matters concerning global emissions monitoring systems and all issues in connection with eco-sustainability.
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.
88
9. EVENTS AFTER 31 DECEMBER 2010
As explained above, conversion of the Law Decree of 29 December 2010 (the so-called Milleproroghe legislation) into law
was approved in February 2011. The Law provided (paragraph 17-octies et seq. of article 2) that by 30 June 2011 Poste
Italiane SpA was, by shareholder resolution, on the recommendation of the Board of Directors, to ring fence capital to be
used exclusively in relation to BancoPosta’s operations, as governed by Presidential Decree 144/2001. The capital is to
amount to at least 10% of the Company’s Equity. The shareholder resolution will establish the assets and contractual
relations to be included in the ring fence and the rules for its organisation, management and control.
Furthermore, article 8 of the Decree provides that the funds earmarked for publisher tariff subsidies to compensate the
Company for the delivery of publications shall remain available until 31 March 2011, rather than the 31 December 2010
initially provided.
9. Events after 31 December 2010 | 10. Outlook 89
10. OUTLOOK
The third and final phase of the full deregulation of the European postal market started on 1 January 2011. This phase
entails the elimination of the area reserved for providers of Universal Postal Service.
The full opening of the Postal Services market to competition in combination with the unfavourable economic
environment that has persisted for the past few years, means that the Company will be forced to adopt strategies to
protect volumes and, hence, revenues earned by conventional postal services and to further improve and expand the range
of integrated and digital services provided, in addition to investing in the technological innovation of the processes involved
in the development of products and services.
Pilot studies will be conducted in 2011 with pre-franked envelopes and parcels that include the cost of sending the product.
Since packaging is standardised, customers will be able to send parcels direct from their homes.
Pilot reverse logistics services will be introduced during the year for certain customers. Advanced methods of delivery,
electronic document storage and the reporting of consignments and documentation will be made available to large customers.
Also with the intent to strengthen the Company’s strategic dominance of the postal sector and to increase customer
satisfaction through the offering of new and tailored services, reorganisation of the segment in accordance with the union
agreement of 27 July will continue in 2011. The reorganisation will relate to delivery services, the logistics network and the
transport system.
In addition to its regular series of stamps in connection with specific topics, the Philately Programme for 2011 will include
a number of issues commemorating the 150th anniversary of the Unification of Italy.
The commitment of the Group with respect to Postal, Express Delivery and Parcel Services will be to consolidate the
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. This will entail a reorganisation of the range of domestic products offered
and a strengthening of Poste Italiane’s international market position by expanding the range of dedicated Retail and
Business products.
Financial Services will focus on non-consumer customers for whom two new current accounts will be introduced: one
for trustees in bankruptcy, which is a market segment currently not covered by the Company; and a second for non-profit
organisations in order to improve the quality of and expand the customer base.
A promotion will be launched to attract SME customers and consolidate and increase In Proprio account balances entailing
the payment of higher than standard credit interest rates for any increase in balances above 2010 levels.
Loan product development will be targeted by offers to specific customer segments in 2011. A Prontissimo product will
be added exclusively for holders of Postal Savings Books, Investments, etc.
Agreements with social security institutions will be renewed regarding the assignment of one fifth of INPS and INPDAP
pension payments.
In 2011, Mutuo BancoPosta customers will be offered the option of loans financing the acquisition of properties at court
auctions by using special agreements to be concluded between the disbursing credit institution and the main Italian courts.
The electronic money segment will be broadened through product innovation. A new credit card will be introduced
dedicated to SMEs and professionals.
90
An extension of the offer of Postepay multi-application cards to business customers is planned, in addition to the launch
of a prepaid card that can be used on the Milan public transport system and the introduction of contactless functions on
standard cards.
A Report Gold service will be included with the Bollettino product in 2011, giving billing customers the ability to use BPIOL
to gain online access to the digital archive of the customers’ bills issued in order to view and export the data and visualise
bills paid over the last ten years. Screen access to digital archives of bills means that account holders will be able to quickly
reconcile amounts received with their accounting records, without having to wait for the delivery of hard copies of receipts
which may now, on request, be eliminated.
As explained in greater detail above, on the fulfilment of certain conditions precedent, Poste Italiane will finalise the
acquisition of UniCredit MedioCredito Centrale SpA as a part of the “Banca del Mezzogiorno” project. The understanding
is, in fact, that Poste Italiane will be made responsible for the project. MedioCredito Centrale will, consequently, become
a fully operating member of the Poste Italiane group in 2011.
In the Insurance Services segment, 2011 will see the Group continue to focus primarily on the sale of life policies, and
the development of pension funds and personal protection products. Given the current economic outlook, investment policy will continue to be based on prudent asset allocation. Whilst the value of PosteVita’s portfolio securities is tied to the
performance of the financial markets, the company’s results should be in line with the attractive returns on the investment
of premiums.
Furthermore in 2011, as a result of PosteAssicura’s commercial success in the first months of its operations, it is intended
to increase non-life production.
With respect to telephone services, the telecommunications network will be completed in 2011. This will entail Poste
Italiane SpA’s conferment of the relevant assets and resources to PosteMobile. Business development in 2011 will include the introduction of post-paid postal services to improve its market position in the business market (primarily SMEs) and
to expand the high-end consumer product range. PosteMobile will also expand the original scope of its operations in 2011
by entering the remote games segment.
The results for the year confirm the growth trend of recent years. The outlook for 2011 makes maintenance of the 2010
level of earnings less than straight forward. A number of factors will affect earnings in 2011, including:
• completion of the process of deregulation of the postal sector;
• the substantial elimination of the system of subsidies for publications resulting in a fall in mail volumes;
• the progressive and natural decline of traditional mail, which is being replaced by electronic forms of communication and
is being affected by large customers’ cost cutting exercises;
• financial market trends and interest rates, making it difficult to identify financial transactions that can stabilise the returns
on portfolios required to be invested in government bonds;
• the economic environment and households’ ability to save.
The Company has, nevertheless, set itself the objective of achieving earnings in line with 2010 through the strategic and
commercial measures outlined above, in addition to a stringent policy of cost savings.
10. Outlook | 11. Other information 91
11. OTHER INFORMATION
Related party transactions
With particular reference to postal current account services and postal savings deposits, there were significant
transactions during the year between the Group and two shareholders, the Ministry of the Economy and Finance and Cassa
Depositi e Prestiti, which until 31 December 2010 held 35% of the Company’s share capital.
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 33 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 equipment, and the distribution of 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.
92
12. BOARD OF DIRECTORS’ PROPOSALS
TO SHAREHOLDERS
The Board of Directors proposes that the General Meeting of shareholders:
• approve the financial statements of Poste Italiane SpA for the year ended 31 December 2010, 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, accompanied by the Directors’ Report on Operations;
• appropriate profit for the year of 729,034,811 euros as follows:
a) 38,948,137.72 euros to the legal reserve;
b) the residue in accordance with shareholder resolutions.
The Board of Directors also proposes that shareholders approve appropriation of a portion of retained earnings, amounting
to 1,000,000,000.00 euros, to form ring fenced capital to be used exclusively in relation to BancoPosta’s operations. This
capital is to be held in a specific Equity reserve, named the “Reserve for BancoPosta capital”, and used exclusively to meet
the related capital requirements.
12. Board of Directors’ proposals | Appendix - Key performance indicators
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)
Revenue
Operating profit
Profit for the period
Investment
Equity
Permanent workforce - end of period
Flexible workforce - average
2009
2010
Amount
%
249,764
20,762
19,505
21,423
138,400
1,020
115
296,469
23,305
9,692
20,640
148,625
1,046
115
46,705
2,543
(9,813)
(783)
10,225
26
n/s
18.7
12.2
(50.3)
(3.7)
7.4
2.5
n/s
The company employed on average 7 people seconded from the Parent Company (9 in 2009).
PostelPrint SpA
Increase/(Decrease)
(€000)
Revenue
Operating profit
Investment
Equity
2009
2010
Amount
%
98,789
6,302
4,237
1,212
32,768
233
24
115,007
6,400
4,058
538
36,891
231
23
16,218
98
(179)
(674)
4,123
(2)
(1)
16.4
1.6
(4.2)
(55.6)
12.6
(0.9)
(4.2)
2009
2010
Amount
%
422,492
(23,444)
(23,529)
6,840
81,198
1,276
1
437,736
(41,535)
(34,508)
6,225
52,449
1,334
13
15,244
(18,091)
(10,979)
(615)
(28,749)
58
12
3.6
77.2
46.7
(9.0)
(35.4)
4.5
n/s
SDA Express Courier SpA(*)
Increase/(Decrease)
(€000)
Revenue
Operating profit
Investment
Equity
The figures for 2010 take account of Poste Italiane Trasporti SpA which was merged with and into the company on 31 December 2010, with effect for
accounting and tax purposes from 1 January 2010.
(*)
93
94
Italia Logistica Srl(*)
Increase/(Decrease)
(€000)
Revenue
Operating profit
Investment
Equity
2009
2010
Amount
%
73,185
(5,365)
(6,011)
4,714
5,453
80
4
87,473
(3,627)
(3,544)
1,786
1,876
66
16
14,288
1,738
2,467
(2,928)
(3,577)
(14)
12
19.5
(32.4)
(41.0)
(62.1)
(65.6)
(17.5)
n/s
Since 2008 the company has been accounted for using proportionate consolidation. In the previous table it was consolidated on a line-by-line basis.
(*)
Poste Tutela SpA
Increase/(Decrease)
(€000)
Revenue
Operating profit
Investment
Equity
2009
2010
Amount
%
79,949
1,338
771
112
7,177
81,325
1,501
971
21
8,146
1,376
163
200
(91)
969
1.7
12.2
25.9
(81.3)
13.5
4
4
n/s
n/s
2009
2010
Amount
%
7,091,501
107,878
38,279,074
9,500,212
188,058
43,677,787
2,408,711
80,180
5,398,713
34.0
74.3
14.1
37,617,920
1,070,734
148
-
42,450,276
1,240,577
168
4
4,832,356
169,843
20
4
12.8
15.9
13.5
n/s
Poste Vita SpA(*)
Increase/(Decrease)
(€000)
Earned premiums(**)
Financial assets
and Financial liabilities at fair value
Equity
The figures shown have been prepared in accordance with IFRS and therefore may not coincide with those in the financial statements prepared under Italian
GAAP and in accordance with the Italian Civil Code.
(**)
Earned premiums are reported gross of outward reinsurance premiums.
(*)
Increase/(Decrease)
(€000)
Fee income
Net fee income
Financial assets (liquidity and securities)
Equity
2009
2010
Amount
%
31,242
27,405
15,122
52,443
49,377
35,074
31,172
17,210
65,556
66,467
3,832
3,767
2,088
13,113
17,090
12.3
13.7
13.8
25.0
34.6
11
38
27
n/s
Appendix - Key performance indicators 95
Postecom SpA
Increase/(Decrease)
(€000)
Revenue
Operating profit
Investment
Equity
2009
2010
Amount
%
57,059
423
(1,612)
6,101
39,770
241
11
75,891
84
(1,106)
6,301
38,721
244
8
18,832
(339)
506
200
(1,049)
3
(3)
33.0
(80.1)
(31.4)
3.3
(2.6)
1.2
(27.3)
PosteMobile SpA
Increase/(Decrease)
(€000)
Revenue
Operating profit
Investment
Equity
2009
2010
Amount
%
98,533
(8,048)
(6,795)
14,231
9,415
110
172,927
9,542
5,464
16,500
14,886
164
74,394
17,590
12,259
2,269
5,471
54
75.5
n/s
n/s
15.9
58.1
49.1
1
0
(1)
n/s
2009
2010
Amount
%
44,919
29,294
19,941
353
417,278
7
44,908
30,116
18,338
779
435,616
11
(11)
822
(1,603)
426
18,338
4
n/s
2.8
(8.0)
n/s
4.4
57.1
Increase/(Decrease)
(€000)
Revenue
Operating profit
Investment
Equity
The company employed on average 1 person seconded from the Parent Company (4 in 2009).
PosteShop SpA(*)
Increase/(Decrease)
(€000)
Revenue
Operating profit
Investment
Equity
2009
2010
Amount
%
60,115
(1,436)
(1,545)
261
5,806
38
56,195
(2,289)
(2,500)
254
3,307
27
(3,920)
(853)
(955)
(7)
(2,499)
(11)
(6.5)
59.4
61.8
(2.7)
(43.0)
(28.9)
(*)
The transfer of the business unit known as “Kipoint” from PosteShop SpA to Kipoint SpA was finalised on 27 October 2010.
96
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.
Decentralised Distribution Centres: area units undertaking mail delivery as well as notification services where available.
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.
Ho.Re.Ca.: business term used for the hospitality sector, covering enterprises operating in the hotel or food and beverage
sectors (restaurants, bars and cafes).
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.
Personal Card Reader (PCR): instrument which, combined with a Postamat card and a digital certificate memorised in a
chip, permits the exchange of unique codes for an online transaction between a site and the customer in order to verify
identity. This new system fully replaced the old mnemonic codes in April 2010.
Phishing: attempt to criminally and fraudulently acquire confidential information by masquerading as a trustworthy entity
in an electronic communication.
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).
Glossary 97
Service Continuity: in order to safeguard business continuity in the event of a crisis, including those of a serious nature,
the Bank of Italy and the CONSOB are coordinating a working group to look at service continuity in the Italian financial
system. The group involves participants from Italy’s leading banking groups and the companies that manage the various
networks and infrastructures that are key to the smooth operation of the financial system.
Strong Authentication: authentication with two elements, or authentication with several elements, is a system based on
the joint use of two methods of individual authentication.
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.
VoIP (Voice Over IP): voice services over the internet.
98
POSTE ITALIANE
GROUP
CONSOLIDATED
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
STATEMENTS AND NOTES
99
ANNUAL REPORT 2010
100
CONTENTS
STATEMENT OF FINANCIAL POSITION
102
INCOME STATEMENT
103
STATEMENT OF COMPREHENSIVE INCOME
104
STATEMENT OF CHANGES IN EQUITY
105
STATEMENT OF CASH FLOWS
106
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
107
1. Introduction
107
2. Basis of accounting
108
3. Risk management
126
4. Operating segments
145
5. Property, plant and equipment
147
6. Investment property
150
7. Intangible assets
151
8. Investments accounted for using the equity method
154
9. Financial assets
156
10. Other non-current assets
164
11. Inventories
165
12. Trade receivables
166
13. Other current receivables and assets
170
14. Assets and liabilities attributable to BancoPosta
171
15. Cash and cash equivalents
177
16. Non-current assets held for sale
178
17. Share capital
179
18. Shareholder transactions
180
19. Earnings per share
180
20. Reserves
180
101
21. Technical provisions for insurance business
181
22. Provisions for liabilities and charges
181
23. Staff termination benefits
183
24. Financial liabilities
184
25. Trade payables
189
26. Other liabilities
190
27. Revenues from sales and services
193
28. Earned premiums
197
29. Other income from financial and insurance activities
197
30. Other operating income
198
31. Cost of goods and services
199
32. Net change in technical provisions for insurance
business and other claims expenses
33. Other expenses from financial and insurance activities
201
202
34. Staff costs
202
35. Depreciation, amortisation and impairments
204
36. Capitalised costs and expenses
204
37. Other operating costs
205
38. Finance income/costs
206
39. Income tax expense
207
40. Related party transactions
212
41. Other information
217
42. Information on investments
221
43. Events after 31 December 2010
222
ATTESTATION OF THE SEPARATE AND CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010
PURSUANT TO ART. 154-BIS OF LEGISLATIVE DECREE 58/1998
BOARD OF STATUTORY AUDITORS’ REPORT
INDEPENDENT AUDITORS’ REPORT
223
224
225
ANNUAL REPORT 2010
102
ASSETS
Note
31 Dec
2010
of which related
party transactions
(Note 40)
31 Dec
2009
of which related
party transactions
(Note 40)
[5]
2,956,784
-
3,123,942
-
Investment property
[6]
162,945
-
153,676
-
Intangible assets
[7]
521,358
-
513,550
-
Investments accounted for using the equity method
[8]
6,671
6,671
14,659
14,659
(€000)
Non-current assets
[9]
40,499,401
324,834
34,016,430
536,693
Deferred tax assets
[39]
760,014
-
644,844
-
Other non-current assets
[10]
838,076
1,466
838,744
1,466
Financial assets
Total
45,745,249
[14]
39,653,994
39,305,845
6,173,454
39,512,159
6,804,803
Current assets
Inventories
[11]
44,190
-
52,595
-
Trade receivables
[12]
3,915,400
2,139,963
4,177,952
2,214,918
Current tax assets
[39]
52,408
-
50,358
-
Other current receivables and assets
[13]
603,234
33
506,338
52
[9]
4,612,096
416,823
5,296,526
335,169
[15]
1,093,145
-
2,038,783
-
Financial assets
Cash and cash equivalents
Total
10,320,473
[16]
TOTAL ASSETS
5,582
12,122,552
-
95,725,298
1,285
-
90,941,841
LIABILITIES AND EQUITY
(€000)
Note
31 Dec
2010
of which related
party transactions
(Note 40)
31 Dec
2009
of which related
party transactions
(Note 40)
Equity
Share capital
Reserves
Retained earnings
Total Equity attributable to owners of the Parent
[17]
[20]
Minority interests
Total
1,306,110
(58,421)
3,135,376
4,383,065
-
1,306,110
663,618
2,605,182
4,574,910
-
13
-
13
-
4,383,078
4,574,923
Non-current liabilities
Deferred tax liabilities
Other liabilities
Total
[21]
[22]
[23]
[24]
[39]
[26]
41,738,868
422,235
1,323,481
2,390,440
293,795
73,903
46,242,722
30,276
371,122
6
35,927,121
335,201
1,445,954
3,536,032
417,328
84,701
41,746,337
33,011
512,668
6
[14]
37,810,862
74,405
37,718,321
80,457
Current liabilities
Trade payables
Current tax liabilities
Other liabilities
Total
[22]
[25]
[39]
[26]
[24]
841,554
1,688,813
43,888
1,773,255
2,941,126
7,288,636
10,321
239,871
90,608
149,552
898,984
1,789,900
79,570
1,787,837
2,345,969
6,902,260
13,963
288,949
87,630
168,200
TOTAL LIABILITIES AND EQUITY
95,725,298
90,941,841
Statement of financial position | Income statement 103
INCOME STATEMENT
Note
2010
of which related
party transactions
(Note 40)
2009
of which related
party transactions
(Note 40)
[27]
10,133,509
2,666,138
10,343,768
2,690,980
Earned premiums
[28]
9,504,804
-
7,112,404
-
Other income from financial and insurance activities
[29]
1,982,500
-
2,431,018
-
[30]
216,130
4,389
210,641
12,202
[4]
21,836,943
[31]
2,597,716
152,288
2,550,186
162,233
Net change in technical provisions for
insurance business and other claims expenses
[32]
10,190,477
-
8,626,318
-
Other expenses from financial and insurance activities
[33]
388,332
-
303,400
-
Staff costs
[34]
6,004,505
29,511
6,222,356
29,022
(66,320)
-
(121,007)
-
[35]
547,232
-
555,115
-
(38,447)
-
(30,338)
-
[37]
277,609
13,850
271,300
31,251
(€000)
Total revenue
of which non-recurring costs/(income)
20,097,831
1,869,519
1,599,494
Finance costs
[38]
160,671
26,964
188,497
33,474
Finance income
[38]
179,094
46,306
177,354
88,248
[8]
(490)
-
1,212
-
Income tax expense
1,887,452
[39]
of which non-recurring expense/(benefit)
1,589,563
869,531
-
685,573
-
-
-
62,145
-
PROFIT FOR THE YEAR
1,017,921
903,990
attributable to owners of the Parent
1,017,921
903,990
-
-
attributable to non-controlling interests
Earnings per share
[19]
0.779
0.692
Diluted earnings per share
[19]
0.779
0.692
Consolidated financial statements
104
(€000)
Note
2010
2009
1,017,921
903,990
Available-for-sale financial assets
Increase/(Decrease) in fair value during the period
[20.1]
(896,610)
566,332
Transfers to profit or loss
[20.1]
(339,167)
(32,651)
[20.1]
86,659
3,701
Cash flow hedges
[20.1]
33,252
(6,409)
Actuarial gains/(losses) on provisions for staff termination benefits
[23.1]
70,003
50,766
Taxation of items recognised directly in, or transferred from, Equity
[39.9]
336,097
(182,468)
Total other components of comprehensive income
(709,766)
399,271
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
308,155
1,303,261
attributable to owners of the Parent
308,155
1,303,261
-
-
attributable to minority interests
Statement of comprehensive income I Statement of changes in Equity 105
Equity
Reserves
(€000)
Note
Balance at 1 January 2009
Total comprehensive income for the year
Retained
Total
earnings/
Equity
(Accumulated attributable
losses) to owners of
the Parent
Share
capital
Legal
reserve
Fair value
reserve
Cash flow
hedge reserve
Minority
interests
Total
Equity
1,306,110
112,311
270,619
(117,685)
1,850,294
3,421,649
13 3,421,662
-
-
363,969
(1,636)
940,928
1,303,261
- 1,303,261
Appropriation of profit to reserves
[20]
-
36,040
-
-
(36,040)
-
-
-
Dividends paid
[18]
-
-
-
-
(150,000)
(150,000)
-
(150,000)
1,306,110
148,351
634,588
(119,321)
2,605,182
4,574,910
-
-
(842,383)
81,704
1,068,834(*)
308,155
-
308,155
Balance at 31 December 2009
Total comprehensive income for the year
13 4,574,923
[20]
-
38,640
-
-
(38,640)
-
-
-
Dividends paid
[18]
-
-
-
-
(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
This item includes profit for the year of 1,017,921 thousand euros, actuarial gains on provisions for staff termination benefits of 70,003 thousand euros,
after the related current and deferred tax expense of 19,090 thousand euros.
106
(€000)
Note
2010
2009
[35]
Impairment of goodwill/goodwill arising from consolidation
[7]
Net provisions for liabilities and charges
[22]
Use of provisions for liabilities and charges
[22]
Provisions for staff termination benefits
[23]
Staff termination benefits paid
[23]
Changes in technical provisions for insurance business
(Gains)/Losses on disposals
[30]
(Gains)/Losses on financial assets/liabilities measured at fair value
(Income)/Expenses from financial and insurance activities
(Dividends)
[38]
Dividends received
(Finance income realised)
[38]
(Finance income in form of interest)
[38]
Interest received
Interest expense and other finance costs
[38]
Interest paid
Losses and impairments/(Recoveries) on receivables
[37]
Income tax paid
[39]
Other changes
Cash generated by operating activities before changes in working capital
[a]
Changes in working capital:
(Increase)/Decrease in Inventories
[11]
(Increase)/Decrease in Trade receivables
(Increase)/Decrease in Other receivables and assets
Increase/(Decrease) in Trade payables
[25]
Increase/(Decrease) in Other liabilities
Cash generated by/(used in) changes in working capital
[b]
Increase/(Decrease) in liabilities attributable to BancoPosta
Payment of liabilities linked to financial contracts issued by insurance segment
[24]
Net cash generated by/(used for) financial assets at fair value through profit
or loss attributable to insurance segment
Net cash generated by/(used for) financial assets held for trading attributable to BancoPosta
Net cash generated by/(used for) available-for-sale financial assets
attributable to insurance segment
[9]
Net cash generated by/(used for) available-for-sale financial assets attributable to BancoPosta
(Increase)/Decrease in other assets attributable to BancoPosta
Cash generated by/(used for) financial assets and liabilities attributable
to BancoPosta and insurance segment
[c]
Net cash flow from/(for) operating activities
[d]=[a+b+c]
- of which related party transactions
Investing activities:
[5]
Investment property
[6]
Intangible assets
[7]
Investments
[8]
Other financial assets
(*)
[14]
Cash used for investments in held-to-maturity investments attributable to BancoPosta
Disposals:
Property, plant and equipment, investment property and assets held for sale
Investments
[8]
Cash generated by investments in held-to-maturity investments attributable to BancoPosta (*)
Change in basis of consolidation
[e]
Net cash flow from/(for) investing activities (*)
Proceeds from/(Repayments of) long-term borrowings
(Increase)/Decrease in loans and receivables
Increase/(Decrease) in short-term borrowings
Dividends paid
[18]
Net cash flow from/(for) financing activities and shareholder transactions
[f]
Net increase/(decrease) in cash and cash equivalents
[g]=[d+e+f]
[15]
2,038,783
1,887,452
547,232
13,390
443,791
(415,295)
502
(111,746)
6,960,498
(100,976)
(139,946)
(739,713)
(376)
358
(40,020)
(132,726)
84,694
154,652
(77,682)
10,459
(782,891)
(4,179)
7,557,478
2,346,134
1,589,563
555,115
461,196
(391,220)
399
(82,644)
6,966,613
(60,326)
(960,856)
(428,891)
(154)
131
(502)
(171,906)
149,930
185,312
(114,559)
31,692
(716,994)
(36,071)
6,975,828
8,405
268,003
(125,010)
(101,087)
(17,266)
33,045
95,122
(1,005,189)
884
(629,914)
(168,805)
(65,613)
162,119
(701,329)
576,492
(1,291,815)
(480,268)
112,716
2,276,353
1,041,786
(5,602,437)
(281,413)
750,209
(7,578,508)
(1,504,262)
1,064,366
(6,411,260)
1,179,263
635,471
(5,415,588)
858,911
(2,258,960)
(247,056)
(1,180)
(185,745)
(1,700)
(550,916)
(2,814,133)
(288,896)
(607)
(218,180)
(5,999)
(204,454)
(3,281,112)
120,119
156,397
1,304,091
9,131
(2,210,992)
(29,837)
(175,718)
152,308
609,501
(500,000)
86,091
(507,886)
(945,638)
1,093,145
85,623
516,280
2,740,493
(656,852)
(53,036)
(216,439)
145,484
(288,455)
(150,000)
(509,410)
(650,279)
(307,351)
2,038,783
(*)
This item includes BancoPosta’s portfolio of held-to-maturity investments.
Statement of cash flows I Notes to the consolidated financial statements 107
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 (the 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.
These consolidated financial statements for the year ended 31 December 2010 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.
108
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 7 March 2011, 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 basis of consolidation and the accounting policies adopted reflect the fact that the Group will remain fully operational in
the foreseeable future, in accordance with the going concern assumption. The basis of consolidation and the accounting
policies are described in notes 2.2 and 2.3, and are consistent with those applied in the preparation of the consolidated
financial statements for the year ended 31 December 2009. 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 nonrecurring 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.
In order to allow comparison on a like-for-like basis with the amounts for 2010, certain items in the statement of cash flows
for the year ended 31 December 2009 have been reclassified, as have amounts in certain notes.
At the date of approval of these consolidated financial statements, there is no established practice on which to base
interpretation and application of a number of new, or revised, international accounting standards. Moreover, 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. The consolidated financial statements have, therefore, been prepared on the basis of the best currently available
knowledge of IFRS and taking account of best practice in this regard. Any future changes or updated interpretations will be
reflected in subsequent years, in accordance with the specific procedures provided for by the related standards.
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.
Notes to the consolidated financial statements 109
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 2010, 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 (see
the description in note 3 - Financial risk management - Other risks - Reputational risk). 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, with
corresponding technical provisions accounted for in liabilities.
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 period to specific items reported separately in
consolidated Equity and the consolidated income statement;
• business combinations, entailing the acquisition of control of an entity, are accounted 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 non-controlling interests in entities already controlled by the Group are not accounted for as acquisitions,
but as changes in 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;
• 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 42.2.
Investments in subsidiaries (note 42.3) 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.
110
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 2010
31 December 2009
Consolidated on a line-by-line basis
Consolidated using proportionate consolidation
Consolidated using the equity method
16
1
7
16
1
9
Total subsidiaries
24
26
The following transactions took place during 2010:
• Poste Assicura SpA, formerly consolidated using the equity method, began operating as a non-life company and is
consolidated on a line-by-line basis;
• the Poste Welfare consortium (in liquidation), formerly consolidated using the equity method, was cancelled from the
Companies’ Register on 18 January;
• the Poste Contact consortium (formerly consolidated using the equity method), which is 70% owned by Poste Italiane
SpA, 15% owned by Postecom SpA and 15% owned by Postel SpA, was merged with and into the subsidiary, Poste
Link Scrl, on 24 February 2010; this transaction was effective for legal purposes from 8 March 2010 and for accounting
and tax purposes from 1 January 2010;
• on 17 March 2010 the Parent Company subscribed a capital increase of 1,739 thousand euros approved by an
Extraordinary General Meeting of SDA Express Courier SpA’s shareholders by contributing 100% of the shares held in
Poste Italiane Trasporti SpA; on 20 December 2010 the merger deed, by which Poste Italiane Trasporti SpA was merged
with and into SDA Express Courier SpA, was executed with effect for legal purposes from 31 December 2010 and for
accounting and tax purposes from 1 January 2010;
• from 28 April 2010 Uptime SpA qualifies as a joint venture as a result of new shareholder agreements and is consolidated
using the equity method;
• on 25 June 2010 Poste Voice SpA (formerly consolidated using the equity method) merged with and into Poste Link Scrl,
with effect for accounting and tax purposes from 1 January 2010; following registration of the merger deed on 25 June
2010, Poste Voice SpA was cancelled from the Companies’ Register;
• on 23 June 2010 SDA Express Courier SpA established Kipoint SpA (consolidated using the equity method), with share
capital of 500 thousand euros, with the aim of transferring the “Kipoint” division acquired from PosteShop SpA to the
new company; this transaction was completed on 27 October 2010 with execution of the contract transferring the
division.
The following transactions did not result in changes to the basis of consolidation:
• on 23 July 2010 the members of the BRPOSTAL consortium, in which the subsidiary, Postel do Brasil Ltda, has an
interest, approved the winding up of the consortium; following the consortium’s winding up, the board of directors of
Postel SpA began to take all the required steps in order to liquidate the Brazilian subsidiary;
• on 20 December 2010 Poste Italiane SpA concluded an agreement with UniCredit SpA for the acquisition, at a price of
136 million euros, of the entire share capital of UniCredit MedioCredito Centrale SpA, a company that promotes and
manages government subsidies for businesses designed to support economic development; the effectiveness of this
agreement is subject to the fulfilment of certain conditions precedent, including clearance from the Antitrust Authority
and the Bank of Italy.
A list of subsidiaries consolidated on a line-by-line basis and key information is supplied in note 42.1. Summary information
about investments in associates accounted for using the equity method is provided in notes 8.3 and 42.3.
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
Furniture and fittings
5-8
5-8
Electrical and electronic office equipment
3 - 10
Motor vehicles
4 - 10
Automobiles
Leasehold improvements
Other assets
(*)
Or the useful life of the improvement if shorter than the estimated lease term.
4
estimated lease term
(*)
3 - 10
112
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 useful 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.
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 date3. 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.
Financial assets
On initial recognition, financial assets are classified in one of the following four categories and accounted for as follows:
3. This is possible for transactions carried out on organised markets (the so-called “regular way”).
114
• 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 non-current
assets. These assets are carried at amortised cost4 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 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.
4. 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.
Notes to the consolidates financial statements 115
Financial assets are derecognised when the Group 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
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 12 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 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 commitment5. 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 hedges6 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.
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
5. 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.
6. 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.
116
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 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.
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 so 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 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 accounting7.
Cash and cash equivalents refer to cash in hand, deposits held at call with banks, amounts that at 31 December 2010 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 others, 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.
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 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:
7. 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 ccrued revenue at the given date.
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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 features8 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 attributed to them and recognised in technical
provisions, under the shadow accounting method.
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.
8. A contractual right of investors to receive returns on the assets under management.
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 include staff termination benefits payable to employees pursuant to article 2120 of the Italian
Civil Code.
• 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 20069.
• 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.
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, reflecting market yields on government securities 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
20069, 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.
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.
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.
9. 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.
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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
classified 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 on a time proportion basis in direct correlation with the costs incurred, 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 effects10.
10. Diluted earnings per share is calculated by taking into account 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.
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. 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.
New accounting standards and interpretations applied from 1 January 2010
The following accounting standards, amendments and interpretations are applicable from 1 January 2010, but their
adoption has not resulted in any change to the presentation or measurement of items in the Poste Italiane group’s
consolidated financial statements:
• IFRIC 12 - Service Concession Arrangements, adopted by EC Regulation 254 of 25 March 2009;
• IAS 27 - Consolidated and Separate Financial Statements, adopted by EC Regulation 494 of 3 June 2009;
• IFRS 3 - Business Combinations, adopted by EC Regulation 495 of 3 June 2009;
• IFRIC 16 - Hedges of a Net Investment in a Foreign Operation, adopted by EC Regulation 460 of 4 June 2009;
• IFRIC 15 - Agreements for the Construction of Real Estate, adopted by EC Regulation 636 of 22 July 2009;
• Amendment to IAS 39 - Exposures Qualifying for Hedge Accounting, and Change to IAS 39 - Financial Instruments:
Recognition and Measurement, adopted by EC Regulation 839 of 15 September 2009;
• Revised version of IFRS 1 - First-time Adoption of International Financial Reporting Standards, adopted by EC Regulation
1136 of 25 November 2009;
• IFRIC 17 - Distribution of Non-cash Assets to Owners, adopted by EC Regulation 1142 of 26 November 2009;
• IFRIC 18 - Transfers of Assets from Customers, adopted by EC Regulation 1164 of 27 November 2009;
• Improvements to IFRS, adopted by EU Regulation 243 of 23 March 2010;
• Changes to IFRS 2 - Share-based Payment, adopted by EU Regulation 244 of 23 March 2010;
• Changes to IFRS 1 - Additional Exemptions for First-time Adopters, adopted by EU Regulation 550 of 23 June 2010.
New accounting standards and interpretations not yet effective
The following accounting standards and amendments are effective from 1 January 2011:
• Change to IAS 32 - Financial Instruments: Presentation, adopted by EU 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 EU Regulation 574 issued on 30 June 2010;
• Changes to IAS 24 - Related Party Disclosures and Change to IFRS 8 - Operating segments, adopted by EU Regulation
632 issued on 19 July 2010;
• Changes to IFRIC 14 - Prepayments of a Minimum Funding Requirement, adopted by EU 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 EU Regulation 662 issued on 23 July 2010.
In addition, EU Regulation 149/2011 was published on 18 February 2011. This regulation has adopted a number of improvements to International Financial Reporting Standards to be applied from 1 January 2011.
At the date of approval of these consolidated financial statements, the IASB has issued the following accounting standards,
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interpretations and amendments, which have yet to be endorsed by the European Union and which, in certain cases, are
still at the consultation stage:
• IFRS 9 - Financial Instruments, as part of the review of the existing IAS 39;
• a number of Exposure Drafts (EDs), also issued as part of the review of the existing IAS 39, regarding Amortised Cost and
Impairment, the Fair Value Option for Financial Liabilities and Hedge Accounting;
• Exposure Draft (ED) “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 (ED) “Presentation of Financial Statements: Other Items of Comprehensive Income”;
• Exposure Draft (ED) “Revenue from Contracts with Customers” as part of the review of the existing IAS 11 and IAS 18,
regarding revenue recognition;
• Exposure Draft (ED) “Insurance Contracts” as part of the review of the existing IFRS 4, regarding the accounting treatment of insurance contracts;
• Exposure Draft (ED) “Leases” as part of the review of the existing IAS 17, regarding the accounting treatment of leases;
• Exposure Draft (ED) “Income Taxes: Deferred Tax: Recovery of Underlying Assets”.
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.
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 with the tax authorities that expired in 2007, in 2010 Poste Italiane SpA 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 2010, receivables due to the Parent Company from the MEF and the Cabinet Office amount to
approximately 1.85 billion euros. This amount consists of:
• receivables of over 854 million euros in the form of Universal Service Obligation (USO) subsidies. Of this amount, collection of approximately 770 million euros will only be possible following formalisation of the Contratto di Programma
(Planning Agreement) for the three-year period 2009-2011;
• receivables of approximately 606 million euros in the form of publisher tariff subsidies. Of this amount, approximately
310 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. This receivable has been accounted for at present value. There is no specific evidence that the remaining
amount has been budgeted for in full by the government and, during 2010, the Cabinet Office moved the date for fixing
the exact amount of subsidies payable from August 2009 to March 2010, whilst awaiting the outcome of the work of a
special interministerial committee;
• further receivables of 390 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 the last two items.
Of the total amount receivable, with a face value of over 1.85 billion euros, in the case of approximately 275 million euros
either no provision has been made in the government’s budget or there is no legislation establishing the procedures for
payment of Poste Italiane SpA, whilst the collection of approximately 1,080 million euros will 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
2010 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 2010 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 of 60
days (which will, however, following a recent amendment, enter into effect from 1 January 2012) from the date of
termination of employment 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. At 31 December 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 consolidated financial statements.
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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, makes it 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. The tests carried out at 31
December 2010 were based on projections contained in the three-year plans for the relevant cash generating units (Group
companies or their subsidiaries) for the period 2011-2013, and on the available economic forecasts for future reporting
periods. 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). An assumed growth rate of 2% was used in the tests carried
out at 31 December 2010.
In view of the exceptional operating environment, which made it very difficult to make medium/long-term projections
regarding macroeconomic and market conditions, the tests carried out during the year ended 31 December 2009 also
prudently took account of a possible deterioration in the parameters used in preparing the long-term plans for Group
companies operating in the Postal Services segment. This resulted in provisions accounted for in Other provisions for
liabilities and charges. These provisions were used in 2010 and the surplus released to the income statement.
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 difficult to produce forecasts that can, without any uncertainty, be defined as reliable.
At 31 December 2010 the fair value of the Parent Company’s operating properties was significantly higher than their carrying
amount. In determining the net carrying amount of operating Land and Buildings, 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 the Parent
Company’s operating Land and Buildings 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 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. If necessary, technical provisions are
topped up and the related charge expensed in the income statement.
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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 assets and liabilities and of the associated risks is primarily attributable to the
operations of the Parent Company and the insurance subsidiary, Poste Vita SpA.
Poste Italiane SpA
With regard to the Parent Company, financial transactions primarily regard BancoPosta’s operations as governed by
Presidential Decree 144/2001. In particular, these transactions regard management of the liquidity deposited in postal
current accounts, carried out under the Company’s own name but subject to restrictions on the investment of the liquidity
in compliance with the applicable legislation, the management of collections and payments in the name and on behalf of
third parties, the funding of assets and the investment of its own liquidity.
In compliance with the 2007 Budget Law, from that year Poste Italiane SpA has been required to invest the funds raised
as a result of postal current account deposits made by private customers in euro area government securities, whilst the
postal current account deposits of Public Sector customers have continued to be deposited with the MEF. In 2010
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 new investment model approved
by the Board of Directors in April. This new investment profile is, among other things, based on the results of continuous
monitoring of the performance of postal current account deposits, and on an updated statistical/econometric model of
deposits developed by a leading consulting firm. This model forms the basis of the Company’s investment policy with the
aim of mitigating exposure to interest rate and liquidity risk by predicting potential gaps emerging as a result of the need
to reconcile risk exposure with the necessity of earning returns linked to the market interest rate curve.
The Group’s own liquidity is managed 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 (note 14.7).
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 minimum guaranteed 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.
Index- and unit-linked products, classified under Branch III, include policies where premiums collected are invested in
structured bonds. For this type of product issued prior to the introduction of ISVAP Regulation 32 of 11 June 2009, the
company does not guarantee capital or a minimum return, and the associated financial risks are thus borne entirely by the
policyholder. For policies issued after introduction of the above regulation, however, the company only assumes liability for
the risk of insolvency of the issuer of the securities in which the premiums are invested. The company monitors constantly
changes in the risk profile of the individual products, with special emphasis on the issuer’s solvency risk.
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 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 SGR 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, which distinguishes between four main
types of risk (a non-exhaustive classification):
• 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 their 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.
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 authoritative regulatory yardstick provided by the Bank of Italy’s prudential supervisory standards,
despite the fact that the Parent Company is not required to apply such standards.
128
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”
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 2009 and 31 December
2010 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
2009 effects
Equity instruments
Other investments
1,648,523
65,274
1,583,249
102,720
17,217
85,503
(102,720)
(17,217)
(85,503)
86,570
1,654
84,916
(86,570)
(1,654)
(84,916)
-
-
Financial assets at
FV through profit or loss
9,371,422
574,539
(574,539)
566,109
(566,109)
8,430
(8,430)
-
-
8,769,793
601,629
544,288
30,251
(544,288)
(30,251)
535,973
30,136
(535,973)
(30,136)
8,315
115
(8,315)
(115)
-
-
30,020
34,880
(4,860)
8,076
9,383
(1,307)
(8,076)
(9,383)
1,307
8,076
9,383
(1,307)
(8,076)
(9,383)
1,307
-
-
-
-
11,049,965
685,335
(685,335)
660,755
(660,755)
8,430
(8,430)
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)
-
-
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)
Equity instruments
Structured bonds
Other investments
Fair value through profit or loss
Fair value through profit or loss (liab.)
Variability at 31 December 2009
Equity instruments
Structured bonds
Other investments
Fair value through profit or loss (liab.)
16,150 (16,150)
15,563 (15,563)
587
(587)
16,150 (16,150)
9,367
8,914
453
(9,367)
(8,914)
(453)
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 funds.
At year-end the Parent Company held 150,628 MasterCard Incorporated class B shares, with a fair value of 25,263
thousand (compared with 350,628 thousand shares, with a fair value of 60,808 thousand at 31 December 2009), 11,144
Visa Incorporated class C shares, with a fair value of 586 thousand euros (11,144 shares, with a fair value of 662 thousand
euros at 31 December 2009) whilst Poste Vita SpA’s separate Branch I portfolios held shares for 6,417 thousand euros
(compared with 3,804 thousand at 31 December 2009).
The MasterCard shares are not traded in a regulated stock exchange but, should the Parent Company decide to sell them,
they could be converted into an equal number of class A shares, which are traded on the New York Stock Exchange. The
change during the year was due to the combined effects of forward sales entered into before 31 December 2009, for
delivery in January and February 2010, and a 10% reduction in the share price.
In February 2011, the Visa shares held by the Parent Company, which at 31 December 2010 were not listed in a regulated
market, became convertible into class A shares traded on the NYSE.
For sensitivity analysis purposes, the value of the class A shares was associated with the corresponding class B shares,
taking into account the volatility of the shares traded on the NYSE.
Other investments included units of mutual funds held by Poste Vita SpA – amounting to 2,388,540 thousand euros
(1,579,978 thousand euros at 31 December 2009), to meet the commitments with policyholders under the separate Branch
I portfolios – and units of mutual funds held by the Parent Company, amounting to 3,830 thousand euros (3,271 thousand
euros at 31 December 2009), reflecting a temporary investment of excess liquidity. Based on the analyses performed, any
negative change in the value of the above securities held by Poste Vita SpA will not affect the minimum guaranteed return
payable to policyholders, as any such change would reflect entirely on insurance liabilities (shadow accounting).
Financial assets recognised at fair value through profit or loss
This item reflects investments by Poste Vita SpA (note 9.5) 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 32/2009,
are borne by policyholders. Such investments include structured bonds and units in mutual funds linked to the performance
of equity markets. The residual effects on income, as reported in the above table, were due to a limited number of units
purchased with the company’s free capital.
This item reflects warrants acquired to cover the benefits associated with the Branch III policies, “Alba”, “Terra” and
“Quarzo”(note 9.7).
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.
Trade receivables/payables due from and to overseas correspondents
The most significant net position (approximately 83% 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 2010 this position amounts to 596 thousand euros (2,182 thousand euros at 31
December 2009).
130
3.2 - Market risk - SDRs
2009 effects
Current assets in SDRs
Current liabilities in SDRs
2010 effects
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
71,672
(73,677)
77,995
(80,177)
5,839
(6,002)
(5,839)
6,002
5,839
(6,002)
(5,839)
6,002
-
-
(2,005)
(2,182)
(163)
163
(163)
163
-
-
59,787
(60,305)
68,907
(69,503)
3,668
(3,700)
(3,668)
3,700
3,668
(3,700)
(3,668)
3,700
-
-
(517)
(596)
(32)
32
(32)
32
-
-
260 days 260 days
At 31 December 2010, the net position in US dollars amounts to 71 thousand euros (20 thousand euros at 31 December
2009), a negligible sum for the purposes of this analysis.
Financial assets
At 31 December 2010 this item primarily reflects equity instruments held by the Parent Company (note 3.1) and Poste Vita
SpA’s investments in bonds, both denominated in US dollars.
3.3 - Market risk - US dollar
Effect on liabilities
towards
policyholders
+Vol
-Vol
Pre-tax
profit
Equity
reserves
+Vol
-Vol
Position
in USD/000
Position
in €000
+Vol
-Vol
260 days
260 days
260 days
260 days
260 days
260 days
2009 effects
Equity instruments
Fixed income instruments
Financial assets at FV
through profit or loss
89,190
88,553
637
61,912
61,470
442
-
-
-
-
4,306
4,306
-
(4,306)
(4,306)
-
2,446
1,698
2
(2)
-
-
-
-
2,446
91,636
1,698
63,610
2
2
(2)
(2)
-
-
4,306
(4,306)
2010 effects
Equity instruments
35,196
34,539
657
26,340
25,849
491
-
-
-
-
2,630
2,630
-
(2,630)
(2,630)
-
205
153
(67)
67
-
-
-
-
205
35,401
153
26,493
(67)
(67)
67
67
-
-
2,630
(2,630)
Date of reference of
the analysis
At 31 December 2010 Poste Vita SpA’s position in fixed income instruments, related to its obligations associated with
Branch I policies, amounted to 862 thousand US dollars, of which 205 thousand dollars are classified as financial
instruments at fair value through profit or loss. This position is almost entirely hedged against exchange rate fluctuations
through forward sales of 1,352 thousand US dollars, the fair value of which is recognised in profit or loss. To this end, the
effects indicated refer to the notional amount of forward sales in excess of the amount of the fixed income instruments held.
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’s activities, and by Poste Vita SpA, the following interest rate sensitivity analysis
was based on changes in fair value following a parallel shift in the forward yield curve (+/- 100 bps).
3.4 - Market risk - Fair value interest rate
towards
policyholders
Pre-tax profit
Notional
Fair value
+100bps
-100bps
2009 effects
Assets attributable to BancoPosta(1)
14,670,700
14,092,700
578,000
Derivative financial instruments (liabilities)
-
15,108,809
15,067,840
40,969
-
-
-
Other investments
22,557,039
22,557,039
-
23,428,558
23,428,558
-
(1,149,630) 1,266,293
(1,149,630) 1,266,293
-
953,384
953,384
771,229
771,229
(48,792)
(48,792)
Derivatrive financial instruments
2,124,547
71,684
Fair value through profit or loss (liabilities) 2,052,863
(7,547)
61
(7,608)
(83,694)
(1,508)
(82,186)
Financial assets at FV through profit or loss
+100bps -100bps
Equity reserves
+100bps
-100bps
-
- (732,385)
- (687,053)
- (45,332)
-
794,709
745,103
49,606
-
-
-
(17,699)
(17,699)
-
18,980
18,980
-
48,850
48,850
-
-
-
-
83,694
1,508
82,186
-
-
-
-
40,305,670
39,301,049
(1,282,116) 1,398,837
-
- (750,084)
813,689
2010 effects
15,237,350
14,517,350
100,000
620,000
14,521,868
14,535,568
225
(13,925)
-
-
-
- (924,776)
- (868,629)
- (48,906)
(7,241)
1,017,810
955,634
54,216
7,960
Available-for-sale financial assets(2)
Other investments
28,543,901
28,543,901
-
28,443,893
28,443,893
-
(1,447,192) 1,609,527
(1,447,192) 1,609,527
-
-
-
(60,409)
(60,409)
-
70,270
70,270
-
4,209,033
4,209,033
3,274,718
3,274,718
(175,808)
(175,808)
175,675
175,675
-
-
-
-
-
-
-
-
-
-
-
-
47,990,284
46,240,479
(1,623,000) 1,785,202
-
- (985,185) 1,088,080
Financial assets at FV through profit or loss
Derivatrive financial instruments
Fair value through profit or loss (liabilities)
(1)
At 31 December 2009 held-for-trading financial assets with a nominal value of 100,000 thousand euros (fair value through profit or loss) were not
considered, as these are not subject to the risk in question as they were hedged through forward sales with settlement in January 2010.
(2)
The effects for 2010 were measured only for the portfolio instruments that were not hedged against changes in fair value.
132
BancoPosta’s investment securities (note 14.3) are nearly equally split between Held-to-maturity (HTM) and Available-forsale (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.
This item includes fixed income government securities (ordinary BTPs) with a nominal value of 12,443,600 thousand euros
(11,474,000 thousand euros at 31 December 2009) and positions in inflation-linked BTPs (BTP€i) with a nominal value of
2,073,750 thousand euros (2,618,700 thousand euros at 31 December 2009). The BTP€i, which carry floating rates indexed
to European inflation, have been swapped for fixed-rate positions (cash flow hedge). A portion of the fixed-rate portfolio,
made up of ordinary BTPs, was instead partially hedged against the risk of changes in fair value via asset swap contracts:
- BTPs with a notional amount of 500,000 thousand euros were hedged against the risk of changes in their fair value via
an IRS, effective immediately;
- BTPs with a notional amount of 2,450,000 thousand euros maturing 2026, 2034 and 2040 were partially hedged against
the risk of changes in their fair value via IRSs, starting in 2015, 2016 and 2020, respectively (forward start).
These hedging transactions are described in note 14.4.
During 2010, also due to the above-mentioned transactions to realign portfolio maturities to the new replication model
approved by the Board of Directors, the duration of the AFS financial assets was 6.23 (at 31 December 2009 the portfolio’s
duration was 4.60), thus increasing, though not to a significant extent, the sensitivity of the fair value of the portfolio to
changes in interest rates.
At 31 December 2010, this form of interest rate risk also influenced the fair value of forward purchases of securities
attributable to BancoPosta and having a notional value of 720,000 thousand euros (note 14.4). These derivative financial
instruments are being settled and the related sensitivity analysis, shown solely to ensure full disclosure in table 3.4,
therefore represents a prudential measurement.
The fixed income instruments considered in this analysis have a fair value of 27,922,704 thousand euros, compared with a
notional amount of 27,994,401 thousand euros (23,316,578 thousand euros and 22,446,039 thousand euros, respectively,
at 31 December 2009) and consist of Poste Vita SpA’s fixed income investments, totalling 26,440,892 thousand euros
(22,906,129 thousand euros at 31 December 2009) to cover its Branch I contractual obligations, and 1,481,812 thousand
euros (410,449 thousand euros at 31 December 2009) related to the company’s free capital.
This item included also investments by the Parent Company in short-term bank instruments with a fair value of 471,791
thousand euros (101,143 thousand euros at 31 December 2009) and a notional value of 100,000 thousand euros (100,000
thousand euros at 31 December 2009), as well as BTPs of a notional amount of 400,000 thousand euros (purchased during
the year). Of these, securities amounting to 375,000 thousand euros were hedged against changes in their fair value by
entering into an asset swaps, effective immediately (note 9.6).
The balance also includes fixed income investments with a fair value of 49,398 thousand euros vis-à-vis a notional amount
of 49,500 thousand euros (10,837 thousand euros and 11,000 thousand euros, respectively at 31 December 2009) held by
BancoPosta Fondi SpA SGR and Poste Assicura SpA
Financial assets at fair value through profit or loss.
This item reflects fixed income investments by Poste Vita SpA, totalling 3,274,718 thousand euros (771,229 thousand
euros at 31 December 2009). These consist of investments with a fair value of 3,210,624 thousand euros, relating to
coupon stripped11 BTPs (727,241 thousand euros at 31 December 2009) covering obligations associated with the Branch
11. Coupon stripping is the act of detaching the interest payment coupons from a note or bond. Coupon stripping transorms each government security into
a series of zero coupon securities. Each component may be traded separately.
III insurance products, and with a fair value of 64,094 thousand euros (43,988 thousand euros at 31 December 2009),
covering Branch I contractual obligations.
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.
At 31 December 2010 the following positions are subject to this risk:
Financial assets
Below, for each category of financial instrument the relevant credit exposure is shown. The ratings reported in the table
have been assigned by Moody’s.
3.5 - Credit risk - Financial assets
Item
From Aaa
from A1 from Ba1 to
to Aa3
to Baa3 Not rated
Loans and receivables
Loans
Receivables
723,686
723,686
-
28,435,440
Credit instruments
Poste Vita Branch I
Credit instruments
Poste Vita Branch III
Credit instruments
Poste Vita free capital
Other instruments and deposits
Credit instruments
Poste Vita Branch I
Credit instruments
Poste Vita Branch III
Credit instruments
Poste Vita free capital
Cash flow hedges
Fair value hedges
Total
from A1 from Ba1 to
to Baa3
Not rated
Total
From Aaa
to Aa3
749,870
1,630
748,240
807,970
807,970
-
55,886
1,233
54,653
863,856
1,233
862,623
2,019,294
148,307 30,603,041
24,452,153
1,543,605
124,696
26,120,454
26,247,903
1,851,121
144,209
28,243,233
23,760,089
1,529,822
122,695
25,412,606
-
-
-
-
-
-
-
-
1,562,398
625,139
168,173
-
2,000
2,098
1,732,571
627,237
470,677
221,387
13,783
-
1,000
1,001
485,460
222,388
8,229,209
1,948,396
277,777 10,455,382
4,482,814
5,302,331
250,780
10,035,925
164,837
256,130
55,384
476,351
265,652
230,240
40,299
536,191
8,040,698
1,679,802
169,895
9,890,395
4,200,901
5,045,061
177,382
9,423,344
23,674
-
12,464
-
52,498
-
88,636
-
16,261
-
27,030
-
33,099
-
76,390
-
128,488
22,933
105,555
13
13
119
119
-
128,620
119
22,933
105,568
61
61
-
35,029
17
35,012
35,090
17
35,073
37,516,823
3,967,703
452,387 41,936,913
29,742,998
6,845,936
466,391
37,055,325
26,184
1,630
24,554
-
Total
As the international financial crisis peters out, 2010 witnessed the stabilisation of the creditworthiness of the Poste Italiane
group’s debtors. In fact, 2009 was characterised by an extensive rating review activity by the main agencies, with a significant
amount of downgrades. Consequently, the Group suffered from a deterioration of the weighted average rating of its exposure
(which went from AA to AA- in 2009), even though the associated financial assets continued to be investment grade.
134
During the year under review, the macroeconomic events that had an impact on the risk-return profiles of the Group’s
financial assets were the debt crises in Greece and Ireland, which caused spreads among European government bonds to
widen, with a particular impact on those related to Italy’s sovereign risk and the continuing uncertainty about the health of
the banking sector. Nevertheless, the weighted average rating of the Group’s exposure at 31 December 2010 was
unchanged from that at 31 December 2009 (AA-).
Receivables (note 9.2) primarily regard the Parent Company’s claims on the parent, the MEF, amounting to 639,202
thousand euros (769,500 thousand euros at 31 December 2009), and on the counterparties involved in asset swap and
interest rate swap transactions (with collateral provided by a specific Credit Support Annex12), totalling 90,074 thousand
euros (55,660 thousand euros at 31 December 2009), which were entered into as cash flow hedges and fair value hedges,
respectively, and in repurchase agreements (collateral governed by a specific Global Master Repurchase Agreement), in
the form of guarantee deposits (almost entirely with counterparties with investment grade ratings).
This item also includes receivables of 2,351 thousand euros, representing advances made in relation to the subscription of
shares in mutual funds, where the investment has yet to be completed, and receivables of 9,677 thousand euros, which
were written down in 2008 by 8,777 thousand euros as due from a bank that had been declared bankrupt.
Available-for-sale financial assets are described in note 9.3. 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 are described in note 9.5. These included Poste Vita SpA’s
investments in structured bonds of 6,787,051 thousand euros (8,769,793 thousand euros at 31 December 2009), which
are subject to credit risk in connection with the crisis that characterised the financial markets. As these were financial
instruments designed to cover Branch III insurance policies, any impairment of elements classified under this item
translates into lower liabilities towards customers. This item also includes 3,210,624 thousand euros in coupon stripped
BTPs (727,241 thousand euros at 31 December 2009). A comment on this item was made in connection with the interest
rate risk to which the fair value of these instruments is subject and which is borne entirely by Poste Vita SpA.
Derivative instruments are described in note 9.6. These include warrants purchased by Poste Vita SpA, and reported at a
fair value of 105,555 thousand euros (34,880 thousand euros at 31 December 2009), and asset swaps, reported at a fair
value of 22,933 thousand euros, which were entered into by the Parent Company to hedge BTPs with a notional amount
of 375,000 euros against interest rate risk. 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. Exposure is monitored at
current value, in accordance with the Bank of Italy’s prudential supervisory instructions.
The Parent Company’s operational characteristics, related in particular to BancoPosta’s investment activities, give rise to a
significant exposure toward the Italian State, involving essentially deposits with the MEF and the majority of holdings of
Italian government securities (note 14.1). Overall, the type of credit risk involved may be defined via the grouping together
of the various positions based on the quality of issuer or counterparty, as represented by the following ratings:
• Italian Republic: A+ for S&P and Aa2 for Moody’s;
• French Republic: AAA for S&P and Aaa for Moody’s;
The fair value of derivative financial instruments included in Assets attributable to BancoPosta amounts to 88,205 thousand
euros and primarily reflects asset swaps serving as cash flow hedges (fair value equal to 25,956 thousand euros) and fair
value hedges (fair value equal to 62,024 thousand euros). At 31 December 2010 all counterparties for the Group’s
derivatives have investment grade ratings.
During the year accreting13 asset swap contracts on long-term BTP€i were entered into, with a notional amount that varies
over time, so as to minimise collateral requirements.
All asset swap transactions are conducted within the scope of the Credit Support Annex.
12. Under these contracts, counterparty risk is limited through periodic margining, whereby if the fair value of the derivative instrument exceeds a set value,
the debtor must post adequate collateral with the creditor.
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.
Non-current assets - Other assets
3.6 - Credit risk
31 December 2010
31 December 2009
Carrying
amount
Specific
impairment
Carrying
amount
Specific
impairment
Trade receivables due from Public Sector entities
216,583
-
254,315
-
Trade receivables due from tax authorities
378,578
-
340,133
-
Receivables due under fixed-term contracts settlement 225,347
(2,189)
233,796
(2,189)
-
6,073
-
Item
Guarantee deposits paid to suppliers
6,197
Third-party deposits in Postal Savings Books
registered in the name of Poste Italiane SpA
2,957
-
3,101
8,333
-
1,326
-
81
-
-
-
Other receivables
Total
of which past due
838,076
-
838,744
-
Current assets - Trade receivables
3.7 - Credit risk
31 December 2010
Item
Private customers
Due from parents
Public Sector
Cassa Depositi e Prestiti
Overseas postal operators
Due from subsidiaries, joint ventures and associates
Prepayments to suppliers
Total
of which past due
31 December 2009
Carrying
amount
Specific
impairment
Carrying
amount
Specific
impairment
977,772
1,171,053
760,420
822,000
174,043
9,766
346
3,915,400
541,101
(34,473)
(72,855)
(90,171)
(20,556)
(4,296)
-
996,283
1,124,197
905,694
918,045
224,078
9,595
60
4,177,952
411,719
(40,936)
(77,230)
(96,765)
(20,556)
-
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.
3.8 - Credit risk
31 December 2010
31 December 2009
Carrying
amount
Specific
impairment
Carrying
amount
Specific
impairment
Prepaid taxes
Receivables due from others
Other amounts due from subsidiaries
Accrued income and prepaid expenses
368,347
217,537
34
17,316
(123,416)
-
274,901
221,467
49
9,921
(128,408)
-
Total
of which past due
603,234
1,572
Item
506,338
973
136
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 by the need to raise funds at unfair rates.
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.
At 31 December 2010 liquidity risk regards the potential exposure deriving from obligations relating to the investment of
deposits by current account customers and to the holders of Branch I insurance policies issued by Poste Vita SpA.
In terms of the Parent Company, the liquidity risk associated with BancoPosta’s activities regards the investment of current
account deposits in euro area 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
prudential 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 30 years. Though not as conservative
as the previous model, which assumed withdrawals over a period of no more than 10 years, the new model is sustainable
in view of deposit trends and the highly liquid nature of investments, thus enabling a parallel improvement in the return
profile. This approach is also in line with the Bank of Italy’s prudential supervisory requirements.
At 31 December 2010 the degree of the match between the maturities of investments in euro area government securities
and the new portfolio replication model approved by the Board of Directors is being calculated, whilst the average term to
maturity of investments as a whole has risen from 4.53 years at 31 December 2009 to 5.56 years at 31 December 2010.
The components of the financial statements most subject to liquidity risk are described below. The amounts shown refer
to the Group’s obligations at maturity (nominal value plus accrued interest).
In order to analyse liquidity risk at 31 December 2010, the timing of withdrawals from postal current accounts held by
third parties (with a carrying amount of 39,476,478 thousand euros) was determined as follows:
• in the case of private customers’ deposits, whose funds are invested in euro area government securities, on the
basis of the amortisation schedule deriving from application of the statistical model developed in order to model the
behaviour of current account holders;
• in the case of Public Sector customers, by taking account of the fact that the Parent Company is required to deposit the resulting liquidity with the MEF, and that all changes in the amount due to current account holders is matched
exactly in the balance of the amount deposited with the Ministry after a delay of one bank working day. For this reason both items have been classified as being available on demand.
The following table shows liabilities increased by the expected cash flows generated by the related interest expense.
Postal current accounts are net of postal current accounts in the name of Group companies.
3.9 - Liquidity risk
31 December 2010
Within 12 Between 1
months and 5 years
31 December 2009
Over
5 years
Item
Cassa Depositi e Prestiti and
the MEF for management
of postal savings
73,403
Other payables
221,017
Derivative financial instruments 681,696
Repurchase agreements
389,212
Postal current accounts
13,123,999
66,467
10,826,667
73,403
287,484
681,696
389,212
13,398,910 37,349,577
Total liabilities
10,893,134 13,398,910 38,781,372
14,489,327
Total
Within 12 Between 1
months and 5 years
Over
5 years
Total
70,766
222,796
547,709
13,953,567
68,108
10,737,423 13,194,061
70,766
290,904
547,709
37,885,051
14,794,838
10,805,531 13,194,061 38,794,430
At 31 December 2010 these liabilities are invested in the following types of financial instrument. Investments in fixed income
instruments (a carrying amount of 29,303,781 thousand euros, as described in note 14.2) 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.
Within 12 Between 1
months and 5 years
Over
5 years
Total
Amounts due from the MEF 7,014,078
Poste Italiane SpA’s own
liquidity held in postal
current accounts
(840,624)
Amounts due from
the Italian Treasury
1,188,592
Other receivables
548,717
2,351,245
(Capital + Interest)
3,583,258 11,348,216
-
7,014,078
8,320,632
-
(840,624)
-
1,188,592
548,717
2,351,245
-
28,551,677 43,483,151
3,289,121 14,220,634 17,136,087 34,645,842
Total assets
28,551,677 53,745,159
14,405,448 14,220,634 17,136,087 45,762,169
Item
13,845,266 11,348,216
Within 12 Between 1
months and 5 years
Over
5 years
Total
-
-
8,320,632
(1,515,829)
-
-
(1,515,829)
839,808
706,910
2,660,696
104,110
-
-
839,808
706,910
2,660,696
104,110
The liquidity risk profile at 31 December 2010 has increased slightly from the preceding year, due to the realignment, which
is still under way, of the investment maturities with the new statistical model utilised to define the maturity profile of the
deposit base.
Whilst demand deposits from Public Sector entities fell, demand deposits from private customers are up, above all the retail
component, which is typically more stable. Nevertheless, the Parent Company continues to closely monitor the deposit base.
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 2010 liabilities
attributable to Branch I policies have an average term to maturity of 6.78 years, compared with an average duration of the
matching assets of 5.25 years (approximately 8.75 and 4.19 years, respectively, at 31 December 2009). The financial
instruments intended to cover the technical provisions for Branch III have maturities that match those of the liabilities.
138
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 2010 and 31 December 2009.
Item
Within 12 Between 1
months and 5 years
Over
5 years
Total
Within 12 Between 1
months and 5 years
Over
5 years
Total
Financial liabilities at fair value
Borrowings
975,383
2,967
Current account balances
of subsidiaries
545
Other financial liabilities
2,032,620
721,564
1,456,433
375
8,317
-
721,564
2,440,133
3,342
300,408
1,792,604
1,690,799
1,715,405
3,342
12,298
-
1,690,799
2,028,111
1,795,946
20,821
262,362
545
2,315,903
1,351
2,083,241
20,070
250,466
1,351
2,353,777
Total
2,199,193
270,679
5,481,487
4,177,604
3,429,616
262,764
7,869,984
3,011,515
At 31 December 2010 the main changes in the structure of the Group’s debt with respect to 31 December 2009 regard
the settlement of the forward purchases of stripped BTPs and warrants by Poste Vita SpA (note 9.6) and the repayment
of 1,005,189 thousand euros by Poste Vita SpA (note 24.1) in relation to the maturity of certain financial contracts.
Moreover, in the fourth quarter of 2010 the Parent Company introduced new short-term funding arrangements via the
matched sale repurchase of BTPs held in BancoPosta’s portfolio with the objective to optimise profitability and to meet
temporary cash withdrawals from demand deposits.
Current liabilities - Trade payables
Item
Within 12 Between 1
months and 5 years
Over
5 years
Total
Within 12 Between 1
months and 5 years
Over
5 years
Total
Suppliers
1,417,354
Subsidiaries, joint ventures
and associates
17,704
Prepayments from customers
187,452
Interest payable to current
account holders
66,303
-
-
1,417,354
1,467,575
-
-
1,467,575
-
-
17,704
187,452
21,807
208,798
-
-
21,807
208,798
-
-
66,303
91,720
-
-
91,720
Total
-
-
1,688,813
1,789,900
-
-
1,789,900
1,688,813
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 2009 and 31 December 2010, 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 summarised in
the table below, and calculated to reflect changes resulting from a parallel shift in the forward yield curve (+/- 100 bps).
3.13 - Cash flow interest rate risk and hedging policy
Date of reference
of the analysis
2009 effects
Non-current financial assets
Fixed income (floating rate) instruments
Other investments
Nominal
position
towards
policyholders
+100bps
-100bps
3,228,077
107,500
31,209
-
(31,209)
-
Due from MEF
6,804,803
-
-
Current financial assets
Financial receivables
Bank and post office deposits
55,660
Pre-tax
profit
+100bps
1,072
1,075
-100bps
Equity
reserves
+100bps
Total
equity
-100bps
+100bps -100bps
(1,072)
(1,075)
-
-
1,072 (1,072)
1,075 (1,075)
68,048 (68,048)
-
-
68,048 (68,048)
-
557
(557)
-
-
557
(557)
2,025,790
-
-
20,258
(20,258)
-
-
20,258 (20,258)
(250,000)
-
-
(2,500)
2,500
-
-
(2,500)
2,500
(10,144)
-
-
-
(101)
-
101
-
-
-
(101)
-
101
-
11,961,686
31,209
(31,209)
88,409 (88,409)
-
-
2010 effects
Other investments
3,008,822
93,550
23,412
-
(23,412)
-
6,676
936
(6,676)
(936)
-
-
Due from MEF
500,000
6,173,454
-
-
5,000
61,735
(5,000)
(61,735)
-
-
90,074
-
-
901
(901)
-
-
1,079,739
-
-
10,797
(10,797)
-
-
10,797 (10,797)
(250,000)
-
-
(2,500)
2,500
-
-
(2,500)
2,500
(12,193)
(39,720)
-
-
(122)
(397)
122
397
-
-
(122)
(397)
122
397
10,643,726
23,412
(23,412)
Bank borrowings
Borrowings
(postal current account overdrafts)
Sundry financial liabilities
88,409 (88,409)
6,676
936
(6,676)
(936)
5,000 (5,000)
61,735 (61,735)
901
(901)
Bank borrowings
Borrowings
83,026 (83,026)
83,026 (83,026)
Financial assets - Fixed income instruments
Cash flow interest rate risk concerns investments in floating-rate financial instruments, or rendered such by the use of fair
value hedges, that, at 31 December 2009 and 31 December 2010, were recognised as Available-for-sale and at Fair value
through profit or loss.
Based on the analysis as of 31 December 2010, the effects of the risk in question on the cash flows related to the investments
of the Branch I policies sold by Poste Vita are not currently deemed such as to affect the minimum guaranteed return to
140
policyholders and reflected entirely on the liabilities towards policyholders. In terms of consolidated income statement, the
effects of this risk were related to the investment of Poste Vita SpA’s free capital and the Parent Company’s cash.
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.
Lastly, the risk in question concerns a notional amount of 375,000 thousand euros in fixed-rate BTPs held by the Parent
Company, which were hedged against any market risk that might change their fair value, as described in the paragraph on
fair value interest rate risk.
At 31 December 2010 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, in accordance
with the method provided for by the European Commission in its Decision of 16 July 2008 and set out in the related
agreement between the MEF and Poste Italiane SpA, which was approved by Ministerial Decree of 7 April 2009. Although
the amounts involved are lower, this risk also regards the liquidity deposited in a Buffer Account with the MEF, which earns
interest in accordance with the treasury services agreement renewed on 18 June 2009. This is calculated as the average
yield on auctions of Short-term Treasury Certificates (BOT) organised by the MEF during the relevant six-month period.
Moreover, as noted above, this risk concerns a portion of the fixed-rate portfolio related to BTPs, whose fair value was
hedged against any market risk as follows:
- BTPs with a notional amount of 500,000 thousand euros through IRS contracts, which took effect immediately;
- BTPs with a notional amount of 2,450,000 thousand euros maturing in 2026, 2034 and 2040 through IRS contracts, which
will take effect in 2015, 2016 and 2020, respectively (forward start).
BANKING BOOK INTEREST RATE RISK
This is the risk, or the probability, that movements in interest rates will have a negative impact on an entity’s operating
results and financial position. 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 most of the risk in question is linked to the investment of the funds deriving from the postal current
account deposits of private customers in euro area government securities, as well as the liquidity held by Public Sector
entities in current accounts with the Parent Company, which must be deposited with the MEF. Returns on the investment
of these funds is related to general trends in interest rates, as the Parent Company takes a commercial approach to their
management, and interest paid on these deposits is not index-linked:
• investments in euro area government securities yield a return based on the interest rates prevailing at the time of purchase; BancoPosta’s securities portfolio is currently invested in fixed income instruments, or floating rate instruments that
yield fixed interest payments thanks to the asset swaps described above (note 3.4)14;
• as noted elsewhere (note 3.13), the funds deposited with the MEF yield floating interest payments.
14. The residual use of fair value hedges, in contrast, primarily enables the inclusion, among potential investments, of longer term securities, reducing the
related durations and thus the volatility of the related fair values.
Both types of investment are associated with an interest rate risk profile that is analysed and monitored with respect to
the financial characteristics of the instruments and is managed through an adequate hedging policy (note 14.4). As a result,
at 31 December 2010 forward purchases with a notional value of 720,000 thousand euros, maturing in 2011, are in place,
in addition to asset swaps with a notional value of 2,073,750 thousand euros.
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).
3.14 - Fair value hierarchy
Item
Level 1
Level 2
31 December 2010
Level 3
Total
Level 1
31 December 2009
Level 2
Level 3
Total
Financial assets
24,734,313 16,429,709 3,197,605 44,361,627 23,179,222 13,007,314
2,262,564 38,449,100
AFS financial assets
Equity instruments
Other investments
24,554,434
6,417
24,544,187
3,830
3,127,837
61,470
2,975,366
91,001
1,646,752 27,776,456
7,479
72,753
59,294 26,029,452
1,579,979 1,674,251
177,355
177,355
-
9,844,519
1,074,726
8,769,793
-
615,680 10,637,554
14,051 1,266,132
- 8,769,793
601,629
601,629
-
34,958
Financial assets at fair value
Structured bonds
Other investments
6,025,587 2,455,140 33,035,161 23,001,867
25,849
7,484
39,750
3,804
5,907,640
59,116 30,510,943 22,994,792
92,098 2,388,540 2,484,468
3,271
179,879 10,275,502
179,879 3,488,451
- 6,787,051
-
742,465 11,197,846
- 3,668,330
- 6,787,051
742,465
742,465
-
128,620
14,535,568
88,205
- 14,623,773 15,171,861
40,969
- 15,212,830
Investments in financial instruments
AFS
Held-for-trading
14,535,568
14,535,568
-
-
- 14,535,568 15,171,861
- 14,535,568 15,067,840
104,021
-
- 15,171,861
- 15,067,840
104,021
-
88,205
Total assets at fair value
-
-
128,620
88,205
40,969
39,269,881 16,517,914 3,197,605 58,985,400 38,351,083 13,048,283
-
(721,564)
(721,564)
-
-
(721,564)
(721,564)
-
Liabilites attributable to BancoPosta
-
(90,501)
(90,501)
-
(90,501)
(90,501)
Total liabilities at fair value
-
(812,065)
-
(812,065)
-
132
-
35,090
40,969
2,262,564 53,661,930
- (1,705,888)
- (1,690,799)
(15,089)
- (1,705,888)
- (1,690,799)
(15,089)
-
-
(93,082)
(93,082)
- (1,798,970)
(93,082)
(93,082)
- (1,798,970)
142
3.15 - Changes in financial instruments at fair value (Level 3)
Item
AFS
Financial assets
Financial assets
at fair value
Derivative
through profit or
financial
loss
instruments
Total
Opening balance at 1 January 2009
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)
1,259,405
298,631
(1,786)
81,871
8,631
-
658,698
81,512
(149,549)
24,927
66
26
132
-
1,918,235
380,143
(151,335)
24,927
81,871
66
8,631
26
Closing balance at 31 December 2009
Purchases/Issues
Sales/Extinguishment of initial accruals
Redemptions
Changes in fair value through profit or loss
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)
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
2,455,140
742,465
-
3,197,605
At 31 December 2010 available-for-sale financial assets, measured at Level 3 fair value, primarily consist of Poste Vita SpA’s
investments in mutual funds, totalling 2,388,540 thousand euros, to cover its obligations to policyholders in respect of
separately managed Branch I accounts (which increased during the year as a result of new purchases totalling 826,950
thousand euros), and 59,116 thousand euros in new bonds in respect of Branch I policies. The remainder regards investments
in equity instruments, totalling 7,484 thousand euros (including 4,617 thousand euros belonging to the Parent Company).
The change in the fair value of the instruments in question, amounting to 38,448 thousand euros, is almost entirely
reflected in a matching increase in insurance liabilities, in accordance with the shadow accounting method.
At 31 December 2010 financial instruments at fair value through profit or loss, measured at Level 3 fair value, consist of
Poste Vita SpA’s investments in mutual funds, totalling 742,465 thousand euros, to cover obligations in respect of Branch
III unit-linked policies (note 9.5).
The change in the fair value of the financial instruments in question is almost entirely reflected in insurance liabilities
towards policyholders.
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 the
BancoPosta unit and the asset management company BancoPosta Fondi SpA SGR.
Changes to the Operational Risk Management system used by Poste Vita SpA, first implemented in 2009, were
consolidated during 2010 (redesign of the Business Process Model and of the classification of risk factors and operational
risk events).
Insurance risk
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 death frequencies exceed 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 2010 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 policies,15 and the
minimum guaranteed capital in case of death, as required by the contracts for separate portfolio products;
• repayment of the insured capital for policies providing temporary death benefit protection.
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.
As Poste Vita’s mixed and whole-life policies have cash value build-up features, accumulating in accordance with a preestablished interest rate, 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 same considerations apply to Branch III, for which the investment risk is not borne by the company.
The options embedded in the policies held in portfolio include:
• Surrender option;
• Minimum return guarantee option;
• Annuity conversion option.
15. 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.
144
For nearly all the products in the portfolio there are no surrender penalties. This might create problems in recovering commissions in case of annual premiums, but these types of deferred premiums are not present in the portfolio, as there are
only single premiums or recurring single premiums. The surrender risk becomes significant in the event of mass surrenders, which have a low probability of occurrence.
The minimum return guaranteed by contract is 1.5%16 per non-consolidated event,17 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.
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.
2004/39/EC, “MiFID”), the Parent Company has adopted the “consulting service” model.
The crisis of recent years has had profound effects on the performance of all the financial instruments on the market, especially those whose returns are magnified. These instruments, which are used exclusively, and on a residual basis, by the
subsidiary Poste Vita SpA to invest the premiums collected on so-called Branch III policies, are inevitably exposed to higher
risk and volatility of their fair value.
Even though the Group has developed over time prudential policies in the customers’ best interests, which entails the
selection of domestic and foreign issuers solely with investment grade ratings, the situation prompted closer scrutiny at
Group level, so as to ensure full awareness of the performance of the products placed and the risks for the customers that,
to this day, characterise these products18.
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 2010 is solid and balanced, and adequately protected from liquidity or refinancing risks. Overall borrowings are primarily medium/long-term, except for bank overdrafts, which are of a limited
amount. 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 1,230 million euros, of which 300,000 thousand euros has been used. The Group also has overdraft facilities in place, totalling 69.1 million euros, of which 12.2 million
euros has been temporarily used, and bank guarantee facilities with a value of approximately 289.1 million euros (with 174.5
million euros available to the Parent Company), of which guarantees with a value of 105 million euros have been used.
16. For a residual share of the portfolio, there is no guaranteed return.
17. In case of death, surrender and expiration.
18. In this regard, Poste Vita issued over the years Branch III index- and unit-linked policies, that call for the investment of the premiums paid in a structured bond
or in mutual funds whose increase in value reflects on the value of the policies. 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 credit and financial risks associated with them are borne by the customer. In order to protect its own good name and reputation, and those of its Group, as well as its credentials as a capable operator, the Company constantly
monitors developments in the risk profile. Particular attention was given to monitoring certain financial instruments underlying index-linked policies issued in
the period 2001-2002 by Programma Dinamico SpA, a securitisation vehicle set up under Law 130/99 that matches the definition of control established in the
combined provisions of IAS 27 and SIC 12. These instruments, whose remaining fair value at 31 December 2010 is 378 million euros, bring together different
financial positions, including securitisation transactions and credit and financial derivatives (CDOs - Collateralised Debt Obligations), whose past performances
were affected by the financial and credit market crisis. In this context, in May 2009 and December 2008 Poste Vita SpA offered the holders of certain Branch
III policies the opportunity to convert these policies into Branch I policies providing minimum returns guaranteed by the Company. Whilst it is true that, in
accordance with the legal nature of the products in question, the related investment risk is transferred to policyholders, the Company has carried out the
restructuring initiatives in order to safeguard its commercial interests, which could be prejudiced by widespread dissatisfaction among customers, and the
potential impact on its reputation as a result of a general expression of discontent.
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 “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
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.
In response to the legislation enacted on 26 February 2011, described in note 41, the Parent Company will, in application
of the Bank of Italy’s prudential requirements, set aside capital exclusively in relation to BancoPosta’s operations. As a
result, the methods of measuring and presenting the performances of the operating segments may be revised.
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
5,065
298
5,363
Financial
Services
4,946
8
4,954
Non-cash expenses
(488)
(159)
(0)
(90)
(0)
(6,953)
(58)
9
-
-
(547)
(7,193)
Total non-cash expenses
(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
6,737
41,934
42,887
803
4,904
(1,541)
95,725
Liabilities
5,003
41,488
42,553
257
5,251
(3,210)
91,342
2010
External revenue
Intersegment revenue
Total revenue
Finance income/(costs)
Income tax expense
Other information
Capital expenditure
Investments accounted for
using the equity method
(*)
Insurance
Other
Services Services
11,206
619
0
167
11,206
786
Unallocated Adjustments and
items
eliminations
(473)
(473)
379
0
1
54
-
-
434
3
-
-
4
-
-
7
Elimination of cost incurred by Poste Italiane SpA for interest paid to consolidated subsidiaries (recognised by the latter in finance income).
Total
21,837
21,837
146
(€m)
2009
Postal
Services
Financial
Services
Insurance
Other
Services Services
Unallocated Adjustments and
items
eliminations
Total
External revenue
Intersegment revenue
Total revenue
5,227
278
5,505
4,964
8
4,972
9,376
0
9,376
531
138
669
-
(424)
(424)
20,098
20,098
Non-cash expenses
Total non-cash expenses
(488)
(278)
(766)
(0)
(118)
(118)
(0)
(6,934)
(6,934)
(67)
(34)
(101)
-
-
(555)
(7,364)
(7,919)
Finance income/(costs)
Income tax expense
(208)
-
1,422
-
272
-
107
-
(5)
6 (*)
(6)(*)
1,599
(11)
1
-
0
0
(685)
-
1
(685)
904
Assets
6,858
42,763
37,533
853
5,144
(2,209)
90,942
Liabilities
5,350
41,059
37,709
190
4,959
(2,900)
86,367
450
0
0
58
-
-
508
3
-
8
4
-
-
15
Other information
Capital expenditure
Investments accounted for
using the equity method
(*)
Elimination of cost incurred by Poste Italiane SpA for interest paid to consolidated subsidiaries (recognised by the latter in finance income).
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 1,068 million euros (2,039 million euros at 31 December 2009), non-current financial
assets of 1,721 million euros (1,389 million euros at 31 December 2009), deferred tax assets of 760 million euros (645
million euros at 31 December 2009), prepaid taxes of 747 million euros (615 million euros at 31 December 2009), current
financial assets of 556 million euros (406 million euros at 31 December 2009), and current tax assets of 52 million euros
(50 million euros at 31 December 2009). Financial assets and cash relating to the insurance activities of Poste Vita SpA are
allocated to the “Insurance Services” segment.
Unallocated liabilities consist of current financial liabilities of 2,941 million euros (2,333 million euros at 31 December 2009),
non-current financial liabilities of 1,661 million euros (1,846 million euros at 31 December 2009), deferred tax liabilities of
294 million euros (417 million euros at 31 December 2009), current taxes payable of 310 million euros (283 million euros
at 31 December 2009) and current tax liabilities of 44 million euros (80 million euros at 31 December 2009). Current and
non-current financial liabilities are accounted for after deducting Poste Vita SpA’s financial liabilities allocated to the
“Insurance Services” segment.
Information about geographical segments, based on the geographical areas in which the various Group companies are
based, is not material. At 31 December 2010 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.
5 - PROPERTY, PLANT AND EQUIPMENT
The following table shows changes in Property, plant and equipment in 2009 and 2010:
5.1 - Changes in Property, plant and equipment
Plant and
equipment
Industrial and
commercial
Leasehold
equipment improvements
Assets in the course
Other of construction and
assets
prepayments
Land
Operating
properties
Cost
Accumulated depreciation
Accumulated impairments
76,520
-
2,617,351
(880,804)
(1,482)
2,302,340
(1,588,238)
(30,698)
277,355
(212,448)
(770)
Carrying amount
76,520
1,735,065
683,404
64,137
118,602
231,753
326,842
3,236,323
Changes during the year
Purchases
Adjustments
Reclassifications
Disposals
Depreciation
Impairments
608
495
(2,773)
(345)
-
49,649
63
58,631
(8,189)
(94,169)
(12,550)
96,705
58,357
(1,070)
(154,790)
(705)
12,645
2,125
(2)
(17,649)
-
18,054
41,530
(466)
(20,343)
(750)
42,217
47,944
(571)
(90,554)
-
69,018
(30)
(205,466)
-
288,896
528
348
(10,643)
(377,505)
(14,005)
Total changes
(2,015)
(6,565)
(1,503)
(2,881)
38,025
(964)
(136,478)
(112,381)
Cost
74,505
-
2,715,167
(972,686)
(13,981)
2,137,771
(1,442,842)
(13,028)
292,212
(230,186)
(770)
Carrying amount
74,505
1,728,500
681,901
625
(26)
(93)
(462)
27,479
286
(1,528)
(99,108)
(1,266)
44
Cost
Carrying amount
481,907 1,163,092
(363,304) (931,291)
(1)
(48)
Total
326,842 7,245,407
- (3,976,085)
(32,999)
218,649 1,246,954
(62,017) (1,016,117)
(5)
(48)
190,364 6,875,622
- (3,723,848)
(27,832)
61,256
156,627
230,789
190,364
3,123,942
44,302
52,830
(1,099)
(147,912)
(397)
12,525
26
(90)
(14,548)
-
28,103
37,988
(3)
(26,356)
(947)
60,679
41,739
(395)
(86,766)
(12)
73,343
(166,053)
(22)
-
247,056
(33,210)
(3,230)
(374,690)
(3,084)
(74,137)
(52,276)
(2,087)
38,785
15,245
(92,732)
(167,158)
74,652
(103)
2,717,568
(1,047,958)
(15,247)
2,148,453
(1,506,136)
(12,692)
304,041
(244,102)
(770)
74,549
1,654,363
629,625
Adjustments
Cost
Other liabilities
-
-
Total
-
Reclassifications
Cost
Total
Purchases
Adjustments(1)
Reclassifications(2)
Disposals(3)
Depreciation
Impairments
Total changes
283,696 1,344,837
(88,249) (1,098,743)
(35)
(60)
97,632 6,970,879
- (3,985,188)
(28,907)
59,169
195,412
246,034
97,632
2,956,784
-
-
-
2
(2)
-
2
(2)
-
-
-
-
-
-
-
(26)
-
(22,243)
22,529
45,800
7,030
35
(9)
38,821
(833)
41,734
5
(166,053)
-
(61,932)
28,722
(26)
286
52,830
26
37,988
41,739
(166,053)
(33,210)
(452)
359
(2,835)
1,307
-
(79,420)
77,588
733
(731)
641
-
(1,877)
957
917
(4,530)
4,135
-
(22)
-
(89,867)
84,628
2,009
(93)
(1,528)
(1,099)
(90)
(3)
(395)
(22)
(3,230)
(1)
(2)
Disposals(3)
Cost
Total
148
At 31 December 2010 Property, plant and equipment includes assets belonging to the Parent Company located on land
held under concession or sub-concession, which are to be handed over free of charge at the end of the concession term,
with a carrying amount of 173,782 thousand euros (179,850 thousand euros at 31 December 2009).
The principal changes during 2010 are described below.
Capital expenditure of 247,056 thousand euros, including 4,738 thousand euros in capitalised costs and expenses,
primarily regards:
• 27,479 thousand euros, relating primarily to the purchase and maintenance of properties owned by the Group, including
23,015 thousand euros relating to the extraordinary maintenance of post offices, local head offices and mail sorting offices, and 3,996 thousand euros regarding the purchase of premises used as post offices;
• 44,302 thousand euros relating to plant, with the most significant items regarding the Parent Company and relating to
plant for buildings (23,280 thousand euros) and the purchase of sorting equipment used at Sorting Centres (11,253 thousand euros). The total also includes capital expenditure carried out by the Postel Group, totalling 3,154 thousand euros
and primarily relating to printing and enveloping systems;
• 12,525 thousand euros primarily relating to the purchase of security equipment for post office access and for the deposit of cash and sundry documents;
• 28,103 thousand euros invested almost entirely by the Parent Company in plant upgrades (17,816 thousand euros) and
structural improvements (9,625 thousand euros) for properties held under lease;
• 60,679 thousand euros regarding other assets and primarily relating to the Parent Company. This includes 34,166 thousand euros for the purchase of new computer hardware for post offices and head offices and the expansion of storage
systems, 8,075 thousand euros for the purchase of furniture and fittings in connection with the new layouts for post offices, and 4,427 thousand euros for the purchase of other durable goods used in delivery activities;
• 73,343 thousand euros, primarily referring to the Parent Company’s investments in progress, with 32,292 thousand euros
for the purchase of computer hardware and other equipment yet to enter service, 18,319 thousand euros relating to the
restyling of post offices, and 8,313 thousand euros regarding the restructuring of Sorting Centres. The total also includes
8,124 thousand euros invested by Postel SpA and regarding the purchase of latest-generation printing and enveloping
equipment that has yet to enter service and the restructuring of storage facilities.
Impairments of 3,084 thousand euros, relating almost entirely to the Parent Company, primarily regard:
• 1,020 thousand euros relating to assets located on land held under concession or sub-concession, for which, 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;
• 947 thousand euros regarding leasehold improvements following early termination of the leases.
Reclassifications from assets in the course of construction, totalling 166,053 thousand euros, primarily regard the purchase
cost of assets that became available and ready for use during the year. Above all, such assets regard the installation of
equipment at Sorting Centres, the rollout of hardware held in storage and completion of the process of restyling leased
properties.
Disposals, with a carrying amount of 3,230 thousand euros, primarily regard the sale of operating properties (1,528
thousand euros) and the disposal of obsolete production plant (1,099 thousand euros). The impact of these disposals on
the income statement is described in note 30.2.
The following table shows a breakdown by category of property, plant and equipment held under finance leases at 31
December 2010 and 2009:
5.2 - Assets held under finance leases
31 December 2010
31 December 2009
Cost
Accumulated
depreciation
Net carrying
amount
Buildings held under finance leases 17,043
(4,345)
64,835
6,824
88,702
Item
Plant and equipment held
under finance leases
Other assets (hardware)
Total
Cost
Accumulated
depreciation
Net carrying
amount
12,698
17,043
(3,834)
13,209
(63,795)
1,040
65,087
(61,859)
3,228
(3,144)
3,680
6,824
(2,224)
4,600
(71,284)
17,418
88,954
(67,917)
21,037
The following table provides further information about the Group’s finance leases at 31 December 2010:
5.3 - Reconciliation of total future lease payments and present value
31 December 2010
Item
Payments from 1 January 2011
to end of lease term
Interest
Present value
13,826
2,520
11,306
Buildings
Plant and equipment
Total
732
8
724
2,329
164
2,165
16,887
2,692
14,195
5.4 - Financial liabilities by maturity
31 December 2010
Item
Buildings
Plant and equipment
within 12 months
between 1 and 5 years
over 5 years
Total
829
3,716
6,761
11,306
720
4
-
724
1,483
682
-
2,165
Total
3,032
4,402
6,761
14,195
150
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 2010 and 2009:
6.1 - Changes in Investment property
Balance at 1 January
Cost
Carrying amount
Purchases
2010
2009
215,714
(56,918)
(5,120)
153,676
238,645
(57,484)
(8,736)
172,425
1,180
607
Disposals(2)
Depreciation
Reversals of impairments/(Impairments)
Total changes
26,452
(11,787)
(7,679)
1,103
9,269
(625)
(11,838)
(8,710)
1,817
(18,749)
Balance at 31 December
Cost
Carrying amount
247,198
(80,819)
(3,434)
162,945
215,714
(56,918)
(5,120)
153,676
Cost
Total
50,009
(23,557)
26,452
(1,743)
653
465
(625)
Disposals(2)
Cost
Total
(19,705)
7,335
583
(11,787)
(21,795)
8,623
1,334
(11,838)
Following a change in use, the portion of a property owned by the Parent Company, with a carrying amount of 27,672
thousand euros, was reclassified from operating properties to this asset category.
The fair value of Investment property at 31 December 2010 amounts to 326 million euros. This value includes approximately
240 million euros representing the market prices of the investment property, based primarily on independent valuations, and
86 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 2009 and 2010:
7.1 - Changes in Intangible assets
Cost
Accumulated amortisation
Carrying amount
Purchases
Adjustments
Reclassifications
Transfers and disposals
Amortisation
Impairments
Total changes
Cost
Carrying amount
Purchases
Transfers and disposals(2)
Amortisation
Impairments
Total changes
Cost
Carrying amount
Cost
Total
Transfers and disposals(2)
Cost
Total
Industrial patents,
intellectual property
rights, concessions,
licences, trademarks and
similar rights
Intangible assets
in progress and
prepayments
Goodwill
1,048,245
(783,295)
(1,356)
263,594
80,467
(99)
80,368
36,819
36,819
139,285
57,615
(4)
(152,633)
44,263
73,698
(101)
(59,189)
14,408
(950)
(950)
1,244,954
(935,741)
(1,356)
307,857
94,875
(99)
94,776
36,819
(950)
35,869
71,364
38,725
(392)
(157,553)
(212)
(48,068)
110,105
(44,541)
65,564
-
1,354,514
(1,093,178)
(1,547)
259,789
160,439
(99)
160,340
36,819
(950)
35,869
38,704
21
38,725
(44,541)
(44,541)
-
-
4,543
4,543
(1,294)
21
(1,273)
(508)
116
(392)
-
-
-
-
(508)
116
(392)
Goodwill arising
from consolidation
Other
Total
69,284 113,815 1,348,630
- (103,016) (886,311)
(1,212)
(6,690)
(9,357)
68,072
4,109
452,962
-
5,197
1,359
(3,689)
2,867
218,180
(101)
(215)
(4)
(156,322)
(950)
60,588
69,284 120,383 1,566,315
- (106,717) (1,042,458)
(1,212)
(6,690)
(10,307)
68,072
6,976
513,550
(13,390)
(13,390)
4,276
4,543
(5,117)
3,702
185,745
(1,273)
(392)
(162,670)
(13,602)
7,808
69,284 129,202 1,750,258
- (111,834) (1,205,012)
(14,602)
(6,690)
(23,888)
54,682
10,678
521,358
Investment in Intangible assets during 2010 amounts to 185,745 thousand euros, including 33,709 thousand euros
regarding software developed in-house by the Group.
The increase of 71,364 thousand euros in Industrial patents, intellectual property rights, concessions, licences, trademarks
and similar rights, before amortisation for the year, primarily refers to:
• 52,956 thousand euros regarding the purchase and entry into service of new software applications used by the Parent
152
Company for innovative Mail services, WEB Oriented services and BancoPosta services and in updating Asset and
Configuration Management. New software applications were also purchased for use in the maintenance, evolution and
development of the technology infrastructures used in the sale of BancoPosta services and in the updating of the
platform used to provide multi-channel services;
• 11,802 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 balance of Intangible assets in progress and prepayments includes uncompleted investment by the Parent Company,
primarily regarding the development of software used in BancoPosta services (42,637 thousand euros), the platform for
Integrated Web Services provided to postal customers (19,160 thousand euros), the infrastructure platform (15,610
thousand euros), the postal products platform (12,400 thousand euros) and the platform used in providing multi-channel
services (11,445 thousand euros).
During the year, 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 38,725 thousand euros. This
primarily reflects the release and entry into service of new software programmes and the evolution of existing programmes.
At 31 December 2010 Intangible assets include assets purchased under finance leases, the carrying amount of which is
as follows:
7.2 - Assets held under finance leases
31 December 2010
31 December 2009
Item
Industrial patents and intellectual
property rights, concessions,
licences, trademarks and
similar rights
Cost
Accumulated
amortisation
Net carrying
amount
Cost
Accumulated
amortisation
Net carrying
amount
48,972
(14,549)
34,423
37,494
(8,996)
28,498
Total
48,972
(14,549)
34,423
37,494
(8,996)
28,498
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, which expires on 31 December 2014, 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. At 31 December 2010
the software component amounts to 33,609 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 3,680 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 2010 the value of the intangible asset recognised is 814 thousand euros, after
accumulated amortisation.
The following table provides further information about the related finance leases:
7.3 - Reconciliation of total future lease payments and present value
31 December 2010
Payments from 1 January 2011
to end of lease term
Interest
Present value
Industrial patents and intellectual property rights,
concessions, licences, trademarks and similar rights
7,846
526
7,320
Total
7,846
526
7,320
Item
7.4 - Financial liabilities by maturity
31 December 2010
Item
Industrial patents and intellectual property rights,
concessions, licences, trademarks and similar rights
Total
within 12 months
over 5 years
Total
4,686
2,634
-
7,320
4,686
2,634
-
7,320
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.
7.5 - Goodwill
Balance at
31 December 2010
Balance at
31 December 2009
Postel SpA
Poste Italiane Trasporti SpA
30,288
3,296
2,285
30,288
3,296
1,544
741
Total
35,869
35,869
Name
Following the merger of Poste Italiane Trasporti SpA with and into SDA Express Courier SpA, the value of the related
goodwill was transferred to the acquiring company in 2010.
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.
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. These differences regard the following companies:
7.6 - Goodwill arising from consolidation
Balance at
31 December 2010
Balance at
31 December 2009
Postel SpA
Mistral Air Srl
35,036
14,712
4,934
-
46,010
14,712
4,934
2,416
Total
54,682
68,072
Name
Goodwill arising from consolidation has also been tested for impairment in accordance with the relevant accounting
standards. Based on the prospective information available and the results of the impairment tests conducted, the value of
goodwill arising from the consolidation of SDA Express Courier SpA has been written down by 13,390 thousand euros by
using the provisions made to cover such risks (in Other provisions for liabilities and charges) in 2009, as described in note
2.4 (Goodwill and Goodwill arising from consolidation). Based on the specific nature of the business and organisational
changes at SDA Express Courier SpA, the relevant impairment test was conducted on the basis of five-year projections.
154
8 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
This item includes the following:
8.1 - Investments
Item
Balance at
31 December 2010
Balance at
31 December 2009
4,178
12,821
Investments in subsidiaries
Investments in joint ventures
34
-
Investments in associates
2,459
1,838
Total
6,671
14,659
Changes in Investments accounted for using the equity method during 2009 and 2010 are as follows:
8.2 - Changes in Investments in 2009
Investments
Balance at
1 January 2009
Additions/
(Reductions)
Changes
in the basis
of consolidation
Adjustments
accounted for using
dividend
the equity method
adjustments
Balance at
31 December 2009
in subsidiaries
Address Software Srl
Consorzio Poste Contact
Chronopost International Italia SpA in liquidation
Docutel SpA
Poste Assicura SpA
Poste Tributi ScpA
Poste Voice SpA
Postel do Brasil Ltda
60
370
99
-
41
499
-
101
968
1,260
2,199
2,325
225
-
5,900
-
-
(63)
77
(171)
-
-
1,197
8,176
2,325
54
-
Total subsidiaries
6,439
5,999
-
383
-
12,821
24
24
-
(24)
(24)
-
-
-
in associates
Docugest SpA
Consorzio ANAC
Uptime SpA
Other SDA group associates
956
10
19
-
24
-
825
4
-
-
1,781
10
28
19
Total associates
985
-
24
829
-
1,838
7,448
5,999
-
1,212
-
14,659
in joint ventures
Uptime SpA
Total joint ventures
Total
8.3 - Changes in investments in 2010
Adjustments
accounted for using
dividend
the equity method
adjustments
Balance at
1 January 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
in joint ventures
Uptime SpA(1)
-
51
28
(45)
-
34
Total joint ventures
-
51
28
(45)
-
34
in associates
Docugest SpA
Consorzio ANAC
Telma-Sapienza Scarl
Uptime SpA
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
in subsidiaries
Docutel SpA
Kipoint SpA
Poste Assicura SpA
Poste Tributi ScpA
Poste Voice SpA
Total subsidiaries
Total
(1)
Balance at
31 December 2010
Measurement using the equity method was based on the latest available financial statements for the year ended 31 December 2009.
Changes during 2010, as described in note 8.3, regard:
• the merger of Consorzio Poste Contact, 70% owned by Poste Italiane SpA, 15% owned by Postecom SpA and 15%
owned by Postel SpA, with and into the subsidiary, Poste Link Scrl, on 24 February 2010, with effect for legal purposes
from 8 March 2010 and for accounting and tax purposes from 1 January 2010;
• the establishment by SDA Express Courier SpA alone, on 23 June, of Kipoint SpA, with share capital of 500 thousand
euros and the subsequent contribution of further capital of 500 thousand euros, with the aim of transferring the “Kipoint”
division acquired from PosteShop SpA to the new company; this transaction was completed on 27 October 2010 with
execution of the contract transferring the division;
• consolidation on a line-by-line basis of Poste Assicura SpA from 1 January 2010, following the company’s start-up of operations as a non-life company;
• the merger of Poste Voice SpA (a wholly owned subsidiary: 70% owned by Poste Italiane SpA, 15% Postel SpA and 15%
Postecom SpA) with and into the subsidiary, Poste Link Scrl on 15 June 2010, with effect for accounting and tax purposes from 1 January 2010; following registration of the merger deed on 25 June 2010, Poste Voice SpA was cancelled
from the Companies’ Register;
• the signature of new shareholder agreements between the shareholders of Uptime SpA, qualifying it as a company jointly controlled by SDA Express Courier SpA: on 28 April the General Meeting of the company’s shareholders approved a
proposal to cover its losses by using the entire share capital and to concomitantly recapitalise the company; SDA Express
Courier SpA subscribed 28.57% of the new capital;
156
• the subscription of 32.45% of the share capital of Telma-Sapienza Scarl at a cost of 490 thousand euros, following the
acceptance by this company’s shareholders of Poste Italiane SpA’s participation on 11 October 2010; the company is
engaged in research, training and the development of new methods of learning and is involved in experimenting with
new educational technologies.
On 16 November 2010 Docugest SpA, in which the subsidiary Postel SpA holds an interest, merged with and absorbed a
third company, CSAB Printing Srl, with effect for legal purposes from 1 December 2010. Following the resulting capital
increase carried out by Docugest SpA, Postel SpA’s interest was reduced from 50% to 37%. In addition, on 31 January
2011 Postel SpA acquired 162,151 shares in Docugest SpA, representing 12% of the company’s share capital, at the same
time transferring 152,556 shares in C-Global SpA, representing 17% of this company’s share capital, to a third company,
CEDACRI SpA. As a result of these transactions, at the date of preparing these consolidated financial statements, Postel
SpA owns a 49% interest in Docugest SpA.
9 - FINANCIAL ASSETS
At 31 December 2010 and 2009 Financial assets break down as follows:
9.1 - Financial assets
Non-current
assets
336,575
332
336,243
Current
assets
413,295
1,298
411,997
Equity instruments
Other investments
28,862,191
33,333
26,348,490
2,480,368
Financial assets at fair value
Structured bonds
Other investments
Item
Loans
Receivables
Cash flow hedges
Fair value hedges
Total
Total
749,870
1,630
748,240
Non-current
assets
445,335
14
445,321
Current
assets
418,521
1,219
417,302
Total
863,856
1,233
862,623
4,172,970
6,417
4,162,453
4,100
33,035,161
39,750
30,510,943
2,484,468
22,931,938
68,949
21,192,270
1,670,719
4,844,518
3,804
4,837,182
3,532
27,776,456
72,753
26,029,452
1,674,251
11,174,547
3,645,031
6,787,051
742,465
23,299
23,299
-
11,197,846
3,668,330
6,787,051
742,465
10,604,145
1,232,723
8,769,793
601,629
33,409
33,409
-
10,637,554
1,266,132
8,769,793
601,629
126,088
16
20,517
105,555
2,532
103
2,416
13
128,620
119
22,933
105,568
35,012
35,012
78
17
61
35,090
17
35,073
40,499,401
4,612,096
45,111,497
34,016,430
5,296,526
39,312,956
LOANS AND RECEIVABLES
Loans
This item includes 1,012 thousand euros relating to the portion not consolidated using the proportionate method of
consolidation of the loan formerly granted by SDA Express Courier SpA to Italia Logistica Srl, and 331 thousand euros
regarding the statutory membership fee paid by the Parent Company to Telma-Sapienza Scarl on subscribing shares in this
company. Following the entry of further potential subscribers, and in line with the investee company’s operating results, which
have yet to be reported for 2010, the fee will be allocated to Goodwill arising from consolidation and/or the investment.
Receivables
Receivables break down as follows:
9.2 - Financial receivables
Non-current
assets
Current
assets
324,503
Due from parent
repayment of loans accounted
for in liabilities
Total
Non-current
assets
Current
assets
Total
314,699
639,202
436,413
333,087
769,500
324,503
292,454
616,957
436,413
309,502
745,915
repayment of interest
on loan (Law 887/84)
-
9,633
9,633
-
11,665
11,665
interest on Poste Italiane SpA’s liquidity
-
5,601
5,601
-
7,838
7,838
repayment of sums in dormant accounts
-
7,011
7,011
-
4,082
4,082
11,737
-
11,737
8,906
-
8,906
Due from buyers of
service accommodation
Due from overseas postal operators
for international money orders
-
3,841
3,841
-
3,807
3,807
Due from others
3
102,234
102,237
2
89,185
89,187
-
(8,777)
(8,777)
-
(8,777)
(8,777)
336,243
411,997
748,240
445,321
417,302
862,623
Total
At 31 December 2010 the fair value of receivables, totalling 616,957 thousand euros, due from the parent, the MEF, as
repayment of loans accounted for in liabilities, amounts to 627,630 thousand euros. At 31 December 2009, the fair value
of this item, which at the time had a carrying amount of 745,915 thousand euros, was 777,094 thousand euros. The
carrying amount of the other receivables in this category approximates to fair value.
Receivables due from the parent, the MEF, amounting to 639,202 thousand euros, primarily regard a receivable of 616,957
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 cost19 of a receivable with a face value of 666,901 thousand euros, which is expected to be collected by 2016.
During 2010 the Parent Company collected receivables with a face value of 155,237 thousand euros and estimated accrued
finance income on the present value of the receivables to be 26,279 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 887/8420.
19. 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.
20. 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 2008 was, instead, paid to Poste Italiane SpA from 2007.
158
The face value of these receivables is as follows:
Legislation
Law
Law
Law
Law
227/75 (mechanisation of PO services)
39/82 (subsequent changes to PO services)
887/84
41/86
Total
Face value of receivable
21,885
382,714
260,344
1,958
666,901
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. The difference of 161,128 thousand euros between the face value of the receivable and the face
value of the liability of 505,773 thousand euros (note 24.2), which corresponds to the amortised cost, is due to repayment
of the principal falling due in 2010 and in the process of collection.
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 in the process of collection;
• 5,601 thousand euros due as accrued interest on the deposit of Poste Italiane SpA’s liquidity with the MEF in 2010;
• 7,011 thousand euros for amounts returned to customers holding dormant accounts, the balances of which had previously
been paid into a specific fund set up by the MEF, pursuant to Presidential Decree 116/2007. As envisaged by MEF Circular
11439 of 13 February 2009, the Parent Company, which has advanced the sums claimed to customers, applied to the Ministry
for reimbursement on 19 November 2010.
Amounts due from others, totalling 102,237 thousand euros, include:
• guarantee deposits, totalling 90,074 thousand euros, accounted for by the Parent Company in current assets, including
89,560 thousand euros established during the year in favour of counterparties with whom the Company has executed
asset swap transactions (with collateral provided by a specific Credit Support Annex) as part of Poste Italiane SpA’s cash
flow and fair value hedging policies (notes 9.6 and 14.4), and 514 thousand euros in favour of counterparties in outstanding repo liabilities on fixed income securities (with collateral provided by a specific Global Master Repurchase
Agreement) (note 14.7);
• 9,677 thousand euros due from a counterparty declared bankrupt in 2008, after write-downs of 8,777 thousand euros.
This refers to 9,000 thousand euros due to Poste Vita SpA in relation to the redemption of matured securities, and to 677
thousand euros resulting from early extinguishment of two Interest Rate Swaps carried out by the Parent Company in
accordance with the related contracts terms;
• 2,351 thousand euros relating to Poste Vita SpA and regarding the subscription of and payment for units of mutual funds.
AVAILABLE-FOR-SALE FINANCIAL ASSETS
Available-for-sale financial assets break down as follows:
9.3 - Available-for-sale financial assets
39,750
30,510,943
Equity instruments
Mutual investment funds
Fiduciary deposits
Other investments
2,392,370
92,098
72,753
26,029,452
1,583,250
91,001
Total
2,484,468
1,674,251
33,035,161
27,776,456
The following changes took place during the year:
9.4 - Changes in Available-for-sale financial assets
Equity instruments
Fixed income
instruments
Other
investments
Total
44,136
18,109,812
1,348,260
19,502,208
Investments of own liquidity
Investments by insurance segment
Fair value gains and losses through Equity
Fair value gains and losses through profit or loss
Transfers to the income statement
Accrued income
Disinvestments of own liquidity
Disinvestments by insurance segment
54
2,854
25,323
2,338
137
(2,089)
124,836
19,512,677
636,291
(103,121)
16,900
332,490
(420,586)
(12,179,847)
246,376
82,263
261
(1,446)
(1,463)
124,890
19,761,907
743,877
2,338
(102,984)
16,900
332,751
(422,032)
(12,183,399)
Investments of own liquidity
Investments by insurance segment
Fair value gains and losses through Equity
Transfers to the income statement
Accrued income
Disinvestments of own liquidity
Disinvestments by insurance segment
72,753
104
4,473
(1,333)
2,210
(40)
(37,356)
(1,061)
26,029,452
534,498
15,110,203
(1,086,108)
(24,569)
(79,916)
65,995
408,941
(111,558)
(10,335,995)
1,674,251
826,950
(14,608)
270
(261)
(2,134)
27,776,456
534,602
15,941,626
(1,102,049)
(22,359)
(79,956)
65,995
409,211
(149,175)
(10,339,190)
39,750
30,510,943
2,484,468
33,035,161
160
Financial instruments classified as Available-for-sale financial assets report a decrease in fair value of 1,102,049 thousand
euros for 2010. This amount reflects:
• fair value losses of 1,095,720 thousand euros deriving from the measurement of securities held by Poste Vita SpA, with
1,059,911 thousand euros transferred to policyholders, whilst a contra-entry is made in technical provisions, without therefore having any impact on consolidated Equity;
• net fair value losses of 6,329 thousand euros deriving from the measurement of other financial instruments, with 6,168
thousand euros on equity instruments, fixed income instruments and deposits held by the Parent Company.
The sum of the above changes in the fair value of Available-for-sale financial assets during 2010 results in a net decrease
in the relevant Equity reserve of 42,138 thousand euros (note 20.1).
Equity instruments
Equity instruments primarily include:
• 25,263 thousand euros relating to the fair value of 150,628 class B shares in MasterCard Incorporated (350,628 shares
with a fair value of 60,808 thousand euros at 31 December 2009). These equity instruments are not quoted on a regulated market but, should it be necessary to sell them, may be converted into an equal number of class A shares, which are
listed on the New York Stock Exchange. During the year under review the Parent Company settled the forward sale of
150,000 shares, under an agreement executed on 31 December 2009, and further forward sales of 50,000 shares in
January and February 2010, realising a total gain of 31,575 thousand euros;
• 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.
Fixed income instruments primarily regard investments held by Poste Vita SpA, totalling 29,975,803 thousand euros
(25,898,066 thousand euros at 31 December 2009). This refers to listed instruments with a face value of 29,006,893
thousand euros issued by European governments and major European companies, with 28,243,225 thousand euros
(24,792,262 thousand euros at 31 December 2009) 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.
This item also includes 471,791 thousand euros in investments in fixed income instruments by the Parent Company with a
total face value of 500,000 thousand euros. These instruments consist of bonds issued by Cassa Depositi e Prestiti SpA via
a private placement with a face value of 100,000 thousand euros (a fair value of 100,825 thousand euros) and BTPs acquired
during the year with a face value of 400,000 thousand euros (a fair value of 370,966 thousand euros), including 375,000
thousand euros immediately hedged via asset swaps and fair value hedges , as described in note 9.6. At 31 December 2010
a notional amount of 400,000 thousand euros regards restricted investments in securities used as collateral for repurchase
agreements entered into by the Parent Company (note 24.3).
Other investments
Other investments regard:
• units of mutual funds with a value of 2,392,370 thousand euros (1,579,978 thousand euros at 31 December 2009), including 2,359,817 thousand euros primarily consisting of equity funds and 28,723 thousand euros relating to real estate
funds, subscribed entirely by Poste Vita SpA and allocated to the insurance company’s separately managed accounts.
The balance is made up by 3,830 thousand euros relating to the fair value of units of mutual funds held by the Parent
Company;
• 92,098 thousand euros (91,001 thousand euros at 31 December 2009) regarding a fiduciary deposit with a face value of
93,550 thousand euros (107,500 thousand euros at 31 December 2009), established by the Parent Company in 2002 and
expiring on 5 July 2012, and paying interest at a floating rate. At 31 December 2010 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 thirdparty counterparties to hedge exposure to the credit risk of certain issuers. These CDSs have a total notional value of 65
million euros. Over the year under review the face value of the deposit has fallen by 13,950 thousand euros as a result of
losses, recognised in the income statement, following the bankruptcy of the one of the entities covered by the CDSs.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Changes in Financial assets at fair value through profit or loss were as follows in 2009 and 2010:
9.5 - Changes in Financial assets at fair value through profit or loss
Purchases/Disbursements
Accrued income
Sales/Settlement of accrued income
Purchases/Disbursements
Accrued income
Sales/Settlement of accrued income
Fixed income
instruments
Structured
bonds
Other
investments
Total
1,205,234
749,013
108,013
1,286
(797,414)
1,266,132
7,178,870
(111,931)
1,924
(4,666,665)
9,976,781
2,235,902
994,827
(4,437,717)
8,769,793
1,699,673
292,216
(3,974,631)
644,914
67,867
24,612
(135,764)
601,629
241,860
(4,385)
(96,639)
11,826,929
3,052,782
1,127,452
1,286
(5,370,895)
10,637,554
9,120,403
175,900
1,924
(8,737,935)
3,668,330
6,787,051
742,465
11,197,846
Financial assets designated at fair value through profit or loss are held by the subsidiary Poste Vita SpA and regard:
• fixed income instruments of 3,668,330 thousand euros (1,266,132 thousand euros at 31 December 2009), consisting of
3,210,624 thousand euros in coupon stripped BTPs (Italian Long-term Treasury Certificates) covering contractual obligations deriving from Branch III insurance policies, with the balance of 457,706 thousand euros primarily made up of corporate bonds issued by blue-chip companies and primarily linked to separately managed accounts in Branch I;
• structured bonds of 6,787,051 thousand euros (8,769,793 thousand euros at 31 December 2009) 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 378,150 thousand euros (333,946
thousand euros at 31 December 2009);
• other investments totalling 742,465 thousand euros (601,629 thousand euros at 31 December 2009) regarding units of
mutual funds primarily acquired to cover contractual obligations to the holders of Branch III unit-linked policies; this item
includes new investments of 179,389 thousand euros linked to the “Radar” product, a unit-linked policy launched in the
second half of the year under review.
162
DERIVATIVE FINANCIAL INSTRUMENTS
Changes in derivative assets and liabilities are as follows:
9.6 - Changes in Derivative financial instruments
2010
Purchases
Fair value gains and losses
Income/Expenses through
profit or loss
of which:
Derivative assets
Derivative liabilities
2009
Note
Cash flow
hedges
Fair value
hedges
Fair value
through
profit or loss
[20.1]
(269)
598
(2,314)
24,580
22,584
107,057
(46,119)
20,001
107,057
(20,941)
(2,261)
4,278
(3)
(2,320)
(210)
667
22,046
22,503
(2,286)
9
677
(1,600)
119
22,933
105,568
128,620
(269)
(2,314)
22,584
20,001
119
-
22,933
-
105,568
-
128,620
-
(269)
17
(2,331)
[9.1]
[24.1]
Total
Fair value
Cash flow Fair value
through
hedges hedges profit or loss
Total
(28,083) (30,347)
41,760 41,760
8,230 10,188
35,073 35,090
(12,489) (15,089)
Cash flow hedges
At 31 December 2010 outstanding derivative financial instruments with a positive fair value of 119 thousand euros consist
exclusively of two currency forwards executed in March 2007 by Mistral Air SpA in order to hedge the foreign exchange
risk linked with a notional amount of 4.6 million US dollars. This sum relates to the fees payable to suppliers for the lease
of two aircraft.
Fair value hedges
At 31 December 2010 outstanding derivative financial instruments with a positive fair value21 of 22,933 thousand euros
consist of 9 asset swaps used as fair value hedges entered into by the Parent Company during the year under review to
protect the value of BTPs with a notional value of 375 million euros from movements in interest rates. These instruments
have enabled the Parent Company to purchase a floating rate of 2.25% (the weighted average of the interest rates provided
for in the nine contracts) and sell the fixed rate on the BTPs of 3.75%.
During 2010 the Parent Company settled two forward sale agreements relating to the 150,000 class B shares in
MasterCard Incorporated and two forward sale agreements in US dollars executed by the Parent Company in 2009 to
hedge the price and foreign exchange risk exposures of the above shares. At 31 December 2009 these contracts had a fair
value of 2,331 thousand euros.
21. The fair value of these derivative instruments is based on the present value of expected cash flows deriving from the differentials to be exchanged.
Derivative financial instruments at fair value through profit or loss
At 31 December 2010 outstanding transactions primarily regard warrants executed by Poste Vita SpA to cover contractual
obligations deriving from Branch III policies already distributed and forward currency sales to hedge the redemption values
at maturity of securities covering insurance policy obligations.
Changes in assets and liabilities were as follows in 2010:
9.7 - Changes in derivative financial instruments at fair value through profit or loss
USD currency
forwards
Forward
purchase
of coupon
stripped BTPs
Forward
purchase
of warrants
(21)
(7,547)
(4,860)
Purchases
Income/Expenses through profit or loss
Warrants
Other less
significant
instruments
Total
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
13
-
-
-
105,555
-
-
105,568
-
of which:
Derivative assets
• the extinguishment of forward sales of US dollars outstanding at 31 December 2009 and executed to hedge the redemption
values at maturity of securities denominated in this currency; at 31 December 2010 these instruments have a notional value
of 1.4 million US dollars (3.1 million US dollars at 31 December 2009) and a positive fair value of 13 thousand euros;
• the settlement of 51 forward BTP purchase agreements outstanding at 31 December 2009 with a total notional value of
2,125 million euros, covering contractual obligations deriving from Branch I policies and the Branch III “Terra” policy;
• the execution and settlement during the year under review of 51 forward BTP purchase agreements with a total notional value of 2,125 million euros, covering contractual obligations deriving from Branch I policies and the Branch III
“Quarzo” policy;
• the settlement of the agreement outstanding at 31 December 2009 for the forward purchase of Index Linked Warrants
with a notional value of 1,500 million euros to cover the indexed component of returns on the Branch III “Terra” policy;
the transaction was completed with the purchase of the warrants at a value of 55,800 thousand euros;
• the execution and settlement of an agreement for the forward purchase of Index Linked Warrants with a notional value
of 1,500 million euros to cover the indexed component of returns on the Branch III “Quarzo” policy; the transaction was
completed with the purchase of the warrants at a value of 42,000 thousand euros.
Finally, at 31 December 2010 the Group’s position in warrants is represented by instruments with a total notional value of
3,800 million euros, as follows:
• 800 million euros in warrants purchased in 2009, with a fair value at 31 December 2010 of 24,000 thousand euros (34,880
thousand euros at 31 December 2009) to cover the indexed component of returns on the Branch III “Alba” policy;
• 1,500 million euros in previously referred to warrants, whose forward purchase was completed during the year under
review and which have a positive fair value of 42,555 thousand euros; these instruments are to cover the indexed component of returns on the Branch III “Terra” policy;
• 1,500 million euros in previously referred to warrants, whose forward purchase was completed during the year under
review and which have a positive fair value of 39,000 thousand euros; these instruments are to cover the indexed component of returns on the Branch III “Quarzo” policy.
164
10 - OTHER NON-CURRENT ASSETS
10.1 - Other non-current assets
Item
Note
Long-term portion of trade receivables due from Public Sector entities
[12.2]
Long-term portion of receivables due from staff under fixed-term
contracts settlement of 2006
Long-term portion of receivables due from IPOST under fixed-term
contracts settlements of 2006-2008
Provisions for doubtful debts due from staff
216,583
254,315
32,672
43,758
122,569
140,843
33,029
-
39,266
51,384
(2,189)
(2,189)
225,347
378,578
233,796
340,133
6,197
6,073
Third-party deposits in Postal Savings Books registered in the
name of Poste Italiane SpA
2,957
3,101
Other receivables
8,333
81
1,326
-
838,076
838,744
Tax assets
Total
Trade receivables are described in note 12.
The long-term portion of receivables due from staff under fixed-term contracts settlements consists of salaries and the
relevant contributions 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 2010 these receivables regard the
total residual present value of amounts due from staff and the pension fund, IPOST, totalling 293,416 thousand euros (after
provisions for doubtful debts). Amounts due from staff are recoverable in the form of variable instalments, the last of which
is due in 2030. 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.
10.2 - Receivables from fixed-term contracts settlements
Item
Receivables
due from staff under
agreement of 2006(1)
due from IPOST(4)
Total
Non-current
assets
Current
assets
32,672
Total
Face
value
Non-current
assets
Current
assets
Total
Face
value
14,397
47,069
52,203
43,758
16,375
60,133
66,974
122,569
28,477
151,046
178,534
140,843
38,923
179,766
213,159
33,029
39,266
(2,189)
11,352
13,843
-
44,381
53,109
(2,189)
56,515
55,372
-
51,384
(2,189)
13,843
-
65,227
(2,189)
69,215
-
225,347
68,069
293,416
233,796
69,141
302,937
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.
(3)
Discounted on the basis of the forward interest rate curve for government securities in issue at 31 December 2010.
(4)
(1)
(2)
The current portion of 68,069 thousand euros is accounted for in Other current receivables and assets (note 13).
Prepaid taxes include 378,300 thousand euros relating to a total receivable of 483,562 thousand euros (including 105,262
thousand euros accounted for in Current assets, as described in note 13.1), representing advance payment by Poste Vita
SpA of withholding tax and substitute tax on capital gains on life assurance policies for the years 2006 to 2010. Of this
amount, the sum of 147,220 thousand euros, calculated on the basis of provisions at 31 December 2010, regards the
amount still to be paid and accounted for in Other tax liabilities (note 26.4).
11 - INVENTORIES
Net Inventories break down as follows:
11.1 - Inventories
Item
Increase/(Decrease)
Work in progress, semi-finished and finished
goods and goods for resale
21,131
23,940
(2,809)
Properties held for sale
11,923
11,680
243
Raw, ancillary and consumable materials
11,136
8,888
2,248
8,087
8,087
-
Contract work in progress
Accumulated impairments of contract work in progress
(8,087)
-
(8,087)
Total
44,190
52,595
(8,405)
Work in progress, semi-finished and finished goods and goods for resale primarily refer to stocks of goods to be sold by
PosteShop SpA, which are primarily held in stock at post offices, and stationary and forms used in the Postel Group’s eprocurement activities.
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 2010 amounts to approximately 82 million euros.
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.
Work in progress refers to the interests of Postel SpA and its subsidiary, Postel do Brasil Ltda, in the long-term contract
for the sale by the investee company, BRPOSTAL consortium, which was wound up in 2010, of an integrated hybrid e-mail
platform in Brazil. During the year under review the process of liquidating Postel do Brasil Ltda was begun and the value
of the related provisions for contract risks (note 22.2) made in 2007 was reclassified as an adjustment of inventories.
166
12 - TRADE RECEIVABLES
Trade receivables break down as follows:
12.1 - Trade receivables
31 December 2010
Item
Customers
Parents
Subsidiaries
Joint ventures
Associates
Prepayments to suppliers
Non-current
assets
216,583
-
Current
assets
2,734,234
1,171,053
3,261
3,422
3,084
346
216,583
3,915,400
Total
31 December 2009
Total
2,950,817
1,171,053
3,261
3,422
3,084
346
Non-current
assets
254,315
-
Current
assets
3,044,101
1,124,197
4,691
2,154
2,749
60
Total
3,298,416
1,124,197
4,691
2,154
2,749
60
4,131,983
254,315
4,177,952
4,432,267
Total
1,114,500
842,556
Non-current
assets
254,315
-
CUSTOMERS
This item breaks down as follows:
12.2 - Customers
31 December 2010
Item
Ministries and Public Sector entities
Unfranked mail delivered on behalf of third
parties and other value added services
BancoPosta services
Overseas correspondents
Parcel, express courier and
express parcel services
Users of telegraphic services
Property management
Other trade receivables
Total
Non-current
assets
216,583
-
Current
assets
897,917
842,556
31 December 2009
Current
assets
1,042,314
938,601
Total
1,296,629
938,601
-
419,402
419,402
-
434,946
434,946
-
256,181
184,210
256,181
184,210
-
285,276
232,337
285,276
232,337
-
150,791
45,131
7,875
204,879
(274,708)
150,791
45,131
7,875
204,879
(274,708)
-
146,672
45,252
21,090
162,813
(265,200)
146,672
45,252
21,090
162,813
(265,200)
216,583
2,734,234
2,950,817
254,315
3,044,101
3,298,416
These items primarily regard amounts due from the following entities:
• Cabinet Office - Publishing Department: 568,709 thousand euros due to the Parent Company, corresponding to a face
value of 606,125 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 216,583 thousand
euros (corresponding to a face value of 253,999 thousand euros) is classified in Other non-current assets (note 10.1);
• 83,207 thousand euros due from INPS and INAIL, including 73,265 thousand euros due for the payment of pensions by
the Parent Company and 6,163 thousand euros due to the subsidiary Poste Link Scrl for the Contact Centre service;
• 61,114 thousand euros due to the Parent Company from the Ministry of Internal Affairs, including 37,948 thousand euros
for integrated notification services and 23,166 thousand euros as payment for the franking of mail on credit;
• 60,203 thousand euros due to the Parent Company from the Ministry for Economic Development, including 54,445 thousand euros as reimbursement of the costs associated with the management of property, vehicles and security (including
3,211 thousand euros in amounts accrued during the year);
• 44,161 thousand euros due to the Parent Company from the Ministry of Justice, primarily for the delivery of administrative notices (22,232 thousand euros) and for the payment service for legal system expenses (19,229 thousand euros);
• 39,814 thousand euros due to the Parent Company from the tax authorities, primarily deriving from the postage of unfranked mail (19,890 thousand euros), integrated mail services (9,321 thousand euros), the payment of tax rebates (3,604
thousand euros) and the collection of tax returns (3,362 thousand euros);
• 25,266 thousand euros due to the Parent Company from the Municipality of Rome, primarily in relation to the delivery of
administrative notices;
• 23,497 thousand euros due to the Parent Company from Lazio Regional Authority, primarily for the delivery of administrative notices;
• 20,582 thousand euros due from the Municipality of Milan to the Parent Company, primarily for the delivery of administrative notices.
This item includes 822,000 thousand euros in fees and commissions collected in February 2011 in relation to the
management of postal savings accounts in 2010, with the remainder regarding previous years.
Unfranked mail delivered on behalf of third parties and other value added services
292,410 thousand euros of this item regards receivables deriving from the Bulk Mail service and other value added
services, whilst a further 126,992 thousand euros regards receivables deriving from the delivery of unfranked mail on
behalf of third parties.
BancoPosta services
These receivables primarily regard:
• amounts due from current account holders in the form of accrued fees and charges, totalling 143,989 thousand euros;
• amounts due on insurance and banking services, on personal loans, on overdrafts and on mortgages sold on behalf of
third parties, totalling 91,317 thousand euros.
This item includes 183,664 thousand euros regarding postal services carried out by the Parent Company for overseas
postal operators, and 546 thousand euros relating to international telegraphic services.
Parcel, express courier and express parcel services
These receivables refer to services provided by the subsidiary, SDA Express Courier SpA, and to the mailing of parcels by
the Parent Company.
168
These receivables regard telegrams ordered by telephone (34,542 thousand euros) and other telegraphic services (10,589
thousand euros).
Other trade receivables primarily include the following items relating to the Parent Company:
• receivables deriving from unfranked mail on own behalf (50,331 thousand euros);
• receivables deriving from the distribution of telephone directories (9,706 thousand euros).
Changes in Provisions for doubtful debts are as follows:
12.3 - Changes in Provisions for doubtful debts
Balance at
1 Jan 2009
6,646
175,411
93,650
Net
provisions
1,613
(23,558)
5,368
Deferred
revenues
3,213
970
Uses
(1,426)
(2,423)
Balance at
31 Dec 2009
8,259
153,640
97,565
Net
provisions
1,922
6,609
8,328
Deferred
revenues
3,213
570
Uses
(14)
(10,398)
(2,535)
Balance at
31 Dec 2010
10,167
153,064
103,928
For overdue interest
275,707
4,904
(16,577)
2,861
4,183
-
(3,849)
(2,029)
259,464
5,736
16,859
3,542
3,783
0
(12,947)
(1,729)
267,159
7,549
Total
280,611
(13,716)
4,183
(5,878)
265,200
20,401
3,783
(14,676)
274,708
Item
Public Sector entities
Private customers
Net provisions (releases of provisions) for doubtful debts are accounted for in the income statement in Other operating costs
(note 37.1), 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 not be recoverable as a result of legislation restricting public
spending, delays in payment and problems at debtor entities.
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:
12.4 - 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
Total
854,330
185,217
155,758
36,322
6,026
6,255
(72,855)
841,503
201,778
109,064
36,322
6,026
6,734
(77,230)
1,171,053
1,124,197
Universal Service subsidies include 364,463 thousand euros representing the amount accruing in 2010, 371,830 thousand
euros in amounts accrued in 2009, 32,011 thousand euros in amounts accrued in 2008 and 33,642, 43,721 and 8,663
thousand euros regarding residual amounts accrued in 2007, 2006 and 2005. Following the signature and publication in the
Official Gazette of the addendum to the Contratto di Programma 2006-2008 (the Planning Agreement for the period 20062008), entered into by Poste Italiane SpA, the MEF and the Ministry for Economic Development, on 16 July 2010, it is now
possible to collect 352 million euros.
The remuneration of current account deposits refers entirely to amounts accruing in 2010 and almost entirely regards the
deposit of funds deriving from accounts opened by Public Sector entities.
Electoral subsidies include 66,794 thousand euros accruing in 2010, with the remainder attributable to previous years. At
31 December 2010 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 2010, with 7,972 thousand euros
regarding the residual amount due for 2008 and 2007.
Payment due for the distribution of euro coins includes 6,026 thousand euros for the supply and delivery of euro
converters, carried out at the time on behalf of the Cabinet Office. At 31 December 2010 these receivables have not been
budgeted for by the Government.
Other receivables primarily refer to the transport and franking of mail on credit and services linked to the “Social Card”.
12.5 - Changes in provisions for doubtful debts due from parents
Balance at
1 January 2009 Provisions
54,019
23,211
Deferred
revenues
Uses
Balance at
31 December 2009
Provisions
Deferred
revenues
-
-
77,230
(4,375)
-
Balance at
Uses 31 December 2010
-
72,855
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 have been based on the related financial impact. A portion of these provisions was released to the
income statement in 2010 following the collection of amounts previously deemed unlikely to be recovered.
SUBSIDIARIES
Trade receivables due from unconsolidated subsidiaries are as follows:
12.6 - Receivables due from subsidiaries
Name
Poste Tributi ScpA
Docutel SpA
Kipoint SpA
Poste Assicura SpA
Poste Voice SpA
2,421
495
289
56
-
1,568
1,535
144
982
364
98
Total
3,261
4,691
170
JOINT VENTURES
This item amounts to 3,422 thousand euros (2,154 thousand euros at 31 December 2009) and includes the portion of a
receivable due from Italia Logistrica Srl not accounted for using proportionate consolidation.
ASSOCIATES
This item amounts to 3,084 thousand euros (2,749 thousand euros at 31 December 2009) and primarily includes amounts
due from minor companies owned by SDA Express Courier SpA.
13 - OTHER CURRENT RECEIVABLES AND ASSETS
13.1 - Other current receivables and assets
Item
Prepaid taxes
368,347
274,901
346,932
353,033
(129,395)
(131,566)
Provisions for doubtful debts due from others
Accrued income and prepaid expenses from trading transactions
Total
34
49
17,316
9,921
603,234
506,338
PREPAID TAXES
These primarily include 249,297 thousand euros in advances that the Parent Company has paid to the tax authorities,
including 214,905 thousand euros in stamp duty to be paid in virtual form in 2011, and 34,392 thousand euros as withholding
tax on interest paid to current account holders for 2010. A further 105,262 thousand euros regards tax credits attributable
to Poste Vita SpA, as described in note10.1.
RECEIVABLES DUE FROM OTHERS
These primarily regard:
• 76,770 thousand euros (92,379 thousand euros at 31 December 2009) payable to BancoPosta by the heirs of INPS and
INPDAP pensioners, following the collection of pension payments after the death of the pensioners concerned;
• 68,069 thousand euros (69,141 thousand euros at 31 December 2009) relating to the current portion of the receivable
described in note 10.2 relating to pay and contributions and due from staff previously employed on fixed-term contracts,
who have been subsequently re-employed after acceptance of the union agreements of 13 January 2006, 10 July 2008
and 27 July 2010;
• 62,003 thousand euros deriving from the recharging of third-party postal current account holders of stamp duty paid by
the Parent Company in virtual form in accordance with existing legislation (63,158 thousand euros at 31 December 2009);
• amounts to be recovered by BancoPosta from the holders of postal savings books, totalling 13,816 thousand euros
(14,929 thousand euros at 31 December 2009), due to transactions in the process of being settled;
• 13,079 thousand euros in amounts stolen from the Parent Company in December 2007 as a result of an attempted fraud.
This amount is currently held by an overseas bank and 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 2010;
• 11,231 thousand euros (12,327 thousand euros at 31 December 2009) due from ministries and Public Sector entities in
the form of pay and contributions for personnel seconded to them by Poste Italiane SpA.
PROVISIONS FOR DOUBTUL DEBTS DUE FROM OTHERS
Changes in provisions for doubtful debts are as follows:
13.2 - Changes in provisions for doubtful debts due from others
Balance at
Net
Item
1 January 2009 provisions
Sundry receivables
attributable to BancoPosta
86,104
21,374
Public Sector entities for sundry services
13,546
(2,095)
Other
11,923
902
Total
111,573
20,181
Uses
Balance at
31 Dec 2009
Net
provisions
Balance at
Uses 31 Dec 2010
(171)
(17)
107,307
11,451
12,808
(16,669)
(984)
15,534
(52)
-
90,586
10,467
28,342
(188)
131,566
(2,119)
(52)
129,395
Provisions for sundry receivables attributable to BancoPosta regard amounts that the Group is expected to have difficulty
in recovering from private customers for transactions to be settled. 21,577 thousand euros of these provisions was
released to the income statement in 2010 following the collection of amounts previously deemed unlikely to be recovered
and the settlement of other doubtful accounts.
Provisions for amounts due from Public Sector entities regard accrued payments for the Parent Company’s staff seconded
to ministries and Public Sector entities. A portion of these provisions was released to the income statement in 2010,
following the collection of certain items previously deemed unlikely to be recovered.
14 - ASSETS AND LIABILITIES ATTRIBUTABLE TO BANCOPOSTA
These items refer to the balances of financial transactions carried out by the Parent Company pursuant to Presidential Decree
144/2001. In particular, these transactions regard management of the liquidity deposited in postal current accounts, carried
out under the BancoPosta name, but subject to restrictions on the investment of such liquidity in compliance with the
applicable legislation. The transactions also regard the management of collections and payments in the name and 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, which was renewed by Ministerial Decree on 18 June 2009, was valid until
31 December 2010 and is in the process of being renewed. This agreement requires BancoPosta to provide daily statements
of all cash flows, with a delay of one bank working day with respect to the transaction date.
The liquidity deriving from current account deposits by Public Sector entities must be invested with the MEF and is
remunerated at a floating rate in accordance with the specific agreement with the MEF approved by Ministerial Decree on 7
April 2009, which was valid until 31 December 2010 and is in the process of being renewed. This agreement applies the
European Commission’s Decision of 16 July 2008.
172
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 above agreement with the MEF for treasury services, which was renewed on 18 June 2009, has confirmed that a limited
portion of the funds deriving from deposits paid into postal current accounts by private customers may be invested 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
rate equal to the average yield on Short-term Italian Treasury Certificates (BOT) in the relevant six-month period.
ASSETS ATTRIBUTABLE TO BANCOPOSTA
These assets are shown less the Group’s liquidity (note 14.7) and include:
14.1 - Assets attributable to BancoPosta
Item
29,303,781
88,205
7,014,078
1,188,592
548,717
2,351,245
40,494,618
28,458,973
40,969
8,320,632
839,808
706,910
2,660,696
41,027,988
(840,624)
(1,515,829)
39,653,994
39,512,159
Investments in securities
Amounts due from the MEF
Amounts due from the Italian Treasury
Other receivables
Cash
Total assets attributable to BancoPosta
Poste Italiane SpA's own liquidity held in postal current accounts
Total
This item regards investments in fixed income euro area government securities with a face value of 29,027,000 thousand
euros, including 28,936,000 thousand euros invested in Italian government bonds and 91,000 thousand euros invested in
BTAN (Bon du Trésor à Taux Fixe et à Intéret Annuel) issued by the French government.
Investments break down as follows:
14.2 - Investments in securities
Maturing
Securities
Held-to-maturity (HTM)
Available-for-sale (AFS)
Held for trading (FVPL)
within
12 months
1,320,679
1,322,486
104,021
2,747,186
1,593,460
764,258
2,357,718
between
2 and 5 years
5,423,361
5,777,388
11,200,749
5,024,525
2,183,221
7,207,746
over
5 years
6,543,072
7,967,966
14,511,038
8,150,228
11,588,089
19,738,317
Total
13,287,112
15,067,840
104,021
28,458,973
14,768,213
14,535,568
29,303,781
Face
value
13,114,650
14,092,700
100,000
27,307,350
14,509,650
14,517,350
29,027,000
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 by a leading market player. An Asset & Liability Management system has been created to manage the match
between customer deposits and investments. During the year under review, based on experience over the last three years,
the Parent Company updated the replication model for deposits and began the process of bringing investment portfolio
maturities into line with the new model.
Changes in investments in securities in 2009 and 2010 are as follows:
14.3 - Changes in investments in securities
HTM
Securities
Face
value
AFS
Carrying
amount
Face
value
FVPL
Fair
value
Face
value
Face
value
Carrying
amount
12,993,663 1,150,000 1,145,600 26,300,000
4,299,497 2,923,750 2,928,565 10,353,350
(1,883,985) (3,773,750) (3,770,351) (6,934,750)
(911,250) (200,000) (200,000) (2,411,250)
(15,778)
-
26,765,256
10,509,174
(7,022,191)
(2,411,250)
16,433
Balance at 31 December 2008 12,519,800
Purchases
3,220,850
Sales
(1,326,000)
Redemptions
(1,300,000)
Transfers to Equity reserves
Increase/(Decrease)
in accrued income
Changes in fair value through PL
-
12,625,993 12,630,200
3,281,112 4,208,750
(1,367,855) (1,835,000)
(1,300,000)
(911,250)
32,211
-
Balance at 31 December 2009 13,114,650
Purchases
2,695,000
Sales
(150,000)
Redemptions
(1,150,000)
Increase/(Decrease)
in accrued income
Changes in fair value through PL
-
13,287,112 14,092,700
2,814,133 6,967,000
(154,059) (5,707,350)
(1,150,000)
(835,000)
(17,857)
-
17,645
9,912
(24,694)
(854,472)
-
14,768,213 14,517,350
14,535,568
-
14,509,650
11,760
3,891
-
(5,029)
(6,087)
-
-
Total
(717)
34,430
551,980
-
Fair
value
325
(118)
-
-
11,368
38,321
(118)
551,980
15,067,840
100,000
104,021 27,307,350
7,196,615 1,911,000 1,921,109 11,573,000
(5,814,550) (2,011,000) (2,025,807) (7,868,350)
(835,000)
- (1,985,000)
(227,728)
-
28,458,973
11,931,857
(7,994,416)
(1,985,000)
(245,585)
677
-
-
13,293
3,825
(24,694)
(854,472)
- 29,027,000
29,303,781
At 31 December 2010 the fair value of the held-to-maturity portfolio, accounted for at amortised cost, is 14,774,542 thousand
euros (including 227,567 thousand euros in accrued daily interest payments).
The fair value of the available-for-sale portfolio is 14,535,568 thousand euros (including 215,080 thousand euros in accrued
daily interest payments). A notional amount of 400,000 thousand euros regards restricted investments in securities used as
collateral for repurchase agreements (note 14.7). The overall fair value loss of 879,166 thousand euros for the year is
recognised in the relevant Equity reserve, consisting of a loss of 854,472 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 24,694 thousand euros relating to
the hedged portion. The deterioration reported reflects the downgrade of the Italian Government’s credit rating.
The following changes in securities held for trading at fair value through profit or loss took place during the year. These
transactions were executed with the primary aim of investing temporary spikes in deposits. In particular:
• spot purchases with a face value of 1,820,000 thousand euros were settled;
• sales of securities with a face value of 1,920,000 thousand euros were settled, including 1,270,000 thousand euros in spot
transactions, 100,000 thousand euros in forward transactions executed in 2009, and 550,000 thousand euros in forward transactions executed in 2010;
174
• the notional value of forward purchases of securities with a face value of 91,000 thousand euros has been recognised; these
were subsequently sold on the same terms in response to changed market conditions, in the belief that it was appropriate
to proceed with their substitution.
Changes in Derivative financial instruments during the year are as follows:
Cash flow hedges
Forward purchases
notional fair value
958,750
50,570
Fair value hedges
Asset swaps
notional fair value
FVPL
Asset swaps
notional fair value
1,674,950
3,957
-
-
Forward purchases
notional
fair value
-
-
Forward sales
notional fair value
1,450,000
(2,080)
Total
notional fair value
4,083,700
52,447
-
-
Discontinued CFHs
(958,750) (50,570)
-
-
958,750
50,570
-
-
Increases/(Decreases)(*)
2,802,850
49,854
2,458,750
(50,431)
-
-
-
9,316
2,273,750
(27,826)
Gains/(Losses) through
profit or loss(**)
-
7,520
-
(16,776)
-
-
-
-
-
-
(2,224,850) (16,405) (1,515,000)
(29,825)
-
-
(958,750)
(59,886)
(3,623,750)
29,899
(8,322,350) (76,217)
(93,075)
-
-
-
-
100,000
(7)
3,296,700 (52,113)
Transactions settled
(***)
Balance at 31 December 2009 578,000
40,969
Discontinued CFHs
2,618,700
(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)
profit or loss(**)
-
-
-
-
-
(24)
-
-
-
-
(1,587,000) (50,530)
(994,950)
2,476
-
2,864
(91,000)
(9,227)
(641,000)
2,550
Balance at 31 December 2010 720,000 (13,700)
2,073,750
(7,340)
2,950,000
18,744
-
-
-
-
Transactions settled
(***)
7,535,350 (19,087)
-
-
(9,256)
-
5,761,000 101,708
-
(24)
(3,313,950) (51,867)
5,743,750
(2,296)
88,205
including:
Derivative assets
100,000
225
400,000
25,956
1,100,000
62,024
-
-
-
-
1,600,000
620,000 (13,925)
1,673,750
(33,296)
1,850,000
(43,280)
-
-
-
-
4,143,750 (90,501)
(*)
Increases /(Decreases) refer to the notional value of new transactions and changes in the fair value of the overall portfolio during the period.
(**)
Gains and losses through profit or loss refer to any ineffective components of hedges, recognised in Other income and Other expenses from financial activities.
Transactions settled include forward transactions settled, accrued differentials and the extinguishment of asset swaps linked to securities sold.
(***)
During year under review the Parent Company carried out the following transactions in relation to cash flow hedges:
• the extinguishment of forward purchases outstanding at 31 December 2009 with a notional value of 91,000 thousand
euros, and resulting from discontinued22 cash flow hedges, with reclassification of the hedges to derivative financial
instruments at fair value through profit and loss (note 14.3);
• the settlement of outstanding forward purchases at 31 December 2009 with a notional value of 487,000 thousand euros;
• the execution of new forward purchase agreements with a notional value of 1,820,000 thousand euros (so-called cash
flow hedges of forecast transactions), including 1,100,000 thousand euros already settled at 31 December 2010;
• the execution of asset swaps on securities purchased during the period and with a notional value of 450,000 thousand
euros, and the extinction of asset swaps on securities sold, which were already protected by cash flow hedges, with a
notional value of 994,950 thousand euros; as a result of these transactions, at 31 December 2010 the Parent Company
reports outstanding assets swaps with a total notional value of 2,073,750 thousand euros, with which it has purchased
a fixed rate of 5.19% (the weighted average of the rates provided for in the contracts) and sold a floating rate on BTPs
(Italian Long-term Treasury Certificates) indexed to inflation (BTP€i).
22. Cessation 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.
These instruments recorded an overall fair value gain of 86,061 thousand euros during the year, which is reflected in the
Cash flow hedge reserve.
During 2010 the Parent Company 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 interest rate swaps with a total notional value of 2,950,000 thousand
euros, including 500,000 thousand euros to be activated immediately, 450,000 thousand euros to be activated in 2015,
500,000 thousand euros to be activated in 2016 and 1,500,000 thousand euros to be activated in 2020. The swaps have
enabled the Parent 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, these instruments have undergone an overall net fair value gain of 15,904 thousand
euros, whilst the hedged securities (note 14.3) have recorded a fair value loss of 24,694 thousand euros. The difference of
8,790 thousand euros is due to paid or maturing differentials.
Finally, with regard to derivative financial instruments measured at fair value through profit or loss, in addition to the above
discontinued hedges, carried out via forward sales, forward sales with a total notional value of 641,000 thousand euros
were settled during the year (including 100,000 thousand euros outstanding at 31 December 2009). These instruments
regard the investment of temporary spikes in deposits.
This item includes liquidity, amounting to 6,173,454 thousand euros (6,804,803 thousand euros at 31 December 2009),
deriving from the postal current account deposits of Public Sector entities transferred to the parent under the restriction
established by the Regent’s Decree 822 of 22 November 1945. It also includes 840,624 thousand euros (1,515,829
thousand euros at 31 December 2009) in deposits (the so-called Buffer Account) provided for in the above change to
the Agreement with the MEF approved by the Ministerial Decree of 14 December 2007.
14.5 - Amounts receivable from/(payable to) the Italian Treasury
Item
1,186,508
(679,417)
882,544
(729,443)
507,091
16
681,485
153,101
29
686,678
1,188,592
839,808
Amounts receivable from the Italian Treasury
MEF postal current accounts and other payables
Subtotal
Ministry of Justice
Ministry of the Economy and Finance
Total
The net balance of amounts payable to and receivable from the Italian Treasury is represented by advances from the MEF
to meet the cash requirements of post offices, less transfers of deposits and any excess liquidity by the Parent Company.
At 31 December 2010 this item was in credit.
176
Other receivables
Other receivables primarily relate to bank and postal cheques and bankers’ drafts (286,189 thousand euros), and amounts
due from customers in the form of withdrawals from ATMs yet to be registered on their accounts (94,291 thousand euros).
Cash attributable to BancoPosta
14.6 - Cash
Item
Cash in hand
Cheques
Bank deposits
2,314,930
50
36,265
2,627,251
124
33,321
Total
2,351,245
2,660,696
Cash essentially regards cash in hand held at post offices and by companies that provide cash transportation services
whilst awaiting transfer to the Italian Treasury.
LIABILITIES ATTRIBUTABLE TO BANCOPOSTA
Liabilities attributable to BancoPosta are accounted for after deducting the Group’s liquidity held in postal current accounts
in the names of consolidated companies. These liabilities break down as follows:
14.7 - Liabilities attributable to BancoPosta
Item
Payables deriving from postal current accounts
Balance of cash flows from management of postal savings
Other payables
Total liabilities attributable to BancoPosta
Amounts payable to consolidated companies
for postal current accounts
Note
[14.4]
Total
39,476,478
389,212
73,403
90,501
287,484
40,317,078
39,469,143
70,766
93,082
290,904
39,923,895
(2,506,216)
(2,205,574)
37,810,862
37,718,321
These payables regard amounts due to Poste Italiane group companies, totalling 255,778 thousand euros (96,882 thousand
euros at 31 December 2009). This includes 170,579 thousand euros deposited in postal current accounts by Poste Vita SpA
(23,880 thousand euros at 31 December 2009). The balance includes a payable of 200,000 thousand euros relating to a
time deposit made by a private customer and maturing by the end of 2011.
In 2010 the Parent Company executed twenty-six repurchase agreements with prime financial counterparties. These
transactions, amounting to 2,432,161 thousand euros, were entered into to optimise investments with respect to short-
term movements in deposits. At 31 December 2010 five contracts with a total value of 389,212 thousand euros remain
outstanding. They are due to mature by the end of January 2011.
This item represents the balance of deposits less withdrawals during the last day of 2010 and cleared on the first day of
the subsequent year. The balance at 31 December 2010 consists of 109,428 thousand euros payable to Cassa Depositi e
Prestiti (86,936 thousand euros at 31 December 2009) and a receivable due from the MEF for issues falling within its
competence, totalling 36,025 thousand euros (16,170 thousand euros at 31 December 2009).
Other payables
Other payables primarily regard 178,982 thousand euros in cheques presented for payment into postal savings books
(215,104 thousand euros al 31 December 2009).
Amounts payable to consolidated companies for postal current accounts
At 31 December 2010 the Group’s liquidity held in postal current accounts to be deducted from BancoPosta’s liabilities
amounts to 2,506,216 thousand euros. This amount is normally represented by demand deposits with the MEF held in the
so-called Buffer Account, totalling 840,624 thousand euros (note 14.1), and investments in securities, totalling 1,665,592
thousand euros, deriving from deposits in the form of financial instruments not subject to investment restrictions (note 24.5).
15 - CASH AND CASH EQUIVALENTS
15.1 - Cash and cash equivalents
Item
Bank and postal deposits
Cash in hand
Postal deposits invested in
Total
2,745,331
13,406
2,715,535
12,993
2,758,737
2,728,528
(1,665,592)
(689,745)
1,093,145
2,038,783
178
Cash belonging to the Parent Company and a number of subsidiaries is primarily deposited in postal current accounts. The
Parent Company’s deposits earn returns based on the yield on short-term deposits with the MEF held in the so-called
Buffer Account (note 14). Remuneration of these cash deposits is shown separately in Finance income (note 38.1), as
opposed to revenue deriving from the investment of deposits from third parties (note 27.4).
Bank and postal deposits include 26,647 thousand euros that has been frozen as a result of court orders relating to a
number of legal actions of various nature.
Postal deposits invested in Assets attributable to BancoPosta reflect the fact that, in compliance with the provisions of the
2007 Budget Law, funds deriving from deposits paid into postal current accounts by private customers, and therefore also
the liquidity of Group companies held in postal current accounts (note 14.7), are invested in euro area government
securities, which are accounted for in Assets attributable to BancoPosta (note 14.1).
16 - NON-CURRENT ASSETS HELD FOR SALE
16.1 - Non-current assets held for sale
2010
2009
2,687
(937)
(465)
1,285
6,749
(2,118)
(1,159)
3,472
Reclassifications of non-current assets(1)
Disposals(2)
Reclassification from provisions for other liabilities and charges
Total changes
8,031
(3,734)
4,297
492
(2,679)
(2,187)
Cost
Impairments
Carrying amount
9,753
(3,706)
(465)
5,582
2,687
(937)
(465)
1,285
Cost
Impairments
Total
12,997
(4,966)
8,031
1,681
(724)
(465)
492
Disposals(2)
Cost
Total
(5,931)
2,197
(3,734)
(5,743)
1,905
1,159
(2,679)
Cost
Impairments
Carrying amount
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 20 million euros. Recognition of this item has not resulted
in charges recognised in the income statement.
17 - 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.
In compliance with the Decree issued by the Ministry of the Economy and Finance on 30 November 2010, published in
Official Gazette 293 of 16 December 2010, on 21 December 2010 the transfer of 457,138,500 Poste Italiane SpA ordinary
shares, representing 35% of the Parent Company’s share capital, from Cassa Depositi e Prestiti to the MEF was
completed.
At 31 December 2010 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:
17.1 - Reconciliation of Equity
Equity
31 December 2010
Changes
in equity
2010
Profit/(Loss)
for 2010
Equity
31 December 2009
Changes
in equity
2009
Profit/(Loss)
for 2009
Equity
1 January 2009
3,613,225
(1,192,730)
729,035
4,076,920
251,272
736,660
3,088,988
839,717
-
205,040
634,677
-
134,925
499,752
714
-
(490)
1,204
-
1,212
(8)
(37,899)
(18,022)
-
(19,877)
(2,798)
-
(17,079)
- Actuarial gains and losses on staff
termination benefits of investee companies 1,179
986
-
193
797
-
(604)
(3,023)
-
3,524
(6,547)
-
17,493
(24,040)
(31,020)
(65,797)
(12,837)
664
-
16,395
12,623
-
(47,415)
(78,420)
(12,837)
664
-
2,152
2,256
-
(49,567)
(80,676)
(12,837)
664
(1,893)
-
-
(1,893)
-
-
(1,893)
150,413
-
61,671
88,742
-
-
88,742
- Amortisation until 1 Jan 2004/impairment
of goodwill arising from consolidation (84,418)
-
(13,390)
(71,028)
-
-
(71,028)
Financial Statements
of Poste Italiane SpA
- Undistributed profit/(loss)
of investee companies
- Investments accounted
- Balance of FV and CFH
reserves of investee companies
- Fees to be amortised attributable to
Poste Vita SpA and Poste Assicura SpA(*)
- Effects of contributions and transfers of
business units between Group companies
EGI SpA
PostelPrint SpA
PosteShop SpA
- Effects of intercompany
transactions
- Elimination of adjustments to
value of consolidated investments
- Effect of tax consolidation arrangement
6,208
-
2,824
3,384
-
3,384
-
- Other consolidation adjustments
7,832
-
689
7,143
-
5,908
1,235
4,383,065
(1,209,766)
1,017,921
4,574,910
249,271
903,990
3,421,649
13
-
-
13
-
-
13
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
4,383,078
(1,209,766)
1,017,921
4,574,923
249,271
903,990
3,421,662
This adjustment regards deferment of fees payable for the distribution by Poste Vita SpA of Life products classified as investment contracts and Non-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.
180
18 - SHAREHOLDER TRANSACTIONS
The General Meeting of shareholders held on 15 June 2010 approved payment of dividends totalling 500,000 thousand
euros (based on a dividend per share of 0.38 euros).
19 - 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 2010 or 31 December 2009.
20 - RESERVES
Reserves break down as follows:
20.1 - Reserves
Legal
reserve
Fair value
reserve
Cash flow
hedge
reserve
Total
Increases/(Decreases) in fair value during the period
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 2008
112,311
36,040
270,619
566,332
(180,075)
(32,651)
10,363
363,969
-
(117,685)
3,701
(888)
(6,409)
1,960
(1,636)
-
265,245
570,033
(180,963)
(39,060)
12,323
362,333
36,040
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
186,991
(207,795)
(37,617)
(58,421)
The Fair value reserve regards changes in the fair value of Available-for-sale financial assets. During 2010 fair value losses
totalling 896,610 thousand euros included:
• 854,472 thousand euros relating to the net fair value loss on BancoPosta’s investments in securities described in note 14.3;
• 42,138 thousand euros regarding the net fair value loss on investments described in note 9.4.
The Cash flow hedge reserve, which substantially relates to the Parent Company, reflects changes in the fair value of the
effective portion of cash flow hedges outstanding. During 2010 net fair value gains of 86,659 thousand euros reflected:
• gains of 86,061 thousand euros on the value of derivative financial instruments described in note 14.4;
• gains of 598 thousand euros on the value of derivative financial instruments described in note 9.6.
21 - TECHNICAL PROVISIONS FOR INSURANCE BUSINESS
These provisions refer to obligations the subsidiary Poste Vita SpA has made to its policyholders, inclusive of deferred
liabilities resulting from application of that the shadow accounting method. They break down as follows:
21.1 - Technical provisions for insurance business
Balance at
31 December 2010
Balance at
31 December 2009
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
31,989,508
332,531
10,003,902
(600,732)
87,077
(687,809)
13,659
26,805,825
122,360
8,459,359
537,509
87,076
450,433
2,068
Total
41,738,868
35,927,121
Item
Details of changes are shown in the table regarding Changes in technical provisions for insurance business and other
claims expenses (note 32).
22 - PROVISIONS FOR LIABILITIES AND CHARGES
Changes in provisions are as follows:
22.1 - Changes in provisions for liabilities and charges in 2009
Item
Provisions for non-recurring charges
Provisions for disputes with third parties
Provisions for disputes with staff(1)
Provisions for invalidated postal
savings certificates
Provisions for taxation/social
security contributions(2)
Other provisions
Total
Overall analysis of provisions:
- non-current portion
- current portion
(1)
(2)
Balance at
31 Dec 2008
153,780
273,239
626,643
-
1)
Provisions(1)
55,058
39,083
252,689
115,000
Finance
costs
1,229
-
Released to (2)
income 2)
statement(2)
(6,090)
(27,627)
(26,692)
-
Balance at
31 Dec 2009
127,075
183,603
642,232
115,000
19,448
-
571
-
(555)
19,464
12,285
76,827
3,328
59,556
13
53
(2,988)
(1,170)
(1,093)
14,456
132,355
1,162,222
524,714
1,866
(63,397)
(391,220)
1,234,185
339,486
822,736
335,201
898,984
1,162,222
1,234,185
Net provisions of 198,074 thousand euros for staff costs and 27,923 thousand euros for service costs (legal assistance).
Including 121 thousand euros in tax liabilities for the year.
Uses3)
(75,673)
(102,321)
(210,408)
-
182
22.2 - Changes in provisions in 2010
Balance at
Item
31 Dec 2009
127,075
183,603
Provisions for disputes with staff (1)
642,232
Provisions for staff costs
115,000
Provisions for invalidated postal savings certificates
19,464
Provisions for taxation/social security contributions
14,456
Other provisions
132,355
Total
- current portion
(1)
1,234,185
1)
Provisions
50,865
116,395
76,610
166,702
58,706
24,979
494,257
Finance
costs
557
518
12
21
1,108
Released to 2)
income (2)
statement2)
(3,563)
(17,499)
(868)
(28)
(28,508)
(50,466)
Balance at
Uses(3) 31 Dec 2010
(13,767)
160,610
(20,656)
262,400
(245,252)
472,722
166,702
(115,000)
58,706
(403)
19,579
(3,103)
11,337
(17,114)
111,733
(415,295)
1,263,789
335,201
898,984
422,235
841,554
1,234,185
1,263,789
Provisions for non-recurring charges regard operating risks connected with the Group’s financial and insurance activities.
Provisions for the period amount to 50,865 thousand euros and primarily regard estimated revisions of fees received for
the distribution of financial products. The size of these fees depends on the behaviour of subscribers. Uses of 13,767
thousand euros refer to liabilities identified or settled during the year. The 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 116,395 thousand euros reflect the estimated value of new liabilities
measured on the basis of expected outcomes. A reduction of 17,499 thousand euros relates to the non-occurrence of
liabilities identified in the past, a reduction of 12,569 thousand euros regards the value of disputes settled and a reduction
of 8,087 thousand euros reflects the reclassification of provisions for contract risk to which the Postel Group was exposed
in Brazil as an adjustment to assets (note 11).
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 76,610
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 compensation payable
to an employee in the event of “court-imposed conversion” of a fixed-term contract. Uses, amounting to 245,252 thousand
euros, include amounts used to cover the cost of settling disputes, including 6,346 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
believed to be short term.
Provisions for staff costs refer to best estimates of liabilities relating to staff costs for the year under review, which are
expected to be determined during 2011.
Provisions for restructuring charges made in 2009, which regarded the estimated liabilities to be incurred by the Parent
Company in the form of redundancy payments for at least three thousand staff, have been used in full.
Provisions to the Solidarity Fund have been established following the agreement of 27 July 2010 between Poste Italiane
SpA and the labour unions. The provisions have been made within the scope of the Fondo di Solidarietà (the Solidarity Fund
established by Ministerial Decree 178/2005) to provide income support for qualifying employees who decide to take early
retirement. At 31 December 2010 the provisions correspond to the present value of estimated liabilities amounting to a face
value of 62,898 thousand euros. These provisions are expected to be used progressively through to the first half of 2015.
Provisions for invalidated postal savings certificates, relating to the Parent Company, have been made to cover the cost of
redeeming invalidated certificates relating to specific issues. The provisions represent amounts recognised in revenue in
the income statements of the Parent Company 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 invalidated. At 31 December 2010
the provisions represent the present value of total liabilities, based on a face value of 22,470 thousand euros, which are
expected to be progressively paid off by 2023. The Parent Company redeemed certificates with a total face value of 403
thousand euros in 2010, and made provisions for finance costs totalling 518 thousand euros.
Provisions for taxation/social security contributions have been made to cover potential future tax liabilities. The provisions
decreased by 3,103 thousand euros following the settlement of a number of payables.
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 Poste Italiane SpA; and claims
for payment of accrued interest expense due to certain suppliers. Provisions for the year of 24,979 thousand euros
primarily refer to the first type of liability. Uses of these provisions, totalling 17,114 thousand euros, are largely due to a
deterioration in certain indicators used as the basis for the long-term business plans of Group companies, on which
impairment testing of the relevant goodwill is based (note 7.6), for which provisions were made in 2009 (note 2.4). Surplus
provisions made for this latter reason were released to the income statement in 2010.
23 - STAFF TERMINATION BENEFITS
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
Group companies with over 50 employees, 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.
The following changes in staff termination benefits took place in 2010 and 2009:
23.1 - Changes in staff termination benefits
2010
current service cost
interest component
effect of actuarial gains/(losses)
Provisions for the year
Uses for the year
Reduction due to fixed-term contracts settlement of 2010
2009
1,445,954
502
61,280
(70,003)
1,514,928
399
69,758
(50,766)
(8,221)
(111,746)
(2,506)
19,391
(82,644)
(5,721)
1,323,481
1,445,954
184
The current service cost is recognised in Staff costs (note 34.1), whilst the interest component is recognised in Finance
costs (note 38.2).
During 2010 net uses of provisions for staff termination benefits amounted to 111,746 thousand euros, represented by
benefits paid, totalling 115,040 thousand euros, and substitute tax of 4,942 thousand euros, net of additions of 8,236
thousand euros regarding the transfer of provisions for disputes with staff formerly on fixed-term contracts who have
been re-employed by the Parent Company.
The main actuarial assumptions applied in calculating staff termination benefits are as follows:
Discount rate
Average staff turnover23 (summary data)
2010
2009
4.55%
1.08%
4.00%
0.49%
Based on experience obtained since the date of transition to IAS/IFRS, a number of actuarial assumptions have been revisited,
including annual staff turnover. This revision has not, however, resulted in significant changes to the liability in question.
24 - FINANCIAL LIABILITIES
24.1 - Financial liabilities
31 December 2010
Current
liabilities
721,564
1,385,706
750,785
371,122
250,000
13,799
31 December 2009
Total
Non-current
liabilities
Current
liabilities
Total
907,961
19,364
141,545
700,149
46,903
721,564
2,293,667
770,149
512,667
950,149
60,702
1,690,799
1,574,577
751,304
512,667
250,000
60,606
246,408
19,375
166,850
10,891
49,292
1,690,799
1,820,985
770,679
679,517
260,891
109,898
-
545
545
120
120
-
14,969
149
2,331
12,489
1,351
15,089
269
2,331
12,489
1,351
283,170
2,032,620
2,315,790
270,536
2,083,241
2,353,777
Amounts deriving from liability for robberies
156,801
3,698
160,499
156,801
7,803
164,604
126,369
2,028,922
2,155,291
113,735
2,075,438
2,189,173
2,390,440
2,941,126
5,331,566
3,536,032
2,345,969
5,882,001
Item
Non-current
liabilities
Borrowings
Bonds
Loans from Cassa Depositi e Prestiti
Bank borrowings
Other borrowings
Cash flow hedges
Fair value hedges
Financial liabilities due to subsidiaries
Total
23. Frequency of early termination of employment due to resignations and dismissals.
FINANCIAL LIABILITIES 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 1,005,189 thousand euros, and have increased
due to the change in fair value, amounting to 35,954 thousand euros (note 33.1).
BORROWINGS
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. The bonds in issue and bank borrowings are subject to standard
negative pledge clauses24.
Bonds
Bonds regard 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 2010 is 780,953 thousand euros (780,825 thousand euros at 31 December 2009).
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 in the following table.
24.2 - Loans from Cassa Depositi e Prestiti
Loans to be
repaid in full by
Poste Italiane
Legislation
Loans with
principal to be
repaid by parent
Loans with principal
and interest to be
repaid by parent(2)
Total
loans
6,756
Law 15/74
6,756
-
-
Law 34/74
138
-
-
138
Law 227/75 (serv. acc.)(1)
-
17,706
-
17,706
Law 39/82 (subsequent changes to PO services)(1)
-
283,028
-
283,028
Law 887/84
-
-
203,378
203,378
Law 41/86(1)
-
1,661
-
1,661
6,894
302,395
203,378
512,667
(1)
Total
(1)
(2)
Loans to be repaid by the Ministry of the Economy and Finance (principal: 505,773 thousand euros).
From 2001 interest was no longer paid by the Government but by Poste Italiane SpA. From 2006 interest has been paid to the Parent Company.
The fair value of the loans is 524,854 thousand euros (711,212 thousand euros at 31 December 2009).
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 9.2).
24. 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.
186
Bank borrowings
These items, which primarily regard the Parent Company, break down as follows:
24.3 - Bank borrowings
31 December 2010
Item
Floating rate loan from DEPFA
Bank maturing 30 Sept 2013
Short-term borrowings
Current account overdrafts
Accrued interest expense
Total
Non-current
liabilities
Current
liabilities
250,000
250,000
31 December 2009
Total
Non-current
liabilities
Current
liabilities
Total
386,482
300,000
12,193
1,474
250,000
386,482
300,000
12,193
1,474
250,000
-
10,144
747
250,000
10,144
747
700,149
950,149
250,000
10,891
260,891
The value of the above financial liabilities approximates to fair value.
Outstanding repurchase agreements regard fixed income instruments with a notional value of 400,000 thousand euros
(note 9.4) executed by the Parent Company during the year under review to optimise returns and meet temporary liquidity
requirements.
Drawdowns on the Group’s total committed and uncommitted lines of credit, totalling 1,299,091 thousand euros, amount
to 312,193 thousand euros. The lines of credit are unsecured.
Other borrowings
This item regards:
• 39,004 thousand euros in fixed rate loans issued to the Parent Company by CPG Società di Cartolarizzazione arl. The
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. These ten-year loans were used
to finance certain projects. The fair value of these borrowings is 40,605 thousand euros (80,291 thousand euros at 31
December 2009);
• 21,695 thousand euros (including 180 thousand euros in accrued interest) regards 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 (notes 5 and 7).
The change in this item during 2010 is described in note 9.6.
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
The Parent Company is liable to the Italian Treasury for losses resulting from robberies and fraud. The loss of cash resulting
from these criminal acts has to be made up for, in order to ensure that post offices can carry out their daily operations. This
is done via withdrawals from the Treasury. Changes in this liability are as follows:
24.4 - Changes in amounts deriving from liability for robberies
Liabilities deriving from robberies during the period
Repayments made
Note
2010
2009
[37.1]
164,604
6,748
(10,853)
167,382
9,964
(12,742)
160,499
164,604
During 2010 the Parent Company made repayments of 5,977 thousand euros to the Treasury for robberies that took place
up to 31 December 2009 and of 4,876 thousand euros for robberies during the first half of 2010.
Sundry financial liabilities are generated by BancoPosta activities not subject to the investment restrictions described in
note 14. For this reason, they are not included in Liabilities attributable to BancoPosta (note 14.7). These liabilities break
down as follows:
24.5 - Sundry financial liabilities
31 December 2010
Non-current
liabilities
Current
liabilities
125,456
Amounts due on bills paid
Amounts due on prepaid cards
Italian Treasury for operational risk
31 December 2009
Total
Non-current
liabilities
Current
liabilities
Total
-
125,456
113,630
-
113,630
-
630,819
630,819
-
890,768
890,768
-
629,683
629,683
-
523,565
523,565
National and international
money transfers
-
381,106
381,106
-
393,740
393,740
Endorsed checks
-
179,688
179,688
-
148,052
148,052
Tax collection
-
137,680
137,680
-
91,295
91,295
Other
913
69,946
70,859
105
28,018
28,123
Total
126,369
2,028,922
2,155,291
113,735
2,075,438
2,189,173
Amounts due to the Italian Treasury for operational risks refer to advances obtained as a result of BancoPosta’s operations
and which subsequently gave rise to liabilities that are either certain or likely to be incurred. Changes in these liabilities are
as follows:
188
24.6 - Changes in amounts due to the Italian Treasury for operational risks
Note
New liabilities for operational risks
Operational risks that did not occur
2010
2009
113,630
11,138
(1,727)
108,971
10,762
(9,596)
[37.1]
Repayments made
Uses of provisions for disputes
9,411
(82)
2,497
1,166
(27)
3,520
125,456
113,630
Amounts due on bills paid regard sums collected on payment of bills and yet to be allocated to the accounts of
beneficiaries. Amounts due on prepaid cards represent amounts due to Postepay and Pensione card customers who have
topped up their prepaid cards. Amounts due on national and international money transfers represent the exposure to
customers for money orders and transfers, to Moneygram for customer transactions in process and amounts due to
overseas postal operators for international money orders. Endorsed checks represent the exposure to customers for
endorsed checks in circulation. Tax collection payables represent the amount due to tax collection agents and the tax
authorities for payments of tax effected by customers.
Other financial liabilities primarily regard 39,720 thousand euros in guarantee deposits received by the Parent Company
from counterparties with whom the Company has executed asset swap transactions (with collateral provided by a specific
Credit Support Annex) as part of its cash flow and fair value hedging policies (notes 9.6 and14.4). This item also includes
7,462 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 funds at 31 December 2010 and 31 December 2009 are as follows.
24.7 - Net debt/(funds)
Item
Note
Balance at
31 December 2010
[24.1]
5,331,566
of which
related party
Balance at
transactions 31 December 2009
of which
related party
transactions
5,882,001
Financial assets designated at fair value
721,564
-
1,690,799
-
Bonds
770,149
-
770,679
-
512,667
512,667
679,517
679,517
Bank borrowings
950,149
-
260,891
-
Other borrowings
60,702
-
109,898
-
2,316,335
8,007
2,370,217
1,351
Other
[21.1]
41,738,868
-
35,927,121
-
[14.7]
37,810,862
74,405
37,718,321
80,457
[9.1]
(45,111,497)
Financial assets
(39,312,956)
(749,870)
(640,832)
(863,856)
(770,719)
(33,035,161)
(100,825)
(27,776,456)
(101,143)
Financial instruments designated at
fair value through profit or loss
(11,197,846)
-
(10,637,554)
-
(128,620)
-
(35,090)
-
[14.1]
(39,653,994)
(6,173,454)
(39,512,159)
(6,804,803)
[10.1]
(8,333)
-
(1,326)
-
Net debt/(funds)
107,472
[15.1]
(1,093,145)
(985,673)
701,002
-
(2,038,783)
(1,337,781)
-
25 - TRADE PAYABLES
25.1 - Trade payables
Item
Amounts due to suppliers
Prepayments and advances from customers
Interest payable to customers
Amounts due to joint ventures
Amounts due to subsidiaries
Amounts due to associates
1,417,354
187,452
66,303
10,213
4,034
3,457
1,467,575
208,798
91,720
5,417
7,046
9,344
Total
1,688,813
1,789,900
Italian suppliers
Overseas suppliers
Overseas correspondents(1)
1,285,577
10,066
121,711
1,305,818
14,310
147,447
Total
1,417,354
1,467,575
AMOUNTS DUE TO SUPPLIERS
25.2 - 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
provided.
PREPAYMENTS AND ADVANCES FROM CUSTOMERS
This item refers to amounts received from customers as prepayment for the following services to be rendered:
25.3 - Prepayments and advances from customers
Item
Prepayments from overseas correspondents
Mechanised franking
Unfranked mail
Postage-paid mailing services
Other services
Total
76,650
63,701
23,782
10,025
13,294
103,178
67,141
18,035
10,842
9,602
187,452
208,798
INTEREST PAYABLE TO CUSTOMERS
This refers to interest accrued on postal current accounts during the year, less the related withholding tax. Accrued interest
payable to unconsolidated subsidiaries at 31 December 2010 amounts to 1 thousand euros (27 thousand euros at 31
December 2009).
190
AMOUNTS DUE TO JOINT VENTURES
Amounts payable to joint ventures, totalling 10,213 thousand euros (5,417 thousand euros at 31 December 2009) primarily
include the portion of a payable due to Italia Logistica Srl not accounted for using proportionate consolidation.
AMOUNTS DUE TO SUBSIDIARIES
This item represents amounts due to unconsolidated subsidiaries, as shown in the following table:
25.4 - Amounts due to subsidiaries
Name
Docutel SpA
Kipoint SpA
Poste Assicura SpA
Poste Tributi ScpA
Poste Voice SpA
742
1,591
156
1,545
-
1,204
2,415
504
1,475
1,448
Total
4,034
7,046
AMOUNTS DUE TO ASSOCIATES
Amounts payable to associates, totalling 3,457 thousand euros (9,344 thousand euros at 31 December 2009) primarily
include amounts due to Docugest SpA.
26 - OTHER LIABILITIES
26.1 - Other liabilities
31 December 2010
Note
Item
31 December 2009
Non-current
liabilities
Current
liabilities
Total
Non-current
liabilities
Current
liabilities
Total
Amounts due to staff
Amounts due to social
security agencies
[26.2]
-
852,806
852,806
-
830,325
830,325
[26.3]
54,217
423,342
477,559
59,462
480,841
540,303
Other tax liabilities
[26.4]
-
310,457
310,457
-
282,955
282,955
Amounts due to the parent
-
12,140
12,140
-
12,140
12,140
Other amounts due to associates
6
-
6
6
-
6
10,106
134,269
144,375
7,268
147,129
154,397
9,574
40,241
49,815
17,965
34,447
52,412
1,773,255 1,847,158
84,701
Sundry payables
Accrued expenses and deferred
income from trading transactions
Total
[26.5]
73,903
1,787,837 1,872,538
AMOUNTS DUE TO STAFF
These items primarily regard accrued amounts that have yet to be paid at 31 December 2010. The following table shows
a breakdown:
26.2 - Amounts due to staff
Item
Accrued vacation pay
Fourteenth month salaries
Incentives and productivity bonuses
Other amounts due to staff
75,733
236,969
388,144
151,960
87,611
245,323
358,614
138,777
Total
852,806
830,325
AMOUNTS DUE TO SOCIAL SECURITY AGENCIES
26.3 - Amounts due to social security agencies
31 December 2010
Non-current
liabilities
Current
liabilities
-
INPS
INAIL
31 December 2009
Total
Non-current
liabilities
Current
liabilities
Total
286,283
286,283
-
330,178
330,178
81
44,183
44,264
-
43,828
43,828
54,136
2,602
56,738
56,667
2,649
59,316
Pension funds
-
70,797
70,797
-
70,844
70,844
Amounts due to the Solidarity Fund
-
3,573
3,573
2,795
18,087
20,882
Other agencies
-
15,904
15,904
-
15,255
15,255
54,217
423,342
477,559
59,462
480,841
540,303
Item
IPOST
Total
Amounts due to 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 2010 and accrued amounts due, as reported in the item
Amounts due 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 2010 (note 23).
Amounts due to INAIL include 56,667 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 Ministerial Decree 178 of 1 July 2005) regard
amounts designed to cover redundancy payments and income support for employees who, having qualified for
participation, decide to take voluntary early retirement. This liability was reduced by 19,842 thousand euros during the
year as a result of contributions paid and redundancy payments effected. It was increased by 2,533 thousand euros,
including 2,321 thousand euros following an updated estimate of the liability made necessary by regulations that have
increased “retirement windows” and 212 thousand euros for accrued finance costs on the discounted residual amount
payable at 31 December 2009.
192
OTHER TAX LIABILITIES
26.4 - Other tax liabilities
Item
Tax due on insurance provisions
Withholding tax on employees’ and consultants’ salaries
147,220
95,520
90,357
102,332
VAT payable
27,107
28,941
Withholding tax on postal current accounts
23,365
34,391
Stamp duty
4,756
9,247
Substitute tax
3,645
667
14,007
11,857
310,457
282,955
Other taxes due
Total
Tax due on insurance provisions regards Poste Vita SpA and is described in note 10.1.
Amounts due on salaries paid to employees and consultants regards withholding tax paid to the tax authorities by Group
companies in January and February 2011.
Withholding tax due on postal current accounts refers to amounts withheld by the Parent Company on interest accrued
during the year on customers’ current accounts.
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 2011 pursuant to note 3bis of art. 13 of the Tariffs provided for by Presidential Decree 642/1972.
Substitute tax represents the balance payable by Group companies on the revaluation of staff termination benefits in 2010.
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
26.5 - Sundry payables
31 December 2010
31 December 2009
Non-current
liabilities
Current
liabilities
Total
Non-current
liabilities
Current
liabilities
Total
-
90,868
90,868
-
107,308
107,308
9,825
536
10,361
7,201
90
7,291
Other
281
42,865
43,146
67
39,731
39,798
Total
10,106
134,269
144,375
7,268
147,129
154,397
Item
Sundry payables attributable to BancoPosta
Guarantee deposits
Sundry payables primarily attributable to BancoPosta refer to 76,770 thousand euros due to INPS and INPDAP for pensions
paid by Poste Italiane SpA to pensioners after their death and which are in the process of being recovered. A further 13,816
thousand euros is due to Cassa Depositi e Prestiti as a result of amounts registered in customers’ postal savings books
and in the process of verification.
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.).
ACCRUED EXPENSES AND DEFERRED INCOME FROM TRADING TRANSACTIONS
The nature and composition of Accrued expenses and deferred income is as follows:
26.6 - Accrued expenses and deferred income
31 December 2010
Item
Accrued expenses
Deferred income
Total
Non-current
liabilities
9,574
Current
liabilities
4,613
35,628
9,574
40,241
31 December 2009
Total
4,613
45,202
Non-current
liabilities
17,965
Current
liabilities
4,463
29,984
Total
4,463
47,949
49,815
17,965
34,447
52,412
Deferred income primarily regards:
• 14,225 thousand euros in fees on Postamat cards collected in advance by the Parent Company;
• 6,301 thousand euros (including 5,986 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;
• 3,835 thousand euros relating to income accruing to the Parent Company in future years as a result of the Gran Premio
BancoPosta loyalty programme, which grants award credits to customers in return for certain behaviours. 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;
• 3,338 thousand euros regarding deferred income earned by Poste Vita SpA over the duration of individual Branch III policies classified as financial contracts in application of IAS 18.
27 - REVENUES FROM SALES AND SERVICES
Revenues from sales and services of 10,133,509 thousand euros break down as follows:
27.1 - Revenues from sales and services
Item
Postal Services
Financial Services
Other sales of goods and services
Total
2010
2009
5,049,529
4,664,789
419,191
5,209,973
4,796,021
337,774
10,133,509
10,343,768
194
POSTAL SERVICES
Revenues from Postal Services break down as follows:
27.2 - Postal Services
Item
2010
2009
Unfranked mail
Mechanized franking by third parties and at post offices
Stamps
Express parcel and express courier services
Integrated services
Overseas mail and parcels
Telegrams and online services
Innovative services
E-procurement services
Logistics services
Other postal services
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
1,656,761
1,300,834
502,226
278,515
256,227
168,087
121,734
69,766
59,874
582
25,924
87,599
4,560,508
4,528,129
Universal Service subsidies
364,463
371,830
Publisher and electoral tariff subsidies(1)
124,558
310,014
5,049,529
5,209,973
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.
Mechanised franking by third parties or at post offices, which refers entirely to 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 255,018 thousand euros, the integrated notification service for legal process carried out on behalf of UNEP
(Notifications, Enforcements and Complaints Offices), totalling 27,299 thousand euros, and revenues deriving from the
agreement with the tax authorities regarding bulk and registered services, amounting to 1,953 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 36,441 thousand euros and 12,283 thousand euros, respectively.
Revenues from innovative services, referring to Postel SpA, include 25,412 thousand euros from the door-to-door service,
16,930 thousand euros from direct mailing, 15,942 thousand euros from commercial printing and 1,011 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.
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 364,463 thousand euros are, whilst awaiting renewal
of the Contratto di Programma (Planning Agreement) for the three-year period 2009-2011, estimated on the basis of the best
available information from previous Contratti di Programma (Planning Agreements) and Interministerial Committee for
Economic Planning (CIPE) “Guidelines for Regulation of the Postal Sector”.
Publisher and electoral tariff subsidies include:
• 57,764 thousand euros representing the amounts due from the Publishing Department of the Cabinet Office to cover the
cost of the preferential rates offered to publishers and non-profit organisations which, following the Ministry for Economic
Development Decree of 30 March 2010, were applicable only to the first quarter of the year. The amount due was calculated on the basis of the tariffs established in the Ministerial Decrees of 23 November 2002 and 1 February 2005. The
discounts granted by the Parent Company are only partially covered by the amount set aside in the Cabinet Office’s budget;
• 66,794 thousand euros in amounts paid by the State to cover reductions and preferential prices granted to election candidates under Law 515/93. This amount has also not been budgeted for by the MEF.
FINANCIAL SERVICES
Revenues from Financial Services, which regard the Parent Company, break down as follows:
27.3 - Financial Services
Item
2010
2009
Fees for collection of postal savings deposits
Income from the 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
Money transfers
Fees from securities placement and trading
Securities custody
Other financial products and services
1,557,000
1,375,716
622,110
492,939
194,778
174,975
88,195
77,107
26,246
22,434
33,289
1,600,000
1,319,900
640,722
501,650
202,442
165,169
74,109
78,447
158,431
24,496
30,655
Total
4,664,789
4,796,021
Fees for the collection of savings deposits regard payment for managing, issuing and redeeming Postal Savings Certificates
and payments into and withdrawals from Postal Savings Books. These services are provided by the Parent Company on
behalf of Cassa Depositi e Prestiti. The amount for 2010, totalling 1,557,000 thousand euros, was calculated on the basis
of the tariffs applicable to the annual targets for savings deposits provided for in the agreement executed on 10 March
2010. This agreement, which expired on 31 December 2010, is in the process of renewal.
Income from the investment of postal current account deposits breaks down as follows:
27.4 - Income from the investment of postal current account deposits
Item
Income from investment in securities
Interest income on HTM securities
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
Net remuneration of own liquidity recognised in finance income and costs
Total
2010
2009
1,188,665
582,413
571,808
677
33,767
196,140
(9,089)
1,375,716
1,112,073
516,695
543,453
1,825
50,100
214,296
(6,469)
1,319,900
196
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 14.4.
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 is shown separately in Finance income and costs (note 38).
Other revenues from current account services primarily regard current account charges (186,605 thousand euros), fees on
amounts collected and on statements of account sent to large customers (129,788 thousand euros), annual fees on debit
cards (58,796 thousand euros) and on debit card transactions (54,955 thousand euros).
Income from delegated services primarily regards amounts received by the Parent Company for the payment of pensions
disbursed by INPS (108,091 thousand euros) and INPDAP (13,309 thousand euros), and for treasury services carried out
by the Company in 2010 on the basis of the Agreement between Poste Italiane SpA and the MEF (57,662 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 (174,975 thousand euros).
Revenues from money transfers primarily regard commissions collected on national money orders (50,693 thousand
euros), Moneygram transfers (15,013 thousand euros) and Eurogiros (5,524 thousand euros).
Fees from securities placement and trading (26,246 thousand euros) regard income from the execution of purchase and
sell orders on the secondary market on behalf of customers.
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
Services 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:
• 161,950 thousand euros (92,337 thousand euros in 2009) generated by PosteMobile SpA, primarily from the provision of
mobile telecommunications services;
• 81,304 thousand euros earned by the Parent Company (68,478 thousand euros in 2009), including fees received for collecting
applications for residence permits and other permits (34,122 thousand euros), income from call centre services (7,094
thousand euros) and income from ancillary franking and packaging services (7,473 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 53,655 thousand euros (58,582 thousand euros in 2009);
• 42,663 thousand euros (26,098 thousand euros in 2009) in revenues generated by Mistral Air Srl, primarily from the supply of
air transport services;
• 31,284 thousand euros (28,879 thousand euros in 2009) from collective asset management carried out by BancoPosta Fondi
SpA SGR, consisting primarily of management fees (29,186 thousand euros) and subscription and redemption fees (2,098
thousand euros);
• 25,480 thousand euros generated by Poste Link Scrl from the supply of multi-channel Contact Centre solutions for the
provision of information and equipment.
28 - EARNED PREMIUMS
28.1 - Earned premiums
Item
Life premiums
Branch I
Branch III
Branch V
Non-life premiums(*)
Other income from Insurance Services
(*)
Total
(*)
2010
2009
9,488,866
6,339,735
2,959,288
189,843
10,207
5,731
7,088,699
6,128,999
892,549
67,151
2,802
20,903
9,504,804
7,112,404
Earned premiums are reported net of outward reinsurance premiums.
29 - OTHER INCOME FROM FINANCIAL AND INSURANCE ACTIVITIES
29.1 - Other income from financial and insurance activities
Item
Income from financial instruments at fair value through profit or loss
2010
2009
572,398
1,341,274
Interest
281,650
174,307
Fair value gains
238,047
844,500
Realised gains
52,701
322,467
1,396,313
968,110
1,025,965
781,872
370,348
186,238
32
72,638
32
72,638
-
7,521
-
7,521
79
-
Income from available-for-sale financial assets
Interest
Realised gains
Income from held-to-maturity securities
Realised gains
Income from cash flow hedges
Realised gains
Income from fair value hedges
Fair value gains
Other income
Total
79
-
13,678
1,982,500
41,475
2,431,018
198
30 - OTHER OPERATING INCOME
This item primarily regards the following:
30.1 - Other operating income
Item
2010
2009
Gains on disposals
Increases to estimates for previous years
Recovery of contract expenses and other recoveries
Lease rentals
Recovery of cost of seconded staff
Grants related to income
Other income
102,057
55,212
24,817
9,744
2,661
2,313
19,326
62,061
36,800
26,427
11,335
4,606
612
68,800
Total
216,130
210,641
GAINS ON DISPOSALS
30.2 - Gains on disposals
Item
Gains on disposal of operating property and land
Gains on disposal of investment property
Gains on disposal of other operating assets
Total
2010
2009
92,647
7,677
1,733
40,378
7,851
13,832
102,057
62,061
For the purposes of reconciliation with the statement of cash flows, in 2010 this item amounts to 100,976 thousand euros, after losses of 1,081 thousand
euros (note 37). In 2009, net gains, after losses of 60,326 thousand euros, amounted to 1,735 thousand euros..
Gains on disposals include the gain of 52 million euros on the sale of an operating property in Milan.
INCREASES TO ESTIMATES FOR PREVIOUS YEARS
This item includes, among other things, the impact of settlements that have resulted in the recalculation of liabilities
previously estimated by the Parent Company.
LEASE RENTALS
30.3 - Lease rentals
Item
2010
2009
Rental income on commercial property
Rental income from investment property
Recovery of expenses, transaction costs and other income(1)
4,267
2,876
3,688
4,615
2,601
3,032
Total
9,744
11,335
(1)
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.
31 - COST OF GOODS AND SERVICES
31.1 - Cost of goods and services
Item
2010
2009
Services
Lease expense
Raw, ancillary and consumable materials and goods for resale
Interest expense paid to customers
1,912,787
349,704
245,182
90,043
1,876,838
337,120
210,492
125,736
Total
2,597,716
2,550,186
2010
2009
489,234
236,194
158,154
150,154
129,952
92,604
87,872
87,367
86,924
82,861
75,711
66,147
47,844
46,977
26,803
22,200
19,798
2,103
1,527
1,691
670
530,970
227,407
163,045
148,491
128,385
91,932
75,560
93,192
51,569
82,333
77,848
56,107
45,761
39,078
20,698
20,105
12,517
1,368
8,422
1,355
695
1,912,787
1,876,838
SERVICES
31.2 - Services
Item
Transport of mail, parcels and forms
Routine maintenance and technical assistance
Personnel services
Outsourcing fees and other external service charges
Energy and water
Transport of cash
Printing and enveloping services
Telecommunications and data transmission
Mobile telecommunications services for customers
Mail, telegraph and telex
Cleaning, waste disposal and security
Consultants’ fees and legal expenses
Credit and debit card fees and charges
Advertising and promotions
Agents’ commissions and other
Insurance premiums
Airport costs
Asset management fees
Securities custody and management fees
Remuneration of Statutory Auditors
Other
Total
200
Details of the remuneration paid to Statutory Auditors are provided below:
31.3 - Remuneration of Statutory Auditors
Item
2010
2009
Remuneration
Expenses
1,459
232
1,175
180
Total
1,691
1,355
2010
2009
LEASE EXPENSE
Lease expense breaks down as follows:
31.4 - Lease expense
Item
Property rentals and ancillary costs
184,041
179,531
Vehicle leases
76,932
76,070
Equipment hire and software licenses
54,878
48,360
Other lease expense
33,853
33,159
349,704
337,120
Total
The cost of leasing properties almost entirely regards the buildings from which the Group operates (post offices, Delivery
Offices and Sorting Centres). Under the relevant lease agreements, rents are increased annually on the basis of the price
index published by the National Office of 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 contract form, has the right to withdraw from the
contract at any time, giving six months notice.
RAW, ANCILLARY AND CONSUMABLE MATERIALS AND GOODS FOR RESALE
31.5 - 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
Note
[11.1]
[11.1]
[11.1]
Total
2010
2009
139,112
64,899
21,285
17,595
1,754
112,914
53,049
20,457
21,429
1,728
2,809
(2,248)
(243)
219
1,166
(282)
31
245,182
210,492
INTEREST EXPENSE PAID TO CUSTOMERS
The rate paid to retail customers in 2010 was 0.25% until 9 May 2010 and 0.15% from 10 May 2010 (0.50% from 1
January to 31 May 2009 and 0.25% for the remainder of 2009).
32 - NET CHANGE IN TECHNICAL PROVISIONS FOR INSURANCE BUSINESS
AND OTHER CLAIMS EXPENSES
32.1 - Change in technical provisions for insurance business and other claims expenses
Item
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
Use of provisions for non-recurring charges deriving from conversion of Branch III policies
Claims expenses and change in other provisions - Non-life
Total
2010
2009
3,243,430
208,885
5,174,821
15,557
1,544,542
3,242
1,728,124
87,096
6,023,924
155,220
697,313
(65,000)
(359)
10,190,477
8,626,318
The 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, totalling 3,243,430 thousand euros;
• the change in mathematical provisions, totalling 5,174,821 thousand euros, reflecting increased obligations to policyholders;
• the change in technical provisions where investment risk is transferred to policyholders (so-called class D), totalling
1,544,542 thousand euros.
202
33 - OTHER EXPENSES FROM FINANCIAL AND INSURANCE ACTIVITIES
33.1 - Other expenses from financial and insurance activities
Item
Expenses from financial instruments at fair value through profit or loss
2010
2009
306,351
115,818
Fair value losses
282,080
26,920
Realised losses
24,271
88,898
30,929
12,850
30,929
12,850
35,954
166,596
103
-
103
-
14,995
8,136
388,332
303,400
Expenses from available-for-sale financial assets
Realised losses
Change in fair value of financial liabilities
Expenses from fair value hedges
Fair value losses
Other expenses
Total
34 - 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:
34.1 - Staff costs
Category
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)
Total costs
Income from fixed-term contracts settlements
Total
Note
2010
2009
[23.1]
4,384,730
1,222,525
502
4,379,184
1,213,134
399
264,040
6,894
4,017
156,725
49,061
58,706
(76,375)
6,070,825
(66,320)
273,246
7,390
3,630
170,081
198,074
115,000
(16,775)
6,343,363
(121,007)
6,004,505
6,222,356
[22.2]
[22.2]
[22.2]
Details of the remuneration paid to Directors are provided below:
34.2 - Remuneration and expenses paid to Directors
Item
Remuneration
Expenses
Total
2010
2009
3,841
3,456
176
174
4,017
3,630
Cost items relating to staff termination benefits are described in note 23.
Net provisions for disputes with staff, provisions to the Solidarity Fund and those for restructuring charges are described
in note 22.2.
Cost recoveries primarily regard revised estimates for previous years.
Income from the fixed-term contracts settlement was earned following 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. The agreement has resulted in conversion of the previous temporary contracts to permanent
arrangements for approximately 2,000 staff who, at 27 July 2010, were employed by the Company by virtue of a judicial
ruling that had not yet become final. This was effected by means of individual agreements, under which each member of
staff waived any legal or financial claim deriving from the sentence requiring their re-employment, and approximately 1,500
staff agreed to return any amounts paid by the Parent Company for periods during which they did not work, and which the
Company had charged to the income statement in previous years. These amounts, which are to be repaid in variable
interest-free instalments by 2030, total approximately 78 million euros, representing gross salaries and accrued termination
benefits. Compared with the above face value of the amounts to be returned, the amount of 66,320 thousand euros
recognised in the income statement for the year represents 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 31 December 2010).
The following table shows the Group’s average and year-end headcounts by category:
34.3 - Headcount
Average headcount
Year-end headcount
Item
Senior managers
Middle managers
Frontline staff
Back-office staff
2010
718
14,752
128,505
5,474
2009
741
14,703
129,616
6,206
31 Dec 2010
717
14,538
125,953
4,357
31 Dec 2009
714
14,539
126,705
6,164
Total permanent workforce(*)
149,449
151,266
145,565
148,122
(*)
Data is expressed in full-time equivalent terms.
Taking account of staff on flexible contracts, the average number of full-time equivalent staff in 2010 is 151,844 (154,197
in 2009).
204
35 - DEPRECIATION, AMORTISATION AND IMPAIRMENTS
35.1 - Depreciation, amortisation and impairments
Item
2010
2009
Property, plant and machinery
Operating properties
Plant and machinery
Industrial and commercial equipment
Other assets
Impairments/Recoveries/Adjustments of Property, plant and equipment
Depreciation of Investment property
Impairments/Recoveries/Adjustments of Investment property
Amortisation of Intangible assets
Industrial patents and intellectual property rights, concessions,
licenses, trademarks and similar rights
Other
Impairments/Recoveries/Adjustments of Intangible assets
Impairment of Goodwill/Goodwill arising from consolidation
Use of provisions for other liabilities and charges
374,690
99,108
147,912
14,548
26,356
86,766
3,084
7,679
(1,103)
162,670
377,505
94,169
154,790
17,649
20,343
90,554
13,445
8,710
(1,817)
156,322
157,553
5,117
212
13,390
(13,390)
152,633
3,689
950
-
Total
547,232
555,115
Note
2010
2009
[5]
[7]
4,738
33,709
4,210
26,128
38,447
30,338
36 - CAPITALISED COSTS AND EXPENSES
36.1 - Capitalised costs and expenses
Item
Intangible assets
Total
37 - OTHER OPERATING COSTS
Other operating costs break down as follows:
37.1 - Other operating costs
Item
Note
2010
2009
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
[12.3]
[12.5]
[13.2]
10,459
16,859
(4,375)
(2,119)
94
31,692
(16,577)
23,211
20,181
4,877
Occurrence of operational risks
Robberies during the year
Reversal of BancoPosta assets, net of recoveries
Other operating losses of BancoPosta
[24.4]
[24.6]
35,659
6,748
9,411
19,500
29,875
9,964
1,166
18,745
142,641
98,896
47,302
(3,557)
116,992
11,456
48,968
56,568
1,081
39,252
17,575
30,942
1,735
43,006
19,760
28,240
277,609
271,300
Net provisions for liabilities and charges made/(used)
for disputes with third parties
for non-recurring charges
for other liabilities and charges
Losses
Municipal property tax, urban waste tax and other taxes and duties
Revised estimates and assessments for previous years
Other recurring expenses
Total
[22.2]
[22.2]
[22.2]
206
38 - FINANCE INCOME/COSTS
FINANCE INCOME
38.1 - Finance income
Item
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
Interest from parent(2)
(1)
Remuneration of Poste Italiane SpA’s liquidity
Interest on bank current accounts
Interest on term bank accounts
Finance income on discounted receivables(3)
Overdue interest
Impairment of amounts due as overdue interest
Income from subsidiaries
Other
Foreign exchange gains
Revaluations
Total
2010
2009
79,385
40,636
(1,647)
40,020
376
32,879
32,223
502
154
4,942
11,319
88,795
128,364
9,711
9,089
10,045
238
48,694
12,373
(3,542)
85
2,102
43,801
6,469
15,490
2,467
56,217
2,967
(2,861)
77
3,737
5,972
4,784
179,094
8
177,354
Income from financial assets regards 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 2010 these items amount to 132,726 thousand euros (171,906 thousand euros in 2009).
(2)
Interest income from the parent includes:
• 9,633 thousand euros as interest payable under Law 887/84 to cover finance costs on the loans issued by Cassa Depositi e Prestiti (described in note 9.2);
• 78 thousand euros in interest income on the account held at the Italian Treasury.
Finance income on discounted receivables regards: 26,279 thousand euros in accrued interest on the amount due from the MEF (note 9.2), 13,078 thousand euros in interest on amounts due for the publisher tariff subsidies described in note 12.2, and 9,337 thousand euros in interest on amounts due from
staff and IPOST under the fixed-term contracts settlements of 2006 and 2008 (note 10.1).
(3)
FINANCE COSTS
38.2 - 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
Finance costs on sundry financial assets
Finance costs on provisions for staff termination benefits
Finance costs on provisions for liabilities
Finance costs on discounted amounts payable to Solidarity Fund
Other finance costs
Foreign exchange losses(1)
[23.1]
[22.2]
Total
2010
2009
74,406
38,845
26,430
3,953
4,896
191
87
4
94,777
38,867
32,712
12,752
5,599
228
4,612
7
14,122
61,280
1,108
212
3,524
10,865
69,758
1,866
1,763
6,283
6,019
160,671
3,185
188,497
Finance costs on financial liabilities regards 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 2010 finance costs, before foreign exchange losses, amount to 154,652 thousand
euros (185,312 thousand euros in 2009).
39 - INCOME TAX EXPENSE
39.1 - Income tax expense
2010
2009
IRES
IRAP
Total
IRES
IRAP
Total
Item
Current tax expense
Substitute tax
Deferred tax assets
461,763
20,741
84,918
291,473
(1,140)
11,776
753,236
19,601
96,694
433,995
59,105
10,266
(87,918)
283,805
(5,505)
(8,175)
717,800
59,105
4,761
(96,093)
Total
567,422
302,109
869,531
415,448
270,125
685,573
208
The effective tax rate for 2010 is 46.1% and breaks down as follows:
39.2 - Reconciliation between statutory and effective tax rate for IRES
2010
Item
Profit before tax
% rate
IRES
1,589,563
% rate
519,049
27.5
437,130
27.5
(8,254)
6,966
28,478
5,149
(0.4)
0.4
1.5
0.3
8,406
21,921
5,220
0.0
0.5
1.4
0.3
(3,365)
20,219
(820)
(0.2)
1.1
0.0
(62,670)
5,440
(3.9)
0.0
0.3
567,422
30.1
415,448
26.1
Statutory tax charge
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
Effective tax charge
2009
IRES
1,887,452
39.3 - Reconciliation between statutory and effective tax rate for IRAP
2010
Item
Profit before tax
IRAP
1,887,452
86,044
8,000
Net provisions for liabilities and charges and impairment of receivables
11,175
841
Non-deductible staff costs
200,451
(1,111)
Other
(3,290)
302,109
2009
% rate
% rate
4.6
IRAP
1,589,563
70,995
0.4
0.6
0.0
10.6
9,040
15,949
843
206,252
0.6
1.0
0.1
13.0
(0.1)
(0.2)
(13,090)
(19,863)
(0.8)
(1.2)
16.0%
270,125
17.0%
4.5
Unlike the year under review, in 2009 the Group recognised tax benefits after it exercised the option granted by art. 15 of
Legislative Decree 185/2008, converted into Law 2/2009, to realign the tax bases of assets and liabilities with their
corresponding statutory amounts25.
25. This realignment regarded:
• differences arising on first-time application of IAS/IFRS, which were rendered deductible by the payment of substitute tax, with recognition of the
resulting tax benefit;
• differences between the carrying amounts of assets and liabilities and their tax bases arising after adoption of IAS/IFRS, which became deductible in
5 equal instalments from 2009 and in the four subsequent years; the exercise of this option did not have any effect on the income statement, in that
the reduction in current tax expense was offset by a corresponding reduction in deferred tax assets.
CURRENT TAX ASSETS AND LIABILITIES
39.4 Changes in current tax assets/(liabilities)
Current taxes for 2010
Item
IRES
Assets/(Liabilities)
IRAP
Total
IRES
IRAP
Assets/(Liabilities) Assets/(Liabilities)
Total
(26,279)
(2,933)
(29,212)
(30,963)
379
(30,584)
Payments of
prepayments for the current year
balance payable for previous year
substitute tax
487,979
422,968
38,914
26,097
294,912
285,483
9,429
-
782,891
708,451
48,343
26,097
436,334
337,388
6,546
92,400
280,660
277,344
3,316
-
716,994
614,732
9,862
92,400
Reclassifications
Provisions to the income statement for
current tax expense
substitute tax
realignment
(461,763)
(475,811)
14,048
(291,473)
(291,795)
322
(753,236)
(767,606)
14,370
26,096
(493,100)
(447,891)
(59,105)
13,896
15
(283,805)
(283,983)
178
26,111
(776,905)
(731,874)
(59,105)
14,074
Provisions to Equity
(18,846)
12
(18,834)
(13,704)
-
(13,704)
Other
27,220(*)
(309)
26,911
49,058
(182)
48,876
8,311
209
8,520
(26,279)
(2,933)
(29,212)
47,216
(38,905)
5,192
(4,983)
52,408
(43,888)
43,289
(69,690)
7,069
(9,880)
50,358
(79,570)
of which:
Current tax assets
(*)
Primarily due to tax credits deriving 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 2010 includes 38,042 thousand euros due to the payment of excess taxation 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.
DEFERRED TAX ASSETS AND LIABILITIES
The following table shows deferred tax assets and liabilities:
39.5 - Deferred taxes
Item
Deferred tax assets
Total
Balance at
31 December 2010
Balance at
31 December 2009
760,014
(293,795)
644,844
(417,328)
466,219
227,516
The nominal tax rates are 27.5% for IRES and 3.9% 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 4.6%.
210
Changes in deferred tax assets and liabilities are shown below:
39.6 - Changes in deferred tax assets and liabilities
Item
Deferred tax income/(expenses) recognised in the income statement
Deferred tax income/(expenses) recognised in Equity
Direct transfers to current tax assets
Changes in the basis of consolidation
2010
2009
227,516
331,059
(116,295)
91,332
354,931
(168,764)
-
(26,111)
67
-
466,219
227,516
The balance of deferred tax assets and liabilities recognised in the income statement for the year under review does not
include significant components of non-recurring income which, in contrast, amounted to 110,508 thousand euros in 2009,
primarily due to the realignment of the tax bases of assets and liabilities and their carrying amounts and Postel SpA’s
decision to frank goodwill.
The following table shows a breakdown of changes in deferred tax assets and liabilities according to principal event that
generated the change:
39.7 - Changes in deferred tax assets
15,143
Financial
assets and
liabilities
115,830
Accum.
adjustments
to assets
120,644
Provisions for
liabilities and
charges
270,212
Trade
and other
receivables
27,095
(652)
(11,272)
39
4,555
7,125
63
18,851
-
(5,952)
(27)
(378)
(4,944)
(2,298)
-
5,252
-
-
8,431
-
-
-
-
(111)
8,320
66,985
3,871
118,348
125,172
276,959
22,214
Income/(Expenses) recognised
in profit or loss
(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)
Item
in profit or loss
in profit or loss on realignment
in Equity
in Equity
PPE and
intangible
assets
48,786
Fees to be
amortised
Staff
costs
35,995
Other
Total
7,580 641,285
(24,416) 14,545 (10,013)
9,281 22,014 644,844
-
-
134,854
-
-
-
-
Change in basis of consolidation
-
-
-
-
-
-
-
58,445
1,619
247,501
121,794
283,391
16,705
(150) 134,704
67
67
7,238 23,321 760,014
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 the expected benefit of the future deductibility of certain provisions for liabilities (283,391 thousand euros),
of adjustments to assets (121,794 thousand euros), of the impairment of trade and other receivables (16,705 thousand
euros), of amounts due to staff (7,238 thousand euros), and of fee income receivable by Poste Vita SpA and deferred, in
application of IAS 18, over the term of individual policies (1,619 thousand euros). Deferred tax assets also reflect temporary
differences arising between the tax bases of financial assets and liabilities and their carrying amounts, as a result of
application of IAS 39 (247,501 thousand euros). Finally, deferred tax assets on Property, plant and equipment (58,445
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.
39.8 - Changes in deferred tax liabilities
PPE
Intangible
assets
Financial
assets and
liabilities
Deferred
gains
Discounted staff
termination
benefits
Other
47,802
9,279
208,110
27,462
14,162
3,411
310,226
Expenses/(Income) recognised
in profit or loss
4,128
3,089
(11,145)
(5,549)
5,079
84
(4,314)
(46,887)
-
(122)
-
(44,675)
(95)
(91,779)
in Equity
-
-
177,071
-
13
-
177,084
Item
in profit or loss
Total
-
-
-
-
26,111
-
26,111
5,043
12,368
373,914
21,913
690
3,400
417,328
(632)
2,902
78,472
16,201
12
(139)
96,816
-
-
(122)
-
-
(122)
Expenses/(Income) recognised in Equity
-
-
(220,235)
-
8
-
(220,227)
4,411
15,270
232,029
38,114
710
3,261
293,795
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 and their carrying amounts,
as a result of application of IAS 39 (232,029 thousand euros). The reduction in 2010 is due to changes in the Fair value
reserve described in note 20.1. Deferred tax liabilities also derive from taxable temporary differences between the tax
bases and carrying amounts of Intangible assets (15,270 thousand euros) and Property, plant and equipment (4,411
thousand euros), and from the deferral of gains (38,114 thousand euros).
At 31 December 2010 and 2009 deferred tax assets and liabilities recognised directly in Equity are as follows:
39.9 - Deferred tax assets and liabilities recognised in Equity
Item
Fair value reserve for available-for-sale financial assets
Cash flow hedge reserve for hedging derivatives
Actuarial gains/(losses) on staff termination benefits
Increases/(Decreases) in Equity
2010
2009
393,296
(169,712)
(38,207)
1,072
(158)
(124)
Total
354,931
(168,764)
Finally, Current tax expense of 18,834 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 charge for the year accounted for in Equity
is 336,097 thousand euros.
212
40 - 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 40.1 to 40.4.
40.1 - Impact of related party transactions on the financial position at 31 December 2010
Financial
liabilities
Liabilities
attrib. to
BancoPosta
Trade
payables
Other
liabilities
13
20
1
-
545
5
1
977
742
1,591
156
1,546
-
3,355
67
-
-
3
-
8,801
1,412
-
-
3
180
2,901
-
-
16
-
3,116
341
6
639,202
639,202
-
6,173,454
6,173,454
-
1,297,595
1,243,908
53,687
6,367
6,367
-
7,462
7,462
-
-
121,397
-
12,140
12,140
-
-
-
-
-
-
-
121,397
-
Cassa Depositi e Prestiti Group
100,825
Cinecittà Luce SpA
CONI Servizi
Consap SpA
Consip SpA
Enav SpA
EUR SpA
FondoPoste pension fund
Anas Group
Enel Group
Eni Group
Equitalia Group
Ferrovie dello Stato Group
Finmeccanica Group
Fintecna Group
Gestore Servizi Elettrici Group
Invitalia Group
Istituto Poligrafico Zecca dello Stato Group
RAI Group
Sogei Group
Sogin Group
Soc. Svil.po Mercato F.di Pensione SpA (MEFOP)
Provisions for doubtful receivables from
external related parties
-
-
842,556
1
112
152
11
613
42
39,138
11,708
29,552
2,486
796
26
12
313
116
1
42
1
-
512,667
-
73,403
-
6
41
1,368
1,259
24,117
785
13,201
59,300
39
621
18
14
-
13,816
64,652
-
-
(95,077)
(4,902)
-
-
-
-
6,173,454
2,139,963
1,499
520,674
74,405
239,871
90,614
Name
Financial
assets
Assets
attrib. to
BancoPosta
287
-
-
56
495
289
2,421
1,012
-
-
331
-
Trade
Other assets/
receivables Other receivables
Subsidiaries
Docutel SpA
Kipoint SpA
Poste Tributi ScpA
Joint ventures
Uptime SpA
Associates
Consorzio ANAC
Docugest SpA
Related parties external to the Group
Direct relations
Agencies and other local offices
Former government
procurement department
Total
741,657
At 31 December 2010 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 40,597 thousand euros (46,974
thousand euros at 31 December 2009).
Name
Financial
assets
Assets
attrib. to
BancoPosta
Trade
Other assets/
receivables Other receivables
Financial
liabilities
Liabilities
attrib. to
BancoPosta
Trade
payables
Other
liabilities
-
Subsidiaries
Consorzio Poste Welfare - in liquidation
Docutel SpA
Poste Assicura SpA
Poste Tributi ScpA
Poste Voice SpA
201
-
-
144
982
1,535
364
1,568
98
7
15
27
-
1,351
-
5
1,824
7,518
146
179
1,204
5
1
2,415
518
1,476
1,454
-
1,018
-
2,154
-
-
3
5,417
-
-
-
2
233
58
2,456
-
-
16
-
3,619
5,391
334
6
769,500
769,500
-
6,804,803
6,804,803
-
1,287,495
1,201,427
86,068
6,540
6,540
-
-
(16,170)
(16,170)
-
172,319
-
Joint ventures
Associates
Consorzio ANAC
Docugest SpA
Uptime SpA
Direct relations
Former government
12,140
12,140
-
-
-
-
-
-
172,319
-
101,143
CONI Servizi
Consap SpA
Consip SpA
Enav SpA
EUR SpA
Anas Group
Enel Group
Eni Group
Equitalia Group
Finmeccanica Group
Fintecna Group
Invitalia Group
RAI Group
Sogei Group
-
-
938,601
69
306
5
308
67
43,969
8,436
33,153
652
69
16
18
213
17
19
1
-
679,517
-
86,936
-
21
41
882
3
705
17,103
953
11,225
62,644
183
1,034
2
-
14,929
60,561
-
-
(108,090)
(5,071)
-
-
-
-
6,804,803
2,214,918
1,518
680,868
80,457
288,949
87,636
Total
871,862
214
40.3 - Impact of related party transactions on the results of operations for 2010
2010
Revenues
Costs
Capital expenditure
Name
Other
Revenues from operating
sales and services
income
Finance
income
PPE
Intangible
assets
Goods and
services
Current expenditure
Other
Staff operating
costs
costs
Finance
costs
Subsidiaries
Docutel SpA
Kipoint SpA
Poste Tributi ScpA
5
5
232
1,540
-
75
1,697
14
816
-
3
65
-
-
875
4,189
136
87
-
64
-
1,212
-
4
95
2,366
15
445
14
17
-
-
-
13,115
5,822
-
(37)
-
1
211
49
-
-
-
9,532
-
-
-
803,411
695,403
108,008
458
458
44,216
44,216
-
-
-
-
-
2,941
2,918
23
191
191
-
Joint ventures
Uptime SpA
Associates
Consorzio ANAC
Docugest SpA
Direct relations
Former government
-
-
-
-
-
-
1,557,331
Cinecittà Luce SpA
10
CONI Servizi
916
Consap SpA
76
Consip SpA
522
Enav SpA
214
EUR SpA
203
Anas Group
703
Enel Group
156,079
Eni Group
32,986
Equitalia Group
95,692
2,160
Finmeccanica Group
215
Fintecna Group
300
220
Invitalia Group
700
1,441
Italia Lavoro Group
13
RAI Group
8,330
SACE Group
94
Sogei Group
82
Sogin Group
2
Sicot Srl
59
4
61
306
14
14
426
-
2,005
-
22
3
19,678
-
8,343
-
69
1,512
1,265
43,376
742
5,292
51,396
347
14,503
16
14
-
4,389
46,306
19,703
8,343
Total
2,666,138
29,324
123
-
152,288 29,511
-
-
1,104
26
2
-
26,431
243
-
5,248
26,964
In 2010 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 8,602 thousand euros (3,570 thousand euros for 2009).
2009
Revenues
Costs
Capital expenditure
Name
Other
Revenues from operating
sales and services
income
Intangible
assets
Goods and
services
Current expenditure
Other
Staff operating
costs
costs
Finance
income
PPE
Finance
costs
73
1
1,868
614
1,326
-
1
58
-
-
1,243
7
1
4,400
1,417
81
2,417
-
-
1,404
-
7
119
2,259
660
18
-
-
10,517
-
-
-
1
237
-
31
6
-
-
-
5,299
10,981
-
-
-
819,269
712,907
106,362
7,272
6,042
1,230
85,762
85,762
-
-
-
-
-
25,200
22,764
2,436
228
228
-
60
278
13
-
2,409
-
38,012
-
8,695
18
91
2,842
2,066
42,083
678
6,849
56,045
11
15,188
17
-
29,022
-
871
189
15
2
-
32,712
408
-
12,202
88,248
38,012
8,713
162,233
29,022
27,681
33,474
Joint ventures
20
Chronopost International Italia SpA - in liquidation
16
Consorzio Poste Welfare - in liquidation
19
Docutel SpA
36
Poste Assicura SpA
63
Poste Tributi ScpA
502
Poste Voice SpA
107
Joint ventures
Associates
Consorzio ANAC
Docugest SpA
Uptime SpA
Direct relations
Former government
-
1,600,253
Cinecittà Holding SpA
7
CONI Servizi
1,008
Consap SpA
124
Consip SpA
837
Enav SpA
228
EUR SpA
3
Anas Group
734
Enel Group
140,231
Eni Group
29,174
Equitalia Group
82,538
833
Finmeccanica Group
279
Fintecna Group
301
171
Invitalia Group
43
2,060
Italia Lavoro Group
22
RAI Group
9,398
SACE Group
94
Sogei Group
39
Sogin Group
2
Sicot Srl
63
9
Total
2,690,980
216
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 for 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 and pension
contributions, is as follows:
40.5 - Remuneration of key management personnel
Item
2010
2009
Remuneration paid in short term
Post-employment benefits
16,359
462
14,800
522
Total
16,821
15,322
No loans were granted to key management personnel during 2010 and at 31 December 2010 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 Bylaws, 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.
41 - 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.
41.1 - Postal savings deposits
Item
31 December 2010
31 December 2009
97,656,369
198,488,569
113,503,394
84,985,175
91,119,705
192,617,608
102,904,310
89,713,298
Total
296,144,938
283,737,313
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, amount to 3,066 million euros (2,882
million euros at 31 December 2009).
Average assets under management within the context of BancoPosta Fondi SpA SGR’s proprietary mutual funds amount
to 3,113 million euros for 2010 (2,745 million euros at 31 December 2009).
BancoPosta Fondi SpA SGR also manages Poste Vita SpA’s individual investment portfolios.
COMMITMENTS
Purchase commitments given primarily by the Parent Company are summarised below.
41.2 - Commitments
Item
Purchase commitments:
Goods and services
Property leases
Intangible assets
Investment property
Total
31 December 2010
31 December 2009
806,114
544,097
68,667
43,847
39
544,971
550,112
68,911
48,762
88
1,462,764
1,212,844
218
Future commitments with respect to property leases (see note 31.4), which may generally be broken off with six months
notice, break down as follows according to due date:
41.3 - Property lease commitments
Item
Lease rentals due:
within 12 months
after 5 years
Total
31 December 2010
31 December 2009
138,399
345,067
60,631
132,483
351,652
65,977
544,097
550,112
As described in note 2.2, on 20 December 2010 the Parent Company concluded an agreement with UniCredit SpA for the
acquisition, at a price of 136 million euros, of the entire share capital of UniCredit MedioCredito Centrale SpA. Effectiveness
of this transaction is subject to the fulfilment of certain conditions precedent, including the necessary clearance.
GUARANTEES
Personal guarantees issued by the Group are as follows:
41.4 - Guarantees
Item
31 December 2010
31 December 2009
2,818
104,991
3,667
93,260
107,809
96,927
31 December 2010
31 December 2009
Bonds subscribed by customers held by third-party banks(*)
Other assets
19,920,461
12,468
21,486,200
66,715
Total
19,932,929
21,552,915
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
Total
THIRD-PARTY ASSETS
41.5 - Third-party assets
Item
(*)
In addition to 179 million in the Parent Company’s financial instruments other than bonds (approximately 147 million at 31 December 2009).
ASSETS IN THE PROCESS OF ALLOCATION
At 31 December 2010 the Parent Company has paid a total of 279,589 thousand euros in claims on behalf of the Ministry
of Justice (364,568 thousand euros at 31 December 2009), 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.
PROCEEDINGS PENDING AND RELATIONS WITH THE AUTHORITIES
European Commission
In execution of 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 Antitrust Authority ruling of 15 October 2009 launched an investigation of the Parent Company 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. Consequently, the Company sought to demonstrate to the Authority the “rationale” behind its
commercial initiatives and, in the belief that such actions fully comply with competition legislation, on 1 March 2010 it
nevertheless decided to give certain specific commitments, pursuant to art. 14-ter of Law 287/90, aimed at curbing any
anti-competitive behaviour. On 10 November 2010 the Authority rejected the commitments given by the Company’, which
appealed the ruling before Lazio Regional Administrative Court. The Antitrust Authority’s investigation is still in progress.
On 8 October 2009 the Antitrust Authority formally launched a PB/455 procedure regarding PosteShop SpA, in order to
investigate alleged infringements of the “Regulations governing misleading advertising”, connected with the advertising
material used by PosteShop to promote the activities of the Kipoint franchise retail network. At the end of December 2009,
convinced of the lawfulness of its actions, the company nevertheless submitted a proposal containing commitments aimed
at rectifying the alleged abuses. On 9 March 2010 the Authority notified its refusal to accept the commitments made and
on 30 March 2010 closed its investigation, ruling against PosteShop SpA and imposing a fine of 100 thousand euros, which
was accordingly paid. An appeal against the fine before Lazio Regional Administrative Court was turned down on 10
November 2010. PosteShop SpA intends to appeal to the Council of State.
Moreover, on 30 April 2010 the Authority notified the Parent Company that it was to launch an investigation, pursuant to
Legislative Decree 206/2005 (the Consumer Code), into allegations that certain material advertising the “Raccomandata1”
registered mail service is misleading in relation to delivery times and the conditions applicable to refunds for late delivery.
Poste Italiane SpA immediately gave the Authority commitments that it would take action to rectify the situation. The
investigation was completed on 29 December 2010, with the Authority ruling against Poste Italiane SpA and imposing a
fine of 200 thousand euros which, at 31 December 2010, the Company has included in Other liabilities and accordingly paid
in February 2011. The ruling has been appealed before Lazio Regional Administrative Court.
Finally, on 30 June 2010 the Authority launched an investigation of Poste Vita SpA pursuant to Legislative Decree 206/2005,
alleging that it adopted unfair commercial practices following the entry into force of Law 166/2008 of 27 October 2008.
This legislation requires insurance companies to transfer amounts payable to the holders of dormant policies (policies that
remain unclaimed after the end of the two-year expiry period provided for by art. 2952 of the Italian Civil Code) to a fund
for the victims of financial fraud. The Authority intends to ascertain if the company omitted to take the necessary steps to
inform policyholders about the removal of the commitment to not take advantage of the short expiry period, given for the
Branch III policies issued between 2001 and 2005, thereby enabling customers to redeem their policies within the standard
ten-year expiry period. On 2 August 2010 the company submitted information about the steps taken to inform the holders
220
of the relevant policies, the commercial strategy implemented in the interests of consumers during the communication
process and the commitments it intended to give in order to close the investigation. On this basis, on 29 December 2010
the Authority ruled that it was able to close the investigation without finding against the company, whilst requiring it to
keep the Authority informed about fulfilment of the commitments given. The company thus prepared a report summarising
all the commitments being adopted and the related implementation procedures.
Bank of Italy
Following the results of the Bank of Italy’s inspection of BancoPosta in 2008, a joint working group set up in 2010 by the Bank
of Italy, the shareholder, the Ministry of the Economy and Finance, and Poste Italiane SpA examined the best means for ring
fencing capital for BancoPosta, in order to apply prudential supervision requirements and protect BancoPosta’s creditors. In
February 2011, art. 2. (paragraphs from 17-octies to 17-duodecies) of the so-called “Milleproroghe” (“Thousand Extensions”)
Decree, converted into Law 10 of 26 February 2011, provided that, for the purposes of applying the Bank of Italy’s prudential
requirements, by 30 June 2011 Poste Italiane SpA was, by shareholder resolution, on the recommendation of the Board of
Directors, to ring fence capital to be used exclusively in relation to BancoPosta’s operations, as governed by Presidential
Decree 144/2001. The capital is to amount to at least 10% of the Company’s Equity. The shareholder resolution will establish
the assets and contractual relations to be included in the ring fence and the rules for its organisation, management and control.
Poste Italiane SpA has thus drawn up a new model for accounting unbundling, extending the application of unbundling, which
originally only regarded financial transactions carried out by the Parent Company pursuant to Presidential Decree 144/2001,
and identified in these financial statements as “Assets and liabilities attributable to BancoPosta”, to all items in the statement
of financial position generated by revenue and cost components attributable to these operations. This will result in preparation
of a separate report, to be attached to the financial statements from 2011, in accordance with the provisions of articles 2423
et seq. of the Italian Civil Code.
ISVAP
The insurance industry regulator (the Istituto per la Vigilanza sulle Assicurazioni Private e di Interesse Collettivo, or ISVAP)
completed its investigation of Poste Vita SpA’s activities, begun at the end of 2008, in December 2009. The resulting
findings were communicated to the company’s management in February 2010. The company has responded to ISVAP’s
findings with its own observations and proposals regarding the initiatives it intends to take in order to resolve the problems
identified, whilst stating that it is open to specific discussions of the issues raised. On 30 July 2010 ISVAP notified Poste
Vita SpA of additional findings that have resulted in identification of alleged regulatory violations. As a result, the company
is liable to fines of between 55 and 550 thousand euros. As permitted by the regulator, Poste Vita SpA has submitted an
in-depth, reasoned defence, amongst other things raising a number of procedural objections regarding the fact that the
investigation has exceeded the statute of limitations and is untimely. The company has requested that the procedure be
closed or, otherwise, that a hearing be arranged. The procedure is still ongoing.
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 its “Postaprevidenza Valore - Piano individuale pensionistico - Fondo Pensione”
pension product during the period from 1 January 2009 to 30 June 2010. The team of inspectors left the company’s
premises on 16 November 2010 and the documentation gathered during the inspection is currently being examined.
DISCLOSURE OF FEES PAID TO THE INDEPENDENT AUDITORS
In 2010 Poste Italiane SpA independently 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 2010 and 2009.
41.6 - Disclosure of fees paid to the Independent Auditors
Item
Entity providing the service
Fees(*)
2010
2009
Audit
PricewaterhouseCoopers network
1,600
-
1,524
-
Voluntary audits or audit-related services
153
240
90
-
Services other than audit
30
967
17
1,397
2,990
3,028
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.
42 - INFORMATION ON INVESTMENTS
42.1 - List of investments consolidated on a line-by-line basis
Name (registered office)
Banco Posta Fondi SpA SGR (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 Link Scrl (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
Profit/(Loss)
for year
Equity
100
97.50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
12,000
516
120
103,200
530
6,450
2,582
120
200
153
561,608
5,000
20,400
7,140
2,582
56,339
17,210
18,338
(1,518)
(1,106)
5,464
78
3,308
971
188,058
(733)
9,692
4,058
(2,500)
(34,508)
66,467
516
120
435,616
1,613
38,721
14,886
875
11,539
8,146
1,240,577
7,431
148,625
36,891
3,307
52,449
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.
222
42.2 - List of investments accounted for using proportionate consolidation
Assets
Italia Logistica Srl(*) (Rome)
(*)
Liabilities
% interest
current
non-current
current
50
54,637
14,707
65,524
Revenues from Profit/(Loss)
non-current sales and services for period
1,944
87,473
(3,544)
The number of staff at 31 December 2010 totals 84.
42.3 - List of investments accounted for using the equity method
% interest
Assets
Liabilities
Revenues from
sales and services
Profit/(Loss)
for period
Address Software Srl (Rome)
51
936
749
1,193
(8)
30.30
43
10
-
-
(a)
Docugest SpA (Parma)
37
7,857
3,698
11,712
871
Docutel Communications Services SpA (Siena)
85
3,172
1,778
4,872
5
100
847
561
-
(445)
90
5,566
2,983
1,899
-
99.88
834
756
-
12
-
241
114
5
6
Telma-Sapienza Scarl (Rome) (e)
32.45
-
-
-
-
Uptime SpA (Rome)(a)
28.57
8,909
8,966
11,889
(198)
Consorzio ANAC (Rome) (a)
Kipoint SpA (Rome) (b)
Poste Tributi ScpA (Rome)
Postel do Brasil Ltda (Brasilia)
(c)
Programma Dinamico SpA (Rome) (d)
Figures taken from the company’s latest approved financial statements for the year ended 31 December 2009.
Results of operations; statement of financial position data at 31 December 2010.
(c)
Figures taken from the company’s latest approved financial statements for the year ended 31 December 2007.
(d)
Figures taken from the company’s latest approved financial statements for the year ended 31 December 2009; Group companies do not hold investments in
Programma Dinamico SpA.
(e)
Figures not available.
(a)
(b)
43 - EVENTS AFTER 31 DECEMBER 2010
Events after the end of the reporting period are described in the above notes. No other material events have taken place
after 31 December 2010. Reference should be made above all to the information in note 41 (Proceedings pending and
relations with the authorities - Bank of Italy) regarding the need to ring fence capital to be used exclusively in relation to
BancoPosta’s operations.
Notes to the consolidated financial statements I Attestation of the separate and consolidated financial statements 223
Attestation of the separate and consolidated financial statements for the year
ended 31 December 2010 pursuant to art. 154-bis of Legislative Decree 58/1998
1. The undersigned, Massimo Sarmi, as Chief Executive Officer, and Alessandro Zurzolo, as Manager
responsible for Poste Italiane SpA’s financial reporting, having also taken account of the provisions of
art.154-bis, paragraphs 3 and 4 of Legislative Decree 58 of 24 February 1998, 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 2010.
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 Organisations 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
organisation 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 company’s objectives will be achieved, including true and fair financial reporting;
2.2 a number of activities, including checks on the effective application of administrative and accounting
procedures, are in progress.
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 7 March 2011
Chief Executive Office
Massimo Sarmi
Manager responsible for financial reporting
Alessandro Zurzolo
(This certification has been translated from the original which was issued in accordance with Italian legislation)
224
BOARD OF STATUTORY AUDITORS’ REPORT ON THE
POSTE ITALIANE GROUP’S CONSOLIDATED FINANCIAL
To the General Meeting of Shareholders of Poste Italiane SpA
The Poste Italiane group’s consolidated financial statements for the year ended 31 December 2010, which report profit for
the year of 1,017,921 thousand euros (903,990 thousand euros for the year ended 31 December 2009), 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 21 March 2011.
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.
THE BOARD OF STATUTORY AUDITORS
Silvana Amadori
Ernesto Calaprice
Francesco Ruscigno
- Chairwoman
- Auditor
- Auditor
Board of Statutory Auditors’ Report | Independent Auditors’ Report 225
226
Independent Autditors’ Report 227
228
POSTE ITALIANE SPA
SEPARATE
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
STATEMENTS AND NOTES
229
ANNUAL REPORT 2010
230
CONTENTS
232
INCOME STATEMENT
233
234
235
236
NOTES TO THE SEPARATE
FINANCIAL STATEMENT
237
1. Introduction
237
2. Basis of accounting
238
3. Risk management
251
4. Property, plant and equipment
266
5. Investment property
268
6. Intangible assets
269
7. Investments
270
8. Financial assets
273
9. Other non-current assets
278
10. Trade receivables
279
11. Other current receivables and assets
284
12. Assets and liabilities attributable to BancoPosta
285
13. Cash and cash equivalents
292
14. Non-current assets held for sale
293
15. Share capital
294
16. Shareholder transactions
294
17. Reserves
294
18. Provisions for liabilities and charges
295
19. Staff termination benefits
298
231
20. Financial liabilities
299
21. Trade payables
304
22. Other liabilities
306
23. Revenues from sales and services
310
24. Other income from financial activities
313
25. Other operating income
313
26. Cost of goods and services
315
27. Other expenses from financial activities
317
28. Staff costs
317
29. Depreciation, amortisation and impairments
319
30. Other operating costs
320
31. Finance income/costs
321
32. Income tax expense
322
33. Related party transactions
327
34. Other information
332
35. Events after 31 December 2010
335
ATTESTATION OF THE SEPARATE AND CONSOLIDATED FINANCIAL
PURSUANT TO ART. 154-BIS OF LEGISLATIVE DECREE 58/1998
BOARD OF STATUTORY AUDITORS’ REPORT
336
337
339
ANNUAL REPORT 2010
232
ASSETS
(€)
of which related
party transactions
31 December 2010
Non-current assets
Investment property
Intangible assets
Investments
Financial assets
Deferred tax assets
Other non-current assets
Total
[4]
[5]
[6]
[7]
[8]
[32]
[9]
2,805,563,230
92,023,096
358,346,118
1,017,399,927
1,501,810,890
660,248,178
447,922,075
6,883,313,514
1,017,399,927
980,063,391
1,465,574
2,965,692,335
77,017,157
344,913,756
1,074,632,600
1,013,265,835
550,163,995
494,165,864
6,519,851,542
1,074,632,600
847,533,069
1,465,574
[12]
39,656,830,000
6,173,454,799
39,512,159,351
6,804,803,566
Current assets
Trade receivables
Current tax assets
Financial assets
Total
[10]
[32]
[11]
[8]
[13]
3,670,299,839
38,456,667
453,286,099
717,838,969
907,979,930
5,787,861,504
2,346,923,019
77,669
613,642,081
-
3,965,438,745
37,701,684
446,204,856
595,289,454
1,598,563,915
6,643,198,654
2,440,741,256
1,088,964
532,290,150
-
[14]
2,963,967
-
1,285,006
-
TOTAL ASSETS
52,330,968,985
31 December 2009
of which related
party transactions
Note
52,676,494,553
LIABILITIES AND EQUITY
(€)
of which related
party transactions
31 December 2010
[15]
[17]
1,306,110,000
(44,430,537)
2,351,545,997
3,613,225,460
-
1,306,110,000
659,587,199
2,111,223,261
4,076,920,460
-
Non-current liabilities
Other liabilities
Total
[18]
[19]
[20]
[32]
[22]
365,965,967
1,297,780,519
1,655,077,019
139,270,751
70,152,243
3,528,246,499
30,275,996
371,122,638
-
286,437,335
1,419,160,550
1,823,509,546
345,634,313
72,919,430
3,947,661,174
33,010,996
512,667,533
-
[12]
38,077,163,518
340,706,571
37,810,095,612
172,232,170
Current liabilities
Trade payables
Other liabilities
Total
[18]
[21]
[32]
[22]
[20]
832,608,654
1,593,339,587
23,254,937
1,536,084,280
3,127,046,050
7,112,333,508
10,321,165
518,854,509
105,152,001
373,062,797
894,482,141
1,652,096,792
65,694,979
1,615,575,988
2,613,967,407
6,841,817,307
13,963,084
493,554,062
98,276,750
492,268,365
Equity
Share capital
Reserves
Retained earnings
Total
TOTAL LIABILITIES AND EQUITY
52,330,968,985
31 December 2009
of which related
party transactions
Note
52,676,494,553
Statement of financial position | Income statement 233
INCOME STATEMENT
(€)
Note
2010
of which related
party transactions
2009
of which related
party transactions
Other income from financial activities
Total revenue
[23]
[24]
[25]
9,571,584,813
281,082,134
169,298,042
10,021,964,989
2,967,539,321
16,130,464
9,841,166,028
167,973,157
194,195,191
10,203,334,376
2,924,996,138
22,529,920
Other expenses from financial activities
Staff costs
of which non-recurring costs/(income)
[26]
[27]
[28]
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
7,534,496
2,045,092,280
1,310,700
6,051,933,698
(121,006,911)
504,421,623
(9,908,163)
211,855,645
1,398,628,593
713,752,592
31,400,980
32,956,971
Finance costs
Finance income
[31]
[31]
157,727,593
143,649,699
1,438,021,314
27,691,368
64,193,963
173,978,500
144,524,373
1,369,174,466
33,967,800
105,849,715
Income tax expense
of which non-recurring expense/(benefit)
PROFIT FOR THE YEAR
[32]
708,986,503
729,034,811
-
632,514,327
(52,118,963)
736,660,139
-
Financial statements
[29]
[30]
234
(€)
2010
2009
729,034,811
736,660,139
[17.1]
(860,640,367)
(348,048,366)
569,546,591
(31,744,412)
[17.1]
86,062,091
33,375,608
3,521,945
(6,204,094)
Actuarial gains/(losses) on provisions for staff termination benefits
[19.1]
68,866,129
49,848,585
Taxation of items recognised directly in, or transferred from, Equity
[32.9]
327,655,094
(183,696,695)
Total other components of comprehensive income
(692,729,811)
401,271,920
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
36,305,000
1,137,932,059
Cash flow hedges
Note
Statement of comprehensive income I Statement of changes in equity 235
Equity
Reserves
(€)
Share capital
Legal
reserve
Fair value
reserve
Cash flow hedge
reserve
Retained earnings/
(Accummulated losses)
Total
1,306,110,000
112,311,085
263,467,836
(117,363,240)
1,524,462,720
3,088,988,401
Total comprehensive
income for the year
-
-
366,746,024
(1,614,329)
772,800,364
1,137,932,059
-
36,039,823
-
-
(36,039,823)
-
Dividends paid
-
-
-
-
(150,000,000)
(150,000,000)
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
(*)
This item includes profit for the year of 729,035 thousand euros, actuarial gains on provisions for staff termination benefits of 68,866 thousand euros, after the
related current tax expense of 18,939 thousand euros.
236
Note
2010
2009
[29]
Impairments of investments
[7]
Net provisions for liabilities and charges
[18]
Use of provisions for liabilities and charges
[18]
Staff termination benefits paid
[19]
(Gains)/Losses on disposals
[25]
(Gains)/Losses on financial transactions
(Dividends)
[31]
Dividends received
(Finance income realised)
[31]
(Finance income in form of interest)
[31]
Interest received
Interest expense and other finance costs
[31]
Interest paid
Losses and impairments/(Recoveries) on receivables
[30]
Income tax paid
[32]
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
[21]
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
(Increase)/Decrease in other assets 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
[7]
Cash used for investments in held-to-maturity investments attributable to BancoPosta
[12]
Disposals:
Property, plant and equipment, investment property and assets held for sale
Investments
[7]
Cash generated by investments in held-to-maturity investments attributable to BancoPosta
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]
Net increase/(decrease) in cash and cash equivalents
[g]=[d+e+f]
[13]
1,598,564
1,438,021
493,928
61,671
440,083
(426,391)
(110,223)
(63,825)
(281,344)
(121)
103
(35,810)
(102,119)
53,810
152,084
(76,160)
3,554
(747,543)
686
800,404
972,912
1,369,174
504,422
415,889
(319,058)
(80,532)
(54,893)
(70,245)
(154)
131
(139,861)
120,343
171,050
(101,609)
27,796
(681,021)
4,183
1,165,615
309,009
16,298
(58,757)
(50,395)
216,155
269,648
112,716
(281,413)
747,373
848,324
1,864,883
959,864
(646,133)
(126,116)
(99,045)
125,082
(746,212)
525,830
1,041,786
(1,504,262)
1,064,366
1,127,720
1,547,123
(2,333,968)
(223,968)
(469)
(155,800)
(4,480)
(887,604)
(2,814,133)
(268,955)
(288)
(184,483)
(16,500)
(165,687)
(3,281,112)
80,146
42
147,622
1,304,091
(2,554,553)
(403,925)
(167,914)
152,308
514,692
(500,000)
(914)
(608,445)
(690,584)
907,980
76,337
504,739
2,740,493
(595,456)
(89,674)
(205,555)
145,484
(115,944)
(150,000)
(326,015)
(471,148)
625,652
1,598,564
(€000)
(*)
This item includes BancoPosta’s portfolio of held-to-maturity investments.
Statement of cash flows I Notes to the separate financial statements 237
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 (the 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.
These financial statements for the year ended 31 December 2010 have been prepared in euros, the currency of the economy
in which the Company 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 separate 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.
238
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 contained in the EU regulations published
through to 7 March 2011, 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 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 described in note 2.2, and are consistent with
those applied in the preparation of the financial statements for the year ended 31 December 2009.
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 nonrecurring 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.
In order to allow comparison on a like-for-like basis with the amounts for 2010, certain items in the statement of cash flows
for the year ended 31 December 2009 have been reclassified, as have amounts in certain notes.
At the date of approval of these financial statements, there is no established practice on which to base interpretation and
application of a number of new, or revised, international accounting standards. Moreover, 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. The financial
statements have, therefore, been prepared on the basis of the best currently available knowledge of IFRS and taking
account of best practice in this regard. Any future changes or updated interpretations will be reflected in subsequent years,
in accordance with the specific procedures provided for by the related standards.
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.
Notes to the separate financial statements 239
2.2 - 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 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 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 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 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.
240
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 Company
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.
The costs of acquiring industrial patents, intellectual property rights, licences and similar rights are capitalised. Amortisation
is applied on a straight-line basis, in order to allocate the purchase cost over the shorter of the expected useful life 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.
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 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 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 Company commits to purchase or sell the asset, or, in the case of the
BancoPosta’s operations, at the settlement date3 that 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
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 cost4 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.
3. This is possible for transactions carried out on organised markets (the so-called “regular way”).
4.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.
242
• 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
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 commitment5. 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 hedges6 after
initial recognition are recognised in a specific Equity reserve (Cash flow hedge reserve). A hedging transaction is general-
5. 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.
ly 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.
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
6. 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.
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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, had they not been included in the tax consolidation.
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.
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
so 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 cash equivalents refer to cash in hand, deposits held at call with banks, amounts that at 31 December 2010 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 established for a specific purpose. They include, among others, 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 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 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 Company’s position in a dispute or in ongoing negotiations with other parties, the
Company 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 20067, 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 20067. 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, reflecting market yields on government securities 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 20067, the actuarial calculation of staff termination benefits no longer takes
7. 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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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.
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 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 on a time proportion basis in direct correlation with the costs incurred, once they have
been formally allocated to the Company 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 refer to Poste Italiane SpA’s direct and indirect subsidiaries and associates. Related parties regard the
parent, the MEF, entities controlled by the MEF, and the Company’s key management personnel. 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.
New accounting standards and interpretations applied from 1 January 2010
The following accounting standards, amendments and interpretations are applicable from 1 January 2010, but their adoption
has not resulted in any change to the presentation or measurement of items in Poste Italiane SpA’s financial statements:
• IFRIC 12 - Service Concession Arrangements, adopted by EC Regulation 254 of 25 March 2009;
• IAS 27 - Consolidated and Separate Financial Statements, adopted by EC Regulation 494 of 3 June 2009;
• IFRS 3 - Business Combinations, adopted by EC Regulation 495 of 3 June 2009;
• IFRIC 16 - Hedges of a Net Investment in a Foreign Operation, adopted by EC Regulation 460 of 4 June 2009;
• IFRIC 15 - Agreements for the Construction of Real Estate, adopted by EC Regulation 636 of 22 July 2009;
• Amendment to IAS 39 - Exposures Qualifying for Hedge Accounting, and Change to IAS 39 - Financial Instruments:
Recognition and Measurement, adopted by EC Regulation 839 of 15 September 2009;
• Revised version of IFRS 1 - First-time Adoption of International Financial Reporting Standards, adopted by EC Regulation
1136 of 25 November 2009;
• IFRIC 17 - Distribution of Non-cash Assets to Owners, adopted by EC Regulation 1142 of 26 November 2009;
• IFRIC 18 - Transfers of Assets from Customers, adopted by EC Regulation 1164 of 27 November 2009;
• Improvements to IFRS, adopted by EU Regulation 243 of 23 March 2010;
• Changes to IFRS 2 - Share-based Payment, adopted by EU Regulation 244 of 23 March 2010;
• Changes to IFRS 1 - Additional Exemptions for First-time Adopters, adopted by EU Regulation 550 of 23 June 2010.
New accounting standards and interpretations not yet effective
The following accounting standards and amendments are effective from 1 January 2011:
• Change to IAS 32 - Financial Instruments: Presentation, adopted by EU 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 EU Regulation 574 issued on 30 June 2010;
• Changes to 24 - Related Party Disclosures and Change to IFRS 8 - Operating segments, adopted by EU Regulation 632
issued on 19 July 2010;
• Changes to IFRIC 14 - Prepayments of a Minimum Funding Requirement, adopted by EU 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 EU Regulation 662 issued on 23 July 2010.
In addition, EU Regulation 149/2011 was published on 18 February 2011. This regulation has adopted a number of
improvements to International Financial Reporting Standards to be applied from 1 January 2011.
At the date of approval of these 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:
• IFRS 9 - Financial Instruments, as part of the review of the existing IAS 39;
• a number of Exposure Drafts (EDs), also issued as part of the review of the existing IAS 39, regarding Amortised Cost
and Impairment, the Fair Value Option for Financial Liabilities and Hedge Accounting;
• Exposure Draft (ED) “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;
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• Exposure Draft (ED) “Presentation of Financial Statements: Other Items of Comprehensive Income”;
• Exposure Draft (ED) “Revenue from Contracts with Customers” as part of the review of the existing IAS 11 and IAS 18,
regarding revenue recognition;
• Exposure Draft (ED) “Insurance Contracts” as part of the review of the existing IFRS 4, regarding the accounting treatment of insurance contracts;
• Exposure Draft (ED) “Leases” as part of the review of the existing IAS 17, regarding the accounting treatment of leases;
• Exposure Draft (ED) “Income Taxes: Deferred Tax: Recovery of Underlying Assets”.
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.
2.3 - 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 with the tax authorities that expired in 2007, in 2010 Poste Italiane SpA 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 2010, receivables due to the Company from the MEF and the Cabinet Office amount to approximately
1.85 billion euros. This amount consists of:
• receivables of over 854 million euros in the form of Universal Service Obligation (USO) subsidies. Of this amount, collection of approximately 770 million euros will only be possible following formalisation of the Contratto di Programma
(Planning Agreement) for the three-year period 2009-2011;
• receivables of approximately 606 million euros in the form of publisher tariff subsidies. Of this amount, approximately
310 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. This receivable has been accounted for at present value. There is no specific evidence that the remaining
amount has been budgeted for in full by the government and, during 2010, the Cabinet Office moved the date for fixing
the exact amount of subsidies payable from August 2009 to March 2010, whilst awaiting the outcome of the work of a
special interministerial committee;
• further receivables of 390 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 the last two items.
Of the total amount receivable, with a face value of over 1.85 billion euros, in the case of approximately 275 million euros
either no provision has been made in the government’s budget or there is no legislation establishing the procedures for
payment of Poste Italiane SpA, whilst the collection of approximately 1,080 million euros will 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
2010 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 2010 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 of 60 days
(which will, however, following a recent amendment, enter into effect from 1 January 2012) from the date of termination of
employment for appeals against dismissal, and a cap on compensation payable to an employee in the event of “courtimposed 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. At 31 December 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
separate financial statements.
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
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and financial crisis, which has resulted in highly volatile markets and great uncertainty with regard to economic projections,
makes it difficult to produce forecasts that can, without any uncertainty, be defined as reliable.
At 31 December 2010 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 operating Land and Buildings, 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 the Company’s
operating Land and Buildings 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 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 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
economic 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 Poste Italiane SpA’s finances primarily regards BancoPosta’s operations as governed by Presidential
Decree 144/2001. In particular, these transactions regard management of the liquidity deposited in postal current accounts,
carried out in the Company’s own name but subject to restrictions on the investment of such liquidity in compliance with
the applicable legislation, and the management of collections and payments in the name and on behalf of third parties, as
well as the funding of assets and the investment of its own liquidity.
In compliance with the 2007 Budget Law, from that year Poste Italiane SpA has been required to invest the funds raised
as a result of postal current account deposits made by private customers in euro area government securities, whilst the
postal current account deposits of Public Sector customers have continued to be deposited with the MEF. In 2010
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 new investment model approved
by the Board of Directors in April. This new investment profile is, among other things, based on the results of continuous
monitoring of the performance of postal current account deposits, and on an updated statistical/econometric model of
deposits developed by a leading consulting firm. This model forms the basis of the Company’s investment policy with the
aim of mitigating exposure to interest rate and liquidity risk by predicting potential gaps emerging as a result of the need
to reconcile risk exposure with the necessity of earning returns linked to the market interest rate curve.
Poste Italiane SpA’s own liquidity is managed 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 (note 12.7).
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 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 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, which distinguishes between four
main types of risk (a non-exhaustive classification):
252
•
•
•
•
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 their 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.
In constructing the Risk Model adopted in order to monitor credit, liquidity and cash flow interest rate risks, the Company
has also taken account of the authoritative regulatory yardstick provided by the Bank of Italy’s prudential supervisory
standards, despite the fact that the Company is not required to apply such standards.
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”
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 2009 and 31 December
2010 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.
The relevant items (note 8.4) regard investments in equity instruments and available-for-sale (AFS) shares in equity funds.
3.1 - Market risk - Price
Change
in value
Pre-tax
profit
Equity
reserves
Position
+Vol
-Vol
+Vol
-Vol
+Vol
-Vol
2009 effects
Equity instruments
Other investments
61,470
3,271
64,741
15,563
587
16,150
(15,563)
(587)
(16,150)
-
-
15,563
587
16,150
(15,563)
(587)
(16,150)
2010 effects
Equity instruments
Other investments
25,849
3,830
29,679
8,914
453
9,367
(8,914)
(453)
(9,367)
-
-
8,914
453
9,367
(8,914)
(453)
(9,367)
At year-end the Company held 150,628 MasterCard Incorporated class B shares, with a fair value of 25,263 thousand
(compared with 350,628 thousand shares, with a fair value of 60,808 thousand at 31 December 2009), 11,144 Visa
Incorporated class C shares, with a fair value of 586 thousand euros (11,144 shares, with a fair value of 662 thousand euros
at 31 December 2009).
The MasterCard shares are not traded in a regulated stock exchange but, should the Company decide to sell them, they
could be converted into an equal number of class A shares, which are traded on the New York Stock Exchange. The change
during the year was due to the combined effects of forward sales entered into before 31 December 2009, for delivery in
January and February 2010, and a 10% reduction in the share price.
In February 2011, the Visa shares held by the Company, which at 31 December 2010 were not listed in a regulated market,
became convertible into class A shares traded on the NYSE.
For sensitivity analysis purposes, the value of the class A shares was associated with the corresponding class B shares,
taking into account the volatility of the shares traded on the NYSE.
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.
Trade receivables/payables due from and to overseas correspondents
The most significant net position (approximately 83% 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 2010 this position amounts to 596 thousand euros (2,182 thousand euros at 31
December 2009).
254
3.2 - Market risk - SDRs
Change
in value
+Vol
-Vol
Pre-tax
profit
Equity
reserves
+Vol
-Vol
Position in
SDRs/000
Position in
€000
+Vol
-Vol
260 days
260 days
260 days
260 days
260 days
260 days
2009 effects
71,672
(73,677)
(2,005)
77,995
(80,177)
(2,182)
5,839
(6,002)
(163)
(5,839)
6,002
163
5,839
(6,002)
(163)
(5,839)
6,002
163
-
-
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
-
-
At 31 December 2010, the net position in US dollars amounts to 71 thousand euros (20 thousand euros at 31 December 2009), a
negligible sum for the purposes of this analysis.
Financial assets
At 31 December 2010 this item primarily reflects equity instruments held by the Company (note 3.1) denominated in
US dollars.
3.3 - Market risk - US dollar
Change
in value
+Vol
-Vol
Pre-tax
profit
Equity
reserves
+Vol
-Vol
Position in
USD/000
Position in
€000
+Vol
-Vol
260 days
260 days
260 days
260 days
2009 effects
Equity instruments
88,553
88,553
88,553
61,470
61,470
61,470
4,306
4,306
4,306
(4,306)
(4,306)
(4,306)
-
-
4,306 (4,306)
4,306 (4,306)
4,306 (4,306)
2010 effects
Equity instruments
34,539
34,539
34,539
25,849
25,849
25,849
2,630
2,630
2,630
(2,630)
(2,630)
(2,630)
-
-
2,630 (2,630)
2,630 (2,630)
2,630 (2,630)
260 days
260 days
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 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, the following interest rate sensitivity analysis was based on changes in fair value following
a parallel shift in the forward yield curve (+/- 100 bps).
3.4 - Market risk - Fair value interest rate
Change
in value
2009 effects
2010 effects
Available-for-sale financial assets(2)
Pre-tax
profit
Equity
reserves
Notional
Fair value
+100bps
-100bps
+100bps
-100bps
+100bps
-100bps
14,670,700
14,092,700
578,000
-
15,108,809
15,067,840
40,969
-
(732,385)
(687,053)
(45,332)
-
794,709
745,103
49,606
-
-
-
(732,385)
(687,053)
(45,332)
-
794,709
745,103
49,606
-
100,000
100,000
101,143
101,143
(1,078)
(1,078)
1,090
1,090
-
-
(1,078)
(1,078)
1,090
1,090
14,770,700
15,209,952
(733,463)
795,799
-
-
(733,463)
795,799
15,237,350
14,517,350
100,000
620,000
14,521,868
14,535,568
225
(13,925)
(924,776) 1,017,810
(868,629)
955,634
(48,906)
54,216
(7,241)
7,960
-
-
(924,776) 1,017,810
(868,629)
955,634
(48,906)
54,216
(7,241)
7,960
500,000
471,791
500,000
471,791
15,737,350 14,993,659
(1,923)
2,107
(1,923)
2,107
(926,699) 1,019,917
-
-
(1,923)
2,107
(1,923)
2,107
(926,699) 1,019,917
At 31 December 2009 held-for-trading financial assets with a nominal value of 100,000 thousand euros (fair value through profit or loss) were not
considered, as these are not subject to the risk in question as they were hedged through forward sales with settlement in January 2010.
(2)
The effects for 2010 were measured only for the portfolio instruments that were not hedged against changes in fair value.
(1)
BancoPosta’s investment securities (note 12.3) are nearly equally split between Held-to-maturity (HTM) and Available-forsale (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.
This item includes fixed income government securities (ordinary BTPs) with a nominal value of 12,443,600 thousand euros
(11,474,000 thousand euros at 31 December 2009) and positions in inflation-linked BTPs (BTP€i) with a nominal value of
2,073,750 thousand euros (2,618,700 thousand euros at 31 December 2009). The BTP€i, which carry floating rates indexed
to European inflation, have been swapped for fixed-rate positions (cash flow hedge). A portion of the fixed-rate portfolio,
made up of ordinary BTPs, was instead partially hedged against the risk of changes in fair value via asset swap contracts:
- BTPs with a notional amount of 500,000 thousand euros were hedged against the risk of changes in their fair value via
an IRS, effective immediately;
- BTPs with a notional amount of 2,450,000 thousand euros maturing 2026, 2034 and 2040 were partially hedged against
the risk of changes in their fair value via IRSs, starting in 2015, 2016 and 2020, respectively (forward start).
During 2010, also due to the above-mentioned transactions to realign portfolio maturities to the new replication model
approved by the Board of Directors, the duration of the AFS financial assets was 6.23 (at 31 December 2009 the portfolio’s
duration was 4.60), thus increasing, though not to a significant extent, the sensitivity of the fair value of the portfolio to
changes in interest rates.
At 31 December 2010, this form of interest rate risk also influenced the fair value of forward purchases of securities
attributable to BancoPosta and having a notional value of 720,000 thousand euros (note 12.4). These derivative financial
256
instruments are being settled and the related sensitivity analysis, shown solely to ensure full disclosure in table 3.4,
therefore represents a prudential measurement.
In addition to the above sensitivity analysis, the Company monitors the fair value interest rate risk to which BancoPosta’s
available-for-sale securities are exposed through the calculation of VaR (Value at Risk). This is estimated over a time horizon
of 3 days and with a probability of 99%. At 31 December 2010 the maximum VaR for available-for-sale financial assets
amounts to 221,785 thousand euros (104,726 thousand euros at 31 December 2009) and for derivative financial
instruments to 14,588 thousand euros (6,992 thousand euros at 31 December 2009).
Available-for-sale financial assets referred to in note 3.4 are short-term bank instruments with a notional value of 100,000
thousand euros (100,000 thousand euros at 31 December 2009), as well as BTPs of a notional amount of 400,000 thousand
euros (purchased during the year). Of these, securities amounting to 375,000 thousand euros were hedged against
changes in their fair value by entering into an asset swap, effective immediately (note 8.4). The VaR for this portfolio,
calculated on the above basis, amounts to a maximum of 486 thousand euros (307 thousand euros at 31 December 2009).
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.
At 31 December 2010 the following positions are subject to this risk:
Financial assets
Below, for each category of financial instrument the relevant credit exposure is shown. The ratings reported in the table
have been assigned by Moody’s.
3.5 - Credit risk - Financial assets
Item
from Aaa from A1 from Ba1 to
to Aa3 to Baa3
Not rated
Total
from Aaa from A1 from Ba1 to
to Aa3 to Baa3
Not rated
Total
Loans
Receivables
723,686
723,686
-
874,846
853,678
21,168
1,598,532
853,678
744,854
807,970
807,970
-
561,791
561,791
-
2,098
2,098
563,889
563,889
191,143
191,143
-
1,001
1,001
192,144
192,144
Cash flow hedges
Fair value hedges
22,933
22,933
-
-
-
22,933
22,933
-
-
-
-
-
1,308,410
-
876,944
2,185,354
999,113
-
Total
539,083 1,347,053
509,180 509,180
29,903 837,873
540,084 1,539,197
As the international financial crisis peters out, 2010 witnessed the stabilisation of the creditworthiness of the Poste Italiane
SpA’s debtors. In fact, 2009 was characterised by an extensive rating review activity by the main agencies, with a significant
amount of downgrades. Consequently, the Company suffered from a deterioration of the weighted average rating of its
exposure (which went from AA to AA- in 2009), even though the associated financial assets continued to be investment grade.
During the year under review, the macroeconomic events that had an impact on the risk-return profiles of the Company’s
financial assets were the debt crises in Greece and Ireland, which caused spreads among European government bonds to
widen, with a particular impact on those related to Italy’s sovereign risk and the continuing uncertainty about the health of the
banking sector. Nevertheless, the weighted average rating of Poste Italiane SpA’s exposure at 31 December 2010 was
unchanged from that at 31 December 2009 (AA-).
Loans of 853,678 thousand euros at 31 December 2010 (509,180 thousand euros at 31 December 2009) refer entirely to
loans (note 8.1) granted to Group companies and intercompany current accounts (note 8.2), with both types of transaction
conducted on an arm’s length basis. These loans include subordinated loans of 645,000 thousand euros to the insurance
company, Poste Vita SpA (345,000 thousand euros at 31 December 2009).
Receivables (note 8.3) primarily regard claims on the parent, the MEF, amounting to 639,202 thousand euros (769,500
thousand euros at 31 December 2009), and on the counterparties involved in asset swap and interest rate swap
transactions (with collateral provided by a specific Credit Support Annex8), totalling 90,074 thousand euros (55,660
thousand euros at 31 December), which were entered into as cash flow hedges and fair value hedges, respectively, and
in repurchase agreements (collateral governed by a specific Global Master Repurchase Agreement), in the form of
guarantee deposits (almost entirely with counterparties with investment grade ratings).
Other instruments and deposits include investments in fixed rate securities (note 8.4) purchased during 2009 and issued
by Cassa Depositi e Prestiti SpA, with a fair value of 100,825 thousand euros and a face value of 100 million euros (101,143
thousand euros and 100,000 thousand euros, respectively, at 31 December 2009), BTPs with a fair value of 370,966
thousand euros and a face value of 400,000 thousand euros (acquired during the year) and a fiduciary deposit established
in 2002 with a fair value of 92,098 thousand euros and a face value of 93,550 thousand euros (91,001 thousand euros and
107,500 thousand euros, respectively, at 31 December 2009). During the year the face value of this deposit declined by
13,950 thousand euros as a result of losses, recognised in the income statement, following the bankruptcy of the one of
the entities covered by the CDSs.
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. Exposure is monitored at current value, in accordance with the Bank of
Italy’s prudential supervisory instructions.
At 31 December 2010 derivative instruments included in Financial assets have a fair value of 22,933 thousand euros and
consist of 9 asset swaps used as fair value hedges entered into by the Company during the year under review to protect
the value of BTPs with a notional value of 375 million euros from movements in interest rates.
Poste Italiane SpA’s operational characteristics, related in particular to BancoPosta’s investment activities, give rise to a
significant exposure toward the Italian State, involving essentially deposits with the MEF and the majority of holdings of
Italian government securities (note 12.1).
The fair value of derivative financial instruments included in Assets attributable to BancoPosta amounts to 88,205 thousand
euros and primarily reflects asset swaps serving as cash flow hedges (fair value equal to 25,956 thousand euros) and fair
value hedges (fair value equal to 62,024 thousand euros). At 31 December 2010 all counterparties for the Group’s
8. Under these contracts, counterparty risk is limited through periodic margining, whereby if the fair value of the derivative instrument exceeds a set value,
the debtor must post adequate collateral with the creditor.
258
derivatives have investment grade ratings.
During the year accreting9 asset swap contracts on long-term BTP€i were entered into, with a notional amount that varies
over time, so as to minimise collateral requirements.
All asset swap transactions are conducted within the scope of the Credit Support Annex.
Non-current assets - Other assets
3.6 - Credit risk
31 December 2010
Item
Trade receivables due from Public Sector entities
Receivables due under fixed-term
contracts settlement
Third-party deposits in Postal Savings
Books registered in the name of Poste Italiane SpA
Total
of which past due
31 December 2009
Carrying
amount
Specific
impairment
Carrying
amount
Specific
impairment
216,583
-
254,315
-
225,347
3,035
(2,189)
-
233,796
2,954
(2,189)
-
2,957
-
3,101
-
447,922
494,166
-
-
Current assets - Trade receivables
3.7 - Credit risk
31 December 2010
Item
Public Sector
Private customers
Due from subsidiaries
Due from associates
Due from parents
Total
of which past due
Carrying
amount
822,000
174,043
752,015
501,392
249,626
171
1,171,053
Specific
impairment
(20,556)
(4,296)
(90,171)
(35,872)
(72,855)
31 December 2009
Carrying
amount
918,045
224,078
884,078
543,787
271,101
153
1,124,197
3,670,300
3,965,439
407,842
361,614
Specific
impairment
(20,556)
(96,765)
(34,890)
(77,230)
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 2.3
dealing with Revenues and receivables due from the State. All receivables are subject to specific monitoring and
reporting procedures to support credit collection activities.
9. 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.
3.8 - Credit risk
31 December 2010
Item
Prepaid taxes
Accrued income and prepaid expenses
Total
Carrying
amount
253,574
78
186,817
12,817
Specific
impairment
(123,416)
-
31 December 2009
Carrying
amount
232,186
1,086
208,982
3,951
453,286
446,205
1,650
1,052
of which past due
Specific
impairment
(128,408)
-
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 by the need to raise funds at unfair rates.
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 2010 liquidity risk regards the potential exposure deriving from obligations relating to the investment of
deposits by current account customers.
The liquidity risk associated with BancoPosta’s activities regards the investment of current account deposits in euro area
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 prudential 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 30 years. Though not as conservative as the previous model, which assumed
withdrawals over a period of no more than 10 years, the new model is sustainable in view of deposit trends and the highly
liquid nature of investments, thus enabling a parallel improvement in the return profile. This approach is also in line with
the Bank of Italy’s prudential supervisory requirements.
At 31 December 2010 the degree of the match between the maturities of investments in euro area government securities
and the new portfolio replication model approved by the Board of Directors is being calculated, whilst the average term to
maturity of investments as a whole has risen from 4.53 years at 31 December 2009 to 5.56 years at 31 December 2010.
The components of the financial statements most subject to liquidity risk are described below. The amounts shown refer
to the Company’s obligations at maturity (nominal value plus accrued interest).
In order to analyse liquidity risk at 31 December 2010, the timing of withdrawals from postal current accounts held by third
parties (with a carrying amount of 39,488,005 thousand euros) was determined as follows:
• in the case of private customers’ deposits, whose funds are invested in euro area government securities, on the basis
260
of the amortisation schedule deriving from application of the statistical model developed in order to model the behaviour
of current account holders;
• in the case of Public Sector customers, by taking account of the fact that the Company is required to deposit the resulting liquidity with the MEF, and that all changes in the amount due to current account holders is matched exactly in the
balance of the amount deposited with the Ministry after a delay of one bank working day. For this reason both items have
been classified as being available on demand.
The following table shows liabilities increased by the expected cash flows generated by the related interest expense.
Postal current accounts are net of postal current accounts in the name of Poste Italiane SpA.
31 December 2010
Within
Between
12 months 1 and 5 years
Item
Cassa Depositi e Prestiti and
the MEF for management
of postal savings
73,403
Other payables
221,017
66,467
389,212
Derivative financial
instruments
681,696
Postal current accounts
13,218,533 10,904,653
Total liabilities
14,583,861 10,971,120
31 December 2009
Over
5 years
Total
-
73,403
287,484
389,212
13,495,424
13,495,424
681,696
37,618,611
39,050,406
Within
Between
70,766
222,796
-
68,108
-
Over
5 years
Total
-
70,766
290,904
-
547,709
547,709
13,987,933 10,763,868 13,226,556 37,978,357
14,829,204 10,831,976 13,226,556 38,887,736
At 31 December 2010 these liabilities are invested in the following types of financial instrument. Investments in fixed
income instruments (a carrying amount of 29,303,781 thousand euros, as described in note 12.2) 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.
Item
Poste Italiane SpA’s own
liquidity held in postal
current accounts
Amounts due from the
Italian Treasury
Other receivables
Derivative financial
instruments
(Capital + Interest)
Total assets
Within
Between
7,014,078
-
Over
5 years
-
Total
7,014,078
Within
Between
8,320,632
-
Over
5 years
-
Total
8,320,632
(840,624)
-
-
(840,624)
(1,515,829)
-
-
(1,515,829)
1,188,592
551,553
2,351,245
-
-
1,188,592
551,553
2,351,245
839,808
706,910
2,660,696
-
-
839,808
706,910
2,660,696
-
-
-
-
104,110
-
-
104,110
3,583,258 11,348,216
28,551,677
43,483,151
3,289,121
14,220,634 17,136,087 34,645,842
28,551,677 53,747,995
14,405,448
14,220,634 17,136,087 45,762,169
13,848,102 11,348,216
The liquidity risk profile at 31 December 2010 has increased slightly from the preceding year, due to the realignment,
which is still under way, of the investment maturities with the new statistical model utilised to define the maturity profile
of the deposit base.
Whilst demand deposits from Public Sector entities fell, demand deposits from private customers are up, above all the
retail component, which is typically more stable. Nevertheless, the Company continues to closely monitor the deposit base.
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 2010 and 31 December 2009.
Item
Within
Between
Borrowings
954,346
Current account balances
of subsidiaries
231,550
2,007,623
Total
3,193,519
Over
5 years
Within
Between
Total
1,446,929
-
1,108
-
2,402,383
-
276,552
2,331
20,821
1,467,750
262,362
263,470
231,550
2,290,806
4,924,739
325,418
2,062,284
2,666,585
Over
5 years
Total
1,698,234
-
3,699
-
1,978,485
2,331
20,070
1,718,304
250,465
254,164
325,418
2,332,819
4,639,053
In the fourth quarter of 2010 Poste Italiane SpA introduced new short-term funding arrangements via the matched sale
repurchase of BTPs held in BancoPosta’s portfolio with the objective to optimise profitability and to meet temporary cash
withdrawals from demand deposits.
Current liabilities - Trade payables
Item
Suppliers
Subsidiaries
Prepayments from customers
Interest payable to
current account holders
Total
Within
Between
Over
5 years
Total
Within
Between
Over
5 years
Total
1,028,834
310,919
186,922
-
-
1.028,834
310,919
186,922
1,113,077
234,886
208,269
-
-
1,113,077
234,886
208,269
66,665
1,593,340
-
-
66,665
1,593,340
95,865
1,652,097
-
-
95,865
1,652,097
262
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 2009 and 31 December 2010, 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 summarised in
the table below, and calculated to reflect changes resulting from a parallel shift in the forward yield curve (+/- 100 bps).
3.13 - Cash flow interest rate risk and hedging policy
Pre-tax
profit
2009 effects
Loans
Other investments
Due from MEF
Loans
Bank borrowings
Borrowings
Borrowings (from subsidiaries)
Due from MEF
Loans
Bank borrowings
Borrowings
Borrowings (from subsidiaries)
Total
equity
Note
Notional
+100bps
-100bps
+100bps
-100bps
+100bps
-100bps
[8.1]
[8.4]
[8.4]
310,840
107,500
3,108
1,075
(3,108)
(1,075)
-
-
3,108
1,075
(3,108)
(1,075)
[12.1]
[12.1]
6,804,803
68,048
(68,048)
-
-
68,048
(68,048)
[8.2]
[8.3]
196,550
55,660
1,966
557
(1,966)
(557)
-
-
1,966
557
(1,966)
(557)
[13.1]
1,586,988
15,870
(15,870)
-
-
15,870
(15,870)
[20.3]
(250,000)
(2,500)
2,500
-
-
(2,500)
2,500
[20.3]
[20.4]
[20.6]
(325,418)
-
(3,254)
-
3,254
-
-
-
(3,254)
-
3,254
-
8,486,923
84,870
(84,870)
-
-
84,870
(84,870)
[8.1]
[8.4]
[8.4]
655,560
375,000
93,550
6,556
3,750
936
(6,556)
(3,750)
(936)
-
-
6,556
3,750
936
(6,556)
(3,750)
(936)
[12.1]
[12.1]
500,000
6,173,454
5,000
61,735
(5,000)
(61,735)
-
-
5,000
61,735
(5,000)
(61,735)
[8.2]
[8.3]
195,943
90,074
1,959
901
(1,959)
(901)
-
-
1,959
901
(1,959)
(901)
[13.1]
896,297
8,963
(8,963)
-
-
8,963
(8,963)
[20.3]
(250,000)
(2,500)
2,500
-
-
(2,500)
2,500
[20.3]
[20.4]
[20.6]
(37)
(231,518)
(39,720)
(2,315)
(397)
2,315
397
-
-
(2,315)
(397)
2,315
397
8,458,603
84,588
(84,588)
-
-
84,588
(84,588)
2010 effects
Loans
Other investments
Equity
reserves
Financial assets - Fixed income instruments
Cash flow interest rate risk concerns investments in floating-rate financial instruments, or rendered such by the use
of fair value hedges. At 31 December 2010 exposure to this risk regards fixed-rate instruments held by Poste Italiane
SpA having a notional amount of 375,000 thousand euros. These consist of BTPs that have been hedged against
market risk, as described in note 3.4.
At 31 December 2010 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, in accordance with the method provided for by the European Commission in its Decision of 16 July 2008 and
set out in the related agreement between the MEF and Poste Italiane SpA, which was approved by Ministerial Decree
of 7 April 2009. Although the amounts involved are lower, this risk also regards the liquidity deposited in a Buffer
Account with the MEF, which earns interest in accordance with the treasury services agreement renewed on 18 June
2009. This is calculated as the average yield on auctions of Short-term Treasury Certificates (BOT) organised by the
MEF during the relevant six-month period.
Moreover, as noted above, this risk concerns a portion of the fixed-rate portfolio related to BTPs, whose fair value was
hedged against any market risk as follows:
- BTPs with a notional amount of 500,000 thousand euros through IRS contracts, which took effect immediately;
- BTPs with a notional amount of 2,450,000 thousand euros maturing in 2026, 2034 and 2040 through IRS contracts,
which will take effect in 2015, 2016 and 2020, respectively (forward start).
BANKING BOOK INTEREST RATE RISK
This is the risk, or the probability, that movements in interest rates will have a negative impact on an entity’s operating results
and financial position. 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 most of the risk in question is linked to the investment of the funds deriving from the postal current
account deposits of private customers in euro area government securities, as well as the liquidity held by Public Sector
entities in current accounts with Poste Italiane SpA, which must be deposited with the MEF. Returns on the investment
of these funds is related to general trends in interest rates, as the Company takes a commercial approach to their
management, and interest paid on these deposits is not index-linked:
• investments in euro area government securities yield a return based on the interest rates prevailing at the time of purchase; BancoPosta’s securities portfolio is currently invested in fixed income instruments, or floating rate instruments that
yield fixed interest payments thanks to the asset swaps described above (note 3.4)10;
• as noted elsewhere (note 3.13), the funds deposited with the MEF yield floating interest payments.
Both types of investment are associated with an interest rate risk profile that is analysed and monitored with respect to
the financial characteristics of the instruments and is managed through an adequate hedging policy (note 12.4). As a result,
at 31 December 2010 forward purchases with a notional value of 720,000 thousand euros, maturing in 2011, are in place,
in addition to asset swaps with a notional value of 2,073,750 thousand euros.
10. The residual use of fair value hedges, in contrast, primarily enables the inclusion, among potential investments, of longer term securities, reducing the
related durations and thus the volatility of the related fair values.
264
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).
3.14 - Fair value hierarchy
31 December 2010
Item
Level 1
31 December 2009
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets
475,621 140,880
AFS financial assets
475,621 117,947
Equity instruments
25,849
471,791
Other investments
3,830
92,098
22,933
Assets attributable to BancoPosta 14,535,568
88,205
Investments in financial instruments 14,535,568
AFS
14,535,568
Held-for-trading
88,205
Total assets at fair value
15,011,189 229,085
Liabilites attributable to BancoPosta
- (90,501)
- (90,501)
Total liabilities at fair value
- (90,501)
4,617
4,617
4,617
4,617
-
621,118
598,185
30,466
471,791
95,928
22,933
14,623,773
14,535,568
14,535,568
88,205
15,244,891
(90,501)
(90,501)
(90,501)
104,414
104,414
101,143
3,271
15,171,861
15,171,861
15,067,840
104,021
15,276,275
-
152,471
152,471
61,470
91,001
40,969
40,969
193,440
(2,331)
(2,331)
(93,082)
(93,082)
(95,413)
4,617
4,617
4,617
4,617
-
261,502
261,502
66,087
101,143
94,272
15,212,830
15,171,861
15,067,840
104,021
40,969
15,474,332
(2,331)
(2,331)
(93,082)
(93,082)
(95,413)
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 Company 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 Company has formalised and agreed a
methodological and organisational framework to manage the operating risk related to the products/processes of BancoPosta.
Reputational risk
Poste Italiane’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.
2004/39/EC, “MiFID”), the Company has adopted the “consulting service” model.
The crisis of recent years has had profound effects on the performance of all the financial instruments on the market,
especially those whose returns are magnified. These instruments, which are used exclusively, and on a residual basis, by
the subsidiary Poste Vita SpA to invest the premiums collected on so-called Branch III policies, are inevitably exposed to
higher risk and volatility of their fair value.
Even though the Company has developed over time prudential policies in the customers’ best interests, which entails the
selection of domestic and foreign issuers solely with investment grade ratings, the situation prompted closer scrutiny at
Group level, so as to ensure full awareness of the performance of the products placed and the risks for the customers that,
to this day, characterise these products11.
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 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.
FINANCIAL STRUCTURE
Poste Italiane SpA’s financial structure at 31 December 2010 is solid and balanced, and adequately protected from liquidity
or refinancing risks. Overall borrowings are primarily medium/long-term, except for bank overdrafts, which are of a limited
amount. Medium/long-term debt is sufficient to cover expected financial needs.
At the end of the reporting period the Company has unused uncommitted lines of 1,230 million euros. It also has unused
overdraft facilities in place, totalling 40.7 million euros, of which 37 thousand euros has been used, and bank guarantee
facilities with a value of 174.5 million euros, of which guarantees with a value of 54 million euros have been used in the
interests of the Company and 0.7 million euros in the interests of Group companies (note 34.4).
11. In this regard, Poste Vita issued over the years Branch III index- and unit-linked policies that call for the investment of the premiums paid in a structured
bond or in mutual funds whose increase in value reflects on the value of the policies. 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 credit and financial risks associated with them are
borne by the customer. In order to protect its own good name and reputation, and those of its Group, as well as its credentials as a capable operator, the
Company constantly monitors developments in the risk profile. Particular attention was given to monitoring certain financial instruments underlying indexlinked policies issued in the period 2001-2002 by Programma Dinamico SpA, a securitisation vehicle set up under Law 130/99 that matches the definition
of control established in the combined provisions of IAS 27 and SIC 12. These instruments, whose remaining fair value at 31 December 2010 is 378 million euros, bring together different financial positions, including securitisation transactions and credit and financial derivatives (CDOs - Collateralised Debt
Obligations), whose past performances were affected by the financial and credit market crisis. In this context, in May 2009 and December 2008 Poste
Vita SpA offered the holders of certain Branch III policies the opportunity to convert these policies into Branch I policies providing minimum returns guaranteed by the Company. Whilst it is true that, in accordance with the legal nature of the products in question, the related investment risk is transferred
to policyholders, the Company has carried out the restructuring initiatives in order to safeguard its commercial interests, which could be prejudiced by
widespread dissatisfaction among customers, and the potential impact on its reputation as a result of a general expression of discontent.
266
4 - PROPERTY, PLANT AND EQUIPMENT
The following table shows changes in Property, plant and equipment in 2009 and 2010:
4.1 - Changes in Property, plant and equipment
Land
Cost
Carrying amount
72,293
72,293
Purchases
Adjustments
Reclassifications
Disposals
Depreciation
Impairments
Total changes
608
495
(2,773)
(244)
(1,914)
Cost
Carrying amount
70,379
70,379
Purchases
Adjustments(1)
Disposals(3)
Depreciation
Impairments
Total changes
Cost
Carrying amount
625
(26)
(52)
(462)
85
70,567
(103)
70,464
Operating
properties
Plant and
equipment
2,418,053 2,092,277
(761,509) (1,432,204)
(1,482)
(21,646)
1,655,062
638,427
49,472
63
58,718
(5,399)
(92,126)
(12,550)
(1,822)
Industrial and
commercial
Leasehold
equipment improvements
274,798
(210,398)
(770)
63,630
89,205
48,495
(1,039)
(136,026)
(705)
(70)
12,422
2,125
(3)
(17,497)
(2,953)
2,517,990 1,920,426
(850,769) (1,278,093)
(13,981)
(3,976)
1,653,240
638,357
289,352
(227,905)
(770)
60,677
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)
2,521,092 1,915,946
(923,378) (1,324,175)
(15,248)
(3,640)
1,582,466
588,131
301,088
(241,689)
(770)
58,629
Other
assets
473,752 1,100,655
(355,386) (893,659)
(1)
(1)
118,365 206,995
17,872
41,235
(466)
(20,059)
(750)
37,832
38,304
43,800
(526)
(82,126)
(548)
210,022 1,176,826
(53,821) (970,378)
(4)
(1)
156,197 206,447
27,441
37,988
(1)
(26,042)
(947)
38,439
55,028
40,253
(346)
(78,626)
16,309
274,938 1,268,318
(80,268) (1,045,561)
(34)
(1)
194,636 222,756
Assets in the course
of construction
and prepayments
Total
310,770 6,742,598
- (3,653,156)
(23,900)
310,770 3,065,542
61,072
(30)
(191,417)
(130,375)
268,955
528
183
(7,677)
(347,834)
(14,005)
(99,850)
180,395 6,365,390
- (3,380,966)
(18,732)
180,395 2,965,692
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
Adjustments(1)
Cost
Other liabilities
Total
-
-
-
-
-
2
(2)
-
-
2
(2)
-
Cost
Total
(26)
(26)
(22,265)
22,529
264
36,284
6,839
43,123
35
(9)
26
38,821
(833)
37,988
40,255
(2)
40,253
(156,112)
(156,112)
(63,008)
28,524
(34,484)
Disposals(3)
Cost
(411)
359
(1,644)
738
-
(78,008)
76,992
733
(720)
631
-
(1,346)
428
917
(3,793)
3,447
-
-
(85,922)
82,236
2,009
(52)
(906)
(283)
(89)
(1)
(346)
-
(1,677)
Total
At 31 December 2010 Property, plant and equipment includes assets located on land held under concession or subconcession, which are to be handed over free of charge at the end of the concession term, with a carrying amount of
173,782 thousand euros (179,850 thousand euros at 31 December 2009).
The principal changes during 2010 are described below.
Capital expenditure of 223,968 thousand euros primarily regards:
• 27,011 thousand euros, relating primarily to the purchase and maintenance of properties owned by the Company, including 23,015 thousand euros relating to the extraordinary maintenance of post offices, local head offices and mail sorting
offices, and 3,996 thousand euros regarding the purchase of premises used as post offices;
• 37,244 thousand euros relating to plant, with the most significant items relating to plant for buildings (23,280 thousand
euros), the purchase of sorting equipment used at Sorting Centres (11,253 thousand euros), and the installation of alarm
and video surveillance systems at the various sites used by the Company (1,748 thousand euros);
• 12,421 thousand euros primarily relating to the purchase of security equipment for post office access and for the deposit of cash and sundry documents;
• 27,441 thousand euros invested in plant upgrades (17,816 thousand euros) and structural improvements (9,625 thousand
euros) for properties held under lease;
• 55,028 thousand euros regarding other assets and primarily including 34,166 thousand euros for the purchase of new
computer hardware for post offices and head offices and the expansion of storage systems, 8,075 thousand euros for
the purchase of furniture and fittings in connection with the new layouts for post offices, and 4,427 thousand euros for
the purchase of other durable goods required in order to improve delivery activities;
• 64,198 thousand euros referring to investments in progress, with 32,292 thousand euros for the purchase of computer
hardware and other equipment yet to enter service, 18,319 thousand euros relating to the restyling of post offices, and
8,313 thousand euros regarding the restructuring of Sorting Centres.
Impairments of 3,073 thousand euros primarily regard:
• 1,020 thousand euros relating to assets located on land held under concession or sub-concession, for which, 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;
• 947 thousand euros regarding leasehold improvements following early termination of the leases.
Reclassifications from assets in the course of construction, totalling 156,112 thousand euros, regard the purchase cost of
assets that became available and ready for use during the year. Above all, such assets regard the installation of equipment
at Sorting Centres, the rollout of hardware held in storage and completion of the process of restyling leased properties.
Disposals, with a carrying amount of 1,677 thousand euros, primarily regard the sale of operating properties (906 thousand
euros), the disposal or retirement of obsolete assets and connection technology (482 thousand euros) and the retirement
of components of the fleet as a result of stolen or scrapped vehicles (145 thousand euros). The impact of these disposals
on the income statement is described in note 25.2.
268
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.
The following changes in Investment property took place in 2010 and 2009:
5.1 - Changes in Investment property
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
2010
2009
127,310
(45,172)
(5,121)
77,017
147,584
(47,916)
(8,736)
90,932
469
29,069
(10,908)
(4,727)
1,103
15,006
288
(753)
(10,956)
(4,311)
1,817
(13,915)
163,120
(67,662)
(3,435)
92,023
140,037
127,310
(45,172)
(5,121)
77,017
115,332
53,701
(24,632)
29,069
(1,871)
653
465
(753)
(18,360)
6,869
583
(18,691)
6,402
1,333
(10,908)
(10,956)
Following a change in use, the portion of a property named Centro Nazionale di Scanzano (located in the Province of
Perugia) owned by the Company, with a carrying amount of 27,672 thousand euros, was reclassified from operating
properties to this asset category.
The fair value of Investment property at 31 December 2010 amounts to 140,037 thousand euros. This value includes
86,381 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.
6 - INTANGIBLE ASSETS
The following table shows changes in Intangible assets in 2009 and 2010:
6.1 - Changes in Intangible assets
Cost
Carrying amount
Purchases
Adjustments
Reclassifications
Amortisation
Total changes
Cost
Carrying amount
Purchases
Adjustments
Amortisation
Total changes
Cost
Carrying amount
Cost
Total
Industrial patents and
intellectual property
rights
Concessions,
licences, trademarks
and similar rights
Intangible assets in
progress and
prepayments
Other
Total
950,328
(721,945)
228,383
2,010
(1,917)
93
72,626
72,626
68,868
(68,868)
-
1,093,832
(792,730)
301,102
123,684
50,399
(140,553)
33,530
16
(93)
(77)
60,783
(103)
(50,321)
10,359
-
184,483
(103)
78
(140,646)
43,812
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)
(57,517)
(5)
(5)
102,844
(31,890)
70,954
-
155,800
(142,368)
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
31,890
31,890
-
(31,890)
(31,890)
-
-
Investment in Intangible assets during 2010 amounts to 155,800 thousand euros, including 9,184 thousand euros regarding
software developed in-house and the related costs.
The increase of 52,956 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 used by the Company for innovative
Mail services, WEB Oriented services and BancoPosta services and in updating Asset and Configuration Management.
New software applications were also purchased for use in the maintenance, evolution and development of the
technology infrastructures used in the sale of BancoPosta services and in the updating of the platform used to provide
multi-channel services.
The balance of Intangible assets in progress and prepayments includes uncompleted investment, primarily regarding the
development of software used in BancoPosta services (42,637 thousand euros), the platform for Integrated Web Services
270
provided to postal customers (19,160 thousand euros), the infrastructure platform (15,610 thousand euros), the postal
products platform (12,400 thousand euros) and the platform used in providing multi-channel services (11,445 thousand euros).
During the year, the Company effected reclassifications from Intangible assets in progress to Industrial patents and
intellectual property rights, amounting to 31,890 thousand euros. This primarily reflects the release and entry into service
of new software programmes and the evolution of existing programmes.
7 - INVESTMENTS
This item includes the following:
7.1 - Investments
Item
1,016,419
980
1,017,399
1,074,632
1,074,632
Investments in subsidiaries
Investments in associates
Total
Changes in investments in subsidiaries during 2009 and 2010 are as follows:
Investments
Balance at
1 January 2009
in subsidiaries
CLP ScpA
Poste Link Scrl
Cons. Servizi di Telefonia Mobile ScpA
EGI SpA
Mistral Air Srl
Poste Energia SpA
PosteMobile SpA
PosteShop SpA
Poste Tributi ScpA
Poste Tutela SpA
Poste Vita SpA
Poste Voice SpA
Postecom SpA
Postel SpA
Total
Additions
Subscriptions/
Capital
contributions Acquisitions
Reductions
Sales,
liquidations,
mergers
Adjustments
Reval.
Balance at
(Impair.) 31 December 2009
12,000
263
84
70
61
191,410
2,769
120
1,739
27,551
5,815
1,808
818
563,481
319
12,789
131,575
105,460
3,000
13,500
-
-
-
-
-
12,000
263
84
70
61
191,410
5,769
120
1,739
41,051
5,815
1,808
818
563,481
319
12,789
131,575
105,460
1,058,132
16,500
-
-
-
-
1,074,632
Investments
Balance at
1 January 2010
in subsidiaries
12,000
CLP ScpA
263
84
Poste Link Scrl
70
Cons. Servizi di Telefonia Mobile ScpA
61
EGI SpA
191,410
Mistral Air Srl
5,769
Poste Energia SpA
120
1,739
PosteMobile SpA
41,051
PosteShop SpA
5,815
Poste Tributi ScpA
1,808
Poste Tutela SpA
818
Poste Vita SpA
563,481
Poste Voice SpA
319
Postecom SpA
12,789
Postel SpA
131,575
105,460
Total subsidiaries
1,074,632
in associates
Total associates
Total
1,074,632
Additions
Subscriptions/
Capital
contributions Acquisitions
Reductions
Sales,
liquidations,
mergers
Adjustments
Reval.
Balance at
(Impair.) 31 December 2010
3,500
1,739
5,239
-
(84)
84
(1,739)
(42)
(1,781)
-
(277)
(61,394)
(61,671)
12,000
263
154
61
191,410
9,269
120
41,051
5,815
1,808
818
563,481
12,789
131,575
45,805
1,016,419
980
980
6,219
-
(1,781)
-
(61,671)
980
980
1,017,399
Changes during 2010 regard:
• the merger of Consorzio Poste Contact, 70% owned by Poste Italiane SpA, 15% owned by Postecom SpA and 15%
owned by Postel SpA, with and into the subsidiary, Poste Link Scrl, on 24 February 2010, with effect for legal purposes
from 8 March 2010 and for accounting and tax purposes from 1 January 2010;
• the payment of 3,500 thousand euros in capital contributions to Mistral Air Srl to cover the loss reported at 30 September
2009 and to establish an extraordinary reserve, as approved by the Extraordinary General Meeting of the investee company’s shareholders on 9 February 2010;
• subscription of the capital increase, totalling 1,739 thousand euros, carried out by SDA Express Courier SpA, following
approval by the Extraordinary General Meeting of the investee company’s shareholders on 17 March 2010, via Poste
Italiane SpA’s contribution of 100% of its stake in Poste Italiane Trasporti SpA; on 20 December 2010 the merger deed
was executed, merging Poste Italiane Trasporti SpA with and into SDA Express Courier SpA, with effect for legal purposes from 31 December 2010 and for accounting and tax purposes from 1 January 2010;
• the transfer, on 24 February 2010, of the entire investment in Poste Voice SpA to Poste Link Scrl (a wholly owned subsidiary: 70% owned by Poste Italiane SpA, 15% Postel SpA and 15% Postecom SpA) at a price of 42 thousand euros;
on 15 June 2010 the merger deed was executed, merging Poste Voice SpA with and into Poste Link Scrl, with effect for
accounting and tax purposes from 1 January 2010; following registration of the merger deed on 25 June 2010, Poste
Voice SpA was cancelled from the Companies’ Register;
• the subscription of 32.45% of the share capital of Telma-Sapienza Scarl at a cost of 490 thousand euros, following the
272
acceptance by this company’s shareholders of Poste Italiane SpA’s participation on 11 October 2010 and payment of a
further 490 thousand euros in the form of a statutory membership fee; the company is engaged in research, training and
the development of new methods of learning and is involved in experimenting with new educational technologies.
The following transactions also took place without modifying the value of the Company’s direct interests in the companies
concerned:
• the establishment by SDA Express Courier SpA, on 23 June, of Kipoint SpA with the aim of transferring the “Kipoint”
division acquired from PosteShop SpA to the new company; this transaction was completed on 27 October 2010 with
execution of the contract transferring the division;
• the conclusion, on 20 December 2010, of an agreement between Poste Italiane SpA and UniCredit SpA for the acquisition, at a price of 136 million euros, of the entire share capital of UniCredit MedioCredito Centrale SpA, a company that
promotes and manages government subsidies for businesses designed to support economic development; the effectiveness of this agreement is subject to the fulfilment of certain conditions precedent, including clearance from the
Antitrust Authority and the Bank of Italy.
The following table shows a list of investments in subsidiaries and associates at 31 December 2010:
7.4 - List of investments in subsidiaries and associates
Name
in subsidiaries
CLP ScpA
Poste Link Scrl(2)
Consorzio per i Servizi di Telefonia
Mobile ScpA(2)
EGI SpA
Mistral Air Srl
Poste Energia SpA(2)
PosteMobile SpA
PosteShop SpA
Poste Tributi ScpA
Poste Tutela SpA
Poste Vita SpA(2)
Postecom SpA
Postel SpA
in associates
Telma-Sapienza Scarl(3)
Carrying Difference between
amount at Equity and carrying
31 Dec 2010
amount
% interest
Share
capital (1)
Profit/(Loss) for
the year
Carrying amount
of Equity
Share
of Equity
100
51
70
12,000
516
200
17,210
3,308
66,467
516
11,539
66,467
263
8,077
12,000
263
154
54,467
7,923
51
55
100
100
100
100
70
100
100
100
100
100
120
103,200
530
120
2,582
2,582
2,583
153
561,608
6,450
20,400
56,339
18,338
(1,518)
78
5,464
(2,500)
971
188,058
(1,106)
9,692
(34,508)
120
435,616
1,613
875
14,886
3,307
2,583
8,146
1,240,577
38,721
148,625
52,449
61
239,589
1,613
875
14,886
3,307
1,808
8,146
1,240,577
38,721
148,625
52,449
61
191,410
9,269
120
41,051
5,815
1,808
818
563,481
12,789
131,575
45,805
48,179
(7,656)
755
(26,165)
(2,508)
7,328
677,096
25,932
17,050
6,644
32.45
1,510
-
980
(980)
Consortium fund in the case of consortia. The registered offices of subsidiaries and associates are all located in Rome.
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.
(3)
Figures unavailable.
(1)
(2)
The impairment testing of investments required by the related accounting standards has been conducted. The tests carried
out at 31 December 2010 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
2% was used in the tests carried out at 31 December 2010.
Based on the available prospective information and the results of the impairment tests conducted, the value of the
investment in SDA Express Courier SpA has been written down by 61,394 thousand euros, in part by using the provisions
made in 2009 (classified as Other provisions for liabilities and charges) to cover any eventual deterioration in the parameters
used in preparing the long-term plans. Based on the specific nature of the business and organisational changes at SDA
Express Courier SpA, the relevant impairment test was conducted on the basis of five-year projections.
8 - FINANCIAL ASSETS
At 31 December 2010 and 2009 financial assets break down as follows:
8.1 - Financial assets
Item
Loans
Receivables
Equity instruments
Other investments
Fair value hedges
Total
Non-current
assets
991,800
655,560
336,240
Current
assets
606,732
198,118
408,614
489,494
30,466
367,200
91,828
20,517
20,517
1,501,811
Total
1,598,532
853,678
744,854
Non-current
assets
756,159
310,840
445,319
Current
assets
590,894
198,340
392,554
Total
1,347,053
509,180
837,873
108,691
104,591
4,100
598,185
30,466
471,791
95,928
257,107
66,087
100,280
90,740
4,395
863
3,532
261,502
66,087
101,143
94,272
2,416
2,416
717,839
22,933
22,933
2,219,650
1,013,266
595,289
1,608,555
LOANS AND RECEIVABLES
Loans
Loans refer entirely to amounts due from Group companies, and break down as follows:
Non-current portion:
• 645,000 thousand euros relating to three 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. This lending consists of a loan with a term to maturity of up to 7 years, totalling 45,000 thousand euros,
274
disbursed on 12 May 2005, a loan of 250,000 thousand euros disbursed on 18 April 2008 and a loan with a term to maturity of up to 5 years, totalling 350,000 thousand euros, disbursed on 24 June 2010;
• 10,560 thousand euros relating to three 5-year loans (3,600. 960 and 6,000 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:
• 195,982 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 8.2, and including accrued interest income of 39 thousand euros;
• 2,136 thousand euros in interest accrued at 31 December 2010 on loans to the subsidiaries Poste Vita SpA and Postel SpA,
accounted for in the non-current portion above.
8.2 - Current portion of loans and receivables
Name
Direct subsidiaries
Mistral Air Srl
Poste Energia SpA
Poste Vita SpA
Postel SpA
Accrued interest on non-current loans
Total
Loans
Intercompany
accounts
Total
Loans
Intercompany
accounts
Total
5,280
20,040
25,320
5,759
1,805
106,442
56,656
170,662
5,759
1,805
111,722
76,696
195,982
50,000
5,280
25,133
80,413
4,671
74,158
37,308
116,137
4,671
50,000
79,438
62,441
196,550
2,136
-
2,136
1,790
-
1,790
27,456
170,662
198,118
82,203
116,137
198,340
Receivables
Receivables break down as follows:
8.3 - Financial receivables
Non-current
assets
Current
assets
Total
Non-current
assets
Current
assets
Total
324,503
314,699
639,202
436,413
333,087
769,500
324,503
292,454
616,957
436,413
309,502
745,915
repayment of interest
on loan (Law 887/84)
-
9,633
9,633
-
11,665
11,665
interest on Poste Italiane SpA’s liquidity
-
5,601
5,601
-
7,838
7,838
repayment of sums in dormant accounts
-
7,011
7,011
-
4,082
4,082
11,737
-
11,737
8,906
-
8,906
Due from parent
repayment of loans accounted
for in liabilities
Due from buyers of service accommodation
Due from overseas postal operators
for international money orders
-
3,841
3,841
-
3,807
3,807
Due from others
-
90,751
90,751
-
56,337
56,337
-
(677)
(677)
-
(677)
(677)
336,240
408,614
744,854
445,319
392,554
837,873
Total
At 31 December 2010 the fair value of receivables, totalling 616,957 thousand euros, due from the parent, the MEF, as
repayment of loans accounted for in liabilities, amounts to 627,630 thousand euros. At 31 December 2009 the fair value
of this item, which at the time had a carrying amount of 745,915 thousand euros, was 777,094 thousand euros. The
carrying amount of the other receivables in this category approximates to fair value.
Receivables due from the parent, the MEF, amounting to 639,202 thousand euros, primarily regard a receivable of 616,957
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 cost12 of a receivable with a face value of 666,901 thousand euros, which is expected to be collected by 2016.
During 2010 the Company collected receivables with a face value of 155,237 thousand euros and estimated accrued
finance income on the present value of the receivables to be 26,279 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 887/8413.
The face value of these receivables is as follows:
Legislation
Law
Law
Law
Law
227/75 (mechanisation of PO services)
39/82 (subsequent changes to PO services)
887/84
41/86
Total
Face value of receivable
21,885
382,714
260,344
1,958
666,901
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. The difference of 161,128 thousand euros between the face value of the receivable and the face
value of the liability of 505,773 thousand euros (note 20.2), which corresponds to the amortised cost, is due to repayment
of the principal falling due in 2010 and in the process of collection.
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 in the process of collection;
• 5,601 thousand euros due as accrued interest on the deposit of Poste Italiane SpA’s liquidity with the MEF in 2010;
• 7,011 thousand euros for amounts returned to customers holding dormant accounts, the balances of which had previously
been paid into a specific fund set up by the MEF, pursuant to Presidential Decree 116/2007. As envisaged by MEF Circular
11439 of 13 February 2009, the Company, which has advanced the sums claimed to customers, applied to the Ministry for
reimbursement on 19 November 2010.
12. 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.
13. 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 2008 was, instead, paid to Poste Italiane SpA from 2007.
276
Amounts due from others, totalling 90,751 thousand euros, include:
• guarantee deposits, totalling 90,074 thousand euros, accounted for by the Company in current assets, including 89,560
thousand euros established during the year in favour of counterparties with whom the Company has executed asset swap
transactions (with collateral provided by a specific Credit Support Annex) as part of Poste Italiane SpA’s cash flow and fair
value hedging policies (notes 8.6 and 12.4), and 514 thousand euros in favour of counterparties in outstanding repo liabilities on fixed income securities (with collateral provided by a specific Global Master Repurchase Agreement) (note 12.7);
• 677 thousand euros resulting from early termination of two Interest Rate Swaps carried out by the Company in accordance with the related contracts terms. This amounts has been fully written down following the counterparty’s declaration of bankruptcy in 2008.
AVAILABLE-FOR-SALE FINANCIAL ASSETS
Available-for-sale financial assets break down as follows:
8.4 - Available-for-sale financial assets
30,466
471,791
92,098
3,830
95,928
598,185
Equity instruments
Fiduciary deposits
Mutual investment funds
Other investments
Total
66,087
101,143
91,001
3,271
94,272
261,502
The following changes took place during the year:
8.5 - Changes in Available-for-sale financial assets
2010
Note
Additions/Disbursements
FV gains and losses
through Equity
FV gains and losses
Change in amortised cost
Accrued income
Reductions/Settlement
of accrued income
[17.1]
2009
Equity
instruments
66,087
-
Fixed
income
instruments
101,143
500,324
Other
investments
94,272
-
(574)
(7,241)
1,647
(6,168)
24,725
498
(7,656)
17,567
2,210
-
(24,569)
(1,257)
4,629
270
(22,359)
(1,257)
4,899
2,338
-
(50)
863
261
2,338
(50)
1,124
(37,257)
(101,238)
(261) (138,756)
-
(409,146)
(1,447) (410,593)
30,466
471,791
66,087
101,143
94,272 261,502
95,928
Equity
Total instruments
261,502
38,970
500,324
54
598,185
Fixed
income
instruments
408,978
100,000
Other
investments
Total
103,114 551,062
- 100,054
Equity instruments
Equity instruments primarily include:
• 25,263 thousand euros relating to the fair value of 150,628 class B shares in MasterCard Incorporated (350,628 shares
with a fair value of 60,808 thousand euros at 31 December 2009). These equity instruments are not quoted on a regulated market but, should it be necessary to sell them, may be converted into an equal number of class A shares, which are
listed on the New York Stock Exchange. During the year under review the Company settled the forward sale of 150,000
shares, under an agreement executed on 31 December 2009, and further forward sales of 50,000 shares in January and
February 2010, realising a total gain of 31,575 thousand euros;
• 4,500 thousand euros regarding the historical cost of the Company’s 15% interest in Innovazione e Progetti ScpA, the
value of which is unchanged with respect to the previous year;
• 586 thousand euros relating to the fair value of 11,144 class C shares in Visa Incorporated (at 31 December 2009: 11,144
shares with a fair value of 662 thousand euros). 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,
at an exchange ratio of one for one from February 2011;
• 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.
This item refers to investments in fixed income instruments with a total face value of 500,000 thousand euros. These
instruments consist of bonds issued by Cassa Depositi e Prestiti SpA via a private placement with a face value of 100,000
thousand euros (a fair value of 100,825 thousand euros) and BTPs acquired during the year with a face value of 400,000
thousand euros (a fair value of 370,966 thousand euros), including 375,000 thousand euros immediately hedged via asset
swaps and fair value hedges, as described in note 8.6.
At 31 December 2010 a notional amount of 400,000 thousand euros regards restricted investments in securities used as
collateral for repurchase agreements entered into by the Company (note 20.3).
Other investments
Other investments regard:
• a fiduciary deposit with a face value of 93,550 thousand euros (107,500 thousand euros at 31 December 2009), established by the 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 2010 is 92,098 thousand euros (91,001 thousand euros at 31 December 2009). At 31
December 2010 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 value of 65 million euros14. Over the year under review the face value of the deposit
has fallen by 13,950 thousand euros as a result of losses, recognised in the income statement, following the bankruptcy of the one of the entities covered by the CDSs;
• units of equity mutual funds with a fair value of 3,830 thousand euros (3,271 thousand euros at 31 December 2009).
14. 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. 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.
278
Changes in derivative assets and liabilities are as follows:
2010
Note
Income/Expenses
of which:
Derivative assets
2009
Cash flow
hedges
-
Fair value
hedges
(2,331)
24,580
Fair value
through
profit or loss
-
-
684
22,933
-
22,933
-
[8.1]
[20.1]
Total
(2,331)
24,580
Cash flow
hedges
(2,265)
4,099
Fair value
hedges
(2,331)
Fair value
through
profit or loss
Total
- (2,265)
- 1,768
-
684
22,933
(1,834)
-
(2,331)
- (1,834)
- (2,331)
-
22,933
-
-
(2,331)
- (2,331)
Fair value hedges
At 31 December 2010 outstanding derivative financial instruments with a positive fair value15 of 22,933 thousand euros
consist of 9 asset swaps used as fair value hedges entered into by the Company during the year under review to protect
the value of BTPs with a notional value of 375 million euros from movements in interest rates. These instruments have
enabled the Company to purchase a floating rate of 2.25% (the weighted average of the interest rates provided for in the
nine contracts) and sell the fixed rate on the BTPs of 3.75%.
During 2010 the Company settled two forward sale agreements relating to the 150,000 class B shares in MasterCard
Incorporated and two forward sale agreements in US dollars executed by the Company in 2009 to hedge the price and foreign
exchange risk exposures of the above shares. At 31 December 2009 these contracts had a fair value of 2,331 thousand euros.
9 - OTHER NON-CURRENT ASSETS
9.1 - Other non-current assets
Item
Long-term portion of trade receivables due
from Public Sector entities
Note
[10.2]
216,583
254,315
Long-term portion of receivables due from staff under
fixed-term contracts settlement of 2006
32,672
43,758
122,569
140,843
33,029
-
Long-term portion of receivables due from IPOST under
fixed-term contracts settlements of 2006-2008
39,266
51,384
Provisions for doubtful debts due from staff
(2,189)
Third-party deposits in Postal Savings Books registered
in the name of Poste Italiane SpA
Total
(2,189)
225,347
233,796
2,957
3,035
3,101
2,954
447,922
494,166
15. The fair value of these derivative instruments is based on the present value of expected cash flows deriving from the differentials to be exchanged.
Trade receivables are described in note 10.
The long-term portion of receivables due from staff under fixed-term contracts settlements consists of salaries and the
relevant contributions 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 2010 these receivables regard the
total residual present value of amounts due from staff and the pension fund, IPOST, totalling 293,416 thousand euros (after
provisions for doubtful debts). Amounts due from staff are recoverable in the form of variable instalments, the last of which
is due in 2030. 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.
9.2 - Receivables from fixed-term contracts settlements
Item
Receivables
due from IPOST(4)
Total
(1)
(2)
(3)
(4)
Non-current
assets
Current
assets
Total
Face
value
Non-current
assets
Current
assets
Total
Face
value
32,672
14,397
47,069
52,203
43,758
16,375
60,133
66,974
122,569
28,477
151,046
178,534
140,843
38,923
179,766
213,159
33,029
39,266
(2,189)
11,352
13,843
-
44,381
53,109
(2,189)
56,515
55,372
51,384
(2,189)
13,843
-
65,227
(2,189)
69,215
225,347
68,069
293,416
233,796
69,141
302,937
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.
The current portion of 68,069 thousand euros is accounted for in Other current receivables and assets (note 11).
10 - TRADE RECEIVABLES
Trade receivables break down as follows:
10.1 - Trade receivables
31 December 2010
Item
Customers
Subsidiaries
Associates
Parents
Total
Non-current
assets
216,583
216,583
Current
assets
2,249,450
249,626
171
1,171,053
3,670,300
31 December 2009
Total
2,466,033
249,626
171
1,171,053
3,886,883
Non-current
assets
254,315
254,315
Current
assets
2,569,988
271,101
153
1,124,197
3,965,439
Total
2,824,303
271,101
153
1,124,197
4,219,754
280
CUSTOMERS
10.2 - Customers
31 December 2010
Non-current
Item
assets
216,583
Other BancoPosta services
Unfranked mail delivered on behalf
of third parties
Total
216,583
Current
assets
889,513
842,556
256,181
184,210
126,992
45,131
149,674
(244,807)
2,249,450
31 December 2009
Total
1,106,096
842,556
256,181
184,210
Non-current
assets
254,315
-
Current
assets
1,020,698
938,601
285,276
232,337
Total
1,275,013
938,601
285,276
232,337
126,992
45,131
149,674
(244,807)
2,466,033
254,315
146,734
45,252
138,094
(237,004)
2,569,988
146,734
45,252
138,094
(237,004)
2,824,303
Ministries and Public Sector Entities
These items primarily regard amounts due from the following entities:
• Cabinet Office - Publishing Department: 568,709 thousand euros due to the Company, corresponding to a face value of
606,125 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 216,583 thousand euros
(corresponding to a face value of 253,999 thousand euros) is classified in Other non-current assets (note 9.1);
• 77,044 thousand euros due from INPS, including 73,265 thousand euros due for the payment of pensions and attributable entirely to 2010;
• 61,114 thousand euros due from the Ministry of Internal Affairs, including 37,948 thousand euros for integrated notification services and 23,166 thousand euros as payment for the franking of mail on credit;
• 60,203 thousand euros due from the Ministry for Economic Development, including 54,445 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 year);
• 44,161 thousand euros due from the Ministry of Justice, primarily for the delivery of administrative notices (22,232 thousand euros) and for the payment service for legal system expenses (19,229 thousand euros);
• 39,814 thousand euros due from the tax authorities, primarily deriving from the postage of unfranked mail (19,890 thousand euros), integrated mail services (9,321 thousand euros), the payment of tax rebates (3,604 thousand euros) and the
collection of tax returns (3,362 thousand euros);
• 24,134 thousand euros due from the Municipality of Rome, primarily in relation to the delivery of administrative notices;
• 23,497 thousand euros due from Lazio Regional Authority, primarily for the delivery of administrative notices;
• 20,582 thousand euros due from the Municipality of Milan, primarily for the delivery of administrative notices.
This item includes 822,000 thousand euros in fees and commissions collected in February 2011 in relation to the management of postal savings accounts in 2010, with the remainder regarding previous years.
Other BancoPosta services
These receivables primarily regard:
• amounts due from current account holders in the form of accrued fees and charges, totalling 143,989 thousand euros;
• amounts due on insurance and banking services, on personal loans, on overdrafts and on mortgages sold on behalf of
third parties, totalling 91,317 thousand euros.
This item includes 183,664 thousand euros regarding postal services carried out for overseas postal operators, and 546
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. As with the pre-existing Hybrid E-mail service, collection of these receivables is delegated to the authorised agents
who provide the service.
These receivables regard telegrams ordered by telephone (34,542 thousand euros) and other telegraphic services (10,589
thousand euros).
Other trade receivables primarily include:
• receivables deriving from unfranked mail on own behalf (50,331 thousand euros);
• receivables deriving from parcel post operations (16,810 thousand euros);
• receivables deriving from the rental of properties for retail and residential use, and of premises housing canteens and
bars (13,693 thousand euros);
• receivables deriving from the distribution of telephone directories (9,706 thousand euros).
Changes in Provisions for doubtful debts are as follows:
10.3 - Changes in Provisions for doubtful debts
Public Sector entities
Private customers
For overdue interest
Total
Balance at
1 Jan 2009
6,646
175,411
67,186
249,243
4,904
254,147
Net
provisions
1,613
(23,558)
1,914
(20,031)
2,861
(17,170)
Deferred
revenues
3,213
970
4,183
4,183
Uses
(1,426)
(701)
(2,127)
(2,029)
(4,156)
Balance at
31 Dec 2009
8,259
153,640
69,369
231,268
5,736
237,004
Net
provisions
1,922
6,609
4,328
12,859
3,542
16,401
Deferred
revenues
Uses
(14)
3,213 (10,398)
570
(240)
3,783 (10,652)
(1,729)
3,783 (12,381)
Balance at
31 Dec 2010
10,167
153,064
74,027
237,258
7,549
244,807
Net provisions (releases of provisions) for doubtful debts are accounted for in the income statement in Other operating
costs (note 30.1), 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 not be recoverable as a result of legislation
restricting public spending, delays in payment and problems at debtor entities.
282
DIRECT AND INDIRECT SUBSIDIARIES
Trade receivables due from subsidiaries are as follows:
10.4 - Receivables due from subsidiaries
Name
Direct subsidiary
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
Poste Voice SpA
Postecom SpA
Postel SpA
PosteMobile SpA
PosteShop SpA
Balance at 31 December 2010 Balance at 31 December 2009
615
5,684
30
649
437
637
3,355
1,293
276
24,123
1,315
183,542
11,082
6,505
5,121
2,665
3,405
30
982
555
783
698
426
2,431
1,223
342
35,377
98
1,812
197,914
11,851
6,491
2,944
4
3
21
1
1,084
259
3,362
183
67
249,626
823
63
166
271,101
Indirect subsidiary
Docutel SpA
Italia Logistica Srl(1)
Kipoint SpA
Poste Assicura SpA
PostelPrint SpA
Uptime SpA(1)
Total
(1)
Joint venture.
Trade receivables include:
• Postel SpA (167,215 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 (18,758 thousand euros), largely regarding fees deriving from the sale of insurance policies through Poste
Italiane SpA’s post offices.
ASSOCIATES
This item amounts to 171 thousand euros and refers to the indirect associate Docugest SpA.
PARENTS
Amounts receivable regard trade receivables due to the Company from the Ministry of the Economy and Finance. The
following table shows a breakdown:
10.5 - Receivables due from parents
Item
Universal Service Obligation
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
Total
854,330
185,217
155,758
36,322
6,026
6,255
(72,855)
1,171,053
841,503
201,778
109,064
36,322
6,026
6,734
(77,230)
1,124,197
Universal Service Obligation subsidies include 364,463 thousand euros representing the amount accruing in 2010, 371,830
thousand euros in amounts accrued in 2009, 32,011 thousand euros in amounts accrued in 2008 and 33,642, 43,721 and
8,663 thousand euros regarding residual amounts accrued in 2007, 2006 and 2005. Following the signature and publication
in the Official Gazette of the addendum to the Contratto di Programma 2006-2008 (the Planning Agreement for the period
2006-2008), entered into by Poste Italiane SpA, the MEF and the Ministry for Economic Development, on 16 July 2010, it
is now possible to collect 352 million euros.
The remuneration of current account deposits refers entirely to amounts accruing in 2010 and almost entirely regards the
deposit of funds deriving from accounts opened by Public Sector entities.
Electoral subsidies include 66,794 thousand euros accruing in 2010, with the remainder attributable to previous years. At
31 December 2010 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 2010, with 7,972 thousand euros
regarding the residual amount due for 2008 and 2007.
Payment due for the distribution of euro coins includes 6,026 thousand euros for the supply and delivery of euro
converters, carried out at the time on behalf of the Cabinet Office. At 31 December 2010 these receivables have not been
budgeted for by the Government.
Other receivables primarily refer to the transport and franking of mail on credit and services linked to the “Social Card”.
10.6 - Change in provisions for doubtful debts due from parents
Balance at
1 Jan 2009
Provisions
Deferred
revenues
Uses
Balance at
31 Dec 2009
Provision
Deferred
revenues
Uses
Balance at
31 Dec 2010
54,019
23,211
-
-
77,230
(4,375)
-
-
72,855
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 have been based on the related financial impact. A portion of these provisions was released to the income statement in
2010 following the collection of amounts previously deemed unlikely to be recovered.
284
11 - OTHER CURRENT RECEIVABLES AND ASSETS
11.1 - Other current receivables and assets
Item
Prepaid taxes
Provisions for doubtful debts due from others
Accrued income and prepaid expenses from trading transactions
Total
253,574
312,703
(125,886)
78
12,817
453,286
232,186
339,860
(130,878)
1,086
3,951
446,205
PREPAID TAXES
These primarily include 249,297 thousand euros in advances that the Company has paid to the tax authorities, including 214,905
thousand euros in stamp duty to be paid in virtual form in 2011, and 34,392 thousand euros as withholding tax on interest paid
to current account holders for 2010.
RECEIVABLES DUE FROM OTHERS
These primarily regard:
• 76,770 thousand euros (92,379 thousand euros at 31 December 2009) payable to BancoPosta by the heirs of INPS and
INPDAP pensioners, following the collection of pension payments after the death of the pensioners concerned;
• 68,069 thousand euros (69,141 thousand euros at 31 December 2009) relating to the current portion of the receivable
described in note 9.2 relating to pay and contributions and due from staff previously employed on fixed-term contracts,
who have been subsequently re-employed after acceptance of the union agreements of 13 January 2006, 10 July 2008
and 27 July 2010;
• 62,003 thousand euros deriving from the recharging of third-party postal current account holders of stamp duty paid in
virtual form in accordance with existing legislation (63,158 thousand euros at 31 December 2009);
• amounts to be recovered by BancoPosta from the holders of postal savings books, totalling 13,816 thousand euros
(14,929 thousand euros at 31 December 2009), due to transactions in the process of being settled;
• 13,079 thousand euros in amounts stolen from the Company in December 2007 as a result of an attempted fraud. This
amount is currently held by an overseas bank and 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 2010;
• 11,231 thousand euros (12,327 thousand euros at 31 December 2009) due from ministries and Public Sector entities in
the form of pay and contributions for personnel seconded to them by Poste Italiane SpA.
PROVISIONS FOR DOUBTUL DEBTS DUE FROM OTHERS
Changes in provisions for doubtful debts are as follows:
11.2 - Changes in provisions for doubtful debts due from others
Sundry receivables attributable
to BancoPosta
Public Sector entities for sundry services
Other
Total
Balance at
1 Jan 2009
Net
provisions
Uses
Balance at
31 Dec 2009
Net
provisions
Uses
Balance at
31 Dec 2010
86,104
13,546
11,217
110,867
21,374
(2,095)
902
20,181
(170)
(170)
107,308
11,451
12,119
130,878
(16,669)
(984)
12,714
(4,939)
(53)
(53)
90,586
10,467
24,833
125,886
Provisions for sundry receivables attributable to BancoPosta regard amounts that the Company is expected to have
difficulty in recovering from private customers for transactions to be settled. 21,577 thousand euros of these provisions
was released to the income statement in 2010 following the collection of amounts previously deemed unlikely to be
recovered and the settlement of other doubtful accounts.
Provisions for amounts due from Public Sector entities regard accrued payments for the Company’s staff seconded to
ministries and Public Sector entities. A portion of these provisions was released to the income statement in 2010, following
the collection of certain items previously deemed unlikely to be recovered.
OTHER AMOUNTS DUE FROM SUBSIDIARIES
11.3 - Other amounts due from subsidiaries
Name
Direct subsidiaries
EGI SpA
Poste Vita SpA
Postecom SpA
PosteMobile SpA
PosteShop SpA
12
19
8
39
1,075
11
Total
78
1,086
12 - ASSETS AND LIABILITIES ATTRIBUTABLE TO BANCOPOSTA
These items refer to the balances of financial transactions carried out by the Company pursuant to Presidential Decree
144/2001. In particular, these transactions regard management of the liquidity deposited in postal current accounts, carried
out under the BancoPosta name, but subject to restrictions on the investment of such liquidity in compliance with the
applicable legislation. The transactions also regard the management of collections and payments in the name and 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, which was renewed by Ministerial Decree on 18 June 2009, was valid
until 31 December 2010 and is in the process of being renewed. This agreement requires BancoPosta to provide daily
286
statements of all cash flows, with a delay of one bank working day with respect to the transaction date.
The liquidity deriving from current account deposits by Public Sector entities must be invested with the MEF and is
remunerated at a floating rate in accordance with the specific agreement with the MEF approved by Ministerial Decree on
7 April 2009, which was valid until 31 December 2010 and is in the process of being renewed. This agreement applies the
European Commission’s Decision of 16 July 2008.
In compliance with the 2007 Budget Law, with effect from 2007 the Company is required to invest the funds raised from
deposits paid into postal current accounts by private customers in euro area government securities.
The above agreement with the MEF for treasury services, which was renewed on 18 June 2009, has confirmed that a
limited portion of the funds deriving from deposits paid into postal current accounts by private customers may be invested
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 rate equal to the average yield on Short-term Italian Treasury Certificates (BOT) in the
relevant six-month period.
ASSETS ATTRIBUTABLE TO BANCOPOSTA
These assets are shown less Poste Italiane SpA’s liquidity (note 12.7) and include:
12.1 - Assets attributable to BancoPosta
Item
Other receivables
Cash
29,303,781
88,205
7,014,078
1,188,592
551,553
2,351,245
28,458,973
40,969
8,320,632
839,808
706,910
2,660,696
Total assets attributable to BancoPosta
40,497,454
41,027,988
(840,624)
(1,515,829)
39,656,830
39,512,159
Poste Italiane SpA’s own liquidity held in postal current accounts
Total
This item regards investments in fixed income euro area government securities with a face value of 29,027,000 thousand
euros, including 28,936,000 thousand euros invested in Italian government bonds and 91,000 thousand euros invested in
BTAN (Bon du Trésor à Taux Fixe et à Intéret Annuel) issued by the French government.
Investments break down as follows:
12.2 - Investments in securities
Maturing
within
12 months
1,320,679
1,322,486
104,021
between
2 and 5 years
5,423,361
5,777,388
-
over
5 years
6,543,072
7,967,966
-
Total
13,287,112
15,067,840
104,021
Face
value
13,114,650
14,092,700
100,000
2,747,186
11,200,749
14,511,038
28,458,973
27,307,350
1,593,460
764,258
-
5,024,525
2,183,221
-
8,150,228
11,588,089
-
14,768,213
14,535,568
-
14,509,650
14,517,350
-
2,357,718
7,207,746
19,738,317
29,303,781
29,027,000
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 by a leading market player. An Asset & Liability Management system has been created to manage the match
between customer deposits and investments. During the year under review, based on experience over the last three years,
the Company updated the replication model for deposits and began the process of bringing investment portfolio maturities
into line with the new model.
Changes in investments in securities in 2009 and 2010 are as follows:
12.3 - Changes in investments in securities
HTM
AFS
FVPL
Total
Face
Carrying
Securities
value
amount
Balance at 31 December 2008 12,519,800 12,625,993
Purchases
3,220,850 3,281,112
Sales
(1,326,000) (1,367,855)
Redemptions
(1,300,000) (1,300,000)
32,211
Increase/(Decrease)
in accrued income
11,760
3,891
Changes in fair value
through PL
through Equity
-
Face
value
12,630,200
4,208,750
(1,835,000)
(911,250)
-
Fair
value
12,993,663
4,299,497
(1,883,985)
(911,250)
(15,778)
-
(717)
34,430
-
-
-
-
551,980
Balance at 31 December 2009 13,114,650 13,287,112
Purchases
2,695,000 2,814,133
Sales
(150,000)
(154,059)
Redemptions
(1,150,000) (1,150,000)
(17,857)
Increase/(Decrease)
in accrued income
(5,029)
(6,087)
through PL
through Equity
-
14,092,700
6,967,000
(5,707,350)
(835,000)
-
15,067,840
7,196,615
(5,814,550)
(835,000)
(227,728)
-
17,645
9,912
-
-
(24,694)
-
-
(854,472)
-
-
-
(854,472)
14,517,350
14,535,568
-
-
29,027,000
29,303,781
14,509,650 14,768,213
Face
Fair
value
value
1,150,000 1,145,600
2,923,750 2,928,565
(3,773,750) (3,770,351)
(200,000) (200,000)
-
Face
value
26,300,000
10,353,350
(6,934,750)
(2,411,250)
-
Carrying
amount
26,765,256
10,509,174
(7,022,191)
(2,411,250)
16,433
325
-
-
11,368
38,321
-
(118)
-
(118)
-
-
-
551,980
100,000
104,021
1,911,000 1,921,109
(2,011,000) (2,025,807)
-
27,307,350
11,573,000
(7,868,350)
(1,985,000)
-
28,458,973
11,931,857
(7,994,416)
(1,985,000)
(245,585)
677
-
-
13,293
3,825
-
-
(24,694)
288
At 31 December 2010 the fair value of the held-to-maturity portfolio, accounted for at amortised cost, is 14,774,542
thousand euros (including 227,567 thousand euros in accrued daily interest payments).
The fair value of the available-for-sale portfolio is 14,535,568 thousand euros (including 215,080 thousand euros in accrued
daily interest payments). A notional amount of 400,000 thousand euros regards restricted investments in securities used
as collateral for repurchase agreements (note 12.7). The overall fair value loss of 879,166 thousand euros for the year is
recognised in the relevant Equity reserve, consisting of a loss of 854,472 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 24,694 thousand euros
relating to the hedged portion. The deterioration reported reflects the downgrade of the Italian Government’s credit rating.
The following changes in securities held for trading at fair value through profit or loss took place during the year. These
transactions were executed with the primary aim of investing temporary spikes in deposits. In particular:
• spot purchases with a face value of 1,820,000 thousand euros were settled;
• sales of securities with a face value of 1,920,000 thousand euros were settled, including 1,270,000 thousand euros in
spot transactions, 100,000 thousand euros in forward transactions executed in 2009, and 550,000 thousand euros in forward transactions executed in 2010;
• the notional value of forward purchases of securities with a face value of 91,000 thousand euros has been recognised;
these were subsequently sold on the same terms in response to changed market conditions, in the belief that it was
appropriate to proceed with their substitution.
Changes in derivative financial instruments during the year are as follows:
12.4 - Changes in derivative financial instruments
Cash flow hedges
Forward purchases
notional
Fair value hedges
Asset swaps
Asset swaps
fair value
notional
fair value
notional
FVPL
Forward purchases
fair value
notional
Forward sales
Total
fair value
notional
fair value
notional
fair value
52,447
958,750
50,570
1,674,950
3,957
-
-
-
-
1,450,000
(2,080)
4,083,700
Discontinued CFHs
(958,750)
(50,570)
-
-
-
-
958,750
50,570
-
-
-
-
2,802,850
49,854
2,458,750
(50,431)
-
-
-
9,316
2,273,750
(27,826)
7,535,350
(19,087)
profit or loss(**)
-
7,520
-
(16,776)
-
-
-
-
-
-
-
(9,256)
Transactions settled(***)
(2,224,850)
(16,405)
(1,515,000)
(29,825)
-
-
(958,750)
(59,886)
(3,623,750)
29,899
(8,322,350)
(76,217)
(52,113)
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
profit or loss(**)
-
-
-
-
-
(24)
-
-
-
-
-
(24)
Transactions settled (***)
(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)
including:
Derivative assets
100,000
225
400,000
25,956
1,100,000
62,024
-
-
-
-
1,600,000
88,205
620,000
(13,925)
1,673,750
(33,296)
1,850,000
(43,280)
-
-
-
-
4,143,750
(90,501)
(*)
Increases /(Decreases) refer to the notional value of new transactions and changes in the fair value of the overall portfolio during the period.
(**)
Gains and losses through profit or loss refer to any ineffective components of hedges, recognised in Other income and Other expenses from financial activities.
(***)
Transactions settled include forward transactions settled, accrued differentials and the extinguishment of asset swaps linked to securities sold.
During year under review the Company carried out the following transactions in relation to cash flow hedges:
• the extinguishment of forward purchases outstanding at 31 December 2009 with a notional value of 91,000 thousand
euros, and resulting from discontinued16 cash flow hedges, with reclassification of the hedges to derivative financial
instruments at fair value through profit and loss (note 12.3);
• the settlement of outstanding forward purchases at 31 December 2009 with a notional value of 487,000 thousand euros;
• the execution of new forward purchase agreements with a notional value of 1,820,000 thousand euros (so-called cash
flow hedges of forecast transactions), including 1,100,000 thousand euros already settled at 31 December 2010;
• the execution of asset swaps on securities purchased during the period and with a notional value 450,000 thousand
euros, and the extinction of asset swaps on securities sold, which were already protected by cash flow hedges, with a
notional value of 994,950 thousand euros; as a result of these transactions, at 31 December 2010 the Company reports
outstanding assets swaps with a total notional value of 2,073,750 thousand euros, with which it has purchased a fixed
rate of 5.19% (the weighted average of the rates provided for in the contracts) and sold a floating rate on BTPs (Italian
Long-term Treasury Certificates) indexed to inflation (BTP € i ).
These instruments recorded an overall fair value gain of 86,061 thousand euros during the year, which is reflected in the
Cash flow hedge reserve.
During 2010 the Company 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 interest rate swaps with a total notional value of 2,950,000 thousand euros, including
500,000 thousand euros to be activated immediately, 450,000 thousand euros to be activated in 2015, 500,000 thousand
euros to be activated in 2016 and 1,500,000 thousand euros to be activated in 2020. 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, these instruments have undergone an overall net fair value gain of 15,904 thousand euros, whilst the hedged
securities (note 12.3) have recorded a fair value loss of 24,694 thousand euros. The difference of 8,790 thousand euros is
due to paid or maturing differentials.
Finally, with regard to derivative financial instruments measured at fair value through profit or loss, in addition to the above
discontinued hedges, carried out via forward sales, forward sales with a total notional value of 641,000 thousand euros
were settled during the year (including 100,000 thousand euros outstanding at 31 December 2009). These instruments
regard the investment of temporary spikes in deposits.
This item includes liquidity, amounting to 6,173,454 thousand euros (6,804,803 thousand euros at 31 December 2009),
deriving from the postal current account deposits of Public Sector entities transferred to the parent under the restriction
established by the Regent’s Decree of 22 November 1945. It also includes 840,624 thousand euros (1,515,829 thousand
euros at 31 December 2009) in deposits (the so-called Buffer Account) provided for in the above change to the Agreement
with the MEF approved by the Ministerial Decree of 14 December 2007.
16. Cessation 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.
290
12.5 - Amounts receivable from/(payable to) the Italian Treasury
Item
Amounts receivable from the Italian Treasury
MEF postal current accounts and other payables
Subtotal
Ministry of Justice
Total
1,186,508
(679,417)
507,091
882,544
(729,443)
153,101
16
681,485
29
686,678
1,188,592
839,808
The net balance of amounts payable to and receivable from the Italian Treasury is represented by advances from the MEF
to meet the cash requirements of post offices, less transfers of deposits and any excess liquidity by the Company. At 31
December 2010 this item was in credit.
Other receivables
Other receivables primarily relate to bank and postal cheques and bankers’ drafts (286,189 thousand euros), and amounts
due from customers in the form of withdrawals from ATMs yet to be registered on their accounts (94,291 thousand euros).
Cash attributable to BancoPosta
12.6 - Cash
Item
Cash in hand
Cheques
Bank deposits
Total
2,314,930
50
36,265
2,351,245
2,627,251
124
33,321
2,660,696
Cash essentially regards cash in hand held at post offices and by companies that provide cash transportation services
whilst awaiting transfer to the Italian Treasury.
LIABILITIES ATTRIBUTABLE TO BANCOPOSTA
Liabilities attributable to BancoPosta are accounted for after deducting the Poste Italiane SpA’s liquidity held in postal
current accounts in the name of the Company. These liabilities break down as follows:
12.7 - Liabilities attributable to BancoPosta
Item
Other payables
Note
39,488,005
389,212
73,403
90,501
287,484
39,473,727
70,766
93,082
290,904
Total liabilities attributable to BancoPosta
(Amounts payable to Poste Italiane SpA as a current account holder)
40,328,605
(2,251,441)
39,928,479
(2,118,383)
Total
38,077,164
37,810,096
[12.4]
These payables regard amounts due to Poste Italiane Group companies, totalling 255,778 thousand euros (96,882 thousand
euros at 31 December 2009). This includes 170,579 thousand euros deposited in postal current accounts by Poste Vita SpA
(23,880 thousand euros at 31 December 2009). The balance includes a payable of 200,000 thousand euros relating to a
time deposit made by a private customer and maturing by the end of 2011.
In 2010 the Company executed twenty-six repurchase agreements with prime financial counterparties. These transactions,
amounting to 2,432,161 thousand euros, were entered into to optimise investments with respect to short-term
movements in deposits. At 31 December 2010 five contracts with a total value of 389,212 thousand euros remain
outstanding. They are due to mature by the end of January 2011.
This item represents the balance of deposits less withdrawals during the last day of 2010 and cleared on the first day of
the subsequent year. The balance at 31 December 2010 consists of 109,428 thousand euros payable to Cassa Depositi e
Prestiti (86,936 thousand euros at 31 December 2009) and a receivable due from the MEF for issues falling within its
competence, totalling 36,025 thousand euros (16,170 thousand euros at 31 December 2009).
Other payables
Other payables primarily regard 178,982 thousand euros in cheques presented for payment into postal savings books
(215,104 thousand euros al 31 December 2009).
Amounts payable to Poste Italiane SpA as a current account holder
At 31 December 2010 Poste Italiane SpA’s liquidity held in postal current accounts to be deducted from BancoPosta’s
liabilities amounts to 2,251,441 thousand euros. This amount is normally represented by demand deposits with the MEF
292
held in the so-called Buffer Account, totalling 840,624 thousand euros (note 12.1), and investments in securities, totalling
1,410,817 thousand euros, deriving from deposits in the form of financial instruments not subject to investment
restrictions (note 20.6).
13 - CASH AND CASH EQUIVALENTS
13.1 - Cash and cash equivalents
Item
Bank and postal deposits
Cash in hand
Postal deposits invested in Assets attributable to BancoPosta
Total
2,307,114
2,189,542
11,683
11,576
2,318,797
(1,410,817)
907,980
2,201,118
(602,554)
1,598,564
Cash belonging to the Company is primarily deposited in postal current accounts. The Company’s deposits earn returns
based on the yield on short-term deposits with the MEF held in the so-called Buffer Account (note 12). Remuneration of
these cash deposits is shown separately in Finance income (note 31.1), as opposed to revenue deriving from the
investment of deposits from third parties (note 23.4).
Bank and postal deposits include 26,647 thousand euros that has been frozen as a result of court orders relating to a
number of legal actions of various nature.
Postal deposits invested in Assets attributable to BancoPosta reflect the fact that, in compliance with the provisions of the
2007 Budget Law, funds deriving from deposits paid into postal current accounts by private customers, and therefore also
the Company’s liquidity held in postal current accounts (note 12.7), are invested in euro area government securities, which
are accounted for in Assets attributable to BancoPosta (note 12.1).
14 - NON-CURRENT ASSETS HELD FOR SALE
14.1 - Non-current assets held for sale
2010
2009
Cost
Impairments
2,687
(937)
(465)
6,749
(2,118)
(1,159)
Carrying amount
1,285
3,472
5,415
(3,736)
-
492
(2,679)
-
1,679
(2,187)
6,060
(2,631)
(465)
2,687
(937)
(465)
2,964
1,285
9,306
(3,891)
-
1,681
(724)
(465)
5,415
492
Disposals
Cost
(5,933)
2,197
-
(5,743)
1,905
1,159
Total
(3,736)
(2,679)
Reclassifications of non-current assets(1)
Disposals(2)
Reclassification from provisions for other liabilities and charges
Total changes
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 16 million euros. Recognition of this item has not resulted in charges recognised
in the income statement.
294
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.
In compliance with the Decree issued by the Ministry of the Economy and Finance on 30 November 2010, published in
Official Gazette 293 of 16 December 2010, on 21 December 2010 the transfer of 457,138,500 Poste Italiane SpA ordinary
shares, representing 35% of the Company’s share capital, from Cassa Depositi e Prestiti to the MEF was completed.
At 31 December 2010 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
As approved by the General Meeting of shareholders held on 15 June 2010, in July and August 2010 the Company paid
dividends totalling 500,000 thousand euros (based on a dividend per share of 0.38 euros).
17 - RESERVES
Reserves break down as follows:
17.1 - Reserves
Legal
reserve
Fair value
reserve
Cash flow
hedge
reserve
Total
Appropriation to retained earnings
112,311
36,040
263,468
569,547
(181,144)
(31,745)
10,088
366,746
-
(117,363)
3,522
(837)
(6,204)
1,904
(1,615)
-
258,416
573,069
(181,981)
(37,949)
11,992
365,131
36,040
148,351
630,214
(118,978)
659,587
38,640
(860,640)
274,394
(348,048)
110,277
(824,017)
-
86,061
(27,445)
33,376
(10,632)
81,360
-
(774,579)
246,949
(314,672)
99,645
(742,657)
38,640
186,991
(193,803)
(37,618)
(44,430)
Appropriation to retained earnings
The Fair value reserve regards changes in the fair value of Available-for-sale financial assets. During 2010 fair value losses
totalling 860,640 thousand euros included:
• 854,472 thousand euros relating to the net fair value loss on BancoPosta’s investments in securities described in note 12.3;
• 6,168 thousand euros regarding the net fair value loss on the available-for-sale financial assets described in note 8.5.
The Cash flow hedge reserve reflects changes in the fair value of the effective portion of cash flow hedges outstanding.
During 2010 net fair value gains of 86,061 thousand euros reflected the value of derivative financial instruments described
in note 12.4.
18 - PROVISIONS FOR LIABILITIES AND CHARGES
Changes in provisions are as follows:
Balance at
Item
31 Dec 2008
88,215
252,947
624,349
19,448
security contributions
11,033
Other provisions
74,425
1,070,417
Provisions for tax consolidation liabilities
6,346
Total
1,076,763
257,920
- current portion
818,843
1,076,763
(1)
(2)
Provisions
25,058
34,067
251,501
115,000
Finance
costs
1,176
-
Released to
income
statement
(6,090)
(30,134)
(26,692)
-
Uses
(10,631)
(97,282)
(209,011)
-
Balance at
31 Dec 2009
96,552
160,774
640,147
115,000
-
571
-
(555)
19,464
885
55,451
481,962
5,578(2)
487,540
1,747
1,747
(3,157)
(66,073)
(66,073)
(1,030)
(549)
(319,058)
(319,058)
10,888
126,170
1,168,995
11,924
1,180,919
These provisions are offset by a reduction in current tax liabilities.
286,437
894,482
1,180,919
296
Balance at
Item
31 Dec 2009
96,552
160,774
640,147
Provisions for staff costs
115,000
19,464
security contributions
10,888
Other provisions
126,170
1,168,995
Provisions for tax consolidation liabilities
Total
- current portion
(1)
(2)
11,924
1,180,919
Provisions
44,164
100,486
74,045
165,345
58,706
Finance
costs
517
-
Released
to income
statement
(3,563)
(21,999)
-
Uses
(10,243)
(8,739)
(245,131)
(115,000)
-
Balance at
31 Dec 2010
126,910
231,039
469,061
165,345
58,706
-
518
-
(403)
19,579
22,903
-
(4)
(3,101)
(43,774)
7,787
105,295
465,649
1,035
(25,566)
(426,391)
1,183,722
(2)
-
-
-
14,853
468,578
1,035
(25,566)
(426,391)
1,198,575
2,929
286,437
894,482
1,180,919
365,966
832,609
1,198,575
These provisions are offset by a reduction in current tax liabilities.
Provisions for non-recurring charges regard operating risks connected with BancoPosta’s operations, such as liabilities
deriving from the reconstruction of operating ledger entries at the time of the Company’s establishment, fraud,
adjustments and revisions of income for previous years, etc. Provisions for the period amount to 44,164 thousand euros
and primarily regard estimated revisions of fees received for the distribution of financial products. The size of these fees
depends on the behaviour of subscribers. Uses of 10,243 thousand euros refer to liabilities identified or settled during the
year. The amount released to the income statement, totalling 3,563 thousand euros, is due to the reversal of liabilities
identified in the past. The 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 100,486 thousand euros reflect the estimated value of new liabilities
measured on the basis of expected outcomes. A reduction of 21,999 thousand euros relates to the non-occurrence of
liabilities identified in the past, whilst a reduction of 8,739 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 74,045 thousand euros regard an
updated estimate of the 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 compensation payable to an employee in the event of “court-imposed
conversion” of a fixed-term contract. Uses, amounting to 245,131 thousand euros, include amounts used to cover the cost
of settling disputes, including 6,346 thousand euros in the form of asset seizures by creditors. Provisions are based on the
present value of identified liabilities, which are believed to be short term.
Provisions for staff costs refer to best estimates of liabilities relating to staff costs for the year under review, which are
expected to be determined during 2011.
Provisions for restructuring charges made in 2009, which regarded the estimated liabilities to be incurred by the Company
in the form of redundancy payments for at least three thousand staff, have been used in full.
Provisions to the Solidarity Fund have been established following the agreement of 27 July 2010 between Poste Italiane SpA
and the labour unions. The provisions have been made within the scope of the Fondo di Solidarietà (the Solidarity Fund
established by Ministerial Decree 178/2005) to provide income support for qualifying employees who decide to take early
retirement. At 31 December 2010 the provisions correspond to the present value of estimated liabilities amounting to a face
value of 62,898 thousand euros. These provisions are expected to be used progressively through to the first half of 2015.
Provisions for invalidated postal savings certificates have been made to cover the cost of redeeming invalidated certificates
relating to specific issues. The provisions represent amounts recognised in revenue in the income statements of the
Company 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 invalidated. At 31 December 2010 the provisions represent the present value
of total liabilities, based on a face value of 22,470 thousand euros, which are expected to be progressively paid off by 2023.
The Company redeemed certificates with a total face value of 403 thousand euros in 2010, and made provisions for finance
costs totalling 518 thousand euros.
Provisions for taxation/social security contributions have been made to cover potential future tax liabilities. The provisions
decreased by 3,101 thousand euros following the settlement of a number of payables.
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 Poste Italiane SpA; and claims for payment
of accrued interest expense due to certain suppliers. Provisions for the year of 22,903 thousand euros primarily refer to
the first type of liability. Uses of these provisions, totalling 43,774 thousand euros, are largely due to a deterioration in
certain indicators used as the basis for the long-term business plans on which impairment testing of the Company’s
investments is based, for which provisions were made in 2009 (note 7).
Provisions for tax consolidation liabilities 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 period transferred by such companies.
In accordance with the Group’s rules for consolidation, this amount may be attributed to these companies, should there be
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 2,929 thousand euros made during 2010 almost entirely reflect the tax losses
transferred to the Group by the subsidiaries SDA Express Courier SpA and Mistral Air Srl.
298
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 2010 and 2009:
19.1 - Changes in staff termination benefits
2010
interest component
effect of actuarial gains/(losses)
Provisions for the year
Uses for the year
Reductions due to fixed-term contracts settlement of 2010
2009
1,419,161
60,215
(68,866)
1,486,766
68,497
(49,849)
(8,651)
(110,223)
(2,506)
1,297,781
18,648
(80,532)
(5,721)
1,419,161
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 2010 net uses of provisions for staff termination benefits amounted to 110,223 thousand euros, represented by benefits
paid, totalling 112,648 thousand euros, substitute tax of 4,914 thousand euros and transfers to a number of Group companies,
amounting to 897 thousand euros, net of additions of 8,236 thousand euros regarding the transfer 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 turnover17 (summary data)
2010
2009
4.55%
1.08%
4.00%
0.49%
Based on experience obtained since the date of transition to IAS/IFRS, a number of actuarial assumptions have been revisited,
including annual staff turnover. This revision has not, however, resulted in significant changes to the liability in question.
17. Frequency of early termination of employment due to resignations and dismissals.
20 - FINANCIAL LIABILITIES
20.1 - Financial liabilities
31 December 2010
Non-current
liabilities
1,371,908
750,785
371,123
250,000
-
Current
liabilities
887,905
19,363
141,544
687,994
39,004
-
Financial liabilities due to subsidiaries
Item
Borrowings
Bonds
Bank borrowings
Other borrowings
Total
31 December 2009
Total
2,259,813
770,148
512,667
937,994
39,004
Non-current
liabilities
1,552,975
751,304
512,667
250,000
39,004
Current
liabilities
223,934
19,375
166,850
747
36,962
Total
1,776,909
770,679
679,517
250,747
75,966
-
-
-
2,331
2,331
-
231,518
231,518
-
325,418
325,418
283,169
156,801
126,368
2,007,623
3,698
2,003,925
2,290,792
160,499
2,130,293
270,535
156,801
113,734
2,062,284
7,803
2,054,481
2,332,819
164,604
2,168,215
1,655,077
3,127,046
4,782,123
1,823,510
2,613,967
4,437,477
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 clauses18.
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 current
portion of the loan represents accrued interest expense. The fair value (“mid price”) of the bonds at 31 December 2010 is
780,953 thousand euros (780,825 thousand euros at 31 December 2009).
18. 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.
300
This item refers to fixed rate loans issued by Cassa Depositi e Prestiti. The laws authorising the expenditure financed by
the loans also establish the methods of repayment, as shown in the following table.
20.2 - Loans from Cassa Depositi e Prestiti
Legislation
Law 15/74
Law 34/74
Law 227/75 serv. acc.(1)
Law 39/82 subsequent changes to PO services(1)
Law 887/84(1)
Law 41/86(1)
Loans to be repaid
in full by
Poste Italiane
6,756
138
-
Loans with principal
to be repaid by
parent
17,706
283,028
1,661
Loans with principal and
interest to be repaid by
parent (2)
203,378
-
Total
loans
6,756
138
17,706
283,028
203,378
1,661
6,894
302,395
203,378
512,667
Total
(1)
(2)
Loans to be repaid by the Ministry of the Economy and Finance (principal: 505,773 thousand euros).
From 2001 interest was no longer paid by the Government but by Poste Italiane SpA. From 2006 interest has been paid to the Company.
The fair value of the loans is 524,854 thousand euros (711,212 thousand euros at 31 December 2009).
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 8.3).
Bank borrowings
20.3 - Bank borrowings
31 December 2010
Non-current
liabilities
Current
liabilities
Floating rate loan from DEPFA
Bank maturing 30 Sept 2013
Short-term borrowings
Current account overdrafts
Accrued interest expense
250,000
-
Total
250,000
Item
31 December 2009
Total
Non-current
liabilities
Current
liabilities
Total
386,482
300,000
37
1,475
250,000
386,482
300,000
37
1,475
250,000
-
747
250,000
747
687,994
937,994
250,000
747
250,747
The value of the above financial liabilities approximates to fair value.
Outstanding repurchase agreements regard fixed income instruments with a notional value of 400,000 thousand euros
(note 8.4) 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 1,270,700 thousand euros,
amount to 300,037 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 fair value of these
borrowings is 40,605 thousand euros (80,291 thousand euros at 31 December 2009).
The change in this item during 2010 is described in note 8.6.
FINANCIAL LIABILITIES DUE TO SUBSIDIARIES
These liabilities regard intercompany current accounts paying interest at market rates. The following table shows a breakdown:
20.4 - Financial liabilities due to subsidiaries
Name
Direct subsidiaries
CLP ScpA
EGI SpA
Poste Energia SpA
Poste Link Scrl
Poste Tributi ScpA
Poste Tutela SpA
Poste Vita SpA
Postecom SpA
PosteMobile SpA
PosteShop SpA
Total
Intercompany
Borrowings
accounts
Total
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
Intercompany
Borrowings
accounts
Total
-
18,010
61
160,856
4,120
2,244
2
1,351
17,769
100,058
15,219
5,077
651
325,418
18,010
61
160,856
4,120
2,244
2
1,351
17,769
100,058
15,219
5,077
651
325,418
302
OTHER FINANCIAL LIABILITIES
The Company is liable to the Italian Treasury for losses resulting from robberies and fraud. The loss of cash resulting from
these criminal acts has to be made up for, in order to ensure that post offices can carry out their daily operations. This is
done via withdrawals from the Treasury. Changes in this liability are as follows:
20.5 - Changes in amounts deriving from liability for robberies
Liabilities deriving from robberies during the period
Repayments made
Note
2010
2009
[30.1]
164,604
6,748
(10,853)
167,382
9,964
(12,742)
160,499
164.604
During 2010 the Company made repayments of 5,977 thousand euros to the Treasury for robberies that took place up to
31 December 2009 and of 4,876 thousand euros for robberies during the first half of 2010.
Sundry financial liabilities are generated by BancoPosta activities not subject to the investment restrictions described in
note 12. For this reason, they are not included in Liabilities attributable to BancoPosta (note 12.7). These liabilities break
down as follows:
20.6 - Sundry financial liabilities
31 December 2010
Italian Treasury for operational risk
Amounts due on bills paid
Amounts due on prepaid cards
National and international money transfers
Endorsed checks
Tax collection
Other
Total
Non-current
liabilities
125,456
912
126,368
Current
liabilities
630,819
629,683
381,106
179,688
137,680
44,949
31 December 2009
Total
125,456
630,819
629,683
381,106
179,688
137,680
45,861
Non-current
liabilities
113,630
104
Current
liabilities
890,768
523,565
393,740
148,052
91,295
7,061
Total
113,630
890,768
523,565
393,740
148,052
91,295
7,165
2,003,925 2,130,293
113,734
2,054,481
2,168,215
Amounts due to the Italian Treasury for operational risks refer to advances obtained as a result of BancoPosta’s operations
and which subsequently gave rise to liabilities that are either certain or likely to be incurred. Changes in these liabilities
are as follows:
20.7 - Changes in amounts due to the Italian Treasury for operational risks
Note
2010
2009
113,630
New liabilities for operational risks
Operational risks that did not occur
108,971
11,138
(1,727)
[30.1]
10,762
(9,596)
9,411
(82)
2,497
125,456
Repayments made
Uses of provisions for disputes
1,166
(27)
3,520
113,630
Amounts due on bills paid regard sums collected on payment of bills and yet to be allocated to the accounts of
beneficiaries. Amounts due on prepaid cards represent amounts due to Postepay and Pensione card customers who have
topped up their prepaid cards. Amounts due on national and international money transfers represent the exposure to
customers for money orders and transfers, to Moneygram for customer transactions in process and amounts due to
overseas postal operators for international money orders. Endorsed checks represent the exposure to customers for
endorsed checks in circulation. Tax collection payables represent the amount due to tax collection agents and the tax
authorities for payments of tax effected by customers.
Other financial liabilities primarily regard 39,720 thousand euros in guarantee deposits received by the Company from
counterparties with whom Poste Italiane SpA has executed asset swap transactions (with collateral provided by a specific
Credit Support Annex) as part of its cash flow and fair value hedging policies (notes 8.6 and 12.4).
Analysis of net debt/(funds)
The Company’s net debt or net funds at 31 December 2010 and 31 December 2009 are as follows:
20.8 - Net debt/(funds)
Item
Note
Bonds
Bank borrowings
Other borrowings
Other
[20.1]
Financial assets
Net debt/(funds)
Balance at
31 December 2010
of which
related party
Balance at
transactions 31 December 2009
of which
related party
transactions
4,782,123
770,148
512,667
937,994
39,004
2,522,310
512,667
231,518
4,437,477
770,679
679,517
250,747
75,966
2,660,568
679,517
325,418
[12.7]
38,077,164
340,707
37,810,096
172,232
[8.1]
(2,219,650)
(1,598,532)
(598,185)
(22,933)
(39,656,830)
(1,492,880)
(100,825)
(6,173,454)
(1,608,555)
(1,347,053)
(261,502)
(39,512,159)
(1,278,680)
(101,143)
(6,804,803)
[12.1]
[13.1]
982,807
(907,980)
74,827
-
1,126,859
(1,598,564)
(471,705)
-
304
21 - TRADE PAYABLES
21.1 - Trade payables
Item
Amounts due to suppliers
Amounts due to subsidiaries
Prepayments and advances from customers
Interest payable to customers
1,028,834
310,919
186,922
66,665
1,113,077
234,886
208,269
95,865
Total
1,593,340
1,652,097
901,889
5,233
121,712
956,190
9,440
147,447
1,028,834
1,113,077
AMOUNTS DUE TO SUPPLIERS
21.2 - Amounts due to suppliers
Item
Italian suppliers
Overseas suppliers
Overseas correspondents(1)
Total
(1)
The amount due to overseas correspondents regard fees payable to overseas postal operators and companies in return for postal and telegraphic
services provided.
AMOUNTS DUE TO SUBSIDIARIES
21.3 - Amounts due to subsidiaries
Name
Direct subsidiaries
CLP ScpA
Consorzio per i Servizi di Telefonia Mobile ScpA
EGI SpA
Mistral Air Srl
Poste Energia SpA
Poste Tributi ScpA
Poste Tutela SpA
Poste Vita SpA
Postecom SpA
Postel SpA
PosteMobile SpA
PosteShop SpA
97
52,851
5,427
871
106
18,561
1,127
33,643
137
57,479
5,176
336
1,168
34,092
70,902
1,983
1,450
106
23,350
10,197
1,164
25,813
83
28,878
1,030
123
270
11,440
Indirect subsidiaries
Poste Assicura SpA
PostelPrint SpA
Kipoint SpA
99,593
219
36
503
57,397
197
-
310,919
234,886
Total
(1)
Joint venture.
PREPAYMENTS AND ADVANCES FROM CUSTOMERS
This item refers to amounts received from customers as prepayment for the following services to be rendered:
21.4 - Prepayments and advances from customers
Item
Prepayments from overseas correspondents
Mechanised franking
Unfranked mail
Other services
Total
76,650
63,701
23,782
10,025
12,764
103,178
67,141
18,035
10,842
9,073
186,922
208,269
306
INTEREST PAYABLE TO CUSTOMERS
This refers to interest accrued on postal current accounts during the year, less the related withholding tax.
Accrued interest payable to subsidiaries at 31 December 2010 amounts to 362 thousand euros (4,132 thousand euros at 31
December 2009).
22 - OTHER LIABILITIES
22.1 - Other liabilities
31 December 2010
Item
Amounts due to staff
Amounts due to social security agencies
Non-current
liabilities
Current
liabilities
-
31 December 2009
Total
Non-current
liabilities
Current
liabilities
Total
833,963
833,963
-
813,547
813,547
54,136
409,816
463,952
59,462
468,555
528,017
Other tax liabilities
-
123,404
123,404
-
146,606
146,606
Amounts due to the parent
-
12,140
12,140
-
12,140
12,140
Other amounts due to subsidiaries
-
15,422
15,422
-
11,380
11,380
Sundry payables
9,780
118,220
128,000
7,156
138,541
145,697
Accrued expenses and deferred
income from trading transactions
6,236
23,119
29,355
6,301
24,807
31,108
70,152
1,536,084
1,606,236
72,919
1,615,576
1,688,495
Total
AMOUNTS DUE TO STAFF
These items primarily regard accrued amounts that have yet to be paid at 31 December 2010. The following table shows
a breakdown:
22.2 - Amounts due to staff
Item
Incentives and productivity bonuses
384,739
356,386
Fourteenth month salaries
233,072
241,764
72,654
85,385
Other amounts due to staff
143,498
130,012
Total
833,963
813,547
Accrued vacation pay
AMOUNTS DUE TO SOCIAL SECURITY AGENCIES
22.3 - Amounts due to social security agencies
31 December 2010
31 December 2009
Non-current
liabilities
Current
liabilities
Total
IPOST
-
283,732
INPS
-
35,881
INAIL
54,136
Pension fund
-
Amounts due to the Solidarity Fund
-
Other agencies
54,136
409,816
Item
Total
Non-current
liabilities
Current
liabilities
Total
283,732
-
324,192
324,192
35,881
-
40,061
40,061
2,531
56,667
56,667
2,470
59,137
69,200
69,200
-
69,579
69,579
3,573
3,573
2,795
18,087
20,882
14,899
14,899
-
14,166
14,166
463,952
59,462
468,555
528,017
Amounts due to IPOST regard pension and social security contributions due to the institute on behalf of the Company’s
employees, calculated on both the salaries paid as of 31 December 2010 and accrued amounts due, as reported in the item
Amounts due 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 2010 (note 19).
Amounts due to INAIL regard charges for injury compensation paid to employees of the 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 employees to join a supplementary fund.
Amounts due from the Company to the Solidarity Fund (set up by Ministerial Decree 178 of 1 July 2005) regard amounts
designed to cover redundancy payments and income support for employees who, having qualified for participation, decide to
take voluntary early retirement. This liability was reduced by 19,842 thousand euros during the year as a result of contributions
paid and redundancy payments effected. It was increased by 2,533 thousand euros, including 2,321 thousand euros following
an updated estimate of the liability made necessary by regulations that have increased “retirement windows” and 212
thousand euros for accrued finance costs on the discounted residual amount payable at 31 December 2009.
OTHER TAX LIABILITIES
22.4 - Other tax liabilities
Item
Withholding tax on employees’ and consultants’ salaries
Withholding tax on postal current accounts
Substitute tax
Stamp duty
Other taxes due
Total
86,741
23,365
2,056
4,756
6,486
95,853
34,391
654
9,247
6,461
123,404
146,606
308
Amounts due on salaries paid to employees and consultants regards withholding tax paid to the tax authorities by the
Company in January and February 2011.
Withholding tax due on postal current accounts refers to amounts withheld on interest accrued on customers’ current accounts.
Substitute tax represents the balance payable by the Company on the revaluation of staff termination benefits in 2010.
Stamp duty is payable to the tax authorities as duty to be paid in virtual form. The balance includes the adjustment paid in
2011 pursuant to note 3bis of art. 13 of the Tariffs provided for by Presidential Decree 642/1972.
Other taxes due include urban waste tax of 6,486 thousand euros.
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 Company for the period 1 January to 31 July 1994.
OTHER AMOUNTS DUE TO SUBSIDIARIES
22.5 - Other amounts due to subsidiaries
Name
Direct subsidiaries
EGI SpA
Poste Vita SpA
Postel SpA
PosteMobile SpA
Mistral Air Srl
PostelPrint SpA
Poste Assicura SpA
Total
36
7,400
175
99
7,549
36
1,262
175
2,245
7,509
153
10
153
-
15,422
11,380
This item primarily regards the amount payable by Poste Italiane SpA, as the consolidating entity, to subsidiaries in return
for the transfer of tax credits for advance payments, withholding taxes paid and tax paid overseas, less IRES payable by
subsidiaries to the Company, and the benefit linked to the tax losses transferred from Mistral Air Srl and SDA Express
Courier SpA during 2010.
SUNDRY PAYABLES
22.6 - Sundry payables
31 December 2010
Item
31 December 2009
Non-current
liabilities
Current
liabilities
Total
Sundry payables attributable to BancoPosta
Non-current
liabilities
Current
liabilities
Total
107,308
-
90,868
90,868
-
107,308
9,780
-
9,780
7,156
-
7,156
Other
-
27,352
27,352
-
31,233
31,233
Total
9,780
118,220
128,000
7,156
138,541
145,697
Guarantee deposits
Sundry payables primarily attributable to BancoPosta refer to 76,770 thousand euros due to INPS and INPDAP for pensions
paid by Poste Italiane SpA to pensioners after their death and which are in the process of being recovered. A further 13,816
thousand euros is due to Cassa Depositi e Prestiti as a result of amounts registered in customers’ postal savings books
and in the process of verification.
Guarantee deposits primarily regard amounts collected from 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.).
ACCRUED EXPENSES AND DEFERRED INCOME FROM TRADING TRANSACTIONS
The nature and composition of Accrued expenses and deferred income is as follows:
22.7 - Accrued expenses and deferred income
31 December 2010
31 December 2009
Non-current
liabilities
Current
liabilities
Total
Non-current
liabilities
Current
liabilities
Total
-
2,921
2,921
-
2,799
2,799
Deferred income
6,236
20,198
26,434
6,301
22,008
28,309
Total
6,236
23,119
29,355
6,301
24,807
31,108
Item
Accrued expenses
Deferred income primarily regards:
• 14,225 thousand euros in fees on Postamat cards collected in advance;
• 6,301 thousand euros (including 5,986 thousand euros relating to income accruing after 2011) regarding the advance collection of the rental on a thirty-year lease of a pneumatic postal machine in Rome;
• 3,835 thousand euros relating to income accruing in future years as a result of the Gran Premio BancoPosta loyalty programme, which grants award credits to customers in return for certain behaviours. 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.
310
23 - REVENUES FROM SALES AND SERVICES
Revenues from sales and services of 9,571,585 thousand euros break down as follows:
23.1 - Revenues from sales and services
Item
2010
2009
Postal Services
BancoPosta Services
Other sales of goods and services
4,505,309
4,961,743
104,533
4,708,951
5,039,417
92,798
Total
9,571,585
9,841,166
POSTAL SERVICES
Revenues from Postal Services break down as follows:
23.2 - Postal Services
Item
2010
2009
Unfranked mail
Mechanised franking by third parties and at post offices
Stamps
Integrated services
Overseas mail and parcels
Telegrams and online services
Other postal services
1,549,490
1,274,987
455,362
284,286
201,752
112,746
62,384
75,281
1,537,481
1,300,943
502,247
256,227
168,087
121,734
69,905
70,483
4,016,288
4,027,107
364,463
371,830
124,558
310,014
4,505,309
4,708,951
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.
Mechanised franking by third parties or at post offices 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.
Integrated services regard the delivery of administrative notices and fines, amounting to 255,034 thousand euros, the
integrated notification service for legal process carried out on behalf of UNEP (Notifications, Enforcements and Complaints
Offices), totalling 27,299 thousand euros, and revenues deriving from the agreement with the tax authorities regarding bulk
and registered services, amounting to 1,953 thousand euros.
Postage-paid mailing services 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 relate to revenues from the international exchange of such items.
Telegrams and online services primarily regard the telegram service provided by phone or at post offices, and amounting
to 36,441 thousand euros and 12,283 thousand euros, respectively.
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 364,463 thousand euros are, whilst awaiting renewal
of the Contratto di Programma (Planning Agreement) for the three-year period 2009-2011, estimated on the basis of the
best available information from previous Contratti di Programma (Planning Agreements) and Interministerial Committee for
Economic Planning (CIPE) “Guidelines for Regulation of the Postal Sector”.
Publisher and electoral tariff subsidies include:
• 57,764 thousand euros representing the amounts due from the Publishing Department of the Cabinet Office to cover the
cost of the preferential rates offered to publishers and non-profit organisations which, following the Ministry for Economic
Development Decree of 30 March 2010, were applicable only to the first quarter of the year. The amount due was calculated on the basis of the tariffs established in the Ministerial Decrees of 23 November 2002 and 1 February 2005. The
discounts granted by the Company are only partially covered by the amount set aside in the Cabinet Office’s budget;
• 66,794 thousand euros in amounts paid by the State to cover reductions and preferential prices granted to election candidates under Law 515/93. This amount has also not been budgeted for by the MEF.
BANCOPOSTA SERVICES
These revenues break down as follows:
23.3 - BancoPosta services
Item
2010
2009
Fees for the collection of postal savings deposits
Income from the investment of postal current account deposits
Commissions on bills processed
Other revenues from current account services
Insurance brokerage
Income from delegated services
Distribution of loan products
Fees for issue and use of prepaid cards
Money transfers
Fees from securities placement and trading
Securities custody
Distribution of investment funds
Other products and services
1,557,000
1,375,716
622,110
493,772
283,438
194,778
184,894
88,195
77,107
26,246
22,434
1,799
34,254
1,600,000
1,319,900
640,722
502,124
218,382
202,442
181,095
74,109
78,447
158,431
24,496
2,469
36,800
Total
4,961,743
5,039,417
Fees for the collection of savings deposits regard payment for managing, issuing and redeeming Postal Savings Certificates
and payments into and withdrawals from Postal Savings Books. These services are provided by the Company on behalf of
Cassa Depositi e Prestiti. The amount for 2010, totalling 1,557,000 thousand euros, was calculated on the basis of the
tariffs applicable to the annual targets for savings deposits provided for in the agreement executed on 10 March 2010. This
agreement, which expired on 31 December 2010, is in the process of renewal.
312
Income from the investment of postal current account deposits breaks down as follows.
23.4 - Income from the investment of postal current account deposits
Item
Income from investment in securities
Interest income on HTM securities
Interest income on AFS financial assets
Interest income on securities held for trading
Interest income on asset swaps of AFS financial assets
Net remuneration of own liquidity recognised in finance income and costs
Total
2010
2009
1,188,665
582,413
571,808
677
33,767
1,112,073
516,695
543,453
1,825
50,100
196,140
214,296
(9,089)
(6,469)
1,375,716
1,319,900
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 12.4.
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 12. 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 Company’s own liquidity deposited in postal current accounts
This item is shown separately in Finance income and costs (note 31).
Other revenues from current account services primarily regard current account charges (186,605 thousand euros), fees on
amounts collected and on statements of account sent to large customers (129,788 thousand euros), annual fees on debit
cards (58,796 thousand euros) and on debit card transactions (54,955 thousand euros).
Revenues from insurance brokerage derive primarily from fees receivable from the subsidiaries Poste Vita and Poste
Assicura, in return for the sale of insurance policies in 2010 (281,517 thousand euros).
Income from delegated services primarily regards amounts received by the Company for the payment of pensions
disbursed by INPS (108,091 thousand euros) and INPDAP (13,309 thousand euros), and for treasury services carried out
by the Company in 2010 on the basis of the Agreement between Poste Italiane SpA and the MEF (57,662 thousand euros).
Revenues from the distribution of loan products regard commissions on the sale of personal loans and mortgages on behalf
of third parties (184,894 thousand euros).
Revenues from money transfers primarily regard commissions collected on national money orders (50,693 thousand
euros), Moneygram transfers (15,013 thousand euros) and Eurogiros (5,524 thousand euros).
Fees from securities placement and trading (26,246 thousand euros) regard income from the execution of purchase and
sell orders on the secondary market on behalf of customers.
Revenues generated by the distribution of investment funds do not include management fees which, in accordance with
the EU’s Markets in Financial Instruments Directive (Directive 2004/39/EC, “MiFID”), are attributable entirely to the fund
manager, BancoPosta Fondi SpA SGR.
OTHER SALES OF GOODS AND SERVICES
This income from ordinary activities is not attributable to the specific Postal and BancoPosta segments. The main
components include: fees received for collecting applications for residence permits and other permits, totalling 34,122
thousand euros (25,876 thousand euros in 2009), income from call centre services, amounting to 10,608 thousand euros
(7,837 thousand euros in 2009), and income from the provision of ancillary franking and packaging services, totalling 7,473
thousand euros (10,491 thousand euros in 2009).
24 - OTHER INCOME FROM FINANCIAL ACTIVITIES
Other income from financial activities consists of the following:
24.1 - Other income from financial activities
Item
Income from financial instruments at fair value through profit or loss
Realised gains
Income from held-to-maturity securities
Realised gains
Realised gains
Income from cash flow hedges
Realised gains
Income from fair value hedges
Fair value gains
Other income
Total
2010
8,636
8,636
32
32
269,254
269,254
79
79
3,081
281,082
2009
46,327
46,327
72,638
72,638
41,487
41,487
7,521
7,521
167,973
25 - OTHER OPERATING INCOME
This item primarily regards the following:
25.1 - Other operating income
Item
Gains on disposals
Increases to estimates for previous years
Recovery of contract expenses and other recoveries
Lease rentals
Recovery of cost of seconded staff
Grants related to income
Other income
Total
2010
2009
64,846
52,102
19,750
11,731
7,694
2,079
11,096
56,577
36,752
16,706
13,397
11,123
104
59,536
169,298
194,195
314
GAINS ON DISPOSALS
25.2 - Gains on disposals
Item
2010
2009
Gains on disposal of operating property and land
Gains on disposal of investment property
Gains on disposal of other operating assets
55,437
7,677
1,732
34,894
7,851
13,832
Total
64,846
56,577
For the purposes of reconciliation with the statement of cash flows, in 2010 this item amounts to 63,825 thousand euros, after losses of 1,021 thousand euros
(note 30). In 2009, net gains, after losses of 1,684 thousand euros, amounted to 54,893 thousand euros.
INCREASES TO ESTIMATES FOR PREVIOUS YEARS
This item includes, among other things, the impact of settlements that have resulted in the recalculation of liabilities.
LEASE RENTALS
25.3 - Lease rentals
Item
2010
2009
2,876
4,615
2,872
4,610
4
5
6,254
5,750
Intercompany rentals
2,150
2,238
Antenna sites
1,007
985
Other rental income
3,097
2,527
2,601
3,032
11,731
13,397
Rental income from investment property
Residential properties
Service accommodation
Rental income on commercial property
Recovery of expenses, transaction costs and other income(1)
Total
(1)
This item primarily regards the recovery of expenses incurred directly by Poste Italiane SpA and passed on to tenants. This category does not include
extraordinary maintenance costs.
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.
26 - COST OF GOODS AND SERVICES
26.1 - Cost of goods and services
Item
2010
2009
Services
Lease expense
Raw, ancillary and consumable materials and goods for resale
Interest expense paid to customers
1,481,650
292,875
117,513
90,539
1,511,212
285,495
117,026
131,359
Total
1,982,577
2,045,092
2010
2009
339,027
169,268
149,364
121,190
115,969
88,633
84,141
83,866
76,807
73,001
47,844
42,019
34,031
20,910
16,708
17,150
1,527
195
386,206
169,918
154,395
119,253
107,273
91,953
85,399
83,930
79,192
58,850
45,776
39,429
31,411
21,515
14,136
13,966
8,422
188
1,481,650
1,511,212
SERVICES
26.2 - Services
Item
Transport of mail, parcels and forms
Routine maintenance and technical assistance
Personnel services
Energy and water
Outsourcing fees and other external service charges
Telecommunications and data transmission
Transport of cash
Mail, telegraph and telex
Cleaning, waste disposal and security
Printing and enveloping services
Credit and debit card fees and charges
Consultants’ fees and legal expenses
Advertising and promotions
Automated services from the Department of Land Transportation
Agents’ commissions and other
Insurance premiums
Securities custody and management fees
Remuneration of Statutory Auditors
Total
316
Details of the remuneration paid to Statutory Auditors are provided below:
26.3 - Remuneration of Statutory Auditors
Item
2010
2009
Remuneration
Expenses
151
44
151
37
Total
195
188
2010
2009
Property rentals
Lease rentals
Ancillary costs
Vehicle leases
Equipment hire and software licenses
Other lease expense
162,485
153,617
8,868
74,227
50,073
6,090
159,931
150,841
9,090
73,534
44,300
7,730
Total
292,875
285,495
LEASE EXPENSE
Lease expense breaks down as follows:
26.4 - Lease expense
Item
The cost of leasing operating properties regards the buildings from which the Company operates (post offices, Delivery
Offices, Sorting Centres). Under the relevant lease agreements, rents are increased annually on the basis of the price
index published by the National Office of 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 contract form, has the right to withdraw
from the contract at any time, giving six months notice.
RAW, ANCILLARY AND CONSUMABLE MATERIALS AND GOODS FOR RESALE
26.5 - Raw, ancillary and consumable materials and goods for resale
Item
Fuels and lubricants
Stationery and printed matter
Printing of postage and revenue stamps
Consumables and goods for resale
Total
2010
2009
45,782
31,115
21,343
19,273
42,779
32,046
20,521
21,680
117,513
117,026
INTEREST EXPENSE PAID TO CUSTOMERS
The rate paid to retail customers in 2010 was 0.25% until 9 May 2010 and 0.15% from 10 May 2010 (0.50% from 1 January
to 31 May 2009 and 0.25% for the remainder of 2009).
27 - OTHER EXPENSES FROM FINANCIAL ACTIVITIES
Other expenses from financial activities consist of the following:
27.1 - Other expenses from financial activities
Item
2010
2009
624
624
1,311
125
1,186
3,602
3,602
-
103
103
-
Other expenses
1,160
-
Total
5,489
1,311
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
Expenses from fair value hedges
Fair value losses
28 - 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:
28.1 - Staff costs
Item
Note
2010
2009
Wages and salaries
Social security contributions
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
[18.2]
[18.2]
[18.2]
Other staff costs/(cost recoveries)
4,253,536
1,184,857
256,372
1,974
2,630
156,715
47,364
58,706
(75,224)
4,258,386
1,177,813
266,004
1,938
2,032
169,914
196,886
115,000
(15,032)
Total costs
5,886,930
6,172,941
(66,320)
(121,007)
5,820,610
6,051,934
Income from fixed-term contracts settlements
Total
318
Details of the remuneration paid to Directors are provided below:
28.2 - Remuneration and expenses paid to Directors
Item
2010
2009
Remuneration
Expenses
2,510
120
1,931
101
Total
2,630
2,032
Cost items relating to staff termination benefits are described in note 19.
Net provisions for disputes with staff, provisions to the Solidarity Fund and those for restructuring charges are described
in note 18.2.
Cost recoveries primarily regard revised estimates for previous years.
Income from the fixed-term contracts settlement was earned following 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. The agreement has resulted in conversion of the previous temporary contracts to permanent
arrangements for approximately 2,000 staff who, at 27 July 2010, were employed by the Company by virtue of a judicial
ruling that had not yet become final. This was effected by means of individual agreements, under which each member of
staff waived any legal or financial claim deriving from the sentence requiring their re-employment, and approximately 1,500
staff agreed to return any amounts paid by the Company for periods during which they did not work, and which the
Company had charged to the income statement in previous years. These amounts, which are to be repaid in variable
interest-free instalments by 2030, total approximately 78 million euros, representing gross salaries and accrued termination
benefits. Compared with the above face value of the amounts to be returned, the amount of 66,320 thousand euros
recognised in the income statement for the year represents 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 31 December 2010).
The following table shows the average and year-end headcounts by category:
28.3 - Headcount
Average headcount
Year-end headcount
Category
Senior managers
Middle managers (A1)
Middle managers (A2)
Grades B, C, D
Grades E, F
2010
597
5,725
8,081
126,294
5,419
2009
627
5,750
8,119
127,487
6,143
31 Dec 2010
584
5,705
7,844
123,727
4,311
31 Dec 2009
602
5,663
8,010
124,520
6,107
Total permanent workforce(*)
146,116
148,126
142,171
144,902
(*)
Data is expressed in full-time equivalent terms.
Taking account of staff on flexible contracts, the average number of full-time equivalent staff in 2010 is 148,231 (150,793
in 2009).
29 - DEPRECIATION, AMORTISATION AND IMPAIRMENTS
29.1 - Depreciation, amortisation and impairments
Item
2010
2009
344,863
95,876
129,913
14,406
26,042
78,626
3,073
347,834
92,126
136,026
17,497
20,059
82,126
13,448
4,727
(1,103)
4,311
(1,817)
Amortisation of Intangible assets
Industrial patents and intellectual property rights
Concessions, licenses, trademarks and similar rights
142,368
142,363
5
140,646
140,553
93
Total
493,928
504,422
Property, plant and machinery
Operating properties
Plant and machinery
Industrial and commercial equipment
Other assets
Impairments/Recoveries/Adjustments of Property, plant and equipment
Depreciation of Investment property
Impairments/Recoveries/Adjustments of Investment property
320
30 - OTHER OPERATING COSTS
Other operating costs break down as follows:
30.1 - Other operating costs
Item
Note
2010
2009
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
[10.3]
[10.6]
[11.2]
3,554
12,859
(4,375)
(4,939)
9
27,796
(20,031)
23,211
20,181
4,435
Occurrence of operational risks
Robberies during the year
Reversal of BancoPosta assets, net of recoveries
Other operating losses of BancoPosta
[20.5]
[20.7]
35,659
6,748
9,411
19,500
29,875
9,964
1,166
18,745
141,987
78,487
40,601
22,899
75,195
3,933
18,968
52,294
1,021
1,684
34,473
16,174
9,739
8,560
-
36,144
16,374
9,010
9,875
885
18,174
20,658
20,211
61,671
(41,460)
-
21,367
20,504
276,446
211,856
Net provisions for liabilities and charges made/(used)(1)
for disputes with third parties
for non-recurring charges incurred by BancoPosta
for other liabilities and charges
[18.2]
[18.2]
[18.2]
Losses
Other taxes and duties
Municipal property tax
Urban waste tax
Other
Net provisions for taxation and social security contributions made/(used)(1)
[18.2]
Revised estimates and assessments for previous years
Write-downs
Use of other provisions
Other recurring expenses
Total
(1)
[7.3]
For the purposes of reconciliation with the statement of cash flows, in 2010 this item amount to 141,987 thousand euros (76,080 thousand euros in 2009).
31 - FINANCE INCOME/COSTS
FINANCE INCOME
31.1 - Finance income
Item
2010
2009
Income from subsidiaries
Interest on receivables
Interest on intercompany current accounts
17,973
16,023
1,950
17,679
15,922
1,757
Interest on fiduciary deposit (1)
Interest on fixed income instruments(1)
42,033
1,053
9,979
2,004
6,696
(1,647)
35,810
121
7,821
154
78,044
9,711
9,089
238
48,694
12,373
(3,542)
1,481
5,600
143,650
112,357
43,801
6,469
2,467
56,217
2,945
(2,861)
3,319
4,501
8
144,524
(1)
Accrued differentials on fair value hedges(1)
Realised gains
Dividends from other investments
Other finance income(1)
Interest from parent(2)
Remuneration of Poste Italiane SpA’s liquidity
Interest on term bank accounts
Finance income on discounted receivables(3)
Overdue interest
Impairment of amounts due as overdue interest
Other
Foreign exchange gains
Revaluations
Total
(1)
(2)
(3)
Interest income from the parent includes:
• 9,633 thousand euros as interest payable under Law 887/84, to cover the accrued portion of the interest due on the loans issued by Cassa Depositi e
Prestiti (described in note 8.3);
• 78 thousand euros in interest on the account held at the Italian Treasury.
Finance income on discounted receivables regards: 26,279 thousand euros in accrued interest on the amount due from the MEF (note 8.3), 13,078 thousand euros in interest on amounts due for the publisher tariff subsidies described in note 10.2, and 9,337 thousand euros in interest on amounts due
from staff and IPOST under the fixed-term contracts settlements of 2006 and 2008 (note 9.1).
322
FINANCE COSTS
31.2 - Finance costs
Item
Note
Finance costs on financial liabilities(1)
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
2010
2009
73,958
38,845
26,431
3,778
3,643
191
1,070
95,201
38,867
32,712
12,417
5,578
228
4,370
1,029
13,950
-
Finance costs on provisions for staff termination benefits(1)
[19.1]
60,215
68,497
Finance costs on provisions for liabilities(1)
[18.2]
1,035
1,747
Finance costs on discounted amounts payable to Solidarity Fund(1)
[22.3]
212
1,763
Other finance costs(1)
2,714
3,842
Foreign exchange losses
5,644
2,929
157,728
173,979
Loss on fiduciary deposit (1)
Total
(1)
32 - INCOME TAX EXPENSE
32.1 - Income tax expense
2010
Item
Current tax expense
Substitute tax
2009
IRES
IRAP
Total
IRES
IRAP
Total
399,789
279,150
678,939
385,700
276,139
661,839
-
-
-
49,350
-
49,350
Deferred tax assets
17,343
(1,297)
16,046
15,321
(4,595)
10,726
14,537
(535)
14,002
(82,910)
(6,491)
(89,401)
431,669
277,318
708,987
367,461
265,053
632,514
Total
The effective tax rate for 2010 is 49.3% and breaks down as follows:
32.2 - Reconciliation between statutory and effective tax rate for IRES
2010
Item
Profit before tax
IRES
2009
% rate
1,438,021
IRES
% rate
1,369,174
395,456
27.5
376,523
27.5
5,558
(8,254)
5,636
4,448
0.4
(0.6)
0.4
0.3
6,994
4,503
0.0
0.0
0.5
0.3
34,968
2.4
28,196
2.1
(5,835)
(308)
(0.4)
(0.02)
(50,371)
1,616
(3.7)
0.1
431,669
30.0
367,461
26.8
Exempt gains on financial assets
Net provisions for liabilities and charges and
impairments of receivables
Other
32.3 - Reconciliation between statutory and effective tax rate for IRAP
2010
Item
Profit before tax
IRAP
2009
% rate
1,438,021
IRAP
% rate
1,369,174
63,848
4.44
60,274
4.4
193,835
13.5
200,327
14.6
11,407
0.8
17,735
1.3
7,912
0.6
8,672
0.6
Finance costs and income
468
0.03
840
0.1
718
0.05
721
0.1
(1,348)
(0.1)
(10,908)
(0.8)
478
0.03
(12,608)
(0.9)
277,318
19.3
265,053
19.4
Non-deductible staff costs
Net provisions for liabilities and charges and
impairment of receivables
Other
Unlike the year under review, in 2009 the Company recognised tax benefits after it exercised the option granted by art. 15
of Legislative Decree 185/2008, converted into Law 2/2009, to realign the tax bases of assets and liabilities with their
corresponding statutory amounts19.
19. This realignment regarded:
• differences arising on first-time application of IAS/IFRS, which were rendered deductible by the payment of substitute tax, with recognition of the
resulting tax benefit;
• differences between the carrying amounts of assets and liabilities and their tax bases arising after adoption of IAS/IFRS, which became deductible in
5 equal instalments from 2009 and in the four subsequent years; the exercise of this option did not have any effect on the income statement, in that
the reduction in current tax expense was offset by a corresponding reduction in deferred tax assets.
324
CURRENT TAX ASSETS AND LIABILITIES
32.4 - Changes in current tax assets/(liabilities)
IRES
IRAP
Assets/(Liabilities) Assets/(Liabilities)
Item
Total
IRES
IRAP
Total
(21,445)
(6,548)
(27,993)
(27,490)
(328)
(27,818)
Payments of
461,102
286,441
747,543
411,102
269,919
681,021
prepayments for the current year
405,730
279,248
684,978
328,560
269,919
598,479
balance payable for previous year
29,625
7,193
36,818
-
-
-
substitute tax
25,747
-
25,747
82,542
-
82,542
-
-
-
26,111
-
26,111
(399,789)
(279,150)
(678,939)
(435,050)
(276,139)
(711,189)
(413,685)
(279,325)
(693,010)
(399,596)
(276,317)
(675,913)
(49,350)
Reclassifications
Provisions to the income statement for
current tax expense
substitute tax
-
-
-
(49,350)
-
realignment
13,896
175
14,071
13,896
178
14,074
Provisions to Equity
(18,852)
12
(18,840)
(13,708)
-
(13,708)
Tax consolidation
(29,146)
-
(29,146)
(25,192)
-
(25,192)
Other
22,577
(*)
-
22,577
42,782
-
42,782
14,447
755
15,202
(21,445)
(6,548)
(27,993)
37,702
755
38,457
37,702
-
37,702
(23,255)
-
(23,255)
(59,147)
(6,548)
(65,695)
of which:
Current tax assets
(*)
Primarily due to tax credits deriving 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 2010 includes 37,702 thousand euros (including 1,416 thousand euros deriving
from the tax consolidation arrangement) due to the payment of excess taxation as a result of the non-deductibility of 10%
of IRAP between 2004 and 2007.
IRES payable refers to the balances due to the tax authorities, represented by provisions for the year less advances paid
and withholding tax paid for IRES.
DEFERRED TAX ASSETS AND LIABILITIES
The following table shows deferred tax assets and liabilities:
32.5 - Deferred taxes
Item
Deferred tax assets
Total
Balance at
Balance at
31 December 2010
31 December 2009
660,248
(139,271)
550,164
(345,634)
520,977
204,530
The nominal tax rates are 27.5% for IRES and 3.9% 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 average statutory rate for
IRAP is 4.44%.
Changes in deferred tax assets and liabilities are shown below:
32.6 - Changes in deferred tax assets and liabilities
Item
2010
2009
204,530
321,954
Deferred tax income/(expenses) recognised in the income statement
(30,048)
78,675
Deferred tax income/(expenses) recognised in Equity
346,495
(169,988)
-
(26,111)
520,977
204,530
The balance of deferred tax assets and liabilities recognised in the income statement for the year under review does not
include significant components of non-recurring income which, in contrast, amounted to 91,199 thousand euros in 2009,
primarily due to the realignment of the tax bases of assets and liabilities and their carrying amounts.
The balance of deferred tax assets and liabilities recognised in Equity consists of the tax effects of the change in reserves
described in note 17.1, less a 99 thousand euro reduction in current tax liabilities.
The following table shows a breakdown of changes in deferred tax assets and liabilities according to principal event that
generated the change:
32.7 - Changes in deferred tax assets
Item
in profit or loss
in Equity
in profit or loss
in Equity
Investment
properties
Financial
assets
and liab.
Accum.
adjustments
to assets
Provisions
for liabilities
and charges
Trade and
other
receivables
Staff
costs
Other
Total
13,528
115,278
111,318
247,890
27,095
35,839
2,822
553,770
(238)
32
3,486
14,822
8
(24,352)
9,115
2,873
-
(5,952)
(27)
(378)
(4,944)
(2,298)
-
(13,599)
-
7,120
-
-
-
-
-
7,120
13,290
116,478
114,777
262,334
22,159
9,189
11,937
550,164
(235)
-
(3,118)
1,081
3
-
416
(1,853)
-
(5,952)
(27)
(378)
(5,538)
(2,298)
-
(14,193)
-
126,130
-
-
-
-
-
126,130
13,055
236,656
111,632
263,037
16,624
6,891
12,353
660,248
Deferred tax assets represent the benefit expected to derive from reduced future tax charges due to deductible temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts. They primarily reflect the
expected benefit of the future deductibility of certain provisions for liabilities (263,037 thousand euros), of adjustments to
assets (111,632 thousand euros), of the impairment of trade and other receivables (16,624 thousand euros), of
accumulated depreciation of investment property (13,055 thousand euros), and of amounts due to staff (6,891 thousand
euros). Deferred tax assets also reflect temporary differences arising between the tax bases of financial assets and
326
32.8 - Changes in deferred tax liabilities
Financial
assets and
liabilities
152,461
PPE
47,572
Expenses/(Income) recognised in profit or loss
Expenses/(Income) recognised in profit or loss on realignment
205
(122)
177,108
-
4,163
(46,887)
-
(7,604)
-
5,156
(44,312)
26,111
1,920
(91,321)
177,108
26,111
329,652
4,848
11,134
-
345,634
(122)
(220,365)
(575)
-
14,699
-
-
14,124
(122)
(220,365)
109,165
4,273
25,833
-
139,271
Item
Expenses/(Income) recognised in profit or loss
Expenses/(Income) recognised in profit or loss on realignment
Discounted
Deferred staff termination
gains
benefits
18,738
13,045
Total
231,816
liabilities and their carrying amounts, as a result of application of IAS 39 (236,656 thousand euros).
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 and their carrying
amounts, as a result of application of IAS 39 (109,165 thousand euros). The reduction in 2010 is due to changes in the
Fair value reserve described in note 17.1. Deferred tax liabilities also derive from taxable temporary differences between
the tax bases and carrying amounts of Property, plant and equipment (4,273 thousand euros), and from the deferral of
gains (25,833 thousand euros).
At 31 December 2010 and 2009 deferred tax assets and liabilities recognised directly in Equity are as follows:
32.9 - Deferred tax assets and liabilities recognised in Equity
Item
Increases/(Decreases) in Equity
2010
2009
Fair value reserve for available-for-sale financial assets
Cash flow hedge reserve for hedging derivatives
384,572
(38,077)
(171,057)
1,069
Total
346,495
(169,988)
Finally, current tax expense of 18,840 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 charge for the year accounted for in Equity
is 327,655 thousand euros.
33 - 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 33.1 to 33.4.
Name
Financial
assets
Assets
attrib. to
BancoPosta
Trade
receivables
Other assets/
Other receivables
Financial
liabilities
Liabilities
attrib. to
BancoPosta
Trade
payables
Other
liabilities
4,671
346,706
95,362
62,441
-
2,665
3,405
30
982
555
783
698
426
2,431
1,223
342
35,377
98
1,812
197,914
11,851
6,491
2,944
1,075
11
-
18,010
61
160,856
4,120
2,244
2
1,351
17,769
100,058
15,219
5,077
651
-
41
66
1,824
7,913
99
1,285
105
663
146
1,482
28,464
179
1,196
26,316
13,519
4,982
513
10
70,902
1,985
5
2,003
110
23,353
10,198
12
1,165
25,823
3,406
6
28,896
1,050
252
276
11,442
36
1,262
175
2,245
7,509
-
-
21
1
823
63
166
-
-
5
6
7,518
5,128
1
197
517
57,409
153
-
-
2
111
40
-
-
16
-
-
-
769,500
769,500
-
6,804,803
6,804,803
-
1,283,237
1,201,427
81,810
6,540
6,540
-
-
(16,170)
(16,170)
-
172,319
-
12,140
12,140
-
Direct subsidiaries
CLP ScpA
Consorzio Servizi Telef. Mobile ScpA
EGI SpA
Mistral Air Srl
Poste Energia SpA
Poste Link Scrl
Poste Tributi ScpA
Poste Tutela SpA
Poste Vita SpA
Poste Voice SpA
Postecom SpA
Postel SpA
PosteMobile SpA
PosteShop SpA
Consorzio Poste Welfare
Docutel SpA
Poste Assicura SpA
PostelPrint SpA
Associates
Consorzio ANAC
Docugest SpA
Uptime SpA
Related parties external to the Company
Direct relations
Former government procurement
department
-
-
-
-
-
-
172,319
-
101,143
CONI Servizi
Consap SpA
Enav SpA
EUR SpA
Anas Group
Enel Group
Eni Group
Equitalia Group
Finmeccanica Group
Fintecna Group
Invitalia Group
RAI Group
Sogei Group
-
-
938,601
68
5
308
30
21,632
526
32,661
347
9
6
16
108
17
5
1
-
679,517
-
86,936
-
21
41
882
669
16,390
953
435
61,607
183
1,034
2
-
14,929
59,828
-
-
(108,090)
(5,071)
-
-
-
-
6,804,803
2,440,741
2,555
1,004,935
172,232
493,554
98,277
Total
(1)
Joint venture.
1,379,823
328
Assets
attrib. to
BancoPosta
Trade
receivables
Other assets/
Other receivables
Financial
liabilities
Liabilities
attrib. to
BancoPosta
Trade
payables
Other
liabilities
76,696
-
615
5,684
30
649
437
637
3,355
1,293
276
24,123
1,315
183,542
11,082
6,505
5,121
12
19
8
39
-
9,604
61
187,517
2
545
11,871
361
10,225
11,279
53
-
1,100
101
26,538
148
323
9,865
977
326
182,105
1,861
5,082
26,665
5,308
956
99
52,851
5,428
920
107
18,563
21
1,128
33,647
330
57,483
5,191
382
1,177
34,094
36
99
7,400
175
7,549
-
-
4
3
1,084
259
3,362
183
67
-
-
5
1
6
609
5,312
-
219
36
4
99,601
-
10
153
-
-
-
3
168
-
-
16
-
-
-
639,202
639,202
-
6,173,454
6,173,454
-
1,290,938
1,243,908
47,030
-
6,367
6,367
-
-
-
121,397
121,397
12,140
12,140
-
100,825
Arcus SpA
Cinecittà Luce SpA (formerly Cinecittà Holding SpA)
CONI Servizi
Consap SpA
Consip SpA
Enav SpA
EUR SpA
Expo 2015 SpA
Anas Group
Enel Group
Eni Group
Equitalia Group
Finmeccanica Group
Fintecna Group
Gestore dei Servizi Elettrici Group
Invitalia Group
Italia Lavoro Group
RAI Group
SACE Group
Sogei Group
Sogin Group
Rete Autostradale Mediterranee SpA
Sicot SrL
Sogesid SpA
Studiare Sviluppo Srl
-
-
842,556
109
5
304
39
25,783
987
28,384
2,192
745
9
54
93
1
3
1
-
-
512,667
-
73,403
-
6
41
1,224
1,270
23,084
785
278
58,852
621
2
14
-
13,816
63,774
-
-
(95,077)
(4,902)
-
-
-
-
6,173,454
2,346,923
1,543
744,185
340,707
518,855
105,152
Name
Financial
assets
Direct subsidiaries
CLP 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
5,759
1,805
647,067
122,351
Docutel SpA
Kipoint SpA
Poste Assicura SpA
PostelPrint SpA
Uptime SpA(1)
Associates
Consorzio ANAC
Docugest SpA
Direct relations
Former government procurement department
Total
(1)
1,593,705
Joint venture.
At 31 December 2010 Provisions for liabilities and charges made to cover probable liabilities arising from transactions with
related parties external to the Company and regarding trading relations amount to 40,597 thousand euros (46,974 thousand
euros at 31 December 2009).
2009
Revenues
Cost
Capital expenditure
Current expenditure
Other
Staff
operating
costs
costs
Revenues from sales
and services
Other
operating
income
Finance
income
PPE
Intangible
assets
Cost of
goods and
services
3,497
765
30
16
186
239
64
181
1,344
226
208
222,993
107
1,253
13,365
9,713
5,792
1,734
2,088
483
1
460
137
456
691
385
1,326
1,849
490
1,527
1,177
456
1,466
419
72
4
14,588
1,798
1,217
4,210
2
-
327
11
12,005
-
14
143,380
6,310
7
12,047
6
90,140
37,186
16
81
93,789
4,552
8
46,675
180
293
382
51,164
119
83
193
1,045
1,432
22
1,692
96
96
14
1
7
1,093
23
17
10
8
10
224
159
1
683
19
14
7
57
7
73
6
2
-
19
19
1
45
63
154
707
789
-
-
1,251
1
1,416
113,229
-
845
-
1
147
-
-
-
-
-
-
-
-
-
815,152
Direct relations
712,907
102,245
-
7,272
6,042
1,230
-
85,762
85,762
-
-
-
-
-
25,200
22,764
2,436
-
228
228
-
1,600,209
Cinecittà Holding SpA
7
CONI Servizi
995
Consap SpA
124
Consip SpA
20
Enav SpA
190
EUR SpA
3
Anas Group
668
Enel Group
132,352
Eni Group
19,988
Equitalia Group
80,178
775
Finmeccanica Group
138
Fintecna Group
277
162
Invitalia Group
41
1,943
Italia Lavoro Group
22
RAI Group
9,398
SACE Group
93
Sogei Group
25
Sogin Group
2
Sicot Srl
63
9
60
278
13
-
2,409
-
38,012
-
7,227
18
91
2,842
1,896
35,351
678
1,567
55,252
11
15,188
-
28,529
-
26
2
-
32,712
-
22,530
105,850
42,224
20,839
713,752
31,401
29,386
33,968
Name
Finance
costs
Direct subsidiaries
CLP ScpA
EGI SpA
Mistral Air Srl
Poste Energia SpA
Poste Link Scrl
Poste Tributi ScpA
Poste Tutela SpA
Poste Vita SpA
Poste Voice SpA
Postecom SpA
Postel SpA
PosteMobile SpA
PosteShop SpA
Consorzio Poste Welfare
Docutel SpA
Poste Assicura SpA
PostelPrint SpA
Associates
Consorzio ANAC
Docugest SpA
Uptime SpA
Total
(1)
Joint venture.
2,924,996
330
33.4 - Impact of related party transactions on results of operations for 2010
2010
Revenues
Cost
Capital expenditure
Current expenditure
Other
Staff
operating
costs
costs
Revenues from sales
and services
Other
operating
income
Finance
income
PPE
Intangible
assets
Cost of
goods and
services
2,479
884
30
238
236
77
1,320
848
211
286,002
794
13,663
11,824
5,586
1,961
1,015
331
245
130
616
265
816
1,068
3,383
1,973
980
1,669
1,147
561
72
10
15,134
1,530
1,227
3,939
81
395
1,281
-
108
21,617
-
3
139,891
11,485
9,813
238
94,047
29
88
91,915
264
56,361
20
309
330
86,358
42
706
431
21
1,574
85
428
93
41
68
950
60
13
89
193
973
45
83
517
9
4
28
340
54
24
3
8
4
2
37
217
6,073
160
15
492
6
157
12
-
122
-
826
-
36
410
130,337
-
-
387
-
-
1
172
-
-
-
-
-
-
-
-
797,021
695,403
101,618
-
458
458
-
44,216
44,216
-
-
-
-
-
(4,521)
(4,544)
23
-
191
191
-
1,557,287
Arcus SpA
Cinecittà Luce SpA (formerly Cinecittà Holding SpA)
8
CONI Servizi
910
Consap SpA
76
Consip SpA
Enav SpA
193
EUR SpA
Expo 2015 SpA
105
Anas Group
689
Enel Group
148,343
Eni Group
24,008
Equitalia Group
93,363
2,085
Finmeccanica Group
125
Fintecna Group
276
204
Invitalia Group
112
1,347
Italia Lavoro Group
13
RAI Group
8,330
SACE Group
94
Sogei Group
51
Sogin Group
2
Rete Autostradale Mediterranee SpA
Sicot SrL
59
4
Sogesid SpA
Studiare Sviluppo SrL
-
61
306
14
426
-
2,005
-
22
3
19,568
-
7,598
-
69
1,245
1,206
30,859
742
1,433
50,352
11
14,503
14
-
28,725
-
26
2
-
26,431
-
16,131
64,194
25,411
30,149
722,368
31,499
(1,068)
27,692
Name
Direct subsidiaries
CLP 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
Finance
costs
Docutel SpA
Kipoint SpA
Poste Assicura SpA
PostelPrint SpA
Uptime SpA(1)
Associates
Consorzio ANAC
Docugest SpA
Direct relations
Total
(1)
Joint venture.
2,967,539
In 2010 net Provisions for liabilities and charges made to cover probable liabilities arising from transactions with related parties
external to the Company and regarding trading relations amount to 8,602 thousand euros (3,570 thousand euros in 2009).
The nature of the principal transactions between Poste Italiane SpA and related parties external to the Company 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 for 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 refers to Directors of Poste Italiane SpA and the Company’s first-line managers. The related
remuneration, including social and pension contributions, is as follows:
33.5 - Remuneration of key management personnel
Item
2010
2009
Remuneration paid in short term
Post-employment benefits
14,716
462
13,268
522
Total
15,178
13,790
No loans were granted to key management personnel during 2010 and at 31 December 2010 the Company does not report
receivables in respect of loans granted to such personnel.
TRANSACTIONS WITH STAFF PENSIONS FUNDS
Poste Italiane SpA 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 Bylaws, 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.
332
34 - OTHER INFORMATION
POSTAL SAVINGS DEPOSITS
Postal savings deposits collected in the name of and on behalf of Cassa Depositi e Prestiti are shown in the table below,
which breaks deposits down by category.
34.1 - Postal savings deposits
Item
31 December 2010
31 December 2009
97,656,369
91,119,705
198,488,569
113,503,394
84,985,175
192,617,608
102,904,310
89,713,298
Total
296,144,938
283,737,313
31 December 2010
31 December 2009
68,667
39
43,847
799,824
544,097
68,911
88
48,762
534,968
550,112
1,456,474
1,202,841
The above amounts include accrued, unpaid interest.
COMMITMENTS
Purchase commitments given by Poste Italiane SpA are summarised below:
34.2 - Purchase commitments
Item
Investment property
Intangible assets
Goods and services
Property leases
Total
Future commitments with respect to property leases (see note 26.4), which may generally be broken off with six months
notice, break down as follows according to due date:
34.3 - Property lease commitments
Item
31 December 2010
31 December 2009
Lease rentals due:
within 12 months
after 5 years
138,399
345,067
60,631
132,483
351,652
65,977
Total
544,097
550,112
As described in note 7.3, on 20 December 2010 the Company concluded an agreement with UniCredit SpA for the
acquisition, at a price of 136 million euros, of the entire share capital of UniCredit MedioCredito Centrale SpA. Effectiveness
of this transaction is subject to the fulfilment of certain conditions precedent, including the necessary clearance.
GUARANTEES
Personal guarantees issued by Poste Italiane SpA are as follows:
34.4 - Guarantees
Item
31 December 2010
31 December 2009
Sureties and other guarantees issued:
by Poste Italiane SpA in the interests of subsidiaries in favour of third parties
by banks in the interests of Poste Italiane SpA in favour of third parties
letters of patronage issued by Poste Italiane SpA in the interests of subsidiaries
700
54,155
6,290
7.267
35,454
9,899
Total
61,145
52,620
31 December 2010
31 December 2009
19,920,461
21,766
21,486,200
76,301
19,942,227
21,562,501
THIRD-PARTY ASSETS
34.5 - Third-party assets
Item
Securities subscribed by customers held by third-party banks
Other assets
(*)
Total
(*)
In addition to 179 million in the Company’s financial instruments other than bonds (approximately 147 million at 31 December 2009)
Third-party assets include the value of goods belonging to the subsidiary PosteShop SpA, and the value of SIM cards and
scratch cards belonging to the subsidiary PosteMobile SpA, sold through post offices.
ASSETS IN THE PROCESS OF ALLOCATION
At 31 December 2010 the Company has paid a total of 279,589 thousand euros in claims on behalf of the Ministry of
Justice (364,568 thousand euros at 31 December 2009), 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 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
334
Poste Italiane SpA has for some time now taken appropriate organisational and operational steps to comply with the
requirements of Legislative Decree 231/2001.
PROCEEDINGS PENDING AND RELATIONS WITH THE AUTHORITIES
European Commission
In execution of the European Commission’s Decision of 16 July 2008 regarding State aid, and in accordance with
instructions from the 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 Antitrust Authority ruling of 15 October 2009 launched an investigation of the Company 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.
Consequently, the Company sought to demonstrate to the Authority the “rationale” behind its commercial initiatives and,
in the belief that such actions fully comply with competition legislation, on 1 March 2010 it nevertheless decided to give
certain specific commitments, pursuant to art. 14-ter of Law 287/90, aimed at curbing any anti-competitive behaviour. On
10 November 2010 the Authority rejected the commitments given by the Company’, which appealed the ruling before
Lazio Regional Administrative Court. The Antitrust Authority’s investigation is still in progress.
Moreover, on 30 April 2010 the Authority notified the Company that it was to launch an investigation, pursuant to
Legislative Decree 206/2005 (the Consumer Code), into allegations that certain material advertising the “Raccomandata1”
registered mail service is misleading in relation to delivery times and the conditions applicable to refunds for late delivery.
Poste Italiane SpA immediately gave the Authority commitments that it would take action to rectify the situation. The
investigation was completed on 29 December 2010, with the Authority ruling against Poste Italiane SpA and imposing a
fine of 200 thousand euros which, at 31 December 2010, the Company has included in Other liabilities and accordingly paid
in February 2011. The ruling has been appealed before Lazio Regional Administrative Court.
Bank of Italy
Following the results of the Bank of Italy’s inspection of BancoPosta in 2008, a joint working group set up in 2010 by the
Bank of Italy, the shareholder, the Ministry of the Economy and Finance, and Poste Italiane SpA examined the best means
for ring fencing capital for BancoPosta, in order to apply prudential supervision requirements and protect BancoPosta’s
creditors. In February 2011, art. 2. (paragraphs from 17-octies to 17-duodecies) of the so-called “Milleproroghe”
(“Thousand Extensions”) Decree, converted into Law 10 of 26 February 2011, provided that, for the purposes of applying
the Bank of Italy’s prudential requirements, by 30 June 2011 Poste Italiane SpA was, by shareholder resolution, on the
recommendation of the Board of Directors, to ring fence capital to be used exclusively in relation to BancoPosta’s
operations, as governed by Presidential Decree 144/2001. The capital is to amount to at least 10% of the Company’s
Equity. The shareholder resolution will establish the assets and contractual relations to be included in the ring fence and
the rules for its organisation, management and control. Poste Italiane SpA has thus drawn up a new model for accounting
unbundling, extending the application of unbundling, which originally only regarded financial transactions carried out by the
Parent Company pursuant to Presidential Decree 144/2001, and identified in these financial statements as “Assets and
liabilities attributable to BancoPosta”, to all items in the statement of financial position generated by revenue and cost
components attributable to these operations. This will result in preparation of a separate report, to be attached to the
financial statements from 2011, in accordance with the provisions of articles 2423 et seq. of the Italian Civil Code.
DISCLOSURE OF FEES PAID TO THE INDEPENDENT AUDITORS
In 2009 Poste Italiane SpA independently 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 2010 and 2009.
34.6 - Disclosure of fees paid to the Independent Auditors
Item
Entity providing the service
Audit
878
-
878
-
Voluntary audits or audit-related services
153
240
90
-
Services other than audit
960
1,077
2,231
2,045
Total
(*)
2010
Fees(*)
2009
The above amounts do not include incidental expenses and charges.
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.
35 - EVENTS AFTER 31 DECEMBER 2010
Events after the end of the reporting period are described in the above notes. No other material events have taken place
after 31 December 2010. Reference should be made above all to the information in note 34 (Proceedings pending and
relations with the authorities - Bank of Italy) regarding the need to ring fence capital to be used exclusively in relation to
BancoPosta’s operations.
336
Attestation of the separate and consolidated financial statements for the year
ended 31 December 2010 pursuant to art. 154-bis of Legislative Decree 58/1998
1. The undersigned, Massimo Sarmi, as Chief Executive Officer, and Alessandro Zurzolo, as Manager
responsible for Poste Italiane SpA’s financial reporting, having also taken account of the provisions of
art.154-bis, paragraphs 3 and 4 of Legislative Decree 58 of 24 February 1998, 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 2010.
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 Organisations 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
organisation 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 company’s objectives will be achieved, including true and fair financial reporting;
2.2 a number of activities, including checks on the effective application of administrative and accounting
procedures, are in progress.
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.
Chief Executive Office
Massimo Sarmi
Manager responsible for financial reporting
Alessandro Zurzolo
(This certification has been translated from the original which was issued in accordance with Italian legislation)
Attestation of the separate and consolidated financial statements | Board of Statutory Auditors’ Report 337
BOARD OF STATUTORY AUDITORS’ REPORT ON POSTE
ITALIANE SPA’S FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 2010
(A sole shareholder Company)
To the General Meeting of Shareholders of Poste Italiane SpA
During the year ended 31 December 2010 the Board of Statutory Auditors carried out its activities in accordance with the
law, based on the recommendations issued by the Italian Accounting Profession.
In particular, the Board of Statutory Auditors states that:
• we have verified compliance with the law and the Articles of Association and with correct corporate governance principles;
• we attended 11 Board of Directors’ meetings during 2010, which were conducted in accordance with the Articles of
Association, the related legislation and regulations governing their conduct and, in accordance with our duties, can provide reasonable assurance that the actions approved comply with the law, the Articles of Association and correct corporate governance principles. We also attended a General Meetings held in ordinary session;
• we obtained information on the overall operating performance and outlook, and on the most significant transactions, in
terms of size or nature, carried out by the Company and its subsidiaries from the Directors and/or authorised personnel
during the 22 meetings held in 2010 (and the 5 meetings held in 2011 prior to preparation of this Report), which were
attended by the magistrate from the Italian Court of Auditors, who is responsible for carrying out controls pursuant to art.
12 of Law 259/1958. As a result, in accordance with our duties, we can provide reasonable assurance that the actions
carried out comply with the law, the Articles of Association and correct corporate governance principles;
• we held specific meetings with PricewaterhouseCoopers SpA, the firm appointed by the General Meeting of 14 May
2007 as the Company’s independent auditors for the three-year period 2007-2009, which was extended to include 2010
in accordance with the shareholder resolution approved by the General Meeting of 4 May 2010, designed to give the
Company time to appoint new independent auditors for a nine-year period, pursuant to Legislative Decree 39/2010, via
a EU tender process. The independent auditors were invited to participate in all meetings of the Board of Statutory
Auditors, which did not reveal significant aspects or information to be included in this Report;
• we held specific meetings with the Supervisory Board set up under Legislative Decree 231/2001 and subsequent amendments, above all to discuss the application and updating of the Company’s organisational model;
• we obtained information from the Company’s management on the operating performances of subsidiaries, which did not
reveal significant aspects or information to be included in this Report;
• we examined the Company’s organisational structure and its effective functioning, verifying its adequacy via both analysis of company documents and the collection of information during specific meetings with heads of the various functions,
including the head of the Internal Auditing department;
• we assessed the administrative and accounting systems, including the capacity of such accounting system to provide a
fair view of operations, and compliance with correct corporate governance principles, via direct observation and the
gathering of information from departmental heads, from the independent auditors and from the Manager responsible for
financial reporting;
• we monitored the planning and implementation of the initiatives adopted by the Company in order to resolve issues raised by the Bank of Italy, including those notified to the Company in 2009;
• we complied with the requirements established by art. 52, paragraph 1 of the Consolidated Banking Act.
338
We also declare that during the year under review we did not receive reports pursuant to art. 2408 of the Italian Civil Code.
The financial statements for the year ended 31 December 2010, which have been prepared under the International
Financial Reporting Standards (IFRS) adopted by the European Union and contained in the related EU Regulations, report
profit for the year of 729,034,811 euros (736,660,139 euros for the year ended 31 December 2009).
Equity at 31 December 2010, including the profit for 2010, amounts to 3,613,225,460 euros (4,076,920,460 at 31
December 2009). As described in the notes to the financial statements, the reduction in Equity, after taking account of the
dividends paid and profit for 2010, is essentially due to the change in the Fair value reserve, which reflects movements in
the market value of Financial assets attributable to BancoPosta, classified in Available-for-sale financial assets.
In view of the fact that we were not assigned responsibility for analysing the contents of the financial statements on their
merits, we have verified the general presentation and overall compliance with the laws relating to form and content.
The Board also verified compliance with the regulations governing preparation of the Directors’ Report on Operations.
The Board obtained information on the criteria used to determine provisions for impairments, liabilities and charges, and
the related uses.
After also taking account of the attestation of the financial statements under review issued by the Chief Executive Officer
and the Manager responsible for financial reporting, in addition to the results of the audit procedures carried out by the
independent auditors, PricewaterhouseCoopers SpA, as described in the opinion accompanying the financial statements,
dated 21 March 2011, in accordance with our duties we recommend that you approve the financial statements for the year
ended 31 December 2009, as prepared by the Board of Directors.
Dear Shareholders,
At the General Meeting you will be asked to vote on the following Agenda items:
• approval of the financial statements for the year ended 31 December 2010 and the appropriation of profit for the year;
• election of the Board of Directors, following expiry of the term of office of the existing Board of Directors elected by the
General Meeting of 29 May 2008;
• appointment of independent auditors, following expiry of the current contract, following its extension, and subsequent
to approval of the financial statements for the year ended 31 December 2010. On this matter, the Board of Statutory
Auditors, pursuant to Legislative Decree 39 of 27 January 2010, has prepared a specific report containing our recommendations regarding the appointment.
Dear Shareholders,
After the end of the reporting period, in February 2011, the law converting the so-called “Milleproroghe” (“Thousand
Extensions”) Decree of 29 December 2010 into law was approved. With regard to aspects relating to the Company, the
above Decree (paragraph 17-octies et seq. of art. 2) requires Poste Italiane, by 30 June 2011, to ring fence, by shareholder
resolution, on the recommendation of the Board of Directors, capital to be used exclusively in relation to BancoPosta’s
operations, as governed by Presidential Decree 144/2001. The capital is to amount to at least 10% of the Company’s Equity
and the shareholder resolution is to establish the assets and contractual relations to be included in the ring fence and the
rules for its organisation, management and control.
We also bring to your attention the fact that, in order to implement this legal obligation, the Board of Directors’ meeting of
7 March 2011 voted to propose to the General Meeting that the Company ring fence “Patrimonio destinato” (“Committed
capital”) pursuant to the above Law. To this end, the Board also proposes to appropriate a portion of retained earnings,
amounting to 1,000,000,000.00 euros (one billion euros), to form “Committed capital”, to be held in a specific Equity
reserve, named the “Reserve for BancoPosta capital”, and to be used exclusively to meet the related capital requirements.
THE BOARD OF STATUTORY AUDITORS
Silvana Amadori
Ernesto Calaprice
Francesco Ruscigno
- Chairwoman
- Auditor
- Auditor
Board of Statutory Auditors’ Report | Independent Auditors’ Report 339
340
Independent Auditors’ Report 341
POSTE ITALIANE
Registered Office
viale Europa, 190
00144 Rome - Italy
tel +39 06 5958.1
fax +39 06 5958.9100
e-mail [email protected]
www.poste.it
Corporate information
Share capital: 1,306,110,000 euro
Rome Companies Register no. 584565/1996
Business Registration Number REA 842633
Tax Code 97103880585
VAT Number 01114601006
This report is printed on recycled paper
ANNUAL REPORT 2010
Poste Italiane SpA
Tel. 06.59581
ANNUAL
REPORT
2010
www.poste.it
26/07/11 16:44
ANNUAL REPORT 2010
Poste Italiane SpA
(A sole shareholder Company)
Tel. + 39 06.59581
ANNUAL
REPORT
2010
www.poste.it
04/08/11 12:07

Annual Report 2010

Transcription

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