Annual Report • Mar 29, 2019
Annual Report
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2018 annual report of the tamburi investment partners group
| Corporate Boards | 3 |
|---|---|
| Directors' Report | 4 |
| Motion for allocation of the result for the year of Tamburi Investment Partners S.p.A. |
16 |
| Consolidated Financial Statements | |
| Financial Statements ▪ Consolidated income statement ▪ Consolidated comprehensive income statement ▪ Consolidated statement of financial position ▪ Statement of changes in consolidated equity ▪ Consolidated statement of cash flows |
18 |
| Explanatory notes to the 2018 consolidated financial statements | 24 |
| Attachments ▪ Declaration of the Executive Officer for Financial Reporting ▪ List of investments held ▪ Changes in investments measured at FVOCI ▪ Changes in associated companies measured under the equity method ▪ Independent Auditors' Report ▪ Fees for audit services |
57 |
| Separate Financial Statements | |
| Financial Statements ▪ Income statement ▪ Comprehensive income statement ▪ Statement of financial position ▪ Statement of changes in equity ▪ Statement of cash flows |
71 |
| Explanatory notes to the 2018 financial statements | 77 |
| Attachments ▪ Declaration of the Executive Officer for Financial Reporting ▪ List of investments held ▪ Changes in investments measured at FVOCI ▪ 2018 key financial highlights of the subsidiaries ▪ Changes in investments in associated companies ▪ Board of Statutory Auditors' Report ▪ Independent Auditors' Report |
102 |
Cesare d'Amico Vice Chairman Alberto Capponi (1)(2) Independent Director * Paolo d'Amico Director Giuseppe Ferrero (1) Independent Director * Manuela Mezzetti (1)(2) Independent Director * Daniela Palestra (2) Independent Director *
Giovanni Tamburi Chairman and Chief Executive Officer Alessandra Gritti Vice Chairman and Chief Executive Officer Claudio Berretti Executive Director & General Manager
| Myriam Amato | Chairperson |
|---|---|
| Fabio Pasquini | Statutory Auditor |
| Alessandra Tronconi | Statutory Auditor |
| Andrea Mariani | Alternate Auditor |
| Massimiliano Alberto Tonarini | Alternate Auditor |
PricewaterhouseCoopers S.p.A.
(1) Member of the appointments and remuneration committee
(2) Member of the control and risks and related parties committee
* In accordance with the Self-Governance Code
On the basis of the same accounting policies as 2017, the Tamburi Investment Partners Group (hereinafter the "TIP Group" or "TIP") closed 2018 with a pro-forma pre-tax profit of Euro 86.4 million, compared to Euro 71.6 million in 2017, with equity of Euro 666.4 million, compared to Euro 647.5 million at December 31, 2017. It was therefore another extremely positive year.
With effect from January 1, 2018 the TIP Group was required to adopt IFRS 9 in preparing its financial statements. This resulted in a change in the accounting policies and criteria used from those applied for the preparation of the financial statements at December 31, 2017, with the consequent reclassifications and adjustments of the amounts in the financial statements. The company, as permitted by IFRS 9 at the time of transition, adopted the option to not adjust the 2017 figures presented for comparative purposes.
For a correct and complete presentation of period results and to ensure their comparability with preceding periods, and as considered much more representative of and consistent with TIP's activities, the 2018 pro-forma income statement applying the same accounting standards for financial assets and liabilities in place at December 31, 2017 (IAS 39) is presented below.
The Directors' Report comments upon the pro-forma figures, while the Explanatory Notes provide disclosure upon the figures calculated as per IFRS 9.
| Reclassification to | Reclassification to | Reversal of | ||||
|---|---|---|---|---|---|---|
| income statement | income statement of | convertible fair | ||||
| IFRS 9 | ofcapital gain | a diustments to financial | value | PRO FORMA | ||
| Consolidated income statement | 31/12/2018 | realised | assets | adiustments | 31/12/2018 | 31/12/2017 |
| (in Euro) | ||||||
| Total revenues | 11.036.008 | 11036,008 | 7,213,694 | |||
| Purchases, service and other costs | (2.979.278) | (2.979.278) | (2,018,266) | |||
| Personnel expenses | (18,385,432) | (18,385,432) | (15,609,419) | |||
| Amertis ation, depreciation & write-downs | (58.739) | (58.739) | (70,096) | |||
| Operating profit/(loss) | (10, 387, 441) | $\theta$ | 0 | 0 | (10,387,441) | (10, 484, 087) |
| Emannial income | 19,419,199 | 96,707,970 | (28, 821) | 116,098,348 | 52,518,451 | |
| Financial charges | (7,802,272) | (7,802,272) | (6,394,134) | |||
| Profit before adjustments to | ||||||
| investments | 1,229,486 | 96.707.970 | 0 | (28.821) | 97,908,635 | 35,640,230 |
| Share of profit/(loss) of associates | ||||||
| measured under the equity method | 29, 214, 745 | 29,214,745 | 35.916.552 | |||
| Adjustments to financial assets | 0. | (40.695.832) | (40,695,832) | Đ | ||
| Profit before taxes | 30,444,231 | 96,707,970 | (40,695,832) | (28, 821) | 86,427,548 | 71,556,782 |
| Current and deferred taxes | (609.186) | (1, 170, 190) | (5.620) | (1, 784, 996) | 530.166 | |
| Profit of the period | 29.835.045 | 95,537,780 | (40,695,832) | (34, 441) | 84,642,552 | 72,086,948 |
| Profit/(loss) of the period attributable to | ||||||
| the shareholders of the parent | 27.004.846 | 59,530,152 | 71765.289 | |||
| Profit/(loss) of the period attributable to | ||||||
| the minority interest | 2,830,199 | 25, 112, 400 | 321659 |
The IFRS 9 income statement does not include capital gains in the period on the sale of equity investments of Euro 96.7 million and write-downs of Euro 40.7 million, which are recognised directly to equity.
2018 was a very peculiar year on the financial markets. Starting strongly - continuing a long run of gains - performances thereafter flattened out and by autumn-winter a major sell-off was underway. Many were declaring the bull market over by October and December. We were not in agreement with this analysis as - being close observers of corporate performance - we continued to see rising order numbers and in general continuous growth for the real economy. Data emerging over recent weeks confirm this analysis and in fact 2018 year-end results have almost entirely outperformed the always more deceptive "analyst expectations". TIP reports a 2018 pro-forma pre-tax profit of Euro 86.4 million and during the year TIP shares had been among the few performing positively. The 5 year trend, outlined in our standard graph comparing the main Italian and international markets, in fact indicates a very strong performance. Although a victim of the corrections in the September-December period, TIP shares again beat all indicators and stands as a good reflection on our decisions.
For the five preceding years, by February 28, 2019 the TIP shares had gained 156.7%, providing with a total return* of 176.3% - equivalent to an annual average gain of 35.3%. By the same date, the TIP 2020 warrant had gained 471.7% since its issue in July 2015.
It would therefore seem evident that TIP's investment model continues to be well received, with a rather limited exposure to risk and also the unforeseen and rather heightened increase in volatility between September and December on nearly all global markets, and also on the stock historically more resilient - the TIP shares remained highly insulated, with buoyant trading.
The pro-forma pre-tax profit of Euro 86.4 million was driven by the capital gains generated on the Roche Bobois transaction and the partial disposals of the FCA and Moncler shares and was also shaped by the partial impairment losses on some equity investments.
* performance of the TIP share price, dividends distributed and of the 2015-2020 warrants allocated without consideration to shareholders
Roche Bobois S.A., previously Furn Invest S.a.s., held 38.34% through the subsidiary TXR, within the listing process, has in fact made available the IFRS accounting data necessary to apply the equity method of accounting. This has removed the objective limitation upon the exercise of significant influence which required fair value measurement of the investment. This transfer from fair value measurement to the equity method resulted in the booking of the fair value increases cumulated until the date of transfer similarly to that for the divestment of the holding. Therefore, having ascertained significant influence, the cumulative fair value increase of approximately Euro 46 million, recognised to the OCI reserve, has been booked to the pro-forma income statement according to IAS 39 and reclassified as retained earnings under equity as per IFRS 9; the investment previously classified to "Investments valued at FVOIC" was reversed and was recognised to "associated companies measured under the equity method".
The present book value is Euro 20 per share, corresponding to the initial listing price, plus the proportional share of profits and subsequent changes in equity.
As noted, Roche Bobois was listed on the stock market in July and its shares currently trade at approximately two and half times the average purchase price by TXR. During the IPO, TXR sold 3.5% of its Roche Bobois holding (which currently has a free float of 11.5%), while remaining a major shareholder with approximately 35%.
With regard to FCA and Moncler, it should be emphasized that approximately half of the interests held were disposed of, in keeping with the prudent approach for which TIP is known. However, we are confident that these companies still have considerable potential.
In addition in December 2018 TIPO and Fimag signed with Fagerhult AB, a Swedish lighting sector leader, an agreement to sell 100% of the shares of iGuzzini illuminazione S.p.A.. The sale was completed on March 7, 2019, following approval of the respective competent bodies, the necessary antitrust authorizations and various formalities required to close the deal, primarily relating to the capital increase by Fagerhult.
The price set for 100% was Euro 375.9 million, net of financial debt, and was paid at closing, with Euro 284.5 million settled in cash and the remaining Euro 91.4 million in newly issued Fagerhult shares, valued per the contract at the average price in the six months prior to the signing of the letter of intent in October 2018.
Following the transaction, TIPO is also to withdraw from Fimag, in return for which it will receive a share of the cash and Fagerhult shares deriving from the sale of iGuzzini.
TIPO had acquired an equity interest in iGuzzini and Fimag for an initial investment of approximately Euro 21 million, followed by an additional investment of Euro 11 million. The sale is estimated to yield a total capital gain of slightly less than Euro 60 million, in addition to the dividends already collected and gross of the differences relating to the variations in the price of the Fagerhult shares.
Investing activity continued in 2018, with a particular focus on Prysmian, with regards to the capital increase subscribed proportionally by both Clubtre and TIP, but also Hugo Boss and OVS – for information concerning which please see the subsequent events section – as well as various deals involving StarTIP. The purchase of TIP treasury shares also continued.
An additional investment was finalised in July in Alpitour for an amount of approximately Euro 82 million, through Asset Italia 1, with the transaction generating a direct disbursement by TIP of approximately Euro 36.3 million, undertaken jointly with other investors for a total amount of approximately Euro 220 million. Following this investment, TIP holds approximately 35.81% of the tracking shares related to Asset Italia 1.
The transaction involved the purchase of 36.76% (40.5% on a fully diluted basis) of Alpitour S.p.A. by Alpiholding S.r.l. which is held 49.9% by Asset Italia 1 and which already held approximately 33% of Alpitour S.p.A. and which following the deal increased its interest to 31.14% (34.31% on a fully diluted basis). Following the transaction, Asset Italia 1 has an important governance role in the group.
In 2018 Alpitour continued to expand the hotels and resorts it manages, adding Tanka Village, closing the important acquisition of the tour operator Eden Viaggi and completing the purchase of 787 Dreamliner aircraft.
2018 was also profitable due to other income - principally in the form of dividends and interest income - of approximately Euro 19.4 million; the share of profits from associated companies, in addition, contributed approximately Euro 29.2 million, with advisory activities reporting total revenues of approximately Euro 11 million.
The pro-forma result also reflects impairment losses of approximately Euro 40.7 million on the book value of various equity investments in view of prolonged adverse price quotations or persistent uncertainty inherent in future performance. In particular, Euro 33.1 million relates to the write-downs of the equity interest in Hugo Boss, which in the financial statements according to IFRS 9 is deducted directly from equity.
Operating costs increased mainly due to the non-recurring costs sustained by the subsidiary TXR in relation to the Roche Bobois listing and the related disposal of shares on IPO. The executive directors' fees, as previously, are linked to the company's performance and were calculated on proforma figures according to the accounting standards adopted until the end of 2017.
Consolidated equity increased by approximately Euro 20 million, after a buy-back of treasury shares of Euro 19 million and a dividend distribution of nearly Euro 16.8 million, of which Euro 11 million distributed by TIP and Euro 5.8 million distributed by TXR to minority shareholders and following the above-mentioned impairments. In June, 4,380,183 warrants were exercised, resulting in the issue of a similar number of new TIP shares and a capital increase, including share premium, of approximately Euro 20 million.
The consolidated net financial position of TIP Group - taking into account the TIP 2014-2020 bond - totalled approximately Euro 140.5 million, increasing approximately Euro 24.3 million compared to approximately Euro 116.2 million at December 31, 2017. The liquidity from the divestments and the exercise of the warrants in June 2018 was primarily invested in bonds, but also in the new investments, the distribution of dividends and the TIP share buy-back plan.
The main investees, Amplifon, BE, FCA, Ferrari, Interpump and Moncler announced 2018 results confirming excellent performances; Alpitour, Alkemy, Azimut Benetti, Beta Utensili, Chiorino, Eataly, Furla, Hugo Boss, iGuzzini and Roche Bobois reported improved results on the previous year.
The TIP share and warrant prices, after advancing until the beginning of October 2018, then suffered from the general decline of the markets, although the TIP share remains one of the few Italian listings which closed 2018 in positive territory since the beginning of the year. In 2019 the TIP share continued to perform positively, increasing in price by over 6.5% from December 31, 2018 to February 28, 2019.
The financial results reported below refer, where available, to the 2018 Annual Report already approved by the Board of Directors of the investees by the current date; in the absence of such figures, reference is made to the report for the first nine months of 2018 or prior year annual accounts.
TIP holding at December 31, 2018: 100%
Company held 100% by TIP. The StarTIP project provides for the concentration in this company of the investments in the field of start-ups, digital and innovation.
The transfer of the equity interest in Talent Garden S.p.A. from TIP to StarTIP in 2018 marked the completion of the transfer of equity investments in this area.
Also in 2018 a share capital increase was subscribed and a conversion of a convertible bond issued by Buzzoole Holding Ltd., a service platform in support of Influencer Marketing. The total investment was approximately Euro 3.5 million. The interest in Telesia was increased against a further investment of approximately Euro 1.5 million, in addition to the purchase of a stake in Centy S.r.l.
At December 31, 2018, StarTIP's holdings included Digital Magics S.p.A., Talent Garden S.p.A., Heroes S.r.l. (a company that holds a significant interest in Talent Garden), Alkemy S.p.A., Buzzoole Holding Ltd, Telesia S.p.A., MyWoWo S.r.l. and Centy S.r.l.
In February 2019 Talent Garden finalized a capital increase in which StarTIP participated, as described with more details in the section "Subsequent events".
TIP holding at December 31, 2018: 51.00%
TXR, held 51.0% by TIP, has a very significant investment in Roche Bobois S.A.
The Roche Bobois share was admitted to trading on the B segment on the Euronext in Paris on July 9, 2018. On IPO, TXR sold 345,632 shares at a price of Euro 20 per share and continues to hold an investment of 34.84% in Roche Bobois.
The group operates the largest chain worldwide of high-end design furniture products, with a network – direct and/or franchising – comprising over 300 sales points (of which approximately 110 owned) located in prestigious commercial areas, with a presence in the most important cities worldwide, including Europe, North, Central and South America, Africa, Asia and the Middle East.
In 2018 the Roche Bobois group's revenues, despite the effect on sales of the gilets jaunes protests in November and December, continued to grow, rising from Euro 248.5 million in 2017 to Euro 257.0 million in 2018 (IFRS-compliant figures), and the group rationalized and repositioned some of its stores, opening eleven new locations, of which eight franchise stores, while closing nine viewed as non-performing, of which eight franchise stores. Aggregated revenues (including franchise stores) amounted to Euro 458.6 million, down from Euro 480.1 million in 2017 (IFRScompliant figures), primarily due to the decline in sales by franchise stores.
TIP holding at December 31, 2018: 20.00% excluding the tracking shares related to specific investments
Asset Italia, incorporated in 2016 with the subscription, in addition to TIP, of approximately 30 family offices, with total capital funding of Euro 550 million, is an investment holding and gives shareholders the opportunity to choose for each proposal their individual investments and the receipt of tracking shares for the specific asset class related to the investment subscribed.
Asset Italia and TIP will combine by 2021.
TIP holds 20% of Asset Italia, and will undertake at least a pro-quota holding in all approved operations and provide support for the identification, selection, assessment and execution of investment projects.
Asset Italia held at December 31, 2018, through a vehicle company set up on an ad hoc basis, the following investments:
As a result of the aforementioned additional investment made in 2018, Asset Italia 1 owns both 49.9% of Alpiholding, which in turn owns 36.76% (40.5% on a fully diluted basis) of Alpitour, and a direct stake in Alpitour of 31.14% (34.31% on a fully diluted basis). TIP holds 35.81% of the tracking shares related to Asset Italia 1.
Alpitour enjoys a strong leadership position in Italy thanks to its strong presence in all sectors (tour operating off line and on line, aviation, hotels, travel agencies and incoming).
In 2018 (year ended October 31), the Alpitour group reported consolidated revenues of Euro 1,682 million (up 37.4%), an Ebitda of Euro 59.9 million (up 30% on 2017) and a net profit of approximately Euro 12.6 million.
Asset Italia 2, vehicle company of Asset Italia, has a stake of a little over 6% in Ampliter S.r.l., parent company of Amplifon S.p.A. TIP has a 20% stake in tracking shares of Asset Italia related to Asset Italia 2.
The results of Amplifon S.p.A. are illustrated in the section on investments in listed companies.
TIP holding at December 31, 2018: 23.41% Listed on the Italian Stock Exchange - STAR Segment.
The BE group is one of the leading Italian management consultancy operators for the banking and insurance sectors and for IT and back office design services.
In 2018, the BE Group reported value of production of Euro 150.2 million and an EBITDA of Euro 23.6 million, up 37% on 2017.
TIP holding at December 31, 2018: 30.20%
Clubitaly was incorporated in 2014, together with some entrepreneurial families and family office, two of which qualify as related parties pursuant to IAS 24, and acquired from Eatinvest S.r.l., a company controlled by the Farinetti family, 20% of Eataly S.r.l.., subsequently reducing to 19.74%. In 2018 Eataly S.r.l. was merged into its subsidiary Eataly Distribuzione S.r.l., in which Clubitaly S.p.A. retained a 19.74% interest.
Eataly, founded in 2003 by Oscar Farinetti, operates with a global reach in the distribution and marketing of Italian high-end gastronomic products integrating production, sales, catering and healthy living. The company represents a peculiar phenomenon - being the only Italian company in the food retail sector with a truly international vocation, as well as a symbol of Italian food and
of high quality Made in Italy products worldwide.
The Stockholm and Las Vegas stores were inaugurated in 2018. In 2019 a direct store will be opened in Toronto and a franchise store will be opened in Paris.
Eataly's preliminary 2018 results include revenues of approximately Euro 540 million and stable profitability on the previous year.
TIP holding at December 31, 2018: 24.62% (43.28% fully diluted)
Clubtre S.p.A. remains the largest shareholder in Prysmian S.p.A. (with the exception of a group of funds) with a holding of approximately 4%.
In July 2018, Prysmian completed a capital increase undertaken partly to fund the acquisition, for approximately USD 3 billion, of General Cable, the third group worldwide in the sector and leading operator in the North American market. Clubtre subscribed to its share and increased its holding with a further total disbursement of approximately Euro 30 million. These investments were funded through an increase in Clubtre's bank financing.
TIP also holds a direct investment in Prysmian, which at December 31, 2018 amounted to 0.654% of the share capital.
Prysmian is the world leader in the production of energy and telecommunication cables.
In 2018 Prysmian reported combined consolidated revenues (considering General Cable throughout 2018) of Euro 11,577 million, with organic growth of 3.3%. Full combined adjusted EBITDA (i.e., including General Cable throughout 2018) amounted to Euro 837 million, down from Euro 940 million in 2017 due to the negative foreign exchange effect and the provisions for the Western Link project. Management's guidance for 2019 calls for an EBITDA of between Euro 950 and 1,030 million and further strong progress in deleveraging.
TIP holding at December 31, 2018: 23.64%, 33.72% fully diluted
Gruppo IPG Holding S.p.A. holds 25,406,799 shares (equal to 24.09% of the share capital, net of treasury shares, and a relative majority) of Interpump Group S.p.A., world leader in the production of high-pressure pistons pumps, power take-offs (PTOs), distributors and hydraulic systems.
In 2018, Interpump Group reported consolidated revenues of Euro 1.279 billion, up 17.7% on 2017, an Ebitda of Euro 288.5 million, up 16.0% on Euro 248.6 million in 2017 and a net profit of Euro 173.2 million.
TIP holding at December 31, 2018: 29.29%
TIPO undertakes investments in Italian or overseas companies in the industrial or services sectors,
with revenues of between Euro 30 and 200 million, listed on a stock exchange or with a view to listing on a regulated equity market.
At December 31, 2018, TIPO held the following shareholdings:
TIPO holds directly 3.94% in the share capital of Beta Utensili S.p.A. and indirectly 30.87% through Betaclub S.r.l., company in turn controlled by TIPO with 58.417%. Beta Utensili is the leader in Italy in the distribution and production of high-quality professional utensils.
The preliminary results of the Beta Utensil Group for the year 2018 report consolidated revenues above Euro 161 million, up 17.6% on 2017 and an adjusted EBITDA of approximately Euro 30.7 million (up 4.4%) and a net profit of approximately Euro 12.8 million (up 47%).
The company continued therefore the strong growth forecast which also includes acquisitions aimed at strengthening its market positioning with expansion of the product range and distribution channels.
TIPO at December 31, 2018 held 14.29% (15.85% on a fully diluted basis) of iGuzzini Illuminazione S.p.A., the Italian leader - and among the leaders in Europe - in the design and production of high quality internal and external architectural lighting systems. The sectors of application include the lighting of historic buildings and cultural events, retail spaces, offices, residential buildings, hotels, streets and urban areas.
TIPO also holds 6.67% of Fimag S.p.A., a company which in addition to holding approximately 75% (84.15% on a fully diluted basis) in iGuzzini Illuminazione S.p.A., holds other assets.
As previously reported, iGuzzini Illuminazione was sold to the Fagerhult group in March 2019. Following the transaction, TIPO is also to withdraw from Fimag, receiving a share of the cash and Fagerhult shares deriving from the sale of iGuzzini.
TIPO holds 20% of Sant'Agata S.p.A., the parent of the Chiorino Group.
The Chiorino Group is a global leader in the manufacture of process and conveyor belts for industrial processes.
The preliminary results of the Chiorino Group for the year 2018 report consolidated revenues of approximately Euro 116.4 million (up 4.5%) and an Adjusted EBITDA of approximately Euro 26.1 million (up 1.7%).
TIP in addition holds:
a 29.97% stake in Gatti & Co. GmbH, a corporate finance boutique with headquarters in Frankfurt (Germany), primarily operating on the cross-border M&A market between Germany and Italy;
a 30% stake in Palazzari & Turries Ltd, a corporate finance boutique based in Hong Kong which has a long tradition of assisting numerous Italian companies in start-ups, joint ventures and corporate finance in China, building upon its extensive experience in China and Hong Kong.
TIP holding at December 31, 2018: 2.67% Listed on the Italian Stock Exchange - STAR Segment.
The Amplifon Group is world leader in the distribution and personalised application of hearing aids with around 11,000 sales points between direct and affiliates.
In 2018, the Amplifon Group reported revenues of Euro 1,362.2 million (up 7.6%), a recurring Ebitda of Euro 241.3 million (up 11% at like-for-like exchange rates) and a net profit of Euro 107.1 million (up 12.7%).
TIP holding at December 31, 2018: 22.72% Listed on the Alternative Investment Market (AIM) Italy
Digital Magics S.p.A. is the leading Italian incubator and accelerator of both digital and non-digital innovative start-ups and currently has 60 active investments and 7 completed exists.
Digital Magics designs and develops Open Innovation programmes to support Italian businesses in innovative processes, services and products thanks to innovative technologies, creating a strategic link with the digital start-ups; it also launched and is supporting the development, thanks to the active involvement of TIP, of the largest innovative hub in partnership with Talent Garden - the largest European co-working platform - WebWorking, WithFounders and Innogest.
TIP shareholding at December 31, 2018: 0.16% of the ordinary share capital Listed on the Italian Stock Exchange and the New York Stock Exchange
Ferrari is the famous manufacturer of high-end sports cars and racing cars. The company possess technologies and intangibles difficult to replicate; a unique combination of innovation, design, exclusivity and technology.
In 2018 Ferrari again reported record revenues of Euro 3.420 billion, an Adjusted EBITDA of Euro 1.114 billion, up 7.5% on the previous year and a net profit of Euro 787 million, up 46.5%.
TIP holding at December 31, 2018: 0.18% of the ordinary share capital Listed on the Italian Stock Exchange and the New York Stock Exchange
The Fiat Chrysler Automobiles NV group is the seventh largest car manufacturer in the world with the brands Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati and Ram.
In 2018, the FCA Group continued to report record results with consolidated revenues of Euro 115.410 billion, an Adjusted EBIT of Euro 7.284 billion, up 3.2% and an Adjusted Net Profit of Euro 5.047 billion, up 33.8% on 2017.
TIP holding at December 31, 2018: 1.87% 1.39% Listed on the Frankfurt Stock Exchange
Hugo Boss AG is market leader in the premium segment of the medium-high and high-end apparel market for men and women, with a diversified range from fashionable clothing to footwear and accessories.
Hugo Boss products are distributed in over 1,000 shops worldwide.
In 2018, the Hugo Boss Group continued its repositioning process and reported growing results. In 2018 the company reported consolidated revenues of Euro 2.796 billion (+4% at like-for-like exchange rates)), an Adjusted EBITDA of approximately Euro 489 million in line with the previous year and a net profit of approximately Euro 236 million, up 2% on the same period of 2017.
TIP holding at December 31, 2018: 0.84% Listed on the Italian Stock Exchange - STAR Segment
Moncler is a global leader in the apparel luxury segment.
In 2018 the Moncler Group reported consolidated revenues of Euro 1,420 million (+22%at likefor-like exchange rates) and an Adjusted EBITDA of Euro 500 million (+21.5%). The growth in revenues and earnings therefore continued in 2018, positioning Moncler at the top end of the most prestigious global brands, by margins.
TIP holding at December 31, 2018: 12.07%
Azimut Benetti S.p.A. is one of the most prestigious constructors of mega yachts worldwide. The company has ranked as "Global Order Book" leader for 19 consecutive years, which ranks the major global constructors of yachts and mega yachts of over 24 metres worldwide. It has 6 boatyards and one of the world's most comprehensive sales networks.
The latest accounts of the company report an increase in the value of production of 14.1% to approximately Euro 828.5 million, Adjusted EBITDA of approximately Euro 54.7 million (up 44.4% on 2017) and a small net loss.
TIP subscribed to a convertible loan of Euro 15 million issued by Furla S.p.A. that will automatically convert into Furla shares at the time of listing or, alternatively, at September 30, 2019. Furla is a global leader in the premium segment in the manufacture and marketing of high-end leather handbags and accessories, with an extremely personalised style.
TIP also subscribed a partially convertible bond of approximately Euro 8 million in one of the holdings with an investment in Octo Telematics, the principal global provider of telematic services for the insurance and automotive market.
In addition to the investments listed, TIP holds stakes in other listed and non-listed companies which in terms of amounts invested, are not considered significant.
The transactions with related parties are detailed in note 32 of the notes to the consolidated financial statements and in note 32 to the notes to the separate financial statements.
On March 11, 2019 TIP acquired the entire equity investment held by Gruppo Coin S.p.A. (a company indirectly controlled by BC Partners funds and in which interests were held by the management of OVS S.p.A.) in OVS, amounting to 40,485,898 shares accounting for 17.835% of the share capital for the price of Euro 1.85 per share and a total price of Euro 74,898,911.30. As a result of this acquisition, TIP, which had previously held an interest of approximately 4.912%, increased its total investment to 22.747%.
In February and March 2019, Talent Garden held a capital increase of Euro 23 million, in which TIP participated in the amount of Euro 5 million through StarTIP. As a result of the transaction, the interest in Talent Garden held directly by StarTIP came to 5.87%, whereas the total implicit interest held, considering also the indirect holdings, including the 45.39% interest held by Heroes and the 9.22% interest held by Digital Magics, amounted to 20.53%.
The sale of iGuzzini Illuminazione by TIPO was closed on March 7, 2019. As a result of this transaction, TIPO collected approximately Euro 45.1 million and received 1,781,739 Fagerhult shares. In April 2019 TIPO will withdraw from Fimag and collect an additional Euro 23.7 million and 935,689 Fagerhult shares.
In February 2019 TIPO entered into – on its own behalf or on behalf of a party to be designated
– a purchase agreement, subject to certain conditions precedent, governing an approximately 12% interest in Welcome Italia S.p.A., a company specialized in integrated telecommunications and cloud computing services, with a particular focus on SMEs.
Treasury share purchases continued in 2019.
TIP continues to examine investment opportunities to consolidate growth and affirm its role – through employing a unique business model in Italy - as an entrepreneurial partner and financial backer for outstanding companies willing to grow and/or resolve governance issues, always with a view to accelerating business development.
Given the nature of the activities of TIP it is not easy to forecast the performance for the current year. Repeating the results achieved by the TIP Group will depend partly on market performances and opportunities which will arise in the future.
The current pipeline, together with increased market volatility, could lead to further investments through TIP, Asset Italia, TIPO and StarTIP.
During the year, the Company did not carry out any research and development activity.
In relation to the principal Group risks and uncertainties, reference should be made to note 29 of the consolidated financial statements.
The treasury shares in portfolio at December 31, 2018 totalled 5,959,178, equal to 3.624% of the share capital. At the present date, treasury shares in portfolio total 6,256,431, equal to 3.805% of the share capital.
Dear Shareholders,
We invite you to approve the 2018 statutory financial statements of Tamburi Investment Partners S.p.A., as presented. Following the adoption of IFRS 9, the separate financial statements present a loss that does not reflect the capital gains of over Euro 51 million, which did not pass through the income statement, but were transferred directly in equity from an OCI reserve to retained earnings. Considering the foregoing, that the pro-forma separate income statement presents a profit of over Euro 8 million and that the retained earnings reserve in the separate financial statements amounts
to over Euro 170 million, we propose that the loss for the year be carried forward and that part of the retained earnings reserve be used, as follows:
| - | to the legal reserve | Euro 455,539 |
|---|---|---|
| - | to ordinary shares, a gross dividend of Euro 0,07 | |
| per share for a total of (*) | Euro 11,072,966.52 |
(*) Net of the 6,256,431 treasury shares held by the Company or any other shares held by the Company at the dividend coupon date, recording the amount necessary in the share premium reserve.
The Board of Directors The Chairman Giovanni Tamburi
Milan, March 14, 2019
| (in Euro) | 2018 | of which related parties |
2017 | of which related parties |
Note |
|---|---|---|---|---|---|
| Revenue from sales and services | 9,986,371 | 6,535,119 | 7,125,373 | 2,747,670 | 4 |
| Other revenue | 1,049,637 | 88,321 | |||
| Total revenue | 11,036,008 | 7,213,694 | |||
| Purchases, service and other costs | (2,979,278) | 158,600 | (2,018,266) | 147,895 | 5 |
| Personnel expense | (18,385,432) | (15,609,419) | 6 | ||
| Amortisation, depreciation & write-downs | (58,739) | (70,096) | |||
| Operating loss | (10,387,441) | (10,484,087) | |||
| Financial income | 19,419,199 | 52,518,451 | 7 | ||
| Financial charges | (7,802,272) | (6,394,134) | 7 | ||
| Profit before adjustments to investments | 1,229,486 | 35,640,230 | |||
| Share of profit of associated companies measured | |||||
| under the equity method | 29,214,745 | 35,916,552 | 8 | ||
| Profit before taxes | 30,444,231 | 71,556,782 | |||
| Current and deferred taxes | (609,186) | 530,166 | 9 | ||
| Profit | 29,835,045 | 72,086,948 | |||
| Profit attributable to the shareholders of the parent |
27,004,846 | 71,765,289 | |||
| Profit attributable to minority interests | 2,830,199 | 321,659 | |||
| Basic earnings per share | 0.17 | 0.47 | 23 | ||
| Diluted earnings per share | 0.17 | 0.46 | 23 | ||
| Number of shares in circulation | 158,482,489 | 157,343,795 |
(1) The 2018 income statement has been prepared in accordance with IFRS 9 and therefore does not include capital gains in the period on the sale of equity investments of Euro 96.7 million or impairments of Euro 40.7 million. The Directors' Report (page 4) presents the pro-forma income statement at like-for-like accounting standards for the year 2017, reporting a net profit of Euro 84.6 million.
| (in Euro) | 2018 | 2017 | Note |
|---|---|---|---|
| Profit | 29,835,045 | 72,086,948 | |
| Other comprehensive income items | |||
| Income through P&L | 22 | ||
| Increase/(decrease) in non-current AFS financial assets | 0 | 99,360,104 | |
| Unrealised profit/(loss) | 0 | 98,626,343 | |
| Tax effect | 0 | 733,761 | |
| Increase/(decrease) in associated companies measured | |||
| under the equity method | 628,635 | 13,152,169 | 13 |
| Unrealised profit | 638,100 | 14,112,337 | |
| Tax effect | (9,465) | (960,168) | |
| Increases/decreases in the value of current financial | |||
| assets measured at FVOCI | (2,145,462) | 521,097 | 18 |
| Unrealised profit/(loss) | (2,310,840) | 686,475 | |
| Tax effect | 165,378 | (165,378) | |
| Income/(loss) not through P&L | |||
| Increase/decrease investments measured at FVOCI | 31,106,546 | 0 | 12 |
| Profit/(loss) | 31,927,470 | 0 | |
| Tax effect | (820,924) | 0 | |
| Increase/(decrease) in associated companies measured | |||
| under the equity method | (21,487,444) | 0 | 13 |
| Profit/(loss) | (21,748,424) | 0 | |
| Tax effect | 260,980 | 0 | |
| Other components | (14,459) | (3,140) | |
| Total other comprehensive income items | 8,087,816 | 113,030,230 | |
| Total comprehensive income | 37,922,860 | 185,117,178 | |
| Total income attributable to the shareholders of the | |||
| parent | 17,543,424 | 182,178,049 | |
| Total income attributable to minority interests | 20,379,436 | 2,939,129 | |
| 23 | |||
|---|---|---|---|
| 231,264,083 | 23 | ||
| 24 | |||
| 33,932,034 | |||
| 666,351,766 | |||
| 25 | |||
| 676,633 | 21 | ||
| 100,538,208 | |||
| 26 | |||
| 27 | |||
| 28 | |||
| 115,553,651 | |||
| 216,091,859 | |||
| 882,443,625 | |||
| 288,641,136 27,004,846 632,419,732 306,489 99,555,086 604,462 97,538,156 579,175 16,831,858 |
70,900 | 374,654,100 98,456,635 71,765,289 628,107,996 19,383,598 647,491,594 307,384 129,129,224 251,142 129,687,750 410,991 79,797 39,012,505 331,362 13,816,718 53,571,576 183,259,326 830,750,920 |
(1) The reclassifications made to the statement of financial position at December 31, 2017 following the adoption of IFRS 9 are presented in note 2.
| Share | Share | Legal | Revaluation | FVOCI reserve FVOCI reserve | Treasury | Other | IFRS | Merger | Retained | Result | Equity | Net Equity | Result | Equity | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Capital | premium | reserve | reserve without reversal | with reversal | shares | reserves | reserve | surplus | earnings | for the period | shareholders | minorities | for period | |||
| reserve | AFS Financial to profit and loss to profit and loss | reserve | business | shareholders | of parent | minorities | ||||||||||
| assets | combination | of parent | ||||||||||||||
| At January 1, 2017 consolidated | 76,855,733 113,544,232 15,370,743 | 96,178,426 | (4,853,854) | 10,153,111 | (483,655) | 5,060,152 56,977,958 | 51,486,389 | 420,289,235 (17,359,512) | 34,146,981 437,076,704 | |||||||
| Change in fair value of financial assets | ||||||||||||||||
| available-for-sale | 96,649,033 | 93,601 | 96,742,634 2,617,470 | 99,360,104 | ||||||||||||
| Change in fair value of associated companies measure under equity method | 15,480,722 | (2,328,553) | 13,152,169 | 13,152,169 | ||||||||||||
| Change in fair value of current financial assets | 521,097 | 521,097 | 521,097 | |||||||||||||
| Employee benefits | (3,140) | (3,140) | (3,140) | |||||||||||||
| Otehr changes | 0 | 0 | ||||||||||||||
| Total other comprehensive income items | 112,650,852 | (2,331,693) | 110,412,760 2,617,470 | 113,030,230 | ||||||||||||
| Profit/(loss) 2017 | 71,765,289 | 71,765,289 | 321,659 72,086,948 | |||||||||||||
| Total comprehensive income | 112,650,852 | (2,331,693) | 71,765,289 | 182,178,049 | 321,659 185,117,178 | |||||||||||
| Allocation profit 2016 | 404 | 41,385,076 | (41,385,480) | 0 34,146,981 (34,146,981) | 0 | |||||||||||
| Other changes of associated companies measure under equity method | (7,691,108) | (7,691,108) | (7,691,108) | |||||||||||||
| Dividends distribution | (10,100,909) | (10,100,909) | (343,000) | (10,443,909) | ||||||||||||
| Effect of Stock option plan | 0 | 0 | ||||||||||||||
| Warrant exercise | 6,376,239 44,511,049 | 50,887,288 | 50,887,288 | |||||||||||||
| Acquisition of treasury shares | (7,866,609) | (7,866,609) | (7,866,609) | |||||||||||||
| Sale of treasury shares | 23,659 | 729,116 | (340,725) | 412,050 | 412,050 | |||||||||||
| At December 31, 2017 consolidated | 83,231,972 158,078,940 15,371,147 | 208,829,278 | (11,991,347) | (210,415) | (483,655) | 5,060,152 98,456,635 | 71,765,289 | 628,107,996 19,061,939 | 321,659 647,491,594 |
| Share | Share | Legal | Revaluation | FVOCI reserve FVOCI reserve | Treasury | Other | IFRS | Merger | Retained | Result | Equity | Net Equity | Result | Equity | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Capital | premium | reserve | reserve without reversal | with reversal | shares | reserves | reserve | surplus | earnings | for the period | shareholders | minorities | for period | |||
| reserve | AFS Financial to profit and loss to profit and loss | reserve | business | shareholders | of parent | minorities | ||||||||||
| assets | combination | of parent | ||||||||||||||
| At January 1, 2018 consolidated | 83,231,972 158,078,940 15,371,147 | 208,829,278 | (11,991,347) | (210,415) | (483,655) | 5,060,152 98,456,635 | 71,765,289 | 628,107,996 19,061,939 | 321,659 647,491,594 | |||||||
| Adjustments for IFRS 9 adoption | (208,829,278) | 208,308,181 | 521,097 | 17,800 | 17,800 | 17,800 | ||||||||||
| Equity adjusted after IFRS 9 adoption | 83,231,972 158,078,940 15,371,147 | 0 208,308,181 | 521,097 (11,991,347) | (210,415) | (483,655) | 5,060,152 98,474,435 | 71,765,289 | 628,125,796 19,061,939 | 321,659 647,509,394 | |||||||
| Change in fair value of investments | ||||||||||||||||
| measured at FVOCI | 13,638,100 | 13,638,100 17,468,446 | 31,106,546 | |||||||||||||
| Change in associated companies measured under the equity method | (21,487,444) | 547,843 | (20,939,601) | 80,791 | (20,858,810) | |||||||||||
| Change in fair value of current financial assets measured at FVOCI | (2,145,462) | (2,145,462) | (2,145,462) | |||||||||||||
| Employee benefits | (14,459) | (14,459) | (14,459) | |||||||||||||
| Total other comprehensive income items | (7,849,344) | (1,597,619) | (14,459) | (9,461,422) 17,549,237 | 8,087,815 | |||||||||||
| Profit/(loss) 2018 | 27,004,846 | 27,004,846 | 2,830,199 29,835,045 | |||||||||||||
| Total comprehensive income | (7,849,344) | (1,597,619) | (14,459) | 27,004,846 | 17,543,424 17,549,237 | 2,830,199 37,922,860 | ||||||||||
| Reversal of Fv reserve due to capital gain realised | (73,255,578) | 73,255,578 | 0 | 0 | ||||||||||||
| Change in reserves of associated companies measure under equity method | (3,064,753) | (3,064,753) | (3,064,753) | |||||||||||||
| Dividends distribution | (10,955,972) | (10,955,972) (5,831,000) | (16,786,972) | |||||||||||||
| Warrant exercise | 2,277,695 17,652,137 | 19,929,832 | 19,929,832 | |||||||||||||
| Allocation profit 2017 | 1,275,247 | 70,490,042 | (71,765,289) | 0 | 321,659 | (321,659) | 0 | |||||||||
| Acquisition of treasury shares | (19,187,485) | (19,187,485) | (19,187,485) | |||||||||||||
| Sale of treasury shares | (14,574) | 67,801 | (24,337) | 28,890 | 28,890 | |||||||||||
| At December 31, 2018 consolidated | 85,509,667 175,716,503 16,646,394 | 0 127,203,259 | (1,076,522) (31,111,031) | (3,313,964) | (483,655) | 5,060,152 231,264,083 | 27,004,846 | 632,419,732 31,101,835 | 2,830,199 666,351,766 |
| euro thousands | December 31, 2018 | December 31, 2017 | |
|---|---|---|---|
| A.- | OPENING NET CASH AND CASH EQUIVALENTS | (16,483) | (41,949) |
| B.- | CASH FLOW FROM OPERATING ACTIVITIES | ||
| Profit | 29,835 | 72,087 | |
| Amortisation & depreciation | 29 | 70 | |
| Share of loss of associated companies measured under the | |||
| equity method | (29,215) | (35,917) | |
| Financial income and charges | 0 | (44,198) | |
| Changes in "employee benefits" | (1) | 36 | |
| Interest on loans and bonds | 5,899 | 5,947 | |
| Change in deferred tax assets and liabilities | (38) | (982) | |
| 6,510 | (2,957) | ||
| Decrease/(increase) in trade receivables | (4,202) | 244 | |
| Decrease/(increase) in other current assets | (87) | 8 | |
| Decrease/(increase) in tax receivables | (256) | (266) | |
| Decrease/(increase) in financial receivables | 29 | (806) | |
| Decrease/(increase) in other current asset securities | (9,152) | (37,526) | |
| (Decrease)/increase in trade payables | 193 | (139) | |
| (Decrease)/increase in financial payables | (5,740) | (5,691) | |
| (Decrease)/increase in tax payables | 248 | (98) | |
| (Decrease)/increase in other current liabilities | 3,015 | (3,003) | |
| Cash flow from operating activities | (9,444) | (50,234) | |
| C.- | CASH FLOW FROM | ||
| INVESTMENTS IN FIXED ASSETS | |||
| Intangible and tangible assets | |||
| Investments / divestments | 29 | (21) | |
| Financial assets | |||
| Investments | (113,867) | (75,349) | |
| Disposals | 58,239 | 127,861 | |
| Capital gain on the disposal of financial assets measured at | |||
| FVOCI | 50,682 | 0 | |
| Cash flow from investing activities | (4,917) | 52,491 |
| euro thousands | |
|---|---|
euro thousands December 31, 2018 December 31, 2017
| Loans | |||
|---|---|---|---|
| New loans | 0 | 0 | |
| Repayment of loans | (5,000) | (5,000) | |
| Interest paid on loans and bonds | (6,233) | (4,780) | |
| Share capital | |||
| Share capital increase and capital contributions on account | 19,930 | 50,887 | |
| Changes from purchase/sale of treasury shares | (19,159) | (7,474) | |
| Payment of dividends | (16,787) | (10,444) | |
| Cash flow from financing activities | (27,249) | 23,209 | |
| E.- | NET CASH FLOW FOR THE YEAR | (41,611) | 25,466 |
| F. | CLOSING CASH AND CASH EQUIVALENTS | (58,094) | (16,483) |
| The breakdown of the net available liquidity was as follows: | |||
| Cash and cash equivalents | 1,813 | 3,284 | |
| Bank payables due within one year | (59,907) | (19,767) | |
| Closing cash and cash equivalents | (58,094) | (16,483) |
The TIP Group is an independent investment/merchant bank focused on Italian medium-sized companies, with a particular involvement in:
The parent company TIP was incorporated in Italy as a limited liability company and with registered office in Italy.
The company was listed in November 2005 and on December 20, 2010 Borsa Italiana S.p.A. assigned the STAR classification to TIP ordinary shares.
These consolidated financial statements at December 31, 2018 were approved by the Board of Directors on March 14, 2019, who authorised their publication.
The consolidated financial statements at December 31, 2018 were prepared in accordance with the going-concern concept and in accordance with International Financial Reporting Standards and International Accounting Standards (hereafter "IFRS", "IAS" or international accounting standards) issued by the International Accounting Standards Boards (IASB) and the relative interpretations of the International Financial Reporting Interpretations Committee (IFRIC), and adopted by the European Commission with Regulation No. 1725/2003 and subsequent modifications, in accordance with Regulation No. 1606/2002 of the European Parliament.
The consolidated financial statements in accordance with IAS1 are comprised of the income statement, the comprehensive income statement, the statement of financial position, the statement of changes in equity, the statement of cash flow and the explanatory notes, together with the Directors' Report. The financial statements were prepared in units of Euro, without decimal amounts.
The accounting policies and methods utilised for the preparation of these consolidated financial statements have changed from those utilised for the preparation of the consolidated financial statements for the year ended December 31, 2017, mainly due to application from January 1, 2018 of IFRS 9, as outlined in detail in the paragraph "new accounting standards".
The income statement, the comprehensive income statement and the statement of cash flows for the year 2017 and the statement of financial position at December 31, 2017 were utilised for comparative purposes. The individual balance sheet notes present for comparative purposes the
reclassified figures at January 1, 2018, as presented below, following the adoption of IFRS 9.
During the year, no special circumstances arose requiring recourse to the exceptions allowed under IAS 1.
The preparation of the consolidated financial statements at December 31, 2018 requires the formulation of valuations, estimates and assumptions which impact the application of the accounting principles and the amounts of the assets, liabilities, costs and revenues recorded in the financial statements. These estimates and relative assumptions are based on historical experience and other factors considered reasonable. However, it should be noted as these refer to estimates, the results obtained will not necessarily be the same as those represented. The estimates are used to value the provisions for risks on receivables, measurement at fair value of financial instruments, impairment tests, employee benefits and income taxes.
The application of the amendments to the existing accounting standards reported above do not have a significant impact on the Group consolidated financial statements, with the exception of those concerning IFRS 9 as illustrated below.
As illustrated previously, the TIP Group was required to adopt IFRS 9 for the preparation of the financial statements for periods which commence from January 1, 2018 and thereafter. This resulted in a change in the accounting policies and criteria used from those applied for the
preparation of the financial statements at December 31, 2017, with the consequent reclassifications and adjustments of the amounts in the financial statements.
In accordance with the transitory provisions of IFRS 9, the company has adopted the option not to adjust the 2017 figures presented for comparative purposes and therefore the adjustments in values calculated on the opening amounts at January 1, 2018 only impact upon the equity.
The effects from the transition to IFRS 9 on the statement of financial position and equity both in terms of value and classification are illustrated below.
| (in Euro) | December 31, 2017 | January 1, 2018 IFRS 9 |
Changes | Note |
|---|---|---|---|---|
| Non-current assets | ||||
| Property, Plant and Equipment | 124,017 | 124,017 | 0 | |
| Goodwill | 9,806,574 | 9,806,574 | 0 | |
| Other intangible assets | 2,307 | 2,307 | 0 | |
| AFS financial assets | 443,478,469 | 0 | (443,478,469) | 2.1 |
| Investments measured at FVOCI | 0 | 443,478,469 | 443,478,469 | 2.1 |
| Associated companies measured under the equity | ||||
| method | 297,133,792 | 297,133,792 | 0 | 2.2 |
| Financial receivables | 25,981,883 | 0 | (25,981,883) | 2.3 |
| Financial receivables measured at amortised cost | 0 | 6,460,702 | 6,460,702 | 2.3 |
| Financial assets measured at FVTPL | 0 | 20,117,473 | 20,117,473 | 2.3 |
| Derivative instruments | 0 | 0 | 0 | |
| Tax receivables | 398,082 | 398,082 | 0 | |
| Deferred tax assets | 0 | 0 | 0 | |
| Total non-current assets | 776,925,124 | 777,521,415 | 596,292 | |
| Current assets | ||||
| Trade receivables | 713,657 | 713,657 | 0 | 2.4 |
| Current financial receivables | 10,828,027 | 0 | (10,828,027) | 2.3 |
| Current financial receivables measured at | ||||
| amortised cost | 0 | 10,714,602 | 10,714,602 | 2.3 |
| Current financial assets | 630,687 | 0 | (630,687) | 2.3 |
| Derivative instruments | 0 | 171,240 | 171,240 | 2.3 |
| AFS financial assets | 37,764,710 | 0 | (37,764,710) | 2.5 |
| Current financial assets measured at FVOCI | 0 | 37,764,710 | 37,764,710 | 2.5 |
| Cash and cash equivalents | 3,283,840 | 3,283,840 | 0 | |
| Tax receivables | 339,956 | 339,956 | 0 | |
| Other current assets | 264,919 | 264,919 | 0 | |
| Total current assets | 53,825,796 | 53,252,924 | (572,872) | |
| Total assets | 830,750,920 | 830,774,340 | 23,420 |
| (in Euro) | December 31, 2017 | January 1, 2018 IFRS 9 |
Changes | Note |
|---|---|---|---|---|
| Equity | ||||
| Share capital | 83,231,972 | 83,231,972 | 0 | |
| Reserves | 374,654,100 | 374,654,100 | 0 | 2.6 |
| Retained earnings | 98,456,635 | 98,474,435 | 17,800 | 2.6 |
| Result of the parent | 71,765,289 | 71,765,289 | 0 | |
| Total equity attributable to the shareholders | ||||
| of the parent | 628,107,996 | 628,125,796 | 17,800 | |
| Equity attributable to minority interests | 19,383,598 | 19,383,598 | 0 | |
| Total Equity | 647,491,594 | 647,509,394 | 17,800 | |
| Non-current liabilities | ||||
| Post-employment benefits | 307,384 | 307,384 | 0 | |
| Financial payables | 129,129,224 | 129,129,224 | 0 | 2.7 |
| Deferred tax liabilities | 251,142 | 251,142 | 0 | |
| Total non-current liabilities | 129,687,750 | 129,687,750 | 0 | |
| Current liabilities | ||||
| Trade payables | 410,991 | 410,991 | 0 | |
| Current financial liabilities | 39,012,505 | 39,012,505 | 0 | 2.7 |
| Tax payables | 331,362 | 336,982 | 5,620 | |
| Other liabilities | 13,816,718 | 13,816,718 | 0 | |
| Total current liabilities | 53,571,576 | 53,577,196 | 5,620 | |
| Total liabilities | 183,259,326 | 183,264,946 | 5,620 | |
| Total equity and liabilities | 830,750,920 | 830,774,340 | 23,420 |
The total impact on the equity of the TIP Group at January 1, 2018 is summarised in the table below.
| $\sim$ | - | $\overline{\phantom{a}}$ | |
|---|---|---|---|
| Euro | ||
|---|---|---|
| Equity at December 31, 2017 IAS 39 | 647,491,594 | Note |
| Adjustments to financial assets measured at FVTPL | 23,420 | 2.3 |
| Tax effect of the adjustments | (5,620) | |
| Equity at January 1, 2018 IFRS 9 | 647,509,394 | |
For the investments in equity, comprising generally investments with shareholdings below 20% which are not held for trading, classified at December 31, 2017 as AFS financial assets, the company adopted the option within IFRS 9 of accounting for the changes in the fair value through Other Comprehensive Income (FVOCI), therefore with counter-entry in an equity reserve (alternative of accounting for changes in fair value through profit or loss). The FVOCI accounting of the investments in equity does not permit the recognition through profit or loss of the gains/losses realised on sale and the relative reversal from the FVOCI reserve in equity. Any impairments will also not be recorded through profit or loss. Adopting the FVOCI option only the dividends received from the investments will be recognised through profit or loss.
Following this reclassification, the value of the investments at December 31, 2017 did not change as according to IAS 39 the AFS financial assets were already measured at fair value. However, a reclassification was necessary from the equity reserve relating to the accumulated fair value changes, equal to Euro 119,049,027 net of the relative tax effect, from "financial assets held for sale revaluation reserve" to the FVOCI reserve (note 2.6).
The most significant effect of the adoption of IFRS 9 relating to this category of financial assets is, as already described, on the income statement following the non-recognition through profit or loss of the gains/losses realised on sale.
The adoption of IFRS 9 from January 1, 2018 resulted in the non-inclusion of financial income in the 2018 income statement of Euro 96,707,970 relating to the non-reversal of the gains/losses in the accumulated reserve until their realisation. The fair value changes matured in the period were recorded under "Increases/decreases in investments measured at FVOCI" of other comprehensive income without reversal through profit or loss, with counter-entry to the FVOCI reserves; at the time of sale, the cumulative gain was reversed from the FVOCI reserve directly to other equity reserves.
In addition, the IFRS 9 income statement does not include an adjustment to the value of investments of Euro 40,695,832 which, as an impairment, would have been recognised to the income statement as per IAS 39. This adjustment was however classified to other fair value changes recognised to the FVOCI reserve.
The adoption of IFRS 9 did not result in direct effects on the accounting of the investments in Associated companies measured under the equity method as per IAS 28. However, the application of IFRS 9 had effects on the preparation of the financial statements of Associated companies utilised for the preparation of the condensed consolidated year financial statements at December 31, 2018. In particular investee companies of the Associated companies are reclassified from AFS financial assets to investments measured at FVOCI as illustrated in the previous paragraph.
Similar to that described in note 2.1, this reclassification did not generate any impact on the value of the associated investments at December 31, 2017 but a different classification of the accumulated fair value changes, equal to Euro 89,259,157 net of the relative tax effect, which were reclassified from the "AFS financial assets revaluation reserve" to the FVOCI reserve.
The gains/losses realised on the investments held by Associated companies are no longer recognised in the income statement and therefore recognised by TIP as its share of the result in the associated companies measured under the equity method, but at the time of sale the cumulative gain is reversed from the FVOCI reserve directly to other equity reserves. The adoption of IFRS 9 from January 1, 2018 did not have any effects on the year 2018 as no investments measured at fair value held by associated companies were sold. In the comprehensive income statement, the "Increases/decreases in investments measured under the equity method" relating to the changes in the fair value of their investees are reclassified under as other comprehensive income without reversal through profit and loss.
In order to determine the recognition criterion applicable to financial assets other than investments in equity IFRS 9 requires an analysis through several steps.
Firstly, the expected contractual cash flows generated from the financial asset were subjected to a test (SPPI Test) which must prove that at the measurement date there are no other cash flows than the repayment of principal and interest potentially within the contract.
Subsequently the business model which the company adopts in relation to the financial assets was established on which the accounting criteria adopted depends.
The presence of any embedded derivatives within the principal financial asset was also verified.
Based on these analyses the company has identified the following financial asset categories as per IFRS 9.
These concern financial assets acquired by the company with the intention of maintaining them until maturity in order to receive the relative interest, and any sales are incidental events. The accounting criterion required by IFRS 9 for these financial assets is the amortised cost criterion, which does not differ from that currently applied. The current portion of these receivables is represented by interest or principal which will be received within one year.
This concerns financial assets, generally convertible loans, which generate cash flows which provide for the allocation of shares and/or include implied derivatives relating to the conversion clauses. Differing from IAS 39 applicable to the financial statements for the year ended December 31, 2017, IFRS 9 does not separate the embedded derivatives from the host instrument but provides for the allocation of these financial assets to the category FVTPL, i.e. financial assets measured at fair value through profit and loss.
Therefore, while previously as per IAS 39 in the case of accounting separation the non-derivative component of these instruments were recognised under the amortised cost method and the derivative component was separated and measured at fair value, these instruments were completely measured at fair value through profit or loss, including the changes in fair value related to market conditions of the other components of the instruments, for example interest rates.
The adjustments in value of the financial assets measured at FVTPL at January 1, 2018 amounts to Euro 23,420 before the tax effect.
The adoption of IFRS 9 from January 1, 2018 resulted in higher other financial income of Euro 28,821 in comparison to application of IAS 39.
The derivative instruments not embedded in other financial instruments are measured at fair value through profit or loss. This accounting treatment does not change from that already applied at December 31, 2017.
The specific nature of the receivables generated from the activities of TIP and the historical analysis of losses on receivables in recent years supports the conclusion that the adoption of IFRS 9 does not result in adjustments on the opening balances or significant subsequent impacts generated from impairment risks.
This consideration is also valid with reference to financial receivables held.
As illustrated in Note 2.3 the company carried out an SPPI test and established the business model for the various financial asset categories. The current financial assets measured at FVOCI are nonderivative financial assets comprising investments in bond securities which constitute temporary liquidity investments realised in accordance with the business model which provides for the receipt of the relative cash flows and the sale of the bonds on an opportunistic basis. The cash flows from these financial instruments comprise solely principal and interest.
The FVOCI measurement therefore involves the recognition in an equity reserve of the fair value changes in the securities until the date of sale recognising in the income statement interest income and any impairments. Differing from the accounting of investments in equity at the time of sale the gains/losses are recognised through profit or loss with reversal of the fair value changes through profit or loss previously recognised in the equity reserve.
As these assets already at December 31, 2017 were measured at fair value with changes recorded under equity, the reclassification required by IFRS 9 did not result in adjustments but only the corresponding reclassification of the accumulated fair value changes, amounting to Euro 521,097 net of the tax effect, from the "financial assets held for sale revaluation reserve" to the "FVOCI reserve with reversal through profit or loss".
The financial income in 2018 income statement did not change following the adoption of IFRS 9 for this category of financial assets.
As illustrated in the previous notes the introduction of IFRS 9 resulted in a reclassification between reserves as indicated below. The FVOCI reserve without reversal through profit or loss is reclassified to retained earnings when the accumulated fair value changes are realised, generally on divestment. Once reclassified under retained earnings the reserve becomes distributable.
| in Euro | Revaluation reserve AFS Financial assets |
FVOCI reserve without reversal to profit and loss |
FVOCI reserve with reversal to profit and loss |
Retained earnings |
Total group's net equity |
|---|---|---|---|---|---|
| At December 31, 2017 consolidated | 208,829,278 | 0 | 98,456,635 | 628,107,996 | |
| Change in fair value of AFS Financial assets | (119,049,024) | 119,049,024 | 0 | ||
| Other comprehensive income items of associated companies measured under the equity method |
(89,259,157) | 89,259,157 | 0 | ||
| Change in fair value of current financial assets | (521,097) | 521,097 | 0 | ||
| Adjustment in fair value of financial assets measured at FVTPL | 17,800 | 17,800 | |||
| At January 1, 2018 consolidated | 0 | 208,308,181 | 521,097 | 98,474,435 | 628,125,796 |
The analysis undertaken on the financial liabilities held concluded that the adoption of IFRS 9 has no effect on the accounting of the financial liabilities already recorded at amortised cost utilising the effective interest rate method.
Amendments to IFRS 9 are effective from periods beginning on, or after, January 1, 2019.
In December 2017, the IASB issued a series of annual amendments to IFRS 2015-2017 applicable from January 1, 2019, except for any deferments following endorsement of the standard by the European Union, not yet implemented at the date of these consolidated financial statements. The amendments concern:
IFRS 3 – Business Combinations, concerning the accounting treatment of the share previously held in the joint operation after obtaining control;
IFRS 11 – Joint Arrangements, concerning the accounting treatment of the share previously held in the joint operation after obtaining control;
IAS 12 – Income Tax, concerning the classification of tax effects related to the payment of dividends and
IAS 23 – Borrowing costs, concerning financial charges admissible for capitalisation.
In February 2018, the IASB issued the Amendment to IAS 19 which clarifies the application of IFRS 9 for long-term interests in subsidiaries or joint ventures included in investments in these entities for which the equity method is not applied. The Amendment to IAS 19 is applicable from January 1, 2019, except for any deferments following endorsement of the standard by the European Union, not yet implemented at the date of these consolidated financial statements.
On the basis of the analyses conducted, significant effects are not expected from the introduction of the standard on the Group's consolidated financial statements.
The consolidation scope includes the parent TIP - Tamburi Investment Partners S.p.A. and the companies over which it exercises direct or indirect control. An investor controls an entity in which an investment has been made when exposed to variable income streams or when possessing rights to such income streams based on the relationship with the entity, and at the same time has the capacity to affect such income steams through the exercise of its power. Subsidiaries are consolidated from the date control is effectively transferred to the Group, and cease to be consolidated from the date control is transferred outside the Group.
At December 31, 2018, the consolidation scope included the companies Clubdue S.r.l., StarTIP S.r.l. and TXR S.r.l..
| Reg. | Number of | Number of shares | |||
|---|---|---|---|---|---|
| Company Name | Office | Share capital | shares | held | % held |
| Clubdue S.r.l. | Milan | 10,000 | 10,000 | 10,000 | 100% |
| StarTIP S.r.l. | Milan | 50,000 | 50,000 | 50,000 | 100% |
| TXR S.r.l. | Milan | 100,000 | 100,000 | 51,000 | 51.0% |
The details of the subsidiaries were as follows:
The consolidation of the subsidiaries is made on the basis of the respective financial statements of the subsidiaries, adjusted where necessary to ensure uniform accounting policies with the Parent Company.
All inter-company balances and transactions, including any unrealised gains deriving from transactions between Group companies are fully eliminated. Unrealised losses are eliminated except when they represent a permanent impairment in value.
The most significant accounting policies adopted in the preparation of the consolidated financial statements at December 31, 2018 are disclosed below.
Property, plant & equipment are recognised at historical cost, including directly allocated accessory costs and those necessary for bringing the asset to the condition for which it was acquired. If major components of such tangible assets have different useful lives, such components are accounted for separately.
Tangible assets are presented net of accumulated depreciation and any losses in value, calculated as described below.
Depreciation is calculated on a straight-line basis according to the estimated useful life of the asset; useful life is reviewed annually. Any changes, where necessary, are recorded in accordance with future estimates; the main depreciation rates used are the following:
| - | furniture & fittings | 12% |
|---|---|---|
| - | equipment & plant | 15% |
| - | EDP | 20% |
| - | mobile telephones | 20% |
| - | equipment | 15% |
| - | Automobiles | 25% |
The book value of tangible assets is tested to ascertain possible losses in value if events or
circumstances indicate that the book value cannot be recovered. If there is an indication of this type and in the case where the carrying value exceeds the realisable value, the assets must be written down to their realisable value. The realisable value of the property, plant and equipment is the higher between the net sales price and the value in use. In defining the value of use, the expected future cash flows are discounted using a pre-tax discount rate that reflects the current market assessment of the time value of money and the specific risks of the activity. Losses in value are charged to the income statement under amortisation, depreciation and write-down costs. Such losses are restated when the reasons for their write-down no longer exist.
At the moment of the sale, or when there are no expected future economic benefits from the use of an asset, this is eliminated from the financial statements and any loss or gain (calculated as the difference between the disposal value and the book value) is recorded in the income statement in the year of the above-mentioned elimination.
Business combinations are recorded using the purchase method. Goodwill represents the surplus of acquisition cost compared to the purchaser's share of the identifiable net fair value of the assets and liabilities acquired, current and potential. After initial recognition, goodwill is reduced by any accumulated losses in value, calculated with the methods described below.
Goodwill deriving from acquisitions prior to January 1, 2004 are recorded at replacement cost, equal to the value recorded in the last financial statements prepared in accordance with the previous accounting standards (December 31, 2003). In the preparation of the opening financial statements in accordance with international accounting standards the acquisitions before January 1, 2004 were not reconsidered.
Goodwill is subject to a recoverability analysis conducted annually or at shorter intervals in case of events or changes that could result in possible losses in value. Any goodwill emerging at the acquisition date is allocated to each cash-generating unit which is expected to benefit from the synergies of the acquisition. Any loss in value is identified by means of valuations based on the ability of each cash-generating unit to produce cash flows for purposes of recovering the part of goodwill allocated to it; these valuations are conducted with the methods described in the section referring to tangible assets. If the recoverable value of the cash-generating unit is less than the attributed book value, the loss in value is recorded.
This loss is not restated if the reasons for the loss no longer exist.
Other intangible assets are recorded at cost, in accordance with the procedures indicated for tangible fixed assets.
The intangible assets with definite useful lives are recognised net of the relative accumulated amortisation and any permanent impairment in value, determined in the same manner as that for tangible assets.
The useful life is reviewed on an annual basis and any changes, where necessary, are made in accordance with future estimates.
The gains and losses deriving from the disposal of intangible assets are determined as the difference between the value of disposal and the carrying value of the asset and are recorded in the income statement at the moment of the disposal.
Associated companies are companies in which the Group exercises a significant influence on the financial and operating policies, although not having control. Significant influence is presumed when between 20% and 50% of voting rights is held in another entity.
Investments in associated companies are measured under the equity method and initially recorded at cost. The investments include the goodwill identified on acquisition, less any cumulative loss in value. The consolidated financial statements include the share of profits and losses of the investees recognised under the equity method, net of any adjustments necessary to align accounting principles and eliminate intercompany margins not realised, on the date in which significant influence commences or the joint control until the date such influence or control ceases. The adjustments necessary for the elimination of intercompany margins not realised are recorded in the account "share of profits/(loss) of associated companies measured under the equity method". When the share of the loss of an investment recognised under the equity method exceeds the book value of the investee, the investment is written-down and the share of the further losses are not recorded except in the cases where there is a legal or implied contractual obligation or where payments were made on behalf of the investee.
For the investments in equity, comprising investments with shareholdings below 20% which are not held for trading, according to the option under IFRS 9, they are recognised recording the changes in the fair value through Other Comprehensive Income (FVOCI) and therefore with counter-entry to an equity reserve. The FVOCI accounting of the investments in equity provides for, on sale, the reversal from the fair value reserve matured directly to other equity reserves. The dividends received from the investments are therefore recognised through profit or loss.
The fair value is identified in the case of listed investments with the stock exchange price at the balance sheet date and in the case of investments in non-listed companies utilising valuation techniques. These valuation techniques include the comparison with the values taken from similar recent operations and other valuation techniques which are substantially based on the analysis of the capacity of the investee to produce future cash flows, discounted to reflect the time value of money and the specific risks of the activities undertaken.
The investments in equity instruments which do not have a listed price on a regulated market and whose fair value cannot be reasonably valued, are measured at cost, reduced by any loss in value.
The choice between the above-mentioned methods is not optional, as these must be applied in hierarchal order: absolute priority is given to official prices available on active markets (effective market quotes – level 1) or for assets and liabilities measured based on valuation techniques which take into account observable market parameters (comparable approaches – level 2) and the lowest priority to assets and liability whose fair value is calculated based on valuation techniques which take as reference non-observable parameters on the market and therefore more discretional (market model – level 3).
These concern financial assets acquired by the company with the intention of maintaining them until maturity in order to receive the relative interest, and any sales are incidental events. These financial assets are valued at amortised cost.
The financial assets, generally convertible loans, which generate cash flows which provide for the allocation of shares and/or include implied derivatives relating to the conversion clauses, are measured at fair value with the relative changes recognised to the income statement.
The derivative instruments not embedded in other financial instruments are measured at fair value through profit or loss.
The current financial assets measured at FVOCI are non-derivative financial assets comprising investments in bond securities which constitute temporary liquidity investments realised in accordance with the business model which provides for the receipt of the relative cash flows and the sale of the bonds on an opportunistic basis. The cash flows from these financial instruments comprise solely principal and interest.
They are measured at FVOCI, recognising to an equity reserve the fair value changes in the securities until the date of sale and recording in the income statement interest income and any impairments. At the time of sale, the gains/losses are recognised through profit or loss with reversal of the fair value changes through profit or loss previously recognised in the equity reserve.
The purchases and sales of securities are recorded and cancelled at the settlement date.
Receivables are recorded at fair value and subsequently measured at amortised cost. They are adjustments for sums considered uncollectible.
Cash and cash equivalents include those values which are available on demand at short notice (within three months), certain in nature and with no payment expenses. Financial operations are recorded at the settlement date.
For the purposes of the Statement of Cash Flows, available liquidity is represented by cash and cash equivalents less bank overdrafts at the balance sheet date.
Trade payables are initially recorded at fair value and subsequently measured at amortised cost. The financial liabilities are recorded at amortised cost using the effective interest rate method.
The benefits guaranteed to employees paid on the termination of employment or thereafter through defined benefit plans are recognised in the period the right matures. The liability for defined benefit plans, net of any plan assets, is calculated on the basis of actuarial assumptions and is recorded by the accrual method consistent with the years of employment necessary to obtain such benefits. The liability is calculated by independent actuaries.
The Company recognises additional benefits to some employees through stock option plans. According to IFRS 2 – Share-based payments, these plans are a component of the remuneration of the beneficiaries and provide for application of the "equity settlement" method. Therefore, the relative cost is represented by the fair value of the stock options at the grant date, and is recognised in the income statement over the period between the grant date and the maturity date, and directly recorded under equity. On the exercise of the options by the beneficiaries with the transfer of treasury shares against the liquidity received, the stock option plan reserve is reversed for the portion attributable to the options exercised, and the treasury shares reserve is reversed based on the average cost of the shares transferred and the residual differential is recorded as the gains/loss on treasury shares traded with counter-entry in the share premium reserve, in accordance with the accounting policy adopted.
The treasury shares held by the parent company are recorded as a reduction from equity in the negative treasury shares reserve. The original cost of the treasury shares and the income deriving from any subsequent sale are recognised as equity movements, recording the differential as the gains/loss on treasury shares traded with counter-entry in the share premium reserve, in accordance with the accounting policy adopted
Revenues are recognised when the customer acquires control of the services provided and, consequently, when having the capacity to direct usage and obtain benefits. In the case in which a contract stipulates a portion of consideration dependent on the occurrence of future events, the estimate of the variable part is included in revenues only where such is considered highly probable. In the case of transactions concerning the simultaneous provision of a number of services, the sales price is allocated on the basis of the price which the company would apply to customers where such services included in the contract were sold individually. According to this type of operation, the revenues are recognised on the basis of the specific criteria indicated below:
the success fees which mature on the exercise of a significant deed are recorded under revenues when the significant deed is completed;
the variable revenue components for the provision of services other than success fees are recognised on the basis of the state of completion, to the extent that it is highly probable that subsequent to the resolution of the uncertainty related to the variable consideration a significant reduction of the amount of cumulative revenues recorded does not occur.
Where it is not possible to reliably determine the value of revenues, they are recognised up to the costs incurred which may reasonably be recovered.
The income and charges deriving from the sale of shares classified under current financial assets measured at FVOCI are recorded on an accruals basis at the operation valuation date, recording changes in fair value to the income statement which were previously recognised through equity.
Financial income and charges are recorded on an accruals basis on the interest matured on the net value of the relative financial assets and liabilities and utilising the effective interest rate.
The dividends are recorded in the year in which the right of the shareholders to receive the payment arises. The dividends received from investments valued under the equity method were recorded as a reduction in the value of the investments.
Current income taxes for the period are determined based on an estimate of the taxable assessable income and in accordance with current legislation. Deferred tax assets and liabilities are calculated on temporary differences between the values recorded in the financial statements and the corresponding values recognised for fiscal purposes. The recognition of deferred tax assets is made when their recovery is probable - that is when it is expected that there will be future assessable fiscal income sufficient to recover the asset. The recovery of the deferred tax asset is reviewed at each balance sheet date. Deferred tax liabilities are always recorded in accordance with the provisions of IAS 12.
The choices adopted by the Group relating to the presentation of the consolidated financial statements are illustrated below:
statement of financial position: in accordance with IAS 1, the assets and liabilities should be classified as current or non-current or, alternatively, according to the liquidity order. The Group chose the classification criteria of current and non-current;
statement of changes in consolidated equity, prepared in accordance with IAS 1;
The company undertakes investment banking and merchant banking activities. Top management activity in the above-mentioned areas, both at marketing contact level and institutional initiatives and direct involvement in the various deals, is highly integrated. In addition, execution activity is also organised with the objective to render the "on-call" commitment of advisory or equity professional staff more flexible.
In relation to this choice it is almost impossible to provide a clear representation of the separate financial economic impact of the different areas of activity, as the breakdown of the personnel expense of top management and other employees on the basis of a series of estimates related to parameters which could be subsequently superseded by the actual operational activities would result in an extremely high distortion of the level of profitability of the segments of activity.
In the present consolidated financial statements at December 31, 2018 only details on the performance of the "revenues from sales and services" component is provided, related to the sole activity of advisory, excluding therefore the account "other revenues".
| Euro | 2018 | 2017 |
|---|---|---|
| Revenue from sales and services | 9,986,371 | 7,125,373 |
| Total | 9,986,371 | 7,125,373 |
Revenues are highly dependent on the timing of success fee maturation, whose distribution varies throughout the year. Revenues include Euro 4 million associated with the accrued portion of variable income that it is highly probable will be paid by an associated company in view of the amount by which the value of the said associated company's investments exceeds the value of the shareholders' contributions.
The account comprises:
| Euro | 2018 | 2017 |
|---|---|---|
| 1. Services |
2,208,345 | 1,397,568 |
| 2. Rent, leasing and similar costs |
360,743 | 355,807 |
| 3. Other charges |
410,190 | 264,891 |
| Total | 2,979,278 | 2,018,266 |
Service costs mainly relate to professional and legal consultancy, general expenses and commercial expenses. The increase in the account is essentially due to the non-recurring costs incurred by the subsidiary TXR in relation to the listing of the investee Roche Bobois and the banking commissions on the sale of listed shares, classified in the previous year as a reduction in gains realised.
Other charges principally include non-deductible VAT.
| The account comprises: | ||
|---|---|---|
| Euro | 2018 | 2017 |
| Wages and salaries | 1,050,311 | 1,357,164 |
| Social security charges | 387,833 | 367,186 |
| Directors' fees | 16,883,067 | 13,819,654 |
| Post-employment benefits | 64,221 | 65,415 |
| Total | 18,385,432 | 15,609,419 |
The account "Wages and salaries" and "Directors' fees" include fixed and variable remuneration matured in the period. A pro-forma calculation was applied to the variable remuneration of the executive directors, as approved by the Board of Directors, on the proposal of the Remuneration Committee and with the opinion of Board of Statutory Auditors, according to the accounting standards in place until December 31, 2017.
"Post-employments benefits" are updated based on actuarial valuations, with the gains or losses recognised through equity.
| December 31, 2018 | December 31, 2017 | |
|---|---|---|
| White collar & apprentices | 11 | 11 |
| Managers | 1 | 1 |
| Executives | 3 | 3 |
| Total | 15 | 15 |
The Chairman/CEO and Vice Chairman/CEO are not employees either of TIP or of Group companies.
| The account comprises: | ||
|---|---|---|
| Euro | 2018 | 2017 |
| 1. Investment income |
10,285,931 | 48,046,101 |
| 2. Income from current financial assets measured at FVOCI |
2,327,049 | 404,910 |
| 3. Other income |
6,806,219 | 4,067,440 |
| Total financial income | 19,419,199 | 52,518,451 |
| 4. Interest and other financial charges |
(7,802,272) | (6,394,134) |
| Total financial charges | (7,802,272) | (6,394,134) |
| Net financial income | 11,616,927 | 46,124,317 |
| Euro | 2018 | 2017 |
|---|---|---|
| Gain on disposal of investments | 0 | 42,700,640 |
| Dividends | 10,285,931 | 5,239,455 |
| Other | 0 | 106,006 |
| Total | 10,285,931 | 48,046,101 |
In 2018 investment income concerns dividends received from the following investees (Euro):
| Roche Bobois S.A. | 5,754,381 |
|---|---|
| Hugo Boss AG | 2,591,700 |
| Moncler S.p.A. | 699,997 |
| Amplifon S.p.A. | 664,184 |
| Other | 575,669 |
| Total | 10,285,931 |
The 2017 figures are not comparable as in the previous year investment income included the gains realised on the disposal of the investments which according to IFRS 9 are no longer recognised to profit and loss. For an analysis of comparable results at like-for-like accounting standards, reference should be made to the Directors' Report.
This principally includes interest income accrued on securities and capital gains on the sale of bonds.
These principally include interest matured on financial receivables and fair value changes and gains on financial assets measured at FVTPL consisting of derivatives and convertible bond loans. These also comprise foreign exchange gains on securities of Euro 1,987,028.
| Euro | December 31, 2018 | December 31, 2017 |
|---|---|---|
| Interest on bonds | 5,057,009 | 5,048,258 |
| Other | 2,745,263 | 1,345,876 |
| Total | 7,802,272 | 6,394,134 |
"Interest on bonds" refers to that matured in favour of the subscribers of the 2014-2020 TIP Bond of Euro 100 million calculated in accordance with the amortised cost method applying the effective interest rate.
The "Other" account includes bank interest on loans, losses and other financial charges.
The account amounts to Euro 29,214,745 and includes Euro 13,397,036 associated with the share of the profits of the investee IPG Holding S.p.A.
For further details, reference should be made to note 13 "Investments in Associated companies measured under the equity method" and attachment 3.
The breakdown of income taxes is as follows:
| Euro | December 31, 2018 | December 31, 2017 |
|---|---|---|
| Current taxes | 513,758 | 449,900 |
| Deferred tax income | 488,724 | (1,088,026) |
| Deferred taxes | (393,296) | 107,960 |
| Total | 609,186 | (530,166) |
The reconciliation between the theoretical and actual tax charges is provided below:
| 2018 | 2017 | ||||
|---|---|---|---|---|---|
| Euro | Amount | Tax | Amount | Tax | |
| Profit before taxes | 30,444,231 | 71,566,500 | |||
| Theoretical tax charge | 24% | 7,306,615 | 24% | 17,175,960 | |
| Permanent decreases | |||||
| Dividends | (11,728,879) | (2,814,931) | (4,348,233) | (1,043,576) | |
| Exempt gains (*) | 0 | 0 | (36,427,424) | (8,742,582) | |
| Tax losses | 0 | 0 | 0 | 0 | |
| Other permanent decreases | (781,561) | (187,575) | (36,213,669) | (8,691,281) | |
| (3,002,506) | (18,477,439) | ||||
| Permanent increases | 6,865,896 | 1,647,815 | 3,880,317 | 931,276 | |
| Temporary differences | |||||
| Differences which will reverse in future years | (6,989,637) | (1,677,513) | 6,998,263 | 1,679,583 | |
| Reversal differences from previous years | (28,719,521) | (6,892,685) | (8,753,623) | (2,100,870) | |
| Total temporary differences | (8,570,198) | (421,287) | |||
| Losses not recognised | 0 | 2,689,174 | 645,402 | ||
| Losses carried forward | 0 | (5,367,546) | (1,288,211) | ||
| Total | (2.2470.644) | (5,976,241) | |||
| IRAP regional tax | 513,758 | 116,079 | |||
| Change in deferred tax assets/liabilities | 95,428 | 454,233 | |||
| Other changes | 0 | 333,821 | |||
| Total income taxes | 609,186 | (530,166) |
The company recognised directly to equity a decrease of Euro 330,062, principally concerning investments measured at FVOCI.
The following table illustrates the changes in the account:
| Euro | Other assets |
|---|---|
| NBV at December 31, 2016 | 170,589 |
| Increases | 19,714 |
| Decreases | 0 |
| Decrease depreciation provision | 1,281 |
| Depreciation | (67,567) |
| NBV at December 31, 2017 | 124,017 |
|---|---|
| Increases | 29,216 |
| Decreases | 0 |
| Decrease depreciation provision | 0 |
| Depreciation | (56,557) |
| NBV at December 31, 2018 | 96,676 |
The increase in "Other Assets" mainly refers to the purchase of EDP, furniture and fittings and mobile telephones.
"Goodwill" for Euro 9,806,574 refers to the incorporation of the subsidiary Tamburi & Associati S.p.A. into TIP S.p.A. in 2007.
In accordance with IAS 36 the value of goodwill, having an indefinite useful life, is not amortised, but subject to an impairment test, made at least annually.
The recoverable value is estimated based on the value in use, calculated using the following assumptions:
with the conclusion that the value attributed is appropriate and recoverable.
| Euro | Industrial patents and intellectual property rights |
Concessions, licences and trademarks |
Total |
|---|---|---|---|
| NBV at December 31, 2016 | 4,426 | 200 | 4,626 |
| Increases | 210 | 0 | 210 |
| Decreases | 0 | 0 | 0 |
| Amortisation | (2,423) | (106) | (2,529) |
| NBV at December 31, 2017 | 2,213 | 94 | 2,307 |
| Increases | 0 | 0 | 0 |
| Decreases | 0 | 0 | 0 |
| Amortisation | (2,143) | (39) | (2,182) |
| NBV at December 31, 2018 | 70 | 55 | 125 |
The following illustrates the changes in "Other intangible assets":
The account refers to minority investments in listed and non-listed companies.
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 |
|---|---|---|
| Investments in listed companies | 327,075,055 | 362,556,393 |
| Investments in non-listed companies | 50,557,220 | 80,922,076 |
| Total | 377,632,275 | 443,478,469 |
The changes in the investments measured at FVOCI are shown in Attachment 2.
The composition of the valuation methods of the non-current financial assets available for sale relating to investments in listed and non-listed companies is illustrated in the table below:
| Listed companies | Non-listed companies | |
|---|---|---|
| Method | (% of total) | (% of total) |
| Listed prices on active markets (level 1) | 100% | 0.0% |
| Valuation models based on market inputs (level 2) | 0.0% | 35.1% |
| Other valuation techniques (level 3) | 0.0% | 64.4% |
| Purchase cost | 0.0% | 0.5% |
| Total | 100.0% | 100.0% |
The investment in Digital Magics S.p.A., of which the TIP Group holds 22.72% through StarTIP, was not classified as an associated company, although in the presence of a holding above 20% and some indicators which would be associated with significant influence, as Digital Magics is unable to provide periodic financial information such as to permit the TIP Group recognition in accordance with the equity method.
The unavailability of such information represents a limitation in the exercise of significant influence and consequently it was considered appropriate to qualify the investment as measured at FVOCI.
At the end of 2018, as part of the listing completed in July 2018, Roche Bobois S.A., previously Furn Invest S.a.s., held 38.34% through TXR, made available the IFRS accounting data necessary to apply the equity method of accounting. This has removed the objective limitation upon the exercise of significant influence which required fair value measurement of the investment. This transfer from fair value measurement to the equity method resulted in the booking of the fair value increases cumulated until the date of transfer similarly to as would have occurred on divestment of the holding. Therefore, having ascertained significant influence, the cumulative fair value increase of approximately Euro 46 million, recognised to the FV reserve, was reversed to other equity reserves as per IFRS 9; the investment previously classified to "Investments valued at FVOIC" was reversed and the investment in Associated companies of a value of Euro 75,715,541, corresponding to the fair value on reclassification, was recognised in replacement. Subsequently, the book value of the investment was reduced to 68,802,900 following the sales made on IPO. These sales were executed at a price equal to the book value per share, without therefore any capital gain or loss. The value of the equity investment according to the equity method at December 31, 2018 was Euro 69,562,064.
The other investments in associated companies concern:
for Euro 92,872,562 the company Asset Italia S.p.A., investment holding which gives shareholders the opportunity to choose for each proposal their individual investments. The equity and results relating to Asset Italia 1 S.r.l., vehicle company for the investment in Alpitour, refer for 99% to the tracking shares issued in favour of the shareholders which subscribed to the initiative and for 1% to Asset Italia, or rather to all the ordinary shares. The increase for purchases concerns the subscription to the share capital increase of Asset Italia for an additional investment in Alpitour through Asset Italia 1, undertaken in July 2019. Following this investment, TIP's share of the shares tracking the investment in Alpitour at December 31, 2018 was equal to 35.81%. Similarly, the equity and results relating to Asset Italia 2 S.r.l., vehicle company for the investment in Ampliter, refer for 99% to the tracking shares issued in 2018 in favour of the shareholders which subscribed to the initiative and for 1% to Asset Italia, or rather to all the ordinary shares. TIP's share of the shares tracking the investment in Ampliter is equal to 20%. The investment in Alpitour is measured in Asset Italia using the equity method while the investment in Ampliter is measured at fair value;
for Euro 71,539,510 the company Clubitaly S.p.A., with a 19.74% stake in Eataly Distribuzione S.r.l. TIP holds 30.20% in the share capital of the company. The investment of Clubitaly in Eataly is measured at fair value in that the absence of the necessary financial information for the application of the equity method determines the current limited exercise of significant influence;
For the changes in the investments in associated companies' reference should be made to attachment 3.
| (14) Financial receivables measured at amortised cost | ||
|---|---|---|
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 |
| Financial receivables measured at amortised cost | 6,866,167 | 6,460,702 |
| Total | 6,866,167 | 6,460,702 |
Financial receivables calculated at amortised cost principally concern the loans issued to Tefindue S.p.A., which holds indirectly a shareholding in Octo Telematics S.p.A., international leader in the development and management of telecommunication systems and services for the automotive sector, mainly for the insurance market, for Euro 6,796,167.
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 |
|---|---|---|
| Financial assets measured at FVTPL | 20,395,297 | 20,117,473 |
| Total | 20,395,297 | 20,117,473 |
Assets designated at FVTPL primarily consist of the bond issued by Tefindue S.p.A. in the amount of Euro 3,081,603 and the Furla S.p.A. convertible bond, subscribed on September 30, 2016 in the amount of Euro 17,313,694.
| Euro | Dec. 31, 2018 | Dec. 31, 2017 |
|---|---|---|
| Trade receivables (before doubtful debt provision) | 5,083,915 | 881,446 |
| Doubtful debt provision | (167,809) | (167,809) |
| Total | 4,916,106 | 713,657 |
| Trade receivables beyond 12 months | 0 | 0 |
| Total beyond 12 months | 0 | 0 |
Changes in trade receivables is strictly related to the different revenue mix between success fees and service revenues. At December 31, 2018 these included approximately Euro 4 million associated with the accrued portion of variable income that it is highly probable will be paid by an associated company in view of the amount by which the value of the said associated company's investments exceeds the value of the shareholders' contributions.
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 |
|---|---|---|
| Current financial receivables measured at amortised cost | 9,519,333 | 10,714,602 |
| Total | 9,519,333 | 10,714,602 |
These include shareholders' loans granted to associated companies.
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 |
|---|---|---|
| Current financial assets measured at FVOCI | 45,227,977 | 37,764,710 |
| Total | 45,227,977 | 37,764,710 |
These concern non-derivative financial assets comprising investments in bonds for the temporary utilisation of liquidity.
The account represents the balance of banks deposits determined by the nominal value of the current accounts with credit institutions.
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 |
|---|---|---|
| Bank deposits | 1,809,877 | 3,279,543 |
| Cash and cash equivalents on hand | 6,380 | 4,297 |
| Total | 1,812,728 | 3,283,840 |
The composition of the net financial position at December 31, 2018 compared with the end of the previous year is illustrated in the table below.
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 | |
|---|---|---|---|
| A | Cash and cash equivalents | 1,812,728 | 3,283,840 |
| B | Current financial assets measured at FVOCI and derivative instruments |
45,236,977 | 37,935,950 |
| C | Current financial receivables | 9,519,333 | 10,714,602 |
| D | Liquidity (A+B+C) | 56,569,038 | 51,934,392 |
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 | |
|---|---|---|---|
| E | Financial payables | (99,555,086) | (129,129,224) |
| F | Current financial liabilities | (97,538,156) | (39,012,505) |
| G | Net financial position (D+E+F) | (140,524,204) | (116,207,337) |
The liquidity generated by the disinvestments and the exercise of the warrants in June 2018 was invested in new investments, the distribution of dividends and the TIP share buy-back plan.
Financial payables refer to the TIP 2014-2020 bond and a bank loan.
Current financial liabilities refer to bank payables and loans and interest related to the bond loan matured and still not paid.
The breakdown is as follows:
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 |
|---|---|---|
| Within one year | 567,819 | 339,956 |
| Beyond one year | 426,449 | 398,082 |
Current tax receivables include VAT, IRES and withholding taxes. The non-current component principally concerns withholding taxes and IRAP reimbursement request.
The breakdown of the account at December 31, 2018 and December 31, 2017 is detailed below:
| Assets | Liabilities | Net | ||||
|---|---|---|---|---|---|---|
| 31/12/2018 | 31/12/2017 | 31/12/2018 | 31/12/2017 | 31/12/2018 | 31/12/2017 | |
| Euro | ||||||
| Other intangible assets | 3,111 | 4,491 | 0 | 0 | 3,111 | 4,491 |
| Investments measured at FVOCI | ||||||
| and investments measured under | ||||||
| the equity method | 608 | 608 | (3,410,355) | (3,308,209) | (3,409,747) | (3,307,601) |
| Current financial assets | 0 | 0 | 0 | (165,378) | 0 | (165,378) |
| Other assets | 1,586,617 | 1,547,451 | (8,969) | (8,969) | 1,577,648 | 1,538,482 |
| Other liabilities | 1,152,355 | 1,678,864 | 0 | 0 | 1,152,355 | 1,678,864 |
| Total | 2,742,691 | 3,231,414 | (3,419,324) | (3,482,556) | (676,633) | (251,142) |
| Recorded | Recorded | |||
|---|---|---|---|---|
| Euro | December 31, 2017 | through P&L | through Equity | December 31, 2018 |
| Other intangible assets | 4,491 | (1,380) | 0 | 3,111 |
| Investments measured at FVOCI and | ||||
| investments valued under the equity | ||||
| method | (3,307,601) | 393,294 | (495,440) | (3,409,747) |
| Current financial assets | (165,378) | 0 | 165,378 | 0 |
| Other assets | 1,538,482 | 39,166 | 0 | 1,577,648 |
| Other liabilities | 1,678,864 | (526,509) | 0 | 1,152,355 |
| Total | (251,142) | (95,429) | (330,062) | (676,633) |
The share capital of TIP S.p.A. is composed of:
| Shares | number |
|---|---|
| ordinary shares | 164,441,667 |
| TOTAL | 164,441,667 |
On June 30, 2018, the third exercise period of the TIP S.p.A. 2015 - 2020 Warrants concluded, with the exercise of 4,380,183 warrants and a relative share capital increase of Euro 2,277,695.16 with the issue of 4,380,183 new ordinary TIP S.p.A. shares at a price of Euro 4.55 each, for a total value of Euro 19,929,832.65.
The share capital of TIP S.p.A. amounts therefore to Euro 85,509,666.84, represented by 164,441,667 ordinary shares.
The treasury shares in portfolio at December 31, 2018 totalled 5,959,178, equal to 3.624% of the share capital. The shares in circulation at December 31, 2018 therefore numbered 164,441,667.
| No. treasury shares at | No. of shares acquired | No. of shares sold in | No. treasury shares at |
|---|---|---|---|
| January 1, 2018 | in 2018 | 2018 | December 31, 2018 |
| 2,717,689 | 3,256,489 | 15,000 | 5,959,178 |
The following additional disclosures is provided on the equity at December 31, 2018.
It amounted to Euro 175,716,503 and was unchanged compared to the year ended December 31, 2017.
This amounts to Euro 16,646,394, increasing Euro 1,275,247 following the Shareholders' Meeting motion of April 19, 2018 with regard to the allocation of the 2017 net profit.
The positive reserve amounts to Euro 127,203,259. This concerns the fair value changes to investments in equity, net of the relative deferred tax effect. The gains realised on partial divestments of holdings which in application of IFRS 9 were not reversed to profit or loss were reclassified from the reserve to retained earnings. The change in the reserve also includes the declines in the fair values of several securities, which in accordance with IAS 39 would have been taken to the income statement as impairment losses.
For a breakdown of the fair value changes of investments in equity, reference should be made to attachment 2 and to note 12, in addition to attachment 3 and note 13.
For the changes in the year and breakdown of other equity items, reference should be made to the specific statement.
The negative reserve amounts to Euro 1,076,522. These principally concern the fair value changes of securities acquired as temporary uses of liquidity. The relative fair value was reversed to the income statement on the sale of the underlying security.
The negative reserve amounts to Euro 31,111,031. This is a non-distributable reserve.
They are negative for Euro 3,313,964 and for Euro 5,357,688 comprise the stock option plan reserve created following the allocation of options to employees and directors offset by the negative changes in the investments reserve measured under the equity method.
The merger surplus amounts to Euro 5,060,152 and derives from the incorporation of SecontipS.p.A. into TIP S.p.A. on January 1, 2011.
Retained earnings amount to Euro 231,264,083 and increased on December 31, 2017 following the allocation of the 2017 net profit and the reclassification from the fair value OCI reserve without reversal to profit or loss of the gains realised on partial divestments of holdings not recognised to profit or loss.
The reserve was negative and amounts to Euro 483,655, unchanged compared to December 31, 2017.
The following table shows reconciliation between Parent Company and Consolidated equity and net profit.
| Euro | Equity at January 1, 2018 |
2018 Result | Other changes |
Group equity at December 31, 2018 |
Minority interest equity |
Equity at December 31, 2018 |
|---|---|---|---|---|---|---|
| Parent Company Equity as per separate financial statements |
514,958,078 | (2,411,369) | (24,042,471) | 488,504,238 | 488,504,238 | |
| Eliminations in separate financial statements Carrying value and adjustments of |
(29,308,249) | (2,051,811) | 346,732 | (31,013,328) | (31,013,328) | |
| investments measured under the equity method |
136,844,183 | 28,622,465 | (24,423,748) | 141,042,900 | 141,042,900 | |
| Equity and result for the year (determined in accordance with uniform accounting principles) of the companies consolidated |
22,338,429 | 3,191,388 | 19,366,733 | 44,896,550 | 33,932,034 | 78,828,584 |
| Elimination carrying value of consolidated companies |
(16,724,445) | 345,827 | 6,059,643 | (11,010,629) | (11,010,629) | |
| Equity attributed to the shareholders of the parent from the consolidated financial |
||||||
| statements | 628,107,996 | 27,004,846 | (22,693,110) | 632,419,732 | 33,932,034 | 666,351,766 |
At December 31, 2018, the basic earnings per share – net profit divided by the average number of shares in circulation in the period taking into account treasury shares held – was Euro 0.17.
At December 31, 2018, the diluted earnings per share was Euro 0.17. This represents the net profit for the period divided by the number of ordinary shares in circulation at December 31, 2018, calculated taking into account the treasury shares held and considering any dilution effects generated from the shares servicing the stock option plan relating to the remaining warrants in circulation.
The financial payables for Euro 99,555,086 refer to the 2014-2020 TIP Bond approved by the Board of Directors on March 4, 2014, placed in April 2014, nominal value of Euro 100,000,000. The loan, with an initial rights date of April 14, 2014 and expiry date of April 14, 2020 was issued at par value and offers an annual coupon at the nominal gross fixed rate of 4.75%. The loan was recognised at amortised cost applying the effective interest rate which takes into account the transaction costs incurred for the issue of the loan of Euro 2,065,689; the loan provides for compliance with financial covenants on an annual basis.
In accordance with the application of international accounting standards required by Consob recommendation No. DEM 9017965 of February 6, 2009 and the Bank of Italy/Consob/Isvap No. 4 of March 4, 2010, we report that this account does not include any exposure related to covenants not complied with.
These amount to Euro 97,538,156 and principally comprise bank payables of the parent company. They include for Euro 29,945,676 the loan of a nominal value of Euro 40,000,000 with the following maturities:
The bond provides for compliance with annual financial covenants. At December 31, 2017, the portion of the loan due in 2019 had been classified among non-current financial payables.
In accordance with the application of international accounting standards required by Consob recommendation No. DEM 9017965 of February 6, 2009 and the Bank of Italy/Consob/Isvap No. 4 of March 4, 2010, we report that this account does not include any exposure related to covenants not complied with.
The breakdown of the account is as follows:
| Euro | December 31, 2018 | January 1, 2018 IFRS 9 |
|---|---|---|
| VAT | 36,829 | 166,136 |
| Withholding taxes | 144,667 | 165,226 |
| IRAP | 397,679 | 0 |
| Total | 579,175 | 331,362 |
The account mainly refers to emoluments for directors and employees.
| Euro | December 31, 2018 | January 1, 2018 IFRS 9 |
|---|---|---|
| Directors and employees | 16,572,201 | 13,526,859 |
| Social security institutions | 176,048 | 155,204 |
| Other | 83,609 | 134,655 |
| Total | 16,831,858 | 13,816,718 |
The Group, by nature of its activities, is exposed to various types of financial risks - in particular to the risk of changes in market prices of investments and, marginally, to the risk of interest rates.
The policies adopted by the Group for the management of the financial risk are illustrated below.
The Group is exposed to the interest rate risk relating to the value of the current financial assets represented by bonds and financial receivables. As these investments are mainly temporary uses of liquidity which may be liquidated quickly, it was not considered necessary to adopt specific hedges.
The Group, by nature of its activities, is exposed to the risk of changes in the value of the investments.
In relation to the listed investments at the present moment there is no efficient hedging instrument of a portfolio such as those with the characteristics of the Group.
Relating to non-listed companies, the risks related:
were not hedged through specific derivative instruments as not available. The Group attempts to minimise the risk – although within a merchant banking activity and therefore by definition risky – through a careful analysis of the companies and sectors on entry into the share capital, as well as through careful monitoring of the performance of the investee companies after entry in the share capital.
A sensitivity analysis is reported below which illustrates the effects on the balance sheet, of a hypothetical change in the fair value of the instruments held at December 31, 2018 of +/-5% compared to the comparative figures for 2017.
| Sensitivity Analysis | December 31, 2018 | December 31, 2017 | ||||
|---|---|---|---|---|---|---|
| thousands of Euro | -5.00% | Basic | +5.00% | -5.00% | Basic | +5.00% |
| Investments in listed companies | 310,721 | 327,075 | 343,429 | 344,428 | 362,556 | 380,684 |
| Investments in non-listed companies | 48,029 | 50,557 | 53,085 | 76,876 | 80,922 | 84,968 |
| Investments measured at FVOCI | 358,750 | 377,632 | 396,514 | 421,304 | 443,478 | 465,652 |
| Effect on equity | (18,882) | 18,882 | (22,174) | 22,174 |
The Group's exposure to the credit risk depends on the specific characteristics of each client as well as the type of activities undertaken and in any case at the preparation date of the present financial statements is not considered significant.
Before undertaking an assignment, careful analysis is undertaken on the credit reliability of the client.
The company approach in the management of liquidity guarantees, where possible, that there are always sufficient funds to meet current obligations.
At December 31, 2018, the Group had in place sufficient credit lines to cover the group's financial needs.
Directors provide for maintaining high levels of own capital in order to maintain a relationship of trust with investors, allowing for future development.
The parent company acquired treasury shares on the market on the basis of available prices.
The classification of financial instruments at fair value in accordance with IFRS 13 is determined based on the quality of the input sources used in the valuation, according to the following hierarchy:
▪ level 3: determination of fair value based on valuation models whose input is not based on observable market data ("unobservable inputs"). These refer for example to valuations of non-listed investments based on Discounted Cash Flow valuation methods.
In accordance with the disclosures required by IFRS 13, the types of financial instruments recorded in the financial statement at December 31, 2018 are illustrated below with indication of the accounting policies applied and, in the case of financial instruments measured at fair value, of the exposure to changes in fair value (income statement or equity), specifying also the hierarchical level of fair value attributed.
The final column of the following tables shows, where applicable, the fair value at the end of the period of the financial instrument.
| Accounting policies applied in accounts for financial instruments | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Type of instrument | fair value | |||||||||
| with change in fair value Total recorded through: |
Fair value hierarchy | Amortised | Invest. at | Book value at |
fair value at 31.12.2018 |
|||||
| (in thousands of Euro) | account economic |
result net Value |
fair value |
1 | 2 | 3 | cost | cost | 31/12/2018 | |
| Investments measured at FVOCI - listed companies - non-listed companies Financial assets 1 measured at FVOCI Financial receivables |
377,632 327,075 50,557 45,228 |
377,632 327,075 50,557 45,228 |
327,075 45,228 |
17,124 | 32,584 | 249 | 377,632 327,075 50,557 45,228 |
377,632 327,075 50,557 45,228 |
||
| measured at 1 amortised cost Financial assets measured at FVTPL Cash and cash 1 equivalents Non-current financial 2 payables Trade payables 1 Current financial 1 liabilities Other liabilities 1 |
20,395 | 20,395 | 20,395 | 1,813 99,555 306 97,538 16,832 |
16,385 | 16,385 20,395 1,813 99,555 306 97,538 16,832 |
16,385 20,395 1,813 102,519 306 97,538 16,832 |
Note
For these accounts the fair value was not calculated as their carrying value approximates this value.
The account includes the listed bond, for which a fair value was determined at December 31, 2018.
The following tables report the financial instruments of the parent company TIP directly and indirectly held at the end of the period, also through trust companies, communicated to the company by the members of the Board of Directors. The table also illustrates the financial instruments acquired, sold and held by the above parties in 2018.
| Members of the Board of Directors | |||||||
|---|---|---|---|---|---|---|---|
| Name | Office | No. of shares held at December 31, 2017 |
No. of shares acquired in 2018 |
No. of shares allocated from exercise of TIP warrant |
No. of shares sold in 2018 |
No. of shares held at December 31, 2018 |
|
| Giovanni Tamburi(1) | Chair. & CEO | 12,077,151 | 250,000 | 12,327,151 | |||
| Alessandra Gritti | Vice Chair. & CEO |
2,031,943 | 350 | 2,032,293 | |||
| Cesare d'Amico(2) | Vice Chairman | 21,315,000 | 300,000 | 3,300,000 | 18,315,000 | ||
| Claudio Berretti | Dir. & Gen. | 1,758,580 | 1,758,580 | ||||
| Alberto Capponi | Director | 0 | 0 | ||||
| Paolo d'Amico(3) | Director | 20,250,000 | 100,000 | 3,300,000 | 17,050,000 | ||
| Giuseppe Ferrero(4) | Director | 3,346,301 | 166,666 | 3,179,635 | |||
| Manuela Mezzetti | Director | 74,627 | 74,627 | 0 | |||
| Daniela Palestra | Director | 0 | 0 | ||||
| No of warrants |
No. of | No. of | No. of | No of warrants |
|||
| Name | Office | held at December 31, 2017 |
warrants assigned in 2018 |
warrants sold in 2018 |
warrants exercised in 2018 |
held at December 31, 2018 |
|
| Giovanni Tamburi(1) | Chair. & CEO | 1,368,180 | 250,000 | 1,118,180 | |||
| Alessandra Gritti | Vice Chair. & CEO |
358,485 | 358,485 | ||||
| Cesare d'Amico(2) | Vice Chairman | 2,000,000 | 40,000 | 2,040,000 | |||
| Claudio Berretti | Dir. & Gen. Manager |
0 | 0 | ||||
| Alberto Capponi | Director | 0 | 0 | ||||
| Paolo d'Amico(3) | Director | 2,000,000 | 2,000,000 | ||||
| Giuseppe Ferrero(4) | Director | 0 | 0 | ||||
| Manuela Mezzetti | Director | 0 | 0 |
(1)Giovanni Tamburi holds his investment in the share capital of TIP in part directly in his own name and in part indirectly through Lippiuno S.r.l., a company in which he holds 87.26% of the share capital.
(2)Cesare d'Amico holds his investment in the share capital of TIP directly through d'Amico Società di Navigazione S.p.A. (a company in which he holds directly and indirectly 50% of the share capital), through the company Fi.Pa. Finanziaria di Partecipazione S.p.A. (a company which directly holds 54% of the share capital) and through family members.
(3)Paolo d'Amico holds his investment in the share capital of TIP directly and through d'Amico Società di Navigazione S.p.A., a company in which he holds (directly) a 50% shareholding.
(4)Giuseppe Ferrero holds his investment in the share capital of TIP directly and through family members.
The members of the Board of Statutory Auditors do not hold shares or warrants of the company.
The table below reports the monetary remuneration, expressed in Euro, to the members of the boards in 2018.
| TIP office | Fees |
|---|---|
| 31/12/2018 | |
| Directors | 16,883,067 |
| Statutory Auditors | 67,050 |
The remuneration of the Supervisory Board is Euro 4,000.
TIP also signed two insurance policies with D&O and q professional TPL in favour of the Directors and Statutory Auditors of TIP, of the subsidiaries, as well as the investees companies in which TIP has a Board representative and the General Managers and coverage for damage to third parties in the exercise of their functions.
The table reports the transactions with related parties during the year outlined according to the amounts, type and counterparties.
| Party | Type | Value/Balance at December 31, 2018 |
Value/Balance at December 31, 2017 |
|---|---|---|---|
| Asset Italia S.p.A. | Revenue | 1,000,268 | 1,001,533 |
| Asset Italia S.p.A. | Trade receivables | 250,000 | 250,000 |
| Asset Italia 1 S.r.l. | Revenue | 820,000 | - |
| Betaclub S.r.l. | Revenue | 25,136 | 25,000 |
| Betaclub S.r.l. | Trade receivables | 25,043 | 25,000 |
| BE S.p.A. | Revenues | 60,000 | 60,000 |
| BE S.p.A. | Trade receivables | 15,000 | 15,000 |
| ClubTre S.p.A. | Revenue | 50,000 | 50,000 |
| ClubTre S.p.A. | Trade receivables | 50,000 | 50,000 |
| Clubtre S.p.A. | Financial receivables | 9,088,864 | - |
| Clubitaly S.p.A. | Revenue | 30,000 | 30,000 |
| Clubitaly S.p.A. | Trade receivables | 30,000 | 30,000 |
| Clubitaly S.p.A. | Financial receivables | 430,469 | 324,010 |
| Gruppo IPG Holding S.p.A. | Revenue | 30,239 | 30,131 |
| Gruppo IPG Holding S.p.A. | Trade receivables | 30,239 | 30,131 |
| TIP-pre IPO S.p.A. | Revenue | 4,500,665 | 501,087 |
| TIP-pre IPO S.p.A. | Trade receivables | 4,125,036 | 125,000 |
| Services provided to companies related to the Board of Directors | Revenue | 16,000 | 1,045,540 |
| Services provided to companies related to the Board of Directors | Trade receivables | 16,000 | 74,820 |
| Services received from companies related to the Board of Directors | Costs (services received) |
7,863,909 | 6,462,681 |
| Services received from companies related to the Board of Directors | Trade payables | 7,226,209 | 5,844,584 |
| Giovanni Tamburi | Revenues (services provided) |
2,811 | 4,379 |
| Giovanni Tamburi | Trade receivables | 2,811 | - |
The services offered for all the above listed parties were undertaken at contractual terms and conditions in line with the market.
With reference to the subsequent events, reference should be made to the Directors' Report.
The TIP Group adopts the provisions of the new version of the Self-Governance Code published by Borsa Italiana as its corporate governance model.
The Corporate Governance and Ownership Structure Report for the year is approved by the Board of Directors and published annually on the website of the company www.tipspa.it, in the "Corporate Governance" section.
For the Board of Directors The Chairman Giovanni Tamburi
Milan, March 14, 2019
of the administrative and accounting procedures for the preparation of the consolidated financial statements for the year ended December 31, 2018.
No significant aspect emerged concerning the above.
The Chief Executive Officer The Executive Officer
Milan, March 14, 2019
| Company | Restered office | share | number of | Total | number of | % | share of | book value | |
|---|---|---|---|---|---|---|---|---|---|
| capital | shares | net equity | shares held | held | net equity | in accounts | |||
| Associates | |||||||||
| Asset Italia S.p.A. (1) | Milan | ||||||||
| via Pontaccio, 10 | Euro | 3,425,114 | 102,425,114 | 263,205,046 | 20,788,639 | 20.00 | 52,641,009 | 92,872,562 | |
| Be Think, Solve, Execute S.p.A. (1) | Rome | ||||||||
| viale dell'Esperanto, 71 | Euro | 27,109,165 | 134,897,272 | 53,053,000 | 31,582,225 | 23.41 | 12,420,798 | 17,460,151 | |
| Clubitaly S.r.l. (1) | Milan | ||||||||
| via Pontaccio, 10 | Euro | 103,300 | 103,300 | 238,167,895 | 31,197 | 30.20 | 71,926,704 | 71,539,510 | |
| Clubtre S.p.A. (2) | Milan | ||||||||
| via Pontaccio, 10 | Euro | 120,000 | 120,000 | 36,543,871 | 29,544 | 24.62 | 8,997,101 | 36,570,573 | |
| Gatti & Co. GmbH (1) | Frankfurt am Main | ||||||||
| Bockenheimer Landstr. 51-53 | Euro | 35,700 | 35,700 | 658,349 | 10,700 | 30.00 | 197,505 | 362,224 | |
| Gruppo IPG Holding S.p.A. (1) ** | Milan | ||||||||
| via Appiani, 12 | Euro | 142,438 | 284,875 | 71,685,588 | 67,348 | 33.72 | 24,172,380 | 68,740,666 | |
| Palazzari & Turries Limited (3) | Hong Kong | ||||||||
| 88 Queen's Road | Euro | 300,000 | 300,000 | 689,659 | 90,000 | 30.00 | 206,898 | 373,261 | |
| Roche Bobois S.A. (4) | Paris | ||||||||
| 18 Rue De Lyon | Euro | 49,376,078 | 9,874,125 | 130,971,390 | 3,440,145 | 34.84 | 45,630,432 | 69,562,064 | |
| TIP-Pre Ipo S.p.A. (1) | Milan | ||||||||
| via Pontaccio, 10 | Euro | 329,999 | 3,299,988 | 162,918,797 | 966,424 | 29.29 | 47,711,881 | 47,333,740 |
(1) Value relating to the net equity updated at 31.12.2018.
(2) Value relating to the net equity updated at 31.12.2018. The fully diluted % held is 43,28%
(3) Share Capital in Hong Kong dollars. Value relating to the net equity updated at 31.12.2017. The net equity was converted at the EUR/HKD rate of 0,1135 (31.12.2018).
(4) Value relating to the net equity updated at 31.12.2017.
* Tracking shares not included
** The fully diluted % held is 33,72%
| Balance at 1.1.2018 | increases | decreases | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in Euro | No. of | historic | fair value | increase | write-down | book value acquisition or | reclass. | fair value | decreases | fair value | reversal | book value | |
| shares | cost | adjustments | (decrease) | P&L | fair value | subscription | increase | decreases | fair value | 31/12/2018 | |||
| Non-listed companies | |||||||||||||
| Azimut Benetti S.p.A. | 737,725 | 38,990,000 | 0 | 38,990,000 | (7,312,229) | 31,677,771 | |||||||
| Buzzoole Plc. | 0 | 3,338,810 | 3,338,810 | ||||||||||
| Roche Bobois | 0 | 29,689,345 | 9,943,310 | 39,632,655 | 36,082,885 | (29,689,345) | (46,026,195) | 0 | |||||
| Heroes Sr.l. | 706,673 | 706,673 | 1,800,000 | 10,507,718 | 13,014,391 | ||||||||
| Talent Garden S.p.A. | 6,250 | 500,000 | 500,000 | 2,500 | 868,500 | 1,371,000 | |||||||
| Other equity instr. & other minor | 1,835,873 | 151,707 | (894,832) | 1,092,748 | 62,500 | 0 | 0 | 1,155,248 | |||||
| Total non-listed companies | 32,025,218 | 9,943,310 | 858,380 | (894,832) | 80,922,076 | 5,203,810 | 0 | 47,459,103 | (29,689,345) | (7,312,229) | (46,026,195) | 50,557,220 | |
| Listed companies | |||||||||||||
| Alkemy S.p.A. | 425,000 | 284,672 | 4,993,828 | 5,278,500 | (824,500) | 4,454,000 | |||||||
| Amplifon S.p.A. | 6,038,036 | 34,884,370 | 55,444,896 | (12,800,884) | 77,528,382 | 7,306,024 | 84,834,406 | ||||||
| Digital Magics S.p.A. | 1,684,719 | 4,925,191 | 3,370,385 | 4,996,857 | 13,292,433 | (2,476,537) | 10,815,896 | ||||||
| Ferrari N.V. USD | 304,738 | 14,673,848 | 11,965,635 | 26,639,483 | (173,853) | 26,465,630 | |||||||
| Fiat Chrysler Automobiles N.V. | 0 | 16,625,205 | 3,995,042 | (9,497,387) | 11,122,860 | 3,239,242 | (7,127,818) | (7,234,284) | 0 | ||||
| Fiat Chrysler Automobiles N.V. USD | 1,576,000 | 17,656,453 | 13,238,521 | 30,894,974 | (4,258,487) | (1,184,033) | (5,549,432) | 19,903,022 | |||||
| Hugo Boss AG | 1,315,000 | 77,681,983 | (13,741,712) | 5,439,049 | 69,379,320 | 20,896,485 | (19,371,005) | 70,904,800 | |||||
| Moncler S.p.A. | 2,150,000 | 92,368,016 | 46,873,007 | (21,923,951) | 117,317,072 | 19,555,628 | (36,775,141) | (37,898,059) | 62,199,500 | ||||
| OVS S.p.A. | 7,800,000 | 0 | 12,268,197 | (3,734,997) | 8,533,200 | ||||||||
| Prysmian S.p.A. | 1,754,000 | 0 | 36,922,403 | (7,332,423) | 29,589,980 | ||||||||
| Servizi Italia S.p.A. | 548,432 | 2,938,289 | 1,977,770 | 0 | (1,241,564) | 3,674,495 | (1,963,387) | 1,711,108 | |||||
| Telesia S.p.A. | 230,000 | (75,000) | 300,000 | 225,000 | 1,492,000 | (695,800) | 1,021,200 | ||||||
| Other listed companies | 15,375,538 | 927,491 | 106,006 | (9,205,161) | 7,203,874 | 13,456 | (575,017) | 6,642,314 | |||||
| Total listed companies | 277,128,893 | 124,260,707 | (28,386,482) | (10,446,725) | 362,556,393 | 71,579,085 | 0 | 30,114,350 | (48,161,446) | (38,331,552) | (50,681,775) | 327,075,057 | |
| Total investments | 309,154,111 | 134,204,017 | (27,528,102) | (11,341,557) | 443,478,469 | 76,782,895 | 0 | 77,573,453 | (77,850,791) | (45,643,781) | (96,707,970) | 377,632,277 |
| Book value | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in Euro | No. Of | historic | write | revaluations | share of | shareholder | increase | increase | increase | at 31.12.2017 |
| shares | cost | backs | (write-downs) | results as per | loan capital | (decrease) | (decrease) | (decrease) | ||
| equity method | advance | other reserves | fair value reserve | |||||||
| Asset Italia S.p.A. | 20.000.000 (1) | 49,900,000 | 355,949 | 298,494 | 353,332 | 50,907,775 | ||||
| Be Think, Solve, Execute S.p.A. | 31,582,225 | 16,596,460 | 1,742,159 | 110,973 | (871,681) | (371,156) | 17,206,755 | |||
| ClubItaly S.r.l. | 31,197 | 37,436,400 | (181,956) | (226,982) | 26,197,191 | 63,224,653 | ||||
| Clubtre S.p.A. | 29,544 | 17,500 | 27,433,234 | 41,948,846 | (47,871,387) | 53,684,704 | 75,212,897 | |||
| Gruppo IPG Holding S.r.l. | 67,348 | 40,589,688 | 5,010,117 | (7,597,729) | 35,362,517 | (10,555,332) | (2,472,406) | (1,016,945) | 59,319,910 | |
| Roche Bobois S.A. | 3,440,145 | 0 | 0 | |||||||
| Tip-Pre Ipo S.p.A. | 942,854 | 21,571,436 | 6,395,181 | 2,511,327 | 30,477,944 | |||||
| Other associated companies | 500,000 | 46,218 | 237,640 | 783,858 | ||||||
| Total | 166,611,484 | 5,010,117 | (7,733,467) | 71,299,698 | 41,948,846 | (10,145,865) | (51,215,474) | 81,358,453 | 297,133,792 |
(1) Tracking shares not included
| Book value | Valore di bilancio | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| in Euro | at 31.12.2017 | share of | increase | increase | increase | increase | (write-down) | al 31.12.2018 | |
| purchases | results as per | (decrease) | (decrease) | (decrease) | (decrease) | write-back | |||
| equity method | FVOCI reserve | FVOCI reserve | other reserves | ||||||
| without reversal to P/L with reversal to P/L | |||||||||
| Asset Italia S.p.A. | 50,907,775 | 36,297,441 | 4,066,745 | 1,497,820 | 102,781 | 92,872,562 | |||
| Be Think, Solve, Execute S.p.A. | 17,206,755 | 1,280,629 | (91,713) | (303,877) | (631,643) | 17,460,151 | |||
| ClubItaly S.r.l. | 63,224,653 | 8,414,398 | (99,541) | 71,539,510 | |||||
| Clubtre S.p.A. | 75,212,897 | 1,059,495 | (38,619,031) | (1,082,788) | 36,570,573 | ||||
| Gruppo IPG Holding S.r.l. | 59,319,910 | 13,397,036 | 519,052 | (3,045,427) | (1,449,905) | 68,740,666 | |||
| Roche Bobois S.A. | 0 | 75,715,541 | 592,280 | 166,884 | (6,912,641) | 69,562,064 | |||
| Tip-Pre Ipo S.p.A. | 30,477,944 | 787,072 | 452,535 | 15,472,328 | (58,904) | 202,764 | 47,333,740 | ||
| Other associated companies | 783,858 | (48,373) | 735,485 | ||||||
| Total | 297,133,792 | 112,800,054 | 29,214,745 | (21,748,424) | 638,100 | (3,146,540) | (10,076,977) | 0 | 404,814,751 |
| Key Audit Matters | Auditing procedures performed in response to key audit matters |
|---|---|
| Investments in associated companies measured under the equity method |
Our audit activities included, among other, the following procedures: |
| Note 13 to the consolidated financial statements "Associated companies measured under the equity method" Investments in associated companies measured under the equity method amount to Euro 404.815 thousand as of 31 December 2018 and represent 46% of total asset. In accordance with the applicable financial reporting standards, investments in associated companies are initially recognised at cost and subsequently measured under the equity method. We considered the measurement of investments in associated companies a key matter in consideration of the materiality of the amounts, the presence of significant estimates and the complexity of the contractual arrangements governing those investments. |
understanding and evaluation of the ٠ effectiveness of internal control, with specific reference to the procedures applied by management to classify and measure investments in associated companies: analysis of contracts relating to ٠ investments and the arrangements with the other investors in the same entity, in order to verify the correct qualification of investments and consequent appropriateness of the valuation method adopted; examination of accounting documents ٠ (financial statements, trial balances, reporting packages) of associated companies at the valuation date, in order to verify the consistency of the valuation with the net equity method; |
| examination of the method used to ٠ measure investments in associates whose assets mainly include investments in minority interests measured at fair value. In detail, where the investments held were in unlisted entities, our work was performed through meetings and discussion with management and involved, among other things, understanding of the valuation models adopted, discussion of the key assumptions used and evaluation of their reasonableness, as well as verification of the mathematical accuracy of the calculation models; our verifications were performed with the support of |
| valuation experts belonging to the PwC network: verification of the absence of possible impairment indicators referred to individual investments. Finally, we verified the adequacy of disclosures in the notes to the consolidated financial statements. |
|
|---|---|
| Investments measured at fair value through other comprehensive income ("FVOCI") Note 12 to the consolidated financial statements "Investments measured at FVOCI" The Group holds significant equity investments in entities listed on regulated markets and in unlisted entities, for an amount of Euro 377.632 thousand as of 31 December 2018, which represents 43% of the total asset. Those investments, reported under non-current assets, are measured at fair value through other comprehensive income ("FVOCI"). The fair value of investments in listed entities is based on the share prices. For unlisted entities, fair value is calculated using the valuation techniques considered most appropriate by management. We considered the measurement of investments at FVOCI a key matter in our audit of the Group's consolidated financial statements because of the materiality of the balance, the complexity of the valuation models used for investments in unlisted entities and the use of inputs that are not always observable. |
Our audit activities included, among other, the following procedures: ٠ understanding and evaluation of the effectiveness of internal control, with specific reference to the procedures applied by management to classify and measure at FVOCI investments in listed and unlisted entities: analysis of contracts relating to the main ٠ investments and of arrangements with the other investors in the same entity, in order to verify the correct qualification of investments and consequent appropriateness of the valuation method adopted; verification of share prices for listed ٠ entities: ٠ for unlisted entities, verification of fair value through an analysis of the valuation techniques applied by management and of the reasonableness of inputs used and underlying assumptions. Also, verification of the mathematical accuracy of the calculation models. Our verifications were performed with the support of valuation experts belonging to the PwC network. Finally, we verified the adequacy of disclosures in the notes to the consolidated financial statements. |
In accordance with Article 149 duodecies of the Consob Issuer's Regulations the information in relation to the fees paid to the audit firm PricewaterhouseCoopers S.p.A. and to its related network is reported in the table below:
The amounts reported in the table, relating to the year 2018, are those contractually agreed, including any inflation rises (not including travel, contributions and V.A.T.). In accordance with the regulation, fees paid to any secondary auditors or their respective networks are not included.
| Type of service | Service provider | Recipient of service | Fees (Euro) |
|---|---|---|---|
| • Separate Financial statements • Consolidated Financial statements • Limited audit procedures on the half-year financial statements TOTAL TIP |
PWC S.p.A. | Tamburi Investment Partners S.p.A. |
44,000 5,000 16,000 65,000 |
| • Audit appointments in subsidiaries/Associated companies |
PWC S.p.A. | 55,000 | |
| TOTAL | 125,000 |
The amounts above do not include expenses and Consob contributions.
2018 Separate financial statements of tamburi investment partners s.p.a.
| (in Euro) | 2018 | of which related parties |
2017 | of which related parties |
Note |
|---|---|---|---|---|---|
| Revenue from sales and services | 10,001,371 | 6,550,119 | 7,140,373 | 2,763,012 | 4 |
| Other revenue | 1,048,781 | 88,663 | |||
| Total revenue | 11,050,152 | 7,229,036 | |||
| Purchases, service and other costs | (2,238,071) | 158,600 | (1,920,284) | 147.8954 | 5 |
| Personnel expense | (18,385,432) | (15,609,419) | 6 | ||
| Amortisation, depreciation & write-downs | (58,739) | (70,096) | |||
| Operating Loss | (9,632,090) | (10,370,763) | |||
| Financial income | 15,341,273 | 2,060,258 | 84,615,666 | 28,934,496 | 7 |
| Financial charges | (7,768,063) | (6,457,594) | 7 | ||
| Profit/(loss) before taxes | (2,058,880) | 67,787,309 | |||
| Current and deferred taxes | (352,489) | (772,616) | 8 | ||
| Profit/(loss) | (2,411,369) | 67,014,693 |
(1) The 2018 income statement has been prepared in accordance with IFRS 9 and therefore does not include capital gains in the period on the sale of equity investments of Euro 51.7 million or write-downs of Euro 40.7 million. Note 2 (page 80) presents the pro-forma income statement at like-for-like accounting standards for the year 2017, reporting a net profit of Euro 7.9 million.
| (in Euro) | 2018 | 2017 | Note |
|---|---|---|---|
| Profit/(loss) | (2,411,369) | 67,014,693 | |
| Other comprehensive income items | |||
| Income through P&L | 22 | ||
| Increase/(decrease) in non-current AFS financial | |||
| assets | 0 | 89,978,691 | |
| Unrealised profit/(loss) | 0 | 89,116,869 | |
| Tax effect | 0 | 861,822 | |
| Increase/(decrease) AFS current financial assets | 0 | 521,097 | |
| Unrealised profit/(loss) | 0 | 686,475 | |
| Tax effect | 0 | (165,378) | |
| Increases/decreases in the value of current financial | |||
| assets measured at FVOCI | (2,145,462) | 0 | 20 |
| Unrealised profit/(loss) | (2,310,840) | 0 | |
| Tax effect | 165,378 | 0 | |
| Income not through P&L | |||
| Employee benefits | (14,459) | (3,140) | |
| Increase/decrease investments measured at FVOCI | (11,715,999) | 0 | 12 |
| Profit/(loss) | (11,395,095) | 0 | |
| Tax effect | (320,904) | 0 | |
| Other components | |||
| Total other comprehensive income items | 13,875,920 | 90,496,648 | |
| Total comprehensive income | (16,287,289) | 157,511,341 |
| December 31, | of which related |
December 31, | of which related |
||
|---|---|---|---|---|---|
| (in Euro) | 2018 | parties | 2017 (1) | parties | Note |
| Non-current assets | |||||
| Property, Plant and Equipment | 96,676 | 124,017 | 9 | ||
| Goodwill | 9,806,574 | 9,806,574 | 10 | ||
| Other intangible assets | 125 | 2,307 | |||
| AFS financial assets | 0 | 384,241,501 | |||
| Investments in subsidiaries | 11,010,629 | 16,733,802 | 11 | ||
| Investments in associated companies | 225,223,105 | 189,588,497 | 13 | ||
| Investments measured at FVOCI | 343,452,773 | 0 | 12 | ||
| Financial receivables | 0 | 43,347,219 | 17,760,555 | ||
| Financial receivables measured at amortised cost | 31,260,124 | 24,463,957 | 0 | 14 | |
| Financial assets measured at FVTPL | 20,395,298 | 0 | 15 | ||
| Tax receivables | 310,338 | 398,082 | 16 | ||
| Deferred tax assets | 0 | 0 | 17 | ||
| Total non-current assets | 641,555,642 | 644,241,999 | |||
| Current assets | |||||
| Trade receivables | 4,931,106 | 4,559,129 | 728,999 | 618,604 | 18 |
| Current financial receivables | 0 | 10,828,027 | 324,010 | ||
| Current financial receivables measured at amortised | |||||
| cost | 9,519,333 | 9,519,333 | 0 | 19 | |
| Current financial assets | 0 | 609,687 | |||
| Derivative instruments | 0 | 0 | |||
| AFS financial assets | 0 | 37,764,710 | |||
| Current financial assets measured at FVOCI | 45,227,977 | 0 | 20 | ||
| Cash and cash equivalents | 1,563,814 | 3,151,412 | 21 | ||
| Tax receivables | 683,898 | 338,190 | 16 | ||
| Other current assets | 351,410 | 264,671 | |||
| Total current assets | 62,277,538 | 53,685,696 | |||
| Total assets | 703,833,180 | 697,927,695 | |||
| Equity | |||||
| Share capital | 85,509,667 | 83,231,972 | 22 | ||
| Reserves | 235,115,967 | 300,297,060 | 23 | ||
| Retained earnings | 170,289,973 | 64,414,353 | 23 | ||
| Profit/(loss) | (2,411,369) | 67,014,693 | |||
| Total Equity | 488,504,238 | 514,958,078 | |||
| Non-current liabilities | |||||
| Post-employment benefits | 306,489 | 307,384 | 24 | ||
| Financial payables | 99,555,085 | 129,129,224 | 25 | ||
| Deferred tax liabilities | 0 | 0 | 17 | ||
| Total non-current liabilities | 99,861,574 | 129,436,608 | |||
| Current liabilities | |||||
| Trade payables | 555,929 | 70,900 | 376,523 | 79,797 | |
| Current financial liabilities | 97,538,156 | 39,012,505 | 26 | ||
| Tax liabilities | 542,288 | 329,922 | 27 | ||
| Other liabilities | 16,830,995 | 13,814,059 | 28 | ||
| Total current liabilities | 115,467,368 | 53,533,009 | |||
| Total liabilities | 215,328,942 | 182,969,617 | |||
| Total equity and liabilities | 703,833,180 | 697,925,695 |
(1) The reclassifications made to the statement of financial position at December 31, 2017 following the adoption of IFRS 9 are presented in note 2.
(in Euro)
| Share Capital |
Share premium |
Legal reserve |
Revaluation reserve |
FVOCI reserve without reversal |
FVOCI reserve with reversal |
Treasury | Other shares reserves |
IFRS reserve |
Merger surplus |
Retained earnings |
Result for the period |
Equity | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| reserve | AFS Financial assets |
to profit and loss | to profit and loss | reserve | business combination |
||||||||
| At January 1, 2017 separate | 76,855,733 | 121,086,033 15,370,743 | 30,746,460 | 0 | 0 (4,853,854) 5,817,639 (483,655) 5,060,152 33,443,468 | 41,072,198 | 324,114,917 | ||||||
| Change in fair value of financial assets | |||||||||||||
| available-for-sale | 89,978,691 | 89,978,691 | |||||||||||
| Change in fair value of current financial assets | 521,097 | 521,097 | |||||||||||
| Employee benefits | (3,140) | (3,140) | |||||||||||
| Total other comprehensive income items | 90,499,788 | (3,140) | 90,496,648 | ||||||||||
| Profit/(loss) 2017 | 67,014,693 | 67,014,693 | |||||||||||
| Total comprehensive income | 90,499,788 | (3,140) | 67,014,693 | 157,511,341 | |||||||||
| Allocation profit 2016 | 404 | 30,970,885 | (30,971,289) | 0 | |||||||||
| Dividends distribution | (10,100,909) | (10,100,909) | |||||||||||
| Effect of Stock option plan | 0 | ||||||||||||
| Warrant exercise | 6,376,239 | 44,511,049 | 50,887,288 | ||||||||||
| Acquisition of treasury shares | 23,659 | 729,116 (340,725) | 412,050 | ||||||||||
| Sale of treasury shares | (7,866,609) | (7,866,609) | |||||||||||
| At December 31, 2017 separate | 83,231,972 | 165,620,741 15,371,147 | 121,246,248 | 0 | 0 (11,991,347) (343,865) | (483,655) 5,060,152 64,414,353 | 67,014,693 | 514,958,078 |
| At January 1, 2018 separate | 83,231,972 | 165,620,741 15,371,147 | 121,246,248 | (11,991,347) 5,473,774 (483,655) 5,060,152 64,414,353 | 67,014,693 | 514,958,078 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Adjustments for IFRS 9 adoption | (121,246,248) | 120,725,151 | 521,097 | 18,184 | 18,184 | ||||||
| Equity adjusted after IFRS 9 adoption | 83,231,972 | 165,620,741 15,371,147 | 0 | 120,725,151 | 521,097 (11,991,347) 5,473,774 (483,655) 5,060,152 64,432,537 | 67,014,693 | 514,976,262 | ||||
| Change in fair value of investments | |||||||||||
| measured at FVOCI | (11,715,999) | (11,715,999) | |||||||||
| Change in fair value of current financial assets measured at FVOCI | (2,145,462) | (2,145,462) | |||||||||
| Employee benefits | (14,459) | (14,459) | |||||||||
| Total other comprehensive income items | (11,715,999) | (2,145,462) | (13,875,920) | ||||||||
| Profit/(loss) 2018 | (2,411,369) | (2,411,369) | |||||||||
| Total comprehensive income | (11,715,999) | (2,145,462) | (2,411,369) | (16,287,289) | |||||||
| Reversal of Fv reserve due to capital gain realised | (51,073,962) | 51,073,962 | 0 | ||||||||
| Allocation profit 2017 | 1,275,247 | 65,739,446 | (67,014,693) | 0 | |||||||
| Dividends distribution | (10,955,972) | (10,955,972) | |||||||||
| Warrant exercise | 2,277,695 | 17,652,137 | 19,929,832 | ||||||||
| Acquisition of treasury shares | (14,574) | 67,801 (24,337) | 28,890 | ||||||||
| Sale of treasury shares | (19,187,485) | (19,187,485) | |||||||||
| At December 31, 2018 separate | 85,509,667 | 183,258,304 16,646,394 | 0 | 57,935,190 | (1,624,365) (31,111,031) 5,434,978 (483,655) 5,060,152 170,289,973 | (2,411,369) | 488,504,238 |
| euro thousands | 2018 | 2017 |
|---|---|---|
| OPENING NET CASH AND CASH EQUIVALENTS | (16,616) | (42,040) |
| CASH FLOW FROM OPERATING ACTIVITIES | ||
| Profit/(loss) | (2,411) | 67,015 |
| Amortisation & Depreciation | 29 | 70 |
| Write-downs/(revaluation) of investments | 0 | 0 |
| Write-downs/(revaluation) of current financial assets (doubtful | ||
| debts) | 0 | 0 |
| Financial income and charges | 0 | (76,925) |
| Changes in "employee benefits" | (1) | 36 |
| Stock option charges | 0 | 0 |
| Interest on loans and bonds | 5,899 | 5,947 |
| Change in deferred tax assets and liabilities | (295) | 322 |
| 3,222 | (3,535) | |
| Decrease/(increase) in trade receivables | (4,202) | 270 |
| Decrease/(increase) in other current assets | (87) | 8 |
| Decrease/(increase) in tax receivables | (258) | (291) |
| Decrease/(increase) in financial receivables | (7,000) | (817) |
| Decrease/(increase) in other current asset securities | (9,164) | (37,506) |
| (Decrease)/increase in trade payables | 179 | (164) |
| (Decrease)/increase in financial payables | (5,740) | (5,691) |
| (Decrease)/increase in tax payables | 212 | (99) |
| (Decrease)/increase in other current liabilities | 3,017 | (3,004) |
| Cash flow from operating activities | (19,822) | (50,829) |
| Intangible and tangible assets | ||
|---|---|---|
| Investments / divestments | (29) | (21) |
| Financial assets | ||
| Dividends from subsidiary and Associated companies | 5,723 | 12,585 |
| Investments | (107,172) | (75,059) |
| Divestments | 100,930 | 115,198 |
| Cash flow from investing activities | (489) | 52,703 |
| euro thousands | 2018 | 2017 | |
|---|---|---|---|
| D.- | CASH FLOW FROM | ||
| FINANCING ACTIVITIES | |||
| Loans | |||
| New loans | 0 | 0 | |
| Repayment of loans | (5,000) | (5,000) | |
| Interest paid on loans and bonds | (6,233) | (4,782) | |
| Share capital | |||
| Share capital increase and capital contributions on account | 19,930 | 50,887 | |
| Changes from purchase/sale of treasury shares | (19,159) | (7,454) | |
| Payment of dividends | (10,955) | (10,101) | |
| Change in reserves | 0 | 0 | |
| Cash flow from financing activities | (21,417) | 23,550 | |
| E.- | NET CASH FLOW FOR THE YEAR | (41,727) | 25,424 |
| F. | CLOSING CASH AND CASH EQUIVALENTS | (58,343) | (16,616) |
| The breakdown of the net available liquidity was as follows: | |||
| Cash and cash equivalents | 1,564 | 3,151 | |
| Bank payables due within one year | (59,907) | (19,767) | |
| Closing cash and cash equivalents | (58,343) | (16,616) |
TIP is an independent investment/merchant bank focused principally on Italian medium-sized companies, with a particular involvement in:
The company was incorporated in Italy as a limited liability company and with registered office in Italy.
The company was listed in November 2005 and on December 20, 2010 Borsa Italiana S.p.A. assigned the STAR classification to TIP S.p.A. ordinary shares.
The present financial statements at December 31, 2018 were prepared in accordance with IFRS as separate financial statements as presented together with the consolidated financial statements at the same date. These financial statements were approved by the Board of Directors on March 14, 2019, who authorised their publication.
The financial statements at December 31, 2018 were prepared in accordance with the goingconcern concept and in accordance with International Financial Reporting Standards and International Accounting Standards (hereafter "IFRS", "IAS" or international accounting standards) issued by the International Accounting Standards Boards (IASB) and the relative interpretations of the International Financial Reporting Interpretations Committee (IFRIC), and adopted by the European Commission with Regulation No. 1725/2003 and subsequent modifications, in accordance with Regulation No. 1606/2002 of the European Parliament.
The financial statements in accordance with IAS1 are comprised of the income statement, the statement of comprehensive income, the statement of financial position, the change in equity, the statement of cash flows and the explanatory notes, together with the Directors' Report. The financial statements were prepared in units of Euro, without decimal amounts.
The accounting policies and methods utilized for the preparation of these separate financial statements, for which reference should be made to the consolidated financial statements except for that indicated below, have not changed from those utilized for the preparation of the financial statements for the year ended December 31, 2017, except as outlined in the paragraph "new accounting standards". The investments in subsidiaries and Associated companies are measured under the cost method adjusted for any loss in value.
The periodic test of the Investments, required by IAS 36, is made in the presence of an "Impairment indicator" which may consider that the assets have incurred a loss in value.
Associated companies are companies in which the Group exercises a significant influence on the financial and operating policies, although not having control. Significant influence is presumed when between 20% and 50% of voting rights is held in another entity.
The income statement, the comprehensive income statement and the statement of cash flows for the year 2017 were utilised for comparative purposes. The individual balance sheet notes present for comparative purposes the reclassified figures at January 1, 2018, as presented below, following the adoption of IFRS 9.
During the year, no special circumstances arose requiring recourse to the exceptions allowed under IAS 1.
The preparation of the separate financial statements at December 31, 2018 requires the formulation of valuations, estimates and assumptions which impact the application of the accounting principles and the amounts of the assets, liabilities, costs and revenues recorded in the financial statements. These estimates and relative assumptions are based on historical experience and other factors considered reasonable. However, it should be noted as these refer to estimates, the results obtained will not necessarily be the same as those represented. The estimates are used to value the provisions for risks on receivables, measurement at fair value of financial instruments, impairment tests, employee benefits and income taxes.
The application of the amendments to the existing accounting standards reported above do not have a significant impact on the financial statements, with the exception of those concerning IFRS 9 as illustrated below.
As illustrated previously, TIP was required to adopt IFRS 9 for the preparation of the financial statements for periods which commence from January 1, 2018 and thereafter. This resulted in a change in the accounting policies and criteria used from those applied for the preparation of the financial statements at December 31, 2017, with the consequent reclassifications and adjustments of the amounts in the financial statements.
In accordance with the transitory provisions of IFRS 9, the company has adopted the option not to adjust the 2017 figures presented for comparative purposes and therefore the adjustments in values calculated on the opening amounts at January 1, 2018 only impact upon the equity.
The effects from the transition to IFRS 9 on the statement of financial position and equity both in terms of value and classification are illustrated below.
| Tamburi Investment Partners S.p.A. (in Euro) |
December 31, 2017 | January 1, 2018 IFRS 9 |
Changes | Note |
|---|---|---|---|---|
| Non-current assets | ||||
| Property, Plant and Equipment | 124,017 | 124,017 | 0 | |
| Goodwill | 9,806,574 | 9,806,574 | 0 | |
| Other intangible assets | 2,307 | 2,307 | 0 | |
| Investments in subsidiaries | 16,733,802 | 16,733,802 | ||
| Investments in Associated companies | 189,588,497 | 189,588,497 | ||
| AFS financial assets | 384,241,501 | 0 | (384,241,501) | 2.1 |
| Investments measured at FVOCI | 0 | 384,241,501 | 384,241,501 | 2.1 |
| Financial receivables | 43,347,219 | 0 | (43,347,219) | 2.2 |
| Financial receivables measured at amortised cost | 0 | 24,347,659 | 24,347,659 | 2.2 |
| Financial assets measured at FVTPL | 0 | 19,596,356 | 19,596,356 | 2.2 |
| Derivative instruments | 0 | 0 | 0 | |
| Tax receivables | 398,082 | 398,082 | 0 | |
| Deferred tax assets | 0 | 0 | 0 | |
| Total non-current assets | 644,241,999 | 644,838,795 | 596,796 | |
| Current assets | ||||
| Trade receivables | 728,999 | 728,999 | 0 | 2.3 |
| Current financial receivables | 10,828,027 | 0 | (10,828,027) | 2.2 |
| Current financial receivables measured at | ||||
| amortised cost | 0 | 10,714,602 | 10,714,602 | 2.2 |
| Current financial assets | 609,687 | 0 | (609,687) | 2.2 |
| Derivative instruments | 0 | 150,241 | 150,241 | 2.2 |
| AFS financial assets | 37,764,710 | 0 | (37,764,710) | 2.4 |
| Current financial assets measured at FVOCI | 0 | 37,764,710 | 37,764,710 | 2.4 |
| Cash and cash equivalents | 3,151,412 | 3,151,412 | 0 | |
| Tax receivables | 338,190 | 338,190 | 0 | |
| Other current assets | 264,671 | 264,671 | 0 | |
| Total current assets | 53,685,696 | 53,112,825 | (572,871) | |
| Total assets | 697,927,695 | 697,951,620 | 23,925 |
| (in Euro) | December 31, 2017 | January 1, 2018 IFRS 9 |
Changes | Note |
|---|---|---|---|---|
| Equity | ||||
| Share capital | 83,231,972 | 83,231,972 | 0 | |
| Reserves | 300,297,060 | 300,297,060 | 0 | 2.5 |
| Retained earnings | 64,414,353 | 64,432,537 | 18,184 | 2.5 |
| Profit | 67,014,693 | 67,014,693 | 0 | |
| Total Equity | 514,958,078 | 514,976,262 | 18,184 | |
| Non-current liabilities | ||||
| Post-employment benefits | 307,384 | 307,384 | 0 | |
| Financial payables | 129,129,224 | 129,129,224 | 0 | 2.6 |
| Deferred tax liabilities | 0 | |||
| Total non-current liabilities | 129,436,608 | 129,436,608 | 0 | |
| Current liabilities | ||||
| Trade payables | 376,523 | 376,523 | 0 | |
| Current financial liabilities | 39,012,505 | 39,012,505 | 0 | 2.6 |
| Tax liabilities | 329,922 | 335,663 | 5,741 | |
| Other liabilities | 13,814,059 | 13,814,059 | 0 | |
| Total current liabilities | 53,533,009 | 53,538,750 | 5,741 | |
| Total liabilities | 182,969,617 | 182,975,358 | 5,741 | |
| Total equity and liabilities | 697,927,695 | 697,951,620 | 23,925 |
The total impact on the equity of the TIP Group at January 1, 2018 is summarised in the table below.
| Euro | ||
|---|---|---|
| Equity at December 31, 2017 IAS 39 | 514,958,078 | Note |
| Adjustments to financial assets measured at FVTPL | 23,925 | 2.2 |
| Tax effect of the adjustments | (5,741) | |
| Equity at January 1, 2018 IFRS 9 | 514,976,262 | |
For a complete presentation of period results and to ensure their comparability with preceding periods, and as considered much more representative of and consistent with TIP's activities, the first-half 2018 pro-forma income statement applying the same accounting standards for financial assets and liabilities in place at December 31, 2017 (IAS 39) is presented below.
| IFRS 9 | Reclassification to income statement of capital gain |
Reclassification to income statement of adjustments to financial |
Reversal of convertible fair value |
PRO FORMA | ||
|---|---|---|---|---|---|---|
| Separate income statement | 31/12/2018 | realised | assets | adjustments | 31/12/2018 | 31/12/2017 |
| (in Euro) | ||||||
| Total revenues | 11,050,152 | 11,050,152 | 7,229,036 | |||
| Purchases, service and other costs | (2,238,071) | (2,238,071) | (1,920,284) | |||
| Personnel expenses | (18,385,432) | (18,385,432) | (15,609,419) | |||
| Amortisation, depreciation & write-downs | (58,739) | (58,739) | (70,096) | |||
| Operating profit/(loss) | (9,632,090) | 0 | 0 | 0 | (9,632,090) | (10,370,763) |
| Financial income | 15,341,273 | 51,694,293 | (28,316) | 67,007,250 | 84,615,666 | |
| Financial charges | (7,768,063) | (7,768,063) | (6,457,594) | |||
| Profit/(loss) before adjustments to | ||||||
| investments | (2,058,880) | 51,694,293 | 0 | (28,316) | 49,607,097 | 67,787,309 |
| Adjustments to financial assets | 0 | (40,695,832) | (40,695,832) | 0 | ||
| Profit/(loss) before taxes | (2,058,880) | 51,694,293 | (40,695,832) | (28,316) | 8,911,265 | 67,787,309 |
| Current and deferred taxes | (352,489) | (620,332) | (5,742) | (978,562) | (772,616) | |
| Profit/(loss) of the period | (2,411,369) | 51,073,962 | (40,695,832) | (34,058) | 7,932,703 | 67,014,693 |
For the investments in equity, comprising generally investments with shareholdings below 20% which are not held for trading, classified at December 31, 2017 as AFS financial assets, the company adopted the option within IFRS 9 of accounting for the changes in the fair value through Other Comprehensive Income (FVOCI), therefore with counter-entry in an equity reserve (alternative of accounting for changes in fair value through profit or loss). The FVOCI accounting of the investments in equity does not permit the recognition through profit or loss of the gains/losses realised on sale and the relative reversal from the FVOCI reserve in equity. Any impairments will also not be recorded through profit or loss. Adopting the FVOCI option only the dividends received from the investments will be recognised through profit or loss.
Following this reclassification, the value of the investments at December 31, 2017 did not change as according to IAS 39 the AFS financial assets were already measured at fair value. However, a reclassification was necessary from the equity reserve relating to the accumulated fair value changes, equal to Euro 120,725,151 net of the relative tax effect, from "financial assets held for sale revaluation reserve" to the FVOCI reserve (note 2.5).
The most significant effect of the adoption of IFRS 9 relating to this category of financial assets is, as already described, on the income statement following the non-recognition through profit or loss of the gains/losses realised on sale.
The adoption of IFRS 9 from January 1, 2018 resulted in the non-inclusion in financial income in 2018 income statement of Euro 51,694,293 relating to the non-reversal of the gains/losses in the accumulated reserve until their realisation. The fair value changes matured in the period were recorded under "Increases/decreases in investments measured at FVOCI" of other comprehensive income without reversal through profit or loss, with counter-entry to the FVOCI reserves; at the time of sale, the cumulative gain was reversed from the FVOCI reserve directly to other equity reserves.
In addition, the IFRS 9 income statement does not include an adjustment to the value of investments of Euro 40,695,832 which, as an impairment, would have been recognised to the income statement as per IAS 39. This adjustment was however classified to other fair value changes recognised to the FVOCI reserve.
In order to determine the recognition criterion applicable to financial assets other than investments in equity IFRS 9 requires an analysis through several steps.
Firstly, the expected contractual cash flows generated from the financial asset were subjected to a test (SPPI Test) which must prove that at the measurement date there are no other cash flows than the repayment of principal and interest potentially within the contract.
Subsequently the business model which the company adopts in relation to the financial assets was established on which the accounting criteria adopted depends.
The presence of any embedded derivatives within the principal financial asset was also verified.
Based on these analyses the company has identified the following financial asset categories as per IFRS 9.
These concern financial assets acquired by the company with the intention of maintaining them until maturity in order to receive the relative interest, and any sales are incidental events. The accounting criterion required by IFRS 9 for these financial assets is the amortised cost criterion, which does not differ from that currently applied. The current portion of these receivables is represented by interest or principal which will be received within one year.
This concerns financial assets, generally convertible loans, which generate cash flows which provide for the allocation of shares and/or include implied derivatives relating to the conversion clauses. Differing from IAS 39 applicable to the financial statements for the year ended December 31, 2017, IFRS 9 does not separate the embedded derivatives from the host instrument but provides for the allocation of these financial assets to the category FVTPL, i.e. financial assets measured at fair value through profit and loss.
Therefore, while previously as per IAS 39 in the case of accounting separation the non-derivative component of these instruments were recognised under the amortised cost method and the derivative component was separated and measured at fair value, these instruments were completely measured at fair value through profit or loss, including the changes in fair value related to market conditions of the other components of the instruments, for example interest rates.
The adjustments in value of the financial assets measured at FVTPL at January 1, 2018 amounts to Euro 23,925 before the tax effect.
The adoption of IFRS 9 from January 1, 2018 resulted in lower other financial income of Euro 28,316 in comparison to application of IAS 39.
The derivative instruments not embedded in other financial instruments are measured at fair value through profit or loss. This accounting treatment does not change from that already applied at December 31, 2017.
The specific nature of the receivables generated from the activities of TIP and the historical analysis of losses on receivables in recent years supports the conclusion that the adoption of IFRS 9 does not result in adjustments on the opening balances or significant subsequent impacts generated from impairment risks.
This consideration is also valid with reference to financial receivables held.
As illustrated in Note 2.3 the company carried out an SPPI test and established the business model for the various financial asset categories. The current financial assets measured at FVOCI are nonderivative financial assets comprising investments in bond securities which constitute temporary liquidity investments realised in accordance with the business model which provides for the receipt of the relative cash flows and the sale of the bonds on an opportunistic basis. The cash flows from these financial instruments comprise solely principal and interest.
The FVOCI measurement therefore involves the recognition in an equity reserve of the fair value changes in the securities until the date of sale recognising in the income statement interest income and any impairments. Differing from the accounting of investments in equity at the time of sale the gains/losses are recognised through profit or loss with reversal of the fair value changes through profit or loss previously recognised in the equity reserve.
As these assets already at December 31, 2017 were measured at fair value with changes recorded under equity, the reclassification required by IFRS 9 did not result in adjustments but only the corresponding reclassification of the accumulated fair value changes, amounting to Euro 521,097 net of the tax effect, from the "financial assets held for sale revaluation reserve" to the "FVOCI reserve with reversal through profit or loss".
The financial income in 2018 income statement did not change following the adoption of IFRS 9 for this category of financial assets.
As illustrated in the previous notes the introduction of IFRS 9 resulted in a reclassification between reserves as indicated below. The FVOCI reserve without reversal through profit or loss is reclassified to retained earnings when the accumulated fair value changes are realised, generally on divestment. Once reclassified under retained earnings the reserve becomes distributable.
| in Euro | Revaluation reserve AFS Financial assets |
FVOCI reserve without reversal to profit and loss |
FVOCI reserve with reversal to profit and loss |
Retained earnings |
Total group's net equity |
|---|---|---|---|---|---|
| At December 31, 2017 separate | 121,246,248 | 0 | 0 | 0 | 0 |
| Change in fair value of AFS Financial assets | (120,725,151) | 120,725,151 | 0 | ||
| Change in fair value of current financial assets | (521,097) | 521,097 | 0 | ||
| Adjustment in fair value of financial assets measured at FVTPL | 18,184 | 18,184 | |||
| At January 1, 2018 separate | 0 | 120,725,151 | 521,097 | 18,184 | 18,184 |
The analysis undertaken on the financial liabilities held concluded that the adoption of IFRS 9 has no effect on the accounting of the financial liabilities already recorded at amortised cost utilising the effective interest rate method.
The choices adopted relating to the presentation of the financial statements is illustrated below:
The company undertakes investment banking and merchant banking activities. Top management activity in the above-mentioned areas, both at marketing contact level and institutional initiatives and direct involvement in the various deals, is highly integrated. In addition, execution activity is also organised with the objective to render the "on-call" commitment of advisory or equity professional staff more flexible.
In relation to this choice it is almost impossible to provide a clear representation of the separate financial economic impact of the different areas of activity, as the breakdown of the personnel expense of top management and other employees on the basis of a series of estimates related to parameters which could be subsequently superseded by the actual operational activities would result in an extremely high distortion of the level of profitability of the segments of activity.
In the present financial statements only details on the performance of the "revenues from sales and services" component is provided, related to the sole activity of advisory, excluding therefore the account "other revenues".
| 2018 | 2017 |
|---|---|
| 10,001,371 | 7,140,373 |
| 10,001,371 | 7,140,373 |
Revenues are highly dependent on the timing of success fee maturation, whose distribution varies throughout the year. Revenues include approximately Euro 4 million associated with the accrued portion of variable income that it is highly probable will be paid by an associated company in view of the amount by which the value of the said associated company's investments exceeds the value of the shareholders' contributions.
The account comprises:
| Euro | 2018 | 2017 | |
|---|---|---|---|
| 1. | Services | 1,606,427 | 1,341,586 |
| 2. | Rent, leasing and similar costs | 360,743 | 355,754 |
| 3. | Other charges | 270,901 | 222,944 |
| Total | 2,238,071 | 1,920,284 |
Service costs mainly relate to professional and legal consultancy, general expenses and commercial expenses. They include Euro 65,000 of audit fees and Euro 67,050 emoluments paid to the Board of Statutory Auditors and the Supervisory Board. The increase in the account is essentially due to the banking commissions on the sale of listed shares, classified in the previous year as a reduction in gains realised.
Other charges principally include non-deductible VAT.
The account comprises:
| Euro | 2018 | 2017 |
|---|---|---|
| Wages and salaries | 1,050,311 | 1,357,164 |
| Social security charges | 387,833 | 367,186 |
| Directors' fees | 16,883,067 | 13,819,654 |
| Post-employment benefits | 64,221 | 65,415 |
| Total | 18,385,432 | 15,609,419 |
The account "Wages and salaries" and "Directors' fees" include fixed and variable remuneration matured in the period. A pro-forma calculation was applied to the variable remuneration of the executive directors, as approved by the Board of Directors, on the proposal of the Remuneration Committee, according to the accounting standards in place until December 31, 2017.
"Post-employments benefits" are updated based on actuarial valuations, with the gains or losses recognised through equity.
At December 31, 2018, the number of TIP employees was as follows:
| December 31, 2018 | December 31, 2017 | |
|---|---|---|
| White collar & apprentices | 11 | 11 |
| Managers | 1 | 1 |
| Executives | 3 | 3 |
| Total | 15 | 15 |
The Chairman/CEO and Vice Chairman/CEO are not employees either of TIP or of Group companies.
The account comprises:
| Euro | 2018 | 2017 | |
|---|---|---|---|
| 1. | Investment income | 6,591,808 | 80,493,742 |
| 2. | Income from current financial assets measured at FVOCI |
3,703,795 | 404,910 |
| 3. | Other income | 5,045,670 | 3,717,014 |
| Total financial income | 15,341,273 | 84,615,666 | |
| 4. | Interest and other financial charges | (7,768,063) | (6,457,594) |
| Total financial charges | (7,768,063) | (6,457,594) | |
| Net financial income | 7,573,210 | 78,158,072 | |
| Euro | 2018 | 2017 |
|---|---|---|
| Gain on disposal of investments | 0 | 62,906,156 |
| Dividends | 6,591,808 | 17,587,586 |
| Total | 6,591,808 | 80,493,742 |
In 2018, TIP received dividends from the following shareholdings:
| Euro | |
|---|---|
| Clubtre S.p.A. | 1,082,788 |
| Hugo Boss AG | 2,591,700 |
| Moncler S.p.A. | 699,997 |
| Amplifon S.p.A. | 664,184 |
| BE S.p.A. | 631,643 |
| Other | 921,496 |
| Total | 6,591,808 |
The 2017 figures are not comparable as in the previous year investment income included the gains realised on the disposal of the investments which according to IFRS 9 are no longer recognised to profit and loss. For an analysis of comparable results at like-for-like accounting standards, reference should be made to the Directors' Report.
This principally includes interest income accrued on securities and capital gains on the sale of bonds.
These principally include interest matured on financial receivables and fair value changes and gains on financial assets measured at FVTPL consisting of derivatives and convertible bond loans. These also comprise foreign exchange gains on securities of Euro 1,987,028.
| Euro | 2018 | 2017 |
|---|---|---|
| Interest on bonds | 5,057,009 | 5,048,258 |
| Other | 2,711,054 | 1,409,336 |
| Total | 7,768,063 | 6,457,594 |
"Interest on bonds" refers to that matured in favour of the subscribers of the 2014-2020 TIP Bond of Euro 100 million calculated in accordance with the amortised cost method applying the effective interest rate.
The "Other" account mainly includes bank interest on loans and other financial charges.
| The breakdown of income taxes is as follows: | ||||
|---|---|---|---|---|
| Euro | 2018 | 2017 | ||
| Current taxes | 513,758 | 449,900 | ||
| Deferred taxes | (626,073) | 0 | ||
| Deferred tax income | 464,804 | 322,716 | ||
| Total | 358,489 | 772,616 |
The reconciliation between the theoretical and actual tax charges is provided below:
| 2018 | 2017 | |||
|---|---|---|---|---|
| Euro | Amount | Tax | Amount | Tax |
| Profit/(loss) before taxes | (2,058,881) | 67,787,309 | ||
| Theoretical tax charge | 24% | (494,131) | 24% | 16,268,954 |
| Permanent decreases | ||||
| Dividends | (6,262,217) | (1,502,932) | (16,213,907) | (3,891,338) |
| Exempt gains (*) | (59,923,365) | (14,381,608) | ||
| Tax losses | ||||
| Other permanent decreases | (217,597) | (52,223) | (458,564) | (110,055) |
| (1,555,155) | (18,383,001) | |||
| Permanent increases | 8,608,454 | 2,066,029 | 6,955,780 | 1,669,387 |
| Temporary differences | ||||
| Differences which will reverse in future years | 5,052,900 | 1,212,696 | 6,998,263 | 1,679,583 |
| Reversal differences from previous years | (6,989,637) | (1,677,513) | (8,753,623) | (2,100,870) |
| Total temporary differences | (1,936,737) | (464,817) | (421,286) | |
| ACE assessable | ||||
| Losses carried forward | ||||
| Total | (1,866,978) | (3,608,107) | ||
| IRAP regional tax | 513,758 | 116,079 | ||
| Change in deferred tax assets/liabilities | (161,269) | 322,716 | ||
| Other changes | 0 | 333,821 | ||
| Total income taxes | 358,489 | 772,616 |
(*) The tax charge is principally due to the application of the PEX regime on the gains realised on the equity investments.
The company recognized a net increase in deferred tax liabilities amounting to Euro 161,269 directly in equity in relation to the change in the value of equity investments taken to OCI.
The following table illustrates the changes in the account:
| Euro | Other assets |
|---|---|
| NBV at December 31, 2016 | 170,589 |
| Increases | 19,714 |
| Decreases | 0 |
| Decrease depreciation provision | 1,281 |
| Amortisation & Depreciation | (67,567) |
| NBV at December 31, 2017 | 124,017 |
| Increases | 29,216 |
| Decreases | 0 |
| Decrease depreciation provision | 0 |
| Amortisation & Depreciation | (56,557) |
| NBV at December 31, 2018 | 96,676 |
The increase in "Other Assets" mainly refers to the purchase of EDP, furniture and fittings and mobile telephones.
"Goodwill" for Euro 9,806,574 refers to the incorporation of the subsidiary Tamburi & Associati S.p.A. into TIP S.p.A. in 2007.
In accordance with IAS 36 the value of goodwill, having an indefinite useful life, is not amortised, but subject to an impairment test, made at least annually.
The recoverable value is estimated based on the value in use, calculated using the following assumptions:
with the conclusion that the value attributed is appropriate and recoverable.
The following illustrates the changes in "Other intangible assets":
| Industrial patents and intellectual |
Concessions, licences and |
Total | |
|---|---|---|---|
| Euro | property rights | trademarks | |
| NBV at December 31, 2016 | 4,426 | 200 | 4,626 |
| Increases | 210 | 0 | 210 |
| Decreases | 0 | 0 | 0 |
| Amortisation & Depreciation | (2,423) | (106) | (2,529) |
| NBV at December 31, 2017 | 2,213 | 94 | 2,307 |
| Increases | 0 | 0 | 0 |
| Decreases | 0 | 0 | 0 |
| Amortisation & Depreciation | (2,143) | (39) | (2,182) |
| NBV at December 31, 2018 | 70 | 55 | 125 |
This relates to the investment in the subsidiaries Clubdue S.r.l., StarTIP S.r.l. and TXR S.r.l.
| Company | Registered Office |
Share capital |
Number of shares |
Number of shares held |
% held |
|---|---|---|---|---|---|
| Clubdue S.r.l. | Milan | 10,000 | 10,000 | 10,000 | 100% |
| StarTIP S.r.l. | Milan | 50,000 | 50,000 | 50,000 | 100% |
| TXR S.r.l. | Milan | 100,000 | 100,000 | 51,000 | 51.0% |
The key data (in Euro) on the subsidiaries are as follows:
The company Clubdue S.r.l. was incorporated in 2017 and is currently not operational.
The account refers to minority investments in listed and non-listed companies.
| January 1, 2018 IFRS | |
|---|---|
| 9 | |
| 343,760,460 | |
| 32,668,812 | 40,481,041 |
| 343,452,773 | 384,241,501 |
| December 31, 2018 310,783,961 |
The changes in the investments measured at FVOCI are shown in Attachment 2.
The composition of the valuation methods of the non-current financial assets available for sale relating to investments in listed and non-listed companies is illustrated in the table below:
| Listed companies | Non-listed companies | |
|---|---|---|
| Method | (% of total) | (% of total) |
| Listed prices on active markets (level 1) | 100% | 0.0% |
| Valuation models based on market inputs (level 2) | 0.0% | 0.0% |
| Other valuation techniques (level 3) | 0.0% | 99.7% |
| Purchase cost | 0.0% | 0.3% |
| Total | 100.0% | 100.0% |
The investments in Associated companies refer to:
for Euro 86,197,441 the company Asset Italia S.p.A., investment holding which gives shareholders the opportunity to choose for each proposal their individual investments. The equity and results relating to Asset Italia 1 S.r.l., vehicle company for the investment in Alpitour, refer for 99% to the tracking shares issued in favour of the shareholders which subscribed to the initiative and for 1% to Asset Italia, or rather to all the ordinary shares. The increase for purchases concerns the subscription to the share capital increase of Asset Italia for an additional investment in Alpitour through Asset Italia 1, undertaken in July. Following this investment, TIP's share of the shares tracking the investment in Alpitour at December 31, 2018 was equal to 35.81%. Similarly, the equity and results relating to Asset Italia 2 S.r.l., vehicle company for the investment in Ampliter, refer for 99% to the tracking shares issued in 2018 in favour of the shareholders which subscribed to the initiative and for 1% to Asset Italia, or rather to all the ordinary shares. TIP's share of the shares tracking the investment in Ampliter is equal to 20%.
for Euro 37,683,941 the investment in Gruppo IPG Holding S.p.A. (company which holds the majority shareholding in Interpump Group S.p.A., to be considered a subsidiary);
For the changes in the investments in Associated companies, reference should be made to attachment 4.
| (14) Financial receivables measured at amortised cost | ||
|---|---|---|
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 |
| Financial receivables measured at amortised cost | 31,260,124 | 24,347,659 |
| Total | 31,260,124 | 24,347,659 |
Financial receivables calculated at amortised cost principally concern the loans issued to StarTIP S.r.l. as sole shareholder for Euro 24,463,957 and Tefindue S.p.A., which holds indirectly a shareholding in Octo Telematics S.p.A., international leader in the development and management of telecommunication systems and services for the automotive sector, mainly for the insurance market, for Euro 6,796,167.
| (15) Financial assets measured at FVTPL | ||
|---|---|---|
| Euro | Dec. 31, 2018 | Jan. 1, 2018 IFRS 9 |
| Financial assets measured at FVTPL | 20,395,298 | 19,596,356 |
| Total | 20,395,298 | 19,596,356 |
Assets designated at FVTPL primarily consist of the bond issued by Tefindue S.p.A. in the amount of Euro 3,053,013 and the Furla S.p.A. convertible bond, subscribed on September 30, 2016 in the amount of Euro 17,313,694.
The breakdown is as follows:
| Euro | December 31, 2018 | December 31, 2017 |
|---|---|---|
| Within one year | 683,898 | 338,190 |
| Beyond one year | 310,338 | 398,082 |
Current tax receivables include IRES, IRAP and withholding taxes. The non-current component principally concerns withholding taxes and IRAP reimbursement request.
The breakdown of the account at December 31, 2018 and December 31, 2017 is detailed below:
| Assets | Liabilities | Net | ||||
|---|---|---|---|---|---|---|
| 31/12/2018 | 31/12/2017 | 31/12/2018 | 31/12/2017 | 31/12/2018 | 31/12/2017 | |
| Euro | ||||||
| Other intangible assets | 2,841 | 4,104 | 0 | 0 | 2,841 | 4,104 |
| Investments measured at FVOCI | 0 | 0 | (1,332,339) | (1,631,765) | (1,332,339) | (1,631,765) |
| Current financial assets | 0 | 0 | 0 | (165,378) | 0 | (165,378) |
| Other assets | 124,348 | 123,144 | (8,969) | (8,969) | 115,379 | 114,175 |
| Other liabilities | 1,214,119 | 1,678,864 | 0 | 0 | 1,214,119 | 1,678,864 |
| Total | 1,341,308 | 1,806,112 | (1,341,308) | (1,806,112) | 0 | 0 |
| Recorded | Recorded | |||
|---|---|---|---|---|
| Euro | 2017 | through P&L | through Equity | December 31, 2018 |
| Other intangible assets | 4,104 | (1,263) | 0 | 2,841 |
| Investments measured at FVOCI and | ||||
| investments valued under the equity | ||||
| method | (1,631,765) | 626,073 | (326,647) | (1,332,339) |
| Current financial assets | (165,378) | 0 | 165,378 | 0 |
| Other assets | 114,175 | 1,204 | 0 | 115,379 |
| Other liabilities | 1,678,864 | (464,745) | 0 | 1,214,119 |
| Total | 0 | 161,269 | (161,269) | 0 |
| Euro | December 31, 2018 | December 31, 2017 |
|---|---|---|
| Trade receivables (before doubtful debt provision) | 5,098,915 | 896,808 |
| Doubtful debt provision | (167,809) | (167,809) |
| Total | 4,931,106 | 728,999 |
| Trade receivables beyond 12 months | 0 | 0 |
| Total beyond 12 months | 0 | 0 |
Changes in trade receivables is strictly related to the different revenue mix between success fees and service revenues. They include approximately Euro 4 million associated with the accrued portion of variable income that it is highly probable will be paid by an associated company in view of the amount by which the value of the said associated company's investments exceeds the value of the shareholders' contributions.
| Euro | December 31, 2018 | January 1, 2018 IFRS 9 |
|---|---|---|
| Current financial receivables measured at amortised cost | 9,519,333 | 0 |
| Total | 9,519,333 | 0 |
These include loans granted to associated companies.
| Euro | December 31, | January 1, 2018 IFRS 9 |
|---|---|---|
| 2018 | ||
| Current financial assets measured at FVOCI | 45,227,977 | 37,764,710 |
| Total | 45,227,977 | 37,764,710 |
These concern non-derivative financial assets comprising investments in bonds for the temporary utilisation of liquidity.
The account represents the balance of banks deposits determined by the nominal value of the current accounts with credit institutions.
| Euro | December 31, 2018 | December 31, 2017 |
|---|---|---|
| Bank deposits | 1,557,434 | 3,147,115 |
| Cash and cash equivalents on hand | 6,380 | 4,297 |
| Total | 1,563,814 | 3,151,412 |
The composition of the net financial position at December 31, 2018 compared with the end of the previous year is illustrated in the table below.
| Euro | December 31, 2018 | January 1, 2018 IFRS 9 | |
|---|---|---|---|
| A | Cash and cash equivalents | 1,563,814 | 3,151,412 |
| B | Current financial assets measured at FVOCI and derivative instruments |
45,227,977 | 37,764,710 |
| C | Current financial receivables measured at amortised cost | 9,519,333 | 10,714,602 |
| D | Liquidity (A+B+C) | 56,311,214 | 51,630,724 |
| E | Financial payables | (99,555,085) | (129,129,224) |
| F | Current financial liabilities | (97,538,156) | (39,012,505) |
| G | Net financial position (D+E+F) | (120,386,819) | (116,511,005) |
The liquidity generated by the divestments and the exercise of the warrants in June 2018 was invested in new investments, the distribution of dividends and the TIP share buy-back plan.
Financial payables mainly refer to the TIP 2014-2020 bond and a bank loan.
Current financial liabilities refer to bank payables and interest related to the bond loan matured and still not paid.
| (22) Share capital | |
|---|---|
| The share capital of TIP S.p.A. is composed of: | |
| Shares | Number |
| Ordinary shares | 164,441,667 |
| TOTAL | 164,441,667 |
On June 30, 2018, the third exercise period of the TIP S.p.A. 2015 - 2020 Warrants concluded, with the exercise of 4,380,183 warrants and a relative share capital increase of Euro 2,277,695.16 with the issue of 4,380,183 new ordinary TIP S.p.A. shares at a price of Euro 4.55 each, for a total value of Euro 19,929,832.65.
The share capital of TIP S.p.A. amounts therefore to Euro 85,509,666.84, represented by 164,441,667 ordinary shares.
The treasury shares in portfolio at December 31, 2018 totalled 5,959,178, equal to 3.624% of the share capital. The shares in circulation at December 31, 2018 therefore numbered 164,441,667.
| No. treasury shares at | No. of shares acquired | No. of shares sold in | No. treasury shares at |
|---|---|---|---|
| January 1, 2018 | in 2018 | 2018 | December 31, 2018 |
| 2,717,689 | 3,256,489 | 15,000 | 5,959,178 |
| Nature/Description | Amount | Poss. of utilisation |
Quota available |
Utilisation in 3 previous years to cover losses |
Utilisation in 3 previous years for other reasons |
|---|---|---|---|---|---|
| Share capital | 85,509,667 | ||||
| Legal reserve | 16,646,394 | B | 16,646,394 | ||
| Share premium reserve | 183,258,304 | A,B | 183,258,304 | ||
| Fair value OCI reserve without reversal to profit or loss |
57,935,190 | 57,935,190 | |||
| OCI reserve with reversal to profit or loss |
(1,624,365) | ||||
| Other reserves | 5,434,978 | ||||
| Merger surplus | 5,060,152 | A,B,C | 5,060,152 | ||
| Retained earnings | 170,289,973 | A,B,C | 170,289,973 | ||
| IFRS business combination reserve | (483,655) | ||||
| Treasury shares acquisition reserve | (31,111,031) | ||||
| Total | 490,915,607 | 433,190,013 | |||
| Non-distributable quota (*) | 183,258,304 |
Analysis is provided below of the statutory and tax nature of the equity accounts.
A: for share capital increase, B: for coverage of losses and C: for distribution to shareholders.
* Concerns the share premium reserve (Euro 183,258,304) which, in accordance with Article 2431 of the Civil Code, may not be distributed until the legal reserve has reached the limits established by Article 2430 of the Civil Code (Euro 17,101,933).
The following additional disclosures is provided on the equity at December 31, 2018.
This amounts to Euro 16,646,394, increasing Euro 1,275,247 following the Shareholders' Meeting motion of April 19, 2018 with regard to the allocation of the 2017 net profit.
The account amounts to Euro 183,258,304 and increased Euro 17,637,563 following the exercise of the warrants.
The positive reserve amounts to Euro 57,935,190. This concerns the fair value changes to investments in equity, net of the relative deferred tax effect. The gains realised on partial divestments of holdings which in application of IFRS 9 were not reversed to profit or loss were reclassified from the reserve to retained earnings. The reserve includes a decline in fair values of Euro 40,695,832, which in accordance with IAS 39 would have been taken to the income statement.
For a breakdown of the fair value changes of investments in equity, reference should be made to attachment 2 and note 12.
For the changes in the year and breakdown of other equity items, reference should be made to the specific statement.
The negative reserve amounts to Euro 1,624,365. These principally concern the fair value changes of securities acquired as temporary uses of liquidity. The relative fair value was reversed to the income statement on the sale of the underlying security.
They amount to Euro 5,434,978 and mainly refer to the stock option plan reserve created following the allocation of options to employees.
The merger surplus amounts to Euro 5,060,152. This derives from the incorporation of Secontip S.p.A. in TIP on January 1, 2011.
Retained earnings amount to Euro 170,289,973 and increased, compared to December 31, 2017, for Euro 105,857,436 following the allocation of the 2017 net profit.
The reserve was negative and amounts to Euro 483,655, unchanged compared to December 31, 2015.
The negative reserve amounts to Euro 31,111,031. This is a non-distributable reserve.
For the changes in the year and breakdown of other equity items reference should be made to the specific statement.
At December 31, 2018, the balance of the account related to the Post-Employment Benefit due to all employees of the company at the end of employment service. The liability was updated based on actuarial calculations.
| Euro | December 31, 2018 | January 1, 2018 IFRS 9 |
|---|---|---|
| Opening balance | 307,384 | 271,667 |
| Provisions in the year | 64,221 | 65,415 |
| Financial charges | 3,883 | 3,753 |
| Actuarial gains | 14,459 | 3,140 |
| transfers to pension funds and utilisations | (83,458) | (36,591) |
| Total | 306,489 | 307,384 |
The financial payables of Euro 99,555,085 refer to the issue of the 2014-2020 TIP Bond fully placed on the market on April 7, 2014 (nominal value of Euro 100,000,000). The loan, with an initial rights date of April 14, 2014 and expiry date of April 14, 2020 was issued at par value and offers an annual coupon at the nominal gross fixed rate of 4.75%. The loan was recognised at amortised cost applying the effective interest rate which takes into account the transaction costs incurred for the issue of the loan of Euro 2,065,689; the loan provides for compliance with financial covenants on an annual basis.
In accordance with the application of international accounting standards required by Consob recommendation No. DEM 9017965 of February 26, 2009 and the Bank of Italy/Consob/Isvap No. 4 of March 4, 2010, we report that this account does not include any exposure related to covenants not complied with.
These amount to Euro 97,538,156 and principally comprise bank payables. They include for Euro 29,945,676 the loan of a nominal value of Euro 40,000,000 with the following maturities:
The bond provides for compliance with annual financial covenants. At December 31, 2018, the portion of the loan set to come due in 2019 had been classified among non-current financial payables.
In accordance with the application of international accounting standards required by Consob recommendation No. DEM 9017965 of February 26, 2009 and the Bank of Italy/Consob/Isvap No. 4 of March 4, 2010, we report that this account does not include any exposure related to covenants not complied with.
The breakdown of the account is as follows:
| Euro | December 31, 2018 | January 1, 2018 IFRS 9 |
|---|---|---|
| IRAP | 397,679 | 0 |
| VAT | 0 | 166,136 |
| Withholding taxes | 144,609 | 163,786 |
| Total | 542,288 | 329,922 |
The account mainly refers to emoluments for directors and employees.
| Euro | December 31, 2018 | January 1, 2018 |
|---|---|---|
| IFRS 9 | ||
| Directors and employees | 16,572,201 | 13,526,858 |
| Social security institutions | 176,048 | 155,204 |
| Other | 82,746 | 131,997 |
| Total | 16,830,995 | 13,814,059 |
The Company, by nature of its activities, is exposed to various types of financial risks; in particular, to the risk of changes in market prices of investments and, marginally, to the risk of interest rates. The policies adopted by the company for the management of the financial risk are illustrated below.
The company is exposed to the interest rate risk relating to the value of the current financial assets represented by bonds and financial receivables.
The company, by nature of its activities, is exposed to the risk of changes in the value of the investments.
In relation to the listed investments at the present moment there is no efficient hedging instrument of a portfolio such as those with the characteristics of the company.
Relating to non-listed companies, the risks related:
A sensitivity analysis is reported below which illustrates the effects on the balance sheet, of a hypothetical change in the fair value of the instruments held at December 31, 2018 of +/-5% compared to the comparative figures for 2017.
| Sensitivity Analysis | December 31, 2018 | December 31, 2017 | ||||
|---|---|---|---|---|---|---|
| thousands of Euro | -5.00% | Basic | +5.00% | -5.00% | Basic | +5.00% |
| Investments in listed companies | 295,245 | 310,784 | 326,323 | 326,572 | 343,760 | 360,948 |
| Investments in non-listed companies | 31,036 | 32,669 | 34,302 | 38,457 | 40,481 | 42,505 |
| Investments measured at FVOCI | 326,280 | 343,453 | 360,626 | 365,029 | 384,241 | 403,453 |
| Effect on equity | (17,173) | 17,173 | (21,100) | 21,100 |
The company's exposure to the credit risk depends on the specific characteristics of each client as well as the type of activities undertaken and in any case at the preparation date of the present financial statements is not considered significant.
Before undertaking an assignment, careful analysis is undertaken on the credit reliability of the client.
The company approach in the management of liquidity guarantees, where possible, that there are always sufficient funds to meet current obligations.
Directors provide for maintaining high levels of own capital in order to maintain a relationship of trust with investors, allowing for future development.
The company acquired treasury shares on the market in a timely manner which depends on market prices.
The classification of financial instruments at fair value in accordance with IFRS 13 is determined based on the quality of the input sources used in the valuation, according to the following hierarchy:
In accordance with the disclosures required by IFRS 13, the types of financial instruments recorded in the financial statement at December 31, 2018 are illustrated below with indication of the accounting policies applied and, in the case of financial instruments measured at fair value, of the exposure to changes in fair value (income statement or equity), specifying also the hierarchical level of fair value attributed.
The final column of the following tables shows, where applicable, the fair value at the end of the period of the financial instrument.
| Accounting policies applied in accounts for financial instruments | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Type of instrument | fair value | ||||||||||
| with change in fair value recorded through: |
Total | Fair value hierarchy | Amortised | Invest. at | Book value at |
fair value at 31.12.2018 |
|||||
| (in thousands of Euro) | account economic |
result net Value |
fair value |
1 | 2 | 3 | cost | cost | 31/12/2018 | ||
| Investments | |||||||||||
| measured at FVOCI | 343,453 | 343,453 | 343,453 | 343,453 | |||||||
| - listed companies | 310,784 | 310,784 | 310,784 | 310,784 | 310,784 | ||||||
| - non-listed companies |
32,669 | 32,669 | 32,584 | 85 | 32,669 | 32,669 | |||||
| Financial assets 1 measured at FVOCI |
45,228 | 45,228 | 45,228 | 45,228 | 45,228 | ||||||
| Financial receivables measured at 1 |
40,779 | 40,779 | 40,779 | ||||||||
| amortised cost Financial assets measured at FVTPL |
20,395 | 20,395 | 20,395 | 20,395 | 20,395 | ||||||
| Cash and cash 1 equivalents |
1,564 | 1,564 | 1,564 | ||||||||
| Non-current financial 2 payables |
99,555 | 99,555 | 102,519 | ||||||||
| Trade payables 1 |
306 | 306 | 306 | ||||||||
| Current financial 1 liabilities |
97,538 | 97,538 | 97,538 | ||||||||
| Other liabilities 1 |
16,831 | 16,831 | 16,831 |
Note
For these accounts the fair value was not calculated as their carrying value approximates this value.
The account includes the listed bond, for which a fair value was determined at December 31, 2018.
The following tables report the financial instruments of TIP directly and indirectly held at the end of the period, also through trust companies, communicated to the company by the members of the Board of Directors. The table also illustrates the financial instruments acquired, sold and held by the parties in 2018.
| Members of the Board of Directors | ||||||
|---|---|---|---|---|---|---|
| Name | Office | No. of shares held at December 31, 2017 |
No. of shares acquired in 2018 |
No. of shares allocated from exercise of TIP warrant |
No. of shares sold in 2018 |
No. of shares held at December 31, 2018 |
| Giovanni Tamburi(1) | Chair. & CEO | 12,077,151 | 250,000 | 12,327,151 | ||
| Alessandra Gritti | Vice Chair. & CEO |
2,031,943 | 350 | 2,032,293 | ||
| Cesare d'Amico(2) | Vice Chairman | 21,315,000 | 300,000 | 3,300,000 | 18,315,000 | |
| Claudio Berretti | Dir. & Gen. Manager |
1,758,580 | 1,758,580 | |||
| Alberto Capponi | Director | 0 | 0 | |||
| Paolo d'Amico(3) | Director | 20,250,000 | 100,000 | 3,300,000 | 17,050,000 | |
| Giuseppe Ferrero(4) | Director | 3,346,301 | 166,666 | 3,179,635 | ||
| Manuela Mezzetti | Director | 74,627 | 74,627 | 0 | ||
| Daniela Palestra | Director | 0 | 0 |
| Name | Office | No of warrants held at December 31, 2017 |
No. of warrants assigned in 2018 |
No. of warrants sold in 2018 |
No. of warrants exercised in 2018 |
No of warrants held at December 31, 2018 |
|---|---|---|---|---|---|---|
| Giovanni Tamburi(1) | Chair. & CEO | 1,368,180 | 250,000 | 1,118,180 | ||
| Alessandra Gritti | Vice Chair. & CEO |
358,485 | 358,485 | |||
| Cesare d'Amico(2) | Vice Chairman | 2,000,000 | 40,000 | 2,040,000 | ||
| Claudio Berretti | Dir. & Gen. Manager |
0 | 0 | |||
| Alberto Capponi | Director | 0 | 0 | |||
| Paolo d'Amico(3) | Director | 2,000,000 | 2,000,000 | |||
| Giuseppe Ferrero(4) | Director | 0 | 0 | |||
| Manuela Mezzetti | Director | 0 | 0 | |||
| Daniela Palestra | Director | 0 | 0 |
(1)Giovanni Tamburi holds his investment in the share capital of TIP in part directly in his own name and in part indirectly through Lippiuno S.r.l., a company in which he holds 87.26% of the share capital.
(2)Cesare d'Amico holds his investment in the share capital of TIP directly through d'Amico Società di Navigazione S.p.A. (a company in which he holds directly and indirectly 50% of the share capital), through the company Fi.Pa. Finanziaria di Partecipazione S.p.A. (a company which directly holds 54% of the share capital) and through family members.
(3)Paolo d'Amico holds his investment in the share capital of TIP directly and through d'Amico Società di Navigazione S.p.A., a company in which he holds (directly) a 50% shareholding.
(4)Giuseppe Ferrero holds his investment in the share capital of TIP directly and through family members.
The members of the Board of Statutory Auditors do not hold shares or warrants of the company.
The table below reports the monetary remuneration, expressed in Euro, to the members of the boards in 2018.
| TIP office | Fees December 31, 2018 |
|---|---|
| Directors | 16,883,067 |
| Statutory Auditors | 67,050 |
The remuneration of the Supervisory Board is Euro 4,000.
TIP also signed two insurance policies with Chubb Insurance Company of Europe S.A.- D&O and professional TPL - in favour of the Directors and Statutory Auditors of TIP, of the subsidiaries, as well as the investees companies in which TIP has a Board representative and the General Managers and coverage for damage to third parties in the exercise of their functions.
The table reports the transactions with related parties during the year outlined according to the amounts, type and counterparties.
| Party | Type | Value/Balance at December 31, 2018 |
Value/Balance at December 31, 2017 |
|
|---|---|---|---|---|
| Asset Italia S.p.A. | Revenue | 1,000,268 | 1,001,533 | |
| Asset Italia S.p.A. | Trade receivables | 250,000 | 250,000 | |
| Asset Italia 1 S.r.l. | Revenue | 820,000 | - | |
| Betaclub S.r.l. | Revenue | 25,136 | 25,000 | |
| Betaclub S.r.l. | Trade receivables | 25,043 | 25,000 | |
| BE S.p.A. | Revenues | 60,000 | 60,000 | |
| BE S.p.A. | Trade receivables | 15,000 | 15,000 | |
| BE S.p.A. | Dividends received | 631,643 | 467,417 | |
| Clubtre S.p.A. | Revenue | 50,000 | 50,000 | |
| Clubtre S.p.A. | Trade receivables | 50,000 | 50,000 | |
| Clubtre S.p.A. | Financial receivables | 9,088,864 | - | |
| Clubtre S.p.A. | Dividends received | 1,082,788 | 11,760,555 | |
| Clubtre S.p.A. | Gains realised | - | 16,706,524 | |
| Clubitaly S.p.A. | Revenue | 30,000 | 30,000 | |
| Clubitaly S.p.A. | Trade receivables | 30,000 | 30,000 | |
| Clubitaly S.p.A. | Financial receivables | 430,469 | 324,010 | |
| Gruppo IPG Holding S.p.A. | Revenue | 30,239 | 30,131 | |
| Gruppo IPG Holding S.p.A. | Trade receivables | 30,239 | 30,131 | |
| StarTIP S.r.l. | Financial receivables | 24,463,957 | 17,886,957 | |
| StarTIP S.r.l. | Gains realised | 137,500 | 0 | |
| TIP-pre IPO S.p.A. | Revenue | 4,500,665 | 501,087 | |
| TIP-pre IPO S.p.A. | Trade receivables | 4,125,036 | 125,000 | |
| TXR S.r.l. | Revenue | 15,000 | 15,342 | |
| TXR S.r.l. | Trade receivables | 15,000 | 15,342 | |
| TXR S.r.l. | Dividends received | 345,827 | 0 | |
| Services provided to companies related to the Board of Directors |
Revenue | 16,000 | 1,045,540 | |
| Services provided to companies related to the Board of Directors |
Trade receivables | 16,000 | 74,820 | |
| Services received from companies related to the Board of Directors |
Costs (services received) | 7,863,909 | 6,462,681 | |
| Payables for services received from companies related to the Board of Directors |
Trade payables | 7,226,209 | 5,844,585 | |
| Giovanni Tamburi | Revenues (services provided) | 2,811 | 4,379 | |
| Giovanni Tamburi | Trade receivables | 2,811 | 3,311 |
The services provided for all the above listed parties were undertaken at contractual terms and conditions in line with the market.
With reference to the subsequent events, reference should be made to the Directors' Report.
TIP corporate governance adopts the provisions of the new version of the Self-Governance Code published by Borsa Italiana.
The Corporate Governance and Ownership Structure Report for the year is approved by the Board of Directors and published annually on the website of the company www.tipspa.it, in the "Corporate Governance" section.
For the Board of Directors The Chairman Giovanni Tamburi
Milan, March 14, 2019
Declaration of the Executive Officer for Financial Reporting as per Article 81-ter of Consob Regulation No. 11971 of May 14, 1999 and subsequent amendments and supplements.
of the administrative and accounting procedures for the compilation of the separate financial statements for the year ended December 31, 2018.
No significant aspect emerged concerning the above.
The Chief Executive Officer The Executive Officer
Milan, March 14, 2019
| Company | Restered office | share | number of | Total | number of | % | share of | book value | |
|---|---|---|---|---|---|---|---|---|---|
| shares | net equity | shares held | held | net equity | in accounts | ||||
| Associates | |||||||||
| Asset Italia S.p.A. (1) | Milan | ||||||||
| via Pontaccio, 10 | euro | 3,425,114 | 102,425,114 | 263,205,046 | 20,788,639 | 20.00 | 52,641,009 | 86,197,441 | |
| Be Think, Solve, Execute S.p.A. (1) | Rome | ||||||||
| viale dell'Esperanto, 71 | euro | 27,109,165 | 134,897,272 | 53,053,000 | 31,582,225 | 23.41 | 12,420,798 | 16,596,459 | |
| Clubitaly S.r.l. (1) | Milan | ||||||||
| via Pontaccio, 10 | euro | 103,300 | 103,300 | 238,167,895 | 31,197 | 30.20 | 71,926,704 | 37,436,400 | |
| Clubtre S.p.A. (2) | Milan | ||||||||
| via Pontaccio, 10 | euro | 120,000 | 120,000 | 36,543,871 | 29,544 | 24.62 | 8,997,101 | 24,021,839 | |
| Gatti & Co. GmbH (1) | Frankfurt am Main | ||||||||
| Bockenheimer Landstr. 51-53 | euro | 35,700 | 35,700 | 658,349 | 10,700 | 30.00 | 197,505 | 275,000 | |
| Gruppo IPG Holding S.p.A. (1) ** | Milan | ||||||||
| via Appiani, 12 | euro | 142,438 | 284,875 | 71,685,588 | 67,348 | 33.72 | 24,172,380 | 37,683,941 | |
| Palazzari & Turries Limited (3) | Hong Kong | ||||||||
| 88 Queen's Road | euro | 300,000 | 300,000 | 689,659 | 90,000 | 30.00 | 206,898 | 225,000 | |
| TIP-Pre Ipo S.p.A. (1) | Milan | ||||||||
| via Pontaccio, 10 | euro | 329,999 | 3,299,988 | 162,918,797 | 966,424 | 29.29 | 47,711,881 | 22,787,025 |
(1) Value relating to the net equity updated at 31.12.2018.
(2) Value relating to the net equity updated at 31.12.2018. The fully diluted % held is 43,28%
(3) Share Capital in Hong Kong dollars. Value relating to the net equity updated at 31.12.2017. The net equity was converted at the EUR/HKD rate of 0,1135 (31.12.2018).
(4) Value relating to the net equity updated at 31.12.2017.
* Tracking shares not included
** The fully diluted % held is 33,72%
| Balance at 1.1.2018 | increases | decreases | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in Euro | No. of | historic | fair value | increase | write-down | book value acquisition or | reclass. | fair value | decreases | fair value | reversal | book value | |
| shares | cost | adjustments | (decrease) | P&L | fair value subscription | increase | decreases | fair value | 31/12/2018 | ||||
| Società non quotate | |||||||||||||
| Azimut Benetti S.p.A. | 737,725 | 38,990,000 | 0 | 38,990,000 | (7,312,229) | 31,677,771 | |||||||
| Talent Garden S.p.A. | 6,250 | 500,000 | 500,000 | 137,500 | (500,000) | (137,500) | 0 | ||||||
| Other equity instr. & other minor | 1,835,873 | 0 | 50,000 | (894,832) | 991,041 | 991,041 | |||||||
| Total non-listed companies | 2,335,873 | 0 | 50,000 | (894,832) | 40,481,041 | 0 | 0 | 137,500 | (500,000) | (7,312,229) | (137,500) | 32,668,812 | |
| Listed companies | |||||||||||||
| Amplifon S.p.A. | 6,038,036 | 34,884,370 | 55,444,896 | (12,800,884) | 77,528,382 | 7,306,024 | 84,834,406 | ||||||
| Ferrari N.V. USD | 304,738 | 14,673,848 | 11,965,635 | 26,639,483 | (173,853) | 26,465,630 | |||||||
| Fiat Chrysler Automobiles N.V. | 0 | 16,625,205 | 3,995,042 | (9,497,387) | 11,122,860 | 3,239,242 | (7,127,818) | (7,234,284) | 0 | ||||
| Fiat Chrysler Automobiles N.V. USD | 1,576,000 | 17,656,453 | 13,238,521 | 30,894,974 | (4,258,487) | (1,184,033) | (5,549,432) | 19,903,022 | |||||
| Hugo Boss AG | 1,315,000 | 77,681,983 | (13,741,712) | 5,439,049 | 69,379,320 | 20,896,485 | (19,371,005) | 70,904,800 | |||||
| Moncler S.p.A. | 2,150,000 | 90,170,236 | 48,549,134 | (21,402,298) | 117,317,072 | 19,555,628 | (35,900,123) | (38,773,077) | 62,199,500 | ||||
| OVS S.p.A. | 7,800,000 | 0 | 12,268,197 | (3,734,997) | 8,533,200 | ||||||||
| Prysmian S.p.A. | 1,754,000 | 0 | 36,922,403 | (7,332,423) | 29,589,980 | ||||||||
| Servizi Italia S.p.A. | 548,432 | 2,938,289 | 1,977,770 | (1,241,564) | 3,674,495 | (1,963,387) | 1,711,108 | ||||||
| Other listed companies | 15,375,538 | 927,491 | 106,006 | (9,205,161) | 7,203,874 | 13,456 | (575,017) | 6,642,314 | |||||
| Total listed companies | 270,005,922 | 122,356,777 | (38,155,514) | (10,446,725) | 343,760,460 | 70,087,085 | 0 | 30,114,350 | (47,286,428) | (34,334,715) | (51,556,793) | 310,783,961 | |
| Total investments | 272,341,795 | 122,356,777 | (38,105,514) | (11,341,557) | 384,241,501 | 70,087,085 | 0 | 30,251,850 | (47,786,428) | (41,646,944) | (51,694,293) | 343,452,773 |
| Clubdue S.r.l. | StarTIP S.r.l. | TXR S.r.l. | |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | 1,308 | 26,050,355 | 26,978,782 |
| Current assets | 44 | 86,991 | 241,033 |
| Accrued liabilities and deferred income | 0 | 616 | 116 |
| Total assets | 1,434 | 26,137,962 | 27,219,931 |
| LIABILITIES | |||
| Equity | (3,252) | 1,654,704 | 27,142,644 |
| Payables | 4,686 | 24,483,258 | 77,287 |
| Total liabilities | 1,434 | 26,137,962 | 27,219,931 |
| INCOME STATEMENT | |||
| Revenue | 0 | 372 | 66,593 |
| Costs of production | (12,926) | (32,488) | (709,426) |
| EBITDA | (12,926) | (32,488) | (709,426) |
| Amortisation & Depreciation | (327) | (1,210) | 0 |
| Operating Loss | (13,253) | (33,326) | (709,426) |
| Financial income | 0 | 29,151 | 9,956,457 |
| Interest and other financial charges | 0 | (29,551) | (5,352) |
| Profit/(loss) before taxes |
(13,253) | (33,726) | 9,308,272 |
| Income taxes | 0 | 0 | 0 |
| Profit/(loss) | (13,253) | (33,726) | 9,308,272 |
In response to the negative equity of Euro 3,252 presented in the financial statements of Clubdue S.r.l at and for the year ended December 31, 2018, on February 13, 2019 its sole shareholders undertook a capital contribution of Euro 15,000.
| book value | ||||||||
|---|---|---|---|---|---|---|---|---|
| in Euro | No. of | historic | revaluations | shareholders loan | decrease | reclassification | increase | at 31/12/17 |
| share | cost | (write-downs) | in equity | or restitutions | (decrease) | |||
| fair value | ||||||||
| Asset Italia S.p.A. | 20.000.000 (1) | 49,900,000 | 49,900,000 | |||||
| Be Think, Solve, Execute S.p.A. | 31,582,225 | 16,596,459 | 16,596,459 | |||||
| ClubItaly S.r.l. | 31,197 | 37,436,400 | 37,436,400 | |||||
| Clubtre S.p.A. | 29,544 | 42,000 | 41,924,346 | (17,944,507) | 24,021,839 | |||
| Gatti & Co Gmbh | 10,700 | 275,000 | 275,000 | |||||
| Gruppo IPG Holding s.r.l. | 67,348 | 28,365,269 | (1,449,904) | 12,218,481 | 39,133,846 | |||
| Palazzari & Turries Limited | 90,000 | 225,000 | 225,000 | |||||
| Tip-Pre Ipo S.p.A. | 942,854 | 21,999,953 | 21,999,953 | |||||
| Total | 154,840,081 | 0 | 41,924,346 | (19,394,411) | 12,218,481 | 0 | 189,588,497 |
(1) Tracking shares not included
| Balance at 1.1.2018 | book value | |||||||
|---|---|---|---|---|---|---|---|---|
| in Euro | historic | revaluations | shareholders loan | decrease | reclassification | increase | at 31/12/18 | |
| cost | (write-downs) | in equity | or restitutions | (decrease) | ||||
| fair value | ||||||||
| Asset Italia S.p.A. | 49,900,000 | 36,297,441 | 86,197,441 | |||||
| Be Think, Solve, Execute S.p.A. | 16,596,459 | 16,596,459 | ||||||
| ClubItaly S.r.l. | 37,436,400 | 37,436,400 | ||||||
| Clubtre S.p.A. | 24,021,839 | 24,021,839 | ||||||
| Gatti & Co Gmbh | 275,000 | 275,000 | ||||||
| Gruppo IPG Holding s.r.l. | 39,133,846 | (1,449,905) | 37,683,941 | |||||
| Palazzari & Turries Limited | 225,000 | 225,000 | ||||||
| Tip-Pre Ipo S.p.A. | 21,999,953 | 787,072 | 22,787,025 | |||||
| Total | 189,588,497 | 37,084,513 | 0 | 0 | (1,449,905) | 0 | 225,223,105 |
| Key Audit Matters | Auditing procedures performed in response to key audit matters |
|---|---|
| Investments measured at fair value through other comprehensive income ("FVOCI") Note 12 to the separate financial statements "Investments measured at FVOCI" The company holds significant investments in entities listed on regulated markets and in non- listed entities, for an amount of Euro 343-453 thousand as of 31 December 2018, which represents 49% of the total asset. Those investments, reported under non-current assets, are measured at fair value through other comprehensive income ("FVOCI"). The fair value of investments in listed entities is based on the share prices. For unlisted entities, fair value is calculated using the valuation techniques considered most appropriate by management. We considered the measurement of investments at FVOCI a key matter in our audit of the Company's separate financial statements because of the materiality of the balance, the complexity of the valuation models used for investments in unlisted entities and the use of inputs that are not always observable. |
Our audit activities included, among other, the following procedures: understanding and evaluation of the effectiveness of internal control, with specific reference to the procedures applied by management to classify and measure at FVOCI investments in listed and unlisted entities; analysis of contracts relating to the main investments and of arrangements with the other investors in the same entity, in order to verify the correct qualification of investments and consequent appropriateness of the valuation method adopted; verification of share prices for listed ٠ entities: for unlisted entities, verification of fair ٠ value through an analysis of the valuation techniques applied by management and of the reasonableness of inputs used and underlying assumptions. Also, verification of the mathematical accuracy of the calculation models. Our verifications were performed with the support of valuation experts belonging to the PwC network. Finally, we verified the adequacy of disclosures in the notes to the financial |
| of a finite contract for a |
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