Quarterly Report • Sep 20, 2016
Quarterly Report
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(Translation from the Italian original which remains the definitive version)
| Corporate Boards | 3 |
|---|---|
| Interim Directors' Report | 4 |
| Condensed Consolidated Half-Year Financial Statements | |
| Financial Statements | 15 |
| Consolidated income statement Consolidated statement of comprehensive income Consolidated statement of financial position Statement of changes in consolidated shareholders' equity Consolidated statement of cash flows |
|
| Notes to the 2016 condensed consolidated half-year financial statements | |
| Attachments | 49 |
| Declaration of the Executive Officer for financial reporting Changes in AFS financial assets measured at fair value Changes in associates measured under the equity method |
Independent auditors' report
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
| Emanuele Cottino | Chairman |
|---|---|
| Paola Galbiati | Standing Auditor |
| Andrea Mariani | Standing Auditor |
| Laura Visconti | Alternate Auditor |
| Fabio Pasquini | 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 CFA and Self-Governance Code
The Tamburi Investment Partners group (hereafter the "TIP Group") reports a consolidated profit before taxes of Euro 15.6 million in the first half of 2016, compared to Euro 20.3 million in the same period of 2015 and shareholders' equity of Euro 443.9 million, in line with December 31, 2015, after the distribution of dividends of approximately Euro 9 million.
The confirmation of the outstanding results of the main shareholdings was the most important aspect. The 2016 half-year results indicate further growth - and in some cases significant.
In this context we still believe that the market values of many of the listed companies in which the TIP Group has invested is not reflective of their underlying fundamentals. In particular, Hugo Boss has been noticeably penalised - in our opinion wrongly - over the last 12 months and indeed Tamburi Investment Partners S.p.A. (hereafter "TIP") has significantly increased its investment.
In the first six months of 2016, TIP and TIP-Pre IPO S.p.A. (hereafter "TIPO") have concluded other major new investments, further confirming themselves as a key partner for excellent companies and entrepreneurs requiring the support to accelerate development projects and resolve family-based company or governance issues. The TIP Group operating model, the truly mid/long-term view and the major entrepreneurial component of TIP's shareholders are generating increasingly strong interest.
Among TIPO's operations, we highlight Beta Utensili and the increase in the iGuzzini group positions, while Furla is a more recent TIP investment.
In this case, in May 2016 the shareholders of Furla S.p.A. and TIP reached an agreement whereby TIP will underwrite a convertible loan of Euro 15 million, which will automatically convert into Furla S.p.A. shares on its listing. TIP also committed to underwrite, on the stock market listing, an additional Euro 15 million under identical financial conditions which will be proposed to the market. On the stock market listing TIP will also have the right to subscribe on its own behalf and on behalf of third parties chosen by them, a further share in the public offer within the "family & friends" tranche. Furla, founded in Bologna in 1927 by Aldo and Margherita Furlanetto and today headed by Giovanna Furlanetto, reports 2016 first half consolidated revenues of approximately Euro 193 million, with approximately 80% deriving from overseas, up 28% on the same period of 2015. The Furla Group has 415 stores in over 100 countries and more than 1,500 employees.
In June 2016 TIPO and some members of the Guzzini family set up GH S.r.l. in order to acquire 17.32% of the share capital of Fimag S.p.A., the parent company of iGuzzini S.p.A. in addition to holding other assets.
During the period the TIP share experienced far less volatility than the major Italian indices; at June 30, 2016, the TIP share was at the same level as the beginning of the year, while the FTSE MIB lost 24.4%.
The usual five-year TIP share chart (at June 30, 2016) highlights the very strong performance of the TIP share, improving 125.5%; the total return for TIP shareholders over the five years was 144.3% (annual average of 28.9%).
In the first six months of 2016 revenues amounted to Euro 2.3 million, compared to Euro 0.8 million in the same period of 2015 - thanks to the strong advisory performance.
The result for the period was significantly influenced by the spin-off of Ferrari from FCA, completed on January 4, 2016, with TIP receiving 367,422 Ferrari shares, of which (i) 174,000 shares related to the 1,740,000 FCA shares held at December 31, 2015 and (ii) 193,422 shares in relation to the mandatory convertible FCA loan. These transactions, in accordance with IFRS, although theoretically not beneficial as not generating profit, were accounted for with an effect equivalent to the distribution of dividends and therefore generated a gain to the income statement of approximately Euro 16 million, while a loss of Euro 14.2 million was incurred, equal to the difference between the market value of the FCA convertible loan as at December 31, 2015 and as at June 30, 2016.
This has resulted in (i) for the Ferrari shares from the spin-off the recognition of a historic cost of Euro 43.44 per share, while (ii) for the FCA shares and the convertible loan the maintenance of the book value prior to the spin-off, therefore excluding the "coupon" of the Ferrari shares, which from a technical viewpoint is truly incomprehensible and certainly a mistake on a philosophical level as significantly distorting reality.
The FCA shares and Ferrari shares booked in the financial statements as available-for-sale financial assets at June 30, 2016 resulted in a decrease of the fair value reserve of approximately Euro 5.3 million in relation to the FCA shares and of approximately Euro 5.0 million in relation to the Ferrari shares.
It is therefore clear that - due to the application of IFRS - the above accounting treatment has caused notable accounting effects and consequently the six-month period result is even less reflective of normal business developments than in the past.
The result for the period benefitted from the capital gain on the sale of the investments in Bolzoni S.p.A. and Noemalife S.p.A. for a total of Euro 10.3 million.
The sale of the investment in Bolzoni S.p.A. to Yale Materials Handling Inc. was completed in April 2016, with a net capital gain for the TIP Group of over Euro 6 million and gross income of over Euro 13 million. Yale Materials Handling had previously fully acquired Penta Holding S.r.l., the parent company with a 51% stake in Bolzoni, and promoted the consequent market buyout offer. The sale of the Bolzoni shares was executed prior to the market buyout offer.
In June 2016, the sale was completed of the investment in Noemalife S.p.A. to Dedalus S.p.A., with a net capital gain for the TIP Group of Euro 4 million and gross income of approximately Euro 10 million. The operation was undertaken as part of the acquisition and integration of Noemalife by Dedalus. TIP, also to support the operation's funding, converted its receivable into a vendor loan from Dedalus Holding S.p.A for the total of Euro 9,269,552, with a thirty-month maturity at a rate of 9%.
At June 30, 2016, TIP Group consolidated net debt totalled Euro 215.3 million– taking into account the partial convertible loan of Euro 40 million and the TIP 2014-2020 bond loan – but without considering the non-current AFS financial assets, considered by management as liquidity available in the short-term.
The principal difference from the consolidated net financial position at December 31, 2015 (approximately Euro 177.4 million) concerns the reduction in current financial assets of approximately Euro 35 million. This decrease, in addition to the previously stated change in the value of the FCA convertible loan for approximately Euro 14.2 million, relates to the sales in the period of approximately Euro 20.8 million.
At June 30, 2016, the principal investments held by TIP are illustrated below. The financial results reported refer, where available, to the 2016 Half-Year Report already approved by the Board of Directors of the investee's by the current date; in the absence of such figures, reference is made to the prior year Annual Report.
Clubsette S.r.l. (company which at June 30, 2016 held 14.0% of Ruffini Partecipazioni S.r.l.) TIP shareholding at June 30, 2016: 52.50%
In July 2013, TIP incorporated Clubsette S.p.A., previously S.r.l., ("Clubsette"), with a share capital of Euro 100,000, which included other investors, principally entrepreneurs and family offices, one of which qualifies as a related party pursuant to IAS 24; TIP holds 52.5% of the share capital of Clubsette.
On July 28, 2016, in accordance with the agreements reached, Clubsette S.r.l. received shares in Moncler previously held by Ruffini Partecipazioni S.r.l., equal to 5.125% of Moncler share capital.
In September the liquidation of Clubsette S.r.l. will be initiated to enable the allocation to shareholders of the relative pro-quota portion of Moncler S.p.A. shares, net of payments by the company of the payables and costs related to the operation.
In the first half of 2016, the Moncler group reported revenues of Euro 346.5 million, an adjusted Ebitda of Euro 78.3 million and a net profit of Euro 33.6 million. The progression of revenue growth and profitability achieved in recent years ensure Moncler's position at the top end of the most prestigious brands worldwide.
TIP shareholding at June 30, 2016: 51.00%
TXR, 51.0% subsidiary and for which the residual share is held by other co-investors (through UBS Fiduciaria S.p.A.) not qualified as related parties pursuant to IAS 24, in accordance with the club deals promoted by TIP, was incorporated for the purpose of acquiring a shareholding in Furn-Invest S.a.S., French company which now controls 99.9% of the Roche Bobois group.
Roche Bobois is the world leader in the creation and distribution of select high quality, design and luxury furniture products. The group operates the largest chain worldwide of high-end design furniture products, with a network – direct and/or franchising – comprising approximately 318 sales points (of which 111 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 Middle East.
In 2015, the Roche Bobois group grew further to generate aggregate revenues (including franchising stores) of over Euro 520 million, while consolidated revenues - which only refer to direct sales - totaled approximately Euro 252 million, reporting a consolidated Ebitda of over Euro 25 million and a net profit of Euro 10.6 million.
In the first six months of 2016, sales further increased 5%.
TIP shareholding at June 30, 2016: 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 July 2016, the BE Group acquired 51% of IQUII, "Digital Company", specialised in the development of web and mobile applications, the design of "wearables" and the management of the "Internet of Things" and with whom it shall establish digital development (web and mobile) synergies.
In the first six months of 2016, the BE Group reported revenues of Euro 65.6 million, up 26% on the same period of 2015, with Ebitda of Euro 8 million, compared to Euro 7.1 million in 2015 and a net profit of Euro 2.9 million, growing 29.5%.
TIP shareholding at June 30, 2016: 27.50%
Clubitaly S.p.A. ("Clubitaly"), a company owned 27.5% by TIP, was incorporated in February 2014 together with some entrepreneurial families and family offices, two of which qualify as related parties pursuant to IAS 24, and acquired from Eatinvest S.p.A. (previously Eatinvest S.r.l., a company controlled by the Farinetti family) 20% of Eataly S.r.l. ("Eataly"). Clubitaly currently holds 19.74% of Eataly.
Eataly, founded in 2003 by Oscar Farinetti, operates globally 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 being as a symbol of Italian food and of high quality Made in Italy products worldwide.
Eataly currently operate in Italy, America, the Middle and Far East with a network of approximately 30 stores that are already operational and is implementing a significant store opening plan in some of the world's major cities both through direct sales points and franchises. In August 2016, the New York World Trade Center sales point was opened, while upcoming openings are scheduled for Boston, Copenhagen, Los Angeles, two Italian cities and an additional two European cities.
In 2015, Eataly reported revenues of almost Euro 400 million and an Ebitda of just under Euro 30 million.
TIP shareholding at June 30, 2016: 35%
Clubtre is currently the largest shareholder in Prysmian with a shareholding of 5.856%. Prysmian is the world leader in the production of energy and telecommunication cables with 88 factories, 17 R&D centres and approximately 19,000 employees worldwide.
In the first six months of 2016, Prysmian reported consolidated revenues of Euro 3.785 billion, an adjusted Ebitda of approximately Euro 347 million, up 10.5%, and a net profit of Euro 124 million.
TIP shareholding at June 30, 2016: 23.64%, 33.72% fully diluted
Gruppo IPG Holding S.p.A. ("IPGH") currently holds 23,406,799 shares (equal to 21.5% of the share capital) of Interpump Group S.p.A., a world leader in the production of high pressure pistons pumps, power take-offs (PTOs), distributors and hydraulic systems.
In the first half of 2016 Interpump Group reported consolidated revenues of Euro 472.5 million, further growth of 1.2%, an Ebitda of Euro 102.3 million, compared to Euro 96.6 million in the same period of 2015 and a net profit of Euro 49.1 million.
TIP shareholding at June 30, 2016: 28.57%
In 2014, the TIP-Pre IPO S.p.A. ("TIPO") project was launched.
TIPO undertakes minority investments in Italian or overseas companies in the industrial or services sectors, with revenues of between Euro 30 and 200 million and a view to listing within five years on a regulated equity market.
TIPO may also subscribe to convertible bond, cum warrant or other "semi-equity" similar instruments, as well as share capital increases – including companies already listed on the stock exchange – provided that the transactions are to be considered as part of expansion projects, investments and/or growth of the respective activities.
At June 30, 2016, TIPO held the following shareholdings:
The company, of which TIPO currently holds 1.01%, has been listed on the Nasdaq Global Select Market since November 2015 and is one of the major molecular and nuclear medicine players, founded in 2002 by Italian academics as a "spin-off" of CERN (European Organisation for Nuclear Research) of Geneva to develop diagnostic applications and products and innovative therapeutics. AAA has 21 production and research and development centres and over 400 employees globally. The principal therapeutic product is Lutathera, a treatment for neuroendocrine cancer and currently in phase 3 of clinical testing. By September 2015, the clinical tests for Lutathera had reached their primary endpoint, demonstrating statistical and clinical significance and in April 2016 filing was presented to the FDA and EMA.
In the first half of 2016, AAA generated consolidated revenues of Euro 54.6 million, significantly up on Euro 43.0 million in the same period of 2015.
Beta, indirectly held by Betaclub S.r.l. for 49.917%, in turn controlled by TIPO with a 58.417% holding, is the undisputed leader in Italy in the distribution and production of high quality professional utensils, with 2015 consolidated revenues of over Euro 120 million. The company currently has 530 employees. Exports account for over 50% of turnover.
Beta reports first half revenues of Euro 67.8 million, up 7% on the same period of 2015, with an adjusted Ebitda of Euro 12.7 million, increasing over 45%.
TIPO holds 14.29% (15.85% on a fully diluted basis) of iGuzzini Illuminazione S.p.A., the leading Italian company - 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 works of arts and historic buildings, of retail spaces, offices, residential buildings, hotels, streets and urban areas. The company has 15 international branches and production facilities in Italy and China.
Group growth strengthened further in 2015, with revenues of Euro 223 million, the net debt substantially cleared and 2016 first six months revenues of Euro 114.3 million, up 4% and an Ebitda of Euro 14.6 million, improving 8% on the previous year.
In June 2016, TIPO, together with a number of members of the Guzzini family, set up GH S.r.l., of which it holds 47.83%, in order to acquire shareholdings in FIMAG S.p.A., parent company (75.89%, while 84.15% on a fully diluted basis) of iGuzzini Illuminazione S.p.A. The additional investment by TIPO was Euro 5.5 million.
TIP in addition holds:
Amplifon S.p.A. TIP shareholding at June 30, 2016: 4.24% Listed on the Italian Stock Exchange - STAR Segment.
The Amplifon Group is world leader in the distribution and personalised application of hearing aids with a 9% global market share and over 2,200 direct stores, over 3,400 shop-in-shops &
corners and a network of approximately 3,000 indirect sales points in the USA, employing over 11,500 globally.
In the first six months of 2016, the Amplifon group reported revenues of Euro 544.2 million (up 8.8%), an Ebitda of Euro 85.5 million, up 12%, and a net profit of Euro 29.6 million.
TIP shareholding at June 30, 2016: 18.11% Listed on the Alternative Investment Market (AIM) Italia
Digital Magics is the leading incubator-accelerator for Italian digital start-ups. It has incubated over 70 start-ups to date, with 57 still in portfolio. The "incubated" start-ups have created more than 500 jobs.
It has launched the largest innovation hub in partnership with Talent Garden (TAG), of which it holds approximately 28%; TAG is the leading European network of co-working spaces dedicated to digital and communication sector professionals. Currently it has 17 campuses in 4 European countries.
The start-ups incubated by Digital Magics in 2015 generated revenues of Euro 32.5 million, compared to Euro 18.7 million in 2014 - up 73%.
TIP shareholding at June 30, 2016: 0.38% of the ordinary share capital Listed on the Italian Stock Exchange and the New York Stock Exchange
Ferrari manufactures and distributes high-end sports cars and racing cars. The company possess technologies and intangibles difficult to replicate, ensuring the company's place as a meeting point of innovation, design, exclusivity and technology.
In the first six months of 2016 Ferrari reported revenues of Euro 1.486 billion, an adjusted Ebitda of Euro 395 million and net profit of Euro 175 million, record results for the company.
TIP shareholding at June 30, 2016: 0.13% of the ordinary share capital Listed on the Italian Stock Exchange and the New York Stock Exchange
The Fiat Chrysler Automobiles NV (FCA) group is the seventh largest car manufacturer in the world with the brands Abarth, Alfa Romeo, Chrysler, Dodge, Ferrari, Fiat, Fiat Professional, Jeep, Lancia, Maserati and Ram, in addition to SRT, the sports division dedicated to high performance vehicles, and Mopar, the post-sales service and spare parts brand. Group operations include also Comau (production systems), Magneti Marelli (components) and Teksid (foundries).
In the fist six months of 2016, the FCA group reported consolidated revenues of Euro 54.463 billion, an adjusted Ebit of Euro 3.007 billion, up 43%, and adjusted net profit of Euro 1.237 billion.
TIP shareholding at June 30, 2016: 1.28% Listed on the Frankfurt Stock Exchange
Hugo Boss is market leader in the premium and luxury segment of the medium-high and highend apparel market for men and women, with a diversified range from fashionable clothing to sportswear and footwear and accessories.
Hugo Boss products are distributed through over 7,600 shops (including direct, department stores, wholesale and franchising partners) worldwide, of which approximately 1,750 sales points in America, approximately 5,350 sales points in Europe and approximately 500 in Asia.
In the fist six months period of 2016 the Hugo Boss Group reported consolidated revenues of Euro 1,264.7 million, an adjusted Ebitda of approximately Euro 201 million and net profit of approximately Euro 49.5 million.
TIP shareholding at June 30, 2016: 12.07%
Azimut Benetti is a leading global yacht constructor - and particularly the world's most respected mega yacht constructor. The company has been ranked 16 times in the last 17 years as the "Global Order Book" leader, which includes the major constructors of yachts and mega yachts of greater than 24 meters worldwide.
It has 6 production sites, 11 boatyards and a sales network of 138 direct and/or indirect dealers across over 70 countries.
The company's year-end is August 31.
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; for details reference should be made to Attachment 1.
Related party transactions are detailed in Note 31.
On July 21, 2016 ASSET ITALIA was established with the contribution, in addition to TIP, of approximately 30 family offices, for an endowment capital of Euro 550 million. ASSET ITALIA will act as an investment holding and will give shareholders the chance to choose – every time that a proposal arises - the individual investments and to receive the shares of the specific class related to the investment subscribed. Within five years a business combination between ASSET ITALIA and TIP shall take place.
TIP holds 20% of ASSET ITALIA, 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.
In relation to the ASSET ITALIA project and the proposed merger, the Shareholders' Meeting of July 14, 2016 conferred a proxy to the Board of Directors, in accordance with Article 2443 of the Civil Code, to increase the share capital by a maximum amount of Euro 1,500,000,000 against payment via the issue of ordinary shares with the same characteristics as those outstanding, with exclusion of the option right pursuant to paragraph 4.1 of the Italian Civil Code, to service the contribution in kind of ASSET ITALIA shares by the ASSET ITALIA shareholders (except from TIP).
The Shareholders' Meeting also approved the proposal to eliminate the nominal value of TIP shares.
On July 4, 2016, the investee Gruppo IPG Holding S.p.A. increased its holding in Interpump Group S.p.A. from 20.23% to 21.5%, acquiring 1,380,000 shares.
On July 28, 2016, in execution of the agreements signed, Clubsette S.r.l. received a share allocation of 5.125% of Moncler S.p.A., previously held by Ruffini Partecipazioni S.r.l.; the TIP Group through this operation, and excluding any subsequent sale of shares to third parties, generated, according to IFRS, a consolidated gain of approximately Euro 80 million.
On August 13, 2016, the first exercise period of the Tamburi Investment Partners S.p.A. 2015 - 2020 Warrants concluded, with the exercise of 3,885 warrants, a relative share capital increase of Euro 2,020.20 and the issue of 3,885 new shares.
In August 2015, Furla S.p.A.'s Shareholders' Meeting approved the entry of TIP following the agreements signed in May 2016, according to which Furla will issue a convertible loan of Euro 15 million which will be fully subscribed by TIP.
In a truly challenging market, TIP continues to grow, invest and launch new initiatives, ensuring its continued role as a key partner for outstanding companies.
Almost all of the companies invested in have confirmed their leadership of their respective sectors and hold exceptional assets.
In relation to the principal risks and uncertainties related to the Group, reference should be made to Note 28.
At June 30, 2016, treasury shares in portfolio totalled 1,128,160, equal to 0.76% of the share capital. No purchases or sales of treasury shares were made after June 30, 2016.
For the Board of Directors The Chairman Giovanni Tamburi
Milan, September 7, 2016
| Six months ended | Six months ended | ||
|---|---|---|---|
| (in Euro) | June 30, 2016 | June 30, 2015 | Note |
| Revenue from sales and services | 2,311,431 | 815,792 | 4 |
| Other revenues | 96,581 | 54,892 | |
| Total revenues | 2,408,012 | 870,684 | |
| Purchases, service and other costs | (898,515) | (993,438) | 5 |
| Personnel costs | (4,412,523) | (4,231,511) | 6 |
| Amortisation, depreciation & write-downs | (25,273) | (15,431) | |
| Operating profit/(loss) | (2,928,299) | (4,369,696) | |
| Financial income | 31,387,421 | 27,072,685 | 7 |
| Financial charges | (18,217,121) | (5,891,136) | 7 |
| Profit before adjustments to investments | 10,242,001 | 16,811,853 | |
| Share of profit/(loss) of associates measured under | |||
| equity method | 6,743,385 | 3,629,842 | 8 |
| Adjustments to AFS financial assets | (1,338,142) | (93,313) | 9 |
| Profit before taxes | 15,647,244 | 20,348,382 | |
| Current and deferred taxes | (1,111,061) | (800,650) | 10 |
| Net Profit /(loss) | 14,536,183 | 19,547,732 | |
| Profit/(loss) attributable to the shareholders of the parent company |
14,690,579 | 19,721,307 | |
| Profit/(loss) attributable to minority interests | (154,396) | (173,575) | |
| Basic earnings per share | 0.10 | 0.14 | 22 |
| Diluted earnings per share | 0.08 | 0.14 | |
| Number of shares in circulation | 146,667,442 | 140,515,729 |
| (in Euro) | Six months ended June 30, 2016 |
Six months ended June 30, 2015 |
Note |
|---|---|---|---|
| Income through P&L | |||
| Income and charges recorded directly to equity | 21 | ||
| Increase/(decrease) in non-current AFS financial assets value | (18,336,215) | 78,031,841 | |
| Unrealised profit/(loss) | (18,502,524) | 81,232,476 | |
| Tax effect | 166,309 | (3,200,635) | |
| Increase/(decrease) in associates measured under the equity method |
9,248,471 | 23,691,540 | |
| Unrealised profit/(loss) | 9,248,471 | 23,691,540 | |
| Tax effect | |||
| Increase/(decrease) in AFS current financial assets | (183,238) | (609,642) | |
| Unrealised profit/(loss) | (281,338) | (818,146) | |
| Tax effect | 98,100 | 208,504 | |
| Income/(loss) not through P&L | |||
| Employee benefits | (22,715) | 28,681 | |
| Total income and charges recorded directly to equity | (9,293,697) | 101,142,420 | |
| Net Profit | 14,536,183 | 19,547,732 | |
| Total income and charges recorded | 5,242,486 | 120,690,152 | |
| Total income and charges attributable to the shareholders of the parent company |
(708,484) | 91,423,934 | |
| Total income and charges attributable to minority interests | 5,950,970 | 29,266,218 | |
| Total income and charges per share | 0.04 | 0.86 | |
| Total diluted income and charges per share | 0.03 | 0.85 |
Shares in circulation 146,667,442 140,515,729
| (in Euro) | June 30, 2016 | December 31, 2015 | Note |
|---|---|---|---|
| Non-current assets | |||
| Property, plant and equipment | 190,477 | 114,094 | |
| Goodwill | 9,806,574 | 9,806,574 | 11 |
| Other intangible assets | 480 | 1,310 | |
| Associates measured under the equity method | 207,654,712 | 185,498,596 | 12 |
| AFS financial assets | 428,697,182 | 429,418,286 | 13 |
| Financial receivables | 18,091,645 | 8,218,972 | 14 |
| Tax receivables | 136,115 | 293,787 | 15 |
| Deferred tax assets | 491,790 | 824,940 | 16 |
| Total non-current assets | 665,068,975 | 634,176,559 | |
| Current assets | |||
| Trade receivables | 801,514 | 2,581,564 | 17 |
| Current financial assets | 13,503,310 | 26,946,127 | 18 |
| AFS financial assets | 0 | 21,613,809 | |
| Cash and cash equivalents | 3,928,289 | 2,011,105 | 19 |
| Tax receivables | 567,967 | 442,172 | 15 |
| Other current assets | 236,526 | 728,564 | |
| Total current assets | 19,037,606 | 54,323,341 | |
| Total assets | 684,106,581 | 688,499,900 | |
| Shareholders' Equity | |||
| Share capital | 76,853,713 | 76,853,713 | 20 |
| Reserves | 204,347,656 | 221,052,483 | 21 |
| Retained earnings | 56,977,958 | 41,139,559 | 21 |
| Result of the parent company | 14,690,579 | 25,233,887 | 22 |
| Total shareholders' equity attributed to the shareholders | |||
| of the parent company | 352,869,906 | 364,279,642 | |
| Shareholders' equity attributable to minority interests | 91,013,814 | 85,062,843 | |
| Total Shareholders' Equity | 443,883,720 | 449,342,485 | |
| Non-current liabilities | |||
| Post-employment benefits | 258,281 | 226,451 | 23 |
| Financial payables | 138,749,695 | 138,594,609 | 24 |
| Deferred tax liabilities | 2,068,311 | 2,239,997 | 16 |
| Total non-current liabilities | 141,076,287 | 141,061,057 | |
| Current liabilities | |||
| Trade payables | 483,115 | 349,324 | |
| Current financial liabilities | 93,987,866 | 89,417,843 | 25 |
| Tax payables | 1,232,795 | 1,792,375 | 26 |
| Other liabilities | 3,442,798 | 6,536,816 | 27 |
| Total current liabilities | 99,146,574 | 98,096,358 | |
| Total liabilities | 240,222,861 | 239,157,415 | |
| Total shareholders' equity and liabilities | 684,106,581 | 688,499,900 |
| Share | Share | Legal Extraordinary Revaluation | Treasury | Other | IFRS | Merger | Retained | Result | Net Equity Net Equity | Result | Net Equity | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| capital | premium | reserve | reserve | reserve | shares | reserves | reserve | surplus | earnings for the period shareholders minorities for the period | ||||||
| reserve | AFS Financial | reserve | business | shareholders of parent | minorities | ||||||||||
| assets | combination | of parent | |||||||||||||
| At January 1, 2015 consolidated | 74,609,847 | 95,114,530 14,148,939 | 0 50,813,899 (13,606,493) | 4,347,294 | (483,655) | 5,060,152 23,422,765 26,798,061 280,225,339 72,379,694 | 1,738,581 354,343,615 | ||||||||
| Change in fair value of financial assets | |||||||||||||||
| available-for-sale | 48,592,048 | 48,592,048 | 29,439,793 | 78,031,841 | |||||||||||
| Change in fair value of investments measured at equity | 23,225,042 | 466,498 | 23,691,540 | 23,691,540 | |||||||||||
| Change in fair value of current financial assets | (609,642) | (609,642) | (609,642) | ||||||||||||
| Employee benefits | 28,681 | 28,681 | 28,681 | ||||||||||||
| Other changes | 0 | 0 | |||||||||||||
| Total income and charges recorded directly to equity | 71,207,448 | 495,179 | 71,702,627 29,439,793 | 101,142,420 | |||||||||||
| Profit (loss) H1 2015 | 19,721,307 | 19,721,307 | (173,575) | 19,547,732 | |||||||||||
| Total statement of comprehensive income | 71,207,448 | 19,721,307 91,423,934 29,439,793 | (173,575) 120,690,152 | ||||||||||||
| Net equity attributable to minority shareholders | 0 | 0 | |||||||||||||
| Transfer to equity revaluation reserve | 0 | 0 | |||||||||||||
| Allocation profit 2014 | 773,030 | 26,025,031 (26,798,061) | 0 | 1,738,581 (1,738,581) | 0 | ||||||||||
| Distribution of dividends | 0 | 0 | |||||||||||||
| Other changes | (8,308,237) | (8,308,237) | (8,308,237) | ||||||||||||
| Warrant conversion | 2,243,866 | 6,386,388 | 8,630,254 | 8,630,254 | |||||||||||
| Acquisition of treasury shares | (1,098,000) | (1,098,000) | (1,098,000) | ||||||||||||
| Sale of treasury shares | 76,979 | 2,266,801 | 2,343,780 | 2,343,780 | |||||||||||
| At June 30, 2015 consolidated | 76,853,713 101,577,897 14,921,969 | 0 122,021,347 (12,437,692) | 4,347,294 | (483,655) | 5,060,152 | 41,139,559 | 19,721,307 373,217,070 103,558,068 | (173,575) 476,601,563 |
| At January 1, 2016 consolidated | 76,853,713 113,531,528 14,921,969 | 0 90,819,062 (1,843,381) | (953,192) | (483,655) | 5,060,152 | 41,139,559 25,233,887 364,279,642 85,301,478 | (238,635) 449,342,486 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in fair value of financial assets | |||||||||||||
| available-for-sale | (24,441,581) | (24,441,581) | 6,105,366 | (18,336,215) | |||||||||
| Change in fair value of investments measured at equity | 3,830,081 | 5,418,390 | 9,248,471 | 9,248,471 | |||||||||
| Change in fair value of current financial assets | (183,238) | (183,238) | (183,238) | ||||||||||
| Employee benefits | (22,715) | (22,715) | (22,715) | ||||||||||
| Other changes | 0 | 0 | |||||||||||
| Total income and charges recorded directly to equity | (20,794,738) | 5,395,675 | (15,399,063) | 6,105,366 | 6,105,366 | ||||||||
| Profit (loss) H1 2016 | 14,690,579 | 14,690,579 | (154,396) | 14,536,183 | |||||||||
| Total statement of comprehensive income | (20,794,738) | 5,395,675 | 14,690,579 | (708,484) | 6,105,366 | (154,396) | 5,242,486 | ||||||
| Net equity attributable to minority shareholders | 0 | ||||||||||||
| Transfer to equity revaluation reserve | 0 | 0 | |||||||||||
| Allocation profit 2015 | 448,774 | 24,785,113 (25,233,887) | 0 | (238,635) | 238,635 | 0 | |||||||
| Other changes | 0 | 0 | |||||||||||
| Distribution of dividends | (8,946,714) | (8,946,714) | (8,946,714) | ||||||||||
| Warrant conversion | 0 | 0 | |||||||||||
| Acquisition of treasury shares | (1,754,538) | (1,754,538) | (1,754,538) | ||||||||||
| Sale of treasury shares | 0 | 0 | |||||||||||
| At June 30, 2016 consolidated | 76,853,713 113,531,528 15,370,743 | 0 70,024,324 (3,597,919) | 4,442,483 | (483,655) | 5,060,152 56,977,958 14,690,579 352,869,906 | 91,168,209 | (154,396) 443,883,720 |
| thousands of Euro | Six months ended June 30, 2016 |
Six months ended June 30, 2015 |
|
|---|---|---|---|
| A.- | OPENING CASH AND CASH EQUIVALENTS | (55,739) | (18,475) |
| B.- | CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net Result | 14,536 | 19,548 | |
| Amortisation & Depreciation | 25 | 15 | |
| Write-downs/(revaluation) of investments | (5,405) | 93 | |
| Write-downs (revaluations) of current financial assets | 0 | (5,767) | |
| Gain on sale of AFS financial assets | (10,330) | (14,065) | |
| Changes in "employee benefits" | 32 | (26) | |
| Charges on bonds | 3,362 | 2,299 | |
| Other changes | 0 | 4,702 | |
| Change in deferred tax assets and liabilities | 161 | 801 | |
| 2,381 | 7,600 | ||
| Decrease/(increase) in trade receivables | 1,780 | (317) | |
| Decrease/(increases) in other current assets | 492 | 149 | |
| Decrease/(increase) in tax receivables | 32 | (512) | |
| Decrease/(increase) in financial receivables | (9,873) | (4,111) | |
| Decrease/(increase) in other current asset securities | 35,057 | 41,898 | |
| (Decrease)/increase in trade payables | 134 | (38) | |
| (Decrease)/increase in financial payables | (2,788) | (7,280) | |
| (Decrease)/increase of tax payables | (559) | (489) | |
| (Decrease)/increase in other current liabilities | (3,094) | (6,390) | |
| Cash flow from operating activities | 23,562 | 30,510 | |
| C.- | CASH FLOW FROM | ||
| INVESTMENTS IN FIXED ASSETS | |||
| Intangible and tangible assets | |||
| investments / divestments | (80) | (70) | |
| Financial assets | |||
| investments | (39,708) | (92,331) | |
| divestments | 24,754 | 28,275 | |
| Cash flow from investing activities | (15,034) | (64,126) |
| thousands of Euro | Six months ended | Six months ended | |
|---|---|---|---|
| June 30, 2016 | June 30, 2015 | ||
| D.- | CASH FLOW FROM | ||
| FINANCING | |||
| Loans | |||
| New loans | 0 | 114,043 | |
| Borrowing costs on loans | (3,362) | (2,299) | |
| Share capital | |||
| Share capital increase and capital contributions on account | 0 | 8,630 | |
| Reductions from acquisition/sale treasury shares | (1,754) | 1,246 | |
| Payment of dividends | (8,947) | (8,308) | |
| Change in reserves | (61) | 0 | |
| Cash flow from financing activities | (14,124) | (731) | |
| E.- | NET CASH FLOW FOR THE PERIOD | (5,596) | (34,347) |
| F. | CLOSING CASH AND CASH EQUIVALENTS | (61,335) | (52,822) |
| The breakdown of the net available liquidity was as follows: | |||
| Cash and cash equivalents | 3,928 | 1,160 | |
| Bank payables due within one year | (65,263) | (53,982) | |
| Closing cash and cash equivalents | (61,335) | (52,822) |
The TIP Group is an independent investment/merchant bank focused on Italian medium-sized companies, which undertakes activities of:
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.
The 2016 condensed consolidated half-year financial statements were approved by the Board of Directors on September 7, 2016.
The condensed consolidated half-year financial statements were prepared on a going concern basis 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, and particularly the condensed consolidated half-year financial statements comply with IAS 34.
In accordance with IAS 1, these condensed consolidated half-year financial statements are comprised of the income statement, the statement of comprehensive income, the statement of financial position, the change in shareholders' equity, the statement of cash flow and the explanatory notes, together with the Directors' Report. The condensed consolidated half-year financial statements were prepared in units of Euro, without decimal amounts.
The condensed consolidated half-year financial statements were prepared as per IAS 1, while the Explanatory Notes were drawn up in condensed form, applying the exemption under IAS 34 and therefore not including all information required for financial statements drawn up as per IFRS.
The accounting standards utilised for the preparation of the present condensed consolidated halfyear financial statements are consistent with those utilised for the preparation of the consolidated financial statements for the year ended December 31, 2015, except for those outlined in the "new accounting standards" paragraph.
The income statement, the statement of comprehensive income statement and the consolidated statement of cash flows at June 30, 2015 and the statement of financial position at December 31, 2015 were utilised for comparative purposes.
During the year, no special circumstances arose requiring recourse to the exceptions allowed under IAS 1.
The 2016 condensed consolidated half-year financial statements were prepared in accordance with the general cost criterion, with the exception of derivative financial instruments measured at fair value, of the investments in associates valued under the equity method and of the current financial assets and financial assets available for sale measured at fair value.
Their preparation 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 accounting principles utilised in the preparation of the condensed consolidated half-year financial statements and the composition and changes in the individual accounts are illustrated below.
Amendments to IAS 19 - Employee Benefits (Defined Benefit Plans - Employee contributions)
On December 17, 2014, EU Regulation No. 29-2015 was issued which enacts at European level some modifications of IAS 19 (Employee Benefits). In particular, these amendments have the objective to clarify the accounting treatment of contributions paid by employees within a defined benefit plan.
Improvements to IFRS (2010–2012 cycle)
On December 17, 2014 EU Regulation 28-2015 was issued which enacted at EU level some improvements to IFRS for the period 2010–2012. In particular, we highlight:
amendment introduces additional financial statement disclosure. In particular, a brief description upon the manner in which the segments are aggregated should be provided and of which economic indicators are considered to establish whether the operating segments have similar economic characteristics;
IAS 34: it is clarified that the disclosure required in interim financial statements should be presented or incorporated through cross reference between the interim financial statements and the part of the interim financial report in which it is included (for example the Directors' Report or the comment upon risk's report).
The application of the new accounting standards and the amendments to the existing accounting standards reported above do not have a significant impact on the Group consolidated financial statements.
would apply to customers in case such assets and services included in the contract were sold individually. The company on occasion incurs costs, such as sales commissions, to obtain or ensure execution of a contract. These costs, where certain conditions are met, are capitalised and recognised in the income statement over the duration of the contract. The standard specifies, in addition, that the sales prices should be adjusted where containing a significant financial component. IFRS 15 will be effective from the first quarter of financial years beginning January 1, 2018, except for any deferments following endorsement of the standard by the European Union, not yet implemented at the present condensed consolidated half-year reporting date.
accounting treatment of gains or losses from transactions with joint ventures or associates measured at equity. At the condensed consolidated half-year reporting date, the date from which the new provisions will apply has not yet been set.
Any impacts on the Group consolidated financial statements from the adoption of these amendments are under evaluation.
The consolidation scope includes the parent company 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 June 30, 2016, the consolidation scope included the companies TXR S.r.l., Clubsette S.r.l. and Clubuno S.r.l.
The details of the subsidiaries were as follows:
| Company | Registered office | Share capital | Percentage held |
|---|---|---|---|
| Clubsette S.r.l. | Milan | 100,000 | 52.50% |
| Clubuno S.r.l. | Milan | 10,000 | 100% |
| TXR S.r.l. | Milan | 100,000 | 51.00% |
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 adopted by the Parent Company.
All infragroup 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 main accounting policies adopted for the preparation of the condensed consolidated financial statements at June 30, 2016 are disclosed below.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and 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.
Associates 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 associates 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 condensed consolidated half-year financial statements includes the share of profits and losses of the investees recognised under the equity method, net of any adjustments necessary to align accounting principles, on the date in which significant influence commences or the joint control until the date such influence or control ceases. When the share of the loss of an investment recognised under the net 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.
AFS financial assets are comprised of other investments (generally with holdings below 20%) and are measured at fair value with changes through equity. When the reduction in value compared to the acquisition cost constitutes "loss in value", the effect of the adjustment is recognised through the income statement. Where the conditions that resulted in the write-down no longer exist, the recovery is recorded through equity.
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 are more discretional (market model – level 3).
Within the analysis which the Group carried out regarding the introduction of the new Accounting Standards illustrated above, and in particular IFRS 9, the necessity to review some measurement criteria previously applied in relation to the Accounting Standards in force should be noted. Specifically, in consideration of the current market context, the threshold related to the prolonged presence of market values below cost for listed equities classified as available for sale financial assets, previously determined as 18 months, is no longer considered adequate to the circumstances which at the time gave rise to the above-mentioned determination. In particular, the high volatility of the financial markets in the first months of 2016, based on the nature of the investment Portfolio of the Group, suggested the redetermination of the above-mentioned threshold to 36 months, from the year 2016, in order not to record such atypical volatility in the income statement through any write-downs, in the firm belief that the new time profile cited above more adequately reflects the current situation of an effective "prolonged" time period.
Therefore, in relation to equity securities listed in active markets it is considered that the Group, in relation to the nature of its investment portfolio in small/mid cap Italian companies, recognises a reduction of value in the presence of a market price at the balance sheet date lower than the purchase price by at least 50% or in the prolonged presence for over 36 months of a market value below cost. In any case even the securities that have reported values which are within the above-mentioned threshold are subject to analysis and – where considered appropriate – written down for impairment. The adoption of the new timing did not impact the present halfyear report.
Receivables are recorded at fair value and subsequently measured at amortised cost. They are adjustments for sums considered uncollectible.
They concern non-derivative financial assets comprising investments made under capital management and in bond securities, made for the temporary utilisation of liquidity, valued at fair value with changes recorded through equity. When the reduction in value compared to the acquisition cost constitutes "loss in value", the effect of the adjustment is recognised through the income statement. Where the reasons for the loss in value no longer exist, the recovery is
recognised to equity in the case of equity instruments. In the case of bond securities, where the conditions resulted in the write-down no longer exists, the recovery is recognised to the income statement.
In relation to the fair value measurement methods utilised reference should be made to the previous paragraph "Non-current AFS financial assets".
Current financial assets comprise securities which represent short-term commitments of available liquidity, held for trading purposes. These are therefore classified as trading instruments and measured at fair value with changes recorded through the income statement.
The purchases and sales of securities are recorded and cancelled at the settlement date.
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.
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. In particular, the convertible bonds record, based on the indications contained in IAS 32, the financial liability components separately (measured at amortised costs), and the implicit options assigned to the holders of the instruments to covert part of the loan into an equity instrument.
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 cash 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 as a payable based on the value assumed by the plan at each reporting date.
The treasury shares held by the parent company are recorded as a reduction from equity. The original cost of the treasury shares and the revenues deriving from any subsequent sale are recognised as equity movements.
Revenues are recognised to the extent that their fair value can be reliably calculated and based on the probability that their economic benefits will be received. According to this type of operation, the revenues are recognised on the basis of the specific criteria indicated below:
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 investments and shares are recorded on an accruals basis, 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 condensed consolidated half-year financial statements is illustrated below:
statement of financial positon: in accordance with IAS 1, the assets and liabilities must be classified between current and non-current or, alternatively, according to the liquidity order. The Group chose the classification criteria as current and non-current;
income statement and statement of comprehensive income: IAS 1 requires alternatively classification based on the nature or destination of the items. The Group decided to present the accounts by nature of expenses;
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, also in relation to execution activity, the activity is organised with the objective to render the "on-call" commitment of professional staff in advisory or equity activity 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 costs 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 highly distort the level of profitability of the segments of activity.
In the present condensed consolidated half-year 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".
| Six months ended | Six months ended | |
|---|---|---|
| Euro | June 30, 2016 | June 30, 2015 |
| Revenue from sales and services | 2,311,431 | 815,792 |
| Total revenues | 2,311,431 | 815,792 |
The account comprises:
| Six months ended | Six months ended | |
|---|---|---|
| Euro | June 30, 2016 | June 30, 2015 |
| Services | 615,361 | 723,101 |
| Rent, leasing and similar costs | 174,617 | 189,045 |
| Other charges | 108,537 | 81,292 |
| Total | 898,515 | 993,438 |
Service costs mainly relate to professional and legal consultancy, general expenses and commercial expenses.
Other charges principally include non-deductible VAT.
The account comprises:
| Euro | Six months ended June 30, 2016 |
Six months ended June 30, 2015 |
|---|---|---|
| Wages and salaries | 691,038 | 608,494 |
| Social security charges | 218,765 | 194,540 |
| Directors' fees | 3,474,875 | 3,383,970 |
| Post-employment benefits | 27,845 | 44,507 |
| Total | 4,412,523 | 4,231,511 |
The account "Wages and salaries" and "Directors' fees" includes fixed and variable remuneration matured in the period.
At June 30, 2016, the number of TIP employees was as follows:
| Six months ended June 30, 2016 |
Six months ended June 30, 2015 |
|
|---|---|---|
| White collar & apprentices | 12 | 11 |
| Managers | 1 | 1 |
| Executives | 4 | 3 |
| Total | 17 | 15 |
The Chairman/CEO and Vice Chairman/Executive Director are not employees either of TIP or of Group companies.
The account comprises:
| Six months ended | Six months ended | ||
|---|---|---|---|
| Euro | June 30, 2016 | June 30, 2015 | |
| 1. | Investment income | 29,835,373 | 16,958,217 |
| 2. | Income from securities recorded as current assets | 1,304,510 | 9,890,770 |
| Other income | 247,538 | 223,698 | |
| Total financial income | 31,387,421 | 27,072,685 | |
| 3. | Interest and other financial charges | (18,217,121) | (5,891,136) |
| Total financial charges | (18,217,121) | (5,891,136) | |
| Net financial income | 13,170,300 | 21,181,549 |
| Six months ended | Six months ended | |
|---|---|---|
| Euro | June 30, 2016 | June 30, 2015 |
| Gain on disposal of investments | 10,330,400 | 10,647,502 |
| Gain on Ferrari N.V. share | 15,960,812 | 0 |
| Dividends | 3,457,113 | 2,893,190 |
| Gains on liquidation of investments | 0 | 3,417,525 |
| Other | 87,048 | 0 |
| Total | 29,835,373 | 16,958,217 |
In the first half of 2016, the gains relate to the sale of the following investments (Euro):
| Bolzoni S.p.A. | 6,326,818 |
|---|---|
| Noemalife S.p.A. | 4,003,582 |
| Total | 10,330,400 |
Following the spin-off of Ferrari from FCA on January 4, 2016, the TIP Group received 174,000 Ferrari shares based on the FCA shares held at December 31, 2015 and 193,422 based on FCA convertible loan. These transactions, in accordance with IFRS, were recorded for accounting purposes as a dividend distribution and therefore generated a gain in the income statement of approximately Euro 16 million, equal to the market value of the Ferrari shares communicated by the Stock Exchange on January 4, 2016. On the other hand, the decrease in the value of the convertible loan following the distribution of the Ferrari shares and the consequent performance of the FCA shares resulted in a charge to the income statement in the half-year of approximately Euro 14.2 million. The net effect of the approximately Euro 16 million gain and the charge of approximately Euro 14.2 million above was a gain of approximately Euro 1.8 million booked in the income statement in the half-year.
At equity level, the above operations resulted in a decrease in the fair value reserve attributable to FCA of approximately Euro 5.3 million and a further decrease of Euro 5 million to Ferrari.
Similarly to Ferrari, following the spin-off of RCS by FCA, on May 2, 2016 the allocation of RCS shares to the FCA shareholders was completed. Through this operation, the TIP Group received 117,878 RCS shares. As for the Ferrari operation, the allocation of RCS shares had an equivalent effect as a dividend distribution and therefore generated a gain in the income statement of Euro 69,548, equal to the RCS share value at May 2, 2016.
In the first half of 2016, the TIP Group received dividends from the following shareholdings:
| Euro | |
|---|---|
| Hugo Boss AG | 2,534,000 |
| Amplifon S.p.A. | 410,132 |
| Ferrari N.V. | 324,347 |
| Others | 188,634 |
| Total | 3,457,113 |
| Six months ended | Six months ended | |
|---|---|---|
| Euro | June 30, 2016 | June 30, 2015 |
| Gain on sale of securities | 313,216 | 1,962,809 |
| Gain from revaluation of securities | 0 | 5,767,497 |
| Exchange differences on sale of securities | 0 | 386,347 |
| Interest on securities in current assets | 991,294 | 1,774,117 |
| Total | 1,304,510 | 9,890,770 |
| Six months ended | |
|---|---|
| June 30, 2016 | June 30, 2015 |
| 14,219,854 | 0 |
| 3,362,407 | 3,304,548 |
| 0 | 1,409,599 |
| 634,860 | 1,176,989 |
| 18,217,121 | 5,891,136 |
| Six months ended |
The loss on securities valuations relates to the application of IFRS to the performance of the investment in the FCA convertible loan, resulting in a loss also due to the spin-off of the investment in Ferrari N.V. This negative impact should be, at least from a managerial profile, considered jointly with the income of Euro 16 million outlined in Note 7.1.
"Interest on bonds" refers to that matured in favour of the partial convertible bond of Euro 40 million, as well as the 2014-2020 TIP Bond of Euro 100 million calculated in accordance with the amortised cost method applying the effective interest rate.
The Shareholders' Meeting of April 29, 2016 approved the partial amendment of the "2014-2016 TIP Incentive Plan", renamed as the "2014-2021 Incentive Plan", establishing, further to the features of the "2014-2016 TIP Incentive Plan" (including the enactment conditions and requirements), the possibility to assign the options over the 2016/2019 period and their exercise until 2021. No options relating to this incentive plan have yet been assigned.
The account comprises:
| Six months ended | Six months ended | |
|---|---|---|
| Euro | June 30, 2016 | June 30, 2015 |
| Clubtre S.p.A. | 1,901,726 | 1,557,923 |
| Gruppo IPG Holding S.p.A. | 3,237,642 | 1,780,000 |
| Tip-Pre Ipo S.p.A. -TIPO | 848,971 | 301,671 |
| Be Think, Solve, Execute S.p.A. | 644,308 | 0 |
| Clubitaly S.p.A. | 100,220 | (80,284) |
| Data Holding 2007 S.r.l. | 0 | 70,532 |
| Gatti & Co Gmbh | 10,518 | 0 |
| Total | 6,743,385 | 3,629,842 |
Reference should be made to note 12 "Investments in associates measured under the equity method".
| Six months ended | Six months ended | |
|---|---|---|
| Euro | June 30, 2016 | June 30, 2015 |
| Write-down of AFS financial assets | (1,338,142) | (93,313) |
| Total | (1,338,142) | (93,313) |
The write-down in the period principally concerned the investment in Monrif S.p.A. Reference should be made to attachment 1 of these Explanatory Notes for a breakdown of the write-downs.
The breakdown of income taxes is as follows:
| Six months ended | Six months ended | |
|---|---|---|
| Euro | June 30, 2016 | June 30, 2015 |
| Current income taxes | 685,188 | 462,611 |
| Deferred tax assets | 333,151 | 287,995 |
| Deferred tax charges | 92,722 | 50,044 |
| Total | 800,650 | |
| 1,111,061 |
In the first half of 2016 the company recognised directly to shareholders' equity a decrease in deferred tax liabilities amounting to Euro 264,409 in relation to the decrease in the value of the financial assets available-for-sale.
"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.
At June 30, 2016, no indications arose that the above-stated goodwill had incurred a loss in value and therefore no impairment test was made.
Investments in associates, totaling Euro 207,654,712, relate to:
For the changes in the investments in associates reference should be made to attachment 2.
The book value of the investment in TIPO increased compared to December 31, 2015, principally following the execution in January 2016 of a share capital increase, subscribed proquota by TIP.
During the period, the book value of the investments in Clubtre, TIPO and BE reduced following the distribution of dividends totaling Euro 2,121,408.
The financial assets refer to minority investments in listed and non-listed companies.
| Euro | June 30, 2016 | December 31, 2015 |
|---|---|---|
| Investments in listed companies | 175,525,347 | 189,379,051 |
| Investments in non-listed companies | 253,171,835 | 240,039,235 |
| Total | 428,697,182 | 429,418,286 |
The changes in the investments measured at fair value are shown in Attachment 1.
In relation to the effects of the measurement of investments in listed companies, reference should be made to note 9 and note 21.
AFS financial assets are comprised of minority investments in listed companies and are measured at fair value with changes through equity. The fair value was identified in the case of listed investments with the stock exchange price at the reporting date.
| Book value at December 31, 2015 |
Purchases or subscription |
Decreases | Changes in fair value |
Reversal of fair value |
Write downs |
Book value at June 30, 2016 |
|
|---|---|---|---|---|---|---|---|
| Non-listed companies |
240,039,235 | 100,000 | - | 13,032,600 | - | 253,171,835 | |
| Listed companies |
189,379,051 | 31,322,358 | (12,302,655) (21,340,697) (10,194,569) | (1,338,142) | 175,525,347 | ||
| Total | 429,418,286 | 31,422,358 | (12,302,655) | (8,308,097) (10,194,569) (1,338,142) | 428,697,182 |
The changes in the "AFS financial assets" during the period were due to:
The main changes refer to:
the increases generated from the above-stated distribution of Ferrari shares, for Euro 15,960,812, and the acquisition of Hugo Boss shares for Euro 15,159,593;
the sale of the investment in Bolzoni S.p.A., resulting in a gain of Euro 6,326,818 and in the reduction of available-for-sale financial assets of Euro 13,201,909;
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% | 0.0% |
| Valuation models based on market inputs (level 2) | 0.0% | 71.1% |
| Other valuation techniques (level 3) | 0.0% | 13.0% |
| Purchase cost | 0.0% | 15.9% |
| Total | 100.0% | 100.0% |
The TIP Group, through TXR S.r.l., currently holds 38.34% of Furn Invest S.a.s. This investment, at June 30, 2016, was not classified as an associated company, although in the presence of a holding above 20% and some indicators of significant influence.
In particular, Furn Invest S.a.s. is unable to provide periodic financial information such as permit the TIP Group to record the investment under 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 an investment available for sale.
| Euro | June 30, 2016 | December 31, 2015 |
|---|---|---|
| Non-current financial receivables | 18,091,645 | 8,218,972 |
| Total | 18,091,645 | 8,218,972 |
Non-current financial receivables relate for Euro 8,462,093 to loans granted to Tefindue S.p.A., and the subscription of a convertible loan. Tefindue S.p.A. is the company which holds indirectly, through Clexidra S.r.l., a shareholding in Octo Telematics S.p.A., international leader in the development and management of leading telecommunication systems and services for the automotive sector mainly for the insurance market.
For Euro 9,269,552 they concern a vendor loan, at an interest rate of 9%, granted in relation to sale of the investment in Noemalife S.p.A. and with December 2018 maturity.
The breakdown is as follows:
| Euro | June 30, 2016 | December 31, 2015 |
|---|---|---|
| Due within one year | 567,967 | 442,172 |
| Due beyond one year | 136,115 | 293,787 |
Current tax receivables include VAT, IRES, IRAP and withholding taxes.
The non-current component principally concerns the IRAP reimbursement request.
The breakdown of the account at June 30, 2016 and December 31, 2015 is detailed below:
| Euro | Assets | Liabilities | Net | |||
|---|---|---|---|---|---|---|
| 31/12/2015 | 30/06/2016 | 31/12/2015 | 30/06/2016 | 31/12/2015 | 30/06/2016 | |
| Other intangible assets | 2,773 | 1,504 | - | - | 2,773 | 1,504 |
| Non-curent AFS financial assets | 42,593 | 16,282 | (2,132,928) | (2,059,342) | (2,090,335) | (2,043,060) |
| Current AFS financial assets | - | - | (98,100) | - | (98,100) | - |
| Net Profit | 27,151 | 27,151 | (8,969) | (8,969) | 18,182 | 18,182 |
| Elimination intercompany margins | 86,204 | - | - | - | - | - |
| Other liabilities | 666,219 | 446,853 | - | - | 666,219 | 446,853 |
| Total | 824,940 | 491,790 | (2,239,997) | (2,068,311) | (1,415,057) | (1,576,521) |
The changes in the tax assets and liabilities were as follows:
| Recorded | Recorded | |||
|---|---|---|---|---|
| December 31, | through | through | June 30, 2016 | |
| Euro | 2015 | P&L | Equity | |
| Other intangible assets | 2,773 | (1,269) | 0 | 1,504 |
| Non-current AFS financial assets | (2,090,335) | (119,034) | 166,309 | (2,043,060) |
| Current AFS financial assets | (98,100) | 0 | 98,100 | 0 |
| Net Profit | 18,182 | 0 | 0 | 18,182 |
| Elimination intercompany margins | 86,204 | (86,204) | 0 | 0 |
| Other liabilities | 666,219 | (219,366) | 0 | 446,853 |
| Total | (1,415,057) | (425,873) | 264,409 | (1,576,521) |
| Euro | June 30, 2016 | December 31, 2015 |
|---|---|---|
| Trade receivables (before doubtful debt provision) | 964,093 | 2,744,143 |
| Doubtful debt provision | (162,579) | (162,579) |
| Total | 801,514 | 2,581,564 |
Changes in trade receivables are strictly related to the different revenue mix between success fees and service revenues. The doubtful debt provision amounts to Euro 162,579 and does not report any changes.
| Euro | June 30, 2016 | December 31, 2015 |
|---|---|---|
| Bonds and other debt securities | 13,503,310 | 26,946,127 |
| Current financial assets mainly refer to the FCA convertible loan, measured at fair value with | ||
| recognition of changes to the income statement. |
The account represents the balance of banks deposits determined by the nominal value of the current accounts with credit institutions.
| Euro | June 30, 2016 | December 31, 2015 |
|---|---|---|
| Bank deposits | 3,921,108 | 2,006,216 |
| Cash in hand and similar | 7,181 | 4,889 |
| Total | 3,928,289 | 2,011,105 |
The composition of the net financial position at June 30, 2016 compared with December 31, 2015 is illustrated in the table below.
| Euro | June 30, 2016 | December 31, 2015 | |
|---|---|---|---|
| A | Cash and cash equivalents | 3,928,289 | 2,011,105 |
| B | Current financial assets and AFS | 13,503,310 | 48,559,936 |
| C | Liquidity (A+B) | 17,431,599 | 50,571,041 |
| D | Financial payables | (138,749,695) | (138,594,609) |
| E | Current financial liabilities | (93,987,866) | (89,417,843) |
| F | Net Financial Position (C+D+E) | (215,305,962) | (177,441,411) |
Current financial assets relate to investments in securities, which at June 30, 2016 substantially concern the FCA Convertible loan. The reduction in the period of Euro 35,056,626 relates to the above-stated change in the value of the FCA convertible loan of Euro 14,219,854 and the sale of bonds in the period of Euro 20,836,772.
Financial payables mainly refer to the partially convertible bond and the issue of the TIP 2014- 2020 bond.
Current financial liabilities concern bank payables, interest on bonds matured and not yet settled, the deferred payment on part of the acquisition price of Ruffini Partecipazioni S.r.l. and a loan of the subsidiary Clubsette S.r.l. and are outlined in Note 25.
The share capital of TIP is composed of:
| Shares | Number | Nominal value in Euro |
|---|---|---|
| Ordinary shares | 147,795,602 | 0.52 |
| Total | 147,795,602 | 0.52 |
The share capital of Tamburi Investment Partners S.p.A. amounts to Euro 76,853,713, represented by 147,795,602 ordinary shares of a nominal value of Euro 0.52 each.
The treasury shares of TIP in portfolio at June 30, 2016 totaled 1,128,160, comprising 0.74% of the share capital.
| No. treasury shares at | No. of shares acquired | No. of shares sold | No. treasury shares at |
|---|---|---|---|
| January 1, 2016 | in 2016 | 2016 | June 30, 2016 |
| 541,678 | 586,482 | - | 1,128,160 |
This amounts to Euro 15,370,743, increasing Euro 448,774 following the Shareholders' Meeting motion of April 29, 2016 with regard to the allocation of the 2015 net profit.
The positive reserve amounts to Euro 70,024,324. This is an unavailable reserve as referring to the change in the fair value compared to the acquisition value of the investments in portfolio. The changes in the non-current AFS financial assets valuation reserve, which represents the total
of income and charges recognised directly through equity, is illustrated in the table below:
| Euro | Book value at 31.12.2015 |
Change | Book value 30.06.2016 |
|
|---|---|---|---|---|
| Non-current AFS financial assets | 76,405,721 | (18,502,524) | 57,903,197 | |
| Investments carried at equity | 38,322,568 | 3,830,081 | 42,152,649 | |
| AFS financial assets | 281,338 | (281,338) | 0 | |
| Tax effect | (1,787,156) | 264,409 | (1,522,747) | |
| Total | 113,222,471 | (14,689,372) | 98,533,099 | |
| of which: | ||||
| minority interest share | 22,403,409 | 6,105,366 | 28,508,775 | |
| Group share | 90,819,062 | (20,794,738) | 70,024,324 |
The table illustrates the implicit gains of the investments and of the current financial assets in the period which are recognised under equity in the account "Valuation reserve AFS financial assets".
For details of changes, reference should be made to attachment 1 and to note 13 (Non-current AFS financial assets) and attachment 2 and note 12 (Investments measured under the equity method).
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 3,597,919. This relates to a non-distributable reserve.
The account amounts to Euro 4,442,483 and mainly comprises for Euro 4,350,223 the reserve relating to the revaluation of the investments measured under the equity method, for Euro (12,174) the employee benefit reserve and for Euro 104,434 the convertible bond option reserve.
The merger surplus amounts to Euro 5,060,152. This derives from the incorporation operation of Secontip S.p.A. in TIP on January 1, 2011.
Retained earnings amount to Euro 56,977,958 and increased, compared to December 31, 2015, for Euro 15,838,399 following the allocation of the 2015 net profit.
During the period, dividends of Euro 8,946,714 were distributed, equal to Euro 0.061 per share.
IFRS business combination reserve
The reserve was negative and amounts to Euro 483,655, unchanged compared to December 31, 2015.
Basic earnings per share
In the first six months of 2016, the basic earnings per share – net profit divided by the number of shares in circulation at June 30, 2016 – was Euro 0.10.
In the first six months of 2016, the diluted earnings per share was Euro 0.08. This represents a net profit for the period of Euro 14,536,183, divided by the number of ordinary shares in circulation at June 30, 2016 (146,667,442), calculated taking into account the treasury shares held at the same date and increased by the number of new shares issued (36,948,900) relating to the exercise of the remaining warrants in circulation.
At June 30, 2016, 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 | June 30, 2016 | December 31, 2015 |
|---|---|---|
| Opening balance | 226,451 | 210,646 |
| Provisions in the year | 27,845 | 31,460 |
| Actuarial gains / (losses) | 22,715 | (7,811) |
| Transfers to pension funds and utilisations | (18,730) | (7,844) |
| Total | 258,281 | 226,451 |
Financial payables of Euro 138,749,695 refer to:
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 account, totalling Euro 93,987,866, principally comprises TIP bank payables of Euro
69,785,386, the loan drawn down by the subsidiary Clubsette S.r.l. for Euro 14,071,128, the deferred payment of a part of the purchase price of the investment in Ruffini Partecipazioni S.r.l. for Euro 8,333,221 and interest on the TIP bond for Euro 1,798,131.
The breakdown of the account is as follows:
| Euro | June 30, 2016 | December 31, 2015 |
|---|---|---|
| IRES | 994,865 | 1,200,390 |
| VAT | 165,395 | 0 |
| Withholding taxes and other | 72,535 | 591,985 |
| Total | 1,232,795 | 1,792,375 |
The account mainly refers to emoluments for directors and employees.
| Euro | June 30, 2016 | December 31, 2015 |
|---|---|---|
| Directors and employees | 3,098,070 | 4,739,721 |
| Directors and employees for stock options | 0 | 1,449,525 |
| Social security institutions | 91,338 | 112,455 |
| Others | 253,390 | 235,115 |
| Total | 3,442,798 | 6,536,816 |
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. This risk is continually monitored by the company in order to take any necessary investment decisions.
Currency risk exposure relates to the investment in securities quoted in currencies other than the Euro, which at June 30, 2016 related to the FCA Convertible loan 7.875% 2016 and partly the Ferrari investment, quoted in US Dollars. This risk is constantly monitored by the company in order to take any necessary investment decisions.
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:
(a) to the valuation of these investments, in consideration of: (i) absence in these companies of control systems similar to those required for listed companies, with the consequent unavailability of information at least equal to, under a quantitative and qualitative profile, of those available for this later; (ii) the difficulties to undertake independent verifications in the companies and, therefore to assess the completeness and accuracy of the information provided;
(b) the ability to impact upon the management of these investments and drive their growth, the pre-requisite for investment, based on the Group's relationships with management and shareholders and, therefore, subject to verification and the development of these relationship;
(c) the liquidity of these investments, not negotiable on regulated markets;
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.
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. In relation to the advisory activity in any restructuring operations the credit risk is higher.
The Group approach in the management of liquidity guarantees, where possible, that there are always sufficient funds to meet current obligations. At June 30, 2016, the Group had in place sufficient credit lines to guarantee liquidity management and cover the group's financial needs.
The bond issued on April 7, 2014 totalling Euro 100 million provides for compliance with annual financial covenants (December 31) which at December 31, 2015 were complied with.
The capital management policies of the Board of Directors provides for maintaining high levels of own capital in order to ensure 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 1: determination of fair value based on prices listed ("unadjusted") in active markets for identical assets or liabilities. This category includes the instruments in which the TIP Group operates directly in active markets (for example investments in listed companies, listed bond securities etc.);
During the period there were no transfers between the hierarchy levels.
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 the first half of 2016.
| Members of the Board of Directors | ||||||
|---|---|---|---|---|---|---|
| Name | Office | No. of shares held at December 31, 2015 |
No. of shares acquired in H1 2016 |
No. of shares allocated from exercise of TIP warrant in H1 2016 |
No. of shares sold in H1 2016 |
No. shares held at June 30, 2016 |
| Giovanni Tamburi(1) | Chair. & CEO | 10,916,670 | 160,481 | 11,077,151 | ||
| Alessandra Gritti | Vice Chair. & CEO | 1,833,943 | 98,000 | 1,931,943 | ||
| Cesare d'Amico(2) | Vice Chairman | 18,250,624 | 0 | 18,250,624 | ||
| Claudio Berretti | Dir. & Gen. Manager |
1,436,864 | 10,000 | 1,446,864 | ||
| Alberto Capponi | Director | 0 | 0 | |||
| Paolo d'Amico(3) | Director | 17,600,000 | 0 | 17,600,000 | ||
| Giuseppe Ferrero | Director | 2,765,815 | 155,183 | 2,920,998 | ||
| Manuela Mezzetti | Director | 59,702 | 0 | 59,702 | ||
| Daniela Palestra | Director | 0 | 0 |
| Name | Office | No. of warrants held at December 31, 2015 |
No. of warrants acquired in H1 2016 |
No. of warrants sold in H1 2016 |
No. of warrants exercised in H1 2016 |
No. warrants held at June 30, 2016 |
|
|---|---|---|---|---|---|---|---|
| Giovanni Tamburi(1) | Chair. & CEO | 2,559,167 | 2,559,167 | ||||
| Alessandra Gritti | Vice Chair. & CEO | 458,485 | 458,485 | ||||
| Cesare d'Amico(2) | Vice Chairman | 4,562,656 | 4,562,656 | ||||
| Claudio Berretti | Dir. & Gen. Manager |
311,716 | 311,716 | ||||
| Alberto Capponi | Director | 0 | 0 | ||||
| Paolo d'Amico(3) | Director | 4,400,000 | 4,400,000 | ||||
| Giuseppe Ferrero | Director | 691,453 | 691,453 | ||||
| Manuela Mezzetti | Director | 14,925 | 14,925 | ||||
| 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 which holds 85.75% 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 through d'Amico Società di Navigazione S.p.A., a company in which he holds directly a 50% shareholding.
The members of the Board of Statutory Auditors do not hold shares and/or warrants of the company.
The table below reports the monetary remuneration, expressed in Euro, to the members of the boards in the first half of 2016.
| TIP office | Fees |
|---|---|
| First half 2016 | |
| Directors | 3,474,876 |
| Statutory Auditors | 30,625 |
The remuneration of the Supervisory Board was Euro 1,500.
TIP also signed two insurance policies with Chubb Insurance Company of Europe S.A. - a D&O and a professional TPL policy - 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, in addition to 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, types and counterparties.
| Party | Type | Payment/Balance at June 30, 2016 |
Payment/Balance at June 30, 2015 |
||
|---|---|---|---|---|---|
| Clubitaly S.p.A. | Revenues | 15,000 | 16,934 | ||
| Clubitaly S.p.A. | Trade receivables | 15,000 | 16,934 | ||
| Clubitaly S.p.A. | Financial receivables | 100,000 | 0 | ||
| Clubtre S.p.A. | Revenues | 25,000 | 25,309 | ||
| Clubtre S.p.A. | Trade receivables | 25,000 | 25,309 | ||
| TIPO S.p.A. | Revenues | 250,258 | 253,459 | ||
| TIPO S.p.A. | Trade receivables | 250,258 | 253,459 | ||
| Services provided to companies related to the Board of Directors | Revenues from services |
119,320 | 108,507 | ||
| Services provided to companies related to the Board of Directors | Trade receivables | 39,320 | 99,687 | ||
| Be S.p.A. | Revenues | 30,000 | 30,000 | ||
| Be S.p.A. | Trade receivables | 30,000 | 30,000 | ||
| Gatti&Co Gmbh | Revenues | 0 | 7,943 | ||
| Gatti&Co Gmbh | Trade receivables | 0 | 7,943 | ||
| Gruppo IPG Holding S.p.A | Revenues | 15,000 | 15,059 | ||
| Gruppo IPG Holding S.p.A | Trade receivables | 15,000 | 15,059 | ||
| Palazzari & Turries S.r.l. | Trade receivables | 0 | 636 | ||
| Services received from companies related to the Board of Directors | Costs (services received) |
1,668,478 | 1,570,282 | ||
| Payables for services received from companies related to the Board of Directors |
Other payables | 1,393,478 | 1,375,699 | ||
| Services provided to Board of Directors | Revenues (services returned) |
250 | 250 | ||
| Receivables for services provided to Board of Directors | Trade receivables | 250 | 250 |
It is considered that all the services offered for all the above listed parties were undertaken at contractual terms and conditions in line with the market.
The TIP Group corporate governance adopts the provisions of the Self-Governance Code, as per the new version published by Borsa Italiana.
The Corporate Governance and Shareholder 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, September 7, 2016
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 2016 condensed consolidated halfyear financial statements.
No significant aspects emerged concerning the above.
The Chief Executive Officer The Executive Officer
Milan, September 7, 2016
| Balance at 31.12.2015 | increases | decreases | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in Euro | No. of historic | fair value | increases write-downs | book value acquisition or reclass. | fair value | decreases | fair value | reversal | write-downs book value | |||||
| s hare s |
cost | adjustments (decreases) | P&L | fair value | subscription | increase | decreases | fair value | P&L | 30.6.2016 | ||||
| Non-listed companies | ||||||||||||||
| Azimut Benetti S.p.A. | 737,725 | 38,990,000 | 38,990,000 | 38,990,000 | ||||||||||
| Furn Invest S.a.S | 37,857,773 | 29,501,026 | 3,509,301 | 33,010,327 | 33,010,327 | |||||||||
| Ruffini Partecipazioni S.r.l. | 1,400 122,803,490 | 44,202,510 | 167,006,000 | 13,032,600 (1) | 180,038,600 | |||||||||
| Other equity instruments and other minor | 1,764,659 | 0 | 63,081 | (794,832) | 1,032,908 | 100,000 | 1,132,908 | |||||||
| Total non-listed companies | 154,069,175 | 47,711,811 | 39,053,081 | (794,832) | 240,039,235 | 100,000 | 0 13,032,600 | 0 | 0 | 0 | 0 253,171,835 | |||
| Listed companies | ||||||||||||||
| Amplifon S.p.A. | 9,538,036 | 34,884,370 | 41,372,228 | 76,256,598 | 3,958,285 | 80,214,883 | ||||||||
| Bolzoni S.p.A | 0 | 5,442,159 | 5,139,652 | 3,045,421 | (1,450,895) | 12,176,337 | 1,187,166 | (7,036,685) | (6,326,818) | 0 | ||||
| Digital Magics S.p.A. | 892,930 | 375,000 | 207,639 | 4,531,009 | 5,113,648 | 19,182 | (1,364,665) | 3,768,165 | ||||||
| Ferrari N.V. USD | 543,422 | (2,333,541) | 17,764,789 | 15,431,248 | 8,402,252 | (3,799,036) | 20,034,464 | |||||||
| Ferrari N.V. euro | 174,000 | 0 | 7,558,560 | (1,181,460) | 6,377,100 | |||||||||
| Fiat Chrysler Automobiles N.V. | 1,740,000 | 14,846,550 | (1,720,017) | 1,778,655 | 14,905,188 | (5,343,888) | 9,561,300 | |||||||
| Hugo Boss AG | 901,000 | (16,562,390) | 62,522,390 | 45,960,000 | 15,159,593 | (15,258,693) | 45,860,900 | |||||||
| M&C S.p.A. | 12,562,115 | 1,886,201 | (195,340) | 1,690,861 | 310,284 | (28,893) | 1,972,252 | |||||||
| Monrif S.p.A | 12,658,232 | 11,374,782 | (135,831) | (7,895,912) | 3,343,039 | 135,831 | (1,309,249) | 2,169,621 | ||||||
| Noemalife S.p.A | 0 | 5,265,970 | 3,130,226 | 8,396,196 | 873,356 | (5,265,970) | (4,003,582) | 0 | ||||||
| Servizi Italia S.p.A. | 548,432 | 2,938,289 | 387,318 | (1,241,564) | 2,084,042 | (109,687) | 1,974,355 | |||||||
| Other listed companies | 2,914,466 | (791,370) | 1,898,798 | 4,021,894 | 182,771 | 25,285 | (637,644) | 3,592,306 | ||||||
| Total listed companies | 79,927,787 | 28,693,914 | 91,541,062 (10,783,711) | 189,379,051 | 31,322,358 | 0 | 6,354,376 (12,302,655) (27,695,072) (10,194,569) | (1,338,142) 175,525,347 | ||||||
| Total investments | 233,996,962 | 76,405,725 130,594,143 (11,578,543) | 429,418,286 | 31,422,358 | 0 19,386,976 (12,302,655) (27,695,072) (10,194,569) | (1,338,142) 428,697,182 |
(1) The change in the fair value relates to the investment in Moncler S.p.A.
| Attachment 2 - | Changes in associates measured under the equity method | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 01.01.2016 | decreases | Book value | |||||||||||||
| in Euro | No. of | historic | write- revaluations | share of shareholder | decreases | increase Book value | share of results | (decreases)(write-downs) at 30.6.2016 increases |
|||||||
| shares | cost | backs (write-downs) results as per loan capital | o | r (decrease) in accounts Purchases | Reclass. | as per | or restitutions revaluations (decreases) |
||||||||
| equity method | advance restitutions | fair value | equity method fair value | ||||||||||||
| Be Think, Solve, Execute S.p.A. | 31.582.225 | 16.596.460 | 217.239 | (53.070) | (86.700) | 16.673.929 | 644.308 | (269.706) | (351.194) | 16.697.337 | |||||
| Clubitaly S.p.A. | 27.500 | 33.000.000 | (181.956) | (116.549) | 1.040.145 | 33.741.640 | 100.220 | 33.841.860 | |||||||
| Clubtre S.p.A. | 42.000 | 17.500 | 5.260.038 | 41.948.846 | (7.934.801) | 35.587.747 74.879.330 | 1.901.726 | 1.762.109 | (1.341.697) | 77.201.468 | |||||
| Gatti & Co Gmbh | 10.700 | 275.000 | (19.131) | (11.651) | 244.218 | 10.518 | 254.736 | ||||||||
| Gruppo IPG Holding S.p.A. | 67.348 | 39.847.870 | 5.010.117 | (7.597.729) | 18.939.309 | (1.022.501) | (9.682.990) | 45.494.076 | 3.237.642 | 11.573.999 | 60.305.717 | ||||
| Palazzari & Turries Limited | 90.000 | 225.000 | 65.349 | 108.115 | 398.464 | 398.464 | |||||||||
| Tip-Pre Ipo S.p.A. | 342.856 | 8.000.000 | 377.369 | 5.689.570 | 14.066.939 | 8.285.667 | 848.971 | (3.817.930) | (428.517) | 18.955.130 | |||||
| Total | 97.961.830 | 5.010.117 | (7.733.467) | 24.773.870 | 41.948.846 (9.010.372) | 32.547.772 185.498.596 | 8.285.667 | 0 | 6.743.385 | 9.248.472 | (2.121.408) | 0 207.654.712 |
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