Annual Report • Mar 23, 2022
Annual Report
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DIRECTORS' REPORT
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
BASICNET S.P.A. FINANCIAL STATEMENTS AND EXPLANATORY NOTES
| Marco Daniele Boglione |
Chairperson |
|---|---|
| Daniela Ovazza | Vice Chairperson |
| Federico Trono | Chief Executive Officer |
| Alessandro Boglione Lorenzo Boglione Veerle Bouckaert Paola Bruschi Elisa Corghi (1) Cristiano Fiorio (1) Francesco Genovese Alessandro Jorio Renate Hendlmeier (1) Adriano Marconetto (1) (2) Carlo Pavesio |
Directors |
(1) Independent Directors
(2) Lead Independent Director
| Carlo Pavesio | Chairperson |
|---|---|
| Elisa Corghi | |
| Renate Hendlmeier | |
| Adriano Marconetto | |
| Daniela Ovazza |
| Renate Hendlmeier | Chairperson |
|---|---|
| Elisa Corghi | |
| Cristiano Fiorio | |
| Adriano Marconetto |
Maria Francesca Talamonti Chairperson
Alberto Pession
Sergio Duca Statutory Auditors
Maurizio Ferrero
Giulia De Martino Alternate Auditors
EY S.p.A.
"We bring together a large number of entrepreneurs across the world for a common goal. We manage all the critical data along the supply chain. We earn service commissions for approx. one-third of the added value generated by the entire process, capitalising all the enhanced value of the trademarks from the development of sales. We achieve this through continually sourcing state-of-the-art software technologies and peerless internet integration to manage all the processes of our business".
Marco Boglione, 1999
Dear Shareholders,
2021 Key Performance Indicators:
aggregate sales of Group products by the Global licensee Network of Euro 949.4 million, up 16.6% as follows:
| (in Euro millions) | 2021 | 2020 | % Change |
|---|---|---|---|
| Commercial licensee sales | 709.6 | 601.9 | 17.9% |
| Productive licensee sales | 239.8 | 212.1 | 13.1% |
| Licensee aggregate sales | 949.4 | 814.0 | 16.6% |
Commercial licensee sales saw major growth compared to last year. Overall, Europe, which accounts for approx. 68% of sales, reports a significant recovery, with a 17.6% increase over 2020 and 1% growth over the record year of 2019. Sales in the Americas rose 60.2% (+19% on 2019) and 40.5% in the Middle East and Africa. Asia and Oceania, which represents 7.2% of sales, reported a decline of 31.8% on the previous year, mainly due to the replacement of a licensee. Productive license sales grew 13.1%;
In addition to the Corporate Governance and Ownership Structure Report, this document also presents the Consolidated non-financial report as per Legislative Decree No. 254/2016. This document summarises the initiatives taken by the Group to operate its business ethically and responsibly, in order to engage all stakeholders in the objectives and results of the entire supply chain, also in social and environmental terms.
In relation to the "alternative performance indicators", as defined by CESR/05-178b recommendation and Consob Communication DEM/6064293 of July 28, 2006, we provide below a definition of the indicators used in the present Directors' Report, as well as their reconciliation with the financial statement items:
| Commercial licensees or licensees: | independent business owners, granted licenses to distribute Group brand products in their respective regions. |
|---|---|
| Productive licensees or sourcing centers: | third-party firms to the Group. Their function is to manufacture and market merchandise and are located in various countries worldwide, depending on what type of goods they produce. |
| Commercial licensee aggregate sales: | sales by commercial licensees, recognised by the BasicNet Group to the "royalties and sourcing commissions" account of the income statement. |
| Productive licensee aggregate sales: | sales by productive licensees, recognised by the BasicNet Group to the "royalties and sourcing commissions" account of the income statement. |
| Consolidated Revenues | the sum of royalties, sourcing commissions and sales of the BasicNet Group companies. |
| EBITDA: | "operating result" before "amortisation and depreciation". |
| EBIT: | "operating result". |
| Contribution margin on direct sales: | "gross profit"; |
| Debt/equity ratio | this is an indicator of the financial structure of the balance sheet and is calculated as the ratio of financial debt to shareholders' equity. |
| Net Debt: | total of current and medium/long-term financial payables, less cash and cash equivalents and other current financial assets. |
| Basic earnings per share | calculated as required by IFRS on the basis of the weighted average number of |
shares in circulation in the year.
The BasicNet Group operates in the apparel, footwear and accessories sector through the brands Kappa®, Robe di Kappa®, K-Way®, Superga®, Briko®, Jesus® Jeans, Sabelt® and Sebago®. Group activities involve driving brand enhancement and product distribution through a global network of licensees. This business network is defined as the "Network". And from which the name BasicNet derives. The Network of licensees encompasses all key markets worldwide.
BasicNet S.p.A. is the parent company of the Group – with headquarters in Turin - listed on the Italian Stock Exchange.
The strengths of the Group are founded on the strategic priorities since its inception which encompass:
The Basic Group brands form part of the informal and casual clothing sector, which has experienced significant growth since the 1960's and continues to develop with the "liberalisation" of clothing trends.
is a practical sportswear brand, serving active and fast-paced individuals, who in their sporting activity require highly-functional clothing, while displaying a youthful, colourful and original look. The Kappa® collections include also footwear and accessories for sport, designed to ensure peak performance. The Kappa® brand sponsors major clubs globally across a wide range of sports, in addition to many national sporting federations, particularly in Italy.
is the brand for those who in their free-time and informal professional activity seek to wear modern, high-quality sportswear at accessible prices. The brand serves energetic, modern individuals, open to an ever-changing world.
is the leisure footwear and accessories brand, designed for those seeking comfort, while demanding a fashionable, colourful and stylish look and high quality. The Superga® collections serve the needs of a wide cross-section of customers, within every age
category. produces exceptional waterproof clothing: classic, modern, hightechnological and functional content and in a wide range of colours. In addition to the original jackets with heat-sealing zips, storable in their pouch and produced with waterproof and wind-protecting warm and breathable materials, the collections include also fashionoriented clothing and accessories which are identically practical and
functional.
is the Italian brand of cutting edge technical sporting products, in particular for cycling, skiing and running: eyewear, helmets, masks, accessories, underwear and clothing for professionals and enthusiasts. Briko®'s mission is to use the explosive energy of the brand to create iconically designed products for athletes and sportspeople requiring performance and safety without compromises.
produces exceptional American footwear.
The brand, founded in Westbrook, Maine (USA) in 1946, takes its name from the nearby Sebago Lake, which in the native American Abenaki language means "elongated water basin".
The brand launched with the famous "penny loafer", handmade in accordance with local tradition and over the years has continued with best sellers such as the Docksides® boat shoes.
The Sebago® brand is now distributed across 90 markets worldwide.
is the jeans brand, created in 1971 by the youthful Maurizio Vitale and Oliviero Toscani.
is the high-end leisure, sport and formal occasion footwear brand, emerging from the racing and automobile world. The brand is positioned in the fashion segment. The Basic Group has held 50% of the fashion categories (clothing and footwear) of the brand and is also a global licensee.
The BasicNet Group has developed around a "network" business model, targeting licensees as the ideal partner for the development, distribution and sourcing of its products globally, choosing partners which act not only as a product supplier, but as an integrated supplier of services, i.e. a business development partner.
Innovative, flexible and modular, the Business System of BasicNet has enabled the Group to grow quickly, although maintaining a lean and agile structure: a large enterprise centred around many businesses connected among themselves and with the parent company on a fully integrated IT Network platform designed to maximise information flows through real time sharing.
The Business System was drawn up and structured to develop both internal lines (new licensees and new markets) and external lines (new brands developed or acquired and new business lines).
The functioning of the Business System is very simple. The Parent Company, BasicNet S.p.A., controls the strategic activities for the directly managed brands and the "Powered by" activities for the brands that develop strategic functions autonomously (i.e. K-Way).
These strategic activities mainly include:
These "Powered by" activities mainly include:
Information Technology, i.e. the creation of new software for the online management of all supply chain processes;
Licensees, according to region or goods category, distribute products to retailers, carry out local marketing, regional logistics and working capital funding.
The licensees involved in BasicNet brand finished product management (sourcing centres) apply a similar model and distribute to commercial licensees in their respective areas.
As part of the Business System development, the Group has also established a direct customer sale system called plug@sell ®, currently developed in Italy, Switzerland, Spain and France. The model comprises a webbased integrated sales management system, with a platform which simply manages all daily activities at the store in real time, from orders to stock management, to accounting and training of staff (pre-opening and ongoing).
As part of the Retail project of BasicRetail S.r.l., K-WayRetail S.r.l., K-WayRetail Suisse S.A. and of the companies of the French Group Kappa Europe S.A.S., the various brands have been developed around the three principal retail levels, through which the Group sells directly to the public in Europe:
The formats have been developed in order to ensure presence on a wide range of market segments.
The IT platform is one of the major strategic investments for the Group, with a high degree of focus in terms of staffing and centrality to Business System development.
This platform was designed and developed in a fully web integrated manner as the perfect communication tool between Network elements.
The Information Technology department is involved therefore in the design and rolling out of the applications which link the BasicNet Network companies together and externally.
The business model therefore centres on "e-processes" i.e. ".com" divisions - each of which with a production input and exchanging or negotiating with the other divisions, exclusively through the online platform.
The Basic Group comprises Italian and international operating companies within the following two sectors:
The clothing, footwear and accessories sector includes all Group entities with the exception of BasicVillage S.p.A. The sector encompasses all activities directly related to the development of the brands owned and the distribution of related products, both directly and by way of a global network of licensees. Specifically:
Property management is carried out by Basic Village S.p.A., which owns commercial and residential properties of more than 30,000 sq. m, including:
The BasicVillage project came about in response to three basic human needs, i.e. a home, a job, and free time.
The Group objective is to extend its global leadership position through the strength of its brands.
The Group project centres on:
The BasicNet Group structure at December 31, 2021 is presented below:
As noted, the COVID-19 health emergency continued also in 2021 and forced the Governments of the affected countries to adopt new restrictions from December 2020 and for the entire first half of 2021, particularly in terms of commercial activities. Limited to the countries in which the Group operates directly, shopping centres in Italy closed on weekends until the end of May and for 7 consecutive weeks non-essential stores were closed in France.
In April 2021, in collaboration with Humanitas Gradenigo Hospital, a vaccination site was set up at Turin's BasicVillage, which enabled the Group's employees, collaborators and their families to get their first and second doses of the vaccine. At its peak, this site provided about 800 doses per day.
In February 2021, the company K-Way S.p.A. was established in Milan, with the objective of consolidating all the Group's activities related to the brand. BasicNet therefore conferred to the company, with effect from July 1, the business unit, including the brand, models, contracts, warehouses and all of the Business System related activities; BasicItalia simultaneously approved the spin-off in favour of K-Way S.p.A. of the business unit concerning the commercial license, including the activities and sales personnel of the K-Way brand products. The transaction, which does not entail any change in the Group's ownership structure or equity structure, is designed to enable better focus on the brand.
At the end of December, the BasicNet Group and K-Way France S.a.s., the licensee of the K-Way® brand in France, where the brand was created in the middle of the 1960's, have reached an agreement for the acquisition of the entire share capital of K-Way France by the BasicNet Group through a letter of intent with the shareholders of K-Way France. The transaction, which is expected to be finalised by June 30, 2022, is subject to the positive outcome of legal, tax and employment due diligence, which is expected to be completed by the first quarter of 2022.
Commercial operations focused mainly on the renewal of expiring licensing contracts. Of particular note were the new agreements for the distribution of the Kappa® brand in Africa and the licensing agreement for Italy for the distribution of watches. For K-Way®, new agreements have been signed for Hong Kong and China. Finally, for both K-Way® and Briko®, a new contract has been signed for the distribution of eyewear.
As regards sponsorship initiatives on the European market, we highlight for the Kappa® brand the new contracts with the French Red Star Football Club, with the Spanish Real Club Deportivo de La Coruña football club and with Venezia Football Club.
Kappa® in February became the sponsor of the e-sport team Triplo7Klan, owned by 777 ENT, the record label of the Dark Polo Gang.
Briko® was partner of the "Tour de Fans" organised by Radio DeeJay and, for the seventh consecutive year, sponsored the Bardiani CSF Faizanè team in the 104th Giro d'Italia. For the second time, Briko® was an official sponsor of the Colnago Cycling Festival in Desenzano del Garda (Brescia).
The Italian surf champion Leonardo Fioravanti became the Sebago® representative for the Docksides springsummer digital campaign.
The global digital spring-summer campaign #KeepPerforming of the Kappa® brand in Europe was represented in Italy by Hell Raton, a group of "Fiorentina Femminile" athletes and the Italian rapper Emis Killa, featuring also in the maxi-billboard campaign in Milan; in France by the rapper Seb la Frite and the YouTuber Brisco; while in Spain the rapper Kidd Keo was the representative. For the UK, it featured football freestyler Liran Santos, dancer and activist Kate Stanforth, basketball star Kornelijus Budrys, breakdancer Gabriel Infante, gymnast Koffi, and street magician Billy Menezes.
An identical #KeepPerforming campaign was run in Italy for the autumn-winter Kappa® collection featuring the judges of the Italian X Factor, singer and music producer Hell Raton (a.k.a. "Manuelito"), and other talents including Ernia, Shades of Banana, Unghie della Madonna, and Floriano Pellegrino.
Chiara Ferragni returned to represent the Superga® brand on Instagram, while on the German market the TV model and presenter Lena Gercke became a Superga® Ambassador for the spring-summer collection. In Milan, the tricolour K-Way® tape wrapped a nerve centre of the city with a mega-billboard of 1 square kilometre. A second K-Way® billboard campaign was run in the autumn in four key Italian cities (i.e. Milan, Turin, Rome and Naples) and at the 180 busiest stops of the Paris metro.
For Superga®, the final episode of the project "Styled by Me" was released in the fourth quarter and featured a reinterpretation on the social media channels of Alpina Vegan Leather by five up-and-coming Italian stylists: Chiara Totire, Sara Bianchini, Thais Brandao, Diletta Bonaiuti, and Giuseppina Melfi.
The Superga® Poetic collection was also presented as part of a virtual roadshow involving influencers from France, Singapore, Malaysia, Italy, Indonesia, the UK, the US, and Australia.
With regards to co-branding:
Robe di Kappa® and the AS Monaco football club presented their second lifestyle collection;
for K-Way®, which in May signed its first 100% recycled and recyclable nylon collection, launched two co-branding with the top model Mariacarla Boscono (spring-summer and autumn-winter 2021). In June, the co-lab Ice Jacket Veuve Clicquot x K-Way®, Limited Edition, was launched involving a K-Way® mini-jacket, tailor-made to wrap the bottle of the iconic Veuve Clicquot Yellow Label champagne. Limited-edition co-branding initiatives were also announced with Saint Laurent Rive Droite, in addition to the launch of the first K-Way outdoor capsule with Play Comme des Garçons, and with the Italian brands Retrosuperfuture (eyewear) in conjunction with Milan Fashion Week and LC23 (furniture) for Milan Design Week;
In terms of communication and sponsorship on the American market, the model and influencer Hailey Bieber was again the Superga® Global Ambassador for the spring-summer and autumn-winter 2021 campaigns. There were numerous Kappa® #KeepPerforming global digital campaign testimonials: the model and athlete Lauren Wasser, the creative director Bloody Osiris, the model and lawyer Yaris Sanchez, the artist Kailand Morris and the DJ's Esta and Millie. Kappa USA also partnered with Rolling Loud, the world's largest hip-hop festival, which is held in three cities: Miami, New York, and Los Angeles. Kappa® put out three custom capsules for the occasion.
With regards to co-branding:
As regards communications, co-branding initiatives were also launched for the Asian market: Superga Singapore with the "Moments" line for the luxury hotel Llyd's Inn, Superga Japan with Kaptain Sunshine, the Japanese designer brand Shinsuke Kojima. Superga Malaysia and the influencer Drea Chong created their fourth collection, entitled "Seasons of Us". In the fourth quarter, the first co-lab with the Singapore bakery chain Tiong Bahru Bakery and the collaboration with the Indonesian brand Haru were launched for Superga®.
In Australia, in Sydney, Superga® presented the first organic and vegan co-lab with the fashion entrepreneur and style icon Tash Sefton.
At December, Kappa® and Robe di Kappa® mono-brand stores and shop in shops opened by licensees globally numbered 972 (of which 113 in Italy), with Superga® mono-brand stores and shop-in-shops totalled 223 (of which 61 in Italy), and there were 67 K-Way® sales points (of which 32 in Italy) and 51 Sebago® sales points (of which 2 in Italy, in Rome and Turin).
The condensed income statement for the year is reported below:
| (Euro thousands) | FY 2021 | FY 2020 | Change | % |
|---|---|---|---|---|
| Group Brand Aggregate Sales by the Network of commercial and productive licensees * |
949,397 | 814,051 | 135,346 | 16.6% |
| Royalties and sourcing commissions | 54,763 | 45,975 | 8,788 | 19.1% |
| Consolidated direct sales | 241,635 | 213,756 | 27,879 | 13.0% |
| EBITDA ** | 44,250 | 19,826 | 24,424 | 123.2% |
| EBIT ** | 31,620 | 7,551 | 24,069 | 318.8% |
| Group Net Profit | 20,330 | 8,581 | 11,749 | 136.9% |
| Basic earnings per share** | 0.3965 | 0.1635 | 0.233 | 142.5% |
* Data not audited
** For the definition of the indicators reference should be made to paragraph 6 of the present Report
The COVID pandemic extended to a second year in 2021. Various, sporadic measures throughout the year sought to contain the spread of the pandemic and had an impact on commercial performance, particularly in the first quarter and again towards the end of the year with the rise of the Omicron variant. Performance for 2021 was also influenced by a series of extraordinary, non-recurring events linked to COVID-19, as summarised below:
The breakdown of sales and production revenues generated through the global Group licensees at current exchange rates was as follows:
| FY 2021 | FY 2020 | Change | ||
|---|---|---|---|---|
| (In Euro thousands) Aggregate Sales of Group licensees * |
Total | Total | Total | % |
| Commercial Licensees | 709,616 | 601,961 | 107,655 | 17.9% |
| Productive Licensees (sourcing centers) | 239,781 | 212,090 | 27,691 | 13.1% |
| Total | 949,397 | 814,051 | 135,346 | 16.6% |
* Data not audited
The regional breakdown of commercial licensee aggregate sales was as follows:
| FY 2021 | FY 2020 | Change | ||||
|---|---|---|---|---|---|---|
| (In Euro thousands) Aggregate Sales of Group Commercial licensees * |
Total | % | Total | % | Total | % |
| Europe | 482,337 | 68.0% | 410,059 | 68.1% | 72,278 | 17.6% |
| The Americas | 96,380 | 13.6% | 60,147 | 10.0% | 36,233 | 60.2% |
| Asia and Oceania | 51,095 | 7.2% | 74,972 | 12.5 | (23,877) | (31.8%) |
| Middle East and Africa | 79,804 | 11.2% | 56,783 | 9.4% | 23,021 | 40.5% |
| Total | 709,616 | 100.0% | 601,961 | 100.0% | 107,655 | 17.9% |
* Data not audited
and of the productive licensees:
| FY 2021 | FY 2020 | Change | ||||
|---|---|---|---|---|---|---|
| (In Euro thousands) Aggregate Sales of the Group Productive licensees * |
Total | % | Total | % | Total | % |
| Europe | 20,339 | 8.5% | 17,392 | 8.2% | 2,947 | 16.9% |
| The Americas | 21,311 | 8.9% | 14,710 | 6.9% | 6,601 | 44.9% |
| Asia and Oceania | 195,254 | 81.4% | 177,289 | 83.6% | 17,965 | 10.1% |
| Middle East and Africa | 2,877 | 1.2% | 2,699 | 1.3% | 178 | 6.6% |
| Total | 239,781 | 100.0% | 212,090 | 100.0% | 27,691 | 13.1 |
* Data not audited
Commercial licensee aggregate sales of Euro 709.6 million were up 17.9%, from Euro 602 million in the previous year; continental level growth is commented upon in the introductory paragraphs to this Report.
The sales of the productive licensees (Sourcing Centers) are only made to commercial licensees or entities within the "Powered by BasicNet" scope. The production licenses issued to the Sourcing Centers, differing from those issued to the commercial licensees, do not have regional limitations, but are rather based on technical production and business competences. Product sales by the Sourcing Centers to commercial licensees are made in advance of those made by the latter to the end customer. Productive license sales grew 13.1%.
Royalties from commercial and productive licensees amounted to Euro 54.8 million (Euro 46.0 million in 2020, +19.1%). Royalties from commercial and productive licensees posted a marked increase of Euro 5.6 million compared to December 31, 2020. Sourcing commissions increased by Euro 3.2 million, up 24%, as the combined effect of greater order volumes by commercial licensees and the full efficacy of the new rates for royalties charged to productive licensees.
Overall consolidated direct sales were Euro 241.6 million (Euro 213.8 million in 2020).
The contribution margin on sales increased from the Euro 86.6 million of 2020 to Euro 98 million in 2021 as a result of an increase in direct sales (+13%) both in Italy and in Europe, while the contribution margin as a percentage remained essentially unchanged (at 40.6%), despite the growing impact of rental and transport costs.
Other income, in the amount of Euro 10.1 million, increased by approx. 18.5% compared to the Euro 8.5 million of 2020, due to an increase in promotional efforts (e.g. Kappa co-branding and other promotional efforts as well as signing fees from new licensees) and to greater non-operating income (Euro 1.7 million) following the conclusion of the Giacomelli procedure.
Sponsorship and media spend of Euro 36.2 million compares to Euro 38.3 million in the previous year. The decrease in the year is substantially attributable to the renegotiation/expiration of technical sponsorship contracts for the 2020/21 sports season, net of new sponsorships (ACF Fiorentina).
Personnel costs went from Euro 28.9 million in 2020 to Euro 31 million in 2021, an increase of approx. Euro 2.1 million, due mainly to the reduced use of temporary lay-off schemes and similar social safety nets in the countries in which the Group operates. The average number of employees in 2021 was 876.
Overhead costs, i.e. Selling and general and administrative costs and royalties expenses, decreased by Euro 2.8 million, from Euro 54.1 million in 2020 to Euro 51.3 million in 2021. The change is essentially due to the fact that 2020 included a greater provision for doubtful accounts in relation to a commercial license that was terminated in advance and replaced in early 2021.
EBITDA stood at Euro 44.2 million (Euro 19.8 million in 2020).
EBIT was Euro 31.6 million after amortisation and depreciation of Euro 7 million and the depreciation of right-of-use for Euro 5.6 million.
Consolidated net financial charges/income, including exchange gains and losses, reported a charge of Euro 1.9 million, compared to Euro 1.7 million in the previous year.
The consolidated pre-tax profit was Euro 29.7 million, compared to Euro 6.8 million in 2020.
Current and deferred taxes in the year amounted to Euro 9.4 million. The tax charge increased Euro 11.2 million compared to the previous year, which included the net positive effect (Euro 4.5 million) deriving from the release of deferred tax liabilities on the partial realignment of the tax value of trademarks in the portfolio, pursuant to Article 110 of Legislative Decree No. 104/2020.
The net profit of Euro 20.3 million compares to Euro 8.6 million in the previous year.
The Financial Highlights by Group segment were as follows:
Following the reorganisation described under note 48 to the consolidated financial statements, the Group has adapted segment information to better reflect the current organisational structure and business model. Figures for the previous year have been adjusted for the purposes of comparison.
The financial statements by segment are reported at Note 7 of the Notes to the consolidated financial statements.
The changes in the balance sheet are reported below:
| (Euro thousands) | December 31, 2021 December 31, 2020 |
Change | |
|---|---|---|---|
| Property | 36,537 | 34,747 | 1,790 |
| Brands | 59,027 | 58,917 | 111 |
| Non-current assets | 38,328 | 33,690 | 4,638 |
| Right-of-use | 23,119 | 22,082 | 1,037 |
| Current assets | 170,779 | 172,592 | (1,813) |
| Total assets | 327,789 | 322,027 | 5,762 |
| Group shareholders' equity | 133,822 | 119,277 | 14,545 |
| Non-current liabilities | 72,135 | 73,156 | (1,021) |
| Current liabilities | 121,832 | 129,594 | (7,762) |
| Total liabilities and shareholders' equity | 327,789 | 322,027 | 5,762 |
As regards changes in fixed assets, during the year tangible assets increased due to the advancement of restructuring works on the Milan BasicVillage property complex located at the "Scalo Farini" (Euro 3.2 million), net of depreciation in the year. Brands increased as a result of the capitalisation of costs incurred for the registration of trademarks in new countries and for renewals and extensions, net of amortisation for the period. Investments were also made for the development of computer programs (Euro 2.5 million) and for the purchase of EDP and furniture and fittings (Euro 2.8 million).
Group shareholders' equity went from Euro 119.3 million in 2020 to Euro 133.8 million in 2021
| (Euro thousands) | December 31, 2021 |
December 31, 2020 | Change |
|---|---|---|---|
| Net financial position – Short-term |
(2,918) | (14,678) | 11,760 |
| Financial payables – Medium-term |
(34,268) | (43,709) | 9,441 |
| Finance leases | (515) | (678) | 163 |
| Net financial position with banks | (37,702) | (59,065) | 21,364 |
| Payables for rights-of-use | (24,041) | (23,097) | (944) |
| Total net financial position | (61,743) | (82,162) | 20,419 |
| Net Debt/Equity ratio (Net financial position/Shareholders' equity) |
0.46 | 0.69 | (0.23) |
Net financial position with banks went from net debt of Euro 59.1 million at December 31, 2020, to Euro 37.7 million at December 31, 2021.This follows the generation of cash of approx. Euro 46 million, having invested approx. Euro 10 million, paid dividends of Euro 3.1 million and acquired treasury shares of Euro 6 million.
Right-of-use payables rose approx. Euro 0.9 million compared to 2020, due to new shop openings and the renewal of expired or maturing lease contracts.
The Parent Company condensed income statement for 2021 compared to the previous year is reported below:
| FY 2021 | FY 2020 | Change | % | |
|---|---|---|---|---|
| (Euro thousands) | ||||
| Royalties and sourcing commissions | 30,131 | 31,215 | (1,084) | (3.5%) |
| Direct sales and other income | 9,788 | 11,499 | (1,711) | (14.9%) |
| EBITDA * | 10,229 | 8,122 | 2,107 | 25.9% |
| EBIT * | 5,962 | 3,936 | 2,026 | 51.5% |
| Dividends from subsidiaries | - | 1,098 | (1,098) | (100.0%) |
| Transfer gains | 60,903 | - | 60,903 | 100.0% |
| Net Profit | 65,689 | 4,740 | 60,949 | 1,286.0% |
* For the definition of the indicators reference should be made to paragraph 6 of the present Report
The results of the separate financial statements of the Parent Company reflect the developments of the overall activity as described within the consolidated financial statements and with specific reference to the activities undertaken on the international markets.
Royalties and sourcing commissions of Euro 30.1 million fell 3.5% on 2020. This performance was the result of the end of royalties and sourcing commissions related to the K-Way brand as of July 1, as the related business unit was transferred to the company of the same name, as described above.
Direct sales and other income amounted to Euro 9.8 million (Euro 11.5 million in the previous year). Other income principally refers to payments for intercompany assistance services charged to the subsidiaries.
EBIT amounted to Euro 6 million (Euro 3.9 million in 2020), following amortisation and depreciation of approx. Euro 2.5 million and depreciation of right-of-use for Euro 1.8 million.
In 2021, BasicNet transferred the business unit encompassing the K-Way brand, related licensing agreements, samples inventory, moulds, and associated computer equipment and employees to the subsidiary of the same name, K-Way S.p.A. The difference between the transfer value and the net book value of the business unit resulted in the recognition of financial income of Euro 60.9 million.
The net profit was Euro 65.7 million, following income taxes of Euro 1 million (increasing Euro 1.7 million compared to the previous year, which included the net positive effect of Euro -1.4 million deriving from the release of deferred tax liabilities on the partial realignment of the tax value of trademarks in the portfolio, pursuant to Article 110 of Legislative Decree No. 104/2020).
Net of this component, net profit was Euro 4.8 million, compared to Euro 4.7 million in 2020.
| (Euro thousands) | December 31, 2021 | December 31, 2020 |
Change |
|---|---|---|---|
| Non-current assets | 8,287 | 8,436 | (149) |
| Brands | 10 | 9,397 | (9,387) |
| Right-of-use | 8,419 | 10,175 | (1,756) |
| Investments | 105,855 | 35,805 | 70,050 |
| Current assets | 82,901 | 89,377 | (6,476) |
| Total assets | 205,471 | 153,190 | 52,281 |
| Shareholders' Equity | 147,948 | 91,393 | 56,555 |
| Non-current liabilities | 22,616 | 28,745 | (6,129) |
| Current liabilities | 34,907 | 33,052 | 1,855 |
| Total liabilities and shareholders' equity |
205,471 | 153,190 | 52,281 |
Medium/long-term loans include contractual clauses, specific guarantees and restrictions on shareholder control.
Non-current assets include investments in the year for the development of software for Euro 1.8 million, purchase of moulds and EDP for Euro 0.5 million and fixtures and fittings and other assets for Euro 0.2 million. The value of tangible and intangible assets are recorded net of amortisation and depreciation for the year of Euro 2.5 million.
Rights-of-use include the value of the property lease contracts for the company's offices, owned by the subsidiary BasicVillage S.p.A., for future years, recognised in 2019 in application of IFRS 16. Depreciation of the right for the year amounts to Euro 1.8 million.
Equity investments, which include the carrying amount of the investments directly held by the parent company, increased as a result of the transfer of the K-Way business unit to the subsidiary K-Way S.p.A. as described above.
Shareholders' Equity at December 31, 2021 was approx. Euro 147.9 million (Euro 91.4 million in 2020), following the distribution in 2021 of dividends for Euro 3.1 million and the acquisition of treasury shares for Euro 6 million.
| December 31, 2021 | Change | |
|---|---|---|
| (11,403) | (15,091) | 3,688 |
| (10,656) | (15,500) | 4,844 |
| (120) | (105) | (15) |
| (22,179) | (30,696) | 8,517 |
| 57,372 | 66,952 | (9,580) |
| (8,441) | (10,196) | 1,755 |
| 48,931 | 56,756 | (7,825) |
| 26,752 | 26,060 | 692 |
| December 31, 2020 |
The net cash position of Euro 26.8 million was up from Euro 26.1 million in 2020.
The reconciliation at December 31, 2021 between the Parent Company net equity and result and the consolidated net equity and result is reported below.
The result for the Parent Company includes the extraordinary, non-recurring gain of Euro 60.9 million, which is equal to the difference between the increase in capital in K-Way S.p.A. and the net book value of the assets and liabilities included in the business unit transferred. As described in detail under note 41 to the separate financial statements of the Parent Company, this gain has been eliminated in its entirety at consolidated level.
| (Euro thousands) | Net Profit | Shareholders' Equity |
|---|---|---|
| Financial statements of BasicNet S.p.A. | 65,689 | 147,948 |
| Result and net equity of the consolidated companies and value at equity |
(45,359) | (14,126) |
| Elimination of the dividends received by the Parent Company | - | - |
| Group consolidated financial statements | 20,330 | 133,822 |
The Share Capital of BasicNet S.p.A. consists of 60,993,602 ordinary shares of a nominal value of Euro 0.52 each.
The key stock market figures for the years 2021 and 2020 are reported in the following table:
| (in Euro) | December 31, 2021 |
December 31, 2020 |
|---|---|---|
| Earnings/(loss) per share | 0.3965 | 0.1635 |
| Dividend per share (1) | 0.12 | 0.06 |
| Pay-out ratio (1) (2) | 30.2% | 36.6% |
| Dividend Yield (1) (3) | 2.1% | 1.4% |
| Price at year-end | 5.75 | 4.16 |
| Maximum price in year | 6.04 | 4.45 |
| Minimum price in year | 3.89 | 3.55 |
| Stock market capitalization (in thousands of Euro) | 350,713 | 253,733 |
| Total number of shares | 60,993,602 | 60,993,602 |
| Shares outstanding | 51,275,602 | 52,493,602 |
(1) dividends on the 2021 figures on the basis of the proposal for the allocation of the result to the Shareholders' AGM
(2) percentage of consolidated net profit distributed as dividend
(3) ratio between the dividend and the share price on the last day of the financial year
The list of parties holding, directly or indirectly, more than 5% of the share capital (the significance threshold established by Article 120, paragraph 2 of Legs. Decree No. 58 of 1998 for BasicNet which is classified as a "Small-Medium sized enterprise" as per Article 1, letter w-quater 1) of Legs. Decree No. 58 of 1998), represented by shares with voting rights, according to the shareholders' register, supplemented by the communications received in accordance with Article 120 of Legislative Decree No. 58 of 1998, other information held by the Company, and other communications as per Consob Resolution No. 21326 of April 9 2020, is as follows:
| Shareholder | % of ordinary & voting share capital |
Note |
|---|---|---|
| Marco Boglione | 33.639% | Owned indirectly through Marco Boglione e Figli S.r.l., which in turn owns the entire share capital of BasicWorld S.r.l. (33.128%) and the remaining 0.511% directly. |
| BasicNet S.p.A. | 16.116% | Treasury shares in portfolio. |
| Helikon Investments Limited | 10.68% | Discretional savings management |
| Francesco Boglione | 6.275% | Held indirectly through Francesco Boglione S.r.l. for 1.719%, with the residual 4.556% held directly. |
The BasicNet Group is subject to a variety of strategic, market and financial risks, as well as general business operational risks.
These risks arise from factors that may comprise the value of the trademarks that the Group implements through its Business System. The Group requires the capacity to identify new business opportunities and markets and appropriate licensees for each market. The Group monitors the activities of its licensees and detects any problems on-line in the management of the brands in the various regions. However, as the commercial license contracts usually establish the advance payment of guaranteed minimum royalties, economic conditions on certain markets may impact the financial capacity of certain licensees, temporarily reducing royalties, particularly where such licensees had previously exceeded the guaranteed minimums.
The Group retains that its Business System has the flexibility needed to swiftly respond to changes in customers' tastes and to limited and localised consumer slowdown. However, the Group may be exposed to economic crisis and social and general unrest, which may impact on consumer trends and the general economic outlook.
The spread of COVID-19 generated an unprecedented emergency on a global scale, with major health, social, and economic repercussions. The "Crisis Unit", which was set up in February 2020 in order to deal promptly with the emergency, implemented all the necessary protective measures to safeguard the health of employees and the continuity of Group operations. Against this backdrop, every possible strategy to protect the economic and financial sustainability of the Group was also adopted, including through the banking sector to secure the funding necessary to meet any cash requirement.
The duration and development of the pandemic, or other variants of Covid-19, are currently difficult to predict: this uncertainty could therefore have a negative impact on future years' results. The Group's solid balance sheet and its financial autonomy, together with the proven flexibility of its business model, mean that business continuity can be fully guaranteed.
The adoption of a licensee network system has enabled the Group brands to expand and quickly enter new markets. The Group monitors the activities of its licensees and detects any problems on-line in the management of the brands in the various regions. The most important factor of the system is therefore to guarantee the capacity to identify new business opportunities and markets and appropriate licensees for each market. The main risk is therefore the undertaking of licensees not equipped for the task and the particular local market.
The Group has adopted specific measures to assess licensees and for the drawing up of contracts to offset this risk, including:
The Group in addition in 2012 put in place the "dotcom"" BasicAudit for the control, verification and analysis of licensee operational compliance, identifying any discrepancies in their operations, developing contractual clauses requiring the annual preparation of certified statements by the International Auditing Firm to certify the data sent to the Group, and carrying out specific controls at licensee offices.
BasicNet carries out extensive selection and monitoring activities on the Sourcing Centers i.e. licensee businesses managing the production flows of Group brand finished products, which are distributed by the commercial licensees within their respective areas and has developed an IT platform which directly connects the productive and commercial licensees.
The theoretical risks identified with regards to the Sourcing Centers are:
BasicNet has put in place specific operating mechanisms to correctly manage these risks, including:
The Group is exposed to currency risk on merchandise purchases or royalty income from commercial licensees and sourcing centre commissions not within the Eurozone. These transactions are mainly in US Dollars and marginally in UK Sterling and Swiss Francs.
The risks on fluctuations of the US Dollar on purchases are measured, preliminary, in the preparation of the budgets and finished products price lists, so as to adequately cover the impact of these fluctuations on sales margins.
Subsequently, royalty income and sourcing commissions from sales are utilised to cover purchases in foreign currencies, within the normal activities of the Group centralised treasury management.
For the foreign currency purchases not covered by foreign currency receipts, or in the case of significant time differences between receipts and payments, forward purchase and sales contracts (flexi-term) are underwritten.
The Group does not undertake derivative financial instruments for speculative purposes.
Royalty trade receivables are largely secured by bank guarantees, corporate sureties, letters of credit, guarantee deposits, or advance payment, provided by licensees.
Royalty trade receivables are largely secured by bank guarantees, corporate sureties, letters of credit, guarantee deposits, or advance payment, provided by licensees.
Souring commission receivables are covered by the payables of the subsidiaries BasicItalia S.p.A., K-Way S.p.A. and of the Kappa Europe Group to the Sourcing Centers.
Receivables from Italian footwear and apparel retailers within the subsidiaries BasicItalia S.p.A. and K-Way S.p.A. are monitored continually by the credit department of the company alongside specialised legal recovery firms and regional credit bodies throughout the country, commencing from the customer order. Receivables from the brand stores under franchises are paid weekly, related to their sales and do not present substantial insolvency risks.
The sector in which the Group operates is exposed to seasonal factors, which impact upon the timing of goods procurement compared to sales, in particular where the products are acquired on markets with favourable production costs and where the lead times are however much longer. These factors also have seasonal effects on the financial cycle of the Group's commercial companies.
Short-term debt to finance working capital needs comprises "import financing" and "self-liquidating bank advances" secured by the order backlog. The Group manages the liquidity risk through close control on operating working capital with specific attention on inventories, receivables, trade payables and treasury management, with real-time operational reporting indicators or, for some information, at least on a monthly basis, reporting to Senior Management.
The interest fluctuation risks of some medium-term loans were hedged with conversion of the variable rate into fixed rates (swaps).
The Group may be involved in legal and tax disputes, concerning specific issues and in various jurisdictions. Considering the uncertainties relating to these issues, it is difficult to predict with precision any future payments required. In addition, the Group has instigated legal action for the protection of its Trademarks, and of its products, against counterfeit products. The cases and disputes against the Group often derive from complex legal issues, which are often subject to varying degrees of uncertainty, including the facts and circumstances relating to each case, jurisprudence and different applicable laws.
In the normal course of business, management consults with its legal consultants and experts in fiscal matters. The Group accrues a liability against disputes when it considers it is probable that there will be a financial payment made and when the amount of the losses arising can be reasonably estimated. The main disputes in which the Group is involved are summarised below.
In the initial months of 2018, a tax dispute with the Tax Agency began, following the inspection by the Finance Police for the years 2012 to 2017 at BasicNet S.p.A.. In the tax assessment, the Agency alleges the partial non-deductibility of the Post-employment benefit provision accrual made for the Executive Boards for the years 2012 to 2015, on the basis of an interpretation of the rules governing Post-employment benefits for employees, in the total absence of specific tax rules. The Tax Agency is claiming approx. Euro 360 thousand for IRES, in addition to penalties and interest. Not agreeing with the Tax Agency's interpretation and noting also favourable jurisprudence in similar cases, the Company presented an appeal for all of the years subject to assessment. In March 2019, the Turin Provincial Tax Commission heard the appeal presented by BasicNet. The Tax Agency has appealed against the Tax Commission's decision. The hearing before the Regional Tax Commission held in September 2020 confirmed the Turin Provincial Tax Commission's verdict, finding in favour of BasicNet.
In April, the Supreme Court of Cassation notified BasicNet of the challenge made by the Tax Agency. The company was requested to respond in court and the date for the first hearing is awaited.
On December 28, 2018, a tax assessment was received from the Tax Agency by the subsidiary Basic Properties America, Inc., with registered and administration office in New York-USA, following checks on BasicNet by the Finance Police in 2017, on the basis of the alleged tax inversion claimed by the latter against the US subsidiary. The assessments initially concern financial years 2011, 2012 and 2013, alleging tax evasion in Italy for approx. Euro 3.6 million, in addition to interest and penalties. Tax assessments were also received by BasicTrademark S.A. and SupergaTrademark S.A. for the alleged evasion of VAT for approx. Euro 1 million, on the basis that the royalties paid by Basic Properties America, Inc., for tax purposes considered an Italian company, to these two companies should have been subject to VAT. In July 2019, similar tax assessments for financial year 2014 were received, with claims for additional taxes of approx. Euro 0.3 million and for VAT for approx. Euro 0.1 million.
As they did not consider the arguments put forward by the Agency to be well-founded, the companies lodged appeals against the tax assessments and requests for provisional suspension of the executive effects of the assessments. The Turin Provincial Tax Commission, which had already accepted the request for provisional suspension in October 2019, at the end of January 2020 fully accepted the combined appeals of Basic Properties America Inc., BasicTrademark S.A. (now S.r.l.) and Superga Trademark S.A. (now S.r.l. and subsequently incorporated with BasicTrademark S.r.l.) and cancelled the tax assessments issued by the Tax Agency.
In June 2020, the Tax Agency appealed against the Provincial Tax Commission's decision. The defence panel submitted their counter-arguments to the appeal: the first hearing at the Regional Tax Commission, initially scheduled for July 2021, has been postponed until a date to be decided.
In May and June 2021, assessment notices relating to 2015 were received, with further demands of approx. Euro 0.2 million for direct taxes and Euro 0.3 million for VAT: the companies prepared their respective appeals, as well as the requests for provisional suspension of the effects. Nonetheless, the collections unit of the tax administration took charge of the amounts demanded, issuing payment demands equal to one-third of the respective assessment notices.
The defence team is continuing talks with the offices concerned, and the next hearings, on the merits and for suspension, are set for March and May of this year.
In May, the Supreme Court of Cassation filed its judgement of inadmissibility of the appeal lodged by BasicItalia S.p.A. against the decision of the Bologna Court of Appeal ordering the revocation of payments made by Giacomelli Sport S.p.A. for a total of Euro 1.6 million.
The Group, whilst firmly convinced of its good faith and the correctness of its actions, as, moreover, initially asserted by the first-degree decision of the Court of Rimini, promptly initiated contacts with the lawyers of the third party assignee of the various bankruptcy arrangements of the Giacomelli procedures in order to settle the balance due. In October, following negotiations with the third party assignee, the amount due to settle the matter was determined, and payment was made for a total of Euro 1.0 million, net of the final instalment payable to BasicItalia (Euro 550 thousand).
Therefore, all matters concerning the Giacomelli Group procedures and related disputes have been settled.
Human Resources and the environment are explored in specific sections of the Consolidated Non-Financial Report as per Legislative Decree 254/2016, respectively at paragraphs 4 and 5, to which reference should be made.
Under the treasury share buy-back program, authorised by the Shareholders' AGM of April 8, 2021, and concluding at the date of the Shareholders' AGM for the approval of the 2021 Annual Accounts, at the date of this report 1,230,000 treasury shares had been acquired (2.02% of the Share Capital) at an average price of Euro 5.05, for total consideration of Euro 6.2 million.
BasicNet today holds a total of 9,830,000 treasury shares (equal to 16.1% of the Share Capital), for an investment of Euro 31.3 million. The Group intends to continue the share buy-back programme in 2022 and proposes to the Shareholders' AGM to renew the authorisation. The proposal is submitted in order to provide the Company with a instrument to assist projects developed upon the strategic guidelines under which share swap opportunities are presented or as a guarantee for financing operations.
At the date of the present Report there are no stock option plans.
The Board of Directors of BasicNet decided on December 19, 2012, in accordance with Consob motion No. 18079 of January 20, 2012, to apply the opt-out as per Article 70, paragraphs 8 and 71, paragraph 1-bis of the Issuers' Regulation, applying therefore the exception from publication of the required disclosure documents concerning significant merger, spin-off, share capital increase through conferment of assets in kind, acquisition, and sales operations.
The shares held by the Directors and Statutory Auditors are reported in the Remuneration Report, available together with the documentation for the 2022 Shareholders' AGM on the website www.basicnet.com, to which reference should be made.
The transactions with related parties are not atypical or unusual and form part of the ordinary business activities of the companies of the Group. These transactions were at normal market conditions. The information on transactions with related parties are presented in Note 50 of the consolidated financial statements.
The operations between Group companies, which substantially involve the purchase of goods and provision of services, under normal market conditions, are not of an atypical or unusual nature, but within the normal business activities of the companies of the Group and are eliminated on consolidation.
The effects deriving from transactions between BasicNet S.p.A. and its subsidiaries are reported in the financial statements of the Parent Company and in the explanatory notes to the financial statements.
The Italian Group companies took part in the tax consolidation of BasicNet S.p.A. as per Articles 117 and subsequent of the Income Tax Law - Pres. Decree December 22, 1986 No. 917.
The Board of Directors approved on October 29, 2010 and updated most recently in June 2021 the procedure for transactions with related parties, which are summarised in the Corporate Governance and Ownership Report. The procedure is also available in its full version on the Group website (www.basicnet.com in the section "BasicNet Corporate Governance").
In accordance with Article 15 of the Markets' Regulation, the company and its subsidiaries utilise administrative-accounting systems which enable the provision to the public of the financial statements used for the purposes of the preparation of the consolidated financial statements of the companies falling within the scope of this regulation and permit management and the auditors of the Parent Company to access the data necessary for preparation of the consolidated financial statements.
The conditions of the above-stated Article 16, letters a), b) and c) of the Markets' Regulation issued by Consob are therefore complied with.
The composition of the Board of Directors of the companies is available on the website www.basicnet.com/ilgruppo/organisociali.
In keeping with its economic goals and its responsibility to its stakeholders, the Group regards research and innovation as key to its growth and success.
The Group's research and development activity focuses on three main fields of inquiry:
These fields of inquiry – the pursuit of which involves most internal personnel – translate into three main types of research and development activities:
This category includes product research aimed at developing collections of athletic and casual apparel and footwear, from material research to the styling and graphical design of garments, the identification of specific production techniques and the creation of garment prototypes and samples. BasicNet and K-Way develop models and designs for all of the Group's brands with the goal of marketing products that provide high added value and are strongly appreciated by consumers for their aesthetic qualities, such as their colour, materials and shape. Designs and models are validated through prototyping (in some cases involving the use of 3D printers), which allows designs to be shared with licensees and Sourcing Centers, often – and most importantly – before actual production begins. In particular, concepts are created, basic designs are prepared and prototypes are produced for all unique, individual designs and models. Early designs form a "metacollection" which then becomes a "mega-collection" (a set of approved articles) on the basis of feedback from the various licensees. The "mega-collection" is then made available on the online platform for the purchase of samples by the licensees. The selection of articles purchased makes up the "collection"
distributed to the market. Product research costs are expensed in the year in which they generate revenues from sales, or royalties from the relative collections.
This category includes IT research in terms of the development of proprietary information systems connecting the companies of the BasicNet Network licensees both to each other and externally. The software and apps developed fall into three major categories by intended use:
This type of software is generally used in specific functional areas to carry out activities such as selecting, negotiating and entering into licence agreements, managing the procurement of goods and services, managing e-commerce sales, managing all administrative activities, managing personnel, managing workplace health and safety obligations, managing cash flows, managing institutional and commercial communication, carrying out sponsorship activities and activities involved in designing new collections and making them available to network member companies.
This category includes research regarding communication and marketing, i.e. the means that licensees use to inform end users of their products and what sets them apart from the competition or the state of the art, as well as to advertise their products and brands. Communication and marketing contribute to brand value and drive sales by increasing brand visibility, supporting positive views or perceptions of brands and increasing customer loyalty. It follows that in order for a brand to grow in the long term, marketing must be appropriately organized so as to satisfy the needs of an increasingly large audience and to take account of multiple objectives. BasicNet S.p.A. and K-Way S.p.A. for the K-Way® brand are responsible for setting the Group's commercial strategy and managing the proper combination of distribution channels. Local licensees are responsible for carrying out marketing activities in accordance with the Group's guidelines. The activity performed in this regard is thus attributable to the following communication channels: promotion of sales, public relations, advertising and interactive marketing.
In conducting business, the BasicNet Group is committed to ensuring ethical, transparent relations with all of its stakeholders, and with its shareholders, employees and business partners in particular. Development of BasicNet's business is centred on compliance with laws and regulations, combating bribery and corruption, ethical values and respect for human rights. The following Corporate Governance and Ownership Structure Report and Consolidated Non-Financial Report are key to ensuring transparency and responsibility towards all of the Group's stakeholders.
The due diligence activities are continuing for the acquisition of 100% of the share capital of K-Way France S.a.s., the K-Way® licensee in France, where the brand originated in the mid-1960s. The transaction is expected to be completed within the first half of the year.
On the basis of the order portfolio and forecast royalties and sourcing commissions, consolidated revenues are expected to grow further in the current financial year. The core operating results are however subject to the global economic environment and the consequent repercussions on raw material costs and also the geopolitical crisis arising in Eastern Europe.
* * *
Dear Shareholders,
we submit, for your deliberation, the following:
the Shareholders' AGM of BasicNet S.p.A., having reviewed the 2021 results, the Directors' Report and having noted the Board of Statutory Auditors' Report and that of the Independent Audit Firm EY S.p.A.,
to approve the Directors' Report and the Financial Statements at December 31, 2021, in relation to each individual part and in its entirety.
Dear Shareholders,
We propose the allocation of the net profit of Euro 65,689,195.35 as follows:
| | to unrealised exchange gains reserve | Euro | 46,502.66 |
|---|---|---|---|
| | to conferment reserve | Euro | 60,903,372.50 |
| | to the shareholders by way of dividend, the residual amount equal to |
Euro | 4,739,320.19 |
Furthermore, in order to remunerate shareholders in line with previous years, we propose supplementing the dividend paid to shareholders by taking Euro 1,400,311.81 from retained earnings and distributing a dividend of Euro 0.12 to each of the 51,163,602 ordinary shares in circulation (excluding the 9,830,000 treasury shares held at March 3, 2022) for an amount of Euro 6,139,632.24.
As a result, "retained earnings" will decrease from Euro 44,247,429 to Euro 42,847,117.
The dividend will be paid from April 27, 2022, with record date of April 26, 2022 and coupon date (No. 15) of April 25, 2022.
We also propose authorising the company representatives, with individual signatory powers, to determine the actual amount to be taken from retained earnings based on the actual number of shares in circulation with dividend rights and on any rounding that may take place when making the actual payment.
We propose therefore the following:
The BasicNet S.p.A. Ordinary Shareholders' AGM
to approve the proposed allocation of the net profit for the year of Euro 65,689,195.35, as presented above, and the proposed payment of a dividend of Euro 0.12 to each of the ordinary shares in circulation and entitled to receive dividends on the coupon date.
Turin, March 3, 2022
.
for the Board of Directors The Chairperson
Marco Daniele Boglione
The BasicNet Group operates in the apparel, footwear and accessories sector through the brands Kappa®, Robe di Kappa®, K-Way®, Superga®, Briko®, Jesus® Jeans, Sabelt® and Sebago®.
Group activities involve driving brand enhancement and product distribution through a global network of independent licensees. This business network is defined as the "Network". And from which the name BasicNet derives. The Network of licensees encompasses all key markets worldwide.
In its operations, BasicNet has always sought to create value for its shareholders and, more generally, all those who have a stake in the Group's business. The main stakeholders include groups directly linked to business activities, such as Group Resources, the Network of licensees, Investors, Shareholders and the Financial Community, the Public Sector, Governmental and Control Bodies and the Local Communities in which the Group operates.
The sustainable success is achieved through BasicNet's Business System, which offers business opportunities to a worldwide network of independent companies that do business with the Group, namely its manufacturing licensees (sourcing centers) and its commercial licensees (licensees). Accordingly, BasicNet is aware that the Group's economic growth is closely linked to the economic development of its licensees, and that this link represents an initial important factor of sustainability that is inherent to the nature of the Group's business.
For a number of years, the Group has been working to innovate the design and quality of their collections and to find sustainable products and materials. This began with the Kappa® and Robe di Kappa® Brands and continues with K-Way®, the collections of which include environmentally sustainable processes and materials, as well as with Superga® (2750 is the world's first sneaker to be made from 100% natural raw materials) and Sebago®, whose winning features are strength and durability, and Briko®.
As noted, since January 2020, the domestic and international picture has been dominated by the gradual spread of COVID-19 and the resulting restrictive containment measures implemented by the governments of the countries affected. BasicNet responded promptly to the global health and economic crisis caused by COVID-19, respecting the regulations in place in the countries in which it operates. In this area, in April 2021, in collaboration with Humanitas Gradenigo Hospital, a vaccination HUB was set up at Turin's BasicVillage, which enabled the Group's employees, collaborators, and their families to get their first and second doses of the vaccine. At its peak, this site provided about 800 doses per day.
BasicNet S.p.A. is the parent company of the Group – with headquarters in Turin - listed on the Italian Stock Exchange.
The Governance of BasicNet S.p.A. is represented by the Shareholders' AGM, the Board of Directors and the Board of Statutory Auditors.
The company has prepared a non-financial report in accordance with Legislative Decree No. 254/2016, which is published together with the Directors' Report and Annual Financial Report and may be found at www.basicnet.com.
BasicNet is defined as an SME in accordance with Article 1, paragraph 1, letter w-quater 1), of the CFA and Article 2 of Consob Issuers' Regulation and is included in the list published by Consob here: http://www.consob.it/web/area-pubblica/emittenti-quotati-pmi. Average market capitalisation in 2021 was Euro 278.6 million, thereby continuing to meet the definition of SME.
BasicNet does not meet the Code's definition of "large enterprise" or "company of concentrated ownership" as introduced in the new Corporate Governance Code.
The Share capital, fully subscribed and paid-in, amounts to Euro 31,716,673.04 and is comprised of 60,993,602 ordinary shares listed on the MTA with a value of Euro 0.52 each.
At the date of this Report, the Company holds 9,830,000 treasury shares, equal to 16.116% of the share capital.
The Company has not issued financial instruments that attribute the right to subscribe to new share issues.
No share-based incentive plans have been introduced which would resulted in an increase, including through scrip issues, of the share capital.
At the date of the present Report, there are no restrictions on the transfer of shares.
As stated above, with reference to Article 1, letter w-quater 1) of the CFA, BasicNet qualifies as a "Small- Medium-sized enterprise" (SME). The significance threshold is 5% of the share capital with voting rights. The list of parties holding, directly or indirectly, more than 5% of the share capital according to the shareholders' register, supplemented by the communications received in accordance with Article 120 of Legislative Decree No. 58 of 1998 and other information held by the Company, is as follows:
| Shareholder | % of ordinary & voting share capital |
Note |
|---|---|---|
| Marco Boglione | 33.639% | Owned indirectly through Marco Boglione e Figli S.r.l., which in turn owns the entire share capital of BasicWorld S.r.l. (33.128%) and the remaining 0.511% directly. |
| BasicNet S.p.A. | 16.116% | Treasury shares in portfolio. |
| Helikon Investments Limited | 10.680% | Discretional savings management. |
| Francesco Boglione | 6.275% | Held indirectly through Francesco Boglione S.r.l. for 1.719%, with the residual 4.556% held directly. |
There are no shares which confer special control rights.
The Extraordinary Shareholders' Meeting of July 29, 2021 approved the amendments to the By-Laws to introduce the increased voting rights mechanism, as per Article 127-quinquies of Legislative Decree No. 58/98. This mechanism permits the assignment of two votes for each ordinary BasicNet share held by the same Shareholder of the Company for a continuous period of at least 24 months from their enrolment in a special Register set up and maintained by the Company.
On the same date, the Board of Directors, based on the mandate conferred by the Extraordinary Shareholders' Meeting, adopted the regulation for the governance of the registration, maintenance and updating of the Special Register in compliance with the applicable regulation, the Company By-Laws and market best practice. At present, and in consideration of the date on which the mechanism was introduced, there are no shares that enjoy increased voting rights.
The special register of shareholders for the certification of increased voting rights (Article 127-quinquies, paragraph 2, of the CFA) with stakes in excess of 5% in The capital of BasicNet S.p.A. may be found online at www.basicnet.com/corporategovernance/votomaggiorato.
There is no share participation programme for employees.
There are no restrictions on voting rights. The issuer has exclusively issued ordinary shares; each share provides one vote (Article 6 of the By-Laws). Article 21 of the By-Laws excludes the right to withdrawal with regards to motions concerning the extension of the Company's duration or the introduction or the removal of restrictions on the circulation of equities.
At the date of the present Report, there are no agreements between Shareholders.
The contractual conditions of the loans in place at the date of the present Report include typical clauses for such loans, such as the maintenance of some conditions concerning the holding of the majority shareholder of the Company.
The Extraordinary Shareholders' Meeting of April 29, 2011 approved, among other matters, the change to Article 16 of the Company By-Laws – Powers of the Board of Directors and legal representation – in order to recognise to the Board of Directors the right to undertake, at any moment and without prior authorisation of the Shareholders' Meeting, defensive measures in the case of public offers or exchanges, pursuant to Article 104 of the CFA, as amended by Article 1 of Legislative Decree No. 146 of September 25, 2009. In particular Article 16 includes two paragraphs as follows:
The Board of Directors do not have powers to increase the Share Capital pursuant to Article 2443 of the Civil Code.
The Shareholders' of April 8, 2021 approved, for a period of twelve months, or until the next Shareholders' Meeting to approve the 2021 Annual Accounts, the authorisation to purchase and utilise a maximum number of shares, which taking into account those already held by the Company, does not exceed the limits permitted by law, for a maximum expected financial commitment of Euro 10 million. As part of the treasury share buy-back programme, at the date of this Report, BasicNet S.p.A. has acquired 1,230,000 shares (equal to 2.016% of the share capital), at an average price of Euro 5.05 for a total payment of Euro 6,213,629.
BasicNet today holds a total of 9,830,000 treasury shares (equal to 16.116% of the Share Capital), for an investment of Euro 31 million.
Following its appointment, the outgoing Board of Directors examined the issue during its meeting of July 25, 2019; as a result of the assessments made, it concluded that BasicNet S.p.A. is not subject to management and co-ordination activities pursuant to Article 2497 et seq. of the Civil Code and defines its general strategic and operational guidelines in full autonomy.
In particular, BasicNet S.p.A. considers that it is not subject to the management and coordination of BasicWorld S.r.l., a company which holds 33.128% of the share capital, also with reference to Article 16 of the Consob Market Regulation:
BasicNet S.p.A carries out direction and coordination activities, pursuant to Article 2497-bis of the Civil Code, for the directly and indirectly held Group subsidiaries in Italy. This activity involves oversight of the general strategic directives and in the definition and amendment of guidelines for the Internal Governance and Control model. Coordination involves the central management within BasicNet S.p.A. of the Treasury, ICT, personnel, corporate affairs and operating control. All Group companies adopt and respect the Ethics Code.
It is noted that:
the disclosures required by Article 123-bis, paragraph 1, letter l), second part (applicable regulations concerning the amendment of the By-Laws if differing from applicable law and regulations) are illustrated in the section of the report concerning Shareholders' Meetings (Section 13).
COMPLIANCE (pursuant to Article 123-bis, paragraph 2, letter a), CFA)
The Corporate Governance system adopted by BasicNet S.p.A. incorporates the rules and procedures within the Company's By-Laws and provisions of law, which outlines the system of management and control of the Company and of the Group.
BasicNet also adopts, based on the Company's size, the shareholder structure and organisation, the principles, and the recommendations contained in the Corporate Governance Code issued by Borsa Italiana, available on the Borsa Italiana website (https://www.borsaitaliana.it/comitato-corporategovernance/codice/2020.pdf).
This report provides information and explanations of any deviations from one or more recommendations of the Code.
Information on the corporate governance of BasicNet S.p.A is available on the Company's website at www.basicnet.com. The site is updated regularly to include all regulatory and corporate information on the Group, including sections dedicated to sustainability, investors, and shareholders.
The Investor Relations section includes a subsection for Corporate Governance, where the following documents are published:
| BasicNet Corporate Governance | |
|---|---|
| > Annual Report | |
| $\geq$ Ethics Code | |
| > BasicNet Sp.A. By-Laws | |
| > Shareholders' Meeting Regulation | |
| > Internal Dealing | |
| > Principles of the 231 Model | |
| > Related Parties Procedure | |
The Annual Report, which is published on the website www.basicnet.com/contenuti/corporate/corporategovernance.asp, illustrates the governance structure of the Group.
The subsection "The Group" includes the following information:
The subsection "Corporate Boards" includes the qualifications of the Directors and other members of the Boards of Statutory Auditors of the companies of the Group.
Neither BasicNet S.p.A. nor its strategic subsidiaries are subject to laws in force outside Italy which affect the corporate governance structure.
The Board of Directors of BasicNet:
Within this context, the Board of Directors:
In 2021, the Board:
Every six months, the Board also examines the report of the Control and Risks and Related Parties Committee containing a summary of the activities carried out, their results and the opinion on the adequacy of the Internal Control and Risk Management System. At the meeting of March 3, 2022, the Board, noting that the Internal Audit and Supervisory Board report for 2021 identified no significant situations or criticalities, confirmed its opinion regarding the adequacy of the Group Internal Control and Risk Management System, reserving the right, in acceptance of the Committee's recommendations, to assess its strengthening in view of the expansion of the Company's scope. The Board of Directors at the meeting approved the audit plan for 2022 and reserved the right to assess, when the new Board of Directors takes office, an increase in the annual budget available to the boards making up the Internal Control System, in view of the expansion of the Company's scope.
The norms applied in the appointment and replacement of the Directors are set out in Article 13 of the Company By-Laws, in relation to which reference should be made to the Company's website www.basicnet.com/contenuti/gruppo/statuto.asp
The Company is administered by a Board of Directors, made up of between five and fifteen members. The Shareholders' Meeting, before their appointment, establishes the number of members of the Board of Directors and the duration of office in accordance with that permitted by law. The By-Laws provide that at least one member of the Board of Directors, or two if the Board of Directors is comprised of more than seven members, should be considered independent in accordance with law. Each slate should include at least one candidate considered independent.
The procedure for appointment as per Article 13 provides:
that the minority shareholders that either alone, or together with other shareholders, holding voting rights not lower than that required by current regulations, will be reserved the appointment of one Director. For 2022, as in previous years, this percentage was set at 4.5% (Consob Executive Resolution No. 60 of January 28, 2022);
that the procedure for electing the Directors shall be as follows: i) from the slate which obtained the highest number of votes, based on the progressive order with which they are listed in the slate, all the members necessary are elected to fill the number of Directors established for the Shareholders' Meeting, while ensuring the gender balance provisions are complied with, except one; ii) from the slate which obtained in the Shareholders' Meeting the second highest number of votes one member is elected of the Board of Directors as the first candidate on this slate;
Should one or more vacancies occur on the Board, Article 2386 of the Civil Code shall be applied, as follows:
The Board of Directors in office was appointed by the Shareholders' Meeting of April 19, 2019 and its mandate concludes with the approval of the 2021 Annual Accounts. It comprises fourteen members, as shown in the table below:
| Structure of the Board of Directors whose members were appointed on the basis of slates presented by Shareholders | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Office | Members | Year of birth |
Date of first appointm ent (*) |
In office from | In office until |
Slate (M/m) (**) |
Exec. | Non Exec. |
Ind. Code |
Ind. CFA |
No. of other offices (***) |
Attendance (****) |
| Chairperson | Marco Boglione |
1956 | 1999 | 19/04/2019 | Approval 2021 Accs. |
M | X | - | 8/8 | |||
| Non-Executive Vice Chairperson, member of the Remuneration Committee |
Daniela Ovazza |
1956 | 1999 | 19/04/2019 | Approval 2021 Accs. |
M | X | - | 8/8 | |||
| Chief Executive Officer | Federico Trono |
1973 | 2019 | 19/04/2019 | Approval 2021 Accs. |
M | X | - | 8/8 | |||
| Director | Alessandro Boglione |
1988 | 2019 | 19/04/2019 | Approval 2021 Accs. |
M | X | - | 8/8 | |||
| Director | Lorenzo Boglione |
1986 | 2019 | 19/04/2019 | Approval 2021 Accs. |
M | X | - | 8/8 | |||
| Director | Veerle Bouckaert |
1966 | 2019 | 19/04/2019 | Approval 2021 Accs. |
M | X | - | 8/8 | |||
| Director | Paola Bruschi | 1967 | 2007 | 19/04/2019 | Approval 2021 Accs. |
M | X | - | 8/8 | |||
| Non-Executive Independent Director, member of the Remuneration Committee and of the Control and Risks and Related Parties Committee |
Elisa Corghi | 1972 | 2016 | 19/04/2019 | Approval 2021 Accs. |
m | X | X | X | 3 | 7/8 | |
| Non-Executive Independent Director, member of the Control and Risks and Related Parties Committee |
Cristiano Fiorio |
1972 | 2019 | 19/04/2019 | Approval 2021 Accs. |
M | X | X | X | - | 8/8 | |
| Director | Francesco Genovese |
1988 | 2019 | 19/04/2019 | Approval 2021 Accs. |
M | X | - | 8/8 | |||
| Non-Executive Independent Director, Chairperson of the Control and Risks and Related Parties Committee and member of the Remuneration Committee |
Renate Hendlmeier |
1957 | 2015 | 19/04/2019 | Approval 2021 Accs. |
M | X | X | X | - | 8/8 | |
| Director | Alessandro Jorio |
1960 | 2019 | 19/04/2019 | Approval 2021 Accs. |
M | X | - | 8/8 | |||
| Non-Executive Independent Director, Lead Independent Director, member of the Remuneration Committee and of the Control and Risks and Related Parties Committee |
Adriano Marconetto |
1961 | 2007 | 19/04/2019 | Approval 2021 Accs. |
M | X | X | - | 8/8 | ||
| Non-Executive Director Chairperson of the Remuneration Committee |
Carlo Pavesio | 1956 | 1999 | 19/04/2019 | Approval 2021 Accs. |
M | X | 1 | 8/8 |
(*) The first appointment of each Director refers to the date on which the Director was appointed for the first time to the Board of BasicNet S.p.A..
(**) This column indicates whether the slate for each Director is selected from a "majority" slate" - "M", or a "minority" slate - "m".
(***) This column indicates the number of offices a Director or Statutory Auditor holds in other listed companies or large enterprises. The Corporate Governance Report indicates all offices held.
(****) This column indicates the number of Board meetings attended by each Director, compared with the total number of meetings held during the year.
The curricula vitae of the Directors in office, which describe their personal backgrounds and professional qualifications, are available on the Company's website at www.basicnet.com/contenuti/gruppo/organisocialisocieta.asp.
The Board of Directors, in its current composition, complies with the "gender quota" rules applicable on the appointment date.
At its meeting on March 3, 2022, BasicNet's Board of Directors voted not to adopt any additional diversity policies beyond those required by law, given that:
In relation to the seniority of the outgoing Board of Directors, 43% of its members are between 30 and 50 years of age (8% in its previous composition), while 57% of members are over 50 years of age (92% in its previous composition).
BasicNet has not adopted any measures to promote equal treatment and gender equality within the corporate boards, since no difference in treatment relating to gender (considering equivalent roles and seniority) or in the composition of the Group's workforce (864 personnel, 570 women, 294 men) is evident.
The Board of Directors does not consider it necessary to limit the maximum number of offices which each Director may hold, also in view of the consistently high and fruitful participation of all members at meetings of the Board of Directors.
The Directors, in practice, have the facility to participate in meetings subsequent to their appointment and during their mandate with the Chairperson and Management, in order to improve their understanding of the organisational structure and corporate processes and to ensure that they remain informed regarding corporate affairs and developments. They also continually have access to financial and operational information from the BasicManagement portal.
In managing its own operations, the Board adopts the provisions of the law and the Company's By-Laws. As such, and in view of the smooth functioning of Board business, it did not consider it necessary to define any further specific rules. For completeness, the role played by the Board of Directors, even if not formally governed by a specific Regulation, is described below.
The Board of Directors meets whenever the Chairperson deems it to be necessary or appropriate, or when requested by at least two members of the board or by the Board of Statutory Auditors. Meetings may also be held off-site, either in Italy or abroad (Article 14 of the Company By-Laws).
Meetings are to be called by the Chairperson, or by another party vested with such powers, by way of registered mail or electronic mail at least five days prior to the date set for the meeting, unless urgent circumstances make this advance notice impossible.
It is standard practice for the Board of Directors to meet at least four times each year to examine financial performance for the period and to provide updates on the activities conducted by the executive boards. The Board of Directors met 8 times in 2021.
Meetings of the Board of Directors may also be validly held by way of teleconferencing, so long as it is possible to determine the exact identification of the persons entitled to attend may be verified, and for all participants to contribute verbally, in real time, on all matters and to receive and send documents.
Executives of the Company may participate at the Board meetings, on the invitation of the Chairperson, where there is a need to provide guidance on the matters on the Agenda.
The documentation concerning the matters under discussion was made available in advance to the Directors and Statutory Auditors. Since 2019, a dedicated section called "My Documents" has been set up on the corporate website where documents are uploaded for discussion on Agenda items. In accordance with the Code, the Board of Directors, considering the operating dynamics of the Company and the Group, identified the period of two days as appropriate for the sending of preliminary meeting material, except in the cases of urgency, in which case the documentation shall be made available and adequately presented during the meeting. The aforementioned deadline for Board meetings was generally met in 2021.
As mentioned above, the Board held eight meetings in 2021, lasting an average of two hours each.
In January 2022, the Company published its financial calendar, which established the days for the five Board meetings for 2022, for the review of the preliminary results, the approval of the 2021 separate and consolidated financial statements, the approval of the half-year report and the review of the quarterly disclosure to the market. As established by Article 82-ter of the Issuers' Regulation, BasicNet will continue to publish the quarterly results on a voluntary basis, until any differing assessment. During its meeting on October 29, 2020 and in order to provide more complete and timely disclosure, the Board of Directors decided to combine its quarterly reporting on commercial performance with market disclosure regarding movements in its main operating and financial performance indicators, which are constantly monitored by the Group. The quarterly disclosure shall be published in a press release to be issued on conclusion of the Board of Directors' meetings called to approve the above results.
The financial calendar is available on the website www.basicnet.com
On February 10, 2022, the first meeting was held to examine the preliminary 2021 data and review corporate affairs as per Article 150 of the CFA and Article 13 of the By-Laws.
The Chairperson promotes and coordinates the proper functioning of the system of corporate governance in pursuit of the Company's interests.
The Chairperson ensures that the handling of each matter on the Agenda is allocated the necessary time to ensure constructive debate, considering debate among the Board as useful for the motions to be considered, including by providing information prior to the meeting. The Chairperson also ensures the efficacy of the Agenda of Board meetings, adapting the length of discussion to the importance of the items to be discussed.
A Secretary to the Board of Directors is appointed by the Board of Directors in order to help organise the Board's activities. This Secretary may be selected from among the members of the Board of Directors, employees of the Company, or other individuals from outside the Company.
The Secretary supports the activities of the Chairperson, in particular in the preparation of board and Shareholders' Meetings, in the drafting of the relevant motions, in ensuring the adequacy, completeness and clarity of the information flows to the Board, in the communication with the Directors.
The Secretary assists the Chairperson in relations with the Board and provides impartial assistance and advice to the Board of Directors on any aspect relevant to the proper functioning of the corporate governance system.
The Secretary also coordinates the activities of the Internal Board Committees and provides related support.
The Secretary drafts the minutes of each Board meeting, signs them along with the Chairperson, and ensures that they are archived in the Company's records.
The Shareholders' Meeting of April 19, 2019 confirmed Marco Boglione as the Chairperson of the Board of Directors and Daniela Ovazza as Vice-Chairperson of the Board of Directors. On the same date, it appointed Federico Trono as Chief Executive Officer.
In accordance with Article 13 of the By-Laws, the Vice-Chairperson executes the role of Chairperson in the case of the latter's temporary absence or unavailability.
The Board of Directors meeting of April 19, 2019 delegated to the Chairperson all powers for ordinary and extraordinary administration with sole signature, within a limit of Euro 4 million for the acquisition and/or sale of quotas or shares in companies, enterprises, business units or brands, Euro 5 million with reference to the annual cost of sponsorship contracts and financial debt transactions with a value within a limit of 60% of the consolidated equity of the Company, and Euro 4 million for the granting of all secured and unsecured guarantees and patronage letters (with the exception of the subsidiary companies).
The decision to grant executive powers to the Chairperson, the founding member of the Group, is an acknowledgement of the central importance of the role to the sustainability of the Company. While a generational changeover is underway in the interest of business continuity, strongly desired by the Chairperson himself, there is no doubt that the he still plays a role in the design of Company's strategic interest and in inspiring, guiding and coordinating the actions and behaviours for achievement of the objectives.
At the same meeting, the Board of Directors delegated:
Executive Committee (pursuant to Article 123-bis, paragraph 2, letter d), CFA)
The Board of Directors did not set up an Executive Committee.
The executive boards reported to the Board and the Board of Statutory Auditors at their meetings, at least on a quarterly basis, with regards to the activities carried out in the exercise of their powers, on the general operating performance and the outlook and also on the most significant operations undertaken by the Company and its subsidiaries.
In addition to the Chairperson, Marco Boglione, the following are Executive Directors: the Chief Executive Officer, Federico Trono, who is also a member of the boards of BasicItalia S.p.A, K-Way S.p.A., and BasicNet Asia Ltd., and the Sole Director of K-Way Retail S.r.l.; the Directors Paola Bruschi, Group CFO as well as member of the Board of K-Way S.p.A.; Alessandro Boglione, Chief Executive Officer of the subsidiary BasicItalia S.p.A., Executive Chairperson of the Board of Directors of Kappa France S.A.S. and BasicRetail S.r.l., and Chairperson of BasicNet Asia Ltd; Lorenzo Boglione, Chief Executive Officer of Basic Trademark S.r.l. and TOS S.r.l., Chairperson of the Board of Directors of BasicAir S.r.l., Vice-Chairperson for Business Development of Basic Properties America Inc., and Director of Kappa France S.A.S.
Directors Veerle Bouckaert, Head of Legal Affairs and Board member of Basic Trademark S.r.l., Francesco Genovese, Vice-Chairperson Organisation, and Alessandro Jorio, Group Creative Manager, are also Executive Directors. In January 2022, Alessandro Boglione and Lorenzo Boglione were appointed as Chief Executive Officers of K-Way S.p.A.
The Board of Directors includes four Independent Directors: Elisa Corghi, Cristiano Fiorio, Renate Hendlmeier and Adriano Marconetto.
Once each year, and upon the appointment of new members, the Board assesses the independence of its members based on the circumstances defined in the CFA and in the Code. Recommendation 7 of the Corporate Governance Code provides that, at least at the beginning of their term of office, the Board of Directors should define the quantitative and qualitative criteria for assessing the significance of certain commercial, financial or professional relationships that could compromise the independence of Directors. Given that the need for such an assessment has not arisen in the current configuration, the Board has decided not to make any determinations in this regard.
The Board of Directors meeting of March 3, 2022 assessed, on the basis of their declarations, the independence of the Directors Cristiano Fiorio, Renate Hendlmeier, Adriano Marconetto and Elisa Corghi. The Director Adriano Marconetto considered that his holding of the position since 2007 and therefore for more than nine years does not affect his independence. To underline this, Director Marconetto pointed out that at no point did he receive remuneration that was different to the remuneration of Non-Executive Directors, or any other remuneration from BasicNet or Group companies, and he did not provide any type of consultancy activity, even free of charge. He has never held BasicNet shares or shareholdings in Group companies and has always critically exercised his vote independently of and unrelated to interests other than purely company ones.
With regard to the above, the Board deemed that the Director Marconetto continues to meet the independence requirements, considering that the fact that he has been in office for more than nine years is not to his detriment, but rather that his acquired knowledge of corporate and market dynamics concerning the individual Group brands is a positive and fundamental aspect of his ability to judge and contribute to the assessments of the Board of Directors.
As stated in the report to the Shareholders' AGM called for the approval of 2021 Annual Accounts, the Board of Statutory Auditors has verified the correct application of the criteria and procedures adopted by the Board of Directors to assess the independence of its members.
At its meeting of July 27, 2019, the Board of Directors appointed Adriano Marconetto as Lead Independent Director. In this role he co-ordinates any requests and contributions from Independent Directors, ensuring that the Independent Directors receive complete and timely information flows on the Company's management and performance.
The Board approved the procedure for the handling of confidential information, subsequently updated with the regulations on Market Abuse. The policy was updated on February 9, 2018, incorporating the Guidelines upon the management of inside information published by Consob in October 2017.
This procedure contains the regulations for the internal management and external communication of confidential documents and inside information, for the management of delayed disclosure, in addition to the setting up and management, based on a specific IT procedure, of the Register for persons with access to insider information and a Register of persons possessing "relevant information".
Since April 1, 2006, the Internal Dealing Code has been applicable, updated in 2016 to incorporate new provisions of the Regulation of the European Parliament and Council of April 16, 2014 No. 596/2014. The Code governs the procedures for disclosure to the market on operations on BasicNet S.p.A. shares by "Significant Persons" of the Group, as identified by Article 114 and thereafter of the CFA.
The procedure is available on the website: www.basicnet.com/contenuti/gruppo/internaldealing.asp.
In 2021, six Internal Dealing communications regarding transactions involving the BasicNet share by one shareholder were received in accordance with the Market Abuse Regulation (MAR).
The Board meeting of April 19, 2019 appointed the Remuneration Committee and the Internal Control and Risks Committee. The Control and Risks Committee also continue to act as the Related Party Transactions Committee.
The Board did not set up, as illustrated below, an Appointments Committee or other given the independent presentation of the slates by the shareholders.
As for the Board of Directors, there are no formal rules for the functioning of the committees. It is standard practice for the committees to meet when called by the committee Chairperson, in coordination with the Company's Corporate Affairs function. All committee members have access to the company information needed for their activities. Materials regarding the items on the Agenda for the committee meeting are to be provided by the Corporate Affairs unit at least two days prior to the meeting, unless otherwise established (e.g. procedures for the examination of related party transactions require that documentation be provided at least 15 days prior to the meeting at which the Committee is called to express its opinion on the transaction). The minutes of committee meetings are drafted by their respective Chairpersons. Minutes of committee meetings are to be archived by the Corporate Affairs unit.
The average length of committee meetings is two hours for the Control and Risks and Related Parties Committee and one hour for the Remuneration Committee.
| B.o.D. | Control and Risks and RPT Committee |
Remuneration Committee |
|||
|---|---|---|---|---|---|
| Office/Category | Members | (*) | (**) | (*) | (**) |
| Independent Non-Executive Director as per CFA and Code |
Renate Hendlmeier | 11/11 | P | 4/4 | M |
| Independent Non-Executive Director as per CFA and Code |
Elisa Corghi | 11/11 | M | 4/4 | M |
| Independent Non-Executive Director as per CFA and Code |
Cristiano Fiorio | 8/11 | M | ||
| Independent Non-Executive Director as per CFA and Code |
Adriano Marconetto | 10/11 | M | 4/4 | M |
| Independent Non-Executive Vice-Chairperson |
Daniela Ovazza | 4/4 | M | ||
| Non-Independent Executive Director |
Carlo Pavesio | 4/4 | P | ||
| Number of meetings held in the year: | 11 | 4 |
Office: Office within the Board of Directors.
(**) This column indicates the position of the Director on the Committee: "C": Chairperson; "M": member.
The Board of Directors has not provided for the establishment of an Appointments Committee for Directors, nor has it conducted the self-assessment activity. The Board consider that its selfassessment, or where the same task is assigned to an outsourcer, is a non-substantial act, given that, because of the transparency which the Board of Directors of BasicNet has always provided, each Director may present at any time suggestions to improve the operation and functioning of the Board and its Committees.
With regard to the choice of appropriate professionals to sit on the Board of Directors, the Board believes that this assessment is the duty of the minority and majority shareholders - on the basis of the slates presented. In this regard, the Board does not find it to be necessary to express an opinion on the composition of the Board that is qualitatively or quantitatively optimal for its proper functioning.
For further information on the present section reference should be made to the Remuneration Policy and Report published pursuant to Article 123-ter of the CFA.
(*) This column indicates the percentage of attendance of the Director in relation to the Committee meetings (indicates the number of meetings attended compared to the amount they could have attended; e.g. 6/8; 8/8 etc.).
On March 3, 2022, the Board approved the Report, which is available on the company website, together with the Shareholders' Meeting documentation, at www.basicnet.com/contenuti/datifinanziari/assembleeazionisti.asp
BasicNet's remuneration policy is determined by taking into consideration aspects of the compensation and working conditions of the Company's employees. Both respond to the aim of attracting, retaining and motivating human resources with the necessary skills to oversee and develop the Company's activities and to lay the foundations for sustainable medium to long-term growth. In line with BasicNet's philosophy, employees' working conditions play a decisive role, alongside compensation, in fostering a sense of belonging to the Group and building corporate identity, which in turn is recognised as a critical success factor for the pursuit of the Company's long-term interests and sustainability. Consistently and as a demonstration of the centrality of the human factor in the company's strategy, BasicNet employees work in the BasicVillage, designed to put the person at the centre, who can enjoy a series of services and recreational spaces. BasicNet grants its employees certain access privileges (e.g., the gym) and provides basic services (e.g., delivery person for private errands, online shopping package pickup, free parking).
The Remuneration Policy adopted for the corporate boards requires the Shareholders' Meeting to approve the annual remuneration of all Board of Directors and Statutory Auditors members; the remuneration of the Senior Directors and the members of the Internal Board Committees is determined by the Board of Directors, pursuant to Article 2389 of the Civil Code, on the proposal of the Remuneration Committee and considering the advice (where necessary) of the Related Parties Committee, having heard the opinion of the Board of Statutory Auditors. The compensation of Senior Executives is proposed by the Chairperson and submitted to the Board of Directors for approval, after consultation with the Remuneration Committee. Finally, the Remuneration Committee and the Related Parties Committee shall intervene in cases where the allocation of remuneration does not comply with, but deviates from, the Remuneration Policy most recently approved by the Shareholders' Meeting.
The remuneration is represented by a fixed component only, determined to sufficiently remunerate the performance of the Executive Director/Senior Executive according to the responsibilities of his or her office, regardless of the additional component or bonus, if any; the Group's remuneration policy does not provide for any variable remuneration component, either in the long term or the short term, as described in the Remuneration Report. The Board of Directors, on the proposal of the Chairperson or of the Board of Directors, and having consulted the Remuneration Committee and the Related Parties Committee, may in exceptional cases establish additional one-off remuneration.
The Board of Directors has identified as Senior Executives the Chief Executive Officer, Federico Trono, the Directors Lorenzo Boglione and Alessandro Boglione - who are Chief Executive Officers of strategic companies for the Group - and Paola Bruschi, CFO of BasicNet S.p.A.
The Board also establishes the remuneration of the Supervisory Board, of the Internal Auditor Manager and of the Executive Officer for Financial Reporting.
No stock option plans have been established for Directors.
A third-party D&O - Directors' & Officers' Liability civil liability policy in addition covers the Directors, Statutory Auditors and Executives for circumstances relating to the exercise of their functions, excluding incidences of fraud. This concerns insurance cover (structurally not consisting of consideration) signed independently of the Company for the benefit of all Group Directors and Statutory Auditors in office.
The disclosures required by Article 123-bis, paragraph 1, letter 1) ("the agreements between the Company and Directors – which provide for indemnity in the case of dismissal without just cause or in the case in which the employment services cease after a public offer") are contained in the Remuneration Policy and Report published pursuant to Article 123-ter of the CFA, available on the Company's website www.basicnet.com/contenuti/datifinanziari/assembleeazionisti.asp.
Composition and Operation of the Remuneration Committee (pursuant to Article 123-bis, paragraph 2, letter d) CFA)
At the Board meeting of April 19, 2019, the Board appointed the Remuneration Committee comprising the Directors Carlo Pavesio (Chairperson) and Daniela Ovazza, Non-Executive Director and the Non Executive Independent Directors Elisa Corghi, Renate Hendlmeier and Adriano Marconetto.
The workings of the Committee are usually recorded by the Chairperson Carlo Pavesio, who reports to the Board of Directors at the first available meeting.
Within its remit, the Committee: makes proposals to the Board concerning the remuneration policy, also taking into account the vote expressed by the Shareholders' Meeting; periodically assesses - when preparing the annual remuneration report - the adequacy of the general policy adopted for the remuneration of Executive Directors and Senior Directors; submits proposals to the Board concerning the remuneration of Senior Directors and expresses its opinion on the remuneration issues of Senior Executives; examines the remuneration proposals and expresses its opinion in case of exceptions to the remuneration policy approved by the Shareholders' Meeting.
The Committee has access to the information and departments necessary for the carrying out of its remit.
In 2021, the Committee met on four occasions to review the draft of the Remuneration Report to be presented to the Shareholders' Meeting, the proposals for a one-off bonus for the Chairperson of the Board of Directors and the proposal to increase the remuneration of the Executive Directors. The Chairperson of the Board of Statutory Auditors attended all meetings of the Committee.
The Internal Control and Risk Management System consists of a set of rules, procedures and organisational structures aimed at the effective and efficient identification, measurement, management and monitoring of the main risks, in order to contribute to the sustainable success of the Company.
The Board of Directors establishes its guidelines in line with the Company's strategy, periodically verifying their adequacy and effective functioning, ensuring that the principal corporate risks are identified and adequately managed.
This activity is carried out with the support of a number of boards, corporate structures and functions which, each according to their own areas of competence, oversee the identification, monitoring and management of risks and which together make up the Internal Control and Risk Management System. The persons involved are the Chief Executive Officer, the Control and Risks and Related Parties Committee, the head of the Internal Audit Function, and the Supervisory Board.
The Ethics Code, the Sourcing Centers Ethics Code which includes social compliance principles and the Organisation, Management and Control Model as per Legislative Decree No. 231/2001 and subsequent amendments, are an integral part of the Internal Control and Risk Management System. As regards assessment of the Internal Control and Risk Management System, on March 3, 2022 the Board of Directors considered that there were no indicators to suggest that the Internal Control and Risk Management System is not substantially appropriate for overseeing the typical business risks associated with the main operating activities, without prejudice to the assessment of its strengthening in the light of the developing company situation, in order to keep the process of identifying, monitoring and managing risks effective, within a more structured Group.
The Chief Executive Officer is responsible for identifying the Company's primary risks - taking account of the characteristics of the activities conducted by the Company and by its subsidiaries - for the planning, realisation and management of the Internal Control and Risk Management System, constantly verifying its adequacy and efficiency, and adapting it to changes in operating conditions and legal and regulatory frameworks. The Chief Executive Officer has entrusted the head of the Internal Audit function with the task of carrying out checks on specific operational areas and on compliance with internal rules and procedures in the execution of corporate transactions; these checks have been included in the Audit Plan examined by the Control and Risks Committee and approved by the Board of Directors.
The task of verifying the operation and suitability of the Internal Control and Risk Management System is entrusted to the Internal Audit Manager. In particular, considering that some departments are centralised at the Parent Company, this department contributes to the verification of the correctness and functioning of the reporting process from the strategic subsidiary companies, as well as to the verification of the adequacy of the reporting system to ensure the quality of the reports of the various company departments. On appointment, the Board determined the remuneration for this office, considered in line with the structure of the Group.
The Internal Audit Manager, who does not report to any operating department, has access to all information considered necessary to carry out the role. S/he reports on his/her activities to the Board of Directors, the Control and Risks Committee and the Board of Statutory Auditors, to which the periodic reports are addressed, and at Committee meetings.
Control activities are carried out on the basis of the annual audit plan approved by the Board of Directors, which is risk-based in nature, and verification activities are also carried out through an online reporting tool available on the corporate portal. This report constitutes an important monitoring instrument in real-time of the accounting activities and business performance: the data is available for each Group company and analysed by individual account item.
Internal Audit assesses the adequacy of the IT systems and the reliability of information available in view of the complexity of the operating environment, the size and the territorial reach of the company and verifies the adequacy of the organisational processes adopted by the Company for the security of the IT system. S/he collaborates with the other actors involved in issues of compliance and risk management, in order to monitor the exposure level and vulnerability of the Company to risks. The Internal Audit function was entrusted to an external company (Progesa S.a.s.), assisted by support activities that focused on process design. The activities were outsourced as it was considered that the head of the company, who has already undertaken work within the Group, possesses the necessary attributes to undertake such work efficiently on an independent and professional basis.
The Internal Audit Manager prepared periodic reports on the activities carried out in accordance with the Plan and the outcome of them, providing a positive assessment to the control body, the Control and Risks Committee, the administrative body and the Chief Executive Officer on the suitability of the Internal Control and Risk Management System.
The Control and Risks Committee was appointed at the Board meeting of April 19, 2019. The Committee is composed of four Independent Directors: Renate Hendlmeier (Chairperson), Elisa Corghi, Cristiano Fiorio, appointed at the Board of Directors meeting of July 25, 2019, and Adriano Marconetto. The Board deems that the members have adequate expertise in the Company's business sector in order to assess related risks, and in accounting and finance and risk management.
The Committee assists the Board of Directors and has the task of supporting - through an adequate preliminary activity - the assessments and decisions made by the administrative body concerning the Internal Control and Risk Management System, in addition to the activities relating to the approval of periodic financial and non-financial reports.
In 2021, the Committee met eleven times with an average meeting duration of two hours. During the year, the meetings of the Control and Risks and Related Parties Committee were also attended by the Chairperson of the Board of Statutory Auditors, Maria Francesca Talamonti, the Statutory Auditors Sergio Duca and Alberto Pession, the Chief Financial Officer and Executive Officer for Financial Reporting, the President of BasicManagement.com, the Internal Audit Manager, the Chairperson and members of the Supervisory Board and the company appointed to audit the Group's accounts during the year, in addition to the consultants, in line with the mandates, topics and attendance records contained in the minutes of the Committee meetings. During its meetings, the Committee: examined the adoption of new internal regulations, specifically the Related Party Transactions Policy, amended as required by the new provisions on Related Party Transactions, effective as of July 1, 2021 (in implementation of the Shareholders' Rights Directive II, introduced by Consob with Resolution No. 21624 of December 10, 2020), for which it expressed a favourable opinion for submission for approval to the Board of Directors;
financial statements and the consolidated financial statements for 2021, expressing a favourable opinion on approval of the accounting documents to the Board of Directors;
The Board of Directors at the meeting of April 19, 2019 appointed the members of the Supervisory Board. The Supervisory Board is tasked with overseeing the correct functioning of the Model and updates. The Supervisory Board reports on at least a half-yearly basis to the Control and Risks Committee and to the Board of Statutory Auditors.
As part of the Internal Control and Risk Management System, the Parent Company BasicNet S.p.A. and BasicItalia S.p.A. have adopted an "Organisation and management model as per Legislative Decree No. 231/2001" (hereinafter also the "231 Model"), which is continually updated in line with the introduction of new offences under the framework regulation.
The provisions of the Model complete the Group Ethics Code and the Sourcing Centers Ethics Code, which set out the rules and ethical responsibilities for the conducting of business and relations between the Company and the various interest holders.
To promote awareness of and respect for the Ethics Code and the organisation and control model these have been published on the Company's website www.basicnet.com/contenuti/corporate/codiceetico.asp and in the area dedicated to Group employee time-keeping.
In preparing the Model, account was taken of the existing and operating control systems and policies at the Company and considered an integral part of the Model: the Internal Dealing Code and the Related Party Transactions Policy. The model, continually evolving, integrates and strengthens the corporate control system through the preparation and continual updating of the related procedures. It also provides for a disciplinary system which appropriately sanctions non-compliance with the measures and principles contained in the above-stated documents.
The Organisational Model was most recently updated in 2020 to introduce new crime provisions, specifically: tax crimes, crimes against the Public Administration (expanding the range of crimes against the Public Administration provided for by Article 24 of Legislative Decree No. 231) and smuggling offences. The structure of the Model has also been modified to include a special section designed to make the Model more user-friendly. This is achieved by indicating the behavioural principles to be adopted in order to avoid committing the offences identified as those to which the Company is most susceptible.
The SB met four times in 2021 and supplemented its activities with oversight of compliance with health regulations for worker safety in the context of the COVID-19 pandemic.
The Ethics Code is presented on a video to all new employees of the Group and to all consultants.
In 2021, 39 hours of training were provided with regards to the receipt and application of the Ethics Code, both through classroom and e-Learning platform training, for 104 participants, of which 102 white-collar and 2 blue-collar employees.
The BasicNet Group Ethics Code was updated and approved, in its latest version, by the Board of Directors at the meeting of October 2017. The Code is designed to control the conduct of the addressees, identified as the members of the Boards of Directors and Boards of Statutory Auditors, in addition to all BasicNet Group personnel, collaborators and consultants, suppliers and all others acting in the performance of name of and/or on behalf of the BasicNet Group.
As reported in this document, the BasicNet Group, in pursuing its objectives, considers a number of conduct principles as critical, including:
The Group does not justify in any way the adoption of conduct conflicting with law and these principles.
In this regard, the Supervisory Board oversees compliance with the Ethics Code, promptly reporting to the Control and Risks Committee and the Board of Directors any violations thereof. All stakeholders may report in writing and anonymously any violation or suspected violation of the Ethics Code to the Supervisory Board. Substantiated violations of the principles of the Ethics Code will result in sanctions.
To promote awareness of and respect for the Ethics Code and the Organisation and Management model pursuant to Legislative Decree No. 231/2001, these have been published on the Company's website www.basicnet.com/contenuti/corporate/codiceetico.asp and in the area dedicated to Group employee time-keeping.
The Sourcing Centers Ethics Code is a document that establishes the minimum requirements for the working conditions that must be met by all Sourcing Centers selected by the BasicNet Group or by affiliated companies. The Group undertakes to ensure that each stage of the production chain fully complies with the principles and conditions of the Ethics Code. Sourcing Centers are therefore at all times held accountable for suppliers' full compliance with the principles of the Ethics Code.
Through the Code, BasicNet encourages its business partners to adopt the highest international standards of ethics and best practices in business. Respect for human rights and international labour standards – including the fundamental conventions of the International Labour Organization and the Universal Declaration of Human Rights – were taken as an inspiration and foundation, and many of the guidelines included in the Ethics Code were based on them. BasicNet reserves the right to stop doing business with Sourcing Centers that are incapable of complying – or reluctant to do so – with the principles and conditions enshrined in the Ethics Code.
The principles cited in the Sourcing Centers Ethics Code include:
Other principles enunciated in the Sourcing Centers Ethics Code must comply include nondiscrimination, the protection of health and safety, environmental protection and freedom of association. BasicNet is committed to full and complete compliance with laws and regulations applicable to its business activity and expects that Sourcing Centers will cooperate fully and with due diligence in fulfilling this pledge.
To guarantee awareness of the Ethics Code, Sourcing Centers are required to take appropriate measures to ensure that workers familiarise themselves with the contents of the Code of Conduct and to post the Code of Conduct, translated into the workers' local language, at each production facility in a highly visible location readily accessible to all workers. Sourcing Centers are also required to select their suppliers carefully and only to do business with suppliers that ensure respect for human rights and full compliance with the principles enshrined in the Ethics Code. To ensure compliance, BasicNet is authorised to audit Sourcing Centers by conducting scheduled or unscheduled inspections of Sourcing Centers' facilities aimed at monitoring compliance with the Ethics Code. During such inspections, BasicNet and its representatives may examine books and registers relating to employees and conduct private interviews of the Sourcing Center's employees. If a violation is found to have been committed, BasicNet and the Sourcing Center are required to agree on a Corrective Action Plan aimed at remedying the violation promptly. If a Sourcing Center commits repeated and/or deliberate violations of the Ethics Code, BasicNet may take the necessary corrective measures, up to and including the cancellation of orders and/or termination of business arrangements with the Sourcing Center concerned.
The Group has implemented a Legislative Decree No. 231/2001 Organisation Model and specific internal procedures to establish ethical rules and responsibilities in the conduct of its business and in dealings with its various stakeholders (there are, for example, specific procedures for proper management of dealings with the public administration). In particular, operations are governed by procedures organised in a way that ensures that there is effective oversight by the individual company units (".com") concerned. In particular, the Group always ensures clear, transparent and ethical relations with the public administration, in Italy and internationally. As stated in the Ethics Code, addressees of the Code should refrain from improperly influencing the decisions of the Public Administration by offering money or other benefits, such as employment or commercial opportunities in favour of public officials or those providing a public service, in addition to their family members. The Group companies may not provide direct or indirect contributions of any type, nor set up funds in support of public officials, except where permitted and in accordance with applicable law and regulations and on the condition that (i) they are properly approved by the competent company functions, (ii) they are properly documented from an accounting and operating viewpoint, (iii) they do not put anyone in a position of conflict of interest. Untruthful statements may not be made to national or EU public bodies for the awarding of public funds, public grants or subsidised financing, or to obtain concessions, permits, licenses or other administrative acts. The direction of funds received from national or EU authorities as disbursements, contributions or financing for objectives other than those intended is forbidden. The altering of computer or IT systems or the manipulation of data contained therein in order to obtain unjust profit and causing damage to the Public Administration is prohibited. In commercial relations with the Public Administration, including participation in public tenders, conduct should always be in compliance with law and proper commercial practice, while conduct which is undertaken to induce the committal of an offence in seeking advantage for the Group is expressly prohibited.
The financial reports, financial statements and corporate communications required by law and regulations should be prepared with clarity and present a true and fair view of the Group company financial statements. No payments (in any form) may be made in the interest of the Group in the absence of corresponding adequate documentation. Related party transactions, including inter-Company transactions, should comply with the criteria of substantial and procedural correctness. Those undertaking transactions in conflict of interest are required to report such to their superior or in accordance with that set out in the adopted procedures. The internal control system concerns the control activities undertaken to protect company assets, effectively manage operations and clearly provide information on the Group financial statements, in addition to those activities undertaken to identify and contain company risks.
In addition, the Company operates in compliance with applicable anti-money laundering regulations and the provisions issued by the Competent Authorities and for such purposes commits to refraining from undertaking suspect transactions from a correctness and transparency viewpoint.
As part of its efforts to prevent acts of bribery or corruption committed by or targeting Group personnel, the Group complies scrupulously with Italian and international legislation and has adopted a Legislative Decree No. 231/2001 Organisation Model that establishes the general principles of the fight against bribery and corruption. All company activities and units are subject to the controls and verification relating to bribery and corruption mandated by the 231 Model.
Following the enactment of the new offence of "corruption between individuals" punished under paragraph three of Article 2635 of the Civil Code, the Supervisory Board decided to modify the Legislative Decree No. 231/2001 Organisation Model so that management of the sales process was considered to be one of the Group's "sensitive" activities, especially as regards:
managing returns.
Training in matters relating to Legislative Decree No. 231/2001 – which also extended to anticorruption policies and procedures – was carried out through 102.5 hours of training in 2021, involving 175 participants, of which 2 Executive and 169 white-collar workers and 4 blue-collar workers, all based in Italy.
| Participants | in | training | ||
|---|---|---|---|---|
| and on anti-corruption policies | 2021 | 2020 | ||
| Executives (No.) | 2 | 1 | ||
| % of total Executives* | 6.66% | 3% | ||
| White-collar | 169 | 119 | ||
| (No.) | ||||
| % of total White-collar* | 28.11% | 22% | ||
| Blue-collar (No.) | 4 | 2 | ||
| % of total Blue-collar* | 20% | 10% | ||
| Total (No.) | 175 | 122 | ||
| % total Group* | 26.88% | 20% |
*Percentages are calculated on the average workforce in Italy in 2021
A clause regarding anti-corruption practices is present in the licensing contracts of all Sourcing Centers and Licensees (respectively Sourcing Agreements and Distribution Agreements).
The audit is carried out by an independent audit firm registered in the relevant registrar. The Shareholders' Meeting of April 27, 2017 appointed EY S.p.A. to audit the accounts for the 2017-2025 period.
The proposal to the Shareholders' Meeting regarding the new appointments, in accordance with Legislative Decree No. 135 of July 17, 2016 and Regulation (EC) No. 537/2014, included, on the outcome of a selection process created and carried out by the Company, the recommendation and the preference expressed by the Board of Statutory Auditors.
The Board meeting of April 19, 2019 appointed Director Paola Bruschi, Group Finance Director, as the Executive Officer for Financial Reporting for three years, with the favourable opinion of the Board of Statutory Auditors. Paola Bruschi possesses many years of experience in the administrative, financial and control areas, as well as the qualifications required by law for the holding of the office of Director.
In undertaking her duties, Paola Bruschi has the power to approve the corporate procedures impacting upon the financial statements, on the consolidated financial statements and on other documents which may be audited, and may participate in the design of the IT systems which impact upon the financial position of the company; she may develop an adequate organisational structure to undertake her activities, utilising internal resources available and, where necessary, outsourcing; she may also, where necessary, utilise the financial resources of the company, providing adequate information to the Board of Directors, and she may utilise the Internal Audit department for the mapping and analysis of processes and to carry out specific checks.
The Executive Officer for Financial Reporting periodically reports to the Control and Risks Committee and the Board of Statutory Auditors on the activities carried out and communicates on an ongoing basis with the Independent Audit firm.
The Board believes that this Executive Officer for Financial Reporting is impartial in relations with the other functions involved in the control process.
The information generated within the internal control system called BasicManagement and risk management shared on the web in a dedicated operating control section. The meetings of the Control and Risks Committee, usually attended by the CFO, the Internal Audit Manager, a member of the Supervisory Board, the Board of Statutory Auditors, and by the independent audit firm, as per the attendance described in the minutes, also provide an opportunity for the parties involved in the system to meet and coordinate.
Control and Risk Management System in relation to the financial reporting process (pursuant to Article 123-bis, paragraph 2, letter b), of the CFA)
1) Introduction
The Internal Control and Risk Management System in relation to the financial reporting process (hereafter the System) is the set of overall rules and corporate procedures adopted by the various company departments to permit, through an adequate identification process of the principal risks related to the preparation and dissemination of financial information, the reaching of the corporate objectives of true and fair disclosure.
The System seeks to provide reasonable certainty that the financial reporting – including consolidated reporting - communicated to the public is reliable, fair, true and timely, providing the users with a true and fair representation of the operational facts, permitting the issue of the declarations required by law that they correspond to the documented results, accounting records and underlying accounting entries of the facts and of the communications of the Company to the market and also relative interim financial reporting, as well as the adequacy and effective application of the administrative and accounting procedures during the period to which the accounting documents refer (Annual Accounts and Half-Year Report) and in accordance with applicable international accounting standards.
In defining the System, a risk assessment was undertaken in order to identify and evaluate the risk areas which could arise such as to compromise the achievement of the control objectives and the efficacy of disclosure provided by the corporate boards and to the market. The risk assessment also took into account the risk of fraud. The identification and evaluation process was undertaken with reference to the entire Company and at process level. Once the risks were identified an evaluation was undertaken, considering both qualitative and quantitative aspects and the identification of specific controls in order to reduce the risk related to the non-achievement of the objectives of the System to an acceptable level, both at Company and process level.
2) Description of the principal characteristics of the Internal Control and Risk Management System in place in relation to financial disclosure.
The System provides for:
The Executive Officer for Financial Reporting periodically reports to the Board of Statutory Auditors and the Control and Risks Committee on the adequacy, also in organisational terms, and on the reliability of the administrative-accounting system, on the activities carried out and on the efficacy of the internal control system with regards to financial reporting risks.
The Board of Directors, in accordance with Consob Regulation No. 17221 of March 12, 2010 adopted, with the favourable opinion of the Independent Directors, the Related Party Transactions Policy. The procedure was subsequently updated in October 2016 in order to be more flexible, over time, to differing organisational features and the size of the Company and most recently in June 2021 to update the provisions introduced by Consob Regulation.
BasicNet is identified, for the purposes of the Consob Regulation incorporating related party transaction provisions, as a "smaller company" (companies presenting both assets written to the balance sheet and revenues as per the last approved consolidated financial statements not in excess of Euro 500 million) and, therefore, utilises a simplified system for the approval of significant transactions whereby the rules for the approval of less significant transactions are applied.
The approval of the transactions with related parties is the responsibility of, both in relation to significant transactions, as BasicNet falls within the application of Article 3, paragraph 1, letter f) of the Related Party Regulations, and in relation to minor transactions, to the Board of Directors, or the executive boards, provided they are not a related party in the transaction, within the limits of their delegated powers, with prior non-binding opinion of the Related Parties Committee.
In general, exempted from the procedure, in addition to all the matters expressly indicated by the Related Party Regulation issued by Consob, are minor transactions (amounts not above Euro 150 thousand for natural persons and Euro 200 thousand for legal persons), provided they are undertaken at market or standard conditions within the ordinary transactions of the business and of the related financial activities; the operations concluded with or between subsidiaries, including joint ventures, by BasicNet, provided in the subsidiary companies there are no counterparties in the operation that have interests, qualified as significant, of other related parties of the Company; the transactions with associates provided that the associated company counterparties in the transaction do not have interests, qualified as significant, of other related parties of the Company.
Significant interest is not considered to exist by the mere sharing of one or more Directors or one or more Senior Executives between BasicNet and its subsidiaries.
A procedure was implemented which transmits an alert mail through the "procurement" order system when an order is uploaded to the web for a related party, identified on the basis of declarations received from related parties or parties closely linked to them (members of the Board of Directors and Board of Statutory Auditors) and by the database management system.
The procedure is available on the Company's website: www.basicnet.com/contenuti/corporate/particorrelate.asp
The regulation applicable for the appointment of the members of the Board of Statutory Auditors is in accordance with legislative and regulatory provisions and Article 17 of the Company By-Laws, in relation to which reference should be made to the company's website www.basicnet.com at www.basicnet.com/contenuti/gruppo/statuto.asp.
The Board of Statutory Auditors consists of three Statutory Auditors and two Alternate Auditors.
As the minority shareholders, as identified by the legal and regulatory provisions, are reserved the election of a Statutory Auditor - who assumes the role of Chairperson - and an Alternate Auditor, the procedure at Article 17 of the By-Laws provides that the appointment of the Board of Statutory Auditors takes place on the basis of slates presented by shareholders, in which the candidates are listed by progressive numbering.
The slate is composed of two sections: one for the candidates for the office of Statutory Auditor and the other for candidates for the office of Alternate Auditor. The slates must be drawn up so as to ensure that the resultant Board of Statutory Auditors complies with the applicable gender balance regulations in force.
Only shareholders which individually or together with other Shareholders hold shares with voting rights representing the share capital percentage required by the Company, which will be indicated in the call notice of the Shareholders' Meeting for the approval of the Board of Statutory Auditors, may present slate.
Together with the filing of slates the Shareholders must present or deliver to the registered office of the company documentation declaring the ownership of the number of shares with voting rights necessary for the presentation of the slate.
Each shareholder, in addition to shareholders belonging to the same group, in accordance with Article 2359 of the Civil Code and the parties belonging to, also through subsidiaries, a shareholder agreement in accordance with Article 122 of Legislative Decree No. 58 of February 24, 1998, may not present, nor vote upon, nor through nominees of trust companies, more than one slate. Should this rule be violated, the shareholder's vote for any of the slates submitted shall be disregarded.
Each candidate may be presented on only one slate at the risk of being declared ineligible.
Candidates may not be included on the slates if they already hold a greater number of Statutory Auditor positions than permitted by the regulatory or legal provisions. The outgoing Statutory Auditors may be re-elected.
In accordance with Article 1, paragraph 3, of the Ministry for Justice Decree No. 162 of March 30, 2000, the sectors closely related to those in which the Company operates are:
The areas closely related to the Company's sector are:
industrial, commercial and tax law, in addition to economics and business, accountancy and corporate finance.
The slates, accompanied by exhaustive disclosure on the personal and professional characteristics of the candidates, with indication of the presenting shareholders and the overall share capital percentage held, in addition to the declaration of shareholders other than those who hold, also jointly, a controlling or relative majority holding, declaring the absence of connecting relationships as per the applicable regulations, with these latter, must be filed at the registered office of the Company by the deadline established by applicable legislative and regulatory provisions.
Together with each slate, within the regulatory and legally established timeframe, a declaration in which the individual candidates accept their candidature, must be filed at the Company's registered office, stating under their own responsibility, the inexistence of reasons for ineligibility and incompatibility, as well as the existence of the requisites for the respective assignments, in addition to those required for directorships held in other companies.
Slates presented that do not comply with all of the above formalities are considered as not presented.
The procedure for electing Statutory Auditors are as follows:
a. from the slate which obtained the highest number of votes at the Shareholders' Meeting, based on the progressive order on the slate, two Statutory Auditors and one Alternate Auditor are elected;
b. from the slate which obtained the second highest number of votes at the Shareholders' Meeting, the remaining standing members and the other alternate member are elected, based on the progressive order on the slate.
The Chairperson of the Board of Statutory Auditors is the first candidate indicated on the slate that obtained the second highest number of votes.
In the case of parity of votes between slates, the candidates from the slate having a higher equity investment are elected or, subordinately, with the greater number of shareholders.
In the case of presentation of only one slate, all candidates will be taken from that slate, with the Chairperson the first listed on the slate.
Where it is not possible to proceed with the appointment according to the above system, the Shareholders' Meeting deliberates by statutory majority.
Where his/her legal requisites no longer exist, the Statutory Auditor must leave office.
In the case of the replacement of a Statutory Auditor, including the Chairperson, where possible the Alternate Auditor belonging to the same slate as the discontinuing Auditor joins the board and in the case of the replacement a Statutory Auditor elected from the Minority Slate, the first candidate on the Minority Slate receiving the second highest number of votes joins the Board in their place. In the cases in which a replacement results in non-compliance with the legally established gender balance criteria, the Board of Statutory Auditors shall be supplemented.
For the supplementation of the Board of Statutory Auditors:
Where it is not possible to proceed in accordance with the previous paragraph, the Shareholders' Meeting to supplement the Board of Statutory Auditors votes according to a relative majority of the share capital represented at the Shareholders' Meeting, while ensuring that the right to representation of the minority has been complied with, in addition to the regulatory required gender balance provisions.
The Board of Statutory Auditors, whose mandate shall conclude with the approval of the 2021 Annual Accounts, therefore comprises:
| Office | Members | Year of birth |
Date first appointment (*) |
In office from |
In office until |
Slate (M/m) (**) |
Ind. Code |
Attendance at board meetings (***) |
No. other offices (****) |
|---|---|---|---|---|---|---|---|---|---|
| Chairperson | Maria Francesca Talamonti |
1978 | 28/04/2016 | 19/4/2019 | Approval 2021 Accs. |
m | X | 10/10 | 3 |
| Statutory Auditor | Sergio Duca | 1947 | 27/4/2017 | 19/4/2019 | Approval 2021 Accs. |
M | X | 7/10 | 3 |
| Statutory Auditor | Alberto Pession | 1965 | 27/4/2017 | 19/4/2019 | Approval 2021 Accs. |
M | X | 10/10 | 1 |
| Alternate Auditor | Giulia De Martino | 1978 | 28/04/2016 | 19/4/2019 | Approval 2021 Accs. |
m | X | N/A | |
| Alternate Auditor | Maurizio Ferrero | 1964 | 27/4/2017 | 19/4/2019 | Approval 2021 Accs. |
M | X | N/A |
(*) The first appointment of each Statutory Auditor refers to the date on which the Statutory Auditor was appointed for the first time to the Board of Statutory Auditors of BasicNet S.p.A.
(**) This column indicates whether the slate from which each Statutory Auditor is selected is a "majority" slate ("M"), or a "minority" slate ("m").
*** This column indicates the attendance by Statutory Auditors at meetings of the Board of Statutory Auditors
(****) This column indicates the number of offices of Director or Statutory Auditor in accordance with Article 148-bis of the CFA and the relative enacting provisions in the Consob Issuers' Regulation. The complete list of offices held is published by Consob on its website pursuant to Article 144- quinquiesdecies of the Consob Issuers' Regulation.
Reference should be made to paragraph 4.3 concerning the Board of Directors.
The Board of Statutory Auditors met immediately after the Shareholders' Meeting appointment of April 19, 2019 and, according to the Consob Issuers' Regulation and the Self-Governance Code, verified for all of its members compliance with the independence requirements established by Law (Article 148, paragraph 3 of the CFA) and by the Self-Governance Code (Articles 3.C.1 and 8.C.1) for the Statutory Auditors of companies with listed shares, confirming the inexistence of reasons for the ineligibility, incompatibility and/or lapse as per the applicable regulation, the company By-Laws and the Self-Governance Code.
For the purposes of the audit, the Board of Statutory Auditors decided to refer to: (i) the list of existing administration and control positions, previously communicated to the Company pursuant to Article 2400 of the Civil Code, together with exhaustive information on their personal and professional characteristics, and (ii) declarations of acceptance of the candidature and possession of the requirements provided by the By-Laws and the statutory law issued pursuant to Article 144-sexies, paragraph 4, of the Issuers' Regulation.
The Board of Statutory Auditors immediately informed the Company of the outcome of these checks, which was communicated to the market through a press release issued upon conclusion of the Shareholders' Meeting in which the Board was appointed.
The Board of Statutory Auditors also carried out an assessment to verify the suitability of its members and the adequate composition of the Control Board, with reference to the requirements of professional standing, competence, good-standing and independence as per the regulation, set out in the "Conduct Rules for Boards of Statutory Auditors of Listed Companies" issued by the National Council of Certified Public Accountants.
On conclusion of the self-assessment process, the Board of Statutory Auditors found its composition to be adequate, underlined the correctness and efficacy of its functioning, and informed the Board of Directors of the Company of the positive outcome of the self-assessment.
The documentation filed for the purposes of the appointment, including the updated curriculum vitaes of the Statutory Auditors, is available on the website www.basicnet.com/contenuti/gruppo/organisocialisocieta.asp.
The Statutory Auditors, within their duties, acquired information also through meetings with the independent audit firm, with the Supervisory Board and through attending the Control and Risks Committee meetings.
The Statutory Auditors may participate in meetings subsequent to their appointment and during their mandate with the Chairperson and Management, in order to remain updated on corporate affairs and developments. They also continually have access to financial and operational information from the BasicManagement portal.
The Company considers that the remuneration of the Statutory Auditors is appropriate with regard to the competence, professionalism and commitment required by the role held in relation to the size of the Company.
Any Statutory Auditor who, on his/her own behalf or that of third parties, has an interest in a certain transaction of the issuer shall inform the other Statutory Auditors and the Chairperson of the Board, in a timely and comprehensive manner, regarding the nature, terms, origin and extent of his/her interest. This event however has never occurred.
As already indicated in the preceding paragraphs, the Board of Statutory Auditors, in undertaking its activities, liaise with the Internal Auditing department and the Control and Risks Committee.
The Shareholders' Meeting on appointment established the remuneration of the Statutory Auditors, as a fixed amount, in line with that of the previous mandate and with the role covered and the commitment required, in addition to the size of the Company.
Dialogue with investors has been encouraged since listing, through continuous updates to the Company's website www.basicnet.com on which financial information of interest to shareholders in general (Annual Reports and periodic reports, the Non-Financial Report, press releases and notices, presentations) can be found, as can updated data and documents concerning Corporate Governance and regulated information (composition of the Corporate Boards, the By-Laws, the Shareholders' Meeting regulation, the Ethics Code and the Corporate Governance and Ownership Structure Report). The press releases relating to the Brands and Companies of the Group are also available.
The Chairperson and Chief Executive Officer actively engage in dialogue with shareholders and the financial analysts following the Company.
Shareholders may communicate with the Company through the address [email protected].
The Group is cognisant of the importance that correct operational information has for the market, investors and the community in general. For this reason, in view of the transparency required for conducting business, the Group considers transparency as an objective in relations with all stakeholders. In this regard, the Group communicates with the market and investors in compliance with the criteria of correctness, clarity and equal access to information in accordance with the procedures for the management of material and inside information as approved by the Board of Directors of BasicNet.
Dialogue between the Company, by way of the Chairperson and Chief Executive Officer, with the financial community mainly involves:
2021 saw the continuation of communication with analysts and investors which began in 2018 with the establishment of a conference call in which the Chief Executive Officer presents the Company's periodic results to analysts and asset managers, supported by dedicated presentations. The Board of Directors also resolved to report the main income statement and balance sheet indicators on a quarterly basis in order to provide the market with timely information and greater transparency regarding the Company's performance. Meetings with individual investors also continued and were extended to include a number of Italian and overseas operators.
The Shareholders' Meetings provide opportunities to meet and communicate with the shareholders. During the Shareholders' Meetings, the Chairperson and the Chief Executive Officer provide the shareholders with all the necessary information for the undertaking of motions.
The Ordinary Shareholders' Meetings undertake their duties in accordance with Article 2364 of the Civil Code and the Extraordinary Shareholders' Meetings in accordance with Article 2365 of the Civil Code.
In accordance with Article 2365, paragraph 2 of the Civil Code, the Board of Directors was conferred the following duties:
In accordance with Article 2410, first paragraph of the Civil Code, any issue of bonds is decided by the Directors.
The Board of Directors, and any executive boards, also have the right to undertake, without a Shareholders' Meeting authorisation, all acts and operations against the objectives of a public tender or exchange offer, from the moment in which the communication in which the decision or the obligation arises to promote the offer was made public until the termination or expiry of the offer.
The Board of Directors, and any executive boards, also has the right to implement decisions, not yet implemented in full or in part and which are not within the scope of the normal activities of the Company, undertaken before the communication as described above and whose implementation could negate the achievement of the objectives of the offer. The Shareholders' Meeting (June 30, 2000, and for supplementation and/or modifications subsequently on April 30, 2011) approved the Shareholders' Meetings Regulations in order to permit the orderly functioning of the meetings and to guarantee the right of each shareholder to take the floor on matters under discussion. The Shareholders' Meeting regulations are available on the Company website www.basicnet.com/contenuti/gruppo/regolamento.asp.
As per Article 2 of the Shareholder' Meeting Regulation, those holding shares in accordance with applicable legislation and the By-Laws, or their proxies or representatives, may attend and speak at the Shareholders' Meetings. Proof of personal identity is required for attendance at the Shareholders' Meeting. Unless otherwise indicated in the Call Notice, the personal identification and the verification of the right to attend takes place at the location of the Shareholders' Meeting at least one hour before the time fixed for the meeting.
Attendees are assured the possibility to follow and take part in the discussion and to exercise their right to vote using the technical methods established on each occasion by the Chairperson: usually time is allowed for contributions be shareholders after the presentation of each matter on the Agenda.
All Directors generally attend the Shareholders' Meetings. The Board of Directors is available to shareholders to provide any further necessary information for the undertaking of fully informed decisions.
During the year, there were no significant changes in the shareholders structure of the Issuer.
In 2021, two Shareholders' Meetings were held. In order to minimise the risks connected with the health emergency, the Company decided to utilise the option - provided by Article 106 of Decree-Law No. 18/2020 concerning "Measures to strengthen the National Healthcare Service and economic support for families, workers and businesses related to the COVID-19 epidemiological emergency" (converted, with amendments, by Law No. 27 of April 24, 2020), and as extended by Article 3, paragraph 6 of Legislative Decree No. 183 of December 31, 2020, converted by Law No. 21 of February 26, 2021 (hereinafter the "Decree") - to stipulate in the call notice that shareholder participation at the Shareholders' Meeting shall be exclusively through the Designated Agent, pursuant to Article 135-undecies of the CFA, without therefore physical participation by shareholders.
There are no corporate governance practices further to those indicated in the previous points applied by the Issuer, other than those required by legislation and regulation.
There have been no changes since the close of the fiscal year.
In December 2021, the letter of the Chairperson of the Corporate Governance Committee was forwarded, as required by that document, to the Chairperson, to the Chief Executive Officer and to the Chairperson of the BasicNet Board of Statutory Auditors.
Subsequently, this documentation was communicated for the attention of the Board of Directors and Board of Statutory Auditors at the Board meeting of March 3, 2022. The outgoing Board of Directors has validated its choices, which it believes have been adequately justified in this Report, and believes that any different assessment in the area of governance is reserved for the incoming Board of Directors, in the context of the broader assessments regarding the appropriate organisational structure to pursue the objectives and implementing the strategies that will be the basis for the next three years of activity.
On behalf of the Board of Directors The Chairperson
Marco Daniele Boglione
| METHODOLOGY………………………………………………………………….…………………….66 | |||
|---|---|---|---|
| 1. | Our commitment to the fight against COVID-19……………………………………………………68 | ||
| 2. | Sustainability for BasicNet68 | ||
| 2.1 | Stakeholders and materiality analysis…………….………………………………………68 | ||
| 2.2 | Promoting the economic development of BasicNet's partners……………….……………70 | ||
| 2.3 | BasicNet's approach to taxation74 | ||
| 3. | Responsibility in the value chain………………………………………………………….…….…75 | ||
| 3.1 | The supply chain……………………………………………………………….…………75 | ||
| 3.2 | Data protection77 | ||
| 3.3 | Consumer Protection78 | ||
| 4. | Social Responsibility………………………………………………………….……………………79 | ||
| 4.1 | BasicNet Group human resources…………………………………………………………79 | ||
| 4.2 | Diversity and equal opportunities…………………………………………………………81 | ||
| 4.3 | Training and development of human capital…………………………………………….…82 | ||
| 4.4 | Occupational health and safety………………………………………………………….85 | ||
| 5. | Environmental Responsibility……………………………………………….…………….………89 | ||
| 5.1 | Energy resource management………………………………………………………………90 | ||
| 5.2 | Waste Management…………….…………………………………………………………92 |
||
| 6. | EU Taxonomy……………………………………………………………………………………93 | ||
| GRI Content | Index……………………………………………………………………………….……….94 |
This document represents the Consolidated Non-Financial Report pursuant to Legislative Decree No. 254/2016 (hereinafter also referred to as the "Non-Financial Report" or the "Report") prepared by the BasicNet Group, comprising BasicNet S.p.A. and its subsidiaries (hereinafter also referred to as the "BasicNet Group", the "Group" or "BasicNet").
As a large Public Interest Entity, the BasicNet Group has prepared a Non-Financial Report to fulfil the obligations under Article 3 of Legislative Decree No. 254/2016, which transposed Directive 2014/95/EU into Italian law. Accordingly, this Report includes an account of the main policies applied by the entity, the management models and main activities carried out by the Group in 2021 with regard to the matters expressly cited in Legislative Decree No. 254/2016 (environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters). In particular, the matter of human rights is applied by the Group to its management of relations with the Group's personnel, Licensees, Sourcing Centers and suppliers, in accordance with the principles and values cited in the Ethics Code and Ethics Code of Conduct for Sourcing Centers. For further details on this matter, reference should be made to the sections "The promotion of the economic development of BasicNet's partners", "The supply chain" and "Diversity and equal opportunities" of this Report and to the section "Legislative Decree No. 231/2001 Organization Model" of the Corporate Governance and Ownership Structure Report. The main measures adopted by the Group to prevent bribery and corruption are described in the section "Conflicts of interest and prevention of bribery and corruption" of the Directors' Report. The main risks relating to sustainability issues that have been identified – having to do with management of the network of licensees and associated with the production of the Group's products – are described in further detail in the Directors' Report in the "Main risks and uncertainties" section. The main warranty and innovation actions are outlined in the "Research and Development" section of the Directors' Report.
The purpose of the Report is to give an account of the Group's values, major initiatives and sustainability performance in 2021 that is consistent with its organizational structure (reporting period from January 1 to December 31, 2021). The 2020 Non-Financial Report was approved on March 2, 2021 and subsequently published.
As permitted by the options provided for in Article 5 of Legislative Decree No. 254/2016, the Non-Financial Report has been integrated into the Directors' Report. While ensuring an understanding of the Group's activity, performance, results and impact, some of the content of the Report that is expressly required by Legislative Decree No. 254/2016 is included in other sections of the Directors' Report ("Main risks and uncertainties", "The Group and its activity" and "Research and development", "Board of Directors" and "Organisation model pursuant to Legislative Decree No. 231/2001").We also note that, following internal assessments, the risks connected with climate change are to be considered as insignificant due to the particular nature of the Group's business model.
The Non-Financial Report has been prepared in accordance with the GRI Sustainability Reporting Standards published by the Global Reporting Initiative (GRI), according to the "core" option. An appendix to the Report includes a table of the GRI indicators covered as orientation for the reader.
In drafting the Non-Financial Report, reference was also made to the European Commission's Guidelines on non-financial reporting (published in the Official Journal of the European Union on July 5, 2017).
The contents and indicators subject to reporting were selected on the basis of the materiality analysis conducted in 2021 and presented in the Report, which permitted the identification of the aspects material to the Group and that could substantially influence stakeholders' assessments and decisions, in light of the topics cited in Legislative Decree No. 254/2016. The materiality analysis was in line with that reported in 2020.
In particular, the process of determining the content of the Report is based on the principles of materiality, stakeholder inclusion, completeness of information and the Group's operating context. With regard to the quality of the information reported, the principles of balance, accuracy, verifiability and comparability were observed.
It should be noted that there have been no changes in the scope of consolidation during the period under review.
The financial reporting scope is the same as for the BasicNet Group's 2021 Consolidated Financial Statements. The scope of the financial, social and environmental information included extends to the companies included in the BasicNet Group at December 31, 2021 and consolidated line-by-line in the Group's Consolidated Financial Statements.
It should be noted that the reorganisation of a number of Group companies has led to the creation of K-Way S.p.A. and K-WayRetail S.r.l., which, following a transfer from BasicNet and a spin-off from BasicItalia, manage all activities concerning the K-Way brand. It should also be noted that the scope of environmental reporting, especially as regards energy consumption and greenhouse gas emissions, includes the company BasicAir S.r.l., which owns a used Cessna Citation aircraft.
These and any other minor limitations have been disclosed as appropriate in accordance with the reporting standard adopted.
Unless otherwise indicated, the figures and information presented in the Report refer to financial year 2021. This information has been provided with a comparison to the previous year to permit an assessment of the performance of the activities where possible. In the interest of full understanding, an account has also been given of measures taken in previous years that still apply to the Group's activities.
In the interest of a proper account of performance, and in order to ensure that the figures are reliable, the use of estimates has been kept to a minimum and any estimates presented have been based on the best available methods, as appropriately disclosed.
The Non-Financial Report will be published annually.
The Non-Financial Report is also available on BasicNet's website, www.basicnet.comFor further information, please contact the e-mail address: [email protected].
This Report was approved by the Board of Directors of BasicNet S.p.A. on March 3, 2022, along with the Annual Financial Report.
The independent auditors EY S.p.A. performed a limited review ("limited assurance engagement") according to the criteria indicated in standard ISAE 3000 Revised) on the compliance of this Report in a specific report that certifies the compliance of the information provided with Article 3, par. 10, of Legislative Decree No. 254/2016.
As noted, since January 2020, the domestic and international picture has been dominated by the gradual spread of COVID-19 and the resulting restrictive containment measures implemented by the governments of the countries affected. BasicNet has responded promptly to the global economic and health crisis caused by COVID-19, respecting the regulations in place in the countries in which it operates. In order to protect its employees, suppliers, customers and stakeholders, the Group has promptly adopted preventive measures aimed at ensuring and managing employee health and safety in the best possible way, in addition to the well-being of its employees, and the maintenance of relations with its business partners. Against this backdrop, BasicNet established a "Crisis unit" in February 2020 to handle the COVID-19 emergency, through which measures to protect the health and safety of employees and operational continuity were introduced. At the same time, a workplace safety protocol was agreed with the Trade Union representatives with a view to the workforce's gradual return. Remote working and communication tools for meetings with customers, suppliers and external staff were also encouraged and supported. Monitoring of the pandemic continued in 2021, and the safety protocol was updated as required by regulations put in place to respond to the emergency.
In April 2021, in collaboration with Humanitas Gradenigo Hospital, a vaccination site was set up at Turin's BasicVillage, which enabled the Group's employees, collaborators and their families to get their first and second doses of the vaccine. At its peak, this site provided about 800 doses per day.
Further information on the management of employees, suppliers and customers in relation to COVID-19 can be found in the relevant chapters.
In its operations, BasicNet has always sought to create value for its shareholders and, more generally, all those who have a stake in the Group's business. Accordingly, as part of its pursuit of sustainability, in 2021 BasicNet updated the mapping of its main stakeholders, by conducting a thorough analysis of its business and with the participation of Group management. The goal was to identify the main groups that may be influenced by BasicNet's business, including with regard to the type of relationship with the Group in terms of dependence and influence. This mapping process – which resulted in the identification of nine main groups of stakeholders – was carried out in accordance with the international principles established by AA1000 Stakeholder Engagement Standard, AccountAbility (2015), and the GRI Sustainability Reporting Standards, 2016.
The main stakeholders include groups directly linked to business activities, such as Group Resources, Investors, Shareholders and the Financial Community, the Public Sector, Governmental and Control Bodies and the Local Communities in which the Group operates. Due to the specific nature of BasicNet's business system, Sourcing Centers and Licensees play a significant role. Both are commercial partners to the Group and belong to the broader category of clients and consumers (together with the stores involved in retail activities) and suppliers (a category which includes the Group's non-core suppliers of goods and services and Sourcing Centers, i.e. the core suppliers of the subsidiary BasicItalia S.p.A., K-Way S.p.A. and Kappa Europe (and its subsidiaries) proprietary licensees). In addition, the wholly-owned franchisee of subsidiaries BasicRetail S.r.l. and K-WayRetail S.r.l. is also highly important to the Group's business in Italy.
To ensure effective, uniform pursuit of its goals that makes the most of the roles and potential of its stakeholders, the Group participates in various trade associations (such as Federazione Manageritalia, the Turin chapter of ASCOM - Confcommercio and the Turin Industrial Union), in addition to promoting initiatives aimed at securing the internal involvement of its personnel (e.g., the initiative BasicPress.com, the Group's online press agency through which all resources are periodically informed of new developments and initiatives relating to the Group, along with the various social and athletic activities that are promoted at the Basic Village including in "Virtual" format).
With the aim of identifying the economic, environmental and social topics relevant to the Group and its stakeholders ("material" topics), in 2021 the BasicNet Group promoted the internal involvement of the top management by conducting a materiality analysis – a key process to the preparation of the Non-Financial Report. This analysis identified the material topics to be reported in this document, assessing them according to the principles set out in the GRI Standards: materiality, stakeholder inclusion, completeness of information and the Group's operating context.
Given the continuity of Group business, the materiality analysis was in line with that reported in 2020 and was consistent with the indications of the reporting standard and macro sector trends. The analysis resulted in the identification of 15 material topics, divided into five general categories (Governance and Compliance, Economic Responsibility, Responsibility in the Value Chain, Social Responsibility and Environmental Responsibility), for each of which the main stakeholders with the greatest involvement were identified. This overview represents a fundamental tool for the Group to set its priorities with regard to sustainability and to steer the actions to be pursued in this area.
| Category | Material aspect | Stakeholders involved |
|---|---|---|
| Ethics and Compliance | Suppliers; Sourcing Centers; Licensees; Public Sector, government and control bodies |
|
| Governance and Compliance |
Anti-corruption | Investors, Shareholders and the financial community; Suppliers; Sourcing Centers; Licensees; Public Sector; government and control bodies |
| Economic responsibility |
Promotion of economic development | Sourcing Centers; Licensees; Franchisees; local communities |
| R&D and Innovation | Sourcing Centers; Licensees; Customers and consumers |
|
| Procurement practices | Suppliers; Sourcing Centers | |
| Responsibility in | Data Security and Protection | Sourcing Centers; Licensees |
| the value chain | Prevention of Counterfeiting | Sourcing Centers; Licensees; Customers and consumers; Franchisees |
| Customer Relations | Customers and consumers; Franchisees | |
| Management and development of human resources |
Group Resources; Franchisees | |
| Diversity and equal opportunities | Group Resources; Franchisees | |
| Social | Worker Well-being | Group Resources; Franchisees |
| responsibility | Employee Health and Safety | Group resources; Suppliers; Sourcing Centers; Licensees; Franchisees |
| Human Rights | Group resources; Suppliers; Sourcing Centers; Licensees; Franchisees |
|
| Efficient Use of Natural Resources | Public Sector, government and control bodies | |
| Environmental responsibility |
Environmental protection | Public Sector, government and control bodies; local communities |
List of the BasicNet Group's material topics and stakeholders involved
By analysing materiality, BasicNet discovered that its business model consists in offering business opportunities to a worldwide network of independent companies that do business with the Group, namely its manufacturing licensees (sourcing centers) and its commercial licensees (licensees). Accordingly, BasicNet is aware that the Group's economic growth is closely linked to the economic development of its licensees, and that this link represents an initial important factor of sustainability that is inherent to the nature of the Group's business.
Sourcing Centers are third-party firms to the Group. Their function is to manufacture and market merchandise and are located in various countries worldwide, depending on what type of goods they produce.
The BasicNet Group through a market place, uses a computerised platform, fully integrated into the network, that connects manufacturing licensees directly to commercial licensees, and offers licensees a coordination service that links supply to demand. Each licensee can choose at its discretion to which sourcing center it will issue its purchase order, in response to quotes issued by sourcing centres and published on the system. The platform permits the monitoring and aggregating of all transactions between Sourcing Centers and Licensees in order to benefit from economies of scale.
Selection and monitoring of sourcing centres is outsourced to a team of people specialised in manufacturing processes whose task is to select the sources of supply to be contracted and handle the flow of information generated by the relationship between them and the licensees. The relationship with sourcing centres is governed by the "Sourcing Agreement", signed by the parties after identifying the most suitable sourcing centre and after performing a pre-contract analysis intended to assess its potential by gathering various kinds of information (company profile, business registration certificate, memorandum and articles of association, audited accounts). The manufacturers to which we outsource production are experienced specialists in their respective industries. They only devote part of their production capacity to the BasicNet sales network.
Sourcing agreements govern relations between the parties by setting forth the rules of conduct that the sourcing centre must observe concerning production, intellectual property, use of trademarks, their remuneration -- called a "sourcing commission" -- and reporting methods.
Sourcing agreements include clauses relating to social compliance, since the BasicNet Group adheres to, and encourages its commercial counterparts to comply with, the highest international ethical standards and practices of the business world. To make sure that these principles are effectively circulated, sourcing centres must read and sign the Ethics Code, Code of Conduct and the Forbidden Chemical Agreement. The Code of Conduct is based on the basic conventions of the International Labour Organisation (ILO) and the Universal Declaration of Human Rights. It requires sourcing centres to comply with all applicable laws and regulations relating to respect for the individual and for human rights (the main ones concern child labour, involuntary labour and discrimination), as well as to health, safety and the environment. Sourcing centres must establish procedures - and actually execute them - for reporting to the local authorities any accidents caused by acts or omissions of the sourcing centres themselves. Sourcing centres must also comply with applicable laws and regulations regarding the manufacture and importation of products, and must commit to complying with the REACH Regulation (EC No. 1907/2006).
In 2021, the PRSL (Product Restricted Substances List) was revised to update it to the latest international standards in effect.
Also in 2021, the assessment process was conducted on all the new Sourcing Centers, limiting physical visits in some cases due to continuing pandemic restrictions, while requiring the same level of documentation.
As mentioned in previous years regarding the Sourcing Agreement and the Inlight project, BasicNet has begun a rating process with Intertek in order to proceed with the strengthening of its social responsibility. BasicNet intends to instil, in every one of the operators with which it collaborates, the values and principles of an operating model that encourages sustainable development from economic, environmental and social standpoints.
The project seeks to audit the supply chain and objectively assess production partners in order to reduce risks related to the social arena.
This intention has lead to the creation of an action plan that includes evaluation of supplier strategy and sustainability performance by a third party Independent Body (Inlight).
Evaluation of supplier sustainability performance will be formalised in a Desktop Audit program supported by a third party agency. This will consider international indicators, which will be given a specific and determined weighting and will be used to calculate the Intrinsic Risk (IR) for each individual supplier. These indicators are:
The project, which involves direct contact with each manufacturing unit around the world, suffered some delays due to the ongoing COVID-19 pandemic.
All units have been contacted and notified, and 174 production units had completed the questionnaire by the end of 2021 compared to 43 in 2020.
During 2021, BasicNet has planned and already partially initiated several initiatives for the taking of a systemic approach to sustainability, with the Group to undertake an active and conscious role.
A central point of the Group's activity remains the attention to the development of sustainable collections, to be made available to the network of Licensees, and to the management of a rating that prefers Sourcing that complies with the Group's initiatives.
The goal is to constantly improve the production process and the related supply chain. The Group strongly believes that minimizing social and environmental impact is the correct path to take and the ultimate goal is to continue to grow sustainably by offering attractive products in this regard.
With respect to this issue, in 2021 BasicNet joined Golden Links, a project with a circular approach promoted by IntesaSanpaolo, Caritas Italiana and S-Nodi and involving the Cartias diocesan and several non-profit organizations.
The programme has set the goal of distributing various commodities to needy families while allowing work paths for vulnerable women, aimed at improving their economic and social situation, and to promote the reintegration of prisoners through work. BasicNet contributed more than 16,000 sample and prototype items.
The Group has always paid the utmost attention to LEP (Labelling, External decoration, Packaging), which is considered a distinctive element of the product. BasicNet continued to assess the possibility of using pre-recycled/recyclable materials for pendants and boxes at its main sourcing centres, in line with the relative certifications.
For the K-Way Brand, a restyling of the tags is underway, which will be effective as of the second half of 2022: all tags will have new codes and will be made of FSC paper, derived from recovered or recycled material.
Similar work is underway for Superga that will result in FSC paper tags and boxes starting in the second half of 2022 and the first half of 2023 for accessories.
On the other hand, the main labels of the Robe di Kappa brand will be made of recycled polyester yarn from the first half of 2022.
A specific study is underway in collaboration with Deloitte to examine the requirements of the new rules related to environmental labelling and the Plastic Tax (aimed at discouraging the use of plastic products, through a new tax that impacts "single-use plastic"), which should come into force respectively from June 2022 and January 2023, in order to correctly identify the addressees , the scope of application, the mandatory and optional information and above all the feasibility and the consequent management methods through the BasicNet platform.
The agreement continued for 2021 of Kappa® ,Robe di Kappa® ,Superga® ,K-Way® and Sebago® with Green Pea, the first retail park dedicated to conscious consumption, opened in 2020 in the Lingotto area of Turin. Kappa® and Robe di Kappa® have been working to innovate the design and quality of their collections and to find sustainable products and materials for over half a century. K-Way® has created a dedicated collection for Green Pea and opts to use eco-friendly processes and materials. Superga® launched the world's first sneaker made from 100% natural materials (the 2750), and continues to perfect the art of simplicity, while Sebago® on the other hand, offers resoling, fat liquoring, lace-change and cleaning services to Green Pea customers.
As far as the approach on the single product is concerned, BasicNet has always focused on offering the best possible product to the Licensee Network, always prioritising the research of products with a targeted and certified content, in full compliance with the regulations in force. Some products resulting from such research deserve special mention.
Superga®
Alongside products in certified organic cotton, produced in accordance with specific national or international organic agricultural standards, the 100% vegan friendly and cruelty free approach continues through specific dedicated styles.
Producers are required to honour this intention, and a third party has been authorised to verify and certify compliance.
In parallel, the search for alternative materials continues with specific targeted offers.
Sebago®
Its strength is the "durability" of the product, as the philosophy of the Brand is that a conscious purchase is one that stands the test of time.
In this regard, we have entered into an initial collaboration with a footwear firm specialised in solereplacement and shoe repairs with Goodyear techniques to prolong the useful life of footwear.
The same philosophy applies to the Dockside Sail Project, footwear made from actual used sails. The offer of products that use partially or totally recycled materials continues for clothing, with certifications provided by the manufacturers.
There are several offers for K-Way as well. Among these, the Amiable collection in 100% recycled and recyclable nylon, obtained from fabric scraps and fishing nets through a manufacturing process that reduces greenhouse gas emissions, existing in multiple versions, including one with recycled down padding.
The products created within the RE-BORN project, on the other hand, are based on a new approach to the management of military textiles destined for disposal, which are recovered to obtain new aesthetic and functional characteristics.
Of particular note is the launch in Spain for Betis (a Spanish multi-sports club) of a game kit made from recycled fabric. The project is supported by a marketing campaign that, through green, the main colour of Betis, emphasizes the green soul of the initiative and the product. The same brand already has a collection in 100% recycled polyester.
Robe di Kappa®
The projects on the Kid collections have started and the style of the AARAU GREEN merits attention, polo in 100% organic cotton included in the new collections.
In 2021, the Group was supplied by a total of 174 sourcing centres (or 163, since some have operating units in more than one country), compared to 150 in 2020 (143 in effective terms). Their facilities are located all over the world.
The increase, which took place as always in compliance with the search for the best option for all Partners involved in the purchasing process, is due to the effort to find a better balance in the various geographical areas, and was also conditioned by the impact of the pandemic, which particularly affected some areas.
The total number of Licensees remained essentially the same: 96 Licensees were involved in 2021, which is 2 more than in FY 2020. These refer to the 2 new contracts with a start date in 2021, but with no sales during the year.
In addition to the group's licensee business, the Group also wishes to contribute to the economic wellbeing and growth of the communities in which it operates by providing effective high-tech services. As required by its Ethics Code, the relations that the Group maintains with local and national governments, as well as with supranational agencies, are based on full and effective cooperation, transparency and reciprocal respect for the counterparty's autonomy and for its economic goals. BasicNet puts these principles into practice by supporting social, cultural and educational activities. It also sponsors popular sports teams. There is an in-house team devoted to sponsoring, which handles all stages of sponsoring, from designing product quality and image, through selection of sources of supply of goods, to delivering them to the teams and managing participation in sports events.
The decisions made by the Group with regard to its business operations and activities are guided by the company's trade and industrial objectives and as such, tax considerations are relevant to the achievement of these objectives.
The Group is aware that these cash flows have an important impact on collective well-being and therefore ensures compliance with the regulations put in place by the individual tax jurisdictions in which it operates with regard to the payment of taxes and duties, adopting a behavioural model that is consistent with the principles of clarity, transparency, and fairness. These principles are governed by the consolidated act on income taxes, and aim to minimise risk while guaranteeing national and international regulatory compliance.
The BasicNet Group elects the Parent Company's Board of Directors as the competent governing body to examine and approve the Group's financial and tax projections.
The Parent Company adhered to the tax consolidation in accordance with Article 117 and thereafter of the CFA – Presidential Decree No. 917 of December 22, 1986 together with all of the wholly-owned Italian subsidiary companies. A standard procedure exists at a Group level, in addiction to a strict risk management process, where internal control concerns the activities undertaken to protect company assets, effectively manage operations and clearly provide information on the Group financial statements, in addition to those activities undertaken to identify and contain company risks.
In continuity with the agreement stipulated for the 2015-2019 period, an application was presented to renew the "Patent Box" agreement in 2020, which allows the company to access a benefit on taxable income for the five-year period from 2020 to 2024, pursuant to the procedures defined by the reference standard, with regards to industrial patents, legally protectable designs and models, and the use of software protected by copyright, as defined in Article 56 of Legs. Decree 50/2017.
Additional information on the management of Tax Governance and the management of tax concerns, can be found in the "Risks relating to legal and tax disputes" section of the "Principal Risks and Uncertainties" chapter in the Directors' Report.
The Group distinguishes between its dealings with regular suppliers of goods and services ("non-core" suppliers) on the one hand, and its dealings with sourcing centres and licensees on the other, which are the Group's true commercial counterparts. As can be seen from a mapping of the Group's stakeholders, BasicNet's Business System distinguishes between its dealings with Licensees, considered as commercial partners, which includes the Group's Customers and consumers, and its Sourcing Centres, as core suppliers of the subsidiaries BasicItalia S.p.A., K-Way S.p.A. and Kappa France S.a.s.
BasicItalia S.p.A., K-Way S.p.A. and France S.a.s., a proprietary licensee that is a 100%-owned subsidiary, are structured in all respects as commercial licensees for the use and development of intellectual property rights and merchandise bearing all BasicNet trademarks. They purchase from Sourcing Centres and distribute finished goods throughout the area assigned to them. Accordingly, since there is no in-house production, the group's only core suppliers are the sourcing centres that supply products to the Group's subsidiaries BasicItalia S.p.A., K-Way S.p.A. and to the Kappa Europe Group.
BasicItalia S.p.A., K-Way S.p.A. and Kappa France S.a.s. buys goods on a marketplace generated by tenders from sourcing centres selected by BasicNet depending on the technical requirements for satisfying the Group's needs in terms of quality, volumes and production times, as well as on the manufacturer's financial soundness. Repeated on-site inspections are made to assess the consistency of these variables over time. It should be noted that, during the pandemic period, in order to maintain continuous contact with the Sourcing Centers and view their performance, site visits were replaced by frequent online contact.
The companies BasicNet Asia and BasicNet Asia Vietnam have been set up with the task of managing relationships with the Sourcing Centers in the area, in order to optimise the control of their activities and to ensure the constant changing of suppliers and to hinder positions of strength.
Sourcing contracts are based on a standard that arose over the years and was prepared by specialised outside lawyers. If individual contracts require exceptions, amendments or riders as a result of contractual agreements or to comply with local laws, these provisions are analysed beforehand by international lawyers or lawyers specialised in the licensee's territory.
Anti-trust requirements are fulfilled by means of monitoring/control procedures and rules that require that strategic products be produced by at least two or three sourcing centres, where possible, in different regions. Moreover, after five years orders are switched to a new sourcing centre, and we make sure that no factory devotes more than half of its productive capacity to our Group's brand-name products. If these guidelines are not followed, a sourcing centre can be suspended temporarily, depending on each specific case.
Every sourcing centre that joins the Group's network, regardless of whether it is one of BasicNet's Customers and consumers or a core supplier of BasicItalia S.p.A., K-Way S.p.A. and Kappa France S.a.s., must read and sign the Ethics Code and Code of Conduct, which are based on the fundamental conventions of the International Labour Organisation (ILO), the Universal Declaration of Human Rights and the Forbidden Chemical Agreement.
In 2021, just as in the previous year, almost all sourcing centres supplying BasicItalia S.p.A., K-Way S.p.A. and Kappa France S.a.s. are located in either Asia or Europe.
Within the Group, goods and services are procured according to internal procedures that specify general principles for managing the supply chain responsibly and provide for the efficient planning and managing of purchases. In this regard, there is a division of roles within the Group, so that each ".com" (i.e. individual business unit) is assigned a specific role within the Group. One of the dotcoms sets requirements, another handles selection, another certification, another procurement of suppliers, while another certifies fulfilment or receipt of goods and payment. Purchasing office supplies (stationery, consumables, forms, etc.) that are considered "non-core" and purchasing services (assistance services, rentals, subscriptions, consultancy and others, etc.) are all handled through the company's online platform from the time of the request to obtaining approvals and billing.
Remuneration and amounts of any type paid to suppliers and consultants for supplies and professional appointments should be in line with market conditions and adequately documented. Corruption, unlawful favours, collusive conduct, the soliciting of advantages, the payment of material and immaterial benefits, in addition to other advantages for the purposes of influencing business agreements are prohibited and prosecuted. Gratuities of minor value considered as normal business practice are however permitted. Any conflicts of interest in choosing suppliers should be promptly reported to superiors.
The selection of suppliers of non-codified goods is handled by the relative ".com". The purchase order is automatically sent for approval respectively by the direct superior and to the CFO or the CEO, depending on the order amount.
Suppliers and outside consultants are chosen on the basis of competence, professionalism, cost, correctness and transparency criteria. Suppliers should ensure compliance with law and applicable labour market practice in its country of residence, in addition to compliance with the Ethics Code and the Ethics Code of Conduct for Sourcing Centers.
BasicNet, when it allocates employees, services and supplies to contractors, is responsible for providing these parties with information on the specific risks present in the workplace where they are going to work, as well as for providing information on the applicable preventative and emergency measures related to their work in compliance with the provisions of Art. 26 of Legislative Decree 81/2008. If outside suppliers are working continually on BasicNet's premises, BasicNet fills out the Uniform Risk Assessment Document (DUVRI), which is a single standard form, and evaluates the risk of interference among the contractors. Every supplier of labour and services must be approved beforehand by BasicNet after a professional and technical review pursuant to Legislative Decree 81/2008. In 2020, the Basic Group updated its DUVRI to include risks associated with Covid-19. The updated document was subsequently filled out by contractors and suppliers.
Whenever BasicNet places an order with a contractor, it evaluates the contractor on the basis of the following documents:
In 2021, the Group had around 2,115 suppliers for purchases not strictly related to core operations, down from 2,140 in the previous year. Of these, approximately 69% were of Italian origin, compared to 65% in the previous year.
The main merchandise categories among the Group's suppliers are: consumables, costs for events and sponsorships and software development.
The Group protects the secrecy and confidentiality of any information relating to human resources, contractors and third parties that it may gather on account of their work or while they are performing it. Such protection is afforded by following IT procedures that govern the operation of information systems, and IT security procedures.
The privacy and information processing policies are set forth in the Ethics Code. They specify that people subject to the Code are barred from using any information about the company, or any documents, reports, drawings or other material that is not public for purposes unrelated to the performance of their duties.
Those who in the execution of their duties become aware of "inside information" or confidential information, as established by the applicable regulation, are held to maintain its confidentiality. With regards to that stated above, the external communication of confidential information should exclusively be made by authorised persons in accordance with Group procedures and - in any case - in compliance with applicable provisions and the principles of equal and concurrent information.
Addressees of the Ethics Code, in compliance with the "market abuse" regulations, should not utilise inside information to gain advantage of any type, whether directly or indirectly, immediate or future and whether personal or property related.
The Group formally appointed the Information Security Officer (ISR) in 2019 for the Italian companies, and entrusted the management of information security-related activities to the employees of ".com" BasicSystem.
For the companies managed in Italy, in order to ensure rigorous protection of company IT systems, the perimeter of the company network is protected by a sandwich of two firewalls that mitigate the risk of unauthorised access and tampering; remote access is assured by authorised VPN connections that are managed by the double firewall. Internal network protection also makes use of a new CyberIA Darktrace platform that can identify and report potential intrusions or variations with respect to the normal daily operations carried out on the corporate network.
Perimeter protection of the IT infrastructure is outsourced to a certified outside body, a SOC (Security Operation Centre) that conducts 24/7 monitoring of the entire network. In addition, a new policy was introduced to protect user passwords and access to applications via activation of Multifactor Authentication, or two-factor authentication.
In addition, BasicNet has adopted an IT security protocol according to which all electronic records (i.e. work files) used in conducting company business are stored in suitable separate-access network folders. For each network folder a worldwide protection group has been designated to which each user is assigned. ".com" managers send to BasicSystem any requests for changes, inclusion or reassignment to a different group.
The Group has an official backup protocol for data on the company servers used to reboot and recover systems and network resources when breakdowns occur. Data are backed up every day, week and month. A duplicate of the data is stored in a safe close to the server facility.
In order to make users aware of the data security issue, newly hired staff must sign a copy of company security rules and receive online training on mandatory IT procedures. Furthermore, instruction videos are available on the company intranet that explain how to handle computers and software.
For the Kappa Europe Group, which came under the scope of consolidation in 2019, an information system evaluation was carried out, and the necessary steps are underway to bring its policy in line with that of the Basic Group.
With the entry into force of Regulation (EC) 2016/679 of the European Parliament and of the Council of April 27, 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), a need arose to implement within the Group's companies a data protection management arrangement with its own operating procedures and instructions, based on a proper risk assessment process for assessing threats to privacy.
Among the principal regulations introduced was the concept of "data protection by design", which proposes the principle of incorporating privacy protection starting at the design stage of a business process. A parallel concept is that of "data protection by default" which consists in making technical and organisational changes to ensure that only those personal data are processed that are needed for each specific purpose of the processing.
The Privacy Management System implemented during 2018 mainly covered the "Processing Registers", the main privacy procedures, the "Privacy Management Manual", the "privacy disclosures" for interested parties, and the instruments of appointment for parties involved in any way in company data processing (including, for example, instruments of appointment for external officers and authorised personnel). This was to comply with new legislation on the protection of personal data. In 2021, as part of the procedures set out in the integrated control system, checks were carried out on the correct application of the procedures, on the compliance measures undertaken to adhere to the GDPR and applicable reference legislation, on the requests received by the Group from interested parties, and on the number of violations reported (updated for 2021, in which no violations were reported). As regards the Kappa Europe Group, an assessment is currently underway to examine the privacy management system in place in the Group. This aims to identify - and, where necessary, plan - any changes required to bring this system in line with the system adopted by the Basic Group (fully in line with the reference privacy regulations).
The BasicNet Group constantly strives to comply with all consumer protection laws and regulations by paying close attention to its products, by combating counterfeiting, and by means of customer care, through privacy protection, return policies and customer loyalty.
BasicNet is in charge of all efforts to combat counterfeiting. It therefore constantly monitors the market. Reports of counterfeiting come indirectly from the local police, the treasury police and customs, but also directly from Italian and overseas customers and from the Group's network of licensees and their lawyers, who can get in touch with the Group on the "hunt the fake" tab on the BasicTrademark.com website and on the online sales websites. There are links for reporting counterfeit products on all the Group's e-commerce websites.
Each such report is processed individually by analysing samples and available information and then preparing expert opinions. In the event that preliminary investigations are needed in order to seize goods, BasicNet coordinates and manages these tasks, in addition to arranging for the removal or deletion and reassignment of illegal websites.
Monitoring and enforcement are supported by outside agencies responsible for this task, especially with respect to online counterfeiting.
Each product developed and marketed by BasicNet bears a label containing all information required by the various applicable Italian and overseas laws, and in particular by the Consumer Code (Legislative Decree 206/2005 and EU Regulation 1007/2011) that lists textile fibre names and governs the labelling and marking of the fibre components of textile products – in addition to the requirements that domestic law now imposes on each licensee. In addition, each label bears the order number entered by the licensee that, together with the other information on the label, allows BasicNet to check whether the merchandise is genuine and matches the goods on the market.
The BasicLabel project was created so as to reassure the end customer that the product is genuine and can be properly traced.
The project operates entirely online. Starting from the information of the items in BasicSamples and BasicSpecs (which are in charge, respectively, of determining and selling sample collections and of setting technical specifications), when acceptance of an order is confirmed through BasicFactory (the online order management platform for sourcing centres), the BasicLabels manufacturer automatically receives an order for as many labels as items have been ordered (plus buffer amounts), thus assuring tight control over the number of items manufactured. The project is currently active with the K-Way, Superga, Briko and Sebago (Apparel) brand products, covering about 70% of products by 2021.
As the BasicLabel project evolved, the use of RFID (Radio Frequency Identification) labels was introduced, allowing the Sourcing Center to associate all labels with the product code and allowing easier reading during the storage of goods and distribution.
An RFID tag is used for 95% of Kappa products. From the first half of 2022 the system has been extended also to Robe di Kappa and the possibility of extending the RFID tag project also to K-WAY, starting from the first half of 2023, is under consideration.
The Group recognises the central importance of human resources, in the firm belief that the principal factor determining the success of the business is the individual acting in a spirit of fairness and reciprocal trust. Accordingly, as stated in the Ethics Code, the Group undertakes to protect and develop its employees.
At December 31, 2021, the Group's workforce consisted of 864 employees, of which 75.35% in Italy. Most employees have full-time contracts (765 of which 287 men and 478 women) while 99 workers are part-time, of which 92.93% are women. Most employees on part-time contracts are in retail sales as it is a seasonal business and many sales outlets are still start-ups. In addition, the Group sometimes hires temporary workers.
| Workers by type of | 2021 | 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| contract (No.)* | Male | Female | Total | Male | Female | Total | ||||
| Italy | 200 | 451 | 651 | 188 | 402 | 590 | ||||
| Permanent | 148 | 327 | 475 | 144 | 311 | 455 | ||||
| Fixed-term | 52 | 124 | 176 | 44 | 91 | 135 | ||||
| Overseas | 94 | 119 | 213 | 97 | 105 | 202 | ||||
| Permanent | 67 | 69 | 136 | 72 | 74 | 146 | ||||
| Fixed-term | 27 | 50 | 77 | 25 | 31 | 56 | ||||
| Total | 294 | 570 | 864 | 285 | 507 | 792 | ||||
| of which: | ||||||||||
| Full-time | 287 | 478 | 765 | 275 | 410 | 685 | ||||
| Part-time | 7 | 92 | 99 | 10 | 97 | 107 |
* Data on the total number of employees reflect only the headcount (non-FTE) of in-house staff at December 31, 2021
Following the continuation of the pandemic, also in 2021 the Group made use of the Extended Lay-Off Scheme (CIGD), and recorded the following reduction in working hours:
| Employees involved |
Total CIGD | Total workable hours |
Cash% on workable hours |
|
|---|---|---|---|---|
| BasicNet | 201 | 28,229 | 429,324.80 | 6.58 |
| BasicItalia: | 147 | 16,620 | 298,413.00 | 5.57 |
| BasicRetail: | 195 | 52,070 | 292,090.80 | 17.83 |
| Total | 543 | 96,919 | 1,019,828.60 | 9.50 |
In 2021, 268 new staff were hired (91 males and 177 females). Departures numbered 196 people, which yielded a staff turnover rate of 22.68%. The new hires and departures were principally in the Retail area.
| Hiring rate and | 2021 | 2020 | ||||||
|---|---|---|---|---|---|---|---|---|
| staff turnover | Hires (no.) |
Departures (no.) |
Rate of Entry* |
Turnover** | Hires (no.) |
Departures (no.) |
Rate of entry* |
Turnover |
| Gender | ||||||||
| Male | 91 | 82 | 30.95% | 27.89% | 63 | 79 | 21.11% | 27.72% |
| Female | 177 | 114 | 31.05% | 20.00% | 125 | 132 | 24.65% | 26.04% |
| Age group | ||||||||
| Less than 30 | 186 | 124 | 80.52% | 53.68% | 151 | 150 | 55.93% | 55.56% |
| Between 30 and 50 | 72 | 62 | 14.81% | 12.76% | 33 | 51 | 7.91% | 12.23% |
| Over 50 | 10 | 10 | 6.80% | 6.80% | 4 | 10 | 3.81% | 9.52% |
| Region | ||||||||
| Italy | 203 | 142 | 31.18% | 21.81% | 151 | 175 | 25.59% | 29.66% |
| Overseas | 65 | 54 | 30.52% | 25.35% | 37 | 36 | 18.32% | 17.82% |
| Total | 268 | 196 | 31.02% | 22.69% | 188 | 211 | 23.74% | 26.64% |
* Ratio between the number of hires by category and the total number of employees by category at December 31
** Ratio between the number of departures by category and the total number of employees by category at December 31
A ".com" called BasicGuys handles personnel management for all Group companies, including the following aspects:
In terms of recruiting procedures, the Group always hires new staff depending on the ".coms" during preparation of the budget. However, reassignment of existing staff members is preferred to the recruitment of new staff. In general, the recruitment channels used are the following:
The selection procedure is handled with BasicGuys software, which can be accessed by the Staff of a ".com" called BasicGuys and by the managers of all ".coms", and which ensures that the selection process is traceable. To ease insertion of staff, BasicNet constantly organises a large variety of training programmes. In 2021, in Italy 62 internships began, of which 40 concluding in 2021. Of the concluding internships, employment contracts were signed with 30.
In accordance with its Ethics Code, the Group considers it essential to handle labour relations in a way that assures equality of opportunities and encourages everyone's professional development.
The company's success in attaining these goals is evident from its employment figures: at December 31, 2021, the total Group workforce was 34.03% male and 65.97% female, demonstrating the strong female presence at the Group. 56.25% of the total workforce are between the ages of 30 and 50, 17.01% are over the age of 50 and 26.74% are under the age of 30.
| 2021 | 2020 | |||||
|---|---|---|---|---|---|---|
| Staff by diversity trait | Executives | White-collar | Blue-collar | Executives | White-collar | Blue-collar |
| Gender | ||||||
| Male | 69.70% | 32.18% | 50.00% | 69.74% | 32.01% | 45.00% |
| Female | 30.30% | 67.82% | 50.00% | 30.26% | 67.99% | 55.00% |
| Age group | ||||||
| Less than 30 | 0.00% | 27.87% | 25.00% | 5.00% | 32.00% | 25.00% |
| Between 30 and 50 | 42.42% | 56.97% | 50.00% | 58.00% | 55.00% | 55.00% |
| Over 50 | 57.58% | 15.17% | 25.00% | 37.00% | 13.00% | 20.00% |
| Total | 3.81% | 93.86% | 2.31% | 10.00% | 88.00% | 3.00% |
Just as it does every year, the Group renews its commitment to its ethical values of social responsibility by hiring people belonging to the so-called protected categories. At 31/12/2021, there were 23 staff (11 females and 12 males).
| Staff belonging to protected | 2021 | 2020 | ||
|---|---|---|---|---|
| categories (No.) | Male | Female | Male | Female |
| Classification | ||||
| Executives | 1 | - | 1 | 3 |
| White-collar | 10 | 9 | 5 | 8 |
| Blue-collar | 1 | 2 | 1 | 2 |
| Total | 12 | 11 | 7 | 13 |
Also with respect to involving the Group's licensees in its business, the Ethics Code of Conduct for sourcing centres demands that they select their employees solely on the basis of their ability to perform their duties. Sourcing centres are barred from discriminating by age, gender, motherhood, marital status, citizenship, cultural and religious attributes or any other discriminatory criteria in hiring, setting compensation, dismissal or provision for old age.
As required by the Ethics Code, the Group has always been committed to the professional growth of its workers. Thus it has adopted over the years a human resources management policy designed to develop human capital and has assigned a strategic role to occupational training of its workers in this regard. In accordance with this policy, a ".com" called BasicEducation is in charge of planning, organising and reporting on the training of Group employees and promoting the development of human resources.
Training begins immediately upon hiring. Training begins on the very day new employees are hired, when they are handed an information sheet with the Code's rules on personal data privacy (Legislative Decree no. 196 of 30/6/2003), the Group's Ethics and Conduct Code, an information brochure on health and safety, and a statement to sign whereby they consent to audio-video recording pursuant to section 13 Legislative Decree 196/2003, independently of their role, participating at the 4-day introductory course ("Welcome on Board"). During these first few days, new resources are given an overview of Group operations and of the business model, and are also presented the company benefits and instruments, including regarding the IT systems (e.g. the stamping system, how to request leave, absences from work, etc.).
Each year BasicEducation prepares a Group Training Plan, which is then loaded into the section of the system dedicated to each individual employee. The training activities performed are identified on the basis of legislative requirements (e.g., Legislative Decree No. 81/2008)1 , the working needs indicated by employees and updates on processes, in accordance with the Group's policies.
2021 also saw the continuation of the project to train retail staff and ensure that the Group's Human Resources remain constantly up to date. In 2021 the Group provided over 5,000 hours of training to its human resources, involving a total of 596 trainees. Of these hours, 29% regarded Health and Safety training (Legislative Decree No. 81/2008), whereas the remainder related to Finance, the Ethics Code, business model, 3D software and customs policy. These courses were undertaken with the support of funding from the "Fondimpresa" Inter-professional Fund.
1 The data and information regarding anti-corruption policy training is available in the "Legislative Decree No. 231/2001 Organization Model" section of the Corporate Governance and Ownership Structure Report.
| Hours of training provided | 2021 | 2020 | |
|---|---|---|---|
| Total hours of training | 5,532 | 5,133 | |
| of which, in the classroom |
3,804 | 3,055 | |
| of which, online | 1,728 | 2,078 | |
| % of hours of training financed2 | 3.90% | 2.40% |
For 2021, the hours of training provided to interns have been separated from the total, and amount to
| Training hours provided (interns) | 2021 | 2020 | ||
|---|---|---|---|---|
| Total hours of training | 487 432.00 |
|||
| of which, in the classroom |
371 | 363.00 | ||
| of which, online | 116 | 69.00 |
All Group employees have access to two training channels - the e-learning platform and classroom training. Support at the Group brand sales points for business model-focused and pv management training is also provided. Courses are both individual and Group-based.
In 2021, due to the health emergency caused by the COVID-19 pandemic, the support offered to new hires at points of sale during the "Welcome on Board" week was suspended until June.
Face-to-face training was carried out, where possible and necessary, in compliance with the protocols put in place to contain the spread of COVID-19.
2 Training activities for which funding was requested from the "Fondo Interprofessionale Fondimpresa".
| 2021 | 2020 | |||
|---|---|---|---|---|
| Training by classification and gender | Resources trained |
Average hours per capita |
Resources trained |
Average hours per capita |
| (no.) | (**) | (no.) | (*) | |
| Executives | 28 | 7.99 | 43 | 8.50 |
| Male | 19 | 8.19 | 28 | 6.13 |
| Female | 9 | 7.53 | 15 | 13.96 |
| White-collar | 548 | 6.34 | 687 | 6.20 |
| Male | 158 | 7.34 | 216 | 5.13 |
| Female | 390 | 5.86 | 471 | 6.70 |
| Blue-collar | 20 | 6.49 | 21 | 8.80 |
| Male | 10 | 10.96 | 11 | 14.67 |
| Female | 10 | 2.02 | 10 | 4.00 |
| Total | 596 | 6.40 | 751 | 6.48 |
| of which, women | 409 | 5.82 | 496 | 6.97 |
* Average per capita hours are calculated considering the average number of resources in each professional category during the year of reference.
** Average per capita hours are calculated considering the number of resources in each professional category during the year of reference. The reporting scope for data relating to per capita training includes all Group employees (Italian and international offices).
The slight increase in the number of training hours provided takes account of the inclusion of Kappa Europe staff (183 staff).
In order to promote training to ensure that staff remain constantly up-to-date regarding specific operational demands, specific action areas were identified. For 2021, refresher programs focused primarily on developing skills in the use of 3D software for product design and customs policies. These courses were undertaken with the support of funding from the "Fondimpresa" Inter-professional Fund.
For employees in international offices, training focused almost exclusively on learning foreign languages.
Any updates to company processes are provided through dedicated modules and preferentially through the e-learning channel.
In 2021, adequate training was provided to all employees on the subject of COVID-19, the health emergency, and the behavioural protocols to be followed. The "Emergenza COVID-19 Lavoriamo Sicuri" course was mandatory for all new hires joining the Group.
A total of 133.95 training hours were provided to 162 employees on COVID-19. COVID-19 training will remain mandatory for all new hires joining the Group.
In order to maximize the well-being of company personnel, in 2004 the Group began to take various measures aimed at meeting the needs of all resources and ensuring work-life balance, such as:
- The "BasicGym" gym facility with equipment, which organizes gymnastics courses for the Group's personnel. In the Covid year BasicGym was closed as per current regulations at the beginning of the year. BasicNet later created a dedicated usage system during the months when indoor exercise was permitted. Online classes were set up to allow employees to participate from home in order to make up for the closure.
Free access to the BasicVillage multi-storey parking garage.
The Group seeks to promote work-life balance through the extension of the post-maternity part-time option provided for in the National Collective Labour Agreement, with the possibility of applying for the programme until the child's six birthday. Part-time requests are also generally accepted without reference to the percentage envisaged in the National Collective Labour Agreement. In 2021, 24 resources – 24 women and 0 men – took parental leave.
An automatic system with two-year intervals ensures a periodic performance assessment and a revision of positions, where necessary.
With regard to collective bargaining agreements, the BasicNet Group applies the Tertiary Distribution and Services Contract, which covers around 75% of employees, i.e. the majority of the company's workforce in Italy, with the exception of 4 staff, 3 of whom are employed under the Air Transport Contract and 1 under the Journalists' Contract.
As mentioned above, according to the Ethics Code and Code of Conduct, Sourcing Centers are also required to pay their workers salaries and compensation that comply with all locally applicable laws and regulations. Sourcing Centers are thus required to refer to all laws and regulations regarding working hours and to guarantee workers' the rights of association, organization and collective bargaining, peacefully and legally, without interference or penalty.
In view of the evolution of the Covid-19 pandemic that in the summer of 2021 saw a new increase at national level, the BasicNet Group, in addition to the measures already put in place to protect the health of workers, decided to join the initiative in collaboration with the Humanitas Gradenigo Hospital, starting its own vaccine HUB allowing all employees to get their first and second vaccine dose.
| Total remote | Total workable | % remote working | |
|---|---|---|---|
| working hours | hours | on workable hours | |
| Italy | 184,734 | 827,105 | 22.33% |
All employees able to work from home were given the opportunity to do so:
As stated in the Ethics Code, the Group has always safeguarded health and safety in the workplace for all human resources. In this regard, in fact, the Parent Company and its Italian subsidiaries have developed a "Risk Assessment Document" pursuant to Legislative Decree 81/2008 (Basic Properties America, Inc. and BasicNet Asia Ltd., Kappa France S.a.s., BasicRetail Suisse S.A. - now K-WayRetail Suisse S.A. are not subject to the checks set out in the decree). The Group's conduct principles in terms of Health and Safety in the workplace, (hereinafter SSL), are listed in the Ethics Code and govern the conduct with which all resources, employees and external consultants are required to be compliant. The Group safeguards health and safety at places of work, developing an awareness of risks, promoting responsible conduct amongst all employees and acts to protect, particularly by preventative actions, employee health and safety. The Group's activities must be carried out in full compliance with health and safety prevention and protection legislation, whilst constantly seeking to improve health and safety conditions in the workplace.
In compliance with the training programmes, instructions and the resources provided by the employer, each employee is responsible for his/her own health and safety as well as the health and safety of other persons present in the workplace, due to the potential impact of his/her actions or omissions on these other employees.
The Group's foreign companies comply with local Health and Safety regulations.
As already described, even with regard to the Sourcing Centers involved in the Group's business activities, the Group's Ethics Code of Conduct requires that "the Sourcing Centres maintain a clean, safe and healthy workplace in compliance with all legislation and applicable laws. The Sourcing Centres shall ensure the presence of minimum conditions such as employee access to drinking water, sanitary structures and a sufficient number of toilet facilities, extinguishers, emergency exits and a properly insulated and correctly lit workplace environment. The Sourcing Centres shall ensure that the standards outlined above are applied equally to any canteen facilities and/or accommodation provided to employees".
For all the Italian companies of the Group, the ".com" BasicFacility is responsible for the management of health and safety in the workplace, and is supported in this by an external consultancy firm (Gruppo Torinoprogetti S.r.l.). On an annual basis, BasicFacility is allocated a budget which includes the item "SSL expenses" available for the Companies BasicNet S.p.A., BasicItalia S.p.A. and BasicVillage S.p.A., who individually itemise expenses of BasicRetail S.r.l. and K-WayRetail S.r.l. (direct management).
In order to facilitate employee participation and their consultation in the development, implementation and evaluation of a occupational health and safety management system, meetings are held annually (pursuant to Article 35 of Decree 81) between company representatives and employee health and safety representatives (EHSR) on the topic to health and safety.
During 2021 the health emergency from the Covid pandemic continued and the Group continued to manage and monitor the situation in compliance with current regulations and to safeguard the health and safety of its employees. The Group task force set up in 2020 for the management of the Pandemic Emergency also in 2021 has tried to respond to all company needs from offices to points of sale, together with the external consulting firm Gruppo TorinoProgetti S.r.l. The task force meets periodically with the aim of verifying and adapting the new regulations to internal procedures. In summary:
For each company, the Group has identified and formally appointed individuals to SSL tasks and responsibilities ("Company Health & Safety Organisation Chart"), and these related contacts are listed in the Health and Safety Organisation chart presented in the risk assessment document (DVR). Specifically, for the companies the following individuals were identified:
The SSL organisational structure is communicated internally within the Group's Companies through information given to employees when drafting their contracts or during training/information meetings.
SSL personnel meet annually (pursuant to article 35 of Legislative Decree 81/2008) to identify and share information regarding sensitive situations and to identify potential corrective actions. Each meeting is duly formalised by the ".com" BasicFacility and BasicGuys of the Group and the related reports are shared with relevant parties. The following participate in the meetings:
Furthermore, a person responsible for fire prevention requirements has also been identified and emergency coordinators and officers responsible for managing emergencies have been formally appointed. Each person in the emergency team has undergone specific training procedures in accordance with the applicable Art. 37 of Legislative Decree 81/2008.
The Group has established and formalised a Risk Assessment Document (DVR) drafted in accordance with current legislation. The risk assessment process was set out as a logical procedure and can be summarised in the following steps:
Within each DVR, the risk assessment methods are defined in terms of general and specific risks under the paragraph "Risk assessment criteria used". Each DVR includes:
In drafting the emergency plans, the Group defined formal rules to manage emergencies, identifying the intervention procedures, from the implementation of fire prevention procedures to the evacuation of employees in the case of serious and imminent danger – "Procedures to be implemented in the case of emergency and evacuation scenarios". Emergency drills are carried out annually across various company sites in compliance with legislative requirements and the persons responsible for fire prevention as well as first aid first-aid personnel undergo a specific training programme.
In relation to SSL training, the ".com" "BasicEducation" is responsible for planning, organising and reporting the Group's employee training programmes (internal resources and personnel in owned and non-owned stores). The health and safety training programmes are drawn up by the BasicNet Group's Workplace Health and Safety Coordinator in conjunction with the Gruppo Torino Progetti S.r.l. and include:
the planning and the delivery of a course on general workplace health and safety for official use (elearning);
appropriate training courses related to the specific risks to which employees are exposed depending on their related roles, as well as on the correct use of Individual Protection Devices (IPD).
At the end of every course, all participants are registered and where required an assessment test is carried out. Each resource has the option to access the BasicEducation app, and can see their own "training licence" with details of the courses taken/to be taken.
All the training courses delivered by BasicEducation are based on both legislative and individual requirements in addition to the Company's professional requirements (e.g. Legislative Decree 81 2008).
The BasicNet Group, when it allocates employees, services and supplies to contractors, is responsible for providing these parties with information on the specific risks present in the workplace where they are going to work, as well as for providing information on the applicable preventative and emergency measures related to their work in compliance with the provisions of Art. 26 of Legislative Decree 81/2008. As of 2020, every external company is required to read and sign the risk information sheet (disruptive risks) found at the security desk at the BasicVillage factory outlet and in the porter's lodge at BasicItalia.
The BasicGuys web service tracks all accidents and incidents that arise at the company. Incidents are analysed on an annual basis and the results of these analyses are discussed during regular meetings pursuant to Article 35 of Legislative Decree 81/2008.
In 2021, there were no reports of occupational illnesses, nor were there any fatal incidents or incidents with permanent damage reported.
In 2021 there was 2 workplace accidents in Italy and 6 workplace accidents abroad.
| Number of accidents and accident rates 2021 – Italy | |
|---|---|
| Total | |
| Total accidents (No.) | 2 |
| serious workplace accidents (No.)3 | 0 |
| of which deaths at work (No.) | 0 |
| Frequency Index/Accident Rate (Injury Rate IR)4 | 0.42 |
| Rate of serious accidents at work (excluding deaths)5 | 0.00 |
| Workplace death rate6 | 0.00 |
| Total hours worked | 946,612 |
| Number of accidents and accident rates 2021 – Abroad | |
| Total | |
| Total accidents (No.) | 6 |
| serious workplace accidents (No.) | 0 |
| of which deaths at work (No.) | 0 |
| Frequency Index/Accident Rate (Injury Rate IR) | 4.37 |
| Rate of serious accidents at work (excluding deaths) | 0.00 |
| Workplace death rate6 | 0.00 |
| Total hours worked | 274,337 |
| Number of accidents and accident rates 2020 – Italy | |
| Total | |
| Total accidents (No.) | 3 |
| serious workplace accidents (No.) | 0 |
| of which deaths at work (No.) | 0 |
3 Serious work-related injuries refer to work-related injuries that result in an injury where the worker cannot, or does not expect, to fully recover to pre-injury health within 6 months. Deaths due to accidents in the workplace are excluded from this category.
4 The Frequency Index represents the ratio between the total number of accidents and the total number of days worked during the same period, multiplied by 200,000 (Source: GRI standards 2016)
5 The serious occupational injury rate represents the ratio of the number of serious injuries excluding fatalities to total hours worked, multiplied by 200,000.
6 The occupational fatality rate represents the ratio of the number of fatalities occurring in the workplace to total hours worked, multiplied by 200,000
| 0.71 |
|---|
| 0.00 |
| 0.00 |
| 855,959 |
| Total |
| 3 |
| 0 |
| 0 |
| 2.65 |
| 0.00 |
| 0.00 |
| 226,112 |
Throughout 2021, the Companies of the BasicNet Group continued with the Prevention and Protection Service (Gruppo Torinoprogetti S.r.l.) through a number of health and safety projects aimed at promoting an increased awareness amongst employees regarding looking after their own health, including outside the work environment.
Every intervention to promote health was firstly developed as a step towards disseminating information, starting from drawing up a procedure to manage the actual process for disseminating information, the timelines and the target audience of the given project. Moreover, each health promotion intervention was supported by information materials drafted by official bodies, for example the Ministry of Health, to ensure accurate and valid content.
In order to safeguard employee health as well as the health of the company population, in 2021 new AED (automated external defibrillator) operators were trained, and new hires were brought up to date as per the applicable legislation.
Environmental protection is a key factor in the Group's competitiveness and sustainability, as the Group believes that the environment and nature are fundamental values and assets that belong to everybody which should be protected and defended. As also stated in the Ethics Code, this respect of the environment is primarily consolidated in dutiful and scrupulous compliance with environmental regulations. Secondly, the Group is committed to implementing responsible environmental-protection behaviours, avoiding any behaviour that may damage the environment as well as promoting the responsible management of the energy resources and raw materials used (e.g. paper), as well as waste products.
As provided under the Ethics Code of Conduct, the Sourcing Centres are also required to comply with all environmental laws and regulations, as well as maintaining procedures to notify the local Authorities in a timely manner of any environmental incidents arising from the work carried out by the Sourcing Centres.
The energy resources analysed relate to:
In relation to the two headquarters in Turin, where 421 out of 864 employees work (48.72% of the Group's total workforce), the online business "BasicFacility" in recent years launched some initiatives to reduce energy consumption including:
With regard to the energy resources used internally within the Group, all the stores and the two Turin headquarters purchase their energy directly from the grid, but only the two Turin headquarters use respectively natural gas (BasicVillage headquarters) and oil (BasicItalia and BasicVillage headquarters) to heat their premises. We note that in 2021, total electric energy consumption increased by 9% compared to 2020, whereas the consumption of natural gas increased by 72%, and the use of oil for heating decreased by 7%. The changes in the two heating sources used by offices in Italy are owed to the fact that the BasicItalia headquarters in Turin were connected to the methane gas network in 2021, and thus favours this resource to diesel. The increase in 2021 electricity consumption is also driven by the opening of new Retail stores.
7 The Parent Company's relative electricity consumption also includes, for 2021, in continuity with 2020, the Corso Vigevano warehouse and the Via Padova offices in Turin (Italy).
8 the K-Way20 Olbia store at Olbia Costa Smeralda Airport was excluded because both for size and consumption it was considered not significant and because of the lack of specific data on the store (expenses and consumption are invoiced by the Costa Smeralda Airport, without specific details).
A further portion of energy consumption can be attributed to the use of fuels (petrol and diesel) by the Group's fleet of vehicles, which includes company cars and long-term leased vehicles. This was affected by a 43% increase in gasoline consumption and a significant 182% increase in diesel consumption due to the recovery after the health emergency which, in the countries in which the Group operates, led to fewer vehicles in circulation in 2021. In addition, there are more gasoline vehicles than diesel vehicles in 2021.
Specifically, the greenhouse gases from electricity supplied from the grid (indirect emissions - Scope 2, calculated using a Location-based method rather than a Market-based method), did not change significantly, declining by 1% with the Location-based approach and 4% with the Market-based approach compared to 2020. By contrast, emissions generated directly within the Group from the use of heating and vehicle fuels (direct emissions - Scope 1) increased 65% on 2020. This was due to the Group's increased scope and the consumption generated by the Cessna Citation VII aircraft. Among these, emissions generated by the use of petrol and diesel for motor vehicles increased by 149%, due to the resumption of operations and commercial activities following 2020, the first year of the pandemic.
In general, it should be noted that the main differences relating to energy consumption data are mainly owed to the lockdown and the reduced use of company cars, especially by the sales team. In addition, the changes in CO2 emissions data between 2021 and 2020 can be attributed to an increase in the Group's energy consumption and changes to the consolidation scope, following the inclusion of the company BasicAir S.r.l for the full year 2021.
| Energy sources | 2021 | 2020 | Change % |
|---|---|---|---|
| Internal energy consumption9 | |||
| Electrical energy purchased from the grid | 4,471,763 kWh | 4,086,904 kWh | |
| (16,098 GJ) | (14,713 GJ) | 9% | |
| Heating | |||
| Natural gas | 365,933 scm | 212,718 smc | |
| (12,910 GJ) | (7,505 GJ) | 72% | |
| Diesel | 52,240 litres | 56,204 litres | |
| (1,888 GJ) | (2,020 GJ) | -7% | |
| Vehicles | |||
| Petrol or vehicles | 18,425 litres | 12,875 litres | 43% |
| (589 GJ) | (406 GJ) | ||
| Diesel for vehicles | 76,978 litres | 27,306 litres | 182% |
| (2,782 GJ) | (982 GJ) | ||
| Aviation10 | |||
| Aviation turbine fuel | 82 tonnes | 51 tonnes | 60% |
| (3,587 GJ) | (2,254 GJ) | ||
| Total internal energy consumption | 37,856 GJ | 27,880 GJ | 36% |
Internal and external energy consumption for the BasicNet Group in 2021 and 2020
9 For the 2021 data, the sources for the conversion factors used were the values published by the Ministry for the Environment and Protection of the Land and the Sea ("Standard National Parameters 2021" table) and by the Department for Environment, Food & Rural Affairs ("Conversion factors 2021: full set (for advanced users) - revised January 2022").
10 Fuel used for third-party travel was excluded from the Group's consumption of aviation turbine fuel for the Cessna Citation VII aircraft owned by BasicAir. In fact, approximately 40% of the aircraft's flight hours can be attributed to third parties.
| CO2 emissions (ton CO2)11 | 2021 | 2020 | Change % |
|---|---|---|---|
| Scope 1 emissions12 | 1,374 | 834 | 65% |
| Due to heating | 865 | 571 | 42% |
| Due to vehicles | 249 | 100 | 149% |
| Due to aviation | 260 | 163 | 59% |
| Scope 2 emissions13 | |||
| Location-based Approach | 1,334 | 1,342 | -1% |
| Market-based Approach | 1,929 | 1,852 | 4% |
As the Group does not have its own internal production activity, the main waste produced by the Group's activities come under the conventional categories of typical office-waste: paper and cardboard, photocopier and printing toners, batteries and plastics. All waste products are collected and sent to recycling operators, according to the procedures and time frames of current legislation and based on waste categories: while paper and cardboard, plastic, and batteries are collected and sent to the recovery chain (56,077 kg of waste of non-hazardous waste and 145 kg of hazardous waste), toners are collected by third-party waste processing companies and sent for recovery. In terms of paper consumption, through the web integration, since 1999 the Group has committed to reducing paper usage by means of the IT platform, which is the only communication instrument between the elements within the Network (from procedural controls to HR management). The Group also utilises a scanner archive system throughout the operating cycle, for the majority of accounting records and ledgers and payroll management.
2021 saw a decrease in the total waste produced despite the expansion of the Group consolidation scope. This variation was primarily caused by the Covid-19 pandemic, which resulted in lockdown periods and a change in work mode. In fact, during 2021 the smartworking mode was preferred to the in-person mode as required by current regulations to safeguard and protect the health of employees.
This specifically resulted in a slight decrease in plastic consumption (-13%) and toner consumption (- 35%). One factor that has contributed to the reduction in the production of plastic waste has been the inclusion of spoons made of biodegradable material in vending machines at the Group's main offices and paper cups in water dispensers.
Hazardous waste decreased by 75% as it is linked to the operation of equipment which, despite the pandemic, continued to operate and consume but whose accumulators (waste considered hazardous) have a variable duration and replacement frequency, not annual, on average every 4 years.
11 For calculations of Scope 1 and Scope 2 emissions, only CO2 emissions were taken into account. This is because the effect of methane and nitrous oxide on total greenhouse gas emissions (CO2 equivalents) is negligible, as stated in the related technical literature.
12 For the 2021 data, Scope 1 emissions were calculated using the coefficients published by the Ministry for the Environment and Protection of the Land and the Sea ("Standard National Parameters 2021" table) and by the Department for Environment, Food & Rural Affairs ("Conversion factors 2021: full set (for advanced users) - revised January 2022").
13 The reporting standard used (GRI sustainability reporting standards 2016) establishes two different calculation methods for Scope 2 emissions: "Location-based " and "Market-based ". The location-based method requires the use of the average national emission factor related to the specific national energy mix used to produce electricity (Source: Terna, International Comparisons 2019). The market-based approach uses an emission factor based on the contractual agreement for the provision of electricity. Given the absence of specific electricity agreements between the companies of the Group and the suppliers (e.g. a Guarantee of Origin purchase), for this calculation an emission factor based on the national "residual mix" was used (Source: Association of Issuing Bodies, European Residual Mixes 2021; Terna, Confronti Internazionali 2019).
| Type of waste (KG) | 2021 | 2020 | Change % |
|---|---|---|---|
| Non-hazardous waste | |||
| Paper and cardboard | 54,930 | 61,010 | -10% |
| Toner | 80 | 122 | -35% |
| Plastic | 1,067 | 1,228 | -13% |
| Total | 56,077 | 62,360 | -10% |
| Hazardous waste | |||
| Batteries | 145 | 577 | -75% |
| Total | 145 | 577 | -75% |
| Total waste | 56,222 | 62,937 | -10% |
BasicNet Group waste products, year 2021 and 202014
The BasicNet Group during 2021, as part of its non-financial reporting journey, became aware of the European taxonomy as governed by EU Regulation 2020/852 of the European Parliament and Council of June 18, 2020.
The Taxonomy Regulation provides a definition of economic activities that are considered environmentally sustainable. To qualify as environmentally sustainable, an economic activity must, among other things, contribute substantially to one or more of the six objectives set forth in Article 9 of the regulation. On June 4, 2021, a delegated act was adopted that defines the technical selection criteria that specific activities must meet to be aligned with the first two environmental goals: climate change mitigation and climate change adaptation. For the remaining four environmental objectives (sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems), no delegated act has yet been adopted, but it is now expected to be published during 2022.
Therefore, the disclosure regarding the European taxonomy for fiscal year 2021 concerns only the environmental objectives of climate change mitigation and adaptation; subsequent assessments will be made following the publication of the delegated act under the other four objectives and consequently the economic activities related to them.
In accordance with Article 10(1) of the delegated act of July 6, 2021, which specifies the content and presentation to be disclosed, the Group will report in fiscal year 2021 only the proportion of economic activities that are eligible and not-eligible ("eligible" and "not-eligible") for the taxonomy in total revenue, capex and opex.
The currently available definitions included in the EU taxonomy are broadly worded, leading companies to have to interpret how this applies to their business activities and its impact on eligibility. The Group has applied its own judgment, interpretations and assumptions based on currently available information, reports issued on the subject and previously published examples. Documents and delegated acts published in the future may lead to more accurate definitions and thus other decision-making processes for fulfilling reporting requirements that may come into effect, which could impact future EU taxonomy reporting.
The process of defining the eligibility of economic activities with respect to the European taxonomy involved an analysis of the activities carried out by the Group not limited to the Ateco code (77.40: Concession of rights to exploit intellectual property and similar products15), i.e., those activities that contribute to the formation of turnover, being core business, but also extended to those activities that contribute to the formation of capex and opex, as required by law.
14 The weight of batteries was estimated based on the weight (in kg) of a battery and the number of batteries disposed of during the year. The weight of plastic was estimated on the basis of the weight (in kg) of bottles of water and the number of bottles disposed of during the year. The weight of toner was extrapolated from the formulas of the company specialised in toner disposal. The weight of paper/cardboard was extrapolated from the communications of the company in charge of paper and cardboard disposal. The paper weight also includes an estimate of the weight of paper cups introduced in 2021 in water dispensers to replace plastic cups, the weight of which was estimated in kilograms based on the weight of a single cup.
In light of the above and given the type of business conducted by the Group, i.e. developing the value of brands and disseminating related products through a global network of licensees, it is not believed that the sector in which BasicNet operates and the activities in general carried out by the Group are considered relevant by EU Regulation 2020/852 for the purposes of climate change-related objectives.
Thus, in line with the delegated act, the proportions of turnover, capex and opex eligible according to the objectives of climate change mitigation and adaptation are 0%.
The following table outlines the sustainability issues that the Group BasicNet deems of relevance, correlated to the elements defined in the GRI standards guidelines reported in this document as well as the Boundary impact that each issue could have in within the Group for the relevant stakeholders. Furthermore, in the column "Type of impact", the role BasicNet plays in relation to the impact caused to each relevant issue is also outlined.
| Material | GRI Standards aspects | Correlation to themes | Boundary | Type of impact |
|---|---|---|---|---|
| aspects | referred to in | |||
| Legislative Decree | ||||
| 254/2016 | ||||
| Ethics and | - GRI 206: Anti |
Combatting corruption | BasicNet Group; | Caused by the |
| Compliance | competitive conduct | active and passive | Suppliers; Sourcing | Group |
| (2016) | Centers; Licensees; | |||
| GRI 308: - |
Public Sector, | |||
| Environmental | government and | |||
| compliance (2016) | control bodies | |||
| - GRI 418: Socio |
||||
| economic compliance | ||||
| (2016) | ||||
| - GRI 207: Tax (2019) |
||||
| Anti | - GRI 205: Anti |
Combatting corruption | BasicNet Group; | Caused by the |
| corruption | corruption (2016) | active and passive | Investors, Shareholders | Group |
| and the financial | ||||
| community; Suppliers; Sourcing Centers; |
||||
| Licensees; Public | ||||
| Sector; government | ||||
| and control bodies | ||||
| Promotion of | - GRI 203: Indirect |
Social | BasicNet Group; | Caused by the |
| economic | economic impacts | Sourcing Centers; | Group | |
| development | (2016) | Licensees; Franchisees; | ||
| local communities | ||||
| R&D and | n/a | n/a | BasicNet Group; | Caused by the |
| Innovation | Sourcing Centers; | Group | ||
| Licensees; Customers | ||||
| and consumers | ||||
| Procurement | - GRI 414: Assessment |
Social | BasicNet Group; | Contribution of |
| practices | of suppliers according | Human Rights | Suppliers; Sourcing | the Group; |
| to social criteria | Centers | Related to Group | ||
| (2016) | activities | |||
| - GRI 412: Human |
||||
| rights assessment | ||||
| (2016) |
| Material topics | GRI Standards aspects | Correlation to themes | Boundary | Type of impact |
|---|---|---|---|---|
| referred to in Legislative Decree 254/2016 |
||||
| Data Security and Protection |
- GRI 418: Customer privacy (2016) |
Social | BasicNet Group; Sourcing Centers; Licensees |
Caused by the Group; Related to Group activities |
| Prevention of Counterfeiting |
- GRI 417: Marketing and labelling (2016) |
Social | BasicNet Group; Sourcing Centers; Licensees; Customers and consumers; Franchisees |
Caused by the Group; Related to Group activities |
| Customer Relations |
n/a | Social | BasicNet Group; Customers and consumers; Franchisees |
Caused by the Group; |
| Management and development of human resources |
- GRI 401: Employment (2016) - GRI 404: Training and education (2016) |
Related to personnel | BasicNet Group; Group Resources; Franchisees |
Caused by the Group |
| Diversity and equal opportunities |
- GRI 405: Diversity and equal opportunity (2016) GRI 406: Non - Discrimination (2016) |
Related to personnel | BasicNet Group; Group Resources; Franchisees |
Caused by the Group |
| Worker Well being |
- GRI 401: Employment (2016) |
Related to personnel | BasicNet Group; Group Resources; Franchisees |
Caused by the Group |
| Employee Health and Safety |
GRI 403: - Occupational Health and Safety (2018) |
Related to personnel | BasicNet Group; Group resources; Suppliers; Sourcing Centers; Licensees; Franchisees |
Caused by the Group; Related to Group activities |
| Human Rights | - GRI 412: Human rights assessment (2016) |
Human Rights | BasicNet Group; Group resources; Suppliers; Sourcing Centers; Licensees; Franchisees |
Related to Group activities |
| Efficient Use of Natural Resources |
- GRI 302: Energy (2016) |
Environmental | BasicNet Group; Public Sector, government and control bodies |
Caused by the Group |
| Environmental protection |
- GRI 305: Emissions (2016) - GRI 306: Waste (2020) |
Environmental | BasicNet Group; Public Sector, government and control bodies; local communities |
Caused by the Group |
The performance indicators, in compliance with the GRI Standards according to the in accordance - Core option, are provided below. Each indicator is linked with a specific section of the Non-Financial Report or a differing publicly available source to which reference should be made.
| GRI-Standards | Page | Notes/Omissions16 | |
|---|---|---|---|
| GRI 102: GENERAL STANDARD DISCLOSURES | |||
| Organizational Profile | |||
| 102-1 | Name of the organization | 7 | |
| Activities, brands, products, and | |||
| 102-2 | services | 7-9 | |
| 102-3 | Location of headquarters | 7 | |
| 102-4 | Countries of operation | 7-13; 15 | |
| 102-5 | Ownership and legal form | 32-40 | |
| 102-6 | Markets served | 10-13; 15 | |
| 102-7 | Scale of the Organization | 14-20; 79-81 | |
| 102-8 | Information on employees and other workers |
79-81 | |
| 102-9 | Supply chain | 75-77 | |
| 102-10 | Significant changes to the Organisation and its supply chain |
63; 66-67 | |
| 102-11 | Precautionary principle or approach | 48-52 | |
| 102-12 | External initiatives | 68-70 | |
| 102-13 | Membership of associations | 68 | |
| Strategy | |||
| 102-14 | Statement of the Chairperson/Chief Executive Officer |
5-6 | |
| 102-15 | Key impacts, risks, and opportunities |
22-25; 48-51; 66 | |
| Ethics and integrity | |||
| 102-16 | Values, principles, standards, and norms of behavior |
51-54 | |
| Governance | |||
| 102-18 | Governance structure | 35-48 | |
| Stakeholder Engagement | |||
| 102-40 | List of stakeholder groups | 69 | |
| 102-41 | Collective bargaining agreements | 85 | |
| 102-42 | Identifying and selecting stakeholders |
68-70 | |
| 102-43 | Approach to stakeholder engagement |
68-70 | |
| 102-44 | Key topics and concerns raised | 70 |
16 The "Notes" column presents information on the coverage of the indicators and any limitations to the reporting boundary.
| Reporting process | |||
|---|---|---|---|
| Entities included in the | |||
| 102-45 | consolidated financial statements | 67 | |
| 102-46 | Defining report content and topic | 66-70 | |
| Boundaries | |||
| 102-47 | List of material topics | 70 | |
| 102-48 | Restatements of information | 63; 66-67 | |
| 102-49 | Changes in reporting | 66-67 | No significant changes in relation to the material topics and their scope took place in 2021. |
| 102-50 | Reporting period | 66 | |
| 102-51 | Date of most recent report | 66 | |
| 102-52 | Reporting cycle | 66-67 | |
| 102-53 | Contact point for questions regarding the report |
67 | |
| 102-54 | GRI Guidelines compliance option | 66 | |
| 102-55 | GRI Content Index | 94-102 | |
| 102-56 | External assurance | 103-105 | |
| SPECIFIC STANDARD DISCLOSURES | |||
| ECONOMIC CATEGORY | |||
| Indirect economic impacts | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
70-74 | |
| 103-3 | Evaluation of the management approach |
70-74 | |
| GRI 203: Indirect economic impacts (2016) | |||
| 203-2 | Significant indirect economic impacts |
70-74 | |
| Anti-corruption | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
49-55 | |
| 103-3 | Evaluation of the management approach |
49-55 | |
| GRI 205: Anti-corruption (2016) | |||
| 205-2 | Communication and training about anti-corruption policies and procedures |
51-55; 82-83 | |
| Anti-competitive conduct | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
49-55 | |
| 103-3 | Evaluation of the management approach |
49-55 |
| GRI 206: Anti-competitive conduct (2016) | |||
|---|---|---|---|
| 206-1 | Legal actions for anti-competitive behavior, anti-trust, and monopoly practices |
99 | As for 2020, during 2021 no legal actions for anti competitive behavior, anti trust, and monopoly practices were reported. |
| Income taxes | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
24-25; 74-75 | |
| 103-3 | Evaluation of the management approach |
24-25; 74-75 | |
| GRI 207: Tax (2019) | |||
| 207-1 | Approach to tax | 74-75 | |
| 207-2 | Tax governance, control and risk management |
24-25; 74-75 | |
| 207-3 | Stakeholder engagement and management of concerns related to tax |
22-25; 74-75 | |
| 207-4 | Country-by-country reporting | Information not available For the year 2021, the Company does not report the information as required by GRI 207-4, for reasons related to the reporting and internal control process of the data with the level of detail required for each tax jurisdiction. Therefore, the Company is committed to sourcing the data and information necessary to cover the disclosures for future reporting years. |
|
| ENVIRONMENTAL CATEGORY | |||
| Energy | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
90-92 | |
| 103-3 | Evaluation of the management approach |
90-92 | |
| GRI 302: Energy (2016) | |||
| 302-1 | Energy consumption within the organization |
91-92 |
| Emissions (2016) | |||
|---|---|---|---|
| GRI 103: Managerial approach | |||
| Explanation of the material topic | |||
| 103-1 | and its Boundary | 69-70; 94-95 | |
| 103-2 | The management approach and its components |
90-92 | |
| 103-3 | Evaluation of the management approach |
90-92 | |
| GRI 305: Emissions | |||
| 305-1 | Direct (Scope 1) GHG emissions | 91-92 | |
| 305-2 | Energy indirect (Scope 2) GHG emissions |
91-92 | |
| Effluents and waste | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
92-93 | |
| 103-3 | Evaluation of the management approach |
92-93 | |
| GRI 306: Waste (2020) | |||
| 306-1 | Waste generation and significant waste-related impacts |
92-93 | |
| 306-2 | Management of significant waste related impacts |
92-93 | |
| 306-3 | Hazardous waste | 92-93 | |
| Environmental Compliance | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
89-91 | |
| 103-3 | Evaluation of the management approach |
98-91 | |
| GRI 307: Environmental Compliance (2016) | |||
| 307-1 | Non-compliance with environmental laws and regulations |
100 | As for 2020, during 2021 no significant incidents of non-compliance with environmental laws and regulations were reported. |
| SOCIAL CATEGORY | |||
| Employment | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
79-81 | |
| 103-3 | Evaluation of the management approach |
79-81 |
| GRI 401: Employment (2016) | |||
|---|---|---|---|
| New employee hires and employee | |||
| 401-1 | turnover | 80 | |
| Benefits provided to full-time | |||
| 401-2 | employees that are not provided to | 84-85 | |
| temporary or part-time employees | |||
| Occupational health and safety | |||
| GRI 103: Managerial approach | |||
| Explanation of the material topic | |||
| 103-1 | and its Boundary | 69-70; 94-95 | |
| 103-2 | The management approach and its components |
85-88 | |
| 103-3 | Evaluation of the management approach |
85-88 | |
| GRI 403: Occupational Health and Safety (2018) | |||
| Occupational health and safety | |||
| 403-1 | management system | 85-89 | |
| 403-2 | Hazard identification, risk assessment, and incident investigation |
85-89 | |
| 403-3 | Occupational health services | 85-89 | |
| Worker participation, consultation, | |||
| and communication on | 85-89 | ||
| 403-4 | occupational health and safety | ||
| Worker training on occupational | 82-84; 85-89 | ||
| 403-5 | health and safety | ||
| 403-6 | Promotion of worker health | 85-89 | |
| Prevention and mitigation of occupational health and safety impacts directly linked by business |
85-89 | ||
| 403-7 | relationships | ||
| 403-9 | Work-related injuries | 88-89 | |
| Training and education | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
82-84 | |
| 103-3 | Evaluation of the management approach |
82-84 | |
| GRI 404: Training and education (2016) | |||
| Average hours of training per year | |||
| 404-1 | per employee | 83-84 | |
| 404-2 | Programs for upgrading employee skills and transition assistance |
82-84 | |
| programs | |||
| Diversity and equal opportunities | |||
| GRI 103: Managerial approach Explanation of the material topic |
|||
| 103-1 | and its Boundary | 69-70; 94-95 | |
| 103-2 | The management approach and its components |
39-41; 81-82 | |
| 103-3 | Evaluation of the management approach |
39-41; 81-82 | |
| GRI 405: Diversity and equal opportunity (2016) | |||
| 405-1 | Diversity of governance bodies and employees |
39-41; 81-82 | |
| Non-Discrimination | |||
| GRI 103: Managerial approach |
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
|---|---|---|---|
| 103-2 | The management approach and its components |
81-82 | |
| 103-3 | Evaluation of the management approach |
81-82 | |
| GRI 406: Non-Discrimination (2016) | |||
| 406-1 | Incidents of discrimination and corrective actions taken |
102 | As in 2020, there were no reported instances of discrimination within the Group during the year 2021. |
| Human rights assessment | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
51-53; 70-72 | |
| 103-3 | Evaluation of the management approach |
51-53; 70-72 | |
| GRI 412: Human rights assessment (2016) | |||
| 412-2 | Employee training on human rights policies or procedures |
51-53; 82-84 | |
| 412-3 | Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening |
51-53 | |
| Assessment of suppliers according to social criteria | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
75-77 | |
| 103-3 | Evaluation of the management approach |
75-77 | |
| GRI 414: Assessment of suppliers according to social criteria (2016) | |||
| 414-1 | New suppliers that were screened using social criteria |
70-71; 76-77 | |
| Marketing and labelling | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
78-79 | |
| 103-3 | Evaluation of the management approach |
78-79 | |
| GRI 417: Marketing and labelling (2016) | |||
| 417-1 | Requirements for product and service information and labelling |
78-79 |
| Customer privacy | |||
|---|---|---|---|
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
77-79 | |
| 103-3 | Evaluation of the management approach |
77-79 | |
| GRI 418: Customer privacy (2016) | |||
| 418-1 | 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data |
103 | As for 2020, during 2021 no complaints against privacy violation were received. |
| Socio-economic compliance | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
49-51 | |
| 103-3 | Evaluation of the management approach |
49-51 | |
| GRI 419: Socio-economic compliance (2016) | |||
| 419-1 | Non-compliance with laws and regulations in the social and economic area |
24-25 | |
| R&D and Innovation | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
27-28 | |
| 103-3 | Evaluation of the management approach |
27-28 | |
| Client Relations | |||
| GRI 103: Managerial approach | |||
| 103-1 | Explanation of the material topic and its Boundary |
69-70; 94-95 | |
| 103-2 | The management approach and its components |
75-77; 78-79 | |
| 103-3 | Evaluation of the management approach |
75-77; 78-79 |
EY S.p.A. Via Meucci, 5 10121 Torino
Tel: +39 011 5161611 Fax: +39 011 5612554 ey.com
Relazione della società di revisione indipendente sulla dichiarazione consolidata di carattere non finanziario ai sensi dell'art. 3, c. 10, D.Lgs. 254/2016 e dell'art. 5 del regolamento Consob adottato con Delibera n. 20267 del 18 gennaio 2018
Al Consiglio di Amministrazione della BasicNet S.p.A.
Ai sensi dell'articolo 3, comma 10, del Decreto Legislativo 30 dicembre 2016, n. 254 (di seguito "Decreto") e dell'articolo 5 del Regolamento CONSOB n. 20267/2018, siamo stati incaricati di effettuare l'esame limitato ("limited assurance engagement") della dichiarazione consolidata di carattere non finanziario della BasicNet S.p.A. e sue controllate (di seguito "Gruppo" o "Gruppo BasicNet") relativa all'esercizio chiuso al 31 dicembre 2021 predisposta ai sensi dell'art. 4 del Decreto, presentata nella specifica sezione della Relazione sulla gestione e approvata dal Consiglio di Amministrazione in data 3 marzo 2022 (di seguito "DNF").
L'esame limitato da noi svolto non si estende alle informazioni contenute nel paragrafo "6. EU Taxonomy" della DNF, richieste dall'art.8 del Regolamento europeo 2020/852.
Gli Amministratori sono responsabili per la redazione della DNF in conformità a quanto richiesto dagli articoli 3 e 4 del Decreto e ai "Global Reporting Initiative Sustainability Reporting Standards" definiti dal GRI - Global Reporting Initiative (di seguito "GRI Standards"), da essi individuato come standard di rendicontazione.
Gli Amministratori sono altresì responsabili, nei termini previsti dalla legge, per quella parte del controllo interno da essi ritenuta necessaria al fine di consentire la redazione di una DNF che non contenga errori significativi dovuti a frodi o a comportamenti o eventi non intenzionali.
Gli Amministratori sono responsabili inoltre per l'individuazione del contenuto della DNF, nell'ambito dei temi menzionati nell'articolo 3, comma 1, del Decreto, tenuto conto delle attività e delle caratteristiche del Gruppo e nella misura necessaria ad assicurare la comprensione dell'attività del Gruppo, del suo andamento, dei suoi risultati e dell'impatto dallo stesso prodotti.
Gli Amministratori sono infine responsabili per la definizione del modello aziendale di gestione e organizzazione dell'attività del Gruppo, nonché, con riferimento ai temi individuati e riportati nella DNF, per le politiche praticate dal Gruppo e per l'individuazione e la gestione dei rischi generati o subiti dallo stesso.
Il Collegio Sindacale ha la responsabilità della vigilanza, nei termini previsti dalla legge, sull'osservanza delle disposizioni stabilite nel Decreto.
Siamo indipendenti in conformità ai principi in materia di etica e di indipendenza dell'International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) emesso dall'International Ethics Standards Board for Accountants, basato su principi
fondamentali di integrità, obiettività, competenza e diligenza professionale, riservatezza e comportamento professionale. La nostra società di revisione applica l'International Standard on Quality Control 1 (ISQC Italia 1) e, di conseguenza, mantiene un sistema di controllo qualità che include direttive e procedure documentate sulla conformità ai principi etici, ai principi professionali e alle disposizioni di legge e dei regolamenti applicabili.
È nostra la responsabilità di esprimere, sulla base delle procedure svolte, una conclusione circa la conformità della DNF rispetto a quanto richiesto dal Decreto e dai GRI Standards. Il nostro lavoro è stato svolto secondo quanto previsto dal principio "International Standard on Assurance Engagements ISAE 3000 (Revised) - Assurance Engagements Other than Audits or Reviews of Historical Financial Information" (di seguito "ISAE 3000 Revised"), emanato dall'International Auditing and Assurance Standards Board (IAASB) per gli incarichi limited assurance. Tale principio richiede la pianificazione e lo svolgimento di procedure al fine di acquisire un livello di sicurezza limitato che la DNF non contenga errori significativi. Pertanto, il nostro esame ha comportato un'estensione di lavoro inferiore a quella necessaria per lo svolgimento di un esame completo secondo l'ISAE 3000 Revised ("reasonable assurance engagement") e, conseguentemente, non ci consente di avere la sicurezza di essere venuti a conoscenza di tutti i fatti e le circostanze significativi che potrebbero essere identificati con lo svolgimento di tale esame.
Le procedure svolte sulla DNF si sono basate sul nostro giudizio professionale e hanno compreso colloqui, prevalentemente con il personale della Società responsabile per la predisposizione delle informazioni presentate nella DNF, nonché analisi di documenti, ricalcoli ed altre procedure volte all'acquisizione di evidenze ritenute utili.
In particolare, abbiamo svolto le seguenti procedure:
Relativamente a tali aspetti sono stati effettuati inoltre i riscontri con le informazioni contenute nella DNF e effettuate le verifiche descritte nel successivo punto 5, lett. a).
documentali, al fine di raccogliere informazioni circa i processi e le procedure che supportano la raccolta, l'aggregazione, l'elaborazione e la trasmissione dei dati e delle informazioni di carattere non finanziario alla funzione responsabile della predisposizione della DNF.
Inoltre, per le informazioni significative, tenuto conto delle attività e delle caratteristiche del Gruppo:
Sulla base del lavoro svolto, non sono pervenuti alla nostra attenzione elementi che ci facciano ritenere che la DNF del Gruppo BasicNet relativa all'esercizio chiuso al 31 dicembre 2021 non sia stata redatta, in tutti gli aspetti significativi, in conformità a quanto richiesto dagli articoli 3 e 4 del Decreto e dai GRI Standards.
Le nostre conclusioni sulla DNF del Gruppo non si estendono alle informazioni contenute nel paragrafo "6. EU Taxonomy" della stessa, richieste dall'art.8 del Regolamento europeo 2020/852.
Torino, 22 marzo 2022
EY S.p.A. Stefania Boschetti (Revisore Legale)
106
In accordance with Consob Resolution No. 15519 of July 27, 2006 the transactions with related parties are described at Note 50.
| Not e |
FY 2021 | FY 2020 | Change | ||||
|---|---|---|---|---|---|---|---|
| % | % | % | |||||
| Consolidated direct sales | (9) | 241,635 | 100.00 | 213,756 | 100.00 | 27,879 | 13.04 |
| Cost of sales | (10) | (143,628) | (59.44) | (127,125) | (59.47) | (16,503) | (12.98) |
| GROSS MARGIN | 98,007 | 40.56 | 86,631 | 40.53 | 11,376 | 13.13 | |
| Royalties and sourcing commissions | (11) | 54,763 | 22.66 | 45,975 | 21.51 | 8,788 | 19.12 |
| Other income | (12) | 10,066 | 4.17 | 8,490 | 3.97 | 1,576 | 18.56 |
| Sponsorship and media costs | (13) | (36,231) | (14.99) | (38,284) | (17.91) | 2,053 | 5.36 |
| Personnel costs | (14) | (31,043) | (12.85) | (28,893) | (13.52) | (2,150) | (7.44) |
| Selling, general and administrative costs, | |||||||
| royalties expenses | (15) | (51,312) | (21.24) | (54,092) | (25.31) | 2,780 | 5.14 |
| Amortisation & depreciation | (16) | (12,630) | (5.23) | (12,276) | (5.74) | (354) | (2.88) |
| EBIT | 31,620 | 13.09 | 7,551 | 3.53 | 24,069 | 318.75 | |
| Net financial income (charges) | (17) | (1,891) | (0.78) | (1,707) | (0.80) | (184) | (10.76) |
| Management of equity investments | (18) | (6) | (0.00) | 933 | 0.44 | (939) | (100.66) |
| PROFIT BEFORE TAXES | 29,723 | 12.30 | 6,777 | 3.17 | 22,946 | 338.58 | |
| Income taxes | (19) | (9,393) | (3.89) | 1,804 | 0.84 | (11,197) | (620.76) |
| NET PROFIT FOR THE YEAR | 20,330 | 8.41 | 8,581 | 4.01 | 11,749 | 136.93 | |
| Earnings per share | (20) | ||||||
| basic - |
0.3965 | 0.1635 | 0.233 | 142.56 | |||
| diluted - |
0.3965 | 0.1635 | 0.233 | 142.56 | |||
(Euro thousands)
| Note | FY 2021 | FY 2020 |
|---|---|---|
| Profit for the year (A) | 20,330 | 8,581 |
| Effective portion of the Gains/(losses) on cash flow hedges |
3,793 | (2,358) |
| Re-measurement of post-employment benefits (IAS 19) (*) |
(108) | 6 |
| Gains/(losses) from translation of accounts of foreign subsidiaries |
628 | (785) |
| Tax effect on other profits/(losses) | (905) | 583 |
| Total other gains/(losses), net of tax effect (B) (34) |
3,408 | (2,554) |
| Total Comprehensive Profit (A)+(B) | 23,738 | 6,027 |
(*) items which may not be reclassified to the profit and loss account
(Euro thousands)
| ASSETS | Note | December 31, 2021 | December 31, 2020 |
|---|---|---|---|
| Intangible assets | (21) | 65,748 | 65,380 |
| Rights-of-use | (22) | 23,119 | 22,082 |
| Goodwill | (23) | 11,840 | 11,907 |
| Property, plant and equipment | (24) | 47,276 | 45,690 |
| Equity invest. & other financial assets | (25) | 1,099 | 765 |
| Interests in joint ventures | (26) | 191 | 192 |
| Deferred tax assets | (27) | 7,737 | 3,419 |
| Total non-current assets | 157,010 | 149,435 | |
| Net inventories | (28) | 63,622 | 62,194 |
| Trade receivables | (29) | 53,120 | 53,050 |
| Other current assets | (30) | 11,239 | 10,263 |
| Prepayments | (31) | 12,654 | 13,433 |
| Cash and cash equivalents | (32) | 28,548 | 33,652 |
| Derivative financial instruments | (33) | 1,596 | - |
| Total current assets | 170,779 | 172,592 | |
| TOTAL ASSETS | 327,789 | 322,027 |
| LIABILITIES | Note | December 31, 2021 | December 31, 2020 |
|---|---|---|---|
| Share capital | 31,717 | 31,717 | |
| Reserve for treasury shares in portfolio | (30,648) | (24,679) | |
| Other reserves | 112,423 | 103,658 | |
| Net Profit | 20,330 | 8,581 | |
| TOTAL SHAREHOLDERS' EQUITY | (34) | 133,822 | 119,277 |
| Provisions for risks and charges | (35) | 590 | 229 |
| Loans | (36) | 34,783 | 44,387 |
| Payables for rights-of-use | (38) | 24,041 | 23,097 |
| Employee and Director benefits | (39) | 4,902 | 4,062 |
| Deferred tax liabilities | (40) | 6,451 | - |
| Other non-current liabilities | (41) | 1,368 | 1,381 |
| Total non-current liabilities | 72,135 | 73,156 | |
| Bank payables | (37) | 31,466 | 48,330 |
| Trade payables | (42) | 66,517 | 55,925 |
| Tax payables | (43) | 9,131 | 5,805 |
| Other current liabilities | (44) | 8,973 | 12,020 |
| Accrued expenses | (45) | 5,703 | 5,274 |
| Derivative financial instruments | (46) | 42 | 2,240 |
| Total current liabilities | 121,832 | 129,594 | |
| TOTAL LIABILITIES | 193,967 | 202,750 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
327,789 | 322,027 |
(Euro thousands)
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| A) OPENING SHORT-TERM BANK DEBT | (6,265) | (27,040) |
| B) CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net profit for the year | 20,330 | 8,581 |
| Amortisation & depreciation | 12,630 | 12,276 |
| Management of equity investments | 6 | (933) |
| Changes in working capital: | ||
| (Increase) decrease in trade receivables | (70) | 15,510 |
| (Increase) decrease in inventories | (1,429) | 4,545 |
| (Increase) decrease in other receivables | 399 | (1,469) |
| . Increase (decrease) in trade payables | 11,642 | 8,382 |
| . Increase (decrease) in other payables | 1,624 | (6,562) |
| Net changes in employee and director benefits | 840 | 654 |
| Others, net | (20) | (1,342) |
| 45,951 | 39,642 | |
| C) CASH FLOW FROM INVESTING ACTIVITIES | ||
| Investments in fixed assets: | ||
| - tangible assets | (5,889) | (4,000) |
| - intangible assets | (3,214) | (3,062) |
| - financial assets | (338) | - |
| - acquired brand K-Way Japan | - | (10,945) |
| - acquired brand K-Way China | (1,050) | (100) |
| - change in consolidation scope | - | (11,141) |
| Realisable value for fixed asset disposals: - tangible assets |
118 | 77 |
| - intangible assets | - | - |
| - financial assets | - | - |
| (10,372) | (29,171) | |
| D) CASH FLOW FROM FINANCING ACTIVITIES |
||
| New medium/long term loans | - | 28,909 |
| Loan repayments | (8,762) | (5,246) |
| Repayment of loans for rights-of-use | (5,113) | (3,965) |
| Acquisition of treasury shares | (5,969) | (3,022) |
| Dividend payments | (3,144) | (6,372) |
| (22,988) | 10,304 | |
| E) CASH FLOW IN THE YEAR |
12,591 | 20,775 |
| F) CLOSING SHORT-TERM BANK DEBT |
6,325 | (6,265) |
Interest paid for the year amounts to respectively Euro 734 thousand in 2021 and Euro 634 thousand in 2020, while income taxes paid in the year amount respectively to Euro 1.7 million in 2021 and Euro 2.2 million in 2020.
| Reserves | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Share Treas. capital shares Capital |
Reserves & Retained earnings |
Translation reserve |
Remeas. IAS 19 |
IFRS16 Reserve |
Cash flow hedge |
Result | Total Group Net Equity |
||
| Balance at December 31, 2019 | 31,717 | (22,225) | 90,789 | 1,324 | (275) | (733) | 91 | 21,053 | 121,741 |
| Allocation of result as per Shareholders' AGM resolution of June 26, 2020 |
|||||||||
| - Reserves & Retained earnings - Dividends distributed |
- - |
14,677 - |
- - |
- - |
- - |
- - |
(14,677) (6,376) |
- (6,376) |
|
| Acquisition of treasury shares | (3,022) | - | - | - | - | - | - | (3,022) | |
| Own equity transaction | 568 | 232 | - | - | - | - | - | 800 | |
| 2020 Result | - | - | - | - | - | - | 8,581 | 8,581 | |
| Other changes/correction of errors from previous years |
- | 49 | - | - | - | - | - | 49 | |
| Changes in the consolidation scope | - | 56 | - | - | - | - | - | 56 | |
| Other comprehensive income items: - Gains/(losses) recorded directly to translation reserve |
- | - | (785) | - | - | - | - | (785) | |
| - Gains/(losses) recorded directly to equity for IAS 19 re-measurement |
- | - | - | 5 | - | - | - | 5 | |
| - Gains/(losses) recorded directly to cash flow hedge reserve |
- | - | - | - | - | (1,773) | - | (1,773) | |
| Total comprehensive income | - | - | (785) | 5 | - | (1,773) | 8,581 | 6,027 | |
| Balance at December 31st 2020 | 31,717 | (24,679) | 105,803 | 539 | (270) | (733) | (1,682) | 8,581 | 119,277 |
| Allocation of result as per Shareholders' AGM resolution of April 8, 2020 |
|||||||||
| - Reserves & Retained earnings - Dividends distributed |
- - |
5,437 - |
- - |
- - |
- - |
- - |
(5,437) (3,144) |
- (3,144) |
|
| Acquisition of treasury shares | (5,969) | - | - | - | - | - | - | (5,969) | |
| 2021 Result | - | - | - | - | - | - | 20,330 | 20,330 | |
| Other changes/correction of errors from previous years |
- | (78) | - | - | - | - | - | (78) | |
| Other comprehensive income items: | |||||||||
| - Gains/(losses) recorded directly to translation reserve |
- | - | 628 | - | - | - | - | 628 | |
| - Gains/(losses) recorded directly to equity for IAS 19 re-measurement |
- | - | - | (82) | - | - | - | (82) | |
| - Gains/(losses) recorded directly to cash flow hedge reserve |
- | - | - | - | - | 2,862 | - | 2,862 | |
| Total comprehensive income | - | - | 628 | (82) | - | 2,862 | 20,330 | 23,738 | |
| Balance at December 31, 2021 | 31,717 | (30,648) | 111,161 | 1,167 | (352) | (733) | 1,180 | 20,330 | 133,822 |
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| Cash and cash equivalents | 28,548 | 33,652 |
| Bank overdrafts and bills | (9,313) | (19,929) |
| Import advances | (12,910) | (19,989) |
| Sub-total net liquidity available | 6,325 | (6,266) |
| Short-term portion of medium/long-term loans | (9,243) | (8,412) |
| Short-term net financial position | (2,918) | (14,678) |
| Medium/long term loans | (34,268) | (43,709) |
| Payables for rights-of-use | (24,041) | (23,097) |
| Finance lease payables | (515) | (678) |
| Sub-total loans and leasing | (58,824) | (67,484) |
| Consolidated Net Financial Position | (61,743) | (82,162) |
The following table shows the composition of the Group's net debt as of December 31, 2021 and December 31, 2020, determined in accordance with the "Guidelines on disclosure requirements under the Prospectus Regulation" issued by ESMA (European Securities & Markets Authority) on March 4, 2021 (ESMA32-382- 1138) and implemented by Consob with Attention Reminder No. 5/21 of April 29, 2021.
| December 31, 2021 |
December 31, 2020 |
||
|---|---|---|---|
| A. | Cash | 123 | 87 |
| B. | Other cash equivalents | 28,425 | 33,565 |
| C. | Securities held for trading | - | - |
| D. | Cash & cash equivalents (A)+(B)+(C) | 28,548 | 33,652 |
| E. | Current financial receivables | - | - |
| F. | Current bank payables | (22,223) | (39,918) |
| G. | Current portion of non-current debt | (9,243) | (8,412) |
| H. | Other current financial payables | - | - |
| I. | Current financial debt (F)+(G)+(H) | (31,466) | (48,330) |
| J. | Net current financial debt (I)-(E)-(D) | (2,918) | (14,678) |
| K. | Non-current bank payables | (58,824) | (67,484) |
| L. | Bonds issued | - | - |
| M. | Other non-current financial payables | 1,554 | (2,240) |
| N. | Trade payables and other non-current payables | - | - |
| O. | Non-current financial debt (K) + (L) + (M) + (N) | (57,270) | (69,724) |
| P. | Net financial debt (J) + (O) | (60,189) | (84,402) |
The net financial debt differs from the consolidated net financial position for the fair value of the interest and currency hedging operations - cash flow hedges (Notes 33 and 46).
(Euro thousands)
| December 31, 2021 |
December 31, 2020 | |
|---|---|---|
| A) OPENING NET FINANCIAL POSITION | (82,162) | (78,274) |
| B) CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net profit for the year | 20,330 | 8,581 |
| Amortisation & depreciation | 12,630 | 12,276 |
| Management of equity investments | 6 | (933) |
| Changes in working capital: | 12,166 | 20,406 |
| Net changes in employee and director benefits | 840 | 654 |
| Others, net | (20) | (1,341) |
| 45,951 | 39,642 | |
| C) CASH FLOW FROM INVESTING ACTIVITIES | ||
| Fixed asset investments | (9,103) | (7,162) |
| Purchase brand Kappa Japan | - | (10,945) |
| Acquisition K-Way China | (1,050) | - |
| Aprica acquisition | - | (10,466) |
| Change in consolidation scope | - | (675) |
| Acquisition of financial assets | (338) | - |
| Realisable value for fixed asset disposals | 118 | 77 |
| (10,372) | (29,171) | |
| D) CASH FLOW FROM FINANCING ACTIVITIES |
||
| Registration payables for Right-of-use | (6,581) | (9,143) |
| Income from right-of-use | 534 | 1,340 |
| Proceeds from Kappa Europe put/call option | - | 2,839 |
| Acquisition of treasury shares | (5,969) | (3,022) |
| Dividend payments | (3,144) | (6,372) |
| (15,160) | (14,358) | |
| E) CASH FLOW IN THE YEAR |
20,418 | (3,888) |
| F) CLOSING NET FINANCIAL POSITION | (61,743) | (82,162) |
BasicNet S.p.A. – with registered office in Turin, listed on the Italian Stock Exchange since November 17, 1999 and its subsidiaries, operate in the sports and casual clothing, footwear and accessories sector through the brands Kappa, Robe di Kappa, Jesus Jeans, K-Way, Superga, Sabelt, Briko and Sebago. Group activities involve the development of the value of the brands and the distribution of their products through a global network of independent licensees.
The duration of BasicNet S.p.A. is fixed by the company by-laws until December 31, 2050.
The publication of the consolidated financial statements of BasicNet as at December 31, 2021 was approved by the Board of Directors on March 3, 2022.
The main accounting principles adopted in the preparation of the consolidated financial statements and Group financial reporting are described below.
This document has been prepared in accordance with IFRS issued by the International Accounting Standards Board (IASB) and approved by the European Union. IFRS refers to all the revised International Accounting Standards (IAS) and all of the interpretations of the International Financial Reporting Interpretations Committee ("IFRIC") - previously known as the Standing Interpretations Committee ("SIC").
The financial statements are prepared under the historical cost convention (modified where applicable for the valuation of certain financial instruments), as well as on the going concern assumption.
The Group consolidated financial statements include the financial statements at December 31, 2021 of BasicNet S.p.A. and all the Italian and foreign companies in which the Parent Company holds control directly or indirectly. For the financial statements of the US, Asian, Spanish, English, Swiss and French subsidiaries, which utilise local accounting standards, as not obliged to adopt IAS/IFRS, the appropriate adjustments were made for the preparation of the consolidated financial statements in accordance with international accounting standards.
The accounting policies utilised for the preparation of the Consolidated Financial Statements at December 31, 2021 are the same as those utilised for the previous year, with the exception of the adoption of new standards and amendments from January 1, 2021. The Group has not adopted in advance any accounting standard, interpretation or amendment issued but not yet in effect.
The changes include the temporary easing of requirements with respect to the effects on the financial statements when the interest rate offered on the interbank market (IBOR) is replaced by an alternative rate that is substantially risk free (Risk Free Rate- RFR):
The changes include the following practical expedients:
These amendments do not have an impact on the Group's financial statements.
On May 28, 2020, the IASB published an amendment to IFRS 16. The amendment allows a lessee not to apply the requirements in IFRS 16 on the accounting effects of contractual changes for lease reductions granted by lessors that are a direct result of the Covid-19 outbreak. The amendment introduces a practical expedient whereby a tenant may choose not to consider whether the reduction in Leasing payments constitute contractual modifications. A lessee that chooses to use this expedient accounts for these reductions as if the reductions were not contractual modifications within the scope of IFRS 16.
The amendments were applicable until June 30, 2021, although as the impact of the COVID-19 pandemic has continued, on March 31, 2021 the IASB extended the application period of the practical expedient until June 30, 2022.
The amendments apply to the years beginning April 1, 2021 or subsequently. The Group has applied the practical expedient, the effects of which are discussed in Note 8 and Note 38.
The BasicNet Group presents its income statement by nature of cost items; the assets and liabilities are classified as current or non-current. The statement of cash flows was prepared applying the indirect method. The format of the consolidated financial statements applied the provisions of Consob Resolution No. 15519 of July 27, 2006 and Notice No. 6064293 of July 28, 2006 on financial disclosure requirements. With reference to Consob Motion No. 15519 of July 27, 2006, transactions with related parties are described in Note 50 of the consolidated financial statements.
The consolidated financial statements were prepared including the financial statements at December 31, 2021 of the Group companies included in the consolidation scope, appropriately adjusted in accordance with the accounting principles adopted by the Parent Company.
The consolidated financial statements of the BasicNet Group are presented in Euro thousands, where not otherwise stated; the Euro is the functional currency of the Parent Company and the majority of the consolidated companies.
Financial statements in currencies other than the Euro are translated into the Euro applying the average exchange rate for the year for the income statement and the exchange rate at the date of the operation in the case of significant non-recurring transactions. The balance sheet accounts are translated at the yearend exchange rate. The differences arising from the translation into Euro of the financial statements prepared in currencies other than the Euro are recorded in a specific reserve in the Comprehensive Income Statement.
| Currency | FY 2021 | FY 2020 | |||
|---|---|---|---|---|---|
| US Dollar | Average 1.1809 |
At year-end 1.1326 |
Average 1.1451 |
At year end 1.2271 |
|
| HK Dollar | 9.1810 | 8.8333 | 8.8825 | 9.5142 | |
| Japanese Yen | 130.2955 | 130.3800 | 121.8002 | 126.4900 | |
| UK Sterling | 0.8582 | 0.8403 | 0.8888 | 0.8990 | |
| Swiss Franc | 1.0794 | 1.0331 | 1.0708 | 1.0802 | |
| Vietnamese Dong | 27,083 | 25,819 | 26,655 | 28,331 |
The exchange rates applied are as follows (for 1 Euro):
The criteria adopted for the consolidation were as follows:
As illustrated in Attachment 2, at December 31, 2021 the Group is comprised solely of subsidiaries owned directly or indirectly by the Parent Company BasicNet S.p.A., or jointly controlled; there are no associated companies or investments in structured entities.
Control exists where the Parent Company BasicNet S.p.A. simultaneously:
The existence of control is verified where events or circumstances indicate an alteration to one or more of the three factors determining control.
Investments in associates and joint ventures are consolidated at equity, as established respectively by IAS 28 - Investments in associates and joint ventures and by IFRS 11 – Joint arrangements.
An associate is a company in which the Group holds at least 20% of voting rights or exercises significant influence - however not control or joint control - on the financial and operational policies. A joint venture is a joint control agreement, in which the parties who jointly hold control maintain rights on the net assets of the entity. Joint control concerns the sharing, under an agreement, of the control of economic activities, which exists only where the decisions regarding such activities requires unanimity by all parties sharing control.
Associates and joint ventures are consolidated from the date in which significant influence or joint control begins and until the discontinuation of such. Under the equity method, the investment in an associated company or a joint venture is initially recognised at cost and subsequently the carrying amount is increased or decreased to recognise the associated company's share of the profit or loss after the date of acquisition. The share of profits (losses) of the investment is recognised to the consolidated income statements. Dividends received from the investee reduce the book value of the investment.
If the share of losses of an entity in an associate or a joint venture is equal to or greater than its interest in the associate or joint venture the entity discontinues the recognition of its share of further losses. After the investor's interest is reduced to zero, additional losses are provisioned and a liability is recognised, only to the extent that the investor has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. If the associate or the joint venture subsequently reports profits, the investor resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised.
The consolidation scope includes the Parent company BasicNet S.p.A. and the Italian and foreign subsidiaries in which BasicNet S.p.A. exercises direct, or indirect, control. Attachment 2 contains a list of consolidated companies under the line-by-line method, as well as the complete list of Group companies, registered office, corporate purpose, share capital and direct and indirect holdings.
Two operating segments have been identified within the BasicNet Group: i) apparel, footwear and accessories and ii) real estate. The relevant information is reported in Note 7.
The information by geographic area has significance for the Group in relation to royalty income and direct sales, and therefore was included for the two respective items. The breakdown of licensee aggregate sales by geographic area, from which the royalties derive, is reported in the Directors' Report.
The present financial statements were prepared on the going concern basis, and in accordance with the accruals principle.
The main accounting policies adopted for the preparation of the consolidated financial statements at December 31, 2021, in line with those utilised in the previous year, are disclosed below.
Revenues derive from Group operations in the ordinary course of business and comprise revenues from sales and services. Revenues are recognised net of sales tax, returns and discounts.
Revenues from contracts with customers rare recognised when the control of the goods and services is transferred to the client for an amount which reflects the consideration that the Group expects to receive in exchange for these goods and services. The Group has concluded that generally it acts as the Principal for the agreements from which it receives revenues, as usually it controls the goods and services before their transfer to the customer. In calculating the sales transaction price for goods, the Group considers the effects from variable fees, significant financial components and non-monetary fees. Where the fee concluded in the contract includes a variable amount, such as that connected to a right of return, the Group estimates the amount of the fee to which it will be entitled in exchange for the transfer of the goods to the customer.
Sales to Group brand stores managed by third parties, on consignment, are recognised on the sale of the goods by the store to the final consumer, in accordance with IFRS 15.
Royalties and sourcing commissions, including the minimum guaranteed component, are recognised on an accruals basis in accordance with the underlying contracts and consistent with the state of advancement of the sales or the production of the licensees.
Costs and expenses are recognised in accordance with the accruals principle.
Costs associated with sponsorship contracts paid each year are recognised in line with the contractual conditions.
Cost relating to the preparation and presentation of sample collections are recognised in the income statement in the year in which the sales of the relative collections are realised. Any differences are recorded through accruals.
Advertising campaign costs undertaken to drive orders by the salesforce, in accordance with current interpretations of IAS/IFRS, are directly expensed at the moment of the campaign, rather than in correlation to the relative revenues, which will only be recognised on the subsequent shipment of the orders received, although this second method better illustrates the correlation with the advertising campaign activity.
Interest income and expenses and other income and expenses are recorded and shown in the financial statements on the accrual basis.
In accordance with IAS 23 – Borrowing costs, the financial charges directly attributable to the purchase, construction and production of the asset which requires a significant amount of time before use or sale are capitalised together with the value of the asset. Such an event has not arisen up to the present moment for the Group. If these conditions are not met the financial charges are expensed directly to the income statement.
The receivables and payables originally expressed in foreign currencies are translated into Euro at the exchange rate when the transaction originated. Exchange differences arising on collections and payments in foreign currencies are recorded in the income statement.
Revenues and income, costs and charges related to currency transactions are recorded at the exchange rate at the transaction date.
At the end of the period, the assets and liabilities valued in foreign currencies, with the exception of fixed assets, are recorded at the exchange rates at the balance sheet date and the relative gains or losses on exchange are recorded in the income statement.
Current income taxes include all the taxes calculated on the assessable income of the Group. Income taxes are recognised in profit and loss, except where they relate to items charged or credited directly to equity, in which case the tax effect is also recognised directly in equity.
Other taxes not related to income, such as taxes on property and share capital, are included under operating charges.
Deferred taxes are calculated on all the temporary differences arising between the assessable income of an asset or liability and the relative book value in the consolidated financial statements. Deferred tax assets, including those relating to losses carried forward, for the portion not offset by deferred tax liabilities, are recognised only for those amounts for which it is probable there will be future assessable income to recover the amounts. Deferred tax assets and liabilities are determined with the tax rates that are expected to be applied, in accordance with the regulations of the countries in which the Group operates, in the years in which the temporary differences will be realised or settled. The deferred tax assets and liabilities are offset when the income tax is applied by the same fiscal authority and when there is a legal right of compensation.
The Parent Company adhered to the tax consolidation in accordance with Article 117 and thereafter of the CFA – Presidential Decree No. 917 of December 22, 1986 together with all of the wholly-owned Italian subsidiary companies. Other taxes not related to income, such as taxes on property and share capital, are included under operating charges.
Similarly, the French group companies have opted to join the tax consolidation system ('Régime fiscal des groupes de sociétés') provided for in Articles 223-A to 223-U of the Code général des impôts (CGI): Kappa Europe S.A.S. operates as the consolidating company.
On September 30, 2019, the Company filed an application to renew the benefits provided by the "Patent Box" regulations for the use of intangible assets for the tax periods from 2020 to 2024, which was followed at the end of the financial year by a subsequent application for the prior definition, on an adversarial basis, of the methods and criteria for determining the "economic contribution" to the production of business income or loss, deriving from the "direct" use of new intangible assets.
Earnings per share is calculated dividing the profit or loss attributable to the shareholders of the Parent Company by the weighted average ordinary shares in circulation during the period.
The diluted earnings per share is calculated dividing the profit or loss attributable to the shareholders of the Parent Company by the average weighted number of shares outstanding, taking into account the effects of all the potential ordinary shares with dilution effects. In 2021, there were no diluting effects on the shares.
The Group may be involved in legal and tax disputes, concerning specific issues and in various jurisdictions. Considering the uncertainties relating to these issues, it is difficult to predict with certainty any future payments required. In addition, the Group has instigated legal action for the protection of its Trademarks, and of its products, against counterfeit products. The cases and disputes against the Group often derive from complex legal issues, which are often subject to varying degrees of uncertainty, including the facts and circumstances relating to each case, jurisprudence and different applicable laws.
In the normal course of business, Management consults with its legal consultants and experts on legal matters.
The Group accrues a liability against disputes when it considers it is probable that there will be a financial payment made and when the amount of the losses arising can be reasonably estimated.
The contingent liabilities are not recorded in the financial statements, but are reported as a disclosure in the Notes (Note 53) unless the probability of payment is remote. In accordance with paragraph 10 of IAS 37 – Provisions, contingent liabilities and contingent assets a contingent liability is (a) a possible obligation which derives from past events and whose existence will be confirmed only on the occurrence or otherwise of one or more future uncertain events, not entirely under the control of the enterprise, or (b) a current obligation which derives from past events but which cannot be recorded in the financial statements as the payment is improbable or cannot be reliably estimated.
The preparation of the financial statements and the relative notes in application of IFRS require that management make estimates and assumptions on the values of the assets and liabilities in the financial statements and on the information relating to the assets and contingent liabilities at the balance sheet date. The actual results may differ from such estimates.
Estimates are utilised to measure intangible and tangible assets subject to impairment tests, in addition to recognise provisions on doubtful debts, inventory obsolescence, amortisation and depreciation, the writedown of assets, employee benefits and income taxes.
The estimates and assumptions are reviewed periodically and the effects of all variations are immediately recognised in the income statement.
An intangible asset is a non-monetary asset, identifiable and without physical substance, controllable and capable of generating future economic benefits. Intangible assets are recognised at purchase and/or production cost, including the costs of bringing the asset to its current use net of accumulated amortisation and any loss in value. Amortisation begins when the asset is available for use and is recognised on a straight-line basis over the residual estimated useful life of the asset.
Software acquired and IT programmes developed internally are amortised over five years, while the costs incurred to maintain or upgrade the original operational standard are expensed in the year and are not capitalised.
The brands Kappa, Robe di Kappa, Superga, K-Way, Briko and Sebago are considered intangible assets with indefinite useful life; as such these assets are not amortised but subject to an impairment test at least annually.
The brands Sabelt, included in the value of the relative investment, and Jesus Jeans, which have not yet reached a position similar to those of the principal brands, are amortised over a period of 20 years.
The patent rights are amortised over ten years.
Other intangible assets mainly consist of leasehold improvements and are amortised on the basis of the relevant lease contract.
In the case of business combinations, the assets, the liabilities and the contingent liabilities acquired and identifiable are recorded at their fair value at the date of acquisition. The positive difference between the acquisition cost and the portion held by the Group of the present value of the assets and liabilities is classified as goodwill and recorded in the financial statements as an intangible asset. Any negative difference ("negative goodwill") is recognised in the income statement at the date of acquisition.
Goodwill is not amortised, but is subject annually, or more frequently if specific events or circumstances indicate the possibility of having incurred an impairment, to verifications of any reduction in value, as provided by IAS 36 Reduction in value of assets. After initial recognition, goodwill is measured at cost less any loss in value. The impairment of goodwill may not be written back.
This category includes the amounts paid by the Group to sub-enter into the contractual positions of directly managed and franchising stores (key money). This commercial goodwill, where related to commercial positions of value, is recognised to the consolidated financial statements as an intangible asset with indefinite useful life, and subject to an impairment test at least once a year, or more frequently in the presence of impairment indicators, comparing the book value with the higher between the value in use and the fair value less selling costs, with this latter also determined in view of valuations made by independent experts. Commercial goodwill relating to other positions is amortised over the duration of the relative rental contract.
Property, plant and equipment are recorded at purchase or production costs, including accessory charges and direct and indirect costs, for the amount reasonably attributable to the assets.
Subsequent expenditures are only capitalised where they increase the future economic benefits of the asset to which they relate. All other costs are expensed as incurred.
| Description | Estimated useful life years |
|---|---|
| Property | 33 |
| Plant & machinery |
8 |
| Furniture and furnishings |
3-8 |
| Motor vehicles | 4 |
| EDP | 3-8 |
Property, plant and equipment are amortised on a straight-line basis over the estimated useful life of each asset. The depreciation rates by asset category are shown below:
Fixed assets which at the balance sheet date are lower than the book value are recorded at this lower value, which however may not be maintained at this value in subsequent periods if the reasons for the adjustment no longer exist.
Ordinary maintenance costs are fully charged to the income statement.
Advances and costs for property, plant and equipment in progress which are not yet utilised in the operating activities are reported separately.
The historic value of land is not depreciated.
The Group recognises the usage right assets at the initial leasing date (i.e. the date on which the underlying asset is available for use). The usage right assets are measured at cost, net of accumulated amortisation and impairments, adjusted for any remeasurement of the lease liabilities.
The cost of the usage right assets includes the amount of the lease liabilities recognised, the initial direct costs incurred and the payment of leases at the commencement date or before, net of any incentives received. Unless the Group does not have the reasonable certainty of obtaining ownership of the leased asset on conclusion of the leasing contract, the usage right assets are amortised on a straight-line basis for a period covering the lesser between the estimated useful life and the lease duration. Right-of-use assets are subject to impairment.
At the lease commencement date, the Group recognises the lease liabilities measuring them at the present value of the payments due for the lease not yet settled at that date. The payments due include the fixed payments (including the fixed payments in substance), net of any lease incentives to be received, the variable lease payments which depend on an index or a rate and the amounts expected to be paid as guarantee on the residual value. The lease payments include also the exercise price of a purchase option where it is reasonably certain that this option shall be exercised by the Group and the lease termination penalty payments, where its duration takes account of the exercise by the Group of the termination option on the lease.
The variable lease payments not depending on an index or a rate are recognised as costs in the period in which the event or the condition generating the payment occurs. In calculating the present value of the payments due, the Group uses the marginal loan rate at the commencement date where the implied interest rate may not be easily determined.
After the commencement date, the amount of the lease liability increases to take account of the interest on the lease liabilities and reduces to consider the payments made. In addition, the carrying amount of the lease payables is restated in the case of any changes to the lease or a review of the contractual terms with regards to the change in the fixed payments in substance; it is in addition restated amid changes to the valuation of the acquisition of the underlying asset.
The Group applies the exception for the recognition of short-term leases for machinery and equipment (i.e. leasing with a duration of 12 months or less from the commencement date and not containing a purchase option). The Group has also applied the exception for leases concerning assets of a modest value with regards to the leasing contracts on office equipment whose value is considered low (i.e. below Euro 5,000).
The short-term lease charges and those for low value assets are recognised as costs on a straight-line basis over the lease duration.
The carrying value of the assets of the Group are measured at each reporting date to determine whether there has been a loss in value, in which case an estimate is made of the recoverable value of the asset. A loss in value (impairment) is recorded in the income statement when the carrying value of an asset or a cash-generating unit exceeds its recoverable value.
The indefinite intangible assets (including goodwill) are tested annually and whenever there is an indication of a possible loss, in order to determine whether a loss in value has occurred.
The Group's principal objective is the growth in value of its own brands, managed within a portfolio, with the distribution of the associated products through a global network of licensee producers and distributors.
Within this business model, for the purposes of the impairment test of the BasicNet Group at consolidated level, the CGU's were identified as the brands of the company.
The impairment test was carried out comparing the book value of the net assets of each CGU with their recoverable value, defined as the higher between their value in use and the fair value less selling costs.
The value in use is determined discounting to the WACC the cash flows generated from each CGU. This latter are identified with the first level gross operating margin, less investments in fixed assets and notional taxes, generated by each brand through royalties, sourcing commissions and direct sales. The changes in working capital are not included in these cash flows, in line with the underlying carrying amount and the assumption that these changes approximate zero.
The operating costs are allocated to the related CGU or divided based on determined and certain criteria. The costs not specifically allocated, or whose division based on analytic criteria does not reflect the effective period of use, are tested at Group level.
For the years beyond the Plan a terminal value is estimated applying the perpetual yield model to the cash flows of the final year. The growth rate utilised in the calculation of the terminal value, in accordance with the provisions of paragraph 36 of IAS 36, reflect the growth trend for the demand of clothing goods (i.e. clothes and footwear) at international level. In line with the most common valuation practices adopted, in the calculation of the terminal value the changes in the net working capital are assumed as zero and the investments equal to depreciation.
The BasicNet Group, on completion of the tests described above, carries out a second level test in relation to the presence of permanent loss in value on the totality of the consolidated assets.
This loss is restated if the elements that generated the loss no longer exist. The recoverable value is recorded in the income statement adjusting the book value of the asset to its recoverable value. This latter must not be above the value which would have been determined, net of depreciation, if no loss in value of the asset had been recorded in previous years.
Investments in associates and joint ventures are measured under the equity method. The share of cost exceeding the net equity of the investee at the acquisition date is treated in a similar manner as that described for the consolidation criteria.
The non consolidated investments other than associates and joint ventures, non-listed, are measured under the cost method less any losses in value, as their fair value may not be reliably determined. The original value is restored in future years should the reason for the write-down no longer exist.
Financial assets consist of loans are recorded at their estimated realisable value.
Inventories are measured at the lower of purchase or production cost and their net realisable value. The cost is calculated using the weighed average cost method.
Inventories include incidental charges and direct and indirect costs that can be reasonably allocated. Obsolete and slow-moving inventories are written down in relation to their possible utilisation or realisable value.
Receivables recorded under current assets are stated at their nominal value, which substantially coincides with the amortised cost. The initial value is subsequently adjusted to take account of any write-downs, which reflects the bad debt estimate. The Group applies the simplified approach to calculating expected losses, fully recognising the expected loss at the reporting date according to historic information supplemented by forward looking considerations. Medium/long-term receivables which include an implicit interest component are discounted utilising an appropriate market rate. Receivables transferred without recourse, in which all the risks and benefits are substantially transferred by the owner of the financial assets to the factoring company, are reversed in the financial statements at their nominal value.
The liquid assets principally relate to current bank accounts and cash. They are recorded for amounts effectively available at year end.
The cash equivalents are invested in highly liquid temporary financial instruments.
The account includes amounts related to two accounting periods, in accordance with the accruals concept.
Treasury shares are recognised as a deduction from equity. The original cost of the treasury shares and the revenues deriving from any subsequent sale are recognised as equity movements.
Provisions for risks and charges are recorded in the balance sheet only when a legal or implicit obligation exists deriving from a past event that determines the commitment of resources to produce economic benefits for their compliance and a reliable estimate of the amount can be determined.
The Post-Employment Benefit in accordance with Italian legislation is quantified as a defined benefit plan and is measured in accordance with the "Projected Unit Credit Method".
From January 1, 2007, this liability refers exclusively to the portion of the Post-Employment Benefit, matured up to December 31, 2006, which following the complementary pension reform (Legislative Decree No. 252 of December 5, 2005) continues to constitute an obligation of the company. Following the entry into force of the above-mentioned reform as enacted by Law No. 296 of December 27, 2006 (2007 Finance Law), the liability, as concerning services already completely matured, was restated without applying the pro-rata of the employment service and without considering, in the actuarial calculation, the components relating to future salary increases.
On June 16, 2011, the IASB issued an amendment to IAS 19 Employee Benefits. The new version of IAS 19 requires, in particular, for post-employment benefits, the recognition of the changes of the actuarial gains/losses under other items of the Comprehensive Income Statement.
The cost relating to employment services for the companies of the Group with less than 50 employees, as well as the interest on the "time value" component in the actuarial calculations will remain in the profit and loss account.
The portion of the Post-Employment Benefit paid to a supplementary pension fund is considered a defined contribution plan as the obligation of the company towards the employee ceases with the payment of the amount matured to the funds. Also the portion of the Post-Employment Benefit paid to the INPS Treasury fund is recorded as a defined contribution plan.
Financial payables are recorded at their amortised cost. The book value of the trade and other payables, recognised at nominal value which approximates the amortised cost, at the balance sheet date approximates their fair value.
The BasicNet Group utilises financial instruments to hedge interest rates on some loans and to hedge against fluctuations in the Euro/USD exchange rates on the purchases of products for sale, not adequately hedged by royalties and sourcing commission income.
These instruments are initially recorded at their fair value, and subsequently measured according to whether they are "hedged" or "not hedged" as per IFRS 9.
It is recalled that the BasicNet Group does not undertake derivative contracts for speculative purposes.
The hedging may be of two types:
The BasicNet Group, before signing a hedge contract, undertakes a close examination of the relationship between the hedge instrument and the item hedged, in view of the objectives to reduce the risk, also evaluating the existence and the continuation over the life of the financial instrument of the effectiveness requirements, necessary for the hedge accounting.
After their initial recognition, they are accounted as follows:
a) Fair value hedges
The changes in their fair value are recognised in the income statement, together with the changes in the fair value of the relative assets and liabilities hedged.
b) Cash flow hedges
The part of the profit or loss of the hedge instrument, considered effective, is recorded directly in the comprehensive income statement; the non-effective part is however recorded immediately in the income statement.
The accumulated amounts in the comprehensive income statement are recorded in the income statement in the year in which the scheduled hedge operation matures or the instrument hedged is sold, or when the effectiveness requirements for hedge accounting no longer exist.
c) Derivative financial instruments which do not have the effectiveness requirements for hedge accounting
The derivative financial instruments which do not comply with the requirements of IFRS 9 for the identification of the hedge, where present, are classified in the category of financial assets and liabilities measured at fair value through the profit and loss account. The Group does not utilise financial instruments not for hedging purposes.
IFRS 7 requires that the classification of financial instruments measured at fair value is determined based on the quality of the input sources used in the valuation.
The IFRS 7 classification implies the following hierarchy:
The subsequent events to the end of the year and the outlook for the current year are reported in the Directors' Report.
In accordance with Article 1, paragraph 125 of Law 124/2017, the Group has not received any grants from public bodies in excess of Euro 10 thousand.
(IN EURO THOUSANDS UNLESS OTHERWISE STATED)
The BasicNet Group identifies two reporting segments, as outlined extensively in the Directors' Report:
It is recalled that during the year, the BasicNet Group launched a corporate reorganisation project, expected to conclude during the year, in order to concentrate in a single company all operations, both license management and of the direct sales channels, for the K-Way® brand: this operation shall facilitate a greater focus on the brand.
| December 31, 2021 | Clothing, footwear and accessories |
Property | Inter-segment eliminations |
Consolidated |
|---|---|---|---|---|
| Direct sales – third parties | 241,635 | - | - | 241,635 |
| (Cost of sales) | (143,628) | - | - | (143,628) |
| GROSS MARGIN | 98,007 | - | - | 98,007 |
| Royalties and sourcing commissions – third parties |
54,763 | - | - | 54,763 |
| Other income - third parties | 9,513 | 4,059 | (3,506) | 10,066 |
| (Sponsorship and media costs) | (36,236) | - | 5 | (36,231) |
| (Personnel costs) | (31,003) | (40) | (31,043) | |
| (Selling, general and administrative costs, royalties expenses) |
(49,970) | (2,286) | 943 | (51,312) |
| Amortisation & depreciation | (13,332) | (1,723) | 2,426 | (12,630) |
| EBIT | 31,742 | 10 | (132) | 31,620 |
| Financial income | 5,194 | - | - | 5,194 |
| (Financial charges) | (7,141) | (121) | 178 | (7085) |
| Share of profit/(loss) of investments | (6) | - | - | (6) |
| PROFIT BEFORE TAXES | 29,788 | (111) | 46 | 29,723 |
| Income taxes | (9,389) | (5) | - | (9,393) |
| NET PROFIT | 20,400 | (116) | 46 | 20,330 |
| Significant non-cash items: | ||||
| Income from right-of-use Amortisation & depreciation Write-downs |
546 (13,332) - |
- (1,723) - |
- 2,426 - |
546 (12,630) - |
| Total non-cash items | (12,786) | (1,723) | 2,426 | (12,083) |
| Segment assets and liabilities: | ||||
| Assets | 313,520 | 38,700 | (24,431) | 327,789 |
| Liabilities | 187,107 | 28,699 | (21,839) | 193,967 |
| December 31, 2020 | Clothing, footwear and accessories |
Property | Inter-segment eliminations |
Consolidated |
|---|---|---|---|---|
| Direct sales – third parties | 213,741 | 14 | - | 213,756 |
| (Cost of sales) | (127,120) | (6) | - | (127,125) |
| GROSS MARGIN | 86,621 | 9 | 86,631 | |
| Royalties and sourcing commissions – third parties |
45,975 | - | - | 45,975 |
| Other income - third parties | 7,831 | 3,775 | (3,115) | 8,490 |
| (Sponsorship and media costs) | (38,288) | - | 4 | (38,284) |
| (Personnel costs) | (28,856) | (37) | - | (28,893) |
| (Selling, general and administrative costs, royalties expenses) |
(52,765) | (2,224) | 898 | (54,092) |
| Amortisation & depreciation | (13,076) | (1,298) | 2,099 | (12,276) |
| EBIT | 7,441 | 225 | (115) | 7,551 |
| Financial income | 3,701 | (- | 206 | 4,086 |
| (Financial charges) | (5,417) | (197) | - | (5,793) |
| Share of profit/(loss) of investments | 933 | - | - | 933 |
| PROFIT BEFORE TAXES | 6,658 | 28 | 91 | 6,777 |
| Income taxes | 1,811 | (7) | - | 1,804 |
| NET PROFIT | 8,469 | 21 | 91 | 8,581 |
| Significant non-cash items: | ||||
| Income from right-of-use Proceeds from Kappa Europe put/call option Amortisation & depreciation Write-downs |
1,343 2,839 (13,076) - |
- - (1,298) - |
- - 2,099 - |
1,343 2,839 (12,276) - |
| Total non-cash items | (11,733) | (1,298) | 2,099 | (10,932) |
| Segment assets and liabilities: | ||||
| Assets | 310,881 | 36,252 | (25,106) | 322,027 |
| Liabilities | 199,065 | 26,200 | (22,515) | 202,750 |
The Group operating performance and therefore of the respective segments is outlined in detail in the Directors' Report. The segment performances may be summarised as follows:
The figures and results commented on in these Explanatory Notes were significantly and extensively impacted by the effects of the pandemic during the year. Key extraordinary and non-recurring items associated with Covid-19 are summarized below:
From a financial viewpoint, it should also be noted that the Group obtained the deferral of instalments due in 2020 on medium/long-term loans totalling Euro 3.9 million.
Lastly, Group companies have had access, with different timeframes and conditions, to subsidized loans with government guarantees as provided for in their respective countries as part of measures to counter the effects of Covid-19. In particular,
The breakdown of "consolidated direct sales" by geographic area is reported below:
| FY 2021 | FY 2020 | |
|---|---|---|
| Sales Italy |
152,964 | 134,666 |
| EU countries other than Italy |
73,287 | 74,112 |
| Rest of the World | 15,384 | 4,978 |
| Total consolidated direct sales | 241,635 | 213,756 |
Direct sales revenues relate to merchandise sold by BasicItalia S.p.A., BasicRetail S.r.l., K-WayRetail SUISSE S.A., K-Way-Retail S.r.l. and the subsidiaries of Kappa Europe S.a.s. through both the wholesale and retail channels (Euro 240.7 million) and BasicNet S.p.A. for sample merchandise sales (Euro 0.9 million). Sales on the home market accounted for 63.3%, while approx. 30.3% of sales were in other EU countries, with the remaining approx. 6.37% outside the EU. The subsidiaries of Kappa Europe S.a.s. operate in the territories of France, UK, Spain, Portugal and Switzerland.
The composition of revenues from direct sales by distribution channel is presented in the following table:
| FY 2021 | FY 2020 | |
|---|---|---|
| Multibrand sales | 188,238 | 160,873 |
| Franchising sales | 43,492 | 41,739 |
| Online sales | 8,963 | 9,851 |
| Sample sales | 942 | 1,293 |
| Total consolidated direct sales | 241,635 | 213,756 |
| FY 2021 | FY 2020 |
|
|---|---|---|
| Goods purchased – Overseas |
103,216 | 92,730 |
| Freight charges and accessory purchasing cost |
21,949 | 11,850 |
| Cost of outsourced logistics | 7,244 | 6,856 |
| Goods purchased – Italy |
6,303 | 5,395 |
| Samples purchased | 2,613 | 3,043 |
| Packaging | 944 | 869 |
| Change in inventory of raw materials, ancillary, consumables and goods |
(1,500) | 4,564 |
| Others | 2,798 | 1,818 |
| Total cost of sales | 143,628 | 127,125 |
"Goods purchased" refer to the finished products acquired by BasicItalia S.p.A., K-Way S.p.A and by the Kappa Europe Group. Sample purchases were made by BasicNet S.p.A. and K-Way S.p.A for resale to the licensees.
"Royalties and sourcing commissions" refer to royalty fees for the brand licenses in the countries where the licenses have been assigned, or recognised to authorised sourcing centres for the production and sale of group brand products by commercial licensees.
The changes in the year are commented upon in the Directors' Report.
| FY 2021 | FY 2020 | |
|---|---|---|
| Europe (EU and non-EU) | 22,111 | 18,340 |
| The Americas | 10,338 | 6,005 |
| Asia and Oceania |
17,510 | 17,953 |
| Middle East and Africa | 4,805 | 3,677 |
| Total | 54,763 | 45,975 |
| FY 2021 | FY 2020 | |
|---|---|---|
| Income for right-of-use | 546 | 1,343 |
| Income from promo sales | 521 | 796 |
| Rental income | 417 | 492 |
| Recovery of condominium expenses | 92 | 87 |
| Other income | 8,490 | 5,772 |
| Total other income | 10,066 | 8,490 |
"Income for right-of-use" refers to income from the reversal of payables for right-of-use following the renegotiation of store lease instalments.
The "recovery of condominium expenses" concerns the recharge to lessees of utility costs.
"Other income" includes prior year accruals' reversals, the recharge of expenses to third parties and other indemnities against counterfeiting and unauthorised usage protection actions.
| FY 2021 |
FY 2020 | |
|---|---|---|
| Sponsorship and marketing | 30,209 | 31,769 |
| Advertising | 4,604 | 5,466 |
| Promotional expenses | 1,418 | 1,049 |
| Total sponsorship and media costs | 36,231 | 38,284 |
The account "sponsorship" refers to communication investments incurred directly to which the Group contributes, described in detail in the Directors' Report. The decrease in the period is mainly attributable to the renegotiation of technical sponsorship contracts for the 2020/2021 sports season.
"Advertising" refers to billboard advertising and press communication campaigns.
Promotional expenses concern gifts of products and advertising material, not relating to specific sponsorship contracts.
| FY 2021 | FY 2020 | |
|---|---|---|
| Wages and salaries | 22,481 | 20,888 |
| Social security charges | 7,216 | 6,710 |
| Post-employment benefit |
1,346 | 1,295 |
| Total | 31,043 | 28,893 |
The number of employees at the reporting date, by category, is reported in the separate section in the Consolidated Non-Financial Declaration.
The average number of employees in 2021 was 876, broken down as 38 executives, 805 white-collar and 33 blue-collar employees.
The increase is mainly due to the personnel at the new sales points.
| FY 2021 |
FY 2020 | |
|---|---|---|
| Selling and royalty service expenses | 15,908 | 14,726 |
| Rental, accessory and utility expenses | 8,508 | 7,571 |
| Commercial expenses | 6,356 | 7,048 |
| Directors and Statutory Auditors emoluments | 4,203 | 4,798 |
| Doubtful debt provision | 3,254 | 7,815 |
| Professional consultants | 4,269 | 4,228 |
| Bank charges | 1,377 | 1,435 |
| Other general expenses | 7,437 | 6,471 |
| Total selling, general and administrative costs, and royalties expenses |
51,312 | 54,092 |
"Selling and royalty service expenses" mainly includes commissions to agents and transport costs to customers, whose increase is related to higher revenues; the item also includes royalties on sports team merchandising contracts and co-branding operations.
"Directors and Statutory Auditors emoluments", for offices held at the date of the present Report, approved by the Shareholders' AGM and the Board of Directors' meetings of April 19, 2019, are in line with the company remuneration policy, pursuant to Article 78 of Consob Regulation No. 11971/97 and subsequent amendments and integrations, and are reported in the Remuneration Report pursuant to Article 123-ter of the CFA, which is available on the company's website www.basicnet.com Shareholder' Meeting 2021 section, to which reference should be made.
The "doubtful debt provision" in the previous year included a higher accrual for certain positions, in addition to a specific item for the early termination of a commercial license, which was subsequently assigned to a new leading commercial partner.
"Other general expenses" includes other taxes, consumption materials, hire charges, and corporate and other minor expenses.
| FY 2021 | FY 2020 | |
|---|---|---|
| Intangible assets | 2,908 | 3,330 |
| Right-of-use | 5,594 | 5,155 |
| Property, plant and equipment | 4,127 | 3,791 |
| Total amortisation & depreciation |
12,630 | 12,276 |
Amortisation of intangible assets includes Euro 67 thousand of key-money write-down relating to some sales points for which the decision to close has been made, within a normal rotation of less profitable sales point in favour of the opening of new locations or more appropriate operational strategies.
The depreciation of right-of-use assets, essentially relating to the lease contracts for the Group's stores, has been reclassified from the account "Rental" included under general expenses on the adoption of IFRS 16.
| FY 2021 | FY 2020 | |
|---|---|---|
| Interest income | 3 | 68 |
| Bank interest charges | (70) | (189) |
| Interest on medium/long term loans | (658) | (603) |
| Property lease interest | (12) | (12) |
| Interest IFRS 16 |
(138) | (341) |
| Others | (896) | (559) |
| Total financial income and charges | (1,771) | (1,636) |
| Exchange gains | 3,542 | 3,620 |
| Exchange losses | (3,662) | (3,691) |
| Net exchange gains/(losses) | (120) | (71) |
| Total financial income/(charges) | (1,891) | (1,707) |
Net currency losses amounted to Euro 120 thousand, against losses of Euro 70 thousand in the previous year, as a result of US Dollar movements; net financial charges servicing the debt amounted to Euro 1.7 million compared to Euro 1.6 million in the previous year.
"Others" includes approximately Euro 369 thousand financial discounts and rebates mainly on the French and English markets.
The account reflects the effect on the consolidated result for the period of the valuation at equity of the joint venture Fashion S.r.l..
The balance of income taxes comprises current taxes for Euro 8.4 million (of which Euro 1.6 million for IRAP), the release of deferred taxes from previous years and the assessment of deferred taxes emerging in the year for Euro 1.6 million and Euro 1.5 million regarding the positive effects from the application of the "Patent Box", in addition to prior year taxes and other minor items for Euro 0.8 million.
Benefit from the application of the "Patent Box" rule for 2021 was used only by the parent company BasicNet and has only been taken into account in relation to the portion not subject to ruling by the Tax Authorities.
| 2021 | 2020 | |
|---|---|---|
| Profit before taxes | 29,723 | 6,777 |
| Income tax rate | 24% | 24% |
| Theoretical IRES | (7,134) | (1,626) |
| Effect of differences between Italian and foreign tax rates | 30 | 177 |
| Permanent tax differences effect | (475) | (138) |
| Prior year taxes | (336) | 200 |
| Alignment of Brand tax values (Article 110 of Law Decree No. 104/2020) |
- | 4,967 |
| Patent Box benefit | 1,482 | 962 |
| IRAP | (1,771) | (908) |
| Failure to record DTA on losses | (539) | (543) |
| WHT Reversal | (515) | (632) |
| Substitute taxes for alignment of Brand tax values (Article 110 of Law Decree No. 104/2020) |
- | (530) |
| Other changes | (136) | (125) |
| EFFECTIVE TAX CHARGE | (9,393) | 1,804 |
| Effective tax rate | -31.6% | 26.6% |
| Non-recurring tax charges | - | - |
| TOTAL EFFECTIVE TAX CHARGE | (9,393) | (1,804) |
The reconciliation between the theoretical and actual rate is shown below:
The basic earnings per share, for 2021, is calculated dividing the net result attributable to the shareholders of the Group by the weighted average number of ordinary shares outstanding during the year:
| (in Euro) | FY 2021 | FY 2020 |
|---|---|---|
| Net result | 20,329,502 | 8,580,521 |
| Weighted average number of ordinary shares |
51,275,602 | 52,493,602 |
| Basic earnings per ordinary share | 0.3965 | 0.1635 |
At December 31, 2021, there were no "potentially diluting" shares outstanding, therefore the diluted earnings per shares coincide with the earnings per share.
The change in the weighted average number of ordinary shares outstanding between 2021 and 2020 relates to the number of treasury shares acquired in the year.
(IN EURO THOUSANDS UNLESS OTHERWISE STATED)
| December 31, | December 31, | Change | |
|---|---|---|---|
| 2021 | 2020 | ||
| Concessions, brands and similar rights | 59,292 | 59,159 | 133 |
| Software development | 4,367 | 4,052 | 315 |
| Other intangible assets | 1,942 | 1,971 | (29) |
| Industrial patents | 147 | 198 | (51) |
| Total intangible assets | 65,748 | 65,380 | 368 |
The changes in the original costs of the intangible assets were as follows:
| Concessions, brands & similar rights |
Software development |
Other intangible assets |
Industrial patents |
Total | |
|---|---|---|---|---|---|
| Historic cost at 01.01.2020 |
58,896 | 45,396 | 10,689 | 775 | 115,756 |
| Additions | 12,355 | 2,273 | 430 | 112 | 15,170 |
| Disposals & other changes |
1 | - | - | - | 1 |
| Write-downs | - | - | - | - | - |
| Historic cost As at 31.12.2020 |
71,252 | 47,669 | 11,119 | 887 | 130,927 |
| Additions | 364 | 2,307 | 539 | 4 | 3,214 |
| Disposals & other changes |
- | - | (2) | (4) | (6) |
| Write-downs | - | - | - | - | - |
| Historic cost As at 31.12.2021 |
71,616 | 49,976 | 11,656 | 887 | 134,136 |
The changes in the relative accumulated depreciation provisions were as follows:
| Concessions, brands & similar rights |
Software development |
Other intangible assets |
Industrial patents |
Total | |
|---|---|---|---|---|---|
| Acc. Amort. at 01.01.2020 |
(11,881) | (41,665) | (8,402) | (624) | (62,571) |
| Amortisation | (212) | (1,952) | (746) | (65) | (2,975) |
| Disposals and other changes |
- | - | - | - | - |
| Acc. Amort. As at 31.12.2020 |
(12,093) | (43,616) | (9,148) | (689) | (65,546) |
| Amortisation | (230) | (1,993) | (566) | (52) | (2,841) |
| Disposals and | - | - | - | - | - |
other changes
| Acc. Amort. | |||||
|---|---|---|---|---|---|
| As at 31.12.2021 | (12,323) | (45,609) | (9,714) | (741) | (68,387) |
| Concessions, brands & similar rights |
Software development |
Other intangible assets |
Industrial patents |
Total | |
|---|---|---|---|---|---|
| Opening net book | |||||
| value at 01.01.2020 |
47,015 | 3,731 | 2,287 | 151 | 53,184 |
| Additions | 12,355 | 2,273 | 430 | 112 | 15,170 |
| Disposals and other changes |
1 | - | - | - | 1 |
| Amortisation | (212) | (1,952) | (746) | (65) | (2,975) |
| Write-downs | - | - | - | - | - |
| Closing net book value at |
|||||
| 31.12.2020 | 59,159 | 4,052 | 1,971 | 198 | 65,380 |
| Additions | 364 | 2,307 | 539 | 4 | 3,214 |
| Disposals and other changes |
- | - | (2) | (4) | (6) |
| Amortisation | (230) | (1,993) | (566) | (52) | (2,841) |
| Write-downs | - | - | - | - | - |
| Closing net book value at 31.12.2021 |
59,292 | 4,367 | 1,942 | 147 | 65,748 |
The net book value of intangible assets is reported below:
The increase in "concessions, brands and similar rights" is due to the capitalisation of costs incurred for the registration of trademarks in new countries, for renewals and extensions and for the purchase of software licenses. Amortisation in the period concerns the Jesus Jeans brand, amortised over 20 years, as not yet reaching a market positioning equal to that of the principal brands.
At December 31, 2021, the Kappa and Robe di Kappa brands report a book value of Euro 15.2 million, with the Superga brand reporting a book value of Euro 21.2 million; the K-Way brand was valued at Euro 9.4 million, the Sebago brand at Euro 12.1 million and the Briko brand at Euro 0.9 million. The Kappa, Robe di Kappa, Superga, K-Way, Briko and Sebago brands are considered intangible assets with indefinite useful life and as such are subject to an impairment test at least annually.
The book value of the Sabelt brand, for which the Group is worldwide licensee for the "fashion" classes, held through the two joint ventures, reflects the value of the investment.
At December 31, in application of the provisions of IAS 36 on impairment testing at least on an annual basis and identifying the effects on the global economy of the Covid-19 pandemic as an external impairment indicator, the Group has conducted all the checks on any permanent impairment of corporate brands and related CGU's.
For the purposes of the impairment test of the BasicNet Group at consolidated level, the CGU's were identified as the brands of the company.
The impairment test was carried out comparing the book value of the net assets of each CGU with their recoverable value, defined as the higher between their value in use and the fair value less selling costs.
The verification of the reduction in the loss in value (impairment test) of the indefinite useful life assets, among which brands and goodwill, allocated to each CGU was carried out comparing the carrying amount with the respective recoverable value. The recoverable value was determined discounting the expected net cash flows allocated to each CGU (value in use). The key assumptions utilised for the calculation principally refer to:
Following the impairment test no write-down is required of the book value of the brands or the goodwill. The value in use of the CGUs thus determined are significantly higher than their carrying amount: in particular, the sensitivity analyses carried out against this backdrop confirmed the full recoverability of the values even in the event of significant reductions in expected cash flows or a significant increase in discount rates. Similarly, the development of alternative scenarios involving a slippage in the recovery, reflecting the current degree of uncertainty about future economic prospects, also revealed the presence of significant headroom for all CGUs.
The account "software development" increased approx. Euro 2.3 million for investments and decreased Euro 2 million for amortisation in the year.
The account "other intangible assets" principally includes improvements related to the franchising project and recorded investments of Euro 0.5 million and amortisation of Euro 0.6 million.
The Group utilises the exceptions under the standard on leasing contracts which have a duration of equal to or less than 12 months and which do not contain a purchase option ("short-term leasing") and on leases whose underlying asset is of a low value ("low value asset").
The Group has applied the practical expenditures provided for lease reductions granted by landlords that are a direct result of the Covid-19 outbreak.
| December 31, 2021 |
December 31, 2020 |
Change | |
|---|---|---|---|
| Right-of-use | 23,119 | 22,082 | 1,037 |
| Total right-of-use | 23,119 | 22,082 | 1,037 |
The changes in the original cost of the right-of-use were as follows:
| 2021 | 2020 | |
|---|---|---|
| Historic cost at 01.01 |
46,060 | 39,330 |
| Investments and renovations | 7,538 | 12,802 |
| Disposals and other changes | (2,894) | (6,072) |
| Write-downs | - | - |
| Historic cost at 31.12. |
50,704 | 46,060 |
The changes in the relative accumulated depreciation provisions were as follows:
| 2021 | 2020 | |
|---|---|---|
| Acc. Deprec. at 01.01 |
(23,979) | (21,264) |
| Depreciation | (5,594) | (5,155) |
| Disposals and other changes | 1,987 | 2,440 |
| Acc. Deprec. at 31.12. |
(27,585) | (23,979) |
The movements in the net book value of the right-of-use is shown below:
| 2021 | 2020 | |
|---|---|---|
| Net book value at 01.01 |
22,082 | 18,066 |
| Investments and renovations | 7,538 | 12,802 |
| Disposals and other changes | (907) | (3,631) |
| Depreciation | (5,594) | (5,155) |
| Net book value at 31.12. |
23,119 | 22,082 |
| December 31, 2021 |
December 31, 2020 |
Change | |
|---|---|---|---|
| Goodwill | 11,840 | 11,907 | (67) |
| Goodwill | 11,840 | 11,907 | (67) |
The account "goodwill" includes the goodwill arising on the business combination with a Spanish licensee (totalling Euro 6.7 million) and the French licensee (Euro 1.2 million), goodwill for Euro 3.4 million following the acquisition of the French Group Kappa Europe, and goodwill paid for the acquisition of retail outlets, known as key money (Euro 0.5 million).
The Group verifies the recovery of the goodwill at least on an annual basis or more frequently when there is an indication of a loss in value. For the purposes of the impairment test the goodwill is allocated to the lowest cash-generating unit. See Note 21 on the checks carried out as at December 31, 2021.
| December 31, | December 31, | Change | |
|---|---|---|---|
| 2021 | 2020 | ||
| Property | 36,537 | 34,747 | 1,790 |
| Furniture and other assets | 8,029 | 8,242 | (213) |
| Plant & machinery | 787 | 789 | (2) |
| EDP | 1,752 | 1,690 | 62 |
| Industrial & commercial equipment | 171 | 222 | (51) |
| Total property, plant and equipment |
47,276 | 45,690 | 1,586 |
The changes in the historical cost of property, plant and equipment were as follows:
| Furniture and other |
Plant & | EDP | Industrial & commercial |
|||
|---|---|---|---|---|---|---|
| Property | assets | machinery | equipment | Total | ||
| Historic cost at 01.01.2020 |
37,383 | 22,590 | 2,636 | 15,812 | 1,194 | 79,615 |
| Additions | 1,476 | 1,447 | 280 | 741 | 57 | 4,001 |
| Disposals and other changes |
- | (126) | - | (85) | - | (211) |
| Change in consolidation scope |
13,795 | - | - | - | - | 13,795 |
| Historic cost As at 31.12.2020 |
52,654 | 23,908 | 2,916 | 16,471 | 1,251 | 97,200 |
| Additions | 3,217 | 1,405 | 289 | 956 | 22 | 5,889 |
| Disposals and other changes |
- | (418) | - | (149) | - | (567) |
| Historic cost As at 31.12.2021 |
55,871 | 24,895 | 3,205 | 17,278 | 1,273 | 102,522 |
| Property | Furniture and other assets |
Plant & machinery |
EDP | Industrial & commercial equipment |
Total | |
|---|---|---|---|---|---|---|
| Acc. Deprec. at 01.01.2020 |
(16,692) | (14,324) | (1,848) | (14,032) | (958) | (47,854) |
| Depreciation | (1,216) | (1,448) | (276) | (780) | (71) | (3,791) |
| Disposals and other changes |
- | 103 | (3) | 34 | - | 134 |
| Acc. Deprec. As at 31.12.2020 |
(17,908) | (15,669) | (2,127) | (14,778) | (1,029) | (51,511) |
| Depreciation | (1,427) | (1,483) | (291) | (858) | (72) | (4,131) |
| Disposals and other changes |
- | 283 | - | 113 | - | 396 |
| Acc. Deprec. As at 31.12.2021 |
(19,335) | (16,866) | (2,417) | (15,526) | (1,101) | (55,246) |
The changes in the relative accumulated depreciation provisions were as follows:
The net book value of property, plant and equipment was as follow:
| Furniture | Industrial & | |||||
|---|---|---|---|---|---|---|
| and other | Plant & | EDP | commercial | |||
| Property | assets | machinery | equipment | Total | ||
| Opening net book value |
||||||
| at 01.01.2020 | 20,691 | 8,266 | 788 | 1,780 | 236 | 31,761 |
| Additions | 1,476 | 1,447 | 280 | 741 | 57 | 4,001 |
| Depreciation | (1,216) | (1,448) | (276) | (780) | (71) | (3,791) |
| Disposals and other changes |
- | (22) | (3) | (51) | - | (76) |
| Change in consolidation scope |
13,795 | - | - | - | - | 13,795 |
| Closing net book | ||||||
| value | ||||||
| As at 31.12.2020 | 34,747 | 8,242 | 789 | 1,690 | 222 | 45,690 |
| Additions | 3,217 | 1,405 | 289 | 956 | 22 | 5,889 |
| Depreciation | (1,427) | (1,483) | (291) | (858) | (72) | (4,131) |
| Disposals and other changes |
- | (136) | - | (36) | - | (171) |
| Closing net book | ||||||
| value | ||||||
| As at 31.12.2021 | 36,537 | 8,029 | 787 | 1,752 | 171 | 47,276 |
"Property" includes the value of the buildings at Strada della Cebrosa 106, Turin, headquarters of BasicItalia S.p.A. and at Largo Maurizio Vitale 1, Turin, headquarters of the Parent Company, adjacent buildings owned by Basic Village S.p.A. acquired in late 2016, and the property complex at Via dell'Aprica, No. 12 in Milan, owned by Aprica Costruzione S.r.l, Milan, a company which was acquired in January 2020, and merged into Basic Village S.p.A. in July 2020.
Total gross investments in the year amounted to Euro 5.9 million, principally relating to the restructuring of the BasicVillage in Milan and acquisition of furniture and EDP for the opening of new stores.
| Net value at December 31, 2021 |
Net value at December 31, 2020 |
|
|---|---|---|
| Furniture and other assets | 1,248 | 1,410 |
| EDP | 121 | 105 |
| Plant | 12 | 15 |
| Transport vehicles | 46 | 86 |
| Total | 1,427 | 1,616 |
The net book value of property, plant and equipment acquired according to the finance lease formula is reported below:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Investments in: | |||
| Other companies - |
338 | - | 338 |
| Total investments | 338 | - | 338 |
| Other receivables, guarantees | 761 | 765 | (4) |
| Total financial receivables |
761 | 765 | (4) |
| Total investments & other financial assets |
1,099 | 765 | 334 |
"Other receivables, guarantees" principally refer to deposits on real estate property.
"Investments in other companies" concerns the investment acquired in December 2021 by BasicItalia S.p.A. in Cecilia S.r.l.
"Other receivables, guarantees" principally refer to deposits on real estate property.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Investments in: | |||
| - Joint ventures |
191 | 192 | (1) |
| Total investments in joint ventures |
191 | 192 | (1) |
Investments in joint ventures concern the value of the investment in Fashion S.r.l., held 50%. The company owns the Sabelt brand. From January 1, 2014, this category of investment has been valued at equity, as per IFRS 11.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Deferred tax assets | 7,737 | 3,419 | 4,318 |
| Total deferred tax assets | 7,737 | 3,419 | 4,318 |
Deferred tax assets and liabilities are calculated on all the temporary differences arising between the book value in the consolidated financial statements and their assessable amount for tax purposes.
The individual effects are reported in the table below:
| December 31, 2021 | December 31, 2020 | ||||||
|---|---|---|---|---|---|---|---|
| Amount | Amount | ||||||
| of | Rate | of temporary | |||||
| temporary differences |
% (*) |
Tax effect | differences | Rate % |
Tax effect | Change 2021/2020 |
|
| Deferred tax assets: | |||||||
| - Excess doubtful debt provision | |||||||
| not deductible | (15,270) | 23.95% | (3,658) | (12,327) | 24.01% | (2,960) | (698) |
| - Inventory obsolescence provision | (4,624) | 24.00% | (1,110) | (4,559) | 24.44% | (1,114) | 4 |
| - Prudent exchange differences, net | - | 24.00% | (941) | 24.00% | (226) | 226 | |
| - Misc. charges temporarily non-deductible |
(1,533) | 25.69% | (394) | (3,256) | 27.61% | (899) | 505 |
| - Effect IAS 19 – Employee Benefits | (680) | 24.53% | (167) | (574) | 24.57% | (141) | (26) |
| - Effect IFRS 16 - lease payables | (860) | 26.76% | (231) | (1,075) | 27.92% | (300) | 70 |
| - Effect IFRS 39 - financial instruments. |
- | 24.00% | - | (2,240) | 24.00% | (553) | 553 |
| Total | (22,968) | (5,559) | (24,972) | (6,193) | 634 | ||
| Deferred tax liabilities: - Prudent exchange differences, net |
747 | 24.00% | 179 | - | - | 179 | |
| - Amortisation/Depreciation tax basis - Statutory and fiscal differences on |
5,254 | 28.05% | 1,474 | 1,215 | 28.44% | 346 | 1,129 |
| depreciation and valuations | 13,990 | 28.07% | 3,927 | 14,774 | 28.06% | 4,145 | (218) |
| - Effect IAS 38 – plant costs | 18 | 27.90% | 5 | 17 | 27.90% | 5 | - |
| - Effect IFRS9 – financial instruments |
1,554 | 24.34% | 378 | - | % | - | 378 |
| - Effect IFRS 3 – goodwill amortisation |
2,264 | 27.90% | 632 | 2,105 | 27.95% | 588 | 43 |
| Total | 23,826 | 6,595 | 18,111 | 5,084 | 1,510 | ||
| Losses carried forward | (8,961) | 25.92% | (2,322) | (8,961) | 25.77% | (2,309) | (13) |
| Deferred tax liabilities (asset) net |
(7,959) | (1,287) | (15,822) | (3,418) | 2,133 | ||
| Of which: Deferred tax assets |
7,737 | 8,503 | (766) | ||||
| Deferred tax liabilities | 6,450 | 5,085 | 1,365 | ||||
(*) Average tax rate
Deferred tax assets are recorded considering probable their recovery based on future profit expectations, and principally relate to non-deductible doubtful debt provisions (approx. Euro 3.6 million), non-deductible inventory obsolescence provisions (approx. Euro 1.1 million), temporarily non-deductible charges (Euro 0.4 million) and the effects deriving from the application of IFRS 16 (Euro 0.3 million), in addition to Euro 2.3 million of unlimited tax losses carried forward by the Kappa Europe Group.
Deferred tax liabilities principally refer to the tax effects deriving from the application of the IFRS international accounting standards, with particular reference to the accounting of amortisation on own brands solely for tax purposes (Euro 1.5 million), differences between statutory and fiscal amortisation (Euro 3.9 million) and goodwill amortisation fiscally deductible (Euro 0.6 million).
Regarding the changes introduced by the Budget Law 2022 (Law 234/2021) with reference to the fiscal realignment of Brands, the Group will deduct the higher value on a straight-line basis over a period of 50 years.
| December 31, 2021 |
December 31, 2020 | Change | |
|---|---|---|---|
| Raw materials, ancillaries and consumables | 87 | 90 | (3) |
| Finished products and goods | 68,505 | 67,194 | 1,311 |
| Inventory obsolescence provision | (4,970) | (5,090) | 120 |
| Total net inventories |
63,622 | 62,194 | 1,428 |
Finished inventories include goods in transit at the balance sheet date which at December 31, 2021 amount to approx. Euro 13.6 million compared to Euro 3.2 million at December 31, 2020, goods held at Group brand stores for Euro 6.1 million, compared to Euro 8.2 million at December 31, 2020 and goods to be shipped against orders, to be delivered at the beginning of the following period, for Euro 3.9 million compared to Euro 6.9 million at December 31, 2020.
Inventories are valued under the weighted average cost method and net of the obsolescence provision considered reasonable for a prudent valuation of inventories, which recorded the following changes during the year:
| 2021 | 2020 | |
|---|---|---|
| Inventory obsolescence provision at 01.01 | 5,090 | 5,293 |
| Provisions in the year | 1,207 | 5,306 |
| Utilisations | (1,327) | (5,509) |
| Inventory obsolescence provision at 31.12 | 4,970 | 5,090 |
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Gross value Doubtful debt provision |
71,069 (17,949) |
68,977 (15,927) |
2,092 (2,022) |
| Total trade receivables | 53,120 | 53,050 | 70 |
"Trade receivables" refer for Euro 40.7 million to goods sold by proprietary licensees compared to Euro 47.5 million at December 31, 2020 against which a doubtful debt provision was recorded of Euro 8.7 million (Euro 8.6 million at December 31, 2020) and for Euro 29.8 million to royalties and sourcing commissions (Euro 21.3 million at December 31, 2020) against which a doubtful debt provision was recorded of Euro 9.2 million (Euro 7.3 million at December 31, 2020).
The receivables are recorded at their realisable value through a doubtful debt provision based on estimated losses on disputes and/or overdue receivables as well as a general provision.
The movements during the year were as follows:
| 2021 | 2020 | |
|---|---|---|
| Doubtful debt provision at 01.01 | 15,927 | 9,705 |
| Initial balance from acquisition | - | - |
| Provisions in the year | 3,254 | 7,815 |
| Utilisations | (1,232) | (1,593) |
| Doubtful debt provision at 31.12 | 17,949 | 15,927 |
The utilisations of the provision are related to the write off of long outstanding amounts and are made when the legal documentation of the loss has been received. Provisions are made based on an examination of individual credit positions and the calculation of expected losses based on statistical and parametric elements. Overdue receivables not written down are normally recovered in the period immediately after the maturity date and in any case are subject to specific risk evaluations.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Tax receivables | 7,856 | 7,520 | 336 |
| Other receivables | 3,383 | 2,743 | 640 |
| Total other current assets | 11,239 | 10,263 | 976 |
Current "tax receivables" principally relate to withholding taxes on royalties for Euro 4.5 million, VAT receivables for Euro 2.6 million, IRES and IRAP receivables of Euro 0.2 million, in addition to minor amounts.
"Other receivables" mainly includes advances to suppliers and sundry receivables. The account also includes the premium paid to the insurance company against Directors Termination Indemnities, to be paid to the Chairman of the Board of Directors, as approved by the Board of Directors on April 19, 2019, on the indication of the Shareholders' AGM and the proposal of the Remuneration Committee and with the favourable opinion of the Board of Statutory Auditors, on conclusion of his role for Euro 1.5 million.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Expenses pertaining to future collections | 4,096 | 4,663 | (567) |
| Sponsorship and media | 6,018 | 6,128 | (110) |
| Others | 2,540 | 2,642 | (102) |
| Total prepayments | 12,654 | 13,433 | (779) |
The "expenses pertaining to future collections" include the creative personnel costs, samples, merchandising costs and sales catalogues, relating to new Collections to be brought to the market, as well as presentations costs for the relative sales meetings.
The "sponsorship costs" relate to the annual amount contractually defined by the parties, which is partially invoiced in advance during the sports season, compared to the timing of the services.
The "other prepayments" include various costs for samples, services, utilities, insurance and other minor amounts incurred by the companies of the Group.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Bank and postal deposits |
28,425 | 33,565 | (5,141) |
| Cash in hand and similar |
123 | 87 | 36 |
| Total cash and cash equivalents |
28,548 | 33,652 | (5,105) |
"Bank deposits" refer to temporary current account balances principally due to receipts from clients. In particular, they are held at: BasicItalia S.p.A. (Euro 12.7 million), companies of the Kappa Europe Group (Euro 9 million), BasicRetail S.r.l. (Euro 0.6 million), BasicNet S.p.A. (Euro 1.4 million), Basic Properties America Inc. (Euro 2.8 million), K-Way S.p.A. (Euro 0.4 milion), K-WayRetail S.r.l. (Euro 0.6 million) and, for the difference, the other Group companies (Euro 0.8 million).
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Derivative financial instruments | 1,596 | - | 1,596 |
| Total | 1,596 | - | 1,596 |
Reference should be made to Note 46 below for further details.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Share capital | 31,717 | 31,717 | - |
| Treasury shares | (30,648) | (24,679) | (5,969) |
| Other reserves |
112,423 | 103,658 | 8,765 |
| Net Profit | 20,330 | 8,581 | 11,749 |
| Total Shareholders' Equity | 133,822 | 119,277 | 14,545 |
The "share capital" of the Parent Company, amounting to Euro 31,716,673.04, is divided into 60,993,602 ordinary shares of Euro 0.52 each, fully paid-in.
In May, as approved by the Shareholders' AGM of BasicNet S.p.A. of April 8, 2021, in relation to the allocation of the 2020 net profit, a dividend of Euro 0.06 per share was distributed to each of the ordinary shares in circulation, for a total pay-out of approx. Euro 3.1 million.
During the year 1,218,000 treasury shares were acquired in accordance with Shareholders' Meetings motions, which, together with the 8,500,000 shares held at the end of the previous year, totalled 9,718,000 at December 31, 2021 (15.93% of the Share Capital).
The account "other reserves" comprises:
the "IFRS16 reserve", which includes the effects of the first-time application of the standard, is negative for Euro 732 thousand;
The reconciliation at December 31, 2021 between the net equity and net result of the Parent Company and the net equity and consolidated net result of the Group is reported in the Directors' Report.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Effective part of the Gains/(losses) on cash flow instruments generated in the period (currency hedges) |
2,367 | (1,606) | 3,973 |
| Effective part of the Gains/(losses) on cash flow instruments generated in the period (interest rate hedges) |
1,426 | (752) | 2,178 |
| Effective part of the Gains/losses on cash flow hedge instruments |
3,793 | (2,358) | 6,151 |
| Re-measurement of defined benefit plans (IAS 19) (*) |
(108) | 6 | (114) |
| Gains/(losses) from translation of accounts of foreign subsidiaries |
628 | (785) | 1,413 |
| Tax effect relating to the Other items of the comprehensive income statement |
(905) | 582 | (1,487) |
| Total other gains/(losses), net of tax effect | 3,408 | (2,555) | 5,963 |
The other gains and losses recorded directly to equity in accordance with IAS 1 – Presentation of financial statements are reported below.
(*) items which may not be reclassified to the profit and loss account
The tax effect relating to Other gains/(losses) is as follows:
| December 31, 2021 | December 31, 2020 | |||||
|---|---|---|---|---|---|---|
| Gross value |
Tax Charge/ Benefit |
Net value |
Gross value |
Tax Charge/ Benefit |
Net value |
|
| Effective part of Gains/losses on cash flow hedge instruments |
3,793 | (931) | 2,862 | (2,341) | 584 | (1,757) |
| Gains/(losses) for re-measurement of defined benefit plans (IAS 19) (*) |
(108) | 26 | (82) | (11) | (2) | (13) |
| Gains/(losses) from translation of accounts of foreign subsidiaries |
628 | - | 628 | (785) | - | (785) |
| Total other gains/(losses), net of tax effect |
4,313 | (905) | 3,408 | (3,137) | 582 | (2,555) |
(*) items which may not be reclassified to the profit and loss account
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Provisions for risks and charges |
590 | 229 | 361 |
| Total provisions for risks and charges | 590 | 229 | 361 |
The provision for risks and charges relates to the Agents Termination Indemnity Provision (FIRR) in BasicItalia S.p.A. and K-Way S.p.A and restructuring provisions for minor companies of the Kappa Europe S.a.s. Group.
The changes in the loans during the year are shown below:
| 31/12/2020 | Repayments | New Loans | 31/12/2021 | Short-term portion |
Medium/long term portion |
|
|---|---|---|---|---|---|---|
| Unicredit property loan (Basic Village |
2,100 | (1,200) | - | 900 | 900 | - |
| Intesa mortgage loan (Cebrosa) | 1,323 | (407) | - | 916 | 407 | 509 |
| BNL loan | 3,125 | (1,250) | - | 1,875 | 1,250 | 625 |
| MPS loan (Sebago) | 11,375 | (3,250) | - | 8,125 | 3,250 | 4,875 |
| Banco BPM loan | 505 | (505) | - | - | - | - |
| Banco BPM Unsecured Loan (Kappa Japan brand) |
6,000 | - | - | 6,000 | 375 | 5,625 |
| Funding FCG L.662/96 (BasicNet) | 5,500 | - | - | 5,500 | 344 | 5,156 |
| Funding FCG L.662/96 (BasicItalia) |
5,500 | - | - | 5,500 | 344 | 5,156 |
| Funding FCG L.662/96 (K-WayRetail) |
5,500 | (275) | - | 5,225 | 1,100 | 4,125 |
| Financing FCG L.662/96 (Kappa Japan brand) |
5,500 | - | - | 5,500 | - | 5,500 |
| BPI KFF loan | 225 | (225) | - | - | - | - |
| BPI KE loan | 1,665 | (333) | - | 1,334 | 333 | 1,001 |
| UBS "Covid-19" subsidised loan | 289 | (289) | - | - | - | - |
| Abanca "Covid-19" subsidised loan | 200 | - | - | 200 | 33 | 167 |
| KSI "Covid-19" subsidised loan | 420 | - | - | 420 | 91 | 329 |
| Santander KSI loans | 43 | (26) | - | 17 | 17 | - |
| Banco Popular loan | 50 | (50) | - | - | - | - |
| Intesa KFF loan | 2,800 | (800) | - | 2,000 | 800 | 1,200 |
| Balance | 52,121 | (8,610) | - | 43,512 | 9,243 | 34,268 |
The maturity of the long-term portion of loans is highlighted below:
| December 31, 2021 December 31, 2020 | Change | ||
|---|---|---|---|
| Medium/long term loans: | |||
| - due within 5 years - due beyond 5 years |
34,268 - |
38,321 5,388 |
(4,053) (5,388) |
| Total medium/long-term loans | 34,268 | 43,709 | (9,441) |
| Finance lease payables | 515 | 678 | (162) |
| Total leasing payables (maturity within 5 years) |
515 | 678 | (162) |
| Total loans | 34,783 | 44,387 | (9,604) |
The "Basic Village Turin Unicredit property loan" granted by the Unicredit Group was for the acquisition of the building "Basic Village" at Largo M. Vitale 1, Turin. The loan was granted in September 2007 for Euro 18 million at a variable rate converted into a fixed rate (Note 46). Against this loan there is a mortgage on the property and a surety from the parent company BasicNet S.p.A. with maturity in September 2022.
The "Intesa Cebrosa Loan" granted by Banca Intesa Sanpaolo S.p.A. was for the purchase of the building "BasicItalia" at Strada Cebrosa 106, Turin. The loan was granted in October 2008 for Euro 6 million with repayment of the capital in quarterly constant instalments and maturity at September 2023. The loan is secured by a mortgage on the building and a guarantee from the parent company BasicNet S.p.A. In 2020, the loan was transferred to BasicVillage as part of the spin-off of BasicItalia's real estate business unit.
The "BNL Loan" was disbursed in November 2016 for Euro 7.5 million; it has six-year duration and is repayable in quarterly instalments at a quarterly Euribor rate increased by 95 basis points. The contractual conditions do not include financial covenants. The loan contract stipulates the maintenance of a number of ownership conditions concerning BasicNet S.p.A., in particular that the overall investment (direct or indirect) of BasicWorld S.r.l. in BasicNet S.p.A. should not reduce below 30%. The loan is supported by a second level mortgage on the BasicVillage building in Turin and a first level mortgage on the adjacent building, acquired at the end of the year.
The "MPS Loan" was issued in July 2017 for Euro 13 million and is of six-year duration, repayable in quarterly instalments from December 2019 at a quarterly Euribor rate (although not below zero) plus 170 basis points. No financial covenants are stipulated, although the maintenance of a number of ownership conditions are required concerning BasicNet S.p.A., in particular that the overall investment (direct or indirect) of BasicWorld S.r.l. in BasicNet S.p.A. should not reduce below 30%. The loan is supported by a pledge on the shares of TOS S.r.l., owner of the Sebago brand, with obligation to maintain the full investment in the company by the Group.
The "Banco BPM Loan" was disbursed in February 2017 to BasicItalia S.p.A. for Euro 2 million; it has four-year duration and is repayable in quarterly instalments at a quarterly Euribor rate increased by 70 basis points. It was repaid in full during the year.
The "BPM Banco Unsecured Loan" was issued in September 2020 for Euro 6 million and is of six-year duration, repayable in quarterly instalments from December 2022 at a quarterly Euribor rate plus 135 basis points (Note 46). The loan funded Basic Trademark's purchase of the Kappa Japan brand. No financial covenants are stipulated, although the maintenance of a number of ownership conditions are required concerning BasicNet S.p.A., in particular that the overall investment (direct or indirect) of BasicWorld S.r.l. in BasicNet S.p.A. should not reduce below 30%, in addition to the constraint of maintaining the Group's total shareholding in Basic Trademark.
For the loans disbursed in 2020 under the SMEs Guarantee Fund, the following should be noted:
BasicTrademark: BPM Banco Loan issued in October 2020 for Euro 5.5 million and is of six-year duration, repayable in quarterly instalments from January 2023 at a quarterly Euribor rate plus 125 basis points (Note 46). The contractual terms provide that the use of the relative liquidity is tied to the purchase of the Kappa Japan brand. The Fund's guarantee covers 90% of the amount disbursed;
The following medium-term loans of the Kappa Europe Group prior to the acquisition of control by BasicItalia are still outstanding:
The "Intesa KFF Loan" was disbursed in 2019 for Euro 3.6 million to Kappa France by the French branch of Banca Intesa Sanpaolo S.p.A. The unsecured loan is repayable over 5 years in half-yearly instalments, at a half-yearly Euribor rate increased by 185 basis points, converted into a fixed finished rate of 1.65%.
The terms of the unsecured loans granted to the Spanish and Swiss subsidiaries, individually of insignificant amounts, are generally in line with those of the Group's medium/long-term debt.
At December 31, 2021, the credit lines available from the banking system (bank overdrafts, commercial advances, medium/long-term loans, import financing, leasing and letters of credit), amount to Euro 297.7 million, broken down as follows:
| (in Euro millions) | December 31, 2021 | December 31, 2020 |
|---|---|---|
| Cash facility | 211.4 | 215.3 |
| Factoring | 14.2 | 14.2 |
| Letters of credit and swaps | 27.6 | 29.9 |
| Medium/long term loans | 43.5 | 54.2 |
| Property leases |
1.0 | 1.0 |
| Total | 297.7 | 314.5 |
The average interest paid for the BasicNet Group in the year is reported in Note 37.
| December 31, 2021 |
December 31, 2020 |
Change | |
|---|---|---|---|
| Bank payables due within one year: | |||
| - short-term portion of medium/long-term loans | 9,243 | 8,412 | 831 |
| - bank overdrafts and bills |
9,313 | 19,929 | (10,616) |
| - import advances | 12,910 | 19,989 | (7,079) |
| Total bank payables | 31,466 | 48,330 | (16,864) |
The portion of medium/long-term loans due within one year is included under short-term bank debt as described in Note 36.
The changes in the financial position are commented upon in the Directors' Report. Interest due matured at the end of the year on short and medium/long-term loans is reported in the account "bank payables".
Cash advances refer to temporary utilisation by the Parent Company BasicNet S.p.A., for Group treasury needs.
The financial debt by interest rate at December 31, 2021 is as follows:
| Interest Rate | |||
|---|---|---|---|
| Fixed | Variable | Total | |
| Short-term | 10,061 | 21,405 | 31,466 |
| Medium/long term | 11,809 | 22,974 | 34,783 |
| Total | 21,871 | 44,379 | 66,249 |
The average interest rate on medium/long term loans was 1.27%.
| December 31, 2021 | Change | ||
|---|---|---|---|
| Payables for rights-of-use | 24,041 | 23,097 | 944 |
| Total payables for right-of-use | 24,041 | 23,097 | 944 |
Payables for right-of-use are recognised from 2021 in accordance with IFRS 16. In the current year, new contracts worth Euro 7.7 million have been signed, and payables for Euro 5.1 million settled. Following rent concessions obtained from lessors as a result of the Covid-19 lockdown, the Group restated right-ofuse payables, reporting a reduction of Euro 0.5 million.
The account includes the post-employment benefits for employees of Euro 3.6 million and the termination indemnities of Directors of Euro 1.3 million.
| December 31, 2021 | December 31, 2020 | |||||
|---|---|---|---|---|---|---|
| Defined benefit plans |
Defined contrib. plans |
Total | Defined benefit plans |
Defined contrib. plans |
Total | |
| Change in the balance sheet: | ||||||
| Net liabilities recognized at begin. of year | 3,229 | - | 3,229 | 3,021 | 54 | 3,074 |
| Change in consolidation scope | - | - | - | - | - | - |
| Interest | 15 | - | 15 | 28 | - | 28 |
| Pension cost, net of withholdings | 367 | 965 | 1,332 | 380 | 924 | 1,304 |
| Benefits paid | (151) | - | (151) | (247) | - | (247) |
| Payments to the INPS treasury fund | - | (690) | (690) | - | (683) | (683) |
| Payments to other supp. pension fund | - | (275) | (275) | - | (241) | (241) |
| Actuarial gain/(losses) | 108 | - | 108 | (7) | - | (7) |
| Net liabilities recognised in the accounts | 3,568 | - | 3,568 | 3,175 | 54 | 3,229 |
| Change in the income statement: | ||||||
| Interest | 15 | - | 15 | 28 | - | 28 |
| Pension Cost | 367 | 965 | 1,332 | 380 | 924 | 1,304 |
| Total charges/(income) for post employment benefits |
383 | 965 | 1,348 | 408 | 924 | 1,332 |
The changes in the year of the post-employment benefit liability were as follows:
The account "defined benefit plans" includes the present value of the liabilities in the Italian companies of the Group towards employees in accordance with Article 2120 of the Civil Code. Based on the regulatory changes in 2007, the sums matured prior to January 1, 2007 to employees are recognised as defined benefit plans in accordance with IAS 19 – Employee benefits; those matured subsequent to this date are on the other hand recognised as defined contribution plans in accordance with the same standard.
Within the Group there are no other defined benefit plans.
The actuarial valuation of the Post-Employment Benefit is prepared based on the "matured benefits" method through the Projected Unit Credit Method in accordance with IAS 19. Under this method the valuation is based on the average present value of the pension obligations matured based on the employment service up to the time of the valuation, without projecting the remuneration of the employee in accordance with the regulatory modifications introduced by the Pension Reform.
The revaluations of the amounts at the option date for all of the companies and the benefits matured and not allocated to complementary pension schemes for businesses with less than 50 employees are recorded under post-employment benefit. In accordance with IAS 19, this provision was recorded as a "Defined benefit plans". The actuarial model for the measurement of the post-employment benefit is based on various assumptions of a demographic and financial nature.
The sensitivity analysis carried out on the basis of the following variables: 1) inflation rate +0.25%/- 0.25%, 2) discount rate +0.25%/-0.25%, 3) turnover rate +1%/-1% shows non-material impacts of less than Euro 89 thousand.
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| discount rate | 1.09% | 0.53% |
| inflation rate: | 1.75% | 0.80% |
| annual increase in post employment benefit |
2.81% | 2.10% |
| annual increase in salaries: | 1.00% | 1.00% |
The principal assumptions of the model concerning the actuarial valuations relating to personnel costs are:
The change in the annual discount rate reflects the decrease in the yields of the "corporate bonds" of the basket utilised (Iboxx Eurozone Corporate) at the balance sheet date.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Deferred tax liabilities | 6,451 | - | 6,451 |
| Total deferred tax liabilities | 6,451 | - | 6,451 |
Reference should be made to Note 47 above for further details.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Guarantee deposits Medium/long term tax payables |
1,368 - |
1,103 278 |
265 (278) |
| Total other non-current liabilities | 1,368 | 1,381 | (13) |
The "guarantee deposits" include the guarantees received from licensees, to cover the minimum royalties guaranteed contractually.
"Trade payables" are payable in the short-term and increased by approx. Euro 10.6 million compared to December 31, 2020, due to the increased procurement of goods during the last quarter compared to the same period of the previous year. At the date of these financial statements there are no initiatives for the suspension of supplies, payment injunctions or executive actions by creditors against BasicNet S.p.A. or other companies of the Group.
Trade payables are normally settled between 30 and 120 days. The book value of trade payables equates the relative fair value.
The breakdown of this account is shown in the following table:
| December 31, 2021 | December 31, 2020 | |||
|---|---|---|---|---|
| Tax payables: | ||||
| IRES | 5,059 | 2,862 | 2,197 | |
| Employee contributions | 530 | 440 | 89 | |
| Group VAT | 2,775 | 1,480 | 1,296 | |
| Others | 767 | 1,023 | (256) | |
| Total tax payables | 9,131 | 5,805 | 3,326 |
Current tax payables include provisions for IRES and IRAP to be settled at the reporting date.
Please refer to Note 41 for comments on non-current tax payables.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Accrued expenses | 827 | 744 | 83 |
| Payables to employees and directors | 3,995 | 4,332 | (337) |
| Other payables | 4,151 | 6,944 | (2,793) |
| Total other current liabilities | 8,973 | 12,020 | (3,047) |
The account "accrued expenses" principally includes deferred employee remuneration.
"Payables to employees and Directors" mainly concern salaries and expenses for reimbursement settled in the subsequent month.
"Other payables" at December 31, 2021 principally include social security charges (Euro 2.7 million), royalty payments on account from licensees (Euro 522 thousand) and other miscellaneous amounts (Euro 960 million).
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Royalties | 1,247 | - | 1,247 |
| Sponsored goods revenues | 3,733 | 4,418 | (685) |
| Other deferred income | 724 | 856 | (132) |
| Total deferred income | 5,703 | 5,274 | 429 |
The "sponsored goods revenues" relates to the invoicing of sponsored merchandise, which contractually partially refers to the period after the reporting date, with corresponding prepayments recorded under assets for sponsoring costs.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Derivative financial instruments | 42 | 2,240 | (2,198) |
| Total | 42 | 2,240 | (2,198) |
The account includes the market value at December 31, 2021 of the currency hedge instruments on US Dollars (cash flow hedge), subscribed with primary credit institutions; the instrument utilised, called flexi term, operates in the form of forward currency purchases on a portion of the estimated currency needs for the purchase of goods on foreign markets, to be made in 2022 and 2023, on the basis of the goods orders already sent to suppliers, or still to be made but included in the budget. At December 31, 2021, commitments were in place on estimated future purchases, for USD 33.2 million, broken down into 11 transactions with differing maturities: 7 transactions in the first half of 2022 (for USD 20.3 million), 4 transactions in the second half of 2022 (for USD 12.8 million) at variable exchange rates set between USD/Euro 1.113 and USD/Euro 1.230. A negative equity reserve was recorded of Euro 1.2 million, net of the tax effect. During 2021, forward purchase operations were utilised for approx. USD 42.4 million and the relative effects were recognised to the income statement.
In the case of the Interest Rate Swap (IRS) agreed by the Group, the specific hedge of the variable cash flow realised at market conditions, through the signing of the fix/flo IRS perfectly hedges the item to which the original cash flows stem, as in this case, and continues to be considered effective.
With reference to the guarantees and commitments of the Group with third parties reference should be made to Note 36.
We highlight:
During the year, the Group completed the internal reorganisation of K-Way's operations, with its concentration within the company: this initiative, which does not entail any change in the Group's ownership structure or equity structure, supports a better focus on the brand.
In particular, the project involved
These corporate transactions, which can be configured as transactions under common control, have had no impact on the financial statements under review. It should also be noted that all transactions were carried out under the tax neutrality regime, pursuant to the provisions of the Consolidated Law on Income Taxes in force.
The principal risks and uncertainties of the Group activities are described in the Directors' Report.
The financial instruments of the BasicNet Group include:
It is recalled that the Group only subscribes to cash flow hedges, to hedge against interest and currency risks.
In accordance with the requirements of IFRS 7 in relation to financial risks, the types of financial instruments present in the financial statements, with indication of the valuation criteria applied, are reported below:
| Financial instruments at fair value recorded through: |
Financial instruments at amortised cost |
Non-listed investments valued at cost |
Book value at 31.12.2021 |
||
|---|---|---|---|---|---|
| Income Statement | Shareholders ' Equity |
||||
| Assets: | |||||
| Equity invest. & other financial assets |
- | - | - | 1,099 | 1,099 |
| Interests in joint ventures | - | - | - | 191 | 191 |
| Cash and cash equivalents | - | - | 28,548 | - | 28,548 |
| Trade receivables | - | - | 63,622 | - | 63,622 |
| Other current assets | - | - | 11,239 | - | 11,239 |
| Derivative financial instruments | - | 1,596 | - | - | 1,596 |
| Liabilities: | |||||
| Medium/long-term loans | - | - | 31,466 | - | 31,466 |
| Bank payables | - | - | 34,783 | - | 34,783 |
| Trade payables | - | - | 66,517 | - | 66,517 |
| Other current liabilities | - | - | 8,973 | - | 8,973 |
| Derivative financial instruments | - | 42 | - | - | 42 |
The financial risk factors, identified in IFRS 7 – Financial instruments: additional disclosures, are described below:
The Group is exposed to the risk of fluctuations of commodity prices relating to raw materials (wool, cotton, rubber, synthetic fibre etc.) incorporated in the finished products which BasicItalia S.p.A. acquires on international markets, as well as fluctuations in the cost of oil which influences transport costs. The Group does not hedge these risks as not directly dealing with raw materials but only finished products and is exposed for the part of the increase which cannot be transferred to the final consumer if the market and competitive conditions do not permit such.
The BasicNet Group has subscribed the majority of its financial instruments in Euro which corresponds to its functional and presentation currency. Operating on the international market the group is also exposed to fluctuations in exchange rates, principally the US Dollar against the Euro.
At December 31, 2021, unrealised exchange gains were recorded of Euro 1.2 million, while unrealised exchange losses were recorded of Euro 0.7 thousand, for a net exchange gain of Euro 0.5 million.
At the reporting date, there were 11 hedge transactions on US Dollar fluctuations, totalling USD 33.2 million; the relative effects are illustrated in the account "Derivative financial instruments", in Note 46.
Group Management considers that the management and containment polices adopted for this risk are adequate.
All medium/long-term loans and leasing contracts are in Euro, therefore they are not subject to any currency risk.
The composition of the gross financial debt between fixed and variable interest rates at December 31, 2021 is shown below:
| December 31, 2021 | % | December 31, 2020 | % | |
|---|---|---|---|---|
| Fixed rate | 21,871 | 33.0% | 32,016 | 34.5% |
| Variable rate | 44,379 | 67.0% | 60,702 | 65.5% |
| Gross debt | 66,249 | 100.00% | 92,718 | 100.00% |
The interest rate fluctuation risks of some medium/term loans were hedged with conversion of the variable rate into fixed rates, as described in Note 46. On the remaining part of the debt, the Group is exposed to fluctuation risks.
Where at December 31, 2021 the interest rate on long/term loans at that date were 100 basis points higher (or lower) compared to the actual rates, there would be a higher financial charges (lower), before the tax effect, respectively of Euro +354 thousand and Euro -354 thousand.
The doubtful debt provision (Note 29) which includes provisions against specific credit positions and a general provision on an historical analysis of receivables, represents approx. 25.3% of trade receivables at December 31, 2021.
Liquidity risk is mitigated in the short-term period by the significant generation of cash realised by the "licenses and trademarks" segment, by the significant positive net working capital, and by the overall credit lines provided by the banking system (Note 36).
The table below illustrates the cash flow timing of payments on medium/long-term debt.
| Book value | Future interest income/(expe nse) |
Contractual cash flows |
Within 1 year | From 1 to 5 years |
Beyond 5 years |
|
|---|---|---|---|---|---|---|
| Unicredit BasicVillage | ||||||
| Turin mortgage | 900 | 27 | 927 | 927 | - | - |
| Intesa mortgage loan | ||||||
| (Cebrosa) | 916 | 29 | 945 | 424 | 521 | - |
| BNL loan | 1,875 | 6 | 1,881 | 1,255 | 626 | - |
| MPS (TOS) loan | 8,125 | 127 | 8,252 | 3,329 | 4,924 | - |
| Banco BPM unsecured loan | ||||||
| Kappa Japan brand | 6,000 | 278 | 6,278 | 72 | 5,075 | 1,132 |
| FGC 662/96 loan K | ||||||
| WayRetail | 5,225 | 126 | 5,351 | 1,146 | 4,205 | - |
| Banco BPM loan Kappa | ||||||
| Japan brand | 5,500 | 183 | 5,683 | 59 | 5,625 | - |
| FGC 662/96 loan BasicNet | ||||||
| 5,500 | 168 | 5,668 | 402 | 5,266 | - | |
| FGC 662/96 loan | ||||||
| BasicItalia | 5,500 | 154 | 5,654 | 388 | 5,266 | - |
| BPI KFF loan | ||||||
| BPI KE loan | 1,334 | 107 | 1,441 | 380 | 1,061 | - |
| Subsidised loan | ||||||
| "Covid 19" Abanca | 200 | 4 | 204 | 36 | 168 | - |
| Subsidised loan | ||||||
| "Covid 19" KSI | 420 | 19 | 439 | 99 | 339 | - |
| Santander KSI loan | ||||||
| 17 | - | 17 | 17 | - | - | |
| Intesa KFF loan | 2,000 | 50 | 2,050 | 830 | 1,220 | - |
| Lease payables | 515 | 13 | 528 | 289 | 239 | - |
| Right-of-use | 24,041 | 1,023 | 25,064 | 6,465 | 14,461 | 4,137 |
| Total financial liabilities | 68,069 | 2,314 | 70,383 | 16,120 | 48,995 | 5,269 |
The risk that the loans within the companies of the Group contain clauses (covenants) which allow the counterparties to request the creditor on the occurrence of certain events or circumstances the immediate repayment of the sums granted and not yet due, generating a liquidity risk.
The loans in place at the reporting date are not subject to financial covenants.
The transactions between the Parent Company and its subsidiaries and between the subsidiaries were within the normal operating activities of the Group and were concluded at normal market conditions. The balance sheet and income statement effects of the transactions are eliminated in the consolidation process. Based on the information received from the companies of the Group there were no atypical or unusual operations.
BasicNet S.p.A., and, as consolidated companies, BasicItalia S.p.A., K-Way S.p.A., BasicRetail S.r.l., K-WayRetail S.r.l.,, Basic Village S.p.A., Jesus Jeans S.r.l., Basic Trademark S.r.l., TOS S.r.l. and BasicAir S.r.l. have adhered to the national fiscal regime as per Article 177/129 of the CFA.
Kappa Europe S.A.S. and, as subsidiaries, Kappa France S.a.s., Sport Fashion Distribution S.A.S.U., SFD France S.A.S.U., Sport Fashion Licensing S.A.S.U. and Sport Fashion Retail S.A.R.L. are part of the French tax consolidation regime pursuant to Articles 223-A/223-U of the General Tax Code (CGI).
The transactions with related parties for the year ended December 31, 2021 are reported below:
| Investments | Trade receivables |
Trade Payables |
Other Income |
Costs | |
|---|---|---|---|---|---|
| Interests in joint ventures: - Fashion S.r.l. |
191 | - | - | - | - |
| Remuneration of Boards and Senior Executives and other related parties |
- | - | - | - | 6,760 |
The remuneration concerns emoluments and all other payments, pension-related or social security deriving from the role of Director or Statutory Auditor in BasicNet S.p.A. and the other companies within the consolidation scope.
In relation to the other related parties, we highlight the legal consulting activities undertaken by Studio Legale Pavesio e Associati and by Studio Legale Cappetti, of the Director Carlo Pavesio. These transactions, not material compared to the overall values, were at market conditions.
During the year, the entirety of the shares in Cecilia S.r.l., previously partially held by Marco Boglione e Figli S.r.l., a company that indirectly owns 33.128% of the share capital of BasicNet S.p.A., was acquired. This transaction, which is of minor significance for the purposes of the Related Parties Procedure, supported by an independent third party's appraisal, was approved by BasicNet S.p.A.'s Board of Directors.
The collections owned by BasicNet S.p.A., which are utilised for media events, shows, press gatherings together with the Brands and/or products of the Group, are subject to a put and call agreement with BasicWorld S.r.l.. The agreement is for a duration until July 31, 2023 and provides for an exercise price of the Call Option by BasicWorld equal to the cost incurred by BasicNet for the purchase of the Collection, as resulting from the accounting entries of BasicNet, in addition to a financial interest charge equal to the average rate applied to BasicNet at the exercise option date.
They are described in the Directors' Report.
Pursuant to Consob Communication DEM/6064293 of July 28, 2006, we report that there were no nonrecurring significant operations during the year.
The BasicNet Group is involved in some legal disputes of a commercial nature which are not expected to give rise to significant liabilities.
In the initial months of 2018, a tax dispute with the Tax Agency began, following the inspection by the Finance Police for the years 2012 to 2017 at BasicNet S.p.A.. In the tax assessment, the Agency alleges the partial non-deductibility of the Post-employment benefit provision accrual made for the Executive Boards for the years 2012 to 2015, on the basis of an interpretation of the rules governing Postemployment benefits for employees, in the total absence of specific tax rules. The Tax Agency is claiming approx. Euro 360 thousand for IRES, in addition to penalties and interest. Not agreeing with the Tax Agency's interpretation and noting also favourable jurisprudence in similar cases, the Company presented an appeal for all of the years subject to assessment. In March 2019, the Turin Provincial Tax Commission heard the appeal presented by BasicNet. The Tax Agency has appealed against the Tax Commission's decision. The hearing before the Regional Tax Commission held in September 2020 confirmed the Turin Provincial Tax Commission's verdict, finding in favour of BasicNet.
In April, the Supreme Court of Cassation notified BasicNet of the challenge made by the Tax Agency. The company was requested to respond in court and the date for the first hearing is awaited.
On December 28, 2018, a tax assessment was received from the Tax Agency by the subsidiary Basic Properties America, Inc., with registered and administration office in New York-USA, following checks on BasicNet by the Finance Police in 2017, on the basis of the alleged tax inversion claimed by the latter against the US subsidiary. The assessments initially concern financial years 2011, 2012 and 2013, alleging tax evasion in Italy for approx. Euro 3.6 million, in addition to interest and penalties. Tax assessments were also received by BasicTrademark S.A. and SupergaTrademark S.A. for the alleged evasion of VAT for approx. Euro 1 million, on the basis that the royalties paid by Basic Properties America, Inc., for tax purposes considered an Italian company, to these two companies should have been subject to VAT. In July 2019, similar tax assessments for financial year 2014 were received, with claims for additional taxes of approx. Euro 0.3 million and for VAT for approx. Euro 0.1 million.
As they did not consider the arguments put forward by the Agency to be well-founded, the companies lodged appeals against the tax assessments and requests for provisional suspension of the executive effects of the assessments. The Turin Provincial Tax Commission, which had already accepted the request for provisional suspension in October 2019, at the end of January 2020 fully accepted the combined appeals of Basic Properties America Inc., BasicTrademark S.A. (now S.r.l.) and Superga Trademark S.A. (now S.r.l. and subsequently incorporated with BasicTrademark S.r.l.) and cancelled the tax assessments issued by the Tax Agency.
In June 2020, the Tax Agency appealed against the Provincial Tax Commission's decision. The defence panel submitted their counter-arguments to the appeal: the first hearing at the Regional Tax Commission, initially scheduled for July 2021, has been postponed until a date to be decided.
In May and June 2021, assessment notices relating to 2015 were received, with further demands of approx. Euro 0.2 million for direct taxes and Euro 0.3 million for VAT: the companies prepared their respective appeals, as well as the requests for provisional suspension of the effects. Nonetheless, the collections unit of the tax administration took charge of the amounts demanded, issuing payment demands equal to one-third of the respective assessment notices.
The defence team is continuing talks with the offices concerned, and the next hearings, on the merits and for suspension, are set for March and May of this year.
In May, the Supreme Court of Cassation filed its judgement of inadmissibility of the appeal lodged by BasicItalia S.p.A. against the decision of the Bologna Court of Appeal ordering the revocation of payments made by Giacomelli Sport S.p.A. for a total of Euro 1.6 million.
The Group, whilst firmly convinced of its good faith and the correctness of its actions, as, moreover, initially asserted by the first-degree decision of the Court of Rimini, promptly initiated contacts with the lawyers of the third party assignee of the various bankruptcy arrangements of the Giacomelli procedures in order to settle the balance due. In October, following negotiations with the third party assignee, the amount due to settle the matter was determined, and payment was made for a total of Euro 1.0 million, net of the final instalment payable to BasicItalia (Euro 550 thousand).
Therefore, all matters concerning the Giacomelli Group procedures and related disputes have been settled.
For the Board of Directors
The Chairperson
Marco Daniele Boglione
| Type of service | Service provider | Company | Fees earned 2021 |
|---|---|---|---|
| Audit | EY S.p.A. | Parent BasicNet S.p.A. | 64,500 |
| Subsidiaries | 214,875 | ||
| Network EY | Subsidiaries | - | |
| Certification services | EY S.p.A. | Parent BasicNet S.p.A. | - |
| Subsidiaries | 3,000 | ||
| Other services | EY S.p.A. | Subsidiaries | 7,000 |
| Total | 289,375 |
| Registered Office |
Corporate purpose | Share capital | Parent company holding (%) |
||
|---|---|---|---|---|---|
| PARENT COMPANY | |||||
| BasicNet S.p.A. | |||||
| Directly held subsidiaries: | |||||
| - BasicAir S.r.l. single shareholder company |
Turin (Italy) | Company owning the Cessna Citation VII aircraft |
EURO | 3,000,000 | 100 |
| - BasicItalia S.p.A. single shareholder company |
Turin (Italy) | Italian licensor, direct stores of BasicNet Group. |
EURO | 7,650,000 | 100 |
| - Basic Trademark S.r.l. | Turin (Italy) | The Group's brand-owning company | EURO | 1,250,000 | 100 |
| - BasicVillage S.p.A. - single shareholder company |
Turin (Italy) | Management of the buildings at Turin - Largo M. Vitale, 1 and C.so Regio Parco, 43. |
EURO | 412,800 | 100 |
| - BasicNet Asia Ltd. | Hong Kong (China) | Control activity of the licensees and sourcing centre in Asia. |
HKD | 10,000 | 100 |
| - BasicNet Asia Company Limited |
Ho Chi Minh City (Vietnam) |
Control activity of the licensees and sourcing centre in Asia. |
DONG | 462,600,000 | 100 |
| - Jesus Jeans S.r.l. single shareholder company |
Turin (Italy) | Initially set up to manage the Jesus Jeans brand |
EURO | 10,000 | 100 |
| - K-Way S.p.A. single shareholder company |
Turin (Italy) | Company owning the K-Way brand and Licensee for the brand, direct points of sales for brand products to the public |
EURO | 10,050,000 | 100 |
| Indirectly held subsidiaries: | |||||
| - through Basic Trademark S.r.l. |
|||||
| - Basic Properties America, Inc. | Richmond (Virginia – USA) |
Sub-license of brands for the American market |
USD | 2,000 | 100 |
| - TOS S.r.l. single shareholder company |
Turin (Italy) | Owner of the brand Sebago. | EURO | 10,000 | 100 (1) |
| - through BasicItalia S.p.A. | |||||
| - BasicRetail S.r.l. single shareholder company |
Turin (Italy) | Management of outlets owned by the Group and a number of sales points. |
EURO | 10,000 | 100 |
| - Cecilia S.r.l. single shareholder company |
Turin (Italy) | Company welfare Company | EURO | 125,000 | 100 |
1) shares subject to a pledge with the Group required to maintain full ownership of the company, in guarantee of the loan issued by MPS Capital Services Banca per le Imprese S.p.A. in July 2017.
| Registered Office |
Corporate purpose |
Share capital | Parent company holding (%) |
||
|---|---|---|---|---|---|
| Indirect subsidiaries (continued): | |||||
| - through K-WAY S.p.A. | |||||
| - Kappa Europe SAS | Saint Herblain (France) | Holding company of a Group of Kappa | EURO | 3,926,400 | 61 |
| - K-WayRetail S.r.l. single shareholder company |
Turin (Italy) | brand licensees in European territories Management of outlets owned by the Group and a number of sales points. |
EURO | 10,000 | 100 |
| - K-WayRetail SUISSE S.A. (formerly BasicRetail SUISSE S.A.) |
Mendrisio (Switzerland) |
Operation of retail outlets in Switzerland | CHF | 100,000 | 100 |
| - through Kappa Europe SAS. | |||||
| - Kappa France .S.A.S | Saint Herblain (France) | Kappa licensees for the territories of France, Spain, Portugal and United Kingdom |
EURO | 2,060,000 | 100 |
| - Sport Fashion Distribution UK Ltd |
Manchester (United Kingdom) |
Manages the distribution of Kappa Europe Group products in United Kingdom |
GBP | 1 | 100 |
| - Sport Fashion Retail S.A.R.L. | Saint Herblain (France) | Company managing the outlet in Saint Herblain |
EURO | 5,000 | 100 |
| - Preppy Cotton S.A. | Reidermoos (Switzerland) |
Kappa licensee for Switzerland for the Kappa Europe Group |
EURO | 101,105 | 100 |
| - Textiles D'Artois S.A.R.L. | Haute Avesnes (France) | Company dedicated to sublimation projects on behalf of the Kappa Europe |
EURO | 3,000 | 100 |
| - Kappa Retail Monaco S.A.R.L. | Munich | Group licensees Company that manages the store in Monaco |
EURO | 15,000 | 100 |
| - through Kappa France SAS. | |||||
| - Kappa Sport Iberia S.L. | Madrid (Spain) | Sub-licensee for the Spanish and Portuguese territory |
EURO | 505,588 | 100 |
| Registered Office | Corporate purpose | Share capital | Share capital Holding (%) |
|||
|---|---|---|---|---|---|---|
| - through Basic Trademark S.r.l. | ||||||
| - Fashion S.r.l. | Turin (Italy) | Owner of the Sabelt brand under joint venture |
EURO | 100,000 | 50 (2) |
(2) the remaining 50% of the investment is held by the Marsiaj family
The undersigned Marco Daniele Boglione as Executive Chairman, Federico Trono as Chief Executive Officer and Paola Bruschi as Executive Officer for Financial Reporting of BasicNet S.p.A., affirm, and also in consideration of Article 154-bis, paragraphs 3 and 4, of Legislative Decree No. 58 of February 24, 1998:
the adequacy for company operations and the effective application, of the administrative and accounting procedures for the preparation of the 2021 consolidated financial statements.
In addition, we declare that the consolidated financial statements:
Marco Daniele Boglione Chairperson
Federico Trono Paola Bruschi Chief Executive Officer Executive Officer for
Financial Reporting
EY S.p.A. Via Meucci, 5 10121 Torino
Tel: +39 011 5161611 Fax: +39 011 5612554 ey.com
Agli Azionisti della BasicNet S.p.A.
Abbiamo svolto la revisione contabile del bilancio consolidato del Gruppo BasicNet (il Gruppo), costituito dalla situazione patrimoniale-finanziaria consolidata al 31 dicembre 2021, dal conto economico consolidato, dal conto economico complessivo consolidato, dal prospetto delle variazioni del patrimonio netto consolidato, dal rendiconto finanziario consolidato per l'esercizio chiuso a tale data e dalle note illustrative al bilancio consolidato che includono anche la sintesi dei più significativi principi contabili applicati.
A nostro giudizio, il bilancio consolidato fornisce una rappresentazione veritiera e corretta della situazione patrimoniale e finanziaria del Gruppo al 31 dicembre 2021, del risultato economico e dei flussi di cassa per l'esercizio chiuso a tale data, in conformità agli International Financial Reporting Standards adottati dall'Unione Europea, nonché ai provvedimenti emanati in attuazione dell'art. 9 del D. Lgs. 28 febbraio 2005, n. 38.
Abbiamo svolto la revisione contabile in conformità ai principi di revisione internazionali (ISA Italia). Le nostre responsabilità ai sensi di tali principi sono ulteriormente descritte nella sezione Responsabilità della società di revisione per la revisione contabile del bilancio consolidato della presente relazione. Siamo indipendenti rispetto alla BasicNet S.p.A. in conformità alle norme e ai principi in materia di etica e di indipendenza applicabili nell'ordinamento italiano alla revisione contabile del bilancio. Riteniamo di aver acquisito elementi probativi sufficienti ed appropriati su cui basare il nostro giudizio.
Gli aspetti chiave della revisione contabile sono quegli aspetti che, secondo il nostro giudizio professionale, sono stati maggiormente significativi nell'ambito della revisione contabile del bilancio consolidato dell'esercizio in esame. Tali aspetti sono stati da noi affrontati nell'ambito della revisione contabile e nella formazione del nostro giudizio sul bilancio consolidato nel suo complesso; pertanto su tali aspetti non esprimiamo un giudizio separato.
Abbiamo identificato il seguente aspetto chiave della revisione contabile:
| Aspetti chiave | Risposte di revisione |
|---|---|
| Valutazione dei marchi e dell'avviamento |
Il valore dei marchi al 31 dicembre 2021 è pari a € 59,3 milioni e l'avviamento alla medesima data ammonta a € 11,8 milioni. Le attività immateriali a vita utile indefinita sono state allocate alle Cash Generating Unit (CGU) del Gruppo relative ai Marchi aziendali.
I processi e le modalità di valutazione e determinazione del valore recuperabile di ciascuna CGU, in termini di valore d'uso, sono basati su assunzioni a volte complesse che per loro natura implicano il ricorso al giudizio degli amministratori, in particolare con riferimento alla previsione dei loro flussi di cassa futuri e alla determinazione dei tassi di crescita di lungo periodo e di attualizzazione applicati alle previsioni dei flussi di cassa futuri.
In considerazione del giudizio richiesto e della complessità delle assunzioni utilizzate nella stima del valore recuperabile dei marchi e dell'avviamento abbiamo ritenuto che tale tematica rappresenti un aspetto chiave della revisione.
L'informativa di bilancio relativa alla valutazione dei marchi e dell'avviamento è riportata nella nota 5. "Criteri di valutazione" e rispettivamente nella nota 21 "Attività immateriali" e nella nota 23 "Avviamento".
Le nostre procedure di revisione in risposta all'aspetto chiave hanno riguardato, tra l'altro:
Nelle nostre verifiche ci siamo anche avvalsi dell'ausilio di nostri esperti in tecniche di valutazione, che hanno eseguito un ricalcolo indipendente ed effettuato analisi di sensitività sulle assunzioni chiave, al fine di determinare i cambiamenti delle assunzioni che potrebbero impattare significativamente la valutazione del valore recuperabile.
Infine, abbiamo verificato l'adeguatezza dell'informativa fornita nelle note illustrative del bilancio in relazione alla valutazione dei marchi e dell'avviamento.
Gli amministratori sono responsabili per la redazione del bilancio consolidato che fornisca una rappresentazione veritiera e corretta in conformità agli International Financial Reporting Standards adottati dall'Unione Europea, nonché ai provvedimenti emanati in attuazione dell'art. 9 del D. Lgs. 28 febbraio 2005, n. 38 e, nei termini previsti dalla legge, per quella parte del controllo interno dagli stessi ritenuta necessaria per consentire la redazione di un bilancio che non contenga errori significativi dovuti a frodi o a comportamenti o eventi non intenzionali.
Gli amministratori sono responsabili per la valutazione della capacità del Gruppo di continuare ad operare come un'entità in funzionamento e, nella redazione del bilancio consolidato, per l'appropriatezza dell'utilizzo del presupposto della continuità aziendale, nonché per una adeguata informativa in materia. Gli amministratori utilizzano il presupposto della continuità aziendale nella redazione del bilancio consolidato a meno che abbiano valutato che sussistono le condizioni per la liquidazione della capogruppo BasicNet S.p.A. o per l'interruzione dell'attività o non abbiano alternative realistiche a tali scelte.
Il collegio sindacale ha la responsabilità della vigilanza, nei termini previsti dalla legge, sul processo di predisposizione dell'informativa finanziaria del Gruppo.
I nostri obiettivi sono l'acquisizione di una ragionevole sicurezza che il bilancio consolidato nel suo complesso non contenga errori significativi, dovuti a frodi o a comportamenti o eventi non intenzionali, e l'emissione di una relazione di revisione che includa il nostro giudizio. Per ragionevole sicurezza si intende un livello elevato di sicurezza che, tuttavia, non fornisce la garanzia che una revisione contabile svolta in conformità ai principi di revisione internazionali (ISA Italia) individui sempre un errore significativo, qualora esistente. Gli errori possono derivare da frodi o da comportamenti o eventi non intenzionali e sono considerati significativi qualora ci si possa ragionevolmente attendere che essi, singolarmente o nel loro insieme, siano in grado di influenzare le decisioni economiche degli utilizzatori prese sulla base del bilancio consolidato.
Nell'ambito della revisione contabile svolta in conformità ai principi di revisione internazionali (ISA Italia), abbiamo esercitato il giudizio professionale e abbiamo mantenuto lo scetticismo professionale per tutta la durata della revisione contabile. Inoltre:
siamo giunti ad una conclusione sull'appropriatezza dell'utilizzo da parte degli amministratori del presupposto della continuità aziendale e, in base agli elementi probativi acquisiti, sull'eventuale esistenza di una incertezza significativa riguardo a eventi o circostanze che possono far sorgere dubbi significativi sulla capacità del Gruppo di continuare ad operare come un'entità in funzionamento. In presenza di un'incertezza significativa, siamo tenuti a richiamare l'attenzione nella relazione di revisione sulla relativa informativa di bilancio ovvero, qualora tale informativa sia inadeguata, a riflettere tale circostanza nella formulazione del nostro giudizio. Le nostre conclusioni sono basate sugli elementi probativi acquisiti fino alla data della presente relazione. Tuttavia, eventi o circostanze successivi possono comportare che il Gruppo cessi di operare come un'entità in funzionamento;
abbiamo valutato la presentazione, la struttura e il contenuto del bilancio consolidato nel suo complesso, inclusa l'informativa, e se il bilancio consolidato rappresenti le operazioni e gli eventi sottostanti in modo da fornire una corretta rappresentazione;
Abbiamo comunicato ai responsabili delle attività di governance, identificati ad un livello appropriato come richiesto dai principi di revisione internazionali (ISA Italia), tra gli altri aspetti, la portata e la tempistica pianificate per la revisione contabile e i risultati significativi emersi, incluse le eventuali carenze significative nel controllo interno identificate nel corso della revisione contabile.
Abbiamo fornito ai responsabili delle attività di governance anche una dichiarazione sul fatto che abbiamo rispettato le norme e i principi in materia di etica e di indipendenza applicabili nell'ordinamento italiano e abbiamo comunicato loro ogni situazione che possa ragionevolmente avere un effetto sulla nostra indipendenza e, ove applicabile, le relative misure di salvaguardia.
Tra gli aspetti comunicati ai responsabili delle attività di governance, abbiamo identificato quelli che sono stati più rilevanti nell'ambito della revisione contabile del bilancio dell'esercizio in esame, che hanno costituito quindi gli aspetti chiave della revisione. Abbiamo descritto tali aspetti nella relazione di revisione.
L'assemblea degli azionisti della BasicNet S.p.A. ci ha conferito in data 27 aprile 2017 l'incarico di revisione legale del bilancio d'esercizio e consolidato della Società per gli esercizi con chiusura dal 31 dicembre 2017 al 31 dicembre 2025.
Dichiariamo che non sono stati prestati servizi diversi dalla revisione contabile vietati ai sensi dell'art. 5, par. 1, del Regolamento (UE) n. 537/2014 e che siamo rimasti indipendenti rispetto alla Società nell'esecuzione della revisione legale.
Confermiamo che il giudizio sul bilancio consolidato espresso nella presente relazione è in linea con quanto indicato nella relazione aggiuntiva destinata al collegio sindacale, nella sua funzione di comitato per il controllo interno e la revisione contabile, predisposta ai sensi dell'art. 11 del citato Regolamento.
Gli amministratori della BasicNet S.p.A. sono responsabili per l'applicazione delle disposizioni del Regolamento Delegato (UE) 2019/815 della Commissione Europea in materia di norme tecniche di regolamentazione relative alla specificazione del formato elettronico unico di comunicazione (ESEF – European Single Electronic Format) (nel seguito "Regolamento Delegato") al bilancio consolidato, da includere nella relazione finanziaria annuale.
Abbiamo svolto le procedure indicate nel principio di revisione (SA Italia) n. 700B al fine di esprimere un giudizio sulla conformità del bilancio consolidato alle disposizioni del Regolamento Delegato. A nostro giudizio, il bilancio consolidato è stato predisposto nel formato XHTML ed è stato marcato, in tutti gli aspetti significativi, in conformità alle disposizioni del Regolamento Delegato.
Giudizio ai sensi dell'art. 14, comma 2, lettera e), del D. Lgs. 27 gennaio 2010, n. 39 e dell'art. 123-bis, comma 4, del D. Lgs. 24 febbraio 1998, n. 58
Gli amministratori della BasicNet S.p.A. sono responsabili per la predisposizione della relazione sulla gestione e della relazione sul governo societario e gli assetti proprietari del Gruppo BasicNet al 31 dicembre 2021, incluse la loro coerenza con il relativo bilancio consolidato e la loro conformità alle norme di legge.
Abbiamo svolto le procedure indicate nel principio di revisione (SA Italia) n. 720B al fine di esprimere un giudizio sulla coerenza della relazione sulla gestione e di alcune specifiche informazioni contenute nella relazione sul governo societario e gli assetti proprietari indicate nell'art. 123-bis, comma 4, del D. Lgs. 24 febbraio 1998, n. 58, con il bilancio consolidato del Gruppo BasicNet al 31 dicembre 2021 e sulla conformità delle stesse alle norme di legge, nonché di rilasciare una dichiarazione su eventuali errori significativi.
A nostro giudizio, la relazione sulla gestione e alcune specifiche informazioni contenute nella relazione sul governo societario e gli assetti proprietari sopra richiamate sono coerenti con il bilancio consolidato del Gruppo BasicNet al 31 dicembre 2021 e sono redatte in conformità alle norme di legge.
Con riferimento alla dichiarazione di cui all'art. 14, c. 2, lettera e), del D. Lgs. 27 gennaio 2010, n. 39, rilasciata sulla base delle conoscenze e della comprensione dell'impresa e del relativo contesto acquisite nel corso dell'attività di revisione, non abbiamo nulla da riportare.
Dichiarazione ai sensi dell'art. 4 del Regolamento Consob di attuazione del D. Lgs. 30 dicembre 2016, n. 254
Gli amministratori della BasicNet S.p.A. sono responsabili per la predisposizione della dichiarazione non finanziaria ai sensi del D. Lgs. 30 dicembre 2016, n. 254. Abbiamo verificato l'avvenuta approvazione da parte degli amministratori della dichiarazione non finanziaria.
Ai sensi dell'art. 3, comma 10, del D. Lgs. 30 dicembre 2016, n. 254, tale dichiarazione è oggetto di separata attestazione di conformità da parte nostra.
Torino, 22 marzo 2022
EY S.p.A. Stefania Boschetti (Revisore Legale)
175
(in Euro)
| Note | FY 2021 | FY 2020 | Change | |
|---|---|---|---|---|
| Direct sales | (8) | 2,415,827 | 3,798,951 | (1,383,124) |
| Cost of sales | (9) | (2,644,896) | (3,460,807) | 815,911 |
| GROSS MARGIN | (229,069) | 338,144 | (567,213) | |
| Royalties and sourcing commissions | (10) | 30,131,326 | 31,215,201 | (1,083,875) |
| Other income | (11) | 7,372,266 | 7,699,890 | (327,624) |
| Sponsorship and media costs | (12) | (1,147,700) | (1,289,846) | 142,146 |
| Personnel costs | (13) | (10,202,161) | (10,099,231) | (102,930) |
| Selling, general and administrative costs, | ||||
| royalties expenses | (14) | (15,695,801) | (19,741,715) | 4,045,914 |
| Amortisation & depreciation | (15) | (4,266,442) | (4,186,643) | (79,799) |
| EBIT | 5,962,420 | 3,935,800 | 2,026,620 | |
| Net financial income (charges) | (16) | (209,758) | (991,998) | 782,240 |
| Dividends | (17) | - | 1,097,851 | (1,097,851) |
| Investment income/(charges) | (18) | 60,903,373 | - | 60,903,373 |
| PROFIT BEFORE TAXES | 66,656,034 | 4,041,653 | 62,614,381 | |
| Income taxes | (19) | (966,839) | 697,943 | (1,664,782) |
| NET PROFIT FOR THE YEAR | 65,689,195 | 4,739,596 | 60,949,599 |
(in Euro)
| Note | FY 2021 | FY 2020 | Change | |
|---|---|---|---|---|
| Profit for the year (A) | 65,689,195 | 4,739,596 | 60,949,599 | |
| Effective portion of the Gains/(losses) on cash flow hedges |
- | - | - | |
| Re-measurement of post-employment benefits (IAS 19) (*) |
(28,249) | (9,598) | (18,651) | |
| Tax effect on other profits/(losses) | 6,780 | 2,303 | 4,477 | |
| Total other gains/(losses), net of tax effect (B) | (29) | (21,469) | (7,295) | (14,174) |
| Total Comprehensive Profit (A)+(B) | 65,667,726 | 4,732,301 | 60,935,425 | |
| - Owners of the parent - Non-controlling interests |
65,667,726 | 4,732,301 - |
60,935,425 |
(*) items which may not be reclassified to the profit and loss account
| ASSETS | Note December 31, 2021 |
December 31, 2020 | ||
|---|---|---|---|---|
| Intangible assets | (20) | 3,767,651 | 13,005,773 | |
| Rights-of-use | (21) | 8,418,984 | 10,175,117 | |
| Plant, machinery and other assets | (22) | 2,863,902 | 2,996,316 | |
| Equity invest. & other financial assets | (23) | 105,854,734 | 35,804,734 | |
| Deferred tax assets | (24) | 1,665,207 | 1,830,497 | |
| Total non-current assets | 122,570,480 | 63,812,437 | ||
| Net inventories | (25) | 199,448 | 431,280 | |
| Trade receivables | (26) | 6,411,795 | 7,233,885 | |
| Other current assets | (27) | 71,122,949 | 74,316,003 | |
| Prepayments | (28) | 3,715,270 | 3,986,225 | |
| Cash and cash equivalents | (29) | 1,451,398 | 3,409,860 | |
| Total current assets | 82,900,861 | 89,377,253 | ||
| 153.189.690 | |
|---|---|
| LIABILITIES | Note | December 31, 2021 | December 31, 2020 |
|---|---|---|---|
| Share capital | 31,716,673 | 31,716,673 | |
| Treasury shares | (30,647,910) | (24,678,900) | |
| Other reserves | 81,189,668 | 79,615,157 | |
| Net Profit | 65,689,195 | 4,739,596 | |
| TOTAL SHAREHOLDERS' EQUITY | (30) | 147,947,626 | 91,392,526 |
| Loans | (31) | 10,776,300 | 15,605,499 |
| Payables for rights-of-use | (33) | 8,440,693 | 10,195,406 |
| Employee and Director benefits | (34) | 2,416,260 | 2,036,244 |
| Other non-current liabilities | (35) | 983,052 | 907,990 |
| Total non-current liabilities | 22,616,305 | 28,745,139 | |
| Bank payables | (32) | 12,854,505 | 18,501,192 |
| Trade payables | (36) | 4,322,269 | 5,949,967 |
| Tax payables | (37) | 5,025,122 | 2,977,048 |
| Other current liabilities | (38) | 12,377,626 | 5,617,818 |
| Accrued expenses | (39) | 327,887 | 6,000 |
| Total current liabilities | 34,907,410 | 33,052,025 | |
| TOTAL LIABILITIES | 57,523,715 | 61,797,164 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
205,471,341 | 153,189,690 |
(in Euro)
| December 31, 2021 | December 31, 2020 | ||
|---|---|---|---|
| A) | OPENING SHORT-TERM BANK DEBT | (10,591,332) | (6,482,206) |
| B) | CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net Profit for the year Amortisation & depreciation |
65,689,195 4,266,442 |
4,739,596 4,186,643 |
|
| Changes in working capital: - (increase) decrease in trade receivables - (increase) decrease in inventories - (increase) decrease in other receivables - increase (decrease) in trade payables |
822,090 231,832 4,129,298 (1,627,697) |
8,748,827 60,331 (8,154,987) (606,301) |
|
| - increase (decrease) in other payables Net changes in employee and Director benefits Others, net |
9,204,831 (119,984) (60,918,522) 21,677,485 |
(3,550,527) (30,906) (74,820) 5,317,856 |
|
| C) | CASH FLOW FROM INVESTING ACTIVITIES | ||
| Investments in fixed assets: - tangible assets - intangible assets - financial assets Realisable value for fixed asset disposals: - tangible assets - intangible assets - financial assets |
(691,879) (1,873,308) (9,146,628) (19,153) 9,415,796 - |
(652,704) (3,252,830) (18,135) 345 948,984 510,000 |
|
| D) | CASH FLOW FROM FINANCING ACTIVITIES | (2,315,171) | (2,464,340) |
| Undertaking of finance leases Reimbursement of finance leases Medium/long term loans (repayments) Repayments of medium/long term loans Repayment of loans for rights-of-use Acquisition of treasury shares Distribution of dividends |
66,400 (51,849) - (4,500,000) (1,732,265) (5,969,010) (3,143,616) (15,330,340) |
51,786 (47,345) 5,500,000 (1,437,500) (1,635,660) (3,021,821) (6,372,102) (6,962,642) |
|
| E) | CASH FLOW IN THE YEAR | 4,031,975 | (4,109,127) |
| F) | CLOSING SHORT-TERM BANK DEBT | (6,559,357) | (10,591,332) |
Interest paid for the year amounts to respectively Euro 209 thousand in 2021 and Euro 190 thousand in 2020, while income taxes paid in the year amounted to Euro 1.2 million in 2021 and Euro 2.1 million in 2020.
(in Euro)
| Reserves | Other reserves | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Number shares |
Share capital |
Treasury shares |
Legal reserve |
Shares held in portfolio |
Remeas. IAS19 |
IFRS16 Reserve |
Cash Flow Hedge reserve |
Exchange gains reserve |
Retained earnings/ (accumulated losses) |
Net profit | Total | |
| Balance at December 31, 2019 |
60,993,602 | 31,716,673 | (22,225,090) | 6,310,916 | 22,225,090 | (108,39 2) |
(86,584) | - | - | 42,938,384 | 14,486,568 | 95,257,565 |
| Allocation of result as per Shareholders' AGM resolution of June 26, 2020 - Legal reserve |
- | - 32,418 |
- | - | - | - | - | - | (32,418) | - - |
||
| - Unrealised exchange gains |
- | - | - | - | - | - | 62,495 | - | (62,495) | - | ||
| reserve - Retained earnings - Distribution of dividends |
- - |
- - |
- - |
- - |
- - |
- - |
- - |
8,016,014 - |
(8,016,014) (6,375,642) |
- (6,375,642) |
||
| Acquisition of treasury shares |
(3,021,821) | - | 3,021,821 | - | - | - | - | (3,021,821) | - | (3,021,821) | ||
| Sale of treasury shares | 568,012 | - | (568,012) | - | - | - | - | 800,122 | - | 800,122 | ||
| Result December 31, 2020 |
- | - | - | - | - | - | - | - | 4,739,596 | 4,739,596 | ||
| Other comprehensive income statement items: |
||||||||||||
| - Gains/(losses) recorded directly to cash flow hedge reserve |
- | - | - | - | - | - | - | - | - | - | ||
| - Gains/(losses) recorded directly to equity for IAS 19 re-measurement |
- | - | - | (7,295) | - | - | - | - | - | (7,295) | ||
| Total comprehensive income |
- | - | - | (7,295) | - | - | - | 4,739,596 | 4,732,301 | |||
| Balance at December 31, 2020 |
60,993,602 | 31,716,673 | (24,678,900) | 6,343,334 | 24,678,900 | (115,68 7) |
(86,584) | - | 62,495 | 48,732,699 | 4,739,596 | 91,392,526 |
| Allocation of result as per Shareholders' AGM |
||||||||||||
| resolution of April 9, 2021 - Legal reserve |
- | - - |
- | - | - | - | - | - | - | - - |
||
| - Unrealised exchange gains |
- | - | - | - | - | - | 112,241 | - | (112,241) | - | ||
| reserve - Retained earnings - Distribution of dividends |
- - |
- - |
- - |
- - |
- - |
- - |
- - |
1,483,739 - |
(1,483,739) (3,143,616) |
- (3,143,616) |
||
| Acquisition of treasury shares |
(5,969,010) | - | 5,969,010 | - | - | - | - | (5,969,010) | - | (5,969,010) | ||
| Sale of treasury shares | - | - | - | - | - | - | ||||||
| Result December 31, 2021 |
- | - | - | - | - | - | - | - | 65,689,195 | 65,689,195 | ||
| Other comprehensive income statement items: |
||||||||||||
| - Gains/(losses) recorded directly to cash flow hedge reserve |
- | - | - | - | - | - | - | - | - | - | ||
| - Gains/(losses) recorded directly to equity for IAS 19 re-measurement |
- | - | - | (21,469) | - | - | - | - | - | (21,469) | ||
| Total comprehensive income |
- | - | - | (21,469) | - | - | - | 65,689,195 | 65.689.1957 26 |
|||
| Balance at December 31, 2021 |
60,993,602 | 31,716,673 | (30,647,910) | 6,343,334 | 30,647,910 | (137,15 6) |
(86,584) | - | 174,736 | 44,247,428 | 65,689,195 | 147,947,626 |
(in Euro)
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| Cash and cash equivalents | 1,451,398 | 3,409,860 |
| Bank overdrafts and bills | (8,010,755) | (14,001,192) |
| Sub-total net liquidity available | (6,559,357) | (10,591,332) |
| Short-term portion of medium/long-term loans | (4,843,750) | (4,500,000) |
| Short-term net financial position – third parties | (11,403,107) | (15,091,332) |
| "Intesa Loan - FCG" | (5,156,250) | (5,500,000) |
| "BNL Loan" | (625,000) | (1,875,000) |
| "MPS Loan" | (4,875,000) | (8,125,000) |
| Payables for rights-of-use | (8,440,693) | (10,195,406) |
| Medium/long lease payables | (120,050) | (105,499) |
| Sub-total loans and leasing – third parties | (19,216,993) | (25,800,905) |
| Net financial position - third parties | (30,620,100) | (40,892,237) |
| Group financial receivables / (payables) | 57,371,828 | 66,952,082 |
| Net Financial Position - Group | 57,371,828 | 66,952,082 |
| Total net financial position | 26,751,728 | 26,059,845 |
The following table shows the composition of the Group's net debt as of December 31, 2021 and December 31, 2020, determined in accordance with the "Guidelines on disclosure requirements under the Prospectus Regulation" issued by ESMA (European Securities & Markets Authority) on March 4, 2021 (ESMA32-382- 1138) and implemented by Consob with Attention Reminder No. 5/21 of April 29, 2021.
| December 31, 2021 | December 31, 2020 | ||
|---|---|---|---|
| A. | Cash | 2,653 | 3,168 |
| B. | Other cash equivalents | 1,448,745 | 3,406,692 |
| C. | Securities held for trading | - | - |
| D. | Cash & cash equivalents (A)+(B)+(C) | 1,451,398 | 3,409,860 |
| E. | Current financial receivables | - | - |
| F. | Current bank payables | (8,010,755) | (14,001,192) |
| G. | Current portion of non-current debt | (4,843,750) | (4,500,000) |
| H. | Other Group financial receivables/ (payables) | 57,371,828 | 66,952,082 |
| I. | Current financial debt (F)+(G)+(H) | 44,517,323 | 48,450,890 |
| J. | Net current financial debt (I)-(E)-(D) | 45,968,721 | 51,860,750 |
| K. | Non-current bank payables | (10,776,300) | (15,605,499) |
| L. | Bonds issued | - | - |
| M. | Other non-current financial payables | (8,440,693) | (10,195,406) |
| N. | Trade payables and other non-current payables | - | - |
| O. | Non-current financial debt (K) + (L) + (M) + (N) | (19,216,993) | (25,800,905) |
| P. | Net financial debt (J) + (O) | 26,751,728 | 26,059,845 |
(in Euro)
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| A) OPENING NET FINANCIAL POSITION | 26,059,845 | 22,788,737 |
| B) CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net profit | 65,689,195 | 4,739,596 |
| Amortisation & depreciation | 4,266,442 | 4,186,643 |
| Changes in working capital: | 3,180,100 | 8,895,009 |
| Net changes in employee and director benefits | (119,984) | (30,906) |
| Others, net | (60,918,522) | (74,820) |
| 12,097,231 | 17,715,522 | |
| C) CASH FLOW FROM INVESTING ACTIVITIES | ||
| Fixed asset investments | (11,171,814) | (3,923,670) |
| Realisable value for fixed asset disposals | 9,396,643 | 1,459,329 |
| (2,315,171) | (2,464,340) | |
| D) CASH FLOW FROM FINANCING ACTIVITIES |
||
| Payables for right-of-use | 22,448 | (2,586,152) |
| Acquisition of treasury shares | (5,969,010) | (3,021,821) |
| Dividend payments | (3,143,616) | (6,372,102) |
| (9,090,178) | (11,980,075) | |
| E) CASH FLOW IN THE YEAR |
691,883 | 3,271,107 |
| F) CLOSING NET FINANCIAL POSITION | 26,751,727 | 26,059,845 |
| FY 2021 | FY 2020 | ||||
|---|---|---|---|---|---|
| Of which related parties Note 43 |
Of which related parties |
||||
| Direct sales | 2,415,827 | 1,473,769 | 3,798,951 | 2,525,977 | |
| Cost of sales | (2,644,896) | (83,472) | (3,460,807) | (12) | |
| GROSS MARGIN | (229,069) | 338,144 | |||
| Royalties and sourcing commissions | 30,131,326 | 5,781,931 | 31,215,201 | 7,984,497 | |
| Other income | 7,372,266 | 6,528,218 | 7,699,890 | 6,606,200 | |
| Sponsorship and media costs | (1,147,700) | (696,283) | (1,289,846) | (756,355) | |
| Personnel costs | (10,202,161) | (10,099,231) | |||
| Selling, general and administrative costs, | |||||
| royalties expenses | (15,695,801) | (1,711,454) | (19,741,715) | (1,585,142) | |
| Amortisation & depreciation | (4,266,442) | (4,186,643) | |||
| EBIT | 5,962,420 | 3,935,800 | |||
| Net financial income (charges) | (209,758) | 239,841 | (991,998) | 173,034 | |
| Dividends | - | 1,097,851 | 1,097,851 | ||
| Investment income/(charges) | 60,903,373 | - | |||
| PROFIT BEFORE TAXES | 66,656,034 | 4,041,653 | |||
| Income taxes | (966,839) | 697,943 | |||
| NET PROFIT | 65,689,195 | 4,739,596 |
| (in Euro) | |
|---|---|
| ----------- | -- |
| ASSETS | December 31, 2021 | December 31, 2020 | ||
|---|---|---|---|---|
| Of which Related parties Notes 22 & 26 |
Of which Related parties |
|||
| Intangible assets | 3,767,651 | 13,005,773 | ||
| Rights-of-use | 8,418,984 | 10,175,117 | ||
| Plant, machinery and other assets | 2,863,902 | 2,996,316 | ||
| Equity invest. & other financial assets | 105,854,734 | 105,822,624 | 35,804,734 | 35,772,624 |
| Deferred tax assets | 1,665,207 | 1,830,497 | ||
| Total non-current assets | 122,570,480 | 63,812,437 | ||
| Net inventories | 199,448 | 431,280 | ||
| Trade receivables | 6,411,795 | 7,233,885 | ||
| Other current assets | 71,122,949 | 68,620,732 | 74,316,003 | 72,088,335 |
| Prepayments | 3,715,270 | 3,986,225 | ||
| Cash and cash equivalents | 1,451,398 | 3,409,860 | ||
| Total current assets | 82,900,861 | 89,377,253 | ||
| TOTAL ASSETS | 205,471,341 | 153,189,690 |
| LIABILITIES | December 31, 2021 | December 31, 2020 | ||
|---|---|---|---|---|
| Of which Related parties Note 38 |
Of which Related parties |
|||
| Share capital | 31,716,673 | 31,716,673 | ||
| Treasury shares | (30,647,910) | (24,678,900) | ||
| Other reserves | 81,189,668 | 79,615,157 | ||
| Net Profit | 65,689,195 | 4,739,596 | ||
| TOTAL SHAREHOLDERS' EQUITY | 147,947,626 | 91,392,526 | ||
| Loans | 10,776,300 | 15,605,499 | ||
| Payables for rights-of-use | 8,440,693 | 10,195,406 | ||
| Employee and Director benefits | 2,416,260 | 2,036,244 | ||
| Other non-current liabilities | 983,052 | 907,990 | ||
| Total non-current liabilities | 22,616,305 | 28,745,139 | ||
| Bank payables | 12,854,505 | 18,501,192 | ||
| Trade payables | 4,322,269 | 5,949,967 | ||
| Tax payables | 5,025,122 | 2,977,048 | ||
| Other current liabilities | 12,377,626 | 9,282,020 | 5,617,819 | 1,295,819 |
| Accrued expenses | 327,887 | 6,000 | ||
| Total current liabilities | 34,907,410 | 33,052,026 | ||
| TOTAL LIABILITIES | 57,523,715 | 61,797,164 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
205,471,341 | 153,189,690 |
(in Euro)
| December 31, 2021 | December 31, 2020 | |||
|---|---|---|---|---|
| Of which related parties |
Of which related parties |
|||
| A) OPENING SHORT-TERM BANK DEBT | (10,591,332) | (6,482,206) | ||
| B) CASH FLOW FROM OPERATING ACTIVITIES | ||||
| Net Profit | 65,689,195 | 4,739,596 | ||
| Amortisation & depreciation | 4,266,442 | 4,186,643 | ||
| Changes in working capital: | ||||
| - (increase) decrease in trade receivables | 822,090 | 8,154,987 | ||
| - (increase) decrease in inventories | 231,832 | 60,331 | ||
| - (increase) decrease in other receivables | 4,129,298 | 3,467,604 | (7,256,283) | (8,173,112) |
| - increase (decrease) in trade payables | (1,627,697) | (606,301) | ||
| - increase (decrease) in other payables | 9,204,831 | 7,986,200 | (3,550,527) | 663,246 |
| Net changes in employee and director benefits | ||||
| (119,984) | (30,906) | |||
| Others, net | (60,918,522) | (74,820) | ||
| 21,677,485 | 5,317,855 | |||
| C) CASH FLOW FROM INVESTING ACTIVITIES | ||||
| Investments in fixed assets: | ||||
| - tangible assets | (691,879) | (652,704) | ||
| - intangible assets | (1,873,308) | (3,252,830) | ||
| - financial assets | (9,146,628) | (18,135) | ||
| Realisable value for fixed asset disposals: | ||||
| - tangible assets | (19,153) | 345 | ||
| - intangible assets | 9,415,796 | 948,984 | ||
| - financial assets | - | 510,000 | ||
| D) CASH FLOW FROM FINANCING ACTIVITIES | (2,315,171) | (2,464,340) | ||
| Undertaking of finance leases | 66,400 | 51,786 | ||
| Reimbursement of finance leases | (51,849) | (47,345) | ||
| New medium/long term loans | - | |||
| 5,500,000 | ||||
| Repayments of medium/long term loans | (4,500,000) | (1,437,500) | ||
| Repayment of loans for rights-of-use | (1,732,265) | (1,635,660) | ||
| Acquisition of treasury shares | (5,969,010) | (3,021,821) | ||
| Distribution of dividends | (3,143,616) | (6,372,102) | ||
| (15,330,340) | (6,962,642) | |||
| E) CASH FLOW IN THE YEAR | 4,031,975 | (4,109,127) | ||
| F) CLOSING SHORT-TERM BANK DEBT | (6,559,357) | (10,591,332) |
Interest paid for the year amounts to respectively Euro 209 thousand in 2021 and Euro 190 thousand in 2020, while income taxes paid in the year amounted to Euro 1.2 million in 2021 and Euro 2.1 million in 2020.
For the Board of Directors
Marco Daniele Boglione
BasicNet S.p.A. – with registered office in Turin, listed on the Italian Stock Exchange since November 17, 1999, in addition to its main function of Parent Company, manages the Network, providing the know-how for the use of the Group brands, undertaking research and development of the services and new products for the best utilisation of the brands, as well as undertaking activities of conception, development and communication and the Groups' Information Technology systems. The Company coordinates and provides subsidiaries with administration, finance and control, IT and payroll management services.
The duration of BasicNet S.p.A. is fixed by the company by-laws until December 31, 2050.
The publication of the financial statements of BasicNet S.p.A. for the year ended December 31, 2021 was approved by the Board of Directors on March 3, 2022. The final approval of the accounts is the responsibility of the Shareholders' AGM.
The financial statements for the year 2021 were prepared in accordance with IFRS issued by the International Accounting Standards Board ("IASB) and approved by the European Union at the date of the present document. IFRS refers to all the revised International Accounting Standards (IAS), and all of the interpretations of the International Financial Reporting Interpretations Committee ("IFRIC") previously known as the Standing Interpretations Committee ("SIC").
The financial statements are prepared under the historical cost convention, modified where applicable for the measurement of certain financial instruments, as well as on the going concern assumption.
The accounting principles utilised in the financial statements are the same as those utilised in the previous year.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IAS 16 Reform of the interest rates benchmark - Phase 2
The changes include the temporary easing of requirements with respect to the effects on the financial statements when the interest rate offered on the interbank market (IBOR) is replaced by an alternative rate that is substantially risk free (Risk Free Rate- RFR):
The changes include the following practical expedients:
These amendments do not have an impact on the Company's financial statements.
On May 28, 2020, the IASB published an amendment to IFRS 16. The amendment allows a lessee not to apply the requirements in IFRS 16 on the accounting effects of contractual changes for lease reductions granted by lessors that are a direct result of the Covid-19 outbreak. The amendment introduces a practical expedient whereby a tenant may choose not to consider whether the reduction in Leasing payments constitute contractual modifications. A lessee that chooses to use this expedient accounts for these reductions as if the reductions were not contractual modifications within the scope of IFRS 16.
The amendments were applicable until June 30, 2021, although as the impact of the COVID-19 pandemic has continued, on March 31, 2021 the IASB extended the application period of the practical expedient until June 30, 2022.
The amendments apply to the years beginning April 1, 2021 or subsequently. The Group has applied the practical expedient with no impact on the Company's financial statements.
BasicNet S.p.A. presents its income statement by nature of cost items; the assets and liabilities are classified between current and non-current. The statement of cash flows was prepared applying the indirect method. The format of the financial statements applied the provisions of Consob Resolution No. 15519 of July 27, 2006 and Notice No. 6064293 of July 28, 2006 on financial disclosure requirements.
The present financial statements were prepared on the going concern basis, and in accordance with the accruals principle. The financial statements are presented in Euro and all values are rounded into thousands of Euro.
The main accounting policies adopted in the preparation of the financial statements at December 31, 2021 are disclosed below:
Revenues derive from Company operations in the ordinary course of business and comprise revenues from sales and services. Revenues are recognised net of sales tax, returns and discounts.
Revenues from contracts with customers rare recognised when the control of the goods and services is transferred to the client for an amount which reflects the consideration that the Company expects to receive in exchange for these goods and services. The Company has concluded that generally it acts as the Principal for the agreements from which it receives revenues, as usually it controls the goods and services before their transfer to the customer. In calculating the sales transaction price for goods, the Company considers the effects from variable fees, significant financial components and non-monetary fees. Where the fee concluded in the contract includes a variable amount, such as that connected to a right of return, the Company estimates the amount of the fee to which it will be entitled in exchange for the transfer of the goods to the customer.
Royalties and sourcing commissions, including the minimum guaranteed component, are recognised on an accruals basis in accordance with the underlying contracts and consistent with the state of advancement of the sales or the production of the licensees.
Costs and expenses are recognised in accordance with the accruals principle.
Cost relating to the preparation and presentation of sample collections are recognised in the income statement in the year in which the sales of the relative collections are realised. Any differences are recorded through accruals.
Interest income and expenses and other income and expenses are recorded and shown in the financial statements on the accrual basis.
In accordance with IAS 23 – Borrowing costs, the financial charges directly attributable to the purchase, construction and production of the asset which requires a significant amount of time before use or sale are capitalised together with the value of the asset. Such an event has not arisen up to the present moment for the company. If these conditions are not met the financial charges are expensed directly to the income statement.
Dividends from investees are recognised in the income statement when the right to receive the dividend is established.
Dividends distributed are represented as changes in shareholders' equity in the year in which the Shareholders' AGM approves the distribution and payment.
The receivables and payables originally expressed in foreign currencies are translated into Euro at the exchange rate when the transaction originated. Exchange differences arising on collections and payments in foreign currencies are recorded in the income statement.
Revenues and income, costs and charges related to currency transactions are recorded at the exchange rate at the transaction date.
At the end of the period, the assets and liabilities valued in foreign currencies, with the exception of fixed assets, are recorded at the exchange rates at the balance sheet date and the relative gains or losses on exchange are recorded in the income statement.
Income taxes include all the taxes calculated on the assessable income of the Company. They are recognised to the income statement, except those relating to accounts directly credited or debited to equity, in which case the tax effect is recognised directly to equity.
Other taxes not related to income, such as taxes on property and share capital, are included under operating charges.
Deferred taxes are calculated on all the temporary differences arising between the assessable income of an asset or liability and the relative book value in the financial statements, with the exception of the goodwill not fiscally deductible and of those differences deriving from investments in subsidiaries for which a write-down is not expected in the future.
Deferred tax assets on fiscal losses and unutilised tax credits carried forward are recognised only for those amounts for which it is probable there will be future assessable income to recover the amounts. The deferred tax assets and liabilities are offset when the income tax is applied by the same fiscal authority and when there is a legal right of compensation.
They are measured at the tax rates that are expected to apply to the period when the temporary difference is reversed.
The Company adhered to the tax consolidation in accordance with Article 117 and thereafter of the CFA – Presidential Decree No. 917 of December 22, 1986 together with all of the wholly-owned Italian subsidiary companies. BasicNet S.p.A. acts as the consolidating company and calculates a single assessable base for the Group of companies adhering to the national tax consolidation and therefore benefits from the possibility of offsetting assessable income with assessable losses in a single tax declaration.
On September 30, 2019, the Company filed an application to renew the benefits provided by the "Patent Box" regulations for the use of intangible assets for the tax periods from 2020 to 2024, which was followed at the end of the financial year by a subsequent application for the prior definition, on an adversarial basis, of the methods and criteria for determining the "economic contribution" to the production of business income or loss, deriving from the "direct" use of new intangible assets.
In accordance with paragraph 4 of IAS 33 – Earnings per share, this latter is only presented at consolidated financial statement level.
BasicNet S.p.A. may be involved in legal and tax disputes, concerning specific issues and in various jurisdictions. Considering the uncertainties relating to these issues, it is difficult to predict with certainty any future payments required. In addition, the Company has instigated legal disputes for the protection of its Trademarks, and of its products, against counterfeit products. The cases and disputes against the Company often derive from complex legal issues, which are often subject to varying degrees of uncertainty, including the facts and circumstances relating to each case, jurisprudence and different applicable laws.
In the normal course of business, Management consults with its legal consultants and experts on legal matters.
The Company accrues a liability against disputes when it considers it is probable that there will be a financial payment made and when the amount of the losses arising can be reasonably estimated.
The contingent liabilities are not recorded in the financial statements, but are reported as a disclosure in the Notes unless the probability is remote. In accordance with paragraph 10 of IAS 37 – Provisions, contingent liabilities and contingent assets a contingent liability is (a) a possible obligation which derives from past events and whose existence will be confirmed only on the occurrence or otherwise of one or more future uncertain events, not entirely under the control of the enterprise, or (b) a current obligation which derives from past events but which cannot be recorded in the financial statements as the payment is improbable or cannot be reliably estimated.
The preparation of the financial statements and the relative notes in application of IFRS require that management make estimates and assumptions on the values of the assets and liabilities in the financial statements and on the information relating to the assets and contingent liabilities at the balance sheet date. The actual results may differ from such estimates.
Estimates are utilised to measure intangible and tangible assets subject to impairment tests, in addition to recognise provisions on doubtful debts, inventory obsolescence, amortisation and depreciation, the write-down of assets, employee benefits and income taxes.
The estimates and assumptions are reviewed periodically and the effects of all variations are immediately recognised in the income statement.
An intangible asset is a non-monetary asset, identifiable and without physical substance, controllable and capable of generating future economic benefits. Intangible assets are recognised at purchase and/or production cost, including the costs of bringing the asset to its current use net of accumulated amortisation and any loss in value. Amortisation begins when the asset is available for use and is recognised on a straight-line basis over the residual estimated useful life of the asset.
Software acquired and IT programmes developed internally are amortised over five years, while the costs incurred to maintain or upgrade the original operational standard are expensed in the year and are not capitalised.
The patent rights are amortised over ten years.
Plant and equipment are recorded at purchase or production costs, including accessory charges and direct and indirect costs, for the amount reasonably attributable to the assets.
Subsequent expenditures are only capitalised where they increase the future economic benefits of the asset to which they relate. All other costs are expensed as incurred.
Plant and equipment are amortised on a straight-line basis over the estimated useful life of each asset. The depreciation rates by asset category are shown below:
| Description | Estimated useful life years |
|---|---|
| Plant & machinery | 4-8 |
| Furniture and furnishings | 5-8 |
| Motor vehicles | 4 |
| EDP | 5-8 |
Fixed assets which at the balance sheet date are lower than the book value are recorded at this lower value, which however may not be maintained at this value in subsequent periods if the reasons for the adjustment no longer exist.
Ordinary maintenance costs are fully charged to the income statement.
Advances and costs for property, plant and equipment in progress which are not yet utilised in the operating activities are reported separately.
The Company recognises the usage right assets at the initial leasing date (i.e. the date on which the underlying asset is available for use). The usage right assets are measured at cost, net of accumulated amortisation and impairments, adjusted for any remeasurement of the lease liabilities.
The cost of the usage right assets includes the amount of the lease liabilities recognised, the initial direct costs incurred and the payment of leases at the commencement date or before, net of any incentives received. Unless the Company does not have the reasonable certainty of obtaining ownership of the leased asset on conclusion of the leasing contract, the usage right assets are amortised on a straight-line basis for a period covering the lesser between the estimated useful life and the lease duration.
Right-of-use assets are subject to impairment.
At the lease commencement date, the Company recognises the lease liabilities measuring them at the present value of the payments due for the lease not yet settled at that date. The payments due include the fixed payments (including the fixed payments in substance), net of any lease incentives to be received, the variable lease payments which depend on an index or a rate and the amounts expected to be paid as guarantee on the residual value. The lease payments include also the exercise price of a purchase option where it is reasonably certain that this option shall be exercised by the Company and the lease termination penalty payments, where its duration takes account of the exercise by the Company of the termination option on the lease.
The variable lease payments not depending on an index or a rate are recognised as costs in the period in which the event or the condition generating the payment occurs. In calculating the present value of the payments due, the Company uses the incremental borrowing rate at the commencement date where the implicit interest rate cannot be readily determined.
After the commencement date, the amount of the lease liability increases to take account of the interest on the lease liabilities and reduces to consider the payments made. In addition, the carrying amount of the lease payables is restated in the case of any changes to the lease or a review of the contractual terms with regards to the change in the fixed payments in substance; it is in addition restated amid changes to the valuation of the acquisition of the underlying asset.
The Company applies the exception for the recognition of short-term leases for machinery and equipment (i.e. leasing with a duration of 12 months or less from the commencement date and not containing a purchase option). The Company has also applied the exception for leases concerning assets of a modest value with regards to the leasing contracts on office equipment whose value is considered low (i.e. below Euro 5,000).
The short-term lease charges and those for low value assets are recognised as costs on a straight-line basis over the lease duration.
The carrying value of the assets of the Company are measured at each reporting date to determine whether there has been a loss in value, in which case an estimate is made of the recoverable value of the asset. A loss in value (impairment) is recorded in the income statement when the carrying value of an asset or a cash-generating unit exceeds its recoverable value.
The indefinite intangible assets (including goodwill) are tested annually and whenever there is an indication of a possible loss, in order to determine whether a loss in value has occurred.
The recoverable value of a non-financial asset is the higher of the fair value less costs to sell and the value in use. For the determination of the value in use, the future cash flows are discounted utilising a rate which reflects the current market value of money and of the related risks of the activity. In the case of activities which do not generate cash flows sufficiently independent, it is necessary to calculate the recoverable value of the cash-generating unit to which the asset belongs.
The value is recovered when changes take place in the valuations to determine the recoverable value. The recoverable value is recorded in the income statement adjusting the book value of the asset to its recoverable value. This latter must not be above the value which would have been determined, net of depreciation, if no loss in value of the asset had been recorded in previous years.
In the separate financial statements of BasicNet S.p.A. the investments in subsidiaries, associates and joint ventures are recorded at cost, adjusted for any loss in value; the cost includes any directly attributable accessory charges. The positive difference, arising on purchase, between the acquisition cost and the share of net equity of the investment of the Company is, therefore, included in the carrying value of the investment.
Where there is an indication of a loss, the carrying value of the investment must be compared with the recoverable value, represented by the higher between the fair value, net of selling costs, and the value in use. For non-listed investments, the fair value is determined with reference to binding sales agreement. The value in use is determined discounting the expected cash flows from the investment at the weighted average cost of capital, net of the financial debt. The cash flows are determined on the basis of reasonable and identifiable assumptions, represented by the best estimates of the future economic conditions.
Where an impairment loss exists, it is recognised immediately through the income statement. Where the reasons for the write-down no longer exist, the value of the investment is restored within the limit of the original cost through the income statement.
Where the share of losses pertaining to the company in the investment exceeds the carrying value of the investment, the value of the investment is written down and the share of further losses is recorded as a provision under liabilities if the Company has the obligation to cover such losses.
Investments other than those in subsidiaries, associated companies and joint ventures are recognised under non-current assets or current assets if held within the equity of the Company for a period, respectively, of greater than, or not greater than, 12 months.
On acquisition, they are classified to the following categories:
The other investments classified as "financial assets available-for-sale" are measured at fair value; the change to the values of these investments are recognised to a net equity reserve through the other comprehensive income statement items, which will be reversed to the income statement on sale or impairment.
Other non-listed investments classified as "financial assets available-for-sale" for which the fair value may not be reliably estimated are valued at cost, adjusted for impairments to the income statement, according to IAS 39 – financial instruments: recognition and measurement.
The reduction in value of other investments classified as "financial assets available-for-sale" may not be subsequently reversed.
Changes in the value of other investments classified as "financial assets at fair value with changes recorded in the income statement" are recognised directly to the Income Statement.
Financial assets consist of loans are recorded at their estimated realisable value.
Inventory is valued under the average weighted cost method.
Inventories are measured at the lower of purchase or production cost and their net realisable value.
Inventories include incidental charges and direct and indirect costs that can be reasonably allocated. Obsolete and slow-moving inventories are written down in relation to their possible utilisation or realisable value. When in future periods the reasons for the write-down no longer exist, they are restored to the original value.
Receivables recorded under current assets are stated at their nominal value, which substantially coincides with the amortised cost. The initial value is subsequently adjusted to take account of any write-downs, which reflects the bad debt estimate. The Company applies the simplified approach to calculating expected losses, fully recognising the expected loss at the reporting date according to historic information supplemented by forward looking considerations. Medium/long-term receivables which include an implicit interest component are discounted utilising an appropriate market rate. Receivables transferred without recourse, in which all the risks and benefits are substantially transferred by the owner of the financial assets to the factoring company, are reversed in the financial statements at their nominal value.
The liquid assets principally relate to current bank accounts and cash. They are recorded for amounts effectively available at year end.
The cash equivalents are invested in highly liquid temporary financial instruments.
The account includes amounts related to two accounting periods, in accordance with the accruals concept.
Treasury shares are recognised as a deduction from equity. The original cost of the treasury shares and the revenues deriving from any subsequent sale are recognised as equity movements.
Provisions for risks and charges are recorded in the balance sheet only when a legal or implicit obligation exists deriving from a past event that determines the commitment of resources to produce economic benefits for their compliance and a reliable estimate of the amount can be determined.
The Post-Employment Benefit in accordance with Italian legislation is quantified as a defined benefit plan and is measured in accordance with the "Projected Unit Credit Method".
From January 1, 2007, this liability refers exclusively to the portion of the Post-Employment Benefit, matured up to December 31, 2006, which following the complementary pension reform (Legislative Decree No. 252 of December 5, 2005) continues to constitute an obligation of the company. Following the entry into force of the above-mentioned reform as enacted by Law No. 296 of December 27, 2006 (2007 Finance Law), the liability, as concerning services already completely matured, was restated without applying the pro-rata of the employment service and without considering, in the actuarial calculation, the components relating to future salary increases.
On June 16, 2011, the IASB issued an amendment to IAS 19 Employee Benefits. The new version of IAS 19 requires, in particular, for post-employment benefits, the recognition of the changes of the actuarial gains/losses under other items of the Comprehensive Income Statement. The cost relating to employment services, as well as the interest on the "time value" component in the actuarial calculations remain in the profit and loss account.
The portion of the Post-Employment Benefit paid to a supplementary pension fund is considered a defined contribution plan as the obligation of the company towards the employee ceases with the payment of the amount matured to the funds. Also the portion of the Post-Employment Benefit paid to the INPS Treasury fund is recorded as a defined contribution plan.
Financial payables are recorded at their nominal value which approximates the amortised cost. The book value of the trade and other payables at the balance sheet date approximates their fair value. The book value of the trade and other payables at the balance sheet date approximates their fair value.
It is recalled that the BasicNet S.p.A. does not undertake contracts for speculative purposes.
These instruments are initially recorded at their fair value, and subsequently measured according to whether they are "hedged" or "not hedged" as per IFRS 9.
It is recalled that BasicNet S.p.A. does not undertake derivative contracts for speculative purposes.
The hedging may be of two types:
BasicNet S.p.A., before signing a hedge contract, undertakes a close examination of the relationship between the hedge instrument and the item hedged, in view of the objectives to reduce the risk, also evaluating the existence and the continuation over the life of the derivative financial instrument of the effectiveness requirements, necessary for the hedge accounting.
The Company does not utilise fair value hedge instruments.
• Fair value hedges
The changes in their fair value are recognised in the income statement, together with the changes in the fair value of the relative assets and liabilities hedged.
The Company does not utilise fair value hedge instruments.
• Cash flow hedges
The part of the profit or loss of the hedge instrument, considered effective, is recorded directly in the comprehensive income statement; the non-effective part is however recorded immediately in the income statement. The accumulated amounts in the comprehensive income statement are recorded in the income statement in the year in which the scheduled hedge operation matures or the instrument hedged is sold, or when the effectiveness requirements for hedge accounting no longer exist.
• Derivative financial instruments which do not have the effectiveness requirements for hedge accounting
The derivative financial instruments which do not comply with the requirements of IFRS 9 for the identification of the hedge, where present, are classified in the category of financial assets and liabilities measured at fair value through the profit and loss account.
IFRS 7 requires that the classification of financial instruments measured at fair value is determined based on the quality of the input sources used in the valuation.
The IFRS 7 classification implies the following hierarchy:
The subsequent events to the end of the year and the outlook for the current year are reported in the Directors' Report.
In accordance with Article 1, paragraph 125 of Law 124/2017, the Company has not received any grants from public bodies in excess of Euro 10 thousand.
Grants obtained as part of the measures to contain the effects of Covid-19 in support of businesses were provided under provisions of a general nature and therefore do not fall within the scope of these regulations. The related effects are summarized in Note 7 below.
As the Company simultaneously publishes the separate and consolidated financial statements, the operating segment information is provided only for the consolidated financial statements in accordance with IFRS 8 – Operating segments.
The figures and results commented on in these Explanatory Notes were significantly and extensively impacted by the effects of the pandemic during the year. Key extraordinary and non-recurring items associated with Covid-19 are summarized below:
The direct sales of products undertaken by the Company refer only to samples of clothing and footwear to licensees. The breakdown of sample sales is as follows:
| FY 2021 | FY 2020 | |
|---|---|---|
| Net sales to third parties |
942,058 | 1,272,973 |
| Net sales to subsidiaries |
1,473,769 | 2,525,978 |
| Total direct sales | 2,415,827 | 3,798,951 |
Sales to subsidiaries are detailed in Note 43.
Direct sample sales decreased by 36%.
This result is due to the lack of cash flow from July 1 from the sale of K-Way samples, whose business unit, as described in detail in Note 41, was transferred to the company of the same name.
The breakdown of the cost of sales is as follows:
| FY 2021 | FY 2020 | |
|---|---|---|
| Samples purchased | 1,533,934 | 2,536,361 |
| Freight charges and accessory purchasing cost |
458,114 | 667,813 |
| Change in inventory of raw materials, ancillary, | ||
| consumables and goods | 231,832 | 60,331 |
| Prototypes purchases and development | 250,832 | 280,855 |
| Others | 170,184 | 84,553 |
| Total cost of sales | 2,644,896 | 3,460,807 |
Sample purchases were made by BasicNet S.p.A. for resale to the licensees. The decrease of 24% is in line with the decrease in sales described in Note 8.
The breakdown of royalties and sourcing commissions by geographic area is reported below.
| FY 2021 | FY 2020 | |
|---|---|---|
| Europe | 12,700,154 | 15,001,362 |
| The Americas | 3,280,068 | 2,186,899 |
| Asia and Oceania | 12,790,718 | 12,962,234 |
| Middle East and Africa | 1,360,386 | 1,064,706 |
| Total | 30,131,326 | 31,215,201 |
Royalty income comprises fees on licenses for know-how and the development of the Group brand collections, in addition to royalties for the use of the K-Way brand.
Sourcing commissions stem from usage rights of the know-how and are charged to the licensee producers on the sales made by them to the licensees of the Network.
This decrease is described in the Directors' Report, based on the consolidated figures, whose effects are reflected also in the Company figures.
| FY 2021 | FY 2020 | |
|---|---|---|
| Assistant services to Group companies | 6,537,646 | 6,625,000 |
| Other income | 834,620 | 1,074,890 |
| Total other income | 7,372,266 | 7,699,890 |
The "revenues for assistant services to Group companies" originates from assistance and consultancy in administration and finance, payroll, commercial contract agreements and IT services provided by the Parent Company to the subsidiaries BasicItalia S.p.A., Basic Village S.p.A., Basic Trademark S.r.l., Jesus Jeans S.r.l., TOS S.r.l. Basic Air S.r.l., Basic Retail S.r.l., Kappa Europe S.A.S. and BasicRetail Suisse SA.
"Other income" in 2021 includes income from co-branded production contracts, recovery of legal fees on settlements reached and positive differences on prior year expenses, as well as minor items.
| FY 2021 | FY 2020 | |
|---|---|---|
| Communication contributions | 259,483 | 694,424 |
| Promotional expenses | 629,427 | 353,980 |
| Advertising | 258,789 | 241,442 |
| Total sponsorship and media costs | 1,147,700 | 1,289,846 |
Communication contributions are paid to commercial licensees for international communication and endorsement activities
| FY 2021 | FY 2020 | |
|---|---|---|
| Wages and salaries | 7,156,580 | 7,189,891 |
| Social security charges | 2,505,540 | 2,390,810 |
| Post-employment benefits | 540,041 | 518,530 |
| Total | 10,202,161 | 10,099,231 |
Personnel costs include all charges relating to the provision of employment services of BasicNet S.p.A.. The changes in the headcount during the year were as follows:
| Human resources at December 31, 2021 | Human resources at December 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|
| Category | Number | Average age | Number | Average age | ||||
| Male/ | Male/ | Male/ | Male/ | |||||
| Female | Total | Female | Avge. | Female | Total | Female | Avge. | |
| Executives | 16 / 6 | 22 | 47 / 53 | 49 | 16 / 7 | 23 | 46 / 52 | 48 |
| White collar |
61 / 137 | 198 | 37 / 38 | 38 | 64 / 132 | 196 | 37 / 39 | 38 |
| Blue-collar | 1 / | 2 | 41 / 46 | 43 | 1 / 2 | 3 | 40 / 49 | 46 |
| Total | 78 / 144 | 222 | 39 / 39 | 39 | 81 / 141 | 222 | 39 / 39 | 39 |
The average number of Employees in 2021 was 224, comprising 23 executives, 199 white-collar employees and 3 blue-collar employees.
| FY 2021 | FY 2020 | |
|---|---|---|
| Commercial expenses | 3,186,680 | 3,550,759 |
| Rental, accessory and utility expenses | 3,561,609 | 2,727,494 |
| Directors and Statutory Auditors emoluments | 2,640,823 | 3,199,117 |
| Doubtful debt provision | 737,627 | 4,308,890 |
| Sales services | 558,950 | 628,809 |
| Professional consultants | 1,566,092 | 1,622,753 |
| Other general expenses | 3,444,020 | 3,703,893 |
| Total selling, general and administrative costs, and royalties |
15,695,801 | 19,741,715 |
The breakdown of service costs is presented in the table below:
"Commercial expenses" include costs connected with commercial activities, travel expenses and the cost of design and graphic consultancy services. The decrease is due to lower commercial activity on the brands and the reduction, due to Covid-19, of work missions abroad.
"Rental, accessory and utility expenses" principally relate to the offices of the company, owned by the subsidiary Basic Village S.p.A.
The company's remuneration policy, as well as Directors and Statutory Auditors emoluments for the offices held, pursuant to Article 78 of Consob Regulation No. 11971/99 and thereafter are reported in the Remuneration Report pursuant to Article 123-ter of the CFA (reported net of tax charges) which is available on the company's website www.basicnet.com/contenuti/datifinanziari/assembleeazionisti.asp, to which reference should be made.
"Sales services" include expenses for exporting samples in addition to "royalties' charges" principally relating to co-branding operations.
"Other general expenses" includes bank charges, other taxes, consumption materials, hire charges, and corporate and other minor expenses.
The increase also incorporates purchases of prevention and sanitization supplies related to Covid-19.
Depreciation of fixed assets includes depreciation on finance lease assets.
| FY 2021 | FY 2020 | |
|---|---|---|
| Intangible assets | 1,695,633 | 1,685,455 |
| Right-of-use | 1,767,007 | 1,714,909 |
| Property, plant and equipment | 803,802 | 786,279 |
| Total amortisation & depreciation | 4,266,442 | 4,186,643 |
| FY 2021 | FY 2020 | |
|---|---|---|
| Interest on bank deposits |
168 | 118 |
| Intercompany interest income | 116,087 | 173,035 |
| Other interest income | - | 33,049 |
| Bank interest charges | (20,077) | (53,438) |
| Interest on medium/long term loans | (187,980) | (189,633) |
| Medium/long term loan charges | (13,333) | (13,333) |
| Other interest charges | (218,149) | (274,649) |
| Total financial income and charges | (323,284) | (324,851) |
| Exchange rate gains | 877,769 | 491,421 |
| Exchange rate losses | (764,243) | (1,158,569) |
| Net exchange gains/(losses) | 113,526 | (667,147) |
| Total financial income/(charges) | (209,758) | (991,998) |
"Intercompany interest income" derives from operations during the year and regulated through intercompany accounts, remunerated at market rates.
"Interest on medium/long-term loans" refers to the "Intesa Loan", the "BNL Loan" and the "MPS Loan" as described at Note 31.
"Exchange gains realised" in 2021 amounted to Euro 382 thousand and "exchange losses realised" amounted to Euro 489 thousand. The translation of credit and debit balances at year-end resulted in the recognition of "non-realised exchange gains" of Euro 496 thousand and "non-realised exchange losses" of Euro 275 thousand.
The Company did not receive any dividends during 2021.
The result for the Parent Company includes the extraordinary, non-recurring gain of Euro 60.9 million, which is equal to the difference between the increase in capital in K-Way S.p.A. and the net book value of the assets and liabilities included in the business unit transferred.
Reference should be made to Note 41 below for further details of the transaction.
Income taxes (Euro 967 thousand) comprises current taxes of Euro 2.4 million, mainly Euro 1.5 million for IRES, Euro 0.6 million for IRAP and Euro 0.3 million for deferred tax charges, the benefits from application of the "Patent Box" rule for Euro 1.5 million and other minor items for Euro 0.1 million.
The reconciliation between the theoretical and actual rate is shown below:
| FY 2021 | FY 2020 | |
|---|---|---|
| Profit before taxes | 66,656,034 | 4,041,653 |
| Income tax rate | 24.0% | 24.0% |
| Theoretical IRES | (15,997,448) | (969,997) |
| Permanent tax differences effect | 14,362,132 | (120,517) |
| Prior year taxes | (155,297) | (157,743) |
| Patent Box benefit | 1,496,012 | 1,130,618 |
| Substitute taxes for alignment of Brand tax values (Article 110 of Law Decree No. 104/2020) |
- | (159,296) |
| Alignment of Brand tax values (Article 110 of Law Decree No. 104/2020) |
- | 1,521,276 |
| IRAP | (595,725) | (569,848) |
| Other changes | (76,513) | 23,450 |
| EFFECTIVE TAX CHARGE | (966,839) | 697,943 |
| Effective tax rate | (1.5%) | 17.3% |
The effective tax rate is strongly influenced by the income resulting from the contribution, carried out in tax neutrality, of the K-Way business unit to K-Way S.p.A. Net of this transaction, the effective tax rate would amount to 16.8%.
| Patent Box benefit | FY 2021 | FY 2020 |
|---|---|---|
| Effect prior years Effects in the current year |
- 1,496,012 |
149,115 981,503 |
| TOTAL | 1,496,012 | 1,130,618 |
The breakdown of intangible assets at December 31, 2021 compared to the previous year-end and the movements during the year are reported in the table below:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Concessions, brands and similar rights | 212,798 | 9,593,318 | (9,380,520) |
| Other intangible assets | 3,461,876 | 3,303,393 | 158,483 |
| Industrial patents & intellectual property rights |
92,977 | 109,062 | (16,085) |
| Total intangible assets | 3,767,651 | 13,005,773 | (9,238,122) |
The changes in the original costs of the intangible assets were as follows:
| Concessions, brands, and similar rights |
Other intangible assets |
Industrial patents |
Total | |
|---|---|---|---|---|
| Historic cost at 01.01.2020 |
14,006,064 | 34,136,306 | 192,148 | 48,334,518 |
| Additions | 1,316,755 | 7,917,542 | 18,533 | 3,252,830 |
| Divestments | (900,369) | - | - | (900,369) |
| Intercompany sales | (48,615) | - | - | (48,615) |
| Historic cost As at 31.12.2020 |
14,373,836 | - 36,053,849 |
210,679 | 50,638,364 |
| Additions | 133,693 | 1,735,265 | 4,350 | 1,873,008 |
| Divestments | - | (1,503) | (3,852) | (5,355) |
| Intercompany Transfers |
(9,409,573) | (868) | - | (9,410,441) |
| Historic cost As at 31.12.2021 |
5,097,955 | 37,786,743 | 211,178 | 43,095,876 |
The changes in the relative accumulated depreciation provisions were as follows:
| Concessions, brands, |
Other intangible | Industrial patents |
||
|---|---|---|---|---|
| and similar rights | assets | Total | ||
| Acc. Amort. at 01.01.2020 |
(4,660,794) | (31,201,479) | (84,863) | (35,947,136) |
| Amortisation | (119,725) | (1,548,975) | (16,755) | (1,685,455) |
| Reclass. Acc. Amort. |
- | - | - | - |
| As at 31.12.2020 | (4,780,517) | (32,750,455) | (101,619) | (37,632,592) |
| Amortisation | (104,640) | (1,574,411) | (16,582) | (1,695,633) |
| Reclass. Acc. Amort. |
- | - | - | - |
| Concessions, | Industrial | |||
|---|---|---|---|---|
| brands, | Other intangible | patents | ||
| and similar rights | assets | Total | ||
| Opening net | ||||
| book value at 01.01.2020 |
9,345,270 | 2,934,827 | 107,285 | 12,387,382 |
| Additions | 1,316,755 | 1,917,542 | 18,533 | 3,252,830 |
| Divestments | (900,369) | - | - | (900,369) |
| Intercompany sales | ||||
| (48,615) | - | - | (48.6159) | |
| Amortisation | (119,725) | (1,548,975) | (16,755) | (1,685,455) |
| Closing net | ||||
| book value | ||||
| As at 31.12.2020 | 9,593,318 | 3,303,393 | 109,061 | 13,005,773 |
| Additions | 133,693 | 1,735,265 | 4,350 | 1,873,308 |
| Divestments | - | (1,503) | (3,852) | (5,355) |
| Intercompany | ||||
| Transfers | (9,409,573) | (868) | - | (9,410,441) |
| Amortisation | (104,640) | (1,574,411) | (16,582) | (1,685,633) |
| Closing net | ||||
| book value | ||||
| As at 31.12.2021 | 212,798 | 3,461,876 | 92,977 | 3,767,651 |
The changes in intangible assets during 2021 are shown in the table below:
At December 31, 2021, the intangible assets report investments of Euro 1.9 million and amortisation of Euro 3.5 million.
The investments in "concessions, brands and similar rights" are due to the capitalisation of costs incurred for the registration of trademarks in new European countries, for renewals and extensions and for the purchase of software licenses.
The reduction in the account is mainly due to the transfer of the K-Way® brand as part of the conferment of the relative business unit to the company of the same name.
The breakdown of "other intangible assets" is as follows:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Software development | 3,439,734 | 3,293,632 | 146,102 |
| Other intangible assets | 22,142 | 9,761 | 12,381 |
| Total other intangible assets | 3,461,876 | 3,303,393 | 158,483 |
The account increased Euro 1.7 million, principally due to the implementation of new software programmes realised internally and decreased Euro 1.6 million due to the amortisation for the year.
The Group adopted IFRS 16 and utilised the exceptions under the standard on leasing contracts which, at the date of initial application, have a duration of equal to or less than 12 months and which do not contain a purchase option ("short-term leasing") and on leases whose underlying asset is of a low value ("low value asset").
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Right-of-use | 8,418,984 | 10,175,117 | (1,756,133) |
| Total right-of-use | 8,418,984 | 10,175,117 | (1,756,133) |
The changes in the original cost of the right-of-use were as follows:
| 2021 | 2020 | |
|---|---|---|
| Historic cost at 01.01 |
19,475,347 | 18,175,847 |
| Additions | 351,443 | 1,299,500 |
| Disposals and other changes | (507,158) | - |
| Reclassifications | (8,728,274) | - |
| Historic cost at 31.12. |
10,591,357 | 19,475,347 |
The changes in the relative accumulated depreciation provisions were as follows:
| 2021 | 2020 | |
|---|---|---|
| Acc. Deprec. at 01.01 |
(9,300,230) | (8,936,081) |
| Depreciation | (1,767,007) | (1,714,909) |
| Disposals and other changes | 166,589 | 1,350,760 |
| Reclassifications | 8,728,274 | - |
| Acc. Deprec. at 31.12. |
(2,172,373) | (9,300,230) |
The movements in the net book value of the right-of-use is shown below:
| 2021 | 2020 | |
|---|---|---|
| Net book value at 01.01 |
10,175,117 | 9,239,766 |
| Additions | 351,443 | 1,299,500 |
| Disposals and other changes | (340,569) | 1,350,760 |
| Depreciation | (1,767,007) | (1,714,909) |
| Net book value at 31.12. |
8,418,984 | 10,175,117 |
The breakdown of plant, machinery and other assets at December 31, 2021 compared to the previous year is shown in the table below:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Plant & machinery | 18,119 | 22,527 | (4,408) |
| Industrial & commercial equipment | 80,440 | 93,242 | (12,802) |
| Other assets | 2,765,343 | 2,880,547 | (115,204) |
| Total plant, machinery and other assets | 2,863,902 | 2,996,316 | (132,414) |
The changes in the historical cost of plant, machinery and other assets were as follows:
| Plant & machinery | Industrial & commercial |
|||
|---|---|---|---|---|
| equipment | Other Assets | Total | ||
| Historic cost at 01.01.2020 |
272,344 | 428,299 | 10,209,954 | 10,910,597 |
| Additions | - | 15,192 | 637,512 | 652,704 |
| Divestments | - | - | (5,182) | (5,182) |
| Reclass. | - | - | - | - |
| Historic cost As at 31.12.2020 |
272,344 | 443,493 | 10,842,285 | 11,558,120 |
| Additions | 7,603 | 15,755 | 668,521 | 691,879 |
| Divestments | - | - | (175,539) | (175,539) |
| Reclass. | - | - | - | - |
| Historic cost As at 31.12.2021 |
279,945 | 459,248 | 11,335,267 | 12,074,460 |
The changes in the relative accumulated depreciation provisions were as follows:
| Plant & machinery | Industrial & commercial equipment |
Other Assets | Total | |
|---|---|---|---|---|
| Acc. Deprec. | ||||
| at 01.01.2020 | (233,580) | (322,304) | (7,224,477) | (7,780,361) |
| Depreciation | (16,237) | (27,946) | (742,097) | (786,279) |
| Divestments | - | - | 4,837 | 4,837 |
| Reclass. | - | - | - | - |
| Acc. Deprec. As at 31.12.2020 |
(249,817) | (350,250) | (7,961,737) | (8,561,803) |
| Depreciation | (12,011) | (28,556) | (763,234) | (803,802) |
| Divestments | - | - | 122,219 | 122,219 |
| Reclass. | - | - | 32,829 | 32,829 |
| Acc. Deprec. As at 31.12.2021 |
(261,827) | (378,808) | (8,569,922) | (9,210,557) |
| Plant & machinery | Industrial & commercial equipment |
Other Assets | Total | |
|---|---|---|---|---|
| Opening net book value at 01.01.2020 |
38,764 | 105,995 | 2,985,477 | 3,130,236 |
| Additions | - | 15,192 | 637,512 | 652,704 |
| Divestments | - | - | (345) | (345) |
| Depreciation | (16,237) | (27,946) | (742,097) | (786,279) |
| Reclass. | - | - | - | - |
| Closing net book value As at 31.12.2020 |
22,527 | 93,242 | 2,880,547 | 2,996,316 |
| Additions | 7,603 | 15,755 | 668,521 | 691,879 |
| Divestments | - | - | (53,320) | (53,320) |
| Depreciation | (12,011) | (28,556) | (763,234) | (803,802) |
| Reclass. Closing net book value |
- | - | 32,829 | 32,829 |
| As at 31.12.2021 | 18,119 | 80,440 | 2,765,343 | 2,863,902 |
The changes in the plant and machinery are shown in the table below:
This account "other assets" consist of:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| EDP | 809,971 | 750,034 | 59,938 |
| Furnishings and fittings | 408,158 | 398,792 | 9,366 |
| Motor vehicles | 53,929 | 92,008 | (38,080) |
| Other assets | 1,493,285 | 1,639,713 | (146,428) |
| Total other assets | 2,765,343 | 2,880,547 | (115,204) |
Capex in the year relates to the acquisition of furniture and fittings and EDP for Euro 431 thousand, moulds for new products for Euro 170 thousand, and equipment and motor vehicles for Euro 16 thousand and other minor assets.
The account "other assets" includes the purchase cost of an IT collection comprising rare pieces which represents significant elements and representative of the IT revolution, in the 1970's and 1980's with the advent of the new personal computer. This collection is utilised in many events related to the promotion of the brands and logos of the Group. The account also includes the purchase cost of moulds for footwear, eyewear and helmets so that ownership is held in order to control the strategic stages of the production process utilised by the suppliers' of finished products.
The net book value of property, plant and equipment acquired according to the finance lease formula is reported below:
| Net value at December 31, 2021 |
Net value at December 31, 2020 |
Change | |
|---|---|---|---|
| EDP | 118,217 | 68,825 | 49,392 |
| Motor vehicles | 46,202 | 80,973 | (34,771) |
| Total | 164,419 | 149,798 | 14,621 |
The net book value at December 31, 2021 of property, plant and equipment acquired according to the finance lease formula relates to EDP for approx. Euro 118 thousand and motor vehicles for approx. Euro 46 thousand.
Reference should be made to Attachment 2 for information on the book value of the investments in subsidiaries and changes in the year and the relative portion of shareholders' equity.
| December 31, 2021 December 31, 2020 | Change | ||
|---|---|---|---|
| Investments in: |
|||
| - Subsidiaries |
105,822,624 | 35,772,624 | 70,050,000 |
| - Other companies |
127 | 127 | - |
| Total investments | 105,822,751 | 35,772,751 | 70,050,000 |
| Receivables: | |||
| - Other receivables |
31,983 | 31,983 | - |
| Total financial receivables | 31,983 | 31,983 | - |
| Total investments & other financial assets | 105,854,734 | 35,804,734 | 70,050,000 |
In line with the practice adopted by other large listed groups in Italy, BasicNet S.p.A. identifies in the negative differential between the share of net equity held in the subsidiary and its book value an indicator of an impairment for the investments of control in its financial statements.
This would occur only for the subsidiary K-Way S.p.A., whose full recoverability of the book value is outlined in detail in the independent expert opinion as part of the transaction outlined at Note 41. Other receivables refer to guarantee deposits.
The breakdown is shown below:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Deferred tax assets | 1,665,207 | 1,830,497 | (165,290) |
| Total deferred tax assets | 1,665,207 | 1,830,497 | (165,290) |
Deferred tax assets and liabilities are calculated on all the temporary differences arising between the book value in the consolidated financial statements and their assessable amount for tax purposes. The deferred tax assets and liabilities recognised and their impact are reported in the table below:
| December 31, 2021 | December 31, 2020 | ||||||
|---|---|---|---|---|---|---|---|
| (in Euro thousands) | Amount | Amount | |||||
| of | of | ||||||
| temporary | Rate | Tax effect | temporary | Rate | Tax | Change | |
| differences | % | differences | % | effect | 2021/2020 | ||
| Deferred tax assets: | |||||||
| - Excess doubtful debt provision | |||||||
| not deductible | (5,693) | 24.00% | (1,366) | (5,034) | 24.00% | (1,208) | (158) |
| - Inventory obsolescence provision | (1,399) | 24.00% | (335) | (2,193) | 25.50% | (559) | 224 |
| - Misc. charges temporarily non | |||||||
| deductible | (40) | 24.00% | (9) | (588) | 24.00% | (141) | 132 |
| - Prudent exchange differences, net | 221 | 24.00% | 53 | (469) | 24.00% | (113) | 166 |
| - Effect IAS 19 – Post | (30) | 24.00% | (7) | (40) | 24.00% | (10) | 3 |
| employment benefits provision | |||||||
| Total | (6,940) | (1,665) | (8,324) | (2,030) | 365 | ||
| Deferred tax liabilities: | |||||||
| - Amortisation/Depreciation | |||||||
| tax basis | - | 24.00% | - | 693 | 28.85% | 200 | (200) |
| Total | - | - | 693 | 200 | (200) | ||
| Net deferred tax liability (asset) | (6,940) | (1,665) | (7,630) | (1,830) | 165 | ||
| Deferred tax asset relating to fiscal | |||||||
| losses | |||||||
| Deferred tax liabilities (asset) | |||||||
| as per financial statements | (1,665) | (1,830) | 165 |
Deferred tax assets are recorded considering probable their recovery based on future profit expectations, and principally relate to non-deductible doubtful debt provisions (approx. Euro 1.4 million) and nondeductible inventory obsolescence provisions (approx. Euro 0.3 million).
The composition of the item is as follows:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Finished products and goods | 1,596,508 | 2,624,055 | (1,027,547) |
| Gross value | 1,596,508 | 2,624,055 | (1,027,547) |
| Inventory obsolescence provision | (1,397,060) | (2,192,775) | 795,715 |
| Total net inventories | 199,448 | 431,280 | (231,832) |
"Inventories" includes samples to be sold to licensees. Inventories are valued under the weighted average cost method and net of the obsolescence provision considered reasonable for a prudent valuation of inventories of prior year sample collections. The movements in the provision during the year were as follows:
| 2021 | 2020 | |
|---|---|---|
| Inventory obsolescence provision at 01.01 | 2,192,775 | 1,892,775 |
| Provisions in the year | (150,000) | 300,000 |
| Utilisations | 100,000 | - |
| Conferment to K-Way S.p.A. | (845,715) | - |
| Inventory obsolescence provision at 31.12 | 1,397,060 | 2,192,775 |
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Trade receivables - Italy |
206,935 | 371,443 | (164,508) |
| Trade receivables - Abroad |
12,154,429 | 12,121,878 | 32,551 |
| Doubtful debt provision |
(5,949,569) | (5,259,436) | (690,133) |
| Total trade receivables | 6,411,795 | 7,233,885 | (822,090) |
In particular, the breakdown of foreign receivables is as follows:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Europe | 1,148,494 | 1,734,348 | (585,853) |
| The Americas | 1,815,040 | 1,681,125 | 133,916 |
| Asia and Oceania | 9,040,466 | 8,449,915 | 590,551 |
| Middle East and Africa | 150,428 | 256,490 | (106,062) |
| Total | 12,154,429 | 12,121,878 | 32,551 |
"Trade receivables" were written down to their realisable value through the doubtful debt provision, although the majority of the receivables are secured by bank guarantees.
The provision at the end of the year represents a prudent estimate of the risk. The movements in the doubtful debt provision during the year were as follows:
| 2021 | 2020 | |
|---|---|---|
| Doubtful debt provision at 01.01 | 5,259,436 | 1,429,206 |
| Utilization for administration procedures and other losses |
(236,873) | (478,660) |
| Provisions in the year | 737,627 | 4,308,890 |
| Adjustment to receivables in foreign currencies provision |
189,279 | - |
| Doubtful debt provision at 31.12 | 5,949,569 | 5,259,436 |
The utilisation of the provision relates to the write-off made on the certainty of the receivable irrecoverability and consequent tax deductibility of the loss.
The book value of receivables, all due within one year, is in line with their fair value.
| December 31, 2021 December 31, 2020 | Change | ||
|---|---|---|---|
| Receivables from Group companies |
68,620,732 | 72,088,335 | (3,467,603) |
| Tax receivables | 621,450 | 856,206 | (234,756) |
| Other receivables | 1,880,767 | 1,371,462 | 509,305 |
| Total other current assets | 71,122,949 | 74,316,003 | (3,193,054) |
The breakdown of "receivables from Group companies" is as follows:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Trade receivables | |||
| BasicItalia S.p.A with sole shareholder | 525,619 | 3,850,240 | (3,324,621) |
| BasicNet Asia Company Limited | 58,240 | 46,383 | 11,857 |
| (Vietnam) Ltd | |||
| Kappa France S.a.s. | 2,218,290 | 826,674 | 1,391,616 |
| Preppy Cotton AG | 27,463 | 205,337 | (177,874) |
| BasicRetail S.r.l. with sole shareholder | - | 150,000 | (150,000) |
| TOS S.r.l. with sole shareholder | 16,111 | 27,347 | (11,236) |
| Kappa Europe S.A.S. | 6,007 | 16,000 | (9,993) |
| Jesus Jeans S.r.l. with sole shareholder | 8,105 | 3,207 | 4,898 |
| K-Way S.p.A. | 409,863 | - | 409,863 |
| K-Way Retail S.r.l. |
5,833 | - | 5,833 |
| K-WayRetail SUISSE (formerly | |||
| BasicRetail SUISSE) | 1,667 | 10,000 | (8,333) |
| Basic Village S.p.A. with sole shareholder | 383 | 1,065 | (682) |
| Fashion S.r.l. | 297 | - | 297 |
| Total trade receivables | 3,277,879 | 5,136,253 | (1,858,374) |
| Financial receivables | |||
| BasicItalia S.p.A with sole shareholder | - | 27,891,391 | (27,891,391) |
| Kappa Europe S.A.S. | 4,000,000 | 3,000,000 | 1,000,000 |
| TOS S.r.l. with sole shareholder | 9,198,488 | 9,599,624 | (401,136) |
| Basic Village S.p.A with sole shareholder |
21,086,478 | 17,024,600 | 4,061,878 |
| K-Way S.p.A. | 27,900,849 | - | 27,900,849 |
| K-Way Retail S.r.l. | 838,292 | - | 838,292 |
| BasicRetail S.r.l. with sole shareholder | 1,981,030 | 828,204 | (1,152,826) |
| BasicAir S.r.l. with sole shareholder | 337,716 | 302,313 | 35,403 |
| BasicTrademark S.r.l. with sole shareholder | - | 8,305,951 | (8,305,951) |
| Total financial receivables |
65,342,853 | 66,952,082 | (1,609,229) |
| Total | 68,620,732 | 72,088,335 | (3,467,603) |
Financial receivables originate from loans and advances for the cash needs of the subsidiaries within the centralised treasury management; these receivables are at market interest rates and vary in accordance with the financial cash flow needs within the Group.
The increase in "financial receivables" from Basic Village S.p.A. is due to the loan made to support investment linked to the purchase and restructuring of the property located in Milan.
No receivables have a residual duration of above 5 years.
The account "tax receivables" includes withholdings on royalties totalling Euro 442 thousand.
The account "other receivables" includes the premium paid to the insurance company against the Directors Termination Indemnities for the Chairman of the Board of Directors of Euro 1.5 million, as approved by the Shareholders' Meeting for the 2019-2021 three-year mandate, as described in the Remuneration Report to which reference should be made and other minor amounts.
The table below shows the breakdown of the account:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Prepaid expenses on future collections |
3,307,654 | 3,526,994 | (219,340) |
| Rentals, leases, hire and other |
65,527 | 159,447 | (93,920) |
| Assistance and maintenance contract | 325,335 | 223,492 | 101,843 |
| Others | 16,754 | 76,292 | (59,538) |
| Total prepayments | 3,715,270 | 3,986,225 | (270,955) |
Prepaid costs include creative personnel costs, sample costs for collections for which the corresponding sales revenues have not been realised and costs for trade fairs and exhibitions for future collections and the relative sales meetings.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Bank and postal deposits | 1,448,745 | 3,406,692 | (1,957,947) |
| Cash in hand and similar | 2,653 | 3,168 | (515) |
| Total cash and cash equivalents | 1,451,398 | 3,409,860 | (1,958,462) |
"Bank deposits" refer to temporary current account balances principally due to receipts from clients.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Share capital | 31,716,673 | 31,716,673 | - |
| Treasury shares | (30,647,910) | (24,678,900) | (5,969,010) |
| Legal reserve | 6,343,334 | 6,343,334 | - |
| Treasury shares in portfolio reserve | 30,647,910 | 24,678,900 | 5,969,010 |
| Other reserves: | |||
| - cash flow hedge reserve |
- | - | - |
| - remeasurement reserve for defined benefit plans (IAS 19) |
(137,156) | (115,687) | (21,469) |
| - retained earnings |
44,247,428 | 48,732,700 | (4,485,272) |
| - IAS 19 Reserve |
(86,584) | (86,584) | - |
| - unrealised exchange gains reserve |
174,736 | 62,494 | 112,242 |
| Net profit | 65,689,195 | 4,739,596 | 60,949,599 |
| Total Shareholders' Equity | 147,947,626 | 91,392,526 | 56,555,100 |
The account includes:
Pursuant to Article 110 of Legislative Decree No. 104/2020, which allowed for the partial realignment of the tax value of the brands in the portfolio to the higher value recorded in the financial statements, the Company tied up its reserves subject to tax suspension for an amount of Euro 5.2 million equal to the higher values realigned.
The share capital of BasicNet S.p.A. amounts to Euro 31,716,673.04 (divided in 60,993,602 ordinary shares) of Euro 0.52 each fully paid in.
In May 2021, as approved by the Shareholders' AGM of BasicNet S.p.A. of April 9, 2021, in relation to the allocation of the 2020 net profit, a dividend of Euro 0.06 per share was distributed to each of the ordinary shares in circulation, for a total pay-out of approx. Euro 3.1 million.
Based on the share buy-back programme, at the reporting date the Company held 9,718,000 shares, equal to 15.93% of the share capital, for a total investment of approx. Euro 30.6 million. The weighted average number of shares outstanding in the year was 51,275,602.
The other gains and losses recorded directly in equity in accordance with IAS 1 are reported below and recognised to the Comprehensive Income Statement.
| (Euro thousands) | December 31, 2021 | December 31, 2020 | Change |
|---|---|---|---|
| Effective part of the Gains/losses on cash flow hedge instruments |
- | - | - |
| Re-measurement of post-employment benefits (IAS 19) (*) |
(28) | (10) | (18) |
| Tax effect relating to the Other items of the comprehensive income statement |
7 | 2 | 5 |
| Total other gains/(losses), net of tax effect | (21) | (8) | (13) |
(*) items which may not be reclassified to the profit and loss account
The tax effect relating to "Other gain/losses" is as follows:
| (Euro thousands) | December 31, 2021 | December 31, 2020 | |||||
|---|---|---|---|---|---|---|---|
| Gross value |
Tax Charge/ Benefit |
Net value |
Gross value |
Tax Charge/ Benefit |
Net value |
||
| Effective part of Gains/losses on cash flow hedge instruments |
- | - | - | - | - | - | |
| Re-measurement of post-employment benefits (IAS 19) (*) |
(28) | 7 | (21) | (10) | 2 | (8) | |
| Total other gains/(losses), net of tax effect |
(28) | 7 | (21) | (10) | 2 | (8) |
(*) items which may not be reclassified to the profit and loss account
The statement on the availability of the reserves at December 31, 2021 is shown below:
| December 31, 2021 | December 31, 2020 | Change | ||
|---|---|---|---|---|
| Share capital | 31,716,673 | 31,716,673 | - | |
| Treasury shares Share premium reserve |
(30,647,910) | (24,678,900) - |
(5,969,010) | |
| Legal reserve IAS adjustment reserve |
B | 6,343,334 - |
6,343,334 - |
- - |
| Reserve for treasury shares in portfolio Ordinary reserve |
30,647,910 - |
24,678,900 - |
5,969,010 - |
|
| Extraordinary reserve | - | - | - | |
| Other reserves: | ||||
| Cash Flow Hedge Reserve | D | - | - | - |
| Remeasuring reserve of employee defined benefit plans (IAS 39) |
D | (137,156) | (115,687) | (21,469) |
| Retained earnings | A,B,C | 44,247,428 | 48,732,700 | (4,485,272) |
| IFRS 16 Reserve | B | (86,584) | (86,584) | - |
| Exchange gains reserve | 174,736 | 62,494 | 112,242 | |
| Net profit | 65,689,195 | 4,739,596 | 60,949,599 | |
| Total | 147,947,626 | 91,392,526 | 56,555,100 |
Key: A: for share capital increase, B: for coverage of losses - C: for distribution to shareholders - D: non utilisable
The changes in the medium/long-term loans during the year are shown below:
| (Euro thousands) | 31/12/2020 | New Loans | Repayments | 31/12/2021 | Short-term portion |
Medium/long-term portion |
|---|---|---|---|---|---|---|
| "Intesa Loan - FCG" | 5,500 | - | - | 5,500 | 344 | 5,156 |
| "BNL Loan" | 3,125 | - | (1,250) | 1,875 | 1,250 | 625 |
| "MPS Loan" | 11,375 | - | (3,250) | 8,125 | 3,250 | 4,875 |
| Balance | 20,000 | - | (4,500) | 15,500 | 4,844 | 10,656 |
The maturity of the long-term portion of loans is highlighted below:
| December 31, 2021 December 31, 2020 | Change | ||
|---|---|---|---|
| Loans: | |||
| - "Intesa Loan - FCG" |
5,156,250 | 5,500,000 | (343,750) |
| - "BNL Loan" |
625,000 | 1,875,000 | (1,250,000) |
| - "MPS Loan" |
4,875,000 | 8,125,000 | (3,250,000) |
| Total medium/long-term loans | 10,656,250 | 15,500,000 | (4,843,750) |
| - Other lenders |
120,050 | 105,499 | 14,551 |
| Total other financial payables | 120,050 | 105,499 | 14,551 |
| Total loans | 10,776,300 | 15,605,499 | (4,829,199) |
The "Intesa Loan" was disbursed in October 2020 for Euro 5.5 million, has a duration of six years, including a two-year grace period, and is repayable in quarterly instalments, starting from September 2022, at a contractual rate of 1.05% per quarter. The use is restricted to payments for the purchase of services and salary payments to BasicNet employees. The contractual conditions do not include financial covenants and the loan is directly guaranteed by the SME Guarantee Fund (90% of the capital).
The "BNL Loan" was disbursed in November 2016 for Euro 7.5 million; it has six-year duration and is repayable in quarterly instalments at a quarterly Euribor rate increased by 95 basis points. No financial covenants are stipulated, although the maintenance of a number of ownership conditions are required concerning BasicNet S.p.A., in particular that the overall investment (direct or indirect) of BasicWorld S.r.l. in BasicNet S.p.A. should not reduce below 30%. The loan is supported by a second level mortgage on the "Basic Village" building in Turin and a first level mortgage on the adjacent building, acquired at the end of 2016.
The "MPS Loan" was issued in July 2017 for Euro 13 million and is of six-year duration of which 2 years grace period, repayable in quarterly instalments from December 2019 at a quarterly Euribor rate (although not below zero) plus 170 basis points. No financial covenants are stipulated, although the maintenance of a number of ownership conditions are required concerning BasicNet S.p.A., in particular that the overall investment (direct or indirect) of BasicWorld S.r.l. in BasicNet S.p.A. should not reduce below 30%. The loan is supported by a pledge on the shares of TOS S.r.l., owner of the Sebago brand, with obligation to maintain the full investment in the company by the Group.
"Payables to other lenders" relate to the accounting of the capital line of finance leases recorded in the accounts.
For completeness of information we provide details of the medium/long-term loans by maturity.
| December 31, 2021 December 31, 2020 | Change | ||
|---|---|---|---|
| Medium/long term loans: | |||
| - due within 5 years |
10,656,250 | 14,468,750 | (3,812,500) |
| - due beyond 5 years |
- | 1,031,250 | (1,031,250) |
| Total medium/long term loans | 10,656,250 | 15,500,000 | (4,843,750) |
| Leasing payables | 120,050 | 105,499 | 14,551 |
| Total leasing payables (maturity within 5 years) |
120,050 | 105,499 | 14,551 |
| Total loans | 10,776,300 | 15,605,499 | (4,829,199) |
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Bank payables due within one year: | |||
| - short-term portion of medium/long-term | 4,843,750 | 4,500,000 | 343,750 |
| loans | |||
| - bank overdrafts and bills |
8,000,000 | 14,000,000 | (6,000,000) |
| - interest expense on loans |
10,755 | 1,192 | 9,563 |
| Total bank payables | 12,854,505 | 18,501,192 | (5,646,687) |
The average interest rates for BasicNet S.p.A. were:
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| cash advances | 1.05% | 0.32% |
| medium-term loan | 1.01% | 1.01% |
"Bank payables" include the short-term portion of loans, outlined at Note 31 and the relative interest matured and to be settled the following January.
Reference should be made to the Directors' Report for the changes in the net financial positions.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Payables for rights-of-use | 8,440,693 | 10,195,406 | (1,754,713) |
| Total payables for right-of-use | 8,440,693 | 10,195,406 | (1,754,713) |
Payables for right-of-use are recognised from 2020 in accordance with IFRS 16. During the year, payables were settled for Euro 1.7 million.
The account includes the post-employment benefits for employees of Euro 1.1 million and the termination indemnities of Directors of Euro 1.3 million.
The changes in the year of the post-employment benefit liability were as follows:
| December 31, 2021 | December 31, 2020 | |||||
|---|---|---|---|---|---|---|
| Defined benefit plans |
Defined contrib. plans |
Total | Defined benefit plans |
Defined contrib. plans |
Total | |
| Change in the balance sheet: | ||||||
| Net liabilities recognized at begin. of year | 1,202,911 | - | 1,202,911 | 1,233,817 | - | 1,233,817 |
| Interest | 5,967 | - | 5,967 | 12,556 | - | 12,556 |
| Pension cost, net of withholdings | - | 519,282 | 519,282 | - | 526,704 | 526,704 |
| Benefits paid | (15,532) | - | (15,532) | (53,060) | - | (53,060) |
| Payments to the INPS treasury fund | - | (359,876) | (359,876) | - | (373,379) | (373,379) |
| Payments to other supp. pension fund | - | (159,405) | (159,405) | - | (153,325) | (153,325) |
| - Actuarial gains/(losses) | 28,249 | - | 28,249 | 9,598 | - | 9,598 |
| Internal transfers to the Group | (138,668) | - | (138,668) | - | - | - |
| Net liabilities recognised in the accounts | 1,082,927 | - | 1,082,927 | 1,202,911 | - | 1,202,911 |
| Change in the income statement: | ||||||
| Interest | 5,967 | - | 5,967 | 12,556 | - | 12,556 |
| Pension Cost | - | 519,282 | 519,282 | - | 526,704 | 526,704 |
| Total charges/(income) for post employment benefits |
5,967 | 519,282 | 525,249 | 12,556 | 526,704 | 539,260 |
The account "employee benefits" includes the present value of the liabilities of the company in accordance with Article 2120 of the Civil Code. Based on the regulatory changes in 2007, the sums matured prior to January 1, 2007 to employees are recognised as defined benefit plans in accordance with IAS 19 – Employee benefits; those matured subsequent to this date are on the other hand recognised as defined contribution plans in accordance with the same standard.
Within the Company there are no other plans other than defined benefit plans. The actuarial valuation of the Post-Employment Benefit is prepared based on the "matured benefits" method through the Projected Unit Credit Method in accordance with IAS 19. Under this method the valuation is based on the average present value of the pension obligations matured based on the employment service up to the time of the valuation, without projecting the remuneration of the employee in accordance with the regulatory modifications introduced by the Pension Reform.
The actuarial model for the measurement of the post-employment benefit is based on various assumptions of a demographic and financial nature. The principal assumptions of the model concerning the actuarial valuations relating to personnel costs are:
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| discount rate | 1.09% | 0.53% |
| inflation rate: | 1.75% | 0.80% |
| annual increase in post employment benefit |
2.81% | 2.10% |
| annual increase in salaries: | 1.00% | 1.00% |
The change in the annual discount rate reflects the decrease in the yields of the "corporate bonds" of the basket utilised (Iboxx Eurozone Corporate) at the balance sheet date.
The sensitivity analysis carried out on the basis of the following variables: 1) inflation rate +0.25%/- 0.25%, 2) discount rate +0.25%/-0.25%, 3) turnover rate +1%/-1% shows non-material impacts of less than Euro 24 thousand.
| December 31, 2021 December 31, 2020 | Change | ||
|---|---|---|---|
| Guarantee deposits | 983,052 | 892,633 | 90,419 |
| Medium/long term tax payables | - | 15,357 | (15,357) |
| Total other non-current liabilities | 983,052 | 907,990 | 75,062 |
The "guarantee deposits" include the guarantees received from licensees (in place of bank or corporate guarantees), to cover the minimum royalties guaranteed contractually.
| December 31, 2021 December 31, 2020 | Change | ||
|---|---|---|---|
| Trade payables - Italy |
3,478,154 | 4,539,602 | (1,061,448) |
| Trade payables - Foreign |
844,115 | 1,410,365 | (566,250) |
| Total trade payables | 4,322,269 | 5,949,967 | (1,627,698) |
"Trade payables" are all due in the short-term period.
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Europe | 295,072 | 502,489 | (207,417) |
| The Americas | 155,681 | 267,645 | (111,964) |
| Asia and Oceania | 390,525 | 639,821 | (249,297) |
| Middle East and Africa | 2,837 | 410 | (2,427) |
| Total | 844,115 | 1,410,365 | (566,250) |
In particular, the breakdown of foreign suppliers is as follows:
At the date of the present report there are no initiatives for the suspension of supplies, payment injunctions or executive actions by creditors against BasicNet S.p.A.. No interest is charged on trade payables which are normally settled between 30 and 120 days. The carrying value of trade payables approximates their fair value.
The breakdown of this account is shown in the following table:
| December 31, 2021 December 31, 2020 | Change | ||
|---|---|---|---|
| Tax payables: | |||
| IRES | 4,273,253 | 2,019,115 | 2,254,138 |
| Withholding taxes | 10,885 | 9,803 | 1,082 |
| VAT | 349,845 | 499,273 | (149,428) |
| Employee contributions | 269,585 | 269,956 | (371) |
| IRAP TAXES | - | - | - |
| Tax payables | 121,554 | 178,901 | (57,348) |
| Total tax payables | 5,025,122 | 2,977,048 | 2,048,074 |
The account "IRES" concerns the payable in the year.
The VAT payable is consequent of the transfers of balances by the companies within the Group VAT consolidation.
| December 31, 2021 December 31, 2020 | Change | ||
|---|---|---|---|
| Payables to Group companies | 9,282,020 | 1,295,819 | 7,986,201 |
| Other payables | 2,768,874 | 4,018,569 | (1,249,694) |
| Accrued expenses | 326,732 | 303,430 | 23,302 |
| Total other current liabilities | 12,377,626 | 5,617,818 | 6,759,808 |
"Other payables" at December 31, 2021 principally include payables to social security institutions of Euro 0.6 million for the year 2021 and paid in 2022, employee, consultant and director payables of approx. Euro 2.1 million, which include vacation days matured at December 31, 2021 and other items of Euro 0.1 million. All payables are due within one year.
The "accruals" refer to employee costs for the 14th month of the year.
The breakdown of "Payables to Group companies" are shown below:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Trade payables: | |||
| Basic Properties America Inc. | 814,660 | 746,035 | 68,625 |
| BasicNet Asia Ltd. | 301,418 | 264,826 | 36,562 |
| BasicItalia S.p.A with sole shareholder | 2,273 | 186,777 | (184,505) |
| Basic Village S.p.A with sole shareholder |
141,298 | 96,479 | 44,819 |
| Kappa Europe S.A.S. | 36,382 | - | 36,382 |
| Kappa France S.a.s. | 2,226 | 2,226 | |
| K-Way S.p.A. | 328 | 328 | |
| Basic Retail S.r.l. | (40) | - | (40) |
| Jesus Jeans S.r.l. | 12,000 | - | 12,000 |
| BasicNet Asia Company (Vietnam) Ltd. |
- | 1,702 | (1,702) |
| Trade payables | 1,310,995 | 1,295,819 | 15,176 |
| Financial payables | |||
| BasicTrademark S.r.l. with sole |
| Total | 9,282,020 | 1,295,819 | 7,896,200 | |
|---|---|---|---|---|
| Trade payables | 7,971,024 | - | 7,971,024 | |
| BasicItalia S.p.A with sole shareholder |
2,013,673 | - | 2,013,673 | |
| shareholder | 5,957,351 | - | 5,957,351 |
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| Royalties | 327,887 | 6,000 | 321,887 |
| Total deferred income | 327,887 | 6,000 | 321,887 |
"Deferred income" for royalties refer to invoicing for revenues which will mature in the following year.
The details of the guarantees given are as follows:
| December 31, 2021 | December 31, 2020 | Change | |
|---|---|---|---|
| - Guarantees to: subsidiaries |
131,550,000 | 97,150,000 | 34,400,000 |
| Total | 131,550,000 | 97,150,000 | 34,400,000 |
The sureties given on behalf of the subsidiaries refer for Euro 900 thousand to the guarantee given to the Unicredit Group on behalf of Basic Village S.p.A. against the loan granted in 2007 for the purchase of the building, guaranteed also by a first level mortgage on the building, for Euro 915 thousand to the guarantee given in 2008 by Intesa Sanpaolo S.p.A. on behalf of BasicItalia S.p.A. against 50% of the mortgage loan granted for the purchase of the building and for the remainder, Euro 129.7 million, guarantees given on behalf of BasicItalia S.p.A., the Kappa Europe Group, Basic Trademark S.r.l. and K-Way S.p.A., to various credit institutions, to guarantee the commercial credit lines. The increase in the period is due to the guarantees provided in favour of the newly incorporated K-Way S.p.A.
Finally, the shares of TOS S.r.l. are subject to a pledge in favour of MPS Capital Services Banca per le Imprese S.p.A. as guarantee of the loan issued in July 2017.
During the year, the Group completed the internal reorganisation of K-Way's operations, with its concentration within the company: this initiative, which does not entail any change in the Group's ownership structure or equity structure, supports a better focus on the brand.
In particular, the project involved
These corporate transactions, considered as transactions under common control, have multiple impacts on these financial statements.
In the absence of specific guidance for transactions under common control, the Company, applying the prevailing practice and the Assirevi OPI 1R document, considered the economic substance of the contribution as existing and therefore applied the accounting model of IFRS 3 ("acquisition method"). In order to determine the most appropriate accounting approach, in line with the criteria established by IAS 8.10, the economic substance of the transaction as a whole has been considered a critical element rather than the mere legal structure put in place to implement it. The choice of the criterion adopted therefore derives primarily from the effective reorganization of operating activities, from a substantial rather than legal point of view - with the already described aims of greater proximity to the markets, rationalization and efficiency of functions - which will have to guarantee greater generation of future added value for all the entities involved.
In this context, the transferred business was therefore recorded by the transferee at its real value, which was higher than the net book value of the assets and liabilities comprising it in the books of the transferee, BasicNet S.p.A. The real value of the business was the subject of a specific appraisal by an independent third party, pursuant to art. 2343 of the Italian Civil Code, whose findings were further confirmed by a subsequent appraisal drawn up for the purposes of art. 2343-quater of the Italian Civil Code.
Therefore, the transfer of the K-Way business unit against the capital increase resolved by the Shareholders' Meeting of K-Way S.p.A. entailed
The transaction was carried out under the tax neutrality regime, pursuant to the provisions of the Consolidated Law on Income Taxes in force.
Moreover, from H2 and as a result of the aforementioned transaction, the Company no longer includes in its revenues the flow of royalties from commercial licensees, sourcing commissions from production licensees and sales of samples originating from the K-Way brand, and instead recognises remuneration for the Powered by activity from this subsidiary.
The spin-off of the K-Way business unit from BasicItalia S.p.A. to K-Way S.p.A. - both fully controlled by BasicNet S.p.A.- entailed for the Company the reclassification of a portion of the equity investment amounting to Euro 25.7 million (resulting from a gross value of Euro 47.6 million and a write-down provision of Euro 21.9 million). The accounting treatment of this transaction, which also utilises a tax neutrality regime, was carried out in continuity of accounting values between the spin-off and the beneficiary, as provided for by the prevailing practice and the Assirevi document OPI 2R.
The principal risks and uncertainties of the activities of the Company and of the Group and the activities undertaken to reduce them or avoid them, which are undertaken at Group level, are described in the Directors' Report.
The financial instruments of BasicNet S.p.A. include:
It is recalled that the Company and the Group only subscribes to cash flow hedges, to hedge against interest and currency risks.
In accordance with the requirements of IFRS 7 in relation to financial risks, the types of financial instruments present in the financial statements, with indication of the valuation criteria applied, are reported below:
| (Euro thousands) | Financial instruments at fair value recorded through: |
Financial instruments at amortised cost |
Non-listed investments valued at cost |
Book value at 31.12.2021 |
Fair value As at 31.12.2021 |
|
|---|---|---|---|---|---|---|
| Income | Shareholders | |||||
| Statement | Equity | |||||
| Assets: | ||||||
| Equity invest. & other | ||||||
| financial assets | - | - | - | 105,855 | 105,855 | 105,855 |
| Cash and cash equivalents | - | - | 1,451 | - | 1,451 | 1,451 |
| Trade receivables | - | - | 6,412 | - | 6,412 | 6,412 |
| Other current assets | - | - | 71,123 | - | 71,123 | 71,123 |
| Derivative financial | - | - | - | - | - | - |
| instruments | ||||||
| Liabilities: | ||||||
| Medium/long-term loans | - | - | 10,776 | - | 10,776 | 10,776 |
| Bank payables | - | - | 12,855 | - | 12,855 | 12,855 |
| Trade payables | - | - | 4,322 | - | 4,322 | 4,322 |
| Other current liabilities | - | - | 12,378 | - | 12,378 | 12,378 |
| Derivative financial | - | - | - | - | - | - |
| instruments |
The financial risk factors, identified in IFRS 7 – Financial instruments: additional disclosures, are described below:
c. the risk that the fair value or the future cash flows of a financial instrument fluctuate following changes in market prices (other than changes determined from interest rate or currency risk), whether the changes are determined by specific factors related to the financial instrument or its issuer, or whether it is due to factors which influence all similar financial instruments traded on the market ("price risk");
the risk that one of the parties that signs a contract of a financial nature does not comply with an obligation ("credit risk");
The Company is exposed to the risk of fluctuations of commodity prices relating to raw materials (wool, cotton, rubber, synthetic fibre etc.) incorporated in the sample collections acquired on international markets, for resale to the licensees.
The Company does not hedge these risks as not directly dealing with raw materials but only finished products and the fluctuations can be transferred on to the final sales price.
BasicNet S.p.A. has subscribed the majority of its financial instruments in Euro which corresponds to its functional and presentation currency. Operating on the international market the Company is also exposed to fluctuations in exchange rates, principally the US Dollar against the Euro.
In 2021, exchange losses were recorded of Euro 107 thousand, while unrealised exchange gains were recorded of Euro 221 thousand, for a net exchange gain of Euro 114 thousand (Note 16).
The Company undertakes hedging of the currency risks at Group level.
The composition of the gross financial debt between fixed and variable interest rates at December 31, 2021 is shown below:
| December 31, 2021 | % | December 31, 2020 | % | |
|---|---|---|---|---|
| Fixed rate | 5,510,755 | 23.3% | 5,501,192 | 16.1% |
| Variable rate | 18,120,050 | 76.7% | 28,605,499 | 83.9% |
| Gross debt | 26,630,805 | 100.0% | 34,106,691 | 100.0% |
The interest on the short-term credit lines are on an average 1.05% in accordance with the type of lending, as illustrated in Note 31.
Where at December 31, 2021 the interest rate on long/term loans at that date were 100 basis points higher (or lower) compared to the actual rates, there would be a higher financial charges (lower), before the tax effect, respectively of Euro +186 thousand and Euro -186 thousand.
The doubtful debt provision (Note 26) which includes provisions against specific credit positions and a general provision on receivables not covered by guarantees, represents approx. 48.1% of trade receivables at December 31, 2021.
Reference should to the Explanatory Notes of the consolidated financial statements.
The table below illustrates the cash flow timing of payments on medium/long-term debt:
| (in Euro thousands) | Book value | Future interest income/ (expense) |
Contractual cash flows |
Within 1 year |
From 1 to 5 years |
Beyond 5 years |
|---|---|---|---|---|---|---|
| "Intesa Loan - FCG" | 5,500 | 168 | 5,668 | 402 | 5,266 | - |
| "BNL Loan" | 1,875 | 6 | 1,881 | 1,255 | 626 | - |
| "MPS Loan" | 8,125 | 127 | 8,252 | 3,329 | 4,924 | - |
| Lease payables | 120 | 4 | 124 | 57 | 67 | - |
| Payables for rights-of-use | 8,441 | 211 | 8,652 | 1,824 | 6,815 | 14 |
| Total financial liabilities | 24,061 | 517 | 24,578 | 6,867 | 17,697 | 14 |
The risk that the loans within the company contain clauses (covenants) which allow the counterparties to request the creditor on the occurrence of certain events or circumstances the immediate repayment of the sums granted and not yet due, generating a liquidity risk. There are no covenants on the loans in place.
The transactions undertaken by BasicNet S.p.A. with the companies belonging to the Group in the ordinary management and regulated at market conditions were:
The income statement effects deriving from these transactions are summarised as follows:
| BasicNet Group companies | Direct sales | Other income | Royalty income |
Financial income |
Total |
|---|---|---|---|---|---|
| BasicItalia S.p.A with sole shareholder |
1,330,154 | 325,355 | 4,407,191 | 123,754 | 6,186,454 |
| Superga Trademark S.r.l. with sole shareholder |
- | 5,200,000 | - | - | 5,200,000 |
| Kappa France S.a.s. | 125,540 | 20,000 | 1,318,689 | 14,422 | 1,478,650 |
| TOS S.r.l. with sole shareholder | - | 230,000 | - | 98,761. | 328,761 |
| BasicNet Asia Ltd. (Hong Kong) | 7,349 | - | - | - | 7,349 |
| Preppy Cotton AG | 1,006 | - | 56,051 | - | 57,057 |
| Basic Village S.p.A with sole shareholder |
- | 80,000 | - | 2,904 | 82,904 |
| BasicNet Asia Company Limited (Vietnam) Ltd |
7,403 | - | - | - | 7,403 |
| Jesus Jeans S.r.l. with sole shareholder |
- | 6,000 | - | - | 6,000 |
| K-Way S.p.A. with sole shareholder | 2,318 | 489,863 | - | - | 492,181 |
| K-WayRetail S.r.l. with sole shareholder |
- | 10,000 | - | - | 10,000 |
| BasicAir S.r.l. with sole shareholder | - | 27,000 | - | - | 27,000 |
| K-WayRetail SUISSE S.A. (formerly BasiRetail SUISSE) |
- | 10,000 | - | - | 10,000 |
| BasicRetail S.r.l. with sole shareholder |
- | 130,000 | - | - | 130,000 |
| Total revenues | 1,473,769 | 6,528,218 | 5,781,931 | 239,841 | 14,023,759 |
| BasicNet Group companies | Cost of sales | Cost per sponsor | Selling, general and administrative costs, royalties expenses |
Total |
|---|---|---|---|---|
| Basic Village S.p.A with sole shareholder |
- | - | (659,174) | (659,174) |
| BasicNet Asia Ltd. (Hong Kong) | - | - | (687,919) | (687,919) |
| BasicNet Asia Company Limited (Vietnam) Ltd. |
- | - | (352,362) | (352,362) |
| K-Way S.p.A. with sole shareholder | - | (19,713) | - | (19,713) |
| K-WayRetail S.r.l. with sole shareholder | - | (9,681) | - | (9,681) |
| Jesus Jeans S.r.l. with sole shareholder | - | - | (12,000) | (12,000) |
| Kappa France S.a.s. | (83,472) | - | - | (83,472) |
| BasicItalia S.p.A with sole shareholder | - | (467,313) | - | (467,313) |
| BasicRetail S.r.l. with sole shareholder | - | (199,576) | - | (199,576) |
| Total costs | (83,472) | (696,283) | (1,711,454) | (2,491,210) |
The effects of the transfer of the K-Way business to the subsidiary of the same name, described in detail in note 41 above and to which reference should be made in full, are not reported in this note as they are outside the scope of ordinary operations.
A breakdown of the transactions with related parties with reference to the note to which they refer for the year 2021 is shown below:
| Investments (Note 23) |
Receivables (Note 26) |
Payables (Note 38) |
Revenues (Note 43) |
Costs (Note 43) |
|
|---|---|---|---|---|---|
| Subsidiaries | 105,822,624 | 68,620,732 | 9,282,020 | 14,023,759 | 2,491,210 |
| Interests in joint ventures: | - | - | - | - | - |
| Remuneration of Boards and Senior Executives and other related parties |
- | - | - | - | 3,893,018 |
| Total | 105,822,624 | 68,620,732 | 9,282,020 | 14,023,759 | 6,384,228 |
The remuneration concerns emoluments and all other payments, pension-related or social security deriving from the role of Director or Statutory Auditor in BasicNet S.p.A. and the other companies within the consolidation scope.
In relation to the other related parties, we highlight the legal consulting activities undertaken by Studio Legale Pavesio e Associati and by Studio Legale Cappetti, of the Director Carlo Pavesio. These transactions, not material compared to the overall values, were at market conditions.
The collections owned by BasicNet S.p.A., which are utilised for media events, shows, press gatherings together with the Brands and/or products of the Group, are subject to a put and call agreement with BasicWorld S.r.l.. The agreement shall run until July 31, 2023. The exercise price of the Call Option by BasicWorld shall be equal to the cost incurred by BasicNet for the purchase of the Collection, as resulting from the accounting entries of BasicNet, in addition to a financial interest charge equal to the average rate applied to BasicNet at the exercise option date. The agreement was signed based on the eventual interest of BasicNet S.p.A. to sell the collection to guarantee the complete recovery of the costs incurred, including financial charges, utilising in the meantime the benefits which derive from such communication instruments for their brands and/or products.
Pursuant to Consob Communication DEM/6064293 of July 28, 2006, we report that there were no nonrecurring significant operations during the year, in addition to the contribution referred to in Note 41 above, the impacts of which are summarised below:
| (Euro thousands) | Net Equity | Net profit/(loss) | Net financial debt | Cash flows |
|---|---|---|---|---|
| Business unit transferred | (9,103) | - | - | |
| Shareholding in K-Way S.p.A. | 70,000 | - | - | |
| Non-recurring income | 60,897 | 60,897 | - | - |
The BasicNet Group is involved in some legal disputes of a commercial nature which are not expected to give rise to significant liabilities.
Other disputes are described in the Explanatory Notes in the consolidated financial statements (Note 53).
Dear Shareholders,
we submit, for your deliberation, the following:
the Shareholders' AGM of BasicNet S.p.A., having reviewed the 2021 results, the Directors' Report and having noted the Board of Statutory Auditors' Report and that of the Independent Audit Firm EY S.p.A.,
to approve the Directors' Report and the Financial Statements at December 31, 2021, in relation to each individual part and in its entirety.
Dear Shareholders,
We propose the allocation of the net profit of Euro 65,689,195.35 as follows:
| | to unrealised exchange gains reserve | Euro | 46,502.66 |
|---|---|---|---|
| | to conferment reserve | Euro | 60,903,372.50 |
| | to the shareholders by way of dividend, the residual amount equal to |
Euro | 4,739,320.19 |
Furthermore, in order to remunerate shareholders in line with previous years, we propose supplementing the dividend paid to shareholders by taking Euro 1,400,311.81 from retained earnings and distributing a dividend of Euro 0.12 to each of the 51,163,602 ordinary shares in circulation (excluding the 9,830,000 treasury shares held at March 3, 2022) for an amount of Euro 6,139,632.24.
As a result, "retained earnings" will decrease from Euro 44,247,429 to Euro 42,847,117.
The dividend will be paid from April 27, 2022, with record date of April 26, 2022 and coupon date (No. 15) of April 25, 2022.
We also propose authorising the company representatives, with individual signatory powers, to determine the actual amount to be taken from retained earnings based on the actual number of shares in circulation with dividend rights and on any rounding that may take place when making the actual payment.
We propose therefore the following:
The BasicNet S.p.A. Ordinary Shareholders' AGM
to approve the proposed allocation of the net profit for the year of Euro 65,689,195.35, as presented above, and the proposed payment of a dividend of Euro 0.12 to each of the ordinary shares in circulation and entitled to receive dividends on the coupon date.
Turin, March 3, 2022
.
for the Board of Directors The Chairperson
Marco Daniele Boglione
| Type of service | Service provider | Company | Fees earned 2021 |
|---|---|---|---|
| Audit | EY S.p.A. | Parent BasicNet S.p.A. | 64,500 |
| Certification services | EY S.p.A. | Parent BasicNet S.p.A. | - |
| Other services | EY S.p.A. | Parent BasicNet S.p.A. | - |
| Total | 64,500 |
(in Euro)
| Name/Registered office/Share capital |
Share capital | Amount of the net equity |
Profit (loss) for the year |
Quota held directly |
Quota held indirectly |
Pro quota net equity |
Book value |
|---|---|---|---|---|---|---|---|
| HOLDINGS IN SUBSIDIARY COMPANIES |
|||||||
| BASIC AIR S.r.l. WITH SOLE SHAREHOLDER Largo Maurizio Vitale, 1 10152 TURIN Share capital Euro 3,000,000 |
3,000,000 | 2,097,887 | (63,097) | 100.00 | - | 2,097,887 | 3,000,000 |
| BASIC ITALIA S.p.A. WITH SOLE SHAREHOLDER Strada della Cebrosa, 106 10156 TURIN Share Capital Euro 7,650,000 |
7,650,000 | 39,039,492 | 1,834,040 | 100.00 | - | 39,039,492 | 762,077 |
| BASICNET ASIA LTD. 15 floor, Linkchart Centre No.2 Tai Yip Street Kwun Tong, Kowloon HONG KONG |
|||||||
| Share capital HKD 10,000. | 1,132 | 336,693 | 31,114 | 100.00 | - | 336,693 | 927 |
| BASICNET ASIA COMPANY LIMITED (VIETNAM) Ltd Room 1002-1003, 10th Floor, Diamond Plaza Building 34 Le Duan Street, Ben Nghe Ward, District 1 - Ho Chi Minh City VIETNAM Share capital DONG 462,600,000 |
18,041 | 36,529 | 13,696 | 100.00 | - | 36,529 | 18,135 |
| BASIC PROPERTIES AMERICA, INC. c/o Corporation Service Company 11 S 12th Street - PO BOX 1463 – Richmond VA 23218 – U.S.A. Share capital USD 2,000 |
1,766 | 6,791,020 | 1,599,658 | - | 100.00 | - | - |
| BASICRETAIL S.r.l. WITH SOLE SHAREHOLDER Strada della Cebrosa, 106 10156 TURIN Share capital Euro 10,000 |
10,000 | 6,324,890 | (498,166) | - | 100.00 | - | - |
| BASIC TRADEMARK S.r.l. Largo Maurizio Vitale, 1 10152 TURIN Share Capital Euro 1,250,000. |
1,250,000 | 33,025,532 | 7,929,697 | 100.00 | - | 33,025,532 | 3,657,747 |
| BASIC VILLAGE S.p.A. WITH SOLE SHAREHOLDER Largo M. Vitale, 1 10152 TURIN Share capital Euro 412,800 |
412,800 | 10,001,279 | (115,913) | 100.00 | - | 10,001,279 | 2,591,980 |
| JESUS JEANS S.r.l WITH SOLE SHAREHOLDER Largo M. Vitale, 1 10152 TORINO Share capital Euro 10,000 |
10,000 | 20,153 | (2,186) | 100.00 | - | 20,153 | 81,375 |
| Name/Registered office/Share capital |
Share capital | Amount of the net equity |
Profit (loss) for the year |
Quota held directly |
Quota held indirectly |
Pro quota net equity |
Book value |
|---|---|---|---|---|---|---|---|
| HOLDINGS IN SUBSIDIARY COMPANIES |
|||||||
| K-WAY S.p.A. WITH SOLE SHAREHOLDER Via dell'Aprica, 12 20158 MILAN Share capital Euro 10,050,000 |
10,050,000 | 50,475,627 | 4,303,088 | 100.00 | - | 50,475,627 | 95,710,383 |
| K-WAYRETAIL S.r.l. WITH SOLE SHAREHOLDER Strada della Cebrosa, 106 10156 TURIN Share capital Euro 10,000 |
10,000 | 2,505,846 | 2,516,548 | - | 100.00 | - | - |
| K-WAYRETAIL SUISSE S.A. Via Franco Zorzi, 18 6850 MENDRISIO - SWITZERLAND Share capital CHF 100,000. |
96,800 | 33,322 | 20,107 | - | 100.00 | - | - |
| KAPPA EUROPE S.A.S. 41 Rue Bobby Sands 44800 St Herblain Cedex - FRANCE |
|||||||
| Share capital Euro 3,926,400 | 3,926,400 | (1,227,020) | (1,915,274) | - | 100.00 | - | - |
| KAPPA FRANCE S.A.S. 41 Rue Bobby Sands 44800 St Herblain Cedex - FRANCE Share capital Euro 3,090,000 |
3,090,000 | 2,019,182 | 642,614 | - | 100.00 | - | - |
| KAPPA RETAIL MONACO S.A.R.L. 1, Promenade Honorè II 98000 Monaco Share capital Euro 15,000 |
15,000 | 579,366 | 382,560 | - | 100.00 | - | - |
| KAPPA SPORT IBERIA S.L. Avda. de Europa, 26 - módulo 2B 28224 Pozuelo De Alarcón-Madrid SPAIN Share Capital Euro 505.588 |
505,588 | (211,976) | 603,956 | - | 100.00 | - | - |
| PREPPY COTTON S.A. Renzligenstrasse 31 6260 MENDRISIO - SWITZERLAND |
|||||||
| Share Capital Euro 101,105 SPORT FASHION DISTRIBUTION UK Ltd. Richmond House, 15 Bloom Street M1 3HZ Manchester - UK Share capital GBP 1 |
101,105 1.190 |
1,983,418 231,641 |
207,989 11,019 |
- - |
100.00 100.00 |
- - |
- - |
| SPORT FASHION RETAIL S.A.R.L. 41 Rue Bobby Sands 44800 St Herblain Cedex - FRANCE |
|||||||
| Share capital Euro 5,000 | 5,000 | 66,763 | (123,600) | - | 100.00 | - | - |
| Name/Registered office/Share capital |
Share capital | Amount of the net equity |
Profit (loss) for the year |
Quota held directly |
Quota held indirectly |
Pro quota net equity |
Book Value |
|---|---|---|---|---|---|---|---|
| HOLDINGS IN SUBSIDIARY COMPANIES |
|||||||
| TEXTILES D'ARTOIS 4 Rue D'Acq 62144 Haute Avesnes- FRANCE Share capital Euro 3,000 |
3,000 | (124,463) | (102,332) | - | 100.00 | - | - |
| TOS S.r.l. WITH SOLE SHAREHOLDER Largo M. Vitale, 1 10152 Turin |
|||||||
| Share capital Euro 10,000 | 10,000 | 2,263,145 | 791,889 | - | 100.00 | - | - |
| JOINT VENTURES | |||||||
| FASHION S.r.l. C.so Stati Uniti, 41 10129 TURIN Share capital Euro 100,000 |
100,000 | 160,781 | (12,320) | - | 50.00 | - | - |
| Name/Registered office/Share capital | 31/12/2020 Book Value |
Acquisitions/ Incorporatio ns/Conferme nts |
Capital payments to cover losses |
Impairments investments |
Disposals | 31/12/2021 Book value |
% held Parent |
|---|---|---|---|---|---|---|---|
| HOLDINGS IN HOLDINGS IN SUBSIDIARY COMPANIES |
|||||||
| BasicRetail S.r.l. with sole shareholder | 3,000,000 | - | - | - | - | 3,000,000 | 100% |
| BasicItalia S.p.A with sole shareholder | 26,422,460 | - | - | - | (25,660,383) | 762,077 | 100% |
| BasicNet Asia Ltd. | 927 | - | - | - | - | 927 | 100% |
| BasicNet Asia Company Limited (Vietnam) Ltd. |
18,135 | - | - | - | - | 18,135 | 100% |
| Superga Trademark S.r.l. with sole shareholder |
3,657,747 | - | - | - | - | 3,657,747 | 100% |
| Basic Village S.p.A with sole shareholder |
2,591,980 | - | - | - | - | 2,591,980 | 100% |
| K-Way S.p.A. with sole shareholder | - | 95,710,383 | - | - | - | 95,710,383 | 100% |
| Jesus Jeans S.r.l. with sole shareholder | 81,375 | - | - | - | - | 81,375 | 100% |
| TOTAL SUBSIDIARY COMPANIES | 35,772,624 | 95,710,383 | - | - | (25,660,383) | 105,822,624 | |
| HOLDINGS IN OTHER COMPANIES: |
|||||||
| Consortiums & other minor | 127 | - | - | - | - | 127 | |
| TOTAL OTHER COMPANIES | 127 | - | - | - | - | 127 | |
| TOTAL INVESTMENTS | 35,772,751 | 95,710,383 | - | - | (25,660,383) | 105,822,751 | |
| FINANCIAL RECEIVABLES | |||||||
| Other receivables (guarantees) | 31,983 | - | - | - | - | 31,983 | - |
| TOTAL RECEIVABLES | 31,983 | - | - | - | - | 31,983 | |
| TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS |
35,804,734 | 95,710,383 | - | - | (25,660,383) | 105,854,734 |
The undersigned Marco Daniele Boglione as Executive Chairman, Federico Trono as Chief Executive Officer and Paola Bruschi as Executive Officer for Financial Reporting of BasicNet S.p.A., affirm, and also in consideration of Article 154-bis, paragraphs 3 and 4, of Legislative Decree No. 58 of February 24, 1998:
the adequacy for company operations and the effective application, of the administrative and accounting procedures for the preparation of the 2021 financial statements.
In addition, we certify that the financial statements:
Marco Daniele Boglione Chairperson
Federico Trono Paola Bruschi
Chief Executive Officer Executive Officer for Financial Reporting
EY S.p.A. Via Meucci, 5 10121 Torino
Tel: +39 011 5161611 Fax: +39 011 5612554 ey.com
Agli Azionisti della BasicNet S.p.A.
Abbiamo svolto la revisione contabile del bilancio d'esercizio della BasicNet S.p.A. (la Società), costituito dalla situazione patrimoniale-finanziaria al 31 dicembre 2021, dal conto economico, dal conto economico complessivo, dal rendiconto finanziario, dal prospetto delle variazioni del patrimonio netto, per l'esercizio chiuso a tale data e dalle note illustrative al bilancio che includono anche la sintesi dei più significativi principi contabili applicati.
A nostro giudizio, il bilancio d'esercizio fornisce una rappresentazione veritiera e corretta della situazione patrimoniale e finanziaria della Società al 31 dicembre 2021, del risultato economico e dei flussi di cassa per l'esercizio chiuso a tale data, in conformità agli International Financial Reporting Standards adottati dall'Unione Europea, nonché ai provvedimenti emanati in attuazione dell'art. 9 del D. Lgs. 28 febbraio 2005, n. 38.
Abbiamo svolto la revisione contabile in conformità ai principi di revisione internazionali (ISA Italia). Le nostre responsabilità ai sensi di tali principi sono ulteriormente descritte nella sezione Responsabilità della società di revisione per la revisione contabile del bilancio d'esercizio della presente relazione. Siamo indipendenti rispetto alla Società in conformità alle norme e ai principi in materia di etica e di indipendenza applicabili nell'ordinamento italiano alla revisione contabile del bilancio. Riteniamo di aver acquisito elementi probativi sufficienti ed appropriati su cui basare il nostro giudizio.
Gli aspetti chiave della revisione contabile sono quegli aspetti che, secondo il nostro giudizio professionale, sono stati maggiormente significativi nell'ambito della revisione contabile del bilancio dell'esercizio in esame. Tali aspetti sono stati da noi affrontati nell'ambito della revisione contabile e nella formazione del nostro giudizio sul bilancio d'esercizio nel suo complesso; pertanto su tali aspetti non esprimiamo un giudizio separato.
Abbiamo identificato il seguente aspetto chiave della revisione contabile:
Operazioni under common control
Nel corso dell'esercizio, e nell'ambito del progetto di riorganizzazione delle attività inerenti il marchio K-Way, la Società ha conferito il ramo relativo alla gestione e sviluppo del medesimo alla neo-costituita K-Way S.p.A., interamente controllata dalla Società. Tale operazione si configura come operazione under common control ed è pertanto esclusa dall'applicazione dell'IFRS3.
In assenza di una specifica guidance per le operazioni under common control, la Società, al fine di determinare il più idoneo approccio contabile, coerentemente con i criteri fissati dallo IAS 8.10, ha ritenuto di utilizzare, quale elemento rilevante, la sostanza economica dell'operazione nel suo complesso. Considerando sussistente la sostanza economica
del conferimento, la Società ha pertanto applicato il modello contabile dell' "acquisition method".
In tale contesto, il business conferito è stato pertanto iscritto dalla conferitaria al proprio valore corrente, oggetto di apposita perizia da parte di un terzo esperto indipendente, ai sensi dell'art. 2343 del Codice Civile.
L'operazione ha comportato, in capo alla conferente:
In considerazione del giudizio richiesto e della complessità delle assunzioni utilizzate nella stima del valore del business oggetto di conferimento, nonché della significatività degli effetti contabili iscritti in capo alla conferente ed in virtù del fatto che l'operazione si configura come un'operazioni tra parti correlate, si ritiene che tale tematica rappresenti un aspetto chiave della revisione.
L'informativa di bilancio relativa all'operazione è riportata nella nota 41. "Operazioni under common control''.
Le nostre procedure di revisione in risposta all'aspetto chiave hanno riguardato, tra l'altro:
Nelle suddette verifiche ci siamo anche avvalsi dell'ausilio di nostri esperti in tecniche di valutazione, che hanno eseguito un ricalcolo indipendente ed effettuato analisi di sensitività sulle assunzioni chiave, al fine di determinare i cambiamenti delle assunzioni che potrebbero impattare significativamente la valutazione del valore del business conferito. Infine, abbiamo verificato l'adeguatezza dell'informativa fornita nelle note illustrative del
bilancio in relazione all'operazione under
common control.
Gli amministratori sono responsabili per la redazione del bilancio d'esercizio che fornisca una rappresentazione veritiera e corretta in conformità agli International Financial Reporting Standards adottati dall'Unione Europea, nonché ai provvedimenti emanati in attuazione dell'art. 9 del D. Lgs. 28 febbraio 2005, n. 38 e, nei termini previsti dalla legge, per quella parte del controllo interno dagli stessi ritenuta necessaria per consentire la redazione di un bilancio che non contenga errori significativi dovuti a frodi o a comportamenti o eventi non intenzionali.
Gli amministratori sono responsabili per la valutazione della capacità della Società di continuare ad operare come un'entità in funzionamento e, nella redazione del bilancio d'esercizio, per l'appropriatezza dell'utilizzo del presupposto della continuità aziendale, nonché per una adeguata informativa in materia. Gli amministratori utilizzano il presupposto della continuità aziendale nella redazione del bilancio d'esercizio a meno che abbiano valutato che sussistono le condizioni per la liquidazione della Società o per l'interruzione dell'attività o non abbiano alternative realistiche a tali scelte.
Il collegio sindacale ha la responsabilità della vigilanza, nei termini previsti dalla legge, sul processo di predisposizione dell'informativa finanziaria della Società.
I nostri obiettivi sono l'acquisizione di una ragionevole sicurezza che il bilancio d'esercizio nel suo complesso non contenga errori significativi, dovuti a frodi o a comportamenti o eventi non intenzionali, e l'emissione di una relazione di revisione che includa il nostro giudizio. Per ragionevole sicurezza si intende un livello elevato di sicurezza che, tuttavia, non fornisce la garanzia che una revisione contabile svolta in conformità ai principi di revisione internazionali (ISA Italia) individui sempre un errore significativo, qualora esistente. Gli errori possono derivare da frodi o da comportamenti o eventi non intenzionali e sono considerati significativi qualora ci si possa ragionevolmente attendere che essi, singolarmente o nel loro insieme, siano in grado di influenzare le decisioni economiche degli utilizzatori prese sulla base del bilancio d'esercizio.
Nell'ambito della revisione contabile svolta in conformità ai principi di revisione internazionali (ISA Italia), abbiamo esercitato il giudizio professionale e abbiamo mantenuto lo scetticismo professionale per tutta la durata della revisione contabile. Inoltre:
abbiamo valutato l'appropriatezza dei principi contabili utilizzati nonché la ragionevolezza delle stime contabili effettuate dagli amministratori e della relativa informativa;
siamo giunti ad una conclusione sull'appropriatezza dell'utilizzo da parte degli amministratori del presupposto della continuità aziendale e, in base agli elementi probativi acquisiti, sull'eventuale esistenza di una incertezza significativa riguardo a eventi o circostanze che possono far sorgere dubbi significativi sulla capacità della Società di continuare ad operare come un'entità in funzionamento. In presenza di un'incertezza significativa, siamo tenuti a richiamare l'attenzione nella relazione di revisione sulla relativa informativa di bilancio ovvero, qualora tale informativa sia inadeguata, a riflettere tale circostanza nella formulazione del nostro giudizio. Le nostre conclusioni sono basate sugli elementi probativi acquisiti fino alla data della presente relazione. Tuttavia, eventi o circostanze successivi possono comportare che la Società cessi di operare come un'entità in funzionamento;
Abbiamo comunicato ai responsabili delle attività di governance, identificati ad un livello appropriato come richiesto dai principi di revisione internazionali (ISA Italia), tra gli altri aspetti, la portata e la tempistica pianificate per la revisione contabile e i risultati significativi emersi, incluse le eventuali carenze significative nel controllo interno identificate nel corso della revisione contabile.
Abbiamo fornito ai responsabili delle attività di governance anche una dichiarazione sul fatto che abbiamo rispettato le norme e i principi in materia di etica e di indipendenza applicabili nell'ordinamento italiano e abbiamo comunicato loro ogni situazione che possa ragionevolmente avere un effetto sulla nostra indipendenza e, ove applicabile, le relative misure di salvaguardia.
Tra gli aspetti comunicati ai responsabili delle attività di governance, abbiamo identificato quelli che sono stati più rilevanti nell'ambito della revisione contabile del bilancio dell'esercizio in esame, che hanno costituito quindi gli aspetti chiave della revisione. Abbiamo descritto tali aspetti nella relazione di revisione.
L'assemblea degli azionisti della BasicNet S.p.A. ci ha conferito in data 27 aprile 2017 l'incarico di revisione legale del bilancio d'esercizio della Società per gli esercizi con chiusura dal 31 dicembre 2017 al 31 dicembre 2025.
Dichiariamo che non sono stati prestati servizi diversi dalla revisione contabile vietati ai sensi dell'art. 5, par. 1, del Regolamento (UE) n. 537/2014 e che siamo rimasti indipendenti rispetto alla Società nell'esecuzione della revisione legale.
Confermiamo che il giudizio sul bilancio d'esercizio espresso nella presente relazione è in linea con quanto indicato nella relazione aggiuntiva destinata al collegio sindacale, nella sua funzione di comitato per il controllo interno e la revisione contabile, predisposta ai sensi dell'art. 11 del citato Regolamento.
Gli amministratori della BasicNet S.p.A. sono responsabili per l'applicazione delle disposizioni del Regolamento Delegato (UE) 2019/815 della Commissione Europea in materia di norme tecniche di regolamentazione relative alla specificazione del formato elettronico unico di comunicazione (ESEF – European Single Electronic Format) (nel seguito "Regolamento Delegato") al bilancio d'esercizio, da includere nella relazione finanziaria annuale.
Abbiamo svolto le procedure indicate nel principio di revisione (SA Italia) n. 700B al fine di esprimere un giudizio sulla conformità del bilancio d'esercizio alle disposizioni del Regolamento Delegato. A nostro giudizio, il bilancio d'esercizio è stato predisposto nel formato XHTML ed è stato marcato, in tutti gli aspetti significativi, in conformità alle disposizioni del Regolamento Delegato.
Giudizio ai sensi dell'art. 14, comma 2, lettera e), del D. Lgs. 27 gennaio 2010, n. 39 e dell'art. 123-bis, comma 4, del D. Lgs. 24 febbraio 1998, n. 58
Gli amministratori della BasicNet S.p.A. sono responsabili per la predisposizione della relazione sulla gestione e della relazione sul governo societario e gli assetti proprietari della BasicNet S.p.A. al 31 dicembre 2021, incluse la loro coerenza con il relativo bilancio d'esercizio e la loro conformità alle norme di legge.
Abbiamo svolto le procedure indicate nel principio di revisione (SA Italia) n. 720B al fine di esprimere un giudizio sulla coerenza della relazione sulla gestione e di alcune specifiche informazioni contenute nella relazione sul governo societario e gli assetti proprietari indicate nell'art. 123-bis, comma 4, del D. Lgs. 24 febbraio 1998, n. 58, con il bilancio d'esercizio della BasicNet S.p.A. al 31 dicembre 2021 e sulla conformità delle stesse alle norme di legge, nonché di rilasciare una dichiarazione su eventuali errori significativi.
A nostro giudizio, la relazione sulla gestione e alcune specifiche informazioni contenute nella relazione sul governo societario e gli assetti proprietari sopra richiamate sono coerenti con il bilancio d'esercizio della BasicNet S.p.A. al 31 dicembre 2021 e sono redatte in conformità alle norme di legge.
Con riferimento alla dichiarazione di cui all'art. 14, c. 2, lettera e), del D. Lgs. 27 gennaio 2010, n. 39, rilasciata sulla base delle conoscenze e della comprensione dell'impresa e del relativo contesto acquisite nel corso dell'attività di revisione, non abbiamo nulla da riportare.
Dichiarazione ai sensi dell'art. 4 del Regolamento Consob di attuazione del D. Lgs. 30 dicembre 2016, n. 254
Gli amministratori della BasicNet S.p.A. sono responsabili per la predisposizione della dichiarazione non finanziaria ai sensi del D. Lgs. 30 dicembre 2016, n. 254. Abbiamo verificato l'avvenuta approvazione da parte degli amministratori della dichiarazione non finanziaria.
Ai sensi dell'art. 3, comma 10, del D. Lgs. 30 dicembre 2016, n. 254, tale dichiarazione è oggetto di separata attestazione di conformità da parte nostra.
Torino, 22 marzo 2022
EY S.p.A. Stefania Boschetti (Revisore Legale)
| Società e periodo di | Revisione contabile | Servizi di | Altri servizi | Totale | |||
|---|---|---|---|---|---|---|---|
| riferimento | EY | Network | attestazione | ||||
| BasicNet SpA | 2021 | 64.500 | $\sim$ | 64.500 | |||
| Società controllate |
2021 | ۰ | 214.875 | 3.000 | 7,000 | 224.875 | |
| Totale | 64.500 | 214.875 | 3.000 | 7.000 | 289,375 |
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