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1. INTRODUCTION
Poste Italiane SpA (the \"Parent Company\") is the company formed following conversion of the former Public Administration entity, \"Poste Italiane\", under Resolution 244 of 18 December 1997. Its registered office is at Viale Europa 190, Rome (Italy).
Poste Italiane's shares have been listed on the Mercato Telematico Azionario (the MTA, an electronic stock exchange) since 27 October 2015. At 31 December 2023, the Company is 35% owned by CDP and 29.3% owned by the MEF, with the remaining shares held by institutional and retail investors. Poste Italiane SpA continues to be under the control of the MEF. At 31 December 2023, the Parent Company holds 10,675,798 treasury shares (equal to around 0.817% of the share capital).
The Poste Italiane Group (the \"Group\") provides a universal postal service in Italy as well as integrated communication, logistics, financial and insurance products and services throughout the country via its national network of approximately 13,000 post offices.
The Group's business is assessed and presented on the basis of four operating segments: (i) Mail, Parcels and Distribution, (ii) Payments and Mobile, (iii) Financial Services and (iv) Insurance Services.
In addition to the mail, parcel and logistics service, the Mail, Parcels and Distribution segment also includes the activities of the sales network, the Post Offices and the corporate functions of Poste Italiane S.p.A. that provide services to the other segments in which the Group operates. The sector also includes the provision of Welfare services.
The Payments and Mobile Services segment includes the management of payments and e-money services, also carried out through the network of LIS points of sale, as well as mobile and fixed telephone services and energy (electricity and gas) sales services to end customers by PostePay SpA.
The Financial Services segment refers to the placement and distribution of financial and insurance products and services by Bancoposta, such as current accounts, postal savings products (on behalf of Cassa Depositi e Prestiti), mutual investment funds, loans provided by banks, policies and the activities of BancoPosta Fondi SpA SGR.
The Insurance Services segment mainly relates to the activities of Poste Vita SpA, which operates in the Life insurance sector, primarily in Ministerial Classes I and III, and its direct and indirect subsidiaries, such as Poste Assicura SpA and Net Insurance SpA, which operate in the P&C sector with the exclusion of the Motor Insurance class, and Net Insurance Life SpA, which mainly offers insurance coverage related and instrumental to the P&C products offered by its direct parent company Net Insurance SpA.
This section of the Annual Report (Poste Italiane's Financial Statements) at 31 December 2023 includes the consolidated financial statements of the Poste Italiane Group, the separate financial statements of Poste Italiane SpA and BancoPosta RFC's Separate Report. The Report has been prepared in euros, the currency of the economy in which the Group operates.
The Group's consolidated financial statements consist of the consolidated statement of financial position, the consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows and the notes to the financial statements. All amounts in the financial statements and the notes are shown in millions of euros and rounded (without decimal figures), unless stated otherwise. It follows that the sum of the rounded amounts may not coincide with the rounded totals.
The separate financial statements of Poste Italiane SpA consist of the statement of financial position, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows and the notes. Amounts in the financial statements are shown in euros (except for the statement of cash flows, which is shown in thousands of euros), whilst those in the notes are shown in millions of euros (without decimal figures), unless stated otherwise. It follows that the sum of the rounded amounts may not coincide with the rounded totals.
The consolidated and separate financial statements contain notes applicable to both sets of financial statements, providing information on matters common to both the Group and Poste Italiane SpA. The relevant matters specifically regard:
-the way the financial statements are presented and relevant information on accounting standards;
-disclosure of the sources and the procedures used in determining fair value;
-disclosures on risks and hedging transactions;
-a summary of the principal proceedings pending and relations with the authorities;
-and, in general, certain additional disclosures required by accounting standards, whose presentation in a single section is designed to provide the reader with better information (e.g. the analysis of share-based payment arrangements, key data on equity investments held, etc.).
BancoPosta RFC's Separate Report, which forms an integral part of Poste Italiane SpA's financial statements, prepared in accordance with the specific financial reporting rules laid down by the applicable banking regulations, is dealt with separately in this Section.
The consolidated financial statements of the Poste Italiane Group and the separate financial statements of Poste Italiane SpA (including the Separate Statement of BancoPosta RFC) for the year ended 31 December 2023 were approvedby the Board of Directors on 19 March 2024, the date on which publication was authorised in accordance with IAS 10-Events after the reporting period", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page549-cflshid_231417-tag141492": { "value": "Poste Italiane ", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page549-cflshid_231420-tag141493": { "value": "SpA", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page549-cflshid_231417-tag141494": { "value": "Viale Europa 190, Rome (Italy)", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page549-cflshid_231452-tag141498": { "value": "Italy", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page549-cflshid_231452-tag141500": { "value": "Italy", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page549-cflshid_231454-tag141495": { "value": "Poste Italiane", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page549-cflshid_231453-tag141496": { "value": "Poste Italiane SpA", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page549-cflshid_231533-tag141497": { "value": "universal postal service in Italy as well as integrated communication, logistics, financial and insurance products and services throughout the country via its national network of approximately 13,000 post offices", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page550-cflshid_232009-tag141503": { "value": "
2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
2.1 COMPLIANCE WITH IAS/IFRS
The annual accounts are prepared in accordance with the International Financial Reporting Standards (\"IFRS\") issued by the International Accounting Standards Board (\"IASB\"), and endorsed by the European Union (\"EU\") in EC Regulation 1606/2002 of 19 July 2002, and in accordance with Legislative Decree 38 of 28 February 2005, which introduced regulations governing the adoption of IFRS in Italian law.
The term IFRS includes all the International Financial Reporting Standards, International Accounting Standards (\"IAS\") and interpretations issued by the International Financial Reporting Interpretations Committee (\"IFRIC\", previously known as the Standing Interpretations Committee or \"SIC\"), adopted by the European Union and contained in the EU Regulations in force at 31 December 2023, regarding which no derogations were made.
2.2 BASIS OF PRESENTATION
The accounting standards reflect the full operations of the Group and Poste Italiane SpA in the foreseeable future. As a going concern, Poste Italiane Group companies prepare their financial statements on a going concern basis, also taking account of the Group's economic and financial outlook, as reflected in the new 2024-2028 strategic plan approved by the Board of Directors on 19 March 2024.
The statement of financial position has been prepared on the basis of the \"current/non-current distinction\"177F178. In the Statement of profit (loss) for the year, the classification criterion based on the nature of the cost components has been adopted; details of interest income calculated using the effective interest criterion, as well as gains and losses deriving from the derecognition of financial assets measured at amortised cost (as per IAS 1 - Presentation of Financial Statements
paragraph 82) are provided in section 4.3 Notes to the Statement of profit or loss. The statement of cash flows has been prepared under the indirect method178F179.
The accounting standards and the recognition, measurement and classification criteria adopted in these annual accounts are the same as those used in the previous year's preparation, with the exception of what is stated in Section 2.3 - New accounting standards and interpretations.
The disclosures provided in these annual financial statements take into account the guidelines and recommendations of the Italian and European regulatory and supervisory bodies (ESMA and Consob179F180) published during the year in order to provide a guideline in the current macroeconomic context. The accounting implications of complying with these recommendations are described in section 2.7 - Climate change and macroeconomic environment.
In preparing the annual accounts, the CONSOB regulations contained in Resolution 15519 of 27 July 2006 and in Ruling DEM/6064293 of 28 July 2006 have been taken into account.
In accordance with CONSOB Resolution 15519 of 27 July 2006, the statement of financial position, the statement of profit or loss and the statement of cash flows show amounts deriving from related party transactions. The statement of profit or loss also shows, where applicable and of significant amount, income and expenses deriving from non-recurring transactions, or transactions that occur infrequently in the normal course of business. Detailed information about non-recurring events and transactions, including their impact on the financial position, results of operations and cash flows of the company and/or the group, is provided in the section \"Material non-recurring events and/or transactions\".
The values shown in the financial statements are compared with the corresponding values for the same period of the previous year. In this regard, it should be noted that certain figures for the year of comparison have been adjusted and reclassified to take into account the new provisions of IFRS 17 - Insurance Contracts, which came into force on 1 January 2023.
Pursuant to article 2447-septies of the Italian Civil Code, following the creation of BancoPosta's ring-fenced capital in 2011, the assets and contractual rights included therein (hereafter: \"BancoPosta RFC\") are shown separately in Poste Italiane SpA's statement of financial position, in a specific supplementary statement, and in the notes to the financial statements.
With regard to the interpretation and application of newly published, or revised, international accounting standards, and to certain aspects of taxation180F181, where the related interpretations are based on examples of best practice or case-law that cannot yet be regarded as exhaustive, the financial statements have been prepared on the basis of the relevant best practices and the guidelines agreed with the Tax Authorities as part of \"cooperative compliance\". Any future guidance or updated interpretations will be reflected in subsequent reporting periods, in accordance with the specific procedures provided for by the related standards.
Finally, Directive 2004/109/EC (the \"Transparency Directive\") and Delegated Regulation (EU) 2019/815 introduced the obligation for issuers of securities listed on regulated markets in the European Union to prepare their annual financial report in a single electronic reporting format (European Single Electronic Format), approved by ESMA. In application of this standard, the Annual Report was prepared in XHTML format, including the \"marking\" of the Notes to the Consolidated Financial Statements, as well as those of the related financial statements, using the ESMA-IFRS taxonomy and the integrated computer language (iXBRL).
2.3 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS AND THOSE SOON TO BE EFFECTIVE
Accounting standards and interpretations applicable from 1 January 2023
\u2022IFRS 17 - Insurance Contracts. The new accounting standard on insurance contracts, which fully replaced the provisions of IFRS 4, aims to:
oensure that an entity provides information that fairly represents the rights and obligations arising from the insurance contracts issued;
oeliminate inconsistencies and weaknesses in existing accounting policies by providing a single principle-based framework to account for all types of insurance contracts (including reinsurance contracts); and
oimprove comparability between entities belonging to the insurance sector by providing for specific presentation and disclosure requirements.
\u2022Amendments to IAS 1 - Presentation of Financial Statements aimed at helping preparers of financial statements to provide information on accounting policies that is more useful to investors and primary users of financial statements by replacing the requirement to disclose \"significant\" accounting policy information with the requirement to provide on material accounting policy information and how they are applied within the company.
\u2022Amendments to IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors to clarify the distinction between changes in accounting estimates, Changes to accounting policies and error corrections.
\u2022Amendments to IAS 12 - Income Taxes to clarify how deferred taxes should be accounted for on certain transactions involving the simultaneous recognition of an asset and a liability of equal amount, such as leases and decommissioning obligations. The purpose of this amendment is to reduce diversity in the recognition of deferred tax assets and liabilities on such transactions;
\u2022Amendments to IAS 12 \u2013 Income Taxes: International Tax Reform - Model Rules (Second Pillar). The amendments to the standard introduced a temporary exception to the accounting for deferred taxes in connection with the application of the provisions of Pillar Two published by the Organisation for Economic Cooperation and Development (hereinafter \"OECD\"), as well as targeted supplementary information for affected companies.
With the exception of the first-time application of IFRS 17, the impact of which on the Poste Italiane Group's financial position is described in Section 2.4 - Changes to accounting policies below, the adoption of the other changes outlined above did not have a significant impact on the financial information in the financial statements. With reference to the new provisions of IAS 1 relating to material information on accounting policies, these are reflected in Section 2.5 - Material Information on accounting standards; while the information required by the amendment to IAS 12 on international tax reform is given below.
The provisions of the OECD Pillar Two were introduced into the regulatory framework of the European Union with EU Council Directive 2022/2523 of 14 December 2022, which in turn was implemented in Italy by Legislative Decree 209 of 27 December 2023 (hereinafter also referred to as the \"Decree\"). The objective of international tax reform is to ensure a minimum level of taxation, at the rate of 15 per cent, of multinational corporations in each jurisdiction in which they operate.
At the reporting date of these financial statements, the Poste Italiane Group, although falling within the scope of the regulations, does not have a second-pillar income tax exposure because at 31 December 2023 the provisions of the Decree are in force, but are not effective with regard to this Annual Report.
The Poste Italiane Group will apply the exception to the recognition and disclosure of deferred tax assets and liabilities related to second-pillar income taxes, as permitted by the relevant accounting standard.
In the meantime, the Group is analysing the exposure to the Second Pillar provisions for the period in which they will be effective, and preliminary analyses, based on simplifying assumptions and historical data (i.e. average effective tax rates calculated in accordance with paragraph 86 of IAS 12), have shown that the Second Pillar legislation is not expected to generate any additional current tax liabilities.
In particular, based on its current ownership structure, the Poste Italiane Group is present in four jurisdictions: Italy, China, Hong Kong, UK. Based on the analyses carried out, the average effective tax rates appear to be higher than 15%; therefore, the level of effective taxation of the Group companies operating in the various jurisdictions would not appear to be such as to result in the application of a domestic/supplementary minimum tax.
However, these valuations are not precise, as they are not based on the concrete and full application of all adjustments provided for in the Decree, and there may be differences between the average effective tax rate calculated in accordance with paragraph 86 of IAS 12 and that calculated in accordance with the provisions of Pillar 2.
In addition, it should be noted that the level of effective taxation of foreign companies should ensure the application of general transitional regimes (Transitional Safe Harbour) that provide for the reduction of any supplementary tax due for these jurisdictions to zero for the first three tax periods from the implementation of the legislation (2024-2026).
Finally, it should be emphasised again that, due to the complexity in the application of the legislation and the calculation of total relevant income, the quantitative impact cannot yet be reasonably estimated, and that the analyses performed on the level of effective taxation of Group companies for the year 2023, may also differ significantly from those that will take place once the legislation is fully implemented, due to the implications of the Pillar Two rules.
Accounting standards and interpretations soon to be effective
The following are applicable from 1 January 2024:
\u2022Amendment to IFRS 16 Leases: Lease Liabilities in a Sale and Leaseback. The purpose of the amendment is to specify how the selling lessee is to measure the lease liability arising from a sale and leaseback in such a way that it does not recognise income or loss in respect of the retained right of use;
\u2022Amendments to IAS 1 - Presentation of Financial Statements to provide clarification on how entities should classify payables and other liabilities between current and non-current, and to improve the information that an entity must provide when its right to defer settlement of a liability for at least 12 months is subject to covenants.
At the reporting date, the IASB has issued the following amendments, still not yet endorsed by the European Commission:
\u2022Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements;
\u2022Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability.
The potential impact on the Poste Italiane Group's financial reporting of the accounting standards, amendments and interpretations due to come into effect is currently being assessed. It should also be noted that the Group has not arranged for the early adoption of any standards, interpretations or amendments that have been issued but are not yet in force.
2.4. CHANGES TO ACCOUNTING POLICIES
From 1 January 2023, the Poste Italiane Group has adopted IFRS 17 \u2013 Insurance Contracts issued under Regulation (EU) no. 2021/2036 of the Commission of 19 November 2021.
Information on the nature and effects of the new accounting standard and the related impact of the first-time adoption of the standard on the Poste Italiane Group's statement of financial position is provided below.
Scope of application
IFRS 17 introduces new recognition, measurement and valuation rules for contracts that meet the definition of an \"insurance contract\"181F182; the new standard applies to insurance contacts issued, reinsurance contracts held, and investment contracts with discretionary participation features. Within the Poste Italiane Group, therefore, insurance contracts and investment contracts with discretionary participation features issued by the Companies belonging to the Poste Vita Group182F183, as well as reinsurance contracts held by them, fall within the scope of the new standard.
With regard to the contracts issued by the other Poste Italiane Group companies, no elements were identified that could be brought within the definition of an insurance contract, i.e., although falling within this definition, the Group opted to continue applying IFRS 15 and/or IFRS 9 as permitted by IFRS 17.
Level of portfolio aggregation
The Poste Italiane Group has defined a process for aggregating the contracts falling within the scope of IFRS 17, which envisages an initial distinction between Life and P&C business and then a distinction into different Contract Portfolios and different Unit Of Accounts. Portfolios contain contracts with similar contractual and risk characteristics that are managed in a unified manner. With regard to the Life business, contract groups are aggregated by product type (e.g. Pure Separately Managed Accounts, Multi-class, term life insurance, etc.), while for the P&C business, the level of aggregation coincides with the lines of business (e.g. those defined for Solvency II reporting); in some cases (such as for the companies Net Insurance SpA and Net Insurance Life SpA, hereinafter jointly referred to as the \"Net Group\") they are further subdivided in order to comply with the characteristics of specific products. For business related to reinsurance contracts held, the Unit of Account is equivalent to the individual treaty with the counterparty.
Contract portfolios can be further disaggregated according to the underwriting year of the policies (cohorts)183F184 and the level of profitability. For this purpose, an onerousness test of the products is carried out to divide the Units of Account into:
\u2022profitable;
\u2022onerous;
\u2022that at the time of initial recognition do not have a high probability of becoming onerous.
The following describes the process for defining the onerousness test according to the relevant business:
\u2022Life business: for contracts issued by Poste Vita SpA, the test is performed at the product level (where applicable also at the cohort level) in the design phase of the same (ex ante) exclusively for new products, determining the estimated future flows of fulfilment at the date. For contracts issued by Net Insurance Life SpA, on the other hand, the test is carried out on individual tariffs. The analysis is repeated in the event of significant events that may affect the costliness of the product in the first year of life;
\u2022P&C business: for contracts issued by the Company Poste Assicura SpA, the test is performed on the basis of the Combined Ratio184F185 at the time of the initial recognition of the contract group by defining the onerousness on a permanent basis until the maturity of the policies. For contracts issued by Net Insurance SpA, the test takes
into account estimated future fulfilment flows at the date and is performed at the contract group level according to business type.
Groups of insurance contracts are recognised at the date of initial recognition. The Poste Italiane Group has defined in detail which, for each type of business and its underlying products, is the date that identifies the start of the contractual relationship. These dates (e.g. effective date, renewal date, accession date, etc.) were chosen according to the specificities of the products issued. For the insurance contracts acquired as a result of the Net Group business combination, the initial recognition date was set at 1 April 2023, the date identified for the Purchase Price Allocation process.
Measurement models
The general model for measuring insurance contracts, called the Building Block Approach - BBA, involves defining the financial flows associated with the insurance contract, consisting of:
\u2022cash inflows and outflows;
\u2022an adjustment that takes into account the time value of money and the financial risks associated with the flows themselves;
\u2022an adjustment for non-financial risk (risk adjustment).
The final result of the sum of the preceding components, if positive, determines the Contractual Service Margin (CSM) that will be issued over the life of the insurance contract according to the so-called Coverage Unit, while if negative the Loss Component, recognised immediately in the statement of profit or loss.
The standard provides two further measurement models:
\u2022Premium Allocation Approach - PAA, an optional and alternative model to the general model, is applicable to contracts characterised by a coverage period of no more than one year, as well as to contract groups for which the company considers that simplification linked to the model would not lead to a significantly different result from that obtained with the general model (for example, absence of variability of cash flows associated with the contract group);
\u2022Variable Fee Approach - VFA, a mandatory measurement model for contracts with direct participation features, such as separately managed accounts and unit-linked insurance.
Within the Poste Italiane Group, groups of insurance contracts with at least one of the following characteristics are measured using the PAA method:
\u2022One-year Duration;
\u2022Multi-Year Duration and belonging to the Collective Business (Contract Groups = Collective);
\u2022Multi-Year Duration and belonging to a Portfolio where the weight of the Multi-year Business is less than or equal to 5% in the last 3 years.
With reference to the VFA, adopted exclusively for the Life business, the Group assessed the eligibility for the model for the following types of products:
\u2022With Profit Participating (Separately Managed Accounts);
\u2022Unit-linked standalone insurance;
\u2022Hybrid products with investment components (Multi-class).
The PAA model is applied to P&C business, with the exception of the CPI products185F186, which are measured through the adoption of the BBA as they do not meet the conditions for the application of the simplified model. The BBA is also adopted for products belonging to the Life business for which the VFA model does not apply.
Elements for determining future fulfilment flows
In application of the BBA and VFA models, future cash flows associated with insurance contracts are estimated by taking into account the \"contract boundary\", in order to identify whether a particular contractual option should be included in the cash flow projection as soon as the contract is issued or whether the exercise of that option would result in the recognition of a new contract group. The Poste Italiane Group has borrowed contract boundary identification techniques from the Solvency II context186F187, except in the case of P&C business contracts with tacit renewal that were no longer terminable at the valuation date, which define the generation of a new contract group and, therefore, a new cohort. In the Life business, pure risk policies, cases of conversion into annuities, automatic maturity deferrals and additional payouts can generate a new fulfilment cash flow; while in the P&C business, additional considerations can be made about product repricing clauses, the presence of variable sums insured and cases of lapse with return of unearned premium.
In accordance with the provisions of the standard, all costs directly attributable to the management of insurance contracts, including costs incurred in the acquisition of contracts, are also taken into account in the construction of the fulfilment cash flows. With particular reference to acquisition costs, the Group considers directly attributable to insurance contracts the costs incurred internally for placement through the Poste Italiane network, placement commissions paid to the network outside the Group (mainly for the Net Group), rappels187F188 and other direct and indirect acquisition costs.
Adjustment for non-financial risk
When assessing insurance contracts, it is necessary to consider the Risk Adjustment component, i.e. the remuneration that the Companies of the Poste Italiane Group require to assume risks of a non-financial nature. To determine the Adjustment for non-financial risk, the Poste Italiane Group has decided to use the percentile metric. According to this approach, the Adjustment for non-financial risk represents the potential loss in relation to the obligations assumed towards the policyholders (Insurance liabilities) that the Companies would incur, at a given level of probability (percentile level), to cover the insurance risks assumed, thus reflecting the risk appetite of the Companies themselves. This element is calculated separately for Life and P&C business. The confidence level identified to quantify the Adjustment for non-financial risk is 70% for both P&C and Life businesses.
In order to determine the amount of the Adjustment for non-financial risk, among other elements, the Solvency II valuation framework was taken into account, considering the same scope of underlying risks. For details of the risks considered, see Section \"2.6 - Use of estimates - Insurance liabilities\".
The Adjustment for non-financial risk may change as a result of changes in the risks to which the Group is exposed. These effects may have an impact on the statement of financial position if they relate to future services, affecting the total value of the Contractual Service Margin, and on the statement of profit or loss through the period release of this component, which occurs on the basis of a defined coverage unit.
Discount rate
For the purposes of determining the discount rate to be used for discounting future cash flows, the Poste Italiane Group has decided to adopt a \"bottom-up approach\" for the derivation of discount curves borrowed from Solvency II, in which the reference Basic Risk Free Curve is based on the Risk Free Rate curve provided by EIOPA.
The Basic Risk Free curve, depending on the specific business, may be adjusted to take into account specific Illiquidity Premiums (a component representing the level of liquidity of the counterparty) calibrated to portfolios or at Company level.
Please refer to section \"2.6 - Use of estimates - Insurance liabilities\" for detailed information on the discount curves used per individual portfolio.
Effect on the statement of profit or loss
The new standard changed the representation of the profitability of the insurance business from a presentation of results by volume (premiums issued and claims expenses) to a representation more focused on contract margins.
Revenue from the insurance business consist of the releases of liabilities under insurance contracts for the period, including the Contractual Service Margin (CSM) component. In addition, costs directly related to insurance contracts, including costs incurred by the network for insurance contract placement and distribution activities performed by the Parent Company and outside the Group, are allocated to revenue.
For non-profitable insurance contracts, the relevant Loss Component is recognised immediately in the statement of profit or loss. In the event that, at subsequent reporting dates, there is an improvement in the group of onerous contracts, the Poste Italiane Group Companies have provided for a method of recovering the loss component on a risk-based approach by which the release of the loss component is calculated in proportion to the period's release of the cash flows related to claims, expenses and risk adjustment.
In the case of an onerous contract, if reinsurance coverage is provided, it is necessary to identify the so-called Loss Recovery Component. The result of the reinsurance contract (Net Gain/Net Cost) will be adjusted in each reporting period to take into account the recovery of the loss component of the direct covered contract.
In addition to the issuance of the CSM and the possible recognition of the loss component, further elements capable of impacting the statement of profit or loss in the reporting period are described below:
\u2022Investment component i.e. the amount under the insurance contract that the issuing entity must pay to the counterparty even if the insured event does not occur, for which the standard does not require recognition in the underwriting result. The Group identifies the investment component for contracts in the Life business and defines it, for investment products and annuities in the accumulation phase, as the difference between the liquidated value and the lapse value net of penalties; for certain annuities that are certain to be paid out, the value of the investment component corresponds to the value of the benefits paid out. Finally, with respect to the reinsurance business, the investment component is identified in the context of contracts or treaties that provide for scaled commissions or profit participating;
\u2022Financial costs/revenue related to the insurance business, refer to the effects deriving from the change in the time value of money and the financial risk which, as envisaged by the standard, are calculated separately for each measurement model. For the VFA portfolio, financial costs/revenue are recognised either in the Statement of profit or loss or in Other Comprehensive Income (OCI) in relation to the result of the fair value of the Underlying Items and depending on the IFRS 9 classification of the underlying assets themselves; for the BBA measurement model, on the other hand, financial costs/revenue are calculated on the basis of the valuation curves adopted for the calculation of IFRS 17 flows.
In the Statement of profit or loss tables, for the sake of clarity, the cost components that are allocated to insurance margins in accordance with IFRS 17 are shown under \"Allocation of costs directly attributable to insurance contracts\".
Accounting policy under IFRS 17
The choices made by the Group in applying the provisions of the standard are summarised below:
\u2022Risk mitigation: the Poste Group does not plan to adopt risk mitigation, i.e., the option not to recognise changes
in the CSM to account for some or all of the changes in the time effect of money and non-financial risk;
\u2022OCI Option: for insurance contracts with direct participation elements for which the underlying elements are
owned, the Group opts to disaggregate the finance income or expenses into Profit for the Period and Other Comprehensive Income, based on the results of IFRS 9, which defines the valuation of the underlying elements.
The Poste Italiane Group also provides that, for contracts measured using the VFA model, the fair value income generated by the underlying assets measured under IFRS 9, relating to finance income from separately managed assets, commissions and technical interest attributable to unit-linked policies, is passed on to policyholders based on the percentage weight of the Mathematical Provisions at the date (mirroring). The value of the returns generated by the assets related to the insurance liabilities is deducted from the profit retained by the Group (over-hedging) and then allocated to the individual units of account;
\u2022Exception to the use of annual cohorts188F189: the Poste Italiane Group adopts the exemption option189F190, limited to the
portfolios pertaining to the Line of Business \"With Profit Participating\" and the hybrid products with separately managed components of Poste Vita. These contracts will therefore not be divided into annual cohorts, but will be managed together due to the mutualisation effect of returns190F191, typical of separately managed accounts. The exception is not applicable for P&C business;
\u2022Method of presentation of the result of the outward reinsurance business: the Group has chosen a net
presentation for the reinsurance result.
Impacts of first-time adoption of IFRS 17
The Poste Italiane Group elected to apply IFRS 17 starting from its mandatory effective date of 1 January 2023, without early application. As required by the new standard, the transition date to IFRS 17 has been set at 1 January 2022. On that date, the Group defined the following transition methods, in compliance with the transitional provisions of the new standard, which concerned the insurance companies Poste Vita SpA and Poste Assicura SpA:
\u2022for the Life business, the Modified Retrospective Approach was adopted for the investment portfolio and the Fair Value approach for the pure risk portfolio;
\u2022for P&C business, on the other hand, the Fair Value Approach was adopted.
At 1 January 2022 the Poste Italiane Group considered the application of the Full Retrospective Approach because the available database for past years did not have the granularity and detail required to perform the valuation required by the accounting standard; therefore, the Modified Retrospective Approach was applied as the transition method for almost all insurance contracts. The complexity and high effort required to retrieve the historical data necessary for the application of the Modified Retrospective Approach resulted in the application of the Fair Value Approach for the remaining part of the contracts.
In applying the Modified Retrospective Approach, as required by the standard, the Group has adopted simplifications compared to the Full Retrospective Approach, mainly related to the profit on contracts net of the Adjustment for non-financial risk. In applying this approach, a historical depth of contracts of about 10 years was also considered, including policies issued since 2012 and still outstanding at the transition date. This simplification was adopted because the portfolio thus constructed is a good approximation of the overall portfolio, as positions issued prior to 2012 have a percentage
weight that is considered residual. In the application of the Fair Value Approach (FVA), the value of the CSM of the P&C business was determined as the premium reserve net of acquisition commissions, while for the Life business, used for the contract group measured by BBA, it was determined as the present value of future profits net of the Adjustment for non-financial risk.
The Poste Italiane Group, and thus also the two insurance companies Poste Vita and Poste Assicura, has been applying IFRS 9 since 1 January 2018. Following the adoption of IFRS 17, there were no changes to the classification and measurement rules for financial assets.
It should be noted that the two Net Group companies were acquired during 2023 and, therefore, after the transition date of 1 January 2022.
The following tables show the effects of the transition to IFRS 17 at 1 January 2022 recognised by individual item in the financial statements. The Group Statement of financial position also incorporates the changes introduced by IAS 1 - Presentation of Financial Statements following the new accounting standard.
(\u20acm)
ASSETS
31/12/2021 IFRS 4 balances
Accounting entries eliminated
Reclassified accounting items
Effects of IFRS 17 measurement
1 January 2022 restated
Property, plant and equipment
2,267
-
-
-
2,267
Investment property
32
-
-
-
32
Intangible assets
873
-
-
-
873
Right-of-use assets
1,116
-
-
-
1,116
Investments accounted for using the equity method
277
-
-
-
277
Financial assets
221,226
-
-
-
221,226
Assets for outward reinsurance
\"\"
-
-
-
48
48
Trade receivables
3
-
-
-
3
Deferred tax assets
1,245
-
-
400
1,644
Other receivables and assets
4,012
-
-
-
4,012
Tax credits Law no. 77/2020
5,551
-
-
-
5,551
Technical provisions attributable to reinsurers
50
(50)
-
-
\"\"
-
Non-current assets
236,652
(50)
-
448
237,048
Inventories
155
-
-
-
155
Trade receivables
2,508
-
-
-
2,508
Current tax assets
115
-
-
-
115
Other receivables and assets
1,146
-
(49)
-
1,097
Tax credits Law no. 77/2020
905
-
-
-
905
Financial assets
27,630
-
-
-
27,630
Cash and deposits attributable to BancoPosta
7,659
-
-
-
7,659
Cash and cash equivalents
7,958
-
-
-
7,958
Total current assets
48,076
-
(49)
-
48,027
TOTAL ASSETS
284,728
(50)
(49)
448
285,076
The value of Assets increased by \u20ac348 million; this effect is attributable to:
\u2022derecognition of the balance of Technical provisions attributable to reinsurers (only to be recognised under IFRS 4);
\u2022recognition of Assets for outward reinsurance, which represents the valuation at 1 January 2022 of the Group's exposures related to reinsurance contracts assumed;
\u2022recognition of deferred tax assets determined on the First Time Adoption reserve of IFRS 17 related to the accounting of Liabilities under insurance contracts;
\u2022reclassification of Due from policyholders, which are removed from Other receivables and assets to be considered under Liabilities under insurance contracts, specifically under Liability for remaining coverage, which is reported under Liabilities.
(\u20acm)
LIABILITIES AND EQUITY
31/12/2021 IFRS 4 balances
Accounting entries eliminated
Reclassified accounting items
Effects of IFRS 17 measurement
1 January 2022 restated
Share capital
1,306
-
-
-
1,306
Reserves
3,599
-
-
77
3,676
Treasury shares
(40)
-
-
-
(40)
Retained earnings
7,237
-
-
(974)
6,262
Total equity attributable to owners of the Parent
12,102
-
-
(897)
11,205
Equity attributable to non-controlling interests
8
-
-
-
8
Total
12,110
-
-
(897)
11,213
Technical provisions for insurance business
159,089
(159,089)
-
-
\"\"
-
Provisions for risks and charges
693
-
-
-
693
Employee termination benefits
922
-
-
-
922
Financial liabilities
15,122
-
-
-
15,122
Liabilities under insurance contracts
\"\"
-
-
-
160,334
160,334
Deferred tax liabilities
953
-
-
-
953
Other liabilities
1,749
-
-
-
1,749
Total non-current liabilities
178,528
(159,089)
-
160,334
179,774
Provisions for risks and charges
575
-
-
-
575
Trade payables
2,029
-
-
-
2,029
Current tax liabilities
16
-
-
-
16
Other liabilities
1,860
-
-
-
1,860
Financial liabilities
89,610
-
-
-
89,610
Total current liabilities
94,090
-
-
-
94,090
TOTAL LIABILITIES AND EQUITY
284,728
(159,089)
-
159,437
285,076
The value of Liabilities and Equity also increased by \u20ac348 million, as the combined result of a decrease in Equity of \u20ac897 million and an increase in Insurance Liabilities of \u20ac1,245 million, in particular as a result of the elimination of the value of Insurance Technical Provisions recognised in accordance with IFRS 4 and the consequent recognition of the carrying amount of Liabilities under insurance contracts, measured in accordance with IFRS 17.
The following is a reconciliation of equity between 31 December 2021, accounted for under IFRS 4, and 1 January 2022, which incorporates the effects of the changes in the new accounting standard:
(\u20acm)
Equity
\u00a0
Share capital
Treasury shares
Reserves
Retained earnings
Total equity attributable to owners of the Parent
Capital and reserves attributable to non-controlling interests
Total equity
\u00a0
Legal reserve
BancoPosta RFC reserve
Equity instruments - perpetual hybrid bonds
Fair value reserve
Cash flow hedge reserve
Reserve for insurance contracts issued and outward reinsurance
Translation reserve
Reserve for investments accounted for using equity method
Incentive plans reserve
\u00a0
Balance at 31 December 2021
1,306
(40)
299
1,210
800
1,307
(33)
-
1
3
13
7,236
12,102
8
12,110
First time adoption effect
-
-
-
-
-
-
-
-
-
-
-
(1,373)
(1,373)
-
(1,373)
Accounting mirroring
-
-
-
-
-
7,945
-
(7,868)
-
-
-
-
77
-
77
Fiscal effect on transition
-
-
-
-
-
\u00a0
-
-
-
-
-
400
400
-
400
Balance at 1 January 2022
1,306
(40)
299
1,210
800
9,251
(33)
(7,868)
1
3
13
6,262
11,205
8
11,213
The application of the new accounting standard to the Poste Italiane Group's equity resulted in a reduction in retained earnings of \u20ac974 million (net of tax effects), partially offset by \u20ac77 million related to the mirroring effect, i.e., the recognition in the statement of comprehensive income, in the new item \"Reserves for insurance contracts issued and outwards reinsurance\", of the change in the fair value of financial instruments measured at FVTOCI linked to separately managed accounts following the adoption of the OCI option exercised by the Poste Italiane Group. The final net effect was a reduction of \u20ac897 million in equity.
For a better understanding of the dynamics of the new standard, a comparison of the opening IFRS17 statement of financial position balances at 1 January 2022 with 31 December 2022, appropriately adjusted, is shown below.
(\u20acm)
ASSETS
1 January 2022
31 December 2022
Changes
\u00a0
Non-current assets
237,048
211,928
(25,121)
of which
\u00a0
Assets for outward reinsurance
48
44
(4)
Deferred tax assets
1,644
2,601
957
Current assets
48,027
50,146
2,119
TOTAL ASSETS
285,076
262,074
(23,002)
LIABILITIES AND EQUITY
1 January 2022
31 December 2022
Changes
Total equity
11,213
7,878
(3,334)
Non-current liabilities
179,774
156,647
(23,126)
of which
\u00a0
Liabilities under insurance contracts
160,334
141,380
(18,954)
Liability for remaining coverage
159,372
140,348
(19,025)
Liability for remaining PAA coverage
45
56
11
Present value of future cash flows
147,547
124,330
(23,218)
Adjustment for non-financial risk
1,324
3,060
1,736
Contractual service margin
10,456
12,902
2,446
Liability for incurred claims
962
1,032
70
Cash flows related to past services
952
1,016
64
Adjustment for non-financial risk
10
17
7
Current liabilities
94,090
97,549
3,459
TOTAL LIABILITIES AND EQUITY
285,076
262,074
(23,002)
Liabilities under insurance contracts amounted to \u20ac141,380 million at 31 December 2022 and decreased by approximately \u20ac18,954 million compared to the balance at 1 January 2022. This decrease is mainly related to the decrease in the present value of future cash flows as a result of the negative financial market dynamics experienced during the year compared to the transition date. The Adjustment for non-financial risk, on the other hand, increased as a result of the updated calculation assumptions used. These dynamics led to a positive effect on the Contractual Service Margin, which, together with the effect of new production and experience variance, resulted in an increase of \u20ac2,446 million.
Equity at 31 December 2022, modified following the application of IFRS 17, decreased by approximately \u20ac1,059 million.
Below is a breakdown of the summary movement in OCI, gross of the tax effect, prepared in application of IFRS 4, already published in the 2022 Annual Report, both following the application of the new standard:
\u00a0
(\u20acm)
\u00a0
2022 IFRS 17
of which insurance
2022 IFRS 4
of which insurance
Changes
Net profit/(loss) for the year
1,583
1,511
72
FVOCI debt instruments
-
Increase/(Decrease) in fair value during the year
(27,742)
(23,333)
(4,747)
(338)
(22,994)
Transfers to profit or loss from realisation
(286)
(136)
(161)
(10)
(125)
Increase/(decrease) for expected losses
4
0
4
0
(0)
Cash flow hedges
(130)
(130)
Financial revenue or costs relating to insurance contracts issued
22,784
22,784
\"\"
-
22,784
Financial revenue or costs related to outward reinsurance
(1)
(1)
\"\"
-
(1)
Other items
1,542
1,440
102
Items not to be reclassified in the Statement of profit or loss for the year
(220)
(219)
(1)
Total other comprehensive income
(4,048)
(3,814)
(234)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(2,465)
\u00a0
\u00a0
(2,303)
\u00a0
\u00a0
(162)
As is known, the financial year 2022 was characterised by a negative trend in the financial markets, which affected the result of the Statement of comprehensive income already at 31 December 2022. In the restated situation, the negative effect remains but is presented differently, as the new standard does not provide for the application of the shadow accounting technique. In fact, the unrealised capital losses generated by the securities portfolio, amounting to \u20ac27,742 million (of which \u20ac23,333 million related to the insurance business), are shown gross of the reversal to policyholders, as the mirroring component of the financial result is accounted for in the item \"Financial revenue or costs relating to insurance contracts issued\", consistent with the requirements of the new standard and the amendments to IAS 1. Compared to the net result recorded with the application of IFRS 4 in the insurance business alone, which amounted to an unrealised loss of \u20ac338 million, the IFRS 17 result amounted to an unrealised loss of \u20ac549 million (obtained as the difference between the delta fair value of debt instruments measured at FVTOCI recorded in the year and pertaining to the insurance business alone and the amount retroceded to policyholders of \u20ac22,784 million). Although the value of the changing fair value of the securities portfolio remains unchanged in the application of IFRS 17, what changes is the representation of the \"over-coverage\", i.e. the component of the financial result related to insurance liabilities that is not passed on to policyholders but represents the Group's unrealised capital gain or loss, which is determined in a timely manner prior to the allocation of income to the individual Units of Account and mirroring.
2.5 MATERIAL INFORMATION ON ACCOUNTING STANDARDS
The Poste Italiane Group's financial statements have been prepared on a historical cost basis, with the exception of certain items for which fair value measurement is obligatory.
Below is information on accounting standards considered relevant191F192 by the Poste Italiane Group, as well as all other information considered by management to be useful for understanding financial statement disclosures, revised essentially
to take into account the new provisions of IAS 1 - Presentation of Financial Statements, which came into force on 1 January 2023.
Property, plant and equipment
Property, plant and equipment is stated at acquisition or construction cost, less accumulated depreciation and any accumulated impairment losses. Where the condition is met, this cost is increased for charges directly related to the purchase or construction of the asset, including - where identifiable and measurable - that relating to employees involved in the planning and/or preparation for use phase. Interest expense incurred by the Group for loans specifically for the acquisition or construction of property, plant and equipment is capitalised together with the value of the asset; all other interest expense is recognised as finance costs in profit or loss for the year in question. Costs incurred for routine and/or cyclical maintenance and repairs are recognised directly in profit or loss in the related year. The capitalisation of costs attributable to the extension, modernisation or improvement of assets owned by Group companies or held under lease is carried out to the extent that they qualify for separate recognition as an asset or as a component of an asset, applying the component approach, which requires each component with a different estimated useful life and value to be recognised and amortised separately.
The original cost is depreciated on a straight-line basis from the date the asset is available and ready for use, based on the asset's expected useful life. Land is not depreciated
Property and any related fixed plant and machinery located on land held under concession or sub-concession, which is to be returned free of charge to the grantor at the end of the concession term, are accounted for, based on the nature of the asset, within property, plant and equipment and depreciated on a straight-line basis over the shorter of the useful life of the asset and the residual concession term.
At each reporting date, property, plant and equipment is analysed in order to identify the existence of any indicators of impairment (in accordance with IAS 36 - Impairment of Assets; please refer to the treatment of impairment of assets).
Gains and losses deriving from the disposal or retirement of an asset are calculated as the difference between the disposal proceeds and the net carrying amount of the asset retired or sold, and are recognised in profit or loss in the period in which the transaction occurs.
The Investment property of the Poste Italiane Group relates to land or buildings held with a view to earn rental or lease income or for capital appreciation or both; in both cases such property generates cash flows that are largely independent of other assets. The same accounting treatment is applied to investment property as to property, plant and equipment.
For details of the useful life of the main classes of Property, plant and equipment of the Group, reference should be made to Note 2.6 - Use of estimates.
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, which is controllable and capable of generating future economic benefits. The initial carrying amount is adjusted for accumulated amortisation, where an amortisation process is envisaged, and for any impairment losses.
In particular, Industrial patents, intellectual property rights, licences and similar rights are initially valued at purchase cost. This cost is increased for charges directly related to the purchase or preparation for use of the asset. Interest expense that the Group may incur for loans specifically for the purchase of industrial patents, intellectual property rights, licenses and similar rights are capitalised together with the value of the asset; all other interest expense is recognised as finance costs in profit or loss for the year. Amortisation starts once the asset is available for use. Amortisation is applied on a
straight-line basis, in order to distribute the purchase cost over the shorter of the expected useful life of the asset and any related contract terms, from the date the entity has the right to use the asset.
Industrial patents, intellectual property rights, licenses and similar rights include costs directly associated with the internal production of unique and identifiable software products. Direct costs include - where identifiable and measurable - the charge related to employees involved in software development. Costs incurred for the maintenance of internally developed software products are charged to profit or loss for the year in question. Amortisation begins when the asset is available for use and extends, systematically and on a straight-line basis, over its estimated useful life. Any research costs are not capitalised.
Among the Group's intangible assets, Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the identifiable assets and liabilities of the company or business acquired, at the date of acquisition. Goodwill attributable to investments accounted for using the equity method is included in the carrying amount of the equity investment. Goodwill is not amortised on a systematic basis, but is tested periodically for impairment in accordance with IAS 36. This test is performed with reference to the cash generating unit (\"CGU\") to which the goodwill is attributable. The method applied in conducting impairment tests and the impact on the accounts of any impairment losses are described in the paragraph, \"Impairment of assets\".
Lastly, it should be noted that following the Purchase Price Allocation activity related to the acquisition of the Net Group, the value of the \"Net Insurance\" brand was recognised among the Group's Intangible assets. Similar to Goodwill, this Brand, considered to have an indefinite useful life, is not subject to systematic amortisation but to the provisions of IAS 36 on impairment.
Lease arrangements
The Group assesses whether a contract is or contains a lease at the time of its initial recognition; over the life of the contract, the initial assessment is revised only in response to changes in the terms of the contract (specifically, contractual term or lease payments due).
On the contract commencement date, a right to use the leased asset is recorded, equal to the initial value of the corresponding lease liability, plus payments due before or at the same time as the contract commencement date (e.g. agency fees). Subsequently, said right of use is measured less accumulated depreciation and any accumulated impairment losses. Depreciation starts on the commencement date of the lease and extends over the shorter of the lease term and the useful life of the underlying asset. If events or changes in circumstances indicate that the carrying amount of the right of use cannot be recovered, this asset is tested for impairment in accordance with the provisions of IAS 36 - Impairment of Assets.
The lease liability is initially recorded at the present value of the lease instalments not paid on the date the contract commences192F193, discounted using the incremental borrowing rate, defined by loan period and for each Group company. The lease liability is subsequently reduced to reflect the lease payments made and increased to reflect interest on the remaining amount.
The lease liability is restated (resulting in a right-of-use adjustment) in the event of a change in:
\u2022the lease term (for example, in the case of early termination of the contract or an extension of the lease);
\u2022the assessment of a purchase option for the underlying asset; in these cases, lease payments due are reviewed on the basis of the revised lease term and to take account of the change in the amounts payable in view of the purchase option;
\u2022future lease payments deriving from a change in the index or rate used to determine the payments (e.g. ISTAT), or as a result of a renegotiation of the financial conditions.
Only in the case of a significant change in the lease term or in future lease payments does the Group remeasure the remaining lease liability with reference to the incremental borrowing rate at the date of the modification.
The Group avails itself of the option granted by the principle to apply a simplified accounting regime to short-term contracts for some specific asset classes (with a duration of no more than twelve months), to contracts in which the individual underlying asset is of low value (up to \u20ac5,000) and to contracts in which the individual underlying asset is an intangible asset; for these contracts, lease payments are recognised in profit or loss as matching entry to short-term trade payables.
Impairment of assets
At the end of each reporting period, property, plant, equipment and intangible assets with finite lives are analysed to assess whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the impairment loss to be recognised in profit or loss. The recoverable amount is the higher of an asset's fair value less costs to sell, and its value in use, represented by the present value of the future cash flows expected to be derived from the asset. In calculating value in use, future cash flow estimates are discounted using a rate that reflects current market assessments of the time value of money, the period of the investment and the risks specific to the asset. The realisable value of assets that do not generate separate cash flows is determined with reference to the cash generating unit (CGU) to which the asset belongs.
Regardless of any impairment indicator, the assets listed below are tested for impairment every year:
\u2022intangible assets with an indefinite useful life or that are not yet available; the impairment test can take place at any time during the year, provided that it is performed at the same time in each of the following years;
\u2022goodwill acquired in a business combination.
An impairment loss is recognised in profit or loss for the amount by which the net carrying amount of the asset, or the CGU to which it belongs, exceeds its recoverable amount. In particular, if the impairment loss regards goodwill and is higher than the related carrying amount, the remaining amount is allocated to the assets included in the CGU to which the goodwill has been allocated, in proportion to their carrying amount193F194. Except in the case of goodwill, if the impairment indicators no longer exist, the carrying amount of the asset or CGU is reinstated and the reversal recognised in profit or loss. The reversal must not exceed the carrying amount that would have been determined had no impairment loss been recognised and depreciation or amortisation been charged.
Investments
In the Poste Italiane Group's consolidated financial statements, investments in companies over which the Group exerts significant influence, (\"associates\") and in joint ventures, are accounted for using the equity method. Certain particularly insignificant investments in subsidiaries (individually and in aggregate) are also valued using the equity method. See note 2.8 \u2013 Basis of consolidation.
In Poste Italiane SpA's separate financial statements, investments in subsidiaries and associates are accounted for at cost (including any directly attributable incidental expenses), after adjustment for any impairments. Investments in subsidiaries
and associates are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment losses (or subsequent reversals of impairment losses) are recognised in the same way and to the same extent described with regard to property, plant and equipment and intangible assets in the paragraph, \"Impairment of assets\".
Financial instruments
On initial recognition, financial assets and liabilities are classified at fair value based on the business purpose for which they were acquired. The purchase and sale of financial instruments is recognised by category, either on the date on which the Group commits to purchase or sell the asset (the transaction date), or, in the case of insurance transactions and BancoPosta's operations, at the settlement date194F195. Any changes in fair value between the transaction date and the settlement date are recognised in the financial statements.
On the other hand, trade receivables are recognised at their transaction price, in accordance with IFRS 15 - Revenue from Contracts with Customers.
On initial recognition, financial assets are classified in one of the following categories, based on the business model adopted to manage them and the characteristics of their contractual cash flows:
\u2022Financial assets measured at amortised cost
This category reflects financial assets held to collect the contractual cash flows (the held to collect or HTC business model) representing solely payments of principal and interest (SPPI). These assets are measured at amortised cost, that is the value assigned to the financial asset or liability on initial recognition, net of any principal reimbursement, plus or minus the cumulative amortisation by using the effective interest rate method on the difference between the initial value and the value at maturity, after deducting any impairment. The business model on which the classification of financial assets is based permits the sale of such assets; if the sales are not occasional, and are not immaterial in terms of value, consistency with the HTC business model should be assessed.
\u2022Financial assets measured at fair value through other comprehensive income (FVTOCI)
This category includes financial assets held both to collect the relevant contractual cash flows and for sale (the held to collect and sell or HTC&S business model), with the contractual cash flows representing solely payments of principal and interest.
These financial assets are measured at fair value and, until they are derecognised or reclassified, gains or losses from valuation are recognised in other comprehensive income. Exceptions to this are gains and losses due to impairment and foreign exchange gains and losses recognised in the profit or loss in the year in question. If the financial asset is derecognised, the accumulated gains/(losses) recognised in OCI are recycled to profit or loss.
This category also includes equity instruments that would otherwise be recognised through profit or loss, for which the irrevocable election was made to recognise changes in fair value through OCI (the FVTOCI option). This option entails the recognition of solely dividends through profit or loss.
\u2022Financial assets measured at fair value through profit or loss
This category includes: (a) financial assets primarily held for trading; (b) those that qualify for designation at fair value through profit or loss, exercising the fair value option; (c) financial assets that must be recognised at fair value through profit or loss; (d) derivative instruments, with the exception of the effective portion of those designated as cash flow hedges. Financial assets belonging to the category in question are measured at fair value and the related changes are recognised in profit or loss. Derivative instruments at fair value through profit or loss are recognised as assets or liabilities depending on whether the fair value is positive or negative.; positive and negative fair values deriving from transactions with the same counterparty are offset during the collateralisation phase, where contractually provided for.
The classification as \"current\" or \"non-current\" of financial assets measured at amortised cost and financial assets measured at fair value through other comprehensive income depends on the contractual maturity of the instrument, since current assets are those whose realisation is expected within twelve months of the reporting date. Financial assets measured at fair value through profit or loss are, on the other hand, classified as \"current\" if held for trading and are expected to be sold within twelve months of the reporting date.
An expected credit loss (ECL) provision must be made for financial assets recognised at amortised cost and financial assets at fair value through OCI, as follows: (i) specific provisions for doubtful debts are made for expected losses on financial assets measured at amortised cost; (ii) expected losses on financial assets measured at fair value through other comprehensive income are recognised in profit or loss, with a contra entry in the fair value reserve in equity. The method utilised is the \"General impairment model\", whereby:
\u2022If on the reporting date the credit risk of a financial instrument has not increased significantly since initial recognition, a 12-month ECL is recognised (stage 1). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If on the reporting date the credit risk of the financial instrument has increased significantly since initial recognition, a lifetime ECL is recognised (stage 2). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If a financial instrument is already impaired on initial recognition or shows objective evidence of impairment at the reporting date, lifetime expected losses are recognised. Interest is recognised at amortised cost (stage 3), i.e. on the basis of the exposure value - determined using the effective interest rate - adjusted for expected losses.
Detailed information on the inputs, assumptions and techniques for determining expected losses on financial assets is provided in Note 2.6 - Use of Estimates, to which reference is made for a full discussion.
Financial assets are derecognised when there is no longer a contractual right to receive cash flows from the investment or when all the related risks and rewards and control have been substantially transferred. If the substantial transfer of risks and rewards cannot be ascertained, financial assets are derecognised if no control is retained over them. Finally, transferred assets are derecognised if the contractual right to receive the cash flows of the assets is retained, but at the same time a contractual obligation is assumed to pay these flows to a third party, without delay and only to the extent of those received.
In addition, for impaired financial assets, derecognition may take place following the write-off of the same, following the acknowledgement that there is no reasonable expectation of recovery (e.g. prescription).
Financial liabilities, including loans, trade payables and other payment obligations, are measured at amortised cost using the effective interest method. If there is a change in the expected cash flows and they can be reliably estimated, the value of borrowings is recalculated to reflect the change on the basis of the present value of estimated future cash flows and the internal rate of return initially applied. Financial liabilities are classified as current liabilities, unless there is an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.
When required by the applicable IFRS (e.g. in the case of derivative liabilities), or when the irrevocable fair value option is exercised, financial liabilities are recognised at fair value through profit or loss. In this case, changes in fair value attributable to changes in own credit risk are recognised directly in equity, unless this treatment creates or enhances an accounting asymmetry, whereby the residual amount of the changes in the fair value of liabilities is recognised through profit or loss.
Financial liabilities are derecognised when they are extinguished or when the obligation specified in the contract expires, is cancelled or discharged.
For hedge accounting transactions, the Poste Italiane Group has elected to use the option made available by IFRS 9 and has retained the accounting treatments provided for by IAS 39. In accordance with this standard, derivatives are initially recognised at fair value on the date the derivative contract is executed and if they do not qualify for hedge accounting treatment, gains and losses arising from changes in fair value are accounted for in profit or loss for the period.
If, on the other hand, derivative financial instruments qualify for hedge accounting, gains and losses arising from changes in fair value after initial recognition are accounted for in accordance with IAS 39 \u2013 Financial Instruments: Recognition and Measurement, as described below.
The relationship between each hedging instrument and the hedged item is documented, as well as the risk management objective, the strategy for undertaking the hedge transaction and the methods used to assess effectiveness. Assessment of whether the hedging derivative is effective takes place both at designation of each derivative instrument as hedging instrument, and during its life.
\u2022Fair value hedges195F196
When the hedge is related to recognised assets or liabilities, or an unrecognised firm commitment, the changes in fair value of both the hedging instrument and the hedged item are recognised in profit or loss. When the hedging transaction is not fully effective, resulting in differences between the above changes, the ineffective portion represents a loss or gain recognised separately in profit or loss for the period.
Macro hedges are deemed highly effective if, at their inception and throughout the term of the hedge, changes in the fair value of the hedged cash amount are offset by changes in the fair value of the hedges, and if the effective results fall within the interval required by the reference standard.
\u2022Cash flow hedges196F197
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges after initial recognition is recognised in a specific equity reserve, with movements in the reserve accounted for in \"Other comprehensive income\" (the \"Cash flow hedge reserve\"). A hedging transaction is generally considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. If the hedging transaction is not fully effective, the gain or loss arising from a change in fair value relating to the ineffective portion is recognised in profit or loss for the period.
Amounts accumulated in equity are recycled to profit or loss in the period in which the hedged item affects profit or loss. In particular, in the case of hedges associated with a highly probable forecast transaction (such as the purchase of fixed income debt securities), the reserve is reclassified to profit or loss in the period or in the periods in which the asset or liability, subsequently accounted for and connected to the aforementioned transaction, will affect profit or loss (for example, an adjustment to the return on the security).
If, during the life of the derivative, the forecast hedged transaction is no longer expected to occur, the related gains and losses accumulated in the cash flow hedge reserve are immediately reclassified to profit or loss for the period. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the related gains and losses accumulated in the cash flow hedge reserve at that time remain in equity and are recognised in profit or loss at the same time as the original underlying.
Embedded derivatives
An embedded derivative is a derivative included in a combined contract or hybrid instrument, also containing a non-derivative contract or host contract, which originates all or part of the cash flows of the combined contract. Embedded derivatives are separated from the host contract and recognised as a derivative when:
\u2022the host contract is not a financial instrument measured at fair value through profit or loss;
\u2022the economic risks and characteristics of the embedded derivative are not closely related to those of the host contract;
\u2022a separate contract with the same terms as the embedded derivative would meet the definition of a derivative.
Within the Group, contracts that may contain embedded derivatives are:
\u2022contracts for the purchase of non-financial items entered into by Postepay SpA with clauses or options that influence the contract price, for which, however, embedded derivatives are not separable from the host contract;
\u2022convertible bonds held by Poste Italiane SpA and Postepay SpA, for which the embedded derivative component is not separated as the host contract is a financial instrument measured at fair value through profit or loss.
Repurchase agreements
Any securities received as part of a transaction entailing subsequent re-sale and the delivery of securities as part of a transaction entailing their subsequent repurchase are not either recognised or derecognised in these financial statements. Consequently, in the case of securities purchased under a resale agreement, the amount paid is recognised as an amount due from customers or banks under Financial assets measured at amortised cost; in the case of securities sold under a repurchase agreement, the liability is recognised as an amount due to banks or customers under Financial liabilities measured at amortised cost. The transactions described are subject to offsetting if, and only if, they are carried out with the same counterparty, have the same maturity and offsetting is provided for in the contract.
Tax credits Law no. 77/2020
In order to identify the correct accounting treatment of receivables acquired in relation to Relaunch Decree no. 34/2020 (later converted into Law no. 77 of 17 July 2020), since it is not possible to identify the framework directly applicable to this case, in compliance with the provisions of IAS 8, an accounting policy was defined suitable for providing relevant and reliable information aimed at ensuring a faithful representation of the financial position, income and cash flows and which reflects the economic substance and not merely the form of the transaction. On the basis of the analyses carried out and the documents published by the main Italian supervisory bodies (Joint Document of the Bank of Italy, IVASS and CONSOB197F198), although the definition of financial assets in IAS 32 is not directly applicable to this case, an accounting model was developed based on IFRS 9 given that:
\u2022at inception, an asset as defined by the Conceptual Framework arises in the transferee's financial statements;
\u2022they may be used to offset a payable that is usually settled in cash (tax payables), and exchanged for other financial assets on terms that may be potentially favourable to the entity;
\u2022a business model can be identified (Hold to Collect, Hold to Collect and Sell or other business models).
At the date of purchase, these receivables are recognised at their fair value (coinciding with the price paid) and subsequently measured at amortised cost, as they were acquired to be used to offset tax or social security payables by Poste Italiane SpA, based on the provisions of the relevant regulations (\"Hold to Collect\" business model).
Classification of receivables and payables attributable to BancoPosta and EMI RFC
Receivables and payables attributable to BancoPosta RFC are treated as financial assets and liabilities if related to BancoPosta's typical deposit-taking and lending activities, or services provided under authority from customers. The related operating expenses and income, if not settled or classifiable in accordance with Bank of Italy Circular 272 of 30 July 2008 \u2013 The Account Matrix, are accounted for in trade receivables and payables.
Receivables and payables attributable to EMI RFC are treated as financial assets and liabilities if related to EMIs' typical activities, or services provided under authority from customers. The related operating expenses and income, if not settled or classifiable in accordance with Bank of Italy Circular 217 of 5 August 1996 \u2013 The Account Matrix, are accounted for in trade receivables and payables.
Own use exemption
The standards establishing the principles for the recognition and measurement of financial instruments are also applied to derivative contracts to buy or sell non-financial items that are settled net in cash or in another financial instrument, with the exception of contracts entered into, and that continue to be held, for the purpose of the receipt or delivery of a non-financial item in accordance with the entity's expected purchase, sale or usage requirements (the own use exemption). This exemption applies to the recognition and measurement of forward electricity and natural gas contracts entered into by the subsidiary Postepay SpA if the following conditions have been met:
\u2022the contract involves the physical supply of a commodity;
\u2022the entity has not entered into an offsetting contract;
\u2022the transaction must be entered into in accordance with expected purchase and/or sale or usage requirements.
When the above conditions are met, the contract for the purchase or sale of non-financial items is classified as a \"normal contract of sale\".
Taxes
Current income tax expense is based on the best estimate of taxable profit for the period and the related regulations, applying the rates in force. Deferred tax assets and liabilities are calculated on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts, using tax rates that are expected to apply when the related deferred tax assets are realised or the deferred tax liabilities are settled. Deferred tax assets and liabilities are not recognised if the temporary differences derive from investments in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary difference is controlled by the Group or it is probable that the temporary difference will not reverse in the foreseeable future. In accordance with IAS 12, deferred tax liabilities are not recognised on goodwill deriving from a business combination.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Current and deferred taxes are recognised in profit or loss, with the exception of taxes charged or credited directly to equity, in which case the tax effect is recognised directly in equity. Current and deferred tax assets and liabilities are offset when they are applied by the same tax authority to the same taxpaying entity, which has the legally exercisable right to offset the amounts recognised, and the entity has the intention of exercising this right. As a result, tax liabilities accruing in interim
periods that are shorter than the tax year are not offset against related assets deriving from withholding tax or advances paid.
The Group's taxation and accounting standards take account of the effects of Poste Italiane SpA's participation in the national tax consolidation scheme, for which the option has been exercised in accordance with the law, together with the following subsidiaries: Poste Vita SpA, SDA Express Courier SpA, Poste Air Cargo Srl, Postel SpA, Europa Gestioni Immobiliari SpA, Poste Welfare Servizi Srl, Poste Assicura SpA, BancoPostaFondi SpA SGR, PostePay SpA, Poste Insurance Broker Srl, MLK Deliveries SpA, Indabox Srl, Nexive Network Srl, LIS Holding SpA, LIS PAY SpA, Address Software Srl, Consorzio Servizi Scpa, Logos Srl and Plurima SpA. The tax consolidation arrangement is governed by Group regulations based on the principles of neutrality and equality of treatment, which are intended to ensure that the companies included in the tax consolidation are in no way penalised as a result. Following adoption of the tax consolidation arrangement, the Parent Company's tax expense is determined at consolidated level on the basis of the tax expense or tax losses for the period for each company included in the consolidation, taking account of any withholding tax or advances paid. Poste Italiane SpA posts its IRES tax expense to income taxes for the period, after adjustments to take account of the positive or negative impact of tax consolidation adjustments. Should the reductions or increases in tax expense deriving from such adjustments be attributable to the companies included in the tax consolidation, Poste Italiane SpA attributes such reductions or increases in tax expense to the companies in question. The economic benefits deriving from the offset of tax losses transferred to the consolidating entity by the companies participating in the tax consolidation arrangement are recognised in full by Poste Italiane SpA. Other taxes not related to income are included in \"Other operating costs\".
Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of interchangeable items and goods for resale is calculated using the weighted average cost method. In the case of non-interchangeable items, cost is measured on the basis of the specific cost of the item at the time of purchase. The value of the inventories is adjusted, if necessary, by provisions for obsolete or slow-moving stock. When the circumstances that previously led to recognition of the above provisions no longer exist, or when there is a clear indication of an increase in the net realisable value, the provisions are fully or partly reversed, so that the new carrying amount is the lower of cost and net realisable value at the end of the reporting period. Assets are not, however, recognised in the statement of financial position when the Group has incurred an expense that, based on the best information available at the date of preparation of the financial statements, is deemed unlikely to generate economic benefits for the Group after the end of the reporting period.
In the case of properties held for sale198F199, if present, cost is represented by the fair value of each asset at the date of acquisition, plus any directly attributable transaction costs, whilst the net realisable value is based on the estimated sale price under normal market conditions, less direct costs to sell.
Long-term contract work is measured using the percentage of completion method, using cost to cost accounting199F200.
Environmental certificates not used in the reporting period are recognised in inventories.
Environmental certificates
Within the Poste Italiane Group, environmental certificates refer to:
\u2022Emission allowances held by the company Poste Air Cargo Srl as an incentive to reduce greenhouse gas emissions200F201 with the aim of achieving an improvement in technologies used in energy production and industrial processes,
\u2022Guarantees of origin and carbon credits held by the company Postepay SpA; the former aimed at certifying the origin from renewable sources of the electricity sold; the latter aimed at fully offsetting CO2 emissions from natural gas consumption.
Emission allowances
The European Emissions Trading System, which works on the basis of the cap and trade principle, has capped annual greenhouse gas emissions at European level. This corresponds to the issue, free of charge, of a set number of emission allowances by the competent national authorities. During the year, depending on the effective volume of greenhouse gas emissions produced with respect to the above cap, each company has the option of selling or purchasing emission allowances on the market.
The issue, free of charge, of emission allowances involves a commitment to produce, in the relevant year, a quantity of greenhouse gas emissions in proportion to the emission allowances received: this commitment, commensurate with the market value of the emission allowances at the time of allocation, is disclosed in the notes to the financial statements. At the end of the year, the commitment is reduced or derecognised in proportion to the greenhouse gas emissions effectively produced and any residual value is reported in the section, \"Additional information\", in the Annual Report.
Guarantees of origin and carbon credits
Guarantees of Origin are certifications attesting to the renewable origin of the sources used by IGO (Guarantee of Origin Plants) classified plants. For each MWh of renewable electricity fed into the grid by IGO-qualified plants, the GSE (Gestore Servizi Energetici) issues a GO certificate to the producer, in accordance with EU Directive 2018/2001. As of 1 January 2013, electricity sales companies are obliged to procure a quantity of GO certificates equal to the electricity sold as renewable. To do this, each company is required, by 31 March of the year following the year in which electricity was supplied to end customers, to cancel a quantity of GOs equal to the electricity sold as renewable.
Carbon credits, on the other hand, represent a negotiable security that allows a company or organisation to offset the carbon dioxide (CO2) emitted in the course of its activities (in the case of Postepay SpA, the CO2 emissions of the gas marketed to end customers), by adhering to environmental sustainability projects aimed at pursuing a path of ecological transition and decarbonisation.
CO2 offsetting takes place through the acquisition of carbon credits for a value equivalent to the CO2 emissions resulting from the gas consumption of the Company's end customers. Each carbon credit represents the offsetting of one tonne of CO2.
The accounting treatment of emission allowances, guarantees of origin and carbon credits to the extent that they are similar, in the absence of specific guidelines in the IAS/IFRS framework, is carried out in accordance with the provisions of the OIC 8 \"Greenhouse Gas Emission Allowances\", as well as with the reference best practice for the main IAS adopters. The purchase and sales of environmental certificates are accounted for in profit or loss in the year in which the transaction occurs. At the end of the year, any surplus deriving from purchases is accounted for in closing inventory at the lower of cost and net realisable value201F202. In the event of a deficit, the resulting charge and related liability are accounted for at the end of the year at market value.
Business Combinations
Business combinations are recognised using the acquisition method. The consideration transferred in a business combination is equal to the sum of the fair values, at the acquisition date, of the assets transferred, the liabilities incurred,
and any interest issued by the acquirer. Costs directly attributable to the transaction are recognised in the Statement of profit or loss.
The amount transferred is allocated by recognising the identifiable assets, liabilities and contingent liabilities of the acquiree at the related fair values at the acquisition date.
Any positive difference between the carrying amount of the asset and its recoverable value is recognised as goodwill and recorded under intangible assets:
\u2022the sum of the consideration transferred, measured at fair value at the acquisition date, the amount of any non-controlling interest, and, in the case of business combinations achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree; and
\u2022the net value of the amounts, at the acquisition date, of the assets acquired and liabilities assumed that are identifiable in the acquiree measured at fair value.
In the event of a negative difference, this surplus represents the profit from a purchase on favourable terms and is recognised in the statement of profit or loss.
If at the time of preparing the financial statements the fair value of the assets, liabilities and contingent liabilities arising from the transaction can only be determined provisionally, the business combination is recognised using these provisional values. Any adjustments resulting from the completion of the valuation process are recognised retrospectively within twelve months of the acquisition date.
In the case of a business combination achieved in stages, the interests previously held in the acquiree are remeasured at fair value at the new acquisition date and any difference (positive or negative) is recognised in the statement of profit or loss or in the statement of comprehensive income if appropriate.
Cash and deposits attributable to BancoPosta
Cash and securities held at post offices, and bank deposits attributable to the operations of BancoPosta RFC, are accounted for separately from cash and cash equivalents as they derive from deposits subject to investment restrictions, or from advances from the Italian Treasury to ensure that post offices can operate. This cash may only be used in settlement of these obligations.
Cash and cash equivalents
Cash and cash equivalents refer to cash in hand, deposits held at call with banks, amounts that at 31 December 2023 the Parent Company has temporarily deposited with the MEF and other highly liquid short-term investments with original maturities of ninety days or less. Current account overdrafts are accounted for in current liabilities.
Non-current assets (or disposal groups) classified as held for sale and discontinued operations
Non-current assets, disposal groups and discontinued operations are measured at the lower of their carrying amount and fair value, less costs to sell.
When it is highly probable that the carrying amount of a non-current asset, or a disposal group, will be recovered, in its present condition, principally through a sale transaction or other form of disposal, rather than through continuing use, and the transaction is likely to take place in the short term, the asset or disposal group is classified as held for sale or as a discontinuing operation in the statement of financial position. The transaction is deemed to be highly probable, when the Parent Company's Board of Directors, or, when so authorised, the board of directors of a subsidiary, has committed to a plan to sell the asset (or disposal group), and an active programme to locate a buyer and complete the plan has been initiated. Sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance.
Equity
Share capital
Share capital is represented by Poste Italiane SpA's subscribed and paid-up capital. Incremental costs directly attributable to the issue of new shares are recognised as a reduction of the share capital, net of any deferred tax effect.
Treasury shares
Treasury shares are recognised at cost and deducted from equity. The effects of any subsequent sales are recognised in equity.
Hybrid bonds
Perpetual subordinated hybrid bonds are classified as an equity instrument in the financial statements, in view of the fact that the issuing Company has the unconditional right to defer repayment of the principal and payment of the coupons until the date of its winding-up or liquidation. Therefore, the amount received from the subscribers of these instruments, net of the related issue costs, is recognised as an increase in Group shareholders' equity; conversely, repayments of principal and payments of coupons due (at the time the related contractual obligation arises) are recognised as a decrease in equity.
Reserves
Reserves include capital and revenue reserves. They include, among others, the BancoPosta ring-fenced capital reserve, representing the dedicated assets attributed to Bancoposta RFC, legally autonomous, the Parent Company's legal reserve, the fair value reserve, relating to items recognised at fair value through equity, and the cash flow hedge reserve, reflecting the effective portion of hedging instruments outstanding at the end of the reporting period and the translation reserve which includes the exchange differences from the translation, in the presentation currency, of the financial statements of the consolidated companies that operate with a non-Euro functional currency.
Retained earnings
This relates to the portion of profit for the period and for previous periods which has not been distributed or taken to reserves or used to cover losses and actuarial gains and losses deriving from the calculation of the liability for employee termination benefits, and transfers from other equity reserves, when they have been released from the restrictions to which they were subjected. In the consolidated financial statements, the item also includes any effects arising from transactions with minority shareholders.
Insurance contracts
The entry into force of the new accounting standard on insurance contracts has led to significant changes in the way insurance assets are determined and valued. For details on the new provisions of IFRS 17 and how Insurance Assets and Liabilities are determined, see Note 2.4 - Changes to accounting policies.
Provisions for risks and charges
Provisions for risks and charges are recorded to cover losses that are either probable or certain to be incurred, for which, however, there is an uncertainty as to the amount or as to the date on which they will occur. Provisions for risks and charges are made when the Group has a present (legal or constructive) obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation. Provisions are measured on the basis of management's best estimate of the use of resources required to settle the obligation. The value of the liability is discounted, where the time effect of money is relevant, at a rate that reflects current market values and takes into account the risks specific to the liability. Provisions are reviewed at each reporting date and are adjusted to reflect the best estimate of the expected charge to meet existing obligations at the reporting date. Any effect of the passage of time and the effect of changes in interest rates are shown in the statement of profit or loss. With regard to the risks for which the occurrence of a liability is only possible, specific information is provided without making any provision. In those rare cases in which disclosure of some or all of the information regarding the risks in question could seriously prejudice the Group's position in a dispute or in ongoing negotiations with third parties, the Group exercises the option granted by the relevant accounting standards to provide limited disclosure.
Employee benefits
The Short-term employee benefits are those that will be fully paid within twelve months of the end of the year in which the employee provided his or her services. Such benefits include wages, salaries, social security contributions, holiday pay and sick pay.
The undiscounted value of short-term employee benefits to be paid to employees in consideration of employment services provided over the relevant period is accrued as personnel expenses.
There are two types of post-employment benefits:
\u2022Defined benefit plans
Defined benefit plans include employee termination benefits due to employees pursuant to Article 2120 of the Italian Civil Code limited to the portions of employee termination benefits accrued in the company up to 31 December 2006, for Group companies with at least 50 employees, as well as the portions of employee termination benefits accrued during the period in the case of Group companies with less than 50 employees, which continue to increase the value of the accumulated liability.
Under these plans, given that the amount of the benefit to be paid is only quantifiable following the termination of employment, the related effects on profit or loss or the financial position are recognised on the basis of actuarial calculations. In particular, the liability to be paid on cessation of employment is calculated using the projected unit credit method and then discounted to recognise the time value of money prior to the liability being settled. The liability recognised in the financial statements is based on calculations performed by independent actuaries. The calculation takes into account accrued employee termination benefits for services already rendered and is based on actuarial assumptions described in Note \"2.6 - Use of Estimates - Employee termination benefits\", to which reference should be made. Actuarial gains and losses at the end of each reporting period, based on the difference between the carrying amount of the liability and the present value of the Group's obligations at the end of the period, due to changes in the actuarial assumptions, are recognised directly in Other comprehensive income.
\u2022Defined contribution plans
Employee termination benefits fall within the scope of defined contribution plans provided the benefits vested subsequent to 1 January 2007 and were paid into a Supplementary Pension Fund or a Treasury Fund at INPS. Contributions to defined contribution plans are recognised in profit or loss when incurred, based on their nominal value.
The Termination benefits payable to employees are recognised as a liability when the entity gives a binding commitment, also on the basis of consolidated relationships and mutual undertakings with union representatives, to terminate the employment of an employee, or group of employees, prior to the normal retirement date or, alternatively, an employee or group of employees accepts an offer of benefits in consideration of a termination of employment. Termination benefits payable to employees are immediately recognised as personnel expenses.
Other long-term employment benefits consist of benefits not payable within twelve months of the end of the reporting period during which the employees provided their services. The net change in the value of any of the components of the liability during the reporting period is recognised in full in profit or loss.
Share-based payments
Share-based payment transactions may be settled in cash, with equity instruments, or with other financial instruments. Goods or services received or acquired through a share-based payment transaction are recognised at their fair value.
In the case of cash-settled share-based payment transactions:
\u25aaa liability is recognised as a matching entry at cost;
\u25aaif the fair value of the goods or services received or acquired cannot be reliably determined, this value must be estimated indirectly on the basis of the fair value of the liability;
\u25aathe fair value of the liability must be remeasured at the end of each reporting period, recognising any changes in fair value in profit or loss for the period.
In the case of equity-settled share-based payment transactions:
\u25aaan increase in shareholders' equity is recorded as a matching entry at cost;
\u25aaif the fair value of the goods or services received or acquired cannot be reliably determined, this value must be estimated indirectly on the basis of the fair value of the equity instruments granted at the grant date.
In the case of employee benefits, the expense is recognised in personnel expenses over the period in which the employee renders the relevant service.
Recognition of revenue from contracts with customers
Revenue is recognised to the extent that reflects the consideration to which the Group expects to be entitled in exchange of those goods and/or services promised to the customer (transaction price).
The main revenue types of the Poste Italiane Group are described below, together with an indication of the time-frame in which the performance obligations202F203 will be met:
\u2022Revenue from mail, parcels and other: refers to services provided to customers through the retail and business channels; revenue generated through the retail channel is recognised at a point in time given the number of transactions handled through the various sales channels (post offices, call centres and on-line) and measured on
the basis of the rates applied; revenue generated through the business channel is generally earned as a result of annual or multi-annual contracts and is recognised over time using the output method determined on the basis of shipments requested and handled. These contracts include elements of variable consideration (primarily volume discounts and penalties linked to the quality of service provided) estimated using the expected value method and recognised as a reduction from revenue.
\u2022Revenue from financial services refers to:
orevenue from placement and brokerage: these are recognised over time and measured on the basis of the volumes placed, quantified on the basis of commercial agreements with financial institutions. In terms of payment for the collection of postal savings, the agreement entered into with Cassa Depositi e Prestiti envisages payment of a variable consideration on achieving certain levels of inflows, determined annually on the basis of the volume of inflows and expected redemptions; certain commercial agreements, entered into with leading financial partners for the placement of financial products, envisage the return of placement fees in the event of early termination or surrender by the customer;
orevenue from current account and related services: these are recognised over time, measured on the basis of the service rendered (including the related services, e.g. bank transfers, securities deposits, etc.) and quantified on the basis of the contract terms and conditions offered to the customer;
orevenue from commissions on payment of bills by payment slip: this is recognised at a point in time given the number of transactions handled by post offices and quantified on the basis of the terms and conditions in the contract of sale.
\u2022Revenue from payments and mobile refers to:
\u2022card payments, collections and payments relating to PostePay primarily to the cards issued by Postepay and debit cards recognised at a point in time when issued and the services linked to them recognised over time as the service is used by the customer. These services include interchange fees recognised by international circuits on payment transactions with cards recognised over time. The item includes commissions for acquiring services rendered to merchants recognised over time due to the use of the service, F23 and F24 proxy acceptance services recognised over time due to the level of service rendered, and PagoPA collection services recognised at a point in time when the service is provided. Services provided by the LIS Group contribute to this item, which mainly include collection and payment services (including pay slip collection services) provided by LIS Pay and recognised at a point in time upon collection, and revenue from the processing of telephone top-ups and network fees and services paid by points of sale to LIS Holding recognised over time due to the use of the service;
omobile and fixed network telephony services, which include: revenue from \u201cstandard TLC service offers\u201d recognised over time based on the output method according to the traffic offer (voice, SMS and data); the revenue relating to the sale of fixed telephony offers recognised over time based on the output method according to the fee charged to the customer; revenue relating to the activation fees for SIMs and fixed telephony offers, recognised at a point in time at the time of service delivery;
oservices related to the supply of electricity and natural gas, the revenue from which is recognised at the time the electricity or gas is supplied to the end customer (over time). With regard to the sale of electricity, the services offered include, in addition to the commodity component, also the transport, metering and system charges components; with regard to the sale of natural gas, these services include, in addition to the commodity component, also the provision of transport services.
For revenue recognition purposes, the principle provides for the identification and quantification of the variable components of the consideration (discounts, rebates, price concessions, incentives, penalties and other similar) to include them to supplement or adjust the transaction price. Among the variable components of the fee, of particular importance are the penalties (to be paid to the customer in the event of failure to achieve pre-established service levels), which are recognised by the Group as a direct decrease in revenue.
Revenue from activities carried out in favour of or on behalf of the state is recognised on the basis of the amount effectively accrued, with reference to the laws and agreements in force, taking account, in any event, of the provisions contained in legislation regarding the public finances. The return on the current account deposits held by the MEF is determined using the effective interest method and is recognised as revenue from financial services. The same classification is applied to income from Eurozone government bonds, in which deposits paid into accounts by private customers and tax credits Law no. 77/2020 are invested.
The Poste Italiane Group disaggregates revenue from contracts with customers by type of good and/or service provided; revenue is therefore disaggregated in line with the operating segments identified within the company. For quantitative details on the distinction between revenue from contracts with customers recognised at a specific time or over time, see section \"4.3 Notes to the statement of profit or loss\".
Government grants
Receivables for Government grants are recognised once they have been formally allocated to the Group by the public entity concerned and only if, based on the information available at the end of the year, there is reasonable assurance that the project to which the grant relates will be effectively carried out and completed in accordance with the conditions attached to the grant. Grants are recognised in profit or loss under Other operating income as follows: operating grants in proportion to the costs actually incurred for the project and accounted for and approved to the public entity; grants related to property, plant and equipment are recognised in proportion to the depreciation charged on the assets acquired and used to carry out the project.
Finance income and costs
Finance income and costs are recognised on an accruals basis based on the effective interest method, i.e. using an interest rate that discounts all cash flows relating to a given transaction in the same way.
Dividends are recognised as finance income when the right to receive payment is established, which generally corresponds with approval of the distribution by the Shareholders Meeting of the investee company. Otherwise, dividends from subsidiaries are accounted for as \"Other operating income\".
Transactions in currencies other than the euro are translated to euro using the exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at closing exchange rates of monetary assets and liabilities denominated in currencies other than the euro are recognised in profit or loss.
Earnings per share
In the Poste Italiane Group's consolidated financial statements, earnings per share is determined as follows:
Basic: basic earnings per share is calculated by dividing the Group's profit for the year by the weighted average number of Poste Italiane SpA's ordinary shares in issue during the period.
Diluted: at the date of preparation of these financial statements no financial instruments have been issued which have potentially dilutive characteristics203F204.
Related parties
Related parties within the Group refer to Poste Italiane SpA's direct and indirect subsidiaries and associates. Related parties external to the Group include the MEF and its direct and indirect subsidiaries and associates. The Group's key management personnel are also classified as related parties, as are funds providing post-employment benefits to the Group's employees and the related entities. The state and public sector entities other than the MEF are not classified as related parties. Related party transactions do not include those deriving from financial assets and liabilities represented by instruments traded on organised markets.
2.6 USE OF ESTIMATES
The preparation of financial information requires the use of estimates and assumptions that can have a significant effect on the final values indicated in the financial statements and in the disclosure provided. The preparation of these estimates involves the use of available information and the adoption of subjective assessments, also based on historical experience, used for the formulation of reasonable assumptions for the recognition of operating events. Estimates and assumptions are periodically reviewed and the impact of any changes is reflected in the financial statements for the period in which the estimate is revised if the revision only influences the current period, or also in future periods if the revision influences both current and future periods. Due to their nature, the estimates and assumptions used may vary from year to year and, therefore, it cannot be excluded that in subsequent years, the values recorded in these Financial Statements may also vary significantly as a result of changes in the subjective valuations used.
Accounting treatments that require greater subjectivity in the preparation of estimates are described below, also taking into account the unique characteristics of the macroeconomic environment of reference recorded during the year (in line with ESMA requirements204F205).
Revenue from contracts with customers
The main factors in the recognition of revenue from contracts with customers include elements of variable consideration, particularly penalties (other than those related to compensation for damages). Elements of variable consideration are identified at the inception of the contract and estimated as of every close of the accounts for the entire contract term, to take into account new circumstances and changes in the circumstances already considered for the previous estimations. Elements of variable consideration include refund liabilities.
In the business relating to the sale of electricity and gas, revenue includes estimates of both turnover and allocations for supplies made to customers between the date of the last billing period and the end of the reporting year. Both of these estimation components are based on the application of internally developed algorithms that take into account the estimated volumes consumed by customers (given the historical billing information). As required by the relevant regulations, the allocation of revenue is subject to adjustment until the fifth subsequent year.
Provisions for risks and charges
The Group makes provisions for probable liabilities deriving from disputes with staff, suppliers, and third parties and, in general, for liabilities deriving from present obligations. These provisions cover the liabilities that could result from legal
action of varying nature, the impact on profit or loss of seizures incurred and not yet definitively assigned, and amounts expected to be refundable to customers where the final amount payable has yet to be determined.
Determination of the provisions for risks and charges involves the use of estimates based on current knowledge of factors that may change over time, potentially resulting in outcomes that may be significantly different from those taken into account in preparing these financial statements.
In order to reflect in the financial statements the risks arising from potential fraud perpetrated against Poste Italiane and, therefore, to determine the accounting impacts associated with the potential risk on tax credits, as described in greater detail in Note A10 - Tax credits Law no. 77/2020, without prejudice to compliance with Bank of Italy/Consob/Ivass Document no. 9 as to all other aspects related to the accounting recognition of the tax credits in question (see the section \"Tax credits Law no. 77/2020\" of paragraph 2.5 Material information on accounting standards for further details), the decision was taken to refer to the provisions of IAS 37 - Provisions, Contingent Assets and Contingent Liabilities, with regard to the measurement of the risks in question. The applicability of IAS 37, in order to reflect in the financial statements the risk of not being able to offset the tax credits on which fraud was ascertained, was considered because the possible failure to recover the carrying amount of the tax credits would not derive from a characteristic of the asset being measured or from significant increases in the credit risk after the initial recognition of the asset or, more simply, from the ascertained default of the debtor, but rather from the possibility that, for those ascertained to be cases of fraud, the liability of the assignee - even if a third party in good faith or an offended party to the offence - will also be called to account for assumptions other than the possible irregular use of the tax credit or for use to a greater extent than the tax credit received205F206. As a result of the in-depth analyses carried out on the tax credits acquired, also with the support of external legal, tax and accounting consultants, a specific provision was estimated, recorded consistently with the above and for clarity in the liability item \"Provisions for risks and charges\". It should be noted that the determination of the above-mentioned provision necessarily required the application of a significant degree of professional judgement, the main elements of uncertainty of which relate to the outcome of the proceedings under way, the identification of the receivables whose deductions have been assigned are effectively non-existent, and the outcome of the initiatives that will be activated by Poste Italiane to recover the amounts paid to the entities in respect of which cases of fraud have been ascertained.
Impairment and stage allocation for financial instruments
Below are the inputs, assumptions and estimation techniques used to calculate the impairment of financial assets measured at amortised cost and at fair value through other comprehensive income and to determine the stage allocation of financial instruments, the latter not applicable within the Poste Italiane Group for trade receivables in accordance with the Simplified Approach.
General description of the models utilised
The Group uses the general impairment model in accordance with risk ratings estimated on the basis of the type of counterparty:
\u2022Securities/deposits with Sovereign, Banking and Corporate counterparties: internal models for estimating risk parameters;
\u2022Public Administration and Central Counterparties: risk ratings deriving from agency ratings or average default rates for the sector.
The simplified approach is applied to trade receivables, as described in greater detail later.
Significant increase in credit risk
Based on the impairment model adopted by the Poste Italiane Group to meet the requirements of the accounting standard, any significant increase in credit risk associated with the financial instruments held, other than trade receivables, is determined on the basis of a change in the relevant credit rating between the time of the initial investment and the reporting date.
This change in notches is compared with a threshold that takes into account the following factors:
\u2022the rating of the financial instrument at the time of investment;
\u2022the rating of the financial instrument at the reporting date;
\u2022the seniority of the position within the portfolio (vintage factor);
\u2022an additive factor to mitigate the non-linearity of probability of default (\"PD\") with respect to the rating classes206F207;
\u2022a judgemental factor to be used only in the presence of sudden changes in the creditworthiness not yet reflected by the rating207F208.
The ratings used in stage allocation derive from internal models in the case of banking, sovereign and corporate counterparties, and external info providers in the case of Public Administration and Central Counterparties. Based on the above information, the Poste Italiane Group rebuts the presumption that there have been significant increases in credit risk following initial recognition, when financial assets are more than 30 days past due.
The Poste Italiane Group decided not to adopt the Low Credit Risk Exemption and to proceed instead with stage allocation of the financial instruments concerned.
Regarding trade receivables, given the adoption of the simplified approach under the new accounting standard, expected credit losses are determined throughout the lifetime of the instrument.
Definition of default
The Poste Italiane Group defines default on the basis of ad hoc assessments that take into account:
\u2022any payment delays;
\u2022market information such as a default rating by the rating agencies;
\u2022internal analyses of specific exposures.
Collective and individual provisions
The collective impairment of a homogeneous group of financial assets defines the expected credit loss (ECL) of the instrument, even though it cannot be associated with a specific exposure. Grouping takes place in relation to the type of counterparty on the basis of the estimated PD.
Individual provisions are considered only following the review of trade receivables for amounts in excess of a given threshold and only in relation to single receivables.
Forward looking information
According to the standard, the ECL calculation must also factor in forward looking components based on broad consensus scenarios.
The Poste Italiane Group incorporates forward looking information directly in the PD estimation. In particular, for sovereign counterparties, for which authoritative forward-looking estimates208F209 are available, these values are used to calculate PD; for other counterparties, on the other hand, the internal model adopted allows the input dataset needed to calculate PD to be completed from scenario values referring to some of the model variables. The objective of the approach is to estimate the unknown variables by using the historical correlation of the available information209F210.
ESG disclosure
The Sovereign, Bank and Corporate PD estimation models include variables reflecting Social and Governance factors defined from indicators provided by authoritative sources such as the UN and the World Bank. The Environmental factor is negligible for these purposes in view of the 1-year time horizon of the PD itself. In the context of BancoPosta's RFC, this factor is monitored through scenario analyses and verification of ratings provided by external agencies.
Estimation techniques used
Since events of default cannot be used, as they are not very frequent, to develop credit scoring models for Sovereign, Banking and Corporate counterparties, a shadow rating approach has been adopted.
This method entails the use of target variables related to the level of external rating produced by the agencies; the target is identified as the default rate linked to the rating level.
A key rating agency was selected to construct the target, taking into account both the large number of rated counterparties and the availability of historical data over what was deemed to be an adequate period of time.
The models have been constructed by extracting and utilising the following types of data for each country in the sample:
\u2022macroeconomic data;
\u2022market data: domestic equity indices, global energy/non-energy indices, Eurostoxx and S&P 500;
\u2022financial statement data.
The internal model estimate used a definition of default based on a payment delay of 90 days.
ECL measurement
Expected credit losses (ECL) are determined over a time horizon consistent with the stage level (12 months or lifetime) on the basis of the following factors:
\u2022Probability of Default (PD);
\u2022Loss Given Default (LGD);
\u2022Exposure at Default (EAD);
\u2022Time Factor (TF).
The main assumptions/choices adopted in the determination of the factors are as follows:
\u2022PD: as indicated from the start, a Point in Time (PIT) and forward-looking evaluation has been adopted;
\u2022LGD: values have been used consistent with the Internal Ratings-Based (IRB) Base Approach under the Basel guidelines (45% for senior risk assets, 75% for subordinated risk assets);
\u2022EAD: exposure calculated prospectively until maturity of the instrument, starting from the development of projected cash flows. In the development account was taken of specific indexation assumptions for every asset class (fixed-rate securities, variable-rate securities, inflation-indexed securities, etc.);
\u2022TF: the effective interest rate of each exposure was used as discount factor.
The assumptions adopted and set out above have led to an increase in the PD of Italy and other Sovereign counterparties in general compared to that used in the assessments in the Annual Report at 31 December 2022.
Trade receivables
The Group adopts the simplified approach to test for the impairment of trade receivables, on the basis of which provisions for credit losses are determined for an amount equal to expected losses throughout the lifetime of the receivable. Such approach is implemented through the following process:
\u2022based on total revenue or the historical credit exposure, all receivables or credit exposures exceeding a certain pre-established credit threshold are assessed analytically. The analytical evaluation of the exposures entails an analysis of the borrower's credit quality and solvency, as determined on the basis of internal and external supporting evidence;
\u2022for receivables falling below the threshold set, through the preparation of a matrix with the different impairment percentages estimated on the basis of historical losses, where they exist, or alternatively on the historical pattern of collections. In constructing the impairment matrix, receivables are grouped by homogeneous categories, based on their characteristics, to take into account the historical loss experience.
Collateral held and other credit risk mitigation instruments on trade receivables
To mitigate the risks arising from the extension of credit terms to its customers, the Group has implemented a policy and suitable guidelines that govern the management of trade receivables, the terms and conditions of payment applicable to customers and defines the corporate process aimed at checking the customer's creditworthiness, as well as the sustainability of the business risk inherent in the contract involving extended payment terms. Depending on the evaluations, the contracts entered into with customers may require a suitable guarantee. Guarantees are also requested if they are required by rules and regulations and/or implementing rules of specific services.
The Poste Italiane Group accepts mainly guarantees issued by primary banks or insurance companies. Alternatively, upon request of the customer and after a risk analysis, it accepts sureties issued by other institutions or security deposits through the opening of a postal escrow account. The Poste Italiane Group, as a rule, exempts the Public Administration from the provision of guarantees to secure trade receivables arising from transactions with it, save for the cases when such guarantees are mandatory by law or due to implementing rules of specific services.
For all the exposures evaluated individually, to calculate the provisions for doubtful debts, guarantees reduce the amount of the exposure at risk.
At 31 December 2023, the Group does not hold trade receivables secured by collateral or other risk mitigation instruments for which no loss provisions have been made.
Impairment tests of goodwill, cash generating units and equity investments
Goodwill and other non-current assets are tested for impairment in accordance with IAS 36 \u2013 Impairment of Assets. Impairment testing involves the use of estimates based on factors that may change over time, potentially resulting in effects that may be significantly different from prior year estimates.
In accordance with the relevant accounting standard, when it is not possible to estimate the recoverable amount of an individual asset, the Group identifies the smallest group of assets that generates cash inflows that are largely independent of those from other assets or groups of assets (Cash Generating Units - CGUs). The process of identifying such CGUs necessarily involves management's judgement as to the specific nature of the assets and business to which they belong and evidence that the cash inflows from the group of assets are closely interdependent and largely independent of those from other assets (or groups of assets). The number and scope of CGUs are systematically updated to reflect the effects of new aggregation and reorganisation operations carried out by the Group, as well as to take into account those external factors that could affect the ability of assets to generate independent cash inflows.
For the most significant impairment tests performed at 31 December 2023, the carrying amounts tested and the main assumptions underlying the tests performed are shown below:
Amount
(\u20acm)
Method used
Explicit forecast period
Growth rate
Discount rate
Goodwill of the Mail, Parcels and Distribution CGU
213
DCF
2024-2028
2.0%
7.48% (WACC)
Goodwill of the Payments and Mobile CGU
459
DCF
2024-2028
2.0%
9.54% (WACC)
Goodwill of the NET Insurance (Insurance) CGU
124
DDM
2024-2028
2.0%
9.31% (Ke)
Investment in Anima Holding SpA
219
DDM
2024-2026
2.0%
9.65% (Ke)
DCF: Discounted Cash Flow; DDM: Dividend Discount Model; WACC: Weighted Average Cost of Capital; Ke: cost of own capital
It should be noted that the discount rates at 31 December 2023 are up from those used for the previous year's estimates. Specifically, the increases amounted to 129 basis points for the Mail, Parcels and Distribution CGU, 90 basis points for the Payments and Mobile CGU, and 131 basis points for the investment in Anima Holding.
With reference to the external quantitative indicators of impairment at Group level, it should be noted that, at 31 December 2023, market capitalisation was higher than book equity, whereas with regard to internal source elements, it should be noted that consolidated results at December 2023 were above budget forecasts for the same period.
Mail, Parcels and Distribution CGU
The impairment test of the Mail, Parcels and Distribution CGU was performed, consistent with the previous year, at the consolidated level, including the companies within the same operating segment; the activities performed by the different companies and the resulting cash flows are highly interdependent, as commercial and strategic management decisions are made centrally at the level of the entire segment.
The value in use of the CGU was estimated on the basis of the 2024-2028 strategic plan approved by Poste Italiane SpA's Board of Directors on 19 March 2024. The economic forecasts used in the execution of the test also include, among the various characterising elements, forecasts for the planned investments that will be focused on achieving the CGU's automation and modernisation objectives, in continuity with what was achieved in 2023. Special importance is attached to investments classified as ESG, i.e. that comply with the reference principles of the Group's 8 Sustainability Pillars. Among the CGU's main investment projects are the Polis Project \"Homes of Digital Citizenship Services\", energy efficiency measures for real estate, and the automation and evolution of the sorting and delivery network from a green perspective.
In determining the terminal value, calculated on the basis of the last year of explicit forecasts, income was normalised. Reference was also made to the transfer prices that BancoPosta RFC is expected to pay for the services provided by Poste Italiane's distribution network.
The impairment test determined that the related carrying amounts are fair.
The impairment test is based on estimates and assumptions that present elements of uncertainty, also due to the current context characterised by significant volatility of the main market factors and significant uncertainty with regard to economic expectations, as well as the continuation of negative economic results and the decline of the postal market in which the Group operates; for this reason, sensitivity analyses were carried out. In particular, the impairment test showed the recoverability of the goodwill allocated to the CGU even by increasing the indicated discount rate by 100 basis points and jointly reducing the long-term growth factor by 20 basis points.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net invested capital of the CGU with a discount rate of 9.11%.
As in the past, in determining the value of properties used as post offices and sorting centres, Poste Italiane SpA's universal service obligation was taken into account, as was the inseparability of the cash flows generated from the properties that
provide this service, (which the Parent Company is required to operate throughout the country regardless of the expected profitability of each location); the unique nature of the operating processes involved and the substantial overlap between postal and financial activities within the same outlets, represented by post offices, were also considered. On this basis, the value in use of the Land and Buildings used in operations is relatively unaffected by changes in the commercial value of the properties concerned and, in certain critical market conditions, certain properties may have values that are significantly higher than their mere market value, without this having any impact on the cash flows or profitability of the Mail, Parcels and Distribution segment.
The fair value of the Parent Company's properties used in operations continued to be higher than their carrying amount, as confirmed by the property valuations carried out.
Payments and Mobile CGU
In performing the impairment test on the goodwill arising from the acquisition of the LIS Group, which took place in 2022, reference was made to the CGU comprising all the companies belonging to the Payments and Mobile segment as the only cash flow generator.
Following the completion of the LIS integration and reorganisation processes, in fact, the Payments and Mobile operating segment is based on single and integrated market and operational processes according to a unified approach. Consequently, the cash flows are largely independent of those generated by the other operating segments of the Poste Group, but closely interrelated within the segment. Therefore, LIS is no longer identifiable as a separate CGU (as determined for 31 December 2022).
In order to estimate the value in use of the CGU, reference was made to the 2024-2028 Strategic Plan approved by the Poste Italiane SpA's Board of Directors on 19 March 2024, as well as by the Boards of Directors of the respective companies belonging to the CGU for the portion pertaining to them. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses show the passing of the test by a wide margin even in scenarios significantly worse than the one used for the impairment test.
It should be noted that even if the impairment test were performed consistently with 31 December 2022 (CGU comprised of LIS Holding and LIS Pay), there would be no need to make impairment losses to the goodwill recognised in the financial statements.
Net Insurance (Insurance) CGU
Following the purchase of Net Insurance by Poste Vita through the corporate vehicle Net Holding in 2023 and the associated Purchase Price Allocation process, details of which are provided in Note 2.8 - Basis of consolidation, goodwill of \u20ac124 million emerged, equal to the remaining difference between the consideration transferred for the acquisition of Net Insurance by Net Holding and the fair value of the adjusted net assets acquired.
In performing the impairment test relating to the Net Insurance Group, reference was made to the CGU consisting of Net Insurance and Net Insurance Life as the cash generating unit.
To estimate the value in use of the CGU, reference was made to the 2024 -2028 Strategic Plan. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net assets of the CGU with a discount rate of 12.6%.
Investment in Anima Holding SpA
With reference to the impairment test on the investment in Anima Holding SpA, the future cash flows used in determining the value in use are those observable as consensus for the main balance sheet indicators (Revenue, Profit (loss) before tax and Net Profit) estimated by analysts for the next three years and available periodically on the company's website. At 31 December 2023, there was no need for impairment adjustments.
Other equity investments in associates
With reference to the impairment tests of the equity investments in the other associates Sennder, Financit, Replica Sim and Eurizon Capital Real Asset, no impairment adjustments were found to be necessary at 31 December 2023.
Depreciation and amortisation of property, plant and equipment and intangible assets
The cost of fixed assets is depreciated or amortised on a straight-line basis over the estimated useful life of the asset. The useful life is determined at the time of acquisition and is based on historical experience of similar investments, market conditions and expectations regarding future events that may have an impact, such as technological developments. The actual useful life may, therefore, differ from the estimated useful life.
The useful life of the Group's main asset classes is detailed below:
Property, plant and equipment
Years
% annual depreciation
Buildings
40-59
3%-2%
Structural improvements to own properties
18-31
6%-3%
Plant
8-23
13%-4%
Light constructions
10
10%
Equipment
3-10
33%-10%
Furniture and fittings
3-8
33%-13%
Electrical and electronic office equipment
3-10
33%-10%
Motor vehicles, automobiles, motorcycles
4-10
25%-10%
Leasehold improvements
estimated lease term*
-
Other assets
3-5
33%-20%
(*) Or the useful life of the improvement if shorter than the estimated lease term
Investment property
Years
% annual depreciation
Property
39-42
3%-2%
Structural improvements to own properties
17-18
6%
In the case of assets to be handed over, located on land held under concession or sub-concession, on expiry of the concession term, or whilst awaiting confirmation of renewal, any additional depreciation of assets takes into account the probable residual duration of the right to use the assets to provide public services, to be estimated on the basis of the framework agreements entered into with the Public Administration entity, the status of negotiations with the grantors and past experience.
Lastly, with regard to intangible assets, amortisation begins when the asset is available for use and extends systematically on a straight-line basis over its estimated useful life determined in a range of between 2 and 5 years.
Insurance liabilities
The main models, inputs and assumptions used to estimate insurance liabilities, i.e. future cash inflows and outflows related to insurance contracts, are summarised below.
Input data, assumptions and estimation techniques used
For contracts measured with the VFA model, the estimate of future flows related to the Liability for remaining coverage is made considering the following inputs:
\u2022Non-financial assumptions, such as mortality, lapses, conversions, expenses, etc. Expense assumptions, consistent with the principle, are parametrised taking into account only attributable costs;
\u2022Financial assumptions, such as returns on assets backing insurance liabilities, asset allocation, etc.;
\u2022Stochastic economic scenarios210F211 differentiated by separately managed account and by type of business.
The estimate of cash flows takes into account all the commitments of the companies in respect of the contracts under assessment through the elaboration of magnitudes such as gross premiums, other inflows other than premiums consistent with the quantification of the benefits under analysis, commissions, expenses, performance settlements, any residual Mathematical Provision at the end of the projection, and other outflows other than the above consistent with the quantification of the benefits under analysis.
For contracts measured with the BBA, the future fulfilment flows represent estimates of the future cash flows that will be generated by the natural fulfilment of the contracts by the companies and therefore include all possible cash flows that fall within the contract boundary.
Projected cash flows include claims paid, reimbursements for early termination of contracts, acquisition commissions, other directly attributable administrative expenses, other directly attributable acquisition expenses, premiums written and recoveries.
It should also be noted that, for onerous contracts measured through the PAA, future fulfilment flows are calculated using the same approach as for contracts measured through the BBA.
Liabilities for incurred claims include future fulfilment cash flows related to past services attributed to the contract group at the measurement date. These flows are defined as the sum of the following components:
\u2022Cash flows of undiscounted Best Estimate Liabilities (UBEL211F212), which are the best estimate of cash outflows for both reported claims and late claims;
\u2022Discount effect, calculated by discounting the cash flows referred to in the previous point using the defined discount curve;
\u2022Adjustment for non-financial risks, estimated using the methodology defined by the Group.
The process of allocating costs between \"attributable\" and \"non-attributable\" is done punctually according to the cost centres that incur them. The development and related deferral of costs follow the associated cash flow projections and the same recognition metrics adopted for the CSM release.
No changes have been made to the insurance liability valuation process since the transition date with the exception of the financial and technical assumptions, which are updated as necessary at each valuation date. Furthermore, the contracts in the portfolio do not provide for any discretionary elements on the part of the Company that could affect the expected flows.
Investment component
Assessments of the expected investment component to be included in the estimate of fulfilment future cash flows are made separately by product type. An estimate of the flow related to the Investment component is provided for both valuations at initial recognition of contract groups and for valuations at each reporting date.
For contracts with discretionary participation features and annuities in the accumulation phase, the expected investment component is equal to the lapse value net of penalties, whereby the estimate in future fulfilment flows is obtained as the difference between the estimated payout amount and the countervalue calculated on the basis of the lapse value net of penalties. For annuities that are certain to be paid out, the value of the investment component is not an estimate since it corresponds to the value of the benefits to be paid out, while for annuities that are certain to be paid out and pure risk products, there is no Investment component.
Method for determining the discount rate used
Below are details, by individual portfolio, of the discount curves used by the Poste Italiane Group in determining its insurance liabilities and the adjustments made to the reference Basic Risk Free Curve to take into account the counterparty's level of liquidity (Illiquidity Premiums):
\u2022in relation to the Separately managed account participating business and the Unit Linked portfolio connected to Separately managed accounts (Multi-class products), the Illiquidity Premium is calibrated on the basis of the composition of the reference portfolio (e.g. Separately managed accounts or Company) using approaches and metrics borrowed from the Solvency II approach;
\u2022in relation to the non-participating Life Business and for the Unit Linked portfolio not connected to Separately managed accounts, use was made of the values of Illiquidity Premiums consistent with the Volatility Adjustment value provided by EIOPA, in line with Solvency II. This approach is replicated in Net Insurance Life's pure risk business;
\u2022in relation to the P&C business relating to the companies Poste Assicura and Net Insurance, the Basic Risk Free curve is adopted, assuming an Illiquidity Premium consistent with the Volatility Adjustment value provided by EIOPA.
In operational terms, the Poste Italiane Group defined the curves at the date of initial recognition of the contract, in particular:
\u2022for the Life business related to contracts issued by Poste Vita, the initial recognition curve of contracts is set equal to the Based Risk Free curve with illiquidity premium related to the previous quarter;
\u2022for the P&C business relating to Poste Assicura contracts, the curve at initial recognition of contracts is the Based Risk Free of the previous year (31/12/t-1);
\u2022for the P&C business, relating to contracts issued by Net Insurance, and for the Life business, relating to contracts issued by Net Insurance Life, the curve at initial recognition of contracts is the Based Risk Free with Volatility Adjustment relative to the previous year (31/12/t-1)212F213.
For the BBA method, in order to calculate the interest accrued on the CSM at the reporting date, the Poste Italiane Group uses the forward curve determined with respect to the spot locked-in curve at the valuation date.
For the PAA model, the Poste Italiane Group has not made an adjustment for the effect of the time value of money and financial risk.
Method for determining the Adjustment for non-financial risk
The Poste Italiane Group adopts the percentile approach. The amount of the adjustment for non-financial risk is determined by considering the scope of technical risks to which group companies are exposed, using assessments borrowed from the Solvency II framework. In particular, the Adjustment for non-financial risk for contract groups belonging to the life business is estimated by taking into account the typical life business risk and underwriting risk exposures net of the loss-absorbing capacity of technical provisions (guaranteed minimum of products, where applicable) and gross of reinsurance. Operational risk and counterparty default risk are also excluded from the analyses.
For insurance contracts belonging to the P&C business, exposures to pricing risk, reserving risk, catastrophe risk, and the risk of early exits typical of the type of business are considered. In the P&C business, the Adjustment for non-financial risk is also determined, unlike in the Life business, for the Liability for incurred claims and Assets from outward reinsurance.
In calculating the amount of the Adjustment for non-financial risk, the separation between the insurance services component and the financing component is not applied for Poste Italiane Group companies.
Methods for determining the CSM coverage unit
The release to the Statement of profit or loss of the CSM over the life of the contracts is done through the definition of the Coverage Unit (CU). With reference to the Life business, the Poste Italiane Group determines the CSM release by adopting a Coverage Unit on the basis of a Volume-based driver, defined separately for each measurement model adopted:
\u2022BBA model: the CU is defined with a driver based on the sums insured, which are similar to the lump-sum death benefit for pure risk contracts, and on the mathematical provisions, for annuities (in the payout phase) not under the Separately managed accounts from Long-Term Care products;
\u2022VFA model: the CU for DPF contracts is defined using a driver based on mathematical provisions.
In the context of the CSM release pattern of the P&C business, for contracts valued with the BBA Model, the Group has decided to use for the business characterised by constant insured capital a release driver based on earned premiums gross of commissions (also considering the effect of any premium refunds and related commission reversals); with the exception of the P&C business characterised by decreasing insured capital (Salary-backed of Net Insurance), the use of a method based on insured sums was defined as for the Life business.
The CSM release percentage is defined by relating the volume-based drivers as defined above to the amount of volumes of these drivers projected over a time period that coincides with the duration of the group of insurance contracts.
For products measured with the VFA method, the Group considers an additional component (additional release) in the CSM release for the period aimed at capturing the differences between the margin result obtained with real-world financial assumptions (Real World curves), compared to that obtained with risk-neutral financial assumptions (Risk Neutral curves). This additional release is obtained from the difference between the period-end prospective CSM before release under the Real World assumption and the period-end prospective CSM before release under the Risk Neutral assumption.
As a result of the additional release, it is possible to achieve a CSM release that is more consistent with the financial performance of the underlying items of the insurance contracts and to obviate the systematic deferral of profit recognition in future years through coverage units.
Deferred tax assets
The recognition of deferred tax assets is based on the expectation of taxable income in future years. Assessments of expected taxable income depend on factors which may change over time, impacting on the valuation of the deferred tax assets in the statement of financial position.
Share-based payments
As further described in Note 13 - Additional information - Share-based payment arrangements, the valuation of the share-based payment arrangements in place within the Poste Italiane Group at the close of these financial statements was based mainly on the conclusions reached by actuaries external to the Group. The plan terms and conditions link the award of the related options to the occurrence of certain events, such as the achievement of performance targets and performance hurdles and, in certain areas of operation, compliance with certain capital adequacy and liquidity requirements. For these reasons, measurement of the liability, equity reserve and the corresponding economic effects involves the use of estimates based on current knowledge of factors that may change over time, potentially resulting in outcomes that may be significantly different from those taken into account in preparing these financial statements.
Employee termination benefits
The measurement of Employee termination benefits is also based on calculations performed by independent actuaries. The calculation takes account of termination benefits accrued for the period of service to date and is based on various demographic and economic-financial assumptions.
The main actuarial assumptions applied in the calculation of employee termination benefits at 31 December 2023, also based on the experience of each Group company and the reference best practice, are as follows:
Economic and financial assumptions
\u00a0
\u00a0
31.12.2023
\u00a0
Discount rate
3.08%
\u00a0
Inflation rate
2.00%
\u00a0
Annual rate of increase of employee termination benefits
3.00%
\u00a0
Demographic assumptions
\u00a0
\u00a0
31.12.2023
\u00a0
Mortality
ISTAT 2018
\u00a0
Disability
INPS tables broken down by age and gender
\u00a0
Retirement age
Achievement of general mandatory insurance requirements
\u00a0
Frequency of employee termination benefits advances
Specific table with rates differentiated by Company
\u00a0
Employee turnover frequency
Specific table with rates differentiated by Company
\u00a0
Determination of the lease liability
To determine the financial lease liability, the Group has opted to use an incremental borrowing rate (IBR) determined in line with a hypothetical loan obtained in the current economic environment, and applied to contract group with similar
remaining terms and to similar companies. In particular, each IBR takes account of the risk-free rate identified on the basis of factors such as the economic environment, currency, contract term and credit spread reflecting the companies' organisation and financial structure. The IBR associated with the commencement of the contract will be reviewed whenever there is a lease modification, meaning substantial and significant changes to the contract conditions over the life of the agreement (e.g. the lease term or the amount of future lease payments). The IBR table defined for contract group with similar residual duration and for similar reference companies is periodically monitored and updated at least once during the year.
With regard instead to determination of the lease term at the commencement date or of the remaining term at a later date (in the event of substantial and significant changes to contract conditions) and, in particular, for property leases, the Group uses a valuation approach based primarily on the expected duration of the obligation as per the agreement between the parties and/or in the legal framework of reference (Law 392 of 27 July 1978), and it expects an extension of the lease due to an interpretation/forecast of events, circumstances and future intentions, including of a strategic nature, of both the lessor and the lessee. This has resulted in a set of rules for determining the lease term, to be applied to leased properties classified previously in three distinct clusters: properties where the lease is subject to legal restrictions and high commercial-value properties; properties for civilian use, such as the company accommodation for Group employees and executives; and other properties used in operations.
The lease term for all of the other agreements was set as equal to the duration of the obligation agreed upon between the parties, in keeping with future intent in wanting and being able to complete the term and past experience.
Options on minority interests213F214
In the context of particular corporate transactions, there are call and put options that will allow Poste Italiane to purchase, at certain future dates, shares held by minority shareholders. The exercise price of these options is generally determined on the basis of a formula that provides for the application of a multiplier to certain economic/equity targets of the company acquired. For said cases in the consolidated financial statements, a financial liability has been recognised (in addition to the portion of equity attributable to non-controlling interests), to take account of the possible exercise of options, as matching entry to Group's equity, the value of which depends on estimates made internally and which could change even significantly in the current and future years. Subsequent changes in the value of the financial liability will be reflected in the Group's statement of profit or loss.
For details of the corporate transactions from which the need to recognise this financial liability arose, see Note B8 - Financial Liabilities.
2.7 CLIMATE CHANGE AND MACROECONOMIC ENVIRONMENT
Climate Change Information
Climate change and the transition to a low-carbon economy are becoming increasingly relevant to businesses, banks, governments, regulators, and investors.
Although the Poste Italiane Group attaches particular importance to environmental protection, aware of the need to use resources responsibly in order to minimise negative environmental impacts214F215, taking into account the business in which the Group operates, issues related to climate change are considered, with the meaning provided by the reference accounting standards, irrelevant for consolidated financial reporting.
With particular regard to the disclosures required by ESMA in Public Statement 32-193237008-1793 of 25 October 2023, the following table shows a mapping of climate-related disclosures with a corresponding reference to the paragraphs of Poste Italiane's consolidated financial statements and separate financial statements in which the issue is addressed.
Topic
Note
Description
Climate Change Estimates and judgements
Note 2.6 Use of estimates \"Impairment tests of goodwill, cash generating units and equity investments\" and \"Impairment and stage allocation for financial instruments\"
\u2022Focus on the estimation of expected cash flows in relation to the CGUs subject to impairment.
\u2022Details of ESG factors considered in estimating the Probability of Default (PD).
Sustainable investments
Note A1 \"Property, plant and equipment\"
Note A4 \"Right-of-use assets\"
\u2022Investments made in the reporting year aimed at reducing the environmental impact of the Group/Company.
\u2022Increase in Right-of-Use Assets related to the conclusion of leasing contracts for \"green\" vehicles.
Sustainable finance
Note A6 - \"Financial assets\"
Note 13 \"Additional Information - Assets Under Management\"
\u2022Percentage of ESG products in the entire investment and insurance portfolio of BancoPosta Fondi SpA SGR and Poste Vita Group.
Environmental certificates
Note 2.5 \"Material information on accounting standards - Environmental Certificates\"
Note A7 \"Inventories\"
\u2022Description of the accounting treatment applied to environmental certificates
\u2022Details of closing inventories referring to emission allowances and guarantees of origin and carbon credits present at year-end.
Share-based payments
Note 13 \"Additional Information - Share-based payment arrangements\"
\u2022Description of incentive plans some of which are anchored to the achievement of ESG objectives.
Climate risk
Note 6 \"Risk management\"
\u2022Description of the Group's exposure to climate change risks and actions taken to mitigate those risks.
Macroeconomic environment
The estimates used in the preparation of the Financial Statements adequately take into account the particular macroeconomic context of reference, at 31 December 2023 heavily impacted by a number of factors such as: inflation, rising interest rates, deterioration of the economic climate, geopolitical risks and uncertainties on future developments, considering the ongoing conflicts not just in Ukraine but in the Middle East too. These uncertainties are reflected in the indicators used as the basis for the estimates.
For information on how these uncertainties have been reflected in the estimated PDs used to calculate expected losses, please refer to \"Note 2.6 - Use of estimates -Impairment and stage allocation for financial instruments\"; while for a full discussion of risks related to the economic environment, please refer to the specific sections of the Report on Operations.
2.8 BASIS OF CONSOLIDATION
The Poste Italiane Group's consolidated financial statements include the financial statements of Poste Italiane SpA and of the companies over which the Parent Company directly or indirectly exercises control, as defined by IFRS 10, from the date on which control is obtained until the date on which control is no longer held by the Group. The Group controls an entity when it simultaneously:
\u2022has power over the investee;
\u2022is exposed, or has rights to, variable returns from its involvement with the investee;
\u2022has the ability to influence those returns through its power over the investee.
Control is exercised both via direct or indirect ownership of voting shares, and via the exercise of dominant influence, defined as the power to govern the financial and operating policies of the entity, including indirectly based on legal agreements, obtaining the related benefits, regardless of the nature of the equity interest. In determining control, potential voting rights exercisable at the end of the reporting period are taken into account.
The consolidated financial statements have been specifically prepared at 31 December 2023, after appropriate adjustment, where necessary, to align accounting policies with those of the Parent Company.
Subsidiaries that, in terms of their size or operations, are, either individually or taken together, irrelevant to a true and fair view of the Group's results of operations and financial position are not included within the scope of consolidation.
The criteria used for line-by-line consolidation are as follows:
\u2022the assets, liabilities, costs and revenue of consolidated entities are accounted for on a line-by-line basis, separating where applicable the equity and profit/(loss) amounts attributable to non-controlling interests in consolidated equity and consolidated profit or loss;
\u2022business combinations, in which control over an entity is acquired, are accounted for using the acquisition method. The cost of a business combination is represented by the current value (fair value) at the date of acquisition of the assets sold, the liabilities assumed, the equity instruments issued and any other directly attributable accessory charges; the difference between the acquisition price and the current value of the assets and liabilities acquired, after verifying the correct measurement of the current values of the assets and liabilities acquired and the acquisition cost, if positive, is recorded under Intangible Assets under \"Goodwill\", or, if negative, is charged to profit or loss;
\u2022acquisitions of non-controlling interests in entities already controlled by the Group are not accounted for as acquisitions, but as equity transactions; in the absence of a relevant accounting standard, the Group recognises any difference between the cost of acquisition and the related share of net assets of the subsidiary in equity;
\u2022any significant gains and losses (and the related tax effects) on transactions between companies consolidated on a line-by-line basis, to the extent not yet realised with respect to third parties, are eliminated, as are intercompany payables and receivables, costs and revenue, and finance costs and income;
\u2022gains and losses deriving from the disposal of investments in consolidated companies are recognised in profit or loss based on the difference between the sale price and the corresponding share of consolidated equity disposed of.
Investments in subsidiaries that are not significant and are not consolidated, and those in companies over which the Group exerts significant influence (assumed when the Group holds an interest of between 20% and 50%), hereinafter \"associates\", and joint ventures are accounted for using the equity method. At the time of acquisition, the investment is accounted for using the equity method. Any difference between the cost of acquisition of the investment and the net fair value of the investee's identifiable assets and liabilities is accounted for as follows:
a)goodwill related to an associate or a joint venture is included in the carrying amount of the investment. Amortisation of such goodwill is not permitted;
b)in determining the initial value of the entity's investment, any excess of the entity's interest in the net fair value of investee's identifiable assets and liabilities over cost is recognised as income in determining the acquirer's interest in the profit (loss) for the period of the associate or joint venture in the period in which the interest is acquired.
After acquisition, appropriate adjustments are made to the entity's share of the profits or losses of the associate or joint venture to account, for example, for additional depreciation or amortisation of the investee's depreciable or amortisable assets, based on the excess of their fair values over their carrying amounts at the time the investment was acquired, and of any impairment losses on goodwill or property, plant and equipment. The equity method is as follows:
\u2022the Group's share of an entity's post-acquisition profits or losses is recognised in profit or loss from the date on which significant influence or control is obtained until the date on which significant influence or control is no longer exerted by the Group; provisions are made to cover a company's losses that exceed the carrying amount of the investment, to the extent that the Group has legal or constructive obligations to cover such losses; changes in the equity of companies accounted for using the equity method not related to the profit/(loss) for the year are recognised directly in equity;
\u2022unrealised gains and losses on transactions between the Parent Company/subsidiaries and the company accounted for using the equity method are eliminated to the extent of the Group's interest in the associate; unrealised losses, unless relating to impairment, are eliminated.
MAIN CHANGES TO THE SCOPE OF CONSOLIDATION
During the year, the Parent Company concluded the following business combinations by virtue of which it acquired control of the entities.
Net Insurance
On 28 September 2022, Poste Vita's Board of Directors approved the promotion of a voluntary total cash takeover bid for ordinary shares and warrants of Net Insurance S.p.A. (\"Net Insurance\"), in consultation with certain shareholders.
On 20 April 2023, the squeeze-out procedure was finalised, as a result of which Net Holding (the corporate vehicle directly controlled by Poste Vita) holds a controlling interest of 97.8% in Net Insurance (which in turn holds 100% of Net Insurance Life S.p.A.), and the current CEO of Net Insurance, who acted in concert with the takeover bid, holds a minority interest of around 2.2%. The total outlay paid by Net Holding for the acquisition of the stake amounted to approximately \u20ac180.8 million. On 21 April 2023, IBL Banca S.p.A., pursuant to its commitment in the event of a successful bid, acquired a 40% stake in Net Holding for a consideration of \u20ac73.1 million. The net outlay for the Poste Group for the acquisition of the stake amounted to \u20ac108.5 million. Below are the total carrying amounts of the assets acquired and liabilities assumed at the date of acquisition of Net Insurance and its subsidiary.
(\u20acm)
Carrying amount (A)
Fair Value Adjustments (B)
Fair Value (A+B)
\u00a0
\u00a0
Net assets acquired
\u00a0
\u00a0
\u00a0
\u00a0
Intangible assets
8.7
10.8
19.5
Property, plant and equipment
14.9
1.4
16.3
Right-of-use asset
0.4
-
0.4
Trade receivables and other assets
53.7
-
53.7
Financial assets
231.3
-
231.3
Cash and cash equivalents
13.1
-
13.1
Insurance assets
157.8
-
157.8
Insurance liabilities
(386.4)
3.4
(383.0)
Employee termination benefits
(0.4)
-
(0.4)
Trade payables and other liabilities
(35.5)
(4.8)
(40.3)
Financial liabilities
(10.2)
-
(10.2)
\u00a0
\u00a0
\u00a0
Total net assets acquired
47.5
10.8
58.2
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to non-controlling interests
\u00a0
\u00a0
1.3
\u00a0
\u00a0
\u00a0
Net assets acquired by the Group
\u00a0
\u00a0
57.0
\u00a0
\u00a0
\u00a0
Goodwill
\u00a0
\u00a0
123.8
\u00a0
\u00a0
\u00a0
Total fee
\u00a0
\u00a0
180.8
Poste Italiane engaged an independent expert to support the Purchase Price Allocation (\"PPA\") process, aimed at (i) allocating the Price Consideration to the fair value of the net assets of the acquired entity (regardless of whether or not they are already recognised in the financial statements) and (ii) deriving the goodwill value as the difference between the purchase price and the fair value of the net assets acquired (expressed net of deferred tax liabilities).
Based on the valuation activities performed to date, an adjustment to the fair value of the net assets acquired totalling \u20ac10.8 million was recognised, of which:
\u2022\u20ac10.8 million increase in intangible assets related to brand enhancement;
\u2022an increase in property, plant and equipment of \u20ac1.4 million relating to owned property;
\u2022reduction of insurance liabilities by \u20ac3.4 million for cash flows related to amounts repayable by the distributing banks;
\u2022deferred taxation effects related to the above adjustments of \u20ac4.8 million.
For the other intangible assets already recognised in the opening financial statements of the acquired companies, as well as for all other assets and liabilities included in the opening statements of financial position of Net Insurance, the net carrying amount already represents a proxy for fair value.
The remaining difference between the consideration transferred (\u20ac180.8 million) and the fair value of the net assets acquired by the Group, adjusted following the PPA process, (\u20ac57.0 million) was allocated to Goodwill in the amount of \u20ac123.8 million.
The results described above must be considered, at 31 December 2023, still provisional as Poste Italiane has made use of the option provided for in paragraphs 45 et seq. of IFRS 3 to complete the valuation of the business combination within twelve months of the acquisition date.Below are the total economic values of the acquired company included in the consolidated statement of profit or loss from the date of first-time consolidation
(\u20acm)
\u00a0
From 1 April to 31 December 2023
\u00a0
Revenue
23.7
Operating income
19.2
Profit/(loss) for the period
\u00a0
13.3
Sennder
On 3 April 2023, as a result of the capital increase reserved for the shareholder sennder Technologies GmbH (\"sennder Tech\"), the Poste Italiane stake in the subsidiary went from 65% to 60%. Moreover, on 30 May 2023, Poste Italiane's Board of Directors approved the renegotiation of the current partnership with sennder Technologies GmbH. As part of the renegotiation, Poste Italiane contributed 35% of its shares in sennder Italia to sennder Tech, increasing its stake in the latter from 1.7% to 10.2% on a fully diluted basis. It should be noted that following the completion of the transaction in June 2023, Poste Italiane holds a 25% stake in sennder Italia, which, therefore, has lost its status as a subsidiary and assumed that of an associate with the consequent recognition of the investment under the equity method pursuant to IAS 28. In accordance with IFRS 10, at the time of the loss of control, the retained stake in sennder Italia was measured at fair value. The transaction resulted in the recognition of a total capital gain of about \u20ac109 million classified in revenue due to the sale of the controlling stake in the investment, with a positive impact on the Poste Group's EBIT.
By virtue of the option provided for in paragraphs 45 et seq. of IFRS 3 to complete the valuation of the business combination within twelve months from the date of the transaction, the difference between the fair value of the residual equity investment in sennder Italia and the portion of its net assets, amounting to approximately \u20ac19 million, was provisionally allocated to goodwill and is included in the carrying amount of the equity investment.
Sourcesense Platforms S.r.l
On 24 January 2023, Sourcesense finalised the acquisition of Eco Mind Ingegneria Informatica S.r.l. and its subsidiary HeadApp S.r.l. for a consideration, including the price adjustment under the contractual agreements, of approximately \u20ac1 million. The two acquired companies were merged into the NewCo called Sourcesense Platforms S.r.l. with accounting and tax effects from 1 July 2023.
The difference that emerged between the transaction price and the portion of the net assets acquired, amounting to approximately \u20ac1 million, was recognised as Goodwill under Intangible Assets pending completion of the valuation process of the individual components of the acquired assets.
Cronos
On 3 August 2023, as part of a system-wide transaction to take over the policy portfolio of Eurovita S.p.A. (\"Eurovita\") following the latter's crisis, Poste Vita contributed to the establishment of the corporate vehicle Cronos Vita S.p.A. (\"Cronos\"), invested in by, in addition to Poste Vita itself, Allianz, Generali Italia, Intesa Sanpaolo Vita and UnipolSai Assicurazioni, with the purpose of acquiring a business unit consisting essentially of the assets and liabilities relating to the Eurovita insurance business, following the latter's admission to compulsory liquidation proceedings.
In September 2023, the insurance companies involved, Cronos, the banks distributing Eurovita products and certain system banks signed the final agreements within their respective competences to regulate their rights and obligations in relation to the transaction. As part of the aforementioned transaction, on 18 September 2023, Poste Vita participated in the first capital increase of Cronos, with a stake of approximately \u20ac1.7 million.
On 17 October 2023, IVASS authorised Cronos to carry out insurance business (resulting in a change of company name from \"Cronos Vita S.p.A\" to \"Cronos Vita Assicurazioni S.p.A.\"). On 27 October 2023, Poste Vita participated, together with the other shareholders of Cronos, in proportion to its 22.5% stake, in the second capital increase of this company of approximately \u20ac212.5 million, of which approximately \u20ac47.8 million was attributable to Poste Vita. To complete the transaction, on 30 October 2023 IVASS authorised the sale of the business unit from Eurovita to Cronos, effective from 27 October 2023.
The stake in Cronos was classified as an asset held for sale (IFRS 5) in consideration of the intention to hold the stake for a limited period of time and the agreements made at the conclusion of the transaction regarding the stipulation of a firm purchase commitment within 12 months for the transfer of the business assets between the insurance companies involved in the transaction and Cronos Vita.
It was also verified that the fair value of the investment, net of selling costs, was not lower than its carrying amount.
\u00a0CONCLUSION OF THE ASSESSMENT OF BUSINESS COMBINATIONS OF THE PREVIOUS YEAR
With reference to the acquisitions occurred in the course of 2022 for which Poste Italiane availed itself of the option set forth in paragraphs 45 et seq. of IFRS 3 to complete the valuation of the business combination within twelve months from the date of acquisition, at 31 December 2023 the process was concluded, confirming the results already represented at 31 December 2022. A summary of them is provided below.
LIS
Based on the valuation activities performed, an adjustment to the fair value of the net assets acquired totalling \u20ac136.9 million was recognised, of which:
\u2022intangible assets in the amount of \u20ac192.4 million relating to existing contractual relationships with points of sale;
\u2022deferred tax effects related to the higher value of intangible assets in the amount of \u20ac55.4 million.
The remaining difference between the consideration transferred (\u20ac700 million) and the fair value of the adjusted net assets acquired, (\u20ac241 million) was allocated to Goodwill in the amount of \u20ac458.9 million.
Plurima
Based on the valuation activities performed to date, an adjustment to the fair value of the net assets acquired totalling \u20ac22 million was recognised, of which:
\u2022\u20ac30.5 million related to customer contracts and customer-related intangible assets
\u2022\u20ac8.5 million related to deferred taxation effects connected to the higher value of identified assets
The remaining difference between the consideration transferred (\u20ac135.2 million) and the fair value of the portion of the adjusted net assets acquired (\u20ac34.5 million) was allocated to Goodwill in the amount of \u20ac100.7 million.
Sourcesense
The difference between the consideration transferred (\u20ac30.2 million) and the fair value of the portion of the net assets acquired, (\u20ac6.2 million) was allocated to Goodwill in the amount of \u20ac23.9 million.
Agile
The difference between the consideration transferred (\u20ac18 million) and the fair value of the portion of the net assets acquired (\u20ac4 million) was allocated to Goodwill in the amount of \u20ac14 million.
CONVERSION OF THE FINANCIAL STATEMENTS INTO FOREIGN CURRENCIES
For the purposes of preparing the Consolidated Financial Statements, the statement of financial position and statement of profit or loss of all consolidated companies are expressed in euro, which is the functional currency used by the Parent Company.
The financial statements of companies that operate in a functional currency other than the euro are translated into the presentation currency using the closing rate at the reporting date for assets and liabilities, including goodwill and consolidation adjustments, and the average exchange rate for the year (if this reasonably approximates the exchange rate at the date of the respective transactions) for revenue and costs. All the resulting exchange rate differences are recognised in other comprehensive income and shown separately in a specific equity reserve; this reserve is reversed proportionally to the statement of profit or loss at the time of the (total or partial) disposal of the relevant investment.
The exchange rates used to convert the financial statements of consolidated companies in foreign currencies are those published by the Bank of Italy and the European Central Bank and presented in the table below:
\u00a0
\u00a0
2023
2022
Currency
Exact change on 31 December
Average annual exchange rate
Exact change on 31 December
Average annual exchange rate
\u00a0
\u00a0
Chinese Yuan Renminbi
7.851
7.66
7.358
7.079
US dollar
1.105
1.081
1.067
1.053
British Pound Sterling
0.869
0.870
0.887
0.879(*)
(*) The exchange rate shown relates to Sourcesense Limited and is calculated based on the period between the date of acquisition (1 October 2022) and 31 December 2022", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page550-cflshid_232009-tag141501": { "value": "
2.1 COMPLIANCE WITH IAS/IFRS
The annual accounts are prepared in accordance with the International Financial Reporting Standards (\"IFRS\") issued by the International Accounting Standards Board (\"IASB\"), and endorsed by the European Union (\"EU\") in EC Regulation 1606/2002 of 19 July 2002, and in accordance with Legislative Decree 38 of 28 February 2005, which introduced regulations governing the adoption of IFRS in Italian law.
The term IFRS includes all the International Financial Reporting Standards, International Accounting Standards (\"IAS\") and interpretations issued by the International Financial Reporting Interpretations Committee (\"IFRIC\", previously known as the Standing Interpretations Committee or \"SIC\"), adopted by the European Union and contained in the EU Regulations in force at 31 December 2023, regarding which no derogations were made.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page550-cflshid_232274-tag141502": { "value": "The accounting standards reflect the full operations of the Group and Poste Italiane SpA in the foreseeable future. As a going concern, Poste Italiane Group companies prepare their financial statements on a going concern basis, also taking account of the Group's economic and financial outlook, as reflected in the new 2024-2028 strategic plan approved by the Board of Directors on 19 March 2024.", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page552-cflshid_232891-tag141504": { "value": "
2.3 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS AND THOSE SOON TO BE EFFECTIVE
Accounting standards and interpretations applicable from 1 January 2023
\u2022IFRS 17 - Insurance Contracts. The new accounting standard on insurance contracts, which fully replaced the provisions of IFRS 4, aims to:
oensure that an entity provides information that fairly represents the rights and obligations arising from the insurance contracts issued;
oeliminate inconsistencies and weaknesses in existing accounting policies by providing a single principle-based framework to account for all types of insurance contracts (including reinsurance contracts); and
oimprove comparability between entities belonging to the insurance sector by providing for specific presentation and disclosure requirements.
\u2022Amendments to IAS 1 - Presentation of Financial Statements aimed at helping preparers of financial statements to provide information on accounting policies that is more useful to investors and primary users of financial statements by replacing the requirement to disclose \"significant\" accounting policy information with the requirement to provide on material accounting policy information and how they are applied within the company.
\u2022Amendments to IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors to clarify the distinction between changes in accounting estimates, Changes to accounting policies and error corrections.
\u2022Amendments to IAS 12 - Income Taxes to clarify how deferred taxes should be accounted for on certain transactions involving the simultaneous recognition of an asset and a liability of equal amount, such as leases and decommissioning obligations. The purpose of this amendment is to reduce diversity in the recognition of deferred tax assets and liabilities on such transactions;
\u2022Amendments to IAS 12 \u2013 Income Taxes: International Tax Reform - Model Rules (Second Pillar). The amendments to the standard introduced a temporary exception to the accounting for deferred taxes in connection with the application of the provisions of Pillar Two published by the Organisation for Economic Cooperation and Development (hereinafter \"OECD\"), as well as targeted supplementary information for affected companies.
With the exception of the first-time application of IFRS 17, the impact of which on the Poste Italiane Group's financial position is described in Section 2.4 - Changes to accounting policies below, the adoption of the other changes outlined above did not have a significant impact on the financial information in the financial statements. With reference to the new provisions of IAS 1 relating to material information on accounting policies, these are reflected in Section 2.5 - Material Information on accounting standards; while the information required by the amendment to IAS 12 on international tax reform is given below.
The provisions of the OECD Pillar Two were introduced into the regulatory framework of the European Union with EU Council Directive 2022/2523 of 14 December 2022, which in turn was implemented in Italy by Legislative Decree 209 of27 December 2023 (hereinafter also referred to as the \"Decree\"). The objective of international tax reform is to ensure a minimum level of taxation, at the rate of 15 per cent, of multinational corporations in each jurisdiction in which they operate.
At the reporting date of these financial statements, the Poste Italiane Group, although falling within the scope of the regulations, does not have a second-pillar income tax exposure because at 31 December 2023 the provisions of the Decree are in force, but are not effective with regard to this Annual Report.
The Poste Italiane Group will apply the exception to the recognition and disclosure of deferred tax assets and liabilities related to second-pillar income taxes, as permitted by the relevant accounting standard.
In the meantime, the Group is analysing the exposure to the Second Pillar provisions for the period in which they will be effective, and preliminary analyses, based on simplifying assumptions and historical data (i.e. average effective tax rates calculated in accordance with paragraph 86 of IAS 12), have shown that the Second Pillar legislation is not expected to generate any additional current tax liabilities.
In particular, based on its current ownership structure, the Poste Italiane Group is present in four jurisdictions: Italy, China, Hong Kong, UK. Based on the analyses carried out, the average effective tax rates appear to be higher than 15%; therefore, the level of effective taxation of the Group companies operating in the various jurisdictions would not appear to be such as to result in the application of a domestic/supplementary minimum tax.
However, these valuations are not precise, as they are not based on the concrete and full application of all adjustments provided for in the Decree, and there may be differences between the average effective tax rate calculated in accordance with paragraph 86 of IAS 12 and that calculated in accordance with the provisions of Pillar 2.
In addition, it should be noted that the level of effective taxation of foreign companies should ensure the application of general transitional regimes (Transitional Safe Harbour) that provide for the reduction of any supplementary tax due for these jurisdictions to zero for the first three tax periods from the implementation of the legislation (2024-2026).
Finally, it should be emphasised again that, due to the complexity in the application of the legislation and the calculation of total relevant income, the quantitative impact cannot yet be reasonably estimated, and that the analyses performed on the level of effective taxation of Group companies for the year 2023, may also differ significantly from those that will take place once the legislation is fully implemented, due to the implications of the Pillar Two rules.
Accounting standards and interpretations soon to be effective
The following are applicable from 1 January 2024:
\u2022Amendment to IFRS 16 Leases: Lease Liabilities in a Sale and Leaseback. The purpose of the amendment is to specify how the selling lessee is to measure the lease liability arising from a sale and leaseback in such a way that it does not recognise income or loss in respect of the retained right of use;
\u2022Amendments to IAS 1 - Presentation of Financial Statements to provide clarification on how entities should classify payables and other liabilities between current and non-current, and to improve the information that an entity must provide when its right to defer settlement of a liability for at least 12 months is subject to covenants.
At the reporting date, the IASB has issued the following amendments, still not yet endorsed by the European Commission:
\u2022Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements;
\u2022Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability.
The potential impact on the Poste Italiane Group's financial reporting of the accounting standards, amendments and interpretations due to come into effect is currently being assessed. It should also be noted that the Group has not arranged for the early adoption of any standards, interpretations or amendments that have been issued but are not yet in force.
2.4. CHANGES TO ACCOUNTING POLICIES
From 1 January 2023, the Poste Italiane Group has adopted IFRS 17 \u2013 Insurance Contracts issued under Regulation (EU) no. 2021/2036 of the Commission of 19 November 2021.
Information on the nature and effects of the new accounting standard and the related impact of the first-time adoption of the standard on the Poste Italiane Group's statement of financial position is provided below.
Scope of application
IFRS 17 introduces new recognition, measurement and valuation rules for contracts that meet the definition of an \"insurance contract\"181F182; the new standard applies to insurance contacts issued, reinsurance contracts held, and investment contracts with discretionary participation features. Within the Poste Italiane Group, therefore, insurance contracts and investment contracts with discretionary participation features issued by the Companies belonging to the Poste Vita Group182F183, as well as reinsurance contracts held by them, fall within the scope of the new standard.
With regard to the contracts issued by the other Poste Italiane Group companies, no elements were identified that could be brought within the definition of an insurance contract, i.e., although falling within this definition, the Group opted to continue applying IFRS 15 and/or IFRS 9 as permitted by IFRS 17.
Level of portfolio aggregation
The Poste Italiane Group has defined a process for aggregating the contracts falling within the scope of IFRS 17, which envisages an initial distinction between Life and P&C business and then a distinction into different Contract Portfolios and different Unit Of Accounts. Portfolios contain contracts with similar contractual and risk characteristics that are managed in a unified manner. With regard to the Life business, contract groups are aggregated by product type (e.g. Pure Separately Managed Accounts, Multi-class, term life insurance, etc.), while for the P&C business, the level of aggregation coincides with the lines of business (e.g. those defined for Solvency II reporting); in some cases (such as for the companies Net Insurance SpA and Net Insurance Life SpA, hereinafter jointly referred to as the \"Net Group\") they are further subdivided in order to comply with the characteristics of specific products. For business related to reinsurance contracts held, the Unit of Account is equivalent to the individual treaty with the counterparty.
Contract portfolios can be further disaggregated according to the underwriting year of the policies (cohorts)183F184 and the level of profitability. For this purpose, an onerousness test of the products is carried out to divide the Units of Account into:
\u2022profitable;
\u2022onerous;
\u2022that at the time of initial recognition do not have a high probability of becoming onerous.
The following describes the process for defining the onerousness test according to the relevant business:
\u2022Life business: for contracts issued by Poste Vita SpA, the test is performed at the product level (where applicable also at the cohort level) in the design phase of the same (ex ante) exclusively for new products, determining the estimated future flows of fulfilment at the date. For contracts issued by Net Insurance Life SpA, on the other hand, the test is carried out on individual tariffs. The analysis is repeated in the event of significant events that may affect the costliness of the product in the first year of life;
\u2022P&C business: for contracts issued by the Company Poste Assicura SpA, the test is performed on the basis of the Combined Ratio184F185 at the time of the initial recognition of the contract group by defining the onerousness on a permanent basis until the maturity of the policies. For contracts issued by Net Insurance SpA, the test takes
into account estimated future fulfilment flows at the date and is performed at the contract group level according to business type.
Groups of insurance contracts are recognised at the date of initial recognition. The Poste Italiane Group has defined in detail which, for each type of business and its underlying products, is the date that identifies the start of the contractual relationship. These dates (e.g. effective date, renewal date, accession date, etc.) were chosen according to the specificities of the products issued. For the insurance contracts acquired as a result of the Net Group business combination, the initial recognition date was set at 1 April 2023, the date identified for the Purchase Price Allocation process.
Measurement models
The general model for measuring insurance contracts, called the Building Block Approach - BBA, involves defining the financial flows associated with the insurance contract, consisting of:
\u2022cash inflows and outflows;
\u2022an adjustment that takes into account the time value of money and the financial risks associated with the flows themselves;
\u2022an adjustment for non-financial risk (risk adjustment).
The final result of the sum of the preceding components, if positive, determines the Contractual Service Margin (CSM) that will be issued over the life of the insurance contract according to the so-called Coverage Unit, while if negative the Loss Component, recognised immediately in the statement of profit or loss.
The standard provides two further measurement models:
\u2022Premium Allocation Approach - PAA, an optional and alternative model to the general model, is applicable to contracts characterised by a coverage period of no more than one year, as well as to contract groups for which the company considers that simplification linked to the model would not lead to a significantly different result from that obtained with the general model (for example, absence of variability of cash flows associated with the contract group);
\u2022Variable Fee Approach - VFA, a mandatory measurement model for contracts with direct participation features, such as separately managed accounts and unit-linked insurance.
Within the Poste Italiane Group, groups of insurance contracts with at least one of the following characteristics are measured using the PAA method:
\u2022One-year Duration;
\u2022Multi-Year Duration and belonging to the Collective Business (Contract Groups = Collective);
\u2022Multi-Year Duration and belonging to a Portfolio where the weight of the Multi-year Business is less than or equal to 5% in the last 3 years.
With reference to the VFA, adopted exclusively for the Life business, the Group assessed the eligibility for the model for the following types of products:
\u2022With Profit Participating (Separately Managed Accounts);
\u2022Unit-linked standalone insurance;
\u2022Hybrid products with investment components (Multi-class).
The PAA model is applied to P&C business, with the exception of the CPI products185F186, which are measured through the adoption of the BBA as they do not meet the conditions for the application of the simplified model. The BBA is also adopted for products belonging to the Life business for which the VFA model does not apply.
Elements for determining future fulfilment flows
In application of the BBA and VFA models, future cash flows associated with insurance contracts are estimated by taking into account the \"contract boundary\", in order to identify whether a particular contractual option should be included in the cash flow projection as soon as the contract is issued or whether the exercise of that option would result in the recognition of a new contract group. The Poste Italiane Group has borrowed contract boundary identification techniques from the Solvency II context186F187, except in the case of P&C business contracts with tacit renewal that were no longer terminable at the valuation date, which define the generation of a new contract group and, therefore, a new cohort. In the Life business, pure risk policies, cases of conversion into annuities, automatic maturity deferrals and additional payouts can generate a new fulfilment cash flow; while in the P&C business, additional considerations can be made about product repricing clauses, the presence of variable sums insured and cases of lapse with return of unearned premium.
In accordance with the provisions of the standard, all costs directly attributable to the management of insurance contracts, including costs incurred in the acquisition of contracts, are also taken into account in the construction of the fulfilment cash flows. With particular reference to acquisition costs, the Group considers directly attributable to insurance contracts the costs incurred internally for placement through the Poste Italiane network, placement commissions paid to the network outside the Group (mainly for the Net Group), rappels187F188 and other direct and indirect acquisition costs.
Adjustment for non-financial risk
When assessing insurance contracts, it is necessary to consider the Risk Adjustment component, i.e. the remuneration that the Companies of the Poste Italiane Group require to assume risks of a non-financial nature. To determine the Adjustment for non-financial risk, the Poste Italiane Group has decided to use the percentile metric. According to this approach, the Adjustment for non-financial risk represents the potential loss in relation to the obligations assumed towards the policyholders (Insurance liabilities) that the Companies would incur, at a given level of probability (percentile level), to cover the insurance risks assumed, thus reflecting the risk appetite of the Companies themselves. This element is calculated separately for Life and P&C business. The confidence level identified to quantify the Adjustment for non-financial risk is 70% for both P&C and Life businesses.
In order to determine the amount of the Adjustment for non-financial risk, among other elements, the Solvency II valuation framework was taken into account, considering the same scope of underlying risks. For details of the risks considered, see Section \"2.6 - Use of estimates - Insurance liabilities\".
The Adjustment for non-financial risk may change as a result of changes in the risks to which the Group is exposed. These effects may have an impact on the statement of financial position if they relate to future services, affecting the total value of the Contractual Service Margin, and on the statement of profit or loss through the period release of this component, which occurs on the basis of a defined coverage unit.
Discount rate
For the purposes of determining the discount rate to be used for discounting future cash flows, the Poste Italiane Group has decided to adopt a \"bottom-up approach\" for the derivation of discount curves borrowed from Solvency II, in which the reference Basic Risk Free Curve is based on the Risk Free Rate curve provided by EIOPA.
The Basic Risk Free curve, depending on the specific business, may be adjusted to take into account specific Illiquidity Premiums (a component representing the level of liquidity of the counterparty) calibrated to portfolios or at Company level.
187 Legal references \"Eiopa Guidelines on Contract Boundaries - Consolidated Version\" of 31 January 2023 and Commission Delegated Regulation (EU) 2015/35 of 10 October 2014, Article 18 \"Contract Boundaries\".
188 Additional remuneration over and above the commission paid to intermediaries (agents and brokers) on the achievement of predetermined objectives (production, technical, etc.).
Please refer to section \"2.6 - Use of estimates - Insurance liabilities\" for detailed information on the discount curves used per individual portfolio.
Effect on the statement of profit or loss
The new standard changed the representation of the profitability of the insurance business from a presentation of results by volume (premiums issued and claims expenses) to a representation more focused on contract margins.
Revenue from the insurance business consist of the releases of liabilities under insurance contracts for the period, including the Contractual Service Margin (CSM) component. In addition, costs directly related to insurance contracts, including costs incurred by the network for insurance contract placement and distribution activities performed by the Parent Company and outside the Group, are allocated to revenue.
For non-profitable insurance contracts, the relevant Loss Component is recognised immediately in the statement of profit or loss. In the event that, at subsequent reporting dates, there is an improvement in the group of onerous contracts, the Poste Italiane Group Companies have provided for a method of recovering the loss component on a risk-based approach by which the release of the loss component is calculated in proportion to the period's release of the cash flows related to claims, expenses and risk adjustment.
In the case of an onerous contract, if reinsurance coverage is provided, it is necessary to identify the so-called Loss Recovery Component. The result of the reinsurance contract (Net Gain/Net Cost) will be adjusted in each reporting period to take into account the recovery of the loss component of the direct covered contract.
In addition to the issuance of the CSM and the possible recognition of the loss component, further elements capable of impacting the statement of profit or loss in the reporting period are described below:
\u2022Investment component i.e. the amount under the insurance contract that the issuing entity must pay to the counterparty even if the insured event does not occur, for which the standard does not require recognition in the underwriting result. The Group identifies the investment component for contracts in the Life business and defines it, for investment products and annuities in the accumulation phase, as the difference between the liquidated value and the lapse value net of penalties; for certain annuities that are certain to be paid out, the value of the investment component corresponds to the value of the benefits paid out. Finally, with respect to the reinsurance business, the investment component is identified in the context of contracts or treaties that provide for scaled commissions or profit participating;
\u2022Financial costs/revenue related to the insurance business, refer to the effects deriving from the change in the time value of money and the financial risk which, as envisaged by the standard, are calculated separately for each measurement model. For the VFA portfolio, financial costs/revenue are recognised either in the Statement of profit or loss or in Other Comprehensive Income (OCI) in relation to the result of the fair value of the Underlying Items and depending on the IFRS 9 classification of the underlying assets themselves; for the BBA measurement model, on the other hand, financial costs/revenue are calculated on the basis of the valuation curves adopted for the calculation of IFRS 17 flows.
In the Statement of profit or loss tables, for the sake of clarity, the cost components that are allocated to insurance margins in accordance with IFRS 17 are shown under \"Allocation of costs directly attributable to insurance contracts\".
Accounting policy under IFRS 17
The choices made by the Group in applying the provisions of the standard are summarised below:
\u2022Risk mitigation: the Poste Group does not plan to adopt risk mitigation, i.e., the option not to recognise changes
in the CSM to account for some or all of the changes in the time effect of money and non-financial risk;
\u2022OCI Option: for insurance contracts with direct participation elements for which the underlying elements are
owned, the Group opts to disaggregate the finance income or expenses into Profit for the Period and Other Comprehensive Income, based on the results of IFRS 9, which defines the valuation of the underlying elements.
The Poste Italiane Group also provides that, for contracts measured using the VFA model, the fair value income generated by the underlying assets measured under IFRS 9, relating to finance income from separately managed assets, commissions and technical interest attributable to unit-linked policies, is passed on to policyholders based on the percentage weight of the Mathematical Provisions at the date (mirroring). The value of the returns generated by the assets related to the insurance liabilities is deducted from the profit retained by the Group (over-hedging) and then allocated to the individual units of account;
\u2022Exception to the use of annual cohorts188F189: the Poste Italiane Group adopts the exemption option189F190, limited to the
portfolios pertaining to the Line of Business \"With Profit Participating\" and the hybrid products with separately managed components of Poste Vita. These contracts will therefore not be divided into annual cohorts, but will be managed together due to the mutualisation effect of returns190F191, typical of separately managed accounts. The exception is not applicable for P&C business;
\u2022Method of presentation of the result of the outward reinsurance business: the Group has chosen a net
presentation for the reinsurance result.
Impacts of first-time adoption of IFRS 17
The Poste Italiane Group elected to apply IFRS 17 starting from its mandatory effective date of 1 January 2023, without early application. As required by the new standard, the transition date to IFRS 17 has been set at 1 January 2022. On that date, the Group defined the following transition methods, in compliance with the transitional provisions of the new standard, which concerned the insurance companies Poste Vita SpA and Poste Assicura SpA:
\u2022for the Life business, the Modified Retrospective Approach was adopted for the investment portfolio and the Fair Value approach for the pure risk portfolio;
\u2022for P&C business, on the other hand, the Fair Value Approach was adopted.
At 1 January 2022 the Poste Italiane Group considered the application of the Full Retrospective Approach because the available database for past years did not have the granularity and detail required to perform the valuation required by the accounting standard; therefore, the Modified Retrospective Approach was applied as the transition method for almost all insurance contracts. The complexity and high effort required to retrieve the historical data necessary for the application of the Modified Retrospective Approach resulted in the application of the Fair Value Approach for the remaining part of the contracts.
In applying the Modified Retrospective Approach, as required by the standard, the Group has adopted simplifications compared to the Full Retrospective Approach, mainly related to the profit on contracts net of the Adjustment for non-financial risk. In applying this approach, a historical depth of contracts of about 10 years was also considered, including policies issued since 2012 and still outstanding at the transition date. This simplification was adopted because the portfolio thus constructed is a good approximation of the overall portfolio, as positions issued prior to 2012 have a percentage
weight that is considered residual. In the application of the Fair Value Approach (FVA), the value of the CSM of the P&C business was determined as the premium reserve net of acquisition commissions, while for the Life business, used for the contract group measured by BBA, it was determined as the present value of future profits net of the Adjustment for non-financial risk.
The Poste Italiane Group, and thus also the two insurance companies Poste Vita and Poste Assicura, has been applying IFRS 9 since 1 January 2018. Following the adoption of IFRS 17, there were no changes to the classification and measurement rules for financial assets.
It should be noted that the two Net Group companies were acquired during 2023 and, therefore, after the transition date of 1 January 2022.
The following tables show the effects of the transition to IFRS 17 at 1 January 2022 recognised by individual item in the financial statements. The Group Statement of financial position also incorporates the changes introduced by IAS 1 - Presentation of Financial Statements following the new accounting standard.
(\u20acm)
ASSETS
31/12/2021 IFRS 4 balances
Accounting entries eliminated
Reclassified accounting items
Effects of IFRS 17 measurement
1 January 2022 restated
Property, plant and equipment
2,267
-
-
-
2,267
Investment property
32
-
-
-
32
Intangible assets
873
-
-
-
873
Right-of-use assets
1,116
-
-
-
1,116
Investments accounted for using the equity method
277
-
-
-
277
Financial assets
221,226
-
-
-
221,226
Assets for outward reinsurance
\"\"
-
-
-
48
48
Trade receivables
3
-
-
-
3
Deferred tax assets
1,245
-
-
400
1,644
Other receivables and assets
4,012
-
-
-
4,012
Tax credits Law no. 77/2020
5,551
-
-
-
5,551
Technical provisions attributable to reinsurers
50
(50)
-
-
\"\"
-
Non-current assets
236,652
(50)
-
448
237,048
Inventories
155
-
-
-
155
Trade receivables
2,508
-
-
-
2,508
Current tax assets
115
-
-
-
115
Other receivables and assets
1,146
-
(49)
-
1,097
Tax credits Law no. 77/2020
905
-
-
-
905
Financial assets
27,630
-
-
-
27,630
Cash and deposits attributable to BancoPosta
7,659
-
-
-
7,659
Cash and cash equivalents
7,958
-
-
-
7,958
Total current assets
48,076
-
(49)
-
48,027
TOTAL ASSETS
284,728
(50)
(49)
448
285,076
The value of Assets increased by \u20ac348 million; this effect is attributable to:
\u2022derecognition of the balance of Technical provisions attributable to reinsurers (only to be recognised under IFRS 4);
\u2022recognition of Assets for outward reinsurance, which represents the valuation at 1 January 2022 of the Group's exposures related to reinsurance contracts assumed;
\u2022recognition of deferred tax assets determined on the First Time Adoption reserve of IFRS 17 related to the accounting of Liabilities under insurance contracts;
\u2022reclassification of Due from policyholders, which are removed from Other receivables and assets to be considered under Liabilities under insurance contracts, specifically under Liability for remaining coverage, which is reported under Liabilities.
(\u20acm)
LIABILITIES AND EQUITY
31/12/2021 IFRS 4 balances
Accounting entries eliminated
Reclassified accounting items
Effects of IFRS 17 measurement
1 January 2022 restated
Share capital
1,306
-
-
-
1,306
Reserves
3,599
-
-
77
3,676
Treasury shares
(40)
-
-
-
(40)
Retained earnings
7,237
-
-
(974)
6,262
Total equity attributable to owners of the Parent
12,102
-
-
(897)
11,205
Equity attributable to non-controlling interests
8
-
-
-
8
Total
12,110
-
-
(897)
11,213
Technical provisions for insurance business
159,089
(159,089)
-
-
\"\"
-
Provisions for risks and charges
693
-
-
-
693
Employee termination benefits
922
-
-
-
922
Financial liabilities
15,122
-
-
-
15,122
Liabilities under insurance contracts
\"\"
-
-
-
160,334
160,334
Deferred tax liabilities
953
-
-
-
953
Other liabilities
1,749
-
-
-
1,749
Total non-current liabilities
178,528
(159,089)
-
160,334
179,774
Provisions for risks and charges
575
-
-
-
575
Trade payables
2,029
-
-
-
2,029
Current tax liabilities
16
-
-
-
16
Other liabilities
1,860
-
-
-
1,860
Financial liabilities
89,610
-
-
-
89,610
Total current liabilities
94,090
-
-
-
94,090
TOTAL LIABILITIES AND EQUITY
284,728
(159,089)
-
159,437
285,076
The value of Liabilities and Equity also increased by \u20ac348 million, as the combined result of a decrease in Equity of \u20ac897 million and an increase in Insurance Liabilities of \u20ac1,245 million, in particular as a result of the elimination of the value of Insurance Technical Provisions recognised in accordance with IFRS 4 and the consequent recognition of the carrying amount of Liabilities under insurance contracts, measured in accordance with IFRS 17.
The following is a reconciliation of equity between 31 December 2021, accounted for under IFRS 4, and 1 January 2022, which incorporates the effects of the changes in the new accounting standard:
(\u20acm)
Equity
\u00a0
Share capital
Treasury shares
Reserves
Retained earnings
Total equity attributable to owners of the Parent
Capital and reserves attributable to non-controlling interests
Total equity
\u00a0
Legal reserve
BancoPosta RFC reserve
Equity instruments - perpetual hybrid bonds
Fair value reserve
Cash flow hedge reserve
Reserve for insurance contracts issued and outward reinsurance
Translation reserve
Reserve for investments accounted for using equity method
Incentive plans reserve
\u00a0
Balance at 31 December 2021
1,306
(40)
299
1,210
800
1,307
(33)
-
1
3
13
7,236
12,102
8
12,110
First time adoption effect
-
-
-
-
-
-
-
-
-
-
-
(1,373)
(1,373)
-
(1,373)
Accounting mirroring
-
-
-
-
-
7,945
-
(7,868)
-
-
-
-
77
-
77
Fiscal effect on transition
-
-
-
-
-
\u00a0
-
-
-
-
-
400
400
-
400
Balance at 1 January 2022
1,306
(40)
299
1,210
800
9,251
(33)
(7,868)
1
3
13
6,262
11,205
8
11,213
The application of the new accounting standard to the Poste Italiane Group's equity resulted in a reduction in retained earnings of \u20ac974 million (net of tax effects), partially offset by \u20ac77 million related to the mirroring effect, i.e., the recognition in the statement of comprehensive income, in the new item \"Reserves for insurance contracts issued and outwards reinsurance\", of the change in the fair value of financial instruments measured at FVTOCI linked to separately managed accounts following the adoption of the OCI option exercised by the Poste Italiane Group. The final net effect was a reduction of \u20ac897 million in equity.
For a better understanding of the dynamics of the new standard, a comparison of the opening IFRS17 statement of financial position balances at 1 January 2022 with 31 December 2022, appropriately adjusted, is shown below.
(\u20acm)
ASSETS
1 January 2022
31 December 2022
Changes
\u00a0
Non-current assets
237,048
211,928
(25,121)
of which
\u00a0
Assets for outward reinsurance
48
44
(4)
Deferred tax assets
1,644
2,601
957
Current assets
48,027
50,146
2,119
TOTAL ASSETS
285,076
262,074
(23,002)
LIABILITIES AND EQUITY
1 January 2022
31 December 2022
Changes
Total equity
11,213
7,878
(3,334)
Non-current liabilities
179,774
156,647
(23,126)
of which
\u00a0
Liabilities under insurance contracts
160,334
141,380
(18,954)
Liability for remaining coverage
159,372
140,348
(19,025)
Liability for remaining PAA coverage
45
56
11
Present value of future cash flows
147,547
124,330
(23,218)
Adjustment for non-financial risk
1,324
3,060
1,736
Contractual service margin
10,456
12,902
2,446
Liability for incurred claims
962
1,032
70
Cash flows related to past services
952
1,016
64
Adjustment for non-financial risk
10
17
7
Current liabilities
94,090
97,549
3,459
TOTAL LIABILITIES AND EQUITY
285,076
262,074
(23,002)
Liabilities under insurance contracts amounted to \u20ac141,380 million at 31 December 2022 and decreased by approximately \u20ac18,954 million compared to the balance at 1 January 2022. This decrease is mainly related to the decrease in the present value of future cash flows as a result of the negative financial market dynamics experienced during the year compared to the transition date. The Adjustment for non-financial risk, on the other hand, increased as a result of the updated calculation assumptions used. These dynamics led to a positive effect on the Contractual Service Margin, which, together with the effect of new production and experience variance, resulted in an increase of \u20ac2,446 million.
Equity at 31 December 2022, modified following the application of IFRS 17, decreased by approximately \u20ac1,059 million.
Below is a breakdown of the summary movement in OCI, gross of the tax effect, prepared in application of IFRS 4, already published in the 2022 Annual Report, both following the application of the new standard:
\u00a0
(\u20acm)
\u00a0
2022 IFRS 17
of which insurance
2022 IFRS 4
of which insurance
Changes
Net profit/(loss) for the year
1,583
1,511
72
FVOCI debt instruments
-
Increase/(Decrease) in fair value during the year
(27,742)
(23,333)
(4,747)
(338)
(22,994)
Transfers to profit or loss from realisation
(286)
(136)
(161)
(10)
(125)
Increase/(decrease) for expected losses
4
0
4
0
(0)
Cash flow hedges
(130)
(130)
Financial revenue or costs relating to insurance contracts issued
22,784
22,784
\"\"
-
22,784
Financial revenue or costs related to outward reinsurance
(1)
(1)
\"\"
-
(1)
Other items
1,542
1,440
102
Items not to be reclassified in the Statement of profit or loss for the year
(220)
(219)
(1)
Total other comprehensive income
(4,048)
(3,814)
(234)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(2,465)
\u00a0
\u00a0
(2,303)
\u00a0
\u00a0
(162)
As is known, the financial year 2022 was characterised by a negative trend in the financial markets, which affected the result of the Statement of comprehensive income already at 31 December 2022. In the restated situation, the negative effect remains but is presented differently, as the new standard does not provide for the application of the shadow accounting technique. In fact, the unrealised capital losses generated by the securities portfolio, amounting to \u20ac27,742 million (of which \u20ac23,333 million related to the insurance business), are shown gross of the reversal to policyholders, as the mirroring component of the financial result is accounted for in the item \"Financial revenue or costs relating to insurance contracts issued\", consistent with the requirements of the new standard and the amendments to IAS 1. Compared to the net result recorded with the application of IFRS 4 in the insurance business alone, which amounted to an unrealised loss of \u20ac338 million, the IFRS 17 result amounted to an unrealised loss of \u20ac549 million (obtained as the difference between the delta fair value of debt instruments measured at FVTOCI recorded in the year and pertaining to the insurance business alone and the amount retroceded to policyholders of \u20ac22,784 million). Although the value of the changing fair value of the securities portfolio remains unchanged in the application of IFRS 17, what changes is the representation of the \"over-coverage\", i.e. the component of the financial result related to insurance liabilities that is not passed on to policyholders but represents the Group's unrealised capital gain or loss, which is determined in a timely manner prior to the allocation of income to the individual Units of Account and mirroring.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page552-cflshid_232891-tag141505": { "value": "
\u2022IFRS 17 - Insurance Contracts. The new accounting standard on insurance contracts, which fully replaced the provisions of IFRS 4, aims to:
oensure that an entity provides information that fairly represents the rights and obligations arising from the insurance contracts issued;
oeliminate inconsistencies and weaknesses in existing accounting policies by providing a single principle-based framework to account for all types of insurance contracts (including reinsurance contracts); and
oimprove comparability between entities belonging to the insurance sector by providing for specific presentation and disclosure requirements.
Impacts of first-time adoption of IFRS 17
The Poste Italiane Group elected to apply IFRS 17 starting from its mandatory effective date of 1 January 2023, without early application. As required by the new standard, the transition date to IFRS 17 has been set at 1 January 2022. On that date, the Group defined the following transition methods, in compliance with the transitional provisions of the new standard, which concerned the insurance companies Poste Vita SpA and Poste Assicura SpA:
\u2022for the Life business, the Modified Retrospective Approach was adopted for the investment portfolio and the Fair Value approach for the pure risk portfolio;
\u2022for P&C business, on the other hand, the Fair Value Approach was adopted.
At 1 January 2022 the Poste Italiane Group considered the application of the Full Retrospective Approach because the available database for past years did not have the granularity and detail required to perform the valuation required by the accounting standard; therefore, the Modified Retrospective Approach was applied as the transition method for almost all insurance contracts. The complexity and high effort required to retrieve the historical data necessary for the application ofthe Modified Retrospective Approach resulted in the application of the Fair Value Approach for the remaining part of the contracts.
In applying the Modified Retrospective Approach, as required by the standard, the Group has adopted simplifications compared to the Full Retrospective Approach, mainly related to the profit on contracts net of the Adjustment for non-financial risk. In applying this approach, a historical depth of contracts of about 10 years was also considered, including policies issued since 2012 and still outstanding at the transition date. This simplification was adopted because the portfolio thus constructed is a good approximation of the overall portfolio, as positions issued prior to 2012 have a percentage
weight that is considered residual. In the application of the Fair Value Approach (FVA), the value of the CSM of the P&C business was determined as the premium reserve net of acquisition commissions, while for the Life business, used for the contract group measured by BBA, it was determined as the present value of future profits net of the Adjustment for non-financial risk.
The Poste Italiane Group, and thus also the two insurance companies Poste Vita and Poste Assicura, has been applying IFRS 9 since 1 January 2018. Following the adoption of IFRS 17, there were no changes to the classification and measurement rules for financial assets.
It should be noted that the two Net Group companies were acquired during 2023 and, therefore, after the transition date of 1 January 2022.
The following tables show the effects of the transition to IFRS 17 at 1 January 2022 recognised by individual item in the financial statements. The Group Statement of financial position also incorporates the changes introduced by IAS 1 - Presentation of Financial Statements following the new accounting standard.
(\u20acm)
ASSETS
31/12/2021 IFRS 4 balances
Accounting entries eliminated
Reclassified accounting items
Effects of IFRS 17 measurement
1 January 2022 restated
Property, plant and equipment
2,267
-
-
-
2,267
Investment property
32
-
-
-
32
Intangible assets
873
-
-
-
873
Right-of-use assets
1,116
-
-
-
1,116
Investments accounted for using the equity method
277
-
-
-
277
Financial assets
221,226
-
-
-
221,226
Assets for outward reinsurance
\"\"
-
-
-
48
48
Trade receivables
3
-
-
-
3
Deferred tax assets
1,245
-
-
400
1,644
Other receivables and assets
4,012
-
-
-
4,012
Tax credits Law no. 77/2020
5,551
-
-
-
5,551
Technical provisions attributable to reinsurers
50
(50)
-
-
\"\"
-
Non-current assets
236,652
(50)
-
448
237,048
Inventories
155
-
-
-
155
Trade receivables
2,508
-
-
-
2,508
Current tax assets
115
-
-
-
115
Other receivables and assets
1,146
-
(49)
-
1,097
Tax credits Law no. 77/2020
905
-
-
-
905
Financial assets
27,630
-
-
-
27,630
Cash and deposits attributable to BancoPosta
7,659
-
-
-
7,659
Cash and cash equivalents
7,958
-
-
-
7,958
Total current assets
48,076
-
(49)
-
48,027
TOTAL ASSETS
284,728
(50)
(49)
448
285,076
The value of Assets increased by \u20ac348 million; this effect is attributable to:
\u2022derecognition of the balance of Technical provisions attributable to reinsurers (only to be recognised under IFRS 4);
\u2022recognition of Assets for outward reinsurance, which represents the valuation at 1 January 2022 of the Group's exposures related to reinsurance contracts assumed;
\u2022recognition of deferred tax assets determined on the First Time Adoption reserve of IFRS 17 related to the accounting of Liabilities under insurance contracts;
\u2022reclassification of Due from policyholders, which are removed from Other receivables and assets to be considered under Liabilities under insurance contracts, specifically under Liability for remaining coverage, which is reported under Liabilities.
LIABILITIES AND EQUITY
31/12/2021 IFRS 4 balances
Accounting entries eliminated
Reclassified accounting items
Effects of IFRS 17 measurement
1 January 2022 restated
Share capital
1,306
-
-
-
1,306
Reserves
3,599
-
-
77
3,676
Treasury shares
(40)
-
-
-
(40)
Retained earnings
7,237
-
-
(974)
6,262
Total equity attributable to owners of the Parent
12,102
-
-
(897)
11,205
Equity attributable to non-controlling interests
8
-
-
-
8
Total
12,110
-
-
(897)
11,213
Technical provisions for insurance business
159,089
(159,089)
-
-
\"\"
-
Provisions for risks and charges
693
-
-
-
693
Employee termination benefits
922
-
-
-
922
Financial liabilities
15,122
-
-
-
15,122
Liabilities under insurance contracts
\"\"
-
-
-
160,334
160,334
Deferred tax liabilities
953
-
-
-
953
Other liabilities
1,749
-
-
-
1,749
Total non-current liabilities
178,528
(159,089)
-
160,334
179,774
Provisions for risks and charges
575
-
-
-
575
Trade payables
2,029
-
-
-
2,029
Current tax liabilities
16
-
-
-
16
Other liabilities
1,860
-
-
-
1,860
Financial liabilities
89,610
-
-
-
89,610
Total current liabilities
94,090
-
-
-
94,090
TOTAL LIABILITIES AND EQUITY
284,728
(159,089)
-
159,437
285,076
The value of Liabilities and Equity also increased by \u20ac348 million, as the combined result of a decrease in Equity of \u20ac897 million and an increase in Insurance Liabilities of \u20ac1,245 million, in particular as a result of the elimination of the value of Insurance Technical Provisions recognised in accordance with IFRS 4 and the consequent recognition of the carrying amount of Liabilities under insurance contracts, measured in accordance with IFRS 17.
The following is a reconciliation of equity between 31 December 2021, accounted for under IFRS 4, and 1 January 2022, which incorporates the effects of the changes in the new accounting standard:
(\u20acm)
Equity
\u00a0
Share capital
Treasury shares
Reserves
Retained earnings
Total equity attributable to owners of the Parent
Capital and reserves attributable to non-controlling interests
Total equity
\u00a0
Legal reserve
BancoPosta RFC reserve
Equity instruments - perpetual hybrid bonds
Fair value reserve
Cash flow hedge reserve
Reserve for insurance contracts issued and outward reinsurance
Translation reserve
Reserve for investments accounted for using equity method
Incentive plans reserve
\u00a0
Balance at 31 December 2021
1,306
(40)
299
1,210
800
1,307
(33)
-
1
3
13
7,236
12,102
8
12,110
First time adoption effect
-
-
-
-
-
-
-
-
-
-
-
(1,373)
(1,373)
-
(1,373)
Accounting mirroring
-
-
-
-
-
7,945
-
(7,868)
-
-
-
-
77
-
77
Fiscal effect on transition
-
-
-
-
-
\u00a0
-
-
-
-
-
400
400
-
400
Balance at 1 January 2022
1,306
(40)
299
1,210
800
9,251
(33)
(7,868)
1
3
13
6,262
11,205
8
11,213
The application of the new accounting standard to the Poste Italiane Group's equity resulted in a reduction in retained earnings of \u20ac974 million (net of tax effects), partially offset by \u20ac77 million related to the mirroring effect, i.e., the recognition in the statement of comprehensive income, in the new item \"Reserves for insurance contracts issued and outwards reinsurance\", of the change in the fair value of financial instruments measured at FVTOCI linked to separately managed accounts following the adoption of the OCI option exercised by the Poste Italiane Group. The final net effect was a reduction of \u20ac897 million in equity.
For a better understanding of the dynamics of the new standard, a comparison of the opening IFRS17 statement of financial position balances at 1 January 2022 with 31 December 2022, appropriately adjusted, is shown below.
(\u20acm)
ASSETS
1 January 2022
31 December 2022
Changes
\u00a0
Non-current assets
237,048
211,928
(25,121)
of which
\u00a0
Assets for outward reinsurance
48
44
(4)
Deferred tax assets
1,644
2,601
957
Current assets
48,027
50,146
2,119
TOTAL ASSETS
285,076
262,074
(23,002)
LIABILITIES AND EQUITY
1 January 2022
31 December 2022
Changes
Total equity
11,213
7,878
(3,334)
Non-current liabilities
179,774
156,647
(23,126)
of which
\u00a0
Liabilities under insurance contracts
160,334
141,380
(18,954)
Liability for remaining coverage
159,372
140,348
(19,025)
Liability for remaining PAA coverage
45
56
11
Present value of future cash flows
147,547
124,330
(23,218)
Adjustment for non-financial risk
1,324
3,060
1,736
Contractual service margin
10,456
12,902
2,446
Liability for incurred claims
962
1,032
70
Cash flows related to past services
952
1,016
64
Adjustment for non-financial risk
10
17
7
Current liabilities
94,090
97,549
3,459
TOTAL LIABILITIES AND EQUITY
285,076
262,074
(23,002)
Liabilities under insurance contracts amounted to \u20ac141,380 million at 31 December 2022 and decreased by approximately \u20ac18,954 million compared to the balance at 1 January 2022. This decrease is mainly related to the decrease in the present value of future cash flows as a result of the negative financial market dynamics experienced during the year compared to the transition date. The Adjustment for non-financial risk, on the other hand, increased as a result of the updated calculation assumptions used. These dynamics led to a positive effect on the Contractual Service Margin, which, together with the effect of new production and experience variance, resulted in an increase of \u20ac2,446 million.
Equity at 31 December 2022, modified following the application of IFRS 17, decreased by approximately \u20ac1,059 million.
Below is a breakdown of the summary movement in OCI, gross of the tax effect, prepared in application of IFRS 4, already published in the 2022 Annual Report, both following the application of the new standard:
\u00a0
(\u20acm)
\u00a0
2022 IFRS 17
of which insurance
2022 IFRS 4
of which insurance
Changes
Net profit/(loss) for the year
1,583
1,511
72
FVOCI debt instruments
-
Increase/(Decrease) in fair value during the year
(27,742)
(23,333)
(4,747)
(338)
(22,994)
Transfers to profit or loss from realisation
(286)
(136)
(161)
(10)
(125)
Increase/(decrease) for expected losses
4
0
4
0
(0)
Cash flow hedges
(130)
(130)
Financial revenue or costs relating to insurance contracts issued
22,784
22,784
\"\"
-
22,784
Financial revenue or costs related to outward reinsurance
(1)
(1)
\"\"
-
(1)
Other items
1,542
1,440
102
Items not to be reclassified in the Statement of profit or loss for the year
(220)
(219)
(1)
Total other comprehensive income
(4,048)
(3,814)
(234)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(2,465)
\u00a0
\u00a0
(2,303)
\u00a0
\u00a0
(162)
As is known, the financial year 2022 was characterised by a negative trend in the financial markets, which affected the result of the Statement of comprehensive income already at 31 December 2022. In the restated situation, the negative effect remains but is presented differently, as the new standard does not provide for the application of the shadow accounting technique. In fact, the unrealised capital losses generated by the securities portfolio, amounting to \u20ac27,742 million (of which \u20ac23,333 million related to the insurance business), are shown gross of the reversal to policyholders, as the mirroring component of the financial result is accounted for in the item \"Financial revenue or costs relating to insurance contracts issued\", consistent with the requirements of the new standard and the amendments to IAS 1. Compared to the net result recorded with the application of IFRS 4 in the insurance business alone, which amounted to an unrealised loss of \u20ac338 million, the IFRS 17 result amounted to an unrealised loss of \u20ac549 million (obtained as the difference between the delta fair value of debt instruments measured at FVTOCI recorded in the year and pertaining to the insurance business alone and the amount retroceded to policyholders of \u20ac22,784 million). Although the value of the changing fair value of the securities portfolio remains unchanged in the application of IFRS 17, what changes is the representation of the \"over-coverage\", i.e. the component of the financial result related to insurance liabilities that is not passed on to policyholders but represents the Group's unrealised capital gain or loss, which is determined in a timely manner prior to the allocation of income to the individual Units of Account and mirroring.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFirstTimeAdoptionExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page563-cflshid_239267-tag141508": { "value": "
2.5 MATERIAL INFORMATION ON ACCOUNTING STANDARDS
The Poste Italiane Group's financial statements have been prepared on a historical cost basis, with the exception of certain items for which fair value measurement is obligatory.
Below is information on accounting standards considered relevant191F192 by the Poste Italiane Group, as well as all other information considered by management to be useful for understanding financial statement disclosures, revised essentially
to take into account the new provisions of IAS 1 - Presentation of Financial Statements, which came into force on 1 January 2023.
Property, plant and equipment
Property, plant and equipment is stated at acquisition or construction cost, less accumulated depreciation and any accumulated impairment losses. Where the condition is met, this cost is increased for charges directly related to the purchase or construction of the asset, including - where identifiable and measurable - that relating to employees involved in the planning and/or preparation for use phase. Interest expense incurred by the Group for loans specifically for the acquisition or construction of property, plant and equipment is capitalised together with the value of the asset; all other interest expense is recognised as finance costs in profit or loss for the year in question. Costs incurred for routine and/or cyclical maintenance and repairs are recognised directly in profit or loss in the related year. The capitalisation of costs attributable to the extension, modernisation or improvement of assets owned by Group companies or held under lease is carried out to the extent that they qualify for separate recognition as an asset or as a component of an asset, applying the component approach, which requires each component with a different estimated useful life and value to be recognised and amortised separately.
The original cost is depreciated on a straight-line basis from the date the asset is available and ready for use, based on the asset's expected useful life. Land is not depreciated
Property and any related fixed plant and machinery located on land held under concession or sub-concession, which is to be returned free of charge to the grantor at the end of the concession term, are accounted for, based on the nature of the asset, within property, plant and equipment and depreciated on a straight-line basis over the shorter of the useful life of the asset and the residual concession term.
At each reporting date, property, plant and equipment is analysed in order to identify the existence of any indicators of impairment (in accordance with IAS 36 - Impairment of Assets; please refer to the treatment of impairment of assets).
Gains and losses deriving from the disposal or retirement of an asset are calculated as the difference between the disposal proceeds and the net carrying amount of the asset retired or sold, and are recognised in profit or loss in the period in which the transaction occurs.
The Investment property of the Poste Italiane Group relates to land or buildings held with a view to earn rental or lease income or for capital appreciation or both; in both cases such property generates cash flows that are largely independent of other assets. The same accounting treatment is applied to investment property as to property, plant and equipment.
For details of the useful life of the main classes of Property, plant and equipment of the Group, reference should be made to Note 2.6 - Use of estimates.
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, which is controllable and capable of generating future economic benefits. The initial carrying amount is adjusted for accumulated amortisation, where an amortisation process is envisaged, and for any impairment losses.
In particular, Industrial patents, intellectual property rights, licences and similar rights are initially valued at purchase cost. This cost is increased for charges directly related to the purchase or preparation for use of the asset. Interest expense that the Group may incur for loans specifically for the purchase of industrial patents, intellectual property rights, licenses and similar rights are capitalised together with the value of the asset; all other interest expense is recognised as finance costs in profit or loss for the year. Amortisation starts once the asset is available for use. Amortisation is applied on a
straight-line basis, in order to distribute the purchase cost over the shorter of the expected useful life of the asset and any related contract terms, from the date the entity has the right to use the asset.
Industrial patents, intellectual property rights, licenses and similar rights include costs directly associated with the internal production of unique and identifiable software products. Direct costs include - where identifiable and measurable - the charge related to employees involved in software development. Costs incurred for the maintenance of internally developed software products are charged to profit or loss for the year in question. Amortisation begins when the asset is available for use and extends, systematically and on a straight-line basis, over its estimated useful life. Any research costs are not capitalised.
Among the Group's intangible assets, Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the identifiable assets and liabilities of the company or business acquired, at the date of acquisition. Goodwill attributable to investments accounted for using the equity method is included in the carrying amount of the equity investment. Goodwill is not amortised on a systematic basis, but is tested periodically for impairment in accordance with IAS 36. This test is performed with reference to the cash generating unit (\"CGU\") to which the goodwill is attributable. The method applied in conducting impairment tests and the impact on the accounts of any impairment losses are described in the paragraph, \"Impairment of assets\".
Lastly, it should be noted that following the Purchase Price Allocation activity related to the acquisition of the Net Group, the value of the \"Net Insurance\" brand was recognised among the Group's Intangible assets. Similar to Goodwill, this Brand, considered to have an indefinite useful life, is not subject to systematic amortisation but to the provisions of IAS 36 on impairment.
Lease arrangements
The Group assesses whether a contract is or contains a lease at the time of its initial recognition; over the life of the contract, the initial assessment is revised only in response to changes in the terms of the contract (specifically, contractual term or lease payments due).
On the contract commencement date, a right to use the leased asset is recorded, equal to the initial value of the corresponding lease liability, plus payments due before or at the same time as the contract commencement date (e.g. agency fees). Subsequently, said right of use is measured less accumulated depreciation and any accumulated impairment losses. Depreciation starts on the commencement date of the lease and extends over the shorter of the lease term and the useful life of the underlying asset. If events or changes in circumstances indicate that the carrying amount of the right of use cannot be recovered, this asset is tested for impairment in accordance with the provisions of IAS 36 - Impairment of Assets.
The lease liability is initially recorded at the present value of the lease instalments not paid on the date the contract commences192F193, discounted using the incremental borrowing rate, defined by loan period and for each Group company. The lease liability is subsequently reduced to reflect the lease payments made and increased to reflect interest on the remaining amount.
The lease liability is restated (resulting in a right-of-use adjustment) in the event of a change in:
\u2022the lease term (for example, in the case of early termination of the contract or an extension of the lease);
\u2022the assessment of a purchase option for the underlying asset; in these cases, lease payments due are reviewed on the basis of the revised lease term and to take account of the change in the amounts payable in view of the purchase option;
\u2022future lease payments deriving from a change in the index or rate used to determine the payments (e.g. ISTAT), or as a result of a renegotiation of the financial conditions.
Only in the case of a significant change in the lease term or in future lease payments does the Group remeasure the remaining lease liability with reference to the incremental borrowing rate at the date of the modification.
The Group avails itself of the option granted by the principle to apply a simplified accounting regime to short-term contracts for some specific asset classes (with a duration of no more than twelve months), to contracts in which the individual underlying asset is of low value (up to \u20ac5,000) and to contracts in which the individual underlying asset is an intangible asset; for these contracts, lease payments are recognised in profit or loss as matching entry to short-term trade payables.
Impairment of assets
At the end of each reporting period, property, plant, equipment and intangible assets with finite lives are analysed to assess whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the impairment loss to be recognised in profit or loss. The recoverable amount is the higher of an asset's fair value less costs to sell, and its value in use, represented by the present value of the future cash flows expected to be derived from the asset. In calculating value in use, future cash flow estimates are discounted using a rate that reflects current market assessments of the time value of money, the period of the investment and the risks specific to the asset. The realisable value of assets that do not generate separate cash flows is determined with reference to the cash generating unit (CGU) to which the asset belongs.
Regardless of any impairment indicator, the assets listed below are tested for impairment every year:
\u2022intangible assets with an indefinite useful life or that are not yet available; the impairment test can take place at any time during the year, provided that it is performed at the same time in each of the following years;
\u2022goodwill acquired in a business combination.
An impairment loss is recognised in profit or loss for the amount by which the net carrying amount of the asset, or the CGU to which it belongs, exceeds its recoverable amount. In particular, if the impairment loss regards goodwill and is higher than the related carrying amount, the remaining amount is allocated to the assets included in the CGU to which the goodwill has been allocated, in proportion to their carrying amount193F194. Except in the case of goodwill, if the impairment indicators no longer exist, the carrying amount of the asset or CGU is reinstated and the reversal recognised in profit or loss. The reversal must not exceed the carrying amount that would have been determined had no impairment loss been recognised and depreciation or amortisation been charged.
Investments
In the Poste Italiane Group's consolidated financial statements, investments in companies over which the Group exerts significant influence, (\"associates\") and in joint ventures, are accounted for using the equity method. Certain particularly insignificant investments in subsidiaries (individually and in aggregate) are also valued using the equity method. See note 2.8 \u2013 Basis of consolidation.
In Poste Italiane SpA's separate financial statements, investments in subsidiaries and associates are accounted for at cost (including any directly attributable incidental expenses), after adjustment for any impairments. Investments in subsidiaries
and associates are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment losses (or subsequent reversals of impairment losses) are recognised in the same way and to the same extent described with regard to property, plant and equipment and intangible assets in the paragraph, \"Impairment of assets\".
Financial instruments
On initial recognition, financial assets and liabilities are classified at fair value based on the business purpose for which they were acquired. The purchase and sale of financial instruments is recognised by category, either on the date on which the Group commits to purchase or sell the asset (the transaction date), or, in the case of insurance transactions and BancoPosta's operations, at the settlement date194F195. Any changes in fair value between the transaction date and the settlement date are recognised in the financial statements.
On the other hand, trade receivables are recognised at their transaction price, in accordance with IFRS 15 - Revenue from Contracts with Customers.
On initial recognition, financial assets are classified in one of the following categories, based on the business model adopted to manage them and the characteristics of their contractual cash flows:
\u2022Financial assets measured at amortised cost
This category reflects financial assets held to collect the contractual cash flows (the held to collect or HTC business model) representing solely payments of principal and interest (SPPI). These assets are measured at amortised cost, that is the value assigned to the financial asset or liability on initial recognition, net of any principal reimbursement, plus or minus the cumulative amortisation by using the effective interest rate method on the difference between the initial value and the value at maturity, after deducting any impairment. The business model on which the classification of financial assets is based permits the sale of such assets; if the sales are not occasional, and are not immaterial in terms of value, consistency with the HTC business model should be assessed.
\u2022Financial assets measured at fair value through other comprehensive income (FVTOCI)
This category includes financial assets held both to collect the relevant contractual cash flows and for sale (the held to collect and sell or HTC&S business model), with the contractual cash flows representing solely payments of principal and interest.
These financial assets are measured at fair value and, until they are derecognised or reclassified, gains or losses from valuation are recognised in other comprehensive income. Exceptions to this are gains and losses due to impairment and foreign exchange gains and losses recognised in the profit or loss in the year in question. If the financial asset is derecognised, the accumulated gains/(losses) recognised in OCI are recycled to profit or loss.
This category also includes equity instruments that would otherwise be recognised through profit or loss, for which the irrevocable election was made to recognise changes in fair value through OCI (the FVTOCI option). This option entails the recognition of solely dividends through profit or loss.
\u2022Financial assets measured at fair value through profit or loss
This category includes: (a) financial assets primarily held for trading; (b) those that qualify for designation at fair value through profit or loss, exercising the fair value option; (c) financial assets that must be recognised at fair value through profit or loss; (d) derivative instruments, with the exception of the effective portion of those designated as cash flow hedges. Financial assets belonging to the category in question are measured at fair value and the related changes are recognised in profit or loss. Derivative instruments at fair value through profit or loss are recognised as assets or liabilities depending on whether the fair value is positive or negative.; positive and negative fair values deriving from transactions with the same counterparty are offset during the collateralisation phase, where contractually provided for
The classification as \"current\" or \"non-current\" of financial assets measured at amortised cost and financial assets measured at fair value through other comprehensive income depends on the contractual maturity of the instrument, since current assets are those whose realisation is expected within twelve months of the reporting date. Financial assets measured at fair value through profit or loss are, on the other hand, classified as \"current\" if held for trading and are expected to be sold within twelve months of the reporting date.
An expected credit loss (ECL) provision must be made for financial assets recognised at amortised cost and financial assets at fair value through OCI, as follows: (i) specific provisions for doubtful debts are made for expected losses on financial assets measured at amortised cost; (ii) expected losses on financial assets measured at fair value through other comprehensive income are recognised in profit or loss, with a contra entry in the fair value reserve in equity. The method utilised is the \"General impairment model\", whereby:
\u2022If on the reporting date the credit risk of a financial instrument has not increased significantly since initial recognition, a 12-month ECL is recognised (stage 1). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If on the reporting date the credit risk of the financial instrument has increased significantly since initial recognition, a lifetime ECL is recognised (stage 2). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If a financial instrument is already impaired on initial recognition or shows objective evidence of impairment at the reporting date, lifetime expected losses are recognised. Interest is recognised at amortised cost (stage 3), i.e. on the basis of the exposure value - determined using the effective interest rate - adjusted for expected losses.
Detailed information on the inputs, assumptions and techniques for determining expected losses on financial assets is provided in Note 2.6 - Use of Estimates, to which reference is made for a full discussion.
Financial assets are derecognised when there is no longer a contractual right to receive cash flows from the investment or when all the related risks and rewards and control have been substantially transferred. If the substantial transfer of risks and rewards cannot be ascertained, financial assets are derecognised if no control is retained over them. Finally, transferred assets are derecognised if the contractual right to receive the cash flows of the assets is retained, but at the same time a contractual obligation is assumed to pay these flows to a third party, without delay and only to the extent of those received.
In addition, for impaired financial assets, derecognition may take place following the write-off of the same, following the acknowledgement that there is no reasonable expectation of recovery (e.g. prescription).
Financial liabilities, including loans, trade payables and other payment obligations, are measured at amortised cost using the effective interest method. If there is a change in the expected cash flows and they can be reliably estimated, the value of borrowings is recalculated to reflect the change on the basis of the present value of estimated future cash flows and the internal rate of return initially applied. Financial liabilities are classified as current liabilities, unless there is an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.
When required by the applicable IFRS (e.g. in the case of derivative liabilities), or when the irrevocable fair value option is exercised, financial liabilities are recognised at fair value through profit or loss. In this case, changes in fair value attributable to changes in own credit risk are recognised directly in equity, unless this treatment creates or enhances an accounting asymmetry, whereby the residual amount of the changes in the fair value of liabilities is recognised through profit or loss.
Financial liabilities are derecognised when they are extinguished or when the obligation specified in the contract expires, is cancelled or discharged.
For hedge accounting transactions, the Poste Italiane Group has elected to use the option made available by IFRS 9 and has retained the accounting treatments provided for by IAS 39. In accordance with this standard, derivatives are initially recognised at fair value on the date the derivative contract is executed and if they do not qualify for hedge accounting treatment, gains and losses arising from changes in fair value are accounted for in profit or loss for the period.
If, on the other hand, derivative financial instruments qualify for hedge accounting, gains and losses arising from changes in fair value after initial recognition are accounted for in accordance with IAS 39 \u2013 Financial Instruments: Recognition and Measurement, as described below.
The relationship between each hedging instrument and the hedged item is documented, as well as the risk management objective, the strategy for undertaking the hedge transaction and the methods used to assess effectiveness. Assessment of whether the hedging derivative is effective takes place both at designation of each derivative instrument as hedging instrument, and during its life.
\u2022Fair value hedges195F196
When the hedge is related to recognised assets or liabilities, or an unrecognised firm commitment, the changes in fair value of both the hedging instrument and the hedged item are recognised in profit or loss. When the hedging transaction is not fully effective, resulting in differences between the above changes, the ineffective portion represents a loss or gain recognised separately in profit or loss for the period.
Macro hedges are deemed highly effective if, at their inception and throughout the term of the hedge, changes in the fair value of the hedged cash amount are offset by changes in the fair value of the hedges, and if the effective results fall within the interval required by the reference standard.
\u2022Cash flow hedges196F197
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges after initial recognition is recognised in a specific equity reserve, with movements in the reserve accounted for in \"Other comprehensive income\" (the \"Cash flow hedge reserve\"). A hedging transaction is generally considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. If the hedging transaction is not fully effective, the gain or loss arising from a change in fair value relating to the ineffective portion is recognised in profit or loss for the period.
Amounts accumulated in equity are recycled to profit or loss in the period in which the hedged item affects profit or loss. In particular, in the case of hedges associated with a highly probable forecast transaction (such as the purchase of fixed income debt securities), the reserve is reclassified to profit or loss in the period or in the periods in which the asset or liability, subsequently accounted for and connected to the aforementioned transaction, will affect profit or loss (for example, an adjustment to the return on the security).
If, during the life of the derivative, the forecast hedged transaction is no longer expected to occur, the related gains and losses accumulated in the cash flow hedge reserve are immediately reclassified to profit or loss for the period. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the related gains and losses accumulated in the cash flow hedge reserve at that time remain in equity and are recognised in profit or loss at the same time as the original underlying.
Embedded derivatives
An embedded derivative is a derivative included in a combined contract or hybrid instrument, also containing a non-derivative contract or host contract, which originates all or part of the cash flows of the combined contract. Embedded derivatives are separated from the host contract and recognised as a derivative when:
\u2022the host contract is not a financial instrument measured at fair value through profit or loss;
\u2022the economic risks and characteristics of the embedded derivative are not closely related to those of the host contract;
\u2022a separate contract with the same terms as the embedded derivative would meet the definition of a derivative.
Within the Group, contracts that may contain embedded derivatives are:
\u2022contracts for the purchase of non-financial items entered into by Postepay SpA with clauses or options that influence the contract price, for which, however, embedded derivatives are not separable from the host contract;
\u2022convertible bonds held by Poste Italiane SpA and Postepay SpA, for which the embedded derivative component is not separated as the host contract is a financial instrument measured at fair value through profit or loss.
Repurchase agreements
Any securities received as part of a transaction entailing subsequent re-sale and the delivery of securities as part of a transaction entailing their subsequent repurchase are not either recognised or derecognised in these financial statements. Consequently, in the case of securities purchased under a resale agreement, the amount paid is recognised as an amount due from customers or banks under Financial assets measured at amortised cost; in the case of securities sold under a repurchase agreement, the liability is recognised as an amount due to banks or customers under Financial liabilities measured at amortised cost. The transactions described are subject to offsetting if, and only if, they are carried out with the same counterparty, have the same maturity and offsetting is provided for in the contract.
Tax credits Law no. 77/2020
In order to identify the correct accounting treatment of receivables acquired in relation to Relaunch Decree no. 34/2020 (later converted into Law no. 77 of 17 July 2020), since it is not possible to identify the framework directly applicable to this case, in compliance with the provisions of IAS 8, an accounting policy was defined suitable for providing relevant and reliable information aimed at ensuring a faithful representation of the financial position, income and cash flows and which reflects the economic substance and not merely the form of the transaction. On the basis of the analyses carried out and the documents published by the main Italian supervisory bodies (Joint Document of the Bank of Italy, IVASS and CONSOB197F198), although the definition of financial assets in IAS 32 is not directly applicable to this case, an accounting model was developed based on IFRS 9 given that:
\u2022at inception, an asset as defined by the Conceptual Framework arises in the transferee's financial statements;
\u2022they may be used to offset a payable that is usually settled in cash (tax payables), and exchanged for other financial assets on terms that may be potentially favourable to the entity;
\u2022a business model can be identified (Hold to Collect, Hold to Collect and Sell or other business models).
At the date of purchase, these receivables are recognised at their fair value (coinciding with the price paid) and subsequently measured at amortised cost, as they were acquired to be used to offset tax or social security payables by Poste Italiane SpA, based on the provisions of the relevant regulations (\"Hold to Collect\" business model).
Classification of receivables and payables attributable to BancoPosta and EMI RFC
Receivables and payables attributable to BancoPosta RFC are treated as financial assets and liabilities if related to BancoPosta's typical deposit-taking and lending activities, or services provided under authority from customers. The related operating expenses and income, if not settled or classifiable in accordance with Bank of Italy Circular 272 of 30 July 2008 \u2013 The Account Matrix, are accounted for in trade receivables and payables.
Receivables and payables attributable to EMI RFC are treated as financial assets and liabilities if related to EMIs' typical activities, or services provided under authority from customers. The related operating expenses and income, if not settled or classifiable in accordance with Bank of Italy Circular 217 of 5 August 1996 \u2013 The Account Matrix, are accounted for in trade receivables and payables.
Own use exemption
The standards establishing the principles for the recognition and measurement of financial instruments are also applied to derivative contracts to buy or sell non-financial items that are settled net in cash or in another financial instrument, with the exception of contracts entered into, and that continue to be held, for the purpose of the receipt or delivery of a non-financial item in accordance with the entity's expected purchase, sale or usage requirements (the own use exemption). This exemption applies to the recognition and measurement of forward electricity and natural gas contracts entered into by the subsidiary Postepay SpA if the following conditions have been met:
\u2022the contract involves the physical supply of a commodity;
\u2022the entity has not entered into an offsetting contract;
\u2022the transaction must be entered into in accordance with expected purchase and/or sale or usage requirements.
When the above conditions are met, the contract for the purchase or sale of non-financial items is classified as a \"normal contract of sale\".
Taxes
Current income tax expense is based on the best estimate of taxable profit for the period and the related regulations, applying the rates in force. Deferred tax assets and liabilities are calculated on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts, using tax rates that are expected to apply when the related deferred tax assets are realised or the deferred tax liabilities are settled. Deferred tax assets and liabilities are not recognised if the temporary differences derive from investments in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary difference is controlled by the Group or it is probable that the temporary difference will not reverse in the foreseeable future. In accordance with IAS 12, deferred tax liabilities are not recognised on goodwill deriving from a business combination.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Current and deferred taxes are recognised in profit or loss, with the exception of taxes charged or credited directly to equity, in which case the tax effect is recognised directly in equity. Current and deferred tax assets and liabilities are offset when they are applied by the same tax authority to the same taxpaying entity, which has the legally exercisable right to offset the amounts recognised, and the entity has the intention of exercising this right. As a result, tax liabilities accruing in interim
periods that are shorter than the tax year are not offset against related assets deriving from withholding tax or advances paid.
The Group's taxation and accounting standards take account of the effects of Poste Italiane SpA's participation in the national tax consolidation scheme, for which the option has been exercised in accordance with the law, together with the following subsidiaries: Poste Vita SpA, SDA Express Courier SpA, Poste Air Cargo Srl, Postel SpA, Europa Gestioni Immobiliari SpA, Poste Welfare Servizi Srl, Poste Assicura SpA, BancoPostaFondi SpA SGR, PostePay SpA, Poste Insurance Broker Srl, MLK Deliveries SpA, Indabox Srl, Nexive Network Srl, LIS Holding SpA, LIS PAY SpA, Address Software Srl, Consorzio Servizi Scpa, Logos Srl and Plurima SpA. The tax consolidation arrangement is governed by Group regulations based on the principles of neutrality and equality of treatment, which are intended to ensure that the companies included in the tax consolidation are in no way penalised as a result. Following adoption of the tax consolidation arrangement, the Parent Company's tax expense is determined at consolidated level on the basis of the tax expense or tax losses for the period for each company included in the consolidation, taking account of any withholding tax or advances paid. Poste Italiane SpA posts its IRES tax expense to income taxes for the period, after adjustments to take account of the positive or negative impact of tax consolidation adjustments. Should the reductions or increases in tax expense deriving from such adjustments be attributable to the companies included in the tax consolidation, Poste Italiane SpA attributes such reductions or increases in tax expense to the companies in question. The economic benefits deriving from the offset of tax losses transferred to the consolidating entity by the companies participating in the tax consolidation arrangement are recognised in full by Poste Italiane SpA. Other taxes not related to income are included in \"Other operating costs\".
Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of interchangeable items and goods for resale is calculated using the weighted average cost method. In the case of non-interchangeable items, cost is measured on the basis of the specific cost of the item at the time of purchase. The value of the inventories is adjusted, if necessary, by provisions for obsolete or slow-moving stock. When the circumstances that previously led to recognition of the above provisions no longer exist, or when there is a clear indication of an increase in the net realisable value, the provisions are fully or partly reversed, so that the new carrying amount is the lower of cost and net realisable value at the end of the reporting period. Assets are not, however, recognised in the statement of financial position when the Group has incurred an expense that, based on the best information available at the date of preparation of the financial statements, is deemed unlikely to generate economic benefits for the Group after the end of the reporting period.
In the case of properties held for sale198F199, if present, cost is represented by the fair value of each asset at the date of acquisition, plus any directly attributable transaction costs, whilst the net realisable value is based on the estimated sale price under normal market conditions, less direct costs to sell.
Long-term contract work is measured using the percentage of completion method, using cost to cost accounting199F200.
Environmental certificates not used in the reporting period are recognised in inventories.
Environmental certificates
Within the Poste Italiane Group, environmental certificates refer to:
\u2022Emission allowances held by the company Poste Air Cargo Srl as an incentive to reduce greenhouse gas emissions200F201 with the aim of achieving an improvement in technologies used in energy production and industrial processes,
\u2022Guarantees of origin and carbon credits held by the company Postepay SpA; the former aimed at certifying the origin from renewable sources of the electricity sold; the latter aimed at fully offsetting CO2 emissions from natural gas consumption.
Emission allowances
The European Emissions Trading System, which works on the basis of the cap and trade principle, has capped annual greenhouse gas emissions at European level. This corresponds to the issue, free of charge, of a set number of emission allowances by the competent national authorities. During the year, depending on the effective volume of greenhouse gas emissions produced with respect to the above cap, each company has the option of selling or purchasing emission allowances on the market.
The issue, free of charge, of emission allowances involves a commitment to produce, in the relevant year, a quantity of greenhouse gas emissions in proportion to the emission allowances received: this commitment, commensurate with the market value of the emission allowances at the time of allocation, is disclosed in the notes to the financial statements. At the end of the year, the commitment is reduced or derecognised in proportion to the greenhouse gas emissions effectively produced and any residual value is reported in the section, \"Additional information\", in the Annual Report.
Guarantees of origin and carbon credits
Guarantees of Origin are certifications attesting to the renewable origin of the sources used by IGO (Guarantee of Origin Plants) classified plants. For each MWh of renewable electricity fed into the grid by IGO-qualified plants, the GSE (Gestore Servizi Energetici) issues a GO certificate to the producer, in accordance with EU Directive 2018/2001. As of 1 January 2013, electricity sales companies are obliged to procure a quantity of GO certificates equal to the electricity sold as renewable. To do this, each company is required, by 31 March of the year following the year in which electricity was supplied to end customers, to cancel a quantity of GOs equal to the electricity sold as renewable.
Carbon credits, on the other hand, represent a negotiable security that allows a company or organisation to offset the carbon dioxide (CO2) emitted in the course of its activities (in the case of Postepay SpA, the CO2 emissions of the gas marketed to end customers), by adhering to environmental sustainability projects aimed at pursuing a path of ecological transition and decarbonisation.
CO2 offsetting takes place through the acquisition of carbon credits for a value equivalent to the CO2 emissions resulting from the gas consumption of the Company's end customers. Each carbon credit represents the offsetting of one tonne of CO2.
The accounting treatment of emission allowances, guarantees of origin and carbon credits to the extent that they are similar, in the absence of specific guidelines in the IAS/IFRS framework, is carried out in accordance with the provisions of the OIC 8 \"Greenhouse Gas Emission Allowances\", as well as with the reference best practice for the main IAS adopters. The purchase and sales of environmental certificates are accounted for in profit or loss in the year in which the transaction occurs. At the end of the year, any surplus deriving from purchases is accounted for in closing inventory at the lower of cost and net realisable value201F202. In the event of a deficit, the resulting charge and related liability are accounted for at the end of the year at market value.
Business Combinations
Business combinations are recognised using the acquisition method. The consideration transferred in a business combination is equal to the sum of the fair values, at the acquisition date, of the assets transferred, the liabilities incurred,
and any interest issued by the acquirer. Costs directly attributable to the transaction are recognised in the Statement of profit or loss.
The amount transferred is allocated by recognising the identifiable assets, liabilities and contingent liabilities of the acquiree at the related fair values at the acquisition date.
Any positive difference between the carrying amount of the asset and its recoverable value is recognised as goodwill and recorded under intangible assets:
\u2022the sum of the consideration transferred, measured at fair value at the acquisition date, the amount of any non-controlling interest, and, in the case of business combinations achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree; and
\u2022the net value of the amounts, at the acquisition date, of the assets acquired and liabilities assumed that are identifiable in the acquiree measured at fair value.
In the event of a negative difference, this surplus represents the profit from a purchase on favourable terms and is recognised in the statement of profit or loss.
If at the time of preparing the financial statements the fair value of the assets, liabilities and contingent liabilities arising from the transaction can only be determined provisionally, the business combination is recognised using these provisional values. Any adjustments resulting from the completion of the valuation process are recognised retrospectively within twelve months of the acquisition date.
In the case of a business combination achieved in stages, the interests previously held in the acquiree are remeasured at fair value at the new acquisition date and any difference (positive or negative) is recognised in the statement of profit or loss or in the statement of comprehensive income if appropriate.
Cash and deposits attributable to BancoPosta
Cash and securities held at post offices, and bank deposits attributable to the operations of BancoPosta RFC, are accounted for separately from cash and cash equivalents as they derive from deposits subject to investment restrictions, or from advances from the Italian Treasury to ensure that post offices can operate. This cash may only be used in settlement of these obligations.
Cash and cash equivalents
Cash and cash equivalents refer to cash in hand, deposits held at call with banks, amounts that at 31 December 2023 the Parent Company has temporarily deposited with the MEF and other highly liquid short-term investments with original maturities of ninety days or less. Current account overdrafts are accounted for in current liabilities.
Non-current assets (or disposal groups) classified as held for sale and discontinued operations
Non-current assets, disposal groups and discontinued operations are measured at the lower of their carrying amount and fair value, less costs to sell.
When it is highly probable that the carrying amount of a non-current asset, or a disposal group, will be recovered, in its present condition, principally through a sale transaction or other form of disposal, rather than through continuing use, and the transaction is likely to take place in the short term, the asset or disposal group is classified as held for sale or as a discontinuing operation in the statement of financial position. The transaction is deemed to be highly probable, when the Parent Company's Board of Directors, or, when so authorised, the board of directors of a subsidiary, has committed to a plan to sell the asset (or disposal group), and an active programme to locate a buyer and complete the plan has been initiated. Sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance.
Equity
Share capital
Share capital is represented by Poste Italiane SpA's subscribed and paid-up capital. Incremental costs directly attributable to the issue of new shares are recognised as a reduction of the share capital, net of any deferred tax effect.
Treasury shares
Treasury shares are recognised at cost and deducted from equity. The effects of any subsequent sales are recognised in equity.
Hybrid bonds
Perpetual subordinated hybrid bonds are classified as an equity instrument in the financial statements, in view of the fact that the issuing Company has the unconditional right to defer repayment of the principal and payment of the coupons until the date of its winding-up or liquidation. Therefore, the amount received from the subscribers of these instruments, net of the related issue costs, is recognised as an increase in Group shareholders' equity; conversely, repayments of principal and payments of coupons due (at the time the related contractual obligation arises) are recognised as a decrease in equity.
Reserves
Reserves include capital and revenue reserves. They include, among others, the BancoPosta ring-fenced capital reserve, representing the dedicated assets attributed to Bancoposta RFC, legally autonomous, the Parent Company's legal reserve, the fair value reserve, relating to items recognised at fair value through equity, and the cash flow hedge reserve, reflecting the effective portion of hedging instruments outstanding at the end of the reporting period and the translation reserve which includes the exchange differences from the translation, in the presentation currency, of the financial statements of the consolidated companies that operate with a non-Euro functional currency.
Retained earnings
This relates to the portion of profit for the period and for previous periods which has not been distributed or taken to reserves or used to cover losses and actuarial gains and losses deriving from the calculation of the liability for employee termination benefits, and transfers from other equity reserves, when they have been released from the restrictions to which they were subjected. In the consolidated financial statements, the item also includes any effects arising from transactions with minority shareholders.
Insurance contracts
The entry into force of the new accounting standard on insurance contracts has led to significant changes in the way insurance assets are determined and valued. For details on the new provisions of IFRS 17 and how Insurance Assets and Liabilities are determined, see Note 2.4 - Changes to accounting policies.
Provisions for risks and charges
Provisions for risks and charges are recorded to cover losses that are either probable or certain to be incurred, for which, however, there is an uncertainty as to the amount or as to the date on which they will occur. Provisions for risks and charges are made when the Group has a present (legal or constructive) obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation. Provisions are measured on the basis of management's best estimate of the use of resources required to settle the obligation. The value of the liability is discounted, where the time effect of money is relevant, at a rate that reflects current market values and takes into account the risks specific to the liability. Provisions are reviewed at each reporting date and are adjusted to reflect the best estimate of the expected charge to meet existing obligations at the reporting date. Any effect of the passage of time and the effect of changes in interest rates are shown in the statement of profit or loss. With regard to the risks for which the occurrence of a liability is only possible, specific information is provided without making any provision. In those rare cases in which disclosure of some or all of the information regarding the risks in question could seriously prejudice the Group's position in a dispute or in ongoing negotiations with third parties, the Group exercises the option granted by the relevant accounting standards to provide limited disclosure.
Employee benefits
The Short-term employee benefits are those that will be fully paid within twelve months of the end of the year in which the employee provided his or her services. Such benefits include wages, salaries, social security contributions, holiday pay and sick pay.
The undiscounted value of short-term employee benefits to be paid to employees in consideration of employment services provided over the relevant period is accrued as personnel expenses.
There are two types of post-employment benefits:
\u2022Defined benefit plans
Defined benefit plans include employee termination benefits due to employees pursuant to Article 2120 of the Italian Civil Code limited to the portions of employee termination benefits accrued in the company up to 31 December 2006, for Group companies with at least 50 employees, as well as the portions of employee termination benefits accrued during the period in the case of Group companies with less than 50 employees, which continue to increase the value of the accumulated liability.
Under these plans, given that the amount of the benefit to be paid is only quantifiable following the termination of employment, the related effects on profit or loss or the financial position are recognised on the basis of actuarial calculations. In particular, the liability to be paid on cessation of employment is calculated using the projected unit credit method and then discounted to recognise the time value of money prior to the liability being settled. The liability recognised in the financial statements is based on calculations performed by independent actuaries. The calculation takes into account accrued employee termination benefits for services already rendered and is based on actuarial assumptions described in Note \"2.6 - Use of Estimates - Employee termination benefits\", to which reference should be made. Actuarial gains and losses at the end of each reporting period, based on the difference between the carrying amount of the liability and the present value of the Group's obligations at the end of the period, due to changes in the actuarial assumptions, are recognised directly in Other comprehensive income.
\u2022Defined contribution plans
Employee termination benefits fall within the scope of defined contribution plans provided the benefits vested subsequent to 1 January 2007 and were paid into a Supplementary Pension Fund or a Treasury Fund at INPS. Contributions to defined contribution plans are recognised in profit or loss when incurred, based on their nominal value.
The Termination benefits payable to employees are recognised as a liability when the entity gives a binding commitment, also on the basis of consolidated relationships and mutual undertakings with union representatives, to terminate the employment of an employee, or group of employees, prior to the normal retirement date or, alternatively, an employee or group of employees accepts an offer of benefits in consideration of a termination of employment. Termination benefits payable to employees are immediately recognised as personnel expenses.
Other long-term employment benefits consist of benefits not payable within twelve months of the end of the reporting period during which the employees provided their services. The net change in the value of any of the components of the liability during the reporting period is recognised in full in profit or loss.
Share-based payments
Share-based payment transactions may be settled in cash, with equity instruments, or with other financial instruments. Goods or services received or acquired through a share-based payment transaction are recognised at their fair value.
In the case of cash-settled share-based payment transactions:
\u25aaa liability is recognised as a matching entry at cost;
\u25aaif the fair value of the goods or services received or acquired cannot be reliably determined, this value must be estimated indirectly on the basis of the fair value of the liability;
\u25aathe fair value of the liability must be remeasured at the end of each reporting period, recognising any changes in fair value in profit or loss for the period.
In the case of equity-settled share-based payment transactions:
\u25aaan increase in shareholders' equity is recorded as a matching entry at cost;
\u25aaif the fair value of the goods or services received or acquired cannot be reliably determined, this value must be estimated indirectly on the basis of the fair value of the equity instruments granted at the grant date.
In the case of employee benefits, the expense is recognised in personnel expenses over the period in which the employee renders the relevant service.
Recognition of revenue from contracts with customers
Revenue is recognised to the extent that reflects the consideration to which the Group expects to be entitled in exchange of those goods and/or services promised to the customer (transaction price).
The main revenue types of the Poste Italiane Group are described below, together with an indication of the time-frame in which the performance obligations202F203 will be met:
\u2022Revenue from mail, parcels and other: refers to services provided to customers through the retail and business channels; revenue generated through the retail channel is recognised at a point in time given the number of transactions handled through the various sales channels (post offices, call centres and on-line) and measured on
the basis of the rates applied; revenue generated through the business channel is generally earned as a result of annual or multi-annual contracts and is recognised over time using the output method determined on the basis of shipments requested and handled. These contracts include elements of variable consideration (primarily volume discounts and penalties linked to the quality of service provided) estimated using the expected value method and recognised as a reduction from revenue.
\u2022Revenue from financial services refers to:
orevenue from placement and brokerage: these are recognised over time and measured on the basis of the volumes placed, quantified on the basis of commercial agreements with financial institutions. In terms of payment for the collection of postal savings, the agreement entered into with Cassa Depositi e Prestiti envisages payment of a variable consideration on achieving certain levels of inflows, determined annually on the basis of the volume of inflows and expected redemptions; certain commercial agreements, entered into with leading financial partners for the placement of financial products, envisage the return of placement fees in the event of early termination or surrender by the customer;
orevenue from current account and related services: these are recognised over time, measured on the basis of the service rendered (including the related services, e.g. bank transfers, securities deposits, etc.) and quantified on the basis of the contract terms and conditions offered to the customer;
orevenue from commissions on payment of bills by payment slip: this is recognised at a point in time given the number of transactions handled by post offices and quantified on the basis of the terms and conditions in the contract of sale.
\u2022Revenue from payments and mobile refers to:
\u2022card payments, collections and payments relating to PostePay primarily to the cards issued by Postepay and debit cards recognised at a point in time when issued and the services linked to them recognised over time as the service is used by the customer. These services include interchange fees recognised by international circuits on payment transactions with cards recognised over time. The item includes commissions for acquiring services rendered to merchants recognised over time due to the use of the service, F23 and F24 proxy acceptance services recognised over time due to the level of service rendered, and PagoPA collection services recognised at a point in time when the service is provided. Services provided by the LIS Group contribute to this item, which mainly include collection and payment services (including pay slip collection services) provided by LIS Pay and recognised at a point in time upon collection, and revenue from the processing of telephone top-ups and network fees and services paid by points of sale to LIS Holding recognised over time due to the use of the service;
omobile and fixed network telephony services, which include: revenue from \u201cstandard TLC service offers\u201d recognised over time based on the output method according to the traffic offer (voice, SMS and data); the revenue relating to the sale of fixed telephony offers recognised over time based on the output method according to the fee charged to the customer; revenue relating to the activation fees for SIMs and fixed telephony offers, recognised at a point in time at the time of service delivery;
oservices related to the supply of electricity and natural gas, the revenue from which is recognised at the time the electricity or gas is supplied to the end customer (over time). With regard to the sale of electricity, the services offered include, in addition to the commodity component, also the transport, metering and system charges components; with regard to the sale of natural gas, these services include, in addition to the commodity component, also the provision of transport services.
For revenue recognition purposes, the principle provides for the identification and quantification of the variable components of the consideration (discounts, rebates, price concessions, incentives, penalties and other similar) to include them to supplement or adjust the transaction price. Among the variable components of the fee, of particular importance are the penalties (to be paid to the customer in the event of failure to achieve pre-established service levels), which are recognised by the Group as a direct decrease in revenue.
Revenue from activities carried out in favour of or on behalf of the state is recognised on the basis of the amount effectively accrued, with reference to the laws and agreements in force, taking account, in any event, of the provisions contained in legislation regarding the public finances. The return on the current account deposits held by the MEF is determined using the effective interest method and is recognised as revenue from financial services. The same classification is applied to income from Eurozone government bonds, in which deposits paid into accounts by private customers and tax credits Law no. 77/2020 are invested.
The Poste Italiane Group disaggregates revenue from contracts with customers by type of good and/or service provided; revenue is therefore disaggregated in line with the operating segments identified within the company. For quantitative details on the distinction between revenue from contracts with customers recognised at a specific time or over time, see section \"4.3 Notes to the statement of profit or loss\".
Government grants
Receivables for Government grants are recognised once they have been formally allocated to the Group by the public entity concerned and only if, based on the information available at the end of the year, there is reasonable assurance that the project to which the grant relates will be effectively carried out and completed in accordance with the conditions attached to the grant. Grants are recognised in profit or loss under Other operating income as follows: operating grants in proportion to the costs actually incurred for the project and accounted for and approved to the public entity; grants related to property, plant and equipment are recognised in proportion to the depreciation charged on the assets acquired and used to carry out the project.
Finance income and costs
Finance income and costs are recognised on an accruals basis based on the effective interest method, i.e. using an interest rate that discounts all cash flows relating to a given transaction in the same way.
Dividends are recognised as finance income when the right to receive payment is established, which generally corresponds with approval of the distribution by the Shareholders Meeting of the investee company. Otherwise, dividends from subsidiaries are accounted for as \"Other operating income\".
Transactions in currencies other than the euro are translated to euro using the exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at closing exchange rates of monetary assets and liabilities denominated in currencies other than the euro are recognised in profit or loss.
Earnings per share
In the Poste Italiane Group's consolidated financial statements, earnings per share is determined as follows:
Basic: basic earnings per share is calculated by dividing the Group's profit for the year by the weighted average number of Poste Italiane SpA's ordinary shares in issue during the period.
Diluted: at the date of preparation of these financial statements no financial instruments have been issued which have potentially dilutive characteristics203F204.
Related parties
Related parties within the Group refer to Poste Italiane SpA's direct and indirect subsidiaries and associates. Related parties external to the Group include the MEF and its direct and indirect subsidiaries and associates. The Group's key management personnel are also classified as related parties, as are funds providing post-employment benefits to the Group's employees and the related entities. The state and public sector entities other than the MEF are not classified as related parties. Related party transactions do not include those deriving from financial assets and liabilities represented by instruments traded on organised markets.
", "dimensions": { "concept": "ext:DisclosureOfMaterialAccountingPolicyInformation", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page564-cflshid_240007-tag141506": { "value": "
Property, plant and equipment
Property, plant and equipment is stated at acquisition or construction cost, less accumulated depreciation and any accumulated impairment losses. Where the condition is met, this cost is increased for charges directly related to the purchase or construction of the asset, including - where identifiable and measurable - that relating to employees involved in the planning and/or preparation for use phase. Interest expense incurred by the Group for loans specifically for the acquisition or construction of property, plant and equipment is capitalised together with the value of the asset; all other interest expense is recognised as finance costs in profit or loss for the year in question. Costs incurred for routine and/or cyclical maintenance and repairs are recognised directly in profit or loss in the related year. The capitalisation of costs attributable to the extension, modernisation or improvement of assets owned by Group companies or held under lease is carried out to the extent that they qualify for separate recognition as an asset or as a component of an asset, applying the component approach, which requires each component with a different estimated useful life and value to be recognised and amortised separately.
The original cost is depreciated on a straight-line basis from the date the asset is available and ready for use, based on the asset's expected useful life. Land is not depreciated
Property and any related fixed plant and machinery located on land held under concession or sub-concession, which is to be returned free of charge to the grantor at the end of the concession term, are accounted for, based on the nature of the asset, within property, plant and equipment and depreciated on a straight-line basis over the shorter of the useful life of the asset and the residual concession term.
At each reporting date, property, plant and equipment is analysed in order to identify the existence of any indicators of impairment (in accordance with IAS 36 - Impairment of Assets; please refer to the treatment of impairment of assets).
Gains and losses deriving from the disposal or retirement of an asset are calculated as the difference between the disposal proceeds and the net carrying amount of the asset retired or sold, and are recognised in profit or loss in the period in which the transaction occurs.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page564-cflshid_240007-tag141507": { "value": "
The Investment property of the Poste Italiane Group relates to land or buildings held with a view to earn rental or lease income or for capital appreciation or both; in both cases such property generates cash flows that are largely independent of other assets. The same accounting treatment is applied to investment property as to property, plant and equipment.
For details of the useful life of the main classes of Property, plant and equipment of the Group, reference should be made to Note 2.6 - Use of estimates.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page564-cflshid_240007-tag141512": { "value": "
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, which is controllable and capable of generating future economic benefits. The initial carrying amount is adjusted for accumulated amortisation, where an amortisation process is envisaged, and for any impairment losses.
In particular, Industrial patents, intellectual property rights, licences and similar rights are initially valued at purchase cost. This cost is increased for charges directly related to the purchase or preparation for use of the asset. Interest expense that the Group may incur for loans specifically for the purchase of industrial patents, intellectual property rights, licenses and similar rights are capitalised together with the value of the asset; all other interest expense is recognised as finance costs in profit or loss for the year. Amortisation starts once the asset is available for use. Amortisation is applied on a
straight-line basis, in order to distribute the purchase cost over the shorter of the expected useful life of the asset and any related contract terms, from the date the entity has the right to use the asset.
Industrial patents, intellectual property rights, licenses and similar rights include costs directly associated with the internal production of unique and identifiable software products. Direct costs include - where identifiable and measurable - the charge related to employees involved in software development. Costs incurred for the maintenance of internally developed software products are charged to profit or loss for the year in question. Amortisation begins when the asset is available for use and extends, systematically and on a straight-line basis, over its estimated useful life. Any research costs are not capitalised.
Among the Group's intangible assets, Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the identifiable assets and liabilities of the company or business acquired, at the date of acquisition. Goodwill attributable to investments accounted for using the equity method is included in the carrying amount of the equity investment. Goodwill is not amortised on a systematic basis, but is tested periodically for impairment in accordance with IAS 36. This test is performed with reference to the cash generating unit (\"CGU\") to which the goodwill is attributable. The method applied in conducting impairment tests and the impact on the accounts of any impairment losses are described in the paragraph, \"Impairment of assets\".
Lastly, it should be noted that following the Purchase Price Allocation activity related to the acquisition of the Net Group, the value of the \"Net Insurance\" brand was recognised among the Group's Intangible assets. Similar to Goodwill, this Brand, considered to have an indefinite useful life, is not subject to systematic amortisation but to the provisions of IAS 36 on impairment.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page564-cflshid_240007-tag141511": { "value": "
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, which is controllable and capable of generating future economic benefits. The initial carrying amount is adjusted for accumulated amortisation, where an amortisation process is envisaged, and for any impairment losses.
In particular, Industrial patents, intellectual property rights, licences and similar rights are initially valued at purchase cost. This cost is increased for charges directly related to the purchase or preparation for use of the asset. Interest expense that the Group may incur for loans specifically for the purchase of industrial patents, intellectual property rights, licenses and similar rights are capitalised together with the value of the asset; all other interest expense is recognised as finance costs in profit or loss for the year. Amortisation starts once the asset is available for use. Amortisation is applied on a
straight-line basis, in order to distribute the purchase cost over the shorter of the expected useful life of the asset and any related contract terms, from the date the entity has the right to use the asset.
Industrial patents, intellectual property rights, licenses and similar rights include costs directly associated with the internal production of unique and identifiable software products. Direct costs include - where identifiable and measurable - the charge related to employees involved in software development. Costs incurred for the maintenance of internally developed software products are charged to profit or loss for the year in question. Amortisation begins when the asset is available for use and extends, systematically and on a straight-line basis, over its estimated useful life. Any research costs are not capitalised.
Among the Group's intangible assets, Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the identifiable assets and liabilities of the company or business acquired, at the date of acquisition. Goodwill attributable to investments accounted for using the equity method is included in the carrying amount of the equity investment. Goodwill is not amortised on a systematic basis, but is tested periodically for impairment in accordance with IAS 36. This test is performed with reference to the cash generating unit (\"CGU\") to which the goodwill is attributable. The method applied in conducting impairment tests and the impact on the accounts of any impairment losses are described in the paragraph, \"Impairment of assets\".
Lastly, it should be noted that following the Purchase Price Allocation activity related to the acquisition of the Net Group, the value of the \"Net Insurance\" brand was recognised among the Group's Intangible assets. Similar to Goodwill, this Brand, considered to have an indefinite useful life, is not subject to systematic amortisation but to the provisions of IAS 36 on impairment.
Business Combinations
Business combinations are recognised using the acquisition method. The consideration transferred in a business combination is equal to the sum of the fair values, at the acquisition date, of the assets transferred, the liabilities incurred,
and any interest issued by the acquirer. Costs directly attributable to the transaction are recognised in the Statement of profit or loss.
The amount transferred is allocated by recognising the identifiable assets, liabilities and contingent liabilities of the acquiree at the related fair values at the acquisition date.
Any positive difference between the carrying amount of the asset and its recoverable value is recognised as goodwill and recorded under intangible assets:
\u2022the sum of the consideration transferred, measured at fair value at the acquisition date, the amount of any non-controlling interest, and, in the case of business combinations achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree; and
\u2022the net value of the amounts, at the acquisition date, of the assets acquired and liabilities assumed that are identifiable in the acquiree measured at fair value.
In the event of a negative difference, this surplus represents the profit from a purchase on favourable terms and is recognised in the statement of profit or loss.
If at the time of preparing the financial statements the fair value of the assets, liabilities and contingent liabilities arising from the transaction can only be determined provisionally, the business combination is recognised using these provisional values. Any adjustments resulting from the completion of the valuation process are recognised retrospectively within twelve months of the acquisition date.
n the case of a business combination achieved in stages, the interests previously held in the acquiree are remeasured at fair value at the new acquisition date and any difference (positive or negative) is recognised in the statement of profit or loss or in the statement of comprehensive income if appropriate.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page564-cflshid_240007-tag141510": { "value": "
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, which is controllable and capable of generating future economic benefits. The initial carrying amount is adjusted for accumulated amortisation, where an amortisation process is envisaged, and for any impairment losses.
In particular, Industrial patents, intellectual property rights, licences and similar rights are initially valued at purchase cost. This cost is increased for charges directly related to the purchase or preparation for use of the asset. Interest expense that the Group may incur for loans specifically for the purchase of industrial patents, intellectual property rights, licenses and similar rights are capitalised together with the value of the asset; all other interest expense is recognised as finance costs in profit or loss for the year. Amortisation starts once the asset is available for use. Amortisation is applied on a
straight-line basis, in order to distribute the purchase cost over the shorter of the expected useful life of the asset and any related contract terms, from the date the entity has the right to use the asset.
Industrial patents, intellectual property rights, licenses and similar rights include costs directly associated with the internal production of unique and identifiable software products. Direct costs include - where identifiable and measurable - the charge related to employees involved in software development. Costs incurred for the maintenance of internally developed software products are charged to profit or loss for the year in question. Amortisation begins when the asset is available for use and extends, systematically and on a straight-line basis, over its estimated useful life. Any research costs are not capitalised.
Among the Group's intangible assets, Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the identifiable assets and liabilities of the company or business acquired, at the date of acquisition. Goodwill attributable to investments accounted for using the equity method is included in the carrying amount of the equity investment. Goodwill is not amortised on a systematic basis, but is tested periodically for impairment in accordance with IAS 36. This test is performed with reference to the cash generating unit (\"CGU\") to which the goodwill is attributable. The method applied in conducting impairment tests and the impact on the accounts of any impairment losses are described in the paragraph, \"Impairment of assets\".
Lastly, it should be noted that following the Purchase Price Allocation activity related to the acquisition of the Net Group, the value of the \"Net Insurance\" brand was recognised among the Group's Intangible assets. Similar to Goodwill, this Brand, considered to have an indefinite useful life, is not subject to systematic amortisation but to the provisions of IAS 36 on impairment.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page564-cflshid_240007-tag141509": { "value": "
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, which is controllable and capable of generating future economic benefits. The initial carrying amount is adjusted for accumulated amortisation, where an amortisation process is envisaged, and for any impairment losses.
In particular, Industrial patents, intellectual property rights, licences and similar rights are initially valued at purchase cost. This cost is increased for charges directly related to the purchase or preparation for use of the asset. Interest expense that the Group may incur for loans specifically for the purchase of industrial patents, intellectual property rights, licenses and similar rights are capitalised together with the value of the asset; all other interest expense is recognised as finance costs in profit or loss for the year. Amortisation starts once the asset is available for use. Amortisation is applied on a
straight-line basis, in order to distribute the purchase cost over the shorter of the expected useful life of the asset and any related contract terms, from the date the entity has the right to use the asset.
Industrial patents, intellectual property rights, licenses and similar rights include costs directly associated with the internal production of unique and identifiable software products. Direct costs include - where identifiable and measurable - the charge related to employees involved in software development. Costs incurred for the maintenance of internally developed software products are charged to profit or loss for the year in question. Amortisation begins when the asset is available for use and extends, systematically and on a straight-line basis, over its estimated useful life. Any research costs are not capitalised.
Among the Group's intangible assets, Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the identifiable assets and liabilities of the company or business acquired, at the date of acquisition. Goodwill attributable to investments accounted for using the equity method is included in the carrying amount of the equity investment. Goodwill is not amortised on a systematic basis, but is tested periodically for impairment in accordance with IAS 36. This test is performed with reference to the cash generating unit (\"CGU\") to which the goodwill is attributable. The method applied in conducting impairment tests and the impact on the accounts of any impairment losses are described in the paragraph, \"Impairment of assets\".
Lastly, it should be noted that following the Purchase Price Allocation activity related to the acquisition of the Net Group, the value of the \"Net Insurance\" brand was recognised among the Group's Intangible assets. Similar to Goodwill, this Brand, considered to have an indefinite useful life, is not subject to systematic amortisation but to the provisions of IAS 36 on impairment", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page565-cflshid_240604-tag141513": { "value": "
Lease arrangements
The Group assesses whether a contract is or contains a lease at the time of its initial recognition; over the life of the contract, the initial assessment is revised only in response to changes in the terms of the contract (specifically, contractual term or lease payments due).
On the contract commencement date, a right to use the leased asset is recorded, equal to the initial value of the corresponding lease liability, plus payments due before or at the same time as the contract commencement date (e.g. agency fees). Subsequently, said right of use is measured less accumulated depreciation and any accumulated impairment losses. Depreciation starts on the commencement date of the lease and extends over the shorter of the lease term and the useful life of the underlying asset. If events or changes in circumstances indicate that the carrying amount of the right of use cannot be recovered, this asset is tested for impairment in accordance with the provisions of IAS 36 - Impairment of Assets.
The lease liability is initially recorded at the present value of the lease instalments not paid on the date the contract commences192F193, discounted using the incremental borrowing rate, defined by loan period and for each Group company. The lease liability is subsequently reduced to reflect the lease payments made and increased to reflect interest on the remaining amount.
The lease liability is restated (resulting in a right-of-use adjustment) in the event of a change in:
\u2022the lease term (for example, in the case of early termination of the contract or an extension of the lease);
\u2022the assessment of a purchase option for the underlying asset; in these cases, lease payments due are reviewed on the basis of the revised lease term and to take account of the change in the amounts payable in view of the purchase option;
\u2022future lease payments deriving from a change in the index or rate used to determine the payments (e.g. ISTAT), or as a result of a renegotiation of the financial conditions.
Only in the case of a significant change in the lease term or in future lease payments does the Group remeasure the remaining lease liability with reference to the incremental borrowing rate at the date of the modification.
The Group avails itself of the option granted by the principle to apply a simplified accounting regime to short-term contracts for some specific asset classes (with a duration of no more than twelve months), to contracts in which the individual underlying asset is of low value (up to \u20ac5,000) and to contracts in which the individual underlying asset is an intangible asset; for these contracts, lease payments are recognised in profit or loss as matching entry to short-term trade payables
Determination of the lease liability
To determine the financial lease liability, the Group has opted to use an incremental borrowing rate (IBR) determined in line with a hypothetical loan obtained in the current economic environment, and applied to contract group with similar
remaining terms and to similar companies. In particular, each IBR takes account of the risk-free rate identified on the basis of factors such as the economic environment, currency, contract term and credit spread reflecting the companies' organisation and financial structure. The IBR associated with the commencement of the contract will be reviewed whenever there is a lease modification, meaning substantial and significant changes to the contract conditions over the life of the agreement (e.g. the lease term or the amount of future lease payments). The IBR table defined for contract group with similar residual duration and for similar reference companies is periodically monitored and updated at least once during the year. With regard instead to determination of the lease term at the commencement date or of the remaining term at a later date (in the event of substantial and significant changes to contract conditions) and, in particular, for property leases, the Group uses a valuation approach based primarily on the expected duration of the obligation as per the agreement between the parties and/or in the legal framework of reference (Law 392 of 27 July 1978), and it expects an extension of the lease due to an interpretation/forecast of events, circumstances and future intentions, including of a strategic nature, of both the lessor and the lessee. This has resulted in a set of rules for determining the lease term, to be applied to leased properties classified previously in three distinct clusters: properties where the lease is subject to legal restrictions and highcommercial-value properties; properties for civilian use, such as the company accommodation for Group employees and executives; and other properties used in operations. The lease term for all of the other agreements was set as equal to the duration of the obligation agreed upon between the parties, in keeping with future intent in wanting and being able to complete the term and past experience.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page566-cflshid_241179-tag141514": { "value": "
Impairment of assets
At the end of each reporting period, property, plant, equipment and intangible assets with finite lives are analysed to assess whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the impairment loss to be recognised in profit or loss. The recoverable amount is the higher of an asset's fair value less costs to sell, and its value in use, represented by the present value of the future cash flows expected to be derived from the asset. In calculating value in use, future cash flow estimates are discounted using a rate that reflects current market assessments of the time value of money, the period of the investment and the risks specific to the asset. The realisable value of assets that do not generate separate cash flows is determined with reference to the cash generating unit (CGU) to which the asset belongs.
Regardless of any impairment indicator, the assets listed below are tested for impairment every year:
\u2022intangible assets with an indefinite useful life or that are not yet available; the impairment test can take place at any time during the year, provided that it is performed at the same time in each of the following years;
\u2022goodwill acquired in a business combination.
An impairment loss is recognised in profit or loss for the amount by which the net carrying amount of the asset, or the CGU to which it belongs, exceeds its recoverable amount. In particular, if the impairment loss regards goodwill and is higher than the related carrying amount, the remaining amount is allocated to the assets included in the CGU to which the goodwill has been allocated, in proportion to their carrying amount193F194. Except in the case of goodwill, if the impairment indicators noonger exist, the carrying amount of the asset or CGU is reinstated and the reversal recognised in profit or loss. The reversal must not exceed the carrying amount that would have been determined had no impairment loss been recognised and depreciation or amortisation been charged.
Impairment and stage allocation for financial instruments
Below are the inputs, assumptions and estimation techniques used to calculate the impairment of financial assets measured at amortised cost and at fair value through other comprehensive income and to determine the stage allocation of financial instruments, the latter not applicable within the Poste Italiane Group for trade receivables in accordance with the Simplified Approach.
General description of the models utilised
The Group uses the general impairment model in accordance with risk ratings estimated on the basis of the type of counterparty:
\u2022Securities/deposits with Sovereign, Banking and Corporate counterparties: internal models for estimating risk parameters;
\u2022Public Administration and Central Counterparties: risk ratings deriving from agency ratings or average default rates for the sector.
The simplified approach is applied to trade receivables, as described in greater detail later.
Significant increase in credit risk
Based on the impairment model adopted by the Poste Italiane Group to meet the requirements of the accounting standard, any significant increase in credit risk associated with the financial instruments held, other than trade receivables, is determined on the basis of a change in the relevant credit rating between the time of the initial investment and the reporting date.
This change in notches is compared with a threshold that takes into account the following factors:
\u2022the rating of the financial instrument at the time of investment;
\u2022the rating of the financial instrument at the reporting date;
\u2022the seniority of the position within the portfolio (vintage factor);
\u2022an additive factor to mitigate the non-linearity of probability of default (\"PD\") with respect to the rating classes206F207;
\u2022a judgemental factor to be used only in the presence of sudden changes in the creditworthiness not yet reflected by the rating207F208.
The ratings used in stage allocation derive from internal models in the case of banking, sovereign and corporate counterparties, and external info providers in the case of Public Administration and Central Counterparties. Based on the above information, the Poste Italiane Group rebuts the presumption that there have been significant increases in credit risk following initial recognition, when financial assets are more than 30 days past due.
The Poste Italiane Group decided not to adopt the Low Credit Risk Exemption and to proceed instead with stage allocation of the financial instruments concerned.
Regarding trade receivables, given the adoption of the simplified approach under the new accounting standard, expected credit losses are determined throughout the lifetime of the instrument.
Definition of default
The Poste Italiane Group defines default on the basis of ad hoc assessments that take into account:
\u2022any payment delays;
\u2022market information such as a default rating by the rating agencies;
\u2022internal analyses of specific exposures.
Collective and individual provisions
The collective impairment of a homogeneous group of financial assets defines the expected credit loss (ECL) of the instrument, even though it cannot be associated with a specific exposure. Grouping takes place in relation to the type of counterparty on the basis of the estimated PD.
Individual provisions are considered only following the review of trade receivables for amounts in excess of a given threshold and only in relation to single receivables.
Forward looking information
According to the standard, the ECL calculation must also factor in forward looking components based on broad consensus scenarios.
The Poste Italiane Group incorporates forward looking information directly in the PD estimation. In particular, for sovereign counterparties, for which authoritative forward-looking estimates208F209 are available, these values are used to calculate PD; for other counterparties, on the other hand, the internal model adopted allows the input dataset needed to calculate PD to be completed from scenario values referring to some of the model variables. The objective of the approach is to estimate the unknown variables by using the historical correlation of the available information209F210.
ESG disclosure
The Sovereign, Bank and Corporate PD estimation models include variables reflecting Social and Governance factors defined from indicators provided by authoritative sources such as the UN and the World Bank. The Environmental factor is negligible for these purposes in view of the 1-year time horizon of the PD itself. In the context of BancoPosta's RFC, this factor is monitored through scenario analyses and verification of ratings provided by external agencies.
Estimation techniques used
Since events of default cannot be used, as they are not very frequent, to develop credit scoring models for Sovereign, Banking and Corporate counterparties, a shadow rating approach has been adopted.
This method entails the use of target variables related to the level of external rating produced by the agencies; the target is identified as the default rate linked to the rating level.
A key rating agency was selected to construct the target, taking into account both the large number of rated counterparties and the availability of historical data over what was deemed to be an adequate period of time.
The models have been constructed by extracting and utilising the following types of data for each country in the sample:
\u2022macroeconomic data;
\u2022market data: domestic equity indices, global energy/non-energy indices, Eurostoxx and S&P 500;
\u2022financial statement data.
The internal model estimate used a definition of default based on a payment delay of 90 days.
ECL measurement
Expected credit losses (ECL) are determined over a time horizon consistent with the stage level (12 months or lifetime) on the basis of the following factors:
\u2022Probability of Default (PD);
\u2022Loss Given Default (LGD);
\u2022Exposure at Default (EAD);
\u2022Time Factor (TF).
The main assumptions/choices adopted in the determination of the factors are as follows:
\u2022PD: as indicated from the start, a Point in Time (PIT) and forward-looking evaluation has been adopted;
\u2022LGD: values have been used consistent with the Internal Ratings-Based (IRB) Base Approach under the Basel guidelines (45% for senior risk assets, 75% for subordinated risk assets);
\u2022EAD: exposure calculated prospectively until maturity of the instrument, starting from the development of projected cash flows. In the development account was taken of specific indexation assumptions for every asset class (fixed-rate securities, variable-rate securities, inflation-indexed securities, etc.);
\u2022TF: the effective interest rate of each exposure was used as discount factor.
The assumptions adopted and set out above have led to an increase in the PD of Italy and other Sovereign counterparties in general compared to that used in the assessments in the Annual Report at 31 December 2022.
Trade receivables
The Group adopts the simplified approach to test for the impairment of trade receivables, on the basis of which provisions for credit losses are determined for an amount equal to expected losses throughout the lifetime of the receivable. Such approach is implemented through the following process:
\u2022based on total revenue or the historical credit exposure, all receivables or credit exposures exceeding a certain pre-established credit threshold are assessed analytically. The analytical evaluation of the exposures entails an analysis of the borrower's credit quality and solvency, as determined on the basis of internal and external supporting evidence;
\u2022for receivables falling below the threshold set, through the preparation of a matrix with the different impairment percentages estimated on the basis of historical losses, where they exist, or alternatively on the historical pattern of collections. In constructing the impairment matrix, receivables are grouped by homogeneous categories, based on their characteristics, to take into account the historical loss experience.
Collateral held and other credit risk mitigation instruments on trade receivables
To mitigate the risks arising from the extension of credit terms to its customers, the Group has implemented a policy and suitable guidelines that govern the management of trade receivables, the terms and conditions of payment applicable to customers and defines the corporate process aimed at checking the customer's creditworthiness, as well as the sustainability of the business risk inherent in the contract involving extended payment terms. Depending on the evaluations, the contracts entered into with customers may require a suitable guarantee. Guarantees are also requested if they are required by rules and regulations and/or implementing rules of specific services.
The Poste Italiane Group accepts mainly guarantees issued by primary banks or insurance companies. Alternatively, upon request of the customer and after a risk analysis, it accepts sureties issued by other institutions or security deposits through the opening of a postal escrow account. The Poste Italiane Group, as a rule, exempts the Public Administration from the provision of guarantees to secure trade receivables arising from transactions with it, save for the cases when such guarantees are mandatory by law or due to implementing rules of specific services.
For all the exposures evaluated individually, to calculate the provisions for doubtful debts, guarantees reduce the amount of the exposure at risk.
At 31 December 2023, the Group does not hold trade receivables secured by collateral or other risk mitigation instruments for which no loss provisions have been made.
Impairment tests of goodwill, cash generating units and equity investments
Goodwill and other non-current assets are tested for impairment in accordance with IAS 36 \u2013 Impairment of Assets. Impairment testing involves the use of estimates based on factors that may change over time, potentially resulting in effects that may be significantly different from prior year estimates.
In accordance with the relevant accounting standard, when it is not possible to estimate the recoverable amount of an individual asset, the Group identifies the smallest group of assets that generates cash inflows that are largely independent of those from other assets or groups of assets (Cash Generating Units - CGUs). The process of identifying such CGUs necessarily involves management's judgement as to the specific nature of the assets and business to which they belong and evidence that the cash inflows from the group of assets are closely interdependent and largely independent of those from other assets (or groups of assets). The number and scope of CGUs are systematically updated to reflect the effects of new aggregation and reorganisation operations carried out by the Group, as well as to take into account those external factors that could affect the ability of assets to generate independent cash inflows.
For the most significant impairment tests performed at 31 December 2023, the carrying amounts tested and the main assumptions underlying the tests performed are shown below:
Amount
(\u20acm)
Method used
Explicit forecast period
Growth rate
Discount rate
Goodwill of the Mail, Parcels and Distribution CGU
213
DCF
2024-2028
2.0%
7.48% (WACC)
Goodwill of the Payments and Mobile CGU
459
DCF
2024-2028
2.0%
9.54% (WACC)
Goodwill of the NET Insurance (Insurance) CGU
124
DDM
2024-2028
2.0%
9.31% (Ke)
Investment in Anima Holding SpA
219
DDM
2024-2026
2.0%
9.65% (Ke)
DCF: Discounted Cash Flow; DDM: Dividend Discount Model; WACC: Weighted Average Cost of Capital; Ke: cost of own capital
It should be noted that the discount rates at 31 December 2023 are up from those used for the previous year's estimates. Specifically, the increases amounted to 129 basis points for the Mail, Parcels and Distribution CGU, 90 basis points for the Payments and Mobile CGU, and 131 basis points for the investment in Anima Holding.
With reference to the external quantitative indicators of impairment at Group level, it should be noted that, at 31 December 2023, market capitalisation was higher than book equity, whereas with regard to internal source elements, it should be noted that consolidated results at December 2023 were above budget forecasts for the same period.
Mail, Parcels and Distribution CGU
The impairment test of the Mail, Parcels and Distribution CGU was performed, consistent with the previous year, at the consolidated level, including the companies within the same operating segment; the activities performed by the different companies and the resulting cash flows are highly interdependent, as commercial and strategic management decisions are made centrally at the level of the entire segment.
The value in use of the CGU was estimated on the basis of the 2024-2028 strategic plan approved by Poste Italiane SpA's Board of Directors on 19 March 2024. The economic forecasts used in the execution of the test also include, among the various characterising elements, forecasts for the planned investments that will be focused on achieving the CGU's automation and modernisation objectives, in continuity with what was achieved in 2023. Special importance is attached to investments classified as ESG, i.e. that comply with the reference principles of the Group's 8 Sustainability Pillars. Among the CGU's main investment projects are the Polis Project \"Homes of Digital Citizenship Services\", energy efficiency measures for real estate, and the automation and evolution of the sorting and delivery network from a green perspective.
In determining the terminal value, calculated on the basis of the last year of explicit forecasts, income was normalised. Reference was also made to the transfer prices that BancoPosta RFC is expected to pay for the services provided by Poste Italiane's distribution network.
The impairment test determined that the related carrying amounts are fair.
The impairment test is based on estimates and assumptions that present elements of uncertainty, also due to the current context characterised by significant volatility of the main market factors and significant uncertainty with regard to economic expectations, as well as the continuation of negative economic results and the decline of the postal market in which the Group operates; for this reason, sensitivity analyses were carried out. In particular, the impairment test showed the recoverability of the goodwill allocated to the CGU even by increasing the indicated discount rate by 100 basis points and jointly reducing the long-term growth factor by 20 basis points.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net invested capital of the CGU with a discount rate of 9.11%.
As in the past, in determining the value of properties used as post offices and sorting centres, Poste Italiane SpA's universal service obligation was taken into account, as was the inseparability of the cash flows generated from the properties that
provide this service, (which the Parent Company is required to operate throughout the country regardless of the expected profitability of each location); the unique nature of the operating processes involved and the substantial overlap between postal and financial activities within the same outlets, represented by post offices, were also considered. On this basis, the value in use of the Land and Buildings used in operations is relatively unaffected by changes in the commercial value of the properties concerned and, in certain critical market conditions, certain properties may have values that are significantly higher than their mere market value, without this having any impact on the cash flows or profitability of the Mail, Parcels and Distribution segment.
The fair value of the Parent Company's properties used in operations continued to be higher than their carrying amount, as confirmed by the property valuations carried out.
Payments and Mobile CGU
In performing the impairment test on the goodwill arising from the acquisition of the LIS Group, which took place in 2022, reference was made to the CGU comprising all the companies belonging to the Payments and Mobile segment as the only cash flow generator.
Following the completion of the LIS integration and reorganisation processes, in fact, the Payments and Mobile operating segment is based on single and integrated market and operational processes according to a unified approach. Consequently, the cash flows are largely independent of those generated by the other operating segments of the Poste Group, but closely interrelated within the segment. Therefore, LIS is no longer identifiable as a separate CGU (as determined for 31 December 2022).
In order to estimate the value in use of the CGU, reference was made to the 2024-2028 Strategic Plan approved by the Poste Italiane SpA's Board of Directors on 19 March 2024, as well as by the Boards of Directors of the respective companies belonging to the CGU for the portion pertaining to them. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses show the passing of the test by a wide margin even in scenarios significantly worse than the one used for the impairment test.
It should be noted that even if the impairment test were performed consistently with 31 December 2022 (CGU comprised of LIS Holding and LIS Pay), there would be no need to make impairment losses to the goodwill recognised in the financial statements.
Net Insurance (Insurance) CGU
Following the purchase of Net Insurance by Poste Vita through the corporate vehicle Net Holding in 2023 and the associated Purchase Price Allocation process, details of which are provided in Note 2.8 - Basis of consolidation, goodwill of \u20ac124 million emerged, equal to the remaining difference between the consideration transferred for the acquisition of Net Insurance by Net Holding and the fair value of the adjusted net assets acquired.
In performing the impairment test relating to the Net Insurance Group, reference was made to the CGU consisting of Net Insurance and Net Insurance Life as the cash generating unit.
To estimate the value in use of the CGU, reference was made to the 2024 -2028 Strategic Plan. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net assets of the CGU with a discount rate of 12.6%.
Investment in Anima Holding SpA
With reference to the impairment test on the investment in Anima Holding SpA, the future cash flows used in determining the value in use are those observable as consensus for the main balance sheet indicators (Revenue, Profit (loss) before tax and Net Profit) estimated by analysts for the next three years and available periodically on the company's website. At 31 December 2023, there was no need for impairment adjustments.
Other equity investments in associates
With reference to the impairment tests of the equity investments in the other associates Sennder, Financit, Replica Sim and Eurizon Capital Real Asset, no impairment adjustments were found to be necessary at 31 December 2023.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page566-cflshid_241179-tag141519": { "value": "
Investments
In the Poste Italiane Group's consolidated financial statements, investments in companies over which the Group exerts significant influence, (\"associates\") and in joint ventures, are accounted for using the equity method. Certain particularly insignificant investments in subsidiaries (individually and in aggregate) are also valued using the equity method. See note 2.8 \u2013 Basis of consolidation.
In Poste Italiane SpA's separate financial statements, investments in subsidiaries and associates are accounted for at cost (including any directly attributable incidental expenses), after adjustment for any impairments. Investments in subsidiaries
and associates are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment losses (or subsequent reversals of impairment losses) are recognised in the same way and to the same extent described with regard to property, plant and equipment and intangible assets in the paragraph, \"Impairment of assets\".", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page566-cflshid_241179-tag141518": { "value": "
Investments
In the Poste Italiane Group's consolidated financial statements, investments in companies over which the Group exerts significant influence, (\"associates\") and in joint ventures, are accounted for using the equity method. Certain particularly insignificant investments in subsidiaries (individually and in aggregate) are also valued using the equity method. See note 2.8 \u2013 Basis of consolidation.
In Poste Italiane SpA's separate financial statements, investments in subsidiaries and associates are accounted for at cost (including any directly attributable incidental expenses), after adjustment for any impairments. Investments in subsidiaries
and associates are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment losses (or subsequent reversals of impairment losses) are recognised in the same way and to the same extent described with regard to property, plant and equipment and intangible assets in the paragraph, \"Impairment of assets\".", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page566-cflshid_241179-tag141517": { "value": "
Investments
In the Poste Italiane Group's consolidated financial statements, investments in companies over which the Group exerts significant influence, (\"associates\") and in joint ventures, are accounted for using the equity method. Certain particularly insignificant investments in subsidiaries (individually and in aggregate) are also valued using the equity method. See note 2.8 \u2013 Basis of consolidation.
In Poste Italiane SpA's separate financial statements, investments in subsidiaries and associates are accounted for at cost (including any directly attributable incidental expenses), after adjustment for any impairments. Investments in subsidiaries
and associates are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment losses (or subsequent reversals of impairment losses) are recognised in the same way and to the same extent described with regard to property, plant and equipment and intangible assets in the paragraph, \"Impairment of assets\".", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page566-cflshid_241179-tag141516": { "value": "
Investments
In the Poste Italiane Group's consolidated financial statements, investments in companies over which the Group exerts significant influence, (\"associates\") and in joint ventures, are accounted for using the equity method. Certain particularly insignificant investments in subsidiaries (individually and in aggregate) are also valued using the equity method. See note 2.8 \u2013 Basis of consolidation.
In Poste Italiane SpA's separate financial statements, investments in subsidiaries and associates are accounted for at cost (including any directly attributable incidental expenses), after adjustment for any impairments. Investments in subsidiaries
and associates are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment losses (or subsequent reversals of impairment losses) are recognised in the same way and to the same extent described with regard to property, plant and equipment and intangible assets in the paragraph, \"Impairment of assets\".", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page567-cflshid_241764-tag141523": { "value": "
Financial instruments
On initial recognition, financial assets and liabilities are classified at fair value based on the business purpose for which they were acquired. The purchase and sale of financial instruments is recognised by category, either on the date on which the Group commits to purchase or sell the asset (the transaction date), or, in the case of insurance transactions and BancoPosta's operations, at the settlement date194F195. Any changes in fair value between the transaction date and the settlement date are recognised in the financial statements.
On the other hand, trade receivables are recognised at their transaction price, in accordance with IFRS 15 - Revenue from Contracts with Customers.
On initial recognition, financial assets are classified in one of the following categories, based on the business model adopted to manage them and the characteristics of their contractual cash flows:
\u2022Financial assets measured at amortised cost
This category reflects financial assets held to collect the contractual cash flows (the held to collect or HTC business model) representing solely payments of principal and interest (SPPI). These assets are measured at amortised cost, that is the value assigned to the financial asset or liability on initial recognition, net of any principal reimbursement, plus or minus the cumulative amortisation by using the effective interest rate method on the difference between the initial value and the value at maturity, after deducting any impairment. The business model on which the classification of financial assets is based permits the sale of such assets; if the sales are not occasional, and are not immaterial in terms of value, consistency with the HTC business model should be assessed.
\u2022Financial assets measured at fair value through other comprehensive income (FVTOCI)
This category includes financial assets held both to collect the relevant contractual cash flows and for sale (the held to collect and sell or HTC&S business model), with the contractual cash flows representing solely payments of principal and interest.
These financial assets are measured at fair value and, until they are derecognised or reclassified, gains or losses from valuation are recognised in other comprehensive income. Exceptions to this are gains and losses due to impairment and foreign exchange gains and losses recognised in the profit or loss in the year in question. If the financial asset is derecognised, the accumulated gains/(losses) recognised in OCI are recycled to profit or loss.
This category also includes equity instruments that would otherwise be recognised through profit or loss, for which the irrevocable election was made to recognise changes in fair value through OCI (the FVTOCI option). This option entails the recognition of solely dividends through profit or loss.
\u2022Financial assets measured at fair value through profit or loss
This category includes: (a) financial assets primarily held for trading; (b) those that qualify for designation at fair value through profit or loss, exercising the fair value option; (c) financial assets that must be recognised at fair value through profit or loss; (d) derivative instruments, with the exception of the effective portion of those designated as cash flow hedges. Financial assets belonging to the category in question are measured at fair value and the related changes are recognised in profit or loss. Derivative instruments at fair value through profit or loss are recognised as assets or liabilities depending on whether the fair value is positive or negative.; positive and negative fair values deriving from transactions with the same counterparty are offset during the collateralisation phase, where contractually provided for.
The classification as \"current\" or \"non-current\" of financial assets measured at amortised cost and financial assets measured at fair value through other comprehensive income depends on the contractual maturity of the instrument, since current assets are those whose realisation is expected within twelve months of the reporting date. Financial assets measured at fair value through profit or loss are, on the other hand, classified as \"current\" if held for trading and are expected to be sold within twelve months of the reporting date.
An expected credit loss (ECL) provision must be made for financial assets recognised at amortised cost and financial assets at fair value through OCI, as follows: (i) specific provisions for doubtful debts are made for expected losses on financial assets measured at amortised cost; (ii) expected losses on financial assets measured at fair value through other comprehensive income are recognised in profit or loss, with a contra entry in the fair value reserve in equity. The method utilised is the \"General impairment model\", whereby:
\u2022If on the reporting date the credit risk of a financial instrument has not increased significantly since initial recognition, a 12-month ECL is recognised (stage 1). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If on the reporting date the credit risk of the financial instrument has increased significantly since initial recognition, a lifetime ECL is recognised (stage 2). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If a financial instrument is already impaired on initial recognition or shows objective evidence of impairment at the reporting date, lifetime expected losses are recognised. Interest is recognised at amortised cost (stage 3), i.e. on the basis of the exposure value - determined using the effective interest rate - adjusted for expected losses.
Detailed information on the inputs, assumptions and techniques for determining expected losses on financial assets is provided in Note 2.6 - Use of Estimates, to which reference is made for a full discussion.
Financial assets are derecognised when there is no longer a contractual right to receive cash flows from the investment or when all the related risks and rewards and control have been substantially transferred. If the substantial transfer of risks and rewards cannot be ascertained, financial assets are derecognised if no control is retained over them. Finally, transferred assets are derecognised if the contractual right to receive the cash flows of the assets is retained, but at the same time a contractual obligation is assumed to pay these flows to a third party, without delay and only to the extent of those received.
In addition, for impaired financial assets, derecognition may take place following the write-off of the same, following the acknowledgement that there is no reasonable expectation of recovery (e.g. prescription).
Financial liabilities, including loans, trade payables and other payment obligations, are measured at amortised cost using the effective interest method. If there is a change in the expected cash flows and they can be reliably estimated, the value of borrowings is recalculated to reflect the change on the basis of the present value of estimated future cash flows and the internal rate of return initially applied. Financial liabilities are classified as current liabilities, unless there is an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.
When required by the applicable IFRS (e.g. in the case of derivative liabilities), or when the irrevocable fair value option is exercised, financial liabilities are recognised at fair value through profit or loss. In this case, changes in fair value attributable to changes in own credit risk are recognised directly in equity, unless this treatment creates or enhances an accounting asymmetry, whereby the residual amount of the changes in the fair value of liabilities is recognised through profit or loss.
Financial liabilities are derecognised when they are extinguished or when the obligation specified in the contract expires, is cancelled or discharged.
For hedge accounting transactions, the Poste Italiane Group has elected to use the option made available by IFRS 9 and has retained the accounting treatments provided for by IAS 39. In accordance with this standard, derivatives are initially recognised at fair value on the date the derivative contract is executed and if they do not qualify for hedge accounting treatment, gains and losses arising from changes in fair value are accounted for in profit or loss for the period.
If, on the other hand, derivative financial instruments qualify for hedge accounting, gains and losses arising from changes in fair value after initial recognition are accounted for in accordance with IAS 39 \u2013 Financial Instruments: Recognition and Measurement, as described below.
The relationship between each hedging instrument and the hedged item is documented, as well as the risk management objective, the strategy for undertaking the hedge transaction and the methods used to assess effectiveness. Assessment of whether the hedging derivative is effective takes place both at designation of each derivative instrument as hedging instrument, and during its life.
\u2022Fair value hedges195F196
When the hedge is related to recognised assets or liabilities, or an unrecognised firm commitment, the changes in fair value of both the hedging instrument and the hedged item are recognised in profit or loss. When the hedging transaction is not fully effective, resulting in differences between the above changes, the ineffective portion represents a loss or gain recognised separately in profit or loss for the period.
Macro hedges are deemed highly effective if, at their inception and throughout the term of the hedge, changes in the fair value of the hedged cash amount are offset by changes in the fair value of the hedges, and if the effective results fall within the interval required by the reference standard.
\u2022Cash flow hedges196F197
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges after initial recognition is recognised in a specific equity reserve, with movements in the reserve accounted for in \"Other comprehensive income\" (the \"Cash flow hedge reserve\"). A hedging transaction is generally considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. If the hedging transaction is not fully effective, the gain or loss arising from a change in fair value relating to the ineffective portion is recognised in profit or loss for the period.
Amounts accumulated in equity are recycled to profit or loss in the period in which the hedged item affects profit or loss. In particular, in the case of hedges associated with a highly probable forecast transaction (such as the purchase of fixed income debt securities), the reserve is reclassified to profit or loss in the period or in the periods in which the asset or liability, subsequently accounted for and connected to the aforementioned transaction, will affect profit or loss (for example, an adjustment to the return on the security).
If, during the life of the derivative, the forecast hedged transaction is no longer expected to occur, the related gains and losses accumulated in the cash flow hedge reserve are immediately reclassified to profit or loss for the period. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the related gains and losses accumulated in the cash flow hedge reserve at that time remain in equity and are recognised in profit or loss at the same time as the original underlying.Embedded derivatives
An embedded derivative is a derivative included in a combined contract or hybrid instrument, also containing a non-derivative contract or host contract, which originates all or part of the cash flows of the combined contract. Embedded derivatives are separated from the host contract and recognised as a derivative when:
\u2022the host contract is not a financial instrument measured at fair value through profit or loss;
\u2022the economic risks and characteristics of the embedded derivative are not closely related to those of the host contract;
\u2022a separate contract with the same terms as the embedded derivative would meet the definition of a derivative.
Within the Group, contracts that may contain embedded derivatives are:
\u2022contracts for the purchase of non-financial items entered into by Postepay SpA with clauses or options that influence the contract price, for which, however, embedded derivatives are not separable from the host contract;
\u2022convertible bonds held by Poste Italiane SpA and Postepay SpA, for which the embedded derivative component is not separated as the host contract is a financial instrument measured at fair value through profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page567-cflshid_241764-tag141521": { "value": "
Financial instruments
On initial recognition, financial assets and liabilities are classified at fair value based on the business purpose for which they were acquired. The purchase and sale of financial instruments is recognised by category, either on the date on which the Group commits to purchase or sell the asset (the transaction date), or, in the case of insurance transactions and BancoPosta's operations, at the settlement date194F195. Any changes in fair value between the transaction date and the settlement date are recognised in the financial statements.
On the other hand, trade receivables are recognised at their transaction price, in accordance with IFRS 15 - Revenue from Contracts with Customers.
On initial recognition, financial assets are classified in one of the following categories, based on the business model adopted to manage them and the characteristics of their contractual cash flows:
\u2022Financial assets measured at amortised cost
This category reflects financial assets held to collect the contractual cash flows (the held to collect or HTC business model) representing solely payments of principal and interest (SPPI). These assets are measured at amortised cost, that is the value assigned to the financial asset or liability on initial recognition, net of any principal reimbursement, plus or minus the cumulative amortisation by using the effective interest rate method on the difference between the initial value and the value at maturity, after deducting any impairment. The business model on which the classification of financial assets is based permits the sale of such assets; if the sales are not occasional, and are not immaterial in terms of value, consistency with the HTC business model should be assessed.
\u2022Financial assets measured at fair value through other comprehensive income (FVTOCI)
This category includes financial assets held both to collect the relevant contractual cash flows and for sale (the held to collect and sell or HTC&S business model), with the contractual cash flows representing solely payments of principal and interest.
These financial assets are measured at fair value and, until they are derecognised or reclassified, gains or losses from valuation are recognised in other comprehensive income. Exceptions to this are gains and losses due to impairment and foreign exchange gains and losses recognised in the profit or loss in the year in question. If the financial asset is derecognised, the accumulated gains/(losses) recognised in OCI are recycled to profit or loss.
This category also includes equity instruments that would otherwise be recognised through profit or loss, for which the irrevocable election was made to recognise changes in fair value through OCI (the FVTOCI option). This option entails the recognition of solely dividends through profit or loss.
\u2022Financial assets measured at fair value through profit or loss
This category includes: (a) financial assets primarily held for trading; (b) those that qualify for designation at fair value through profit or loss, exercising the fair value option; (c) financial assets that must be recognised at fair value through profit or loss; (d) derivative instruments, with the exception of the effective portion of those designated as cash flow hedges. Financial assets belonging to the category in question are measured at fair value and the related changes are recognised in profit or loss. Derivative instruments at fair value through profit or loss are recognised as assets or liabilities depending on whether the fair value is positive or negative.; positive and negative fair values deriving from transactions with the same counterparty are offset during the collateralisation phase, where contractually provided for.
The classification as \"current\" or \"non-current\" of financial assets measured at amortised cost and financial assets measured at fair value through other comprehensive income depends on the contractual maturity of the instrument, since current assets are those whose realisation is expected within twelve months of the reporting date. Financial assets measured at fair value through profit or loss are, on the other hand, classified as \"current\" if held for trading and are expected to be sold within twelve months of the reporting date.
An expected credit loss (ECL) provision must be made for financial assets recognised at amortised cost and financial assets at fair value through OCI, as follows: (i) specific provisions for doubtful debts are made for expected losses on financial assets measured at amortised cost; (ii) expected losses on financial assets measured at fair value through other comprehensive income are recognised in profit or loss, with a contra entry in the fair value reserve in equity. The method utilised is the \"General impairment model\", whereby:
\u2022If on the reporting date the credit risk of a financial instrument has not increased significantly since initial recognition, a 12-month ECL is recognised (stage 1). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If on the reporting date the credit risk of the financial instrument has increased significantly since initial recognition, a lifetime ECL is recognised (stage 2). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If a financial instrument is already impaired on initial recognition or shows objective evidence of impairment at the reporting date, lifetime expected losses are recognised. Interest is recognised at amortised cost (stage 3), i.e. on the basis of the exposure value - determined using the effective interest rate - adjusted for expected losses.
Detailed information on the inputs, assumptions and techniques for determining expected losses on financial assets is provided in Note 2.6 - Use of Estimates, to which reference is made for a full discussion.
Financial assets are derecognised when there is no longer a contractual right to receive cash flows from the investment or when all the related risks and rewards and control have been substantially transferred. If the substantial transfer of risks and rewards cannot be ascertained, financial assets are derecognised if no control is retained over them. Finally, transferred assets are derecognised if the contractual right to receive the cash flows of the assets is retained, but at the same time a contractual obligation is assumed to pay these flows to a third party, without delay and only to the extent of those received.
In addition, for impaired financial assets, derecognition may take place following the write-off of the same, following the acknowledgement that there is no reasonable expectation of recovery (e.g. prescription).
Financial liabilities, including loans, trade payables and other payment obligations, are measured at amortised cost using the effective interest method. If there is a change in the expected cash flows and they can be reliably estimated, the value of borrowings is recalculated to reflect the change on the basis of the present value of estimated future cash flows and the internal rate of return initially applied. Financial liabilities are classified as current liabilities, unless there is an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.
When required by the applicable IFRS (e.g. in the case of derivative liabilities), or when the irrevocable fair value option is exercised, financial liabilities are recognised at fair value through profit or loss. In this case, changes in fair value attributable to changes in own credit risk are recognised directly in equity, unless this treatment creates or enhances an accounting asymmetry, whereby the residual amount of the changes in the fair value of liabilities is recognised through profit or loss.
Financial liabilities are derecognised when they are extinguished or when the obligation specified in the contract expires, is cancelled or discharged.
For hedge accounting transactions, the Poste Italiane Group has elected to use the option made available by IFRS 9 and has retained the accounting treatments provided for by IAS 39. In accordance with this standard, derivatives are initially recognised at fair value on the date the derivative contract is executed and if they do not qualify for hedge accounting treatment, gains and losses arising from changes in fair value are accounted for in profit or loss for the period.
If, on the other hand, derivative financial instruments qualify for hedge accounting, gains and losses arising from changes in fair value after initial recognition are accounted for in accordance with IAS 39 \u2013 Financial Instruments: Recognition and Measurement, as described below.
The relationship between each hedging instrument and the hedged item is documented, as well as the risk management objective, the strategy for undertaking the hedge transaction and the methods used to assess effectiveness. Assessment of whether the hedging derivative is effective takes place both at designation of each derivative instrument as hedging instrument, and during its life.
\u2022Fair value hedges195F196
When the hedge is related to recognised assets or liabilities, or an unrecognised firm commitment, the changes in fair value of both the hedging instrument and the hedged item are recognised in profit or loss. When the hedging transaction is not fully effective, resulting in differences between the above changes, the ineffective portion represents a loss or gain recognised separately in profit or loss for the period.
Macro hedges are deemed highly effective if, at their inception and throughout the term of the hedge, changes in the fair value of the hedged cash amount are offset by changes in the fair value of the hedges, and if the effective results fall within the interval required by the reference standard.
\u2022Cash flow hedges196F197
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges after initial recognition is recognised in a specific equity reserve, with movements in the reserve accounted for in \"Other comprehensive income\" (the \"Cash flow hedge reserve\"). A hedging transaction is generally considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. If the hedging transaction is not fully effective, the gain or loss arising from a change in fair value relating to the ineffective portion is recognised in profit or loss for the period.
Amounts accumulated in equity are recycled to profit or loss in the period in which the hedged item affects profit or loss. In particular, in the case of hedges associated with a highly probable forecast transaction (such as the purchase of fixed income debt securities), the reserve is reclassified to profit or loss in the period or in the periods in which the asset or liability, subsequently accounted for and connected to the aforementioned transaction, will affect profit or loss (for example, an adjustment to the return on the security).
If, during the life of the derivative, the forecast hedged transaction is no longer expected to occur, the related gains and losses accumulated in the cash flow hedge reserve are immediately reclassified to profit or loss for the period. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the related gains and losses accumulated in the cash flow hedge reserve at that time remain in equity and are recognised in profit or loss at the same time as the original underlying.
Embedded derivatives
An embedded derivative is a derivative included in a combined contract or hybrid instrument, also containing a non-derivative contract or host contract, which originates all or part of the cash flows of the combined contract. Embedded derivatives are separated from the host contract and recognised as a derivative when:
\u2022the host contract is not a financial instrument measured at fair value through profit or loss;
\u2022the economic risks and characteristics of the embedded derivative are not closely related to those of the host contract;
\u2022a separate contract with the same terms as the embedded derivative would meet the definition of a derivative.
Within the Group, contracts that may contain embedded derivatives are:
\u2022contracts for the purchase of non-financial items entered into by Postepay SpA with clauses or options that influence the contract price, for which, however, embedded derivatives are not separable from the host contract;
\u2022convertible bonds held by Poste Italiane SpA and Postepay SpA, for which the embedded derivative component is not separated as the host contract is a financial instrument measured at fair value through profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page567-cflshid_241764-tag141522": { "value": "
Financial instruments
On initial recognition, financial assets and liabilities are classified at fair value based on the business purpose for which they were acquired. The purchase and sale of financial instruments is recognised by category, either on the date on which the Group commits to purchase or sell the asset (the transaction date), or, in the case of insurance transactions and BancoPosta's operations, at the settlement date194F195. Any changes in fair value between the transaction date and the settlement date are recognised in the financial statements.
On the other hand, trade receivables are recognised at their transaction price, in accordance with IFRS 15 - Revenue from Contracts with Customers.
On initial recognition, financial assets are classified in one of the following categories, based on the business model adopted to manage them and the characteristics of their contractual cash flows:
\u2022Financial assets measured at amortised cost
This category reflects financial assets held to collect the contractual cash flows (the held to collect or HTC business model) representing solely payments of principal and interest (SPPI). These assets are measured at amortised cost, that is the value assigned to the financial asset or liability on initial recognition, net of any principal reimbursement, plus or minus the cumulative amortisation by using the effective interest rate method on the difference between the initial value and the value at maturity, after deducting any impairment. The business model on which the classification of financial assets is based permits the sale of such assets; if the sales are not occasional, and are not immaterial in terms of value, consistency with the HTC business model should be assessed.
Financial assets measured at fair value through other comprehensive income (FVTOCI)
This category includes financial assets held both to collect the relevant contractual cash flows and for sale (the held to collect and sell or HTC&S business model), with the contractual cash flows representing solely payments of principal and interest.
These financial assets are measured at fair value and, until they are derecognised or reclassified, gains or losses from valuation are recognised in other comprehensive income. Exceptions to this are gains and losses due to impairment and foreign exchange gains and losses recognised in the profit or loss in the year in question. If the financial asset is derecognised, the accumulated gains/(losses) recognised in OCI are recycled to profit or loss.
This category also includes equity instruments that would otherwise be recognised through profit or loss, for which the irrevocable election was made to recognise changes in fair value through OCI (the FVTOCI option). This option entails the recognition of solely dividends through profit or loss.
\u2022Financial assets measured at fair value through profit or loss
This category includes: (a) financial assets primarily held for trading; (b) those that qualify for designation at fair value through profit or loss, exercising the fair value option; (c) financial assets that must be recognised at fair value through profit or loss; (d) derivative instruments, with the exception of the effective portion of those designated as cash flow hedges. Financial assets belonging to the category in question are measured at fair value and the related changes are recognised in profit or loss. Derivative instruments at fair value through profit or loss are recognised as assets or liabilities depending on whether the fair value is positive or negative.; positive and negative fair values deriving from transactions with the same counterparty are offset during the collateralisation phase, where contractually provided for.
The classification as \"current\" or \"non-current\" of financial assets measured at amortised cost and financial assets measured at fair value through other comprehensive income depends on the contractual maturity of the instrument, since current assets are those whose realisation is expected within twelve months of the reporting date. Financial assets measured at fair value through profit or loss are, on the other hand, classified as \"current\" if held for trading and are expected to be sold within twelve months of the reporting date.
An expected credit loss (ECL) provision must be made for financial assets recognised at amortised cost and financial assets at fair value through OCI, as follows: (i) specific provisions for doubtful debts are made for expected losses on financial assets measured at amortised cost; (ii) expected losses on financial assets measured at fair value through other comprehensive income are recognised in profit or loss, with a contra entry in the fair value reserve in equity. The method utilised is the \"General impairment model\", whereby:
\u2022If on the reporting date the credit risk of a financial instrument has not increased significantly since initial recognition, a 12-month ECL is recognised (stage 1). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If on the reporting date the credit risk of the financial instrument has increased significantly since initial recognition, a lifetime ECL is recognised (stage 2). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If a financial instrument is already impaired on initial recognition or shows objective evidence of impairment at the reporting date, lifetime expected losses are recognised. Interest is recognised at amortised cost (stage 3), i.e. on the basis of the exposure value - determined using the effective interest rate - adjusted for expected losses.
Detailed information on the inputs, assumptions and techniques for determining expected losses on financial assets is provided in Note 2.6 - Use of Estimates, to which reference is made for a full discussion.
Financial assets are derecognised when there is no longer a contractual right to receive cash flows from the investment or when all the related risks and rewards and control have been substantially transferred. If the substantial transfer of risks and rewards cannot be ascertained, financial assets are derecognised if no control is retained over them. Finally, transferred assets are derecognised if the contractual right to receive the cash flows of the assets is retained, but at the same time a contractual obligation is assumed to pay these flows to a third party, without delay and only to the extent of those received.
In addition, for impaired financial assets, derecognition may take place following the write-off of the same, following the acknowledgement that there is no reasonable expectation of recovery (e.g. prescription).
Financial liabilities, including loans, trade payables and other payment obligations, are measured at amortised cost using the effective interest method. If there is a change in the expected cash flows and they can be reliably estimated, the value of borrowings is recalculated to reflect the change on the basis of the present value of estimated future cash flows and the internal rate of return initially applied. Financial liabilities are classified as current liabilities, unless there is an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.
When required by the applicable IFRS (e.g. in the case of derivative liabilities), or when the irrevocable fair value option is exercised, financial liabilities are recognised at fair value through profit or loss. In this case, changes in fair value attributable to changes in own credit risk are recognised directly in equity, unless this treatment creates or enhances an accounting asymmetry, whereby the residual amount of the changes in the fair value of liabilities is recognised through profit or loss.
Financial liabilities are derecognised when they are extinguished or when the obligation specified in the contract expires, is cancelled or discharged.
For hedge accounting transactions, the Poste Italiane Group has elected to use the option made available by IFRS 9 and has retained the accounting treatments provided for by IAS 39. In accordance with this standard, derivatives are initially recognised at fair value on the date the derivative contract is executed and if they do not qualify for hedge accounting treatment, gains and losses arising from changes in fair value are accounted for in profit or loss for the period.
If, on the other hand, derivative financial instruments qualify for hedge accounting, gains and losses arising from changes in fair value after initial recognition are accounted for in accordance with IAS 39 \u2013 Financial Instruments: Recognition and Measurement, as described below.
The relationship between each hedging instrument and the hedged item is documented, as well as the risk management objective, the strategy for undertaking the hedge transaction and the methods used to assess effectiveness. Assessment of whether the hedging derivative is effective takes place both at designation of each derivative instrument as hedging instrument, and during its life.
\u2022Fair value hedges195F196
When the hedge is related to recognised assets or liabilities, or an unrecognised firm commitment, the changes in fair value of both the hedging instrument and the hedged item are recognised in profit or loss. When the hedging transaction is not fully effective, resulting in differences between the above changes, the ineffective portion represents a loss or gain recognised separately in profit or loss for the period.
Macro hedges are deemed highly effective if, at their inception and throughout the term of the hedge, changes in the fair value of the hedged cash amount are offset by changes in the fair value of the hedges, and if the effective results fall within the interval required by the reference standard.
\u2022Cash flow hedges196F197
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges after initial recognition is recognised in a specific equity reserve, with movements in the reserve accounted for in \"Other comprehensive income\" (the \"Cash flow hedge reserve\"). A hedging transaction is generally considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. If the hedging transaction is not fully effective, the gain or loss arising from a change in fair value relating to the ineffective portion is recognised in profit or loss for the period.
Amounts accumulated in equity are recycled to profit or loss in the period in which the hedged item affects profit or loss. In particular, in the case of hedges associated with a highly probable forecast transaction (such as the purchase of fixed income debt securities), the reserve is reclassified to profit or loss in the period or in the periods in which the asset or liability, subsequently accounted for and connected to the aforementioned transaction, will affect profit or loss (for example, an adjustment to the return on the security).
If, during the life of the derivative, the forecast hedged transaction is no longer expected to occur, the related gains and losses accumulated in the cash flow hedge reserve are immediately reclassified to profit or loss for the period. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the related gains and losses accumulated in the cash flow hedge reserve at that time remain in equity and are recognised in profit or loss at the same time as the original underlying.
Embedded derivatives
An embedded derivative is a derivative included in a combined contract or hybrid instrument, also containing a non-derivative contract or host contract, which originates all or part of the cash flows of the combined contract. Embedded derivatives are separated from the host contract and recognised as a derivative when:
\u2022the host contract is not a financial instrument measured at fair value through profit or loss;
\u2022the economic risks and characteristics of the embedded derivative are not closely related to those of the host contract;
\u2022a separate contract with the same terms as the embedded derivative would meet the definition of a derivative.
Within the Group, contracts that may contain embedded derivatives are:
\u2022contracts for the purchase of non-financial items entered into by Postepay SpA with clauses or options that influence the contract price, for which, however, embedded derivatives are not separable from the host contract;
\u2022convertible bonds held by Poste Italiane SpA and Postepay SpA, for which the embedded derivative component is not separated as the host contract is a financial instrument measured at fair value through profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page567-cflshid_241764-tag141520": { "value": "
Financial instruments
On initial recognition, financial assets and liabilities are classified at fair value based on the business purpose for which they were acquired. The purchase and sale of financial instruments is recognised by category, either on the date on which the Group commits to purchase or sell the asset (the transaction date), or, in the case of insurance transactions and BancoPosta's operations, at the settlement date194F195. Any changes in fair value between the transaction date and the settlement date are recognised in the financial statements.
On the other hand, trade receivables are recognised at their transaction price, in accordance with IFRS 15 - Revenue from Contracts with Customers.
On initial recognition, financial assets are classified in one of the following categories, based on the business model adopted to manage them and the characteristics of their contractual cash flows:
\u2022Financial assets measured at amortised cost
This category reflects financial assets held to collect the contractual cash flows (the held to collect or HTC business model) representing solely payments of principal and interest (SPPI). These assets are measured at amortised cost, that is the value assigned to the financial asset or liability on initial recognition, net of any principal reimbursement, plus or minus the cumulative amortisation by using the effective interest rate method on the difference between the initial value and the value at maturity, after deducting any impairment. The business model on which the classification of financial assets is based permits the sale of such assets; if the sales are not occasional, and are not immaterial in terms of value, consistency with the HTC business model should be assessed.
Financial assets measured at fair value through other comprehensive income (FVTOCI)
This category includes financial assets held both to collect the relevant contractual cash flows and for sale (the held to collect and sell or HTC&S business model), with the contractual cash flows representing solely payments of principal and interest.
These financial assets are measured at fair value and, until they are derecognised or reclassified, gains or losses from valuation are recognised in other comprehensive income. Exceptions to this are gains and losses due to impairment and foreign exchange gains and losses recognised in the profit or loss in the year in question. If the financial asset is derecognised, the accumulated gains/(losses) recognised in OCI are recycled to profit or loss.
This category also includes equity instruments that would otherwise be recognised through profit or loss, for which the irrevocable election was made to recognise changes in fair value through OCI (the FVTOCI option). This option entails the recognition of solely dividends through profit or loss.
\u2022Financial assets measured at fair value through profit or loss
This category includes: (a) financial assets primarily held for trading; (b) those that qualify for designation at fair value through profit or loss, exercising the fair value option; (c) financial assets that must be recognised at fair value through profit or loss; (d) derivative instruments, with the exception of the effective portion of those designated as cash flow hedges. Financial assets belonging to the category in question are measured at fair value and the related changes are recognised in profit or loss. Derivative instruments at fair value through profit or loss are recognised as assets or liabilities depending on whether the fair value is positive or negative.; positive and negative fair values deriving from transactions with the same counterparty are offset during the collateralisation phase, where contractually provided for.
The classification as \"current\" or \"non-current\" of financial assets measured at amortised cost and financial assets measured at fair value through other comprehensive income depends on the contractual maturity of the instrument, since current assets are those whose realisation is expected within twelve months of the reporting date. Financial assets measured at fair value through profit or loss are, on the other hand, classified as \"current\" if held for trading and are expected to be sold within twelve months of the reporting date.
An expected credit loss (ECL) provision must be made for financial assets recognised at amortised cost and financial assets at fair value through OCI, as follows: (i) specific provisions for doubtful debts are made for expected losses on financial assets measured at amortised cost; (ii) expected losses on financial assets measured at fair value through other comprehensive income are recognised in profit or loss, with a contra entry in the fair value reserve in equity. The method utilised is the \"General impairment model\", whereby:
\u2022If on the reporting date the credit risk of a financial instrument has not increased significantly since initial recognition, a 12-month ECL is recognised (stage 1). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If on the reporting date the credit risk of the financial instrument has increased significantly since initial recognition, a lifetime ECL is recognised (stage 2). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If a financial instrument is already impaired on initial recognition or shows objective evidence of impairment at the reporting date, lifetime expected losses are recognised. Interest is recognised at amortised cost (stage 3), i.e. on the basis of the exposure value - determined using the effective interest rate - adjusted for expected losses.
Detailed information on the inputs, assumptions and techniques for determining expected losses on financial assets is provided in Note 2.6 - Use of Estimates, to which reference is made for a full discussion.
Financial assets are derecognised when there is no longer a contractual right to receive cash flows from the investment or when all the related risks and rewards and control have been substantially transferred. If the substantial transfer of risks and rewards cannot be ascertained, financial assets are derecognised if no control is retained over them. Finally, transferred assets are derecognised if the contractual right to receive the cash flows of the assets is retained, but at the same time a contractual obligation is assumed to pay these flows to a third party, without delay and only to the extent of those received.
In addition, for impaired financial assets, derecognition may take place following the write-off of the same, following the acknowledgement that there is no reasonable expectation of recovery (e.g. prescription).
Financial liabilities, including loans, trade payables and other payment obligations, are measured at amortised cost using the effective interest method. If there is a change in the expected cash flows and they can be reliably estimated, the value of borrowings is recalculated to reflect the change on the basis of the present value of estimated future cash flows and the internal rate of return initially applied. Financial liabilities are classified as current liabilities, unless there is an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.
When required by the applicable IFRS (e.g. in the case of derivative liabilities), or when the irrevocable fair value option is exercised, financial liabilities are recognised at fair value through profit or loss. In this case, changes in fair value attributable to changes in own credit risk are recognised directly in equity, unless this treatment creates or enhances an accounting asymmetry, whereby the residual amount of the changes in the fair value of liabilities is recognised through profit or loss.
Financial liabilities are derecognised when they are extinguished or when the obligation specified in the contract expires, is cancelled or discharged.
For hedge accounting transactions, the Poste Italiane Group has elected to use the option made available by IFRS 9 and has retained the accounting treatments provided for by IAS 39. In accordance with this standard, derivatives are initially recognised at fair value on the date the derivative contract is executed and if they do not qualify for hedge accounting treatment, gains and losses arising from changes in fair value are accounted for in profit or loss for the period.
If, on the other hand, derivative financial instruments qualify for hedge accounting, gains and losses arising from changes in fair value after initial recognition are accounted for in accordance with IAS 39 \u2013 Financial Instruments: Recognition and Measurement, as described below.
The relationship between each hedging instrument and the hedged item is documented, as well as the risk management objective, the strategy for undertaking the hedge transaction and the methods used to assess effectiveness. Assessment of whether the hedging derivative is effective takes place both at designation of each derivative instrument as hedging instrument, and during its life.
\u2022Fair value hedges195F196
When the hedge is related to recognised assets or liabilities, or an unrecognised firm commitment, the changes in fair value of both the hedging instrument and the hedged item are recognised in profit or loss. When the hedging transaction is not fully effective, resulting in differences between the above changes, the ineffective portion represents a loss or gain recognised separately in profit or loss for the period.
Macro hedges are deemed highly effective if, at their inception and throughout the term of the hedge, changes in the fair value of the hedged cash amount are offset by changes in the fair value of the hedges, and if the effective results fall within the interval required by the reference standard.
\u2022Cash flow hedges196F197
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges after initial recognition is recognised in a specific equity reserve, with movements in the reserve accounted for in \"Other comprehensive income\" (the \"Cash flow hedge reserve\"). A hedging transaction is generally considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. If the hedging transaction is not fully effective, the gain or loss arising from a change in fair value relating to the ineffective portion is recognised in profit or loss for the period.
Amounts accumulated in equity are recycled to profit or loss in the period in which the hedged item affects profit or loss. In particular, in the case of hedges associated with a highly probable forecast transaction (such as the purchase of fixed income debt securities), the reserve is reclassified to profit or loss in the period or in the periods in which the asset or liability, subsequently accounted for and connected to the aforementioned transaction, will affect profit or loss (for example, an adjustment to the return on the security).
If, during the life of the derivative, the forecast hedged transaction is no longer expected to occur, the related gains and losses accumulated in the cash flow hedge reserve are immediately reclassified to profit or loss for the period. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the related gains and losses accumulated in the cash flow hedge reserve at that time remain in equity and are recognised in profit or loss at the same time as the original underlying.
Embedded derivatives
An embedded derivative is a derivative included in a combined contract or hybrid instrument, also containing a non-derivative contract or host contract, which originates all or part of the cash flows of the combined contract. Embedded derivatives are separated from the host contract and recognised as a derivative when:
\u2022the host contract is not a financial instrument measured at fair value through profit or loss;
\u2022the economic risks and characteristics of the embedded derivative are not closely related to those of the host contract;
\u2022a separate contract with the same terms as the embedded derivative would meet the definition of a derivative.
Within the Group, contracts that may contain embedded derivatives are:
\u2022contracts for the purchase of non-financial items entered into by Postepay SpA with clauses or options that influence the contract price, for which, however, embedded derivatives are not separable from the host contract;
\u2022convertible bonds held by Poste Italiane SpA and Postepay SpA, for which the embedded derivative component is not separated as the host contract is a financial instrument measured at fair value through profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page567-cflshid_241764-tag141515": { "value": "
On initial recognition, financial assets are classified in one of the following categories, based on the business model adopted to manage them and the characteristics of their contractual cash flows:
\u2022Financial assets measured at amortised cost
This category reflects financial assets held to collect the contractual cash flows (the held to collect or HTC business model) representing solely payments of principal and interest (SPPI). These assets are measured at amortised cost, that is the value assigned to the financial asset or liability on initial recognition, net of any principal reimbursement, plus or minus the cumulative amortisation by using the effective interest rate method on the difference between the initial value and the value at maturity, after deducting any impairment. The business model on which the classification of financial assets is based permits the sale of such assets; if the sales are not occasional, and are not immaterial in terms of value, consistency with the HTC business model should be assessed.
\u2022Financial assets measured at fair value through other comprehensive income (FVTOCI)
This category includes financial assets held both to collect the relevant contractual cash flows and for sale (the held to collect and sell or HTC&S business model), with the contractual cash flows representing solely payments of principal and interest.
These financial assets are measured at fair value and, until they are derecognised or reclassified, gains or losses from valuation are recognised in other comprehensive income. Exceptions to this are gains and losses due to impairment and foreign exchange gains and losses recognised in the profit or loss in the year in question. If the financial asset is derecognised, the accumulated gains/(losses) recognised in OCI are recycled to profit or loss.
This category also includes equity instruments that would otherwise be recognised through profit or loss, for which the irrevocable election was made to recognise changes in fair value through OCI (the FVTOCI option). This option entails the recognition of solely dividends through profit or loss.
\u2022Financial assets measured at fair value through profit or loss
This category includes: (a) financial assets primarily held for trading; (b) those that qualify for designation at fair value through profit or loss, exercising the fair value option; (c) financial assets that must be recognised at fair value through profit or loss; (d) derivative instruments, with the exception of the effective portion of those designated as cash flow hedges. Financial assets belonging to the category in question are measured at fair value and the related changes are recognised in profit or loss. Derivative instruments at fair value through profit or loss are recognised as assets or liabilities depending on whether the fair value is positive or negative.; positive and negative fair values deriving from transactions with the same counterparty are offset during the collateralisation phase, where contractually provided for.
The classification as \"current\" or \"non-current\" of financial assets measured at amortised cost and financial assets measured at fair value through other comprehensive income depends on the contractual maturity of the instrument, since current assets are those whose realisation is expected within twelve months of the reporting date. Financial assets measured at fair value through profit or loss are, on the other hand, classified as \"current\" if held for trading and are expected to be sold within twelve months of the reporting date.
An expected credit loss (ECL) provision must be made for financial assets recognised at amortised cost and financial assets at fair value through OCI, as follows: (i) specific provisions for doubtful debts are made for expected losses on financial assets measured at amortised cost; (ii) expected losses on financial assets measured at fair value through other comprehensive income are recognised in profit or loss, with a contra entry in the fair value reserve in equity. The method utilised is the \"General impairment model\", whereby:
\u2022If on the reporting date the credit risk of a financial instrument has not increased significantly since initial recognition, a 12-month ECL is recognised (stage 1). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If on the reporting date the credit risk of the financial instrument has increased significantly since initial recognition, a lifetime ECL is recognised (stage 2). Interest on the instrument is calculated on the gross carrying amount (amortised cost inclusive of the ECL);
\u2022If a financial instrument is already impaired on initial recognition or shows objective evidence of impairment at the reporting date, lifetime expected losses are recognised. Interest is recognised at amortised cost (stage 3), i.e. on the basis of the exposure value - determined using the effective interest rate - adjusted for expected losses.
Detailed information on the inputs, assumptions and techniques for determining expected losses on financial assets is provided in Note 2.6 - Use of Estimates, to which reference is made for a full discussion.
Financial assets are derecognised when there is no longer a contractual right to receive cash flows from the investment or when all the related risks and rewards and control have been substantially transferred. If the substantial transfer of risks and rewards cannot be ascertained, financial assets are derecognised if no control is retained over them. Finally, transferred assets are derecognised if the contractual right to receive the cash flows of the assets is retained, but at the same time a contractual obligation is assumed to pay these flows to a third party, without delay and only to the extent of those received.
In addition, for impaired financial assets, derecognition may take place following the write-off of the same, following the acknowledgement that there is no reasonable expectation of recovery (e.g. prescription).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page567-cflshid_241764-tag141524": { "value": "
\u2022Financial assets measured at fair value through profit or loss
This category includes: (a) financial assets primarily held for trading; (b) those that qualify for designation at fair value through profit or loss, exercising the fair value option; (c) financial assets that must be recognised at fair value through profit or loss; (d) derivative instruments, with the exception of the effective portion of those designated as cash flow hedges. Financial assets belonging to the category in question are measured at fair value and the related changes are recognised in profit or loss. Derivative instruments at fair value through profit or loss are recognised as assets or liabilities depending on whether the fair value is positive or negative.; positive and negative fair values deriving from transactions with the same counterparty are offset during the collateralisation phase, where contractually provided for.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page569-cflshid_242943-tag141525": { "value": "For hedge accounting transactions, the Poste Italiane Group has elected to use the option made available by IFRS 9 and has retained the accounting treatments provided for by IAS 39. In accordance with this standard, derivatives are initially recognised at fair value on the date the derivative contract is executed and if they do not qualify for hedge accounting treatment, gains and losses arising from changes in fair value are accounted for in profit or loss for the period.
If, on the other hand, derivative financial instruments qualify for hedge accounting, gains and losses arising from changes in fair value after initial recognition are accounted for in accordance with IAS 39 \u2013 Financial Instruments: Recognition and Measurement, as described below.
The relationship between each hedging instrument and the hedged item is documented, as well as the risk management objective, the strategy for undertaking the hedge transaction and the methods used to assess effectiveness. Assessment of whether the hedging derivative is effective takes place both at designation of each derivative instrument as hedging instrument, and during its life.
\u2022Fair value hedges19When the hedge is related to recognised assets or liabilities, or an unrecognised firm commitment, the changes in fair value of both the hedging instrument and the hedged item are recognised in profit or loss. When the hedging transactionis not fully effective, resulting in differences between the above changes, the ineffective portion represents a loss or gain recognised separately in profit or loss for the period.
Macro hedges are deemed highly effective if, at their inception and throughout the term of the hedge, changes in the fair value of the hedged cash amount are offset by changes in the fair value of the hedges, and if the effective results fall within the interval required by the reference standard.
\u2022Cash flow hedges196F197
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges after initial recognition is recognised in a specific equity reserve, with movements in the reserve accounted for in \"Other comprehensive income\" (the \"Cash flow hedge reserve\"). A hedging transaction is generally considered highly effective if, both at inception of the hedge and on an ongoing basis, changes in the expected future cash flows of the hedged item are substantially offset by changes in the fair value of the hedging instrument. If the hedging transaction is not fully effective, the gain or loss arising from a change in fair value relating to the ineffective portion is recognised in profit or loss for the period.
Amounts accumulated in equity are recycled to profit or loss in the period in which the hedged item affects profit or loss. In particular, in the case of hedges associated with a highly probable forecast transaction (such as the purchase of fixed income debt securities), the reserve is reclassified to profit or loss in the period or in the periods in which the asset or liability, subsequently accounted for and connected to the aforementioned transaction, will affect profit or loss (for example, an adjustment to the return on the security).
If, during the life of the derivative, the forecast hedged transaction is no longer expected to occur, the related gains and losses accumulated in the cash flow hedge reserve are immediately reclassified to profit or loss for the period. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the related gains and losses accumulated in the cash flow hedge reserve at that time remain in equity and are recognised in profit or loss at the same time as the original underlying.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page570-cflshid_243522-tag141526": { "value": "
Repurchase agreements
Any securities received as part of a transaction entailing subsequent re-sale and the delivery of securities as part of a transaction entailing their subsequent repurchase are not either recognised or derecognised in these financial statements. Consequently, in the case of securities purchased under a resale agreement, the amount paid is recognised as an amount due from customers or banks under Financial assets measured at amortised cost; in the case of securities sold under a repurchase agreement, the liability is recognised as an amount due to banks or customers under Financial liabilities measured at amortised cost. The transactions described are subject to offsetting if, and only if, they are carried out with the same counterparty, have the same maturity and offsetting is provided for in the contract.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page570-cflshid_243522-tag147971": { "value": "
Tax credits Law no. 77/2020
In order to identify the correct accounting treatment of receivables acquired in relation to Relaunch Decree no. 34/2020 (later converted into Law no. 77 of 17 July 2020), since it is not possible to identify the framework directly applicable to this case, in compliance with the provisions of IAS 8, an accounting policy was defined suitable for providing relevant and reliable information aimed at ensuring a faithful representation of the financial position, income and cash flows and which reflects the economic substance and not merely the form of the transaction. On the basis of the analyses carried out and the documents published by the main Italian supervisory bodies (Joint Document of the Bank of Italy, IVASS and CONSOB197F198), although the definition of financial assets in IAS 32 is not directly applicable to this case, an accounting model was developed based on IFRS 9 given that:
\u2022at inception, an asset as defined by the Conceptual Framework arises in the transferee's financial statements;
\u2022they may be used to offset a payable that is usually settled in cash (tax payables), and exchanged for other financial assets on terms that may be potentially favourable to the entity;
\u2022a business model can be identified (Hold to Collect, Hold to Collect and Sell or other business models).
At the date of purchase, these receivables are recognised at their fair value (coinciding with the price paid) and subsequently measured at amortised cost, as they were acquired to be used to offset tax or social security payables by Poste Italiane SpA, based on the provisions of the relevant regulations (\"Hold to Collect\" business model).", "dimensions": { "concept": "ext:DescriptionOfAccountingPolicyForTaxCreditLaw772020", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page571-cflshid_243951-tag141528": { "value": "
Classification of receivables and payables attributable to BancoPosta and EMI RFC
Receivables and payables attributable to BancoPosta RFC are treated as financial assets and liabilities if related to BancoPosta's typical deposit-taking and lending activities, or services provided under authority from customers. The related operating expenses and income, if not settled or classifiable in accordance with Bank of Italy Circular 272 of 30 July 2008 \u2013 The Account Matrix, are accounted for in trade receivables and payables.
Receivables and payables attributable to EMI RFC are treated as financial assets and liabilities if related to EMIs' typical activities, or services provided under authority from customers. The related operating expenses and income, if not settled or classifiable in accordance with Bank of Italy Circular 217 of 5 August 1996 \u2013 The Account Matrix, are accounted for in trade receivables and payables.
", "dimensions": { "concept": "ext:DescriptionOfClassificationForReceivablesAndPayablesBancoPosta", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page571-cflshid_243951-tag141527": { "value": "
Own use exemption
The standards establishing the principles for the recognition and measurement of financial instruments are also applied to derivative contracts to buy or sell non-financial items that are settled net in cash or in another financial instrument, with the exception of contracts entered into, and that continue to be held, for the purpose of the receipt or delivery of a non-financial item in accordance with the entity's expected purchase, sale or usage requirements (the own use exemption). This exemption applies to the recognition and measurement of forward electricity and natural gas contracts entered into by the subsidiary Postepay SpA if the following conditions have been met:
\u2022the contract involves the physical supply of a commodity;
\u2022the entity has not entered into an offsetting contract;
\u2022the transaction must be entered into in accordance with expected purchase and/or sale or usage requirements.
When the above conditions are met, the contract for the purchase or sale of non-financial items is classified as a \"normal contract of sale\".
", "dimensions": { "concept": "ext:DescriptionOfAccountingPolicyForOwnUseExemption", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page571-cflshid_243951-tag141531": { "value": "
Taxes
Current income tax expense is based on the best estimate of taxable profit for the period and the related regulations, applying the rates in force. Deferred tax assets and liabilities are calculated on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts, using tax rates that are expected to apply when the related deferred tax assets are realised or the deferred tax liabilities are settled. Deferred tax assets and liabilities are not recognised if the temporary differences derive from investments in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary difference is controlled by the Group or it is probable that the temporary difference will not reverse in the foreseeable future. In accordance with IAS 12, deferred tax liabilities are not recognised on goodwill deriving from a business combination.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Current and deferred taxes are recognised in profit or loss, with the exception of taxes charged or credited directly to equity, in which case the tax effect is recognised directly in equity. Current and deferred tax assets and liabilities are offset when they are applied by the same tax authority to the same taxpaying entity, which has the legally exercisable right to offset the amounts recognised, and the entity has the intention of exercising this right. As a result, tax liabilities accruing in interim
periods that are shorter than the tax year are not offset against related assets deriving from withholding tax or advances paid.The Group's taxation and accounting standards take account of the effects of Poste Italiane SpA's participation in the national tax consolidation scheme, for which the option has been exercised in accordance with the law, together with the following subsidiaries: Poste Vita SpA, SDA Express Courier SpA, Poste Air Cargo Srl, Postel SpA, Europa Gestioni Immobiliari SpA, Poste Welfare Servizi Srl, Poste Assicura SpA, BancoPostaFondi SpA SGR, PostePay SpA, Poste Insurance Broker Srl, MLK Deliveries SpA, Indabox Srl, Nexive Network Srl, LIS Holding SpA, LIS PAY SpA, Address Software Srl, Consorzio Servizi Scpa, Logos Srl and Plurima SpA. The tax consolidation arrangement is governed by Group regulations based on the principles of neutrality and equality of treatment, which are intended to ensure that the companies included in the tax consolidation are in no way penalised as a result. Following adoption of the tax consolidation arrangement, the Parent Company's tax expense is determined at consolidated level on the basis of the tax expense or tax losses for the period for each company included in the consolidation, taking account of any withholding tax or advances paid. Poste Italiane SpA posts its IRES tax expense to income taxes for the period, after adjustments to take account of the positive or negative impact of tax consolidation adjustments. Should the reductions or increases in tax expense deriving from such adjustments be attributable to the companies included in the tax consolidation, Poste Italiane SpA attributes such reductions or increases in tax expense to the companies in question. The economic benefits deriving from the offsetof tax losses transferred to the consolidating entity by the companies participating in the tax consolidation arrangement are recognised in full by Poste Italiane SpA. Other taxes not related to income are included in \"Other operating costs\".", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTaxesOtherThanIncomeTaxExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page571-cflshid_243951-tag141530": { "value": "
Taxes
Current income tax expense is based on the best estimate of taxable profit for the period and the related regulations, applying the rates in force. Deferred tax assets and liabilities are calculated on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts, using tax rates that are expected to apply when the related deferred tax assets are realised or the deferred tax liabilities are settled. Deferred tax assets and liabilities are not recognised if the temporary differences derive from investments in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary difference is controlled by the Group or it is probable that the temporary difference will not reverse in the foreseeable future. In accordance with IAS 12, deferred tax liabilities are not recognised on goodwill deriving from a business combination.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Current and deferred taxes are recognised in profit or loss, with the exception of taxes charged or credited directly to equity, in which case the tax effect is recognised directly in equity. Current and deferred tax assets and liabilities are offset when they are applied by the same tax authority to the same taxpaying entity, which has the legally exercisable right to offset the amounts recognised, and the entity has the intention of exercising this right. As a result, tax liabilities accruing in interim
periods that are shorter than the tax year are not offset against related assets deriving from withholding tax or advances paid.The Group's taxation and accounting standards take account of the effects of Poste Italiane SpA's participation in the national tax consolidation scheme, for which the option has been exercised in accordance with the law, together with the following subsidiaries: Poste Vita SpA, SDA Express Courier SpA, Poste Air Cargo Srl, Postel SpA, Europa Gestioni Immobiliari SpA, Poste Welfare Servizi Srl, Poste Assicura SpA, BancoPostaFondi SpA SGR, PostePay SpA, Poste Insurance Broker Srl, MLK Deliveries SpA, Indabox Srl, Nexive Network Srl, LIS Holding SpA, LIS PAY SpA, Address Software Srl, Consorzio Servizi Scpa, Logos Srl and Plurima SpA. The tax consolidation arrangement is governed by Group regulations based on the principles of neutrality and equality of treatment, which are intended to ensure that the companies included in the tax consolidation are in no way penalised as a result. Following adoption of the tax consolidation arrangement, the Parent Company's tax expense is determined at consolidated level on the basis of the tax expense or tax losses for the period for each company included in the consolidation, taking account of any withholding tax or advances paid. Poste Italiane SpA posts its IRES tax expense to income taxes for the period, after adjustments to take account of the positive or negative impact of tax consolidation adjustments. Should the reductions or increases in tax expense deriving from such adjustments be attributable to the companies included in the tax consolidation, Poste Italiane SpA attributes such reductions or increases in tax expense to the companies in question. The economic benefits deriving from the offsetof tax losses transferred to the consolidating entity by the companies participating in the tax consolidation arrangement are recognised in full by Poste Italiane SpA. Other taxes not related to income are included in \"Other operating costs\".Deferred tax assets
The recognition of deferred tax assets is based on the expectation of taxable income in future years. Assessments of expected taxable income depend on factors which may change over time, impacting on the valuation of the deferred tax assets in the statement of financial position.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page571-cflshid_243951-tag141529": { "value": "
Taxes
Current income tax expense is based on the best estimate of taxable profit for the period and the related regulations, applying the rates in force. Deferred tax assets and liabilities are calculated on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts, using tax rates that are expected to apply when the related deferred tax assets are realised or the deferred tax liabilities are settled. Deferred tax assets and liabilities are not recognised if the temporary differences derive from investments in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary difference is controlled by the Group or it is probable that the temporary difference will not reverse in the foreseeable future. In accordance with IAS 12, deferred tax liabilities are not recognised on goodwill deriving from a business combination.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Current and deferred taxes are recognised in profit or loss, with the exception of taxes charged or credited directly to equity, in which case the tax effect is recognised directly in equity. Current and deferred tax assets and liabilities are offset when they are applied by the same tax authority to the same taxpaying entity, which has the legally exercisable right to offset the amounts recognised, and the entity has the intention of exercising this right. As a result, tax liabilities accruing in interim
periods that are shorter than the tax year are not offset against related assets deriving from withholding tax or advances paid.The Group's taxation and accounting standards take account of the effects of Poste Italiane SpA's participation in the national tax consolidation scheme, for which the option has been exercised in accordance with the law, together with the following subsidiaries: Poste Vita SpA, SDA Express Courier SpA, Poste Air Cargo Srl, Postel SpA, Europa Gestioni Immobiliari SpA, Poste Welfare Servizi Srl, Poste Assicura SpA, BancoPostaFondi SpA SGR, PostePay SpA, Poste Insurance Broker Srl, MLK Deliveries SpA, Indabox Srl, Nexive Network Srl, LIS Holding SpA, LIS PAY SpA, Address Software Srl, Consorzio Servizi Scpa, Logos Srl and Plurima SpA. The tax consolidation arrangement is governed by Group regulations based on the principles of neutrality and equality of treatment, which are intended to ensure that the companies included in the tax consolidation are in no way penalised as a result. Following adoption of the tax consolidation arrangement, the Parent Company's tax expense is determined at consolidated level on the basis of the tax expense or tax losses for the period for each company included in the consolidation, taking account of any withholding tax or advances paid. Poste Italiane SpA posts its IRES tax expense to income taxes for the period, after adjustments to take account of the positive or negative impact of tax consolidation adjustments. Should the reductions or increases in tax expense deriving from such adjustments be attributable to the companies included in the tax consolidation, Poste Italiane SpA attributes such reductions or increases in tax expense to the companies in question. The economic benefits deriving from the offsetof tax losses transferred to the consolidating entity by the companies participating in the tax consolidation arrangement are recognised in full by Poste Italiane SpA. Other taxes not related to income are included in \"Other operating costs\".", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page572-cflshid_244498-tag141532": { "value": "
Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of interchangeable items and goods for resale is calculated using the weighted average cost method. In the case of non-interchangeable items, cost is measured on the basis of the specific cost of the item at the time of purchase. The value of the inventories is adjusted, if necessary, by provisions for obsolete or slow-moving stock. When the circumstances that previously led to recognition of the above provisions no longer exist, or when there is a clear indication of an increase in the net realisable value, the provisions are fully or partly reversed, so that the new carrying amount is the lower of cost and net realisable value at the end of the reporting period. Assets are not, however, recognised in the statement of financial position when the Group has incurred an expense that, based on the best information available at the date of preparation of the financial statements, is deemed unlikely to generate economic benefits for the Group after the end of the reporting period.
In the case of properties held for sale198F199, if present, cost is represented by the fair value of each asset at the date of acquisition, plus any directly attributable transaction costs, whilst the net realisable value is based on the estimated sale price under normal market conditions, less direct costs to sell.
Long-term contract work is measured using the percentage of completion method, using cost to cost accounting199F200.
Environmental certificates not used in the reporting period are recognised in inventories.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page572-cflshid_244498-tag141534": { "value": "
Environmental certificates
Within the Poste Italiane Group, environmental certificates refer to:
\u2022Emission allowances held by the company Poste Air Cargo Srl as an incentive to reduce greenhouse gas emissions200F201 with the aim of achieving an improvement in technologies used in energy production and industrial processes,
\u2022Guarantees of origin and carbon credits held by the company Postepay SpA; the former aimed at certifying the origin from renewable sources of the electricity sold; the latter aimed at fully offsetting CO2 emissions from natural gas consumption.
Emission allowances
The European Emissions Trading System, which works on the basis of the cap and trade principle, has capped annual greenhouse gas emissions at European level. This corresponds to the issue, free of charge, of a set number of emission allowances by the competent national authorities. During the year, depending on the effective volume of greenhouse gas emissions produced with respect to the above cap, each company has the option of selling or purchasing emission allowances on the market.
The issue, free of charge, of emission allowances involves a commitment to produce, in the relevant year, a quantity of greenhouse gas emissions in proportion to the emission allowances received: this commitment, commensurate with the market value of the emission allowances at the time of allocation, is disclosed in the notes to the financial statements. At the end of the year, the commitment is reduced or derecognised in proportion to the greenhouse gas emissions effectively produced and any residual value is reported in the section, \"Additional information\", in the Annual Report.
Guarantees of origin and carbon credits
Guarantees of Origin are certifications attesting to the renewable origin of the sources used by IGO (Guarantee of Origin Plants) classified plants. For each MWh of renewable electricity fed into the grid by IGO-qualified plants, the GSE (Gestore Servizi Energetici) issues a GO certificate to the producer, in accordance with EU Directive 2018/2001. As of 1 January 2013, electricity sales companies are obliged to procure a quantity of GO certificates equal to the electricity sold as renewable. To do this, each company is required, by 31 March of the year following the year in which electricity was supplied to end customers, to cancel a quantity of GOs equal to the electricity sold as renewable.
Carbon credits, on the other hand, represent a negotiable security that allows a company or organisation to offset the carbon dioxide (CO2) emitted in the course of its activities (in the case of Postepay SpA, the CO2 emissions of the gas marketed to end customers), by adhering to environmental sustainability projects aimed at pursuing a path of ecological transition and decarbonisation.
CO2 offsetting takes place through the acquisition of carbon credits for a value equivalent to the CO2 emissions resulting from the gas consumption of the Company's end customers. Each carbon credit represents the offsetting of one tonne of CO2.
The accounting treatment of emission allowances, guarantees of origin and carbon credits to the extent that they are similar, in the absence of specific guidelines in the IAS/IFRS framework, is carried out in accordance with the provisions of the OIC 8 \"Greenhouse Gas Emission Allowances\", as well as with the reference best practice for the main IAS adopters. The purchase and sales of environmental certificates are accounted for in profit or loss in the year in which the transaction occurs. At the end of the year, any surplus deriving from purchases is accounted for in closing inventory at the lower of cost and net realisable value201F202. In the event of a deficit, the resulting charge and related liability are accounted for at the end of the year at market value.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmissionRightsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page573-cflshid_245044-tag141533": { "value": "
Business Combinations
Business combinations are recognised using the acquisition method. The consideration transferred in a business combination is equal to the sum of the fair values, at the acquisition date, of the assets transferred, the liabilities incurred,
and any interest issued by the acquirer. Costs directly attributable to the transaction are recognised in the Statement of profit or loss.
The amount transferred is allocated by recognising the identifiable assets, liabilities and contingent liabilities of the acquiree at the related fair values at the acquisition date.
Any positive difference between the carrying amount of the asset and its recoverable value is recognised as goodwill and recorded under intangible assets:
\u2022the sum of the consideration transferred, measured at fair value at the acquisition date, the amount of any non-controlling interest, and, in the case of business combinations achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree; and
\u2022the net value of the amounts, at the acquisition date, of the assets acquired and liabilities assumed that are identifiable in the acquiree measured at fair value.
In the event of a negative difference, this surplus represents the profit from a purchase on favourable terms and is recognised in the statement of profit or loss.
If at the time of preparing the financial statements the fair value of the assets, liabilities and contingent liabilities arising from the transaction can only be determined provisionally, the business combination is recognised using these provisional values. Any adjustments resulting from the completion of the valuation process are recognised retrospectively within twelve months of the acquisition date.
In the case of a business combination achieved in stages, the interests previously held in the acquiree are remeasured at fair value at the new acquisition date and any difference (positive or negative) is recognised in the statement of profit or loss or in the statement of comprehensive income if appropriate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page574-cflshid_245668-tag141536": { "value": "
Cash and deposits attributable to BancoPosta
Cash and securities held at post offices, and bank deposits attributable to the operations of BancoPosta RFC, are accounted for separately from cash and cash equivalents as they derive from deposits subject to investment restrictions, or from advances from the Italian Treasury to ensure that post offices can operate. This cash may only be used in settlement of these obligations.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page574-cflshid_245668-tag141535": { "value": "
Cash and deposits attributable to BancoPosta
Cash and securities held at post offices, and bank deposits attributable to the operations of BancoPosta RFC, are accounted for separately from cash and cash equivalents as they derive from deposits subject to investment restrictions, or from advances from the Italian Treasury to ensure that post offices can operate. This cash may only be used in settlement of these obligations.
", "dimensions": { "concept": "ext:DescriptionOfAccountingPolicyForCashAndDepositsBancoPosta", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page574-cflshid_245668-tag141540": { "value": "
Cash and cash equivalents
Cash and cash equivalents refer to cash in hand, deposits held at call with banks, amounts that at 31 December 2023 the Parent Company has temporarily deposited with the MEF and other highly liquid short-term investments with original maturities of ninety days or less. Current account overdrafts are accounted for in current liabilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page574-cflshid_245668-tag141542": { "value": "
Non-current assets (or disposal groups) classified as held for sale and discontinued operations
Non-current assets, disposal groups and discontinued operations are measured at the lower of their carrying amount and fair value, less costs to sell.
When it is highly probable that the carrying amount of a non-current asset, or a disposal group, will be recovered, in its present condition, principally through a sale transaction or other form of disposal, rather than through continuing use, and the transaction is likely to take place in the short term, the asset or disposal group is classified as held for sale or as a discontinuing operation in the statement of financial position. The transaction is deemed to be highly probable, when the Parent Company's Board of Directors, or, when so authorised, the board of directors of a subsidiary, has committed to a plan to sell the asset (or disposal group), and an active programme to locate a buyer and complete the plan has been initiated. Sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page574-cflshid_245668-tag141541": { "value": "
Non-current assets (or disposal groups) classified as held for sale and discontinued operations
Non-current assets, disposal groups and discontinued operations are measured at the lower of their carrying amount and fair value, less costs to sell.
When it is highly probable that the carrying amount of a non-current asset, or a disposal group, will be recovered, in its present condition, principally through a sale transaction or other form of disposal, rather than through continuing use, and the transaction is likely to take place in the short term, the asset or disposal group is classified as held for sale or as a discontinuing operation in the statement of financial position. The transaction is deemed to be highly probable, when the Parent Company's Board of Directors, or, when so authorised, the board of directors of a subsidiary, has committed to a plan to sell the asset (or disposal group), and an active programme to locate a buyer and complete the plan has been initiated. Sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page574-cflshid_245668-tag141539": { "value": "
Non-current assets (or disposal groups) classified as held for sale and discontinued operations
Non-current assets, disposal groups and discontinued operations are measured at the lower of their carrying amount and fair value, less costs to sell.
When it is highly probable that the carrying amount of a non-current asset, or a disposal group, will be recovered, in its present condition, principally through a sale transaction or other form of disposal, rather than through continuing use, and the transaction is likely to take place in the short term, the asset or disposal group is classified as held for sale or as a discontinuing operation in the statement of financial position. The transaction is deemed to be highly probable, when the Parent Company's Board of Directors, or, when so authorised, the board of directors of a subsidiary, has committed to a plan to sell the asset (or disposal group), and an active programme to locate a buyer and complete the plan has been initiated. Sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance.
A14 - NON-CURRENT ASSETS AND DISPOSAL GROUPS HELD FOR SALE (\u20ac50 million)
The balance of \u20ac50 million refers to the investment in Cronos Vita Assicurazioni, held 22.5% by Poste Vita and classified as an asset held for sale (IFRS 5) as reported in Section 2.8 - Basis of consolidation to which reference should be made.
With regard to the valuation of the investment, it is recorded at its purchase value, as defined by IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations. The Group believes that any deviations in value, compared to initial recognition, may be affected by the trend in lapses. Given the trend of the requests received from 1 November 2023 to the closing date of the accounts by Eurovita's former policyholders, no significant deviations from those estimated have emerged, such as to suggest that the value of the investment may be subject to impairment; for this reason, the Group currently considers this risk to be insignificant and, consequently, also considering the small exposure, has not deemed it necessary to perform stress analyses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page575-cflshid_246186-tag141537": { "value": "
Share capital
Share capital is represented by Poste Italiane SpA's subscribed and paid-up capital. Incremental costs directly attributable to the issue of new shares are recognised as a reduction of the share capital, net of any deferred tax effect.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page575-cflshid_246186-tag141538": { "value": "
Treasury shares
Treasury shares are recognised at cost and deducted from equity. The effects of any subsequent sales are recognised in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page575-cflshid_246186-tag141544": { "value": "
Insurance contracts
The entry into force of the new accounting standard on insurance contracts has led to significant changes in the way insurance assets are determined and valued. For details on the new provisions of IFRS 17 and how Insurance Assets and Liabilities are determined, see Note 2.4 - Changes to accounting policies.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReclassificationOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page575-cflshid_246186-tag141543": { "value": "
Insurance contracts
The entry into force of the new accounting standard on insurance contracts has led to significant changes in the way insurance assets are determined and valued. For details on the new provisions of IFRS 17 and how Insurance Assets and Liabilities are determined, see Note 2.4 - Changes to accounting policies.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInsuranceContracts", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page576-cflshid_246557-tag141545": { "value": "Provisions for risks and charges
Provisions for risks and charges are recorded to cover losses that are either probable or certain to be incurred, for which, however, there is an uncertainty as to the amount or as to the date on which they will occur. Provisions for risks and charges are made when the Group has a present (legal or constructive) obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation. Provisions are measured on the basis of management's best estimate of the use of resources required to settle the obligation. The value of the liability is discounted, where the time effect of money is relevant, at a rate that reflects current market values and takes into account the risks specific to the liability. Provisions are reviewed at each reporting date and are adjusted to reflect the best estimate of the expected charge to meet existing obligations at the reporting date. Any effect of the passage of time and the effect of changes in interest rates are shown in the statement of profit or loss. With regard to the risks for which the occurrence of a liability is only possible, specific information is provided without making any provision. In those rare cases in which disclosure of some or all of the information regarding the risks in question could seriously prejudice the Group's position in a dispute or in ongoing negotiations with third parties, the Group exercises the option granted by the relevant accounting standards to provide limited disclosure.
Provisions for risks and charges
The Group makes provisions for probable liabilities deriving from disputes with staff, suppliers, and third parties and, in general, for liabilities deriving from present obligations. These provisions cover the liabilities that could result from legal
action of varying nature, the impact on profit or loss of seizures incurred and not yet definitively assigned, and amounts expected to be refundable to customers where the final amount payable has yet to be determined.
Determination of the provisions for risks and charges involves the use of estimates based on current knowledge of factors that may change over time, potentially resulting in outcomes that may be significantly different from those taken into account in preparing these financial statements.
In order to reflect in the financial statements the risks arising from potential fraud perpetrated against Poste Italiane and, therefore, to determine the accounting impacts associated with the potential risk on tax credits, as described in greater detail in Note A10 - Tax credits Law no. 77/2020, without prejudice to compliance with Bank of Italy/Consob/Ivass Document no. 9 as to all other aspects related to the accounting recognition of the tax credits in question (see the section \"Tax credits Law no. 77/2020\" of paragraph 2.5 Material information on accounting standards for further details), the decision was taken to refer to the provisions of IAS 37 - Provisions, Contingent Assets and Contingent Liabilities, with regard to the measurement of the risks in question. The applicability of IAS 37, in order to reflect in the financial statements the risk of not being able to offset the tax credits on which fraud was ascertained, was considered because the possible failure to recover the carrying amount of the tax credits would not derive from a characteristic of the asset being measured or from significant increases in the credit risk after the initial recognition of the asset or, more simply, from the ascertained default of the debtor, but rather from the possibility that, for those ascertained to be cases of fraud, the liability of the assignee - even if a third party in good faith or an offended party to the offence - will also be called to account for assumptions other than the possible irregular use of the tax credit or for use to a greater extent than the tax credit received205F206. As a result of the in-depth analyses carried out on the tax credits acquired, also with the support of external legal, tax and accounting consultants, a specific provision was estimated, recorded consistently with the above and for clarity in the liability item \"Provisions for risks and charges\". It should be noted that the determination of the above-mentioned provision necessarily required the application of a significant degree of professional judgement, the main elements of uncertainty of which relate to the outcome of the proceedings under way, the identification of the receivables whose deductions have been assigned are effectively non-existent, and the outcome of the initiatives that will be activated by Poste Italiane to recover the amounts paid to the entities in respect of which cases of fraud have been ascertained.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page576-cflshid_246557-tag141547": { "value": "
Employee benefits
The Short-term employee benefits are those that will be fully paid within twelve months of the end of the year in which the employee provided his or her services. Such benefits include wages, salaries, social security contributions, holiday pay and sick pay.
The undiscounted value of short-term employee benefits to be paid to employees in consideration of employment services provided over the relevant period is accrued as personnel expenses.
There are two types of post-employment benefits:
\u2022Defined benefit plans
Defined benefit plans include employee termination benefits due to employees pursuant to Article 2120 of the Italian Civil Code limited to the portions of employee termination benefits accrued in the company up to 31 December 2006, for Group companies with at least 50 employees, as well as the portions of employee termination benefits accrued during the period in the case of Group companies with less than 50 employees, which continue to increase the value of the accumulated liability.
Under these plans, given that the amount of the benefit to be paid is only quantifiable following the termination of employment, the related effects on profit or loss or the financial position are recognised on the basis of actuarial calculations. In particular, the liability to be paid on cessation of employment is calculated using the projected unit credit method and then discounted to recognise the time value of money prior to the liability being settled. The liability recognised in the financial statements is based on calculations performed by independent actuaries. The calculation takes into account accrued employee termination benefits for services already rendered and is based on actuarial assumptions described in Note \"2.6 - Use of Estimates - Employee termination benefits\", to which reference should be made. Actuarial gains and losses at the end of each reporting period, based on the difference between the carrying amount of the liability and the present value of the Group's obligations at the end of the period, due to changes in the actuarial assumptions, are recognised directly in Other comprehensive income.
\u2022Defined contribution plans
Employee termination benefits fall within the scope of defined contribution plans provided the benefits vested subsequent to 1 January 2007 and were paid into a Supplementary Pension Fund or a Treasury Fund at INPS. Contributions to defined contribution plans are recognised in profit or loss when incurred, based on their nominal value.
The Termination benefits payable to employees are recognised as a liability when the entity gives a binding commitment, also on the basis of consolidated relationships and mutual undertakings with union representatives, to terminate the employment of an employee, or group of employees, prior to the normal retirement date or, alternatively, an employee or group of employees accepts an offer of benefits in consideration of a termination of employment. Termination benefits payable to employees are immediately recognised as personnel expenses.
Other long-term employment benefits consist of benefits not payable within twelve months of the end of the reporting period during which the employees provided their services. The net change in the value of any of the components of the liability during the reporting period is recognised in full in profit or loss.
Employee termination benefits
The measurement of Employee termination benefits is also based on calculations performed by independent actuaries. The calculation takes account of termination benefits accrued for the period of service to date and is based on various demographic and economic-financial assumptions.
The main actuarial assumptions applied in the calculation of employee termination benefits at 31 December 2023, also based on the experience of each Group company and the reference best practice, are as follows:
Economic and financial assumptions
\u00a0
\u00a0
31.12.2023
\u00a0
Discount rate
3.08%
\u00a0
Inflation rate
2.00%
\u00a0
Annual rate of increase of employee termination benefits
3.00%
\u00a0
Demographic assumptions
\u00a0
\u00a0
31.12.2023
\u00a0
Mortality
ISTAT 2018
\u00a0
Disability
INPS tables broken down by age and gender
\u00a0
Retirement age
Achievement of general mandatory insurance requirements
\u00a0
Frequency of employee termination benefits advances
Specific table with rates differentiated by Company
\u00a0
Employee turnover frequency
Specific table with rates differentiated by Company
\u00a0
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTerminationBenefits", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page576-cflshid_246557-tag141546": { "value": "
Employee benefits
The Short-term employee benefits are those that will be fully paid within twelve months of the end of the year in which the employee provided his or her services. Such benefits include wages, salaries, social security contributions, holiday pay and sick pay.
The undiscounted value of short-term employee benefits to be paid to employees in consideration of employment services provided over the relevant period is accrued as personnel expenses.
There are two types of post-employment benefits:
\u2022Defined benefit plans
Defined benefit plans include employee termination benefits due to employees pursuant to Article 2120 of the Italian Civil Code limited to the portions of employee termination benefits accrued in the company up to 31 December 2006, for Group companies with at least 50 employees, as well as the portions of employee termination benefits accrued during the period in the case of Group companies with less than 50 employees, which continue to increase the value of the accumulated liability.
Under these plans, given that the amount of the benefit to be paid is only quantifiable following the termination of employment, the related effects on profit or loss or the financial position are recognised on the basis of actuarial calculations. In particular, the liability to be paid on cessation of employment is calculated using the projected unit credit method and then discounted to recognise the time value of money prior to the liability being settled. The liability recognised in the financial statements is based on calculations performed by independent actuaries. The calculation takes into account accrued employee termination benefits for services already rendered and is based on actuarial assumptions described in Note \"2.6 - Use of Estimates - Employee termination benefits\", to which reference should be made. Actuarial gains and losses at the end of each reporting period, based on the difference between the carrying amount of the liability and the present value of the Group's obligations at the end of the period, due to changes in the actuarial assumptions, are recognised directly in Other comprehensive income.
\u2022Defined contribution plans
Employee termination benefits fall within the scope of defined contribution plans provided the benefits vested subsequent to 1 January 2007 and were paid into a Supplementary Pension Fund or a Treasury Fund at INPS. Contributions to defined contribution plans are recognised in profit or loss when incurred, based on their nominal value.
The Termination benefits payable to employees are recognised as a liability when the entity gives a binding commitment, also on the basis of consolidated relationships and mutual undertakings with union representatives, to terminate the employment of an employee, or group of employees, prior to the normal retirement date or, alternatively, an employee or group of employees accepts an offer of benefits in consideration of a termination of employment. Termination benefits payable to employees are immediately recognised as personnel expenses.
Other long-term employment benefits consist of benefits not payable within twelve months of the end of the reporting period during which the employees provided their services. The net change in the value of any of the components of the liability during the reporting period is recognised in full in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page577-cflshid_247198-tag141548": { "value": "
Share-based payments
Share-based payment transactions may be settled in cash, with equity instruments, or with other financial instruments. Goods or services received or acquired through a share-based payment transaction are recognised at their fair value.
In the case of cash-settled share-based payment transactions:
\u25aaa liability is recognised as a matching entry at cost;
\u25aaif the fair value of the goods or services received or acquired cannot be reliably determined, this value must be estimated indirectly on the basis of the fair value of the liability;
\u25aathe fair value of the liability must be remeasured at the end of each reporting period, recognising any changes in fair value in profit or loss for the period.
In the case of equity-settled share-based payment transactions:
\u25aaan increase in shareholders' equity is recorded as a matching entry at cost;
\u25aaif the fair value of the goods or services received or acquired cannot be reliably determined, this value must be estimated indirectly on the basis of the fair value of the equity instruments granted at the grant date.
In the case of employee benefits, the expense is recognised in personnel expenses over the period in which the employee renders the relevant service.
Share-based payments
As further described in Note 13 - Additional information - Share-based payment arrangements, the valuation of the share-based payment arrangements in place within the Poste Italiane Group at the close of these financial statements was based mainly on the conclusions reached by actuaries external to the Group. The plan terms and conditions link the award of the related options to the occurrence of certain events, such as the achievement of performance targets and performance hurdles and, in certain areas of operation, compliance with certain capital adequacy and liquidity requirements. For these reasons, measurement of the liability, equity reserve and the corresponding economic effects involves the use of estimates based on current knowledge of factors that may change over time, potentially resulting in outcomes that may be significantly different from those taken into account in preparing these financial statements.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page577-cflshid_247198-tag141549": { "value": "
Recognition of revenue from contracts with customers
Revenue is recognised to the extent that reflects the consideration to which the Group expects to be entitled in exchange of those goods and/or services promised to the customer (transaction price).
The main revenue types of the Poste Italiane Group are described below, together with an indication of the time-frame in which the performance obligations202F203 will be met:
\u2022Revenue from mail, parcels and other: refers to services provided to customers through the retail and business channels; revenue generated through the retail channel is recognised at a point in time given the number of transactions handled through the various sales channels (post offices, call centres and on-line) and measured on
the basis of the rates applied; revenue generated through the business channel is generally earned as a result ofannual or multi-annual contracts and is recognised over time using the output method determined on the basis of shipments requested and handled. These contracts include elements of variable consideration (primarily volume discounts and penalties linked to the quality of service provided) estimated using the expected value method and recognised as a reduction from revenue.
\u2022Revenue from financial services refers to:
orevenue from placement and brokerage: these are recognised over time and measured on the basis of the volumes placed, quantified on the basis of commercial agreements with financial institutions. In terms of payment for the collection of postal savings, the agreement entered into with Cassa Depositi e Prestiti envisages payment of a variable consideration on achieving certain levels of inflows, determined annually on the basis of the volume of inflows and expected redemptions; certain commercial agreements, entered into with leading financial partners for the placement of financial products, envisage the return of placement fees in the event of early termination or surrender by the customer;
orevenue from current account and related services: these are recognised over time, measured on the basis of the service rendered (including the related services, e.g. bank transfers, securities deposits, etc.) and quantified on the basis of the contract terms and conditions offered to the customer;
orevenue from commissions on payment of bills by payment slip: this is recognised at a point in time given the number of transactions handled by post offices and quantified on the basis of the terms and conditions in the contract of sale.
\u2022Revenue from payments and mobile refers to:
\u2022card payments, collections and payments relating to PostePay primarily to the cards issued by Postepay and debit cards recognised at a point in time when issued and the services linked to them recognised over time as the service is used by the customer. These services include interchange fees recognised by international circuits on payment transactions with cards recognised over time. The item includes commissions for acquiring services rendered to merchants recognised over time due to the use of the service, F23 and F24 proxy acceptance services recognised over time due to the level of service rendered, and PagoPA collection services recognised at a point in time when the service is provided. Services provided by the LIS Group contribute to this item, which mainly include collection and payment services (including pay slip collection services) provided by LIS Pay and recognised at a point in time upon collection, and revenue from the processing of telephone top-ups and network fees and services paid by points of sale to LIS Holding recognised over time due to the use of the service;
omobile and fixed network telephony services, which include: revenue from \u201cstandard TLC service offers\u201d recognised over time based on the output method according to the traffic offer (voice, SMS and data); the revenue relating to the sale of fixed telephony offers recognised over time based on the output method according to the fee charged to the customer; revenue relating to the activation fees for SIMs and fixed telephony offers, recognised at a point in time at the time of service delivery;
oservices related to the supply of electricity and natural gas, the revenue from which is recognised at the time the electricity or gas is supplied to the end customer (over time). With regard to the sale of electricity, the services offered include, in addition to the commodity component, also the transport, metering and system charges components; with regard to the sale of natural gas, these services include, in addition to the commodity component, also the provision of transport services.
For revenue recognition purposes, the principle provides for the identification and quantification of the variable components of the consideration (discounts, rebates, price concessions, incentives, penalties and other similar) to include them to supplement or adjust the transaction price. Among the variable components of the fee, of particular importance are thepenalties (to be paid to the customer in the event of failure to achieve pre-established service levels), which are recognised by the Group as a direct decrease in revenue. Revenue from activities carried out in favour of or on behalf of the state is recognised on the basis of the amount effectively accrued, with reference to the laws and agreements in force, taking account, in any event, of the provisions contained in legislation regarding the public finances. The return on the current account deposits held by the MEF is determined using the effective interest method and is recognised as revenue from financial services. The same classification is applied to income from Eurozone government bonds, in which deposits paid into accounts by private customers and tax credits Law no. 77/2020 are invested.
The Poste Italiane Group disaggregates revenue from contracts with customers by type of good and/or service provided; revenue is therefore disaggregated in line with the operating segments identified within the company. For quantitative details on the distinction between revenue from contracts with customers recognised at a specific time or over time, see section \"4.3 Notes to the statement of profit or loss\".
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page579-cflshid_248271-tag141554": { "value": "
Government grants
Receivables for Government grants are recognised once they have been formally allocated to the Group by the public entity concerned and only if, based on the information available at the end of the year, there is reasonable assurance that the project to which the grant relates will be effectively carried out and completed in accordance with the conditions attached to the grant. Grants are recognised in profit or loss under Other operating income as follows: operating grants in proportion to the costs actually incurred for the project and accounted for and approved to the public entity; grants related to property, plant and equipment are recognised in proportion to the depreciation charged on the assets acquired and used to carry out the project.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page579-cflshid_248271-tag141552": { "value": "
Finance income and costs
Finance income and costs are recognised on an accruals basis based on the effective interest method, i.e. using an interest rate that discounts all cash flows relating to a given transaction in the same way.
Dividends are recognised as finance income when the right to receive payment is established, which generally corresponds with approval of the distribution by the Shareholders Meeting of the investee company. Otherwise, dividends from subsidiaries are accounted for as \"Other operating income\".
Transactions in currencies other than the euro are translated to euro using the exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at closing exchange rates of monetary assets and liabilities denominated in currencies other than the euro are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page579-cflshid_248271-tag141551": { "value": "
Finance income and costs
Finance income and costs are recognised on an accruals basis based on the effective interest method, i.e. using an interest rate that discounts all cash flows relating to a given transaction in the same way.
Dividends are recognised as finance income when the right to receive payment is established, which generally corresponds with approval of the distribution by the Shareholders Meeting of the investee company. Otherwise, dividends from subsidiaries are accounted for as \"Other operating income\".
Transactions in currencies other than the euro are translated to euro using the exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at closing exchange rates of monetary assets and liabilities denominated in currencies other than the euro are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page579-cflshid_248271-tag141550": { "value": "
Finance income and costs
Finance income and costs are recognised on an accruals basis based on the effective interest method, i.e. using an interest rate that discounts all cash flows relating to a given transaction in the same way.
Dividends are recognised as finance income when the right to receive payment is established, which generally corresponds with approval of the distribution by the Shareholders Meeting of the investee company. Otherwise, dividends from subsidiaries are accounted for as \"Other operating income\".
Transactions in currencies other than the euro are translated to euro using the exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at closing exchange rates of monetary assets and liabilities denominated in currencies other than the euro are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page579-cflshid_248271-tag141553": { "value": "
Dividends are recognised as finance income when the right to receive payment is established, which generally corresponds with approval of the distribution by the Shareholders Meeting of the investee company. Otherwise, dividends from subsidiaries are accounted for as \"Other operating income\".
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page579-cflshid_248271-tag141555": { "value": "
Earnings per share
In the Poste Italiane Group's consolidated financial statements, earnings per share is determined as follows:
Basic: basic earnings per share is calculated by dividing the Group's profit for the year by the weighted average number of Poste Italiane SpA's ordinary shares in issue during the period.
Diluted: at the date of preparation of these financial statements no financial instruments have been issued which have potentially dilutive characteristics203F204.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page580-cflshid_248738-tag141556": { "value": "Related parties
Related parties within the Group refer to Poste Italiane SpA's direct and indirect subsidiaries and associates. Related parties external to the Group include the MEF and its direct and indirect subsidiaries and associates. The Group's key management personnel are also classified as related parties, as are funds providing post-employment benefits to the Group's employees and the related entities. The state and public sector entities other than the MEF are not classified as related parties. Related party transactions do not include those deriving from financial assets and liabilities represented by instruments traded on organised markets.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page580-cflshid_248738-tag141558": { "value": "
2.6 USE OF ESTIMATES
The preparation of financial information requires the use of estimates and assumptions that can have a significant effect on the final values indicated in the financial statements and in the disclosure provided. The preparation of these estimates involves the use of available information and the adoption of subjective assessments, also based on historical experience, used for the formulation of reasonable assumptions for the recognition of operating events. Estimates and assumptions are periodically reviewed and the impact of any changes is reflected in the financial statements for the period in which the estimate is revised if the revision only influences the current period, or also in future periods if the revision influences both current and future periods. Due to their nature, the estimates and assumptions used may vary from year to year and, therefore, it cannot be excluded that in subsequent years, the values recorded in these Financial Statements may also vary significantly as a result of changes in the subjective valuations used.
Accounting treatments that require greater subjectivity in the preparation of estimates are described below, also taking into account the unique characteristics of the macroeconomic environment of reference recorded during the year (in line with ESMA requirements204F205).
Revenue from contracts with customers
The main factors in the recognition of revenue from contracts with customers include elements of variable consideration, particularly penalties (other than those related to compensation for damages). Elements of variable consideration are identified at the inception of the contract and estimated as of every close of the accounts for the entire contract term, to take into account new circumstances and changes in the circumstances already considered for the previous estimations. Elements of variable consideration include refund liabilities.
In the business relating to the sale of electricity and gas, revenue includes estimates of both turnover and allocations for supplies made to customers between the date of the last billing period and the end of the reporting year. Both of these estimation components are based on the application of internally developed algorithms that take into account the estimated volumes consumed by customers (given the historical billing information). As required by the relevant regulations, the allocation of revenue is subject to adjustment until the fifth subsequent year.
Provisions for risks and charges
The Group makes provisions for probable liabilities deriving from disputes with staff, suppliers, and third parties and, in general, for liabilities deriving from present obligations. These provisions cover the liabilities that could result from legal
action of varying nature, the impact on profit or loss of seizures incurred and not yet definitively assigned, and amounts expected to be refundable to customers where the final amount payable has yet to be determined.
Determination of the provisions for risks and charges involves the use of estimates based on current knowledge of factors that may change over time, potentially resulting in outcomes that may be significantly different from those taken into account in preparing these financial statements.
In order to reflect in the financial statements the risks arising from potential fraud perpetrated against Poste Italiane and, therefore, to determine the accounting impacts associated with the potential risk on tax credits, as described in greater detail in Note A10 - Tax credits Law no. 77/2020, without prejudice to compliance with Bank of Italy/Consob/Ivass Document no. 9 as to all other aspects related to the accounting recognition of the tax credits in question (see the section \"Tax credits Law no. 77/2020\" of paragraph 2.5 Material information on accounting standards for further details), the decision was taken to refer to the provisions of IAS 37 - Provisions, Contingent Assets and Contingent Liabilities, with regard to the measurement of the risks in question. The applicability of IAS 37, in order to reflect in the financial statements the risk of not being able to offset the tax credits on which fraud was ascertained, was considered because the possible failure to recover the carrying amount of the tax credits would not derive from a characteristic of the asset being measured or from significant increases in the credit risk after the initial recognition of the asset or, more simply, from the ascertained default of the debtor, but rather from the possibility that, for those ascertained to be cases of fraud, the liability of the assignee - even if a third party in good faith or an offended party to the offence - will also be called to account for assumptions other than the possible irregular use of the tax credit or for use to a greater extent than the tax credit received205F206. As a result of the in-depth analyses carried out on the tax credits acquired, also with the support of external legal, tax and accounting consultants, a specific provision was estimated, recorded consistently with the above and for clarity in the liability item \"Provisions for risks and charges\". It should be noted that the determination of the above-mentioned provision necessarily required the application of a significant degree of professional judgement, the main elements of uncertainty of which relate to the outcome of the proceedings under way, the identification of the receivables whose deductions have been assigned are effectively non-existent, and the outcome of the initiatives that will be activated by Poste Italiane to recover the amounts paid to the entities in respect of which cases of fraud have been ascertained.
Impairment and stage allocation for financial instruments
Below are the inputs, assumptions and estimation techniques used to calculate the impairment of financial assets measured at amortised cost and at fair value through other comprehensive income and to determine the stage allocation of financial instruments, the latter not applicable within the Poste Italiane Group for trade receivables in accordance with the Simplified Approach.
General description of the models utilised
The Group uses the general impairment model in accordance with risk ratings estimated on the basis of the type of counterparty:
\u2022Securities/deposits with Sovereign, Banking and Corporate counterparties: internal models for estimating risk parameters;
\u2022Public Administration and Central Counterparties: risk ratings deriving from agency ratings or average default rates for the sector.
Significant increase in credit risk
Based on the impairment model adopted by the Poste Italiane Group to meet the requirements of the accounting standard, any significant increase in credit risk associated with the financial instruments held, other than trade receivables, is determined on the basis of a change in the relevant credit rating between the time of the initial investment and the reporting date.
This change in notches is compared with a threshold that takes into account the following factors:
\u2022the rating of the financial instrument at the time of investment;
\u2022the rating of the financial instrument at the reporting date;
\u2022the seniority of the position within the portfolio (vintage factor);
\u2022an additive factor to mitigate the non-linearity of probability of default (\"PD\") with respect to the rating classes206F207;
\u2022a judgemental factor to be used only in the presence of sudden changes in the creditworthiness not yet reflected by the rating207F208.
The ratings used in stage allocation derive from internal models in the case of banking, sovereign and corporate counterparties, and external info providers in the case of Public Administration and Central Counterparties. Based on the above information, the Poste Italiane Group rebuts the presumption that there have been significant increases in credit risk following initial recognition, when financial assets are more than 30 days past due.
The Poste Italiane Group decided not to adopt the Low Credit Risk Exemption and to proceed instead with stage allocation of the financial instruments concerned.
Regarding trade receivables, given the adoption of the simplified approach under the new accounting standard, expected credit losses are determined throughout the lifetime of the instrument.
Definition of default
The Poste Italiane Group defines default on the basis of ad hoc assessments that take into account:
\u2022any payment delays;
\u2022market information such as a default rating by the rating agencies;
\u2022internal analyses of specific exposures.
Collective and individual provisions
The collective impairment of a homogeneous group of financial assets defines the expected credit loss (ECL) of the instrument, even though it cannot be associated with a specific exposure. Grouping takes place in relation to the type of counterparty on the basis of the estimated PD.
Individual provisions are considered only following the review of trade receivables for amounts in excess of a given threshold and only in relation to single receivables.
Forward looking information
According to the standard, the ECL calculation must also factor in forward looking components based on broad consensus scenarios.
The Poste Italiane Group incorporates forward looking information directly in the PD estimation. In particular, for sovereign counterparties, for which authoritative forward-looking estimates208F209 are available, these values are used to calculate PD; for other counterparties, on the other hand, the internal model adopted allows the input dataset needed to calculate PD to be completed from scenario values referring to some of the model variables. The objective of the approach is to estimate the unknown variables by using the historical correlation of the available information209F210.
ESG disclosure
The Sovereign, Bank and Corporate PD estimation models include variables reflecting Social and Governance factors defined from indicators provided by authoritative sources such as the UN and the World Bank. The Environmental factor is negligible for these purposes in view of the 1-year time horizon of the PD itself. In the context of BancoPosta's RFC, this factor is monitored through scenario analyses and verification of ratings provided by external agencies.
Estimation techniques used
Since events of default cannot be used, as they are not very frequent, to develop credit scoring models for Sovereign, Banking and Corporate counterparties, a shadow rating approach has been adopted.
This method entails the use of target variables related to the level of external rating produced by the agencies; the target is identified as the default rate linked to the rating level.
A key rating agency was selected to construct the target, taking into account both the large number of rated counterparties and the availability of historical data over what was deemed to be an adequate period of time.
The models have been constructed by extracting and utilising the following types of data for each country in the sample:
\u2022macroeconomic data;
\u2022market data: domestic equity indices, global energy/non-energy indices, Eurostoxx and S&P 500;
\u2022financial statement data.
The internal model estimate used a definition of default based on a payment delay of 90 days.
ECL measurement
Expected credit losses (ECL) are determined over a time horizon consistent with the stage level (12 months or lifetime) on the basis of the following factors:
\u2022Probability of Default (PD);
\u2022Loss Given Default (LGD);
\u2022Exposure at Default (EAD);
\u2022Time Factor (TF).
The main assumptions/choices adopted in the determination of the factors are as follows:
\u2022PD: as indicated from the start, a Point in Time (PIT) and forward-looking evaluation has been adopted;
\u2022LGD: values have been used consistent with the Internal Ratings-Based (IRB) Base Approach under the Basel guidelines (45% for senior risk assets, 75% for subordinated risk assets);
\u2022EAD: exposure calculated prospectively until maturity of the instrument, starting from the development of projected cash flows. In the development account was taken of specific indexation assumptions for every asset class (fixed-rate securities, variable-rate securities, inflation-indexed securities, etc.);
\u2022TF: the effective interest rate of each exposure was used as discount factor.
The assumptions adopted and set out above have led to an increase in the PD of Italy and other Sovereign counterparties in general compared to that used in the assessments in the Annual Report at 31 December 2022.
Trade receivables
The Group adopts the simplified approach to test for the impairment of trade receivables, on the basis of which provisions for credit losses are determined for an amount equal to expected losses throughout the lifetime of the receivable. Such approach is implemented through the following process:
\u2022based on total revenue or the historical credit exposure, all receivables or credit exposures exceeding a certain pre-established credit threshold are assessed analytically. The analytical evaluation of the exposures entails an analysis of the borrower's credit quality and solvency, as determined on the basis of internal and external supporting evidence;
\u2022for receivables falling below the threshold set, through the preparation of a matrix with the different impairment percentages estimated on the basis of historical losses, where they exist, or alternatively on the historical pattern of collections. In constructing the impairment matrix, receivables are grouped by homogeneous categories, based on their characteristics, to take into account the historical loss experience.
Collateral held and other credit risk mitigation instruments on trade receivables
To mitigate the risks arising from the extension of credit terms to its customers, the Group has implemented a policy and suitable guidelines that govern the management of trade receivables, the terms and conditions of payment applicable to customers and defines the corporate process aimed at checking the customer's creditworthiness, as well as the sustainability of the business risk inherent in the contract involving extended payment terms. Depending on the evaluations, the contracts entered into with customers may require a suitable guarantee. Guarantees are also requested if they are required by rules and regulations and/or implementing rules of specific services.
The Poste Italiane Group accepts mainly guarantees issued by primary banks or insurance companies. Alternatively, upon request of the customer and after a risk analysis, it accepts sureties issued by other institutions or security deposits through the opening of a postal escrow account. The Poste Italiane Group, as a rule, exempts the Public Administration from the provision of guarantees to secure trade receivables arising from transactions with it, save for the cases when such guarantees are mandatory by law or due to implementing rules of specific services.
For all the exposures evaluated individually, to calculate the provisions for doubtful debts, guarantees reduce the amount of the exposure at risk.
At 31 December 2023, the Group does not hold trade receivables secured by collateral or other risk mitigation instruments for which no loss provisions have been made.
Impairment tests of goodwill, cash generating units and equity investments
Goodwill and other non-current assets are tested for impairment in accordance with IAS 36 \u2013 Impairment of Assets. Impairment testing involves the use of estimates based on factors that may change over time, potentially resulting in effects that may be significantly different from prior year estimates.
In accordance with the relevant accounting standard, when it is not possible to estimate the recoverable amount of an individual asset, the Group identifies the smallest group of assets that generates cash inflows that are largely independent of those from other assets or groups of assets (Cash Generating Units - CGUs). The process of identifying such CGUs necessarily involves management's judgement as to the specific nature of the assets and business to which they belong and evidence that the cash inflows from the group of assets are closely interdependent and largely independent of those from other assets (or groups of assets). The number and scope of CGUs are systematically updated to reflect the effects of new aggregation and reorganisation operations carried out by the Group, as well as to take into account those external factors that could affect the ability of assets to generate independent cash inflows.
For the most significant impairment tests performed at 31 December 2023, the carrying amounts tested and the main assumptions underlying the tests performed are shown below:
Amount
(\u20acm)
Method used
Explicit forecast period
Growth rate
Discount rate
Goodwill of the Mail, Parcels and Distribution CGU
213
DCF
2024-2028
2.0%
7.48% (WACC)
Goodwill of the Payments and Mobile CGU
459
DCF
2024-2028
2.0%
9.54% (WACC)
Goodwill of the NET Insurance (Insurance) CGU
124
DDM
2024-2028
2.0%
9.31% (Ke)
Investment in Anima Holding SpA
219
DDM
2024-2026
2.0%
9.65% (Ke)
DCF: Discounted Cash Flow; DDM: Dividend Discount Model; WACC: Weighted Average Cost of Capital; Ke: cost of own capital
It should be noted that the discount rates at 31 December 2023 are up from those used for the previous year's estimates. Specifically, the increases amounted to 129 basis points for the Mail, Parcels and Distribution CGU, 90 basis points for the Payments and Mobile CGU, and 131 basis points for the investment in Anima Holding.
With reference to the external quantitative indicators of impairment at Group level, it should be noted that, at 31 December 2023, market capitalisation was higher than book equity, whereas with regard to internal source elements, it should be noted that consolidated results at December 2023 were above budget forecasts for the same period.
Mail, Parcels and Distribution CGU
The impairment test of the Mail, Parcels and Distribution CGU was performed, consistent with the previous year, at the consolidated level, including the companies within the same operating segment; the activities performed by the different companies and the resulting cash flows are highly interdependent, as commercial and strategic management decisions are made centrally at the level of the entire segment.
The value in use of the CGU was estimated on the basis of the 2024-2028 strategic plan approved by Poste Italiane SpA's Board of Directors on 19 March 2024. The economic forecasts used in the execution of the test also include, among the various characterising elements, forecasts for the planned investments that will be focused on achieving the CGU's automation and modernisation objectives, in continuity with what was achieved in 2023. Special importance is attached to investments classified as ESG, i.e. that comply with the reference principles of the Group's 8 Sustainability Pillars. Among the CGU's main investment projects are the Polis Project \"Homes of Digital Citizenship Services\", energy efficiency measures for real estate, and the automation and evolution of the sorting and delivery network from a green perspective.
In determining the terminal value, calculated on the basis of the last year of explicit forecasts, income was normalised. Reference was also made to the transfer prices that BancoPosta RFC is expected to pay for the services provided by Poste Italiane's distribution network.
The impairment test determined that the related carrying amounts are fair.
The impairment test is based on estimates and assumptions that present elements of uncertainty, also due to the current context characterised by significant volatility of the main market factors and significant uncertainty with regard to economic expectations, as well as the continuation of negative economic results and the decline of the postal market in which the Group operates; for this reason, sensitivity analyses were carried out. In particular, the impairment test showed the recoverability of the goodwill allocated to the CGU even by increasing the indicated discount rate by 100 basis points and jointly reducing the long-term growth factor by 20 basis points.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net invested capital of the CGU with a discount rate of 9.11%.
As in the past, in determining the value of properties used as post offices and sorting centres, Poste Italiane SpA's universal service obligation was taken into account, as was the inseparability of the cash flows generated from the properties that
provide this service, (which the Parent Company is required to operate throughout the country regardless of the expected profitability of each location); the unique nature of the operating processes involved and the substantial overlap between postal and financial activities within the same outlets, represented by post offices, were also considered. On this basis, the value in use of the Land and Buildings used in operations is relatively unaffected by changes in the commercial value of the properties concerned and, in certain critical market conditions, certain properties may have values that are significantly higher than their mere market value, without this having any impact on the cash flows or profitability of the Mail, Parcels and Distribution segment.
The fair value of the Parent Company's properties used in operations continued to be higher than their carrying amount, as confirmed by the property valuations carried out.
Payments and Mobile CGU
In performing the impairment test on the goodwill arising from the acquisition of the LIS Group, which took place in 2022, reference was made to the CGU comprising all the companies belonging to the Payments and Mobile segment as the only cash flow generator.
Following the completion of the LIS integration and reorganisation processes, in fact, the Payments and Mobile operating segment is based on single and integrated market and operational processes according to a unified approach. Consequently, the cash flows are largely independent of those generated by the other operating segments of the Poste Group, but closely interrelated within the segment. Therefore, LIS is no longer identifiable as a separate CGU (as determined for 31 December 2022).
In order to estimate the value in use of the CGU, reference was made to the 2024-2028 Strategic Plan approved by the Poste Italiane SpA's Board of Directors on 19 March 2024, as well as by the Boards of Directors of the respective companies belonging to the CGU for the portion pertaining to them. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses show the passing of the test by a wide margin even in scenarios significantly worse than the one used for the impairment test.
It should be noted that even if the impairment test were performed consistently with 31 December 2022 (CGU comprised of LIS Holding and LIS Pay), there would be no need to make impairment losses to the goodwill recognised in the financial statements.
Net Insurance (Insurance) CGU
Following the purchase of Net Insurance by Poste Vita through the corporate vehicle Net Holding in 2023 and the associated Purchase Price Allocation process, details of which are provided in Note 2.8 - Basis of consolidation, goodwill of \u20ac124 million emerged, equal to the remaining difference between the consideration transferred for the acquisition of Net Insurance by Net Holding and the fair value of the adjusted net assets acquired.
In performing the impairment test relating to the Net Insurance Group, reference was made to the CGU consisting of Net Insurance and Net Insurance Life as the cash generating unit.
To estimate the value in use of the CGU, reference was made to the 2024 -2028 Strategic Plan. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net assets of the CGU with a discount rate of 12.6%.
Investment in Anima Holding SpA
With reference to the impairment test on the investment in Anima Holding SpA, the future cash flows used in determining the value in use are those observable as consensus for the main balance sheet indicators (Revenue, Profit (loss) before tax and Net Profit) estimated by analysts for the next three years and available periodically on the company's website. At 31 December 2023, there was no need for impairment adjustments.
Other equity investments in associates
With reference to the impairment tests of the equity investments in the other associates Sennder, Financit, Replica Sim and Eurizon Capital Real Asset, no impairment adjustments were found to be necessary at 31 December 2023.
Depreciation and amortisation of property, plant and equipment and intangible assets
The cost of fixed assets is depreciated or amortised on a straight-line basis over the estimated useful life of the asset. The useful life is determined at the time of acquisition and is based on historical experience of similar investments, market conditions and expectations regarding future events that may have an impact, such as technological developments. The actual useful life may, therefore, differ from the estimated useful life.
The useful life of the Group's main asset classes is detailed below:
Property, plant and equipment
Years
% annual depreciation
Buildings
40-59
3%-2%
Structural improvements to own properties
18-31
6%-3%
Plant
8-23
13%-4%
Light constructions
10
10%
Equipment
3-10
33%-10%
Furniture and fittings
3-8
33%-13%
Electrical and electronic office equipment
3-10
33%-10%
Motor vehicles, automobiles, motorcycles
4-10
25%-10%
Leasehold improvements
estimated lease term*
-
Other assets
3-5
33%-20%
(*) Or the useful life of the improvement if shorter than the estimated lease term
Investment property
Years
% annual depreciation
Property
39-42
3%-2%
Structural improvements to own properties
17-18
6%
In the case of assets to be handed over, located on land held under concession or sub-concession, on expiry of the concession term, or whilst awaiting confirmation of renewal, any additional depreciation of assets takes into account the probable residual duration of the right to use the assets to provide public services, to be estimated on the basis of the framework agreements entered into with the Public Administration entity, the status of negotiations with the grantors and past experience.
Lastly, with regard to intangible assets, amortisation begins when the asset is available for use and extends systematically on a straight-line basis over its estimated useful life determined in a range of between 2 and 5 years.
Insurance liabilities
The main models, inputs and assumptions used to estimate insurance liabilities, i.e. future cash inflows and outflows related to insurance contracts, are summarised below.
Input data, assumptions and estimation techniques used
For contracts measured with the VFA model, the estimate of future flows related to the Liability for remaining coverage is made considering the following inputs:
\u2022Non-financial assumptions, such as mortality, lapses, conversions, expenses, etc. Expense assumptions, consistent with the principle, are parametrised taking into account only attributable costs;
\u2022Financial assumptions, such as returns on assets backing insurance liabilities, asset allocation, etc.;
\u2022Stochastic economic scenarios210F211 differentiated by separately managed account and by type of business.
The estimate of cash flows takes into account all the commitments of the companies in respect of the contracts under assessment through the elaboration of magnitudes such as gross premiums, other inflows other than premiums consistent with the quantification of the benefits under analysis, commissions, expenses, performance settlements, any residual Mathematical Provision at the end of the projection, and other outflows other than the above consistent with the quantification of the benefits under analysis.
For contracts measured with the BBA, the future fulfilment flows represent estimates of the future cash flows that will be generated by the natural fulfilment of the contracts by the companies and therefore include all possible cash flows that fall within the contract boundary.
Projected cash flows include claims paid, reimbursements for early termination of contracts, acquisition commissions, other directly attributable administrative expenses, other directly attributable acquisition expenses, premiums written and recoveries.
It should also be noted that, for onerous contracts measured through the PAA, future fulfilment flows are calculated using the same approach as for contracts measured through the BBA.
Liabilities for incurred claims include future fulfilment cash flows related to past services attributed to the contract group at the measurement date. These flows are defined as the sum of the following components:
\u2022Cash flows of undiscounted Best Estimate Liabilities (UBEL211F212), which are the best estimate of cash outflows for both reported claims and late claims;
\u2022Discount effect, calculated by discounting the cash flows referred to in the previous point using the defined discount curve;
\u2022Adjustment for non-financial risks, estimated using the methodology defined by the Group.
The process of allocating costs between \"attributable\" and \"non-attributable\" is done punctually according to the cost centres that incur them. The development and related deferral of costs follow the associated cash flow projections and the same recognition metrics adopted for the CSM release.
No changes have been made to the insurance liability valuation process since the transition date with the exception of the financial and technical assumptions, which are updated as necessary at each valuation date. Furthermore, the contracts in the portfolio do not provide for any discretionary elements on the part of the Company that could affect the expected flows.
Investment component
Assessments of the expected investment component to be included in the estimate of fulfilment future cash flows are made separately by product type. An estimate of the flow related to the Investment component is provided for both valuations at initial recognition of contract groups and for valuations at each reporting date.
For contracts with discretionary participation features and annuities in the accumulation phase, the expected investment component is equal to the lapse value net of penalties, whereby the estimate in future fulfilment flows is obtained as the difference between the estimated payout amount and the countervalue calculated on the basis of the lapse value net of penalties. For annuities that are certain to be paid out, the value of the investment component is not an estimate since it corresponds to the value of the benefits to be paid out, while for annuities that are certain to be paid out and pure risk products, there is no Investment component.
Method for determining the discount rate used
Below are details, by individual portfolio, of the discount curves used by the Poste Italiane Group in determining its insurance liabilities and the adjustments made to the reference Basic Risk Free Curve to take into account the counterparty's level of liquidity (Illiquidity Premiums):
\u2022in relation to the Separately managed account participating business and the Unit Linked portfolio connected to Separately managed accounts (Multi-class products), the Illiquidity Premium is calibrated on the basis of the composition of the reference portfolio (e.g. Separately managed accounts or Company) using approaches and metrics borrowed from the Solvency II approach;
\u2022in relation to the non-participating Life Business and for the Unit Linked portfolio not connected to Separately managed accounts, use was made of the values of Illiquidity Premiums consistent with the Volatility Adjustment value provided by EIOPA, in line with Solvency II. This approach is replicated in Net Insurance Life's pure risk business;
\u2022in relation to the P&C business relating to the companies Poste Assicura and Net Insurance, the Basic Risk Free curve is adopted, assuming an Illiquidity Premium consistent with the Volatility Adjustment value provided by EIOPA.
In operational terms, the Poste Italiane Group defined the curves at the date of initial recognition of the contract, in particular:
\u2022for the Life business related to contracts issued by Poste Vita, the initial recognition curve of contracts is set equal to the Based Risk Free curve with illiquidity premium related to the previous quarter;
\u2022for the P&C business relating to Poste Assicura contracts, the curve at initial recognition of contracts is the Based Risk Free of the previous year (31/12/t-1);
\u2022for the P&C business, relating to contracts issued by Net Insurance, and for the Life business, relating to contracts issued by Net Insurance Life, the curve at initial recognition of contracts is the Based Risk Free with Volatility Adjustment relative to the previous year (31/12/t-1)212F213.
For the BBA method, in order to calculate the interest accrued on the CSM at the reporting date, the Poste Italiane Group uses the forward curve determined with respect to the spot locked-in curve at the valuation date.
For the PAA model, the Poste Italiane Group has not made an adjustment for the effect of the time value of money and financial risk.
Method for determining the Adjustment for non-financial risk
The Poste Italiane Group adopts the percentile approach. The amount of the adjustment for non-financial risk is determined by considering the scope of technical risks to which group companies are exposed, using assessments borrowed from the Solvency II framework. In particular, the Adjustment for non-financial risk for contract groups belonging to the life business is estimated by taking into account the typical life business risk and underwriting risk exposures net of the loss-absorbing capacity of technical provisions (guaranteed minimum of products, where applicable) and gross of reinsurance. Operational risk and counterparty default risk are also excluded from the analyses.
For insurance contracts belonging to the P&C business, exposures to pricing risk, reserving risk, catastrophe risk, and the risk of early exits typical of the type of business are considered. In the P&C business, the Adjustment for non-financial risk is also determined, unlike in the Life business, for the Liability for incurred claims and Assets from outward reinsurance.
In calculating the amount of the Adjustment for non-financial risk, the separation between the insurance services component and the financing component is not applied for Poste Italiane Group companies.
Methods for determining the CSM coverage unit
The release to the Statement of profit or loss of the CSM over the life of the contracts is done through the definition of the Coverage Unit (CU). With reference to the Life business, the Poste Italiane Group determines the CSM release by adopting a Coverage Unit on the basis of a Volume-based driver, defined separately for each measurement model adopted:
\u2022BBA model: the CU is defined with a driver based on the sums insured, which are similar to the lump-sum death benefit for pure risk contracts, and on the mathematical provisions, for annuities (in the payout phase) not under the Separately managed accounts from Long-Term Care products;
\u2022VFA model: the CU for DPF contracts is defined using a driver based on mathematical provisions.
In the context of the CSM release pattern of the P&C business, for contracts valued with the BBA Model, the Group has decided to use for the business characterised by constant insured capital a release driver based on earned premiums gross of commissions (also considering the effect of any premium refunds and related commission reversals); with the exception of the P&C business characterised by decreasing insured capital (Salary-backed of Net Insurance), the use of a method based on insured sums was defined as for the Life business.
The CSM release percentage is defined by relating the volume-based drivers as defined above to the amount of volumes of these drivers projected over a time period that coincides with the duration of the group of insurance contracts.
For products measured with the VFA method, the Group considers an additional component (additional release) in the CSM release for the period aimed at capturing the differences between the margin result obtained with real-world financial assumptions (Real World curves), compared to that obtained with risk-neutral financial assumptions (Risk Neutral curves). This additional release is obtained from the difference between the period-end prospective CSM before release under the Real World assumption and the period-end prospective CSM before release under the Risk Neutral assumption.
As a result of the additional release, it is possible to achieve a CSM release that is more consistent with the financial performance of the underlying items of the insurance contracts and to obviate the systematic deferral of profit recognition in future years through coverage units.
Deferred tax assets
The recognition of deferred tax assets is based on the expectation of taxable income in future years. Assessments of expected taxable income depend on factors which may change over time, impacting on the valuation of the deferred tax assets in the statement of financial position.
Share-based payments
As further described in Note 13 - Additional information - Share-based payment arrangements, the valuation of the share-based payment arrangements in place within the Poste Italiane Group at the close of these financial statements was based mainly on the conclusions reached by actuaries external to the Group. The plan terms and conditions link the award of the related options to the occurrence of certain events, such as the achievement of performance targets and performance hurdles and, in certain areas of operation, compliance with certain capital adequacy and liquidity requirements. For these reasons, measurement of the liability, equity reserve and the corresponding economic effects involves the use of estimates based on current knowledge of factors that may change over time, potentially resulting in outcomes that may be significantly different from those taken into account in preparing these financial statements.
Employee termination benefits
The measurement of Employee termination benefits is also based on calculations performed by independent actuaries. The calculation takes account of termination benefits accrued for the period of service to date and is based on various demographic and economic-financial assumptions.
The main actuarial assumptions applied in the calculation of employee termination benefits at 31 December 2023, also based on the experience of each Group company and the reference best practice, are as follows:
Economic and financial assumptions
\u00a0
\u00a0
31.12.2023
\u00a0
Discount rate
3.08%
\u00a0
Inflation rate
2.00%
\u00a0
Annual rate of increase of employee termination benefits
3.00%
\u00a0
Demographic assumptions
\u00a0
\u00a0
31.12.2023
\u00a0
Mortality
ISTAT 2018
\u00a0
Disability
INPS tables broken down by age and gender
\u00a0
Retirement age
Achievement of general mandatory insurance requirements
\u00a0
Frequency of employee termination benefits advances
Specific table with rates differentiated by Company
\u00a0
Employee turnover frequency
Specific table with rates differentiated by Company
\u00a0
Determination of the lease liability
To determine the financial lease liability, the Group has opted to use an incremental borrowing rate (IBR) determined in line with a hypothetical loan obtained in the current economic environment, and applied to contract group with similar
remaining terms and to similar companies. In particular, each IBR takes account of the risk-free rate identified on the basis of factors such as the economic environment, currency, contract term and credit spread reflecting the companies' organisation and financial structure. The IBR associated with the commencement of the contract will be reviewed whenever there is a lease modification, meaning substantial and significant changes to the contract conditions over the life of the agreement (e.g. the lease term or the amount of future lease payments). The IBR table defined for contract group with similar residual duration and for similar reference companies is periodically monitored and updated at least once during the year.
With regard instead to determination of the lease term at the commencement date or of the remaining term at a later date (in the event of substantial and significant changes to contract conditions) and, in particular, for property leases, the Group uses a valuation approach based primarily on the expected duration of the obligation as per the agreement between the parties and/or in the legal framework of reference (Law 392 of 27 July 1978), and it expects an extension of the lease due to an interpretation/forecast of events, circumstances and future intentions, including of a strategic nature, of both the lessor and the lessee. This has resulted in a set of rules for determining the lease term, to be applied to leased properties classified previously in three distinct clusters: properties where the lease is subject to legal restrictions and high commercial-value properties; properties for civilian use, such as the company accommodation for Group employees and executives; and other properties used in operations.
The lease term for all of the other agreements was set as equal to the duration of the obligation agreed upon between the parties, in keeping with future intent in wanting and being able to complete the term and past experience.
Options on minority interests213F214
In the context of particular corporate transactions, there are call and put options that will allow Poste Italiane to purchase, at certain future dates, shares held by minority shareholders. The exercise price of these options is generally determined on the basis of a formula that provides for the application of a multiplier to certain economic/equity targets of the company acquired. For said cases in the consolidated financial statements, a financial liability has been recognised (in addition to the portion of equity attributable to non-controlling interests), to take account of the possible exercise of options, as matching entry to Group's equity, the value of which depends on estimates made internally and which could change even significantly in the current and future years. Subsequent changes in the value of the financial liability will be reflected in the Group's statement of profit or loss.
For details of the corporate transactions from which the need to recognise this financial liability arose, see Note B8 - Financial Liabilities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page580-cflshid_248738-tag141557": { "value": "
Revenue from contracts with customers
The main factors in the recognition of revenue from contracts with customers include elements of variable consideration, particularly penalties (other than those related to compensation for damages). Elements of variable consideration are identified at the inception of the contract and estimated as of every close of the accounts for the entire contract term, to take into account new circumstances and changes in the circumstances already considered for the previous estimations. Elements of variable consideration include refund liabilities.
In the business relating to the sale of electricity and gas, revenue includes estimates of both turnover and allocations for supplies made to customers between the date of the last billing period and the end of the reporting year. Both of these estimation components are based on the application of internally developed algorithms that take into account the estimated volumes consumed by customers (given the historical billing information). As required by the relevant regulations, the allocation of revenue is subject to adjustment until the fifth subsequent year.
C1 \u2013 REVENUE FROM MAIL, PARCELS AND OTHER (\u20ac3,746 million)
This item breaks down as follows:
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Mail
1,753
1,749
3
Parcels
1,395
1,395
0
Other revenue
281
190
91
\u00a0
\u00a0
-
Total external revenue
3,429
3,335
94
\u00a0
\u00a0
Universal Service compensation
262
262
-
Publisher tariff subsidies
55
54
1
\u00a0
\u00a0
Total revenue
3,746
3,651
95
of which Revenue from contracts with customers
3,120
3,179
(59)
recognised at a point in time
376
371
5
recognised over time
2,744
2,808
(64)
External revenue showed an increase compared to the financial year 2022, largely attributable to the capital gain of approximately \u20ac109 million related to the sale of the controlling interest in the company sennder (see Note 2.8 - Basis of consolidation).
Universal Service compensation relates to amounts paid by the MEF to cover the costs of fulfilling the USO. Annual compensation, amounting to \u20ac262 million, is established in the 2020-2024 Contratto di Programma (Service Contract) in force on 1 January 2020.
Publisher tariff subsidies241F242 relate to the amount receivable by Poste Italiane from the Cabinet Office - Publishing department as compensation for the discounts applied to publishers and non-profit organisations when sending mail. The compensation is determined on the basis of the tariffs set in the decree issued by the Ministry of Enterprise and Made in Italy (former MiSE) in agreement with the Ministry of the Economy and Finance, on 21 October 2010 and Law Decree 63 of 18 May 2012, as converted into Law 103 of 16 July 2012. With AGCom Resolution 454/22/CONS of 30 December 2022, the new universal basic tariffs of the subsidised publishing products included in the Universal Service were defined. The Resolution provided for a gradual increase in the basic tariffs with a consequent increase in the compensation received by the Company per item sent at a subsidised rate. The amount of subsidies that the Company has granted is covered in the 2023 State Budget.
C2 \u2013 NET REVENUE FROM FINANCIAL SERVICES (\u20ac5,229 million)
Net revenue from financial services regards services provided mainly within the Parent Company's BancoPosta RFC and the subsidiary BancoPosta Fondi SGR.
This item breaks down as follows:
tab. C2 - Revenue from Financial Services
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
FY 2023
FY 2022
Changes
\u00a0
Revenue from financial services
5,516
4,684
832
Income from financial activities
271
428
(157)
Other operating income
7
13
(6)
Expenses from financial activities
(566)
(187)
(379)
Total
\u00a0
5,229
4,938
290
of which Revenue from contracts with customers
2,643
2,520
123
recognised at a point in time
231
233
(2)
recognised over time
2,412
2,288
124
Revenue from financial services breaks down as follows:
tab. C2.1 - Revenue from financial services
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
\u00a0
Income from investment of postal current account deposits and free cash
2,702
2,008
694
Fees for collection of postal savings deposits
1,740
1,600
140
Other revenue from current account services
426
426
1
Commissions on payment of bills by payment slip
208
216
(8)
Distribution of loan products
157
192
(35)
Income from delegated services
91
89
2
Mutual fund management fees
143
118
25
Money transfers
17
13
4
Other
32
22
10
Total
5,516
4,684
832
Revenue from financial services showed an increase compared to the year 2022, mainly due to income from investment of postal current account deposits and free cash and the remuneration of postal savings deposits.
Specifically:
\u2022Income from investment of postal current account deposits and free cash breaks down as follows:
tab. C2.1.1 - Income from investment of postal current account deposits and free cash
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Income from investments in securities
1,962
1,482
480
Interest income on securities at amortised cost
780
677
103
Interest income on securities at FVOCI
936
821
115
Interest income (expense) on asset swaps of CFH on securities at FVOCI and AC
5
20
(15)
Interest income (expense) on asset swaps of FVH on securities at FVOCI and AC
171
(79)
250
Interest income on repurchase agreements
70
43
27
Income from investments in tax credits
309
273
36
Interest income on tax credits at AC
309
189
120
Interest income on tax credits at FVTOCI
-
84
(84)
Income from deposits held with the MEF
446
252
194
Remuneration of current account deposits (deposited with the MEF)
441
323
118
Differential on derivatives stabilising returns
5
(71)
76
Portion of interest income on own liquidity (finance income)
(15)
1
(6)
Other income
0
2
-
Total
2,702
2,008
694
The increase in this item compared to the previous year is mainly attributable to the income from investments in securities and the income from deposits held with the MEF.
Income from investments in securities relates to interest earned on investment of deposits paid into postal current accounts by private customers. The amount of income includes the impact of the interest rate hedge. The increase in this item compared to financial year 2022 was mainly due to the effects of the upward shift in the interest rate curve, which had a positive effect on the differentials exchanged in fair value hedge transactions, and to the higher profitability of both the new securities that entered the portfolio in financial year 2023, and those subject to the broader restructuring of fair value hedges as described in Note A6 - Financial assets.
Income from investments in tax credits relates to interest accrued during the year on the investments described in Note A10 - Tax Credits Law no. 77/2020.
Income from deposits held with the MEF primarily represents accrued interest for the year on amounts deposited at Public Administration entities, remunerated at a variable rate as described in Note A6 - Financial assets. The increase compared to 31 December 2022 is mainly due to the rise in the interest rate curve.
\u2022Fees for the collection of postal savings deposits relates to remuneration for the provision and redemption of Interest-bearing Postal Certificates and payments into and withdrawals from Postal Savings Books. This service is provided by Poste Italiane SpA on behalf of Cassa Depositi e Prestiti. The increase in this item reflects the consideration accrued at the relevant date, under the Supplementary and Amending Deed of 30 January 2024, effective retroactively from 1 January 2023 to 31 December 2023, to the Agreement with Cassa Depositi e Prestiti renewed on 23 December 2021 for the period 2021-2024
\u2022Revenue from current account services primarily relates to charges on current accounts, fees on amounts collected and on statements of account sent to customers, annual fees on debit cards and related transactions.
\u2022Revenue from the distribution of loan products relates to commissions received by the Parent Company on the placement of personal loans and mortgages on behalf of third parties.
Income from financial activities breaks down as follows:
tab. C2.2 - Income from financial activities
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Income from financial instruments at FVTOCI
164
262
(98)
Realised gains
164
262
(98)
\u00a0
Income from financial instruments at amortised cost
48
129
(82)
Realised gains
48
129
(82)
\u00a0
Income from financial instruments at FVTPL
8
2
6
Fair value gains
7
1
6
Realised gains
1
-
1
Income from financial instruments - cash flow hedges
-
1
(1)
Fair value gains
-
1
(1)
\u00a0
Income from fair value hedges
0
17
(16)
Fair value gains
0
17
(16)
\u00a0
-
Foreign exchange gains
3
5
(2)
Fair value gains
1
1
(0)
Realised gains
2
4
(2)
\u00a0
Other income
48
12
36
\u00a0
Total
271
428
(157)
The decrease in Other income from financial activities, compared to the previous year, was mainly due to lower realised gains from financial instruments at FVTOCI and at amortised cost, partially offset by higher other income for interest accrued on guarantee deposits paid to counterparties .
Expenses from financial activities breaks down as follows:
tab. C2.3 - Expenses from financial activities
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Expenses from financial instruments at FVTOCI
54
4
50
Realised losses
54
4
50
\u00a0
Expenses from financial instruments at amortised cost
-
53
(53)
Realised losses
-
53
(53)
\u00a0
Expenses from financial instruments at FVTPL
7
2
5
Losses from valuation
4
1
3
Realised losses
3
0
2
Interest expense
505
127
378
Interest on customers' deposits
219
85
133
Interest expense on repurchase agreements
128
14
113
Due to the Parent Company
-
4
(4)
on guarantee deposits
158
24
134
Interest expense on own liquid funds (finance costs)
-
(1)
1
\u00a0
Total
566
187
379
Expenses from financial activities increased compared to the year 2022 mainly due to the effect of the change in the interest rate curve, which generated higher interest expenses on collateral deposits received from counterparties, on repurchase agreements and on postal current accounts of public customers.
C3 \u2013 NET REVENUE FROM INSURANCE SERVICES (\u20ac1,567 million)
tab. C3 - Net revenue from Insurance Services
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Revenue from insurance contracts issued
2,550
2,456
94
Costs arising from insurance contracts issued
(1,058)
(805)
(253)
Revenue/(costs) from outward reinsurance
(15)
(8)
(7)
Income and (expenses) from financial operations and other income/expenses
6,458
(1,532)
7,990
Net financial (costs)/revenue relating to insurance contracts issued
(6,373)
1,539
(7,911)
Net financial revenue/(costs) related to outward reinsurance
5
(0)
5
Total
1,567
1,650
(83)
Net revenue from insurance services decreased compared to 2022 from \u20ac1,650 million to \u20ac1,567 million, mainly due to the lower CSM release recognised during the period: \u20ac1,285 million compared to \u20ac1,515 million in the year of comparison; in particular, in the year 2022, the release had benefited from the additional yield related to the differential between the risk-neutral curve used to value the CSM and the actual real world curve. This decrease was only partly offset by the positive contribution of income, net of the portion reversed to policyholders, from financial operations (+\u20ac79 million compared to financial year 2022), given the improved financial dynamics and the higher release of the Adjustment for non-financial risk (+\u20ac31 million) compared to the same period of 2022.
The breakdown of revenue from insurance contracts and costs arising from insurance contracts is shown below.
The breakdown of Revenue from insurance contracts issued is as follows:
tab. C3.1 - Revenue from insurance contracts issued
Description(\u20acm)
FY 2023
FY 2022
Changes
Contracts measured according to GMM and VFA
2,137
2,139
(2)
\u00a0
Change in Liability for remaining coverage
1,923
1,965
(41)
Incurred claims and other insurance service costs expected
516
360
156
Changes in the adjustment for non-financial risks
120
89
31
Contractual service margin recognised in the statement of profit or loss for services provided
1,285
1,515
(231)
Other changes
2
0
2
\u00a0
Acquisition costs of recovered insurance contracts
214
174
40
\u00a0
Contracts measured according to the PAA
413
317
96
\u00a0
Total
2,550
2,456
94
At the end of the reporting period, insurance revenue from contracts measured upon transition to IFRS 17 using the Fair Value Approach amounted to \u20ac58 million, for contracts subject to carve-out242F243 amounted to \u20ac1,909 million, with the remainder relating to revenue from new contracts recognised in the period and contracts for which the Full Retrospective Approach was adopted.
The breakdown of Costs from insurance contracts issued is as follows:
tab. C3.2 - Costs from insurance contracts issued
Description(\u20acm)
FY 2023
FY 2022
Changes
Contracts measured according to GMM and VFA
703
533
170
\u00a0
Incurred claims and other directly attributable costs
346
360
(14)
Changes in the liability for incurred claims
146
(1)
147
Losses on onerous contracts and recovery of such losses
(3)
0
(3)
Amortisation of insurance contract acquisition costs
214
174
40
Other
(1)
-
(1)
\u00a0
Contracts measured according to the PAA
355
271
84
\u00a0
Total
1,058
805
253
The breakdown of revenue/(costs) from outward reinsurance is as follows:
tab. C3.3\u2013 Revenue/(costs) from outward reinsurance
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Outward reinsurance measured under GMM
(48)
0
(48)
\u00a0
Change in asset for remaining coverage
(48)
0
(48)
Amount of claims and other recoverable costs expected
(35)
0
(35)
Changes in the adjustment for non-financial risks
(4)
(0)
(4)
Contractual service margin recognised in the statement of profit or loss for services received
(6)
(0)
(6)
Other
(3)
0
(3)
\u00a0
Other costs directly attributable to outward reinsurance
0
0
0
\u00a0
Outward reinsurance measured under PAA
(41)
(7)
(34)
\u00a0
Total costs from outward reinsurance
(89)
(7)
(82)
\u00a0
Effects of changes in default risk by reinsurers
0
0
0
Amount of claims and other expenses recovered
0
0
(0)
Changes in the asset for incurred claims
38
(1)
39
Other recoveries
2
0
2
\u00a0
Revenue from outward reinsurance measured under PAA
33
(0)
\u00a0
Total
(15)
(8)
(7)
The breakdown of Income and (Expenses) from financial operations and other income/expenses is as follows:
tab. C3.4 - Income and (expenses) from financial operations and other income/expenses
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Income from financial operations and other income
6,982
4,434
2,549
Expenses from financial operations and other expenses
(525)
(5,966)
5,441
\u00a0
Total
6,458
(1,532)
7,990
tab. C3.4.1 - Income from financial operations and other income
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Income from financial instruments at FVTOCI
3,217
3,613
(396)
Interest
3,202
3,549
(347)
Realised gains
15
64
(49)
Dividends
0
-
Income from financial instruments at amortised cost
6
6
0
Interest
6
6
0
Realised gains
-
-
-
Income from financial instruments at FVPL
3,600
693
2,907
Interest
553
321
233
Fair value gains
2,893
335
2,557
Realised gains
154
37
117
Other income
160
122
38
\u00a0
Total
6,982
4,434
2,549
The increase in Income from financial operations and other income is mainly attributable to valuation gains from financial instruments at FVPL.
tab. C3.4.2 - Expenses from financial operations and other expenses
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Expenses from financial instruments at FVOCI
46
252
(206)
Interest
0
5
(5)
Realised losses
46
247
(202)
\u00a0
Expenses from financial instruments at FVPL
469
5,711
(5,242)
Losses from valuation
289
5,382
(5,093)
Realised losses
181
329
(149)
\u00a0
Impairment losses/(reversals of impairment losses) due to credit risk
7
(4)
11
Other expenses
3
(14)
17
\u00a0
-
Total
525
5,966
(5,441)
The decrease in Expenses from financial operations and other expenses is mainly attributable to expenses from the valuation of financial instruments at FVPL.
These valuation gains and losses, related almost entirely to the investments included in the separately managed accounts, were almost entirely relegated to policyholders through the mirroring mechanism and included in the item \"Net financial (costs)/revenue relating to insurance contracts issued\".
tab. C3.5 - Net financial (costs)/revenue relating to insurance contracts issued
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Accrued interest
(12)
0
(12)
Effects of changes in interest rates and other financial assumptions
(1)
1
(2)
Change in fair value of underlying assets of contracts measured under VFA
(6,359)
1,538
(7,897)
Effects of exchange rate changes
0
0
0
Other
0
0
0
Total
(6,373)
1,539
(7,911)
tab. C3.6 - Net financial revenue/(costs) related to outward reinsurance
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Accrued interest
5
0
5
Effects of changes in interest rates and other financial assumptions
0
(0)
0
Effects of exchange rate changes
0
0
0
Other
0
0
0
Total
5
(0)
5
C4 \u2013 REVENUE FROM PAYMENTS AND MOBILE SERVICES (\u20ac1,586 million)
This item breaks down as follows:
tab. C4 - Revenue from payments and mobile
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Electronic money
623
581
42
Fees for issue and use of prepaid cards
409
423
(14)
Acquiring
60
47
13
Other fees
154
111
44
Mobile
327
317
11
Payments services
473
233
240
Payment Slips
280
68
212
Commissions for processing tax payments using forms F23/F24
46
48
(1)
Money transfers
147
109
38
Other products and services
(0)
9
(9)
Revenue from energy services
157
12
145
Other operating income
6
4
1
\u00a0
Total
1,586
1,147
440
of which Revenue from contracts with customers
1,306
1,127
179
recognised at a point in time
438
485
(47)
recognised over time
868
642
226
These consist of revenue from card payment products and payment services, revenue from mobile telephony services and revenue from the energy segment, which are mainly generated by PostePay SpA and its direct subsidiaries.
Revenue from payments and mobile services posted an increase of \u20ac440 million compared to the same period of last year, with a positive contribution from all segments. Of particular note is the growth in revenue from collection and reporting services, taking into account the full 2023 contribution of LIS Holding and Lis Pay (consolidated from September 2022), and revenue from the energy segment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page581-cflshid_249228-tag141559": { "value": "
Impairment and stage allocation for financial instruments
Below are the inputs, assumptions and estimation techniques used to calculate the impairment of financial assets measured at amortised cost and at fair value through other comprehensive income and to determine the stage allocation of financial instruments, the latter not applicable within the Poste Italiane Group for trade receivables in accordance with the Simplified Approach.
General description of the models utilised
The Group uses the general impairment model in accordance with risk ratings estimated on the basis of the type of counterparty:
\u2022Securities/deposits with Sovereign, Banking and Corporate counterparties: internal models for estimating risk parameters;
\u2022Public Administration and Central Counterparties: risk ratings deriving from agency ratings or average default rates for the sector.
The simplified approach is applied to trade receivables, as described in greater detail later.
Significant increase in credit risk
Based on the impairment model adopted by the Poste Italiane Group to meet the requirements of the accounting standard, any significant increase in credit risk associated with the financial instruments held, other than trade receivables, is determined on the basis of a change in the relevant credit rating between the time of the initial investment and the reporting date.
This change in notches is compared with a threshold that takes into account the following factors:
\u2022the rating of the financial instrument at the time of investment;
\u2022the rating of the financial instrument at the reporting date;
\u2022the seniority of the position within the portfolio (vintage factor);
\u2022an additive factor to mitigate the non-linearity of probability of default (\"PD\") with respect to the rating classes206F207;
\u2022a judgemental factor to be used only in the presence of sudden changes in the creditworthiness not yet reflected by the rating207F208.
The ratings used in stage allocation derive from internal models in the case of banking, sovereign and corporate counterparties, and external info providers in the case of Public Administration and Central Counterparties. Based on the above information, the Poste Italiane Group rebuts the presumption that there have been significant increases in credit risk following initial recognition, when financial assets are more than 30 days past due.
The Poste Italiane Group decided not to adopt the Low Credit Risk Exemption and to proceed instead with stage allocation of the financial instruments concerned.
Regarding trade receivables, given the adoption of the simplified approach under the new accounting standard, expected credit losses are determined throughout the lifetime of the instrument.
Definition of default
The Poste Italiane Group defines default on the basis of ad hoc assessments that take into account:
\u2022any payment delays;
\u2022market information such as a default rating by the rating agencies;
\u2022internal analyses of specific exposures.
Collective and individual provisions
The collective impairment of a homogeneous group of financial assets defines the expected credit loss (ECL) of the instrument, even though it cannot be associated with a specific exposure. Grouping takes place in relation to the type of counterparty on the basis of the estimated PD.
Individual provisions are considered only following the review of trade receivables for amounts in excess of a given threshold and only in relation to single receivables.
Forward looking information
According to the standard, the ECL calculation must also factor in forward looking components based on broad consensus scenarios.
The Poste Italiane Group incorporates forward looking information directly in the PD estimation. In particular, for sovereign counterparties, for which authoritative forward-looking estimates208F209 are available, these values are used to calculate PD; for other counterparties, on the other hand, the internal model adopted allows the input dataset needed to calculate PD to be completed from scenario values referring to some of the model variables. The objective of the approach is to estimate the unknown variables by using the historical correlation of the available information209F210.
ESG disclosure
The Sovereign, Bank and Corporate PD estimation models include variables reflecting Social and Governance factors defined from indicators provided by authoritative sources such as the UN and the World Bank. The Environmental factor is negligible for these purposes in view of the 1-year time horizon of the PD itself. In the context of BancoPosta's RFC, this factor is monitored through scenario analyses and verification of ratings provided by external agencies.
Estimation techniques used
Since events of default cannot be used, as they are not very frequent, to develop credit scoring models for Sovereign, Banking and Corporate counterparties, a shadow rating approach has been adopted.
This method entails the use of target variables related to the level of external rating produced by the agencies; the target is identified as the default rate linked to the rating level.
A key rating agency was selected to construct the target, taking into account both the large number of rated counterparties and the availability of historical data over what was deemed to be an adequate period of time.
The models have been constructed by extracting and utilising the following types of data for each country in the sample:
\u2022macroeconomic data;
\u2022market data: domestic equity indices, global energy/non-energy indices, Eurostoxx and S&P 500;
\u2022financial statement data.
The internal model estimate used a definition of default based on a payment delay of 90 days.
ECL measurement
Expected credit losses (ECL) are determined over a time horizon consistent with the stage level (12 months or lifetime) on the basis of the following factors:
\u2022Probability of Default (PD);
\u2022Loss Given Default (LGD);
\u2022Exposure at Default (EAD);
\u2022Time Factor (TF).
The main assumptions/choices adopted in the determination of the factors are as follows:
\u2022PD: as indicated from the start, a Point in Time (PIT) and forward-looking evaluation has been adopted;
\u2022LGD: values have been used consistent with the Internal Ratings-Based (IRB) Base Approach under the Basel guidelines (45% for senior risk assets, 75% for subordinated risk assets);
\u2022EAD: exposure calculated prospectively until maturity of the instrument, starting from the development of projected cash flows. In the development account was taken of specific indexation assumptions for every asset class (fixed-rate securities, variable-rate securities, inflation-indexed securities, etc.);
\u2022TF: the effective interest rate of each exposure was used as discount factor.
The assumptions adopted and set out above have led to an increase in the PD of Italy and other Sovereign counterparties in general compared to that used in the assessments in the Annual Report at 31 December 2022.
Trade receivables
The Group adopts the simplified approach to test for the impairment of trade receivables, on the basis of which provisions for credit losses are determined for an amount equal to expected losses throughout the lifetime of the receivable. Such approach is implemented through the following process:
\u2022based on total revenue or the historical credit exposure, all receivables or credit exposures exceeding a certain pre-established credit threshold are assessed analytically. The analytical evaluation of the exposures entails an analysis of the borrower's credit quality and solvency, as determined on the basis of internal and external supporting evidence;
\u2022for receivables falling below the threshold set, through the preparation of a matrix with the different impairment percentages estimated on the basis of historical losses, where they exist, or alternatively on the historical pattern of collections. In constructing the impairment matrix, receivables are grouped by homogeneous categories, based on their characteristics, to take into account the historical loss experience.
Collateral held and other credit risk mitigation instruments on trade receivables
To mitigate the risks arising from the extension of credit terms to its customers, the Group has implemented a policy and suitable guidelines that govern the management of trade receivables, the terms and conditions of payment applicable to customers and defines the corporate process aimed at checking the customer's creditworthiness, as well as the sustainability of the business risk inherent in the contract involving extended payment terms. Depending on the evaluations, the contracts entered into with customers may require a suitable guarantee. Guarantees are also requested if they are required by rules and regulations and/or implementing rules of specific services.
The Poste Italiane Group accepts mainly guarantees issued by primary banks or insurance companies. Alternatively, upon request of the customer and after a risk analysis, it accepts sureties issued by other institutions or security deposits through the opening of a postal escrow account. The Poste Italiane Group, as a rule, exempts the Public Administration from the provision of guarantees to secure trade receivables arising from transactions with it, save for the cases when such guarantees are mandatory by law or due to implementing rules of specific services.
For all the exposures evaluated individually, to calculate the provisions for doubtful debts, guarantees reduce the amount of the exposure at risk.
At 31 December 2023, the Group does not hold trade receivables secured by collateral or other risk mitigation instruments for which no loss provisions have been made.
Impairment tests of goodwill, cash generating units and equity investments
Goodwill and other non-current assets are tested for impairment in accordance with IAS 36 \u2013 Impairment of Assets. Impairment testing involves the use of estimates based on factors that may change over time, potentially resulting in effects that may be significantly different from prior year estimates.
In accordance with the relevant accounting standard, when it is not possible to estimate the recoverable amount of an individual asset, the Group identifies the smallest group of assets that generates cash inflows that are largely independent of those from other assets or groups of assets (Cash Generating Units - CGUs). The process of identifying such CGUs necessarily involves management's judgement as to the specific nature of the assets and business to which they belong and evidence that the cash inflows from the group of assets are closely interdependent and largely independent of those from other assets (or groups of assets). The number and scope of CGUs are systematically updated to reflect the effects of new aggregation and reorganisation operations carried out by the Group, as well as to take into account those external factors that could affect the ability of assets to generate independent cash inflows.
For the most significant impairment tests performed at 31 December 2023, the carrying amounts tested and the main assumptions underlying the tests performed are shown below:
Amount
(\u20acm)
Method used
Explicit forecast period
Growth rate
Discount rate
Goodwill of the Mail, Parcels and Distribution CGU
213
DCF
2024-2028
2.0%
7.48% (WACC)
Goodwill of the Payments and Mobile CGU
459
DCF
2024-2028
2.0%
9.54% (WACC)
Goodwill of the NET Insurance (Insurance) CGU
124
DDM
2024-2028
2.0%
9.31% (Ke)
Investment in Anima Holding SpA
219
DDM
2024-2026
2.0%
9.65% (Ke)
DCF: Discounted Cash Flow; DDM: Dividend Discount Model; WACC: Weighted Average Cost of Capital; Ke: cost of own capital
It should be noted that the discount rates at 31 December 2023 are up from those used for the previous year's estimates. Specifically, the increases amounted to 129 basis points for the Mail, Parcels and Distribution CGU, 90 basis points for the Payments and Mobile CGU, and 131 basis points for the investment in Anima Holding.
With reference to the external quantitative indicators of impairment at Group level, it should be noted that, at 31 December 2023, market capitalisation was higher than book equity, whereas with regard to internal source elements, it should be noted that consolidated results at December 2023 were above budget forecasts for the same period.
Mail, Parcels and Distribution CGU
The impairment test of the Mail, Parcels and Distribution CGU was performed, consistent with the previous year, at the consolidated level, including the companies within the same operating segment; the activities performed by the different companies and the resulting cash flows are highly interdependent, as commercial and strategic management decisions are made centrally at the level of the entire segment.
The value in use of the CGU was estimated on the basis of the 2024-2028 strategic plan approved by Poste Italiane SpA's Board of Directors on 19 March 2024. The economic forecasts used in the execution of the test also include, among the various characterising elements, forecasts for the planned investments that will be focused on achieving the CGU's automation and modernisation objectives, in continuity with what was achieved in 2023. Special importance is attached to investments classified as ESG, i.e. that comply with the reference principles of the Group's 8 Sustainability Pillars. Among the CGU's main investment projects are the Polis Project \"Homes of Digital Citizenship Services\", energy efficiency measures for real estate, and the automation and evolution of the sorting and delivery network from a green perspective.
In determining the terminal value, calculated on the basis of the last year of explicit forecasts, income was normalised. Reference was also made to the transfer prices that BancoPosta RFC is expected to pay for the services provided by Poste Italiane's distribution network.
The impairment test determined that the related carrying amounts are fair.
The impairment test is based on estimates and assumptions that present elements of uncertainty, also due to the current context characterised by significant volatility of the main market factors and significant uncertainty with regard to economic expectations, as well as the continuation of negative economic results and the decline of the postal market in which the Group operates; for this reason, sensitivity analyses were carried out. In particular, the impairment test showed the recoverability of the goodwill allocated to the CGU even by increasing the indicated discount rate by 100 basis points and jointly reducing the long-term growth factor by 20 basis points.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net invested capital of the CGU with a discount rate of 9.11%.
As in the past, in determining the value of properties used as post offices and sorting centres, Poste Italiane SpA's universal service obligation was taken into account, as was the inseparability of the cash flows generated from the properties that
provide this service, (which the Parent Company is required to operate throughout the country regardless of the expected profitability of each location); the unique nature of the operating processes involved and the substantial overlap between postal and financial activities within the same outlets, represented by post offices, were also considered. On this basis, the value in use of the Land and Buildings used in operations is relatively unaffected by changes in the commercial value of the properties concerned and, in certain critical market conditions, certain properties may have values that are significantly higher than their mere market value, without this having any impact on the cash flows or profitability of the Mail, Parcels and Distribution segment.
The fair value of the Parent Company's properties used in operations continued to be higher than their carrying amount, as confirmed by the property valuations carried out.
Payments and Mobile CGU
In performing the impairment test on the goodwill arising from the acquisition of the LIS Group, which took place in 2022, reference was made to the CGU comprising all the companies belonging to the Payments and Mobile segment as the only cash flow generator.
Following the completion of the LIS integration and reorganisation processes, in fact, the Payments and Mobile operating segment is based on single and integrated market and operational processes according to a unified approach. Consequently, the cash flows are largely independent of those generated by the other operating segments of the Poste Group, but closely interrelated within the segment. Therefore, LIS is no longer identifiable as a separate CGU (as determined for 31 December 2022).
In order to estimate the value in use of the CGU, reference was made to the 2024-2028 Strategic Plan approved by the Poste Italiane SpA's Board of Directors on 19 March 2024, as well as by the Boards of Directors of the respective companies belonging to the CGU for the portion pertaining to them. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses show the passing of the test by a wide margin even in scenarios significantly worse than the one used for the impairment test.
It should be noted that even if the impairment test were performed consistently with 31 December 2022 (CGU comprised of LIS Holding and LIS Pay), there would be no need to make impairment losses to the goodwill recognised in the financial statements.
Net Insurance (Insurance) CGU
Following the purchase of Net Insurance by Poste Vita through the corporate vehicle Net Holding in 2023 and the associated Purchase Price Allocation process, details of which are provided in Note 2.8 - Basis of consolidation, goodwill of \u20ac124 million emerged, equal to the remaining difference between the consideration transferred for the acquisition of Net Insurance by Net Holding and the fair value of the adjusted net assets acquired.
In performing the impairment test relating to the Net Insurance Group, reference was made to the CGU consisting of Net Insurance and Net Insurance Life as the cash generating unit.
To estimate the value in use of the CGU, reference was made to the 2024 -2028 Strategic Plan. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net assets of the CGU with a discount rate of 12.6%.
Investment in Anima Holding SpA
With reference to the impairment test on the investment in Anima Holding SpA, the future cash flows used in determining the value in use are those observable as consensus for the main balance sheet indicators (Revenue, Profit (loss) before tax and Net Profit) estimated by analysts for the next three years and available periodically on the company's website. At 31 December 2023, there was no need for impairment adjustments.
Other equity investments in associates
With reference to the impairment tests of the equity investments in the other associates Sennder, Financit, Replica Sim and Eurizon Capital Real Asset, no impairment adjustments were found to be necessary at 31 December 2023.
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Impairment tests of goodwill, cash generating units and equity investments
Goodwill and other non-current assets are tested for impairment in accordance with IAS 36 \u2013 Impairment of Assets. Impairment testing involves the use of estimates based on factors that may change over time, potentially resulting in effects that may be significantly different from prior year estimates.
In accordance with the relevant accounting standard, when it is not possible to estimate the recoverable amount of an individual asset, the Group identifies the smallest group of assets that generates cash inflows that are largely independent of those from other assets or groups of assets (Cash Generating Units - CGUs). The process of identifying such CGUs necessarily involves management's judgement as to the specific nature of the assets and business to which they belong and evidence that the cash inflows from the group of assets are closely interdependent and largely independent of those from other assets (or groups of assets). The number and scope of CGUs are systematically updated to reflect the effects of new aggregation and reorganisation operations carried out by the Group, as well as to take into account those external factors that could affect the ability of assets to generate independent cash inflows.
For the most significant impairment tests performed at 31 December 2023, the carrying amounts tested and the main assumptions underlying the tests performed are shown below:
Amount
(\u20acm)
Method used
Explicit forecast period
Growth rate
Discount rate
Goodwill of the Mail, Parcels and Distribution CGU
213
DCF
2024-2028
2.0%
7.48% (WACC)
Goodwill of the Payments and Mobile CGU
459
DCF
2024-2028
2.0%
9.54% (WACC)
Goodwill of the NET Insurance (Insurance) CGU
124
DDM
2024-2028
2.0%
9.31% (Ke)
Investment in Anima Holding SpA
219
DDM
2024-2026
2.0%
9.65% (Ke)
DCF: Discounted Cash Flow; DDM: Dividend Discount Model; WACC: Weighted Average Cost of Capital; Ke: cost of own capital
It should be noted that the discount rates at 31 December 2023 are up from those used for the previous year's estimates. Specifically, the increases amounted to 129 basis points for the Mail, Parcels and Distribution CGU, 90 basis points for the Payments and Mobile CGU, and 131 basis points for the investment in Anima Holding.
With reference to the external quantitative indicators of impairment at Group level, it should be noted that, at 31 December 2023, market capitalisation was higher than book equity, whereas with regard to internal source elements, it should be noted that consolidated results at December 2023 were above budget forecasts for the same period.
Mail, Parcels and Distribution CGU
The impairment test of the Mail, Parcels and Distribution CGU was performed, consistent with the previous year, at the consolidated level, including the companies within the same operating segment; the activities performed by the different companies and the resulting cash flows are highly interdependent, as commercial and strategic management decisions are made centrally at the level of the entire segment.
The value in use of the CGU was estimated on the basis of the 2024-2028 strategic plan approved by Poste Italiane SpA's Board of Directors on 19 March 2024. The economic forecasts used in the execution of the test also include, among the various characterising elements, forecasts for the planned investments that will be focused on achieving the CGU's automation and modernisation objectives, in continuity with what was achieved in 2023. Special importance is attached to investments classified as ESG, i.e. that comply with the reference principles of the Group's 8 Sustainability Pillars. Among the CGU's main investment projects are the Polis Project \"Homes of Digital Citizenship Services\", energy efficiency measures for real estate, and the automation and evolution of the sorting and delivery network from a green perspective.
In determining the terminal value, calculated on the basis of the last year of explicit forecasts, income was normalised. Reference was also made to the transfer prices that BancoPosta RFC is expected to pay for the services provided by Poste Italiane's distribution network.
The impairment test determined that the related carrying amounts are fair.
The impairment test is based on estimates and assumptions that present elements of uncertainty, also due to the current context characterised by significant volatility of the main market factors and significant uncertainty with regard to economic expectations, as well as the continuation of negative economic results and the decline of the postal market in which the Group operates; for this reason, sensitivity analyses were carried out. In particular, the impairment test showed the recoverability of the goodwill allocated to the CGU even by increasing the indicated discount rate by 100 basis points and jointly reducing the long-term growth factor by 20 basis points.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net invested capital of the CGU with a discount rate of 9.11%.
As in the past, in determining the value of properties used as post offices and sorting centres, Poste Italiane SpA's universal service obligation was taken into account, as was the inseparability of the cash flows generated from the properties that
provide this service, (which the Parent Company is required to operate throughout the country regardless of the expected profitability of each location); the unique nature of the operating processes involved and the substantial overlap between postal and financial activities within the same outlets, represented by post offices, were also considered. On this basis, the value in use of the Land and Buildings used in operations is relatively unaffected by changes in the commercial value of the properties concerned and, in certain critical market conditions, certain properties may have values that are significantly higher than their mere market value, without this having any impact on the cash flows or profitability of the Mail, Parcels and Distribution segment.
The fair value of the Parent Company's properties used in operations continued to be higher than their carrying amount, as confirmed by the property valuations carried out.
Payments and Mobile CGU
In performing the impairment test on the goodwill arising from the acquisition of the LIS Group, which took place in 2022, reference was made to the CGU comprising all the companies belonging to the Payments and Mobile segment as the only cash flow generator.
Following the completion of the LIS integration and reorganisation processes, in fact, the Payments and Mobile operating segment is based on single and integrated market and operational processes according to a unified approach. Consequently, the cash flows are largely independent of those generated by the other operating segments of the Poste Group, but closely interrelated within the segment. Therefore, LIS is no longer identifiable as a separate CGU (as determined for 31 December 2022).
In order to estimate the value in use of the CGU, reference was made to the 2024-2028 Strategic Plan approved by the Poste Italiane SpA's Board of Directors on 19 March 2024, as well as by the Boards of Directors of the respective companies belonging to the CGU for the portion pertaining to them. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses show the passing of the test by a wide margin even in scenarios significantly worse than the one used for the impairment test.
It should be noted that even if the impairment test were performed consistently with 31 December 2022 (CGU comprised of LIS Holding and LIS Pay), there would be no need to make impairment losses to the goodwill recognised in the financial statements.
Net Insurance (Insurance) CGU
Following the purchase of Net Insurance by Poste Vita through the corporate vehicle Net Holding in 2023 and the associated Purchase Price Allocation process, details of which are provided in Note 2.8 - Basis of consolidation, goodwill of \u20ac124 million emerged, equal to the remaining difference between the consideration transferred for the acquisition of Net Insurance by Net Holding and the fair value of the adjusted net assets acquired.
In performing the impairment test relating to the Net Insurance Group, reference was made to the CGU consisting of Net Insurance and Net Insurance Life as the cash generating unit.
To estimate the value in use of the CGU, reference was made to the 2024 -2028 Strategic Plan. Based on the test results, there was no need to make impairment adjustments at 31 December 2023.
Sensitivity analyses performed on the impairment test lead to a substantial alignment between the recoverable amount and the net assets of the CGU with a discount rate of 12.6%.
Investment in Anima Holding SpA
With reference to the impairment test on the investment in Anima Holding SpA, the future cash flows used in determining the value in use are those observable as consensus for the main balance sheet indicators (Revenue, Profit (loss) before tax and Net Profit) estimated by analysts for the next three years and available periodically on the company's website. At 31 December 2023, there was no need for impairment adjustments.
Other equity investments in associates
With reference to the impairment tests of the equity investments in the other associates Sennder, Financit, Replica Sim and Eurizon Capital Real Asset, no impairment adjustments were found to be necessary at 31 December 2023.
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Depreciation and amortisation of property, plant and equipment and intangible assets
The cost of fixed assets is depreciated or amortised on a straight-line basis over the estimated useful life of the asset. The useful life is determined at the time of acquisition and is based on historical experience of similar investments, market conditions and expectations regarding future events that may have an impact, such as technological developments. The actual useful life may, therefore, differ from the estimated useful life.
The useful life of the Group's main asset classes is detailed below:
Property, plant and equipment
Years
% annual depreciation
Buildings
40-59
3%-2%
Structural improvements to own properties
18-31
6%-3%
Plant
8-23
13%-4%
Light constructions
10
10%
Equipment
3-10
33%-10%
Furniture and fittings
3-8
33%-13%
Electrical and electronic office equipment
3-10
33%-10%
Motor vehicles, automobiles, motorcycles
4-10
25%-10%
Leasehold improvements
estimated lease term*
-
Other assets
3-5
33%-20%
(*) Or the useful life of the improvement if shorter than the estimated lease term
Investment property
Years
% annual depreciation
Property
39-42
3%-2%
Structural improvements to own properties
17-18
6%
In the case of assets to be handed over, located on land held under concession or sub-concession, on expiry of the concession term, or whilst awaiting confirmation of renewal, any additional depreciation of assets takes into account the probable residual duration of the right to use the assets to provide public services, to be estimated on the basis of the framework agreements entered into with the Public Administration entity, the status of negotiations with the grantors and past experience.
Lastly, with regard to intangible assets, amortisation begins when the asset is available for use and extends systematically on a straight-line basis over its estimated useful life determined in a range of between 2 and 5 years.
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Climate Change Information
Climate change and the transition to a low-carbon economy are becoming increasingly relevant to businesses, banks, governments, regulators, and investors.
Although the Poste Italiane Group attaches particular importance to environmental protection, aware of the need to use resources responsibly in order to minimise negative environmental impacts214F215, taking into account the business in which the Group operates, issues related to climate change are considered, with the meaning provided by the reference accounting standards, irrelevant for consolidated financial reporting.
With particular regard to the disclosures required by ESMA in Public Statement 32-193237008-1793 of 25 October 2023, the following table shows a mapping of climate-related disclosures with a corresponding reference to the paragraphs of Poste Italiane's consolidated financial statements and separate financial statements in which the issue is addressed.
Topic
Note
Description
Climate Change Estimates and judgements
Note 2.6 Use of estimates \"Impairment tests of goodwill, cash generating units and equity investments\" and \"Impairment and stage allocation for financial instruments\"
\u2022Focus on the estimation of expected cash flows in relation to the CGUs subject to impairment.
\u2022Details of ESG factors considered in estimating the Probability of Default (PD).
Sustainable investments
Note A1 \"Property, plant and equipment\"
Note A4 \"Right-of-use assets\"
\u2022Investments made in the reporting year aimed at reducing the environmental impact of the Group/Company.
\u2022Increase in Right-of-Use Assets related to the conclusion of leasing contracts for \"green\" vehicles.
Sustainable finance
Note A6 - \"Financial assets\"
Note 13 \"Additional Information - Assets Under Management\"
\u2022Percentage of ESG products in the entire investment and insurance portfolio of BancoPosta Fondi SpA SGR and Poste Vita Group.
Environmental certificates
Note 2.5 \"Material information on accounting standards - Environmental Certificates\"
Note A7 \"Inventories\"
\u2022Description of the accounting treatment applied to environmental certificates
\u2022Details of closing inventories referring to emission allowances and guarantees of origin and carbon credits present at year-end.
Share-based payments
Note 13 \"Additional Information - Share-based payment arrangements\"
\u2022Description of incentive plans some of which are anchored to the achievement of ESG objectives.
Climate risk
Note 6 \"Risk management\"
\u2022Description of the Group's exposure to climate change risks and actions taken to mitigate those risks.
Macroeconomic environment
The estimates used in the preparation of the Financial Statements adequately take into account the particular macroeconomic context of reference, at 31 December 2023 heavily impacted by a number of factors such as: inflation, rising interest rates, deterioration of the economic climate, geopolitical risks and uncertainties on future developments, considering the ongoing conflicts not just in Ukraine but in the Middle East too. These uncertainties are reflected in the indicators used as the basis for the estimates.
For information on how these uncertainties have been reflected in the estimated PDs used to calculate expected losses, please refer to \"Note 2.6 - Use of estimates -Impairment and stage allocation for financial instruments\"; while for a full discussion of risks related to the economic environment, please refer to the specific sections of the Report on Operations", "dimensions": { "concept": "ext:DisclosureOfClimateChangeAndMacroeconomicEnvironment", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page594-cflshid_255596-tag141563": { "value": "
2.8 BASIS OF CONSOLIDATION
The Poste Italiane Group's consolidated financial statements include the financial statements of Poste Italiane SpA and of the companies over which the Parent Company directly or indirectly exercises control, as defined by IFRS 10, from the date on which control is obtained until the date on which control is no longer held by the Group. The Group controls an entity when it simultaneously:
\u2022has power over the investee;
\u2022is exposed, or has rights to, variable returns from its involvement with the investee;
\u2022has the ability to influence those returns through its power over the investee.
Control is exercised both via direct or indirect ownership of voting shares, and via the exercise of dominant influence, defined as the power to govern the financial and operating policies of the entity, including indirectly based on legal agreements, obtaining the related benefits, regardless of the nature of the equity interest. In determining control, potential voting rights exercisable at the end of the reporting period are taken into account.
The consolidated financial statements have been specifically prepared at 31 December 2023, after appropriate adjustment, where necessary, to align accounting policies with those of the Parent Company.
Subsidiaries that, in terms of their size or operations, are, either individually or taken together, irrelevant to a true and fair view of the Group's results of operations and financial position are not included within the scope of consolidation.
The criteria used for line-by-line consolidation are as follows:
\u2022the assets, liabilities, costs and revenue of consolidated entities are accounted for on a line-by-line basis, separating where applicable the equity and profit/(loss) amounts attributable to non-controlling interests in consolidated equity and consolidated profit or loss;
\u2022business combinations, in which control over an entity is acquired, are accounted for using the acquisition method. The cost of a business combination is represented by the current value (fair value) at the date of acquisition of the assets sold, the liabilities assumed, the equity instruments issued and any other directly attributable accessory charges; the difference between the acquisition price and the current value of the assets and liabilities acquired, after verifying the correct measurement of the current values of the assets and liabilities acquired and the acquisition cost, if positive, is recorded under Intangible Assets under \"Goodwill\", or, if negative, is charged to profit or loss;
\u2022acquisitions of non-controlling interests in entities already controlled by the Group are not accounted for as acquisitions, but as equity transactions; in the absence of a relevant accounting standard, the Group recognises any difference between the cost of acquisition and the related share of net assets of the subsidiary in equity;
\u2022any significant gains and losses (and the related tax effects) on transactions between companies consolidated on a line-by-line basis, to the extent not yet realised with respect to third parties, are eliminated, as are intercompany payables and receivables, costs and revenue, and finance costs and income;
\u2022gains and losses deriving from the disposal of investments in consolidated companies are recognised in profit or loss based on the difference between the sale price and the corresponding share of consolidated equity disposed of.
Investments in subsidiaries that are not significant and are not consolidated, and those in companies over which the Group exerts significant influence (assumed when the Group holds an interest of between 20% and 50%), hereinafter \"associates\", and joint ventures are accounted for using the equity method. At the time of acquisition, the investment is accounted for using the equity method. Any difference between the cost of acquisition of the investment and the net fair value of the investee's identifiable assets and liabilities is accounted for as follows:
a)goodwill related to an associate or a joint venture is included in the carrying amount of the investment. Amortisation of such goodwill is not permitted;
b)in determining the initial value of the entity's investment, any excess of the entity's interest in the net fair value of investee's identifiable assets and liabilities over cost is recognised as income in determining the acquirer's interest in the profit (loss) for the period of the associate or joint venture in the period in which the interest is acquired.
After acquisition, appropriate adjustments are made to the entity's share of the profits or losses of the associate or joint venture to account, for example, for additional depreciation or amortisation of the investee's depreciable or amortisable assets, based on the excess of their fair values over their carrying amounts at the time the investment was acquired, and of any impairment losses on goodwill or property, plant and equipment. The equity method is as follows:
\u2022the Group's share of an entity's post-acquisition profits or losses is recognised in profit or loss from the date on which significant influence or control is obtained until the date on which significant influence or control is no longer exerted by the Group; provisions are made to cover a company's losses that exceed the carrying amount of the investment, to the extent that the Group has legal or constructive obligations to cover such losses; changes in the equity of companies accounted for using the equity method not related to the profit/(loss) for the year are recognised directly in equity;
\u2022unrealised gains and losses on transactions between the Parent Company/subsidiaries and the company accounted for using the equity method are eliminated to the extent of the Group's interest in the associate; unrealised losses, unless relating to impairment, are eliminated.
MAIN CHANGES TO THE SCOPE OF CONSOLIDATION
During the year, the Parent Company concluded the following business combinations by virtue of which it acquired control of the entities.
Net Insurance
On 28 September 2022, Poste Vita's Board of Directors approved the promotion of a voluntary total cash takeover bid for ordinary shares and warrants of Net Insurance S.p.A. (\"Net Insurance\"), in consultation with certain shareholders.
On 20 April 2023, the squeeze-out procedure was finalised, as a result of which Net Holding (the corporate vehicle directly controlled by Poste Vita) holds a controlling interest of 97.8% in Net Insurance (which in turn holds 100% of Net Insurance Life S.p.A.), and the current CEO of Net Insurance, who acted in concert with the takeover bid, holds a minority interest of around 2.2%. The total outlay paid by Net Holding for the acquisition of the stake amounted to approximately \u20ac180.8 million. On 21 April 2023, IBL Banca S.p.A., pursuant to its commitment in the event of a successful bid, acquired a 40% stake in Net Holding for a consideration of \u20ac73.1 million. The net outlay for the Poste Group for the acquisition of the stake amounted to \u20ac108.5 million. Below are the total carrying amounts of the assets acquired and liabilities assumed at the date of acquisition of Net Insurance and its subsidiary.
(\u20acm)
Carrying amount (A)
Fair Value Adjustments (B)
Fair Value (A+B)
\u00a0
\u00a0
Net assets acquired
\u00a0
\u00a0
\u00a0
\u00a0
Intangible assets
8.7
10.8
19.5
Property, plant and equipment
14.9
1.4
16.3
Right-of-use asset
0.4
-
0.4
Trade receivables and other assets
53.7
-
53.7
Financial assets
231.3
-
231.3
Cash and cash equivalents
13.1
-
13.1
Insurance assets
157.8
-
157.8
Insurance liabilities
(386.4)
3.4
(383.0)
Employee termination benefits
(0.4)
-
(0.4)
Trade payables and other liabilities
(35.5)
(4.8)
(40.3)
Financial liabilities
(10.2)
-
(10.2)
\u00a0
\u00a0
\u00a0
Total net assets acquired
47.5
10.8
58.2
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to non-controlling interests
\u00a0
\u00a0
1.3
\u00a0
\u00a0
\u00a0
Net assets acquired by the Group
\u00a0
\u00a0
57.0
\u00a0
\u00a0
\u00a0
Goodwill
\u00a0
\u00a0
123.8
\u00a0
\u00a0
\u00a0
Total fee
\u00a0
\u00a0
180.8
Poste Italiane engaged an independent expert to support the Purchase Price Allocation (\"PPA\") process, aimed at (i) allocating the Price Consideration to the fair value of the net assets of the acquired entity (regardless of whether or not they are already recognised in the financial statements) and (ii) deriving the goodwill value as the difference between the purchase price and the fair value of the net assets acquired (expressed net of deferred tax liabilities).
Based on the valuation activities performed to date, an adjustment to the fair value of the net assets acquired totalling \u20ac10.8 million was recognised, of which:
\u2022\u20ac10.8 million increase in intangible assets related to brand enhancement;
\u2022an increase in property, plant and equipment of \u20ac1.4 million relating to owned property;
\u2022reduction of insurance liabilities by \u20ac3.4 million for cash flows related to amounts repayable by the distributing banks;
\u2022deferred taxation effects related to the above adjustments of \u20ac4.8 million.
For the other intangible assets already recognised in the opening financial statements of the acquired companies, as well as for all other assets and liabilities included in the opening statements of financial position of Net Insurance, the net carrying amount already represents a proxy for fair value.
The remaining difference between the consideration transferred (\u20ac180.8 million) and the fair value of the net assets acquired by the Group, adjusted following the PPA process, (\u20ac57.0 million) was allocated to Goodwill in the amount of \u20ac123.8 million.
The results described above must be considered, at 31 December 2023, still provisional as Poste Italiane has made use of the option provided for in paragraphs 45 et seq. of IFRS 3 to complete the valuation of the business combination within twelve months of the acquisition date.Below are the total economic values of the acquired company included in the consolidated statement of profit or loss from the date of first-time consolidation
(\u20acm)
\u00a0
From 1 April to 31 December 2023
\u00a0
Revenue
23.7
Operating income
19.2
Profit/(loss) for the period
\u00a0
13.3
Sennder
On 3 April 2023, as a result of the capital increase reserved for the shareholder sennder Technologies GmbH (\"sennder Tech\"), the Poste Italiane stake in the subsidiary went from 65% to 60%. Moreover, on 30 May 2023, Poste Italiane's Board of Directors approved the renegotiation of the current partnership with sennder Technologies GmbH. As part of the renegotiation, Poste Italiane contributed 35% of its shares in sennder Italia to sennder Tech, increasing its stake in the latter from 1.7% to 10.2% on a fully diluted basis. It should be noted that following the completion of the transaction in June 2023, Poste Italiane holds a 25% stake in sennder Italia, which, therefore, has lost its status as a subsidiary and assumed that of an associate with the consequent recognition of the investment under the equity method pursuant to IAS 28. In accordance with IFRS 10, at the time of the loss of control, the retained stake in sennder Italia was measured at fair value. The transaction resulted in the recognition of a total capital gain of about \u20ac109 million classified in revenue due to the sale of the controlling stake in the investment, with a positive impact on the Poste Group's EBIT.
By virtue of the option provided for in paragraphs 45 et seq. of IFRS 3 to complete the valuation of the business combination within twelve months from the date of the transaction, the difference between the fair value of the residual equity investment in sennder Italia and the portion of its net assets, amounting to approximately \u20ac19 million, was provisionally allocated to goodwill and is included in the carrying amount of the equity investment.
Sourcesense Platforms S.r.l
On 24 January 2023, Sourcesense finalised the acquisition of Eco Mind Ingegneria Informatica S.r.l. and its subsidiary HeadApp S.r.l. for a consideration, including the price adjustment under the contractual agreements, of approximately \u20ac1 million. The two acquired companies were merged into the NewCo called Sourcesense Platforms S.r.l. with accounting and tax effects from 1 July 2023.
The difference that emerged between the transaction price and the portion of the net assets acquired, amounting to approximately \u20ac1 million, was recognised as Goodwill under Intangible Assets pending completion of the valuation process of the individual components of the acquired assets.
Cronos
On 3 August 2023, as part of a system-wide transaction to take over the policy portfolio of Eurovita S.p.A. (\"Eurovita\") following the latter's crisis, Poste Vita contributed to the establishment of the corporate vehicle Cronos Vita S.p.A. (\"Cronos\"), invested in by, in addition to Poste Vita itself, Allianz, Generali Italia, Intesa Sanpaolo Vita and UnipolSai Assicurazioni, with the purpose of acquiring a business unit consisting essentially of the assets and liabilities relating to the Eurovita insurance business, following the latter's admission to compulsory liquidation proceedings.
In September 2023, the insurance companies involved, Cronos, the banks distributing Eurovita products and certain system banks signed the final agreements within their respective competences to regulate their rights and obligations in relation to the transaction. As part of the aforementioned transaction, on 18 September 2023, Poste Vita participated in the first capital increase of Cronos, with a stake of approximately \u20ac1.7 million.
On 17 October 2023, IVASS authorised Cronos to carry out insurance business (resulting in a change of company name from \"Cronos Vita S.p.A\" to \"Cronos Vita Assicurazioni S.p.A.\"). On 27 October 2023, Poste Vita participated, together with the other shareholders of Cronos, in proportion to its 22.5% stake, in the second capital increase of this company of approximately \u20ac212.5 million, of which approximately \u20ac47.8 million was attributable to Poste Vita. To complete the transaction, on 30 October 2023 IVASS authorised the sale of the business unit from Eurovita to Cronos, effective from 27 October 2023.
The stake in Cronos was classified as an asset held for sale (IFRS 5) in consideration of the intention to hold the stake for a limited period of time and the agreements made at the conclusion of the transaction regarding the stipulation of a firm purchase commitment within 12 months for the transfer of the business assets between the insurance companies involved in the transaction and Cronos Vita.
It was also verified that the fair value of the investment, net of selling costs, was not lower than its carrying amount.
\u00a0CONCLUSION OF THE ASSESSMENT OF BUSINESS COMBINATIONS OF THE PREVIOUS YEAR
With reference to the acquisitions occurred in the course of 2022 for which Poste Italiane availed itself of the option set forth in paragraphs 45 et seq. of IFRS 3 to complete the valuation of the business combination within twelve months from the date of acquisition, at 31 December 2023 the process was concluded, confirming the results already represented at 31 December 2022. A summary of them is provided below.
LIS
Based on the valuation activities performed, an adjustment to the fair value of the net assets acquired totalling \u20ac136.9 million was recognised, of which:
\u2022intangible assets in the amount of \u20ac192.4 million relating to existing contractual relationships with points of sale;
\u2022deferred tax effects related to the higher value of intangible assets in the amount of \u20ac55.4 million.
The remaining difference between the consideration transferred (\u20ac700 million) and the fair value of the adjusted net assets acquired, (\u20ac241 million) was allocated to Goodwill in the amount of \u20ac458.9 million.
Plurima
Based on the valuation activities performed to date, an adjustment to the fair value of the net assets acquired totalling \u20ac22 million was recognised, of which:
\u2022\u20ac30.5 million related to customer contracts and customer-related intangible assets
\u2022\u20ac8.5 million related to deferred taxation effects connected to the higher value of identified assets
The remaining difference between the consideration transferred (\u20ac135.2 million) and the fair value of the portion of the adjusted net assets acquired (\u20ac34.5 million) was allocated to Goodwill in the amount of \u20ac100.7 million.
Sourcesense
The difference between the consideration transferred (\u20ac30.2 million) and the fair value of the portion of the net assets acquired, (\u20ac6.2 million) was allocated to Goodwill in the amount of \u20ac23.9 million.
Agile
The difference between the consideration transferred (\u20ac18 million) and the fair value of the portion of the net assets acquired (\u20ac4 million) was allocated to Goodwill in the amount of \u20ac14 million.
CONVERSION OF THE FINANCIAL STATEMENTS INTO FOREIGN CURRENCIES
For the purposes of preparing the Consolidated Financial Statements, the statement of financial position and statement of profit or loss of all consolidated companies are expressed in euro, which is the functional currency used by the Parent Company.
The financial statements of companies that operate in a functional currency other than the euro are translated into the presentation currency using the closing rate at the reporting date for assets and liabilities, including goodwill and consolidation adjustments, and the average exchange rate for the year (if this reasonably approximates the exchange rate at the date of the respective transactions) for revenue and costs. All the resulting exchange rate differences are recognised in other comprehensive income and shown separately in a specific equity reserve; this reserve is reversed proportionally to the statement of profit or loss at the time of the (total or partial) disposal of the relevant investment.
The exchange rates used to convert the financial statements of consolidated companies in foreign currencies are those published by the Bank of Italy and the European Central Bank and presented in the table below:
\u00a0
\u00a0
2023
2022
Currency
Exact change on 31 December
Average annual exchange rate
Exact change on 31 December
Average annual exchange rate
\u00a0
\u00a0
Chinese Yuan Renminbi
7.851
7.66
7.358
7.079
US dollar
1.105
1.081
1.067
1.053
British Pound Sterling
0.869
0.870
0.887
0.879(*)
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page595-cflshid_256110-tag141564": { "value": "
Net Insurance
On 28 September 2022, Poste Vita's Board of Directors approved the promotion of a voluntary total cash takeover bid for ordinary shares and warrants of Net Insurance S.p.A. (\"Net Insurance\"), in consultation with certain shareholders.
On 20 April 2023, the squeeze-out procedure was finalised, as a result of which Net Holding (the corporate vehicle directly controlled by Poste Vita) holds a controlling interest of 97.8% in Net Insurance (which in turn holds 100% of Net Insurance Life S.p.A.), and the current CEO of Net Insurance, who acted in concert with the takeover bid, holds a minority interest of around 2.2%. The total outlay paid by Net Holding for the acquisition of the stake amounted to approximately \u20ac180.8 million. On 21 April 2023, IBL Banca S.p.A., pursuant to its commitment in the event of a successful bid, acquired a 40% stake in Net Holding for a consideration of \u20ac73.1 million. The net outlay for the Poste Group for the acquisition of the stake amounted to \u20ac108.5 million. Below are the total carrying amounts of the assets acquired and liabilities assumed at the date of acquisition of Net Insurance and its subsidiary.
\u20acm)
Carrying amount (A)
Fair Value Adjustments (B)
Fair Value (A+B)
\u00a0
\u00a0
Net assets acquired
\u00a0
\u00a0
\u00a0
\u00a0
Intangible assets
8.7
10.8
19.5
Property, plant and equipment
14.9
1.4
16.3
Right-of-use asset
0.4
-
0.4
Trade receivables and other assets
53.7
-
53.7
Financial assets
231.3
-
231.3
Cash and cash equivalents
13.1
-
13.1
Insurance assets
157.8
-
157.8
Insurance liabilities
(386.4)
3.4
(383.0)
Employee termination benefits
(0.4)
-
(0.4)
Trade payables and other liabilities
(35.5)
(4.8)
(40.3)
Financial liabilities
(10.2)
-
(10.2)
\u00a0
\u00a0
\u00a0
Total net assets acquired
47.5
10.8
58.2
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to non-controlling interests
\u00a0
\u00a0
1.3
\u00a0
\u00a0
\u00a0
Net assets acquired by the Group
\u00a0
\u00a0
57.0
\u00a0
\u00a0
\u00a0
Goodwill
\u00a0
\u00a0
123.8
\u00a0
\u00a0
\u00a0
Total fee
\u00a0
\u00a0
180.8
Poste Italiane engaged an independent expert to support the Purchase Price Allocation (\"PPA\") process, aimed at (i) allocating the Price Consideration to the fair value of the net assets of the acquired entity (regardless of whether or not they are already recognised in the financial statements) and (ii) deriving the goodwill value as the difference between the purchase price and the fair value of the net assets acquired (expressed net of deferred tax liabilities).
Based on the valuation activities performed to date, an adjustment to the fair value of the net assets acquired totalling \u20ac10.8 million was recognised, of which:
\u2022\u20ac10.8 million increase in intangible assets related to brand enhancement;
\u2022an increase in property, plant and equipment of \u20ac1.4 million relating to owned property;
\u2022reduction of insurance liabilities by \u20ac3.4 million for cash flows related to amounts repayable by the distributing banks;
\u2022deferred taxation effects related to the above adjustments of \u20ac4.8 million.
For the other intangible assets already recognised in the opening financial statements of the acquired companies, as well as for all other assets and liabilities included in the opening statements of financial position of Net Insurance, the net carrying amount already represents a proxy for fair value.
The remaining difference between the consideration transferred (\u20ac180.8 million) and the fair value of the net assets acquired by the Group, adjusted following the PPA process, (\u20ac57.0 million) was allocated to Goodwill in the amount of \u20ac123.8 million.
The results described above must be considered, at 31 December 2023, still provisional as Poste Italiane has made use of the option provided for in paragraphs 45 et seq. of IFRS 3 to complete the valuation of the business combination within twelve months of the acquisition date.Below are the total economic values of the acquired company included in the consolidated statement of profit or loss from the date of first-time consolidation
(\u20acm)
\u00a0
From 1 April to 31 December 2023
\u00a0
Revenue
23.7
Operating income
19.2
Profit/(loss) for the period
\u00a0
13.3
Sennder
On 3 April 2023, as a result of the capital increase reserved for the shareholder sennder Technologies GmbH (\"sennder Tech\"), the Poste Italiane stake in the subsidiary went from 65% to 60%. Moreover, on 30 May 2023, Poste Italiane's Board of Directors approved the renegotiation of the current partnership with sennder Technologies GmbH. As part of the renegotiation, Poste Italiane contributed 35% of its shares in sennder Italia to sennder Tech, increasing its stake in the latter from 1.7% to 10.2% on a fully diluted basis. It should be noted that following the completion of the transaction in June 2023, Poste Italiane holds a 25% stake in sennder Italia, which, therefore, has lost its status as a subsidiary and assumed that of an associate with the consequent recognition of the investment under the equity method pursuant to IAS 28. In accordance with IFRS 10, at the time of the loss of control, the retained stake in sennder Italia was measured at fair value. The transaction resulted in the recognition of a total capital gain of about \u20ac109 million classified in revenue due to the sale of the controlling stake in the investment, with a positive impact on the Poste Group's EBIT.
By virtue of the option provided for in paragraphs 45 et seq. of IFRS 3 to complete the valuation of the business combination within twelve months from the date of the transaction, the difference between the fair value of the residual equity investment in sennder Italia and the portion of its net assets, amounting to approximately \u20ac19 million, was provisionally allocated to goodwill and is included in the carrying amount of the equity investment.
Sourcesense Platforms S.r.l
On 24 January 2023, Sourcesense finalised the acquisition of Eco Mind Ingegneria Informatica S.r.l. and its subsidiary HeadApp S.r.l. for a consideration, including the price adjustment under the contractual agreements, of approximately \u20ac1 million. The two acquired companies were merged into the NewCo called Sourcesense Platforms S.r.l. with accounting and tax effects from 1 July 2023.
The difference that emerged between the transaction price and the portion of the net assets acquired, amounting to approximately \u20ac1 million, was recognised as Goodwill under Intangible Assets pending completion of the valuation process of the individual components of the acquired assets.
Cronos
On 3 August 2023, as part of a system-wide transaction to take over the policy portfolio of Eurovita S.p.A. (\"Eurovita\") following the latter's crisis, Poste Vita contributed to the establishment of the corporate vehicle Cronos Vita S.p.A. (\"Cronos\"), invested in by, in addition to Poste Vita itself, Allianz, Generali Italia, Intesa Sanpaolo Vita and UnipolSai Assicurazioni, with the purpose of acquiring a business unit consisting essentially of the assets and liabilities relating to the Eurovita insurance business, following the latter's admission to compulsory liquidation proceedings.
In September 2023, the insurance companies involved, Cronos, the banks distributing Eurovita products and certain system banks signed the final agreements within their respective competences to regulate their rights and obligations in relation to the transaction. As part of the aforementioned transaction, on 18 September 2023, Poste Vita participated in the first capital increase of Cronos, with a stake of approximately \u20ac1.7 million.
On 17 October 2023, IVASS authorised Cronos to carry out insurance business (resulting in a change of company name from \"Cronos Vita S.p.A\" to \"Cronos Vita Assicurazioni S.p.A.\"). On 27 October 2023, Poste Vita participated, together with the other shareholders of Cronos, in proportion to its 22.5% stake, in the second capital increase of this company of approximately \u20ac212.5 million, of which approximately \u20ac47.8 million was attributable to Poste Vita. To complete the transaction, on 30 October 2023 IVASS authorised the sale of the business unit from Eurovita to Cronos, effective from 27 October 2023.
The stake in Cronos was classified as an asset held for sale (IFRS 5) in consideration of the intention to hold the stake for a limited period of time and the agreements made at the conclusion of the transaction regarding the stipulation of a firm purchase commitment within 12 months for the transfer of the business assets between the insurance companies involved in the transaction and Cronos Vita.
It was also verified that the fair value of the investment, net of selling costs, was not lower than its carrying amount.
\u00a0CONCLUSION OF THE ASSESSMENT OF BUSINESS COMBINATIONS OF THE PREVIOUS YEAR
With reference to the acquisitions occurred in the course of 2022 for which Poste Italiane availed itself of the option set forth in paragraphs 45 et seq. of IFRS 3 to complete the valuation of the business combination within twelve months from the date of acquisition, at 31 December 2023 the process was concluded, confirming the results already represented at 31 December 2022. A summary of them is provided below.
LIS
Based on the valuation activities performed, an adjustment to the fair value of the net assets acquired totalling \u20ac136.9 million was recognised, of which:
\u2022intangible assets in the amount of \u20ac192.4 million relating to existing contractual relationships with points of sale;
\u2022deferred tax effects related to the higher value of intangible assets in the amount of \u20ac55.4 million.
The remaining difference between the consideration transferred (\u20ac700 million) and the fair value of the adjusted net assets acquired, (\u20ac241 million) was allocated to Goodwill in the amount of \u20ac458.9 million.
Plurima
Based on the valuation activities performed to date, an adjustment to the fair value of the net assets acquired totalling \u20ac22 million was recognised, of which:
\u2022\u20ac30.5 million related to customer contracts and customer-related intangible assets
\u2022\u20ac8.5 million related to deferred taxation effects connected to the higher value of identified assets
The remaining difference between the consideration transferred (\u20ac135.2 million) and the fair value of the portion of the adjusted net assets acquired (\u20ac34.5 million) was allocated to Goodwill in the amount of \u20ac100.7 million.
Sourcesense
The difference between the consideration transferred (\u20ac30.2 million) and the fair value of the portion of the net assets acquired, (\u20ac6.2 million) was allocated to Goodwill in the amount of \u20ac23.9 million.
Agile
The difference between the consideration transferred (\u20ac18 million) and the fair value of the portion of the net assets acquired (\u20ac4 million) was allocated to Goodwill in the amount of \u20ac14 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page599-cflshid_258315-tag141565": { "value": "
CONVERSION OF THE FINANCIAL STATEMENTS INTO FOREIGN CURRENCIES
For the purposes of preparing the Consolidated Financial Statements, the statement of financial position and statement of profit or loss of all consolidated companies are expressed in euro, which is the functional currency used by the Parent Company.
The financial statements of companies that operate in a functional currency other than the euro are translated into the presentation currency using the closing rate at the reporting date for assets and liabilities, including goodwill and consolidation adjustments, and the average exchange rate for the year (if this reasonably approximates the exchange rate at the date of the respective transactions) for revenue and costs. All the resulting exchange rate differences are recognised in other comprehensive income and shown separately in a specific equity reserve; this reserve is reversed proportionally to the statement of profit or loss at the time of the (total or partial) disposal of the relevant investment.
The exchange rates used to convert the financial statements of consolidated companies in foreign currencies are those published by the Bank of Italy and the European Central Bank and presented in the table below:
\u00a0
\u00a0
2023
2022
Currency
Exact change on 31 December
Average annual exchange rate
Exact change on 31 December
Average annual exchange rate
\u00a0
\u00a0
Chinese Yuan Renminbi
7.851
7.66
7.358
7.079
US dollar
1.105
1.081
1.067
1.053
British Pound Sterling
0.869
0.870
0.887
0.879(*)
(*) The exchange rate shown relates to Sourcesense Limited and is calculated based on the period between the date of acquisition (1 October 2022) and 31 December 2022", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page600-cflshid_258633-tag141566": { "value": "3. MATERIAL EVENTS DURING THE YEAR
3.1 PRINCIPAL CORPORATE ACTIONS
Information is provided below on corporate transactions that took place during the year under review and which supplement what has already been reported in the section on main changes to the scope of consolidation in Note 2.8 - Basis of consolidation.
The following corporate actions also took place during 2023.
\u2022On 24 November 2022, binding agreements were signed for Poste Italiane to participate, with an investment of approximately \u20ac3 million, in a capital increase promoted by Moneyfarm in order to finance part of the purchase price of 100% of Profile Financial Solutions Ltd, a company active in the pension fund consolidation business in the UK under the Profile Pensions brand. Following receipt of the necessary approvals from the UK regulator (FCA)215F216 on 5 July 2023, the closing of the transaction was formalised at the end of July.
\u2022On 29 September 2022, the reverse merger of Plurima Bidco S.r.l. into Plurima was approved by the shareholders' meetings of the two companies. The transaction, which provided for the application of the regulatory simplifications for mergers of wholly-owned companies, became effective as of 1 January 2023.
\u2022On 29 June 2023, Poste Italiane notified Milkman S.p.A. (\"Milkman\") of its intention to exercise its call option on the shares held by the latter in MLK Deliveries S.p.A. (\"MLK\"), equal to approximately the remaining 30% of the share capital of MLK itself (the \"Milkman Stake\"). Based on the criteria originally agreed upon in the contractual agreements signed in 2020, the exercise price of the option was estimated at \u20ac19.6 million. Following the transfer of the Milkman Stake, formalised in July, Poste Italiane acquired full control of MLK.
On 31 January 2024, through the establishment of the NewCo named \"MLK Fresh S.r.l.\" (\"MLK Fresh\"), the partnership in the Fresh Food sector between MLK and Mazzocco S.r.l. (\"Mazzocco\"), an Italtrans Group company operating as a national refrigerated courier, was formalised.
MLK Fresh, 70% owned by MLK and 30% by Mazzocco, will be the vehicle through which the parties will offer advanced delivery services in Italy dedicated to the fresh food segment in the B2C e-commerce and/or scheduled deliveries market.
\u2022On 26 April 2023, Plurima S.p.A. finalised the purchase of a further 40% of the share capital of Bridge Technologies S.p.A. for a consideration of approximately \u20ac0.9 million, thus achieving 100% ownership.
\u2022In June and July, respectively, the Boards of Lis Holding and PostePay approved the project for the Partial demerger of Lis Holding in favour of PostePay, with direct assignment of the 100% stake in LIS Pay to the EMI PostePay RFC. In this regard, on 28 June 2023, Poste Italiane's Board of Directors authorised the participation of Poste Italiane in the extraordinary shareholders' meeting of PostePay S.p.A. to approve the demerger transaction and the amendment of the rules of the EMI RFC, in order to allow the allocation to the latter of investments in other payment institutions and the removal of the restriction on the allocation to the EMI RFC of the investment in LIS Holding. On 31 December 2023, the demerger became effective.
\u2022On 12 October 2023, Postel S.p.A. acquired the shares in Address Software S.r.l. held by third-party shareholders amounting to 49% of the company's capital. Consequently, from that date and until 24 January, Postel S.p.A. held 100% of the shares in Address Software S.r.l. In addition, on 24 January 2024 Postel sold itsentire shareholding in Address Software S.r.l. to Poste Italiane S.p.A. This transaction was in preparation for the start of the merger by incorporation of Address Software S.r.l. into Poste Italiane S.p.A., which will become
effective in 2024.
\u2022On 28 November 2023, the reorganisation of the Agile Group was finalised through the reverse merger of Agile Power Holding into Agile Lab, as well as the merger of AIM2, Agile Next and Agile Skill into the reverse merged company. The transaction was legally effective as of 1 December 2023, while the accounting and tax effects are backdated to 1 July 2023.
\u2022In June and July 2023, Volante Technologies Inc (\"Volante\") issued in two tranches a convertible loan totalling $16.6 million, which was subscribed by some of the company's shareholders, including PostePay, in the amount of $508 thousand. In September 2023, Volante also carried out a senior debt refinancing transaction, as part of which the warrants to be assigned to subscribers of the convertible loan became exercisable. PostePay exercised its warrants, converting them into newly issued ordinary shares. Therefore, as a result of the transactions described, PostePay's stake in Volante went from 2.9% to 2.4% (on a fully diluted basis).
As part of the agreements to restructure its debt, Volante implemented a corporate reorganisation that saw PostePay and all other shareholders become partners in the new entity Volante Technologies Holdco Inc. with the same stakes already held in Volante Technologies Inc, a wholly-owned subsidiary of Volante Technologies Holdco, Inc that changed its name to Volante Technologies LLC.
\u2022On 28 February 2024, PostePay signed an agreement to acquire 20% of N&TS GROUP Networks & Transactional Systems Group S.p.A. (\"N&TS GROUP\"), a leading Italian company in software solutions for electronic payments. The transaction, whose closing is subject to the fulfilment of conditions precedent, aims to enhance PostePay's technological expertise in order to support its expansion strategy in the digital payments market.
\u2022On 4 March 2024, Poste Logistics S.p.A. (\"NewCo\") was established, whose share capital is wholly owned by Poste Italiane S.p.A. NewCo will focus on integrated logistics activities for the Italian Postal Group, benefiting from the business unit of SDA Express Courier S.p.A. (\"SDA\") concerning the integrated logistics business, through a partial demerger transaction. The transaction - whose partial demerger project has already been approved in March by the Boards of Directors of the companies involved in the transaction and will also be subject to resolution by the relevant extraordinary shareholders' meetings - will be formalised by the second half of 2024.
3.2 OTHER MATERIAL EVENTS
The following material events also occurred in 2023:
Russia-Ukraine Conflict
The year 2023 was characterised by the continuation of the crisis between the European countries Russia and Ukraine.
In order to assess the impacts of the conflict for the Group, as requested by the national and international Authorities (ESMA and CONSOB)216F217, and in line with the previous financial statements, an assessment was carried out on the current and future impacts and on the sanctions imposed on Russia by state and supranational authorities, on the activities, on the financial situation and on the economic results of the Group, in consideration of the available evidence and the scenarios that can be constructed at the date of preparation of the following financial statements.
The potential impacts, although at present random and uncertain also in relation to the pressure on inflation driven by sharp increases in energy and raw material prices, appear limited in relation to the fact that the Group's operations are almost entirely located within the national territory and without branches in the value chain with the countries involved.
In addition, monitoring of the existing relations between the Group and the parties directly or indirectly involved was carried out, which led to the following findings:
\u2022with reference to the Parent Company, the relations with the corresponding foreign postal administrations of Russia, Belarus and Ukraine have credit and debit balances of insignificant amounts;
\u2022with reference to Poste Vita, within the Multi-asset funds, there are some indirect exposures to the countries involved in the aforementioned events that represent a non-significant portion of the relevant NAV.
Purchase of treasury shares
In execution of the authorisation to purchase treasury shares resolved by Poste Italiane's Shareholders' Meeting of 8 May 2023, aimed at acquiring a supply of shares to service the Group's long-term incentive plans benefiting members of management, on 9 May 2023, the market was informed of the launch of a share buyback programme under which, between 10 May 2023 and 31 May 2023, Poste Italiane purchased 3,500,000 treasury shares (equal to 0.268% of the share capital), at an average price of \u20ac9.709971 per share, for a total countervalue of \u20ac33,984,897.83.
Following the transaction, considering also the treasury shares in the portfolio deriving from previous buy-back transactions and the delivery to the beneficiaries of the incentive plans, Poste Italiane holds 10,675,798 treasury shares, equal to 0.817% of the share capital.
Interim dividend
On 6 November 2023, Poste Italiane's Board of Directors, in light of the financial position and results of operations of the Company at 30 June 2023, the performance for the following months, the business outlook and the related expected economic prospects at 31 December 2023, and in line with the Group's dividend policy, resolved to bring forward, as an interim dividend, part of the ordinary dividend for 2023. To this end, the Company has prepared a Report and Financial Statements pursuant to article 2433-bis of the Italian Civil Code, which show that the Company's financial position, results of operations and cash flows allow such distribution. The opinion of the independent auditors was obtained on these documents.
The interim dividend of \u20ac0.237 per share, gross of any legal withholding taxes, was paid with effect from 22 November 2023, with \"ex-dividend date\" of coupon no. 13 coinciding with 20 November 2023 and record date (i.e. the date on which the dividend was entitled to be paid) coinciding with 21 November 2023.
Based on the number of shares outstanding at 6 November 2023, which amounted to 1,295,434,202, the total amount of the interim dividend was \u20ac307 million.
Ancillary Own Fund
At its meeting of 28 June 2023, Poste Italiane S.p.A.'s Board of Directors, having obtained the favourable opinion of the Related and Connected Parties Committee issued on 27 June 2023, approved the Renewal of the Ancillary Own Fund transaction in favour of Poste Vita S.p.A. for a maximum amount of \u20ac1,750 million. On 5 July 2023, the relevant Information Document was made available to the public at the Company's registered office, at Borsa Italiana S.p.A., on the Company's website, as well as on the website of the authorised storage mechanism \"eMarket Storage\".
", "dimensions": { "concept": "ext:DisclosureOfRelevantEventsDuringReportingPeriodExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page602-cflshid_259674-tag141567": { "value": "
Purchase of treasury shares
In execution of the authorisation to purchase treasury shares resolved by Poste Italiane's Shareholders' Meeting of 8 May 2023, aimed at acquiring a supply of shares to service the Group's long-term incentive plans benefiting members of management, on 9 May 2023, the market was informed of the launch of a share buyback programme under which, between 10 May 2023 and 31 May 2023, Poste Italiane purchased 3,500,000 treasury shares (equal to 0.268% of the share capital), at an average price of \u20ac9.709971 per share, for a total countervalue of \u20ac33,984,897.83.
Following the transaction, considering also the treasury shares in the portfolio deriving from previous buy-back transactions and the delivery to the beneficiaries of the incentive plans, Poste Italiane holds 10,675,798 treasury shares, equal to 0.817% of the share capital.
At 31 December 2023, the Company held 10,675,798 treasury shares (representing approximately 0.817% of the share capital) with a total value of approximately \u20ac94 million. All the shares in issue are fully subscribed and paid up. No preference shares have been issued.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page602-cflshid_259674-tag141568": { "value": "
Interim dividend
On 6 November 2023, Poste Italiane's Board of Directors, in light of the financial position and results of operations of the Company at 30 June 2023, the performance for the following months, the business outlook and the related expected economic prospects at 31 December 2023, and in line with the Group's dividend policy, resolved to bring forward, as an interim dividend, part of the ordinary dividend for 2023. To this end, the Company has prepared a Report and Financial Statements pursuant to article 2433-bis of the Italian Civil Code, which show that the Company's financial position, results of operations and cash flows allow such distribution. The opinion of the independent auditors was obtained on these documents.
The interim dividend of \u20ac0.237 per share, gross of any legal withholding taxes, was paid with effect from 22 November 2023, with \"ex-dividend date\" of coupon no. 13 coinciding with 20 November 2023 and record date (i.e. the date on which the dividend was entitled to be paid) coinciding with 21 November 2023.
Based on the number of shares outstanding at 6 November 2023, which amounted to 1,295,434,202, the total amount of the interim dividend was \u20ac307 million.
Ancillary Own Fund
At its meeting of 28 June 2023, Poste Italiane S.p.A.'s Board of Directors, having obtained the favourable opinion of the Related and Connected Parties Committee issued on 27 June 2023, approved the Renewal of the Ancillary Own Fund transaction in favour of Poste Vita S.p.A. for a maximum amount of \u20ac1,750 million. On 5 July 2023, the relevant Information Document was made available to the public at the Company's registered office, at Borsa Italiana S.p.A., on the Company's website, as well as on the website of the authorised storage mechanism \"eMarket Storage\".
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"ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148120": { "value": "-1549000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:815600354DEDBD0BA991", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148063": { "value": "-564000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "ifrs-full:CategoriesOfRelatedPartiesAxis": "ifrs-full:RelatedPartiesMember", "unit": "iso4217:EUR" } }, "shtag_148121": { "value": "-512000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:815600354DEDBD0BA991", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "ifrs-full:CategoriesOfRelatedPartiesAxis": "ifrs-full:RelatedPartiesMember", "unit": "iso4217:EUR" } }, "shtag_148064": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148122": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:815600354DEDBD0BA991", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148065": { "value": "-772000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalents", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148123": { "value": "-2975000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalents", "entity": "scheme:815600354DEDBD0BA991", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148066": { "value": "4211000000", "decimals": -6, "dimensions": { "concept": "ext:CashAndCashEquivalentsUnrestrictedAndRestricted", "entity": "scheme:815600354DEDBD0BA991", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148124": { "value": "4983000000", "decimals": -6, "dimensions": { "concept": "ext:CashAndCashEquivalentsUnrestrictedAndRestricted", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148067": { "value": "-2576000000", "decimals": -6, "dimensions": { "concept": "ext:RestrictedCashAndCashEquivalentsAtEndOfYear", "entity": "scheme:815600354DEDBD0BA991", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148125": { "value": "-3755000000", "decimals": -6, "dimensions": { "concept": "ext:RestrictedCashAndCashEquivalentsAtEndOfYear", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148204": { "value": "1635000000", "decimals": -6, "dimensions": { "concept": "ext:UnrestrictedCashAndCashEquivalentsAtEndOfYear", "entity": "scheme:815600354DEDBD0BA991", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_148205": { "value": "1228000000", "decimals": -6, "dimensions": { "concept": "ext:UnrestrictedCashAndCashEquivalentsAtEndOfYear", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "v1-page610-cflshid_265341-tag141569": { "value": "
A1 - PROPERTY, PLANT AND EQUIPMENT (\u20ac2,546 million)
The following table shows movements in property, plant and equipment in 2023:
tab. A1 - Movements in property, plant and equipment
\u00a0
Description(\u20acm)
Land
Properties used in operations
Plant and machinery
Industrial and commercial equipment
Leasehold improvements
Other assets
Assets under construction and advances
Total
Cost
77
3,278
2,542
363
707
2,056
145
9,167
Accumulated depreciation
-
(2,107)
(1,952)
(328)
(464)
(1,877)
-
(6,728)
Impairment losses
(0)
(16)
(10)
(1)
(1)
(7)
(0)
(35)
Balance at 1 January 2023
76
1,155
580
34
241
173
145
2,404
Changes during the year
\u00a0
Acquisitions
-
47
66
10
48
56
144
373
Adjustments
-
-
-
-
-
-
-
-
Reclassifications
-
35
28
0
14
7
(84)
0
Disposals
(0)
(0)
(0)
(0)
(0)
(0)
(3)
(4)
Change in scope of consolidation
8
8
(0)
0
(0)
(0)
-
15
Depreciation
-
(34)
(71)
(11)
(48)
(75)
-
(239)
(Impairment losses)/Reversals
-
(0)
-
(0)
-
(3)
(0)
(3)
Total changes
8
56
23
(0)
13
(15)
58
143
Cost
85
3,371
2,630
372
765
2,098
203
9,525
Accumulated depreciation
-
(2,143)
(2,018)
(337)
(511)
(1,933)
-
(6,941)
Impairment losses
(0)
(16)
(10)
(1)
(1)
(8)
(0)
(37)
Total
85
1,211
603
34
253
157
202
2,546
At 31 December 2023, property, plant and equipment includes assets belonging to the Parent Company located on land held under concession or sub-concession, which are to be handed over free of charge at the end of the concession term. These assets have a total carrying amount of \u20ac52 million.
Investments of \u20ac373 million in 2023 consists largely of:
\u2022\u20ac47 million relating mainly to extraordinary maintenance of Post Offices and local head offices around the country (\u20ac27 million), personnel and management offices (\u20ac10 million) and mail and parcel sorting offices (\u20ac9 million);
\u2022\u20ac66 million for plants, with the most significant expenditure made by the Parent Company, of which \u20ac33 million for the construction of plants related to buildings, \u20ac14 million for the construction and extraordinary maintenance of connectivity and video-surveillance systems, \u20ac8 million for the creation and extraordinary maintenance of systems for mail sorting and parcel processing at industrial facilities and \u20ac4 million for the installation of ATMs (automated teller machines);
\u2022\u20ac48 million invested mainly in the upgrade of plants (\u20ac20 million) and the structural part (\u20ac26 million) of leased properties;
\u2022\u20ac56 million relating to Other assets, of which \u20ac33 million incurred by the Parent Company mainly for the purchase of hardware for the renewal of technological equipment at the Post Offices and head offices and the strengthening of storage systems, \u20ac10 million for the purchase of furniture and fittings and \u20ac11 million incurred by PostePay SpA mainly for the purchase of devices for the range of \"PosteMobile Casa\" and \"PosteCasa Ultraveloce\" (\u20ac9 million) offers and, to a residual degree, the purchase of mobile phones and mobile telephone equipment intended for rental;
\u2022\u20ac144 million relating to Assets under construction and advances, of which \u20ac122 million incurred by the Parent Company and relating, for \u20ac93 million, to extraordinary maintenance works and the infrastructural equipment of the
sales and production network and \u20ac23 million for the purchase of computer hardware and other equipment yet to enter service.
Reclassifications from property, plant and equipment under construction amounted to \u20ac84 million and refer mainly to the purchase cost of assets that became available and ready for use during the year; in particular, they relate to the Parent Company for the conclusion of extraordinary renovations of properties owned and improvements of leased properties (\u20ac65 million) and the activation of hardware and other technological equipment (\u20ac5 million).
Within the framework of the Polis Project - Home of Digital Services, with reference to the two lines of action envisaged in the project, the investments for the financial year 2023 totalling \u20ac92 million are shown below:
tab. A1.1 - Polis Project-Investments
Lines of Intervention
Properties used in operations
Plant and machinery
Leasehold improvements
Other assets
Assets under construction and advances
Total
\u00a0
One-stop shop
12
8
20
12
28
80
Spaces for Italy
2
3
0
0
10
15
Total
14
11
20
12
38
95
In detail, the investments are related:
\u2022for \u20ac14 million to extraordinary maintenance of Post Offices around the country;
\u2022for \u20ac11 million to the construction of plants related to buildings;
\u2022for \u20ac20 million to investments in the upgrade of plant and the structure of properties held under lease;
\u2022for \u20ac12 million to the purchase of hardware for the upgrade of technological equipment of Post Offices and head offices and the purchase of furniture and fittings;
\u2022for \u20ac38 million to investments in progress, of which \u20ac33 million for extraordinary maintenance of both owned and leased premises and \u20ac5 million for the purchase of hardware.
Lastly, it should be noted that during the year under review, investments for about \u20ac31 million classified as \"green\", i.e., aimed at reducing the impact that the Poste Italiane Group has on the environment in which it operates, were made by the parent company Poste Italiane SpA and only to a residual extent by the subsidiary Postel SpA. The main projects include the installation of photovoltaic systems and electricity columns, as well as energy efficiency measures on real estate.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page612-cflshid_266623-tag141570": { "value": "A2 - INVESTMENT PROPERTY (\u20ac28 million)
Investment property relates to service accommodation owned by Poste Italiane SpA in accordance with Law 560 of 24 December 1993 and residential accommodation previously used by post office directors. Movements in provisions for risks and charges are as follows:
tab. A2 - Movements in investment property
(\u20acm)
Description(\u20acm)
FY 2023
Cost
88
Accumulated depreciation
(57)
Impairment losses
(0)
Balance at 1 January
31
Changes during the year
\u00a0
Acquisitions
0
Reclassifications
-
Disposals
(3)
Depreciation
(1)
Total changes
(3)
Cost
81
Accumulated depreciation
(53)
Impairment losses
(0)
Balance at 31 December
28
Fair value at 31 December
66
The fair value of investment property at 31 December 2023 includes \u20ac54 million representing the sale price applicable to the Parent Company's service accommodation in accordance with Law 560 of 24 December 1993, while the remaining balance reflects market price estimates calculated internally by the Company217F218.
Most of the properties included in this category are subject to lease agreements classifiable as operating leases, given that the Group retains substantially all of the risks and rewards of ownership of the properties. Under the relevant agreements, tenants usually have the right to break off the lease with six-month notice. Given the resulting lack of certainty, the expected revenue flows from these leases are not referred to in these notes.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page613-cflshid_266914-tag141573": { "value": "
A3 - INTANGIBLE ASSETS (\u20ac2,062 million)
The following table shows movements in intangible assets in 2023:
tab. A3 - Movements in intangible assets
\u00a0
Description(\u20acm)
Industrial patents and intellectual property rights, concessions, licences, trademarks and similar rights
Assets under construction and advances
Goodwill
Other
Total
Cost
4,689
258
773
231
5,952
Accumulated amortisation and impairments
(4,021)
0
(102)
(12)
(4,135)
Balance at 1 January 2023
668
258
672
219
1,817
Changes during the year
\u00a0
Acquisitions
245
227
-
1
473
Reclassifications
209
(209)
-
0
(0)
Transfers and disposals
(0)
(5)
-
-
(5)
Change in scope of consolidation
17
2
125
-
144
Amortisation and impairments
(354)
(0)
-
(12)
(366)
Foreign exchange differences
-
-
-
-
-
Total changes
117
15
125
(11)
245
Cost
5,166
274
898
232
6,570
Accumulated amortisation and impairments
(4,381)
(1)
(102)
(24)
(4,508)
Total
785
273
796
208
2,062
Investments in Intangible assets during 2023 amounted to \u20ac473 million, including about \u20ac54 million in software development activities and the related additional expenses recorded within the Group, primarily relating to personnel expenses (\u20ac39 million). Development costs, other than those incurred directly to produce identifiable software used, or intended for use, within the Group, are not capitalised.
The increase in Industrial patents and intellectual property rights, concessions, licences, trademarks and similar rights totals \u20ac245 million, before amortisation for the period, and relates primarily to the purchase and entry into service of new software programmes and the acquisition of software licences.
The acquisitions of intangible assets under construction include activities mainly regarding the development for software relating to the infrastructure platform (\u20ac105 million), for BancoPosta services (\u20ac50 million), for support to the sales network (\u20ac29 million), for the postal products platform (\u20ac26 million) and for the engineering of reporting processes for other Business and personnel functions (\u20ac13 million).
The balance of intangible assets under construction includes activities of the Parent Company mainly regarding the development for software relating to the infrastructure platform (\u20ac119 million), for BancoPosta services (\u20ac61 million), for support to the sales network (\u20ac41 million), for the postal products platform (\u20ac32 million) and for the engineering of reporting processes for other Business and personnel functions (\u20ac17 million).
During the year, reclassifications were made from Intangible assets under construction to Industrial patents and intellectual property rights amounting to \u20ac209 million, mainly due to the completion and start-up of new software programs and the development of existing ones, relating to the infrastructure platform (\u20ac93 million), BancoPosta services (\u20ac58 million), support for the sales network (\u20ac30 million), the postal products platform (\u20ac14 million) and the engineering of reporting processes for other Business and personnel functions (\u20ac12 million).
Lastly, during the year 2023, as part of the Energy Project, the Parent Company made investments in application software for about \u20ac43 million, of which \u20ac9 million has not yet entered into production, and as part of the Polis Project - Home of Digital Services, with reference to the \"One-stop shop\" line of intervention, it made investments of about \u20ac3 million, of which \u20ac2 million has not yet entered into production.
The breakdown of the item Goodwill is as follows:
tab. A3.1 - Goodwill
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
Changes
Mail, Parcels and Distribution SBU
213
213
1
Plurima
101
101
(0)
Poste Italiane
33
33
-
Sourcesense
24
24
-
Poste Welfare Servizi
18
18
-
Sengi Express Limited
16
16
-
Agile Lab
14
14
-
MLK Deliveries
5
5
-
Nexive Network
3
3
-
Sourcesense Platforms
1
-
1
sennder Italia
-
0
(0)
Payments and Mobile SBU
459
459
-
LIS
459
459
-
Insurance Services SBU
124
-
124
Net Insurance
124
-
124
Total
796
672
125
The balance of \u20ac796 million refers to goodwill allocated to the Mail, Parcels and Distribution SBU, the Payments and mobile SBU and the Insurance Services SBU. The change during the year is essentially attributable to the acquisition by Net Holding (a corporate vehicle directly controlled by Poste Vita) of 97.8% of Net Insurance (which in turn holds 100% of Net Insurance Life S.p.A.). The remaining difference between the consideration recognised and the fair value of the net assets acquired by the Group, adjusted following the Purchase Price Allocation (\"PPA\") process performed in application of IFRS 3, was recognised as goodwill (see also Note 2.8 - Basis of consolidation).
In addition, with reference to the impairment test on goodwill and cash generating units, please refer to paragraph 2.6 - Use of estimates.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page613-cflshid_266914-tag141572": { "value": "
A3 - INTANGIBLE ASSETS (\u20ac2,062 million)
The following table shows movements in intangible assets in 2023:
tab. A3 - Movements in intangible assets
\u00a0
Description(\u20acm)
Industrial patents and intellectual property rights, concessions, licences, trademarks and similar rights
Assets under construction and advances
Goodwill
Other
Total
Cost
4,689
258
773
231
5,952
Accumulated amortisation and impairments
(4,021)
0
(102)
(12)
(4,135)
Balance at 1 January 2023
668
258
672
219
1,817
Changes during the year
\u00a0
Acquisitions
245
227
-
1
473
Reclassifications
209
(209)
-
0
(0)
Transfers and disposals
(0)
(5)
-
-
(5)
Change in scope of consolidation
17
2
125
-
144
Amortisation and impairments
(354)
(0)
-
(12)
(366)
Foreign exchange differences
-
-
-
-
-
Total changes
117
15
125
(11)
245
Cost
5,166
274
898
232
6,570
Accumulated amortisation and impairments
(4,381)
(1)
(102)
(24)
(4,508)
Total
785
273
796
208
2,062
Investments in Intangible assets during 2023 amounted to \u20ac473 million, including about \u20ac54 million in software development activities and the related additional expenses recorded within the Group, primarily relating to personnel expenses (\u20ac39 million). Development costs, other than those incurred directly to produce identifiable software used, or intended for use, within the Group, are not capitalised.
The increase in Industrial patents and intellectual property rights, concessions, licences, trademarks and similar rights totals \u20ac245 million, before amortisation for the period, and relates primarily to the purchase and entry into service of new software programmes and the acquisition of software licences.
The acquisitions of intangible assets under construction include activities mainly regarding the development for software relating to the infrastructure platform (\u20ac105 million), for BancoPosta services (\u20ac50 million), for support to the sales network (\u20ac29 million), for the postal products platform (\u20ac26 million) and for the engineering of reporting processes for other Business and personnel functions (\u20ac13 million).
The balance of intangible assets under construction includes activities of the Parent Company mainly regarding the development for software relating to the infrastructure platform (\u20ac119 million), for BancoPosta services (\u20ac61 million), for support to the sales network (\u20ac41 million), for the postal products platform (\u20ac32 million) and for the engineering of reporting processes for other Business and personnel functions (\u20ac17 million).
During the year, reclassifications were made from Intangible assets under construction to Industrial patents and intellectual property rights amounting to \u20ac209 million, mainly due to the completion and start-up of new software programs and the development of existing ones, relating to the infrastructure platform (\u20ac93 million), BancoPosta services (\u20ac58 million), support for the sales network (\u20ac30 million), the postal products platform (\u20ac14 million) and the engineering of reporting processes for other Business and personnel functions (\u20ac12 million).
Lastly, during the year 2023, as part of the Energy Project, the Parent Company made investments in application software for about \u20ac43 million, of which \u20ac9 million has not yet entered into production, and as part of the Polis Project - Home of Digital Services, with reference to the \"One-stop shop\" line of intervention, it made investments of about \u20ac3 million, of which \u20ac2 million has not yet entered into production.
The breakdown of the item Goodwill is as follows:
tab. A3.1 - Goodwill
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
Changes
Mail, Parcels and Distribution SBU
213
213
1
Plurima
101
101
(0)
Poste Italiane
33
33
-
Sourcesense
24
24
-
Poste Welfare Servizi
18
18
-
Sengi Express Limited
16
16
-
Agile Lab
14
14
-
MLK Deliveries
5
5
-
Nexive Network
3
3
-
Sourcesense Platforms
1
-
1
sennder Italia
-
0
(0)
Payments and Mobile SBU
459
459
-
LIS
459
459
-
Insurance Services SBU
124
-
124
Net Insurance
124
-
124
Total
796
672
125
The balance of \u20ac796 million refers to goodwill allocated to the Mail, Parcels and Distribution SBU, the Payments and mobile SBU and the Insurance Services SBU. The change during the year is essentially attributable to the acquisition by Net Holding (a corporate vehicle directly controlled by Poste Vita) of 97.8% of Net Insurance (which in turn holds 100% of Net Insurance Life S.p.A.). The remaining difference between the consideration recognised and the fair value of the net assets acquired by the Group, adjusted following the Purchase Price Allocation (\"PPA\") process performed in application of IFRS 3, was recognised as goodwill (see also Note 2.8 - Basis of consolidation).
In addition, with reference to the impairment test on goodwill and cash generating units, please refer to paragraph 2.6 - Use of estimates.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page613-cflshid_266914-tag141571": { "value": "
A3 - INTANGIBLE ASSETS (\u20ac2,062 million)
The following table shows movements in intangible assets in 2023:
tab. A3 - Movements in intangible assets
\u00a0
Description(\u20acm)
Industrial patents and intellectual property rights, concessions, licences, trademarks and similar rights
Assets under construction and advances
Goodwill
Other
Total
Cost
4,689
258
773
231
5,952
Accumulated amortisation and impairments
(4,021)
0
(102)
(12)
(4,135)
Balance at 1 January 2023
668
258
672
219
1,817
Changes during the year
\u00a0
Acquisitions
245
227
-
1
473
Reclassifications
209
(209)
-
0
(0)
Transfers and disposals
(0)
(5)
-
-
(5)
Change in scope of consolidation
17
2
125
-
144
Amortisation and impairments
(354)
(0)
-
(12)
(366)
Foreign exchange differences
-
-
-
-
-
Total changes
117
15
125
(11)
245
Cost
5,166
274
898
232
6,570
Accumulated amortisation and impairments
(4,381)
(1)
(102)
(24)
(4,508)
Total
785
273
796
208
2,062
Investments in Intangible assets during 2023 amounted to \u20ac473 million, including about \u20ac54 million in software development activities and the related additional expenses recorded within the Group, primarily relating to personnel expenses (\u20ac39 million). Development costs, other than those incurred directly to produce identifiable software used, or intended for use, within the Group, are not capitalised.
The increase in Industrial patents and intellectual property rights, concessions, licences, trademarks and similar rights totals \u20ac245 million, before amortisation for the period, and relates primarily to the purchase and entry into service of new software programmes and the acquisition of software licences.
The acquisitions of intangible assets under construction include activities mainly regarding the development for software relating to the infrastructure platform (\u20ac105 million), for BancoPosta services (\u20ac50 million), for support to the sales network (\u20ac29 million), for the postal products platform (\u20ac26 million) and for the engineering of reporting processes for other Business and personnel functions (\u20ac13 million).
The balance of intangible assets under construction includes activities of the Parent Company mainly regarding the development for software relating to the infrastructure platform (\u20ac119 million), for BancoPosta services (\u20ac61 million), for support to the sales network (\u20ac41 million), for the postal products platform (\u20ac32 million) and for the engineering of reporting processes for other Business and personnel functions (\u20ac17 million).
During the year, reclassifications were made from Intangible assets under construction to Industrial patents and intellectual property rights amounting to \u20ac209 million, mainly due to the completion and start-up of new software programs and the development of existing ones, relating to the infrastructure platform (\u20ac93 million), BancoPosta services (\u20ac58 million), support for the sales network (\u20ac30 million), the postal products platform (\u20ac14 million) and the engineering of reporting processes for other Business and personnel functions (\u20ac12 million).
Lastly, during the year 2023, as part of the Energy Project, the Parent Company made investments in application software for about \u20ac43 million, of which \u20ac9 million has not yet entered into production, and as part of the Polis Project - Home of Digital Services, with reference to the \"One-stop shop\" line of intervention, it made investments of about \u20ac3 million, of which \u20ac2 million has not yet entered into production.
The breakdown of the item Goodwill is as follows:
tab. A3.1 - Goodwill
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
Changes
Mail, Parcels and Distribution SBU
213
213
1
Plurima
101
101
(0)
Poste Italiane
33
33
-
Sourcesense
24
24
-
Poste Welfare Servizi
18
18
-
Sengi Express Limited
16
16
-
Agile Lab
14
14
-
MLK Deliveries
5
5
-
Nexive Network
3
3
-
Sourcesense Platforms
1
-
1
sennder Italia
-
0
(0)
Payments and Mobile SBU
459
459
-
LIS
459
459
-
Insurance Services SBU
124
-
124
Net Insurance
124
-
124
Total
796
672
125
The balance of \u20ac796 million refers to goodwill allocated to the Mail, Parcels and Distribution SBU, the Payments and mobile SBU and the Insurance Services SBU. The change during the year is essentially attributable to the acquisition by Net Holding (a corporate vehicle directly controlled by Poste Vita) of 97.8% of Net Insurance (which in turn holds 100% of Net Insurance Life S.p.A.). The remaining difference between the consideration recognised and the fair value of the net assets acquired by the Group, adjusted following the Purchase Price Allocation (\"PPA\") process performed in application of IFRS 3, was recognised as goodwill (see also Note 2.8 - Basis of consolidation).
In addition, with reference to the impairment test on goodwill and cash generating units, please refer to paragraph 2.6 - Use of estimates.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page614-cflshid_267603-tag141575": { "value": "
A4 \u2013 RIGHT-OF-USE ASSETS (\u20ac1,265 million)
tab. A4 - Movements in right-of-use assets
\u00a0
Description(\u20acm)
Properties used in operations
Company fleet
Vehicles for mixed use
Other assets
Total
Cost
1,680
373
31
54
2,138
Accumulated amortisation and impairments
(596)
(150)
(18)
(40)
(804)
Balance at 1 January 2023
1,084
224
13
14
1,334
Changes during the year
\u00a0
New contract acquisitions
114
54
10
16
194
Adjustments
40
9
5
0
54
Reclassifications
-
-
-
-
-
Contract terminations
(42)
(0)
(1)
(0)
(43)
Change in scope of consolidation
(2)
(0)
0
0
(3)
Depreciation, amortisation and impairments
(166)
(88)
(8)
(10)
(272)
Total changes
(57)
(25)
6
7
(69)
Cost
1,777
385
37
50
2,249
Accumulated amortisation and impairments
(750)
(186)
(18)
(30)
(984)
Total
1,027
199
18
20
1,265
Acquisitions during the year mainly related to the Parent Company (\u20ac134 million) and related to new contracts (\u20ac39 million),
renewals of contracts existing at the beginning of the year of a real estate nature (\u20ac18 million), the rental of company vehicles used for mail and parcel delivery activities (\u20ac53 million) and mixed-use vehicles (\u20ac8 million), the rental of IT equipment (\u20ac16 million) and to the subsidiary SDA Express Courier for the stipulation of real estate lease contracts for new operating headquarters and warehouses intended for the management of specific orders in the \"integrated logistics\" segment (\u20ac54 million).
The item \"Adjustments\" refers to contractual changes during the period in question, e.g. for changes in duration due to extension, revision of economic conditions, etc.
The item terminations refers to the early termination of existing contracts with respect to their natural maturity.
The increase in Right-of-Use Assets recognised during the year and related to lease contracts for electric, hybrid and endothermic vehicles considered to be \"green\" amounted to approximately \u20ac39 million, exclusively referring to the Parent Company Poste Italiane SpA.
tab. A4.1 - Economic effects of lease agreements
\u00a0
(\u20acm)
Description
FY 2023
FY 2022
\u00a0
\u00a0
\u00a0
Depreciation, impairments and adjustments of right-of-use assets
272
249
Financial charges on lease payables
28
24
Costs related to short-term leases
35
38
Costs related to lease of low-value assets
14
15
Costs related to lease of intangible assets
102
72
\u00a0
\u00a0
\u00a0
Total
451
397
tab. A4.2- Movements in lease liability
\u00a0
(\u20acm)
FY 2023
Balance at 1 January
1,407
\u00a0
New contract increases
194
\u00a0
Payments
(298)
\u00a0
Finance costs
28
\u00a0
Change in scope
(3)
\u00a0
Other changes
12
\u00a0
Balance at 31 December
1,341
\u00a0
of which current
295
of which non-current
1,045
Lease payables
Lease liabilities at 31 December 2023 amounted to \u20ac1,330 million. For more details on the change in this item, see Note A4 - Right-of-use assets.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page614-cflshid_267603-tag141574": { "value": "
A4 \u2013 RIGHT-OF-USE ASSETS (\u20ac1,265 million)
tab. A4 - Movements in right-of-use assets
\u00a0
Description(\u20acm)
Properties used in operations
Company fleet
Vehicles for mixed use
Other assets
Total
Cost
1,680
373
31
54
2,138
Accumulated amortisation and impairments
(596)
(150)
(18)
(40)
(804)
Balance at 1 January 2023
1,084
224
13
14
1,334
Changes during the year
\u00a0
New contract acquisitions
114
54
10
16
194
Adjustments
40
9
5
0
54
Reclassifications
-
-
-
-
-
Contract terminations
(42)
(0)
(1)
(0)
(43)
Change in scope of consolidation
(2)
(0)
0
0
(3)
Depreciation, amortisation and impairments
(166)
(88)
(8)
(10)
(272)
Total changes
(57)
(25)
6
7
(69)
Cost
1,777
385
37
50
2,249
Accumulated amortisation and impairments
(750)
(186)
(18)
(30)
(984)
Total
1,027
199
18
20
1,265
Acquisitions during the year mainly related to the Parent Company (\u20ac134 million) and related to new contracts (\u20ac39 million),
renewals of contracts existing at the beginning of the year of a real estate nature (\u20ac18 million), the rental of company vehicles used for mail and parcel delivery activities (\u20ac53 million) and mixed-use vehicles (\u20ac8 million), the rental of IT equipment (\u20ac16 million) and to the subsidiary SDA Express Courier for the stipulation of real estate lease contracts for new operating headquarters and warehouses intended for the management of specific orders in the \"integrated logistics\" segment (\u20ac54 million).
The item \"Adjustments\" refers to contractual changes during the period in question, e.g. for changes in duration due to extension, revision of economic conditions, etc.
The item terminations refers to the early termination of existing contracts with respect to their natural maturity.
The increase in Right-of-Use Assets recognised during the year and related to lease contracts for electric, hybrid and endothermic vehicles considered to be \"green\" amounted to approximately \u20ac39 million, exclusively referring to the Parent Company Poste Italiane SpA.
tab. A4.1 - Economic effects of lease agreements
\u00a0
(\u20acm)
Description
FY 2023
FY 2022
\u00a0
\u00a0
\u00a0
Depreciation, impairments and adjustments of right-of-use assets
272
249
Financial charges on lease payables
28
24
Costs related to short-term leases
35
38
Costs related to lease of low-value assets
14
15
Costs related to lease of intangible assets
102
72
\u00a0
\u00a0
\u00a0
Total
451
397
tab. A4.2- Movements in lease liability
\u00a0
(\u20acm)
FY 2023
Balance at 1 January
1,407
\u00a0
New contract increases
194
\u00a0
Payments
(298)
\u00a0
Finance costs
28
\u00a0
Change in scope
(3)
\u00a0
Other changes
12
\u00a0
Balance at 31 December
1,341
\u00a0
of which current
295
of which non-current
1,045
", "dimensions": { "concept": "ifrs-full:DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page615-cflshid_268357-tag141576": { "value": "
A5 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (\u20ac294 million)
tab. A5 - Investments
Description(\u20acm)
31.12.2023
31.12.2022
Changes
Investments in associates
290
263
27
Investments in subsidiaries
4
3
1
Total
294
267
27
tab. A5.1 - Investments accounted for using the equity method*
\u00a0
Description(\u20acm)
Balance at 01. 01. 2023
Increases / (Decreases)
Impairment losses
Other changes
Balance at 31.12.2023
accounted for using the equity method
Dividend adjustments
in associates
\u00a0
Anima Holding SpA
213
(1)
15
(8)
-
219
Conio Inc
1
0
(0)
-
-
1
Eurizon Capital Real Asset SGR
4
0
0
-
-
4
Financit SpA
36
(0)
3
(4)
-
35
ItaliaCamp Srl
1
-
0
-
-
1
Replica Sim SpA
9
-
(0)
-
-
9
Consorzio Italia Cloud
0
-
-
-
-
0
sennder Italia Srl
-
0
1
-
21
22
Total associates
263
(1)
19
(13)
21
290
in subsidiaries
\u00a0
Address Software Srl
1
0
0
-
-
1
Ecomind Srl
-
1
0
-
(1)
-
Kipoint SpA
2
-
1
(0)
-
3
Indabox Srl
0
-
0
-
-
1
Total subsidiaries
3
1
1
(0)
(1)
4
\u00a0
Total
267
1
20
(13)
20
294
* The values shown in the table are rounded in millions of euros (without decimal places). It follows that the sum of the amounts may not coincide with the rounded totals.
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
The item Investments in associates (valued using the equity method) mainly refers to the companies Anima Holding, Financit, Replica SIM and sennder Italia. The most significant changes during the year are shown below:
\u2022net positive adjustment of the carrying amount of the investment in Anima Holding S.p.A; approximately \u20ac6 million, of which: an increase of approximately \u20ac15 million for the share of the economic results achieved by the investee between 30 September 2022 and 30 September 2023, the date of the last available financial statements, and a decrease of \u20ac8 million due to the effect of dividends received from the result for 2022;
\u2022registration of the stake in sennder Italia worth \u20ac21 million. The company was classified as an investment in associates following the loss of control in the renegotiation of the partnership with sennder Technologies. In
accordance with IFRS 10, the residual associated stake in sennder Italia was recognised at fair value at the time of loss of control.
As required by IFRS, equity investments were subjected to an impairment test in order to verify whether there is objective evidence that their carrying amount is not fully recoverable, and no need for value adjustments emerged.
The method applied and the criteria used in conducting impairment tests of Anima Holding at 31 December 2023, are described in note 2.6 \u2013 Use of estimates, with regard to the impairment testing of goodwill, cash generating units and investments.
A list of subsidiaries, joint ventures and associates accounted for using the equity method is provided in Additional information \u2013 Scope of companies and key information on investments (note 13).
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page617-cflshid_269517-tag141577": { "value": "
A6 - FINANCIAL ASSETS (\u20ac237,159 million)
tab. A6 - Financial assets
\u00a0
Balance at 31.12.23
Balance at 31.12.22
\u00a0
Description(\u20acm)
Non-currentassets
Current assets
Total
Non-currentassets
Current assets
Total
Changes
\u00a0
\u00a0
\u00a0
Financial assets at amortised cost
32,049
13,054
45,103
29,483
16,812
46,295
(1,192)
Financial assets at FVTOCI
122,369
17,226
139,594
114,031
16,204
130,235
9,359
Financial assets at FVTPL
47,058
1,147
48,205
42,573
929
43,501
4,704
Derivative financial instruments
4,180
77
4,257
5,764
346
6,110
(1,853)
\u00a0
\u00a0
\u00a0
Total
205,656
31,503
237,159
\u00a0
191,850
34,290
226,141
11,018
of which Financial Activities
64,414
15,642
80,056
61,914
21,327
83,241
(3,185)
of which Insurance Activities
140,588
15,556
156,145
129,390
12,765
142,155
13,990
Of which Postal and Business Activities
647
6
653
539
1
540
113
Of which Payment Services and Card Payments Activities
7
299
306
\u00a0
8
198
206
100
Financial assets by operating segment break down as follows:
FINANCIAL ACTIVITIES
tab. A6.1 - Financial assets - Financial Services
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-currentassets
Current assets
Total
Non-currentassets
Current assets
Total
Changes
Financial assets at amortised cost
30,124
12,549
42,673
27,473
16,428
43,901
(1,228)
Loans
-
1,769
1,769
-
1,358
1,358
411
Receivables
0
10,505
10,505
0
14,844
14,844
(4,339)
Deposits with the MEF
0
8,932
8,932
0
11,902
11,902
(2,970)
Receivables
-
8,937
8,937
-
11,907
11,907
(2,970)
Provisions for doubtful amounts deposited with MEF
0
(5)
(5)
0
(5)
(5)
0
Other financial receivables
-
1,574
1,574
-
2,942
2,942
(1,368)
Fixed income instruments
30,124
274
30,398
27,473
226
27,699
2,700
Financial assets at FVTOCI
30,083
3,017
33,100
28,638
4,552
33,190
(90)
Fixed income instruments
30,083
3,017
33,100
28,638
4,552
33,190
(90)
Financial assets at FVTPL
26
-
26
40
-
40
(14)
Equity instruments
26
-
26
40
-
40
(14)
Derivative financial instruments
4,180
77
4,257
5,764
346
6,109
(1,853)
Total
64,414
15,642
80,056
61,914
21,327
83,241
(3,185)
Financial assets at amortised cost
Movements in financial assets measured at amortised cost are shown below:
tab. A6.1.1 - Movements in financial assets at amortised cost
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Loans and receivables
Fixed income instruments
Total
Balance at 1 January 2023
16,203
27,699
43,901
Purchases
\u00a0
2,754
2,754
Changes in amortised cost
-
(52)
(52)
Transfers to equity reserves
-
(76)
(76)
Changes in fair value through profit or loss
0
340
341
Changes in cash flow hedges (*)
-
53
53
Changes due to impairment
(5)
(5)
Net changes
(4,813)
\u00a0
(4,813)
Effects of sales on profit or loss
-
48
48
Accruals
5
233
238
Sales, redemptions and settlement of accruals
\u00a0
(595)
(595)
Other changes
881
-
881
Balance at 31 December 2023
12,275
30,398
42,673
(*)The item, \"Changes in cash flow hedges\", relates to the purchase of forward contracts in relation to cash flow hedge transactions and reflects changes in the fair value of these forward contracts between the date of purchase of the derivative contract and the settlement date, with a matching entry in equity, in the cash flow hedge reserve.
Loans and receivables
The item Loans refers to reverse repurchase agreements of \u20ac4,106 million (\u20ac4,575 million at 31 December 2022) mainly entered into with Cassa di Compensazione e Garanzia SpA (hereinafter CC&G) for the temporary use of liquidity from private funding. These transactions are guaranteed by securities for a total notional amount of \u20ac3,874 million. Financial assets and liabilities relating to repurchase agreements managed through the CC&G that meet the requirements of IAS 32are offset. The effect of netting at 31 December 2023, already included in the exposure to net balances, amounted to \u20ac2,337 million (\u20ac3,217 million at 31 December 2022). At 31 December 2023, the fair value218F219 of said item was \u20ac1,769 million.
Receivables include:
\u2022Deposits with the MEF, for \u20ac8,937 million, including public customers' postal current account deposits, which earn a variable rate of return, calculated on a basket of government bonds219F220. The deposit has been adjusted to reflect accumulated impairments of approximately \u20ac5 million, to reflect the risk of counterparty default (unchanged compared to 31 December 2022). The decrease in deposits of \u20ac2,970 million was mainly due to the typical operations of some customers in the Public Administration, which generated a contraction in deposits from postal current accounts. During the financial year 2023, hedging (management) derivative contracts were concluded on the 10-year index-linked remuneration component. The hedging transaction (Cash flow hedge) was carried out through forward purchases of the 10-year BTP with settlement of the differential between the pre-set price of the security and its market value. These transactions, completed at 31 December 2023, generated positive effects of \u20ac5 million, which was recognised in profit or loss under the item Income from investment in postal current accounts and free cash.
\u2022Other financial receivables, relating for \u20ac1,223 million to collateral deposits - of which \u20ac772 million for sums paid to counterparties for repo transactions on fixed income instruments (collateral under specific Global Master Repurchase Agreements), \u20ac323 million for sums paid to CC&G (\u20ac234 million for outstanding repo transactions and \u20ac89 million as a pre-funded contribution to the Default Fund220F221), \u20ac82 million for amounts paid to counterparties for interest rate swap transactions (collateral provided for in specific Credit Support Annexes) and \u20ac46 million in sums paid as collateral in relation to clearing systems with central counterparties for over-the-counter transactions in derivatives221F222.
The year-on-year decrease in guarantee deposits is mainly due to the reduction in amounts paid to counterparties with whom repo transactions are in place as a result of the combined effect of the change in the interest rate curve, which generated an increase in the fair value of the securities as collateral, and the lower amount of transactions outstanding at the date.
Fixed income instruments
These are Eurozone fixed income instruments held by BancoPosta RFC, consisting of government securities issued by the Italian government and securities guaranteed by the Italian government with a nominal value of \u20ac30,877 million. Their carrying amount of \u20ac30,398 million reflects the amortised cost of unhedged fixed income bonds, totalling \u20ac19,325 million, the amortised cost of fair-value hedged fixed income bonds, totalling \u20ac13,017 million, decreased by \u20ac1,944 million to take into account the effects of the hedge (\u20ac2,714 in 2022). Fixed income instruments measured at amortised cost are adjusted to take into account the related impairments. Accumulated impairments at 31 December 2023 amount to approximately
\u20ac18 million (\u20ac13 million at 31 December 2022).
At 31 December 2023, the fair value222F223 of these securities was \u20ac28,318 million (including \u20ac233 million in accrued income).
This category of financial asset includes fixed rate instruments, amounting to nominal \u20ac3,000 million, issued by Cassa Depositi e Prestiti SpA and guaranteed by the Italian government (at 31 December 2023, their carrying amount totals \u20ac2,889 million).
Financial assets at fair value through other comprehensive income
Movements in financial assets at fair value through other comprehensive income (FVTOCI) are shown below:
tab. A6.1.2 - Movements in financial assets at FVTOCI
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Fixed income instruments
Total
Balance at 1 January 2023
\u00a0
33,190
33,190
Purchases
3,841
3,841
Transfers to equity reserves
0
0
Changes in amortised cost
36
36
Changes in fair value through equity
1,940
1,940
Changes in fair value through profit or loss
383
383
Changes in cash flow hedges (*)
242
242
Effects of sales on profit or loss
110
110
Accruals
254
254
Sales, redemptions and settlement of accruals
(6,895)
(6,895)
Balance at 31 December 2023
\u00a0
33,100
33,100
(*)The item, \"Changes in cash flow hedges\", relates to the purchase of forward contracts in relation to cash flow hedge transactions and reflects changes in the fair value of these forward contracts between the date of purchase of the derivative contract and the settlement date, with a matching entry in equity, in the cash flow hedge reserve.
Fixed income instruments
These are Eurozone fixed income Government securities, consisting of government bonds, especially issued by the Italian government, held mainly by BancoPosta RFC, with a nominal value of \u20ac34,892 million.
Total fair value fluctuation for the year in question was positive for \u20ac2,323 million, with \u20ac1,940 million recognised in the relevant equity reserve in relation to the portion of the portfolio not hedged by fair value hedges, and \u20ac383 million recognised through profit or loss in relation to the hedged portion.
Accumulated impairments at 31 December 2023 amount to \u20ac19 million (\u20ac16 million at 31 December 2022). The decrease in this item is mainly due to higher sales/reimbursements made during the year compared to purchases, partially offset by the positive change in fair value mentioned above.
Certain securities are encumbered as they have been delivered to counterparties for use as collateral in connection with loans and hedging transactions, as described in note 13 \u2013 Additional information.
Financial assets at fair value through profit or loss
Equity instruments
The item in question refers to the fair value of 32,059 Visa Incorporated preference shares (Series C Convertible Participating Preferred Stock). These shares are convertible at the rate of 3.634223F224 ordinary shares for each C share, minus a suitable illiquidity discount.
Net fair value gains in the year under review, amounting to \u20ac6 million, have been recognised in profit or loss in the items Income and Expenses from financial activities.
In addition, two separate forward sales contracts were concluded during the financial year 2023:
\u2022the forward sale of 101,900 Visa Incorporated ordinary shares224F225, settled on 3 April 2023, for a total consideration of \u20ac20.8 million with insignificant effects on the statement of profit or loss;
\u2022the outstanding forward sale of 95,000 Visa Incorporated ordinary shares with a total consideration of \u20ac20.5 million and a settlement date of 3 March 2025225F226. Fair value fluctuations in the year under review, amounting to a negative \u20ac2.6 million, have been recognised in profit or loss in \"Expenses from financial activities\".
Derivative financial instruments
A6.1.3 - Derivative financial instruments
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
\u00a0
Balance at 31.12.2022
Description(\u20acm)
\u00a0
Nominal
Fair value
\u00a0
Nominal
Fair value
Cash flow hedges
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Forward purchases of securities
\u00a0
-
-
\u00a0
3,433
(92)
Forward sales
\u00a0
-
-
\u00a0
1,099
346
Interest rate swaps
\u00a0
3,287
(513)
\u00a0
2,943
(531)
Fair value hedges
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Interest rate swaps on securities at FVTOCI and AC
\u00a0
25,031
3,718
\u00a0
27,940
5,571
Interest rate swaps on repos
\u00a0
3,996
(83)
\u00a0
3,996
(155)
FVTPL
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Forward sales
\u00a0
0
(3)
\u00a0
0
(4)
Derivative financial instruments
\u00a0
32,314
3,119
\u00a0
39,411
5,135
Of which:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Derivative assets
\u00a0
19,665
4,257
\u00a0
27,404
6,109
Derivative liabilities
\u00a0
12,649
(1,138)
\u00a0
12,007
(975)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Interest rate swap cash flow hedges relate exclusively to securities valued at FVTOCI.
Interest rate risk cash flow hedges recorded a net negative change of \u20ac236 million during the year, of which \u20ac80 million related to the net positive change in fair value of the effective component of the hedge, reflected in the cash flow hedge reserve, and \u20ac316 million related to the net negative change in completed transactions226F227 during the year and the ineffective component of hedging contracts.
Fair value hedges in interest rate swaps are used to hedge:
\u2022securities measured at amortised cost with a nominal value of \u20ac12,011 million and securities measured at FVTOCI with a nominal value of \u20ac13,020 million; in total, they underwent a net negative change of \u20ac1,853 million during the year, of which \u20ac538 million related to the net negative change in fair value of the effective component of the hedge and \u20ac1,315 million related to the net negative change in transactions completed during the year and the ineffective component of hedging contracts;
\u2022repurchase agreements classified at amortised cost with a nominal value of \u20ac3,996 million, whose net positive change was \u20ac72 million, of which \u20ac32 million related to the net positive change in fair value of the effective hedging component and \u20ac40 million related to the net positive change in completed transactions.
In the year under review, the Parent Company carried out the following transactions:
\u2022settlement of forward purchases of securities outstanding at 1 January 2023 for a nominal value of \u20ac3,433 million;
\u2022forward purchases of securities to hedge, as of 1 January 2023, the yield of the MEF Deposit and settlement for a nominal amount of \u20ac290 million;
\u2022settlement of forward sales of securities outstanding at 1 January 2023 for a nominal value of \u20ac1,099 million;
\u2022the stipulation of new cash flow interest rate swaps with a nominal value of \u20ac484 million and the adjustment of those outstanding on 1 January 2023 for a nominal amount of \u20ac140 million;
\u2022the stipulation of new fair value interest rate swaps to hedge the securities portfolio with a nominal value of \u20ac3,596 million;
\u2022early settlements of fair value hedge interest rate swaps with a nominal value of \u20ac6,505 million (of which: \u20ac980 million related to hedging transactions for which the underlying security was also sold, \u20ac3,015 million related to hedging transactions without sale of the underlying security, and \u20ac2,510 million related to hedging transactions for which new asset swaps were entered into) with the aim of consolidating a fixed yield in line with the market situation, while at the same time improving the income profile of a portion of the portfolio for subsequent years.
INSURANCE ACTIVITIES
tab. A6.2 - Financial assets - Insurance Services
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Current assets
Current assets
Total
Changes
Description(\u20acm)
Non-currentassets
Total
Non-currentassets
Financial assets at amortised cost
1,922
200
2,123
2,008
185
2,193
(70)
Receivables
0
54
55
-
34
34
21
Fixed income instruments
1,922
146
2,068
2,008
151
2,159
(91)
Financial assets at FVTOCI
91,643
14,209
105,852
84,850
11,651
96,501
9,351
Fixed income instruments
91,638
14,209
105,847
84,348
11,651
95,999
9,848
Other investments
-
-
-
501
0
502
(502)
Equity instruments
5
-
5
-
-
-
5
Financial assets at FVTPL
47,023
1,147
48,170
42,532
929
43,461
4,709
Receivables
-
-
-
-
110
110
(110)
Fixed income instruments
2,211
353
2,564
1,959
326
2,285
279
Units of mutual investment funds
44,790
308
45,098
40,552
229
40,781
4,318
Equity instruments
1
485
486
-
264
264
222
Other investments
21
1
22
21
0
21
1
Total
140,588
15,556
156,145
129,390
12,765
142,155
13,990
Financial assets at amortised cost
Movements in financial assets measured at amortised cost are shown below:
tab. A6.2.1 - Movements in financial assets at amortised cost
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
Loans and receivables
\u00a0
Fixed income instruments
\u00a0
Total
\u00a0
Balance at 1 January 2023
\u00a0
34
\u00a0
2,159
\u00a0
2,193
Purchases
\u00a0
38
38
Changes in amortised cost
-
5
5
Changes in fair value through profit or loss
-
(0)
(0)
Changes in cash flow hedges
-
-
-
Changes due to impairment
-
-
-
Net changes
20
\u00a0
20
Effects of sales on profit or loss
-
(0)
(0)
Accruals
-
18
18
Sales, redemptions and settlement of accruals
\u00a0
(151)
(151)
Balance at 31 December 2023
\u00a0
55
\u00a0
2,068
\u00a0
2,123
Receivables
Financial receivables of \u20ac55 million mainly regard receivables for management commissions of Poste Vita internal funds.
Fixed income instruments
Fixed income instruments at amortised cost at 31 December 2023 have a carrying amount of \u20ac2,068 million. These instruments mainly relate to the free capital of Poste Vita SpA and Poste Assicura SpA. At 31 December 2023, the fair value227F228 of these securities amounted to \u20ac1,888 million.
Fixed income instruments measured at amortised cost are adjusted to take into account the related impairments. Accumulated impairments at 31 December 2023 amount to approximately \u20ac0.9 million (\u20ac0.9 million at 31 December 2022).
Financial assets at fair value through other comprehensive income
Movements in financial assets at fair value through other comprehensive income are shown below:
tab. A6.2.2 - Movements in financial assets at FVTOCI
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Fixed income instruments
Other investments
Equity instruments
Total
\u00a0
Balance at 1 January 2023
95,999
502
0
96,501
Change in scope of consolidation
198
0
2
201
Purchases
18,353
0
3
18,356
Transfers to equity reserves
2
(1)
0
1
Changes in amortised cost
630
(0)
0
630
Changes in fair value through equity
5,749
0
(0)
5,748
Effects of sales on profit or loss
(34)
0
0
(34)
Accruals
899
0
0
899
Sales, redemptions and settlement of accruals
(15,948)
(501)
0
(16,449)
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31 December 2023
105,847
0
5
105,852
These financial instruments recorded a positive change in fair value of \u20ac5,749 million, of which \u20ac5,532 million contributed to the revaluation of insurance liabilities.
Fixed income instruments
At 31 December 2023, these securities relate to investments held by Poste Vita SpA for \u20ac105,087 million (a nominal value of \u20ac113,663 million) represented by instruments by European governments and leading European companies. These securities are used to hedge products related to Separately Managed Accounts in the amount of \u20ac101,779 million. The item in question comprises bonds issued by CDP SpA, with a fair value of \u20ac121 million. Accumulated impairment at 31 December 2023 amounts to approximately \u20ac55 million, almost entirely reflected in insurance liabilities.
In addition, following the consolidation of Net Insurance and Net Insurance Life, fixed income instruments increased by about \u20ac246 million, mainly relating to listed instruments issued by European states and leading European companies.
Other investments
At 31 December 2023, this item was nil as the private placement of the Constant Maturity Swap from Cassa Depositi e Prestiti was fully repaid in December.
Financial assets at fair value through profit or loss
Below are the movements in financial assets at fair value through profit or loss:
tab. A6.2.3 - Movements in financial assets at FVTPL
\u00a0
\u00a0
Description(\u20acm)
Receivables
Fixed income instruments
Other investments
Units of mutual investment funds
Equity instruments
Total
\u00a0
Balance at 1 January 2023
110
2,285
21
40,781
264
43,461
Change in scope of consolidation
-
3
-
25
2
30
Purchases
\u00a0
349
-
3,866
367
4,583
Changes in fair value through profit or loss
-
156
1
2,379
62
2,598
Net changes
(110)
\u00a0
\u00a0
\u00a0
\u00a0
(110)
Effects of sales on profit or loss
-
5
-
75
38
118
Accruals
-
38
1
-
-
39
Sales, redemptions and settlement of accruals
\u00a0
(273)
(0)
(2,027)
(248)
(2,548)
\u00a0
Balance at 31 December 2023
-
2,564
22
45,098
486
48,170
Fixed income instruments
At 31 December 2023, fixed income instruments amounting to \u20ac2,564 million were held almost exclusively by Poste Vita and mainly consisted of corporate instruments issued by primary issuers and used to hedge products linked to Separately managed accounts amounting to \u20ac2,118 million.
Units of mutual investment funds
At 31 December 2023, units of mutual investment funds amounting to \u20ac45,098 million include around \u20ac33,165 million to cover Class I separately managed account products and \u20ac11,908 million to cover Class III policies. The remainder relates to investment of Poste Vita's free capital (see note 13 \u2013 Additional information - Unconsolidated structured entities). Net investment in the funds during the period in question amounts to \u20ac1,839 million and the fair value has increased by approximately \u20ac2,379 million, an effect that almost contributed entirely to the revaluation of insurance liabilities. At 31 December 2023, the investments in UCITS (including multi-asset funds) amounted to \u20ac40,810, units in mutual real estate funds totalled \u20ac2,251 million, while mutual funds that primarily invest in bonds came to \u20ac2,017 million.
In addition, following the consolidation of Net Insurance and Net Insurance Life, the item increased by approximately \u20ac21 million, mainly related to units in private debt mutual funds.
Of the total amount of mutual funds in which Poste Vita SpA invests, an amount of around \u20ac7 billion refers to funds whose investment policies consider environmental, social and governance factors (ESG factors).
Equity instruments
Equity instruments amounted to \u20ac486 million, and are held primarily by the company Poste Vita and pledged primarily to cover Class I products linked to separately managed accounts and Class III policies. The change over the period reflects the combined effect of net investments of approximately \u20ac120 million and the registration of income of \u20ac100 million.
Other investments
Other investments of \u20ac22 million relate to a Constant Maturity Swap placed by Cassa Depositi e Prestiti and held by Poste Vita (a nominal value of \u20ac22 million) and covering products linked to separately managed accounts.
\u00a0
Derivative financial instruments
At 31 December 2023, there were no derivative transactions.
POSTAL AND BUSINESS ACTIVITIES
tab. A6.3 - Financial assets - Postal and Business Services
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.23
Balance at 31.12.22
\u00a0
Description(\u20acm)
Non-currentassets
Current assets
Total
Non-currentassets
Current assets
Total
Changes
Financial assets at amortised cost
2
6
8
2
1
3
6
Loans
-
1
1
-
(0)
(0)
1
Receivables
2
1
3
2
1
3
0
Due from the purchasers of service accommodation
2
\u00a0
2
2
1
3
(1)
Due from Others
-
20
20
-
20
20
0
Provisions for doubtful financial debts
(0)
(20)
(20)
(0)
(20)
(20)
(0)
Financial assets at FVTPL
9
-
9
(0)
-
(0)
9
Bond
9
-
9
(0)
-
(0)
9
Financial assets at FVTOCI
636
0
636
536
0
536
100
Fixed income instruments
99
0
99
91
0
91
8
Equity instruments
537
-
537
445
-
445
92
Derivative financial instruments
0
0
0
0
0
0
(0)
Total
647
6
653
539
1
540
113
Financial assets at amortised cost
Amounts due from others, with a nominal value of \u20ac20 million, regard the remaining amount due from Invitalia S.p.A. as a result of the sale of Banca del Mezzogiorno-MedioCreditoCentrale S.p.A. (BoM).
Financial assets at fair value through other comprehensive income
tab. A6.3.1 - Movements in financial assets at FVTOCI
\u00a0
\u00a0
Description(\u20acm)
Fixed income instruments
\u00a0
Equity instruments
Total
Balance at 1 January 2023
\u00a0
91
\u00a0
445
536
Purchases
\u00a0
-
\u00a0
3
3
Transfers to equity reserves
\u00a0
-
\u00a0
-
-
Changes in amortised cost
\u00a0
2
\u00a0
-
2
Changes in fair value through equity
\u00a0
6
\u00a0
(4)
2
Effects of sales on profit or loss
\u00a0
-
\u00a0
-
-
Accruals
\u00a0
0
\u00a0
-
0
Extraordinary transactions
\u00a0
-
\u00a0
93
93
Sales, redemptions and settlement of accruals
\u00a0
(0)
\u00a0
-
(0)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31 December 2023
\u00a0
99
\u00a0
537
636
Fixed income instruments
This item includes one Italian government bond with a nominal value of \u20ac110 million purchased during 2022. The fluctuation in fair value at 31 December 2023 was positive for \u20ac6 million and recognised in the specific equity reserve.
Equity instruments
tab. A6.3.2 - Shares at FVTOCI
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.22
Changes
Moneyfarm Holding L.t.d.
55
57
(1)
sennder Technologies Gmbh
112
19
93
Scalapay Limited
25
25
-
Nexi
345
343
2
Milkman S.p.A
-
2
(2)
\u00a0
\u00a0
\u00a0
\u00a0
Total
537
445
92
The shares at FVTOCI amounted to \u20ac537 million and, compared to the previous year (\u20ac445 million), changed due to the recognition of the additional share of sennder Technologies Gmbh for \u20ac93 million acquired as part of the renegotiation of the partnership, for details of which see section 2.8. Main changes to the scope of consolidation.
In July 2023, Poste Italiane participated in a new capital increase promoted by MFM Holding Ltd with an investment of \u20ac3 million.
The overall fluctuation in fair value of the item in question was negative for \u20ac4 million and recognised in the specific equity reserve.
Lastly, the item includes, for \u20ac75 million the investment in CAI SpA (formerly Alitalia CAI SpA), acquired in 2013 and fully written off in 2014.
Further details of the corporate transactions during the year are provided in note 3.1 \u2013 Principal corporate actions.
Financial assets at fair value through profit or loss
The item includes a portion of the convertible bond issued by sennder Technologies GmbH and subscribed by Poste Italiane in July 2023 for about \u20ac8.5 million, representing the fair value at 31 December 2023, as well as participating financial instruments (pursuant to Article 2346, paragraph 6, of the Italian Civil Code) arising from the conversion of Contingent Convertible Notes228F229 - issued by Midco SpA - whose value, at 31 December 2023, was zero.
Derivative financial instruments
The following transactions took place during the year:
\u2022stipulation and settlement of three commodity swaps for the operational hedging of fuel costs relating to the air transport of mail carried out via the subsidiary, Poste Air Cargo Srl;
\u2022stipulation and settlement of forty-two non-deliverable forward contracts to operationally hedge the currency risk (euro/dollar) mainly related to aircraft leasing fees for air mail transport carried out through the subsidiary Poste Air Cargo Srl.
Finally, in October 2023, a cash flow hedge interest rate swap contract entered into in 2013 to hedge the cash flows of a \u20ac50 million bond issued on 25 October 2013 (note B.8 Financial liabilities) reached maturity. The closing of the derivative resulted in the release to the statement of profit or loss, recognised under Finance Income, of the cash flow hedge reserve
of approximately \u20ac6 million, which was established as of 25 October 2015, the date from which the cash flow hedge became operative.
PAYMENT SERVICES AND CARD PAYMENTS ACTIVITIES
tab. A6.4 - Financial assets - Payment Services and Card Payments Services
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
\u00a0
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-currentassets
Current assets
Total
\u00a0
Non-currentassets
Current assets
Total
Changes
Financial assets at amortised cost
0
299
299
\u00a0
0
198
198
101
Receivables
0
299
299
\u00a0
0
198
198
101
Financial assets at FVTOCI
7
0
7
\u00a0
8
0
8
(1)
Equity instruments
7
0
7
\u00a0
8
0
8
(1)
Financial assets at FVTPL
1
0
1
\u00a0
0
0
0
1
Convertible bond
1
0
1
\u00a0
0
0
0
1
Total
7
299
306
\u00a0
8
198
206
100
Financial assets at amortised cost
Financial assets at amortised cost mainly refer to receivables from international settlement circuits for the acquiring service and to items in progress to be settled on prepaid cards of the EMI assets.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income refer entirely to the investment in the company Volante.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss refer entirely to the convertible bond loan entered into with Volant\u00e8 Technologies Inc. in July 2023.
For further information in this regard, see Note 3.1 - Principal corporate actions.
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Financial assets at amortised cost
Movements in financial assets measured at amortised cost are shown below:
tab. A6.1.1 - Movements in financial assets at amortised cost
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Loans and receivables
Fixed income instruments
Total
Balance at 1 January 2023
16,203
27,699
43,901
Purchases
\u00a0
2,754
2,754
Changes in amortised cost
-
(52)
(52)
Transfers to equity reserves
-
(76)
(76)
Changes in fair value through profit or loss
0
340
341
Changes in cash flow hedges (*)
-
53
53
Changes due to impairment
(5)
(5)
Net changes
(4,813)
\u00a0
(4,813)
Effects of sales on profit or loss
-
48
48
Accruals
5
233
238
Sales, redemptions and settlement of accruals
\u00a0
(595)
(595)
Other changes
881
-
881
Balance at 31 December 2023
12,275
30,398
42,673
(*)The item, \"Changes in cash flow hedges\", relates to the purchase of forward contracts in relation to cash flow hedge transactions and reflects changes in the fair value of these forward contracts between the date of purchase of the derivative contract and the settlement date, with a matching entry in equity, in the cash flow hedge reserve.
Loans and receivables
The item Loans refers to reverse repurchase agreements of \u20ac4,106 million (\u20ac4,575 million at 31 December 2022) mainly entered into with Cassa di Compensazione e Garanzia SpA (hereinafter CC&G) for the temporary use of liquidity from private funding. These transactions are guaranteed by securities for a total notional amount of \u20ac3,874 million. Financial assets and liabilities relating to repurchase agreements managed through the CC&G that meet the requirements of IAS 32are offset. The effect of netting at 31 December 2023, already included in the exposure to net balances, amounted to \u20ac2,337 million (\u20ac3,217 million at 31 December 2022). At 31 December 2023, the fair value218F219 of said item was \u20ac1,769 million.
Receivables include:
\u2022Deposits with the MEF, for \u20ac8,937 million, including public customers' postal current account deposits, which earn a variable rate of return, calculated on a basket of government bonds219F220. The deposit has been adjusted to reflect accumulated impairments of approximately \u20ac5 million, to reflect the risk of counterparty default (unchanged compared to 31 December 2022). The decrease in deposits of \u20ac2,970 million was mainly due to the typical operations of some customers in the Public Administration, which generated a contraction in deposits from postal current accounts. During the financial year 2023, hedging (management) derivative contracts were concluded on the 10-year index-linked remuneration component. The hedging transaction (Cash flow hedge) was carried out through forward purchases of the 10-year BTP with settlement of the differential between the pre-set price of the security and its market value. These transactions, completed at 31 December 2023, generated positive effects of \u20ac5 million, which was recognised in profit or loss under the item Income from investment in postal current accounts and free cash.
\u2022Other financial receivables, relating for \u20ac1,223 million to collateral deposits - of which \u20ac772 million for sums paid to counterparties for repo transactions on fixed income instruments (collateral under specific Global Master Repurchase Agreements), \u20ac323 million for sums paid to CC&G (\u20ac234 million for outstanding repo transactions and \u20ac89 million as a pre-funded contribution to the Default Fund220F221), \u20ac82 million for amounts paid to counterparties for interest rate swap transactions (collateral provided for in specific Credit Support Annexes) and \u20ac46 million in sums paid as collateral in relation to clearing systems with central counterparties for over-the-counter transactions in derivatives221F222.
The year-on-year decrease in guarantee deposits is mainly due to the reduction in amounts paid to counterparties with whom repo transactions are in place as a result of the combined effect of the change in the interest rate curve, which generated an increase in the fair value of the securities as collateral, and the lower amount of transactions outstanding at the date.
Fixed income instruments
These are Eurozone fixed income instruments held by BancoPosta RFC, consisting of government securities issued by the Italian government and securities guaranteed by the Italian government with a nominal value of \u20ac30,877 million. Their carrying amount of \u20ac30,398 million reflects the amortised cost of unhedged fixed income bonds, totalling \u20ac19,325 million, the amortised cost of fair-value hedged fixed income bonds, totalling \u20ac13,017 million, decreased by \u20ac1,944 million to take into account the effects of the hedge (\u20ac2,714 in 2022). Fixed income instruments measured at amortised cost are adjusted to take into account the related impairments. Accumulated impairments at 31 December 2023 amount to approximately
\u20ac18 million (\u20ac13 million at 31 December 2022).
At 31 December 2023, the fair value222F223 of these securities was \u20ac28,318 million (including \u20ac233 million in accrued income).
This category of financial asset includes fixed rate instruments, amounting to nominal \u20ac3,000 million, issued by Cassa Depositi e Prestiti SpA and guaranteed by the Italian government (at 31 December 2023, their carrying amount totals \u20ac2,889 million).
Financial assets at amortised cost
Movements in financial assets measured at amortised cost are shown below:
tab. A6.2.1 - Movements in financial assets at amortised cost
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
Loans and receivables
\u00a0
Fixed income instruments
\u00a0
Total
\u00a0
Balance at 1 January 2023
\u00a0
34
\u00a0
2,159
\u00a0
2,193
Purchases
\u00a0
38
38
Changes in amortised cost
-
5
5
Changes in fair value through profit or loss
-
(0)
(0)
Changes in cash flow hedges
-
-
-
Changes due to impairment
-
-
-
Net changes
20
\u00a0
20
Effects of sales on profit or loss
-
(0)
(0)
Accruals
-
18
18
Sales, redemptions and settlement of accruals
\u00a0
(151)
(151)
Balance at 31 December 2023
\u00a0
55
\u00a0
2,068
\u00a0
2,123
Receivables
Financial receivables of \u20ac55 million mainly regard receivables for management commissions of Poste Vita internal funds.
Fixed income instruments
Fixed income instruments at amortised cost at 31 December 2023 have a carrying amount of \u20ac2,068 million. These instruments mainly relate to the free capital of Poste Vita SpA and Poste Assicura SpA. At 31 December 2023, the fair value227F228 of these securities amounted to \u20ac1,888 million.
Fixed income instruments measured at amortised cost are adjusted to take into account the related impairments. Accumulated impairments at 31 December 2023 amount to approximately \u20ac0.9 million (\u20ac0.9 million at 31 December 2022).
Financial assets at amortised cost
Amounts due from others, with a nominal value of \u20ac20 million, regard the remaining amount due from Invitalia S.p.A. as a result of the sale of Banca del Mezzogiorno-MedioCreditoCentrale S.p.A. (BoM).
Financial assets at amortised cost
Financial assets at amortised cost mainly refer to receivables from international settlement circuits for the acquiring service and to items in progress to be settled on prepaid cards of the EMI assets.
", "dimensions": { "concept": "ext:DisclosureOfFinancialInstrumentsAtAmortisedCostExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page620-cflshid_271629-tag141579": { "value": "
Financial assets at fair value through other comprehensive income
Movements in financial assets at fair value through other comprehensive income (FVTOCI) are shown below:
tab. A6.1.2 - Movements in financial assets at FVTOCI
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Fixed income instruments
Total
Balance at 1 January 2023
\u00a0
33,190
33,190
Purchases
3,841
3,841
Transfers to equity reserves
0
0
Changes in amortised cost
36
36
Changes in fair value through equity
1,940
1,940
Changes in fair value through profit or loss
383
383
Changes in cash flow hedges (*)
242
242
Effects of sales on profit or loss
110
110
Accruals
254
254
Sales, redemptions and settlement of accruals
(6,895)
(6,895)
Balance at 31 December 2023
\u00a0
33,100
33,100
(*)The item, \"Changes in cash flow hedges\", relates to the purchase of forward contracts in relation to cash flow hedge transactions and reflects changes in the fair value of these forward contracts between the date of purchase of the derivative contract and the settlement date, with a matching entry in equity, in the cash flow hedge reserve.
Fixed income instruments
These are Eurozone fixed income Government securities, consisting of government bonds, especially issued by the Italian government, held mainly by BancoPosta RFC, with a nominal value of \u20ac34,892 million.
Total fair value fluctuation for the year in question was positive for \u20ac2,323 million, with \u20ac1,940 million recognised in the relevant equity reserve in relation to the portion of the portfolio not hedged by fair value hedges, and \u20ac383 million recognised through profit or loss in relation to the hedged portion.
Accumulated impairments at 31 December 2023 amount to \u20ac19 million (\u20ac16 million at 31 December 2022). The decrease in this item is mainly due to higher sales/reimbursements made during the year compared to purchases, partially offset by the positive change in fair value mentioned above.
Certain securities are encumbered as they have been delivered to counterparties for use as collateral in connection with loans and hedging transactions, as described in note 13 \u2013 Additional information.
Financial assets at fair value through other comprehensive income
Movements in financial assets at fair value through other comprehensive income are shown below:
tab. A6.2.2 - Movements in financial assets at FVTOCI
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Fixed income instruments
Other investments
Equity instruments
Total
\u00a0
Balance at 1 January 2023
95,999
502
0
96,501
Change in scope of consolidation
198
0
2
201
Purchases
18,353
0
3
18,356
Transfers to equity reserves
2
(1)
0
1
Changes in amortised cost
630
(0)
0
630
Changes in fair value through equity
5,749
0
(0)
5,748
Effects of sales on profit or loss
(34)
0
0
(34)
Accruals
899
0
0
899
Sales, redemptions and settlement of accruals
(15,948)
(501)
0
(16,449)
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31 December 2023
105,847
0
5
105,852
These financial instruments recorded a positive change in fair value of \u20ac5,749 million, of which \u20ac5,532 million contributed to the revaluation of insurance liabilities.
Fixed income instruments
At 31 December 2023, these securities relate to investments held by Poste Vita SpA for \u20ac105,087 million (a nominal value of \u20ac113,663 million) represented by instruments by European governments and leading European companies. These securities are used to hedge products related to Separately Managed Accounts in the amount of \u20ac101,779 million. The item in question comprises bonds issued by CDP SpA, with a fair value of \u20ac121 million. Accumulated impairment at 31 December 2023 amounts to approximately \u20ac55 million, almost entirely reflected in insurance liabilities.
In addition, following the consolidation of Net Insurance and Net Insurance Life, fixed income instruments increased by about \u20ac246 million, mainly relating to listed instruments issued by European states and leading European companies.
Other investments
At 31 December 2023, this item was nil as the private placement of the Constant Maturity Swap from Cassa Depositi e Prestiti was fully repaid in December.
Financial assets at fair value through other comprehensive income
tab. A6.3.1 - Movements in financial assets at FVTOCI
\u00a0
\u00a0
Description(\u20acm)
Fixed income instruments
\u00a0
Equity instruments
Total
Balance at 1 January 2023
\u00a0
91
\u00a0
445
536
Purchases
\u00a0
-
\u00a0
3
3
Transfers to equity reserves
\u00a0
-
\u00a0
-
-
Changes in amortised cost
\u00a0
2
\u00a0
-
2
Changes in fair value through equity
\u00a0
6
\u00a0
(4)
2
Effects of sales on profit or loss
\u00a0
-
\u00a0
-
-
Accruals
\u00a0
0
\u00a0
-
0
Extraordinary transactions
\u00a0
-
\u00a0
93
93
Sales, redemptions and settlement of accruals
\u00a0
(0)
\u00a0
-
(0)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31 December 2023
\u00a0
99
\u00a0
537
636
Fixed income instruments
This item includes one Italian government bond with a nominal value of \u20ac110 million purchased during 2022. The fluctuation in fair value at 31 December 2023 was positive for \u20ac6 million and recognised in the specific equity reserve.
Equity instruments
tab. A6.3.2 - Shares at FVTOCI
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.22
Changes
Moneyfarm Holding L.t.d.
55
57
(1)
sennder Technologies Gmbh
112
19
93
Scalapay Limited
25
25
-
Nexi
345
343
2
Milkman S.p.A
-
2
(2)
\u00a0
\u00a0
\u00a0
\u00a0
Total
537
445
92
The shares at FVTOCI amounted to \u20ac537 million and, compared to the previous year (\u20ac445 million), changed due to the recognition of the additional share of sennder Technologies Gmbh for \u20ac93 million acquired as part of the renegotiation of the partnership, for details of which see section 2.8. Main changes to the scope of consolidation.
In July 2023, Poste Italiane participated in a new capital increase promoted by MFM Holding Ltd with an investment of \u20ac3 million.
The overall fluctuation in fair value of the item in question was negative for \u20ac4 million and recognised in the specific equity reserve.
Lastly, the item includes, for \u20ac75 million the investment in CAI SpA (formerly Alitalia CAI SpA), acquired in 2013 and fully written off in 2014.
Further details of the corporate transactions during the year are provided in note 3.1 \u2013 Principal corporate actions.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income refer entirely to the investment in the company Volante.
", "dimensions": { "concept": "ext:DisclosureOfFinancialInstrumentsAtFairValueThroughOtherComprehensiveIncomeExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page621-cflshid_272074-tag141580": { "value": "Financial assets at fair value through profit or loss
Equity instruments
The item in question refers to the fair value of 32,059 Visa Incorporated preference shares (Series C Convertible Participating Preferred Stock). These shares are convertible at the rate of 3.634223F224 ordinary shares for each C share, minus a suitable illiquidity discount.
Net fair value gains in the year under review, amounting to \u20ac6 million, have been recognised in profit or loss in the items Income and Expenses from financial activities.
In addition, two separate forward sales contracts were concluded during the financial year 2023:
\u2022the forward sale of 101,900 Visa Incorporated ordinary shares224F225, settled on 3 April 2023, for a total consideration of \u20ac20.8 million with insignificant effects on the statement of profit or loss;
\u2022the outstanding forward sale of 95,000 Visa Incorporated ordinary shares with a total consideration of \u20ac20.5 million and a settlement date of 3 March 2025225F226. Fair value fluctuations in the year under review, amounting to a negative \u20ac2.6 million, have been recognised in profit or loss in \"Expenses from financial activities\".
Financial assets at fair value through profit or loss
Below are the movements in financial assets at fair value through profit or loss:
Fixed income instruments
At 31 December 2023, fixed income instruments amounting to \u20ac2,564 million were held almost exclusively by Poste Vita and mainly consisted of corporate instruments issued by primary issuers and used to hedge products linked to Separately managed accounts amounting to \u20ac2,118 million.
Units of mutual investment funds
At 31 December 2023, units of mutual investment funds amounting to \u20ac45,098 million include around \u20ac33,165 million to cover Class I separately managed account products and \u20ac11,908 million to cover Class III policies. The remainder relates to investment of Poste Vita's free capital (see note 13 \u2013 Additional information - Unconsolidated structured entities). Net investment in the funds during the period in question amounts to \u20ac1,839 million and the fair value has increased by approximately \u20ac2,379 million, an effect that almost contributed entirely to the revaluation of insurance liabilities. At 31 December 2023, the investments in UCITS (including multi-asset funds) amounted to \u20ac40,810, units in mutual real estate funds totalled \u20ac2,251 million, while mutual funds that primarily invest in bonds came to \u20ac2,017 million.
In addition, following the consolidation of Net Insurance and Net Insurance Life, the item increased by approximately \u20ac21 million, mainly related to units in private debt mutual funds.
Of the total amount of mutual funds in which Poste Vita SpA invests, an amount of around \u20ac7 billion refers to funds whose investment policies consider environmental, social and governance factors (ESG factors).
Equity instruments
Equity instruments amounted to \u20ac486 million, and are held primarily by the company Poste Vita and pledged primarily to cover Class I products linked to separately managed accounts and Class III policies. The change over the period reflects the combined effect of net investments of approximately \u20ac120 million and the registration of income of \u20ac100 million.
Other investments
Other investments of \u20ac22 million relate to a Constant Maturity Swap placed by Cassa Depositi e Prestiti and held by Poste Vita (a nominal value of \u20ac22 million) and covering products linked to separately managed accounts.
\u00a0
Derivative financial instruments
At 31 December 2023, there were no derivative transactions.
tab. A6.2.3 - Movements in financial assets at FVTPL
\u00a0
\u00a0
Description(\u20acm)
Receivables
Fixed income instruments
Other investments
Units of mutual investment funds
Equity instruments
Total
\u00a0
Balance at 1 January 2023
110
2,285
21
40,781
264
43,461
Change in scope of consolidation
-
3
-
25
2
30
Purchases
\u00a0
349
-
3,866
367
4,583
Changes in fair value through profit or loss
-
156
1
2,379
62
2,598
Net changes
(110)
\u00a0
\u00a0
\u00a0
\u00a0
(110)
Effects of sales on profit or loss
-
5
-
75
38
118
Accruals
-
38
1
-
-
39
Sales, redemptions and settlement of accruals
\u00a0
(273)
(0)
(2,027)
(248)
(2,548)
\u00a0
Balance at 31 December 2023
-
2,564
22
45,098
486
48,170
Financial assets at fair value through profit or loss
The item includes a portion of the convertible bond issued by sennder Technologies GmbH and subscribed by Poste Italiane in July 2023 for about \u20ac8.5 million, representing the fair value at 31 December 2023, as well as participating financial instruments (pursuant to Article 2346, paragraph 6, of the Italian Civil Code) arising from the conversion of Contingent Convertible Notes228F229 - issued by Midco SpA - whose value, at 31 December 2023, was zero.
Derivative financial instruments
The following transactions took place during the year:
\u2022stipulation and settlement of three commodity swaps for the operational hedging of fuel costs relating to the air transport of mail carried out via the subsidiary, Poste Air Cargo Srl;
\u2022stipulation and settlement of forty-two non-deliverable forward contracts to operationally hedge the currency risk (euro/dollar) mainly related to aircraft leasing fees for air mail transport carried out through the subsidiary Poste Air Cargo Srl.
Finally, in October 2023, a cash flow hedge interest rate swap contract entered into in 2013 to hedge the cash flows of a \u20ac50 million bond issued on 25 October 2013 (note B.8 Financial liabilities) reached maturity. The closing of the derivative resulted in the release to the statement of profit or loss, recognised under Finance Income, of the cash flow hedge reserve
of approximately \u20ac6 million, which was established as of 25 October 2015, the date from which the cash flow hedge became operative.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss refer entirely to the convertible bond loan entered into with Volant\u00e8 Technologies Inc. in July 2023.
For further information in this regard, see Note 3.1 - Principal corporate actions.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page621-cflshid_272074-tag141581": { "value": "
Derivative financial instruments
A6.1.3 - Derivative financial instruments
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
\u00a0
Balance at 31.12.2022
Description(\u20acm)
\u00a0
Nominal
Fair value
\u00a0
Nominal
Fair value
Cash flow hedges
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Forward purchases of securities
\u00a0
-
-
\u00a0
3,433
(92)
Forward sales
\u00a0
-
-
\u00a0
1,099
346
Interest rate swaps
\u00a0
3,287
(513)
\u00a0
2,943
(531)
Fair value hedges
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Interest rate swaps on securities at FVTOCI and AC
\u00a0
25,031
3,718
\u00a0
27,940
5,571
Interest rate swaps on repos
\u00a0
3,996
(83)
\u00a0
3,996
(155)
FVTPL
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Forward sales
\u00a0
0
(3)
\u00a0
0
(4)
Derivative financial instruments
\u00a0
32,314
3,119
\u00a0
39,411
5,135
Of which:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Derivative assets
\u00a0
19,665
4,257
\u00a0
27,404
6,109
Derivative liabilities
\u00a0
12,649
(1,138)
\u00a0
12,007
(975)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Interest rate swap cash flow hedges relate exclusively to securities valued at FVTOCI.
Interest rate risk cash flow hedges recorded a net negative change of \u20ac236 million during the year, of which \u20ac80 million related to the net positive change in fair value of the effective component of the hedge, reflected in the cash flow hedge reserve, and \u20ac316 million related to the net negative change in completed transactions226F227 during the year and the ineffective component of hedging contracts.
Fair value hedges in interest rate swaps are used to hedge:
\u2022securities measured at amortised cost with a nominal value of \u20ac12,011 million and securities measured at FVTOCI with a nominal value of \u20ac13,020 million; in total, they underwent a net negative change of \u20ac1,853 million during the year, of which \u20ac538 million related to the net negative change in fair value of the effective component of the hedge and \u20ac1,315 million related to the net negative change in transactions completed during the year and the ineffective component of hedging contracts;
\u2022repurchase agreements classified at amortised cost with a nominal value of \u20ac3,996 million, whose net positive change was \u20ac72 million, of which \u20ac32 million related to the net positive change in fair value of the effective hedging component and \u20ac40 million related to the net positive change in completed transactions.
In the year under review, the Parent Company carried out the following transactions:
\u2022settlement of forward purchases of securities outstanding at 1 January 2023 for a nominal value of \u20ac3,433 million;
\u2022forward purchases of securities to hedge, as of 1 January 2023, the yield of the MEF Deposit and settlement for a nominal amount of \u20ac290 million;
\u2022settlement of forward sales of securities outstanding at 1 January 2023 for a nominal value of \u20ac1,099 million;
\u2022the stipulation of new cash flow interest rate swaps with a nominal value of \u20ac484 million and the adjustment of those outstanding on 1 January 2023 for a nominal amount of \u20ac140 million;
\u2022the stipulation of new fair value interest rate swaps to hedge the securities portfolio with a nominal value of \u20ac3,596 million;
\u2022early settlements of fair value hedge interest rate swaps with a nominal value of \u20ac6,505 million (of which: \u20ac980 million related to hedging transactions for which the underlying security was also sold, \u20ac3,015 million related to hedging transactions without sale of the underlying security, and \u20ac2,510 million related to hedging transactions for which new asset swaps were entered into) with the aim of consolidating a fixed yield in line with the market situation, while at the same time improving the income profile of a portion of the portfolio for subsequent years.
Derivative financial instruments
At 31 December 2023, there were no derivative transactions.
Derivative financial instruments
The following transactions took place during the year:
\u2022stipulation and settlement of three commodity swaps for the operational hedging of fuel costs relating to the air transport of mail carried out via the subsidiary, Poste Air Cargo Srl;
\u2022stipulation and settlement of forty-two non-deliverable forward contracts to operationally hedge the currency risk (euro/dollar) mainly related to aircraft leasing fees for air mail transport carried out through the subsidiary Poste Air Cargo Srl.
Finally, in October 2023, a cash flow hedge interest rate swap contract entered into in 2013 to hedge the cash flows of a \u20ac50 million bond issued on 25 October 2013 (note B.8 Financial liabilities) reached maturity. The closing of the derivative resulted in the release to the statement of profit or loss, recognised under Finance Income, of the cash flow hedge reserve
of approximately \u20ac6 million, which was established as of 25 October 2015, the date from which the cash flow hedge became operative.", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page628-cflshid_276676-tag141582": { "value": "
A7 - INVENTORIES (\u20ac172 million)
tab. A7 - Inventories
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2022
Changes recognised in profit or loss
Balance at 31.12.2023
Properties held for sale
129
8
136
Work in progress, semi-finished and finished goods and goods for resale
20
8
28
Raw, ancillary and consumable materials
9
(1)
8
Total
157
15
172
Properties held for sale refer entirely to the portion of EGI SpA's real estate portfolio to be sold, whose fair value229F230 at 31 December 2023 amounts to approximately \u20ac280 million.
At the closing date of these financial statements, work in progress, semi-finished and finished goods and merchandise included about \u20ac4 million of final inventories related to environmental certificates held by Poste Air Cargo SpA and Postepay SpA that were previously purchased and not used during the reporting period.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page629-cflshid_277262-tag141583": { "value": "
A8 - TRADE RECEIVABLES (\u20ac2,407 million)
tab. A8 - Trade receivables
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
\u00a0
Balance at 31.12.2022
\u00a0
Description
\u00a0
Non-current assets
\u00a0Current assets
Total
\u00a0
Non-current assets
\u00a0Current assets
Total
Changes
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Due from customers
\u00a0
3
2,150
2,152
\u00a0
3
1,916
1,919
233
Due from Parent Company (MEF)
\u00a0
-
249
249
\u00a0
-
257
257
(7)
Due from subsidiaries, associates and joint ventures
\u00a0
-
6
6
\u00a0
-
5
5
2
Prepayments to suppliers
\u00a0
-
0
0
\u00a0
-
0
0
(0)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0
3
2,404
2,407
\u00a0
3
2,179
2,182
225
Due from customers
tab. A8.1 - Due from customers
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Description(\u20acm)
Non-current assets
Current assets
Total
Non-current assets
Current assets
Total
Changes
Ministries and Public Administration entities
-
563
563
-
581
581
(18)
Cassa Depositi e Prestiti
-
247
247
-
21
21
226
Due from private individuals for parcel delivery services
-
505
505
-
493
493
12
Due from private individuals for mail services
-
379
379
-
395
395
(16)
Overseas counterparties
-
323
323
-
386
386
(64)
Overdrawn current accounts
-
45
45
-
40
40
5
Amounts due for other BancoPosta services
-
58
58
-
62
62
(4)
Other amounts due from customers
3
558
561
3
453
457
104
Provisions for doubtful debts due from customers
(0)
(529)
(529)
(0)
(517)
(517)
(13)
Total
3
2,150
2,152
\u00a0
3
1,916
1,919
233
The increase in Due from customers is mainly attributable to the increase in amounts due from Cassa Depositi e Prestiti for amounts accrued to be invoiced at the relevant date, based on the Supplementary and Amending Deed of 30 January 2024, effective retroactively from 1 January 2023 to 31 December 2023, to the Agreement with Cassa Depositi e Prestiti renewed on 23 December 2021 for the period 2021-2024.
Specifically230F231:
\u2022Amounts due from Ministries and Public Administration entities refer mainly to the following services:
\u2013Compensation for Publisher tariff subsidies, due from the Cabinet Office \u2013 Publishing Department, amounting to \u20ac215 million, of which \u20ac55 million accrued during the year. At 31 December 2023, these receivables are shown gross of the collection of an unavailable amount of \u20ac195 million, relating to the tariff subsidies applied in 2020, 2021, 2022 and until the third quarter of 2023, deposited by the Cabinet Office - Publishing Department, in a non-interest-bearing account held by the Company with the State Treasury and for this reason recorded under Payables for advances received. On 29 January 2024, the European Commission, in the matter of State aid, anticipated the formal decision to authorise the compensatory mechanism in favour of Poste Italiane for the tariff subsidies granted to publishing companies; consequently, with the communication of 31 January 2024, the Cabinet Office, in consideration of the need to guarantee the economic sustainability of the postal service for the delivery of publishing publications at subsidised rates, authorised the release of the credited sums. In December 2023, \u20ac13 million was collected related to tariff subsidies charged in the years 2018-2019.
\u2013Integrated Notification and mailroom services rendered to central and local government authorities, amounting to \u20ac51 million.
\u2013Reimbursement of building, vehicle and security costs, postage and other services incurred on behalf of the Ministry of Enterprise and Made in Italy (MIMIT)231F232 in the amount of \u20ac51 million. This receivable is made up for the remaining \u20ac28 million of the original \u20ac62 million receivable for charges arising from the use of real estate and other services provided until 2012. This position, which was the subject of a legal dispute between the parties, in compliance with the first instance ruling, was partially collected in 2021 for \u20ac34 million. The supplement to the balance consists of \u20ac23 million and, during 2022, following joint audits, the charges arising from the use of real estate by MIMIT, in the period 2013 - 2021, for a total value of approximately \u20ac15 million, were defined.
\u2013Mail forwarding and notification services provided following a tender procedure for a total of \u20ac49 million.
\u2013Market Registered Mail services, totalling \u20ac33 million, provided to central and local government entities.
\u2013Unfranked mail services, totalling \u20ac18 million, provided to central and local Public Administrations.
\u2013The payment of pensions and vouchers on behalf of INPS (the National Institute of Social Security), totalling \u20ac11 million.
\u2022Amounts due from Cassa Depositi e Prestiti refer to fees for BancoPosta RFC's Postal savings deposits service and still not paid.
\u2022Amounts due for parcel delivery services relate mainly to shipments carried out by the Parent Company and services provided by the subsidiary SDA Express Courier SpA.
\u2022Amounts due for mail services refer to receivables mainly owed to the Parent Company from private customers who use the \"delivery and mailing\" range of services.
\u2022Amounts due from overseas counterparties primarily relates to postal services carried out for overseas postal operators.
\u2022Amounts due for overdrawn current accounts derive almost exclusively from overruns due to the debiting of BancoPosta's periodic fees.
\u2022Amounts due for other BancoPosta services mainly refer to intermediation services (banking, personal loans, mortgages) provided.
Due from the Parent Company
This item relates to trade receivables due to the Parent Company from the Ministry of the Economy and Finance.
tab. A8.2 - Due from the Parent Company
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
Changes
Remuneration of current account deposits
218
227
(8)
Universal Service
31
31
-
Delegated services
30
30
(1)
Publisher tariff and electoral subsidies
1
1
-
Others
2
1
0
Provision for doubtful debts due from the Parent Company
(33)
(33)
(0)
Total
249
257
(8)
Specifically:
\u2022The remuneration of current account deposits refers almost entirely to amounts accrued in 2023 and entirely relates to the deposit of funds deriving from accounts opened by Public Administration entities and attributable to BancoPosta RFC. The increase compared to 31 December 2022 is mainly due to the rise in the interest rate curve.
\u2022Receivables for Universal Service compensation includes:
tab. A8.2.1 - Universal Service compensation receivable
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
Changes
Remaining balance for 2012
23
23
-
Remaining balance for 2005
9
9
-
Total
31
31
-
In the year under review, the Group received \u20ac262 million in accrued compensation for the period. The amount of compensation was recognised based on the terms of the new 2020-2024 Service Contract, effective 1 January 2020.
With reference to the amount receivable for 2012, AGCom has recognised a net cost incurred by the Company of \u20ac327 million, compared with compensation of \u20ac350 million originally recognised. Provision has not been made in the state budget for the remaining \u20ac23 million. On 13 November 2014, the Company appealed AGCom's decision before the Regional Administrative Court (TAR).
The outstanding receivable relating to compensation for 2005 was subject to cuts in the budget laws for 2007 and 2008.
Provisions for doubtful debts have been made for the full amount of the above receivables.
\u2022Amounts due for delegated services refer exclusively to the amount accrued in 2023 and relating to the remuneration of services performed by BancoPosta on behalf of the state in accordance with a special agreement with the MEF, expired on 19 May 2023 for the two-year period 2023-2024.
\u2022Receivables arising from electoral subsidies refer to compensation for previous years, for which no provision has been made in the state budget.
Impairment of trade receivables
Movements in the expected provisions for doubtful debts (due from customers and the Parent Company) are as follows:
tab. A8.3 - Movements in provisions for doubtful debts due from customers
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2022
Net provisions
Uses
Balance at 31.12. 2023
\u00a0
Private customers
333
34
(25)
342
Public administration entities
84
(2)
(3)
79
Overseas postal operators
12
(1)
-
11
\u00a0
429
30
(28)
432
Interest on late payments
88
26
(17)
98
Due from the Parent Company
33
0
-
33
Total
550
57
(44)
562
Net provisions of \u20ac34 million mainly refer to receivables subject to bankruptcy proceedings and receivables entrusted to the legal department for recovery. Utilisations for the year mainly refer to the write-off of receivables following the conclusion of bankruptcy proceedings and agreements, and to the write-off of receivables for current accounts with a debtor balance, for which it was ascertained that recovery actions were not cost effective, also taking into account the small amount of the individual credit positions.
The provisions for doubtful debts due from the MEF reflect the absence of funds in the state budget, meaning it is not possible to collect certain amounts receivable, recognised on the basis of legislation or contracts and agreements in effect at the time of recognition, largely relating to the Universal Service.
For the sake of completeness, the following tables present details of the gross carrying amount and the provision to cover expected losses for each class of trade receivables. This detail is provided separately depending on whether the model used to estimate the ECL is based on an analytical or a lump-sum valuation. For more details on the inputs, assumptions and estimation techniques used to calculate the impairment of financial assets, as well as for information on how collateral and other credit risk mitigation instruments are considered in the calculation of the provisions for doubtful trade debts, see Note 2.6 - Use of estimates - Impairment and stage allocation for financial instruments.
Poste Italiane Group - Credit risk - Trade receivables impaired on the analytical basis
\u00a0
\u00a0
(\u20acm)
Description
31.12.2023
31.12.2022
Gross carrying amount
Provision to cover expected losses
\u00a0
Gross carrying amount
Provision to cover expected losses
\u00a0
\u00a0
Trade receivables
\u00a0
\u00a0
Due from customers
1,503
(234)
1,065
(231)
Cassa Depositi e Prestiti
248
(0)
22
(0)
Ministries and Public Administration entities
416
(55)
411
(53)
Overseas counterparties
217
(0)
97
(0)
Private customers
623
(179)
535
(178)
Due from the Parent Company
279
(33)
288
(33)
Due from others
6
-
4
-
\u00a0
\u00a0
Total
1,788
(268)
\u00a0
1,357
(265)
Poste Italiane Group - Credit risk - Trade receivables impaired on the basis of the provision matrix
\u00a0
\u00a0
\u00a0
\u00a0
Range of past due
(\u20acm)
31.12.2023
31.12.2022
Gross carrying amount
Provision to cover expected losses
Gross carrying amount
Provision to cover expected losses
\u00a0
\u00a0
Not past due trade receivables
661
(16)
770
(14)
Past due 0 - 1 year
122
(15)
216
(12)
Past due 1 - 2 years
61
(15)
71
(13)
Past due 2 - 3 years
51
(12)
48
(8)
Past due 3 - 4 years
29
(8)
27
(16)
Past due > 4 years
53
(45)
64
(63)
Positions subject to legal recovery and/or insolvency proceedings
204
(183)
177
(159)
\u00a0
\u00a0
Total
1,181
(295)
\u00a0
1,374
(285)
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page633-cflshid_279951-tag141586": { "value": "
A9 - OTHER RECEIVABLES AND ASSETS (\u20ac5,135 million)
tab. A9 - Other receivables and assets
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
\u00a0
\u00a0
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current assets
Current
assets
Total
Non-current assets
Current assets
Total
Changes
Substitute tax paid
4,033
625
4,658
4,060
585
4,645
13
Due from social security agencies and pension funds (excl. fixed-term contract settlements)
-
73
73
-
138
138
(65)
Receivables relating to fixed-term contract settlements
33
73
107
36
76
112
(5)
Receivables for amounts that cannot be drawn on due to court rulings
-
58
58
-
71
71
(13)
Accrued income and prepaid expenses from trading transactions
-
62
62
-
32
32
30
Tax assets
-
78
78
-
88
88
(9)
Interest accrued on IRES refund
-
46
46
-
46
46
(0)
Interest accrued on IRAP refund
-
0
0
-
0
0
-
Sundry receivables
22
142
164
25
126
151
16
Provisions for doubtful debts due from others
(4)
(108)
(111)
(3)
(173)
(177)
62
Total
4,084
1,051
5,135
4,118
986
5,106
29
Specifically:
\u2022Substitute tax paid refers mainly to:
\u2013\u20ac2,206 million on non-current receivables paid in advance by Poste Vita SpA for the financial years 2015-2021, relating to withholding and substitute tax paid on capital gains on life policies232F233;
\u2013\u20ac1,752 million charged to holders of Interest-bearing Postal Certificates in circulation and Class III and V insurance policies for stamp duty at 31 December 2023233F234; this amount is balanced by a matching entry in \"Other taxes payable\" until expiration or early settlement of the Interest-bearing Postal Certificates or the insurance policies, i.e. the date on which the tax is payable to the tax authorities (tab. B10.3);
\u2013\u20ac407 million relating to advances paid to the Tax authorities in relation to stamp duty to be paid in virtual form in 2024 and to be recovered from customers by Poste Italiane;
\u2013\u20ac96 million relating to stamp duty charged to holders of Postal Savings Books, which Poste Italiane SpA pays in virtual form as required by law;
\u2013\u20ac30 million in advances on withholding tax on interest paid to current account holders for 2023, which is to be recovered from customers.
\u2022Due from social security agencies and pension funds totalling \u20ac73 million decreased compared to 31 December 2022, mainly as a result of the derecognition of receivables related to past items and the recovery of the residual amounts related to the periods of suspension or reduction of work for Covid-19 by means of a reconciliation with the contributions due to the Social Security Institute.
\u2022Receivables relating to fixed-term contract settlements consist of salaries to be recovered following the agreements of 13 January 2006, 10 July 2008, 27 July 2010, 18 May 2012, 21 March 2013, 30 July 2015 and 19 June 2018 between Poste Italiane SpA and the labour unions, regarding the re-employment by court order of personnel previously employed on fixed-term contracts. This item refers to receivables with a present value of \u20ac102 million from personnel, from INPS and pension funds recoverable in the form of variable instalments, the last of which is due in 2042. The item also includes amounts due from INPS (formerly IPOST) of \u20ac42 million, covered by a specific agreement with IPOST dated 23 December 2009. Payment of this amount consists of six instalments of \u20ac6.9 million each, falling due between 30 June 2012 and 31 December 2014; negotiations are in progress with the debtor for their recovery.
\u2022Receivables for amounts that cannot be drawn on due to court rulings refer to amounts attached and not assigned to creditors, which are in the process of being recovered. In January 2023, following the signing of a settlement agreement, the receivable of \u20ac12 million relating to sums embezzled from the Parent Company in December 2007 as a result of an attempted fraud and held at a foreign bank was collected.
\u2022Interest accrued on IRES refund, refers to interest accruing up to 31 December 2023 on the IRES receivable arising from the failure to deduct personnel expenses for IRAP purposes, almost entirely attributable to the Parent Company. For the recovery of said receivable, two disputes were brought before the Provincial Tax Tribunal of Rome, which upheld Poste Italiane's appeals, ordering the Agenzia delle Entrate in Rome to refund the amounts claimed. The Agenzia delle Entrate have appealed both judgements before the Regional Tax Tribunal and, on 23 March 2018, the Tribunal upheld the Agenzia delle Entrate's appeal against one of the judgements (proceedings pursuant to Law Decree no. 201/2011). Poste Italiane has appealed this ruling before the Supreme Court of Cassation. On 5 July 2023, the judgement of the Court of Cassation in the case pursuant to Law Decree no. 201/2011 was published, in which the most relevant grounds of Poste Italiane's appeal were upheld concerning the starting date of the interest accrued on the IRES credit resulting from the non-deduction of labour costs for IRAP purposes. As a result of this ruling, the case will have to be resumed before the Tax Court of Second Instance to settle the amount of interest actually due to the Group. The judgement concerning Law Decree no. 185/2008 is currently pending before the Supreme Court of Cassation. Elements of uncertainty about the final outcome of the case are taken into account in the provision for doubtful debts due from others.
\u2022Accrued income and prepaid expenses from trading transactions increased by \u20ac30 million compared to last year, mainly to the higher purchases by the subsidiary Postel of software licences.
Movements in the provisions for doubtful debts due from others are shown below:
tab. A9.1 - Movements in Provisions for doubtful debts due from others
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2022
Net provisions
Uses
Balance at 31.12.2023
\u00a0
Interest accrued on IRES refund
45
(25)
-
20
Public Administration entities for sundry services
-
-
-
-
Receivables relating to fixed-term contract settlements
24
0
-
24
Other receivables
107
(0)
(40)
67
\u00a0
Total
177
(25)
(40)
111
At 31 December 2023, the provisions for doubtful debts due from others included the release of about \u20ac25 million following the decision of the Court of Cassation relating to the proceedings pursuant to Law Decree no. 201/2011.
In addition, during the year under review, having ascertained the non-recoverability of certain prior items referring to labour costs, credit items were written off by using the provision.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page633-cflshid_279951-tag141585": { "value": "
A9 - OTHER RECEIVABLES AND ASSETS (\u20ac5,135 million)
tab. A9 - Other receivables and assets
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
\u00a0
\u00a0
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current assets
Current
assets
Total
Non-current assets
Current assets
Total
Changes
Substitute tax paid
4,033
625
4,658
4,060
585
4,645
13
Due from social security agencies and pension funds (excl. fixed-term contract settlements)
-
73
73
-
138
138
(65)
Receivables relating to fixed-term contract settlements
33
73
107
36
76
112
(5)
Receivables for amounts that cannot be drawn on due to court rulings
-
58
58
-
71
71
(13)
Accrued income and prepaid expenses from trading transactions
-
62
62
-
32
32
30
Tax assets
-
78
78
-
88
88
(9)
Interest accrued on IRES refund
-
46
46
-
46
46
(0)
Interest accrued on IRAP refund
-
0
0
-
0
0
-
Sundry receivables
22
142
164
25
126
151
16
Provisions for doubtful debts due from others
(4)
(108)
(111)
(3)
(173)
(177)
62
Total
4,084
1,051
5,135
4,118
986
5,106
29
Specifically:
\u2022Substitute tax paid refers mainly to:
\u2013\u20ac2,206 million on non-current receivables paid in advance by Poste Vita SpA for the financial years 2015-2021, relating to withholding and substitute tax paid on capital gains on life policies232F233;
\u2013\u20ac1,752 million charged to holders of Interest-bearing Postal Certificates in circulation and Class III and V insurance policies for stamp duty at 31 December 2023233F234; this amount is balanced by a matching entry in \"Other taxes payable\" until expiration or early settlement of the Interest-bearing Postal Certificates or the insurance policies, i.e. the date on which the tax is payable to the tax authorities (tab. B10.3);
\u2013\u20ac407 million relating to advances paid to the Tax authorities in relation to stamp duty to be paid in virtual form in 2024 and to be recovered from customers by Poste Italiane;
\u2013\u20ac96 million relating to stamp duty charged to holders of Postal Savings Books, which Poste Italiane SpA pays in virtual form as required by law;
\u2013\u20ac30 million in advances on withholding tax on interest paid to current account holders for 2023, which is to be recovered from customers.
\u2022Due from social security agencies and pension funds totalling \u20ac73 million decreased compared to 31 December 2022, mainly as a result of the derecognition of receivables related to past items and the recovery of the residual amounts related to the periods of suspension or reduction of work for Covid-19 by means of a reconciliation with the contributions due to the Social Security Institute.
\u2022Receivables relating to fixed-term contract settlements consist of salaries to be recovered following the agreements of 13 January 2006, 10 July 2008, 27 July 2010, 18 May 2012, 21 March 2013, 30 July 2015 and 19 June 2018 between Poste Italiane SpA and the labour unions, regarding the re-employment by court order of personnel previously employed on fixed-term contracts. This item refers to receivables with a present value of \u20ac102 million from personnel, from INPS and pension funds recoverable in the form of variable instalments, the last of which is due in 2042. The item also includes amounts due from INPS (formerly IPOST) of \u20ac42 million, covered by a specific agreement with IPOST dated 23 December 2009. Payment of this amount consists of six instalments of \u20ac6.9 million each, falling due between 30 June 2012 and 31 December 2014; negotiations are in progress with the debtor for their recovery.
\u2022Receivables for amounts that cannot be drawn on due to court rulings refer to amounts attached and not assigned to creditors, which are in the process of being recovered. In January 2023, following the signing of a settlement agreement, the receivable of \u20ac12 million relating to sums embezzled from the Parent Company in December 2007 as a result of an attempted fraud and held at a foreign bank was collected.
\u2022Interest accrued on IRES refund, refers to interest accruing up to 31 December 2023 on the IRES receivable arising from the failure to deduct personnel expenses for IRAP purposes, almost entirely attributable to the Parent Company. For the recovery of said receivable, two disputes were brought before the Provincial Tax Tribunal of Rome, which upheld Poste Italiane's appeals, ordering the Agenzia delle Entrate in Rome to refund the amounts claimed. The Agenzia delle Entrate have appealed both judgements before the Regional Tax Tribunal and, on 23 March 2018, the Tribunal upheld the Agenzia delle Entrate's appeal against one of the judgements (proceedings pursuant to Law Decree no. 201/2011). Poste Italiane has appealed this ruling before the Supreme Court of Cassation. On 5 July 2023, the judgement of the Court of Cassation in the case pursuant to Law Decree no. 201/2011 was published, in which the most relevant grounds of Poste Italiane's appeal were upheld concerning the starting date of the interest accrued on the IRES credit resulting from the non-deduction of labour costs for IRAP purposes. As a result of this ruling, the case will have to be resumed before the Tax Court of Second Instance to settle the amount of interest actually due to the Group. The judgement concerning Law Decree no. 185/2008 is currently pending before the Supreme Court of Cassation. Elements of uncertainty about the final outcome of the case are taken into account in the provision for doubtful debts due from others.
\u2022Accrued income and prepaid expenses from trading transactions increased by \u20ac30 million compared to last year, mainly to the higher purchases by the subsidiary Postel of software licences.
Movements in the provisions for doubtful debts due from others are shown below:
tab. A9.1 - Movements in Provisions for doubtful debts due from others
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2022
Net provisions
Uses
Balance at 31.12.2023
\u00a0
Interest accrued on IRES refund
45
(25)
-
20
Public Administration entities for sundry services
-
-
-
-
Receivables relating to fixed-term contract settlements
24
0
-
24
Other receivables
107
(0)
(40)
67
\u00a0
Total
177
(25)
(40)
111
At 31 December 2023, the provisions for doubtful debts due from others included the release of about \u20ac25 million following the decision of the Court of Cassation relating to the proceedings pursuant to Law Decree no. 201/2011.
In addition, during the year under review, having ascertained the non-recoverability of certain prior items referring to labour costs, credit items were written off by using the provision.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page633-cflshid_279951-tag141584": { "value": "
A9 - OTHER RECEIVABLES AND ASSETS (\u20ac5,135 million)
tab. A9 - Other receivables and assets
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
\u00a0
\u00a0
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current assets
Current
assets
Total
Non-current assets
Current assets
Total
Changes
Substitute tax paid
4,033
625
4,658
4,060
585
4,645
13
Due from social security agencies and pension funds (excl. fixed-term contract settlements)
-
73
73
-
138
138
(65)
Receivables relating to fixed-term contract settlements
33
73
107
36
76
112
(5)
Receivables for amounts that cannot be drawn on due to court rulings
-
58
58
-
71
71
(13)
Accrued income and prepaid expenses from trading transactions
-
62
62
-
32
32
30
Tax assets
-
78
78
-
88
88
(9)
Interest accrued on IRES refund
-
46
46
-
46
46
(0)
Interest accrued on IRAP refund
-
0
0
-
0
0
-
Sundry receivables
22
142
164
25
126
151
16
Provisions for doubtful debts due from others
(4)
(108)
(111)
(3)
(173)
(177)
62
Total
4,084
1,051
5,135
4,118
986
5,106
29
Specifically:
\u2022Substitute tax paid refers mainly to:
\u2013\u20ac2,206 million on non-current receivables paid in advance by Poste Vita SpA for the financial years 2015-2021, relating to withholding and substitute tax paid on capital gains on life policies232F233;
\u2013\u20ac1,752 million charged to holders of Interest-bearing Postal Certificates in circulation and Class III and V insurance policies for stamp duty at 31 December 2023233F234; this amount is balanced by a matching entry in \"Other taxes payable\" until expiration or early settlement of the Interest-bearing Postal Certificates or the insurance policies, i.e. the date on which the tax is payable to the tax authorities (tab. B10.3);
\u2013\u20ac407 million relating to advances paid to the Tax authorities in relation to stamp duty to be paid in virtual form in 2024 and to be recovered from customers by Poste Italiane;
\u2013\u20ac96 million relating to stamp duty charged to holders of Postal Savings Books, which Poste Italiane SpA pays in virtual form as required by law;
\u2013\u20ac30 million in advances on withholding tax on interest paid to current account holders for 2023, which is to be recovered from customers.
\u2022Due from social security agencies and pension funds totalling \u20ac73 million decreased compared to 31 December 2022, mainly as a result of the derecognition of receivables related to past items and the recovery of the residual amounts related to the periods of suspension or reduction of work for Covid-19 by means of a reconciliation with the contributions due to the Social Security Institute.
\u2022Receivables relating to fixed-term contract settlements consist of salaries to be recovered following the agreements of 13 January 2006, 10 July 2008, 27 July 2010, 18 May 2012, 21 March 2013, 30 July 2015 and 19 June 2018 between Poste Italiane SpA and the labour unions, regarding the re-employment by court order of personnel previously employed on fixed-term contracts. This item refers to receivables with a present value of \u20ac102 million from personnel, from INPS and pension funds recoverable in the form of variable instalments, the last of which is due in 2042. The item also includes amounts due from INPS (formerly IPOST) of \u20ac42 million, covered by a specific agreement with IPOST dated 23 December 2009. Payment of this amount consists of six instalments of \u20ac6.9 million each, falling due between 30 June 2012 and 31 December 2014; negotiations are in progress with the debtor for their recovery.
\u2022Receivables for amounts that cannot be drawn on due to court rulings refer to amounts attached and not assigned to creditors, which are in the process of being recovered. In January 2023, following the signing of a settlement agreement, the receivable of \u20ac12 million relating to sums embezzled from the Parent Company in December 2007 as a result of an attempted fraud and held at a foreign bank was collected.
\u2022Interest accrued on IRES refund, refers to interest accruing up to 31 December 2023 on the IRES receivable arising from the failure to deduct personnel expenses for IRAP purposes, almost entirely attributable to the Parent Company. For the recovery of said receivable, two disputes were brought before the Provincial Tax Tribunal of Rome, which upheld Poste Italiane's appeals, ordering the Agenzia delle Entrate in Rome to refund the amounts claimed. The Agenzia delle Entrate have appealed both judgements before the Regional Tax Tribunal and, on 23 March 2018, the Tribunal upheld the Agenzia delle Entrate's appeal against one of the judgements (proceedings pursuant to Law Decree no. 201/2011). Poste Italiane has appealed this ruling before the Supreme Court of Cassation. On 5 July 2023, the judgement of the Court of Cassation in the case pursuant to Law Decree no. 201/2011 was published, in which the most relevant grounds of Poste Italiane's appeal were upheld concerning the starting date of the interest accrued on the IRES credit resulting from the non-deduction of labour costs for IRAP purposes. As a result of this ruling, the case will have to be resumed before the Tax Court of Second Instance to settle the amount of interest actually due to the Group. The judgement concerning Law Decree no. 185/2008 is currently pending before the Supreme Court of Cassation. Elements of uncertainty about the final outcome of the case are taken into account in the provision for doubtful debts due from others.
\u2022Accrued income and prepaid expenses from trading transactions increased by \u20ac30 million compared to last year, mainly to the higher purchases by the subsidiary Postel of software licences.
Movements in the provisions for doubtful debts due from others are shown below:
tab. A9.1 - Movements in Provisions for doubtful debts due from others
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2022
Net provisions
Uses
Balance at 31.12.2023
\u00a0
Interest accrued on IRES refund
45
(25)
-
20
Public Administration entities for sundry services
-
-
-
-
Receivables relating to fixed-term contract settlements
24
0
-
24
Other receivables
107
(0)
(40)
67
\u00a0
Total
177
(25)
(40)
111
At 31 December 2023, the provisions for doubtful debts due from others included the release of about \u20ac25 million following the decision of the Court of Cassation relating to the proceedings pursuant to Law Decree no. 201/2011.
In addition, during the year under review, having ascertained the non-recoverability of certain prior items referring to labour costs, credit items were written off by using the provision.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page635-cflshid_281512-tag141587": { "value": "
A10 - TAX CREDITS LAW NO. 77/2020 (\u20ac8,318 million)
tab.A10 - Tax credits Law no. 77/2020
\u00a0
Description(\u20acm)
Balance at 31.12.2023
\u00a0
Balance at 31.12.2022
\u00a0
Non-current assets
Current assets
Total
\u00a0
Non-current assets
Current assets
Total
Changes
\u00a0
Tax credits at amortised cost
6,534
1,784
8,318
\u00a0
7,458
1,563
9,021
(703)
Total
6,534
1,784
8,318
\u00a0
7,458
1,563
9,021
(703)
of which Financial Activities
6,246
1,665
7,911
\u00a0
7,127
1,473
8,600
(689)
Of which Postal and Business Activities
288
119
407
\u00a0
331
90
421
(14)
This item refers to tax credits acquired by Poste Italiane SpA against free capital resources or transferred to BancoPosta RFC for resources subject to and not subject to the restriction on their use, in accordance with the provisions of the Relaunch Decree (Law Decree no. 34/2020 converted with amendments by Law no. 77/2020) by which tax breaks were introduced to support Citizens and Businesses to encourage economic recovery following the Covid-19 health emergency.
These receivables are measured at amortised cost as they are acquired to be used primarily for the purpose of offsetting social security or tax payables, based on the provisions of the regulations issued with reference to the characteristics of the individual receivables.
Changes in these tax credits during 2023 are shown below:
\u00a0
Description(\u20acm)
Carrying amount
Balance at 1 January 2023
9,021
Purchases
691
Changes in amortised cost
320
Other changes
(1,714)
\u00a0
Balance at 31 December 2023
8,318
The main changes in the year under review refer to:
\u2022Purchases of \u20ac691 million, of which \u20ac518 million pertaining to BancoPosta RFC234F235;
\u2022accrued income for the year amounting to \u20ac320 million, of which \u20ac309 million pertaining to BancoPosta RFC;
\u2022other changes of \u20ac1,714 million, of which \u20ac1,682 million related to offsets during the year.
At 31 December 2023, the fair value235F236 of tax credits at amortised cost is \u20ac7,823 million.
As part of the actions aimed at combating tax fraud perpetrated by third parties through the monetisation of tax credits, starting from the end of the 2021 financial year, a number of Public Prosecutors' Offices have implemented preventive seizures that, in some cases also involved tax credits acquired by Poste Italiane (some of which were subsequently released from seizure during the course of 2022) for a total nominal value of approximately \u20ac530 million at the date of preparation of these financial statements, against a value paid of roughly \u20ac451 million.
The Company has put in place an operational process aimed at constantly analysing the potential economic, financial and equity risks to which it could be exposed in the event that, following legal proceedings involving third parties, it is ascertained that part of the tax credits acquired over time are the result of fraudulent conduct perpetrated by the aforementioned third parties. In particular, a legal and accounting analysis was conducted to generally assess said risks and determine the accounting impact related to these potential risks, making reference to the provisions of IAS 37 - Provisions, Contingent Assets and Contingent Liabilities (as better illustrated in the section Use of estimates), as the possible non-recovery of the carrying amount of the tax credits would not derive from a characteristic of the asset being measured or from significant increases in the credit risk after the initial recognition of the asset or, more simply, from the ascertained default of the debtor, as envisaged by the impairment model set forth in IFRS 9, but rather from the possibility that, for those ascertained cases of fraud, the liability of the assignee - even if a third party in good faith or an offended party to the crime - will also be called to account for assumptions other than the possible irregular use of the tax credit or for a use in excess of the tax credit received. On the basis of the analyses carried out of all facts and circumstances known at the date of preparation of these financial statements, including, inter alia, requests for information received from the authorities (Public Prosecutor's Office and Agenzia delle Entrate) and orders issued by them, also with the support of external consultants, a provision of \u20ac80 million was recognised in the year 2023, bringing the provision - liability item \"Provisions for risks and charges\" - to \u20ac400 million.
It should be noted, however, that the current situation of significant uncertainty as to the possible outcome of the proceedings and initiatives under way by the Judicial Authorities and the Agenzia delle Entrate and the actions undertaken by the Company to protect its interests, necessarily entailed the use of a significant degree of professional judgement in determining the aforesaid provision; therefore, it cannot be excluded that it may be necessary to recognise further charges in the future.
", "dimensions": { "concept": "ext:DisclosureOfTaxCreditLaw772020", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page636-cflshid_282028-tag141589": { "value": "
A11 \u2013 ASSETS FOR OUTWARD REINSURANCE (\u20ac233 million)
tab. A11- Assets for outward reinsurance
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
GMM
PAA
Total
GMM-VFA
PAA
Total
Asset for remaining coverage
170
8
177
22
0
22
Asset for incurred claims
23
32
56
11
11
22
Total
193
40
233
33
11
44
This item relates to assets for outward reinsurance of the Group's insurance companies; the increase in assets of \u20ac189 million during the year is mainly attributable to the acquisition of the Net Group companies.
The following table presents the reconciliation of the asset for remaining coverage and incurred claims related to outward reinsurance measured by the GMM method:
tab. A11.1 - Assets/(liabilities) for outward reinsurance GMM
Description(\u20acm)
Asset for remaining coverage
Asset for incurred claims
Total
Excluding the loss recovery component
Loss recovery component
\u00a0
Assets for outward reinsurance
22
-
11
33
Liabilities for outward reinsurance
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 1 January
22
-
11
33
Change in scope of consolidation
140
-
18
158
Reinsurance premiums paid
(46)
-
-
(46)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Amounts recoverable from reinsurers
\u00a0
\u00a0
\u00a0
\u00a0
Recovery for incurred claims and Other insurance expenses
(1)
-
43
41
Losses and loss recovery on onerous contracts
-
0
-
0
Changes in the asset for incurred claims
-
-
(2)
(2)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Effects of the change in default risk by reinsurers
0
-
(0)
0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Result of insurance services
(48)
0
40
(7)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Investment and premium refund components
-
-
-
-
Net financial revenue/costs
7
-
0
8
Effects associated with exchange rate changes
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total changes recognised in the Statement of profit or loss and OCI
(40)
0
40
0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash flows
\u00a0
\u00a0
\u00a0
\u00a0
Premiums paid net of amounts not related to claims recovered by reinsurers
46
-
-
46
Amount of claims recovered by reinsurers
2
-
(47)
(45)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Other changes
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 31 December
170
0
23
193
\u00a0
\u00a0
\u00a0
\u00a0
Assets for outward reinsurance
170
0
23
193
Liabilities for outward reinsurance
-
-
-
-
Again with regard to assets for outward reinsurance measured by the GMM method, a reconciliation is provided below, broken down by the elements underlying the measurement:
tab. A11.2 - Assets/(Liabilities) for outward reinsurance GMM - Dynamics of elements underlying the measurement
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Present value of cash flows
Adjustment for non-financial risks
Contractual service margin
Total
\u00a0
Assets for outward reinsurance
32
0
1
33
Liabilities for outward reinsurance
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 1 January
32
0
1
33
Change in scope of consolidation
136
13
8
158
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Changes in current services
\u00a0
\u00a0
Contractual service margin recognised in the statement of profit or loss
-
-
(6)
(6)
Change for overdue non-financial risks
-
(4)
-
(4)
Adjustments based on past experience
2
-
4
6
\u00a0
\u00a0
Changes in future services
\u00a0
\u00a0
Changes in estimates that alter the contractual service margin
2
(2)
(0)
0
Effects of contracts initially recognised in the reporting period
(19)
6
12
-
CSM adjustment related to recoveries on initial recognition of onerous underlying insurance contracts
-
-
0
0
Release of loss recovery component other than changes in cash flows of outward reinsurance contracts
-
-
-
-
Change in cash flows of outward reinsurance from onerous underlying insurance contracts
-
-
0
0
\u00a0
\u00a0
Changes in past services
\u00a0
\u00a0
Adjustments to the asset for incurred claims
(2)
(0)
-
(2)
\u00a0
\u00a0
\u00a0
Effect of changes in default risk by reinsurers
0
-
-
0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Result of insurance services
(17)
(1)
10
(7)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net financial revenue/costs
7
-
1
8
Effects associated with exchange rate changes
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total changes in the Statement of profit or loss and OCI
(8)
(1)
11
2
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash flows
\u00a0
\u00a0
Premiums paid net of amounts not related to claims recovered by reinsurers
46
-
-
46
Amounts recovered from reinsurers
(45)
-
-
(45)
\u00a0
\u00a0
\u00a0
Other changes
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 31 December
160
13
20
193
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Assets for outward reinsurance
160
13
20
193
Liabilities for outward reinsurance
-
-
-
-
The following table presents, instead, the reconciliation of the asset for remaining coverage and incurred claims related to outward reinsurance measured by the PAA method:
Finally, the following table shows the increase in assets for outward reinsurance broken down according to the type of event that generated them:
tab. A11.3 - Assets/(liabilities) for outward reinsurance PAA
Description(\u20acm)
Asset for remaining coverage
Asset for incurred claims
Total
Excluding the loss recovery component
Loss recovery component
Present value of cash flows
Adjustment for non-financial risks
\u00a0
Assets for outward reinsurance
0
-
10
1
11
Liabilities for outward reinsurance
-
-
-
-
-
\u00a0
\u00a0
Net carrying amount at the beginning of the period
0
-
10
1
11
\u00a0
\u00a0
Reinsurance premiums paid
(41)
-
-
-
(41)
\u00a0
\u00a0
Amounts recoverable from reinsurers
\u00a0
Recovery for incurred claims and Other insurance expenses
-
-
10
-
10
Losses and loss recovery on onerous contracts
-
2
-
-
2
Changes in the asset for incurred claims
-
-
21
1
21
\u00a0
\u00a0
Effects of the change in default risk by reinsurers
-
-
0
-
0
\u00a0
\u00a0
Result of insurance services
(41)
2
31
1
(8)
\u00a0
\u00a0
Investment and premium refund components
-
-
-
-
-
Net financial revenue/costs related to outward reinsurance
-
-
0
-
0
Effects associated with exchange rate changes
-
-
-
-
-
\u00a0
\u00a0
Total changes recognised in the Statement of profit or loss and OCI
(41)
2
31
1
(8)
\u00a0
\u00a0
Cash flows
\u00a0
Premiums paid net of amounts not related to claims recovered by reinsurers
47
-
-
-
47
Amount of claims recovered by reinsurers
-
-
(10)
-
(10)
\u00a0
\u00a0
Other changes
-
-
-
-
-
\u00a0
\u00a0
Net carrying amount at 31 December
6
2
31
1
40
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Assets for outward reinsurance
6
2
31
1
40
Liabilities for outward reinsurance
-
-
-
-
-
tab. A11.4 - Outward reinsurance held and initially recognised in the reporting period
Originated contracts
\u00a0
Contracts acquired in business combinations
Total
Description(\u20acm)
Contracts without loss recovery component
Contracts with loss recovery component
\u00a0
Contracts without loss recovery component
\u00a0
Estimation of the present value of future cash outflows
\u00a0
Cash flows related to the acquisition of insurance contracts
\u00a0
Amount of claims and other directly attributable costs
105
0
154
260
\u00a0
Estimation of the present value of future cash inflows
(123)
(1)
(18)
(142)
\u00a0
Estimated adjustment for non-financial risks
6
0
13
20
\u00a0
Contractual service margin
12
1
8
21
\u00a0
Other
(0)
(0)
(0)
(0)
\u00a0
Increase in the asset for new outward reinsurance
(0)
0
\u00a0
158
158
", "dimensions": { "concept": "ifrs-full:DisclosureOfReinsuranceExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page636-cflshid_282028-tag141588": { "value": "
A11 \u2013 ASSETS FOR OUTWARD REINSURANCE (\u20ac233 million)
tab. A11- Assets for outward reinsurance
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
GMM
PAA
Total
GMM-VFA
PAA
Total
Asset for remaining coverage
170
8
177
22
0
22
Asset for incurred claims
23
32
56
11
11
22
Total
193
40
233
33
11
44
This item relates to assets for outward reinsurance of the Group's insurance companies; the increase in assets of \u20ac189 million during the year is mainly attributable to the acquisition of the Net Group companies.
The following table presents the reconciliation of the asset for remaining coverage and incurred claims related to outward reinsurance measured by the GMM method:
tab. A11.1 - Assets/(liabilities) for outward reinsurance GMM
Description(\u20acm)
Asset for remaining coverage
Asset for incurred claims
Total
Excluding the loss recovery component
Loss recovery component
\u00a0
Assets for outward reinsurance
22
-
11
33
Liabilities for outward reinsurance
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 1 January
22
-
11
33
Change in scope of consolidation
140
-
18
158
Reinsurance premiums paid
(46)
-
-
(46)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Amounts recoverable from reinsurers
\u00a0
\u00a0
\u00a0
\u00a0
Recovery for incurred claims and Other insurance expenses
(1)
-
43
41
Losses and loss recovery on onerous contracts
-
0
-
0
Changes in the asset for incurred claims
-
-
(2)
(2)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Effects of the change in default risk by reinsurers
0
-
(0)
0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Result of insurance services
(48)
0
40
(7)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Investment and premium refund components
-
-
-
-
Net financial revenue/costs
7
-
0
8
Effects associated with exchange rate changes
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total changes recognised in the Statement of profit or loss and OCI
(40)
0
40
0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash flows
\u00a0
\u00a0
\u00a0
\u00a0
Premiums paid net of amounts not related to claims recovered by reinsurers
46
-
-
46
Amount of claims recovered by reinsurers
2
-
(47)
(45)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Other changes
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 31 December
170
0
23
193
\u00a0
\u00a0
\u00a0
\u00a0
Assets for outward reinsurance
170
0
23
193
Liabilities for outward reinsurance
-
-
-
-
Again with regard to assets for outward reinsurance measured by the GMM method, a reconciliation is provided below, broken down by the elements underlying the measurement:
tab. A11.2 - Assets/(Liabilities) for outward reinsurance GMM - Dynamics of elements underlying the measurement
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Present value of cash flows
Adjustment for non-financial risks
Contractual service margin
Total
\u00a0
Assets for outward reinsurance
32
0
1
33
Liabilities for outward reinsurance
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 1 January
32
0
1
33
Change in scope of consolidation
136
13
8
158
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Changes in current services
\u00a0
\u00a0
Contractual service margin recognised in the statement of profit or loss
-
-
(6)
(6)
Change for overdue non-financial risks
-
(4)
-
(4)
Adjustments based on past experience
2
-
4
6
\u00a0
\u00a0
Changes in future services
\u00a0
\u00a0
Changes in estimates that alter the contractual service margin
2
(2)
(0)
0
Effects of contracts initially recognised in the reporting period
(19)
6
12
-
CSM adjustment related to recoveries on initial recognition of onerous underlying insurance contracts
-
-
0
0
Release of loss recovery component other than changes in cash flows of outward reinsurance contracts
-
-
-
-
Change in cash flows of outward reinsurance from onerous underlying insurance contracts
-
-
0
0
\u00a0
\u00a0
Changes in past services
\u00a0
\u00a0
Adjustments to the asset for incurred claims
(2)
(0)
-
(2)
\u00a0
\u00a0
\u00a0
Effect of changes in default risk by reinsurers
0
-
-
0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Result of insurance services
(17)
(1)
10
(7)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net financial revenue/costs
7
-
1
8
Effects associated with exchange rate changes
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total changes in the Statement of profit or loss and OCI
(8)
(1)
11
2
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash flows
\u00a0
\u00a0
Premiums paid net of amounts not related to claims recovered by reinsurers
46
-
-
46
Amounts recovered from reinsurers
(45)
-
-
(45)
\u00a0
\u00a0
\u00a0
Other changes
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 31 December
160
13
20
193
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Assets for outward reinsurance
160
13
20
193
Liabilities for outward reinsurance
-
-
-
-
The following table presents, instead, the reconciliation of the asset for remaining coverage and incurred claims related to outward reinsurance measured by the PAA method:
Finally, the following table shows the increase in assets for outward reinsurance broken down according to the type of event that generated them:
tab. A11.3 - Assets/(liabilities) for outward reinsurance PAA
Description(\u20acm)
Asset for remaining coverage
Asset for incurred claims
Total
Excluding the loss recovery component
Loss recovery component
Present value of cash flows
Adjustment for non-financial risks
\u00a0
Assets for outward reinsurance
0
-
10
1
11
Liabilities for outward reinsurance
-
-
-
-
-
\u00a0
\u00a0
Net carrying amount at the beginning of the period
0
-
10
1
11
\u00a0
\u00a0
Reinsurance premiums paid
(41)
-
-
-
(41)
\u00a0
\u00a0
Amounts recoverable from reinsurers
\u00a0
Recovery for incurred claims and Other insurance expenses
-
-
10
-
10
Losses and loss recovery on onerous contracts
-
2
-
-
2
Changes in the asset for incurred claims
-
-
21
1
21
\u00a0
\u00a0
Effects of the change in default risk by reinsurers
-
-
0
-
0
\u00a0
\u00a0
Result of insurance services
(41)
2
31
1
(8)
\u00a0
\u00a0
Investment and premium refund components
-
-
-
-
-
Net financial revenue/costs related to outward reinsurance
-
-
0
-
0
Effects associated with exchange rate changes
-
-
-
-
-
\u00a0
\u00a0
Total changes recognised in the Statement of profit or loss and OCI
(41)
2
31
1
(8)
\u00a0
\u00a0
Cash flows
\u00a0
Premiums paid net of amounts not related to claims recovered by reinsurers
47
-
-
-
47
Amount of claims recovered by reinsurers
-
-
(10)
-
(10)
\u00a0
\u00a0
Other changes
-
-
-
-
-
\u00a0
\u00a0
Net carrying amount at 31 December
6
2
31
1
40
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Assets for outward reinsurance
6
2
31
1
40
Liabilities for outward reinsurance
-
-
-
-
-
tab. A11.4 - Outward reinsurance held and initially recognised in the reporting period
Originated contracts
\u00a0
Contracts acquired in business combinations
Total
Description(\u20acm)
Contracts without loss recovery component
Contracts with loss recovery component
\u00a0
Contracts without loss recovery component
\u00a0
Estimation of the present value of future cash outflows
\u00a0
Cash flows related to the acquisition of insurance contracts
\u00a0
Amount of claims and other directly attributable costs
105
0
154
260
\u00a0
Estimation of the present value of future cash inflows
(123)
(1)
(18)
(142)
\u00a0
Estimated adjustment for non-financial risks
6
0
13
20
\u00a0
Contractual service margin
12
1
8
21
\u00a0
Other
(0)
(0)
(0)
(0)
\u00a0
Increase in the asset for new outward reinsurance
(0)
0
\u00a0
158
158
B5 - LIABILITIES FOR INSURANCE CONTRACTS (EUR 155,338 million)
tab. B5 - Liabilities under insurance contracts
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
GMM-VFA
PAA
Total
GMM-VFA
PAA
Total
Liability for remaining coverage
154,106
(8)
154,098
140,380
(33)
140,348
Liability for incurred claims
980
261
1,240
824
208
1,032
Total
155,086
252
155,338
141,205
175
141,380
of which:
Future cash flows
138,578
240
138,818
125,242
159
125,401
Contractual service margin
13,743
-
13,743
12,902
-
12,902
Adjustment for non-financial risk
2,765
12
2,777
3,061
16
3,077
This item refers to liabilities within the scope of the Group's Insurance activities, and includes:
\u2022the liability for remaining coverage of \u20ac154,098 million, which includes the Contractual Service Margin (CSM) of \u20ac13,743 million, the present value of future cash flows of \u20ac137,774 million, and the adjustment for non-financial risk of \u20ac2,765 million;
\u2022the liability for incurred claims amounting to \u20ac1,240 million.
The following table presents a reconciliation of the liability for remaining coverage and incurred claims of insurance contracts measured by GMM or VFA methods:
tab. B5.1 - Movement in liabilities under insurance contracts GMM-VFA
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Liability for remaining coverage
\u00a0
Liability for incurred claims
Total
Excluding loss component
Loss component
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Liabilities under insurance contracts
140,371
9
824
141,205
Assets under insurance contracts
-
-
-
-
\u00a0
\u00a0
Net carrying amount at 1 January
140,371
9
824
141,205
Change in scope of consolidation
370
2
11
383
\u00a0
Insurance revenue
(2,137)
-
-
(2,137)
\u00a0
Costs for insurance services
\u00a0
Incurred claims and other directly attributable costs
-
-
346
346
Changes in the liability for incurred claims
-
-
146
146
Losses and related recoveries on onerous contracts
-
(3)
-
(3)
Amortisation of contract acquisition costs
214
-
-
214
\u00a0
\u00a0
\u00a0
\u00a0
Result of insurance services
(1,923)
(3)
492
(1,434)
\u00a0
\u00a0
\u00a0
Investment and premium refund components
(14,319)
-
14,319
-
Financial costs/revenue relating to insurance contracts issued
11,900
0
0
11,901
Effects associated with exchange rate changes
-
-
-
-
\u00a0
\u00a0
Total changes recognised in the Statement of profit or loss and OCI
(4,342)
(3)
14,812
10,467
\u00a0
\u00a0
\u00a0
Cash flows
\u00a0
Premiums received
18,004
-
-
18,004
Payments related to contract acquisition costs
(305)
-
-
(305)
Paid claims and other cash outflows
-
-
(14,668)
(14,668)
\u00a0
\u00a0
Other changes
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 31 December
154,098
8
980
155,086
\u00a0
\u00a0
\u00a0
\u00a0
Liabilities under insurance contracts
154,098
8
980
155,086
Assets under insurance contracts
-
-
-
-
The value of insurance liabilities increased during the course of the year, mainly as a result of inflows for the period and as a result of positive market trends that generated capital gains. The Liability for remaining coverage includes the balanceof Assets related to the acquisition of insurance contracts, which amounted to \u20ac3 million at 31 December 2023. This amount will be fully released by 31 December 2029.
Again, with reference to insurance liabilities measured using the GMM or VFA methods, a reconciliation is provided below, broken down by elements underlying measurement:
tab. B5.2 - Liabilities/(assets) under insurance contracts GMM VFA
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
\u00a0
\u00a0
Total
Present value of future cash flows
Adjustment for non-financial risk
Contractual service margin
\u00a0
\u00a0
Liabilities under insurance contracts
125,242
3,061
12,902
141,205
Assets under insurance contracts
-
-
-
-
\u00a0
\u00a0
Net carrying amount at 1 January
125,242
3,061
12,902
141,205
Change in scope of consolidation
263
23
97
383
\u00a0
\u00a0
Changes in current services
\u00a0
Contractual service margin recognised in the statement of profit or loss
-
-
(1,285)
(1,285)
Change for overdue non-financial risks
-
(120)
-
(120)
Adjustments based on past experience
(1,808)
-
1,807
(2)
\u00a0
\u00a0
Changes in future services
\u00a0
Changes in contractual service margin
1,796
(347)
(1,450)
(1)
Losses on groups of onerous contracts and related recoveries
(4)
(0)
-
(5)
Effects of contracts initially recognised in the period
(1,095)
148
949
2
\u00a0
\u00a0
Changes in past services
\u00a0
Adjustments to the liability for incurred claims
143
(0)
-
143
Experience-related changes
(167)
-
-
(167)
Result of insurance services
(1,136)
(319)
21
(1,434)
\u00a0
\u00a0
Financial costs/revenue
11,179
-
723
11,901
\u00a0
\u00a0
Effects associated with exchange rate changes
-
-
-
-
\u00a0
\u00a0
Total changes recognised in the Statement of profit or loss and OCI
10,042
(319)
744
10,467
\u00a0
\u00a0
Cash flows
\u00a0
Premiums received
18,004
-
-
18,004
Payments related to contract acquisition costs
(305)
-
-
(305)
Paid claims and other cash outflows
(14,668)
-
-
(14,668)
\u00a0
\u00a0
Other changes
-
-
-
-
\u00a0
\u00a0
Net carrying amount at 31 December
138,578
2,765
13,743
155,086
\u00a0
\u00a0
Liabilities under insurance contracts
138,578
2,765
13,743
155,086
Assets under insurance contracts
-
-
-
-
The present value of future cash flows increased by \u20ac13,336 million from the value recorded at the end of 2022. The change is mainly attributable to the result of financial operations in the amount of \u20ac11,179 million and actual cash flows in the amount of \u20ac3,031 million, which were slightly offset by experience-related adjustments on future performance.
The component of Adjustment for non-financial risk decreased by \u20ac296 million compared to the balance at 31 December 2022. This was mainly due to the release of this component for the period in the amount of \u20ac120 million and the change in the Group's exposure to non-financial risks, which resulted in a revision of estimates for future services in the amount of \u20ac347 million, partially offset by the effect of new production in the amount of \u20ac148 million.
The Contractual service margin recorded a pre-release growth of \u20ac2,126 million, mainly related to the contribution of new production on future margins of \u20ac949 million, of which \u20ac852 million related to the actual new production recorded in the period and \u20ac97 million from the contribution to CSM resulting from the change in scope following the acquisition of the Net Group companies. The Contractual service margin also increased due to the positive performance of the markets, which generated a growth in the fair value of the underlying assets that was more than proportional to the growth in the related liabilities, generating a profit of \u20ac723 million.
The release of the Contractual service margin for the period amounted to \u20ac1,285 million, of which \u20ac116 million related to the additional release and \u20ac28 million related to the release of Net Group companies.
The Group expects to release the Contractual service margin, at 31 December 2023, in future years as depicted below:
tab. B5.3 Contractual service margin GMM
Description(\u20acm)
Insurance contracts issued
\u00a0
Reinsurance contracts held
1 \u2013 3 years old
3,377
15
4 \u2013 6 years old
2,951
3
Over 6 years
7,415
1
Below is a reconciliation of the liability for remaining coverage and incurred claims of insurance contracts measured according to the PAA method:
tab. B5.4 Liabilities/(assets) under insurance contracts PAA
Description(\u20acm)
Liability for remaining coverage
\u00a0
Liability for incurred claims
Total
Excluding loss component
Loss component
\u00a0
Present value of cash flows
Adjustment for non-financial risks
\u00a0
Liabilities under insurance contracts
(46)
13
192
16
175
Assets under insurance contracts
-
-
-
-
-
\u00a0
\u00a0
Net carrying amount at 1 January
(46)
13
\u00a0
192
16
175
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Insurance revenue
(413)
-
-
-
(413)
\u00a0
\u00a0
Costs for insurance services
\u00a0
Incurred claims and other directly attributable costs
-
-
255
-
255
Changes in the liability for incurred claims
-
-
52
(4)
49
Losses and related recoveries on onerous contracts
-
4
-
-
4
Amortisation of contract acquisition costs
48
-
-
-
48
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Result of insurance services
(388)
4
\u00a0
307
(4)
(80)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Investment and premium refund components
-
-
-
-
-
Financial costs/revenue relating to insurance contracts issued
(0)
-
4
-
4
Effects associated with exchange rate changes
-
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total changes recognised in the Statement of profit or loss and OCI
(388)
4
\u00a0
311
(4)
(76)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash flows
\u00a0
Premiums received
460
-
-
-
460
Payments related to contract acquisition costs
(50)
-
-
-
(50)
Paid claims and other cash outflows
-
-
(255)
-
(255)
\u00a0
\u00a0
Other changes
-
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net carrying amount at 31 December
(26)
17
\u00a0
249
12
252
Liabilities under insurance contracts
(26)
17
249
12
252
Assets under insurance contracts
\u00a0
With regard to liabilities under insurance contracts measured using the PAA method, these increased by approximately \u20ac78 million as a result, primarily, of placements during the financial year, a portion of which will be attributable to the next financial year.
For the sake of full disclosure, the increase in liabilities arising from insurance contracts is detailed below, broken down according to the type of event that generated them.
tab. B5.5 - Insurance contracts issued and initially recognised in the reporting period
Description(\u20acm)
Originated contracts
Contracts acquired in business combinations
\u00a0
Contracts transferred by third parties
Total
Onerous contracts
Non-onerous contracts
Onerous contracts
Non-onerous contracts
\u00a0
Onerous contracts
Non-onerous contracts
\u00a0
\u00a0
\u00a0
\u00a0
Estimation of the present value of future cash outflows
\u00a0
Contract acquisition costs
1
(140)
0
2
-
-
(137)
Amount of claims and other directly attributable costs
(58)
(11,237)
4
233
-
-
(11,058)
\u00a0
Estimation of the present value of future cash inflows
59
12,334
(0)
21
-
-
12,413
\u00a0
Estimated adjustment for non-financial risks
1
(122)
3
21
-
-
(97)
\u00a0
Contractual service margin
-
(836)
-
100
-
-
(736)
\u00a0
Other
-
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
Increase in liability for new insurance contracts issued
3
0
7
376
\u00a0
-
-
386
Finally, the table below represents the dynamics of the Contractual service margin of insurance contracts issued broken down by contracts existing at the time of transition to IFRS 17, and insurance contracts issued and initially recognised in the reporting period:
tab. B5.6 Dynamics of insurance revenue and Contractual service margin of insurance contracts issued broken down by contracts existing at the time of transition to IFRS 17
Description(\u20acm)
New contracts and contracts measured on the transition date with full retroactive application method
Contracts measured on the transition date using the modified retroactive application method
Contracts measured on the transition date using the fair value method
Carve-out contracts
Total
\u00a0
\u00a0
Contractual service margin - Opening balances
11
-
115
12,776
12,902
Change in scope of consolidation
97
-
-
-
97
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Changes related to current services
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Contractual service margin recognised in the statement of profit or loss to reflect services rendered
(33)
-
(18)
(1,233)
(1,285)
Changes related to future services
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Changes in estimates that modify the Contractual service margin
(25)
-
(8)
390
357
Effects of contracts initially recognised in the reporting period
64
-
-
885
949
Financial revenue/costs
5
-
(0)
718
723
Total changes recognised in the statement of profit or loss and in thestatement of comprehensive income
10
-
(27)
761
744
Contractual service margin - Closingbalances
117
-
89
13,537
13,743
", "dimensions": { "concept": "ifrs-full:DisclosureOfInsuranceContractsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page640-cflshid_285653-tag141592": { "value": "A12 - CASH AND DEPOSITS ATTRIBUTABLE TO BANCOPOSTA (\u20ac4,671 million)
tab. A12 - Cash and deposits attributable to BancoPosta
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
Changes
Cash and cash equivalents in hand
3,909
3,960
(52)
Bank deposits
762
1,888
(1,126)
Total
4,671
5,848
(1,177)
The cash and cash equivalents on hand are derived from deposits made in postal current accounts and postal savings products (subscription of Interest-bearing Postal Certificates and payments into post office savings books), or from advances withdrawn from the State Treasury to guarantee the operations of Post Offices. These funds, which are held at Post Offices (\u20ac1,298 million) and at service236F237 companies (\u20ac2,611 million), may not be used for purposes other than to repay obligations contracted in the transactions described above.
A13 - CASH AND CASH EQUIVALENTS (\u20ac4,211 million)
tab. A13 - Cash and cash equivalents
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
Changes
Bank deposits and amounts held at the Italian Treasury
3,270
2,962
308
Deposits with the MEF
873
1,991
(1,117)
Cash and cash equivalents in hand
68
31
37
Total
4,211
4,983
(772)
\u00a0
The balance of cash and cash equivalents at 31 December 2023 includes restricted cash of approximately \u20ac2,576 million, of which \u20ac2,312 million relates to liquidity used to cover insurance technical provisions, \u20ac195 million deposited by the Cabinet Office - Publishing Department in a non-interest-bearing account with the State Treasury as an advance on payments for reductions in publisher fees granted by the Parent Company (note A8 - Trade receivables), \u20ac39 million in liquidity to be transferred to principals as part of the management of collections and payments of the subsidiary LIS Pay, \u20ac14 million restricted as a result of judicial provisions relating to various disputes and \u20ac16 million for management of cash on hand and other restrictions.
The decrease in deposits with the MEF compared to the previous year is mainly due to a change in the allocation of loans, in order to optimise the yields on deposits.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page640-cflshid_285653-tag141591": { "value": "A12 - CASH AND DEPOSITS ATTRIBUTABLE TO BANCOPOSTA (\u20ac4,671 million)
tab. A12 - Cash and deposits attributable to BancoPosta
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
Changes
Cash and cash equivalents in hand
3,909
3,960
(52)
Bank deposits
762
1,888
(1,126)
Total
4,671
5,848
(1,177)
The cash and cash equivalents on hand are derived from deposits made in postal current accounts and postal savings products (subscription of Interest-bearing Postal Certificates and payments into post office savings books), or from advances withdrawn from the State Treasury to guarantee the operations of Post Offices. These funds, which are held at Post Offices (\u20ac1,298 million) and at service236F237 companies (\u20ac2,611 million), may not be used for purposes other than to repay obligations contracted in the transactions described above.
", "dimensions": { "concept": "ext:DisclosureOfCashAndDepositsBancoPosta", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page640-cflshid_285653-tag141590": { "value": "
A13 - CASH AND CASH EQUIVALENTS (\u20ac4,211 million)
tab. A13 - Cash and cash equivalents
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
Changes
Bank deposits and amounts held at the Italian Treasury
3,270
2,962
308
Deposits with the MEF
873
1,991
(1,117)
Cash and cash equivalents in hand
68
31
37
Total
4,211
4,983
(772)
\u00a0
The balance of cash and cash equivalents at 31 December 2023 includes restricted cash of approximately \u20ac2,576 million, of which \u20ac2,312 million relates to liquidity used to cover insurance technical provisions, \u20ac195 million deposited by the Cabinet Office - Publishing Department in a non-interest-bearing account with the State Treasury as an advance on payments for reductions in publisher fees granted by the Parent Company (note A8 - Trade receivables), \u20ac39 million in liquidity to be transferred to principals as part of the management of collections and payments of the subsidiary LIS Pay, \u20ac14 million restricted as a result of judicial provisions relating to various disputes and \u20ac16 million for management of cash on hand and other restrictions.
The decrease in deposits with the MEF compared to the previous year is mainly due to a change in the allocation of loans, in order to optimise the yields on deposits.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page641-cflshid_286190-tag141593": { "value": "
EQUITY
B1 \u2013 EQUITY (\u20ac10,439 million)
The following table shows a reconciliation of the Parent Company's equity and net profit/(loss) for the year with the consolidated amounts:
tab. B1 - Reconciliation of equity
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Equity at 31.12.2023
Changes in equity during 2023
Net profit/(loss) for 2023
Equity at 31.12.2022
Financial statements of Poste Italiane SpA
5,653
456
1,390
3,808
Balance of profit (loss) of consolidated subsidiaries
9,640
-
1,445
8,196
Investments accounted for using the equity method
162
(1)
20
142
Balance of valuation reserves of investee companies
(135)
206
-
(342)
First-time adoption of IFRS 17
(290)
-
(13)
(277)
Effects from corporate actions
(416)
6
(25)
(397)
Derecognition of infra-group dividends
(4,612)
-
(873)
(3,739)
Derecognition of adjustments to value of consolidated companies
573
-
(13)
586
Amortisation/Impairment of goodwill
(156)
-
-
(156)
Purchase Price Allocation Adjustments
(10)
-
(7)
(3)
Impairments of disposal groups held for sale
(40)
-
-
(40)
Recognition of liabilities for call options
(191)
(101)
(3)
(88)
Other consolidation adjustments
145
(1)
2
144
Equity attributable to owners of the Parent
10,322
566
1,922
7,834
Equity attributable to non-controlling interests
106
67
-
38
(excluding profit/(loss))
Net profit/(loss) attributable to non-controlling interests
11
(5)
11
6
Equity attributable to non-controlling interests
117
62
11
44
TOTAL CONSOLIDATED EQUITY
10,439
628
1,933
7,878
At 31 December 2023, earnings per share were \u20ac1.483 (\u20ac1.214 at 31 December 2022), calculated as the ratio of the Group profit for the year of \u20ac1,922 million to the weighted average of the number of outstanding ordinary shares.
B2 - SHARE CAPITAL (\u20ac1,306 million)
Poste Italiane SpA's share capital consists of 1,306,110,000 no-par value ordinary shares, of which Cassa Depositi e Prestiti SpA (CDP) holds 35% and the Ministry of the Economy and Finance holds 29.3%, while the remaining shares are held by institutional and retail investors.
At 31 December 2023, the Company held 10,675,798 treasury shares (representing approximately 0.817% of the share capital) with a total value of approximately \u20ac94 million. All the shares in issue are fully subscribed and paid up. No preference shares have been issued.
B3 \u2013 SHAREHOLDER TRANSACTIONS
As approved by the Shareholders' Meeting of 8 May 2023, on 21 June 2023, the Parent Company distributed dividends of \u20ac570 million (dividend per share equal to \u20ac0.44) as the balance for 2022, taking into account the interim dividend of \u20ac273 million (dividend per share equal to \u20ac0.21) already paid in November 2022. In addition, on 6 November 2023, the Poste Italiane's Board of Directors resolved to advance part of the ordinary dividend for 2023 as an interim dividend. The interim dividend of \u20ac307 million was distributed on 22 November 2023 (dividend per share of \u20ac0.237).
B4 \u2013 RESERVES (\u20ac1,083 million)
tab. B4 - Reserves
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Legal reserve
BancoPosta RFC reserve
Equity instruments - perpetual hybrid bonds
Fair value reserve
Cash flow hedge reserve
Reserve for insurance contracts issued and outward reinsurance
Translation reserve
Reserve for investments accounted for using equity method
Incentive plans reserve
Total
Balance at 1 January 2023
299
1,210
800
(10,592)
(127)
7,876
(0)
5
19
(509)
\u00a0
Increase/(Decrease) in fair value during the year
-
-
-
7,689
80
(5,529)
-
-
-
2,239
Tax effect of changes in fair value
-
-
-
(2,324)
(23)
1,755
-
-
-
(591)
Transfers to profit or loss from realisation
-
-
-
223
(318)
-
-
-
-
(95)
Tax effect of transfers to profit or loss
-
-
-
(63)
90
-
-
-
-
27
Increase/(decrease) for expected losses
-
-
-
5
-
-
-
-
-
5
Share of after-tax comprehensive income/(loss) of investees accounted for using equity method
-
-
-
-
-
-
-
0
-
0
Other changes
-
-
-
-
-
-
(0)
-
-
(0)
\u00a0
Gains/(losses) recognised in equity
-
-
-
5,530
(170)
(3,774)
(0)
0
-
1,586
\u00a0
Incentive plans
-
-
-
-
-
-
-
-
8
8
\u00a0
Other changes
-
-
-
-
-
-
-
(1)
-
(1)
\u00a0
Balance at 31 December 2023
299
1,210
800
(5,062)
(297)
4,102
(0)
4
27
1,083
The reserve for Equity instruments - perpetual hybrid bonds includes the issue of the perpetual hybrid bond for an amount of \u20ac800 million.
The fair value reserve regards changes in the value of financial assets at fair value through other comprehensive income. The increase of \u20ac7,689 million in fair value during 2023 reflects:
\u2022a net increase of \u20ac1,940 million in financial assets attributable to the Group's Financial Services segment;
\u2022a net increase of \u20ac5,749 million in financial assets attributable to the Group's Insurance Services segment;
\u2022a net increase of \u20ac2 million in financial assets attributable to the Group's Postal and Business Services segment;
\u2022a net decrease of \u20ac1 million in financial assets attributable to the Group's Payments and Mobile segment.
The fair value reserve related to insurance contracts measured with the VFA model showed a negative balance of \u20ac4,234 million at 31 December 2023, including expected credit losses on financial instruments related to Separately Managed Accounts (negative \u20ac8,084 million at 31 December 2022). The following is a reconciliation of the balance of the reserve related to insurance contracts:
Description(\u20acm)
2023VFA fair value reserve
Balance at 1 January
(8,084)
Changes in fair value
5,578
Net change in amounts reclassified in the statement of profit or loss
-
Effect related to market operations
(12)
Taxation
(1,715)
Balance at 31 December
(4,234)
\u00a0
the cash flow hedge reserve, attributable to the Parent Company, reflects changes in the fair value of the effective portion of cash flow hedges. In 2023, positive changes in fair value totalling \u20ac80 million related entirely to the net positive change in the value of derivative financial instruments of Financial activities;
The reserve for insurance contracts issued and outward reinsurance includes the change in the fair value of instruments within the Group's Insurance activities, attributable to policyholders and allocated to insurance liabilities as a result of the adoption of the OCI option on the IFRS 17 liability portfolio, with the intention of aligning the financial and mirroring effects between the OCI reserve and the effects on the statement of profit or loss.
the Incentive plans reserve includes the estimate of the valuations for the year relating to the long-term \"Performance Share LTIP\" and \"Deliver\" incentive plans and the MBO short-term incentive plans, carried out on the basis of the provisions of IFRS 2.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page641-cflshid_286200-tag141594": { "value": "
At 31 December 2023, earnings per share were \u20ac1.483 (\u20ac1.214 at 31 December 2022), calculated as the ratio of the Group profit for the year of \u20ac1,922 million to the weighted average of the number of outstanding ordinary shares.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page641-cflshid_286630-tag141595": { "value": "Poste Italiane SpA's share capital consists of 1,306,110,000 no-par value ordinary shares, of which Cassa Depositi e Prestiti SpA (CDP) holds 35% and the Ministry of the Economy and Finance holds 29.3%, while the remaining shares are held by institutional and retail investors.", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page641-cflshid_286200-tag141596": { "value": "
B3 \u2013 SHAREHOLDER TRANSACTIONS
As approved by the Shareholders' Meeting of 8 May 2023, on 21 June 2023, the Parent Company distributed dividends of \u20ac570 million (dividend per share equal to \u20ac0.44) as the balance for 2022, taking into account the interim dividend of \u20ac273 million (dividend per share equal to \u20ac0.21) already paid in November 2022. In addition, on 6 November 2023, the Poste Italiane's Board of Directors resolved to advance part of the ordinary dividend for 2023 as an interim dividend. The interim dividend of \u20ac307 million was distributed on 22 November 2023 (dividend per share of \u20ac0.237).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page641-cflshid_286739-tag141597": { "value": "44", "decimals": 0, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "v1-page642-cflshid_286810-tag141598": { "value": "B4 \u2013 RESERVES (\u20ac1,083 million)
tab. B4 - Reserves
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Legal reserve
BancoPosta RFC reserve
Equity instruments - perpetual hybrid bonds
Fair value reserve
Cash flow hedge reserve
Reserve for insurance contracts issued and outward reinsurance
Translation reserve
Reserve for investments accounted for using equity method
Incentive plans reserve
Total
Balance at 1 January 2023
299
1,210
800
(10,592)
(127)
7,876
(0)
5
19
(509)
\u00a0
Increase/(Decrease) in fair value during the year
-
-
-
7,689
80
(5,529)
-
-
-
2,239
Tax effect of changes in fair value
-
-
-
(2,324)
(23)
1,755
-
-
-
(591)
Transfers to profit or loss from realisation
-
-
-
223
(318)
-
-
-
-
(95)
Tax effect of transfers to profit or loss
-
-
-
(63)
90
-
-
-
-
27
Increase/(decrease) for expected losses
-
-
-
5
-
-
-
-
-
5
Share of after-tax comprehensive income/(loss) of investees accounted for using equity method
-
-
-
-
-
-
-
0
-
0
Other changes
-
-
-
-
-
-
(0)
-
-
(0)
\u00a0
Gains/(losses) recognised in equity
-
-
-
5,530
(170)
(3,774)
(0)
0
-
1,586
\u00a0
Incentive plans
-
-
-
-
-
-
-
-
8
8
\u00a0
Other changes
-
-
-
-
-
-
-
(1)
-
(1)
\u00a0
Balance at 31 December 2023
299
1,210
800
(5,062)
(297)
4,102
(0)
4
27
1,083
The reserve for Equity instruments - perpetual hybrid bonds includes the issue of the perpetual hybrid bond for an amount of \u20ac800 million.
The fair value reserve regards changes in the value of financial assets at fair value through other comprehensive income. The increase of \u20ac7,689 million in fair value during 2023 reflects:
\u2022a net increase of \u20ac1,940 million in financial assets attributable to the Group's Financial Services segment;
\u2022a net increase of \u20ac5,749 million in financial assets attributable to the Group's Insurance Services segment;
\u2022a net increase of \u20ac2 million in financial assets attributable to the Group's Postal and Business Services segment;
\u2022a net decrease of \u20ac1 million in financial assets attributable to the Group's Payments and Mobile segment.
The fair value reserve related to insurance contracts measured with the VFA model showed a negative balance of \u20ac4,234 million at 31 December 2023, including expected credit losses on financial instruments related to Separately Managed Accounts (negative \u20ac8,084 million at 31 December 2022). The following is a reconciliation of the balance of the reserve related to insurance contracts:
Description(\u20acm)
2023VFA fair value reserve
Balance at 1 January
(8,084)
Changes in fair value
5,578
Net change in amounts reclassified in the statement of profit or loss
-
Effect related to market operations
(12)
Taxation
(1,715)
Balance at 31 December
(4,234)
\u00a0
the cash flow hedge reserve, attributable to the Parent Company, reflects changes in the fair value of the effective portion of cash flow hedges. In 2023, positive changes in fair value totalling \u20ac80 million related entirely to the net positive change in the value of derivative financial instruments of Financial activities;
The reserve for insurance contracts issued and outward reinsurance includes the change in the fair value of instruments within the Group's Insurance activities, attributable to policyholders and allocated to insurance liabilities as a result of the adoption of the OCI option on the IFRS 17 liability portfolio, with the intention of aligning the financial and mirroring effects between the OCI reserve and the effects on the statement of profit or loss.
the Incentive plans reserve includes the estimate of the valuations for the year relating to the long-term \"Performance Share LTIP\" and \"Deliver\" incentive plans and the MBO short-term incentive plans, carried out on the basis of the provisions of IFRS 2.
", "dimensions": { "concept": "ext:DisclosureOfReservesAndOtherEquityInterest", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page648-cflshid_292031-tag141599": { "value": "B6 - PROVISIONS FOR RISKS AND CHARGES (\u20ac1,336 million)
Movements in provisions for risks and charges are as follows:
tab. B6 - Movements in provisions for risks and charges for FY 2023
\u00a0
Description(\u20acm)
Balance at 01.01.2023
Provisions
Finance costs
Transfers to profit or loss
Uses
Change in scope of consolidation
Balance at 31.12.2023
\u00a0
Provisions for operational risks
120
6
-
(7)
(17)
-
102
Provisions for disputes with third parties
298
30
4
(42)
(43)
0
248
Provisions for disputes with staff (1)
35
13
-
(0)
(9)
-
38
Provisions for personnel expenses
109
128
-
(32)
(64)
-
141
Provisions for early retirement incentives
354
159
-
-
(229)
-
285
Provisions for operational risks - tax credits Law no. 77/2020
320
80
-
-
-
-
400
Provisions for taxation/social security contributions
20
3
0
(0)
(0)
-
23
Other provisions for risks and charges
98
15
-
(4)
(10)
(0)
99
\u00a0
Total
1,355
434
4
(86)
(371)
0
1,336
\u00a0
Overall analysis of provisions:
\u00a0
\u00a0
- non-current portion
804
782
- current portion
551
554
1,355
1,336
(1) Net provisions for Personnel expenses amount to \u20ac9 million. Service costs (legal assistance) total \u20ac3 million.
Specifically:
\u2022Provisions for operational risks, which mainly relate to liabilities arising from BancoPosta's operations, mainly reflect risks related to the distribution of postal savings products issued in past years, estimated risks for charges and expenses to be incurred as a result of foreclosures suffered by BancoPosta mainly in its capacity as a third party, impairments and adjustments to income from previous years and fraud. Movements during the year primarily regard updated estimates of liabilities and uses to cover liabilities settled.
\u2022Provisions for disputes with third parties regard the present value of expected liabilities deriving from different types of legal and out-of-court disputes with suppliers and third parties, the related legal expenses, and penalties and indemnities payable to customers. Movements during the year primarily regard updated estimates of liabilities and uses to cover liabilities settled.
\u2022Provisions for disputes with staff regard liabilities that may arise following labour litigation and disputes of various types. The changes in the year refer to the update of the estimate of the liabilities and the related legal expenses, taking account of both the overall value of negative outcomes in terms of litigation.
\u2022Provisions for personnel expenses are made to cover expected liabilities arising in relation to the cost of labour, which are certain or likely to occur but whose estimated amount is subject to change. They have increased by \u20ac128 million during the year to reflect the estimatevalue of new liabilities and decreased as a result of past contingent liabilities that failed to materialise (\u20ac32 million) and settled disputes (\u20ac64 million).
\u2022Provisions for early retirement incentives reflect the estimated costs to be incurred as a result of the Company's binding commitment to pay early retirement incentives on a voluntary basis, under the current redundancy scheme agreed with the labour unions for a determinate number of employees who will leave the Company by 31 December 2025. The provisions made at 31 December 2022 were utilised for \u20ac229 million.
\u2022The provisions for risks - tax credits Law no. 77/2020 were established to cover probable liabilities analytically described in Note A10 - Tax Credits Law no. 77/2020.
\u2022Provisions for taxation/social security contributions have been made to cover potential future tax and social security liabilities.
\u2022Other provisions for risks and charges cover probable liabilities of various type, including: estimated liabilities deriving from the risk that specific legal actions undertaken in order to reverse seizures of the Parent Company's assets may be unable to recover the related amounts, claims for rent arrears on properties used free of charge by the Parent Company, claims for payment of accrued interest expense due to certain suppliers and frauds.", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page649-cflshid_292972-tag141600": { "value": "
B7 \u2013 EMPLOYEE TERMINATION BENEFITS (\u20ac637 million)
The following movements in employee termination benefits took place in 2023:
tab. B7 - Movements in provisions for employee termination benefits
\u00a0
\u00a0
(\u20acm)
FY 2023
\u00a0
Balance at 1 January
705
\u00a0
Current service cost
3
Interest component
26
Effect of actuarial (gains)/losses
8
Uses for the period
(106)
\u00a0
Balance at 31 December 2023
637
The current service cost is recognised in personnel expenses, whilst the interest component is recognised in finance costs.
B7.1 - Actuarial gains and losses
\u00a0
\u00a0
31.12.2023
Employee termination benefits
Change in demographic assumptions
0
Change in financial assumptions
15
Other experience-related adjustments
(6)
Total
8
The sensitivity of employee termination benefits to changes in the principal actuarial assumptions is analysed below.
tab. B7.2 - Sensitivity analysis
\u00a0
\u00a0
31.12.2023
Employee termination benefits
\u00a0
Inflation rate +0.25%
644
Inflation rate -0.25%
630
Discount rate +0.25%
626
Discount rate -0.25%
648
Turnover rate +0.25%
639
Turnover rate -0.25%
635
The following table provides further information in relation to employee termination benefits.
tab. B7.3 - Other information
\u00a0
\u00a0
31.12.2023
\u00a0
Expected service cost
2.5
Average duration of defined benefit plan
8.0
Average employee turnover per annum
2.0%
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page650-cflshid_293301-tag141601": { "value": "
B8 - FINANCIAL LIABILITIES (\u20ac95,393 million)
tab. B8 - Financial liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Financial liabilities at amortised cost
8,984
85,098
94,082
10,047
92,534
102,582
(8,500)
\u00a0
\u00a0
\u00a0
Financial liabilities at FVTPL
168
3
171
69
19
88
83
\u00a0
\u00a0
\u00a0
Derivative financial instruments
1,091
47
1,138
823
152
975
163
Financial liabilities vs Subsidiaries
-
2
2
-
1
1
1
Total
10,243
85,150
95,393
10,939
92,706
103,644
(8,251)
of which Financial Activities
7,571
74,009
81,581
7,932
82,825
90,757
(9,177)
of which Insurance Activities
108
52
160
0
39
40
120
Of which Postal and Business Activities
2,556
814
3,370
2,999
380
3,379
(9)
Of which Payment Services and Card Payments Activities
8
10,275
10,283
8
9,460
9,468
815
Financial liabilities by operating segment break down as follows:
FINANCIAL ACTIVITIES
tab. B8.1 - Financial liabilities - Financial Services
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Financial liabilities at amortised cost
6,480
73,962
80,443
7,109
82,673
89,782
(9,340)
Postal current accounts
-
61,908
61,908
-
68,336
68,336
(6,428)
Loans
6,480
1,736
8,217
7,109
3,016
10,125
(1,909)
MEF account held at the Treasury
-
5,371
5,371
-
4,169
4,169
1,202
Other financial liabilities
0
4,946
4,946
0
7,153
7,153
(2,207)
\u00a0
\u00a0
\u00a0
-
\u00a0
\u00a0
\u00a0
Derivative financial instruments
1,091
47
1,138
823
152
975
164
Total
7,571
74,009
81,581
7,932
82,825
90,757
(9,177)
Financial liabilities at amortised cost
They represent BancoPosta's direct deposits, and include interest accrued at 31 December 2023, which was settled with customers in January 2024. The decrease in this item with respect to 31 December 2022 is mainly due to the reduction in Public Administration stocks.
Loans
At 31 December 2023, outstanding liabilities of \u20ac8,217 million relate to repurchase agreements entered into by the Parent Company with leading financial institutions and Central Counterparties, amounting to a total nominal value of \u20ac11,456 million. A total of \u20ac7,102 million of this amount regards Long Term Repos and \u20ac3,451 million regards ordinary loan operations, the resources from both invested in Italian fixed income government securities and as funding for deposits used as collateral. Repurchase agreements with a nominal value of \u20ac3,996 million were the subject of fair value hedge transactions executed to hedge interest rate risk.
Finally, financial assets and liabilities relating to repurchase agreements managed through the Central Counterparty that meet the requirements of IAS 32 are offset. The effect of netting at 31 December 2023, already included in the exposure to net balances, amounted to \u20ac2,337 million (\u20ac3,217 million at 31 December 2022).
The fair value237F238 of the repurchase agreements in question at 31 December 2023 is \u20ac7,996 million.
MEF account held at the Treasury
tab. B8.1.1 - MEF account held at the Treasury
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
\u00a0
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Balance of cash flows for advances
-
5,168
5,168
-
4,083
4,083
1,085
Balance of cash flows from management of postal savings
-
30
30
-
(84)
(84)
114
Amounts payable due to theft
-
157
157
-
155
155
2
Amounts payable for operational risks
-
16
16
-
14
14
2
\u00a0
\u00a0
\u00a0
Total
-
5,371
5,371
\u00a0
-
4,169
4,169
1,202
The balance of cash flows for advances, represents the net amount payable as a result of advances from the MEF to meet the cash requirements of BancoPosta. These break down as follows:
tab. B8.1.2 - Balance of cash flows for advances
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
\u00a0
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Net advances
-
5,167
5,167
-
4,083
4,083
1,084
MEF postal current accounts and other payables
-
670
670
-
670
670
(0)
Ministry of Justice - Orders for payment
-
1
1
-
0
0
0
MEF - State pensions
-
(670)
(670)
-
(670)
(670)
0
\u00a0
\u00a0
\u00a0
Total
-
5,168
5,168
\u00a0
-
4,083
4,083
1,085
\u00a0
The balance of cash flows from the management of postal savings, amounting to a negative \u20ac30 million, represents the balance of withdrawals less deposits during the last two days of the year and cleared early in the following year. The balance at 31 December 2023 consists of \u20ac124 million payable to Cassa Depositi e Prestiti, and \u20ac94 million of amounts due from the MEF for Interest-bearing Postal Certificates issued on its behalf.
Amounts payable due to thefts from Post Offices of \u20ac157 million regard the Company's liability to the MEF on behalf of the Italian Treasury for losses resulting from theft and fraud. This liability derives from cash withdrawals from the Treasury to make up for the losses resulting from these criminal acts, in order to ensure that post offices can continue to operate.
Amounts payable for operational risks for \u20ac16 million regard the portion of advances obtained to fund the operations of BancoPosta, in relation to which asset under recovery is certain or probable.
Other financial liabilities
Other financial liabilities have a fair value that approximates to their carrying amount.
tab. B8.1.3 - Other financial liabilities - Financial Services
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Domestic and international money transfers
-
1,071
1,071
-
1,108
1,108
(37)
Guarantee deposits
-
2,831
2,831
-
4,824
4,824
(1,993)
Cheques to be credited to savings books
-
230
230
-
183
183
47
Endorsed cheques
-
408
408
-
476
476
(68)
Amounts to be credited to customers
-
83
83
-
87
87
(4)
Other amounts payable to third parties
-
139
139
-
173
173
(33)
Other items in process
-
183
183
-
302
302
(119)
Total
0
4,946
4,946
0
7,153
7,153
(2,207)
Payables for guarantee deposits refer for \u20ac2,811 million to sums received from counterparties for interest rate swap transactions (collateral provided by specific Credit Support Annexes) and for \u20ac20 million to sums received from counterparties for repo transactions (collateral provided by specific Global Master Repurchase Agreements). The decrease in this item compared to 31 December 2022 is mainly attributable to the reduction of fair value hedge derivatives following early extinguishment transactions.
Derivative financial instruments
Movements of the item in question during 2023 are described in note A6 \u2013 Financial assets.
INSURANCE ACTIVITIES
tab. B8.2 - Financial liabilities - Insurance Services
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Financial liabilities at amortised cost
10
49
59
0
39
40
19
Loans
10
0
10
-
-
-
10
Lease payables
0
1
1
0
1
1
0
Other financial liabilities
-
48
48
-
39
39
9
\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
Financial liabilities at FVTPL
98
3
101
-
-
-
101
Total
108
52
160
0
39
40
120Within the insurance activities, there are two 10-year subordinated bonds issued by Net Insurance in 2020 and 2021 respectively: the first, convertible, with a nominal value of \u20ac200 thousand (fair value at 31 December 2023 of \u20ac174 thousand) and the second with a nominal value of \u20ac12.5 million (fair value at 31 December 2023 of \u20ac10.9 million).
POSTAL AND BUSINESS ACTIVITIES
tab. B8.3 - Financial liabilities - Postal and Business Services
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Financial liabilities at amortised cost
2,486
814
3,300
2,931
361
3,291
9
\u00a0
\u00a0
\u00a0
Loans
1,446
502
1,948
1,823
53
1,876
73
Bonds
498
500
998
997
50
1,048
(50)
Due to financial institutions
948
2
950
825
2
827
123
Other borrowings
-
-
-
1
-
1
(1)
Lease payables
1,037
293
1,330
1,102
295
1,397
(67)
\u00a0
\u00a0
\u00a0
-
Other financial liabilities
3
19
22
6
13
18
3
\u00a0
\u00a0
\u00a0
-
Financial liabilities at FVTPL
70
-
70
69
19
88
(18)
\u00a0
\u00a0
\u00a0
Total
2,556
814
3,370
2,999
380
3,379
(9)
Financial liabilities at amortised cost
Loans
Loans are unsecured and are not subject to financial covenants, which would require Group companies to comply with economic and financial ratios or maintain a certain minimum rating. For the EIB financing and the CEB financing, a minimum rating level of BBB- (or equivalent) by Moody's and S&P for the EIB and by at least two of the three rating agencies of Poste Italiane for CEB is required. In the event of a rating loss, this is without prejudice to the right of both banks to request additional collateral or, in the case of the EIB, an increase in the margin. If no agreement is reached, immediate early repayment of the loans may be demanded. Standard negative pledge provisions do apply, however238F239.
Bonds
The item Bonds refers to a senior unsecured loan with a total nominal value of \u20ac1 billion issued by Poste Italiane on 10 December 2020 in two tranches, placed in public form to institutional investors as part of the \u20ac2.5 billion Euro Medium Term Notes (EMTN) programme deposited with the Luxembourg Stock Exchange. The first tranche of \u20ac500 million matures on 10 December 2024, has an above-par issue price of 100.10 with fixed annual coupon of 0.00% and an effective yield to maturity of -0.025%; the second tranche of \u20ac500 million matures on 10 December 2028, with an issue price below par of 99.758, a fixed annual coupon of 0.50% and an effective yield to maturity of 0.531%. At 31 December 2023, the fair value239F240 of the loan was \u20ac916 million.
A loan with a nominal value of \u20ac50 million, privately placed and issued at par on 25 October 2013 reached maturity in October 2023.
Due to financial institutions
tab. B8.3.1 - Due to financial institutions
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
\u00a0Changes
\u00a0
\u00a0
\u00a0
EIB fixed rate loan maturing 12/03/26
173
-
173
173
-
173
-
EIB fixed rate loan maturing 16/10/26
400
-
400
400
-
400
-
EIB fixed rate loan maturing 19/05/2028
150
-
150
150
-
150
-
EIB fixed rate loan maturing 02/05/2028
100
-
100
100
-
100
-
CEB variable rate loan maturing 28/12/30
125
-
125
-
-
-
125
Other loans
-
1
1
2
1
3
(2)
Accrued interest expense
-
1
1
-
1
1
0
\u00a0
\u00a0
\u00a0
-
Total
948
2
950
825
2
827
123
TV: Variable-rate loan. TF: Fixed-rate loan
At 31 December 2023, no committed and uncommitted credit lines were used for short-term financing.
On 18 December 2023, a medium-/long-term credit line for a total of \u20ac250 million was signed with the CEB \"Council of Europe Development Bank\", to support projects and investments with the aims of social integration, support for public infrastructure and sustainability. On 28 December 2023, the first tranche of \u20ac125 million was disbursed, bearing interest at a variable rate (6-month Euribor rate plus spread), with repayment in constant principal instalments after a three-year grace period and maturity on 28 December 2030.
At 31 December 2023, the fair value240F241 of the four EIB loans totalled \u20ac778 million and that of the CEB loan was \u20ac128 million.
Lease payables
Lease liabilities at 31 December 2023 amounted to \u20ac1,330 million. For more details on the change in this item, see Note A4 - Right-of-use assets.
PAYMENT SERVICES AND CARD PAYMENTS ACTIVITIES
table B8.4 - Financial liabilities - Payment Services and Card Payments
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
\u00a0Total
\u00a0Changes
\u00a0
\u00a0
\u00a0
Lease payables
8
1
9
8
1
9
(0)
Other financial liabilities
-
10,274
10,274
-
9,459
9,459
815
Management of prepaid cards and other EMI items
-
10,039
10,039
-
9,270
9,270
768
Amounts to be credited to customers
-
60
60
-
45
45
16
RAV, F23, F24 and road tax
-
93
93
-
105
105
(12)
Others
-
81
81
-
39
39
42
Total
8
10,275
10,283
8
9,460
9,468
815
Liabilities for management of prepaid card refer to the subsidiary PostePay SpA.
NET DEBT/(FUNDS)
The following table provides an analysis of the net debt/(funds) at 31 December 2023, by operating segment:
Net debt/(funds) at 31 December 2023
\u00a0
\u00a0
Balance at 31.12.2023(\u20acm)
Mail, Parcels and Distribution
\u00a0Financial Services
\u00a0Insurance Services
\u00a0Payments and Mobile
Eliminations
\u00a0Consolidated
of which related parties
Financial liabilities
5,017
93,076
429
10,478
(13,606)
95,393
\u00a0
Financial liabilities at amortised cost
3,300
81,446
59
10,283
(1,004)
94,084
5,532
Postal current accounts
0
62,913
-
-
(1,004)
61,908.424
0
Bonds
998
-
10
-
-
1,008
-
Due to financial institutions
950
8,217
-
-
-
9,167
-
Other borrowings
-
-
-
-
-
-
-
Lease payables
1,330
0
1
9
-
1,341
9
Finance lease liabilities
-
-
-
-
-
-
-
MEF account held at the Treasury
-
5,371
-
-
-
5,371
5,371
Other financial liabilities
22
4,946
48
10,274
-
15,290
152
Financial liabilities at FVTPL
70
-
101
-
-
171
-
Derivative financial instruments
0
1,138
-
-
-
1,138
201
Intersegment financial liabilities
1,646
10,492
269
195
(12,602)
-
-
Liabilities under insurance contracts
-
-
155,339
-
(1)
155,338
-
Financial assets
(1,205)
(80,636)
(156,394)
(11,507)
12,582
(237,159)
Financial instruments at amortised cost
(9)
(42,673)
(2,123)
(299)
(0)
(45,103)
(11,877)
Financial instruments at FVTOCI
(636)
(33,100)
(105,852)
(7)
-
(139,594)
-
Financial instruments at FVTPL
(9)
(26)
(48,170)
(1)
-
(48,205)
(22)
Derivative financial instruments
(0)
(4,257)
-
-
-
(4,257)
(167)
Intersegment financial assets
(552)
(581)
(249)
(11,201)
12,582
-
-
Tax credits Law no. 77/2020
(407)
(7,912)
-
-
-
(8,318)
Assets for outward reinsurance
-
-
(233)
-
-
(233)
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net debt/(net financial surplus)
3,405
4,528
(859)
(1,028)
(1,025)
5,021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash and deposits attributable to BancoPosta
-
(4,671)
-
-
-
(4,671)
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash and cash equivalents
(650)
(940)
(3,561)
(65)
1,004
(4,211)
(874)
Net debt/(funds)
2,755
(1,082)
(4,420)
(1,093)
(21)
(3,861)
\u00a0
Net debt/(funds) at 31 December 2022
\u00a0
\u00a0
Balance at 31.12.2022 (\u20acm)
Mail, Parcels and Distribution
Financial Services
Insurance Services
Payments and Mobile
Eliminations
\u00a0Consolidated
of which related parties
Financial liabilities
4,918
100,941
303
9,557
(12,074)
103,644
\u00a0
Financial liabilities at amortised cost
3,291
90,298
40
9,468
(515)
102,582
4,385
Postal current accounts
-
68,852
-
-
(515)
68,336
1
Bonds
1,048
-
-
-
-
1,048
-
Due to financial institutions
827
10,125
-
-
-
10,952
-
Other borrowings
1
-
-
-
-
1
-
Lease payables
1,397
0
1
9
-
1,407
8
Finance lease liabilities
0
-
-
-
-
0
-
MEF account held at the Treasury
-
4,169
-
-
-
4,169
4,169
Other financial liabilities
18
7,153
39
9,459
-
16,669
207
Financial liabilities at FVTPL
88
-
-
-
-
88
-
Derivative financial instruments
0
975
-
-
-
975
193
Intersegment financial liabilities
1,539
9,668
263
89
(11,559)
-
-
\u00a0
Liabilities under insurance contracts
-
-
141,381
-
(1)
141,380
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
(1,083)
(83,701)
(142,351)
(10,545)
11,539
(226,141)
\u00a0
Financial instruments at amortised cost
(3)
(43,901)
(2,193)
(198)
(0)
(46,295)
(14,838)
Financial instruments at FVTOCI
(536)
(33,190)
(96,501)
(8)
-
(130,235)
(502)
Financial instruments at FVTPL
(1)
(40)
(43,461)
-
-
(43,501)
(21)
Derivative financial instruments
(0)
(6,109)
-
-
-
(6,110)
(203)
Intersegment financial assets
(543)
(460)
(196)
(10,339)
11,539
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Tax credits Law no. 77/2020
(420)
(8,601)
-
-
-
(9,021)
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Assets for outward reinsurance
-
-
(44)
-
-
(44)
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Net debt/(net financial surplus)
3,415
8,640
(710)
(988)
(537)
9,819
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash and deposits attributable to BancoPosta
-
(5,848)
-
-
-
(5,848)
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash and cash equivalents
(575)
(2,018)
(2,732)
(172)
515
(4,983)
(1,991)
Net debt/(funds)
2,839
773
(3,442)
(1,161)
(22)
(1,012)
\u00a0
Total net debt/(funds) at 31 December 2023 showed funds of \u20ac3,861 million, up \u20ac2,848 million from 31 December 2022 (funds of \u20ac1,012 million). The change during the period is largely attributable to the positive valuation effects for the year of approximately \u20ac2.1 billion of the investments classified in the FVTOCI category, held mainly by the Financial Services Strategic Business Unit (approximately \u20ac1.9 billion) and residually by the Insurance Services Strategic Business Units (roughly \u20ac0.2 billion). The change also includes a positive operating result of \u20ac2.6 billion (of which \u20ac1.9 billion is attributable to profit for the period and \u20ac0.9 billion to amortisation/depreciation for the year), the positive effect of the change in working capital and taxes of approximately \u20ac0.2 billion, capital expenditure of \u20ac0.8 billion, dividend payments totalling \u20ac0.9 billion (of which \u20ac307 million relates to the interim dividend planned for 2023) and other decreases totalling \u20ac0.3 billion, mainly attributable to the increase in financial liabilities for leases falling under IFRS 16. Finally, the change includes the negative effect deriving essentially from the acquisition of Net Insurance (outlay of around \u20ac108 million) and Poste Vita's stake in Cronos (roughly \u20ac49.5 million including the second capital increase subscribed for approximately \u20ac47.8 million).
An analysis of the Net debt/(funds) of the Mail, Parcels and Distribution segment at 31 December 2023, in accordance with ESMA recommendation 32-382-1138, is provided below:
Financial debt ESMA
\u00a0
\u00a0
\u00a0
Description (\u20acm)
\u00a0
At 31.12.2023
At 31.12.2022
\u00a0
\u00a0
\u00a0
\u00a0
A. Cash and cash equivalents
\u00a0
(650)
(575)
B. Cash equivalents
\u00a0
-
-
C. Other current financial assets
\u00a0
(6)
(1)
D. Liquidity (A + B + C)
\u00a0
(656)
(577)
E. Current financial debt (including debt instruments, but excluding the current portion of non-current financial debt)
\u00a0
813
379
F. Current portion of the non-current financial payable
\u00a0
1
1
G. Current financial debt (E + F)
\u00a0
814
381
H. Net current financial debt (G + D)
\u00a0
158
(196)
I. Non-current financial debt (excluding current portion and debt instruments)
\u00a0
2,058
2,001
J. Debt instruments
\u00a0
498
997
K. Trade payables and other non-current payables
\u00a0
15
18
L. Non-current financial debt (I + J + K)
\u00a0
2,571
3,017
M. Total financial debt (H + L)
\u00a0
2,729
2,821
Reconciliation of financial debt ESMA
\u00a0
\u00a0
\u00a0
Description (\u20acm)
\u00a0
At 31.12.2023
At 31.12.2022
M. Total financial debt (H + L)
\u00a0
2,729
2,821
Non-current financial assets
\u00a0
(647)
(539)
K. Trade payables and other non-current payables
(15)
(18)
Tax credits Law no. 77/2020
\u00a0
(407)
(420)
Net debt/(funds)
\u00a0
1,661
1,843
Intersegment financial receivables and borrowings
\u00a0
1,094
996
Net debt/(funds) including intersegment transactions
\u00a0
2,755
2,839
For information regarding the Poste Group's credit lines and available liquidity at 31 December 2023, reference should be made to note 6 - Risk management - Financial risks - Liquidity risk.
Changes in financial liabilities arising from financing activities
The following reconciliation of financial liabilities is provided in accordance with IAS 7, following the amendments introduced by EU Regulation 1990/2017 of 6 November 2017.
tab. B8.4- Changes in liabilities arising from financing activities
\u00a0
Description(\u20acm)
Balance at 31.12.2022
Net cash flow from/(for) financing activities
Net cash flow from/(for) operating activities (*)
Non-cash flows
Balance at 31.12.2023
\u00a0\u00a0
\u00a0\u00a0
\u00a0\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Loans
12,000
77
(2,822)
921
10,176
Bonds
1,048
(50)
-
10
1,008
Due to financial institutions
10,952
127
(2,823)
911
9,167
Other borrowings
1
-
1
(0)
2
\u00a0
\u00a0
Lease payables
1,407
(298)
-
231
1,341
\u00a0\u00a0
\u00a0
Other financial liabilities
16,669
(33)
(190)
(1,160)
15,286
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
30,076
(254)
(3,012)
(8)
26,803", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page651-cflshid_294245-tag141602": { "value": "
Loans
At 31 December 2023, outstanding liabilities of \u20ac8,217 million relate to repurchase agreements entered into by the Parent Company with leading financial institutions and Central Counterparties, amounting to a total nominal value of \u20ac11,456 million. A total of \u20ac7,102 million of this amount regards Long Term Repos and \u20ac3,451 million regards ordinary loan operations, the resources from both invested in Italian fixed income government securities and as funding for deposits used as collateral. Repurchase agreements with a nominal value of \u20ac3,996 million were the subject of fair value hedge transactions executed to hedge interest rate risk.
Finally, financial assets and liabilities relating to repurchase agreements managed through the Central Counterparty that meet the requirements of IAS 32 are offset. The effect of netting at 31 December 2023, already included in the exposure to net balances, amounted to \u20ac2,337 million (\u20ac3,217 million at 31 December 2022).
The fair value237F238 of the repurchase agreements in question at 31 December 2023 is \u20ac7,996 million.
Loans
Loans are unsecured and are not subject to financial covenants, which would require Group companies to comply with economic and financial ratios or maintain a certain minimum rating. For the EIB financing and the CEB financing, a minimum rating level of BBB- (or equivalent) by Moody's and S&P for the EIB and by at least two of the three rating agencies of Poste Italiane for CEB is required. In the event of a rating loss, this is without prejudice to the right of both banks to request additional collateral or, in the case of the EIB, an increase in the margin. If no agreement is reached, immediate early repayment of the loans may be demanded. Standard negative pledge provisions do apply, however238F239.
Bonds
The item Bonds refers to a senior unsecured loan with a total nominal value of \u20ac1 billion issued by Poste Italiane on 10 December 2020 in two tranches, placed in public form to institutional investors as part of the \u20ac2.5 billion Euro Medium Term Notes (EMTN) programme deposited with the Luxembourg Stock Exchange. The first tranche of \u20ac500 million matures on 10 December 2024, has an above-par issue price of 100.10 with fixed annual coupon of 0.00% and an effective yield to maturity of -0.025%; the second tranche of \u20ac500 million matures on 10 December 2028, with an issue price below par of 99.758, a fixed annual coupon of 0.50% and an effective yield to maturity of 0.531%. At 31 December 2023, the fair value239F240 of the loan was \u20ac916 million.
A loan with a nominal value of \u20ac50 million, privately placed and issued at par on 25 October 2013 reached maturity in October 2023.
Due to financial institutions
tab. B8.3.1 - Due to financial institutions
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
\u00a0Changes
\u00a0
\u00a0
\u00a0
EIB fixed rate loan maturing 12/03/26
173
-
173
173
-
173
-
EIB fixed rate loan maturing 16/10/26
400
-
400
400
-
400
-
EIB fixed rate loan maturing 19/05/2028
150
-
150
150
-
150
-
EIB fixed rate loan maturing 02/05/2028
100
-
100
100
-
100
-
CEB variable rate loan maturing 28/12/30
125
-
125
-
-
-
125
Other loans
-
1
1
2
1
3
(2)
Accrued interest expense
-
1
1
-
1
1
0
\u00a0
\u00a0
\u00a0
-
Total
948
2
950
825
2
827
123
TV: Variable-rate loan. TF: Fixed-rate loan
At 31 December 2023, no committed and uncommitted credit lines were used for short-term financing.
On 18 December 2023, a medium-/long-term credit line for a total of \u20ac250 million was signed with the CEB \"Council of Europe Development Bank\", to support projects and investments with the aims of social integration, support for public infrastructure and sustainability. On 28 December 2023, the first tranche of \u20ac125 million was disbursed, bearing interest at a variable rate (6-month Euribor rate plus spread), with repayment in constant principal instalments after a three-year grace period and maturity on 28 December 2030.
At 31 December 2023, the fair value240F241 of the four EIB loans totalled \u20ac778 million and that of the CEB loan was \u20ac128 million", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page653-cflshid_296058-tag141603": { "value": "
Bonds
The item Bonds refers to a senior unsecured loan with a total nominal value of \u20ac1 billion issued by Poste Italiane on 10 December 2020 in two tranches, placed in public form to institutional investors as part of the \u20ac2.5 billion Euro Medium Term Notes (EMTN) programme deposited with the Luxembourg Stock Exchange. The first tranche of \u20ac500 million matures on 10 December 2024, has an above-par issue price of 100.10 with fixed annual coupon of 0.00% and an effective yield to maturity of -0.025%; the second tranche of \u20ac500 million matures on 10 December 2028, with an issue price below par of 99.758, a fixed annual coupon of 0.50% and an effective yield to maturity of 0.531%. At 31 December 2023, the fair value239F240 of the loan was \u20ac916 million.
A loan with a nominal value of \u20ac50 million, privately placed and issued at par on 25 October 2013 reached maturity in October 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page658-cflshid_301243-tag141604": { "value": "
B9 - TRADE PAYABLES (\u20ac2,252 million)
tab. B9 - Trade payables
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
Changes
\u00a0
Due to suppliers
1,625
1,655
(30)
Contract liabilities
563
553
11
Due to subsidiaries
3
3
(0)
Due to associates
61
23
37
\u00a0
Total
2,252
2,234
19
Due to suppliers
tab. B9.1 - Due to suppliers
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Balance at 31.12.2023
Balance at 31.12.2022
Changes
\u00a0
Italian suppliers
1,384
1,402
(18)
Foreign suppliers
106
79
27
Overseas counterparties (1)
135
173
(38)
\u00a0
Total
1,625
1,655
(30)
(1) The amount due to overseas counterparties relates to fees payable to overseas postal operators and companies in return for postal and telegraphic services received.
Contract liabilities
tab. B9.2 - Movements in contract liabilities
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Balance at 01.01.2023
Change due to recognition of revenue for period
Other changes
Balance at 31.12.2023
\u00a0
Prepayments and advances from customers
434
-
11
445
Liabilities for volume discounts
1
-
(0)
0
Liabilities for fees to be refunded
52
35
(43)
43
Other contract liabilities
67
(22)
30
75
\u00a0
Total
553
13
(2)
563
Prepayments and advances from customers relate mainly to amounts received from customers for the following services to be rendered:
tab. B9.2.1 - Prepayments and advances from customers
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Changes
\u00a0
\u00a0
Prepayments from overseas counterparties
179
223
(44)
Advances for Publishing from PCM
[tab. A8.1]
195
125
71
Advances for shipments
59
67
(9)
Advances for other services
13
19
(6)
\u00a0
Total
\u00a0
445
434
12
Liabilities for fees to be refunded represent the estimated liability linked to the refund of fees on loan products sold after 1 January 2018, under the terms of which the related fees must be refunded if the customer opts for early cancellation of the agreement.
Other contract liabilities primarily regard Postamat and \"Postepay Evolution\" card fees collected in advance.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page659-cflshid_301947-tag141607": { "value": "
B10 - OTHER LIABILITIES (\u20ac4,343 million)
tab. B10 - Other liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Due to staff
10
682
692
10
720
731
(38)
Social security payables
16
434
450
20
439
459
(8)
Other taxes payable
1,826
913
2,739
1,790
658
2,448
292
Sundry payables
55
199
254
52
136
187
67
Accrued liabilities and deferred income
150
56
207
133
46
179
28
\u00a0
\u00a0
\u00a0
Total
2,058
2,285
4,343
2,004
1,998
4,002
340
Due to staff
These items primarily regard accrued amounts that have yet to be paid at 31 December 2023. The breakdown is as follows:
tab. B10.1 - Due to staff
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Fourteenth month salaries
-
211
211
-
208
208
3
Incentives
10
372
382
10
408
418
(36)
Accrued vacation pay
-
43
43
-
41
41
2
Other amounts due to staff
-
55
55
-
63
63
(8)
\u00a0
\u00a0
\u00a0
Total
10
682
692
10
720
731
(38)
The decrease in this item compared to the year 2022 is mainly attributable to the extraordinary component due to lower early retirement incentives.
Social security payables
tab. B10.2 - Social security payables
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Description(\u20acm)
Non-current liabilities
Current liabilities
\u00a0Total
\u00a0
Non-current liabilities
Current liabilities
\u00a0Total
\u00a0
Changes
\u00a0
\u00a0
\u00a0
INPS
2
333
334
1
330
332
2
Pension funds
-
87
87
-
89
89
(2)
INAIL
15
0
15
18
0
19
(4)
Other agencies
(0)
15
15
0
19
19
(4)
\u00a0
\u00a0
\u00a0
Total
16
434
450
\u00a0
20
439
459
\u00a0
(8)
Other taxes payable
tab. B10.3 - Other taxes payable
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Stamp duty payable
1,826
132
1,958
1,790
21
1,810
148
Tax due on insurance provisions
-
496
496
-
420
420
76
Withholding tax on employees' and consultants' salaries
-
94
94
-
91
91
3
VAT payable
-
23
23
-
24
24
(1)
Substitute tax
-
40
40
-
32
32
8
Withholding tax on postal current accounts
-
74
74
-
29
29
45
Other taxes due
-
55
55
-
41
41
13
\u00a0
\u00a0
\u00a0
Total
1,826
913
2,739
1,790
658
2,448
292
Specifically:
\u2022The stamp duty payable includes the balance due to the Treasury for the tax paid virtually in the financial year 2023. The non-current portion of the stamp duty mainly relates to the amount accrued at 31 December 2023 on Interest-bearing Postal Certificates outstanding and on Class III and V insurance policies pursuant to the new law referred to in Note A9 \u2013 Other receivables and assets.
\u2022Tax due on insurance provisions relates to Poste Vita SpA and is described in note A9.
Sundry payables
tab. B10.4 - Sundry payables
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Sundry payables attributable to BancoPosta
-
3
3
-
5
5
(2)
Security deposits
16
0
17
14
0
14
2
Other payables
39
195
234
38
130
168
66
\u00a0
\u00a0
\u00a0
Total
55
199
254
52
135
187
67
Accrued liabilities and deferred income
Accrued liabilities and deferred income, which increased by \u20ac28 million compared to the year of comparison, include deferred income of \u20ac124 million for the non-repayable grant received in advance from the Parent Company for the implementation of the \"Polis Project - Home of Digital Services\".", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page659-cflshid_301947-tag141605": { "value": "
B10 - OTHER LIABILITIES (\u20ac4,343 million)
tab. B10 - Other liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Due to staff
10
682
692
10
720
731
(38)
Social security payables
16
434
450
20
439
459
(8)
Other taxes payable
1,826
913
2,739
1,790
658
2,448
292
Sundry payables
55
199
254
52
136
187
67
Accrued liabilities and deferred income
150
56
207
133
46
179
28
\u00a0
\u00a0
\u00a0
Total
2,058
2,285
4,343
2,004
1,998
4,002
340
Due to staff
These items primarily regard accrued amounts that have yet to be paid at 31 December 2023. The breakdown is as follows:
tab. B10.1 - Due to staff
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Fourteenth month salaries
-
211
211
-
208
208
3
Incentives
10
372
382
10
408
418
(36)
Accrued vacation pay
-
43
43
-
41
41
2
Other amounts due to staff
-
55
55
-
63
63
(8)
\u00a0
\u00a0
\u00a0
Total
10
682
692
10
720
731
(38)
The decrease in this item compared to the year 2022 is mainly attributable to the extraordinary component due to lower early retirement incentives.
Social security payables
tab. B10.2 - Social security payables
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Description(\u20acm)
Non-current liabilities
Current liabilities
\u00a0Total
\u00a0
Non-current liabilities
Current liabilities
\u00a0Total
\u00a0
Changes
\u00a0
\u00a0
\u00a0
INPS
2
333
334
1
330
332
2
Pension funds
-
87
87
-
89
89
(2)
INAIL
15
0
15
18
0
19
(4)
Other agencies
(0)
15
15
0
19
19
(4)
\u00a0
\u00a0
\u00a0
Total
16
434
450
\u00a0
20
439
459
\u00a0
(8)
Other taxes payable
tab. B10.3 - Other taxes payable
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Stamp duty payable
1,826
132
1,958
1,790
21
1,810
148
Tax due on insurance provisions
-
496
496
-
420
420
76
Withholding tax on employees' and consultants' salaries
-
94
94
-
91
91
3
VAT payable
-
23
23
-
24
24
(1)
Substitute tax
-
40
40
-
32
32
8
Withholding tax on postal current accounts
-
74
74
-
29
29
45
Other taxes due
-
55
55
-
41
41
13
\u00a0
\u00a0
\u00a0
Total
1,826
913
2,739
1,790
658
2,448
292
Specifically:
\u2022The stamp duty payable includes the balance due to the Treasury for the tax paid virtually in the financial year 2023. The non-current portion of the stamp duty mainly relates to the amount accrued at 31 December 2023 on Interest-bearing Postal Certificates outstanding and on Class III and V insurance policies pursuant to the new law referred to in Note A9 \u2013 Other receivables and assets.
\u2022Tax due on insurance provisions relates to Poste Vita SpA and is described in note A9.
Sundry payables
tab. B10.4 - Sundry payables
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Sundry payables attributable to BancoPosta
-
3
3
-
5
5
(2)
Security deposits
16
0
17
14
0
14
2
Other payables
39
195
234
38
130
168
66
\u00a0
\u00a0
\u00a0
Total
55
199
254
52
135
187
67
Accrued liabilities and deferred income
Accrued liabilities and deferred income, which increased by \u20ac28 million compared to the year of comparison, include deferred income of \u20ac124 million for the non-repayable grant received in advance from the Parent Company for the implementation of the \"Polis Project - Home of Digital Services\".", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page659-cflshid_301947-tag141606": { "value": "
B10 - OTHER LIABILITIES (\u20ac4,343 million)
tab. B10 - Other liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Due to staff
10
682
692
10
720
731
(38)
Social security payables
16
434
450
20
439
459
(8)
Other taxes payable
1,826
913
2,739
1,790
658
2,448
292
Sundry payables
55
199
254
52
136
187
67
Accrued liabilities and deferred income
150
56
207
133
46
179
28
\u00a0
\u00a0
\u00a0
Total
2,058
2,285
4,343
2,004
1,998
4,002
340
Due to staff
These items primarily regard accrued amounts that have yet to be paid at 31 December 2023. The breakdown is as follows:
tab. B10.1 - Due to staff
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Fourteenth month salaries
-
211
211
-
208
208
3
Incentives
10
372
382
10
408
418
(36)
Accrued vacation pay
-
43
43
-
41
41
2
Other amounts due to staff
-
55
55
-
63
63
(8)
\u00a0
\u00a0
\u00a0
Total
10
682
692
10
720
731
(38)
The decrease in this item compared to the year 2022 is mainly attributable to the extraordinary component due to lower early retirement incentivesSocial security payables
tab. B10.2 - Social security payables
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Description(\u20acm)
Non-current liabilities
Current liabilities
\u00a0Total
\u00a0
Non-current liabilities
Current liabilities
\u00a0Total
\u00a0
Changes
\u00a0
\u00a0
\u00a0
INPS
2
333
334
1
330
332
2
Pension funds
-
87
87
-
89
89
(2)
INAIL
15
0
15
18
0
19
(4)
Other agencies
(0)
15
15
0
19
19
(4)
\u00a0
\u00a0
\u00a0
Total
16
434
450
\u00a0
20
439
459
\u00a0
(8)
Other taxes payable
tab. B10.3 - Other taxes payable
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Stamp duty payable
1,826
132
1,958
1,790
21
1,810
148
Tax due on insurance provisions
-
496
496
-
420
420
76
Withholding tax on employees' and consultants' salaries
-
94
94
-
91
91
3
VAT payable
-
23
23
-
24
24
(1)
Substitute tax
-
40
40
-
32
32
8
Withholding tax on postal current accounts
-
74
74
-
29
29
45
Other taxes due
-
55
55
-
41
41
13
\u00a0
\u00a0
\u00a0
Total
1,826
913
2,739
1,790
658
2,448
292
Specifically:
\u2022The stamp duty payable includes the balance due to the Treasury for the tax paid virtually in the financial year 2023. The non-current portion of the stamp duty mainly relates to the amount accrued at 31 December 2023 on Interest-bearing Postal Certificates outstanding and on Class III and V insurance policies pursuant to the new law referred to in Note A9 \u2013 Other receivables and assets.
\u2022Tax due on insurance provisions relates to Poste Vita SpA and is described in note A9.
Sundry payables
tab. B10.4 - Sundry payables
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Description(\u20acm)
Non-current liabilities
Current liabilities
Total
Non-current liabilities
Current liabilities
Total
Changes
\u00a0
\u00a0
\u00a0
Sundry payables attributable to BancoPosta
-
3
3
-
5
5
(2)
Security deposits
16
0
17
14
0
14
2
Other payables
39
195
234
38
130
168
66
\u00a0
\u00a0
\u00a0
Total
55
199
254
52
135
187
67
Accrued liabilities and deferred income
Accrued liabilities and deferred income, which increased by \u20ac28 million compared to the year of comparison, include deferred income of \u20ac124 million for the non-repayable grant received in advance from the Parent Company for the implementation of the \"Polis Project - Home of Digital Services\".", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page661-cflshid_303689-tag141608": { "value": "
C1 \u2013 REVENUE FROM MAIL, PARCELS AND OTHER (\u20ac3,746 million)
This item breaks down as follows:
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Mail
1,753
1,749
3
Parcels
1,395
1,395
0
Other revenue
281
190
91
\u00a0
\u00a0
-
Total external revenue
3,429
3,335
94
\u00a0
\u00a0
Universal Service compensation
262
262
-
Publisher tariff subsidies
55
54
1
\u00a0
\u00a0
Total revenue
3,746
3,651
95
of which Revenue from contracts with customers
3,120
3,179
(59)
recognised at a point in time
376
371
5
recognised over time
2,744
2,808
(64)
External revenue showed an increase compared to the financial year 2022, largely attributable to the capital gain of approximately \u20ac109 million related to the sale of the controlling interest in the company sennder (see Note 2.8 - Basis of consolidation).
Universal Service compensation relates to amounts paid by the MEF to cover the costs of fulfilling the USO. Annual compensation, amounting to \u20ac262 million, is established in the 2020-2024 Contratto di Programma (Service Contract) in force on 1 January 2020.
Publisher tariff subsidies241F242 relate to the amount receivable by Poste Italiane from the Cabinet Office - Publishing department as compensation for the discounts applied to publishers and non-profit organisations when sending mail. The compensation is determined on the basis of the tariffs set in the decree issued by the Ministry of Enterprise and Made in Italy (former MiSE) in agreement with the Ministry of the Economy and Finance, on 21 October 2010 and Law Decree 63 of 18 May 2012, as converted into Law 103 of 16 July 2012. With AGCom Resolution 454/22/CONS of 30 December 2022, the new universal basic tariffs of the subsidised publishing products included in the Universal Service were defined. The Resolution provided for a gradual increase in the basic tariffs with a consequent increase in the compensation received by the Company per item sent at a subsidised rate. The amount of subsidies that the Company has granted is covered in the 2023 State Budget.
C2 \u2013 NET REVENUE FROM FINANCIAL SERVICES (\u20ac5,229 million)
Net revenue from financial services regards services provided mainly within the Parent Company's BancoPosta RFC and the subsidiary BancoPosta Fondi SGR.
This item breaks down as follows:
tab. C2 - Revenue from Financial Services
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
FY 2023
FY 2022
Changes
\u00a0
Revenue from financial services
5,516
4,684
832
Income from financial activities
271
428
(157)
Other operating income
7
13
(6)
Expenses from financial activities
(566)
(187)
(379)
Total
\u00a0
5,229
4,938
290
of which Revenue from contracts with customers
2,643
2,520
123
recognised at a point in time
231
233
(2)
recognised over time
2,412
2,288
124
Revenue from financial services breaks down as follows:
tab. C2.1 - Revenue from financial services
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
\u00a0
Income from investment of postal current account deposits and free cash
2,702
2,008
694
Fees for collection of postal savings deposits
1,740
1,600
140
Other revenue from current account services
426
426
1
Commissions on payment of bills by payment slip
208
216
(8)
Distribution of loan products
157
192
(35)
Income from delegated services
91
89
2
Mutual fund management fees
143
118
25
Money transfers
17
13
4
Other
32
22
10
Total
5,516
4,684
832
Revenue from financial services showed an increase compared to the year 2022, mainly due to income from investment of postal current account deposits and free cash and the remuneration of postal savings deposits.
Specifically:
\u2022Income from investment of postal current account deposits and free cash breaks down as follows:
tab. C2.1.1 - Income from investment of postal current account deposits and free cash
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Income from investments in securities
1,962
1,482
480
Interest income on securities at amortised cost
780
677
103
Interest income on securities at FVOCI
936
821
115
Interest income (expense) on asset swaps of CFH on securities at FVOCI and AC
5
20
(15)
Interest income (expense) on asset swaps of FVH on securities at FVOCI and AC
171
(79)
250
Interest income on repurchase agreements
70
43
27
Income from investments in tax credits
309
273
36
Interest income on tax credits at AC
309
189
120
Interest income on tax credits at FVTOCI
-
84
(84)
Income from deposits held with the MEF
446
252
194
Remuneration of current account deposits (deposited with the MEF)
441
323
118
Differential on derivatives stabilising returns
5
(71)
76
Portion of interest income on own liquidity (finance income)
(15)
1
(6)
Other income
0
2
-
Total
2,702
2,008
694
The increase in this item compared to the previous year is mainly attributable to the income from investments in securities and the income from deposits held with the MEF.
Income from investments in securities relates to interest earned on investment of deposits paid into postal current accounts by private customers. The amount of income includes the impact of the interest rate hedge. The increase in this item compared to financial year 2022 was mainly due to the effects of the upward shift in the interest rate curve, which had a positive effect on the differentials exchanged in fair value hedge transactions, and to the higher profitability of both the new securities that entered the portfolio in financial year 2023, and those subject to the broader restructuring of fair value hedges as described in Note A6 - Financial assets.
Income from investments in tax credits relates to interest accrued during the year on the investments described in Note A10 - Tax Credits Law no. 77/2020.
Income from deposits held with the MEF primarily represents accrued interest for the year on amounts deposited at Public Administration entities, remunerated at a variable rate as described in Note A6 - Financial assets. The increase compared to 31 December 2022 is mainly due to the rise in the interest rate curve.
\u2022Fees for the collection of postal savings deposits relates to remuneration for the provision and redemption of Interest-bearing Postal Certificates and payments into and withdrawals from Postal Savings Books. This service is provided by Poste Italiane SpA on behalf of Cassa Depositi e Prestiti. The increase in this item reflects the consideration accrued at the relevant date, under the Supplementary and Amending Deed of 30 January 2024, effective retroactively from 1 January 2023 to 31 December 2023, to the Agreement with Cassa Depositi e Prestiti renewed on 23 December 2021 for the period 2021-2024
\u2022Revenue from current account services primarily relates to charges on current accounts, fees on amounts collected and on statements of account sent to customers, annual fees on debit cards and related transactions.
\u2022Revenue from the distribution of loan products relates to commissions received by the Parent Company on the placement of personal loans and mortgages on behalf of third parties.
Income from financial activities breaks down as follows:
tab. C2.2 - Income from financial activities
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Income from financial instruments at FVTOCI
164
262
(98)
Realised gains
164
262
(98)
\u00a0
Income from financial instruments at amortised cost
48
129
(82)
Realised gains
48
129
(82)
\u00a0
Income from financial instruments at FVTPL
8
2
6
Fair value gains
7
1
6
Realised gains
1
-
1
Income from financial instruments - cash flow hedges
-
1
(1)
Fair value gains
-
1
(1)
\u00a0
Income from fair value hedges
0
17
(16)
Fair value gains
0
17
(16)
\u00a0
-
Foreign exchange gains
3
5
(2)
Fair value gains
1
1
(0)
Realised gains
2
4
(2)
\u00a0
Other income
48
12
36
\u00a0
Total
271
428
(157)
The decrease in Other income from financial activities, compared to the previous year, was mainly due to lower realised gains from financial instruments at FVTOCI and at amortised cost, partially offset by higher other income for interest accrued on guarantee deposits paid to counterparties .
Expenses from financial activities breaks down as follows:
tab. C2.3 - Expenses from financial activities
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Expenses from financial instruments at FVTOCI
54
4
50
Realised losses
54
4
50
\u00a0
Expenses from financial instruments at amortised cost
-
53
(53)
Realised losses
-
53
(53)
\u00a0
Expenses from financial instruments at FVTPL
7
2
5
Losses from valuation
4
1
3
Realised losses
3
0
2
Interest expense
505
127
378
Interest on customers' deposits
219
85
133
Interest expense on repurchase agreements
128
14
113
Due to the Parent Company
-
4
(4)
on guarantee deposits
158
24
134
Interest expense on own liquid funds (finance costs)
-
(1)
1
\u00a0
Total
566
187
379
Expenses from financial activities increased compared to the year 2022 mainly due to the effect of the change in the interest rate curve, which generated higher interest expenses on collateral deposits received from counterparties, on repurchase agreements and on postal current accounts of public customers.
C3 \u2013 NET REVENUE FROM INSURANCE SERVICES (\u20ac1,567 million)
tab. C3 - Net revenue from Insurance Services
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Revenue from insurance contracts issued
2,550
2,456
94
Costs arising from insurance contracts issued
(1,058)
(805)
(253)
Revenue/(costs) from outward reinsurance
(15)
(8)
(7)
Income and (expenses) from financial operations and other income/expenses
6,458
(1,532)
7,990
Net financial (costs)/revenue relating to insurance contracts issued
(6,373)
1,539
(7,911)
Net financial revenue/(costs) related to outward reinsurance
5
(0)
5
Total
1,567
1,650
(83)
Net revenue from insurance services decreased compared to 2022 from \u20ac1,650 million to \u20ac1,567 million, mainly due to the lower CSM release recognised during the period: \u20ac1,285 million compared to \u20ac1,515 million in the year of comparison; in particular, in the year 2022, the release had benefited from the additional yield related to the differential between the risk-neutral curve used to value the CSM and the actual real world curve. This decrease was only partly offset by the positive contribution of income, net of the portion reversed to policyholders, from financial operations (+\u20ac79 million compared to financial year 2022), given the improved financial dynamics and the higher release of the Adjustment for non-financial risk (+\u20ac31 million) compared to the same period of 2022.
The breakdown of revenue from insurance contracts and costs arising from insurance contracts is shown below.
The breakdown of Revenue from insurance contracts issued is as follows:
tab. C3.1 - Revenue from insurance contracts issued
Description(\u20acm)
FY 2023
FY 2022
Changes
Contracts measured according to GMM and VFA
2,137
2,139
(2)
\u00a0
Change in Liability for remaining coverage
1,923
1,965
(41)
Incurred claims and other insurance service costs expected
516
360
156
Changes in the adjustment for non-financial risks
120
89
31
Contractual service margin recognised in the statement of profit or loss for services provided
1,285
1,515
(231)
Other changes
2
0
2
\u00a0
Acquisition costs of recovered insurance contracts
214
174
40
\u00a0
Contracts measured according to the PAA
413
317
96
\u00a0
Total
2,550
2,456
94
At the end of the reporting period, insurance revenue from contracts measured upon transition to IFRS 17 using the Fair Value Approach amounted to \u20ac58 million, for contracts subject to carve-out242F243 amounted to \u20ac1,909 million, with the remainder relating to revenue from new contracts recognised in the period and contracts for which the Full Retrospective Approach was adopted.
The breakdown of Costs from insurance contracts issued is as follows:
tab. C3.2 - Costs from insurance contracts issued
Description(\u20acm)
FY 2023
FY 2022
Changes
Contracts measured according to GMM and VFA
703
533
170
\u00a0
Incurred claims and other directly attributable costs
346
360
(14)
Changes in the liability for incurred claims
146
(1)
147
Losses on onerous contracts and recovery of such losses
(3)
0
(3)
Amortisation of insurance contract acquisition costs
214
174
40
Other
(1)
-
(1)
\u00a0
Contracts measured according to the PAA
355
271
84
\u00a0
Total
1,058
805
253
The breakdown of revenue/(costs) from outward reinsurance is as follows:
tab. C3.3\u2013 Revenue/(costs) from outward reinsurance
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Outward reinsurance measured under GMM
(48)
0
(48)
\u00a0
Change in asset for remaining coverage
(48)
0
(48)
Amount of claims and other recoverable costs expected
(35)
0
(35)
Changes in the adjustment for non-financial risks
(4)
(0)
(4)
Contractual service margin recognised in the statement of profit or loss for services received
(6)
(0)
(6)
Other
(3)
0
(3)
\u00a0
Other costs directly attributable to outward reinsurance
0
0
0
\u00a0
Outward reinsurance measured under PAA
(41)
(7)
(34)
\u00a0
Total costs from outward reinsurance
(89)
(7)
(82)
\u00a0
Effects of changes in default risk by reinsurers
0
0
0
Amount of claims and other expenses recovered
0
0
(0)
Changes in the asset for incurred claims
38
(1)
39
Other recoveries
2
0
2
\u00a0
Revenue from outward reinsurance measured under PAA
33
(0)
\u00a0
Total
(15)
(8)
(7)
The breakdown of Income and (Expenses) from financial operations and other income/expenses is as follows:
tab. C3.4 - Income and (expenses) from financial operations and other income/expenses
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Income from financial operations and other income
6,982
4,434
2,549
Expenses from financial operations and other expenses
(525)
(5,966)
5,441
\u00a0
Total
6,458
(1,532)
7,990
tab. C3.4.1 - Income from financial operations and other income
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Income from financial instruments at FVTOCI
3,217
3,613
(396)
Interest
3,202
3,549
(347)
Realised gains
15
64
(49)
Dividends
0
-
Income from financial instruments at amortised cost
6
6
0
Interest
6
6
0
Realised gains
-
-
-
Income from financial instruments at FVPL
3,600
693
2,907
Interest
553
321
233
Fair value gains
2,893
335
2,557
Realised gains
154
37
117
Other income
160
122
38
\u00a0
Total
6,982
4,434
2,549
The increase in Income from financial operations and other income is mainly attributable to valuation gains from financial instruments at FVPL.
tab. C3.4.2 - Expenses from financial operations and other expenses
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Expenses from financial instruments at FVOCI
46
252
(206)
Interest
0
5
(5)
Realised losses
46
247
(202)
\u00a0
Expenses from financial instruments at FVPL
469
5,711
(5,242)
Losses from valuation
289
5,382
(5,093)
Realised losses
181
329
(149)
\u00a0
Impairment losses/(reversals of impairment losses) due to credit risk
7
(4)
11
Other expenses
3
(14)
17
\u00a0
-
Total
525
5,966
(5,441)
The decrease in Expenses from financial operations and other expenses is mainly attributable to expenses from the valuation of financial instruments at FVPL.
These valuation gains and losses, related almost entirely to the investments included in the separately managed accounts, were almost entirely relegated to policyholders through the mirroring mechanism and included in the item \"Net financial (costs)/revenue relating to insurance contracts issued\".
tab. C3.5 - Net financial (costs)/revenue relating to insurance contracts issued
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Accrued interest
(12)
0
(12)
Effects of changes in interest rates and other financial assumptions
(1)
1
(2)
Change in fair value of underlying assets of contracts measured under VFA
(6,359)
1,538
(7,897)
Effects of exchange rate changes
0
0
0
Other
0
0
0
Total
(6,373)
1,539
(7,911)
tab. C3.6 - Net financial revenue/(costs) related to outward reinsurance
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Accrued interest
5
0
5
Effects of changes in interest rates and other financial assumptions
0
(0)
0
Effects of exchange rate changes
0
0
0
Other
0
0
0
Total
5
(0)
5
C4 \u2013 REVENUE FROM PAYMENTS AND MOBILE SERVICES (\u20ac1,586 million)
This item breaks down as follows:
tab. C4 - Revenue from payments and mobile
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Electronic money
623
581
42
Fees for issue and use of prepaid cards
409
423
(14)
Acquiring
60
47
13
Other fees
154
111
44
Mobile
327
317
11
Payments services
473
233
240
Payment Slips
280
68
212
Commissions for processing tax payments using forms F23/F24
46
48
(1)
Money transfers
147
109
38
Other products and services
(0)
9
(9)
Revenue from energy services
157
12
145
Other operating income
6
4
1
\u00a0
Total
1,586
1,147
440
of which Revenue from contracts with customers
1,306
1,127
179
recognised at a point in time
438
485
(47)
recognised over time
868
642
226
These consist of revenue from card payment products and payment services, revenue from mobile telephony services and revenue from the energy segment, which are mainly generated by PostePay SpA and its direct subsidiaries.
Revenue from payments and mobile services posted an increase of \u20ac440 million compared to the same period of last year, with a positive contribution from all segments. Of particular note is the growth in revenue from collection and reporting services, taking into account the full 2023 contribution of LIS Holding and Lis Pay (consolidated from September 2022), and revenue from the energy segment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page665-cflshid_306251-tag141609": { "value": "
The breakdown of Revenue from insurance contracts issued is as follows:
tab. C3.1 - Revenue from insurance contracts issued
Description(\u20acm)
FY 2023
FY 2022
Changes
Contracts measured according to GMM and VFA
2,137
2,139
(2)
\u00a0
Change in Liability for remaining coverage
1,923
1,965
(41)
Incurred claims and other insurance service costs expected
516
360
156
Changes in the adjustment for non-financial risks
120
89
31
Contractual service margin recognised in the statement of profit or loss for services provided
1,285
1,515
(231)
Other changes
2
0
2
\u00a0
Acquisition costs of recovered insurance contracts
214
174
40
\u00a0
Contracts measured according to the PAA
413
317
96
\u00a0
Total
2,550
2,456
94
At the end of the reporting period, insurance revenue from contracts measured upon transition to IFRS 17 using the Fair Value Approach amounted to \u20ac58 million, for contracts subject to carve-out242F243 amounted to \u20ac1,909 million, with the remainder relating to revenue from new contracts recognised in the period and contracts for which the Full Retrospective Approach was adopted.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInsurancePremiumRevenueExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page669-cflshid_308739-tag141611": { "value": "
C5 - COST OF GOODS AND SERVICES (\u20ac3,237 million)
tab. C5 - Cost of goods and services
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Service costs
2,906
2,619
287
Lease expense
163
137
26
Raw, ancillary and consumable materials and goods for resale
303
190
113
Allocation of costs directly attributable to insurance contracts
(135)
(119)
(16)
Total
3,237
2,827
410
Costs of goods and services (adjusted for costs directly attributable to insurance contracts) increased by a total of \u20ac410 million compared to the financial year 2022, mainly due to the generalised increase in prices resulting from the international inflationary scenario and the expansion of the company perimeter that occurred mainly in the second half of the previous year.
Service costs
tab. C5.1 - Service costs
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Transport of mail, parcels and forms
1,146
1,084
62
Credit and debit card fees and charges
322
218
105
Outsourcing fees and external service charges
281
243
38
Routine maintenance and technical assistance
247
250
(3)
Mobile telecommunication services for customers
182
169
13
Personnel services
141
129
12
Energy and water
101
80
21
Cleaning, waste disposal and security
95
109
(15)
Advertising and promotions
78
62
16
Transport of cash
57
62
(5)
Exchange of mail and telegraphy
44
42
2
Asset management fees
43
43
(0)
Telecommunications and data transmission
40
43
(3)
Electricity and gas transmission costs
34
0
33
Consultants' fees and legal expenses
19
18
1
Electronic document management, printing and enveloping services
10
12
(1)
Remuneration and expenses of Statutory Auditors
2
1
0
Other
66
54
12
Total
2,906
2,619
287
The rise in service costs was mainly due to the increase in credit/debit card management fees and charges, costs for logistics and delivery services related to the parcels segment, fees related to the increased use of cloud technology, and electricity and gas transmission costs of the energy segment.
Lease expense
tab. C5.2 - Lease expense
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Real estate leases and ancillary costs
113
86
27
Vehicle leases
33
36
(3)
Equipment hire and software licences
4
3
1
Other lease expense
13
12
1
\u00a0
Total
163
137
26
Raw, ancillary and consumable materials and goods for resale
tab. C5.3 - Raw, ancillary and consumable materials and goods for resale
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Consumables, advertising materials and goods for resale
109
87
22
Fuels and lubricants
68
74
(6)
Electricity and gas costs
115
13
102
Printing of postage and revenue stamps
6
4
2
Electronic money card
15
9
6
SIM cards and scratch cards
1
1
(1)
Change in inventories of work in progress, semi-finished and finished goods and goods for resale
(8)
(5)
(3)
Change in inventories of raw, ancillary and consumable materials
1
6
(5)
Change in property held for sale
(7)
1
(7)
Others
3
0
3
Total
303
190
113
The increase compared to the financial year 2022 was mainly affected by the generalised increase in the purchase prices of fuel and raw materials, higher costs in the energy segment as a result of the launch of the commercial offer during the year, and the expansion of the company scope.
C6 - PERSONNEL EXPENSES (\u20ac5,170 million)
Personnel expenses include the cost of personnel seconded to other organisations. The recovery of such expenses is posted to Other operating income. Personnel expenses break down as follows:
tab. C6 - Personnel expenses
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Note
FY 2023
FY 2022
Changes
\u00a0
Wages and salaries
4,076
3,856
220
Social security contributions
1,157
1,099
58
Employee termination benefits: current service cost
[tab. B7]
3
2
1
Employee termination benefits: supplementary pension funds and INPS
238
234
4
Agency staff
4
3
1
Remuneration and expenses paid to Directors
5
3
1
Early retirement incentives
12
22
(11)
Net provisions (reversals) for disputes with staff
[tab. B6]
10
(3)
13
Allocations to the provisions for early retirement incentives
[tab. B6]
159
54
105
Amounts recovered from staff due to disputes
(3)
(4)
1
Share-based payments
12
9
3
Other personnel expenses/(cost recoveries)
(29)
(48)
19
Allocation of costs directly attributable to insurance contracts
(473)
(404)
(69)
Total
\u00a0
5,170
4,823
347
Personnel expenses (adjusted for costs directly attributable to insurance contracts) increased by \u20ac347 million compared to the year 2022 attributable, for the ordinary component, primarily to the increase in the unit cost and, for the extraordinary component, to higher early retirement incentives and the additional and extraordinary performance bonus, paid in November 2023, for approximately \u20ac130 million. The increase in the unit cost is mainly attributable to the increase on contractual minimums triggered in July 2022 in connection with the National Collective Labour Agreement renewed in June 2021 and the increase in the variable component driven by the share linked to commercial action.
Net provisions for disputes with staff and provisions for early retirement incentives are described in note B6 \u2013 Provisions for risks and charges.
The following table shows the Group's average and year-end headcount:
tab. C6.1 - Number of employees
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Average
Year end
Category
\u00a0
FY 2023
FY 2022
31.12.23
31.12.22
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Executives
692
660
688
679
Middle managers
15,338
15,136
15,279
15,161
Operational staff
88,540
89,871
86,349
89,896
Back-office staff
6,334
4,619
6,475
6,080
\u00a0
\u00a0
Total employees on permanent contracts (*)
\u00a0
110,904
110,286
108,791
111,816
(*)Figures expressed in full time equivalent terms
Furthermore, taking account of personnel on flexible contracts, the average number of full-time equivalent personnel is 119,310 (in 2022: 119,806)
C8 - CAPITALISED COSTS AND EXPENSES (\u20ac56 million)
Capitalised costs and expenses break down as follows:
tab. C8 - Increases relating to assets under construction
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Property, plant and machinery:
2
3
(2)
Cost of goods and services
2
3
(2)
\u00a0
-
Intangible assets:
54
38
16
Cost of goods and services
14
3
12
Personnel expenses
39
33
5
Depreciation and amortisation
1
2
(1)
\u00a0
Total
56
41
14
C9 - OTHER OPERATING COSTS (\u20ac275 million)
Other operating costs break down as follows:
tab. C9 - Other operating costs
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Net provisions for risks and charges made/(released)
81
323
(241)
for disputes with third parties
(12)
24
(36)
for operational risks
(1)
(11)
10
for other risks and charges
11
(10)
21
for taxation
3
(1)
4
for risks on tax credit - Law no. 77/2020
80
320
(240)
Operational risk events
28
25
3
Thefts
4
2
2
Loss of BancoPosta assets, net of recoveries
3
4
(1)
Other operating losses of BancoPosta
21
19
2
\u00a0
Capital losses
3
2
1
\u00a0
Municipal property tax, urban waste tax and other taxes and duties
113
107
6
Other current expenses
71
62
9
Allocation of costs directly attributable to insurance contracts
(22)
(10)
(11)
Total
275
508
(233)
\u00a0
\u00a0
\u00a0
Other operating costs (adjusted for costs directly attributable to insurance contracts) decreased compared to the year of comparison due to lower provisions for risks and charges, see in this regard Note B6 - Provisions for risks and charges and Note A10 - Tax credits Law no. 77/2020.
tab. C11.2 - Finance costs
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Finance costs on financial liabilities
38
33
5
on bonds
5
4
1
on due to financial institutions
6
4
2
on lease payables
28
24
5
from derivative financial instruments
0
1
(1)
\u00a0
Sundry costs on financial assets
4
18
(15)
Realised losses on financial instruments at FVOCI
3
-
3
Losses from valuation on financial instruments at FVTPL
0
18
(18)
\u00a0
Expenses from financial liabilities at FVPL
5
-
\u00a0
Finance costs on provisions for employee termination benefits and pension plans
26
16
10
\u00a0
Finance costs on provisions for risks
4
(0)
5
\u00a0
Interest expense on own liquid funds
-
1
(1)
\u00a0
Other finance costs
34
50
(16)
\u00a0
Foreign exchange losses
8
9
(1)
\u00a0
Total
119
126
(7)
For the purposes of reconciliation with the statement of cash flows, in 2023 finance costs after foreign exchange losses amounted to \u20ac110 million (\u20ac118 million in 2022).
C12 - INCOME TAX EXPENSE (\u20ac794 million)
tab. C12 - Income tax expense
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
IRES
IRAP
Other
Total
IRES
IRAP
Other
Total
\u00a0
\u00a0
\u00a0
\u00a0
Current tax expense
597
148
2
746
408
111
1
520
226
Deferred tax assets
(3)
1
-
(2)
43
8
-
52
(54)
Deferred tax liabilities
43
7
-
50
222
56
-
278
(228)
\u00a0
\u00a0
\u00a0
\u00a0
Total
637
156
2
794
672
176
1
850
(56)
Below is the reconciliation of the Parent Company's theoretical IRES tax rate and the effective tax rate of 29.11%:
\u00a0tab. C12.1 - Reconciliation between theoretical and effective IRES rate
Description(\u20acm)
FY 2023
FY 2022
Tax
Impact %
Tax
Impact %
Profit before tax
2,727
\u00a0
2,433
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Theoretical tax charge
655
24.0%
584
24.0%
Effect of increases/(decreases) on theoretical tax charge
\u00a0
\u00a0
\u00a0
Realised gains on investments
(25)
-0.92%
-
0.00%
Non-deductible out-of-period losses
8
0.30%
6
0.24%
Net provisions for risks and charges and impairment of receivables
23
0.83%
99
4.06%
Realignment of tax bases and carrying amounts and taxation for previous years
(11)
-0.39%
(10)
-0.43%
Patent Box and ACE (aid for economic growth) tax effect - previous years
-
0.00%
(6)
-0.25%
Other differences
(11)
-0.40%
(0)
-0.02%
IRAP Italian companies
155
5.69%
178
7.33%
\u00a0
\u00a0
\u00a0
\u00a0
Effective tax charge
794
29.11%
850
34.92%
With regard to the deductibility of losses related to the non-compensation of tax credits, and the provision for risks on tax credits (see also Note A10 - Tax Credits Law no. 77/2020), on 25 January 2024, the Agenzia delle Entrate's response was received to the request for a tax ruling presented by the Parent Company; the response received provides indications that lend themselves to different interpretations and discussions are currently under way with the Agenzia delle Entrate to define the correct interpretation and the consequent impact on the various applicable cases. Given the continuing situation of interpretative uncertainty, based on the provisions of IFRIC 23 - Uncertainty in Income Tax Treatments, these items have been conservatively evaluated as non-deductible. The possible positive tax effects that may emerge as a result of potential developments in the interpretation of the cases in question, following the conclusion of discussions with the Agenzia delle Entrate will be reflected in financial statements after 2023.
Current tax expense
tab. C12.2 - Movements in current tax assets /(liabilities)
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Current tax 2023
IRES
IRAP
Foreign companies
Total
Assets/(Liabilities)
Assets/(Liabilities)
Assets/(Liabilities)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 1 January
70
12
(2)
80
\u00a0
\u00a0
\u00a0
\u00a0
Payments
131
63
3
197
Collection of ACE 2013 credit
(6)
-
-
(6)
\u00a0
\u00a0
\u00a0
\u00a0
Claim for IRAP refund
-
(1)
-
(1)
\u00a0
\u00a0
\u00a0
\u00a0
Offsetting tax credits Law no. 77/2020
340
39
-
379
\u00a0
\u00a0
\u00a0
\u00a0
Provisions to profit or loss
(597)
(148)
(2)
(746)
\u00a0
\u00a0
\u00a0
\u00a0
Provisions to equity
7
0
-
7
\u00a0
\u00a0
\u00a0
\u00a0
Other (*)
63
5
(0)
68
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31 December
8
(30)
(1)
(23)
of which:
\u00a0
\u00a0
\u00a0
\u00a0
Current tax assets
156
10
-
167
Current tax liabilities
(149)
(40)
(1)
(189)
(*) This item mainly refers to receivables for withholding taxes.
Under IAS 12 \u2013 Income Taxes, IRES and IRAP credits are offset against the corresponding current tax liabilities, when applied by the same tax authority to the same taxable entity, which has a legally enforceable right to offset and intends to exercise this right.
At 31 December 2023, current tax assets/(liabilities) include:
\u2022the liability of \u20ac175 million determined by mainly IRES and IRAP provisions for the year 2023 net of IRES and IRAP advances paid and IRES and IRAP receivables from the previous year and receivables for withholding taxes;
\u2022receivables referred to the Parent Company of a residual \u20ac14 million related to the adhesion to the Patent Box regime for the years 2017-2019. Following the submission of the relevant supplementary tax return, the IRES credit related to the Aid for Economic Growth (ACE) for the financial year 2013 of \u20ac6 million was collected in the year under review;
\u2022assets for a total of \u20ac14 million related to a request for a tax ruling referring to the tax recognition of income components arising from the management of postal current account balances;
\u2022the substitute tax credit of a residual \u20ac13 million relating to the redemption carried out by the Parent Company during 2018, pursuant to art. 15, paragraph 10 ter of Law Decree no. 185 of 29 November 2008, of the higher values resulting from the notes to the consolidated financial statements at 31 December 2017, of goodwill and other intangible assets relating to the acquisition of the investment in FSIA Investimenti Srl;
\u2022the substitute tax credit for a residual \u20ac7 million relating to the redemption carried out by the Parent Company during 2022, pursuant to art. 15, paragraphs 10 bis and 10 ter of Law Decree no. 185 of 29 November 2008, of the goodwill arising from the acquisition of the Nexive Group and Sengi HK investments;
\u2022assets for a residual \u20ac9 million recognised as a result of the responses received to two requests for a tax ruling filed with the Agenzia delle Entrate concerning the tax effects of application of IFRS 9 and 15. These assets will become offsettable after the submission of the relevant supplementary tax returns.
It should be noted that during the year, the companies PostePay S.p.A. and Poste Italiane S.p.A. recognised substitute tax credits of approximately \u20ac90 million and \u20ac6 million, respectively, in connection with the franking, pursuant to Article 15, paragraph 10-ter, of Law Decree no. 185 of 29 November 2008, of the goodwill and other intangible assets identified in the Purchase Price Allocation (\"PPA\") arising from the acquisition of the investments in LIS Holding, Agile and Sourcesense. The payment of the substitute tax will allow the franked amounts to be deducted for tax purposes as of the financial year 2025.
Deferred tax assets and liabilities
tab. C12.3 - Deferred tax assets and liabilities
\u00a0
\u00a0
Description(\u20acm)
Balance at 31 December 2023
Balance at 31 December 2022
Changes
\u00a0
Deferred tax assets
2,109
2,601
(492)
\u00a0
Deferred tax liabilities
(900)
(815)
(85)
\u00a0
Total
1,208
1,786
(578)
Movements in deferred tax assets and liabilities are shown below:
tab. C12.4 - Movements in deferred tax assets and liabilities
\u00a0
Description(\u20acm)
FY 2023
\u00a0
Balance at 1 January
1,786
\u00a0
Net income/(expense) recognised in profit or loss
(48)
Net income/(expense) recognised in equity
(565)
Change in scope of consolidation and other
34
\u00a0
Balance at 31 December
1,208
The following table shows movements in deferred tax assets and liabilities, broken down according to the events that generated such movements:
tab. C12.5 - Movements in deferred tax assets
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Property, plant and equipment and intangible assets
Financial assets and liabilities
Provisions to cover expected losses
Provisions for risks and charges
Insurance assets and liabilities
Other
Total
Balance at 1 January 2023
49
1,118
95
237
913
189
2,601
\u00a0
Income/(expense) recognised in profit or loss
(1)
4
1
(19)
3
14
2
Income/(expense) recognised in equity
0
(525)
-
(0)
(1)
(0)
(525)
Change in scope of consolidation
-
2
-
0
25
2
29
\u00a0
Balance at 31 December 2023
49
601
97
218
939
206
2,109
tab. C12.6 - Movements in deferred tax liabilities
\u00a0
\u00a0
Description(\u20acm)
Financial assets and liabilities
Intangible assets
Other
Total
Balance at 1 January 2023
674
63
78
815
\u00a0
Expense/(income) recognised in profit or loss
47
(3)
7
50
Expense/(income) recognised in equity
30
-
(0)
30
Change in scope of consolidation
-
5
0
5
Reclassifications
-
-
0
0
\u00a0
Balance at 31 December 2023
751
64
86
900
Movements in deferred tax assets and liabilities recognised directly in equity during the year are as follows:
tab. C12.7 - Deferred tax assets and liabilities recognised in equity
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
\u00a0
Fair value reserve for financial assets at FVTOCI
(2,387)
Reserve for insurance contracts issued and outward reinsurance
1,755
Cash flow hedge reserve for hedging instruments
68
Actuarial gains /(losses) on employee termination benefits
(0)
\u00a0
Total
(565)
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page669-cflshid_308739-tag141610": { "value": "
C5 - COST OF GOODS AND SERVICES (\u20ac3,237 million)
tab. C5 - Cost of goods and services
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
Service costs
2,906
2,619
287
Lease expense
163
137
26
Raw, ancillary and consumable materials and goods for resale
303
190
113
Allocation of costs directly attributable to insurance contracts
(135)
(119)
(16)
Total
3,237
2,827
410
Costs of goods and services (adjusted for costs directly attributable to insurance contracts) increased by a total of \u20ac410 million compared to the financial year 2022, mainly due to the generalised increase in prices resulting from the international inflationary scenario and the expansion of the company perimeter that occurred mainly in the second half of the previous year.
Service costs
tab. C5.1 - Service costs
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Transport of mail, parcels and forms
1,146
1,084
62
Credit and debit card fees and charges
322
218
105
Outsourcing fees and external service charges
281
243
38
Routine maintenance and technical assistance
247
250
(3)
Mobile telecommunication services for customers
182
169
13
Personnel services
141
129
12
Energy and water
101
80
21
Cleaning, waste disposal and security
95
109
(15)
Advertising and promotions
78
62
16
Transport of cash
57
62
(5)
Exchange of mail and telegraphy
44
42
2
Asset management fees
43
43
(0)
Telecommunications and data transmission
40
43
(3)
Electricity and gas transmission costs
34
0
33
Consultants' fees and legal expenses
19
18
1
Electronic document management, printing and enveloping services
10
12
(1)
Remuneration and expenses of Statutory Auditors
2
1
0
Other
66
54
12
Total
2,906
2,619
287
The rise in service costs was mainly due to the increase in credit/debit card management fees and charges, costs for logistics and delivery services related to the parcels segment, fees related to the increased use of cloud technology, and electricity and gas transmission costs of the energy segment.
Lease expense
tab. C5.2 - Lease expense
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Real estate leases and ancillary costs
113
86
27
Vehicle leases
33
36
(3)
Equipment hire and software licences
4
3
1
Other lease expense
13
12
1
\u00a0
Total
163
137
26
Raw, ancillary and consumable materials and goods for resale
tab. C5.3 - Raw, ancillary and consumable materials and goods for resale
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Consumables, advertising materials and goods for resale
109
87
22
Fuels and lubricants
68
74
(6)
Electricity and gas costs
115
13
102
Printing of postage and revenue stamps
6
4
2
Electronic money card
15
9
6
SIM cards and scratch cards
1
1
(1)
Change in inventories of work in progress, semi-finished and finished goods and goods for resale
(8)
(5)
(3)
Change in inventories of raw, ancillary and consumable materials
1
6
(5)
Change in property held for sale
(7)
1
(7)
Others
3
0
3
Total
303
190
113
The increase compared to the financial year 2022 was mainly affected by the generalised increase in the purchase prices of fuel and raw materials, higher costs in the energy segment as a result of the launch of the commercial offer during the year, and the expansion of the company scope.
", "dimensions": { "concept": "ext:DisclosureOfGoodsAndServicesExpenses", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page671-cflshid_309832-tag141612": { "value": "
tab. C6.1 - Number of employees
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Average
Year end
Category
\u00a0
FY 2023
FY 2022
31.12.23
31.12.22
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Executives
692
660
688
679
Middle managers
15,338
15,136
15,279
15,161
Operational staff
88,540
89,871
86,349
89,896
Back-office staff
6,334
4,619
6,475
6,080
\u00a0
\u00a0
Total employees on permanent contracts (*)
\u00a0
110,904
110,286
108,791
111,816
(*)Figures expressed in full time equivalent terms
Furthermore, taking account of personnel on flexible contracts, the average number of full-time equivalent personnel is 119,310 (in 2022: 119,806)", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page672-cflshid_310576-tag141613": { "value": "C7 - DEPRECIATION, AMORTISATION AND IMPAIRMENTS (\u20ac811 million)
This item breaks down as follows:
tab. C7 - Depreciation, amortisation and impairments
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Depreciation of property, plant and equipment
239
230
9
Impairments/recoveries/adjustments of property, plant and equipment
3
(4)
7
Depreciation of investment property
1
1
(0)
Amortisation and impairments of intangible assets
366
354
12
Depreciation of right-of-use assets
272
251
21
Allocation of costs directly attributable to insurance contracts
(72)
(61)
(11)
Total
811
769
42
Depreciation, amortisation and impairments (adjusted for costs directly attributable to insurance contracts) increased by \u20ac42 million compared to the financial year 2022. The increase is attributable to rights of use (\u20ac21 million) mainly for the expansion of the leased fleet held by the Parent Company, to intangible assets (\u20ac12 million) for investments in software applications that have become available for use and for assets identified as part of the purchase price allocation processes on acquisitions made during 2022, and to property, plant and equipment (\u20ac9 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page673-cflshid_311027-tag141614": { "value": "C9 - OTHER OPERATING COSTS (\u20ac275 million)
Other operating costs break down as follows:
tab. C9 - Other operating costs
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Net provisions for risks and charges made/(released)
81
323
(241)
for disputes with third parties
(12)
24
(36)
for operational risks
(1)
(11)
10
for other risks and charges
11
(10)
21
for taxation
3
(1)
4
for risks on tax credit - Law no. 77/2020
80
320
(240)
Operational risk events
28
25
3
Thefts
4
2
2
Loss of BancoPosta assets, net of recoveries
3
4
(1)
Other operating losses of BancoPosta
21
19
2
\u00a0
Capital losses
3
2
1
\u00a0
Municipal property tax, urban waste tax and other taxes and duties
113
107
6
Other current expenses
71
62
9
Allocation of costs directly attributable to insurance contracts
(22)
(10)
(11)
Total
275
508
(233)
\u00a0
\u00a0
\u00a0
Other operating costs (adjusted for costs directly attributable to insurance contracts) decreased compared to the year of comparison due to lower provisions for risks and charges, see in this regard Note B6 - Provisions for risks and charges and Note A10 - Tax credits Law no. 77/2020.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page673-cflshid_311027-tag141616": { "value": "
C10 \u2013 IMPAIRMENT LOSSES/(REVERSALS OF IMPAIRMENT LOSSES) ON DEBT INSTRUMENTS, RECEIVABLES AND OTHER ASSETS (\u20ac71 million)
C10 - Impairment losses/(Reversals of impairment losses) on debt instruments, receivables and other assets
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Net impairments and losses on receivables and other assets
64
97
(33)
Impairment losses/(reversals of impairment losses) on financial activities
(0)
1
(1)
Impairment losses/(reversals of impairment losses) on debt instruments at FVTOCI
3
4
(1)
Impairment losses/(reversals of impairment losses) on debt instruments at amortised cost
4
2
3
\u00a0
Total
71
104
(34)
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentLossAndReversalOfImpairmentLossExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page673-cflshid_311027-tag141615": { "value": "
C10 \u2013 IMPAIRMENT LOSSES/(REVERSALS OF IMPAIRMENT LOSSES) ON DEBT INSTRUMENTS, RECEIVABLES AND OTHER ASSETS (\u20ac71 million)
C10 - Impairment losses/(Reversals of impairment losses) on debt instruments, receivables and other assets
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Net impairments and losses on receivables and other assets
64
97
(33)
Impairment losses/(reversals of impairment losses) on financial activities
(0)
1
(1)
Impairment losses/(reversals of impairment losses) on debt instruments at FVTOCI
3
4
(1)
Impairment losses/(reversals of impairment losses) on debt instruments at amortised cost
4
2
3
\u00a0
Total
71
104
(34)
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page674-cflshid_311617-tag141619": { "value": "
C11 \u2013 FINANCE INCOME (\u20ac181 million) AND COSTS (\u20ac119 million)
Income from and costs incurred on financial instruments relate to assets other than those in which deposits collected by BancoPosta and the financial and insurance businesses are invested.
Finance income
tab. C11.1 - Finance income
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Income from financial instruments at FVTOCI
60
66
(7)
Interest
55
64
(9)
Accrued differentials on fair value hedges
0
1
(1)
Realised gains
0
1
(1)
Dividends
4
0
4
Income from financial instruments at amortised cost
62
64
(3)
Interest
62
64
(3)
\u00a0
Income from financial instruments at FVPL
10
8
2
Fair value gains
9
3
6
Accrued differentials on derivative financial instruments at FVPL
1
5
(4)
Income from financial liabilities at FVTPL
2
11
(9)
\u00a0
Income from financial instruments - cash flow hedges
6
0
6
Realised gains
6
0
6
Other finance income
35
10
25
Remuneration of own liquid funds of Poste Italiane
15
1
14
Interest on bank accounts
9
4
5
Finance income on discounted receivables
2
2
(0)
Late payment interest
30
23
8
Impairment of amounts due as late payment interest
(29)
(22)
(7)
Other income
8
2
6
\u00a0
Foreign exchange gains
8
11
(3)
\u00a0
Total
181
169
12
For the purposes of reconciliation with the statement of cash flows, in 2023 finance income after both realised gains, foreign exchange gains and dividends, amounted to \u20ac169 million (\u20ac157 million in 2022).
Finance income increased by \u20ac12 million compared to the previous year, mainly due to the remuneration accrued on postal current accounts in the name of Poste Italiane as a result of the rise in the interest rate curve (\u20ac14 million).
tab. C11.2 - Finance costs
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Finance costs on financial liabilities
38
33
5
on bonds
5
4
1
on due to financial institutions
6
4
2
on lease payables
28
24
5
from derivative financial instruments
0
1
(1)
\u00a0
Sundry costs on financial assets
4
18
(15)
Realised losses on financial instruments at FVOCI
3
-
3
Losses from valuation on financial instruments at FVTPL
0
18
(18)
\u00a0
Expenses from financial liabilities at FVPL
5
-
\u00a0
Finance costs on provisions for employee termination benefits and pension plans
26
16
10
\u00a0
Finance costs on provisions for risks
4
(0)
5
\u00a0
Interest expense on own liquid funds
-
1
(1)
\u00a0
Other finance costs
34
50
(16)
\u00a0
Foreign exchange losses
8
9
(1)
\u00a0
Total
119
126
(7)
For the purposes of reconciliation with the statement of cash flows, in 2023 finance costs after foreign exchange losses amounted to \u20ac110 million (\u20ac118 million in 2022).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page674-cflshid_311617-tag141618": { "value": "
C11 \u2013 FINANCE INCOME (\u20ac181 million) AND COSTS (\u20ac119 million)
Income from and costs incurred on financial instruments relate to assets other than those in which deposits collected by BancoPosta and the financial and insurance businesses are invested.
Finance income
tab. C11.1 - Finance income
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Income from financial instruments at FVTOCI
60
66
(7)
Interest
55
64
(9)
Accrued differentials on fair value hedges
0
1
(1)
Realised gains
0
1
(1)
Dividends
4
0
4
Income from financial instruments at amortised cost
62
64
(3)
Interest
62
64
(3)
\u00a0
Income from financial instruments at FVPL
10
8
2
Fair value gains
9
3
6
Accrued differentials on derivative financial instruments at FVPL
1
5
(4)
Income from financial liabilities at FVTPL
2
11
(9)
\u00a0
Income from financial instruments - cash flow hedges
6
0
6
Realised gains
6
0
6
Other finance income
35
10
25
Remuneration of own liquid funds of Poste Italiane
15
1
14
Interest on bank accounts
9
4
5
Finance income on discounted receivables
2
2
(0)
Late payment interest
30
23
8
Impairment of amounts due as late payment interest
(29)
(22)
(7)
Other income
8
2
6
\u00a0
Foreign exchange gains
8
11
(3)
\u00a0
Total
181
169
12
For the purposes of reconciliation with the statement of cash flows, in 2023 finance income after both realised gains, foreign exchange gains and dividends, amounted to \u20ac169 million (\u20ac157 million in 2022).
Finance income increased by \u20ac12 million compared to the previous year, mainly due to the remuneration accrued on postal current accounts in the name of Poste Italiane as a result of the rise in the interest rate curve (\u20ac14 million).
tab. C11.2 - Finance costs
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Finance costs on financial liabilities
38
33
5
on bonds
5
4
1
on due to financial institutions
6
4
2
on lease payables
28
24
5
from derivative financial instruments
0
1
(1)
\u00a0
Sundry costs on financial assets
4
18
(15)
Realised losses on financial instruments at FVOCI
3
-
3
Losses from valuation on financial instruments at FVTPL
0
18
(18)
\u00a0
Expenses from financial liabilities at FVPL
5
-
\u00a0
Finance costs on provisions for employee termination benefits and pension plans
26
16
10
\u00a0
Finance costs on provisions for risks
4
(0)
5
\u00a0
Interest expense on own liquid funds
-
1
(1)
\u00a0
Other finance costs
34
50
(16)
\u00a0
Foreign exchange losses
8
9
(1)
\u00a0
Total
119
126
(7)
For the purposes of reconciliation with the statement of cash flows, in 2023 finance costs after foreign exchange losses amounted to \u20ac110 million (\u20ac118 million in 2022).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page674-cflshid_311617-tag141617": { "value": "
C11 \u2013 FINANCE INCOME (\u20ac181 million) AND COSTS (\u20ac119 million)
Income from and costs incurred on financial instruments relate to assets other than those in which deposits collected by BancoPosta and the financial and insurance businesses are invested.
Finance income
tab. C11.1 - Finance income
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Income from financial instruments at FVTOCI
60
66
(7)
Interest
55
64
(9)
Accrued differentials on fair value hedges
0
1
(1)
Realised gains
0
1
(1)
Dividends
4
0
4
Income from financial instruments at amortised cost
62
64
(3)
Interest
62
64
(3)
\u00a0
Income from financial instruments at FVPL
10
8
2
Fair value gains
9
3
6
Accrued differentials on derivative financial instruments at FVPL
1
5
(4)
Income from financial liabilities at FVTPL
2
11
(9)
\u00a0
Income from financial instruments - cash flow hedges
6
0
6
Realised gains
6
0
6
Other finance income
35
10
25
Remuneration of own liquid funds of Poste Italiane
15
1
14
Interest on bank accounts
9
4
5
Finance income on discounted receivables
2
2
(0)
Late payment interest
30
23
8
Impairment of amounts due as late payment interest
(29)
(22)
(7)
Other income
8
2
6
\u00a0
Foreign exchange gains
8
11
(3)
\u00a0
Total
181
169
12
For the purposes of reconciliation with the statement of cash flows, in 2023 finance income after both realised gains, foreign exchange gains and dividends, amounted to \u20ac169 million (\u20ac157 million in 2022).
Finance income increased by \u20ac12 million compared to the previous year, mainly due to the remuneration accrued on postal current accounts in the name of Poste Italiane as a result of the rise in the interest rate curve (\u20ac14 million).
tab. C11.2 - Finance costs
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
\u00a0
Finance costs on financial liabilities
38
33
5
on bonds
5
4
1
on due to financial institutions
6
4
2
on lease payables
28
24
5
from derivative financial instruments
0
1
(1)
\u00a0
Sundry costs on financial assets
4
18
(15)
Realised losses on financial instruments at FVOCI
3
-
3
Losses from valuation on financial instruments at FVTPL
0
18
(18)
\u00a0
Expenses from financial liabilities at FVPL
5
-
\u00a0
Finance costs on provisions for employee termination benefits and pension plans
26
16
10
\u00a0
Finance costs on provisions for risks
4
(0)
5
\u00a0
Interest expense on own liquid funds
-
1
(1)
\u00a0
Other finance costs
34
50
(16)
\u00a0
Foreign exchange losses
8
9
(1)
\u00a0
Total
119
126
(7)
For the purposes of reconciliation with the statement of cash flows, in 2023 finance costs after foreign exchange losses amounted to \u20ac110 million (\u20ac118 million in 2022).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page676-cflshid_312698-tag141620": { "value": "
C12 - INCOME TAX EXPENSE (\u20ac794 million)
tab. C12 - Income tax expense
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
FY 2022
Changes
IRES
IRAP
Other
Total
IRES
IRAP
Other
Total
\u00a0
\u00a0
\u00a0
\u00a0
Current tax expense
597
148
2
746
408
111
1
520
226
Deferred tax assets
(3)
1
-
(2)
43
8
-
52
(54)
Deferred tax liabilities
43
7
-
50
222
56
-
278
(228)
\u00a0
\u00a0
\u00a0
\u00a0
Total
637
156
2
794
672
176
1
850
(56)
Below is the reconciliation of the Parent Company's theoretical IRES tax rate and the effective tax rate of 29.11%:
\u00a0tab. C12.1 - Reconciliation between theoretical and effective IRES rate
Description(\u20acm)
FY 2023
FY 2022
Tax
Impact %
Tax
Impact %
Profit before tax
2,727
\u00a0
2,433
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Theoretical tax charge
655
24.0%
584
24.0%
Effect of increases/(decreases) on theoretical tax charge
\u00a0
\u00a0
\u00a0
Realised gains on investments
(25)
-0.92%
-
0.00%
Non-deductible out-of-period losses
8
0.30%
6
0.24%
Net provisions for risks and charges and impairment of receivables
23
0.83%
99
4.06%
Realignment of tax bases and carrying amounts and taxation for previous years
(11)
-0.39%
(10)
-0.43%
Patent Box and ACE (aid for economic growth) tax effect - previous years
-
0.00%
(6)
-0.25%
Other differences
(11)
-0.40%
(0)
-0.02%
IRAP Italian companies
155
5.69%
178
7.33%
\u00a0
\u00a0
\u00a0
\u00a0
Effective tax charge
794
29.11%
850
34.92%
With regard to the deductibility of losses related to the non-compensation of tax credits, and the provision for risks on tax credits (see also Note A10 - Tax Credits Law no. 77/2020), on 25 January 2024, the Agenzia delle Entrate's response was received to the request for a tax ruling presented by the Parent Company; the response received provides indications that lend themselves to different interpretations and discussions are currently under way with the Agenzia delle Entrate to define the correct interpretation and the consequent impact on the various applicable cases. Given the continuing situation of interpretative uncertainty, based on the provisions of IFRIC 23 - Uncertainty in Income Tax Treatments, these items have been conservatively evaluated as non-deductible. The possible positive tax effects that may emerge as a result of potential developments in the interpretation of the cases in question, following the conclusion of discussions with the Agenzia delle Entrate will be reflected in financial statements after 2023.
Current tax expense
tab. C12.2 - Movements in current tax assets /(liabilities)
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Current tax 2023
IRES
IRAP
Foreign companies
Total
Assets/(Liabilities)
Assets/(Liabilities)
Assets/(Liabilities)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 1 January
70
12
(2)
80
\u00a0
\u00a0
\u00a0
\u00a0
Payments
131
63
3
197
Collection of ACE 2013 credit
(6)
-
-
(6)
\u00a0
\u00a0
\u00a0
\u00a0
Claim for IRAP refund
-
(1)
-
(1)
\u00a0
\u00a0
\u00a0
\u00a0
Offsetting tax credits Law no. 77/2020
340
39
-
379
\u00a0
\u00a0
\u00a0
\u00a0
Provisions to profit or loss
(597)
(148)
(2)
(746)
\u00a0
\u00a0
\u00a0
\u00a0
Provisions to equity
7
0
-
7
\u00a0
\u00a0
\u00a0
\u00a0
Other (*)
63
5
(0)
68
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31 December
8
(30)
(1)
(23)
of which:
\u00a0
\u00a0
\u00a0
\u00a0
Current tax assets
156
10
-
167
Current tax liabilities
(149)
(40)
(1)
(189)
(*) This item mainly refers to receivables for withholding taxes.
Under IAS 12 \u2013 Income Taxes, IRES and IRAP credits are offset against the corresponding current tax liabilities, when applied by the same tax authority to the same taxable entity, which has a legally enforceable right to offset and intends to exercise this right.
At 31 December 2023, current tax assets/(liabilities) include:
\u2022the liability of \u20ac175 million determined by mainly IRES and IRAP provisions for the year 2023 net of IRES and IRAP advances paid and IRES and IRAP receivables from the previous year and receivables for withholding taxes;
\u2022receivables referred to the Parent Company of a residual \u20ac14 million related to the adhesion to the Patent Box regime for the years 2017-2019. Following the submission of the relevant supplementary tax return, the IRES credit related to the Aid for Economic Growth (ACE) for the financial year 2013 of \u20ac6 million was collected in the year under review;
\u2022assets for a total of \u20ac14 million related to a request for a tax ruling referring to the tax recognition of income components arising from the management of postal current account balances;
\u2022the substitute tax credit of a residual \u20ac13 million relating to the redemption carried out by the Parent Company during 2018, pursuant to art. 15, paragraph 10 ter of Law Decree no. 185 of 29 November 2008, of the higher values resulting from the notes to the consolidated financial statements at 31 December 2017, of goodwill and other intangible assets relating to the acquisition of the investment in FSIA Investimenti Srl;
\u2022the substitute tax credit for a residual \u20ac7 million relating to the redemption carried out by the Parent Company during 2022, pursuant to art. 15, paragraphs 10 bis and 10 ter of Law Decree no. 185 of 29 November 2008, of the goodwill arising from the acquisition of the Nexive Group and Sengi HK investments;
\u2022assets for a residual \u20ac9 million recognised as a result of the responses received to two requests for a tax ruling filed with the Agenzia delle Entrate concerning the tax effects of application of IFRS 9 and 15. These assets will become offsettable after the submission of the relevant supplementary tax returns.
It should be noted that during the year, the companies PostePay S.p.A. and Poste Italiane S.p.A. recognised substitute tax credits of approximately \u20ac90 million and \u20ac6 million, respectively, in connection with the franking, pursuant to Article 15, paragraph 10-ter, of Law Decree no. 185 of 29 November 2008, of the goodwill and other intangible assets identified in the Purchase Price Allocation (\"PPA\") arising from the acquisition of the investments in LIS Holding, Agile and Sourcesense. The payment of the substitute tax will allow the franked amounts to be deducted for tax purposes as of the financial year 2025.
Deferred tax assets and liabilities
tab. C12.3 - Deferred tax assets and liabilities
\u00a0
\u00a0
Description(\u20acm)
Balance at 31 December 2023
Balance at 31 December 2022
Changes
\u00a0
Deferred tax assets
2,109
2,601
(492)
\u00a0
Deferred tax liabilities
(900)
(815)
(85)
\u00a0
Total
1,208
1,786
(578)
Movements in deferred tax assets and liabilities are shown below:
tab. C12.4 - Movements in deferred tax assets and liabilities
\u00a0
Description(\u20acm)
FY 2023
\u00a0
Balance at 1 January
1,786
\u00a0
Net income/(expense) recognised in profit or loss
(48)
Net income/(expense) recognised in equity
(565)
Change in scope of consolidation and other
34
\u00a0
Balance at 31 December
1,208
The following table shows movements in deferred tax assets and liabilities, broken down according to the events that generated such movements:
tab. C12.5 - Movements in deferred tax assets
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Property, plant and equipment and intangible assets
Financial assets and liabilities
Provisions to cover expected losses
Provisions for risks and charges
Insurance assets and liabilities
Other
Total
Balance at 1 January 2023
49
1,118
95
237
913
189
2,601
\u00a0
Income/(expense) recognised in profit or loss
(1)
4
1
(19)
3
14
2
Income/(expense) recognised in equity
0
(525)
-
(0)
(1)
(0)
(525)
Change in scope of consolidation
-
2
-
0
25
2
29
\u00a0
Balance at 31 December 2023
49
601
97
218
939
206
2,109
tab. C12.6 - Movements in deferred tax liabilities
\u00a0
\u00a0
Description(\u20acm)
Financial assets and liabilities
Intangible assets
Other
Total
Balance at 1 January 2023
674
63
78
815
\u00a0
Expense/(income) recognised in profit or loss
47
(3)
7
50
Expense/(income) recognised in equity
30
-
(0)
30
Change in scope of consolidation
-
5
0
5
Reclassifications
-
-
0
0
\u00a0
Balance at 31 December 2023
751
64
86
900
Movements in deferred tax assets and liabilities recognised directly in equity during the year are as follows:
tab. C12.7 - Deferred tax assets and liabilities recognised in equity
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
\u00a0
Fair value reserve for financial assets at FVTOCI
(2,387)
Reserve for insurance contracts issued and outward reinsurance
1,755
Cash flow hedge reserve for hedging instruments
68
Actuarial gains /(losses) on employee termination benefits
(0)
\u00a0
Total
(565)
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page677-cflshid_313511-tag141621": { "value": "Current tax expense
tab. C12.2 - Movements in current tax assets /(liabilities)
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Current tax 2023
IRES
IRAP
Foreign companies
Total
Assets/(Liabilities)
Assets/(Liabilities)
Assets/(Liabilities)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 1 January
70
12
(2)
80
\u00a0
\u00a0
\u00a0
\u00a0
Payments
131
63
3
197
Collection of ACE 2013 credit
(6)
-
-
(6)
\u00a0
\u00a0
\u00a0
\u00a0
Claim for IRAP refund
-
(1)
-
(1)
\u00a0
\u00a0
\u00a0
\u00a0
Offsetting tax credits Law no. 77/2020
340
39
-
379
\u00a0
\u00a0
\u00a0
\u00a0
Provisions to profit or loss
(597)
(148)
(2)
(746)
\u00a0
\u00a0
\u00a0
\u00a0
Provisions to equity
7
0
-
7
\u00a0
\u00a0
\u00a0
\u00a0
Other (*)
63
5
(0)
68
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31 December
8
(30)
(1)
(23)
of which:
\u00a0
\u00a0
\u00a0
\u00a0
Current tax assets
156
10
-
167
Current tax liabilities
(149)
(40)
(1)
(189)
(*) This item mainly refers to receivables for withholding taxes.
Under IAS 12 \u2013 Income Taxes, IRES and IRAP credits are offset against the corresponding current tax liabilities, when applied by the same tax authority to the same taxable entity, which has a legally enforceable right to offset and intends to exercise this right.
At 31 December 2023, current tax assets/(liabilities) include:
\u2022the liability of \u20ac175 million determined by mainly IRES and IRAP provisions for the year 2023 net of IRES and IRAP advances paid and IRES and IRAP receivables from the previous year and receivables for withholding taxes;
\u2022receivables referred to the Parent Company of a residual \u20ac14 million related to the adhesion to the Patent Box regime for the years 2017-2019. Following the submission of the relevant supplementary tax return, the IRES credit related to the Aid for Economic Growth (ACE) for the financial year 2013 of \u20ac6 million was collected in the year under review;
\u2022assets for a total of \u20ac14 million related to a request for a tax ruling referring to the tax recognition of income components arising from the management of postal current account balances;
\u2022the substitute tax credit of a residual \u20ac13 million relating to the redemption carried out by the Parent Company during 2018, pursuant to art. 15, paragraph 10 ter of Law Decree no. 185 of 29 November 2008, of the higher values resulting from the notes to the consolidated financial statements at 31 December 2017, of goodwill and other intangible assets relating to the acquisition of the investment in FSIA Investimenti Srl;
\u2022the substitute tax credit for a residual \u20ac7 million relating to the redemption carried out by the Parent Company during 2022, pursuant to art. 15, paragraphs 10 bis and 10 ter of Law Decree no. 185 of 29 November 2008, of the goodwill arising from the acquisition of the Nexive Group and Sengi HK investments;
\u2022assets for a residual \u20ac9 million recognised as a result of the responses received to two requests for a tax ruling filed with the Agenzia delle Entrate concerning the tax effects of application of IFRS 9 and 15. These assets will become offsettable after the submission of the relevant supplementary tax returns.
It should be noted that during the year, the companies PostePay S.p.A. and Poste Italiane S.p.A. recognised substitute tax credits of approximately \u20ac90 million and \u20ac6 million, respectively, in connection with the franking, pursuant to Article 15, paragraph 10-ter, of Law Decree no. 185 of 29 November 2008, of the goodwill and other intangible assets identified in the Purchase Price Allocation (\"PPA\") arising from the acquisition of the investments in LIS Holding, Agile and Sourcesense. The payment of the substitute tax will allow the franked amounts to be deducted for tax purposes as of the financial year 2025.
Deferred tax assets and liabilities
tab. C12.3 - Deferred tax assets and liabilities
\u00a0
\u00a0
Description(\u20acm)
Balance at 31 December 2023
Balance at 31 December 2022
Changes
\u00a0
Deferred tax assets
2,109
2,601
(492)
\u00a0
Deferred tax liabilities
(900)
(815)
(85)
\u00a0
Total
1,208
1,786
(578)
", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page678-cflshid_314323-tag141622": { "value": "
Deferred tax assets and liabilities
tab. C12.3 - Deferred tax assets and liabilities
\u00a0
\u00a0
Description(\u20acm)
Balance at 31 December 2023
Balance at 31 December 2022
Changes
\u00a0
Deferred tax assets
2,109
2,601
(492)
\u00a0
Deferred tax liabilities
(900)
(815)
(85)
\u00a0
Total
1,208
1,786
(578)
Movements in deferred tax assets and liabilities are shown below:
tab. C12.4 - Movements in deferred tax assets and liabilities
\u00a0
Description(\u20acm)
FY 2023
\u00a0
Balance at 1 January
1,786
\u00a0
Net income/(expense) recognised in profit or loss
(48)
Net income/(expense) recognised in equity
(565)
Change in scope of consolidation and other
34
\u00a0
Balance at 31 December
1,208
The following table shows movements in deferred tax assets and liabilities, broken down according to the events that generated such movements:
tab. C12.5 - Movements in deferred tax assets
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Property, plant and equipment and intangible assets
Financial assets and liabilities
Provisions to cover expected losses
Provisions for risks and charges
Insurance assets and liabilities
Other
Total
Balance at 1 January 2023
49
1,118
95
237
913
189
2,601
\u00a0
Income/(expense) recognised in profit or loss
(1)
4
1
(19)
3
14
2
Income/(expense) recognised in equity
0
(525)
-
(0)
(1)
(0)
(525)
Change in scope of consolidation
-
2
-
0
25
2
29
\u00a0
Balance at 31 December 2023
49
601
97
218
939
206
2,109
tab. C12.6 - Movements in deferred tax liabilities
\u00a0
\u00a0
Description(\u20acm)
Financial assets and liabilities
Intangible assets
Other
Total
Balance at 1 January 2023
674
63
78
815
\u00a0
Expense/(income) recognised in profit or loss
47
(3)
7
50
Expense/(income) recognised in equity
30
-
(0)
30
Change in scope of consolidation
-
5
0
5
Reclassifications
-
-
0
0
\u00a0
Balance at 31 December 2023
751
64
86
900
Movements in deferred tax assets and liabilities recognised directly in equity during the year are as follows:
tab. C12.7 - Deferred tax assets and liabilities recognised in equity
\u00a0
\u00a0
\u00a0
Description(\u20acm)
FY 2023
\u00a0
Fair value reserve for financial assets at FVTOCI
(2,387)
Reserve for insurance contracts issued and outward reinsurance
1,755
Cash flow hedge reserve for hedging instruments
68
Actuarial gains /(losses) on employee termination benefits
(0)
\u00a0
Total
(565)
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page680-cflshid_315237-tag141623": { "value": "
4.4 - OPERATING SEGMENTS
The identified operating segments, which are in line with the Group's strategic guidelines, are as follows:
\u2022Mail, Parcels and Distribution
\u2022Financial Services
\u2022Insurance Services
\u2022Payments and Mobile
For a description of the operating segments as well as the types of products and/or services from which each reportable segment derives its revenue, please refer to the \"Introduction\" section of this Annual Report.
The result for each segment is based on operating profit/(loss) and gains/losses on intermediation.
In order to provide an understanding of the energy business, included in the Payments and Mobile operating segment, according to an approach based on the net interest and other banking income, since the Group is not an energy producer, the values marked with an asterisk include a management reclassification that provides for the presentation of revenue related to the energy business net of costs related to the purchase of raw materials and the transport of electricity and gas. Therefore, values that deviate from the accounting data are specially marked and reconciled with the figures in the accounting statements.
The following results, which are shown separately in accordance with the management view and with applicable accounting standards, should be read in light of the integration of the services offered by the distribution network within the businesses allocated to all four identified operating segments, also considering the obligation to carry out the Universal Postal Service.
Economic data by operating segment
FY 2023(\u20acm)
Mail, Parcels and Distribution
Financial Services
Insurance Services
Payments and Mobile
\u00a0
Adjustments and eliminations
Total
Net external revenue from ordinary activities
3,746
5,229
1,567
1,447
(*)
-
11,989
(*)
Net intersegment revenue from ordinary activities
5,245
866
(148)
264
\u00a0
(6,227)
0
Net operating revenue
8,991
6,095
1,419
1,710
(*)
(6,227)
11,989
(*)
Total costs
(9,033)
(5,232)
(59)
(1,271)
(*)
6,227
(9,368)
(*)
of which: Depreciation, amortisation and impairments
(844)
(0)
(2)
(36)
\u00a0
71
(811)
of which: Other non-cash expenses
(291)
(12)
(1)
(24)
\u00a0
-
(328)
Operating profit/(loss)
(43)
863
1,360
440
\u00a0
0
2,620
Finance income/(costs)
(41)
(1)
102
2
\u00a0
-
62
(Impairment losses)/reversals of impairment losses on financial assets
25
0
(0)
(0)
\u00a0
-
25
Profit/(Loss) on investments accounted for using the equity method
2
18
-
-
\u00a0
-
20
Intersegment finance income/(costs)
8
13
(51)
30
\u00a0
0
-
Income tax expense
2
(246)
(417)
(134)
\u00a0
-
(794)
Net profit/(loss) for the year
(46)
647
994
338
\u00a0
0
1,933
FY 2022(\u20acm)
Mail, Parcels and Distribution
Financial Services
Insurance Services
Payments and Mobile
\u00a0
Adjustments and eliminations
Total
Net external revenue from ordinary activities
3,651
4,939
1,650
1,134
(*)
-
11,374
(*)
Net intersegment revenue from ordinary activities
4,862
820
(148)
264
\u00a0
(5,798)
0
Net operating revenue
8,512
5,759
1,502
1,398
(*)
(5,798)
11,374
(*)
Total costs
(8,838)
(4,872)
(48)
(1,019)
(*)
5,798
(8,978)
(*)
of which: Depreciation, amortisation and impairments
(805)
(0)
(3)
(23)
\u00a0
63
(769)
of which: Other non-cash expenses
(498)
21
(1)
(7)
\u00a0
-
(486)
Operating profit/(loss)
(326)
887
1,455
379
\u00a0
(0)
2,396
Finance income/(costs)
(31)
(13)
87
(0)
\u00a0
-
43
(Impairment losses)/reversals of impairment losses on financial assets
1
0
(0)
(0)
\u00a0
-
0
Profit/(Loss) on investments accounted for using the equity method
1
(7)
-
-
\u00a0
-
(6)
Intersegment finance income/(costs)
46
(2)
(45)
1
\u00a0
0
0
Income tax expense
(52)
(243)
(445)
(110)
\u00a0
-
(850)
Net profit/(loss) for the year
(361)
622
1,051
270
\u00a0
0
1,583
Below is the reconciliation between the accounting figure and the management figure for the year under review and the comparative figure, reclassified to reflect the new exposure:
\u00a0
FY 2023
\u00a0
FY 2022
Description(\u20acm)
\u00a0
Payments and Mobile
Poste Italiane
Payments and Mobile
Poste Italiane
Net external revenue from ordinary activities
Accounting figure
1,586
12,128
1,147
11,386
Reclassification
(140)
(140)
(12)
(12)
Management figure
1,447
11,989
1,134
11,374
Net intersegment revenue from ordinary activities
Accounting figure
275
\u00a0
264
\u00a0
Reclassification
(11)
\u00a0
0
\u00a0
Management figure
264
\u00a0
264
\u00a0
Net operating revenue
Accounting figure
1,861
12,128
1,410
11,386
Reclassification
(150)
(140)
(12)
(12)
Management figure
1,710
11,989
1,398
11,374
Total costs
Accounting figure
1,421
9,508
1,031
8,990
Reclassification
(150)
(140)
(12)
(12)
Management figure
1,271
9,368
1,018
8,978
Statement of financial position data by operating segment
31 December 2023(\u20acm)
Mail, Parcels and Distribution
Financial Services
Insurance Services
Payments and Mobile
\u00a0
Adjustments and eliminations
Total
Assets
13,223
98,450
164,024
12,712
\u00a0
(17,633)
270,777
Non-current assets
9,934
73,325
144,516
737
\u00a0
(3,698)
224,814
Current assets
3,289
25,125
19,508
11,975
\u00a0
(13,936)
45,963
Non-current assets and disposal groups held for sale
-
-
50
-
\u00a0
-
50
Liabilities
10,340
95,640
157,634
11,269
\u00a0
(14,496)
260,388
Non-current liabilities
4,125
10,014
156,402
85
\u00a0
(669)
169,958
Current liabilities
6,215
85,626
1,232
11,185
\u00a0
(13,827)
90,430
Other information
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Capital expenditure
814
0
6
25
\u00a0
-
845
Investments accounted for using the equity method
27
267
-
-
\u00a0
-
294
31 December 2022(\u20acm)
Mail, Parcels and Distribution
Financial Services
Insurance Services
Payments and Mobile
\u00a0
Adjustments and eliminations
Total
Assets
12,902
104,744
148,943
11,743
\u00a0
(16,258)
262,074
Non-current assets
9,701
72,202
132,982
742
\u00a0
(3,699)
211,928
Current assets
3,201
32,542
15,961
11,001
\u00a0
(12,559)
50,146
Non-current assets and disposal groups held for sale
-
-
-
-
\u00a0
-
-
Liabilities
10,393
103,406
143,186
10,332
\u00a0
(13,121)
254,195
Non-current liabilities
4,623
10,339
142,163
83
\u00a0
(560)
156,647
Current liabilities
5,770
93,067
1,023
10,249
\u00a0
(12,560)
97,548
Other information
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Capital expenditure
788
0
0
23
\u00a0
-
810
Investments accounted for using the equity method
4
262
-
-
\u00a0
-
267
Disclosure about geographical segments, based on the geographical areas in which the various Group companies are based or the location of its customers, is of no material significance. At 31 December 2023, the entities consolidated on a line-by-line basis are mainly based in Italy and, on a residual and insignificant basis in China and the United Kingdom243F244; customers are mainly located in Italy: revenue from foreign customers does not account for a significant percentage of total revenue. Assets include those deployed by the segment in the course of ordinary business activities and those that could be allocated to it for the performance of such activities.", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page682-cflshid_317627-tag141624": { "value": "
4.5 \u2013 RELATED PARTY TRANSACTIONS
Impact of related party transactions on the financial position and profit or loss
The impact of related party transactions on the financial position and profit or loss is shown below.
Impact of related party transactions on the financial position at 31 December 2023
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Description(\u20acm)
Financial assets
Trade receivables
Other assets Other receivables
Cash and cash equivalents
Financial liabilities
Trade payables
Other liabilities
Subsidiaries
Address Software Srl
-
0
-
-
0
1
0
Kipoint SpA
-
1
0
-
2
2
0
Indabox
-
0
-
-
0
0
0
Associates
Anima Holding Group
-
0
-
-
-
7
-
Italia Camp Srl
-
1
-
-
-
0
-
Financit SpA
-
3
-
-
-
17
-
Eurizon Capital Real Asset SGR
-
-
-
-
-
0
-
sennder Italia Srl
-
1
-
-
-
36
(0)
Cronos Vita Assicurazioni SpA
-
0
-
-
-
-
-
Related parties external to the Group
MEF
8,937
370
19
873
5,376
4
1
Cassa Depositi e Prestiti Group
2,913
253
1
-
0
24
-
Enel Group
-
27
-
-
-
3
0
Eni Group
-
5
-
-
-
3
-
Equitalia Group
-
1
-
-
-
-
-
SACE Group
-
0
-
-
-
-
-
Leonardo Group
-
0
-
-
-
11
-
Montepaschi Group
224
2
-
0
351
(0)
-
Other related parties external to the Group
20
50
2
-
4
4
88
Provision for doubtful debts due from related parties external to the Group
(27)
(32)
(6)
(0)
-
-
-
Total
12,066
681
17
874
5,734
113
90
At 31 December 2023, total provisions for risks and charges made to cover probable liabilities arising from transactions with related parties external to the Group attributable mainly to trading relations amounted to \u20ac59 million (\u20ac67 million at 31 December 2022).
Impact of related party transactions on the financial position at 31 December 2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2022
Name
Financial assets
Trade receivables
Other assets Other receivables
Cash and cash equivalents
Financial liabilities
Trade payables
Other liabilities
Subsidiaries
Address Software Srl
-
0
-
-
0
1
-
Kipoint SpA
-
1
0
-
1
2
0
Indabox
-
0
-
-
0
0
0
Associates
Anima Holding Group
-
0
-
-
-
7
-
Italia Camp Srl
-
0
-
-
-
(0)
-
Telma-Sapienza Scarl
-
(0)
-
-
-
-
-
Financit SpA
-
3
-
-
-
16
-
Eurizon Capital Real Asset SGR
-
-
-
-
-
1
-
Related parties external to the Group
MEF
11,907
384
17
1,991
4,176
4
1
Cassa Depositi e Prestiti Group
3,388
26
-
-
0
16
-
Enel Group
-
23
-
-
-
0
-
Eni Group
-
5
-
-
-
7
-
Equitalia Group
-
0
-
-
-
(0)
-
SACE Group
-
0
-
-
-
-
-
Leonardo Group
-
1
-
-
-
15
-
Montepaschi Group
276
1
-
0
397
(0)
-
Other related parties external to the Group
20
21
1
-
4
4
68
Provision for doubtful debts due from related parties external to the Group
(27)
(31)
(6)
(0)
-
-
-
Total
15,564
435
12
1,991
4,578
72
69
At 31 December 2023, net provisions for risks and charges used to cover probable liabilities arising from transactions with related parties external to the Group primarily attributable to trading relations amounted to about \u20ac0.1 million (\u20ac0.7 million at 31 December 2022).
Impact of related party transactions on profit or loss in FY 2023
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Revenue
Costs
Capital expenditure
Current expenses
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Revenue and income from Mail, Parcels and other
Revenue from Payments and Mobile
Revenue from Financial Services
Net revenue from insurance services
Finance income
Property, plant and equipment
Intangible assets
Cost of goods and services
Personnel expenses
Other operating costs
Expenses from financial activities
Impairment losses/(reversals of impairment losses) on debt instruments, receivables and other assets
Finance costs
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Subsidiaries
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Address Software Srl
0
-
-
-
-
-
-
1
(0)
-
-
-
-
Kipoint SpA
1
-
-
-
-
-
-
3
(0)
-
-
-
0
Associates
Anima Holding Group
2
-
-
-
-
-
-
8
-
-
-
-
-
Indabox
0
-
-
-
-
0
-
-
-
-
-
Italia Camp Srl
-
-
-
-
-
0
(0)
-
-
-
-
Other SDA Group associates
0
-
-
-
(0)
-
-
-
-
-
-
-
-
Financit SpA
30
-
-
-
-
-
-
-
(0)
-
-
-
-
sennder Italia Srl
0
-
-
-
-
-
-
122
(0)
-
-
-
0
Cronos Vita Assicurazioni SpA
0
-
-
-
-
-
-
-
(0)
-
-
-
-
Related parties external to the Group
MEF
817
46
503
-
15
-
-
1
-
1
-
(0)
0
Cassa Depositi e Prestiti Group
19
3
1,813
18
-
8
2
69
0
0
-
(0)
0
Enel Group
37
-
0
-
-
0
-
18
-
-
-
-
-
Eni Group
22
-
0
-
-
0
-
42
-
-
-
-
-
Equitalia Group
2
-
-
-
-
-
-
-
-
-
-
-
-
SACE Group
0
-
-
-
-
-
-
-
-
-
-
-
-
Leonardo Group
0
-
-
-
-
-
3
24
-
0
-
-
-
Montepaschi Group
17
-
1
-
-
-
-
0
-
0
7
-
0
Other related parties external to the Group
60
5
0
-
-
-
-
20
74
2
5
0
0
Total
1,007
54
2,317
18
15
\u00a0
8
6
\u00a0
308
74
3
12
(0)
1
Impact of related party transactions on profit or loss in FY 2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2022
Revenue
Costs
Capital expenditure
Current expenses
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Name
Revenue and income from Mail, Parcels and other
Revenue from Payments and Mobile
Revenue from Financial Services
Net revenue from insurance services
Finance income
Property, plant and equipment
Intangible assets
Cost of goods and services
Personnel expenses
Other operating costs
Expenses from financial activities
Impairment losses/(reversals of impairment losses) on debt instruments, receivables and other assets
Finance costs
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Subsidiaries
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Address Software Srl
-
-
-
-
-
-
-
1
-
-
-
-
-
Kipoint SpA
0
-
-
-
-
-
-
2
(0)
-
-
-
(0)
Associates
Anima Holding Group
2
-
-
-
-
-
-
29
-
-
-
-
-
Financit SpA
40
-
-
-
-
-
-
-
(0)
-
-
-
-
Eurizon Capital Real Asset SGR
-
-
-
-
-
-
-
2
-
-
-
-
-
Related parties external to the Group
MEF
730
48
385
-
1
0
-
1
-
3
3
1
1
Cassa Depositi e Prestiti Group
16
0
1,665
16
-
9
3
48
0
0
-
0
1
Enel Group
41
-
1
0
-
-
0
1
-
0
-
0
-
Eni Group
10
-
1
-
-
0
-
41
-
0
-
-
-
Equitalia Group
1
-
-
-
-
-
-
-
-
-
-
-
-
SACE Group
1
-
-
-
-
-
-
-
-
-
-
-
-
Leonardo Group
1
-
-
-
-
0
2
25
-
-
-
-
-
Montepaschi Group
16
-
1
-
-
-
-
0
-
-
1
-
0
Other related parties external to the Group
35
2
0
-
-
-
-
16
71
1
-
-
0
Total
893
51
2,052
16
1
\u00a0
9
6
\u00a0
167
71
5
4
1
2
The tables also show existing relations with subsidiaries that, due to their insignificance, are valued at equity and not consolidated on a line-by-line basis.
The nature of the Parent Company's principal related party transactions external to the Group is summarised below in order of relevance:
\u2022Amounts received from the MEF relate primarily to payment for carrying out the USO, the management of postal current accounts, as payment for delegated services, the franking of mail on credit, and for the integrated notification service.
\u2022Amounts received from CDP SpA primarily relate to payment for the collection of postal savings deposits.
\u2022Amounts received from the Enel Group primarily relate to payment for bulk mail shipments, unfranked mail. The costs incurred primarily relate to the supply of gas and electricity.
\u2022Amounts received from the ENI Group primarily regard payment for mail shipments. The costs incurred relate to the supply of gas and of fuel for motorcycles and vehicles.
\u2022Purchases from the Leonardo Group primarily relate to the supply, by Leonardo SpA, of equipment, maintenance and technical assistance for mechanised sorting equipment, and systems and IT assistance regarding the creation of document storage facilities, specialist consulting services and software maintenance, and the supply of software licences and of hardware.
\u2022Amounts received from the Monte dei Paschi di Siena group primarily regard payment for mail shipments.
Related party transactions have been carried out on terms equivalent to those prevailing in arm's length transactions between independent parties.
Impact of related party transactions or positions
The impact of related party transactions on the financial position, profit or loss and cash flows is shown in the following table:
Impact of related party transactions
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Total in financial statements
Total related parties
Impact (%)
Total in financial statements
Total related parties
Impact (%)
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Financial position
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
237,159
12,066
5.1
226,140
15,564
6.9
Trade receivables
2,407
681
28.3
2,182
435
19.9
Other receivables and assets
5,135
17
0.3
5,105
12
0.2
Cash and cash equivalents
4,211
874
20.8
4,983
1,991
40.0
Provisions for risks and charges
1,336
59
4.4
1,355
67
5.0
Financial liabilities
95,393
5,734
6.0
103,644
4,578
4.4
Trade payables
2,252
113
5.0
2,234
72
3.2
Other liabilities
4,343
90
2.1
4,003
69
1.7
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
Profit or loss
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Revenue from Mail, Parcels & other
3,746
1,007
26.9
3,651
893
24.5
Net revenue from Financial Services
5,229
2,305
44.1
4,938
2,048
41.5
Net revenue from insurance services
1,567
18
1.2
1,650
16
1.0
Revenue from Payments and Mobile services
1,586
54
3.4
1,147
51
4.4
Cost of goods and services
3,237
308
9.5
2,827
167
5.9
Personnel expenses
5,170
74
1.4
4,823
71
1.5
Other operating costs
275
3
1.2
508
5
1.0
Finance costs
119
1
0.5
126
2
1.6
Finance income
181
15
8.1
169
1
0.6
\u00a0
\u00a0
\u00a0
Cash flows
\u00a0
\u00a0
\u00a0
\u00a0
Net cash flow from /(for) operating activities
1,414
4,420
0
180
1,981
1
Net cash flow from /(for) investing activities
(994)
14
n.a.
(1,606)
(18)
0
Net cash flow from/(for) financing activities and shareholder transactions
(1,192)
(564)
0
(1,549)
(512)
n.a.
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Key management personnel
Key management personnel consist of Directors, members of the Board of Statutory Auditors and the Supervisory Board, managers at the first organisational level of the Parent Company and Poste Italiane's manager responsible for financial reporting. The related remuneration, gross of expenses and social security contributions, of such key management personnel as defined above is as follows:
Remuneration of key management personnel
\u00a0
\u00a0
Description(\u20ack)
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Remuneration to be paid in short/medium term
14,345
13,164
Post-employment benefits
580
571
Other benefits to be paid in longer term
(787)
1,871
Termination benefits
-
-
Share-based payments
4,936
2,469
\u00a0
Total
19,074
18,075
Remuneration and expenses of Statutory Auditors
\u00a0
\u00a0
\u00a0
Description(\u20ack)
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
\u00a0
Remuneration
1,439
1,275
Expenses
77
71
\u00a0
Total
\u00a0
1,516
1,346
The remuneration paid to members of the Parent Company's Supervisory Board for 2023 amounts to approximately \u20ac96 thousand. In determining the remuneration, the amounts paid to managers of Poste Italiane who are members of the Supervisory Board is not taken into account, as this remuneration is passed on to the employer.
No loans were granted to key management personnel during the period and, at 31 December 2023, Group companies do not report receivables in respect of loans granted to key management personnel.
Transactions with personnel pensions funds
The Parent Company and the subsidiaries that apply the National Collective Labour Agreement are members of the Fondoposte Pension Fund, the national supplementary pension fund for Poste Italiane personnel, established on 31 July 2002 as a non-profit entity. The Fund's officers and boards are the General Meeting of delegates, the Board of Directors, the Chairman and Deputy Chairman of the Board of Directors and Board of Statutory Auditors. Representation of members on the above boards is shared equally between the companies and the workers that are members of the Fund. The participation of members in the running of the Fund is guaranteed by the fact that they directly elect the delegates to send to the Shareholders' Meeting.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page686-cflshid_324354-tag141625": { "value": "
Key management personnel
Key management personnel consist of Directors, members of the Board of Statutory Auditors and the Supervisory Board, managers at the first organisational level of the Parent Company and Poste Italiane's manager responsible for financialreporting. The related remuneration, gross of expenses and social security contributions, of such key management personnel as defined above is as follows:
Remuneration of key management personnel
\u00a0
\u00a0
Description(\u20ack)
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
Remuneration to be paid in short/medium term
14,345
13,164
Post-employment benefits
580
571
Other benefits to be paid in longer term
(787)
1,871
Termination benefits
-
-
Share-based payments
4,936
2,469
\u00a0
Total
19,074
18,075
Remuneration and expenses of Statutory Auditors
\u00a0
\u00a0
\u00a0
Description(\u20ack)
\u00a0
Balance at 31.12.2023
Balance at 31.12.2022
\u00a0
\u00a0
Remuneration
1,439
1,275
Expenses
77
71
\u00a0
Total
\u00a0
1,516
1,346
The remuneration paid to members of the Parent Company's Supervisory Board for 2023 amounts to approximately \u20ac96 thousand. In determining the remuneration, the amounts paid to managers of Poste Italiane who are members of the Supervisory Board is not taken into account, as this remuneration is passed on to the employer.
No loans were granted to key management personnel during the period and, at 31 December 2023, Group companies do not report receivables in respect of loans granted to key management personnel.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page762-cflshid_340966-tag141626": { "value": "6. RISK MANAGEMENT
INTRODUCTION
The note \"Risk Management\" presents information on the Poste Italiane Group's exposure to risks of various kinds and includes a discussion of financial risks (pursuant to IFRS 7 - Financial Instruments: Disclosures), risks of an insurance nature (pursuant to the new IFRS17 - Insurance Contracts) as well as other risks for which it is deemed appropriate/necessary to provide information, also taking into account the recommendations published by ESMA and Consob280F281 during the year.
Qualitative information on the objectives, policies and processes adopted by the Group for the measurement and management of risks is provided in a single section, common to the Poste Italiane Group and Poste Italiane SpA, while the quantitative information required by the above-mentioned principles is provided in separate paragraphs within this note, unless otherwise indicated.
QUALITATIVE INFORMATION
Financial risk
Within the Parent Company, the management of lending and risk hedging operations relating to BancoPosta RFC and Poste Italiane are entrusted to BancoPosta Fondi SpA SGR, while finance activities, relating to treasury and medium/long-term funding operations, including on the capital market, as well as extraordinary and subsidised finance initiatives, are entrusted to the Administration, Finance and Control function.
Management of the Group's financial transactions and of the associated risks relates mainly to the operations of Poste Italiane SpA and the Poste Vita insurance group.
\u2022Poste Italiane SpA's financial transactions primarily relate to BancoPosta's operations, asset financing and liquidity investment.
BancoPosta RFC's operations consist in the active management of liquidity generated by postal current account deposits, carried out in the name of BancoPosta but subject to statutory restrictions, and collections and payments on behalf of third parties. The funds raised by private customers on postal current accounts must be used in euro area government securities and, for a portion not exceeding 50% of the funds raised, in other securities backed by the Italian government guarantee281F282, whilst deposits by Public Administration entities are deposited with the MEF. Moreover, within the 50% of deposits from private customers that can be invested in Italian government-guaranteed securities, BancoPosta RFC may use up to a maximum of 30% of that portion to purchase tax credits transferable pursuant to Law Decree no. 34/2020 (the so-called Relaunch Decree) and subsequent amendments and additions, or other tax credits transferable pursuant to current legislation282F283.
The investment profile is based on the constant monitoring of habits of current account holders and the use of a statistical/econometric model that forecasts the interest rates and maturities typical of postal current accounts. Accordingly, the portfolio composition aims to replicate the financial structure of postal current accounts by private customers. Management of the relationship between the structure of deposits and investments is handled through an appropriate Asset & Liability Management system. The above-mentioned model is thus the general reference for the
investments, in order to limit exposure to interest rate risk and liquidity risks. The prudential requirements introduced by the third revision of the Bank of Italy Circular 285/2013 require Bancoposta to apply the same regulations applicable to banks in terms of its controls, establishing that its operations are to be conducted in accordance with the Consolidated Law on Banking (TUB) and the Consolidated Law on Finance (TUF). BancoPosta RFC is, therefore, required to establish a system of internal controls in line with the provisions of Circular 285283F284, which, among other things, requires definition of a Risk Appetite Framework (RAF284F285), the containment of risks within the limits set by the RAF, protection of the value of assets and against losses, and identification of material transactions to be subject to prior examination by the risk control function.
BancoPosta's capital structure, which is subject to the prudential provisions introduced with the 3rd update of Bank of Italy Circular 285/2013, is particularly solid due to its CET1 ratio, which stood at 18.9% at 31 December 2023. The Leverage Ratio showed a year-end value of 3.2%, an increase compared to 31 December 2022, also as a result of the contraction in the assets of the Statement of financial position linked, mainly, to the decrease in loans.
By contrast, operations not covered by BancoPosta RFC, primarily relating to management of the Parent Company's own liquidity, are carried out in accordance with investment guidelines, which require the Company to invest in instruments such as government securities, high-quality corporate or bank bonds, term bank deposits and tax credits. Liquidity is also deposited in postal current accounts, subject to the same requirements applied to the investment of deposits by private current account holders.
\u2022Financial instruments held by companies in the Poste Vita Group relate primarily to investments designed to cover its contractual obligations to policyholders on traditional build-up life policies and unit-linked policies. For these types of products, therefore, the financial results recorded not only change the value of financial assets, but also have an impact on insurance liabilities. Other investments in financial instruments regard investment of the insurance companies' free capital.
As regards the life business, in particular for the parent company Poste Vita SpA, traditional Life policies, classified under Classes I and V, primarily include products whose benefits are revalued based on the return generated through the management of pools of financial assets, which are separately identifiable in accounting terms only, within the Company's assets (Separately Managed Accounts). In the case of policies sold in previous years, the Company has guaranteed a minimum return payable at maturity on such products (at 31 December 2023, this minimum return at maturity on existing policies ranged between 0% and 2%). Gains and losses from valuation are retroceded to policyholders and recognised in the statement of profit or loss and/or in a special reserve recognised in the Statement of Comprehensive Income, net of the over-hedging component. The recognition technique, referred to as mirroring, sets forth that the component to be passed on to policyholders is identified through the analysis of the income generated by the securities portfolio correlated to the Separately Managed Accounts (as further specified in Section 2.4 - Changes to accounting policies).
As outlined, the economic effect of financial risks on investments impacts both the pure investment component, i.e. the financial assets backing the insurance liabilities, and the insurance liability itself, as there is a financial component in the valuation. These effects may be partly passed on to the policyholders. In particular, this absorption is generally based on the level and structure of guarantees of minimum returns and the profit-sharing mechanisms of Separately Managed Accounts for the policyholder. The company determines the sustainability of minimum returns through periodic analyses using an internal financial-actuarial (Asset-Liability Management) model which simulates, for each separate portfolio, the change in value of the financial assets and the expected returns, as well as the relevant impacts
on insurance liabilities, under a \"central scenario\" (based on current financial and commercial assumptions) and under stress and other scenarios based on different sets of assumptions. This model makes it possible to manage the risks assumed by Poste Vita SpA on a quantitative basis, thereby fostering reduced earnings volatility and optimal allocation of financial resources.
Unit-linked products, relating to Class III insurance products, regard policies where the premium is invested in mutual investment funds. The Company constantly monitors the evolution of the risk profile of individual products.
The investment policies of the insurance companies Poste Assicura, Net Insurance and Net Insurance Life, which are characterised by businesses that do not envisage a direct correlation between the products placed and the financial investments, are aimed at preserving the Group's capital solidity, as outlined in the framework resolution approved by Poste Vita's Board of Directors on 5 December 2023. Regular analyses of the macroeconomic context, the market trends for the different asset classes and the relevant effects on integrated asset-liability management, are conducted, which is focussed on the optimal management to meet claims.
Within the above context, balanced financial management and monitoring of the main risk/return profiles are carried out and ensured by dedicated organisational structures that operate separately and independently. In addition, specific processes are in place governing the assumption and management of and control over financial risks, including the progressive introduction of appropriate information systems.
In this regard, on 16 February 2021, Poste Italiane SpA's Board of Directors adopted a revised version of the Guidelines for Internal Control and Risk Management System (SCIGR), which contains integrated guidelines for Poste Italiane SpA's Internal Control and Risk Management System.
From an organisational viewpoint, the model consists of:
\u2022the Control and Risk Committee, established in 2015 within the Board, has the task of supporting, through an appropriate investigative, proposal-making and advisory activity, the evaluations and decisions of the Board of Directors on the internal control and risk management system and on the approval of the relative periodic financial and non-financial reports;
\u2022the Financial and Insurance Services Committee, established on 19 March 2018 has the objective of overseeing the process of developing the products and services distributed by BancoPosta, in order to take a uniform, integrated view of the entire offering and to monitor the performance of the financial investments in which private customer deposits are invested;
\u2022an Investment Committee established at the Group's insurance company, Poste Vita SpA, which, based on analyses by the relevant functions, provides advice to senior management on the development, implementation and oversight of investment strategy;
\u2022appropriate functions established within the Parent Company and the subsidiaries providing financial and insurance services (BancoPosta Fondi SGR SpA and Poste Vita SpA) that perform Risk Measurement and Control activities, ensuring the organisational separation of risk assessment from risk management activities; the results of these activities are examined by the relevant advisory Committees, which are responsible for carrying out an integrated assessment of the main risk profiles;
\u2022the Investment Committee of the Net Insurance and Net Insurance Life insurance companies, which is entrusted with investment-related tasks, as well as the verification and monitoring of the companies' compliance with investment policies, guidelines and recommendations;
\u2022the Internal Control, Risk and Related Parties Committee of the Net Insurance and Net Insurance Life insurance companies, set up in order to strengthen the control and risk management system, assists the Board of Directors in evaluations and decisions relating to the internal control and risk management system.
In constructing the Risk Model used by BancoPosta RFC, account was also taken of the existing prudential supervisory standards for banks and the specific instructions for BancoPosta, published by the Bank of Italy on 27 May 2014 with the third revision of Circular 285 of 17 December 2013.
The financial risks to which the Poste Italiane Group as a whole is exposed are broken down into the types of risk indicated below. The sensitivity analyses performed on individual risks at the reporting date of this Annual Report, described at a theoretical level below, are common to all operating segments, unless otherwise indicated in the context of insurance operations. In fact, the application of the new accounting standard IFRS 17-Insurance Contracts has forced a revision of the way in which the insurance business is monitored and managed as regards the risks to which it is exposed, as well as the way in which sensitivity analyses are performed, in order to better represent the exposure to risks and the close correlation of the impacts of these on financial assets and insurance liabilities in a manner that is consistent with the accounting representation.
\u2022Market risk, defined as the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market prices. Market risk comprises three types of risk:
oFair value interest rate risk: the risk that the value of a financial instrument fluctuates as a result of movements in market interest rates. The analyses on this type of risk refers primarily to the effects of changes in interest rates on the price of fixed-rate financial instruments or variable-rate financial instruments converted to fixed rate via cash flow hedges and, to a lesser degree, the effects of changes in interest rates on the fixed components of variable-rate financial instruments or fixed-rate financial instruments converted to variable rate via fair value hedges. The impact of these effects is directly related to the financial instrument's duration. The sensitivity analysis to the interest rate risk of the positions concerned was calculated as a result of a hypothetical parallel shift in the market rate curve of +/- 100 bps, providing a baseline reference that can be used to appreciate potential changes in fair value in the event of interest rate fluctuations.
oPrice risk: the risk that the value of a financial instrument fluctuates as a result of market price movements, deriving from factors specific to the individual instrument or the issuer, and factors that influence all instruments traded on the market. Price risk relates to financial assets classified as measured at fair value through other comprehensive income (\"FVTOCI\") or measured at fair value through profit or loss (\"FVTPL\"), and certain derivative financial instruments where changes in value are recognised in profit or loss. The sensitivity analysis took into account positions potentially exposed to fluctuations in value. Financial statement balances have been subjected to a stress test, based on actual volatility during the year, considered to be representative of potential market movements. In the context of its insurance activities, the Group considered a sensitivity analysis represented by a parallel shift in the price curve of +/-25% to be more representative of its risk exposure, departing from what had been done in the past.
oForeign exchange risk: the risk that the value of a financial instrument fluctuates as a result of movements in exchange rates for currencies other than the functional currency. Sensitivity analysis of the items subject to foreign exchange risk was based on the most significant positions, assuming a stress scenario determined by the levels of exchange rate volatility applicable to each foreign currency position. The test applies an exchange rate movement based on volatility during the year, which was considered to be representative of potential market movements.
\u2022Spread risk or country risk: the risk relates to the potential fall in the value of bonds held, following a deterioration in the creditworthiness of issuers. This is due to the importance that the impact of the spread of returns on government securities had on the fair value of euro zone government and corporate securities, reflecting the market's perception of the credit rating of issuers. The value of the portfolio of bonds issued or guaranteed by the Italian government is
much more sensitive to the credit risk associated with the Italian Republic than to changes in so-called risk-free interest rates. This is due to the fact that changes in credit spreads are not hedged and regard the entire securities portfolio, meaning both the fixed and variable rate components. In this latter case, in fact, fair value derivatives, used to convert variable rate instruments, hedge only the risk-free interest rate risk and not credit risk. This means that a change in the credit spread has an equal impact on both fixed and variable instruments. The sensitivity to the spread has been calculated by applying a shift of +/- 100 bps to the yield curve for Italian government bonds. For insurance activities, since the portfolio is also diversified over securities belonging to the corporate sector, stresses are applied and evaluated separately between the purely government and private issue portfolios. Furthermore, in assessing the actual risk exposure, the Group considered only a worst-case scenario of stress conditions, i.e. a parallel shift of the curve of +100 bps, to be more significant in terms of potential impact on results;
\u2022Credit risk: this is the risk of default of one of the counterparties to which there is an exposure, with the exception of equity instruments and units of mutual funds. For more detailed information on the inputs, assumptions and estimation techniques used to calculate Expected Credit Losses (ECL), please see Section \"2.6 - Use of estimates - Impairment and stage allocation for financial instruments\".
\u2022Liquidity risk; this is the risk that an entity may have difficulties in raising sufficient funds, at market conditions, to meet its obligations deriving from financial instruments. In order to minimise this risk, the Poste Italiane Group applies a financial policy based on diversification of the various forms of short-term and long-term borrowings and counterparties; availability of relevant credit lines in terms of amounts and the number of banks; gradual and consistent distribution of the maturities of medium/long-term borrowings; and use of dedicated analytical models to monitor the maturities of assets and liabilities.
\u2022Cash flow interest rate risk: this is defined as the uncertainty related to the generation of future cash flows, due to interest rate fluctuations. Such risk may arise from the mismatch \u2013 in terms of interest rate, interest rate resets and maturities \u2013 of financial assets and liabilities until their contractual maturity and/or expected maturity (banking book), with effects in terms of interest spreads and, as such, an impact on future results. The performed analysis refers to the uncertainty over future cash flows generated by variable-rate instruments and variable-rate instruments created through fair value hedges following fluctuations in market interest rates. Sensitivity to cash flow interest rate risk relating to these instruments is calculated by assuming a parallel shift in the yield curve of +/- 100 bps.
\u2022Cash flow inflation rate risk: this is defined as the uncertainty related to the generation of future cash flows, due to fluctuations in inflation rates recorded on the market.
Insurance risks
This type of risk emerges as a consequence of the placement, by insurance companies belonging to the Group, of products that fall under the definition of insurance contracts. These contracts have conditions, such as technical bases adopted, premium calculation, lapse conditions, etc., which bring out risks typical of the insurance business.
In order to combine strategic and business objectives with those of profitability and quality of the risks assumed, as well as mitigating the exposure to said typical risks, at the underwriting phase, the Group has defined an underwriting policy which provides for the following:
\u2022the development of products consistent with the needs and characteristics of the various customer segments;
\u2022the assumption of risks for the management of which there are adequate supporting skills and resources;
\u2022the assumption of risks consistent with the Risk Strategy and Risk Appetite;
\u2022the elimination or non-renewal, where possible, of \"accepted\" risks that are not consistent with the Risk Appetite Framework and/or that imply exceeding the limits established by the specific guidelines of the Group;
\u2022the underwriting of risks that ensure adequate mitigation techniques, in particular consistency between reinsurance treaties underwritten, product characteristics (e.g. guarantees covered, contract duration) and portfolio mix;
\u2022the adequacy of procedures and control systems to ensure the completeness, relevance and accuracy of the accounting and statistical data used for risk pricing/analysis purposes;
\u2022the evaluation, when designing a new product and/or a new commercial initiative, of the following aspects:
oadequate reinsurance structures;
oassumption limits;
ocontractual clauses (possibility of splitting the premium, possibility of tacit renewal, withdrawal in the event of a claim, etc.);
oexpenses (for the acquisition, management and administration of contracts including claims settlement expenses, etc.);
ochanges (in terms of risk and concentration) to the portfolio mix that the issuance of the new product may entail;
oassessment of the impact of non-payment of premiums (e.g. impossibility of recovering expenses and commissions) with relative repercussions on solvency.
In the assumption of risks, the Group must therefore undertake to guarantee the sufficiency of the premiums collected with respect to the future commitments made to policyholders and the costs of managing and acquiring contracts, developing the skills and professionalism of the parties involved in product definition, assumption of risks and, more generally, of all parties involved in the underwriting process.
The Group also guarantees ever-increasing quality standards in the management of underwriting activities in order to avoid reputational losses and anti-selection phenomena.
The underwriting policy is aimed at strengthening the Group's market position, increasing its share in the various insurance lines in which it operates by developing a profitable risk portfolio.
As a result of the assumption of risks typical of the insurance business, types of exposures emerge that are significant for the Group and for which specific monitoring and containment activities need to be implemented. Specifically:
\u2022Lapse risk: insurance contracts may theoretically contain implicit options such as lapse options, guaranteed minimum return options and/or annuity conversion options. These options give the policyholder the right or the ability to obtain profits or changes in the relationship that give rise to a risk borne by the company, assuming a risk other than the insurance risk associated with taking out the contract. In the specific case of the Poste Italiane Group, for almost all the products in its portfolio, no penalties are envisaged in the event of lapse by the policyholder, so that this risk becomes significant in the event of mass lapses, which cannot be foreseen and are concentrated in specific, excessively short time periods that would not allow for easy management of potential redemptions in the portfolio. This would entail a significant monetary outlay for the companies belonging to the Group, which would find themselves in the position of having to dispose of assets to cover their liabilities, with the possible realisation of potential capital losses in the event of unfavourable market situations, as well as to use their cash and cash equivalents to cover the contractually guaranteed minimum levels. It is stressed that, considering the historical trend observed to date, the probability of this hypothesis occurring is considered remote (lapse rate for 2023 of approximately 4.4%), and furthermore, any adverse event would be covered by specific reinsurance contracts to cover massive lapse phenomena. The aforementioned phenomenon has a greater impact on the portfolios associated with the Separately Managed Accounts, for which any devaluation of securities would entail a loss in the current year and a carry-over effect on future returns, resulting in a significant reduction that could compromise the sound and prudent management of the company, as well as the dynamics of short- and medium-term funding. In the current context of economic uncertainty, an increase in the rate at which customers are exercising the policy lapse option can be observed in the Italian market. This phenomenon in the policy portfolio of the subsidiary Poste Vita remains well below the level observed in the market; however, the characteristics of Multi-class products placed in recent years, which make provision for a gradual transfer of
investments to the target unit-linked unit chosen by the customer, will result in a gradual increase in the stock of reserves pertaining to Class III products, which have historically shown a higher lapse rate than traditional build-up products. In light of this consideration, the risk related to lapse dynamics was considered significant by the Group, and a sensitivity analysis was performed on this risk equal to +10% instantaneous lapse rate of investment products. Considering the portfolio structure of the Group's companies, the decision was taken to apply only an incremental lapse stress scenario, i.e. only the worst-case scenario for the Poste Italiane Group;
\u2022Provisioning risk: referring to the risk that technical provisions are not sufficient to meet obligations to policyholders and injured parties. This insufficiency may be due to incorrect estimates by the company and/or changes in the general environment. This risk was considered significant for the P&C business managed by the Group, and a sensitivity analysis was performed to measure exposure under scenarios involving a +/-2% change in the loss ratio285F286.
\u2022Concentration risk: it is the risk that the business is excessively concentrated only on certain types of risk, products, customers and geographical areas and is therefore not adequately diversified. The Group assesses its exposure to this risk differentially between life and P&C business, evaluating the concentration based on the types of products placed.
The expected evolution of the portfolio and the different degree of risk of the products distributed required the adoption of a careful reinsurance policy, aimed at mitigating the risks to which the Group is exposed.
The reinsurance strategy adopted by Poste Assicura, based mainly on a non-proportional approach, makes it possible to:
\u2022mitigate risks, stabilising the variability of insurance business results and ensuring the technical balance of the portfolio;
\u2022mitigate risks arising from peak exposures or catastrophic events;
\u2022support the development of underwriting activities;
\u2022strengthen the Company's financial solidity.
In particular, reinsurance treaties with market operators of primary standing were entered into with non-proportional coverage in the form of \"excess loss\" (per risk and per event), separately for the various ministerial classes, to cover all Poste Assicura's risks (Retail and Employee Benefits) such as: risks included in the accident, health, fire, general liability and other property damage classes, and \"catastrophic risks\" such as earthquake or pandemic. For all risks relating to health guarantees (excluding those arising from the Credit Protection line), the reinsurance policy provides for an additional \"quota share\" treaty286F287. For some accident and credit protection risks, the risk-attaching, proportional treaties287F288, underwritten during the Company's start-up phase, remain in force.
Poste Assicura defines, on a case-by-case basis, the share of risk and the reinsurance structure deemed most appropriate in relation to the characteristics of the risk in question.
As regards companies in the Net Group, the expected growth of the portfolio and the different degrees of risk associated with the products distributed has required the company to adopt a highly prudent approach to reinsurance. The reinsurance strategy, based mainly on a proportional approach, but also on some non-proportional covers (especially for hail, suretyship and, to a lesser extent, other insurance lines), makes it possible to:
\u2022mitigate unfavourable technical trends and risks arising from peak exposures;
\u2022optimise reinsurance structures with a view to risk transfer and, if possible, also improve overall costs in economic and capital allocation terms;
\u2022make reinsurance structures more efficient from a management point of view;
\u2022mitigate risks, stabilising the variability of insurance business results;
\u2022stabilise the Solvency Ratio.
The Group assesses the exposure of the insurance business under stress scenarios in order to verify the solvency of companies even under adverse market conditions, also in line with the Solvency II regulatory framework.
Other non-significant insurance risks
From a technical point of view, one of the main risk factors characterising life underwriting risk is mortality risk, i.e. any risk related to the randomness of the life span of policyholders. Particular attention is paid in selling term life insurance policies, an area where procedures set underwriting limits to the capital and the age of the policyholder. In terms of \"pure life\" insured amounts the Group's insurance companies transfer their risks to reinsurers in keeping with the nature of the products sold and conservation levels adequate to the companies' capital structure.
For products with the capital sum subject to positive risk, such as term life insurance, this risk has negative consequences if the actual frequency of death exceeds the death probabilities realistically calculated (second order technical bases).
For products with the capital sum subject to negative risk, such as annuities, there are negative consequences when actual death frequencies are lower than the death probabilities realistically calculated (longevity risk).
That said, at 31 December 2023, mortality risk is considered to be of modest significance for the Group, considering the characteristics of the products offered, although this risk represents almost the entire life underwriting risk for Net Insurance Life SpA, considering the characteristics of the products offered. The only area where this risk is somewhat significant is term life insurance. With reference to these products, a comparison is periodically made between actual deaths and those predicted by the demographic bases adopted for pricing. On the basis of the above, for risk management purposes, it was decided not to subject mortality risk to sensitivity analysis, but to continuous monitoring over time in order to identify any changes in its significance in the context of the Poste Italiane Group.
The longevity risk is also small, being represented by a small share of insurance exposures to class IV (Long Term Care policies). In fact, for most Life insurance products the probability of annuity conversion is very close to zero, as historical experience shows that policyholders never use the option of annuity conversion. Pension products, in particular, still account for a limited share of insurance liabilities. In addition, for these products, the Group may, if certain conditions materialise, change the demographic base and the composition by sex used to calculate the annuity rates.
With regard to pricing risk, it is defined as the risk of incurring losses due to inappropriate pricing of the insurance products sold, for example: inappropriate choice of technical bases (demographic or financial), incorrect valuation of the options implicit in the products, and/or incorrect valuation of the parameters for calculating loadings for expenses. As the products placed by the Group mostly relate to insurance contracts issued by Poste Vita SpA, i.e. mixed and whole-life policies with mostly cash value build-up features, accumulating in accordance with a technical rate of zero, the technical basis adopted does not affect premium calculation (and/or the insured capital). In fact, there is nearly no pricing risk associated with the choice between technical bases in the Poste Italiane Group's portfolio, except for the term life insurance products discussed above.
Insurance risks in the P&C business instead include:
Underwriting risk: this is the risk arising from the commitments entered into by the underwriting of insurance contracts, taking into account all the risks covered and the procedures used in the conduct of business. This risk can be subdivided into provisioning risk, already mentioned in the previous paragraph, and pricing risk arising from the underwriting of
insurance contracts and associated with the events covered, the processes followed for underwriting and selecting risks, the processes followed for pricing, and the unfavourable trend in the actual loss ratio compared to the estimated one.
Early termination risks: risk linked to the possibility of the policyholder's early termination of the contract with the consequent request for reimbursement of the premium. This dynamic, unlike the one represented above for the lapse risk, does not depend directly on economic dynamics and the dynamic behaviour of policyholders, and is therefore less related to the current economic condition. The specific risk of early repayment is not assessed at the Poste Italiane Group level as a significant risk because:
\u2022it depends solely on the willingness to pay off insurance policies on mortgages and loans early, and does not depend directly on market income dynamics;
\u2022is limited to a portfolio considered non-material, as this business is residual for the Group.
Lastly, catastrophe risk, which represents the risk of loss resulting from extreme or exceptional events, including major epidemics covered by insurance, is considered as insignificant for the Group.
\u00a0
Operational risk
Operational risk refers to the risk of losses resulting from inadequate or failed internal processes, people and systems, or from external events. This category of risk includes losses resulting from fraud, human error, business disruption, systems failures, breach of contracts and natural disasters. Operational risk includes legal risk.
To protect against this form of risk, BancoPosta RFC has formalised a methodological and organisational framework to identify, measure and manage the operational risk related to its products/processes.
The framework, which is based on an integrated (qualitative and quantitative) measurement model, makes it possible to monitor and manage risk on an increasingly informed basis.
In 2023, activities continued to refine the operational risk management framework, with the aim of making the process of recording operational losses, monitoring and reporting more efficient and mitigating such risks by cross-functional working groups. Support has also been provided to the specialist units and the owner of the process of analysing and assessing IT risk, in keeping with the approach adopted in 2022, and the monitoring of IT risk recovery plans was reinforced.
The activities carried out in 2023 also included assessments of the risk profile related to the assignment and outsourcing of BP RFC, the definition of the model for monitoring outsourcing risk, and ex-ante assessments of the risk profile related to the innovation of BP's offering and/or specific project initiatives.
At 31 December 2023, the risk map prepared in accordance with the aforementioned framework shows the type of operational risks BancoPosta RFC's products are exposed to. In particular:
Event type
Number of types
\u00a0
\u00a0
Internal fraud
28
External fraud
44
Employee practices and workplace safety
8
Customers, products and business practices
37
Damage caused by external events
4
Business disruption and system failure
8
Execution, delivery and process management
107
Total at 31 December 2023
236
For each type of mapped risk, the related sources of risk (internal losses, external losses, scenario analysis and risk indicators) have been recorded and classified in order to construct complete inputs for the integrated measurement model. Systematic measurement of the mapped risks has enabled the prioritization of mitigation initiatives and the attribution of responsibilities in order to contain any future impact.
The insurance companies in the Group have also drawn up and finalised their own framework for identifying, assessing and managing operational risks. The adopted approach reflects the specific nature of the processes and operational risk events typical of an insurance company. The process of assessing operational risk exposure is carried out in keeping with the related solvency requirements, and involves both qualitative and quantitative analysis, conducted through a structured process for identifying internal losses and assessing potential risks in terms of frequency, impact and mitigation. The exposure to risks is, on the whole, in line with the previous year, and the main types of operating losses are related to customer litigation expenses.
Energy business risks
In the energy business, the subsidiary PostePay is exposed to the following risks, which were appropriately mitigated at the balance sheet date:
\u2022Price risk: this is the risk generated by any difference in price levels between the selling and buying position, managed through physical purchases of commodities at a fixed price, for which the Company has availed itself of the own use exemption;
\u2022Volume risk: generated by the difference between the actual consumption of the sales portfolio and the notional initially planned, managed and supplied. The risk is managed through careful forecasting of sales volumes and pricing of the risks themselves;
\u2022Counterparty risk: defined as the risk arising from a supplier's failure to fulfil its contractual obligations to supply the physical commodity. This risk is managed through a process of assessing the creditworthiness of counterparties;
\u2022Credit risk: defined as the risk arising from a customer's failure to fulfil its payment obligations. This risk is managed through input credit check processes (ex-ante assessment of creditworthiness), credit management and recovery.
For the proper management of the above-mentioned risks, a special governance and monitoring structure has been established within the subsidiary PostePay. The management and operational process of applying the governance principles requires that each risk subject to assessment is monitored using Key Risk Indicators. Verification of the extent of these risks and the effectiveness of any mitigation actions taken is entrusted to a managerial and advisory committee, the Control and Risk Operating Committee dedicated to the energy business.
Reputational risk
The main element of reputational risk to which the Group is, by its nature, exposed is linked to market performance and primarily associated with the placement of postal savings products and investment products issued by third-party entities (bonds, certificates and real estate funds) or by Group companies (insurance policies issued by the subsidiary, Poste Vita SpA, and mutual funds managed by BancoPosta Fondi SpA SGR).
Climate change risks
The Poste Italiane Group is aware of the relevance in terms of its widespread presence within the territory in which it operates and the risks to which it is exposed. In an attempt to counter these risks, considering the potential economic impacts of climate change risks, the Group:
\u2022aims to reduce its environmental impact and contribute to the low-carbon transition of the country's economy; as well as
\u2022adopts a responsible approach in carrying out its activities.
For the proper management of environmental issues, a Sustainability Committee has been set up to assist the Board of Directors, which approves the sustainability guidelines and strategies, supporting it in evaluating and deciding on environmental, social and governance factors.
The Poste Italiane Group's approach to climate risk is reported extensively in the specific section of the Non-Financial Statement within the Report on Operations on issues relating to the management of risks and opportunities related to climate change, to which reference should be made for a full discussion, as well as in Section 2.7 - Climate change and macroeconomic environment of these Annual Accounts.
QUANTITATIVE INFORMATION - POSTE ITALIANE GROUP
As defined in the introduction, quantitative information on exposure to risks of various kinds is provided separately by operating segment.
FINANCIAL ACTIVITIES
Fair value interest rate risk
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Risk exposure
Risk exposure
Equity reserves before taxation
Description(\u20acm)
Nominal
Fair value
Nominal
Fair value
+100bps
-100bps
\u00a0
Financial assets
Financial assets at FVTOCI
37,521
33,190
34,892
33,100
(1,045)
1,069
Derivative financial instruments
1,564
350
-
-
-
-
\u00a0
Financial liabilities
Derivative financial instruments
2,968
(96)
-
-
-
-
Total
42,053
33,444
34,892
33,100
(1,045)
1,069
Financial assets at fair value through other comprehensive income that are relevant to the risk in question relate to fixed income government bonds held primarily by BancoPosta RFC with a total fair value of \u20ac33,100 million.
At 31 December 2023, with reference to the interest rate risk exposure determined by the average financial duration of the portfolios288F289, the duration of BancoPosta's overall investments went from 5.01 to 5.38.
Price risk
Financial Activities-Price risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Description(\u20acm)
Risk exposure
Risk exposure
Profit/(Loss) before tax
+ Vol
- Vol
\u00a0
\u00a0
Financial assets
Financial assets at FVTPL
40
26
4
(4)
Derivative financial instruments
(4)
(3)
(3)
3
Total
36
24
1
(1)
Financial assets at fair value through profit or loss exposed to price risk relate to shares held by BancoPosta RFC, totalling \u20ac26 million consisting of Visa Incorporated preference shares. For the purpose of the sensitivity analysis, the equities are matched with the corresponding amount of the Class A shares, considering the volatility of the shares listed on the NYSE.
In the area of Derivative Financial Instruments, price risk mainly relates to the forward sale contract of 95,000 Visa Incorporated ordinary shares entered into by the Parent Company.
Foreign exchange risk
Financial Activities-Currency risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Description(\u20acm)
Position in USD
Position in Euro
Position in USD
Position in Euro
Profit/(Loss) before tax
\u00a0
Notional
Notional
Notional
Notional
+ Vol 260 days
- Vol 260 days
Financial assets
Financial assets at FVTPL
42
40
29
26
2
(2)
Derivative financial instruments
(4)
(4)
(3)
(3)
(2)
2
Total
38
36
26
24
0
(0)
At 31 December 2023, the financial assets exposed to the risk in question refer to an equity investment held by BancoPosta RFC in Visa (\u20ac26 million), as well as to a derivative contract on the ordinary shares of Visa Incorporated entered into by the Parent Company (negative fair value of \u20ac3 million at 31 December 2023).
Spread risk
The financial year 2023 was characterised by a reduction in yields on Italian government bonds (the 10-year BTP fell from 4.72% to 3.7%), which brought the BTP-Bund spread to 168 basis points compared to 214 last year. These movements led to an increase in the price of securities.
The following is the result of the analysis of the sensitivity289F290 to spread risk carried out at 31 December 2023, limited to the financial assets subject to the risk in question in the context of financial activities:
31 December 2022
31 December 2023
Risk exposure
Risk exposure
Equity reserves before taxation
Description(\u20acm)
Nominal
Fair value
Nominal
Fair value
+100bps
-100bps
Financial assets
\u00a0
Financial assets at FVTOCI
37,521
33,190
34,892
33,100
(2,995)
3,510
Financial assets at FVTPL
-
-
-
-
-
-
Derivative financial instruments
1,564
350
-
-
-
-
Financial liabilities
Derivative financial instruments
2,968
(96)
-
-
-
-
Total
42,053
33,444
34,892
33,100
(2,995)
3,510
The portfolio of Financial assets at fair value through other comprehensive income held almost entirely by BancoPosta RFC experienced a generally positive change in fair value of around \u20ac2 billion during the period, almost entirely recognised in consolidated equity for the portion of unhedged securities and the spread risk component (not hedged).
For the purposes of full disclosure, a movement in the spread would have no accounting effect on financial assets measured at amortised cost, but would only impact unrealised gains and losses. In other words, fixed income instruments measured at amortised cost attributable entirely to BancoPosta, which at 31 December 2023 amounted to \u20ac30,398 million (nominal value of \u20ac30,877 million) and have a fair value of \u20ac28,318 million, would be reduced in fair value by approximately \u20ac2.7 billion following an increase in the spread of 100 bps, with the change not reflected in the accounts.
Movements in the spread have no impact on BancoPosta RFC's ability to meet its capital requirements, as the fair value reserves are not included in the computation of own funds for supervisory purposes.
Credit risk
Information on credit risk exposure is presented in the following section only for financial assets other than trade and other receivables and assets subject to impairment provisions, for which information is provided in Note A8 - Trade receivables and Note A9 - Other receivables and assets.
Exposure to credit risk
The following table shows the credit risk exposure of Financial assets related to the financial segment for which the General impairment model is used for the application of the impairment provisions. The analysis shows the exposure by financial asset class by stages. The amounts refer to the gross carrying amount (amortised cost before ECL), unless otherwise indicated, and do not take into account guarantees or other credit enhancements.
Financial Activities - Credit Risk - Rating
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
from AAA to AA-
from A+ to BBB-
from BB+ to C
Not rated
Hedge accounting effects
Total
Stage 1
Stage 2
Stage 1
Stage 2
Stage 1
Stage 2
2023
\u00a0
Financial assets at amortised cost
\u00a0
\u00a0
\u00a0
Gross carrying amount
-
-
44,289
-
-
-
\u00a0
\u00a0
44,289
Provision to cover expected losses
-
-
(23)
-
-
-
\u00a0
\u00a0
(23)
Total amortised cost at 31 December 2023
-
-
44,266
-
-
-
351
(1,944)
42,673
\u00a0
Financial assets at FVTOCI
\u00a0
Gross carrying amount
-
-
35,544
-
-
-
\u00a0
\u00a0
35,544
Provision to cover expected losses - OCI
-
-
(19)
-
-
-
\u00a0
\u00a0
(19)
Carrying amount - Fair value at 31 December 2023
-
-
33,100
-
-
-
\u00a0
\u00a0
33,100
2022
Financial assets at amortised cost
Gross carrying amount
195
-
45,953
-
-
-
\u00a0
\u00a0
46,149
Provision to cover expected losses
-
-
(19)
-
-
-
\u00a0
\u00a0
(19)
Total amortised cost at 31 December 2022
195
-
45,935
-
-
-
486
(2,714)
43,902
Financial assets at FVTOCI
\u00a0
Gross carrying amount
-
-
38,981
-
-
-
\u00a0
\u00a0
38,981
Provision to cover expected losses - OCI
-
-
(16)
-
-
-
\u00a0
\u00a0
(16)
Carrying amount - Fair value at 31 December 2022
-
-
33,190
-
-
-
\u00a0
\u00a0
33,190
Financial assets at amortised cost, relevant to the risk in question, refer only to Bancoposta RFC's assets and concern fixed income instrument with a gross carrying amount of \u20ac44,289 million, decreased by a total of \u20ac1,944 million to take into account the effects of fair value hedges and approximately \u20ac23 million of the related impairment provision.
Financial Assets at fair value through other comprehensive income that are relevant to the risk in question refer exclusively to fixed income instruments held by companies belonging to the financial segment.
The following table shows the counterparty concentration of credit risk by financial asset class.
Financial Activities - Credit risk - Credit risk concentration
\u00a0
\u00a0
Description
(\u20acm)
\u00a0
31.12.2023
31.12.2022
\u00a0
Gross carrying amount
Provision to cover expected losses
Gross carrying amount
Provision to cover expected losses
Financial assets at amortised cost
44,289
(23)
46,149
(19)
Sovereign
38,405
(21)
39,327
(17)
Corporate
4,937
(2)
5,354
(1)
Banking
946
-
1,468
(0)
Financial assets at FVTOCI
35,544
(19)
38,980
(16)
Sovereign
35,544
(19)
38,980
(16)
Corporate
-
-
-
-
Banking
-
-
-
-
Total
\u00a0
79,833
(42)
85,129
(35)
Collateral held and other credit enhancements
In order to mitigate credit risk, the Poste Italiane Group adopts credit and counterparty risk mitigation tools in its financial activities. In particular, as regards BancoPosta RFC, the counterparty risk associated with hedging derivatives and repurchase agreements is mitigated by entering into a master netting agreement and requiring collateral in the form of cash or government bonds; with reference to credit risk, in addition, there are safeguards such as government guarantees on securities.
At 31 December 2023, the Group does not hold financial instruments secured by guarantees or other risk mitigation instruments for which no loss provisions have been made (except for the temporary use of liquidity in repurchase agreements).
In the context of financial activities, the main types of credit risk mitigation instruments are detailed below.
Fixed income instruments
Debt instruments secured by guarantees or other credit risk mitigation instruments are bonds issued by CDP SpA guaranteed by the Italian State and subscribed by BancoPosta RFC, amounting to a nominal value of \u20ac3,000 million at 31 December 2023. These are recognised as financial assets measured at amortised cost and, in determining the expected credit losses, account was taken of the PD of the Italian Republic.
Derivative financial instruments and repurchase agreements
In order to limit the counterparty risk exposure, BancoPosta RFC has concluded standard ISDA master agreements (with attached CSA) and GMRAs which govern the collateralisation of derivative transactions and repurchase agreements, respectively.
In addition, in order to mitigate counterparty risk and gain easier access to the market, from December 2017, BancoPosta RFC has entered into repurchase agreements with the Central Counterparty, the Cassa di Compensazione e Garanzia. As of 2021, certain derivatives entered into by Bancoposta RFC through bilateral contracts will be routed to a Qualified Central Counterparty for centralised clearing through the services provided by a clearing broker.
The calculation of positions in derivatives and repurchase agreements and the related risk mitigation instruments are illustrated in \"Note 13 - Additional information - Offsetting financial assets and liabilities\", to which reference should be made.
ECL measurement
The following tables show, for Financial assets belonging to the financial segment, the reconciliation between the opening and closing balances of the ECL provisions required by IFRS 9.
Financial Activities - Credit risk - Details of the provision to cover expected losses on financial instruments
Description (\u20acm)
Financial assets at amortised cost
\u00a0
Financial assets at FVOCI
Stage 1
Total
\u00a0
Stage 1
Total
Balance at 1 January 2023
19
19
16
16
\u00a0
\u00a0
Impairment of securities / receivables held at the beginning of the period
3
3
3
3
Reversal of securities / receivables held at the beginning of the period
(0)
(0)
(1)
(1)
Impairment of securities / receivables purchased/paid in the period
2
2
2
2
Reversal for write-off
-
-
-
-
Reversal due to sale / collection
(0)
(0)
(2)
(2)
Balance at 31 December 2023
23
23
\u00a0
19
19
At 31 December 2023, estimated expected losses on Financial assets at amortised cost amount to approximately \u20ac23 million; the provision increased by roughly \u20ac5 million compared to 31 December 2022. Of the grand total, \u20ac18 million related to expected losses calculated on fixed income instruments (\u20ac13 million at 31 December 2022).
At 31 December 2023, estimated expected losses on Financial assets at fair value through other comprehensive income amount to approximately \u20ac19 million. This provision, which refers entirely to expected losses calculated on fixed income instruments in the portfolio, increased by approximately \u20ac3 million compared to 31 December 2022.
Liquidity risk
The following tables compare financial liabilities and assets belonging to the financial segment and outstanding at 31 December 2023.
Financial Activities - Liquidity risk - Liabilities
\u00a0\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial liabilities
37,391
19,431
26,290
83,112
\u00a0
45,274
21,080
26,967
93,321
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Trade payables
73
-
-
73
\u00a0
81
-
-
81
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Other liabilities
234
1,756
0
1,990
\u00a0
86
1,738
-
1,824
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total Liabilities
37,697
21,187
26,290
85,174
\u00a0
45,441
22,818
26,967
95,226
In the presentation of financial liabilities, the expected cash outflows at the date of the financial statements, are broken down by maturity, while the payables for postal current account deposits are reported on the basis of the estimates made with a statistic/econometric model. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2023.
Financial Activities - Liquidity risk - Assets
\u00a0\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
19,866
19,155
76,154
115,175
24,336
19,317
80,653
124,306
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Trade receivables
588
-
-
588
375
-
-
375
\u00a0
\u00a0
\u00a0
\u00a0
Other receivables and assets
603
1,752
0
2,356
571
1,738
0
2,309
\u00a0
\u00a0
\u00a0
\u00a0
Tax credits Law no. 77/2020
1,701
4,905
2,241
8,847
1,506
5,267
2,972
9,746
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash and deposits attributable to BancoPosta
4,671
-
-
4,671
\u00a0
5,848
-
-
5,848
Cash and cash equivalents (*)
940
-
-
940
2,018
-
-
2,018
Total Assets
28,368
25,812
78,396
132,576
\u00a0
34,654
26,322
83,626
144,602
(*) shown gross of liquidity elimination
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable. Investments include financial instruments held by BancoPosta RFC and, to a residual extent, the company BancoPosta Fondi SpA sgr, shown on the basis of expected cash flows, consisting of principal and interest paid at the various payment dates.
In terms of BancoPosta RFC's specific operations, the liquidity risk regards current account deposits and prepaid cards290F291, the related investment of the deposits in Eurozone government securities and/or securities guaranteed by the Italian government, and the margins on derivative transactions as well as tax credits acquired in relation to the Decreto Rilancio no. 34/2020 (later converted with Law no. 77 of 17 July 2020). The potential risk derives from a mismatch between the maturities of investments in securities and those of liabilities, represented by current accounts where the funds are available on demand, thus compromising the ability to meet its obligations to current account holders. This potential mismatch between assets and liabilities is monitored via comparison of the maturity schedule for assets with the statistical model of the performance of current account deposits, in accordance with the various likely maturity schedules and assuming the progressive total withdrawal of deposits over a period of twenty-four years for retail customers, six years for business customers, ten years for PostePay cards and six years for Public Administration customers.
Lastly, for the proper evaluation of the liquidity risk attributable to BancoPosta RFC, it should be borne in mind that, unless they are restricted, investments in euro area government securities are highly liquid assets and can be used as collateral in interbank repurchase agreements to obtain short-term financing. This practice is normally adopted by BancoPosta.
In order to effectively manage the risk in question, there are also uncommitted credit facilities available for overnight operations by BancoPosta RFC, a three-year committed facility granted by Cassa Depositi e Prestiti for repurchase agreement transactions up to a maximum of \u20ac3 billion, undrawn at 31 December 2023 and, finally, for intraday interbank transactions, BancoPosta RFC can access an intraday advance from the Bank of Italy and secured by securities with a nominal value of \u20ac2,758 million, undrawn at 31 December 2023.
Additional liquidity needs can be met by resorting to credit lines stipulated by the Parent Company, for details of which please refer to the section on liquidity risk of postal and business activities.
Based on the above information, the existing credit lines and the loans are adequate to meet financing requirements expected to date.
Cash flow interest rate risk
\u00a0
\u00a0
31 December 2022
31 December 2023
Risk exposure
Risk exposure
Profit/(Loss) before tax
Description(\u20acm)
Nominal
Nominal
+100 bps
-100 bps
Financial assets
Financial assets at amortised cost
22,480
16,616
166
(166)
Financial assets at FVTOCI
10,541
8,905
89
(89)
Financial assets at FVTPL
-
-
-
-
Cash and deposits attributable to BancoPosta
1,888
762
8
(8)
Cash and cash equivalents
1,993
875
9
(9)
Financial liabilities
Loans
(3,996)
(3,996)
(40)
40
Other financial liabilities
(4,824)
(2,831)
(28)
28
Total
28,081
20,330
203
(203)
With respect to financial assets, cash flow interest rate risk primarily relates to:
\u2022Financial assets at amortised cost are represented by:
oreceivables at amortised cost totalling \u20ac1,223 million, reflecting collateral posted to secure liabilities arising in relation to financial derivatives and repurchase agreements held by BancoPosta RFC;
oinvestment by the Parent Company of the funds deriving from the current account deposits of Public Administration entities in the following: deposits with the MEF, with a nominal value of \u20ac8,937 million;
ofixed income government bonds held by BancoPosta RFC, for a nominal value of \u20ac6,456 million;
\u2022fixed income government bonds measured at fair value through other comprehensive income, almost entirely relating to Bancoposta RFC;
\u2022bank deposits held by BancoPosta RFC, including \u20ac873 million for the deposit held with the MEF on the operating current account known as the \"Buffer\" account.
In the area of Financial Liabilities, the risk in question relates to loans for repurchase agreements put in place by the Parent Company and guarantee deposits referable exclusively to the Parent Company.
Cash flow inflation risk
At 31 December 2023, cash flow inflation risk relates to inflation-linked government securities not subject to cash flow hedges or fair value hedges, held entirely by BancoPosta RFC for a nominal amount of \u20ac1,301 million (\u20ac1,022 million at 31 December 2022). The results of the sensitivity analyses performed on these securities do not show any significant effects on the pre-tax result.
INSURANCE ACTIVITIES
In relation to insurance liabilities, given the way in which they are constructed, it is impractical to identify which component of the unit of account is exposed to individual risks of a financial nature, also in relation to the concept of mutuality that governs the products issued by the Group (for the definition of \"mutuality\", please refer to what is presented in Section 2.4- Changes to accounting policies). For this reason, the Group's exposure to risks is represented by the totality of its insurance liabilities, which are therefore subjected to individual stresses, assessing their impacts as a whole.
Fair value interest rate risk
Insurance Activities - Fair value interest rate risk
Description(\u20acm)
Risk exposure
31 December 2022
31 December 2023
Nominal
Fair value
Nominal
Fair value
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
114,584
132,593
118,850
146,477
Financial assets at FVTOCI
110,471
96,501
114,434
105,847
Financial assets at FVTPL*
4,113
36,092
4,416
40,630
\u00a0
-
-
-
Insurance liabilities
\u00a0
141,380
-
155,338
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
* Financial assets at FVTPL include Mutual investment funds; the nominal value of said funds indicates the number of units held without taking into account the face value of the equity security.
In terms of financial assets recognised at fair value through other comprehensive income, the risk in question primarily relates to:
\u2022fixed income government bonds held by Poste Vita SpA, totalling \u20ac86,096 million; of this amount, \u20ac83,976 million is used to cover Class I and V policies linked to Separately Managed Accounts, and \u20ac2,120 million relates to the company's free capital;
\u2022non-government debt securities held by Poste Vita SpA, for a total fair value of \u20ac18,991 million, mainly used to meet obligations towards policyholders;
\u2022the remainder relates to approximately \u20ac760 million in investments in fixed income instruments, both government and corporate exposures made by the other companies in the segment.
Financial assets at fair value through profit or loss, relevant to the risk in question, are primarily used to cover commitments to policyholders. This relates to a portion of investments invested in fixed income instruments totalling \u20ac2,564 million, of which \u20ac2,556 million related to Poste Vita, and to the position in Other investments totalling \u20ac38,044 million consisting mainly of units in Class III funds and multi-asset funds linked to Separately Managed Accounts. Finally, the remaining \u20ac22 million is represented by the bond issued by Cassa Depositi e Prestiti as a private placement.
The insurance liabilities relevant to the risk in question relate to insurance contracts placed by companies belonging to the segment, totalling \u20ac155,338 million.
With respect to Class I and Class V policies sold by Poste Vita SpA, the duration of the matching assets went from 6.95 at 31 December 2022 to 6.27 at 31 December 2023, whilst the duration of the liabilities went from 7.50 to 7.45 (assessment of the duration was carried out using the new Coherent Duration method291F292). The financial instruments intended to cover the technical provisions for Class III policies have maturities that match those of the liabilities.
Below is the result of the sensitivity analysis performed at 31 December 2023 on the assets and liabilities exposed to the risk in question.
Insurance Activities - Stress Effects - Fair Value Interest Rate Risk
Description(\u20acm)
Change in value
+100bps
-100bps
Contractual service margin
(17)
(296)
Profit/(Loss) before tax
12
(56)
Equity reserves before taxation
(135
152
The results of the sensitivities292F293 show that:
\u2022As a result of the increase in the rate curve, there would be a negative change in the Contractual service margin of \u20ac17 million due to capital losses impacting the returns of products linked to the Separately Managed Accounts; an increase in the profit/(loss) before tax of \u20ac12 million arising from the higher release of the Contractual service margin determined by the increase in the coverage unit, only partly offset by the financial result293F294; and finally, a negative change in Equity reserves of \u20ac135 million generated by the decrease in the financial result of FVOCI securities not retroceded to policyholders.
\u2022as a result of the decrease in the interest rate curve, there would be a negative change in the Contractual service margin of \u20ac296 million due to a reduction in commissions on assets under management; a negative impact of \u20ac56 million on the profit/(loss) before tax due to the lower Contractual service margin as a result of the reduction in the coverage unit, partially offset by the financial result; and finally a positive change of \u20ac152 million in OCI Reserves generated mainly by the increase in the financial result of FVOCI securities not retroceded to policyholders.
Price risk
Insurance Activities - Price Risk
\u00a0
Description(\u20acm)
Risk exposure
31 December 2022
31 December 2023
\u00a0
\u00a0
\u00a0
Financial assets
36,156
40,785
Financial assets at FVTOCI
-
-
\u00a0
Financial assets at FVTPL*
36,156
40,785
\u00a0
\u00a0
Insurance liabilities
141,099
154,560
\u00a0
\u00a0
\u00a0
\u00a0
* Financial assets at FVTPL include Mutual investment funds; the nominal value of said funds indicates the number of units held without taking into account the face value of the equity security.
The Financial assets at fair value through profit or loss exposed to the risk in question refer to:
\u2022investments in units of mutual investment funds held by Poste Vita SpA, with a fair value of \u20ac40,300 million, including approximately \u20ac28,392 million used to cover Class I policies, and approximately \u20ac11,908 million used to cover Class III policies;
\u2022equity instruments held by Poste Vita SpA, totalling \u20ac485 million, used to cover Class I policies linked to Separately Managed Accounts and to cover Class III policies.
Insurance liabilities exposed to the risk in question refer to insurance contracts placed by Group companies with investments in assets exposed to the risk in question, i.e. Poste Vita SpA, totalling \u20ac154,560 million.
Below is the result of the sensitivity analysis performed at 31 December 2023 on the instruments exposed to the risk in question:
Insurance Activities- Stress Effects - Price Risk
Description(\u20acm)
Change in value
+25%
-25%
Contractual service margin
266
(282)
Profit/(Loss) before tax
28
(30)
Equity reserves before taxation
-
\u00a0
-
The results of the sensitivities show that:
\u2022in the scenario characterised by the increase in the value of market prices, the sensitivity results show an increase in the Contractual service margin of approximately \u20ac266 million as a result of the increase in commissions received on investments relating to the unit-linked portfolio, as well as an increase in profit/(loss) before tax of approximately \u20ac28 million as a result of the combined effect of a higher release of Contractual service margin (due to the increase in the stock) and a higher financial result for the portion not retroceded to policyholders;
\u2022the opposite scenario, i.e. characterised by a decrease in the value of market prices, would entail a decrease in the Contractual service margin of approximately \u20ac282 million as a result of the simultaneous decrease in commissions received on investments relating to the unit-linked portfolio, and a decrease in profit/(loss) before tax of approximately \u20ac30 million as a result of the combined effect of the lower release of Contractual service margin (due to the reduction in the stock) and lower financial result, for the portion not retroceded to policyholders.
Foreign exchange risk
Insurance Activities - Currency Risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Description(\u20acm)
Position in USD
Position in Euro
Position in USD
Position in Euro
Profit/(Loss) before tax
+ Vol 260 days
- Vol 260 days
Financial assets
Financial assets at FVTOCI
-
-
-
-
-
-
Financial assets at FVTPL
106
99
106
95
7
(7)
Total
106
99
106
95
7
(7)
In the insurance business, the Financial assets exposed to the risk in question refer exclusively to units in US dollar mutual funds held by the insurance company Poste Vita SpA. The company considers the exposure to currency risk in relation to the effects on insurance liabilities to be insignificant, as these positions are held in Separately Managed Accounts.
Government spread risk
Insurance Activities - Fair Value Government Spread Risk
Description(\u20acm)
Risk exposure
31 December 2022
31 December 2023
Nominal
Fair value
Nominal
Fair value
\u00a0
\u00a0
Financial assets
90,445
87,309
95,331
99,021
Financial assets at FVTOCI
89,303
77,726
94,007
86,663
\u00a0
\u00a0
\u00a0
Financial assets at FVTPL*
1,142
9,583
1,324
12,358
\u00a0
\u00a0
\u00a0
Derivative financial instruments
-
-
-
-
\u00a0
\u00a0
\u00a0
Insurance liabilities
\u00a0
141,380
\u00a0
155,338
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
* Financial assets at FVTPL include Mutual investment funds; the nominal value of said funds indicates the number of units held without taking into account the face value of the equity security.
In the period under review, the portfolio of Financial assets at fair value through other comprehensive income exposed to the risk in question, referring exclusively to fixed income government bonds, amounted to \u20ac86,663 million.
Financial assets at fair value through profit or loss exposed to the risk in question, amounting to a fair value of about \u20ac12,358 million, mainly refer to units of mutual funds held by Poste Vita SpA.
Insurance liabilities exposed to risk amount to approximately \u20ac155,338 million.
Insurance Activities - Fair Value Government Spread Risk
Description(\u20acm)
Change in value
+100bps
Contractual service margin
(95)
Profit/(Loss) before tax
13
Equity reserves before taxation
(92)
\u00a0
The results of the sensitivities294F295 show a negative change in the Contractual service margin of approximately \u20ac95 million due to capital losses impacting the returns of the underlying assets related to the portfolios of the Separately Managed Accounts; a positive effect on profit/(loss) before tax of \u20ac13 million, mainly attributable to the higher release of the Contractual service margin determined by the increase in the coverage unit, partially offset by the financial result; and, finally, a negative change in Equity reserves of \u20ac92 million, generated by the deterioration of the financial result of FVOCI instruments not retroceded to policyholders, which represent the majority of securities under stress.
Corporate spread risk
Insurance Activities - Fair Value Corporate Spread Risk
Description(\u20acm)
Risk exposure
31 December 2022
31 December 2023
Nominal
Fair value
Nominal
Fair value
\u00a0
\u00a0
Financial assets
25,267
54,853
24,830
59,800
Financial assets at FVTOCI
21,168
18,775
20,427
19,184
\u00a0
\u00a0
\u00a0
Financial assets at FVTPL*
4,100
36,079
4,403
40,616
\u00a0
\u00a0
\u00a0
Derivative financial instruments
-
-
-
-
\u00a0
\u00a0
\u00a0
Insurance liabilities
\u00a0
141,380
-
155,338
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
* Financial assets at FVTPL include Mutual investment funds; the nominal value of said funds indicates the number of units held without taking into account the face value of the equity security.
The portfolio of Financial assets at fair value through other comprehensive income exposed to this risk amounted to approximately \u20ac19,184 million, exclusively related to corporate debt security exposures.
Financial assets at fair value through profit or loss exposed to risk amounted to approximately \u20ac40,616 million, of which \u20ac38,004 million related to mutual funds held by Poste Vita SpA, \u20ac2,550 million to exposures in debt securities issued by corporate counterparties, and \u20ac22 million to bonds issued by Cassa Depositi e Prestiti.
Insurance liabilities exposed to risk amount to approximately \u20ac155,338 million.
Insurance Activities - Fair Value Corporate Spread Risk
Description(\u20acm)
Change in value
+100bps
Contractual service margin
(149)
Profit/(Loss) before tax
(18)
Equity reserves before taxation
(19)
The results of the sensitivities295F296, lead to a negative change in the Contractual service margin of approximately \u20ac149 million, due to capital losses impacting the returns of the underlying assets; a loss before tax of \u20ac18 million due to the reduction in the financial result and, finally, a negative change of \u20ac19 million in the Equity reserves, generated by the worsening of the financial result of the FVOCI securities not retroceded to policyholders.
Credit risk
Information on credit risk exposure is presented in the following section only for financial assets other than trade and other receivables and assets subject to impairment provisions, for which information is provided in Note A8 - Trade receivables and Note A9 - Other receivables and assets.
Exposure to credit risk
The following table presents an analysis of the risk exposure at 31 December 2023 of financial assets belonging to the insurance segment for which the General impairment model is used. The analysis shows the exposure by financial asset class by stages. The amounts refer to the gross carrying amount (amortised cost before ECL), unless otherwise indicated, and do not take into account guarantees or other credit enhancements.
Insurance Activities - Credit Risk - Rating
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
from AAA to AA-
\u00a0
from A+ to BBB-
from BB+ to C
\u00a0
Total
Stage 1
Stage 3
Stage 1
Stage 2
Stage 1
Stage 2
Stage 3
2023
\u00a0
Financial assets at amortised cost
\u00a0
Gross carrying amount
133
-
1,988
-
2
0
-
2,124
Provision to cover expected losses
(0)
-
(1)
-
(0)
(0)
-
(1)
Total amortised cost at 31 December 2023
\u00a0
133
-
1,987
-
2
0
-
2,123
Financial assets at FVTOCI
\u00a0
Gross carrying amount
13,486
-
95,735
46
20
2,640
124
112,051
Provision to cover expected losses - OCI
(1)
-
(44)
(0)
(0)
(8)
(2)
(55)
Carrying amount - Fair value at 31 December 2023
\u00a0
13,103
-
90,072
44
20
2,493
114
105,847
2022
Financial assets at amortised cost
\u00a0
Gross carrying amount
54
209
1,930
-
-
-
-
2,194
Provision to cover expected losses
-
(0)
(1)
-
-
-
-
(1)
Total amortised cost at 31 December 2022
\u00a0
54
209
1,929
-
-
-
-
2,193
2022
\u00a0
Financial assets at FVTOCI
\u00a0
Gross carrying amount
\u00a0
8,709
-
97,615
13
2,058
58
-
108,454
Provision to cover expected losses - OCI
(0)
-
(39)
(0)
(8)
(2)
-
(48)
Carrying amount - Fair value at 31 December 2022
\u00a0
7,650
-
86,973
12
1,815
51
-
96,501
Financial assets at amortised cost, relevant to the risk in question, refer exclusively to fixed income instruments held by companies belonging to the insurance segment with a gross carrying amount of \u20ac2,123 million, decreased by a total of \u20ac1 million to account for the related impairment provision in the Company's free assets.
Financial assets at fair value through other comprehensive income that are relevant to the risk in question refer for a gross carrying amount of \u20ac112,051 million exclusively to fixed income instruments.
The following table shows the counterparty concentration of credit risk by financial asset class. Amounts refer to the gross carrying amount. Of the provision to cover expected losses on financial instruments at fair value through other comprehensive income, an amount of approximately \u20ac53 million was retroceded to policyholders.
Insurance Activities - Credit risk - Credit risk concentration
\u00a0
\u00a0
Description
(\u20acm)
\u00a0
31.12.2023
31.12.2022
\u00a0
Gross carrying amount
Provision to cover expected losses
Gross carrying amount
Provision to cover expected losses
Financial assets at amortised cost
2,124
(1)
2,194
(1)
Sovereign
2,050
(1)
2,143
(1)
Corporate
64
(0)
42
(0)
Banking
9
(0)
9
(0)
Financial assets at FVTOCI
112,051
(55)
108,454
(48)
Sovereign
88,892
(38)
85,677
(32)
Corporate
16,270
(14)
14,933
(14)
Banking
6,889
(3)
7,844
(2)
Total
\u00a0
114,175
(56)
110,648
(49)
The following table presents information on the credit quality of net amounts due from reinsurers and the exposure of assets for outward reinsurance (totalling \u20ac233 million) and amounts due from policyholders, classified under insurance
liabilities and amounting to \u20ac155,338 million (of which \u20ac170 million related to the balance of amounts due from customers at 31 December 2023):
ECL measurement
The following tables show, for each class of financial instrument, the reconciliation between the opening and closing balances of the ECL provisions required by IFRS 9, relating exclusively to the free capital of the companies in the segment.
Insurance Activities - Credit risk - Details of the provision to cover expected losses on financial instruments
\u00a0
Description (\u20acm)
Financial assets at amortised cost
\u00a0
Financial assets at FVOCI
Stage 1
Stage 2
Stage 3
Total
\u00a0
Stage 1
Stage 2
Stage 3
Total
Balance at 1 January 2023
1
-
-
1
1
-
-
1
\u00a0
\u00a0
Impairment of securities / receivables held at the beginning of the period
0
0
0
0
0
0
0
0
0
Reversal of securities / receivables held at the beginning of the period
(0)
0
0
0
0
0
0
0
(0)
Impairment of securities / receivables purchased/paid in the period
0
0
0
0
0
0
0
0
0
Reversal for write-off
0
0
0
0
0
0
0
(0)
Reversal due to sale / collection
(0)
0
0
0
0
0
0
0
(0)
Balance at 31 December 2023
1
-
-
1
\u00a0
1
0
-
2
At 31 December 2023, estimated expected losses on financial instruments at amortised cost amount to approximately \u20ac1 million; the provision did not record any significant changes compared to 31 December 2022.
At the end of the reference period, the estimated expected losses on financial instruments measured at fair value through other comprehensive income amount to approximately \u20ac55 million, of which \u20ac53 million passed on to policyholders. This provision increased by approximately \u20ac7 million compared to 31 December 2022, mainly as a result of purchases made during the period.
Collateral held and other credit enhancements
In order to mitigate the exposure to credit risk, the Poste Vita insurance Group invests in, among other things, corporate bonds that are guaranteed in order to mitigate the overall exposure to credit risk.
At 31 December 2023, the insurance Group does not hold financial assets secured by guarantees or other credit risk mitigation instruments for which no loss coverage provisions have been made.
Within insurance activities, the main types of credit risk mitigation instruments relate to fixed income instruments held by insurance companies. In detail, debt securities backed by guarantees or other credit risk mitigation instruments are mainly represented by bonds held by the Poste Vita Group, with a nominal amount of \u20ac6,485 million at 31 December 2023. In these cases, the guarantee covers 100% of the nominal value of the securities. The guarantees securing these financial instruments are as follows:
-corporate bonds backed by personal guarantees provided by the parent company or another associate, amounting to a nominal value of \u20ac5,569 million;
-covered bonds backed by mortgages, primarily property mortgages, amounting to a nominal value of \u20ac179 million;
-bonds guaranteed by sovereign states, amounting to a nominal value of \u20ac737 million.
In the case of instruments backed by personal guarantees provided by a sovereign state or one or more companies, expected losses are calculated on the basis of the credit rating of the guarantor. With regard to covered bonds, the underlying guarantees were considered through the recognition of upgrades according to the type of guarantee.
Exposure to credit risk - insurance components
The following table presents an analysis of the risk exposure under review at 31 December 2023, by counterparty rating class, generated as a result of the placement of insurance and reinsurance contracts in place.
Insurance Activities - Credit Risk - Rating
\u00a0
\u00a0
\u00a0
Description
(\u20acm)
\u00a0
from AAA to AA-
from A+ to BBB-
from BB+ to C
Not rated
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
2023
\u00a0
Assets for outward reinsurance
\u00a0
\u00a0
\u00a0
\u00a0
233
- of which net Amounts due from reinsurers
-
-
-
-
-
\u00a0
Insurance liabilities
\u00a0
\u00a0
\u00a0
\u00a0
155,338
- of which due from policyholders
-
-
-
170
170
2022
Assets for outward reinsurance
\u00a0
\u00a0
\u00a0
\u00a0
44
- of which net Amounts due from reinsurers
1
0
(0)
(0)
0
\u00a0
Insurance liabilities
\u00a0
\u00a0
\u00a0
\u00a0
141,380
- of which due from policyholders
-
-
-
110
110
Assets for outward reinsurance that are relevant to the risk in question refer to the component of the item relating to the net exposure to reinsurers, which is included in the valuation. These receivables are not subject to impairment as the credit or debit balance is used to offset the payment or collection of reinsurance items. The reinsurance structure has very tight deadlines, annual at most, so the possibility of balances remaining unpaid for a period longer than 12 months is remote. Moreover, since these receivables are related to contracts falling under IFRS 17, they must not be impaired as required by IFRS 9. At 31 December 2023, the balance of these net receivables was nil, as the exposure to reinsurers was a liability at the balance sheet date.
The insurance liabilities that are taken into account in the valuation of this risk refer to the component relating to amounts due from policyholders. Amounts due from policyholders relate to contracts issued at the reporting date for which the customer has not yet paid the premium. As is the case for net amounts due from reinsurers, this type of receivable arises as a result of insurance contracts, and is therefore not subject to impairment as required by IFRS 9. In any case, the Group performs recoverability analyses of the receivable in question, and in fact a full write-down of the receivable is made if it is more than 6 months old.
Liquidity risk
The following tables compare the financial liabilities and assets belonging to the insurance segment and outstanding at 31 December 2023.
Insurance Activities - Liquidity Risk - Liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Within 12 months
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Between 4 and 5 years
Over 5 years
Total
\u00a0
2023
\u00a0
Flows from Poste Vita group's policies
10,574
9,053
8,543
8,523
9,930
175,196
221,818
\u00a0
Financial liabilities
59
-
-
-
-
-
59
\u00a0
Trade payables
41
-
-
-
-
-
41
\u00a0
Other liabilities
702
3
-
-
-
74
778
\u00a0
Total at 31 December 2023
11,375
9,056
8,543
8,523
9,930
175,270
222,697
\u00a0
2022
\u00a0
Flows from Poste Vita group's policies
14,494
10,384
8,984
8,098
7,885
171,345
221,191
\u00a0
Financial liabilities
38
1
1
-
-
-
40
Trade payables
35
-
-
-
-
-
35
\u00a0
Other liabilities
567
-
-
-
54
-
621
\u00a0
Total at 31 December 2022
15,135
10,385
8,986
8,098
7,939
171,345
221,887
In the presentation of financial liabilities, expected cash outflows are broken down by maturity. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2023. The commitments of the insurance companies of the Group are reflected in the item \"Flows from Poste Vita group's policies\".
Insurance Activities - Liquidity Risk - Assets
Description(\u20acm)
Within 12 months
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Between 4 and 5 years
Over 5 years
Total
\u00a0
2023
\u00a0
Financial assets
19,132
13,159
11,588
13,843
12,861
173,474
244,057
\u00a0
Trade receivables
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
2
\u00a0
Other receivables and assets
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0134
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02,280
2,414
Cash and cash equivalents (*)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03,561
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
3,561
\u00a0
Total at 31 December 2023
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a022,830
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a013,159
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a011,588
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a013,843
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a012,861
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0175,754
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0250,035
\u00a0
2022
\u00a0
Financial assets
16,690
12,345
12,378
10,867
12,564
165,710
230,554
Trade receivables
0
-
-
-
-
-
0
Other receivables and assets
223
-
-
-
2,321
-
2,544
Cash and cash equivalents (*)
2,732
-
-
-
-
-
2,732
\u00a0
Total at 31 December 2022
19,645
12,345
12,378
10,867
14,885
165,710
235,830
* Shown gross of liquidity elimination
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable. Investments include financial instruments held by the Group's insurance companies, shown on the basis of expected cash flows, consisting of principal and interest paid at the various payment dates.
The key point of note is the liquidity risk associated with the Class I and V policies issued by Poste Vita SpA. For said reason, for the purpose of analysis of the liquidity risk, for the policies issued by Poste Vita SpA, Asset/Liability Management (ALM) analyses are conducted to manage assets effectively in relation to its obligations to policyholders, and projections
of the effects deriving from financial market shocks (asset dynamics) and of the behaviour of policyholders (liability dynamics) are also drawn up.
At 31 December 2023, there were uncommitted credit lines for unsecured loans of \u20ac4 million, of which about \u20ac1 million was utilised.
Additional liquidity needs can be met by resorting to credit lines stipulated by the Parent Company, for details of which please refer to the section on liquidity risk of postal and business activities.
Based on the above information, the existing credit lines and the loans are adequate to meet financing requirements expected to date.
Cash flow interest rate risk
Insurance Activities - Cash flow interest rate risk
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Description(\u20acm)
Risk exposure
Risk exposure
Profit/(Loss) before tax
Nominal
Nominal
+100 bps
-100 bps
2023 effects
Financial assets
Financial assets at FVTOCI
4,341
3,332
2
(2)
Financial assets at FVTPL
94
112
-
-
Cash and cash equivalents
2,537
2,852
7
(7)
Total
6,971
6,296
9
(9)
With respect to Financial assets, cash flow interest rate risk concerns:
\u2022a portion of the securities portfolio held by Poste Vita SpA, with a total nominal value of \u20ac3,361 million, mainly relating to fixed income instruments;
\u2022a portion of the securities portfolio held by Poste Assicura SpA, with a total nominal value of \u20ac67 million;
\u2022a portion of the securities portfolio held by Net Insurance SpA and Net Insurance Life SpA, with a total nominal value of \u20ac16 million;
\u2022variable-rate bank deposits held by companies in the insurance segment.
With regard to insurance liabilities, the Group considers that the risk exposure does not entail a significant risk and, for this reason, deemed it inappropriate to stress.
Cash flow inflation risk
Insurance Activities - Cash flow inflation rate risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
\u00a0
31 December 2023
Description(\u20acm)
Risk exposure
Risk exposure
Profit/(Loss) before tax
Nominal
Carrying amount
Nominal
Carrying amount
+100bps
-100bps
\u00a0
\u00a0
\u00a0
Financial assets
\u00a0
\u00a0
Financial assets at amortised cost
72
89
72
91
0
(0)
\u00a0
Financial assets at FVTOCI
9,159
10,389
6,676
7,893
1
(1)
\u00a0
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
Total
9,232
10,478
6,748
7,984
1
(1)
At 31 December 2023, cash flow inflation risk relates to inflation-linked government securities not subject to cash flow hedges or fair value hedges. Of the total nominal value, securities totalling \u20ac6,701 million are held by Poste Vita SpA and securities totalling \u20ac41 million by Poste Assicura SpA.
With regard to insurance liabilities, the Group considers that the risk exposure does not entail a significant risk and, for this reason, deemed it inappropriate to stress.
Lapse risk
The sensitivity analysis at 31 December 2023 took into account insurance liabilities exposed to fluctuations in value and subjected to a variability test, calculated with reference to possible changes in the lapse risk (increase of 10%). Exposures to this risk are set out below:
Insurance Activities - Lapse Risk
Description(\u20acm)
31 December 2022
31 December 2023
Risk exposure
Risk exposure
Contractual service margin
Profit/(Loss) before tax
Equity reserves before taxation
Fair value
Fair value
+10%
+10%
+10%
Insurance liabilities
141,099
154,560
(390)
(7)
-
The sensitivity analysis shows that a possible 10% increase in the lapse rate would generate a negative change in the Contractual service margin of \u20ac390 million, mainly attributable to the reduction in the duration of the liabilities due to the higher outflows, and a negative change in the profit/(loss) before tax of \u20ac7 million, mainly attributable to the lower release of CSM resulting from the reduction in the stock.
The effects net of reinsurance mitigation are substantially in line with what is presented in the table since the existing cover is not activated in the event of a 10% increase in the lapse rate.
With regard to the investment in Cronos Vita, which is recognised in the balance sheet at its acquisition value, as defined by IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, please refer to paragraph A14 - Non-current assets and disposal groups held for sale.
Provisioning risk
The sensitivity analysis at 31 December 2023 took into account insurance liabilities exposed to fluctuations in value and subjected to a variability stress test, based on actual volatility during the year, calculated with reference to possible changes in the loss ratio (up/down by 2%). Below are the exposures and this risk both gross and net of the mitigation effect related to reinsurance:
Insurance Activities - Provisioning risk gross of reinsurance
Description(\u20acm)
31 December 2022
31 December 2023
Risk exposure
\u00a0
Risk exposure
Contractual service margin
Profit/(Loss) before tax
Equity reserves before taxation
Nominal
Fair value
Nominal
Fair value
+2%
-2%
+2%
-2%
+2%
-2%
Insurance liabilities
\u00a0
279
\u00a0
\u00a0
499
(2)
2
(2)
2
-
-
\u00a0
The sensitivity analysis shows that a possible 2% increase in the loss ratio would generate a reduction in the Contractual service margin of about \u20ac2 million and a reduction in the profit/(loss) before tax of about \u20ac2 million, attributable to the negative change in the loss component. The values net of reinsurance are in line with the gross values shown.
The sensitivity analysis for the opposite case, i.e. a possible decrease in the loss ratio of 2%, would generate an increase in the Contractual service margin before reinsurance of about \u20ac2 million, an increase in the profit/(loss) before tax of about \u20ac2 million, attributable to the recovery of the loss component, and a positive change in Equity of about \u20ac2 million, generated almost entirely by the increase in the profit/(loss) for the year. The values net of reinsurance are in line with the gross values shown.
Concentration risk
As regards the Life business, the products currently placed have fairly standardised characteristics and relatively low minimum guarantees for the majority of the portfolio that are not consolidated year by year. The geographical distribution of these products is homogeneous throughout the country as a result of the widespread distribution network. The Group's product portfolio is still highly concentrated in traditional build-up products. On the basis of these considerations, the risk of concentration of the Life business is medium.
Below is a representation of the concentration of life business at 31 December 2023 by product type, where it can be seen that the highest concentration of risks relates to build-up products (Separately Managed Accounts).
Insurance Activities - Concentration Risk - Life
Product type
31 December 2023
Products linked to Separately Managed Accounts
92%
Protection products
0%
Index/Unit-linked products
8%
With regard to P&C business, the products currently placed by the Group have fairly standardised characteristics. The geographical distribution of these products is homogeneous throughout the country as a result of the widespread distribution network. The product portfolio is mainly concentrated on health products (Line of business Medical Expenses and Income Protection). On the basis of these considerations, the risk of concentration of the P&C business is medium.
Below is a breakdown of gross inflows at 31 December 2023 by product type, which shows that the highest concentration of risks relates to products belonging to the \"modular\" line and the \"Welfare\" segment, the latter referring to collective policies taken out with corporate customers (Employee Benefits).
Insurance Activities - Concentration Risk - P&C
Product type
31 December 2023
Asset & Personal Protection & Modular Line
37%
Third-party networks
8%
Payment protection line
8%
Salary-backed loans
6%
Integration Life - P&C
3%
Welfare and other management
38%
Claims development
Below is information on the development of undiscounted claims, both in terms of cumulative amount paid at the date and in terms of ultimate cost values296F297, gross and net of reinsurance.
The claims development table shows the development of cumulative paid claims and ultimate cost per year of generation.
Insurance Activities - Claims Development Before Reinsurance
Claims/Times
Cumulative paid claims and other directly attributable costs paid (A)
Year T-9
Year T-8
Year T-7
Year T-6
Year T-5
Year T-4
Year T-3
Year T-2
Year T-1
Year T
Total
1. At the end of the year of occurrence
-
-
-
-
-
-
-
(104)
(126)
(191)
\u00a0
2. One year later
-
-
-
-
-
-
(115)
(186)
(216)
\u00a0
\u00a0
3. Two years later
-
-
-
-
-
(115)
(123)
(200)
\u00a0
\u00a0
\u00a0
4. Three years later
-
-
-
-
(64)
(116)
(124)
\u00a0
\u00a0
\u00a0
\u00a0
5. Four years later
-
-
-
(61)
(64)
(118)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
6. Five years later
-
-
(53)
(61)
(64)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
7. Six years later
-
(63)
(53)
(61)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
8. Seven years later
(75)
(62)
(52)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
9. Eight years later
(74)
(62)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
10. Nine years later
(74)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(74)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(62)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(52)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(61)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(64)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(118)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(124)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(200)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(216)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(191)
(1,162)
Claims/Times
Estimated ultimate cumulative claims cost (amount before reinsurance and undiscounted) (B)
Year T-9
Year T-8
Year T-7
Year T-6
Year T-5
Year T-4
Year T-3
Year T-2
Year T-1
Year T
Total
1. At the end of the year of occurrence
-
-
-
-
-
-
-
(220)
(278)
(384)
\u00a0
2. One year later
-
-
-
-
-
-
(149)
(230)
(274)
\u00a0
\u00a0
3. Two years later
-
-
-
-
-
(131)
(139)
(222)
\u00a0
\u00a0
\u00a0
4. Three years later
-
-
-
-
(70)
(126)
(134)
\u00a0
\u00a0
\u00a0
\u00a0
5. Four years later
-
-
-
(65)
(66)
(123)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
6. Five years later
-
-
(55)
(62)
(66)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
7. Six years later
-
(64)
(54)
(62)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
8. Seven years later
(75)
(63)
(53)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
9. Eight years later
(74)
(63)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
10. Nine years later
(74)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(74)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(63)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(53)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(62)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(66)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(123)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(134)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(222)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(274)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(384)
(1,456)
C. Gross undiscounted liability for incurred claims - T to T-9 (B - A)
(0)
(1)
(1)
(1)
(2)
(5)
(10)
(22)
(58)
(194)
(293)
D. Gross undiscounted liability for incurred claims - years prior to T-9
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(0)
E. Discount effect
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
11
F. Effect of adjustment for non-financial risks
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(14)
G. Gross liability for incurred claims of insurance contracts issued
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(296)
Cumulative paid claims, at 31 December 2023, amounted to \u20ac1,162 million, of which more than 50% related to claims occurred between 2021 and 2023.
Cumulative paid claims, including the ultimate cost estimate, amounted to 1,456 at 31 December 2023, of which more than 60% related to claims occurred between 2021 and 2023.
At the reporting date, approximately 80% of cumulative claims including the ultimate cost estimate had been settled. In fact, the ending balance of the undiscounted liability for remaining coverage at 31 December 2023 amounts to EUR 293297F298 million. This amount remains set aside to support commitments to policyholders for future years and relates, for approximately 65%, to claims occurred in the year 2023.
The discount effect on these expected future cash flows amounts to \u20ac11 million, while the adjustment for non-financial risk amounts to approximately \u20ac14 million.
Insurance Activities - Claims Development Net of Reinsurance
Claims/Times
Cumulative paid claims and other directly attributable costs paid net of reinsurance (A)
Year T-9
Year T-8
Year T-7
Year T-6
Year T-5
Year T-4
Year T-3
Year T-2
Year T-1
Year T
Total
1. At the end of the year of occurrence
-
-
-
-
-
-
-
(86)
(117)
(158)
\u00a0
2. One year later
-
-
-
-
-
-
(83)
(156)
(198)
\u00a0
\u00a0
3. Two years later
-
-
-
-
-
(81)
(87)
(168)
\u00a0
\u00a0
\u00a0
4. Three years later
-
-
-
-
(32)
(82)
(88)
\u00a0
\u00a0
\u00a0
\u00a0
5. Four years later
-
-
-
(37)
(32)
(83)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
6. Five years later
-
-
(32)
(37)
(32)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
7. Six years later
-
(44)
(32)
(37)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
8. Seven years later
(60)
(44)
(32)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
9. Eight years later
(59)
(44)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
10. Nine years later
(59)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(59)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(44)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(32)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(37)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(32)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(83)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(88)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(168)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(198)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(158)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(901)
Claims/Times
Estimated ultimate cumulative claims cost (amount net of reinsurance and undiscounted) (B)
Year T-9
Year T-8
Year T-7
Year T-6
Year T-5
Year T-4
Year T-3
Year T-2
Year T-1
Year T
Total
1. At the end of the year of occurrence
-
-
-
-
-
-
-
(188)
(256)
(312)
\u00a0
2. One year later
-
-
-
-
-
-
(110)
(196)
(255)
\u00a0
\u00a0
3. Two years later
-
-
-
-
-
(93)
(101)
(190)
\u00a0
\u00a0
\u00a0
4. Three years later
-
-
-
-
(37)
(89)
(97)
\u00a0
\u00a0
\u00a0
\u00a0
5. Four years later
-
-
-
(40)
(34)
(87)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
6. Five years later
-
-
(34)
(38)
(33)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
7. Six years later
-
(45)
(33)
(38)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
8. Seven years later
(61)
(44)
(33)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
9. Eight years later
(60)
(44)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
10. Nine years later
(60)
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(60)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(44)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(33)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(38)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(33)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(87)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(97)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(190)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(255)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(312)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(1,148)
C. Net undiscounted liability for incurred claims - year of occurrence T to T-9 (Total B - Total A)
(0)
(0)
(0)
(1)
(1)
(4)
(9)
(21)
(57)
(154)
(247)
D. Net undiscounted liability for incurred claims - years prior to T-9
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(0)
E. Discount effect
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
9
F. Effect of adjustment for non-financial risks
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(12)
G. Net liability for incurred claims of insurance contracts issued
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(250)
Mitigation related to reinsurance improves the result by about 15%.
\u00a0
POSTAL AND BUSINESS ACTIVITIES
Fair value interest rate risk
Postal and Business Activities - Fair value interest rate risk
\u00a0
\u00a0
\u00a0
31 December 2022
\u00a0
31 December 2023
Description(\u20acm)
Risk exposure
\u00a0
Risk exposure
Equity reserves before taxation
Nominal
Fair value
\u00a0
Nominal
Fair value
+100bps
-100bps
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
\u00a0
\u00a0
Financial assets at FVTOCI
110
91
\u00a0
110
99
(4)
4
Derivative financial instruments
50
0
\u00a0
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
160
91
110
99
(4)
4
Within the framework of postal and commercial activities, the risk exposure in question relates to Financial assets at fair value through other comprehensive income represented by fixed income government bonds held by the Parent Company.
Price risk
Postal and Business Activities - Price risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
\u00a0
31 December 2023
Description(\u20acm)
Risk exposure
Risk exposure
Equity reserves before taxation
\u00a0
\u00a0
+ Vol
- Vol
\u00a0
\u00a0
\u00a0
Financial assets
\u00a0
\u00a0
Financial assets at FVTOCI
343
\u00a0
345
120
(120)
Financial assets at FVTPL
1
0
-
-
Derivative financial instruments
-
-
-
-
Total
344
345
120
(120)
Financial assets at fair value through other comprehensive income refer to Nexi shares held by Poste Italiane SpA for \u20ac345 million; the Parent Company holds additional shares in Moneyfarm, sender Technologies GmbH, Milkman and Scalapay Limited, which are also classified as Financial assets at fair value through other comprehensive income, not subject to sensitivity analysis in the above table.
Foreign exchange risk
Postal and Business Activities - Currency Risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Description(\u20acm)
Position in GBP
Position in Euro
Position in GBP
Position in Euro
Equity reserves before taxation
+ Vol 260 days
- Vol 260 days
Financial assets
Financial assets at FVTOCI
50
57
48
55
3
(3)
Total
50
57
48
55
3
(3)
At 31 December 2023, the risk in question related exclusively to an equity investment held by the Parent Company in Moneyfarm.
In addition, below is indicated the risk related to the net receivable/(payable) position in DSP, a synthetic currency resulting from the weighted average of the exchange rates of four major currencies (the euro, US dollar, British pound and Japanese yen) held by Poste Italiane SpA and used worldwide to settle debts and credits among postal operators.
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Profit/(Loss) before tax
Description(\u20acm)
Position in SDRs
Position in Euro
Position in SDRs
Position in Euro
+ Vol 260 days
- Vol 260 days
\u00a0
\u00a0
\u00a0
Current assets in SDRs
166
208
77
94
4
(4)
Current liabilities in SDRs
(201)
(251)
(67)
(82)
(3)
3
\u00a0
\u00a0
Total
(34)
(43)
10
12
0
(0)
Lastly, it should be noted that the Poste Italiane Group is subject to translation currency risk, which is the exchange rate risk associated with the conversion into euro of items relating to investments in companies whose functional currency is not the euro. At 31 December 2023, however, a significant change in exchange rates would not have a material impact on the Group's consolidated financial statements.
Spread risk
The following is the result of the sensitivity analysis298F299 to spread risk carried out at 31 December 2023 limited to the Financial assets at FVTOCI involving fixed income government bonds:
Postal and Business Activities - Fair Value Spread Risk
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Description(\u20acm)
Risk exposure
Risk exposure
Equity reserves before taxation
Nominal
Fair value
Nominal
Fair value
+100bps
-100bps
Financial assets
\u00a0
\u00a0
Financial assets at FVTOCI
110
91
110
99
(4)
4
Total
110
91
110
99
(4)
4
Credit risk
Information on credit risk exposure is presented in the following section only for financial assets other than trade and other receivables and assets subject to impairment provisions, for which information is provided in Note A8 - Trade receivables and Note A9 - Other receivables and assets.
Exposure to credit risk
The table below provides an analysis of the exposure at 31 December 2023 of the Financial Assets pertaining to the Postal and Business segment for which the General impairment model is used. The analysis shows the exposure by financial asset class by stages. The amounts refer to the gross carrying amount (amortised cost before ECL), unless otherwise indicated, and do not take into account guarantees or other credit enhancements.
Postal and Business Activities - Credit Risk - Rating
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
from A+ to BBB-
Not rated
Hedge accounting effects
Total
Stage 1
Stage 2
2023
\u00a0
Financial assets at amortised cost
\u00a0
Gross carrying amount
20
-
\u00a0
\u00a0
20
Provision to cover expected losses
(20)
-
\u00a0
\u00a0
(20)
Total amortised cost at 31 December 2023
\u00a0
(0)
-
4
-
4
Financial assets at FVTOCI
\u00a0
\u00a0
\u00a0
Gross carrying amount
101
-
-
-
101
Carrying amount - Fair value at 31 December 2023
\u00a0
99
-
-
-
99
2022
Financial assets at amortised cost
Gross carrying amount
19
-
\u00a0
\u00a0
20
Provision to cover expected losses
(20)
-
\u00a0
\u00a0
(20)
Total amortised cost at 31 December 2022
\u00a0
(1)
-
3
-
3
Financial assets at FVTOCI
\u00a0
Gross carrying amount
99
-
-
-
99
Carrying amount - Fair value at 31 December 2022
\u00a0
91
-
-
-
91
The Financial assets that are relevant to the risk in question refer to financial receivables held by the Parent Company Poste Italiane SpA (RFC) and measured at amortised cost for a gross carrying amount of \u20ac20 million, fully written down; as well as fixed income instruments measured at fair value through other comprehensive income for a carrying amount of \u20ac99 million.
The following table shows an analysis of the counterparty concentration of credit risk by financial asset class.
Postal and Business Activities - Credit risk - Credit risk concentration
\u00a0
\u00a0
Description(\u20acm)
\u00a0
31.12.2023
31.12.2022
\u00a0
Gross carrying amount
Provision to cover expected losses
Gross carrying amount
Provision to cover expected losses
Financial assets at amortised cost
24
(20)
23
(20)
Corporate
24
(20)
23
(20)
Financial assets at FVTOCI
101
-
99
-
Sovereign
101
-
99
-
Total
\u00a0
125
(20)
123
(20)
ECL measurement
At 31 December 2023, the estimated expected losses on financial instruments related almost exclusively to financial receivables at amortised cost amounting to approximately \u20ac20 million. The provision remained unchanged from 31 December 2022.
Liquidity risk
The following tables present a comparison of the financial liabilities and assets of the Postal and Business segment at 31 December 2022.
Postal and Business Activities - Liquidity risk - Liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial liabilities
825
2,219
304
3,348
\u00a0
369
1,879
1,081
3,329
Trade payables
1,749
-
-
1,749
1,811
-
-
1,811
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Other liabilities
1,264
224
1
1,489
1,284
209
5
1,498
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total Liabilities
3,838
2,443
305
6,586
\u00a0
3,464
2,088
1,086
6,638
In the table above, the expected cash outflows are broken down by maturity. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2022.
Postal and Business Activities - Liquidity risk - Assets
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
2
122
2
125
35
2
111
149
\u00a0
\u00a0
\u00a0
\u00a0
Trade receivables
1,658
2
-
1,660
1,708
2
-
1,710
\u00a0
\u00a0
\u00a0
\u00a0
Other receivables and assets
378
310
153
842
293
284
182
759
\u00a0
\u00a0
\u00a0
\u00a0
Tax credits Law no. 77/2020 (*)
59
273
137
469
63
247
162
472
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash and cash equivalents (**)
650
-
-
650
575
-
-
575
Total Assets
2,747
707
292
3,746
\u00a0
2,674
535
455
3,664
(*) The amount shown in the table also includes receivables for which seizure orders were received from judicial authorities.
(**) shown gross of liquidity elimination
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable. Investments include financial instruments held by the Parent Company, shown on the basis of expected cash flows, consisting of principal and interest paid at the various payment dates.
The committed and uncommitted credit lines available to the Group companies belonging to the operating segment in question, and the related uses are summarised in the table below.
Description(\u20acm)
Balance at 31.12.2023
\u00a0
Balance at 31.12.2022
\u00a0
Committed credit lines
2,450
2,450
Short-term loans
2,450
2,450
\u00a0
Uncommitted credit lines
2,162
2,120
Short-term loans
960
1,005
Current account overdrafts
185
145
Unsecured loans
1,017
969
\u00a0
Total
4,612
\u00a0
4,570
\u00a0
Uncommitted uses
554
622
Short-term loans
0
1
Unsecured loans
554
621
\u00a0
Total
554
\u00a0
622
No collateral has been provided to secure the credit lines obtained.
At 31 December 2023, the Parent Company had an EMTN - Euro Medium Term Note program of \u20ac2.5 billion in place, thanks to which the Group can raise an additional \u20ac1.5 billion on the capital market. As part of this programme, the loan with a nominal value of \u20ac50 million, privately placed and issued at par on 25 October 2013, was repaid in October 2023.
The existing credit lines and the loans are adequate to meet financing requirements expected to date.
Cash flow interest rate risk
Within Financial assets belonging to the postal and business segment, the interest rate risk on cash flows relates to variable-rate bank deposits held by the Parent Company for approximately \u20ac75 million (\u20ac110 million at 31 December 2022), while under Financial liabilities it relates to the variable-rate CEB loan taken out by the Parent Company, for which the first tranche of \u20ac125 million was disbursed on 28 December 2023. The sensitivity analyses performed at 31 December 2023 do not show any significant effects on the profit/(loss) before tax.
PAYMENT SERVICES AND CARD PAYMENTS ACTIVITIES
Foreign exchange risk
Within the Payment Services and Card Payments segment, the financial assets exposed to the risk under review refer to the investment held by the company Postepay in Volant\u00e9 (approximately \u20ac7 million at 31 December 2023 and 31 December 2022) and the convertible loan issued by the company Volant\u00e9 subscribed in 2023 by Postepay and recognised in financial
assets at fair value through profit or loss for approximately \u20ac1 million. The sensitivity analyses performed did not reveal any significant effects on the company's profit/(loss) before tax or equity reserves.
Credit risk
See Note A8 - Trade receivables and Note A9 - Other receivables and assets for information on credit risk exposure on trade receivables and on other receivables and assets subject to impairment provisions.
The financial assets exposed to risk at 31 December 2023 refer to financial receivables from corporate counterparties, measured at amortised cost, for a gross carrying amount of approximately \u20ac32 million in the A+/BBB- rating category and stage 1, and for a gross carrying amount of approximately \u20ac27 million in the BB+/C rating category and stage 1. At 31 December 2023, the estimated expected losses on these financial instruments were not significant.
Liquidity risk
The following tables show the comparison between financial liabilities and assets falling within the Payments and Card payments segment and outstanding at 31 December 2023.
Payment Services and Card Payments Activities - Liquidity Risk - Liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial liabilities
10,275
8
-
10,282
\u00a0
9,342
8
-
9,350
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Trade payables
390
-
-
390
\u00a0
307
-
-
307
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Other liabilities
84
2
0
85
\u00a0
61
1
-
62
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total Liabilities
10,748
10
0
10,757
\u00a0
9,710
9
-
9,720
In the table above, the expected cash outflows are broken down by maturity. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2023.
Payment Services and Card Payments Activities - Liquidity Risk - Assets
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
299
0
-
299
198
-
-
198
\u00a0
\u00a0
\u00a0
\u00a0
Trade receivables
155
-
-
155
94
-
-
94
\u00a0
\u00a0
\u00a0
\u00a0
Other receivables and assets
56
2
-
58
51
1
-
51
Cash and cash equivalents (*)
65
-
-
65
172
-
-
172
Total Assets
575
2
-
577
\u00a0
514
1
-
515
(*) Shown gross of liquidity elimination
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable.
At 31 December 2023, the companies in this segment also had credit lines of about \u20ac35 million for unsecured loans of around \u20ac15 million drawn.
Additional liquidity needs can be met by resorting to credit lines stipulated by the Parent Company, for details of which please refer to the section on liquidity risk of postal and business activities.
No collateral has been provided to secure the credit lines obtained.
The existing credit lines and the loans are adequate to meet financing requirements expected to date.
Cash flow interest rate risk
As part of the Payment Services and Card Payments segment, the Financial assets exposed to the risk in question refer entirely to variable-rate bank deposits held by LIS Pay for a nominal value, at 31 December 2023, of approximately \u20ac42 million. The sensitivity analyses performed show that as a result of a parallel shift of +/- 100 bps in the interest rate, the impact on the profit/(loss) before tax would in both cases be positive by about \u20ac3 million and about \u20ac1 million, respectively.
QUANTITATIVE INFORMATION - POSTE ITALIANE SPA
The following is quantitative information on Poste Italiane SpA's exposure to financial risks.
Fair value interest rate risk
Financial assets at fair value through other comprehensive income that relate to the risk under review are composed of fixed income government bonds held by BancoPosta RFC which consist of: fixed-rate securities amounting to \u20ac16,192 million, variable-rate securities converted into fixed-rate securities via cash flow hedges interest rate swaps, totalling \u20ac3,729 million, variable-rate securities for \u20ac1,769 million (of which inflation-linked securities amounting to \u20ac1,116 million), and
fixed- or variable-rate bonds converted to variable-rate positions via fair value hedges amounting to \u20ac11,478 million (including \u20ac4,680 million in forward starts).
At 31 December 2023, with reference to the interest rate risk exposure determined by the average financial duration299F300 of the portfolios and relating mainly to BancoPosta RFC, overall investments went from 5.01 to 5.38.
Price risk
The financial instruments that are relevant to the risk under comment concern:
\u2022Financial assets at fair value through other comprehensive income consisting of the shares held by the RFC in Nexi SpA;
\u2022Financial assets at fair value through profit or loss and relating to preference shares held by BancoPosta RFC in Visa Incorporated. For the purpose of the sensitivity analysis, the equities are matched with the corresponding amount of the Class A shares, considering the volatility of the shares listed on the NYSE;
\u2022Derivative financial instruments related to the forward sale agreement for 95,000 Visa Incorporated ordinary shares.
The shares in Moneyfarm Holding Ltd, sennder Technologies GmbH, Milkman and Scalapay Limited, classified as Financial Assets at fair value through other comprehensive income, and held by RFC are not subject to sensitivity in the above table.
Foreign exchange risk
At 31 December 2023, the risk in question concerns:
\u2022the equity investment in Visa Incorporated by BancoPosta RFC and the related derivative financial instrument entered into on the ordinary shares;
\u2022the equity investment in the company MFM Holding Ltd by the RFC.
Below is also the risk concerning the net trading position in DSP300F301 held by Poste Italiane SpA and used worldwide for the settlement of trade positions between Postal Operators:
Spread risk
Financial assets at fair value through other comprehensive income that are relevant to the risk in question concern fixed income government securities held mainly by BancoPosta RFC and underwent an overall net increase in fair value of approximately \u20ac2,327 million: this change was recognised in profit or loss for an amount of \u20ac383 million relating to the change in the fair value of securities hedged against interest rate risk, whilst the change in the fair value of unhedged securities and the spread risk component (not hedged) was reflected in equity for \u20ac1,944 million.
For further details on the risk in question, see the section in this paragraph entitled \"Quantitative Information - Poste Italiane Group - Financial Activities\".
Credit risk
Exposure to credit risk
The credit risk exposure at 31 December 2023 of Financial assets for which, for the purposes of application of the impairment provisions, the General impairment model is used, is shown below. The analysis shows the exposure by financial asset class by stages. The amounts refer to the gross carrying amount (amortised cost before ECL), unless otherwise indicated, and do not take into account guarantees or other credit enhancements.
Financial assets at amortised cost that are relevant to the risk in question regard: fixed income instruments held by BancoPosta RFC with a gross carrying amount of \u20ac32,360 million, decreased by a total of \u20ac1,962 million to take account of the effects of fair value hedges and the related impairment provision; loans and receivables with a gross carrying amount of \u20ac12,363 million, including \u20ac8,937 million relating to BancoPosta RFC and deriving from Deposits with the MEF and \u20ac409 million referring to the RFC and relating to loans and running current accounts receivable from subsidiaries.
Financial assets at fair value through other comprehensive income that are relevant to the risk in question concern fixed income instruments held mainly by BancoPosta RFC.
The following table also shows the counterparty concentration of credit risk by financial asset class.
Collateral held and other credit enhancements
At 31 December 2023, the Company does not hold financial instruments secured by guarantees or other risk mitigation instruments for which no loss provisions have been made (except for the temporary use of liquidity in repurchase agreements).
For further details on the risk in question and, in particular, on the main types of credit risk mitigation instruments, please refer to the section in this paragraph entitled \"Quantitative Information - Poste Italiane Group - Financial Activities\".
ECL measurement
The following tables show, for Financial assets, the reconciliation between the opening and closing balances of the ECL provisions required by IFRS 9.
At 31 December 2023, the estimate of expected losses on financial instruments at amortised cost includes \u20ac18 million for the provision related to fixed income instruments held by BancoPosta RFC (increased by \u20ac5 million compared to 31 December 2022) and \u20ac20 million for the provision related to the residual receivable from Invitalia SpA for the sale of Banca del Mezzogiorno-MedioCreditoCentrale SpA (unchanged compared to 31 December 2022).
At 31 December 2023, estimated expected losses on financial instruments measured at fair value through other comprehensive income amount to \u20ac19 million and concern the provision relating to government bonds held mainly by BancoPosta RFC.
Liquidity risk
A comparison between liabilities and assets at 31 December 2023 is shown below:
The above table shows expected cash outflows, broken down by maturity and payables deriving from postal current accounts classified under Financial liabilities of BancoPosta RFC, represented on the basis of the statistical/econometric model that forecasts the interest rates and maturities typical of postal current accounts. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2023.
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable. Investments include financial instruments held mainly by BancoPosta RFC, shown on the basis of expected cash flows, consisting of principal and interest paid at the various payment dates.
Poste Italiane SpA's liquidity risk is mainly attributable to funding from BancoPosta RFC in postal current accounts and prepaid cards301F302 (\u20ac73,011 million) and the related investment in euro-government and/or Italian government-guaranteed securities (\u20ac100,242 million), margining inherent in derivative transactions, and tax credits acquired with reference to the Decreto Rilancio no. 34/2020 (later converted into Law no. 77 of 17 July 2020). The potential risk derives from a mismatch between the maturities of investments in securities and those of liabilities, represented by current accounts where the funds are available on demand, thus compromising the ability to meet its obligations to current account holders. For the monitoring of this mismatch, see the section in this paragraph entitled \"Quantitative Information - Poste Italiane Group - Financial Activities\".
In addition, in order to meet any liquidity needs, information on the committed and uncommitted credit lines available to the Company, as well as their utilisation, is presented below:
(*) At 31 December 2023, unsecured loans were used for \u20ac320 million on behalf of Poste Italiane SpA and for \u20ac205 million on behalf of Group companies.
No collateral has been provided to secure the credit lines available.
At 31 December 2023, no committed and uncommitted credit lines were used for short-term financing.
The uncommitted credit lines are also available for overnight transactions entered into by BancoPosta RFC. In addition, from 5 December 2023, it may access a 3-year committed facility granted by Cassa Depositi e Prestiti for repurchase agreements up to a maximum of \u20ac3 billion, undrawn at 31 December 2023. Finally, the Bank of Italy has granted BancoPosta RFC access to intraday credit in order to fund intraday interbank transactions. Collateral for this credit facility is provided by securities with a nominal value of \u20ac2,758 million, undrawn at 31 December 2023. For further details, see the section in this paragraph entitled \"Quantitative Information - Poste Italiane Group - Financial Activities\".
Lastly, at 31 December 2023, Poste Italiane SpA had an EMTN - Euro Medium Term Note programme of \u20ac2.5 billion in place, thanks to which can raise an additional \u20ac1.5 billion on the capital market. As part of this programme, the loan with a nominal value of \u20ac50 million, privately placed and issued at par on 25 October 2013, was repaid in October 2023.
Cash flow interest rate risk
In detail, the financial instruments relevant to the risk under comment mainly concern:
\u2022Receivables classified as Financial assets at amortised cost totalling \u20ac17,019 million, of which: \u20ac1,223 million for guarantee deposits pledged as collateral for derivative liabilities and repurchase agreements held by BancoPosta RFC; \u20ac8,937 million for the investment of liquidity from deposits in postal current accounts held by the Public Administration with the MEF; \u20ac403 million for loans and current accounts receivable from subsidiaries relating to the RFC;
\u2022Fixed income government securities held by BancoPosta RFC, of which \u20ac6,456 million classified as Financial assets at amortised cost and \u20ac8,895 million classified as Financial assets at fair value through other comprehensive income. In particular, the following are relevant to the risk in question: variable-rate securities for a nominal total of \u20ac650 million, fixed-rate securities converted to variable-rate positions through fair value hedges, with a total nominal amount of \u20ac12,306 million (including \u20ac1,964 million in securities with fair value hedges, where the hedges will begin to have an effect in the 12 months after the end of the period under review) and an inflation-linked bond issued by the Italian Republic, with a nominal value of \u20ac2,395 million, subject to a fair value hedge;
\u2022Cash and cash equivalents including \u20ac873 million for the deposit held with the MEF on the operating current account known as the \"Buffer\" account;
\u2022Loans classified as financial liabilities of BancoPosta RFC that are hedged against interest rate risk through fair value hedges.
Cash flow inflation riskAt 31 December 2023, cash flow inflation risk relates to inflation-linked government securities not subject to cash flow hedges or fair value hedges and are held entirely by BancoPosta RFC.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page773-cflshid_347030-tag141627": { "value": "
Foreign exchange risk
Financial Activities-Currency risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Description(\u20acm)
Position in USD
Position in Euro
Position in USD
Position in Euro
Profit/(Loss) before tax
\u00a0
Notional
Notional
Notional
Notional
+ Vol 260 days
- Vol 260 days
Financial assets
Financial assets at FVTPL
42
40
29
26
2
(2)
Derivative financial instruments
(4)
(4)
(3)
(3)
(2)
2
Total
38
36
26
24
0
(0)
At 31 December 2023, the financial assets exposed to the risk in question refer to an equity investment held by BancoPosta RFC in Visa (\u20ac26 million), as well as to a derivative contract on the ordinary shares of Visa Incorporated entered into by the Parent Company (negative fair value of \u20ac3 million at 31 December 2023).
Foreign exchange risk
Insurance Activities - Currency Risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Description(\u20acm)
Position in USD
Position in Euro
Position in USD
Position in Euro
Profit/(Loss) before tax
+ Vol 260 days
- Vol 260 days
Financial assets
Financial assets at FVTOCI
-
-
-
-
-
-
Financial assets at FVTPL
106
99
106
95
7
(7)
Total
106
99
106
95
7
(7)
In the insurance business, the Financial assets exposed to the risk in question refer exclusively to units in US dollar mutual funds held by the insurance company Poste Vita SpA. The company considers the exposure to currency risk in relation to the effects on insurance liabilities to be insignificant, as these positions are held in Separately Managed Accounts.
Foreign exchange risk
Postal and Business Activities - Currency Risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Description(\u20acm)
Position in GBP
Position in Euro
Position in GBP
Position in Euro
Equity reserves before taxation
+ Vol 260 days
- Vol 260 days
Financial assets
Financial assets at FVTOCI
50
57
48
55
3
(3)
Total
50
57
48
55
3
(3)
At 31 December 2023, the risk in question related exclusively to an equity investment held by the Parent Company in Moneyfarm.
In addition, below is indicated the risk related to the net receivable/(payable) position in DSP, a synthetic currency resulting from the weighted average of the exchange rates of four major currencies (the euro, US dollar, British pound and Japanese yen) held by Poste Italiane SpA and used worldwide to settle debts and credits among postal operators.
\u00a0
\u00a0
\u00a0
31 December 2022
31 December 2023
Profit/(Loss) before tax
Description(\u20acm)
Position in SDRs
Position in Euro
Position in SDRs
Position in Euro
+ Vol 260 days
- Vol 260 days
\u00a0
\u00a0
\u00a0
Current assets in SDRs
166
208
77
94
4
(4)
Current liabilities in SDRs
(201)
(251)
(67)
(82)
(3)
3
\u00a0
\u00a0
Total
(34)
(43)
10
12
0
(0)
Lastly, it should be noted that the Poste Italiane Group is subject to translation currency risk, which is the exchange rate risk associated with the conversion into euro of items relating to investments in companies whose functional currency is not the euro. At 31 December 2023, however, a significant change in exchange rates would not have a material impact on the Group's consolidated financial statements.
Foreign exchange risk
Within the Payment Services and Card Payments segment, the financial assets exposed to the risk under review refer to the investment held by the company Postepay in Volant\u00e9 (approximately \u20ac7 million at 31 December 2023 and 31 December 2022) and the convertible loan issued by the company Volant\u00e9 subscribed in 2023 by Postepay and recognised in financial
assets at fair value through profit or loss for approximately \u20ac1 million. The sensitivity analyses performed did not reveal any significant effects on the company's profit/(loss) before tax or equity reserves
Foreign exchange risk
At 31 December 2023, the risk in question concerns:
\u2022the equity investment in Visa Incorporated by BancoPosta RFC and the related derivative financial instrument entered into on the ordinary shares;
\u2022the equity investment in the company MFM Holding Ltd by the RFC.
Below is also the risk concerning the net trading position in DSP300F301 held by Poste Italiane SpA and used worldwide for the settlement of trade positions between Postal Operators:
", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page774-cflshid_347730-tag141628": { "value": "
Credit risk
Information on credit risk exposure is presented in the following section only for financial assets other than trade and other receivables and assets subject to impairment provisions, for which information is provided in Note A8 - Trade receivables and Note A9 - Other receivables and assets.
Exposure to credit risk
The following table shows the credit risk exposure of Financial assets related to the financial segment for which the General impairment model is used for the application of the impairment provisions. The analysis shows the exposure by financial asset class by stages. The amounts refer to the gross carrying amount (amortised cost before ECL), unless otherwise indicated, and do not take into account guarantees or other credit enhancements.
Financial Activities - Credit Risk - Rating
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
from AAA to AA-
from A+ to BBB-
from BB+ to C
Not rated
Hedge accounting effects
Total
2023
\u00a0
Financial assets at amortised cost
\u00a0
\u00a0
\u00a0
Gross carrying amount
-
-
44,289
-
-
-
\u00a0
\u00a0
44,289
Provision to cover expected losses
-
-
(23)
-
-
-
\u00a0
\u00a0
(23)
Total amortised cost at 31 December 2023
-
-
44,266
-
-
-
351
(1,944)
42,673
\u00a0
Financial assets at FVTOCI
\u00a0
Gross carrying amount
-
-
35,544
-
-
-
\u00a0
\u00a0
35,544
Provision to cover expected losses - OCI
-
-
(19)
-
-
-
\u00a0
\u00a0
(19)
Carrying amount - Fair value at 31 December 2023
-
-
33,100
-
-
-
\u00a0
\u00a0
33,100
2022
Financial assets at amortised cost
Gross carrying amount
195
-
45,953
-
-
-
\u00a0
\u00a0
46,149
Provision to cover expected losses
-
-
(19)
-
-
-
\u00a0
\u00a0
(19)
Total amortised cost at 31 December 2022
195
-
45,935
-
-
-
486
(2,714)
43,902
Financial assets at FVTOCI
\u00a0
Gross carrying amount
-
-
38,981
-
-
-
\u00a0
\u00a0
38,981
Provision to cover expected losses - OCI
-
-
(16)
-
-
-
\u00a0
\u00a0
(16)
Carrying amount - Fair value at 31 December 2022
-
-
33,190
-
-
-
\u00a0
\u00a0
33,190
Financial assets at amortised cost, relevant to the risk in question, refer only to Bancoposta RFC's assets and concern fixed income instrument with a gross carrying amount of \u20ac44,289 million, decreased by a total of \u20ac1,944 million to take into account the effects of fair value hedges and approximately \u20ac23 million of the related impairment provision.
Financial Assets at fair value through other comprehensive income that are relevant to the risk in question refer exclusively to fixed income instruments held by companies belonging to the financial segment.
The following table shows the counterparty concentration of credit risk by financial asset class.
Financial Activities - Credit risk - Credit risk concentration
\u00a0
\u00a0
Description
(\u20acm)
\u00a0
31.12.2023
31.12.2022
\u00a0
Gross carrying amount
Provision to cover expected losses
Gross carrying amount
Provision to cover expected losses
Financial assets at amortised cost
44,289
(23)
46,149
(19)
Sovereign
38,405
(21)
39,327
(17)
Corporate
4,937
(2)
5,354
(1)
Banking
946
-
1,468
(0)
Financial assets at FVTOCI
35,544
(19)
38,980
(16)
Sovereign
35,544
(19)
38,980
(16)
Corporate
-
-
-
-
Banking
-
-
-
-
Total
\u00a0
79,833
(42)
85,129
(35)
Collateral held and other credit enhancements
In order to mitigate credit risk, the Poste Italiane Group adopts credit and counterparty risk mitigation tools in its financial activities. In particular, as regards BancoPosta RFC, the counterparty risk associated with hedging derivatives and repurchase agreements is mitigated by entering into a master netting agreement and requiring collateral in the form of cash or government bonds; with reference to credit risk, in addition, there are safeguards such as government guarantees on securities.
At 31 December 2023, the Group does not hold financial instruments secured by guarantees or other risk mitigation instruments for which no loss provisions have been made (except for the temporary use of liquidity in repurchase agreements).
In the context of financial activities, the main types of credit risk mitigation instruments are detailed below.
Fixed income instruments
Debt instruments secured by guarantees or other credit risk mitigation instruments are bonds issued by CDP SpA guaranteed by the Italian State and subscribed by BancoPosta RFC, amounting to a nominal value of \u20ac3,000 million at 31 December 2023. These are recognised as financial assets measured at amortised cost and, in determining the expected credit losses, account was taken of the PD of the Italian Republic.
Derivative financial instruments and repurchase agreements
In order to limit the counterparty risk exposure, BancoPosta RFC has concluded standard ISDA master agreements (with attached CSA) and GMRAs which govern the collateralisation of derivative transactions and repurchase agreements, respectively.
In addition, in order to mitigate counterparty risk and gain easier access to the market, from December 2017, BancoPosta RFC has entered into repurchase agreements with the Central Counterparty, the Cassa di Compensazione e Garanzia. As of 2021, certain derivatives entered into by Bancoposta RFC through bilateral contracts will be routed to a Qualified Central Counterparty for centralised clearing through the services provided by a clearing broker.
The calculation of positions in derivatives and repurchase agreements and the related risk mitigation instruments are illustrated in \"Note 13 - Additional information - Offsetting financial assets and liabilities\", to which reference should be made.
ECL measurement
The following tables show, for Financial assets belonging to the financial segment, the reconciliation between the opening and closing balances of the ECL provisions required by IFRS 9.
Financial Activities - Credit risk - Details of the provision to cover expected losses on financial instruments
Description (\u20acm)
Financial assets at amortised cost
\u00a0
Financial assets at FVOCI
Stage 1
Total
\u00a0
Stage 1
Total
Balance at 1 January 2023
19
19
16
16
\u00a0
\u00a0
Impairment of securities / receivables held at the beginning of the period
3
3
3
3
Reversal of securities / receivables held at the beginning of the period
(0)
(0)
(1)
(1)
Impairment of securities / receivables purchased/paid in the period
2
2
2
2
Reversal for write-off
-
-
-
-
Reversal due to sale / collection
(0)
(0)
(2)
(2)
Balance at 31 December 2023
23
23
\u00a0
19
19
At 31 December 2023, estimated expected losses on Financial assets at amortised cost amount to approximately \u20ac23 million; the provision increased by roughly \u20ac5 million compared to 31 December 2022. Of the grand total, \u20ac18 million related to expected losses calculated on fixed income instruments (\u20ac13 million at 31 December 2022).
At 31 December 2023, estimated expected losses on Financial assets at fair value through other comprehensive income amount to approximately \u20ac19 million. This provision, which refers entirely to expected losses calculated on fixed income instruments in the portfolio, increased by approximately \u20ac3 million compared to 31 December 2022.
Credit risk
Information on credit risk exposure is presented in the following section only for financial assets other than trade and other receivables and assets subject to impairment provisions, for which information is provided in Note A8 - Trade receivables and Note A9 - Other receivables and assets.
Exposure to credit risk
The following table presents an analysis of the risk exposure at 31 December 2023 of financial assets belonging to the insurance segment for which the General impairment model is used. The analysis shows the exposure by financial asset class by stages. The amounts refer to the gross carrying amount (amortised cost before ECL), unless otherwise indicated, and do not take into account guarantees or other credit enhancements.
Insurance Activities - Credit Risk - Rating
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
from AAA to AA-
\u00a0
from A+ to BBB-
from BB+ to C
\u00a0
Total
Stage 1
Stage 3
Stage 1
Stage 2
Stage 1
Stage 2
Stage 3
2023
\u00a0
Financial assets at amortised cost
\u00a0
Gross carrying amount
133
-
1,988
-
2
0
-
2,124
Provision to cover expected losses
(0)
-
(1)
-
(0)
(0)
-
(1)
Total amortised cost at 31 December 2023
\u00a0
133
-
1,987
-
2
0
-
2,123
Financial assets at FVTOCI
\u00a0
Gross carrying amount
13,486
-
95,735
46
20
2,640
124
112,051
Provision to cover expected losses - OCI
(1)
-
(44)
(0)
(0)
(8)
(2)
(55)
Carrying amount - Fair value at 31 December 2023
\u00a0
13,103
-
90,072
44
20
2,493
114
105,847
2022
Financial assets at amortised cost
\u00a0
Gross carrying amount
54
209
1,930
-
-
-
-
2,194
Provision to cover expected losses
-
(0)
(1)
-
-
-
-
(1)
Total amortised cost at 31 December 2022
\u00a0
54
209
1,929
-
-
-
-
2,193
2022
\u00a0
Financial assets at FVTOCI
\u00a0
Gross carrying amount
\u00a0
8,709
-
97,615
13
2,058
58
-
108,454
Provision to cover expected losses - OCI
(0)
-
(39)
(0)
(8)
(2)
-
(48)
Carrying amount - Fair value at 31 December 2022
\u00a0
7,650
-
86,973
12
1,815
51
-
96,501
Financial assets at amortised cost, relevant to the risk in question, refer exclusively to fixed income instruments held by companies belonging to the insurance segment with a gross carrying amount of \u20ac2,123 million, decreased by a total of \u20ac1 million to account for the related impairment provision in the Company's free assets.
Financial assets at fair value through other comprehensive income that are relevant to the risk in question refer for a gross carrying amount of \u20ac112,051 million exclusively to fixed income instruments.
The following table shows the counterparty concentration of credit risk by financial asset class. Amounts refer to the gross carrying amount. Of the provision to cover expected losses on financial instruments at fair value through other comprehensive income, an amount of approximately \u20ac53 million was retroceded to policyholders.
Insurance Activities - Credit risk - Credit risk concentration
\u00a0
\u00a0
Description
(\u20acm)
\u00a0
31.12.2023
31.12.2022
\u00a0
Gross carrying amount
Provision to cover expected losses
Gross carrying amount
Provision to cover expected losses
Financial assets at amortised cost
2,124
(1)
2,194
(1)
Sovereign
2,050
(1)
2,143
(1)
Corporate
64
(0)
42
(0)
Banking
9
(0)
9
(0)
Financial assets at FVTOCI
112,051
(55)
108,454
(48)
Sovereign
88,892
(38)
85,677
(32)
Corporate
16,270
(14)
14,933
(14)
Banking
6,889
(3)
7,844
(2)
Total
\u00a0
114,175
(56)
110,648
(49)
The following table presents information on the credit quality of net amounts due from reinsurers and the exposure of assets for outward reinsurance (totalling \u20ac233 million) and amounts due from policyholders, classified under insurance
liabilities and amounting to \u20ac155,338 million (of which \u20ac170 million related to the balance of amounts due from customers at 31 December 2023):
ECL measurement
The following tables show, for each class of financial instrument, the reconciliation between the opening and closing balances of the ECL provisions required by IFRS 9, relating exclusively to the free capital of the companies in the segment.
Insurance Activities - Credit risk - Details of the provision to cover expected losses on financial instruments
\u00a0
Description (\u20acm)
Financial assets at amortised cost
\u00a0
Financial assets at FVOCI
Stage 1
Stage 2
Stage 3
Total
\u00a0
Stage 1
Stage 2
Stage 3
Total
Balance at 1 January 2023
1
-
-
1
1
-
-
1
\u00a0
\u00a0
Impairment of securities / receivables held at the beginning of the period
0
0
0
0
0
0
0
0
0
Reversal of securities / receivables held at the beginning of the period
(0)
0
0
0
0
0
0
0
(0)
Impairment of securities / receivables purchased/paid in the period
0
0
0
0
0
0
0
0
0
Reversal for write-off
0
0
0
0
0
0
0
(0)
Reversal due to sale / collection
(0)
0
0
0
0
0
0
0
(0)
Balance at 31 December 2023
1
-
-
1
\u00a0
1
0
-
2
At 31 December 2023, estimated expected losses on financial instruments at amortised cost amount to approximately \u20ac1 million; the provision did not record any significant changes compared to 31 December 2022.
At the end of the reference period, the estimated expected losses on financial instruments measured at fair value through other comprehensive income amount to approximately \u20ac55 million, of which \u20ac53 million passed on to policyholders. This provision increased by approximately \u20ac7 million compared to 31 December 2022, mainly as a result of purchases made during the period.
Collateral held and other credit enhancements
In order to mitigate the exposure to credit risk, the Poste Vita insurance Group invests in, among other things, corporate bonds that are guaranteed in order to mitigate the overall exposure to credit risk.
At 31 December 2023, the insurance Group does not hold financial assets secured by guarantees or other credit risk mitigation instruments for which no loss coverage provisions have been made.
Within insurance activities, the main types of credit risk mitigation instruments relate to fixed income instruments held by insurance companies. In detail, debt securities backed by guarantees or other credit risk mitigation instruments are mainly represented by bonds held by the Poste Vita Group, with a nominal amount of \u20ac6,485 million at 31 December 2023. In these cases, the guarantee covers 100% of the nominal value of the securities. The guarantees securing these financial instruments are as follows:
-corporate bonds backed by personal guarantees provided by the parent company or another associate, amounting to a nominal value of \u20ac5,569 million;
-covered bonds backed by mortgages, primarily property mortgages, amounting to a nominal value of \u20ac179 million;
-bonds guaranteed by sovereign states, amounting to a nominal value of \u20ac737 million.
In the case of instruments backed by personal guarantees provided by a sovereign state or one or more companies, expected losses are calculated on the basis of the credit rating of the guarantor. With regard to covered bonds, the underlying guarantees were considered through the recognition of upgrades according to the type of guarantee.
Exposure to credit risk - insurance components
The following table presents an analysis of the risk exposure under review at 31 December 2023, by counterparty rating class, generated as a result of the placement of insurance and reinsurance contracts in place.
Insurance Activities - Credit Risk - Rating
\u00a0
\u00a0
\u00a0
Description
(\u20acm)
\u00a0
from AAA to AA-
from A+ to BBB-
from BB+ to C
Not rated
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
2023
\u00a0
Assets for outward reinsurance
\u00a0
\u00a0
\u00a0
\u00a0
233
- of which net Amounts due from reinsurers
-
-
-
-
-
\u00a0
Insurance liabilities
\u00a0
\u00a0
\u00a0
\u00a0
155,338
- of which due from policyholders
-
-
-
170
170
2022
Assets for outward reinsurance
\u00a0
\u00a0
\u00a0
\u00a0
44
- of which net Amounts due from reinsurers
1
0
(0)
(0)
0
\u00a0
Insurance liabilities
\u00a0
\u00a0
\u00a0
\u00a0
141,380
- of which due from policyholders
-
-
-
110
110
Assets for outward reinsurance that are relevant to the risk in question refer to the component of the item relating to the net exposure to reinsurers, which is included in the valuation. These receivables are not subject to impairment as the credit or debit balance is used to offset the payment or collection of reinsurance items. The reinsurance structure has very tight deadlines, annual at most, so the possibility of balances remaining unpaid for a period longer than 12 months is remote. Moreover, since these receivables are related to contracts falling under IFRS 17, they must not be impaired as required by IFRS 9. At 31 December 2023, the balance of these net receivables was nil, as the exposure to reinsurers was a liability at the balance sheet date.
The insurance liabilities that are taken into account in the valuation of this risk refer to the component relating to amounts due from policyholders. Amounts due from policyholders relate to contracts issued at the reporting date for which the customer has not yet paid the premium. As is the case for net amounts due from reinsurers, this type of receivable arises as a result of insurance contracts, and is therefore not subject to impairment as required by IFRS 9. In any case, the Group performs recoverability analyses of the receivable in question, and in fact a full write-down of the receivable is made if it is more than 6 months old.
Credit risk
Information on credit risk exposure is presented in the following section only for financial assets other than trade and other receivables and assets subject to impairment provisions, for which information is provided in Note A8 - Trade receivables and Note A9 - Other receivables and assets.
Exposure to credit risk
The table below provides an analysis of the exposure at 31 December 2023 of the Financial Assets pertaining to the Postal and Business segment for which the General impairment model is used. The analysis shows the exposure by financial asset class by stages. The amounts refer to the gross carrying amount (amortised cost before ECL), unless otherwise indicated, and do not take into account guarantees or other credit enhancements.
Postal and Business Activities - Credit Risk - Rating
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
\u00a0
from A+ to BBB-
Not rated
Hedge accounting effects
Total
Stage 1
Stage 2
2023
\u00a0
Financial assets at amortised cost
\u00a0
Gross carrying amount
20
-
\u00a0
\u00a0
20
Provision to cover expected losses
(20)
-
\u00a0
\u00a0
(20)
Total amortised cost at 31 December 2023
\u00a0
(0)
-
4
-
4
Financial assets at FVTOCI
\u00a0
\u00a0
\u00a0
Gross carrying amount
101
-
-
-
101
Carrying amount - Fair value at 31 December 2023
\u00a0
99
-
-
-
99
2022
Financial assets at amortised cost
Gross carrying amount
19
-
\u00a0
\u00a0
20
Provision to cover expected losses
(20)
-
\u00a0
\u00a0
(20)
Total amortised cost at 31 December 2022
\u00a0
(1)
-
3
-
3
Financial assets at FVTOCI
\u00a0
Gross carrying amount
99
-
-
-
99
Carrying amount - Fair value at 31 December 2022
\u00a0
91
-
-
-
91
The Financial assets that are relevant to the risk in question refer to financial receivables held by the Parent Company Poste Italiane SpA (RFC) and measured at amortised cost for a gross carrying amount of \u20ac20 million, fully written down; as well as fixed income instruments measured at fair value through other comprehensive income for a carrying amount of \u20ac99 million.
The following table shows an analysis of the counterparty concentration of credit risk by financial asset class.
Postal and Business Activities - Credit risk - Credit risk concentration
\u00a0
\u00a0
Description(\u20acm)
\u00a0
31.12.2023
31.12.2022
\u00a0
Gross carrying amount
Provision to cover expected losses
Gross carrying amount
Provision to cover expected losses
Financial assets at amortised cost
24
(20)
23
(20)
Corporate
24
(20)
23
(20)
Financial assets at FVTOCI
101
-
99
-
Sovereign
101
-
99
-
Total
\u00a0
125
(20)
123
(20)
ECL measurement
At 31 December 2023, the estimated expected losses on financial instruments related almost exclusively to financial receivables at amortised cost amounting to approximately \u20ac20 million. The provision remained unchanged from 31 December 2022.
Credit risk
See Note A8 - Trade receivables and Note A9 - Other receivables and assets for information on credit risk exposure on trade receivables and on other receivables and assets subject to impairment provisions.
Credit risk
Exposure to credit risk
The credit risk exposure at 31 December 2023 of Financial assets for which, for the purposes of application of the impairment provisions, the General impairment model is used, is shown below. The analysis shows the exposure by financial asset class by stages. The amounts refer to the gross carrying amount (amortised cost before ECL), unless otherwise indicated, and do not take into account guarantees or other credit enhancements.
Financial assets at amortised cost that are relevant to the risk in question regard: fixed income instruments held by BancoPosta RFC with a gross carrying amount of \u20ac32,360 million, decreased by a total of \u20ac1,962 million to take account of the effects of fair value hedges and the related impairment provision; loans and receivables with a gross carrying amount of \u20ac12,363 million, including \u20ac8,937 million relating to BancoPosta RFC and deriving from Deposits with the MEF and \u20ac409 million referring to the RFC and relating to loans and running current accounts receivable from subsidiaries.
Financial assets at fair value through other comprehensive income that are relevant to the risk in question concern fixed income instruments held mainly by BancoPosta RFC.
The following table also shows the counterparty concentration of credit risk by financial asset class.
Collateral held and other credit enhancements
At 31 December 2023, the Company does not hold financial instruments secured by guarantees or other risk mitigation instruments for which no loss provisions have been made (except for the temporary use of liquidity in repurchase agreements).
For further details on the risk in question and, in particular, on the main types of credit risk mitigation instruments, please refer to the section in this paragraph entitled \"Quantitative Information - Poste Italiane Group - Financial Activities\".
ECL measurement
The following tables show, for Financial assets, the reconciliation between the opening and closing balances of the ECL provisions required by IFRS 9.
At 31 December 2023, the estimate of expected losses on financial instruments at amortised cost includes \u20ac18 million for the provision related to fixed income instruments held by BancoPosta RFC (increased by \u20ac5 million compared to 31 December 2022) and \u20ac20 million for the provision related to the residual receivable from Invitalia SpA for the sale of Banca del Mezzogiorno-MedioCreditoCentrale SpA (unchanged compared to 31 December 2022).
At 31 December 2023, estimated expected losses on financial instruments measured at fair value through other comprehensive income amount to \u20ac19 million and concern the provision relating to government bonds held mainly by BancoPosta RFC.", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page777-cflshid_349726-tag141629": { "value": "
Liquidity risk
The following tables compare financial liabilities and assets belonging to the financial segment and outstanding at 31 December 2023.
Financial Activities - Liquidity risk - Liabilities
\u00a0\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial liabilities
37,391
19,431
26,290
83,112
\u00a0
45,274
21,080
26,967
93,321
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Trade payables
73
-
-
73
\u00a0
81
-
-
81
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Other liabilities
234
1,756
0
1,990
\u00a0
86
1,738
-
1,824
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total Liabilities
37,697
21,187
26,290
85,174
\u00a0
45,441
22,818
26,967
95,226
In the presentation of financial liabilities, the expected cash outflows at the date of the financial statements, are broken down by maturity, while the payables for postal current account deposits are reported on the basis of the estimates made with a statistic/econometric model. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2023.
Financial Activities - Liquidity risk - Assets
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
19,866
19,155
76,154
115,175
24,336
19,317
80,653
124,306
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Trade receivables
588
-
-
588
375
-
-
375
\u00a0
\u00a0
\u00a0
\u00a0
Other receivables and assets
603
1,752
0
2,356
571
1,738
0
2,309
\u00a0
\u00a0
\u00a0
\u00a0
Tax credits Law no. 77/2020
1,701
4,905
2,241
8,847
1,506
5,267
2,972
9,746
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash and deposits attributable to BancoPosta
4,671
-
-
4,671
\u00a0
5,848
-
-
5,848
Cash and cash equivalents (*)
940
-
-
940
2,018
-
-
2,018
Total Assets
28,368
25,812
78,396
132,576
\u00a0
34,654
26,322
83,626
144,602
(*) shown gross of liquidity elimination
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable. Investments include financial instruments held by BancoPosta RFC and, to a residual extent, the company BancoPosta Fondi SpA sgr, shown on the basis of expected cash flows, consisting of principal and interest paid at the various payment dates.
In terms of BancoPosta RFC's specific operations, the liquidity risk regards current account deposits and prepaid cards290F291, the related investment of the deposits in Eurozone government securities and/or securities guaranteed by the Italian government, and the margins on derivative transactions as well as tax credits acquired in relation to the Decreto Rilancio no. 34/2020 (later converted with Law no. 77 of 17 July 2020). The potential risk derives from a mismatch between the maturities of investments in securities and those of liabilities, represented by current accounts where the funds are available on demand, thus compromising the ability to meet its obligations to current account holders. This potential mismatch between assets and liabilities is monitored via comparison of the maturity schedule for assets with the statistical model of the performance of current account deposits, in accordance with the various likely maturity schedules and assuming the progressive total withdrawal of deposits over a period of twenty-four years for retail customers, six years for business customers, ten years for PostePay cards and six years for Public Administration customers.
Lastly, for the proper evaluation of the liquidity risk attributable to BancoPosta RFC, it should be borne in mind that, unless they are restricted, investments in euro area government securities are highly liquid assets and can be used as collateral in interbank repurchase agreements to obtain short-term financing. This practice is normally adopted by BancoPosta.
In order to effectively manage the risk in question, there are also uncommitted credit facilities available for overnight operations by BancoPosta RFC, a three-year committed facility granted by Cassa Depositi e Prestiti for repurchase agreement transactions up to a maximum of \u20ac3 billion, undrawn at 31 December 2023 and, finally, for intraday interbank transactions, BancoPosta RFC can access an intraday advance from the Bank of Italy and secured by securities with a nominal value of \u20ac2,758 million, undrawn at 31 December 2023.
Additional liquidity needs can be met by resorting to credit lines stipulated by the Parent Company, for details of which please refer to the section on liquidity risk of postal and business activities.
Based on the above information, the existing credit lines and the loans are adequate to meet financing requirements expected to date.
Liquidity risk
The following tables compare the financial liabilities and assets belonging to the insurance segment and outstanding at 31 December 2023.
Insurance Activities - Liquidity Risk - Liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Within 12 months
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Between 4 and 5 years
Over 5 years
Total
\u00a0
2023
\u00a0
Flows from Poste Vita group's policies
10,574
9,053
8,543
8,523
9,930
175,196
221,818
\u00a0
Financial liabilities
59
-
-
-
-
-
59
\u00a0
Trade payables
41
-
-
-
-
-
41
\u00a0
Other liabilities
702
3
-
-
-
74
778
\u00a0
Total at 31 December 2023
11,375
9,056
8,543
8,523
9,930
175,270
222,697
\u00a0
2022
\u00a0
Flows from Poste Vita group's policies
14,494
10,384
8,984
8,098
7,885
171,345
221,191
\u00a0
Financial liabilities
38
1
1
-
-
-
40
Trade payables
35
-
-
-
-
-
35
\u00a0
Other liabilities
567
-
-
-
54
-
621
\u00a0
Total at 31 December 2022
15,135
10,385
8,986
8,098
7,939
171,345
221,887
In the presentation of financial liabilities, expected cash outflows are broken down by maturity. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2023. The commitments of the insurance companies of the Group are reflected in the item \"Flows from Poste Vita group's policies\".
Insurance Activities - Liquidity Risk - Assets
Description(\u20acm)
Within 12 months
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Between 4 and 5 years
Over 5 years
Total
\u00a0
2023
\u00a0
Financial assets
19,132
13,159
11,588
13,843
12,861
173,474
244,057
\u00a0
Trade receivables
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
2
\u00a0
Other receivables and assets
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0134
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02,280
2,414
Cash and cash equivalents (*)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03,561
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-
3,561
\u00a0
Total at 31 December 2023
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a022,830
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a013,159
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a011,588
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a013,843
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a012,861
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0175,754
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0250,035
\u00a0
2022
\u00a0
Financial assets
16,690
12,345
12,378
10,867
12,564
165,710
230,554
Trade receivables
0
-
-
-
-
-
0
Other receivables and assets
223
-
-
-
2,321
-
2,544
Cash and cash equivalents (*)
2,732
-
-
-
-
-
2,732
\u00a0
Total at 31 December 2022
19,645
12,345
12,378
10,867
14,885
165,710
235,830
* Shown gross of liquidity elimination
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable. Investments include financial instruments held by the Group's insurance companies, shown on the basis of expected cash flows, consisting of principal and interest paid at the various payment dates.
The key point of note is the liquidity risk associated with the Class I and V policies issued by Poste Vita SpA. For said reason, for the purpose of analysis of the liquidity risk, for the policies issued by Poste Vita SpA, Asset/Liability Management (ALM) analyses are conducted to manage assets effectively in relation to its obligations to policyholders, and projections
of the effects deriving from financial market shocks (asset dynamics) and of the behaviour of policyholders (liability dynamics) are also drawn up.
At 31 December 2023, there were uncommitted credit lines for unsecured loans of \u20ac4 million, of which about \u20ac1 million was utilised.
Additional liquidity needs can be met by resorting to credit lines stipulated by the Parent Company, for details of which please refer to the section on liquidity risk of postal and business activities.
Based on the above information, the existing credit lines and the loans are adequate to meet financing requirements expected to date.
Liquidity risk
The following tables present a comparison of the financial liabilities and assets of the Postal and Business segment at 31 December 2022.
Postal and Business Activities - Liquidity risk - Liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial liabilities
825
2,219
304
3,348
\u00a0
369
1,879
1,081
3,329
Trade payables
1,749
-
-
1,749
1,811
-
-
1,811
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Other liabilities
1,264
224
1
1,489
1,284
209
5
1,498
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total Liabilities
3,838
2,443
305
6,586
\u00a0
3,464
2,088
1,086
6,638
In the table above, the expected cash outflows are broken down by maturity. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2022.
Postal and Business Activities - Liquidity risk - Assets
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
2
122
2
125
35
2
111
149
\u00a0
\u00a0
\u00a0
\u00a0
Trade receivables
1,658
2
-
1,660
1,708
2
-
1,710
\u00a0
\u00a0
\u00a0
\u00a0
Other receivables and assets
378
310
153
842
293
284
182
759
\u00a0
\u00a0
\u00a0
\u00a0
Tax credits Law no. 77/2020 (*)
59
273
137
469
63
247
162
472
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Cash and cash equivalents (**)
650
-
-
650
575
-
-
575
Total Assets
2,747
707
292
3,746
\u00a0
2,674
535
455
3,664
(*) The amount shown in the table also includes receivables for which seizure orders were received from judicial authorities.
(**) shown gross of liquidity elimination
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable. Investments include financial instruments held by the Parent Company, shown on the basis of expected cash flows, consisting of principal and interest paid at the various payment dates.
The committed and uncommitted credit lines available to the Group companies belonging to the operating segment in question, and the related uses are summarised in the table below.
Description(\u20acm)
Balance at 31.12.2023
\u00a0
Balance at 31.12.2022
\u00a0
Committed credit lines
2,450
2,450
Short-term loans
2,450
2,450
\u00a0
Uncommitted credit lines
2,162
2,120
Short-term loans
960
1,005
Current account overdrafts
185
145
Unsecured loans
1,017
969
\u00a0
Total
4,612
\u00a0
4,570
\u00a0
Uncommitted uses
554
622
Short-term loans
0
1
Unsecured loans
554
621
\u00a0
Total
554
\u00a0
622
No collateral has been provided to secure the credit lines obtained.
At 31 December 2023, the Parent Company had an EMTN - Euro Medium Term Note program of \u20ac2.5 billion in place, thanks to which the Group can raise an additional \u20ac1.5 billion on the capital market. As part of this programme, the loan with a nominal value of \u20ac50 million, privately placed and issued at par on 25 October 2013, was repaid in October 2023.
The existing credit lines and the loans are adequate to meet financing requirements expected to date.
Liquidity risk
The following tables show the comparison between financial liabilities and assets falling within the Payments and Card payments segment and outstanding at 31 December 2023.
Payment Services and Card Payments Activities - Liquidity Risk - Liabilities
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Financial liabilities
10,275
8
-
10,282
\u00a0
9,342
8
-
9,350
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Trade payables
390
-
-
390
\u00a0
307
-
-
307
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Other liabilities
84
2
0
85
\u00a0
61
1
-
62
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total Liabilities
10,748
10
0
10,757
\u00a0
9,710
9
-
9,720
In the table above, the expected cash outflows are broken down by maturity. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2023.
Payment Services and Card Payments Activities - Liquidity Risk - Assets
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
Within 12 months
Between 1 and 5 years
Over 5 years
Total
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
299
0
-
299
198
-
-
198
\u00a0
\u00a0
\u00a0
\u00a0
Trade receivables
155
-
-
155
94
-
-
94
\u00a0
\u00a0
\u00a0
\u00a0
Other receivables and assets
56
2
-
58
51
1
-
51
Cash and cash equivalents (*)
65
-
-
65
172
-
-
172
Total Assets
575
2
-
577
\u00a0
514
1
-
515
(*) Shown gross of liquidity elimination
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable.
At 31 December 2023, the companies in this segment also had credit lines of about \u20ac35 million for unsecured loans of around \u20ac15 million drawn.
Additional liquidity needs can be met by resorting to credit lines stipulated by the Parent Company, for details of which please refer to the section on liquidity risk of postal and business activities.
No collateral has been provided to secure the credit lines obtained.
The existing credit lines and the loans are adequate to meet financing requirements expected to date.
Liquidity risk
A comparison between liabilities and assets at 31 December 2023 is shown below:
The above table shows expected cash outflows, broken down by maturity and payables deriving from postal current accounts classified under Financial liabilities of BancoPosta RFC, represented on the basis of the statistical/econometric model that forecasts the interest rates and maturities typical of postal current accounts. Repayments of principal at nominal value are increased by interest payments calculated, where applicable, on the basis of the yield curve applicable at 31 December 2023.
In the case of assets, cash inflows are broken down by maturity, shown at nominal value and increased, where applicable, by interest receivable. Investments include financial instruments held mainly by BancoPosta RFC, shown on the basis of expected cash flows, consisting of principal and interest paid at the various payment dates.
Poste Italiane SpA's liquidity risk is mainly attributable to funding from BancoPosta RFC in postal current accounts and prepaid cards301F302 (\u20ac73,011 million) and the related investment in euro-government and/or Italian government-guaranteed securities (\u20ac100,242 million), margining inherent in derivative transactions, and tax credits acquired with reference to the Decreto Rilancio no. 34/2020 (later converted into Law no. 77 of 17 July 2020). The potential risk derives from a mismatch between the maturities of investments in securities and those of liabilities, represented by current accounts where the funds are available on demand, thus compromising the ability to meet its obligations to current account holders. For the monitoring of this mismatch, see the section in this paragraph entitled \"Quantitative Information - Poste Italiane Group - Financial Activities\".
In addition, in order to meet any liquidity needs, information on the committed and uncommitted credit lines available tothe Company, as well as their utilisation, is presented below:
(*) At 31 December 2023, unsecured loans were used for \u20ac320 million on behalf of Poste Italiane SpA and for \u20ac205 million on behalf of Group companies.
No collateral has been provided to secure the credit lines available.
At 31 December 2023, no committed and uncommitted credit lines were used for short-term financing.
The uncommitted credit lines are also available for overnight transactions entered into by BancoPosta RFC. In addition, from 5 December 2023, it may access a 3-year committed facility granted by Cassa Depositi e Prestiti for repurchase agreements up to a maximum of \u20ac3 billion, undrawn at 31 December 2023. Finally, the Bank of Italy has granted BancoPosta RFC access to intraday credit in order to fund intraday interbank transactions. Collateral for this credit facility is provided by securities with a nominal value of \u20ac2,758 million, undrawn at 31 December 2023. For further details, see the section in this paragraph entitled \"Quantitative Information - Poste Italiane Group - Financial Activities\".
Lastly, at 31 December 2023, Poste Italiane SpA had an EMTN - Euro Medium Term Note programme of \u20ac2.5 billion in place, thanks to which can raise an additional \u20ac1.5 billion on the capital market. As part of this programme, the loan with a nominal value of \u20ac50 million, privately placed and issued at par on 25 October 2013, was repaid in October 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page779-cflshid_351468-tag141630": { "value": "
Cash flow inflation risk
At 31 December 2023, cash flow inflation risk relates to inflation-linked government securities not subject to cash flow hedges or fair value hedges, held entirely by BancoPosta RFC for a nominal amount of \u20ac1,301 million (\u20ac1,022 million at 31 December 2022). The results of the sensitivity analyses performed on these securities do not show any significant effects on the pre-tax result.Cash flow inflation risk
Insurance Activities - Cash flow inflation rate risk
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
31 December 2022
\u00a0
31 December 2023
Description(\u20acm)
Risk exposure
Risk exposure
Profit/(Loss) before tax
Nominal
Carrying amount
Nominal
Carrying amount
+100bps
-100bps
\u00a0
\u00a0
\u00a0
Financial assets
\u00a0
\u00a0
Financial assets at amortised cost
72
89
72
91
0
(0)
\u00a0
Financial assets at FVTOCI
9,159
10,389
6,676
7,893
1
(1)
\u00a0
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
Total
9,232
10,478
6,748
7,984
1
(1)
At 31 December 2023, cash flow inflation risk relates to inflation-linked government securities not subject to cash flow hedges or fair value hedges. Of the total nominal value, securities totalling \u20ac6,701 million are held by Poste Vita SpA and securities totalling \u20ac41 million by Poste Assicura SpA.
With regard to insurance liabilities, the Group considers that the risk exposure does not entail a significant risk and, for this reason, deemed it inappropriate to stress.
Cash flow inflation riskAt 31 December 2023, cash flow inflation risk relates to inflation-linked government securities not subject to cash flow hedges or fair value hedges and are held entirely by BancoPosta RFC", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page812-cflshid_370491-tag141631": { "value": "
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
7.1 FAIR VALUE MEASUREMENT TECHNIQUES
The Poste Italiane Group has adopted a fair value policy, setting out the general principles and rules to be applied in determining fair value for the purposes of preparing the financial statements, conducting risk management assessments and supporting the market transactions carried out by the Finance departments of the various Group entities. The general principles for measuring financial instruments at fair value have not changed since 31 December 2022, except for appropriate additions to include models to support the fair value measurement of new types of financial instruments held by Net Group companies acquired during the financial year 2023. These general principles have been identified in compliance with the indications from the reference accounting standards and from the various Regulators (banking and insurance), ensuring uniformity in the valuation techniques adopted within the Group. The methods used have been revised, where necessary, to take into account developments in operational procedures and in market practices during the year.
In compliance with IFRS 13 - Fair Value Measurement, the following section provides information regarding the techniques used to measure the fair value of financial instruments within the Poste Italiane Group.
The assets and liabilities concerned (specifically assets and liabilities measured at fair value and measured at cost or amortised cost, for which fair value is required to be disclosed in the notes) are classified with reference to a hierarchy that reflects the materiality of the sources used for their valuation.
The hierarchy consists of 3 levels.
Level 1: this level is comprised of fair values determined with reference to unadjusted prices quoted in active markets for identical assets or liabilities to which the entity has access on the measurement date. For the Poste Italiane Group the following categories of financial instrument apply:
Bonds quoted on active markets:
\u2022Bonds issued by EU government bodies or non-government bodies: the measurement is based on bid prices, according to a hierarchy of sources where the MTS (the wholesale electronic market for government securities) ranks first, MILA (Milan Stock Exchange) second, for bonds intended primarily for retail customers, and lastly, CBBT (Composite Bloomberg Price);
\u2022Financial liabilities: measurement is based on the ask prices quoted by CBBT (Composite Bloomberg Bond Trader).
Equity securities and ETFs (Exchange Traded Funds) quoted on active markets: the valuation is made considering the price resulting from the last contract traded on the day on the relevant stock exchange.
Quoted open-end investment funds: measurement is based on the daily closing market price as provided by Bloomberg or the fund manager. Level 1 bond price quotations incorporate a credit risk component. Exchange rates published by the European Central Bank are used in determining the value of financial instruments denominated in currencies other than the euro.
Level 2: this level is comprised of fair values based on inputs other than Level 1 quoted market prices that are either directly or indirectly observable for the asset or liability302F303. For the Poste Italiane Group the following categories of financial instrument apply:
Bonds either quoted on inactive markets or not at all:
\u2022Straight Italian and international government and non-government bonds: valuation is based on discounted cash flow techniques involving the computation of the present value of future cash flows, inputting rates from yield curves incorporating spreads reflecting credit risk that are based on spreads determined with reference to quoted and liquid benchmark securities issued by the issuer, or by other companies with similar characteristics to the issuer. Yield curves may be slightly adjusted to reflect liquidity risk relating to the absence of an active market.
\u2022Structured bonds: valuation is based on a building block approach, entailing decomposition of a structured position into its basic components: the bond and option components. The bond component is measured by discounting cash flows to present value in line with the approach applicable to straight bonds, as defined above. The option component - which considering the features of the bonds included in the portfolio of the Poste Italiane Group relates to interest rate risk - is measured in accordance with a standard closed form expression as with classical option valuation models with underlyings exposed to such risks.
Unquoted equities: this category may be included here provided it is possible to use the price of quoted equities of the same issuer as a benchmark. The price inferred in this manner would be adjusted through the application of the discount, quoted by primary market counterparties, which represents the implicit cost in the process to align the value of the unquoted shares to the quoted ones.
Unquoted open-end investment funds: measurement is based on the latest available NAV (Net Asset Value) as provided by Bloomberg or as determined by the fund manager.
Derivative financial instruments:
\u2022Interest Rate Swaps:
Plain vanilla interest rate swaps: valued using discounted cash flow techniques, involving the computation of the present value of future differentials between the receiver and payer legs of the swap. The construction of yield curves to estimate future cash flows indexed to market parameters (money market rates and/or inflation) and computation of the present value of future differentials are carried out using techniques commonly used in capital markets.
Interest rate swaps with an embedded option: valuation is based on a building block approach, entailing decomposition of a structured position into its basic components: the linear and option components. The linear component is measured using the discounted cash flow techniques described for plain vanilla interest rate swaps above. Using the financial derivatives held in Poste Italiane's portfolio as an example, the option component is derived from interest rate or inflation rate risks and is valued using a closed form expression, as with classical option valuation models with underlyings exposed to such risks.
\u2022Bond forwards: valuation is based on the present value of the differential between the forward price of the underlying instrument as of the measurement date and the settlement price.
\u2022Warrants: considering the features of the securities held, measurement is based on the equity local volatility model. In particular, considering that buyback agreements have been entered into with the counterparties that structured these warrants, and that such counterparties use valuation models consistent with those used by the Group, these instruments are measured on the basis of the bid price quoted by the counterparties.
\u2022Currency forwards: valuation is based on the differential between the reciprocal currency registered at the measurement date and the reciprocal currency fixed at the trade date.
The financial derivatives held in Poste Italiane's portfolio may be pledged as collateral and the fair value, consequently, need not be adjusted for counterparty risk. The yield curve used to compute present value is selected to be consistent with the manner in which cash collateral is remunerated. This approach is also followed for security in the form of pledged debt securities, given the limited level of credit risk inherent in the securities held as collateral by the Poste Italiane Group.
In the rare instances where collateral agreements do not substantially reduce counterparty risk, measurement takes place by discounting to present value the cash flows generated by the securities held as collateral, using as the input a yield curve that reflects the spread applicable to the issuer's credit risk. Alternatively, use is made of fair value to calculate the CVA/DVA (Credit Valuation Adjustment / Debit Valuation Adjustment), in relation to the main technical and financial characteristics of the agreements and the counterparty's probability of default.
Reverse Repos: are valued using discounted cash flow techniques involving the computation of future contractual cash flows. These instruments may also be used for collateral and in such cases fair value need not be adjusted for the counterparty's credit risk.
Fixed-rate and variable-rate loans: the measurement is carried out using discounted cash flow techniques. The counterparty's credit spread is considered through:
\u2022use of the Italian government yield curve or the credit default swap (CDS) of the Italian Republic, in the case of Italian government agencies;
\u2022use of quoted CDS yield curves or, if not available, the adoption of \"synthetic\" CDS yield curves represented by the counterparty's rating, as constructed starting from the input data observable on the market;
\u2022use of yield curves based on the specific issuer's quoted bond prices.
Financial liabilities either quoted on inactive markets or not at all:
\u2022Straight bonds: these are measured by discounting their future cash flows using as input a yield curve reflecting the spread applicable to the issuer's credit risk;
\u2022Structured bonds: valuation is based on a building block approach, entailing decomposition of a structured position into its basic components: the bond and option components. The bond component is measured by discounting cash flows to present value in line with the approach applicable to straight bonds, as defined above. The option component attributable to interest rate risk which, considering the features of the bonds issued by companies in the Poste Italiane Group, is measured in accordance with a standard closed form expression as with classical option valuation models with underlyings exposed to such risks.
\u2022Borrowings: these are measured by discounting their future cash flows using as input a yield curve reflecting the spread applicable to the credit risk.
\u2022Repurchase agreements: are valued using discounted cash flow techniques involving the computation of future contractual cash flows. Repos may also be used for collateral and in such cases fair value need not be adjusted for the counterparty's credit risk.
Level 3: this category includes the fair value measurement of assets and liabilities using inputs which cannot be observed, in addition to Level 2 inputs. For the Poste Italiane Group the following categories of financial instrument apply:
Fixed-rate and variable-rate loans: the measurement is carried out using discounted cash flow techniques. The counterparty's credit spread is set according to best practices, by using the probability of default and transition matrices created by external information providers and loss given default parameters determined by prudential regulations for banks or in accordance with market standards.
Closed-end unquoted funds: these include funds that invest mainly in unquoted instruments. Their fair value is determined by considering the latest NAV (Net Asset Value), available at least every six months, reported by the fund manager. This NAV is adjusted according to the capital calls and reimbursements announced by the managers which occurred between the latest NAV date and the valuation date.
Investment property (excluding former service accommodation) and inventories of properties held for sale: The fair value of both investment property and inventories has been determined mainly by discounting to present value the cash flows expected to be generated by the rental agreements and/or proceeds from sales, net of related costs. The process uses a discount rate that considers analytically the risks typical of the property.
Investment property (former service accommodation): The value of this investment property is determined on the basis of the applicable law (Law 560 of 24 December 1993), which sets the selling price in case of sale to the tenant or the minimum selling price if the property is sold through a public auction.
Unquoted equity instruments: this category includes shares for which no price is observable directly or indirectly in the market. Measurement of these instruments is based on the price of quoted equities of the same issuer as a benchmark. The price inferred in this manner would be adjusted through the application of the discount implicit in the process to align the value of the unquoted shares to the quoted ones. In the specific case of equity instruments relating to unlisted companies at the \"start-up\" phase, by contrast the fair value is determined by considering the implicit valuation at the time of acquisition, adjusted by value adjustments to take account of any changes in price resulting from significant transactions303F304 observable on the market in the 12 months prior to the reporting date. Alternatively, and in the absence of significant transactions, the fair value of the share is determined using alternative methods (verification of financial data that can be inferred from the company's Business Plans if available and analysis of the company's performance, multiple market use, etc.).
Tax credits Law no. 77/2020: this category includes credits acquired with reference to the relaunch decree no. 34/2020 (later converted into Law no. 77 of 17 July 2020) for which no directly or indirectly observable market prices are available. For this type of instrument, the method of determining fair value involves the application of the discounted cash flow valuation technique, which consists of discounting cash flows to maturity using the yield curve constructed by adding to the risk-free rate curve the extra yield calculated starting from the price at the date of purchase of the receivables. The spread remains fixed for the life of the instrument.
Forwards on unquoted equities: for these instruments, the valuation of the counterparty is recalculated by discounting the difference between the forward price of the equity security underlying the derivative updated to the valuation date and the settlement price.
Equity held in co-operative banks: this category includes shares that have been admitted to the Hi-MTF market (Vorvel) in light of Consob Communication no. 92492 of 1/10/2016 \"Recommendation on the distribution of financial instruments through a multilateral trading facility\" as well as following the changes introduced by Directive 2014/65/EU of 15 May 2014
(MiFID II) and EU Regulation no. 600/2014 (MiFIR). For these equity instruments, the alternative model of \"Hi-MTF market transactions\" was adopted, which:
-uses the price of the last available transaction on the Hi-MTF market, provided there are at least two transactions per month over a 3-month horizon;
-applies a liquidity discount on the price equal to a maximum of between zero and the ratio between the value of the position held by the Group and the accumulated value of all transactions in the last 6 months, minus one.
Alternative and Level 3 Funds: this category includes quoted and unquoted open-ended funds that cannot be categorised as Level 2 and all alternative funds. The fair value of these Funds is represented by the NAV, based on the value of the underlying assets, adjusted if necessary on the basis of the internal control system
7.2 FAIR VALUE HIERARCHY
The following table shows an analysis of financial instruments measured at fair value at 31 December 2023, classified by level in the fair value hierarchy.
Fair value hierarchy
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets at FVTOCI
136,848
2,447
299
139,594
122,170
7,913
152
130,235
Equity instruments
345
0
204
549
343
0
110
453
Fixed income instruments
136,503
2,447
95
139,046
121,827
7,411
42
129,280
Other investments
-
-
-
-
-
502
-
502
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets at FVTPL
4,441
35,892
7,873
48,205
4,996
30,335
8,170
43,501
Receivables
-
-
-
-
-
-
110
110
Equity instruments
482
3
27
512
258
26
20
304
Fixed income instruments
2,440
120
3
2,564
2,139
146
-
2,285
Other investments
1,519
35,768
7,843
45,129
2,599
30,163
8,040
40,802
\u00a0
\u00a0
\u00a0
\u00a0
Derivative financial instruments
-
4,257
-
4,257
-
6,110
-
6,110
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
141,289
42,596
8,172
192,056
127,166
44,358
8,323
179,846
\u00a0
\u00a0
\u00a0
\u00a0
Financial liabilities
\u00a0
\u00a0
\u00a0
\u00a0
Financial liabilities at fair value
-
-
-
-
-
-
-
-
Derivative financial instruments
(0)
(1,136)
(3)
(1,138)
(0)
(971)
(4)
(975)
\u00a0
\u00a0
\u00a0
\u00a0
Total
(0)
(1,136)
(3)
(1,138)
(0)
(971)
(4)
(975)
Transfers between levels 1 and 2, relating entirely to the Poste Vita insurance group, are shown below:
Transfers from Level 1 to Level 2
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
\u00a0
31.12.2022
Level 1
Level 2
\u00a0
Level 1
Level 2
Transfers of financial assets
(1,666)
1,666
\u00a0
(1,270)
1,270
\u00a0
\u00a0
\u00a0
\u00a0
Financial assets at FVTOCI
\u00a0
\u00a0
Equity instruments
-
-
-
-
Fixed income instruments
(137)
137
(583)
583
Structured bonds
-
-
-
-
Other investments
-
-
-
-
Financial assets at FVTPL
Receivables
-
-
-
-
Equity instruments
(1)
1
(6)
6
Fixed income instruments
(43)
43
(66)
66
Structured bonds
-
-
-
-
Other investments
(1,484)
1,484
(613)
613
\u00a0
\u00a0
\u00a0
\u00a0
Transfers of financial liabilities
-
-
-
-
Financial liabilities at fair value
-
-
-
-
Derivative financial instruments
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
Net transfers from Level 1 to Level 2
(1,666)
1,666
\u00a0
(1,270)
1,270
Reclassifications from level 1 to level 2 relate to financial instruments whose value, at 31 December 2023, is not observable in a liquid and active market, as defined in the Group's Fair Value Policy. Reclassifications from level 2 to level 1, on the other hand, relate to financial instruments whose value, at 31 December 2023, is observable in a liquid and active market.
Movements in level 3 during the year are shown below:
Changes in financial instruments - level 3
\u00a0
\u00a0
\u00a0
\u00a0
Description(\u20acm)
Financial assets
Financial assets at FVTOCI
Financial assets at FVTPL
Derivative financial instruments
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Balance at 1 January 2023
153
8,170
-
8,323
\u00a0
\u00a0
Purchases/Issues
27
687
-
714
Sales/Extinguishment of initial accruals
(27)
(482)
-
(509)
Redemptions
-
-
-
-
Changes in fair value through profit or loss
-
(76)
-
(76)
Changes in fair value through equity
(7)
-
-
(7)
Transfers to profit or loss
-
-
-
-
Gains/Losses in profit or loss due to sales
-
-
-
-
Transfers to level 3
66
13
-
79
Transfers to other levels
(16)
(461)
-
(477)
Changes in amortised cost
-
0
-
0
Write-off
(0)
(0)
-
(1)
Other changes (including accruals at end of period)
93
0
-
93
Change in scope
11
22
32
\u00a0
\u00a0
Balance at 31 December 2023
299
7,873
-
8,172
Financial instruments classified in level 3 are held primarily by Poste Vita SpA and, to a residual extent, by Poste Italiane SpA, PostePay SpA, and the companies Net Life and Net Insurance.
In the case of the Group's insurance company, instruments in level 3 regard funds that invest primarily in unquoted instruments, whose fair value measurement is based on the latest available NAV (Net Asset Value) as announced by the fund manager. This NAV is adjusted according to the capital calls and reimbursements announced by the managers and occurring between the latest NAV date and the measurement date. These financial instruments primarily consist of investments in private equity funds and, to a lesser extent, real estate funds associated entirely with Class I products
related to separately managed accounts. Movements during the period regard the purchase of new investments, redemptions of units of unquoted close-end funds and changes in fair value during the period.
At 31 December 2023, in compliance with both the aforementioned fair value guidelines of the Poste Italiane Group and additional requirements contained in the additional guidelines approved by the Poste Vita's Board of Directors on 15 December 2021, approximately \u20ac461.3 million of financial instruments were reclassified from level 3 fair value to level 2 fair value, referring mainly to class III UCITS reclassified following the analyses carried out from a look-through perspective.
Poste Italiane SpA
For the sake of completeness, the following table shows an analysis of financial instruments of Poste Italiane SpA measured at fair value at 31 December 2023, classified by level in the fair value hierarchy.
There were no transfers of the related financial instruments measured at fair value on a recurring basis between Level 1 and Level 2 in the year under review.
Movements in level 3 during the year are shown below:
The financial instruments classified in level 3 are mainly held by the RFC. Specifically, changes during the year mainly relate to the purchase of an additional share of sennder Technologies GmbH, for a total of \u20ac93 million, classified as a financial asset at fair value through other comprehensive income, and the subscription, for approximately \u20ac8.5 million, of
a portion of the convertible bond issued by sennder Technologies GmbH and classified as a financial asset at fair value through profit or loss.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page812-cflshid_370491-tag141632": { "value": "
7.1 FAIR VALUE MEASUREMENT TECHNIQUES
The Poste Italiane Group has adopted a fair value policy, setting out the general principles and rules to be applied in determining fair value for the purposes of preparing the financial statements, conducting risk management assessments and supporting the market transactions carried out by the Finance departments of the various Group entities. The general principles for measuring financial instruments at fair value have not changed since 31 December 2022, except for appropriate additions to include models to support the fair value measurement of new types of financial instruments held by Net Group companies acquired during the financial year 2023. These general principles have been identified in compliance with the indications from the reference accounting standards and from the various Regulators (banking and insurance), ensuring uniformity in the valuation techniques adopted within the Group. The methods used have been revised, where necessary, to take into account developments in operational procedures and in market practices during the year.
In compliance with IFRS 13 - Fair Value Measurement, the following section provides information regarding the techniques used to measure the fair value of financial instruments within the Poste Italiane Group.
The assets and liabilities concerned (specifically assets and liabilities measured at fair value and measured at cost or amortised cost, for which fair value is required to be disclosed in the notes) are classified with reference to a hierarchy that reflects the materiality of the sources used for their valuation.
The hierarchy consists of 3 levels.
Level 1: this level is comprised of fair values determined with reference to unadjusted prices quoted in active markets for identical assets or liabilities to which the entity has access on the measurement date. For the Poste Italiane Group the following categories of financial instrument apply:
Bonds quoted on active markets:
\u2022Bonds issued by EU government bodies or non-government bodies: the measurement is based on bid prices, according to a hierarchy of sources where the MTS (the wholesale electronic market for government securities) ranks first, MILA (Milan Stock Exchange) second, for bonds intended primarily for retail customers, and lastly, CBBT (Composite Bloomberg Price);
\u2022Financial liabilities: measurement is based on the ask prices quoted by CBBT (Composite Bloomberg Bond Trader).
Equity securities and ETFs (Exchange Traded Funds) quoted on active markets: the valuation is made considering the price resulting from the last contract traded on the day on the relevant stock exchange.
Quoted open-end investment funds: measurement is based on the daily closing market price as provided by Bloomberg or the fund manager. Level 1 bond price quotations incorporate a credit risk component. Exchange rates published by the European Central Bank are used in determining the value of financial instruments denominated in currencies other than the euro.
Level 2: this level is comprised of fair values based on inputs other than Level 1 quoted market prices that are either directly or indirectly observable for the asset or liability302F303. For the Poste Italiane Group the following categories of financial instrument apply:
Bonds either quoted on inactive markets or not at all:
\u2022Straight Italian and international government and non-government bonds: valuation is based on discounted cash flow techniques involving the computation of the present value of future cash flows, inputting rates from yield curves incorporating spreads reflecting credit risk that are based on spreads determined with reference to quoted and liquid benchmark securities issued by the issuer, or by other companies with similar characteristics to the issuer. Yield curves may be slightly adjusted to reflect liquidity risk relating to the absence of an active market.
\u2022Structured bonds: valuation is based on a building block approach, entailing decomposition of a structured position into its basic components: the bond and option components. The bond component is measured by discounting cash flows to present value in line with the approach applicable to straight bonds, as defined above. The option component - which considering the features of the bonds included in the portfolio of the Poste Italiane Group relates to interest rate risk - is measured in accordance with a standard closed form expression as with classical option valuation models with underlyings exposed to such risks.
Unquoted equities: this category may be included here provided it is possible to use the price of quoted equities of the same issuer as a benchmark. The price inferred in this manner would be adjusted through the application of the discount, quoted by primary market counterparties, which represents the implicit cost in the process to align the value of the unquoted shares to the quoted ones.
Unquoted open-end investment funds: measurement is based on the latest available NAV (Net Asset Value) as provided by Bloomberg or as determined by the fund manager.
Derivative financial instruments:
\u2022Interest Rate Swaps:
Plain vanilla interest rate swaps: valued using discounted cash flow techniques, involving the computation of the present value of future differentials between the receiver and payer legs of the swap. The construction of yield curves to estimate future cash flows indexed to market parameters (money market rates and/or inflation) and computation of the present value of future differentials are carried out using techniques commonly used in capital markets.
Interest rate swaps with an embedded option: valuation is based on a building block approach, entailing decomposition of a structured position into its basic components: the linear and option components. The linear component is measured using the discounted cash flow techniques described for plain vanilla interest rate swaps above. Using the financial derivatives held in Poste Italiane's portfolio as an example, the option component is derived from interest rate or inflation rate risks and is valued using a closed form expression, as with classical option valuation models with underlyings exposed to such risks.
Bond forwards: valuation is based on the present value of the differential between the forward price of the underlying instrument as of the measurement date and the settlement price.
\u2022Warrants: considering the features of the securities held, measurement is based on the equity local volatility model. In particular, considering that buyback agreements have been entered into with the counterparties that structured these warrants, and that such counterparties use valuation models consistent with those used by the Group, these instruments are measured on the basis of the bid price quoted by the counterparties.
\u2022Currency forwards: valuation is based on the differential between the reciprocal currency registered at the measurement date and the reciprocal currency fixed at the trade date.
The financial derivatives held in Poste Italiane's portfolio may be pledged as collateral and the fair value, consequently, need not be adjusted for counterparty risk. The yield curve used to compute present value is selected to be consistent with the manner in which cash collateral is remunerated. This approach is also followed for security in the form of pledged debt securities, given the limited level of credit risk inherent in the securities held as collateral by the Poste Italiane Group.
In the rare instances where collateral agreements do not substantially reduce counterparty risk, measurement takes place by discounting to present value the cash flows generated by the securities held as collateral, using as the input a yield curve that reflects the spread applicable to the issuer's credit risk. Alternatively, use is made of fair value to calculate the CVA/DVA (Credit Valuation Adjustment / Debit Valuation Adjustment), in relation to the main technical and financial characteristics of the agreements and the counterparty's probability of default.
Reverse Repos: are valued using discounted cash flow techniques involving the computation of future contractual cash flows. These instruments may also be used for collateral and in such cases fair value need not be adjusted for the counterparty's credit risk.
Fixed-rate and variable-rate loans: the measurement is carried out using discounted cash flow techniques. The counterparty's credit spread is considered through:
\u2022use of the Italian government yield curve or the credit default swap (CDS) of the Italian Republic, in the case of Italian government agencies;
\u2022use of quoted CDS yield curves or, if not available, the adoption of \"synthetic\" CDS yield curves represented by the counterparty's rating, as constructed starting from the input data observable on the market;
\u2022use of yield curves based on the specific issuer's quoted bond prices.
Financial liabilities either quoted on inactive markets or not at all:
\u2022Straight bonds: these are measured by discounting their future cash flows using as input a yield curve reflecting the spread applicable to the issuer's credit risk;
\u2022Structured bonds: valuation is based on a building block approach, entailing decomposition of a structured position into its basic components: the bond and option components. The bond component is measured by discounting cash flows to present value in line with the approach applicable to straight bonds, as defined above. The option component attributable to interest rate risk which, considering the features of the bonds issued by companies in the Poste Italiane Group, is measured in accordance with a standard closed form expression as with classical option valuation models with underlyings exposed to such risks.
\u2022Borrowings: these are measured by discounting their future cash flows using as input a yield curve reflecting the spread applicable to the credit risk.
\u2022Repurchase agreements: are valued using discounted cash flow techniques involving the computation of future contractual cash flows. Repos may also be used for collateral and in such cases fair value need not be adjusted for the counterparty's credit risk.
Level 3: this category includes the fair value measurement of assets and liabilities using inputs which cannot be observed, in addition to Level 2 inputs. For the Poste Italiane Group the following categories of financial instrument apply:
Fixed-rate and variable-rate loans: the measurement is carried out using discounted cash flow techniques. The counterparty's credit spread is set according to best practices, by using the probability of default and transition matrices created by external information providers and loss given default parameters determined by prudential regulations for banks or in accordance with market standards.
Closed-end unquoted funds: these include funds that invest mainly in unquoted instruments. Their fair value is determined by considering the latest NAV (Net Asset Value), available at least every six months, reported by the fund manager. This NAV is adjusted according to the capital calls and reimbursements announced by the managers which occurred between the latest NAV date and the valuation date.
Investment property (excluding former service accommodation) and inventories of properties held for sale: The fair value of both investment property and inventories has been determined mainly by discounting to present value the cash flows expected to be generated by the rental agreements and/or proceeds from sales, net of related costs. The process uses a discount rate that considers analytically the risks typical of the property.
Investment property (former service accommodation): The value of this investment property is determined on the basis of the applicable law (Law 560 of 24 December 1993), which sets the selling price in case of sale to the tenant or the minimum selling price if the property is sold through a public auction.
Unquoted equity instruments: this category includes shares for which no price is observable directly or indirectly in the market. Measurement of these instruments is based on the price of quoted equities of the same issuer as a benchmark. The price inferred in this manner would be adjusted through the application of the discount implicit in the process to align the value of the unquoted shares to the quoted ones. In the specific case of equity instruments relating to unlisted companies at the \"start-up\" phase, by contrast the fair value is determined by considering the implicit valuation at the time of acquisition, adjusted by value adjustments to take account of any changes in price resulting from significant transactions303F304 observable on the market in the 12 months prior to the reporting date. Alternatively, and in the absence of significant transactions, the fair value of the share is determined using alternative methods (verification of financial data that can be inferred from the company's Business Plans if available and analysis of the company's performance, multiple market use, etc.).
Tax credits Law no. 77/2020: this category includes credits acquired with reference to the relaunch decree no. 34/2020 (later converted into Law no. 77 of 17 July 2020) for which no directly or indirectly observable market prices are available. For this type of instrument, the method of determining fair value involves the application of the discounted cash flow valuation technique, which consists of discounting cash flows to maturity using the yield curve constructed by adding to the risk-free rate curve the extra yield calculated starting from the price at the date of purchase of the receivables. The spread remains fixed for the life of the instrument.
Forwards on unquoted equities: for these instruments, the valuation of the counterparty is recalculated by discounting the difference between the forward price of the equity security underlying the derivative updated to the valuation date and the settlement price.
Equity held in co-operative banks: this category includes shares that have been admitted to the Hi-MTF market (Vorvel) in light of Consob Communication no. 92492 of 1/10/2016 \"Recommendation on the distribution of financial instruments through a multilateral trading facility\" as well as following the changes introduced by Directive 2014/65/EU of 15 May 2014
(MiFID II) and EU Regulation no. 600/2014 (MiFIR). For these equity instruments, the alternative model of \"Hi-MTF market transactions\" was adopted, which:
-uses the price of the last available transaction on the Hi-MTF market, provided there are at least two transactions per month over a 3-month horizon;
-applies a liquidity discount on the price equal to a maximum of between zero and the ratio between the value of the position held by the Group and the accumulated value of all transactions in the last 6 months, minus one.
Alternative and Level 3 Funds: this category includes quoted and unquoted open-ended funds that cannot be categorised as Level 2 and all alternative funds. The fair value of these Funds is represented by the NAV, based on the value of the underlying assets, adjusted if necessary on the basis of the internal control system
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page820-cflshid_374843-tag141633": { "value": "8. HEDGING TRANSACTIONS
Below is a description of the hedging transactions entered into by the Poste Italiane Group, as distinguished between fair value hedges and cash flow hedges, which are accounted for as per IAS 39 \u2013 Financial Instruments: Recognition and Measurement. The fair value hedges and cash flow hedges described below refer mainly to fixed income instruments or inflation-linked securities in relation to BancoPosta operations.
Hedging transactions - Fair value hedges
Hedging transactions on fixed income and inflation-linked government bonds
The Poste Italiane Group has a government bond portfolio \u2013 made up of fixed-rate BTPs and inflation-linked BTPs \u2013 subject to movements in fair value due to changes in interest rates and in the inflation rate.
To limit the effects of interest rates on fair value, BancoPosta RFC enters into Over the Counter (OTC) interest rate swaps to hedge the fair value of the bonds held in the portfolio. The objective of these transactions is to have instruments that can offset changes in fair value of the portfolio due to interest rate fluctuations and the rate of inflation. The credit risk of the Italian Republic is not hedged and is set for the duration of the swap.
Full hedges and partial hedges are implemented, with the start date equal to the date of purchase of the instrument (swap spot start) and after the purchase of the instrument (swap forward start), respectively.
The Group evaluates the effectiveness of every hedging relationship in offsetting movements in fair value through a retrospective effectiveness test and a prospective effectiveness test304F305, using the approaches illustrated in the following notes.
The retrospective effectiveness test is run by utilising the \"dollar offset approach through the hypothetical derivative305F306\". With this approach, consideration is given to the hedge ratio of the change in fair value of the actual derivative to the change in fair value of the hypothetical derivative occurred between inception and the valuation date. The hedge is considered effective if the hedge ratio falls in the interval between 80% and 125%. The hypothetical derivative and the actual hedging instrument have a settlement date consistent with the hedge inception (spot or forward start) and differ solely in their spread which is considered, as already indicated, the main source of ineffectiveness306F307. The partial
For the purposes of the prospective effectiveness test, different approaches have been adopted, depending on the characteristics of the hedging instrument. Specifically:
\u2022the \"Critical terms307F308\" approach for swap spot start, for which it has been determined at inception that the characteristics of the fixed leg make it possible to replicate exactly the fixed cash flows generated by the hedged item;
\u2022the \"Dollar offset through the hypothetical derivative\" approach for forward start swaps and forward sales of the subsidiary Poste Vita, for which the prospective effectiveness test is performed by calculating the hedge ratio between the change in fair value of the hypothetical derivative and the change in fair value of the actual derivative308F309. The hedge is considered effective if the hedge ratio falls in the interval between 80% and 125%.
With respect to the Poste Vita Group, forward sales expired in 2021 and were entered into in order to preserve, following unexpected changes in interest rates and/or credit risk, unrealised gains on government bonds of the Separately Managed Account Posta ValorePi\u00f9. The maturity of these positions was set to take into account the mismatch of cash flows between the portfolio of financial assets and liabilities.
Hedging on repurchase agreements
The Poste Italiane Group carries out transactions in repurchase agreements, on euro-government securities or with the guarantee of the Italian state for various purposes, including to invest in government bonds, to meet liquidity needs arising from the dynamics of funding on current accounts, to actively manage the treasury position and to manage guarantee deposits for collateralisation transactions. These transactions are mainly fixed-rate transactions and are therefore exposed to changes in fair value due to fluctuations in interest rates.
To limit the effects of interest rates on fair value, the Group enters into Over the Counter (OTC) interest rate swaps (fair value hedges) designated as specific hedges of repurchase agreements in the portfolio.
The Group evaluates the effectiveness of every hedging relationship in offsetting movements in fair value through a retrospective effectiveness test and a prospective effectiveness test, using the approaches illustrated in the following notes.
The retrospective effectiveness test is run by utilising the \"dollar offset approach through the hypothetical derivative\". With this approach, consideration is given to the hedge ratio of the change in fair value of the actual derivative to the change in fair value of the hypothetical derivative occurred between inception and the valuation date. The hedge is considered effective if the hedge ratio falls in the interval between 80% and 125%. The hypothetical derivative and the actual derivative have a settlement date consistent with the hedge inception and differ solely in their fixed rate component which is considered the main source of ineffectiveness309F310. The partial ineffectiveness of the hedge, equal to the difference between the changes in value of the two derivatives (hypothetical and actual) represents the net effect of the hedge recognised separately in profit or loss.
For the purposes of the prospective effectiveness test, the Group adopts the \"dollar offset approach through the hypothetical derivative\", performed by calculating the hedge ratio between the change in fair value of the hypothetical derivative and the change in fair value of the actual derivative310F311. The hedge is considered effective if the hedge ratio falls in the interval between 80% and 125%.
Hedging transactions \u2013 Cash flow hedges
Hedging transactions on inflation-linked government bonds and forecast transactions
To limit the exposure to interest rate risk deriving from the need to reinvest the cash generated by maturing bonds held in portfolio and the 10-year indexed component of yields on the deposit with the MEF of inflows from the Public Administration, BancoPosta RFC enters, if necessary, into forward purchases. In addition, to pursue the stabilisation of returns, forward sales are entered into. These derivatives qualify as cash flow hedges of forecast transactions.
In addition, the Group has a portfolio of inflation-linked BTPs subject to cash flow variability in relation to inflation.
To limit the effects of interest rates on cash flows, the Group enters into OTC interest rate swaps or inflation swaps to hedge the cash flows of the bonds held in portfolio. The objective of these transactions is to stabilise until maturity the return of the instrument, regardless of movements of the variable parameter.
The Group evaluates the effectiveness of the designated derivative in every hedging relationship through a retrospective effectiveness test and a prospective effectiveness test.
With regards to the hedges of forecast transactions, the retrospective effectiveness test involves the calculation of a hedge ratio defined as the ratio of the difference between the fair value of the forward transaction entered into with the counterparty on the test and inception date and the present value of the difference between the theoretical forward price of the BTP calculated at the test and inception date. Assuming a perfect match between the forward prices of the counterparties and the theoretical forward prices, the hedge ratio is always equal to 100%. As such, there are no sources of ineffectiveness.
For the purposes of the prospective effectiveness test, the critical terms approach is applied, considering at inception the consistency between the hedging instrument and the hedged item on the basis of the qualitative characteristics of the contracts311F312.
With respect to inflation-linked bonds, the retrospective effectiveness test considers the hedge ratio between the change in fair value of the actual derivative to the change in fair value of the hypothetical derivative occurred between the date of inception and the valuation date. The hedge is considered effective if the hedge ratio falls in the interval between 80% and 125%.
The hypothetical derivative and the actual derivative have the settlement date that matches the inception of the hedge and differ in terms of their fixed income component312F313. Moreover, for the derivatives used to hedge inflation-linked BTP, the fair value at the settlement date reflects also the interest accrued of the instrument accrued from the latest interest payment date to the date of settlement of the derivative. As such, both are considered the main sources of ineffectiveness.
The change in fair value of the actual derivative is recognised through equity, for the effective portion of the hedge, while the change in fair value of the ineffective portion is recognised through profit or loss.
For the purposes of the prospective effectiveness test, different approaches have been applied, depending on the characteristics of the hedging swap. Specifically:
\u2022the \"Critical terms\" approach for derivatives for which it has been determined at inception that the characteristics of the indexed leg of the swap make it possible to replicate exactly the variable cash flows generated by the hedged item;
\u2022the \"Dollar offset through the hypothetical derivative\" approach for derivative contracts with a fixed rate applicable to a nominal amount growing constantly at six-month intervals until the derivative expires. For these contracts the prospective effectiveness test is performed by calculating the hedge ratio between the change in fair value of the hypothetical derivative and the change in fair value of the actual derivative313F314. The hedge is considered effective if the hedge ratio falls in the interval between 80% and 125%.
Effects of hedging transactions on profit or loss and financial position
The table below shows the hedging instruments by expiration date. The average interest rate of the interest rate swaps shown represents the contractually expected average fixed rate of the hedging transaction by maturity band.
Time distribution based on remaining duration of cash flow hedge contracts\u00a0\u00a0\u00a0\u00a0\u00a0
(\u20acm)\u00a0Maturity
\u00a0Up to 1 year\u00a01 - 5 years\u00a0Over 5 years \u00a0Total
\u00a0\u00a0
Cash flow hedges - Interest rate risk\u00a0\u00a0
\u00a0\u00a0
Interest rate swaps\u00a0\u00a0
Nominal- 609 2,678 3,287
Average rate %\u00a0- \u00a04.832%\u00a03.617%\u00a03.842%
Time distribution based on remaining duration of fair value hedge contracts\u00a0\u00a0\u00a0\u00a0\u00a0
(\u20acm)\u00a0Maturity
\u00a0Up to 1 year\u00a01 - 5 years\u00a0Over 5 years \u00a0Total
\u00a0\u00a0\u00a0
Fair value hedges - Interest rate risk\u00a0\u00a0
Interest rate swaps\u00a0
Nominal4,021 - 25,006 29,027
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
The table below shows the effects of hedging transactions, broken down by type, on profit or loss and the financial position.
Fair value hedges - Interest rate risk\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
(\u20acm)\u00a0Nominal\u00a0Carrying amount*\u00a0Accumulated amount of fair value hedge adjustments on the hedged item\u00a0Change in value used to recognise ineffective portion of hedge \u00a0Accumulated amount of fair value hedge adjustments on the hedged item in case of discontinuing
Hedged items\u00a0AssetsLiabilitiesAssetsLiabilities\u00a0
Fixed income instruments, of which:\u00a0
at amortised cost\u00a011,080 - (1,944)\u00a0340 (419)
at FVTOCI\u00a011,478 - \u00a0\u00a0383 (615)
Repurchase agreements\u00a0- (3,966)\u00a038 (103)-
Hedging instruments\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Interest rate swaps29,027 4,252 (617)\u00a0\u00a0\u00a0(621)\u00a0
Profits/(losses) on hedging recognised in P&L\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(1)\u00a0\u00a0
*Not including provision to cover expected losses
Cash flow hedges - Rate risk \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
(\u20acm)\u00a0Nominal\u00a0Carrying amount\u00a0Change in value used to recognise ineffective portion of hedge \u00a0Cash flow hedges
Hedged items\u00a0AssetsLiabilities\u00a0Hedge reserveDiscontinued
Fixed income instruments, of which:\u00a0\u00a0\u00a0\u00a0\u00a0
at FVTOCI\u00a03,730 - 38 \u00a0\u00a0\u00a0\u00a0
Hedging instruments\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Forward purchases- - - - 46 - -
Interest rate swaps3,287 5 (518)(38)(461)- -
Profits/(losses) on hedging recognised in P&L\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
The table below shows the effects of cash flow hedges on other comprehensive income.
Impact on OCI of cash flow hedges - Rate risk\u00a0\u00a0\u00a0
(\u20acm)Profits/(losses) on hedging recognised in OCI, period fair value (inc./dec.)Transfers to profit or loss:
Hedge accounting effectsDiscontinued
\u00a0\u00a0\u00a0\u00a0\u00a0
Fixed income instruments75 (307)-
MEF deposit yield5 (5)
Bond- (6)-
Total\u00a080 \u00a0(318)-
Reform of reference indices for determining interest rates
The reform of key interest rate benchmarks, called the \"InterBank Offered Rate (IBOR) Reform\", involved regulators in various jurisdictions around the world with the aim of replacing some interbank rates with risk-free alternative rates and preparing guidelines to update contract models.
Currently, the main benchmarks for the euro area are:
\u2022the Euro Short Term Rate - ESTR (administered by the European Central Bank and published as of 2 October 2019) which replaced the Euro OverNight Index Average (EONIA - no longer listed as of 1 January 2022) redefining it as ESTR plus 8.5 bps;
\u2022the EURIBOR (administered by the European Money Market Institute), whose reform process ended in November 2019.
The Group has financial instruments indexed to the EURIBOR, which continues to be quoted daily, and the related cash flows continue to be exchanged with counterparties as usual. In relation to this parameter, there is therefore no uncertainty resulting from the IBOR reform on 31 December 2023. These instruments are subject to daily collateralisation remunerated to EONIA (from 2022 defined as ESTR plus 8.5 bps).In addition, the Group holds interest rate swaps designated as fair value hedges that have the variable \"leg\" indexed to the EURIBOR, with a nominal value of \u20ac29,027 million, almost entirely held by Bancoposta RFC. For these instruments, the cash flows at 31 December 2023 are discounted at the EONIA rate (ESTR +8.5 bps) and, for \u20ac201 million, at the ESTR rate as defined in the contracts in place with the counterparties.", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralHedgeAccountingExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page821-cflshid_375351-tag141634": { "value": "
Hedging on repurchase agreements
The Poste Italiane Group carries out transactions in repurchase agreements, on euro-government securities or with the guarantee of the Italian state for various purposes, including to invest in government bonds, to meet liquidity needs arising from the dynamics of funding on current accounts, to actively manage the treasury position and to manage guarantee deposits for collateralisation transactions. These transactions are mainly fixed-rate transactions and are therefore exposed to changes in fair value due to fluctuations in interest rates.
To limit the effects of interest rates on fair value, the Group enters into Over the Counter (OTC) interest rate swaps (fair value hedges) designated as specific hedges of repurchase agreements in the portfolio.
The Group evaluates the effectiveness of every hedging relationship in offsetting movements in fair value through a retrospective effectiveness test and a prospective effectiveness test, using the approaches illustrated in the following notes.
The retrospective effectiveness test is run by utilising the \"dollar offset approach through the hypothetical derivative\". With this approach, consideration is given to the hedge ratio of the change in fair value of the actual derivative to the change in fair value of the hypothetical derivative occurred between inception and the valuation date. The hedge is considered effective if the hedge ratio falls in the interval between 80% and 125%. The hypothetical derivative and the actual derivative have a settlement date consistent with the hedge inception and differ solely in their fixed rate component which is considered the main source of ineffectiveness309F310. The partial ineffectiveness of the hedge, equal to the difference between the changes in value of the two derivatives (hypothetical and actual) represents the net effect of the hedge recognised separately in profit or loss.
For the purposes of the prospective effectiveness test, the Group adopts the \"dollar offset approach through the hypothetical derivative\", performed by calculating the hedge ratio between the change in fair value of the hypothetical derivative and the change in fair value of the actual derivative310F311. The hedge is considered effective if the hedge ratio falls in the interval between 80% and 125%.", "dimensions": { "concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page826-cflshid_378610-tag141637": { "value": "
9. PROCEEDINGS PENDING AND PRINCIPAL RELATIONS WITH THE AUTHORITIES
The following information is provided in accordance with accounting standard IAS 37 \u2013 Provisions, Contingent Liabilities and Contingent Assets.
TAX DISPUTES
On 19 April 2018, the Tax Authorities in Rome (Guardia di Finanza \u2013 Nucleo di Polizia economico-finanziaria) entered the offices of SDA Express Courier. The purpose of the inspection was to verify the company's compliance with the requirements regarding VAT, income tax, IRAP and withholding tax for the years 2014, 2015 and 2016, pursuant to and for the purposes of articles 52 and 63 of Presidential Decree no. 633/72, art. 33 of Presidential Decree no. 600/73, art. 2 of Legislative Decree no. 68/2001 and Law no. 4/1929. On 29 November 2018, the audit was formally declared at an end. The main finding in final notice of assessment for about \u20ac1 million regards the deduction of VAT relating to the adjustment entries issued by the company in connection with discounts granted to customers following an increase in the number of shipments. Subsequently, on 5 December 2019, a notice of assessment for the year 2014 alone was notified with a total claim of \u20ac0.4 million, which, referring to the Report on Findings (PVC), mainly contests the VAT deducted. On 3 February 2020, the Company appealed against this notice and provided for the provisional payment of the fine imposed. During the first half of 2023, the facilitated conciliation procedure was formalised, which led to the settlement of the case for the 2014 tax year.
In addition, on 27 May 2021, the DRE (Regional Tax Office) served a further notice of assessment for the tax year 2015 similar to the one already filed for the year 2014 in which primarily the VAT deducted was contested. This deed has not been challenged and a procedure has been initiated with the Lazio DRE for an overall re-examination of the dispute relating to the credit notes with reference to all the periods covered by the PVC (from 2014 to 2017) in an attempt to reach an out-of-court settlement.
During the course of 2022, an out-of-court settlement was reached with the Lazio Regional Tax Office for Large Taxpayers, which in fact resulted in the partial cancellation of the VAT findings resulting from the Guardia di Finanza's (Italian Tax Police) Report on Findings of 29 November 2018 also for the year 2015 and 2016. In particular, the annulment also includes the notice of assessment for the year 2015, which became final at the same time, and which was redetermined based on an internal review by the Agenzia delle Entrate from approximately \u20ac1.2 million to a total of \u20ac51 thousand.
On the other hand, the tax settlement procedure for the years 2017 and 2018 is being finalised according to the time-lines agreed with the Agency.
In November 2018, Consorzio Postemotori received notice of an order issued by the Criminal Court in Rome and of a precautionary seizure regarding the consortium, amounting to \u20ac4.6 million. On 13 May 2019, the G.U.P. (Preliminary judge) of the Ordinary Court of Rome downgraded the original charges, ordering the committal for trial only in relation to a portion of the charges relating to the passive invoicing transactions of a subcontractor and a tax consultant of one of the partners. The Consortium mandated an external criminal lawyer to file an application for release of the criminal seizure ordered against the Consortium. On 20 December 2021, a petition for release from seizure was filed and on 24 December 2021, the Court of Rome issued an order for the restitution of the sum of \u20ac0.3 million credited back to the Consortium's current account on 7 February 2022.
SOCIAL SECURITY DISPUTES
Since 2012, and up until 31 December 2023, the Istituto Nazionale per la Previdenza Sociale (INPS, the National Institute of Social Security) office at Genoa Ponente and Roma Eur has issued Postel with some payment orders, for a total amount payable of \u20ac27.48 million. According to INPS, this amount represents social security contributions funding income support, extraordinary income support, unemployment benefit and family benefits not covered by the contributions paid to IPOST. Appeals against these requests were brought before the Court of Genoa. In support of the arguments of Postel in a memo issued on 20 October 2016, the Ministry of Labour stated that the social security contributions system applicable to Poste
Italiane also applies to all the other Group companies, with the sole exception of those that provide air transport, banking and express delivery services.
Some of the judgements have already been decided by the Court of Genoa and, on their outcome, against debit notices totalling \u20ac13.2 million, the Company was ordered to pay only the CUAF contributions of 0.68%, less the family allowances paid by Postel to employees, amounting to \u20ac0.3 million, while nothing was deemed to be due under the CIG, CIGS and mobility being at the time Postel wholly owned by the State through Poste Italiane and therefore included among the industrial enterprises of the State for which the law excludes the obligation to pay redundancy and mobility. INPS filed an appeal for the first tranche of requests made (\u20ac9.16 million), contesting the merits of the judgement at first instance and the sum arrived at. In the view of INPS, the rate applicable for contributions for family benefits, in line with recent guidance issued by INPS, should have been 4.40% in place of the 0.68% applied in the payment notices involved in the court action. In two judgements dated 28 December 2018, the Court of Appeal in Genoa confirmed in full the judgements at the first instance, rejecting INPS' appeals, who filed appeals in Cassation notified on 28 June 2019 to Postel, which appeared before the court.
On 20 and 21 February 2024, the Court of Cassation filed its rulings rejecting the main appeals brought by INPS and absorbing the cross-appeals brought by the Company. The Court stated that given the special and exclusive nature of the Ipost scheme - which is a self-contained social security and welfare system - nothing else is owed by the Company by way of social security and welfare contributions. Assessments are currently being conducted as to what action should be taken to recover the sums paid following the first and second instance judgements.
Below are the judgements already decided and those pending:
\u2022With the judgement of 19 September 2019, the Court of Genoa confirmed the position, ordering Postel to pay INPS, by way of CUAF contributions relating to the period from May 2011 to November 2012, the sum of \u20ac0.08 million, deeming the higher sums claimed in the debit notices (amounting in total to approximately \u20ac4 million) not due. By judgement of 21 May 2021, the Court of Appeal of Genoa dismissed the main appeal and the cross-appeal. INPS appealed in Cassation and Postel joined the proceedings. On 26 January 2023, the Court of Cassation ordered the case to be remitted to the register for processing together with other appeals. The hearing before the Court of Cassation was held on 10 October 2023. On 11 January 2024, the Court of Cassation filed its ruling declaring the inadmissibility of the appeal filed by INPS against the ruling published on 21 May 2021, because it was out of time, and sentencing the Institute to reimburse the Company for legal costs. This judgement therefore renders final the finding made by both the Court and the Court of Appeal of Genoa.
\u2022In a judgement of 1 February 2021, the Court of Genoa cancelled the debit notice (totalling approximately \u20ac0.64 million) for the period from December 2012 to April 2015 (excluding July 2014) and ordered INPS to pay Postel the sum of \u20ac0.06 million, plus interest. By judgement of 2 February 2022, the Court of Appeal of Genoa dismissed the appeal brought by the Institute. INPS appealed in at the Court of Cassation and Postel joined the proceedings. The Company is therefore waiting for the hearing in the Court of Cassation to be scheduled.
\u2022By means of the judgements of 26 May 2021, the Court of Genoa cancelled the debit notices (for a total of approximately \u20ac3.1 million) for certain periods between February 2011 and January 2017 and ordered the payment of the lower amounts restated for a total of \u20ac0.17 million. In its judgements of 18 May 2022 and 6 June 2022, the Court of Appeal of Genoa rejected the Company's appeals, as well as the cross-appeals filed by the Institute. Postel and INPS appealed the judgements at the Court of Cassation, for which hearings are pending.
\u2022With a ruling published on 20 September 2022, the Court of Appeal of Genoa, partially reforming the first instance ruling of 29 December 2020, ordered the Company to pay the amount indicated in the Debit Notice in the amount of approximately \u20ac0.009 million. The ruling became final because INPS did not bring the subsequent appeal in Cassation.
\u2022Additional administrative proceedings are still pending relating to the appeals submitted by Postel against the notices of adjustment for the periods from May 2009 to August 2023.
In addition, on 8 October 2019, INPS requested to regularise contributions from September 2014 to September 2019 at the non-harmonised CUAF rate of 4.40% of taxable income for social security purposes. With regard to the latter request, the Company acted differently depending on the period under consideration:
\u2022for October, November and December 2019, Postel has adjusted to the payment of the CUAF contribution in the amount of 4.40%, subject to repetition reserve;
\u2022for the previous period from September 2014 to the end of 2015, Postel appealed through administrative channels against the debit notices received from INPS with a request for payment of the CUAF at 4.40%;
\u2022for the year 2018 and the first 7 months of 2019, two Debit Notices were served with the request for payment of the CUAF at 0.68% and minor CIG, CIGS contributions to Postel, which paid, subject to repayment pending the decision of the appeal pending in the Supreme Court;
\u2022as of January 2020, Postel shall pay the CUAF rate to INPS at the rate of 0.68% instead of the rate of 4.40%, as a result of the provisions of Article 11, paragraph 5 bis of Law Decree no. 162 of 2019, converted by Law no. 8 of 28 February 2020.
Taking into account the judgements issued thus far, the reasons given for the judgements and the latest appeals brought by INPS, the Company has adjusted its provisions for risks and charges based also on the opinion of its legal advisors.
Provisions recognised in the financial statements at 31 December 2023 amount to \u20ac13.36 million.
MAIN PROCEEDINGS PENDING AND RELATIONS WITH THE AUTHORITIES
Autorit\u00e0 Garante della Concorrenza e del Mercato (AGCM - the Italian Antitrust Authority)
On 9 March 2015, the Authority notified Poste Italiane SpA of an investigation of BancoPosta RFC for alleged violation of articles 20, 21 and 22 of the Consumer Code, regarding the \"Libretto Smart\" product. On 21 December 2015, the AGCM notified Poste Italiane of its final ruling in which it deemed the Company's conduct unfair and imposed a fine of \u20ac0.54 million, limited to a tenth of the maximum applicable amount taking into account the mitigating circumstance that Poste Italiane had adopted initiatives aimed at allowing customers to benefit from the bonus rate. The Lazio Regional Administrative Court's ruling, which did not uphold the appeal against the aforementioned penalty, was challenged before the Council of State, which set the hearing for 6 June 2024.
On 3 October 2018, Poste Italiane proceeded to pay the fine of \u20ac23 million plus interest imposed by the Autorit\u00e0 Garante della Concorrenza e del Mercato (AGCM - the Antitrust Authority) following its ruling, in January 2018, that Poste Italiane had abused its dominant market position in the period from 2014 to 2017 (proceedings A493), as per art. 102 of the TFEU. This did not constitute acceptance or admission of liability in relation to the alleged misconduct and does not affect the Company's right to defend its position through the appropriate channels. Poste Italiane challenged this measure before the Lazio Regional Administrative Court which, by means of ruling no. 13477/2023, rejected the appeal. Poste Italiane appealed to the Council of State. The setting of the hearing is pending.
On 19 November 2019, the AGCM initiated proceedings PS/11563 against Poste Italiane in order to ascertain allegedly unfair commercial practice in the delivery of mail and, in particular, registered mail, in possible violation of articles 20, 21 and 22 of the Consumer Code. In particular, according to some customers: i) the advertised features of the \"registered mail delivery\" service are not reflected in the service actually provided; ii) the advertising for the \"digital registered mail
collection\" service does not make it clear that the service may no longer be free of charge in the near future and that, in any case, there are restrictions on its use, since it can only be accessed if the sender has authorised it. In January 2020, a number of consumer associations were admitted to the proceedings. At the conclusion of the proceedings, by way of a measure notified on 15 September 2020, the Authority imposed an administrative fine of \u20ac5 million, payment of which was made on 5 January 2021. The Authority acknowledged that Poste had correctly complied with the provision. However, the Company appealed to the Lazio Regional Administrative Court, which was not successful, and appealed to the Council of State whose hearing is scheduled for 26 March 2024.
On 6 April 2020, pursuant to art. 9, paragraph 3-bis of Law 192/98 and art. 14 of Law 287/90, the AGCM initiated proceedings A539 against Poste Italiane, following a complaint by a third-party supplier that Poste Italiane had presumably imposed unjustifiably burdensome contractual clauses. In particular, following the termination of contractual relations in mid-2017, the supplier was not, in fact, able to otherwise offer the services it was providing on the market because of the obligation to comply with rules and organisational parameters considered such as to make the company structure excessively rigid, making it unsuitable to operate with parties other than Poste Italiane. A hearing was held on 8 June 2020 at which Poste Italiane stated its position and, subsequently, the Authority requested the delivery of documentation. The final hearing was held on 3 May 2021, during which Poste Italiane set out its position and presented its defence. At the conclusion of the proceedings, by way of a measure notified on 6 August 2021, the Authority imposed an administrative fine of more than \u20ac11 million for abuse of economic dependence, payment of which was made on 6 September 2021. Poste Italiane appealed against the above-mentioned measure before the Lazio Regional Administrative Court (TAR), which found that Poste Italiane's actions were lawful and annulled the above-mentioned sanction with ruling no. 10044/23 issued on 13 June 2023. AGCM appealed against the Lazio Regional Administrative Court's ruling on 10 October 2023, while Poste Italiane lodged a cross-appeal on 9 November 2023. The setting of the hearing is pending.
On 9 August 2022, the Italian Antitrust Authority (\"AGCM\" or \"Authority\") - as a result of proceedings PS/11936 (\"Proceedings\") - notified PostePay with measure no. 30286 (\"Measure\"), in which it censured the conduct of the Company, claiming that, for mobile telephony offers subscribed on a flat fee, PostePay charges a consumption-based fee - more expensive than the ordinary one - when it is impossible to periodically renew the offer due to lack of sufficient credit \"in order to guarantee the continuity of the service\" without adequate information and without, therefore, a prior and informed consent of the consumer. Therefore, in the Authority's view, the conduct engaged in by PostePay would constitute a breach of Article 26(1)(f) of the Consumer Code.
As a result, the Company (i) is ordered to pay an administrative fine of \u20ac1.8 million, calculated on the basis of the turnover relating to the provision of electronic communication networks and services, and then reduced to \u20ac1.5 million, in consideration of the mitigating circumstance \"relating to certain measures taken by the professional to eliminate the conduct\".
Due to, inter alia, the partial and insufficient acknowledgement of the measures adopted by the Company, the refusal to examine the further measures proposed and the failure to accept the defence petitions submitted, the Company deemed it appropriate to lodge an appeal against the Measure before the Lazio Regional Administrative Court with an appeal filed on 28 October 2022. Therefore, the payment of the fine imposed was made by PostePay with express reservation ofappeal and, in the event, of repayment of the amount paid in the event of annulment (total or partial) of the Measure by the Lazio Regional Administrative Court and/or the Council of State. The purpose of the appeal before the Lazio Regional Administrative Court is to obtain (i) as a preliminary step, the annulment of the measure, (ii) in the alternative, the annulment of the penalty imposed or (iii) in the further alternative, its reduction to the minimum amount. The setting of the first trial hearing is pending.
On 7 November 2022, PostePay, while not accepting the Resolution, forwarded to AGCM the required compliance report, which illustrated the measures adopted by PostePay to overcome AGCM's objections, even though it had contested their grounds in the appeal pending before the Lazio Regional Administrative Court. On 2 December 2022, the Authority, having
received a response from PostePay to its request for further information, informed PostePay after the Council meeting of 13 December 2022 that it had taken note of its compliance with the order.
On 24 March 2022, the Italian Antitrust Authority (AGCM) initiated proceeding PS/11287 against Poste Italiane for alleged unfair commercial practices in relation to the information on the expiry and prescription dates of paper Interest-bearing Postal Certificates, as (i) during the placement of the postal certificates, Poste allegedly omitted to indicate the maturity and/or prescription date, as well as to provide information regarding the legal consequences arising from the expiry of the aforementioned terms and/or provided such information with a confusing and deceptive wording; (ii) in the management of the postal certificates that had expired over the last five years, Poste allegedly omitted to inform the holders of postal certificates close to the expiry of the prescription period, of the expiry of that period and the legal consequences arising in the event of failure to request the redemption of the postal certificate within that period. On 13 April 2022, Poste sent a memorandum to the AGCM in which it responded to the request for information and the objections contained in the writ. On 30 August 2022, the AGCM notified Poste of the Notice of Investigative Findings, substantially confirming the objections of the opening proceedings. On 19 September 2022, Poste filed its final statement of defence, accompanied by the steps it had taken, on a voluntary basis, to eliminate the Authority's concerns, without complying with the objections raised in the proceedings. On 4 November 2022, the Authority notified Poste of its final decision imposing an administrative penalty of \u20ac1.4 million. This amount was thus quantified taking into account the actions implemented by the Company on a voluntary basis, which were deemed appropriate to improve the information provided to consumers; in fact, the Authority granted Poste Italiane a 60% reduction in the amount of the fine. In line with the provisions of the final measure, on 2 February 2023, the Company sent its Report of Compliance with the AGCM's warning. The Resolution itself was challenged at the Regional Administrative Court by the Company, which, at the outcome of the hearing on the merits of 7 June 2023, issued an order, on 13 September 2023, ordering the suspension of the trial in question, pending the definition of the preliminary referral to the Court of Justice of the European Union ordered by the same Regional Administrative Court with order no. 12962 of 1 August 2023.
With a measure adopted at the meeting of 30 January 2024 and notified to Poste Italiane on 7 February 2024, the AGCM initiated an investigation procedure against the Company in order to ascertain the existence of a possible breach of Article 8, paragraph 2-quater, of Law no. 287/1990. At the same time, the Authority initiated proceedings to verify the actual existence of the requirements for the adoption of precautionary measures pursuant to Article 14-bis of the same law. Specifically, the Authority observed that Poste, through its subsidiary PostePay SpA, is active in the electricity and gas supply sector, and allegedly denied two of the latter's competing companies access, pursuant to Article 8, paragraph 2-quater of Law no. 287/90, to the resources made available to PostePay, of which it has exclusive use in connection with its activities within the perimeter of the universal postal service. The Authority also ordered inspections, which were held on 7 February 2024, and set the conclusion of the proceedings at 19 July 2024, granting Poste a period of seven days to file pleadings and documents relating to the precautionary proceedings. On 14 February 2024, the Company filed its memorandum in the precautionary proceedings, contesting the Authority's approach and, in particular, the disapplication of the provisions of Article 1(6) of Law Decree no. 59/2021, as amended and supplemented, exempting Poste from the application of Article 8, paragraph 2-quater, of Law no. 287/1990 until 31 December 2026.
Autorit\u00e0 per le Garanzie nelle Comunicazioni (AGCOM - the Italian Communications Authority)
Pursuant to Law Decree no. 201 of 6 December 2011, converted into Law 214 of 22 December 2011, responsibility for regulation and supervision of the postal sector was transferred to the Italian Communications Authority (AGCom).
Following transposition into Italian law of the third European postal services directive (Directive 2008/6/EC), the so-called \"net avoided cost\" method has been applied in quantifying the cost of the universal service\"314F315. In this regard:
(i)On 24 February 2023, AGCom Resolution 28/23/CONS was published, initiating the procedure to verify the net cost of the universal postal service incurred by Poste Italiane for the years 2020 and 2021. On 22 December 2023, AGCom Resolution 322/23/CONS was published, with which the Authority launched the public consultation and Poste Italiane provided its comments within the deadline. On 14 March 2024, AGCom Resolution 62/24/CONS was published, concluding the procedure to verify the net cost of the universal postal service incurred by Poste Italiane for the years 2020 and 2021. In particular, the burden of the universal postal service for these years has been quantified at \u20ac585 and \u20ac480 million respectively. The Authority also established that the universal service charge for the years 2020 and 2021 is inequitable and that, for the same years, unlike what was established in previous years, the appropriate proceedings will be launched to evaluate the addition to the Compensation Fund referred to in article 10 of Legislative Decree no. 261/1999.
(ii)On 1 July 2021, AGCom Resolution 199/21/CONS was published, concluding the procedure to verify the net cost of the universal postal service incurred by Poste Italiane for the years 2017, 2018 and 2019. In particular, the burden of the universal postal service for these years has been quantified at \u20ac354.5, \u20ac334.5 and \u20ac175 million respectively. For the 2019 financial year, although the quantified charge (\u20ac175 million) is lower than the authorised offsets (\u20ac262 million), the charge for the provision of the universal postal service over the entire period (i.e., the previous 2016-2019 Service Contract) is in any case higher than the offsets authorised by the European Commission. The Authority also established that the universal service charge for the years 2017, 2018 and 2019 is inequitable and that, for the same years, in continuity with what was established in previous years, the Compensation Fund referred to in article 10 of Legislative Decree no. 261/1999 is not established. On 22 September 2021, Poste Italiane appealed the aforementioned resolution at the Lazio Regional Administrative Court (still pending).
(iii)AGCom Resolution 214/19/CONS regarding \"Assessment of the net cost of the universal postal service for 2015 and 2016\" was published on 2 July 2019. In addition to acknowledging that the cost is unfair, the Resolution quantified the cost of providing the Universal Postal Service in 2015 and 2016, respectively, as \u20ac389 million and \u20ac356 million, compared with compensation of \u20ac329 million and \u20ac262 million provided for in the Contratto di Programma. AGCom did not establish a Compensation Fund for 2015 and 2016, so it has not been possible to recover the difference between compensation provided by the state and the costs quantified by AGCom. On 2 October 2019, Poste Italiane appealed the aforementioned resolution at the Lazio Regional Administrative Court (still pending).
(iv)AGCom Resolution 298/17/CONS regarding \"Assessment of the net cost of the universal postal service for 2013 and 2014\" was published on 6 September 2017. In addition to acknowledging that the cost is unfair, the Resolution quantified the cost of providing the Universal Postal Service in 2013 and 2014, respectively, as \u20ac393 million and \u20ac409 million, compared with compensation of \u20ac343 million and \u20ac336 million provided for in the Contratto di Programma. The Compensation Fund was also not established for the years 2013 and 2014. On 6 November 2017, Poste Italiane appealed the aforementioned resolution at the Lazio Regional Administrative Court (still pending).
(v)AGCom Resolution 412/14/CONS regarding \"Assessment of the net cost of the universal postal service for 2011 and 2012\" was published on 31 July 2014. In addition to acknowledging that the cost is unfair, the Resolution quantified the cost of providing the Universal Postal Service in 2011 and 2012, respectively, as \u20ac381 million and \u20ac327 million for fees originally recognised by Poste Italiane for \u20ac357 and \u20ac350 million respectively. The Authority also ruled that no Compensation Fund was established for the year 2011. On 13 November 2014, Poste Italiane appealed the aforementioned measure before the Lazio Regional Administrative Court. The Regional Administrative Court, in ruling no. 11416 published on 5 September 2022, partially upheld the appeal on the verification of the responsibility for the
years 2011-2012 with respect to the non-activation of the compensation fund for the year 2011. Poste, AGCom and A.I.C.A.I. (Italian Association of International Air Couriers) lodged separate appeals with the Council of State against the Regional Administrative Court ruling. The appeal judgements were joined. By judgement no. 9021 of 17 October 2023, the Council of State annulled the first instance judgement for breach of cross-examination. Poste Italiane promptly resumed the case before the Lazio Regional Administrative Court, supplementing the cross-examination by public notice. The setting of the hearing is pending.
With Resolution 313/21/CONS, notified on 21 October 2021, the AGCom closed the sanctioning proceedings, initiated with notice of objection 6/21/DSP, by imposing a fine of \u20ac0.9 million for breach of universal service continuity obligations (art. 3, paragraph 1, 5 lett. b) and 8 lett. d) of Legislative Decree no. 261/1999) and of information obligations, in relation to the closures of 239 Post Offices over the Christmas period (on Saturday 28 December 2019 and Saturday 4 January 2020) even though they had been communicated of it in advance. The Authority accepted the request, on a subordinate basis, for the application of cumulation, imposing a penalty in a reduced amount compared to the one that had been indicated for the reduced payment (\u20ac3.28 million). Payment of the penalty was made on 10 November 2021. The Authority's Resolution was appealed by the Company to the Regional Administrative Court. The setting of the hearing is pending.
On 18 April 2023, with Notice of Objection no. 6/23/DSP, the AGCom initiated sanctioning proceedings against Poste Italiane for non-compliance with the quality objectives on products included in the Universal Postal Service for the year 2022, identifying five objections. With Determination no. 26/23/DSP, notified on 7 July 2023, the Authority dismissed the sanctioning proceeding as the Company availed itself of the benefit of Article 16 of Law no. 689 of 24 November 1981, with reduced payment of the sanctions for all the disputes.
On 20 June 2023, with notice of objection no. 10/23/DSP, the AGCom initiated a sanctioning procedure against Poste Italiane, contesting seven alleged violations of the obligations relating to the service of notification of judicial documents, following a report by some users and an inspection by the Authority at some of the Company's premises. Poste Italiane did not avail itself of the benefit of the reduced payment of the penalty, and, on 3 August 2023, a defence memorandum was formalised to point out that the disputed cases do not constitute breaches of universal service obligations subject to sanctions by the Authority, but mere inefficiencies that would give rise to the right of users to obtain any reimbursement. Resolution no. 10/24/CONS, published on 18 January 2024, concluded the proceedings with an administrative fine against Poste Italiane of \u20ac0.022 million, which was paid on 5 February 2024.
On 10 October 2023, with notice of objection no. 11/23/DSP, the AGCom notified Poste Italiane of an objection for non-compliance with the order to restore the opening hours of post offices that had been closed or rescheduled during the pandemic emergency. The Company submitted its defence and availed itself of the benefit of the reduced payment. By Determination no. 28/23/DSP, notified on 14 December 2023, the sanction proceedings were closed.
Bank of Italy
The Bank of Italy, from 14 March 2022 to 15 July 2022, conducted an inspection at Poste Italiane SpA - BancoPosta RFC, on profitability and the business model, governance and control systems, interest rate risk management methods including related internal modelling, new tax credit business and associated risks. On 30 November 2022, the report containing a number of findings and a \"partially unfavourable\" assessment was delivered to Poste Italiane. Poste Italiane, by the established deadline and after discussion at the Board of Directors' meeting of 25 January 2023, notified the Bank of Italy of its considerations and planned improvements; for the only finding in respect of which a sanctioning procedure was initiated, the Company sent counter-claims in support of the correctness of its actions. After examining the counter-claims and evaluating the actions already implemented or planned by the Company, the Bank of Italy approved the filing. The improvement plan communicated to the Bank of Italy is currently being implemented and is monitored on a monthly basis by BancoPosta's control functions.
On 20 July 2022, the Authority sent a notice to Poste Italiane SpA - BancoPosta RFC and PostePay concerning the manner in which the funds received by PostePay in respect of the issuance of electronic money should be managed. It should be noted that the Supervisory Provisions for EMIs provide that such funding may be deposited with a bank authorised to operate in Italy, invested in qualified debt securities or particular units of harmonised mutual funds. Since the creation of PostePay, these sums are deposited in a postal current account (protection account) and contribute to the funds from private customers of Bancoposta RFC, which are invested in euro area government bonds. In this regard, the Authority initiated discussions with BancoPosta and PostePay in 2021, in view of the fact that BancoPosta was not deemed to be an entity that could be assimilated to the concept of \"credit institution\" under the relevant European legislation. In the face of a proposed alternative approach, aimed at equating the deposit with BancoPosta of the sums collected by PostePay with a direct investment in qualified debt securities, in the aforementioned communication the Authority asked BancoPosta and PostePay for further observations, aimed at identifying an operational solution that would allow full alignment with the relevant regulatory provisions. Upon completion of the further investigations requested, a transitional solution was identified, also on the basis of the discussions with the Authority. This solution was represented to the Bank of Italy in a communication sent jointly by BancoPosta and PostePay on 29 March 2023. Consistent with this solution, a draft of the revolving pledge agreement was prepared and sent to the Bank of Italy on 4 August 2023, supported also by the opinion of an external law firm.
IVASS - Istituto per la Vigilanza sulle Assicurazioni (the insurance regulator)
With reference to the notice of objection served by IVASS on 23 February 2023 for the alleged breach of section 183(1)(a) of the Private Insurance Code arising from the alleged late payment of insurance benefits beyond the contractual deadline and to the subsequent \"Proposal for the imposition of administrative sanctions\" served on 24 August 2023 for the amount of \u20ac0.03 million equal to the minimum amount, the settlement is confirmed following the receipt of the sanctioning measure and the payment of the sanction imposed therein and confirmed, made within the terms envisaged by the reference legislation.
In addition, on 20 July 2023, Poste Vita was served, by the \"Sanctions and Settlements Service\" of the IVASS, a further notice of objection for the alleged breach of article 183, paragraph 1, letter \"a\" of the Private Insurance Code. With regard to this case, on 24 January 2024, the \"Proposal for the imposition of administrative sanctions\" was sent to Poste Vita, which provides for the application of the minimum administrative sanction of \u20ac0.03 million. We are therefore awaiting the reasoned decision by which the sanction proceedings in question will be settled.
With regard to the IVASS inspection of Poste Vita concerning the governance, management and control profiles of investments and financial risks concluded on 7 May 2021, discussions continued with IVASS during the period and on 25 July 2023, the decision-making phase was concluded by the Supervisory Authority, which notified the Company of the imposition of a fine of \u20ac1.8 million. The sanction was imposed as a result of violations of the applicable regulations found by IVASS with particular reference to:
\u25aaalleged failures in the governance and management of financial risks as well as in the protection of policyholders' rights for investments made through so-called \"multi-asset\" funds;
\u25aaalleged deficiencies in the process of defining the Risk Appetite Framework.
Garante per la protezione dei dati personali (the Data Protection Authority)
In August 2023, the IT continuous monitoring units detected anomalies on the systems of the subsidiary Postel SpA and identified an event of compromise of some Domain Controllers, made possible through the use of various malware and the activation of a malicious code used to encrypt computers (ransomware). The execution of the ransomware, claimed by a cyber criminal group, disrupted the operation of some servers and several workstations spread across the country. Based on the provisions of the \"Data Breach Management\" procedure governing the activities of detecting, notifying and communicating personal data breaches in accordance with the provisions of EU Regulation 2016/679
(GDPR), the GDPR Team was convened and, within the time-frame set out in Articles 33 and 34 of the GDPR, the Company notified the Privacy Guarantor and all relevant stakeholders.
In 15 December 2023, the Garante per la Protezione dei Dati Personali (GPDP), considering that the elements acquired in the course of the investigative investigations, initiated following the notification of the Data Breach, may constitute one or more of the violations indicated in Article 83 of the GDPR, notified the Company of the commencement of the proceedings for the adoption of the measures and sanctions referred to in said Article 83, pointing out that Postel could be susceptible to the sanctions provided for therein.
On 12 January 2024, the Company filed its defence briefs and was heard at a hearing on 31 January 2024.
At present, the conclusion of the proceedings, which could lead to the imposition of an administrative fine, is pending. The outcome of the proceedings was taken into account when determining the provisions for risks at 31 December 2023.
Other proceedings
Federconsumatori, with a writ of summons dated 14 May 2021, initiated a class action against Poste Italiane pursuant to article 140-bis of the Consumer Code, before the Court of Rome. The value of the dispute to date is approximately \u20ac8.5 thousand.
By the summons in question, Federconsumatori contests that the capitalisation of interest on 30-year interest-bearing postal certificates (marked with the \"Q\" series, issued by Cassa Depositi e Prestiti from 1986 to 1995, pursuant to Ministerial Decree 13 June 1986 by the Minister of Treasury, which were subsequently transferred to the Ministry of Economy and Finance, pursuant to the MEF Decree of 5 December 2003) is carried out annually net of withholding tax (now substitute tax), rather than gross, with the effect of recognising to savers a lower return than that allegedly due.
On 27 July 2021, Poste Italiane appeared before the court, objecting, on a preliminary basis, to the inadmissibility of the class action, on a number of preliminary grounds, as well as to the fact that the plaintiffs' and potential members' claims were time-barred, and contested the merits of the proposed claim.
The Court of Rome, in an order dated 11 January 2022, held that the request submitted by Federconsumatori was manifestly unfounded, recognising, inter alia, the lack of passive legitimacy of Poste Italiane. Federconsumatori appealed the order of the Court of Rome, and the Court of Appeal set the hearing for closing arguments for 22 May 2024.
As reported in Note A9 - Other receivables and assets, on 5 July 2023, the decision of the Court of Cassation in the case pursuant to Law Decree no. 201/2011 was published, in which the most relevant grounds of Poste Italiane's appeal were upheld concerning the starting date of the interest accrued on the IRES credit resulting from the non-deduction of labour costs for IRAP purposes. As a result of this ruling, the case will have to be resumed before the Tax Court of Second Instance to settle the amount of interest actually due to the Group. The judgement concerning Law Decree no. 185/2008 is currently pending before the Supreme Court of Cassation.
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9. PROCEEDINGS PENDING AND PRINCIPAL RELATIONS WITH THE AUTHORITIES
The following information is provided in accordance with accounting standard IAS 37 \u2013 Provisions, Contingent Liabilities and Contingent Assets.
TAX DISPUTES
On 19 April 2018, the Tax Authorities in Rome (Guardia di Finanza \u2013 Nucleo di Polizia economico-finanziaria) entered the offices of SDA Express Courier. The purpose of the inspection was to verify the company's compliance with the requirements regarding VAT, income tax, IRAP and withholding tax for the years 2014, 2015 and 2016, pursuant to and for the purposes of articles 52 and 63 of Presidential Decree no. 633/72, art. 33 of Presidential Decree no. 600/73, art. 2 of Legislative Decree no. 68/2001 and Law no. 4/1929. On 29 November 2018, the audit was formally declared at an end. The main finding in final notice of assessment for about \u20ac1 million regards the deduction of VAT relating to the adjustment entries issued by the company in connection with discounts granted to customers following an increase in the number of shipments. Subsequently, on 5 December 2019, a notice of assessment for the year 2014 alone was notified with a total claim of \u20ac0.4 million, which, referring to the Report on Findings (PVC), mainly contests the VAT deducted. On 3 February 2020, the Company appealed against this notice and provided for the provisional payment of the fine imposed. During the first half of 2023, the facilitated conciliation procedure was formalised, which led to the settlement of the case for the 2014 tax year.
In addition, on 27 May 2021, the DRE (Regional Tax Office) served a further notice of assessment for the tax year 2015 similar to the one already filed for the year 2014 in which primarily the VAT deducted was contested. This deed has not been challenged and a procedure has been initiated with the Lazio DRE for an overall re-examination of the dispute relating to the credit notes with reference to all the periods covered by the PVC (from 2014 to 2017) in an attempt to reach an out-of-court settlement.
During the course of 2022, an out-of-court settlement was reached with the Lazio Regional Tax Office for Large Taxpayers, which in fact resulted in the partial cancellation of the VAT findings resulting from the Guardia di Finanza's (Italian Tax Police) Report on Findings of 29 November 2018 also for the year 2015 and 2016. In particular, the annulment also includes the notice of assessment for the year 2015, which became final at the same time, and which was redetermined based on an internal review by the Agenzia delle Entrate from approximately \u20ac1.2 million to a total of \u20ac51 thousand.
On the other hand, the tax settlement procedure for the years 2017 and 2018 is being finalised according to the time-lines agreed with the Agency.
In November 2018, Consorzio Postemotori received notice of an order issued by the Criminal Court in Rome and of a precautionary seizure regarding the consortium, amounting to \u20ac4.6 million. On 13 May 2019, the G.U.P. (Preliminary judge) of the Ordinary Court of Rome downgraded the original charges, ordering the committal for trial only in relation to a portion of the charges relating to the passive invoicing transactions of a subcontractor and a tax consultant of one of the partners. The Consortium mandated an external criminal lawyer to file an application for release of the criminal seizure ordered against the Consortium. On 20 December 2021, a petition for release from seizure was filed and on 24 December 2021, the Court of Rome issued an order for the restitution of the sum of \u20ac0.3 million credited back to the Consortium's current account on 7 February 2022.
SOCIAL SECURITY DISPUTES
Since 2012, and up until 31 December 2023, the Istituto Nazionale per la Previdenza Sociale (INPS, the National Institute of Social Security) office at Genoa Ponente and Roma Eur has issued Postel with some payment orders, for a total amount payable of \u20ac27.48 million. According to INPS, this amount represents social security contributions funding income support, extraordinary income support, unemployment benefit and family benefits not covered by the contributions paid to IPOST. Appeals against these requests were brought before the Court of Genoa. In support of the arguments of Postel in a memo issued on 20 October 2016, the Ministry of Labour stated that the social security contributions system applicable to Poste
Italiane also applies to all the other Group companies, with the sole exception of those that provide air transport, banking and express delivery services.
Some of the judgements have already been decided by the Court of Genoa and, on their outcome, against debit notices totalling \u20ac13.2 million, the Company was ordered to pay only the CUAF contributions of 0.68%, less the family allowances paid by Postel to employees, amounting to \u20ac0.3 million, while nothing was deemed to be due under the CIG, CIGS and mobility being at the time Postel wholly owned by the State through Poste Italiane and therefore included among the industrial enterprises of the State for which the law excludes the obligation to pay redundancy and mobility. INPS filed an appeal for the first tranche of requests made (\u20ac9.16 million), contesting the merits of the judgement at first instance and the sum arrived at. In the view of INPS, the rate applicable for contributions for family benefits, in line with recent guidance issued by INPS, should have been 4.40% in place of the 0.68% applied in the payment notices involved in the court action. In two judgements dated 28 December 2018, the Court of Appeal in Genoa confirmed in full the judgements at the first instance, rejecting INPS' appeals, who filed appeals in Cassation notified on 28 June 2019 to Postel, which appeared before the court.
On 20 and 21 February 2024, the Court of Cassation filed its rulings rejecting the main appeals brought by INPS and absorbing the cross-appeals brought by the Company. The Court stated that given the special and exclusive nature of the Ipost scheme - which is a self-contained social security and welfare system - nothing else is owed by the Company by way of social security and welfare contributions. Assessments are currently being conducted as to what action should be taken to recover the sums paid following the first and second instance judgements.
Below are the judgements already decided and those pending:
\u2022With the judgement of 19 September 2019, the Court of Genoa confirmed the position, ordering Postel to pay INPS, by way of CUAF contributions relating to the period from May 2011 to November 2012, the sum of \u20ac0.08 million, deeming the higher sums claimed in the debit notices (amounting in total to approximately \u20ac4 million) not due. By judgement of 21 May 2021, the Court of Appeal of Genoa dismissed the main appeal and the cross-appeal. INPS appealed in Cassation and Postel joined the proceedings. On 26 January 2023, the Court of Cassation ordered the case to be remitted to the register for processing together with other appeals. The hearing before the Court of Cassation was held on 10 October 2023. On 11 January 2024, the Court of Cassation filed its ruling declaring the inadmissibility of the appeal filed by INPS against the ruling published on 21 May 2021, because it was out of time, and sentencing the Institute to reimburse the Company for legal costs. This judgement therefore renders final the finding made by both the Court and the Court of Appeal of Genoa.
\u2022In a judgement of 1 February 2021, the Court of Genoa cancelled the debit notice (totalling approximately \u20ac0.64 million) for the period from December 2012 to April 2015 (excluding July 2014) and ordered INPS to pay Postel the sum of \u20ac0.06 million, plus interest. By judgement of 2 February 2022, the Court of Appeal of Genoa dismissed the appeal brought by the Institute. INPS appealed in at the Court of Cassation and Postel joined the proceedings. The Company is therefore waiting for the hearing in the Court of Cassation to be scheduled.
\u2022By means of the judgements of 26 May 2021, the Court of Genoa cancelled the debit notices (for a total of approximately \u20ac3.1 million) for certain periods between February 2011 and January 2017 and ordered the payment of the lower amounts restated for a total of \u20ac0.17 million. In its judgements of 18 May 2022 and 6 June 2022, the Court of Appeal of Genoa rejected the Company's appeals, as well as the cross-appeals filed by the Institute. Postel and INPS appealed the judgements at the Court of Cassation, for which hearings are pending.
\u2022With a ruling published on 20 September 2022, the Court of Appeal of Genoa, partially reforming the first instance ruling of 29 December 2020, ordered the Company to pay the amount indicated in the Debit Notice in the amount of approximately \u20ac0.009 million. The ruling became final because INPS did not bring the subsequent appeal in Cassation.
\u2022Additional administrative proceedings are still pending relating to the appeals submitted by Postel against the notices of adjustment for the periods from May 2009 to August 2023.
In addition, on 8 October 2019, INPS requested to regularise contributions from September 2014 to September 2019 at the non-harmonised CUAF rate of 4.40% of taxable income for social security purposes. With regard to the latter request, the Company acted differently depending on the period under consideration:
\u2022for October, November and December 2019, Postel has adjusted to the payment of the CUAF contribution in the amount of 4.40%, subject to repetition reserve;
\u2022for the previous period from September 2014 to the end of 2015, Postel appealed through administrative channels against the debit notices received from INPS with a request for payment of the CUAF at 4.40%;
\u2022for the year 2018 and the first 7 months of 2019, two Debit Notices were served with the request for payment of the CUAF at 0.68% and minor CIG, CIGS contributions to Postel, which paid, subject to repayment pending the decision of the appeal pending in the Supreme Court;
\u2022as of January 2020, Postel shall pay the CUAF rate to INPS at the rate of 0.68% instead of the rate of 4.40%, as a result of the provisions of Article 11, paragraph 5 bis of Law Decree no. 162 of 2019, converted by Law no. 8 of 28 February 2020.
Taking into account the judgements issued thus far, the reasons given for the judgements and the latest appeals brought by INPS, the Company has adjusted its provisions for risks and charges based also on the opinion of its legal advisors.
Provisions recognised in the financial statements at 31 December 2023 amount to \u20ac13.36 million.
MAIN PROCEEDINGS PENDING AND RELATIONS WITH THE AUTHORITIES
Autorit\u00e0 Garante della Concorrenza e del Mercato (AGCM - the Italian Antitrust Authority)
On 9 March 2015, the Authority notified Poste Italiane SpA of an investigation of BancoPosta RFC for alleged violation of articles 20, 21 and 22 of the Consumer Code, regarding the \"Libretto Smart\" product. On 21 December 2015, the AGCM notified Poste Italiane of its final ruling in which it deemed the Company's conduct unfair and imposed a fine of \u20ac0.54 million, limited to a tenth of the maximum applicable amount taking into account the mitigating circumstance that Poste Italiane had adopted initiatives aimed at allowing customers to benefit from the bonus rate. The Lazio Regional Administrative Court's ruling, which did not uphold the appeal against the aforementioned penalty, was challenged before the Council of State, which set the hearing for 6 June 2024.
On 3 October 2018, Poste Italiane proceeded to pay the fine of \u20ac23 million plus interest imposed by the Autorit\u00e0 Garante della Concorrenza e del Mercato (AGCM - the Antitrust Authority) following its ruling, in January 2018, that Poste Italiane had abused its dominant market position in the period from 2014 to 2017 (proceedings A493), as per art. 102 of the TFEU. This did not constitute acceptance or admission of liability in relation to the alleged misconduct and does not affect the Company's right to defend its position through the appropriate channels. Poste Italiane challenged this measure before the Lazio Regional Administrative Court which, by means of ruling no. 13477/2023, rejected the appeal. Poste Italiane appealed to the Council of State. The setting of the hearing is pending.
On 19 November 2019, the AGCM initiated proceedings PS/11563 against Poste Italiane in order to ascertain allegedly unfair commercial practice in the delivery of mail and, in particular, registered mail, in possible violation of articles 20, 21 and 22 of the Consumer Code. In particular, according to some customers: i) the advertised features of the \"registered mail delivery\" service are not reflected in the service actually provided; ii) the advertising for the \"digital registered mail
collection\" service does not make it clear that the service may no longer be free of charge in the near future and that, in any case, there are restrictions on its use, since it can only be accessed if the sender has authorised it. In January 2020, a number of consumer associations were admitted to the proceedings. At the conclusion of the proceedings, by way of a measure notified on 15 September 2020, the Authority imposed an administrative fine of \u20ac5 million, payment of which was made on 5 January 2021. The Authority acknowledged that Poste had correctly complied with the provision. However, the Company appealed to the Lazio Regional Administrative Court, which was not successful, and appealed to the Council of State whose hearing is scheduled for 26 March 2024.
On 6 April 2020, pursuant to art. 9, paragraph 3-bis of Law 192/98 and art. 14 of Law 287/90, the AGCM initiated proceedings A539 against Poste Italiane, following a complaint by a third-party supplier that Poste Italiane had presumably imposed unjustifiably burdensome contractual clauses. In particular, following the termination of contractual relations in mid-2017, the supplier was not, in fact, able to otherwise offer the services it was providing on the market because of the obligation to comply with rules and organisational parameters considered such as to make the company structure excessively rigid, making it unsuitable to operate with parties other than Poste Italiane. A hearing was held on 8 June 2020 at which Poste Italiane stated its position and, subsequently, the Authority requested the delivery of documentation. The final hearing was held on 3 May 2021, during which Poste Italiane set out its position and presented its defence. At the conclusion of the proceedings, by way of a measure notified on 6 August 2021, the Authority imposed an administrative fine of more than \u20ac11 million for abuse of economic dependence, payment of which was made on 6 September 2021. Poste Italiane appealed against the above-mentioned measure before the Lazio Regional Administrative Court (TAR), which found that Poste Italiane's actions were lawful and annulled the above-mentioned sanction with ruling no. 10044/23 issued on 13 June 2023. AGCM appealed against the Lazio Regional Administrative Court's ruling on 10 October 2023, while Poste Italiane lodged a cross-appeal on 9 November 2023. The setting of the hearing is pending.
On 9 August 2022, the Italian Antitrust Authority (\"AGCM\" or \"Authority\") - as a result of proceedings PS/11936 (\"Proceedings\") - notified PostePay with measure no. 30286 (\"Measure\"), in which it censured the conduct of the Company, claiming that, for mobile telephony offers subscribed on a flat fee, PostePay charges a consumption-based fee - more expensive than the ordinary one - when it is impossible to periodically renew the offer due to lack of sufficient credit \"in order to guarantee the continuity of the service\" without adequate information and without, therefore, a prior and informed consent of the consumer. Therefore, in the Authority's view, the conduct engaged in by PostePay would constitute a breach of Article 26(1)(f) of the Consumer Code.
As a result, the Company (i) is ordered to pay an administrative fine of \u20ac1.8 million, calculated on the basis of the turnover relating to the provision of electronic communication networks and services, and then reduced to \u20ac1.5 million, in consideration of the mitigating circumstance \"relating to certain measures taken by the professional to eliminate the conduct\".
Due to, inter alia, the partial and insufficient acknowledgement of the measures adopted by the Company, the refusal to examine the further measures proposed and the failure to accept the defence petitions submitted, the Company deemed it appropriate to lodge an appeal against the Measure before the Lazio Regional Administrative Court with an appeal filed on 28 October 2022. Therefore, the payment of the fine imposed was made by PostePay with express reservation ofappeal and, in the event, of repayment of the amount paid in the event of annulment (total or partial) of the Measure by the Lazio Regional Administrative Court and/or the Council of State. The purpose of the appeal before the Lazio Regional Administrative Court is to obtain (i) as a preliminary step, the annulment of the measure, (ii) in the alternative, the annulment of the penalty imposed or (iii) in the further alternative, its reduction to the minimum amount. The setting of the first trial hearing is pending.
On 7 November 2022, PostePay, while not accepting the Resolution, forwarded to AGCM the required compliance report, which illustrated the measures adopted by PostePay to overcome AGCM's objections, even though it had contested their grounds in the appeal pending before the Lazio Regional Administrative Court. On 2 December 2022, the Authority, having
received a response from PostePay to its request for further information, informed PostePay after the Council meeting of 13 December 2022 that it had taken note of its compliance with the order.
On 24 March 2022, the Italian Antitrust Authority (AGCM) initiated proceeding PS/11287 against Poste Italiane for alleged unfair commercial practices in relation to the information on the expiry and prescription dates of paper Interest-bearing Postal Certificates, as (i) during the placement of the postal certificates, Poste allegedly omitted to indicate the maturity and/or prescription date, as well as to provide information regarding the legal consequences arising from the expiry of the aforementioned terms and/or provided such information with a confusing and deceptive wording; (ii) in the management of the postal certificates that had expired over the last five years, Poste allegedly omitted to inform the holders of postal certificates close to the expiry of the prescription period, of the expiry of that period and the legal consequences arising in the event of failure to request the redemption of the postal certificate within that period. On 13 April 2022, Poste sent a memorandum to the AGCM in which it responded to the request for information and the objections contained in the writ. On 30 August 2022, the AGCM notified Poste of the Notice of Investigative Findings, substantially confirming the objections of the opening proceedings. On 19 September 2022, Poste filed its final statement of defence, accompanied by the steps it had taken, on a voluntary basis, to eliminate the Authority's concerns, without complying with the objections raised in the proceedings. On 4 November 2022, the Authority notified Poste of its final decision imposing an administrative penalty of \u20ac1.4 million. This amount was thus quantified taking into account the actions implemented by the Company on a voluntary basis, which were deemed appropriate to improve the information provided to consumers; in fact, the Authority granted Poste Italiane a 60% reduction in the amount of the fine. In line with the provisions of the final measure, on 2 February 2023, the Company sent its Report of Compliance with the AGCM's warning. The Resolution itself was challenged at the Regional Administrative Court by the Company, which, at the outcome of the hearing on the merits of 7 June 2023, issued an order, on 13 September 2023, ordering the suspension of the trial in question, pending the definition of the preliminary referral to the Court of Justice of the European Union ordered by the same Regional Administrative Court with order no. 12962 of 1 August 2023.
With a measure adopted at the meeting of 30 January 2024 and notified to Poste Italiane on 7 February 2024, the AGCM initiated an investigation procedure against the Company in order to ascertain the existence of a possible breach of Article 8, paragraph 2-quater, of Law no. 287/1990. At the same time, the Authority initiated proceedings to verify the actual existence of the requirements for the adoption of precautionary measures pursuant to Article 14-bis of the same law. Specifically, the Authority observed that Poste, through its subsidiary PostePay SpA, is active in the electricity and gas supply sector, and allegedly denied two of the latter's competing companies access, pursuant to Article 8, paragraph 2-quater of Law no. 287/90, to the resources made available to PostePay, of which it has exclusive use in connection with its activities within the perimeter of the universal postal service. The Authority also ordered inspections, which were held on 7 February 2024, and set the conclusion of the proceedings at 19 July 2024, granting Poste a period of seven days to file pleadings and documents relating to the precautionary proceedings. On 14 February 2024, the Company filed its memorandum in the precautionary proceedings, contesting the Authority's approach and, in particular, the disapplication of the provisions of Article 1(6) of Law Decree no. 59/2021, as amended and supplemented, exempting Poste from the application of Article 8, paragraph 2-quater, of Law no. 287/1990 until 31 December 2026.
Autorit\u00e0 per le Garanzie nelle Comunicazioni (AGCOM - the Italian Communications Authority)
Pursuant to Law Decree no. 201 of 6 December 2011, converted into Law 214 of 22 December 2011, responsibility for regulation and supervision of the postal sector was transferred to the Italian Communications Authority (AGCom).
Following transposition into Italian law of the third European postal services directive (Directive 2008/6/EC), the so-called \"net avoided cost\" method has been applied in quantifying the cost of the universal service\"314F315. In this regard:
(i)On 24 February 2023, AGCom Resolution 28/23/CONS was published, initiating the procedure to verify the net cost of the universal postal service incurred by Poste Italiane for the years 2020 and 2021. On 22 December 2023, AGCom Resolution 322/23/CONS was published, with which the Authority launched the public consultation and Poste Italiane provided its comments within the deadline. On 14 March 2024, AGCom Resolution 62/24/CONS was published, concluding the procedure to verify the net cost of the universal postal service incurred by Poste Italiane for the years 2020 and 2021. In particular, the burden of the universal postal service for these years has been quantified at \u20ac585 and \u20ac480 million respectively. The Authority also established that the universal service charge for the years 2020 and 2021 is inequitable and that, for the same years, unlike what was established in previous years, the appropriate proceedings will be launched to evaluate the addition to the Compensation Fund referred to in article 10 of Legislative Decree no. 261/1999.
(ii)On 1 July 2021, AGCom Resolution 199/21/CONS was published, concluding the procedure to verify the net cost of the universal postal service incurred by Poste Italiane for the years 2017, 2018 and 2019. In particular, the burden of the universal postal service for these years has been quantified at \u20ac354.5, \u20ac334.5 and \u20ac175 million respectively. For the 2019 financial year, although the quantified charge (\u20ac175 million) is lower than the authorised offsets (\u20ac262 million), the charge for the provision of the universal postal service over the entire period (i.e., the previous 2016-2019 Service Contract) is in any case higher than the offsets authorised by the European Commission. The Authority also established that the universal service charge for the years 2017, 2018 and 2019 is inequitable and that, for the same years, in continuity with what was established in previous years, the Compensation Fund referred to in article 10 of Legislative Decree no. 261/1999 is not established. On 22 September 2021, Poste Italiane appealed the aforementioned resolution at the Lazio Regional Administrative Court (still pending).
(iii)AGCom Resolution 214/19/CONS regarding \"Assessment of the net cost of the universal postal service for 2015 and 2016\" was published on 2 July 2019. In addition to acknowledging that the cost is unfair, the Resolution quantified the cost of providing the Universal Postal Service in 2015 and 2016, respectively, as \u20ac389 million and \u20ac356 million, compared with compensation of \u20ac329 million and \u20ac262 million provided for in the Contratto di Programma. AGCom did not establish a Compensation Fund for 2015 and 2016, so it has not been possible to recover the difference between compensation provided by the state and the costs quantified by AGCom. On 2 October 2019, Poste Italiane appealed the aforementioned resolution at the Lazio Regional Administrative Court (still pending).
(iv)AGCom Resolution 298/17/CONS regarding \"Assessment of the net cost of the universal postal service for 2013 and 2014\" was published on 6 September 2017. In addition to acknowledging that the cost is unfair, the Resolution quantified the cost of providing the Universal Postal Service in 2013 and 2014, respectively, as \u20ac393 million and \u20ac409 million, compared with compensation of \u20ac343 million and \u20ac336 million provided for in the Contratto di Programma. The Compensation Fund was also not established for the years 2013 and 2014. On 6 November 2017, Poste Italiane appealed the aforementioned resolution at the Lazio Regional Administrative Court (still pending).
(v)AGCom Resolution 412/14/CONS regarding \"Assessment of the net cost of the universal postal service for 2011 and 2012\" was published on 31 July 2014. In addition to acknowledging that the cost is unfair, the Resolution quantified the cost of providing the Universal Postal Service in 2011 and 2012, respectively, as \u20ac381 million and \u20ac327 million for fees originally recognised by Poste Italiane for \u20ac357 and \u20ac350 million respectively. The Authority also ruled that no Compensation Fund was established for the year 2011. On 13 November 2014, Poste Italiane appealed the aforementioned measure before the Lazio Regional Administrative Court. The Regional Administrative Court, in ruling no. 11416 published on 5 September 2022, partially upheld the appeal on the verification of the responsibility for the
years 2011-2012 with respect to the non-activation of the compensation fund for the year 2011. Poste, AGCom and A.I.C.A.I. (Italian Association of International Air Couriers) lodged separate appeals with the Council of State against the Regional Administrative Court ruling. The appeal judgements were joined. By judgement no. 9021 of 17 October 2023, the Council of State annulled the first instance judgement for breach of cross-examination. Poste Italiane promptly resumed the case before the Lazio Regional Administrative Court, supplementing the cross-examination by public notice. The setting of the hearing is pending.
With Resolution 313/21/CONS, notified on 21 October 2021, the AGCom closed the sanctioning proceedings, initiated with notice of objection 6/21/DSP, by imposing a fine of \u20ac0.9 million for breach of universal service continuity obligations (art. 3, paragraph 1, 5 lett. b) and 8 lett. d) of Legislative Decree no. 261/1999) and of information obligations, in relation to the closures of 239 Post Offices over the Christmas period (on Saturday 28 December 2019 and Saturday 4 January 2020) even though they had been communicated of it in advance. The Authority accepted the request, on a subordinate basis, for the application of cumulation, imposing a penalty in a reduced amount compared to the one that had been indicated for the reduced payment (\u20ac3.28 million). Payment of the penalty was made on 10 November 2021. The Authority's Resolution was appealed by the Company to the Regional Administrative Court. The setting of the hearing is pending.
On 18 April 2023, with Notice of Objection no. 6/23/DSP, the AGCom initiated sanctioning proceedings against Poste Italiane for non-compliance with the quality objectives on products included in the Universal Postal Service for the year 2022, identifying five objections. With Determination no. 26/23/DSP, notified on 7 July 2023, the Authority dismissed the sanctioning proceeding as the Company availed itself of the benefit of Article 16 of Law no. 689 of 24 November 1981, with reduced payment of the sanctions for all the disputes.
On 20 June 2023, with notice of objection no. 10/23/DSP, the AGCom initiated a sanctioning procedure against Poste Italiane, contesting seven alleged violations of the obligations relating to the service of notification of judicial documents, following a report by some users and an inspection by the Authority at some of the Company's premises. Poste Italiane did not avail itself of the benefit of the reduced payment of the penalty, and, on 3 August 2023, a defence memorandum was formalised to point out that the disputed cases do not constitute breaches of universal service obligations subject to sanctions by the Authority, but mere inefficiencies that would give rise to the right of users to obtain any reimbursement. Resolution no. 10/24/CONS, published on 18 January 2024, concluded the proceedings with an administrative fine against Poste Italiane of \u20ac0.022 million, which was paid on 5 February 2024.
On 10 October 2023, with notice of objection no. 11/23/DSP, the AGCom notified Poste Italiane of an objection for non-compliance with the order to restore the opening hours of post offices that had been closed or rescheduled during the pandemic emergency. The Company submitted its defence and availed itself of the benefit of the reduced payment. By Determination no. 28/23/DSP, notified on 14 December 2023, the sanction proceedings were closed.
Bank of Italy
The Bank of Italy, from 14 March 2022 to 15 July 2022, conducted an inspection at Poste Italiane SpA - BancoPosta RFC, on profitability and the business model, governance and control systems, interest rate risk management methods including related internal modelling, new tax credit business and associated risks. On 30 November 2022, the report containing a number of findings and a \"partially unfavourable\" assessment was delivered to Poste Italiane. Poste Italiane, by the established deadline and after discussion at the Board of Directors' meeting of 25 January 2023, notified the Bank of Italy of its considerations and planned improvements; for the only finding in respect of which a sanctioning procedure was initiated, the Company sent counter-claims in support of the correctness of its actions. After examining the counter-claims and evaluating the actions already implemented or planned by the Company, the Bank of Italy approved the filing. The improvement plan communicated to the Bank of Italy is currently being implemented and is monitored on a monthly basis by BancoPosta's control functions.
On 20 July 2022, the Authority sent a notice to Poste Italiane SpA - BancoPosta RFC and PostePay concerning the manner in which the funds received by PostePay in respect of the issuance of electronic money should be managed. It should be noted that the Supervisory Provisions for EMIs provide that such funding may be deposited with a bank authorised to operate in Italy, invested in qualified debt securities or particular units of harmonised mutual funds. Since the creation of PostePay, these sums are deposited in a postal current account (protection account) and contribute to the funds from private customers of Bancoposta RFC, which are invested in euro area government bonds. In this regard, the Authority initiated discussions with BancoPosta and PostePay in 2021, in view of the fact that BancoPosta was not deemed to be an entity that could be assimilated to the concept of \"credit institution\" under the relevant European legislation. In the face of a proposed alternative approach, aimed at equating the deposit with BancoPosta of the sums collected by PostePay with a direct investment in qualified debt securities, in the aforementioned communication the Authority asked BancoPosta and PostePay for further observations, aimed at identifying an operational solution that would allow full alignment with the relevant regulatory provisions. Upon completion of the further investigations requested, a transitional solution was identified, also on the basis of the discussions with the Authority. This solution was represented to the Bank of Italy in a communication sent jointly by BancoPosta and PostePay on 29 March 2023. Consistent with this solution, a draft of the revolving pledge agreement was prepared and sent to the Bank of Italy on 4 August 2023, supported also by the opinion of an external law firm.
IVASS - Istituto per la Vigilanza sulle Assicurazioni (the insurance regulator)
With reference to the notice of objection served by IVASS on 23 February 2023 for the alleged breach of section 183(1)(a) of the Private Insurance Code arising from the alleged late payment of insurance benefits beyond the contractual deadline and to the subsequent \"Proposal for the imposition of administrative sanctions\" served on 24 August 2023 for the amount of \u20ac0.03 million equal to the minimum amount, the settlement is confirmed following the receipt of the sanctioning measure and the payment of the sanction imposed therein and confirmed, made within the terms envisaged by the reference legislation.
In addition, on 20 July 2023, Poste Vita was served, by the \"Sanctions and Settlements Service\" of the IVASS, a further notice of objection for the alleged breach of article 183, paragraph 1, letter \"a\" of the Private Insurance Code. With regard to this case, on 24 January 2024, the \"Proposal for the imposition of administrative sanctions\" was sent to Poste Vita, which provides for the application of the minimum administrative sanction of \u20ac0.03 million. We are therefore awaiting the reasoned decision by which the sanction proceedings in question will be settled.
With regard to the IVASS inspection of Poste Vita concerning the governance, management and control profiles of investments and financial risks concluded on 7 May 2021, discussions continued with IVASS during the period and on 25 July 2023, the decision-making phase was concluded by the Supervisory Authority, which notified the Company of the imposition of a fine of \u20ac1.8 million. The sanction was imposed as a result of violations of the applicable regulations found by IVASS with particular reference to:
\u25aaalleged failures in the governance and management of financial risks as well as in the protection of policyholders' rights for investments made through so-called \"multi-asset\" funds;
\u25aaalleged deficiencies in the process of defining the Risk Appetite Framework.
Garante per la protezione dei dati personali (the Data Protection Authority)
In August 2023, the IT continuous monitoring units detected anomalies on the systems of the subsidiary Postel SpA and identified an event of compromise of some Domain Controllers, made possible through the use of various malware and the activation of a malicious code used to encrypt computers (ransomware). The execution of the ransomware, claimed by a cyber criminal group, disrupted the operation of some servers and several workstations spread across the country. Based on the provisions of the \"Data Breach Management\" procedure governing the activities of detecting, notifying and communicating personal data breaches in accordance with the provisions of EU Regulation 2016/679
(GDPR), the GDPR Team was convened and, within the time-frame set out in Articles 33 and 34 of the GDPR, the Company notified the Privacy Guarantor and all relevant stakeholders.
In 15 December 2023, the Garante per la Protezione dei Dati Personali (GPDP), considering that the elements acquired in the course of the investigative investigations, initiated following the notification of the Data Breach, may constitute one or more of the violations indicated in Article 83 of the GDPR, notified the Company of the commencement of the proceedings for the adoption of the measures and sanctions referred to in said Article 83, pointing out that Postel could be susceptible to the sanctions provided for therein.
On 12 January 2024, the Company filed its defence briefs and was heard at a hearing on 31 January 2024.
At present, the conclusion of the proceedings, which could lead to the imposition of an administrative fine, is pending. The outcome of the proceedings was taken into account when determining the provisions for risks at 31 December 2023.
Other proceedings
Federconsumatori, with a writ of summons dated 14 May 2021, initiated a class action against Poste Italiane pursuant to article 140-bis of the Consumer Code, before the Court of Rome. The value of the dispute to date is approximately \u20ac8.5 thousand.
By the summons in question, Federconsumatori contests that the capitalisation of interest on 30-year interest-bearing postal certificates (marked with the \"Q\" series, issued by Cassa Depositi e Prestiti from 1986 to 1995, pursuant to Ministerial Decree 13 June 1986 by the Minister of Treasury, which were subsequently transferred to the Ministry of Economy and Finance, pursuant to the MEF Decree of 5 December 2003) is carried out annually net of withholding tax (now substitute tax), rather than gross, with the effect of recognising to savers a lower return than that allegedly due.
On 27 July 2021, Poste Italiane appeared before the court, objecting, on a preliminary basis, to the inadmissibility of the class action, on a number of preliminary grounds, as well as to the fact that the plaintiffs' and potential members' claims were time-barred, and contested the merits of the proposed claim.
The Court of Rome, in an order dated 11 January 2022, held that the request submitted by Federconsumatori was manifestly unfounded, recognising, inter alia, the lack of passive legitimacy of Poste Italiane. Federconsumatori appealed the order of the Court of Rome, and the Court of Appeal set the hearing for closing arguments for 22 May 2024.
As reported in Note A9 - Other receivables and assets, on 5 July 2023, the decision of the Court of Cassation in the case pursuant to Law Decree no. 201/2011 was published, in which the most relevant grounds of Poste Italiane's appeal were upheld concerning the starting date of the interest accrued on the IRES credit resulting from the non-deduction of labour costs for IRAP purposes. As a result of this ruling, the case will have to be resumed before the Tax Court of Second Instance to settle the amount of interest actually due to the Group. The judgement concerning Law Decree no. 185/2008 is currently pending before the Supreme Court of Cassation.
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9. PROCEEDINGS PENDING AND PRINCIPAL RELATIONS WITH THE AUTHORITIES
The following information is provided in accordance with accounting standard IAS 37 \u2013 Provisions, Contingent Liabilities and Contingent Assets.
TAX DISPUTES
On 19 April 2018, the Tax Authorities in Rome (Guardia di Finanza \u2013 Nucleo di Polizia economico-finanziaria) entered the offices of SDA Express Courier. The purpose of the inspection was to verify the company's compliance with the requirements regarding VAT, income tax, IRAP and withholding tax for the years 2014, 2015 and 2016, pursuant to and for the purposes of articles 52 and 63 of Presidential Decree no. 633/72, art. 33 of Presidential Decree no. 600/73, art. 2 of Legislative Decree no. 68/2001 and Law no. 4/1929. On 29 November 2018, the audit was formally declared at an end. The main finding in final notice of assessment for about \u20ac1 million regards the deduction of VAT relating to the adjustment entries issued by the company in connection with discounts granted to customers following an increase in the number of shipments. Subsequently, on 5 December 2019, a notice of assessment for the year 2014 alone was notified with a total claim of \u20ac0.4 million, which, referring to the Report on Findings (PVC), mainly contests the VAT deducted. On 3 February 2020, the Company appealed against this notice and provided for the provisional payment of the fine imposed. During the first half of 2023, the facilitated conciliation procedure was formalised, which led to the settlement of the case for the 2014 tax year.
In addition, on 27 May 2021, the DRE (Regional Tax Office) served a further notice of assessment for the tax year 2015 similar to the one already filed for the year 2014 in which primarily the VAT deducted was contested. This deed has not been challenged and a procedure has been initiated with the Lazio DRE for an overall re-examination of the dispute relating to the credit notes with reference to all the periods covered by the PVC (from 2014 to 2017) in an attempt to reach an out-of-court settlement.
During the course of 2022, an out-of-court settlement was reached with the Lazio Regional Tax Office for Large Taxpayers, which in fact resulted in the partial cancellation of the VAT findings resulting from the Guardia di Finanza's (Italian Tax Police) Report on Findings of 29 November 2018 also for the year 2015 and 2016. In particular, the annulment also includes the notice of assessment for the year 2015, which became final at the same time, and which was redetermined based on an internal review by the Agenzia delle Entrate from approximately \u20ac1.2 million to a total of \u20ac51 thousand.
On the other hand, the tax settlement procedure for the years 2017 and 2018 is being finalised according to the time-lines agreed with the Agency.
In November 2018, Consorzio Postemotori received notice of an order issued by the Criminal Court in Rome and of a precautionary seizure regarding the consortium, amounting to \u20ac4.6 million. On 13 May 2019, the G.U.P. (Preliminary judge) of the Ordinary Court of Rome downgraded the original charges, ordering the committal for trial only in relation to a portion of the charges relating to the passive invoicing transactions of a subcontractor and a tax consultant of one of the partners. The Consortium mandated an external criminal lawyer to file an application for release of the criminal seizure ordered against the Consortium. On 20 December 2021, a petition for release from seizure was filed and on 24 December 2021, the Court of Rome issued an order for the restitution of the sum of \u20ac0.3 million credited back to the Consortium's current account on 7 February 2022.
SOCIAL SECURITY DISPUTES
Since 2012, and up until 31 December 2023, the Istituto Nazionale per la Previdenza Sociale (INPS, the National Institute of Social Security) office at Genoa Ponente and Roma Eur has issued Postel with some payment orders, for a total amount payable of \u20ac27.48 million. According to INPS, this amount represents social security contributions funding income support, extraordinary income support, unemployment benefit and family benefits not covered by the contributions paid to IPOST. Appeals against these requests were brought before the Court of Genoa. In support of the arguments of Postel in a memo issued on 20 October 2016, the Ministry of Labour stated that the social security contributions system applicable to Poste
Italiane also applies to all the other Group companies, with the sole exception of those that provide air transport, banking and express delivery services.
Some of the judgements have already been decided by the Court of Genoa and, on their outcome, against debit notices totalling \u20ac13.2 million, the Company was ordered to pay only the CUAF contributions of 0.68%, less the family allowances paid by Postel to employees, amounting to \u20ac0.3 million, while nothing was deemed to be due under the CIG, CIGS and mobility being at the time Postel wholly owned by the State through Poste Italiane and therefore included among the industrial enterprises of the State for which the law excludes the obligation to pay redundancy and mobility. INPS filed an appeal for the first tranche of requests made (\u20ac9.16 million), contesting the merits of the judgement at first instance and the sum arrived at. In the view of INPS, the rate applicable for contributions for family benefits, in line with recent guidance issued by INPS, should have been 4.40% in place of the 0.68% applied in the payment notices involved in the court action. In two judgements dated 28 December 2018, the Court of Appeal in Genoa confirmed in full the judgements at the first instance, rejecting INPS' appeals, who filed appeals in Cassation notified on 28 June 2019 to Postel, which appeared before the court.
On 20 and 21 February 2024, the Court of Cassation filed its rulings rejecting the main appeals brought by INPS and absorbing the cross-appeals brought by the Company. The Court stated that given the special and exclusive nature of the Ipost scheme - which is a self-contained social security and welfare system - nothing else is owed by the Company by way of social security and welfare contributions. Assessments are currently being conducted as to what action should be taken to recover the sums paid following the first and second instance judgements.
Below are the judgements already decided and those pending:
\u2022With the judgement of 19 September 2019, the Court of Genoa confirmed the position, ordering Postel to pay INPS, by way of CUAF contributions relating to the period from May 2011 to November 2012, the sum of \u20ac0.08 million, deeming the higher sums claimed in the debit notices (amounting in total to approximately \u20ac4 million) not due. By judgement of 21 May 2021, the Court of Appeal of Genoa dismissed the main appeal and the cross-appeal. INPS appealed in Cassation and Postel joined the proceedings. On 26 January 2023, the Court of Cassation ordered the case to be remitted to the register for processing together with other appeals. The hearing before the Court of Cassation was held on 10 October 2023. On 11 January 2024, the Court of Cassation filed its ruling declaring the inadmissibility of the appeal filed by INPS against the ruling published on 21 May 2021, because it was out of time, and sentencing the Institute to reimburse the Company for legal costs. This judgement therefore renders final the finding made by both the Court and the Court of Appeal of Genoa.
\u2022In a judgement of 1 February 2021, the Court of Genoa cancelled the debit notice (totalling approximately \u20ac0.64 million) for the period from December 2012 to April 2015 (excluding July 2014) and ordered INPS to pay Postel the sum of \u20ac0.06 million, plus interest. By judgement of 2 February 2022, the Court of Appeal of Genoa dismissed the appeal brought by the Institute. INPS appealed in at the Court of Cassation and Postel joined the proceedings. The Company is therefore waiting for the hearing in the Court of Cassation to be scheduled.
\u2022By means of the judgements of 26 May 2021, the Court of Genoa cancelled the debit notices (for a total of approximately \u20ac3.1 million) for certain periods between February 2011 and January 2017 and ordered the payment of the lower amounts restated for a total of \u20ac0.17 million. In its judgements of 18 May 2022 and 6 June 2022, the Court of Appeal of Genoa rejected the Company's appeals, as well as the cross-appeals filed by the Institute. Postel and INPS appealed the judgements at the Court of Cassation, for which hearings are pending.
\u2022With a ruling published on 20 September 2022, the Court of Appeal of Genoa, partially reforming the first instance ruling of 29 December 2020, ordered the Company to pay the amount indicated in the Debit Notice in the amount of approximately \u20ac0.009 million. The ruling became final because INPS did not bring the subsequent appeal in Cassation.
\u2022Additional administrative proceedings are still pending relating to the appeals submitted by Postel against the notices of adjustment for the periods from May 2009 to August 2023.
In addition, on 8 October 2019, INPS requested to regularise contributions from September 2014 to September 2019 at the non-harmonised CUAF rate of 4.40% of taxable income for social security purposes. With regard to the latter request, the Company acted differently depending on the period under consideration:
\u2022for October, November and December 2019, Postel has adjusted to the payment of the CUAF contribution in the amount of 4.40%, subject to repetition reserve;
\u2022for the previous period from September 2014 to the end of 2015, Postel appealed through administrative channels against the debit notices received from INPS with a request for payment of the CUAF at 4.40%;
\u2022for the year 2018 and the first 7 months of 2019, two Debit Notices were served with the request for payment of the CUAF at 0.68% and minor CIG, CIGS contributions to Postel, which paid, subject to repayment pending the decision of the appeal pending in the Supreme Court;
\u2022as of January 2020, Postel shall pay the CUAF rate to INPS at the rate of 0.68% instead of the rate of 4.40%, as a result of the provisions of Article 11, paragraph 5 bis of Law Decree no. 162 of 2019, converted by Law no. 8 of 28 February 2020.
Taking into account the judgements issued thus far, the reasons given for the judgements and the latest appeals brought by INPS, the Company has adjusted its provisions for risks and charges based also on the opinion of its legal advisors.
Provisions recognised in the financial statements at 31 December 2023 amount to \u20ac13.36 million.
MAIN PROCEEDINGS PENDING AND RELATIONS WITH THE AUTHORITIES
Autorit\u00e0 Garante della Concorrenza e del Mercato (AGCM - the Italian Antitrust Authority)
On 9 March 2015, the Authority notified Poste Italiane SpA of an investigation of BancoPosta RFC for alleged violation of articles 20, 21 and 22 of the Consumer Code, regarding the \"Libretto Smart\" product. On 21 December 2015, the AGCM notified Poste Italiane of its final ruling in which it deemed the Company's conduct unfair and imposed a fine of \u20ac0.54 million, limited to a tenth of the maximum applicable amount taking into account the mitigating circumstance that Poste Italiane had adopted initiatives aimed at allowing customers to benefit from the bonus rate. The Lazio Regional Administrative Court's ruling, which did not uphold the appeal against the aforementioned penalty, was challenged before the Council of State, which set the hearing for 6 June 2024.
On 3 October 2018, Poste Italiane proceeded to pay the fine of \u20ac23 million plus interest imposed by the Autorit\u00e0 Garante della Concorrenza e del Mercato (AGCM - the Antitrust Authority) following its ruling, in January 2018, that Poste Italiane had abused its dominant market position in the period from 2014 to 2017 (proceedings A493), as per art. 102 of the TFEU. This did not constitute acceptance or admission of liability in relation to the alleged misconduct and does not affect the Company's right to defend its position through the appropriate channels. Poste Italiane challenged this measure before the Lazio Regional Administrative Court which, by means of ruling no. 13477/2023, rejected the appeal. Poste Italiane appealed to the Council of State. The setting of the hearing is pending.
On 19 November 2019, the AGCM initiated proceedings PS/11563 against Poste Italiane in order to ascertain allegedly unfair commercial practice in the delivery of mail and, in particular, registered mail, in possible violation of articles 20, 21 and 22 of the Consumer Code. In particular, according to some customers: i) the advertised features of the \"registered mail delivery\" service are not reflected in the service actually provided; ii) the advertising for the \"digital registered mail
collection\" service does not make it clear that the service may no longer be free of charge in the near future and that, in any case, there are restrictions on its use, since it can only be accessed if the sender has authorised it. In January 2020, a number of consumer associations were admitted to the proceedings. At the conclusion of the proceedings, by way of a measure notified on 15 September 2020, the Authority imposed an administrative fine of \u20ac5 million, payment of which was made on 5 January 2021. The Authority acknowledged that Poste had correctly complied with the provision. However, the Company appealed to the Lazio Regional Administrative Court, which was not successful, and appealed to the Council of State whose hearing is scheduled for 26 March 2024.
On 6 April 2020, pursuant to art. 9, paragraph 3-bis of Law 192/98 and art. 14 of Law 287/90, the AGCM initiated proceedings A539 against Poste Italiane, following a complaint by a third-party supplier that Poste Italiane had presumably imposed unjustifiably burdensome contractual clauses. In particular, following the termination of contractual relations in mid-2017, the supplier was not, in fact, able to otherwise offer the services it was providing on the market because of the obligation to comply with rules and organisational parameters considered such as to make the company structure excessively rigid, making it unsuitable to operate with parties other than Poste Italiane. A hearing was held on 8 June 2020 at which Poste Italiane stated its position and, subsequently, the Authority requested the delivery of documentation. The final hearing was held on 3 May 2021, during which Poste Italiane set out its position and presented its defence. At the conclusion of the proceedings, by way of a measure notified on 6 August 2021, the Authority imposed an administrative fine of more than \u20ac11 million for abuse of economic dependence, payment of which was made on 6 September 2021. Poste Italiane appealed against the above-mentioned measure before the Lazio Regional Administrative Court (TAR), which found that Poste Italiane's actions were lawful and annulled the above-mentioned sanction with ruling no. 10044/23 issued on 13 June 2023. AGCM appealed against the Lazio Regional Administrative Court's ruling on 10 October 2023, while Poste Italiane lodged a cross-appeal on 9 November 2023. The setting of the hearing is pending.
On 9 August 2022, the Italian Antitrust Authority (\"AGCM\" or \"Authority\") - as a result of proceedings PS/11936 (\"Proceedings\") - notified PostePay with measure no. 30286 (\"Measure\"), in which it censured the conduct of the Company, claiming that, for mobile telephony offers subscribed on a flat fee, PostePay charges a consumption-based fee - more expensive than the ordinary one - when it is impossible to periodically renew the offer due to lack of sufficient credit \"in order to guarantee the continuity of the service\" without adequate information and without, therefore, a prior and informed consent of the consumer. Therefore, in the Authority's view, the conduct engaged in by PostePay would constitute a breach of Article 26(1)(f) of the Consumer Code.
As a result, the Company (i) is ordered to pay an administrative fine of \u20ac1.8 million, calculated on the basis of the turnover relating to the provision of electronic communication networks and services, and then reduced to \u20ac1.5 million, in consideration of the mitigating circumstance \"relating to certain measures taken by the professional to eliminate the conduct\".
Due to, inter alia, the partial and insufficient acknowledgement of the measures adopted by the Company, the refusal to examine the further measures proposed and the failure to accept the defence petitions submitted, the Company deemed it appropriate to lodge an appeal against the Measure before the Lazio Regional Administrative Court with an appeal filed on 28 October 2022. Therefore, the payment of the fine imposed was made by PostePay with express reservation ofappeal and, in the event, of repayment of the amount paid in the event of annulment (total or partial) of the Measure by the Lazio Regional Administrative Court and/or the Council of State. The purpose of the appeal before the Lazio Regional Administrative Court is to obtain (i) as a preliminary step, the annulment of the measure, (ii) in the alternative, the annulment of the penalty imposed or (iii) in the further alternative, its reduction to the minimum amount. The setting of the first trial hearing is pending.
On 7 November 2022, PostePay, while not accepting the Resolution, forwarded to AGCM the required compliance report, which illustrated the measures adopted by PostePay to overcome AGCM's objections, even though it had contested their grounds in the appeal pending before the Lazio Regional Administrative Court. On 2 December 2022, the Authority, having
received a response from PostePay to its request for further information, informed PostePay after the Council meeting of 13 December 2022 that it had taken note of its compliance with the order.
On 24 March 2022, the Italian Antitrust Authority (AGCM) initiated proceeding PS/11287 against Poste Italiane for alleged unfair commercial practices in relation to the information on the expiry and prescription dates of paper Interest-bearing Postal Certificates, as (i) during the placement of the postal certificates, Poste allegedly omitted to indicate the maturity and/or prescription date, as well as to provide information regarding the legal consequences arising from the expiry of the aforementioned terms and/or provided such information with a confusing and deceptive wording; (ii) in the management of the postal certificates that had expired over the last five years, Poste allegedly omitted to inform the holders of postal certificates close to the expiry of the prescription period, of the expiry of that period and the legal consequences arising in the event of failure to request the redemption of the postal certificate within that period. On 13 April 2022, Poste sent a memorandum to the AGCM in which it responded to the request for information and the objections contained in the writ. On 30 August 2022, the AGCM notified Poste of the Notice of Investigative Findings, substantially confirming the objections of the opening proceedings. On 19 September 2022, Poste filed its final statement of defence, accompanied by the steps it had taken, on a voluntary basis, to eliminate the Authority's concerns, without complying with the objections raised in the proceedings. On 4 November 2022, the Authority notified Poste of its final decision imposing an administrative penalty of \u20ac1.4 million. This amount was thus quantified taking into account the actions implemented by the Company on a voluntary basis, which were deemed appropriate to improve the information provided to consumers; in fact, the Authority granted Poste Italiane a 60% reduction in the amount of the fine. In line with the provisions of the final measure, on 2 February 2023, the Company sent its Report of Compliance with the AGCM's warning. The Resolution itself was challenged at the Regional Administrative Court by the Company, which, at the outcome of the hearing on the merits of 7 June 2023, issued an order, on 13 September 2023, ordering the suspension of the trial in question, pending the definition of the preliminary referral to the Court of Justice of the European Union ordered by the same Regional Administrative Court with order no. 12962 of 1 August 2023.
With a measure adopted at the meeting of 30 January 2024 and notified to Poste Italiane on 7 February 2024, the AGCM initiated an investigation procedure against the Company in order to ascertain the existence of a possible breach of Article 8, paragraph 2-quater, of Law no. 287/1990. At the same time, the Authority initiated proceedings to verify the actual existence of the requirements for the adoption of precautionary measures pursuant to Article 14-bis of the same law. Specifically, the Authority observed that Poste, through its subsidiary PostePay SpA, is active in the electricity and gas supply sector, and allegedly denied two of the latter's competing companies access, pursuant to Article 8, paragraph 2-quater of Law no. 287/90, to the resources made available to PostePay, of which it has exclusive use in connection with its activities within the perimeter of the universal postal service. The Authority also ordered inspections, which were held on 7 February 2024, and set the conclusion of the proceedings at 19 July 2024, granting Poste a period of seven days to file pleadings and documents relating to the precautionary proceedings. On 14 February 2024, the Company filed its memorandum in the precautionary proceedings, contesting the Authority's approach and, in particular, the disapplication of the provisions of Article 1(6) of Law Decree no. 59/2021, as amended and supplemented, exempting Poste from the application of Article 8, paragraph 2-quater, of Law no. 287/1990 until 31 December 2026.
Autorit\u00e0 per le Garanzie nelle Comunicazioni (AGCOM - the Italian Communications Authority)
Pursuant to Law Decree no. 201 of 6 December 2011, converted into Law 214 of 22 December 2011, responsibility for regulation and supervision of the postal sector was transferred to the Italian Communications Authority (AGCom).
Following transposition into Italian law of the third European postal services directive (Directive 2008/6/EC), the so-called \"net avoided cost\" method has been applied in quantifying the cost of the universal service\"314F315. In this regard:
(i)On 24 February 2023, AGCom Resolution 28/23/CONS was published, initiating the procedure to verify the net cost of the universal postal service incurred by Poste Italiane for the years 2020 and 2021. On 22 December 2023, AGCom Resolution 322/23/CONS was published, with which the Authority launched the public consultation and Poste Italiane provided its comments within the deadline. On 14 March 2024, AGCom Resolution 62/24/CONS was published, concluding the procedure to verify the net cost of the universal postal service incurred by Poste Italiane for the years 2020 and 2021. In particular, the burden of the universal postal service for these years has been quantified at \u20ac585 and \u20ac480 million respectively. The Authority also established that the universal service charge for the years 2020 and 2021 is inequitable and that, for the same years, unlike what was established in previous years, the appropriate proceedings will be launched to evaluate the addition to the Compensation Fund referred to in article 10 of Legislative Decree no. 261/1999.
(ii)On 1 July 2021, AGCom Resolution 199/21/CONS was published, concluding the procedure to verify the net cost of the universal postal service incurred by Poste Italiane for the years 2017, 2018 and 2019. In particular, the burden of the universal postal service for these years has been quantified at \u20ac354.5, \u20ac334.5 and \u20ac175 million respectively. For the 2019 financial year, although the quantified charge (\u20ac175 million) is lower than the authorised offsets (\u20ac262 million), the charge for the provision of the universal postal service over the entire period (i.e., the previous 2016-2019 Service Contract) is in any case higher than the offsets authorised by the European Commission. The Authority also established that the universal service charge for the years 2017, 2018 and 2019 is inequitable and that, for the same years, in continuity with what was established in previous years, the Compensation Fund referred to in article 10 of Legislative Decree no. 261/1999 is not established. On 22 September 2021, Poste Italiane appealed the aforementioned resolution at the Lazio Regional Administrative Court (still pending).
(iii)AGCom Resolution 214/19/CONS regarding \"Assessment of the net cost of the universal postal service for 2015 and 2016\" was published on 2 July 2019. In addition to acknowledging that the cost is unfair, the Resolution quantified the cost of providing the Universal Postal Service in 2015 and 2016, respectively, as \u20ac389 million and \u20ac356 million, compared with compensation of \u20ac329 million and \u20ac262 million provided for in the Contratto di Programma. AGCom did not establish a Compensation Fund for 2015 and 2016, so it has not been possible to recover the difference between compensation provided by the state and the costs quantified by AGCom. On 2 October 2019, Poste Italiane appealed the aforementioned resolution at the Lazio Regional Administrative Court (still pending).
(iv)AGCom Resolution 298/17/CONS regarding \"Assessment of the net cost of the universal postal service for 2013 and 2014\" was published on 6 September 2017. In addition to acknowledging that the cost is unfair, the Resolution quantified the cost of providing the Universal Postal Service in 2013 and 2014, respectively, as \u20ac393 million and \u20ac409 million, compared with compensation of \u20ac343 million and \u20ac336 million provided for in the Contratto di Programma. The Compensation Fund was also not established for the years 2013 and 2014. On 6 November 2017, Poste Italiane appealed the aforementioned resolution at the Lazio Regional Administrative Court (still pending).
(v)AGCom Resolution 412/14/CONS regarding \"Assessment of the net cost of the universal postal service for 2011 and 2012\" was published on 31 July 2014. In addition to acknowledging that the cost is unfair, the Resolution quantified the cost of providing the Universal Postal Service in 2011 and 2012, respectively, as \u20ac381 million and \u20ac327 million for fees originally recognised by Poste Italiane for \u20ac357 and \u20ac350 million respectively. The Authority also ruled that no Compensation Fund was established for the year 2011. On 13 November 2014, Poste Italiane appealed the aforementioned measure before the Lazio Regional Administrative Court. The Regional Administrative Court, in ruling no. 11416 published on 5 September 2022, partially upheld the appeal on the verification of the responsibility for the
years 2011-2012 with respect to the non-activation of the compensation fund for the year 2011. Poste, AGCom and A.I.C.A.I. (Italian Association of International Air Couriers) lodged separate appeals with the Council of State against the Regional Administrative Court ruling. The appeal judgements were joined. By judgement no. 9021 of 17 October 2023, the Council of State annulled the first instance judgement for breach of cross-examination. Poste Italiane promptly resumed the case before the Lazio Regional Administrative Court, supplementing the cross-examination by public notice. The setting of the hearing is pending.
With Resolution 313/21/CONS, notified on 21 October 2021, the AGCom closed the sanctioning proceedings, initiated with notice of objection 6/21/DSP, by imposing a fine of \u20ac0.9 million for breach of universal service continuity obligations (art. 3, paragraph 1, 5 lett. b) and 8 lett. d) of Legislative Decree no. 261/1999) and of information obligations, in relation to the closures of 239 Post Offices over the Christmas period (on Saturday 28 December 2019 and Saturday 4 January 2020) even though they had been communicated of it in advance. The Authority accepted the request, on a subordinate basis, for the application of cumulation, imposing a penalty in a reduced amount compared to the one that had been indicated for the reduced payment (\u20ac3.28 million). Payment of the penalty was made on 10 November 2021. The Authority's Resolution was appealed by the Company to the Regional Administrative Court. The setting of the hearing is pending.
On 18 April 2023, with Notice of Objection no. 6/23/DSP, the AGCom initiated sanctioning proceedings against Poste Italiane for non-compliance with the quality objectives on products included in the Universal Postal Service for the year 2022, identifying five objections. With Determination no. 26/23/DSP, notified on 7 July 2023, the Authority dismissed the sanctioning proceeding as the Company availed itself of the benefit of Article 16 of Law no. 689 of 24 November 1981, with reduced payment of the sanctions for all the disputes.
On 20 June 2023, with notice of objection no. 10/23/DSP, the AGCom initiated a sanctioning procedure against Poste Italiane, contesting seven alleged violations of the obligations relating to the service of notification of judicial documents, following a report by some users and an inspection by the Authority at some of the Company's premises. Poste Italiane did not avail itself of the benefit of the reduced payment of the penalty, and, on 3 August 2023, a defence memorandum was formalised to point out that the disputed cases do not constitute breaches of universal service obligations subject to sanctions by the Authority, but mere inefficiencies that would give rise to the right of users to obtain any reimbursement. Resolution no. 10/24/CONS, published on 18 January 2024, concluded the proceedings with an administrative fine against Poste Italiane of \u20ac0.022 million, which was paid on 5 February 2024.
On 10 October 2023, with notice of objection no. 11/23/DSP, the AGCom notified Poste Italiane of an objection for non-compliance with the order to restore the opening hours of post offices that had been closed or rescheduled during the pandemic emergency. The Company submitted its defence and availed itself of the benefit of the reduced payment. By Determination no. 28/23/DSP, notified on 14 December 2023, the sanction proceedings were closed.
Bank of Italy
The Bank of Italy, from 14 March 2022 to 15 July 2022, conducted an inspection at Poste Italiane SpA - BancoPosta RFC, on profitability and the business model, governance and control systems, interest rate risk management methods including related internal modelling, new tax credit business and associated risks. On 30 November 2022, the report containing a number of findings and a \"partially unfavourable\" assessment was delivered to Poste Italiane. Poste Italiane, by the established deadline and after discussion at the Board of Directors' meeting of 25 January 2023, notified the Bank of Italy of its considerations and planned improvements; for the only finding in respect of which a sanctioning procedure was initiated, the Company sent counter-claims in support of the correctness of its actions. After examining the counter-claims and evaluating the actions already implemented or planned by the Company, the Bank of Italy approved the filing. The improvement plan communicated to the Bank of Italy is currently being implemented and is monitored on a monthly basis by BancoPosta's control functions.
On 20 July 2022, the Authority sent a notice to Poste Italiane SpA - BancoPosta RFC and PostePay concerning the manner in which the funds received by PostePay in respect of the issuance of electronic money should be managed. It should be noted that the Supervisory Provisions for EMIs provide that such funding may be deposited with a bank authorised to operate in Italy, invested in qualified debt securities or particular units of harmonised mutual funds. Since the creation of PostePay, these sums are deposited in a postal current account (protection account) and contribute to the funds from private customers of Bancoposta RFC, which are invested in euro area government bonds. In this regard, the Authority initiated discussions with BancoPosta and PostePay in 2021, in view of the fact that BancoPosta was not deemed to be an entity that could be assimilated to the concept of \"credit institution\" under the relevant European legislation. In the face of a proposed alternative approach, aimed at equating the deposit with BancoPosta of the sums collected by PostePay with a direct investment in qualified debt securities, in the aforementioned communication the Authority asked BancoPosta and PostePay for further observations, aimed at identifying an operational solution that would allow full alignment with the relevant regulatory provisions. Upon completion of the further investigations requested, a transitional solution was identified, also on the basis of the discussions with the Authority. This solution was represented to the Bank of Italy in a communication sent jointly by BancoPosta and PostePay on 29 March 2023. Consistent with this solution, a draft of the revolving pledge agreement was prepared and sent to the Bank of Italy on 4 August 2023, supported also by the opinion of an external law firm.
IVASS - Istituto per la Vigilanza sulle Assicurazioni (the insurance regulator)
With reference to the notice of objection served by IVASS on 23 February 2023 for the alleged breach of section 183(1)(a) of the Private Insurance Code arising from the alleged late payment of insurance benefits beyond the contractual deadline and to the subsequent \"Proposal for the imposition of administrative sanctions\" served on 24 August 2023 for the amount of \u20ac0.03 million equal to the minimum amount, the settlement is confirmed following the receipt of the sanctioning measure and the payment of the sanction imposed therein and confirmed, made within the terms envisaged by the reference legislation.
In addition, on 20 July 2023, Poste Vita was served, by the \"Sanctions and Settlements Service\" of the IVASS, a further notice of objection for the alleged breach of article 183, paragraph 1, letter \"a\" of the Private Insurance Code. With regard to this case, on 24 January 2024, the \"Proposal for the imposition of administrative sanctions\" was sent to Poste Vita, which provides for the application of the minimum administrative sanction of \u20ac0.03 million. We are therefore awaiting the reasoned decision by which the sanction proceedings in question will be settled.
With regard to the IVASS inspection of Poste Vita concerning the governance, management and control profiles of investments and financial risks concluded on 7 May 2021, discussions continued with IVASS during the period and on 25 July 2023, the decision-making phase was concluded by the Supervisory Authority, which notified the Company of the imposition of a fine of \u20ac1.8 million. The sanction was imposed as a result of violations of the applicable regulations found by IVASS with particular reference to:
\u25aaalleged failures in the governance and management of financial risks as well as in the protection of policyholders' rights for investments made through so-called \"multi-asset\" funds;
\u25aaalleged deficiencies in the process of defining the Risk Appetite Framework.
Garante per la protezione dei dati personali (the Data Protection Authority)
In August 2023, the IT continuous monitoring units detected anomalies on the systems of the subsidiary Postel SpA and identified an event of compromise of some Domain Controllers, made possible through the use of various malware and the activation of a malicious code used to encrypt computers (ransomware). The execution of the ransomware, claimed by a cyber criminal group, disrupted the operation of some servers and several workstations spread across the country. Based on the provisions of the \"Data Breach Management\" procedure governing the activities of detecting, notifying and communicating personal data breaches in accordance with the provisions of EU Regulation 2016/679
(GDPR), the GDPR Team was convened and, within the time-frame set out in Articles 33 and 34 of the GDPR, the Company notified the Privacy Guarantor and all relevant stakeholders.
In 15 December 2023, the Garante per la Protezione dei Dati Personali (GPDP), considering that the elements acquired in the course of the investigative investigations, initiated following the notification of the Data Breach, may constitute one or more of the violations indicated in Article 83 of the GDPR, notified the Company of the commencement of the proceedings for the adoption of the measures and sanctions referred to in said Article 83, pointing out that Postel could be susceptible to the sanctions provided for therein.
On 12 January 2024, the Company filed its defence briefs and was heard at a hearing on 31 January 2024.
At present, the conclusion of the proceedings, which could lead to the imposition of an administrative fine, is pending. The outcome of the proceedings was taken into account when determining the provisions for risks at 31 December 2023.
Other proceedings
Federconsumatori, with a writ of summons dated 14 May 2021, initiated a class action against Poste Italiane pursuant to article 140-bis of the Consumer Code, before the Court of Rome. The value of the dispute to date is approximately \u20ac8.5 thousand.
By the summons in question, Federconsumatori contests that the capitalisation of interest on 30-year interest-bearing postal certificates (marked with the \"Q\" series, issued by Cassa Depositi e Prestiti from 1986 to 1995, pursuant to Ministerial Decree 13 June 1986 by the Minister of Treasury, which were subsequently transferred to the Ministry of Economy and Finance, pursuant to the MEF Decree of 5 December 2003) is carried out annually net of withholding tax (now substitute tax), rather than gross, with the effect of recognising to savers a lower return than that allegedly due.
On 27 July 2021, Poste Italiane appeared before the court, objecting, on a preliminary basis, to the inadmissibility of the class action, on a number of preliminary grounds, as well as to the fact that the plaintiffs' and potential members' claims were time-barred, and contested the merits of the proposed claim.
The Court of Rome, in an order dated 11 January 2022, held that the request submitted by Federconsumatori was manifestly unfounded, recognising, inter alia, the lack of passive legitimacy of Poste Italiane. Federconsumatori appealed the order of the Court of Rome, and the Court of Appeal set the hearing for closing arguments for 22 May 2024.
As reported in Note A9 - Other receivables and assets, on 5 July 2023, the decision of the Court of Cassation in the case pursuant to Law Decree no. 201/2011 was published, in which the most relevant grounds of Poste Italiane's appeal were upheld concerning the starting date of the interest accrued on the IRES credit resulting from the non-deduction of labour costs for IRAP purposes. As a result of this ruling, the case will have to be resumed before the Tax Court of Second Instance to settle the amount of interest actually due to the Group. The judgement concerning Law Decree no. 185/2008 is currently pending before the Supreme Court of Cassation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page835-cflshid_384521-tag141639": { "value": "
10. MATERIAL NON-RECURRING EVENTS AND/OR TRANSACTIONS
In 2023, the Poste Italiane Group did not note any material effects of non-recurring events and transactions315F316 entered into by the Group, pursuant to CONSOB communication no. DEM/6064293 of 28 July 2006.
", "dimensions": { "concept": "ext:DisclosureOfNonRecurringSignificantEventsAndTransactions", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page835-cflshid_384521-tag141640": { "value": "
11. EXCEPTIONAL AND/OR UNUSUAL TRANSACTIONS
Under the definition provided by the CONSOB ruling of 28 July 2006, the Poste Italiane Group did not conduct any exceptional and/or unusual transactions316F317 in 2023.
", "dimensions": { "concept": "ext:DisclosureOfUnusualEventsAndTransactions", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page835-cflshid_384521-tag141638": { "value": "
12. MATERIAL EVENTS AFTER THE END OF THE REPORTING PERIOD
The events that occurred after the reporting date are described below. For a complete description of these events, please refer to paragraph 3.1 - Principal corporate actions.
\u2022MLK Fresh
On 31 January 2024, through the establishment of the NewCo named \"MLK Fresh S.r.l.\" (\"MLK Fresh\"), the partnership in the Fresh Food sector between MLK Deliveries S.p.A. and Mazzocco S.r.l. (\"Mazzocco\"), an Italtrans Group company operating as a national refrigerated courier, was formalised.
MLK Fresh, 70% owned by MLK and 30% by Mazzocco, will be the vehicle through which the parties will offer advanced delivery services in Italy dedicated to the fresh food segment in the B2C e-commerce and/or scheduled deliveries market.
\u2022Address Software
On 24 January 2024, Postel sold its entire stake in Address Software S.r.l. to Poste Italiane S.p.A. This transaction was in preparation for the start of the merger by incorporation of Address Software S.r.l. into Poste Italiane S.p.A., which will become effective in 2024.
\u2022N&TS Group
On 28 February 2024, PostePay signed an agreement to acquire 20% of N&TS GROUP Networks & Transactional Systems Group S.p.A. (\"N&TS GROUP\"), a leading Italian company in software solutions for electronic payments. The transaction, whose closing is subject to the fulfilment of conditions precedent, aims to enhance PostePay's technological expertise in order to support its expansion strategy in the digital payments market.
\u2022Poste Logistics
On 4 March 2024, Poste Logistics S.p.A. (\"NewCo\") was established, whose share capital is wholly owned by Poste Italiane S.p.A. NewCo will focus on integrated logistics activities for the Italian Postal Group, benefiting from the business unit of SDA Express Courier S.p.A. (\"SDA\") concerning the integrated logistics business, through a partial demerger transaction. The transaction - whose partial demerger project has already been approved in March by the Boards of Directors of the companies involved in the transaction and will also be subject to resolution by the relevant extraordinary shareholders' meetings - will be formalised by the second half of 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page836-cflshid_384982-tag141641": { "value": "13. ADDITIONAL INFORMATION
This note provides information applicable to both the Poste Italiane Group's consolidated financial statements and Poste Italiane SpA's separate financial statements, including qualitative and quantitative disclosures on matters required, to a residual degree, by accounting standards, not specifically dealt with in the previous notes.
OFFSETTING FINANCIAL ASSETS AND LIABILITIES
In compliance with IFRS 7 \u2013 Financial instruments: Disclosures, this section provides details of financial assets and liabilities that are subject to master netting agreements or similar arrangements, regardless of whether the financial instruments have been offset in keeping with paragraph 42 of IAS 32317F318.
In particular, the disclosures in question concern the following positions relating to Poste Italiane SpA at 31 December 2023:
\u2022derivative assets and liabilities and related collateral, represented both by cash and government securities;
\u2022repurchase agreements and reverse repurchase agreements and the related collateral, represented both by cash and government securities.
The positions in question are subject to standard bilateral netting agreements that allow, in the event of the counterparty's default, the offsetting of debit and credit positions covered by ISDA contracts and repurchase agreements, for which GMRA agreements have been entered into.
Repurchase agreement positions managed through the Central Counterparty that meet the requirements of IAS 32 are shown net of offsetting.
In order to present the tables in compliance with the requirements of IFRS 7, repurchase agreements are shown at amortised cost, whilst derivative transactions are shown at fair value; the relevant financial guarantees are measured at fair value.
*The gross amount of financial assets and liabilities includes the financial instruments subject to offsetting and those subject to master netting agreements or similar arrangements, regardless of whether the financial instruments have been offset.
TRANSFERS OF FINANCIAL ASSETS THAT ARE NOT DERECOGNISED
In accordance with IFRS 7 - Financial Instruments: Disclosures, this section provides additional information on the transfer of financial assets that are not derecognised (continuing involvement).
At 31 December 2023, these assets concern reverse repurchase agreements entered into with primary financial intermediaries and entirely attributable to the Parent Company.
FINANCIAL ASSETS SUBJECT TO ENCUMBRANCES
This paragraph provides information on the nominal value and carrying amount of financial assets delivered to counterparties as collateral for repurchase agreements and interest rate swaps, and financial assets delivered to the Bank of Italy as collateral for intraday credit granted to the Parent Company and as collateral for SEPA Direct Debits.
At 31 December 2023, the Parent Company has received financial assets as collateral for reversal repos, having a notional value of \u20ac3,874 million and a fair value of \u20ac4,110 million.
In addition, securities with a nominal value of \u20ac2,999 million are committed for repurchase agreements entered into with Cassa Compensazione e Garanzia in December 2023 and settled in early January 2024.
EXPOSURE TO SOVEREIGN DEBT
With regard to financial assets, as required by Communication DEM/11070007 of 28 July 2011, implementing Document 2011/266 published by the European Securities and Markets Authority (ESMA) and later amendments, the Group's exposure to sovereign debt at 31 December 2023 is shown in the table below.
Poste Italiane Group - Exposure to sovereign debt securities
\u00a0
\u00a0
\u00a0
\u00a0
Description
31.12.2023
31.12.2022
(\u20acm)
Nominal value
Carrying amount
Market Value
Nominal value
Carrying amount
Market Value
\u00a0
\u00a0
\u00a0
Italy
133,977
128,548
126,362
138,017
126,397
122,321
Financial assets at amortised cost
29,757
29,475
27,289
27,306
26,921
22,845
Financial assets at FVTOCI
104,207
99,060
99,060
110,698
99,463
99,463
Financial assets at FVTPL
13
13
13
13
14
14
\u00a0
\u00a0
\u00a0
Austria
1,023
1,003
1,003
215
170
170
Financial assets at amortised cost
-
-
-
-
-
-
Financial assets at FVTOCI
1,023
1,003
1,003
215
170
170
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
Belgium
4,545
3,968
3,968
2,876
2,123
2,123
Financial assets at amortised cost
13
12
12
-
-
-
Financial assets at FVTOCI
4,532
3,956
3,956
2,876
2,123
2,123
Finland
1,026
1,002
1,002
138
122
122
Financial assets at amortised cost
-
-
-
-
-
-
Financial assets at FVTOCI
1,026
1,002
1,002
138
122
122
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
France
7,780
6,287
6,287
5,050
3,411
3,411
Financial assets at amortised cost
-
-
-
-
-
-
Financial assets at FVTOCI
7,780
6,287
6,287
5,050
3,411
3,411
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
Germany
1,183
1,133
1,133
851
792
792
Financial assets at amortised cost
-
-
-
-
-
-
Financial assets at FVTOCI
1,183
1,133
1,133
851
792
792
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
Ireland
811
741
741
455
372
372
Financial assets at amortised cost
-
-
-
-
-
-
Financial assets at FVTOCI
811
741
741
455
372
372
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
Holland
328
335
335
295
293
293
Financial assets at amortised cost
-
-
-
-
-
-
Financial assets at FVTOCI
328
335
335
295
293
293
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
Portugal
458
374
374
416
295
295
Financial assets at amortised cost
-
-
-
-
-
-
Financial assets at FVTOCI
458
374
374
416
295
295
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
Spain
4,045
2,607
2,606
3,860
2,261
2,261
Financial assets at amortised cost
3
3
3
3
3
3
Financial assets at FVTOCI
4,042
2,604
2,604
3,857
2,258
2,258
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
USA
111
100
100
50
38
38
Financial assets at amortised cost
-
-
-
-
-
-
Financial assets at FVTOCI
111
100
100
50
38
38
Financial assets at FVTPL
-
-
-
-
-
-
\u00a0
\u00a0
\u00a0
Other countries
202
181
181
203
169
169
Financial assets at amortised cost
-
-
-
-
-
-
Financial assets at FVTOCI
202
181
181
203
169
169
Financial assets at FVTPL
0
0
0
-
-
-
\u00a0
\u00a0
\u00a0
Total
155,489
146,278
144,092
152,426
136,444
132,367
Below are details for Poste Italiane
UNCONSOLIDATED STRUCTURED ENTITIES
In order to make investments as consistent as possible with the risk-return profiles of the policies issued, ensuring management flexibility and efficiency, in certain cases Poste Vita SpA has purchased over 50% of the assets managed by certain investment funds. In these cases, tests have been performed in keeping with IFRS to determine the existence of control. The results of the tests on such funds suggest that the company does not exercise any control within the meaning of IFRS 10 \u2013 Consolidated Financial Statements. However, these Funds fall within the definition of unconsolidated structured entities: a structured entity is an entity designed in such a way as not to make voting rights the key factor in determining control over it, as in the case where voting rights refer solely to administrative activities and the relevant operations are managed on the basis of contractual arrangements.
Nature of the involvement in the unconsolidated structured entity
\u00a0
\u00a0
\u00a0
\u00a0
(\u20acm)
\u00a0
\u00a0
\u00a0
% investment
NAV
ISIN - Name
Nature of entity
Activity of the Fund
Ref. date
Amount
LU1379774190 - MULTIFLEX-DIVERSIFIED DIS-CM
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities)
100
29/12/2023
5,621
LU1407712014 - MULTIFLEX - Global Optimal Multi Asset Fund
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
29/12/2023
4,657
LU1407712287 - MULTIFLEX - Strategic Insurance Distribution
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
29/12/2023
4,493
LU1407711800 - MULTIFLEX - Dynamic Multi Asset Fund
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
29/12/2023
4,044
LU1193254122 - MFX - GLOBAL FUND - ASSET GLOBAL FUND (PIMCO MULTI ASSET)
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities)
100
29/12/2023
3,804
LU1808839242 - MULTIFLEX-OLYMP INSURN MA-CM
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
29/12/2023
840
LU1500341240 - MULTIFLEX-LT OPTIMAL M/A-CM
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
29/12/2023
825
LU1808838863 - MULTIFLEX-OLYMPIUM OPT MA-CM
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
29/12/2023
563
LU1500341752 - MULTIFLEX-DYNAMIC LT M/A-CM
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
29/12/2023
539
QU0006738052 - Prima EU Private Debt Opportunity Fund
Open-ended fund falling within the scope of Directive 2011/61/EU
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
30/09/2023
507
IT0004937691 - PRIMA HEDGE PLATINUM GROWTH ISIN IE00BK1KDS71
Fund of Hedge Funds falling within the scope of Directive 2011/61/EU
Pursuit of absolute returns, with low long-term volatility and correlation with the main financial markets
100
30/11/2023
432
QU0006744795 - Prima European Direct Lending 1 Fund
Open-ended fund falling within the scope of Directive 2011/61/EU
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
30/09/2023
456
IT0005174450 - DIAMOND EUROZONE FUND OFFICE UBS
Closed-end real estate alternative investment fund under Italian law falling within the scope of Directive 2011/61/EU
Investment in \"core\" and \"core plus\" real estate assets for working (office) use, located in the Eurozone and euro-denominated
100
30/09/2023
399
LU2051218035 - OLYMPIUM SEVERUM FUND
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
29/12/2023
437
IT0005247819 - Diamond Core
Closed-end real estate alternative investment fund under Italian law falling within the scope of Directive 2011/61/EU
Investment in real estate assets, real property rights, including those resulting from property lease-translational arrangements, concessions and other similar rights in accordance with the legislation from time to time in effect.
100
30/06/2023
283
LU1500341166 - MULTIFLEX-OLYMPIUM DYNAMIC-MULTIASSET FUND
Open-end harmonised UCITS
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
29/12/2023
293
IT0005386666 - Fund i3-Dante segment Convivio
Italian-registered, closed-end multi-segment alternative real estate investment fund
Investment in \"core\" and \"core plus\" income real estate located in the central areas of the main Italian cities, starting with Rome and Milan.
100
30/06/2023
267
QU0006746865 - ALC Prima European Private Credit Feeder Fund
Open-ended fund falling within the scope of Directive 2011/61/EU
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
30/09/2023
269
IT0005215113 - CBRE DIAMOND FUND
Closed-end real estate alternative investment fund under Italian law falling within the scope of Directive 2011/61/EU
Investment in real estate assets, real estate rights, including those deriving from real estate lease contracts, in any case carried out without particular geographical location constraints but in any case in Italy, may be used for the following purposes: logistics, retirement homes, residential, hotel, mixed-use and office or commercial use.
100
30/09/2023
157
QU0006745081 - Prima Real Estate Europe Fund I
Open-ended fund falling within the scope of Directive 2011/61/EU
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
30/09/2023
329
IT0005212193 - DIAMOND ITALIAN PROPERTIES
Closed-end real estate alternative investment fund under Italian law falling within the scope of Directive 2011/61/EU
Investment in real estate assets, real property rights, including those resulting from property lease-translational arrangements, concessions and other similar rights in accordance with the legislation from time to time in effect.
100
30/06/2023
159
QU0006742476 - PRIMA GLOBAL EQUITY PARTNERS FUND
Open-ended fund falling within the scope of Directive 2011/61/EU
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
30/09/2023
204
QU0006738854 - Prima Credit Opportunity Fund
Open-ended fund falling within the scope of Directive 2011/61/EU
Investment in a mix of asset classes (corporate bonds, government bonds and equities).
100
30/11/2023
130
IT0005210593 - DIAMOND OTHER SECTOR ITALY
Closed-end real estate alternative investment fund under Italian law falling within the scope of Directive 2011/61/EU
Investment in real estate assets, real property rights, including those resulting from property lease arrangements, participating interests in property companies and the professional management and development of the fund's assets.
100
30/06/2023
108
IT0005210387 - DIAMOND EUROZONE RETAIL PROPERTY FUND
Closed-end real estate alternative investment fund under Italian law falling within the scope of Directive 2011/61/EU
Investment in \"core\" and \"core plus\" real estate assets for retail use, located in the Eurozone and euro-denominated
100
30/06/2023
90
LU1581282842 - Indaco SICAV SIF - Indaco CIFC US Loan
Open-ended fund falling within the scope of Directive 2011/61/EU
Investment in a mix of asset classes (corporate bonds, government bonds, loans and equities).
100
30/11/2023
86
LU1081427665 - SHOPPING PROPERTY FUND 2
Closed-end fund within the scope of Directive 2011/61/EU
Invests in the Shopping Property Fund 2: master fund which invests primarily in commercial properties and, marginally, in office buildings and alternative sectors. It does not invest in property debt
65
30/09/2023
54
Nature of the involvement in the unconsolidated structured entity
The purpose of Poste Vita's investment in the funds is to diversify its portfolio of financial instruments intended to cover Class I products (Separately Managed Accounts), with the objective of mitigating the concentration of investments in Italian government securities. The entities primarily regard open-end harmonised funds that invest in a mix of assets, such as corporate bonds, government bonds and equities, and closed-end real estate funds that invest in property and property rights. Certain details are provided below.
Risk nature
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20acm)
ISIN - Name
Classification
Investment carrying amount
Maximum loss exposure
Difference between carrying amount and maximum exposure
Method to determine maximum loss exposure
LU1379774190 - MULTIFLEX-DIVERSIFIED DIS-CM
FVTPL
5,621
553
5,068
Annual VaR at 99.5% over 5 years and a half-life of 1 year
LU1407712014 - MULTIFLEX - Global Optimal Multi Asset Fund
FVTPL
4,657
401
4,255
Annual VaR at 99.5% over 5 years and a half-life of 1 year
LU1407712287 - MULTIFLEX - Strategic Insurance Distribution
FVTPL
4,493
341
4,152
Annual VaR at 99.5% over 5 years and a half-life of 1 year
LU1407711800 - MULTIFLEX - Dynamic Multi Asset Fund
FVTPL
4,044
368
3,676
Annual VaR at 99.5% over 5 years and a half-life of 1 year
LU1193254122 - MFX - GLOBAL FUND - ASSET GLOBAL FUND (PIMCO MULTI ASSET)
FVTPL
3,804
211
3,593
Annual VaR at 99.5% over 5 years and a half-life of 1 year
LU1808839242 - MULTIFLEX-OLYMP INSURN MA-CM
FVTPL
840
65
776
Annual VaR at 99.5% over 5 years and a half-life of 1 year
LU1500341240 - MULTIFLEX-LT OPTIMAL M/A-CM
FVTPL
825
87
737
Annual VaR at 99.5% over 5 years and a half-life of 1 year
LU1808838863 - MULTIFLEX-OLYMPIUM OPT MA-CM
FVTPL
563
47
516
Annual VaR at 99.5% over 5 years and a half-life of 1 year
LU1500341752 - MULTIFLEX-DYNAMIC LT M/A-CM
FVTPL
539
48
491
Annual VaR at 99.5% over 5 years and a half-life of 1 year
LU2051218035 - OLYMPIUM SEVERUM FUND
FVTPL
437
69
367
Annual VaR at 99.5% over 5 years and a half-life of 1 year
IT0004937691 - PRIMA HEDGE PLATINUM GROWTH ISIN IE00BK1KDS71
FVTPL
432
66
365
Annual VaR at 99.5% over 5 years and a half-life of 1 year
IT0005174450 - DIAMOND EUROZONE FUND OFFICE UBS
FVTPL
399
162
237
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
QU0006744795 - Prima European Direct Lending 1 Fund
FVTPL
456
53
403
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
QU0006738052 - Prima EU Private Debt Opportunity Fund
FVTPL
507
55
452
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
LU1500341166 - MULTIFLEX-OLYMPIUM DYNAMIC-MULTIASSET FUND
FVTPL
293
27
266
Annual VaR at 99.5% over 5 years and a half-life of 1 year
IT0005247819 - Diamond Core
FVTPL
283
93
189
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
IT0005386666 - Fund i3-Dante segment Convivio
FVTPL
267
67
200
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
QU0006746865 - ALC Prima European Private Credit Feeder Fund
FVTPL
269
30
239
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
QU0006745081 - Prima Real Estate Europe Fund I
FVTPL
329
120
209
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
IT0005212193 - DIAMOND ITALIAN PROPERTIES
FVTPL
159
55
104
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
IT0005215113 - CBRE DIAMOND FUND
FVTPL
157
51
106
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
QU0006738854 - Prima Credit Opportunity Fund
FVTPL
130
10
120
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
QU0006742476 - PRIMA GLOBAL EQUITY PARTNERS FUND
FVTPL
204
114
90
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
IT0005210593 - DIAMOND OTHER SECTOR ITALY
FVTPL
108
39
69
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
IT0005210387 - DIAMOND EUROZONE RETAIL PROPERTY FUND
FVTPL
90
35
56
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
LU1581282842 - Indaco SICAV SIF - Indaco CIFC US Loan
FVTPL
86
23
63
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
LU1081427665 - SHOPPING PROPERTY FUND 2
FVTPL
35
24
12
VaR at 99.5% over a time horizon of 1 year calculated from SII sensitivity markets
Risk nature
The company's investments in the funds in question are reported at fair value (mainly level 2 of the fair value hierarchy), on the basis of the NAV reported from time to time by the fund manager. These investments were made in connection with
Class I policies and, as such, any changes in fair value are passed on to the policyholder under the shadow accounting mechanism.
\u00a0
(\u20acm)
Asset class
Fair Value
Financial instruments
Corporate bonds
14,586
Government bonds
9,053
Other investments net of liabilities
3,527
Equity instruments
1,528
Cash
1,274
Derivative financial instruments
Swaps
(1)
Futures
2
Forwards
59
Total
30,028
\u00a0
(\u20acm)
Market traded on and UCITS
Fair Value
Germany (Frankfurt, Berlin, Munich)
4,331
Dublin
1
New York
2,019
Trace
3,818
London
2,380
Paris
342
Euronext
4,068
Tokyo
747
Singapore
770
Euromtf
472
Luxembourg
106
Eurotlx
334
Hong Kong
248
Others
9,591
Provisions
801
Total
30,028
SHARE-BASED PAYMENT ARRANGEMENTS
LONG-TERM INCENTIVE SCHEME: PERFORMANCE SHARE PLAN
Poste Italiane Group
The Shareholders' Meeting of Poste Italiane SpA held on 28 May 2019 approved the information circular for the \"Equity-based incentive plans \u2013 Performance Share LTIP\", prepared in accordance with art 84-bis of Regulations for Issuers with reference to the first Cycle 2019-2021 and the second cycle 2020-2022.
The Shareholders' Meeting of Poste Italiane SpA held on 28 May 2021 approved the information circular for the \"Equity-based incentive plans \u2013 2021-2023 Performance Share LTIP\", prepared in accordance with art 84-bis of Regulations for Issuers with reference to the performance period 2021-2023.
The Shareholders' Meeting of Poste Italiane SpA held on 27 May 2022 approved the information circular for the \"Equity-based incentive plans \u2013 2022-2024 Performance Share LTIP\", prepared in accordance with art 84-bis of Regulations for Issuers with reference to the performance period 2022-2024.
The Shareholders' Meeting of Poste Italiane SpA held on 8 May 2023 approved the information circular for the \"Equity-based incentive plans \u2013 2023-2025 Performance Share LTIP\", prepared in accordance with art 84-bis of Regulations for Issuers with reference to the performance period 2023-2025.
These incentive systems, constructed in line with market practices, aim to strengthen the link between the variable component of remuneration and the Group's medium to long-term strategy, in line with the budget and the goals in the Strategic Plan, over a multi-year period.
Description of the Plans
The \"Performance Share LTIPs\", as described in the relevant Information Circulars, provide for the assignment of Rights to the Poste Italiane's ordinary shares. The number of Rights to be granted to Beneficiaries is subject to the achievement of Performance Targets over a three-year period, following confirmation of achievement of the Hurdle and the Qualifying Conditions (the latter for BancoPosta Beneficiaries, hereinafter \"BP Beneficiaries\" including then General Manager). Plans are developed over a three-year time horizon and Actions are awarded if performance targets are achieved. The key characteristics of the Plans are described below.
Beneficiaries
The Beneficiaries are: Poste Italiane's Chief Executive Officer, in his role as General Manager, certain managers within the Poste Italiane Group, including key management personnel, and some resources of BancoPosta RFC.
Plans' terms and conditions
The Performance Targets, common to all Beneficiaries, to which the vesting of the Rights and, therefore, the allocation of the Shares is conditioned, are highlighted below:
\u2022a profitability indicator identified in the Group's three-year cumulative EBIT used to recognise the continuity and sustainability of profitability results over the long term;
\u2022an indicator of shareholder value creation, based on the relative Total Shareholder Return, used to measure performance based on the value created for Poste Italiane's shareholders compared with the FTSE MIB index318F319For the 2021-2023, 2022-2024 and 2023-2025 Performance Share LTIPs, the following KPIs are added to the two targets indicated above for the ESG component:
\u20222021-2023 Performance Share LTIP: sustainable finance, target linked to the inclusion of an ESG component in Poste Vita investment products by 2023. In particular, the indicator is calculated by comparing the number of products offered with ESG components to the total number of products offered;
\u20222022-2024 Performance Share LTIP: equal gender representation in succession plans, an objective linked to strengthening the presence of women in managerial succession plans, to help increase the presence of women in positions of greater responsibility in the Poste Italiane Group. Specifically, the indicator is calculated by comparing the number of succession applications occupied by women to the total number of applications;
\u20222023-2025 Performance Share LTIP: Green Transition, a target related to the reduction of tCO2 emissions; this target is intended to measure the reduction of the Group's total emissions (tCO2e) over the 2023-2025 time horizon. Creating value for the country, an objective that takes into account the progress of the construction sites related to the \"Polis Project\". In particular, the indicator is calculated as the ratio of the number of initiatives launched to the total number of physically feasible initiatives.
Vesting of the Rights and the therefore the awarding of the Shares is subject to achievement of the Performance Hurdle, designed to ensure sustainability of the Plan at Group level. The Performance Hurdle corresponds with achievement of a certain target for the Group's cumulative EBIT over a three-year period at the end of each Performance Period. In addition, in the case of the General Manager (and Chief Executive Officer) and BancoPosta RFC's Beneficiaries, vesting of the Phantom Stocks is also subject to achievement of Qualifying Conditions, designed to ensure the stability of BancoPosta RFC's capital and liquidity position, as follows:
\u2022Indicator of capital adequacy, (CET 1) at the end of the period;
\u2022Indicator of short-term liquidity, (LCR) at the end of the period;
\u2022RORAC risk-adjusted earnings at the end of the period.
The Shares relating to the 2019-2021 and 2020-2022 Performance Share LTIPs will be awarded by the end of the year following the end of the Performance Period as follows:
\u2022for BP Beneficiaries (including the General Manager) for 40% up-front and for the remaining 60% in two equal portions, deferred respectively for 2 and 4 years from the end of the Performance Period. A further Retention Period of one year will be applied to both the up-front and deferred portions;
\u2022for the Other Beneficiaries, the granting of Poste Italiane's Shares is entirely up front at the end of a three-year Performance Period, with 60% of the Shares subject to a further two-year Lock-up Period.
For BP Beneficiaries (including the General Manager) in relation to the 2021-2023, 2022-2024 and 2023-2025 Performance Share LTIPs, the following disbursement method is envisaged: 40% upfront and 60% in five deferred annual instalments over a five-year period (the first three equal to 10% of the total rights accrued and the next two equal to 15% of the total rights accrued). A further Retention Period of one year will be applied to both the up-front and deferred portions;
In addition, for BP Beneficiaries (including the General Manager), the deferred Shares will be awarded following the verification of the existence of capital adequacy, short-term liquidity levels and risk-adjusted profitability of BancoPosta RFC.
For more details on the operating mechanisms of the incentive plans, please refer to the Information Circular and/or the Report on the Remuneration Policy, in force from time to time, approved by the Shareholders' Meeting.
LONG-TERM INCENTIVE SCHEME: DELIVER 2022 LTIP
In 2023, in light of the regulatory updates that have taken place and with a view to maintaining constant alignment between the interests of management and those of the shareholders, the Shareholders' Meeting held on 8 May 2023 resolved to
pay a portion equal to 55% of the bonus accrued for Deliver LTIP MRTs BP Beneficiaries at the end of the Performance Period (31 December 2022) in Rights to receive ordinary shares of Poste Italiane, subject to Retention Periods.
Since this is a Conversion, no new allocations are envisaged with respect to the objectives of the plan assigned in 2018 and based on a five-year time horizon (2018-2022).
Vesting of the Rights and the therefore the awarding of the Shares is subject to achievement of the Performance Hurdle, designed to ensure sustainability of the Plan at Group level. The Performance Hurdle is represented by achievement of a certain target for the Group's cumulative EBIT over a five-year period at the end of the Performance Period (31 December 2022). In addition, delivery of the Shares is also subject to achievement of Qualifying Conditions, designed to ensure the stability of BancoPosta RFC's capital and liquidity position, as follows:
\u2022Indicator of capital adequacy, (CET 1) at the end of the period;
\u2022Indicator of short-term liquidity, (LCR) at the end of the period;
\u2022RORAC risk-adjusted earnings at the end of the period.
The Conversion made provision for the payment of 45% of the up-front accrued Premium in cash in 2023, as opposed to the 75% originally envisaged. The remaining 55%, originally planned in cash form, will be paid in Rights to receive Shares subject to Retention Periods of 1 and 2 years.
Delivery of the Shares at the end of each Retention Period will take place subject to verification of the risk tolerance level of conditions linked - in addition to capital adequacy and liquidity, originally envisaged - also to risk-adjusted profitability with reference to BancoPosta RFC, as well as Poste Italiane's inclusion in at least two internationally recognised sustainability indices.
For more details on the operating mechanisms of the incentive plans, please refer to the Information Circular and/or the Report on the Remuneration Policy, in force from time to time, approved by the Shareholders' Meeting.
Determination of fair value and effects on profit or loss
The valuations of these plans were mainly based on the conclusions reached by actuaries outside the Group. The unit fair value of each Right at the valuation date is equal to its nominal value at the grant date (determined on the basis of stock market prices), discounted by the expected dividend rate and the risk-free interest rate and updated taking into account the best estimate of service conditions and performance (non-market based performance conditions).
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20acm)
\u00a0
Number of beneficiaries
Units (No. of Phantom Stocks / Rights to receive shares)
Fair value at grant date
\u00a0
Operating Cost
IFRS 2 Reserve / Liabilities
Payments / Countervalue delivery of treasury shares
Incentive plans
Number of Units
Of which under retention period
General Manager
BP Beneficiaries
Other Beneficiaries
\u00a0
\u00a0
\u00a0
Grant date
Fair Value
Grant date
Fair Value
Grant date
Fair Value
\u00a0
Deliver 3 years
15
8,763
8,763
n.a.
n.a.
29 May 2018
\u20ac10.21
29 May 2018
\u20ac10.21
\u00a0
0.02
0.09
-
Deliver 5 years
2
156,068
-
29 May 2018
\u20ac8.43
n/a
n/a
29 May 2018
\u20ac8.43
\u00a0
1.32
1.32
-
19-21 Performance Share LTIP
111
471,860
-
28 May 2019
\u20ac5.02
7 October 2019
\u20ac7.01
7 October 2019
\u20ac7.88
\u00a0
0.08
3.61
(0.3)
20-22 Performance Share LTIP
118
469,025
34,824
5 May 2020
\u20ac6.05
12 November 2020
\u20ac4.89
12 November 2020
\u20ac5.41
\u00a0
(0.95)
2.52
(1.8)
21-23 Performance Share LTIP
163
1,228,540
-
28 May 2021
\u20ac8.19
28 May 2021
\u20ac8.27
28 May 2021
\u20ac9.07
\u00a0
3.80
10.97
-
22-24 Performance Share LTIP
203
1,070,012
-
27 May 2022
\u20ac4.69
27 May 2022
\u20ac4.65
27 May 2022
\u20ac5.66
\u00a0
2.02
3.94
-
23-25 Performance Share LTIP
218
1,670,289
-
8 May 2023
\u20ac4.46
8 May 2023
\u20ac4.47
8 May 2023
\u20ac5.62
\u00a0
3.04
3.04
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
9.3
25.5
(2.1)
Poste Italiane SpA
The effects on profit or loss of the above \"Performance Share\" and \"Phantom Stock\" Long-Term Incentive Schemes at 31 December 2023 for Poste Italiane SpA are shown below.
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20acm)
\u00a0
Number of beneficiaries
Units (No. of Phantom Stocks / Rights to receive shares)
Fair value at grant date
\u00a0
Operating Cost
IFRS 2 Reserve / Liabilities
Payments / Countervalue delivery of treasury shares
Incentive plans
Number of Units
Of which under retention period
General Manager
BP Beneficiaries
Other Beneficiaries
\u00a0
\u00a0
\u00a0
\u00a0
Grant date
Fair Value
Grant date
Fair Value
Grant date
Fair Value
\u00a0
Deliver 3 years
15
8,763
8,763
n.a.
n.a.
29 May 2018
\u20ac10.21
29 May 2018
\u20ac10.21
\u00a0
0.02
0.09
-
Deliver 5 years
2
156,068
-
29 May 2018
\u20ac8.43
n/a
n/a
29 May 2018
\u20ac8.43
\u00a0
1.32
1.32
-
19-21 Performance Share LTIP
105
454,391
-
28 May 2019
\u20ac5.02
7 October 2019
\u20ac7.01
7 October 2019
\u20ac7.88
\u00a0
0.08
3.51
(0.33)
20-22 Performance Share LTIP
109
447,845
34,824
5 May 2020
\u20ac6.05
12 November 2020
\u20ac4.89
12 November 2020
\u20ac5.41
\u00a0
(0.90)
2.46
(1.73)
21-23 Performance Share LTIP
151
1,169,847
-
28 May 2021
\u20ac8.19
28 May 2021
\u20ac8.27
28 May 2021
\u20ac9.07
\u00a0
3.62
10.44
-
22-24 Performance Share LTIP
186
998,529
-
27 May 2022
\u20ac4.69
27 May 2022
\u20ac4.65
27 May 2022
\u20ac5.66
\u00a0
1.89
3.67
-
23-25 Performance Share LTIP
200
1,605,134
-
8 May 2023
\u20ac4.46
8 May 2023
\u20ac4.47
8 May 2023
\u20ac5.62
\u00a0
2.92
2.92
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
8.9
24.4
(2.1)
LONG-TERM INCENTIVE SCHEMES: STOCK OPTIONS
The MLK delivery long-term incentive scheme, which was approved by the subsidiary's Board of Directors on 10 December 2020, provides for the grant, free of charge, of a maximum number of stock options that entitle holders to subscribe for class Z shares of MLK delivery, i.e., shares issued to service the Plan without dividend and voting rights. The Plan has a total term of five years and will end with the grant of all Stock Options. On 9 July 2023, a liquidation event provided for in the \"MLK ESOP 2020 Regulations\" and the \"MLK Shareholders' Agreement\" occurred, resulting in the termination of the MLK Deliveries long-term incentive scheme approved by the Board of Directors on 10 December 2020. At the expiry of the validity of the Plan (total duration of three years), Poste Italiane S.p.A. exercised its call options on the remaining 30% of MLK's share capital and, by drag-along, on the portion related to the new shares issued in connection with the Plan. The event described resulted in the exercise of 2,001 shares at a strike price of \u20ac64.29 and a share value at the time the option was exercised of \u20ac195.81 per share.
At 31 December 2023, there were no additional stock option incentive plans in place for MLK Deliveries Srl
SHORT-TERM INCENTIVE SCHEMES: MBO
On 27 May 2014, the Bank of Italy issued specific Supervisory Provisions for BancoPosta (Part IV, Chapter I, \"BancoPosta\" including in Circular 285 of 17 December 2013 \"Prudential supervisory standards for banks\") which, in taking into account BancoPosta's and Poste Italiane's specific organisational and operational aspects, has extended application of theprudential standards for banks to include BancoPosta. This includes the standards relating to remuneration and incentive policies (Part I, Title IV, Chapter 2 \"Remuneration and incentive policies and practices\" in the above Circular 285). These standards, applicable only to the Parent Company Poste Italiane SpA, provide that a part of the bonuses paid to BancoPosta RFC's Risk Takers may be awarded in the form of financial instruments over a multi-year timeframe.
With regard to the management incentive schemes adopted for BancoPosta RFC MBO for 2018, where the incentive was above a certain materiality threshold, the MBO management incentive scheme envisages the award of 50% of the incentive in the form of phantom stocks, representing the value of Poste Italiane's shares, and application of the following deferral mechanisms:
\u202260% of the award to be deferred for a 5-year period on a pro-rata basis, in the case of Material Risk Takers who are beneficiaries of both the short-term incentive scheme and long-term incentive scheme, \"Phantom Stock LTIP\";
\u202240% of the award to be deferred for a 3-year period on a pro-rata basis for the remaining Material Risk Takers.
The most recent short-term management incentive schemes (MBO 2019, MBO 2020, MBO 2021, MBO 2022 and MBO 2023), provide, where the incentive exceeds a materiality threshold, for the payment of a portion of the bonus accrued in the form of Poste Italiane SpA's Shares and the application of deferral mechanisms:
\u202260% of the incentive over 5 years pro-rata, for the General Manager and the head of the BancoPosta function;
\u202240% over 5 years pro-rata for the Senior Management Beneficiaries;
\u202240% over 3 years pro-rata319F320 for the Other Beneficiaries.
The allocation of Phantom Stocks (MBO 2018) and Rights to receive Shares (MBO 2019, 2020, 2021, 2022 and 2023) is subject to the existence of a Performance Hurdle (Group Profitability: EBIT) and Qualifying Conditions as follows:
\u2022Capital adequacy: CET 1, risk tolerance level approved in the Risk Appetite Framework (RAF);
\u2022Short-term liquidity: LCR, risk tolerance level approved in the Risk Appetite Framework (RAF).
\u2022Risk-adjusted earnings (RORAC) threshold level approved in the Risk Appetite Framework (RAF) for MBO 2023 only.
The General Manager is also expected to apply an additional Qualifying Condition, in addition to those set out above, linked to the Solvency Ratio of the Poste Vita Insurance Group.
Shares allocated in the form of Phantom Stock or Shares are subject to a Retention Period for both up-front and deferred shares.
Payment of the deferred portion will take place each year, provided that BancoPosta RFC's minimum regulatory capital, liquidity and risk-adjusted earnings requirements have been met (solely for MBO 2023). The effects on profit or loss and on equity are recognised in the period in which the instruments vest.
Determination of fair value and effects on profit or loss
The valuations of these plans were mainly based on the conclusions reached by actuaries outside the Group.
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20acm)
\u00a0
Number of beneficiaries
Units (No. of Phantom Stocks / Rights to receive shares)
Fair value at grant date
\u00a0
Operating Cost
IFRS 2 Reserve / Liabilities
Payments / Countervalue delivery of treasury shares
Incentive plans
Number of Units
Of which under retention period
General Manager
BP Beneficiaries
Other Beneficiaries
\u00a0
\u00a0
\u00a0
\u00a0
Grant date
Fair Value
Grant date
Fair Value
Grant date
Fair Value
\u00a0
MBO 2018
10
15,081
-
19 March 2019
\u20ac10.2
19 March 2019
\u20ac10.2
19 March 2019
\u20ac10.2
\u00a0
0.03
0.1
(0.2)
MBO 2019
5
8,594
5,519
5 March 2020
\u20ac7.5
5 March 2020
\u20ac7.51 - \u20ac7.62
5 March 2020
\u20ac7.51
\u00a0
0.01
0.1
(0.1)
MBO 2020
11
9,159
4,230
24 March 2021
\u20ac8.4
24 March 2021
\u20ac8.36 - \u20ac8.83
24 March 2021
\u20ac8.36 - \u20ac8.83
\u00a0
(0.01)
0.1
(0.04)
MBO 2021
15
51,151
17,467
22 March 2022
\u20ac8.3
22 March 2022
\u20ac8.25 - \u20ac8.77
22 March 2022
\u20ac8.25 - \u20ac8.77
\u00a0
0.01
0.4
(0.4)
MBO 2022
13
103,934
46,620
28 March 2023
\u20ac7.7
28 March 2023
\u20ac7.7 - \u20ac8.31
28 March 2023
\u20ac7.7 - \u20ac8.31
\u00a0
0.21
0.8
-
MBO 2023320F321
12
109,392
-
19 March 2023
\u20ac7.8
19 March 2023
\u20ac7.79 - \u20ac8.21
19 March 2023
\u20ac7.79 - \u20ac8.21
\u00a0
0.87
0.9
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
1.1
2.4
(0.7)
SEVERANCE PAYMENTS ON TERMINATION OF EMPLOYMENT
Severance payments to BancoPosta RFC Risk Takers on early termination are paid in accordance with the same procedures applied to short-term variable remuneration (MBO 2017) as regards deferral, payment in financial instruments and verification of the minimum regulatory capital and liquidity requirements for BancoPosta RFC. During the course of 2023, the payment of the last tranche of this plan was completed with a total disbursement of approximately \u20ac70,000.
SCOPE OF CONSOLIDATION AND HIGHLIGHTS OF INVESTMENTS
Scope of consolidation
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20ack)
Name
Registered office
Currency
Sharecapital
Parent Company
% ownership
Total % Group
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
PARENT COMPANY:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Poste Italiane SpA
Rome (Italy)
Euro
1,306,110
\u00a0
\u00a0
\u00a0
SUBSIDIARIES CONSOLIDATED ON A LINE-BY-LINE BASIS:
\u00a0
\u00a0
Agile LAB Srl (*)
Milan (Italy)
Euro
54
Poste Italiane SpA
70.00%
70.00%
BancoPosta Fondi SpA SGR
Rome (Italy)
Euro
12,000
Poste Italiane SpA
100.00%
100.00%
Bridge Technologies Srl (*)
Milan (Italy)
Euro
20
Plurima
100.00%
70.00%
Consorzio Logistica Pacchi ScpA
Rome (Italy)
Euro
516
Poste Italiane SpASDA Express Courier SpAPoste Air Cargo SrlPostel SpAPoste Assicura SpA Nexive Network Srl
51.00%19.00%5.00%15.00%5.00% 5.00%
100.00%
ConsorzioServizi ScpA
Rome (Italy)
Euro
120
Poste Italiane SpAPostePay SpA
51.00%49.00%
100.00%
Consorzio PosteMotori
Rome (Italy)
Euro
120
Poste Italiane SpAPostel SpA
58.12%22.63%
80.75%
Europa Gestioni Immobiliari SpA
Rome (Italy)
Euro
103,200
Poste Italiane SpAPoste Vita SpA
55.00%45.00%
100.00%
LIS Holding SpA
Milan (Italy)
Euro
2,582
PostePay SpA
100.00%
100.00%
LIS Pay SpA
Milan (Italy)
Euro
56,600
PostePay SpA
100.00%
100.00%
Logos Srl (*)
Milan (Italy)
Euro
10
Plurima
100.00%
70.00%
MLK Deliveries SpA
Rome (Italy)
Euro
335
Poste Italiane SpA
100.00%
100.00%
Net Holding SpA (*)
Rome (Italy)
Euro
100
Poste Vita SpA
60.00%
60.00%
Net Insurance SpA (*)
Rome (Italy)
Euro
17,624
Net Holding SpA
97.84%
58.70%
Net Insurance Life SpA (*)
Rome (Italy)
Euro
15,000
Net Insurance SpA
100.00%
58.70%
Nexive Network Srl
Milan (Italy)
Euro
50
Poste Italiane SpA
100.00%
100.00%
Nexive Scarl
Milan (Italy)
Euro
28
Poste Italiane SpA
85.89%
85.89%
PatentiViaPoste ScpA
Rome (Italy)
Euro
120
Poste Italiane SpAPostel SpA
69.65%17.21%
86.86%
Poste Air Cargo Srl
Rome (Italy)
Euro
1,000
Poste Italiane SpA
100.00%
100.00%
Plurima SpA (*)
Milan (Italy)
Euro
8,544
Poste Welfare Servizi Srl
70.00%
70.00%
Poste Assicura SpA (*)
Rome (Italy)
Euro
25,000
Poste Vita SpA
100.00%
100.00%
Poste Insurance Broker Srl
Rome (Italy)
Euro
600
Poste Assicura SpA
100.00%
100.00%
PostePay SpA
Rome (Italy)
Euro
7,561
Poste Italiane SpA
100.00%
100.00%
Poste Vita SpA (*)
Rome (Italy)
Euro
1,216,608
Poste Italiane SpA
100.00%
100.00%
Poste Welfare Servizi Srl
Rome (Italy)
Euro
16
Poste Italiane SpA
100.00%
100.00%
Postel SpA
Rome (Italy)
Euro
20,400
Poste Italiane SpA
100.00%
100.00%
SDA Express Courier SpA
Rome (Italy)
Euro
5,000
Poste Italiane SpA
100.00%
100.00%
Sengi Express Limited (**)
Hong Kong (China)
Euro
541
Poste Italiane SpA
40.00% (***)
40.00% (***)
Sengi Express Guangzhou Limited (**)
Guangzhou (China)
CNY
5,000
Sengi Express Limited
100.00%
40.00%
Sourcesense SpA (*)
Rome (Italy)
Euro
880
Poste Italiane SpA
70.00%
70.00%
Sourcesense Digital Srl (*)
Rome (Italy)
Euro
32
Sourcesense SpA
100.00%
70.00%
Sourcesense Technology Srl (*)
Rome (Italy)
Euro
40
Sourcesense SpA
100.00%
70.00%
Sourcesense Limited (**)
London (UK)
GBP
-
Sourcesense SpA
100.00%
70.00%
Sourcesense Platforms S.r.l.
Rome (Italy)
Euro
50
Sourcesense SpA
100.00%
70.00%
COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD:
\u00a0
Subsidiaries:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Address Software Srl
Rome (Italy)
Euro
10
Postel SpA
100.00%
100.00%
Indabox Srl
Rome (Italy)
Euro
50
MLK Deliveries SpA
100.00%
100.00%
Kipoint SpA
Rome (Italy)
Euro
500
SDA Express Courier SpA
100.00%
100.00%
Associates:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Anima Holding SpA
Milan (Italy)
Euro
7,292
Poste Italiane SpA
11.60%
11.60%
Conio Inc.
San Francisco (USA)
USD
13,356
Poste Italiane SpA
16.29%
16.29%
Conio Srl
Milan (Italy)
Euro
115
Conio Inc.
100.00%
16.29%
Eurizon Capital Real Asset SGR S.p.A.
Milan (Italy)
Euro
4,167
Poste Vita SpABancoPosta Fondi SpA SGR
20.00%20.00%
40% (****)
Financit SpA
Rome (Italy)
Euro
14,950
Poste Italiane SpA
40.00%
40.00%
ItaliaCamp Srl
Rome (Italy)
Euro
155
Poste Italiane SpA
19.40%
19.40%
Replica SIM SpA
Milan (Italy)
Euro
10,500
Poste Italiane SpA
45.00%
45.00%
sennder Italia Srl
Milan (Italy)
Euro
50
Poste Italiane SpA
25.00%
25.00%
(*) The figures shown for these companies were prepared in accordance with IFRS and, as such, may vary from those contained in the respective financial reports, which were prepared in accordance with the Italian Civil Code and Italian GAAP.
(**) The figures shown for these companies were prepared in accordance with IFRS and, as such, may vary from those contained in the Annual Report of the company drafted in compliance with Local GAAP.
(***) Poste Italiane SpA holds 51% of the voting capital.
(****) Posta Vita and BancoPosta Fondi jointly hold 24.5% of the voting capital.
List of investments accounted for using the equity method and statement of financial position and profit or loss data
\u00a0
(\u20ack)
Name (Registered office)
Nature of investment
Carrying amount
%share
Assets
Liabilities
Equity
Revenue from sales and services
\u00a0
Net profit / (loss) for the year
\u00a0
Address Software Srl (Rome)
Subsidiary
1,109
100.00%
1,701
591
1,110
855
105
Anima Holding SpA (Milan) (a)
Associate
218,734
11.60%
2,328,675
935,022
1,393,653
733,975
(*)
96,390
Conio Inc. (San Francisco) (b)
Associate
555
16.29%
13,353
3,506
9,847
-
(327)
Eurizon Capital Real Asset SGR S.p.A.
Associate
4,220
40.00%
16,286
8,683
7,603
7,552
(*)
443
Financit SpA (Rome)
Associate
34,712
40.00%
1,860,597
1,792,283
68,314
70,773
(*)
15,554
Indabox Srl (Rome)
Subsidiary
508
100.00%
665
240
425
668
89
ItaliaCamp Srl (Roma) (c)
Associate
562
19.40%
6,538
3,645
2,893
3,891
173
Kipoint SpA (Rome)
Subsidiary
2,511
100.00%
6,645
4,134
2,511
8,124
505
Replica SIM SpA (Milan)
Associate
9,329
45.00%
43,786
34,366
9,420
6,852
(*)
235
sennder Italia Srl (Milan) (d)
Associate
293,987
25.00%
83,082
71,755
11,327
245,639
6,208
Other SDA Express Courier associate
Associates
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
a.Data derived from the latest consolidated interim accounts for the period ended 30.09.2023 approved by the company's board of directors.
b.Data from the company's latest balance sheet as at 30.06.2023, the balance sheet value also includes the valuation of the company Conio S.r.l. wholly-owned by Conio Inc.
c.Figures taken from the company's latest financial statements approved by the Board at 31.12.2022.
d.The company was classified as an investment in associates following the completion of the transaction in June 2023; for further details on the transaction, please refer to the section Main changes to the scope of consolidation - Note 2.8 Basis of consolidation.
(*) The amount includes commissions, interest income and other similar income.
DISCLOSURE PURSUANT TO LAW 124/2017
The information required by art. 1, paragraphs 125 and 129 of Law 124 of 4 August 2017 is provided below.
The information is provided in thousands of euros and on a cash basis, indicating the Group company that received and/or disbursed the grant. In addition, given the numerous interpretative doubts, the following information is provided on the basis of the best interpretation of the legislation available to date, in the light of the guidance provided by Assonime in Circular 5 of 22 February 2019.
(\u20ack)
Group companies
Grantor/beneficiary
Purpose
Amount disbursed
Grants received
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Poste Italiane
MIM
Research and Development Projects
605
Poste Italiane
MIMS
Mobility Management and Home-Work Travel Plans
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0262
Net Insurance Spa
Ania Servizi e Formazione Srl
\u00a0Next to People Project
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0142
Net Insurance Spa
Ania Servizi e Formazione Srl
\u00a0More Next to People Project
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a090
Net Insurance Spa
Ania Servizi e Formazione Srl
\u00a0Grow Together Plan
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0167
Total
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,266
Grants disbursed
\u00a0
\u00a0
Poste Italiane
Fondazione Intercultura Onlus ETS
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0120
Poste Italiane
European University Institute
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0100
Poste Italiane
Comunit\u00e0 di San Patrignano
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a030
Poste Italiane
Fondazione Comunit\u00e0 Domenico Tardini Onlus
\u00a0Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a024
Poste Italiane
Fondazione Dynamo Camp Onlus
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a020
Poste Italiane
Weco - Social Enterprise
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a020
Poste Italiane
Aila Onlus Foundation
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a020
Poste Italiane
ISMEO Association
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015
Poste Italiane
Parent Project aps Association
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015
Poste Italiane
Fondazione Bambino Ges\u00f9 Onlus
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010
Poste Italiane
Associazione Andrea Tudisco Onlus
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010
Poste Italiane
Corri la Vita Onlus Association
\u00a0Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010
Poste Italiane
Fondazione Angeli del Bello
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010
Total
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0404
POSTAL SAVINGS
The following table provides a breakdown of postal savings deposits collected by the Parent Company in the name of and on behalf of Cassa Depositi e Prestiti, by category. The amounts are inclusive of accrued, unpaid interest.
Postal Savings
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
\u00a0
\u00a0
Post office savings books
90,844
90,850
\u00a0
Interest-bearing Postal Certificates
236,732
237,888
Cassa Depositi e Prestiti
194,321
192,644
Ministry of the Economy and Finance - MEF
42,411
45,244
\u00a0
\u00a0
Total
327,576
328,738
ASSETS UNDER MANAGEMENT
Assets under management by BancoPosta Fondi SpA SGR, measured at fair value using information available on the last working day of the year, amount to \u20ac15,641 million at 31 December 2023 (\u20ac11,927 million at 31 December 2022). Of the total amount, about \u20ac7,590 million (or about 49% of total assets under management) refer to funds whose investment policies include environmental, social and governance factors (ESG).
COMMITMENTS
The Group's purchase commitments break down as follows
Commitments
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
\u00a0
Lease arrangements
217
26
Contracts to purchase property, plant and equipment
124
89
Contracts to purchase intangible assets
20
12
Total
360
127
Poste Italiane SpA's purchase commitments break down as follows.
At 31 December 2023, the item Lease contracts includes commitments that do not fall under IFRS 16 - Leases.
In addition, at 31 December 2023, PostePay takes over:
\u2022purchases of electricity on forward markets for \u20ac170 million;
\u2022purchases of natural gas on futures markets for \u20ac120 million.
GUARANTEES
Unsecured guarantees issued by the Group and Poste Italiane SpA are as follows:
Guarantees
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
\u00a0
Sureties and other guarantees issued:
\u00a0
\u00a0
by banks/insurance companies in the interests of Group companies in favour of third parties
623
698
by the Group in its own interests in favour of third parties
299
61
\u00a0
Total
922
759
THIRD-PARTY ASSETS
In addition to what is detailed in the table below for the Parent Company, third-party assets of the Group include material for the Covid emergency within the scope of the order with the Civil Defence for about \u20ac1.3 billion, held in the warehouses of the subsidiary SDA Express Courier S.p.A.
Third-party assets
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
\u00a0
Bonds subscribed by customers held at third-party banks
6,033
3,431
Other assets
248
344
\u00a0
Total
6,281
3,775
In addition to the above, at 31 December 2023, Poste Italiane SpA holds a further \u20ac2 million in assets belonging to Group companies.
ASSETS IN THE PROCESS OF ALLOCATION
At 31 December 2023, the Parent Company has paid a total of \u20ac97 million in claims on behalf of the Ministry of Justice, for which, under the agreement between Poste Italiane SpA and the MEF, it has already been reimbursed by the Treasury, whilst awaiting acknowledgement of the relevant account receivable from the Ministry of Justice.
FEES PAID TO INDEPENDENT AUDITORS PURSUANT TO ART. 149 DUODECIES OF THE CONSOB'S REGULATIONS FOR ISSUERS
The following table shows fees321F322 payable to the Parent Company's auditor, Deloitte & Touche, and companies within its network for 2023, presented in accordance with art. 149 duodecies of the CONSOB's Regulations for Issuers:
Disclosure of fees paid to Independent Auditors
(\u20ack)
Type of services
Entity providing the service
2023 fees
Poste Italiane SpA
Audit
Deloitte & Touche S.p.A.
1,339
Audit
Deloitte & Touche network
-
Attestation services
Deloitte & Touche S.p.A.
589
Attestation services
Deloitte & Touche network
-
Other services
Deloitte & Touche S.p.A.
17
Other services
Deloitte & Touche network
45
Subsidiaries of Poste Italiane SpA
Audit (*)
Deloitte & Touche S.p.A.
2,275
Audit
Deloitte & Touche network
47
Attestation services
Deloitte & Touche S.p.A.
820
Attestation services
Deloitte & Touche network
-
Other services
Deloitte & Touche S.p.A.
-
Other services
Deloitte & Touche network
-
Total
\u00a0
5,132
(*) includes the costs of auditing the funds managed by BPF SGR charged to savers for a fee of \u20ac193 thousand.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAdditionalInformationExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page846-cflshid_389176-tag141642": { "value": "SHARE-BASED PAYMENT ARRANGEMENTS
LONG-TERM INCENTIVE SCHEME: PERFORMANCE SHARE PLAN
Poste Italiane Group
The Shareholders' Meeting of Poste Italiane SpA held on 28 May 2019 approved the information circular for the \"Equity-based incentive plans \u2013 Performance Share LTIP\", prepared in accordance with art 84-bis of Regulations for Issuers with reference to the first Cycle 2019-2021 and the second cycle 2020-2022.
The Shareholders' Meeting of Poste Italiane SpA held on 28 May 2021 approved the information circular for the \"Equity-based incentive plans \u2013 2021-2023 Performance Share LTIP\", prepared in accordance with art 84-bis of Regulations for Issuers with reference to the performance period 2021-2023.
The Shareholders' Meeting of Poste Italiane SpA held on 27 May 2022 approved the information circular for the \"Equity-based incentive plans \u2013 2022-2024 Performance Share LTIP\", prepared in accordance with art 84-bis of Regulations for Issuers with reference to the performance period 2022-2024.
The Shareholders' Meeting of Poste Italiane SpA held on 8 May 2023 approved the information circular for the \"Equity-based incentive plans \u2013 2023-2025 Performance Share LTIP\", prepared in accordance with art 84-bis of Regulations for Issuers with reference to the performance period 2023-2025.
These incentive systems, constructed in line with market practices, aim to strengthen the link between the variable component of remuneration and the Group's medium to long-term strategy, in line with the budget and the goals in the Strategic Plan, over a multi-year period.
Description of the Plans
The \"Performance Share LTIPs\", as described in the relevant Information Circulars, provide for the assignment of Rights to the Poste Italiane's ordinary shares. The number of Rights to be granted to Beneficiaries is subject to the achievement of Performance Targets over a three-year period, following confirmation of achievement of the Hurdle and the Qualifying Conditions (the latter for BancoPosta Beneficiaries, hereinafter \"BP Beneficiaries\" including then General Manager). Plans are developed over a three-year time horizon and Actions are awarded if performance targets are achieved. The key characteristics of the Plans are described below.
Beneficiaries
The Beneficiaries are: Poste Italiane's Chief Executive Officer, in his role as General Manager, certain managers within the Poste Italiane Group, including key management personnel, and some resources of BancoPosta RFC.
Plans' terms and conditions
The Performance Targets, common to all Beneficiaries, to which the vesting of the Rights and, therefore, the allocation of the Shares is conditioned, are highlighted below:
\u2022a profitability indicator identified in the Group's three-year cumulative EBIT used to recognise the continuity and sustainability of profitability results over the long term;
\u2022an indicator of shareholder value creation, based on the relative Total Shareholder Return, used to measure performance based on the value created for Poste Italiane's shareholders compared with the FTSE MIB index318F319.
For the 2021-2023, 2022-2024 and 2023-2025 Performance Share LTIPs, the following KPIs are added to the two targets indicated above for the ESG component:
\u20222021-2023 Performance Share LTIP: sustainable finance, target linked to the inclusion of an ESG component in Poste Vita investment products by 2023. In particular, the indicator is calculated by comparing the number of products offered with ESG components to the total number of products offered;
\u20222022-2024 Performance Share LTIP: equal gender representation in succession plans, an objective linked to strengthening the presence of women in managerial succession plans, to help increase the presence of women in positions of greater responsibility in the Poste Italiane Group. Specifically, the indicator is calculated by comparing the number of succession applications occupied by women to the total number of applications;
\u20222023-2025 Performance Share LTIP: Green Transition, a target related to the reduction of tCO2 emissions; this target is intended to measure the reduction of the Group's total emissions (tCO2e) over the 2023-2025 time horizon. Creating value for the country, an objective that takes into account the progress of the construction sites related to the \"Polis Project\". In particular, the indicator is calculated as the ratio of the number of initiatives launched to the total number of physically feasible initiatives.
Vesting of the Rights and the therefore the awarding of the Shares is subject to achievement of the Performance Hurdle, designed to ensure sustainability of the Plan at Group level. The Performance Hurdle corresponds with achievement of a certain target for the Group's cumulative EBIT over a three-year period at the end of each Performance Period. In addition, in the case of the General Manager (and Chief Executive Officer) and BancoPosta RFC's Beneficiaries, vesting of the Phantom Stocks is also subject to achievement of Qualifying Conditions, designed to ensure the stability of BancoPosta RFC's capital and liquidity position, as follows:
\u2022Indicator of capital adequacy, (CET 1) at the end of the period;
\u2022Indicator of short-term liquidity, (LCR) at the end of the period;
\u2022RORAC risk-adjusted earnings at the end of the period.
The Shares relating to the 2019-2021 and 2020-2022 Performance Share LTIPs will be awarded by the end of the year following the end of the Performance Period as follows:
\u2022for BP Beneficiaries (including the General Manager) for 40% up-front and for the remaining 60% in two equal portions, deferred respectively for 2 and 4 years from the end of the Performance Period. A further Retention Period of one year will be applied to both the up-front and deferred portions;
\u2022for the Other Beneficiaries, the granting of Poste Italiane's Shares is entirely up front at the end of a three-year Performance Period, with 60% of the Shares subject to a further two-year Lock-up Period.
For BP Beneficiaries (including the General Manager) in relation to the 2021-2023, 2022-2024 and 2023-2025 Performance Share LTIPs, the following disbursement method is envisaged: 40% upfront and 60% in five deferred annual instalments over a five-year period (the first three equal to 10% of the total rights accrued and the next two equal to 15% of the total rights accrued). A further Retention Period of one year will be applied to both the up-front and deferred portions;
In addition, for BP Beneficiaries (including the General Manager), the deferred Shares will be awarded following the verification of the existence of capital adequacy, short-term liquidity levels and risk-adjusted profitability of BancoPosta RFC.
For more details on the operating mechanisms of the incentive plans, please refer to the Information Circular and/or the Report on the Remuneration Policy, in force from time to time, approved by the Shareholders' Meeting.
LONG-TERM INCENTIVE SCHEME: DELIVER 2022 LTIP
In 2023, in light of the regulatory updates that have taken place and with a view to maintaining constant alignment between the interests of management and those of the shareholders, the Shareholders' Meeting held on 8 May 2023 resolved to
pay a portion equal to 55% of the bonus accrued for Deliver LTIP MRTs BP Beneficiaries at the end of the Performance Period (31 December 2022) in Rights to receive ordinary shares of Poste Italiane, subject to Retention Periods.
Since this is a Conversion, no new allocations are envisaged with respect to the objectives of the plan assigned in 2018 and based on a five-year time horizon (2018-2022).
Vesting of the Rights and the therefore the awarding of the Shares is subject to achievement of the Performance Hurdle, designed to ensure sustainability of the Plan at Group level. The Performance Hurdle is represented by achievement of a certain target for the Group's cumulative EBIT over a five-year period at the end of the Performance Period (31 December 2022). In addition, delivery of the Shares is also subject to achievement of Qualifying Conditions, designed to ensure the stability of BancoPosta RFC's capital and liquidity position, as follows:
\u2022Indicator of capital adequacy, (CET 1) at the end of the period;
\u2022Indicator of short-term liquidity, (LCR) at the end of the period;
\u2022RORAC risk-adjusted earnings at the end of the period.
The Conversion made provision for the payment of 45% of the up-front accrued Premium in cash in 2023, as opposed to the 75% originally envisaged. The remaining 55%, originally planned in cash form, will be paid in Rights to receive Shares subject to Retention Periods of 1 and 2 years.
Delivery of the Shares at the end of each Retention Period will take place subject to verification of the risk tolerance level of conditions linked - in addition to capital adequacy and liquidity, originally envisaged - also to risk-adjusted profitability with reference to BancoPosta RFC, as well as Poste Italiane's inclusion in at least two internationally recognised sustainability indices.
For more details on the operating mechanisms of the incentive plans, please refer to the Information Circular and/or the Report on the Remuneration Policy, in force from time to time, approved by the Shareholders' Meeting.
Determination of fair value and effects on profit or loss
The valuations of these plans were mainly based on the conclusions reached by actuaries outside the Group. The unit fair value of each Right at the valuation date is equal to its nominal value at the grant date (determined on the basis of stock market prices), discounted by the expected dividend rate and the risk-free interest rate and updated taking into account the best estimate of service conditions and performance (non-market based performance conditions).
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20acm)
\u00a0
Number of beneficiaries
Units (No. of Phantom Stocks / Rights to receive shares)
Fair value at grant date
\u00a0
Operating Cost
IFRS 2 Reserve / Liabilities
Payments / Countervalue delivery of treasury shares
Incentive plans
Number of Units
Of which under retention period
General Manager
BP Beneficiaries
Other Beneficiaries
\u00a0
\u00a0
\u00a0
Grant date
Fair Value
Grant date
Fair Value
Grant date
Fair Value
\u00a0
Deliver 3 years
15
8,763
8,763
n.a.
n.a.
29 May 2018
\u20ac10.21
29 May 2018
\u20ac10.21
\u00a0
0.02
0.09
-
Deliver 5 years
2
156,068
-
29 May 2018
\u20ac8.43
n/a
n/a
29 May 2018
\u20ac8.43
\u00a0
1.32
1.32
-
19-21 Performance Share LTIP
111
471,860
-
28 May 2019
\u20ac5.02
7 October 2019
\u20ac7.01
7 October 2019
\u20ac7.88
\u00a0
0.08
3.61
(0.3)
20-22 Performance Share LTIP
118
469,025
34,824
5 May 2020
\u20ac6.05
12 November 2020
\u20ac4.89
12 November 2020
\u20ac5.41
\u00a0
(0.95)
2.52
(1.8)
21-23 Performance Share LTIP
163
1,228,540
-
28 May 2021
\u20ac8.19
28 May 2021
\u20ac8.27
28 May 2021
\u20ac9.07
\u00a0
3.80
10.97
-
22-24 Performance Share LTIP
203
1,070,012
-
27 May 2022
\u20ac4.69
27 May 2022
\u20ac4.65
27 May 2022
\u20ac5.66
\u00a0
2.02
3.94
-
23-25 Performance Share LTIP
218
1,670,289
-
8 May 2023
\u20ac4.46
8 May 2023
\u20ac4.47
8 May 2023
\u20ac5.62
\u00a0
3.04
3.04
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
9.3
25.5
(2.1)
Poste Italiane SpA
The effects on profit or loss of the above \"Performance Share\" and \"Phantom Stock\" Long-Term Incentive Schemes at 31 December 2023 for Poste Italiane SpA are shown below.
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20acm)
\u00a0
Number of beneficiaries
Units (No. of Phantom Stocks / Rights to receive shares)
Fair value at grant date
\u00a0
Operating Cost
IFRS 2 Reserve / Liabilities
Payments / Countervalue delivery of treasury shares
Incentive plans
Number of Units
Of which under retention period
General Manager
BP Beneficiaries
Other Beneficiaries
\u00a0
\u00a0
\u00a0
\u00a0
Grant date
Fair Value
Grant date
Fair Value
Grant date
Fair Value
\u00a0
Deliver 3 years
15
8,763
8,763
n.a.
n.a.
29 May 2018
\u20ac10.21
29 May 2018
\u20ac10.21
\u00a0
0.02
0.09
-
Deliver 5 years
2
156,068
-
29 May 2018
\u20ac8.43
n/a
n/a
29 May 2018
\u20ac8.43
\u00a0
1.32
1.32
-
19-21 Performance Share LTIP
105
454,391
-
28 May 2019
\u20ac5.02
7 October 2019
\u20ac7.01
7 October 2019
\u20ac7.88
\u00a0
0.08
3.51
(0.33)
20-22 Performance Share LTIP
109
447,845
34,824
5 May 2020
\u20ac6.05
12 November 2020
\u20ac4.89
12 November 2020
\u20ac5.41
\u00a0
(0.90)
2.46
(1.73)
21-23 Performance Share LTIP
151
1,169,847
-
28 May 2021
\u20ac8.19
28 May 2021
\u20ac8.27
28 May 2021
\u20ac9.07
\u00a0
3.62
10.44
-
22-24 Performance Share LTIP
186
998,529
-
27 May 2022
\u20ac4.69
27 May 2022
\u20ac4.65
27 May 2022
\u20ac5.66
\u00a0
1.89
3.67
-
23-25 Performance Share LTIP
200
1,605,134
-
8 May 2023
\u20ac4.46
8 May 2023
\u20ac4.47
8 May 2023
\u20ac5.62
\u00a0
2.92
2.92
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
8.9
24.4
(2.1)
LONG-TERM INCENTIVE SCHEMES: STOCK OPTIONS
The MLK delivery long-term incentive scheme, which was approved by the subsidiary's Board of Directors on 10 December 2020, provides for the grant, free of charge, of a maximum number of stock options that entitle holders to subscribe for class Z shares of MLK delivery, i.e., shares issued to service the Plan without dividend and voting rights. The Plan has a total term of five years and will end with the grant of all Stock Options. On 9 July 2023, a liquidation event provided for in the \"MLK ESOP 2020 Regulations\" and the \"MLK Shareholders' Agreement\" occurred, resulting in the termination of the MLK Deliveries long-term incentive scheme approved by the Board of Directors on 10 December 2020. At the expiry of the validity of the Plan (total duration of three years), Poste Italiane S.p.A. exercised its call options on the remaining 30% of MLK's share capital and, by drag-along, on the portion related to the new shares issued in connection with the Plan. The event described resulted in the exercise of 2,001 shares at a strike price of \u20ac64.29 and a share value at the time the option was exercised of \u20ac195.81 per share.
At 31 December 2023, there were no additional stock option incentive plans in place for MLK Deliveries Srl
SHORT-TERM INCENTIVE SCHEMES: MBO
On 27 May 2014, the Bank of Italy issued specific Supervisory Provisions for BancoPosta (Part IV, Chapter I, \"BancoPosta\" including in Circular 285 of 17 December 2013 \"Prudential supervisory standards for banks\") which, in taking into account BancoPosta's and Poste Italiane's specific organisational and operational aspects, has extended application of theprudential standards for banks to include BancoPosta. This includes the standards relating to remuneration and incentive policies (Part I, Title IV, Chapter 2 \"Remuneration and incentive policies and practices\" in the above Circular 285). These standards, applicable only to the Parent Company Poste Italiane SpA, provide that a part of the bonuses paid to BancoPosta RFC's Risk Takers may be awarded in the form of financial instruments over a multi-year timeframe.
With regard to the management incentive schemes adopted for BancoPosta RFC MBO for 2018, where the incentive was above a certain materiality threshold, the MBO management incentive scheme envisages the award of 50% of the incentive in the form of phantom stocks, representing the value of Poste Italiane's shares, and application of the following deferral mechanisms:
\u202260% of the award to be deferred for a 5-year period on a pro-rata basis, in the case of Material Risk Takers who are beneficiaries of both the short-term incentive scheme and long-term incentive scheme, \"Phantom Stock LTIP\";
\u202240% of the award to be deferred for a 3-year period on a pro-rata basis for the remaining Material Risk Takers.
The most recent short-term management incentive schemes (MBO 2019, MBO 2020, MBO 2021, MBO 2022 and MBO 2023), provide, where the incentive exceeds a materiality threshold, for the payment of a portion of the bonus accrued in the form of Poste Italiane SpA's Shares and the application of deferral mechanisms:
\u202260% of the incentive over 5 years pro-rata, for the General Manager and the head of the BancoPosta function;
\u202240% over 5 years pro-rata for the Senior Management Beneficiaries;
\u202240% over 3 years pro-rata319F320 for the Other Beneficiaries.
The allocation of Phantom Stocks (MBO 2018) and Rights to receive Shares (MBO 2019, 2020, 2021, 2022 and 2023) is subject to the existence of a Performance Hurdle (Group Profitability: EBIT) and Qualifying Conditions as follows:
\u2022Capital adequacy: CET 1, risk tolerance level approved in the Risk Appetite Framework (RAF);
\u2022Short-term liquidity: LCR, risk tolerance level approved in the Risk Appetite Framework (RAF).
\u2022Risk-adjusted earnings (RORAC) threshold level approved in the Risk Appetite Framework (RAF) for MBO 2023 only.
The General Manager is also expected to apply an additional Qualifying Condition, in addition to those set out above, linked to the Solvency Ratio of the Poste Vita Insurance Group.
Shares allocated in the form of Phantom Stock or Shares are subject to a Retention Period for both up-front and deferred shares.
Payment of the deferred portion will take place each year, provided that BancoPosta RFC's minimum regulatory capital, liquidity and risk-adjusted earnings requirements have been met (solely for MBO 2023). The effects on profit or loss and on equity are recognised in the period in which the instruments vest.
Determination of fair value and effects on profit or loss
The valuations of these plans were mainly based on the conclusions reached by actuaries outside the Group.
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20acm)
\u00a0
Number of beneficiaries
Units (No. of Phantom Stocks / Rights to receive shares)
Fair value at grant date
\u00a0
Operating Cost
IFRS 2 Reserve / Liabilities
Payments / Countervalue delivery of treasury shares
Incentive plans
Number of Units
Of which under retention period
General Manager
BP Beneficiaries
Other Beneficiaries
\u00a0
\u00a0
\u00a0
\u00a0
Grant date
Fair Value
Grant date
Fair Value
Grant date
Fair Value
\u00a0
MBO 2018
10
15,081
-
19 March 2019
\u20ac10.2
19 March 2019
\u20ac10.2
19 March 2019
\u20ac10.2
\u00a0
0.03
0.1
(0.2)
MBO 2019
5
8,594
5,519
5 March 2020
\u20ac7.5
5 March 2020
\u20ac7.51 - \u20ac7.62
5 March 2020
\u20ac7.51
\u00a0
0.01
0.1
(0.1)
MBO 2020
11
9,159
4,230
24 March 2021
\u20ac8.4
24 March 2021
\u20ac8.36 - \u20ac8.83
24 March 2021
\u20ac8.36 - \u20ac8.83
\u00a0
(0.01)
0.1
(0.04)
MBO 2021
15
51,151
17,467
22 March 2022
\u20ac8.3
22 March 2022
\u20ac8.25 - \u20ac8.77
22 March 2022
\u20ac8.25 - \u20ac8.77
\u00a0
0.01
0.4
(0.4)
MBO 2022
13
103,934
46,620
28 March 2023
\u20ac7.7
28 March 2023
\u20ac7.7 - \u20ac8.31
28 March 2023
\u20ac7.7 - \u20ac8.31
\u00a0
0.21
0.8
-
MBO 2023320F321
12
109,392
-
19 March 2023
\u20ac7.8
19 March 2023
\u20ac7.79 - \u20ac8.21
19 March 2023
\u20ac7.79 - \u20ac8.21
\u00a0
0.87
0.9
-
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
1.1
2.4
(0.7)
SEVERANCE PAYMENTS ON TERMINATION OF EMPLOYMENT
Severance payments to BancoPosta RFC Risk Takers on early termination are paid in accordance with the same procedures applied to short-term variable remuneration (MBO 2017) as regards deferral, payment in financial instruments and verification of the minimum regulatory capital and liquidity requirements for BancoPosta RFC. During the course of 2023, the payment of the last tranche of this plan was completed with a total disbursement of approximately \u20ac70,000.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page852-cflshid_393016-tag141644": { "value": "
SCOPE OF CONSOLIDATION AND HIGHLIGHTS OF INVESTMENTS
Scope of consolidation
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20ack)
Name
Registered office
Currency
Sharecapital
Parent Company
% ownership
Total % Group
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
PARENT COMPANY:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Poste Italiane SpA
Rome (Italy)
Euro
1,306,110
\u00a0
\u00a0
\u00a0
SUBSIDIARIES CONSOLIDATED ON A LINE-BY-LINE BASIS:
\u00a0
\u00a0
Agile LAB Srl (*)
Milan (Italy)
Euro
54
Poste Italiane SpA
70.00%
70.00%
BancoPosta Fondi SpA SGR
Rome (Italy)
Euro
12,000
Poste Italiane SpA
100.00%
100.00%
Bridge Technologies Srl (*)
Milan (Italy)
Euro
20
Plurima
100.00%
70.00%
Consorzio Logistica Pacchi ScpA
Rome (Italy)
Euro
516
Poste Italiane SpASDA Express Courier SpAPoste Air Cargo SrlPostel SpAPoste Assicura SpA Nexive Network Srl
51.00%19.00%5.00%15.00%5.00% 5.00%
100.00%
ConsorzioServizi ScpA
Rome (Italy)
Euro
120
Poste Italiane SpAPostePay SpA
51.00%49.00%
100.00%
Consorzio PosteMotori
Rome (Italy)
Euro
120
Poste Italiane SpAPostel SpA
58.12%22.63%
80.75%
Europa Gestioni Immobiliari SpA
Rome (Italy)
Euro
103,200
Poste Italiane SpAPoste Vita SpA
55.00%45.00%
100.00%
LIS Holding SpA
Milan (Italy)
Euro
2,582
PostePay SpA
100.00%
100.00%
LIS Pay SpA
Milan (Italy)
Euro
56,600
PostePay SpA
100.00%
100.00%
Logos Srl (*)
Milan (Italy)
Euro
10
Plurima
100.00%
70.00%
MLK Deliveries SpA
Rome (Italy)
Euro
335
Poste Italiane SpA
100.00%
100.00%
Net Holding SpA (*)
Rome (Italy)
Euro
100
Poste Vita SpA
60.00%
60.00%
Net Insurance SpA (*)
Rome (Italy)
Euro
17,624
Net Holding SpA
97.84%
58.70%
Net Insurance Life SpA (*)
Rome (Italy)
Euro
15,000
Net Insurance SpA
100.00%
58.70%
Nexive Network Srl
Milan (Italy)
Euro
50
Poste Italiane SpA
100.00%
100.00%
Nexive Scarl
Milan (Italy)
Euro
28
Poste Italiane SpA
85.89%
85.89%
PatentiViaPoste ScpA
Rome (Italy)
Euro
120
Poste Italiane SpAPostel SpA
69.65%17.21%
86.86%
Poste Air Cargo Srl
Rome (Italy)
Euro
1,000
Poste Italiane SpA
100.00%
100.00%
Plurima SpA (*)
Milan (Italy)
Euro
8,544
Poste Welfare Servizi Srl
70.00%
70.00%
Poste Assicura SpA (*)
Rome (Italy)
Euro
25,000
Poste Vita SpA
100.00%
100.00%
Poste Insurance Broker Srl
Rome (Italy)
Euro
600
Poste Assicura SpA
100.00%
100.00%
PostePay SpA
Rome (Italy)
Euro
7,561
Poste Italiane SpA
100.00%
100.00%
Poste Vita SpA (*)
Rome (Italy)
Euro
1,216,608
Poste Italiane SpA
100.00%
100.00%
Poste Welfare Servizi Srl
Rome (Italy)
Euro
16
Poste Italiane SpA
100.00%
100.00%
Postel SpA
Rome (Italy)
Euro
20,400
Poste Italiane SpA
100.00%
100.00%
SDA Express Courier SpA
Rome (Italy)
Euro
5,000
Poste Italiane SpA
100.00%
100.00%
Sengi Express Limited (**)
Hong Kong (China)
Euro
541
Poste Italiane SpA
40.00% (***)
40.00% (***)
Sengi Express Guangzhou Limited (**)
Guangzhou (China)
CNY
5,000
Sengi Express Limited
100.00%
40.00%
Sourcesense SpA (*)
Rome (Italy)
Euro
880
Poste Italiane SpA
70.00%
70.00%
Sourcesense Digital Srl (*)
Rome (Italy)
Euro
32
Sourcesense SpA
100.00%
70.00%
Sourcesense Technology Srl (*)
Rome (Italy)
Euro
40
Sourcesense SpA
100.00%
70.00%
Sourcesense Limited (**)
London (UK)
GBP
-
Sourcesense SpA
100.00%
70.00%
Sourcesense Platforms S.r.l.
Rome (Italy)
Euro
50
Sourcesense SpA
100.00%
70.00%
COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD:
\u00a0
Subsidiaries:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Address Software Srl
Rome (Italy)
Euro
10
Postel SpA
100.00%
100.00%
Indabox Srl
Rome (Italy)
Euro
50
MLK Deliveries SpA
100.00%
100.00%
Kipoint SpA
Rome (Italy)
Euro
500
SDA Express Courier SpA
100.00%
100.00%
Associates:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Anima Holding SpA
Milan (Italy)
Euro
7,292
Poste Italiane SpA
11.60%
11.60%
Conio Inc.
San Francisco (USA)
USD
13,356
Poste Italiane SpA
16.29%
16.29%
Conio Srl
Milan (Italy)
Euro
115
Conio Inc.
100.00%
16.29%
Eurizon Capital Real Asset SGR S.p.A.
Milan (Italy)
Euro
4,167
Poste Vita SpABancoPosta Fondi SpA SGR
20.00%20.00%
40% (****)
Financit SpA
Rome (Italy)
Euro
14,950
Poste Italiane SpA
40.00%
40.00%
ItaliaCamp Srl
Rome (Italy)
Euro
155
Poste Italiane SpA
19.40%
19.40%
Replica SIM SpA
Milan (Italy)
Euro
10,500
Poste Italiane SpA
45.00%
45.00%
sennder Italia Srl
Milan (Italy)
Euro
50
Poste Italiane SpA
25.00%
25.00%
(*) The figures shown for these companies were prepared in accordance with IFRS and, as such, may vary from those contained in the respective financial reports, which were prepared in accordance with the Italian Civil Code and Italian GAAP.
(**) The figures shown for these companies were prepared in accordance with IFRS and, as such, may vary from those contained in the Annual Report of the company drafted in compliance with Local GAAP.
(***) Poste Italiane SpA holds 51% of the voting capital.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page852-cflshid_393016-tag141643": { "value": "
SCOPE OF CONSOLIDATION AND HIGHLIGHTS OF INVESTMENTS
Scope of consolidation
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
(\u20ack)
Name
Registered office
Currency
Sharecapital
Parent Company
% ownership
Total % Group
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
PARENT COMPANY:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Poste Italiane SpA
Rome (Italy)
Euro
1,306,110
\u00a0
\u00a0
\u00a0
SUBSIDIARIES CONSOLIDATED ON A LINE-BY-LINE BASIS:
\u00a0
\u00a0
Agile LAB Srl (*)
Milan (Italy)
Euro
54
Poste Italiane SpA
70.00%
70.00%
BancoPosta Fondi SpA SGR
Rome (Italy)
Euro
12,000
Poste Italiane SpA
100.00%
100.00%
Bridge Technologies Srl (*)
Milan (Italy)
Euro
20
Plurima
100.00%
70.00%
Consorzio Logistica Pacchi ScpA
Rome (Italy)
Euro
516
Poste Italiane SpASDA Express Courier SpAPoste Air Cargo SrlPostel SpAPoste Assicura SpA Nexive Network Srl
51.00%19.00%5.00%15.00%5.00% 5.00%
100.00%
ConsorzioServizi ScpA
Rome (Italy)
Euro
120
Poste Italiane SpAPostePay SpA
51.00%49.00%
100.00%
Consorzio PosteMotori
Rome (Italy)
Euro
120
Poste Italiane SpAPostel SpA
58.12%22.63%
80.75%
Europa Gestioni Immobiliari SpA
Rome (Italy)
Euro
103,200
Poste Italiane SpAPoste Vita SpA
55.00%45.00%
100.00%
LIS Holding SpA
Milan (Italy)
Euro
2,582
PostePay SpA
100.00%
100.00%
LIS Pay SpA
Milan (Italy)
Euro
56,600
PostePay SpA
100.00%
100.00%
Logos Srl (*)
Milan (Italy)
Euro
10
Plurima
100.00%
70.00%
MLK Deliveries SpA
Rome (Italy)
Euro
335
Poste Italiane SpA
100.00%
100.00%
Net Holding SpA (*)
Rome (Italy)
Euro
100
Poste Vita SpA
60.00%
60.00%
Net Insurance SpA (*)
Rome (Italy)
Euro
17,624
Net Holding SpA
97.84%
58.70%
Net Insurance Life SpA (*)
Rome (Italy)
Euro
15,000
Net Insurance SpA
100.00%
58.70%
Nexive Network Srl
Milan (Italy)
Euro
50
Poste Italiane SpA
100.00%
100.00%
Nexive Scarl
Milan (Italy)
Euro
28
Poste Italiane SpA
85.89%
85.89%
PatentiViaPoste ScpA
Rome (Italy)
Euro
120
Poste Italiane SpAPostel SpA
69.65%17.21%
86.86%
Poste Air Cargo Srl
Rome (Italy)
Euro
1,000
Poste Italiane SpA
100.00%
100.00%
Plurima SpA (*)
Milan (Italy)
Euro
8,544
Poste Welfare Servizi Srl
70.00%
70.00%
Poste Assicura SpA (*)
Rome (Italy)
Euro
25,000
Poste Vita SpA
100.00%
100.00%
Poste Insurance Broker Srl
Rome (Italy)
Euro
600
Poste Assicura SpA
100.00%
100.00%
PostePay SpA
Rome (Italy)
Euro
7,561
Poste Italiane SpA
100.00%
100.00%
Poste Vita SpA (*)
Rome (Italy)
Euro
1,216,608
Poste Italiane SpA
100.00%
100.00%
Poste Welfare Servizi Srl
Rome (Italy)
Euro
16
Poste Italiane SpA
100.00%
100.00%
Postel SpA
Rome (Italy)
Euro
20,400
Poste Italiane SpA
100.00%
100.00%
SDA Express Courier SpA
Rome (Italy)
Euro
5,000
Poste Italiane SpA
100.00%
100.00%
Sengi Express Limited (**)
Hong Kong (China)
Euro
541
Poste Italiane SpA
40.00% (***)
40.00% (***)
Sengi Express Guangzhou Limited (**)
Guangzhou (China)
CNY
5,000
Sengi Express Limited
100.00%
40.00%
Sourcesense SpA (*)
Rome (Italy)
Euro
880
Poste Italiane SpA
70.00%
70.00%
Sourcesense Digital Srl (*)
Rome (Italy)
Euro
32
Sourcesense SpA
100.00%
70.00%
Sourcesense Technology Srl (*)
Rome (Italy)
Euro
40
Sourcesense SpA
100.00%
70.00%
Sourcesense Limited (**)
London (UK)
GBP
-
Sourcesense SpA
100.00%
70.00%
Sourcesense Platforms S.r.l.
Rome (Italy)
Euro
50
Sourcesense SpA
100.00%
70.00%
COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD:
\u00a0
Subsidiaries:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Address Software Srl
Rome (Italy)
Euro
10
Postel SpA
100.00%
100.00%
Indabox Srl
Rome (Italy)
Euro
50
MLK Deliveries SpA
100.00%
100.00%
Kipoint SpA
Rome (Italy)
Euro
500
SDA Express Courier SpA
100.00%
100.00%
Associates:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Anima Holding SpA
Milan (Italy)
Euro
7,292
Poste Italiane SpA
11.60%
11.60%
Conio Inc.
San Francisco (USA)
USD
13,356
Poste Italiane SpA
16.29%
16.29%
Conio Srl
Milan (Italy)
Euro
115
Conio Inc.
100.00%
16.29%
Eurizon Capital Real Asset SGR S.p.A.
Milan (Italy)
Euro
4,167
Poste Vita SpABancoPosta Fondi SpA SGR
20.00%20.00%
40% (****)
Financit SpA
Rome (Italy)
Euro
14,950
Poste Italiane SpA
40.00%
40.00%
ItaliaCamp Srl
Rome (Italy)
Euro
155
Poste Italiane SpA
19.40%
19.40%
Replica SIM SpA
Milan (Italy)
Euro
10,500
Poste Italiane SpA
45.00%
45.00%
sennder Italia Srl
Milan (Italy)
Euro
50
Poste Italiane SpA
25.00%
25.00%
(*) The figures shown for these companies were prepared in accordance with IFRS and, as such, may vary from those contained in the respective financial reports, which were prepared in accordance with the Italian Civil Code and Italian GAAP.
(**) The figures shown for these companies were prepared in accordance with IFRS and, as such, may vary from those contained in the Annual Report of the company drafted in compliance with Local GAAP.
***) Poste Italiane SpA holds 51% of the voting capital.", "dimensions": { "concept": "ifrs-full:DisclosureOfCompositionOfGroupExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page854-cflshid_394792-tag141645": { "value": "
DISCLOSURE PURSUANT TO LAW 124/2017
The information required by art. 1, paragraphs 125 and 129 of Law 124 of 4 August 2017 is provided below.
The information is provided in thousands of euros and on a cash basis, indicating the Group company that received and/or disbursed the grant. In addition, given the numerous interpretative doubts, the following information is provided on the basis of the best interpretation of the legislation available to date, in the light of the guidance provided by Assonime in Circular 5 of 22 February 2019.
(\u20ack)
Group companies
Grantor/beneficiary
Purpose
Amount disbursed
Grants received
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Poste Italiane
MIM
Research and Development Projects
605
Poste Italiane
MIMS
Mobility Management and Home-Work Travel Plans
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0262
Net Insurance Spa
Ania Servizi e Formazione Srl
\u00a0Next to People Project
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0142
Net Insurance Spa
Ania Servizi e Formazione Srl
\u00a0More Next to People Project
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a090
Net Insurance Spa
Ania Servizi e Formazione Srl
\u00a0Grow Together Plan
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0167
Total
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,266
Grants disbursed
\u00a0
\u00a0
Poste Italiane
Fondazione Intercultura Onlus ETS
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0120
Poste Italiane
European University Institute
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0100
Poste Italiane
Comunit\u00e0 di San Patrignano
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a030
Poste Italiane
Fondazione Comunit\u00e0 Domenico Tardini Onlus
\u00a0Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a024
Poste Italiane
Fondazione Dynamo Camp Onlus
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a020
Poste Italiane
Weco - Social Enterprise
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a020
Poste Italiane
Aila Onlus Foundation
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a020
Poste Italiane
ISMEO Association
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015
Poste Italiane
Parent Project aps Association
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015
Poste Italiane
Fondazione Bambino Ges\u00f9 Onlus
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010
Poste Italiane
Associazione Andrea Tudisco Onlus
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010
Poste Italiane
Corri la Vita Onlus Association
\u00a0Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010
Poste Italiane
Fondazione Angeli del Bello
Donation
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010
Total
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0404
", "dimensions": { "concept": "ifrs-full:DisclosureOfGovernmentGrantsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page855-cflshid_395607-tag141646": { "value": "
COMMITMENTS
The Group's purchase commitments break down as follows.
Commitments
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
\u00a0
Lease arrangements
217
26
Contracts to purchase property, plant and equipment
124
89
Contracts to purchase intangible assets
20
12
Total
360
127
Poste Italiane SpA's purchase commitments break down as follows.
At 31 December 2023, the item Lease contracts includes commitments that do not fall under IFRS 16 - Leases.
In addition, at 31 December 2023, PostePay takes over:
\u2022purchases of electricity on forward markets for \u20ac170 million;
\u2022purchases of natural gas on futures markets for \u20ac120 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page856-cflshid_395998-tag141647": { "value": "
GUARANTEES
Unsecured guarantees issued by the Group and Poste Italiane SpA are as follows:
Guarantees
\u00a0
\u00a0
Description(\u20acm)
31.12.2023
31.12.2022
\u00a0
Sureties and other guarantees issued:
\u00a0
\u00a0
by banks/insurance companies in the interests of Group companies in favour of third parties
623
698
by the Group in its own interests in favour of third parties
299
61
\u00a0
Total
922
759
", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "v1-page857-cflshid_396237-tag141648": { "value": "
FEES PAID TO INDEPENDENT AUDITORS PURSUANT TO ART. 149 DUODECIES OF THE CONSOB'S REGULATIONS FOR ISSUERS
The following table shows fees321F322 payable to the Parent Company's auditor, Deloitte & Touche, and companies within its network for 2023, presented in accordance with art. 149 duodecies of the CONSOB's Regulations for Issuers:
Disclosure of fees paid to Independent Auditors
(\u20ack)
Type of services
Entity providing the service
2023 fees
Poste Italiane SpA
Audit
Deloitte & Touche S.p.A.
1,339
Audit
Deloitte & Touche network
-
Attestation services
Deloitte & Touche S.p.A.
589
Attestation services
Deloitte & Touche network
-
Other services
Deloitte & Touche S.p.A.
17
Other services
Deloitte & Touche network
45
Subsidiaries of Poste Italiane SpA
Audit (*)
Deloitte & Touche S.p.A.
2,275
Audit
Deloitte & Touche network
47
Attestation services
Deloitte & Touche S.p.A.
820
Attestation services
Deloitte & Touche network
-
Other services
Deloitte & Touche S.p.A.
-
Other services
Deloitte & Touche network
-
Total
\u00a0
5,132
(*) includes the costs of auditing the funds managed by BPF SGR charged to savers for a fee of \u20ac193 thousand.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:815600354DEDBD0BA991", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } } } }