Consolidated interim financial
report at 30 June 2016
Azimut Holding S.p.A.
Consolidated interim financial
report at 30 June 2016
Azimut Holding S.p.A.
The consolidated financial statements have been translated from those issued, from the
italian into the English language solely for the convenience of international readers.
4
G r u p p o
A z i m u t
Consolidated interim financial
report at 30 June 2016
COMPANY BODIES
7
AZIMUT GROUP'S STRUCTURE
8
INDICATORS10
CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS AT 30 JUNE 2016
31
NOTES TO THE FINANCIAL STATEMENTS AS AT 30 JUNE 2016
46
CERTIFICATION OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS PURSUANT TO ARTICLE 154-BIS OF ITALIAN LEGISLATIVE
DECREE NO. 58/98
97
AUDITORS' REPORT 98
5
6
G r u p p o
A z i m u t
Company Bodies
Board of Directors
Pietro Giuliani
Marco Malcontenti
Paola Antonella Mungo Paolo Martini Andrea Aliberti
Claudio Foscoli
Marzio Zocca
Giampiero Gallizioli
Silvia Scandurra
Raffaella Pagani
Antonio Andrea Monari
Anna Maria Bortolotti
Interim Chairman and Chief Executive Officer
Co-Chief Executive Officer
Co-Chief Executive Officer Co-Managing director
Director
Director
Director
Director
Director
Director
Director
Director
Board of Statutory Auditors
Vittorio Rocchetti Costanza Bonelli
Daniele Carlo Trivi Maria Catalano
Luca Giovanni Bonanno Chairman
Permanent auditor
Permanent auditor
Alternate auditor
Alternate auditor
Independent Auditors
PricewaterhouseCoopers S.p.A.
7
Azimut Group's highlights
and indicators
Azimut Group's structure at 30 June 2016
Azimut
Holding S.p.A.
(Listed:AZM.IM)
Asset
Management
Distribution
Life Insurance
Alternative
AZ Fund
(1999)
Azimut CM
(2004)
AZ CM
(2007)
Augustum Opus
SIM
(2013)
Azimut Consulenza
(1988)
AZ Life
(2003)
Azimut
Enterprises
(2014)
Futurimpresa
SGR
(2014)
Azimut Global
Counseling
(2013)
(100%)
Luxembourg
(100%)
Italy
(100%)
Ireland
(51%)
Italy
(100%)
Italy
(100%)
Ireland
(100%)
Italy
(55%)
Italy
(100%)
Italy
AZ International
Holdings (2010)
(100% owned by
Azimut Holding)
Italy
AZ Zhong (AZ) IM
(2011)
AZ Brazil Holdings
(2013)
An Ping Investment
(2013)
AZ Mèxico Holding
S.A. de CV
(2013)
AZ Brazil Holdings
(2013)
(100%)
Hong Kong
(100%)
Brazil
(51%)
Taiwan
(94%)
Mexico
(100%)
Brazil
AZ IM HK
(2011)
AZ IM
(2011)
AZ Legan
(2013)
AZ Quest
(2015)
Azimut Portföy
(2011)
AZ Sinopro
(2013)
Màs Fondos S.A.
(2014)
Azimut Brazil WM
Holding
(2015)
(100%)
Hong Kong
(100%)
China
(92%)
Brazil
(60%)
Brazil
(100%)
Turkey
(100%)
Taiwan
(100%)
Mexico
(100%)
Brazil
AZ Swiss & Partners
(2012)
AZ Sestante
(2015)
AZ Notus Portföy
(2014)
AZ NGA
(2014)
AZ Andes SpA
(2015)
(51%)
Switzerland
(76%)
Australia
(100%)
Turkey
(53%)
Australia
(90%)
Cile
AZ Athenaeum
(2013)
Kataris CA
(2011)
CGM
(2011)
AZ US Holdings
(2015)
(100%)
Singapore
(100%)
Switzerland
(51%)
Switzerland
(100%)
England
Sigma Funds Mgmt
(2016)
Eskatos CA
(2011)
CGM SIM
(2011)
AZ Apice LLC
(2016)
(51%)
Australia
(100%)
Luxembourg
(100%)
Italy
(70%)
England
Source: Company data as at 28/07/2016
Note (1): Controls distribution companies M&O Consultoria, FuturaInvest and Azimut Brasil Wealth Management.
Note (2): controls AZ Sinopro Insurance Planning Ltd
Note*: merger into Azimut Portfoy subject to regulatory approval. Azimut Consulenza merger into Azimut CM in process
8
G r u p p o
A z i m u t
Azimut Group - Highlights at 30 June 2016
39,1 billion
Total assets under management
312 million
Revenues for the first half of 2016
512
14 countries
Employees
Geographical coverage
3,4 billion
Inflows for the first half of 2016
68 million
Net profit for the first half of 2016
1.615
14,59 euro
Financial advisors
Azimut share price
9
Indicators
Financial indicators
(millions of euro)
1H2016
1H2015
312
415
241
EBIT
Change
Absolute
%
2015
-103
-24,82
708
247
-6
-2,43
485
73
198
-125
-63,13
280
Net profit for the period
68
180
-112
-62,22
247
Net inflows
(billions of euros)
3,4
3,0
0,4
13,33
6,7
Total income:
- of which fixed management fees
Operating indicators
Financial advisors
AUM, net (billions of euros)
30/06/2016
31/12/2015
30/06/2015
1.615
1.576
1.545
32,6
31,2
30,2
Breakdown of AuM at 30 June 2016
17,0%
15,1%
67,9%
Mutual funds
10
G r u p p o
Discretionary portfolio management
A z i m u t
AZ Life Insurance
Group management report
The consolidated interim financial report at 30 June 2016 has been prepared in
compliance with article 154-ter (Interim Reports) of Italian Legislative Decree
58/1998 (Consolidated Law on Finance), introduced by Italian Legislative Decree
195/2007, implementing EU Directive 2004/109/EC (known as the Transparency
Directive) as amended. The interim financial report includes the condensed
consolidated interim financial statements, the interim management report and the
statement required by article 154-bis, paragraph 5.
The condensed consolidated interim financial statements have been prepared in
compliance with the International Financial Reporting Standards (IAS and IFRS)
issued by the International Accounting Standards Board (IASB) and endorsed by
the European Union.
Specifically, they have been drawn up in accordance with IAS 34 - Interim
Financial Reporting, applying the same accounting standards used to prepare
the Consolidated Financial Statements at 31 December 2015, to which reference
is made, except for the international financial reporting standards that became
effective as of 1 January 2016 and described in the notes to the financial statements,
section “Accounting standards, amendments and interpretations endorsed by the
European Union and in force from 1 January 2016”.
Introduction
The Azimut Group ended the first half of 2016 with a consolidated net profit
of 67,766 thousand euro (180,432 thousand euro for the first half of 2015) and
consolidated EBIT of 72,769 thousand euro (198,451 thousand euro for the first
half of 2015).
Despite the considerable uncertainties and the high volatility on the markets, the
advisory activities provided to customers by Azimut Group's financial partners
continued to develop positively.
The Group continued to attract professionals of the banking and the private banking
sectors in Italy, increasing the number of financial advisors by an additional 75
resources compared to 31 December 2015, up to a total of 1615.
The Group's leadership in the Italian asset management segment continued to
increase, accelerating the development of the business abroad, specifically in
Australia, as shown by the latest acquisitions, and in Latin American countries.
Total assets under management at 30 June 2016 reached 32.6 billion euro, up by
approximately 4.4% compared to the 2015 year-end balance. Total assets under
management, including assets under custody, amounted to 39.1 billion euro.
Net inflows for the first half of 2016 were positive at 3.4 billion euro. Inflows
benefited from the consolidation of the financial advisory companies acquired in
Australia in the first six months of the year.
Group Results
11
Assets
Figures in millions of euro 30/06/2016 31/12/2015
Change
Absolute
%
30/06/2015
1%
25,677
5,754
964 17%
5,008
5,964
5,588
376
7%
5,208
532
620
-88 -14%
n.s.
Double counting
-7,409
-7,256
-153
2%
-5,662
AUM, net
32,584
31,201
1,383
4%
30,231
6,476
5,481
995 18%
4,953
39,060
36,682
26,779
26,495
Discretionary portfolio
management and other
6,718
AZ Life insurance
Mutual funds
Advisory
Securities, third-party
funds and A/C
Total assets
Net Inflows
284
2,378
6%
Change
Absolute
%
35,184
2015
1H2016
1H2016
866
2,532
1,066
293
AZ Life insurance
257
873
-616
-71%
1,399
Double counting
-302
-725
423
-58%
-2,355
Net inflows
- assets under management
1,887
2,973
-1,086
-37%
4,454
Securities, third-party funds
and A/C
1,538
970
568
59%
2,689
Total inflows
3,425
3,943
-518
-13%
6,667
Figures in millions of euro
Mutual funds
Discretionary portfolio
management and other
12
G r u p p o
A z i m u t
-1.666
-66%
3,941
773 264%
992
In order to provide a more effective representation of the results, the income
statement has been reclassified and thus better reflects the content of the items
according to operating criteria.
The main reclassifications involved the following:
• cost recoveries on portfolio management reported under “Fee and commission
income” have been reclassified as “Other income” in the reclassified income
statement;
• net premiums and the corresponding change in the technical reserves, commissions
and recovered expenses relating to insurance and investment products issued by
AZ Life Ltd, reported under “Net premiums”, “Change in technical reserves” and
“Fee and commission income”, have been reclassified as “Insurance income”;
• commission expenses paid to the distribution network, reported under “Fee
and commission expense” are now classed as “Acquisition costs”; similarly,
the Enasarco/Firr contributions related to these commission expenses and the
other trade payables associated with the distribution network, recognised under
“Administrative costs”, have been reclassified as “Acquisition costs”; the amount
allocated to the supplementary indemnity reserve for agents (ISC) reported under
the item “Allowance for risks and charges” has been reclassified as “Acquisition
costs”;
• administrative cost recoveries, reported under “Other operating income and
costs” were recognised as a reduction of “Overheads/administrative costs”;
• interest expense on loans was reported under “Interest expense” in the reclassified
income statement.
13
Reclassified Consolidated
Income Statement
Euro/000
01/01/16 30/06/16
01/01/15 30/06/15
01/01/15 31/12/15
3,300
5,876
10,151
240,523
247,123
484,567
46,317
131,558
158,466
3,968
4,922
10,267
18,380
25,228
44,118
312,488
414,707
707,569
(160,821)
(149,425)
(290,762)
(73,074)
(62,561)
(125,831)
(5,824)
(4,270)
(11,110)
(239,719)
(216,256)
(427,703)
72,769
198,451
279,866
315
15,353
14,392
Net non-recurring costs
(1,895)
(1,546)
(5,065)
Interest expense
(5,505)
(5,499)
(11,015)
Pre-tax profit
65,684
206,759
278,178
Income tax
(9,633)
(17,503)
(23,555)
Deferred tax assets/liabilities
12,309
(6,618)
(4,636)
Net profit
68,359
182,638
249,987
593
2,206
2,566
67,766
180,432
247,421
Acquisition fees
Fixed management fees
Variable management fees
Other income
Insurance income
Total income
Acquisition costs
Overheads/administrative costs
Amortisation/provisions
Total costs
EBIT
Net financial income
Profit attributable to minority interest
Group net profit
Consolidated EBIT and consolidated Group net profit at 30 June 2016 dropped to
73 million euro (198 million euro at 30 June 2015) and 68 million euro (180 million
euro at 30 June 2015), respectively.
The decrease on the same period of the previous year, when an all-time high
performance had been recorded by Azimut Group with variable management fees
of over 132 million euro, is due to the reduction in said variable fees caused by the
considerable uncertainties that characterised the first half of 2016.
Indeed, the concerns over the development of emerging economies caused a
strong decline in international financial market prices.
Despite the partial decrease in tensions, the volatility of stock indices remained
high, preventing the Group from achieving the same level of variable management
fees recorded in the same period of the previous year.
The trend of acquisition costs reflects the recruitment of financial advisors and
private bankers last year.
Overheads in the first half of 2016 increased on the same period of the previous
year due to the consolidation of foreign equity investments and charges related to
investments in software to keep up with the growth of the Group.
14
G r u p p o
A z i m u t
MAIN BALANCE SHEET FIGURES
30/06/2016
31/12/2015
30/06/2015
5,982,336
5,658,322
5,216,793
Available-for-sale financial assets
323,416
365,910
398,728
Receivables and equity investments
155,406
260,805
237,792
Tangible and intangible assets
488,950
455,731
430,285
Other assets
278,473
205,473
152,766
Total assets
7,228,581
6,946,241
6,436,364
Payables and outstanding securities
313,323
318,514
315,337
Technical reserves
251,344
281,209
303,597
5,809,292
5,439,863
4,997,887
Other liabilities and provisions
170,677
179,438
154,436
Shareholders’ equity
683,945
727,217
665,107
7,228,581
6,946,241
6,436,364
Euro/000
Financial assets measured at fair value
Financial liabilities measured at fair value
Total liabilities and shareholders’ equity
Financial assets and liabilities measured at fair value rose by approximately 6%
on 31 December 2015.
These items mainly refer to the insurance activities carried out by AZ Life Ltd:
assets mainly relate to investments in unit-linked policies where the investment
risk is borne by policyholders, while liabilities mainly relate to commitments from
unit-linked policies classified as investment contracts.
Similarly, "available-for-sale" financial assets, which reflect the investment of the
excess liquidity of operations in UCI units, decreased by 12% from 366 million
euro to 323 million euro. Furthermore, cash equivalents with bank current
accounts held by Group companies decreased from 162 million euro to 67 million
euro due to the payment of dividends as described below.
Tangible and intangible assets increased slightly as a consequence of the rise in
goodwill due to the acquisitions of the period and the increase in intangible assets
with a finite useful life due to the investments in software of the period.
15
With regard to the methods used to assess net financial debt, reference is made
to the recommendation issued by CESR (Committee of European Securities
Regulators) dated 10 February 2005, and more specifically to the paragraph on
“Capitalisation and indebtedness” in chapter II.
Receivables and payables include those of a financial nature only, whereas trade
receivables and payables have been excluded. Receivables in the form of fees and
commissions for managed funds and discretionary portfolios are also included
and are considered as cash equivalents given that they are collected by the Group
during the first few working days after the reference date.
Consolidated net financial
position
Euro/000
30/06/2016 31/12/2015 30/06/2015
ACash
B Cash equivalents:
31
27
65
122,734
224,592
194,608
Due from banks
66,575
161,575
141,514
Due from managed funds
56,159
63,017
53,094
C Available-for-sale financial assets
315,301
363,596
394,408
D Total cash A+B+C
438,066
588,215
589,081
E Short-term financial receivables
-
-
-
F Short-term bank loans
-
-
-
(10,524)
(11,398)
(10,764)
-
(778)
(7)
(524)
(524)
(524)
-
-
(100)
(10,000)
(10,096)
(10,133)
H Other short-term financial payables
-
-
-
I Short-term financial debt F+G+H
(10,524)
(11,398)
(10,764)
J Short-term financial debt (net) I-E-D
427,542
576,817
578,317
K Long-term bank loans:
(10,000)
(20,000)
(20,000)
(10,000)
(20,000)
(20,000)
(223,199)
(220,524)
(218,690)
-
-
(820)
(223,199)
(220,524)
(217,870)
-
-
-
(233,199)
(240,524)
(238,690)
194,343
336,293
339,627
G Current portion of long-term debt:
Bonds (Azimut '11-'16 Senior)
Bonds (Azimut '13-'20 Convertible)
Due to banks (lease-back)
Due to banks (BPN loan)
Due to banks (BPN loan)
LBonds
“Azimut ‘11-’16 Senior” Bond
“Azimut '13-'20 Convertible” Bond
M Other long-term debt
N Long-term financial debt K+L+M
O Net financial position J+N
16
G r u p p o
A z i m u t
•
•
•
Net financial position was positive for 194.3 million euro at 30 June 2016 (336.3
million euro at 31 December 2015). The balance was impacted by the liquidity
generated by operating activities, as well as by 103 million euro used for the
payment of dividends to shareholders and holders of profit-participating financial
instruments, in addition to the following main transactions carried out during the
period:
on 14 January 2016, the capital injection in favour of Programma 101 Sicaf S.p.A.
of 335,627 euro;
in the first half of 2016, following the Board of Directors' resolutions of 10
March 2016 and 24 May 2016, Azimut Holding S.p.A. made a capital injection
of 27.8 million euro to increase the share capital of the subsidiary AZ International
Holdings SA in order to finance the Group's international development;
in the first half of 2016, payment of tax advances, virtual stamp duties and taxes
on the mathematical reserve of AZ Life Ltd of approximately 70 million euro.
During the first half of 2016, transactions involving treasury shares led to a total
decrease of 45,483 shares for a total of 1.1 million euro. The details of these
transactions are illustrated in the “Treasury Shares” section of this interim financial
report.
17
The changes in financial debt items during the first half of 2016 are shown in the
following table:
Loans raised and repaid
during the period
Euro/000
Interest rate
Currency
Nominal
Balance at 01/01/2016
Balance at:
Euro
BPN loan - Line B
Euro
“Azimut 2011-2016 Senior”
Bond
Euro
2,50%
Prestito Obbligazionario
“Azimut 2013-2020”
Subordinated Bond
Euro
2,13%
Changes/Redemptions:
“Azimut 2011-2016 Senior”
Bond
Euro
Euro
BPN loan - Line B
Euro
“Azimut 2013-2020”
Subordinated Bond
Euro
Balance at 30/06/2016
Euro
Effective Nominal value Carrying amount Expiry
251,845
3 month Euribor 3 month Euribor
+1,25%
+1,25%
50,000
30,000
2018
3,06%
884
797
2016
4,91%
250,000
211,048
2020
3,06%
-884
-8,122
-797
2016
3 month Euribor 3 month Euribor
+1,25%
+1,25%
-10,000
-10,000
2018
2,675
2020
2,50%
2,13%
4,91%
243,723
The “Azimut 2011-2016 Senior” bond was entirely repaid on 1 February 2016 (884
thousand euro).
The instalment of the loan granted by Banco Popolare relating to Line B totalling
10,000 thousand euro was repaid on 30 June 2016.
Shareholders' Equity
At 30 June 2016, consolidated shareholders' equity, including the profit for the
period, amounted to 669 million euro (717 million euro at 31 December 2015).
This figure does not reflect the effects of the dividend distribution approved by
the shareholders in their ordinary meeting called to approve the 2015 financial
statements on 28 April 2016.
Indeed, the shareholders resolved to pay 1.5 euro per ordinary share, pre-tax,
of which 0.5 euro per share paid as of 25 May 2016, 23 May 2016 ex-dividend
payment date and 24 May 2016 as the record date, while the residual 1.0 euro per
share will be paid within 30 days of the Azimut Group's being struck off from the
investment firms register by the Bank of Italy.
They also approved the payment to Fondazione Azimut Onlus of 2.8 million euro,
equal to 1% of pre-tax consolidated profit and the payment of 24,74 euro for each
profit-participating financial instrument held by Top Key People at the time of
approval of payment of the dividend.
18
G r u p p o
A z i m u t
The first half of 2016 began with new concerns about the global growth caused by
the alleged slowdown of China, which fell to around 6.5%, well below government's
expectations.
Lending figures raised serious concerns since, according to many observers, they
have exceeded the "alert levels", especially in the real estate sector. In addition to
these concerns, there was also the not sensational depreciation of the yuan decided
by the Chinese government to restore the balance of China's international trade.
This measure was seen as the beginning of a currency war that would certainly not
have had a positive impact on the economies and financial markets.
These concerns were addressed with an agreement (not explicit, but definitively
in force considering the developments of the subsequent months) reached during
the G20 meeting held mid-February 2016.
The “currency peace” provides for the Fed's slowdown of its tight interest rate
policy on the one hand and China's and probably Europe's willingness not to
further depreciate their currencies to revitalise their economies, on the other.
During the meeting held in early March, also the governor of the European
Central Bank, Mr. Draghi, stated with strength that the negative rate applied to
bank deposits with the ECB (now at -0.40%) will not be further decreased to avoid
further weakening the euro. Since March all currencies around the world have
been more stable and no longer posed problems for the financial markets.
Against this background, also the other major concern related to the economies
of emerging markets disappeared since the weakness of the dollar eliminated the
serious problem posed to the trade balances of these countries.
Since April the British referendum on leaving the EU, which effectively delivered
a yes to Brexit at the end of June, has become the main issue.
The economic impact on the global economies is still to be understood.
The second half of the year will undoubtedly reveal the first signs, especially in
Britain where the real estate sector is the weakest link, as prices sky-rocketed in the
past few years. This sector is a major contributor to Britain's GDP. Consequently,
its strong slowdown, if any, may cause an economic recession.
Financial Markets and the
Global Economy
Similarly to the past few years, US growth in the first quarter was weaker than
expected (an annual 1.1%). The unemployment rate fell below 5%, a percentage
that for many means full employment. The monthly average of new jobs is close to
150,000 in the second quarter of the year, despite the decrease on 2015. Given the
demographic trends that affect the participation rate of the working age population
in employment, it was estimated that the unemployment rate should remain in the
region of 5% provided that each month 100,000 jobs are created. Wage growth
trends remain critical, up however by almost 3% p.a.
Following the sluggish wage growth and the inflation rate trend, the ECB decided
not to further increase official interest rates for the first four months of the year
after the 0.25 increase approved in December. Furthermore, the euro/US dollar
was kept under control also to resolve the international tensions caused by the
Economic performance
19
competitive depreciation and the decision not to increase US interest rates.
US interest rates are not expected to increase in the next few months since the
uncertainties caused by the Brexit effect prevail over any financial observation,
and the Fed and the other central banks do not intend to aggravate the crisis on
the financial markets until the impact on the global economies is clear.
In Europe, the economic growth has far exceeded that in the US (slightly below
an annual 2.5% in the first quarter of the year). In all countries, growth was driven
by internal demand following the increase in citizen's purchasing power (the
inflation rate is 0 in Europe, including in Germany, where growth is very robust,
the unemployment rate reached an all-time low and wages are up 3/4%).
The UK decision will certainly have an impact on investments and global trade.
However, the engine that drove Europe's GDP last year should not be particularly
concerned. Many bodies, including the ECB's research department, have revised
downwards their forecasts for the next few quarters compared to the original
estimates of 0.5/0.7 until 2018.
Japan is the country that, to say the least, disappointed all expectations. The
country had to deal with the unexpected strong appreciation of the yen which
clearly had a negative impact on the exporting companies that, in Japan, strongly
contribute to GDP growth.
The result of the UK's referendum exacerbated this fact since the yen has continued
to appreciate, bringing the yen/US dollar and the yen/euro exchange rate back to
the initial levels of the ultra-expansionary policy launched by the Bank of Japan.
Performance of the
financial markets
Following the Fed Chairman decision at the end of December 2015 to postpone the
expected increase in official interest rates, although at a slower pace, US treasury
operators repositioned over the next few months with long-term positions hitting
an all-time low at period end. Part of this trend is also due to the comparison
against European and Japanese rates, which remain negative for all maturities
within and after 10 years.
The lack of inflation in Europe and the zero-growth in Japan, together with an
extremely expansionary monetary policy, pushed down the return of German
and Japanese government bonds beyond any reasonable expectation. Meanwhile,
the operators were kept away from the activities most at risk and certainly most
profitable in the medium term, such as shares, due to the high volatility caused by
the above-mentioned political and macro-economic events.
However, the world stock exchanges in local currency performed well overall,
probably thanks to the Fed decision not to take any action. Specifically, after the
particularly difficult times experienced in January and February, the US stock
exchange reached levels close to all-time highs, while those of the emerging and
Chinese markets stood slightly below year-end levels.
The European and Japanese stock markets were the most affected as explained
above.
In addition, Europe experienced another crisis in the banking system, which got
worse in Italy and in northern Europe given the NPL increase due to the recession
in the past few years and a probably excessive use of derivatives, respectively.
The MSCI index in local currency ended the period with a modest total loss of
1.38%. In terms of exchange rates, the above index incurred a euro loss of 3.12%
20
G r u p p o
A z i m u t
due to the modest depreciation of the US dollar and the significant decrease in the
pound, which was not adequately offset by the recovery of the yen.
AZ International Holdings SA
RIT Toowoomba Pty Ltd - On 14 December 2015, the Azimut Group signed
an agreement to acquire 100% of RIT Toowoomba Pty Ltd (“RIT”) through its
Australian subsidiary AZ NGA. RIT provides pension and insurance consultancy
services. Under the relevant agreement, 49% of the transaction provides for the
exchange of EFP shares with AZ NGA shares and the progressive repurchase of
these shares over the next ten years. The residual 51% was paid in cash by the
founding members. The transaction amounted to approximately 4.9 million euro
and included both the cash and share exchange portions. The transaction was
completed in January, after meeting the conditions set out in the purchase and
sale agreement.
Empowered Financial Partners Pty Ltd - On 29 January 2016, the Azimut Group
signed an agreement to acquire 100% of Empowered Financial Partners Pty Ltd
(“EFP”) through its Australian subsidiary AZ NGA. EFP provides financial advisory
services, including asset allocation, pension and insurance advisory services and
strategic financial planning and training. Under the relevant agreement, 49% of
the transaction provides for the exchange of EFP shares with AZ NGA shares and
the progressive repurchase of these shares over the next ten years. The residual
51% was paid in cash by the founding members. The transaction amounted to
approximately 1.8 million euro and included both the cash and share exchange
portions. The transaction was completed in early March 2016, after meeting the
conditions set out in the purchase and sale agreement.
Athenaeum Ltd - On 9 February 2016, AZ International Holdings SA (“AZIH”)
completed the acquisition of the residual 45% of Athenaeum Ltd (“AZ Athenaeum”),
an asset management company based in Singapore specialised in mutual funds
and discretionary funds. The transaction was carried out following the request
of the minority shareholders, Athenaeum Holdings (Asia) Pte. Ltd. (“ATH”), to
bring forward the exercise of the put option to the strike price set out in the 2013
acquisition agreement. Consequently, AZ Athenaeum is now wholly owned by
AZIH. The acquisition of the residual 45% of AZ Athenaeum generated an outflow
of approximately 0.6 million euro to the founding shareholders which will be paid
in the next 12 months after the transaction. Azimut and AZ Athenaeum's current
management contractually agreed to continue their collaboration in the long-term
to develop and increase the business in Singapore, focusing, in particular, on the
management of local products and the development of the relationship with the
region's HNWI through family office services.
Wealthwise Pty Ltd - On 3 March 2016, the Azimut Group signed an agreement
to acquire 100% of Wealthwise Pty Ltd through its Australian subsidiary AZ NGA.
21
Significant Events of the
Period
Wealthwise Pty Ltd provides financial advisory services, including asset allocation,
pension and insurance advisory services and strategic financial planning and
training. Under the relevant agreement, 49% of the transaction provides for the
exchange of Wealthwise Pty Ltd shares with AZ NGA shares and the progressive
repurchase of these shares over the next ten years. The residual 51% was paid
in cash by the founding members. The transaction amounted to approximately
6.4 million euro and included both the cash and share exchange portions. It was
completed in April 2016, after meeting the conditions set out in the purchase and
sale agreement.
Sigma Funds Management Pty Ltd - In April 2016, the Azimut Group, through its
Luxembourg-based subsidiary AZ International Holdings SA (“AZ International”),
and Sigma Funds Management Pty Ltd (“Sigma”), an Australian equity manager
specialised in the “value” approach, entered into a binding purchase and sale
agreement to form an asset management partnership in Australia. AZ International
acquired 51% of Sigma, while the remaining 49% is held by the company's current
management. The aim of the partnership is to develop distinctive management skills
in the local stock market, while increasing distribution capacity. Azimut, through
AZ International, acquired 51% of Sigma by means of a deferred capital increase
to cover for Sigma's working capital up to the cumulative value of approximately
1.4 million euro. This amount will be used to finance its growth plan resulting
from the approved business plan. Azimut and Sigma's investment team also signed
shareholders' agreements which provide for call/put options where Azimut will be
able to increase its share over the next ten years.
Priority Advisory Group Pty Ltd - On 12 April 2016, the Azimut Group signed
an agreement to acquire 100% of Priority Advisory Group Pty Ltd (“PAG”) through
its Australian subsidiary AZ NGA. PAG provides financial advisory services,
including asset allocation, pension and insurance advisory services and strategic
financial planning and training.
Under the relevant agreement, 47% of the transaction provides for the exchange
of PAG shares with AZ NGA shares and the progressive repurchase of these
shares over the next ten years. The residual 53% was paid in cash by the founding
members. The transaction amounted to approximately 6.3 million euro and
included both the cash and share exchange portions.
Sterling Planners Pty Ltd - On 29 April 2016, the Azimut Group signed an
agreement to acquire 100% of Sterling Planners Pty Ltd (“SP”) through its Australian
subsidiary AZ NGA. SP offers a full suite of financial advisory services and is a
market leader in facilitating UK pension fund transfers into the Australian system.
Under the relevant agreement, 49% of the transaction provides for the exchange of
SP shares with AZ NGA shares and the progressive repurchase of these shares over
the next ten years. The residual 51% was paid in cash to the founding members
over two years. The transaction amounted to approximately 2.7 million euro and
22
G r u p p o
A z i m u t
included both the cash and share exchange portions. It was completed in May
2016, after the successful resolutions of some provisions included in the purchase
and sale agreement.
JFS Personal Investment Solutions Pty Ltd - On 10 June 2016, the Azimut Group
signed an agreement to acquire 100% of JFS Personal Investment Solutions Pty Ltd
(“JFS”) through its Australian subsidiary AZ NGA. JFS provides financial advisory
services, including asset allocation, pension and insurance advisory services and
strategic financial planning and training. Under the relevant agreement, 49% of
the transaction provides for the exchange of JFS shares with AZ NGA shares and
the progressive repurchase of these shares over the next ten years. The residual
51% was paid in cash by the founding members. The transaction is expected to
be completed by August 2016, after the successful resolutions of some provisions
included in the purchase and sale agreement.
In February 2016, AZ Apice Capital Management LLC (set up in 2015), an
investment adviser registered with the SEC and based in Miami, became operative.
The company provides financial planning and portfolio management advisory
services for natural persons and/or small companies, mainly to non-resident US
citizens. The Azimut Group sold an additional 20% stake to the US shareholders,
reducing its equity investment to 70%.
In February, AZ International Holdings decreased to 51% its equity investment
in the subsidiary AZ Swiss (now AZ Swiss & Partners). On 29 June 2016, AZ
Swiss & Partners signed a binding sale and purchase agreement to acquire the
business unit of Sogenel Capital Holding S.A., including all relevant assets under
management, clients, contracts and agreements, which will form a new division
within AZ Swiss & Partners. The valuation of the business unit of Sogenel Capital
Holding S.A. is based on the 2015 pro-forma net profit adjusted for any income or
expense item not included in the scope of the transaction. In addition, the parties
have agreed on a price adjustment linked to the attainment of certain targets over
the medium term. The closing of the transaction occurred in July following the
notification to FINMA and after meeting the conditions set out in the purchase
and sale agreement.
Other significant events
related to Group companies
Azimut Capital Management SGR S.p.A.
Product updating
The changes to the regulation governing the “Azimut Previdenza” pension fund
approved by Azimut Capital Management SGR S.p.A.'s Board of Directors on 11
March 2015 and authorised by the Supervisory Commission for Pension Funds on
25 June 2015 became effective on 1 February 2016. In short, the changes related
to the merger of the Comparto Protetto fund into the Comparto Obbligazionario
fund and some changes to the four sub-funds' investment policies.
Azimut Previdenza pension
fund
23
New fund for SMEs
Futurimpresa SGR S.p.A.
Product updating
Through its subsidiary Futurimpresa SGR S.p.A., the Azimut Group announced
the new reserved closed-end fund IPO CLUB aimed at raising 150 million euro
to be used in pre-booking transactions, i.e., investment vehicles set up to channel
funds to leading Italian SMEs to be subsequently listed.
Luxembourg-based
umbrella fund “AZ Fund 1”:
Cat Bond Fund
Az Fund Management SA
Product updating
Following the request from the Luxembourg authority Commission de Survellance
du Secteur Financier (CSSF), which oversees the AZ FUND 1 fund and its subfunds, more stringent criteria were applied to the sub-funds that mainly invest in
Catastrophe Bonds (Cat Bonds).
For these sub-funds, the CSSF set a minimum initial subscription of 100,000 euro
and a subsequent payment, unchanged, at 500 euro.
Starting from 1 June 2016, the investment policy of the Cat Bond Fund was changed
to invest also in unrated Insurance Linked Securities (ILS). At the same time, its
name was changed to “Cat Bond Fund Plus”.
Subscription closing of the “Arbitrage” sub-fund of the “AZ Fund 1” fund by
AZ Fund Management SA was set at 22 February 2016, having reached a high
subscription level. This decision was taken to protect investors' interests and
pursue the investment objectives. Following this decision, placement of the
new “Arbitrage Plus” sub-fund began on 18 April 2016. Despite using a “merger
arbitrage” strategy, the sub-fund is characterised by the fact that the manager is
free to concentrate investments.
Luxembourg-based
umbrella fund “AZ Fund 1”
fund: “Arbitrage” sub-fund
Renaming of some sub-funds Starting from 18 April 2016, AZ Fund Management SA renamed the following
•
•
•
•
sub-funds of the “AZ Fund 1” Fund to better reflect the investment policy in
place:
The “Opportunities” Sub-fund was renamed “Small Cap Europe”
The “Alpha Manager Credit” Sub-fund was renamed “Credit”
The “Alpha Manager Thematic” Sub-fund was renamed “Asset Dynamic”
The “Alpha Manager Equity” Sub-fund was renamed “Global Equity”
24
G r u p p o
A z i m u t
AZ Life Ltd
The new Internal Funds GREEN I, GREEN II and GREEN III in the AZ Style
unit-linked policies were subscribed during the period 15-26 February 2016 at the
initial price of 5 euro per unit.
Furthermore, on 15 February 2016, some Internal Funds were merged into other
Internal Funds to streamline the product range and increase the efficiency of the
management service, while renaming the RED and BLUE Internal Funds:
BLUE I
(formerly Blue 2) RED I
(formerly Blue 2)
BLUE II
(formerly Blue 3) RED II
(formerly Blue 3)
BLUE III
(formerly Blue 5) RED III
(formerly Blue 5)
25
Launch of new “green”
funds by AZ Life Ltd
Management report
Capital injections to AZ
International Holdings SA
Azimut Holding S.p.A.
In the first half of 2016, following the Board of Directors' resolutions of 10 March
2016 and 24 May 2016, Azimut Holding S.p.A. made a capital injection of 27.8
million euro to increase the share capital of the subsidiary AZ International
Holdings SA and finance the Group's international development.
Azimut Group
reorganisation
On 27 April 2016, the Bank of Italy approved the demerger of Azimut Consulenza
SIM S.p.A. and its merger into Azimut Capital Management SGR S.p.A. and
Azimut Financial Insurance S.p.A. to the extent of the financial product placement
business unit and the insurance product placement business unit, respectively.
This transaction is part of the Group's reorganisation process which Azimut
Holding S.p.A.'s Board of Directors approved on 19 March 2015 to simplify
and streamline the company structure by transforming the Group's investment
companies into asset management companies.
On 30 May 2016, the Bank of Italy approved the transformation of the subsidiary
CGM Italia SIM into an asset management company, completing the last step of
the reorganisation. Based on the new structure, the Azimut Group will no longer
be subject to the CRD IV directive.
Consequently, regulatory capital will be calculated individually for asset
management companies and the insurance company, releasing a considerable
portion of the Group's assets, which will become fully available.
Azimut Holding S.p.A.
Annual General
Shareholders’ Meeting
of 28 April 2016
Azimut Holding S.p.A. Annual General Shareholders’ Meeting of 28 April 2016
The shareholders’ meeting (both ordinary and extraordinary) of 28 April 2016
approved the following:
Approval of 2015 financial
statements
The shareholders’ meeting approved the 2015 financial statements, which included
a parent company net profit of 156.8 million euro.
At the same time, the shareholders resolved to pay a dividend of 1.5 euro per
ordinary share, pre-tax, of which 0.5 euro per share paid as of 25 May 2016, 23
May 2016 ex-dividend payment date and 24 May 2016 as the record date, while
the residual 1.0 euro per share will be paid within 30 days of the Azimut Group's
being struck off from the investment firms register by the Bank of Italy.
They also approved the payment to Fondazione Azimut Onlus of 2.8 million euro,
equal to 1% of pre-tax consolidated profit and the payment of 24,74 euro for each
profit-participating financial instrument held by Top Key People at the time of
approval of payment of the dividend.
26
G r u p p o
A z i m u t
The shareholders’ meeting appointed twelve members of the Board of Directors,
of whom ten with a three-year term of office and two for one year, confirming Mr.
Pietro Giuliani as interim Chairman and Chief Executive Officer.
The shareholders’ meeting also appointed the Board of Statutory Auditors for the
next three years.
Appointment of the Board
of Directors and the Board
of Statutory Auditors
The shareholders’ meeting approved the purchase of up to 567,950 Azimut Holding
S.p.A. ordinary shares, or 0.4% of the current share capital, including in one or
more instalments, to accrue the shares to service the exercise of the warrants
awarded to investors following subscription of the non-convertible “Azimut
2009-2016 subordinato 4%” subordinated bond. Furthermore, the shareholders’
meeting approved the purchase of up to 28,000,000 Azimut Holding S.p.A.
ordinary shares, or 19.55% of the current share capital, including in one or more
instalments, considering 567,950 shares to service the exercise of the warrants and
those already in portfolio upon purchase at a minimum unit price equal to at least
the carrying amount of Azimut Holding S.p.A. ordinary shares and a maximum
unit price of 50 euro.
Proposal for purchase and
allocation of treasury shares
The shareholders’ meeting approved Azimut Holding S.p.A.'s policy concerning
remuneration of members of the management boards, general managers and key
managers, as well as the procedures used to adopt and implement said policy.
Remuneration Report:
resolutions pursuant to article
123-ter, paragraph 6, of Italian
Legislative Decree No. 58/98
On 30 June 2016, the Parent Company repaid the instalment (Line B) of the loan
granted by Banco Popolare for a total amount of 10 million euro.
Repayment of the Banco
Popolare loan
During the first half of 2016, 51,517 warrants assigned as part of the placement of
the “Azimut 2009 - 2016 Subordinato 4%” Bond were exercised against a total of
1.1 million euro, delivering the same number of Treasury Shares.
Exercise of warrants issued
on the “Azimut 2009-2016
Subordinato 4%” Bond
27
Azimut Holding S.p.A. and Group: Key Risks and Uncertainties
The main risks and uncertainties to which Azimut Holding S.p.A. and the Group are exposed are as follows:
• Strategic risk;
• Sales network risk;
• Operational risk;
• Outsourcing risk;
• Reputational risk;
• Compliance risk;
• Financial risk;
• Liquidity risk.
For further information on the key risks and uncertainties for the Group, reference
should be made to the consolidated financial statements at 31 December 2015.
As regards Financial Risks in particular, please see details in “Other Information
- Information on risk management and hedging policies” in the notes to the
condensed consolidated interim financial statements.
Related Party Disclosures
Pursuant to Consob Regulation on Related Parties (Resolution No. 17221 of 10
March 2010, as amended), on 22 November 2010, the Board of Directors of Azimut
Holding S.p.A. approved the procedures that ensure transparency and fairness
of related-party transactions (“Related-Party Transaction Procedure” available on
Azimut’s website at www.azimut.it).
In reference to paragraph 8 of article 5 of the Consob regulation on periodic
disclosure of related-party transactions, the Group did not engage in any
“significant” transactions during the first half of 2016.
No other atypical or unusual transactions were performed.
As for disclosure of other related-party transactions, please see the relevant
paragraph in the notes to the condensed consolidated interim financial statements.
28
G r u p p o
A z i m u t
Human resources
Organisational Structure
and Corporate Governance
At 30 June 2016, Group personnel amounted to 512 employees, broken down as
follows:
Position
30/06/2016
31/12/2015
30/06/2015
97
85
71
Middle managers
118
113
102
Office staff
297
286
221
Total
512
484
394
Managers
The increase in the number of employees at 30 June 2016 over the previous year
reflects the consolidation of recently acquired companies and the new employees
hired to support the growth of the Group.
Treasury Shares
At 30 June 2016, Azimut Holding S.p.A.'s subsidiaries did not hold, nor did they
hold during the period, any treasury shares or shares of the Parent Company,
either directly or via trust companies or third parties.
During the first half of 2016, 52,517 treasury shares were assigned against the
exercise of the same number of warrants issued with respect to the placement of
the “Azimut 2009 - 2016 Subordinato 4%” Bond.
At 30 June 2016, Azimut Holding S.p.A.’s treasury share portfolio therefore stood
at 10,433,589 shares, equal to 7.283% of its share capital.
Business Outlook
Given the above figures and the positive results of the subsidiaries in early 2016,
consolidated performance is expected to be positive this year.
Nonetheless, this year’s financial position and results of operations will also be
affected by financial market trends.
Milan, 28 July 2016
Chairman and CEO
On behalf of the Board of Directors
(Pietro Giuliani)
29
30
G r u p p o
A z i m u t
Consolidated Interim Financial
Statements as at 30 June 2016
31
Consolidated balance
sheet as at 30 june 2016
Assets
30/06/2016
31/12/2015
30/06/2015
31
27
65
5,982,336
5,658,322
5,216,793
Available-for-sale financial assets
323,416
365,910
398,728
Receivables
152,492
253,061
229,770
Equity investments
2,914
7,744
8,022
Tangible assets
7,698
6,199
4,731
481,252
449,532
425,554
Tax assets
89,028
72,680
73,092
a) current
50,725
44,855
51,643
b) deferred
38,303
27,825
21,449
Other assets
189,414
132,766
79,609
Total assets
7,228,581
6,946,241
6,436,364
Cash and cash equivalents
Financial assets measured at fair value
Intangible assets
Liabilities and Shareholders’ Equity
30/06/2016
31/12/2015
30/06/2015
89,601
96,688
96,111
Outstanding securities
223,723
221,826
219,226
Technical reserves where the investment risk
is borne by policyholders
250,994
280,859
303,247
5,809,292
5,439,863
4,997,887
350
350
350
65,588
60,224
66,039
9,441
1,790
8,515
Payables
Financial liabilities measured at fair value
Other technical reserves
Tax liabilities
a) current
b) deferred
56,147
58,434
57,524
Other liabilities
72,525
89,209
59,531
3,429
3,311
2,939
Provisions for risks and charges:
29,135
26,694
25,927
29,135
26,694
25,927
32,324
32,324
32,324
Treasury shares (-)
(81,835)
(80,727)
(80,430)
Equity instruments
71,353
71,459
71,529
Share premium reserve
173,987
173,987
173,987
Reserves
415,454
280,181
279,670
Valuation reserves
(9,909)
(7,776)
(6,185)
Profit for the period/year
67,766
247,421
180,432
Minority interest
14,804
10,348
13,780
7,228,581
6,946,241
6,436,364
Staff severance pay (TFR)
b) other provisions
Share capital
Total liabilities and shareholders’ equity
32
G r u p p o
A z i m u t
Consolidated income statements
at 30 june 2016
Items
01/01/16 to
30/06/16
01/01/15 to 01/01/15 to
30/06/15
31/12/15
893
14,788
14,155
900
14,788
14,155
(7)
0
0
(882)
761
9,687
Fee and commission income
297,909
394,767
673,086
Fee and commission expense
(144,999)
(134,112)
(271,970)
679
1,068
1,781
(5,730)
(5,605)
(11,237)
-
-
3
727
2,629
5,070
Net profits on financial instruments at fair value through profit or loss
57,369
78,063
129,147
Change in technical reserves where the investment risk is borne by policyholders
29,865
(3,105)
19,283
Redemptions and claims
(73,070)
(56,614)
(116,363)
Total income
162,761
292,640
452,642
Administrative costs
(88,348)
(77,427)
(157,836)
a) personnel costs
(33,633)
(34,819)
(62,094)
b) other administrative costs
(54,715)
(42,608)
(95,742)
Net impairment/write-ups of tangible assets
(1,019)
(633)
(1,562)
Net impairment/write-ups of intangible assets
(4,934)
(3,706)
(8,750)
Net allowance for risks and charges
(3,095)
(1,148)
(2,479)
318
(2,114)
(3,351)
Profits/losses on disposal or repurchase of:
a) financial assets
b) financial liabilities
Net result of financial assets and financial liabilities measured at fair value
Interest income and similar income
Interest expense and similar charges
Dividends and similar income
Net premiums
Other operating income / costs
33
Consolidated income statements
at 30 june 2016
01/01/16 to
30/06/16
01/01/15 to
30/06/15
01/01/15 to
31/12/15
65,683
207,612
278,664
65,683
206,759
278,179
Income tax on profit from continuing operations
2,676
(24,121)
(28,192)
Net profit (loss) from continuing operations
68,359
182,638
249,987
Profit for the period/year
68,359
182,638
249,987
593
2,206
2,566
67,766
180,432
247,421
Items
Operating profit
Profit (loss) from equity investments
0
Pre-tax profit (loss) from continuing operations
Profit for the period/year attributable to minority interest
Parent Company profit for the period/year
On behalf of the Board of Directors
Chairman and Chief Executive Officer
(Pietro Giuliani)
34
G r u p p o
A z i m u t
(853)
(485)
Statement of comprehensive income
01/01/16 to
30/06/16
01/01/15 to
30/06/15
2015
68,359
182,638
249,987
(106)
165
(60)
(1,243)
(1,190)
1,768
(784)
(4,679)
(9,003)
Total other comprehensive income/(expense), net of taxes
(2,133)
(5,704)
(7,295)
Comprehensive income
66,226
176,934
242,692
Consolidated comprehensive income attributable to minority interest
593
2,206
2,566
Consolidated comprehensive income attributable to parent company
65,633
174,728
240,126
Items
Profit for the period/year
Altre componenti reddituali al netto delle imposte senza rigiro a conto economico
Tangible assets
Intangible assets
Defined benefit plans
Non-current assets held for sale
Portion of valuation reserves of investments measured at equity
Other comprehensive income, net of taxes, transferred to profit or loss
Foreign investment hedge
Exchange rate differences
Cash flow hedge
Available-for-sale financial assets
Non-current assets held for sale
Portion of valuation reserves of investments measured at equity
On behalf of the Board of Directors
Chairman and Chief Executive Officer
(Pietro Giuliani)
35
Consolidated statement of changes in
shareholders’ equity at 30 june 2016
Allocation
of prior year profit
Items
Balance at
31.12.2015
Share capital
Share premium reserve
Changes in
opening balance
Balance at
01.01.2016
32,324
32,324
173,987
173,987
Reserves
Dividends and
other
distributions
Other reserves:
a) income-related
360,354
360,354
b) other
(80,173)
(80,173)
Valuation reserves
(7,776)
(7,776)
Equity instruments
71,459
71,459
Treasury shares
(80,727)
(80,727)
Profit (loss) for the period/year
247,421
247,421
(141,673)
(105,748)
Group shareholders’ equity
716,869
716,869
-
(105,748)
10,348
10,348
Shareholders’ equity attributable
to minority interest
36
G r u p p o
A z i m u t
141,673
Changes in
reserves
Changes during the year
Shareholders’ equity transactions
Issue of
new shares
Treasury
share
purchases
Extraordinary
dividend
distribution
Changes
in equity
instruments
Other
changes
Consolidated
comprehensive
income for the first
six months of 2016
Group
shareholders’
equity at
30/06/2016
Shareholders’
equity attributable
to minority interest
at 30/06/2016
32,324
35,597
173,987
502,027
106
(6,506)
(86,573)
(2,133)
(9,909)
(106)
(1,738)
(1,738)
721
71,353
630
-
(22,107)
(81,835)
67,766
67,766
(5,876)
65,633
669,140
3,863
593
593
14,804
On behalf of the Board of Directors
Chairman and Chief Executive Officer
(Pietro Giuliani)
37
Consolidated statement of changes in
shareholders’ equity at 31 december 2015
Allocation
of prior year profit
Items
Balance at
31.12.2015
Share capital
Share premium reserve
Changes in
opening balance
Balance at
01.01.2015
32.324
32.324
173.987
173.987
Reserves
Dividends and
other
distributions
Other reserves:
a) income-related
387.986
387.986
b) other
(38.927)
(38.927)
Valuation reserves
(481)
(481)
Equity instruments
71.715
71.715
(81.555)
(81.555)
Profit (loss) for the period/year
92.096
92.096
(92.096)
Group shareholders’ equity
637.145
637.145
(118.746)
6.772
6.772
Treasury shares
Shareholders’ equity attributable
to minority interest
38
G r u p p o
A z i m u t
(26.650)
Changes in
reserves
Changes during the year
Shareholders’ equity transactions
Issue of
new shares
Treasury
share
purchases
Extraordinary
dividend
distribution
Changes
in equity
instruments
Other
changes
Consolidated
comprehensive
income for the first
six months of 2016
Group
shareholders’
equity at
30/06/2016
Shareholders’
equity attributable
to minority interest
at 30/06/2016
32.384
20.001
173.987
255
(1.237)
360.354
(41.246)
(80.173)
(7.295)
(7.776)
(256)
(709)
(709)
(916)
71.459
1.537
(1)
(11.303)
(80.727)
247.421
247.421
(40.946)
240.126
716.869
1.010
2.566
2.566
10.348
On behalf of the Board of Directors
Chairman and Chief Executive Officer
(Pietro Giuliani)
39
Consolidated statement of changes in
shareholders’ equity at 30 june 2015
Allocation
of prior year profit
Items
Balance at
31/12/2014
Share capital
Share premium reserve
Changes in
opening balance
Balance at
01/01/2015
32,324
32,324
173,987
173,987
Reserves
Dividends and
other
distributions
Other reserves:
a) income-related
387,986
387,986
b) other
(38,927)
(38,927)
Valuation reserves
(481)
(481)
Equity instruments
71,715
71,715
(81,555)
(81,555)
Profit (loss) for the period/year
92,096
92,096
(92,096)
Group shareholders’ equity
637,145
637,145
(118,746)
6,772
6,772
Treasury shares
Shareholders’ equity attributable
to minority interest
40
G r u p p o
A z i m u t
(26,650)
Changes in
reserves
Changes during the year
Shareholders’ equity transactions
Issue of
new shares
Treasury
share
purchases
Extraordinary
dividend
distribution
Changes
in equity
instruments
Other
changes
Consolidated
comprehensive
income for the first
six months of 2015
Group
shareholders’
equity at
30/06/2015
Shareholders’
equity attributable
to minority interest
at 30/06/2015
32,324
16,392
173,987
361,336
(162)
(42,577)
(81,666)
(5,704)
(6,185)
(186)
90
71,529
1,125
(348)
(4,908)
(80,430)
180,432
180,432
(41,452)
174,728
651,327
4,802
2,206
2,206
13,780
On behalf of the Board of Directors
Chairman and Chief Executive Officer
(Pietro Giuliani)
41
Consolidatd cash flow statement
Indirect method
01/01/16 30/06/16
01/01/2015 30/06/2015
2015
1. Operations
14,280
54,744
145,550
- profit (loss) for the period/year (+/-)
68,359
180,432
249,987
-56,483
-112,989
-138,835
- profits/losses on hedging activities (-/+)
-
-
-
- net impairment losses (+/-)
-
-
-
5,953
4,339
10,312
3,095
1,148
2,479
-6,757
-20,333
20,690
-
-
-
113
2,147
917
-328,217
-1,131,038
-1,576,667
0
-
-
-267,531
-1,111,894
-1,527,577
- available-for-sale financial assets
-711
-2,289
-18
- due from banks
-791
-1,606
1,927
- due from financial institutions
-758
-1,335
1,104
1,411
48
-825
- other assets
-59,837
-13,962
-51,278
3. Cash generated from or used by financial liabilities
312,057
1,293,952
1,669,812
- due to banks
-10,199
-8,810
-8,369
-285
145
432
42
136
183
1,880
2,560
5,143
0
-
-
- financial liabilities measured at fair value
369,429
1,254,823
1,696,799
- technical reserves
-29,865
3,105
-19,283
- other liabilities
-18,946
41,993
-5,093
-1,880
217,658
238,695
A. OPERATING ACTIVITIES
- gains/losses on held-for-trading financial assets and financial assets/
liabilities measured at fair value (-/+)
- net impairment losses on tangible and intangible assets (+/-)
- net allowance to provisions for risks and charges and other expenses/income (+/-)
- tax and duties still to be paid (+)
- net impairment losses on assets held for sale, net of tax (+/-)
- other changes (+/-)
2. Cash generated from or used by financial assets
- held-for-trading financial assets
- financial assets measured at fair value
- due from clients
- due to financial institutions
- due to clients
- outstanding securities
- held-for-trading financial liabilities
Net cash generated from or used by operating activities
42
G r u p p o
A z i m u t
01/01/16 30/06/16
01/01/2015 30/06/2015
2015
1. Cash generated from:
-
-
-
- disposal of equity investments
-
-
-
- dividends
-
-
-
- disposal of held-to-maturity financial assets
-
-
-
- disposal of tangible assets
-
-
-
- disposal of intangible assets
-
-
-
- disposal of subsidiaries and business units
-
-
-
-39,433
-36,472
-56,411
-261
-484
-691
-
-
-
- purchase of tangible assets
-2,518
-1,668
-4,065
- purchase of intangible assets
-8,250
-3,564
-12,544
- purchase of subsidiaries and business units
-28,404
-30,756
-39,111
Net cash generated from or used by investment activities
-39,433
-36,472
-56,411
- issue/purchase of treasury shares
-1,108
1,125
1,537
- change in other reserves
-8,518
-48,443
-49,523
3,863
4,802
3,576
-106
-186
-256
- dividends and other distributions
-102,967
-118,746
-118,746
Net cash generated from or used by financing activities
-108,836
-161,448
-163,412
Net cash generated or used for the period/year
-150,149
19,738
18,872
01/01/16 30/06/16
01/01/2015 30/06/2015
2015
588,215
569,343
569,343
-150,149
19,738
18,872
438,066
589,081
588,215
B. INVESTMENT ACTIVITIES
2. Cash used by:
- purchase of equity investments
- purchase of held-to-maturity financial assets
C. FINANCING ACTIVITIES
- change in capital and reserves attributable to minority interest
- issue/purchase of equity instruments
RECONCILIATION
Opening cash and cash equivalents
Total net cash generated/used for the period/year
Closing cash and cash equivalents
Reference should be made to the paragraph on the “Consolidated net financial
position” of the Management Report for a breakdown of “Cash and cash
equivalents”.
On behalf of the Board of Directors
Chairman and Chief Executive Officer
(Pietro Giuliani)
43
44
G r u p p o
A z i m u t
Notes to the financial statements
45
Notes to the financial statements
Reporting criteria for condensed consolidated interim financial statements
and accounting standards
The condensed consolidated interim financial statements at 30 June 2016 comply
with the International Accounting Standards (IAS) / International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards
Board (IASB) and the related interpretations of the IFRS Interpretations
Committee, endorsed by the European Commission and in force on 30 June 2016,
implementing Italian Legislative Decree No. 38/2005 and Regulation (EC) No.
1606/2002, specifically IAS 34 - Interim Financial Reporting.
The condensed consolidated interim financial statements have been drawn up in
accordance with the instructions issued by the Bank of Italy: “Instructions for the
preparation of financial statements and interim reports of financial intermediaries,
payment institutions, electronic money institutions, fund management companies
(SGR) and investment firms (SIM)” of 15 December 2015. The Instructions lay
down the mandatory financial statements schedules formats and how they must
be filled in and the content of the notes thereto for financial companies that
are parent companies of investment firms groups, adequately adapted to best
represent the Group's financial position and business activities, which include,
not only an investment firm and an asset management company, but also the
Irish insurance company AZ Life Ltd. In particular, the balance sheet and income
statement include the items which are typical of the insurance business, taking as
a reference ISVAP (now IVASS) Regulation No. 7 dated 13 July 2007 concerning
the provisions governing the consolidated financial statements of insurance
companies drawn up on the basis of IAS/IFRS.
The condensed consolidated interim financial statements have also been drawn
up based on the interpretative documents on the application of IAS/IFRS in
Italy prepared by the Italian Accounting Standard Setter (OIC), and the ESMA
(European Securities and Markets Authority) and Consob (the Italian Commission
for Listed Companies and the Stock Exchange) documents which refer to specific
IAS/IFRS. In this respect, Consob communication No. 0007780/16 of 28 January
2016 on the most significant issues of financial reports at 31 December 2015 was
also considered.
These consolidated interim financial statements have been prepared in a
condensed format; consequently, they should be read together with the annual
financial statements at 31 December 2015.
In accordance with the provisions set forth in Article 5, paragraph 2 of Italian
Legislative Decree No. 38 dated 28 February 2005, the condensed consolidated
interim financial statements have been drawn up using the euro as the reporting
currency. Unless otherwise specified, the amounts shown in the financial statements
and the notes there to are in thousands of euros.
These condensed consolidated interim financial statements have been prepared
46
G r u p p o
A z i m u t
using the same accounting policies and methods applied to draw up the
consolidated financial statements at 31 December 2015, except for the application
of the international accounting standards that became effective on 1 January
2016 and described in the note “Accounting standards, amendments and
interpretations endorsed by the European Union and in force from 1 January
2016". It is comprised of the balance sheet, the income statement, the statement
of comprehensive income, the cash flow statement (prepared using the indirect
method), the statement of changes in shareholders’ equity and these notes.
These condensed consolidated interim financial statements have been prepared
based on the going concern assumption.
Financial, operating and other indicators1 have been considered which, as also
shown in the joint document issued on 6 February 2009 by the supervisory
authorities Bank of Italy, Consob and ISVAP (now IVASS), may highlight
problems that, if not taken into proper consideration, could compromise the
Group’s stability and ability to operate as a going concern.
Although the economic outlook remains uncertain, an overall valuation of the
past and current financial position of the Group, its operating guidelines, business
model and the risks to which the business activity is exposed2, leads us to believe
that there is no doubt that the Group can continue to operate on a going concern
basis for the foreseeable future.
The condensed consolidated interim financial statements have been prepared
clearly and give a true and fair view of the Group's financial position, results of
operations for the period, changes in shareholders' equity and cash flows.
Transactions and other corporate events have been recognised and presented
in accordance with the principle of substance over form. As stated above, the
condensed consolidated interim financial statements have also been prepared
based on the going concern assumption, on an accruals basis, based on the
commonly-used criteria of historic cost, save for the valuation of certain financial
assets and liabilities, in the cases where the fair value criterion must be applied.
Assets and liabilities, costs and income have not been offset against each other,
unless required or permitted by a standard or interpretation.
1
2
Examples of which are shown in Audit Standard No. 570 on “Going Concerns”.
As described in the Management Report to the financial statements at 31 December 2015 to which reference should be made.
47
Notes to the financial statements
Accounting standards, amendments and interpretations endorsed by the European Union
and in force from 1 January 2016.
The IAS/IFRS applied to prepare the Azimut Group's consolidated financial
statements, governing the classification, recognition, measurement and derecognition
criteria of asset and liability items and the recognition of income and expense are
those in force at the drafting date of the condensed consolidated interim financial
statements, as endorsed by the European Union.
For information on the classification, recognition, measurement and derecognition
criteria of the main items, reference should be made to that set out in Part A2. of the
Notes to the Azimut Group's consolidated financial statements at 31 December 2015.
In addition to that set out in Part A.2, following the completion of the endorsement
procedure, the following amendments to IAS/IFRS became effective on 1 January
2016.
Amendments
Endorsement
date
Date of coming
into force
12 August 2014
18 December 2015
1 January 2016
Amendments to IAS 1: Disclosure initiative
18 December 2014
18 December 2015
1 January 2016
Annual improvements to IFRS 2012-2014 cycle
25 September 2014
15 December 2015
1 January 2016
12 May 2014
2 December 2015
1 January 2016
6 May 2014
24 November 2015
1 January 2016
IASB publication date
Amendments to IAS 27: Equity method in separate
financial statements
Amendments to IAS 16 and IAS 38: Clarification of
acceptable methods of depreciation and amortisation
Amendments to IFRS 11: Acquisition of an interest
in a joint operation
The adoption of the above amendments has had no impact on the consolidation of the
Group's equity investments, financial position and results of operations for the period.
Accounting standards, amendments and interpretations which will come into force.
Standards
IFRS 14 “Regulatory deferral accounts”
IFRS 9 “Financial instruments”
IFRS 16 “Leases”
IFRS 15 “Revenue from contracts with customers”
and amendments
48
G r u p p o
IASB publication
date
Endorsement
date
Date of coming
into force
30 January 2014
n.a.*
n.a. *
24 July 2014
---
1 January 2018**
13 January 2016
---
1 January 2019**
28 May 2014 and
11 September 2015
A z i m u t
1 January 2018**
---
Amendments
IASB publication
date
Endorsement
date
Date of coming
into force
Amendments to IAS 12: Recognition of deferred tax
assets for unrealised losses
11 January 2016
---
1 January 2017**
Amendments to IAS 7: Disclosure initiative
29 January 2016
Amendments to IFRS 2: Classification and
measurement of share-based payment transactions
Clarifications
Clarifications to IFRS 15: Revenue from contracts
with customers
--1 January 2017**
20 June 2016
---
1 January 2018**
IASB publication
date
Endorsement
date
Date of coming
into force
12 April 2016
---
1 January 2018**
* The European Commission does not intend to start the endorsement process concerning IFRS 14 (interim standard) pending the publication of the final standard governing tariff-regulated activities.
** Date identified by IASB. Confirmation of the European Union's competent bodies is pending.
The Group will adopt the above standards, amendments and interpretations based
on the expected implementation date and will assess the potential impact once they
have been endorsed by the European Union.
Significant events after the reporting date
In July, the Group continued its product innovation thanks to the launch of two new
sub-funds (Equity Options and Convertible Bond) within the Luxembourg-based
umbrella fund AZ Fund 1. The former offers equity market exposure mainly through
stock market indices' options, including sector indices, whilst the latter invests mostly
in funds specialising in convertible bonds.
On 27 July 2016, Azimut Brasil Wealth Management Holding S.A. completed the
acquisition of 100% of BRZ Gestão de Patrimônio, a Brazilian wealth management
company with a proven track record on developing customised investment solutions
for Brazilian private investors. The transaction, which is not subject to the approval
by local authorities, entails a total disbursement of around 1.1 million euro (including
a price adjustment mechanism depending on future results).
These condensed consolidated interim financial report was authorised for publication
by Azimut Holding S.p.A.’s Board of Directors on 28 July 2016.
49
Notes to the financial statements
Other aspects
Use of estimates
The drafting of the condensed consolidated interim financial statements also entails
the use of estimates and assumptions that may have a significant impact on the
carrying amounts recognised in the balance sheet and the income statement, and
on the disclosure about contingent assets and liabilities. The computation of such
estimates is based on the use of available information and the adoption of subjective
assessments, also based on historical experience, used to develop reasonable
assumptions underlying the recognition of operations. These estimates and
assumptions, based on the best possible calculations by management, are revised
periodically and the effects of any changes are reflected directly in the income
statement. Estimates with a significant impact on these consolidated financial
statements relate to the impairment test on intangible assets (trademark, goodwill
and goodwill on consolidation), the recoverability of deferred tax assets, accruals to
hedge contingent liabilities for litigation, charges for supplementary indemnity for
clients to be paid to financial advisors, tax assessments underway and the financial
liabilities recognised in respect of the contractual commitments for the purchase of
the residual equity investments in some subsidiaries.
There is no other relevant information to be disclosed for reporting purposes.
Consolidation scope
and methods
The consolidated financial statements include the balance sheet and income
statement figures of Azimut Holding S.p.A. and the companies directly or indirectly
controlled by the latter.
Subsidiaries
The Azimut Group consolidation scope has been established in accordance with
IFRS 10. Specifically, subsidiaries are those companies in respect of which the
Azimut Group is exposed, or has rights, to variable returns from its involvement
with the investees and has the ability to affect those returns through its power over
the investees. Control exists only when the following elements simultaneously exist:
(1) the power to direct the relevant activities; (2) exposure, or rights, to variable
returns from involvement with the investee; (3) the ability to use its power over the
investee to affect the amount of its returns.
Associates
Associates are those companies subject to significant influence, i.e. companies in
which the Azimut Group, either directly or indirectly, holds at least 20% of the
voting rights (including “potential” voting rights) or in which - despite holding a
smaller percentage of voting rights - has the power to participate in the financial and
operating policy decisions, such as the participation in shareholders' agreements,
due to specific legal relationships.
These companies are consolidated using the equity method whereby on initial
recognition the investment is recognised at cost, and the carrying amount is increased
or decreased to recognise the investor’s share of the equity of the investee after the
date of acquisition, using the most recently approved financial statements of the
50
G r u p p o
A z i m u t
companies. The difference between the carrying amount of the equity investment
and the investee's share of equity is included in the carrying amount of the investee.
Compared to 31 December 2015, the consolidation scope changed as follows:
a)the consolidation of the following five Australian companies: RI Toowoomba
Pty Ltd, Empowered Financial Partners Pty Ltd, Wealthwise Pty Ltd,
Priority Advisory Group Pty Ltd and Sterling Planners Pty Ltd (purchased through the
Australian subsidiary AZ NGA).
The purchase agreements of the five companies provided for the exchange of the shares
of each company purchased with AZ NGA shares and the progressive repurchase of
these shares over the next ten years.The residual 51% (53% for Priority Advisory Group
Pty Ltd) will be paid in cash to the founding members over two years.
The difference between the fair value of the assets and liabilities purchased and the consideration paid to purchase the equity investments, totalling 14.5 million euro, was
allocated to goodwill.
b)the consolidation of the Australian company Sigma Funds Management Pty Ltd
purchased in April 2016 in which the parent has a 51% equity investment
through AZ International Holdings SA.
The difference between the fair value of the assets and liabilities purchased and the
consideration paid to purchase the equity investment, totalling 1.4 million euro,
was allocated to goodwill.
51
Notes to the financial statements
Wholly and jointly-owned
subsidiaries
Name
Registered
office
Type of
ownership (*)
Voting
rights %
Stake
Shareholder
% stake
Fully consolidated,
wholly-owned companies
1
Azimut Holding S.p.A.
51
51
1
Azimut Consulenza Sim S.p.A.
49
49
Italy
1
Azimut Holding S.p.A.
100
100
Luxembourg
1
Azimut Holding S.p.A.
51
51
Azimut Consulenza Sim S.p.A.
Italy
1. Azimut Capital Management SGR S.p.A.
2. Azimut Consulenza Sim S.p.A.
3. AZ Fund Management SA
4. AZ Life Ltd
Ireland
1
49
49
Azimut Holding S.p.A.
100
100
Azimut Holding S.p.A.
100
100
5.AZ Capital Management Ltd
in liquidation
Ireland
6. Azimut Enterprises Holding S.r.l.
Italy
1
Azimut Holding S.p.A.
100
100
7. Augustum Opus SIM S.p.A.
Italy
1
Azimut Holding S.p.A
51
51
8. Futurimpresa SGR S.p.A.
Italy
1
Azimut Holding S.p.A.
55
55
9. Azimut Financial Insurance S.p.A.
Italy
1
Azimut Holding S.p.A.
100
100
10. AZ International Holdings S.A.
Luxembourg
1
Azimut Holding S.p.A.
100
100
11. An Zhong (AZ) IM
Hong Kong
1
AZ International Holdings SA
100
100
12. An Zhong (AZ) IM HK
Hong Kong
1
An Zhong (AZ) IM
100
100
13. AZ Investment Management
Shanghai
1
An Zhong (AZ) IM
100
100
14. Compagnie de Gestion priveè Monegasque
Monaco
1
AZ International Holdings SA
51
51
15. CGM Italia SIM S.p.A.
Italy
1
Compagnie de Gestion priveè Monegasque
51
51
16. Katarsis Capital Advisors SA
Lugano
1
AZ International Holdings SA
100
100
17. Eskatos Capital Management Sarl
Luxembourg
1
Katarsis Capital Advisors SA
100
100
18. AZ Swiss & Partners SA (già AZ Swiss SA)
Lugano
1
AZ International Holdings SA
51
51
19. Azimut Global Counseling S.r.l.
Italy
1
Azimut Holding S.p.A.
100
100
20. AZ Sinopro Financial Planning Ltd
Taiwan
1
AZ International Holdings SA
51
51
21. AZ Sinopro Investment Planning Ltd
Taiwan
1
AZ Sinopro Financial Planning Ltd
51
51
22. AZ Sinopro Insurance Planning Ltd
Taiwan
1
AZ Sinopro Financial Planning Ltd
51
51
23. Atheneaum Ltd
Singapore
1
AZ International Holdings SA
100
100
24. AZ Brasil Holdings Ltda
Brazil
1
AZ International Holdings SA
100
100
25. AZ Legan Participações S.A.
Brazil
92
92
52
G r u p p o
1
AZ Brazil Holdings Ltda
A z i m u t
Name
Registered
office
Type of
ownership (*)
Stake
Shareholder
Votin
rights %
% stake
Fully consolidated,
wholly-owned companies
26. AZ Legan Administração de Recursos Ltda.
Brazil
1
AZ Legan Participações S.A.
91,5
91,5
27. Quest Partecipacoes S.A.
Brazil
1
AZ Brasil Holdings Ltda
60
60
28. Quest Investimentos Ltda
Brazil
1
Quest Partecipacoes S.A.
60
60
29. Azimut Brasil Wealth Management Holding S.A. (formerly AZ FI Holdings)
Brazil
1
AZ Brasil Holdings Ltda
100
100
30. M&O Consultoria Ltda
Brazil
1
Azimut Brasil WM Holding SA
100
100
31. Futurainvest Gestão de Recursos Ltda
Brazil
1
Azimut Brasil WM Holding SA
100
100
32. AZ Notus Portfoy Yonetimi A.S.
Turkey
1
AZ International Holdings SA
100
100
33. Azimut Portfoy AS
Turkey
1
AZ International Holdings SA
100
100
34. AZ Mexico Holdings S.A. de CV
((formerlyAZ Profie SA)
Mexico
1
AZ International Holdings SA
94,20
94,20
35. Mas Fondos S.A.
Mexico
1
AZ Mexico Holdings S.A
de CV ((formerly AZ Profie SA)
94,20
94,20
36. Next Generation Advisory PTY Ltd
Australia
1
AZ International Holdings SA
52,13
52,13
37. Eureka Whittaker Macnaught PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
38. Pride Advice PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
39. Lifestyle Financial Planning Services (LFPS) PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
40. Eureka Financial Group PTY Ltd
Australia
1
Next Generation Advisory PTY
52,13
52,13
41. Pride Financial PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
42. Wise Planners PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
43. Financial Lifestyle Partners PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
44. Harvest Wealth PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
45. RI Toowoomba PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
46. Empowered Financial Partners PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
47. Wealthwise PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
48. Priority Advisory Group PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
49. Sterling Planners PTY Ltd
Australia
1
Next Generation Advisory PTY Ltd
52,13
52,13
50. AZ Sestante Ltd ((formerly Ironbark Funds
Management (RE) Ltd
Australia
1
AZ International Holdings SA
76
76
51.AZ Andes S.p.A.
Chile
1
AZ International Holdings SA
90
90
52. Sigma Funds Management PTY Ltd
Australia
1
AZ International Holdings SA
51
51
53. AZ US Holding Inc.
United States
1
AZ International Holdings SA
100
100
54. AZ Apice Capital Management LLC
United States
1
AZ US Holding Inc.
70
70
(*) Type of ownership:
(1) majority of voting rights at ordinary shareholders’ meetings
53
Notes to the financial statements
Associates measured at equity
Registered
office
Name
Voting
rights %
Stake
Shareholder
% Stake
1 . SiamoSoci srl
Italy
Azimut Enterprises Holding S.r.l.
22
22
2. Azimut Brasil Wealth Management Ltds
(formerly LFI Participações S.A.)
Brazil
Azimut Brasil Wealth Management
Holding S.A. (già AZ FI Holdings)
50
50
Significant valuations
and assumptions used to
determine the consolidation scope
•
•
•
Unit linked
Furthermore, the line-by-line consolidation scope excludes the Unit Linked Funds
(insurance internal funds) ("Unit linked") in which the Azimut Group does not
hold any equity investment and to which the IFRS 10 definition of control does not
apply. Indeed, these are negligible investments in terms of company capitalisation
With respect to the mutual funds underlying the Unit Linked Funds, the Azimut
Group checks that the these conditions do not apply. Indeed, it believes that:
it does not hold the outstanding majority units;
it does not have full power over the investment entity (funds) since it is
limited by funds' regulations governing asset allocation and operational policies;
it is not significantly exposed to the variable returns from the investment
entity since the profits or losses from the measurement of Unit Linked assets
are entirely paid to policyholders by adjusting the mathematical reserve.
The exposure to the changes in the value of the Group's funds is limited
to the change in terms of fee impact. Specifically, the Group is exposed
to the risk of changes in entry fees and charges on premiums, linked to the
performance of inflows, the management fees related to assets under management
and the incentive fees linked to the performance of the managed funds.
Wholly-owned subsidiaries
with significant
non-controlling interests
In 2015, the Azimut Group, through AZ NGA, an holding company set up in
November 2014, launched a series of acquisitions in Australia which continued
throughout the first half of 2016. The relevant agreements provide for the following:
(i) the exchange of shares with AZ NGA shares and the progressive repurchase
of said shares in the next ten years, equal to 49% of each company and (ii) a
cash payment to founding members over two years for the residual 51% (53% for
Priority Advisory Group Pty Ltd).
Significant restrictions
There are no significant legal, contractual or regulatory restrictions within the
Azimut Group which may limit the parent's ability to transfer cash and cash
equivalents or other assets to other Group companies, or guarantees which may
limit the distribution of dividends, capital or loans and advances granted or repaid
to other Group companies.
54
G r u p p o
A z i m u t
Basis of consolidation
Investments in subsidiaries are consolidated on a line-by-line basis, while interests
in jointly-controlled entities and associates are measured using the equity method.
Line-by-line method
Under this consolidation method, the companies' balance sheet and income
statements figures are consolidated line-by-line. The carrying amount of equity
investments is offset against the residual equity of the subsidiary after allocating
the relevant portions of equity and profit or loss to non-controlling interests.
Positive differences are recognised under "Intangible assets", e.g., goodwill, after
allocation to the subsidiary's asset or liability items, where necessary. Conversely,
negative differences are taken to profit or loss.
For the purposes of consolidation, the financial statements at 30 June 2016 of
consolidated companies were used. They were prepared in accordance with the
IFRS and Group criteria to which they make reference. The financial statements
used are those prepared by the Boards of Directors of each company, duly
reclassified and adjusted to comply with the above standards and criteria. The
data about individual financial statements are obtained through the information
included in the reporting packages at 30 June 2016.
The Parent Company financial statements and those of the subsidiaries have
been consolidated on a line-by-line basis, including all subsidiaries and assuming
all assets, liabilities, costs and income of each subsidiary, while eliminating the
carrying amount of the equity investments against the relevant share/quotaholders'
equity, as set out by the IFRS.
The assets, liabilities, costs and income generated by transactions among
consolidated companies have been eliminated in full, as have the profits and
losses generated by transactions among consolidated companies which do not
involve third parties.
The positive differences between the carrying amount of the equity investments
consolidated on a line-by-line basis and the related fair value of the acquired
assets and liabilities were considered as goodwill on consolidation and tested for
impairment to check the adequacy of the amount recognised.
For consolidated companies that prepare their financial statements in a functional
currency different from that of the Parent Company, the amounts expressed in
currencies other than the euro were translated as follows: for the balance sheet,
using the closing rate (30 June 2016), and for the income statement, using the
average exchange rate for the period. The differences arising from the translation
of opening shareholders’ equity using period-end exchange rates, along with those
triggered by the use of period-end and average exchange rates are classified under
the specific item “Exchange rate differences” in the valuation reserve.
55
Other information
Notes to the financial statements
Equity method
The investees over which the Group exerts significant influence or has joint
control, as defined by IAS 28, are measured using the equity method.
Under this method, the investee is initially recognised at cost and the carrying
amount is increased or decreased to reflect the parent's share of profit or loss earned/
incurred after the acquisition date. The share of the profit (loss) for the period
attributable to the parent is recognised in the consolidated income statement. The
dividends received from an investee decrease the carrying amount of the equity
investment. Furthermore, the carrying amount may be adjusted also following
the change in the percentage of investment in the investee, due to changes in the
latter's equity not recognised in the income statement. These changes include those
arising from the translation of foreign currency items. The portion related to these
changes is recognised directly in equity. When the investee incurs losses and these
losses exceed its carrying amount, the latter amount is zeroed and any further
losses are recognised only when the parent has legal or constructive obligations or
has made payments on behalf of the investee. If the investee subsequently earns a
profit, the parent recognises the share of profit attributable to it only when it has
reached the same amount of the previously unrecognised loss.
The consolidation of associates and/or jointly controlled entities considers the
financial statements prepared in accordance with the Group's accounting policies
and approved by the Board of Directors of each company.
Compagnie de Gestion privèe Monegasque SAM and CGM Italia Sim S.p.A.
With respect to the consolidation of Compagnie de Gestion privèe Monegasque
SAM and CGM Italia Sim S.p.A., in accordance with IFRS 10, they were
consolidated on a line-by-line basis based on the contracts which, as agreed by the
parties, assign to Azimut the economic benefits of the above companies and enable
it to fully control them, as of 30 December 2011, being the date of acquisition of
51% of Compagnie de Gestion privèe Monegasque SAM.
Based on the above, in the consolidated financial statements of the Azimut Group,
the residual 49% of the company's share capital is represented as a financial
liability measured at fair value, to the extent of the amount to be paid for the
purchase (the amount of which depends on a contractually agreed consideration).
Business combinations carried out in the first half of 2016
At the reporting date, the activities related to the implementation of IFRS 3 and
the fair value calculation of the assets and liabilities of the companies acquired
in the first half of 2016 are still underway. In this respect, IFRS 3 allows the
provisional allocation of acquisition costs, provided that completion takes place
within twelve months of the acquisition date.
56
G r u p p o
A z i m u t
In accordance with the provisions of IFRS 7 and IFRS 13, the Group companies
classify fair value measurement of their financial assets and liabilities based
on a hierarchy that conveys the nature of inputs used. The levels are as follows:
• Level 1: (unadjusted) quoted prices in active markets for assets and liabilities
identical to those subject to valuation;
• Level 2: inputs other than unadjusted quoted prices that are directly (as in the case
of prices) or indirectly (deriving from prices) observable market data;
• Level 3: inputs based on unobservable market data.
Specifically, the fair value of a financial instrument measured at Level 1 corresponds
to the unadjusted price, at which the instrument – or an identical instrument – is
sold on an active market on the measurement date. For classification at Level 1,
prices are measured together with all other characteristics of the financial asset or
financial liability: if the quoted price is adjusted in order to take account of specific
conditions that require adjustment, the financial instrument is classified under a
level other than Level 1.
Analyses for classification at other levels within the fair value hierarchy are
performed analytically for each individual financial asset or liability held
issued; these analyses and measurement criteria are applied consistently over time.
With respect to the financial instruments held as part of liquidity management
policies and financial liabilities issued, according to the Group's main policies:
•government bonds and open-ended investment funds, whose fair value is
designated as Level 1 if represented by the Net Asset Value (NAV) provided
by the fund manager at the measurement date, are classified as Level 1;
conversely, with respect to listed funds and Exchange Traded Funds (ETF),
Level 1 fair value is equal to the closing price of the relevant stock market, and
the liquidity to be invested relating to unit-linked policies issued;
• the investments related to the unit-linked policies issued (where the investment
risk is borne by policyholders), the associated financial liabilities and the bonds
issued are classified as Level 2;
• the securities reported as “available-for-sale financial assets” measured at cost and
the commitments to purchase the residual equity investments in some subsidiaries
in accordance with ruling contractual agreements fall under Level 3 and are
classified under "Financial liabilities measured at fair value". With respect to
these liabilities, the measurement reflects the discounted amount to be paid to the
non-controlling interests.
This amount is based on the estimate of key parameters (future income
statement, balance sheet and financial position parameters of the subsidiaries
set out in the relevant contracts), and are subject to specific sensitivity analyses.
The changes in the amount of the liabilities on first recognition are taken to
the income statement. Financial liabilities are derecognised after settlement.
57
Fair value hierarchy
Notes to the financial statements
Transfers between portfolios
Disclosure about transfers
between portfolios
The Group did not transfer any financial assets between portfolios during the
period.
Fair value hierarchy
Quantitative information
Accounting portfolios: breakdown by fair value level
Financial assets/liabilities measured
at fair value
Level 1
Level 2 Level 3
Total
1. Held-for-trading financial assets
2. Financial assets measured at fair value
3. Available-for-sale financial assets
4. Hedging derivatives
Total
92,622
8,115
315,301
407,923
5,982,336
5,889,714
323,416
5,889,714
8,115 6,305,752
5,730,426
78,866 5,809,292
5,730,426
78,866 5,809,292
1. Held-for-trading financial liabilities
2. Financial liabilities measured at fair value
3. Hedging derivatives
Total
58
G r u p p o
A z i m u t
Annual changes in financial assets measured at Level 3 fair value on a recurring basis
FINANCIAL ASSETS
Held for trading Measured at Available for
fair value
sale
1. Opening balance
2,314
2. Increases
5,801
2.1. Purchases
Hedging
assets
83
2.2. Profits allocated to:
2.2.1 Profit or loss
of which: gains
2.2.2 Shareholders’ equity
7
2.3. Transfers from other levels
2.4. Other increases
5,711
3. Decreases
3.1. Sales
3.2. Redemptions
3.3. Losses charged to:
3.3.1 Profit or loss
of which: losses
3.3.2 Shareholders’ equity
3.4. Transfers from other levels
3.5. Other decreases
4. Closing balance
8,115
59
Tangible
assets
Intangible
assets
Notes to the financial statements
Annual changes in liabilities measured at Level 3 fair value on a recurring basis
Held-for-trading
financial liabilities
Hedging
Financial liabilities
measured at fair value derivatives
1. Opening balance
62,488
2. Increases
16,960
2.1. Purchases
11,192
2.2. Losses charged to:
2.2.1 Profit or loss
of which: losses
2.2.2 Shareholders’ equity
5,768
907
907
4,861
2.3. Transfers from other levels
2.4. Other increases
3. Decreases
582
3.1. Sales
330
3.2. Redemptions
3.3. Profits allocated to:
3.3.1 Profit or loss
25
of which: gains
25
3.3.2 Shareholders’ equity
227
252
3.4. Transfers from other levels
3.5. Other decreases
78,866
4. Closing balance
Operating segment
disclosure (IFRS 8)
Given the small size of the foreign companies under AZ International Holdings
SA, the Azimut Group’s business is mainly attributable to the companies directly
controlled by Azimut Holding S.p.A. and, though this business is conducted
through numerous companies, each specialising in the distribution, promotion and
management of financial and insurance products (essentially unit-linked products),
it is attributable to a single operating segment.
As a matter of fact, the nature of the various products and services offered, the
structure of the management and operating processes, the type of clients, as well as
the methods adopted for the distribution of products and services are sufficiently
similar as to ensure that the risks and benefits do not differ to any great extent but,
on the contrary, have many comparable features.
Furthermore, the business model of the operating companies directly controlled
by Azimut Holding S.p.A. is distinguished by the strong interaction between
management and distribution activities.
The distribution network is able to steer clients towards products that enable the
management team to best exploit the market time and, on the other hand, the
excellent track record of portfolio management enables the distribution network
60
G r u p p o
A z i m u t
to further penetrate the market.
Therefore, these companies operate as a single structure, dedicated in its entirety
to asset management and the sale of investment instruments, in which the
contributions made by the individual companies appear to be indistinguishable
and whose operating results are revised periodically by management for the
purpose of decisions regarding the allocation of resources and measurement of
results and company performance.
Consequently, the accounting information has not been disclosed separately
for each operating segment, in line with the internal reporting system used by
management and based on the accounting data of the above companies used
to draw up the consolidated financial statements in accordance with IAS/IFRS.
Similarly, no information is provided on revenue per client and non-current assets
broken down by geographical area, or information on each individual client’s
relationship with the company as management believes this is of little relevance
in terms of disclosure.
Therefore, given that there is only one operating segment subject to disclosure, as
regards information on income from clients by product/service, please see details
on fee income and net premiums reported with data from the income statement
included in these notes.
AZ International Holding SA acts as the incubator in order to develop research,
acquisition and management of the new foreign partnerships.
Earnings per share
Basic earnings per share are calculated by dividing the net profit for the period by
the average number of outstanding ordinary shares.
There were no earnings-dilutive transactions to be disclosed at 30 June 2016.
Basic earnings per share (*)
30/06/2016
0.510
31/12/2015
1.842
Average number of outstanding shares (*)
132,855,511
132,868,491
0.510
1.842
132,855,511
132,868,491
Diluted earnings per share (*)
Average number of outstanding shares (*)
* outstanding shares are calculated net of treasury shares held by Azimut Holding S.p.A. at the reporting date.
61
Notes to the financial statements
Notes to the balance sheet
ASSETS
Cash and cash equivalents
Cash and cash equivalents amount to 31 thousand euro and refer to cash on hand.
Financial assets measured
at fair value
The balance amounts to 5,982,336 thousand euro (5,658,322 thousand euro at 31
December 2015 and 5,216,793 thousand euro at 30 June 2015).
Breakdown of “Financial assets measured at fair value”
Items/Value
Total 30/06/2016
Level
1
Total 31/12/2015
Level
2
Level
3
Level
1
92,622 5,889,714
-
54,476 5,603,846
92,622 5,889,714
-
54,476 5,603,846
Total 30/06/2015
Level Level
2
3
Level
1
Level
2
Level
3
-
45,578 5,171,215
-
-
45,578 5,171,215
-
1. Debt securities
- structured securities
- other debt securities
2. Equity securities
3. UCI units
4. Loans
Total
“UCI units” Level 2 refers solely to investments measured at fair value, relating
to unit-linked policies issued by AZ Life Ltd, where the investment risk is borne
by policyholders.
62
G r u p p o
A z i m u t
The balance amounts to 323,416 thousand euro (365,910 thousand euro at 31 December
2015 and 398,728 thousand euro at 30 June 2015). The breakdown is as follows:
Available-for-sale
financial assets
Breakdown of “Available-for-sale financial assets”
Items/Value
1. Debt securities
Total 30/06/2016
Total 31/12/2015
Total 30/06/2015
Level
1
Level
2
Level
3
Level
1
Level
2
Level
3
Level
1
Level
2
Level
3
1,163
-
-
2,149
-
-
2,470
-
-
- structured securities
- other debt securities
2,149
1,163
2. Equity securities
3. UCI units
2,470
8,115
4,320
2,314
391,938
361,447
314,138
4. Loans
Total
315,301
-
8,115
363,596
-
2,314
“UCI units” Level 1 refers to the units in investment funds managed by the Azimut
Group as part of the Group’s liquidity management policies.
Available-for-sale financial assets: breakdown by debtor/issuer
Total
30/06/2016
Total
31/12/2015
Total
30/06/2015
1. Debt securities
1,163
2,149
2,470
a) Governments and central banks
1,163
2,149
2,470
2. Equity securities
8,115
2,314
4,320
a) Banks
1,030
1,030
1,030
374
284
2,290
6,711
1,000
1,000
314,138
361,447
391,938
323,416
365,910
398,728
Items/Value
b) Other public bodies
c) Banks
d) Financial institutions
e) Other issuers
b) Financial institutions
c) Other issuers
3. UCI units
4. Loans
a) Banks
b) Financial institutions
c) Clients
Total
63
394,408
-
4,320
Notes to the financial statements
Available-for-sale financial assets - changes of the period
Debt
securities
Equity
securities
UCI units
Loans
Total
2,149
2,314
361,447
-
365,910
B. Increases
-
5,801
84,911
-
90,712
B1. Purchases
-
84
81,132
-
81,216
B2. Increases in fair value
-
7
2,276
-
2,283
B3. Write-ups
-
-
-
-
-
- taken to profit or loss
-
-
-
-
-
- taken to shareholders’ equity
-
-
-
-
-
B4. Transfers from other portfolios
-
-
-
-
-
B5. Other changes
-
5,711
1,503
-
7,214
C. Decreases
986
-
132,220
-
133,206
C1. Sales
655
-
127,804
-
128,459
C2. Redemptions
312
-
-
-
312
18
-
4,217
-
4,235
C4. Write-downs
-
-
-
-
-
C5. Transfers to other portfolios
-
-
-
-
-
C6. Other changes
-
-
199
-
199
1,163
8,115
314,138
-
323,416
Change/type
A. Opening balance
C3. Decreases in fair value
D. Closing balance
The 5,711 thousand euro included under other changes in Equity securities mainly
refers to the reclassification of the residual investment in Programma 101 SICAF
S.p.A. (formerly Programma 101 S.p.A.) from Equity investments; during the first
half of the year, the Bank of Italy authorised the company to register with the
SICAF (closed-end investment companies) register.
64
G r u p p o
A z i m u t
Due from banks
The balance amounts to 68,249 thousand euro (162,458 thousand euro at
31 December 2015 and 145,928 thousand euro at 30 June 2015).
Receivables
The breakdown is as follows:
Breakdown
Total 30/06/2016
Carrying
amount
Fair value
Total 31/12/2015
Carrying
amount
L1 L2 L3
Fair value
Total 30/06/2015
Carrying
amount
L1 L2 L3
Fair value
L1 L2 L3
1. Loans
11.1 Depositsand current accounts
1.2. Receivables for services
66,575 66,575
1,673
1,673
143,006 143,006
161,576 161,576
882
2,922
882
-
2,922
-
145,928 145,928
-
1.3. Repurchase agreements
- of which for government securities
- of which for other debt securities
- of which for equity securities
1.4. Other loans
2. Debt securities
- structured securities
- other debt securities
Total
68,249 68,249
162,458 162,458
“Deposits and current accounts” are composed of cash deposited in the current
accounts of the Group companies, with interest in line with that applied to term
deposits.
65
Notes to the financial statements
Due from financial institutions
The balance amounts to 8,078 thousand euro (7,320 thousand euro at 31 December 2015
and 9,759 thousand euro at 30 June 2015).
The breakdown is as follows:
Breakdown
Total 30/06/2016
Carrying
amount
Total 31/12/2015
Total 30/06/2015
Fair value Carrying
amount
Fair value
L1 L2 L3
L1 L2 L3
Carrying
amount
Fair value
L1 L2 L3
1. Loans
1.1 Deposits and current accounts
8,078
1.2. Receivables for services
8,078
7,320
7,320
-
9,759
9.759
-
8,078
7,320
7,320
-
9,759
9.759
-
1.3. Repurchase agreements
- of which for government securities
- of which for other debt securities
- of which for equity securities
1.4. Other loans
2. Debt securities
- structured securities
- other debt securities
Total
8,078
“Receivables for services - sale of products” mainly include receivables in the
form of fees and commissions from the sale of products of third-party banks and
receivables in the form of fee income to be collected for the sale of insurance
products of third-party companies.
66
G r u p p o
A z i m u t
Due from clients
The balance amounts to 59,988 thousand euro (68,257 thousand euro at 31
December 2015 and 57,462 thousand euro at 30 June 2015).
Breakdown
Total 30/06/2016
Carrying
amount
Fair value
Total 31/12/2015
Carrying
amount
L1 L2 L3
Total 30/06/2015
Fair value Carrying
amount
L1 L2 L3
Fair value
L1 L2 L3
1. Finanziamenti
3,829
1.1 Deposits and current accounts
1.2. Receivables for services
3,829
56,159 56,159
5,240
5,240
4,367
4,367
63,017 63,017
53,094 53,094
-
68,257 68,257
57,462 57,462
-
1.3. Repurchase agreements
- of which for government securities
- of which for other debt securities
- of which for equity securities
1.4. Other loans
2. Debt securities
- structured securities
- other debt securities
Total
59,988 59,988
“Receivables for services” includes receivables in the form of fee and commission
income on mutual funds and discretionary funds accrued during June 2016 and
collected the following month.
Due from financial advisors
This item posts a balance of 16,177 thousand euro (15,027 thousand euro at
31 December 2015 and 16,621 thousand euro at 30 June 2015) and is mainly
represented by loans disbursed to financial advisors of 11,839 thousand euro,
which generate interest income in line with the Euribor rate plus a spread, in
addition to advances on commissions paid to said financial advisors, amounting to
4,040 thousand euro.
The terms for repayment of these loans vary on average from 12 to 36 months.
67
Notes to the financial statements
Equity investments
The balance amounts to 2,914 thousand euro (7,744 thousand euro at 31 December
2015 and 8,022 thousand euro at 30 June 2015).
Equity investments: Information
Name
Registered office
Stake
Voting
rights %
Shareholder
% stake
Azimut Enterprises Holding S.r.l.
22
22
Azimut Brasil Wealth
Management Holding S.A.
(prima AZ FI Holdings)
50
50
Associates measured at equity
Italy
1. SiamoSoci srl
Brazil
2. Azimut Brasil Wealth Management
Ltds (formerly LFI Participações S.A.)
Changes for the period in equity investments
Total value
7,744
A. Opening balance
B. Increases
883
B.1 Purchases
41
B.2 Write-ups
0
B.3 Revaluations
0
B.4 Other changes
842
C. Decreases
5,713
C.1 Sales
0
C.2 Write-downs
2
C.3 Other changes
5,711
D. Closing balance
2,914
The 5,711 thousand euro included under Other changes is due to the reclassification
of the equity investment in Programma 101 to “Available-for-sale financial assets”.
Significant equity investments: accounting figures
Name
Carrying amount
Fair value (*)
Dividends received
145
145
-
2,728
2,728
-
1. SiamoSoci srl
2. LFI Participações S.A.
(*) As these companies are not listed, fair value coincides with the carrying amount.
68
G r u p p o
A z i m u t
-
Tangible assets amount to 7,698 thousand euro (6,199 thousand euro at 31 December 2015
and 4,731 thousand euro at 30 June 2015).
Tangible assets
Breakdown of “Tangible assets - business purposes: breakdown of assets at cost”
Items/Value
Total 30/06/2016
Assets
at cost
1. Company-owned
Assets
at fair value
or revalued
Total 31/12/2015
Assets
at cost
Assets
at fair value
or revalued
Total 30/06/2015
Assets
at cost
7,698
6,199
4,731
161
166
170
2,185
1,516
1,343
5,352
4,517
3,218
7,698
6,199
4,731
a) land
b) buildings
c) furniture & fixtures
d) capital goods
e) other
2. Under finance lease
a) land
b) buildings
c) furniture & fixtures
d) capital goods
e) other
Total
(assets at cost and revalued)
69
Assets
at fair value
or revalued
Notes to the financial statements
Tangible assets - business purposes: changes of the period
Land
A. Opening gross balance
Buildings
Furniture &
fixtures
Plant Other
Total
293
7,187
15,354
22,834
166
1,516
4,517
6,199
-
1,103
1,788
2,891
1,044
1,705
2,749
59
83
142
434
953
1,393
29
29
186
827
1,019
248
97
345
293
8,289
17,113
25,696
161
2,184
5,352
7,698
A.1 Total net impairment losses
A.2 Opening net balances
B. Increases
B.1 Purchases
B.2 Leasehold improvements
B.3 Write-ups
B.4 Increases in fair value taken to:
a) shareholders’ equity
b) profit or loss
B.5 Exchange rate gains
B.6 Transfers from investment property
B.7 Altre variazioni
5
C. Decreases
C.1 Sales
5
C.2 Depreciation
C.3 Impairment losses charged to:
a) shareholders’ equity
b) profit or loss
C.4 Decreases in fair value charged to:
a) shareholders’ equity
b) profit or loss
C.5 Exchange rate losses
C.6 Transfers to:
a) assets held for investment purposes
b) assets held for sale
C.7 Other changes
D. Gross closing balance
D.1 Total net impairment losses
D.2 Net closing balance
E. Measurement at cost
70
G r u p p o
A z i m u t
The balance amounts to 481,252 thousand euro (449,532 thousand euro at
31 December 2015 and 425,554 thousand euro at 30 June 2015).
Intangible assets
Breakdown of “Intangible assets”
Total 30/06/2016
Assets
at cost
1. Goodwill and goodwill
on consolidation
2. Other intangible assets
Assets
at fair value
Total 31/12/2015
Assets
at cost
Assets
at fair value
Total 30/06/2015
Assets
at cost
424,453
396,049
376,007
56,799
53,483
49,547
56,799
53,483
49,547
481,252
449,532
425,554
2. Other intangible assets
2.2 other
Total
With respect to the equity investments acquired during the period, the difference
between the acquisition cost and the fair value of the net assets acquired at the
relevant acquisition dates, included under “goodwill on consolidation”, refers to:
•
the acquisition by AZ International Holdings SA of RI Toowoomba
against a consideration of 2,571 thousand euro;
•the acquisition by AZ International Holdings SA of Empowered Financial
Partners Pty Ltd against a consideration of 1,802 thousand euro;
•the acquisition by AZ International Holdings SA of Wealthwise Pty Ltd
against a consideration of 2,949 thousand euro;
•the acquisition by AZ International Holdings SA of Sigma Funds Management Pty Ltd
against a consideration of 1,442 thousand euro;
•the acquisition by AZ International Holdings SA of Priority Advisory Group Pty Ltd
against a consideration of 4,389 thousand euro;
•the acquisition by AZ International Holdings SA of Sterling Planners Pty Ltd
against a consideration of 2,719 thousand euro.
“Other intangible assets – Other” refer to:
•the “Azimut” trademark amounting to 35,338 thousand euro;
•Software totalling 19,356 thousand euro.
71
Assets
at fair value
Notes to the financial statements
“Intangible assets”: changes in the period
Total
449,532
A. Opening balance
B. Increases
36,655
B.1 Purchases
8,251
B.2 Write-ups
0
B.3 Increases in fair value taken to:
0
- shareholders’ equity
0
- income statement
0
B.4 Other changes
28,404
C. Decreases
4,934
C.1 Sales
0
C.2 Amortisation
4,934
C.3 Write-downs charged to:
0
- shareholders’ equity
0
- income statement
0
C.4 Decreases in fair value charged to:
0
- shareholders’ equity
0
- income statement
0
C.5 Other changes
0
D. Closing balance
Impairment test
481,252
Impairment test
At the reporting date of the condensed consolidated interim financial statements
there is no evidence that the impairment test on goodwill, trademark and goodwill
on consolidation performed for the purpose of the consolidated financial statements
as at 31 December 2015 requires updating, as this test confirmed the fairness of
the amounts posted. Reference should be made to this test for more information.
72
G r u p p o
A z i m u t
Tax assets
and tax liabilities
Tax assets
This item amounts to 89,028 thousand euro (72,680 thousand euro at 31 December
2015 and 73,092 thousand euro at 30 June 2015). The breakdown is as follows:
Breakdown of “Tax assets: current and deferred"
Breakdown
Total 30/06/2016
Total 31/12/2015
Total 30/06/2015
Current
50,725
44,855
51,643
Deferred
38,303
27,825
21,449
Total
89,028
72,680
73,092
“Current tax assets” mainly refers to non-offset IRES and IRAP tax credits for the
year 2016.
“Deferred tax assets” mainly include:
•7,242 thousand euro of deferred tax assets arising from the value of the lease
instalments deductible in future years by virtue of the sale and lease-back
agreement for the Azimut trademark;
•9,077 thousand euro to deferred tax assets relating to tax losses;
•1,693 thousand euro of deferred tax assets relating to the adjustment of the
book and tax value (IRAP) of the trademark and goodwill pursuant to Article 1,
paragraph 51 of Italian Law 244/2007 (2008 Budget Law) and offset against
future tax liabilities arising from amortisation and other negative items deducted
off the balance sheet (as indicated in EC section of the Modello Unico tax
return) up until the tax year underway at 31 December 2007;
•20,291 thousand euro as timing differences resulting from the different timing
criteria of IRES and IRAP tax deductibility for some cost items compared
to that reported in the income statement.
As regards deferred tax assets recognised on tax losses, in accordance with IAS 12, the
probability of these losses being recovered in subsequent tax years was assessed. Based on
the assumptions pursuant to current tax regulations, the ability of future taxable income,
at Group level, comprising the companies which have adopted the tax consolidation
regime, was assessed, generating the recognition of deferred tax assets on losses.
73
Notes to the financial statements
Tax liabilities
Tax liabilities stand at 65,588 thousand euro (60,224 thousand euro at 31 December
2015 and 66,039 thousand euro at 30 June 2015). The breakdown is as follows:
Breakdown of “Tax liabilities: current and deferred”:
Breakdown
Total 30/06/2016
Total 31/12/2015
Total 30/06/2015
Current
9,441
1,790
8,515
Deferred
56,147
58,434
57,524
Total
65,588
60,224
66,039
“Current tax liabilities” include the provisions for IRAP tax payable by Azimut
Holding S.p.A. and Azimut Capital Management SGR S.p.A., for IRES tax
payables as well as tax payables of the Group’s foreign companies net of the tax
advances paid.
“Deferred tax liabilities” mainly include deferred tax liabilities relating to the
temporary difference between the carrying amount and tax value of the trademark
amounting to 11,686 thousand euro and the deferred tax liabilities recognised on
the temporary difference between the carrying amount and tax value of goodwill
of 39,922 thousand euro.
These tax liabilities, recognised in accordance with IAS 12, are not reasonably
expected to become actual costs given that the aforementioned temporary
differences will only be reduced following a negative impairment test that leads to
the recognition of an impairment loss on goodwill and the trademark and in the
case of disposal of these assets. Moreover, this item includes deferred IRES and
IRAP taxes on unallocated earnings of the subsidiaries at 30 June 2016.
Other assets
The balance amounts to 189,414 thousand euro (132,766 thousand euro at 31
December 2015 and 79,609 thousand euro at 30 June 2015).
Breakdown of “Other assets”
Breakdown
Total 30/06/2016
Total 31/12/2015
Total 30/06/2015
154,707
92,271
44,908
569
31,912
21,398
13,138
8,583
13,303
189,414
132,766
79,609
Due from Inland Revenue
Other receivables
Prepayments
Total
"Due from Inland Revenue" includes VAT credits of 6,162 thousand euro and
amounts related to mathematical reserves of 60,252 thousand euro.
“Prepayments” include commission expense, which does not pertain to the current
year, for the sale of No Load products.
These products do not charge an entry fee but break even within 36 months in the
case of mutual funds and the Star, Pleiadi and AZ Style insurance products and
74
G r u p p o
A z i m u t
18 months in the case of hedge funds.
“Prepayments” also include the assets generated via the deferral of acquisition
costs for unit-linked policies issued by the Group’s Irish insurance company,
classified as investment contracts.
Payables
Payables stand at 89,601 thousand euro (96,688 thousand euro at 31 December
2015 and 96,111 thousand euro at 30 June 2015). The breakdown is as follows:
Liabilities
“Payables” (due to banks, financial institutions and clients)
Total 30/06/2016
Items
Due to
banks
1. Loans
Total 31/12/2015
Due to Due to
financial clients
institutions
20,000
Due to
banks
Total 30/06/2015
Due to Due to
financial clients
institutions
Due to
banks
30,096
30,233
30,096
30,233
Due to Due to
financial clients
institutions
1.1 Repurchase agreements
- of which for government securities
- of which for other debt securities
- of which for equity securities
1.2 Loans
2. Other payables
Total
20,000
3,156
739
657
3,163
1,024
614
2,622
737
568
23,156
739
657
33,259
1,024
614
32,855
737
568
Fair value L1
-
Fair value L2
Fair value L3
23,156
739
657
33,259
1,024
614
32,855
737
568
Total Fair value
23,156
739
657
33,259
1,024
614
32,855
737
568
“Loans” include:
• a loan of 20,000 thousand euro granted by Banco Popolare on 22 April 2008
and divided into two lines, A and B, each originally amounting to 100 million euro.
The credit lines are repayable in instalments and expire on 30 June 2013 and
30 June 2018 respectively, with the interest rate calculated based on the Euribor
plus 115 basis points for Line A and 125 basis points for Line B.
The loan is not subject to covenants nor express termination clause.
“Other payables” mainly include commissions accrued and to be settled for the
sale of fund units.
75
Notes to the financial statements
Due to financial advisors:
The balance amounts to 65,049 thousand euro (61,791 thousand euro at 31 December
2015 and 61,951 thousand euro at 30 June 2015). It mainly includes amounts due
to financial advisors for commissions of June 2016 paid in July 2016, in addition to
other accruals relating to the first half 2016, which will be paid during the year, and
other contractual commitments for commissions, including loyalty commissions, to
be paid to financial advisors over the medium-long term.
Outstanding securities
Liabilities
Breakdown of “Outstanding securities”
Total 30/06/2016
Total 31/12/2015
Fair value
Carrying
amount
L1
Fair value
Carrying
amount
L2 L3
L1
Total 30/06/2015
Fair value
Carrying
amount
L2 L3
L1
L2 L3
1. Securities
- bonds
223,723
223,723
221,826
236,431
219,226
230,967
223,723
223,723
221,826
236,431
219,226
230,967
223,723
223,723
221,826
236,431
219,226
230,967
- structured
- other
- other securities
- structured
- other
Total
The item is entirely comprised of a:
1. convertible bond “Azimut 2013-2020 Convertibile 2,125%” amounting to 223,723
thousand euro originally composed of 2,500 bonds worth 100,000 euro with
a duration of seven years. The amount refers to total bonds sold and includes the
charges incurred by the Parent Company for the issue and placement, in addition
to interest expense accrued at 30 June 2016 which will be paid on the pre
established date. Convertible bonds bear gross annual interest of 2.125% and can be
converted into Azimut Holding S.p.A. ordinary shares (newly issued and/or
existing) from the fourth year and forty-fifth day after the issue to 20 days prior to the
maturity date.
The conversion price is set at 24.26 euro. In accordance with IAS 32 and based
on that set out in the section on Accounting standards, the total debt component
of this financial instrument was 214,312 thousand euro calculated on 25 November
2013 (issue date), whereas the equity component amounted to 35,688 thousand euro.
76
G r u p p o
A z i m u t
Subordinated securities
This category comprises the bond described earlier.
The balance amounts to 250,994 thousand euro (280,859 thousand euro at 31
December 2015 and 303,247 thousand euro at 30 June 2015) and refers to the
commitments arising from the unit-linked policies issued by the subsidiary company
AZ Life Ltd, classified as insurance contracts.
Technical reserves where
the investment risk is borne
by policyholders
This item amounts to 5,809,292 thousand euro (5,439,863 thousand euro at
31 December 2015 and 4,997,887 at 30 June 2015) and mainly includes the
commitments arising from the unit-linked policies issued by the subsidiary AZ Life
Ltd, classified as investment contracts (level 2).
It also includes financial liabilities measured at fair value, liabilities related to the
future exercise of the call options for the residual portion of the share capital of
some companies that were acquired, but are not wholly owned. They are listed
below:
Financial liabilities
measured at fair value
Fair value
measurement
30/06/2016
1,391
Fair value
measurement
31/12/2015
1,416
564
540
1,695
1,624
16
16
Wise Planners
1,673
1,645
Financial Lifestyle Parthers
1,252
1,227
Harvest Wealth
1,225
1,204
RI Toowoomba
2,247
-
727
-
Wealthwise
3,610
-
Priority Advisory Group
3,551
-
Sterling Planners Pty Ltd
1,170
-
AZ Brasil Holdings Ltda
1,309
1,074
AZ Quest Partecipacoe SA
27,404
22,408
Compagnie de Géstion Privée Monegasque
18,110
18,110
1,071
1,137
-
330
78,866
62,448
Company
Eureka Whittaker Macnaught
Pride Advice
Lifestyle Financial Planning Services
AZ Sestante
Empowered Financial Partners
Mas Fondos S.A.
Athenaeum Ltd
Total
77
With respect to measurement, the amount reflects the discounted amount to be paid
- in Azimut Holding shares, where contractually provided for - to non-controlling
interests, following the exercise of the call options. The measurement reflects an
estimate of the discounted amount to be paid to the seller.
This amount is based on the estimate of key parameters (future income statement,
balance sheet and financial position parameters set out in the relevant contracts),
that are subject to specific sensitivity analyses.
With respect to the Sigma transaction and the related call options of the residual
49% thereof, the obligation to exchange the issuer's shares against the acquisition
of a financial asset indicates the existence of a derivative.
Fair value changes in the latter are to be allocated to the income statement.
This position is currently being analysed by the IFRIC.
Financial liabilities measured at fair value and the related measurement at 30 June
2016 led to the recognition of losses of 882 thousand euro under “Net result of
financial assets and financial liabilities measured at fair value”.
Tax liabilities
“Tax liabilities” are described in detail in the section on "Tax assets" of these notes
to which reference should be made.
Other liabilities
Other liabilities amount to 72,525 thousand euro (89,209 thousand euro at 31
December 2015 and 59,531 thousand euro at 30 June 2015).
The breakdown is as follows:
Breakdown/Value
Total
30/06/2016
32,933
Total
31/12/2015
27,012
Total
30/06/2015
21,396
Due to Inland Revenue
4,441
10,475
7,278
Due to employees
3,799
4,804
3,596
Due to social security bodies
3,553
4,153
3,612
Other payables
24,798
39,619
20,277
Deferred income
3,001
3,146
3,373
72,525
89,209
59,531
Due to suppliers
Total
“Deferred income” includes liabilities arising from the deferral of commission
income on the premiums of unit-linked policies issued by the Irish insurance
company AZ Life Ltd, classified as investment contracts.
78
G r u p p o
A z i m u t
“Staff severance pay” amounts to 3,429 thousand euro (3,311 thousand euro at
31 December 2015 and 2,939 thousand euro at 30 June 2015) and refers to TFR
accrued by personnel employed by the Group companies at 30 June 2016.
Staff severance pay (TFR)
The balance amounts to 29,135 thousand euro (26,694 thousand euro at 31
December 2015 and 25,927 thousand euro at 30 June 2015).
Provisions for risks and
charges
Breakdown of “Provisions for risks and charges”
•Supplementary indemnity provision for agents established based on actuarial
criteria, in accordance with IFRS, totalling 24,367 thousand euro.
•Other provisions (4,768 thousand euro) for potential legal disputes with
clients, for the present value of the estimated expense to settle the obligations.
Breakdown of “Share Capital”
Types of shares
1. Share capital
1.1 Ordinary shares
Shareholders’ Equity
Total
32,324
32,324
1.2 Other shares
-
At 30 June 2016, the fully paid-up and subscribed share capital was composed of
143,254,497 ordinary shares, with a total value of 32,324 thousand euro.
Breakdown of “Treasury shares”
Types of shares
1. Treasury shares
1.1 Ordinary shares
1.2 Other shares
Total
81,835
81,835
At 30 June 2016, Azimut Holding S.p.A. held 10,433,589 treasury shares at an
average carrying amount of 7.283 euro per share.
79
Notes to the financial statements
Breakdown of “Equity instruments”
This item amounted to 71,353 euro at 30 June 2016 and relates to:
• at the issue amount, as per the Shareholders' resolution of 29 April 2010, of 1,500,000
profit-participating financial instruments recognised in the previous year for a total of
36,000 thousand euro (equal to their fair value calculated by an independent
leading company);
• the equity component of the convertible bond, recognised on 25 November 2013
upon issue of the convertible bond at 34,949 thousand euro, calculated on a residual
basis as the difference between the fair value of the bond, as a whole, and the fair
value of the debt component. The costs borne by Azimut Holding S.p.A. for the bond
issue are allocated proportionally to the debt component and the equity component;
•the equity component of the subordinated bond, recognised upon issue at the
fair value of the relevant warrants (3,515 thousand euro), net of the warrants
exercised up to 30 June 2016. At the reporting date, the warrants' residual value
is 406 thousand euro.
Breakdown of “Share premium reserve”
“Share premium reserve” amounted to 173,987 thousand euro at 30 June 2016.
Other information
Breakdown and changes in “Reserves”
Legal reserve
Other reserves
Total
6,465
273,716
280,181
B. Increases
-
141,673
141,673
B.1 Profit appropriations
-
141,673
141,673
B.2 Other changes
-
-
-
C. Decreases
-
6,400
6,400
C.1 Allocations
-
-
-
- loss account reserve
-
-
-
- dividends
-
-
-
- transfers to share capital
-
-
-
C.2 Other changes
-
6,400
6,400
6,465
408,989
415,454
A. Opening balance
D. Closing balance
80
G r u p p o
A z i m u t
Breakdown of “Minority interest”
Items/Value
Minority interest
30/06/2016
31/12/2015
30/06/2015
35,597
20,001
16,392
-22,107
-11,303
-4,908
6. Valuation reserves
722
-915
90
7. Profit (loss) for the period/year
593
2,566
2,206
14,804
10,348
13,780
1. Share capital
2. Treasury shares
3. Equity instruments
4. Share premium reserve
5. Reserves
Total
Minority interest relate to stakes held by third parties.
Notes to the income statement
Breakdown of "Net result of financial assets and financial liabilities measured
at fair value"
Items/Income items
Gains
Profits on
disposal
Net result of financial assets
and financial liabilities
measured at fair value
Losses
Losses on
disposal
Net
result
1. Financial assets
1.1 Debt securities
1.2 Equity securities and UCI units
1.3 Loans
2. Financial assets and financial liabilities: exchange differences
3. Financial liabilities
25
(907)
(882)
25
(907)
(882)
3.1 Payables
3.2 Debt securities
3.3 Other liabilities
4. Credit and financial derivatives
Total
81
Notes to the financial statements
Fees and commissions
Breakdown of “Fee and commission income”
The breakdown is as follows:
Breakdown
1H2016
1H2015
Total 2015
1. Trading on own account
-
-
-
2. Execution of orders on behalf of clients
-
-
-
15,345
18,077
27,794
310
413
623
15,035
17,664
27,171
-
-
-
- collective portfolio management
9,576
12,856
18,581
- insurance products
3,578
3,272
5,110
- other
1,881
1,536
3,480
4. Portfolio management
271,906
375,168
637,812
- own account
269,660
371,068
632,173
2,246
4,101
5,639
197
204
404
6. Investment advisory
-
-
-
7. Financial structure advisory
-
-
-
8. Management of multilateral trading facilities
-
-
-
9. Custody and management
-
-
-
10. Currency trading
-
-
-
10,461
1,317
7,077
297,909
394,767
673,086
3. Sales and distribution
- securities
- third party services:
- portfolio management
- on behalf of third parties
5. Order receipt and transmission
11. Other services
Total
82
G r u p p o
A z i m u t
Breakdown of “Fee and commission expense”
Breakdown
1H2016
1H2015
Total 2015
1.Trading on own account
-
-
-
2.Execution of orders on behalf of clients
-
-
-
-140.032
-126.163
-261.365
-
-
-
- third party services:
-140.032
-126.163
-261.365
- portfolio management
-138.218
-124.371
-258.139
- other
-1.814
-1.792
-3.226
4.Portfolio management
-4.075
-6.581
-7.902
- own account
-4.075
-6.581
-7.902
-
-
-
5.Order intake
-219
-261
-504
6.Investment advisory
-673
-1.108
-2.199
7.Custody and management
-
-
-
8.Other services
-
-
-
10.Currency trading
-
-
-
-144.999
-134.112
-271.970
3.Sales and distribution
- securities
- on behalf of third parties
Total
83
Notes to the financial statements
Interest
Breakdown of “Interest and similar income”
The balance amounts to 679 thousand euro (1,781 thousand euro at 31 December
2015 and 1,068 thousand euro at 30 June 2015).
Items/Technical forms
Debt
securities
Repurchase
agreements
Other
1H2016
1H2015
Total
2015
1. Held-for-trading financial assets
-
-
-
-
-
-
2. Financial assets measured at fair value
-
-
-
-
-
-
3. Available-for-sale financial assets
-
-
24
24
-
-
4. Held-to-maturity financial assets
-
-
-
-
-
-
471
471
941
1,532
471
471
941
1,532
-
-
-
-
-
-
-
-
184
184
127
249
-
-
-
-
679
679
1,068
1,781
5. Receivables
-
-
5.1 Due from banks
-
-
5.2 Due from financial institutions
-
-
5.3 Due from clients
-
-
6. Other assets
-
-
7. Hedging derivatives
-
-
Total
-
-
The item “Other assets” includes interest accrued on loans granted to financial
advisors.
Breakdown of “Interest expense and similar charges”
The balance amounts to 5,730 thousand euro (11,237 thousand euro at 31 December
2015 and 5,605 thousand euro at 30 June 2015).
Items/Technical forms
Repurchase
agreements
Other
loans
Securities Other
272
1. Due to banks
Total
Total
Total
01/01/2016 01/01/2015 31/12/2015
30/06/2016 30/06/2015
272
339
541
2. Due to financial institutions
62
3. Due to clients
5,333
4. Outstanding securities
5,333
5218
10,542
125
125
47
93
125
5,730
5,605
11,237
5. Held-for-trading financial liabilities
6. Financial liabilities measured at fair value
7. Other liabilities
8. Hedging derivatives
272
Total
5,333
“Due to banks - other loans” is mainly composed of interest charges arising from
the loans raised by the Parent Company.
84
G r u p p o
A z i m u t
Net premiums amount to 727 thousand euro (5,070 thousand euro at 31 December
2015 and 2,629 thousand euro at 30 June 2015) for premiums relating to unitlinked policies issued by the Irish insurance company AZ Life Ltd, classified as
insurance contracts.
Net premiums
The item stands at 57,369 thousand euro (129,147 thousand euro at 31 December
2015 and 78,063 thousand euro at 30 June 2015) and is composed of realised gains
and losses and changes in the value of financial assets and liabilities, relating to
unit-linked policies, and designated at fair value.
Net profits (losses) on
financial instruments at fair
value through profit or loss
Breakdown of “Personnel costs”
The balance amounts to 33,633 thousand euro (62,094 thousand euro at 31
December 2015 and 34,819 thousand euro at 30 June 2015). The breakdown is as
follows:
Administrative costs
Items
1H2016
1H2015
Total 2015
1.Employees
-24,376
-19,472
-38,097
a) wages and salaries
-18,960
-14,692
-29,043
b) social security
-3,322
-3,352
-5,983
c) staff severance pay (TFR)
-
-
-
d) pension contributions
-
-
-
e) TFR provisions
-405
-391
-770
f) accrual to the pension provision and similar obligations:
-
-
-
- defined contribution
-
-
-
- defined benefit
-
-
-
g) private pension plans:
-31
-33
-61
- defined contribution
-31
-33
-61
-
-
-
h) other expenses
-1,658
-1,004
-2,240
2. Other personnel
-505
-511
-1,224
-8,752
-14,836
-22,773
4. Early retirement costs
-
-
-
5. Cost recoveries for employees seconded to other companies
-
-
-
6. Reimbursed costs for employees seconded to the company
-
-
-
-33,633
-34,819
-62,094
- defined benefit
3. Directors and Statutory Auditors
Total
85
Notes to the financial statements
Average number of employees by category
30/06/2016
30/06/2015
2015
94
70
81
Middle managers
121
98
105
Other employees
292
215
252
Total
507
383
438
Managers
Breakdown of “Other administrative costs”
The balance amounts to 54,715 thousand euro (95,742 thousand euro at 31 December
2015 and 42,608 thousand euro at 30 June 2015). The breakdown is as follows:
Items
1H2016
1H2015
Total 2015
Professional services
-5,508
-5,840
-13,364
Advertising, promotion and marketing expenses
-4,820
-5,143
-10,022
-995
-1,043
-2,282
-3,619
-2,785
-6,128
Lease and rent
-655
-581
-1,207
Insurance premiums
-986
-436
-944
Tax liabilities
-4,549
-4,256
-6,934
Lease and hire
-3,524
-2,183
-4,768
-21,028
-13,761
-34,346
-920
-788
-1,098
-8,111
-5,792
-14,648
-54,715
-42,608
-95,742
Telephone and fax
Enasarco/Firr contributions
Outsourcing and EDP services
Maintenance costs
Other administrative costs
Total
The increase of this item is almost entirely attributable to the following factors:
• the increased use of external providers for non-core activities for Italian and foreign
Group companies;
• the costs to strengthen, increase the efficiency and streamline information systems,
specifically the applications supporting the business in Italy and abroad, which led
to the rise in costs for intangible assets in the balance sheet.
86
G r u p p o
A z i m u t
Net impairment and write-ups of tangible assets based on depreciation at 30 June 2016
are broken down as follows:
Net impairment/write-ups
of tangible assets
Breakdown of “Net impairment/write-ups of tangible assets”
Items/Impairment
and write-ups
Depreciation
Impairment losses Write-ups Net result
1. Group-owned
1,019
1,019
- business purposes
1,019
1,019
1,019
1,019
- investment purposes
2. Under finance lease
- business purposes
- investment purposes
Total
Net impairment and write-ups of intangible assets based on amortisation at 30 June
2016 are broken down as follows:
Net impairment/write-ups
of intangible assets
Breakdown of “Net impairment/write-ups of intangible assets”
Items/Impairment
and write-ups
Amortisation
Impairment losses
Write-ups
Net result
1. Goodwill
2. Other intangible assets
4,934
4,934
2.1 Group-owned
4,934
4,934
4,934
4,934
4,934
4,934
- generated internally
- other
2.2 Under finance lease
Total
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Notes to the financial statements
Income tax on profit from
continuing operations
Breakdown of “Income tax on profit from continuing operations”
Total
01/01/2016
30/06/2016
Total
01/01/2015
30/06/2015
Total
31/12/2015
9,890
17,503
23,463
(10,498)
961
(1,895)
(2,068)
5,657
6,624
(2,676)
24,121
28,192
1. Current taxes
2. Changes in current taxes of previous periods/years
3. Decrease in current taxes for the period/year
3.-bis Reduction in current taxes for the period/year due to tax credits
pursuant to Italian Law 214/2011
4. Change in deferred tax assets
5. Change in deferred tax liabilities
Taxes for the period/year
Current income taxes for the period mainly refer to IRAP and IRES paid by
the Group’s Italian companies, taxes payable by the foreign companies as well
as the income from tax consolidation amounting to the taxes receivable and due
on taxable income transferred to the parent company by the Group’s Italian
subsidiaries that have adopted the tax consolidation regime pursuant to Article
117 of Italian Presidential Decree 917/86.
Taxes for the Group’s foreign companies are calculated in accordance with the tax
regulations in force in the individual countries of residence.
“Change in deferred tax assets” includes the release of deferred tax assets on
the amount of the lease instalment deductible during the period, the posting of
deferred tax assets on temporary differences resulting from the different timing
criteria of IRES tax deductibility.
“Change in deferred tax liabilities” mainly includes deferred tax liabilities, in line
with IAS 12, related to the timing differences between the carrying amount and
the tax value of goodwill.
These tax liabilities are not expected to become actual costs given that the
aforementioned temporary differences will be reduced only following a negative
impairment test result that leads to a write-down of goodwill and the trademark
and in the case of disposal.
The same item also includes the deferred tax liabilities on dividends to be paid by
the subsidiaries within the scope of consolidation.
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This item is positive by 593 thousand euro (2,206 thousand euro at 30 June 2015
and 2,566 thousand euro at 31 December 2015) and reflects the net balance of
profits and losses attributable to minority interests in consolidated companies.
Profit (loss) for the
period/year attributable to
minority interest
Interest rate risk
Qualitative information
Information on risk
management and hedging
policies
Market risks
The interest rate risk refers to the loan granted to Azimut Holding S.p.A. by
Banco Popolare on 22 April 2008, amounting to 200 million euro, and composed
of two Lines, A and B, each amounting to 100 million euro, which provides for the
Euribor plus 115 basis points for Line A and 125 basis points for Line B.
At 30 June 2016, only Line B remains for a residual amount of 20 million euro and
expiring on 30 June 2018. Indeed, Line A was fully repaid in 2013.
Considering the loan's time horizon to expiry, the company decided not to enter
into any hedges against the interest rate risk.
Conversely, there are no interest rate risks since the bond was issued by Azimut
Holding S.p.A. at a fixed rate of 2.125%.
Price risk
Qualitative information
The proprietary trading portfolios of the Azimut Group companies contain
financial instruments subject to financial risk exclusively composed of mutual
funds managed by Azimut Group companies and government securities, in the
context of the Group’s liquidity management policies.
As for financial assets measured at fair value at 30 June 2016, totalling 5,871
million euro, considering the fact that they refer to investments relating to unitlinked policies issued by AZ Life Ltd, where the investment risk is borne by
policyholders, the financial risk for the Group is not expected to be significant.
As regards the risks linked to the investment held in Eskatos - AZ Multistrategy
ILS Fund (a fund of “Eskatos S.C.A., SICAV-FIS), this UCITS is an asset that is
completely uncorrelated with the normal risks that instruments usually present on
the market are subject to. The yield of the Eskatos – AZ Multistrategy ILS Fund
was positive during the period, as well as in the first few months of 2016.
Specifically, the assessment is performed by periodically checking that the
management of the Eskatos - AZ Multistrategy ILS Fund (a sub-fund of “Eskatos
S.C.A. SICAV-FIS”) applies adequate measurement techniques in line with the
specific characteristics of the portfolio and implements the processes necessary to
ensure that the risks associated to the instruments invested by the fund and the
relevant contributions to the portfolio total risk are identified based on sound and
reliable qualitative and quantitative information, while considering the actuarial
peculiarities of the insurance-linked securities; moreover, it should carry out stress
89
Notes to the financial statements
tests and scenario analyses to identify any potential risks associated to significant
events related to the value of the fund portfolio or part of it.
As regards the Assessment Procedure for the management of financial assets on
behalf of third parties, the Risk Management Function plays a significant role.
This service involves both performing ex ante and ex post evaluations of the
risk profiles of the various managed portfolios and providing the Investment
Department with an ex ante market risk evaluation procedure. Specifically, the
assessment is performed by analysing the portfolios of the individual Funds and
on-going monitoring of the significant risk factors identified, such as the average
financial duration, exposure to various asset classes and financial instruments,
currency exposure and the credit rating of the issuers.
The assessment of the Fund’s risk profile is performed ex-post both in absolute
terms (volatility understood as the standard annual deviation) and in relative terms
compared to the benchmark (tracking error volatility). The Risk Management
Function uses external providers to calculate the Value at Risk (VaR) of all the
portfolios managed with regard to the ex-ante evaluation of the market risk.
Where necessary, the VaR represents the basis for the establishment of the limits
within which the manager may accept the risk. In addition, the Risk Management
function monitors the development of the risk models adopted and the return of
the funds in relation to peers and the benchmark, where disclosed.
Currency risk
The portfolio is mainly comprised of funds in euros, not exposed to the currency
risk.
Operational risk
Qualitative information
This form of risk includes those that are typical of the various business operating
procedures.
The Risk Management function “maps out” the risks in the broader framework
of its own activities, preparing and constantly maintaining an up-to-date database
of the risks identified. This is then discussed by the Internal Control and Risk
Management Committee, which analyses the risks at Group level.
Activities which show significant risk values are analysed and assessed by this
Committee and, if required, the necessary action is subsequently taken.
For more information, please see the section “Key uncertainties” for Azimut
Holding and the Group in the 2015 consolidated financial statements.
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Credit risk
As for credit risk, there are no specific problems given the nature of the company’s
activity.
Liquidity risk
Qualitative information
•
•
•
Liquidity risk arises when the company is unable to gain access under reasonable
economic conditions to the financial resources required to ensure its efficiency.
The main factors that determine liquidity levels are the resources provided
from or used by administrative and investment activities, as well as loan expiry
and renewal or liquidity of investments and market conditions.
The Company has adopted a set of policies and procedures aimed at streamlining
the management of financial resources, reducing this risk by means of:
cash flow management and payment based on Group-wide policy;
maintaining an adequate level of liquidity available thanks to constant positive
cash flow generation;
monitoring prospective liquidity conditions during planning procedure.
The financial risks associated with use of liquidity refer to bond and money market
mutual funds, as well as flexible funds, characterised by low volatility of mark to
market accounting and low exposure to liquidity, currency and credit risks.
Azimut Group's net financial position is a positive 194,343 thousand euro
(31 December 2015: 336,293 thousand euro): for additional information and a
breakdown of current/non-current financial receivables/payables, reference
should be made to the Management Report paragraph on “Consolidated net
financial position”.
91
Notes to the financial statements
Information on Shareholders' Company equity
Qualitative information
Equity
As regards the individual items of the consolidated shareholders’ equity, please see the
relevant description in these notes.
Quantitative information
Company equity: breakdown
Items/Value
30/06/2016
31/12/2015
30/06/2015
32,324
32,324
32,324
2. Share premium reserve
173,987
173,987
173,987
3. Reserves
415,454
280,181
279,670
6,465
6,465
6,465
d) other
495,562
353,889
354,871
- other
-86,573
(80,173)
(81,666)
4. (Treasury shares)
-81,835
(80,727)
(80,430)
5. Valuation reserves
-9,909
(7,776)
(6,185)
Available-for-sale financial assets
-8,125
(7,341)
(3,392)
-1,243
1
(2,957)
-541
(435)
164
0
-
-
6. Equity instruments
71,353
71,459
71,529
7. Profit (loss) for the period/year
67,766
247,421
180,432
669,140
716,869
651,327
1. Share capital
- income-related
a) legal
b) statutory
c) treasury shares
- Tangible assets
- Intangible assets
- Foreign investment hedge
- Cash flow hedge
- Exchange rate differences
- Non-current assets held for sale and discontinued operations
- Special revaluation laws
- Actuarial gains/losses on defined benefit plans
- Share of valuation reserves for investments measured at equity
Total
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Statement of comprehensive income
Items
Pre-tax
profit
Income tax
Net profit
10. Profit for the period/year
65.683
2.676
68.359
-146
40
-106
-146
40
-106
Other comprehensive items not transferred through profit or loss
20. Tangible assets
30. Intangible assets
40. Defined benefit plans
50. Non-current assets held for sale
60. Share of valuation reserves of investments measured at equity
Other comprehensive items transferred through profit or loss
70. Foreign investment hedge:
a) changes in fair value
b) transfer through profit or loss
c) other changes
80. Exchange rate differences:
a) changes in fair value
b) transfer through profit or loss
c) other changes
90. Cash flow hedge:
a) changes in fair value
b) transfer through profit or loss
c) other changes
100. Available-for-sale financial assets:
a) changes in carrying amount
b) transfer through profit or loss
- impairment losses
-1.243
-1.243
-1.243
-1.243
-1.173
389
-784
-2.051
441
-1.610
878
-52
826
- profits/losses on disposal
c) other changes
110. Non-current assets held for sale:
a) changes in fair value
b) transfer through profit or loss
c) other changes
93
Notes to the financial statements
Items
Pre-tax
profit
Income tax
Net profit
130. Total other comprehensive income
-2,562
429
-2,133
140. Comprehensive income (Items 10+130)
63,121
3,105
66,226
150. Consolidated comprehensive income attributable to minority interest
882
-289
593
160. Consolidated comprehensive income attributable to parent company
62,239
3,394
65,633
120. Share of valuation reserves of investments
measured at equity:
a) changes in fair value
b) transfer through profit or loss
- impairment losses
- profits/losses on disposal
c) other changes
Related party transactions
Information on key management fees
Directors' fees amounted to 8,705 thousand euro in the first half of 2016.
Fees for the Board of Statutory Auditors, calculated based on the parameters in force,
amounted to 479 thousand euro.
Loans and guarantees issued to Directors and Statutory Auditors
At 30 June 2016 no guarantees had been issued to directors and statutory auditors.
Information on related party transactions
Related party transactions referring to commercial transactions carried out
by Azimut Holding S.p.A. with its subsidiaries and associates, as well as among
its subsidiaries and/or associates during the first half of 2016, are part of the Group's
ordinary business and were conducted on an arm’s length basis.
Moreover:
• for use of the trademark, the subsidiaries Azimut Capital Management SGR S.p.A.
and Azimut Consulenza SIM S.p.A. pay Azimut Holding S.p.A. annual royalties
totalling 2,000 thousand euro, established by contract;
•Azimut Holding S.p.A., as the parent company, Azimut Capital Management
SGR S.p.A. and Azimut Consulenza SIM S.p.A., as subsidiaries, have
adopted the tax consolidation regime. In light of this arrangement,
the subsidiaries pay the Company or receive from the Company an amount
equivalent to the taxes arising from their respective taxable income;
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G r u p p o
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•a contractually established annual fee (totalling 1,000 thousand euro) is
payable for the coordination activities carried out by the Parent Company
on behalf of the subsidiaries Azimut Capital Management SGR S.p.A.
and Azimut Consulenza SIM S.p.A.;
•Azimut Holding S.p.A. has issued guarantees to the subsidiary Azimut
Consulenza SIM S.p.A.
Azimut Consulenza SIM S.p.A. has disbursed loans to several financial advisors,
identified as related parties, to develop their business.
The terms and conditions of these loans are at arm’s length.
At 30 June 2016, they amounted to 11,839 thousand euro.
Moreover, the directors of the Group who also act as managers of mutual
funds are exempt from paying fees and commissions on any personal investments
made in the funds they manage.
With respect to profit-participating financial instruments, in accordance with
Shareholders' resolutions, 13 key directors subscribed 231,101 instruments (paying
the corresponding amount), including the Chairman and Chief Executive Officer
Pietro Giuliani (78,650), the Co-Chief Executive Officers Marco Malcontenti (33,000)
e Antonella Mungo (33,000), the directors Andrea Aliberti (15,000), Paolo Martini
(25,000), Marzio Zocca (15,000), Gianpiero Gallizioli (3,903) and Silvia Scandurra
(1,548). As per the Shareholders' agreement related to Azimut Holding S.p.A.,
944 related parties subscribed a total of 1,476,096 profit-participating instruments.
Following the call option exercised by Azimut Holding S.p.A. in May 2016, at the
reporting date, the company held 23,904 profit-participating financial instruments.
The following table shows the impact that the transactions or positions with related
parties have on the Group’s financial position and results of operations:
Total
Related parties
Absolute value
%
152,492
16,177
10,61
72,525
6,226
8,58
88,348
9,571
10,83
Assets
Receivables
Liabilities
Other liabilities
Income statement
Administrative costs
These amounts are shown in detail in the corresponding notes to the balance sheet
and income statement.
95
Notes to the financial statements
Other information
Average number of financial advisors
In the first half of 2016, the average number of financial advisors amounted to 1595.
Dividends paid
The ordinary dividend for 2016 amounted to 0.5 euro per share and was paid in May 2016.
Significant non-recurring events and transactions
The non-recurring significant events and transactions which marked the first half of 2016
refer to the acquisitions carried out through the subsidiary AZ International Holding SA.
There were no atypical and/or unusual transactions.
On behalf of the Board of Directors
Chairman and CEO
(Pietro Giuliani)
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G r u p p o
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Certification of the condensed consolidated
interim financial statements pursuant to article
154-bis of Italian Legislative Decree No. 58/98
1. The undersigned, Pietro Giuliani, Chairman of the Board of Directors and Chief
Executive Officer, and Alessandro Zambotti, manager in charge of financial
reporting of Azimut Holding S.p.A., hereby represent, having also taken into
account the provisions of Article 154-bis, paragraphs 3 and 4 of Italian Legislative
Decree No. 58 of 24 February 1998:
• the adequacy in view of the nature of the business and
• the effective application
of the administrative and accounting procedures used for the preparation of the
condensed consolidated interim financial statements for the first half of 2016.
2. The evaluation of the adequacy of the administrative and accounting procedures
for the preparation of the condensed consolidated interim financial statements
at 30 June 2016 is based on a system drafted by Azimut Holding, in accordance
with the Internal Control – Integrated Framework model issued by the Committee
of Sponsoring Organizations of the Treadway Commission, an internationally
accepted reference framework.
3. The undersigned also represent that:
3.1 the condensed consolidated interim financial statements at 30 June 2016:
a) were prepared in accordance with the International Financial Reporting Standards endorsed by the European Commission pursuant to Regulation (EC) 1606/2002 of the European Parliament and Council, of 19 July 2002;
b) are consistent with the accounting books and records;
c) and provide a true and fair view of the financial position and results of
operations of the issuer and the companies included in its scope of consolidation.
3.2 The interim management report contains a reliable analysis of the references
to important events during the first six months and their impact on the condensed
consolidated interim financial statements, as well as a description of the key risks
and uncertainties for the remaining six months of the year. The interim management
report also includes a reliable analysis of significant related party transactions.
Milan, 28 July 2016
Chairman and Chief Executive Officer
(Pietro Giuliani)
Manager in charge
of financial reporting
(Alessandro Zambotti)
97
REVIEW REPORT ON CONSOLIDATED INTERIM
FINANCIAL REPORT AS OF 30 JUNE 2016
AZIMUT HOLDING SPA
REVIEW REPORT ON CONSOLIDATED INTERIM
FINANCIAL REPORT AS OF 30 JUNE 2016
AZIMUT HOLDING SPA
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G r u p p o
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REVIEW REPORT ON CONSOLIDATED INTERIM FINANCIAL REPORT AS OF 30 JUNE 2016
To the shareholders of
Azimut Holding SpA
Foreword
REVIEW REPORT ON CONSOLIDATED INTERIM
We have reviewed the accompanying consolidated interim financial report of Azimut Holding SpA and its
FINANCIAL REPORT AS OF 30 JUNE 2016
subsidiaries (the Azimut Holding Group) as of 30 June 2016, comprising the balance sheet, the income
statement, the statement of comprehensive income, the statement of changes in shareholders’ equity, the
AZIMUT HOLDING SPA
cashflow statement and the related notes. The directors of Azimut Holding SpA are responsible for the
preparation of the consolidated interim financial report in accordance with International Accounting
Standard 34 applicable to interim financial reporting (IAS 34) as adopted by the European Union. Our
responsibility is to express a conclusion on this consolidated interim financial report based on our review.
Scope of review
We conducted our work in accordance with the criteria for a review recommended by Consob in Resolution
No. 10867 of 31 July 1997. A review of consolidated interim financial report consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than a full-scope audit conducted in accordance
with International Standards on Auditing (ISA Italia) and, consequently, does not enable us to obtain
assurance that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion on the consolidated interim financial report.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the consolidated
interim financial report of Azimut Holding Group as of 30 June 2016 are not prepared, in all material
respects, in accordance with International Accounting Standard 34 applicable to interim financial reporting
(IAS 34) as adopted by the European Union.
Milan, 29 August 2016
PricewaterhouseCoopers SpA
Signed by
Elisabetta Caldirola
(Partner)
This report has been translated into English from the Italian original solely for the
convenience of international readers
99