Unipol Gruppo Finanziario S.p.A. - 2016 Annual Report

126 Pages·2017·5.28 MB·English

by  Evangelisti Stefania

2016
Annual Report
CLOSE
TO REALITY.
TOGETHER

BEYOND NUMBERS.
Graphic design by
Mercurio GP Srl
Unipol Gruppo Finanziario
Annual Report
2016

CLOSE
TO REALITY.
TOGETHER

BEYOND NUMBERS.
To bring more security and confidence in the future into people’s
lives while supporting them in their choice of protection and
savings solutions and in life quality decisions thanks to the
active presence of local networks. This is the vision of the
Unipol Group, a group made up of Companies who work every
day to be of real help to individuals by offering them solutions
to protect, support and achieve their plans.
Close to reality, together beyond numbers. This is the sense
of our commitment. For Unipol, for us, a geographical network,
presence and proximity are decisive factors founded on in-depth
awareness of the real world.
In 2016 the Group launched its new three-year Business Plan and,
to use an artistic metaphor, laid out its new vision, “designing”
its new objectives and sketching out a path to be followed
with four very precise key drivers: simplicity, speed, innovation
and proactivity. Being increasingly closer to the situations,
increasingly connected to the world around us, means knowing
how to deeply understand the essence of reality and its needs.
The pages that follow offer a first outline of this design which,
combining rationality, pragmatism, creativity and inventiveness,
has seen the various Group Companies working together to
create value for all their stakeholders and for the community.

Summary

Amendment to the accounting standards applied and
Company bodies 7 restatement of figures of the previous year 60
Measurement criteria 66
Introduction 8
Information on the Statement of Financial Position and
Macroeconomic background and market Income Statement 70
performance 8
Other information 84
Main regulatory developments 11
Significant events after the reporting period 87
1. Management Report 19 Proposals to the Ordinary Shareholders’ Meeting 88
Share performance 21
4. Tables appended to the Notes to the
Shareholding structure 22
Financial Statements 91
Group structure at 31 December 2016 23
1. Reclassified Income Statement 93
Preamble 24
2. Statement of changes in shareholders’ equity 94
Management Report 25
3. Statement of use and availability of equity
Salient aspects of business operations 29 reserves al 31 December 2016 97
Asset and financial management 29 4. Statement of changes in intangible assets 98
Share capital 32 5. Statement of changes in property, plant and
equipment 98
Debt 32
6. Statement of changes in fixed investments 100
Risk management policies (Art. 2428 of the Civil
Code) 32 7. List of shares and securities included in current
assets at 31 December 2016 102
Internal Control and Risk Management System of the
Unipol Group 33 8. Statement of temporary differences that
involved the recognition of deferred tax assets
Report on corporate governance and ownership
and liabilities 103
structures pursuant to Art. 123-bis of Legislative
Decree 58 of 24 February 1998 37 9. Information on debt at 31 December 2016 105
Performance of directly controlled companies 37
5. Statement on the Financial Statements
Relations with Group companies and related party
in accordance with Art. 81-ter of Consob
transactions 41
Regulation 11971/1999 107
Social and environmental responsibility 44

Research and development activities 45 6. Board of Statutory Auditors’ Report 111
Privacy obligations (Legislative Decree 196/2003) 45
7. Independent Auditors’ Report 119
Human resources 45
IT services 46
Internet 47
Business outlook 47
2. Financial Statements for the year 2016 49
Statement of Financial Position 50
Income Statement 54
Statement of cash flows 56
3. Notes to the Financial Statements 59
Structure and contents of the Financial Statements 60
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Unipol Gruppo Finanziario 2016 Annual Report

Company bodies

HONORARY CHAIRMAN Enea Mazzoli
BOARD OF DIRECTORS CHAIRMAN Pierluigi Stefanini
VICE CHAIRMAN Maria Antonietta Pasquariello
CHIEF EXECUTIVE OFFICER
Carlo Cimbri
AND GENERAL MANAGER

DIRECTORS Gianmaria Balducci Pier Luigi Morara

Francesco Berardini Antonietta Mundo

Silvia Elisabetta Candini Milo Pacchioni

Paolo Cattabiani Sandro Alfredo Pierri

Ernesto Dalle Rive Annamaria Trovò

Patrizia De Luise Adriano Turrini

Anna Maria Ferraboli Rossana Zambelli

Daniele Ferrè Carlo Zini

Giuseppina Gualtieri Mario Zucchelli

Claudio Levorato

SECRETARY OF THE BOARD
Roberto Giay
OF DIRECTORS
BOARD OF STATUTORY AUDITORS CHAIRMAN Mario Civetta

STATUTORY AUDITORS Silvia Bocci

Roberto Chiusoli

ALTERNATE AUDITORS Massimo Gatto

Chiara Ragazzi
MANAGER IN CHARGE
Maurizio Castellina
OF FINANCIAL REPORTING
INDEPENDENT AUDITORS PricewaterhouseCoopers SpA

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Introduction

Introduction
Macroeconomic background and market performance
Macroeconomic background

2016 was characterised by global economic growth of a little less than 3%, slightly down compared to 2015.

The Euro area, aided by the constant support of the European Central Bank (ECB) and by a less restrictive fiscal policy
that sustained domestic demand, achieved an expansion of the Gross Domestic Product (GDP) around 1.7%, higher
than in 2015 and than the potential growth estimated between 0.9% and 1.2%.

In 2016, the ECB intervened on the monetary policy bias on two distinct occasions. In the March meeting, in light of the
constant weakness of headline inflation (-0.1% was the figure in that month), caused by the low cost of energy and of
most commodities, the ECB reduced to zero the discount rate and to -0.40% the deposit rate paid by the monetary
authority on the treasury accounts of commercial banks. Moreover, within the scope of Quantitative Easing (QE), the
monthly amount of securities purchases was raised from €60bn to €80bn with the inclusion among the purchasable
securities, of non-financial corporate bonds issued in Euro and having at least investment grade rating. In the
December meeting, the ECB decided to adapt the QE to a European economic environment of moderate but constant
growth. The QE was extended through 2017 with the reduction back to the original €60bn, starting in April, of the
monthly amount of the purchases.

In the United States, the economy grew by slightly more than 1.5%: after a disappointing first quarter (0.8% growth
year on year), which coincided with the collapse of the price of commodities (including oil) and with financial instability
in China, the rest of the year saw the economy bounce back significantly thanks to domestic consumption, buoyed by
the high level of employed attained (December unemployment was 4.7%).

In light of the American economic scenario and with inflation near the 2% target (the average for 2016 was 1.3%, the
December figure was 2.1%), the Federal Reserve (FED), in the last meeting of 2016, raised the official rate by 25 basis
points, to 0.75%. The FED stated that the monetary policy normalisation process in 2017 could entail additional raises
of the discount rate: this assumption postulates the continuation of the positive performance of the US economy,
which should also be assisted by the expansionary fiscal policy envisioned by the Trump Administration. In this
context, the Dollar appreciated relative to numerous currencies, including the Euro.

In spite of the activism of the Bank of Japan directed at weakening the Yen, in 2016 Japan recorded only tentative
economic growth, estimated at approximately 0.8%. Not even the constant support from public spending seems able
to lift the country back up from a condition of substantial deflation.

In the early months of 2016, China recorded a marked decline in the currency reserves used to contrast the
depreciation of the Yuan, caused by significant capital outflows from the country. The government adopted spending
policies directed at supporting the change process of the development model, with the goal of making domestic
demand grow further and reducing the weight of exports and investments. Overall, in 2016 China saw the growth of its
gross domestic product (+6.7%) align to the target set by the government (a range between 6.5% and 7%). However,
the risk associated with excessive debt in the private sector remains.

Lastly, Emerging Countries expressed economic results substantially correlated with commodity prices. A first part
of the year, made difficult by the drop in commodity prices, was followed by a second half in which, thanks to the
recovery of the prices, especially of oil, widespread positive signals were recorded, in particular in Russia.

In 2016, the Italian economy achieved a growth rate of approximately 0.9%. The key factors underlying this result
were a less restrictive fiscal policy and the consequent recovery in domestic demand, in particular in the durable
goods sector. However, the results observed on the employment front are still contradictory: in December, 242
thousand new jobs were recorded compared to the figure of twelve months before, however the general
unemployment rate rose to 12% and the youth unemployment rate returned above 40%. The result of the
constitutional referendum led to the collapse of the government, quickly replaced by a new administration. Several
political issues remain open, including the electoral law review which will be drafted on the basis of the recent
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