2014 Report Azimut Holding Spa

2014 Report Azimut Holding Spa Gruppo Azimut Summary

Azimut Group Management Report 1

Consolidated financial statements at 31 December 2014 25

Notes to the consolidated accounts at 31 December 2014 37

Certification of the consolidated accounts pursuant 117 to article 154-bis of Legislative Decree n° 58/98

Azimut Holding Spa Management Report 119

Financial statements at 31 December 2014 137

Notes to the accounts at 31 December 2014 149

Attachments 205

Certification of the accounts pursuant 210 to article 154-bis of Legislative Decree n° 58/98 6 Gruppo Azimut Consolidated financial statements at 31 December 2014

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The Azimut Group consolidated net profit for 2014 amounts to 92,096 thousand Group results euro (155,753 thousand euro in 2013), while consolidated EBIT came to 186,023 thousand euro (182,505 thousand euro in 2013). Total assets under management at the end of 2014 reached 26.7 billion euro, up by approximately 24.6% compared to the end of 2013. Total assets, including assets under custody, amounted to 30 billion euro. Group total inflows were positive at 5,599 million euro at 31 December 2014, rea- ching an all-time high. The recruitment of financial advisors showed a positive balance: in 2014, the Group networks showed 128 new engagements, bringing the total number of advisors to 1,524.

Assets (amounts in millions of euro) Total assets Figures in millions of euro AUM AUM Change and net inflows 31/12/2014 31/12/2013 Absolute % Mutual funds 22,256 18,649 3,607 19.3% Discretionary portfolio management and other 4,553 2,860 1,693 59.2% AZ Life insurance 4,030 2,576 1,454 56.4% Double counting (4,154) (2,664) (1,490) 55.9% Total AUM, net 26,685 21,421 5,264 24.6% Securities, third-party funds and A/C 3,308 2,529 779 30.8% Total 29,993 23,950 6,043 25.2%

Net inflows (amounts in millions of euro) Figures in millions of euro 2014 2013 Absolute % Change Mutual funds 3,191 2,243 948 42.3% Discretionary portfolio management and other 1,676 849 827 97.4% AZ Life insurance 1,224 975 249 25.5% Double counting (1,320) (963) (357) 37.1% Total AUM, net 4,771 3,104 1,667 53.7% Securities, third-party funds and A/C 828 132 696 527.3% Total 5,599 3,236 2,363 73.0%

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Consolidated net financial With regard to the methods used to assess net financial debt, reference is made to the debt 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 reporting date.

Items 31/12/2014 31/12/2013 A Cash 33 16 B Cash equivalents: 308,770 548,067 Due from banks 246,669 486,588 Due from managed funds 62,101 61,479 C Available-for-sale financial assets 260,540 97,466 D Total cash A+B+C 569,343 645,549 E Short-term receivables F Short-term bank loans G Current portion of long-term debt: (10,815) (13,740) Bonds (Azimut ‘09-’16) (354) Bonds (Azimut ‘11-’16 Senior) (19) (19) Bonds (Azimut ‘13-’20 Convertible) (524) (52) Due to banks (lease-back) (100) (3,123) Due to banks (Banco Popolare loan) (10,172) (10,192) H Other short-term payables I Short-term financial debt F+G+H (10,815) (13,740) J Short-term financial debt (net) I-E-D 558,528 631,809 K Long-term bank loans: (30,000) (40,100) Due to banks (Banco Popolare loan) (30,000) (40,000) Due to banks (lease-back) (100) L Bonds (216,142) (228,183) Bonds (Azimut ‘09-’16) (17,005) Bonds (Azimut ‘11-’16 Senior) (821) (817) Bonds (Azimut ‘13-’20 Convertible) (215,321) (210,361) M Other long-term debt N Long-term financial debt K+L+M (246,142) (268,283) O Net (financial) debt J+N 312,386 363,526

4 Gruppo Azimut Net financial position was positive for 312.4 million euro at 31 December 2014 (363.5 million euro at 31 December 2013). The financial results were impacted by the liquidity generated by operating activities, as well as by 115 million euro for the payment of dividends to shareholders and holders of profit-participating financial instruments and the payment to Fondazione Azimut Onlus of 1.8 million euro, made in execution of the Shareholders’ resolution of 24 April 2014, in addition to the following main transactions carried out during the year: • on 13 February 2014, AZ International Holdings Sa, through its subsidiary AZ Brasil Holdings Ltda, acquired 50% of M&O Consultoria Ltda and FuturaInvest Gestao de Recursos Ltda against a total consideration of 3,850 thousand euro; • on 18 April 2014, after checking controls over the granting of profit-participating financial instruments (subscribed as per the shareholders’ resolution of 29 April 2010 and subsequent resolutions of the Board of Directors), the total number of instruments was revised, leading to the subscription of 64,804 profit-participating financial instruments at 24 euro each, for a total of 1,555,296 euro by the so-called top key people; • on 27 June 2014, Azimut Holding Spa acquired 51% of Augustum Opus Sim Spa against a total consideration of 10,000 thousand euro; • during the year, Azimut Holding Spa made capital injections of 3,325 thousand euro in favour of Programma 101 Spa; • on 25 July 2014, Azimut Enterprises Holding Srl acquired 20% of Club Investimenti 2 against a total consideration of 1,000 thousand euro: • on 9 December 2014, Azimut Capital Management Sgr Spa, AZ Fund Management Sa and AZ Life Ltd paid 81,522 thousand euro, net of prior year tax losses and tax credits, in accordance with the agreement entered into by the Azimut Group and the Tax Authority on 29 November 2014.

During the year, transactions involving treasury shares led to a total decrease of 218,212 shares for a total of 0.8 million euro. The details of these transactions are il- lustrated in the “Treasury Shares” section of these consolidated financial statements.

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Loans raised and repaid during the year

The changes in financial debt items during the year are shown in the following table.

Euro/000 Interest rate Currency Nominal Effective Nominal Carrying Expiry Value amount Balance at 01/01/2014 Euro 279,382 of which: BPN loan - Line B Euro 3 month 3 month 50,000 50,000 2018 Euribor +1.25 Euribor +1.25 “Azimut 2009-2016” Euro 4% 4.95% 17,691 15,024 2016 Subordinated Convertible Bond: “Azimut 2011-2016 Senior” Bond Euro 2.5% 3.06% 884 797 2016 “Azimut 2013-2020” Euro 2.13% 4.91% 250,000 210,361 2020 Subordinated Convertible Bond: Lease-Back agreement Euro one year one year 3,200 3,200 2015 Euribor +0.4% Euribor +0.4% Repayments: Euro (28,124) BPN loan - Line B Euro 3 month 3 month (10,000) (10,000) 2013 Euribor +1.25% Euribor +1.25% “Azimut 2009-2016” Euro 4% 4.95% (17,691) (15,024) 2016 Subordinated Convertible Bond: Lease-Back agreement Euro Euribor+0,4% Euribor+0,4% (3,100) (3,100) 2015 Balance at 31/12/2014 Euro 251,258

The instalment of the loan granted by Banco Popolare relating to Line B totalling 10,000 thousand euro was repaid on 30 June 2014. On 1 July 2014, as well as paying the interest instalment of 708 thousand euro, and in execution of the Board of Directors’ decision of 8 May 2014, Azimut Holding Spa also made an advance partial redemption of the 2009-2016 subordinated bond (“Azimut 2009 - 2016 subordinato 4%”) totalling 17,691 thousand euro, or 20% of the original par value, extinguishing the bond.

6 Gruppo Azimut Reconciliation of Azimut Holding Spa net income and shareholders’ equity to consolidated figures Total shareholders’ equity of which profit at 31/12/2014 for the year Holding opening balance 637,507 136,509 Adjustments due to changes in calendar year (*) 2,106 Total Holding shareholders’ equity 639,613 136,509 Adjustments: Results of consolidated companies 210,745 210,745 Subsidiary consolidation effects 76,424 365 Azimut Holding Spa dividend cancellation (155,754) (155,754) Azimut Consulenza Sim Spa dividend cancellation (97,723) (97,723) AZ International Holdings Sa Group dividend cancellation (3,522) (3,522) Equity accounted investments 1,525 (25) Liabilities measured at fair value (33,680) (199) Tax adjustments (483) 1,700 Total Group shareholders’ equity 637,145 92,096 Minority interest 5,627 1,145 Total shareholders’ equity 642,772 93,241

(*) The adjustment refers to the merger of Tumiza Spa and Azimut Holding Spa which took place in 2001. The reporting dates of these companies were 30 June and 31 December, respectively.

In order to provide a more effective representation of the results, the income state- Reclassified consolidated ment has been reclassified and thus better reflects the content of the items according income statement 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 “Provisions 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”;

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• interest expense on loans was reported under “Interest expense” in the reclassified income statement.

Euro/000 01/01/2014 01/01/2013 31/12/2014 31/12/2013 Acquisition fees 9,213 9,055 Fixed management fees 393,611 321,603 Variable management fees 108,231 107,201 Other income 8,134 6,608 Insurance income 33,065 27,629 Total income 552,254 472,096 Acquisition costs (256,326) (208,049) No-load fees (4,718) (6,232) Overheads/administrative costs (87,309) (69,440) Amortisation/provisions (10,813) (6,830) Total costs (359,166) (290,551) EBIT 193,088 181,545 Net financial income 10,082 8,973 Net non-recurring costs/Write-downs (6,273) (5,101) Interest expense (12,051) (3,177) Pre-tax profit 184,846 182,240 Income tax (93,761) (28,519) Deferred tax assets/liabilities 2,156 2,158 Net profit 93,241 155,879 Profit attributable to minority interest 1,145 126 Group net profit 92,096 155,753

Consolidated EBIT and Group consolidated net profit at 31 December 2014 came to 193,088 thousand euro (181,545 thousand euro at 31 December 2013) and 92,096 thousand euro (155,753 thousand euro at 31 December 2013), respectively. Overheads for 2014 rose on 2013. The increase is also due to the consolidation of foreign equity investments.

Financial markets and the In the United States, the economy has accelerated significantly, exceeding expec- global economy tations. However, the medium/short-term outlook for the global economy remains uncertain given the continued weakness of the Eurozone and Japan, the ongoing slow-down in China and the sudden stop in Russia. The steep fall in oil prices, caused by extended supplies and weak demand, may support growth, but could hinder the stability of exporting countries.

8 Gruppo Azimut The volatility on the financial markets of the Eurozone rose after the general elections in Greece at the end of January: the possible impact of any changes to the economic policy guidelines and management of Greece public debt increase the concern over the cohesion of the Eurozone. The interest rates on Greece’s three-year bonds rose above 15%; the downturn in European stock markets was accompanied by a substantial stability of the risk premiums on government bonds in peripheral countries, probably as a result of the increased expectations for monetary policy measures by the ECB. In Italy, the downgrading of sovereign debt by Standard & Poors due to uncertain growth prospects, had no significant effects on government bond yields.

European economy

In the third quarter of 2014, the GDP in the Eurozone grew 0.2%, following the increase in consumption (0.5% and 0.3% for households and public administrations, respectively). Amongst the major economies, the GDP began to rise in France (0.3%), while it grew slightly in Germany (0.1%) and decreased in Italy (-0.1%). The French economy benefited from the expansion of public and private consumption and the change in inventory. In Germany, businesses were modestly assisted by the growth in household and public administration spending. In the Eurozone, consumer prices decreased in December. The decrease in oil prices will contribute to supporting consumption, but may increase the risk of stronger expectations for a reduction in price changes and an increase in real interest rates, increasing the charges for indebted sectors. In order to mitigate these risks and restore price stability expectations, the ECB Go- verning Council confirmed its intention to extend the budget of the Euro system and bring it back to March 2012 levels. The performance of specific refinancing operations with a longer term which, to date, remains below the original expectations, may be insufficient; the Council, which will re-assess the situation at the end of January, is ready to expand the scope, composition and frequency of operations. In Italy, consumption in the past few quarters recovered, but to a small extent, in line with the trend of disposable income supported by the measures taken by the Government. The positive impact of these measures on the economy was offset by the decrease in investments, which were blocked by the significant margin of spare capacity, the considerable uncertainties as to the demand prospects and the difficulties encountered by the construction sector. In implementation of the resolutions of the ECB Governing Council dated 2 Oc- tober, the Asset-Backed Securities Purchase Programme (ABSPP) and the Covered Bond Purchase Programme (CBPP3) were launched; on 9 January, asset-backed securities and covered bonds worth approximately 1.8 billion euro and 31.3 billion euro, respectively, were purchased. The second specific refinancing operation with a longer term took place on 11 December. Total cash requirements for these two operations by the banking system in the area amounted to just over the half of the maximum disbursable amount (approximately 400 billion); this reflects the weakness of the economy of the area, with a negative impact on credit demand.

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Emerging markets

In China, the slow-down recorded in the third quarter of the year (from 7.5% to 7.3% on a trend basis) is set to continue until the last few months of the year; in 2014, actual GDP may be below the annual growth target for the first time (7.5%). India continued to grow strongly (5.3% on a trend basis in the third quarter of the year) and, according to some surveys, it accelerated in the last few months of 2014; Brazil continued to stagnate (0.2% in the third quarter of the year), with GDP blocked by the general weakness in investments which is set to continue in the fourth quarter. The economic and financial situation of the country is deteriorating rapidly. The significant strengthening of the international trade of goods recorded in the third quarter of the year (8.4% year-on-year) would slow down in the fourth quarter due to the further weakening in demand from the Eurozone and Asia. In the main emerging countries, monetary policies followed different trends, based on different macro-economic circumstances. On one hand, the Chinese Central Bank increased its supervisory measures to limit leverage and downsize the shadow banking system while, on the other, it reduced reference interest rates on bank loans and deposits. In India, the Central Bank confirmed its guidelines which, according to market expectations, should lead to a decrease in the official discount rate by 100 bps in the first few months of 2015. In Brazil, the Central Bank launched a new series of restrictive monetary policies to bring expectations into line with inflation targets. In November, the Russian Central Bank announced that the rouble would no longer be pegged to the euro or the dollar; in December, it carried out the strongest increase in rates ever decided, bringing the reference interest rate to the highest level since the 1998 crisis (17%).

Bond markets

The yield of the ten-year government bonds of the advanced economies continued to decrease as a result of inflation expectations and, starting from December, following the portfolio adjustments to less risky assets; this may also be due to the concerns over a lengthy period of stagnation of the economy and the resulting decrease in growth potential. At the end of 2013, yields in the United States, United King- dom, Germany and Japan were equal to 2.0%, 1.6%, 0.5% and 0.3%, respectively, with an average decrease of over 50 bps compared to the beginning of the quarter. The financial markets of the Eurozone were affected by the new elections in Greece. The interest rates on Greece’s three-year bonds rose above 15%; such a percentage was reached in 2010 when the first support scheme was launched. However, the downturn in European stock markets was accompanied by a substantial stability of the spread of government bonds in peripheral countries, probably since there were no expectations for further monetary policy measures by the ECB. Overall, the ten- year spreads with Germany remained substantially unchanged in Italy, Portugal and Spain, while they increased considerably in Greece. Since the end of September, risk premiums on corporate investment-grade bonds

10 Gruppo Azimut have risen for dollar-denominated bonds (28 bps), while those denominated in euros remained unchanged. The spreads of high-yield bonds in dollars grew more significantly (80 bps), mainly as a consequence of the bonds issued by energy companies which were impacted by the decrease in oil prices. Risk premiums on banks’ credit risks, based on the spreads of five-year credit default swaps, increased in the Eurozone (up by 11 bps), while they decreased in the United States (down by 5 bps).

Equity markets

Share prices fluctuated considerably in the fourth quarter of the year. Since the end of September, stock market indices increased only in the United States and Japan where they benefited from the good performance of the economy and the new -ex pansion phase of the monetary policy launched by the Bank of Japan, respectively. In the last few months of 2014, the financial conditions of emerging markets rapidly deteriorated: volatility started to grow again, but it remained below the quarter opening figures; capital outflows increased in the equity market and, to a lesser extent, in the bond market. Stock indices decreased, especially in Eastern Europe and Latin America. The sharp decline in oil prices hit oil-exporting economies; sovereign spreads went back to 2011 record levels and currencies depreciated. In Russia, which was also hit by a significant economic slow-down and by Western sanctions, the exchange rate depreciated by more than 18% against the dollar in December only, despite the currency support measures adopted by the Central bank.

Azimut Holding Spa Significant events of the year Capital injections to AZ International Holdings Sa On 10 February 2014, following the Executive Committee’s resolution of 22 January 2013, Azimut Holding Spa made a capital injection of 18.25 million euro to increase the share capital of the subsidiary AZ International Holdings Sa.

Issue of the subordinated bond 2013-2020 convertible into Azimut Holding Spa ordinary shares On 10 April 2014, the convertible bond 2013-2020 was admitted trading on the MTF of the Vienna stock exchange.

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Consequently, as resolved by the shareholders on 29 April 2010, the profit-participating financial instruments subscribed by financial advisors, employees and managers of the Azimut Group (top key people - related parties as per the Shareholders’ agreement related to Azimut Holding Spa), totalled 1,430,161 (34,323,864 euro). Profit- participating financial instruments are issued at 24 euro each, as calculated by the Board of Directors based on the latest appraisal carried out by a leading independent company which applied two different assessment methodologies (a series of binary options, the capitalisation of a binary option), without identifying any critical issues.

Azimut Holding Spa Annual General Shareholders’ Meeting of 24 April 2014 The Shareholders’ Meeting of 24 April 2014 approved the following:

Approval of 2013 financial statements The Shareholders’ Meeting approved the 2013 financial statements, which included a Parent Company net profit of 148.5 million euro. The Shareholders also approved a pre-tax ordinary dividend of 0.70 euro per share. They also approved the payment to Fondazione Azimut Onlus of 1.8 million euro, equal to 1% of pre-tax consolidated profit and the payment of 15.58 euro for each profit-participating financial instrument held by Top Key People at the time of approval of payment of the dividend.

Corporate Bodies The Shareholders approved the appointment of the sales manager as new member of Azimut Holding Spa’s Board of Directors, increasing the number of members from nine to ten.

Financial advisor incentive scheme The Shareholders’ Meeting approved an incentive scheme based on the purchase of Azimut Holding Spa shares reserved for financial advisors recruited by Azimut Group companies, being the companies directly or indirectly controlled by Azimut Holding Spa, between 1 January 2014 and 30 April 2015. The Azimut Group investment firms (Sim) may nevertheless propose other forms of incentives not based on shares or financial instruments to their eligible financial advisors.

Proposal for purchase and allocation of treasury shares The Shareholders authorised the purchase, pursuant to current regulations, of up to a maximum of 28,000,000 ordinary Azimut Holding shares, or 19.55% of share capital at the date of the resolution, in one or more instalments over an 18-month period. The shares must be purchased for an amount not lower than the implicit carrying amount of Azimut Holding shares and a maximum unit price of no more than 50 euro subject to revocation, for the period yet to elapse, of authorisation granted at the Annual Shareholders’ Meeting of 24 April 2013. The Shareholders further resolved to free up the shares purchased on the back of the aforementioned resolution either for sale on the market, in execution of any stock option plans, or for use as payment in any acquisition of shareholdings as well as to exercise warrants awarded following subscription of non-convertible “Azimut 2009- 2016 subordinato 4%” subordinated bonds, the issue of which was approved by the

12 Gruppo Azimut Board of Directors on 8 April 2009, considering also the treasury shares tied throughout the duration of the bond convertible into treasury shares “Azimut 2013-2020 subordinato 2,125%” as per the Board resolution of 11 November 2013.

Remuneration Report: resolutions pursuant to article 123-ter, paragraph 6, of Italian Legislative Decree no. 58/98. The Shareholders’ Meeting approved the Company 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.

Repurchase of Apogeo Consulting Sim Spa shares As part of the scheme aimed at promoting the purchase of equity interests in Apogeo Consulting Sim Spa by the financial advisors who work with the company, who are also Initiative Founding members, completed at the end of 2013, on 30 April 2014, Azimut Holding Spa repurchased, based on the agreements between the parties, 284,000 Apogeo Consulting Sim Spa shares, equal to 14.2% of its share capital against a total consideration of approximately 6 million. This transaction, which was carried out through the partial allocation of the Parent Company’s shares, enabled the financial advisors to become shareholders of Azimut Holding Spa.

Redemption of the 2009-2016 subordinated bond (“Azimut 2009 – 2016 subordina- to 4%”) In its meeting of 8 May 2014, Azimut Holding Spa’s Board of Directors resolved the advance partial redemption of the “Azimut 4% 2009-2016” Subordinated Bonds, as established by article 9 of the Bond Terms. Said article awards the Azimut Holding Board the right to make an advance partial redemption as of 1 July 2010 (inclusive) and for each subsequent year that the Bond is valid, on the interest payment date (as established by the Bond Terms), amounting to no more than 20% of the par value of the Subordinated Bonds each year. In the event that in any given year the Board of Directors authorises the redemption of less than the limit of 20%, the residual part of the Subordinated Bond not subject to early redemption that year may be added to the 20% of the par value of the Su- bordinated Bonds in subsequent years. Full early redemption of the Bond took place on 1 July 2014 for 20% of the Par Value on issue; the amount was paid in cash and was equal to 17,691 thousand euro.

Incorporation of Azimut Enterprises Holding Srl On 14 May 2014, Azimut Enterprises Holding Srl was incorporated, with initial quota capital of 10,000 euro, fully subscribed by Azimut Holding Spa. On 3 July 2014, a capital injection of 1,100,000 was made to increase quota capital. On 31 December 2014, Azimut Holding Spa contributed the equity investments held in Programma 101 Spa, Siamosoci Srl., Cassa di Risparmio di Bolzano and Banca Valsabbina to Azimut Enterprises Holding Spa. This led to a share capital increase from 10,000 euro to 100,000 euro. The contribution difference was considered as a capital injection.

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Repayment of the Banco Popolare loan On 30 June 2014, the Parent Company repaid the instalment (Line B) of the loan granted by Banco Popolare for a total amount of 10 million euro.

Acquisition of 51% of Augustum Opus Sim Spa On 27 June 2014, having obtained authorisation from the Bank of Italy, Azimut Holding Spa completed the acquisition of Augustum Opus Sim Spa, an independent asset management company. The consideration amounts to 10 million euro.

Exercise of warrants issued on the “Azimut 2009-2016 Subordinato 4%” Bond During the year, in consideration of the positive performance of the Azimut share, which continued to exceed the price set for the exercise of the warrants (12 euro) assigned at the placement of the Subordinated Bond “Azimut 2009-2016 Subordi- nato 4%”, 405,169 warrants were exercised for a total amount of 4.9 million euro, in exchange for the delivery of the same amount of treasury shares.

Agreement to acquire 55% of Futurimpresa Sgr Spa On 6 August 2014, Azimut Holding Spa signed an agreement to acquire an equity investment in Futurimpresa Sgr Spa, the asset management company of the Milan, Bergamo, Brescia and Como Chambers of commerce. The acquisition, which was authorised by the Bank of Italy, was carried out by means of a reserved capital increase of approximately 2,5 million euro which took place on 19 January 2015. At the end of the subscription, Azimut Holding Spa holds 55% of Futurimpresa Sgr Spa. The aim of the transaction is to form a partnership to obtain business synergies in the sector concerning investments in small and medium enterprises (SMEs) in order to promote and develop the area in which they operate by creating a platform which supports the excellence of these enterprises. On 3 December 2014, the Board of Directors of Azimut Capital Management Sgr Spa approved the sale of Fondo Antares AZ I, which specialises in Italian SME mini-bonds, to the related company Futurimpresa Sgr Spa, effective from 30 December 2014.

Merger of AZ Investimenti Sim Spa and Apogeo Consulting Sim Spa On 8 October 2014, the Boards of Directors of the above companies approved the merger project, prepared in accordance with articles 2501ter and 2501 of the Italian Civil Code, of AZ Investimenti Sim Spa and Apogeo Consulting Sim Spa into Azi- mut Consulenza Sim Spa. The merging company and the mergees are all wholly owned by Azimut Holding Spa. Since the shareholding structure of the merging company is in line with that of the mergees, no share exchange ratio has been calculated. Furthermore, the share capital of the merging company was not increased to serve the merger and, following their merger, all the shares of the mergees were cancelled. The merger will stream- line the Group’s structure. Specifically, in Italy, the network of financial advisors for distribution activities will be grouped into one company. Moreover, organisational and management procedures will be streamlined, also generating cost savings with respect to administrative and accounting fulfilments.

14 Gruppo Azimut As per the merger deed dated 15 December 2014, AZ Investimenti Sim Spa and Apogeo Consulting Sim Spa were merged into Azimut Consulenza Sim Spa with tax and accounting effects as of 1 January 2014 and statutory effect as of 31 December 2014.

Azimut Capital Management Sgr Spa

Product updating for Azimut Capital Management Sgr Spa With respect to the Formula Target 2013 fund, having reached the target date set out in the Regulation, as of 1 January 2014, the management company set a new “target date”. Moreover, based on the current interest rate trends, it decided to increase the total exposure to stock markets, mainly through stock market indices’ option. Following the changes to the relevant operating criteria, the Fund was renamed “For- mula Target 2017 Equity Options”. Moreover, as from 3 March 2014, the hedge funds Aliseocinque and Azimut Multi- strategy were merged into the Aliseo hedge fund, as resolved by the Board of Direc- tors on 3 November 2013.

Injection to cover the loss incurred by the subsidiary Azimut Capital Management Sgr Spa On 12 December 2014, Azimut Holding Spa covered the loss by injecting 55.1 million euro in accordance with the agreement entered into with the Tax Authority on 29 November 2014 as described in the section “Tax Position”, to which reference should be made.

AZ Fund Management Sa

Launch of new products Starting from 26 June 2014, the range of sub-funds in the umbrella fund AZ FUND 1 was expanded with the launch of new sub-funds: • “Carry Strategies” which invests in UCITS units and/or other similar UCIs of the Azimut Group, characterised by the use of investment strategies which are not related to financial market trends. • “Asia Absolute” which invests in shares or similar securities of corporate issuers based in Asia or which carry out most of their business in Asia, except for Japan.

AZ International Holdings Sa

Acquisition of 50% of the advisory company of the FuturaInvest Group On 13 February 2014, the Azimut Group, through its Brazilian sub-holding AZ Bra- sil Holdings Ltda, acquired 50% of AZ FI Holding Sa which wholly owns M&O Consultoria, Planejamento e Anàlise de Valores Mobiliarios Ltda, a company which

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provides financial advisory services with respect to asset allocation, fund selection and financial training, and 100% of FuturaInvest Gestao de Recursos Ltda, a company managing funds of funds, discretionary portfolios and accounts. The total consideration was 3,850 thousand euro.

Capital injection to AZ Brasil Holdings Ltda During the year, the subsidiary AZ International Holdings Sa made a capital injection of 13 million euro to increase the share capital of its subsidiary AZ Brasil Hol- dings Ltda.

Acquisition of 82.14% of the Mexican-based Profie Sa On 17 June 2014, Azimut Group, via its subsidiary AZ International Holdings Sa, reached an agreement to acquire 82.14% of the Mexican holding Profie Sa which wholly owns Mas Fondos Sa, Mexico’s main independent company in the field of asset management distribution. Azimut Group also entered into an investment agreement and shareholders’ agreement to develop the business. On 23 October 2014, the Azimut Group acquired, through its subsidiary AZ International Holdings Sa, 82.14% of Profie Mexicana Sa, a company based in Mexico City that, in turn, wholly owns the Mexican Mas Fondos Sa which operates in distribution of mutual funds. The transaction was completed following the authorisation from the local competent authorities. The total consideration was 6,207 thousand euro. The agreement also provides for put/call options.

Acquisition of 70% of AZ Notus Portfoy Yonetimi A.S. On 22 October 2014, the Azimut Group acquired 70% of the Turkish AZ Notus Portfoy Yonetimi A.S. through its subsidiary AZ International Holdings Sa. This company provides financial advisory services. The transaction was completed following the authorisation from the local competent authorities. The total consideration was 2,088 thousand euro.

Acquisition of 93% of Next Generation Advisory On 3 November 2014, the Azimut Group acquired 93% of Next Generation Advi- sory through its subsidiary AZ International Holdings Sa. This Australian newco was set up to support financial advisory companies which provide asset allocation services to retail clients, HNW and local bodies. Meanwhile, Azimut entered into an investment and a shareholders’ agreement with Next Generation Advisory’s management to develop the business plan whose objectives include, inter alia, creating a partnership model within the company to attract, recruit and motivate financial advisors in the long term. The initial investment amounted to approximately 0.6 million euro.

Acquisition of 100% of AZ Global Portfoy AS On 22 December 2014, the Azimut Group entered into a binding investment agreement to acquire the residual 40% of AZ Global Portfoy Yonetimi AS, becoming the sole shareholder. Furthermore, Azimut agreed to sell its 10% investment in Global Menkul Degerler AS to the latter company’s majority shareholder at market values.

16 Gruppo Azimut Upon completion of the authorisation process by the local competent authorities, Azimut, via its subsidiary AZ International Holdings Sa, will pay GYH a total of 1.3 million euro (including the sale of Global Menkul Degerler AS shares) .

Tax Position

On 29 November 2014, the Azimut Group reached an agreement with the Tax Au- thority to settle the tax disputes related to the Official Tax Audit Reports served between 2010 and 2013. Under the agreement, the Group undertakes to pay taxes and penalties of approximately 105.3 million euro (in addition to legal interest of about 11.8 million), related to tax periods from 2001 to 2013, mainly due to the review of the transfer pricing criteria applied to infragroup transactions. The Group paid the entire amount by 9 December 2014 for a total of approximately 91.8 million euro.

Bank of Italy’s inspection

On 2 October 2014, the Bank of Italy began an ordinary inspection of the Azimut Group, focusing on the companies belonging to the group of SIMs (investment companies). The inspection was completed on 13 February 2015. However, at the reporting date, the Bank of Italy had not yet issued its report.

Key risks Azimut holding spa and group: key risks For the purpose of risk monitoring, the Group has identified the main risks as follows: and uncertainties

Strategic risk Strategic risk is defined as a current or potential risk of a reduction in earnings or -ca pital as a result of changes in operations or of incorrect, inadequate decision-making and failure to respond to the competitive scenario. This risk depends firstly on the earnings profile generated by the sale of services and products by financial advisors, by the management of Funds and by incorrect or imprudent evaluation of market trends in terms of clients and products to be distributed. Sales activity is monitored through reports on the sales performance by geographic area and by financial products sold. Financial advisors and their respective Area Delegates/Area Managers (financial advisors responsible for coordinating specific areas of the country) also meet regularly to keep track of the market situation and take the relevant steps to preserve the competitiveness of each geographic area. Finally, market research and analysis by the research and marketing department is used to compare results to those of Azimut’s competitors and monitor the perfor-

17 Management report

mance of funds. Regular reports on results achieved, and particularly on the financial position of the Group, are fundamental to monitoring the outcome of strategic decisions taken by the company’s governance and control bodies, thus enabling them to identify any corrective measures to be taken.

Sales network risks The Group’s investment firms (Sim – società d’intermediazione mobiliare) mainly recruit financial advisors with years of experience in the field, gained while working for rival companies or in bank retail services. The process of recruiting individual advisors is strict and involves both local branches and the marketing departments of the subsidiary investment firms. Moreover, in addition to past experience, quali- fications and references gained on the market are also considered. In the case of the subsidiary Azimut Consulenza Sim, its horizontal structure requires that financial advisors are able to perform their jobs autonomously: by focusing on this aspect during recruitment, the company tends to avoid choosing inexperienced candidates. As regards AZ Investimenti Sim and Apogeo Consulting Sim, (which merged into Azimut Consulenza Sim Spa starting from 31 December 2014), their pyramid structures are organised to allow area managers to constantly monitor the individual advisors’ ability to manage their client portfolios. Furthermore, in order to limit the risks arising from any fraudulent action taken by financial advisors in the performance of their duties, Azimut Consulenza Sim Spa purposely entered into insurance policies against loyalty risks and professional liability insurance for the financial advisors themselves (with the maximum annual claims deemed adequate for said advisors to operate). Finally, the Sim’s marketing department works closely with the Internal Audit department to share the information required to monitor the conduct of individual financial advisors. Internal control over financial advisors is based on the identification and analysis of possible irregularities in remote monitoring and inspections at financial advisors’ offices. These controls are carried out also to check compliance with presentation criteria, correct keeping of archives and fulfilments vis-a-vis the Body in charge of the Financial Advisors’ register. Should any irregularity be detected, or in case of non-compliance with the code of conduct, the financial advisors directly involved or their In-charge are asked to prepare a specific report giving explanations or to take adequate measures.

18 Gruppo Azimut This procedure allows the companies to establish appropriate control and monitoring techniques, i.e. measures to limit the negative effects of any adverse conditions to which the Group is exposed. Given the presence of this type of risk, the Group has established the following measures to monitor and limit the effects: • mapping of main company processes, by means of an analysis of existing procedures and interviews with the heads of the various departments; • identification of risks within the mapped procedures; • evaluation of control measures (primary or secondary level) in respect of risk areas, highlighting any unmonitored situations; • definition and implementation of a reporting system via the Internal Control and Risk Management Committees, in order to report the final results on the unmonitored risks and any action taken.

Outsourcing risk Administrative and IT activities of the operating companies are outsourced to external companies. When the contracts with Objectway Financial Software Spa, BNP, ICBP and Deloit- te Enterprise Risk Service were signed, establishing the method used in the performance of the outsourced services, purposely created service level agreements were also drawn up to guarantee the adequacy of the services provided and allow the company to take action against the supplier in the event of any economic losses arising from problems in the supply of these services. Another measure to ensure that services are performed correctly was the creation of an Operating Committee, whose members come from both the Group’s operating companies affected by the agreement and the supplier company, to establish the procedures, define the timescales, and monitor the correct execution of all services provided. The Committee meets at least once a month and the participants are provided with a copy of the minutes of the meeting afterwards.

19 Management report

• the Marketing and Investor Relations departments, centralised at Group level, have sole responsibility for dealing with public relations/external communications and the company’s image; • an Internal Code of Conduct governs the treatment of any action that gives rise to conflicts of interest, cases of insider trading or market abuse and any penalties as a result of failure to comply with regulations. With the introduction of regulations for the treatment of privileged information pursuant to art. 115-b of Italian Legislative Decree no. 58/98 (TUF - Consolidated Law on Finance), Azimut Holding Spa established a Register for itself and on the behalf of its subsidiaries, by creating a database with the technical/operating features required to guarantee that logical and physical security requirements are met, records cannot be changed and that information is easily accessible.

Compliance risk Compliance risk is related to legal and administrative sanctions, significant financial losses or damage to reputation as a result of non-compliance with laws and regulations or internal procedures (e.g. by-laws, codes of conduct, corporate governance codes). Given that all levels of the company are exposed to this risk, limiting its effects mainly involves ensuring that personnel take adequate responsibility in the performance of their work by complying with the internal code of conduct, code of ethics and procedure manual. The Compliance department, within Azimut Consulenza Sim Spa, ensures that internal procedures are in line with the objective to prevent any breaches of current regulation or internal standards. In more detail, the Compliance department: • proposes any organisational and procedural changes to ensure adequate protection against any identified risks of non-compliance; • submits a report to all relevant bodies, including the Supervisory Body (pursuant to Italian Legislative Decree no. 231/2001), the Board of Statutory Auditors, the Inter- nal Control and Risk Management Committee; • controls the efficiency of organisational changes (structures, processes, procedures); • constantly monitors any changes to regulations governing the investment service sector, and circulates the relevant information to all parties concerned.

Financial risk As regards financial risks, proprietary trading by Group companies is exposed to market risks. Moreover, the financial instruments in question are easily liquidated and are monitored closely, most being mutual fund units managed by the Group companies. As for credit risk, there are no specific problems given the nature of the Group’s activity.

Liquidity risk Liquidity risk arises when the company is unable to gain access under reasonable economic conditions to the financial resources required to ensure its efficiency.

20 Gruppo Azimut 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 cash flow generation; • monitoring prospective liquidity conditions during planning procedure.

Key uncertainties

The uncertainties to which the Group is exposed derive from the specific nature of its core business, particularly as far as the strict correlation is concerned between income and certain types of fee items, the performance of which is determined by the results generated by the financial management of listed products and the performance in terms of capital generation. The generation of these revenues and the relative amount are by nature highly volatile and heavily influenced by the returns offered by the funds and the risk appetite of the clients during the period considered, factors that are in turn affected by the performance of reference markets and, more generally, of the national and international economies. There is therefore a risk that Group revenues and operating results may be weakened by prolonged financial market crises, which may eventually lead to low yields, to weak, if not even negative, net inflows of capital and, consequently, a reduction, sometimes significant, in the aforementioned fees.

The following information is given about the companies directly controlled by the Performance of Parent Company: subsidiaries • Azimut Consulenza Sim Spa, wholly owned, carries out unsecured placement and order receipt activities. Its net profit for the year amounts to 50,016,945 euro; • AZ Fund Management Sa, 51% owned, carries out mutual fund management activities. Its net profit for the year amounts to 178,772,044 euro; • AZ Life Ltd, wholly owned, carries out insurance activities. Its net profit for the year amounts to 13,455,167 euro; • Azimut Capital Management Sgr Spa, wholly owned, carries out mutual and speculative fund management activities. Its net loss for the year amounts to 34,172,594 euro; • Azimut Capital Management Ltd, wholly owned, carries out speculative fund management activities. Its net loss for the year amounts to 36,296 euro; • Azimut Global Counseling Srl, wholly owned, carries out advisory activities. Its net loss for the year amounts to 463,448 euro; • Azimut Enterprises Holding Srl, wholly owned, carries out equity investment management activities. Its net loss for the year amounts to 1,061 euro;

21 Management report

• Augustum Opus Sim Spa, 51% owned, carries out unsecured placement and order receipt activities. Its net profit for the year amounts to 1,956,388 euro; • AZ International Holdings Sa, wholly owned, carries out equity investment management activities. Its net profit for the year amounts to 341,166 euro. Specifically, over the years, with respect to the subsidiary AZ International Hol- dings Sa, the Azimut Group has pursued an international growth strategy which mainly translates into partnerships with local operators, the acquisition of majority investments in asset management and/or advisory companies and distribution companies. These partnerships, which are based in countries with qualified partners and socio/ economic prospects favourable to the development of asset management activities, may contribute to the development of the Group.

The list of AZ International Holdings Sa’s partnerships is given below:

Europe • Katarsis Capital Advisors Sa, 75% owned, which carries out actuarial and financial advisory activities; • Eskatos Capital Management Sarl, 75% owned through Katarsis Capital Advisors Sa, which carries out fund management activities; • AZ Swiss, 90% owned, which carries out advisory and assistance activities with respect to investments and vis-à-vis authorised intermediaries and institutional investors; • Compagnie de Gestion priveè Monegasque, 51% owned, which carries out asset management, financial advisory and order receipt and transmission activities; • CGM Italia Sim Spa, 51% owned through Compagnie de Gestion priveè Mone- gasque, which carries out asset management, order receipt and transmission and advisory activities.

Turkey • AZ Global Portfoy Yonetimi, 60% owned, which carries out asset management activities; • Notus Portfoy Yonetimy A.Ş, 70% owned, which carries out asset management activities for private and institutional clients.

South East Asia • AN Zhong (AZ) IM Limited, wholly owned, which carries out equity investment management activities; • AN Zhong (AZ) IM HK Limited, wholly owned through AN Zhong (AZ) IM Limi- ted, is a financial advisory company based in Hong Kong; • AZ Investment Management, wholly owned through AN Zhong (AZ) IM Limited, is a financial advisory company operating in the Chinese market; • AN Ping Investment, 51% owned, is a holding company; • Sinopro Financial Planning Taiwan Ltd, 51% owned through AN Ping Investment, is a Securities Investment Consulting Enterprise which distributes asset management products in Taiwan;

22 Gruppo Azimut • Athenaeum LTD, 55% owned, is an independent company based in Singapore which provides advisory services.

Latin America • AZ Brasil Holdings Ltda, wholly owned, is a Brazilian company which carries out equity investment management activities; • AZ Legan Partecipações Sa, 50% owned through AZ Brasil Holdings Ltda, is a Bra- zilian independent company which carries out asset management activities; • AZ Legan Administração de Rescursos, 49.90% owned through AZ Brasil Holdings • Ltda, is a Brazilian independent company which carries out asset management activities; • Profie Sa, 82.14% owned, is a Mexican holding company; • Mas Fondos Sa, 82.14% owned through Profie Sa, carries out distribution activities in the asset management sector.

Australia • Next Generation Advisory, 97% owned, is a financial advisory company.

The total loss of the above companies for 2014 amounts to 3,130 thousand euro (a profit of 2,670 thousand euro in 2013), while total assets under management amount to 2,032 thousand euro.

Pursuant to Consob Regulation on Related parties (Resolution no. 17221 of 10 Related party disclosures March 2010, as amended), on 22 November 2010, the Board of Directors of Azimut Holding Spa 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). With 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 2014. No other atypical or unusual transactions were performed. Disclosures on other related party transactions are provided in paragraph “Related Party Transactions” in Part D, Section 5 of the Notes to the consolidated financial statements.

Azimut Holding Spa complies with corporate governance regulations in force in Organisational structure Italy. Moreover, the corporate governance structure partially reflects the recommen- and corporate governance dations contained in the Code of Conduct for Listed Companies published by Borsa Italiana. For more information reference should be made to the attached Report on corporate governance and ownership prepared pursuant to Article 123-bis of the Consolidated Law on Finance (TUF). Azimut Holding Spa has established a risk management and internal control procedure for financial reporting, using as a reference the “COSO Report”, under which the Internal Control in the broadest sense is “a process effected by an entity’s Board

23 Management report

of Directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives”; specifically, the objective of reliable financial reporting. The key characteristics of the risk management and internal control over financial reporting are described in the Report on corporate governance and ownership.

Human resources Group personnel amounted to 305 employees at 31 December 2014, broken down as follows:

Position 2014 2013 Managers 60 50 Middle managers 91 71 Office staff 154 94 Total 305 215

The increase in the number of employees at 31 December 2014 over the previous year reflects the consolidation of recently acquired companies.

Research and The research and development activities undertaken by the Azimut Group focus development activities exclusively on the “production” of investment instruments and services and on the sale of these products: In particular, the research and development policies focus on the following: • research, development and realisation of investment instruments suited to clients’ needs; during 2014, these activities were focused on enhancing the range of products offered, as detailed in the “Significant events of the year” section of this report; • market analyses and surveys of current and potential client needs; • life insurance market analysis.

Secondary and branch The Irish insurance company AZ Life Ltd. has been authorised by the Insurance offices Industry Supervisory Body (IVASS) to engage in business activities in Italy as a per- manent establishment via a secondary office in Milan.

24 Gruppo Azimut At 31 December 2014, Azimut Holding Spa’s treasury share portfolio therefore stood at 10,488,633 shares, or 7.322% of share capital (10,703,695 shares at 31 December 2013). With regard to transactions subsequent to 31 December 2014, up to the date of approval of this report, 21,660 treasury shares were assigned against the exercise of the same number of warrants issued at the placement of the Subordinated Bond “Azimut 2009 - 2016 Subordinato 4%”.

Group total inflows were positive at approximately 795 million euro at 28 February Business outlook 2015. Total assets, including assets under custody, reached 32 billion euro, of which 29 billion euro relates to assets under management. Given the above figures and the positive results of the subsidiaries in early 2015, consolidated performance is expected to be positive this year. Nonetheless, this year’s financial position and results of operations will also be -af fected by financial market trends.

Milan, 12 March 2015

Chairman and CEO On behalf of the Board of Directors (Pietro Giuliani)

25 Management report

26 Gruppo Azimut Consolidated balance sheet at 31 December 2014

27 Consolidated balance sheet at 31 December 2014 Assets

Euro/000 31/12/2014 31/12/2013 Cash and cash equivalents 33 16 Financial assets measured at fair value 3,991,910 2,583,395 Available-for-sale financial assets 262,570 99,996 Receivables 341,453 573,895 Equity investments 7,538 3,038 Tangible assets 3,696 2,960 Intangible assets 394,940 369,250 Tax assets 80,811 89,415 a) current 54,947 50,978 b) deferred 25,864 38,437 of which pursuant to Italian Law 214/2011 840 Non-current assets held for sale and discontinued operations 734 75 Other assets 55,819 64,419 Total assets 5,139,504 3,786,459

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

28 Gruppo Azimut Consolidated profit and loss account at 31 December 2014 Liabilities and shareholders’ equity

Euro/000 31/12/2014 31/12/2013 Payables 99,010 106,164 Outstanding securities 216,685 228,608 Technical reserves where the investment risk is borne by policyholders 300,142 310,994 Financial liabilities measured at fair value 3,743,064 2,305,428 Other technical reserves 350 350 Tax liabilities 52,939 83,537 a) current 653 33,903 b) deferred 52,286 49,634 Other liabilities 54,787 36,659 Staff severance pay (TFR) 3,030 2,265 Provisions for risks and charges: 25,580 21,935 b) other provisions 25,580 21,935 Share capital 32,324 32,324 Treasury shares (-) (81,555) (82,224) Equity instruments 71,715 72,521 Share premium reserve 173,987 173,987 Reserves 349,059 334,077 Valuation reserves (481) (771) Profit (loss) for the year 92,096 155,753 Minority interest 6,772 4,852 Total liabilities and shareholders’ equity 5,139,504 3,786,459

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

29 Consolidated income statement at 31 December 2014

Items 01/01/2014 01/01/2013 Euro/000 31/12/2014 31/12/2013 Profits/losses on disposal or repurchase of: 3,989 270 a) financial assets 4,547 556 b) financial liabilities (558) (286) Net financial liabilities measured at fair value (199) (353) Fee and commission income 525,936 451,555 Fee and commission expense (227,821) (190,097) Interest income and similar income 6,605 9,033 Interest expense and similar charges (12,561) (3,069) Dividends and similar income 1 15 Net premiums 3,321 3,645 Net profits (losses) on financial instruments at fair value 99,924 61,943 through profit or loss Change in technical reserves where the investment risk is borne by 10,853 22,285 policyholders Redemptions and claims (86,449) (66,929) Total income 323,599 288,298 Adjustments/write-backs due to impairment of: (2,941) a) financial assets (2,941) Administrative costs (114,996) (96,684) a) personnel costs (48,008) (37,685) b) other administrative costs (66,988) (58,999) Net impairment and write-ups of tangible assets (1,166) (1,007) Net impairment and write-ups of intangible assets (4,997) (3,271) Net provisions for risks and charges (5,651) (2,383) Other operating income / costs (7,825) (2,448) Operating profit 186,023 182,505 Profit (loss) from equity investments (1,177) (265) Pre-tax profit (loss) from continuing operations 184,846 182,240 Income tax on profit from continuing operations (91,605) (26,361) Net profit (loss) from continuing operations 93,241 155,879 Profit (loss) for the year 93,241 155,879 Profit (loss) for the year attributable to minority interest 1,145 126 Parent Company profit (loss) for the year 92,096 155,753

Basic earnings per share 0.680 1.168 Diluted earnings per share 0.680 1.168

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

30 Gruppo Azimut Consolidated statement of comprehensive income

Items 01/01/2014 01/01/2013 Euro/000 31/12/2014 31/12/2013 Profit (loss) for the year 93,241 155,879 Other comprehensive income, net of taxes, not transferred to profit or loss Tangible assets Intangible assets Defined benefit plans (179) (44) Non-current assets held for sale Portion of valuation reserves of associates measured at equity Other comprehensive income, net of taxes, transferred to profit or loss Foreign investment hedge Exchange rate differences (1,047) (852) Cash flow hedge Available-for-sale financial assets 1,516 (805) Non-current assets held for sale Portion of valuation reserves of associates measured at equity Total other comprehensive income/(expense), net of taxes 290 (1,701) Comprehensive income (Item 10+130) 93,531 154,178 Consolidated comprehensive income attributable to minority interest 1,145 126 Consolidated comprehensive income attributable to parent company 92,386 154,052

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

31 Consolidated statement of changes in shareholders’ equity for the year ended 31 December 2014

Allocation of retained earnings Change during the year Shareholders’ equity transactions Items Balance Change in Balance Reserves Dividends Changes Issue of new Treasury Extraordinary Changes Other Consolidated Group Shareholders’ at 31/12/13 opening at 01/01/14 and other in reserves shares share dividend in equity changes comprehensive shareholders’ equity balance distributions purchases payments instruments income for equity at attributable to 2014 31/12/14 monority interest at 31/12/2014 Share capital 32,324 32,324 32,324 5,137 Share premium reserve 173,987 173,987 173,987 Other reserves: a) income-related 349,081 349,081 38,905 387,986 763 b) other (15,004) (15,004) 806 (24,729) (38,927) Valuation reserves (771) (771) 290 (481) (273) Equity instruments 72,521 72,521 (806) 71,715 Treasury shares (82,224) (82,224) (7,691) 8,360 (81,555) Profit (loss) for the year 155,753 155,753 (38,905) (116,848) 92,096 92,096 1,145

Group shareholders’ equity 685,667 685,667 (116,848) (7,691) (16,369) 92,386 637,145 Shareholders’ equity attributable to minority interest 4,852 4,852 775 1,145 6,772

32 Gruppo Azimut Allocation of retained earnings Change during the year Shareholders’ equity transactions Items Balance Change in Balance Reserves Dividends Changes Issue of new Treasury Extraordinary Changes Other Consolidated Group Shareholders’ at 31/12/13 opening at 01/01/14 and other in reserves shares share dividend in equity changes comprehensive shareholders’ equity balance distributions purchases payments instruments income for equity at attributable to 2014 31/12/14 monority interest at 31/12/2014 Share capital 32,324 32,324 32,324 5,137 Share premium reserve 173,987 173,987 173,987 Other reserves: a) income-related 349,081 349,081 38,905 387,986 763 b) other (15,004) (15,004) 806 (24,729) (38,927) Valuation reserves (771) (771) 290 (481) (273) Equity instruments 72,521 72,521 (806) 71,715 Treasury shares (82,224) (82,224) (7,691) 8,360 (81,555) Profit (loss) for the year 155,753 155,753 (38,905) (116,848) 92,096 92,096 1,145

Group shareholders’ equity 685,667 685,667 (116,848) (7,691) (16,369) 92,386 637,145 Shareholders’ equity attributable to minority interest 4,852 4,852 775 1,145 6,772

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

33 Consolidated statement of changes in shareholders’ equity for the year ended 31 December 2013

Allocation of retained earnings Change during the year Shareholders’ equity transactions Items Balance Change in Balance Reserves Dividends Changes Issue of new Treasury Extraordinary Changes Other Consolidated Group Shareholders’ at 31/12/12 opening at 01/01/13 and other in reserves shares share dividend in equity changes comprehensive shareholders’ equity balance distributions purchases payments instruments income at equity at attributable to (*) 31/12/13 31/12/13 monority interest at 31/12/2013 Share capital 32,324 32,324 32,324 3,822 Share premium reserve 173,987 173,987 173,987 Other reserves: a) income-related (*) 284,299 59 284,358 64,723 349,081 988 b) other (3,085) (3,085) 1,943 (13,862) (15,004) Valuation reserves (*) 989 (59) 930 (1,701) (771) (84) Equity instruments 39,515 39,515 33,006 72,521 Treasury shares (99,143) (99,143) (1,454) 18,373 (82,224) Profit (loss) for the year 160,695 160,695 (64,723) (95,972) 155,753 155,753 126

Group shareholders’ equity 589,581 589,581 (95,972) (1,454) 34,949 4,511 154,052 685,667 Shareholders’ equity attributable to minority interest 1,209 1,209 (245) 3,762 126 4,852

34 Gruppo Azimut Allocation of retained earnings Change during the year Shareholders’ equity transactions Items Balance Change in Balance Reserves Dividends Changes Issue of new Treasury Extraordinary Changes Other Consolidated Group Shareholders’ at 31/12/12 opening at 01/01/13 and other in reserves shares share dividend in equity changes comprehensive shareholders’ equity balance distributions purchases payments instruments income at equity at attributable to (*) 31/12/13 31/12/13 monority interest at 31/12/2013 Share capital 32,324 32,324 32,324 3,822 Share premium reserve 173,987 173,987 173,987 Other reserves: a) income-related (*) 284,299 59 284,358 64,723 349,081 988 b) other (3,085) (3,085) 1,943 (13,862) (15,004) Valuation reserves (*) 989 (59) 930 (1,701) (771) (84) Equity instruments 39,515 39,515 33,006 72,521 Treasury shares (99,143) (99,143) (1,454) 18,373 (82,224) Profit (loss) for the year 160,695 160,695 (64,723) (95,972) 155,753 155,753 126

Group shareholders’ equity 589,581 589,581 (95,972) (1,454) 34,949 4,511 154,052 685,667 Shareholders’ equity attributable to minority interest 1,209 1,209 (245) 3,762 126 4,852

(*) The figures were restated compared to the originally published figures due to the retrospective application of the new version of IAS 19.

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

35 Consolidated cash flow statement

Indirect method 2014 2013 A. Operating activities 2013 2012(*) 1. Operations 23,059 164,829 profit (loss) for the year (+/-) 93,241 155,879 profits/losses on held-for-trading financial assets and financial assets/liabilities measured at fair value (-/+) (101,669) (32,913) profits/losses on hedging activities (-/+) net impairment losses (+/-) 2,941 net impairment losses on tangible and intangible assets (+/-) 6,163 4,278 net accruals to provisions for risks and charges and other expenses/income (+/-) 5,651 2,383 tax and duties still to be paid (+) 15,480 35,672 net impairment losses on assets held for sale, net of tax (+/-) other changes (+/-) 1,252 (470) 2. Cash generated from or used by financial assets (1,300,555) (1,052,063) held-for-trading financial assets financial assets measured at fair value (1,306,846) (1,008,385) available-for-sale financial assets (1) due from banks 33 (778) due from financial institutions (3,528) (2,302) due from clients (407) (1,483) other assets 10,193 (39,114) 3. Cash generated from or used by financial liabilities 1,382,119 1,203,971 due to banks (13,545) (32,547) due to financial institutions (3,059) 441 due to clients (521) 361 outstanding securities (12,041) 193,247 held-for-trading financial liabilities financial liabilities measured at fair value 1,437,636 1,076,832 technical reserves (10,852) (22,285) other liabilities (15,499) (12,078) Net cash generated from or used by operating activities 104,623 316,737

36 Gruppo Azimut 2014 2013 B. Investing activities 1. Cash generated from: 75 411 disposal of equity investments 186 dividends 15 disposal of held-to-maturity financial assets 75 210 disposal of tangible assets disposal of intangible assets disposal of subsidiaries and business units 2. Cash used by: (41,724) (16,041) purchase of equity investments (9,618) (1,586) purchase of held-to-maturity financial assets purchase of tangible assets (1,902) (1,521) purchase of intangible assets (13,738) (6,832) purchase of subsidiaries and business units (16,466) (6,102) Net cash generated from or used by investment activities (41,649) (15,630) C. Financing activities issue/purchase of treasury shares 669 16,919 change in other reserves (24,585) (13,620) change in capital and reserves attributable to minority interest 2,390 3,643 issue/purchase of equity instruments (806) 33,006 dividends and other distributions (116,848) (95,972) Net cash generated from (or used by) financing activities (139,180) (56,024) Net cash provided (or used) for the year (76,206) 245,083

Reconciliation 2014 2013 Opening cash and cash equivalents 645,549 400,466 Total net cash generated/used for the year (76,206) 245,083 Closing cash and cash equivalents 569,343 645,549

Reference should be made to the paragraph on the “Consolidated net financial debt” of the Report on Operations for a breakdown of “Cash and cash equivalents”.

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

37 38 Gruppo Azimut Notes to the consolidated accounts at 31 December 2014

39 40 Gruppo Azimut Notes to the consolidated financial statements

Part A - Accounting policies

A.1 General information

The consolidated financial statements comply with the International Accounting Section 1 Standards (IAS) / International Financial Reporting Standards (IFRS) endorsed by Statement of compliance the European Commission, pursuant to (EC) Regulation No. 1606/2002 issued by with IAS/IFRS the European Parliament and Council and effective at the date these consolidated financial statements were approved, as well as with every relevant applicable interpretation, and the provisions issued to implement Article 9 of Italian Legislative Decree no. 38/2005.

These consolidated financial statements have been drawn up in accordance with the Section 2 instructions issued by the Bank of Italy set out in the Regulation dated 22 December General reporting criteria 2014, with particular reference to the schedules and information to be provided in the notes to the financial statements, which are expressly set out in said Regulation for financial companies that are parent companies of stock brokerage companies, adequately adapted to best represent the financial position and results of operations of the Group, which includes asset management companies and an insurance company. In particular, since the scope of consolidation encompasses the Irish insurance company AZ Life Ltd, 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 technical aspects of the consolidated financial statements of insurance companies drawn up on the basis of IFRS. In accordance with the provisions set forth in Article 5, paragraph 2 of Italian Legi- slative Decree no. 38 dated 28 February 2005, the consolidated financial statements have been drawn up by adopting the euro as the reporting currency. Figures are reported in thousands of euro, unless otherwise specified. The consolidated financial statements comprise 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 notes are composed of: Part A - Accounting policies Part B - Notes to the Balance Sheet Part C - Notes to the Income statement Part D - Other information

41 Notes to the consolidated financial statements

These consolidated 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 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 is uncertain, an overall valuation of the past and current financial position of the Group, its operating guidelines, business model and the risks to which business activity is exposed2, which reveals no abnormalities, 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 consolidated financial statements have been prepared clearly and give a true and fair view of the Group’s financial position and results of operations. Transactions and other events have been recognised and presented in accordance with the principle of substance over form. As stated above, these consolidated financial statements have been prepared on a going concern and accrual basis, using the historic cost, save for the measurement of certain financial assets and liabilities, measured at fair value. Assets and liabilities, costs and income have not been offset against each other, unless required or permitted by a standard or interpretation.

Accounting standards, amendments and interpretations in force from 1 January 2014 The following accounting standards, amendments and interpretations were applied for the first time starting from 1 January 2014. On 12 May 2011, the IASB issued IFRS 10 - Consolidated Financial Statements which will supersede IAS 27 - Consolidated and Separate Financial Statements, to the extent related to consolidated financial statements, and SIC-12 Consolidation - Special purpose entities. IAS 27 was renamed Separate Financial Statements and governs the accounting treatment of equity investments in separate financial statements. The new standard introduces the following main changes: • under IFRS 10, there is only one fundamental principle for the consolidation of all types of entities, and this principle is based on control. This change removes the inconsistency between the previous IAS 27 (based on control) and SIC 12 (based on the transfer of risks and rewards); • a firmer definition of control was introduced, based on three elements: (a) the investor’s power over the acquired enterprise; (b) exposure or rights to variable returns from the investor’s involvement with the investee; (c) the ability of the investor to affect those returns through its power over the investee; • IFRS 10 requires an investor, if it wishes to assess whether it has control over the acquired enterprise, to focus on the activities that significantly affect its returns; • IFRS 10 requires that only substantive rights be considered in assessing the existence of control, namely those that can be exercised in practice when important decisions

1 Examples of which are shown in Audit Standard n. 570 on “Going Concerns”. 2 As described in the Management Report

42 Gruppo Azimut are to be taken concerning the acquired enterprise; • IFRS 10 gives practical guidance in order to help in the assessment of whether there is control in complex situations, such as de facto control, potential voting rights, situations in which it has to be established whether the decision-maker is acting as agent or principal, etc.. Generally speaking, the application of IFRS 10 requires a significant degree of judgement on a certain number of application matter. On 12 May 2011, the IASB issued IFRS 11 - Joint Arrangements which replaces IAS 31 - Interests in Joint Ventures and SIC 13 - Jointly Controlled Entities - Non- Monetary Contributions by Venturers. Without prejudice to the criteria to identify joint control, IFRS 11 provides that joint arrangements be classified as a joint operation or a joint venture based on an analysis of the underlying contractual rights and obligations. On 12 May 2011, the IASB issued IFRS 12 - Disclosure of Interests in Other En- tities, a new comprehensive standard applicable to the additional disclosure to be provided on any types of interests, including in subsidiaries, joint arrangements, associates, special purpose vehicles and other unconsolidated vehicles. On 16 December 2011, the IASB issued some amendments to IAS 32 – Financial Instruments: presentation clarifying the application of some criteria to offset the financial assets against financial liabilities included in IAS 32. The amendments apply retrospectively to annual periods beginning on or after 1 January 2014. On 28 June 2012, the IASB issued the document Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Gui- dance (Amendments to IFRS 10, IFRS 11 and IFRS 12). This document clarifies the transition rules for IFRS 10 - Consolidated Financial Statements, IFRS 11 - Joint Arrangements and IFRS 12 - Disclosure of Interests in Other Entities. On 31 October 2012, the IASB issued some amendments to IFRS 10, IFRS 12 and IAS 27 – Separate Financial Statements. These amendments introduce an exception to the consolidation requirements for investment entities, unless their subsidiaries provide services which refer to the companies’ investment activities. Under these amendments, investment entities are required to measure their subsidiaries at fair value. On 29 May 2013, the IASB issued some amendments to IAS 36 - Recoverable amount disclosures for non-financial assets. The amendments govern recoverable disclosures for assets (including goodwill) or cash-generating units (CGUs). When the recoverable amount is based on fair value less costs to sell, they only apply to assets or cash generating units subject to impairment losses or reversals of impairment losses during the year. On 27 June 2013, the IASB issued some amendments to IAS 39 - Financial instruments: Recognition and Measurement, named “Novation of derivatives and continuation of hedge accounting.” Under these amendments, there is no need to di- scontinue hedge accounting (IAS 39) if a hedging derivative, designated as a hedge, is novated following the application of laws and regulations, to replace the original central counterparty. On 20 May 2013, the IASB issued IFRIC 21 - Levies which provides guidance on when to recognise a liability for a levy (other than income taxes) imposed by a go-

43 Notes to the consolidated financial statements

vernment. This interpretation covers the liabilities for levies which fall under the scope of IAS 37 - Provisions, Contingent Liabilities and Contingent Assets, and those whose timing and amount are known. The adoption of the above amendments has had no significant impact on the consolidation of the Group’s equity investments, financial position and results of operations for the year.

Documents endorsed by the EU and applicable as of 1 January 2015. The new standards and interpretations already issued but not yet into force or not yet endorsed by the European Union and, consequently, not applicable to the consolidated financial statements at 31 December 2014, are listed below.

IFRS applicable to annual periods beginning on or after 1 July 2014 (IASB effective date)

Standard/amendment/ interpretation Endorsed Amendments to IAS 19, Employee contributions To be endorsed on defined benefit plans Annual improvements 2010-2012: 17 December 2014 (EU endorsement date: IFRS 2, ‘Share-based payment’ 1 February 2015) IFRS 3, ‘Business combinations’ IFRS 8, ‘Operating segments’ IAS 16, ‘Property, plant and equipment’, and IAS 38, ‘Intangible assets’ IAS 24, Related parties disclosures Annual improvements 2011-2013: 18 December 2014 (EU endorsement date: IFRS 3, ‘Business combinations’ 1 January 2015) IFRS 13, ‘Fair value measurement’ IAS 40, ‘Investment property’

The Group is still completing the analysis of the effects arising from the introduction, as of next year, of the above documents, where applicable. EU endorsement is still pending for the standards and the amendments applicable to annual periods beginning on or after 1 January 2016 (“IASB effective date”).

Section 3 On 21 January 2015, the Azimut Group entered into an investment and a sharehol- Significant events after the ders’ agreement with Bosphorus Capital Portfoy Yonetimi to start a Turkish partner- reporting date ship in the asset management sector. Upon completion of the authorisation process by the competent authorities, Azimut, via AZ International Holdings Sa, will acquire 70% of Bosphorus. The transaction will entail a shareholders’ consideration of approximately 7.4 million euro which may be adjusted based on the achievement of specific targets and considering the company’s cash position at the date the transaction is completed.

44 Gruppo Azimut On 29 January 2015, Azimut Holding Spa completed the acquisition of 55% of Fu- turimpresa Sgr Spa, the asset management company of the Milan, Bergamo, Brescia and Como Chambers of commerce. The acquisition was carried out by means of a reserved capital increase of approximately 2,5 million euro.

On 27 February 2015, through AZ FuturaInvest, the Azimut Group completed the acquisition of 50% of LFI Investimentos Ltda, an independent wealth management company based in Sao Paolo (Brazil). The transaction entails a disbursement of approximately 2.6 million euro to be paid to LFI’s founding members in four instalments over the next five years, based on the achievement of the specific results for the above period.

The consolidated financial statements were authorised for publication by Azimut Holding Spa’s Board of Directors on 12 March 2015.

Use of estimates Section 4 The consolidated financial statements have been prepared using estimates and as- Other information sumptions which have an effect on recognised income, costs, assets and liabilities and the corresponding notes. 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.

The Azimut Group consolidation scope has been established in accordance with Section 5 IFRS 10. Specifically, subsidiaries are those companies in respect of which the Azi- Consolidation scope and mut Group is exposed, or has rights, to variable returns from its involvement with the methods investee and has the ability to affect those returns through its power over the investee. Control exists only when the following elements simultaneously exist: - the power to direct the relevant activities; • exposure, or rights, to variable returns from its involvement with the investee; • the ability to use its power over the investee to affect the amount of its returns. Specifically, when assessing control, the Azimut Group considers the following factors: • the investee’s scope and structure to identify the objectives of the entity, its relevant activities, i.e., the activities that significantly affect the investee’s returns and, as such, are governed;

45 Notes to the consolidated financial statements

• the power, in order to understand whether the Group has contractual rights that give it the current ability to direct the relevant activities; the exposure to variability of returns from the investee, in order to determine whe- • ther the Group’s return can potentially change based on the investee’s results. Subsidiaries have been consolidated on a line-by-line basis, assuming all balance sheet and income statement aggregates of these companies. The carrying amount of equity investments is offset against the residual equity of the subsidiary after allo- cating 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. The assets, liabilities, costs and income generated by transactions among consolidated companies have been eliminated in full. Where necessary, the financial statements of consolidated companies prepared using different accounting standards were adjusted to comply with the Group’s accounting policies. 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. These companies are consolidated using the equity method whereby on initial recognition the investment in 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 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. Furthermore, the line-by-line consolidation scope excludes the Unit Linked Fun- ds (insurance internal funds) in which the Azimut Group does not hold any equity investment and to which the IFRS 10 definition of control applies. 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, as well as the operational, compliance and reputational risks typical of the sector in which the Group operates.

46 Gruppo Azimut Compared to 31 December 2013, the consolidation scope saw the entry of the following companies: • Azimut Enterprises Holding Srl set up on 14 May 2014 and wholly owned by Azimut Holding Spa; • Augustum Opus Sim Spa acquired on 27 June 2014 and 51% owned by Azimut Holding Spa; • Profie Mexicana Sa, a Mexican company, acquired on 23 October 2014, whose share capital is held by AZ International Holdings Sa (82.14%) and by third parties (17.86%); • AZ Notus Portfoy Yonetimi AS, based in Turkey, acquired on 22 October 2014, whose share capital is held by AZ International Holdings Sa (70%) and by third parties (30%); • Next Generation Advisory, an Australian advisory company, set up on 3 November 2014, whose share capital is held by AZ International Holdings Sa (93%) and by third parties (7%).

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, and for the income statement, using the average exchange rate for the year. The differences arising from the translation of opening shareholders’ equity using closing rates, along with those triggered by the use of closing and average exchange rates are classified under the specific item “foreign exchange differences” in the valuation reserve.

47 Notes to the consolidated financial statements

Graphical representation of the group at 31 December 2014 is as follows:

Azimut Holding Spa

Parent company

AZ Fund Azimut Capital AZ Capital AZ International Management Sa Management Sgr Management Ltd Holdings Sa Spa

(100%) (100%) (100%) (100%) Luxembourg Italy Ireland Luxembourg

Augustum Azimut AN Zhong AZ Brazil Opus Sim Spa Consulenza Sim Spa (AZ) IM Limited Holdings Ltda

(51%) (100%) (100%) (100%) Italy Italy Hong Kong Brazil

AZ Life Ltd Azimut Global Azimut AN Zhong (AZ) AZ Investment AZ Global Notus Portfoy AZ Legan AZ FI Holding Sa Counseling Srl Enterprise IM Limited Management Portfoy Yonetimi Yonetimi Participações Sa Holding Srl

(100%) (100%) (100%) (100%) (100%) (60%) (70%) (50%) (50%) Ireland Italiy Italiy Hong Kong China Turkey Turkey Brazil Brazil

AZ Legan M&O Consultoria Administração de Ltda Recursos Ltda

(99,5%) (100%) Brazil Brazil

Futura Invest Gestao de Recursos Ltda

(100%) Brazil

Atheneaum Ltd Katarsis Compagnie de AN Ping AZ Swiss Sa Profie Mexicana Next Generation Capital Gestion Priveè Investment Advisory Advisors Sa Monegasque (CGM) (55%) (75%) (51%) (51%) (90%) (82,14%) (93%) Singapore Switzerland Monaco Taiwan Switzerland Mexico Australia

Eskatos CGM Italia Sim Sinopro Mas Fondos Sa Capital Financial Management Planning Sarl Taiwan Ltd (100%) (100%) (100%) (100%) Switzerland Italy Taiwan Mexico

48 Gruppo Azimut Wholly and jointly-owned subsidiaries

Company name Registered Type of Stake % of voting rights office ownership (*) Shareholder % stake A. Fully consolidated, wholly-owned companies 1. Azimut Capital Management Sgr Spa Milan 1 Azimut Holding Spa 51 51 Azimut Consulenza Sim Spa 49 49 2. Azimut Consulenza Sim Spa Milan 1 Azimut Holding Spa 100 100 3. AZ Fund Management Sa Luxembourg 1 Azimut Holding Spa 51 51 Azimut Consulenza Sim Spa 49 49 4. AZ Life Ltd Dublin 1 Azimut Holding Spa 100 100 5. AZ Capital Management Ltd Dublin 1 Azimut Holding Spa 100 100 6. AZ International Holdings Sa Luxembourg 1 Azimut Holding Spa 100 100 7. AN Zhong (AZ) IM Hong Kong 1 AZ International Holdings Sa 100 100 8. AN Zhong (AZ) IM HK Hong Kong 1 AN Zhong (AZ) IM 100 100 9. AZ Investment Management Shanghai 1 AN Zhong (AZ) IM 100 100 10. Compagnie de Gestion priveè Monegasque Monaco 1 AZ International Holdings Sa 51 51 11. CGM Italia Sim Spa Milan 1 Compagnie de Gestion priveè Monegasque 51 51 12. Global Portfoy Yonetimi Turkey 1 AZ International Holdings Sa 60 60 13. Katarsis Capital Advisors Sa Lugano 1 AZ International Holdings Sa 75 75 14. Eskatos Capital Management Sarl Luxembourg 1 Katarsis Capital Advisors Sa 75 75 15. AZ Swiss Sa Lugano 1 AZ International Holdings Sa 90 90 16. Azimut Global Counseling Srl Milan 1 Azimut Holding Spa 100 100 17. AN Ping Investment Taiwan 1 AZ International Holdings Sa 51 51 18. Sinopro Financial Planning Taiwan Ltd Taiwan 1 AN Ping Investment 51 51 19. Atheneaum Ltd Singapore 1 AZ International Holdings Sa 55 55 20. AZ Brasil Holdings Ltda Brazil 1 AZ International Holdings Sa 100 100 21. AZ Legan Participações Sa Brazil 1 AZ Brasil Holdings Ltda 50 50 22. AZ Legan Administração de Recursos Ltda. Brazil 1 AZ Legan Participações Sa 49.9 49.9 23. Azimut Enterprises Holding Srl Milan 1 Azimut Holding Spa 100 100 24. Augustum Opus Sim Spa Milan 1 Azimut Holding Spa 51 51 25. Notus Portfoy Yonetimi AS Turkey 1 AZ International Holdings Sa 70 70 26. Profie Mexicana Sa Mexico 1 AZ International Holdings Sa 82.14 82.14 27. Mas Fondos Sa Mexico 1 AZ International Holdings Sa 100 100 28. Next GenerationAdvisory Australia 1 AZ International Holdings Sa 93 93 B. Companies consolidated on a proportional basis (*) Type of ownership: (1) majority of voting rights at ordinary shareholders’ meetings

49 Notes to the consolidated financial statements

2. Significant valuations and assumptions used to determine the consolidation scope

The 49.9% investment in AZ Legan Participações Sa held by AZ Brasil Holding Ltda was consolidated in accordance with specific contractual provisions whereby the Azimut Group, inter alia, exercises control over the powers assigned to management to reflect the Group in the company.

Investments measured at equity Name Registered Stake % of voting office rights Shareholder % stake Associates measured at equity 1. Programma 101 Spa Italy Azimut Enterprises Holding Srl 43 43 2. Siamosoci Srl Italy Azimut Enterprises Holding Srl 22 22 3. AZ FI Holding Sa Brazil AZ Brasil Holdings Ltda 50 50 4. M&O Consultoria Ltda Brazil AZ Brasil Holdings Ltda 50 50 5. FuturaInvest Gestao de Recursos Ltda Brazil AZ Brasil Holdings Ltda 50 50

The investments in the associates M&O Consultoria Ltda FuturaInvest and Gestao de Recursos Ltda wholly owned by AZ FI Holding S.A which, in turn, is 50% held by AZ Brasil Holding Sa, acquired on 13 February 2014 through AZ International Holdings S.A., are consolidated using the equity method in accordance with IAS 28 since the governance methodology and structure do not enable the Azimut Group to exercise control.

2. Other information

Compagnie de Gestion privèe Monegasque SAM and CGM Italia Sim Spa 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). The equity investment in Katarsis Capital Advisors Sa (50% up to 16 November 2012) was consolidated using the equity method up to the above purchase date by an additional 25% (16 November 2012). As of that date, the investment was consolidated in accordance with IFRS 3 using the step acquisition method: specifically, fair value was calculated at the date control of the investment already held was acquired; it was then compared to the carrying amount obtained from application of the

50 Gruppo Azimut equity method, taking any difference to profit or loss. Finally, goodwill was calculated as the difference between the sum of fair value of the 50% share already held, the consideration paid (25%), shareholders’ equity attributable to minority interest and the net fair value of acquired assets and assumed liabilities. The residual 25% of the company’s share capital, considering the put option set out in the contractual arrangements in favour of the shareholder which holds the option is presented as a financial liability measured at fair value, to the extent of the present value of the estimated consideration to be paid for the purchase. The 51% equity investment in Augustum Opus Sim Spa, acquired on 27 June 2014, was consolidated on a line-by-line basis and the difference between the net fair value of assets and liabilities at 30 June 2014 (the closest date to acquisition), i.e. with respect to the financial position at the same date, and the cost of the equity investment of 10,000 thousand euro on the acquisition date, was recognised as goodwill (8,893 thousand euro). The residual 49% of the company’s share capital, considering the put option set out in the contractual arrangements in favour of the minority shareholders which hold the option is presented as a financial liability measured at fair value, to the extent of the present value of the estimated consideration to be paid for the purchase. The equity investments held in the foreign companies AN Ping Investment (51%), Athenaeum Ltd (55%) and AZ Legan Administracao de Resursos Ltda (49.90%), which were purchased in the previous year, and those in Profie Mexicana Sa (82.14%) and AZ Notus Portfoy Yonetimi AS (70%), which were purchased during the year, have been consolidated on a line-by-line basis and the difference between the net fair value of acquired assets and assumed liabilities and the carrying amount of the equity investment at the purchase date was considered as goodwill for all the above companies. Goodwill was calculated using the “partial goodwill” method, being the difference between the consideration paid less the percentage of the fair value of identifiable acquired assets and assumed liabilities. The residual equity investments considering the put option set out in the contractual arrangements in favour of the shareholders which hold the option are presented as a financial liability measured at fair value, to the extent of the present value of the estimated consideration to be paid for the purchase. For information on goodwill (subsequently also referred to as “goodwill on consolidation” in order to distinguish it from the goodwill of Azimut Holding Spa), the consideration paid to purchase these equity investments and the measurement of put options (where applicable), reference should be made to “Section 11 – Intangible assets”, “Significant events of the year” and “Accounting policies” of these consolidated financial statements. The positive differences between the equity investments consolidated on a line-by- line basis and the related net fair value of the acquired assets and assumed liabilities, were considered as goodwill on consolidation and tested for impairment to check the adequacy of the amount recognised.

A.2 Key financial statements items This section describes the main accounting policies and valuation criteria adopted for the preparation of these consolidated financial statements. Said policies and cri-

51 Notes to the consolidated financial statements

teria have been applied consistently throughout the years presented.

Financial assets measured This category includes investments relating to insurance contracts (unit-linked po- at fair value licies) issued by the subsidiary AZ Life Ltd where the investment risk is borne by policyholders and comprise UCI units. These financial assets are measured at the market price corresponding to the price on the last day of trading during the reference period. The differences compared to the carrying amounts, corresponding to the purchase cost, are taken to profit or loss. Financial assets are derecognised when the contractual rights to the cash flows generated by the assets in question expire or when the financial asset is sold and all the related risks and benefits are transferred.

Available-for-sale financial Financial assets held by the Group companies are classified in this category in the assets context of liquidity management policies. This category also includes equity investments, which do not qualify as subsidiaries, associates or jointly-controlled entities. Upon initial recognition, Available-for-sale financial assets are recognised at their fair value, which usually corresponds to the consideration paid for their purchase, plus any transaction costs in the event that they are tangible and definable. They are subsequently recognised at their fair value, recognising any fair value profits or losses in the specific shareholders’ equity reserve (“Valuation reserves”) until disposal or impairment. The fair value of Available-for-sale financial assets is calculated based on the quoted prices in active markets or internal valuation models as described in the section on “Fair value hierarchy”. Impairment losses are recognised in the income statement when the purchase cost, net of any repayment of principal and amortisation, exceeds the recoverable amount. The cumulative profit or loss generated previously recognised in shareholders’ equity is reversed to profit or loss upon disposal or recognition of the impairment loss. When the reasons underlying the impairment loss cease to exist, the impairment loss is reversed directly against the shareholders’ equity reserve, in the case of equity instruments, and in profit or loss, in the case of debt instruments. Available-for-sale financial assets are derecognised when the contractual rights to receive the relevant cash flows cease to exist or upon transfer of all risks and rewards incidental to ownership. Assets which do not qualify as subsidiaries, associates or jointly-controlled entities, are not listed on active markets and for which the fair value cannot be measured reliably, are measured at cost. At the end of each year, impairment tests are carried out to establish which financial assets are to be impaired. This test is performed for each individual financial instrument, considering the impairment effects in accordance with IAS 39. Financial assets are derecognised when the contractual rights to the cash flows generated by the assets expire or when the asset is sold and all the risks and rewards of

52 Gruppo Azimut ownership have been transferred. With respect to impairment testing, the Company employs a specific policy that sets the limits in terms of severity and of durability, both according to the type of financial instrument. Specifically, the benchmarks in terms of severity are as follows:

1. for debt instruments3 loss of 20% 2. for other financial instruments 4: ” loss of 30%

Durability is assessed based on a timescale of 18 months for debt instruments and 24 months for other financial instruments: specifically, the fair value of each financial instrument is measured to establish if it was consistently lower than the corresponding initial cost over the last 18 or 24 months. For “other financial instruments”, in the event that the benchmarks are reached, the impairment loss is recognised in the income statement. “Debt financial instruments” which exceeded the relative benchmarks are subject to further qualitative assessment in order to establish the durability and severity of the losses, so as to confirm or refute any impairment decision.

Receivables include the amounts due from banks, from financial institutions, from Receivables clients, financial advisors and managed funds, or all receivables involving fixed or -de terminable payments and which are not listed on an active market. As this mainly involves trade receivables, they are measured at their estimated realisable value, being the best possible estimate of their fair value. Conversely, receivables relating to loans to financial advisors, initially recognised at their fair value equal to the amount granted, are subsequently measured at amortised cost that coincides with the initial value, since no additional transaction costs are expected and since such loans are granted at market rates (Euribor plus spread). They are derecognised once settled.

Following the coming into force of IFRS 10 starting from 1 January 2014, an entity Equity investments is controlled when the investor simultaneously has: a) power over the investee; b) exposure, or rights, to variable returns from involvement with the investee; c) the ability to use its power over the investee to affect the amount of its returns. Control is exercised when an investor is able to exercise voting rights sufficient to determine the investee’s operating and financing policies. In complex cases, the definition of control provides for the exercise of judgement reflecting: • the nature of relevant activities; • the approach used to decide on these activities;

3 Money market instruments, bonds, money market mutual funds and bond funds. 4 Securities, equity, balanced and flexible funds, private equity and hedge funds.

53 Notes to the consolidated financial statements

• whether the investors’ rights give the current ability to direct these activities; • whether the investor is exposed or has rights to variable returns from involvement with the investee; • whether the investor has the ability to affect those returns through its power over the investee. Equity investments include the stakes held in associates measured using the equity method. In accordance with IAS 28, associates exist when the investor exercises significant influence over an investee. Significant influence is the power to participate in the financial and operating policy decisions but not control them. A holding of 20% or more of the voting power (directly or through subsidiaries) usually indicates significant influence. The equity method stipulates that the investment is initially recognised at cost and is subsequently adjusted to reflect the share of the profit (or loss) of the associate after the date of acquisition. The differences between the value of the equity investment and the associate’s shareholders’ equity are included in the associate’s carrying amount, whereas the share of the profits/(losses) generated during the year by the associate in question is recognised in the consolidated income statement. Minority interest does not include any potential voting rights. Since goodwill included in the carrying amount of a given investment in an associate is not recognised separately, this value is not subjected to a separate impairment test, in line with the provisions set forth in IAS 36 Impairment of assets. On the other hand, the investment’s full carrying amount is subjected to an impairment test, pursuant to the foregoing IAS 36, by comparing its recoverable amount and its corresponding carrying amount, whenever the application of the provisions set forth in IAS 39 indicate a potential impairment; the latter value is recognised in the income statement;

Tangible assets They include business properties, plant, furniture and fixtures, machines and equipment of any kind and renovation costs for any rented properties. With reference to business properties, IAS 16 establishes that land is to be recognised separately from buildings since only the latter is subject to depreciation as the useful life is not indefinite. This separation is necessary only in the case of self-contained properties: no separation is necessary if the property consists of a portion of the building (for example an apartment), since in this case, the company does not own the surrounding land or land beneath. Azimut Group owns portions of property and therefore no separation was adopted for their measurement. They are initially recognised at cost, including the extra costs directly attributable to the acquisition and start-up of the asset. They are subsequently measured at cost, less depreciation and impairment losses. Depreciation is charged annually on a straight- line basis over the remaining useful life. Leasehold improvements are recognised under assets since the tenant essentially has control over the assets and may receive economic benefits therefrom. Therefore, they are depreciated over a period corresponding to the remaining duration of the lease.

54 Gruppo Azimut Tangible assets are derecognised upon disposal or when the asset has been retired and future benefits are not expected from its disposal.

Intangible assets include goodwill, goodwill on consolidation, the “Azimut” trade- Intangible assets mark (under finance lease) and the application software for long-term use. Goodwill refers to that paid by Azimut Holding Spa (formerly Tumiza Spa) to purchase the group in 2002 by acquiring the entire share capital of Azimut Holding Spa, incorporated in December of the same year, and corresponding to the portion of goodwill arising from merger that, as per the appraisal prepared by the independent company PricewaterhouseCoopers Finance Srl, had not been allocated as an increase in the value of equity investments. Goodwill on consolidation is determined, on first-time consolidation, based on the difference between the subsidiaries’ shareholders’ equity and the value of the investments recognised. Goodwill and goodwill on consolidation are not amortised systematically, but are tested for impairment annually to check the adequacy of the carrying amount in accordance with that set out in IAS 36 Impairment of assets. The amount of the impairment, determined on the basis of the difference between the book value and its recoverable amount, if lower, is recognised in the income statement. Reference should be made to the specific paragraph on “Finance lease” for information on the “Azimut” trademark, acquired under finance lease via a sale and lease- back agreement. Software is recognised at cost, net of amortisation and impairment losses. Such assets are amortised based on their estimated residual useful life. Intangible assets are derecognised at the date of disposal and when no future economic benefits are expected.

55 Notes to the consolidated financial statements

agreement. However, in this specific case, considering the economic reasons for the transaction and the related contractual terms and conditions, which include an initial down payment, the transaction involved an advance payment equal to the sale price of the trademark, less the amount of the down payment. Consequently, the trademark is recognised under assets at the pre-disposal carrying amount and the amount payable for the advance payment, initially recognised at the amount as determined above, is gradually reduced as the lease payments are made. Since the trademark under lease has an indefinite useful life, it is not amortised but is tested for impairment annually in accordance with IAS 36 Impairment of assets. The amount of the impairment, determined on the basis of the difference between the book value and its recoverable amount, if lower, is recognised in the income statement. When the relevant conditions are met, the impairment loss on the trademark is reversed. The reversal shall never exceed the carrying amount that would have been obtained (net of amortisation and/or impairment losses) had no impairment loss been recognised in prior years.

Tax assets and liabilities Current taxes are calculated on the basis of an estimate of taxable income, in accordance with the tax regulations in force and by taking into account the effects generated by the Group’s Italian companies’ adoption of the tax consolidation regime. Taxes for the Group’s foreign companies are calculated in accordance with the tax regulations in force in the individual countries of residence. Taxes are calculated by applying the tax rates in force. Deferred tax assets and liabilities are calculated in respect of the temporary differences arising between the tax base of assets and liabilities and their book values, applying the tax rates in force in the years in which the aforementioned differences are expected to reverse. Deferred tax assets are recognised when there is reasonable certainty they will be recovered, i.e. to the extent that the Company is expected to generate sufficient taxable income in the future to be able to recover the taxes paid. Deferred tax liabilities are recognised even when there is little or remote possibility that a related tax liability will materialise in the future, in accordance with IAS 12. Deferred tax assets and liabilities for IRES purposes, as well as current and deferred taxes for IRAP purposes, are offset against each other, as assets and liabilities, in accordance with IAS 12.

Other assets This item includes assets which are not ascribable to other assets items. This item also includes deferred charges on the fee and commission expenses payable to the sales network for the sale of “no load” products. These funds do not charge an entry fee but are able to break even by charging an exit fee for a specific amount of time. Therefore, they are recognised in the income statement over the foregoing period in accordance with the matching principle.

56 Gruppo Azimut In addition, “other assets” include the prepayments generated by the deferral of commission expenses incurred for the purchase of unit-linked policies classified as investment contracts.

Short-term trade payables (due within 12 months) are recognised at their par value. Payables Payables in the form of mid/long-term loans, initially recognised at the amount collected, are subsequently measured at amortised cost using the effective interest rate method. The amortised cost corresponds to the initial book value, since no transaction costs are applicable and since the nominal interest rate of such liabilities is in line with market rates. Liabilities in the form of the contractual commitments relating to fees and commissions, including retention fees, to be paid to financial advisors in the medium/long- term (over 12 months), are calculated on the basis of actuarial criteria and represent the best estimate of the expense required to settle the foregoing liabilities. Payables are derecognised once settled.

Being a financial instrument composed of a debt component and an embedded -de Outstanding securities rivative (on equity instruments), the bond with warrants “Azimut 2009-2016 subordinato 4%” issued by Azimut Holding Spa on 1 July 2009 is recognised as a financial liability and an equity instrument of Azimut Holding Spa. Upon initial recognition, the fair value of the financial instrument, as a whole, is equal to the issue price, including directly attributable costs, while the fair value of the debt component was calculated based on the present value of the contractually agreed cash flows, using a market rate for comparable financial instruments, with similar cash flows, at the same maturities, but no embedded derivative. The fair value of the equity component - related to the warrants granted on a free basis to the subordinated bondholders at the same time as bonds were issued - was calculated as the difference between the fair value of the instrument, as a whole, and the fair value of the debt component. Consequently, the debt component was recognised under “Outstanding securities”, while the above equity component was recognised in shareholders’ equity, under “Equity instruments”. The costs borne by Azimut Holding Spa for the bond issue are allocated proportionally to the debt component and the equity component. Subsequent to initial recognition, the debt component is recognised at amortised cost, with financial charges established using the effective interest rate. The equity component is recognised under reserves and transferred to unallocated earnings when warrants are exercised, or reach maturity without being exercised. When warrants are exercised, at the strike price set by the relevant regulation, given that Azimut Holding Spa will issue a set number of treasury shares, the transfer of the treasury share reserve will be recognised against the collected cash corresponding to the strike price.

The “Azimut 2011-2016 Senior 2,5%” convertible bond, issued by Azimut Holding

57 Notes to the consolidated financial statements

Spa in 2011, was recognised at the fair value of the corresponding liability, which is equal to the issue price including the ancillary costs borne by the Company for the bond issue. Subsequent to initial recognition, the financial liability is measured at amortised cost using the effective interest rate method.

The “Azimut 2013-2020 convertibile 2,125%” bond, issued by Azimut Holding Spa on 25 November 2013, is recognised as a financial liability and an equity instrument being a financial instrument composed of a debt component and an embedded derivative (on equity instruments). Upon initial recognition, the fair value of the financial instrument, as a whole, is equal to the issue price, while the fair value of the debt component was calculated based on the present value of the contractually agreed cash flows, using a market rate for comparable financial instruments, with similar cash flows, at the same maturities, but no conversion option. The market rate is increased by a premium to reflect the subordination of repayment which is not included in other comparable financial instruments. Subsequent to initial recognition, this debt component is measured at amortised cost, using the effective interest rate method. The equity component, being the difference between the fair value of the instrument, as a whole, and the fair value of the debt component, was recognised in shareholders’ equity under “Equity instruments”. The costs borne by Azimut Holding Spa for the bond issue are allocated proportionally to the debt component and the equity component. The financial liabilities are derecognised after expiry or settlement.

Technical reserves where Commitments to holders of unit linked policies issued by AZ Life Ltd, classified as the investment risk is insurance contracts since they include a considerable insurance risk, are measured borne by policyholders based on actuarial criteria, by taking account of the value of the financial assets to which the benefits are linked.

Financial liabilities This item includes the commitments to policyholders arising from the unit linked po- measured at fair value licies issued by AZ Life Ltd, classified as investment contracts where the investment risk is borne by policyholders. It also includes the liabilities arising from the future exercise of the call options of the residual portion of share capital of some recently acquired companies. With respect to measurement, the amount reflects the countervalue to be paid - in Azimut Holding shares, where contractually provided for - to sellers, following the exercise of the call options. The measurement reflects the estimated amount to be paid to the seller, based on the estimate of the future parameters set out in the relevant contracts, including AUM and profit for the year and which are subject to specific sensitivity analyses. The change in the amount on first recognition is taken to profit or loss. Financial liabilities are derecognised after settlement.

58 Gruppo Azimut This item includes liabilities that are not ascribable to other liability items. Other liabilities Short-term liabilities (due within 12 months) and trade payables are recognised at their par value. In addition, this item includes the deferred income arising from the deferral of fee and commission income on the premiums of unit-linked policies classified as investment contracts. Other liabilities are derecognised once settled. This item includes the financial liabilities related to outstanding commitments for the purchase of residual equity investments in some subsidiaries, as per the relevant agreements.

Following the application of Italian Law no. 296 of 27/12/2006 (2007 Finance Act) Staff severance pay (TFR) and taking account of the methodology published on the Actuarial Society of Italy website, the calculation method for staff severance pay (TFR) was changed. In accordance with IAS 19, TFR is treated as defined benefit plans and recognised based on the actuarial value established using the projected unit credit method. This amendment entails that the projected unit credit method is not applied for those employees who have chosen to invest 100% of their TFR in private pension funds or those who, despite having expressly requested to keep their TFR with the company, are employed by group companies with at least 50 employees, which are obliged by law to transfer TFR to the Italian National Institute for Social Security (INPS). Liabilities associated with staff severance pay at 31 December 2014, were measured as follows: • estimating the remaining duration of the employee’s employment contract within the company subject to valuation; • estimating the future wage/salary and inflationary trends, in the case that the projected unit credit method is applied; • taking into account any advances requested by employees, any portions which may be assigned to private pension funds, as well as the 11% substitute tax on the TFR revaluation; • assessing the payable already accrued by the Company (TFR) including the future annual provisions, to estimate the amount to be paid upon termination of employment, for whatever reason (resignation, retirement, death, disability); • discounting the previously estimated amount payable by the Company, and bringing it into line with the level of seniority at the measurement date, when the projected unit credit method has been applied. The calculation is performed ad personam as outlined in IAS 19, and requires that specific technical, demographic and financial factors be adopted, as set out in “Sec- tion 10 - staff severance pay (TFR)” of these notes. Following the introduction of the new version of IAS 19 last year, actuarial gains and losses are recognised, net of the tax effects, against shareholders’ equity (“Valuation reserves”). The new version of the standard was applied retrospectively; consequently, prior year balances were restated and reclassified accordingly.

59 Notes to the consolidated financial statements

Provisions for risks Provisions for risks and charges are recognised in accordance with the requirements and charges set forth in IAS 37, namely when: • there is a present obligation (legal or constructive) as a result of past transactions or events; • it is probable that an outflow of resources will be required to generate economic benefits; • a reliable estimate can be made of the amount of the obligation. In the event that the effect of the present value of cash becomes significant, the amount of provisions is represented by the present value of the expenses expected to be borne in order to settle the obligation. Provisions for risks are discounted based on the settlement of the litigation, on a case by case basis, expected by the Group’s legal office, or based on actuarial assumptions, in reference to the supplementary indemnity reserve for agents. Actuarial assumptions are unchanged with respect to the previous year.

Costs and income They are recognised on an accrual basis and in accordance with the matching principle. Fees, commissions and other income from services offered to clients are included in the income statement at the time the services are provided. Financial income and charges are recognised on an accrual basis, based on accrued interest and applying the effective interest rate method.

Treasury shares Treasury shares are recognised at purchase cost under a specific Group shareholders’ equity item with a negative sign and are therefore not subject to valuation. In the event that the shares are subsequently sold, the difference between the book value and the selling price is taken to shareholders’ equity. In the case of cancellation, the item under shareholders’ equity is reduced accordingly, upon acquisition.

Profit-participating The profit-participating financial instruments issued by Azimut Holding Spa as financial instruments per the Shareholders’ resolution of 29 April 2010 and subsequent resolutions of the Company’s Board of Directors are recognised under Equity instruments at the subscription amount, equal to their fair value, increasing shareholders’ equity. In- deed, under the By-laws, they have an indefinite life, are issued with no obligation for the Company to repay the amount paid by investors, participate in the allocation of the Company’s residual assets in case of liquidation, in subordination to the Com- pany’s creditors and shareholders. These instruments are not transferable, except to the Company (at their fair value and subject to specific conditions). In this case, the relevant equity rights are suspended. Furthermore, these instruments entitle their holders to receive a part of the Company’s profit as per the By-laws subject to, inter alia, the Shareholders’ approval of dividend distribution.

60 Gruppo Azimut In accordance with the provisions of IFRS 7 and IFRS 13, the group companies Fair value hierarchy classify fair value measurement of financial assets and financial 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 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 Trade 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; • Level 2 reflects 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; • the securities reported as “available-for-sale financial assets” measured at cost and financial liabilities related to the commitments to purchase the residual equity investments in some subsidiaries in accordance with ruling contractual agreements fall under Level 3. With respect to liabilities, the measurement reflects the estimated amount to be paid to the seller, based on the estimate of the future parameters set out in the relevant contracts, including AUM and profit for the year and which are subject to specific sensitivity analyses. The change in the amount on first recognition is taken to profit or loss. Financial liabilities are derecognised after settlement.

A.3 Disclosure about transfers between portfolios

The Group did not transfer any financial assets between portfolios during the year. A.3.1 Transfers between portfolios

61 Notes to the consolidated financial statements

Quantitative information

Accounting portfolios: breakdown by fair value level A.4.5 A.4.5.1 Fair value hierarchy

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 147,152 3,844,758 3,991,910 3. Available-for-sale financial assets 260,540 2,030 262,570 4. Hedging derivatives Total 407,692 3,844,758 2,030 4,254,480 1. Held-for-trading financial liabilities 2. Financial liabilities measured at fair value 3,691,274 51,790 3,743,064 3. Hedging derivatives Total 3,691,274 51,790 3,743,064

A.4.5.2 Annual change in financial assets measured at Level 3 fair value on a recurring basis Financial assets Held for Measured Available Hedging Tangible Intangible trading at fair value for sale assets assets assets 1. Opening balance 2,530 2. Increases 1,000 2.1. Purchases 1,000 2.2. Profits allocated to: 2.2.1 Profit or loss of which: gains 2.2.2 Shareholders’ equity 2.3. Transfers from other levels 2.4. Other increases 3. Decreases 1,500 3.1. Sales 3.2. Redemptions 3.3. Losses charged to: 1,500 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 2,030

62 Gruppo Azimut A.4.5.3 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 31,566 2. Increases 21,824 2.1. Purchases 20,025 2.2. Losses charged to: 1,799 2.2.1 Profit or loss 1,799 of which: losses 1,799 2.2.2 Shareholders’ equity 2.3. Transfers from other levels 2.4. Other increases 3. Decreases 1,600 3.1. Sales 3.2. Redemptions 3.3. Profits allocated to: 3.3.1 Profit or loss of which: gains 1,600 3.3.2 Shareholders’ equity 3.4. Transfers from other levels 3.5. Other decreases 4. Closing balance 51,790

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 Spa and, though this business is conducted through nume- rous 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. For the purpose of developing the research, the acquisition and management of new international partnerships, Azimut Holding Spa established AZ International Holding Sa, a wholly-owned subsidiary incorporated under Luxembourg law to act as an incubator. 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.

63 Notes to the consolidated financial statements

Furthermore, the business model of the operating companies directly controlled by Azimut Holding Spa 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 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 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, information on income from clients broken down by product/service can be found in the breakdown of fee and commission income and net premiums provided in the notes to the income statement, as the subsidiaries, through the subholding AZ Internatio- nal Holdings Sa, have an immaterial impact. Therefore, management has set up a consolidated reporting system for AZ Interna- tional Holdings Sa which, in turn, must send the Parent Company Azimut Holding Spa a consolidated reporting package for all foreign companies controlled. Based on this disclosure, the assets managed by the foreign companies controlled by AZ International Holdings Sa amount to 2,032 thousand euro at 31 December 2014 (1,424 thousand euro at 31 December 2013), while the share of the consolidated profit of those companies pertaining to AZ International Holdings Sa, amounted to 3,130 thousand euro at 31 December 2014 (2,670 thousand euro at 31 December 2013).

Earnings per share Basic earnings per share are calculated by dividing the net profit for the year by the average number of outstanding ordinary shares. There were no earnings-dilutive transactions to be disclosed at 31 December 2014. 2014 2013 Basic earnings per share (**) 0.680 1.168 Average number of outstanding shares (*) 132,692,178 131,795,644 Diluted earnings per share (**) 0.680 1.168 Average number of outstanding shares (*) 132,692,178 131,795,644

* outstanding shares are calculated net of treasury shares held by Azimut Holding Spa at the reporting date. ** Basic and diluted earnings per share, considering the allocation of the dividend from profit-participating financial instruments to top key people will be lower than the figure set out in the table by not more than 0.1041 euro.

64 Gruppo Azimut Parte B - Notes to the balance sheet Assets

Cash and cash equivalents amount to 33 thousand euro and refer to cash on hand. Section 1 Cash and cash equivalents

Intangible assets amount to 3,991,910 thousand euro (2,583,395 thousand euro at Section 3 31 December 2013). Financial assets measured at fair value 3.1 Breakdown of “Financial assets measured at fair value”

Item/Value Total 31/12/2014 Total 31/12/2013 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 1. Debt securities structured securities other debt securities 2. Equity securities 3. UCI units 147,151 3,844,759 95,527 2,487,868 4. Loans Total 147,151 3,844,759 95,527 2,487,868

“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.

65 Notes to the consolidated financial statements

3.2 Financial assets measured at fair value: breakdown by debtor/issuer Total Total 31/12/2014 31/12/2013 1. Debt securities a) Governments and central banks b) Other public bodies c) Banks d) Financial institutions e) Other issuers 2. Equity securities a) Banks b) Financial institutions c) Other issuers 3. UCI units 3,991,910 2,583,395 4. Loans a) Banks b) Financial institutions c) Clients Total 3,991,910 2,583,395

3.3 Financial assets measured at fair value: annual change

Change/Type Debt Equity UCI units Loans Total securities securities A. Opening balance 2,583,395 B. Increases 1,720,939 B1. Purchases 1,559,485 B2. Increases in fair value 161,454 B3. Other changes C. Decreases 312,424 C1. Sales C2. Redemptions 285,060 C3. Decreases in fair value 27,247 C4. Other changes 117 D. Closing balance 3,991,910

66 Gruppo Azimut This item amounts to 262,570 thousand euro (99,996 thousand euro at 31 December Section 4 2013). The breakdown is as follows: Available-for-sale financial assets

Total 31/12/2014 Total 31/12/2013 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 1. Debt securities 1,743 2,019 structured securities other debt securities 1,743 2,019 2. Equity securities 2,030 2,530 3. UCI units 258,797 95,447 4. Loans Total 260,540 2,030 97,466 2,530

“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.

4.2 Available-for-sale financial assets: breakdown by debtor/issuer Total Total 31/12/2014 31/12/2013 1. Debt securities 1,743 2,019 a) Governments and central banks 1,743 2,019 b) Other public bodies c) Banks d) Financial institutions e) Other issuers 2. Equity securities 2,030 2,530 a) Banks 2,030 2,530 b) Financial institutions c) Other issuers 3. UCI units 258,797 95,447 4. Loans a) Banks b) Financial institutions c) Clients Total 262,570 99,996

67 Notes to the consolidated financial statements

4.3 Available-for-sale financial assets: annual change

Debt Equity UCI units Loans Total securities securities A. Opening balance 2,019 2,530 95,447 99,996 B. Increases 274 1,000 492,582 493,856 B1. Purchases 200 1,000 489,278 490,478 B2. Increases in fair value 64 3,304 3,368 B3. Write-ups taken to profit or loss 7 7 taken to shareholders’ equity B4. Transfers from other portfolios B5. Other changes 3 3 C. Decreases 550 1,500 329,232 331,282 C1. Sales 327,470 327,470 C2. Redemptions 545 545 C3. Decreases in fair value 1,762 1,762 C4. Write-downs 1,500 1,500 C5. Transfers to other portfolios C6. Other changes 5 5 D. Closing balance 1,743 2,030 258,797 262,570

Changes related to the purchase and sale of UCI units fall within the framework of the Group’s liquidity management policies.

68 Gruppo Azimut 6.1 Due from banks Sezione 6 This item amounts to 249,479 thousand euro (489,430 thousand euro at 31 Decem- Receivables ber 2013). The breakdown is as follows: Breakdown Total 31/12/2014 Total 31/12/2013 Book value Fair value Book value Fair value L1 L2 L3 L1 L2 L3 1. Loans 1.1 Deposits and current accounts 249,116 249,116 488,998 488,998 1.2 Receivables for services 363 363 432 432 1.3 Repurchase agreements of which for government securities of which for other debt securities of which for other equity securities 1.4 Other loans 2. Debt securities 2.1 Structured securities 2.2 Other debt securities Total 249,479 249,479 489,430 489,430

“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.

69 Notes to the consolidated financial statements

6.2 Due from financial institutions This item amounts to 8,424 thousand euro (4,896 thousand euro at 31 December 2013). The breakdown is as follows: Breakdown Total 31/12/2014 Total 31/12/2013 Book value Fair value Book value Fair value L1 L2 L3 L1 L2 L3 1. Loans 1.1 Deposits and current accounts 1.2 Receivables for services - sale of products 8,424 8,424 4,896 4,896 1.3 Repurchase agreements of which for government securities of which for other debt securities of which for other equity securities 1.4 Other loans 2. Debt securities 2.1 Structured securities 2.2 Other debt securities Total 8,424 8,424 4,896 4,896

“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.

70 Gruppo Azimut 6.3 Due from clients

Breakdown Total 31/12/2014 Total 31/12/2013 Book value Fair value Book value Fair value L1 L2 L3 L1 L2 L3 1. Loans 1.1 Deposits and current accounts 1.2 Receivables for services: sale of products 4,415 4,415 4,008 4,008 portfolio management 62,101 62,101 61,479 61,479 1.3 Repurchase agreements of which for government securities of which for other debt securities of which for other equity securities 1.4 Other loans 2. Debt securities 2.1 Structured securities 2.2 Other debt securities Total 66,516 66,516 65,487 65,487

“Receivables for services - portfolio management” includes receivables in the form of fee and commission income on mutual funds and managed funds accrued during December 2014 and collected the following month.

6.4 Due from financial advisors This item of 17,035 thousand euro (14,082 thousand euro at 31 December 2013) is mainly comprised of loans disbursed to financial advisors of 7,369 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 243 thousand euro. The terms for repayment of these loans vary on average from 12 to 36 months.

71 Notes to the consolidated financial statements

Section 9 This item amounts to 7,538 thousand euro (3,038 thousand euro at 31 December Equity investments 2013).

9.1 Equity investments: information

Name Registered office Stake % of voting rights Shareholder Stake % Associates measured at equity 1. Programma 101 Spa Italy Azimut Enterprises Holding Srl 43 43 2. Siamosoci Srl Italy Azimut Enterprises Holding Srl 22 22 3. AZ FI Holding Sa Brazil AZ Brasil Holdings Ltda 50 50 4. M&O Consultoria Ltda Brazil AZ Brasil Holdings Ltda 50 50 5. FuturaInvest Gestao de Recursos Ltda Brazil AZ Brasil Holdings Ltda 50 50

9.2 Annual change in equity investments Total value A. Opening balance 3,038 B. Increases 7,854 B.1 Purchases 4,229 B.2 Write-ups B.3 Revaluations B.4 Other changes 3,625 C. Decreases 3,354 C.1 Sales C.2 Write-downs 2,620 C.3 Other changes 734 D. Closing balance 7,538

72 Gruppo Azimut 9.3 Significant equity investments: accounting figures

Name Book value Fair value (*) Dividends received 1. Programma 101 Spa 3,142,704 3,142,704 2. Siamosoci Srl 167,081 167,081 3. Club 2 Investimenti Spa 1,000,000 1,000,000 4. AZ FI Holding Sa 4,145,111 4,145,111 5. M&O Consultoria Ltda 10,194 10,194 6. FuturaInvest Gestao de Recursos Ltda 73,310 73,310

(*) As these companies are not listed, fair value coincides with the carrying amount.

This item amounts to 3,696 thousand euro (2,960 thousand euro at 31 December Section 10 2013). Tangible assets

10.1 Breakdown of “Tangible assets” - business purposes: breakdown of assets at cost” Total 31/12/2014 Total 31/12/2013 Items/Valuation Assets Assets Assets Assets at cost at fair value at cost at fair value or revalued or revalued 1. Group-owned 3,696 2,960 a) land b) buildings 175 183 c) furniture & fixtures 1,116 833 d) capital goods e) other 2,405 1,944 2. Under finance lease a) land b) buildings c) furniture & fixtures d) capital goods e) other Total (assets at cost and revalued) 3,696 2,960

73 Notes to the consolidated financial statements

10.2 Tangible assets - business purposes: annual change Land Buildings Furniture Capital Other Total & fixtures goods A. Opening balance 183 833 1,944 2,960 A.1 Total net impairment losses A.2 Opening net balances B. Increases 570 1,332 1,902 B.1 Purchases 409 1,332 1,741 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 Other changes 161 161 C. Decreases 8 287 871 1,166 C.1 Sales C.2 Depreciation 8 287 871 1,166 C.3 Impairment write-downs 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 175 1,116 2,405 3,696 D.1 Total net impairment losses D.2 Net closing balance 175 1,116 2,405 3,696 E. Measurement at cost 175 1,116 2,405 3,696

74 Gruppo Azimut Depreciation rates are as follows: Company % rate Buildings 3% Furniture & fixtures 12% Other: Systems 15%-20-25% Motor vehicles 25% Electronic office equipment 20% Leasehold improvements Based on remaining duration of contract

This item amounts to 394,940 thousand euro (369,250 thousand euro at 31 Decem- Sezione 11 ber 2013). Intangible assets

11.1 Breakdown of “Intangible assets”

Total 31/12/2014 Total 31/12/2013 Assets Assets Assets Assets at cost at fair value at cost at fair value 1. Goodwill and goodwill on consolidation 345,251 328,374 2. Other intangible assets 49,689 40,876 2.1 generated internally 2.2 other 49,689 40,876 Total 394,940 369,250

• “Goodwill and goodwill on consolidation” relate to: • the acquisition by Azimut Holding Spa (formerly Tumiza Spa) of the merged company Azimut Holding Spa,completed on 12 February 2002. This company wholly owned 100% (directly or indirectly) all the companies of the Azimut Group. This item was calculated as the difference between the initial cost of the equity investment, at acquisition date, and the shareholders’ equity of the subsidiaries at 31 December 2001. Following the merger by incorporation of Azimut Holding Spa into Tumiza Spa, with accounting effects on 1 July 2002, a portion of goodwill on consolidation, equal to 176.3 million euro (calculated based on a valuation by the independent company PricewaterhouseCoopers Corporate Finance Srl) was included in “Goodwill”; • the acquisition of Compagnie de Gestion privée Monegasque Sam by the subsidiary AZ International Holdings Sa on 30 December 2011. This item was calculated as the difference between the value of the equity investment (including the residual 49% investment for which a financial liability was recognised at fair value) and the shareholders’ equity of the subsidiary at 30 December 2011; • the acquisition of an additional 25% of Katarsis Capital Advisors, besides the 50%

75 Notes to the consolidated financial statements

stake already held, by AZ International Holdings Sa on 16 November 2012. This item was calculated as the difference between the acquisition cost of the equity investment and the shareholders’ equity of the subsidiary at 16 November 2012; • the acquisition of AN Ping by the subsidiary AZ International Holdings Sa on 30 August 2013. This item was calculated as the difference between the value of the equity investment and the shareholders’ equity of the subsidiary at 31 August 2013 (1,247 thousand euro); • the acquisition of Athenaeum by the subsidiary AZ International Holdings Sa on 2 October 2013. This item was calculated as the difference between the value of the equity investment and the shareholders’ equity of the subsidiary at 31 October 2013 (592 thousand euro); • the acquisition of 50% of AZ Legan Partecipaçoes Sa, based in Sao Paolo (Brazil), by the subsidiary AZ International Holdings Sa, through its subsidiary AZ Brasil Holdings Ltda, on 10 October 2013. The Brazilian company holds, in turn, 99.5% of Legan Administraçao de Recursos Ltda, an asset management company based in Sao Paolo (Brazil). This item was calculated as the difference between the value of the equity investment and the shareholders’ equity of the subsidiary at 31 Octo- ber 2013 (4,733 thousand euro). • With respect to the equity investments purchased during the year, goodwill on consolidation can be analysed as follows: • the acquisition of Augustum Opus Sim Spa by Azimut Holding Spa on 27 June 2014. This item was calculated as the difference between the value of the equity investment and the shareholders’ equity of the subsidiary at 30 June 2014 (8,893 thousand euro); • the acquisition of Notus Portfoy Yonetimi A.S. by the subsidiary AZ International Holdings Sa on 22 October 2014. This item was calculated as the difference between the value of the equity investment and the shareholders’ equity of the subsidiary at 31 October 2014 (1,393 thousand euro); • the acquisition of Profie Mexicana Sa by the subsidiary AZ International Holdings Sa on 23 October 2014. This item was calculated as the difference between the value of the equity investment and the shareholders’ equity of the subsidiary at 31 October 2014 (6,109 thousand euro);

“Other intangible assets - Other” refer to: • The “Azimut” trademark: Azimut Holding Spa entered into a sale and leaseback agreement with Banca Italease Spa for the Azimut trademark in October 2006. As described in Part A “Accounting policies” of these notes, the trademark is recognised at its original value (35,338 thousand euro) and the amount payable to the lease company under liabilities. The details of the foregoing transaction are described in “Payables” under liabilities. Azimut Holding Spa has exclusive rights to use the trademark and holds a purchase option to buy back the asset at the end of the lease term (2 November 2015) for a repurchase price of 100 thousand euro (plus VAT). • Software totalling 14,299 thousand euro.

76 Gruppo Azimut 11.2 Intangible assets: annual change Total A. Opening balance 369,250 B. Increases 30,687 B.1 Purchases 13,810 B.2 Write-ups B.3 Increases in fair value taken to: shareholders’ equity profit or loss B.4 Other changes 16,877 C. Decreases 4,997 C.1 Sales C.2 Amortisation 4,997 C.3 Impairment write-downs charged to: shareholders’ equity profit or loss C.4 Decreases in fair value charged to: shareholders’ equity profit or loss C.5 Other changes D. Closing balance 394,940

The amortisation rates for intangible assets with a finite useful life are as follows:

Company % rate Application software 33%

Impairment test With respect to “goodwill and goodwill on consolidation” and “trademarks” (when recognised as an intangible asset with an indefinite useful life), the IFRS, specifically IAS 36 - “Impairment of assets”, stipulate that the company must perform annual impairment tests to check the adequacy of the amounts recognised. The aim of the impairment test is to identify any impairment loss. Where the test shows that the value of an asset has been overestimated, the company shall recognise an impairment loss. For the purpose of impairment testing, two cash generating units (CGU) have been identified that basically reflect the Azimut Group’s business and to which the above intangible assets have been allocated. The first CGU reflects the activity carried out by the companies directly controlled

77 Notes to the consolidated financial statements

by Azimut Holding Spa, each specialising in the distribution, promotion and management of financial and insurance products (basically unit-linked products) and operating 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 operating results are revised periodically by management for the purpose of decisions regarding allocation of resources and measurement of results and company performance. The second CGU refers to the activity carried out by the foreign companies belonging to the Luxembourg company AZ International Holdings Sa, wholly owned by Azimut Holding Spa, aimed at identifying, acquiring and managing new foreign partnerships with an integrated approach. Therefore, management has set out a consolidated reporting system for AZ Interna- tional Holdings Sa which, in turn, must send the Parent Company Azimut Holding a consolidated reporting package for all foreign companies.

CGU AZ International

The CGU of AZ International Holdings Sa is part of the Azimut Group to promote the development, launch and distribution of financial products in the relevant markets in which the companies of the above CGU operate. The impairment test for this CGU checks for impairment indicators on goodwill on consolidation of 53 million euro. The following companies belong to the “CGU AZ International”: • Katarsis Capital Advisors Sa; • Eskatos Capital Management Sarl controlled by Katarsis Capital Advisors Sa; • Compagnie de Gestion priveè Monegasque; • CGM Italia Sim Spa controlled by Compagnie de Gestion priveè Monegasque. • AN Zhong (AZ) IM Limited; • AN Zhong (AZ) IM HK Limited controlled by AN Zhong (AZ) IM Limited; • AZ Investment Management controlled by AN Zhong (AZ) IM Limited; • AZ Global Portfoy Yonetimi AS; • AN Ping Investment LTD; • Sinopro Financial Planning Taiwan Ltd controlled by AN Ping Investment LTD; • Athenaeum LTD; • AZ Swiss Sa; • AZ Brasil Holdings LTDA; • AZ Legan Partecipações Sa controlled by AZ Brasil Holdings LTDA; • AZ Legan Administração de Rescursos controlled by AZ Legan Partecipações Sa; • Profie Sa; • Mas Fondos Sa controlled by Profie Sa; • Notus Portfoy Yonetimi AS

78 Gruppo Azimut CGU Azimut

The CGU of Azimut Holding Spa is comprised of the following companies, that are focussed on management and distribution: • Azimut Capital Management Sgr Spa; • Azimut Consulenza Sim Spa; • AZ Fund Management Sa; • AZ Capital Management Ltd; • AZ Life Ltd; • Azimut Global Counseling Srl; • Augustum Opus Sim Spa.

Again, the impairment test for this CGU checks for impairment indicators on intangible assets of 327 million euro, represented by goodwill, goodwill on consolidation and the trademark. For the purposes of the impairment test of intangible assets, the value in use of CGUs was calculated using the Discounted Cash Flow method and comparing value in use with the carrying amount of the CGUs, inclusive of the above intangible assets. Value in use calculated using the Discounted Cash Flow method is as follows: • Calculation of unlevered cash flows: for the purposes of this calculation, the expected cash flow was approximated to the net profit for the year. Profits for the first five years were based on the “2015 - 2019 Business Plan”. The underlying assumptions are as follows: • average inflows of 2.5 billion euro per year; • weighted average performance of 2.5%; • increase in overheads in line with forecast growth of personnel and structure; • increase in costs and revenue after 2019 unchanged at 2%.

• Calculation of the weighted average cost of capital (“WACC”), equal to 8.26%, based on the following parameters: • Risk Free: 10-year Italian government bonds, December 2014; • Azimut Beta: calculated on a five-year timescale with daily readings (source: Bloom- berg) • Market risk premium: extra yield required for investments in shares rather than risk-free securities (Source: Credit Suisse Global Equity Strategy - 31 December 2014); • Azimut’s financial structure.

79 Notes to the consolidated financial statements

Cost of capital calculation: WACC 31-Dec-14 Risk-free rate 2.87% Market risk premium 5.30% Beta Unlevered 1.017 Risk premium 5.42% Cost of equity (Ke) 8.26% D/(D+E) 0% E/(D+E) 100% WACC 8.26%

• Discounting cash flows over the five-year timescale and cash flows calculated for terminal value purposes at the WACC to estimate the Enterprise Value of the CGU and calculating the value in use of the CGU, adjusted to reflect the net financial -po sition at 31 December 2014.

Based on the above, management calculated Azimut CGU’s and AZ International CGU’s value in use at 4,450 million euro and 131 million euro, respectively. These amounts are greater than the CGUs’ carrying amounts of 550 million and 86 million euro, respectively, as no impairment losses were recognised. Furthermore, the CGU’s value in use was subjected to a sensitivity analysis which considered WACC changes and the long-term growth rate (g-rate). The tables below show the results of the sensitivity analyses which did not identify any impairment losses.

Impairment test on the AZ International CGU

Sensitivity Analysis Difference between value in use and the carrying amount of the CGU

6.26% 6.76% 7.26% 7.76% 8.26% 8.76% 9.26% 9.76% 10.26% 0.0% 43.2 36.8 31.4 26.6 22.4 18.7 15.4 12.4 9.7 0.5% 51.1 43.6 37.2 31.7 27.0 22.7 19.0 15.7 12.7 1.0% 60.5 51.6 44.1 37.6 32.1 27.3 23.1 19.3 16.0 1.5% 71.9 61.0 52.0 44.5 38.0 32.5 27.6 23.4 19.6 2.0% 86.0 72.5 61.6 52.5 44.9 38.4 32.9 28.0 23.7 2.5% 103.8 86.6 73.1 62.1 53.0 45.3 38.8 33.2 28.3 3.0% 127.1 104.5 87.3 73.6 62.6 53.4 45.8 39.2 33.6 3.5% 158.8 127.9 105.2 87.9 74.2 63.1 53.9 46.2 39.6

80 Gruppo Azimut Decrease in cash flows 0 0% -5% -10% -15% -20% -25% 44.91 1.00 95% 90% 85% 80% 75% 2% 44.9 40.5 36.2 31.8 27.4 23.0

Impairment Test on the Azimut CGU

Sensitivity Analysis Difference between value in use and the carrying amount of the CGU 6.26% 6.76% 7.26% 7.76% 8.26% 8.76% 9.26% 9.26% 9.76% 0.00% 3,837 3,604 3,404 3,229 3,076 2,940 2,819 2,819 2,710 0.50% 4,127 3,853 3,619 3,418 3,242 3,088 2,951 2,951 2,829 1.00% 4,472 4,144 3,868 3,634 3,431 3,255 3,100 3,100 2,962 1.50% 4,889 4,491 4,161 3,884 3,648 3,445 3,267 3,267 3,112 2.00% 5,405 4,910 4,509 4,178 3,900 3,663 3,458 3,458 3,280 2.50% 6,058 5,428 4,931 4,528 4,195 3,916 3,677 3,677 3,472 3.00% 6,910 6,084 5,451 4,951 4,547 4,212 3,931 3,931 3,692 3.50% 8,072 6,941 6,110 5,474 4,972 4,565 4,229 4,229 3,947

Decrease in cash flows 0% -5% -10% -15% -20% -25% 3,900 3,739 3,579 3,419 3,259 3,098

Finally, the analysis of the Azimut Holding share shows that market cap is considerably greater than the Group’s shareholders’ equity: considering shareholders’ equity of 637 million euro, the Company’s market cap at 31 December 2014 was equal to 2.6 billion euro.

81 Notes to the consolidated financial statements

Section 12 Tax assets Tax assets and tax liabilities This item amounts to 80,811 thousand euro (89,415 thousand euro at 31 December 2013). The breakdown is as follows:

12.1 Breakdown of “Tax assets: current and deferred” Breakdown Total Total 31/12/2014 31/12/2013 Current 53,947 50,978 Deferred 26,864 38,437 of which pursuant to Italian Law 214/2011 840 Total 80,811 89,415

“Current tax assets” mainly refer to non-offset IRES and IRAP tax credits for the year 2014. “Deferred tax assets” mainly include: • 8,757 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; • 5,918 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; • to a lesser extent, the temporary differences resulting from the different timing criteria of IRES and IRAP tax deductibility for some cost items compared to that recognised in the income statement.

As regards deferred tax assets recognised on tax losses, in accordance with IAS 12, adjustments were made in order to establish the probability of these losses being recovered in subsequent tax years. Based on the assumptions pursuant to current tax regulations and related changes of the year, the ability of future taxable income, at Group level, comprising the companies which have adopted the tax consolidation regime, to absorb the tax losses which generated the recognition of deferred tax assets, also in previous years, was assessed.

82 Gruppo Azimut Tax liabilities

This item amounts to 52,939 thousand euro (83,537 thousand euro at 31 December 2013). The breakdown is as follows:

12.2 Breakdown of “Tax liabilities: current and deferred”: Breakdown Total Total 31/12/2014 31/12/2013 Current 653 33,903 Deferred 52,286 49,634 Total 52,939 83,537

“Current tax liabilities” include the provisions for IRAP tax payable by Azimut Hol- ding Spa and Azimut Capital Management Sgr Spa, for IRES tax payables as well as tax payables of the Group’s foreign companies net of the tax advances paid. The decrease on the previous year is due to the release of prior year tax provisions as described in the section “Tax Position” of the Management Report to which reference should be made. “Deferred tax liabilities” mainly include deferred tax liabilities relating to the 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 35,911 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 on unallocated earnings of the subsidiaries at 31 December 2014.

83 Notes to the consolidated financial statements

12.3 Changes in deferred tax assets (contra entry in income statement) Total Total 31/12/2014 31/12/2013 1. Opening balance 37,974 40,170 2. Increases 8,183 7,451 2.1 Deferred tax assets recognised in the year: 7,440 a) from previous years b) due to changes in accounting policies d) other 8,183 7,440 2.2 New taxes or increased tax rates 2.3 Other increases 11 3. Decreases 19,452 9,647 3.1 Deferred tax assets eliminated during the year 19,452 2,832 a) reversals 2,524 2,832 b) write-off of irrecoverable tax 908 c) due to changes in accounting policies d) other 16,021 3.2 Decreases in tax rates 3.3 Other decreases a) conversion into tax credits pursuant to Italian Law 214/2011. 6,815 b) other 4. Closing balance 26,705 37,974

12.3.1 Change in deferred tax assets under Italian Law 214/2011 (contra entry in income statement) Total Total 31/12/2014 31/12/2013 1. Opening balance 840 6,787 2. Increases 840 3. Decreases 840 6,787 3.1 Reversals 840 3.2 Conversion into tax credits a) arising out of loss for the year b) arising out of tax losses 6,787 3.3 Other decreases 4. Closing balance 840

84 Gruppo Azimut 12.4 Changes in deferred tax liabilities (contra entry in income statement) Total Total 31/12/2014 31/12/2013 1. Opening balance 45,264 42,680 2. Increases 6,518 7,333 2.1 Deferred tax liabilities recognised in the year: 6,518 7,333 a) from previous years b) due to changes in accounting policies c) other 6,518 7,333 2.2 New taxes or increased tax rates 2.3 Other increases 3. Decreases 4,776 4,749 3.1 Deferred tax liabilities eliminated during the year 4,776 4,541 a) reversals 4,776 4,541 b) due to changes in accounting policies c) other 3.2 Decreases in tax rates 3.3 Other decreases 208 4. Closing balance 47,006 45,264

85 Notes to the consolidated financial statements

12.5 Changes in deferred tax assets (contra entry in shareholders’ equity) Total Total 31/12/2014 31/12/2013 1. Opening balance 463 235 2. Increases 94 228 2.1 Deferred tax liabilities recognised in the year: 94 228 a) from previous years b) due to changes in accounting policies d) other 94 228 2.2 New taxes or increased tax rates 2.3 Other increases 3. Decreases 398 3.1 Deferred tax liabilities eliminated during the year 398 a) reversals 398 b) write-off of irrecoverable tax c) due to changes in accounting policies d) other 3.2 Decreases in tax rates 3.3 Other decreases 4. Closing balance 159 463

86 Gruppo Azimut 12.6 Changes in deferred tax liabilities (contra entry in shareholders’ equity) Total Total 31/12/2014 31/12/2013 1. Opening balance 4,370 4,169 2. Increases 910 202 2.1 Deferred tax liabilities recognised in the year: 910 202 a) from previous years b) due to changes in accounting policies d) other 910 202 2.2 New taxes or increased tax rates 2.3 Other increases 3. Decreases 3.1 Deferred tax liabilities eliminated during the year a) from previous years b) due to changes in accounting policies d) other 3.2 Decreases in tax rates 3.3 Other decreases 4. Closing balance 5,280 4,370

87 Notes to the consolidated financial statements

Sezione 13 13.1 Breakdown of “Non-current assets held for sale and discontinued operations” Non-current assets held This item amounts to 734 thousand euro and includes the equity investment in Glo- for sale and discontinued bal Menkul Degerler A.S. measured at its disposal price. operations and related liabilities

Sezione 14 This item amounts to 55,819 thousand euro (64,419 thousand euro at 31 December Other assets 2013).

14.1 Breakdown of “Other assets” Total Total 31/12/2014 31/12/2013 Due from Inland Revenue 30,163 20,795 Other receivables 14,715 24,317 Prepayments 10,941 19,307 Total 55,819 64,419

“Due from Inland Revenue” includes VAT credits of 4,647 thousand euro and amounts related to mathematical reserves of 25,516 thousand euro. “Other receivables” include receivables from clients relating to the virtual duty stamp collected in early 2015. “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 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.

88 Gruppo Azimut Liabilities

Payables amount to 99,010 thousand euro (106,164 thousand euro at 31 December Section 1 2013). Payables

“Payables” (due to banks, financial institutions and clients) Items Total 31/12/2014 Total 31/12/2013 Due to Due to Due to Due to Due to Due to banks financial clients banks financial clients institutions institutions 1. Loans 40,273 53,414 1.1 Repurchase agreements of which for government securities of which for other debt securities of which for other equity securities 1.2 Loans 40,273 53,414 2. Other payables 1,431 592 432 1,878 3,651 952 Total 41,704 592 432 55,292 3,651 952 Fair value L1 Fair value L2 Fair value L3 41,704 592 432 55,292 3,651 952 Total fair value 41,704 592 432 55,292 3,651 952

“Loans” include: a) a financial debt, amounting to 100 thousand euro, arising from the lease-back agreement signed by Banca Italease Spa and Azimut Holding Spa in 2006 for the disposal of the Azimut trademark for 55,000 thousand euro plus VAT. The amount refers to the repurchase price of the trademark. b) a loan of 40,000 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, condition precedent or subsequent. This item also includes accrued interest at 31 December 2014 on this loan, amounting to 172 thousand euro, paid on the pre-established date (1 January 2015). “Other payables” mainly include commissions accrued and to be settled for the sale of fund units.

Due to financial advisors: The item had a balance of 56,282 thousand euro (46,268 thousand euro at 31 De-

89 Notes to the consolidated financial statements

cember 2013). It mainly includes amounts due to financial advisors for commissions of December 2014 paid in January 2015, in addition to other accruals relating to 2014, 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.

Section 2 2.1 Breakdown of “Outstanding securities” Outstanding securities

Liabilities Total 31/12/2014 Total 31/12/2013 Book Fair value Book Fair value value value L1 L2 L3 L1 L2 L3 1. Securities bonds 216,685 233,291 228,608 232,232 structured other 216,685 233,291 228,608 232,232 other securities structured other Total 216,685 233,291 228,608 232,232

“Outstanding securities” are broken down as follows: 1. “Azimut 2011-2016 Senior 2,5%” bond, amounting to 822 thousand euro originally composed of 884 bonds worth 1,000 euro each with a duration of 5 years and yield in line with the annual fixed nominal rate of 2.5% before tax. The amount refers to total bonds sold and includes the charges incurred by Azimut Holding Spa for the issue, in addition to interest expense accrued at 31 December 2014 which was paid on the pre-established date (1 February 2015). 2. convertible bond “Azimut 2013-2020 Convertibile 2.125%” amounting to 215,321 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 31 December 2014 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 Spa 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 policies, the total debt component of this financial instrument is 214,312 thousand euro calculated on 25 November 2013 (issue date), whereas the equity component, amounts to 35,688 thousand euro.

90 Gruppo Azimut 2.2 Subordinated securities This category includes the bond loan described in point 2 of this item.

Technical reserves where the investment risk is borne by policyholders amount to Technical reserves where 300,142 thousand euro (310,994 thousand euro at 31 December 2013) and refer to the investment risk is the commitments arising from the unit-linked policies issued by the subsidiary AZ borne by policyholders Life Ltd, classified as insurance contracts.

This item amounts to 3,743,064 thousand euro (2,305,428 thousand euro at 31 De- Section 4 cember 2013) and includes the commitments arising from the unit-linked policies Financial liabilities measured issued by the subsidiary AZ Life Ltd, classified as investment contracts (level 2). at fair value The item also includes the posting of the liability (18,110 thousand euro) relating to the residual share of 49% of the capital of Compagniè de Gestion privèe Monega- sque Sam, and the posting of the liability (2,272 thousand euro) relating to the residual share of 25% of the capital of Katarsis Capital Advisors Sa, It also includes the liability (12,436 thousand euro) relating to the remaining stake in Athenaeum and AZ Legan and those relating to the companies acquired during the year: Augustum Opus Sim Spa, AZ Notus Portfoy, Profie Mexicana Sa - (18,972 thousand euro) as described in Section 5 - Consolidation scope and methods – Other information of these notes. “Financial liabilities measured at fair value” (level 3) and the related measurement (described in the section on accounting policies) at 31 December 2014 led to the recognition of losses of 199 thousand euro (loss of 353 euro in 2013) under “Net result of financial assets and financial liabilities measured at fair value”.

4.1 Breakdown of “Financial liabilities measured at fair value” Liabilities Total 31/12/14 Total 31/12/13 Fair value FV NV Fair value FV NV L1 L2 L3 L1 L2 L3 1. Payables 3,691,274 51,790 3,743,064 2,273,862 31,566 2,305,428 2. Debt securities bonds structured other other structured other Total 3,691,274 51,790 3,743,064 2,273,862 31,566 2,305,428

91 Notes to the consolidated financial statements

Section 7 “Tax liabilities” are described in detail in section 12 of these notes to which reference Tax liabilities should be made.

Section 9 This item amounts to 54,787 thousand euro (36,659 thousand euro at 31 December Other liabilities 2012). Breakdown/Value Total Total 31/12/2014 31/12/2013 Due to suppliers 17,594 14,089 Due to Inland Revenue 9,098 4,495 Due to employees 4,144 2,877 Due to social security bodies 3,597 3,321 Other payables 17,457 9,050 Deferred income 2,897 2,827 Total 54,787 36,659

“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.

Section 10 The item amounts to 3,030 thousand euro (2,265 thousand euro at 31 December Staff severance pay (TFR) 2013) and refers to TFR accrued by personnel employed by the group companies at 31 December 2014.

10.1 “Staff severance pay (TFR)”: annual change Total Total 31/12/2014 31/12/2013 A. Opening balance 2,265 2,052 B. Increases 845 293 B1. Provisions for the year 340 263 B2. Other increases 505 30 C. Decreases 80 80 C1. Payments made 61 48 C2. Other decreases 19 32 D. Closing balance 3,030 2,265

The increase is mainly due to the actuarial losses of the year with a specific direct contra entry in shareholders’ equity reserves, net of the related tax effect and the substitute tax.

92 Gruppo Azimut 10.2 Other information As set out in the section on “Accounting policies”, staff severance pay was calculated in accordance with IAS 19, based on specific following technical, demographic and financial assumptions:

Demographic assumptions

In order to eliminate the probabilities of removal of personnel in service due to death, the Sim/F 2000 table was used (ISTAT - Italian National Institute of Statistics - mortality table by gender), prudentially reduced by 20%. Decreases due to disability were calculated using the relevant INPS (the Italian social security institution) tables, reduced by 20%. Pension, which is considered the main reason for outgoing employees, was subject to a timescale equal to meeting the minimum requirement (contribution period or seniority), calculated in accordance with ruling legislation. The following parameters were used for other technical, non-financial factors: • Turnover: 1.5% constant; • Advance: 2% constant; • Amount paid in advance: 70%.

Finally, assessment of the allocation of TFR to private pension funds was carried out based on the behaviour observed on assessment (lack or partial adherence to private pension funds), without making any assumption on the future decisions of the personnel different from the current ones.

Financial assumptions

IAS 19 requires utilisation of financial technical factors. These assumptions reflect their influence on the prospective trend of flows (following remuneration increases and forecast inflation scenarios) and discounting of the Company’s estimated liability at the measurement date. Indeed, the discount rate is the main financial assumption on which the analysis results depend. • Inflation: a constant rate of 2.00% was used with respect to the future inflation scenario to be used for remuneration and TFR revaluation. • Interest rates: the future liability to employees was discounted using the yield curve of debt securities in accordance with IAS 19.

This item amounts to 25,580 thousand euro (21,935 thousand euro at 31 December Section 11 2013). Provisions for risks and charges 11.1 Breakdown of “Provisions for risks and charges” • Supplementary indemnity provision for agents established based on actuarial criteria, in accordance with IFRS, totalling 21,009 thousand euro.

93 Notes to the consolidated financial statements

• Other provisions (4,571 thousand euro) for potential legal disputes with clients, for the present value of the estimated expense to settle the obligations.

11.2 “Provisions for risks and charges”: annual change 31/12/2014 Opening balance 21,935 Increases during the year 8,407 Decreases during the year -4,762 Closing balance 25,580

12.1 Breakdown of “Share Capital” Section 12 Shareholders’ Equity Types of shares Total 1. Share capital 32,324 1.1 Ordinary shares 32,324 1.2 Other shares

At 31 December 2014, 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.

12.2 Breakdown of “Treasury Shares” Types of shares Total 1. Treasury shares 81,555 1.1 Ordinary shares 81,555 1.2 Other shares

During the year, treasury share transactions led to a total decrease in the portfolio of 218,212 shares. At 31 December 2014, Azimut Holding Spa held 10,488,633 treasury shares at an average carrying amount of 7.322 euro per share.

12.3 Breakdown of “Equity instruments” This item amounted to 71,715 euro at 31 December 2014 and relates to: • 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 in 2014 (for additional information on the transaction reference should be made to the section “Treasury shares” in the Management Report); • 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

94 Gruppo Azimut 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 Spa for the bond issue are allocated proportionally to the debt component and the equity component.

12.4 Breakdown of “Share premium reserve” “Share premium reserve” amounted to 173,987 euro at 31 December 2014.

12.5 Other information Breakdown and changes in “Reserves” Legal reserve Other reserves Total A. Opening balance 6,465 327,612 334,077 B. Increases 39,711 39,711 B.1 Profit appropriations 38,905 38,905 B.2 Other changes 806 806 C. Decreases - 24,729 - 24,729 C.1 Allocations loss account reserve dividends transfers to share capital C.2 Other changes -24,729 -24,729 D. Closing balance 6,465 342,594 349,059

Breakdown and changes in “Valuation reserves”

Available- Tangible Intangible Cash flow Special Other Total for-sale assets assets hedge revaluation financial laws assets A. Opening balance 177 - 949 - 771 B. Increases 4,300 35 4,334 B.1 Increases in fair value 3,181 3,181 B.2 Other changes 1,119 35 1,154 C. Decreases 2,520 1,525 4,046 C.1 Decreases in fair value 1,380 1,380 C.2 Other changes 1,141 1,525 2,666 D. Closing balance 1,956 - 2,440 - 481

95 Notes to the consolidated financial statements

Minority interest

Breakdown of “Minority interest” Items/Value 31/12/2014 1. Share capital 5,137 2. Treasury shares 3. Equity instruments 4. Share premium reserve 5. Reserves 763 6. Valuation reserves (273) 7. Profit (loss) for the year 1,145 Total 6,772

Minority interest relate to stakes held by third parties.

Parte C - Notes to the income statement

Section 3 This item amounts to 3,989 thousand euro (loss of 270 thousand euro in 2013). Profits (losses) on disposal and repurchase 3.1 Breakdown of “Profits (losses) on disposal and repurchase”

Total 31/12/2014 Total 31/12/2013 Items/Income items Gain Loss Net loss Gain Loss Net loss 1. Financial assets 1.1 Available-for-sale financial assets 4,515 4,515 518 518 1.2 Held-to-maturity financial assets 1.3 Other financial assets 31 31 38 38 Total 4,546 4,546 556 556 2. Financial liabilities 2.1 Payables 2.2 Outstanding securities (558) (558) (286) (286) Total (2) (558) (558) (286) (286) Total (1+2) 4,546 (558) 3,988 556 (286) 270

96 Gruppo Azimut 4.1 Breakdown of “Net result of financial assets and financial liabilities measured at fair Section 4 value “ Net result of financial assets and financial liabilities measured at fair value

Items/Income items Gains Profit on Losses Losses on Net result disposal disposal 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 (199) (199) 3.1 Payables 3.2 Debt securities 3.3 Other liabilities 4. Credit and financial derivatives Total (199) (199)

97 Notes to the consolidated financial statements

Section 5 5.1 Breakdown of “Fee and commission income” Fees and commissions The breakdown is as follows: Detail Total Total 31/12/2014 31/12/2013 1. Trading on own account 2. Execution of orders on behalf of clients 3. Sales and distribution 5,945 19,901 securities third party services: 5,945 19,901 portfolio management collective portfolio management 14,853 insurance products 5,455 4,490 other 490 558 4. Portfolio management 519,251 430,937 own account 513,876 429,980 on behalf of third parties 5,375 957 5. Order receipt and transmission 740 717 6. Investment advisory 7. Financial structure advisory 8. Management of multilateral trading facilities 9. Custody and management 10. Currency trading 11. Other services Total 525,936 451,555

98 Gruppo Azimut 5.2 Breakdown of “Fee and commission expense” Breakdown Total Total 31/12/2014 31/12/2013 1. Trading on own account 2. Execution of orders on behalf of clients 3. Sales and distribution 224,407 188,248 securities third party services: 224,407 188,248 portfolio management 273 other 224,407 187,975 4. Portfolio management 1,344 809 own account 1,344 809 on behalf of third parties 5. Order intake 163 159 6. Investment advisory 7. Custody and management 10. Currency trading 8. Other services 1,907 881 Total 227,821 190,097

5.3 Off premises fee and commission income At 31 December 2014, this item amounted to 311,906 thousand euro (264,705 thousand euro at 31 December 2013), 9,602 thousand euro of which related to entry fees and 302.304 thousand euro to maintenance fees.

5.4 Off premises fee and commission expense At 31 December 2014, this item amounted to 227,821 thousand euro (190,097 thousand euro at 31 December 2013).

99 Notes to the consolidated financial statements

Section 6 6.1 Breakdown of “Interest income and similar income” Interest This item amounts to 6,605 thousand euro (9,033 thousand euro at 31 December 2013). Items/Technical forms Debt Repurchase Other Total Total securities agreements 31/12/2014 31/12/2013 1. Held-for-trading financial assets 2. Financial assets measured at fair value 3. Available-for-sale financial assets 49 49 22 4. Held-to-maturity financial assets 5. Receivables 6,299 6,299 8,816 5.1 Due from banks 6,299 6,299 8,816 5.2 Due from financial institutions 5.3 Due from clients 6. Other assets 257 257 195 7. Hedging derivatives Total 49 6,556 6,605 9,033

The item “Other assets” includes interest accrued on loans granted to financial advisors.

6.2 Breakdown of “Interest expense and similar charges” This item amounts to 12,561 thousand euro (3,069 thousand euro at 31 December 2013). Items/Technical forms Repurchase Other Securities Other Total Total agreements loans 31/12/2014 31/12/2013 1. Due to banks 1,031 1,031 990 2. Due to financial institutions 3. Due to clients 4. Outstanding securities 11,447 11,447 1,915 5. Held-for-trading financial liabilities 6. Financial liabilities measured at fair value 7. Other liabilities 83 83 164 8. Hedging derivatives Total 1,031 11,447 83 12,561 3,069

“Due to banks - other loans” is mainly composed of interest expense on the loans raised by the Parent Company.

100 Gruppo Azimut “Net premiums” amount to 3,321 thousand euro (3,645 thousand euro at 31 Decem- Net premiums ber 2013) for premiums relating to unit-linked policies issued by the Irish insurance company AZ Life Ltd, classified as insurance contracts.

The item stood at 99,924 thousand euro (61,943 thousand euro at 31 December Net profits (losses) on 2013) and is composed of realised gains and losses and changes in the value of finan- financial instruments at cial assets and liabilities, relating to unit-linked policies, and designated at fair value. fair value through profit or loss

9.1 Breakdown of “Personnel costs” This item amounts to 48,008 thousand euro (37,685 thousand euro at 31 December Section 9 Administrative costs 2013). The breakdown is as follows:

Items Total 31/12/2014 Total 31/12/2013 1. Employees 28,195 23,506 a) wages and salaries 20,760 17,335 b) social security 5,449 4,403 c) staff severance pay (TFR) d) pension contributions e) TFR provisions 739 650 f) accrual to the pension provision and similar obligations: defined contribution defined benefit g) private pension plans: 43 47 defined contribution 43 47 defined benefit h) other expenses 1,204 1,071 2. Other personnel 1,639 528 3. Directors and Statutory Auditors 18,174 13,651 4. Early retirement costs 5. Cost recoveries for employees seconded to other companies 6. Reimbursed costs for employees seconded to the company Total 48,008 37,685

101 Notes to the consolidated financial statements

9.2 Average number of employees by category Position 2014 2013 Managers 58 44 Middle managers 88 60 Other employees 141 85 Total 287 189

9.3 Breakdown of “Other administrative costs” This item amounts to 66,988 thousand euro (58,999 thousand euro at 31 December 2013). The breakdown is as follows: Total Total 31/12/2014 31/12/2013 Professional services 7,387 4,811 Advertising, promotion and marketing expenses 10,384 9,876 Telephone and fax 1,434 1,159 Enasarco/Firr contributions 5,849 5,076 Lease and rent 3,883 3,334 Insurance premiums 901 675 Tax liabilities 254 134 Lease and hire 3,719 3,990 Outsourcing and EDP services 22,057 18,557 Maintenance costs 489 900 Other administrative costs 10,631 10,487 Total 66,988 58,999

Advertising, promotion and marketing costs include VAT on royalties paid by the subsidiaries Azimut Consulenza Sim Spa and Azimut Capital Management Sgr Spa to Azimut Holding Spa, amounting to 440 thousand euro.

102 Gruppo Azimut Net impairment and write-ups of tangible assets based on depreciation at 31 Decem- Section 10 ber 2014 are broken down as follows: Net impairment and write- ups of tangible assets 10.1 Breakdown of “Net impairment and write-ups of tangible assets” Items/impairment Depreciation Impairment Write-ups Net result and write-ups write-downs 1 Group-owned 1,166 1,166 business purposes 1,166 1,166 investment purposes 2. Under finance lease business purposes investment purposes Total 1,166 1,166

Net impairment and write-ups of intangible assets based on amortisation at 31 De- Section 11 cember 2014 are broken down as follows: Net impairment and write-ups of intangible assets 11.1 Breakdown of “Net impairment and write-ups of intangible assets” Items/impairment Amortisation Impairment Write-ups Net result and write-ups write-downs 1. Goodwill 2. Other intangible assets 4,997 4,997 2.1 Group-owned 4,997 4,997 generated internally other 4,997 4,997 2.2 Under finance lease Total 3,271 3,271

13.1 Breakdown of “Net accruals to provisions for risks and charges” Section 13 This item amounts to 5,651 thousand euro (2,383 thousand euro at 31 December Net accruals to provisions 2013) and includes the accrual to the supplementary indemnity provision for agents for risks and charges (8,807 thousand euro) and the net accrual to the provision for sundry risks and changes of -3,156 thousand euro, related to risks for disputes with clients, as described in the note to “Provisions for risks and charges” - Section 11 of Liabilities.

103 Notes to the consolidated financial statements

Section 14 14.1 Breakdown of “Other operating income and costs” Other operating income This item amounts to 7,825 thousand euro (2,448 thousand euro at 31 December and costs 2013) and is mainly composed of trade expenses and current account bank charges, in addition to charge-backs made to financial advisors and income for “soft commissions” received thanks to specific agreements.

Section 15 15.1 Breakdown of “Profit (loss) on equity investments” Profit (loss) on equity This item is a loss of 1,177 thousand euro (265 thousand euro at 31 December 2013). investments Items 2014 2013 1. Income 35 1.1 Revaluations 35 1.2 Profit on disposal 1.3 Write-ups 1.4 Other increases 2. Costs 1,177 300 2.1 Write-downs 142 2.2 Losses on disposal 1,177 2.3 Impairment write-downs 2.4 Other costs 158 Net result 1,177 265

17.1 Breakdown of “Income tax on profit from continuing operations” Section 17 Income tax on profit from Total Total continuing operations 31/12/2014 31/12/2013 1. Current taxes 93,763 28,520 2. Changes in current taxes of previous years 3. Decrease in current taxes for the year Italian Law no. 214 4. Change in deferred tax assets (3,542) (4,968) 5. Change in deferred tax liabilities 1,386 2,809 Taxes for the year 91,607 26,361

Income tax for the year mainly refers 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

104 Gruppo Azimut 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. Current taxes include the payment of taxes related to the settlement of the tax dispute with the Tax Authority as described in the Management Report, section “Tax position”, to which reference should be made, net of prior year tax accruals. “Change in deferred tax assets” includes the release of deferred tax assets on the amount of the lease instalment deductible during the year, 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 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.

17.2 Reconciliation of theoretical tax burden and effective tax burden 31/12/2014 Pre-tax profit 184,847 Applicable theoretical rate 27.5 Theoretical tax burden 50,833 Effect of increases 2,515 Effect of decreases (2,846) Change in deferred tax assets 3,343 Change in deferred tax liabilities 2,030 Other increases (338) Current Irap taxes 7,149 Decreases for companies excluded from the CNM (47,745) Change in prior year current taxes of the Group 76,666 Taxes as per the financial statements 91,607

This item is positive by 1,145 thousand euro (126 thousand euro at 31 December Section 21 2013) and reflects the net balance of profits and losses attributable to minority inte- Profit (loss) for the year rests in consolidated companies. attributable to minority interest

105 Notes to the consolidated financial statements

Part D - Other information

Section 1 C. Portfolio management Specific references to business activities C.1 Total value of portfolio management Total 31/12/2014 Total 31/12/2013 of which invested in of which invested in AM company funds AM company funds 1. Proprietary portfolio management 4,374,465 424,800 2,771,924 230,193 2. Discretionary portfolio management 845,760 32,970 402,774 33,550 3. Portfolio management delegated to third parties

C.1 Total net value of pension funds Net value of pension funds managed by Azimut Capital Management Sgr Spa at 31 December 2014: Total Total 31/12/2014 31/12/2013 1. Proprietary portfolio management 1.1 Open-ended pension funds Azimut Previdenza Comparto Protetto 31,377 26,599 Azimut Previdenza Comparto Equilibrato 134,211 103,838 Azimut Previdenza Comparto Crescita 157,137 132,949 Prev obbligazionario 2,847 457 Total proprietary portfolio management 325,572 263,843 2. Discretionary portfolio management 2.1 Pension funds open-ended closed-ended other forms of pension funds Total discretionary portfolio management 3. Portfolio management delegated to third parties 3.1 Pension funds open-ended Azimut Previdenza Comparto Garantito 38,713 23,063 closed-ended other forms of pension funds Total portfolio management delegated to third parties 38,713 23,063

106 Gruppo Azimut D. Sales D.3 Sales and distribution: products and services sold off premises (value) Total 2014 Total 2013 Group company Third party Group company Third party products and products products products services and services and services and services 1. Debt securities structured securities other 2. Equity securities 3. UCI units 5,066,094 558,453 3,169,668 229,000 4. Other financial instruments 5. Insurance products 905,633 911,880 1,004,413 55,403 6. Loans of which leasing of which factoring of which consumer credit of which other 7. Portfolio management 1,613,811 1,028 8. Other (mortgages) Total 7,585,538 1,470,333 4,175,109 284,403

107 Notes to the consolidated financial statements

E. Order receipt and transmission E.1 Order receipt and transmission Amount Intra-group Transactions transactions with third parties A. Buy orders during the year 313,841 A.1 Debt securities 108,502 A.2 Equity securities 160,583 A.3 UCI units 27,587 A.4 Derivative instruments 13,164 financial derivatives 13,164 loan derivatives A.5 Other financial instruments A.6 Currencies 3,726 A.7 Other 279 B. Sell orders during the year 536,443 B.1 Debt securities 274,914 B.2 Equity securities 209,487 B.3 UCI units 29,403 B.4 Derivative instruments 22,210 financial derivatives 22,210 loan derivatives A.5 Other financial instruments B.6 Currencies 197 B.7 Other 230

F. Advisory services on: Investments: 142,368 existing contracts.

H. Custody and management of financial instruments With regard to order receipt, the Group’s investment firms have deposited the following client-owned assets with third parties at 31 December 2014: 1,318,586 thousand euro (market value which does not include accruals on the reporting date).

L. Commitments L.1 Commitments relating to guaranteed pension funds Azimut Capital Management Sgr Spa has created a guaranteed pension fund. The management of this fund product has been delegated to a leading insurance company. This Azimut Previdenza pension fund guarantees the policyholder at least the

108 Gruppo Azimut amount of capital invested (net of all charges to be paid by the policyholder, as well as any advances and redemptions) in addition to a guaranteed minimum return of 2% per annum once certain requirements have been met. The guaranteed minimum return is paid by the aforementioned insurance company.

L.2 Commitments and guarantees issued to third parties Guarantees were as follows at 31 December 2014: 31/12/2014 31/12/2013 Collateral and personal guarantees 4,617 8,282 Total 4,617 8,282

As regards the business activities of the subsidiary AZ Life Ltd, for as long as there is no change in the shareholder structure, Azimut Holding Spa has made a commitment to the IFSRA (Irish Financial Services Regulatory Authority) to provide the insurance company with the necessary capital in the event that it is unable to meet an adequate solvency margin, in accordance with the relevant regulations.

L.3 Commitments and guarantees from third parties The Group has not received guarantees from third parties.

L.4 Own securities deposited with third parties. Own securities in custody of third parties 2014 2013 UCI units deposited with BNP Paribas 221,295 66,407 UCI units deposited with Banque De Rothschild Luxembourg 24,054 23,162 UCI units deposited with Takasbank 54 40 UCI units deposited with BTG Pactual 10,779 5,693 Government securities and bonds deposited with other credit institutions 1,743 2,018 Azimut Holding Spa treasury shares deposited with Banco Popolare 186,148 202,056 Azimut Holding Spa treasury shares deposited with BPVI 1,481 5,099 Total 445,554 304,475

L.5 Third-party assets under custody Third-party assets and securities entrusted by clients using individual and collective portfolio management services are deposited at the custodian bank Banco Popolare Società Cooperativa. Third-party assets and securities entrusted by clients and invested in hedge funds are deposited with the custodian bank Banco Popolare Società Cooperativa. Third-party assets and securities entrusted by clients and invested in Luxembourg funds are deposited with the custodian bank BNP Paribas. Third-party assets and securities entrusted by clients invested in the Irish fund Aliseo

109 Notes to the consolidated financial statements

Europe are deposited with the custodian bank BNY Mellon Global Investment Ser- vicing (International) Limited. Third-party assets and securities entrusted by clients invested in the discretionary portfolios of CGM Italia Sim Spa and Compagnie Monegasque Privèe, are mainly deposited with: Banca Popolare Commercio e Industria, UBS Milan, Banca Gene- rali, Banca BSI Monaco. Third-party assets and securities entrusted by clients and invested in Luxembourg funds are deposited with the custodian bank BNP Paribas. Third-party assets and securities entrusted by clients and invested in Luxembourg funds are deposited with the custodian bank BNP Paribas. Third-party assets and securities entrusted by clients to AZ Investment Management are deposited with the custodian bank ICB, Shanghai Branch. Third-party assets and securities entrusted by clients and invested in Brazilian funds are deposited with the custodian bank BTG Pactual Sa.

2.1 Market risks Section 2 Information on risk management and 2.1.1 Interest rate risk hedging policies Qualitative information The interest rate risk refers to the loan granted 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 31 December 2014, only Line B remains for a residual amount of 40 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, no specific interest rate risks exist as the company’s bonds bear fixed -in terest rates. The “Senior” bond issued in 2011 provides for a fixed rate of 2.5% and the subordinated convertible bond 2013-2020 provides for a fixed rate of 2.125%.

110 Gruppo Azimut Quantitative information 1 Distribution by remaining life (repricing date) of financial assets and liabilities

Items/ On demand Up to 3 From From From From Over Unspecified Remaining life months over 3 over 6 over 1 over 5 10 years duration to up to months year years 6 months to up to to up to to up to 1 year 5 years 10 years 1. Assets 1.1 Debt securities 1.2 Other assets 2. Liabilities 2.1 Payables 40,172 100 2.2 Debt securities 835 215,845 2.3 Other liabilities 3. Derivatives 3.1 Long positions 3.2 Short positions

2.1.2 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 31 December 2014, totalling 3,845 million euro, considering the fact that this refers to investments relating to unit-linked 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 com- pletely 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 year, as well as in the first few months of 2015. Specifically, the assessment is performed by periodically checking that the management of the Eskatos – AZ Multistrategy ILS Fund (a 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 tests and scenario analyses to identify any potential risks associated to significant events related to the value of the

111 Notes to the consolidated financial statements

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 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.

Quantitative information Trading portfolio Other Equity securities/UCI Book value Book value Level 1 Level 2 Level3 Level 1 Level 2 Level 3 1. Equity securities 2. UCI 2.1 Italian harmonised open-ended non-harmonised open-ended closed-ended speculative 2.2 other UE countries harmonised 221,295 non-harmonised open-ended non-harmonised closed-ended 2.3 non-EU countries open-ended 37,502 closed-ended Total 258,797

112 Gruppo Azimut 2.1.3 Currency risk The portfolio is mainly comprised of funds in euros, not exposed to the currency risk.

2.2 Operational risks 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 Com- mittee and, if required, the necessary action is subsequently taken. For more information, please see the section “Key risks and uncertainties” for Azi- mut Holding and the Group in the Management Report.

2.3 Credit risk As for credit risk, there are no specific problems given the nature of the company’s activity.

2.4 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 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 312,386 thousand euro (31 De- cember 2013: 363,526 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 debt”.

113 Notes to the consolidated financial statements

Quantitative information

Items/time On demand From over From over From over From over From over From over From over From over Over Unspecified brackets 1 day up 7 days up 15 days up 1 to up to 3 to up to 6 months 1 years 3 years 5 years duration to 7 days to 15 days to a month 3 months 6 months to up to to up to to up to 1 year 3 years 5 years Assets on a cash basis A.1 Debt securities 1,743 A.2 Other debt securities A.3 Loans A.4 Other assets 640,278 Liabilities on a cash basis B.1 Payables to: Banks 40,172 100 Financial institutions Clients B.2 Debt securities 835 215,850 B.3 Other liabilities 111,069 Unrecognised transactions C.1 Financial derivatives with capital exchange Long positions Short positions C.2 Financial derivatives without capital exchange Positive differentials Negative differentials C.3 Loans to be received Long positions Short positions

114 Gruppo Azimut 3.1 Company shareholders’ equity Section 3 Information on 3.1.1 Qualitative information Shareholders’ Equity For information on the individual shareholders’ equity items, please refer to Part B of these notes.

3.1.2 Quantitative information 3.1.2.1 Company shareholders’ equity: breakdown Items/Value 31/12/2014 31/12/2013 1. Share capital 32,324 32,324 2. Share premium reserve 173,987 173,987 3. Reserves 349,059 334,077 income-related a) legal 6,465 6,465 b) statutory c) treasury shares d) other 382,086 342,616 other (39,492) (15,004) 4. (Treasury shares) (81,555) (82,224) 5. Valuation reserves (481) (771) Available-for-sale financial assets 1,956 177 Tangible assets Intangible assets Foreign investment hedge Cash flow hedge Foreign exchange differences (1,767) (720) Non-current assets held for sale and discontinued operations Special revaluation laws Actuarial gains/losses on defined benefit plans (670) (228) Share of valuation reserves for investments measured at equity 6. Equity instruments 71,715 72,521 7. Profit (loss) for the year 92,096 155,753 Total 637,145 685,667

115 Notes to the consolidated financial statements

3.1.2.2 Valuation reserves of Available-for-sale financial assets: breakdown Assets/Value Total 31/12/2014 Total 31/12/2013 Positive Negative Positive Negative reserve reserve reserve reserve 1. Debt securities 123 68 2. Equity securities 3. UCI units 1,833 434 (325) 4. Loans Total 1,956 502 (325)

3.1.2.3 Valuation reserves of Available-for-sale financial assets: annual change Debt Equity UCI Loans securities securities units 1. Opening balance 68 109 2. Increases 55 4,245 2.1 Increases in fair value 55 3,126 2.2 Transfer through income statement of negative reserves: 1,119 following impairment following disposal 2.3 Other changes 3. Decreases 2,521 3.1 Decreases in fair value 1,380 3.2 Impairment write-downs 1,141 3.3 Transfer through income statement of positive reserves: following disposal 3.4 Other changes 4. Closing balance 123 1,833

3.2 Regulatory capital and capital ratios Own funds have been determined in accordance with EU regulation no. 575/2013 of the European Parliament published in the Official Journal of the European Union no. L 176 of 26 June 2013 and directive 2013/36/EU published in the Official Journal of the European Union no. L 176 of 27 June 2013.

116 Gruppo Azimut 3.2.1 Own funds 3.2.1.2 Quantitative information The table below shows the capital adequacy of the group of SIMs calculated in accordance with ruling legislation: A. Common Equity Tier 1 capital (CET1) before 534,398 the application of prudential filters of which CET1 instruments subject to transitional provisions B. CET1 prudential filters (+/-) C. CET1 gross of the items to be deducted and the effects of the transitional regime (A +/- B) 534,398 D. Items to be deducted from CET1 - 472,297 E. Transitional regime - Impact on CET1 (+/-) F. Total Common Equity Tier 1 capital (CET1) (C - D +/- E) 62,101 G. Additional Tier 1 class (AT1) capital gross of the items 36,358 to be deducted and the effects of the transitional regime of which AT1 instruments subject to transitional provisions D. Items to be deducted from CET1 E. Transitional regime - Impact on CET1 (+/-) L. Total Additional Tier 1 capital (AT1) (G - H +/- I) 36,358 G. Additional Tier 2 class (AT1) capital gross of the items 216,685 to be deducted and the effects of the transitional regime of which T2 instruments subject to transitional provisions D. Items to be deducted from CET1 O. Transitional regime - Impact on T2 (+/-) P. Total Tier 2 capital (T2) (M - N +/- O) Q. Total own funds (F + L + P) 315,144

117 Notes to the consolidated financial statements

3.2.2.2 Quantitative information Quantitative information about the group of SIMs at 31 December 2014 is given below in accordance with the above legislation: Capital requirements Total 2014 Capital requirement for market risks Capital requirement for counterparty and credit risks Capital requirement for credit rating assessment risk Capital requirement for regulation risk Additional capital requirement for concentration risk Capital requirement: based on fixed overheads 498,662 Capital requirements for operational risks Other capital requirements Total capital requirements required by prudential legislation Opening capital Risk Activities And Capital Ratios 1. Fixed cost exposure 498,662 2. CET1 capital ratio 15.10% 3. Tier 1 capital ratio 22.40% 4. Total capital ratio 65.80%

Information on capital adequacy, risk exposure and the general characteristics of the procedure followed to identify, measure and manage these risks is available on the company website at www.azimut.it, in accordance with the Bank of Italy regulation.

3.2.2 Group Capital adequacy Azimut Holding Spa’s (the Parent Company of the Azimut Group) financial group includes all direct and indirect subsidiaries. Total capital resources 514,240 Capital requirements of financial components (70,222) Required solvency margin of insurance components (3,700) Total capital requirements (73,922) Total surplus (deficit) 440,317

118 Gruppo Azimut Section 4 Statement of comprehensive income

Items Pre-tax profit Income tax Net profit 10. Profit (loss) for the year 184,846 (91,605) 93,241 Other comprehensive items not transferred through profit or loss (622) 171 (451) 20. Tangible assets 30. Intangible assets 40. Defined benefit plans (622) 171 (451) 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. Foreign exchange differences: (1,047) (1,047) a) changes in fair value b) transfer through profit or loss c) other changes (1,047) (1,047) 90. Cash flow hedge: a) changes in fair value b) transfer through profit or loss c) other changes 100. Available-for-sale financial assets: 2,815 (1,027) 1,788 a) changes in book value 2,235 (867) 1,368 b) transfer through profit or loss 580 (160) 420 impairment write-downs 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

119 Notes to the consolidated financial statements

Items Pre-tax profit Income tax Net profit 120. Share of valuation reserves of investments measured at equity: a) changes in fair value b) transfer through profit or loss impairment write-downs profits/losses on disposal c) other changes 130. Total other comprehensive income 1,146 (856) 290 140. Comprehensive income (Items 10+130) 185,992 (92,461) 93,531 150. Consolidated comprehensive income attributable to minority interest 1,800 (655) 1,145 160. Consolidated comprehensive income attributable to parent company 184,192 (91,806) 92,386

Section 5 5.1 Information on key management fees Related party transactions Director compensation amounted to 17,558 thousand euro in 2014. Fees for the Board of Statutory Auditors, calculated based on the parameters in force, amounted to 615 thousand euro.

5.2 Loans and guarantees issued to Directors and Statutory Auditors At 31 December 2014, no guarantees had been issued to directors and statutory auditors.

5.3 Related party disclosures Related party transactions refer exclusively to commercial transactions carried out by Azimut Holding Spa with its subsidiaries and associates, and among its subsidiaries and/or associates in 2014. They 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 Spa and Azimut Consulenza Sim Spa pay Azimut Holding Spa annual royalties totalling 2,000 thousand euro, established by contract; • Azimut Holding Spa, as the parent company, Azimut Capital Management Spa and Azimut Consulenza Sim Spa, 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; • 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 Spa and Azimut Consulenza Sim Spa; • Azimut Holding Spa has issued guarantees to the subsidiary Azimut Consulenza Sim Spa.

120 Gruppo Azimut Azimut Consulenza Sim Spa and AZ Investimenti Sim Spa (merged into Azimut Consulenza Sim Spa on 31 December 2014) have disbursed loans to several financial advisors, identified as related parties, to develop their business. These terms and conditions of these loans are arm’s length. At 31 December 2014, they amounted to 7,369 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 Sha- reholders’ resolutions, 12 key directors subscribed 238,447 instruments (paying the corresponding amount), including the Chairman and Chief Executive Officer Pietro Giuliani (95,650), the Co-CEO Marco Malcontenti (33,000), the General Manager Paola Antonella Mungo (33,000), the directors Stefano Gelatti Mach de Palmstein (20,000), Andrea Aliberti (15,000), Paolo Martini (15,000), Aldo Mondonico (4,940) and Monica Nani (5,357). As per the Shareholders’ agreement related to Azimut Holding Spa, 695 related parties subscribed a total of 1,191,714 profit-participating instruments. Following the call option exercised by Azimut Holding Spa in May 2014, at the reporting date, the company held 69,839 profit-participating financial instruments. With respect to the scheme described in the paragraph “Sales of Apogeo Consulting Sim Spa shares” of the Management Report, the sale which took place during the year involved, inter alia, the Initiative Founding members, some of which are also directors thereof. The following table shows the impact that the transactions or positions with related parties have on the Group’s financial position:

Total Related parties Absolute % value Assets Receivables 341,453 7,369 2.16 Liabilities Other liabilities 54,787 9,347 17.06 Income statement Fee and commission expense 227,821 9 0.00 Administrative costs 114,996 18,853 16.39

These items are described in detail in the corresponding sections of Parts B and C of these notes.

121 Notes to the consolidated financial statements

Section 6 6.1 Average number of financial advisors Other information In 2014, the average number of financial advisors amounted to 1500.

6.2 Dividends paid The ordinary dividend for 2014 amounted to 0.10 euro per share, with an extraordinary dividend of 0.60 euro.

6.3 Significant non-recurring events and transactions The significant non-recurring events that took place in 2014 are as follows: • acquisition of 50% of AZ FI Holding Sa against a total consideration of 3.8 million euro; • repurchase of 284,000 Apogeo Consulting Spa shares (merged into Azimut Consu- lenza Sim Spa on 31 December 2014) by its financial advisors against a total consideration of 6 million euro; • subscription of a call option on 64,804 profit-participating financial instruments, which resulted in an increase in the shareholders’ equity item “Other reserves” for 1,555 thousand euro; • acquisition of 51% of Augustum Opus Sim Spa against a total consideration of 10 million euro; • repayment of the instalment (Line B) of the loan granted by Banco Popolare, contractually due on 30 June 2014, for a total amount of 10,000 thousand euro; • total early repayment, at 20% of the par value of the subordinated bond (“Azimut 2009-2016 subordinato 4%”), which led to a reduction in the liability item “Outstan- ding securities” of 17,133 thousand euro; • acquisition of 82.14% of Profie Mexicana Sa against a total consideration of 8.7 million euro; • acquisition of 70% of AZ Notus Portfoy Yonetimi AS against a total consideration of 2.4 million euro; • cash payment totalling 81,522 euro following the agreement reached with the Tax Authority for the tax dispute concerning the tax years from 2001 2013.

There were no atypical and/or unusual transactions.

6.5 Auditing and non-auditing service fees Pursuant to article 149 duodecies of Consob regulation no. 11971/99 and subsequent amendments and supplements, the breakdown of fees (net of VAT and expenses) due to the audit company and companies within its network for auditing and non-auditing services during 2014 are as follows:

122 Gruppo Azimut Service Service provider Recipient Fees euro/’000 Audit PricewaterhouseCoopers Spa Parent Company - Azimut Holding Spa 35 Subsidiaries(*) 256 PricewaterhouseCoopers Spa network Subsidiaries (**) 878 Tax services PricewaterhouseCoopers Spa Parent Company - Azimut Holding Spa 2 Subsidiaries(*) 2 Financial & tax due diligence PricewaterhouseCoopers Advisory Spa Parent Company - Azimut Holding Spa 52 Financial & tax due diligence PricewaterhouseCoopers Spa network Subsidiaries 3 Group total 1,227

(*) This amount includes: 83,640 euro for the audit of the financial statements of the funds managed by Azimut Capital Management Sgr Spa not included in the income statement as the related cost is borne by the funds. (**) This amount includes 544,274 euro for the audit of the AZ Fund 1 and AZ Multi Asset funds managed by AZ Fund Management Sa not included in the income statement as the related cost is borne by the Fund.

On behalf of the Board of Directors Chairman and CEO (Pietro Giuliani)

123 124 Gruppo Azimut Certification of the consolidated 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 Marco Malcontenti, Manager in charge of financial reporting of Azimut Holding Spa, 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 2014 consolidated financial statements.

2. The evaluation of the adequacy of the administrative and accounting procedures for the preparation of the consolidated financial statements at 31 December 2014 is based on a process designed by Azimut Holding in line with the Internal Control – Integrated Framework model issued by the Committee of Sponsoring Organisations of the Treadway Commission, an internationally accepted reference framework.

3. The undersigned also represent that:

3.1. the consolidated financial statements: • are consistent with the accounting books and records; • have been prepared in accordance with the International Accounting Standards (IAS) / International Financial Reporting Standards (IFRS) endorsed by the Europe- an Commission, pursuant to (EC) Regulation No. 1606/2002 issued by the Europe- an Parliament and Council and effective at the date these financial statements were approved, as well as with every relevant applicable interpretation, and the provisions issued to implement Article 9 of Italian Legislative Decree no. 38/2005 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 Management Report contains a reliable analysis of the consolidated operating performance and results, in addition to the situation of the issuer and the consolidated companies, and a description of the main risks and uncertainties to which Azimut Group is exposed.

Milan, 12 March 2015

Chairman and Chief Executive Officer Manager in charge of financial reporting (Pietro Giuliani) (Marco Malcontenti)

125 126 Gruppo Azimut Azimut Holding Spa Financial statements at 31 December 2014

127 128 Gruppo Azimut Report on the company’s financial condition and operating performance

Dear Shareholders, At 31 December 2014, net profit amounted to 136,509,410 euro (148,509,791 euro at 31 December 2013). Operating profit came to 137,209,347 euro (2013: 151,416,390 euro) and is mainly due to the dividends collected which amounted to 155,755,351 euro at year end (2013: 160,529,137 euro). Operating profit is comprised of dividends paid by the group companies and recognised on a cash basis and of a 75,300,000 euro interim dividend for 2014 paid by the subsidiary AZ Fund Management Sa in December 2014 (in 2013, the interim dividend amounted to 63,750,000 euro). Interest expense amounts to 12,008,287 euro (2013: 2,989,182 euro). The increase is due to the Convertible bond “Azimut 2013-2020 subordinato 2.125%” issued in No- vember 2013.

With regard to the methods used to assess net financial debt, shown in the table below, 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 have been excluded.

129 Report on the company’s financial condition and operating performance

Items 31/12/2014 31/12/2013 A Cash 11,255 3,722 B Cash equivalents: 101,622,440 326,028,145 Due from banks 101,622,440 326,028,145 C Available-for-sale financial assets 218,271,525 68,930,174 D Total cash A+B+C 319,905,220 394,962,041 E Short-term receivables F Short-term bank loans G Current portion of long-term debt: 10,815,402 13,739,473 Bonds (Azimut ‘09-’16) (353,828) Bonds (Azimut ‘11-’16 Senior) (18,829) (18,829) Bonds (Azimut ‘13-’20 Convertible) (524,073) (52,397) Due to banks (lease-back) (100,000) (3,122,752) Due to banks (Banco Popolare loan) (10,172,500) (10,191,667) H Other short-term payables I Short-term financial debt F+G+H (10,815,402) (13,739,473) J Short-term financial debt (net) I-E-D 309,089,818 381,222,568 K Long-term bank loans: (30,000,000) (40,100,000) Due to banks (Banco Popolare loan) (30,000,000) (40,000,000) Due to banks (lease-back) (100,000) L Bonds (216,139,233) (227,942,965) Bonds (Azimut ‘09-’16) (16,768,438) Bonds (Azimut ‘11-’16 Senior) (818,384) (813,142) Bonds (Azimut ‘13-’20 Convertible) (215,320,849) (210,361,385) M Other long-term debt N Long-term financial debt K+L+M (246,139,233) (268,042,965) O Net (financial) debt J+N 62,950,585 113,179,603

Net financial position is positive for 62.9 million euro and reflects the 115 million euro dividends paid to shareholders and holders of profit-participating financial instruments and the payment of 1.8 million euro to Fondazione Azimut Onlus made in execution of the Shareholders’ resolution of 24 April 2014, in addition to the following main transactions carried out during the year: • on 18 April 2014, after checking controls over the granting of profit-participating financial instruments (subscribed as per the shareholders’ resolution of 29 April 2010 and subsequent resolutions of the Board of Directors), the total number of instruments was revised, leading to the subscription of 64,804 profit-participating financial instruments at 24 euro each, for a total of 1,555,296 euro by the so-called top key people;

130 Gruppo Azimut • on 27 June 2014, Azimut Holding Spa acquired 51% of Augustum Opus Sim Spa against a total consideration of 10,000,000 euro; • during the year, Azimut Holding Spa made capital injections of 3,324,723 euro in favour of Programma 101 Spa; • during the year, in execution of the Executive Committee’s decision of 22 January 2013, Azimut Holding Spa made a capital injection of 18,250,000 euro to increase the share capital of AZ International Holdings Sa; • during the year, in execution of the Executive Committee’s decision of 16 December 2014, Azimut Holding Spa made a capital injection of 5,000,000 euro to increase the share capital of AZ Life Ltd.

Azimut Consulenza Sim Spa Performance of subsidiaries Net profit at 31 December 2014 amounted to 50,016,945 euro (at 31 December 2013: 29,068,583 euro).

AZ Fund Management Sa

Net profit at 31 December 2014 amounted to 178,772,044 euro (at 31 December 2013: 156,586,845 euro).

AZ Life Ltd

Net profit at 31 December 2014 amounted to 13,455,167 euro (at 31 December 2013: 13,330,139 euro).

Azimut Capital Management Sgr Spa The net loss at 31 December 2014 amounted to 34,172,594 euro (at 31 December 2013: 21,136,586 euro).

AZ Capital Management Ltd

The net loss at 31 December 2014 amounted to 36,296 euro (at 31 December 2013: 196,715 euro).

Azimut Global Counseling Srl

The net loss at 31 December 2014 amounted to 463,448 euro (at 31 December 2013: 155,095 euro).

131 Report on the company’s financial condition and operating performance

Azimut Enterprises Holding Srl

The net loss at 31 December 2014 amounts to 1,061 euro.

Augustum Opus Sim Spa

The net profit at 31 December 2014 amounts to 1,956,388 euro.

AZ International Holdings Sa

Net profit at 31 December 2014 amounted to 341,166 euro (at 31 December 2013: 350,985 euro).

Significant events Capital injections to AZ International Holdings Sa of the year In 2014, following the Executive Committee’s resolution of 22 January 2013, Azimut Holding Spa made a capital injection of 18.25 million euro to increase the share capital of the subsidiary AZ International Holdings Sa.

Profit-participating financial instruments On 18 April 2014, after checking controls over the granting of profit-participating financial instruments (subscribed as per the shareholders’ resolution of 29 April 2010 and subsequent resolutions of the Board of Directors), the total number of instruments was revised, leading to the subscription of 64,804 profit-participating financial instruments at 24 euro each, for a total of 1,555,296 euro by the so-called top key people. Consequently, as resolved by the shareholders on 29 April 2010, the profit-participating financial instruments subscribed by financial advisors, employees and managers of the Azimut Group (top key people - related parties as per the Shareholders’ agreement related to Azimut Holding Spa), totalled 1.430.161 (34,323,864 euro). Profit- participating financial instruments are issued at 24 euro each, as calculated by the Board of Directors based on the latest appraisal carried out by a leading independent company which applied two different assessment methodologies (a series of binary options, the capitalisation of a binary option), without identifying any critical issues.

Azimut Holding Spa Annual General Shareholders’ Meeting of 24 April 2014 The Shareholders’ Meeting of 24 April 2014 approved the following:

132 Gruppo Azimut Approval of 2013 financial statements The Shareholders’ Meeting approved the 2013 financial statements, which included a Parent Company net profit of 148.5 million euro. The Shareholders also approved a pre-tax ordinary dividend of 0.70 euro per share. They also approved the payment to Fondazione Azimut Onlus of 1.8 million euro, equal to 1% of pre-tax consolidated profit and the payment of 15.58 euro for each profit-participating financial instrument held by Top Key People at the time of approval of payment of the dividend.

Corporate Bodies The Shareholders approved the appointment of the sales manager as new member of Azimut Holding Spa’s Board of Directors, increasing the number of members from nine to ten.

Repurchase of Apogeo Consulting Spa shares As part of the scheme aimed at promoting the purchase of equity interests in Apogeo

133 Report on the company’s financial condition and operating performance

Consulting Sim Spa by the financial advisors who work with the company, who are also Initiative Founding members, completed at the end of 2013, on 30 April 2014, Azimut Holding Spa repurchased, based on the agreements between the parties, 284,000 Apogeo Consulting Spa shares, equal to 14.2% of its share capital against a total consideration of approximately 6 million. This transaction, which was carried out through the partial allocation of the Parent Company’s shares, enabled the financial advisors to become shareholders of Azimut Holding Spa.

Repayment of the Banco Popolare loan On 30 June 2014, the Parent Company repaid the instalment (Line B) of the loan granted by Banco Popolare for a total amount of 10 million euro.

Acquisition of 51% of Augustum Opus Sim Spa On 27 June 2014, having obtained authorisation from the Bank of Italy, Azimut Hol- ding Spa completed the acquisition of 51% of Augustum Opus Sim Spa, an independent asset management company. The consideration amounts to 10 million euro.

134 Gruppo Azimut assigned at the placement of the Subordinated Bond “Azimut 2009—2016 Subordi- nato 4%”, 405,169 warrants were exercised for a total amount of 4.9 million euro, in exchange for the delivery of the same amount of treasury shares.

Capital injections to increase the share capital of AZ Life Ltd On 23 December 2014, following the Executive Committee’s resolution of 16 De- cember 2014, Azimut Holding Spa made a capital injection of 5,000,000 million euro to increase the share capital of the subsidiary AZ Life Ltd.

Azimut Consulenza Sim Spa

135 Report on the company’s financial condition and operating performance

line the Group’s structure. Specifically, in Italy, the network of financial advisors for distribution activities will be grouped into one company. Moreover, organisational and management procedures will be streamlined, also generating cost savings with respect to administrative and accounting fulfilments. As per the merger deed dated 15 December 2014, AZ Investimenti Sim Spa and Apogeo Consulting Sim Spa were merged into Azimut Consulenza Sim Spa with tax and accounting effects as of 1 January 2014 and statutory effect as of 31 December 2014.

Tax Position On 29 November 2014, the Azimut Group reached an agreement with the Tax Au- thority to settle the tax disputes related to the Official Tax Audit Reports served between 2010 and 2013. Under the above agreement, the Group undertook to pay taxes and penalties of approximately 105.3 million euro (in addition to legal interest of about 11.8 million euro), related to tax periods from 2001 to 2013, mainly due to the review of the transfer pricing criteria applied to infragroup transactions.

Azimut holding spa Key risks and group: key risks and uncertainties For the purpose of risk monitoring, the Company has identified the main risks as follows:

136 Gruppo Azimut Sales network risks The Group’s investment firms (Sim – società d’intermediazione mobiliare) mainly recruit financial advisors with years of experience in the field, gained while working for rival companies or in bank retail services. The process of recruiting individual advisors is strict and involves both local branches and the marketing departments of the subsidiary investment firms. Moreover, in addition to past experience, quali- fications and references gained on the market are also considered. In the case of the subsidiary Azimut Consulenza Sim, its horizontal structure requires that financial advisors are able to perform their jobs autonomously: by focusing on this aspect during recruitment, the company tends to avoid choosing inexperienced candidates. As regards the subsidiaries AZ Investimenti Sim and Apogeo Consulting Sim Spa, (both merged into Azimut Consulenza Sim Spa on 31 December 2014), their pyramid structures are organised to allow area managers to constantly monitor the individual advisors’ ability to manage their client portfolios. Furthermore, in order to limit the risks arising from any fraudulent action taken by financial advisors in the performance of their duties, Azimut Consulenza Sim Spa purposely entered into insurance policies against loyalty risks and professional liability insurance for the financial advisors themselves (with the maximum annual claims deemed adequate for said advisors to operate). Finally, the Sim’s marketing department works closely with the Internal Audit department to share the information required to monitor the conduct of individual financial advisors. Internal control over financial advisors is based on the identification and analysis of possible irregularities in remote monitoring and inspections at financial advisors’ offices. These controls are carried out also to check compliance with presentation criteria, correct keeping of archives and fulfilments vis-a-vis the Body in charge of the Financial Advisors’ register. Should any irregularity be detected, or in case of non-compliance with the code of conduct, the financial advisors directly involved or their In-charge are asked to prepare a specific report giving explanations or to take adequate measures.

Operational risk Operational risk is related to potential losses due to inadequate or defective aspects of procedure, human resources, internal processes, or external events. As well as being generally evaluated in quantitative terms, monitored and mitigated in accordance with current regulations, this risk is also subject to qualitative assessment for the individual group companies. Therefore, the Group uses a process to identify and assess the operational risks based on Risk Self Assessment methods, which take account of the frequency and severity of identified risk factors. This procedure allows the companies to establish appropriate control and monitoring techniques, i.e. measures to limit the negative effects of any adverse conditions to which the Group is exposed. Given the presence of this type of risk, the Group has established the following measures to monitor and limit the effects: • mapping of main company processes, by means of an analysis of existing procedures and interviews with the heads of the various departments;

137 Report on the company’s financial condition and operating performance

• identification of risks within the mapped procedures; • evaluation of control measures (primary or secondary level) in respect of risk areas, highlighting any unmonitored situations; • definition and implementation of a reporting system via the Internal Control and Risk Management Committees, in order to report the final results on the unmonitored risks and any action taken.

Outsourcing risk Administrative and IT activities of the operating companies are outsourced to external companies. When the contracts with Objectway Financial Software Spa and Deloitte Enterprise Risk Service were signed, establishing the method used in the performance of the outsourced services, purposely created service level agreements were also drawn up to guarantee the adequacy of the services provided and allow the company to take action against the supplier in the event of any economic losses arising from problems in the supply of these services. Another measure to ensure that services are performed correctly was the creation of an Operating Committee, whose members come from both the Group’s operating companies affected by the agreement and the supplier company, to establish the procedures, define the timescales, and monitor the correct execution of all services provided. The Committee meets at least once a month and the participants are provided with a copy of the minutes of the meeting afterwards.

Reputational risk Reputational risk originates from risk factors such as compliance, strategy, outsourcing and other specific variables such as the public scenario, significance of the trademark and company image, exposure to external communication processes. In order to limit this type of risk, a series of procedures has been put in place aimed at minimising both its cause and effect, the most important aspects being: • complaints received by group companies are monitored constantly, so as to analyse any problems caused by strategic decisions and operating errors and the effects that these may have on the company’s reputation; • a record of corporate risks of all subsidiaries is constantly updated, in order to identify which departments, procedures and activities are most subject to reputational risks; • the Internal Control and Risk Management Committee, where the presence of managers allows for top-down management of action to be taken to limit reputational risks or respond to any events caused by them; • the Marketing and Investor Relations departments, centralised at Group level, have sole responsibility for dealing with public relations/external communications and the company’s image; • an Internal Code of Conduct governs the treatment of any action that gives rise to conflicts of interest, cases of insider trading or market abuse and any penalties as a result of failure to comply with regulations. With the introduction of regulations for the treatment of privileged information pur-

138 Gruppo Azimut suant to art. 115-b of Italian Legislative Decree no. 58/98 (TUF - Consolidated Law on Finance), Azimut Holding Spa established a Register for itself and on the behalf of its subsidiaries, by creating a database with the technical/operating features required to guarantee that logical and physical security requirements are met, records cannot be changed and that information is easily accessible.

Financial risk As regards financial risks, proprietary trading by group companies is exposed to market risks. Moreover, the financial instruments in question are easily liquidated and are monitored closely, most being mutual fund units managed by the Group companies. As for credit risk, there are no specific problems given the nature of the company’s activity.

Liquidity risk 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 cash flow

139 Report on the company’s financial condition and operating performance

generation; • monitoring prospective liquidity conditions during planning procedure.

Key uncertainties The uncertainties to which the Group is exposed derive from the specific nature of its core business, particularly as far as the strict correlation is concerned between income and certain types of fee items, the performance of which is determined by the results generated by the financial management of listed products and the performance in terms of capital generation. The generation of these revenues and the relative amount are by nature highly volatile and heavily influenced by the returns offered by the funds and the risk appetite of the clients during the period considered, factors that are in turn affected by the performance of reference markets and, more generally, of the national and international economies. There is therefore a risk that Group revenues and operating results may be weakened by prolonged financial market crises, which may eventually lead to low yields, to weak, if not even negative, net inflows of capital and, consequently, a reduction, sometimes significant, in the aforementioned fees.

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 Spa 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). With 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 2014. No other atypical or unusual transactions were performed.

Intra-group relationships For information on relations with group companies, please see Part D, Section 5 of the Notes to the financial statements on related party transactions.

Marketing activity In 2014, marketing, communication and training activities were mainly focused on providing sales support to financial partners, strengthening their specific skills and consolidating the Group’s distinctive features. With respect to marketing and training, considerable efforts were made to launch Azimut MAX, the new fee-based advisory service for managed portfolios. Specific attention was also given to the promotion of the Libera Impresa project, dedicated to Italian businessmen and companies. At the end of January, a two-day business forum was held at Rho Fiera with the participation of 65 speakers and 22 testimonials, attended by over 4,000 businessmen. The promotion and enhancement of the Libera Impresa project also continued with a tour in 12 Italian cities from May to November. Furthermore, in line with the 2013 communication guidelines, a new

140 Gruppo Azimut institutional communication campaign was promoted, focusing on the Group’s commitment to Italian companies which was aired on the main TV and Web channels. During the period September-October 2014, almost 5,000 announcements were aired. Significant training activities for financial partners involved the provision of over 1,200 hours of training during the year.

In 2014, the Company continued to develop its relations with institutional investors, Investor relations which account for the majority of the shareholder structure. Following approval of annual financial statements and interim reports, the Company organised conference calls and road-shows on the main European markets and in the U.S.. The Azimut Holding Spa stock is currently covered by the analysts of thirteen Italian and foreign investment firms. During the year, the stock price (reference price) rose from 19.83 euro at 30 December 2013 to 18.03 euro at 30 December 2014.

Azimut Holding Spa complies with corporate governance regulations in force in Organisational structure Italy. Moreover, the corporate governance structure partially reflects the recommen- and corporate governance dations contained in the Code of Conduct for Listed Companies published by Borsa Italiana. For more information reference should be made to the attached Report on corporate governance and ownership prepared pursuant to Article 123-bis of the Consolidated Law on Finance (TUF). Azimut has established a risk management and internal control system over financial reporting, using as a reference the “COSO Report”, under which the Internal Control in the broadest sense is “a process effected by an entity’s Board of Directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives”; specifically, the objective of reliable financial reporting.

Human resources At 31 December 2014, Company personnel amounted to 24, broken down as follows:

Position 31/12/2014 31/12/2013 Managers 12 9 Middle managers 11 11 Office staff 1 3 Total 24 23

141 Report on the company’s financial condition and operating performance

Research and The Company is not engaged in any research and development activities. development activities

Secondary and branch The Company has not set up any regional offices in Italy, nor is it engaged in any offices activity through branch offices.

Treasury shares At 31 December 2014, Azimut Holding Spa subsidiaries did not hold nor did they hold during the year any treasury shares or shares of the Parent Company, either directly or via trust companies or third parties. In 2014, 405,169 treasury shares were assigned against the exercise of the same number of warrants issued at the placement of the Subordinated Bond “Azimut 2009 - 2016 Subordinato 4%”, and transactions were carried out on treasury shares which resulted in a total decrease of 218,212. At 31 December 2014, Azimut Holding Spa’s treasury share portfolio therefore stood at 10,488,633 shares, or 7.322% of share capital (10,703,695 shares at 31 December 2013). With regard to transactions subsequent to 31 December 2014, up to the date of approval of this report, 21,660 treasury shares were assigned against the exercise of the same number of warrants issued at the placement of the Subordinated Bond “Azimut 2009 - 2016 Subordinato 4%”.

Business outlook Given the positive results of the subsidiaries for 2014 and considering the dividends proposed by the Boards of Directors of said companies at the respective Sharehol- ders’ Meetings, the Company is expected to generate a profit for 2015.

Profit allocation plan Dear Shareholders, we hereby submit for your approval the financial statements as at 31 December 2014, including the notes thereto, as submitted by the Board of Directors. The financial statements show a profit for the year of 136,509,410 euro, which we propose to allocate as follows: • 1,848,465 euro, or 1% of pre-tax consolidated profit, to be paid to the charitable organisation Fondazione Azimut pursuant to Article 32 of the By-laws. • a pre-tax ordinary dividend of 0.78 euro to be allocated to the Shareholders for each of the shares comprising the company’s share capital of 32,324,092 euro, excluding any treasury shares held on the day preceding the ex-dividend date, the ordinary dividend at 0.10 euro and an extra dividend of 0.68 euro; • 9.21 euro for each participating financial instrument held by Top Key People at the time of approval of payment of the dividend, equal to 0.00001% of consolidated profit, under Art. 32 of the By-laws; • the remainder to be allocated to “Other Reserves”.

142 Gruppo Azimut We propose that the dividend be paid as of 20 May 2015, 18 May 2015 as the ex- dividend payment date and 18 May 2015 as the record date.

Milan, 12 March 2015

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

143 144 Gruppo Azimut Azimut Holding Spa Financial statements at 31 December 2014

145 Balance sheet at 31 December 2014 Assets

Euro 31/12/14 31/12/13 10. Cash and cash equivalents 11,255 3,722 40. Available-for-sale financial assets 218,271,525 71,460,288 60. Receivables 101,622,440 326,028,145 90. Equity investments 419,526,433 326,147,939 100. Tangible assets 651,536 692,023 110. Intangible assets 186,023,052 185,378,053 120. Tax assets 24,937,192 34,496,935 a) current 8,946,640 17,021,614 b) deferred 15,990,552 17,475,321 of which pursuant to Italian Law 214/2011 840,278 130. Non-current assets held for sale and discontinued operations 75,000 140. Other assets 22,335,277 16,784,164 Total assets 973,378,710 961,066,269

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

146 Gruppo Azimut Balance sheet at 31 December 2014 Liabilities and shareholders’ equity

Euro 31/12/14 31/12/13 Payables 40,272,500 53,414,419 Outstanding securities 216,680,093 228,368,019 Tax liabilities 48,476,037 45,799,405 a) current 1,144,610 b) deferred 48,476,037 44,654,795 Other liabilities 29,663,583 13,099,461 Staff severance pay (TFR) 749,573 554,286 Provisions for risks and charges: 30,000 500,000 b) other provisions 30,000 500,000 Share capital 32,324,092 32,324,092 Treasury shares (-) (81,554,957) (82,224,263) Equity instruments 71,703,041 72,497,172 Share premium reserve 173,986,915 173,986,915 Reserves 302,309,060 274,271,928 Valuation reserves 2,229,363 (34,956) Profit (loss) for the year 136,509,410 148,509,791 Total liabilities and shareholders’ equity 973,378,710 961,066,269

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

147 Profit and loss account at 31 December 2014

Items (Euro) 2014 2013 30. Profits/losses on disposal or repurchase of: 3,940,103 (446,966) a) financial assets 4,691,748 (63,150) b) financial liabilities (751,645) (383,816) 50. Fee and commission income 2,000,000 2,000,000 70. Interest income and similar income 3,619,136 4,359,703 80. Interest expense and similar charges (12,008,287) (2,989,182) 90. Dividends and similar income 155,755,351 160,529,137 Total income 153,306,303 163,452,692 100. Net impairment loss (2,940,751) a) financial assets (2,940,751) 110. Administrative costs (14,109,803) (12,944,229) a) personnel costs (6,465,075) (6,054,168) b) other administrative costs (7,644,728) (6,890,061) 120. Net impairment loss of tangible assets (219,638) (155,614) 130. Net impairment loss of intangible assets (227,616) (228,424) 150. Net provisions for liabilities and charges 262,000 160. Other operating income / costs 1,138,852 1,291,965 Operating profit 137,209,347 151,416,390 170. Profit (loss) from equity investments (300,357) Pre-tax profit (loss) from continuing operations 137,209,347 151,116,033 190. Income tax on profit from continuing operations (699,937) (2,606,242) Net profit (loss) from continuing operations 136,509,410 148,509,791 Profit (loss) for the year 136,509,410 148,509,791

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

148 Gruppo Azimut Statement of comprehensive income

Items (Euro) 2014 2013 10. Profit (loss) for the year 136,509,410 148,509,791 Other comprehensive income, net of taxes, not transferred to profit or loss 20. Tangible assets 30. Intangible assets 40. Defined benefit plans (91,580) (9,149) 50. Non-current assets held for sale 60. Portion of valuation reserves of investments measured at equity Other comprehensive income, net of taxes, transferred to profit or loss 70. Foreign investment hedge 80. Exchange rate differences 90. Cash flow hedge 100. Available-for-sale financial assets 2,355,899 (181,103) 110. Non-current assets held for sale 120. Portion of valuation reserves of investments measured at equity 130. Total other comprehensive income/(expense), net of taxes 2,264,319 (190,252) 140. Comprehensive income (Item 10+130) 138,773,729 148,319,539

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

149 Statement of changes in shareholders’ equity for the year ended 31 December 2014

Allocation of retained earnings Changes during the year Shareholders’ equity transactin Items Balance at Change Balance at Reserves Dividends Changes Issue of Treasury share Extraordinary Changes Other Comprehensive Shareholders’ 31/12/13 in opening 01/01/14 and other in reserves new shares purchases dividend in equity changes income for equity at balance distributions payments instruments 2014 31/12/2014 Share capital 32,324,092 32,324,092 32,324,092 Share premium reserve 173,986,915 173,986,915 173,986,915 Other reserves: a) income-related 275,405,808 275,405,808 31,662,231 794,131 (4,419,230) 303,442,940 b) other (1,133,880) (1,133,880) (1,133,880) Equity instruments 72,497,172 72,497,172 (794,131) 71,703,041 Valuation reserves (34,956) (34,956) 2,264,319 2,229,363 Treasury shares (82,224,263) (82,224,263) (7,691,398) 8,360,704 (81,554,957) Profit )loss) for the year 148,509,791 148,509,791 (31,662,231) (116,847,560) 136,509,410 136,509,410

Shareholders’ equity 619,330,679 619,330,679 (116,847,560) (7,691,398) 3,941,474 138,773,729 637,506,924

150 Gruppo Azimut Allocation of retained earnings Changes during the year Shareholders’ equity transactin Items Balance at Change Balance at Reserves Dividends Changes Issue of Treasury share Extraordinary Changes Other Comprehensive Shareholders’ 31/12/13 in opening 01/01/14 and other in reserves new shares purchases dividend in equity changes income for equity at balance distributions payments instruments 2014 31/12/2014 Share capital 32,324,092 32,324,092 32,324,092 Share premium reserve 173,986,915 173,986,915 173,986,915 Other reserves: a) income-related 275,405,808 275,405,808 31,662,231 794,131 (4,419,230) 303,442,940 b) other (1,133,880) (1,133,880) (1,133,880) Equity instruments 72,497,172 72,497,172 (794,131) 71,703,041 Valuation reserves (34,956) (34,956) 2,264,319 2,229,363 Treasury shares (82,224,263) (82,224,263) (7,691,398) 8,360,704 (81,554,957) Profit )loss) for the year 148,509,791 148,509,791 (31,662,231) (116,847,560) 136,509,410 136,509,410

Shareholders’ equity 619,330,679 619,330,679 (116,847,560) (7,691,398) 3,941,474 138,773,729 637,506,924

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

151 Statement of changes in shareholders’ equity for the year ended 31 December 2013

Allocation of retained earnings Changes during the year Shareholders’ equity transactin Items Balance at Change Balance at Reserves Dividends Changes Issue of Treasury share Extraordinary Changes Other Comprehensive Shareholders’ 31/12/12 in opening 01/01/13 and other in reserves new shares purchases dividend in equity changes income for equity at balance distributions payments instruments 2013 31/12/2013 Share capital 32,324,092 32,324,092 32,324,092 Share premium reserve 173,986,915 173,986,915 173,986,915 Other reserves: a) income-related (*) 255,564,458 2,933 255,567,391 21,155,907 (1,317,490) 275,405,808 b) other (1,133,880) (1,133,880) (1,133,880) Equity instruments 39,461,611 39,461,611 33,035,561 72,497,172 Valuation reserves (*) 158,229 (2,933) 155,296 (190,252) (34,956) Treasury shares (99,143,847) (99,143,847) (1,454,281) 18,373,865 (82,224,263) Profit )loss) for the year 117,128,045 117,128,045 (21,155,907) (95,972,137) 148,509,791 148,509,791

Shareholders’ equity 518,345,623 518,345,623 (95,972,137) (1,454,281) 33,035,561 17,056,375 148,319,539 619,330,679

152 Gruppo Azimut Allocation of retained earnings Changes during the year Shareholders’ equity transactin Items Balance at Change Balance at Reserves Dividends Changes Issue of Treasury share Extraordinary Changes Other Comprehensive Shareholders’ 31/12/12 in opening 01/01/13 and other in reserves new shares purchases dividend in equity changes income for equity at balance distributions payments instruments 2013 31/12/2013 Share capital 32,324,092 32,324,092 32,324,092 Share premium reserve 173,986,915 173,986,915 173,986,915 Other reserves: a) income-related (*) 255,564,458 2,933 255,567,391 21,155,907 (1,317,490) 275,405,808 b) other (1,133,880) (1,133,880) (1,133,880) Equity instruments 39,461,611 39,461,611 33,035,561 72,497,172 Valuation reserves (*) 158,229 (2,933) 155,296 (190,252) (34,956) Treasury shares (99,143,847) (99,143,847) (1,454,281) 18,373,865 (82,224,263) Profit )loss) for the year 117,128,045 117,128,045 (21,155,907) (95,972,137) 148,509,791 148,509,791

Shareholders’ equity 518,345,623 518,345,623 (95,972,137) (1,454,281) 33,035,561 17,056,375 148,319,539 619,330,679

(*) The opening balances were restated compared to the originally published figures due to the retrospective application of the new version of IAS 19.

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

153 Cash flow statement

Metodo indiretto 2014 2013 A. Operating activities 1. Operations 136,482,211 147,390,883 profit (loss) for the year (+/-) 136,509,410 148,509,791 profits/losses on held-for-trading financial assets and financial assets/liabilities measured at fair value (-/+) profits/losses on hedging activities (-/+) net impairment losses (+/-) 2,940,751 net impairment losses on tangible and intangible assets (+/-) 447,254 384,038 net accruals to provisions for risks and charges and other expenses/income (+/-) (262,000) tax and duties still to be paid (+) (3,229,132) (1,369,199) net impairment losses on assets held for sale, net of tax (+/-) other changes (+/-) 75,928 (133,747) 2. Cash provided from or used by financial assets 11,429,899 683,240 held-for-trading financial assets financial assets measured at fair value available-for-sale financial assets 1,030,114 (2,303) due from banks due from financial institutions due from clients other assets 10,399,785 685,543 3. Cash provided from or used by financial liabilities (8,764,754) 161,826,930 due to banks (13,100,000) (33,100,000) due to financial institutions due to clients outstanding securities (11,805,773) 193,441,057 held-for-trading financial liabilities financial liabilities measured at fair value other liabilities 16,141,020 1,485,874 Net cash provided from or used by operating activities 139,147,356 309,901,053

154 Gruppo Azimut 2014 2013 B. Investing activities 1. Cash generated from: 327,055 disposal of equity investments 327,055 dividends disposal of held-to-maturity financial assets disposal of tangible assets disposal of intangible assets disposal of subsidiaries and business units 2. Cash used by: (95,871,011) (28,866,130) purchase of equity investments (94,819,245) (28,155,813) purchase of held-to-maturity financial assets purchase of tangible assets (179,151) (481,835) purchase of intangible assets (872,615) (228,482) purchase of subsidiaries and business units Net cash generated from or used by investment activities (95,871,011) (28,539,075) C. Financing activities issue/purchase of treasury shares 669,306 16,919,584 change in other reserves (1,360,780) (1,507,742) issue/purchase of equity instruments (794,131) 33,035,561 dividends and other distributions (116,847,560) (95,972,137) Net cash generated from (or used by) financing activities (118,333,165) (47,524,734) Net cash generated (or used) for the year (75,056,820) 233,837,244

Reconciliation 2014 2013 Opening cash and cash equivalents 394,962,041 161,124,797 Total net cash provided/used for the year (75,056,820) 233,837,244 Closing cash and cash equivalents 319,905,221 394,962,041

Reference should be made to the paragraph on the “net financial debt” of the -Ma nagement Report for a breakdown of “Cash and cash equivalents”.

On behalf of the Board of Directors Chairman and Chief Executive Officer (Pietro Giuliani)

155 156 Gruppo Azimut Azimut Holding Spa Notes to the accounts at 31 December 2014

157 158 Gruppo Azimut Notes to the accounts

Part A - Accounting policies

A.1 General information

The separate financial statements comply with the International Accounting Stan- Section 1 dards (IAS) / International Financial Reporting Standards (IFRS) endorsed by the Statement of compliance European Commission, pursuant to (EC) Regulation No. 1606/2002 issued by the with IAS/IFRS European Parliament and Council and effective at the date these separate financial statements were approved, as well as with every relevant applicable interpretation, and the provisions issued to implement Article 9 of Legislative Decree no. 38/2005.

These separate financial statements have been drawn up in accordance with the in- Section 2 structions issued by the Bank of Italy set out in the Regulation dated 22 December General reporting criteria 2014, with particular reference to the schedules and information to be provided in the notes to the financial statements, which are expressly set out in said Regulation for financial companies that are parent companies of stock brokerage companies.

These separate financial statements comprise 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 notes are composed of: Part A - Accounting policies Part B - Notes to the Balance Sheet Part C - Notes to the Income statement Part D - Other information

The following annexes are included in and represent an integral part of these notes: • list of equity investments in group companies, Annex A; • list of significant equity investments, pursuant to Article 125 of Consob (Italian -Se curities and Exchange Commission) Regulation No. 11971/99 as amended, Annex B.

These financial statements are denominated in Euro.

They have been prepared based on the going concern assumption. Financial, operating and other indicators5 have been considered which, as also shown in the 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.

5 Examples of which are shown in Audit Standard no.570 on “Going Concerns”

159 Notes to the accounts

An overall valuation of the past and current financial position of the Company, its operating guidelines, group business model and the risks to which business activity is exposed6, which reveals no abnormalities, leads us to believe that there is no doubt that the Company can continue to operate successfully for the foreseeable future.

These financial statements have been prepared clearly and give a true and fair view of the Company’s financial position, results of operations and cash flows. Transactions and other events have been recognised and presented in accordance with the principle of substance over form. As stated above, these financial statements have been prepared on a going concern and accrual basis, using the historic crite- rion, save for the measurement of certain financial assets and liabilities, measured at fair value. Assets and liabilities, costs and income have not been offset against each other, unless required or permitted by a standard or an interpretation, or by the Instructions issued by the Bank of Italy.

Accounting standards, amendments and interpretations in force from 1 January 2014 The following amendments to existing standards came into force on 1 January 2014: • IFRS 10, Consolidated financial statements, IAS 27 (2011) Separate financial statements; • IFRS 11, Joint arrangements, which replaces IAS 31 “Interests in joint ventures” and SIC 13 “Jointly controlled entities”, and IAS 28 (2011) Investments in associates and joint ventures; • IFRS 12 Disclosure of interests in other entities; • Amendments to IFRS 10, IFRS 12 and IAS 27 Investment entities; • Amendments to IAS 32 Offsetting financial assets and financial liabilities; • Amendments to IAS 39 Novation of derivatives and continuation of hedge accounting; • Amendments to IAS 36 Recoverable amount disclosures for non-financial assets. The adoption of the above amendments has had no significant impact on the Com- pany’s financial statements.

Documents endorsed by the EU and applicable as of 1 January 2015. The new standards and interpretations already issued but not yet into force or not yet endorsed by the European Union and, consequently, not applicable to the separate financial statements at 31 December 2014, are listed below.

6 As described in the Management Report.

160 Gruppo Azimut IFRS applicable to annual periods beginning on or after 1 July 2014 (IASB effective date)

The Company is still completing the analysis of the effects arising from the introduction, as of next year, of the above documents, where applicable.

EU endorsement is still pending for the standards and the amendments applicable to annual periods beginning on or after 1 January 2016 (“IASB effective date”).

On 15 January 2015, following the Executive Committee’s resolution of 22 January Section 3 2013, the Company made a capital injection of 1 million euro to increase the share Significant events after the capital of the subsidiary AZ International Holdings Sa. reporting date

On 29 January 2015, the Company completed the acquisition of 55% of Futurim- presa Sgr Spa, the asset management company of the Milan, Bergamo, Brescia and Como Chambers of commerce. The acquisition was carried out by means of a reserved capital increase of approximately 2,5 million euro.

These separate financial statements were authorised for publication by the Com- pany’s Board of Directors on 12 March 2015.

Use of estimates Section 4 These separate financial statements have been prepared using estimates and as- Other information sumptions, which have an effect on recognised income, costs, assets and liabilities and the corresponding notes. These estimates and assumptions, based on the best possible calculations by management, are revised periodically and the effects of any

161 Notes to the accounts

changes are reflected directly in the income statement. Estimates with a significant impact on these separate financial statements relate to the impairment test on intangible assets (trademark and goodwill), the recoverability of deferred tax assets and accruals to hedge contingent liabilities.

There is no other relevant information to be disclosed for reporting purposes.

A.2 Key financial statements items

This section describes the main accounting policies and valuation criteria adopted for the preparation of these separate financial statements. Said policies and criteria have been applied consistently throughout the years presented.

Available-for-sale Financial assets held by the Company are classified in this category in the context of financial assets liquidity management policies. This category also includes equity investments, which do not qualify as subsidiaries, associates or jointly-controlled entities. Upon initial recognition, Available-for-sale financial assets are recognised at their fair value, which usually corresponds to the consideration paid for their purchase, plus any transaction costs in the event that they are tangible and definable. They are subsequently recognised at their Fair value, recognising any fair value profits or losses in the specific shareholders’ equity reserve (“Valuation reserves”) until disposal or impairment. The fair value of Available-for-sale financial assets is calculated based on the quoted prices in active markets or internal valuation models as described in the section on “Fair value hierarchy”. Impairment losses are recognised in the income statement when the purchase cost, net of any repayment of principal and amortisation, exceeds the recoverable amount. The cumulative profit or loss generated previously recognised in shareholders’ equity is reversed to profit or loss upon disposal or recognition of the impairment loss. When the reasons underlying the impairment loss cease to exist, the impairment loss is reversed directly against the shareholders’ equity reserve, in the case of equity instruments, and in profit or loss, in the case of debt instruments. Available-for-sale financial assets are derecognised when the contractual rights to receive the relevant cash flows cease to exist or upon transfer of all risks and rewards incidental to ownership. Assets which do not qualify as subsidiaries, associates or jointly-controlled entities, are not listed on active markets and for which the fair value cannot be measured reliably, are measured at cost. At the end of each year, impairment tests are carried out to establish which financial assets are to be impaired. This test is performed for each individual financial instrument, considering the impairment effects in accordance with IAS 39. Financial assets are derecognised when the contractual rights to the cash flows generated by the assets expire or when the asset is sold and all the risks and rewards of

162 Gruppo Azimut ownership have been transferred. With respect to impairment testing, the Company employs a specific policy that sets limits in terms of severity and durability, both according to the type of financial instrument. Specifically, the benchmarks in terms of severity are as follows:

1. for debt instruments7: loss of 20% 2. for other financial instruments8: loss of 30%

Durability is assessed based on a timescale of 18 months for debt instruments and 24 months for other financial instruments: specifically, the fair value of each financial instrument is measured to establish if it was consistently lower than the corresponding initial cost over the last 18 or 24 months. For “other financial instruments”, in the event that the above benchmarks are reached, the impairment loss is recognised in the income statement. “Debt financial instruments” which exceeded the relative benchmarks are subject to further qualitative assessment in order to establish the durability and severity of the losses, so as to confirm or refute any impairment decision.

Receivables include the amounts due from banks, from financial institutions and all Receivables receivables involving fixed or determinable payments and which are not listed on an active market. They are initially recognised at the grant date based on the fair value of the financial instrument, equal to the amount granted, or the subscription price, including the cost/income directly referable to the individual receivable and determinable from the beginning of the operation, even when settled at a later date. Receivables are subsequently measured at their estimated realisable value, being the best estimate possible of their fair value. They are derecognised once settled.

Equity investments include the stakes held in associates and subsidiaries. Companies Equity investments are classified as associates pursuant to Article 2359 of the Italian Civil Code, i.e. companies in which the Company has at least 20% of voting rights and thus exerts significant influence, but not control, over financial and operating policies. Equity investments classified as financial fixed assets are measured at acquisition or formation cost, plus any extra costs arising from the acquisition or formation of the investment. The cost is reduced to reflect impairment losses, if any, and reversed in the following financial years if the reasons for the impairment recognised no longer apply. Impairment losses are recognised in the income statement; if the reasons for the impairment loss no longer apply following an event subsequent to the initial recogni-

7 Money market instruments, bonds, money market mutual funds and bond funds. 8 Securities, equity, balanced and flexible funds, private equity and hedge funds.

163 Notes to the accounts

tion, the original amount is reversed through income statement. Reversals of impairment losses shall never exceed the original cost at which the asset was recognised. Moreover, the cost of equity investments is increased as a result of the recognition of stock-option plans, entailing the issue/delivery of the Parent Company’s shares to the employees/financial advisors of subsidiaries. Equity investments are derecognised when the contractual rights to the cash flow generated by the assets expire or when the stake is sold and all the risks and rewards of ownership have been transferred.

Tangible assets They include furniture and fixtures, vehicles and office machines and equipment of any kind, as well as leasehold improvements, which are depreciated over the remaining duration of the lease (or the remaining useful life, whichever is shorter). They are initially recognised at cost, including the extra costs directly attributable to the acquisition and start-up of the asset. They are subsequently measured at cost, less depreciation and impairment losses. Depreciation is charged annually on a straight-line basis over the remaining useful life. Leasehold improvements are recognised under assets since the tenant essentially has control over the assets and may receive economic benefits therefrom. Therefore, they are depreciated over a period corresponding to the duration of the lease. Tangible assets are derecognised upon disposal or when the asset has been retired and future benefits are not expected from its disposal.

Intangible assets Intangible assets include goodwill, the “Azimut” trademark (under finance lease) and the application software for long-term use. Goodwill refers to that paid by Azimut Holding Spa (formerly Tumiza Spa) to purchase the group in 2002 by acquiring the entire share capital of Azimut Holding Spa, incorporated in December of the same year, and corresponding to the portion of goodwill arising from merger that, as per the appraisal prepared by the independent company PricewaterhouseCoopers Finance Srl, had not been allocated as an increase in the value of equity investments. Goodwill is not amortised systematically but is tested for impairment annually to check the adequacy of the carrying amount in accordance with that set out in IAS 36 Impairment of assets. The amount of the impairment, determined on the basis of the difference between the book value and its recoverable amount, if lower, is recognised in the income statement. Reference should be made to the specific paragraph on “Finance lease” for information on the “Azimut” trademark, acquired under finance lease via a sale and lease- back agreement. Software is recognised at cost, net of amortisation and impairment losses. Such assets are amortised based on their estimated residual useful life.

164 Gruppo Azimut Intangible assets are derecognised at the date of disposal and when no future economic benefits are expected.

The sale and leaseback agreement related to the trademark, which can be classified Finance lease as a finance lease, was recognised in accordance with the requirements set out in IAS 17 - Leases. This accounting standard stipulates: • that the leased asset must be recognised under assets and the amount payable to the lease company recognised under liabilities at the fair value of the leased asset; • that the finance lease payments must be recognised over the term of the lease, reducing the initially-recognised liability. The related interest expense is recognised in the income statement; • that leased asset amortisation rates must be recognised in line with those adopted for owned amortisable assets; • recognition of an impairment loss, if any, in application of IAS 36 Impairment of assets. In the case of the sale and leaseback agreement, if the sale price is higher than the carrying amount of the asset, the excess amount is recognised over the term of the agreement. However, in this specific case, considering the economic reasons for the transaction and the related contractual terms and conditions, which include an initial down payment, the transaction involved an advance payment equal to the sale price of the trademark, less the amount of the down payment. Consequently, the trademark is recognised under assets at the pre-disposal carrying amount and the amount payable for the advance payment, initially recognised at the amount as determined above, is gradually reduced as the lease payments are made. Since the trademark under lease has an indefinite useful life, it is not amortised but is tested for impairment annually in accordance with IAS 36 Impairment of assets. The amount of the impairment, determined on the basis of the difference between the book value and its recoverable amount, if lower, is recognised in the income statement. When the relevant conditions are met, the impairment loss on the trademark is reversed. The reversal shall never exceed the carrying amount that would have been obtained (net of amortisation and/or impairment losses) had no impairment loss been recognised in prior years.

Current taxes are calculated on the basis of an estimate of taxable income, in accor- Tax assets and liabilities dance with the tax regulations in force and by taking into account the effects generated by the Group’s Italian subsidiaries’ adoption of the tax consolidation regime. Taxes are calculated by applying the tax rates in force. Deferred tax assets and liabilities are calculated in respect of the temporary differences arising between the tax base of assets and liabilities and their book values, applying the tax rates in force in the years in which the aforementioned differences

165 Notes to the accounts

are expected to reverse. Deferred tax assets are recognised when there is reasonable certainty they will be recovered, i.e. to the extent that the Company is expected to generate sufficient taxable income in the future to be able to recover the taxes paid. Deferred tax liabilities are recognised even when there is little or remote possibility that a related tax liability will materialise in the future, in accordance with IAS 12. Deferred tax assets and liabilities for IRES purposes, as well as current and deferred taxes for IRAP purposes, are offset against each other, as assets and liabilities, in accordance with IAS 12.

Other assets This item includes assets which are not ascribable to other assets items.

Being a financial instrument composed of a debt component and an embedded -de Outstanding securities rivative (on equity instruments), the bond with warrants “Azimut 2009-2016 subordinato 4%” issued by the Company on 1 July 2009 is recognised as a financial liability and an equity instrument of the Company. Upon initial recognition, the fair value of the financial instrument, as a whole, is equal to the issue price, including directly attributable costs, while the fair value of the debt component was calculated based on the present value of the contractually agreed cash flows, using a market rate for comparable financial instruments, with similar cash flows, at the same maturities, but no embedded derivative. The fair value of the equity component - related to the warrants granted on a free basis to the subordinated bondholders at the same time as bonds were issued - was calculated as the difference between the fair value of the instrument, as a whole, and the fair value of the debt component. Consequently, the debt component was recognised under “Outstanding securities”, while the above equity component was recognised in shareholders’ equity, under “Equity instruments”. The costs borne by the Company for the bond issue are allocated proportionally to the debt component and the equity component. Subsequent to initial recognition, the debt component is recognised at amortised cost, with financial charges established using the effective interest rate. The equity component is recognised under reserves and transferred to unallocated earnings when warrants are exercised, or reach maturity without being exercised. When warrants are exercised, at the strike price set by the relevant regulation, given

166 Gruppo Azimut that the Company will issue a set number of treasury shares, the transfer of the treasury share reserve will be recognised against the collected cash corresponding to the strike price.

The “Azimut 2011-2016 Senior 2,5%” convertible bond, issued by the Company in 2011, was recognised at the fair value of the corresponding liability, which is equal to the issue price including the ancillary costs borne by the Company for the bond issue. Subsequent to initial recognition, the financial liability is measured at amortised cost using the effective interest rate method.

The “Azimut 2013-2020 convertibile 2,125%” bond, issued by the Company on 25 November 2013, is recognised as a financial liability and an equity instrument being a financial instrument composed of a debt component and an embedded derivative (on equity instruments). Upon initial recognition, the fair value of the financial instrument, as a whole, is equal to the issue price, while the fair value of the debt component was calculated based on the present value of the contractually agreed cash flows, using a market rate for comparable financial instruments, with similar cash flows, at the same maturities, but no conversion option. The market rate is increased by a premium to reflect the subordination of repayment which is not included in other comparable financial instruments. Subsequent to initial recognition, this debt component is measured at amortised cost, using the effective interest rate method. The equity component, being the difference between the fair value of the instrument, as a whole, and the fair value of the debt component, was recognised in shareholders’ equity under “Equity instruments”. The costs borne by the Company for the bond issue are allocated proportionally to the debt component and the equity component. The financial liabilities are derecognised after expiry or settlement.

This item includes liabilities that are not ascribable to other liability items. Other liabilities Short-term liabilities (due within 12 months) and trade payables are recognised at their par value. Other liabilities are derecognised once settled.

167 Notes to the accounts

• estimating the future wage/salary and inflationary trends, in the case that the projected unit credit method is applied; • taking into account any advances requested by employees, any portions which may be assigned to private pension funds, as well as the 11% substitute tax on the TFR revaluation; • assessing the payable already accrued by the Company (TFR), including any future annual provisions (and legally-required revaluations), to estimate the amount to be paid upon termination of employment, for whatever reason (resignation, retirement, death, disability); • discounting the previously estimated amount payable by the Company, and bringing it into line with the level of seniority at the measurement date, when the projected unit credit method has been applied. The calculation is performed ad personam as outlined in IAS 19, and requires that specific technical, demographic and financial factors be adopted, as set out in “Sec- tion 10 – Staff severance pay (TFR)” of these notes. Following the introduction of the new version of IAS 19 last year, actuarial gains and losses are recognised, net of the tax effects, against shareholders’ equity (“Valuation reserves”).

Costs and income They are recognised on an accrual basis and in accordance with the matching principle. Dividends are recognised in the income statement on the date the shareholders’ right to receive payment is established. Financial income and charges are recognised on an accrual basis, based on accrued interest and applying the effective interest rate method.

Treasury shares Treasury shares are recognised at purchase cost under a specific shareholders’ equity item with a negative sign and are therefore not subject to valuation. In the event that the shares are subsequently sold, the difference between the book value and the selling price is taken to shareholders’ equity. In the case of cancellation, the item under shareholders’ equity is reduced accordingly, upon acquisition.

168 Gruppo Azimut relevant equity rights are suspended. Furthermore, these instruments entitle their holders to receive a part of the Company’s profit as per the By-laws subject to, inter alia, the Shareholders’ approval of dividend distribution.

In accordance with the provisions of IFRS 7 and IFRS 13, the Company classifies Fair value hierarchy fair value measurement of financial assets and financial 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 asset or liability held/issued; these analyses and measurement criteria are applied consistently over time. With respect to financial instruments held and financial liabilities issued, according to the Company, the bonds issued are classified as Level 2, while the equity securities classified as “available-for-sale financial assets” and measured at cost are classified as Level 3. With respect to the financial instruments held as part of liquidity management policies, in the case of open-ended investment funds, fair value is designated as Level 1 if represented by the Net Asset Value (NAV) provided by the fund manager at the measurement date. Conversely, with respect to listed funds and Exchange Trade Funds (ETF), Level 1 fair value is equal to the closing price of the relevant stock market.

A.3 Disclosure about transfers between portfolios

A.3.1 Transfers between portfolios The Company did not transfer any financial assets between portfolios during the year.

169 Notes to the accounts

A.4. Fair value disclosure

A.4.5 Fair value hierarchy A.4.5.1 Assets and liabilities measured at fair value on a recurring basis: breakdown by fair value levels

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 218,271,525 218,271,525 4. Hedging derivatives Total 218,271,525 218,271,525 1. Held-for-trading financial liabilities 2. Financial liabilities measured at fair value 3. Hedging derivatives Total

A.4.5.2 Annual change in financial assets measured at Level 3 fair value on a recurring basis

Financial assets Held for Measured Available Hedging trading at fair value for sale assets 1. Opening balance 2,530,114 2. Increases 2.1. Purchases 2.2. Profits allocated to: 2.2.1 Profit or loss of which: gains 2.2.2 Shareholders’ equity 2.3. Transfers from other levels 2.4. Other increases 3. Decreases 2,530,114 3.1. Sales 3.2. Redemptions 3.3. Losses charged to: 3.3.1 Profit or loss 1,500,000 of which: losses 3.3.2 Shareholders’ equity 3.4. Transfers from other levels 3.5. Other decreases 1,030,114 4. Closing balance

170 Gruppo Azimut Parte B - Notes to the balance sheet Assets

Cash and cash equivalents amount to 11,255 euro (3,722 euro at 31 December 2013) Section 1 and refer to cash on hand in euro and foreign currency. Cash and cash equivalents Item 10

This item amounts to 218,271,525 euro, up by 146,811,237 euro on 71,460,288 euro Section 4 at 31 December 2013. Available-for-sale financial assets 4.1 Breakdown of item 40 “Available-for-sale financial assets” Item 40

Total 31/12/2014 Total 31/12/2013 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 1. Debt securities structured securities other debt securities 2. Equity securities 2,530,114 3. UCI units 218,271,525 68,930,174 4. Loans Total 218,271,525 68,930,174 2,530,114

“UCI units” Level 1 refers to the units in investment funds managed by the Azimut Group as part of the Company’s liquidity management policies.

171 Notes to the accounts

4.2 Available-for-sale financial assets: breakdown by debtor/issuer Items/Value Total Total 31/12/2014 31/12/2013 1. Debt securities a) Governments and central banks b) Other public bodies c) Banks d) Financial institutions e) Other issuers 2. Equity securities 2,530,114 a) Banks 2,530,114 b) Financial institutions c) Other issuers 3. UCI units 218,271,525 68,930,174 4. Loans a) Banks b) Financial institutions c) Clients Total 218,271,525 71,460,288

As regards the nature and form of risks arising from the above financial assets, reference should be made to section 1 - Part D “Other information - Information on risk management and hedging policies”.

172 Gruppo Azimut 4.3 Available-for-sale financial assets: “annual change”

Change/type Debt Equity UCI units Loans Total securities securities A. Opening balance 2,530,114 68,930,174 71,460,288 B. Increases 457,123,595 457,123,595 B1. Purchases 454,453,699 454,453,699 B2. Increases in fair value 2,669,896 2,669,896 B3. Write-ups taken to profit or loss taken to shareholders’ equity B4. Transfers from other portfolios B5. Other changes C. Decreases 2,530,114 307,782,244 310,312,358 C1. Sales 1,030,114 307,642,525 308,672,639 C2. Redemptions C3. Decreases in fair value C4. Write-downs 1,500,000 139,719 1,639,719 C5. Transfers to other portfolios C6. Other changes D. Closing balance 218,271,525 218,271,525

173 Notes to the accounts

Section 6 6.1 Due from banks Receivables This item amounts to 101,264,583 euro, down by 224,763,562 euro on 325,740,117 Item 60 euro at 31 December 2013. The breakdown is as follows:

Breakdown Total 31/12/14 Total 31/12/13 Book Fair Value Book Fair Value value value L1 L2 L3 L1 L2 L3 1. Loans 1.1 Deposits and current accounts 101,264,583 101,264,583 325,740,117 325,740,117 1.2 Receivables for services 1.3 Repurchase agreements of which for government securities of which for other debt securities of which for other equity securities 1.4 Other loans 2. Debt securities 2.1 Structured securities 2.2 Other debt securities Total 101,264,583 101,264,583 325,740,117 325,740,117

“Deposits and current accounts” are composed of cash deposited in current accounts with interest in line with that applied to term deposits.

174 Gruppo Azimut 6.2 Due from financial institutions This item amounts to 357,857 euro, up by 69,829 euro on 288,028 euro at 31 De- cember 2013. The breakdown is as follows:

Breakdown Total 31/12/2014 Total 31/12/2013 Book Fair Value Book Fair Value value value L1 L2 L3 L1 L2 L3 1. Loans 1.1 Deposits and current accounts 357,857 357,857 288,028 288,028 1.2 Receivables for services - sale of products 1.3 Repurchase agreements of which for government securities of which for other debt securities of which for other equity securities 1.4 Other loans 2. Debt securities 2.1 Structured securities 2.2 Other debt securities Total 357,857 357,857 288,028 288,028

This item refers exclusively to the liquidity held in the securities and cash deposit with Azimut Consulenza Sim Spa, equal to 328,156 euro (at 31 December 2013: 259,370 euro), and with Azimut Capital Management Sgr Spa, equal to 29,701 euro (at 31 December 2013: 28,658 euro).

175 Notes to the accounts

Section 9 Dividends and similar income amount to 419,526,433, up by 93,378,494 euro on the Equity investments previous year (at 31 December 2013: 326,147,939 euro). Item 90 9.1 Equity investments: information The details of the Company’s equity investments are provided in annex A of these notes, and refer to the financial statements of the wholly -owned subsidiaries at 31 December 2014. In accordance with IAS 36 governing impairment tests, the book value of the company’s equity investments was tested for impairment in order to identify any impairment indicators, if any. Reference should be made to section 11.1, paragraph “Impairment test” for information on the methodology applied.

9.2 Annual change in equity investments Group equity Non-group Total investments equity investments A. Opening balance 325,022,126 1,125,813 326,147,939 B. Increases 94,504,307 3,624,723 98,129,030 B.1 Purchases 10,284,000 10,284,000 B.2 Write-ups B.3 Revaluations B.4 Other changes 84,220,307 3,624,723 87,845,030 C. Decreases 4,750,536 4,750,536 C.1 Sales C.2 Write-downs C.3 Other changes 4,750,536 4,750,536 D. Closing balance 419,526,433 419,526,433

“Increases” is comprised of: • purchases relating to: • 51% of Augustum Opus Sim Spa (10,000,000 euro); • 14.2% of Apogeo Consulting Sim Spa (284,000 euro) implementing the agreements reached by the parties as described earlier; following the acquisition, the company wholly owns Apogeo Consulting Sim Spa, subsequently merged into Azimut Con- sulenza Sim with tax and accounting effect from 1 January 2014 and statutory effect from 31 December 2014; • other changes refer to • capital injections for the future share capital increase of AZ International Holdings Sa, based in Luxembourg, worth 18,250,000 euro, AZ Life Ltd, based in Ireland, worth 5,000,000 euro and Azimut Global Counseling Srl, worth 400,000 euro, made during the year in accordance with the Executive Committee’s resolutions; • capital injection of 55,120,408 euro to cover the losses of Azimut Capital Manage- ment Sgr Spa made on 12 December 2014;

176 Gruppo Azimut • set up and subsequent capital injections for future share capital increases (5,449,899 euro) in favour of Azimut Enterprises Holding Srl.

10.1 Breakdown of item 100 “Tangible assets” - business purposes: breakdown of assets Section 10 at cost” Tangible assets This item amounts to 651,536 euro, down by 40,487 euro on last year’s result Item 100 (692,023 euro at 31 December 2013). The breakdown is as follows:

Total Total 31/12/2014 31/12/2013 Assets/Value 1. Company-owned 651,536 692,023 a) land b) buildings c) furniture & fixtures 50,085 64,380 d) capital goods e) other 601,451 627,643 2. Under finance lease a) land b) buildings c) furniture & fixtures d) capital goods e) other Total 651,536 692,023

“Other” includes electronic office equipment (personal computers, printers and monitors) and the telephone system.

177 Notes to the accounts

10.2 Tangible assets - business purposes: annual change Land Buildings Furniture Capital Other Total & fixtures goods A. Opening balance 64,380 627,643 692,023 A.1 Total net impairment losses A.2 Opening net balances B. Increases 2,172 176,979 179,151 B.1 Purchases 2,172 176,979 179,151 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 Other changes C. Decreases 16,467 203,171 219,638 C.1 Sales C.2 Depreciation 16,467 203,171 219,638 C.3 Impairment write-downs 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 50,085 601,451 651,536 D.1 Total net impairment losses D.2 Net closing balance 50,085 601,451 651,536 E. Measurement at cost 50,085 601,451 651,536

178 Gruppo Azimut Depreciation is calculated based on the following rates, reduced by 50% for the first year:

Company % rate Electronic office equipment 20% Furniture & fixtures 12% Telephone system 25% Other assets 25%

Intangible assets amount to 186,023,052 euro, up by euro 644,999 on the euro Section 11 185,378,053 at 31 December 2013. It is broken down as follows: Intangible assets Item 110 11.1 Breakdown of item 110 “Intangible assets: Total 31/12/2014 Total 31/12/2013 Assets Assets Assets Assets at cost at fair value at cost at fair value 1. Goodwill 149,829,431 149,829,431 2. Other intangible assets 36,193,621 35,548,622 2.1 generated internally 2.2 other 36,193,621 35,548,622 Total 186,023,052 185,378,053

“Goodwill”, of an original amount of 176,269,919 euro, refers to the portion of goodwill arising from merger that was not allocated as an increase in equity investments. It pertains to the goodwill paid by Azimut Holding Spa (formerly Tumiza Spa) to purchase the group in 2002 by acquiring the entire share capital of Azimut Holding Spa, merged in December of the same year. “Other intangible assets – other” refers to software purchase costs (855,397 euro) and the “Azimut” trademark acquired via the sale and leaseback agreement with Banca Italease Spa which, as described in Part A “Accounting policies” of these notes, is recognised at its original value along with a financial liability to the lessor. The details of the foregoing transaction are described in item 10 “Payables” under liabilities. Azimut Holding Spa has exclusive rights to the use of the trademark and holds a purchase option to buy back the asset at the end of the lease term (2 November 2015) for a repurchase price of 100 thousand euro (plus VAT).

Impairment test With respect to “goodwill” and “trademarks” (when recognised as an intangible asset with an indefinite useful life), the IFRS, specifically IAS 36 – “Impairment of assets”, stipulate that the company must perform annual impairment tests to check the ade-

179 Notes to the accounts

quacy of the amounts recognised. The aim of the impairment test is to identify any impairment loss: should the test identify the non-recoverability of accounting balances, the company shall recognise an impairment loss on the asset. For the purposes of impairment testing at group-level, two cash generating units (CGUs) have been identified that basically reflect the Azimut Group’s business and to which the above intangible assets (goodwill and trademarks) have been allocated.

The first CGU, to which the Parent Company’s goodwill and trademarks were allocated, reflects the activity carried out by the companies directly controlled by Azimut Holding Spa, each specialising in the distribution, promotion and management of financial and insurance products (basically unit-linked products) and operating 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 operating results are revised periodically by management for the purpose of decisions regarding allocation of resources and measurement of results and company performance. The second CGU refers to the activity carried out by the foreign companies belonging to the Luxembourg company AZ International Holdings Sa, wholly owned by Azimut Holding Spa, aimed at identifying, acquiring and managing new foreign partnerships. The impairment test of the Azimut CGU, to which goodwill and the trademark were allocated, had a positive outcome, as described below. For the purposes of the impairment test, management calculated the value in use of the Azimut CGU using the Discounted Cash Flow method and comparing value in use with the book value of the CGU, inclusive of the above intangible assets (trademark and goodwill). Value in use calculated using the Discounted Cash Flow method is as follows:

• Calculation of unlevered cash flows: for the purposes of this calculation, the expected cash flow was approximated to the net profit for the year. Profits for the first five years were based on the “2015 - 2019 Business Plan. The underlying assumptions are as follows: • average inflows of 2.5€ /bln per year; • weighted average performance of 2.5%; • increase in overheads in line with forecast growth of personnel and structure; • increase in costs and revenue after 2019 unchanged at 2%.

180 Gruppo Azimut • Azimut’s financial structure.

Cost of capital calculation: WACC 31-Dec-14 Risk-free rate 2.87% Market risk premium 5.30% Beta Unlevered 1.017 Risk premium 5.42% Cost of equity (Ke) 8.26% D/(D+E) 0% E/(D+E) 100% WACC 8.26%

Based on the above, management calculated Azimut CGU’s value in use at 4,450 million euro. This amount is considerably greater than the CGU book value of 550 million, as no impairment losses were recognised. Furthermore, the CGU’s value in use was subjected to a sensitivity analysis, which considered WACC changes and the long-term growth rate (g-rate).

The table below shows the results of the sensitivity analysis which did not identify any impairment loss.

181 Notes to the accounts

Decrease in cash flows 0% -5% -10% -15% -20% -25% 3,900 3,739 3,579 3,419 3,259 3,098

11.2 Intangible assets: annual change Total A. Opening balance 185,374,053 B. Increases 876,615 B.1 Purchases 876,615 B.2 Write-ups B.3 Increases in fair value taken to: shareholders’ equity income statement B.4 Other changes C. Decreases 227,616 C.1 Sales C.2 Amortisation 227,616 C.3 Impairment write-downs charged to: shareholders’ equity income statement C.4 Decreases in fair value charged to: shareholders’ equity income statement C.5 Other changes D. Closing balance 186,023,052

The above purchases refer exclusively to software packages, which are amortised using the following rates:

% rate Software packages 33%

Section 12 Tax assets Tax assets and tax liabilities Item 120 This item amounts to 24,937,192 euro, down by 9,559,743 euro on last year’s result Item 70 (34,496,935 euro at 31 December 2013).

182 Gruppo Azimut 12.1 Breakdown of item 120 “Tax assets: current and deferred” 31/12/2014 31/12/2013 Current 8,946,640 17,021,614 Deferred 15,990,552 17,475,321 of which pursuant to Italian Law 214/2011 840,278 Total 24,937,192 34,496,935

“Current tax assets” include tax on bank interest income amounting to 757,031 euro, net tax credits arising from tax consolidation amounting to 387,373 euro and receivables related to the conversion of tax losses on the trademark and goodwill as per Italian Law 214/2011 of 6,814,700 euro. “Deferred tax assets” mainly include: • 8,757,418 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; • 5,465,032 euro of deferred taxes related to tax losses; • 1,693,463 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; • to a lesser extent, the temporary differences resulting from the different timing criteria of IRES tax deductibility for some cost items compared to that recognised in the income statement.

Tax liabilities

This item amounts to 48,476,037 euro, up by 3,821,242 euro on 45,799,405 euro at 31 December 2013.

12.2 Breakdown of item 70 “Tax liabilities: current and deferred” Breakdown 31/12/2014 31/12/2013 Current 1,144,610 Deferred 48,476,037 44,654,795 Total 48,476,037 45,799,405

“Deferred tax liabilities” mainly include deferred tax liabilities relating to the difference between the carrying amount and tax value of the trademark amounting to 11,686,351 euro and the deferred tax liabilities recognised on the temporary difference between the carrying amount and tax value of goodwill of 35,910,693 euro. These tax liabilities, recognised in accordance with IAS 12, are not reasonably ex-

183 Notes to the accounts

pected to become actual costs given that the aforementioned timing differences will only be reduced following a negative impairment test result that leads to a write- down of goodwill and the trademark and in the case of disposal.

12.3 Changes in deferred tax assets (contra entry in income statement) Total Total 31/12/2014 31/12/2013 1. Opening balance 17,312,077 20,401,890 2. Increases 5,473,282 4,805,326 2.1 Deferred tax assets recognised in the year: 5,473,282 4,805,326 a) from previous years b) due to changes in accounting policies b) write-ups d) other 5,473,282 4,805,326 2.2 New taxes or increased tax rates 2.3 Other increases 3. Decreases 6,833,013 7,895,139 3.1 Deferred tax assets eliminated during the year 2,055,472 1,080,439 a) reversals 1,147,972 1,080,439 b) write-off of irrecoverable tax 907,500 c) due to changes in accounting policies d) other 3.2 Decreases in tax rates 3.3 Other decreases 6,814,700 a) conversion into tax credits pursuant to Italian Law 214/2011 6,814,700 b) other 4,777,541 4. Closing balance 15,952,346 17,312,077

184 Gruppo Azimut 12.3.1 Change in deferred tax assets under Law 214/2011 (contra entry in income statement) Total Total 31/12/2014 31/12/2013 1. Opening balance 840,278 6,786,914 2. Increases 840,278 3. Decreases 840,278 6,786,914 3.1 Reversals 840,278 3.2 Conversion into tax credits a) arising out of loss for the year b) arising out of tax losses 6,786,914 3.3 Other decreases 4. Closing balance 840,278

12.4 Changes in deferred tax liabilities (contra entry in income statement) Total Total 31/12/2014 31/12/2013 1. Opening balance 44,530,710 41,443,689 2. Increases 3,087,021 3,087,021 2.1 Deferred tax liabilities recognised in the year: 3,087,021 3,087,021 a) from previous years b) due to changes in accounting policies c) other 3,087,021 3,087,021 2.2 New taxes or increased tax rates 2.3 Other increases 3. Decreases 3.1 Deferred tax liabilities eliminated during the year a) reversals b) due to changes in accounting policies c) other 3.2 Decreases in tax rates 3.3 Other decreases 4. Closing balance 47,617,731 44,530,710

185 Notes to the accounts

12.5 Changes in deferred tax assets (contra entry in shareholders’ equity) Total Total 31/12/2014 31/12/2013 1. Opening balance 163,244 3,850 2. Increases 34,737 159,394 2.1 Deferred tax assets recognised in the year: a) from previous years b) due to changes in accounting policies d) other 34,737 159,394 2.2 New taxes or increased tax rates 2.3 Other increases 3. Decreases 159,775 3.1 Deferred tax assets eliminated during the year a) reversals 159,775 b) write-off of irrecoverable tax c) due to changes in accounting policies d) other 3.2 Decreases in tax rates 3.3 Other decreases 4. Closing balance 38,206 163,244

186 Gruppo Azimut 12.6 Changes in deferred tax liabilities (contra entry in shareholders’ equity) Total Total 31/12/2014 31/12/2013 1. Opening balance 124,085 36,855 2. Increases 734,221 87,230 2.1 Deferred tax liabilities recognised in the year: 734,221 87,230 a) from previous years b) due to changes in accounting policies d) other 734,221 87,230 2.2 New taxes or increased tax rates 2.3 Other increases 3. Decreases 3.1 Deferred tax liabilities eliminated during the year a) from previous years b) due to changes in accounting policies d) other 3.2 Decreases in tax rates 3.3 Other decreases 4. Closing balance 858,306 124,085

This item amounts to 22,335,277 euro, up by 5,551,113 euro on 16,874,164 euro at Section 14 31 December 2013. Other assets Item 140 14.1 Breakdown of item 140 “Other assets” Breakdown 31/12/2014 31/12/2013 Due from Inland Revenue 4,473,961 4,173,041 Other receivables 17,773,910 12,550,536 Prepayments 87,406 60,587 Total 22,335,277 16,784,164

“Due from Inland Revenue” refers exclusively to VAT credits. “Other receivables” includes: • 1,000,000 euro due from the subsidiaries Azimut Capital Management Sgr Spa and 1,000,000 euro from Azimut Consulenza Sim Spa in the form of royalties on the Azimut trademark due for the year 2014; • 15,712,931 due from the subsidiary Azimut Capital Management Sgr Spa for IRES tax arising from the taxable income for the tax year 2014 transferred to the Parent Company in accordance with the Tax Consolidation Regime, net of payables for the transfer of withholding taxes, again under the tax Consolidation Regime.

187 Notes to the accounts

Liabilities

Payables Section 1 1.1 Payables This item amounts to 40,272,500 euro, down by 13,141,919 euro on the 53,414,419 Item 10 euro at 31 December 2013. It is broken down as follows:

Items Total 31/12/2014 Total 31/12/2013 Due to Due to Due to Due to Due to Due to banks financial clients banks financial clients institutions institutions 1. Loans 1.1 Repurchase agreements of which for government securities of which for other debt securities of which for other equity securities 1.2 Loans 40,272,500 53,414,419 2. Other payables Total 40,272,500 53,414,419 Fair value L1 Fair value L2 Fair value L3 40,272,500 53,414,419 Total fair value 40,272,500 53,414,419

At 31 December 2014, “Loans” included: a) a financial debt, amounting to 100,000 euro, arising from the sale and lease-back agreement signed by Banca Italease Spa and Azimut Holding Spa on 31 October 2006 for the disposal of the Azimut trademark for 55,000,000 euro plus VAT and subsequent lease-back. The amount refers to the repurchase price of the trademark. b) a loan of 40,000,000 thousand euro granted by Banco Popolare on 22 April 2008 for an initial amount of 200 million euro, 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, condition precedent or subsequent. This item also includes accrued interest at 31 December 2014 on this loan, amounting to 172,500 euro, paid on the pre-established date (1 January 2015).

188 Gruppo Azimut 2.1 Breakdown of item 20 – “Outstanding securities” Section 2 Outstanding securities Item 20

Liabilities Total 31/12/2014 Total 31/12/2013 Book Fair value Book Fair value value value L 1 L 2 L 3 L 1 L 2 L 3 1. Securities bonds 216,680,093 233,290,557 228,368,019 232,231,507 structured other 216,680,093 233,290,557 228,368,019 232,231,507 other securities structured other Total 216,680,093 - 233,290,557 - 228,368,019 - 232,231,507 -

“Outstanding securities” are broken down as follows: 1. “Azimut 2011-2016 Senior 2,5%” bond, amounting to 835,172 euro originally composed of 884 bonds worth 1,000 euro each with a duration of 5 years and yield in line with the annual fixed nominal rate of 2.5% before tax. The amount refers to total bonds sold and includes the charges incurred by the Company for the issue, in addition to interest expense accrued at 31 June 2014 which were paid on the pre- established date (1 February 2015); 2. the bond “Azimut 2013-2020 Convertibile 2.125%” amounting to 215,844,921 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 Company for the issue, in addition to interest expense accrued at 31 December 2014 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 Spa 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 policies, the total debt component of this financial instrument is 214,312,482 thousand euro calculated on 25 November 2013 (issue date), whereas the equity component, amounts to 35,687,518 thousand euro.

2.2 Subordinated securities This category includes the bond loan described in point 2 of this item.

189 Notes to the accounts

Section 7 “Tax liabilities” are described in detail in section 12 of these notes to which reference Tax liabilities should be made. Item 70

Section 9 This item amounts to 29,663,583 euro, up by 16,564,122 euro on 13,099,461 euro Other liabilities at 31 December 2013. Item 90 9.1 Breakdown of item 90 “Other liabilities” 31/12/2014 31/12/2013 Due to suppliers 2,171,196 1,921,560 Due to company bodies 186,887 164,356 Due to Inland Revenue 328,762 360,127 Due to social security bodies 193,873 172,617 Deferred employee remuneration 870,918 742,535 Other payables 25,911,947 9,738,266 Total 29,663,583 13,099,461

“Other payables” mainly include payables due to Azimut Consulenza Sim Spa (25,841,316 euro) related to the withholding tax for 2014 and the negative taxable income transferred in accordance with the Tax Consolidation Regime.

Section 10 This item amounts to 749,573 euro, up by 195,287 euro on 554,286 euro at 31 De- Staff severance pay (TFR) cember 2013. Item 10 10.1 “Staff severance pay (TFR): “annual change” Total Total 31/12/2014 31/12/2013 A. Opening balance 554,286 482,928 B. Increases 214,627 106,868 B1. Provisions for the year 89,387 87,798 B2. Other increases 125,240 19,070 C. Decreases 19,340 35,511 C1. Payments made 3,285 C2. Other decreases 19,340 32,226 D. Closing balance 749,573 554,286

The 125,240 euro increase is mainly due to the actuarial losses of the year with a specific direct contra entry in shareholders’ equity reserves, net of the related tax effect and the substitute tax.

190 Gruppo Azimut 10.2 “Other information” As set out in the section on “Accounting policies”, staff severance pay was calculated in accordance with IAS 19, based on specific following technical, demographic and financial assumptions:

Demographic assumptions

Financial assumptions

This item amounts to 30,000 euro, down by 470,000 euro on last year’s result Section 11 (500,000 euro at 31 December 2013). Provisions for risks and charges Item 110

191 Notes to the accounts

11.2 “Provisions for risks and charges”:annual change 31/12/2014 Opening balance 500,000 Increases during the year 30,000 Decreases during the year 500,000 Closing balance 30,000

The decrease is due to the release of provisions for legal fees.

Section 12 The breakdown of shareholders’ equity is as follows: Shareholders’ Equity Items 120, 130, 140, 150, 12.1 Breakdown of item 120 “Share capital” 160 and 170 Types of shares Total 1. Share capital 32,324,092 1.1 Ordinary shares 32,324,092 1.2 Other shares

At 31 December 2014, the fully paid up and subscribed share capital was composed of 143,254,497 ordinary shares, with a total value of 32,324,092 euro.

12.2 Breakdown of item 130 “Treasury Shares” Types of shares Total 1. Treasury shares 81,554,957 1.1 Ordinary shares 81,554,957 1.2 Other shares

During the year, treasury share transactions led to a total decrease in the portfolio of 218,212 shares. At 31 December 2014, Azimut Holding Spa held 10,498,633 treasury shares at an average carrying amount of 7.322 euro per share.

12.3 Breakdown of item 140 “Equity instruments” This item amounts to 71,703,041 euro and, as described in Part A - Section A.2 of these notes, can be analysed as follows: • the equity component of the subordinated bond, recognised upon issue at the fair value of the relevant warrants (3,461,611 euro), net of the warrants exercised in 2014 (for additional information on the transaction reference should be made to the section “Treasury shares” in the Management Report); • 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 36,000,000 euro (equal to their fair value calculated by an independent

192 Gruppo Azimut leading company); • the equity component of the convertible bond, recognised on 25 November 2013 upon issue of the convertible bond at 34,949,500 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 the Company for the bond issue are allocated proportionally to the debt component and the equity component.

12.4 Breakdown of item 150 “Share premium reserve” “Share premium reserve” amounted to 173,986,915 euro at 31 December 2014.

12.5 Other information Breakdown of item 160 “Reserves” Legal reserve Other reserves Total A. Opening balance 6,464,818 267,807,110 274,271,928 B. Increases 32,456,362 32,456,362 B.1 Profit appropriations 31,662,231 31,662,231 B.2 Other changes 794,131 794,131 C. Decreases 4,419,230 4,419,230 C.1 Allocations loss account reserve dividends transfers to share capital C.2 Other changes 4,419,230 4,419,230 D. Closing balance 6,464,818 295,844,242 302,309,060

“Other reserves “ - “increases – profit appropriations” includes the undistributed portion of the profit for 2013.

The following gives a breakdown of shareholders’ equity, showing the origin and level of availability and distributability of the items, in accordance with Article 2427 paragraph 7 bis of the Italian Civil Code.

193 Notes to the accounts

Breakdown of shareholders’ equity (Art. 2427 no. 7-bis) Type/Description Summary of uses over past three years Total Possible Available Loss account Other use (*) amount reserve Share capital 32,324,092 Share capital reserve Treasury share reserve -81,554,957 Shares or quotas of parent company Share premium reserve 173,986,915 A,B,C 173,986,915 Other reserves -1,133,880 Equity instruments 71,703,041 Income-related reserve: Legal reserve 6,464,818 B 0 Unallocated earnings 296,978,122 A,B,C 296,978,122 Total 470,965,037 Undistributable portion 82,688,837 Residual distributable portion 388,276,200

(*) A: for capital increase B: for loss account reserve C: for dividends

Breakdown of item 170 “Valuation reserves”

Available- Tangible Intangible Cash flow Special Other Total for-sale assets assets hedge evaluationr financial laws assets A. Opening balance - 94,092 59,136 - 34,956 B. Increases 3,249,896 34,737 3,284,633 B.1 Increases in fair value 2,669,896 2,669,896 B.2 Other changes 580,000 34,737 614,737 C. Decreases 893,997 126,317 1,020,314 C.1 Decreases in fair value C.2 Other changes 893,997 126,317 1,020,314 D. Closing balance 2,261,807 - 32,444 2,229,363

194 Gruppo Azimut Parte C - Notes to the income statement

The item is a profit of 3,940,103 euro (2013: a loss of 446,966 euro) and mainly Section 3 relates to the net profits arising from the disinvestment of the Funds held by the Gains (losses) on disposal Company as part of liquidity management policies, and the losses arising from the or repurchase Item 30 total early settlement of the subordinated bond (751,645 euro).

3.1 Breakdown of item 30 “Gains (losses) on disposal and repurchase”

Items/Income items Total 31/12/2014 Total 31/12/2013 Profit Loss Net loss Profit Loss Net loss 1. Financial assets 1.1 Available-for-sale financial assets 5,629,109 - 937,361 4,691,748 289 - 63,439 - 63,150 1.2 Held-to-maturity financial assets 1.3 Other financial assets Total (1) 5,629,109 - 937,361 4,691,748 289 - 63,439 - 63,150 2. Financial liabilities 2.1 Payables 2.2 Outstanding securities 15 - 751,660 - 751,645 238 - 384,054 - 383,816 Total (2) 15 - 751,660 - 751,645 238 - 384,054 - 383,816 Total (1+2) 5,629,124 - 1,689,021 3,940,103 527 - 447,493 - 446,966

Fees and commissions amount to 2,000,000 euro (unchanged from last year) and Section 5 include royalties on the “Azimut” trademark for the year, charged to the subsidiaries Fees and commissions Azimut Consulenza Sim Spa and Azimut Capital Management Sgr Spa. Item 50

195 Notes to the accounts

5.1 Breakdown of item 50 “Fee and commission income” Breakdown Total Total 31/12/2014 31/12/2013 1. Trading on own account 2. Execution of orders on behalf of clients 3. Sales and distribution securities third party services: portfolio management collective portfolio management insurance products other 4. Portfolio management own account on behalf of third parties 5. Order receipt and transmission 6. Investment advisory 7. Financial structure advisory 8. Management of multilateral trading facilities 9. Custody and management 10. Currency trading 11. Other services 2,000,000 2,000,000 Total 2,000,000 2,000,000

Section 6 Interest income Interest Items 70 and 80 Interest income amounts to 3,619,136 euro, down by 740,567 euro on the previous year (2013: 4,359,703 euro), and mainly includes pre-tax interest income on current accounts.

196 Gruppo Azimut 6.1 Breakdown of item 70 “Interest income and similar income” Items/Technical forms Debt Repurchase Other Total Total securities agreements 31/12/2014 31/12/2013 1. Financial assets held for trading 2. Financial assets at fair value 3. Financial assets available for sale 4. Financial assets held to maturity 5. Receivables 5.1 Due from banks 3,619,136 3,619,136 4,359,567 5.2 Due from financial institutions 5.3 Due from clients 6. Other assets 136 7. Hedging derivatives Total 3,619,136 3,619,136 4,359,703

Interest expense

This item amounts to 12,008,287 euro, up by 9,199,105 euro on the previous year (2013: 2,989,182 euro) due to the subordinated convertible bond “Azimut 2013 – 2020 convertibile 2,125%”.

6.2 Breakdown of item 80 “Interest expenses and similar expenses”

Items/Technical forms Repurchase Other loans Securities Other Total Total agreements 31/12/2014 31/12/2013 1. Due to banks 516,811 494 517,305 975,152 2. Due to financial institutions 3. Due to clients 4. Outstanding securities 11,490,982 11,490,982 2,014,031 5. Held-for-trading financial liabilities 6. Financial liabilities measured at fair value 7. Other liabilities 8. Hedging derivatives Total 516,811 11,490,982 494 12,008,287 2,989,183

“Due to banks - other loans” includes interest on loans with Banco Popolare.

197 Notes to the accounts

Section 7 Dividends and similar income amount to 155,755,351, down by 4,773,786 euro on Dividends and similar the previous year (at 31 December 2013: 160,529,137 euro). income Item 90 7.1 Breakdown of item 90 “Dividends and similar income”

Items/Income Total 31/12/2014 Total 31/12/2013 Dividends Income from Dividends Income from UCI units UCI units 1. Financial assets held for trading 2. Available-for-sale financial assets 1,044 14,956 3. Financial assets measured at fair value 4. Equity investments 155,754,306 160,514,181 Total 155,755,350 160,529,137

“Equity investments” is as follows:

Company 2014 2013 Azimut Consulenza Sim Spa 29,043,000 35,280,000 Azimut Capital Management Sgr Spa 10,608,000 11,577,000 AZ Fund Management Sa 91,103,306 75,862,181 AZ Capital Management Ltd 150,000 400,000 AZ Life Ltd 0 7,995,000 AZ Investimenti Sim Spa 24,850,000 29,400,000 Total 155,754,306 160,514,181

An interim dividend on the 2014 profit to the amount of 75,300,000 euro was received from AZ Fund Management Sa in December 2014.

198 Gruppo Azimut This item amounts to 14,109,803, up by 1,165,574 euro on the previous year (2013: Section 9 12,944,229 euro). Administrative costs Item 110 9.1 Breakdown of item 110.a. “Personnel costs” Items/Sectors Total Total 31/12/2014 31/12/2013 1. Employees 4,577,285 4,149,344 a) wages and salaries 3,296,270 2,961,370 b) social security 981,973 884,141 c) staff severance pay (TFR) d) pension contributions e) TFR provisions 202,173 180,499 f) accrual to the pension provision and similar obligations: defined contribution defined benefit g) private pension plans: defined contribution defined benefit h) other expenses 96,869 123,333 2. Other personnel 266,212 281,743 3. Directors and Statutory Auditors 1,621,578 1,623,081 4. Early retirement costs 5. Cost recoveries for employees seconded to other companies 6. Reimbursed costs for employees seconded to the company Total 6,465,075 6,054,168

9.2 Average number of employees by category Position 31/12/2014 31/12/2013 Managers 11 9 Middle managers 11 10 Office staff 2 3 Total 24 22

199 Notes to the accounts

9.3 Breakdown of item 110.b. “Other administrative costs” 2014 2013 Professional services rendered 1,453,007 1,422,552 Insurance premiums 86,422 22,457 Indirect taxes 9,426 17,844 Advertising, promotion and marketing expenses 1,642,289 1,931,628 Outsourcing and EDP services 1,311,203 678,657 Expenses for acquisition of non-professional goods and services 3,142,381 2,816,923 Total 7,644,728 6,890,061

Expenses for non-professional goods and services mainly include rental fees of 97,447 euro, maintenance and assistance fees of 97,554 euro, car hire costs of 115,225 euro, telephone and utility bills totalling 363,326 euro, the consideration paid to the Ita- lian Stock Exchange of 122,786, expenses for security administration and custody amounting to 134,804 euro.

10.1 Breakdown of “Net impairment and write-ups of tangible assets” Section 10 Net impairment and write- ups of tangible assets Item 120 Items/impairment and write-ups Depreciation Impairment Write-ups Net result (a) write-downs (c) (a+b-c) (b) 1. Company-owned business purposes 219,638 219,638 investment purposes 2. Under finance lease business purposes investment purposes Total 219,638 - - 219,638

200 Gruppo Azimut 11.1 Breakdown of item 130 “Net impairment and write-ups of intangible assets” Section 11 Net impairment and write- ups of intangible assets Item 130

Items/Impairment Amortisation Impairment Write-ups Net result write-downs and write-ups (a) write-downs (c) (a+b-c) (b) 1. Goodwill 2. Other intangible assets 2.1 Company-owned generated internally other 227,616 227,616 2.2 Under finance lease Total 227,616 - - 227,616

This item amounts to 1,138,852 euro (2013: 1,291,965 euro) and mainly includes Section 14 recovered amounts for coordination activities by the parent company and other Other operating income amounts recovered from the subsidiaries. and costs Item 160

17.1 Breakdown of item 190 “Income tax on profit from continuing operations” Section 17 2014 2013 Income tax on profit from continuing operations 1. Current taxes 1,030,725 3,209,158 Item190 2. Changes in current taxes of previous years 3. Decrease in current taxes for the year 3.-bis Decrease in current taxes for the year due to tax credits pursuant to Italian Law 214/2011 4. Change in deferred tax assets -3,417,809 -3,689,937 5. Change in deferred tax liabilities 3,087,021 3,087,021 Taxes for the year 699,937 2,606,242

Income tax for the year mainly refers to IRAP of the year, calculated in accordance with ruling legislation and income from tax consolidation amounting to the taxes receivable and due on taxable income transferred to the parent company by the Italian subsidiaries that have adopted the tax consolidation regime pursuant to Article 117 of Italian Presidential Decree 917/86.

201 Notes to the accounts

“Change in deferred tax assets” includes the release of deferred tax assets on the amount of the lease instalment deductible during the year, 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 temporary differences between the carrying amount and the tax value of goodwill.

17.2 Reconciliation of theoretical tax burden and effective tax burden Reconciliation of theoretical tax burden and effective IRES-IRAP tax burden 31/12/2014 Taxable income Tax % rate Pre-tax profit 137,209,347 Theoretical tax burden 37,732,570 27.50 Effect of increases 4,374,096 1,202,876 28.38 Effect of decreases: 161,456,286 (44,400,479) of which: Dividends 147,967,583 (40,691,085) (1.28) Goodwill amortisation 9,334,808 (2,567,072) (3.15) Trademark amortisation 3,055,556 (840,278) (3.76) Other 1,098,339 (302,043) (3.98) Change in deferred tax assets (6,825,557) 1,877,028 (2.61) Change in deferred tax liabilities 9,334,808 2,567,072 (0.74) Other increases (2,038,890) (2.23) IRES tax for the year (3,059,821) (2.23) IRES effective tax rate (2.23) IRAP taxable income 55,109,782 3,069,615 5.57 Change in deferred tax assets 3,055,556 170,194 Change in deferred tax liabilities 9,334,808 519,949 IRAP tax for the year 3,759,758 5.57 Total income tax for the year 699,937

202 Gruppo Azimut Part D - Other information

L. Commitments Section 1 Specific references L.2 Other commitments to business activities At 31 December 2014, the company had commitments to Banca Popolare di Vicen- za and Banca Popolare di Lodi (Banco Popolare Group), for a total amount of 3.3 million euro relating to sureties issued in favour of the subsidiary Azimut Consulenza Sim Spa. No collateral was issued at 31 December 2014. As regards the business activities of AZ Life Ltd, for as long as there is no change in the shareholder structure, Azimut Holding Spa has made a commitment to the IFSRA (Irish Financial Services Regulatory Authority) to provide the insurance company with the necessary capital in the event that it is unable to meet an adequate solvency margin, in accordance with the relevant regulations.

2.1 Market risks Section 2 Information on risk 2.1.1 Interest rate risk management and hedging policies Qualitative information The interest rate risk refers to the loan granted 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 31 December 2014, only Line B remains for a residual amount of 40 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, no specific interest rate risks exist as the company’s bonds bear fixed -in terest rates. The “Senior” bond issued in 2011 provides for a fixed rate of 2.5% and the subordinated convertible bond 2013-2020 provides for a fixed rate of 2.125%.

203 Notes to the accounts

Quantitative information

1. Distribution by remaining life (repricing date) of financial assets and liabilities

Items/ On Up to From From From From Over Unspecified Remaining demand 3 months over 3 over over over 10 years duration life to up to 6 months 1 years 5 years 6 months to up to to up to to up to 1 year 5 years 10 years 1. Assets 1.1 Debt securities 1.2 Other assets 2. Liabilities 2.1 Payables 40,172,500 100,000 2.2 Debt securities 835,171 215,844,922 2.3 Other liabilities 3. Derivatives 3.1 Long positions 3.2 Short positions

2.1.2 Price risk Qualitative information The financial risks associated with use of liquidity are therefore limited in light of investment policies which focus mainly on bonds, characterised by low volatility of mark to market and low exposure to liquidity, currency and credit risks. 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 com- pletely 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 year, as well as in the first few months of 2015. Specifically, the assessment is performed by periodically checking that the management of the Eskatos – AZ Multistrategy ILS Fund (a 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 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 post evaluations of the risk profiles of the various managed portfolios and providing the Investment Department with an ex ante mar-

204 Gruppo Azimut ket 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.

Quantitative information At 31 December 2014, Azimut Holding Spa held only mutual funds managed by Azimut Group companies in its proprietary portfolio.

Trading portfolio Other Equity securities/UCI Book value Book value Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 1. Equity securities 2. UCI 2.1 Italian harmonised open-ended non-harmonised open-ended closed-ended speculative 2.2 other UE countries harmonised 203,202,475 non-harmonised open-ended non-harmonised closed-ended 2.3 non-EU countries open-ended 10,569,050 closed-ended Total 213,771,525

205 Notes to the accounts

2.1.3 Currency risk No currency risks exist as all the Company’s assets and liabilities are in Euro.

2.3 Credit risk As for credit risk, there are no specific problems given the nature of the company’s activity.

206 Gruppo Azimut Quantitative information

Items/time brackets On demand From From From From From From From From Over Unspecified over 1 over 7 over 15 over 1 over 3 over 6 over 1 over 3 5 years duration day up to days up to days up to to up to to up to months years to years to 7 days 15 days a month 3 months 6 months to up to up to 3 up to 5 1 year years years Assets on a cash basis A.1 Debt securities A.2 Other debt securities A.3 Loans A.4 Other assets 123,957,717 Liabilities on a cash basis B.1 Payables to: Banks 40,172,500 100,000 Financial institutions Clients B.2 Debt securities 835,171 215,844,922 B.3 Other liabilities 29,663,583 Unrecognised transactions C.1 Financial derivatives with capital exchange Long positions Short positions C.2 Financial derivatives without capital exchange Positive differentials Negative differentials C.3 Loans to be received Long positions Short positions

3.1 Company shareholders’ equity Section 3 Information on shareholders’ 3.1.1 Qualitative information equity For information on the individual shareholders’ equity items, please refer to Part B of these notes.

207 Notes to the accounts

Quantitative information

3.1.2.1 Company shareholders’ equity: breakdown Items/Value Total Total 31/12/2014 31/12/2013 1. Share capital 32,324,092 32,324,092 2. Share premium reserve 173,986,915 173,986,915 3. Reserves 302,309,060 274,271,928 income-related a) legal 6,464,818 6,464,818 b) statutory c) treasury shares d) other 296,978,122 268,940,990 other - 1,133,880 - 1,133,880 4. (Treasury shares) - 81,554,957 - 82,224,263 5. Valuation reserves 2,229,363 - 34,956 Available-for-sale financial assets 2,261,807 - 94,092 Tangible assets Intangible assets Foreign investment hedge Cash flow hedge Foreign exchange differences Non-current assets held for sale and discontinued operations Special revaluation laws Actuarial gains/losses on defined benefit plans - 32,444 59,136 Share of valuation reserves for equity accounted investees 6. Equity instruments 71,703,041 72,497,172 7. Profit (loss) for the year 136,509,410 148,509,791 Total 637,506,924 619,330,679

208 Gruppo Azimut 3.1.2.2 Valuation reserves of available for sale assets: breakdown Assets/Value Total 31/12/2014 Total 31/12/2013 Positive reserve Negative reserve Positive reserve Negative reserve 1. Debt securities 2. Equity securities 3. UCI units 2,261,807 - 327,133 - 421,225 4. Loans Total 2,261,807 - 327,133 - 421,225

3.1.2.3 Valuation reserves of Available-for-sale financial assets: annual change Debt securities Equity securities UCI units Loans 1. Opening balance - 94,092 2. Increases 3,249,896 2.1 Increases in fair value 2,669,896 2.2 Transfer through income statement of negative reserves: following impairment following disposal 580,000 2.3 Other changes 3. Decreases 893,997 3.1 Decreases in fair value - 3.2 Impairment write-downs 3.3 Transfer through income statement of positive reserves following disposal - 3.4 Other changes 893,997 4. Closing balance 2,261,807

209 Notes to the accounts

Section 4 Statement of comprehensive income Items Pre-tax profit Income tax Net profit 10. Profit (loss) for the year 137,209,347 (699,937) 136,509,410 Other comprehensive items not transferred through profit or loss (126,317) 34,737 (91,580) 20. Tangible assets 30. Intangible assets 40. Defined benefit plans (126,317) 34,737 (91,580) 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 3,249,826 (893,927) 2,355,899 70. Foreign investment hedge: a) changes in fair value b) transfer through profit or loss c) other changes 80. Foreign exchange 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 book value 2,669,896 (734,221) 1,935,675 b) transfer through profit or loss impairment write-downs profits/losses on disposal 580,000 (159,776) 420,224 c) other changes 110. Non-current assets held for sale: a) changes in fair value b) transfer through profit or loss c) other changes 120. Share of valuation reserves of investments measured at equity: a) changes in fair value b) transfer through profit or loss impairment write-downs profits/losses on disposal c) other changes 130. Total other comprehensive income 3,123,509 (859,190) 2,264,319 140. Comprehensive income (Items 10+130) 140,332,856 (1,559,127) 138,773,729

210 Gruppo Azimut 5.1 Information on key management fees Section 5 At 31 December 2014, directors’ fees amounted to 1,410,042 euro and the fees for Related party transactions the Board of Statutory Auditors members stood at 208,000 euro. The Board of Directors is composed of 9 members. The Board of Auditors has three standing members.

5.2 Loans and guarantees issued to Directors and Statutory Auditors No loans or guarantees were issued to Directors and Statutory Auditors.

5.3 Related party disclosures Related party transactions refer exclusively to commercial transactions carried out by Azimut Holding Spa with its subsidiaries in 2014. These transactions are part of the Group’s ordinary operations and are conducted on an arm’s length basis. The most important commercial transactions are described below: • for use of the trademark, the subsidiaries Azimut Capital Management Sgr Spa and Azimut Consulenza Sim Spa pay Azimut Holding Spa annual royalties totalling 2,000,000 euro, established by contract; • Azimut Holding Spa, as the parent company, Azimut Capital Management Spa and Azimut Consulenza Sim Spa, as subsidiaries, have adopted the tax consolidation regime. • a contractually established annual fee (totalling 1,000,000 euro) is payable for the coordination activities carried out by the Parent Company on behalf of the subsidiaries Azimut Capital Management Sgr Spa and Azimut Consulenza Sim Spa; Furthermore, as mentioned earlier, Azimut Holding Spa has issued guarantees to the subsidiary Azimut Consulenza Sim Spa. With respect to profit-participating financial instruments, in accordance with Sha- reholders’ resolutions, 12 key directors subscribed 238,447 instruments (paying the corresponding amount), including the Chairman and Chief Executive Officer Pietro Giuliani (95,650), the Co-CEO Marco Malcontenti (33,000), the General Manager Paola Antonella Mungo (33,000), the directors Stefano Gelatti Mach de Palmstein (20,000), Andrea Aliberti (15,000), Paolo Martini (15,000), Aldo Mondonico (4,940) and Monica Nani (5,357). As per the Shareholders’ agreement related to Azimut Holding Spa, 695 related parties subscribed a total of 1,191,714 profit-participating instruments. Following the call option exercised by Azimut Holding Spa in May 2014, at the reporting date, the company held 69,839 profit-participating financial instruments. At 31 December 2014, Azimut Holding Spa had no loan relationships with subsidiaries and associates.

The impact that the transactions or positions with related parties have on the company’s financial position and results of operations is summarised below:

211 Notes to the accounts

Total Related parties Absolute value % Assets Receivables: 101,622,440 356,985 0.35 Receivables for cash held in deposit accounts 356,985 0.35 Other assets: 16,366,935 17,764,349 108.54 Receivables for tax consolidation 15,712,931 96.00 Invoices issued for administrative cost recoveries 51,418 0.31 Invoices to be issued for Royalties 2,000,000 12.22 Liabilities Other liabilities: 23,695,241 26,028,203 109.85 IRES payables 25,837,235 109.04 Invoices to be received 4,082 0.02 Due to Statutory Auditors 186,887 0.79 Income statement Administrative costs 14,109,803 1,618,042 11.47 Statutory Auditors’ fees 208,000 1.47 Directors’ fees 1,410,042 9.99 Commission income (royalties) 2,000,000 2,000,000 100.00 Other operating income and costs 1,138,852 1,051,000 92.29 Guarantees and commitments 3,254,926 3,254,926 100.00

These items are described in detail in the corresponding sections of Parts B and C of these notes.

6.2 Dividends paid Section 6 Other information The ordinary dividend for 2014 amounted to 0.10 euro per share, with an extraordinary dividend of 0.60 euro.

6.3 Significant non-recurring events and transactions The significant non-recurring events that took place in 2014 are as follows: • repurchase of 284,000 shares of Apogeo Consulting S.p.A. by its financial advisors, against a total consideration of 6 million euro; • subscription of a call option on 64,804 profit-participating financial instruments, which resulted in an increase in the shareholders’ equity item “Other reserves” for 1,555 thousand euro; • acquisition of 51% of Augustum Opus Sim S.p.A. against a total consideration of 10 million euro; • repayment of the instalment (Line B) of the loan granted by Banco Popolare, con-

212 Gruppo Azimut tractually due on 30 June 2014, for a total amount of 10,000,000 thousand euro; • total early repayment, at 20% of the par value of the subordinated bond (“Azimut 2009-2016 subordinato 4%”), which led to a reduction in the liability item “Outstan- ding securities” of 17,691,400 thousand euro; • capital contribution of 18,250,000 euro for share capital increase of AZ Internatio- nal Holdings SA; • set up and subsequent capital injections for future share capital increases (1,110,000 euro) in favour of Azimut Enterprises Holding S.r.l; • capital contribution of 5,000,000 euro for share capital increase of AZ International Holdings SA; • Injection to cover the loss incurred by the subsidiary Azimut Capital Management Sgr S.p.A. (55,120,408 euro). There were no atypical and/or unusual transactions.

6.5 Auditing and non-auditing service fees Pursuant to article 149 duodecies of Consob regulation no. 11971/99 and subsequent amendments and supplements, the details of fees (net of VAT and expenses) due to the audit company and companies within its network for auditing and non- auditing services during 2014 are as follows:

Service Service provider Fees (Euro) Audit PricewaterhouseCoopers Spa 35,000 Tax services for compliance stamp on CNM PricewaterhouseCoopers Spa 1,500 Financial & tax due diligence PricewaterhouseCoopers Advisory Spa 52,400 Total 88,900

On behalf of the Board of Directors Chairman and CEO (Pietro Giuliani)

213 214 Gruppo Azimut Attachments

215 Annex A

9.1 Informazioni sui rapporti partecipativi

Book value Stake Voting rights Registered Total assets Total income Shareholders’ Profit/(loss) Listed 31/12/2014 office equity for the most recent year Wholly-owned subsidiaries

1. Azimut Consulenza Sim Spa 182,485,088 100% 100% Milan 267,973,244 99,012,135 113,458,089 50,016,945 NO Unsecured placement and order receipt

2. AZ Fund Management Sa 3,239,925 51% 51% Luxembourg 97,005,172 410,789,462 3,789,169 178,772,044 NO Mutual funds

3. AZ Life Ltd 10,012,150 100% 100% Ireland 4,070,115,092 31,970,906 34,231,419 13,455,167 NO Life insurance

4. Azimut Capital Management Sgr Spa 127,632,387 51% 51% Milan 64,497,862 107,710,828 64,995,805 (34,172,594) NO Mutual and speculative funds management

5. AZ Capital Management Ltd 125,000 100% 100% Ireland 211,453 51,929 189,483 (36,296) NO Hedge fund management

6. AZ International Holdings Sa 79,671,984 100% 100% Luxembourg 79,429,070 2,589,702 79,669,869 341,166 NO Equity investment management

7. Azimut Global Counseling Srl 910,000 100% 100% Milan 418,530 - 753,004 (463,448) NO Advisory services

8. Azimut Enterprises Holding S.r.l. 5,449,899 100% 100% Milan 5,446,929 - 5,447,677 (1,061) NO Equity investment management

9. Augustum Opus Sim S.p.A 10,000,000 51% 51% Milan 10,963,685 6,552,759 1,658,063 1,956,388 NO Unsecured placement and order receipt

Note: The difference between the book value and the value under the equity method for the subsidiaries Azimut Consu- lenza Sim Spa, Azimut Capital Mngt Sgr S.p.A. and AZ Fund Management SA, refers to the revaluation performed after reallocation of goodwill arising from merger generated in 2002.

216 Gruppo Azimut Book value Stake Voting rights Registered Total assets Total income Shareholders’ Profit/(loss) Listed 31/12/2014 office equity for the most recent year Wholly-owned subsidiaries