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Equity-method investees | 12 Months Ended
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Dec. 31, 2021
Disclosure Of Equity Method Investees [Abstract] |
Equity-method investees | 11 Equity-method investees Changes in the carrying amount of equity-method investees for the years ended December 31, 2021 and 2020 are analysed as follows.
|  | Natuzzi Trading Shanghai |  |  | Nars Miami LLC |  |  | Natuzzi Texas LLC |  |  | Natuzzi Store (UK) ltd |  |  | Salena S.r.l. |  |  | Total |
Balance as at December 31, 2019 |  |  | 41,236 |  |  |  | 106 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 41,342 |
Share of profit for the year |  |  | 1,455 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,455 |
Share of other comprehensive income |  |  | (365 | ) |  |  | (8 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (373 | )
Dividends received |  |  | (2,335 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,335 | )
Balance as at December 31, 2020 |  |  | 39,991 |  |  |  | 98 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 40,089 |
Acquisition of non-controlling interests |  |  | — |  |  |  | — |  |  |  | 270 |  |  |  | 18 |  |  |  | — |  |  |  | 288 |
Share of profit for the year |  |  | 3,409 |  |  |  | 152 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,561 |
Share of other comprehensive income |  |  | 2,320 |  |  |  | 8 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,328 |
Dividends received |  |  | (1,490 | ) |  |  | (254 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,744 | )
Balance as at December 31, 2021 |  |  | 44,230 |  |  |  | 4 |  |  |  | 270 |  |  |  | 18 |  |  |  | — |  |  |  | 44,522 |
As at December 31, 2021 and 2020 equity-method investees include: (a) the 49% stake in the joint venture Natuzzi Trading Shanghai; (b) the 49% stake in the associate Nars Miami LLC; (c) the 51% stake in the joint venture Natuzzi Texas LLC; (d) the 30% stake in the associate Natuzzi Store (UK) ltd; (e) the 49% interest in the associate Salena S.r.l., whose carrying value was totally impaired in 2014 in consideration of some legal disputes among shareholders. All such investments are accounted for using the equity method. (i) Disclosures on Natuzzi Trading (Shanghai) Co. Ltd., joint venture On March 22, 2018, the Company signed a Joint Venture Agreement and a Share Purchase Agreement with Kuka Group (Kuka), a leading distributor of upholstered furniture in China. Such agreements, which aim to expand the Company’s retail network on the Chinese market, provide for an investment by Kuka in the Group of 65,000, of which: (a) a 35,000 capital injection into the subsidiary Natuzzi Trading (Shanghai) Co. Ltd. (Natuzzi Trading Shanghai), increasing the share capital of the latter, in exchange for a 27.46% interest; and (b) 30,000 for the purchase of an additional 23.54% interest in the subsidiary, Natuzzi Trading Shanghai, which was owned by Natuzzi. Such agreements were finally completed on July 27, 2018, after obtaining the necessary authorizations and approvals. Following such agreements, the Company and Kuka own, respectively, a 49% and a 51% interest in Natuzzi Trading Shanghai. Both the Joint Venture Agreement and the Share Purchase Agreement incorporated some conditions precedent, including: (a) the stipulation of a license contract between Natuzzi and Kuka for the use of the exclusive and permanent rights to Natuzzi trademarks, for a total consideration of 15,000; (b) the stipulation of the distribution contracts between Natuzzi and Kuka, in accordance with which Natuzzi Trading Shanghai is to exclusively distribute Natuzzi Italia and Natuzzi Editions branded products, to be purchased mainly by Natuzzi Group, through a network of directly-operated single-brand stores and franchises in China, as well as through online stores. Such contract was signed on March 22, 2018 and became effective on July 27, 2018. The following table shows the reconciliation of the carrying amount of the retained interest in Natuzzi Trading Shanghai as at December 31, 2019 with the carrying amount as at December 31, 2020 included in the consolidated statement of financial position.
Carrying amount as at December 31, 2019 |  |  |  |  |  | 41,236 |
Group’s share of profit for the year |  |  | 1,873 |  |  |  |
Elimination of amortisation of Natuzzi’s trademarks |  |  | 367 |  |  |  |
Elimination of intercompany profit on inventories |  |  | (396 | ) |  |  |
Amortisation of intangibles assets |  |  | (519 | ) |  |  |
Reversal of deferred tax liabilities |  |  | 130 |  |  |  |
Group’s share of profit for the year, net of equity method adjustments |  |  | 1,455 |  |  |  | 1,455 |
Group’s share of other comprehensive income |  |  |  |  |  | (365 | )
Dividends distribution |  |  |  |  |  | (2,335 | )
Carrying amount as at December 31, 2020 |  |  |  |  |  | 39,991 |
The following table shows the reconciliation of the carrying amount of the retained interest in Natuzzi Trading Shanghai as at December 31, 2020 with the carrying amount as at December 31, 2021 included in the consolidated statement of financial position.
Carrying amount as at December 31, 2020 |  |  |  |  |  | 39,991 |
Dividends distribution |  |  |  |  |  | (1,490 | )
Group’s share of profit for the year |  |  | 4,065 |  |  |  |
Elimination of amortisation of Natuzzi’s trademarks |  |  | 367 |  |  |  |
Elimination of intercompany profit on inventories |  |  | (634 | ) |  |  |
Amortisation of intangibles assets |  |  | (519 | ) |  |  |
Reversal of deferred tax liabilities |  |  | 130 |  |  |  |
Group’s share of profit for the year, net of equity method adjustments |  |  | 3,409 |  |  |  | 3,409 |
Group’s share of other comprehensive income |  |  |  |  |  | 2,320 |
Carrying amount as at December 31, 2021 |  |  |  |  |  | 44,230 |
Summarised financial information of the joint venture Natuzzi Trading Shanghai, based on its IFRS financial statements, and reconciliation with the carrying amount of the Group’s share in net assets and in profit or loss as reported in the consolidated financial statements are set out below. Summarised statement of financial position of Natuzzi Trading Shanghai and Group’s share in net assets as at December 31, 2021 and 2020
|  | 31/12/21 |  |  | 31/12/20 |  |
Current assets |  |  | 79,527 |  |  |  | 60,319 |  |
Non-current assets |  |  | 21,619 |  |  |  | 20,197 |  |
Current liabilities |  |  | (50,092 | ) |  |  | (38,427 | ) |
Non-current liabilities |  |  | (1,344 | ) |  |  | (2,367 | ) |
Net Assets |  |  | 49,710 |  |  |  | 39,722 |  |
Group’s share in net assets – 49% of net assets |  |  | 24,358 |  |  |  | 19,463 |  |
Intangible assets |  |  | 2,832 |  |  |  | 3,351 |  |
Goodwill |  |  | 26,140 |  |  |  | 26,140 |  |
Elimination of intercompany profit from licensing Natuzzi’s trademarks |  |  | (6,095 | ) |  |  | (6,462 | ) |
Elimination of intercompany profit on inventories |  |  | (2,298 | ) |  |  | (1,664 | ) |
Deferred tax liabilities |  |  | (707 | ) |  |  | (837 | ) |
Group’s carrying amount of interest |  |  | 44,230 |  |  |  | 39,991 |  |
As at December 31, 2021 and 2020 cash and cash equivalents, bank overdrafts and borrowings, lease liabilities current and non-current are set out below.
|  | 31/12/21 |  |  | 31/12/20 |  |
Cash and cash equivalents |  |  | 61,944 |  |  |  | 43,668 |  |
Bank overdrafts and borrowings |  |  | — |  |  |  | — |  |
Lease liabilities current |  |  | (2,616 | ) |  |  | (2,432 | ) |
Lease liabilities non-current |  |  | (1,344 | ) |  |  | (2,367 | ) |
Total, net |  |  | 57,984 |  |  |  | 38,869 |  |
Summarised statement of profit or loss of Natuzzi Trading Shanghai and Group’s share of profit for the year ended December 31, 2021, 2020 and 2019
|  | 2021 |  |  | 2020 |  |  | 2019 |
Revenue |  |  | 96,272 |  |  |  | 62,023 |  |  |  | 52,714 |
Cost of sales |  |  | (57,120 | ) |  |  | (37,414 | ) |  |  | (33,754 | )
Other income and expenses, net |  |  | (39 | ) |  |  | (413 | ) |  |  | 41 |
Selling expenses |  |  | (23,937 | ) |  |  | (17,685 | ) |  |  | (13,570 | )
Administrative expenses |  |  | (4,983 | ) |  |  | (2,185 | ) |  |  | (1,883 | )
Net finance income |  |  | 1,213 |  |  |  | 864 |  |  |  | 1,194 |
Profit before tax |  |  | 11,406 |  |  |  | 5,190 |  |  |  | 4,742 |
Income tax expense |  |  | (3,111 | ) |  |  | (1,368 | ) |  |  | (1,304 | )
Profit for the period |  |  | 8,295 |  |  |  | 3,822 |  |  |  | 3,438 |
Other comprehensive profit/(loss) |  |  | 4,734 |  |  |  | (744 | ) |  |  | 227 |
Total comprehensive profit for the period |  |  | 13,029 |  |  |  | 3,078 |  |  |  | 3,665 |
Group’s share of profit for the period – 49% |  |  | 4,065 |  |  |  | 1,873 |  |  |  | 1,684 |
Elimination of amortisation of Natuzzi’s trademarks |  |  | 367 |  |  |  | 367 |  |  |  | 368 |
Elimination of intercompany profit on inventories |  |  | (634 | ) |  |  | (396 | ) |  |  | (671 | )
Amortisation of intangible assets |  |  | (519 | ) |  |  | (519 | ) |  |  | (519 | )
Deferred tax liabilities |  |  | 130 |  |  |  | 130 |  |  |  | 130 |
Group’s share of profit/(loss), net of equity method adj. |  |  | 3,409 |  |  |  | 1,455 |  |  |  | 992 |
Group’s share of other comprehensive income/(loss) for the period |  |  | 2,320 |  |  |  | (365 | ) |  |  | 111 |
Group’s share of total comprehensive income/(loss) for the period |  |  | 5,729 |  |  |  | 1,090 |  |  |  | 1,103 |
Dividends received by the Group |  |  | 1,490 |  |  |  | 2,335 |  |  |  | — |
For the years ended December 31, 2021, 2020 and 2019, depreciation and amortisation, interest income, interest expense and income tax expense are set below.
|  | 2021 |  |  | 2020 |  |  | 2019 |
Depreciation and amortisation |  |  | 4,507 |  |  |  | 4,106 |  |  |  | 2,916 |
Interest income |  |  | 1,529 |  |  |  | 1,256 |  |  |  | 1,419 |
Interest expense |  |  | 316 |  |  |  | 392 |  |  |  | 257 |
Income tax expense |  |  | 3,111 |  |  |  | 1,368 |  |  |  | 1,304 |
(ii) Disclosures on Nars Miami LLC, associate Nars Miami LLC, an immaterial associate, is engaged in the sale of the Group’s upholstery furniture and home furnishings accessories to end customers, under a franchisee agreement. The principal place of business of such associate is in Miami, Florida (USA). (iii) Disclosures on Natuzzi Texas LLC, joint venture Natuzzi Texas LLC is an immaterial joint venture, set up in 2021, which is engaged in the sale of the Group’s Natuzzi upholstery furniture and home furnishings accessories to end consumers through directly-operated single-brand stores (Natuzzi Italia stores). The company opened its first store in February 2022. (iv) Disclosures on Natuzzi Stores (UK) Ltd, associate Natuzzi Stores (UK) Ltd is an immaterial associate, in which the Group acquired a 30% stake in early 2021. Natuzzi Stores (UK) Ltd is engaged in the sale of upholstered furniture and home furnishings accessories to end consumers through directly-operated Natuzzi Italia mono-brand stores.

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