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Derivative financial instruments
 6 Months Ended 12 Months Ended
Jun. 30, 2022
Dec. 31, 2021
Derivative Financial Instruments [Abstract]    
Derivative financial instruments
13. Derivative financial instruments
The Group enters into certain derivative contracts in the course of its risk management activities, primarily to hedge the interest rate risk on its bank debt and the currency risk on sales made in currencies other than the Euro. The Company only enters into these contracts for hedging purposes as the Group’s financial management policy does not permit trading in financial instruments for speculative purposes. Derivative financial instruments meeting the hedge requirements of IFRS 9
are accounted for using hedge accounting. Changes in the fair value of derivative financial instruments not qualifying for hedge accounting are recognized in profit or loss in the relevant reporting period. The interest rate and currency derivatives used by the Company are over the counter (OTC) instruments, meaning those negotiated bilaterally with market counterparties, and the determination of their current value is based on valuation techniques that use input parameters (such as interest rate curves, foreign exchange rates, etc.) observable on the market (level 2 of the fair value hierarchy defined in IFRS 13 — Fair Value Measurement).
Derivatives are measured at fair value each reporting date by taking as a reference the applicable foreign currency exchange rates or the interest rates and yield curves observable at commonly quoted intervals.
At the reporting date, the Group had outstanding hedges as detailed in the tables below:
At June 30, 2022At December 31, 2021
(€ thousands)Notional AmountPositive Fair Value Negative Fair Value Notional AmountPositive Fair Value Negative Fair Value
Foreign currency exchange risk
Forward contracts577,719 6,445 (20,834)550,734 1,786 (11,726)
Deal-Contingent Option— — — 109,244 — — 
Interest rate risk
Interest rate swaps321,826 4,690 (649)323,816 — (2,412)
Total derivatives – Hedging899,545 11,135 (21,483)983,794 1,786 (14,138)
Total derivatives instruments - Asset/(Liabilities)899,545 11,135 (21,483)983,794 1,786 (14,138)
 Derivative financial instruments
The Group enters into certain derivative contracts in the course of its risk management activities, primarily to hedge the interest rate risk on its bank debt and the currency risk on sales made in currencies other than the Euro. The Company only enters into these contracts for hedging purposes as the Group’s financial management policy does not permit trading in financial instruments for speculative purposes. Derivative financial instruments meeting the hedge requirements of IFRS 9 are accounted for using hedge accounting. Changes in the fair value of derivative financial instruments not qualifying for hedge accounting are recognized in profit or loss in the relevant reporting period. The interest rate and currency derivatives used by the Company are over the counter (OTC) instruments, meaning those negotiated bilaterally with market counterparties, and the determination of their current value is based on valuation techniques that use input parameters (such as interest rate curves, foreign exchange rates, etc.) observable on the market (level 2 of the fair value hierarchy defined in IFRS 13).
Derivatives are measured at fair value each reporting date by taking as a reference the applicable foreign currency exchange rates or the interest rates and yield curves observable at commonly quoted intervals.
At the reporting date, the Group had outstanding hedges as detailed in the tables below:
(Euro thousands)At December 31, 2021 At December 31, 2020
Notional
Amount		Positive
Fair
Value		Negative Fair
Value 		Notional
Amount		Positive Fair
Value		Negative Fair
Value
Foreign currency exchange risk
Forward contracts550,734 1,786 (11,726)347,679 11,848 (4,918)
Deal-Contingent Option109,244 — — — — — 
Interest rate risk
Interest rate swaps323,816 — (2,412)274,336 — (5,515)
Total derivatives – Hedging
983,794 1,786 (14,138)622,015 11,848 (10,433)
Elah Dufour Option— — — — — (2,759)
Total trading derivatives
— — — — — (2,759)
Total derivatives instruments - Asset/(Liabilities)
983,794 1,786 (14,138)622,015 11,848 (13,192)
Hedging derivatives
All contracts in place at the reporting date were entered into with major financial institutions, and no counterparties are expected to default. A liquidity analysis of the derivative contract maturities is provided in the financial risks section of these notes.
The cash flows resulting from the Group’s international activities are exposed to exchange rate volatility. In order to hedge this risk, the Group enters into forward sale and purchase agreements, so as to guarantee the value of identified cash flows in Euro (or in other currencies used locally). The projected future cash flows mainly relate to the collection of trade receivables, the settlement of trade payables and financial cash flows. The notional amount of foreign exchange forward contracts to hedge projected future cash flows are detailed as follows:
(Euro thousands)For the years ended December 31,
20212020
USD194,097 144,569 
CHF4,792 24,810 
CNY191,936 20,318 
GBP25,012 19,226 
HKD46,883 12,613 
JPY51,075 52,407 
Other36,939 73,736 
Total notional amount 550,734 347,679 
The Deal-Contingent Option refers to a deal-contingent option acquired by Zegna on November 3, 2021 in connection with the Business Combination. Under the agreement Zegna had the right, but not the obligation, to exchange $130 million for Euros at an exchange rate of $1.19 per Euro, contingent on the closing of the Business Combination. The Deal-Contingent Option was set to expire on January 14, 2022 and was entered into in order to hedge currency risk for the distribution of Euros by locking in the strike exchange rate of $1.19 per Euro. Zegna paid a premium to acquire the option because the closing occurred; however, because the Deal-Contingent Option was out of the money on the closing date of the Business Combination, the option was not exercised and expired.
The key features of the interest rate swap (IRS) agreements are summarized as follows:
(Euro thousands, except percentages)Notional amount at
December 31,		Fair value at
December 31,
ContractMaturity dateFixed
interest
rate 		2021202020212020
IRS 12/17/20210.47 %— 80,000 — (1,031)
IRS 21/27/20230.27 %20,000 20,000 (192)(366)
IRS 32/8/20230.17 %20,000 20,000 (144)(309)
IRS 44/27/20230.26 %50,000 50,000 (523)(988)
IRS 58/3/20230.28 %40,000 40,000 (483)(898)
IRS 611/17/20230.34 %60,000 60,000 (801)(1,549)
IRS 74/15/2024(0.24 %)80,000 — (109)— 
IRS 812/20/20240.01 %50,000 — 72 — 
IRS 97/29/20270.80 %1,996 2,334 (57)(108)
IRS 1012/18/20311.94 %1,820 2,002 (175)(266)
Total
323,816 274,336 (2,412)(5,515)
Elah Dufour Option
The Elah Dufour Option represented a purchase agreement of the investment held in Elah Dufour S.p.A. that was disposed of in 2021 as part of the Disposition. The option provided for a cross-linked put-call option, which allowed the Group to acquire up to 5% of the share capital of Elah Dufour from certain shareholders of Elah Dufour, and such shareholders to sell their shares up to a maximum of 5% of the share capital of Elah Dufour. On August 3, 2021 the contractual counterparties communicated to Zegna that other shareholders of Elah Dufour had elected to exercise their pre-emption right over such 5% of the share capital of Elah Dufour S.p.A. As a result, the Elah Dufour Option lapsed and the related derivative financial instrument liability of Euro 2,759 thousand was extinguished with the recognition of financial income for the same amount.