The caption taxes payable includes mainly value added tax (VAT) and payroll tax withholding.

5.12 TAX ASSETS AND LIABILITIES Tax assets amounted to EUR 5.0 million as at 31 December 2021 (EUR 5.1 million as at 31 December 2020).

Tax liabilities amounted to EUR 131.2 million as at 31 December 2021 (EUR 93.6 million as at 31 December 2020). They are recog- nised net of current tax assets, where the offsetting relates to the same tax jurisdiction and tax system.

5.13 NON-CURRENT PROVISIONS

Provision changes are shown in the following table:

PROVISION FOR CONTINGENCIES AND LOSSES

(Euro/000) 1 January 2021 Changes in Increase Decrease Translation Other 31 December 2021 consolidation area differences movements Other non current (12,949) 0 (340) 3,855 (149) (1,737) (11,320) contingencies Total (12,949) 0 (340) 3,855 (149) (1,737) (11,320)

PROVISION FOR CONTINGENCIES AND LOSSES

(Euro/000) 1 January 2020 Changes in Increase Decrease Translation Other 31 December 2020 consolidation area differences movements Other non current (10,703) 0 (3,819) 1,334 313 (74) (12,949) contingencies Total (10,703) 0 (3,819) 1,334 313 (74) (12,949)

The caption other non current contingencies includes costs for re- storing stores, costs associated with ongoing disputes and prod- uct warranty costs.

5.14 PENSION FUNDS AND AGENTS LEAVING INDEMNITIES

The changes in the funds are depicted in the following table:

EMPLOYEES PENSION FUNDS

(Euro/000) 1 January 2021 Changes in Increase Decrease Translation Other 31 December 2021 consolidation area differences movements Pension funds (4,628) (1,776) (998) 755 23 (149) (6,773) Agents leaving (2,558) (1,322) (1,801) 0 0 0 (5,681) indemnities Total (7,186) (3,098) (2,799) 755 23 (149) (12,454)

EMPLOYEES PENSION FUNDS

(Euro/000) 1 January 2020 Changes in Increase Decrease Translation Other 31 December 2020 consolidation area differences movements Pension funds (3,878) 0 (897) 279 42 (174) (4,628) Agents leaving (2,558) 0 0 0 0 0 (2,558) indemnities Total (6,436) 0 (897) 279 42 (174) (7,186)

The pension funds pertain mainly to the Italian entities of the Group. Following the recent welfare reform, beginning on 1 January 2007, the liability has taken the form of a defi ned contribution plan. There- fore, the amount of pension fund (TFR) accrued prior to the applica- tion of the reform and not yet paid to the employees as at the date of the Consolidated Financial Statements is considered as a defi ned benefi t plan, changes in which are shown in the following table:

EMPLOYEES PENSION FUNDS - MOVEMENTS

(Euro/000) 31 December 2021 31 December 2020 Net recognized liability - opening (3,015) (2,479) Changes in consolidation area (1,776) 0 Interest costs (19) (20) Service costs (689) (425) Payments 702 83 Actuarial Gains/(Losses) (159) (174) Net recognized liability - closing (4,956) (3,015)

The actuarial valuation of employee termination benefits (TFR) is based on the Projected Unit Credit Cost method. Reported below are the main economic and demographic assumptions utilised for actuarial valuations.

Assumptions Discount rate 0.65% Inflation rate 1.75% Nominal rate of wage growth 1.15% Labour turnover rate 8.66% Probability of request of advances of TFR 2.58% Percentage required in case of advance 74.43% Life Table - Male M2019 - M2017 (*) Life Table - Female F2019 - F2017 (*)

(*) Table ISTAT - resident population

The following table shows the effect of variations, within reason- able limits, in key actuarial assumptions on defined benefit plan obligations at year end.

SENSITIVITY ANALYSIS

(Euro/000) Variation Discount rate +0.5% (185) Discount rate -0.5% 199 Rate of payments Increases x (+0.5%) (22) Rate of payments Decreases x (-0.5%) 24 Rate of Price Inflation Increases (+0.5%) 158 Rate of Price Inflation Decreases (-0.5%) (149) Rate of Salary Increases (+0.5%) 32 Rate of Salary Decreases (-0.5%) (31) Increase the retirement age (+1 year) 12 Decrease the retirement age (-1 year) (16) Increase longevity (+1 year) (342) Decrease longevity (-1 year) (354)

5.15 FINANCIAL LIABILITIES

Financial liabilities are detailed in the following table:

BORROWINGS

(Euro/000) 31 December 2021 31 December 2020 Bank overdraft and short-term bank loans 130,003 15 Short-term portion of long-term bank loans 11,801 0 Short-term financial lease liabilities 125,597 102,791 Other short-term loans 21,790 47,617 Short-term borrowings 289,191 150,423 Long-term portion of long-term bank loans 9,713 0 Long-term financial lease liabilities 584,679 537,506 Other long-term borrowings 30,340 25,338 Long-term borrowings 624,732 562,844 Total 913,923 713,267

Short-term borrowings include bank overdraft and short-term bank loans, the current portion of long-term bank loans, short- term financial lease liabilities arising from the application of IFRS 16 and, under other short-term loans, mainly the current portion of financial liabilities payable to non-banking third parties.

CONSOLIDATED FINANCIAL STATEMENTS138 139CONSOLIDATED FINANCIAL STATEMENTS MONCLER GROUP

2021