SEPARATE FINANCIAL STATEMENTS190 191SEPARATE FINANCIAL STATEMENTS MONCLER GROUP

2021

3.6 INCOME TAX

The tax impact on the income statement is detailed as follows:

(Euro/000) 2021 2020 Current income taxes (49,861) (48,470) Deferred tax income (expenses) (503) 63,420 Income taxes charged in the income statement (50,364) 14,950

Deferred taxes in 2020 included the release deriving from the rea- lignment of the Moncler trademark s tax value to the statutory val- ue. The reconciliation between the theoretical tax burden by applying the theoretical rate of the Parent Company, and the effective tax burden is shown in the following table:

RECONCILIATION THEORETIC-EFFECTIVE TAX RATE

(Euro/000) Taxable Tax Amount Tax Taxable Tax Amount Tax rate Amount 2021 2021 rate 2021 Amount 2020 2020 2020 Profit before tax 186,846 158,980 Income tax using the Company s (44,843) 24.0% (38,155) 24.0% theoretic tax rate Temporary differences (173) (0.1)% 16 (0.0)% Permanent differences 1,879 1.0% (755) 0.5% Other differences (7,227) (3.9)% 53,844 (33.9)% Income tax at effective tax rate (50,364) 27.0% 14,950 (9.4)%

The caption Other differences in 2021 includes current IRAP and the tax credit related to research and development and, in 2020, this item also included the benefit deriving from the release of de- ferred tax liabilities resulting from the realignment of the Mon- cler trademark s tax value to the statutory value, net of the relative substitute tax.

4. COMMENTS ON THE STATEMENT OF FINANCIAL POSITION

4.1 BRANDS AND OTHER INTANGIBLE ASSETS

BRANDS AND OTHER INTANGIBLE ASSETS

(Euro/000) 31 December 2021 31 December 2020 Gross Accumulated Net value Net value value amortization and impairment Brands 999,354 0 999,354 223,900 Software 641 (438) 203 7 Other intangible assets 8,788 (6,885) 1,903 1,728 Total 1,008,783 (7,323) 1,001,460 225,635

Intangible assets changes for the years 2021 and 2020 are shown in the following tables:

As at 31 December 2021

GROSS VALUE BRANDS AND OTHER INTANGIBLE ASSETS

(Euro/000) Brands Software Other intangible Total assets 1 January 2021 223,900 434 7,898 232,232 SPW Incorporation 775,454 0 0 775,454 Acquisitions 0 207 874 1,081 Disposals 0 0 0 0 Impairment 0 0 0 0 Other movements, including transfers 0 0 16 16 31 December 2021 999,354 641 8,788 1,008,783

ACCUMULATED AMORTIZATION BRANDS AND OTHER INTANGIBLE ASSETS

(Euro/000) Brands Software Other intangible Total assets 1 January 2021 0 (427) (6,170) (6,597) Depreciation 0 (11) (715) (726) Disposals 0 0 0 0 Other movements, including transfers 0 0 0 0 31 December 2021 0 (438) (6,885) (7,323)

As at 31 December 2020

GROSS VALUE BRANDS AND OTHER INTANGIBLE ASSETS

(Euro/000) Brands Software Other intangible Total assets 1 January 2020 223,900 434 7,032 231,366 Acquisitions 0 0 682 682 Disposals 0 0 0 0 Impairment 0 0 0 0 Other movements, including transfers 0 0 184 184 31 December 2020 223,900 434 7,898 232,232

ACCUMULATED AMORTIZATION BRANDS AND OTHER INTANGIBLE ASSETS

(Euro/000) Brands Software Other intangible Total assets 1 January 2020 0 (419) (5,440) (5,859) Depreciation 0 (8) (730) (738) Disposals 0 0 0 0 Other movements, including transfers 0 0 0 0 31 December 2020 0 (427) (6,170) (6,597)

The increase in the item Brands was due to the partial demerger of Sportswear Company S.p.A. in favour of the Company.

The increase in the caption other intangible assets mainly refer to the brand registration expenses.

4.2 IMPAIRMENT OF INTANGIBLE ASSETS WITH AN INDEFINITE USEFUL LIFE

The caption Brands, which has an indefinite useful life, has not been amortised, but has been tested for impairment by manage- ment.

The impairment tests on the Moncler brand and on the Stone Island brand were performed by comparing its carrying value with that derived from the discounted cash flow method applying the Royalty Relief Method, based on which the cash flows are linked to the recognition of a royalty percentage applied to revenues that the brand is able to generate.

For the 2021 valuation, the expected cash flows and reve- nues are based on the 2022-2024 Business Plan approved by the Board of Directors on 24 february 2022 and for 2025-2026 on the basis of management estimates consistent with the expected de- velopment plans.

The g" rate used was 2.5%. The discount rate was calculated using the Weighted Av-

erage Cost of Capital (WACC), by weighting the expected rate of return on invested capital, net of hedging costs from a sample of companies within the same industry. The calculation took into ac- count fluctuation in the market as compared to the previous year and the resulting impact on interest rates. The weighted average cost of capital (WACC) was calculated at 8%.

The results of the sensitivity analysis indicated that the car- rying amount of the Moncler brand is in line with the benchmark with a g rate = 0% and WACC = 87.7% and the carrying amount of the Stone Island brand with a g rate = 0% and WACC = 8.1%