133 CONSOLIDATED FINANCIAL STATEMENTS132 CONSOLIDATED FINANCIAL STATEMENTS MONCLER GROUP 2022

financial instruments, in accordance with its established risk man- agement policies.

The Group s policy permits derivatives to be used only for managing the exposure to fluctuations in exchange rates connect- ed with future cash flows and not for speculative purposes.

During 2022, the Group put in place a policy to hedge the ex- change rates risk on transactions with reference to the major cur- rencies to which it is exposed: USD, JPY, CNY, HKD, GBP, KRW, CAD, CHF, TWD, SGD, AUD, MXN, NOK, NZD and SEK.

The instruments used for these hedges are mainly Currency Forward Contracts and Currency Option Contracts.

The Group uses derivative financial instruments as cash flow hedges for the purpose of redetermining the exchange rate at which forecasted transactions denominated in foreign currencies will be accounted for.

Counterparties to these agreements are major and diverse fi- nancial institutions.

The exposure of contingent assets and liabilities denominat- ed in currencies is detailed in the following table (the Euro amount of each currency):

DETAILS OF THE BALANCES EXPRESSED IN FOREIGN CURRENCY 31/12/2022

(Euro/000) Euro JP Yen US Dollar CN Yuan HK Dollar CH Franc GB Pound KR Won CA Dollar Other Total Cash and 429,795 89,626 63,264 103,026 11,232 14,413 18,023 84,038 22,624 46,213 882,254 cash equivalent Financial 10,777 0 0 0 574 0 0 0 0 0 11,351 assets Trade 94,246 60,210 19,710 72,701 1,468 757 8,578 28,247 4,722 5,911 296,550 receivable Other current 27,164 3,292 1,433 10,686 895 115 1,746 618 279 1,124 47,352 assets Other non-current 7,625 12,701 2,383 11,920 6,088 461 1,178 1,122 906 2,479 46,863 assets Total assets 569,607 165,829 86,790 198,333 20,257 15,746 29,525 114,025 28,531 55,727 1,284,370 Trade (339,545) (41,566) (32,272) (39,655) 2,071 (3,889) (7,369) (5,243) (1,812) (13,145) (482,425) payables Borrowings (444,813) (47,651) (176,309) (79,695) (30,181) (38,978) (25,817) (4,905) (9,818) (54,612) (912,779) Other current (76,011) (7,019) (18,585) (5,001) (636) (803) (7,387) (6,342) (584) (5,995) (128,363) payables Other non-current (112) 0 0 (3) 0 0 (2) 0 0 0 (117) payables Total (860,481) (96,236) (227,166) (124,354) (28,746) (43,670) (40,575) (16,490) (12,214) (73,752) (1,523,684) liabilities Total, net (290,874) 69,593 (140,376) 73,979 (8,489) (27,924) (11,050) 97,535 16,317 (18,025) (239,314) foreign positions

DETAILS OF THE BALANCES EXPRESSED IN FOREIGN CURRENCY 31/12/2021

(Euro/000) Euro JP Yen US Dollar CN Yuan HK Dollar CH Franc GB Pound KR Won CA Dollar Other Total Cash and 559,819 56,422 51,010 118,885 18,462 3,427 27,001 45,485 5,131 47,076 932,718 cash equivalent Financial 530 0 0 0 192 0 0 0 0 0 722 assets Trade 70,589 46,456 17,319 64,433 520 (18) 7,721 19,973 2,901 4,380 234,274 receivable Other current 14,929 1,993 707 5,429 165 39 1,570 162 445 2,319 27,758 assets Other non-current 4,928 10,485 2,166 7,488 6,513 598 701 723 931 2,549 37,082 assets Total assets 650,795 115,356 71,202 196,235 25,852 4,046 36,993 66,343 9,408 56,324 1,232,554 Trade (264,236) (23,617) (18,900) (23,938) 567 (469) (5,533) (2,070) (1,702) (9,055) (348,953) payables Borrowings (578,134) (45,096) (122,188) (32,917) (39,526) (10,079) (23,170) (3,622) (9,265) (49,926) (913,923) Other current (69,494) (8,380) (19,274) (5,948) (1,260) (1,065) (8,645) (6,076) (1,080) (4,057) (125,279) payables Other non-current (161) 0 0 0 0 0 (2) 0 0 0 (163) payables Total (912,025) (77,093) (160,362) (62,803) (40,219) (11,613) (37,350) (11,768) (12,047) (63,038) (1,388,318) liabilities Total, net (261,230) 38,263 (89,160) 133,432 (14,367) (7,567) (357) 54,575 (2,639) (6,714) (155,764) foreign positions

At the reporting date, the Group had outstanding hedges for EUR 202.5 million (EUR 108.1 million as at 31 December 2021) against receivables still to be collected and outstanding hedges for EUR 583.9 million (EUR 477.7 million as at 31 December 2021) against future revenues.

As far as the currency transactions are concerned, it should be noted that a + / -1% change in their exchange rates would have the following effects:

DETAILS OF THE TRANSACTIONS EXPRESSED IN FOREIGN CURRENCY (Euro/000) JP Yen US Dollar CN Yuan HK Dollar KR Won GB Pound Other Effect of an exchange rate increase amounting to +1% Revenue 2,919 3,671 4,117 209 2,543 760 1,663 Operating profit 1,844 2,196 2,461 26 1,577 418 572 Effect of an exchange rate decrease amounting to -1% Revenue (2,978) (3,745) (4,200) (213) (2,594) (775) (1,697) Operating profit (1,882) (2,241) (2,510) (27) (1,608) (426) (585)

With reference to the provisions of IFRS 13, it should be pointed out that the category of financial instruments measured at fair value are mainly attributable to the hedging of exchange rates risk. The valua- tion of these instruments is based on the discounting of future cash flows considering the exchange rates at the reporting date (level 2 as explained in the section related to principles).

INTEREST RATE RISK The Group s exposure to interest-rate risk is mainly related to cash and cash equivalents and it is centrally managed.

As at 31 December 2022, there was limited hedging on inter- est rates, given the limited exposure to financial institutions.

9.2 CREDIT RISK

The Group has no significant concentrations of financial assets (trade receivables and other current assets) with a high credit risk. The Group s policies related to the management of financial assets are intended to reduce the risks arising from non solvency of whole- sale customers. Sales in the retail channel are made through cash and credit cards. In addition, the amount of loans outstanding is constantly monitored, so that the Group s exposure to bad debts is not significant and the percentage of writeoffs remains low. The maximum exposure to credit risk for the Group at 31 December 2022 is represented by the carrying amount of trade receivables reported in the Consolidated Financial Statements.

As far as the credit risk arising from other financial assets oth- er than trade receivables (including cash and short-term bank de- posits) is concerned, the theoretical credit risk for the Group arises from default of the counterparty with a maximum exposure equal to the carrying amount of financial assets recorded in the Consoli- dated Financial Statements, as well as the nominal value of guaran- tees given for third parties debts or commitments indicated in note 7 of the Explanatory Notes. The Group s policies limit the amount of credit exposure in different banks.

9.3 LIQUIDITY RISK

Liquidity risk arises from the ability to obtain financial resources at a sustainable cost in order for the Group to conduct its daily busi- ness operations. The factors that influence this risk are related to the resources generated/absorbed by operating activities, by in- vesting and financing activities and by availability of funds in the fi- nancial market.

Following the dynamic nature of the business, the Group has cen- tralised its treasury functions in order to maintain the flexibility in finding financial sources and maintain the availability of credit lines. The procedures in place to mitigate the liquidity risk are as follows:

centralised treasury management and financial planning. Use of a centralised control system to manage the net financial position of the Group and its subsidiaries;