67 bOaRD OF DIREcTORS REPORT66 MONCLER GROUP 2022bOaRD OF DIREcTORS REPORT

trolled emissions, inadequate disposal of waste and wastewater or spills of dangerous substances into the ground.

The Group is committed to preventing and mitigating any en- vironmental risks through various initiatives and projects.

In 2020 Moncler joined the Science-based Targets initiative (SbTi), setting targets for reducing greenhouse gas emissions in line with the United Nations commitment to limiting the maximum increase in global temperatures from pre-industrial levels.

The Group formulated rules, processes and control activities to prevent and manage any environmental risks from its processing and raw materials suppliers, through the adoption of the code of Ethics, the Supplier code of conduct and the Environmental Policy, updated in July 2022, containing binding rules observance of which is verified through environmental compliance audits carried out by specialised third-party entities.

The Group also manages risks arising from the temporary dis- ruption of operations arising from external events or natural events through various initiatives, including business continuity plans, as well as insurance policies covering the loss of the integrity of com- pany assets and damage arising from the disruption of business.

Please refer to the 2022 Non-Financial Statement for more information.

RISKS aSSOcIaTED WITH DEPENDENcE ON KEY PERSONNEL The Moncler Group s results also depend on the ability of its man- agement, which plays a crucial role in the Group s development and which has significant experience in the luxury goods sector. If the relationship with some of these professionals is terminated without a timely, appropriate replacement, the Group s ability to compete and its growth prospects may be affected.

The Moncler Group has an operational and management structure capable of ensuring business continuity, including through the definition of succession plans and the adoption of re- tention plans for key professionals, as well as talent management aimed at developing skills and retaining talent.

RISKS RELaTED TO THE cOUNTERFEITING OF bRaNDS aND PRODUcTS aND THE PROTEcTION OF INTELLEcTUaL PROPERTY RIGHTS The luxury goods market is characterised by the counterfeiting of brands and products.

The Moncler Group has made significant investments in the adoption of innovative technologies that enable tracking of prod- ucts throughout the value chain to prevent and mitigate the effects of counterfeiting of its brands and products and to protect its intel- lectual property rights in the territories where it operates. However, the presence on the market of significant quantities of counterfeit products could still adversely affect the brand image, with a nega- tive impact on sales and financial performance.

RISKS RELaTED TO THE EVOLUTION OF THE REGULaTORY FRaMEWORK The Moncler Group operates in a complex international context and is subject, in the various jurisdictions in which it operates, to laws and regulations that are constantly monitored, especially with re- gard to the health and safety of workers, environmental protection, rules on the manufacture and composition of products, consum- er protection, personal data protection, industrial and intellectu- al property rights protection, competition rules, tax and customs rules, and in general all the relevant regulatory provisions.

The Group operates in accordance with applicable provi- sions of law and has established processes that ensure knowledge of the specific local regulations in the contexts in which it operates and of the regulatory changes that are gradually made. However, since legislation on certain matters, for example taxation, is char- acterised by a high degree of complexity, an interpretation other than that applied by the Group may still have a significant impact on economic results. In this regard, the Moncler Group is involved in a programme to negotiate advance pricing agreements with the tax authorities of the main countries in which the Group operates, some finalised and some still in progress.

In addition, the enactment of new legislation or amendments to existing legislation that impose more stringent standards for example with regard to product compliance may entail, by way of

example, costs of adapting the production methods or characteris- tics of the products or may limit the Group s operations, with nega- tive consequences for its financial performance.

RISKS aSSOcIaTED WITH EXcHaNGE RaTE PERFORMaNcE The Moncler Group also operates on international markets in cur- rencies other than the euro, mainly the renminbi, yen, US dollar, Ko- rean yuan and pound sterling. It is therefore exposed to risk arising from the fluctuation of exchange rates, to an extent equal to the amount of transactions (mainly revenues) not covered by trans- actions of the opposite sign expressed in the same currency. The Group has a strategy in place aimed at gradually hedging the risks associated with exchange rate trends, limited to transaction risks, and has adopted a strict policy on currency risk that sets the min- imum hedging limit per currency at the beginning of each sales campaign at 75%, and the minimum hedging limit per currency at the end of the sales campaign at 90%.

However, due in part to «translation» risk deriving from the conversion into euro of the financial statements of foreign compa- nies expressed in local currency significant changes in exchange rates may entail changes (positive or negative) in the Group s re- sults and financial position.

For further information, see the specific section of the Notes to the Financial Statements 9.1.

RISKS aSSOcIaTED WITH INTEREST RaTE PERFORMaNcE The Group does not avail itself of significant lines of credit as it is fully able to finance its own operations. In addition, the Group has the option of using loans from third parties, specifically banks. It chose to use such loans, it would be subject to the risk of inter- est rate changes. In order to hedge part of the risk relating to an in- crease in rates, the Group may carry out certain hedging activities. However, any significant fluctuations in interest rates could lead to an increase in financial expenses, with negative consequences for the Group s results.

For further information, see the specific section of the Notes to Financial Statements 9.1.

cREDIT RISKS The Moncler Group operates in accordance with credit monitoring policies aimed at reducing the risks arising from the insolvency of its wholesale customers. These policies are based on preliminary analysis of the reliability of customers and on guaranteed forms of insurance cover and/or payment methods. In addition, the Group does not have significant credit concentrations.

However, the emergence of significant delinquency by certain customers could still result in losses on receivables, with negative consequences for the Group s results. The Moncler Group monitors and manages its exposure to wholesale customers with significant positions with particular care, including by applying for and obtain- ing bank guarantees and cash deposits in advance of shipments.

For further information, see the specific section of the Notes to the Financial Statements 9.2.

LIQUIDITY RISKS The Group implements financial planning activities aimed at reduc- ing liquidity risk, including in view of the seasonal nature of the busi- ness, particularly for the Moncler brand. based on evolving financial needs, where necessary, lines of credit are planned with the bank- ing system to meet these needs, according to a corresponding dis- tinction between short-term and long-term lines of credit.

In addition, to face the risk of loss of available capital, the Group follows strict rules to spread its deposits and cash and cash equivalents in a balanced manner over an adequate number of highly rated banks, while avoiding concentration and using only risk-free financial products.

For further information, see the specific section of the Notes to the Financial Statements 9.3.