MONCLER ANNUAL REPORT AT 31 DECEMBER 2020SEPARATE FINANCIAL STATEMENTS 149148

1.

GENERAL INFORMATION

With reference to the statement of financial position, a basis of presentation has been chosen which makes a distinction between current and non-current assets and liabilities, in ac- cordance with the provisions of paragraph 60 and thereafter of IAS 1. The statement of cash flows is prepared under the indirect method.

1.2.3. BASIS FOR MEASUREMENT

The financial statements have been prepared on the historical cost basis except for the measurement of certain financial in- struments (i.e. derivative measured at fair value in accordance with IFRS 9) and on a going concern basis. The financial statements are presented in thousand euros, which is the functional currency of the markets where the Company mainly operates. The explanatory notes have been prepared in thousands of Euros unless stated otherwise.

1.2.4. DIRECTORS ASSESSMENT ON THE ASSUMPTION OF BUSINESS CONTINUITY

Based on the results of the current year and forecasts for fu- ture years, the management believes that there are no fac- tors rendering business continuity uncertain. In particular, the Group s financial strength and its cash and cash equiva- lents at the end of the year guarantee a high level of financial independence to support Moncler s operational needs and development programmes. For 2021, business operations are fully guaranteed, both in terms of product offerings across the various markets and distribution channels and in the ability to manage and organise business activities.

1.2.5. USE OF ESTIMATES AND VALUATIONS

The preparation of the financial statements and the related explanatory notes in conformity with IFRS requires that man- agement makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the reporting date. The ac- tual results could differ from those estimates.

The estimates and underlying assumptions are reviewed periodically and any variation is reflected in the income state- ment in the period in which the estimate is revised if the revi- sion affects only that period or even in subsequent periods if the revision affects both current and future periods.

In the event that management s estimate and judgment have a significant impact on the amounts recognised in the financial statements or in case that there is a risk of future adjustments on the amounts recognised for assets and liabil- ities in the period immediately after the reporting date, the following notes will include the relevant information. The estimates pertain mainly to the following captions of the Consolidated Financial Statements: impairment of non-current assets with indefinite use-

ful lives and investments; provision for losses and contingent liabilities. Incentive systems and variable remuneration.

RECOVERABLE AMOUNT OF NON-CURRENT ASSETS

WITH INDEFINITE USEFUL LIVES AND INVESTMENTS

(«IMPAIRMENT»)

Management periodically reviews non-current assets, assets held for sale and investments in subsidiaries for impairment if events or changes in circumstances indicate that the car- rying amount may not be recoverable. When a review for im- pairment is conducted, the recoverable amount is estimated based on the present value of future cash flows expected to derive from the asset or from the sale of the asset itself, at a suitable discount rate.

When the recoverable amount of a non-current asset is less than its carrying amount, an impairment loss is recog- nised immediately in the income statement and the carrying amount is reduced to its recoverable amount determined based on value-in-use calculation or its sale s value in an arm s length transaction, with reference to the most recent Group business plan.

PROVISION FOR LOSSES AND CONTINGENT LIABILITIES

The Group could be subject to legal and tax litigations aris- ing in the countries where it operates. Litigation is inevita- bly subject to risk and uncertainties surrounding the events and circumstances associated with the claims and associated with local legislation and jurisdiction. In the normal course of business, management requests advice from the Group legal consultants and tax experts. The recognition of a provision is based on management s best estimate when an outflow of resources is probable to settle the obligation and the amount can be reliably estimated. In those circumstances where the outflow of resources is possible or the amount of the obliga- tion cannot be reliably measured, the contingent liabilities are disclosed in the notes to Consolidated Financial Statements.

INCENTIVE SYSTEMS AND VARIABLE REMUNERATION

For the description of the determination of the fair value of share-based incentive payments for the Moncler Group man- agement, please see paragraph 2.9.

1.1. MONCLER S.P.A.

Moncler S.p.A. (the Company or Moncler ) is a company established and domiciled in Italy, with its registered office located at Via Stendhal 47 Milan, Italy, and registration num- ber of 04642290961.

The Company is de facto indirectly controlled by Remo Ruffini through Ruffini Partecipazioni Holding S.r.l., a compa- ny incorporated under the Italian law, wholly owned by Remo Ruffini. Ruffini Partecipazioni Holding S.r.l. controls Ruffini Partecipazioni S.r.l., a company incorporated under the Italian law, which, as at 31 December 2020, holds 22.5% of the share capital of Moncler S.p.A.

It is the Parent Company for the Moncler Group (herein- after referred to as the «Group») comprising Industries S.p.A., the Italian subsidiary, and 35 other subsidiaries.

The Company s principal activities are the study, design, production and distribution of clothing for men, women and children and related accessories under the Moncler brand name.

The Moncler Group companies run their businesses in accordance with the guidelines and the strategies set up by Moncler s Board of Directors.

The Company also prepares the Consolidated Financial Statements and the Management Report in a single document as permitted by. 40/2 bis, letter. B Legislative Decree 127/91.

1.2. BASIS FOR THE PREPARATION OF THE SEPARATE FINANCIAL STATEMENTS

1.2.1. RELEVANT ACCOUNTING PRINCIPLES

The 2020 separate financial statements ( financial state- ments ) have been prepared in accordance with International Financial Reporting Standards («IFRS») issued by the Inter- national Accounting Standards Board («IASB») and endorsed by the European Union. IFRS also includes all International Accounting Standards («IAS») and interpretations of the In- ternational Financial Reporting Interpretations Committee («IFRIC»), previously known as the Standing Interpretations Committee («SIC»).

The financial statements include the statement of finan- cial position, the income statement, the statement of com- prehensive income, the statement of changes in equity, the statement of cash flows and the explanatory notes to the fi- nancial statements.

1.2.2. PRESENTATION OF THE FINANCIAL STATEMENTS

The Company presents its income statement by destination, the method that is considered most representative for the business at hand. This method is in fact consistent with the internal reporting and management of the business.