Marco Bicego S.P.A. Establishment DE

Marco Bicego S.P.A. Establishment DE

Pforzheim

Befreiender Jahresabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

MARCO BICEGO S.P.A.

Trissino/Italien

Financial Statements at 31 December 2023

Balance Sheet

Assets

Income Statement

Cash Flow Statement, indirect method

Information at the foot of the cash flow statement

The company prepared the Cash Flow Statement that summarises the changes of the year in the company's assets with changes in the financial position. It shows the funds used by the company during the year.

In accordance with OIC 10, the indirect method was used, whereby cash flows are reconstructed by adjusting the operating performance of non-cash components.

It should be noted that the net working capital of MB66 as at 01/01/2023 has been reported under the heading -Paid-in capital increase-.

Notes to the financial statements, first part

Dear Shareholder,

These notes are part of the financial statements at 31 December 2023.

The financial statements that we submit for your approval, consisting of a balance sheet, an income statement, a cash flow statement and these notes, comply with the provisions of articles 2423 et sequitur of the Italian Civil Code and with Italian accounting standards as published by the Italian Accounting Standard Setter ("OIC"). Therefore, they give a true and fair view of the company's financial position, results of operations and cash flows for the year.

The balance sheet and the income statement were prepared in accordance with articles 2424 and 2425 of the Italian Civil Code, whereas the cash flow statement was drawn up pursuant to article 2425-ter.

These notes, prepared pursuant to article 2427 of the Italian Civil Code, also contain all the information necessary for the purposes of a correct interpretation of the company's financial position, results of operations and cash flows at the reporting date. These notes are consistent with the figures reported in the duly kept accounting records.

The financial statements are prepared in ordinary form accompanied by the Directors' Report required by article 2428 of the Italian Civil Code.

It should be noted that on 30/06/2023, the Merger by takeover (hereinafter also referred to as the -Merger-) of MB66 S.R.L. (the merged company, or MB66) into MARCO BICEGO SPA (the -Surviving Company-, or MARCO BICEGO SPA (surviving company, or MARCO BICEGO) became legally effective; among its various assets, the former held the -MARCO BICEGO- brand. The accounting and tax effects have been backdated to 01 January 2023.

Basis of preparation

Preparation of the financial statements

The information contained in this document is presented in the order in which the related items are reported in the balance sheet and in the income statement.

With reference that set out in the first part of these notes, it is noted that, pursuant to article 2423.3 of the Italian Civil Code, if the information specifically required by law provisions is not enough to give a true and fair view of the company's position, complementary information deemed necessary for the purpose is provided.

No exceptional circumstances occurred such as to require the use of the waivers referred to in article 2423.4 and 5, and article 2423-bis.2 of the Italian Civil Code.

The financial statements and these notes were prepared in Euro in compliance with the Italian Civil Code.

Basis of presentation

Financial statements presentation

The financial statements items were measured in compliance with the principle of prudence and materiality and on a going concern basis. Pursuant to article 2423-bis.1.1-bis of the Italian Civil Code, financial statements items were recognised and presented in accordance with the principle of substance over form. In the preparation of the financial statements, income and costs were recognised on an accruals basis regardless of the moment in which they actually occur and only profits realised at the reporting date were disclosed. Risks and losses pertaining to the year were taken into account, even if arising after the reporting date.

In compliance with the provisions of article 2423 bis of the Italian Civil Code, the financial statements were prepared by:

- measuring individual items on a prudent and going concern basis;

- recognising and presenting the items by taking into account the substance of the transaction or contract;

- including only the profits actually earned during the year;

- calculating income and costs on an accruals basis, regardless of when they were earned/incurred;

- including all risks and losses pertaining to the year, even if they become known after the reporting date;

- measuring the dissimilar elements included in the various financial statements items separately;

- keeping unchanged the measurement bases adopted compared to the previous year. Waivers are allowed in exceptional cases. The notes to the financial statements shall give reasons for any such waiver and disclose the impact on the presentation of the company's financial position and results of operations.

The balance sheet, income statement, cash flow statement and accounting information contained in these notes comply with the accounting records from which they directly derive.

Exceptional cases pursuant to article 2423.5 of the Italian Civil Code

No exceptional circumstances occurred such as to require the use of the waivers referred to in article 2423.4 and 5 of the Italian Civil Code.

Changes in accounting standards

No exceptional circumstances occurred such as to require the use of the waivers referred to in article 2423-bis.2 of the Italian Civil Code.

Comparability and adjustments

Pursuant to article 2423-ter of the Italian Civil Code, it is noted that all financial statements items were comparable with the previous year. Therefore, there was no need to adjust prior year items.

Accounting policies

The accounting policies used to measure financial statements items and in adjustments comply with the provisions of the Italian Civil Code and the guidelines set out in the OIC.Moreover, they did not change compared to the previous year. Specifically, the criteria applied in measuring financial statements items comply with the provisions of article 2426 of the Italian Civil Code as amended by the implementation of the EEC directive 2013/34/EU. The criteria applied did not result in any discontinuity with those used for preparing the previous year financial statements. In accordance with the provisions of article 2423-ter.5 of the Italian Civil Code, prior year items, whose position has been changed in the financial statements, have been adjusted accordingly in order to ensure comparability.

Pursuant to article 2427.1.1 of the Italian Civil Code, the most significant accounting policies adopted in compliance with article 2426 of the Italian Civil Code, and specifically with respect to those financial statements items for which the legislator allows different measurement and adjustment bases or for which no specific bases are provided, are shown.

Intangible fixed assets

Intangible fixed assets, if the requirements of the accounting standards are met, are recorded in the balance sheet assets at the cost of purchase and/or production, and are amortised on a straight-line basis depending on their future useful life. It should be noted, however, that the MARCO BICEGO trademark, which was recognised in the financial statements as a result of the Merger, as better described below, was revalued pursuant to Article 110 of Legislative Decree No. 104/2020.

Intangible fixed assets are shown net of accumulated amortisation and write-downs.

Intangible fixed assets were amortised on a straight line basis in each year with reference to the remaining useful life of each individual asset or expenditure.

Tangible fixed assets

Tangible fixed assets, recorded at the date on which the risks and benefits of the asset acquired were transferred, were recognised at purchase and/or production cost, increased by any additional charge incurred until the assets are ready for use and, in any case, within the limit of their recoverable amount. The production cost corresponds to all the manufacturing costs incurred until the asset is first used, both in case of directly attributable costs and in case of costs related to common works for the portion reasonably attributable to it.

The depreciation methods remained unchanged compared to those applied in the previous year.

Financial fixed assets

Equity investments

All equity investments were measured at cost, where cost means the charge borne for the purchase, regardless of the methods of payment, including any additional charges (commissions and bank charges, stamps, banking intermediation, etc.). This cost is adjusted for impairment losses in relation to the income-earning prospects of the investee.

Financial receivables

It is noted that, pursuant to article 12.2 of Legislative decree no. 139/2015, the company did not apply the amortised cost method to financial receivables recorded as financial fixed assets before 1 January 2016.

Finance leases

As envisaged by the Legislator, assets under finance lease are recognised using the equity method by recognising the lease payments as operating costs.

Inventories

Inventories were recognised at the cost of purchase and/or production and the realisable value based on market trends, whichever lower.

The purchase cost includes directly related additional charges.

The production cost includes direct and indirect costs incurred during production and required for bringing the inventories to their current location and conditions for the portion reasonably attributable to the product relating to the manufacturing period and until when the asset can be used.

Raw materials, consumables, supplies and finished goods

The comparison between the cost of purchase/production and the realisable value based on market trends was used to measure them based on the lower value.

The cost of replaceable raw materials, supplies and consumables was measured using the weighted average cost method as an alternative to the specific cost, given the technical or administrative impossibility of keeping each physical unit separate from the rest.

The value thus determined was properly compared with the realisable value according to the market trend, pursuant to article 2426.9 of the Italian Civil Code.

Current receivables

Current receivables were recognised at amortised cost pursuant to article 2426 paragraph 2 of the Civil Code, taking into account the time factor and the estimated realizable value, in accordance with Art. 2426.1.8 of the Italian Civil Code.

The adjustment to the estimated realisable value was carried out through the bad debt provision.

Receivables for which the application of the amortised cost method and/or discounting was irrelevant continued to be recognised according to the estimated realisable value in order to give a true and fair view of the company's financial position and results of operations. For example, this is the case of receivables due within one year or, with reference to the amortised cost method, if transaction costs, commissions and any other difference between the initial and the terminal value are negligible or, in case of discounting, in the event of an interest rate inferable from contractual conditions not significantly different from the market interest rate.

Current financial assets

Derivatives

Derivatives recognised as assets refer to cash flow or fair value hedging instruments of a current asset. They have been measured at fair value pursuant to article 2426, paragraph 1, no. 11 bis, and any positive or negative changes in fair value between two financial years are recognised respectively in the specific income statement items -D.18.d - Revaluations of derivative financial instruments- and -D.19.d - Write-downs of derivative financial instruments-, with the exception of changes in cash flow hedging derivatives, which are recognised under the equity item -VII - Reserve for expected cash-flow hedging transactions-. With regard to the fair value measurement method, it was determined on the basis of market value, since it was possible to identify an active market. It should be noted, however, that the company did not hold any derivative financial instruments as of 31/12/2023.

Other securities

Securities that do not constitute fixed assets are recorded at purchase or production cost, or at realisable value based on market trends, whichever is lower; this lower value may not be maintained in subsequent financial statements if the reasons for it no longer apply.

Cash and cash equivalents

Cash and cash equivalents are measured at their nominal amount.

Accrued income and prepaid expenses

Accrued income and prepaid expenses were calculated on an accruals basis by allocating revenue and/or costs common to two or more years.

Net equity

Net equity items are shown at their carrying amount in accordance with OIC 28.

Provisions for risks and charges

Provisions for risks and charges were made to cover liabilities the existence of which is certain or probable but whose amount or date of occurrence cannot be determined at the reporting date.

The provisions were set up on a prudent and accruals basis in compliance with OIC 31. Related provisions are recognised in the income statement for the year in which they arise on the basis of the criteria for classifying costs -by type-.

Post-employment benefits

Post-employment benefits were calculated in compliance with the provisions of article 2120 of the Italian Civil Code, considering the law provisions and the specific terms of contracts and professional categories, and includes yearly allowances accrued and revaluations carried out according to ISTAT (Italy's National Institute of Statistics) coefficients.

The provision is recognised net of advances paid and of the amounts used for termination of employment during the year and represents the actual amount accrued and payable to employees at the reporting date.

Payables

Payables were recognised based on the amortised cost method, as defined by article 2426.2 of the Italian Civil Code, taking into account the time value of money, in compliance with the provisions of article 2426.1.8 of the Italian Civil Code. Payables for which the application of the amortised cost method and/or discounting was irrelevant continued to be recognised according to the nominal amount in order to give a true and fair view of the company's financial position and results of operations. For example, this is case of payables due within one year or, with reference to the method of amortised cost, if transaction costs, commissions and any other difference between the initial and terminal values are negligible or, in case of discounting, in the event of an interest rate inferable from contractual conditions not significantly different from the market interest rate.

Accrued expenses and deferred income

Accrued expenses and deferred income were calculated on an accrual basis by allocating costs and/or revenue that accrue to several financial years.

Other information

Measurement of foreign currency items

Foreign currency amounts are recognised using the exchange rate ruling at the time of their recognition, or at the closing rate pursuant to OIC 26.

Repurchase agreements

Pursuant to article 2427.6-ter, it is noted that the company did not carry out any repurchase transaction during the year.

Notes to the financial statements, assets

Assets were measured in accordance with article 2426 of the Italian Civil Code and in compliance with Italian accounting standards. The measurement bases specifically applied are shown in the note to each item.

Fixed assets

In these Financial Statements, the Company recorded a net value of Fixed Assets totalling euro 19,409,715=, recording an increase (net of depreciation, divestments and write-downs for the year, taking into account the increases for the year also as a result of the implementation of the Merger) of euro 11,701,710=. Fixed assets are broken down below as follows: intangible fixed assets, tangible fixed assets and financial fixed assets.

Intangible fixed assets

After recording the year's amortisation for the year, amounting to euro 1,316,993=, intangible fixed assets amounted to euro 7,951,129=, recording an increase of euro 7,123.277= attributable to the algebraic balance of increases for investments (which also take into account the Merger of MB66 into MARCO BICEGO, i.e., the takeover of the accounting balances of the merged company) and decreases for amortisation allocated in the financial statements, divestments, as well as rounding amounts.

Changes in intangible fixed assets

Changes in intangible fixed assets are shown in the following table.

The increases and/or decreases in intangible fixed assets recorded in 2023 relate to:

- as to the item -Start-up and Expansion Costs-: for euro 39,862= to charges related to the Merger, in addition to the net book balance, as of 01/01/2023, of euro 2,962= recognised by the merged company MB66 and indicated above under -Other Changes-; the recognition and/or maintenance of these amounts was made with the prior consent of the Board of Auditors;

- with regard to the item -Concessions, licences, trademarks and similar rights-: for euro 31,809= to transcription charges for the -MARCO BICEGO- trademark, for euro 14,090= to multi-year expenses related to the website, and for euro 371,315= to costs incurred, also in the year 2022, for new software (particularly of a management nature) that, until the moment in which the assets become operative, have been accounted for under -Assets under construction and advances-; finally, the item -Other changes- includes the takeover of the net accounting balance as of 01/01/2023 of the -MARCO BICEGO- trademark - of which further details are provided at the end of this paragraph - transferred to MARCO BICEGO as a result of the Merger;

- as for the item -Assets under construction and advances-: in addition to the reclassification affecting the above item, there were recharges to the American subsidiary of software costs for euro 74,237=, as well as advances of euro 6,460= relating to assets not yet in operation as of 31/12/2023;

- as to -Other intangible fixed assets-: for Euro 109,834= to expenses of a multi-year character relating to the development of new foreign markets.

GOODWILL

Legislative decree no. 139/2015, by changing the regulations regarding the calculation of the useful life of goodwill, envisaged that "the amortisation of goodwill is carried out on the basis of its useful life; in exceptional cases where it is not possible to reliably estimate its useful life, it is amortised within a period not exceeding ten years".

The aforesaid provisions related to the amortisation of goodwill apply retroactively as required by the accounting standard OIC 29; however, pursuant to Article 12, paragraph 2, of Italian Legislative Decree no. 139/2015, the company may choose not to apply these provisions to goodwill recognised in the financial statements prior to the financial year starting 1 January 2016.

In preparing prior year financial statements, the company carried out appropriate estimates, considering the period of economic use of the asset consistent for recognition in the balance sheet, in compliance with Legislative decree no. 139/2015.

More precisely, the following is represented:

- the goodwill (€ 15,000) paid when purchasing the former EGO S.r.l. business unit, fully amortised at 31 December 2023, was amortised over 5 years;

- for the goodwill (of euro 94,000=) of the Verona shop branch, acquired in 2004, an amortisation period of 18 years was determined, representing, for the company, the economic utility of this asset; as of 31/12/2023 this item was fully amortised;

- the goodwill (€ 770,000) relating to the acquisition of the Orlandini Gioielli S.r.l. business unit which took place in 2017 and consisting of all the assets organised for the public retail business in the store located in Venice, Piazza San Marco 77, is amortised over 10 years; this period coincides with the term of the lease the company took over as a result of the investment.

These amounts were recognised and/or maintained with the prior consent from the Board of Statutory Auditors.

TRADEMARK

With regard to the item -Concessions, licences, trademarks and similar rights-, consisting almost entirely of the -MARCO BICEGO- Trademark, the following should be noted:

- the company owns the -MARCO BICEGO- Trademark as a result of the Merger mentioned at the beginning of this document, through which it regained ownership of the asset, the book value of which (prior to revaluation, as better specified below) corresponds to the cost sustained by MB66 (and/or transferred to it as a result of an extraordinary demerger), increased by the costs sustained to complete the change of ownership, for the extension of its protection and the expenses sustained to renew the registration of the trademark;

- in the 2020 financial year, in derogation of Article 2426 of the Civil Code, MB66 availed itself of the option granted by Article 110 of Legislative Decree No. 104/2020, proceeding to revalue the above-mentioned brand; the final revaluation of the asset, equal to Euro 9,985,538= (the net book value of the asset, as of 31/12/2020, prior to revaluation, was Euro 14,462=), was determined on the basis of the estimate of the asset carried out by an independent party appointed for this purpose.

It should be noted that the revaluation was accounted for by MB66, in the year 2020 after having recognised the depreciation for that year, by (a) increasing the historical cost (by € 8,623,713=) and (b) decreasing the depreciation fund of reference (by € 1,361,825=). Therefore, the accounting results, as at 31/12/2020, of the item -Trademarks- showed a cost of euro 10,000,000= and an amortisation provision of euro 0=. During the financial year 2021, the company further increased this item by an additional Euro 30,869= (cost related to brand consultancy) and amortised the asset in the years 2021 and 2022 by Euro 2,006,174=.

The value recorded in the balance sheet and in the inventory as a result of the aforementioned revaluation does not exceed the value limit permitted by the relevant revaluation law (in particular, Art. 11 para. 2 Law 342/2000 recalled by L.D. 104/2020); moreover, this value did not exceed the value recoverable by MB66 (and now by MARCO BICEGO).

MB66 gave tax recognition to the greater value through the payment of the 3% substitute tax.

The effects on Shareholders' Equity of the aforementioned revaluation, in the financial statements as at 31/12/2023 (which remained unchanged compared to the financial statements as at 31/12/2020), are shown below.

^* the amount shown in the table of -Movements in intangible assets-, line -Revaluations-, refers only to the increase in the historical cost of the asset (€ 8,623,173=), while the remainder of the revaluation (€ 1,361,825=) has been shown, as of the financial statements as of 31/12/2020, by reducing the amortisation fund.

It should be noted that, in accordance with the provisions of accounting standard OIC 25, for the year ended 31 December 2023, no deferred taxation was allocated to the revaluation reserve in the financial statements under Law Decree No. 104/2020, in suspension of taxation, since there is no well-founded expectation of distribution of this reserve, which is entered under -Revaluation Reserves- under item A.III of Shareholders' Equity.

Tangible fixed assets

Tangible fixed assets are recorded at purchase or internal production cost, including directly attributable additional charges, adjusted by the respective accumulated depreciation in accordance with the criteria set out below.

Ordinary maintenance, carried out during the year, was fully expensed; on the contrary, extraordinary maintenance was allocated to the assets to which it refers, within the limits of the recoverable amount of the asset and depreciated in relation to the residual possibility of use.

Assets under finance lease with a repurchase right are recognised in the year when such right is exercised.

Depreciation is charged systematically and on a straight-line basis according to rates considered representative of the estimated useful economic and technical life of the assets, taking into account their normal use during the year; in the first year of use of the asset, depreciation is reduced by 50% if this approximation is acceptable because certain differences are negligible compared to more precise criteria (based on days or months of use).

The depreciation starts from when the assets are available for use.

The depreciation methods remained unchanged compared to those applied in the previous year.

The following (main) rates were used:

Except for some negligible exceptions, assets with a unit value of less than € 516.46 were fully depreciated in the year they were acquired in that their usefulness runs out during the year.

The depreciation plans, in compliance with OIC 16.70, are revised in case of change in the residual possibility of use.

At the reporting date, an asset whose value is permanently lower than that determined according to the above criteria and lower than its value in use or its fair value or, in the absence of both on the basis of cash flows (as required by OIC 9), is recorded at this lower amount. The original amount is reinstated when the relevant conditions are met.

Changes in tangible fixed assets

At 31/12/2023, tangible fixed assets before accumulated depreciation amounted to € 6,491,291 and accumulated depreciation amounted to € 3,357,360.

The following should be noted:

The category -Land and Buildings- shows the cost incurred in 2023 (including ancillary charges) for the acquisition of a property adjoining the company's headquarters. No depreciation allowances have been allocated as the asset is not yet ready for its intended use.

The -Plants and Machinery- category recorded purchases in the amount of Euro 123,704 relating, for the most part, to new laser and stone counting machines, as well as the construction and/or maintenance of various types of plant. In the year 2023, a plant was sold; its residual cost to be depreciated was EUR 19,318.

The category -Industrial and commercial equipment- recorded purchases of euro 54,493= relating to moulds and dies (euro 2,000=) and various types of equipment functional to the business (euro 52,493=).

"Other assets" increased (€ 564,513) as a result of the costs incurred to purchase furniture (€ 31,747), office machines and telephones (€ 55,847) and motor vehicles (€ 476,919). During the financial year 2023, this category was affected by the disposal (also as a result of scrapping) of fully depreciated assets, the historical cost of which amounted to € 3,600.

Capital gains resulting from the disposal of assets were recorded in the income statement under item A5.

Fixed assets were never revalued.

With reference to the requirements of point 6) of Article 2427 of the Civil Code, note that as at 31 December 2023 the company's property, plant and equipment were not encumbered by mortgages or other liens in favour of third parties.

Finance leases

As envisaged by the Legislator, assets under finance lease are recognised using the equity method by recognising the lease payments as operating costs.

At 31 December 2023, the company was a party to finance leases related to the building at Trissino and three cars. The contract related to a car in use at the German permanent establishment was considered similar to a rental contract and, therefore, was not considered in the table below.

Leases were recognised using the equity method by charging the lease payments to the income statement on an accruals basis and recording the asset under tangible fixed assets only at the time of their repurchase.

The following table provides the data required by article 2427.22 of the Italian Civil Code. The table summarises the data for all finance leases signed by the company, which entail the transfer to it of the risks and benefits pertaining to the assets subject to the leases and that involved the year.

The table below shows the information requested by the legislator in order to represent, albeit off the balance sheet, the implications deriving from the recognition difference compared to the financial method according to which the user would recognise the leased asset under fixed assets and calculate the related depreciation charges on this asset, whereas it would recognise at the same time the payable for the principal of the lease payments. In this case, interest and depreciation charge for the year would be recognised in the income statement.

Financial fixed assets

Equity investments the company intends to hold in the long term are recognised at cost. Their carrying amount is determined based on the purchase price. This cost will be adjusted for impairment losses in relation to the income-earning forecasts for the investee.

Receivables are classified as financial fixed assets instead of current assets on the basis of their classification as ordinary assets and, therefore, regardless of their maturity, financial receivables are classified as financial fixed assets while trade receivables are classified as current assets.

Changes in equity investments, other securities and derivatives

Changes in these assets are shown in the following table.

Equity investments in subsidiaries are represented by the 100% ownership of the share capital of MARCO BICEGO USA in the amount of EUR 6,126,447= and the 100% ownership of the share capital of MBJ KK (operating in Japan) in the amount of EUR 1,588,897=, which was fully written down in the financial years 2021 and 2022. As a result of the Merger, in 2023 the company recognised the cost incurred by MB66 (merged company), amounting to Euro 1,895,000=, for the 99.50% shareholding in the real estate company Via del Lavoro s.r.l.; in addition to this recognition value, previous write-downs of Euro 450,000= were recognised.

Equity investments in -other companies- refer to the investments (i) of euro 15,000=, made in 2019, for promotional and advertising purposes, in the football club FC ARZIGNANO VALCHIAMPO S.R.L., and (ii) of euro 100,000=, made by the merged company MB66, relating to the minority shareholding in the share capital of the holding company CD8 S.R.L.

Changes and due date of financial receivables

Changes in these assets are shown in the following table.

Receivables from subsidiaries refer to non-interest-bearing shareholders' loans disbursed by MB66 (merged company) to the company Via del Lavoro s.r.l., a shareholding (and receivables) that MARCO BICEGO SPA took over as a result of the Merger. The original amount disbursed of EUR 725,000= was partly repaid, in the amount of EUR 125,000=, in the year 2023.

Receivables -from others- comprise guarantee deposits. The change in the year is attributable to new security payments.

There are no such receivables due beyond five years.

Breakdown of equity investments in subsidiaries

The following table shows equity investments in subsidiaries and provides the additional information required by article 2427 of the Italian Civil Code.

Since the financial statements of the subsidiaries are expressed in -U.S. dollars- and -Japanese yen-, the figures in the first four columns of the table were converted into euros based on the Euro/Dollar rate at 31/12/2023.

Breakdown of equity investments in subsidiaries held directly and/or through trust companies or third parties

Breakdown of financial receivables by geographical area

The following table shows the breakdown of financial receivables by geographical area.

Financial fixed assets

The financial fixed assets shown below were not recognised at above their fair value.

Current assets

Current assets are measured in accordance with article 2426.8-11-bis of the Italian Civil Code. The methods used are indicated in the notes to the corresponding financial statements items.

Inventories

Inventories represented by raw materials, ancillary materials and finished goods are measured at the cost of purchase and/or production and realisable value according to the market trend, whichever lower.

Owned gold and stones, which in turn are divided into pearls, precious and semi-precious stones, were measured using the weighted average cost method.

Finished goods were measured taking into consideration the direct costs involved in producing the assets.

The table below shows the changes in inventories.

The first line in the table above includes precious metals, gold and silver, precious and semi-precious stones, pearls and packaging products and commercial support at 31/12/2023. Said inventories amount to € 3,810,680, net of the write-down provision of € 1,074,772 deriving from prior year accruals in the previous financial years and in 2023 due to the existence of stones, pearls that are slow moving and/or items that can no longer be used.

Jewellery items are included in finished goods for a total of € 13,455,953.

Current receivables

Pursuant to article 2423.3-bis of the Italian Civil Code, for these items, the application of the amortised cost method was deemed irrelevant for the purposes of giving a true and fair view of the company's financial position, results of operations and cash flows - taking into account the time value of money - as per article 2426.1.8 of the Italian Civil Code, also considering the provisions of OIC 15.33 (the amortised cost method may not be applied to receivables if the effects are irrelevant compared to the value calculated based on estimated realisable value; the effects are irrelevant if the receivables are short term, i.e. with a maturity of less than 12 months).

Therefore, current receivables are recorded at their estimated realisable value. The adjustment of the nominal amount of receivables to the estimated realisable value was obtained through the bad debt provision.

Therefore, the bad debt provision is adequate compared to the risks relating to specific -non-performing- receivables and the generic risk of non-collection inherent in most of the receivables, estimated on the basis of past experience and also taking into account the general economic conditions, the sector and country risk.

Since there are no trade receivables due after one year, the company opted to measure them at their estimated realisable value, in compliance with article 2426.1.8 of the Italian Civil Code. This adjustment was made by accruing a bad debt provision totalling € 1,120,926.

There are no receivables due after five years.

Changes and due date of current receivables

The following table shows the changes in current receivables as well as, if significant, their due date.

Trade receivables

Trade receivables are analysed below, including changes in the bad debt provision.

The provision for bad debts totalled euro 1,120,926=; in 2023, it was partially utilised against the write-off of some uncollectable receivables (for euro 35,594=) and increased by euro 82,905=.

Breakdown of current receivables by geographical area

The following table shows the breakdown of current receivables by geographical area.

Receivables from subsidiaries

Receivables from subsidiaries refer to receivables, as of 31/12/2023, from the company MARCO BICEGO USA (euro 6,835,633=) and from the company MBJ KK (euro 2,320,133=).

Tax receivables

The table shows the changes in each item making up tax receivables compared with last year.

Deferred tax assets and liabilities

To further clarify the figures, this paragraph shows the changes in deferred tax assets and liabilities.

Deferred tax assets and deferred tax liabilities are estimated based on deductible/taxable temporary differences in the coming years. In accordance with the provisions of Article 2427 no. 14 of the Italian Civil Code, the following table shows the details of the temporary differences that led to the recognition of deferred tax assets.

Receivables from others

The table below shows the changes that took place in each item making up receivables from others compared with last year.

This item includes all current receivables that cannot be classified otherwise and totals € 437,276, of which € 67,958 due from SIMEST.

Current financial assets

Changes in current financial assets

The following table shows information on changes in current financial assets.

Legislative decree no. 139/2015 introduced the obligation to recognise the derivatives entered into by the company under assets or liabilities, depending on whether their fair value at the reporting date is positive or negative, assuming the market value pursuant to article 2426.4 of the Italian Civil Code for financial instruments for which a market can be identified. If the measurement is positive, it represents a financial asset to be recorded under fixed assets or current assets depending on its destination. A balancing entry is recognised in the income statement (item D.18.c, Write-backs of derivatives), unless it is a hedging transaction.

At 31 December 2023, the company had no derivatives.

The item -other securities-, on the other hand, includes the use made of part of the company's liquidity. The change of euro 84,500= relates to purchases made in 2023 of bonds (for euro 70,000=) and the reversal, for euro 14,500=, of write-downs made in 2022 of investments, also in bonds.

Cash and cash equivalents

The following table shows information on changes in cash and cash equivalents measured at their nominal amount.

Cash and cash on hand is limited to immediate liquidity requirements. Other cash and cash equivalents comprise the temporary positive balances on bank accounts, including interest income accrued during the year and appropriately reconciled with the relevant account statements.

Accrued income and prepaid expenses

During the adjustment entries, necessary to determine the economic and time accrual of the components of income for the year, accrued income and/or prepaid expenses totalling € 554,345 were recognised in respect of costs during the year, in correspondence with their respective numerical manifestation, but deemed to be accrued in the following year.

The following table shows the breakdown of these items.

Capitalised financial charges

All the interests and other finance costs were fully paid during the financial year. Pursuant to article 2427.1.8 of the Italian Civil Code, it is noted that no financial charges were capitalised.

Notes to the financial statements, liabilities and net equity

Net equity and liabilities have been recorded in accordance with the Italian accounting standards; the sections relating to each item indicate the criteria applied in the specific case.

Changes in the individual items are analysed in detail below in accordance with current legislation.

Net equity

Net equity items are shown at their carrying amount in accordance with OIC 28.

Changes in net equity items

The following tables show the changes in individual net equity items as well as the breakdown of other reserves, if any.

Breakdown of sundry other reserves

Share capital amounted to € 250,000 at 31 December 2023. It is fully paid up and divided into 250,000 shares with a par value of € 1.00 each.

The revaluation reserve derives, as to euro 19,416= from the takeover of the merged company Bepi Bicego Srl in 2010, and as to euro 9,685,972= from the takeover of MB66 in 2023 (for further clarification on the nature of the latter reserve of euro 9.685.972 see the paragraph on -Intangible Fixed Assets-), in addition to rounding off in the amount of euro (1=); these values, in compliance with tax regulations, have been reconstituted in the assets of the surviving company (MARCO BICEGO SPA).

The legal reserve amounts to € 50,000 and is equal to the minimum amount envisaged by article 2430 of the Italian Civil Code.

The breakdown of -Other reserves- is as follows:

- the extraordinary reserve, which amounted to € 38,938,252= at the end of 2023 and increased compared to 31/12/2022 due to the allocation of the profit for the year 2022 in the amount of € 2,767,579= and the reclassification of the reserve for unrealised exchange gains in the amount of € 41,550=;

- the capital contribution reserve from the merged company of € 384,936;

- "sundry other reserves" comprising:

-- the taxed reserve of € 20,512, recognised following a previous tax audit;

-- the -6% contribution reserve- of € 1,006, reinstated in compliance with current regulations;

-- the reserve for gains on derivatives in the amount of Euro 136,808;

-- the reserve that has already paid taxes and was generated under the Bepi Bicego snc company, which was later transformed into an srl (limited liability) company and merged during 2010, for Euro 926,015;

-- the Euro rounding reserve of € (2).

Pursuant to article 2427.4 and 7 of the Italian Civil Code, the following table shows the analytical changes of net equity items in the last two years.

Availability and use of net equity

The following tables show net equity items by specifying their origin, possibility of use and possibility of distribution, as well as their use during the three previous years.

Key: A: for share capital increase; B = to cover losses; C = for distribution to shareholders; D: for other statutory restrictions; E: other

Origin, possibility of use and distribution of sundry other reserves

Key: A: for share capital increase; B = to cover losses; C = for distribution to shareholders; D: for other statutory restrictions; E: other

Provisions for risks and charges

Provisions for risks and charges were made to cover liabilities the existence of which is certain or probable but whose amount or date of occurrence cannot be determined at the reporting date.

These provisions reflect the most reliable estimate based on available information.

The provisions were set up on a prudent and accruals basis in compliance with OIC 31. Accruals are recognised in the income statement for the year, classifying costs -by nature-, if matching is feasible; otherwise, they are recognised under items B12 and B13 of the income statement.

Pension and similar provisions consist of provisions for indemnities to be paid to agents at the end of their mandate, i.e. agents' leaving indemnities and bonuses and the change in the relative provisions is exclusively due to accruals made during the year.

The provision for deferred taxes recorded in the financial statements of Euro 112,011 refers to the unrealised exchange gains during 2023.

The other provisions for risks and charges refer to estimated potential liabilities with suppliers and/or at the reporting date.

The following table shows the changes in provisions for risks and charges.

Other

Other provisions are broken down below pursuant to article 2427.1 of the Italian Civil Code.

The provision for risks of euro 128,390= was maintained for potential liabilities, still outstanding, with suppliers; the amount of euro 11,446= concerns the provision for returned goods (sold in the year 2023) that occurred in the first months of the year 2024.

Post-employment benefits

Post-employment benefits were calculated in compliance with the provisions of article 2120 of the Italian Civil Code, considering the law provisions and the specific terms of contracts and professional categories, and includes yearly allowances accrued and revaluations carried out according to ISTAT (Italy's National Institute of Statistics) coefficients.

The provision is recognised net of advances paid and of the amounts used for termination of employment during the year and represents the actual amount accrued and payable to employees at the reporting date.

The following table shows the changes in post-employment benefits.

Payables

Pursuant to article 2423.3-bis of the Italian Civil Code, for these items, application of the amortised cost method was deemed irrelevant for the purposes of giving a true and fair view of the company's financial position, results of operations and cash flows - taking into account the time value of money - as per article 2426.1 of the Italian Civil Code, also considering OIC 19.42 (the amortised cost method may not be applied to payables if the effects are irrelevant compared to the nominal amount and, therefore, the principle of irrelevance applies if the payables are short term, i.e., due within one year).

Therefore, payables are recorded at their nominal amount, which represents their estimated realisable value.

Furthermore, pursuant to article 12.2 of Legislative decree no. 139/2015, the company applied the amortised cost method exclusively to the payables recognised in the previous year.

Changes in and due date of payables

The following table shows information related to changes in payables and their due date.

Payables decreased during the year by Euro 433,289. With respect to the individual items listed above, the following should be noted:

- Due to banks: as can be seen from the above, overall bank exposure decreased by euro 611,644= with respect to 31/12/2022 due to the payment of instalments on outstanding loans; total payables to banks beyond the year amount to euro 914,883=; there are no loans due beyond five years after 2023.

- Payables to other lenders: these are overpayments made by customers and/or debts related to banking services (euro 241=), as well as the debt to SIMEST S.p.A. (euro 243,469=) for loans obtained (part of which, i.e., euro 67,958= will be disbursed during the year 2024; this amount is balanced in the accounts under the item -Receivables from others- of current assets where a receivable item of euro 67,958= has been recorded); the payable to SIMEST S.p.A. does not have a maturity date beyond five years after 2023.

- Payments on account: at 31/12/2023, the company recognised a payable for customers' advances of € 397,739.

- Trade payables: they increased by € 828,351 due to higher purchases resulting from the increase in turnover compared to the previous year;

- Payables to subsidiaries: they refer to Marco Bicego Usa (€ 4) and MBJ (€ 12,808). These amounts include exchange rate adjustments at 31/12/2023;

- Tax payables: the amount payable to the tax authorities as of 31 December 2023 totalled euro 1,117,688= and is represented by the IRES balance for the year of euro 614,472=, the IRAP balance for the year of euro 150,996=, customs charges and withholding taxes on employee and self-employed income, and on remuneration paid to contractors and agents (euro 241,816=), the company's VAT payable (euro 53,984=), and the residual payable to the Agenzia delle Entrate due to the reversal of tax credits used for offsetting purposes in the year 2022 and in previous years (euro 56,420=).

- Payables to social security institutions, consisting of (i) payables to Inps and Inail for euro 244,933=, (ii) deferred contribution charges on wages and salaries for euro 86,521=, (iii) payables for FIRR agents for euro 7,405=, and (iv) payables to other social security and/or welfare institutions for euro 30,435=.

- Other payables: a breakdown of this item is shown in the table below.

Other payables

The following table shows the breakdown of -Other payables-.

Breakdown of payables by geographical area

The following table shows the breakdown of the payables by geographical area.

Payables secured by collateral on company assets

Pursuant to article 2427.1.6 of the Italian Civil Code, it is noted that there are no company payables secured by collateral.

Accrued expenses and deferred income

The following table shows the changes in accrued expenses and deferred income.

The following table shows the breakdown of these items.

Accrued expenses amount to € 17,192, while deferred income amounts to € 25,600.

Notes to the financial statements, income statement

The income statement shows the results of operations.

It represents operations by summarising the positive and negative income components that contributed to determining the net profit (loss) for the year. The positive and negative income components recognised in accordance with article 2425-bis of the Italian Civil Code are shown separately as follows: core, non-core and financial.

The core business identifies the income components generated from continuing operations in the sector relevant for carrying out operations, which identify and qualify the characteristic and distinctive part of the economic activity carried on by the company.

The financial operations consist of operations that generate financial income and charges.

Secondarily, the non-core business consist of operations that generate income components that are part of ordinary business activities, but are not included in core and financial operations.

Production revenues

Revenues are recognised on an accruals basis, net of returns, discounts, allowances and premiums, as well as direct taxes.

Grants related to income, recognised on an accruals basis in the year in which the right to receive them arose with certainty, are included under item A5 as they supplement revenues from the core business and/or reduce costs and expenses of the core business.

Breakdown of revenues from sales and services by business segment

The table below provides a breakdown of revenues from sales and services by business segment.

Revenues from sales for the year are shown above, indicating the gross balance and the adjustments for returns and discounts on sales.

Breakdown of revenues from sales and services by geographical area

The table below provides a breakdown of revenues from sales and services by geographical area.

Change in work in progress, semi-finished products and finished goods

At 31 December 2023, finished goods increased by € 1,261,690 on the previous year:

Other revenues and income

The breakdown of other revenues and income is shown in the following table:

Production cost

Costs and expenses are recognised by nature and on an accruals basis, net of returns, discounts, allowances and premiums, in compliance with the matching principle, and recognised in their respective items in accordance with OIC 12. With regard to purchases of goods, the related costs are recognised upon the substantial transfer of ownership, taking the transfer of risks and benefits as a benchmark for the substantial transfer. With respect to the purchase of services, the related costs are recognised when the service has been received, i.e. when the service has been completed, whereas, in the case of ongoing supply of services, the related costs are recorded in relation to the portion accrued.

Raw materials, consumables, supplies and goods

This item includes the purchases shown in the following table:

Services

The following table provides a breakdown of the costs incurred during the year for services performed by third parties.

Overall, costs for services increased by € 1,457,379 compared to the previous year.

Use of third party assets

This item may be analysed as follows:

This cost category includes licence fees, rents paid for the Verona and Venice stores and for operating buildings, lease payments for the Trissino industrial property and for company motor vehicles and the rental of technical software, furnishings, various equipment, means of transport and cars.

In the 2023 financial year, due to the effect of the Merger of MB66 (which, in previous years, licensed MARCO BICEGO SPA to use the -MARCO BICEGO- brand name), and the backdating of the accounting and tax effects of the transaction, no amount was recognised in the financial statements under the item -Royalty Fees-.

Personnel costs

This item comprises the entire cost for employees, including merit-based increases, untaken holidays and accruals required by law and relating to work contracts. The total personnel cost is Euro 6,191,906 and includes the costs for those working in the German permanent establishment.

Amortisation, depreciation and write-downs

This item is shown in detail in the following table:

The item -amortisation of intangible fixed assets- includes the amortisation of the goodwill of the single-brand shop in Venice for euro 77,000, and the amortisation of the -MARCO BICEGO- brand for euro 1,006,268.

Change in raw materials, consumables, supplies and goods

This item, equal to the difference between the values of the opening and closing inventories of raw materials, merchandise and consumables, indicates a negative algebraic balance of Euro 412,282, since the closing inventories are higher than the opening ones, also taking into account the write-downs for the year.

During the year, the company made additional accruals to the provision for the write-down of some inventory items whose value had decreased during the year.

Other operating costs

Other operating costs include cost items that cannot otherwise be classified as production cost.

A breakdown of this item is provided in the table below.

It should be noted that the item -contingent liabilities/losses/exceptional charges- includes adjustments to income statement items (euro 33,436=) and balance sheet items (euro 12=) from previous years.

Financial income and charges

Financial income and charges are recognised on an accruals basis in relation to the portion accrued during the year.

Breakdown of income from equity investments

There is no income from equity investments as referred to in article 2425.15 of the Italian Civil Code.

Breakdown of interest and other financial charges

The table below provides a breakdown of interest and other financial charges as referred to in article 2425.17 of the Italian Civil Code, by bond issues, bank loans and borrowings and other.

Exchange gains/losses

Information is provided below on exchange gains or losses, distinguishing between the realised and unrealised portions.

The specific income statement item including exchange gains and losses (C 17-bis) includes both the differences realised at the time of collection or payment and the differences determined upon measurement, by applying the following methods:

- cash assets and liabilities in foreign currency are translated at closing rate (any net gain recognised in the income statement will result in the creation of a specific restricted reserve - until the gain is realised - to be released by the shareholders' meeting that approves the financial statements);

- non-cash assets and liabilities in foreign currency are to be recorded at the exchange rate in force at the time of purchase.

The effects of changes in exchange rates between the reporting date and the date of preparation of the financial statements are described in the notes to the individual items.

Adjustments to financial assets and liabilities

In connection with Art. 2426 No. 11, we provide data on the accounting effects of derivative contracts entered into in the year 2022 (and closed in the year 2023) to hedge foreign currency transactions.

Amount and nature of individual revenue/cost items exceptional in size or impact

With regard to revenue and/or cost components of exceptional magnitude or incidence, we note the (negative) differential of euro 479,639= arising from the increased purchase of gold as a result of loan-for-use and/or forward contracts. This amount has been allocated to item B6), costs -for raw materials, consumables and goods-.

Income taxes, current and deferred

The company provided for current income taxes in accordance with the tax regulations in force. Current taxes include the taxes pertaining to the year as per the tax return; taxes relative to previous years comprise prior year direct taxes, including interest and penalties, and also refer to the positive (or negative) difference between the amount due as a result of the settlement of a dispute or assessment compared to the balance of the provision set aside in previous years. Finally, deferred tax assets and liabilities refer to positive or negative income components subject to taxation or deduction, respectively, in years other than those of statutory accounting.

Current and deferred taxes

Income taxes may be analysed as follows:

The table below shows the reconciliation between the theoretical tax charge and the tax charge as per the financial statements:

Notes to the financial statements, other information

The other information required by the Italian Civil Code is shown below.

Employment figures

The following table shows the average number of employees, broken down by category and calculated by considering the daily average.

The average number of employees increased by four compared to the previous year.

Fees, advances and loans granted to directors and statutory auditors and commitments undertaken on their behalf

The following table shows the information required by article 2427.16 of the Italian Civil Code, specifying that there were no advances and loans and no commitments were undertaken on behalf of the directors as a result of guarantees given.

Audit fees

The following table shows the audit fees, broken down by type of service.

Shares issued by the company

The following table shows the number and nominal amount of the company shares and any changes of the year.

Securities issued by the company

The company did not issue any security or similar covered by article 2427.18 of the Italian Civil Code.

Other financial instruments issued by the company

Pursuant to article 2346.6 of the Italian Civil Code, it is noted that the company did not issue other financial instruments.

Off-balance sheet commitments, guarantees and contingent liabilities

Total off-balance sheet commitments, guarantees and contingent liabilities are shown separately in these notes, pursuant to article 2427.9 of the Italian Civil Code. Guarantees are recognised at an amount equal to that of the guarantee given or, if not determined, at the best estimate of the risk assumed. Commitments are recognised at their nominal amount, based on the related documents.

As at 31/12/2023, the banking system has issued sureties to the company, in the interest of private individuals and/or banks, in the amount of EUR 11,000= in connection with leasing contracts.

In relation to the loan granted by MPS, with residual principal as at 31/12/2023 (as per the amortisation schedule) of € 1,525,424=, Mediocredito Centrale issued a specific guarantee for a countervalue of 90% (on a sliding scale) for a total of € 1,372,882=.

There are no off-balance sheet commitments, guarantees or contingent liabilities.

Assets and loans earmarked for a specific business

Assets earmarked for a specific business

At the reporting date, there were no assets earmarked for a specific business as per article 2427.20 of the Italian Civil Code.

Loans earmarked for a specific business

At the end reporting date, there were no loans earmarked for a specific business as per article 2427.21 of the Italian Civil Code.

Related party transactions

During the year, the company carried out transactions with related parties. As these transactions took place at market conditions, no additional information is provided in accordance with current regulations.

Off-balance sheet agreements

No off-balance sheet agreements were entered into during the year.

Post-balance sheet events

With reference to point 22-quater of Article 2427 of the Italian Civil Code, no significant events occurred after the end of the financial year that had a significant impact on the balance sheet, financial position and results of operations; the upward trend of the gold price, recorded in the first months of 2024, is, and has been, constantly monitored by management, which has mitigated its effects, while adapting its future strategies, through a more performing purchasing policy and/or revising its sales lists. The results achieved in the first part of the year 2024 confirm the positive trend in the company's results, both from an economic and a balance sheet/financial point of view.

In relation to the international geopolitical tensions arising from the conflicts involving Russia and Ukraine on one side and Israel on the other, it should be noted that the company has not suffered any significant negative effects to date, as these markets are not of particular importance to the company's business.

It is acknowledged that in April 2024 the company set up a permanent establishment in London in order to strengthen the presence of the -MARCO BICEGO- brand in the British territory.

Please also refer to the information contained in the Report on Operations under the heading -Outlook-.

Information on derivatives pursuant to article 2427-bis of the Italian Civil Code

In accordance with article 2427-bis.1 of the Italian Civil Code, which envisages compliance with the principle of true and fair view of company commitments, it is noted that the company had no derivatives at 31/12/2023.

Companies that prepare the financial statements of the largest/smallest group of companies to which the company belongs as a subsidiary

The company does fall under the scope of article 2427.22-quinquies and sexies of the Italian Civil Code. It should be noted that MB66 HOLDING S.R.L. was incorporated on 06 December 2023, which, from the effectiveness of its incorporation, controls MARCO BICEGO SPA; however, given that the first financial statements of MB66 HOLDING S.R.L. will close on 31 December 2024, the Group's consolidated financial statements will be prepared by MARCO BICEGO SPA.

Highlights of the company that carries out the management and coordination activities

Pursuant to article 2497-bis.4 of the Italian Civil Code, it is noted that the company is not subject to the management and coordination of others.

Information pursuant to article 1.125 of Law no. 124 of 4 August 2017

Pursuant to article 1.125 of Law no. 124/2017 on the obligation to disclose in the notes any amounts received during the year by way of grants, contributions, paid assignments and, in any case, economic advantages of any kind from public administrations and from the persons referred to in paragraph 125 of the same article, the company confirms that it received the following grants during 2023:

- the offsetting of gas and energy tax credits in the amount of Euro 44,316=, of which Euro 27,537= accrued in the year 2022 and Euro 16,779= accrued in the year 2023;

- the offsetting (for € 10,186.33=) of the tax credit for investment in capital goods L. 178/2020 (reference year 2022);

- the offsetting (for € 2,605=) of the tax credit for investment in capital goods L. 178/2020 (reference year 2021);

- the offsetting (for € 779.20=) of the tax credit for investment in capital goods L. 160/2019 (reference year 2020);

- the offsetting (for EUR 500=) of the tax credit for tax measurers Leg. Decree No. 127/2015 (reference year 2020);

- the offsetting (for EUR 1,735=) of the sanitisation and purchase of protection devices tax credit Law Decree No. 73/2021 (reference year 2021);

- the offsetting of tax credits for advertising investments totalling Euro 55,195=, of which Euro 36,326= relates to the year 2022, Euro 14,781= relates to the year 2021, and Euro 4,087.72 relates to the year 2020;

- offsetting (in the amount of EUR 9,128.67=) of the tax credit on investments in research and development, environmental transition, technological innovation 4.0 and other innovative activities L. 160/2019 (reference year 2020);

- offsetting (in the amount of € 18,823.33=) of the tax credit for investments in research and development, environmental transition, technological innovation 4.0 and other innovative activities L. 160/2019 (reference year 2021.)

For these disclosure requirements, please refer, where necessary, to the National State Aid Register, the results of which can be found at https://www.rna.gov.it/RegistroNazionaleTrasparenza/faces/pages/AiutoTemporaryFramework.jspx.

Proposed allocation of the net profit for the year

Dear shareholder, based on the above, we propose that you allocate the net profit for the year of EUR 7,027,284.48:

- as for Euro 5,897,284.48 to the extraordinary reserve;

- as for euro 1,130,000.00= to dividends to the holders of the right to profits on the shares issued by the company.

No accrual was made to the legal reserve since it has already reached the legal limit.

No accrual to the reserve for unrealised foreign exchange gains as there was a negative balance (losses exceeding gains) from the translation of foreign currency items at 31/12/2023

The reserve for gains on derivatives, recorded in the amount of € 136,808.44=, as there were no derivative financial instruments outstanding as of 31/12/2023, will be reclassified, in the year 2023, as an increase in the extraordinary reserve.

Without prejudice to the different allocations that the Shareholders' Meeting shall deem most appropriate.

Notes to the financial statements, final part

Dear Shareholder,

These financial statements, comprising a balance sheet, an income statement, a cash flow statement and these notes, give a true and fair view of the company's financial position, results of the operations and cash flows, and are consistent with the accounting records.

Therefore, we invite you to approve the draft financial statements at 31 December 2023 together with the proposed allocation of the net profit for the year, as prepared by the board of directors.

The financial statements are true, real and in compliance with the accounting records

Management Report

MARCO BICEGO S.p.A.

Registered office: Via dell'Industria n. 33 - Trissino (VI)

VICENZA Chamber of commerce

Tax Code and registration number: 02785630241

REA no.: VI 275062

Subscribed and fully paid-up share capital: € 250,000.00

VAT no.: 02785630241

Single-member company

Directors' Report

Financial statements at 31 December 2023

Dear Shareholder, in the Notes we have provided you with information concerning the financial statements as at 31/12/2023. In this document, we will provide you with information on your company's situation and performance, in accordance with Art. 2428 of the Italian Civil Code. This report, prepared with values expressed in units of Euro, is presented together with the Financial Statements to provide information on the company's income, assets, financial and operating performance, accompanied, where possible, by historical information and forecasts.

In this respect, the table below shows the highlights of the income statements of recent years:

Information on the company

The year 2023 was characterised by a number of factors that had a significant impact on the global economy, among them the well-known geopolitical tensions.

The continuation of the Russia-Ukraine conflict has contributed to pushing up the prices of energy commodities in the first place, but also of agricultural products and the prices of precious metals, especially gold, a safe-haven asset par excellence; this scenario has been further aggravated by the outbreak of the conflict in the Middle East with the risk of tensions spreading to other countries.

The rise in commodity prices, linked to these international events, contributed to the weakening of the global economic scenario, particularly in Europe, where the side effects of high inflation and, with the consequent monetary tightening adopted by the authorities of the various countries, the rise in interest rates also occurred. However, towards the end of the year, at least at the European level, inflation expectations gradually decelerated and a period of rising interest rates that saw them rise to 4.5% came to a halt.

The Italian gold-silver-jewellery sector ended 2023 positively with an average change in turnover of 10.2%, thus continuing the positive growth trend of the two-year period 2021-2022. In terms of exports, the year just ended showed an increase of more than 11% in the sector, with a slight decline in the domestic market.

During the year 2023, the gold price remained above $ 2,000 an ounce with an average price of $ 1,940 an ounce, up 8% year-on-year, while the close at $ 2,078 set a new record.

The exchange rate of the euro against the US dollar (remember that the American continent is the main market for the company) averaged about 1.08 during the year with a rather uneven trend. From a drop below parity in October 2022, it climbed back up to July 2023 and then fell again to around 1.05 in October, a level well below the average level of recent years. The euro then ended 2023 in positive territory at around 1.10 against the dollar.

During the year, the company benefited from the special growth in the sector with an increase in sales volumes, which resulted in revenues of EUR 54,179K, up by about 14% compared to the previous year. In contrast to the general trend in the industry, turnover in the domestic market was up 54% year-on-year, and direct sales in the Asian and Caribbean markets were up 59%. All of this was also aided by the company's sales network, which covers, almost entirely, the worldwide market. Marco Bicego S.p.a.'s distribution channel can also rely on e-commerce activity, in which considerable financial resources have been invested and which allows retail customers to purchase independently from the company's website.

Production costs increased by about 4.5%, proportionally less than the growth in revenue, contributing to the increase in EBITDA (20% of the value of production), which was a clear improvement over the value recorded in the previous year (13%).

As already indicated in the notes to the financial statements, it should be noted that on 30/06/2023, the Merger by takeover of the company MB66 S.R.L. (merged company) became effective into Marco Bicego S.p.a. (surviving company); the former company, among its assets, held the -MARCO BICEGO- trade mark, the use of which was previously licensed to the company in return for royalties to be paid to the merged company. Therefore, the company's balance sheet and income statement as at 31/12/2023 are strengthened as a result of the incorporation of the book values of the merged company. In particular, EBITDA was affected by the reduction in the cost for the use of third-party assets as a result of the no longer due payment of royalties for the use of the brand name (with a corresponding increase in amortisation costs of intangible assets, which, however, does not impact the indicator).

Profit after tax for the year ended 31/12/2023 amounted to euro 7,027K, an increase over the operating profit recorded the previous year (euro 3,504K), which had been affected by the write-down of the Japanese affiliate (for euro 1,189K).

Significant events of the year

In addition to those already disclosed in the notes to the financial statements, there are no particular facts in the year under review that need to be brought to your attention.

Secondary offices

In compliance with the provisions of article 2428 of the Italian Civil Code, the following table shows the company's secondary offices:

The company also operates in foreign markets through a branch located in Pforzheim (DE).

Management and coordination

The company is subject to the management and coordination of -MB66 Holding Srl- (Article 2497 et seq. of the Italian Civil Code), incorporated on 6 December 2023.

In the Notes to the Financial Statements, it was not possible to present, pursuant to Article 2497-bis, paragraph 4, of the Italian Civil Code, a summary of the essential data of the last financial statements of the company exercising management and coordination activities, since the first financial year will end on 31/12/2024.

Financial position

For a better understanding of the company's financial position, the reclassified balance sheet is shown below. It should be noted that the 2023-2022 changes in the individual items in the table, and the related indicators, are affected by the Merger mentioned above.

With regard to the most significant investments in tangible and intangible assets, it should be noted that in the year 2023 the company:

- invested 1,960K, for the acquisition of a property adjoining the company's headquarters, and a further 700K for plant, machinery, production equipment, as well as furniture and vehicles;

- invested more than 200K in software, including management software.

Balance Sheet - Assets

Balance Sheet - Liabilities

Key financial position indicators

Based on the previous reclassification, the following financial statements ratios are calculated:

Results of operations

For a better understanding of the company's results of operations, a reclassified income statement is provided below. This reclassification is also affected by the Merger of MB66 S.R.L., mentioned above, particularly with regard to costs for the use of third-party assets (under the item -General Expenses-) and for depreciation.

Income Statement

Key ratios of the results of operations

Based on the previous reclassification, the following financial statements ratios are calculated:

Information pursuant to article 2428 of the Italian Civil Code

The information specifically required by article 2428 of the Italian Civil Code is provided below.

Main risks and uncertainties to which the company is exposed

Below is an analysis of the risks reasonably considered as the most significant in terms of impact on the company's financial position and results of operations based on the company's approach to business risk management.

Sector risk

The company operates in a medium/high market segment and, as such, is sensitive to changing fashion trends and consumer preferences, as well as global economic conditions. In defining its sales strategy, the company seeks to interpret its customers' preferences and, as a result, develops specific products and collections. Should the company be unable to do so or should the expectations prove incorrect, the business prospects could be negatively affected, thereby significantly influencing the company's results. However, past experience has made it possible to minimise this risk.

The company is strongly focused on its products in terms of design, technologies related to production processes and R&D. These aspects are considered essential for the achievement and maintenance of its competitive market position. The -MARCO BICEGO- trademark is the subject of a series of initiatives implemented by the company to protect intellectual property rights.

The company currently operates through a distribution network in Italy and in many other countries around the world and is therefore exposed to a series of local risks, such as laws and regulations that could penalise product sales, changes in market conditions, changes in commercial relations between countries, etc. The likelihood of occurrence of these events is variable and unpredictable, but it could still have a negative impact on the company's operations.

Credit risk

The company's commercial activity is aimed at both the domestic and international markets. The credit risk refers to the fact that a customer incurs a financial loss by not fulfilling an obligation arising from the sale of goods and services. The Company's Board of Directors considers the risk in question to be limited, given the allocation to the financial statements of a special allowance for doubtful accounts against this eventuality (and for a non-negligible amount, amounting to 1,121K), made on the basis of an estimate, which is considered appropriate, also considering the historical trend of recorded loan losses.

Liquidity risk and cash flow risk

In order to meet its liquidity needs and, thus, meet its obligations, the company can rely on the significant financial resources deposited with various credit institutions, with one of which the company also has a loan agreement in place (maturing in the year 2026). The company's sources of financing also include leasing contracts, the main one of which is for real estate and the original principal amount of € 6,400K, which expires in 2025; in addition, there are financing contracts with SIMEST S.p.A. at a subsidised rate as of 31/12/2023.

In light of the necessary recourse to medium/long-term debt instruments, the company is currently exposed to the risk of changes in cash flows and, in particular, those connected to interest rate trends. However, this risk, in light of the overall residual exposure, the non-long-term maturity of repayments, the existing cash and cash equivalents, and the presence of subsidised loans, is deemed to be limited and such as not to justify, at present, the use of derivative financial instruments to hedge the risk of interest rate fluctuations.

Risk of non-innovation

The company's success depends on its ability to maintain and, possibly, increase its share in the market in which it currently operates and/or to expand into new markets through innovative, high-quality products (especially in terms of design) that guarantee satisfactory levels of profitability. This risk is limited as the company continues to invest in R&D, as detailed below.

Price risk

With regard to the risk arising, in particular, from the volatility of the euro/US dollar exchange rate (and given the centrality of the US market), the company resorted, during the course of the year, to entering into forward sales contracts to protect itself with regard to receipts in US dollars, by fixing in advance the exchange rate at which the contract will be concluded at maturity.

The gold price risk is managed by planning and underwriting derivative and/or gold lending contracts, which are useful in mitigating sudden rises in the metal's value.

Risk for disputes

On a prudential basis and in order to limit, from an economic point of view, the risk of disbursements, as of the balance sheet date, the company has set aside provisions for potential disputes - not yet activated and/or threatened - with suppliers, which could potentially generate future liabilities.

Non-financial key ratios

Pursuant to article 2428.2 of the Italian Civil Code, it is noted that, given the company's specific business, no non-financial ratios are presented as they are not deemed important for the purposes of providing a clearer understanding of the company's financial position and results of operations.

Information on the environment

The company's commitment is primarily aimed at ensuring compliance with applicable laws and the continuous improvement of its performance both for the reduction of its environmental impact and for the optimal use of its resources. These programmes target the most significant aspects, such as emissions into the atmosphere, water, energy, raw materials and waste management.

In the production process, cleaning/degreasing products that are considered dangerous by existing regulations are used in limited quantities and their disposal takes place at regular intervals in compliance with the governing laws. Other types of waste related to production are classified as "non-hazardous" waste according to governing laws and again in this case their storage and disposal are managed in compliance with applicable laws.

Although the risk of pollution is remote, the company is strongly committed to the prevention of pollution by taking all steps to reduce environmental risks of its activities by providing appropriate preventive and protective measures and monitoring and control systems.

Workforce

The Company gives paramount importance to the human capital represented by its employees and is committed to creating the best conditions for performing daily activities and for professional growth.

Special attention is paid when preparing all the measures required for protecting the health and safety of workers and, as required by pertinent laws, training and information are necessary processes for learning the rules and methods that form part of the social security and welfare system.

Training is intended to teach workers the set of knowledge and procedures that are essential to achieving the skills that enable them to work both by reducing risks and protecting personal safety. With information, workers learn to recognise and consequently to reduce and control the risks present in the company. Finally, through training, employees are trained to use in a practical and correct way the equipment, machinery, devices and all the instrumentation required for the work phases or for the actions made necessary by situations of risk.

The company's organisational structure as at 31 December 2023 consisted of personnel working at the Trissino headquarters and personnel working at the Verona and Venice retail branches and at the permanent establishment in Pforzheim for an overall total of 115 employees (this value refers to the employment figure at the end of the year, which differs from the figure indicated in the notes to the financial statements where the average number of employees during the year 2023 was indicated).

Workforce may be broken by position as follows:

- 4 managers;

- 3 middle managers;

- 49 white-collar workers;

- 59 white-collar workers (including 1 trainee).

Research and development activities

During the financial year that ended on 31 December 2023, the company, as part of its non-routine activities, continued to develop Research and Development projects and/or activities, investing resources in several areas, also with regard to the design and aesthetic aspects of the products marketed.

The Board of Directors trusts that the positive outcome of the above will generate, as was the case for the financial year 2023, a (further) competitive strengthening of the company with favourable economic effects. R&D activities continue in the 2024 financial year.

The company did not deem it appropriate to capitalise the costs related to the aforementioned Research and Development activities, expensing them entirely in the year they were incurred.

Relations with subsidiaries, associates and parent companies

With regard to the provisions of point 2) of the third paragraph of Article 2428 of the Italian Civil Code, it is specified that the company holds the equity investments reported in the Explanatory notes to which reference is made for more detailed information. During 2023, The company carried out transactions with the companies referred to in article 2428.2.3 of the Italian Civil Code. More specifically, they refer to commercial relations, regulated at arm's length, held with the companies Marco Bicego USA and MBJ KK for the distribution of products in the US and Japanese markets (the tables below, and at the foot of them, show the main balance sheet and profit and loss account results as of 31/12/2023 of the relations held with the aforementioned companies). With regard to the equity investment in VIA DEL LAVORO SRL, acquired as a result of the Merger of MB66 S.R.L., during the year 2023 the company recorded a non-interest-bearing loan of euro 725,000= disbursed (by MB66 S.R.L.) to VIA DEL LAVORO S.R.L., and partially repaid, during the year 2023 to Marco Bicego S.p.a. for euro 125,000=. The net balance of the loan as at 31/12/2023, amounting to EUR 600,000, is recorded in the company's financial statements under financial fixed assets. No transactions of goods and services took place with VIA DEL LAVORO S.R.L. during the year 2023, not even with reference to the merged company MB66 S.R.L.

Current receivables with related companies

Payables and loans and borrowings with related companies

The above receivables, of a commercial nature, are claimed as to euro 6,835,633= from Marco Bicego USA, and as to euro 2,320,133= from MBJ KK.

Payables, also of a commercial nature, relate to insignificant purchases made by Marco Bicego S.p.a. almost entirely from its Japanese subsidiary.

It should also be noted that in the intercompany transactions with Marco Bicego USA and MBJ KK, Marco Bicego S.p.a. accounted for the year 2023:

- costs of approx. EUR 13K= from the purchase of merchandising material from Marco Bicego USA;

- core revenues, net of returns, of approx. Euro 20,646K=, of which Euro 20,107K to Marco Bicego USA, and Euro 539K to and MBJ KK.

- revenues from ancillary management amounting to approximately Euro 373K, of which Euro 362K from Marco Bicego USA, and Euro 11K from MBJ KK.

Related party transactions, including intragroup transactions, are not atypical or unusual, as they are part of the normal activities of the group companies. These transactions are settled at arm's length conditions, taking into account the characteristics of the supplied goods and services.

Treasury shares

Pursuant to articles -bis and 2428 of the Italian Civil Code, it is noted that the company did not hold own shares at the reporting date.

Shares of the parent company

This does not apply.

It should be noted, however, that by deed dated 06 December 2023, MB66 HOLDING S.R.L. was established, which, from the effectiveness of its incorporation, controls MARCO BICEGO SPA by virtue of holding no. 189,875= shares in full ownership and no. 60,125= shares in bare ownership but with voting rights in the shareholders' meeting.

Business outlook

In the year 2024, the economic scenario in which the company operates is still characterised by high levels of inflation, which has led to a slowdown in many major economies, and a climate of increasing uncertainty due also to an international scenario threatened by multiple conflicts. The gold sector, in particular, is expected to be affected by the level reached by the price of raw materials and gold, the growth trend of which shows no sign of abating significantly.

The company remains, however, focused on a path of growth and development of its business by promoting an increasing push on the online sales channel but also through the opening of new sales outlets for its products, in a context, moreover, with a strong focus on sustainability concepts and where high ESG standards are an indispensable characteristic that brands seek in their suppliers. In this regard, the company confirms its desire to achieve RJC (Responsible Jewellery Council) certification, an organisation that today brings together more than two thousand companies in the jewellery and watch-making sector with the aim of establishing regulations and certifications in the diamond, gold and precious metals supply chain in general, and whose primary objective is to contribute to the creation of a responsible supply chain at world level, capable of promoting trust in the global high jewellery and matchmaking industry. In addition, the company activated the process to implement the code of ethics and the organisational model in accordance with the dictates of Law 231/2001.

The expectation for the year 2024, in economic terms, is to increase turnover compared to that achieved in the year 2023, as well as to further improve its equity and financial strength. The results of the first months of the year 2024 seem to confirm this trend. In this regard, it should also be noted that the directors, together with other top management figures in the company, constantly monitor the economic and financial performance and results of the company strategy, using appropriate organisational structures and analysis tools.

Use of financial instruments relevant for evaluating the operating results, financial position and cash flows

At 31 December 2023, the company had no derivatives.

During the year 2023, however, MARCO BICEGO SPA used derivative financial instruments (forward purchases and sales), entered into to hedge against the risk of fluctuations in the price of the raw material -gold- and the euro/US dollar exchange rate, and entered into gold lending contracts for the same reason, which were not in place, however, as of 31/12/2023.

Conclusions

Dear Shareholder, based on that described above and that set out in the notes, you are invited to:

- approve the financial statements at 31 December 2023 and the notes thereto, accompanied by this report;

- allocate the net profit for the year as proposed in the notes to the financial statements.

RECONVI

REPORT OF THE INDEPENDENT AUDITING

FIRM PURSUANT TO ART. 14 OF LEGISLATIVE DECREE 27 JANUARY 2010, NO. 39

To the Shareholders of Marco Bicego S.p.A.

Report on the audit of the financial statements Opinion

We have audited the financial statements of Marco Bicego S.p.A. (the Company), comprising the balance sheet as of 31 December 2023, the income statement, the cash flow statement for the year ended on that date and the notes thereto.

In our opinion, the financial statements give a true and fair view of the financial position of the Company as of 31 December 2023, and of its results of operations and cash flows for the year that ended on that date in accordance with the Italian regulations governing the drawing up of financial statements.

Elements underlying the opinion

We conducted the audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under these standards are further described in the Auditing Company's Responsibilities for the Audit of the Financial Statements section of this report. We are independent of Marco Bicego S.p.A. in accordance with the rules and principles of ethics and independence applicable in the Italian legal system to the audit of financial statements. We believe that we have obtained sufficient audit evidence to provide a basis for our opinion.

Responsibility of the Directors and the Board of Auditors for the financial statements

The Directors are responsible for the preparation of financial statements that give a true and fair view in accordance with the Italian regulations governing the criteria for their preparation and, within the terms required by law, for such internal control as they determine to be necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

The Directors are responsible for assessing the Company's ability to continue as a going concern and, in preparing the financial statements, for the appropriateness of using the going concern basis of accounting, as well as for adequate disclosures in this regard. Directors use the going concern basis of accounting in preparing the financial statements unless they have assessed that the conditions exist for the liquidation of the Company either due to the intention of the company or because they have no realistic alternatives to such choices.

The Board of Statutory Auditors is responsible for supervising, within the terms established by law, the process of preparing the Company's financial reporting.

Responsibility of the independent auditing firm for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion. Reasonable assurance means a high level of assurance, which, however, does not provide the guarantee that an audit carried out in accordance with international auditing standards (ISA Italia) will always identify any material error. Misstatements may arise from fraud or error and are considered material if they, individually or in the aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

In the context of the audit conducted in accordance with International Standards on Auditing (ISA Italia), we exercised professional judgment and maintained professional scepticism throughout the audit. Furthermore:

- we have identified and assessed the risks of material misstatement of the financial statements, whether due to fraud or error; we have designed and performed audit procedures responsive to those risks; and we have obtained audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting a material misstatement resulting from error, because fraud may involve collusion, forgery, intentional omissions, misrepresentations, or overrides of internal control;

- we obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control;

- we have assessed the appropriateness of the accounting principles used as well as the reasonableness of the accounting estimates made by the Directors, including the related disclosures;

- we concluded on the appropriateness of the management's use of the going concern basis of accounting and, based on the audit evidence obtained, on any material uncertainty related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. Where a material uncertainty exists, we are required to draw attention in the auditor's report to the relevant financial statement disclosures or, if such disclosures are inadequate, to reflect that fact in our opinion. Our conclusions are based on the evidence obtained as of the date of this report. However, subsequent events or circumstances may cause the Company to cease to operate as a going concern;

- we evaluated the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that provides a fair representation.

We communicated with those charged with governance, identified at an appropriate level as required by ISA Italia the planned scope and timing of the audit and the significant audit findings, including any significant deficiencies in internal control identified during the audit.

Report on other legislative and regulatory provisions

Opinion pursuant to art. 14, paragraph 2, letter e), of Legislative Decree No. 39/10

The Directors of Marco Bicego S.p.A. are responsible for the preparation of the report on the management of Marco Bicego S.p.A. as of 31 December 2023, including its consistency with the financial statements and its compliance with the law.

We have carried out the procedures set out in the auditing principle (SA Italia) no. 720B a1 in order to express an opinion on the consistency of the management report with the financial statements of Marco Bicego S.p.A. as of 31 December 2023 and on its compliance with the law, as well as to issue a statement on any significant errors.

In our opinion, the management report is consistent with the financial statements of Marco Bicego S.p.A. as of 31 December 2023 and has been prepared in accordance with the law.

With reference to the declaration referred to in art. 14, par. 2, letter e), of the Legislative Decree No. 39/10, issued on the basis of the knowledge and understanding of the company and its context acquired during the audit, we have nothing to report.

RECONVI S.r.l.

Massimo Corsetti Shareholdee

Monteviale (VI), 6 June 2024

MARCO BICEGO S.p.A.

Registered office: VIA DELL'INDUSTRIA N. 33 TRISSINO (VI)

Listed in the Companies Registry of VICENZA

Tax Code and registration number: 02785630241

Registered with the Business Information Index of VICENZA no. 275062

Subscribed and Fully paid-up Share Capital: Euro 250,000.00

VAT no.: 02785630241

Single-member company

REPORT OF THE BOARD OF STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS AT 31 December 2023

To the Shareholders' Meeting of MARCO BICEGO S.p.A.

Introduction

During the financial year that ended 31 December 2023, the Board of Statutory Auditors performed the functions envisaged by articles 2403 et sequitur of the Italian Civil Code. The functions envisaged by article 2409-bis of the Italian Civil Code were carried out by the independent auditors RECONVI SRL that issued their report pursuant to article 14 of Legislative decree no. 39/2010 on 6 June 2024.

Therefore, this report covers the -Report pursuant to article 2429.2 of the Italian Civil Code".

Report on the supervisory activities pursuant to article 2429.2 of the Italian Civil Code

During the year ended 31 December 2023, we conducted our work in accordance with the legal requirements and with the Rules of conduct of the board of statutory auditors issued by the Italian accounting profession.

Of this activity and the results achieved we inform you with this report.

The financial statements of MARCO BICEGO S.p.A. as at 31.12.2023, drawn up in accordance with the Italian regulations governing their preparation, have been submitted to you for your examination, showing a profit for the year of EUR 7,027,274. The financial statements were made available to us within the legal deadline.

Since the Board of Statutory Auditors was not entrusted with the legal audit, it carried out the supervisory activities on the financial statements provided for in Rule 3.8 of the "Rules of Conduct for the Board of Statutory Auditors of Unlisted Companies", consisting of an overall summary check aimed at verifying that the financial statements had been correctly drawn up. Verification of compliance with the accounting data is, in fact, the responsibility of the independent auditor.

The independent auditor Reconvi Srl has provided us with its report dated 06 June 2024 containing an unmodified opinion.

According to the report of the independent auditor, the financial statements as at 31.12.2023 give a true and fair view of the financial position, results of operations and cash flows of your Company and have been prepared in accordance with the regulations governing their preparation.

1) Supervisory activities pursuant to Articles 2403 et seq. of the Italian Civil Code

We oversaw the observance of the law and the articles of association, the observance of the principles of proper management, and in particular the suitability of the organisational, administrative and accounting structure adopted by the Company, and on its effective operations.

We attended the shareholders' meetings and the meetings of the board of directors and, on the basis of the available information, we did not note any violations of the law or the Articles of Association, or transactions that were manifestly imprudent, hazardous, in potential conflict of interest or such as to compromise the integrity of the company's assets.

During the meetings held, we acquired information from the board of directors on the general trend in operations and the outlook for the future as well as on the most significant transactions in terms of size or characteristics, carried out by the company and its subsidiaries and, on the basis of the acquired information, we have no particular observations to make.

We met with the independent auditors and, in addition to reading their report on the financial statements at 31 December 2023, we did not identify any critical issues that should be highlighted in this report.

We have acquired knowledge of and supervised the adequacy of the organisational, administrative and accounting structure and its actual functioning from the heads of departments, and in this regard we have no particular observations to report.

We acquired knowledge and monitored, to the extent of our remit, the adequacy and operation of the administrative and accounting system as well as its reliability to correctly represent the operating events, by obtaining information from the department managers and examining company documents. We have no special observations to make in this regard.

No complaints were received from shareholders pursuant to article 2408 of the Italian Civil Code.

No complaints were filed with the Court pursuant to Article 2409 of the Civil Code.

We have not made any report to the Board of Directors pursuant to and for the purposes of Article 25-octies of Legislative Decree 12 January 2019, No. 14.

We did not receive any reports from public authorities pursuant to article 25-novies of Italian Legislative Decree No. 12 January 2019, No. 14.

We did not issue any opinions required by law during the year.

During our supervisory activity, as described above, no other significant events emerged that need to be detailed in this report.

2) Comments on the financial statements

According to the report of the independent auditor, the financial statements give a true and fair view of the financial position of the Company MARCO BICEGO S.p.A. as of 31.12.2023, the results of its operations and its cash flows for the year then ended, in accordance with Italian regulations governing the criteria for their preparation.

As far as we are aware, the directors, in preparing the financial statements, did not depart from law provisions pursuant to article 2423.5 of the Italian Civil Code.

In accordance with the relevant provision set out in the Articles of Association, the Ordinary Shareholders' Meeting for the approval of the financial statements was convened within a longer period of 180 days from the end of the reporting period

Pursuant to Article 2426, no. 5 of the Italian Civil Code, we expressed our opinion in favour of recognition to balance sheet assets of start-up and expansion costs of € 34,032.

Pursuant to Article 2426, no. 6 of the Italian Civil Code, we expressed our opinion in favour of recognition to balance sheet assets of start-up costs of € 363,109.

3) Comments and proposals regarding the approval of the financial statements

Considering the results of the work we performed and the opinion expressed in the audit report issued by the independent auditor, we do not find any reasons to prevent the shareholders from approving the financial statements for the year ended 31 December 2023, as prepared by the directors.

The Board agreed with the proposal for allocation of the profit made by the directors in the explanatory notes.

MARCO BICEGO S.p.A.

Head Office in Trissino (VI) - Viale dell'Industria n. 33

Share capital: € 250,000.00 fully paid-up

Tax code and Vicenza company registration no. 02785630241

-Single-member company-

MINUTES OF THE ORDINARY SHAREHOLDERS' MEETING

On 18 July 2024 at 11:30 a.m., at the Company's registered office, the Shareholders' Meeting was held on second call to discuss and pass resolutions on the following

agenda:

1) Approval of the financial statements as at 31/12/2023 and related and consequent resolutions.

2) Presentation of the consolidated financial statements as at 31/12/2023.

3) Renewal of the Board of Auditors and determination of remuneration.

4) Renewal of the auditing company and determination of remuneration.

5) AOB.

Marco Bicego, Chairman of the Board of Directors, took the chair pursuant to the current Articles of Association and with the consent of the shareholders' meeting called Luca Cicciarella, who accepted, to act as Secretary taking the minutes.

The Chairman ascertains the validity of the meeting pursuant to Article 2366 of the Italian Civil Code, as the following are present in the place of the meeting:

- the shareholder MB66 Holding Srl, holder of voting rights on all the shares issued by the Company, represented by Ms Valentina Bertacco;

- the Board of Statutory Auditors represented by the standing auditors Pietro Hyvoz, Ennio Vial and Giuliano Giacomazzi;

- the entire administrative body including himself, the Chairman of the Board of Directors and managing director Giuseppe Bicego.

The Chairman, after informing that the attendance sheet signed by those attending the meeting will be kept on file in the company's records, declared the proceedings open and proceeded to the discussion of the agenda.

Moving on to the first and second points on the agenda, the Chairman read out the directors' report prepared by the Board of Directors and illustrated the financial statements and the key points of the performance of the corporate activities during 2023, presenting the main information and the results contained in the financial statements. Pietro Hyvoz, Chairman of the Board of Statutory Auditors, took the floor and read out the Statutory Auditors' report and the report of the Independent Auditors.

After some speeches, the shareholders' meeting, having taken note of the Board of Directors' Report, the report of the Board of Statutory Auditors, the report of the Independent Auditors and examined the ordinary financial statements as at 31 December 2023, which closed with a profit of Euro 7,027,284.48

resolved

unanimously, with an open vote by show of hands, to approve the financial statements for the year ended 31 December 2023 and the accompanying Directors' Report, as presented by the Board of Directors.

It also resolved to allocate the profit for the year, amounting to EUR 7,027,284.48=:

- as for Euro 5,897,284.40 to the extraordinary reserve;

- as for Euro 1,130,000.00= as a dividend (equal to Euro 4.52= per share) in favour of the shareholders entitled to profits on the 250,000= shares issued by the Company, and more specifically:

-- Euro 858,235.00= in favour of the shareholder MB66 Holding Srl, holder of the right to profits on 189,875= shares; this amount will be paid, potentially in several instalments, by 31/12/2024;

-- Euro 271,765.00= in favour of Mr Giuseppe Bicego holder of the right to profits (alone) on 60,125= shares; this amount, net of tax withholding (net dividends paid totalling euro 201,106.10=) will be paid, potentially in several instalments, by 31/12/2024;

No allocations were made to the legal reserve, as it had already reached the legal limit, and to the reserve for unrealised foreign exchange gains, as a negative balance (losses exceeding profits) was recorded from the translation of foreign currency items at 31/12/2023. In addition, the Shareholders' Meeting resolved that the reserve for gains on derivatives, recorded in the amount of Euro 136,808.44=, as there were no derivative financial instruments outstanding as of 31/12/2023, will be reclassified in the year 2024 as an increase to the extraordinary reserve.

Therefore, on conclusion of the voting, the 2023 consolidated financial statements in relation to which the main figures were shown were presented, and the reports of the Board of Statutory Auditors and the Independent Auditors were read out: the (sole) shareholder duly took note.

Turning to the discussion of the third item on the agenda, the Chairman stated that with the approval of the financial statements as at 31 December 2023, the three-year term of office of the Board of Statutory Auditors expired and it was therefore necessary to appoint a new Board.

The provisions of Articles 2397 et seq. of the Italian Civil Code apply to the appointment of auditors; the Board of Statutory Auditors remains in office for three financial years, i.e. until the date of approval of the financial statements for the year ending 31 December 2026, and the annual remuneration of the auditors must be determined by the Shareholders' Meeting at the time of their appointment for the entire term of their office.

The Chairman proposed to appoint, for the three-year period 2024-2026, Mr. Hyvoz Pietro (confirmed), Mr. Ennio Vial (confirmed) and Mr. Giuliano Giacomazzi (confirmed) as standing auditors, and Mr. Marco Ongarato (confirmed) and Ms Sabrina Strazzabosco (confirmed) as alternate auditors, and also to establish a total gross annual remuneration in favour of the regular auditors of euro 28,000= (euro twenty-eight thousand/00) plus VAT and supplementary social security contribution.

The Chairman pointed out that the candidates made themselves available to accept the appointment and certified the non-existence of causes of ineligibility and incompatibility provided for by law, as well as the existence of the regulatory and/or statutory requirements prescribed for the respective offices; the Chairman then read out, pursuant to Article 2400 of the Italian Civil Code, the administration and control offices held, and provided, by the candidates members of the MARCO BICEGO S.P.A. control body.

The Chairman invited the Meeting to deliberate on the matter.

Hearing the above, the assembly, after due discussion

resolved

(i) to appoint, for the three-year period 2024-2026, and thus until the approval of the financial statements for the year ending 31/12/2026, as members of the Board of Statutory Auditors of MARCO BICEGO S.P.A:

- to the office of Chairman of the Board of Statutory Auditors: Mr. Pietro Hyvoz, born in Bergamo (BG) on 29/08/1962, tax code: HYVPTR62M29A794I, domiciled for the office in Viale dei Patrioti n. 49/51 - 36012 Asiago (VI), registered with the Order of Chartered Accountants and Accounting Experts of Vicenza (VI) under no. 1460 A, enrolled in the Register of Auditors under no. 30018 (Ministerial Decree of 12/04/1995 published in the Official Gazette no. 31BIS of 21/04/1995);

- to the office of standing member of the Board of Statutory Auditors: Mr. Ennio Vial, born in Treviso (TV) on 29/03/1972, tax code: VLINNE72C29L407F, domiciled for the office in Via Gallio n. 21 - 31033 Castelfranco Veneto (TV), registered with the Order of Chartered Accountants and Accounting Experts of Treviso (TV) under no. 921 A, enrolled in the Register of Statutory Auditors under no. 130877 (Ministerial Decree of 06/10/2003 published in the Official Gazette no. 81 of 17/10/2003);

- to the office of standing member of the Board of Statutory Auditors: Mr. Giuliano Giacomazzi, born in SAINT-JEAN-DE-MAURIENNE (France) on 07/06/1950, tax code: GCMGLN50H07Z110C, domiciled for the office in Via Ponchini n. 7 - 31033 Castelfranco Veneto (TV), enrolled in the Order of Chartered Accountants and Accounting Experts of Treviso (TV) under no. 172 A, enrolled in the Register of Statutory Auditors under no. 27428 (Ministerial Decree of 12/04/1995, published in the Official Gazette no. 31BIS of 21/04/1995);

- as alternate auditor: Mr. Marco Ongarato, born in Montebelluna (TV) on 15/03/1976, tax code: NGRMRC76C15F443T, domiciled for the office in Via San Venanzio Fortunato n. 2/E - 31033 Castelfranco Veneto (TV), registered with the Order of Chartered Accountants and Accounting Experts of Treviso (TV) under no. 1177 A, enrolled in the Register of Statutory Auditors under no. 151744 (Ministerial Decree of 23/07/2008 published in the Official Gazette no. 64 of 19/08/2008);

- as alternate auditor: Ms. Sabrina Strazzabosco, born in Asiago (VI) on 12/12/1978, tax code: STRSRN78T52A465Z, domiciled for the office in Viale dei Patrioti n. 49/51 - 36012 Asiago (VI), registered with the Order of Chartered Accountants and Accounting Experts of Vicenza (VI) under no. 1605 A, enrolled in the Register of Auditors under no. 143834 (Ministerial Decree of 17/04/2007 published in the Official Gazette no. 34 of 27/04/2007).

(ii) to set at Euro 28,000= the total gross annual remuneration, plus VAT and supplementary social security contribution, due to the Statutory Auditors, of which Euro 12,000= gross annual remuneration, plus VAT and supplementary social security contribution, to the Chairman of the Board of Statutory Auditors, and Euro 8,000= gross annual remuneration, plus VAT and supplementary social security contribution, to each Statutory Auditor;

(iii) to instruct the Chairman to take all necessary steps to publicise the appointment of the control body.

Turning to the discussion of the fourth item on the agenda, the Chairman stated that with the approval of the financial statements as at 31 December 2023, the mandate for the audit assigned to the company RECONVI S.R.L. also expired; the Chairman proposed to confirm the appointment of the legal audit of the accounts of MARCO BICEGO S.P.A, for the three-year period 2024-2026, to the same auditing company RECONVI S.R.L. under the terms of the proposal submitted by it, also reporting that the Board of Statutory Auditors has provided the Shareholders' Meeting with a motivated proposal, pursuant to Article 13, paragraph 1 of Legislative Decree No. 39 of 27 January 2010.

The Chairman then invited the Shareholders' Meeting to deliberate on the matter, recalling that the Shareholders' Meeting was also called upon to determine the fee payable to the auditing firm for the entire duration of the assignment.

At the end of the presentation, after appropriate discussion, the shareholders' meeting unanimously

resolved

(i) to confirm the assignment of the legal audit of the accounts of MARCO BICEGO S.P.A. to the company RECONVI S.R.L. - with registered office in Vicenza (Vi), Viale Zileri n. 4/17, Tax Code: 03176950248, registered with the Register of Auditors under No. 136011 - for the three-year period 2024-2026, which will end with the approval of the financial statements as at 31/12/2026;

(ii) to set the annual fee payable to the auditing firm for the three-year period 2024-2026 at EUR 12,500 plus reimbursement of any expenses incurred in the performance of the work at a flat rate of 6% of the fees and VAT;

(iii) to instruct the Chairman to take all necessary steps to publicise the appointment of the independent auditor.

There being no further resolutions to pass and no requests to take the floor, the meeting was closed at 12:30 a.m. after drawing up, reading and approving these minutes.